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Form a Business

Public Obligations

Ark. Code Ann. tit. 19, ch. 9
in effect

Ark. Code Ann. § 19-9-101 Form of bonds that may be issued — Definitions.

(a) In the case of authorizations under any existing law for the State of Arkansas, any board, commission, or agency of the State of Arkansas, any county, any municipality, or any improvement district to issue bonds or coupon bonds, the authorization shall be deemed to, and is extended to, include the authority to issue bonds that may be either coupon bonds, payable to bearer, or may be registrable as to principal only with interest coupons, or may be registrable as to both principal and interest without coupons. These bonds may be exchanged for bonds of another denomination, which bonds of another denomination may in turn be either coupon bonds payable to bearer or coupon bonds registrable as to principal only, or bonds registrable as to both principal and interest without coupons, as the governing body shall determine. (b) As used in this section, unless the context otherwise requires: (1) “Improvement district” means all improvement districts, drainage districts, levee districts, and other special districts formed for the purpose of constructing or maintaining a local improvement to be financed by the assessment of benefits upon the real property in the district and the levy of a tax on those assessed benefits; (2) “Municipality” means any city of the first class, city of the second class, or incorporated town; and (3) “Governing body” means the board of commissioners, city council, county court, board of trustees, or other person or body given the power and duty by the state under existing law to issue bonds by the state, any board, commission, or agency of the state, any county, any municipality, or any improvement district. (c) This section is to be liberally construed, and the authority set forth in it is cumulative and supplemental to all other provisions of law authorizing the issuance of registrable bonds.

Ark. Code Ann. § 19-9-102 Replacement of lost, destroyed, or stolen bonds.

(a) In cases where any valid bond, note, interest coupon, or evidence of indebtedness, hereinafter called “instrument”, issued by the State of Arkansas, or any of its departments, agencies, or political subdivisions, including, but not limited to, school districts and improvement districts of all kinds, becomes lost, mislaid, destroyed, or stolen, the body which issued the instrument, or its successor, shall issue and deliver to the one owning the right, title, and interest to and in the instrument a replacement instrument, but only on the filing with the body of: (1) An affidavit reciting ownership of all right, title, or interest in and to the lost, mislaid, destroyed, or stolen instrument and giving its name, the name of the board, commission, or body which issued it, the date of maturity, the denomination and number and that of any lost, mislaid, destroyed, or stolen interest coupon appertaining thereto, and briefly describing the circumstance of such loss, mislaying, destruction, or theft; and (2) A bond in double the face amount of such replacement, including any interest coupons affixed thereto, with a surety company licensed to do business in Arkansas as surety thereon, conditioned that if the principal, the heirs, legal representatives, successors, or assigns of the principal, or any of them, shall, in case the instrument so lost, mislaid, destroyed, or stolen be found or come into the hands or power of any of them, or into the hands, custody, or power of any other person, deliver, or cause it to be delivered unto the obligor for cancellation, and also shall at all times indemnify and save harmless the obligor from and against any and all loss, claims, actions, suits, damages, charges, or expenses of any nature and character by reason of the lost, mislaid, destroyed, or stolen instrument, or the issuance of a replacement in lieu thereof, or the paying or crediting as prescribed of the face amount of the lost, mislaid, destroyed, or stolen instrument without the surrender thereof, then the obligation shall be void, otherwise to remain in full force and effect. (b) Nothing in this section shall be construed to limit or abridge any defense which the obligor may have against the lost, mislaid, destroyed, or stolen instrument; nor shall anything in this section waive any provision of any statute of limitations.

Ark. Code Ann. § 19-9-103 Paying agents to remit funds after three years.

(a) Paying agents, with whom the state or any political subdivision of the state has deposited or shall deposit funds for the payment of obligations of the state or of any political subdivision of the state, are required to remit to the Treasurer of State all such funds which have been in their hands for a period of three (3) years. (b) The Treasurer of State shall invest these funds from paying agents in government or state bonds which he or she shall hold in trust for the holders of the obligations for the payment of which the funds were deposited with the paying agents. (c) On the presentation to the Treasurer of State of any valid obligation that was payable out of any fund remitted to him or her by a paying agent, the Treasurer of State shall sell the bonds purchased with such fund and redeem the obligation.

Ark. Code Ann. § 19-9-104 Bonds held five years.

After holding any government or state bond purchased by him or her for a period of five (5) years, the Treasurer of State shall liquidate the bond and place the proceeds to the credit of the General Revenue Fund Account of the State Apportionment Fund, or remit them to the political subdivision of the state to which they belong, as the case may be.

Ark. Code Ann. § 19-9-105 Pay until barred.

Every bond issued by the state, or by any political subdivision thereof, shall be paid by the state or by the political subdivision unless it is barred by the statute of limitations.

Ark. Code Ann. § 19-9-201 Authority of State Board of Finance.

The State Board of Finance is authorized to: (1) Take such action as may be provided by law for the issuance of refunding bonds for outstanding obligations to the State of Arkansas; (2) Issue replacement bonds, either typewritten, printed, or lithographed, for lost, mislaid, destroyed, or stolen bonds of the State of Arkansas in the manner and within the limitations provided by § 19-9-102; (3) Take such action as may appear necessary or desirable to collect any funds which may have been in the hands of paying agents for a period of three (3) years or longer and to invest any funds so collected in the manner provided by §§ 19-9-103 — 19-9-105; and (4) Take such other action, not inconsistent with law, as may appear necessary or desirable to: (A) Retire the direct bonded debt of the State of Arkansas in an orderly manner; (B) Safeguard state funds pledged for the payment of such obligations; and (C) Maintain and improve the credit standing of the State of Arkansas.

