(a) Notwithstanding any other law to the contrary, whenever the state funding board is authorized to issue and sell bonds of the state, it may by resolution authorize the issuance and sale of all or any portion of such bonds in denominations of less than five thousand dollars ($5,000), to be known as “Tennessee citizens bonds,” hereinafter referred to as “citizens bonds.” Such bonds shall be issued and sold by the state funding board through the state treasurer either at public or private sale, maturing in such amounts and upon such dates, at such interest rate or rates, payable at such time and in such manner, at par or at discount, in bearer or registered form, and upon such other terms and conditions as shall be determined to be in the best interests of the state in accordance with a plan approved by resolution of the funding board. It is the legislative intent that the interest rate set by the funding board on the sale of citizens bonds shall be approximately the same yield to the investor as was available from the most recent sale of general obligation bonds.

(b) Not more than two million dollars ($2,000,000) principal amount of citizens bonds shall be sold by the state treasurer in any one (1) fiscal year. If sold at discount, the discount of such bonds may not exceed thirty percent (30%) of the bond's value at maturity, and the principal amount shall be the discounted value for which the bonds are sold. The face value of citizens bonds sold at discount will be the principal amount and all interest which will be owed on the bond if it is held to full maturity. The maximum rate of interest in no instance shall exceed the legal rate as provided in § 47-14-103. No citizens bond shall mature more than five (5) years after its date of issue. Each citizens bond shall provide that it will be redeemed by the state, upon due presentation by the appropriate person on any business day after its date of sale by the state treasurer, at such price as the state treasurer shall determine according to a schedule established with respect to each issue of citizens bonds prior to the sale thereof.

(c) It is the legislative intent that the aggregate principal amount of citizens bonds sold to an individual purchaser should not exceed five thousand dollars ($5,000) of the primary sale during any fiscal year. Citizens bonds shall be executed in the name of the state by the state treasurer, either manually or by facsimile signature and shall be countersigned by the secretary of state, with the great seal of the state or a facsimile thereof attached thereto. The secretary of state may direct that the secretary of state's signature be placed on citizens bonds by mechanical or electronic device at the time of issuance.