(a) Authority. The state, through action of the commission, is authorized to incur public debt as provided in this article.

(b) Purposes for debt.

(1) Public debt without a limit may be incurred to repel invasion, suppress insurrection, and defend the state in time of war.

(2) Public debt may be incurred to supply such temporary deficit as may exist in the state treasury in any fiscal year because of necessary delay in collecting the taxes of that year, but the debt so incurred shall not exceed, in the aggregate, 1 percent of the total revenue receipts, less refunds, of the state treasury in the fiscal year immediately preceding the year in which such debt is incurred; and any debt so incurred shall be repaid out of the taxes levied for the fiscal year in which the loan is made. Such debt shall be payable on or before the last day of the fiscal year in which it is incurred, and no such debt may be incurred in any fiscal year under this paragraph if there is then outstanding unpaid debt from any previous fiscal year which was incurred under this paragraph.

(3) Public debt for public purposes may be either general obligation debt or guaranteed revenue debt. General obligation debt may be incurred by issuing obligations to acquire, construct, develop, extend, enlarge, or improve land, waters, property, highways, buildings, structures, equipment, or facilities of the state, its agencies, departments, institutions, and those state authorities which were created and activated prior to the amendment adopted November 8, 1960, to Article VII, Section VI, Paragraph I(a) of the Constitution of 1945. General obligation debt may also be incurred to provide educational facilities for county and independent school systems and to provide public library facilities for county and independent school systems, counties, municipalities, and boards of trustees of public libraries or boards of trustees of public library systems. General obligation debt may also be incurred in order to make loans to counties, municipal corporations, political subdivisions, local authorities, and other local governmental entities for water or sewerage facilities or systems. It shall not be necessary for the state or a state authority to hold title to or otherwise be the owner of such facilities or systems. General obligation debt for these purposes may be authorized and incurred for administration and disbursement by a state authority created and activated before, on, or after November 8, 1960. Guaranteed revenue debt may be incurred by guaranteeing the payment of revenue obligations issued by an instrumentality of the state if such revenue obligations are issued to finance toll bridges, toll roads, or any other land public transportation facilities or systems, or water or sewage treatment facilities or systems, or to make or purchase, or lend or deposit against the security of, loans to citizens of the state for educational purposes; provided, however, that in no event shall general obligation debt or guaranteed revenue debt be incurred for water or sewage treatment facilities or systems for counties or municipalities unless such facilities are financed in whole or in part through an instrumentality of the state created by the General Assembly for the purpose of assisting the state, counties, or municipalities in the financing of water or sewage treatment facilities or systems for the benefit of the citizens of Georgia. General obligation debt or guaranteed revenue debt may be incurred to fund or refund any such debt or to fund or refund any obligations issued upon the security of contracts to which the second paragraph of Article IX, Section VI, Paragraph I(a) of the Constitution of Georgia of 1976 is applicable.

(c) Limitations. No debt may be incurred under paragraph (3) of subsection (b) of this Code section at any time when the highest aggregate annual debt service requirements for the then current year or any subsequent year for outstanding general obligation debt and guaranteed revenue debt, including the proposed debt, and the highest aggregate annual payments for the then current year or any subsequent fiscal year of the state under all contracts then in force to which the provisions of the second paragraph of Article IX, Section VI, Paragraph I(a) of the Constitution of Georgia of 1976 are applicable exceed 10 percent of the total revenue receipts, less refunds of the state treasury in the fiscal year immediately preceding the year in which any such debt is to be incurred. Within such limitation, the following limitations shall also be applicable:

(1) No guaranteed revenue debt may be incurred to finance water or sewage treatment facilities or systems when the highest aggregate annual debt service requirements for the then current year or any subsequent fiscal year of the state for outstanding or proposed guaranteed revenue debt for water or sewage treatment facilities or systems exceed 1 percent of the total revenue receipts, less refunds, of the state treasury in the fiscal year immediately preceding the year in which any such debt is to be incurred;

(2) The aggregate principal amount of guaranteed revenue debt incurred to make loans to citizens of the state for educational purposes that may be outstanding at any time shall not exceed $18 million and the aggregate principal amount of guaranteed revenue debt incurred to make or purchase, or to lend or deposit against the security of, loans to citizens of the state for educational purposes that may be outstanding at any time shall not exceed $72 million; and

(3) The issuance of any funding or refunding debt pursuant to this Code section shall be subject to the 10 percent limitation provided for in this subsection to the same extent as debt incurred under this article; provided, however, that in making such computation the annual debt service requirements and annual contract payments remaining on the debt or obligations being funded or refunded shall not be taken into account.

(d) Annual debt service requirements. For the purposes of subsection (c) of this Code section, annual debt service requirements shall mean the total principal and interest coming due in any fiscal year of the state; provided, however, that with regard to any issue of debt incurred wholly or in part on a term basis, annual debt service requirements shall mean an amount equal to the total principal and interest payments required to retire such issue in full divided by the number of years from its issue date to its maturity date.