7-12-2171. Details relating to rural improvement district bonds and warrants -- definitions of bond forms. (1) (a) The bonds and warrants must be drawn against either the construction or maintenance fund created for the special improvement district and must bear interest from the date of registration until called for redemption or paid in full. Bonds or warrants sold at a private, negotiated sale may bear interest at a rate varying periodically at the time or times and on the terms determined by the board of county commissioners. The terms determined by the board of county commissioners may include the establishment of a maximum rate of interest or the convertibility to a fixed rate of interest.
     (b) Variable rate bonds may be sold at a private negotiated sale if the principal amount of the bonds is $500,000 or less and the board of county commissioners obtains separate written opinions from underwriters of Montana rural improvement district bonds stating the bonds are not marketable through a competitive bond sale. Bonds sold in principal amounts below $250,000 do not require a marketability opinion.
     (c) The interest must be payable annually or semiannually, at the discretion of the board of county commissioners, on the dates that the board prescribes. The warrants or bonds must bear the signatures of the presiding officer of the board and the county clerk and may bear the corporate seal of the county. The warrants or bonds must be registered in the office of the county clerk and the county treasurer, and if interest coupons are attached to the warrants or bonds, they must also be registered and shall bear the signatures of the presiding officer of the board and the county clerk. The coupons may bear the facsimile signatures of the officers in the discretion of the board.
     (2) The bonds must be in denominations of $100 or fractions or multiples of $100, may be issued in installments, and may extend over a period not to exceed 30 years. However, if federal loans are available for improvements, repayment may extend over a period not to exceed 40 years. For the purposes of this subsection, the term of a bond issue commences on July 1 of the fiscal year in which the county first levies to pay principal and interest on the bonds.
     (3) As used in this part, unless the context clearly indicates otherwise, the following definitions apply:
     (a) "Amortization bonds" means the form of bonds that bear interest at a fixed rate and on which:
     (i) a part of the principal must be paid each time that interest becomes payable;
     (ii) the part payment of principal increases at each installment in the same amount that the interest decreases;
     (iii) the combined interest and principal due on each due date remains the same until the bonds are paid;
     (iv) the final payment may vary from prior payments in the amount resulting from disregarding fractional costs in prior payments; and
     (v) the initial payment may be larger than subsequent payments if the increase represents interest accrued over an additional period not greater than 6 months.
     (b) "Serial bonds" means a bond issue payable in semiannual or annual installments commencing not more than 2 years from the date of issue, any one installment consisting of one or more bonds, with the principal amount of bonds maturing in each installment not exceeding five times the principal amount of the bonds maturing in the immediately preceding installment.

     History: En. Ch. 123, L. 1915; superseded by Ch. 156, L. 1917; amd. Ch. 67, L. 1919; superseded by Sec. 20, Ch. 147, L. 1921; re-en. Sec. 4593, R.C.M. 1921; re-en. Sec. 4593, R.C.M. 1935; amd. Sec. 1, Ch. 3, L. 1955; amd. Sec. 7, Ch. 260, L. 1959; amd. Sec. 2, Ch. 136, L. 1961; amd. Sec. 2, Ch. 40, L. 1965; amd. Sec. 22, Ch. 234, L. 1971; R.C.M. 1947, 16-1620(2); amd. Sec. 19, Ch. 665, L. 1985; (4)En. Sec. 20, Ch. 665, L. 1985; amd. Sec. 5, Ch. 256, L. 1989; amd. Sec. 1, Ch. 449, L. 1989; amd. Sec. 9, Ch. 459, L. 1997; amd. Sec. 1, Ch. 162, L. 2001.