Title 9 Public Finances
Chapter 1 General Provisions § 9-1-101. Fiscal year for state and county government. - (a) The fiscal year of state government shall hereafter commence on July 1 of each year and end on the following June 30. This fiscal year shall be followed in making appropriations and in financial reporting, and shall be uniformly adopted by all departments, institutions, offices and agencies of state government.
- (b) Unless otherwise allowed by the comptroller of the treasury upon grounds of special hardships, the fiscal year of the counties of the state shall begin on July 1 of each year and shall end on the following June 30. The fiscal year shall constitute the budget year and the year for accounting and reporting of each and every fund, office, department, institution, activity and agency of the county government, but the aforementioned provision shall be in addition to, and not in lieu of, any accounting and reporting now required of any official by general law.
History (4)
- Acts 1937, ch. 33, § 27
- C. Supp. 1950, § 255.27
- Acts 1957, ch. 311, § 1
- T.C.A. (orig. ed.), § 9-101.
§ 9-1-102. Borrowing by state employees and officials restricted. - State employees and officials are prohibited from borrowing money upon the faith and credit of the state for any purpose whatever, except as otherwise provided by law.
History (5)
- Acts 1877, ch. 56, § 1
- Shan., § 241a1
- Code 1932, § 184
- T.C.A. (orig. ed.), § 9-102
- Acts 1985, ch. 118, § 2.
§ 9-1-103. Protection of appropriations of state and departmental revenues and state funds and institutional and program revenues by the state's sovereign immunity. - (a) Except to the extent that sovereign immunity is expressly waived by the general assembly, all appropriations of state revenues and departmental revenues previously and hereafter made to the state, its departments, agencies, boards, educational institutions, instrumentalities, and incorporated entities performing the state's governmental functions shall be state funds and shall be protected by the state's sovereign immunity from every court's judgment, decree, attachment, or other legal process; provided, however, that any law authorizing an agency, board, or entity to sue or be sued shall not constitute a waiver of sovereign immunity.
- (b) Except to the extent that sovereign immunity is expressly waived by the general assembly, all appropriations of state funds and institutional and program revenues previously and hereafter made to institutions and programs of higher education shall be state funds and shall be protected by the state's sovereign immunity from any court's judgment, decree, attachment, or other legal process; provided, however, that any law authorizing an institution or program of higher education to sue or be sued shall not constitute a waiver of sovereign immunity.
History (2)
- Acts 2013, ch. 454, § 31
- 2014, ch. 917, §§ 1, 2.
§ 9-1-104. Right of prepayment to appear on instrument. - Whenever the right to pay, prior to maturity, bonds, notes or other obligations of the state of Tennessee, or political subdivisions thereof, exists, the fact of such right of prepayment shall appear on the face of the instrument, or on the reverse side thereof, in a prominent place.
History (3)
- Acts 1947, ch. 67, § 1
- mod. C. Supp. 1950, § 1811.7 (Williams, § 1811.31)
- T.C.A. (orig. ed.), § 9-104.
§ 9-1-105. State-shared revenue to counties and municipalities — Effective date for distribution purposes. - For the purpose of distributing state-shared revenue to counties and municipalities based upon the population as disclosed by the last federal decennial census, the effective date of such federal decennial census for counties shall be the first day of the month next following the date on which the federal bureau of the census releases the final population figures for all Tennessee counties, and the effective date for municipalities shall be the first day of the month next following the date on which the federal bureau of the census releases the final population figures for all Tennessee municipalities.
History (2)
- Acts 1955, ch. 60, § 1
- T.C.A., § 9-105.
§ 9-1-106. Negotiability of public bonds. - The negotiability of all bonds issued by this state, any county, municipal corporation or other subdivision or public agency thereof shall be governed by the Uniform Commercial Code — Investment Securities, compiled in title 47, chapter 8, any other statute to the contrary notwithstanding.
History (2)
- Acts 1963, ch. 152, § 1
- T.C.A., § 9-106.
§ 9-1-107. Investments or deposits in federal savings banks or pooled investment fund — Deposits exceeding insurance limits. - (a)
- (1) Counties, municipalities, districts, and other public or quasi-public corporations and public officials, boards, agencies, or other public or quasi-public entities, other than the state, are expressly authorized and empowered to invest or deposit funds held by them, including sinking funds and pension and retirement funds in accounts of federal savings banks, whose deposits are insured by the federal deposit insurance corporation.
- (2)
- (A) Deposits in excess of the limits of insurance on such accounts are authorized where the collateral given is eligible collateral, as defined in § 9-4-103, or where the collateral given is an irrevocable letter of credit issued by a federal savings bank.
- (B) If the security is released, or if the value of the security is impaired, the bank shall promptly substitute collateral meeting the requirements of this section sufficient to cover the deposits to be secured.
- (C) Deposits in excess of the limits of insurance are, as to each bank, limited to no more than five percent (5%) of the assets of such bank with respect to each depositor, and are limited to no more than ten percent (10%) of the assets of such association with respect to all depositors.
- (b) Counties, municipalities, districts and other public or quasi-public entities are authorized to deposit or invest funds in the local government investment pool under chapter 4, part 7 of this title. The governing body of such local government may delegate revocable investment authority to the financial officer charged with custody of the funds of the local government, who shall thereafter assume full responsibility for transactions with the local government investment pool.
History (8)
- Acts 1969, ch. 181, § 1
- 1977, ch. 205, § 1
- 1979, ch. 111, §§ 1, 2
- impl. am. Acts 1978, ch. 708, § 5.26
- T.C.A., § 9-107
- Acts 1984, ch. 627, § 1
- 1985, ch. 118, § 4
- 2023, ch. 83, § 1.
§ 9-1-108. Collection of funds on behalf of the state or local government — Acceptance of checks or money orders — Acceptance of credit or debit cards. - (a) It is lawful for any municipal, county or state officer to receive, in payment of any public taxes, licenses, fines, fees or other moneys collected, checks or money orders made payable to the appropriate municipal official, county officer or to the “State of Tennessee.” If a check or money order so received is not duly paid, the person by whom such check or money order has been tendered shall remain liable for the payment of the tax, license, fee or other obligation, and for all legal penalties and/or interest, to the same extent as if such check or money order had not been tendered.
- (b) It is lawful for any public official who collects funds on behalf of the state or any local government to receive checks in such public official's official capacity made payable either to the individual public office or to the individual person's name who holds such public office; provided, that it is unlawful for any such public official to instruct the public to make such checks payable to the individual person's name who holds such public office on any notice sent to the public to collect such funds. This subsection (b) applies only to any county with a metropolitan form of government and is controlling if in conflict with any county or local ordinance to the contrary.
- (c)
- (1) It is lawful for any municipal or county entity or officer to receive payment by credit card or debit card for any public taxes, licenses, fines, fees or other moneys collected by such municipal or county entity or officer.
- (2) As used in this subsection (c), unless the context otherwise requires:
- (A) “Credit card” has the same meaning as defined in § 47-22-101;
- (B) “Debit card” has the same meaning as defined in § 39-14-102; and
- (C) “Municipal or county entity” includes, but is not limited to, a municipality, county, metropolitan government, utility district, board, commission or authority created or authorized by general or local law.
- (3) Any municipal or county entity or officer collecting payment by credit card or debit card pursuant to this subsection (c) shall set and collect a processing fee in an amount that is equal to the amount paid the third party processor for processing the payment. Such processing fee may be waived by approval of the governing body.
- (4) If a payment by credit card is not honored by the credit card company issuing the card, or if a payment by a debit card is not honored by the entity on which the funds are drawn, the municipal or county governmental entity or officer may collect a service charge from the person who owes the municipal or county tax, fee, fine, penalty, interest or other charge, for processing the transaction. The amount of the service charge shall be the same amount as the fee charged for the collection of a check drawn on an account with insufficient funds; provided, that this service charge shall not apply nor be collected if an electronic device is used to conduct the transaction, the card and card holder are present, and the officer learns of the declination of the credit card or debit card at the time the transaction is processed.
- (5) The municipal or county entity or officer collecting funds through payment by a credit card or debit card shall state on any notice to the person owing the tax, fine, fee or other money either the percentage of the processing fee for use of a credit card or debit card or the actual fee imposed for the use of a credit card or debit card.
History (7)
- Acts 1969, ch. 303, § 1
- T.C.A., § 9-108
- Acts 1989, ch. 480, § 1
- 1992, ch. 962, § 1
- 2000, ch. 706, § 1
- 2001, ch. 348, §§ 1-3
- 2016, ch. 621, § 1.
§ 9-1-109. Penalties for nonpayment of checks or money orders. - If any check or money order so received is not duly paid, in addition to other penalties provided by law, there shall be paid as a penalty by the person who tendered such check or money order, upon written notice and demand by the state, county or municipal officer to whom such check was tendered, an amount equal to one percent (1%) of the amount of such check or money order, except that if the amount of the check or money order is less than two thousand dollars ($2,000), the penalty under this section shall be twenty dollars ($20.00) or the amount of the check, whichever is lesser.
History (3)
- Acts 1969, ch. 303, § 2
- T.C.A., § 9-109
- Acts 1992, ch. 962, § 2.
§ 9-1-111. Report on federal receipts by designated state agencies. [Repealed effective July 1, 2024.] - (a) For purposes of this section:
- (1) “Designated state agency” means:
- (A) Department of agriculture;
- (B) Department of financial institutions;
- (C) Department of environment and conservation;
- (D) Department of correction;
- (E) Department of economic and community development;
- (F) Department of education;
- (G) Board of trustees of the University of Tennessee;
- (H) Board of regents of the state university and community college system;
- (I) Local governing boards of trustees of state universities;
- (J) Department of general services;
- (K) Department of human services;
- (L) Department of commerce and insurance;
- (M) Department of labor and workforce development;
- (N) Department of mental health and substance abuse services;
- (O) Department of human resources;
- (P) Department of health;
- (Q) Department of revenue;
- (R) Department of safety;
- (S) Department of tourist development;
- (T) Department of transportation;
- (U) Department of the treasury;
- (V) Department of veterans services;
- (W) The military department; and
- (X) Bureau of TennCare;
- (2) “Federal receipts” means the federal financial assistance, as defined in 31 U.S.C. § 7501, that is reported as part of a single audit; and
- (3) “Single audit” has the same meaning as defined in 31 U.S.C. § 7501.
- (b) Subject to subsections (c) and (d), a designated state agency shall for each year designated in subsection (g), on or before October 31, prepare a report that:
- (1) Reports the aggregate value of federal receipts the designated state agency received for the preceding fiscal year;
- (2) Reports the aggregate amount of federal funds appropriated by the general assembly to the designated state agency for the preceding fiscal year;
- (3) Calculates the percentage of the designated state agency's total budget for the preceding fiscal year that constitutes federal receipts that the designated state agency received for that fiscal year; and
- (4) Develops plans for operating the designated state agency if there is a reduction of:
- (A) Five percent (5%) in the federal receipts that the designated state agency receives;
- (B) Twenty-five percent (25%) in the federal receipts that the designated state agency receives; and
- (C) One hundred percent (100%) in the federal receipts that the designated state agency receives.
- (c) The report required by subsection (b) that the department of education prepares must include the information required by subdivisions (b)(1)-(3) for each school district, including special school districts, and each charter school within the public education system.
- (d) Each designated state agency that prepares a report in accordance with subsection (b) shall submit the report to the department of finance and administration on or before November 1 of each year designated by subsection (g).
- (e)
- (1) The department of finance and administration shall, on or before November 30 of each year designated by subsection (g), prepare a report that:
- (A) Compiles and summarizes the reports the department of finance and administration receives in accordance with subsection (d); and
- (B) Compares the aggregate value of federal receipts each designated state agency received for the previous fiscal year to the aggregate amount of federal funds appropriated by the general assembly to that designated state agency for that fiscal year.
- (2) The department of finance and administration shall, as part of the report required by subdivision (e)(1), compile a list of designated state agencies that do not submit a report as required by this section.
- (f) The department of finance and administration shall submit the report required by subsection (e) to the chairs of the finance, ways and means committees of the house of representatives and the senate on or before January 15 of each year following the year designated by subsection (g).
- (g) Reports required by this section must be prepared in 2019, 2021, and 2023.
- (h) This section is repealed on July 1, 2024.
History (2)
- Acts 2019, ch. 480, § 1
- 2020, ch. 626, § 1.
§ 9-1-116. Programs and services limited to extent funds available. - (a) Notwithstanding any other law to the contrary, availability of programs and services to people in this state shall be limited to the extent that funds are appropriated by the general assembly or the appropriate governing body of a political subdivision.
- (b) No person shall be entitled to have made available to such person, or otherwise be entitled to, any program or any services provided by or through the state, its departments, agencies or political subdivisions unless funds remain available for such program or service from moneys appropriated for that purpose by the general assembly or the appropriate governing body of a political subdivision.
§ 9-1-117. Receipt or collection of personal checks by state, municipal or county officials. - An official or employee within state, county, or municipal government or any agency thereof, who is required or authorized to receive or collect personal checks or similar sight orders on behalf of such government, agency or office, shall not require or encourage the drawer of any such check or order to give or include as payee any personal name as opposed to the name of the state, county, or municipal government or the agency or office or the official's name and title. Such official or employee shall not require or encourage any such drawer to give or include as payee the name of any official, employee, or other person in such person's personal capacity. This section shall not be construed or implemented to prohibit use of notification forms which were printed prior to May 8, 1996.
§ 9-1-118. Depositing, investing or placing for deposit funds held by state and government entities. - (a) In addition to other investments authorized by law, and notwithstanding any other law, the state and other government entities, including counties, municipalities, districts, and other public or quasi-public corporations and public officials, boards, agencies, or other public or quasi-public entities, are expressly authorized and empowered to deposit, invest or place for deposit funds held by them, including sinking funds and pension and retirement funds, in accordance with the following conditions:
- (1) The funds are initially deposited, invested, or placed for deposit through a bank or savings and loan association with a branch in Tennessee authorized to accept deposits that is selected by the government entity;
- (2) To prevent deposits from exceeding the insurance coverage provided by the federal deposit insurance corporation (FDIC), the government entity making the deposit shall provide the selected depository with written notification of the names of all banks and savings and loan associations that are holding funds, other than funds deposited or placed in accordance with this section on behalf of the governmental entity, and on behalf of any department, agency, or other instrumentality having the same federal employer identification number (FEIN) as the governmental entity;
- (3) The selected depository arranges for the deposit of the moneys, in one (1) or more federally insured banks or savings and loan associations, wherever located, for the account of the government entity; provided, that the selected depository shall not arrange for the deposit of the moneys with any bank or savings and loan association listed in the notification provided by the government entity, pursuant to subdivision (a)(2);
- (4) The full amount of principal and any accrued interest of each such deposit is insured by the FDIC;
- (5) The selected depository is authorized to and acts as custodian for the government entity with respect to such deposit issued for its account, or if uncertified deposits, books and records evidencing the deposit; and
- (6) At the same time that the government entity funds are deposited, the selected depository receives an amount of federally insured deposits from customers of other financial institutions, wherever located, equal to or greater than the amount of the funds initially invested by the government entity through the selected depository.
- (b) To the extent insured by applicable federal deposit insurance, funds invested, deposited or placed for deposit in accordance with the conditions prescribed in this section shall not be subject to any additional security or collateral that may be applicable to the deposit or investment of public funds.
- (c) Any funds invested, deposited or placed for deposit that are not covered by federal deposit insurance shall be collateralized in the same manner as state deposits, as provided in chapter 4 of this title, or in the collateral pool as provided in chapter 4, part 5 of this title.
- (d) The selected depository shall not utilize any organization to perform or otherwise provide the services under this section, unless the state treasurer has approved the organization's request to perform such services. Such approval by the state treasurer shall be submitted to the commissioners of financial institutions and finance and administration for their concurrence.
- (e) This investment is subject to the approval of the state funding board for investments made by the state treasurer. This investment is subject to the approval of the respective boards of the University of Tennessee and the board of regents for their systems. For political subdivision officials responsible for investing funds of local governments, this investment is subject to the approval of the appropriate committee, that being the investment committee or the finance committee.
- (f) Each authorizing body shall establish policies and procedures for the investments as approved by this section. Such policies and procedures shall include the establishment of appropriate controls to ensure that full FDIC insurance coverage is obtained. Controls may include, but not be limited to, using a single official FEIN or taxpayer identification number (TIN) for deposits made by a public unit as determined by the FDIC.
History (2)
- Acts 2005, ch. 432, § 1
- 2012, ch. 544, §§ 1-4.
§ 9-1-119. Computer software as equipment for financing purposes. - Whenever the right to issue debt, whether bonds, notes or other obligations, exists for the state of Tennessee, any corporate governmental agency or instrumentality of the state of Tennessee, any county, city, municipal corporation, or other subdivision or public agency or entity thereof to finance capital assets, computer software, whether acquired before, at the same time as, or after the hardware needed for utilization of the software, to the extent accounted for as a capital asset, shall constitute equipment for financing purposes.
Chapter 2 Accounting for Revenues § 9-2-101. Sources of revenue. - The revenue of the state is derived from taxes on property, incomes, sales of land, the exercise of privileges, litigation, from fines, forfeitures and escheats, from merchants, from peddlers, and from inheritance taxes, jail fees and interest.
History (4)
- Code 1858, § 538
- Shan., § 685
- mod. Code 1932, § 1081
- T.C.A. (orig. ed.), § 9-201.
§ 9-2-102. Uniform accounting system. - (a) It is the duty of the department of audit to prescribe a uniform system of bookkeeping designating the character of books, reports, receipts, and records, and the method of keeping same, in all state, county, and municipal offices, including utility districts, which handle public funds. It is the duty of all officials to adopt and use the system and the character of books, reports, and records designated; provided, that the comptroller of the treasury may approve any existing system. The approval of such systems by the comptroller of the treasury is subject to the concurrence of the commissioner of finance and administration.
- (b) It is the duty of all local governments that are subject to the audit requirements of the comptroller of the treasury and that handle public funds to close their official accounting records and to have those records available for audit no later than two (2) months after the close of their fiscal year.
History (7)
- Acts 1907, ch. 602, § 78
- Shan., § 969a 3
- Code 1932, § 1681
- mod. C. Supp. 1950, § 1681
- Acts 1975, ch. 173, § 1
- T.C.A. (orig. ed.), § 9-202
- Acts 2015, ch. 41, § 1.
§ 9-2-103. Receipts required. - Each state, county and municipal official who receives any sum or sums in such official's capacity shall issue to the payer thereof a receipt and shall retain a duplicate thereof in the office of such official; provided, that this provision for official receipts shall not apply to the payment of funds from one department or division of the state government to another such department or division. Any system now in use shall be acceptable if approved by the comptroller of the treasury.
History (4)
- Acts 1947, ch. 224, § 1
- C. Supp. 1950, § 1902.1
- T.C.A. (orig. ed.), § 9-203
- Acts 1995, ch. 70, § 1.
§ 9-2-104. Issuance, preservation and numbering of receipts. - (a) The receipt shall be issued in duplicate and a copy thereof shall be retained by the person so receiving such money and shall be available to the state auditors upon demand.
- (b) The receipts shall be in a well-bound book, or on a form approved by the comptroller of the treasury, and shall be prenumbered consecutively.
History (4)
- Acts 1947, ch. 224, § 1
- C. Supp. 1950, § 1902.1
- Acts 1977, ch. 103, § 1
- T.C.A. (orig. ed.), § 9-204.
§ 9-2-105. Furnishing receipt books. - It is the duty of the chief administrative officer of the municipality to procure such receipt books for municipal officials, it is the duty of the county mayor to procure such receipt books for county officials, and it is the duty of the department head of the state agency to procure the same for state officials. The state or county official issuing receipts hereunder shall preserve such official's copy of such receipt book until the same has been audited as provided by law, after which time such official may make such disposition thereof as deemed advisable, unless otherwise directed by the comptroller of the treasury. The cost of printing the receipt books by the county or municipal officials shall be paid in the same manner now provided for the payment for other office supplies. The cost of receipt books used in state offices shall be paid in the same manner as now provided for the payment for other state office supplies.
History (6)
- Acts 1947, ch. 224, § 2
- C. Supp. 1950, § 1902.2
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- T.C.A. (orig. ed.), § 9-205
- Acts 1995, ch. 70, §§ 2-5
- 2003, ch. 90, § 2.
§ 9-2-106. Penalty for violations. - Any person violating any of the provisions of §§ 9-2-103 — 9-2-105 commits a Class C misdemeanor.
History (4)
- Acts 1947, ch. 224, § 3
- C. Supp. 1950, § 1902.3
- T.C.A. (orig. ed.), § 9-206
- Acts 1989, ch. 591, § 113.
§ 9-2-107. Settlement for school funds. - The commissioner of finance and administration shall settle with the banks, insurance companies, tax collectors, and clerks, and all other corporations, companies, officers and persons, all accounts of moneys due from them, or any of them, which have been appropriated to the use of common schools, and which are by law subject to annual distribution, and shall charge the same, and keep a full account thereof, in books to be kept for the purpose, and shall issue such commissioner's warrant for the payment thereof into the treasury in the same manner as for the payment of the revenue of the state.
History (8)
- Code 1858, § 208 (deriv. Acts 1837-1838, ch. 148, § 45)
- Shan., § 258
- Code 1932, § 202
- impl. am. Acts 1937, ch. 33, §§ 24, 29
- C. Supp. 1950, § 202
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- T.C.A. (orig. ed.), § 9-207.
§ 9-2-108. Reports of clerks and judges. - The clerks of all the courts and every judge of the court of general sessions shall make a report, in writing, under oath, to the county mayor, giving the names of each person, in alphabetical order, from whom such clerk or judge has received state, county, or municipal revenue during the quarter next preceding the day on which the report shall be made, and also giving the amount of state, county, and municipal revenue received from each person, when paid, and on what account paid, stating particularly the nature of the privilege, if a privilege, and separating in such clerk or judge's report the state, county, and municipal revenue received by such clerk or judge. Such reports shall be sworn to before some officer authorized to administer oaths, before their presentation to the county mayor. A judge who has not received any revenue shall not be required to make such report.
History (7)
- Acts 1875, ch. 46, §§ 1, 3, 5
- Shan., §§ 1011, 1013, 1016a1
- Code 1932, §§ 1739, 1741, 1745
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-208
- Acts 2003, ch. 90, § 2.
§ 9-2-109. Time of reports — Filing. - (a) The report required by § 9-2-108 shall be made quarterly, on the first Monday in January, April, July and October.
- (b) The county mayor shall note on each report the day the same was by such county mayor received, and shall cause the report to be kept fastened in book form and file the same with the county register.
- (c) The reports shall be public records, open to the inspection of the public, free of charge, whenever such inspection may be demanded.
History (7)
- Acts 1875, ch. 46, § 2
- 1877, ch. 88, § 1
- Shan., § 1012
- Code 1932, § 1740
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- T.C.A. (orig. ed.), § 9-209
- Acts 2003, ch. 90, § 2.
§ 9-2-110. Failure of judge or clerk to report. - (a) If any judge or clerk who has received any revenue fails to make such report in the time prescribed, such judge or clerk shall be subject to presentment; and, upon conviction, a judge shall be fined not less than ten dollars ($10.00) and a clerk not less than fifty dollars ($50.00).
- (b) If the jury by whom the defendant is tried and convicted finds that the failure to make such report was willful or due to gross neglect, such clerk or judge shall be removed from office, as a part of the judgment of the court.
History (5)
- Acts 1875, ch. 46, § 5
- Shan., §§ 1018, 1019
- mod. Code 1932, §§ 1747, 1748
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-210.
§ 9-2-111. Perjury by judge or clerk. - If any clerk or judge of the court of general sessions knowingly omits to charge in such clerk's or judge's account any sum of money for which, by law, such clerk or judge is liable to account, and swear to the statement, knowing it to be incorrect, and produce such false account to the county mayor for settlement, such clerk or judge commits perjury.
History (7)
- Code 1858, § 512 (deriv. Acts 1807, ch. 66, § 2)
- Shan., § 1020
- mod. Code 1932, § 1749
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-211
- Acts 2003, ch. 90, § 2.
§ 9-2-112. Examination of reports by grand jury — Penalties for violations. - (a) It is the duty of the grand jury, impaneled next after the filing of the reports by clerks or judges, to examine the same, in order to ascertain their correctness, and if such grand jury shall find any omission in the reports, or any amount erroneously charged, or any error whatever in the reports, and shall be of opinion that such omission, mistake or error was corruptly or fraudulently made, such grand jury shall present the officer who made the report.
- (b) Upon conviction, the officer and such officer's sureties shall be bound to pay whatever fine and costs may be adjudged against the officer.
- (c) If the traverse jury should find the omission or other error to have been willfully made, then the court, in addition to the fine and costs, shall also remove the officer from office.
- (d) The grand jury has the power to send for persons and papers to facilitate its investigations into the correctness of the reports.
History (5)
- Acts 1875, ch. 46, § 4
- Shan., § 1021
- Code 1932, § 1750
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-212.
§ 9-2-113. Payment by judge. - The judges shall, within ten (10) days after the time required for making such report, pay into the hands of the county trustee the amount of county revenue by them last reported, and into the hands of the county clerk the amount of state revenue by them last reported, and to the treasurer or other proper financial officer of the municipality the amount of municipal revenue in their hands.
History (5)
- Acts 1875, ch. 46, § 5
- Shan., § 1014
- Code 1932, § 1742
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-213.
§ 9-2-114. Payment by clerks. - The clerks of all courts shall, within twenty (20) days after the time required for making such report, pay over to the county trustee the amount of the county revenue then in their hands, and to the state treasurer the amount of state revenue then in their hands, and to the state treasurer or other proper financial officer of the municipality the amount of municipal revenue in their hands.
History (4)
- Acts 1875, ch. 46, § 5
- Shan., § 1015
- mod. Code 1932, § 1743
- T.C.A. (orig. ed.), § 9-214.
§ 9-2-115. Failure of clerk or judge to pay over. - Any judge or clerk failing to make the payments as required of them, respectively, by §§ 9-2-113 and 9-2-114, shall be proceeded against by the officer to whom the payment should have been made, by motion on such judge's or clerk's official bond.
History (5)
- Acts 1875, ch. 46, § 5
- Shan., § 1016
- mod. Code 1932, § 1744
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-215.
§ 9-2-116. Failure of clerk or judge to produce proper receipt. - If any clerk fails to produce the trustee's receipt, when called on by the judge of the court of general sessions or the county mayor, or fails to produce the receipts of the commissioner of revenue and of the state treasurer, when called on by the county mayor, or by the district attorney general or attorney general and reporter; or if the receipt produced shows, from its date or otherwise, that the clerk has not complied with the requirements of the law, the court shall dismiss such clerk from office and appoint another in such clerk's stead, to hold the office until such clerk's successor is elected.
History (10)
- Code 1858, §§ 511, 714 (deriv. Acts 1841-1842, ch. 147, § 2)
- Shan., § 1022
- Code 1932, § 1751
- impl. am. Acts 1937, ch. 33, §§ 50, 51
- impl. am. Acts 1959, ch. 9, § 14
- modified
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-216
- Acts 2003, ch. 90, § 2.
§ 9-2-117. Judgment for trustee against clerk or judge. - If any clerk or judge fails or refuses to pay to the county trustee any county money collected by such clerk or judge, the county trustee may proceed, by motion in the circuit court of the county, and the court shall give judgment against such clerk or judge and the sureties of such clerk or judge for the penalty of the bond, and award execution.
History (5)
- Code 1858, § 513 (deriv. Acts 1839-1840, ch. 85, § 1)
- Shan., § 1023
- mod. Code 1932, § 1752
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-217.
§ 9-2-118. Satisfaction of judgment. - The clerk or judge may discharge such judgment by producing to the trustee the warrant of the county mayor, to pay the amount found by the trustee due to the county on settlement of the account of such clerk or judge, and paying the amount to the trustee, who shall receive the same in discharge of the judgment, leaving such clerk or judge and the sureties of such clerk or judge liable for the costs of the suit.
History (7)
- Code 1858, § 514 (deriv. Acts 1839-1840, ch. 85, § 1)
- Shan., § 1024
- mod. Code 1932, § 1753
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-218
- Acts 2003, ch. 90, § 2.
§ 9-2-119. Commissions lost by default. - On settlement, the defaulting clerk or judge is not allowed a credit for any commissions on the money in regard to which such clerk or judge made the default.
History (5)
- Code 1858, § 515 (deriv. Acts 1839-1840, ch. 85, § 1)
- Shan., § 1025
- mod. Code 1932, § 1754
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-219.
§ 9-2-121. Failure to pay on warrant. - If such clerk or judge, after settlement and obtaining a warrant to pay into the county treasury the amount found due from such clerk or judge to the county, fails to pay it, the trustee shall, in like manner, cause judgment to be taken against such clerk or judge and the sureties of such clerk or judge for the amount found due the county by the account, with interest thereon from the time the money should have been paid, with twelve and one-half percent (12.5%) damages, and costs.
History (5)
- Code 1858, § 516 (deriv. Acts 1839-1840, ch. 85, § 2)
- Shan., § 1027
- Code 1932, § 1756
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), § 9-221.
§ 9-2-122. Clerk's records furnished to county mayor. - The county clerk shall, on demand, furnish to the county mayor:
- (1) A list of the amount of taxes put into the hands of the collector, and due and owing to the county for any year;
- (2) A statement, with sufficient vouchers, showing the amount of moneys paid by the clerk to the trustee, as required by law, for fines and forfeitures;
- (3) The amount of all appropriations made for the year by the county legislative body; and
- (4) All necessary documents and vouchers, showing any receipt or disbursement of the county moneys.
History (6)
- Code 1858, § 517
- Shan., § 1028
- Code 1932, § 1757
- impl. am. Acts 1978, ch. 934, §§ 7, 16, 22, 36
- T.C.A. (orig. ed.), § 9-222
- Acts 2003, ch. 90, § 2.
§ 9-2-124. Judgment against sheriff. - If it is made satisfactorily to appear to the court that the execution was placed in the hands of the sheriff, against whom the motion is made, and that such sheriff has failed to return the same, the court shall render judgment against the sheriff and the sureties of such sheriff for the amount due the state, or county, or common school fund, or other persons, for costs and the costs of the motion.
History (4)
- Code 1858, § 717 (deriv. Acts 1833, ch. 43, § 1)
- Shan., § 1030
- Code 1932, § 1759
- T.C.A. (orig. ed.), § 9-224.
§ 9-2-125. Notice of motion against sheriff. - No notice of this motion is required when it is made at the first term after the execution has been placed in the sheriff's hands; but if the motion is made at a subsequent term, it shall be entered upon the minutes, and docketed as a suit, and proceeded with on the second or subsequent day of the next succeeding term, as if notice had been given.
History (4)
- Code 1858, § 718 (deriv. Acts 1833, ch. 43, § 2)
- Shan., § 1031
- Code 1932, § 1760
- T.C.A. (orig. ed.), § 9-225.
§ 9-2-127. Payments by county officials into treasury or state depository. - Every county official collecting or receiving public money from any source whatsoever belonging to or for the use of the state shall comply with § 9-4-301.
History (7)
- Acts 1937, ch. 33, § 28
- 1937, ch. 107, § 1
- C. Supp. 1950, § 255.28
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- T.C.A. (orig. ed.), § 9-227
- Acts 1985, ch. 118, § 6.
§ 9-2-128. Prosecution for failure to pay receipts into treasury. - (a) Any of the aforementioned departments, institutions, offices, agencies, officers or employees who fail to pay immediately into the state treasury any money belonging to the state as directed in § 9-2-127 are subject to punishment for theft.
- (b) The venue of any such prosecution is the county in which such departments, institutions, offices, agencies, officers or employees serve in their official capacity.
History (4)
- Acts 1943, ch. 142, § 1
- C. Supp. 1950, § 255.28
- T.C.A. (orig. ed.), § 9-228
- Acts 1989, ch. 591, § 21.
§ 9-2-137. Counties not having approved central accounting system — Quarterly report of accounts payable and obligations. - Each county office, department, board, commission or agency charged with the duty of disbursing county funds in counties which do not have a central accounting system approved by the comptroller of the treasury shall file quarterly with the county fiscal agent a sworn itemized report listing by fund accounts all accounts payable and other obligations, including notes payable. Such report shall be made and sworn to by the principal officer, chair or employee in charge of the department, office, board, commission or agency. A copy of the report shall be filed with the county clerk.
History (3)
- Acts 1957, ch. 355, § 1
- impl. am. Acts 1978, ch. 934, §§ 22, 36
- T.C.A., § 9-237.
§ 9-2-138. Reconciliation of county fund accounts with trustee's records — Monthly and quarterly reports. - (a) The administrative officers and employees shall reconcile their respective fund accounts with the records of the county trustee, and shall make a report at the end of each month showing the condition of the respective fund accounts. As to each fund, the report shall include the balance at the beginning of the month, receipts and expenditures for the month, and the balance at the end of the month. The monthly reports shall also include a reconciliation of the trustee's balances with the balances of the department, office, board, commission or agency. The reports shall be retained in the permanent files of the department, office, board, commission or agency.
- (b) At the end of each quarter, the officers charged herein with making monthly reports shall prepare a quarterly report summarizing the monthly reports of that quarter, and a copy of the same shall be filed with the county fiscal agent.
History (2)
- Acts 1957, ch. 355, § 2
- T.C.A., § 9-238.
Chapter 3 Local Governments Part 1 Funding of Local Debt § 9-3-101. Serial bonds authorized. - A municipal or public corporation organized under the laws of the state of Tennessee, including, but not limited to, counties, municipalities, metropolitan governments, utility districts, and industrial development boards or corporations, may, by resolution duly adopted by its governing body, authorize the issuance, in lieu of serial bonds, of fully registered bonds, without coupons, payable in installments corresponding to the maturities of such serial bonds. Such resolution shall provide that at the request of the holder of an installment bond such municipality or public corporation shall have prepared, executed and delivered to the holder, in exchange for such installment bond, serial bonds in an aggregate principal amount equal to the principal amount of such installment bond then unpaid, having maturities corresponding to the maturities of the installments of principal of such installment bond then unpaid, and bearing interest at the same rate or rates as provided in such installment bond. Upon any such exchange, such installment bond shall be cancelled. The reasonable expenses in connection with such exchange shall, at the option of the municipal or public corporation, be paid by the holder or the issuer. Until so exchanged, such installment bonds shall in all respects be entitled to the same benefits as the serial bonds to be issued.
§ 9-3-102. Facsimile signatures and seals on public securities. - (a) As used in this chapter, unless the context clearly otherwise requires:
- (1) “Facsimile” means a reproduction by engraving, imprinting, stamping, lithographing or other means;
- (2) “Municipality” means any county, incorporated city or town, school district, utility district, improvement district, taxing district, housing authority, industrial development board, health and educational facilities board, or other district, authority, commission, board, public body or political subdivision in this state; and
- (3) “Public security” means any bond, note, warrant, certificate of indebtedness or other obligation for the payment of money authorized to be issued by a municipality.
- (b) Notwithstanding any other law:
- (1) Any public security required to be executed by the officers of a municipality may be executed with the facsimile rather than the manual signatures of such officers if so provided in the proceedings authorizing the issuance of such public security; provided, that at least one (1) such signature on each public security shall be manually subscribed or, in the alternative, in the case of any public security being authenticated by a corporate trustee pursuant to the terms of an indenture of trust or other trust instrument, only the signature of the authenticating agent of such trustee need be manually subscribed on such public security, if so provided in such proceedings; and
- (2) A facsimile of the official seal of a municipality may be placed on any public security in lieu of the manual impress of such seal, if so provided in the proceedings authorizing the issuance of such public security.
- (c) This section is in addition and supplemental to existing law and shall not repeal any other law permitting the use of facsimile signatures or seals on public securities.
History (1)
- Acts 1985, ch. 118, § 10.
§ 9-3-103. Term of loan agreements — Security for loan agreement. - Whenever any county, metropolitan government, incorporated town or city or special district of this state is authorized by law to enter into any loan agreement, indenture or other contract or instrument for the borrowing of money, such loan agreement, indenture or other contract or instrument may be for such term as the parties thereto may agree, but in no event may such term exceed forty (40) years or the term otherwise authorized by law, and may provide for such security as authorized by law for the term of such loan agreement, indenture or other contract or instrument.
History (1)
- Acts 1985, ch. 118, § 11.
Part 2 General Audit Provisions § 9-3-201. Purpose and scope of audit. - (a) An audit shall be made:
- (1) For purpose of ascertaining errors, irregularities, or defaults, if any, in the offices of any county officials handling and disbursing public funds;
- (2) For purpose of checking all cost bills to see that all proper items of cost, both county and state, have been duly charged, taxed and reported by the clerks of the courts in all civil, criminal, and chancery cases; and
- (3) To examine and check the accounts of the county superintendents of public instruction for the purpose of ascertaining that the school funds of the state are being expended according to the laws of the state, and for the maintenance and extension of terms of schools in the counties as provided and contemplated by the laws of the state.
- (b) The auditors shall have the authority and jurisdiction to audit the books and records of any judge of the court of general sessions when directed to do so by the comptroller of the treasury.
History (8)
- Acts 1923, ch. 109, § 1
- Shan. Supp., § 948a10
- Code 1932, § 1654
- Acts 1935, ch. 96, § 1
- mod. C. Supp. 1950, § 1654 (Williams, §§ 1654, 1661.1)
- impl. am. Acts 1979, ch. 68, §§ 2, 3
- T.C.A. (orig. ed.), §§ 9-302, 9-3-101
- Acts 1985, ch. 118, § 8.
§ 9-3-202. Investigation of delinquent taxes. - In making such audit, the auditors shall also investigate and ascertain what inheritance and succession taxes and privilege and ad valorem taxes are delinquent and unpaid in any of the counties, and to ascertain the correct and proper amount of such inheritance and succession taxes and privilege and ad valorem taxes that have not been paid.
History (6)
- Acts 1923, ch. 109, § 2
- Shan. Supp., § 948a11
- Code 1932, § 1655
- mod. C. Supp. 1950, § 1655
- T.C.A. (orig. ed.), §§ 9-303, 9-3-102
- Acts 1985, ch. 118, § 8.
§ 9-3-203. Improperly assessed personal property. - Such auditors shall have the authority to:
- (1) Ascertain any unassessed personal property or personal property assessed on a wrong or improper basis, or where such assessment on personal property was obtained by fraud, deceit, misrepresentation or concealment, but only for the current year for which such audit is made; and
- (2) Report the same to the comptroller of the treasury, whose duty it is to direct the trustee of the county in which such property is located to enter the same on the tax books of such county and the same to be the assessment in such county wherein is such personal property, and to be collected in the same way and manner as other property assessed for taxation.
History (8)
- Acts 1923, ch. 109, § 3
- Shan. Supp., § 948a12
- Code 1932, § 1656
- Acts 1945, ch. 36, § 1
- C. Supp. 1950, § 1656
- Acts 1977, ch. 103, § 3
- T.C.A. (orig. ed.), §§ 9-304, 9-3-103
- Acts 1985, ch. 118, § 8.
§ 9-3-204. Filing of report — Further duties. - Within a reasonable time after the completion of any such audit in any county, one (1) copy of such audit shall be filed with the county trustee of such county and one (1) with the county mayor. These auditors shall undertake and discharge such further duties as the comptroller of the treasury may from time to time require of them.
History (10)
- Acts 1923, ch. 109, § 1
- Shan. Supp., § 948a10
- Code 1932, § 1654
- Acts 1933, ch. 74, § 5
- mod. C. Supp. 1950, § 1654
- Acts 1977, ch. 103, § 4
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- T.C.A. (orig. ed.), §§ 9-305, 9-3-104
- Acts 1985, ch. 118, § 8
- 2003, ch. 90, § 2.
§ 9-3-205. Audit of county highway commissions. - (a) The state and county auditors referred to by this part are required to audit the books and records of county highway commissions whenever they make an audit of other offices in the several counties of this state, but this does not apply to counties which have an auditing department or may hereafter have such department.
- (b) Such report setting forth the result of their audit of the county highway commissions shall be filed with the county mayor within a reasonable time after the same has been completed and is subject to public inspection as other public records.
History (6)
- Acts 1945, ch. 159, § 1
- C. Supp. 1950, § 1661.1 (Williams, § 1661.2)
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- T.C.A. (orig. ed.), §§ 9-306, 9-3-105
- Acts 1985, ch. 118, § 8
- 2003, ch. 90, § 2.
§ 9-3-206. Access to records. - These auditors shall have access to all books, records and accounts, including the official bank accounts of any such officials, for the purpose of making their audits and their reports.
History (5)
- Acts 1923, ch. 109, § 5
- Shan. Supp., § 948a14
- Code 1932, § 1658
- T.C.A. (orig. ed.), §§ 9-307, 9-3-106
- Acts 1985, ch. 118, § 8.
§ 9-3-207. Summons of witnesses — Documents furnished — Bond of auditors. - (a) These auditors shall also have the right to summon and examine witnesses and to administer the oaths to such witnesses in making any investigation of the records and reports of any such county officials; and also for the purpose of ascertaining and determining and reporting the amount of delinquent or unpaid or unassessed privilege and ad valorem taxes and inheritance and succession taxes.
- (b) The comptroller of the treasury and commissioner of revenue shall furnish these auditors with such reports, documents, data, or other information, as will facilitate their investigation.
History (7)
- Acts 1923, ch. 109, § 5
- Shan. Supp., § 948a15
- Code 1932, § 1659
- impl. am. Acts 1959, ch. 9, § 14
- Acts 1977, ch. 103, § 5
- T.C.A. (orig. ed.), §§ 9-308, 9-3-107
- Acts 1985, ch. 118, § 8.
§ 9-3-208. Report and collection of delinquencies. - (a) These auditors are authorized to collect any amounts that their audits may show to be due and owing to the state and county from any such county official; and also to collect any delinquent or unpaid inheritance and succession taxes and privilege and ad valorem taxes that may be due and owing to the county and state, and to report the same to the county mayor for the portion of the same due to the county, and they shall report to the comptroller of the treasury the portion of the same due to the state; provided, that the same can be collected by the auditors without suit.
- (b) But in the event the auditors cannot collect the sums without suit, they shall report the same to the county mayor and to the comptroller of the treasury, and it shall be the duty of the county mayor to have the county attorney of such county, if there be a county attorney elected, and if not, then an attorney of such county mayor's selection residing in the county, to institute suit or suits for the collection of these sums so reported by these auditors within ninety (90) days from the date of receiving such report; provided, that the same has not been barred by the statute of limitation; and provided further, that if it is in the matter of inheritance or succession taxes, that the full time for making payment of same has expired, or, if pending on exception, when disposition is made of such exception. In the event the county mayor fails or refuses to have such suits instituted as herein provided, within ninety (90) days after receiving such report, the comptroller of the treasury may appoint an attorney to institute and prosecute a suit or suits for the benefit of the state and county.
History (9)
- Acts 1923, ch. 109, § 4
- Shan. Supp., § 948a13
- Code 1932, § 1657
- Acts 1945, ch. 36, § 1
- mod. C. Supp. 1950, § 1657
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- T.C.A. (orig. ed.), §§ 9-309, 9-3-108
- Acts 1985, ch. 118, § 8
- 2003, ch. 90, § 2.
§ 9-3-209. Attorney's fees for collection of delinquencies. - (a) When suits are instituted by the county mayor or by the comptroller of the treasury as herein provided, the fee to be allowed and paid the attorney for such attorney's services shall be fixed by the county mayor where the suit is instituted by direction of the county mayor, but the same shall be approved by the comptroller of the treasury; and, where suits are instituted by direction of the comptroller of the treasury upon the failure of the county mayor, such attorney's fees shall be fixed by the comptroller of the treasury, with the approval of the governor.
- (b) No attorney's fees shall accrue against the state or county unless they are collected by the attorney from penalties of delinquents.
History (9)
- Acts 1923, ch. 109, § 7
- Shan. Supp., § 948a17
- Code 1932, § 1661
- Acts 1945, ch. 36, § 1
- C. Supp. 1950, § 1661
- impl. am. Acts 1978, ch. 934, §§ 16, 36
- T.C.A. (orig. ed.), §§ 9-310, 9-3-109
- Acts 1985, ch. 118, § 8
- 2003, ch. 90, § 2.
§ 9-3-210. County contributions to expenses of audit. - (a) For the purpose of contributing to the expenses and compensation of the auditors, each county shall pay into the office of the comptroller of the treasury, on or before June 30 of each year, the same to be paid into the state treasury by the comptroller of the treasury, an amount to be determined on the basis of thirty-six cents (36¢) for each person in the county as shown by the population of the county under the last or any future federal census.
- (b) Beginning July 1, 2017, and using that year as a base, the foregoing thirty-six cents (36¢) shall be annually increased by three percent (3%), with fractional changes rounded to the nearest one cent (1¢). However, the comptroller of the treasury may, at the comptroller's discretion, reduce the amount required to be paid under this section when the work performed justifies the reduction.
History (16)
- Acts 1923, ch. 109, § 6
- Shan. Supp., § 948a16
- Code 1932, § 1660
- Acts 1945, ch. 36, § 1
- C. Supp. 1950, § 1660
- Acts 1953, ch. 59, § 1
- modified
- Acts 1968, ch. 585, § 1
- 1976, ch. 786, § 1
- T.C.A. (orig. ed.), § 9-311
- Acts 1982, ch. 694, § 1
- T.C.A. (orig. ed.), § 9-3-110
- Acts 1985, ch. 118, § 8
- 1989, ch. 494, § 1
- 2008, ch. 762, § 1
- 2016, ch. 1059, § 1.
§ 9-3-211. Annual audit in each political subdivision and special taxing district. - (a) An annual audit of financial records and transactions covering each fiscal year shall be made of each department, office, agency, division or board which is charged with the care and control of public funds, in each political subdivision and special taxing district and which is not now required by law to be audited by the office of the comptroller of the treasury.
- (b) Such audit for each fiscal year shall be made and completed no later than the close of the succeeding year.
- (c) All audits performed by internal audit staffs of any such department, office, agency, division or board shall be conducted in accordance with the standards established by the comptroller of the treasury, pursuant to § 4-3-304(9).
History (5)
- Acts 1961, ch. 233, § 1
- T.C.A., § 9-313
- Acts 1984, ch. 794, § 5
- T.C.A., § 9-3-111
- Acts 1985, ch. 118, § 8.
§ 9-3-212. Duty to order and pay for audits — Audit standards — Rules and regulations. - (a) It is the duty of each political subdivision, special taxing district, board, commission, educational cooperative, intergovernmental cooperative or other governmental agency, including, but not limited to, municipal corporations, utility districts, school boards, and housing authorities created under the Housing Authorities Law, compiled in title 13, chapter 20, part 1, with respect to all funds under its control, to order and pay for such audit and for any other audit which it is required to perform under state law, and to contract with certified public accountants, public accountants, or the department of audit to make such audit.
- (b) The comptroller of the treasury, when the comptroller deems it necessary, may require any audit required of any such agency, or any investigative or review work in addition to such audit which, in the exercise of the comptroller's discretion, the comptroller believes necessary to ascertain or correct errors, irregularities, or defaults in the management and disbursement of funds controlled by such agency, to be conducted by the department of audit; provided, that the comptroller may also charge such agency for additional investigative or review work or additional accounting services which the comptroller may deem necessary.
- (c) Nothing herein shall amend or modify any requirement of a general or private act for an audit by a certified public accountant or public accountant. This section shall apply to political subdivisions, special taxing districts, boards, commissions, educational cooperatives, intergovernmental cooperatives, and any other governmental agency, including, but not limited to, municipal corporations, utility districts, school boards, and housing authorities created under the Housing Authorities Law, compiled in title 13, chapter 20, part 1, which are otherwise subject to financial audit by the state or federal government. In addition to the other requirements of this section, such agency shall furnish a copy of such audit report to the comptroller of the treasury.
- (d) The comptroller of the treasury, through the department of audit, shall be responsible for determining that such audits are prepared in accordance with generally accepted governmental auditing standards and that such audits meet the minimum standards prescribed by the comptroller. The comptroller of the treasury shall prepare a uniform audit manual as is required to assure that the books and records are kept in accordance with generally accepted accounting principles and that the minimum audit standards prescribed by the comptroller are met.
History (6)
- Acts 1961, ch. 233, § 2
- 1977, ch. 103, § 7
- T.C.A., §§ 9-314, 9-3-112
- Acts 1985, ch. 118, § 8
- 1992, ch. 764, § 1
- 2018, ch. 495, § 6.
§ 9-3-214. Determination of whether a utility system is financially distressed — Applicability — Section definitions. - (a) The comptroller of the treasury, in determining whether a utility system is financially distressed, as defined in § 7-82-401(f)(3) and described in § 7-82-703, shall not consider the straight-line depreciation of an asset acquired or completed in the twelve (12) calendar months preceding the audit, so long as the asset's depreciation is calculated in accordance with generally accepted accounting principles.
- (b) This section only applies to the determination of whether a utility system is financially distressed as defined in § 7-82-401(f)(3) and described in § 7-82-703. A utility system's financial statements must still be completed in accordance with generally accepted accounting principles.
- (c) For the purposes of this section, “utility system” has the same meaning as in § 7-82-701.
- (d) This section only applies if it is approved by a simple majority vote of the governing body of a utility system at a meeting of the governing body.
History (1)
- Acts 2024, ch. 1004, § 1.
Part 3 Misappropriation of State-Shared Funds § 9-3-301. Misappropriation of state-shared funds by counties — Withholding of funds — Bond. - (a) In the event that any county official, department, commission or other agency of any county, misappropriates any funds paid to the county from state-shared revenues to the extent that such is in violation of any state law, the comptroller of the treasury, upon determination by a certified audit that such a misappropriation has occurred, shall certify the same to the commissioner of finance and administration.
- (b) Upon such certification, the commissioner shall withhold, or cause to be withheld, from state-shared revenues from all other agencies, commissions, departments, or officials of the county, a sum equal to the ratio of the amount misappropriated during the fiscal year to all the state-shared revenues payable to all agencies or departments of the county during the fiscal year, as applied to the amount of state-shared revenues, the individual agency or department was due from state-shared revenues during the fiscal year.
- (c) Any county official vested by law with the authority to administer state-shared funds shall furnish a good and sufficient bond in the amount of one hundred thousand dollars ($100,000), or in a greater sum as the county legislative body may determine, payable to the state, to indemnify the county against the loss of any funds occurring as a result of such person's unlawful or dishonest acts. The bond must be prepared, executed, filed, and recorded in accordance with title 8, chapter 19.
History (7)
- Acts 1972, ch. 835, § 1
- 1977, ch. 270, § 15
- T.C.A., §§ 9-316, 9-3-201
- Acts 1985, ch. 118, § 8
- 1998, ch. 677, § 13
- 2013, ch. 315, § 20
- 2023, ch. 207, § 14.
§ 9-3-302. Funds may be withheld in year subsequent — Amount equal to amount misappropriated. - The commissioner of finance and administration may withhold such funds as specified in § 9-3-301 from distribution to the county during the fiscal year immediately subsequent to the year the misappropriation took place. Upon such certification, the commissioner may withhold or cause to be withheld, from state-shared revenues distributed to the county, for use by a particular agency or department in which the misappropriation occurred, a sum equal to the amount misappropriated.
History (3)
- Acts 1972, ch. 835, § 2
- T.C.A., §§ 9-317, 9-3-202
- Acts 1985, ch. 118, § 8.
Part 4 Local Government Modernization Act of 2005 § 9-3-401. Short title. - In order to ensure local governments in Tennessee maintain adequate accounting records and comply with generally accepted accounting principles for financial accounting and reporting, there is hereby created the “Local Government Modernization Act of 2005.”
§ 9-3-402. Determination of local governments not in compliance with accounting and financial reporting standards — Development of work plan. - The comptroller of the treasury shall determine those local governments that are in noncompliance with the accounting and financial reporting standards established by the Governmental Accounting Standards Board (GASB). Those governments determined to be in noncompliance with GASB accounting and financial reporting standards shall be required to submit an implementation work plan to the comptroller of the treasury on a date prescribed by the comptroller. The chief executive officer of the local government shall serve as the primary person with authority and responsibility for development and submission of the local government's work plan, which shall include the primary government and all component units of the local government. The work plan shall include due dates and responsible persons or parties for implementation.
History (2)
- Acts 2005, ch. 191, § 1
- 2018, ch. 499, § 1.
§ 9-3-403. Assistance to develop work plan. - If a local government fails to submit a work plan by the date prescribed, the comptroller shall provide assistance to the local government to develop a work plan within sixty (60) days of the date the plan should have been filed. If the local government does not agree to a work plan within this sixty-day period, the comptroller shall provide a work plan that meets the requirements for implementation.
History (2)
- Acts 2005, ch. 191, § 1
- 2018, ch. 499, § 2.
§ 9-3-404. Penalties and restrictions for failure to implement accounting and financial reporting standards. - If a local government fails to implement accounting and financial reporting standards as required by the GASB, as determined by the comptroller, the following penalties or restrictions may be imposed on the noncomplying local government:
- (1)
- (A) The local government shall not be eligible for economic and community development grants funded by the state and administered by the department of economic and community development as mutually agreed upon by the comptroller and the commissioner of economic and community development, and bank excise tax and Hall income tax revenues that are collected and distributed by the state shall be reduced to an amount agreed upon by the comptroller and the commissioner of revenue, but not to exceed five percent (5%) of the total amount due the local government in any fiscal year, until the local government is in compliance with accounting and financial reporting standards required by the GASB;
- (B) If a school district, defined as a county, municipal or special school district or system, fails to comply, the school district shall not be eligible for certain state funded education grants administered by the department of education until the school district complies with accounting and financial reporting standards required by the GASB. The comptroller and the commissioner of education shall mutually agree to the categories of grants subject to this restriction; and
- (C) If a county highway department fails to comply, the comptroller and the commissioner of revenue shall agree on an amount whereby the funds that the county highway fund would otherwise receive from state gasoline tax proceeds as allocated pursuant to § 67-3-901 shall be reduced. After such amount is agreed upon, the department of revenue shall make the reductions from the monthly allocations of gasoline tax proceeds to the county. The amounts so reduced shall be held in reserve by the department of revenue and allocated to the county upon the county becoming compliant as determined by the comptroller;
- (2) The comptroller shall provide the local government with a list of professional accounting firms available to assist in implementation of the work plan. The local government shall provide funds for the cost of this assistance. If the local government fails to provide funds for the cost of this assistance, such cost shall become an outstanding legal obligation of the local government. If the local government fails to pay the cost, the state shall pay the cost and the local government shall be required to reimburse the state; and
- (3) In those county governments that fail to implement accounting and financial reporting standards required by the GASB, the comptroller shall review and evaluate the county's financial management system and make a recommendation to the county's legislative body on how to improve the financial management system to facilitate compliance with accounting and financial reporting standards. The county legislative body shall act upon the recommendation of the comptroller within ninety (90) days of notification.
History (2)
- Acts 2005, ch. 191, § 1
- 2018, ch. 499, §§ 3-5.
§ 9-3-405. Establishment of audit committee — Notice requirements — Open meetings — Confidential, nonpublic executive sessions. - (a) Local governments are encouraged to consider establishing an audit committee. The comptroller may require that an audit committee be established in any local government in this state that:
- (1) Is in noncompliance with the accounting and financial reporting standards required by the GASB; or
- (2) Has recurring findings from the annual audit for three (3) or more consecutive years as determined by the comptroller to be a material weakness in internal control or material noncompliance under government auditing standards.
- (b) The governing body of the local government shall create the audit committee. The audit committee members shall be external to management and may be members of the governing body, citizens from within the boundaries of the local government, or a combination of both. Members of the audit committee shall be selected by the legislative body. The audit committee shall establish responsibilities and duties that are stated in a resolution approved by the legislative body. The responsibilities and duties, at a minimum, shall address financial and other reporting practices, internal control, compliance with laws and regulations, and ethics. The resolution, or any subsequent amendments to the resolution, creating the duties and responsibilities of the audit committee shall be submitted to the comptroller prior to approval by the legislative body. The comptroller shall review the proposed resolution, or any subsequent amendments to the resolution, and report back to the local government on whether the resolution, or subsequent amendments to the resolution, follows recommended guidelines for an audit committee. The resolution, or subsequent amendments to the resolution, adopted by the legislative body must conform to the report issued by the comptroller. Notwithstanding the requirements of this subsection (b), if an audit committee was created by the legislative body of a county whose charter requires charter changes to be approved in a referendum, and if such actions occurred and were approved in a referendum prior to January 1, 2011, then such an audit committee shall be considered created pursuant to this part.
- (c) Except as provided in subsection (d), all meetings of an audit committee created pursuant to this chapter shall abide by the notice requirements adhered to by the local government to which the audit committee is attached.
- (d) All meetings of an audit committee created pursuant to this chapter shall be subject to the open meetings provisions of title 8, chapter 44, except, upon a majority vote of those members in attendance for the public portion of the meeting, the audit committee may hold confidential, nonpublic executive sessions to discuss the following items:
- (1) Items deemed not subject to public inspection under §§ 10-7-503 and 10-7-504, and all other matters designated as confidential or privileged under this code;
- (2) Current or pending litigation and pending legal controversies;
- (3) Pending or ongoing audits or audit related investigations;
- (4) Information protected by federal law; and
- (5) Matters involving information under § 9-3-406 where the informant has requested anonymity.
- (e) The presiding officer shall announce during the public portion of the audit committee meeting that no business, other than that described under subdivisions (d)(1)-(5), shall be considered during the confidential, nonpublic executive session by the audit committee.
- (f) For purposes of providing notice of a confidential, nonpublic executive session, the agenda must disclose the general nature of the item or items to be discussed as described under subdivisions (d)(1)-(5).
- (g) A meeting at which both subject matter open to the public and confidential subject matter will be discussed shall be conducted as follows:
- (1) All business relating to subject matter that is public in nature shall be conducted first; and
- (2) At the conclusion of the meeting relating to subject matter that is public in nature and upon a successful majority vote to enter into executive session, the chair shall announce to the members and the public assembled that the public portion of the meeting is adjourned and that the remainder of the meeting will concern matters that are confidential under subdivisions (d)(1)-(5). When everyone at the meeting who is not authorized to attend the confidential portion of the meeting has departed, the confidential portion of the meeting shall commence.
