House Bill 1253
By: Representatives Carpenter of the 4th, Jones of the 47th, Dickey of the 134th, Williams of
the 148th, Hilton of the 48th, and others
A BILL TO BE ENTITLED
AN ACT
To amend Article 31B of Chapter 2 of Title 20 of the Official Code of Georgia Annotated,
relating to charter school capital finance, so as to establish the Georgia Charter School
Facilities Authority for the purpose of enabling charter schools to obtain revolving loan funds
and other public financing assistance for purposes of constructing, renovating, and
rehabilitating educational facilities for such schools; to provide for definitions; to provide for
the composition, duties, and powers of such authority; to amend Article 2 of Chapter 17 of
Title 50 of the Official Code of Georgia Annotated, the "Georgia State Financing and
Investment Commission Act," so as to provide for the issuance of general obligation bonds
by the Georgia State Financing and Investment Commission to provide for educational
facilities for charter schools; to provide for and revise definitions; to provide for related
matters; to repeal conflicting laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
Article 31B of Chapter 2 of Title 20 of the Official Code of Georgia Annotated, relating to
charter school capital finance, is amended by designating Code Sections 20-2-2095
through 20-2-2095.5 as Part 1, by replacing the term "article" with the term "part" wherever
the former term appears in any of such Code sections, and by adding a new part to read as
follows:
<ins>"Part 2
20-2-2095.20.
As used in this part, the term:
(1) 'Authority' means the Georgia Charter School Facilities Authority created in this part.
(2) 'Charter school' shall have the same meaning as set forth in Code Section
20-2-2095.1.
(3) 'Cost of project' or 'cost of any project' means:
(A) All costs of acquisition, by purchase or otherwise, construction, assembly,
installation, modification, renovation, extension, or rehabilitation incurred in
connection with any project or any part of any project;
(B) All costs of real property, fixtures, or personal property used in or in connection
with or necessary for any project or for any facilities related thereto, including but not
limited to, the costs of all land, interests in land, estates for years, easements, rights,
improvements, water rights, and connections for utility services; the costs of fees,
franchises, permits, approvals, licenses, and certificates; the costs of securing any such
franchises, permits, approvals, licenses, or certificates; the costs of preparation of any
application therefor; and the costs of all fixtures, machinery, equipment, furniture, and
other property used in or in connection with or necessary for any project;
(C) All financing charges and loan or loan guarantee fees and all interest on notes of
the authority which accrue or are paid prior to and during the period of construction of
a project and during such additional period as the authority may reasonably determine
to be necessary to place such project in operation;
</ins>
<ins>(D) All costs of engineering, surveying, planning, environmental assessments, financial
analyses, and architectural, legal, and accounting services and all expenses incurred by
engineers, surveyors, planners, environmental scientists, fiscal analysts, architects,
attorneys, accountants, and any other necessary technical personnel in connection with
any project;
(E) All expenses for inspection of any project;
(F) All fees and all other costs and expenses incurred relative to the issuance of any
notes for any project;
(G) All fees of any type charged by the authority in connection with any project;
(H) All expenses of or incidental to determining the feasibility or practicability of any
project;
(I) All costs of plans and specifications for any project;
(J) All costs of title insurance and examinations of title with respect to any project;
(K) Repayment of any loans for the advance payment of any part of any of the
foregoing costs, including interest thereon and any other expenses of such loans;
(L) Administrative expenses of the authority and such other expenses as may be
necessary or incidental to any project or the financing thereof or the placing of any
project in operation; and
(M) The establishment of a fund or funds as the authority may approve with respect to
the financing and operation of any project and as may be authorized by any instrument
or agreement pursuant to the provisions of which the issuance of any notes of the
authority may be authorized.
Any cost, obligation, or expense incurred for any of the purposes specified in this
paragraph shall be a part of the cost of the project and may be paid or reimbursed as such
out of the proceeds of notes issued by the authority.
(4) 'Educational facilities' shall include buildings, fixtures, and equipment necessary for
the effective and efficient operation of charter schools, which, without limiting the
</ins>
<ins>generality of the foregoing, shall include: classrooms; libraries; rooms and space for
physical education; space for fine arts; restrooms; specialized laboratories; cafeterias;
media centers; building equipment; building fixtures; furnishings; career, technical, and
agricultural education labs and facilities to support industry credentialing; related exterior
facilities; landscaping and paving; and similar items which the State Board of Education
may determine necessary. The following facilities are specifically excluded: swimming
pools, tracks, stadiums, and other facilities or portions of facilities used primarily for
athletic competition.