Ark. Code Ann. § 19-9-202 Authorized paying agents.

(a) The agents of the state for payment of the maturing principal of, and interest on, its direct obligation bonds, irrespective of any other legislation on the subject, shall be for all obligations a bank located in this state, to be designated by the State Board of Finance. (b) Fees of the paying agents shall be as follows: (1) For payment of interest, one-fourth of one percent (¼ of 1%) of the total amount paid; and (2) For payment of principal of each maturity, the aggregate thereof to be calculated as follows, with each paying agent to receive its respective proportion based upon the amount paid by it: one-tenth of one percent (1/10 of 1%) on the first one hundred thousand dollars ($100,000) paid, one-twentieth of one percent (1/20 of 1%) on the next nine hundred thousand dollars ($900,000) paid, one-thirtieth of one percent (1/30 of 1%) on the next four million dollars ($4,000,000) paid, and one-fortieth of one percent (1/40 of 1%) on all amounts paid in excess of five million dollars ($5,000,000). (c) In the event any agent so designated shall refuse to accept the paying agency or in the event any agent accepting this designation shall thereafter resign or fail to furnish service satisfactory to the board, the board shall name another commercial bank as successor thereto. (d) Paying agents shall render monthly statements of account to, and in such form as shall be required by, the Treasurer of State. With those monthly statements, the paying agent shall transmit all paid and cancelled obligations.

Ark. Code Ann. § 19-9-203 Registration.

The Treasurer of State is designated as the official registrar of all direct obligation bonds of this state. Upon the application of the holder of any such obligations, the Treasurer of State shall register them as to principal only or as to both principal and interest. Thereafter, upon similar application, he or she shall discharge such obligations from registration.

Ark. Code Ann. § 19-9-204 Retirement of bonds before maturity.

(a) Whenever appropriations and funds are available, the State Board of Finance is authorized and empowered to purchase direct obligations of this state in advance of maturity for the purpose of retirement under the procedure set forth in this subchapter. (b) All obligations purchased as prescribed, and the unmatured interest coupons attached thereto, shall be cancelled by perforation.

Ark. Code Ann. § 19-9-205 Cancelled obligations.

The Treasurer of State shall classify and record all paid and cancelled state obligations and, from time to time as directed by the State Board of Finance, destroy these obligations by burning them to ashes after preparing for execution certificates of incineration, which shall set forth a detailed description thereof.

Ark. Code Ann. § 19-9-301 Delivery and deposit in trust — Definition.

(a) When refunding bonds are issued by the state, any county, municipality, school district, state-supported educational institution, improvement district of any kind, agency, or political subdivision, which may be called “issuing authorities”, the bonds may either be sold or delivered in exchange for the outstanding obligations being refunded. If sold, the proceeds may be either applied to the payment of the outstanding obligations or deposited into trust for the retirement of the obligations, either at maturity or upon any authorized redemption date as specified in the ordinance, resolution, order, or other instrument authorizing the issuance of the refunding bonds. (b) The bonds may be issued in the principal amount necessary to pay the principal of, interest on, redemption premiums, if any, trustee's and paying agent's fees, and charges in connection with the obligations being refunded to maturity or to the redemption date specified in the instrument authorizing the issuance of the refunding bonds, these items to be called “total debt service requirements of the obligations being refunded”; to pay expenses incidental thereto; and to pay the expenses of authorizing and issuing the refunding bonds. (c)(1) The bonds may be delivered when moneys or investment securities or a combination thereof, sufficient to meet, as and when due, the total debt service requirements of the obligations being refunded, have been irrevocably deposited into trust with a bank or trust company organized under the laws of the United States or any state thereof. This bank or trust company shall be qualified to receive trust funds pursuant to a trust agreement requiring the bank or trust company to apply the trust funds to the payment, as and when due, of total debt service requirements of the obligations being refunded. If the bank or trust company is not the paying agent for the obligations being refunded, the trust agreement shall require it to pay over trust moneys to the paying agent as and when required for the timely meeting of total debt service requirements of the obligations being refunded. (2) “Investment securities” shall mean direct obligations of, or obligations the principal of and interest on which are fully guaranteed by, the United States, maturing and bearing interest at such times and in such amounts as, together with uninvested trust moneys, will make available sufficient moneys to meet, as and when due, total debt service requirements of the obligations being refunded. In determining the sufficiency of the trust deposit, there shall be considered the principal amount of such investment securities and the interest to be earned on them.

Ark. Code Ann. § 19-9-302 Sale when old bonds cannot be presented.

(a) Where refunding bonds are to be issued by any municipality, county, state-supported educational institution, or improvement district of any kind and the bonds to be refunded cannot be presented for payment and cancellation simultaneously with the payment and delivery of the refunding bonds, the refunding bonds may be delivered when the purchase money is deposited into trust. The purchase money may be deposited for the purpose of payment of the principal of and interest on the bonds to be refunded with any insured bank or trust company in the state which is otherwise fully qualified to receive trust funds if the bonds to be refunded have fixed maturity dates of not to exceed twelve (12) months from the date of the payment and delivery of the refunding bonds or if the bonds are redeemable before maturity and have been duly called for payment. (b) If the bank or trust company is not the paying agent for the bonds to be refunded, the purchase money shall be paid over by it to the paying agent three (3) days before the maturity of the bonds or three (3) days before the date for which the bonds have been called for payment.

