Georgia Constitution Practice Exam

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Study for the Georgia Constitution Test. Dive into multiple-choice questions with hints and explanations. Prepare for your exam and gain confidence in understanding the Georgia legislative framework!

Practice this question and more.

Which type of bonds is considered a form of debt not limited by city or county regulations?

General obligation bonds
Revenue bonds
Special bonds
Industrial bonds

The correct answer is: Revenue bonds

Revenue bonds are indeed a form of debt that is not restricted by city or county regulations. These types of bonds are issued to finance specific projects and are backed primarily by the revenue generated from those projects rather than by the full faith and credit of the issuing municipality. For instance, if a city constructs a toll bridge or a new water treatment facility, it can issue revenue bonds that are repaid through the tolls collected or the fees charged for water services. Since the repayment is reliant on the income generated by the specific project rather than the general taxation power of the city or county, they do not fall under regulations that might cap borrowing for broader municipal purposes. This allows municipalities greater flexibility in funding projects that can generate their own revenue streams. As a result, revenue bonds can be an attractive option for local governments looking to finance projects without increasing their overall debt load or being subject to regulatory limitations that might apply to other forms of bonds.