(5) 'Project' means the acquisition, construction, installation, modification, renovation,
repair, extension, renewal, replacement, or rehabilitation of land, interest in land,
buildings, structures, facilities, or other improvements and the acquisition, installation,
modification, renovation, repair, extension, renewal, replacement, rehabilitation, or
furnishing of fixtures, machinery, equipment, furniture, or other property of any nature
whatsoever used on, in, or in connection with any such land, interest in land, building,
structure, facility, or other improvement, all for the essential public purpose of providing
educational facilities.
(6) 'Qualified charter school organization' shall have the same meaning as set forth in
Code Section 20-2-2095.1.
(7) 'Renovation' or 'modernization' or both refers to construction projects which consist
of the installation or replacement of major building components including lighting,
heating, air-conditioning, plumbing, roofing, electrical, electronic, or flooring systems;
millwork; cabinet work and fixed equipment; energy retrofit packages; or room-size
modifications within an existing facility, but excluding routine maintenance and repair
items or operations.
</ins>
<ins>20-2-2095.21.
(a) There is created a body corporate and politic to be known as the Georgia Charter
School Facilities Authority which shall be deemed an instrumentality of the state and a
public corporation; and by that name, style, and title such body may contract and be
contracted with and bring and defend actions in all courts of this state. The authority shall
consist of 15 members: the State School Superintendent, ex officio; the chairperson of the
State Board of Education, ex officio; the state property officer, ex officio; the state auditor,
ex officio; the executive director of the State Charter Schools Commission, ex officio; the
director of the Office of Charter School Compliance, ex officio; three members to be
appointed by the Governor; three members to be appointed by the President of the Senate;
and three members to be appointed by the Speaker of the House of Representatives. The
Governor, the President of the Senate, and the Speaker of the House of Representatives
shall each appoint one member to serve until July 1, 2028, and two members to serve until
July 1, 2030. Upon the expiration of each such initial terms, the terms of all succeeding
members shall be for four years.
(b) A majority of the members of the authority shall constitute a quorum. No vacancy on
the authority shall impair the right of a majority of the appointed members from exercising
all rights and performing all duties of the authority.
(c) The members of the authority shall be accountable in all respects as trustees. The
authority shall keep suitable books and records of all actions and transactions and shall
submit such books together with a statement of the authority's financial position to an
independent auditing firm selected by the authority on or about the close of the state's fiscal
year for the purpose of obtaining a certified audit of the authority's finances.
(d) The authority shall make rules and regulations for its own government. The authority
shall have perpetual existence. Any change in the name or composition of the authority
shall in no way affect the vested rights of any person under this part or impair the
obligations of any contracts existing under this part.
</ins>
<ins>(e) The Attorney General shall provide legal services for the authority and in connection
therewith Code Sections 45-15-13 through 45-15-16 shall be fully applicable.
(f) The members of the commission shall not be compensated for their services on the
commission but may be reimbursed for per diem and travel expenses in the same manner
as provided for in Code Section 45-7-21.
(g) The authority is assigned to the Department of Education for administrative purposes
only.
20-2-2095.22.
(a) The corporate purpose and the general nature of the business of the authority shall be
assistance in constructing, extending, rehabilitating, repairing, replacing, and renewing
educational facilities necessary for educational purposes or necessary or incidental to such
purposes by providing loans and other forms of financial and technical assistance to
qualified charter school organizations to finance any project or pay the cost of any project.