Ark. Code Ann. § 19-9-303 Private sale to United States.

Any refunding bonds authorized to be sold by the State of Arkansas or any agency or instrumentality of the state at public sale, notwithstanding the provision for public sale, may, nevertheless, be sold to the United States or any agency thereof at private sale without public advertisement if the bonds are sold at not less than par and at a rate of interest not greater than the rate borne by the bonds to be refunded.

Ark. Code Ann. § 19-9-304 Interest rate.

(a) Any county, school district, improvement district, or municipality may refund any bonds issued under any statutory or constitutional authority at any time outstanding by the issuance of bonds bearing a rate or rates of interest that the issuer shall deem to be just and fair, whether or not greater than the rate or rates of interest borne by the bonds being refunded. (b) No bonds shall be refunded at a rate of interest greater than the maximum rate set by the statutes or constitutional provision under which they were originally authorized.

Ark. Code Ann. § 19-9-305 Conversion privilege.

The refunding bonds may be issued with the privilege of conversion to a lower rate or rates of interest if the issuer receives no less and pays no more than it would receive or pay if the bonds were not converted. The conversion shall be subject to the approval of the issuer.

Ark. Code Ann. § 19-9-306 Inclusion of redemption premiums in principal.

The State of Arkansas, any agency of the state, any county, any municipality, any school district, any improvement district of any kind, or any other political subdivision of the State of Arkansas, which may be called “issuing authorities”, is authorized to include in the principal of refunding bonds the amount of any redemption premiums required to be paid to accomplish the redemption of the bonds being refunded.

Ark. Code Ann. § 19-9-402 Purpose.

(a) The Internal Revenue Code provides that interest with respect to certain obligations may not be exempt from federal income taxation unless the obligations are in registered form. It is therefore a matter of state concern that public entities be authorized to provide for the issuance of obligations in such form. It is a purpose of this subchapter to empower all public entities to establish and maintain a system pursuant to which obligations may be issued in registered form within the meaning of the applicable provisions of the Internal Revenue Code. (b) Obligations have traditionally been issued in bearer rather than in registered form, and a change from bearer to registered form may affect the relationships, rights, and duties of issuers of and the persons that deal with obligations and, by such effect, the costs of issuing obligations. Such effects will impact the various issuers and varieties of obligations differently depending upon their legal and financial characteristics, their markets, and their adaptability to recent and prospective technological and organizational developments. It is therefore a matter of state concern that public entities be provided flexibility in the development of such systems and control over system incidents so as to accommodate the different impacts. It is a purpose of this subchapter to empower the establishment, maintenance, and amendment, from time to time, of differing systems of registration of obligations so as to accommodate the differing impacts upon issuers and varieties of obligations. It is further a purpose of this subchapter to authorize systems that will facilitate the prompt and accurate transfer of registered public obligations and develop practices with regard to the registration and transfer of registered public obligations.

Ark. Code Ann. § 19-9-403 Definitions.

As used in this subchapter, unless the context otherwise requires: (1) “Authorized officer” means any individual required or permitted, alone or with others, by any provision of law or by the issuing public entity, to execute, on behalf of the public entity, a certificated registered public obligation or a writing relating to an uncertificated registered public obligation; (2) “Certificated registered public obligation” means a registered public obligation which is represented by an instrument; (3) “Code” means the Internal Revenue Code of 1954, as amended; (4) “Facsimile seal” means the reproduction by engraving, imprinting, stamping, or by other means of the seal of the issuer, official, or official body; (5) “Facsimile signature” means the reproduction by engraving, imprinting, stamping, or by other means of a manual signature; (6) “Financial intermediary” means a bank, broker, clearing corporation, or other person, or the nominee of any of them, which in the ordinary course of its business maintains registered public obligation accounts for its customers, when so acting; (7) “Issuer” means a public entity which issues an obligation; (8) “Obligation” means an agreement of a public entity to pay principal and any interest thereon, whether in the form of a contract to repay borrowed money, a lease, an installment purchase agreement, or otherwise and includes a share, participation, or other interest in any such agreement; (9) “Official actions” means the actions by statute, order, ordinance, resolution, contract, or other authorized means by which the issuer provides for issuance of a registered public obligation; (10) “Official or official body” means the officer or board that is empowered under the laws of one (1) or more states, including this state, to provide for original issuance of an obligation of the issuer by defining the obligation and its terms, conditions, and other incidents, the successor of any such official or official body, and such other person or group of persons as shall be assigned duties of an official or official body with respect to a registered public obligation under applicable law from time to time; (11) “Public entity” means any entity, department, or agency which is empowered under the laws of one (1) or more states, territories, possessions of the United States, or the District of Columbia, including this state, to issue obligations, any interest with respect to which, under any provision of law, may be provided an exemption from the income tax referred to in the code. The term “public entity” may thus include, without limitation, this state, an entity deriving powers from and acting pursuant to the Arkansas Constitution or a special legislative act, a political subdivision, a municipal corporation, a state university or college, a school or other special district, a joint agreement entity, a public authority, a public facilities board, a nonprofit corporation, and other organizations; (12) “Registered public obligation” means an obligation issued by a public entity pursuant to a system of registration; (13) “State” means the State of Arkansas; (14) “System of registration” and its variants means a plan that provides: (A) With respect to a certificated registered public obligation, that: (i) The certificated registered public obligation specifies a person entitled to the registered public obligation and the rights it represents; and (ii) Transfer of the certificated registered public obligation and the rights it represents may be registered upon books maintained for that purpose by or on behalf of the issuer; and (B) With respect to an uncertificated registered public obligation, that: (i) Books maintained by or on behalf of the issuer for the purpose of registration of the transfer of a registered public obligation specify a person entitled to the registered public obligation and the rights evidenced thereby; and (ii) Transfer of the uncertificated registered public obligation and the rights evidenced thereby be registered upon such book; and (15) “Uncertificated registered public obligation” means a registered public obligation which is not represented by an instrument.

