2012 Arkansas Code
Title 19 - Public Finance
Appendix -- title 19 - BOND ISSUES
5 Arkansas State Education Building Expansion Act -- Acts 1977, No. 554.

SECTION 1. This Act may be referred to and cited as the "Arkansas State Education Building Expansion Act."

SECTION 2. Whenever used in this Act, unless a different meaning clearly appears from the context:

"Agency" or "state agency" means any agency, board, officer, commission, department, division or institution of the State of Arkansas.

"Board" means the State Board of Education of the State of Arkansas.

"Bonds" means bonds and any series of bonds authorized by and issued pursuant to the provisions of this Act.

"1969 Bonds" means the State Board of Education of the State of Arkansas Building Revenue Bonds, dated March 1, 1969, authorized by and issued under Act No. 18 of the First Extraordinary Session of the Sixty-Sixth General Assembly of the State of Arkansas, approved February 15, 1968.

"Building" means the State Education Building, located on the State Capitol Grounds, including the structure known as the Arch Ford Education Building. The Building also includes the Expansion.

"Construct" means to acquire, construct, reconstruct, remodel, install, and equip any lands, buildings, structures, improvements, or other property, real, personal or mixed, useful in connection with the Expansion, and to make other necessary expenditures in connection therewith, by such methods and in such manner as the Board shall determine to be necessary or desirable to accomplish the powers, purposes and authorities set forth in this Act in accordance with Act No. 716 of 1975 as and to the extent applicable.

"Division" means any division, bureau, section, office or officer of the Department.

"Department" means the Department of Education of the State of Arkansas.

"Expansion" means any additions, extensions, or improvements to the Building and may include parking facilities to serve the Building and any necessary or appropriate remodeling and improvements to the present Building and its facilities, with appropriate equipment and furnishings, all as determined by the Board.

"Pledged revenues" means all revenues authorized by Section 7 of this Act to be pledged for the security and payment of the bonds.

SECTION 3. In addition to the powers, purposes and authorities set forth elsewhere in this Act, the Board is hereby authorized and empowered to:

(a) Construct an Expansion to the Building on a site or sites selected by the Board. In this regard, the appropriate agency in charge of the lands upon which a site may be selected is hereby authorized and directed to negotiate with the Board and to make available to the Board such lands as may be necessary for a site, including adequate parking area, at such location as will not unreasonably interfere with the needs of other state agencies.

(b) Arrange for the housing of the various divisions of the Department, other agencies as space and facilities may permit from time to time and with reference to other agencies to rent, lease or otherwise make available space upon such terms and conditions and for such rentals and charges, if any, as the Board may determine.

(c) Construct or cause to be constructed parking facilities to serve the Building, including the Expansion, and other agencies and the public having business therein.

(d) Obtain the necessary funds for accomplishing its powers, purposes and authorities.

(e) Purchase, lease or rent and receive bequests or donations of or otherwise acquire, sell, trade, or barter, any property, (real, personal or mixed) and convert into money and/or other property any property not needed or which cannot be used in its then current form.

(f) Refund and/or pay and discharge, or provide therefor, the outstanding 1969 Bond.

(g) Contract and be contracted with.

(h) Apply for, receive, accept and use any moneys and property from the Government of the United States of America, any agency, any state or governmental body or political subdivision, any public or private corporation or organization of any nature, or any indivdual.

(i) Invest and reinvest any of its moneys (in securities selected by the Board).

(j) Take such other action, not inconsistent with law, as may be necessary or desirable to carry out the powers, purposes and authorities set forth in this Act and to carry out the intent of this Act.

The powers, purposes and authorities set forth herein shall be carried out in accordance with the duly promulgated policies of the State Building Services Council, under and pursuant to Act No. 716 of 1975.

SECTION 4. The Building, including after its completion the Expansion, shall house the Department or such facilities and divisions thereof as the Board shall determine. In addition, the Building and the Expansion may house such agencies and others as space and facilities will permit from time to time, as determined by the Board.

SECTION 5. (a) The Board is hereby authorized and empowered to issue bonds, at one time or in series from time to time, and to use the proceeds thereof, together with any other available funds, for financing the costs of constructing the Expansion, together with all expenses incidental to and reasonably necessary in connection therewith, the expenses of the issuance of bonds, the creation and maintenance of reserves to secure the payment of the bonds, if the Board deems it necessary or desirable, and the payment of interest on the bonds, if necessary or desirable, until sufficient funds are available therefor out of pledged revenues.