(b) The authority shall have power:
(1) To sue and be sued in all courts of this state, the original jurisdiction and venue of
such actions being the Superior Court of Fulton County;
(2) To have a seal and alter the same at its pleasure;
(3) To adopt bylaws governing the conduct of business by the authority, the election and
duties of officers of the authority, and other matters which the authority determines to
deal with in its bylaws;
(4) To designate three or more of its number to constitute an executive committee who,
to the extent provided in such resolution or in the bylaws of the authority, shall have and
may exercise the powers of the authority in the management of the affairs and property
of the authority and the exercise of its powers;
(5) To appoint an executive director who shall be executive officer and administrative
head of the authority. The executive director shall be appointed and serve at the pleasure
</ins>
<ins>of the authority. The executive director shall hire officers, agents, and employees,
prescribe their duties and qualifications and fix their compensation, and perform such
other duties as may be prescribed by the authority. Such officers, agents, and employees
shall serve at the pleasure of the executive director;
(6) To make and execute contracts, lease agreements, and all other instruments necessary
or convenient to exercise the powers of the authority or to further the public purpose for
which the authority is created, such contracts, leases, or instruments to include contracts
for construction, operation, management, or maintenance of projects and facilities owned
by a charter school organization, a local government, the authority, or by the state or any
state authority; and any and all local governments, departments, institutions, authorities,
or agencies of the state are authorized to enter into contracts, leases, agreements, or other
instruments with the authority upon such terms and to transfer real and personal property
to the authority for such consideration and for such purposes as the authority deems
advisable;
(7) To acquire by purchase, lease, or otherwise and to hold, lease, and dispose of real or
personal property of every kind and character, or any interest therein, in furtherance of
the public purpose of the authority;
(8) To make loans to qualified charter school organizations to finance projects and to pay
the cost of any project by qualified charter school organizations and to adopt rules,
regulations, and procedures for making such loans, including to fund a revolving loan
fund;
(9) To make loans to any qualified charter school organization for the cost or expense
of any project or any part of the cost or expense of any project, which loans may be
evidenced or secured by trust indentures, loan agreements, notes, mortgages, deeds to
secure debt, trust deeds, security agreements, or assignments, on such terms and
conditions as the authority shall determine to be reasonable in connection with such
loans, including provision for the establishment and maintenance of reserve funds; and,
</ins>
<ins>in the exercise of powers granted by this part in connection with any project, the authority
shall have the right and power to require the inclusion in any such trust indentures, loan
agreement, note, mortgage, deed to secure debt, trust deed, security agreement,
assignment, or other instrument such provisions or requirements for guaranty of any
obligations, insurance, construction, use, operation, maintenance, and financing of a
project and such other terms and conditions as the authority may deem necessary or
desirable;
(10) To finance projects by loan, loan guarantee, lease, or otherwise, and to pay the cost
of any project from any funds of the authority or from any contributions or loans by
persons, corporations, partnerships, whether limited or general, or other entities, all of
which the authority is authorized to receive, accept, and use;
(11) To collect fees and charges in connection with its loans, loan guarantees,
commitments, management services, and servicing including, but not limited to,
reimbursements of costs of financing, as the authority shall determine to be reasonable
and as shall be approved by the authority;
(12) To lease to qualified charter school organizations any authority owned facilities or
property or any state owned facilities or property which the authority is managing under
contract with the state;
(13) To provide advisory, technical, consultative, training, educational, and project
assistance services to qualified charter school organizations and to enter into contracts
with qualified charter school organizations to provide such services. Qualified charter
school organizations are authorized to enter into contracts with the authority for such
services and to pay for such services as may be provided them;
(14) To acquire or contract to acquire from any person, firm, corporation, local
government, federal or state agency, or corporation by grant, purchase, or otherwise,
leaseholds, real or personal property, or any interest therein; and to sell, assign, exchange,
transfer, convey, lease, mortgage, or otherwise dispose of or encumber the same; and
</ins>
<ins>qualified charter school organization is authorized to grant, sell, or otherwise alienate
leaseholds, real and personal property, or any interest therein to the authority;
(15) To apply for and to accept any gifts or grants or loan guarantees or loans of funds
or property or financial or other aid in any form from the federal government or any
agency or instrumentality thereof, or from the state or any agency or instrumentality
thereof, or from any other source for any or all of the purposes specified in this part and
to comply, subject to the provisions of this part, with the terms and conditions thereof;
(16) To contract with state agencies or any qualified charter school organization for the