Ark. Code Ann. § 19-9-404 Applicability.

(a) Unless, at any time prior to or at original issuance of a registered public obligation, the official or official body of the issuer determines otherwise, this subchapter shall be applicable to such registered public obligation, notwithstanding any provision of law to the contrary. When this subchapter is applicable, no contrary provision shall apply. (b) Nothing in this subchapter limits or prevents the issuance of obligations in any other form or manner authorized by law. (c) Unless determined otherwise pursuant to subsection (a) of this section, the provisions of this subchapter shall be applicable with respect to obligations which have been approved by vote, referendum, or hearing which authorizes or permits the authorization of obligations in bearer and registered form or in bearer form only. These obligations need not be resubmitted for a further vote, referendum, or hearing for the purpose of authorizing or permitting the authorization of registered public obligations pursuant to this subchapter.

Ark. Code Ann. § 19-9-405 Construction.

(a) This subchapter shall be liberally construed to accomplish the intent and purposes hereof and shall be the sole authority required for the accomplishment of such purposes. (b) This subchapter shall be construed in conjunction with the Uniform Commercial Code, § 4-1-101 et seq., and the principles of contract law relative to the registration and transfer of obligations.

Ark. Code Ann. § 19-9-406 System of registration.

(a)(1) Each issuer is authorized to establish and maintain a system of registration with respect to each obligation which it issues. The system may either be: (A) A system pursuant to which only certificated registered public obligations are issued; (B) A system pursuant to which only uncertificated registered public obligations are issued; or (C) A system pursuant to which both certificated and uncertificated registered public obligations are issued. (2) The issuer may amend, discontinue, and reinstitute any system of registration, from time to time, subject to covenants. (b) The system shall be established, amended, discontinued, or reinstituted for the issuer by, and shall be maintained for the issuer as provided by, the official or official body. (c) The system shall be described in the registered public obligation or in the official actions which provide for original issuance of the registered public obligation and in subsequent official actions providing for amendments and other matters from time to time. Such description may be by reference to a program of the issuer which is established by the official or official body. (d) The system shall define the methods by which transfer of the registered public obligation shall be effective with respect to the issuer and by which payment of principal and any interest shall be made. The system may permit the issuance of registered public obligations in any denomination to represent several registered public obligations of smaller denominations. The system may also provide for the form of any certificated registered public obligation or of any writing relating to an uncertificated registered public obligation, for identifying numbers or other designations, for a sufficient supply of certificates for subsequent transfers, for record and payment dates, for varying denominations, for communications to holders or owners of obligations, and for accounting, cancelled certificate destruction, registration and release of security interests, and other incidental matters. Unless the issuer otherwise provides, the record date for interest payable on the first or fifteenth day of a month shall be the fifteenth day or the last business day of the preceding month, respectively, and for interest payable on other than the first or fifteenth day of a month, shall be the fifteenth calendar day before the interest payment date. (e) Under a system pursuant to which both certificated and uncertificated registered public obligations are issued, both types of registered public obligations may be regularly issued, or one (1) type may be regularly issued and the other type issued only under described circumstances or to particular described categories of owners. Provision may be made for registration and release of security interest in registered public obligations. (f) The system may include covenants of the issuer as to amendments, discontinuances, and reinstitutions of the system and the effect of such on the exemption of interest from the income tax provided for by the code. (g) Whenever an issuer shall issue an uncertificated registered public obligation, the system of registration may provide that a true copy of the official actions of the issuer relating to such uncertificated registered public obligations be maintained by the issuer or by the person, if any, maintaining such system on behalf of the issuer, so long as the uncertificated registered public obligation remains outstanding and unpaid. A copy of such official actions, verified to be such by an authorized officer, shall be admissible before any court of record, administrative body, or arbitration panel without further authentication. (h) Nothing in this subchapter shall preclude a conversion from one of the forms of registered public obligations provided for by this subchapter to a form of obligation not provided for by this subchapter if interest on the obligation so converted will continue to be exempt from the income tax provided for by the code. (i) The rights provided by other laws with respect to obligations in forms not provided for by this subchapter shall, to the extent not inconsistent with this subchapter, apply with respect to registered public obligations issued in forms authorized by this subchapter.

Ark. Code Ann. § 19-9-407 Signatures required.

(a) A certificated registered public obligation shall be executed by the issuer by the manual or facsimile signatures of authorized officers. Any signature of an authorized officer may be attested by the manual or facsimile signature of another authorized officer. (b) In addition to the signatures referred to in subsection (a) of this section, any certificated registered public obligation or any writing relating to an uncertificated registered public obligation may include a certificate signed by the manual or facsimile signature of an authenticating agent, registrar, transfer agent, or the like. (c) At least one (1) signature of an authorized officer or other person required or permitted to be placed on a certificated registered public obligation shall be a manual signature.

Ark. Code Ann. § 19-9-408 Signature of predecessor in office.

