1011.20 Apportionment and use of district school fund.—The district school fund shall be apportioned, expended and disbursed in the district solely for the support of the public schools of the district as prescribed by law; provided, however, that the district school fund shall also be used to pay the principal and interest on bonds legally issued and payable from said fund, together with other proper items of debt service against such fund, including any necessary refunding expense as prescribed by rules of the State Board of Education. The district school board shall, before the maturity of such bonds or other indebtedness and before interest due dates, deposit with the paying agent or make available, as designated in the resolution authorizing the issuance of the bonds or other legal evidences of indebtedness, sufficient funds with which to pay all principal and interest when due; provided, that when such funds have been so deposited with the paying agent or made available, all interest on the indebtedness represented by the maturing bonds, coupons or other evidences of indebtedness shall cease as of their maturity dates; and provided, further, that if any such bonds, coupons or other evidences of indebtedness are not presented for payment within 6 months after the date on which they mature, the funds shall be returned to the district school board and shall be placed by said board in the district school fund and the district school board shall pay said bonds, coupons or other evidences of indebtedness from said fund when presented for payment. Any holder of bonds, coupons or other indebtedness claiming interest after maturity on account of the fact that funds were not deposited with the paying agent or made available to pay such bonds, coupons or other indebtedness at maturity, shall be required to produce evidence in the form of a letter from the paying agent or the district school board, respectively, acknowledging that the bonds, coupons and other evidences of indebtedness upon which interest is claimed were presented for payment, that no funds were available for the payment thereof, that such bonds, coupons and other evidences of indebtedness were presented for payment at least annually thereafter and that no funds were available to pay such indebtedness. The paying agent or the district school board, whichever has the duty of holding the funds, shall, upon request of the holder of defaulted bonds, coupons or other evidences of indebtedness, furnish to such holder the letter required herein. When such evidence is presented, the district school fund shall be liable for the payment of principal and interest on the bonds, coupons or other evidences of indebtedness from maturity until paid at the rate prescribed on the face thereof. If at any time any bonds, coupons or other evidences of indebtedness are reduced to judgment, the district school fund shall be responsible for past due interest only at the rate prescribed by the bonds or other evidences of indebtedness and any rate of interest in excess of that amount shall be illegal and invalid. Such judgments shall bear interest at the rate of 5 percent per annum until paid. When any proposal for refunding the indebtedness against said district school fund has been prepared and approved by the State Board of Education, as required by law, and when the holders of at least 80 percent of the outstanding indebtedness against said fund have agreed in writing to the refunding plan, the district school board shall be authorized to pay, out of the district school fund, from and after that date, on the original and refunding bonds or other evidences of indebtedness only the rate of interest which has been agreed upon for the refunding bonds or other evidences of indebtedness and no owner or holder of a bond, coupon or other evidence of indebtedness shall be entitled to a higher rate of interest after that date; provided, that such owner or holder shall be given the option by the district school board of receiving payment in cash for all principal and interest due on the bonds and coupons or other evidence of indebtedness he or she holds at the same rate at which the remaining indebtedness has been refunded.
