(1) All bonds and notes issued prior to July 1, 1986, and all proceedings theretofore taken to authorize the issuance of bonds or notes by any local government of this state for any purpose which is designated a public works project by this chapter, are hereby ratified, validated and confirmed, and such bonds and notes are hereby declared to be valid and legally binding obligations payable in accordance with their terms, notwithstanding any lack of power of the governing body of the local government to authorize and issue such bonds or notes and to provide for the payment thereof in the manner stated in such bonds or notes and in the proceedings authorizing their issuance, and further notwithstanding any defects or irregularities in any such proceedings, or the failure of any such proceedings, authorizing any such bonds or notes, to comply with any of the provisions of this chapter or with any of the provisions of any other applicable section or chapter or any applicable general or special law or charter.
(2) The disposition of proceeds of all capital outlay notes issued prior to January 15, 1998, for school purposes, by a county or metropolitan government which contains within its boundaries a special school district and/or incorporated town or city maintaining a public school system separate from the county or metropolitan government public school system, is hereby declared to be valid and legally binding unless proceedings which challenge the disposition of such proceeds have been instituted in any court in this state before January 15, 1998.