§ 14-78-103 - Authorization for issuance of obligations.
14-78-103. Authorization for issuance of obligations.
(a) (1) Municipalities and counties are authorized to issue obligations for the purpose of acquiring, constructing, installing, and renting real property or tangible personal property having an expected useful life of more than one (1) year.
(2) The maximum term and maximum interest rate for the obligations shall be as set forth in Arkansas Constitution, Amendment 78.
(3) The amount of obligations issued shall be sufficient to pay all or a portion of the cost of accomplishing the specified purpose.
(4) Proceeds of the obligations may pay all or a portion of the costs of issuing the obligations.
(5) The obligations shall be issued pursuant to ordinance adopted by the legislative body specifying the principal amount of the obligations to be issued, the purpose or purposes for which the obligations are to be issued, and provisions with respect to the obligations.
(6) A municipality shall not authorize the issuance of obligations unless at the time of issuance, the aggregate principal amount of short-term financing obligations, including the obligations to be issued, outstanding and unpaid, will equal five percent (5%) or less of the assessed value of taxable property located within the municipality as determined by the last tax assessment completed prior to the issuance of the obligations to be issued.
(7) A county shall not authorize the issuance of obligations unless at the time of issuance, the aggregate principal amount of short-term financing obligations, including the obligations to be issued, outstanding and unpaid, will equal two and one-half percent (2.5%) or less of the assessed value of taxable property located within the county as determined by the last tax assessment completed prior to the issuance of the obligations to be issued.
(b) The obligations may:
(1) Be in registered or other form;
(2) Be in denominations exchangeable for obligations of another denomination;
(3) Be payable in or out of the state;
(4) Be issued in one (1) or more series, bearing the date or dates of maturity;
(5) Be payable in the medium of payment, subject to terms of redemption; and
(6) Contain other terms, covenants, and conditions as the ordinance or short-term financing agreement may provide, including, without limitation:
(A) Terms pertaining to custody and application of proceeds;
(B) Remedies on default;
(C) The rights, duties, and obligations of the officers and legislative body of the issuer and the trustee, if any; and
(D) The rights of the owners of the obligations.
(c) Successive obligations may be issued for the purpose of financing the same property.
(d) (1) The total annual principal and interest payments in each fiscal year on the obligations shall be charged against and paid from the general revenues of the issuer for the fiscal year, including road fund revenues.
(2) The obligations shall not be deemed to be revenue bonds for purposes of any statute, and it shall not be necessary for a public hearing to be held by the legislative body or a delegate thereof on the issuance of the obligations.
(e) (1) The ordinance authorizing the obligations may provide for execution by the chief executive officer of the issuer of a short-term financing agreement or agreements defining the rights of the owners of obligations and, in the case of a trust indenture, provide for the appointment of a trustee for the owners of the obligations.
(2) The ordinance or short-term financing agreement may provide for priority between and among successive issues and may contain any of the provisions set forth in subsection (b) of this section and any other terms, covenants, and conditions that are deemed desirable.
(f) The obligations may be sold at public or private sale for the price, including, without limitation, sale at a discount and in a manner as the legislative body of the issuer may determine.
(g) The obligations shall be signed by the chief executive officer of the issuer and shall be executed in the manner provided by the Registered Public Obligations Act of Arkansas, 19-9-401 et seq.
(h) It shall be plainly stated in the obligation, ordinance, or short-term financing agreement that the obligation has been issued under the provisions of this chapter and Arkansas Constitution, Amendment 78.