Q May a school district borrow from its sixteenth section principal fund to pay for goods to be used in a school?

A No, certain aspects of the purchase, such as installation of equipment, may be paid for by sixteenth section principal funds, but using principal funds to purchase goods for use in the school is not authorized. Funds generated from sixteenth section lands are generally categorized as either principal funds or interest/income/expendable funds. Principal funds may not be expended but may be borrowed by a school district under statutorily defined terms and conditions set forth in Section 29-3-113. The uses of sixteenth section principal funds that have been allowed by the Attorney Generalís interpretation of the statute are those which may be directly tied to school buildings and must be long term in nature; therefore, goods used in the school (computers, speakers, etc.) are not an authorized expenditure but the improvement of the school building are allowable. The usage of the principal fund is more restricted than the usage of bond proceeds under Section 37-59-3, and prior opinions equating the two are modified to reflect the more restrictive allowable uses of sixteenth section principal funds. (Attorney Generalís Opinion to Young, July 30, 2015).