- (h) Only individuals whose presence is reasonably necessary in order for the audit committee to carry out its executive session responsibilities may attend the portion of the executive session relevant to that person's presence; however, nothing contained in this section shall prohibit the comptroller of the treasury or the comptroller's designee from attending or being present during an executive session.
- (i) This chapter is not intended to prevent the full governing body of the local government from going into confidential, nonpublic executive session with the audit committee at a regularly or specially scheduled meeting of the full governing body for the purpose of further discussing only those matters as described under subdivisions (d)(1)-(5). All portions of meetings of the full governing body of the local government, where matters described under subdivisions (d)(1)-(5) will be discussed, shall be exempt from title 8, chapter 44; provided, that the full governing body of the local government shall abide by the same executive session notice requirements imposed upon the audit committee by this section, and shall not make a decision or deliberate toward a decision on any matter.
History (4)
- Acts 2005, ch. 191, § 1
- 2009, ch. 368, § 1
- 2011, ch. 97, § 1
- 2018, ch. 499, § 6.
§ 9-3-406. Establishment of process for confidential reporting of suspected illegal, improper, wasteful or fraudulent activity — Retaliatory activities prohibited. - (a) An audit committee created pursuant to this chapter shall establish a process by which employees, taxpayers, or other citizens may confidentially report suspected illegal, improper, wasteful, or fraudulent activity. If the information provided causes the chair of the audit committee to believe that illegal, improper, wasteful, or fraudulent activity may have occurred, then the chair of the audit committee shall report the information to the office of the comptroller of the treasury pursuant to title 8, chapter 4, part 5. The detailed information received and generated pursuant to a report of suspected illegal, improper, wasteful, or fraudulent activity, shall be considered audit working papers and is therefore not an open record pursuant to title 10, chapter 7.
- (b) Section 50-1-304 shall apply to all local government employees. In addition, no local government employees shall suffer any of the prohibited retaliatory actions specified in § 50-1-304 for reporting or cooperating with the audit committee, internal auditors, or auditors from, or approved by, the comptroller of the treasury, or for reporting any facts to the local government to which the audit committee is attached. Any person who knowingly and willingly retaliates or takes adverse action of any kind against any person for reporting alleged wrongdoing pursuant to this chapter commits a Class A misdemeanor.
History (2)
- Acts 2009, ch. 368, § 2
- 2013, ch. 64, § 2.
§ 9-3-407. Corrective action plan. - Each local government with one (1) or more audit findings in its annual audit shall submit a corrective action plan to the comptroller of the treasury or the comptroller's designee in a manner as prescribed by the comptroller or the comptroller's designee that addresses the actions taken or to be taken in response to each audit finding received in the annual audit. The corrective action plan must provide the name or names of the contact person or persons responsible for the corrective action, the corrective action taken or planned, and the anticipated completion date. If the local government does not agree with an audit finding, or believes corrective action is not required, the corrective action plan must state the reasons and justifications for that disagreement or belief.
Part 5 Public Employee Defined Benefit Financial Security Act of 2014 § 9-3-501. Short title. - This part shall be known and may be cited as the “Public Employee Defined Benefit Financial Security Act of 2014.”
§ 9-3-502. Applicability of part. - This part shall apply to political subdivisions that provide defined benefit plans not administered by the Tennessee consolidated retirement system.
§ 9-3-503. Part definitions. - (a) As used in this part, unless the context otherwise requires:
- (1) “Actuarially determined contribution” (ADC), formerly known as the “actuarially required contribution” means the actuarially determined annual required contribution that incorporates both the normal cost of benefits and the amortization of the pension plan's unfunded accrued liability;
- (2) “Pension plan” means the defined benefit pension plan established and maintained by a political subdivision for its employees, excluding a political subdivision's participation in the Tennessee consolidated retirement system pursuant to title 8, chapters 34–37. The term “pension plan” shall include all pension plans that are open or closed to membership, and shall also include the plural, referring to any and all pension plans provided by a political subdivision;
- (3) “Political subdivision” means any local governmental entity, including, but not limited to any municipality, metropolitan government, county, utility district, school district, public building authority, housing authority, emergency communications district, and development district created and existing pursuant to the laws of this state, or any instrumentality of government created by any one (1) or more of the named local governmental entities;
- (4) “Political subdivision employee” means any person in the employ of a political subdivision who participates in the political subdivision's pension plan;
- (5) “Unfunded accrued liability” means the actuarially determined accrued liabilities of the pension plan that are greater than the actuarially determined value of the pension plan assets.
§ 9-3-504. Political subdivisions to develop funding policies. - (a) Notwithstanding any law, rule, ordinance, resolution, charter, pension plan, agreement or pension plan contract to the contrary, the applicable provisions of this part shall apply to any political subdivision in the state that has established and maintains, directly or indirectly, a defined benefit pension plan for the benefits of its employees, irrespective of the manner in which the pension plan is administered.
- (b) Each political subdivision shall develop a funding policy for financing the obligations under the pension plan. Such funding policy shall be legally adopted and approved through a resolution by the political subdivision's chief legislative body or governing body. The funding policy shall be in effect until amended. Each political subdivision shall develop a funding policy for fiscal years beginning after June 15, 2015. The funding policy and any amendment thereto shall be submitted to the comptroller of the treasury within thirty (30) days after adoption.
- (c) The political subdivision's funding policy shall include, but not be limited to the following:
- (1) The ADC for each pension plan shall include the normal costs and the amortization of the unfunded accrued liability, to the extent that any of the plans have any unfunded accrued liability for a particular fiscal year;
- (2) The maximum amortization period for which any unfunded accrued liabilities will be paid; and
- (3) A statement that the political subdivision's budget shall include funding of at least one hundred percent (100%) of the ADC, except as provided in § 9-3-505(b).
- (d) The actuarial methodology is expected to provide that projected revenues (employer contributions, employee contributions, and investment earnings), and current assets will finance all of the projected benefits (death, disability, and retirement) provided by the plan. In the event that pension plan has an unfunded accrued liability, the level dollar amortization method shall be utilized beginning on or before June 15, 2020, for financing the unfunded accrued liability, and will continue to be utilized thereafter.
- (e) The ADC calculated by the political subdivision's actuary shall be calculated utilizing the following methodology, and in accordance with the Actuarial Standards of Practice established by the Actuarial Standards Board:
- (1) Actuarial cost method allocating normal costs over a period beginning no earlier than the date of employment which should not exceed the last assumed retirement age. This method is designed to fully fund the long-term costs of promised benefits, consistent with the objective of keeping contributions relatively stable and equitably allocating the costs over the employees' period of active service. Commencing with the plan fiscal year beginning after June 15, 2019, a generally accepted actuarial method that achieves the above objectives shall be used, except the projected unit credit method is not permitted;
- (2) Actuarial value of assets calculated using a maximum ten-year asset smoothing period. Any smoothing period greater than five (5) years will have a maximum twenty percent (20%) market corridor. For the purposes of this subsection (e), the term “market corridor” means a range beyond which deviations are not smoothed;
- (3) No later than the plan fiscal year beginning after June 15, 2020, the level dollar amortization method of unfunded accrued liabilities;
- (4) Mortality assumptions, which should consider the effect of expected mortality improvements, and shall be utilized beginning on or before the plan fiscal year after June 15, 2024, and will continue to be utilized thereafter;
- (5) Investment earnings assumption that shall not be greater than fifty (50) basis points above the rate adopted by the Tennessee consolidated retirement system; and
- (6) A closed amortization period not to exceed thirty (30) years for all unfunded accrued liabilities.
- (f) The ADC for the political subdivision's pension plan shall be determined by an independent, qualified actuary.
- (g) The actuary used by the political subdivision shall be a member of the American Academy of Actuaries.
- (h) The actuary used by a political subdivision for the calculation of the ADC for its pension plan shall not be an employee of that political subdivision, and shall not be otherwise eligible to participate in any of the political subdivision's pension plans.
- (i) The measurement standard used to determine a pension plan's funded status must be done in accordance with rules, standards, guidelines, and interpretations established by the governmental accounting standards board.
- (j) The actuary's determinations, including the ADC, shall be contained in a report submitted to the political subdivision and shall include a certification indicating the actuary's report has been prepared in accordance with all of the Actuarial Standards of Practice established by the Actuarial Standards Board as well as an explanation for any deviations. The actuary shall also certify in the report the overall appropriateness of the analysis in addition to the assumptions and results. The assumptions analyzed by the actuary must include, but not be limited to, the following: asset experience, including, but not limited to, the investment rate of return, discount rate, salary experience, cost of living adjustments, rates of retirement, turnover, and disability; mortality, including future improvement; and forms of benefit payments, including, but not limited to, lump sum payments.
History (3)
- Acts 2014, ch. 990, § 3
- 2018, ch. 681, § 1
- 2020, ch. 783, § 1.
§ 9-3-505. Payments by political subdivision to pension plan — Annual funding progress percentage — Plan of correction. - (a) A political subdivision shall annually pay a payment to the pension plan of no less than one hundred percent (100%) of the ADC; however, it may make a payment of more than one hundred percent (100%) of the ADC.
- (b) A political subdivision that is not paying at least one hundred percent (100%) of the ADC to its pension plan for the fiscal year that includes June 30, 2015, shall maintain effort in the percentage of the ADC paid and, in addition thereto, in each subsequent year, pay the cumulative annual funding progress percentage to increase the funding percentage of the ADC to the pension plan until payment of one hundred percent (100%) of the ADC occurs within a maximum of five (5) consecutive years after June 30, 2015. The annual funding progress percentage is, as a minimum, the percentage determined by dividing by five (5) the difference between the percentage of the ADC paid in the plan fiscal year preceding July 1, 2015, subtracted from one hundred percent (100%). When payment of one hundred percent (100%) of the ADC occurs, the political subdivision shall continue to pay one hundred percent (100%) of the ADC annually. The ADC shall be recalculated each year and the percentage of funding shall be based on the most recent recalculation of the ADC.
- (c) If a political subdivision is unable to meet the annual funding progress percentage set out in subsection (b), the political subdivision may submit a plan of correction to the state treasurer for consideration. If the state treasurer determines the plan of correction is sufficient to comply with the requirements of subsection (b) as soon as possible and to pay one hundred percent (100%) of the ADC to the pension plan by June 30, 2020, the state treasurer shall submit the plan of correction to the state funding board for approval. The plan of correction shall contain, at a minimum, the following: the reason for the political subdivision's inability to meet the annual funding progress percentage of subsection (b); the political subdivision's detailed plan to comply with the requirements of subsection (b) as soon as possible and to pay one hundred percent (100%) of the ADC to the pension plan no later than June 30, 2020, including, but not limited to the amount or amounts to be paid by a date certain or over a period of time; reports necessary to demonstrate how the political subdivision will comply with the plan of corrective action; and any amendment to the political subdivision's funding policy to comply with the plan of corrective action. In addition to the information provided in the political subdivision's plan of corrective action, the political subdivision shall promptly furnish any additional documentation the state treasurer may request, including, but not limited to, financial data and actuarial reports.
- (d) A political subdivision that does not pay one hundred percent (100%) of its ADC in any fiscal year beginning with July 1, 2020, shall pay the difference between funding equal to one hundred percent (100%) of its ADC and what was actually paid by the political subdivision in a particular fiscal year by adding the difference or differences to the one-hundred-percent payment of the political subdivision's ADC, which must be paid in the fiscal year subsequent to the underpaid ADC. The difference or differences may be added cumulatively to the political subdivision's one-hundred-percent payment of its ADC.
History (2)
- Acts 2014, ch. 990, § 3
- 2020, ch. 783, § 2.
§ 9-3-506. Provisions applicable to political subdivision's administration of pension plan benefits. - (a) The following shall apply to all political subdivisions subject to this part:
- (1)
- (A) For political subdivision employees hired on or after May 22, 2014, the political subdivision may freeze, suspend or modify benefits, employee contributions, plan terms and design on a prospective basis;
- (B) Subdivision (a)(1)(A) does not affect any judicial precedents or statutory law as they apply to employees who were employed prior to May 22, 2014;
- (2) For any pension plan that is funded below sixty percent (60%), the political subdivision shall not establish a benefit enhancement until it has received written approval by the state treasurer. For the purposes of this subdivision (a)(2), “benefit enhancement” means any change in member benefits, benefit structure, or benefit formula provided by a political subdivision relative to its pension plan that, according to the political subdivision's actuary, will or is estimated to permanently, temporarily, or intermittently increase either the employer or employee contributions or the liabilities of the pension plan; and
- (3) For political subdivisions with an existing pension plan as of May 22, 2014, the political subdivision shall not establish a new pension plan that changes the funding policy, increases the employer cost, or adds to the unfunded accrued liability of an existing pension plan until it has received written approval from the state treasurer. For the purposes of this subdivision (a)(3), a political subdivision establishes a new pension plan by taking any or a combination of the following actions:
- (A) Establishing a tier that has not been previously provided as part of a pension plan;
- (B) Reopening a previously closed pension plan or previously closed tier of a pension plan; or
- (C) Establishing a plan that is different from the political subdivision's existing pension plan.
- (b) The accrued benefits earned prior to any adjustment pursuant to subdivision (a)(1) shall remain an enforceable right and may not be reduced without the written consent of the political subdivision employee, unless the employee is subject to the forfeiture of the employee's retirement benefits in accordance with § 8-35-124.
- (c)
- (1) Notwithstanding any other law, for political subdivision employees hired on or after May 22, 2014, nothing under state law confers to participants in the pension plan an implied right to future retirement benefit arrangements, and such participants may not assert the indefinite continuation of the retirement formulas, contribution rates, eligibility ages, or any other provision of the pension plan.
- (2) Subdivision (c)(1) does not affect any judicial precedents or statutory law as they apply to employees who were employed prior to May 22, 2014.
History (3)
- Acts 2014, ch. 990, § 3
- 2018, ch. 681, § 2
- 2020, ch. 783, § 3.
§ 9-3-507. Withholding of money from state-shared taxes to be paid to political subdivision's pension plan in event of failure to pay established percentages. - (a) In the event the political subdivision shall fail to fund the ADC according to the percentages established in § 9-3-505, the commissioner of finance and administration, at the direction of the comptroller of the treasury, is authorized to withhold such amount or part of such amount from any state-shared taxes that are otherwise apportioned to such political subdivision. The money withheld from state-shared taxes shall be paid to the political subdivision's pension plan.
- (b) The deduction shall be made as a first charge against any moneys payable to such political subdivision regardless of the source of such payment and regardless of the purpose or contemplated use of such funds.
- (c) Regardless of a political subdivision's funding level of its ADC, a political subdivision may, with the recommendation of the state treasurer and the approval of the board of trustees of the Tennessee consolidated retirement system:
- (1) Continue the administration of its pension plan, but have the pension plan funds co-invested with the pension plan assets for the Tennessee consolidated retirement system, but established in a separate fund from the Tennessee consolidated retirement system assets, and accounted for separately with accurate and detailed accounting records. The separate fund shall be operated in accordance with IRS Revenue Ruling 2011-1 or subsequent guidance regarding a group trust fund under Internal Revenue Code § 401(a)(24) (26 U.S.C. § 401(a)(24)). Before a political subdivision's pension plan assets are co-invested with Tennessee consolidated retirement system assets, the political subdivision shall provide the department of treasury with its plan document and a determination letter from the internal revenue service that its plan assets are qualified assets or written advice from competent counsel of the Tennessee consolidated retirement system that the plan is a qualified plan. The political subdivision shall enter into an agreement with the retirement system for the co-investment of the political subdivision's pension plan assets, which shall include a charge assessed by the retirement system against the political subdivision for services related to the co-investment of assets; or
- (2)
- (A) Continue the pension plan, but have the plan administered by the Tennessee consolidated retirement system and have the assets co-invested with the Tennessee consolidated retirement system pension plan assets;
- (B) The political subdivision shall enter into an agreement with the Tennessee consolidated retirement system to provide billing services, participant enrollment services, participant accounts, data processing, recordkeeping, investment and other related services that are necessary or appropriate to the administration of the political subdivision's pension plan. The agreement may provide that the services be provided directly by staff of the retirement system or through contracts with other providers;
- (C) Any agreement entered into under this section shall require that the political subdivision remain the responsible administrator for the political subdivision's pension plan, and that neither the state of Tennessee nor the retirement system, or any of its officers, agents, employees, or boards shall act as a trustee or be considered the trustee for the political subdivision's pension plan;
- (D) The chair of the retirement system shall assess a charge to the political subdivision for the administration of the political subdivision's pension plan and co-investment of its assets, in an amount to be determined by the chair, to meet the administrative expenses of the retirement system in providing the administration and co-investment services under this section. It is the legislative intent that the state shall realize no increased cost as a result of the administration of the political subdivision's pension plan and co-investment of its assets, and that all costs associated with the administration of the pension plan, including administrative and co-investment costs, shall be the responsibility of the respective political subdivision. In the event that the political subdivision refuses or otherwise fails to satisfy this liability, such amounts shall become a lien on the property of the political subdivision and may be withheld from state-shared taxes which are otherwise apportioned to the political subdivision;
- (E) As a condition of providing the services described in this section for the administration of a political subdivision's pension plan, and at any time thereafter, the chair of the retirement system may require that the political subdivision provide proof that the political subdivision's pension plan is a qualified plan and otherwise complies with the applicable provisions of the Internal Revenue Code, as amended. The chair of the retirement system may require an opinion of counsel or other assurance satisfactory to the chair that the provision of the services described in this section does not cause the retirement system, the state, or any of their agencies or employees to violate any federal or state laws or regulations;
- (F) Political subdivisions shall take all actions that the retirement system, in its discretion, deems necessary for compliance by the retirement system with all applicable federal and state laws or for qualification of the retirement system for any exemptions from regulation available under those laws, including, but not limited to, the federal Securities Act of 1933, as amended, (15 U.S.C. § 77a et seq.), and the Investment Company Act of 1940, as amended, (15 U.S.C. § 80(a)-1 et seq.);
- (G) The political subdivision's plan shall be administered separately from the Tennessee consolidated retirement system, and shall be administered according to the political subdivision's pension plan documents;
- (H) The political subdivision's plan assets shall be established in a separate fund from the Tennessee consolidated retirement system assets, and accounted for separately with accurate and detailed accounting records. The separate fund shall be operated in accordance with IRS Revenue Ruling 2011-1 or subsequent guidance regarding a group trust fund under Internal Revenue Code § 401(a)(24). Before a political subdivision's pension plan assets are co-invested with Tennessee consolidated retirement system assets, the political subdivision shall provide the department of treasury with its plan document and a determination letter from the internal revenue service that its plan assets are qualified assets.
- (d) Notwithstanding any law to the contrary, through its administration of a political subdivision's pension plan, or the co-investment of the political subdivision's pension plan assets, as set forth in subdivisions (c)(1) and (2), the Tennessee consolidated retirement system shall not be liable for the payment of any retirement allowances or other benefits on account for the political subdivision employees or their respective beneficiaries, for which reserves have not been previously created from funds contributed by the political subdivision or the political subdivision employees for such benefits.
- (e)
- (1) Notwithstanding any law to the contrary, to the extent that some or all of a political subdivision's pension plan assets intended to be invested pursuant to subsection (c) do not comport with the investment policy for the Tennessee consolidated retirement system:
- (A) The board of trustees for the Tennessee consolidated retirement system may permit, as a written exception or amendment to the investment policy, the co-investment of the pension plan assets with the pension plan assets for the Tennessee consolidated retirement system under subsection (c). Such an exception or amendment shall contain the limitations, conditions, or restrictions on the co-investment of pension plan assets, including, but not limited to, the management strategy and timeframe for the conversion or liquidation of the pension plan assets to an investment authorized by the retirement system's investment policy within a reasonable period of time, considering the market for such investments. An exception or amendment under this subsection (e) may address multiple pension plans, a single pension plan, or be general in nature; or
- (B) The state treasurer may take custody of the pension plan assets in an account separate from the Tennessee consolidated retirement system assets. The state treasurer shall invest the pension plan assets in accordance with the political subdivision's investment policy. The political subdivision's agreement for services provided under this section shall provide:
- (i) The limitations, conditions, or restrictions on the investment of pension plan assets, including, but not limited to, the management strategy and timeframe for the conversion or liquidation of the pension plan assets to an investment authorized by the retirement system's investment policy within a reasonable period of time, considering the market for such investments; and
- (ii) A charge assessed to the political subdivision for such services.
- (2) Nothing in this subsection (e) shall prohibit a portion of a political subdivision's assets from being co-invested while a portion of the political subdivision's assets are invested separately under this subsection (e).
History (2)
- Acts 2014, ch. 990, § 3
- 2018, ch. 833, § 1.
Part 6 Blockchain, Cryptocurrency, Non-Fungible Tokens, or Virtual Currency [Repealed effective June 30, 2025] § 9-3-601. Restrictions on payment or conversion of compensation or funds to blockchain, cryptocurrency, non-fungible tokens, or virtual currency. [Repealed effective June 30, 2025.] - (a) Notwithstanding another law to the contrary, a governmental entity shall not pay, compensate, award, or remit funds in the form of, or facilitate directly or indirectly the conversion of compensation or funds to, blockchain, cryptocurrency, non-fungible tokens, or virtual currency to an individual person, corporation, or other entity without the prior written approval of the state treasurer.
- (b) A governmental entity shall not procure services for the performance of the actions prohibited by subsection (a) without the prior written approval of the state treasurer.
§ 9-3-602. Part definitions. [Repealed effective June 30, 2025.] - As used in this part:
- (1) “Blockchain” means a decentralized data system in which the data stored is mathematically verifiable that uses distributed ledger technology, as defined in § 47-10-201, or databases to store specialized data in the permanent order of transactions recorded;
- (2) “Cryptocurrency” means a virtual currency that utilizes cryptography to validate and secure transactions that are digitally recorded through distributed ledger technology;
- (3) “Governmental entity” means a local governmental entity, including, but not limited to, a municipality, metropolitan government, county, utility district, school district, public building authority, and development district created and existing pursuant to the laws of this state, or an instrumentality of government created by one (1) or more of the named local governmental entities or by an act of the general assembly;
- (4) “Non-fungible token” means a non-fungible cryptographic asset on a blockchain that possesses unique identifiers or other metadata that distinguishes the asset from another token or asset in a manner that makes the asset irreplaceable and non-exchangeable for a similar token or asset; and
- (5) “Virtual currency” means a digital representation of value that functions as a medium of exchange, a unit of discount, or a store of value, but does not have legal tender status in the United States.
Chapter 4 State Funds, State Budget and Appropriations Part 1 Definitions § 9-4-101. Collateral. - “Collateral” means eligible collateral pledged by a state depository.
History (1)
- Acts 1985, ch. 118, § 13.
§ 9-4-102. Default. - “Default” may include, but is not limited to:
- (1) The failure of any state depository to return any state deposit, including earned interest, in accordance with the terms of the deposit contract;
- (2) The failure of any state depository to pay any check, draft or warrant drawn by the state treasurer;
- (3) The failure of any state depository to honor any request for electronic transfer of funds to the state;
- (4) The failure of any state depository to account for any check, draft, warrant, order, deposit certificate or money entrusted to it by the state;
- (5) The issuance of any order of any court or the taking of any formal action by any supervisory authority, which has the effect of restraining a state depository from making payments of deposit liabilities;
- (6) The appointment of a receiver for a state depository; or
- (7) Any other action which the state treasurer determines to place state deposits in jeopardy.
History (1)
- Acts 1985, ch. 118, § 14.
§ 9-4-103. Eligible collateral. - (a) “Eligible collateral” means:
- (1) Bonds, notes, and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies;
- (2) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association, and other United States government-sponsored corporations;
- (3) Bonds of the state of Tennessee, including any revenue bond issued by any agency of the state specifically including institutions under the control of the state board of regents, the board of trustees of the University of Tennessee and bonds issued in the name of the state school bond authority;
- (4) Bonds of any utility district, county or municipal corporation of the state of Tennessee, including bonds payable from revenues (expressly excluding bonds of any road, levee or drainage district) upon which such bonds there has been no default in the payment of interest more than thirty (30) days upon any one (1) installment of interest, for the five (5) years next preceding the deposit of such bonds;
- (5) [Deleted by 2022 amendment.]
- (6) Bonds issued under title 7, chapters 37 and 53, or under title 48, chapter 101, part 3, that are rated “A” or higher by any nationally recognized rating service;
- (7) In addition, the state treasurer, with the concurrence of the commissioners of finance and administration and of financial institutions, may accept any other collateral security which is acceptable to the secretary of the treasury to secure the United States for deposits of public money in tax and/or loan accounts;
- (8) An irrevocable letter of credit issued by the federal home loan bank; provided, that:
- (A) The federal home loan bank is rated investment grade by at least one (1) nationally recognized securities rating service; and
- (B) The state treasurer may require the state depository to promptly pledge securities in lieu of the letter of credit if the state treasurer believes it necessary to protect public funds;
- (9) A surety bond issued by an insurance company licensed under the laws of this state that meets the following:
- (A)
- (i) The company has a financial strength rating, also known as claims-paying ability, in one (1) of the two (2) highest categories by at least one (1) nationally recognized statistical rating agency; and
- (ii) Any other financial or participation criteria and conditions established by the state funding board;
- (B) The company offering the surety bond and the form of the bond is approved by the state funding board;
- (C) The amount of surety bond pledged by any one (1) state depository or qualified public depository in lieu of other eligible collateral shall not exceed thirty million dollars ($30,000,000) or fifty percent (50%) of all collateral for that institution required to be pledged to the state treasurer or to the collateral pool, whichever is lower;
- (D) The treasurer shall monitor the financial strength rating of a qualified insurance company no less than weekly, and at least annually shall file a report with the state funding board and the collateral pool board on the condition of the qualified insurance company. If the condition of an insurer changes to the extent that the issuer would no longer be qualified under the requirements of subdivision (a)(9)(A), the treasurer shall immediately notify the state funding board and the collateral pool board; and the insurer shall thereafter become disqualified;
- (E) In the event an insurer becomes disqualified under subdivision (9)(D), the state depository or qualified public depository using the insurer's surety bond shall be required within thirty (30) days' notice from the treasurer to substitute other eligible collateral or to otherwise meet the required collateral level;
- (F) Notwithstanding the disqualification of an insurer under subdivisions (a)(9)(D) and (E), the surety bond of the insurer shall remain in effect until its expiration, nonrenewal or termination as otherwise permitted by law;
- (G) In addition to the authority otherwise provided in this section or by law, the state treasurer may require the state depository or qualified public depository to promptly pledge eligible collateral in lieu of the surety bond if the treasurer makes a finding that additional collateral is necessary to protect public funds;
- (H) A surety bond authorized in this subdivision (a)(9) may only be used to secure funds in the custody of the state treasurer or to secure funds covered by the collateral pool created under part 5 of this chapter; and
- (I) In the event that an issuer of surety bonds desires to withdraw from the program or to terminate a surety bond, the bond issuer shall give the state treasurer and the insured state depository or qualified public depository no less than sixty (60) days' advance notice of the withdrawal, nonrenewal or cancellation of the bonds;
- (10) State or municipal bonds from other states or from municipalities in other states; provided, that:
- (A) The bond is AA-, Aa3, or a higher rating by a nationally recognized bond rating service;
- (B) The bond is not a structured debt instrument; and
- (C) If the bond is downgraded below the minimum rating, the state depository shall substitute other eligible collateral or otherwise meet the required collateral levels within two (2) working days;
- (11) Cash. For the purposes of this subdivision (a)(11), the term “cash” includes, but is not limited to, United States currency. Notwithstanding this subdivision (a)(11), cash shall not be used as collateral for guaranteed investment contracts pursuant to § 12-10-111(n); or
- (12) Bonds of the small business administration.
- (b) It is within the state treasurer's discretion to accept or decline certain forms of eligible collateral.
History (10)
- Acts 1985, ch. 118, § 15
- 1986, ch. 551, § 2
- 1994, ch. 586, § 1
- 1997, ch. 217, §§ 3, 14
- 2009, ch. 6, § 1
- 2012, ch. 942, § 1
- 2013, ch. 202, § 1
- 2018, ch. 752, §§ 1, 2
- 2021 (3rd Ex. Sess.), ch. 2, § 1
- 2022, ch. 1066, §§ 1-6.
§ 9-4-104. Loss. - “Loss” includes, but is not limited to:
- (1) The principal amount of the state deposit;
- (2) All accrued interest through the date of default;
- (3) Additional interest at the rate the state deposit was earning on the total of subdivisions (1) and (2) through the day of payment to the state by a liquidator or other third party or through the date of sale by the state treasurer or the state treasurer's agent; and
- (4) Attorney's fees incurred in recovering state deposits.
History (1)
- Acts 1985, ch. 118, § 16.
§ 9-4-105. Required collateral. - “Required collateral” means collateral whose market value is equal to one hundred five percent (105%) of the value of the state deposit secured thereby, less so much of such amount as is protected by the federal deposit insurance corporation.
History (2)
- Acts 1985, ch. 118, § 17
- 1990, ch. 702, § 2.
§ 9-4-106. State deposit. - “State deposit” means all state funds which are placed in a state depository, plus interest accrued thereon.
History (1)
- Acts 1985, ch. 118, § 18.
§ 9-4-107. State depository. - (a)
- (1) “State depository” means:
- (A) Any savings bank (savings institution), or any bank chartered by the state of Tennessee;
- (B) Any national bank, or federal savings institution that has its main office located in this state; or
- (C) Any national or state bank, or any federal or state savings institution that has its main office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits;
- that has been designated by the state treasurer, the governor and the commissioner of finance and administration as a state depository.
- (2) Notwithstanding any other law to the contrary, an automated teller machine or such other similar type receptacle or device shall not be considered a branch for purposes of this section.
- (b) Whenever the satisfactory conduct of the state's business clearly demands it, and not otherwise, a bank, savings institution or trust company that does not otherwise meet the requirements in subsection (a) may be designated as a state depository by the state treasurer, the governor and the commissioner of finance and administration. In the event it becomes necessary to designate such a bank, savings institution or trust company, the department or agency seeking such designation shall make a written request to the officials enumerated above, giving in detail the necessity for the designation and all other information the officials deem material. Any bank, savings institution or trust company designated under this subsection (b) shall be deemed a state depository only for the specific purpose for which it was designated and shall not be recognized as a state depository for any other purpose.
- (c) A bank, savings institution or trust company located outside this state shall not be eligible to be designated as a state depository pursuant to this section unless the bank, savings institution or trust company:
- (1) Agrees that this chapter shall govern in determining its rights and responsibilities as a state depository; and
- (2) Agrees to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter.
- (d) Notwithstanding § 12-4-108 to the contrary, the public official described in § 12-4-108(b) shall have the power to enter into a trust agreement with any savings institution or bank described in subsection (a) for the safekeeping, custodial care and servicing of securities substituted for retained funds pursuant to § 12-4-108.
- (e) It is the duty of the commissioner of financial institutions to make inquiry, on a timely basis, of the primary regulatory authority respecting the condition and safety of each out-of-state state chartered bank and of each out-of-state state chartered savings institution as a state depository, and to advise the state treasurer and the commissioner of finance and administration of the results. Such inquiry shall be made on at least an annual basis.
- (f)
- (1) On or after July 1, 2022, the state treasurer shall not enter into a contract or amendment with a state depository for the state's primary cash management banking services if the state depository has a policy that prohibits financing to companies in the fossil fuel industry; provided, however, that the state treasurer may award or enter into a contract or amendment with a state depository that has such a policy upon a determination that the services sought are necessary for the department of treasury or the state to perform its functions, and that absent such an exemption, the department of treasury or the state would be unable to obtain the services sought from another contractor.
- (2) For the purposes of this subsection (f), the term “companies in the fossil fuel industry” means entities with at least fifty percent (50%) of its annual revenue obtained from business operations involving natural gas, oil, kerosene, petroleum, coal, hydrocarbon product, or any form of solid, liquid, or gaseous fuel derived from such material to produce heat for the generation of electricity.
History (7)
- Acts 1985, ch. 118, § 19
- 1986, ch. 551, § 11
- 1986, ch. 923, § 1
- 1989, ch. 183, § 1
- 1997, ch. 217, § 15
- 2001, ch. 33, §§ 1, 2
- 2022, ch. 1039, § 1.
§ 9-4-108. Trustee custodian. - (a) “Trustee custodian” means any bank or federal reserve bank or branch thereof or the federal home loan bank which the state treasurer has designated as trustee custodian to hold eligible collateral on behalf of the state treasurer. Such designation by the state treasurer of a bank other than a federal reserve bank or the federal home loan bank shall be submitted to the commissioners of financial institutions and finance and administration for their concurrence.
- (b) Financial institutions located outside this state shall be eligible to apply to be designated as trustee custodians pursuant to subsection (a); provided, that the financial institution:
- (1) Is approved to serve as a trustee custodian to hold collateral pledged to secure United States treasury tax and loan accounts;
- (2) Agrees that the laws of this state shall govern in determining its rights and responsibilities as a trustee custodian; and
- (3) Agrees to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter.
History (2)
- Acts 1985, ch. 118, § 20
- 1990, ch. 702, § 6.
§ 9-4-109. Applicability of this part and parts 3 and 5 of this chapter — “State treasurer” construed. - (a) Parts 1, 3 and 5 of this chapter apply to the deposit of all public funds by counties and municipalities including, but not limited to, those deposited under §§ 5-8-201, 5-8-207, 5-8-301(b)(2), 6-4-402, 6-22-120, 6-35-313, 6-56-106, and 6-56-110. No private act shall provide for the deposit or security for public funds in any manner or under any terms other than that provided in this chapter.
- (b) For the purpose of carrying out this section, any reference to the state treasurer or any other state official in this part and part 4 of this chapter is deemed to mean the county or municipal official charged with the deposit of county or municipal funds, and shall not require the state treasurer nor any other state official to perform any deposit, collateral nor safekeeping services on behalf of the local government.
History (3)
- Acts 1994, ch. 752, § 9
- 1996, ch. 621, § 1
- T.C.A. § 9-4-111.
Part 2 Accounts or Appropriations for Designated Purposes § 9-4-201. Special federal funds. - The commissioner of finance and administration shall set up and maintain special accounts in the general fund with respect to moneys received for designated purposes from the federal government.
History (1)
- Acts 1985, ch. 118, § 21.
§ 9-4-202. Separate account, collateral, and bond. - (a) Notwithstanding any law or regulation to the contrary, any reference to a separate account in state law is deemed to mean a separate account within the state's accounting system and shall not require establishment of a separate account in a state depository.
- (b) Any reference to separate collateral shall be satisfied if sufficient total collateral is maintained in accordance with parts 1-4 of this chapter.
- (c) Any reference to separate bond shall be satisfied through coverage of the state treasurer by the state's blanket surety bond pursuant to § 4-4-108.
History (1)
- Acts 1985, ch. 118, § 22.
§ 9-4-203. Trust funds. - Unless otherwise provided by law, the funding board established by § 9-9-101 shall act as trustee for any funds which are directed to be held in trust by the state or any agency thereof. Unless otherwise provided by law, the state treasurer shall invest such trust funds under policy guidelines established by resolution of the funding board pursuant to § 9-4-602. Each trust fund shall be responsible for administrative expenses incurred in the investment of such funds.
History (1)
- Acts 1985, ch. 118, § 23.
§ 9-4-204. Police pay supplement fund. - (a) There is created within the general fund a special agency account to be known as the “police pay supplement fund.”
- (b) Notwithstanding any law to the contrary, all funds designated to fund the police pay supplement created pursuant to § 38-8-111 shall be deposited in the police pay supplement fund and disbursed in accordance with law solely for the payment of police pay supplements and such other uses as may be authorized by § 38-8-111.
History (3)
- Acts 1985, ch. 461, § 2
- 2007, ch. 567, § 2
- 2011, ch. 84, § 1.
§ 9-4-205. Victims of crime assistance fund. - (a) There is created a fund within the treasury of the state of Tennessee to be known as the “victims of crime assistance fund.”
- (b) Moneys shall be deposited to the fund pursuant to § 67-4-606 and as may be otherwise provided by law and shall be invested pursuant to § 9-4-603. Moneys in the fund shall not revert to the general fund of the state, but shall remain available for appropriation to victims of crime assistance programs as determined by the general assembly.
- (c) Funds in the victims of crime assistance fund and available federal funds, to the extent permitted by federal law and regulation, shall be used first to fund the victim-witness coordinator program established in § 8-7-206 and, to the extent that additional funds are available, to support other eligible victims of crime assistance programs. Such eligible victims of crime assistance programs shall include, but not be limited to, programs which provide appropriate counseling and support to victims, including each victim's family and programs which assist in the rehabilitation of victims of crime.
- (d) The commissioner of human services shall receive grant applications for funds and shall approve such grants as are desirable to effectuate the purposes of the Victims of Crime Assistance Act of 1986, as contained in this section and §§ 8-7-206, 40-24-107(e) [repealed], and 67-4-606(a)(5), to the full extent of available funding in the victims of crime assistance fund established by this section. To assist in establishing criteria, priorities and the review of grant applications, the commissioner of human services shall establish an advisory committee composed of persons from each grand division who are knowledgeable in establishing and administering victims of crime assistance programs.
History (2)
- Acts 1986, ch. 880, § 1
- 2002, ch. 723, § 4.
§ 9-4-206. Impaired drivers trust fund. - (a) There is created in the state treasury a fund to be known as the “impaired drivers trust fund.” Moneys shall be deposited in the fund as provided in § 55-10-413(b), and shall be invested for the benefit of the fund pursuant to § 9-4-603. Moneys in the fund shall not revert to the general fund of the state, but shall remain available to be used by the division of vocational rehabilitation in the department of human services exclusively for the purpose specified in subsection (b).
- (b)
- (1) The purpose of the impaired drivers trust fund is to provide financial assistance unavailable through any other source to residents of the state who, as a result of a traumatic brain injury, require such assistance. Moneys in the fund shall, whenever possible, be utilized to match any available federal dollars, and such moneys from the trust fund and the federal match shall be utilized to provide services needed to assist persons suffering from traumatic brain injuries including, but not limited to, day care services, available physical therapy, and any other appropriate developmental programs.
- (2) As used in this subsection (b), “traumatic brain injury”:
- (A) Means an acquired injury to the brain caused by an external physical force resulting in total or partial disability or impairment;
- (B) Includes open and closed head injuries that may result in seizures, and/or in mild, moderate, or severe impairments in one (1) or more areas including cognition, language, memory, attention, reasoning, abstract thinking, psychosocial behavior, physical functions, information processing, and speech; and
- (C) Does not include brain injuries induced by birth trauma, but may include brain injuries caused by anoxia and other related causes, infectious disease not of a degenerative nature, brain tumor, toxic chemical or drug reactions.
History (3)
- Acts 1990, ch. 1081, § 2
- 1993, ch. 470, § 1
- 2013, ch. 154, § 30.
§ 9-4-207. Transportation equity trust fund — Account. - (a) There is hereby created a segregated account within the state treasury to be known as the “transportation equity trust fund.” Moneys shall be deposited to the fund pursuant to § 67-6-103(b), and shall be invested for the benefit of the fund pursuant to § 9-4-603. Moneys in the fund shall not revert to any other fund at the end of a fiscal year but shall remain available for appropriation by the general assembly for use as provided below.
- (b) Notwithstanding any law to the contrary, all funds directed to be deposited to the fund pursuant to § 67-6-103(b) shall be so deposited and shall be administered by the department of transportation and used only for the benefit and operation of railways, aeronautics, waterways programs and related activities.
History (1)
- Acts 1992, ch. 1015, § 1.
§ 9-4-208. Appropriations to promote industries and facilities involving modern technologies — Audits. - (a) It is in the interest of this state to promote, encourage and foster the commercial and economic interests of the state by attraction of industries, educational and research facilities, and other facilities involving modern technologies. In furtherance of this end, the general assembly may appropriate funds to organizations that carry out these purposes.
- (b) The comptroller of the treasury shall have the authority to audit any funds appropriated and/or expended pursuant to this section.
History (2)
- Acts 1984, ch. 970, § 1
- T.C.A. § 9-6-117.
§ 9-4-209. Civil rights attorneys' fees awards account. - (a) There is hereby created a fund or account, known as the “civil rights attorneys' fees awards account,” out of which federal court judgments awarding attorneys' fees in civil rights cases shall be paid where the state is liable for such judgments.
- (b) The civil rights attorneys' fees awards account shall be a sum sufficient account, and there shall be appropriated each year an amount sufficient to pay all fee awards for which the state is liable.
- (c) The civil rights attorneys' fees awards account shall be administered by the commissioner of finance and administration. Payments shall be made upon certification by the attorney general and reporter of the amount and liability of the state.
History (2)
- Acts 1984, ch. 985, §§ 1-3
- T.C.A. § 9-6-118.
§ 9-4-210. Increase or decrease in periods of imprisonments — Appropriations for operating costs. - (a)
- (1) For any law enacted after January 1, 2023, that results in a net increase in periods of imprisonment in state facilities, there must be appropriated from recurring revenues the estimated operating costs of the law.
- (2) Appropriations made under subdivision (a)(1) must be used only for operating costs for the department of correction.
- (3) Any law enacted without the funding required by subdivision (a)(1) is null and void unless such funding is appropriated in the general appropriations act.
- (b) For any law enacted after January 1, 2023, that results in a net decrease in periods of imprisonment in state facilities, the appropriations in subsection (a) must be decreased by the estimated amounts annually that account for the estimated decrease in operating costs of the law. The annual decrease in appropriations required pursuant to this subsection (b) must be made in the general appropriations act as a line item reduction for the next three (3) years commencing after the effective date of the law and in an amount equal to the annual estimated decrease in operating costs reflected in the fiscal note prepared pursuant to subsection (c).
- (c) The amount of appropriations made under this section must be equal to the amounts reflected in fiscal notes prepared by the staff of the fiscal review committee. Cost increases must be estimated based on the operating costs, in current dollars, of the highest of the next three (3) fiscal years commencing after July 1, 2022. Cost decreases must be estimated based on actual estimated operating costs to be reduced.
- (d) Should the fiscal note include both increases and decreases, the costs must be netted out on an annual basis for the next three (3) fiscal years commencing after July 1, 2022. Netted out cost increases must be based on the operating costs of the highest of the next three (3) fiscal years on a recurring basis. Netted out cost decreases must be based on actual estimated decreases for each of the next three (3) fiscal years.
- (e) For purposes of this section:
- (1) “Operating costs” means all variable costs of housing inmates in state facilities, or local facilities pursuant to title 41, chapter 8, other than capital outlay or capital maintenance costs and does not include any set costs for housing inmates in state or local facilities; and
- (2) “Periods of imprisonment in state facilities” includes inmates housed by the state in local facilities pursuant to title 41, chapter 8.
History (4)
- Acts 1985 (1st Ex. Sess.), ch. 1, §§ 1-6
- T.C.A., § 9-6-119
- Acts 2021, ch. 412, § 1
- 2022, ch. 1007, § 1.
§ 9-4-211. Reserve for revenue fluctuations. - (a)
- (1) There is hereby created on the books and records of the state treasury a reserve account in the general fund to be known as the “reserve for revenue fluctuations.” Amounts which may from time to time be in this reserve shall be available, as hereinafter provided, to meet unexpected shortfalls of revenue or to meet expenditure requirements in excess of budgeted appropriation levels.
- (2) Each year, beginning with the budget for the 1998-1999 fiscal year, the governor shall include in the budget document and the general appropriations bill prepared pursuant to § 9-4-5106, an amount to be allocated to this reserve at least equal to ten percent (10%) of the estimated growth in state tax revenues to be allocated to the general fund and the education trust fund. This allocation shall be included in the budget presented each year until the amount in the reserve equals eight percent (8%) of the estimated state tax revenues to be allocated to the general fund and the education trust fund for that year. In subsequent budgets, the governor shall include an allocation to the reserve equal to the lesser of:
- (A) An amount equal to ten percent (10%) of the estimated growth in state tax revenues to be allocated to the general fund and the education trust fund; or
- (B) An amount sufficient to maintain the reserve at eight percent (8%) of the estimated state tax revenues to be allocated to the general fund and the education trust fund for that year.
- (b) Amounts available in the revenue fluctuation reserve may be used by the commissioner of finance and administration to offset shortfalls in state tax revenues which may occur and for which funds are not otherwise available. It is hereby declared to be the legislative intent that to the extent practicable, all revenue shortfalls will be offset by reductions in expenditures before using amounts in the revenue fluctuation reserve.
- (c) Upon determining that it is likely that amounts in the revenue fluctuation reserve will be required to be utilized to meet a shortfall of state tax revenue, the commissioner shall report this determination immediately to the chairs of the finance, ways and means committees of the senate and the house of representatives. Upon receipt of such notification, each chair shall, as soon as practicable, call a meeting of the finance, ways and means committees, at which time the commissioner shall report information concerning the need to utilize amounts in the revenue fluctuation reserve. At the discretion of the chairs, the committees may meet jointly to receive the commissioner's report.
- (d) Subject to specific provisions of the general appropriations bill, an amount not to exceed the greater of one hundred million dollars ($100,000,000) or one-half (½) of the amount available in the reserve may be used by the commissioner to meet expenditure requirements in excess of budgeted appropriation levels. It is hereby declared to be the legislative intent that any such excess expenditure requirements be avoided by reducing such requirements insofar as possible. Prior to using any amounts in the reserve for this purpose, the commissioner shall notify the secretary of the state funding board and the chairs of the finance, ways and means committees of the senate and the house of representatives that the reserve funds are to be used for this purpose. Upon receipt of such notification, each chair shall, as soon as practicable, call a meeting of the finance, ways and means committees, at which time the commissioner shall report information concerning the need to utilize amounts in the revenue fluctuation reserve. At the discretion of the chairs, the committees may meet jointly to receive the commissioner's report.
History (5)
- Acts 1987, ch. 429, § 1
- 1996, ch. 832, § 1
- T.C.A. § 9-6-120
- Acts 2003, ch. 355, § 12
- 2013, ch. 175, § 1.
§ 9-4-212. State appropriations to nongovernmental defender services in capital cases. - No state funds for appeals of capital cases shall be appropriated for or allocated to The Capital Case Resource Center of Tennessee, Inc., or any other nongovernmental corporation or organization, except that this prohibition shall not apply to an individual member of the bar appointed by a court to represent an indigent defendant.
History (2)
- Acts 1995, ch. 528, § 1
- T.C.A. § 9-6-122.
§ 9-4-213. State appropriations to child advocacy centers. - (a) Except as otherwise provided in subsection (b), on and after July 1, 1998, no state funds appropriated specifically for child advocacy centers shall be allocated or paid to any such center unless the center clearly demonstrates that it:
- (1) Is a nonprofit corporation which has received a determination of exemption from the internal revenue service under 26 U.S.C. § 501(c)(3);
- (2) Employs an executive director who is answerable to the board of directors and who is not the salaried employee of any governmental entity signing the memorandum of understanding and working protocol identified in subdivision (a)(3);
- (3) Has a signed memorandum of understanding and working protocol executed among:
- (A) The department of children's services;
- (B) All county and municipal law enforcement agencies within the geographical area served by the center;
- (C) All district attorneys general offices within the geographical area served by the center; and
- (D) Any other governmental entity which participates in child abuse investigations or offers services to child abuse victims within the geographical area served by the center;
- (4) Facilitates the use of a multidisciplinary team (representing prosecution, law enforcement, mental health, medical, child protective and social services professionals and the juvenile court) which jointly:
- (A) Assess victims of child abuse and their families; and
- (B) Determine the need for services;
- (5) Provides a facility that is child-focused, neutral, comfortable, private, and safe, where the multidisciplinary team can meet to coordinate the efficient and appropriate disposition of child abuse cases through the civil and criminal justice systems;
- (6) Provides for the provision of needed services, referral to such services, and case tracking;
- (7) Has written policies and procedures consistent with the standards established by the National Children's Alliance; and
- (8) Agrees to accurately collect and report key outcome data and information relative to each center's operations to the Tennessee chapter of children's advocacy centers, which is the statewide membership organization. The Tennessee chapter of children's advocacy centers shall compile and report such data annually to the chairs of the judiciary committee of the senate, civil justice committee of the house of representatives, health and welfare committee of the senate, and health committee of the house of representatives. The data and information collected pursuant to this subdivision (a)(8) shall include, at a minimum, the following:
- (A) Number and demographic profiles of cases served by age, gender, race, type of abuse, and treatment thereof, including mental health and medical services rendered;
- (B) Demographic profiles of perpetrators of abuse by age, gender, race, relationship to victim, and the outcome of any legal action taken against such perpetrators;
- (C) Nature of services and support provided by or through the center; and
- (D) Data and information relative to community investment in and community support of the center.
- (b)
- (1) On and after July 1, 1998, no state funds appropriated specifically for one-time, start-up assistance for new child advocacy centers shall be allocated or paid to any such center unless the center clearly demonstrates that it:
- (A) Has a signed memorandum of understanding and working protocol executed among:
- (i) The department of children's services;
- (ii) All county and municipal law enforcement agencies within the area served by the center;
- (iii) All district attorneys general offices within the area served by the center; and
- (iv) Any other governmental entity which participates in child abuse investigations or offers services to child abuse victims within the area served by the center; and
- (B) Has formally filed an application for a determination of exemption from the internal revenue service under 26 U.S.C. § 501(c)(3).
- (2) After receiving any such start-up assistance, no additional state funds appropriated specifically for child advocacy centers shall be allocated or paid to such center unless the center clearly demonstrates that it complies with the enumerated requirements set forth in subsection (a).
- (c) In those geographical areas in which a child advocacy center meets the requirements of subsection (a) or (b), child advocacy center directors or their designees shall be members of the child protective multi-disciplinary teams under title 37, chapter 1, parts 4 and 6, for purposes of provision of services and functions established by this section or delegated pursuant to this section. In such event, child advocacy center directors or their designees may access and generate all necessary information, which shall retain its confidential status, consistent with § 37-1-612.
- (d) Notwithstanding any other provision of this section to the contrary, the department of children's services, or any other department administering state funds specially appropriated for child advocacy centers, shall continue to allocate and/or pay such funds to existing child advocacy centers with active applications on file with the department, if such centers demonstrate satisfactory progress in efforts to achieve compliance with this section.
History (8)
- Acts 1998, ch. 988, § 1
- T.C.A. § 9-6-123
- Acts 1999, ch. 453, § 3
- 2011, ch. 410, § 3(a)
- 2013, ch. 236, § 21
- 2018, ch. 678, §§ 1-3
- 2019, ch. 345, § 17
- 2021, ch. 64, § 10.
§ 9-4-214. Victims of human trafficking fund. - (a) There is created a fund within the state treasury, to be known as the “victims of human trafficking fund.” The fund consists of grants, appropriations by the general assembly, and any federal funds, to the extent permitted by federal law and regulation. Moneys deposited in the fund must be invested for the benefit of the fund pursuant to § 9-4-603. Moneys in the fund must not revert to the general fund, but must remain available to be used by the department of finance and administration's office of criminal justice programs exclusively for the purpose specified in subsection (b). The commissioner of the department of finance and administration has the authority to promulgate rules in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, in order to ensure the funds are received and expended for the purposes consistent with subsection (b).
- (b) The purpose of the victims of human trafficking fund is to provide specialized comprehensive treatment and support services to the victims of human trafficking offenses, as defined in § 39-13-314. Specialized comprehensive treatment and support services for victims of human trafficking include, but are not limited to, medical care, mental health and substance abuse care, nutritional counseling, safe housing, job training, transportation, and other basic human needs. The department of finance and administration's office of criminal justice programs shall distribute moneys in the fund in the form of grants to agencies that provide specialized comprehensive treatment and support services for the victims of human trafficking. It is the legislative intent that priority for funding be directed to the single point of contact agencies in this state recognized by the Tennessee bureau of investigation and the department of children's services.
Part 3 Receipt and Deposit § 9-4-301. State funds to be deposited. - (a) It is the duty of every department, institution, office and agency of the state and every officer and employee of state government, including the state treasurer, collecting or receiving state funds, to deposit them immediately into the state treasury or to the account of the state treasurer in a bank designated as a state depository or to the appropriate departmental account if authorized by § 9-4-302. The state funding board has the authority to establish a cash management policy to govern the cash management and deposit practices of every department, institution, office and agency of state government. The board is authorized to review cash management practices and make recommendations to appropriate state officials regarding modifications to current practices as well as the cash processing equipment needs of various state agencies.
- (b) Notwithstanding any other law to the contrary, and notwithstanding any written comment on the payment instrument or any other verbal or written comment, whenever any official deposits state funds in accordance with subsection (a), in any form or description, including, but not limited to, checks, drafts or warrants, that deposit shall in no manner relieve the person or organization submitting the amount of any liability which has or is subsequently determined to be owed to the state except to the extent that the amount deposited discharges the amount owed to the state. When an instrument is tendered by such person or organization and is deposited by the state for an amount which is less than the full amount owed, the remaining liability is enforceable in the same manner as the original amount owed to the state.
- (c)
- (1) Such deposit shall be made without any deductions on account of salaries, fees, costs, charges, expenses, refunds, claims, or demands of any description whatsoever.
- (2) Notwithstanding subdivision (c)(1), a department, institution, office, or agency of the state may enter into an agreement with a third party to collect state funds on its behalf under which the third party is permitted to deduct its service fee from the funds collected prior to deposit when such agreement is approved in accordance with title 4, chapter 56.
- (3) The chief procurement officer shall file an annual report listing the contracts approved pursuant to subdivision (c)(2) with the chairs of the finance, ways and means committees of the house of representatives and the senate no later than July 1 each year. It is the duty of all state agencies to furnish to the central procurement office, upon request, data relating to such revenue contracts.
- (d) Unless otherwise provided by law, all county and other officials collecting moneys for the use and benefit of the state shall remit the same to the commissioner of revenue in accordance with procedures established by the commissioner of finance and administration and approved by the state treasurer and the comptroller of the treasury.
History (4)
- Acts 1985, ch. 118, § 24
- 1986, ch. 923, § 2
- 1988, ch. 602, § 7
- 2021, ch. 172, §§ 1, 2.
§ 9-4-302. Departmental accounts. - (a) No department, officer or agency of state government, except the state treasurer, shall deposit state funds to the credit of such department, officer or agency in any financial institution except as provided in this section.
- (b) Whenever the satisfactory conduct of the state's business clearly demands it, and not otherwise, the commissioner of finance and administration, with the approval of the governor and the state treasurer, may authorize establishment of an account in the name of a state department or agency in a state depository.
- (c) Whenever state officials are required to hold funds in trust as a result of their official duties, such funds may be held in departmental accounts, unless otherwise directed by the commissioner of finance and administration, the governor and the state treasurer.
- (d) Whenever a departmental account is established, unless otherwise provided, funds in the account shall be invested in accordance with § 9-4-602.
- (e) A petty cash account may be allowed by the commissioner of finance and administration to each state department, institution or agency, which shall in the opinion of the commissioner require such account, and such account so established shall be reimbursed only upon statements and bills audited by the department of finance and administration. In the event that a petty cash account requires the establishment of a separate account in a financial institution, such account shall be established in accordance with subsection (b).
- (f) The commissioner of finance and administration shall promptly notify the comptroller of the treasury of any accounts established pursuant to this section.
History (2)
- Acts 1985, ch. 118, § 25
- 1986, ch. 923, § 3.
§ 9-4-303. Educational institutions. - Sections 9-4-301 and 9-4-302 shall not apply to institutions and other entities governed by the board of trustees of the University of Tennessee or the state board of regents. Those institutions and other entities shall operate in accordance with procedures established by their respective governing boards which are consistent with the provisions regulating other state agencies. The institutions and other entities governed by the board of trustees of the University of Tennessee or the state board of regents may participate in the state pooled investment fund established pursuant to § 9-4-603.
History (2)
- Acts 1985, ch. 118, § 26
- 1986, ch. 551, § 3.
§ 9-4-304. Service charges on state accounts. - Whenever interest bearing accounts are established by the state treasurer or other state official pursuant to § 9-4-301, § 9-4-302 or § 9-4-307, reasonable service charges may be deducted from interest income pursuant to procedures established by the state treasurer and commissioner of finance and administration. There is hereby appropriated from interest income an amount sufficient to pay such charges.
History (1)
- Acts 1985, ch. 118, § 27.
§ 9-4-305. Deposit certification. - (a) All deposits made pursuant to § 9-4-301, except as provided in subsection (b), shall be evidenced by a deposit certification in accordance with procedures established by the commissioner of finance and administration and approved by the state treasurer.
- (b) Deposits of state funds that result from transfers within the banking system utilizing electronic transfer of funds and initiated by the state treasurer shall be evidenced by those documents and advices as are used within the banking system to execute such funds transfer, and shall be accepted by the commissioner of finance and administration in lieu of deposit certifications. Such documents and advices shall be delivered directly by the state treasurer to the commissioner of finance and administration. The use of the term “banking system” in this subsection (b) shall not be construed to restrict the definition of “state depository” to any meaning other than that set forth in § 9-4-107.
History (2)
- Acts 1985, ch. 118, § 28
- 1986, ch. 923, § 4.
§ 9-4-306. Monthly reports. - (a) Each state depository where public deposits are made by the state treasurer shall transmit to the state treasurer a monthly statement of moneys received, charges assessed, interest credited and amounts paid by it on account of the state.
- (b) Each state depository where a departmental account is maintained shall transmit to the department or agency head a monthly statement of moneys received, charges assessed, interest credited and amounts paid by it.
History (1)
- Acts 1985, ch. 118, § 29.
§ 9-4-307. State depositories. - The state treasurer is authorized to open accounts in state depositories and establish procedures to be followed by each depository for the handling of state deposits.
History (1)
- Acts 1985, ch. 118, § 30.
§ 9-4-308. Transfer of funds through federal reserve banking system. - The state treasurer, in the exercise of the state treasurer's official duties, is hereby authorized to enter into agreements with any federal reserve bank as the state treasurer deems necessary or advisable, for the purpose of transferring funds through the facilities of the federal reserve banking system. Such agreements may contain terms and conditions determined by the state treasurer to be advisable, including, but not limited to, provisions relative to indemnification, hold harmless, and choice of law.
