7-7-4201. Limitation on amount of bonded indebtedness. (1) Except as provided in 7-7-4202, a city or town may not issue bonds or incur other indebtedness for any purpose in an amount that with all outstanding and unpaid indebtedness exceeds 2.5% of the total assessed value of taxable property, determined as provided in 15-8-111, within the city or town, as ascertained by the last assessment for state and county taxes.
(2) The issuing of bonds for the purpose of funding or refunding outstanding warrants or bonds is not the incurring of a new or additional indebtedness but is merely the changing of the evidence of outstanding indebtedness.
(3) The limitation in subsection (1) does not apply to bonds issued for the repayment of tax protests lost by the city or town.