Utilization of Tax Proceeds by Municipality; Record Keeping; Use for General Obligation Debt

  1. Law
  2. Georgia Code
  3. Revenue and Taxation
  4. Sales and Use Taxes
  5. Water and Sewer Projects and Costs Tax (Most)
  6. Utilization of Tax Proceeds by Municipality; Record Keeping; Use for General Obligation Debt

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  1. The proceeds received from the tax authorized by this article shall be used by the municipality exclusively for:
    1. Water and sewer projects and costs;
    2. The repayment of general obligation indebtedness incurred in conjunction with the imposition of the tax authorized by this article; or
    3. The repayment of any loans made to such municipality with respect to such water and sewer projects and costs. Such proceeds shall be kept in a separate account from other funds of the municipality and shall not in any manner be commingled with other funds of the municipality prior to expenditure.
  2. The governing authority of the municipality shall maintain a record of each and every water and sewer project and cost for which the proceeds of the tax are used. In each annual audit a schedule shall be included which shows for each ongoing such project the original estimated cost, the current estimated cost if it is not the original estimated cost, amounts expended in prior years, and amounts expended in the current year. The auditor shall verify and test expenditures sufficient to provide assurances that the schedule is fairly presented in relation to the financial statements. The auditor's report on the financial statements shall include an opinion, or disclaimer of opinion, as to whether the schedule is presented fairly in all material respects in relation to the financial statements taken as a whole.
  3. No general obligation debt shall be issued in conjunction with the imposition of the tax unless the municipal governing authority determines that, and if the debt is to be validated it is demonstrated in the validation proceedings that, during each year in which any payment of principal or interest on the debt comes due the municipality will receive from the tax authorized by this article net proceeds sufficient to fully satisfy such liability. General obligation debt issued under this article shall be payable first from the separate account in which are placed the proceeds received by the municipality from the tax authorized by this article. Such debt, however, shall constitute a pledge of the full faith, credit, and taxing power of the municipality; and any liability on said debt which is not satisfied from the proceeds of the tax authorized by this article shall be satisfied from the general funds of the municipality.
  4. The resolution or ordinance calling for imposition of the tax authorized by this article may specify that all of the proceeds of the tax will be used for payment of general obligation debt issued in conjunction with the imposition of the tax. If the resolution or ordinance so provides, then such proceeds shall be used solely for such purpose except as provided in subsection (f) of this Code section.
  5. The resolution or ordinance calling for the imposition of the tax authorized by this article may specify that a part of the proceeds of the tax will be used for payment of general obligation debt issued in conjunction with the imposition of the tax. In such a case no part of the net proceeds from the tax received in any year shall be used for other water and sewer projects until all debt service requirements of the general obligation debt for that year have first been satisfied from the account in which the proceeds of the tax are placed.
      1. If the proceeds of the tax are specified to be used solely for the purpose of payment of general obligation debt issued in conjunction with the imposition of the tax, then any net proceeds of the tax in excess of the amount required for final payment of such debt shall be subject to and applied as provided in paragraph (2) of this subsection.
      2. If the municipality receives from the tax net proceeds in excess of the maximum cost of the project or projects calling for the imposition of the tax or in excess of the actual cost of such project or projects, then such excess proceeds shall be subject to and applied as provided in paragraph (2) of this subsection.
      3. If the tax is terminated under paragraph (1) of subsection (b) of Code Section 48-8-203 by reason of denial of validation of debt, then all net proceeds received by the municipality from the tax shall be excess proceeds subject to paragraph (2) of this subsection.
    2. Excess proceeds subject to this subsection shall be used solely for the purpose of reducing any indebtedness of the municipality other than indebtedness incurred pursuant to this article. If there is no such other indebtedness or, if the excess proceeds exceed the amount of any such other indebtedness, then the excess proceeds shall next be paid into the general fund of the municipality, it being the intent that any funds so paid into the general fund of the municipality be used for the purpose of reducing ad valorem taxes.

(Code 1981, §48-8-212, enacted by Ga. L. 2004, p. 69, § 7.)


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