History (5)
- Acts 1977, ch. 269, § 1
- T.C.A., § 9-613
- Acts 1980, ch. 446, § 2
- T.C.A. § 9-6-115
- Acts 2020, ch. 755, § 1.
Part 4 Security § 9-4-401. Preference in insolvency. - In the liquidation of insolvent state depositories, the return of all state deposits, including funds held in trust by state officials, shall be preferred in payment.
History (1)
- Acts 1985, ch. 118, § 31.
§ 9-4-402. Reports by commissioner of financial institutions. - (a) It is the duty of the commissioner of financial institutions to advise, on a timely basis, the state treasurer and the commissioner of finance and administration of the condition of each state bank and state chartered savings and loan association, including recommendations regarding its condition and safety as a state depository.
- (b) It is the duty of the commissioner of financial institutions to make inquiry, on a timely basis, of the United States comptroller of the currency, respecting the condition and safety of each national bank as a state depository, and to advise the state treasurer and the commissioner of finance and administration of the results.
- (c) It is the duty of the commissioner of financial institutions to make inquiry, on a timely basis, of the federal deposit insurance corporation, respecting the condition and safety of each federally chartered federal savings bank as a state depository, and to advise the state treasurer and the commissioner of finance and administration of the results.
- (d) Any doubts as to the safety of any state depository shall be resolved by the state treasurer and the commissioner of finance and administration against the depository; in the event the two (2) disagree, the commissioner of financial institutions shall vote.
- (e) If determined to be necessary under subsection (d), steps toward further security or realization shall be taken in accordance with the direction of the state treasurer and the commissioner of finance and administration. Such steps may include a requirement that additional collateral be pledged or all or a portion of the state deposit may be withdrawn without penalty or forfeiture of interest.
History (1)
- Acts 1985, ch. 118, § 32.
§ 9-4-403. Giving of security. - All state funds held in state depositories shall be secured by required collateral as provided in § 9-4-404, except for funds on deposit in the name of the state with a federal reserve bank.
History (2)
- Acts 1985, ch. 118, § 33
- 2017, ch. 65, § 2.
§ 9-4-404. Valuation of eligible collateral. - (a) The state treasurer shall evaluate the market value of required collateral monthly, and more frequently if market conditions require.
- (b) Any state depository whose collateral has a market value less than one hundred five percent (105%) of the value of its state deposits, less so much of such amount as is protected by the federal deposit insurance corporation, shall provide additional collateral at the request of the state treasurer.
- (c) If within two (2) working days such additional collateral is not provided, the state treasurer shall submit to the commissioners of financial institutions and of finance and administration a written summary of the results of the market valuation of collateral for that depository, together with a summary of the deposits secured by the collateral and take such action as a majority of these three (3) officials, based upon information received pursuant to § 9-4-402, deems appropriate. Such action may include withdrawal of part or all of the state deposit in that depository without penalty or forfeiture of interest.
- (d) The state treasurer, county trustee or other public official charged with the deposit of public funds may contract for the evaluation of the market value of required collateral. Such contract may be with any person, including a financial institution or trustee custodian; provided, that such contract may not be with the depository pledging the collateral to be valued.
History (3)
- Acts 1985, ch. 118, § 34
- 1992, ch. 592, § 9
- 1994, ch. 752, § 12.
§ 9-4-405. Interest on collateral. - Prior to default, the state treasurer, county trustee or other public official charged with the deposit of public funds and the trustee custodian, if the collateral is held by a trustee custodian, is authorized to remit to the state depository any and all interest, distributions or prepayments of any kind, upon eligible collateral pledged by such depository.
History (2)
- Acts 1985, ch. 118, § 35
- 1994, ch. 752, § 13.
§ 9-4-406. Default. - (a) Default shall be deemed to occur whenever any state depository fails to return any state deposit including earned interest when due in accordance with the terms of the deposit contract.
- (b) In all other situations, as defined in § 9-4-102, where the safety or security of state deposits is in doubt, the state treasurer shall determine whether default has occurred, and the date on which it occurred, following consultation with the other members of the state funding board, the attorney general and reporter and the commissioner of financial institutions. Once the state treasurer has made such a determination, the other state officials with whom the state treasurer consulted shall be advised.
- (c) In the event of default by any state depository, the state depository shall be responsible for any loss to the state.
- (d) Such loss shall be satisfied out of collateral pledged by the state depository to whatever extent possible.
- (e) Collateral pledged in accordance with this part may be sold by the state treasurer or, at the direction of the state treasurer, by the trustee custodian or any other person, including a federal agency, holding such collateral. In the alternative, the state treasurer may choose to hold such collateral. If the state treasurer holds such collateral, loss shall be reduced by the market value of the collateral and any accrued interest thereon as of the date of default.
- (f) The attorney general and reporter is authorized to prosecute, in the name of the state, actions for recovery of any loss incurred by the state under this section.
- (g) Excess proceeds, if any, realized from the sale of collateral will be returned to the defaulting state depository or its successor.
History (1)
- Acts 1985, ch. 118, § 36.
§ 9-4-407. Safekeeping of securities. - (a) The state treasurer is expressly authorized to contract for the safekeeping and servicing of eligible collateral and/or securities owned by the Tennessee consolidated retirement system and/or other securities of which the state treasurer is the custodian.
- (b) The state treasurer is expressly authorized, if the state treasurer deems it advisable, to insure securities against theft or other loss.
- (c) All expenses incidental to the safekeeping and servicing of securities other than eligible collateral shall be paid by the state agency or the retirement system charged with the responsibility of the securities.
- (d) The state of Tennessee shall be liable to the state depository for any loss of eligible collateral arising from embezzlement and/or theft while in the possession of the state treasurer or under the state treasurer's dominion or control under this section. The state of Tennessee is not liable, however, for loss to the state depository from market fluctuations in the value of collateral or loss to such depository while the collateral is in possession of any common carrier in route to or from the state depository to or from the state treasurer.
History (1)
- Acts 1985, ch. 118, § 37.
§ 9-4-408. Trust receipts. - (a) In lieu of the actual deposit of eligible collateral under § 9-4-407, the state treasurer is authorized, at the state treasurer's option, to accept trust receipts.
- (b) Trust receipts shall be issued by trustee custodians in a form acceptable to the state treasurer following the deposit of eligible collateral with the trustee custodian by a state depository.
- (c) Eligible collateral deposited with a trustee custodian shall be subject in all respects to the claims and rights of the state to the same extent as though such collateral had been physically deposited with the state treasurer under § 9-4-407.
- (d) Each trust receipt shall be nonnegotiable and irrevocable and shall continue in full force and effect until surrendered by the issuing trustee custodian with the release of the state treasurer endorsed thereon over the state treasurer's signature or as otherwise released pursuant to subsection (g) or (h).
- (e) The state treasurer may present the trust receipt at any time to the issuing trustee custodian and upon delivery thereof shall be entitled to receive any and all collateral represented thereby from the trustee custodian, and such collateral shall thereafter be held by the state treasurer as if deposited with the state treasurer by the state depository as collateral, without further liability on the part of the trustee custodian.
- (f) Following delivery of the collateral to the state treasurer, the state treasurer is permitted to register such collateral in the name of the state and to hold it on behalf of the state depository.
- (g) The state treasurer is authorized to establish alternative procedures for the deposit and release of eligible collateral held on the state treasurer's behalf by trustee custodians pursuant to this chapter.
- (h) A county or city official charged with the deposit of public funds is authorized to contract for alternative procedures for the deposit and release of eligible collateral held on the behalf of the county or city by a trustee custodian pursuant to this chapter. The alternative procedure established may be the procedure adopted by the state treasurer in subsection (g), or must provide for a release of collateral only upon the authorization of the county or city official or a person authorized by law to act on behalf of the official. The official's authorization shall be given in writing and delivered, sent or transmitted to the trustee in any reasonable manner, including, without limitation, by means of telephonic facsimile transmission.
History (3)
- Acts 1985, ch. 118, § 38
- 1990, ch. 1043, § 2
- 1994, ch. 752, §§ 10, 11.
§ 9-4-409. Trustee custodians. - (a) When any trustee custodian holds collateral for a state depository which is related to the custodian through shared ownership or control, such collateral shall be held in a restricted account at a federal reserve bank or branch thereof or at a federal home loan bank or branch thereof.
- (b) The state treasurer is expressly authorized either in person or by agent to examine and check the collateral held by the trustee custodian and to require reasonable reports from the trustee custodian.
- (c) Neither the state nor the state treasurer is liable to the state depository for eligible collateral deposited with or held by any trustee custodian, for any loss arising from any breach of the trust or agreement or from any other cause while such eligible collateral is in the possession or custody of such trustee custodian pursuant to a trust receipt.
History (2)
- Acts 1985, ch. 118, § 39
- 1990, ch. 702, § 7.
Part 5 Collateral Pool for Public Deposits Act of 1990 § 9-4-501. Short title. - This part shall be known and may be cited as the “Collateral Pool for Public Deposits Act of 1990.”
History (1)
- Acts 1990, ch. 1043, § 1.
§ 9-4-502. Part definitions. - As used in this part, unless the context otherwise requires:
- (1) “Average daily balance” means the sum of the average daily demand deposits, the average daily time deposits, and the average daily savings deposits of public depositors held during the calendar month immediately preceding the current month;
- (2) “Average daily demand deposit” means the total by account of all public funds held on a daily basis in demand deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month. “Demand deposit account” has the meaning as defined by the board of governors of the federal reserve system, Regulation D, 12 CFR 204, as amended;
- (3)
- (A) “Average daily savings deposit” means either:
- (i) The total by account of all public funds held on a daily basis in savings deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month; or
- (ii) The sum of the amount of public funds in savings deposit accounts on the last day of the two (2) calendar months immediately preceding the current month divided by two (2);
- (B) “Savings deposit account” has the meaning as defined by the board of governors of the federal reserve system, Regulation D, 12 CFR 204, as amended;
- (4)
- (A) “Average daily time deposit” means either:
- (i) The total by account of all public funds held on a daily basis in time deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month; or
- (ii) The higher of:
- (a) The actual amount of public funds in time deposit accounts on the last day of the calendar month immediately preceding the current month; or
- (b) The sum of the amount of public funds in time deposit accounts on the last day of the two (2) calendar months immediately preceding the current month divided by two (2);
- (B) “Time deposit account” has the meaning as defined by the board of governors of the federal reserve system, Regulation D, 12 CFR 204, as amended;
- (5) “Average monthly balance” means the average monthly balance of public deposits held by the depository during any twelve (12) calendar months. The average monthly balance of the previous twelve (12) calendar months must be determined by adding the average daily balance for the calendar month immediately preceding the current month and the average daily balances for the eleven (11) months preceding that month and dividing the total by twelve (12). Notwithstanding this subdivision (5) or any other law to the contrary, the average monthly balance shall not exceed one hundred ten percent (110%) of the average daily balance as such term is defined in subdivision (1);
- (6) “Board” means the collateral pool board created pursuant to § 9-4-506;
- (7) “Collateral-pledging level,” for a qualified public depository, means that level of collateral determined to be required to be pledged by the collateral pool board;
- (8) “Collateral pool” means an arrangement whereby the repayment of public deposits deposited with any qualified public depository is secured through the sum total of eligible collateral pledged by all qualified public depositories, and contingent liability agreements as provided by the collateral pool board;
- (9) “Default” may include, but is not limited to:
- (A) The failure of any qualified public depository to return any public deposit, including earned interest in accordance with the terms of the deposit contract;
- (B) The failure of any qualified public depository to pay any properly payable check, draft or warrant drawn by the public depositor;
- (C) The failure of any qualified public depository to honor any valid request for electronic transfer of funds;
- (D) The failure of any qualified public depository to account for any check, draft, warrant, order, deposit certificate or money entrusted to it;
- (E) The issuance of any order of any court or the taking of any formal action by any supervisory authority, which has the effect of restraining a qualified public depository from making payments of deposit liabilities;
- (F) The appointment of a conservator or receiver for a qualified public depository;
- (G) Failure to provide the required collateral as established by the board; or
- (H) Any other action which the state treasurer determines to place public deposits in jeopardy;
- (10) “Deposit insurance” means the insurance provided by the federal deposit insurance corporation;
- (11) “Depository pledge agreement” means the contract between the state treasurer, a qualified public depository, and a trustee custodian providing for the pledge and deposit of collateral, and other provisions determined by the state treasurer;
- (12) “Eligible collateral” has the meaning set forth in § 9-4-103;
- (13) “Loss” includes, but is not limited to:
- (A) The principal amount of the public deposit;
- (B) All accrued interest through the date of default;
- (C) Additional interest at the rate the public deposit was earning on the total of subdivisions (13)(A) and (B) through the day of payment by a liquidator or other third party or through the date of sale of eligible collateral by the state treasurer or the state treasurer's agent; and
- (D) Attorney's fees incurred in recovering public deposits;
- (14) “Public deposit” means funds in which the entire beneficial interest is owned by a public depositor or funds held in the name of a public official of a public depositor charged with the duty to receive or administer funds and acting in such official's official capacity;
- (15) “Public deposit security trust fund” or the “fund” means the fund created pursuant to § 9-4-514;
- (16) “Public depositor” means the state of Tennessee, or any of its agencies, or any Tennessee county, Tennessee incorporated municipality and their political subdivisions, or any utility district organized under the laws of the state or any interstate compact to which the state is a party;
- (17)
- (A) “Public depository” means:
- (i) Any savings and loan association, or savings bank (collectively referred to as savings institutions), or any bank chartered by the state of Tennessee;
- (ii) Any national bank or federal savings institution that has its main office located in this state; or
- (iii) Any national or state bank, or any federal or state savings institution that has its main office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits; and
- which has been appropriately designated to hold public deposits by a public depositor;
- (B) Notwithstanding any other law to the contrary, an automated teller machine or such other similar type receptacle or device shall not be considered a branch for purposes of this subdivision (17);
- (C) A bank or savings institution located outside this state desiring to be designated as a qualified public depository must agree that this chapter shall govern in determining its rights and responsibilities as a qualified public depository, and must agree to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter;
- (18) “Qualified public depository” means any public depository that meets all of the requirements of this part and that has been authorized by the board to secure public deposits through the collateral pool;
- (19) “Required collateral” of a qualified public depository means eligible collateral, excluding accrued interest, having a market value equal to or in excess of the greater of the average daily balance or average monthly balance of public deposits multiplied by the qualified public depository's collateral-pledging level as determined by the board; and
- (20) “Trustee custodian” means a financial institution designated to hold eligible collateral on behalf of the state treasurer and a qualified public depository pursuant to § 9-4-108.
History (5)
- Acts 1990, ch. 1043, § 1
- 1992, ch. 592, §§ 10-12
- 1996, ch. 621, §§ 2-6
- 1997, ch. 217, § 16
- 2004, ch. 454, § 1.
§ 9-4-503. Application for participation in collateral pool. - (a) Any public depository which holds public deposits may apply to the board for permission to participate in the collateral pool to secure all public deposits at such public depository.
- (b) An application submitted pursuant to this part is subject to the approval of the board. The board shall set the number of votes required for the approval of such applications.
- (c) The board may require such information regarding the financial condition of the public depository as the board deems necessary for determining the suitability of that depository to participate in the collateral pool. Prior to participation in the collateral pool, a qualified public depository shall execute a depository pledge agreement.
History (2)
- Acts 1990, ch. 1043, § 1
- 1996, ch. 621, §§ 7, 8.
§ 9-4-504. Collateral for public deposits. - (a) Every qualified public depository shall deposit with the state treasurer eligible collateral equal to or in excess of the required collateral of the depository. Each qualified public depository shall calculate monthly the amount of its required collateral based upon notice of its collateral-pledging level from the board.
- (b) A qualified public depository shall maintain required collateral to secure public deposits. A qualified public depository which accepts any public deposit that would increase its required collateral by twenty-five percent (25%) shall deposit additional eligible collateral to secure such increase within two (2) business days of the deposit.
- (c) Upon approval to participate in the collateral pool, a qualified public depository may secure public deposits through the collateral pool.
- (d) A qualified public depository shall notify its public depositors that all their public deposits are secured through the collateral pool as provided in this part. The notification shall be made at the time the public depository is admitted to the collateral pool or when an account is established by a public depositor with the qualified public depository. A qualified public depository must notify its public depositors of any change in the manner collateral is held. Notice to public depositors under this part shall constitute the mailing of the appropriate information to the individual indicated on the account authorization.
- (e) A qualified public depository shall carry in its accounting records a general ledger or other appropriate account of all public deposits to be secured through the collateral pool and the total value of eligible collateral pledged to secure such deposits.
- (f)
- (1) A qualified public depository may accept deposits, investments or deposits for placement as provided in § 9-1-118, and may act as custodian of other evidences of the deposits by the public entity.
- (2) Deposits placed in federally insured institutions, in amounts that are fully insured and that are not liabilities of the qualified public depository, are not included in the term average daily balance, as provided in § 9-4-502. However, any funds accepted for deposit or placement that are not placed in federally insured institutions shall be included in the term average daily balance and collateralized as provided in this section.
- (g) [Deleted by 2021 amendment.]
- (h) [Repealed effective December 31, 2026.] Notwithstanding any law or rule to the contrary, a qualified public depository meeting the board-established criteria to pledge collateral equal to one hundred percent (100%) is authorized to pledge collateral equal to ninety percent (90%) of the public deposits held by the depository on or after November 12, 2021. This subsection (h) is repealed on December 31, 2026.
History (6)
- Acts 1990, ch. 1043, § 1
- 1996, ch. 621, § 9
- 2005, ch. 432, § 2
- 2012, ch. 544, § 5
- 2021, ch. 393, § 1
- 2021 (3rd Ex. Sess.), ch. 2, § 2.
§ 9-4-505. Trustee custodians. - (a) Upon being designated as a qualified public depository, the qualified public depository shall select one (1) or more trustee custodians for the deposit of eligible collateral by the qualified public depository.
- (b) Designation of trustee custodians shall be made in accordance with § 9-4-108.
- (c) Sections 9-4-408 and 9-4-409 shall apply to trustee custodians designated under this part.
- (d) Trustee custodians shall submit a report quarterly to the state treasurer providing a description of eligible collateral deposited by the qualified public depository and the current par value of eligible collateral, as well as other reasonable reports requested by the state treasurer.
- (e) Neither the state, the state treasurer, nor the collateral pool shall be liable to either the qualified public depository or the public depositors for eligible collateral deposited with or held by any trustee custodian for any loss arising from any breach of the trust or from any other cause whatsoever.
History (2)
- Acts 1990, ch. 1043, § 1
- 2021 (3rd Ex. Sess.), ch. 2, § 3.
§ 9-4-506. Creation of collateral pool board — Members. - (a)
- (1) There is hereby created a collateral pool board composed of seven (7) members as follows:
- (A) The commissioner of financial institutions;
- (B) The state treasurer;
- (C) One (1) representative of banks and savings institutions with assets of five hundred million dollars ($500,000,000) or more appointed by the state treasurer, who may be selected from lists of qualified persons submitted by interested banking groups including, but not limited to, the Tennessee Bankers Association board of directors;
- (D) One (1) representative of banks and savings institutions with assets of less than five hundred million dollars ($500,000,000) appointed by the state treasurer, who may be selected from lists of qualified persons submitted by interested banking groups including, but not limited to, the Tennessee Bankers Association board of directors;
- (E) Two (2) representatives of banks and savings institutions at-large appointed by the state treasurer, who may be selected from lists of qualified persons submitted by interested banking groups, including, but not limited to, the Tennessee Bankers Association board of directors; and
- (F) One (1) representative of local governments who shall have at least two (2) years experience in the field of finance. The local government representative shall be appointed by the state treasurer for a two-year term. The state treasurer may select the local government representative from lists of qualified persons submitted by interested county and municipal organizations including, but not limited to, the Tennessee County Services Association, the Tennessee Municipal League and the Tennessee County Officials Association.
- (2) The state treasurer shall consult with interested groups including, but not limited to, the organizations listed in subdivision (a)(1) to determine qualified persons to fill positions on the board.
- (b)
- (1) The members shall be appointed for two-year terms. Any member is eligible for reappointment and shall serve until a successor qualifies.
- (2) The board shall annually elect from its membership a chair and a vice chair and shall designate a secretary who need not be a member of the board. The secretary shall keep a record of the proceedings of the board and is the custodian of all printed materials filed with or by the board.
- (3) Notwithstanding the existence of vacancies on the board, a majority of the members constitutes a quorum and the board may not take official action in the absence of a quorum. The board shall convene as needed.
- (c) If a vacancy occurs in the position of any appointed member, a new member shall be appointed in the same manner as such member's predecessor for the remainder of the unexpired term.
- (d) A member of the board shall receive no compensation for service on the board, but a member of the board shall be reimbursed for the member's travel expenses in accordance with the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general and reporter.
- (e) The secretary of the board shall notify the executive directors of the Tennessee Municipal League, the Tennessee County Officials Association and the Tennessee County Services Association of each meeting of the board. Any documents given in advance of the meeting to board members shall also be supplied to such directors prior to the meeting. The respective directors of the Tennessee Municipal League, the Tennessee County Officials Association and the Tennessee County Services Association may designate another individual to receive the notice and materials required in this subsection (e) in lieu of such director. Failure to provide the notice or materials to such directors or designees shall not invalidate any action taken by the board at the meeting.
- (f) The board is attached for administrative purposes to the department of the treasury.
- (g) In making appointments to the collateral pool board, the state treasurer shall strive to ensure that at least one (1) person serving on the board is sixty (60) years of age or older or is female and that at least one (1) person serving on the board is a member of a racial minority.
History (6)
- Acts 1990, ch. 1043, § 1
- 1992, ch. 592, §§ 13, 14
- 1996, ch. 621, § 10
- 2001, ch. 33, §§ 4, 5, 7
- 2009, ch. 558, § 3
- 2013, ch. 54, § 3.
§ 9-4-508. Collateral pool boards — Powers and duties. - The collateral pool board has the following powers, together with all powers incidental thereto or necessary for the performance of those hereinafter stated:
- (1) The board may establish criteria, as may be necessary, to:
- (A) Approve entry into the collateral pool by a public depository;
- (B) Order discontinuance of participation in the program by a qualified public depository;
- (C) Restrict the total amount of public deposits held by a public depository that is subject to the authority of the board;
- (D) Establish collateral-pledging levels based on qualitative and quantitative standards as well as the number of participating qualified public depositories and the financial performance of such participants; and
- (E) Suspend or disqualify, or disqualify after suspension, any qualified public depository that has violated this part or rules adopted under this part. Any public depository that is suspended or disqualified pursuant to this subdivision (1) is subject to § 9-4-517 governing withdrawal from the public deposit security program and return of pledged collateral;
- (2) If the board has reason to believe that any qualified public depository or any other financial institution subject to the authority of the board is or has been violating this part or rules adopted under this part, it may issue to the qualified public depository or other financial institution an order to cease and desist from the violation or to correct the condition giving rise to or resulting from the violation. The board may suspend or disqualify any qualified public depository for violation of any order issued pursuant to this subdivision (2);
- (3) The board may establish a minimum amount of required collateral to provide for the contingent liability;
- (4) The board may establish a process by which to determine, to the greatest extent practicable, that a qualified public depository is securing all its public deposits through the collateral pool;
- (5) The board may review administration of the pool by the state treasurer and prepare an annual report on the condition of the pool;
- (6) The board may, at its discretion, require every qualified public depository to pay on a periodic basis an operating fee as may be set by the board. In determining whether to set a fee and the amount to be paid, the board may consider any matter which, in its discretion, it deems relevant including, but not limited to, the number of participating qualified public depositories and the financial performance of such participants;
- (7) The board, upon six (6) affirmative votes, may:
- (A) Promulgate reasonable and substantive procedural rules as are necessary to carry out the purpose and intent of this part, including, but not limited to, an increase or decrease in collateral pledge levels, except as provided in this part. Such rules must be adopted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;
- (B) Admit public depositories for participation in the collateral pool;
- (C) Delegate the board's duties to the state treasurer as the board deems appropriate. In exercising such delegation, the state treasurer is authorized to exercise such powers as are vested in the board that are necessary to fulfill the delegated duties and responsibilities, and may assign any such duties and responsibilities to the state treasurer's staff as the state treasurer deems necessary and proper; and
- (D) Revise the benchmark levels to be less stringent upon applicants;
- (8) The board may delegate any of its powers conferred in this section to the state treasurer;
- (9) The board may purchase insurance from insurers licensed to do business in this state for the purpose of providing coverage against loss caused by the default or insolvency of qualified public depositories. Any loss may be satisfied from such insurance prior to the assessment against qualified public depositories as provided in § 9-4-512(3); and
- (10) In exigent circumstances, and notwithstanding any law to the contrary, including § 9-4-509 and the Uniform Administrative Procedures Act, the board may make temporary changes to the required collateral and collateral pledge levels contained in the board's rules, including, but not limited to, the qualitative and quantitative standards for determining collateral pledge levels and the admission criteria; provided, that the following conditions are met and the substance of the changes are not otherwise inconsistent with applicable law:
- (A) The changes to the required collateral and collateral pledge levels must be approved by six (6) affirmative votes of the board and in a board meeting that complies with title 8, chapter 44, part 1;
- (B) In addition to providing a public meeting notice and board agenda, the board shall also provide the following to members of the public and other interested parties:
- (i) The specific changes to be contemplated by the board;
- (ii) The reasons for the changes;
- (iii) The effective date and expiration date of the changes; and
- (iv) The opportunity for members of the public and other interested parties to submit comments to the changes in advance of the meeting that must be addressed by the board during the board meeting and included in the minutes of the meeting;
- (C) The board shall make a determination, to be included in the minutes of the meeting, that exigent circumstances exist to necessitate a change in the required collateral or collateral pledge levels; and
- (D) The changes approved by the board must be made on a defined temporary basis. Once the changes expire, the required collateral and collateral pledge levels, including, but not limited to, the qualitative and quantitative standards for collateral pledge levels, and the admission criteria, must revert to the standards contained in the board's rules.
History (5)
- Acts 1990, ch. 1043, § 1
- 1992, ch. 592, §§ 17-20, 24
- 1996, ch. 621, § 11
- 1997, ch. 217, §§ 4, 7
- 2022, ch. 1066, §§ 7, 8.
§ 9-4-511. State treasurer — Powers. - In fulfilling the requirements of this part, the state treasurer has the power to:
- (1) Require such collateral, or increase the collateral-pledging level, of any qualified public depository as may be necessary to administer this part and to protect the integrity of the collateral pool as directed by the board;
- (2) Decline to accept, or reduce the reported value of, collateral as circumstances may require in order to ensure the pledging of sufficient marketable collateral to meet the purposes of this part;
- (3) Verify the reports of any qualified public depository relating to public deposits it holds when necessary to protect the integrity of the collateral pool;
- (4) Sell pledged securities, or move pledged securities to an account established in the state treasurer's name, for the purpose of paying losses to public depositors not covered by deposit insurance or to perfect the state treasurer's interest in the pledged securities;
- (5) Transfer funds directly from the trustee custodian to public depositors or the receiver in order to facilitate prompt payment of claims;
- (6) Provide data as may be necessary to assist the board in developing standards and criteria for the program;
- (7) Review, implement, monitor, evaluate and modify, as needed, all or any part of the standards and policies recommended by the board;
- (8) Confirm public deposits, to the extent possible under current law, when needed;
- (9) Monitor and confirm, as often as deemed necessary by the state treasurer, the pledged collateral held by trustee custodians;
- (10) Audit or verify the reports required under this part or under rules adopted under this part;
- (11) Maintain perpetual inventory of pledged collateral and perform monthly market valuations and quality ratings;
- (12) Perform financial analysis of all qualified public depositories; and
- (13) Perfect interest in pledged collateral by having pledged securities moved into an account established in the state treasurer's name. This action shall be taken at the discretion of the state treasurer.
History (3)
- Acts 1990, ch. 1043, § 1
- 1992, ch. 592, §§ 21, 22, 25
- 1996, ch. 621, § 13.
§ 9-4-512. Payment of losses — Procedure. - When the state treasurer determines that a default or insolvency has occurred, the state treasurer shall provide notice as required in § 9-4-513 and implement the following procedures:
- (1) The state treasurer, in cooperation with the commissioner of financial institutions, the appropriate federal regulator, or the conservator or receiver of the qualified public depository in default, shall ascertain the amount of funds of each public depositor on deposit at such depository, the amount of deposit insurance applicable to such deposits and the amount of such deposits which will not be covered through the sale or use of eligible collateral pledged by the defaulting depository;
- (2) Upon ascertaining the amount of such deposits which will not be covered through any applicable deposit insurance or eligible collateral pledged by the defaulting depository, the state treasurer shall as promptly as possible provide coverage of the remaining loss by assessment against the other qualified public depositories. Such assessment shall be determined by multiplying the total amount of the loss to all public depositors by a percentage which represents the average share of public fund deposits held by that depository during the previous twelve (12) months divided by the average total public deposits held by all depositories during the same twelve-month period, excluding the public deposits of the defaulting depository;
- (3) Each qualified public depository shall pay its assessment to the state treasurer within five (5) business days after it receives notice of the assessment. If a depository fails to pay its assessment when due, the state treasurer shall satisfy the assessment by selling or using the eligible collateral pledged by that depository; and
- (4) Public depositors receiving payment under this section shall assign to the state treasurer any interest they may have in funds that may subsequently be made available to the qualified public depository in default. If the qualified public depository in default or its receiver provides the funds to the state treasurer, the state treasurer shall distribute the funds, plus all accrued interest which has accumulated from the investment of the funds, if any, to the depositories which paid assessments on the same pro rata basis as the assessments were paid.
History (4)
- Acts 1990, ch. 1043, § 1
- 1996, ch. 621, § 14
- 1997, ch. 217, § 17
- 2021 (3rd Ex. Sess.), ch. 2, §§ 4-6.
§ 9-4-513. Notice to claimants. - (a) Within thirty (30) days after the date of default or insolvency of a qualified public depository, the state treasurer shall publish or cause to be published notice of such default or insolvency once a week for two (2) consecutive weeks in a newspaper of general circulation in each grand division and in the Tennessee Administrative Register. The notice shall direct all public depositors who sustained a loss occasioned by the default or insolvency that was not satisfied pursuant to § 9-4-512 to file their claims with the state treasurer within ninety (90) days after the date of the first publication of the notice.
- (b) No claim made pursuant to subsection (a) shall be binding on the pool or the qualified public depositories unless presented within ninety (90) days after the date of the first publication of the notice. Further, no such claim shall be binding on the pool or the qualified public depositories if the loss was occasioned by the public depositor's failure to comply with the requirements of § 9-4-519(a)(1). This subsection (b) does not affect any proceeding to:
- (1) Enforce any real property mortgage, chattel mortgage, security interest, or other lien on property of a qualified public depository that is in default or insolvency; or
- (2) Establish liability of a qualified public depository that is in default or insolvency to the limits of any federal or other casualty insurance protection.
History (2)
- Acts 1990, ch. 1043, § 1
- 1997, ch. 217, § 18.
§ 9-4-514. Public deposit security trust fund. - (a) In order to facilitate the administration of this part, there is created the “public deposit security trust fund,” hereafter in this section designated the “fund.” The fund must be composed of eligible collateral pledged from any defaulting institution, proceeds from the sale or use of the eligible collateral, or from any assessment.
- (b) The state treasurer is authorized to pay any loss to public depositors from the fund, and there are hereby appropriated from the fund such sums as may be necessary from time to time to pay the losses.
- (c) Any money in the fund estimated not to be needed for immediate cash requirements shall be invested pursuant to § 9-4-603.
History (2)
- Acts 1990, ch. 1043, § 1
- 2021 (3rd Ex. Sess.), ch. 2, § 7.
§ 9-4-515. Effect of merger or acquisition — Change of name or address. - (a) In the event a qualified public depository not in default is merged into, acquired by, or consolidated with a bank or savings institution that is not a qualified public depository, the resulting institution shall become a qualified public depository, and the contingent liability of the former institution shall be a liability of the resulting institution. Within thirty (30) days after the effective date of the merger, acquisition or consolidation, the resulting institution shall execute in its own name and deliver to the state treasurer the contingent liability agreement required by § 9-4-510. If the resulting institution chooses not to remain a qualified public depository, it shall comply with the procedures for withdrawal from the collateral pool as provided in § 9-4-516.
- (b) The qualified public depository shall notify the state treasurer of any acquisition or merger within three (3) days after the final approval of the acquisition or merger by its appropriate regulator.
- (c) Collateral subject to a depository pledge agreement may not be released by the state treasurer or the custodian until the assumed liability is evidenced by the deposit of collateral pursuant to the depository pledge agreement of the successor entity. The reporting requirement and pledge of collateral will remain in force until the state treasurer determines that the liability no longer exists. The surviving or new qualified public depository shall be responsible and liable for all of the liabilities and obligations of each qualified public depository merged with or acquired by it.
- (d) Each qualified public depository shall report any change of name and address to the state treasurer on a form provided by the state treasurer, regardless of whether the name change is a result of an acquisition or merger. Notification must be made within three (3) days of such change.
History (1)
- Acts 1990, ch. 1043, § 1.
§ 9-4-516. Voluntary withdrawal from collateral pool. - (a) A qualified public depository may withdraw from the collateral pool by giving written notice to the state treasurer and to the public depositors having public deposits at the qualified public depository.
- (b) Notice of withdrawal shall be mailed or delivered in sufficient time to be received by the state treasurer and by the public depositors at least one hundred eighty (180) days before the effective date of withdrawal. The state treasurer shall timely publish the withdrawal notice in the Tennessee Administrative Register which shall constitute notice to all depositors. On the effective date of withdrawal, the state treasurer is authorized to transfer eligible collateral as jointly directed by the public depository and public depositors to ensure that public depositors are adequately collateralized individually.
- (c) The contingent liability for any loss prior to the effective date of withdrawal of the depository withdrawing from the collateral pool shall continue after the effective date of the withdrawal. The board may establish minimum collateral and reporting requirements sufficient to meet the needs to satisfy any potential contingent liability of a withdrawing qualified public depository.
History (1)
- Acts 1990, ch. 1043, § 1.
§ 9-4-517. Mandatory withdrawal from collateral pool. - (a) A qualified public depository is required to withdraw upon a majority vote of the board. The board may vote to require a qualified public depository to withdraw upon a default by the qualified public depository, or upon the failure of the qualified public depository to meet the eligibility or pledging criteria established by the board. The board shall establish an effective date for such withdrawal.
- (b) The state treasurer shall notify the qualified public depository of the effective date of the withdrawal not less than thirty (30) days prior to such effective date. Within ten (10) business days after receipt of such notification, the qualified public depository must notify the public depositors having public deposits at the qualified public depository of the effective date of the withdrawal. On the effective date of withdrawal, the state treasurer is authorized to transfer eligible collateral as jointly directed by the public depository and public depositors to ensure that public depositors are adequately collateralized individually.
- (c) The contingent liability for any loss prior to the effective date of withdrawal of the depository withdrawing from the collateral pool shall continue after the effective date of the withdrawal. The board may establish minimum collateral and reporting requirements sufficient to meet the needs to satisfy any potential contingent liability of a withdrawing qualified public depository.
History (1)
- Acts 1990, ch. 1043, § 1.
§ 9-4-518. Reports of qualified public depositories. - (a) Within fifteen (15) days after the end of each calendar month, or when requested by the state treasurer, each qualified public depository shall submit to the state treasurer a written report, under oath, indicating the average daily balance of all secured public deposits held by it during the month, the average monthly balance of all public deposits held for the previous twelve (12) calendar months, and any other information that the state treasurer determines necessary to administer this part.
- (b) In addition to the report required in subsection (a), each qualified public depository shall submit to the state treasurer:
- (1) If requested by the board or the state treasurer, a copy of the quarterly report of condition required by the Federal Deposit Insurance Act (12 U.S.C. § 1817 et seq.), if such depository is a bank;
- (2) A schedule of financial information as determined by the board taken from the quarterly report on condition required by the Federal Deposit Insurance Act, if such depository is a bank;
- (3) If requested by the board or the state treasurer, a copy of the monthly and quarterly reports required to be filed with the office of thrift supervision, or such other federal regulator by whatever name called, if such depository is a savings institution; and
- (4) A schedule of financial information as determined by the board taken from the monthly and quarterly reports required to be filed with the office of thrift supervision, or such other federal regulator by whatever name called, if such depository is a savings institution.
- (c) In addition to the requirements of subsection (a), the following forms shall be made under oath:
- (1) The contingent liability agreement;
- (2) The depository pledge agreement; and
- (3) The public depository change of name, address and charter of institution.
- (d) Any information contained in a report by a qualified public depository required under this part or any rule adopted under this part, which is confidential by any law of the United States or of this state, shall be considered confidential and not subject to dissemination to anyone other than the state treasurer and the board under this part, and the comptroller of the treasury, or the comptroller of the treasury's designated representatives, for purposes of audit. The confidentiality of such information shall be maintained by the comptroller of the treasury in the same manner as the comptroller maintains the confidentiality of working papers which are not subject to § 10-7-503. It is the responsibility of each qualified public depository from which information is required to inform the state treasurer of information that is confidential, and the state treasurer does not have a duty to inquire into whether information is confidential.
- (e) Section 10-7-503 shall not apply to information deemed confidential as provided in subsection (d). All meetings of the board wherein such information is discussed shall be exempt from title 8, chapter 44.
History (4)
- Acts 1990, ch. 1043, § 1
- 1991, ch. 438, § 1
- 1997, ch. 217, § 5
- 2003, ch. 38, § 1.
§ 9-4-519. Requirements for public depositors. - (a) Public depositors shall comply with the following requirements:
- (1) A public depositor shall ensure that the name of the public depositor is on the account or certificate provided to the public depositor by the qualified public depository in a manner sufficient to disclose the identity of the public depositor; and
- (2) A public depositor who sustained a loss occasioned by a default or insolvency of a qualified public depository that was not satisfied pursuant to § 9-4-512 shall notify the state treasurer of that fact within three (3) business days after receiving actual notice of the default from publications made pursuant to § 9-4-513(a).
- (b) If a public depositor does not comply with subdivision (a)(1), the pool shall not be liable for the loss incurred to that particular account created by the public depositor. The waiver of immunity provided in § 9-4-520 shall be ineffective as to that public depositor for such account.
History (3)
- Acts 1990, ch. 1043, § 1
- 1991, ch. 438, § 2
- 1997, ch. 217, § 6.
§ 9-4-522. Deposits of funds — Operating expenses. - Any fees collected under this part shall be paid into the treasury of the state, and the same are hereby appropriated exclusively to the department of the treasury to be used in carrying out this part.
History (1)
- Acts 1990, ch. 1043, § 1.
§ 9-4-523. State treasurer empowered to act as successor pledgee. - (a) At such time as a public depository joins the collateral pool, the state treasurer is empowered to assume responsibility as successor pledgee of any and all collateral pledged on or after July 1, 1992, to individual public depositors by that public depository. The state treasurer is further empowered to assume responsibility as successor pledgee of any and all collateral pledged prior to July 1, 1992, to individual public depositors by such public depository, upon the written consent of the public depositors.
- (b) Upon assuming responsibility as successor pledgee as provided in subsection (a), the state treasurer is empowered to sign such documents on behalf of individual public depositors as may be required by a trustee custodian.
History (2)
- Acts 1990, ch. 1043, § 1
- 1992, ch. 592, § 23.
Part 6 Disbursement and Investment of State Funds § 9-4-601. Disbursements, investments and transfers of funds, generally. - (a)
- (1) No money shall be drawn from the state treasury except in accordance with appropriations duly authorized by law. Every disbursement from the state treasury, except as hereinafter provided, shall be upon the authorization of the commissioner of finance and administration, which authorization shall be in the form of a warrant, drawn in favor of the payee, and the warrant shall, upon being signed by the commissioner and delivered to the payee, become a draft on the treasury of the state. Electronic transfer of funds, in lieu of a warrant, may be utilized when such use is deemed by the commissioner and the state treasurer to be in the best interest of the state. When this method of disbursement is utilized, the commissioner shall authorize such transfer in writing, and the state treasurer shall accept such written advice in lieu of a warrant.
- (2) Notwithstanding title 66, chapter 29, warrants, drafts, and checks drawn on the state treasury that have not been redeemed within twelve (12) months of issue date shall be cancelled and written off the state's books, with the funds reverting to the fund of issue. Subsequent claims by the payee of said instruments shall be honored upon receipt of documentation to substantiate the claim. The commissioner of finance and administration and the state treasurer shall ensure the state's compliance with the unclaimed property law.
- (b) The commissioner may, with the approval of the state treasurer and the comptroller of the treasury, authorize warrants as set forth in subsection (a) to be issued on the commissioner's behalf by another state official or by a third party pursuant to contract with the state. In exercising discretion pursuant to this subsection (b), the commissioner shall set out in writing such commissioner's authorization and the limitations and restrictions upon that authorization.
- (c) All state money in any depository of the state government shall stand on the books of the depository to the credit of the state treasurer. Transfer of funds between depositories, in order to facilitate a concentration of funds for immediate investment, or payment of state obligations pursuant to subsection (a), shall be made by electronic transfer of funds or in accordance with such other procedures authorized by the state treasurer and approved by the commissioner and the comptroller of the treasury.
- (d) The state treasurer is specifically authorized to purchase investments which are otherwise authorized by law or by authority delegated to the state treasurer pursuant to § 9-4-602 by electronic transfer of funds or in accordance with such other procedures authorized by the state treasurer and approved by the commissioner and the comptroller of the treasury.
- (e) Whenever electronic transfer of funds is used for the purpose authorized by this section, such electronic funds transfer shall be made through the federal reserve system upon instructions of the state treasurer confirmed by written documentation, or by magnetic tape, disc or other medium designed for electronic communication. Copies of such written documentation or electronic communication shall be furnished immediately to the commissioner and shall contain a full description of the transaction in a form acceptable to the commissioner.
History (3)
- Acts 1985, ch. 118, § 41
- 1986, ch. 551, § 1
- 2013, ch. 454, § 30.
§ 9-4-602. Investment of state funds. - (a)
- (1)
- (A) It is the policy of the state of Tennessee that all funds in the state treasury shall be invested by the state treasurer to the extent practicable.
- (B)
- (i) Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following:
- (a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies;
- (b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations;
- (c) Repurchase agreements for obligations of the United States or its agencies;
- (d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107; provided, that certificates of deposit are collateralized in accordance with § 9-4-403;
- (e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services;
- (f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and
- (g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)(g), if “eligible collateral” is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)(g).
- (ii) Investment in the instruments authorized in subdivisions (a)(1)(B)(i)(e)-(g) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)(e)-(g).
- (C) Included within the policy guidelines approved by the funding board shall be the procedure for determining the interest rate to be paid on investments of the treasury. Each time interest rates are changed, pursuant to the policy, the state treasurer shall report the change to the other members of the funding board.
- (2) In lieu of actual physical delivery of investments purchased pursuant to this section, the state treasurer may accept trust receipts therefor as provided in § 9-4-408.
- (b)
- (1) In addition to the authority granted in subsection (a), the state funding board may, by resolution duly adopted, authorize the state treasurer to invest so much cash in the state treasury as it may deem appropriate in obligations of the state or any agency of the state maturing in not more than one (1) year from the date of such investment; provided, that the funding board has determined that such obligations could not otherwise be sold in traditional markets at reasonable rates of interest; and provided further, that the yield on such obligations is equal to or greater than, in the determination of the funding board with the concurrence of the state treasurer, the yield of other obligations in which the state could invest at that time under subsection (a). The funding board may, by resolution, establish guidelines and, within such guidelines, delegate the investment authority hereby conferred to the state treasurer. Such obligations, when so purchased, shall be turned over to the state treasurer, whose official bond shall be security for the safekeeping of such obligations. In lieu of actual physical delivery of such obligations so purchased, the state treasurer may accept trust receipts as provided in § 9-4-408.
- (2) The funding board and the governing boards of the respective state agencies may authorize the sale of obligations of the state and state agencies, respectively, to the state pursuant to the terms and conditions set forth in this section.
- (c)
- (1) The state funding board is authorized to establish policy and procedure for investment of bond proceeds, as defined in subdivision (c)(2), in guaranteed investment contracts, including security requirements, if any. Prior to the adoption or promulgation by the state funding board of such policy and procedures, the entities listed in this subsection (c) may enter into such investments to the extent otherwise authorized by law. Nothing in this subsection (c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for an investment entered into prior to the adoption or promulgation by the state funding board of such policies and procedures.
- (2) “Bond proceeds” means the proceeds from the sale of bonds, notes, and other obligations issued by the state funding board, the state school bond authority, the local development authority, state housing development agency and the state veterans' homes board, and reserves and funds maintained for debt service purposes.
- (3) A guaranteed investment contract is an authorized investment for bond proceeds if the guaranteed investment contract:
- (A) Has a defined termination date no later than five and one-half (5 ½) years from the date of issuance of the debt obligations, except for funds held in a debt service reserve fund, which shall be no later than the final maturity of the debt obligations; and
- (B) Complies with standards in the policy established by the state funding board, including creditworthiness.
- (4) The governing body of the entity shall, in the resolution or action authorizing the issuance of bonds, expressly authorize guaranteed investment contracts as an eligible investment.
- (d) In addition to the authority granted in subsection (a), the state funding board may, in accordance with policy guidelines approved by resolution of the board and duly acknowledged by the finance, ways and means committees of the house of representatives and the senate, authorize the state treasurer to enter into short-term arrangements or obligations not authorized elsewhere in this section for the sole purpose of meeting the liquidity needs of the pooled investment fund. The state treasurer shall report any such arrangements to the finance, ways and means committees of the house of representatives and the senate. Such arrangements or obligations shall not be used for the purposes of speculation, but shall only be used to meet operational liquidity requirements.
History (8)
- Acts 1985, ch. 118, § 42
- 1988, ch. 602, § 1
- 1989, ch. 448, §§ 1-3
- 1990, ch. 702, § 3
- 1996, ch. 621, §§ 16, 17
- 2003, ch. 204, § 1
- 2009, ch. 294, § 1
- 2021 (3rd Ex. Sess.), ch. 2, § 8.
§ 9-4-603. Pooled investment fund. - (a) There is hereby established the “pooled investment fund” for the purpose of receiving and investing any money in the custody of any officer or officers of the state unless prohibited by statute to be invested.
- (b) Participants in the fund under this section shall be deemed to be the general fund of the state and any department or agency of the state which is required by court order, contract, state or federal law or federal regulation to receive interest on invested funds and which are authorized by the state treasurer to participate in the fund.
- (c) The state treasurer shall administer the pooled investment fund on behalf of the participants in accordance with § 9-4-602 and shall have the authority to establish accounts and different classes of shares within the fund.
- (d) All investments purchased belong jointly to the participants in the fund and the participants will share capital gains, income, and losses pro rata.
- (e) The state shall keep a separate account, designated by name and number of each participant. Individual transactions and totals of all investments belonging to each participant shall be recorded in the accounts.
- (f) The state shall report monthly to every participant having a beneficial interest in the pooled investment fund. The report shall show the changes in investments made during the preceding month.
- (g) The state treasurer shall establish a revolving account, under the state treasurer's custody, to defray administrative costs of the pooled investment fund. The state treasurer may deduct from each participant's pro rata earnings through the fund a reasonable charge for administering the fund. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account.
- (h) As the administrator of the pooled investment fund, the state treasurer is authorized to receive, invest and distribute a participant's funds by means of an electronic transfer or other reasonable methods. The state funding board may establish limits, restrictions or conditions on the acceptance of moneys into the fund and the withdrawal of moneys from the fund.
- (i) At any time, a participant in the fund may request the return of its principal investment or investment income or both; however, a redemption of shares does not guarantee that a participant will receive the entire amount of the principal investment or investment income or both.
History (3)
- Acts 1985, ch. 118, § 43
- 2002, ch. 514, §§ 3, 4
- 2013, ch. 208, §§ 1-3.
§ 9-4-604. Payments to debtor of state. - No person shall draw any money from the public treasury until all debts, dues, and demands owing by such person to the state are first liquidated and paid off. The commissioner of finance and administration shall not issue any warrant upon the treasury in favor of a person in default until all of such person's arrearages to the treasury are audited and paid, otherwise than by allowing such defaulter or delinquent credits on the amounts of such person's delinquencies for such sum or sums as may at any time be due and owing to such person from the treasury. Notwithstanding the provisions of this section to the contrary, the commissioner may issue such a warrant upon the commissioner's determination that refusing to issue such a warrant would result in an interruption of essential services.
History (2)
- Acts 1985, ch. 118, § 44
- 2004, ch. 931, § 1.
§ 9-4-605. Issuance of duplicate warrants. - The commissioner of finance and administration may issue a duplicate warrant to any person to whom an original warrant was issued and which was lost, mislaid, or destroyed, in accordance with procedures established by the commissioner and approved by the state treasurer and comptroller of the treasury.
History (1)
- Acts 1985, ch. 118, § 45.
§ 9-4-606. Appropriation release requirements. - (a) The commissioner of finance and administration is authorized to require the preparation and submission of work programs, financial reports and any other fiscal information the commissioner deems necessary before releasing any appropriations or grant to any agency, association, district, center, or other organization that is not under the direct control of an executive department or agency of state government.
- (b) The comptroller of the treasury is authorized and empowered to audit the fiscal records of any such agency, association, district, center or other such organization receiving state appropriations or grants.
History (1)
- Acts 1985, ch. 118, § 46.
§ 9-4-607. Refunds of erroneously paid amounts. - With respect to any revenues or receipts collected by any department or agency with the exception of those collected by the department of revenue, other law to the contrary notwithstanding, such amounts as are determined to have been erroneously paid may be refunded by such procedure as shall be developed by the commissioner of finance and administration and approved by the comptroller of the treasury.
History (1)
- Acts 1985, ch. 118, § 47.
§ 9-4-608. Intermediate-term investment fund. - (a) The state funding board shall determine whether a need exists for a longer-term investment fund for funds in the custody of the state treasurer. Upon determining that such a need exists, the state funding board may, by resolution duly adopted, create an intermediate-term investment fund as an additional investment vehicle for money in the custody of any department or agency of the state which is required by court order, contract, state or federal law or federal regulation to receive interest on invested funds. The funding board shall establish the terms of participation in the fund, and shall set the minimum and maximum amounts which may be invested in the fund by each participant. The investment fund shall be administered by the state treasurer within the guidelines established by the funding board.
- (b) The authorized instruments for investment in the intermediate-term investment fund shall be those instruments contained in § 9-4-602, as well as the pooled investment fund set forth in § 9-4-603.
- (c) Any department or agency of the state which is required by court order, contract, state or federal law or federal regulation to receive interest on invested funds may apply with the state treasurer to participate in the fund. Upon approval of any such application and upon investment of cash in the fund, the respective department or agency shall be deemed a participant in the fund. The general fund of the state may also participate in the fund. A participant may invest its cash for any length of time in the fund; provided, that the funding board may establish restrictions for withdrawal and/or penalties for early withdrawal.
- (d) All securities purchased shall belong jointly to the participants in the fund and the participants will share capital gains, income, and losses pro rata.
- (e) The state treasurer shall keep a separate account, designated by name and number of each participant. Individual transactions and totals of all investments belonging to each participant shall be recorded in the accounts.
- (f) The state treasurer shall report monthly to every participant having a beneficial interest in the intermediate-term investment fund. The report shall show the changes in investments made during the preceding month.
- (g) The state treasurer shall establish a revolving account, under the state treasurer's custody, to defray administrative costs of the investment fund. The state treasurer may deduct from each participant's pro rata earnings through the fund, a reasonable charge for administering the fund. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account.
- (h) The county legislative body shall determine whether a need exists for a longer-term investment for funds in the custody of the county trustee. Upon determining that such a need exists, the county legislative body may, by resolution duly adopted, authorize the county trustee to invest county funds in the state intermediate-term investment fund, notwithstanding § 5-8-301. The resolution shall contain a disclosure statement as the treasurer shall periodically require. County investments in the state intermediate-term investment fund shall be administered by the county trustee within the guidelines established.
- (i) Notwithstanding § 5-8-301, any entity that is eligible to participate in the pooled investment fund codified in § 9-4-603 may participate in the state intermediate-term investment fund.
- (j) Local governments may invest in the intermediate-term investment fund by having the local government's legislative body, council, commission or other authorizing individual or authorizing governing body submit a duly adopted resolution to the state treasurer demonstrating its authority to participate, along with any other documents required by the state treasurer. The resolution shall contain a disclosure statement as the state treasurer shall periodically require.
- (k) As the administrator of the intermediate-term investment fund, the state treasurer is authorized to receive, invest and distribute a participant's funds by means of an electronic transfer or other reasonable methods. The state funding board may establish limits, conditions or restrictions on the acceptance of moneys into the fund and the withdrawal of moneys from the fund.
History (3)
- Acts 1997, ch. 217, § 13
- 2012, ch. 1002, § 1
- 2013, ch. 208, §§ 4-7.
§ 9-4-609. Restriction on expending public funds for advertising or public relations. - (a) As used in this section, “public funds” means state revenues appropriated in the general appropriations act.
- (b) The general assembly finds that it is the public policy of this state that public funds shall not be obligated nor expended, nor shall a contract be entered into with an advertising, government affairs, or public relations firm, to promote, achieve, establish or restore a favorable relationship with the Tennessee public solely related to the image of any department, agency or office of the legislative, judicial or executive branch of government, when such advertising or public relations material, advertisement or communication provides no useful information, service or benefit to the public, unless such expenditure is included as a specific identifiable item in the general appropriations act.
- (c) The board of regents and the board of trustees shall develop policies governing the expenditure of public funds which, while promoting the respective institutions of higher education included within their systems and adequately informing the general public about the specific educational opportunities, nature and uniqueness of each institution, are not used to represent the institution as being superior to any other specific state public institution of higher education.
- (d) If a governmental entity has entered into a contract that includes the expenditure of funds prohibited under this section, the governmental entity shall immediately exercise any available cancellation clause in such contract that may be exercised related to such advertising or public relations material or communication.
- (e) Nothing in this section shall apply to funds appropriated in the general appropriations act to promote state agriculture, industry, trade, commerce, tourism or recreation or to participate in or promote conferences, training or similar meetings.
§ 9-4-610. Tennessee interagency cash flow committee. - (a) There is hereby created the Tennessee interagency cash flow committee, as an interagency committee, for the purpose of establishing, compiling, and maintaining a periodic cash flow report relative to all material sources and all material uses of pooled investment fund cash projected to be received and expended by this state.
- (b)
- (1) The committee shall consist of six (6) members as follows:
- (A) The state treasurer, or the state treasurer's designee;
- (B) One (1) staff person with the department of the treasury, designated by the state treasurer;
- (C) The comptroller of the treasury, or the comptroller's designee;
- (D) One (1) staff person with the comptroller of the treasury, designated by the comptroller;
- (E) The commissioner of finance and administration, or a staff person with the department of finance and administration, designated by the commissioner of finance and administration as the commissioner's designee; and
- (F) The commissioner of revenue, or a staff person with the department of revenue, designated by the commissioner of revenue as the commissioner's designee.
- (2) The state treasurer, or the state treasurer's designee, shall serve as chair of the committee.
- (3) All members of the committee serve at the will and pleasure of the authority designating such member.
- (c) The committee shall meet at the call of the state treasurer. The presence of a majority of the membership of the committee shall constitute a quorum. All actions of the committee shall be adopted upon a majority vote of the members of the committee who are participating in a meeting.
- (d) The committee shall, from time to time, determine the materiality of all items of sources and uses to be furnished by state entities, the materiality of those items to be included in the cash flow projection, the format of the cash flow projection, the categories of sources and uses to be included in such projection and any notes or explanatory statements to be included in the projection. The state tax revenue components of the projection shall be based on the official revenue estimates of the department of finance and administration in monthly units.
- (e) At the request of the committee or the department of finance and administration, all state departments, agencies, boards, commissions, bureaus, and instrumentalities, except the Tennessee board of regents, the University of Tennessee, and the six (6) state universities identified in § 49-8-101(a)(2)(A), shall promptly and periodically furnish all requested information related to sources and uses of pooled investment fund cash (historical or projected) in such form and format as the committee directs and that the committee deems necessary for the compilation and maintenance of the cash flow and state general fund earnings projections. The requested information may include estimates and other items necessary for projecting cash flow and earnings information relative to the various interest-bearing funds and accounts within the pooled investment fund, as well as information relative to the funds and amounts comprising the general fund's share of the pooled investment fund.
- (f) The state treasurer shall post to the public website of the department of the treasury the latest version of each periodic report produced by the department of finance and administration about this state's cash flow projections.
History (4)
- Acts 2011, ch. 346, § 1
- 2013, ch. 20, § 3
- 2017, ch. 324, §§ 3, 4
- 2022, ch. 690, §§ 1-3.
§ 9-4-611. Compensation of members of state boards and commissions. - Notwithstanding any law to the contrary, no member of any state board or commission established by law or pursuant to law, which receives an appropriation, regardless of the source of funding, shall receive any compensation, whether denominated per diem or by whatever name called, except for days in which such member actually works four (4) or more hours performing duties directly relating to that board's or commission's activities or for time or days spent attending meetings of that board or commission. This section shall not preclude payment of salaries which are set by law in annual or monthly amounts. The chair or head of each board or commission, the department head to which such board or commission is attached administratively, and the commissioner of finance and administration shall prescribe procedures to contain, as a minimum, a certification of time worked by each member claiming compensation.
History (1)
- Acts 2013, ch. 454, § 17.
§ 9-4-612. Investments of state funds in obligations guaranteed by United States government. - (a) Notwithstanding any requirement of this part, or any other law to the contrary, on and after April 22, 2015, the state treasurer may, in the state treasurer's sole discretion, invest money in the custody of any officer or officers of the state, which is otherwise required to be invested pursuant to § 9-4-603 or § 9-4-608, pursuant to this section, if the state officer or officers who have custody of the money request that the money be invested pursuant to this section.
- (b) Investments made pursuant to this section are not subject to § 9-4-602.
- (c) The authorized instruments for investment under this section shall be:
- (1) Bonds, notes, and treasury bills of the United States or any other obligations guaranteed as to principal and interest by the United States or any of its agencies; and
- (2) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association, and other United States government sponsored corporations.