(a) Any certificated registered public obligation signed by the authorized officers at the time of the signing thereof shall remain valid and binding, notwithstanding that before the issuance thereof any or all of the officers shall have ceased to fill their respective offices. (b)(1) Any authorized officer empowered to sign any certificated registered public obligation may adopt as and for the signature of such officer the signature of a predecessor in office in the event that such predecessor's signature appears on such certificated registered public obligation. (2) An authorized officer incurs no liability by adoption of a predecessor's signature that would not be incurred by such authorized officer if the signature were that of such authorized officer.

Ark. Code Ann. § 19-9-409 Seal.

When a seal is required or permitted in the execution of any certificated registered public obligation, an authorized officer may cause the seal to be printed, engraved, stamped, or otherwise placed in facsimile thereon. The facsimile seal has the same legal effect as the impression of the seal.

Ark. Code Ann. § 19-9-410 Appointment of agents by issuer.

(a) An issuer may appoint for such term as may be agreed, including for so long as a registered public obligation may be outstanding, corporate or other authenticating agents, transfer agents, registrars, and paying or other agents. The issuer may also specify the terms of their appointment, including their rights, their compensation and duties, limits upon their liabilities, and provision for their payment of liquidated damages in the event of breach of certain of the duties imposed. These liquidated damages may be made payable to the issuer, the owner, or a financial intermediary. None of such agents need have an office or do business within this state. (b) An issuer may agree with custodian banks and financial intermediaries, and nominees of any of them, in connection with the establishment and maintenance by others of a central depository system for the transfer of pledge of registered public obligations. Any such custodian banks and financial intermediaries, and nominees, may, if qualified and acting as fiduciaries, also serve as authenticating agents, transfer agents, registrars, or paying or other agents of the issuer with respect to the same issue of registered public obligations. (c) Nothing shall preclude the issuer from itself performing, either alone or jointly with other issuers, any transfer, registration, authentication, payment, or other function described in this section.

Ark. Code Ann. § 19-9-411 Payment of costs.

(a) An issuer, prior to or at original issuance of registered public obligations, may provide as a part of a system of registration that the transferor or transferee of the registered public obligations pay all or a designated part of the costs of the system as a condition precedent to transfer, that costs be paid out of proceeds of the registered public obligations, or that both methods be used. The portion of the costs of the system not provided to be paid for by the transferor or transferee or out of proceeds shall be the liability of the issuer. (b) The issuer may, as a part of a system of registration, provide for reimbursement or for satisfaction of its liability by payment by others. The issuer may: (1) Enter into agreements with others respecting such reimbursement or payment; (2) Establish fees and charges pursuant to such agreements or otherwise; and (3) Provide that the amount or estimated amount of such fees and charges shall be reimbursed or paid from the same sources and by means of the same collection and enforcement procedures and with the same priority and effect as with respect to the obligations.

Ark. Code Ann. § 19-9-412 Reciprocal recognition for obligations.

Obligations issued by public entities under the laws of one (1) or more states, territories, possessions, or the District of Columbia, which are in registered form, whether or not represented by an instrument, and which, except for their form, satisfy the requirements with regard to security for deposits of moneys of public agencies prescribed pursuant to any law of this state, shall be deemed to satisfy all such requirements, even though they are in registered form, if a security interest in such obligations is perfected on behalf of the public agencies whose moneys are so deposited.

Ark. Code Ann. § 19-9-413 Registration records.

(a) Records, with regard to the ownership of or security interest in registered public obligations, are not subject to inspection or copying under any law of this state relating to the right of the public to inspect or copy public records, notwithstanding any law to the contrary. (b) Registration records of the issuer may be maintained at such locations within or without this state as the issuer shall determine.

Ark. Code Ann. § 19-9-414 Exemption of interest from taxation.

The state covenants with the owners of any registered public obligations that it will not amend or repeal this subchapter if the effect may be to impair the exemption from income taxation of interest on registered public obligations.

Ark. Code Ann. § 19-9-502 Annual report.

(a) All state and local agencies, boards, commissions, institutions of higher education, and authorities authorized by the state and cities and counties shall annually file a report with the State Board of Finance, on or before October 1, reflecting any and all revenue bonds which have been issued and have not been liquidated as of the preceding July 1 by such governmental units. (b) The report shall contain: (1) The purpose for which the revenue bonds were issued; (2) The total dollar amount issued; (3) The percentage interest rate payable under the revenue bonds; (4) The total dollar amount outstanding; (5) The repayment schedule; and (6) The source, type, and amount of pledged revenues for the bonds. (c) The Secretary of the State Board of Finance shall compile a summary report of all revenue bonds from information provided under this section and present the summary report to the Legislative Council as soon as practicable after each October 1.

Ark. Code Ann. § 19-9-602 Legislative determination.

The people of the State of Arkansas, by the adoption of Arkansas Constitution, Amendment 65, have expressed their intention to provide governmental units expanded power and authority with respect to the creation of bonded indebtedness for capital improvements of a public nature, facilities for the securing and developing of industry or agriculture, and other purposes as defined and prescribed by the General Assembly.

Ark. Code Ann. § 19-9-603 Legislative intent.

It is the specific intent of this subchapter that the provisions hereof are procedural only and are supplemental to other constitutional or statutory provisions now existing or hereafter adopted which may authorize the issuance of revenue bonds for the financing of capital improvements. Nothing contained in this subchapter shall be deemed to be a restriction or limitation upon alternative means of financing previously available or hereafter made available to municipalities or counties for the purposes set forth in this subchapter.

Ark. Code Ann. § 19-9-604 Definitions.

