Q May the school district pledge approved investment securities held by its Sixteenth Section principal fund as collateral against a loan under the provisions of Section 29-3-113 for approved projects?

A Section 29-3-113 provides that the local School Board must permanently maintain Sixteenth Section principal funds in approved securities, and they may never be expended, except for borrowing funds by the district under express limitations. Interest and income funds may be expended, but only under the limited purposes listed in Section 29-3-115. Sixteenth Section principal and interest and income funds may not be pledged as collateral for any loan, and any security interest or lien placed on such funds would be void. (Attorney General’s Opinions to Caves, November 7, 2014)