- (d) Investments made pursuant to this section shall not be pooled, and each investor will bear the capital gains, income, and losses for that investor's investment.
- (e) The state treasurer shall keep a separate account, designated by name and number of each investor. Individual transactions and totals of all investments belonging to each investor shall be recorded in the accounts.
- (f) The state treasurer shall report monthly to every investor under this section. The report shall show any changes in investments made during the preceding month.
- (g) The state treasurer shall establish a revolving account, under the state treasurer's custody, to defray administrative costs, investment costs, and any other expenses associated with investments made pursuant to this section. The state treasurer may deduct from each investor's earnings, a reasonable charge for administering the investor's investment. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account.
- (h)
- (1) Subject to subdivision (h)(2), at any time, an investor may request the return of the investor's principal investment or investment income or both; however, a redemption of the investment does not guarantee that an investor will receive the entire amount of the principal investment or investment income or both.
- (2) In any case where an investor requests the return of an investment that will require liquidation of the investment prior to the investment reaching full maturity, the liquidation and return of the investment shall not be made unless the state treasurer approves the liquidation of the investment.
History (2)
- Acts 2015, ch. 196, § 1
- 2018, ch. 909, § 1.
Part 7 Local Government Investment Pool § 9-4-701. Purpose and findings. - The purpose of this part is to enable local governments in this state to participate in a pooled investment fund for the investment of idle public funds. For purposes of this part, the local governments that can participate in the fund are those entities listed in § 9-1-107(b). The general assembly finds and declares that the public interest is satisfied through a pooled investment fund for idle public funds, thereby reducing the need for imposing additional taxes. Each local government participating in the pooled investment fund is deemed a participant.
History (2)
- Acts 1985, ch. 118, § 48
- 2022, ch. 824, § 1.
§ 9-4-702. Local government investment pool — Termination — Custody of funds. - The local government investment pool in existence as of April 14, 2022, remains in full force and effect if and until the state funding board terminates the fund pursuant to this part, and is subject to the provisions of this part. The funds invested in the local government investment pool must be in the custody of the state treasurer or the agents of the state treasurer for investment, reinvestment, and the administration of the fund.
History (3)
- Acts 1985, ch. 118, § 49
- 2013, ch. 208, § 8
- 2022, ch. 824, § 2.
§ 9-4-703. State funding board. - The state funding board may:
- (1) Establish and reestablish a local government investment pool that is subject to § 9-4-602, consisting of the aggregate of all participating local government funds placed in the custody of the state treasurer, subsequent to the termination of the fund;
- (2) Separate the local government investment pool from the state pooled investment fund created under § 9-4-603;
- (3) Suspend accepting deposits into the fund from all participants;
- (4) Suspend accepting deposits into the fund from some participants on a share or share class basis;
- (5) Terminate some of the accounts in the fund on a share or share class basis;
- (6) Terminate the fund in the event that the fund is financially infeasible or is not beneficial to the local governments or the state itself. Before termination can occur, the local government investment pool must be separated from the state pool investment fund, such that two (2) separate funds are established for investment, accounting, and administration purposes. The state funding board shall determine the timing of the fund separation, termination, and wind down, which must be based, in part, on market forces;
- (7) Liquidate some or all participant accounts upon a partial or total fund suspension or termination by returning some or all funds to participants;
- (8) Establish limits, restrictions, or conditions on the acceptance of moneys into and the withdrawal of moneys from the fund, including, but not limited to, a minimum contribution amount or a maximum withdrawal amount;
- (9) Determine whether the local government investment pool funds must be commingled, for investment purposes, with the funds held in the pooled investment fund created under § 9-4-603, or maintained separately subject to §§ 9-4-602 and 9-4-603. The commingling of the funds in the local government investment pool with the funds in the pooled investment fund for investment purposes must not prohibit the funds from being established as two (2) separate funds and accounted for separately with accurate and detailed accounting records;
- (10) Determine the valuation method applied to the fund, which may include, but need not be limited to, stable value or floating net asset value;
- (11) Delegate the day-to-day administration of the local government investment pool to the state treasurer; and
- (12) Serve in an advisory capacity to the state treasurer in all matters pertaining to the local government investment pool.
History (3)
- Acts 1985, ch. 118, § 50
- 1997, ch. 217, § 12
- 2022, ch. 824, § 3.
§ 9-4-704. Powers of state treasurer. - The state treasurer may:
- (1) Implement and administer the local government investment pool, including, but not limited to, effectuating the decisions of the state funding board and any delegated duties;
- (2) Approve each participant's application and agreement to participate in the local government investment pool;
- (3) Contract with accountants, attorneys, auditors, investment advisors, or other finance and investment professionals to make investments or provide for the public accounting, auditing, and legal compliance necessary for performance reporting, and the proper administration of the local government investment pool. Attorneys must be employed with the approval of the attorney general and reporter;
- (4) Invest and reinvest the funds placed in the state treasurer's custody;
- (5) Establish shares, accounts, and subaccounts; different classes of shares; and restricted accounts within the fund. The establishment of separate shares or classes of shares must only occur in the local government investment pool once it is separated from the state pool investment fund, such that two (2) separate funds are established for investment, accounting, and administration purposes;
- (6) Receive, invest, and distribute a pool participant's funds by means of an electronic transfer or other reasonable methods;
- (7) Open accounts as are permitted by the federal reserve for the safekeeping and other servicing of securities of local governments, and to enter into agreements with local governments to provide for such services;
- (8) Maintain accurate and detailed accounting records for each participating local government's funds;
- (9) Deduct a reasonable charge from each participant's account balance or balances which must be deposited and expended through the revolving account established in § 9-4-603(g);
- (10) Provide a monthly report to each fund participant;
- (11) Develop policies, procedures, guidelines, notices, or disclosures for the effective administration of the fund; and
- (12) Facilitate local government investment pool participation by:
- (A) Explaining investments in the local government investment pool to local governments through publication and other appropriate means;
- (B) Educating local governments about the state's experience in investing short-term funds; and
- (C) Providing technical assistance in investment of idle funds in the local government investment pool to local governments that request such assistance.
History (4)
- Acts 1985, ch. 118, § 51
- 2002, ch. 514, §§ 1, 2
- 2013, ch. 208, §§ 9, 10
- 2022, ch. 824, § 4.
§ 9-4-705. Application and agreement — Electronic transfers and filing — Redemption of shares. - (a) A local government desiring to participate in the local government investment pool shall submit an application and agreement on a form prescribed by the state treasurer with a resolution passed by the local government's governing body demonstrating approval to participate in the fund. Pursuant to § 9-1-107(b), the governing body of the local government may delegate revocable investment authority to the financial officer charged with custody of the funds of the local government, who shall thereafter assume full responsibility for transactions with the local government investment pool.
- (b) Once the application and agreement are approved by the state treasurer, the local government may transfer money to the state treasurer to invest in the local government investment pool and purchase shares in the fund on behalf of the local government.
- (c) Money transferred by each participating local government to the local government investment pool for investment as an investment or principal payment must be done electronically. Such local governments shall also electronically file any report or other document with which such electronically transferred payment is associated or on which credit for the payment electronically transferred is taken. In extenuating circumstances, the state treasurer may waive the requirements of this section with respect to any local government. To obtain a waiver, the local government shall demonstrate in writing to the state treasurer that such extenuating circumstances exist.
- (d) At any time, and subject to the limits, conditions, or restrictions imposed by the state funding board, a participant in the fund may request the return of its principal investment or investment income or both; however, a redemption of shares does not guarantee that a participant will receive the entire amount of the principal investment or investment income or both.
History (2)
- Acts 1985, ch. 118, § 52
- 2022, ch. 824, § 5.
§ 9-4-706. Ownership of investments — Negative earnings — Use of charges. - (a) All investments purchased in the fund belong jointly to the fund participants and the participants must share capital gains, income, and losses on a pro rata basis.
- (b) In the event that the local government investment pool experiences a negative interest rate, it may result in a loss to pool participants, and may result in the loss of principal. The state treasurer may deduct the negative earnings from each participant's local government investment pool account as a right of setoff.
- (c) The reasonable charge that is deducted from each participant's account balance or balances that is deposited in the revolving account may be expended for the following purposes, including, but not limited to, payment:
- (1) In whole or in part, of any loss experienced by pool participants or a pool participant to be distributed on a pro rata basis;
- (2) In whole or in part, of the state treasurer's administrative fee for the operation of the local government investment pool;
- (3) In whole or in part, of any expenses, losses, shortfalls, deficits, or deficiencies resulting from operational, accounting, or administrative errors;
- (4) Of the expenses for the administration of the local government investment pool, including, but not limited to, the procurement and implementation of electronic systems and functionality; and
- (5) Of any other expenses necessary and appropriate as determined by the state treasurer.
History (2)
- Acts 1986, ch. 923, § 6
- 2022, ch. 824, § 6.
§ 9-4-707. [Repealed]
History (2)
- Acts 2010, ch. 728, § 1
- repealed by Acts 2022, ch. 824, § 7, effective April 14, 2022.
Part 9 State Office Buildings and Support Facilities Revolving Fund § 9-4-901. Created. - There is hereby created within the general fund a special account to be known as the “state office buildings and support facilities revolving fund.”
§ 9-4-902. Unencumbered funds and unexpended balance. - Any unencumbered funds and any unexpended balance of the fund remaining at the end of any fiscal year shall not revert to the general fund, but shall be carried forward until expended in accordance with this part.
§ 9-4-903. Interest. - Interest accruing on investments and deposits of the fund shall be returned to the fund and remain a part of the fund.
§ 9-4-904. Investments — Administration of fund. - Moneys in the fund shall be invested by the state treasurer for the benefit of the fund pursuant to § 9-4-603. The fund shall be administered by the commissioner of general services in accordance with policy established by the state building commission.
History (2)
- Acts 1993, ch. 332, § 1
- 2013, ch. 454, § 38.
§ 9-4-905. Purpose of fund. - The state office buildings and support facilities revolving fund is to provide for:
- (1) Operating expenses for office buildings and support facilities;
- (2) Debt service payments on general obligation bonds authorized to build or acquire office buildings and support facilities;
- (3) Routine maintenance expenditures on office buildings and support facilities;
- (4) Major maintenance and renovation projects for office buildings and support facilities as approved by the state building commission;
- (5) Relocation expenses for state agencies;
- (6) Payments for leased space occupied by state agencies; and
- (7) Payments to build or acquire buildings or support facilities as approved by the state building commission.
§ 9-4-906. Deposits. - Notwithstanding any law to the contrary, there shall be deposited in the fund any and all appropriations made either in the general appropriations act, including any rents for leased state facilities covered by the fund, or in any other act which is for the purpose of funding the items listed in § 9-4-905.
§ 9-4-907. Lease payments. - Lease payments for space occupied by state agencies, including the legislative and judicial branches, shall be established by policy issued by the commissioner of general services and approved by the state building commission; provided, however, that until such time as a policy shall be issued by the commissioner of general services and approved by the state building commission, the policy formerly issued by the commissioner of finance and administration and approved by the state building commission shall remain effective. The lease payments shall be paid to the fund.
History (2)
- Acts 1993, ch. 332, § 1
- 2013, ch. 454, § 39.
Part 10 Pension Stabilization Reserve Trust § 9-4-1001. Pension stabilization reserve trust fund. - The pension stabilization reserve trust is created. The pension stabilization reserve trust fund shall be established and funded through the employer contributions contributed to the trust pursuant to § 8-36-920(d)(4), and all income from the investment of the funds in the trust fund. The trust and the funds therein shall be administered by the treasury department. The trust fund shall be an irrevocable trust exclusively for the benefit of the participants and beneficiaries of the Hybrid Retirement Plan for State Employees and Teachers compiled in title 8, chapter 36, part 9. The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. It shall be impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the Hybrid Retirement Plan for State Employees and Teachers and this trust, for any part of the corpus or income of the trust to be used or diverted for purposes other than for the exclusive benefit of the employees or their beneficiaries. The attorney general and reporter shall approve the terms of the trust instrument.
History (2)
- Acts 2017, ch. 374, § 1
- 2018, ch. 590, § 1.
§ 9-4-1002. Trustees. - The comptroller of the treasury, the commissioner of financial institutions, the commissioner of finance and administration, the secretary of state, and the state treasurer, or their designees, shall serve as trustees of the trust. The comptroller of the treasury shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.
§ 9-4-1003. Investment policy — Individual separate stabilization reserve trust accounts. - (a) The trustees shall adopt an investment policy authorizing how assets in the trust may be invested. The policy shall not authorize assets in the trust to be invested in any instrument, obligation, security, or property that would not constitute a legal investment for assets of the Tennessee consolidated retirement system. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
- (b) The funds transferred or deposited into the trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred or deposited into the trust. All or a portion of the trust may be invested, reinvested, and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to part 6 of this chapter. The assets of the trust may also be co-invested in a group trust in accordance with § 8-37-104(e).
- (c) The trust fund shall consist of the following individual separate stabilization reserve trust accounts for the purpose of accounting for the employer contributions made to the trust on account of:
- (1) State employees participating in the Hybrid Retirement Plan for State Employees and Teachers, compiled in title 8, chapter 36, part 9; and
- (2) Teachers participating in the Hybrid Retirement Plan for State Employees and Teachers.
- (d) In addition, the trust fund shall consist of individual separate stabilization reserve trust accounts established in the name of each political subdivision participating in the Hybrid Retirement Plan for State Employees and Teachers for the purpose of accounting for the employer contributions made to the trust by the political subdivision on account of its employees.
- (e) The state treasurer shall assess a charge to the trust, in an amount to be determined by the treasurer, to meet the administrative and investment expenses of the treasury department in providing services under this part.
History (2)
- Acts 2017, ch. 374, § 1
- 2018, ch. 590, § 2.
§ 9-4-1004. Purpose of trust fund — Certification of amount needed to fund benefits — Use of assets. - (a) As provided in this section, the purpose of the pension stabilization reserve trust fund is to protect the participants and beneficiaries of the Hybrid Retirement Plan for State Employees and Teachers from a reduction or loss of benefits through the implementation of the cost controls contained in § 8-36-922(c)(1)(C)-(G) or in § 8-36-922(d)(1). If in any given year, the total amount in an employer's employer reserve account established pursuant to § 8-36-920(e) is not sufficient to meet the actuarial liabilities for which the employer's employer reserve account was created, then the board of trustees of the Tennessee consolidated retirement system shall certify to the trustees of the trust the amount necessary to fund current benefits as determined by the actuarial valuation performed by the retirement system's actuary. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the employer's stabilization reserve trust account to the applicable employer reserve account of the employer would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the employer's stabilization reserve trust account to the applicable employer reserve account of the employer.
- (b) The assets of the pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.
History (2)
- Acts 2017, ch. 374, § 1
- 2018, ch. 590, § 3.
§ 9-4-1005. Suspension of deposits of employer contributions. - Deposits of employer contributions into the pension stabilization reserve trust fund as provided in § 8-36-920 shall be suspended effective July 1 of any given year next following the most recent actuarial valuation conducted pursuant to § 8-36-922(b) for an employer whose stabilization reserve trust account equals or exceeds a certain maximum amount that is determined by the trustees of the trust created pursuant to this part. The amount shall be expressed in dollars, as a percentage, or other form as shall be determined at the sole discretion of the trustees. The trustees, in consultation with board of trustees of the Tennessee consolidated retirement system and the retirement system's actuary, shall establish the methodology and procedures to be used in ascertaining the maximum amount. Deposits into the pension stabilization reserve trust fund shall be reinstated for the employer effective July 1 of any given year next following the most recent actuarial valuation conducted pursuant to § 8-36-922(b) when the total amount in the employer's stabilization reserve trust account is less than the maximum amount adopted by the trustees pursuant to this section.
§ 9-4-1006. Annual financial reports. - The trustees shall prepare annual financial reports following the close of each fiscal year relative to the activities of the trust. The annual reports, all books, accounts, and financial records of the trust shall be subject to audit by the comptroller of the treasury.
Part 11 State Employee Legacy Pension Stabilization Reserve Trust § 9-4-1101. Part definitions. - As used in this part, unless the context otherwise requires:
- (1) “Legacy pension plan” means the Tennessee consolidated retirement system that is established in title 8, chapters 34 - 37, excluding the Hybrid Retirement Plan for State Employees and Teachers, compiled in title 8, chapter 36, part 9;
- (2) “State employee” means any person who is a state official, including members of the general assembly, the attorney general and reporter, district attorneys general, state judges, and district public defenders, or any person who is employed in the service of and whose compensation is payable by the state, or any person who is employed by the state whose compensation is paid in whole or in part from federal or other funds. “State employee” also means any person who is employed in the service of and whose compensation is payable by a public institution of higher education, or any person who is employed by a public institution of higher education whose compensation is paid in whole or in part from federal or other funds; and
- (3) “Trustees” means the five (5) trustees designated in § 9-4-1002.
§ 9-4-1102. State employee legacy pension stabilization reserve trust fund. - The state employee legacy pension stabilization reserve trust is created. The state employee legacy pension stabilization reserve trust fund shall be established and funded through appropriations made in the general appropriations act from time to time for such purpose. The trust and the funds therein shall be administered by the department of the treasury. The trust fund shall be an irrevocable trust exclusively for the benefit of state employees who are members of the legacy plan. The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. It shall be impossible, at any time prior to the satisfaction of all liabilities with respect to state employees and their beneficiaries under the legacy pension plan and this trust, for any part of the corpus or income of the trust to be used or diverted for purposes other than for the exclusive benefit of the state employees or their beneficiaries. The attorney general and reporter shall approve the terms of the trust instrument.
History (2)
- Acts 2017, ch. 374, § 7
- 2018, ch. 590, § 4.
§ 9-4-1103. Chair of trustees. - The comptroller of the treasury shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.
§ 9-4-1104. Investment policy — Charge for administrative and investment expenses. - (a) The trustees shall adopt an investment policy authorizing how assets in the trust may be invested. The policy shall not authorize assets in the trust to be invested in any instrument, obligation, security, or property that would not constitute a legal investment for assets of the Tennessee consolidated retirement system. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
- (b) The funds transferred or deposited into the trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred or deposited into the trust. All or a portion of the trust may be invested, reinvested, and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to part 6 of this chapter. The assets of the trust may also be co-invested in a group trust in accordance with § 8-37-104(e).
- (c) The state treasurer shall assess a charge to the trust, in an amount to be determined by the treasurer, to meet the administrative and investment expenses of the treasury department in providing services under this part.
History (2)
- Acts 2017, ch. 374, § 7
- 2018, ch. 590, § 5.
§ 9-4-1105. Purpose of trust fund — Certification of amount needed to fund increase in employer contribution rate — Use of assets. - (a) As provided in this section, the purpose of the state employee legacy pension stabilization reserve trust fund is to protect state employee members of the legacy plan from a reduction or erosion of funds in the legacy plan that are necessary to pay benefits provided by the plan. If in any given year, the actuarially determined employer contribution rate for state employees exceeds the actuarially determined employer contribution rate for state employees as of fiscal year 2018, the board of trustees of the Tennessee consolidated retirement system may certify to the trustees of the trust the amount necessary to fund the increase in the employer contribution rate for that year. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the state employee legacy pension stabilization reserve trust fund would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the state employee legacy pension stabilization reserve trust fund to the state accumulation fund of the legacy plan.
- (b) The assets of the state employee legacy pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.
§ 9-4-1106. Annual financial reports. - The trustees shall prepare annual financial reports following the close of each fiscal year relative to the activities of the trust. The annual reports, all books, accounts, and financial records of the trust shall be subject to audit by the comptroller of the treasury.
Part 12 Teacher Legacy Pension Stabilization Reserve Trust § 9-4-1201. Part definitions. - As used in this part, unless the context otherwise requires:
- (1) “Legacy pension plan” means the Tennessee consolidated retirement system that is established in title 8, chapters 34-37, excluding the Hybrid Retirement Plan for State Employees and Teachers, compiled in title 8, chapter 36, part 9;
- (2) “Teacher” has the meaning set forth in § 8-34-101(49)(B), but does not include any person employed by a public institution of higher education; and
- (3) “Trustees” means the five (5) trustees designated in § 9-4-1002.
§ 9-4-1202. Teacher legacy pension stabilization reserve trust fund. - The teacher legacy pension stabilization reserve trust is created. The teacher legacy pension stabilization reserve trust fund shall be established and funded through a mechanism and methodology as shall be determined in the future by the commissioner of finance and administration and the state treasurer. The trust and the funds therein shall be administered by the department of the treasury. The trust fund shall be an irrevocable trust exclusively for the benefit of teachers who are members of the legacy plan. The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. It shall be impossible, at any time prior to the satisfaction of all liabilities with respect to teachers and their beneficiaries under the legacy pension plan and this trust, for any part of the corpus or income of the trust to be used or diverted for purposes other than for the exclusive benefit of the teachers or their beneficiaries. The attorney general and reporter shall approve the terms of the trust instrument.
History (2)
- Acts 2017, ch. 374, § 8
- 2018, ch. 590, § 6.
§ 9-4-1203. Chair of trustees. - The comptroller of the treasury shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.
§ 9-4-1204. Investment policy — Charge for administrative and investment expenses. - (a) The trustees shall adopt an investment policy authorizing how assets in the trust may be invested. The policy shall not authorize assets in the trust to be invested in any instrument, obligation, security, or property that would not constitute a legal investment for assets of the Tennessee consolidated retirement system. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
- (b) The funds transferred or deposited into the trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred or deposited into the trust. All or a portion of the trust may be invested, reinvested, and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to part 6 of this chapter. The assets of the trust may also be co-invested in a group trust in accordance with § 8-37-104(e).
- (c) The state treasurer shall assess a charge to the trust, in an amount to be determined by the treasurer, to meet the administrative and investment expenses of the treasury department in providing services under this part.
History (2)
- Acts 2017, ch. 374, § 8
- 2018, ch. 590, § 7.
§ 9-4-1205. Purpose of trust fund — Certification of amount needed to fund increase in employer contribution rate — Use of assets. - (a) As provided in this section, the purpose of the teacher legacy pension stabilization reserve trust fund is to protect teacher members of the legacy plan from a reduction or erosion of funds in the legacy plan that are necessary to pay benefits provided by the plan. If in any given year, the actuarially determined employer contribution rate for teachers exceeds the actuarially determined employer contribution rate for teachers as of fiscal year 2018, the board of trustees of the Tennessee consolidated retirement system may certify to the trustees of the trust the amount necessary to fund the increase in the employer contribution rate for that year. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the teacher legacy pension stabilization reserve trust fund would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the teacher legacy pension stabilization reserve trust fund to the state accumulation fund of the legacy plan.
- (b) The assets of the teacher legacy pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.
§ 9-4-1206. Annual financial reports. - The trustees shall prepare annual financial reports following the close of each fiscal year relative to the activities of the trust. The annual reports, all books, accounts, and financial records of the trust shall be subject to audit by the comptroller of the treasury.
Part 13 Opioid Abatement Fund § 9-4-1301. Fund established. - (a) The opioid abatement fund is established and funded pursuant to this part.
- (b) The opioid abatement fund shall operate as an irrevocable trust that the state treasurer shall administer. Amounts in the opioid abatement fund shall not revert to the general fund of the state. The treasurer and attorney general and reporter shall approve the terms of the trust instrument. The terms of the trust instrument shall not be substantively amended except by unanimous approval of the trustees, the opioid abatement council established pursuant to § 33-11-103, and the attorney general and reporter.
§ 9-4-1302. Expenditure of funds. - (a) Funds in the opioid abatement fund shall be spent only for the following purposes:
- (1) Prospective opioid abatement and remediation;
- (2) Expenses incurred in administering and operating the opioid abatement council;
- (3) Related expenses as provided in § 33-11-104(b); and
- (4) Expenses associated with administering, investing, and disbursing funds held in the opioid abatement fund.
- (b) Funds in the opioid abatement fund shall not be used to reimburse expenditures incurred prior to May 24, 2021. Funds from the opioid abatement fund shall not be used to pay litigation costs, expenses, or attorney fees arising from the enforcement of legal claims related to the opioid epidemic.
- (c) Any opioid abatement fund disbursements must be made at the direction of the opioid abatement council. Except to the extent required by law, the trustees of the opioid abatement fund shall not make or refuse to make any disbursement contrary to the direction of the opioid abatement council.
§ 9-4-1303. Trustees of fund. - (a) The trustees of the opioid abatement fund are:
- (1) The commissioner of finance and administration;
- (2) The state treasurer; and
- (3) The chair of the opioid abatement council.
- (b) The state treasurer shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.
- (c) To the extent not prohibited by law, the trustees shall not act contrary to the direction of the opioid abatement council and shall uphold the decisions the council renders regarding disbursement of funds from the opioid abatement fund. The trustees have only a ministerial role and not a discretionary role in the distribution of funds, as directed by the opioid abatement council. The trustees have no duties concerning the opioid abatement fund other than those duties set forth in the opioid abatement fund's trust instrument and in this part.
§ 9-4-1304. Repository of funds received by the state pursuant to judgments on certain claims. - The opioid abatement fund is the designated repository of funds that are either dedicated to opioid abatement or remediation or are otherwise directed to abatement or remediation and that are received by the state pursuant to a judgment on opioid-related claims, a recovery in bankruptcy on opioid-related claims, or a settlement of opioid-related claims. This section does not prevent the opioid abatement fund from also receiving funds from other sources if the funds will be dedicated to abatement.
§ 9-4-1305. Investment policy. - (a) The trustees shall adopt, in writing, an investment policy or policies authorizing how assets in the trust may be invested prior to investments being made.
- (b) Funds in the opioid abatement fund may be invested and reinvested for the benefit of the fund by the state treasurer pursuant to § 9-4-603. The trustees shall delegate to the state treasurer the responsibility for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
- (c) All or a portion of the trust may be invested, reinvested, and coinvested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the state pooled investment fund established pursuant to part 6 of this chapter. The state treasurer shall account for the trust funds in one (1) or more separate accounts in accordance with this part or other law.
Part 14 State Treasurer Management and Investment of State Funds § 9-4-1401. Part definitions. - As used in this part:
- (1) “Environmental, social, and governance interests” means interests that are not financial;
- (2) “Financial”:
- (A) Means, with regard to a factor or reason, having been prudently determined to have a material effect on the financial risk or the financial return of an investment for a program based on the appropriate investment horizon consistent with the program's articulated funding and investment objectives for the exclusive benefit of the purposes of the program;
- (B) Includes, but is not limited to, data-based economic decisions and forecasting based on financial trends or themes; and
- (C) Does not include environmental, social, and governance interests that may not be material to the financial analysis of the investment; and
- (3) “Program” means any of the following which are established by law and for which the state treasurer has, or has been delegated, investment authority, oversight, and responsibility:
- (A) A trust fund;
- (B) An endowment fund;
- (C) Deferred or tax-sheltered compensation plan or plans, including profit sharing or salary reduction plans, established pursuant to title 8, chapter 25, parts 1, 2, and 3;
- (D) Programs under the Tennessee College Savings Trust Act, compiled in title 49, chapter 7, part 8; and
- (E) Programs under The Achieving a Better Life Experience (ABLE) Act, compiled in title 71, chapter 4, part 8.
§ 9-4-1402. Treasury investment division staff — Investment of program assets. - Consistent with the prudent investor rule pursuant to § 35-14-103, the standard of care pursuant to § 35-14-104, and the exercise of reasonable care in delegation of investment and management functions pursuant to § 35-14-111 and § 8-37-112, the department of treasury investment division staff, under the supervision of the state treasurer, shall invest, reinvest, manage, and select investment options for program assets for financial reasons for the exclusive benefit of the beneficiaries of the programs while maximizing long-term shareholder value.
§ 9-4-1403. State treasurer's voting rights authority — Limitations — Delegation. - (a) Notwithstanding another law or policy to the contrary, the state treasurer has the sole authority to exercise, in person or by proxy, all voting rights with respect to securities held by a program and to give general or special proxies or powers of attorney with or without power of substitution.
- (b) The authority conferred by subsection (a) must be exercised for financial reasons, impartially and solely in the interests of the beneficiaries of the program as determined from the purposes, terms, distribution requirements, and other circumstances of the program, and the terms of the respective program's investment and proxy voting policies or guidelines.
- (c) The state treasurer may delegate the authority conferred by subsection (a), in whole or in part, to the department of treasury staff, which authority includes, but is not limited to, conducting research, providing due diligence, and casting votes.
§ 9-4-1404. Authority of the state treasurer. - (a) The state treasurer has final authority over an investment or proxy voting decision for a program.
- (b) The state treasurer may make and enter into contracts, agreements, and other instruments with an individual or entity to effectuate this part, including, but not limited to, advisors, research providers, consultants, and other contractors, who must be compensated as the state treasurer may deem just.
- (c) Notwithstanding another law to the contrary, in cases where the interest of the state treasurer requires additional legal counsel to effectuate this part and to advise on issues concerning the state treasurer's fiduciary obligations and responsibilities, the state treasurer, with the approval of the attorney general and reporter, may contract with additional counsel, who must be paid such compensation for services as the treasurer may deem just.
Part 51 State Budget and Appropriations § 9-4-5101. Items set forth in budget. - (a) The budget of the state government shall present a complete financial plan for the ensuing fiscal year, which plan shall set forth all proposed expenditures for the administration, operation, and maintenance of the several departments, institutions, offices and agencies of the state government, the interest and debt redemption charges during the fiscal year.
- (b) The budget shall also present proposals for capital projects to be undertaken or completed during the ensuing year, and the means of financing such projects.
- (c) In addition thereto, the budget shall set forth the anticipated revenues of the state government and any other means of financing the expenditures proposed for the ensuing fiscal year.
History (8)
- Acts 1937, ch. 33, § 17
- C. Supp. 1950, § 255.17
- Acts 1969, ch. 12, § 1
- 1970, ch. 434, § 1
- T.C.A. (orig. ed.), § 9-601
- T.C.A., § 9-6-101
- Acts 2002, ch. 510, § 1
- 2013, ch. 243, § 3.
§ 9-4-5102. Performance-based program budgeting. - It is the intent of the general assembly that, to the extent practicable, the budget of the state government shall be prepared using performance data and other relevant program measures. The goals for such budget shall include:
- (1) For each budget unit, detailed statements identifying all substantial aspects of agency operations, priorities, and activities, to specifically include:
- (A) A description of the objective or objectives of each program;
- (B) A description of the activity or activities which are intended to accomplish each objective;
- (C) Indicators of quantity and quality of performance of these activities; and
- (D) The level of effort required to accomplish each activity in terms of funds and personnel; and
- (2) A summary statement incorporating the information in subdivision (1) for the current and one (1) prior fiscal year for each budget unit and detailed statements of the sources of funding for all fiscal years presented.
History (6)
- Acts 1977, ch. 457, § 1
- T.C.A., § 9-616
- Acts 1984, ch. 771, § 1
- T.C.A. § 9-6-102
- Acts 2002, ch. 875, § 6
- 2013, ch. 243, § 4.
§ 9-4-5103. Estimates by departments — Classification of expenditures. - (a) On or before December 1 of each year, all departments, offices, and agencies of the state government shall prepare on blanks furnished to them by the commissioner of finance and administration, and submit to such officer, estimates of their expenditure requirements for the next fiscal year compared with the corresponding figures of the last completed fiscal year and estimated figures for the current fiscal year. The expenditure estimates shall be classified to set forth the data by funds, organization units, character and objects of expenditure; the organization units may be subclassified by function and activities, or in any other manner at the discretion of the commissioner.
- (b) Any state agency subject to part 56 of this chapter shall include with its budget request the performance measures and standards required by § 9-4-5606.
History (9)
- Acts 1937, ch. 33, § 19
- C. Supp. 1950, § 255.19
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- Acts 1969, ch. 12, §§ 2, 3
- T.C.A. (orig. ed.), § 9-602
- T.C.A. § 9-6-103
- Acts 2002, ch. 875, § 3
- 2013, ch. 243, § 5.
§ 9-4-5104. Revenue estimates. - On or before January 1 of each year, the commissioner of finance and administration shall prepare revenue estimates for the current fiscal year and for the next fiscal year for inclusion in the budget. The revenue estimates shall be classified so as to show the receipts by funds, organization units, and sources of income.
History (8)
- Acts 1937, ch. 33, § 19
- C. Supp. 1950, § 255.19
- modified
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- Acts 1969, ch. 12, § 4
- T.C.A. (orig. ed.), § 9-603
- T.C.A. § 9-6-104.
§ 9-4-5105. Review of estimates — Transmittal of budget document — Governor's power to amend the budget not restricted or prohibited. - (a) The governor, with the assistance of the commissioner of finance and administration, shall review the estimates, altering, revising, increasing, or decreasing the items of the estimates as the governor may deem necessary in view of the needs of the various spending agencies and the total anticipated revenues of the state government during the ensuing fiscal year.
- (b) The commissioner, at the instance of the governor, shall then prepare a budget document in the form required by this chapter, and the governor shall transmit such document in printed form to the general assembly prior to February 1, each year unless the general assembly, by joint resolution, authorizes transmittal by a later date; provided, that a governor in the first year of such governor's term in office is required to transmit such budget document in printed form to the general assembly prior to March 1 of that year, unless the general assembly, by joint resolution, authorizes transmittal by a later date.
- (c) Nothing contained in § 16-3-803(l) or any other law shall be construed to restrict or prohibit the governor's authority to revise the budget, submitted pursuant to §§ 16-3-803(l) and 9-4-5103, for maintenance and operation of the state court system, and such budget or revised budget shall be included within the budget document required by this section.
History (11)
- Acts 1937, ch. 33, § 20
- 1945, ch. 10, § 1
- C. Supp. 1950, § 255.20
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- Acts 1969, ch. 12, §§ 5, 6
- 1975, ch. 27, § 1
- 1979, ch. 218, § 1
- T.C.A. (orig. ed.), § 9-604
- Acts 1992, ch. 896, § 2
- T.C.A. § 9-6-105.
§ 9-4-5106. Form and contents of budget document — General appropriations bill. - (a) The budget document, presenting the financial plan of the state government for the next fiscal year, shall be set up in three (3) parts, the nature and contents of which are as follows:
- (1)
- (A) Part 1 shall consist of a budget message by the governor which shall outline the financial policy of the state government for the ensuing fiscal year, describing in connection therewith the important features of the financial plan; it shall also embrace a general budget summary setting forth the aggregate figures of the budget in such manner as to show the balances, relations between the total proposed expenditures and the total anticipated revenues, together with the other means of financing the budget for the next fiscal year, contrasted with the corresponding figures for the last completed fiscal year and for the fiscal year in progress. The general budget summary shall be supported by explanatory schedules or statements, classifying the expenditures contained therein by organization units, objects and funds and the income by organization units, sources, and funds;
- (B) Part 1 also shall include a schedule on tax exemptions, identifying, to the extent practicable, all exemptions from state taxes and estimating the amount of revenue which would be collected by the state in the ensuing fiscal year if the exemptions were not to exist. The schedule shall include an estimate for each such exemption. The estimates of such exemptions shall be based upon the revenue estimates included in the budget document;
- (2) Part 2 shall embrace the detailed budget estimates both of expenditures and revenues as provided in this chapter; it also shall include performance measures and standards required by § 9-4-5606; it shall also include a statement of the bonded indebtedness of the state government, showing the debt redemption requirements scheduled over the fiscal years until the final date of retirement, the net and gross debt of the state, and the condition of the sinking funds; in addition thereto, it shall contain any statements relative to the financial plan which the governor may deem desirable, or which may be required by the general assembly; and
- (3) Part 3 shall embrace complete drafts of the budget bills, that is, the legislative measures required to give legal sanction to the financial plan when adopted by the general assembly. These bills shall include an appropriation bill, authorizing, by spending agencies and by funds, all expenditures of the state government for the next fiscal year, and such other bills as may be required to provide the revenues necessary to finance the budget. The governor shall submit these bills for introduction in both houses of the general assembly no later than fourteen (14) days after the budget document is transmitted or by the general bill cut-off date in the respective houses, whichever is later.
- (b) The capital budget, to be included in part 2 of the budget document, shall contain funding for all capital outlay. Funding for all capital improvement projects of whatever amount and funding for each capital maintenance project of one million dollars ($1,000,000) or more shall be specified by project, by affected spending agency, and by funding sources, including state current funds, bonds, and other revenue. Funding for each capital maintenance project of less than one million dollars ($1,000,000) shall be specified in such detail in the budget document as the governor shall determine.
History (12)
- Acts 1937, ch. 33, § 18
- C. Supp. 1950, § 255.18
- Acts 1969, ch. 12, §§ 7-10
- T.C.A. (orig. ed.), § 9-605
- Acts 1992, ch. 896, § 3
- 1993, ch. 66, § 12
- T.C.A. § 9-6-106
- Acts 2002, ch. 510, § 2
- 2002, ch. 875, §§ 4, 7
- 2012, ch. 1026, § 6
- 2013, ch. 243, §§ 6, 19, 20
- 2013, ch. 454, §§ 16, 40.
§ 9-4-5107. Direct and continuing appropriations. - (a) By authorizing the issuance of debt that is not a liability of the state and the payment of debt service thereon by the state school bond authority in title 49, by the local development authority in title 4, by the housing development agency in title 13, and by the state veterans' homes board in title 58, the general assembly intends that such authorizations constitute:
- (1) With respect to each debt issuer listed above, a direct and continuing appropriation to that debt issuer of its earnings, revenues or other assets for expenditures authorized by or pursuant to the respective enabling legislation and the authority to expend those funds in accordance with or pursuant to such legislation; and
- (2) With respect to any public higher education entity whose contracts or agreements with the state school bond authority support the payment of such debt issuer's debt service, a direct and continuing appropriation to that entity of its earnings, revenues or other assets pledged or governed by such contracts or agreements and the authority to expend those funds in accordance with or pursuant to the respective contracts or agreements.
- (b) Such funds are hereby appropriated on a direct and continuing basis to each debt issuer listed in subsection (a) and to each public higher education entity described in subsection (a) for such purposes.
- (c) For purposes of this section, the term “revenues” includes amounts allowable, without regard to any offset, to any such debt issuers from the federal government with respect to qualified bonds.
History (2)
- Acts 2001, ch. 264, § 2
- 2010, ch. 1117, § 6.
§ 9-4-5108. Form of appropriation bill — Capital projects — General legislation — Contents of title. - (a)
- (1) The general appropriations bill, provided for in § 9-4-5106, shall be drawn in such form as to authorize only lump sum appropriations to meet the expenditure needs of the various spending agencies of the state government for the next fiscal year.
- (2) For the expenses of operation and maintenance in each department, division, institution, office, or other agency, there shall be not more than two (2) appropriations, one (1) for personal services and one (1) for other expenses, which shall be allotted before becoming available for expenditure as provided in §§ 9-4-5109 — 9-4-5113.
- (b) Appropriations for capital improvement and capital maintenance projects shall be specified by state agency in lump sums consistent with capital improvement and maintenance projects detailed in the budget document.
- (c) The appropriation bill shall not contain any provisions of general legislation.
- (d) The title of any bill making appropriations from the treasury shall include the phrase, “This act makes appropriations for (here insert the object).” The title shall also state whether the act shall be for a limited period of time or for an indefinite period. If it is for a limited period of time, the title shall state that time period.
- (e) Notwithstanding any other law to the contrary, the appropriations bill may specify incentives or disincentives relative to performance-based budgeting.
History (8)
- Acts 1937, ch. 33, § 21
- C. Supp. 1950, § 255.21
- Acts 1969, ch. 12, §§ 11, 12
- 1977, ch. 393, § 1
- T.C.A. (orig. ed.), § 9-606
- T.C.A. § 9-6-108
- Acts 2002, ch. 875, § 5
- 2012, ch. 1026, § 7.
§ 9-4-5109. Amendment of appropriation recommendations. - The governor may amend or supplement the governor's recommendations as to the general appropriations bill while it is before the general assembly.
History (4)
- Acts 1937, ch. 33, § 23
- C. Supp. 1950, § 255.23
- T.C.A. (orig. ed.), § 9-607
- T.C.A. § 9-6-109.
§ 9-4-5110. Work program — Allotments. - (a) Not later than June 1 of each year, the governor shall require the head of each department, office, and agency of the state government to submit to the commissioner of finance and administration a work program for the ensuing fiscal year, such program to include all appropriations made by the general assembly to such department, office, or agency for its operation and maintenance and for capital projects, and to show the requested allotments of the appropriations by quarters for the entire fiscal year. The governor, with the assistance of the commissioner, shall review the requested allotments with respect to the work program of each department, office, or agency, and shall, if the governor deems it necessary, revise, alter, or change such allotments before approving them. The aggregate of such allotments shall not exceed the total appropriations made by the general assembly to the department, office, or agency for the fiscal year in question. The commissioner shall transmit a copy of the allotments as approved by the governor to the head of each department, office, or agency concerned. The commissioner shall thereupon authorize all expenditures to be made from the appropriations on the basis of such allotments and not otherwise.
- (b) Notwithstanding subsection (a), the speakers of the senate and the house of representatives or, by joint delegation, their director of legislative administration; the chief justice or, by delegation, the administrative director of the courts; the attorney general and reporter; the secretary of state; the comptroller of the treasury; and state treasurer are authorized to revise their respective budgets and personnel authorizations within the appropriations made in the appropriations act and to submit those revised summaries to the commissioner of finance and administration, who shall approve the work program of those agencies, if within the amounts appropriated.
History (7)
- Acts 1937, ch. 33, § 22
- C. Supp. 1950, § 255.22
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- T.C.A. (orig. ed.), § 9-608
- T.C.A. § 9-6-110
- Acts 2013, ch. 454, § 33.
§ 9-4-5111. Reserve allotment. - (a) In order to provide some degree of flexibility to meet emergencies arising during each fiscal year in the expenditures for operation and maintenance of the various departments, offices and agencies of state government, the commissioner of finance and administration, with the approval of the governor, may require the head of each department, office, or agency, in making the original allotments, to set aside a reserve, the exact amount of which shall be determined by the commissioner of finance and administration, of the total amount appropriated to the department, office, or agency.
- (b) At any time during the fiscal year, this reserve or any portion of it may be returned to the appropriation to which it belongs and may be added to any one (1) or more of the allotments; provided, that the commissioner deems such action necessary, and any unused portion thereof shall remain at the end of the fiscal year as an unexpended balance of appropriation. Any unexpended and unencumbered balance of allotments at the end of each quarter shall be credited to the reserve set up for the fiscal year.
- (c) During fiscal year 2020-2021, before requiring each head to set aside a reserve pursuant to subsection (a) or otherwise reserving allotments pursuant to this section, the commissioner of finance and administration shall submit written notice of the proposed reserve allotment to the speakers of the senate and the house of representatives and to the chairs of the finance, ways and means committees of the senate and house of representatives. No such allotments shall be reserved until the speakers and chairs have acknowledged in writing receipt of such written notice. When submitted, a copy of the notice shall be provided to the fiscal review committee executive director and the office of legislative budget analysis directors for information purposes. A proposed reserve allotment shall not be acknowledged by the chairs during a time that the general assembly is in regular, annual session until each finance, ways and means committee has held a hearing on the proposed allotment, or the committees have held a joint hearing.
History (7)
- Acts 1937, ch. 33, § 22
- C. Supp. 1950, § 255.22
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- T.C.A. (orig. ed.), § 9-609
- T.C.A. § 9-6-111
- Acts 2020, ch. 759, § 14.
§ 9-4-5112. Revision of work programs. - (a) The head of any department, office, or agency of the state government, whenever such head deems it necessary by reason of changed conditions, may revise the work program of such head's department, office, or agency at the beginning of any quarter during the fiscal year, and submit such revised program to the commissioner of finance and administration, with such head's request for a revision of the allotments of the remaining quarters of that fiscal year. If, upon such reexamination of the work program, the commissioner, with the approval of the governor, decides to grant the request for the revision of the allotments, the same procedure, so far as it relates to review, approval, and control, shall be followed as in the making of the original allotments.
- (b) Revisions to the work programs of the secretary of state, comptroller of the treasury, and state treasurer shall be approved by the commissioner of finance and administration if submitted in accordance with the appropriations act, if within the amounts appropriated, and if submitted with the concurrence of the speaker of the senate and the speaker of the house of representatives.
History (7)
- Acts 1937, ch. 33, § 22
- C. Supp. 1950, § 255.22
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- T.C.A. (orig. ed.), § 9-610
- T.C.A. § 9-6-112
- Acts 2013, ch. 454, § 34.
§ 9-4-5113. Certification of funds to meet obligations. - (a) No department or officer under such department shall enter into any contract, agreement, or obligation, involving the expenditure of money, unless the commissioner of finance and administration shall first certify that there is a balance in the appropriation from which such obligation is required to be paid, that is not otherwise encumbered to pay obligations previously incurred.
- (b) Subsection (a) shall not apply to the general assembly, state court system, attorney general and reporter, district attorneys general, district public defenders, office of the post-conviction defender, secretary of state, comptroller of the treasury, and the state treasurer; provided, however, that the chief administrative officer for each of these agencies shall ensure, before entering into any contract, agreement, or obligation involving the expenditure of money, that there is a balance in the appropriation from which such obligation is required to be paid that is not otherwise encumbered to pay obligations previously incurred.
- (c) All funds appropriated to the secretary of state, comptroller of the treasury, and state treasurer shall be administered in a ministerial capacity by the department of finance and administration in accordance with budgets and any revisions thereto of the respective entities for which such appropriations are made.
History (9)
- Acts 1923, ch. 7, § 17
- Code 1932, § 279
- C. Supp. 1950, § 255.22
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- T.C.A. (orig. ed.), § 9-611
- T.C.A. § 9-6-113
- Acts 2013, ch. 454, § 24
- 2014, ch. 917, § 3.
§ 9-4-5114. Obligations after fiscal year prohibited — Allotments required. - No appropriation shall confer authority to incur an obligation after the termination of the fiscal year to which it relates. No appropriation to any state department, institution, office, or agency, excepting the general assembly, shall become available for expenditure until allotted upon the basis of a work program, duly approved by the governor, as provided in §§ 9-4-5110 — 9-4-5112.
History (4)
- Acts 1937, ch. 33, § 25
- C. Supp. 1950, § 255.25
- T.C.A. (orig. ed.), § 9-612
- T.C.A. § 9-6-114.
§ 9-4-5115. State funds received by local government unit not to be expended for costs of lawsuit against state in which local government unit is plaintiff. - (a) No state funds received by a local government unit shall be expended to pay attorney's fees, court costs, or other expenses attributable to a lawsuit filed against the state, a state agency, or a state official in which the local government unit is named as a plaintiff. If the state, agency, or official prevails in the lawsuit, then the department of finance and administration shall deduct from the local government unit's allocation of state-shared taxes, in the case of a city or county, or allocation of funds based on the Tennessee investment in student achievement formula (TISA), in the case of an LEA, such sum or part of such sum to recover attorney's fees, court costs, and other expenses attributable to defending the state in the lawsuit.
- (b) As used in this section, “local government unit” means a county, municipality, or local education agency (LEA) as defined in § 49-1-103.
History (2)
- Acts 2015, ch. 425, § 4
- 2022, ch. 966, § 96.
§ 9-4-5116. Abortion funding. - No state funds shall be expended to perform abortions. The limitations established in this section shall not apply to an abortion if:
- (1) The pregnancy is the result of an act of rape or incest; or
- (2) In the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless the abortion is performed.
History (1)
- Acts 2003, ch. 355, § 67.
§ 9-4-5117. Certification of board fees — Regulatory fees. - (a) Notwithstanding any law to the contrary, upon receiving from the commissioner of finance and administration the approved work program, as provided in § 9-4-5110, for the department of commerce and insurance, division of regulatory boards, and department of health, division of health-related boards, the commissioners of those departments shall certify by October 31 to the commissioner of finance and administration and, as applicable, to the director of the division of regulatory boards, as defined in § 4-3-1304, and to the director of the division of health-related boards, as defined in § 63-1-131, the total amount of board fee revenue required by each board for the current fiscal year, based on the approved work program. The commissioners of commerce and insurance and of health shall include the direct costs allocated to each board for the then-current fiscal year and shall reduce the certified amount by the amount of any excess fees from the immediately preceding two-year period, it being the legislative intent that fees and expenditures should be equal over a two-year period for each board, as provided in § 4-29-121. Such certification shall not preclude the retention of any board fee revenue estimated to be required for support of each board's operation for the then-current two-year period.
- (b)
- (1) The fee established pursuant to the amounts certified as set forth in subsection (a) shall be designated as the board fee.
- (2) In addition to the board fee, each regulatory board shall also assess a state regulatory fee in such amount as is set each year in the general appropriations act. The state regulatory fee shall be in lieu of any allocation of indirect costs that would otherwise be allocated to such boards.
- (c)
- (1) Within sixty (60) days after receiving the certification of the amount of fees required by each board, the director of the division of regulatory boards and the director of the division of health-related boards shall provide the commissioner of finance and administration with an official estimate of fees to be collected by each board for the fiscal year.
- (2) To the extent the estimate of fees for an individual board is less than the certified amount, the appropriation for that board shall be reduced in the amount of the deficiency, and the commissioner of finance and administration is directed to reduce the budget of the board accordingly.
- (3) The general assembly may supplement any board's appropriation from fee revenue by an appropriation of tax revenue by making a specific appropriation of such tax revenue in the general appropriations act.
History (4)
- Acts 1989, ch. 523, § 1
- 2012, ch. 714, § 1
- 2013, ch. 454, §§ 10-13
- T.C.A. § 4-3-1011.
§ 9-4-5118. State funds not to be expended to pay municipality’s public indebtedness. - (a) No state funds shall be expended to pay the public indebtedness of any municipality; provided, however, that this subsection (a) does not preclude any municipality from utilizing its allocation of state-shared taxes for the purpose of paying its public indebtedness.
- (b) As used in this section, unless the context otherwise requires:
- (1) “Public indebtedness” means the bonds, notes or other evidence of indebtedness lawfully issued or assumed;
- (2) “State departmental revenues” means:
- (A) Earnings or charges for goods or services; or
- (B) Donations, contributions or participation by political subdivisions, foundations, corporations, firms or persons;
- (3) “State funds” means state departmental revenues or state revenues;
- (4) “State revenues” means the proceeds collected from taxes, licenses, fees, fines, forfeitures or other imposts laid specifically by law for state government; and
- (5) “State-shared taxes” means taxes imposed and collected by the state pursuant to law and allocated by law among units of local government.
- (c) This section shall not be construed as limiting the authority provided in chapter 13, part 2 of this title or chapter 21, part 7 of this title.
§ 9-4-5119. Prohibited use of state funds by University of Tennessee — Use of funds in budget of office of diversity and inclusion. - (a) State funds shall not be expended by the University of Tennessee to promote the use of gender neutral pronouns, to promote or inhibit the celebration of religious holidays, or to fund or support sex week.
- (b) All funds in the budget of the office for diversity and inclusion at the University of Tennessee, Knoxville, for fiscal year 2016-2017, shall be reallocated in the university's budget and used by the university solely for scholarships to be awarded through a minority engineering scholarship program. Any funds from the budget of the office for diversity and inclusion that are not used for minority engineering scholarships in fiscal year 2016-2017 shall remain in the scholarship program for use in future fiscal years.
History (1)
- Acts 2016, ch. 1066, §§ 1, 2.
Part 52 Estimated Rate of Growth of Economy; Limitation on Appropriations § 9-4-5201. Basis for estimated rate of growth of economy. - (a) The estimated rate of growth of the state's economy shall be based upon the projected change in Tennessee personal income.
- (b) Tennessee personal income shall consist of those sources of income included in the United States department of commerce's definition of “personal income.”
History (2)
- Acts 1979, ch. 408, § 1
- T.C.A., §§ 9-621, 9-6-201.
§ 9-4-5202. Reports of estimated rate of growth of economy — Duties of state funding board. - (a) At least once each year, and whenever requested to do so by the commissioner of finance and administration or by the joint request of the chairs of the finance, ways and means committees of the senate and house of representatives, the state funding board shall secure from the Tennessee econometric model a report of the estimated rate of growth of the state's economy. Such report shall include the major assumptions and the methodology used in arriving at such estimate.
- (b) Upon receiving the report specified in subsection (a), the state funding board shall make comments relating to the reasonableness of the estimate, including any different estimate the board deems necessary. The board shall also enclose a list identifying state tax revenue sources and nontax revenue sources, approved by the attorney general and reporter. The department of finance and administration shall provide to the board revenue estimates for each source. The department of revenue shall provide to the board estimates of growth in franchise and excise tax revenue and include in the estimates a description of whether the growth is nonrecurring or recurring.
- (c) In the event data from Tennessee econometric model is unavailable, the funding board, after consulting with the finance, ways and means committees of the senate and house of representatives, shall obtain and/or prepare a report of the estimated rate of growth of the state's economy.
- (d) The reports specified in subsections (a), (b) and (c) shall be forwarded to the commissioner of finance and administration and to each member of the general assembly, after review and definitive comment by the finance, ways and means committees of the senate and house of representatives.
- (e)
- (1) In November of each year, the state funding board shall conduct public hearings to develop estimates of state revenue for the upcoming fiscal year, as well as any revisions to the current fiscal year estimates, as the board deems appropriate. All estimates shall be adopted by a majority vote of the entire board.
- (2) The funding board shall request economic forecasts and revenue estimates from representatives of state higher education institution business centers located in each of the grand divisions and such other groups or persons as the funding board deems appropriate.
- (3) On December 1, or as soon thereafter as practical, the funding board shall present its state revenue estimates, together with a summary of the economic forecast upon which the estimates are based, to the governor and the chairs of the finance, ways and means committees of the senate and house of representatives. If, in the opinion of the funding board, circumstances warrant a review of state revenue estimates it has previously presented, or upon a request of the chairs, the funding board shall consider information it deems necessary and appropriate and may revise its state revenue estimates if appropriate. Any revision to its revenue estimates and reasons therefor shall be forwarded to the governor and chairs.
- (4) The funding board shall identify and report in its presentation of state revenue estimates whether any growth in franchise and excise tax revenue is nonrecurring or recurring.
History (6)
- Acts 1979, ch. 408, § 2
- T.C.A., § 9-622
- Acts 1993, ch. 303, § 1
- T.C.A. § 9-6-202
- Acts 2015, ch. 92, §§ 1, 2
- 2018, ch. 1031, § 1.
§ 9-4-5203. Governor's budget document — Appropriations exceeding growth of state's economy — Bills — Index. - (a) The budget document presented by the governor to the general assembly shall include a statement or showing projecting Tennessee personal income as provided in § 9-4-5201, for the ensuing fiscal year, for the calendar year in progress, for the fiscal year in progress, for the latest completed calendar year, and for calendar year 1977.
- (b) The budget document presented by the governor shall also include a statement or a summary showing recommended appropriations from state tax revenues for the ensuing fiscal year, such actual appropriations for the fiscal year in progress, and the 1977-1978 fiscal year appropriations from state tax revenues.
- (c)
- (1) When in any budget document the percentage increase of recommended appropriations from state tax revenues exceeds the percentage increase of estimated Tennessee personal income as defined in § 9-4-5201, for the ensuing fiscal year, the governor shall submit a bill or bills for introduction in both houses of the general assembly which shall contain no other subject matter and shall set forth the dollar and percentage by which the estimated growth of the state's economy is exceeded by the appropriations of state tax revenue in accordance with the Constitution of Tennessee, Article II, § 24.
- (2) For purposes of determining compliance with this section and with the Constitution of Tennessee, Article II, § 24:
- (A) Funds allocated to the reserve for revenue fluctuations shall not be included as appropriations from state tax revenues; and
- (B) Funds expended from the reserve for revenue fluctuations to offset shortfalls in state tax revenue in accordance with § 9-4-211(b) shall not be included as appropriations from state tax revenues.
- (d) When the percentage increase of appropriations of state tax revenue by the general assembly exceeds the percentage increase of estimated Tennessee personal income as defined in § 9-4-5201, for the ensuing fiscal year, the general assembly shall by law containing no other subject matter, set forth the dollar and the percentage by which the estimated growth of the state's economy is exceeded by the appropriations of state tax revenue in accordance with Constitution of Tennessee, Article II, § 24.
- (e)
- (1) The index of appropriations from state tax revenues for the 2011-2012 fiscal year may exceed the index of estimated growth in the state's economy by two hundred fifty million dollars ($250,000,000) or two and one one-hundredths percent (2.01%).
- (2) The index of appropriations from state tax revenues for the 2012-2013 fiscal year may exceed the index of estimated growth in the state's economy by one hundred thirty-two million five hundred thousand dollars ($132,500,000) or one percent (1.0%).
- (3) The index of appropriations from state tax revenues for the 2016-2017 fiscal year may exceed the index of estimated growth in the state's economy by four hundred thirty-eight million dollars ($438,000,000) or two and eighty-five hundredths percent (2.85%).
- (4) The index of appropriations from state tax revenues for the 2019-2020 fiscal year may exceed the index of estimated growth in the state's economy by six hundred twenty-nine million dollars ($629,000,000) or three and six-tenths percent (3.6%).
- (5) The index of appropriations from state tax revenues for the 2021-2022 fiscal year may exceed the index of estimated growth in the state's economy by two billion nine hundred ninety-seven million six hundred thousand dollars ($2,997,600,000) or sixteen and eight hundredths percent (16.08%).
- (6) The index of appropriations from state tax revenues for the 2022-2023 fiscal year may exceed the index of estimated growth in the state's economy by two billion five hundred thirty-six million six hundred thousand dollars ($2,536,600,000) or eleven and forty-five hundredths percent (11.45%).
