Section 50-17-91. Governed by general provisions on commercial paper; issuance of security by governmental entity; requirements of governing body; renewal and reissuance of commercial paper

   (a) Whenever the state or any state authority is authorized by law to incur bonds, notes, or certificates, including but not limited to general obligation bonds, guaranteed revenue bonds, revenue bonds, bond anticipation notes, tax anticipation notes, or revenue anticipation certificates, the state or state authority is authorized to issue such obligation in the form of commercial paper notes. The issuance of commercial paper notes shall be subject to the same restrictions and provisions under the laws of this state which would be applicable to the issuance of the type of bond, note, or certificate in lieu of which the commercial paper notes are being issued. The state or state authority may designate the commercial paper notes issued under this article to be in registered form or bearer form and may provide for payment by wire transfers or electronic funds transfer in accordance with the federal Electronic Fund Transfer Act, 15 U.S.C., Section 1693, et seq. The authority granted by this article to issue commercial paper notes shall not be construed to permit the state or state authority to increase or otherwise alter any debt limits.

(b) To secure commercial paper notes authorized under this article, the state or state authority may:

   (1) Pledge its anticipated taxes, grants, or other revenue; the proceeds of any bonds, notes, or other permanent financing; or any combination thereof;

   (2) Segregate any pledged funds in separate accounts that may be held by the state, state authority, or third parties;

   (3) Enter into contracts with third parties to obtain standby lines of credit or other financial commitments designated to provide additional security for commercial paper notes authorized by this article;

   (4) Establish any reserves deemed necessary for the payment of the commercial paper notes; and

   (5) Adopt resolutions and enter into agreements containing covenants, including covenants to issue bonds, notes, or other permanent financing and provisions for protection and security of the owners of commercial paper notes, which shall constitute enforceable contracts with such owners.

(c) Commercial paper notes authorized by this article may be in any form and contain any terms, including provisions for redemption at the option of the owner and provisions for the varying of interest rates in accordance with any index, banker's loan rate, or other standard.

(d) The governing body shall adopt a resolution finding that issuance of the obligations in the form of commercial paper notes is necessary and desirable, directing the designated officer to arrange for preparation of the requisite number of suitable notes, and specifying other provisions relating to the commercial paper notes including the following:

   (1) For each program of commercial paper notes authorized, the final date of maturity and the total aggregate principal amount of the commercial paper notes authorized to be outstanding at any one time up to the maturity date. The resolution may provide that the commercial paper notes may be issued and renewed from time to time until the final maturity date and that the amount issued from time to time may be set by a designated officer of the governmental entity up to the maximum amount authorized to be outstanding at any one time. The resolution shall include methods of setting the dates, numbers, and denominations of the commercial paper notes;

   (2) The method of setting the interest rates and interest payment dates applicable to the commercial paper notes. Commercial paper notes may bear a stated rate of interest payable only at maturity, which rate or rates may be determined at the time of sale of each unit of commercial paper notes;

   (3) The maximum effective rate of interest the commercial paper notes shall bear;

   (4) The manner of sale;

   (5) The discount, if any, the state or state authority may allow;

   (6) Any provisions for the redemption of the commercial paper notes prior to the stated maturity;

   (7) The technical form and language of the commercial paper notes; and

   (8) All other terms and conditions of the commercial paper notes and of their execution, issuance, and sale deemed necessary and appropriate by the state or state authority.

(e) The governing body, in the resolution authorizing the issuance of commercial paper notes under this article, may delegate to any elected or appointed official of the state or state authority the authority to determine maturity dates, principal amounts, redemption provisions, interest rates, and other terms and conditions of such commercial paper notes that are not appropriately determined at the time of enactment or adoption of the authorizing resolution, which delegated authority shall be exercised subject to such parameters, limitations, and criteria as may be set forth in such resolution.

(f) Any commercial paper notes may be sold at negotiated sale at a price below the par value thereof.

(g) For purposes of determining the principal amount of debt outstanding in connection with complying with any limitations on the amount of debt outstanding for a governmental entity, commercial paper notes shall be deemed outstanding at any time during the term of a program of commercial paper notes in an amount equal to the maximum amount authorized in the resolution.

(h) The renewal and reissuance from time to time of the commercial paper notes pursuant to a commercial paper note program in an amount up to the maximum amount authorized by the resolution shall be deemed to be a refunding of the previously maturing amount.

Code 1981, § 50-17-91, enacted by Ga. L. 2004, p. 886, § 7.