(A) The commission is authorized to purchase and retire any of the bonds, notes or other obligations under its custody and control before the maturity thereof whenever it shall be in possession of sufficient funds applicable to the payment of the bonds, notes or other obligations, in case the bonds, notes or other obligations can be obtained by the commission at a price, or prices, which it deems reasonable. During the currency or previous to the retirement of any bonds, notes or other obligations under its custody and control, the commission may make loans, at the highest rate of interest obtainable, from time to time, of any of the funds in its hands, on the terms and conditions as the commission shall deem advisable but the loans shall in all cases be secured by duly authorized pledges of the taxes of the county, or bonds or other obligations of the state, or of the United States, in sufficient amounts to insure the safety of the loans.
(B) The commission may also, from time to time, with any funds under its custody and control purchase any bond or other valid obligations of the state, or any of its political subdivisions, or of the United States, which the commission shall deem as investment equivalent to that permitted by law for trust funds. Any funds in the custody and control of the commission which are uninvested as hereinabove provided, shall be deposited by the commission in one or more of the banks of the county at the highest possible rate of interest. No loan, investment or deposit, as herein provided, shall be made by the commission except upon the written approval of the chairperson of the commission and at least two members thereof. All disbursements of funds by the commission shall be made upon a voucher duly signed by the chairperson thereof. The Sinking Fund Commission is hereby empowered and directed to make loans to the county, or any of its political subdivisions, excepting however municipalities; these loans shall be made, if necessity shall arise for the same, and the necessity shall be determined by the County Council or the particular political subdivision seeking the loan, and shall be evidenced by a written request filed with the commission, signed by a majority of the members of the County Council, or the political subdivision which seeks the loan, and the written request shall and must have the written approval of a majority of the legislative delegation of the county.
(C) (1) When the necessity is made to appear as above prescribed, and the written request and approval is filed with the Sinking Fund Commission, the county or any of its political subdivisions which may apply for loans as herein prescribed, is hereby empowered to borrow the money and pledge the full faith and credit and taxing power of the county or political subdivision, and shall execute notes payable at the times and in the installments as they may be required by the Sinking Fund Commission, and the notes and other evidences of indebtedness shall be binding upon the county or its political subdivisions and the full faith and credit and taxing powers of the political subdivision shall be pledged to secure the same.
(2) The rate of interest to be charged by the commission for the loans to the county or any political subdivisions shall not be in excess of 3% per annum. In order to repay any loans made hereunder the Sinking Fund Commission shall certify to the auditor and the auditor shall place the levy as is necessary upon the property of the county or political subdivision involved and the treasurer shall collect same as is required by law.
(Acts 1945, No. 135, p. 180, § 4) (‘77 Code, § 8-9)