History (30)
- Acts 1979, ch. 408, § 3
- T.C.A., § 9-623
- Acts 1984 (1st Ex. Sess.), ch. 9, § 1
- 1984 (1st Ex. Sess.), ch. 11, § 1
- 1985, ch. 446, § 1
- 1985, ch. 447, § 1
- 1986, ch. 938, § 1
- 1989, ch. 577, § 1
- 1989, ch. 578, § 1
- 1991, ch. 520, § 1
- 1992, ch. 1004, § 1
- 1997, ch. 512, § 1
- T.C.A. § 9-6-203
- Acts 1999, ch. 402, § 1
- 2000, ch. 992, § 1
- 2002, ch. 857, § 1
- 2004, ch. 960, § 1
- 2007, ch. 589, § 1
- 2007, ch. 590, § 1
- 2009, ch. 553, § 1
- 2010, ch. 1110, § 1
- 2011, ch. 471, § 1
- 2012, ch. 1025, § 1
- 2013, ch. 451, § 1
- 2017, ch. 463, § 1
- 2018, ch. 689, § 1
- 2020, ch. 650, § 1
- 2021, ch. 457, § 1
- 2022, ch. 1132, § 1
- 2023, ch. 419, § 1.
Part 53 State Sharing § 9-4-5301. Statutes providing base apportionment for determining additional state revenues. - Funds apportioned as state-shared taxes to county and municipal governments for any fiscal year under authority of the following statutes shall provide the base apportionment for the purpose of determining the availability of additional state revenues to meet the requirement of the Constitution of Tennessee, Article II, § 24 that the state share in the cost of any law of general application imposing increased expenditure requirements on cities and counties:
- (1) Retailers' sales tax, as authorized by title 67, chapter 6, and apportioned by § 67-6-103;
- (2) Gross receipts taxes, such portions as are authorized as payments to the state from the Tennessee Valley authority under § 13 of the act of congress creating the authority, as amended, and apportioned under §§ 67-9-101(a)(2) and 67-9-102(a);
- (3) Income tax on dividends and interest, as authorized by title 67, chapter 2, and apportioned by § 67-2-119;
- (4) Special privilege tax on beer, as authorized by title 57, chapter 5, and apportioned by § 57-5-205;
- (5) Gross receipts tax on alcoholic beverages consumed on premises, as authorized by title 57, chapter 4, and apportioned by § 57-4-306; and
- (6) Tax on sale or distribution of wine and spirits, as authorized by title 57, chapter 3, and apportioned by § 57-3-306.
History (3)
- Acts 1979, ch. 436, § 1
- T.C.A., §§ 9-631, 9-6-301
- Acts 2014, ch. 901, § 3.
§ 9-4-5302. Governor's budget to show increase in apportionment — Amount of increase available to local governments. - (a) Beginning with fiscal year 1980-1981, the budget document submitted by the governor to the general assembly shall indicate the amount of increase in the apportionment of the funds specified in § 9-4-5301 to incorporated municipalities and to county governments above apportionments for the previous year.
- (b) An amount of one million dollars ($1,000,000) of such increase shall be available for allocation to incorporated municipalities and to county governments as needed, to provide the state's share of any contribution required to fund any law of general application which requires, without local discretion, that incorporated municipalities or county governments increase expenditures as a direct consequence of the passage of any general law; provided, that when the cost of any such law is estimated to exceed fifty thousand dollars ($50,000), the source and amount of funding from state funds shall be set forth in such law.
- (c) In the event the source and amount of funding from state funds is not set forth in such law, such sources and amounts shall be set forth in the general appropriations act enacted during the same session as such general law.
History (2)
- Acts 1979, ch. 436, § 2
- T.C.A., §§ 9-632, 9-6-302.
§ 9-4-5303. List of laws requiring increased local government expenditures — Report of allocations required to provide funding. - (a) Prior to approval of the general appropriation act by committees on finance, ways and means of the senate and the house of representatives, the commissioner of finance and administration shall certify in writing to the chairs of those committees a listing of all laws of general application which have been adopted and signed by the governor, whose passage will require increased incorporated municipality expenditures or county government expenditures within the meaning of the fourth paragraph of the Constitution of Tennessee, Article II, § 24.
- (b) Such certification shall, to the extent possible, cite the specific costs attributed to each law by the fiscal notes prepared by the fiscal review committee, with such adjustments as are necessary to reflect the effect of any amendments or other changing circumstances.
- (c) Following receipt of such certification from the commissioner, the committees shall report in writing to the speakers of the house of representatives and the senate, with copy to the commissioner and the comptroller of the treasury, the extent of allocations from the increases in the funds identified in § 9-4-5301 required to provide the state's share of the funding of any such incorporated municipality expenditure increase or county government expenditure increase.
- (d) Any law of general application requiring increased incorporated municipality expenditures or increased county government expenditures which passes and is signed following the certification required by this section shall be identified in like manner in a supplemental certification to the committees, which shall file with the speakers, with copy to the commissioner and the comptroller of the treasury, a cumulative report indicating total assessments against such increases identified in § 9-4-5302.
History (2)
- Acts 1979, ch. 436, § 3
- T.C.A., §§ 9-633, 9-6-303.
§ 9-4-5304. Procedure for meeting requirement that state share increased expenditures. - For any bill requiring increased expenditures by cities and counties in an amount exceeding that level established in § 9-4-5302, the general assembly shall follow the procedure established in this section in meeting the requirement that the state share in the cost of such bill:
- (1) A fiscal note prepared by the fiscal review committee shall be furnished indicating the fiscal effect of such bill and whether or not such legislation imposes an increased expenditure requirement on cities and counties;
- (2) If the legislation imposes an increased expenditure requirement on cities or counties, then such legislation shall be amended in committee to indicate the state share of such expenditure;
- (3) The sponsor of such legislation shall cause an amendment to the general appropriations act to be prepared to fund the state share and shall present such amendment to the standing committee to which such legislation is referred and to the finance, ways and means committees or on the floor of the senate or the house of representatives when the general appropriations act is being considered; and
- (4) Such amendment to the general appropriations act shall state the amount appropriated to fund the state share.
History (2)
- Acts 1979, ch. 436, § 4
- T.C.A., §§ 9-634, 9-6-304.
§ 9-4-5305. Construction of this part. - Nothing in this part shall be construed to reduce the apportionment to local governments of the total amounts due under the statutes cited in § 9-4-5301.
History (2)
- Acts 1979, ch. 436, § 6
- T.C.A., §§ 9-635, 9-6-305.
§ 9-4-5306. Locality does not meet municipality requirements. - (a) Notwithstanding any law to the contrary,
- IF, after July 1, 1998, a locality is deemed by the state to be a municipality for purposes of distributing grants or state-shared taxes; AND
- IF, thereafter the locality, acting in good faith and under color of law and for municipal purposes, receives and expends or obligates grants or state-shared taxes; AND
- IF, thereafter it is judicially determined that the locality was not incorporated in accordance with the requirements of law and, therefore, is not a municipality; THEN
- Neither the locality nor any person who acted on behalf of the locality is required to return or repay such grants or state-shared taxes; however, subject to § 67-5-104(c), any portion of such grants or state-shared taxes, that remains unexpended and unobligated, shall become assets of the county.
- (b) As used in subsection (a), “the locality, acting in good faith and under color of law and for municipal purposes, … expends” includes, but is not limited to, reimbursement paid from grants or state-shared taxes for documented, reasonable expenses of municipal incorporation that were paid out-of-pocket by one (1) or more residents acting on behalf of the locality and its incorporation.
Part 54 Block Grant Review Act of 1996 § 9-4-5401. Short title. - This part shall be known and may be cited as the “Block Grant Review Act of 1996.”
History (2)
- Acts 1996, ch. 1062, § 1
- T.C.A. § 9-6-401.
§ 9-4-5402. Purpose. - The purpose of this part is to require state agencies to act with deliberate planning and with maximum feasible input of concerned citizens, religious congregations, nonprofit agencies and service providers and their clients/customers and board members and local government officials, in implementing reorganizations and new priority decisions related to receipt of federal block grants or other state decisions related to the devolution of policy and funding decisions from the federal government to the state.
History (2)
- Acts 1996, ch. 1062, § 2
- T.C.A. § 9-6-402.
§ 9-4-5403. Considerations in block grants and federal devolution. - To the greatest extent practicable and as permitted by law, each state agency shall make block grant and federal devolution decisions based on the following principles:
- (1) Minimizing harmful impacts on current programs, current and potential recipients of assistance, local governments, nonprofit agencies and the state economy;
- (2) Ensuring formal and informal participation of concerned citizens, regulated industry or other entities, environmental groups, religious organizations, nonprofit agencies and service providers and their clients/customers and board members and local government officials in proposed reorganizations and new priority decisions, so that their experience may be used creatively by state decision makers; and
- (3) Providing the above-referenced groups and categories of citizens with full and prompt access to information on new policy and funding and program organization related to block grants and federal devolution of authority.
History (2)
- Acts 1996, ch. 1062, § 3
- T.C.A. § 9-6-403.
§ 9-4-5404. Reporting requirements. - Each state agency responsible for making or recommending decisions on block grants and related topics shall issue a written report by February 1 each year to the finance, ways and means committee of the senate; and the finance, ways and means committee of the house of representatives; the health and welfare committee of the senate; the health committee of the house of representatives; the energy, agriculture and natural resources committee of the senate; the agriculture and natural resources committee of the house of representatives; the legislative office of budget analysis; and the governor. This report shall detail block grant and federal devolution decisions made or recommended by the agency and how those decisions made or recommended implement or fail to implement the principles outlined in § 9-4-5403. Each agency that submits this report shall include in the report an executive summary of the major priority decisions and reorganizations related to receipt of the federal block grants or federal devolution decisions.
History (7)
- Acts 1996, ch. 1062, § 4
- T.C.A. § 9-6-404
- Acts 2010, ch. 1030, § 10
- 2011, ch. 410, § 3(b)
- 2012, ch. 604, § 8
- 2013, ch. 236, § 83
- 2016, ch. 797, § 1.
§ 9-4-5405. Compliance — Financial costs. - The head of each state agency shall be responsible for ensuring compliance with this part, with the financial costs of compliance being assumed by each state agency.
History (2)
- Acts 1996, ch. 1062, § 5
- T.C.A. § 9-6-405.
§ 9-4-5406. Report summarizing funds allocated. - On or before February 1 of each year, each state agency shall submit a written report to the clerks of the senate and the house of representatives to be distributed to all members of the finance, ways and means committees of the senate and the house of representatives summarizing the amount of funds allocated from federal block grants or other federal funds in the preceding fiscal year. The report must also summarize the purposes for which the funds were expended in such fiscal year, the amount of such funds that was unexpended, and any amount that was returned to the federal agency that supplied the original federal block grant or funds.
Part 56 Tennessee Governmental Accountability Act of 2013 § 9-4-5601. Short title. - This part shall be known and may be cited as the “Tennessee Governmental Accountability Act of 2013.”
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 7.
§ 9-4-5602. Implementation of system of strategic planning, performance measures, and performance review. - The general assembly finds and declares that accountability in program performance is vital to effective and efficient delivery of governmental services, and to maintain public confidence and trust in government. To maximize accountability, a system of strategic planning, program performance measures, and performance audits should be implemented to measure the effectiveness and efficiency of governmental services. It is of paramount public importance that this system encourages full and candid participation by all agencies of state government. This system will generate information necessary to inform the public fully and for the general assembly to make meaningful decisions about the allocation of scarce resources in meeting vital needs.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 8.
§ 9-4-5603. Application. - The strategic planning, program performance measures, and performance review requirements of this part shall apply to all agencies unless exempted in this part or exempted by the commissioner of finance and administration.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 9.
§ 9-4-5604. Part definitions. - As used in this part, unless the context otherwise requires:
- (1) “Agency” or “state agency” means any unit organization of the executive department, including any official, department, board, commission, division, bureau, section, district, office, authority, committee, or council or any other unit of state government, however designated, including, without limitation, higher education. For purposes of this part, “agency” or “state agency” shall not include the governor's office, the judicial department, the comptroller of the treasury state treasurer, secretary of state, attorney general and reporter or the legislative department. For purposes of this part, “judicial department” means the court system, district attorneys general conference, district public defenders conference, and the office of post-conviction defender;
- (2) “Baseline data” means indicators of a state agency's current performance level, pursuant to guidelines established by the commissioner of finance and administration;
- (3) “Commissioner” means the commissioner of finance and administration;
- (4) “Outcome” means an indicator of the actual impact or public benefit of a program;
- (5) “Output” means the actual service or product delivered by a state agency;
- (6) “Performance measure” means a quantitative or qualitative indicator used to assess state agency performance, including outcome and output indicators;
- (7) “Program” means a set of activities undertaken in accordance with a plan of action organized to realize identifiable goals and objectives. These activities are chosen by the department of finance and administration in consultation with the agency or state agency to be measured in order to support the overall goals and objectives of the department; and
- (8) “Standard” means the desired level of performance of a program, measured by outcome or output.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 10.
§ 9-4-5605. Legislative intent. - (a) It is the legislative intent that the requirements of this part constitute a new approach to measuring the strategic functions and operations of each department in order for the state government to operate more efficiently and effectively.
- (b) The comptroller of the treasury shall have authority to employ outside consultants and entities with expertise in governmental finance and performance review for the purpose of conducting performance reviews or otherwise fulfilling the comptroller's duties under this part. The performance reviews required under this part may be conducted by a private entity selected by the comptroller, subject to the competitive bidding requirements of title 12, chapter 4.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 11.
§ 9-4-5606. Development of performance measures and standards — Submission of strategic plan and proposed performance measures and standards. - (a) The commissioner of finance and administration shall annually issue instructions for the strategic plans and for the development of performance measures and standards for each program.
- (b) By August 15 of each year, each state agency subject to this part is required to submit to the commissioner of finance and administration, in a form to be specified by the commissioner, a draft strategic plan and proposed performance measures and standards for each program. Such state agencies shall also identify the outputs or outcomes produced by each program, baseline data associated with each performance measure, and performance standards. Performance measures and standards shall be reviewed by the commissioner of finance and administration and revised as deemed necessary by the commissioner of finance and administration.
- (c) Each state agency subject to this part shall submit to the commissioner of finance and administration any documentation required by the commissioner regarding the validity, reliability, and appropriateness of each performance measure and standard and regarding how the strategic plan and the performance measures are used in management decision-making and other agency processes.
- (d)
- (1) Annually, at a time to be determined by the commissioner of finance and administration after the general appropriations act becomes law, state agencies may submit to the commissioner any adjustments to their performance measures and standards based on the amounts appropriated for each program by the general assembly. The chairs of the finance, ways and means committees of the senate and the house of representatives may request updated performance measures based on the increase or decrease of appropriations in the given year.
- (2) At any time during the fiscal year in which a state agency, by restraining order, injunction, consent decree, settlement, or any final judgment of a court of competent jurisdiction, or by law or executive order, is required to modify its operations, or the state agency receives additional federal or other funding, the state agency may submit to the commissioner of finance and administration any necessary adjustments to its performance measures and standards.
- (3) When an adjustment is made pursuant to subdivisions (d)(1) and (2), all performance measures and standards, including any adjustments made, shall be submitted to and reviewed and revised as necessary by the commissioner of finance and administration. The commissioner shall maintain the official record of adjustments to the performance measures and standards and shall update the reports accordingly. Programs that have been eliminated or added from the report in a given year shall be indicated in the annual report or when the report is updated.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 12.
§ 9-4-5608. Evaluation of compliance — Report. - (a) The commissioner of finance and administration shall evaluate at least annually each state agency's strategic plan and program performance measures. When necessary the commissioner of finance and administration shall update each state agency's strategic plan and program performance measures. Such updates shall include comments from the state agency when necessary to explain how the program is performing.
- (b) The commissioner of finance and administration may make recommendations to the governor and the finance, ways, and means committees of the senate and the house of representatives concerning the following nonexhaustive performance measure incentives or disincentives for potential inclusion in the appropriations bill:
- (1) Incentives may include, but are not limited to:
- (A) Additional flexibility in budget management;
- (B) Additional flexibility in salary rate and position management, notwithstanding title 8, chapter 23, or any other law to the contrary;
- (C) Retention of up to fifty percent (50%) of unexpended and unencumbered balances of appropriations, excluding special categories and grants in aid, that may be used for nonrecurring purposes including, but not limited to, lump-sum bonuses, employee training, or productivity enhancements, including technology and other improvements; and
- (D) Additional funds to be used for, but not limited to, lump-sum bonuses, employee training, or productivity enhancements, including technology and other improvements;
- (2) Disincentives may include, but are not limited to:
- (A) Mandatory quarterly reports to the governor on the agency's progress in meeting performance standards;
- (B) Mandatory quarterly appearances before the governor to report on the agency's progress in meeting performance standards;
- (C) Elimination or restructuring of the program, which may include, but not be limited to, transfer of the program or outsourcing all or a portion of the program;
- (D) Reduction of total positions for a program;
- (E) Restriction on or reduction of the appropriation for the program; and
- (F) Reduction of managerial salaries, notwithstanding the requirements of title 8, chapter 23, or any other law to the contrary.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 14.
§ 9-4-5609. Preparation of strategic plan. - (a)
- (1) Beginning August 15, 2013, and each year thereafter, each state agency subject to this part, shall submit a draft strategic plan and the agency's programs chosen for the program performance measures to the department of finance and administration for review, modification, and approval. Each strategic plan and program performance plan shall be submitted to the general assembly and the governor not later than September 30 of each year and shall cover the fiscal year in effect as of the date of the report.
- (2) The programs report shall include, but not be limited to, the following matters:
- (A) A clear statement of the purpose for each program;
- (B) A description of the program, when such information is needed to explain the program;
- (C) The funding amount of each program, when such information is identifiable by agency;
- (D) The outcomes or outputs produced by each program; and
- (E) The historical trends of outputs or outcomes of the program, when such information is available.
- (b)
- (1)
- (A) The Tennessee higher education commission shall submit to the commissioner of finance and administration a single strategic plan, with the advice of the University of Tennessee, the state university and community college system, and the Tennessee student assistance corporation.
- (B) The comptroller of the treasury, state treasurer, secretary of state, and attorney general and reporter shall prepare their strategic plans separately.
- (C) The administrative office of the courts shall prepare a strategic plan separately on behalf of the court system. Such plan shall include the court system, the district attorneys general conference, the district public defenders conference, and the office of post-conviction defender.
- (D) The joint legislative services committee shall prepare a strategic plan separately on behalf of the legislative department.
- (2) Each strategic plan shall be submitted to the general assembly and the governor not later than September 30 of each year and shall cover the fiscal year in effect as of the date of the report.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 15.
§ 9-4-5610. Performance review. - (a) Each state agency shall be subject to a performance review of its activities by the comptroller of the treasury.
- (b) The performance review shall include such matters as the comptroller of the treasury deems appropriate related to the manner in which the entity is delivering its services and achieving its objectives, including but not limited to:
- (1) The efficient use of all state and federal resources and user fees;
- (2) Additional non-state revenue or cost savings that the entity could achieve; and
- (3) The extent to which the entity has achieved the objectives of its strategic plan.
- (c) Each entity subject to a performance review shall cooperate fully with the comptroller of the treasury and shall timely provide all relevant documents and requested information. If any entity refuses to provide any requested documents or information, the comptroller shall include such refusal in its report, as well as the reasons given by the entity for not furnishing the documents or information.
§ 9-4-5611. Admissibility of information in judicial proceeding or administrative hearing. - (a) Notwithstanding subsection (c), to achieve full and candid participation in the planning and audit process, no strategic plan or performance review, or any information generated solely for or by any such plan or review, shall be admissible in any judicial proceeding or administrative hearing.
- (b) Any documents or information referenced in any such plan or audit that exist independently of the planning and review process shall not be subject to the prohibition of subsection (a). The admissibility of such documents and information shall be determined in accordance with the rules of evidence and standards otherwise applicable to any such proceeding.
- (c) Each strategic plan and performance review shall be a public record under title 10, chapter 7.
§ 9-4-5612. Proposed instructions for the development of performance measures for the legislature. - The director of the office of legislative administration shall develop and submit to the joint legislative services committee proposed instructions for the development of performance measures for the legislative department. The joint legislative services committee shall review such proposed instructions, may revise or amend the proposed instructions, and shall adopt final instructions for the development of such performance measures.
History (2)
- Acts 2002, ch. 875, § 1
- 2013, ch. 243, § 16.
Chapter 5 State Lending Transparency Act § 9-5-102. Chapter definitions. - As used in this chapter:
- (1) “Governmental entity” means a branch, department, agency, commission, or instrumentality of state or local government;
- (2) “Local government” means a county, municipality, city, or other political subdivision of this state;
- (3) “State credit support program” means a state program that guarantees or provides credit enhancements, such as state support for interest or principal payments, to the debt of private parties or governmental entities, under which the state is required to provide money if the borrower fails to pay; and
- (4) “State lending program” means a state program that offers money to private parties or governmental entities with the expectation of repayment.
§ 9-5-103. Report on state lending programs and state credit support programs. - (a)
- (1) At the end of each fiscal year, the comptroller of the treasury shall report on all state lending programs and state credit support programs in a single document, including a cite to each individual lending program's statutory authority.
- (2) The report must include:
- (A) The total dollar amount of all lending in state lending programs and the total amount of all debt supported by state credit support programs, and the totals for each individual program; and
- (B) Reasonable estimates of the cost of likely defaults on all state lending programs and state credit support programs, using generally accepted accounting principles for credit losses, and the estimates for each individual program.
- (b)
- (1) The comptroller of the treasury shall provide the report required under subsection (a) to:
- (A) Each member of the general assembly; and
- (B) The commissioner of finance and administration.
- (2) The report may be provided electronically.
§ 9-5-104. Inclusion in proposed state budget. - (a) As used in this section:
- (1) “Department” means the department of finance and administration; and
- (2) “Division” means the department's division of budget.
- (b)
- (1) The division shall include in the proposed state budget for each fiscal year:
- (A) The likely changes in returns or likely defaults from state lending and state credit support programs from the previous fiscal year as either new expenses or new revenues;
- (B) The changes in expenses or revenues from state lending programs and state credit support programs from the previous fiscal year as expenses or revenues for the purpose of calculating a balanced budget; and
- (C) An estimate by the comptroller of the treasury of the likely cost of defaults to the state from all state lending programs and state credit support programs created during the fiscal year, calculated using generally accepted accounting principles, as expenses for the purpose of calculating a balanced budget.
- (2) The department may use the information provided by the comptroller of the treasury's report to determine the information described in subdivision (b)(1).
Chapter 8 Board of Claims Part 1 Establishment and Operation of Board § 9-8-101. Board established — Membership — Chair — Claims not within jurisdiction. - (a) A board of claims whose membership is composed of the commissioner of human resources or such commissioner's designee, the commissioner of finance and administration or such commissioner's designee, the state treasurer or the state treasurer's designee, the comptroller of the treasury or the comptroller's designee, and the secretary of state or the secretary of state's designee is hereby established.
- (b) The state treasurer or the state treasurer's designee shall be the ex officio chair of the board of claims.
- (c) Claims arising after January 1, 1985, that do not fall within the jurisdiction of the claims commission may only be paid after approval by the principals of the board of claims.
History (10)
- Acts 1945, ch. 73, § 1
- C. Supp. 1950, § 1034.1 (Williams, § 1034.26)
- Acts 1951, ch. 39, § 1
- impl. am. Acts 1959, ch. 9, §§ 3, 14
- impl. am. Acts 1972, ch. 829, § 7
- Acts 1979, ch. 184, § 1
- T.C.A. (orig. ed.), § 9-801
- Acts 1981, ch. 154, § 1
- 1985, ch. 105, § 12
- 1997, ch. 34, § 1.
§ 9-8-102. Board attached to department of the treasury — Secretary. - (a) For the purpose of administration, including fiscal and personnel operations, the board is attached to the department of the treasury.
- (b) The chair has the authority to designate an employee of the department of the treasury as secretary to the board of claims, who will keep the records and minutes of the board and perform other administrative tasks as assigned by the board.
History (8)
- Acts 1945, ch. 73, § 6
- C. Supp. 1950, § 1034.6 (Williams, § 1034.31)
- impl. am. Acts 1959, ch. 9, § 3
- impl. am. Acts 1961, ch. 97, § 3
- Acts 1976, ch. 806, § 1(45)
- T.C.A. (orig. ed.), § 9-802
- Acts 1981, ch. 154, § 2
- 1986, ch. 626, § 4.
§ 9-8-103. Captive insurance company. - (a) With the approval of the board of claims pursuant to this section and notwithstanding § 56-13-119, the state treasurer may establish and maintain a captive insurance company as defined in § 56-13-102.
- (b) The captive insurance company described in subsection (a):
- (1) Is subject to the Revised Tennessee Captive Insurance Act, compiled in title 56, chapter 13, as applicable, and other applicable laws and rules regardless of whether adequate insurance markets are available to cover the risks, hazards, and liabilities described in this section;
- (2) Is a separate legal entity, owned and controlled by the state, and shall only insure the potential losses, exposures, and risks of entities that are subject to insurance and self-insurance pursuant to this chapter, including, but not limited to, executive, legislative, and judicial branch state agencies and state institutions of higher education; and
- (3) Is administratively attached to the department of treasury for the purposes of administration and personnel.
- (c) Through the establishment of the captive insurance company described in subsection (a), the board of claims shall:
- (1) Annually review and approve the captive insurance company's business plan;
- (2) Periodically determine, reevaluate, and revise:
- (A) The potential losses, exposures, and risks that will be insured through the captive insurance company;
- (B) The nature and scope of insurance coverage or coverages to be provided through the captive insurance company;
- (C) The method by which coverage and coverages are to be extended, and contributions are to be paid and collected, including, but not limited to, premiums and assessments;
- (D) The amount of the exposure for each line of insurance coverage, as well as the premium amounts for each entity, including, but not limited to, state institutions of higher education;
- (E) A process through which premiums may be collected directly from the state as opposed to each entity; and
- (F) The initial and continuing capital requirements to form and maintain the captive insurance company, including, but not limited to, the amount and funding source for the initial and continuing capital. Initial or continuing capital may be funded by appropriations in the general appropriations act, from the risk management fund contained in § 9-8-109, or other sources allowable under applicable laws and rules;
- (3) Establish an investment policy for the investment and reinvestment of capital, premiums, and other funds and assets of the captive insurance company. The policy may authorize the funds and assets to be invested in a security, investment, or investment interest that is not otherwise prohibited by the Constitution of Tennessee, Article II, § 31. Collateral that is required to secure an investment or investment interest authorized in the policy may be in the form of a security, investment, or investment interest in which the funds and assets of the captive insurance company may be directly invested in, including cash;
- (4) Promulgate substantive or procedural rules to effectuate this section;
- (5) Approve regulatory filings to be made by the state on behalf of the captive insurance company in compliance with applicable laws and rules;
- (6) Delegate to the state treasurer the day-to-day operations and responsibilities of the captive insurance company. The state treasurer shall implement the board of claims directives, and exercise the state's powers, duties, and responsibilities contained in this section, to implement the captive insurance company. The state treasurer may assign duties and responsibilities to the state treasurer's staff, or private vendors and contractors, as the state treasurer deems necessary and proper, and may consult with professionals as necessary about the administration of the captive insurance company. The state treasurer may also establish, implement, and adopt policies, guidelines, and operating procedures in accordance with this section and the board's delegation;
- (7) Approve the dissolution of the captive insurance company; and
- (8) Perform other duties or actions necessary for the effective implementation, operation, and administration of the captive insurance company.
- (d) Upon the board of claims approval of the formation of the captive insurance company described in subsection (a), the state treasurer is authorized to:
- (1) Provide administrative support to implement, administer, and operate the captive insurance company through its administrative attachment to the department of treasury;
- (2) Facilitate the creation, implementation, or modification of the insurance policy or policies issued by the captive insurance company;
- (3) Facilitate agreements between the captive insurance company and other insurers and reinsurers;
- (4) Facilitate contracts, agreements, and procurements on behalf of the captive insurance company to effectuate this section, including, but not limited to, financial consultants; investment consultants; actuaries; auditors; accountants; brokers; adjusters; attorneys; third party administrators; and other contractors as necessary to carry out the duties and responsibilities of establishing, implementing, and administering the captive insurance company. Payment for expenses for these services may come from the risk management fund or the assets of the captive insurance company;
- (5) Prepare or assist in the preparation of financial statements and reports of financial condition;
- (6) Maintain or assist in maintaining accounting for the captive insurance company;
- (7) Ensure the captive insurance company's compliance with applicable laws and rules; and
- (8) Perform other duties or actions necessary for the effective implementation, operation, and administration of the captive insurance company.
- (e) Funds received by the captive insurance company must be used exclusively for the purposes and activities set forth in this section, and must be invested and reinvested in the name of the captive insurance company by the state treasurer in accordance with the board's investment policy established pursuant to this section.
- (f) Notwithstanding any law to the contrary:
- (1) A reserve balance remaining unexpended at the end of a fiscal year in the captive insurance company's fund or account does not revert to the general fund or the risk management fund but is carried forward into the subsequent fiscal year; and
- (2) Interest accruing on investments and deposits of the captive insurance company must be credited to the company's fund or account, must not revert to the general fund or the risk management fund, and must be carried forward into the subsequent fiscal year.
- (g)
- (1) The captive insurance company's policies must contain provisions that are consistent with the state's claims administration process contained in chapter 8, parts 3 and 4 of this title, and other applicable laws and rules relative to the adjustment, adjudication, and settlement of claims filed against the state.
- (2) The granting or denial of claims filed pursuant to the captive insurance company's policies must be done in accordance with chapter 8, parts 3 and 4 of this title, and other applicable laws and rules.
- (h) The captive insurance company described in subsection (a) is subject to, and shall comply with, applicable laws and rules relative to captive insurance companies and the applicable laws and rules governing its business structure.
- (i) The captive insurance company described in subsection (a) is subject to examination and audit by the comptroller of the treasury in the same manner as prescribed for the department of treasury.
- (j) If the captive insurance company described in subsection (a) ceases to exist, then its assets remaining after its obligations and liabilities have been satisfied or discharged shall pass to, and become the property of, the risk management fund contained in § 9-8-109.
§ 9-8-107. Defense counsel commission functions and responsibilities transferred to board of claims. - The functions and responsibilities of the defense counsel commission arising out of incidents occurring after January 1, 1985, are hereby transferred to the board of claims. The board may establish procedures and rules under which these functions and responsibilities may be carried out by a subcommittee of the board. The defense counsel commission shall retain jurisdiction over all requests for counsel and compensation arising out of incidents occurring before January 1, 1985.
History (1)
- Acts 1984, ch. 972, § 15.
§ 9-8-108. Powers and duties. - (a) The board of claims:
- (1) Has the authority, but is not required, to investigate and hear claims and make awards when appropriate in cases based on acts or omissions of state officers or employees where a claim does not fall within the jurisdiction of the claims commission under § 9-8-307(a). The board of claims shall not have jurisdiction over any claim arising under § 9-8-307(a), even though the claimant requests punitive damages and/or damages in excess of those set forth in § 9-8-307(e). No award shall be made unless the board determines that the facts would entitle the claimant to a judgment in action at law. Where the board determines to hear a claim, it may refer the claim to a designee for a hearing and written recommendation to the board on whether or not to make an award. If the recommendation by the designee is against an award or less than the amount requested by the claimant, the claimant shall have the right to an appeal to the board. The board may, in its discretion, hold a hearing or decide the claim on the record. All decisions of the board shall be final;
- (2) Is authorized to pay final judgments in civil lawsuits against state employees as provided in § 9-8-112;
- (3) Shall review and make recommendations to the commissioner of finance and administration and the general assembly regarding the following:
- (A) The required funding of the risk management fund;
- (B) The required funding of the claims commission administrative costs; and
- (C) Appropriate levels of self-insurance, purchased insurance or any combination thereof for the protection of the state and/or its employees and the required funding for such insurance policies. The recommendation made by the board of claims to the general assembly for excess coverage for the ensuing calendar year pursuant to § 9-8-307(e) may include self-insurance, purchased insurance or any combination of the two (2);
- (4) Shall review and approve insurance policies designed to pay claims against the state or its employees arising from contract or tort. This responsibility includes the authority to coordinate the purchase of insurance between the various departments, agencies, and institutions, and all other entities created by the state other than counties and municipal corporations in order that adequate protection be given at the least possible cost;
- (5) Has jurisdiction to hear disputes between the various departments and agencies of the state involving the assignment of losses to individual departments, as well as general responsibility to establish policies governing the administration of the state's contract and tort insurance program;
- (6) Shall retain consultants as necessary to fully discharge the duties assigned to the board;
- (7) Shall hear claims for compensation by persons wrongfully imprisoned and granted exoneration pursuant to § 40-27-109. Any award made by the board pursuant to this subdivision (a)(7) shall be subject to the following conditions:
- (A) Compensation payable to such persons shall be determined by the board considering all factors the board considers relevant including, but not limited to, the person's physical and mental suffering and loss of earnings; provided, however, that the maximum aggregate total of such compensation shall not exceed one million dollars ($1,000,000);
- (B) Any amount awarded shall be payable in equal monthly installments until paid in full, unless the person dies prior to receipt of the full amount. The amount of the monthly installments payable under this subdivision (a)(7) shall be calculated by dividing the noncommuted amount, determined pursuant to subdivision (a)(7)(D), by the estimated number of months the claimant will live based upon the claimant's life expectancy at the time of the award as determined from the mortality tables last adopted by the board of trustees of the Tennessee consolidated retirement system pursuant to § 8-34-503, or based on such shorter period of time as the board, in its discretion, determines appropriate;
- (C) If the person dies without leaving a surviving spouse or surviving minor children, the payments shall cease. Upon the death of the claimant, any monthly installments left remaining shall be paid to the claimant's surviving spouse and surviving minor children in equal portions. The amount payable to the surviving spouse, if any, shall be paid until the surviving spouse's death or remarriage. If the surviving spouse dies or remarries, then the amount that was payable to the surviving spouse shall be divided equally among the claimant's surviving minor children. Each child shall receive such child's share until reaching majority status or death, whichever occurs first, at which time the amount shall be redistributed equally among the remaining minor children. For purposes of this subdivision (a)(7)(C), “minor” means any person who has not attained eighteen (18) years of age;
- (D) Upon motion of the claimant or in the discretion of the board, all or a portion of the compensation payable monthly under this subdivision (a)(7) may be commuted to a lump sum payment. In determining whether to commute the compensation, the board shall consider whether there exist special needs warranting such commutation, whether the commutation will be in the best interest of the person and whether that person has the ability to wisely manage and control the commuted award irrespective of whether there exist special needs. The claimant has the burden of proving that a lump sum payment is warranted;
- (E)
- (i) In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that:
- (a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services;
- (b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and
- (c) The contract provides for survivor benefits;
- (ii) The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7);
- (F) Any claim for compensation under this subdivision (a)(7) must be filed with the board no later than one (1) year from the date that the claimant is granted exoneration pursuant to § 40-27-109;
- (G) The state of Tennessee shall have a right of subrogation as provided by law for any amount awarded pursuant to this subdivision (a)(7) against any person who willfully and intentionally committed an act or engaged in conduct that directly resulted in or contributed to the wrongful conviction and imprisonment of the claimant; and
- (H)
- (i) Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to:
- (a) Reconsider the period of time over which the monthly installments shall be paid;
- (b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or
- (c) Both subdivisions (a)(7)(H)(i)(a) and (b);
- (ii) In determining whether to grant all or any portion of the claimant’s request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted;
- (8) Shall certify the per occurrence limit to the claims commission;
- (9) Has the authority to hear claims and make awards for property damage caused by an escapee from a state correctional facility; provided, that:
- (A) The claimant has the burden of proving that the escapee caused the damage, that the proximate cause of the escape was the negligence of a state employee, that the incident giving rise to the loss occurred in the county in which the escape occurred or in a county contiguous to the county in which the escape occurred, that the damage occurred within seventy-two (72) hours of the escape and that the amount requested is not reimbursable from any other source;
- (B) No award shall be paid if the state correctional facility from which the individual causing such damage escaped is classified as a community service center, a work release center or a nonsecured juvenile facility;
- (C) No award shall be paid to any individual who aided in the escape of the inmate causing such damage;
- (D) For purposes of this subdivision (a)(9), negligence shall exist when an employee of the department of correction is disciplined as a result of acts or omissions related to the occurrence of escape; and
- (E) Claim awards are limited to five thousand dollars ($5,000) per claimant;
- (10) Is authorized to establish incentive programs for state departments, agencies, and institutions, including public institutions of higher education, for the purpose of reducing liabilities to the risk management fund created pursuant to § 9-8-109. Such incentive programs may include, but are not limited to, differential premium rates based on participation in loss control programs established by the board of claims; increased or decreased deductibles based on participation in loss control programs established by the board; and the imposition of fines and penalties. An incentive program established pursuant to this subdivision (a)(10) may include, but need not be limited to, policies and procedures for the effective and efficient administration of claims. Such policies and procedures may establish the timeframe and content for the agency response relative to claims and the imposition of fines and penalties for noncompliance. Any such premiums, deductibles, fines, or penalties must be paid from the budget of the respective department, agency, or institution and deposited into the risk management fund; and
- (11) Is authorized to adopt and publish rules and regulations necessary for the proper performance of its duties.
- (b) The board of claims may not consider a claim filed more than one (1) year after the occurrence of the incident giving rise to the claim.
- (c) Prior to the acquisition of any commercial grade motor vehicle that is to be used primarily for transporting nonstudents by any state department, agency, or institution, including any public institution of higher education, such department, agency or institution shall procure bids for obtaining appropriate levels of insurance on such motor vehicle as shall be determined by the board of claims. This subsection (c) shall only apply to commercial grade motor vehicles that are intended to be used ten percent (10%) or more of the time for travel outside this state. The board of claims shall determine by policy the type motor vehicles that shall be considered commercial grade motor vehicles for purposes of this subsection (c). The department, agency or institution shall maintain such insurance coverage during the time the department, agency or institution owns the motor vehicle. The board of claims is authorized, at its discretion, to review and approve the insurance company from which the insurance shall be procured, the amount of the premiums and the period of the insurance policy. For purposes of this section, “acquisition” means by purchase, devise, gift or otherwise.
History (12)
- Acts 1984, ch. 972, § 16
- 1986, ch. 626, § 6
- 1986, ch. 911, § 5
- 1988, ch. 467, § 1
- 1988, ch. 701, § 1
- 2003, ch. 212, § 4
- 2004, ch. 880, § 1
- 2010, ch. 946, § 1
- 2010, ch. 993, § 1
- 2012, ch. 1055, §§ 1, 2
- 2013, ch. 164, § 3
- 2021, ch. 98, § 1.
§ 9-8-109. Risk management fund. - (a) A risk management fund shall be established as a separate account in the state treasury. Amounts remaining in the fund at the end of each fiscal year shall not revert to the general fund. Moneys in the risk management fund shall be invested by the state treasurer pursuant to chapter 4, part 6 of this title, for the sole benefit of that fund.
- (b) The board of claims shall recommend annually to the commissioner of finance and administration the total occurrence basis funding required to satisfy the liabilities arising under this chapter, the liabilities arising under title 12, chapter 3, part 9 and the contribution required of each state department, agency and institution, including higher education, needed to achieve the required funding.
- (c) The claims commission shall forward to the division of claims and risk management all of its decisions after they become final. The division of claims and risk management shall pay all claims for which the state is liable after the decision becomes final. Claim awards from the commission or the board of claims, as well as settlements, shall be paid only from funds appropriated or reserved for that purpose. There is hereby appropriated a sum sufficient to the risk management fund for the purpose of paying claims; provided, that awards made pursuant to actions founded upon express contract or breach thereof or awards made for the recovery of taxes shall not be paid from the risk management fund, but instead shall be paid from other funds in accordance with procedures established by the board of claims and approved by the commissioner of finance and administration.
- (d)
- (1) Expenses payable from the risk management fund include those attributable to:
- (A) Defending state employees pursuant to title 8, chapter 42;
- (B) Defending the state pursuant to part 3 of this chapter;
- (C) The division of claims and risk management; and
- (D) The Tennessee claims commission.
- (2) Expenses attributable to the following may be paid from the risk management fund:
- (A) The department of treasury's casualty risk program;
- (B) Initial and continuing capital to fund the state's captive insurance company;
- (C) Expenses for the operation of the state's captive insurance company;
- (D) Premium payments for covered entities;
- (E) Expenses and losses arising pursuant to title 12, chapter 4, part 10; and
- (F) Expenses and costs relative to the centralized system described in § 9-8-409, including, but not limited to, salary and benefit costs for employees to administer the centralized system.
- (3) Expenses pursuant to this subsection (d) are subject to annual appropriations and chapter 4, part 51 of this title.
- (4) Subsequent to the close of each fiscal year, the attorney general and reporter shall provide to the state board of claims a report describing the manner in which funds received from the risk management fund were used in defending actions brought against the state and its employees.
History (8)
- Acts 1984, ch. 972, § 17
- 1985, ch. 105, § 17
- 1995, ch. 260, § 1
- 2003, ch. 212, §§ 1-3, 8
- 2004, ch. 448, § 1
- 2017, ch. 271, § 1
- 2021, ch. 366, § 2
- 2022, ch. 1004, § 2.
§ 9-8-110. Division of claims and risk management. - The state treasurer shall administer a division of claims and risk management to compile information and administer risk management programs. This division shall serve as staff to the board of claims in matters relating to casualty risk.
History (3)
- Acts 1984, ch. 972, § 18
- 1994, ch. 669, § 3
- 2017, ch. 271, § 2.
§ 9-8-111. Compensation for loss, damage or destruction of personal property. - (a)
- (1) The state shall compensate state employees for the loss, damage or destruction of personal property which is not otherwise compensable which occurs in the course of employment and which is required by the state to be used in the course of employment.
- (2) For purposes of this section, a motor vehicle shall be considered required by the state to be used in the course of employment only if:
- (A) The employee was reimbursed for mileage by the state for use of such motor vehicle at the time of the incident giving rise to the claim; or
- (B) The employee was authorized to use a rental motor vehicle paid for by the state at the time of the incident giving rise to the claim.
- (3) The requirement that the employee's personal property be required by the state to be used in the course of employment shall be waived if:
- (A) The loss, damage or destruction resulted from an assault and battery upon the state employee;
- (B) The loss, damage or destruction occurred while the employee was performing duties outside the normal scope of such employee's employment at the direction of an immediate supervisor; or
- (C) The loss, damage or destruction occurred as a result of a special hazard of the employee's employment which is not encountered by the general public.
- (b) Notwithstanding subsection (a), the state shall not compensate state employees for the loss, damage or destruction of personal property if:
- (1) The loss, damage or destruction resulted from an act of God or natural disaster;
- (2) The loss, damage or destruction of personal property which is not a motor vehicle resulted from the employee's negligence;
- (3) The loss, damage or destruction of personal property which is a motor vehicle resulted from the employee's gross negligence; or
- (4) The loss, damage or destruction represents normal wear and tear of personal property.
- (c) In cases where the employee has the benefit of insurance coverage for the personal property, the employee shall not be compensated by the state unless the employee has attempted to obtain compensation from such insurer. The state shall compensate the employee only to the extent the employee is not compensated by the insurer.
- (d) In cases where the loss, damage or destruction is to a motor vehicle and the employee does not have the benefit of insurance coverage for the motor vehicle, the employee shall not be compensated by the state in an amount in excess of five hundred dollars ($500).
- (e) The burden shall be upon the employee to prove the extent of the loss, damage or destruction of personal property and the failure of an insurer to compensate for such loss, damage or destruction. The state shall only be responsible for compensating employees to the extent that such proof is submitted.
History (6)
- Acts 1981, ch. 517, § 1
- T.C.A., § 9-8-218
- Acts 1984, ch. 972, § 19
- 1986, ch. 626, § 9
- 1988, ch. 850, § 1
- 1998, ch. 785, § 1.
§ 9-8-112. Final judgments against state employees. - (a)
- (1) The board of claims is authorized to pay final judgments for state employees, as defined in § 8-42-101, for any damages, including interest thereon, which are awarded in a final judgment in a civil lawsuit against the employee in a court of competent jurisdiction where it is determined by the board that the incident on which such damages were awarded occurred when the employee was acting in good faith within the scope of such employee's official duty and under apparent lawful authority or orders.
- (2) No final judgment or interest thereon shall be paid where the employee's conduct amounted to gross negligence or willful, intentional or malicious conduct.
- (3) Any portion of the judgment covered by liability insurance will not be paid.
- (4) Settlements or compromises of litigation reached out of court by mutual agreement between the parties may be disallowed by the board if the board determines that the terms of the proposed settlement have no relationship to the employee's liability and the injury or damage caused.
- (b) In order for any payment to be made as authorized herein, the employee must have exercised such employee's right to retain counsel in accordance with title 8, chapter 42, to defend such employee in the action filed or must be represented by the attorney general and reporter. No payment shall be made unless the employee shall notify, in writing, the attorney general and reporter of the existence of such action within ten (10) days after process is served personally on the employee. This requirement shall be met by an employee's timely filing of a request for the employment of counsel with the defense counsel commission, and shall not be required where process has been served on the attorney general and reporter.
- (c) Any final judgment against an employee whose act or omission gave rise to the claim shall constitute a complete bar to any action, by reason of the same subject matter, against the state of Tennessee. Likewise, any judgment, if permitted or awarded by the state, shall constitute a complete bar to any action, by reason of the same subject matter, against a state employee as defined in § 8-42-101.
- (d) This section shall not be construed as a waiver of official or sovereign immunity where the injury arises from the act, or failure to act, of an employee where the act is the type of act for which the employee would be or heretofore has been personally immune from liability nor as a waiver of any other defense or jurisdictional bar available to the employee. Furthermore, this section shall not be construed under any circumstances as making the state an insurer of the aforementioned state employees nor as constituting a waiver of the sovereign immunity of the state.
- (e) In order for payments to be made as authorized herein, an employee must submit a written request to the board, together with a certified copy of the judgment against the employee, within fifteen (15) days following the entry of the judgment. The board shall act on a request promptly and shall give the employee written notice of its action. The board's decision shall be judicially reviewable by the employee as a final decision in a contested case pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3.
- (f) This section applies to final judgments rendered on or after July 1, 1979.
- (g) This section shall apply to causes of action arising on or after January 1, 1985, only as set forth in subsection (h).
- (h)
- (1) The board of claims, upon determining that the officer or employee was acting within the scope of the officer's or employee's official duties, shall reimburse the affected officer or employee for actual damages and costs, including attorneys fees, awarded by judgment or settlement up to the limits found in § 9-8-307(e), against state officers and employees for any cause of action arising on or after January 1, 1985, where the state officers' or employees' immunity set forth in § 9-8-307(h) is not sustained. Notwithstanding the foregoing, the board of claims may, in its sole discretion, reduce the reimbursement provided in this subsection (h) if the board finds a circumstance to exist which makes such a reduction proper and just. Such a circumstance may include, but is not limited to, the failure of the officer or employee to fully cooperate in the investigation and defense of the litigation. In cases where the judgment or settlement is in excess of the limits found in § 9-8-307(e), the board of claims may pay any of the amounts in excess of those limits where such reimbursement is found to bear a reasonable relationship to the officer's or employee's liability or the injury or damage caused.
- (2) For purposes of this subsection (h), actions deemed to be within the scope of official duties include, but are not limited to, actions taken pursuant to the statutes, policies or procedures of this state, or when the officer or employee had reason to believe that the officer or employee acted pursuant to the statutes, policies or procedures of the state.
- (3) Payments may be denied pursuant to this subsection (h) if the officer or employee or the officer's or employee's counsel have not made reasonable efforts to defend or if the officer's or employee's actions were grossly negligent, willful, malicious, criminal or done for personal gain. All other applicable provisions of this section shall apply to this subsection (h). The board may promulgate rules and regulations implementing this subsection (h).
History (7)
- Acts 1982, ch. 717, § 1
- 1983, ch. 68, § 1
- T.C.A., § 9-8-220
- Acts 1984, ch. 972, § 19
- 1985, ch. 105, § 13
- 1985, ch. 322, §§ 1, 2
- 1995, ch. 260, § 2.
Part 2 Educator Protection Act of 2015 § 9-8-202. Purpose of part — Tennessee educator liability fund. - The purpose of this part is to create the Tennessee educator liability fund to provide excess professional liability insurance coverage for all teachers and student teachers, subject to the appropriations of the general assembly. The fund shall protect against damages for claims arising out of the performance of teachers' and student teachers' duties within the scope of their employment or assignment. The fund shall be administered by the board of claims.
§ 9-8-203. Part definitions. - (a) As used in this part, unless the context otherwise requires:
- (1) “Fund” means the Tennessee educator liability fund;
- (2) “Student teacher” means an individual enrolled as a student in an institution of higher education approved by the state board of education for teacher training, who is jointly assigned by the institution of higher education and either a local board of education or a charter school to teach under the direction of a licensed teacher employed by the local board of education or the charter school;
- (3) “Teacher”:
- (A) Means any individual employed by a local board of education in a position that requires a license issued by the department of education for service in public elementary and secondary schools of this state, supported, in whole or in part, by local, state, or federal funds; and
- (B) Includes an individual employed at a public charter school in a position that requires a license issued by the department of education for service in a public elementary and secondary school of this state.
- (b) For the purposes of this part, teachers and student teachers shall not be considered “state employees” as defined in § 8-42-101.
§ 9-8-204. Establishment of Tennessee educator liability fund — Source of funds — Investment of funds. - (a) The Tennessee educator liability fund shall be established as a separate account in the state treasury and shall be separate and apart from the risk management fund established by § 9-8-109.
- (b) The fund shall be funded from appropriations by the general assembly, and shall include interest earned on the appropriated money. Appropriations to the fund may be adjusted based on the number of claims filed and amounts paid from the fund. Amounts remaining in the fund at the end of each fiscal year, including interest, shall not revert to the general fund.
- (c) Moneys in the fund shall be invested by the state treasurer pursuant to chapter 4, part 6 of this title, for the sole benefit of the fund.
§ 9-8-205. Authority of board of claims. - Notwithstanding any law to the contrary and in addition to the board of claims' authority set forth in § 9-8-108, the board of claims is authorized to:
- (1) Establish the type or types of insurance and the insurance limits as excess insurance coverage necessary to carry out the purposes of this part;
- (2) Purchase or procure the insurance policy or policies with the fund as the insured;
- (3) Establish the effective date for which insurance coverage will be provided;
- (4) Enter into contracts with financial consultants, actuaries, auditors, investment managers, individual attorneys, law firms, and other consultants and professionals as necessary to effectuate the purposes of this part;
- (5) Establish the process for the administration of claims filed pursuant to this part;
- (6) Recommend annually to the commissioner of finance and administration the total occurrence basis funding required to satisfy the liabilities arising under this part; and
- (7) Promulgate rules that are necessary to carry out the purpose and intent of this part.
§ 9-8-206. Insurance coverage — Expenses paid from fund — Applicability of coverage. - (a) Coverage provided under this part shall automatically cover all full-time and part-time teachers and student teachers at no cost to the teachers or student teachers.
- (b) The expenses paid from the fund shall include the costs associated with the administration of the fund, including, but not limited to, any insurance policy, policies, or contracts that may be authorized by the board of claims.
- (c) Pursuant to this part, the insurance policy or policies that may be purchased or procured, and the contracts that may be executed, shall cover incidents that have occurred on or after May 20, 2015.
Part 3 Tennessee Claims Commission § 9-8-301. Creation. - (a) There is hereby created an administrative tribunal consisting of three (3) members, one (1) from each grand division, known as the “Tennessee claims commission.”
- (b) For administrative purposes, the commission shall be attached to the treasury department. The administrative responsibilities of the commission shall be performed by the state treasurer, in consultation with the claims commission and under the oversight of the board of claims. The state treasurer is authorized to delegate to the administrative clerk such of these responsibilities as the state treasurer deems appropriate.
- (c) The authority to appoint, terminate and control the staff of the commission shall rest with the state treasurer; provided, that the individual claims commissioners may appoint, terminate and control the staff personnel assigned to their respective offices. All decisions relative to compensation of the staff of the commission, including the staff positions assigned to the individual commissioners, shall be subject to the approval of the state treasurer. The individual claims commissioners shall consult with the state treasurer prior to taking any personnel action with respect to the staff personnel assigned to their respective offices, and the state treasurer shall consult with the members of the claims commission prior to taking any personnel action for all other staff of the commission.
- (d) The employees shall not have state service status but shall be subject to personnel policies and regulations which are applicable to employees of the treasury department, such as leave, compensation, classification and travel requests.
- (e) Notwithstanding any provision of Acts 1997, ch. 165, to the contrary, the autonomy of individual claims commissioners in performing their claims adjudication function shall be respected by the state treasurer and the board of claims. Nothing within that act shall be construed to give the state treasurer or board of claims authority to supervise or take any personal actions with regard to the individual claims commissioners.
- (f) For the purposes of this part and part 4 of this chapter, “grand division of the state” shall be defined as such term is defined in title 4, chapter 1, part 2, except that Cumberland County shall be included within the middle grand division.
History (4)
- Acts 1984, ch. 972, § 1
- 1997, ch. 165, §§ 2, 11
- 2003, ch. 411, § 1
- 2012, ch. 800, § 49.
§ 9-8-302. Appointments — Terms — Residence — Vacancies — Chair. - (a) Each commissioner shall be appointed by the governor with confirmation by resolution of both houses of the general assembly for a term of eight (8) years.
- (b) To provide staggered terms for the commissioners, the term expiring on June 30, 2003, shall be filled for an eight (8) year appointment while the current terms of the remaining two (2) commissioners shall each be extended for two (2) additional years. Thereafter, all commissioners shall be appointed to eight (8) year terms.
- (c) Each commissioner shall have resided in the grand division from which such commissioner is appointed for one (1) year prior to appointment, resided in Tennessee for five (5) years prior to appointment, and shall have been licensed to practice law in Tennessee for at least five (5) years prior to appointment. No commissioner may practice law while serving on the commission. The commissioners shall discontinue the practice of law as soon after their appointments as is practicable. The commissioners shall comply with the standards of conduct contained in the Code of Judicial Conduct of the Rules of the Tennessee Supreme Court.
- (d) The commissioners shall be eligible for reappointment.
- (e) Temporary vacancies on the commission shall be filled by a qualified person appointed by the governor. Any other vacancy shall be filled for the remainder of the term by a qualified person appointed by the governor with the consent of both houses of the general assembly. If such a vacancy occurs while the general assembly is not in session, the governor shall appoint a qualified person to serve during the interim.
- (f) The commission shall designate one (1) of its members to serve as chair.
History (4)
- Acts 1984, ch. 972, §§ 2, 6
- 1985, ch. 105, § 3
- 1993, ch. 367, §§ 1, 2
- 2002, ch. 816, §§ 1, 2.
§ 9-8-303. Compensation. - The commissioners of the claims commission shall receive the same compensation as a Class 1 commissioner.
§ 9-8-304. Administrative clerk — Open proceedings — En banc hearings. - (a) The claims commission, subject to the approval of the state treasurer, shall designate a commission employee to serve as administrative clerk to the claims commission. The administrative clerk, in consultation with the commission chair, shall schedule meetings of the commission.
- (b) The administrative clerk, in consultation with the commission chair, shall docket proceedings and schedule hearings on claims. Each claim shall be assigned to the appropriate commissioner for the grand division in which the wrongful act occurred or in which the claimant lives; provided, that the chair of the commission shall have the authority to assign cases arising in one grand division to a commissioner in another grand division if such is necessary to alleviate congestion, delay, or an imbalance in caseloads among grand divisions. Each claim shall be heard in the grand division in which the wrongful act occurred or in which the claimant lives. The commission shall follow the law established for trial courts concerning opening proceedings to the public.
- (c) The administrative clerk, in consultation with the state treasurer, is responsible for the day-to-day management of the commission's staff and such other activities as may be required including, but not limited to, reporting on the status of claims. In managing the affairs of the commission, the state treasurer shall consult with the claims commission.
- (d) For the purpose of uniformity, the commission, upon the request of two (2) members thereof, may sit en banc to hear and decide any matter for which there is a disagreement among two (2) or more of the commissioners.
History (2)
- Acts 1984, ch. 972, § 4
- 1997, ch. 165, § 3.
§ 9-8-305. Powers and duties. - Each commissioner, and each administrative law judge assigned pursuant to this part, has the authority to:
- (1) Hear and determine claims against the state falling within the categories enumerated in § 9-8-307;
- (2) Issue subpoenas, swear in witnesses at hearings and other commission functions, effect discovery and issue protective orders and the like, and seek enforcement pursuant to § 4-5-311(a) and (b);
- (3) Rule on motions and objections;
- (4) Regulate the course of proceedings;
- (5) Take official notice of:
- (A) State statutes and the rules and regulations of state agencies; and
- (B) Any fact that can be judicially noticed; and
- (6) Issue written findings of facts and opinions of law.
History (3)
- Acts 1984, ch. 972, § 5
- 1986, ch. 626, § 7
- 1997, ch. 165, §§ 4, 5.
