AR Code § 25-20-408 (2020)
2020 Arkansas Code|Title 25 - State Government|Chapter 20 - Interlocal Cooperation Act|Subchapter 4 - Arkansas Municipal Electric Utility Interlocal Cooperation Act of 2003|§ 25-20-408. Financing

 (a)  (1) An authority is authorized to use any available funds, revenues, and long-term or short-term debt to pay and provide for the costs and expenses of accomplishing the purposes authorized by this subchapter.  (2) For the purposes of paying the costs of any electric project or the portion thereof pertaining to its interest in the electric project, an authority may issue revenue bonds as provided in this subchapter.    (b)  (1) Whenever any authority elects, consistent with this subchapter, to plan, purchase, construct, acquire, operate, or otherwise participate in an electric project or desires to construct improvements, betterments, repairs, and extensions thereto, it may issue revenue bonds under the provisions of this section to pay the costs thereof.  (2) The procedure for issuance of bonds shall be as provided in this section.    (c)  (1) Bonds issued in accordance with this section shall be authorized by resolution of the board of commissioners.  (2) The bonds may be issued as registered bonds and may be exchangeable for bonds of another denomination or in another form.  (3) The bonds may:  (A) Be in such form and denominations as the board determines;  (B) Have such date or dates as the board determines;  (C) Be stated to mature at such time or times as the board determines;  (D) Bear interest payable at such times and at such rate or rates as the board determines;  (E) Be payable at such places within or without the State of Arkansas as the board determines;  (F) Be subject to such terms of redemption in advance of maturity at such prices as the board determines; and  (G) Contain such terms and conditions as the board determines.    (4) The bonds shall have all the qualities of and shall be deemed to be negotiable instruments under the laws of the State of Arkansas, subject to provisions of registration set forth in this subsection.  (5) The authorizing resolution may contain any other terms, covenants, and conditions that the board deems reasonable and desirable, including, without limitation, those pertaining to the:  (A) Maintenance of various funds and reserves;  (B) Nature and extent of any security for payment of the bonds;  (C) Priority among successive issues of bonds;  (D) Custody and application of the proceeds of the bonds;  (E) Collection and disposition of revenues;  (F) Investing and reinvesting of any moneys during periods not needed for authorized purposes; and  (G) Rights, duties, and obligations of the authority and the holders and registered owners of the bonds.      (d)  (1) The authorizing resolution may provide for the execution of a trust indenture between the authority and any financial institution or trust company within or without the State of Arkansas.  (2) The trust indenture may contain any terms, covenants, and conditions that are deemed desirable by the board, including, without limitation, those pertaining to the:  (A) Maintenance of various funds and reserves;  (B) Nature and extent of any security for the payment of the bonds;  (C) Priority among successive issues of bonds;  (D) Custody and application of the proceeds of the bonds;  (E) Collection and disposition of revenues;  (F) Investing and reinvesting of any moneys during periods not needed for authorized purposes; and  (G) Rights, duties, and obligations of the authority and the holders and registered owners of the bonds.      (e)  (1) Any authorizing resolution and any trust indenture relating to the issuance and security of the bonds shall constitute a contract between the authority and holders and registered owners of the bonds.  (2) The contract and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract, and the covenants, agreements, and obligations of the authority may be enforced by mandamus or other appropriate proceeding at law or in equity.    (f) The rates, rents, fees, and other charges to be charged for the services of the electric project or the specified portion of the electric project with revenues pledged to the payment of the bonds shall be sufficient to provide for:  (1) The payment of all principal of and interest on all bonds as and when due; and  (2) Renewals and replacements and other appropriate costs for the electric project or the specified portion of the electric project with revenues pledged to the payment of the bonds.    (g)  (1) The proceeds derived from the sale of the bonds shall be used solely for the purpose of:  (A) Planning, purchasing, constructing, acquiring, or participating in an electric project and making betterments, improvements, repairs, and extensions to an electric project;  (B) Paying interest on the bonds during or after the period of acquisition and construction or establishment of an electric project or betterments, improvements, and extensions thereto;  (C) Establishing any necessary reserves for the bonds;  (D) Paying the costs of issuing or refunding bonds; and  (E) Paying any other costs and expenditures of whatever nature incidental to the planning, construction, acquisition, establishment, or operation of an electric project or improvements, repairs, and betterments thereto.    (2) The terms “betterments”, “improvements”, and “extensions” include land that may be necessary or advisable for the proper and efficient operation of the authority's electric project.    (h)  (1) Bonds issued under the provisions of this subchapter shall be payable solely from revenues derived from the electric project or any specified portion of the electric project.  (2) The bonds shall not in any event constitute an indebtedness of, nor pledge of the faith and credit of, the State of Arkansas or the participating municipal electric utilities or governing bodies of municipal electric utilities within the meaning of any constitutional provisions or limitations.  (3) It shall be plainly stated on the face of each bond that it:  (A) Is issued under the provisions of this subchapter;  (B) Does not constitute an indebtedness of the State of Arkansas or the participating municipal electric utilities or governing bodies of municipal electric utilities within the meaning of any constitutional provisions or limitations; and  (C) Is not backed by the full faith and credit of the State of Arkansas or the participating municipal electric utilities or governing bodies of municipal electric utilities.    (4) Bonds issued under the provisions of this subchapter and the income from the bonds shall be exempt from all state, county, and municipal taxes, including, without limitation, all income, property, and inheritance taxes.    (i)  (1) The bonds may be sold in the manner, either at public or private sale, and upon such terms as the board determines to be reasonable and expedient for effectuating the purposes of the authority.  (2) The bonds may be sold at any price the board may accept, including sale at discount.    (j) The bonds shall be executed in the manner provided for by the Registered Public Obligations Act of Arkansas, § 19-9-401 et seq.