Honorable Qilbert Donmm
St&e lktardfor Vooaficmal             Emsartlon
c88;~lSt8t&am
      .
                                          Oplnlon lo.   Q-5853
                                          Ret DQU the State    Board of
                                              mucation   have the mAthor-
                                              ity to ulvo r tie* a w lrll
                                              the Army0 c01oradctiwlga-
                                              tlon M8trlat Refunding
                                              Rondo 00 the hl&ut     b1dd.r
                                              atlwtlws      than par a#@
                                              la o r ued
                                                       lnterarta ndth U8
                                              obtalnurypmalumthat
                                              ml&M be pat& ror lp ea ula -
                                               tlve   bond6 under preoent
                                               f'avwabltmnrk+t oondltione?
                                               And relate&guestioas.
            lie are in      receiptoi your letter        of   recent date reacf~
aa to11ow8:
            Yhest8te mlwanentShoo1?uwI ow?m $Ul3,W.O0
             Color&dolmfigrtion DloteiatRef. Bond8 &tad
    zc            uhleh mtun         over a prriod    of about 24 years
    irola   the    ~eaent     tam,     %he werag      matuHty being 14.35
                                          5+ 9or sent intwe6t per annua
    %?kk!.m:~*-bo                    -f    kforewturlty.
         "The Dimtriotham r& lppllratlonto the State
    Board of &duortlonfor pormlm~ionto pay the Bond6 b>.
    paylng pInalgal ti 800rued lntereetto date of &sty-
               In the qplleatlon tho M&riot rtatw that             the
    r&oc         VerImMt     haa deoidedto deepen the Arroyo from
    H6rllngentotheBayat Fedaml expense00 that                 ttm Aa--
    royo till be mvlgirblr,but the Oopawment requires the
    MatPlet to l’urr&ah me88~          rlghteof-uay       amd otha
    hofllt%ea, requlr%ngth M8trlot to rlase an Udltloml
    three hundred thoumnd doll@rr. It lm mmeaented to the
    Board that    the    Di8triotoanborrouurou& nwny to py oif
    the Ron& held br the Sahool Rardandto              w for thoad-
    ditlobl axpen           o? right8-of-way,      eta at
                                                       ;. lm%xlaakly
BonorabloOIlbertDenmum, Page 2


    34 per cent, perhapsa lower rate   on early mturltlu.
    The 9rennli  Bon& Mve been In good slimdIng einim they
    uere lmauml.    Bamver, the orIgInrlBond6uereindefault
    ?or severalyears.
         lA8a mlng topUrpcewr th*  of the follwi~qu48-
    tlona that after mx lnve8tIgatlonand due oorwIdemtIon
    the St&e Board of Educationreaohw tha ooncluaIonthat
    the Arroyo ColoradoRavigatlonDlatrlctBonds am too
    rpeculatlveto W safelyowned by the School Fund, but
    that,neverthele8a,theyprobablyhavra     preaonttmrket
    value oon8Idemblp In exaa*a of par and learued Interest,
    In vlar of the very favorablemrlat existingat this tlaa,
    th4nr      .
        3. Doss the Board have ruthorltyto advtwt4.m
           and sell these nonds to the highestblddar
           at not leas than par and aoorwd intauet
           and thus obtainany psaairathatlightbe
           prld ior apaculatlveBomls under &wend
           fWtvorsbleam-k&  candItions?
         2. Dow the Board have authorityto aaoept pay-
            ment ot these Bonda before rPturlty?
         3+ Doe8 the Baud have authorityto aoaopt pay-
          !iqmt of the Bonda and reoelvoa voluntu--J
            payment 0r a promlumor penalty  for the pelti-
            i0ge 0r gmpamt,     th  u80unt 0r the plvriur
            to be agree4 ta by the Borrd and t& DIetrIot?
         "we uould &redly lppxwdate aaauerato the foaugoing
    qwstlonr In two ror our next Board meetinguhloh U
    Ja 3a
        I am enclosine;a aopy of the lpplIa8tlonmd8 by      the
    DIrtrIatto the Board l l 9,
          Theonly authoritygranted to the StateBorrdof Sdu-
eation to releasemmatured bonds Ia found In &tIole 2787a,
Vm*a     Amokted Civil Statute8,uhlah artlalomda um follow:
              ~3kkBoal-d0f      Fiduoat1onry -1H       the
    truatteor     of any aomon r&tool dintriotor of any lade-
    -f          l0hO01 dl8tWt  Of t&U Std.0 t0 IMY Off Uhd diB-
LlonorabloOllba'thmn,PPge3