(b) The bonds shall be authorized by resolution of the Board. The bonds may be coupon bonds, payable to bearer, or may be registrable as to principal only, or may be registrable as to both principal and interest; may contain such exchange provisions; may be in such form and denomination; may have such date or dates; may be stated to mature at such time or times; may bear interest payable at such times and at such rate or rates, provided that no bonds of any series may bear interest at a rate or rates exceeding 10% per annum; may be made payable at such places within or without the State of Arkansas; may be made subject to such terms of redemption in advance of maturity at such times and at such prices; and may contain such other terms and conditions, all as the Board shall determine. The bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas, subject to provisions as to registration of ownership as set forth above. The authorizing resolution may contain any terms, covenants and conditions that are deemed necessary or desirable by the Board, including without limitation, those pertaining to the creation and maintenance of various funds and reserves, the nature and extent of the security, the issuance of additional series of bonds (and the priority of lien and pledge in that event) and the rights, duties and obligations of the Board and of the holders and registered owners of the bonds, all as the Board shall determine. The authorizing resolution may provide for the execution of a trust indenture, with a bank or trust company located within or without the State of Arkansas, containing the terms, covenants and conditions authorized by this Act.

(c) Bonds issued hereunder shall be sold at public sale on sealed bids. Notice of this sale shall be published in such publication within and/or without the State of Arkansas for such time or times, and information pertaining to the Board and the bonds shall be prepared and distributed in such form and manner and to such prospective purchasers as the Board shall determine to be best designed to obtain the most favorable bidding. The bonds may be sold at such price as the Board may accept, but in no event shall any bid be accepted which results in an interest rate in excess of 10% per annum (treating the amount of any discount as interest). The award, if made, shall be to the bidder whose bid results in the lowest net interest cost, determined by computing the aggregate interest cost at the rate bid and deducting the amount of any premium and adding the amount of any discount. The Board of Trustees of the Arkansas Teacher Retirement System is hereby authorized to enter a bid for the bonds and is hereby authorized, in the event that no bid should be received for the bonds, to negotiate for and purchase the bonds from the Board.

(d) Bonds outstanding hereunder shall not exceed $1,200,000 in principal amount (except as set forth in Section 13 hereof).

(e) Bonds issued hereunder shall be executed by the Chairman of the Board and the Secretary of the Board (by manual or facsimile signatures with at least one manual signature). The coupons attached to the bonds shall be executed by the facsimile signature of the Chairman of the Board. In case any of the officers whose signatures appear on the bonds or coupons shall cease to be such officers before the delivery of such bonds or coupons, their signatures shall nevertheless be valid and sufficient for all purposes. Each bond shall be sealed with the seal of the Board.

SECTION 6. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this Act. Bonds issued hereunder shall be obligations only of the Board, and in no event shall they constitute an indebtedness for which the faith and credit of the State of Arkansas or any of its revenues (as used in Amendment No. 20 to the Constitution of the State of Arkansas) are pledged. The bonds shall not be secured by a mortgage or lien on any land, building or property belonging to the State of Arkansas. No member of the Board shall be personally liable on the bonds or for any damages sustained by anyone in connection with any contracts entered into or action taken in carrying out the powers, purposes or authorities of this Act unless he shall have acted with a corrupt intent.

SECTION 7. (a) The principal of, premiums, if any, interest on, and trustee's and paying agent's fees in connection with all bonds issued under this Act shall be secured by a lien on and pledge of all or any part of:

(1) all interest received on revolving loan bonds and revolving loan certificates of indebtedness held in the (Permanent School) Revolving Loan Fund, pursuant to Act No. 384 of 1953, as amended, or any similar law (the revolving loan obligations),

(2) the gross revenues derived from the leasing or renting of space in the Building, and

(3) revenues derived from or attributable to the use of space in the Building, to the extent that such revenues may be pledged (collectively the "pledged revenues"). Such pledged revenues are hereby specifically declared to be cash funds, restricted in their use and dedicated and to be used solely as provided in this Act.

The pledged revenues shall be deposited in a trust fund in the State Treasury designated the "State Board of Education Building Expansion Revenue Bond Fund", to be appropriated and applied solely to the payment of the principal of, premiums, if any, interest on, and trustee's and paying agent's fees in connection with the bonds and for the creation and maintenance of reserves as specified by the authorizing resolution or trust indenture (the "debt service requirements"), except that moneys may be withdrawn pursuant to the provisions hereinbelow. In the event, however, that at any time while the bonds are outstanding, the General Assembly should fail, prior to June 1 of any odd-numbered year, to appropriate, for the ensuing biennium, all of the pledged revenues to payment of the debt service requirements of the bonds (as set forth in detail in the authorizing resolution or trust indenture), the pledged revenues shall, commencing fifteen days after such June 1, be deposited by the Board, as and when received by the Board, in a bank or banks selected by the Board, and not in the State Treasury, and shall thereupon and thereafter be so deposited, as a trust fund, and applied to payment of the debt service requirements on the bonds (except as set forth hereinbelow). As used in this Act the term "Bond Fund" shall refer and include the Treasury Fund and any other (non-treasury) fund established under this Section 7.