use by the authority of any property or facilities or services of the state or any such state
qualified charter school organization or for the use by any state agency or qualified
charter school organization of any facilities or services of the authority and such state
agencies and qualified charter school organizations are authorized to enter into such
contracts;
(17) As security for repayment of any obligations of the authority, to pledge, lease,
mortgage, convey, assign, hypothecate, or otherwise encumber any property of the
authority including, but not limited to, real property, fixtures, personal property, and other
funds and to execute any lease, trust indenture, trust agreement, agreement for the sale
of the authority's obligations, loan agreement, mortgage, deed to secure debt, trust deed,
security agreement, assignment, or other agreement or instrument as may be necessary
or desirable, in the judgment of the authority, to secure any such obligations, which
instruments or agreements may provide for foreclosure or forced sale of any property of
the authority upon default in any obligation of the authority, either in payment of
principal, premium, if any, or interest or in the performance of any term or condition
contained in any such agreement or instrument;
(18) To use income earned on any investment for such corporate purposes of the
authority as the authority in its discretion shall determine;
</ins>
<ins>(19) To incorporate one or more nonprofit corporations as subsidiary corporations of the
authority for the purpose of carrying out any of the powers of the authority and to
accomplish any of the purposes of the authority. Any such subsidiary corporation shall
be a nonprofit corporation, a public body corporate and politic, a political subdivision of
the state, and an instrumentality of the state and shall exercise essential governmental
functions. Any subsidiary corporations created pursuant to this power shall be created
pursuant to Chapter 3 of Title 14, the 'Georgia Nonprofit Corporation Code,' and the
Secretary of State shall be authorized to accept such filings. Upon dissolution of any
subsidiary corporation of the authority, any assets shall revert to the authority or to any
successor to the authority or, failing such succession, to the State of Georgia. The
authority shall not be liable for the debts or obligations of any subsidiary corporation or
for the actions or omissions to act of any subsidiary corporation unless the authority
expressly so consents;
(20) To cooperate and act in conjunction with educational organizations; with agencies
of the federal government and this state and local government; with other states and their
political subdivisions; and with joint agencies thereof, and such state agencies, local
government, and joint agencies are authorized and empowered to cooperate and act in
conjunction and to enter into contracts or agreements with the authority and qualified
charter school organizations to achieve or further the policies of the state declared in this
part;
(21) To procure insurance against any loss in connection with its property and other
assets or obligations or to establish cash reserves to enable it to act as self-insurer against
any and all such losses;
(22) To lend any of the securities of the type described in this subsection;
(23) To transfer to the state any funds of the authority determined by the authority to be
in excess of those needed for its corporate purposes;
</ins>
<ins>(24) To make loan commitments and loans to qualified charter school organizations for
educational facilities projects;
(25) To exercise any power granted by the laws of this state to public or private
corporations which is not in conflict with the public purpose of the authority;
(26) To do all things necessary or convenient to carry out the powers conferred by this
part; and
(27) To promulgate and adopt rules and regulations to carry out the purposes of this part.
(c) The authority shall not have the power of eminent domain.
20-2-2095.23.
(a) The authority may make loans to a qualified charter school organization to pay all or
any part of the cost of:
(1) A project, up to a maximum of the lesser of 20 percent of the project total or $2
million, except as provided for in paragraph (2) of this subsection; and
(2) A renovation or modernization project, up to a maximum of $200,000.00.
(b) The authority shall not enter into any loan or loan commitment with a qualified charter
school organization for a term that exceeds the earlier of the expiration date of such
qualified charter school organization's current charter agreement with the State Board of
Education or five years.
(c) The authority and a qualified charter school organization may enter into such loan or
other loan commitments as may be determined appropriate by the authority.
(d) The authority may require as a condition of any loan to a qualified charter school
organization that such qualified charter school organization shall perform any or all of the
following:
(1) Create and maintain a special fund or funds as additional security for the payment of
any amounts becoming due under any agreement as shall be sufficient to make such
payment as the same shall become due and payable;
</ins>
<ins>(2) Create and maintain such other special funds as may be required by the authority; and
(3) Such other acts, including the conveyance of real and personal property together with
all right, title, or interest therein to the authority, as may be deemed necessary or desirable
by the authority to secure the payment of the principal of and interest on notes or
obligations and to provide for the remedies of the authority in the event of any default by
such qualified charter school organization in such payment.
(e) All qualified charter school organizations are authorized to perform such acts, take
such action, adopt such proceedings, and make and carry out such contracts with the
authority as may be contemplated by this part.
