Provisions for retirement of existing indebtedness which is unfunded or in default.

In any district in which there is any indebtedness outstanding against the district school fund which has not yet been funded, or at any time any such indebtedness is in default as to principal or interest, the district school board shall proceed as follows:

(1) PLAN FOR RETIRING INDEBTEDNESS TO BE PROPOSED.—The district school board shall prepare and propose a plan for retiring any unfunded indebtedness or any such indebtedness which is in default so that no creditor having a valid claim will be given a preferred status. This plan shall be so prepared as to show the funds needed for operating the schools on the most economical basis practicable, the amount of any other obligations which must be met each year, the total funds available each year for the entire school program, and the funds that can reasonably be spared for retirement of indebtedness without needlessly handicapping the school program and which can be budgeted each year for the retirement of such indebtedness.

(2) PROPOSAL TO BE SUBMITTED TO DEPARTMENT OF EDUCATION.—The proposal for funding and retiring all such indebtedness, when approved by the district school board, shall be submitted to the Department of Education for consideration. The district school board shall not attempt to retire any such indebtedness until this procedure has been followed and until it has had the benefit of the recommendations of the department. Upon receiving the proposal, the department shall determine the minimum funds which are, in its opinion, necessary for the operation of the school program in the district; shall determine what funds remain for retirement of indebtedness each year; shall determine whether the proposed plan is in accordance with these facts, and, if it is not, shall propose modifications in the plan in accordance with the facts. The recommendations of the department shall then be submitted to the district school board for consideration.

(3) WHEN PLAN TO BE EFFECTIVE.—The plan for retiring indebtedness, herein prescribed, shall become effective when the district school board and the Department of Education jointly agree upon the amount of funds necessary for operating the schools and the amount which can be budgeted each year for retiring indebtedness. When this plan has been agreed upon, it shall become the duty of the district school board to see that the amount approved for retiring indebtedness is incorporated in the budget each year, and the department shall see that this amount has been incorporated before the budget is approved, or, if such an amount can not reasonably be incorporated in the budget, as shown by evidence submitted by the district school board, determine the respects in which the plan should be modified, and to see that the budget includes the amount for retiring indebtedness which can reasonably be included.

(4) FUNDING OUTSTANDING INDEBTEDNESS.—

(a) Each district school board having an outstanding indebtedness legally incurred and constituting an obligation or obligations payable from the district school fund is authorized to issue and sell interest-bearing coupon warrants in a sum or sums not to exceed the total amount of such indebtedness. Such coupon warrants shall bear interest at a rate not to exceed the rates authorized under the provisions of s. 215.84, shall be payable either annually or semiannually, and shall be in such form and denomination as the district school board issuing the same shall prescribe. None of such warrants shall be issued to run for a longer period of time than 10 years from the date of issue. Such warrants shall be numbered consecutively, beginning with number one, and each warrant shall have attached thereto interest coupons, each coupon bearing the number of its warrant and representing or calling for an annual or semiannual, as the case may be, payment of interest on its warrant.

(b) Each such warrant shall be signed by the chair and attested by the secretary of the district school board issuing the same, and shall have the seal of the district school board affixed thereto, and the interest coupons attached thereto shall be signed by, or bear the printed or lithographed facsimile signature of the chair and secretary. Each warrant and interest coupon shall be dated and shall bear the due date. Such warrants and interest coupons shall be issued upon, and payable from, the fund designated on the face thereof. The fund so designated shall be the district school fund. All funds derived from the sale of interest-bearing coupon warrants, as herein provided, shall be used for the purpose of retiring the indebtedness for payment of which the warrants were issued, and for no other purpose, and any funds remaining from the sale of such warrants shall be applied to retiring the interest-bearing coupon warrants from which such funds were derived.

(5) FUNDING OR REFUNDING OTHER TYPES OF INDEBTEDNESS.—Any proposed plan for refunding any type of outstanding and legally incurred school indebtedness, not covered by this section, shall be submitted to the Department of Education for approval under rules of the State Board of Education. No such indebtedness may be refunded and no plan for refunding such indebtedness may be approved, unless the plan provides for retiring the indebtedness in reasonably equal annual installments over the period of years covered, unless other obligations to be retired during any of these years make adjustments necessary. No indebtedness of any type may be refunded on a sinking fund basis. The district school board shall provide that all refunding warrants, notes, or bonds shall be callable, upon proper notice, beginning not more than 10 years following the date of refunding. If any indebtedness outstanding against the county or district current school funds cannot be retired over a period of 10 years as prescribed in this section, or cannot be funded or refunded by issuing interest-bearing coupon warrants, the Department of Education is authorized to cooperate with the school officials of the district in developing a practicable plan for refunding such indebtedness and, when such a plan has been developed, may approve an agreement with the district school officials for refunding such indebtedness to be retired over a period of time which shall not exceed a maximum of 20 years; and, if necessary, for refunding the indebtedness by issuing interest-bearing notes. Any funding or refunding obligations issued, as prescribed herein, are not and shall not be deemed to be additional bonds within the meaning of the Constitution and laws of Florida, and it shall not be necessary for such obligations to be submitted to, or approved by, a vote of the people of the district. In preparing and carrying out such a plan for funding or refunding the school indebtedness, the district school board and the district school superintendent shall follow the procedures prescribed in this section, supplemented by rules of the State Board of Education, except for the modifications which are herein authorized.