§ 9-8-307. Jurisdiction — Claims — Waiver of actions — Standard for tort liability — Damages — Immunities — Definitions — Transfer of claims. - (a)
- (1) The commission or each commissioner sitting individually has exclusive jurisdiction to determine all monetary claims against the state based on the acts or omissions of “state employees,” as defined in § 8-42-101, falling within one (1) or more of the following categories:
- (A) The negligent operation or maintenance of any motor vehicle or any other land, air, or sea conveyance. In addition, the state may be held liable pursuant to this subdivision (a)(1)(A) for the negligent operation of state-owned motor vehicles or other conveyances by persons who are not state employees; provided, that such persons operated the vehicle or other conveyance with the permission of a state employee;
- (B) Nuisances created or maintained;
- (C) Negligently created or maintained dangerous conditions on state controlled real property. The claimant under this subdivision (a)(1)(C) must establish the foreseeability of the risks and notice given to the proper state officials at a time sufficiently prior to the injury for the state to have taken appropriate measures;
- (D) Legal malpractice or health care liability by a state employee; provided, that the state employee has a professional/client relationship with the claimant;
- (E) Negligent care, custody and control of persons;
- (F) Negligent care, custody or control of personal property;
- (G) Negligent care, custody or control of animals. Damages are not recoverable under this section for damages caused by wild animals;
- (H) Negligent construction of state sidewalks and buildings;
- (I) Negligence in planning and programming for, inspection of, design of, preparation of plans for, approval of plans for, and construction of, public roads, streets, highways, or bridges and similar structures, and negligence in maintenance of highways, and bridges and similar structures, designated by the department of transportation as being on the state system of highways or the state system of interstate highways;
- (J) Dangerous conditions on state maintained highways. The claimant under this subdivision (a)(1)(J) must establish the foreseeability of the risk and notice given to the proper state officials at a time sufficiently prior to the injury for the state to have taken appropriate measures;
- (K)
- (i) Workers' compensation claims by state employees, including injuries incurred by national guard members, Tennessee state guard members, civil air patrol members, civil defense agency personnel and emergency forest firefighters while on active duty and in the course of that duty;
- (ii) The commission's payment of these claims shall be in such amount and subject to such limitations as set forth in title 50, chapter 6, except the following provisions shall have no application to workers' compensation claims filed against the state: §§ 50-6-103, 50-6-104, 50-6-106(5), 50-6-118, 50-6-128, 50-6-203(a)-(e), 50-6-205(b)(2), (b)(3), (c) and (d), 50-6-208, 50-6-210(f), 50-6-211, 50-6-213, 50-6-222, 50-6-225(d), 50-6-229(b), 50-6-233, 50-6-236(c)(2)-(3) and (g), 50-6-237, 50-6-238, 50-6-239, 50-6-244, 50-6-306, 50-6-307, and title 50, chapter 6, part 4. Section 50-6-114 shall apply to workers' compensation claims against the state, except that the state is authorized to give an employee the option to use accrued sick and annual leave in lieu of receiving temporary total disability benefits. In no event shall an employee receive both accrued sick and annual leave and temporary total disability benefits for the period of temporary total disability. Where appropriate, the claims commission shall be considered the court or tribunal to determine claims within title 50, chapter 6. Payments shall be made and accepted without regard to fault as a cause of the injury or death;
- (iii) The subsequent injury and vocational recovery fund shall have no application to workers' compensation claims against the state of Tennessee. Payment of compensation shall not be considered a binding determination of the obligations of the employer as to future compensation payments. Likewise, the acceptance of compensation by the officer or employee is not considered a binding determination of the obligations of the employer as to future compensation payments; nor shall the acceptance of compensation by the officer or employee be considered a binding determination of the employer's rights;
- (iv) The interested parties have the right to settle all matters of compensation between themselves, but all settlements, before the settlements are binding on either party, shall be reduced to writing and shall be approved by the claims commissioner before whom the claim for compensation is entitled to be heard, or to a workers' compensation judge pursuant to § 50-6-240. Any proposed settlement presented to a claims commissioner for approval pursuant to this subdivision (a)(1)(K)(iv) shall be examined by the claims commissioner to determine whether the officer or employee is receiving, substantially, the benefits provided by the Workers' Compensation Law, compiled in title 50, chapter 6. To this end, the commissioner may call and examine witnesses. Upon such settlement being approved, an order shall be rendered by the commissioner and duly entered by the clerk;
- (v) In case any officer or employee of the state of Tennessee for whose injury or death compensation is payable under the Workers' Compensation Law shall at the time of injury be employed or paid jointly by two (2) or more employers subject to such law, such employers shall contribute to payment of such compensation in a proportion of their several wage liability to such officer or employee. The state of Tennessee is considered the primary employer and the determination of workers' compensation paid shall be pursuant to the procedures provided for state officers and employees. If one (1) or more, but not all, of such officers and employees are subject to the Workers' Compensation Law and otherwise subject to liability for compensation hereunder, then the liability of such of them as are so subject shall be to pay the proportion of the entire compensation which their portion of the wage liability bears to the wages of the officer or employee; provided, that nothing in this section shall prevent any agreement between the different employers between themselves as to the distribution of the ultimate burden of such compensation. The state of Tennessee shall pay the officer or employee under the Workers' Compensation Law and seek contribution from other contributing employers. The state of Tennessee has a right of action in the courts against the joint employers;
- (vi) Notwithstanding § 9-8-402(d) or any other law to the contrary, upon motion of the employee, the claims commission may, prior to the benefits review conference or any final hearing on the claim, order the state to initiate, continue or reinstate temporary disability benefits or to provide medical benefits to the employee pending a final decision in the case, if the claims commission determines that such an order would be appropriate in light of available information. If the commission determines it appropriate to order the state to provide medical benefits pursuant to this subdivision (a)(1)(K)(vi), the commission's authority shall include, but not be limited to, the authority to order specific medical treatment recommended by the treating physician, and the authority to require the state to provide the appropriate panel of physicians to the employee, including a panel of appropriate specialists. With respect to the determination of whether to order the payment of temporary disability or medical benefits, the claims commission shall decide such issues solely on the basis of the information available to the commission, without favor or presumption for or against either party;
- (L) Actions for breach of a written contract between the claimant and the state which was executed by one (1) or more state officers or employees with authority to execute the contract; provided, that the group insurance agreements created pursuant to §§ 8-27-202 and 8-27-302 shall be considered contracts for purposes of this subsection (a) in order for the commission to determine insurance claims which have been previously rejected by the state insurance committee or the local education insurance committee;
- (M) Negligent operation of machinery or equipment;
- (N) Negligent deprivation of statutory rights created under Tennessee law, except for actions arising out of claims over which the civil service commission has jurisdiction. The claimant must prove under this subdivision (a)(1)(N) that the general assembly expressly conferred a private right of action in favor of the claimant against the state for the state's violation of the particular statute's provisions;
- (O) Claims for the recovery of taxes collected or administered by the state, except any tax collected or administered by the commissioner of revenue, any tax collected or administered by the commissioner of commerce and insurance pursuant to title 56, and any unemployment insurance tax collected or administered by the commissioner of labor and workforce development;
- (P) Claims for the loss, damage or destruction of the personal property of state employees based on § 9-8-111;
- (Q)
- (i) Claims for injuries incurred by persons where such injury occurred while the person was a passenger in a motor vehicle operated by a state employee while such employee was acting within the scope of employment. The claimant has the burden of proving the following:
- (a) The injuries suffered by the claimant occurred as a result of an accident involving a motor vehicle operated by a non-state employee and a motor vehicle operated by a state employee who, at the time of the accident, was acting within the scope of employment;
- (b) The proximate cause of the accident was the negligent operation of the motor vehicle operated by the nonstate employee;
- (c) The claimant has been unable to recover any damages from the negligent party because the negligent party was uninsured or underinsured at the time of the accident and is otherwise financially incapable of fully compensating the claimant;
- (d) The claimant has been unable to recover sufficient amounts under the Workers' Compensation Law or from any other public or private source, including the claimant's uninsured motorist's insurance policy, to fully compensate for the injuries suffered; and
- (e) The claimant's presence in the motor vehicle operated by the state employee was for the benefit of the state, except that this requirement shall be waived for persons who are injured while a passenger in a state-owned motor vehicle used in the state employee van pool program authorized in § 4-3-1105(19);
- (ii) Notwithstanding subsection (e), awards under this subdivision (a)(1)(Q) are limited to amounts recoverable under subdivision (a)(1)(K). Awards under this subdivision (a)(1)(Q) shall not be considered payments under an uninsured motorists insurance policy as provided for in title 56, chapter 7, part 12;
- (R) Claims for libel and/or slander where a state employee is determined to be acting within the scope of employment;
- (S)
- (i) Claims for compensation filed under the Criminal Injuries Compensation Act, compiled in title 29, chapter 13, and § 40-24-107. Claims filed pursuant to this subdivision (a)(1)(S) shall be determined in accordance with title 29, chapter 13;
- (ii) Notwithstanding title 29, chapter 13, to the contrary, the claims commission has exclusive jurisdiction to determine all claims filed for compensation under the Criminal Injuries Compensation Act in accordance with title 29, chapter 13; provided, that this exclusive jurisdiction shall apply only to claims for compensation filed on or after January 1, 1987. At the request of the claimant and with the consent of the court, any claim filed prior to January 1, 1987, may be transferred to the claims commission for determination of the claim;
- (T) Actions based on § 69-1-201;
- (U) Actions based on violations of the requirements of procurement of commodities or services under title 71, chapter 4, part 7;
- (V) Unconstitutional taking of private property, as defined in § 12-1-202, including intentional state governmental action resulting in a taking other than the taking of real property and real property rights for the state's system of highways or the state's system of interstate highways; and
- (W) Claims arising out of the billing, collection, or remittance of 911 surcharges.
- (2) No item enumerated in this subsection (a) shall be interpreted to allow any claim against the state on account of the acts or omissions of persons, partnerships, corporations or other entities licensed or regulated by agencies of the state, notwithstanding any negligence committed by the state in the course of performing licensing or regulatory activities. No item enumerated in this subsection (a) shall be interpreted to allow any claims against the state arising out of or resulting from:
- (A) The issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order or similar authorization, except as provided for in subdivision (a)(1)(V);
- (B) An inspection, or by reason of making an inadequate or negligent inspection of any property, except as provided for in subdivision (a)(1)(I);
- (C) Riots, unlawful assemblies, public demonstrations, mob violence and civil disturbances; except that the claims commission shall have jurisdiction over riots and disturbances occurring on or after January 1, 1985, by persons who are in the care, custody and control of the state where the state's negligence is the proximate cause of the riot or disturbance which, in turn, is the proximate cause of the injury to the claimant or damage to the claimant's personal property;
- (D) Acts of a defendant serving a sentence under probation coupled with periodic confinement pursuant to § 40-35-307; work release pursuant to § 40-35-315; on furlough pursuant to § 40-35-316; a community-based alternative to confinement pursuant to title 40, chapter 36; or parole pursuant to § 40-35-504, unless the defendant is in the custody of or under the control or supervision of a jailer, corrections officer, law enforcement officer, or other agent of the state, or unless the state was negligent in its release of the defendant; provided, that the state is liable for reasonable medical care for inmates under work release, furlough, or community-based alternatives to confinement, although the inmates are not physically in the custody and control of and under the direct personal control of a jailer, corrections officer or other law enforcement officer. The state, county, municipality or political subdivision which may employ the inmate but does not have direct supervision and control of the inmate's work release, confinement or community-based alternative to confinement is not liable for the inmate's reasonable medical treatment for injuries incurred while on such work release, community-based alternative, or other work detail. Nothing in this subdivision (a)(2)(D) shall be construed as changing the general law of comparative fault. Nothing in this subdivision (a)(2)(D) shall be construed as changing the liability for injuries caused by a person or agency due to that person's or agency's own negligence. Nothing in this subdivision (a)(2)(D) shall be construed as changing the general law on liability in subdivision (a)(1)(E); or
- (E) Any failure or malfunction occurring before January 1, 2005, which is caused directly or indirectly by the failure of computer software or any device containing a computer processor to accurately or properly recognize, calculate, display, sort, or otherwise process dates or times, if, and only if, the failure or malfunction causing the loss was unforeseeable or if the failure or malfunction causing the loss was foreseeable but a reasonable plan or design or both for identifying and preventing the failure or malfunction was adopted and reasonably implemented complying with generally accepted computer and information system design standards. Notwithstanding any other provision of the law, nothing in this subdivision (a)(2)(E) shall in any way limit the liability of a third party, direct or indirect, who is negligent. Further, a person who is injured by the negligence of a third party contractor, direct or indirect, shall have a cause of action against the contractor.
- (3) It is the intent of the general assembly that the claims commission shall only hear claims arising on or after January 1, 1985. All claims arising prior to January 1, 1985, are to be governed by the law as it was prior to that date. For purposes of jurisdiction, a claim for recovery of taxes is deemed to arise on the date of the payment under protest. However, for any claim falling within the jurisdiction of the claims commission as determined by this subdivision (a)(3) and arising before January 1, 1985, the board of claims may authorize the chair of the board to transfer any claim or classes of claims to the claims commission. No claims shall be transferred where the claimant objects. Transferred claims are subject to the same requirements and procedures as claims originally filed with the claims commission. It is the intent of the general assembly that the jurisdiction of the claims commission be liberally construed to implement the remedial purposes of this legislation. It is the intent of the general assembly that no distinctions be made between officers and employees of the state under this legislation. The availability of state records and documents concerning claims is subject to the same discovery defenses as are available to other parties. The portion of the records in possession of the division of claims and risk management containing the amount of funds reserved for each claim for the risk management fund is confidential and not subject to § 10-7-503, until the final adjudication of the claim.
- (b) Claims against the state filed pursuant to subsection (a) shall operate as a waiver of any cause of action, based on the same act or omission, which the claimant has against any state officer or employee. The waiver is void if the commission determines that the act or omission was not within the scope of the officer's or employee's office or employment.
- (c) The determination of the state's liability in tort shall be based on the traditional tort concepts of duty and the reasonably prudent person's standard of care.
- (d) The state will be liable for actual damages only. No award shall be made unless the facts found by the commission would entitle the claimant to a judgment in an action at law if the state had been a private individual. The state will not be liable for punitive damages and the costs of litigation other than court costs. The state will not be liable for willful, malicious, or criminal acts by state employees, or for acts on the part of state employees done for personal gain. The state may assert any and all defenses, including common law defenses, which would have been available to the officer or employee in an action against such an individual based upon the same occurrence. The state may assert any absolute common law immunities available to the officer or employee, however, good faith common law immunity may not be asserted. If the claimant is successful with any claim filed with the claims commission after January 1, 1985, the state shall pay such interest as the commissioner may determine to be proper, not exceeding the legal rate as provided in § 47-14-121. In contract actions, interest may be awarded, but if the rate of interest is provided in the contract, the award of interest shall be at that rate.
- (e) For causes of action arising in tort, the state shall only be liable for damages up to the sum of three hundred thousand dollars ($300,000) per claimant and one million dollars ($1,000,000) per occurrence. The board of claims is authorized to purchase insurance, on a per claimant or per occurrence basis, for any class of claim. Any recovery covered by such a policy may exceed the monetary limits of this subsection (e), but only up to the policy limit.
- (f) No language contained in this chapter is intended to be construed as a waiver of the immunity of the state of Tennessee from suit in federal courts guaranteed by the eleventh amendment to the Constitution of the United States.
- (g) No language contained in this chapter is intended to be construed to abridge the common law immunities of state officials and employees.
- (h) State officers and employees are absolutely immune from liability for acts or omissions within the scope of the officer's or employee's office or employment, except for willful, malicious, or criminal acts or omissions or for acts or omissions done for personal gain. For purposes of this chapter, “state officer” or “employee” has the meaning set forth in § 8-42-101(3).
- (i)
- (1) Claims that were timely filed against a state employee with a court of competent jurisdiction and that fall within the jurisdiction of the claims commission found in subdivision (a)(1)(A) shall be dismissed as to the state employee and transferred to the division of claims and risk management to proceed as a claim against the state; provided, that the state employee alleged to have acted negligently was, at the time of the incident giving rise to the claim, operating a private motor vehicle within the scope of the employee's office or employment, and the employee's action or inaction was not willful, malicious, criminal or done for personal gain. When a motion for transfer is made, the court shall require that notice be given the attorney general and reporter and the state shall be permitted to intervene and respond to the motion. Upon such transfer, the claim shall be considered timely filed with the division of claims and risk management and the claims commission. Such transfer shall be effected upon an order of dismissal and transfer from the court. Any such transfer must be made within one (1) year of the filing of the original complaint with the court or on or after April 22, 1998, whichever is later. Such claims shall be considered by the division of claims and risk management and the claims commission, as provided by law. This subsection (i) shall be effective for causes of action arising on or after July 1, 1995, pending on or after April 22, 1998, and causes of action arising on or after April 22, 1998.
- (2) Claims which are transferred to the division of claims and risk management pursuant to this subsection (i) shall be investigated by the division of claims and risk management, acted upon or transferred by the division, and acted upon by the claims commission pursuant to the same statutory requirements and procedures as apply to claims originally filed with the division of claims and risk management.
- (j) Notwithstanding any other provision of this chapter to the contrary, the state does not waive its sovereign immunity for any loss, damage, injury, or death arising from COVID-19, as defined in § 14-1-101, unless the claimant proves by clear and convincing evidence that the loss, damage, injury, or death was proximately caused by an act or omission of the state or an employee or agent of the state constituting gross negligence. The requirements of title 14, chapter 5 apply to any such cause of action when applicable.
History (32)
- Acts 1984, ch. 972, § 8
- 1985, ch. 36, § 12
- 1985, ch. 105, §§ 1, 4-7, 16
- 1985, ch. 322, § 3
- 1986, ch. 626, §§ 1-3
- 1986, ch. 749, § 1
- 1986, ch. 911, §§ 1, 2, 4
- 1988, ch. 890, § 1
- 1989, ch. 28, § 2
- 1989, ch. 491, §§ 1, 2, 5
- 1991, ch. 133, § 3
- 1991, ch. 499, § 2
- 1993, ch. 494, § 2
- 1996, ch. 698, § 1
- 1996, ch. 1036, § 1
- 1998, ch. 785, §§ 2-7, 18, 31, 32
- 1999, ch. 458, §§ 1, 4
- 2000, ch. 573, § 1
- 2003, ch. 212, § 8
- 2004, ch. 699, § 1
- 2005, ch. 384, §§ 1-3
- 2012, ch. 798, § 4
- 2013, ch. 289, §§ 94, 95
- 2014, ch. 795, § 14
- 2017, ch. 271, § 1
- 2017, ch. 344, § 1
- 2017, ch. 423, § 2
- 2018, ch. 873, § 1
- 2020 (2nd Ex. Sess.), ch. 1, § 4
- 2021 (3rd Ex. Sess.), ch. 6, §§ 2-4
- 2022, ch. 1117, § 2
- 2023, ch. 48, § 4.
§ 9-8-308. Privilege tax on filing of claims — Exemption. - (a) There is levied a privilege tax on the filing of claims with the claims commission of twenty-five dollars ($25.00) on each claim filed with the claims commission; provided, that no tax shall be levied on claimants who consent at the time of filing with the administrative clerk for their claims to be assigned to the small claims docket under § 9-8-403(a)(2), and proceed upon affidavits filed with the claims commission without a hearing. The tax shall be collected by the administrative clerk of the claims commission, and all funds collected by the clerk shall be paid over to the appropriate fund, as shall be determined by the state treasurer. Claims automatically transferred to the claims commission by the division of claims and risk management pursuant to § 9-8-402(c) due to a failure to honor or deny the claim during the ninety-day settlement period shall not be subject to the privilege tax established by this section. Notwithstanding any limit on the amount which may be awarded to a claimant, the commissioner or the reviewing court shall have the discretion to order that the privilege tax paid pursuant to this section be refunded to a claimant whose claim is determined to be meritorious.
- (b) Any person shall be permitted to file a claim with the claims commission without paying the privilege tax established by subsection (a) by taking and subscribing the following oath in writing: “I, , do solemnly swear, that, owing to my poverty, I am not able to pay the privilege tax ordinarily required to file a claim with the claims commission and that I am justly entitled to the damages sought to the best of my belief.”
History (5)
- Acts 1989, ch. 491, § 6
- 1990, ch. 755, § 14
- 1993, ch. 494, § 3
- 1998, ch. 785, § 15
- 2017, ch. 271, § 1.
§ 9-8-309. Temporary assignment of administrative law judges to commission. - Upon the request of the governor, or of an individual claims commissioner as to claims within that commissioner's grand division, or of a majority of the claims commissioners as to claims within any grand division, the secretary of state may assign administrative law judges from the administrative procedures division of the secretary of state's office to assist in the removal of unacceptable congestion, delay on the claims commission docket or in the event of a claims commissioner's recusal or disability. Upon such assignment, administrative law judges shall have all the powers, duties and immunities as a regularly appointed claims commissioner. Costs associated with the assignment of administrative law judges to hear claims commission matters shall be paid from the risk management fund.
History (3)
- Acts 1997, ch. 165, § 1
- 2003, ch. 212, § 8
- 2013, ch. 380, § 1.
§ 9-8-310. Retaliatory termination for filing of claim — Filing of grievances. - (a) An entity of state government may not terminate a state employee for filing a workers' compensation claim with the claims commission.
- (b) Any employee terminated for filing a workers' compensation claim may file a grievance in accordance with § 8-30-318, or may file a claim with the claims commission, at the option of such employee, in accordance with this part.
History (2)
- Acts 1998, ch. 738, § 1
- 1999, ch. 54, § 1.
§ 9-8-311. Confidentiality of medical records maintained by commission. - (a) Medical records received and maintained by the commission shall be treated as confidential and shall not be open for inspection by members of the public pursuant to title 10, chapter 7.
- (b) As used in this section:
- (1) “Healthcare provider” means healthcare professionals, establishments, or facilities licensed, registered, certified, or permitted pursuant to title 63 or title 68 and regulated under the authority of either the department of health or any agency, board, council, or committee attached to the department of health; and
- (2) “Medical record” means any and all documents maintained by a healthcare provider relating to a patient's diagnosis, care, and treatment, including, but not limited to, notes, reports, memos, e-mails, facsimile transmissions, laboratory tests, billing documents, and medication orders.
Part 4 Division of Claims and Risk Management § 9-8-401. Creation. - There is hereby created a division of claims and risk management as a division of the department of the treasury. The staff of the present board of claims shall also be the staff of the division of claims and risk management.
History (2)
- Acts 1984, ch. 972, § 9
- 2017, ch. 271, § 1.
§ 9-8-402. Claims. - (a)
- (1) The claimant must give written notice of the claimant's claim to the division of claims and risk management as a condition precedent to recovery, except claims for recovery of taxes shall be filed directly with the administrative clerk of the claims commission. The filing of a false notice with the division of claims and risk management is punishable as a Class A misdemeanor.
- (2) The notice shall state the circumstances upon which the claim is based, including, but not limited to: the state department, board, institution, agency, commission or other state entity that allegedly caused the injury; the time and place of the incident from which the claim arises; and the nature of the claimant's injury.
- (3) The entire disputed amount of tax, penalty and interest must be paid under protest before any action can be filed contesting the assessment of any tax. The claim for recovery of taxes must be filed with the claims commission within six (6) months of the payment under protest. This is the sole and exclusive jurisdiction for determining tax liability, except that any tax collected or administered by the commissioner of revenue shall be contested according to chapter 749 of the Acts of 1986, and any unemployment insurance tax collected or administered by the commissioner of labor and workforce development shall be contested according to title 50, chapter 7.
- (4) No writ for the prevention of the collection of any revenue claimed, or to hinder and delay the collection of the same, shall in anywise issue, either injunction, supersedeas, prohibition, or any other writ or process whatever; but in all cases in which, for any reason, any person shall claim that the tax so collected was wrongfully or illegally collected, the remedy for that party shall be as herein provided, and in no other manner.
- (5) The notice to the division is deemed to be notice to the employer for workers' compensation purposes. Claims not within the jurisdiction of the claims commission shall be sent to the board of claims. A copy of any claim filed with or transferred to the claims commission must be served on the attorney general and reporter and the division of claims and risk management by certified mail, return receipt requested, or by such other method as the attorney general and reporter deems appropriate.
- (b) The claim is barred unless the notice is given within the time provided by statutes of limitations applicable by the courts for similar occurrences from which the claim arises; provided, however, that, for workers' compensation purposes, the right to compensation and other benefits under the Workers' Compensation Law, compiled in title 50, chapter 6, shall be barred, unless the notice required by subsection (a) is filed with the division of claims and risk management within one (1) year after the accident resulting in injury. The filing of the notice by the claimant tolls all statutes of limitations as to other persons potentially liable to the claimant due to the occurrence from which the claim before the commission arises. The applicable statute of limitations for the recovery of taxes shall continue to be six (6) months after the payment of the taxes under protest. Absent prior written consent of the commission, it is mandatory that any claim filed with the claims commission upon which no action is taken by the claimant to advance the case to disposition within any one-year period of time be dismissed with prejudice.
- (c) The division of claims and risk management shall investigate every claim and shall make every effort to honor or deny each claim within ninety (90) days of receipt of the notice. If the claim is denied, the division shall so notify the claimant and inform the claimant of the reasons therefor and of the claimant's right to file a claim with the claims commission within ninety (90) days of the date of the denial notice. If the claim is honored and the damages may be ascertained within the ninety-day settlement period, the division shall so notify the claimant, and inform the claimant of the conditions of the settlement offer, and of the claimant's right to file such claimant's claim with the claims commission within ninety (90) days of the date of the settlement notice if the conditions of the settlement offer are unacceptable. If the claim is honored and the amount of damages may not be ascertained within the ninety-day settlement period because evidence of loss will be obtained after the ninetieth day of the settlement period, the division shall so notify the claimant and inform the claimant of the claimant's right to file a claim with the claims commission within ninety (90) days of the date the division forwards final compensation to the claimant or upon written request for transfer to the commission by the claimant; provided, that final compensation shall be forwarded to the claimant within one (1) year of the date of the settlement notice. If the division fails to honor or deny the claim within the ninety-day settlement period, the division shall automatically transfer the claim to the administrative clerk of the claims commission.
- (d)
- (1) Notwithstanding subsection (c) or any other law to the contrary, if the division denies the compensability of a workers' compensation claim, the division shall so notify the claimant and inform the claimant of the reasons for the denial, and of the claimant's right to request an alternative dispute resolution, pursuant to § 50-6-236, within ninety (90) days from the date of the denial notice. If the division fails to honor or deny the compensability of a workers' compensation claim within the ninety-day settlement period, the division shall submit the dispute to the alternative dispute resolution process, as provided in § 50-6-236.
- (2) Where the division of claims and risk management has paid workers' compensation benefits, either voluntarily or as a result of an order to do so, within one (1) year following the accident resulting in injury, the claimant must file a petition for benefit determination, pursuant to § 50-6-236, no later than one (1) year from the latter of the date of the last authorized treatment or the time the division ceased to make payments of compensation to or on behalf of the claimant, in order for the claimant to recover any unpaid or further workers' compensation benefits. For purposes of this section, the issuing date of the last voluntary payment of compensation, not the date of its receipt, shall constitute the time the division ceased making payments and the division shall provide such date on request.
- (3) In conducting any alternative dispute resolution pursuant to this subsection (d), the conference shall be held in the county where the employee lives, unless otherwise agreed to between the parties or otherwise directed by the commissioner. A workers' compensation specialist, as defined in § 50-6-102, shall have the authority to continue or reschedule an alternative dispute resolution.
- (4) In the event an agreement cannot be reached through alternative dispute resolution as to all issues related to the claim, the claimant shall have ninety (90) days, after the issuance of a dispute certification notice as provided in § 50-6-236, to file a claim with the claims commission. A claim for workers' compensation benefits must be instituted in the claims commission within that ninety (90) days.
- (5) No claim for workers' compensation shall be filed with the claims commission until the alternative dispute resolution process, as provided in § 50-6-236, has been exhausted. Notwithstanding this subsection (d), if the parties have mutually agreed to a compromise and settlement of a claim for workers' compensation, the parties shall not be required to exhaust the alternative dispute resolution process before filing a claim and submitting the compromise and settlement to the claims commission for approval, pursuant to § 9-8-307(a)(1)(K), or to a workers' compensation judge pursuant to § 50-6-240. If the settlement is not approved, the parties shall then exhaust the alternative dispute resolution process.
- (6) The right to compensation for an occupational disease, or a claim for death benefits as a result of an occupational disease, must be initiated within the time periods set forth in this section; provided, however, that the applicable time limitation period or periods shall commence as of the date of the beginning of the incapacity for work resulting from an occupational disease, or upon the date death results from the occupational disease; provided, however, that, if, upon the date of the death of the employee, the employee's claim has become barred, the claim of the employee's dependent or dependents shall likewise be barred.
- (7) In case of physical or mental incapacity, other than minority, of the injured person or such injured person's dependents to perform or cause to be performed any action required within the time specified in this section, then the period of limitation in such case shall be extended for one (1) year from the date when such incapacity ceases.
History (10)
- Acts 1984, ch. 972, § 10
- 1985, ch. 105, §§ 2, 9, 10
- 1986, ch. 626, § 11
- 1986, ch. 749, § 2
- 1989, ch. 591, §§ 1, 6
- 1998, ch. 785, §§ 16, 17
- 2004, ch. 699, § 2
- 2005, ch. 384, §§ 4-6
- 2013, ch. 289, §§ 96-99
- 2017, ch. 271, § 1.
§ 9-8-403. Dockets — Determination of claims — Appeals — Notice of appeal. - (a) The commission shall maintain two (2) separate dockets. Upon transfer to the administrative clerk of the claims commission, the claim shall be assigned to the applicable docket:
- (1) A regular docket similar to those maintained by courts of record. A court reporter shall be utilized at all hearings on claims on the regular docket and a record of such proceedings shall be made. These proceedings shall be conducted pursuant to the Tennessee Rules of Civil Procedure where applicable and otherwise pursuant to rules and regulations promulgated by the commission. The decisions of the individual commissioners may be appealed to the entire claims commission pursuant to rules promulgated by the commission. The decisions of the individual commissioners or, when rendered, decisions of the entire commission regarding claims on the regular docket may be appealed to the Tennessee court of appeals pursuant to the same rules of appellate procedure which govern interlocutory appeals and appeals from final judgments in trial court civil actions, except that tax appeals shall go directly to the Tennessee supreme court and workers' compensation appeals shall be appealed pursuant to the procedure for other workers' compensation cases under § 50-6-225; or
- (2) A small claims docket consisting of claims satisfying the monetary limit applicable to the general sessions court of Davidson County. No court reporter shall be utilized nor any record made of these proceedings. These proceedings shall be conducted pursuant to rules and regulations promulgated by the commission. If a claimant consents to having the claimant's claim proceed upon affidavits filed with the commission without a hearing, the state shall be deemed to have waived a hearing on the claim unless the state requests a hearing within sixty (60) days after the claim is filed with, or transferred to, the commission. No appeal may be taken from a commissioner's decision regarding claims appearing on the small claims docket.
- (b) All claims shall be heard without the aid of a jury. The claimant may appear on such claimant's own behalf or through counsel.
- (c) At the discretion of either party at any time prior to a hearing, a claim may be removed from the small claims docket to the regular docket. Once removed, the claim shall be treated like any other claim on the regular docket.
- (d) The state may, under rules promulgated by the commission, bring third parties before the commission when necessary to determine the ultimate liability.
- (e) The commission shall also determine all claims on behalf of the state against the claimant arising out of the same occurrence.
- (f) The state may assert any or all available defenses.
- (g) A settlement offer by either party may not be used as evidence in a later commission hearing.
- (h) Claims based on the negligent care, custody or control of personal property by persons in the legal custody of the state shall proceed on affidavits only, except where the commission determines that witnesses should be heard.
- (i) Notwithstanding any provision to the contrary, claims for compensation filed under the Criminal Injuries Compensation Act, compiled in title 29, chapter 13, and § 40-24-107, shall be heard on the small claims docket only, unless removed to the regular docket pursuant to subsection (c).
- (j) Commissioners shall provide findings of facts and conclusions of law on the disposition of all claims on the regular docket. Except as provided in § 29-13-109, an order disposing of a claim on the small claims docket need not include findings of fact and conclusions of law unless requested by a party. The commission is encouraged to make oral decisions immediately after a hearing on any claim if the commission finds that further deliberation is unnecessary. If a claim is disposed of by an oral ruling, counsel for the prevailing party shall prepare and submit an appropriate order reflecting such ruling. Such order shall include proposed findings of fact and conclusions of law if the claim was heard on the regular docket or if a party requested such findings and conclusions in a hearing on the small docket. Any orders prepared by counsel for the prevailing party shall be submitted to the adverse party for approval.
- (k) If a claimant appeals the decision of a commissioner pursuant to subdivision (a)(1), the claimant shall, in addition to complying with all other requirements for perfecting an appeal, notify the clerk of the commission by filing the notice of appeal with the clerk. The notice shall be accompanied by a bond payable to the State of Tennessee in an amount determined by the clerk to be sufficient to defray the cost of preparing the transcript. The bond shall be in the form of a cash deposit, or by bond secured either by a corporation authorized under the laws of this state to act as surety on such a bond or by one (1) or more individual personal sureties residing within this state and who own real estate within this state. The bond shall be conditioned to pay the charge for services of the court reporter in preparing the transcript of the evidence introduced at the hearing before the commission. Whenever security is given in the form of a bond with one (1) or more sureties, the address of each surety shall be shown on the bond. In the event the claimant does not obtain the relief prayed for in the claimant's appeal, the cost of preparing the transcript shall be taxed against the claimant and shall be paid by the claimant or the surety on the bond filed with the commission.
- (l) In the discretion of the claims commission and by agreement of the parties, all or part of a hearing may be conducted by electronic means.
History (7)
- Acts 1984, ch. 972, § 11
- 1985, ch. 105, §§ 8, 14
- 1997, ch. 34, § 2
- 1997, ch. 165, §§ 6-8, 13
- 1998, ch. 785, §§ 10-14
- 1999, ch. 145, § 1
- 2000, ch. 573, § 2.
§ 9-8-404. Removal of claims — Appeals. - (a) Prior to hearing, upon the petition of either party showing the approval of the attorney general and reporter, the claim shall be removed to the appropriate chancery or circuit court with venue for handling in accordance with this part, except the normal procedural rules of the court shall be applicable. Appeal from the chancery or circuit court shall be to the court of appeals.
- (b) The commission may transfer the action to the appropriate chancery or circuit court with venue on its own after a determination, in writing, by the commission that fair and complete resolution of all claims involved cannot be accomplished in administrative proceedings before the commission. Such transfers shall be limited to tort claims arising out of the same fact situation where much of the evidence to be presented would be admissible against the state and one (1) or more additional defendants. If such transferred claim is not consolidated for trial, the claim against the state shall be transferred back to the commission. If, prior to the time of trial, all claims other than those against the state have been dismissed, settled or otherwise concluded, upon motion of the state the claim shall be transferred back to the commission. The transferred claim shall be handled in accordance with this part, except the normal procedural rules of the court shall be applicable. Appeal from the chancery or circuit court shall be to the court of appeals.
- (c) If the docket for any grand division becomes overloaded in the judgment of the commission chair, the chair may assign one (1) of the other two (2) commissioners to hear some of those claims in that division.
History (4)
- Acts 1984, ch. 972, § 12
- 1988, ch. 850, § 2
- 1989, ch. 491, §§ 3, 4
- 1990, ch. 806, §§ 1, 2.
§ 9-8-405. Settlement of claims — Mediation. - (a) Any claim filed with the division may be settled pursuant to § 20-13-103, following consultation with the governmental entity affected therein. Additionally, the attorney general and reporter, with the written approval of the governor and the comptroller of the treasury, may authorize the state treasurer to settle certain classes of claims without the necessity of complying with § 20-13-103.
- (b) In the event of disapproval of a proposed settlement, the claim shall be processed in the same manner as other claims before the commission.
- (c) By agreement of the parties, a mediator may be employed in an attempt to settle a claim. Such a claim still must be settled in accordance with subsection (a) and/or § 20-13-103. Costs associated with alternative dispute resolution, as agreed to by the parties, shall be paid from the risk management fund.
History (3)
- Acts 1984, ch. 972, § 13
- 1997, ch. 165, § 9
- 2003, ch. 212, § 8.
§ 9-8-406. Representation of state — Negotiation of prehearing claim settlements. - The attorney general and reporter shall represent the state in all claims before the commission; however, the attorney general and reporter may delegate to the department of the treasury or the governmental entity against which the claim is made the authority to negotiate prehearing claim settlements, and to represent the state in proceedings before the claims commission or any portion of that authority which the attorney general and reporter deems appropriate.
History (1)
- Acts 1984, ch. 972, § 14.
§ 9-8-407. Actions against third parties for reimbursement. - (a) Whenever the acts or omissions of a third party are the proximate cause of an incident giving rise to a claim against the state for which the state has, pursuant to this chapter, compensated the person injured or damaged by the acts or omissions of such third party, the state of Tennessee may institute an action against such third party for the recovery of the whole or any specified part of the amount paid by the state in the appropriate court in Tennessee, or in the federal, state or district court in which such third party resides.
- (b) As a condition for the settlement of a claim filed under this chapter in which a third party may be liable, the state treasurer, exercising the settlement authority delegated to the state treasurer pursuant to § 9-8-405, shall require the claimant to agree, by such form as the attorney general and reporter may direct, to cooperate fully with appropriate officials of the state should the state proceed to institute an action against a third party to recover the whole or any specified part of the amount paid by the state. Should the claimant fail to cooperate with the state in accordance with such agreement, the state shall have the right to recover any amounts paid by the state to the claimant. In awarding compensation, the claims commission shall include a requirement that the claimant execute an agreement with the state to cooperate with the state in an action against a liable third party in accordance with this section, unless the commission finds that the facts in such claim dictate that such an agreement should not be required.
- (c) Should any claimant choose to exercise such claimant's right to recover damages in civil court for injury or damages, such claimant shall notify the attorney general and reporter of the institution of such a lawsuit by serving the attorney general and reporter through the United States mail with a copy of the complaint, all subsequent pleadings and a copy of the final judgment in order to give the state notice of the existence of such an action so that the state may pursue its subrogated interest.
History (1)
- Acts 1986, ch. 626, § 10.
§ 9-8-408. Confidentiality of medical records maintained by division. - (a) Medical records received and maintained by the division of claims and risk management shall be treated as confidential and shall not be open for inspection by members of the public pursuant to title 10, chapter 7.
- (b) As used in this section:
- (1) “Healthcare provider” means healthcare professionals, establishments, or facilities licensed, registered, certified, or permitted pursuant to title 63 or title 68 and regulated under the authority of either the department of health or any agency, board, council, or committee attached to the department of health; and
- (2) “Medical record” means any and all documents maintained by a healthcare provider relating to a patient's diagnosis, care, and treatment, including, but not limited to, notes, reports, memos, e-mails, facsimile transmissions, laboratory tests, billing documents, and medication orders.
History (2)
- Acts 2015, ch. 47, § 2
- 2017, ch. 271, § 1.
§ 9-8-409. Centralized information system for reporting of alleged dangerous conditions on state-maintained highways and repair of conditions. - The state treasurer, in conjunction with the department of transportation, shall develop, implement, and administer a centralized information system for the reporting of alleged dangerous conditions on state-maintained highways and the repair of the conditions. To fulfill the duties described in this section, the state treasurer, in conjunction with the department of transportation, may utilize and modify an existing system of the department of transportation or the department of treasury, or may purchase a new system. The state treasurer shall enter into a memorandum of understanding with the commissioner of transportation to share and exchange information to be maintained in the centralized system. The state treasurer is authorized to contract with third-party entities and individuals to obtain and maintain information in the centralized system.
History (1)
- Acts 2022, ch. 1004, § 1.
Chapter 9 Funding of State Debt Part 1 General Provisions § 9-9-101. State funding board. - The state funding board shall be composed of the governor, the commissioner of finance and administration, the state treasurer, the secretary of state, and the comptroller of the treasury. The governor shall serve as the chair, and the comptroller shall serve as the vice chair and secretary. The board has the power to prescribe its rules and regulations and govern its meetings and procedures as it may deem advisable. A majority of the board constitutes a quorum and the confirming vote of at least three (3) members of the board is required.
History (16)
- Acts 1927, ch. 1, § 4
- 1929, ch. 125, § 1
- 1929 (Ex. Sess.), ch. 9, § 1
- Code 1932, § 1800
- Acts 1937, ch. 33, § 45
- 1937, ch. 258, § 1
- 1939, ch. 11, § 29
- 1941, ch. 7, § 1
- C. Supp. 1950, §§ 255.47, 1800.1 (Williams, §§ 255.48, 1800.1)
- Acts 1959, ch. 9, § 8
- 1959, ch. 155, § 1
- impl. am. Acts 1961, ch. 97, § 3
- Acts 1976, ch. 806, § 1(46)
- T.C.A. (orig. ed.), § 9-901
- Acts 2010, ch. 982, § 1
- 2013, ch. 176, § 2.
§ 9-9-102. Maintenance of records on the condition of all debt obligations and payments. - The commissioner of finance and administration shall maintain, or cause to be maintained, records on the condition of all debt obligations described in § 9-9-105(a) and of the payment of the principal of and premium, if any, and interest on such obligations.
History (9)
- Acts 1899, ch. 8, § 1
- Shan., § 1068a 2
- Code 1932, § 1802
- mod. C. Supp. 1950, § 1802
- modified
- T.C.A. (orig. ed.), § 9-903
- Acts 1985, ch. 118, § 64
- 2000, ch. 598, § 1
- 2013, ch. 176, § 3.
§ 9-9-103. Debt service payments. - There is hereby appropriated to the state funding board on a direct and continuing basis a sum sufficient for payment of debt service (principal, interest and premium, if any) on outstanding bonds and other debt obligations (including notes), amounts due on contracts or agreements authorized under this chapter, and necessary related expenses. The state funding board is authorized to make debt service payments on outstanding bonds and other debt obligations (including notes), and make payments due under contracts and agreements authorized under this chapter, and necessary related expenses, as provided in this section from any funds held in the state treasury not otherwise legally restricted, independent of an appropriation bill as contemplated by chapter 4, part 51 of this title.
History (7)
- Acts 1937, ch. 165, § 1 (Williams, § 1811.12)
- impl. am. Acts 1949, ch. 52, § 1
- modified
- T.C.A. (orig. ed.), § 9-904
- Acts 1998, ch. 582, § 7
- 2001, ch. 264, § 1
- 2013, ch. 176, § 4.
§ 9-9-104. Pledge of revenues — Covenants for protection of bondholders. - (a) For the payment of the principal of and interest on the bonds of the state of Tennessee issued under this chapter outstanding as of July 1, 2013, there is hereby pledged the annual proceeds of a tax of not less than five cents (5¢) per gallon upon gasoline, the annual proceeds of the special tax on petroleum products provided for by § 67-3-203, one-half (½) of the annual proceeds of motor vehicle registration fees now or hereafter required to be paid to the state, and the entire annual proceeds of franchise taxes imposed by the franchise tax law, compiled in title 67, chapter 4, part 21. This pledge shall not extend to any bonds issued under this chapter after July 1, 2013.
- (b) As long as any bonds issued under this chapter that were outstanding as of July 1, 2013 remain outstanding, the state of Tennessee hereby covenants with the persons who now or may hereafter hold such bonds that it will not decrease by legislative action any of the fees or taxes that constitute the special revenues pledged by this section, or eliminate from the requirement to pay such fees or taxes any substance, motor vehicle or corporation on account of which the payment of such fees or taxes is now required, and that it will levy a tax of not less than five cents (5¢) per gallon upon gasoline or other motor vehicle fuel, unless the state funding board shall certify that all payments due the state funding board under this chapter have been made in full, that the state is not in default in the payment of any outstanding debt or in the payment of interest thereon, and that such fees and taxes at lower rates to be specified by the state funding board, in such year or years (not exceeding two (2) years), will be sufficient to provide funds adequate to meet all payments required to be made by the state funding board in such year or years, as well as to provide for the other obligations and expenses of the state for such year or years, to be defrayed therefrom, in which event the state of Tennessee shall be under no obligation to charge or levy in such year or years fees or taxes in excess of the rates so certified by the state funding board.
- (c) In no event shall the pledge and covenants set forth in this section extend past or be effective after June 30, 2033.
History (7)
- Acts 1937, ch. 165, § 13 (Williams, § 1811.24)
- impl. am. Acts 1949, ch. 52, § 1
- modified
- Acts 1977, ch. 3, § 1
- T.C.A. (orig. ed.), § 9-905
- Acts 1998, ch. 582, §§ 1, 8
- 2013, ch. 176, § 5.
§ 9-9-105. Bonds constitute direct state obligations — Debt obligations constitute a charge and lien — Satisfaction of debt service coverage test. - (a) All bonds issued (and to be issued) under this chapter, all notes issued (and to be issued) in anticipation of such bonds, and all tax revenue anticipation notes issued (and to be issued) under this chapter shall constitute direct general obligations of the state of Tennessee for the payment of the principal of and premium, if any, and interest on which there is also pledged the full faith and credit of the state of Tennessee. Subject only to § 9-9-104(a), all such debt obligations shall constitute a charge and lien upon the entire fees, taxes and other revenues and funds allocated to the general fund, the debt service fund, and the highway fund; and, if necessary, upon the first such fees, taxes, revenues and funds thereafter received and allocated to such funds, except only such fees, taxes, revenues and funds as may be otherwise legally restricted.
- (b) The state of Tennessee hereby covenants with the persons who now or may hereafter hold any debt obligations described in § 9-9-105(a) that it will raise fees, taxes and other revenues sufficient, together with funds on hand derived from all sources, to pay the principal of and premium, if any, and interest on such obligations as and when due and payable.
- (c)
- (1) The state of Tennessee hereby covenants with the persons who now or may hereafter hold any bonds issued under this chapter that no bonds shall be issued under this chapter after July 1, 2013, unless the following debt service coverage test is satisfied: the amount necessary to pay the maximum annual debt service payable in the then current or any future fiscal year, is not greater than ten percent (10%) of the amount of total state tax revenue allocated to the general fund, to the debt service fund, and to the highway fund for the immediately preceding fiscal year.
- (2) For purposes of satisfying this test, “state tax revenues” are defined as those taxes, licenses, fees, fines, and permits collected by the department of revenue and allocated to the general fund, the debt service fund, and the highway fund excluding the portion of those taxes shared with local governments.
- (3) “Debt service”, for this purpose, means and includes principal of and interest on all outstanding bonds issued under this chapter and the bonds then proposed to be issued under this chapter, in the aggregate; provided, that in determining the outstanding bonds, there shall be excluded any outstanding bonds the payment of which has been fully provided for by funds or securities (including expected income therefrom), or both, set aside for that purpose.
History (5)
- Acts 1937, ch. 165, § 8 (Williams, § 1811.19)
- modified
- T.C.A. (orig. ed.), § 9-906
- Acts 1998, ch. 582, § 9
- 2013, ch. 176, § 5.
§ 9-9-106. Certification of amount necessary for payment of debt obligations. - The state funding board shall certify to the commissioner of finance and administration from time to time, but not less than annually, the amount necessary, together with funds on hand derived from all sources, to enable the board to provide for the payment of the principal of and premium, if any, and interest on all debt obligations described in § 9-9-105(a) as and when the same shall become due and payable.
History (7)
- Acts 1937, ch. 165, § 8 (Williams, § 1811.19)
- impl. am. Acts 1949, ch. 52, § 1
- modified
- impl. am. Acts 1959, ch. 9, § 8
- Acts 1973, ch. 336, § 1
- T.C.A. (orig. ed.), § 9-907
- Acts 2013, ch. 176, § 5.
§ 9-9-107. Payments by state funding board. - The state funding board shall provide for the payment of the principal of and premium, if any, and interest on all bonds issued under this chapter, all notes issued in anticipation of such bonds and all tax revenue anticipation notes issued under this chapter, amounts due on contracts or agreements described in § 9-9-202(g) and (h) or other contracts or agreements relating to such debt obligations, and necessary related expenses incurred under this chapter as the same shall become due, out of the fees, taxes and other revenues and funds available for such purposes.
History (5)
- Acts 1937, ch. 165, §§ 9, 10 (Williams, §§ 1811.20, 1811.21)
- impl. am. Acts 1959, ch. 9, § 8
- T.C.A. (orig. ed.), § 9-908
- Acts 2000, ch. 598, § 2
- 2013, ch. 176, § 5.
§ 9-9-108. State funding board's authority to deposit or transfer funds. - The state funding board may:
- (1) Deposit funds and revenues paid to it in the pooled investment fund authorized by § 9-4-603 or in a deposit account at a bank or trust company located within or without this state, which will give such security for such deposit of the kind and type now required by law for the deposit of other state funds; or
- (2) Transfer cash, pending its application to the payment of the principal of or interest on the outstanding obligations of the state, into a fiduciary or trust account with a bank or trust company located within or without this state, under terms as the board may require to ensure the safety of the funds.
History (5)
- Acts 1937, ch. 165, § 10 (Williams, § 1811.21)
- impl. am. Acts 1959, ch. 9, § 8
- T.C.A. (orig. ed.), § 9-909
- Acts 1985, ch. 118, § 65
- 2000, ch. 598, § 2.
§ 9-9-109. Custodian for securities. - The state funding board is expressly authorized to contract with a bank or trust company located within or without this state to act as a custodian for securities held by or for the benefit of the board, including collateral pledged pursuant to § 9-9-108(1), under terms as the board may require to ensure the safety of the securities.
History (5)
- Acts 1937, ch. 165, § 3 (Williams, § 1811.14)
- impl. am. Acts 1959, ch. 9, § 8
- T.C.A. (orig. ed.), § 9-910
- Acts 1985, ch. 118, § 66
- 2000, ch. 598, § 2.
§ 9-9-110. Investment of cash not immediately required. - Cash in the hands of the state funding board not immediately required for the payment of the principal of or interest on outstanding obligations of the state and held as provided by § 9-9-108 may be invested, in the board's discretion, in general obligation debt of the state of Tennessee or in any other obligations which are legal for the investment of funds of the state of Tennessee, with such yield and maturity as determined by the board after consultation with the state treasurer.
History (6)
- Acts 1937, ch. 165, § 11 (Williams, § 1811.22)
- impl. am. Acts 1959, ch. 9, § 8
- Acts 1977, ch. 3, § 2
- T.C.A. (orig. ed.), § 9-911
- Acts 1985, ch. 118, § 67
- 2000, ch. 598, § 2.
§ 9-9-111. Vested rights of holders of debt obligations. - The holders of all debt obligations of the state of Tennessee described in § 9-9-105(a) and all persons who may hereafter purchase such obligations shall have, and are hereby declared to have, a vested right in the performance of the covenants and pledges contained in this chapter, and the performance of the duties imposed upon any officer or agency of the state of Tennessee by or pursuant to this chapter may be enforced by the holder of any such obligation by appropriate proceedings; provided, that no such holders or purchasers of debt obligations issued after July 1, 2013, shall have any such rights with respect to § 9-9-104.
History (8)
- Acts 1937, ch. 165, § 12 (Williams, § 1811.23)
- impl. am. Acts 1949, ch. 52, § 1
- modified
- impl. am. Acts 1959, ch. 9, § 8
- Acts 1977, ch. 3, § 5
- T.C.A. (orig. ed.), § 9-916
- Acts 1998, ch. 582, § 10
- 2013, ch. 176, § 6.
§ 9-9-112. Exemption from taxes. - Principal of and interest on debt obligations issued under this chapter shall be exempt from taxation by the state, or by any county, municipality or taxing district of the state, except inheritance, transfer and estate taxes.
History (4)
- Acts 1937, ch. 165, § 15 (Williams, § 1811.26)
- 1977, ch. 3, § 6
- T.C.A. (orig. ed.), § 9-917
- Acts 2013, ch. 176, § 6.
§ 9-9-113. Bond term not to exceed lifetime of item financed — Tax exempt status. - (a) No funds obtained through the sales of any bonds or notes of the state of Tennessee as provided for by this chapter shall be used to purchase or otherwise obtain any equipment, goods, or services, unless the equipment, goods, or services shall have a reasonably anticipated lifetime of use equal to or greater than the period of time for which the bonds or notes are issued and during which interest is payable for them. The “reasonably anticipated lifetime” within the meaning of this section shall be determined by the state building commission for projects under its jurisdiction and by other appropriate authority designated by the state funding board for all projects or programs not under the jurisdiction of the state building commission. Architectural, engineering, and other like services, which are determined by the state building commission or other appropriate authority designated by the state funding board to be a normal part of the project or program cost are not precluded by this section from funding from bond or note proceeds.
- (b) For the purpose of ensuring that the bonds, notes and other obligations issued after September 1, 1986, pursuant to this chapter maintain their tax-exempt status as may be provided by the Internal Revenue Code of 1986 (26 U.S.C.), as amended, no state officer or employee or user of a project or program shall authorize or allow any change, amendment or modification to a project or program financed or refinanced with the proceeds of such obligations which change, amendment or modification would affect the tax-exempt status of such obligations unless the change, amendment, or modification shall have received the prior approval of the office of state and local finance in the office of the comptroller of the treasury and the state funding board. Failure to receive such approval shall render any change, amendment, or modification null and void.
History (4)
- Acts 1977, ch. 222, § 1
- T.C.A., § 9-929
- Acts 1987, ch. 114, § 1
- 2016, ch. 571, § 3.
§ 9-9-114. Records of state obligations payments. - The secretary of the funding board shall keep, or cause to be kept, appropriate records concerning the payment of obligations of the state issued under this chapter, including information regarding items redeemed.
History (3)
- Acts 1957, ch. 297, § 1
- T.C.A., § 9-925
- Acts 2000, ch. 598, § 3.
§ 9-9-115. Destruction of paid or cancelled bonds by paying agent. - (a) The state of Tennessee, acting by resolution of the state funding board, may authorize and direct the paying agent for its bonds, notes and coupons, or other person in possession of its bonds, notes and coupons, to destroy all bonds, notes and coupons duly paid and cancelled.
- (b) Such bonds, notes and coupons duly paid and cancelled during any fiscal year beginning July 1 and ending on the following June 30 may be destroyed only after the fiscal audit of the appropriate state agency covering the fiscal year has been completed, and the department of audit will notify the state funding board that due account has been made of such duly paid and cancelled bonds, notes and coupons. The paying agent or other person in possession of the state's bonds, notes and coupons shall furnish a certified list of bonds, notes and coupons duly paid and cancelled, showing for each issue of bonds and notes: the bond, note and coupon number, the amount, the date paid, and such additional information as the state funding board by resolution may require.
- (c) This section shall be in addition to any other law. Where this section is in conflict with other law, this section shall prevail.
History (2)
- Acts 1977, ch. 273, §§ 1, 2
- T.C.A., § 9-930.
§ 9-9-116. Technical advice — Expenses of carrying out chapter. - The state funding board is hereby authorized to procure such legal and technical advice, approving opinions and such financial assistance as it may consider necessary in connection with the carrying into effect of this chapter, and is also authorized to pay all necessary expenses, including costs of advertisement, printing bonds, certificates and coupons, publication of all releases, purchases of all necessary books and records, and all other incidental expenses as may be necessary. All such expenses, as well as the amount of any discount at which bonds issued under this chapter shall be sold, may be funded by bonds issued under this chapter and authorized heretofore or hereafter by the general assembly, to be issued by the funding board.
History (4)
- Acts 1937, ch. 165, § 14 (Williams, § 1811.25)
- 1977, ch. 3, § 7
- T.C.A. (orig. ed.), § 9-918
- Acts 1998, ch. 582, § 2.
§ 9-9-117. State immunity preserved. - Nothing in this chapter shall be construed as either waiving the immunity of the state of Tennessee from suit or as extending its consent to be sued, notwithstanding any other portion or portions of this chapter to the contrary.
History (2)
- Acts 1937, ch. 165, § 15 (Williams, § 1811.26)
- T.C.A. (orig. ed.), § 9-919.
§ 9-9-118. Authority to establish guidelines, rules and regulations. - The state funding board is authorized to establish guidelines, rules or regulations with respect to certain agreements and contracts facilitating the issuance and sale of debt by governmental entities established by private act, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, and agreements with the purchaser of the debt when such agreements and contracts have been authorized under the private act subject to guidelines of the state funding board.
History (2)
- Acts 2002, ch. 818, § 1
- T.C.A. § 9-9-120.
Part 2 Issuance and Sale of Bonds § 9-9-201. Obligations subject to funding. - All general obligation bonds already issued or which may hereafter be issued by the state of Tennessee shall be subject to financing, refinancing and retirement under this chapter.
History (3)
- Acts 1943, ch. 136, § 1
- C. Supp. 1950, § 1811.6 (Williams, § 1811.29a)
- T.C.A. (orig. ed.), § 9-912.
§ 9-9-202. Authorization to issue bonds — Purposes, contents, form, redemption of bonds — Interest rate agreements — Jurisdiction. - (a) For the purpose of effectuating this chapter, the funding board is hereby authorized to issue bonds of the state of Tennessee in amounts and for purposes heretofore or hereafter authorized by the general assembly. Each issue of bonds may be for one (1) or more purposes, irrespective whether the purposes have been provided for by the same legislative enactments, and, unless otherwise provided by law, shall be direct general obligations of the state of Tennessee for the payment of which as to both principal and interest the full faith and credit of the state is irrevocably pledged, and shall be further secured by the pledge of special revenues pursuant to this chapter.
- (b) The bonds shall be dated, shall bear interest at such rate or rates payable at such time or times and at such place or places, shall mature at such time or times, and shall be payable in such medium of payment, as may be determined by the board.
- (c) The bonds may be made redeemable before maturity at the option of the board at such price or prices and under such terms and conditions as may be fixed by the board prior to the issuance of the bonds.
- (d) The board shall determine the form of the bonds, including the form of interest coupons to be attached thereto, and the manner of execution or authentication of the bonds and coupons, and shall fix the denomination or denominations of the bonds and the place or places of payment of the principal and interest, which may be at any bank or trust company within or without the state.
- (e) The bonds may be issued in coupon or registered form, or both, as the board may determine, and provision may be made for the registration of coupon bonds as to principal only or also as to both principal and interest, and for the exchange and interchange of registered and coupon bonds.
- (f) In case any member or officer of the board whose signature or facsimile signature thereof shall appear on the bonds or coupons shall cease to be a member or officer of the board before the delivery thereof, such signature or facsimile signature nevertheless shall be valid and sufficient for all purposes, the same as if such person had remained a member or officer of the board until after such delivery.
- (g) With respect to all or any portion of any issue of bonds issued hereunder, the funding board may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and agreements as the funding board may determine, including, without limitation, provisions permitting the funding board to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement.
- (h) When entering into any contracts or agreements facilitating the issuance and sale of bonds, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, and agreements with the purchaser of the bonds authorized under this section evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the state funding board may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over the state funding board against which an action on such a contract or agreement is brought shall lie solely in a court in Tennessee which would otherwise have jurisdiction of actions brought in contract against the board.
History (5)
- Acts 1937, ch. 165, § 2 (Williams, § 1811.13)
- 1977, ch. 3, § 3
- T.C.A. (orig. ed.), § 9-913
- Acts 1999, ch. 425, § 1
- 2010, ch. 982, § 2.
§ 9-9-203. Authority to offer bonds for sale and determine interest rates — Delivery periods. - (a) The funding board is hereby authorized, empowered and directed to offer for sale any and all bonds heretofore or hereafter authorized to be issued by the funding board, and to determine by resolution the maximum rate or rates of interest which such bonds shall bear.
