---
title: Ga. Const. Art. VII, Sec. IV, Para. I. Purposes for which debt may be incurred.
collection: code
id: ga-const:art-vii-sec-iv-para-i
cite_as: Ga. Const. Art. VII, Sec. IV, Para. I
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---

# Ga. Const. Art. VII, Sec. IV, Para. I. Purposes for which debt may be incurred.

A constitution provision shown as in force is in force as printed in the volume. A court decision can make a printed provision unenforceable without changing the volume, and the volume does not record that.

The state may incur:

(a) Public debt without limit to repel invasion, suppress insurrection, and defend the state in time of war.

(b) Public debt to supply a temporary deficit in the state treasury in any fiscal year created by a delay in collecting the taxes of that year. Such debt shall not exceed, in the aggregate, 5 percent of the total revenue receipts, less refunds, of the state treasury in the fiscal year immediately preceding the year in which such debt is incurred. The debt incurred shall be repaid on or before the last day of the fiscal year in which it is incurred out of taxes levied for that fiscal year. No such debt may be incurred in any fiscal year under the provisions of this subparagraph (b) if there is then outstanding unpaid debt from any previous fiscal year which was incurred to supply a temporary deficit in the state treasury.

(c) General obligation debt 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 of those state authorities which were created and activated prior to November 8, 1960.

(d) General obligation debt to provide educational facilities for county and independent school systems 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, and, when the construction of such educational or library facilities has been completed, the title to such facilities shall be vested in the respective local boards of education, counties, municipalities, or public library boards of trustees for which such facilities were constructed.

(e) General obligation debt in order to make loans to counties, municipal corporations, political subdivisions, local authorities, and other local government entities for water or sewerage facilities or systems or for regional or multijurisdictional solid waste recycling or solid waste 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.

(f) Guaranteed revenue debt by guaranteeing the payment of revenue obligations issued by an instrumentality of the state if such revenue obligations are issued to finance:

(1) Toll bridges or toll roads.

(2) Land public transportation facilities or systems.

(3) Water facilities or systems.

(4) Sewage facilities or systems.

(5) Loans to, and loan programs for, citizens of the state for educational purposes.

(6) Regional or multijurisdictional solid waste recycling or solid waste facilities or systems. (Ga. Const. 1983, Art. 7, § 4, Para. 1; Ga. L. 1984, p. 1713, § 1/SR 300; Ga. L. 1986, p. 1612, § 1/HR 363; Ga. L. 1992, p. 3329, §§ 1, 2/HR 732)

## Cross References

Sinking fund, Ga. Const. 1983, Art. VII, Sec. IV, Para. III, and § 50-17-23. County and municipal debts, Ga. Const. 1983, Art. IX, Sec. V, Paras. I through VII. Duties incurred for defense, § 38-2-173. As to general obligation debt and guaranteed revenue debt, § 50-17-23. Administration of public debt, § 50-17-24 et seq.

## Editor's Notes

The constitutional amendment (Ga. L. 1984, p. 1713, § 1) which revised subparagraph (d) by inserting ‘‘and to provide public library facilities...of public library systems,’’ inserting ‘‘or library’’ preceding ‘‘facilities has been completed,’’ and inserting ‘‘counties, municipalities, or...boards of trustees’’ preceding ‘‘for which such facilities,’’ and deleting ‘‘educational’’ preceding ‘‘facilities shall be vested,’’ was approved by a majority of the qualified voters voting at the general election held on November 6, 1984.

The constitutional amendment (Ga. L. 1986, p. 1612, § 1) which redesignated former subparagraph (e) as subparagraph (f) and which added present subparagraph (e) was approved by a majority of the qualified voters voting at the general election held on November 4, 1986.

The constitutional amendment (Ga. L. 1992, p. 3329, §§ 1, 2) which revised subparagraphs (e) and (f) to add provisions as to regional or multijurisdictional solid waste recycling or solid waste facilities or systems was approved by a majority of the qualified voters voting at the general election held on November 3, 1992.

In light of the similarity of the provisions, decisions under former Ga. Const. 1976, Art. VII, Sec. III, Para. I and antecedent provisions are included in the annotations for this paragraph. Current provisions on the same subjects and cases construing them now appear in this paragraph and Paragraphs II through IV of this section.

This paragraph was not violated by Ga. L. 1912, p. 230 for discounting the rentals of the Western and Atlantic Railroad. Wright v. Hardwick, 152 Ga. 302, 109 S.E. 903 (1921) (see Ga. Const. 1983, Art. VII, Sec. IV, Para. I). graph and former Ga. Const. 1976, Art. IX, Sec. VI, Para. I (see now Ga. Const. 1983, Art. VII, Sec. IV, Para.