(f) In connection with the making of any loan authorized by this part, the authority may
fix and collect such fees and charges, including but not limited to, the reimbursement of
all costs of financing by the authority, as the authority shall determine to be reasonable.
20-2-2095.24.
(a) For the purposes of this Code section, the term 'lease agreement' means and includes
a lease, operating lease rental agreement, usufruct, sale and lease back, or any other lease
agreement having a term of not more than 50 years and concerning real, personal, or mixed
property, any right, title, or interest therein by and between the state, the authority, a
qualified charter school organization, or any combination thereof.
(b) A qualified charter school organization may enter into a lease agreement for the
provision of educational facilities owned by the authority upon such terms and conditions
as the authority shall determine to be reasonable including, but not limited to, the
reimbursement of all costs of construction and financing and claims arising therefrom.
(c) No lease agreement shall be deemed to be a contract subject to any law requiring that
a contract shall be let only after receipt of competitive bids.
(d) Any lease agreement may provide for the construction of an educational facility by the
qualified charter school organization as agent for the authority. In such event, all contracts
</ins>
<ins>for such construction shall be let by such qualified charter school organization in
accordance with the provisions of law otherwise applicable to the letting of such contracts
by such qualified charter school organization and with the provisions of state law
pertaining to prevailing wages, labor standards, and working hours. Any such lease
agreement may contain provisions by which such qualified charter school organization
shall indemnify the authority against any and all damages resulting from acts or omissions
to act on the part of such qualified charter school organization or its officers, agents, or
employees in constructing such facility or facilities, in letting any contracts in connection
therewith, or in operating and maintaining the same.
(e) Any lease agreement directly between the state or authority and a qualified charter
school organization may contain provisions requiring the qualified charter school
organization to perform any or all of the following:
(1) Create and maintain a special fund or funds as additional security for the payment of
any amounts becoming due under any agreement as shall be sufficient to make such
payment as the same shall become due and payable;
(2) Create and maintain such other special funds as may be required by the authority; and
(3) Such other acts and take such other action as may be deemed necessary and desirable
by the authority to secure the complete and punctual performance by such qualified
charter school organization of such lease agreements and to provide for the remedies of
the authority in the event of a default by such qualified charter school organization in
such payment.
20-2-2095.25.
Neither the members of the authority nor any officer or employee of the authority acting
on behalf thereof, while acting within the scope of his or her authority, shall be subject to
any liability resulting from:
</ins>
<ins>(1) The construction, ownership, maintenance, or operation of any project financed with
the assistance of the authority; or
(2) Carrying out any of the powers expressly given in this part.
20-2-2095.26.
No notice, proceeding, or publication except those required in this part shall be necessary
to the performance of any act authorized in this part; nor shall any such act be subject to
referendum.
20-2-2095.27.
No obligations of and no indebtedness incurred by the authority shall constitute an
indebtedness or obligation or a pledge of the faith and credit of the State of Georgia or of
its agencies; nor shall any act of the authority in any manner constitute or result in the
creation of an indebtedness of the state or its agencies or a cause of action against the state
or its agencies.
20-2-2095.28.
It is found, determined, and declared that the creation of this authority and the carrying out
of its corporate purposes is in all respects for the benefit of the people of the state and that
the authority is an institution of purely public charity and will be performing an essential
governmental function in the exercise of the power conferred upon it by this part. For such
reasons, the state covenants with the holders from time to time of obligations issued under
this part that the authority shall not be required to pay any taxes or assessments imposed
by the state or any of its counties, municipal corporations, political subdivisions, or taxing
districts upon any property acquired by the authority or under its jurisdiction, control,
possession, or supervision or leased by it to others, or upon its activities in the operation
or maintenance of any such property or on any income derived by the authority in the form
</ins>
<ins>of fees, recording fees, rentals, charges, purchase price, installments, or otherwise, and that
the notes of the authority, their transfer, and the income therefrom shall at all times be
exempt from taxation within the state. The tax exemption provided in this part shall not
include any exemption from sales and use tax on property purchased by the authority or for
use by the authority.
20-2-2095.29.
The authority shall have all rights afforded the state by virtue of the Constitution of the
United States, and nothing in this part shall be construed to remove any such rights.