- (b) The funding board may enter into an agreement to sell its bonds under this chapter providing for delivery of its bonds not more than five (5) years or such greater period of time if recommended by the comptroller of the treasury or the comptroller's designee, from the date of execution of such agreement or, in the case of refunding bonds, the earlier of the first date on which the bonds being refunded can be optionally redeemed resulting in cost savings or be optionally redeemed at par.
History (3)
- Acts 1957, ch. 186, § 1
- T.C.A., § 9-921
- Acts 1999, ch. 425, § 2.
§ 9-9-204. Removal of statutory limitations on interest rates. - Whenever the interest rate or rates determined by resolution of the funding board exceed those contained in the act or acts authorizing the issuance of such bonds, the rate or rates determined by the funding board shall prevail, it being the legislative intent to remove all statutory limitations regarding maximum interest rates and all such limitations are hereby expressly removed; provided, that the maximum rate determined by the funding board in no instance shall exceed the rate as provided by § 47-14-103.
History (4)
- Acts 1957, ch. 186, § 2
- T.C.A., § 9-922
- Acts 1981, ch. 128, § 3
- 2010, ch. 982, § 4.
§ 9-9-205. Sale of bonds — Appropriation of funds in lieu of sale of bonds. - (a) Any and all bonds issued by the funding board shall be sold in such manner and at such times as may be approved by the funding board.
- (b) If there are unappropriated funds in the general fund, highway fund or state debt service fund of the state sufficient to defray the cost of the betterments, improvements, buildings, and projects for which bonds shall have been authorized, or any part thereof, then the funding board may request an allocation from such unappropriated funds in lieu of issuing bonds in such amount. There is hereby appropriated upon any such request of the funding board from the general fund, highway fund or state debt service fund a sum sufficient to pay the cost, or any part thereof, of such betterments, improvements, buildings, and projects, as the funding board shall have been authorized to finance through the issuance of bonds. For the purposes of this section, the use of highway funds shall be limited to highway projects.
- (c) Notwithstanding the foregoing, if there are notes of the state outstanding that were issued in anticipation of the issuance of bonds that mature without having been funded by the issuance of bonds, the funding board shall, without further authorization, apply funds appropriated to the state debt service fund for amortization of authorized and unissued bonds not required for the payment of principal of and interest on bonds which have been issued to the retirement of a like amount of principal or interest on such notes. There is hereby appropriated from such funds in the state debt service fund a sum sufficient to retire the principal of and interest on such notes, and, upon the retirement of such principal, the authorization for the issuance of such principal amount of the bonds for the purposes for which the notes were issued shall become void.
History (10)
- Acts 1957, ch. 186, § 3
- 1977, ch. 3, § 9
- T.C.A., § 9-923
- Acts 1982, ch. 833, §§ 1, 2
- 1998, ch. 582, § 3
- 2003, ch. 10, § 1
- 2009, ch. 4, § 1
- 2010, ch. 982, § 3
- 2012, ch. 572, § 1
- 2016, ch. 849, § 1.
§ 9-9-206. Application of law to other statutes. - (a) Parts 1 and 2 of this chapter shall be applicable to existing statutes authorizing the issuance of bonds, as well as acts of this and subsequent general assemblies.
- (b) Notwithstanding any other general law, parts 1 and 2 of this chapter shall prevail. However, bonds heretofore or hereafter authorized by the general assembly to be issued by the state funding board may be sold pursuant to the Baccalaureate Education Savings for Tennessee Act, compiled in title 49, chapter 7, part 9.
History (4)
- Acts 1957, ch. 186, §§ 4, 5
- 1977, ch. 3, § 10
- T.C.A., § 9-924
- Acts 1989, ch. 190, § 9.
§ 9-9-207. Issuance of refunding bonds. - (a) The funding board may issue general obligation refunding bonds to refund outstanding obligations previously issued under the authority of this chapter, upon the determination by the board that such bonds are necessary:
- (1) To accomplish cost savings to the public;
- (2) For the administrative convenience of the board;
- (3) To pay or discharge all or any part of an issue or series of bonds, including any interest thereon, in arrears or to become due and for the payment of which sufficient funds are not available; or
- (4) To eliminate bond covenants that have been determined to be burdensome to the state due to a change in circumstances if such elimination is not otherwise prohibited by law. Such determination shall be clearly stated in any resolution authorizing such refunding bonds and shall be conclusive.
- (b) The refunding bonds may be issued to pay or provide for the payment of principal, redemption premium, and accrued interest on the bonds to be refunded, and expenses related to the issuance of the refunding bonds, including discount and costs of issuance.
- (c) Refunding bonds may be sold as determined by the funding board, at public or private sale, in accordance with this chapter.
History (7)
- Acts 1937, ch. 165, § 13 (Williams, § 1811.24)
- modified
- impl. am. Acts 1959, ch. 9, § 8
- Acts 1977, ch. 3, § 4
- T.C.A. (orig. ed.), § 9-914
- Acts 1998, ch. 582, § 4
- 2013, ch. 176, § 9.
§ 9-9-208. Authorization to cancel bonds — Factors in determination. - The funding board is authorized, empowered and directed to cancel bonds authorized to be issued by the funding board upon its determination by resolution that one (1) of the following has occurred and the canceled amount of that bond authorization is no longer needed to fund the authorized project:
- (1) The project has been financed with commercial paper and the commercial paper has been retired in whole or in part without issuance of bonds;
- (2) The project was authorized to be financed with bonds but was financed in whole or in part with current funds;
- (3) The bonds were authorized but are no longer necessary for a governmental purpose; or
- (4) The amount of the remaining authorization is de minimis and as such will not be utilized.
History (2)
- Acts 2009, ch. 311, § 1
- 2014, ch. 824, § 1.
Part 3 Tax Revenue Anticipation Notes § 9-9-301. Issuance and sale — Interest — Guidelines. - (a) Pending the receipt of tax revenues during any fiscal year, the state of Tennessee, acting by resolutions of its funding board, is hereby authorized and empowered to issue and sell, either at public or private sale, at not less than par and accrued interest, its interest-bearing revenue anticipation note or notes. Such note or notes shall be authorized by resolution of the funding board, shall bear such date or dates, and shall mature at such time or times, including any renewals thereof, as such resolution or resolutions may provide, but shall mature within the fiscal year of their issuance. Such notes shall bear interest at such rate or rates, be in such denominations, be in such form, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places and be subject to such terms of redemption and contain such other terms and provisions, and the state may otherwise provide with respect to the authorization, sale and issuance of such notes, as such resolution or resolutions may provide.
- (b) Any resolution or resolutions of the state funding board authorizing the issuance of such tax revenue anticipation note or notes shall provide that the same are issued in anticipation of the tax revenue within the then current fiscal year and shall further provide that the full faith and credit of the state of Tennessee are pledged to the payment of such note or notes. The state funding board shall provide for the payment of the principal of and interest on all notes issued under this section as the same shall become due, out of revenues and funds available for such purposes.
- (c) The state funding board is hereby authorized to procure such legal and technical advice, approving opinions and such financial assistance as it may consider necessary in connection with the carrying into effect of this section, and is also authorized to pay all necessary expenses and incidental expenses. All such expenses may be funded by notes issued under this section.
History (3)
- Acts 2002, ch. 552, § 2
- Acts 2013, ch. 176, § 10
- T.C.A. § 9-10-101(a)-(c).
Part 4 Citizens Bonds § 9-9-401. Small-denominations bonds authorized — Terms and sale — Limitations. - (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.
History (2)
- Acts 1980, ch. 480, § 1
- 1981, ch. 46, § 1.
§ 9-9-402. Application of part. - This part shall be applicable to all general obligation bonds which have been authorized but which remain unissued on February 22, 1980, and all subsequent authorizations for general obligation bonds.
§ 9-9-404. Issuance and sale to conform to other laws. - Except as otherwise authorized by this part, citizens bonds shall be issued and sold in conformity with the terms and conditions specified in this chapter and the provisions of the law authorizing the particular bond issue for which such citizens bonds are authorized by the funding board.
§ 9-9-405. Redemption of citizens bonds. - Whenever the state treasurer is authorized pursuant to § 9-9-401 to sell citizens bonds, the state treasurer is also specifically authorized to redeem those citizens bonds, whenever under the terms of the bond sale they are lawfully presented to the state treasurer, from funds available to the state treasurer and be reimbursed for such redemptions from available funds in the state's debt service fund.
History (2)
- Acts 1980, ch. 480, § 5
- 2003, ch. 10, § 2.
§ 9-9-406. Rules and regulations. - The state treasurer is authorized to promulgate rules and regulations which are consistent with the plan approved by the state funding board pursuant to § 9-9-401 to effectuate the purposes of this part. All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
Chapter 11 Cash Basis Law of 1937 § 9-11-101. Short title. - This chapter may be cited as the “Cash Basis Law of 1937.”
History (3)
- Acts 1937, ch. 300, § 1
- C. Supp. 1950, § 3516.11
- T.C.A. (orig. ed.), § 9-1101.
§ 9-11-102. Chapter definitions. - As used in this chapter, unless the context otherwise requires:
- (1) “Bond order,” as applied to a city, means the ordinance authorizing the issuance of bonds of the city, and, as applied to a county, means the order of resolution authorizing the issuance of bonds of the county;
- (2) “Clerk” means the officer acting as clerk of the governing body;
- (3) “Funding bonds” means bonds issued to pay or to extend the time of payment of debt not evidenced by bonds;
- (4) “Governing body,” as applied to a county, means the county legislative body, and, as applied to a city, means the city council, board of commissioners, board of mayor and aldermen or the board or body in which the general legislative powers of the city are vested;
- (5) “Refunding bonds” means bonds issued to pay or to extend the time of payment of debts evidenced by bonds; and
- (6) “Unit” includes each county and city in the state, which shall issue bonds under this chapter.
History (6)
- Acts 1937, ch. 300, § 2
- C. Supp. 1950, § 3516.12
- impl. am. Acts 1959, ch. 9, § 8
- impl. am. Acts 1978, ch. 934, §§ 7, 36
- T.C.A. (orig. ed.), § 9-1102
- Acts 2010, ch. 868, § 30.
§ 9-11-103. Issuance of funding bonds. - In order that the fiscal affairs of the counties and cities in the state may be placed on a cash basis, each such unit is authorized and empowered to issue at one (1) time or from time to time bonds of the unit for the following purposes:
- (1) Funding any or all warrants, notes or other indebtedness of such unit not evidenced by bonds, and interest accrued thereon, which shall be outstanding at the close of the fiscal year immediately preceding the authorization of such funding bonds;
- (2) Refunding any or all bonds of the unit, and interest accrued thereon, whether such unit issued such bonds or assumed or became liable therefor, including bonds not matured if the unmatured bonds be then redeemable or if the holders thereof be willing to surrender the same for retirement, and including bonds belonging to the sinking fund of such unit; and
- (3) Paying any redemption premium upon bonds so refunded and also such expenses as the governing body may deem reasonable and proper for carrying out this chapter.
History (3)
- Acts 1937, ch. 300, § 3
- C. Supp. 1950, § 3516.13
- T.C.A. (orig. ed.), § 9-1103.
§ 9-11-104. Contents of bond order. - All bonds issued by a unit under this chapter shall be authorized by a bond order passed by the governing body of the unit. Notwithstanding any public or private statute relating to the unit, such bond order may be finally passed at the meeting at which the same shall be introduced. The bond order shall state:
- (1) A brief description of the indebtedness to be funded or refunded sufficient to identify such indebtedness, and the amount of redemption premium, if any, to be paid upon bonds refunded and the amount of expenses, if any, to be paid from the proceeds of bonds;
- (2) The maximum aggregate principal amount of bonds to be issued;
- (3) That a tax sufficient to pay the principal of and interest on the bonds shall be annually levied upon all taxable property in the unit; and
- (4) That the bond order shall take effect upon its passage and shall not be submitted to the voters of the unit.
History (3)
- Acts 1937, ch. 300, § 4
- C. Supp. 1950, § 3516.14
- T.C.A. (orig. ed.), § 9-1104.
§ 9-11-105. Publication of bond order. - A bond order shall be published once in each of two (2) consecutive weeks after its final passage. Such publication shall be made in a newspaper published in the unit. If there is no such newspaper, the bond order shall be posted at the door of the building in which the governing body usually holds its meetings and at three (3) other public places in the unit. A notice in substantially the following form (the blanks being first properly completed), with the printed or written signature of the clerk appended thereto, shall be published with the bond order:
- “The foregoing order (ordinance) was passed on the day of , 20 , and was first published (posted) on the day of , 20 .
- “Any action or proceeding questioning the validity of the order (ordinance) or the indebtedness to be funded (or refunded) or the tax to be levied for the payment of the principal and interest of such bonds, must be commenced within thirty (30) days after its first publication (or posting).
- Clerk.”
History (3)
- Acts 1937, ch. 300, § 6
- C. Supp. 1950, § 3516.16
- T.C.A. (orig. ed.), § 9-1105.
§ 9-11-106. Limitation of actions to invalidate bonds. - Any action or proceedings in any court to set aside a bond order, or to obtain any other relief upon the ground that the order is invalid, or that the indebtedness to be funded or refunded is invalid, or that there is no authority for the levy of a tax to pay the principal of and interest on the bonds, must be commenced within thirty (30) days after the first publication of the notice aforementioned and the bond order referred to in the notice. After the expiration of such period of limitation, no right of action or defense founded upon the invalidity of the bond order or the indebtedness to be funded or refunded or the tax to be levied shall be asserted, nor shall the validity of the bond order or of the funding or refunding bonds to be issued or the tax to be levied for the payment of the principal of and interest thereon, be open to question in any court upon any ground whatever, except in an action or proceedings commenced within such period.
History (3)
- Acts 1937, ch. 300, § 7
- C. Supp. 1950, § 3516.17
- T.C.A. (orig. ed.), § 9-1106.
§ 9-11-107. Resolution for issuance of bonds. - (a) At any time after the passage of the bond order, the governing body of a unit shall have full authority by resolution to provide for the issuance of the bonds authorized by such bond order. Such resolution providing for the issuance of the bonds may be introduced and finally passed at any regular or duly called special meeting of the governing body and shall be in force and effect from and after its passage.
- (b) The governing body shall by resolution determine the rate or rates of interest to be paid on the bonds, and the time or times of payment of such interest, and the maturity or maturities of the bonds, which shall be at a time or times not exceeding twenty (20) years from the date of the bonds in the case of funding bonds, and not exceeding thirty (30) years from the date of bonds in the case of refunding bonds; provided, that with the approval of the comptroller of the treasury or the comptroller's designee, funding bonds may be made to mature at any time or times not exceeding thirty (30) years from the date of the bonds and refunding bonds may be made to mature at any time or times not exceeding forty (40) years from the date of the bonds.
- (c) The governing body shall also by resolution determine the form of the bonds, the officers by whom they shall be executed and the place or places in Tennessee or in any other state at which the principal and interest shall be payable.
- (d) In case any of the officers whose signatures appear on the bonds or coupons shall cease to be such officers before the delivery of such bonds, such signatures shall nevertheless be valid and sufficient for all purposes, the same as if they had remained in office until such delivery.
- (e) The bonds may be made registrable as to principal alone and as to both principal and interest, under such terms and conditions as may be determined by the governing body, and provisions may be made for the exchange of fully registered bonds for coupon bonds and of coupon bonds for fully registered bonds.
History (5)
- Acts 1937, ch. 300, § 8
- C. Supp. 1950, § 3516.18
- Acts 1969, ch. 283, § 3
- T.C.A. (orig. ed.), § 9-1107
- Acts 2010, ch. 868, § 31.
§ 9-11-108. Annual statement by fiscal officer. - Before any funding or refunding bonds shall be issued under this chapter, a fiscal officer of the unit shall prepare a statement as of the beginning of the then current fiscal year, which statement shall show in detail the total outstanding bonds, notes, warrants and other evidences of indebtedness of the unit, together with the maturity dates thereof, interest rates, special provisions for payment, together with a description of the indebtedness proposed to be funded or refunded by the issuance of bonds. Such statement shall also show in detail the total tax collections of the unit for the preceding year, the amount of delinquent taxes, and the amount of expenditures of all funds during the preceding fiscal year, the proposed maturity or maturities of the new funding or refunding bonds to be issued, and any and all other pertinent information which may be requested by the comptroller of the treasury or the comptroller's designee. Such statement shall be filed with the comptroller of the treasury or the comptroller's designee, together with an application from the governing body of the unit requesting that the issuance of the proposed bonds be approved. If the comptroller of the treasury or the comptroller's designee shall determine that, in the comptroller of the treasury's or the comptroller's designee's opinion, the unit can fulfill this chapter as hereinafter set forth, the comptroller of the treasury or the comptroller's designee shall so certify in writing to the unit, and such certificate shall be recorded in the minutes of the unit.
History (4)
- Acts 1937, ch. 300, § 14
- C. Supp. 1950, § 3516.23 (Williams, § 3516.24)
- T.C.A. (orig. ed.), § 9-1108
- Acts 2010, ch. 868, § 32.
§ 9-11-109. Sale price — Exchange — Premiums and discount. - The governing body may sell any or all of the bonds authorized under this chapter in such manner and for such price as it may determine to be for the best interest of the unit. Any or all of the bonds authorized under this chapter may be exchanged for the bonds to be refunded thereby or the evidences of indebtedness to be funded thereby, including bonds not matured or redeemable if the holder thereof be willing to surrender the same for retirement. Additional bonds may be authorized and sold under § 9-11-103(3), in an amount sufficient to pay:
- (1) Any redemption premium on bonds refunded; and
- (2) If such funding or refunding bonds shall be sold or delivered in exchange at a discount, the amount of such discount.
History (4)
- Acts 1937, ch. 300, § 9
- C. Supp. 1950, § 3516.19
- Acts 1969, ch. 283, § 4
- T.C.A. (orig. ed.), § 9-1109.
§ 9-11-110. Exercise of powers. - Except as hereinafter provided, the authority conferred by this chapter may be exercised at any time and from time to time, and the authorization of funding or refunding bonds by one (1) bond order shall not prevent the authorization of additional funding or refunding bonds by subsequent bond order or orders. One (1) resolution providing for the issuance of funding or refunding bonds may provide for the issuance of two (2) or more separate series of such bonds, and each series or class may have different terms and provisions from the others, and the bonds of each series or class may bear interest at different rates.
History (3)
- Acts 1937, ch. 300, § 12
- C. Supp. 1950, § 3516.21 (Williams, § 3516.22)
- T.C.A. (orig. ed.), § 9-1110.
§ 9-11-111. Exemption from taxation. - Any bonds issued pursuant to this chapter and the income therefrom are exempt from all state, county and municipal taxation except for inheritance, transfer and estate taxes and except as otherwise provided in this code.
History (4)
- Acts 1937, ch. 300, § 13
- C. Supp. 1950, § 3516.22 (Williams, § 3516.23)
- T.C.A. (orig. ed.), § 9-1111
- Acts 1988, ch. 750, § 41.
§ 9-11-112. Tax levy and sinking fund provisions. - All bonds issued under this chapter shall be direct and general obligations of the unit issuing the same, for the payment of which the full faith and credit of the unit shall be irrevocably pledged. In each fiscal year while any funding or refunding bonds issued under this chapter shall be outstanding, there shall be levied upon all taxable property in the unit an ad valorem tax sufficient to pay the interest thereon as it falls due and the principal of such bonds which shall then have matured or which shall mature within the same fiscal year, and any sinking fund payments which may be provided for by the bonds or by the resolution authorizing the same, as well as all deficits in such interest, principal and sinking fund payments arising from failure to comply with this chapter or by failure to collect the taxes levied or otherwise; provided, that the governing body, in its discretion, may levy in any fiscal year a tax sufficient to pay, in addition to the interest and principal which shall fall due in such fiscal year, any portion of the interest or principal which shall fall due in any succeeding fiscal year, and may also levy in any fiscal year a tax for sinking fund payments in addition to the tax required for such payments by the resolution authorizing any of such bonds. The governing body may provide in the resolution authorizing the issuance of any such funding or refunding bonds that any sinking fund provided for such bonds shall be used solely for the purpose of redemption of the bonds authorized by such resolution, and all bonds so purchased or redeemed shall be cancelled and shall not be reissued.
History (3)
- Acts 1937, ch. 300, § 10
- C. Supp. 1950, § 3516.20
- T.C.A. (orig. ed.), § 9-1112.
§ 9-11-113. Annual cash basis budget. - In order that the fiscal affairs of a unit may be maintained on a cash basis after issuance of any funding or refunding bonds under this chapter, and in order that the current receipts of such unit shall be sufficient to meet current expenditures, an annual budget shall be prepared by an official of the unit designated by the governing body for that purpose, which budget shall include the following:
- (1) The full amount required for interest on the indebtedness of the unit and for sinking funds and for principal of serial bonds maturing during the fiscal year;
- (2) A detailed statement of the amounts required during the fiscal year for the expense of conducting or operating each department, division, office or board and the subdivisions of each;
- (3) The amount of any cash deficit, being the sum of all outstanding and unpaid bills or other lawful obligations and all amounts payable to all special funds of the unit at the close of the preceding fiscal year incurred for debt or other lawful charges in connection with the operation of the unit, to the extent that such sum exceeds the cash on hand or on deposit to the credit of the general funds of the unit, exclusive, however, of any cash derived from prepaid taxes or other sources applicable to the budget of the succeeding fiscal year; and
- (4) An itemized estimate of the cash receipts to be available during the current fiscal year, but such itemized estimate shall be subject to the following provisions:
- (A) Such estimate of collections of delinquent taxes shall not exceed an amount which represents the same percentage of the amount of taxes delinquent on the first day of the current fiscal year as the percentage of delinquent taxes outstanding on the first day of the preceding fiscal year which were actually collected in cash during such preceding fiscal year;
- (B) Such estimate of collections of special assessments shall not exceed an amount which represents the same percentage of the amount of special assessments unpaid and owing to the unit on the first day of the current fiscal year as the percentage of special assessments unpaid and owing to the unit on the first day of the preceding fiscal year which were actually collected in cash during such preceding fiscal year;
- (C) Such estimate of collections of miscellaneous revenues from sources other than taxes or special assessments shall in no instance nor as to any item be in an amount in excess of the amount of such miscellaneous revenues collected in cash in the preceding year; provided, that there may be included in the estimated cash receipts such amount of additional miscellaneous revenues to be derived from sources other than ad valorem taxes or special assessments as may be approved by the comptroller of the treasury or the comptroller's designee; and
- (D) The amount of the cash surplus, being an amount not larger than the amount of cash on hand or on deposit to the credit of the general funds of the unit at the close of the preceding fiscal year exclusive, however, of any cash derived from prepaid taxes or other sources applicable to the budget of the succeeding fiscal year, to the extent that such cash is in excess of all outstanding and unpaid bills or other obligations lawfully incurred during such fiscal year and all amounts payable therefrom to all special funds of the unit.
History (4)
- Acts 1937, ch. 300, § 15
- C. Supp. 1950, § 3516.24 (Williams, § 3516.25)
- T.C.A. (orig. ed.), § 9-1113
- Acts 2010, ch. 868, § 33.
§ 9-11-114. Appropriation ordinance. - After receiving the annual budget estimate, the governing body of the unit shall prepare an appropriation ordinance or resolution, using the budget estimate as a basis, but appropriating such sums as the governing body may deem proper for the expenses listed under § 9-11-113(2), whether greater or less than the budget estimate set forth under such subdivision (2), but no appropriation recommended by the budget estimate under § 9-11-113(1) and (3) shall be reduced by the governing body, and the taxes levied for such appropriations may be over and above all other taxes authorized or limited by law.
History (3)
- Acts 1937, ch. 300, § 15
- C. Supp. 1950, § 3516.24 (Williams, § 3516.25)
- T.C.A. (orig. ed.), § 9-1114.
§ 9-11-115. Tax levy for cash basis. - Immediately after the passage of the appropriation ordinance or resolution, the governing body shall pass an ordinance or resolution levying upon all property subject to taxation within the unit and basing such levy upon the current tax collection experience of the preceding fiscal year, such rate of tax as may be required to produce the sum necessary to balance the budget upon a cash basis. The sum necessary to balance the budget shall be ascertained by deducting from the total cash appropriations made under § 9-11-113(1), (2) and (3), such cash receipts applicable to such cash appropriations as may be estimated under the limitations of § 9-11-113(4)(A)-(D). In order that the current tax levy so made shall be truly based upon the current tax collection experience of the preceding year, such current tax levy shall be determined by dividing the sum necessary to be raised in order to balance the budget by a percentage which does not exceed the percentage obtained by dividing the amount of current taxes collected in cash in the preceding fiscal year by the amount of the taxes levied and payable in such preceding fiscal year.
History (3)
- Acts 1937, ch. 300, § 16
- C. Supp. 1950, § 3516.25 (Williams, § 3516.26)
- T.C.A. (orig. ed.), § 9-1115.
§ 9-11-116. Enforcement power of the comptroller of the treasury or comptroller's designee. - The comptroller of the treasury or the comptroller's designee shall require such periodic information from a unit operating under this chapter and make such audits as the comptroller of the treasury or the comptroller's designee deems necessary, to the end that it may be ascertained that the budget of the unit is kept balanced during the life of bonds issued under this chapter. The annual budget of each unit operating under this chapter shall be submitted to the comptroller of the treasury or the comptroller's designee at least three (3) weeks prior to its adoption. The comptroller of the treasury or the comptroller's designee must thereupon determine whether or not the budget will be in balance in accordance with this chapter. If the budget does not comply with this chapter, the comptroller of the treasury or the comptroller's designee shall have the power and authority to direct the governing body of the unit to adjust its estimates or to make additional tax levies sufficient to comply with this chapter. No budget shall be adopted by the governing body of a unit which shall have issued bonds under this chapter until it shall have been approved by the comptroller of the treasury or the comptroller's designee. The comptroller of the treasury or the comptroller's designee shall approve the budget only when the comptroller of the treasury or the comptroller's designee is satisfied that it complies with this chapter.
History (4)
- Acts 1937, ch. 300, § 17
- C. Supp. 1950, § 3516.26 (Williams, § 3516.27)
- T.C.A. (orig. ed.), § 9-1116
- Acts 2010, ch. 868, § 34.
§ 9-11-117. Tax anticipation notes. - The governing body of any unit which shall have issued bonds under this chapter may issue tax anticipation notes under chapter 21 of this title.
History (5)
- Acts 1937, ch. 300, § 18
- C. Supp. 1950, § 3516.27 (Williams, § 3516.28)
- T.C.A. (orig. ed.), § 9-1117
- Acts 1982, ch. 580, § 2
- 1988, ch. 750, § 42.
§ 9-11-118. Remedies of bondholders. - (a) Any holder of bonds issued under this chapter, or any person or officer being a party in interest, may either at law or in equity by suit, action or mandamus, enforce and compel the performance of the duties required by this chapter of the governing body or any board or officer of the unit.
- (b) Inasmuch as the purpose of this chapter is to place and maintain the fiscal affairs of the counties and cities in the state on a cash basis, this chapter shall constitute an irrepealable contract with the holders of bonds issued under this chapter.
History (3)
- Acts 1937, ch. 300, § 19
- C. Supp. 1950, § 3516.28 (Williams, § 3516.29)
- T.C.A. (orig. ed.), § 9-1118.
§ 9-11-119. Nature and construction of chapter. - No restriction, limitation, or provision contained in any other law, either public or private, relating to the issuance of bonds, notes, or other obligations of a unit, or limiting the amount of taxes which may be levied in a unit, shall apply to bonds or notes issued under this chapter. The powers granted by this chapter are in addition to all other powers heretofore granted to a unit, and nothing herein contained shall be construed as prohibiting a unit from issuing bonds or notes under any public or private statute applicable to such unit. Nothing in this chapter shall be construed as mandatory for any unit to issue funding or refunding bonds under the terms and conditions of this chapter.
History (4)
- Acts 1937, ch. 300, § 5
- C. Supp. 1950, § 3516.15
- T.C.A. (orig. ed.), § 9-1119
- Acts 1982, ch. 580, § 3.
Chapter 13 Loans to Local Subdivisions in Emergencies Part 1 General Provisions § 9-13-101. Authority to lend appropriated funds. - The state board of equalization, with the approval of the funding board, is hereby authorized to lend state funds appropriated and made available for that purpose to municipalities and counties of the state upon terms and conditions hereinafter prescribed.
History (2)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 1
- T.C.A., § 9-1301.
§ 9-13-102. Reduction of assessment of utility property as prerequisite for loan. - Such loans shall be made only to such municipalities or counties as can be shown to have incurred unanticipated losses of revenue necessitated or prompted by decrees or orders of competent courts reducing the assessments of railroad or public utility properties which are centrally assessed by the comptroller of the treasury and the state board of equalization.
History (3)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 2
- T.C.A., § 9-1302
- Acts 1995, ch. 305, § 95.
§ 9-13-103. Application for loan. - Applications for such loans shall be made only in writing and through the chief executive officer of the county or municipality so applying upon the duly enacted resolution of the governing body of such county or municipality. The application shall be addressed to the state board of equalization and shall set forth such information as the board may by regulation require relative to the budget, revenues, obligations and governmental operations of such municipality or county.
History (2)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 3
- T.C.A., § 9-1303.
§ 9-13-104. Determination of necessity for loan. - The state board of equalization shall consider the loan application and conduct such investigation of the fiscal condition of the applicant county or municipality as it may deem proper to determine the necessity for such financial assistance. To this end, the board is empowered to avail itself of the services of the comptroller of the treasury and the comptroller of the treasury's office. The board shall have the right to obtain any information pertinent to the subject matter from any department of the state government and any office or department or agency of the government of the applicant city or county. It shall specifically have the power to subpoena and require the testimony under oath of any officer or employee of the applicant, and to compel the production of any paper or record in the possession or custody of any such officer or employee.
History (3)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 4
- T.C.A., § 9-1304
- Acts 1995, ch. 305, § 96.
§ 9-13-105. Certification to funding board. - If following its investigation and consideration of the application the board of equalization shall deem the applicant municipality or county to require such financial assistance, it shall certify such finding in writing to the funding board for its approval.
History (2)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 5
- T.C.A., § 9-1305.
§ 9-13-106. Consideration by funding board — Manner of making loan — Repayment — Interest. - (a) The funding board shall independently consider any application for loan assistance as herein provided, and, on the concurrence of two-thirds (⅔) of its membership, authorize the board of equalization to lend to a municipality or county an amount not to exceed eighty percent (80%) of the local revenues shown to be lost as a result of such circumstances. Such loans shall be made only upon notes executed by the chief executive officer of the municipality or county showing on their face the concurrence of three-fourths (¾) of the governing body of the municipality or county and evidencing an attested copy of the official minutes showing such concurrence.
- (b) The loans shall be repayable with interest at the rate of two percent (2%) in equal installments commencing two (2) years following the date of the note and extending not more than five (5) years from the day of the first payment.
History (2)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 6
- T.C.A., § 9-1306.
§ 9-13-107. Default — Withholding state funds. - In the event of default in the payment of any installment upon any loan made pursuant to this part, the board of equalization shall give notice of such default to the commissioner of finance and administration and the state treasurer. The commissioner shall thereupon withhold any distribution to the municipality or county of any funds otherwise distributable to it under the terms of any statute of this state until any and all arrearages have been paid by the municipality or county.
History (2)
- Acts 1966 (2nd Ex. Sess.), ch. 3, § 7
- T.C.A., § 9-1307.
Part 2 Emergency Financial Aid to Local Governments § 9-13-201. Short title. - This part shall be known and may be cited as the “Emergency Financial Aid to Local Government Law of 1995.”
History (2)
- Acts 1984, ch. 996, § 3
- 1995, ch. 63, § 1.
§ 9-13-202. Legislative intent. - The general assembly finds and declares that it is in the best interests of the citizens of this state that local governments be fiscally responsible and utilize sound financial management principles in serving their citizens. The general assembly notes that there are certain conditions and circumstances in which local governments must have emergency technical and financial assistance if they are to better serve their citizenry or, in the case of economic distress due to natural disaster, must have the financial flexibility to stabilize their financial condition. It is the intent of this part to provide procedures whereby local governments may acquire such emergency technical and financial assistance provided and guaranteed by the state or, in the case of natural disaster, may obtain adequate financing, thus enabling such local governments to stabilize their financial condition and to meet their current operational and debt service costs.
History (3)
- Acts 1984, ch. 996, § 1
- 1995, ch. 63, § 1
- 2010, ch. 1117, § 1.
§ 9-13-203. Part definitions. - As used in this part, unless the context otherwise requires:
- (1) “Emergency technical assistance” means direction, oversight, management, and approval of all financial dealings and transactions of a local government by the comptroller of the treasury or the comptroller's designee;
- (2) “Loan guarantee” means the guarantee by the state, acting through the state funding board under this part, of a loan to a local government from a lender other than the state; and
- (3) “Local government” means any incorporated city or town, metropolitan government, or county, including enterprise funds of such government entity, or utility district for purposes of §§ 9-13-206 and 9-13-212.
History (4)
- Acts 1984, ch. 996, § 4
- 1995, ch. 63, § 1
- 2010, ch. 868, § 35
- 2010, ch. 1117, § 2.
§ 9-13-204. Loan guarantees — Cutoff date for guarantee. - In order to provide emergency technical and financial assistance to a local government, the state funding board is authorized to guarantee the payment of a loan made to a local government by another lender only under the following conditions:
- (1) A majority of all members constituting the local government legislative body, by resolution, has requested a loan guarantee from the state funding board;
- (2) The local government legislative body agrees in its resolution requesting a loan guarantee to accept the emergency technical assistance provided by the comptroller of the treasury or the comptroller's designee and to be bound by the decisions of the comptroller of the treasury or the comptroller's designee;
- (3) The state funding board has determined that current local government revenues are insufficient to pay the annual debt service and costs of operation of such local government or local government service; and
- (4) The local government legislative body shall submit a plan, subject to approval by the state funding board, for the efficient operations of government services including, where applicable, a plan for the consolidation of services within that local government. Such plan shall include local government tax revenues at least equal to one hundred percent (100%) of that local government's fiscal capacity as determined by the advisory commission on intergovernmental relations. If a local government has not levied taxes at this level, a plan to increase taxes to such level at the earliest practical date must be submitted to and approved by the state funding board. The board's guarantee of the payment of any loan under this part shall be conditioned upon the implementation of the plan required under this section.
History (4)
- Acts 1984, ch. 996, § 5
- 1992, ch. 526, §§ 1-6
- 1995, ch. 63, § 1
- 2010, ch. 868, § 36.
§ 9-13-205. Security for loans — Pledges — Disposition of proceeds — Withholding of state-shared taxes. - The state funding board shall establish the terms and conditions of loan guarantees to local governments and may require such guarantees or security as it deems necessary to adequately secure the loans. The local government shall pledge the full faith and credit of the local government as security for any loan or loan guarantee. The local government shall also agree to pledge a sufficient amount of state-shared taxes to make principal and interest payments on the loan guaranteed by the state. The commissioner of finance and administration is authorized to withhold such sum or part of such sum from any state-shared taxes which are otherwise apportioned to the local government.
History (3)
- Acts 1984, ch. 996, § 6
- 1992, ch. 526, § 7
- 1995, ch. 63, § 1.
§ 9-13-206. Issuance of notes. - Notwithstanding any other law to the contrary, the legislative body of any local government is hereby authorized to issue notes which may mature beyond the close of the fiscal year in which such notes are issued, when such notes either:
- (1) Are approved by the comptroller of the treasury or the comptroller's designee and guaranteed by the state funding board; or
- (2) Approved by the comptroller of the treasury or the comptroller's designee in the case of economic distress due to natural disaster certified by the federal emergency management agency (FEMA).
History (4)
- Acts 1984, ch. 996, § 7
- 1995, ch. 63, § 1
- 2010, ch. 868, § 37
- 2010, ch. 1117, § 3.
§ 9-13-207. Scope of assistance — Guidelines — Personnel — Audits — County budgets. - (a) Whenever a loan is guaranteed by the state funding board, the comptroller of the treasury or the comptroller's designee shall, subject to the comptroller of the treasury's or the comptroller's designee's discretion, provide emergency technical assistance to such local government until such time as the local government has completely repaid any loans guaranteed by or owed to the state.
- (b) The comptroller of the treasury or the comptroller's designee shall provide emergency technical assistance under the guidelines of the statutes or private acts applicable to the local government and shall perform the duties prescribed by such statutes or private acts; provided, that if the applicable local government purchasing law authorizes emergency purchases, such emergency purchases shall only be made with the prior approval of the comptroller of the treasury or the comptroller's designee.
- (c) All authority for the implementation and administration of the laws set out in subsection (b) shall be vested in the comptroller of the treasury or the comptroller's designee.
- (d)
- (1) Notwithstanding any other law, the comptroller of the treasury or the comptroller's designee has total and complete authority over the budget, purchases and expenditures of such local government, including the budget, purchases and expenditures of the local government school system and enterprise funds.
- (2) The commissioner of education shall appoint a qualified and responsible person to advise and assist the comptroller of the treasury or the comptroller's designee on budgeting, accounting, purchasing, and expenditures of the school system of the local government.
- (e) The comptroller of the treasury or the comptroller's designee shall require such periodic information from a local government operating under this part and require such audits as the comptroller of the treasury or the comptroller's designee may deem necessary. The annual budget of each local government shall be submitted to the comptroller of the treasury or the comptroller's designee at least three (3) weeks prior to its adoption. The comptroller of the treasury or the comptroller's designee shall determine whether or not the budget will be in balance and is fiscally responsible. No budget shall be adopted by the legislative body until it shall have been approved by the comptroller of the treasury or the comptroller's designee. Such governing body shall adopt a budget at the first meeting of the legislative body in July of each year or prior to such meeting as required by any public or private act, or as soon thereafter as practical, but in no event shall the budget be adopted later than the third Monday in September.
History (4)
- Acts 1984, ch. 996, § 8
- 1992, ch. 526, § 8
- 1995, ch. 63, § 1
- 2010, ch. 868, § 38.
§ 9-13-208. Notice of director's approval for purchases or payments. - The state funding board shall publish a notice, in a newspaper of general circulation in any local government which is receiving emergency technical assistance pursuant to this part, that no purchase of or payment for goods, services or equipment or other matters shall be made by such local government without the prior approval of the comptroller of the treasury or the comptroller's designee. Such notice shall be published at least once weekly for two (2) consecutive weeks. Such notice shall also be posted for two (2) consecutive weeks in five (5) conspicuous places in the local government, one (1) of which shall be the courthouse.
History (3)
- Acts 1984, ch. 996, § 9
- 1995, ch. 63, § 1
- 2010, ch. 868, § 39.
§ 9-13-209. Payment of costs — Administrative personnel. - (a) When a local government is granted a loan guarantee, any costs as determined and approved by the state funding board which are associated with providing the loan guarantee or technical assistance, including, but not limited to, the services of the comptroller of the treasury or the comptroller's designee and other personnel, shall be borne by such local government; provided, that such costs shall not exceed five percent (5%) of the amount of the loan guarantee.
- (b) The comptroller of the treasury shall provide any staff necessary to administer this part; provided, that, whenever possible and feasible, the comptroller of the treasury or the comptroller's designee will utilize employees of such local government, county technical assistance service, or municipal technical advisory service to assist in the administrative tasks.
History (3)
- Acts 1984, ch. 996, § 10
- 1995, ch. 63, § 1
- 2010, ch. 868, § 40.
§ 9-13-210. Reports to legislative committees. - The comptroller of the treasury shall report to the state funding board at the next meeting of the state funding board following any approval of note issuance pursuant to § 9-13-206. The state funding board shall report to the finance, ways and means committees of the senate and the house of representatives whenever a loan guarantee is requested, and shall keep the committees advised whenever any subsequent action is taken.
History (3)
- Acts 1984, ch. 996, § 11
- 1995, ch. 63, § 1
- 2010, ch. 1117, § 4.
§ 9-13-211. Penalty for nonperformance. - Any official or employee of the local government, or of any institution or agency thereof, who fails or refuses to perform the duties required of such official or employee by this part, or who fails or refuses otherwise to conform to this part, commits a Class C misdemeanor and is subject to fine and to removal from office or position in accordance with title 8, chapter 47.
History (3)
- Acts 1984, ch. 996, § 12
- 1989, ch. 591, § 113
- 1995, ch. 63, § 1.
§ 9-13-212. Issuance of notes — Guidelines — Use for operational expenses. - Notes issued pursuant to this part shall be issued in the manner provided by chapter 21, parts 1, 4, 6, and 8 of this title. Notwithstanding any other law to the contrary, any notes issued pursuant to this part may be used for operational expenses and extend past the current fiscal year.
History (3)
- Acts 1992, ch. 526, § 9
- 1995, ch. 63, § 1
- 2010, ch. 1117, § 5.
Part 3 Financially Distressed Municipalities, Counties, Utility Districts and Education Agencies § 9-13-301. Short title. - This part shall be known and may be cited as the “Financially Distressed Municipalities, Counties, Utility Districts and Education Agencies Act of 1993.”
§ 9-13-302. Duties of the comptroller of the treasury. - The comptroller of the treasury shall develop and recommend statutory changes, policies, and procedures for the purpose of:
- (1) Promptly identifying financially distressed municipalities, counties, utility districts and education agencies;
- (2) Providing for the timely restructuring of the debt of such municipalities, counties, utility districts and education agencies;
- (3) Considering the need for temporary loans or other fiscal adjustments to prevent fiscal crisis; and
- (4) Providing for consolidation or merger of contiguous municipalities, counties, utility districts or education agencies, or for the merger of functions of such entities in order to relieve financial distress.
Chapter 14 Local Economic Adjustment Act of 1975 § 9-14-101. Short title. - This chapter shall be known and may be cited as the “Local Economic Adjustment Act of 1975.”
History (2)
- Acts 1975, ch. 312, § 1
- T.C.A., § 9-1501.
§ 9-14-102. Purpose. - In order to promote the health, safety, right to gainful employment, economic opportunity and general welfare of the inhabitants of this state, the local governments (cities, towns and counties) are authorized to participate cooperatively with the state and federal governments in activities designed to alleviate or moderate existing or potential conditions of severe economic adjustment, resulting from termination or closure of major industries or firms, unemployment caused therefrom, and other hardships that would result in loss of the labor force, breakup of the family unit, and other conditions resulting from explosions, floods, earthquakes, or other major disasters, natural or man-made.
History (2)
- Acts 1975, ch. 312, § 2
- T.C.A., § 9-1502.
§ 9-14-103. Chapter definitions — Economic adjustment project. - For the purposes of this chapter, unless the context otherwise requires:
- (1) “Cities,” “towns” and “counties” mean those general government units that are political subdivisions of the state of Tennessee;
- (2) “Economic adjustment project” means those activities for which funds are available from local, state or federal sources and which include one (1) or more of the following objectives:
- (A) Plan, finance, construct, operate and maintain all types of public facilities, including publicly owned industrial parks;
- (B) Make commercial loans for business and industrial development;
- (C) Do economic development planning, including research and technical assistance studies related to accelerating the development process;
- (D) Provide public service jobs;
- (E) Provide rent supplements to families and individuals, including loans and grants;
- (F) Provide mortgage payment assistance to families and individuals, including loans and grants;
- (G) Provide for costs of relocation of families and individuals, including loans and grants;
- (H) Provide vocational and technical training in cooperation with the state's system of vocational and technical schools; and
- (I) Provide other appropriate assistance related to economic adjustment and the purposes of this chapter;
- (3) “Federal government” means the government of the United States and any agency, department, board or commission thereof performing or administering programs enacted by statute; and
- (4) “State” means the state of Tennessee, including all state agencies, departments, boards, commissions, and other bodies which carry out state functions and programs. “State” also includes development districts as created by title 13, chapter 14.
History (2)
- Acts 1975, ch. 312, § 3
- T.C.A., § 9-1503.
§ 9-14-104. Loans and grants authorized. - (a) Cities and counties are authorized to accept grants from the federal government to carry out economic adjustment projects. Cities and counties are also authorized to enter into contractual agreements with the federal government and with state government to accept grants and disburse or redistribute funds for purposes of economic adjustment projects, such disbursements to be in the form of grants and loans. No grant, however, shall be made to a private profit-making entity. Grants or loans can be made to a private or public nonprofit organization or association.
- (b) Loans for commercial and industrial development purposes shall be legally binding obligations and shall require interest payments and shall be consummated in accordance with applicable state and federal statutes and regulations. Commercial loans can be made only for legal purposes and subject to safeguards to protect the public interest, and can be made in conjunction with another commercial lender, a federal agency, and a state industrial development authority. Commercial loans made under this chapter can be first, second or third mortgage loans. The claim and right for principal repayment on second and third mortgage loans shall be secondary and subordinate to the first mortgage loan, except that repayment of principal and interest shall be made and prorated concurrently as agreed among the several lenders. In cases of foreclosure and acquisition of assets for liquidation or resale, the claim and right of the city or county shall be in a first, second or third mortgage position, as appropriate and as agreed to.
- (c) Loans made for public facilities, the repayment of which extends more than five (5) years, shall be in the form of municipal bonds, subject to the bond provisions and procedures spelled out by state enabling statutes for cities, counties and other political subdivisions. Loans made for less than five (5) years may be at a reduced interest cost, but not less than two percent (2%), simple interest.
History (2)
- Acts 1975, ch. 312, § 4
- T.C.A., § 9-1504.
§ 9-14-105. City and county economic adjustment departments. - Cities and counties, singly or jointly by contract with each other or with state government, in initiating an economic adjustment project or program, shall create a department within the local government to carry out such projects or programs over a multi-year period. Such department shall be staffed by competent professionals, and headed by a director responsible to the local government as determined by ordinance, resolution or contract agreement.
History (2)
- Acts 1975, ch. 312, § 5
- T.C.A., § 9-1505.
§ 9-14-106. Funds. - Cities and counties are specifically authorized to appropriate funds from local sources, from general funds available, and from any other source authorized by state law, to operate the department and otherwise manage an economic adjustment project as described in this chapter, including the provision of funds needed to match available state and federal funds for such purposes. Commercial loans made to individuals, private firms and corporations shall in no way extend the credit of cities and counties in behalf thereof; however, such loans can be made in behalf of the federal government and with use of federal funds granted for such purposes.
History (2)
- Acts 1975, ch. 312, § 6
- T.C.A., § 9-1506.
§ 9-14-107. Record of activities and finances. - Appropriate financial and other records shall be kept on all transactions, which will show at all times activities planned, in progress and completed, the cost of each activity, the operational costs, and other such information as may be required to protect the public interest. An annual financial audit of the department shall be made by the comptroller of the treasury as provided by § 9-3-211. All records shall be open for public inspection during regular working hours. All audits performed by the internal audit staff of the department shall be conducted in accordance with the standards established by the comptroller of the treasury pursuant to § 4-3-304(9).
History (3)
- Acts 1975, ch. 312, § 7
- T.C.A., § 9-1507
- Acts 1984, ch. 794, § 6.
§ 9-14-108. Construction of chapter. - This chapter, being necessary for the welfare of the state and its inhabitants, shall be liberally construed so as to effectuate its purposes.
History (2)
- Acts 1975, ch. 312, § 8
- T.C.A., § 9-1508.
Chapter 16 Special County Census for Allocation of Funds § 9-16-101. Special census by counties. - For purposes of determining its eligibility in whole or part for an allocation of tax proceeds or other funds, each county may take not more than two (2) special censuses at its own expense at any time during the interim between the regular decennial federal censuses. The special census shall be taken by the federal census bureau or in a manner directed by and satisfactory to the department of economic and community development. The population of the county shall thereafter be revised in accordance with the special census, effective on July 1 following certification of the census results by the federal census bureau or department of economic and community development to the commissioner of finance and administration.
History (3)
- Acts 1978, ch. 806, § 1
- T.C.A., § 9-1701
- Acts 1995, ch. 501, § 7.
Chapter 18 Financial Integrity Act of 1983 § 9-18-102. Internal controls — Management assessment of risk. - (a) Each agency of state government and institution of higher education along with each county, municipal, and metropolitan government shall establish and maintain internal controls, which shall provide reasonable assurance that:
- (1) Obligations and costs are in compliance with applicable law;
- (2) Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and
- (3) Revenues and expenditures are properly recorded and accounted for to permit the preparation of accurate and reliable financial and statistical reports and to maintain accountability over the assets.
- (b) To document compliance with the requirements set forth in subsection (a), each agency of state government and institution of higher education shall annually perform a management assessment of risk. The internal controls discussed in subsection (a) should be incorporated into this assessment. The objectives of the annual risk assessment are to provide reasonable assurance of the following:
- (1) Accountability for meeting program objectives;
- (2) Promoting operational efficiency and effectiveness;
- (3) Improving reliability of financial statements;
- (4) Strengthening compliance with laws, regulations, rules, and contracts and grant agreements; and
- (5) Reducing the risk of financial or other asset losses due to fraud, waste and abuse.
History (4)
- Acts 1983, ch. 129, § 1
- 1998, ch. 664, §§ 1, 2
- 2008, ch. 750, § 1
- 2015, ch. 112, § 1.
§ 9-18-103. Guidelines for assessment of compliance. - The commissioner of finance and administration, in consultation with the comptroller of the treasury, shall establish guidelines for the assessment, by management of state agencies and higher education institutions, of the risks and systems of internal control to determine compliance with the requirements of § 9-18-102. The commissioner, in consultation with the comptroller of the treasury, may modify the guidelines from time to time as deemed necessary.
History (3)
- Acts 1983, ch. 129, § 1
- 1998, ch. 664, § 3
- 2008, ch. 750, § 2.
§ 9-18-104. Report by head of executive agency. - (a) By December 31, 2008, initially, and then by December 31 of every year thereafter, the head of each state agency and higher education institution shall, on the basis of the evaluations conducted in accordance with guidelines prescribed under § 9-18-103, prepare and transmit to the commissioner of finance and administration and the comptroller of the treasury a report that states that:
- (1) The agency or institution acknowledges its management's responsibility for establishing, implementing and maintaining an adequate system of internal control; and
- (2) A management assessment of risk performed by the agency or institution provides or does not provide reasonable assurance of compliance with the objectives of the assessment as specified in this chapter.
- (b) In the event that the agency's or institution's assessment does not provide reasonable assurance of compliance with the objectives of the assessment as stated in this chapter, the report shall include a corrective action plan that identifies:
- (1) Any significant deficiencies or material weaknesses in the agency's or institution's system of internal control and/or lack of risk mitigating control activity; and
- (2) The plans and the schedule for correcting the weaknesses.
History (4)
- Acts 1983, ch. 129, § 1
- 1998, ch. 664, §§ 4-6
- 2008, ch. 750, § 3
- 2009, ch. 99, § 1.
Chapter 19 Registration of Public Obligations § 9-19-102. Chapter definitions. - As used in this chapter, unless the context otherwise requires:
- (1) “Book-entry form” means, with respect to public obligations, obligations that are not represented by an instrument but are evidenced and transferred on registration books maintained for that purpose by or on behalf of the issuer;
- (2) “Facsimile seal” means the reproduction by engraving, imprinting, stamping, or other means of the seal of the issuer, official or official body;
- (3) “Facsimile signature” means the reproduction by engraving, imprinting, stamping, or other means of the manual signature of an authorized officer;
- (4) “Financial intermediary” means a bank, broker, or clearing corporation or the nominee of any of them, or other person or nominee which in the ordinary course of its business maintains public obligation accounts for its customers, when so acting;
- (5) “Issuer” means any entity, department, or agency which under the laws of this state issues public obligations. “Issuer” may thus include the state of Tennessee, agencies of the state of Tennessee and all political subdivisions and public instrumentalities of the state of Tennessee, including, without limitation, cities, towns, metropolitan governments, counties, authorities, districts, and corporations or other public entities;
- (6) “Official” or “official body” means the officer or board that is empowered under the laws of this state to provide for original issuance of a public obligation of the issuer, by defining the obligation and its terms, conditions and other incidents, the successor or successors of any such official or official body, and such other person or group of persons as shall be assigned duties of such official or official body under applicable law from time to time;
- (7) “Official actions” means the actions by statute, order, ordinance, charter, resolution, contract, or other authorized means by which the issuer provides for issuance of a public obligation; and
- (8) “Public obligation” means an agreement of an issuer to pay principal and any interest thereon, whether in the form of a contract to repay borrowed money, a lease, an installment purchase agreement, or otherwise, and includes a share, participation, or other interest in any such agreement.
§ 9-19-103. Authorization to issue public obligations. - Notwithstanding any other law, issuers are hereby authorized to issue public obligations in fully registered form. Such obligations in fully registered form may, if permitted by the official action authorizing public obligations, be issued in book-entry form. If permitted by the official actions authorizing public obligations, obligations in fully registered form and in bearer form shall be exchangeable from time to time.
§ 9-19-104. Registration agents — Paying agents. - Any issuer of fully registered public obligations is authorized to appoint a registration agent or agents and paying agent or agents with respect to the issuance, exchange and transfer of such public obligations or to maintain records so that public obligations in book-entry form may be effected, with such duties as shall be determined by the issuer. Any such registration agent may be a bank, trust company, financial institution or other financial intermediary within or without this state, including the federal government or any of its agencies or instrumentalities. The state funding board is authorized to adopt such guidelines as it deems necessary relative to the qualifications that such bank, trust company, financial institution, or other financial intermediary must meet to qualify as a registration agent or paying agent for any fully registered public obligations to be issued by any issuer in Tennessee. Any issuer may act as its own registration agent and paying agent in accordance with such terms and conditions as may be established by the state funding board. Any issuer, including the state of Tennessee, may, upon approval by the state funding board, appoint the state of Tennessee, acting by and through the comptroller of the treasury, as registration agent and the state of Tennessee, acting by and through the state treasurer, as paying agent.
§ 9-19-105. Records and books. - (a) The registration agent shall keep such books as shall be necessary in connection with the issuance, exchange and transfer of fully registered public obligations. Any issuer may provide that no such fully registered public obligation shall be valid for any purpose unless certified or authenticated by such registration agent, and if so provided, then such fully registered public obligation shall be valid only if so certified or authenticated by the manual signature of an officer of such registration agent.
- (b) The issuance and transference of a public obligation in book-entry form shall be effected by means of entries on the records of the registration agent which shall reflect the description of the issue, the principal amount, the interest rate, the maturity date, the owner of the public obligation and such other information as the issuer deems appropriate. If so permitted by the official actions authorizing public obligations, conversions may be effectuated between such obligations in book-entry form and registered public obligations evidenced by an instrument for owners of obligations who request such a change. The registration agent shall issue a confirmation of a book-entry transaction in the form of a written advice to the appropriate parties thereto. Such written advice shall confer no rights on the recipient, and shall be neither a negotiable instrument nor a security.
§ 9-19-106. Signatures and seals. - (a) Notwithstanding any other law to the contrary, public obligations issued in registered form are not required to bear manual signatures of officials of the issuer if such public obligations bear facsimile signatures in lieu thereof, and are certified or authenticated with the manual signature of an officer of the registration agent, and if the use of such facsimile signatures and certification or authentication is provided for in the official actions of the official body authorizing such obligations.
- (b) In case any official of the issuer whose signature or facsimile signature appears on a public obligation shall cease to hold office before the delivery thereof to the initial purchasers or before any exchange or transfer between subsequent holders thereof, such signature or facsimile signature nevertheless shall be valid for all purposes the same as if such official had remained in office until after such delivery, exchange or transfer.
- (c) When a seal is required or permitted in the execution of any public obligation, the seal may be printed, engraved, stamped, or otherwise placed in facsimile thereon. The facsimile seal has the same legal effect as the impression of the seal.
- (d) Notwithstanding the foregoing, no signature or endorsement shall be required upon the original issuance or subsequent transfer of fully registered public obligations in the event that such obligations are issued in book-entry form.
§ 9-19-107. Notice of redemption. - In the event fully registered public obligations are subject to redemption by the terms thereof, the issuer may redeem one (1) or more of such obligations or portions thereof by giving the notice specified by the official actions authorizing such obligations or, in the event no provision for notice is therein specified, by mailing or directing the registration agent to mail, postage prepaid, not less than twenty-one (21) days prior to the date fixed for redemption, to the registered owners of such obligations which are to be redeemed at their last address appearing upon the registration books, a notice that the issuer is calling for redemption prior to maturity of such obligations in accordance with the terms thereof. Such notice shall specify the number, issue, date, date fixed for redemption, the date interest will cease to accrue, the redemption price and such further information with respect to such obligations as may be required by the terms thereof. Such notice may be waived by the registered owner of the public obligation subject to redemption.
§ 9-19-108. Interest. - Interest on fully registered public obligations shall be payable on such dates as shall be specified in the official actions authorizing such obligations to the record owners of such obligations as of such record dates as shall be specified in the official actions.
§ 9-19-109. Confidentiality of owner's identity. - The identity of any owner of, or any other information by or from which may be determined the identity of any owner of, any public obligation issued by any issuer shall be treated as confidential and not open to public inspection. The confidentiality herein established shall not be deemed to have been extinguished but shall remain inviolate in cases where such information is in the possession of banks, trust companies, financial institutions or other financial intermediaries of the issuer, including, but not limited to, registration, paying or transfer agents.
§ 9-19-110. Construction of chapter. - The powers conferred by this chapter are in addition and supplemental to the powers conferred by any other law and without regard to the provisions, requirements or restrictions of any other law. The provisions hereof are not in substitution for the powers conferred by any other law. In the event that the provisions hereof conflict with other provisions of general or special law or charter provisions, the provisions hereof shall be deemed to control.
History (1)
- Acts 1983, ch. 100, § 10.
Chapter 20 Tennessee Allocation Plan for Private Activity Bonds § 9-20-101. Short title. - This chapter shall be known as the “Tennessee Allocation Plan for Private Activity Bonds.”
History (2)
- Acts 1985, ch. 237, § 1
- 1987, ch. 57, § 1.
§ 9-20-102. Legislative purpose — Reassignment of allocations. - (a) The purpose of this chapter is to provide a procedure for allocating the state's private activity bond authority among governmental units in the state having the authority to issue bonds under the Tax Reform Act of 1986.
- (b) Allocations to local governments may be reassigned for issuance to all boards and authorities authorized to issue bonds on behalf of governmental units.
