Arizona § 48-722 - Terms of bonds

§ 48-722. Terms of bonds

A. Notwithstanding article 2 of this chapter, with respect to any bonds the district board shall prescribe the denominations of the bonds, the size of each issue and the form of the bonds and shall establish the maturities, interest payment dates and interest rates, whether fixed or variable, not exceeding the maximum rate stated in the notice of the election or the resolution of the district board. The bonds may be sold by competitive bid or negotiated sale for public or private offering at, below or above par. If the bonds are sold below par, the aggregate amount of discount and interest to be paid on the bonds shall not exceed the amount of interest that would have been payable on those bonds pursuant to the maturity schedule prescribed by the district board at the maximum rate set out in the bond resolution.

B. If general obligation bonds of the district are sold above par, the amount of net premium associated with a general obligation bond issue may be used only for the following purposes:

1. To pay any or all costs incurred in issuing the general obligation bonds.

2. As a deposit in a debt service fund and used only to pay interest on the issue of general obligation bonds.

C. If used for any purpose other than as prescribed in subsection B of this section, and if the district has general obligation bond voter authorization and available capacity under its debt limitations prescribed by section 48-708, subsection B, the amount of net premium used for that purpose shall reduce in an equal amount both the available aggregate indebtedness capacity of the district prescribed in section 48-708, subsection B and the principal amount authorized at the general obligation bond election for the district from which the issue of general obligation bonds is being sold.  Any net premium that is used as prescribed in this subsection shall be amortized for all debt limitation purposes on a pro rata basis each year by multiplying the net premium used by a percentage equal to the percentage of the total principal amount of the general obligation bond issue that matures in that year.

D. The proceeds of the sales shall be deposited with the treasurer, or with a trustee or agent designated by the district board, to the credit of the district to be withdrawn for the purposes provided by this article. Pending that use, the proceeds may be invested as determined by the district. The bonds may contain such terms, conditions, covenants and agreements as the district board deems proper. The bonds may be payable from any combination of taxes, revenues or special assessments of the types described in sections 48-719, 48-720 and 48-721 and as specified in the bonds provided that all applicable requirements of those sections are met.