## 1976 Constitution.

Art. VII, Sec. III, Para. I.

## Proper Construction of This para-III).

This paragraph and former Ga. Const. 1976, Art. IX, Sec. VI, Para. I (see now Ga. Const. 1983, Art. VII, Sec. IV, Para. III), were each in the Constitution of 1945 when it was adopted. They deal with the same subject matter, namely, ‘‘finance, taxation & public debt.’’ They are of equal dignity and to give full force and effect to the will of the people, as thus expressed, they must be construed together, in pari materia. The latter lifts out of the former any inhibition against creation of a debt insofar as creation of a debt is authorized by the latter clause. Any other construction would render one of them meaningless and the Supreme Court will not ascribe to the people an intention to adopt a Constitution containing inconsistent provisions. McLucas v. State Bridge Bldg. Auth., 210 Ga. 1, 77 S.E.2d 531 (1953) (decided under Ga. Const. 1945, Art. IX, Sec. VI, Para. I; see Ga. Const. 1983, Art. VII, Sec. IV, Para. I). ture to authorize debt for any purpose that is consistent with the terms of subparagraph (c). Fuller v. State, 232 Ga. 581, 208 S.E.2d 85 (1974) (see Ga. Const. 1983, Art. VII, Sec. IV, Para. I).

An authority, being an agent of the state but not the state, is not reder this paragraph. Rich v. State, 237 Ga. 291, 227 S.E.2d 761 (1976) (see Ga. Const. 1983, Art. VII, Sec. IV, Para. I).

Word ‘‘debt’’ means any obligation of the state to pay money or other thing of value, which obligation arises the very moment that it is undertaken, and continues until discharged by payment. Barwick v. Roberts, 188 Ga. 655, 4 S.E.2d 664 (1939).

Warrant does not evidence a debt on the part of the state. It creates no contract. Harrison v. Hardman, 169 Ga. 435, 150 S.E. 542 (1929).

## This Paragraph Permits the Legislastricted by State’s Debt Limitation un-Effect of Tendering Executive Warrant Upon State Treasury.

An executive warrant upon the state treasury, authorizing payment of money in pursuance of an appropriation made by law, is not a contract nor in the nature of a contract, but is only a license or power, and is revocable so long as the payment which it warranted has not been made. Harrison v. Hardman, 169 Ga. 435, 150 S.E. 542 (1929).

Should a fund fail to materialize, whatever rights and privileges purchasers of warrants may have had, had not their obligations against state been so met, are not absolutely extinguished in all respects, but shall continue to exist or remain in abeyance for benefit of holders of corresponding warrants should the specific fund for their payment fail to materialize. No debt is thus created by or on behalf of the state, but as part of consideration for sale and discount of the warrants. The holders in a given contingency are allowed certain rights which other obligees formerly had against the state which had never been entirely extinguished, but had been preserved for such holders upon a contingency. Harrison v. Hardman, 169 Ga. 435, 150 S.E. 542 (1929).

## Instance of Debt Inhibited and Invalid Pursuant to State Constitution.

— An agreement between the Commissioner of Agriculture and an individual, whereby the Commissioner, in consideration of an assignment to the Commissioner of a number of leases to lands on which the state farm market is located, promises to pay the assignor, in addition to the consideration expressed in the assignment, $100.00 per month for a period of several years, such promise is a debt inhibited by the Constitution, and cannot be enforced, nor would full performance by the assignor of the agreement impose any legal duty on the state or its officials to comply with such invalid contract. Barwick v. Roberts, 188 Ga. 655, 4 S.E.2d 664 (1939).

Section 32-10-9 does not violate the

## Debt Restriction and Limitation Provision of the State Constitution.

Neither Ga. L. 1953, Jan.-Feb. Sess., p. 626 (see now O.C.G.A. Art. 1, Ch. 10, T. 32), nor the lease contract which the state highway department (now Department of Transportation) made with the State Bridge Building (now Georgia Highway) Authority under and pursuant to Ga. L. 1953, Jan.-Feb. Sess., p. 626, § 8 (see now O.C.G.A. § 32-10-9) for the use of its facilities or services violates the debt restriction and limitation provision of the Constitution. On their face they do not run counter to the Constitution, and the Supreme Court will not attribute to state lawmakers a purpose to circumvent the provisions of that instrument. McLucas v. State Bridge Bldg. Auth., 210 Ga. 1, 77 S.E.2d 531 (1953).