20-2-2095.30.
This part, being for the welfare of this state and its inhabitants, shall be liberally construed
to effect the purposes specified in this part.
20-2-2095.31.
(a) In the event of a failure of any qualified charter school organization to collect and remit
in full all amounts due to the authority and all amounts due to others which involve the
authority, on the date such amounts are due under the terms of any note of the qualified
charter school organization, it shall be the duty of the authority to notify the state treasurer
who shall withhold all funds of the state and all funds administered by the state and its
agencies, boards, and instrumentalities allotted to such qualified charter school
organization until such qualified charter school organization has collected and remitted in
full all sums due and cured or remedied all defaults on any such note.
(b) Nothing contained in this Code section shall mandate the withholding of funds
allocated to a qualified charter school organization which would violate contracts to which
the state is a party, the requirements of federal law imposed on the state, or judgments of
any court binding the state."
</ins>
SECTION 2.
Article 2 of Chapter 17 of Title 50 of the Official Code of Georgia Annotated, the "Georgia
State Financing and Investment Commission Act," is amended in Code Section 50-17-21,
relating to definitions, by revising paragraph (5) and adding new paragraphs to read as
follows:
<ins>"(0.1) 'Charter school' shall have the same meaning as set forth in Code Section
20-2-2095.1."
</ins> "(5) 'General obligation debt' means obligations of this state issued pursuant to this article
to acquire, construct, develop, extend, enlarge, or improve land, waters, property,
highways, buildings, structures, equipment, or facilities of the state, its agencies,
departments, institutions, and those state authorities which were created and activated
prior to the amendment to Article VII, Section VI, Paragraph I(a) of the Constitution
of 1945, adopted November 8, 1960, for which the full faith, credit, and taxing power of
the state are pledged for the payment thereof. <del>'General obligation debt'</del> <ins>Such term</ins> also
means obligations of this state issued to provide educational facilities for county and
independent school systems, <ins>to provide educational facilities for charter schools,</ins> and to
provide public library facilities for county and independent school systems, counties,
municipalities, and boards of trustees of public libraries or boards of trustees of public
library systems. <del>'General obligation debt'</del> <ins>Such term</ins> further means debt incurred to make
loans to counties, municipal corporations, political subdivisions, local authorities, and
other local governmental entities for water or sewerage facilities or systems."
<ins>"(7.1) 'Qualified charter school organization' shall have the same meaning as set forth in
Code Section 20-2-2095.1."
</ins> SECTION 3.
Said article is further amended in Code Section 50-17-22, relating to the State Financing and
Investment Commission, by revising subsection (a) as follows:
"(a) Responsibilities. Subject to the limitations contained in this article, the commission
shall be responsible for the issuance of all public debt incurred hereunder, for the proper
application of the proceeds of such debt to the purposes for which it is incurred, for the
proper application of an appropriation to the commission for capital outlay to the purpose
for which it is appropriated, and for the application and administration of this article;
provided, however, that the proceeds of guaranteed revenue obligations shall be paid to the
issuer thereof, and such proceeds and the application thereof shall be the responsibility of
the issuer. The commission shall also be responsible for the proper disbursement of an
appropriation to it for public school capital outlay, <ins>including charter school capital outlay,
</ins> and the commission and the State Board of Education will be concurrently responsible for
its proper application. The commission shall be responsible for the issuance of guaranteed
revenue debt, except that bonds themselves evidencing such debt shall be in the name of
the instrumentality of this state issuing the same and shall be issued and executed in
accordance with the laws relative to such instrumentality and the applicable provisions of
this article."
SECTION 4.
