§529. Grant anticipation notes

            A. A governmental entity may issue a grant anticipation note or notes in anticipation of and upon the security of specified accounts receivable from the state or the federal government, including without limitation, grants, loans, or a combination of both, for which the governing authority of the governmental entity finds and determines that funds have been appropriated and committed to the governmental entity.

            B. Grant or loan funds from the state or federal government for any construction and improvement for which the governmental entity is authorized to expend monies shall be pledged for the payment of the note or notes and the interest thereon. The note or notes and the interest thereon shall be a first lien upon and charge against such grant or loan funds. Any notes issued pursuant to this Section, to the extent not paid from grant or loan funds of the governmental entity pledged for the payment thereof, at the discretion of the governing authority of the governmental entity, may be paid as to principal and interest from any taxes, income, revenue, cash receipts, or other monies of the governmental entity lawfully available therefor and in accordance with the provisions provided therefor in the resolution or ordinance authorizing their issuance.

            C. The proceeds of grant anticipation notes may be used and expended by the governmental entity solely for the purpose for which the grant or loan is to be received or for the retirement of the notes, except that income from the investment of such proceeds may be used to pay costs associated with the facility or improvements being financed from such grant or loan.

            D. No grant anticipation note shall be issued if the grant or loan to be received is for the construction of a facility or work of public improvement unless the grant or loan agreement is in existence at the time of issuance of the grant anticipation note.

            E. Grant anticipation notes issued under this Section shall be payable not later than five years after the date of issue.

            F. No grant anticipation note or notes shall be issued by a governmental entity pursuant to this Section in an amount which, when added to the amount of any other such type note or notes outstanding at the time and issued in anticipation of the same grant or loan, shall exceed ninety-five percent of the grant or loan funds committed and appropriated to the governmental entity by the granting or loaning authorities and payable within a thirty-six month period from the date of issuance of such note or notes then being issued.

            Acts 2018, No. 569, §1, eff. July 1, 2018.