(a) As used in this Code section, the term:

(1) "Annual savings" means the difference between the annual debt service payments on pension obligation bonds and the annual required contribution to fund the unfunded actuarial accrued liability of the pension fund.

(2) "Level debt structure" means the establishment of a bond repayment schedule that requires equal annual debt service payments, including both principal and interest, over the life of the debt issue.

(3) "Pension obligation bond" means a bond issued as a general obligation bond in accordance with the provisions of this chapter, the proceeds of which are deposited with the government's retirement system administrator to liquidate, in whole or in part, the government's unfunded accrued actuarial liability to the government's retirement plan.

(b) No political subdivision shall issue any pension obligation bond unless the state auditor has certified that such bonds comply fully with the provisions of this Code section.

(c) All pension obligation bonds shall:

(1) Be general obligation bonds subject to the provisions of the Constitution of the State of Georgia and this chapter relating to general obligation bonds;

(2) Be included as a component of the total debt of the political subdivision subject to the debt limits provided in Article IX, Section V of the Constitution of the State of Georgia;

(3) Be issued on a competitive basis;

(4) Specify a level debt structure; and

(5) Specify a maturity not longer than 20 years.

(d) An amount not less than 5 percent of the annual savings shall be deposited into a reserve fund as protection against changes that might impact the future financial condition of the pension system.

(e) Neither the political subdivision issuing pension obligation bonds nor any department, agency, authority, retirement system, or pension fund of such political subdivision shall purchase the pension obligation bonds so issued.