As used in this subchapter: (1) “Bonds” or “revenue bonds” means bonds issued pursuant to an act of the General Assembly under the authority of the Arkansas Constitution, Amendment 65, and means all bonds or other obligations, the repayment of which are secured by rents, loan payments, user fees, charges, or other revenues derived from any special fund or source other than assessments for local improvements and taxes; (2) “Capital improvements of a public nature” or “capital improvements” means, whether obtained by purchase, lease, construction, reconstruction, restoration, improvement, alteration, repair, or other means: (A) Any physical public betterment or improvement or any preliminary plans, studies, or surveys relative thereto; (B) Lands or rights in land, including, without limitations, leases, air rights, easements, rights-of-way, or licenses; and (C) Any furnishings, machinery, vehicles, apparatus, or equipment for any public betterment or improvement, which shall include, without limiting the generality of the foregoing, the following: (i) Any and all facilities for state agencies, city or town halls, courthouses and other administrative, executive, or other public offices; (ii) Court facilities; (iii) Jails; (iv) Firefighting facilities and apparatus; (v) Public health facilities and apparatus; (vi) Hospitals, nursing homes, and similar extended care facilities; (vii) Residential housing for low and moderate income, elderly persons or individuals with disabilities and families; (viii) Parking garages or other facilities; (ix) Educational and training facilities for public employees; (x) Auditoriums, stadiums, convention halls, and similar public meeting or entertainment facilities; (xi) Ambulance and other emergency medical service facilities; (xii) Civil defense facilities; (xiii) Air and water pollution control facilities; (xiv) Drainage and flood control facilities; (xv) Storm sewers; (xvi) Arts and crafts centers; (xvii) Museums; (xviii) Libraries; (xix) Public parks, playgrounds, or other public open space; (xx) Marinas; (xxi) Swimming pools, tennis courts, golf courses, camping facilities, gymnasiums, and other recreational facilities; (xxii) Tourist information and assistance centers; (xxiii) Historical, cultural, natural, or folklore sites; (xxiv) Fair and exhibition facilities; (xxv) Streets and street lighting, alleys, sidewalks, roads, bridges, and viaducts; (xxvi) Airports, passenger or freight terminals, hangars, and related facilities; (xxvii) Barge terminals, ports, harbors, ferries, wharves, docks, and similar marine services; (xxviii) Slack water harbors, water resource facilities, waterfront development facilities, and navigation facilities; (xxix) Public transportation facilities; (xxx) Public water systems and related transmission and distribution facilities, storage facilities, wells, impounding reservoirs, treatment plants, lakes, dams, watercourses, and water rights; (xxxi) Sewage collection systems and treatment plants; (xxxii) Maintenance and storage buildings and facilities; (xxxiii) Police and sheriff stations, apparatus, and training facilities; (xxxiv) Incinerators; (xxxv) Garbage and solid waste disposal, compacting, and recycling facilities of every kind; (xxxvi) Gas and electric generation, transmission, and distribution systems, including, without limiting the generality of the foregoing, hydroelectric generating facilities, dams, powerhouses, and related facilities; and (xxxvii) Social and rehabilitative facilities; (3) “Governing body” means: (A) With respect to any governmental unit defined in subdivision (4)(A) of this section, the Governor; (B) With respect to any governmental unit defined in subdivision (4)(B) of this section, the: (i) County court of a county; (ii) Board of directors of a regional water distribution district, regional wastewater district, or regional solid waste management district; or (iii) Council, board of directors, board of commissioners, or similar elected body of a city or town; and (C) With respect to any authority created pursuant to the Regional Airport Act, § 14-362-101 et seq. between any two (2) or more political subdivisions of the State of Arkansas, the Governor, the county court of a county participating in the agreement, or the council, board of directors, board of commissioners, or similar elected body of a city or town participating in the agreement; (4) “Governmental unit” means: (A) The State of Arkansas or any agency or other instrumentality of the state other than an institution of higher education; and (B) Any county, municipality, regional water distribution district, regional wastewater district, regional solid waste management district, or other political subdivision of the State of Arkansas, or any agency or instrumentality of a political subdivision of the State of Arkansas; and (5) “Industrial enterprise” means and includes facilities for manufacturing, producing, processing, assembling, repairing, extracting, warehousing, distributing, communications, computer services, transportation, corporate and management offices, and services provided in connection with any of the foregoing, in isolation or in any combination, that involve the creation of new or additional employment or the retention of existing employment, and industrial parks. However, a shopping center, retail store, shop, or other similar undertaking which is solely or predominantly of a commercial retail nature shall not be an industrial enterprise for the purposes of this subchapter.

Ark. Code Ann. § 19-9-605 Construction.

This subchapter shall be construed liberally to effectuate the legislative intent and the purposes of this subchapter as complete and independent authority for the performance of each and every act and thing authorized in this subchapter. All powers granted in this subchapter shall be broadly interpreted to effectuate that intent and those purposes and not as a limitation of powers.

Ark. Code Ann. § 19-9-606 Proclamation, order, etc., authorizing issuance of bonds.

(a) Whenever a governmental unit shall determine the need to issue revenue bonds for capital improvements of a public nature or industrial enterprise, the governing body shall authorize the issuance of those bonds by order, ordinance, or resolution or by letter bearing the signature of the executive head of the governing body clearly stating the principal amount of and the purpose or purposes for which the bonds are to be issued. (b) Only upon the order, ordinance, or resolution or by letter bearing the signature of the executive head of the governing body shall the governmental unit be authorized to issue such bonds, provided that an order, ordinance, or resolution, or a letter bearing the signature of the executive head of the governing body shall not be required for the issuance of refunding bonds, including refunding bonds where the principal amount of the new bonds to be issued exceeds the outstanding principal amount of the prior bonds or notes to be refunded.