The authorizing resolution or trust indenture may provide that, as and to the extent not required for paying the principal of, premiums, if any, interest on, and trustee's and paying agent's fees in connection with the bonds, or for making deposits to required reserves, moneys shall be released from the pledged revenues and withdrawn from the Bond Fund, for deposit in a special account or accounts of the Board, and used for the purpose of paying costs of operation and maintenance of the Building.

(b) So long as any of the bonds are outstanding, the Treasurer of State shall be authorized and directed to invest (in securities selected by the Treasurer) moneys at any time held in the (permanent school) Revolving Loan Fund as may be necessary to provide for payment of the debt service requirements.

(c) Subject to any covenants and pledges in connection with any outstanding 1969 Bonds, the Board may, if it so desires, use any of the pledged revenues in the Bond Fund prior to the issuance of any bonds hereunder for defraying the costs of accomplishing the powers, purposes and authorities of the Board under this Act. The principal of, premiums, if any, interest on, and trustee's and paying agent's fees in connection with the bonds shall be payable solely from the moneys in the Bond Fund and the moneys required by this Act to be deposited into the Bond Fund. The Board is directed to insert appropriate provisions in the authorizing resolution or trust indenture for the investing and reinvesting of moneys in the Bond Fund (in securities selected by the Board), and all income derived from such investments shall be and become a part of the Bond Fund.

(d) Notwithstanding any provision of this Act, nothing herein shall be construed to authorize the pledging or assignment of any revolving loan bonds or revolving loan certificates of indebtedness now or hereafter pledged to secure payment of any of the Board's Arkansas State Board of Education Consolidated Revolving Loan Bonds issued under the authority of Act No. 59 of 1973, or any similar law hereafter enacted, or Certificates of Indebtedness issued by the Board under the authority of Act No. 479 of 1967, or any similar law.

(e) The Board may require that there be delivered to the Board in connection with the acquisition of all revolving loan obligations a copy of the resolution of the board of directors of the issuing school district authorizing the pledged securities, together with a certificate executed by the president and secretary of the board of directors certifying that the action necessary for the valid authorization and issuance of the revolving loan obligations has been duly taken, setting forth a description of such action, and, in the case of revolving loan obligations secured in whole or in part by a pledge of collections of an ad valorem tax, accompanied by a certificate executed by the county clerk or county clerks of the county or counties in which the issuing school district is located certifying that such tax has been or will be extended for collection and setting out the year in which such collection commenced or will commence. Upon delivery to the Board of such resolution and certificate (or certificates, as the case may be) the revolving loan obligations covered thereby shall be conclusively deemed to be valid, and the validity of such revolving loan obligations shall not thereafter be subject to challenge on any ground. The Board may prescribe the form of the resolution and certificates provided for in this subsection (e).

SECTION 8. All state agencies are hereby expressly authorized to execute and enter into agreements with the Board for leasing or renting of space in the Building when there is space therein over and above the requirements of the Department and the divisions thereof. Such agreements may be upon such conditions, for such terms, for such amounts, and containing such other provisions as may be determined by the Board and the state agency involved to be appropriate and in the best interest of all concerned. All such agreements and all covenants and agreements therein contained on the part of the parties thereto shall be binding in all respects upon the parties thereto and their successors from time to time, including any successor performing the functions exercised by the state agency executing the agreement, in accordance with the terms of such covenants and agreements, and all of the provisions thereof shall be enforceable by mandamus or other appropriate proceedings at law or in equity.

SECTION 9. Each authorizing resolution or trust indenture shall, together with this Act, constitute a contract by and between the Board and the holders and registered owners of the bonds issued hereunder, which contract, and all covenants, agreements and obligations therein, shall be promptly performed in strict accordance with the terms and provisions thereof, and the covenants, agreements and obligations of the Board may be enforced by mandamus or other appropriate proceedings at law or in equity.

SECTION 10. Bonds issued under the provisions of this Act, and the interest thereon, shall be exempt from all state, county and municipal taxes, except property taxes, and this exemption shall include income, inheritance and estate taxes.

SECTION 11. Any municipality, or any board, commission or other governing authority duly established by ordinance of any municipality, or the governing authorities, respectively, of the fireman's relief and pension fund and the policeman's pension and relief fund of any such municipality, or the governing authority of any retirement system created by the General Assembly of the State of Arkansas, or any agency may, in its discretion, invest any of its funds not immediately needed for its purposes in bonds issued under the provisions of this Act, and bonds issued under the provisions of this Act shall be eligible to secure the deposit of public funds.

