§ 6-20-1206 - Manner and terms of sale -- Maximum rate of interest.
6-20-1206. Manner and terms of sale -- Maximum rate of interest.
(a) (1) All school bonds shall be sold to the highest bidder at public sale.
(2) (A) (i) Advertisement of a bond sale under this section shall be published in at least one (1) newspaper published in the county with the publication to be one (1) time a week for two (2) weeks.
(ii) The first publication shall be at least thirteen (13) days before the date of the sale.
(B) (i) If the newspaper responsible for publishing the advertisement of a bond sale does not publish either or both of the two (2) publications required under this subsection within the required time frame, the Commissioner of Education may approve an alternate form of advertisement of the bond sale.
(ii) The public school district shall use the alternate form of advertisement only for the bond sale related to the failed publication.
(iii) Within thirty (30) days after the sale of bonds is completed for which an alternate form of advertisement is used by a public school district under this subdivision (a)(2)(B), the public school district shall provide by one (1) publication in a newspaper published in the county a notice:
(a) Of the date of the sale and the principal amount of the bonds sold; and
(b) That the alternate form of advertisement was used.
(3) At any time after receiving bids on bonds, all bids may be rejected and the bonds readvertised for the time and in the manner provided under subdivision (a)(2) of this section.
(4) The bonds shall bear interest at a rate or rates not exceeding the maximum lawful rate as defined in subsection (b) of this section.
(5) Bonds may be sold at a discount, but in no event shall the school district be required to pay more than the maximum lawful rate of interest on the amount received.
(6) Bonds may be sold with the privilege of conversion into bonds bearing a lower rate or rates of interest, but the school district shall receive no less and pay no more in principal and interest combined than it would receive and pay if the bonds were not converted.
(7) The school district shall pay the expenses of issuing the bonds and may supply the opinion of attorneys approving the validity of the bonds.
(8) No brokerage, agent's fees, or commissions of any kind for securing bids for the sale of school district bonds shall be allowed or paid on any bond sale unless it is approved by the commissioner, and any person giving or receiving it without approval shall be guilty of a Class A misdemeanor.
(b) 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 a bid for bonds is accepted.
(c) The State Board of Education is authorized to set a maximum rate of interest at which school bonds may be sold under the conditions stated in subsection (a) of this section at any level below the maximum lawful rate.