The "Emergency Financial Aid to Local Government Law of 1995" provides procedures whereby local governments may acquire emergency technical and financial assistance provided and guaranteed by the state or, in the case of natural disaster, may obtain adequate financing, thus enabling such local governments to stabilize their financial condition and to meet their current operational and debt service costs. For purposes of such law, a "local government" includes a utility district for purposes of the issuance of notes. This bill expands the term to also include utility authorities. Further, this bill clarifies when a governing body of a local government may issue notes that mature beyond the close of the fiscal year, and allows a local government to issue a note if it is approved by the comptroller of the treasury or the comptroller's designee after the local government has reasonably demonstrated that a natural disaster has caused economic distress to the local government. LOCAL GOVERNMENT PUBLIC OBLIGATIONS ACT OF 1986 The "Local Government Public Obligations Act of 1986" provides a uniform and comprehensive statutory framework authorizing any local government to issue general obligation bonds and revenue bonds for public works projects, general obligation bonds for certain unfunded pension obligations, general obligation refunding bonds, revenue refunding bonds, bond anticipation notes, capital outlay notes, grant anticipation notes, tax anticipation notes, and health care revenue anticipation notes, and to authorize the destruction of bonds, notes and coupons. This bill makes changes relative to interest-bearing grant anticipation notes as described below. Timing of Issue and Sale This bill clarifies when the governing body of a local government may issue and sell interest-bearing grant anticipation notes. The governing body of a local government, acting by resolution, may issue and sell such notes for public works projects in anticipation of money to be received pursuant to a grant contract between a state or federal agency, and the local government. The resolution is not effective until the contract has been executed by all parties to the contract. The governing body must receive approval from the comptroller of the treasury or the comptroller's designee prior to the issuance of the grant anticipation notes. Security This bill requires grant anticipation notes to be secured by a pledge of the money to be received pursuant to a grant contract between a state or federal agency and a local government, in an amount not less than the principal amount of such notes. At its discretion, the local government may add as additional security to the grant anticipation notes any of the following:  A general obligation pledge.  A revenue pledge from a special revenue or enterprise fund, as defined by generally accepted accounting principles, that benefits from the grant. Interest This bill authorizes interest on grant anticipation notes to be a general obligation of a local government, and the local government has the authority to levy ad valorem taxes for the payment of interest on such notes. However, this bill does not preclude a local government from issuing capital outlay notes or bond anticipation notes in conjunction with grant anticipation notes issued as long as the proceeds from the sale of any such capital outlay notes or bond anticipation notes are not applied to the payment of such grant anticipation notes.

Statutes affected:
Introduced: 9-13-203(3), 9-13-203, 9-13-206, 9-21-701, 9-21-704