(a) A local government investment pool is created, consisting of the aggregate of all funds from local governments and all funds from other bodies created for a public purpose which the State Depository Board has agreed to accept that are placed in the custody of the state for investment and reinvestment as provided in this chapter.

(b)(1) The investment policies for the local government investment pool shall be established by the State Depository Board.

(2) The director of the Office of Treasury and Fiscal Services shall administer the local government investment pool on behalf of the participating local governments.

(3) The director shall develop such procedures consistent with the policies established pursuant to paragraph (1) of this subsection as he deems necessary for the efficient administration of the pool, including, but not limited to:

(A) Specification of minimum amounts which may be deposited in the pool and minimum periods of time for which deposits shall be retained in the pool;

(B) Payment of amounts equivalent to administrative expenses from the earnings of the pool;

(C) Distribution of the earnings in excess of such expenses or allocation of losses to the several participants, in a manner which equitably reflects the differing amount of their respective investments and the differing periods of time for which such amounts were in the custody of the pool; and

(D) Procedures for the deposit and withdrawal of funds.

(c) The director shall invest moneys in the local government investment pool with the degree of judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering first the probable safety of their capital and then the probable income to be derived. Specifically, the types of authorized investments for pool assets shall be limited to those set forth in Code Section 50-5A-7 and Chapter 17 of Title 50.

(d)(1) The governing authority of any local government having funds which are available for investment and which are not required by law or by any covenant or agreement with bondholders or others to be segregated and invested in a different manner may direct its financial officer to remit such funds to the director for investment as part of the local government investment pool.

(2) Upon determination by the local governing authority that it is in the best interest of the local government to deposit funds in the investment pool, it shall adopt and file with the director a certified copy of a resolution or ordinance authorizing investment of its funds in the investment pool. The resolution or ordinance shall name the local government official or officials responsible for the deposit and withdrawal of such funds. (3) The resolution or ordinance filed with the director shall be accompanied by a statement as to the approximate cash flow requirements of the local government for the invested funds. Subsequent deposits into the investment pool shall be accompanied by a statement as to the intended duration of the investment or the anticipated date of withdrawal of the funds from the pool.

(e) A separate account designated by name or number for each participant in the fund shall be kept to record individual transactions and totals of all investments belonging to each participant. A monthly report showing the changes in investments made during the preceding month shall be furnished to each participant having a beneficial interest in the investment pool. Details of any investment transaction shall be furnished to any participant upon request.

(f) The principal and credited income of each account maintained for a participant in the investment pool shall be subject to payment from the pool at any time upon request, subject to the procedures developed in accordance with paragraph (3) of subsection (b) of this Code section. Accumulated income shall be credited to each participant account at least monthly.

(g) Except as provided in this Code section, all instruments of title of all investments of the investment pool shall remain in the custody of the director of the Office of Treasury and Fiscal Services. The director may deposit with one or more fiscal agents or banks those instruments of title which he considers advisable, to be held in safekeeping by the agents or banks for collection of the principal and interest or other income or of the proceeds of sale. The director shall collect the principal and interest or other income from investments of the investment pool the instruments of title to which are in his custody, when due and payable.

(h) In the event of default in the payment of the principal or interest or other income of any investment of the investment pool, the director may:

(1) Institute the proper proceedings to collect the matured principal or interest or other income;

(2) Accept for exchange purposes refunding bonds or other evidences of indebtedness, at interest rates to be agreed upon by the director and the obligor;

(3) Make compromises, adjustments, or disposition of the matured principal or interest or other income, as the director considers advisable for the purpose of protecting the moneys invested; or

(4) Make compromises or adjustments as to future payments of principal or interest or other income, as the director considers advisable for the purpose of protecting the moneys invested.

(i) No payment may be issued upon any account in an amount greater than the sum total of the particular account to which it applies. If such payment is issued, the director shall be personally liable under his official bond for the entire overdraft resulting from the payment if made.

(j) Subject to the objectives and requirements of this Code section, the director shall formulate procedures for the investment and reinvestment of funds in the investment pool and the acquisition, retention, management, and disposition of investments of the investment pool.

(k) Funds in the local government investment pool may be consolidated with state funds under the control of the director for investment purposes, if accurate and detailed accounting records are maintained for the funds of each participating local government and a proportionate amount of interest earned is credited to the local government investment pool and the accounts therein.

(l) Payments of amounts for administrative expenses shall be deemed contractually obligated funds held in trust for the benefit of the local government investment pool and shall not lapse.