§ 20-2-564 - Bonds not state debt; use of appropriations and other funds for leases from authority; collection of rentals; assignment of payments
O.C.G.A. 20-2-564 (2010)
20-2-564. Bonds not state debt; use of appropriations and other funds for leases from authority; collection of rentals; assignment of payments
(a) Revenue bonds issued under this part shall not be deemed to constitute a debt of the state or a pledge of the faith and credit of the state, but such bonds shall be payable solely from the fund provided for in Code Section 20-2-567. The issuance of such revenue bonds shall not directly, indirectly, or contingently obligate the state to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment. All such bonds shall contain recitals on their face covering substantially the foregoing provisions of this Code section; provided, however, that such funds as may be received from state appropriations or from any other source are declared to be available and may be used on behalf of the county boards of education, city boards of education, or governing bodies of independent districts or systems for the performance of any lease contract entered into by such boards or governing bodies, unless the use of such funds shall be otherwise stipulated by law.
(b) In the event any county board of education, city board of education, or governing body of an independent school district or system shall enter into a lease contract or an agreement of sale with the authority as provided in this part, then any sums accruing to and for the benefit of such school district or system by virtue of any state appropriation to which such school district or system may be entitled shall be withheld from such school district or system and the State Board of Education shall, on behalf of such school district or system, apply so much thereof as is necessary directly to the authority until such time as the obligation of the lease contract or agreement of sale shall have been paid in full; it being intended that such sums, if any, as may be appropriated by the legislature and to which a school district or system may be entitled shall be subject to be first applied on behalf of such school district or system to the extent necessary to the faithful performance of any lease contract or agreement of sale of that particular school district or system with the authority.
(c) In the event any such sums so appropriated by the legislature to the state board to and for the benefit of each county, city, or independent school district or system which has entered into a lease contract or an agreement of sale with the authority are not sufficient to discharge the lease or installment purchase obligations and undertakings therein agreed to be performed and should the school district or system fail to pay any sum necessary to make up the difference between the amount to be paid under the lease contract or agreement of sale and that actually paid by the state board on behalf of the school district or system directly to the authority as provided in subsection (b) of this Code section, then it shall be the duty of the authority to notify immediately, in writing, the state board, the Department of Education, and the Office of the State Treasurer of the amount due said authority, and thereupon the state board, the department, and the Office of the State Treasurer are authorized and directed to withhold from any other funds appropriated, allotted, or due to be paid to such county, city, or independent school district or system an amount sufficient to pay the obligation due the authority by the defaulting county, city, or independent school district or system for the rental or purchase of buildings or facilities; and the state board, the department, and the Office of the State Treasurer are authorized and directed to pay such funds to the authority on behalf of the county, city, or independent school district or system to be applied in payment on such unpaid rentals or installment payments of purchase price, such payment being charged against the respective funds due such county, city, or independent school district or system.
(d) The rentals contracted to be paid by the state board or other contracting or leasing department, agency, or institution of the state to the authority under leases or contracts entered upon pursuant to this part shall constitute obligations of the state for the payment of which the good faith of the state is pledged. Such rentals shall be paid as provided in the lease contracts from funds appropriated for such purposes by the terms of the Constitution of Georgia. It shall be the duty of the state board or other contracting or leasing department, agency, or institution of the state to see to the punctual payment of all such rentals.
(e) In the event of any failure or refusal on the part of any party punctually to perform any covenant or obligation contained in any contract entered upon pursuant to this part, the authority may enforce performance by any legal or equitable process against such party; and consent is given for the institution of any such action.
(f) The authority shall be permitted to assign any payment due it by a contracting party to a trustee or paying agent as may be required by the terms of any trust indenture entered into by the authority.