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improvements, including the erection and equipment of schoolhouses, 20 per cent. In Texas the aggregate amount of bonds must never reach such an amount that a tax of 25 cents on the $100 will not pay current interest and provide an adequate sinking fund. In Utah, 4 per cent. In Virginia, 18 per cent.1 In Washington, 5 per cent. In West Virginia, 5 per cent, including, in any district of 300 or more children of school age, 2 per cent for school buildings; in city school districts, 2 per cent, exceptin cases where such corporations have previously authorized bonds to be issued. In Wisconsin, 5 per cent, of which not less than two-thirds shall be secured in real estate and not exceeding in any case $25,000. In Wyoming, 2 per cent.

Generally, funding or refunding bonds may not exceed in amount the face value of the bonds they are issued to replace, although in some States the amount of interest due may be included in the new issue.

A minor restriction also dealing with the total amount of indebtedness which localities may incur takes the form of permissive authority to local boards of education to borrow money or to issue bonds temporarily for pressing needs in amounts not exceeding all or a specified portion of their expected income from local taxation, or, as in Georgia, Michigan, and New Jersey, from the public-school fund. This occurs in Georgia, Nevada, Ohio, and in 11 of the States 2 included under the major restriction just considered.

In Georgia, county boards of education may borrow to pay teachers' salaries for the current school year a sum no greater than the county is entitled to receive from the public-school fund. In Kentucky money may be borrowed or debts contracted by county boards of education for school purposes not to exceed the anticipated revenue for school purposes for the current fiscal year. In Indiana when a gift exceeding $5,000 for erecting a public-school building in unincorporated towns is made on condition that an amount equal thereto shall be raised for such purpose, bonds not exceeding $15,000 in anticipation of the revenue for special school purposes may be issued; when a township is indebted beyond the ability of the current taxes to meet such indebtedness, bonds may be issued not exceeding in the aggregate the amount of such indebtedness; if an emergency exists for the expenditure of any sums not included in the existing estimates and levy, money may be borrowed in a sum sufficient to meet such emergency and a levy be made to pay the debt so created. In Iowa, when a schoolhouse tax has been voted, the board may anticipate the levy and collection and issue orders to build. In Michigan, when a tax has been voted and money is needed before the tax can be collected, money may be borrowed on the strength of such tax not exceeding the total of such tax; further, when any deficiency is caused in the teachers' salary fund by the changing of the date of the apportionment of the primary-school interest fund, money may be borrowed or bonds issued for the sum of such deficiency. In Montana warrants for the payment of current expenses may be issued in anticipation of school moneys which have been levied but not collected; but such warrants shall not be drawn in excess of the sum levied. In Nevada, whenever the county-school fund of any district is exhausted and there is not enough money available for the maintenance of schools, warrants may be issued, but the total amount of such interest-bearing warrants outstanding and unpaid may not exceed the total cost of maintaining the schools for the current year nor 1 per

1 The 18 per cent limit does not apply to those cities and towns whose charters existing at the adoption of the constitution authorize a larger percentage than is authorized by this section; further, certain indebtedness is not to be included in this limit.

2 Indiana, Iowa, Kentucky, Michigan, Montana, New Jersey, New York, North Dakota, South Carolina, Utah, Wisconsin.

cent of the total assessed valuation of the district. In New Jersey a sum not exceeding one-half of the amount appropriated for the current expenses of the schools and for the repair of schoolhouses may be borrowed and promissory notes delivered therefor; a temporary loan may also be incurred in anticipation of the receipt of moneys to the extent of not exceeding 80 per cent of the amount of moneys which may be apportioned to such school district. In New York, union free-school districts may borrow money in anticipation of taxes levied but uncollected and not in excess thereof. In North Dakota, in independent districts, money may be borrowed when necessary, in anticipation of the taxes raised. In Ohio, bonds may be issued to obtain and improve school property in anticipation of income from taxes, provided no greater amount of bonds may be issued in any one year than would equal the aggregate of a tax of 2 mills for the preceding year; for remedying defects in schoolhouses which have been condemned, $5,000. In South Carolina, money may be borrowed for ordinary school purposes in an amount not to exceed 75 per cent of the county-school tax and the taxes must be pledged for the payment of the money so borrowed and the interest thereon. In Utah, money may be borrowed for the maintenance of schools not in excess of the taxes for the current school year; and also for the purchase of sites and buildings not in excess of any tax that may have been lawfully imposed for such purposes. In Wisconsin, money may be borrowed for teachers' salaries and usual expenses in an amount not exceeding the amount of district taxes to be collected at the next levy.