Sta te?erm.nmt School Fund, outatandlngagaln8t any
a oa al
      mahOo1 dl8*lot, 0r any independent  school dI8-
triot In tam St&e.
              gIt8h&llbe the duty of the lchooltureteea of
any a-         aohoold1strIat,oc ury indermndent echool
dletrlctof thX8 State deatiingto pilgoff and d%aahm&
any bmsded Indeb-           now ourwd or here~%fter
to b8 owned by the PermanentS&o01 Fund of thlr State,
outstanding again& such didriot oc distrlotct,      before
uaturltythereof,to rake diruct       apPl:catlonIn wrltlng
to the State Beam2 of ESduwtIonat laaat thirtydays
before lnj interest paying date     on o&Id bon@, mnklly
knWn to 8a:d State ibax'dof Educationthe dealre Of'
8aid tmBtw8 to 9ay off ti dir-             said bonded In-
debtedness,or any part thereof,de8eriblnf:      a&Id bon48
or the part tbreof that the trusteea deeire to pay off
8nd dlaoharge;and it ah&l1 be the duty of the State
Eoard of gdwatlon upon receiptof such applloatlonto
act thereonIn such muuker a5 they deebn boat and notify
the applicantor aPplIcantawhetherapyllcetioais ce-
fu8ed or granted In whole or In part) provldml,that
only suoh t&x mtmay ea has been oollectsdby vlrtutf     of
tU levIe8 lade for the l~ifio        pwpotie of p~~ltllnga
lInklngfuadmd9a             interest o nth ap t
                                              a r tlo ula
                                                       b o nda
                                                           r
to be mdeemad ahalI-     be ex)#nd+din the redemption,taking
Up oi~PayIngOffOf8~~hbonda8a i%~Vi&dtiehi AOti
m&88 uid bonds are being ndwmed SOS the plrrp0M0r
being nfunded;endtheap911eat1on or the board or tru8-
tees of my oomw or Ucdopendentschool dirtriet daSir--
ingtoretln        bonda a8 hemIn 9wvIdled shall Includean
8ffidwit      to that 8rred in their appliarrtlon; an4 pro-
vided further,th8tIt8hllb8          wAlawfwlfaranyperlmn
upan uhou any duty mat8 In emrylng out the provIalona
Of #i8 18~ to give m rooelvsany commlasion,prealm,
Or any ccmpenaatIon+hrtewx fortht persozwnoe of such
duty     or dut1.8.
         Plln 9IWiSia or this Aat 8ha11 epply also to the
governingboard of all altie8,countleaend politlti 8ub-
dI+I8IonaInthIaSkteuho8e bond@@reownedmdmwbme-
lrt8rbeommlbythe     Iwrmnebt school rlmd or the strte.*
              Itulll be obwrvdthat the applioation far
pwml8aIonto m7 wamtured bonda mmtaoma frontho B
b o a rodr th epolitiaal  lubdivlalon leeklng to 9s~ 88Ld bon&.
x0 8uthor:ty 28 mod        to the l3fwd or Eduo8tion to ldvortlae
tar bide, nor to 8eU bond8 In onj oth8r mUn3.r #&n th8t           8Ot
out In hrtlala 2787,a, auora. won rweipt of the applloetlon
rraathe gwerningboard to p8y 0rfbd          d.%aoharga b~ncla,  ‘it
8ha11 k tb     duty Of the Stata   B0U-d Of EdUO&lNI   l * l t0     EOt
thereonIn auoh mnnrmr ee they de- beot and notie the appll-
cants whether the lppllaatlonIs nfu8ed or ganted in whole
or In part." Tour Ttlon         No, 1 la anamwed In tha negative.
          Inarurcrr~kn-  queetionNo.2, youare8dvieedthet
the State Board 0s Edwatltm may wmiilt the pmmayxtent 0s the
bands In question at auoh times and upon auoh condItIone 81)are
authorizedby the provIaIoneof Article2787s, above         quoted.

          x.nanmm )o your qumtion x0. 3, the court 0s Civil
A~pwla held In the case or Stats v. Hatcher,g S.Y. (2d         4,
(Rwer6ed by the SuprmacCourt on other grourxlc,    i31S.W. m2d
499) that the State Board ol EduoatlonOOUld ~equLra    a bonlu
of sixty dayc* lntercct. The court In oonst'p\Ltly;  the law aaid:
"UC are unable to aonatrueit tw inhibitingthe requlreamt of
a bonus to be paid to the pcrtmxnt achsol fund for a p.rIVIltge
which the board of educationvatigiven the dlaaratlonto allow
or aeny. Suah dlaaretlon,we think,shouldadnit of reaaonrble
oondltloneIapoaedby the board of edwatlon @a a mama OS prr-
ventinglees to the permanent    aohool fund by rowon of delay
In reinvestinglto mm.        A bonus of lIxty deya IntePeat
eertalqlyoould not beheld unreaaonabla."
          ‘lo uer th
                   a e r efo
                           ldvl8edthatth8
                             re            StateBo&rd OS
Eduoatlon may ooncLttio?a
                        the prwmynnt  of the bon& m
queatlon under Article2787a upon prepayuentby the dXetrIct
&f;Ahn     mount of intereat, ea a bonu8,aa It -7 fi% and
          .
                                         Youm very truly
                                         By /r/ c. I. GIBsca
                                                 C, ?. Qlbaon
                                                  AwIBtaat