SECTION 12. The Board is hereby authorized to employ an architect to prepare plans, specifications and estimates of cost for the construction of the Expansion and to supervise and inspect such construction. In addition, the Board is hereby authorized to engage and pay such professional, technical and other help as it shall determine to be necessary or desirable in assisting it effectively to carry out the powers, purposes and authorities conferred and set forth in this Act.

SECTION 13. (a) Unless refunded as hereinafter authorized, the 1969 Bonds, so long as they are outstanding, shall be secured by a prior lien on and pledge of the pledged revenues, and nothing herein shall be construed as impairing their security as provided in the resolution of the Board securing the 1969 Bond.

(b) The Board is hereby authorized, in its discretion, to refund and discharge the outstanding 1969 Bonds, as hereinafter provided. If the Board determines so to proceed, the necessary additional principal amount of bonds to accomplish the refunding shall be issued and proceeds thereof shall be applied by the Board to the payment and redemption (principal, premiums, if any, interest, and fees and expenses) of all of the outstanding 1969 Bonds. Pending surrender of the 1969 Bonds, the necessary moneys shall be deposited in trust in the bond fund established pursuant to the provisions of the resolution authorizing the 1969 Bonds (the "1969 bond fund"). The Board shall invest, or authorize the investment of, the moneys in the 1969 bond fund to the full extent feasible, as determined by the Board, in direct or fully guaranteed obligations of the United States of America. All moneys in the 1969 bond fund shall be used for no other purpose than the payment of the principal, premiums, if any, interest and fees and expenses incurred in connection with the payment and redemption of the 1969 Bonds. Upon deposit in the 1969 bond fund of the moneys provided for herein, the 1969 Bonds shall be deemed to be paid and discharged.

(c) The Board shall include necessary provisions in the authorizing resolution for the bonds issued under this Act, or in the trust indenture, for deposit of the proceeds of the bonds (other than amounts for interest or reserves which shall be deposited in the Bond Fund and the amount, if any, to be deposited pursuant to the provisions of subsection (b) of this Section) into a special Construction Fund (the "Construction Fund") which shall be a trust fund maintained in such depository as the Board shall designate. The moneys in the Construction Fund shall be used to carry out the powers, purposes and authorities of the Board specified in this Act. The Board shall include appropriate provisions in the authorizing resolution or trust indenture governing the securing of and the investing and reinvesting of moneys in the Construction Fund (in such securities as shall be determined by the Board to be appropriate and as shall be specified in the authorizing resolution or trust indenture).

SECTION 14. There is hereby appropriated, to the Construction Fund, for the purpose of paying the costs of construction of the Expansion and other expenses incidential thereto the following:

(1) the proceeds of the bonds, as set forth herein, not to exceed the sum of ..................... $ 1,200,000;

(2) any balance remaining in the 1969 bond fund, after payment and redemption of the 1969 Bonds, not to exceed the sum of ..................... $ 500,000; and

(3) any unobligated balance remaining in the FED -- National Defense Education Fund, not to exceed the sum of ..................... $ 34,906.66.

SECTION 15. Upon the refunding of the 1969 Bonds as authorized by Section 3 hereof, the following shall be repealed and of no further force and effect: (1) Act No. 443 of 1963; (2) Act No. 18 of the First Extraordinary Session of the Sixty-Sixth General Assembly of the State of Arkansas, approved February 15, 1968; (3) Section 13 (a) of Act No. 384 of 1953, as amended.

SECTION 16. This Act shall be construed liberally. The enumeration of any object, purpose, power, manner, method and thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods, or things.

SECTION 17. This Act shall not create any right of any character, and no right of any character shall arise under or pursuant to it, unless and until the bonds authorized by this Act, or the initial series, shall have been sold and delivered by the Board.

SECTION 18. The provisions of this Act are hereby declared to be severable. If any section, paragraph, sentence or clause of this Act shall be held unconstitutional or invalid, the invalidity of such section, paragraph, sentence or clause shall not affect the validity of the remainder of the Act.

SECTION 19. All laws and portions thereof in conflict herewith are hereby repealed to the extent of such conflict.

SECTION 20. It is hereby found and declared by the General Assembly that the Building is inadequate to house the Department and the divisions thereof, with the result that it is impossible properly and efficiently to carry out functions and duties required by law, to the detriment of the public health and safety, and that only by the immediate operation of this Act can these conditions be bettered. Therefore, an emergency is hereby declared to exist and this Act, being necessary for the preservation of the public peace, health and safety, shall take effect upon its passage and approval.