PERIOD.

In addition to restricting a bond issue or the borrowing of money in regard to the responsible issuing authority, the purpose, and the amount, State legislation often limits the period for which money may be borrowed or bonds may run. Such restriction occurs in 35 States. The periods specified range from 6 months to 40 years, so far as an original transaction is concerned; and from 10 to 30 years for a renewal, extension, or replacement. Frequently the States reserve to local school authorities the power to redeem bonds prior to the date when due, such power to be exercised at the option of the school authorities, or when the sinking fund is adequate for the redemption of the bonds. The limitations as to the periods within which bonds must mature or outstanding indebtedness be paid are as follows:

In Arizona, within 20 years; bonds issued to increase the indebtedness of districts above 4 per cent, within 40 years. In California, within 40 years. In Colorado, original bonds in not less than 20 nor more than 40 years; refunding bonds, within 20 years. In Georgia, money borrowed for teachers' salaries, as soon as possible within the current school year. In Idaho, original bonds within 20 years; refunding bonds, in not less than 10 nor more than 20 years. In Illinois, within 20 years. In Indiana, bonds issued in incorporated towns for sites or buildings, within 1 to 10 or 1 to 20 years, according to form of issue; bonds issued in incorporated cities and towns for the purpose of purchasing grounds, erecting and furnishing school buildings, within 25 years; bonds issued in incorporated towns having a population of not more than 1,000 inhabitants, for sites, buildings, and repairs, within 20 years; in incorporated towns having a population of more than 1,000 inhabitants but less than 5,000, for sites, buildings, and repairs, in not less than 10 nor more than 24 years; bond or note issue in incorporated towns having a population of not more than 2,000 inhabitants, for sites and buildings, within 15 years; bonds issued in incorporated towns and cities,

except in cities of the first and second classes, for sites, buildings, and repairs, within 25 years; bonds or warrants issued in townships for the construction of a school building when indispensably necessary, within 10 years; bonds issued in townships for constructing and equipping a room or building in which to teach the arts of agriculture, domestic science, or physical or practical mental culture, or for general township use, within 10 years; money borrowed in any township for legalizing emergency school debts contracted for the erection or enlargement of a schoolhouse, within 5 years; bonds issued in townships to cover indebtedness beyond the ability of the current taxes to meet, as evidenced by bonds, notes, or other obligations, within 15 years; bonds issued in unincorporated towns for erecting a school building to secure the benefits of a gift or bequest exceeding $5,000, in anticipation of the revenue for special school purposes, within 7 years. In Iowa, school building bonds, 10 years, except that in independent districts having at the time of issuance of any bonds other bonds outstanding amounting to not less than $400,000, any bonds in excess of such amount may run not exceeding 20 years. In Kansas, for erecting and purchasing schoolhouses, within 15 years; refunding bonds, within 30 years.1 In Kentucky, within 30 years. In Louisiana, not less than 5 nor more than 40 years. In Michigan, within 15 years; money borrowed or bonds issued to meet deficiencies in teachers' salaries, within 5 years. In Minnesota, within 15 years. In Missouri, original bonds, within 20 years; funding and refunding bonds, in not less than 5 nor more than 30 years. In Montana, original bonds, within 10 years; refunding bonds, within 20 In Nebraska, within 30 years. In Nevada, within 20 years. In New Jersey, for the erection of a school of detention, within 20 years; bonds issued for purchasing sites, etc., within 30 years; renewing bonds, at such times as the legal voters shall direct. In New Mexico, for erecting and completing schoolhouses, in not less than 20 nor more than 30 years; refunding bonds in cities and towns, in not less than 10 nor more than 40 years. In New York, in common-school districts and in union freeschool districts for sites and buildings, within 20 years; in union free-school districts, money borrowed to pay current expenses, within the current fiscal year or within 9 months thereafter; bonds or other obligations issued in cities of the third class, villages, town school districts, etc., for any municipal or district improvement, within 50 years. In North Dakota, original bonds, in independent districts, within 25 years; in common-school districts, in not less than 10 nor more than 20 years; refunding bonds within 20 years. In Ohio, refunding bonds, within 20 years; bonds to obtain or improve school property, within 40 years. In Oklahoma, original bonds, within 20 years; funding bonds, within 30 years.1 In Oregon, not less than 10 years nor more than 20 years; bonds sold to the State land board, in not less than 1 nor more than 20 years. years.

