§ 15-4-608 - Guaranty agreement provisions.
15-4-608. Guaranty agreement provisions.
Guaranty agreements entered into by the Arkansas Economic Development Council under the provisions of this subchapter with respect to Act No. 9 bonds issued by any municipality or county or the Arkansas Development Finance Authority shall provide, among other things, that:
(1) (A) The council guarantees and the council is required to use the funds on deposit in the Revenue Bond Guaranty Reserve Account to meet amortization payments as guaranteed under this subchapter as the payments become due in the event and to the extent the issuer of the bonds is unable to meet such payments in accordance with the terms of the bond indenture when called on to do so by the trustee of the bondholders.
(B) Whenever the council, acting under the terms of the guaranty agreement, deems it necessary to assume the obligation of maintenance of any building or facility, the amortization payments of which the council has guaranteed under the provisions of this subchapter, the council may use funds on deposit in the account to pay insurance and maintenance costs required for the preservation of the building or facility and to protect the reserve account from loss or to minimize losses in such manner as deemed necessary and advisable by the council; and
(2) (A) The guaranty shall not be a general obligation of the council or of the State of Arkansas but shall be a special obligation. In no event shall the guaranty constitute an indebtedness of the council or of the State of Arkansas within the meaning of any constitutional or statutory limitation.
(B) Each guaranty agreement shall:
(i) Have plainly stated on the face thereof that:
(a) It has been entered into under the provisions of this subchapter;
(b) It does not constitute an indebtedness of the council or the State of Arkansas within any constitutional or statutory limitation; and
(c) The full faith and credit of the State of Arkansas or any of its revenues are not pledged to meet any of the obligations of the council under such a guaranty agreement; and
(ii) State that the obligation of the council under the guaranty shall be limited to the funds available in the account as authorized in this subchapter.