Said article is further amended in Code Section 50-17-24, relating to authority to incur public
debt, purposes, and limitations, by revising paragraph (3) of subsection (b) as follows:
"(3) Public debt for public purposes may be either general obligation debt or guaranteed
revenue debt. General obligation debt may be incurred by issuing obligations to acquire,
construct, develop, extend, enlarge, or improve land, waters, property, highways,
buildings, structures, equipment, or facilities of the state, its agencies, departments,
institutions, and those state authorities which were created and activated prior to the
amendment adopted November 8, 1960, to Article VII, Section VI, Paragraph I(a) of the
Constitution of 1945. General obligation debt may also be incurred to provide
educational facilities for county and independent school systems <ins>and for charter schools
</ins>
and to provide public library facilities for county and independent school systems,
counties, municipalities, and boards of trustees of public libraries or boards of trustees
of public library systems. General obligation debt may also be incurred in order to make
loans to counties, municipal corporations, political subdivisions, local authorities, and
other local governmental entities for water or sewerage facilities or systems. It shall not
be necessary for the state or a state authority to hold title to or otherwise be the owner of
such facilities or systems. General obligation debt for these purposes may be authorized
and incurred for administration and disbursement by a state authority created and
activated before, on, or after November 8, 1960. Guaranteed revenue debt may be
incurred by guaranteeing the payment of revenue obligations issued by an instrumentality
of the state if such revenue obligations are issued to finance toll bridges, toll roads, or any
other land public transportation facilities or systems, or water or sewage treatment
facilities or systems, or to make or purchase, or lend or deposit against the security of,
loans to citizens of the state for educational purposes; provided, however, that in no event
shall general obligation debt or guaranteed revenue debt be incurred for water or sewage
treatment facilities or systems for counties or municipalities unless such facilities are
financed in whole or in part through an instrumentality of the state created by the General
Assembly for the purpose of assisting the state, counties, or municipalities in the
financing of water or sewage treatment facilities or systems for the benefit of the citizens
of Georgia. General obligation debt or guaranteed revenue debt may be incurred to fund
or refund any such debt or to fund or refund any obligations issued upon the security of
contracts to which the second paragraph of Article IX, Section VI, Paragraph I(a) of the
Constitution of Georgia of 1976 is applicable."
SECTION 5.
Said article is further amended in Code Section 50-17-27, relating to application and
investment of public debt proceeds by commission and by the Environmental Finance
Authority, by revising subsection (b) as follows:
"(b) Proceeds received from the sale of bonds evidencing general obligation debt shall be
held in trust by the commission and disbursed promptly by the commission in accordance
with the original purpose set forth in the authorization of the General Assembly and in
accordance with rules and regulations established by the commission. Bond proceeds and
other proceeds held by the commission shall be as fully invested as is practical, consistent
with the proper application of such proceeds for the purposes intended. Investments shall
be limited to general obligations of the United States or of subsidiary corporations of the
United States government fully guaranteed by such government, or to obligations issued
by the Federal Land Bank, Federal Home Loan Bank, Federal Intermediate Credit Bank,
Bank for Cooperatives, Federal Farm Credit Banks regulated by the Farm Credit
Administration, Federal Home Loan Mortgage Corporation, Federal National Mortgage
Association, or to tax exempt obligations issued by any state, county, municipal
corporation, district, or political subdivision, or civil division or public instrumentality of
any such government or unit of such government, or to prime bankers' acceptances, or to
the units of any unit investment trusts the assets of which are exclusively invested in
obligations of the type described in this subsection, or to the shares of any mutual fund the
investments of which are limited to securities of the type described in this subsection and
distributions from which are treated for federal income tax purposes in the same manner
as the interest on said obligations, provided that at the time of investment such obligations
or the obligations held by any such unit investment trust or the obligations held or to be
acquired by any such mutual fund are limited to obligations which are rated within one of
the top two rating categories of any nationally recognized rating service or any rating
service recognized by the commissioner of banking and finance, and no others, or to
securities lending transactions involving securities of the type described in this subsection.
Income earned on any such investments or otherwise earned by the commission shall be
retained by the commission and used to purchase and retire any public debt or any bonds
or obligations issued by any public agency, public corporation, or authority which are
secured by a contract to which the second paragraph of Article IX, Section VI,
Paragraph I(a) of the Constitution of Georgia of 1976 is applicable and may be used to pay
operating expenses of the commission. However, in order to provide for contingencies,
efficiency, and flexibility, the commission may agree by contract or grant agreement with
county and independent school systems <ins>and with qualified charter school organizations</ins> that
income earned during grant administration on a direct appropriation of state funds to the
commission for public school capital outlay will be applied to the capital outlay purposes
of the appropriation. Otherwise, the interest on direct appropriations to the commission
shall be deposited into the treasury."
SECTION 6.
All laws and parts of laws in conflict with this Act are repealed.