years.

In Pennsylvania, temporary indebtedness, within 2 years; bonds, within 30 South Carolina, within 20 years. In South Dakota, bonds issued for purchase of sites, building, and furnishing schoolhouses, in not less than 3 nor more than 15 years; in independent districts, for purchase of sites, building schoolhouses, or funding outstanding indebtedness, within 20 years; districts finding themselves indebted beyond the present constitutional limit, but within the former limit, may issue bonds extending the time of payment for a period not less than 3 nor more than 10 years. In Tennessee, in districts or municipalities of less than 100,000 inhabitants, within 30 years. In Texas, within 20 years when issued for the erection of buildings constructed of wood, and within 40 years when buildings are constructed of more substantial material. In Utah, within 20 years. In Virginia, for erecting and improving schoolhouses, within 35 years. In Washington, within 20 years; in city school districts, within 34 years, except in cases where such corporations have previously authorized bonds to be issued. In West Virginia, in not less than 10 nor more than

1 No bonded indebtedness may be refunded except such as has been issued and outstanding at least 2 years at the time of such refunding.

34 years. In Wisconsin, money borrowed for teachers' salaries and usual school expenses, within 6 months; money borrowed to meet any unusual condition, within a year; bonds for other school purposes, within 15 years; refunding bonds, within 20 years from the time the indebtedness was originally contracted. In Wyoming, original bonds, within 25 years; refunding bonds, within 30 years.

DENOMINATION.

Another major restriction attached to the issuing of bonds refers to the denominations in which they may be issued. This restriction is imposed in 20 States,1 the denominations ranging from $50 to $100,000 per bond, as follows:

In Michigan and Oregon, not less than $50. In New York, in special school districts for purchasing sites, etc., $50 or some multiple of $50. In South Dakota, $50 or some multiple of $50 not exceeding $200. In North Dakota, $50 or some multiple of $50. In Utah, $50 or some multiple of $50 not exceeding $1,000. In Illinois, Iowa, Missouri, Oklahoma, and Washington, not less than $100 nor more than $1,000. In Wyoming, refunding bonds, not less than $100. In Colorado and Montana, $100 or some multiple thereof. In New Mexico, for erecting and completing schoolhouses, not less than $25 nor more than $500; in incorporated cities and towns, for the purchase of sites, not less than $50. In Kansas, not less than $100 nor more than $500; funding and refunding bonds, not less than $100 or more than $1,000. In Indiana, not less than $100 nor more than $1,000; funding and refunding bonds, not less than $50 nor more than $1,000; refunding bonds in incorporated towns of not over 2,000 inhabitants, not less than $100. In Oregon (bonds purchased by the State land board) and in Kentucky, not exceeding $10,000. In Tennessee, not less than $100 nor more than $100,000. In Louisiana, in a varying amount, depending upon the conditions of the bond issue.

RATE OF INTEREST.

Local authorities are also restricted in respect to the rate of interest which may be allowed upon money borrowed or bonds issued. In 39 States a maximum rate of interest is designated, ranging from the lowest rate obtainable to 8 per cent per annum.