Ark. Code Ann. § 19-9-607 Hearing.

(a) No proclamation, order, or ordinance prescribed by § 19-9-606 shall be entered by a governing body until the governing body, the governmental unit, or the delegate of either shall have conducted a public hearing: (1) In the case of a regional water distribution district, regional wastewater district, or regional solid waste management district issuing bonds, in the county seat of the county that has the greatest amount of territory within the district; (2) In the case of a city or county issuing bonds, within the city or county; or (3) In the locality to be affected by the issuance of the bonds if subdivisions (a)(1) and (2) of this section are not applicable. (b) At least ten (10) days before the date set for the public hearing, notice of the hearing shall be published one (1) time in a newspaper of general circulation: (1) In the locality to be affected; or (2) In the case of a regional water distribution district, regional wastewater district, or regional solid waste management district, in a newspaper of general circulation in each county in which land lies within the boundaries of the district. (c) The notice shall: (1) Contain a general description of the purpose or purposes for which the bonds are to be issued; (2) Contain the maximum principal amount of the bonds; and (3) State the date, time, and place of the public hearing.

Ark. Code Ann. § 19-9-701 Title.

This subchapter shall be referred to as, and may be cited as, the “Taxable Bond Act of 1989”.

Ark. Code Ann. § 19-9-702 Legislative findings.

The General Assembly hereby finds and declares: (1) The United States Supreme Court, in the case of South Carolina v. Baker, decided April 20, 1988, 485 U.S. 505, held that no barrier exists under the United States Constitution to the imposition of federal income taxation on interest received by holders of bonds of governmental units. Such exemption from federal income taxation has been a desirable feature of such bonds, operating to reduce interest expense to governmental units and enhancing the marketability of the bonds; (2) The continued ability of governmental units to provide for the financing of public improvements and other projects and programs which serve important public purposes by the issuance of bonds is essential for the health, welfare, and economic well-being of the people of the State of Arkansas; (3) By the adoption of the Internal Revenue Code of 1986, as amended, the United States Congress has substantially limited the purposes for which bonds may be issued with interest exempt from federal income taxation and imposed other restrictive provisions as a condition of such exemption. Additionally, under the authority of South Carolina v. Baker, the United States Congress may be expected to enact other laws and effect changes in federal tax policy to eliminate or further reduce the exemption of interest on bonds of governmental units from federal income taxation, with the result that, to provide financing for public purposes, governmental units may now find it in their best interests to issue bonds the interest on which is not exempt from federal income taxation; (4) Under the Arkansas Constitution and existing laws of this state, governmental units have had, and continue to have, the power to issue bonds without respect to whether the interest thereon is subject to federal income taxation; but many statutes applicable to governmental units lack effective, modern procedures under which the structure of a taxable financing may comply with current market practices, obtain the lowest effective borrowing cost, or provide terms most suitable to the governmental unit, the project, or the financing program; and (5) The purposes sought to be achieved by this subchapter are to provide governmental units with all means necessary to obtain financing for public purposes under the changing circumstances related to future tax policy of the federal government and to supplement and complement the provisions of existing and future laws authorizing the issuance of bonds, to the end that governmental units may provide for the health, safety, and welfare of the people by the issuance of bonds under terms and conditions necessary under the then-existing conditions.

Ark. Code Ann. § 19-9-703 Definitions.

As used in this subchapter, unless the content otherwise requires: (1) “Act” means this subchapter. (2) “Bonds” means any bonds, issued pursuant to the Arkansas Constitution and pursuant to an act of the General Assembly heretofore or hereafter enacted, and means all debentures, notes, warrants, tax anticipation notes, bond anticipation notes, commercial paper, or other evidence of indebtedness or leases, installment purchase contracts, or other agreements or certificates of participation therein issued by or on behalf of a governmental unit, secured by revenues from any special fund or source or assessments for local improvements and taxes; (3) “Foreign currency” means currency, euros, or money other than the legal tender of the United States; (4) “Governmental unit” means the State of Arkansas, any department, board, commission, or other agency or instrumentality of the state, or any county, municipality, school district, regional water distribution district, improvement district, public trust, or other political subdivision of the state, heretofore or hereafter created, or any board, commission, authority, or other public agency or instrumentality of a governmental unit which is now or hereafter authorized by law to issue bonds. Nothing herein shall be deemed to give any department, board, commission, or other agency of the state any additional authority to issue bonds or take any action independently and without acting by or through the State Board of Finance if the participation of the State Board of Finance is otherwise required by the law under authority of which the bonds are issued; (5) “State” means the State of Arkansas; and (6) “Taxable bonds” means bonds the interest on which is not, in any manner, exempt from federal income taxation or excludable from gross income for federal income tax purposes.

Ark. Code Ann. § 19-9-704 Subchapter supplemental — Effect on other state laws or on previously issued bonds.

(a) This subchapter is supplemental to all other provisions of state law governing the issuance of bonds by any governmental unit and, except as otherwise provided in this subchapter, the provisions of state law governing the issuance of bonds by any governmental unit shall continue to apply to the issuance by such governmental unit of taxable bonds. (b) Nothing herein shall be deemed to broaden or otherwise alter any provisions of state law as they relate to the issuance of the bonds the interest on which is, in some manner, exempt or excludable from federal income taxation. (c) The reference herein to law providing authority for issuance of bonds shall mean laws now in effect and as hereafter enacted or amended by the General Assembly. (d) Nothing contained herein shall be construed to impugn the validity of any taxable bonds heretofore issued.

