Misspent proceeds of general obligation bonds

(1) If a court of competent jurisdiction determines that the proceeds of an issue of general obligation bonds have been used by a public body for expenditures that are not capital costs permitted by Article XI, section 11L, of the Oregon Constitution, or that are not costs of capital construction or capital improvements permitted by Article XI, sections 11 and 11b, of the Oregon Constitution, the court may order the public body to: (a) Replace the misspent proceeds with interest, on a reasonable schedule determined by the court, from moneys other than the tax revenues that the public body levies to pay the debt service; and (b) Use the replaced moneys, as appropriate, for capital costs, for the costs of capital construction or capital improvements or to pay the debt service. (2) If the public body fails to comply with an order to replace the misspent proceeds or acknowledges that the public body is unable to replace the misspent proceeds, the court may determine that a portion of the future levies to pay the debt service is subject to the limits of Article XI, sections 11 and 11b, of the Oregon Constitution, by calculating the amount of the tax revenues that are necessary to pay the principal and interest on the bonds that is allocable to the misspent proceeds. (3) An action may not be filed or maintained against a public body because of an alleged expenditure of the bond proceeds of general obligation bonds for purposes other than capital costs, capital construction or capital improvements, if the misspent moneys are less than $5,000.