(a) A public utility operating and organized as an improvement district and serving residents of the extinct municipal corporation shall continue in operation.

(b) (1) (A) A public utility operated by the extinct municipal corporation is transferred to the receiver.

(B) Funds held by the extinct municipal corporation in connection with the operation of the public utility are transferred to the receiver, including without limitation customer deposits and debt reserve funds.

(2) The receiver shall continue to:

(A) Operate the public utility;

(B) Collect all fees and taxes due to and all funds associated with the public utility; and

(C) Continue to pay any bonded indebtedness of the public utility.

(3) The transfer of the public utility to the receiver is subject to any liens held on the public utility that existed at the time of the transfer under this chapter, including without limitation mortgages and security interests.

(4) If a public utility is transferred under this section, the Department of Finance and Administration shall continue to collect as provided by law pledged or dedicated sales and use taxes levied for bonded indebtedness of the public utility and remit the collections to the receiver under § 14-62-105(b) until the indebtedness is satisfied.

(c) Within sixty (60) days of the appointment of the receiver under § 14-62-104, the receiver shall publish a notice in a newspaper with general circulation in the county in which the municipal corporation is located that the opportunity for the acquisition of the public utility shall:

(1)

(A) Be first extended to an adjacent municipality located within five (5) miles of the extinct municipal corporation, and if a majority of the governing body of the adjacent municipality votes to acquire the public utility under this subdivision (c)(1)(A), the acquisition transaction shall be completed within one hundred eighty (180) days of the appointment of the receiver under § 14-62-104.

(B) If more than one (1) adjacent municipality located within five (5) miles of the extinct municipal corporation votes to acquire the public utility under subdivision (c)(1)(A) of this section, the adjacent municipalities shall be given priority based on population from largest to smallest;

(2)

(A) Be next extended to the county in which the extinct municipal corporation is located if the public utility is not acquired by an adjacent municipality under subdivision (c)(1) of this section.

(B) If a majority of the governing body of the county in which the extinct municipal corporation is located votes to acquire the public utility under subdivision (c)(2)(A) of this section, the acquisition transaction shall be completed within two hundred seventy (270) days of the appointment of the receiver under § 14-62-104;

(3) (A) (i) Be next extended to an adjacent public utility operated and organized as an improvement district and located within five (5) miles of the extinct municipal corporation if the public utility is not acquired by the county in which the extinct municipal corporation is located under subdivision (c)(2) of this section.

(ii) If a majority of the governing body of the adjacent public utility improvement district votes to acquire the public utility under subdivision (c)(3)(A)(i) of this section, the acquisition transaction shall be completed within three hundred sixty (360) days of the appointment of the receiver under § 14-62-104.

(B) If more than one (1) adjacent public utility improvement district located within five (5) miles of the extinct municipal corporation votes to acquire the public utility under subdivision (c)(3)(A) of this section, the adjacent public utility improvement districts shall be given priority based on evidence of economic viability and the number of customers served from largest to smallest;

(4) Be next extended to an entity other than the entities listed in subdivisions (c)(1)-(3) of this section if none of the entities listed in subdivisions (c)(1)-(3) of this section acquire the public utility of the extinct municipal corporation, and the acquisition transaction shall be completed within four hundred fifty (450) days of the appointment of the receiver under § 14-62-104; and

(5) (A) (i) (a) Not be further extended and remain with the receiver if none of the entities in subdivisions (c)(1)-(4) of this section acquire the public utility of the extinct municipal corporation.

(b) The receiver shall establish a suburban improvement district to operate the public utility using the authority set out in § 14-92-201 et seq. for the purpose of the institution of bankruptcy proceedings for the public utility.

(ii)

(a) A suburban improvement district created under subdivision (c)(5)(A)(i) of this section is created by operation of law without the statutory requirements under § 14-92-201 et seq. concerning petitions or hearings or other statutory requirements at the discretion of the circuit court of the Sixth Judicial District.

(b) The receiver shall serve as the board of commissioners, and the boundaries of the suburban improvement district created under subdivision (c)(5)(A)(i) of this section shall include the service area of the public utility of the extinct municipal corporation.

(iii) A suburban improvement district created under subdivision (c)(5)(A)(i) of this section is considered an instrumentality of the state for purposes of bankruptcy proceedings.

(B) At the conclusion of any bankruptcy proceeding instituted under subdivision (c)(5)(A) of this section, the public utility shall be transferred to the county.

(d) The receiver may request a reasonable extension of time from the circuit court of the Sixth Judicial District for the purpose of the completion of an acquisition of a public utility under subsection (c) of this section.