2

These limitations are as follows:

In Georgia, money borrowed for teachers' salaries, as low a rate of interest as possible. In Wisconsin, 3 per cent; money borrowed for teachers' salaries and usual school expenses, 7 per cent. In Louisiana, Mississippi, New Hampshire, Texas, and Utah, 5 per cent. In Indiana, for sites, buildings, and repairs in incorporated cities and towns, 43 per cent; for sites, buildings, and repairs in incorporated towns of less than 5,000 inhabitants, 5 per cent; for the same purpose in incorporated towns and cities, except cities of the first and second classes, 5 per cent; for the same purpose in towns having not more than 2,000 inhabitants, 6 per cent; for constructing a school building in townships, when Indispensably necessary, 8 per cent; for funding or refunding indebtedness in townships, 6 per cent; for the same purpose in incorporated towns or cities, 4 per cent; to meet the conditions of a gift or bequest for erecting a school build

1 Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Missouri, Montana, New Mexico, New York, North Dakota, Oklahoma, Oregon, South Dakota, Tennessee, Utah, Washington, and Wyoming.

2 Arizona, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

ing in incorporated towns, 7 per cent; for erecting a schoolhouse for a joint graded school upon authorization of the voters residing in incorporated towns or cities of the fifth class and of the voters residing in the same township but outside such city or town, 4 per cent. In North Dakota, 5 per cent; funding or refunding bonds, 6 per cent. In Arizona, California, Delaware, Idaho, Kansas, Kentucky, Montana, Nebraska, Nevada, New York, Ohio, Tennessee, Virginia, Washington, and Wyoming, 6 per cent. In Iowa, school-building bonds, 6 per cent; certain other bonds, 5 per cent. In New Jersey, 6 per cent; bonds issued for a school of detention or money borrowed by a township committee for the maintenance of schools, 5 per cent. In New Mexico, original bonds, 6 per cent; refunding bonds, 5 per cent. In West Virginia, in districts having an enumeration of youth of school age of 300 or more, 6 per cent. In Minnesota and South Dakota, 7 per cent. In Illinois, common-school district bonds, 7 per cent; special school-district bonds, 5 per cent. In Oklahoma, original bonds, 7 per cent; funding bonds, 6 per cent. In South Carolina, original bonds, 8 per cent; money borrowed to repay school claims, 7 per cent. In Colorado, in districts of the third class and for refunding bonds in all districts, not exceeding 8 per cent; in districts of the first and second classes, 6 per cent. In Florida and Michigan, 8 per cent. In Missouri, 8 per cent; funding and refunding bonds, 8 per cent or 5 per cent, according to conditions. In Oregon, at a rate not exceeding legal interest. In Pennsylvania, money borrowed as a temporary debt, not exceeding the legal rate of interest.

SELLING PRICE.

1

Restrictions are also placed by 29 States 1 upon the selling price of bonds. In 25 of these States there is provision that bonds of any description may not be sold for less than par or less than par with accrued interest; in the remaining 4 States bonds may or may not be sold for less than par, according to the conditions or nature of the bonds.

Bonds may not be sold for less than par or less than par with accrued interest.—In Arizona, California, Colorado, Idaho, Iowa, Kentucky, Louisiana, Montana, Nebraska, Nevada, New Jersey, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania (for payment of temporary indebtedness), South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, and Wyoming.

Bonds may or may not be sold for less than par, according to conditions or nature of bonds.—In Indiana, for a bond issue not exceeding $50,000 in incorporated cities and towns for sites or buildings, at not less than 94 cents on the dollar; in unincorporated districts, to meet the conditions of a gift or bequest of $5,000 or more for a school building, at not less than 95 cents on the dollar; other bonds in all other districts, at not less than par. In Kansas, for school buildings, at not less than 95 cents on the dollar; funding and refunding bonds, at not less than par. In Missouri, for sites and buildings and for refunding bonds, at not less than 90 cents on the dollar; refunding bonds under certain conditions, at not less than par. In New Mexico, for buildings, at not less than 90 cents on the dollar; refunding bonds, at not less than par.

CARE OF THE SINKING FUND.

Another form of restriction deals with the manner of taking care of the sinking fund for the redemption of bonds. The laws of the States legislating in this particular very generally designate that the sinking

1 Arizona, California, Colorado, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, and Wyoming.

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