(a) Upon their issuance, these school bonds are binding obligations and debts upon the county, and the county legislative body of the county shall levy annually a tax on all the taxable property of the county for the purpose of paying interest on the bonds as it becomes due and to create a sinking fund with which to retire and pay off the bonds when they mature. In counties having no sinking fund commission, the county mayor shall loan out the school bond sinking fund upon first mortgage real estate security, approved by the county clerk and county director of schools.

(b)

(1) In the event that there exists any incorporated city or town or special school district within the county that operates its schools independently of the county, the county legislative body, in its discretion, may provide that the bonds shall be payable from taxes levied only upon that portion of taxable property within the county lying outside the territorial limits of the incorporated cities or towns or special school districts so independently operating their schools; and taxes sufficient to pay principal of and interest on the bonds shall be so levied upon such portion of the taxable property lying outside the territorial limits of the incorporated cities or towns or special school districts.

(2) In the event that the bonds being issued are payable from a tax levied only on that portion of the taxable property within the county lying outside the territorial limits of incorporated cities or towns, or special school districts that operate their own schools independently of the county, then no part of the proceeds of the bond issue shall be paid over to any such city or town or special school district or districts.

(c) The county legislative body of any county issuing bonds under this part, and levying a tax for the retirement of the principal and interest on such bonds only upon that portion of the taxable property within the county lying outside the territorial limits of incorporated cities or towns independently operating their schools, is further authorized in addition to the levy of taxes for the payment of principal and interest on the bonds, to pledge and use for such purpose the proceeds of the county's share of the state sales tax distributed to the county under title 67, chapter 6 or, except in counties with a population of eight hundred thousand (800,000) or more, according to the 1990 federal census or any subsequent federal census, a portion of the nonclassroom component of the BEP funding generated for capital outlay purposes.

(d) The county mayor may purchase bonds at no more than par value on approval of the county clerk and county director of schools; provided, that the school bond sinking fund shall not be loaned for a rate of interest less than the rate of interest on the bonds themselves, and in amounts not exceeding fifty percent (50%) of the value of the real estate security, the interest to be added semiannually to the sinking fund.

(e) The county mayor of the county shall give, within sixty (60) days immediately preceding maturity of the bonds or any of them, notice to the holders of the bonds, through some newspaper published in the county seat of the county, for a period of thirty (30) days, stating in the notice the numbers of the bonds and when they shall become due, requesting that they shall be presented for payment or redemption on the date at the place designated in the bonds; and if the bonds are not presented for payment or redemption at the time and place so designated, then the interest on the bonds shall cease.