(a)

(1) The bonds shall be special obligations of the State Board of Education only, secured as provided herein.

(2) It shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter, that in no event does it constitute an indebtedness for which the faith and credit of the State of Arkansas or any of its revenues are pledged, and that it is not secured by a mortgage or lien on any land or buildings belonging to the State of Arkansas or the state board.

(3) No member of the state board shall be personally liable on any bond or for any damages sustained by anyone in connection with any contracts entered into in carrying out the purposes and intent of this subchapter unless the member shall have acted with a corrupt intent.

(4) The principal of, interest on, and trustee's and paying agent's fees in connection with the bonds shall be secured by a pledge of and shall be payable from the pledged revenues and the pledged obligations as defined in subsection (c) of this section.

(b) The bonds shall be secured by a pledge of and shall be payable from the payments of principal of and interest on revolving loan certificates of indebtedness or revolving loan bonds of Arkansas school districts acquired by the state board pursuant to § 6-20-801 et seq. or any similar law hereafter enacted, designated by the state board, as set forth in this section.

(c) (1) (A) Each authorizing resolution or indenture shall designate the particular school district revolving loan bonds or revolving loan certificates of indebtedness, also called the pledged obligations, the payments of the principal of and interest on which are to be pledged to payment of the particular issue or series of bonds involved.

(B) Such payments are herein referred to as pledged revenues.

(2) Any authorizing resolution or indenture may provide for the release, exchange, and substitution of pledged obligations and for the release of pledged revenues upon terms and conditions set forth therein and may provide for the issuance of additional bonds secured by a pledge or pledges inferior to or on a parity with the pledge or pledges securing the bonds authorized or secured thereby, upon terms and conditions set forth therein.

(d) Each authorizing resolution or indenture shall provide that the pledged obligations shall be delivered to and held by the trustee, as custodian, or shall be held by the state board in such a way as to be segregated from all other assets of the state board, the details in this regard to be set forth in the authorizing resolution or indenture.

(e) The pledged revenues shall be used solely for payment of the principal of, interest on, and trustee's and paying agent's fees in connection with the bonds, but the authorizing resolution or indenture may provide for release of the pledged revenues as set forth in this section.

(f) The pledged revenues are declared to be cash funds, restricted in their use and dedicated and to be used as provided herein. So long as any of the bonds are outstanding, the pledged revenues shall not be deposited into the State Treasury but shall be deposited, as and when received, in a bank or banks selected by the state board from time to time.

(g) Upon payment or discharge of all bonds of any issue or series outstanding to the payment of which any pledged revenues are pledged, the pledged revenues shall, without further action by the state board, be released from the pledge securing such bonds and shall be deposited into the State Board Certificate Revolving Loan Account or shall be otherwise applied to the financing of the Revolving Loan Program.