Ark. Code Ann. § 19-9-705 Construction.

The provisions of this subchapter shall be liberally construed in order to effectively carry out the purposes of this subchapter.

Ark. Code Ann. § 19-9-706 Issuance of bonds authorized.

A governmental unit is hereby authorized to issue taxable bonds for any purpose permitted by the law heretofore or hereafter enacted under authority of which such taxable bonds are issued, whether such purposes are set forth in each law by specific category or by a general authorization to accomplish public purposes.

Ark. Code Ann. § 19-9-707 Ordinance, resolution, indenture, etc.

The ordinance, resolution, indenture, agreement, or other instrument providing for the issuance of taxable bonds may provide for any of the following: (1) The bonds shall be in such denominations, in such form, either bearer or registered, and payable at such place or places, either within or without the United States, at such time or times, as, in each case, the governmental unit shall determine, subject to any limitations on the maturity of bonds set forth in the law under authority of which the bonds are issued; (2) The bonds shall be payable in legal tender of the United States, in a foreign currency, in commodities, or in precious metals, as the governmental unit shall determine; (3) The governmental unit may appoint, in connection with the bond issue, a cotrustee located outside of the boundaries of the United States or its territories or possessions so long as it also shall appoint a trustee otherwise meeting the requirements of the statutes under authority of which the bonds are issued. The governmental unit may appoint, in connection with the bond issue, a paying agent or a copaying agent located outside the boundaries of the United States or its territories or possessions; (4) In connection with, or incidental to, the sale and issuance of bonds, the governmental unit may enter into any contracts which it determines to be necessary or appropriate to achieve a desirable effective interest rate in connection with the bonds by means of, but not limited to, contracts commonly known as investment contracts, funding agreements, interest rate swap agreements, currency swap agreements, forward payment conversion agreements, futures, or contracts providing for payments based on levels of or changes in interest rates, or contracts to exchange cash flows or a series of payments, or contracts, including, without limitation, options, puts or calls, whether or not used to hedge payment, rate, spread, or similar exposure. Such contracts or arrangements may also be entered into by governmental units in connection with, or incidental to, entering into any agreement which secures bonds or provides liquidity therefor. Such contracts and arrangements shall be made upon the terms and conditions established by the governmental unit, after giving due consideration for the credit worthiness of the counterparties, where applicable, including any rating by a nationally recognized rating service or any other criteria as may be appropriate; (5) In connection with, or incidental to, the sale and issuance of the bonds, or entering into any of the contracts or arrangements referred to in subdivision (4) of this section, the governmental unit may enter into such credit enhancement or liquidity agreements, with such payment, interest rate, security, default, remedy, and other terms and conditions as the governmental unit shall determine; and (6) Notwithstanding any provisions of state law relating to the investment or reinvestment of surplus funds of any governmental unit, proceeds of the bonds and any moneys set aside or pledged to secure payment of the principal of, premium, if any, and interest on the bonds, or any of the contracts entered into pursuant to subdivision (4) of this section, may be invested in securities or obligations described in the ordinance or resolution providing for the issuance of the bonds.

Ark. Code Ann. § 19-9-708 Sale.

The bonds may be sold at public or private sale. If the governing unit shall determine that a negotiated sale of the taxable bonds is in the best interest of the governmental unit, the governmental unit may negotiate for the sale of the taxable bonds.

Ark. Code Ann. § 19-9-709 Proceeds — Use.

(a) The proceeds of an issue of taxable bonds and the investment earnings thereon shall be used, in the manner, and to the extent specified in the ordinance or resolution providing for the issuance of the bonds, by the governmental unit issuing the bonds for a purpose specified for the issuance of bonds in the law under authority of which the bonds are issued. (b) Notwithstanding subsection (a) of this section, invested or reinvested proceeds of an issue of taxable bonds shall be deemed to have been expended for a purpose specified for the issuance of bonds in the law under authority of which the bonds are issued if the earnings thereon and proceeds of liquidation of the investments are acquired with such proceeds, to the extent that they are: (1) Applied to pay or service debt service on the bonds; or (2) Applied toward such a purpose. (c) When the bond proceeds of taxable bonds are invested or reinvested by the governmental unit in obligations permitted by this subchapter, the issuance of the taxable bonds shall be deemed to be for a public purpose, provided, the net proceeds of such investment or reinvestment, after sufficient provision is made for debt service on the bonds, are then applied to a purpose for which the governmental unit has authority to issue bonds and the governmental unit has determined upon appropriate findings of fact that such application of net proceeds is for a public purpose which the governmental unit is authorized or empowered to perform.

Ark. Code Ann. § 19-9-710 Refunding bonds.

Notwithstanding any provisions of state law relating to the investment or reinvestment of surplus funds of any governmental unit or any more restrictive provisions of the law under authority of which the bonds are issued, the proceeds of taxable bonds issued to refund or advance refund a prior issue or issues of bonds may be invested in securities or obligations described in the ordinance or resolution providing for the issuance of such refunding bonds.
Source: Public.Resource.Org / UniCourt, Official Code of Arkansas Annotated, Release 78 (2020) (unicourt.github.io/cic-code-ar)URL: https://unicourt.github.io/cic-code-ar/transforms/ar/ocar/r78/gov.ar.code.title.19.htmlFetched: 11/8/2026

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