Ga. L. 1953, Jan.-Feb. Sess., p. 626, § 14 (see now O.C.G.A. § 32-10-30), insofar as it authorized issuance of negotiable revenue bonds, did not offend the constitutional provisions. McLucas v. State Bridge Bldg. Auth., 210 Ga. 1, 77 S.E.2d 531 (1953).

Highway Authority’s revenue

## Bonds Not State Obligations or Debts.

— While the State Bridge Building (now Georgia Highway) Authority is an instrumentality of the state, it is nevertheless not the state, nor a part of the state, nor an agency of the state. It is a mere creature of the state, having a distinct corporate entity. Its revenue bonds are not obligations or debts of the state, nor a pledge of the credit of the state, but they are payable solely and exclusively from revenue derived from use of its facilities; and the state is not directly, indirectly, or contingently obligated to levy or pledge any form of taxation whatsoever therefor or to make any appropriation for the payment of them, and Ga. L. 1953, Jan.-Feb. Sess., p. 626, § 23 (see now O.C.G.A. § 32-10-39), requires that the bonds, when issued, must contain recitals on their face to this effect. They are first, last, and always a corporate debt of the authority and in no sense a debt of the state. McLucas v. State Bridge Bldg. Auth., 210 Ga. 1, 77 S.E.2d 531 (1953).

Ga. L. 1949, p. 1009 (see now O.C.G.A. Art. 5, Ch. 3, T. 20), forbids any attempt to obligate the state, pledge the state’s faith or credit, or donate anything belonging to the state; therefore, neither the article, lease contract executed thereunder, nor the revenue bonds issued pursuant thereto offend constitutional inhibitions against state debts, donations, or pledging the faith and credit of the state. Sheffield v. State Sch. Bldg. Auth., 208 Ga. 575, 68 S.E.2d 590 (1952).

An obligation incurred by the Board of Regents of the University System of Georgia, is not a debt of the state, and therefore is not affected by constitutional limitations upon state indebtedness. State v. Regents of Univ. Sys., 179 Ga. 210, 175 S.E. 567 (1934).

It cannot be said that creation of a debt by the Regents of the University System of Georgia is unconstitutional under this paragraph. Villyard v. Regents of Univ. Sys., 204 Ga. 517, 50 S.E.2d 313 (1948) (see Ga. Const. 1983, Art. VII, Sec. IV, Para. I).

Instance of debt contemplated by

## This Paragraph.

Even though the statute establishing state farmers markets provides that fees shall be charged by the markets and used to pay the expenses of establishing and operating them, since the statute does not prohibit other assets of the state from being used in paying such expenses, a debt for an alleged sale of leases of the land on which the market was situated, constituted a debt as contemplated by this paragraph of the state Constitution. Barwick v. Roberts, 188 Ga. 655, 4 S.E.2d 664 (1939) (see Ga. Const. 1983, Art. VII, Sec. IV, Para. I).

Conclusiveness of court judgment validating revenue certificates under

## Art. 3, Ch. 82, T. 36.

A judgment of the superior court validating revenue certificates under Ga. L. 1957, p. 36, § 1 (see now O.C.G.A. Art. 3, Ch. 82, T. 36), unexcepted to, or affirmed on review, is conclusive against the municipality and the citizens of the municipality upon all questions, including the constitutionality of the statute under which the proceedings are had. Cox v. Georgia Educ. Auth., 225 Ga. 542, 170 S.E.2d 240 (1969).

Construction and improvement of ties are activities that the Georgia Development Authority was expressly empowered to undertake by Ga. L. 1983, pp. 1024, 1026 and are not germane to the authority’s powers as they existed before November 8, 1960; therefore, the state may not incur general obligation debt for these new purposes. Georgia State Fin. & Inv. Comm’n v. State, 253 Ga. 766, 325 S.E.2d 162 (1985).

Cited in State Ports Auth. v. Arnall, 201 Ga. 713, 41 S.E.2d 246 (1947); State v. State Toll Bridge Auth., 210 Ga. 690, 82 S.E.2d 626 (1954); State v. Blasingame, 212 Ga. 222, 91 S.E.2d 341 (1956); Gordon v. Clinkscales, 215 Ga. 843, 114 S.E.2d 15 (1960); Carter v. Burson, 230 Ga. 511, 198 S.E.2d 151 (1973); Sears v. State, 232 Ga. 547, 208 S.E.2d 93 (1974).

## Water and Sewage Treatment facili-Editor’s Notes.

In light of the similarity of the provisions, opinions noted under former Ga. Const. 1976, Art. VII, Sec. III, Para. I and antecedent provisions are included in the annotations for this paragraph. Current provisions on the same subjects and opinions construing them now appear in this paragraph and Paragraphs II through IV of this section.


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