(1) Assessment bonds are not a general obligation of the local entity that issues them.
(2) A local entity that issues assessment bonds:
(a) may not be held liable for payment of the bonds except to the extent of:
(i) funds created and received from assessments against which the bonds are issued;
(ii) improvement revenues; and
(iii) the local entity's guaranty fund under Section 11-42-701 or, if applicable, reserve fund under Section 11-42-702; and
(b) is responsible for:
(i) the lawful levy of all assessments;
(ii) the collection and application of improvement revenues, as provided in this chapter;
(iii) the creation and maintenance of a guaranty fund or, if applicable, a reserve fund; and
(iv) the faithful accounting, collection, settlement, and payment of:
(A) assessments and improvement revenues; and
(B) money in a guaranty fund or, if applicable, a reserve fund.
(3) If a local entity illegally assesses property that is exempt from assessment, the local entity:
(a) is liable to the holders of assessment bonds for the payment of the illegal assessment; and
(b) shall pay the amount for which it is liable under Subsection (3)(a) from the local entity's general fund or other legally available money.