§ 6-20-806 - Revolving loan bonds and certificates of indebtedness. - Arkansas Statutes

6-20-806. Revolving loan bonds and certificates of indebtedness.

(a) Each such loan that is to be amortized or paid in full, both principal and interest, within or at the end of ten (10) years from the date of its approval by the State Board of Education shall be evidenced by the school district's obligations that shall be designated and known as "revolving loan certificates of indebtedness". Each such loan whose date of final principal and interest maturity extends beyond the ten-year period shall be evidenced by the school district's obligations, which shall be designated and known as "revolving loan bonds".

(b) Revolving loan bonds and revolving loan certificates of indebtedness shall be in such form and denomination, shall have such dates and maturities, shall bear interest payable at such times, and at such rates, but not to exceed the maximum lawful rate as defined below, shall be payable at such place or places, shall contain such provisions as to registration of ownership, if in its opinion registration is desirable, and shall contain such provisions as to redemption prior to maturity at such prices, including such premiums, all as the state board shall determine. The bonds and certificates shall have all the qualities of negotiable instruments under the laws of the State of Arkansas, subject to the provisions as to registration of ownership set forth above.

(c) As used in this section, "maximum lawful rate" means a rate of interest equal to five percent (5%) per annum above the rate for primary credit or its functional equivalent in effect at the Federal Reserve bank in the Federal Reserve district in which Arkansas is located at the time an application for a loan is approved.

(d) The state board shall continually endeavor to keep the interest rates on revolving loan bonds and revolving loan certificates of indebtedness as low as possible, consistent with the continued and assured funding of the revolving loan program. To this end, the state board will obtain and consider relevant information regarding economic conditions and interest rates on comparable obligations and shall fix and alter interest rates of revolving loan bonds and revolving loan certificates of indebtedness as feasible and appropriate.