A State Created a Housing Authority to Provide Financing for Low-Income

A state created a housing authority to provide financing for low-income housing.The authority issues bonds and uses the proceeds for that purpose.Currently the authority has outstanding $200 million in bonds backed by the state's promise to cover debt service shortages should they arise.The state constitution specifically limits the state to no more than $2 million in general obligation debt.How can the state officials defend the $200 million in debt outstanding?

A) The debt is not general obligation debt.
B) The state is only morally obligated for the debt.
C) The debt is the debt of the authority, not the state.
D) All of the above.

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