History (2)
- Acts 1985, ch. 237, § 2
- 1987, ch. 57, §§ 2-5.
§ 9-20-104. Preparation, distribution and contents of allocation plans. - The commissioner shall, prior to January 1 of each year, prepare and distribute an allocation plan for bonds that meets the following goals:
- (1) Provides equal access to the state bond authority for large cities, small towns and rural areas; and
- (2) Provides the most benefit to the state from the bond authority available to it.
§ 9-20-105. Reports. - (a) Prior to January 31 of each year, the commissioner shall report to the general assembly on the administration of the bond allocation program. This report shall contain, but not be limited to, the following information about bond issues approved and disapproved:
- (1) Amount;
- (2) Purpose; and
- (3) Location.
- (b) The commissioner may include in this report any additional information that will assist the general assembly in evaluating the administration of the bond allocation program.
Chapter 21 Local Government Public Obligations Act of 1986 Part 1 General Provisions Applicable to All Bonds and Notes Issued by Local Governments § 9-21-101. Short title. - This chapter shall be known and may be cited as the “Local Government Public Obligations Act of 1986.”
History (1)
- Acts 1986, ch. 770, § 1-1.
§ 9-21-102. Intent. - It is the intent and purpose of this chapter to provide a uniform and comprehensive statutory framework authorizing any local government to issue general obligation bonds and revenue bonds for public works projects, general obligation bonds for certain unfunded pension obligations, general obligation refunding bonds, revenue refunding bonds, bond anticipation notes, capital outlay notes, grant anticipation notes, tax anticipation notes, and health care revenue anticipation notes, and to authorize the destruction of bonds, notes and coupons.
History (3)
- Acts 1986, ch. 770, § 1-2
- 1997, ch. 390, § 1
- 2000, ch. 983, § 9.
§ 9-21-103. No indebtedness limit. - Bonds or notes may be issued under this chapter, notwithstanding and without regard to any limit on indebtedness provided by law.
History (1)
- Acts 1986, ch. 770, § 1-3.
§ 9-21-104. Negotiability. - Any bonds or notes issued by a local government pursuant to this chapter shall be fully negotiable for all purposes in the absence of an express recital on the face of the bond or note that it is nonnegotiable.
History (1)
- Acts 1986, ch. 770, § 1-4.
§ 9-21-105. Chapter definitions. - As used in this chapter, unless the context otherwise requires:
- (1) “Bondholder,” “holder of bonds” or any similar term means any person who shall be the bearer of any outstanding bonds, notes or other obligations registered to bearer or not registered, or the registered owner of any such outstanding bonds, notes or other obligations which shall at the time be registered other than to bearer, or the holder of any interim certificate pending the issuance of definitive bonds or notes;
- (2) “Bonds” means bonds or interim certificates issued pending preparation or delivery of definitive bonds of a local government issued pursuant to this chapter;
- (3) “Certain unfunded other post-employment benefits” means nonpension benefits paid on behalf of former employees of any local government having a population in excess of one hundred fifty thousand (150,000), according to the 2000 federal census or any subsequent federal census, or the former employees' beneficiaries after separation from service. The benefits may include, but shall not be limited to, medical, prescription drugs, dental, vision, hearing, medicare part B or part D premiums, life insurance, long-term care, and long-term disability. For purposes of this subdivision (3), the value of any “certain unfunded other post-employment benefits” shall be limited to the unfunded actuarial accrued liability as determined pursuant to the Governmental Accounting Standards Board Statement No. 45 and as certified by the actuarial consultant of the local government;
- (4) “Certain unfunded pension obligations” means pension benefits for past service of employees of a local government whose employment results from the local government's assumption of governmental responsibilities of another local government;
- (5) “Construction” means building, reconstruction, erection, replacement, extension, repairing, betterment, equipment, development, embellishment, improvement, acquisition by gift, lease, purchase or the exercise of the right of eminent domain, or any one (1) or more or all of the foregoing, including the acquisition of land and of rights in land, and including acquisition of all of the outstanding capital stock of any corporation whose assets consist entirely of one (1) or more public works projects which together constitute a waterworks, sewer system, natural gas system, electric system, or any combination thereof, including, but not limited to, a water, sewer, natural gas and/or electric distribution system, or any combination thereof, serving a local government and assets related to the operation thereof and whose liabilities consist entirely of those related to the ownership and operation thereof; provided, that upon any such acquisition of stock by a local government, the corporation thus acquired shall be promptly liquidated by the local government, which shall thereupon acquire its assets and assume its liabilities;
- (6) “Contract” or “agreement” between a state or federal agency, or both, and a local government or a local government instrumentality includes contracts and agreements in the customary form and also includes an allotment of funds, resolution, unilateral promise or other commitments by such state or federal agency or agencies by which it shall undertake to make a loan or grant or both, upon performance of specified conditions or with rules and regulations theretofore or thereafter promulgated, prescribed or published by such state or federal agency or agencies. In the case of such an allotment of funds, resolution, unilateral promise or other commitment by a state or federal agency, the terms, conditions and restrictions therein set forth and the rules and regulations theretofore or thereafter promulgated, prescribed or published shall, for the purpose of this chapter, constitute covenants of such a contract that are to be performed by the local government, if the local government accepts any money from such state or federal agency;
- (7) “Enterprise” means any one (1) of or combination of two (2) or more public works projects, undertakings or projects which the local government is or may hereafter be authorized to construct and from which the local government has heretofore derived or may hereafter derive revenues, and such enterprise includes all improvements, betterments, extensions and replacements thereto, and all appurtenances, facilities, lands, rights in land, water rights, franchises and structures in connection therewith or incidental thereto;
- (8) “Facsimile seal” means the reproduction by engraving, imprinting, stamping, or other means of the seal of the issuer, official or governing body;
- (9) “Facsimile signature” means the reproduction by engraving, imprinting, stamping, or other means of the manual signature of an authorized officer of a local government;
- (10) “Federal agency” includes the United States, the president of the United States, or any agency, instrumentality or corporation of the United States, which has heretofore been or may hereafter be designated, created or authorized by or pursuant to any act or acts or joint resolutions of the congress of the United States, to make loans or grants, or which may be owned or controlled, directly or indirectly, by the United States;
- (11) “Federal aid act” means any act or acts or joint resolution of the congress of the United States to reduce and relieve unemployment, or to provide for the construction of public works, or to relieve and rehabilitate veterans of any war, or to subsidize or aid any local government, public works or construction project by grants of money, materials, equipment or otherwise by any federal agency;
- (12) “Financial newspaper” means a financial newspaper, financial journal or other financial publication;
- (13) “Governing body” means the legislative body of any local government of this state or any other authority charged with the governing of the affairs of any local government in this state;
- (14) “Law” means any act or statute, general, special or local, of this state, including, but not limited to, any local government charter;
- (15)
- (A) “Local government” means any county, municipality or metropolitan government in this state; and
- (B) “Local government” also means any separate legal or administrative entity duly created by interlocal agreement between two (2) or more political subdivisions of the state acting pursuant to title 12, chapter 9, IF AND ONLY IF:
- (i) Such political subdivisions retain at least secondary liability for the debts of such legal entity;
- (ii) The terms of such interlocal agreement authorize the entity to exercise powers actually conferred upon such political subdivisions by this chapter; and
- (iii) The terms of such interlocal agreement conform to the restrictions set forth in § 12-9-104(e)(2)(A)(i), (ii) and (iii);
- (16) “Local government instrumentality” means any authority created by law on behalf of a county, metropolitan government, municipality or any combination thereof;
- (17) “Mandated project” means a public works project that a local government is required by a court order or other governmental mandate to construct as determined by the local government with the approval of the comptroller of the treasury or the comptroller's designee;
- (18) “Metropolitan government” means the political entity created by consolidation of all, or substantially all, of the political and corporate functions of a county and a city or cities pursuant to the authority of title 7, chapters 1-3;
- (19) “Municipality” means any incorporated city or any incorporated town of this state;
- (20) “Notes” means notes or interim certificates issued pending preparation or delivery of definitive notes of a local government issued pursuant to this chapter;
- (21) “Obligations” means bonds, notes and any other evidence of indebtedness lawfully issued or assumed by a local government;
- (22)
- (A) “Public works project” includes any one (1) or any combination of the following: acquisitions of land for the purpose of providing or preserving open land; airports; alleys; ambulances; auditoriums; bridges; city and town halls; convention and event centers; corrective, detention, and penal facilities, including, but not limited to, jails and transition centers; courthouses; culverts; curbs; dispensaries; drainage systems, including storm water sewers and drains; electric plants and systems; equipment, including vehicles; technology equipment and related software used for local government purposes; expositions; facilities for persons with disabilities; facilities for the indigent; fairgrounds and fairground facilities; fire department equipment and buildings; fire alarm systems; flood control; garbage collection and disposal systems; gas and natural gas systems and storage facilities; greenways; heat plants and systems; harbor and riverfront improvements; health centers and clinics, including medical and mental health centers and clinics; highways; highway and street equipment; hospitals; hotels and supporting or incidental facilities built by local governments that are built adjacent to and as a supporting facility of civic or convention centers located in municipalities that have created a central business improvement district under the Central Business Improvement District Act of 1971, compiled in title 7, chapter 84; improvements made pursuant to a plan of improvement for a central business improvement district created pursuant to the Central Business Improvement District Act of 1971; law enforcement and emergency services equipment; levees; libraries; markets; memorials; museums; nursing homes; parks; parking facilities; parkways; playgrounds; plazas; port facilities; docks and dock facilities, including any terminal storage and transportation facilities incident thereto; public art; public buildings; preserves; railroads, including the extension of railroads and railway beltlines and switches; reclamation of land; recreation centers and facilities; reservoirs; rights-of-way; river and navigation improvements; roads; schools; transportation equipment for schools; sewers; sewage and waste water systems, including, but not limited to, collection, drainage, treatment, and disposal systems; ship canals; sidewalks; stadiums; streets; swimming pools; thermal transfer generating plants or distribution systems or both; tunnels; viaducts; voting machines; water treatment distribution and storage systems; wharves; and zoos;
- (B) “Public works project,” also includes:
- (i) “Business park,” which includes lands and rights, easements and franchises relating thereto, and may include roads and streets, water, sewer, electric and other utilities, landscaping and related elements as required for the orderly development and use of corporate or professional office space by one (1) or more commercial, financial or service business, and such appurtenant land for necessary incidental use. “Business park” does not include a retail operation except for an incidental retail use. A “business park” shall contain not less than five (5) acres of land. The building finance committee in the industrial development division of the department of economic and community development is authorized and empowered to determine whether a local government shall have the right to engage in any or all of the rights and privileges accompanying such a public works project. Before a local government may undertake the financing of such a public works project, it shall apply to the committee for a certificate of public purpose and necessity. The committee shall issue such a certificate once it is affirmatively determined that:
- (a) There are adequate property values and suitable financial conditions so that the total bonded indebtedness of the local government, solely for this authorized purpose and those other purposes authorized by title 7, chapter 55 and title 13, chapter 16, shall not exceed ten percent (10%) of the total assessed valuation of all the property in the local government ascertained by the last completed assessment at the time of the issuance of such bonds; and
- (b) The project is well conceived, has a reasonable prospect of success, will provide economic development and employment, will tend to encourage businesses to locate there and will not become a burden upon the taxpayers of the local government;
- (ii) “Industrial park,” which includes lands, rights, easements and franchises relating thereto, and may include adequate roads and streets, water and sewer facilities, utilities and docks and terminals. Any of the foregoing improvements which are to be located within the geographic boundaries of the industrial park may only be financed after compliance with title 13, chapter 16, part 2;
- (iii) “Urban renewal project,” which means the same as such projects which are defined in §§ 13-20-209 — 13-20-215. Any local government is hereby authorized to contribute money, property, and municipal services to any public agency engaged in the development of urban renewal projects in that local government;
- (iv) “Urban transit facility,” which includes any or all real and personal property needed to provide public passenger transportation by means of street railway, electric railway, incline railroad, trolley coach, bus, motor coach, or any combination thereof, including terminal, maintenance and storage facility, whether owned and operated by a local government or owned by a local government and leased to private operators, all of which are hereby found and determined to be in the public interest and a proper public purpose;
- (v) Facilities for the storage and maintenance of any of the items of equipment which constitute public works projects;
- (vi) Facilities or capital expenditures paid or incurred with respect to property located in a “recovery zone,” as defined in § 1400U-1(b) of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 1400U-1(b), that are made for a “qualified economic development purpose,” as defined in § 1400U-2(c) of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 1400U-2(c);
- (vii) Facilities or expenditures paid or incurred for “qualified conservation purposes,” as defined in § 54D(f) of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 54D(f), in connection with the issuance of “qualified energy conservation bonds,” as defined in § 54D of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 54D;
- (viii) All property real and personal, appurtenant thereto or connected with any public works project, work or undertaking and the existing public works project, work or undertaking, if any, to which such public works project, work or undertaking is an extension, addition, betterment or improvement; and
- (ix) Facilities or capital expenditures paid or incurred with respect to development of affordable housing or workforce housing in a county having a metropolitan form of government with a population of not less than six hundred thousand (600,000), according to the 2010 federal census or any subsequent federal census, including expenditures related to a housing trust fund established in accordance with title 7, chapter 8 or title 13, chapter 23, part 5. For purposes of this subdivision (22)(B)(ix), only local governments within which the affordable or workforce housing is located are authorized to issue debt or borrow money, and in no event, shall the credit of any county, city, or town be given or loaned to or in aid of any person, company, association, or corporation, within the meaning of the Constitution of Tennessee, Article II, § 29, without first complying with the applicable requirements of the Constitution of Tennessee, Article II, § 29;
- (C) This enumeration does not exclude any other project for the benefit of the people at large of any local government where any state or federal agency will match the funds of the local government with grants-in-aid or gratuities to subsidize or assist the development of a public works project;
- (D) Notwithstanding subdivision (22)(B)(i), a certificate of public purpose and necessity shall not be required for a public works project of a local government with a population of not less than three hundred thousand (300,000), according to the 2000 federal census or any subsequent federal census. The total pledge of full faith and credit of any such local government related to the project shall not exceed ten percent (10%) of the total assessed valuation of all property in the local government, ascertained by the last completed assessment at the time of issuance of the obligations. In any resolution pledging the full faith and credit and unlimited taxing power of any such local government to secure any obligations related to a public works project, the governing body of the local government shall state that the project being considered is well conceived, has a reasonable prospect for success, will provide proper economic development and employment, and will not likely become a burden on the taxpayers of the local government;
- (23) “Refinancing” means funding, refunding, paying, or discharging, by means of refunding bonds or the proceeds received from the sale thereof, all or any part of any bonds, notes, or other obligations heretofore or hereafter issued or lawfully assumed and payable solely from all or any part of the revenues of one (1) or more enterprises, or from a combination of such revenues and taxes, except notes issued in anticipation of bonds;
- (24) “Refunding bonds” means bonds issued to refund all or any part of bonds, notes or other obligations, except notes issued in anticipation of bonds, heretofore or hereafter issued or lawfully assumed by a local government pursuant to this chapter, or any other provision of this code or any other general or special law;
- (25) “Revenues” means all fees, rents, tolls, rates, rentals, interest earnings, or other charges received or receivable by the local government from any public works project or enterprise then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with a public works project or enterprise, or all other charges to be levied and collected in connection with and all other income and receipts of whatever kind or character derived by the local government from the operation of any public works project or enterprise or arising from any public works project or enterprise;
- (26) “State” means the state of Tennessee;
- (27) “State agency” means any agency of the state created by the general assembly; and
- (28) “Taxable property” means all property subject to ad valorem taxation within the local government, or any portion of the local government, if applicable.
History (16)
- Acts 1986, ch. 770, § 1-5
- 1990, ch. 593, § 6
- 1992, ch. 880, § 1
- 1997, ch. 390, § 2
- 1998, ch. 728, § 1
- 1998, ch. 751, § 1
- 2004, ch. 705, § 1
- 2006, ch. 770, § 1
- 2006, ch. 847, § 1
- 2007, ch. 131, § 1
- 2008, ch. 991, § 1
- 2009, ch. 608, § 2
- 2010, ch. 868, § 41
- 2013, ch. 467, §§ 1-4
- 2016, ch. 738, § 1
- 2021, ch. 128, §§ 3-5.
§ 9-21-106. Rate discrimination prohibited. - When a public works project supplies its services to consumers who use solar or wind powered equipment as a source of energy, that public works project shall not discriminate against those consumers by its rates, fees or charges or by altering the availability or quality of energy. Any consumer who uses solar, wind power, or other auxiliary source of energy shall install and operate the equipment, property, or appliance for such energy source in compliance with any state or local code or regulation applicable to the safe operation of such equipment, property or appliance.
History (1)
- Acts 1986, ch. 770, § 1-6.
§ 9-21-107. Powers of local governments. - All local governments have the power and are authorized, either singly or jointly with any one (1) or more other local governments, local government instrumentalities, the state, or a state or federal agency or jointly with one (1) or more of the above, to:
- (1) Engage in the construction of any public works project which may be constructed within or without the local government, or partially within and partially without the local government. However, no local government shall engage in the construction of a public works project wholly or partly within the legal boundaries of another local government, other than to perform maintenance on or make improvements to its existing public works projects in its service area, except with the consent of the governing body of the other local government; provided, that any county or metropolitan government may construct a public works project within a municipality within the county or metropolitan government without the permission of the governing body of the municipality;
- (2) Operate and maintain any public works project for its own purpose or for the benefit and use of its inhabitants and, in the case of municipalities, also to operate and maintain such public works project for the benefit and use of the municipality and persons, firms and corporations therein and persons, firms and corporations, including municipal corporations, which are situated or whose residences or places of business are situated outside the territorial boundaries of the municipality but within the state and within a radius of twenty (20) miles from the territorial boundaries of the municipality; provided, that a joint project of any local government may, by agreement of the joint participants be operated or maintained, or both, by the local government itself, or by any one (1) of the other joint participants, or jointly by the local government and any one (1) or more of the joint participants, or jointly by any of the joint participants other than the local government;
- (3)
- (A) Contract debts for the construction of any public works project or for the local government's share of the cost of any joint public works project;
- (B) Contract debts in order to make grants, donations, reimbursements or loans to one (1) or more local governments, local government instrumentalities, or utility districts for the construction of any public works project;
- (C) Borrow money;
- (D) Issue bonds or notes to finance such construction, grant, donation, reimbursement or loan;
- (E) Provide for the rights of the holders of such bonds or notes; and
- (F) Secure such bonds or notes as hereinafter provided;
- (4) Pledge the full faith, credit and unlimited taxing power of the local government as to all taxable property in the local government or a portion of the local government, if applicable, to the punctual payment of the principal of and interest on the bonds or notes issued to finance any public works project, except bonds or notes and the interest thereon payable exclusively from revenues of a public works project;
- (5) In the case of a county or metropolitan government which contains within its boundaries a special school district and/or incorporated city or town maintaining a public school system separate from the county or metropolitan government public school system, the tax pledge authorized by subdivision (4), when pledged to the payment of bonds or notes issued to finance the construction of public schools of the county or metropolitan government serving outside the territorial limits of such special school district and/or incorporated city or town, may be a pledge of taxes to be levied only upon taxable property within that portion of the county or metropolitan government lying outside the territorial limits of such special school district and/or incorporated city or town;
- (6) In the case of a county or metropolitan government which contains within its boundaries an incorporated city or town which constructs and maintains its streets, avenues, alleys and other highways separate from the county or metropolitan government, the tax pledge authorized by subdivision (4), when pledged to the payment of bonds or notes issued to finance the construction of streets, avenues, alleys and other highways of the county or metropolitan government lying outside the territorial limits of such incorporated city or town may be a pledge of taxes to be levied only upon taxable property within that portion of the county or metropolitan government lying outside the territorial limits of such incorporated city or town;
- (7) Assess, levy and collect ad valorem taxes on all taxable property within the local government or a portion of the local government, if applicable, sufficient to pay the principal of and interest on the bonds or notes issued to finance any public works project, except bonds or notes and the interest thereon payable exclusively from revenues of a public works project;
- (8) Fix, levy and collect fees, rents, tolls or other charges for the use of or in connection with any public works project and, in the event any agreements with holders of bonds or notes shall have been made as hereinafter provided, to fix, levy and collect such fees, rents, tolls and other charges in accordance with and subject to such agreements. Such fees, rents, tolls and other charges may also include any revenues derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or state or federal agency for the use of or in connection with a public works project. The power to fix, levy, and collect such fees, rents, tolls, or other charges includes the power to impose charges for the privilege of parking motor vehicles in or upon any on-street or off-street parking facilities, and the power to facilitate the collection of such parking fees or other charges by the use of parking meters;
- (9) Pledge all or any part of the fees, rents, tolls, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including also any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the payment of all operating expenses of the public works project or projects, to the punctual payment of the principal of and interest on bonds or notes issued to finance such public works project or projects, or any other public works project or projects, or if the governing body of the local government shall by resolution so request, payments to the local government in lieu of ad valorem taxes on the property constituting such public works project or projects, not to exceed the amount of taxes payable on privately owned property of similar nature, and to covenant against thereafter pledging any such fees, rents, tolls, or charges to any other bonds or notes or any other obligations of the local government;
- (10) Acquire by purchase, gift or the exercise of the right of eminent domain, to lease as lessor or lessee, and to hold, dispose of, and convey any property, real or personal, tangible or intangible, or any right or interest in any such property, in connection with any public works project, whether or not subject to mortgages, liens, charges or other encumbrances, and to construct any public works project subject thereto. In the acquisition of public works projects, no governing body shall have the right to exercise the power of eminent domain with respect to real or personal property which has been dedicated to a public use, or which is at the time being so used, unless the owners or authorities having jurisdiction over the property agree to such acquisition. No governing body shall construct any structure of any type on or over any property which has been dedicated to public use, or which is at the time being so used, unless the owners or authorities having jurisdiction over the property agree to the construction of such structure. A local government may use any right-of-way, easement or other similar property right necessary or convenient in connection with the acquisition, improvement, operation or maintenance of a public works project held by the state or any other local government; provided, that the state or such other local government consents to such use;
- (11) Enter on any lands, waters and premises for the purpose of making surveys, soundings and examinations in or for the furtherance of any public works project;
- (12) Make contracts and execute instruments containing such terms, provisions and conditions as in the discretion of the governing body may be necessary, proper or advisable for the purpose of obtaining a grant, loan or other financial assistance from the state or any state or federal agency pursuant to a state or federal aid act; make all other contracts and execute all other instruments necessary, proper or advisable in or for the furtherance of any public works project; and carry out and perform the terms and conditions of all such contracts or instruments;
- (13) Accept from any state or federal agency grants for or in aid of the construction of any public works project;
- (14) Subscribe to and comply with any state or federal aid act and any rules and regulations made by the state or any state or federal agency with regard to any grants or loans, or both;
- (15) Exercise, for the purpose of obtaining a grant, loan or other financial assistance from the state or any state or federal agency pursuant to or by virtue of any state or federal aid act, any power conferred by this chapter independently or in conjunction with any other power or powers conferred by this chapter or heretofore or hereafter conferred by any other law;
- (16) Lease all or any portion of off-street parking facilities for the purpose of parking motor vehicles to any person, firm or corporation, for operation by such person, firm or corporation, and fix and collect rentals therefor and make contracts for the operation and management thereof. All revenues derived from any such lease or contract shall be regarded as fees, rents, tolls or other charges for the use of, or in connection with, the facilities;
- (17) Lease all or any portion of urban transit facilities to any person, firm, or corporation, for operation by such person, firm or corporation, and to fix and collect rentals therefor and make contracts for the operation and management thereof, notwithstanding the fact that the local government may or may not then operate its own urban transit facilities. All revenues derived from any such lease or contract shall be regarded as fees, rents, tolls or other charges for the use of, or in connection with, the respective facilities;
- (18) Combine all or any parts of parking facilities into a single public works project. Nothing contained in this chapter shall in any way affect the validity of any private act now existing or which may hereafter be enacted, prohibiting any local government from engaging in the public parking business;
- (19) Provide for the replacement of lost, destroyed or mutilated bonds or notes;
- (20) Perform any powers or duties authorized under this chapter through, or by means of, its own officers, agents and employees, or by contract with private corporations, firms or individuals;
- (21) Designate one (1) or more areas that meet the requirements of § 1400U-1(b) of the Internal Revenue Code of 1986 (26 U.S.C. § 1400U-1(b)) [repealed], as a recovery zone for purposes of that section; and
- (22) Do all things necessary or convenient to carry out the powers expressly given in this chapter.
History (5)
- Acts 1986, ch. 770, § 1-7
- 1987, ch. 77, §§ 1, 2
- 1990, ch. 683, § 1
- 2009, ch. 74, § 2
- 2009, ch. 608, § 3.
§ 9-21-108. Governing body authorized to act by resolution — Procedure for adoption of resolutions. - All actions required or authorized to be taken under this chapter by the governing body of a local government may be by resolution. The resolution may be adopted at the meeting, regular or special, of the governing body at which the resolution is introduced, and shall take effect immediately upon adoption. Except as otherwise provided in this chapter, no resolution under this chapter need be published or posted, nor shall any such resolution be subject to veto by the chief executive officer or presiding officer of the governing body, nor shall any such resolution require for its passage more than a majority vote of all the members of the governing body then in office. The resolution may delegate authority to the chief executive officer of the local government to sell notes or bonds under this chapter.
History (2)
- Acts 1986, ch. 770, § 1-8
- 1994, ch. 806, § 6.
§ 9-21-109. Determination of costs of public works projects. - In determining the costs of any public works project for which bonds or notes are to be issued, the following items may also be included as a part of the cost of the public works project to be financed by the issuance of bonds or notes:
- (1) Engineering, architectural, art design services, inspection, legal and accounting expenses, and relocation expenses in connection with construction of a public works project;
- (2) The cost of issuance of the bonds or notes, including engraving, printing, advertising, credit enhancement, legal, fiscal and other similar expenses;
- (3) Any interest costs during the period of construction of a public works project and for six (6) months thereafter on any money borrowed or estimated to be borrowed;
- (4) Any moneys already spent by the local government from any of its funds for any of the foregoing expenses enumerated in subdivisions (1), (2) and (3), and upon the actual construction of a public works project in order to permit the construction of public works projects by the use of the funds of the local government if desired, and the later replacement of those funds by the sale of bonds or notes authorized by this chapter; and
- (5) The establishing of a reasonably required reserved fund for the payment of the principal of and interest on the bonds or notes.
History (3)
- Acts 1986, ch. 770, § 1-9
- 1988, ch. 743, § 1
- 1998, ch. 751, § 2.
§ 9-21-110. Appointment of a fiscal agent. - Any local government has the power in connection with the issuance of bonds or notes to appoint a fiscal agent, to provide for the powers, duties, functions and compensation of such fiscal agent, to limit the liabilities of the fiscal agent, to prescribe a method for the resignation, removal, merger or consolidation of the fiscal agent, the appointment of a successor fiscal agent, and the transfer of rights and properties to the successor fiscal agent.
History (1)
- Acts 1986, ch. 770, § 1-10.
§ 9-21-111. Execution of bonds and notes. - (a) Bonds and notes issued under this chapter in registered form shall be executed in the manner provided for in the Tennessee Public Obligations Registration Act, compiled in chapter 19 of this title.
- (b) Bonds, notes, and any interest coupons attached thereto issued under this chapter which are not in registered form may, if so authorized by the governing body of the local government, bear or be executed with the facsimile signature of the chief executive officer of the local government; provided, that each bond, or note, shall be manually signed by the county clerk, by the city recorder or other similar local government official so authorized by resolution of the governing body of the local government.
- (c) When an official or corporate seal of the local government, its governing body or of any local government official is required or permitted in the execution of any bond, note or coupon, the seal may be printed, engraved, stamped, or otherwise placed in facsimile thereon. The facsimile seal has the same legal effect as the impression of the seal.
- (d) In case any official whose signature or facsimile signature appears on the bonds, notes or coupons shall cease to be such official before the delivery of the bonds, notes, or coupons to the purchaser, that signature shall be valid and sufficient for all purposes, as if that official had remained in office until the delivery of the bonds, notes or coupons.
History (2)
- Acts 1986, ch. 770, § 1-11
- 1987, ch. 77, § 3.
§ 9-21-112. Interim certificates. - Pending the preparation or delivery of definitive bonds or notes under this chapter, interim certificates or other temporary obligations may be issued by the local government to the purchaser of the bonds or notes. The interim certificates or other temporary obligations shall be in such form and contain such terms, conditions and provisions as the governing body of the local government may determine.
History (1)
- Acts 1986, ch. 770, § 1-12.
§ 9-21-113. Deposit and custody of proceeds. - (a) The proceeds received from the sale of bonds or notes issued under this chapter by a local government shall be deposited with, in the case of counties, the county trustee or, in the case of municipalities or metropolitan governments, with the official designated by law as custodian of the funds, or be deposited as provided in the resolution authorizing the bonds or notes.
- (b) The official designated as custodian of the funds shall not receive extra compensation for handling the funds.
History (2)
- Acts 1986, ch. 770, § 1-13
- 1987, ch. 77, § 4.
§ 9-21-114. Fees for reselling bonds or notes forbidden. - (a) It is unlawful and deemed a misappropriation of public funds for any official to pay a fee other than underwriting discount to any person, group of persons, firm, company or corporation for selling bonds or notes issued by such official's local government after such bonds or notes have been sold. Nothing in this section shall be construed to prohibit the payment of fees for legal and fiscal services in connection with the issuance of bonds or notes. Nothing in this section shall be construed to prohibit the payment of a remarketing fee to a remarketing agent for remarketing services in connection with the resale of bonds or notes subject to repurchase on demand of the owner or subject to repurchase on demand of the local government.
- (b) Any local government official who unlawfully misappropriates public funds, in the manner set forth in subsection (a), shall be personally liable to the local government for the total amount of such unlawful misappropriation and reasonable attorney fees incident to the collection of such amount. A suit to recover the total amount for which a local government official is personally liable may be filed by any person who is a resident and taxpayer of the local government for general obligation bonds or notes, or by any person who is a user of the service provided in the case of revenue bonds or notes of the local government.
History (1)
- Acts 1986, ch. 770, § 1-14.
§ 9-21-115. State control of public works projects. - This chapter shall not otherwise operate to dispense with the approval by a state department, board, officer or commission of a public works project where such approval under existing law must be obtained before a local government may construct a public works project.
History (1)
- Acts 1986, ch. 770, § 1-15.
§ 9-21-116. Hotel and motel projects subject to tax. - In local governments of this state where a tax is imposed on hotel and motel accommodations, any hotel or motel built as a public works project under this chapter shall be subject to the collection of such a tax.
History (1)
- Acts 1986, ch. 770, § 1-16.
§ 9-21-117. Tax exemption. - Any bonds or notes issued by a local government pursuant to this chapter and the income therefrom shall be exempt from all state, county and municipal taxation except for inheritance, transfer and estate taxes, and except as otherwise provided in this code.
History (1)
- Acts 1986, ch. 770, § 1-17.
§ 9-21-118. Recital of issuance pursuant to this chapter. - A resolution authorizing bonds or notes under this chapter may provide that such bonds or notes shall contain a recital that they are issued pursuant to this chapter, which recital shall be conclusive evidence of their validity and the regularity of their issuance.
History (1)
- Acts 1986, ch. 770, § 1-18.
§ 9-21-119. Validity of bonds and notes unaffected by certain irregularities. - The validity of the authorization and issuance of the bonds or notes authorized under this chapter shall not be dependent on or affected in any way by proceedings taken for the construction of any public works project or enterprise or contracts made in connection with the construction of any public works project or enterprise or by a failure to obtain the approval referred to in § 9-21-115.
History (1)
- Acts 1986, ch. 770, § 1-19.
§ 9-21-120. Bond and note issues validated. - (a) 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.
- (b) 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.
History (2)
- Acts 1986, ch. 770, § 1-20
- 1998, ch. 903, § 1.
§ 9-21-121. Impairment of contract. - Nothing in this chapter shall be deemed in any way to alter the terms of any agreements made with the holders of any outstanding bonds or notes of the local government or to authorize the local government to alter the terms of any such agreements, or to impair, or to authorize the local government to impair, the rights and remedies of any creditors of the local government.
History (1)
- Acts 1986, ch. 770, § 1-21.
§ 9-21-122. Authorization to cancel bonds, notes and coupons. - Whenever any bonds, notes, or interest coupons shall be paid and discharged, they shall be cancelled by stamping and punching, immediately upon their redemption. The cancelled bonds, notes, and coupons shall be retained and be available for examination in annual audits subject to § 9-21-123.
History (1)
- Acts 1986, ch. 770, § 1-22.
§ 9-21-123. Authorization to destroy bonds, notes and coupons. - (a) Subject to subsection (b), any local government may, by resolution duly adopted by its governing body, authorize and direct the paying agent for its bonds, notes and coupons, or other person in possession of its bonds, notes and coupons, to destroy all bonds, notes and coupons duly paid and cancelled.
- (b) Such bonds, notes and coupons duly paid and cancelled during any fiscal year may be destroyed only after the fiscal audit of the local government covering the fiscal year has been completed and the appropriate local government official shall have properly posted all bonds, notes and coupons duly paid and cancelled to the local government bond, note and coupon records on a current basis. If the audit reflects that all bonds, notes and coupons duly paid and cancelled have been properly accounted for, then the paying agents or other persons who have the local government's bonds, notes and coupons in their possession shall, at the direction of the local government, destroy the same and furnish a certified list of bonds, notes and coupons duly paid and cancelled by issue showing the bond, note and coupon number, the amount of each, the date paid and such additional information as the governing body may require. The governing body shall cause the certified list of bonds, notes and coupons duly paid and cancelled to be recorded in the official minutes of the governing body.
History (1)
- Acts 1986, ch. 770, § 1-23.
§ 9-21-124. Supplementary nature — Transitional provisions — Interest rate agreements. - (a) The powers conferred by this chapter shall be in addition and supplemental to the powers conferred by any other law and not in substitution for the powers conferred by any other law; however, to the extent this law conflicts with any other law or is inconsistent with any other law, this chapter shall prevail with respect to all bonds and notes issued under this chapter. Bonds or notes may be issued hereunder for any public works project, notwithstanding that any other law may provide for the issuance of bonds or notes for like purposes and without regard to the requirements, restrictions or procedural provisions contained in any other law or any home rule charter, and notwithstanding any other provisions to the contrary contained in any other law or laws. Any proceedings heretofore taken by any local government relating to the subject matters hereof, whether or not commenced under any other law, may be continued hereunder, or at the option of the governing body, may be discontinued and new proceedings instituted under this chapter.
- (b) Prior to the adoption or promulgation by the state funding board of guidelines, rules or regulations with respect to the contracts and agreements authorized in §§ 9-21-213(d), 9-21-302(b), 9-21-305(c), 9-21-602(c), 9-21-907(c), 9-21-910(d), 9-21-1006(c) and 9-21-1008(c), a local government may enter into such contracts or agreements to the extent otherwise authorized in this chapter or in any other law notwithstanding §§ 9-21-213(d), 9-21-302(b), 9-21-305(c), 9-21-602(c), 9-21-907(c), 9-21-910(d), 9-21-1006(c) and 9-21-1008(c). Nothing in §§ 9-21-213(d), 9-21-302(b), 9-21-602(c), 9-21-907(c), 9-21-910(d), 9-21-1006(c) and 9-21-1008(c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for a local government to enter into the contracts or agreements described in §§ 9-21-213(d), 9-21-302(b), 9-21-305(c), 9-21-602(c), 9-21-907(c), 9-21-910(d), 9-21-1006(c) and 9-21-1008(c) heretofore entered into or entered into prior to the adoption or promulgation by the state funding board of guidelines, rules or regulations.
History (2)
- Acts 1986, ch. 770, § 1-24
- 1999, ch. 432, § 1.
§ 9-21-125. Effectiveness and priority of pledges and liens. - (a)
- (1) Any pledge of, or lien on, revenues, fees, rents, tolls or other charges received or receivable by any local government to secure the payment of any bonds or notes issued by a local government pursuant to this chapter, and the interest thereon, shall be valid and binding from the time that the pledge or lien is created or granted and shall inure to the benefit of the holder or holders of any such bonds or notes until the payment in full of the principal thereof and premium and interest thereon.
- (2) The priority of any pledge or lien with respect to competing pledges or liens shall be determined by the date such pledge or lien is created or granted.
- (3) Neither the resolution nor any other instrument granting, creating, or giving notice of the pledge or lien need be filed or recorded to preserve or protect the validity or priority of such pledge or lien.
- (b) This section applies to all pledges of and liens on revenues, fees, rents, tolls or other charges received or receivable by any local government to secure the payment of any bonds or notes issued by a local government, whether created or granted before or after May 22, 1991, except such application does not affect the rights of persons to the extent their relative priorities were intended to be fixed by reference to any other provision of law prior to May 22, 1991.
History (1)
- Acts 1991, ch. 403, §§ 1, 2.
§ 9-21-126. Advertisements for sale of bonds or notes. - An advertisement for sale of bonds or notes under this chapter may omit the date and time of sale, and in such event, the advertisement for sale shall set forth the manner in which the date and time of sale shall be subsequently published, which may be either by publication:
- (1) In the same financial journal and/or newspaper where the advertisement for sale is published; or
- (2) Via electronic communication systems deemed proper by the local government which is generally available to the financial community, in either case at least forty-eight (48) hours prior to the time fixed for such sale.
History (1)
- Acts 1994, ch. 806, § 10.
§ 9-21-127. Bonds for certain unfunded pension obligations. - (a) Local governments may issue general obligation bonds or revenue bonds under this part and parts 2 and 3 of this chapter for certain unfunded pension obligations or for not greater than fifty percent (50%) of the value of certain unfunded other post-employment benefits if such is approved by the state funding board after receiving a recommendation by the comptroller of the treasury or the comptroller's designee.
- (b) [Deleted by 2021 amendment.]
- (c) Notwithstanding any provisions of this chapter to the contrary, any bonds issued pursuant to this section shall mature at such time or times not exceeding thirty (30) years from their respective dates and the proceeds from any bonds issued for certain unfunded other post-employment benefits shall be invested in accordance with an investment trust established pursuant to title 8, chapter 50, part 12.
History (5)
- Acts 1997, ch. 390, § 3
- 2008, ch. 991, § 2
- 2010, ch. 868, § 42
- 2013, ch. 467, § 5
- 2021, ch. 128, § 6.
§ 9-21-128. Debt necessary to fund school building improvements, demolition or new construction. - Whenever the commissioner of education is authorized by the state board of education to take responsibility for the operation of any local school system or school that has been placed on probation pursuant to title 49, chapter 1, part 6, the state acting under the authority of the state building commission may issue debt necessary to fund school building improvements, demolition or new construction as approved by the commissioner and the state board of education. Such debt may be required to be repaid from any funds available to such local school system.
§ 9-21-129. Proceeds to be shared among municipal or special school district systems. - (a) Proceeds from the sale of bonds or notes issued pursuant to this chapter by a county or metropolitan government for school capital outlay purposes shall be shared with any municipal or special school district system within the county or metropolitan government on the same basis as is provided in § 49-3-1003. The trustee of the county or the treasurer of the metropolitan government shall pay over to the treasurer of the municipality or the special school district that amount of the proceeds which bears the same ratio to the entire amount of proceeds, net of all costs of issuance and sale of the bonds or notes, as the average daily attendance of the year ending June 30 immediately preceding the receipt of the proceeds of the respective municipality or special school district bears to the average daily attendance for the year ending June 30 immediately preceding the receipt of the proceeds of the entire county or metropolitan government.
- (b) The governing body of such municipality or special school district may, by regularly adopted resolution, waive its right to all or a part of any funds due under this section and return the funds to the trustee of the county or the treasurer of the metropolitan government for the purposes originally provided.
- (c) The proceeds of any bonds or notes issued for school capital outlay purposes shall not be required to be shared if the county or metropolitan government elects to pay for such bonds or notes pursuant to any applicable provision of § 49-3-1005(b) or (c).
- (d) Proceeds required to be shared pursuant to this section shall be shared at the time of the issuance of the bonds or notes.
- (e) The proceeds of any refunding bonds and notes issued pursuant to part 9 of this chapter to refund bonds or notes issued for school capital outlay purposes, the proceeds of bonds issued to retire capital outlay notes issued for school capital outlay purposes pursuant to part 6 of this chapter, the proceeds of bonds issued to retire bond anticipation notes issued for school capital outlay purposes, and notes issued to renew other notes issued for school capital outlay purposes, shall not be required to be shared as provided herein, unless the bonds or notes to be refunded, refinanced, renewed or extended are payable from taxes levied only upon a portion of the property in a county or metropolitan government as provided in § 49-3-1005(b), or are payable as provided in § 49-3-1005(c), and the instruments issued to accomplish such refinancing are payable from taxes to be levied on all taxable property in the county or metropolitan government.
§ 9-21-130. Guidelines and rules and regulations relating to contracts and agreements authorized — Compliance with. - (a) The state funding board shall establish guidelines, rules or regulations with respect to the agreements and contracts authorized in §§ 9-21-213(d), 9-21-302(b), 9-21-305(c), 9-21-602(c), 9-21-907(c), 9-21-910(d), 9-21-1006(c) and 9-21-1008(c), which may include, but shall not be limited to, the following:
- (1) The conditions under which such agreements or contracts can be entered into;
- (2) The methods by which such contracts are to be solicited and procured;
- (3) The form and content such contracts shall take;
- (4) The aspects of risk exposure associated with such contracts;
- (5) The standards and procedures for counterparty selection, including rating criteria;
- (6) The procurement of credit enhancement, liquidity facilities, or the setting aside of reserves in connection with such contracts or agreements;
- (7) The methods of securing the financial interest in such contracts;
- (8) The methods to be used to reflect such contracts in the local government's financial statements;
- (9) Financial monitoring and periodic assessment of such contracts by the local government;
- (10) The application and source of non-periodic payments; and
- (11) Educational requirements for officials of any local government responsible for approving any such contract or agreement.
- (b) Prior to the adoption by the governing body of the local government of a resolution authorizing such contract or agreement, a request shall be submitted to the comptroller of the treasury or the comptroller's designee for a report finding that such contract or agreement is in compliance with the guidelines, rules or regulations of the state funding board. Within fifteen (15) days of receipt of the request, the comptroller of the treasury or the comptroller's designee shall determine whether the contract or agreement substantially complies with the guidelines, rules or regulations and shall report thereon to the local government. If the report of the comptroller of the treasury or the comptroller's designee finds that the contract or agreement complies with the guidelines, rules or regulations of the state funding board or the comptroller of the treasury shall fail to report within the fifteen-day period, then the local government may take such action with respect to the proposed contract or agreement as it deems advisable in accordance with this section and the guidelines, rules or regulations of the state funding board. If the report of the comptroller of the treasury or the comptroller's designee finds that such contract or agreement is not in compliance with the guidelines, rules or regulations, then the local government is not authorized to enter into such contract or agreement. The guidelines, rules or regulations shall provide for an appeal process to a determination of noncompliance.
§ 9-21-131. Agreements concerning rights and remedies of parties — Jurisdiction — Applicable law. - When entering into any contracts or agreements authorized under this chapter, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the local government may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over any local government against which an action on such a contract or agreement is brought shall lie solely in a court located in Tennessee which would otherwise have jurisdiction of actions brought in contract against such local government.
§ 9-21-132. Petition for permission to sell specific bonds at private sale. - (a) [Deleted by 2021 amendment.]
- (b) [Deleted by 2021 amendment.]
- (c) Any local government may petition the state funding board for permission to sell specific bonds determined to be required to be sold at taxable interest rates at private sale upon terms and conditions that the local government determines and upon approval by the governing body of the local government.
History (4)
- Acts 2009, ch. 223, § 1
- 2010, ch. 982, § 5
- 2012, ch. 601, §§ 1-3
- 2021, ch. 128, § 7.
§ 9-21-133. Approval of comptroller of treasury required prior to issuance of balloon indebtedness — Evaluation of plan. - (a) As used in this section:
- (1) “Balloon indebtedness”:
- (A) Means any indebtedness that:
- (i) Has a final term to maturity totaling thirty-one (31) or more years from the original date of issuance of the indebtedness to the date the indebtedness is fully amortized, including any subsequent refinancing thereof;
- (ii) Delays principal repayment for more than three (3) years after the date of issuance;
- (iii) Capitalizes interest beyond the later of the construction period or three (3) years from the date of issuance; or
- (iv) Does not have substantially level or declining debt service; and
- (B) Does not include any indebtedness that:
- (i) Has at least seventy-five percent (75%) of total principal amortized within ten (10) years from the date of issuance with no more than twenty-five percent (25%) of principal subject to payment in any one (1) year;
- (ii) Has a debt service schedule in which each annual principal installment is not more than fifty percent (50%) in excess of the smallest prior installment;
- (iii) Has a general obligation pledge and is being issued by a local government or local government instrumentality that has some amount of long-term general obligation indebtedness outstanding or proposed to be issued that is rated in the highest rating category for long-term debt instruments (AAA/Aaa) or the first tier (AA+/Aa1) of the second highest rating category for long-term debt instruments by a nationally recognized rating agency for municipal securities, without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with such rated indebtedness;
- (iv) Is secured solely by a revenue pledge and is being issued by a local government or local government instrumentality that has some amount of long-term revenue indebtedness outstanding or proposed to be issued that is rated in the highest rating category for long-term debt instruments (AAA/Aaa) or the first tier (AA+/Aa1) of the second highest rating category for long-term debt instruments by a nationally recognized rating agency for municipal securities, without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with such rated indebtedness;
- (v) State or federal law requires the local government or local government instrumentality to participate in the financing program;
- (vi) Is a conduit transaction for a nongovernmental entity;
- (vii) Is evidenced by a loan with either the United States department of agriculture or the United States department of housing and urban development; or
- (viii) Is a note the issuance of which is otherwise subject to the approval of the comptroller of the treasury;
- (2) “Indebtedness” means:
- (A) Any bond, note, loan agreement or any other evidence of a debt obligation in which a local government or local government instrumentality, either directly or indirectly, incurs a definite and absolute obligation to the payment of the principal of and interest on the debt obligation; and
- (B) Does not include bonds and loan agreements authorized by title 7, chapter 53;
- (3) “Local government” means, solely for the purposes of this section, any incorporated city or town, metropolitan government, county, or utility district; and
- (4)
- (A) “Substantially level or declining debt service” means an amortization schedule in which the aggregate amount of debt service calculated as principal plus interest that is payable in each year is not in excess of the lowest aggregate amount of debt service payable in any prior year by more than the greater of five percent (5%) or ten thousand dollars ($10,000);
- (B) For purposes of determining whether debt service is substantially level or declining in accordance with the preceding sentence, the first three (3) years of debt service do not need to be taken into account. For purposes of determining whether debt service is substantially level or declining on bonds issued with a variable interest rate, the average rate of interest at which fixed interest rate bonds of the same maturities would be sold should be estimated and the total principal amount should be amortized based upon such interest rate assumption.
- (b) For purposes of this section, principal of debt will be treated as being payable or amortized upon its stated maturity, upon any mandatory redemption date, and upon any date on which the holder of the debt has the option to require the debt to be prepaid, redeemed, or purchased, other than with the proceeds of a liquidity facility provided by a third party.
- (c) Solely for purposes of this section, a local government may account for the amortization of principal and the payment of debt service on:
- (1) A fiscal year basis;
- (2) A calendar year basis; or
- (3) An annual basis commencing on the date upon which debt is issued.
- (d) On and after July 1, 2014, if any local government or local government instrumentality proposes to issue any balloon indebtedness, then the local government or local government instrumentality shall first obtain approval from the comptroller of the treasury in accordance with subsection (e).
- (e) Prior to the adoption by the local government or local government instrumentality of any action authorizing the issuance of balloon indebtedness, the local government or local government instrumentality shall submit a plan of balloon indebtedness to the comptroller of the treasury or the comptroller's designee for approval. The comptroller of the treasury or the comptroller's designee may request any additional information as may be required to properly review the proposed plan of balloon indebtedness. The comptroller of the treasury or the comptroller's designee shall evaluate each plan of balloon indebtedness based on the plan's particular circumstances and shall approve the plan only if a determination is made that the repayment structure is in the public's interest.
- (f) The comptroller of the treasury or the comptroller's designee shall report the comptroller's approval or disapproval of the plan of balloon indebtedness to the governing body within fifteen (15) business days after receipt of the plan and all requested supplemental documentation. After receiving the approval of the comptroller of the treasury or the comptroller's designee of the plan of balloon indebtedness or after the expiration of fifteen (15) business days from the date the plan of balloon indebtedness is received by the comptroller of the treasury or the comptroller's designee and no disapproval having been reported by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the governing body may take such action with reference to the proposed plan of balloon indebtedness as it deems advisable in accordance with this part.
- (g) The state funding board is authorized to establish guidelines, rules, or regulations with respect to the comptroller of the treasury's approval of balloon indebtedness and may exempt certain classes or issues of indebtedness from such approval.
History (3)
- Acts 2014, ch. 766, § 5
- 2018, ch. 498, § 1
- T.C.A. § 9-21-134.
§ 9-21-134. Model finance transaction policies for use by public entities — Disclosure obligations regarding finance transactions. - (a) In addition to the definitions applicable generally to this chapter, the following definitions are applicable to this section only:
- (1) “Advisor” means a municipal advisor, financial advisor, swap advisor, or program administrator, with respect to a finance transaction, whether or not such title is used;
- (2) “Costs” related to a finance transaction may include, but are not limited to, fees and expenses of advisors, underwriters, placement agents, counterparties, bond and other counsel, paying agents, registrars, trustees, escrow agents, verification agents, credit enhancement and liquidity providers, remarketing and auction agents, rating agencies, publishing, and other similar fees and expenses, whether or not payable at issuance. “Cost” may include recurring and nonrecurring fees and expenses occurring during the life of the transaction, debt service payments, including interest, and any payments made to a counterparty;
- (3) “Event of default” means a default, event of acceleration, termination event, modification of terms, or other similar event under the terms of a financial obligation of a public entity, any of which reflect financial difficulties of the public entity;
- (4) “Finance transaction” means a transaction in which a public entity issues, incurs, executes, or assumes a financial obligation;
- (5) “Financial obligation” has the same meaning as is given to such term in 17 CFR 240.15c2-12 under the Securities and Exchange Act of 1934 or any successor rule;
- (6) “Public entity” means the state, a state agency, a local government, a local government instrumentality, or any other authority, board, district, instrumentality, or entity created by the state, a state agency, local government, a local government instrumentality, or combination thereof;
- (7) “Public finance professional” means an advisor, underwriter, placement agent, counterparty, bond counsel, issuer's counsel, or other person or entity advising the public entity with respect to a finance transaction or offering to provide professional services with respect to a finance transaction; and
- (8) “State funding board” means the state funding board, created pursuant to chapter 9 of this title.
- (b) The state funding board may develop model finance transaction policies for use by public entities, including any exemptions deemed necessary or appropriate from filing requirements.
- (c)
- (1) The board shall determine the information to be disclosed pursuant to this section, including:
- (A) A brief description of the finance transaction;
- (B) The issuance, continuing, and one-time costs of the finance transaction;
- (C) A brief description of any continuing disclosure obligations with respect to the finance transaction;
- (D) A copy of the offering document, if any; and
- (E) Such other information and in such manner as may be required by the board.
- (2) Not later than forty-five (45) days following the issuance, reissuance, incurrence, execution, or assumption of a finance transaction, the public entity shall submit, or cause to be submitted, the information pursuant to subdivision (c)(1) to the governing body of the public entity, with a copy to the comptroller of the treasury or the comptroller's designee. If an open meeting of the governing body is not scheduled within the forty-five-day period, then the public entity shall give a copy to each member of the body within such period and present the information in subdivision (c)(1) to the body at the next scheduled meeting.
- (3) The state funding board shall require public entities to timely comply with continuing disclosure obligations, if applicable, to disclose financial obligations and events of default on the Electronic Municipal Market Access (EMMA) website of the Municipal Securities Rulemaking Board (MSRB), and for those public entities which are not subject to such MSRB obligations, to disclose any event of default to the comptroller of the treasury or the comptroller's designee within ten (10) business days, in accordance with guidelines approved by the board.
- (d) Upon discovery by the public entity of a failure to comply with the requirements of this section, the public entity shall immediately notify the comptroller of the treasury or the comptroller's designee and make a late filing of such information to the EMMA website or the comptroller of the treasury, as applicable. In addition, upon discovery by the comptroller of the treasury or the comptroller's designee of an omission or error or filing failure, the comptroller of the treasury or the comptroller's designee shall notify the public entity of such noncompliance. The public entity shall submit the required information, along with an explanation for the noncompliance, within fifteen (15) days following its discovery or notice by the comptroller of the treasury or the comptroller's designee.
History (11)
- Acts 1989, ch. 402, § 1
- T.C.A., § 7-53-312
- Acts 1994, ch. 740, §§ 1, 2
- 1998, ch. 879, § 1
- 2005, ch. 392, § 1
- 2006, ch. 874, § 1
- 2010, ch. 868, § 43
- 2014, ch. 766, § 1
- 2019, ch. 6, §§ 1, 2
- T.C.A. § 9-21-151
- Acts 2021, ch. 128, § 8.
Part 2 General Obligation Bonds § 9-21-201. Authorization for the issuance of general obligation bonds. - (a)
- (1) Any local government is authorized to issue general obligation bonds under this part and part 1 of this chapter for a public works project.
- (2) “General obligation bonds” mean those bonds in which the local government incurs a definite and absolute obligation by pledging the full faith, credit and unlimited taxing power of the local government as to all taxable property in the local government or of a portion of the local government, if applicable, to the payment of the principal of and interest on such bonds.
- (b) The bonds may be sold in such blocks as the governing body may by resolution determine.
History (1)
- Acts 1986, ch. 770, § 2-1.
§ 9-21-202. Sale of general obligation bonds at below par value. - All general obligation bonds issued by any local government under the authority of this part and part 1 of this chapter shall be sold for not less than ninety-eight percent (98%) of par value and accrued interest as the governing body of the local government may direct. Nothing in this chapter shall be construed to prevent the sale of particular bonds constituting a part of a single issue or series of bonds at a price below that herein specified, as long as the total price paid by the purchaser for the entire issue or series of bonds offered for sale on any given date shall be not less than ninety-eight percent (98%) of par value of the entire issue or series of bonds and accrued interest; provided, that if any part of such issue or series of such general obligation bonds is to be sold at a zero (0) rate of interest or at an original issue discount, such bonds may be sold at not less than ninety-eight percent (98%) of the original reoffering price of such discount bonds and accrued interest.
History (1)
- Acts 1986, ch. 770, § 2-2.
§ 9-21-203. Sale of general obligation bonds — Notices. - Any local government proposing to sell general obligation bonds, under parts 1 and 2 of this chapter, is authorized to sell such bonds at a competitive public sale. The local government shall publish a notice of sale at least five (5) days prior to the date on which the bonds are to be sold, either in a financial newspaper having national circulation, or via an electronic communication system that is generally available to the financial community. The notice of sale shall set forth the time, date and place of sale, the maximum amount of bonds to be sold, the maximum interest rate, the maximum discount, if any, that will be permitted, in dollars or as a percentage of par value, and the basis upon which the bonds will be awarded. If the principal amount of general obligation bonds to be sold is not greater than five million dollars ($5,000,000), then the notice of sale may be published either as set forth in this section, or in a newspaper having general circulation in the local government.
History (3)
- Acts 1986, ch. 770, § 2-3
- 1995, ch. 67, § 1
- 2005, ch. 393, § 1.
§ 9-21-204. Sale of general obligation bonds to a state or federal agency. - If any general obligation bonds are to be sold pursuant to a commitment of a state or federal agency to purchase the same, such bonds may be sold at a private negotiated sale to the state or federal agency without the necessity of any public advertisement of the sale or of the approval of the comptroller of the treasury or the comptroller's designee.
History (3)
- Acts 1986, ch. 770, § 2-4
- 2005, ch. 393, § 3
- 2010, ch. 868, § 44.
§ 9-21-205. Initial resolution for general obligation bonds. - (a) Prior to the issuance of general obligation bonds pursuant to this part and part 1 of this chapter, the governing body of the local government shall adopt a resolution (herein referred to as the “initial resolution”) determining to issue the general obligation bonds. The resolution must state in substance:
- (1) The amount or maximum amount of general obligation bonds to be issued;
- (2) The public works project or projects for which the general obligation bonds are to be issued;
- (3) The rate or maximum rate of interest which the general obligation bonds are to bear; and
- (4) A brief concise statement that the general obligation bonds will be payable:
- (A) From ad valorem taxes levied upon all the taxable property in the local government or a portion of the local government, if applicable, and, if the latter, then a brief statement or description of such portion of the local government;
- (B) From revenues and, in the event of a deficiency in such revenues, from taxes; or
- (C) From taxes, and additionally secured by a pledge of revenues.
- (b) Notwithstanding subsection (a), the governing body of the local government is not required to adopt an initial resolution for general obligation bonds if the public works project for which the bonds are being issued is a mandated project, and the governing body of a county is not required to adopt an initial resolution for general obligation bonds if the public works project for which the bonds are being issued is a school project.
History (2)
- Acts 1986, ch. 770, § 2-5
- 2021, ch. 128, § 9.
§ 9-21-206. Publication of notice. - The initial resolution, together with a notice in substantially the following form, shall be published in full once in a newspaper of general circulation in the local government:
-
History (2)
- Acts 1986, ch. 770, § 2-6
- 1993, ch. 514, § 1.
§ 9-21-207. When an election is necessary. - (a) No election upon a proposition for the issuance of general obligation bonds shall be necessary:
- (1) If the general obligation bonds are to be issued for water works or sewerage purposes and if the governing body, by a vote of three-fourths (¾) of its members then in office, determine and declare in the initial resolution that an emergency requires the issuance of such bonds, which determination and declaration shall be conclusive; or
- (2) In any case where a petition has not been filed within the time limit specified in § 9-21-206.
- (b) If a petition protesting the issuance of the general obligation bonds signed by at least ten percent (10%) of the registered voters of the local government, determined as of the date of publication of the notice required in § 9-21-206, or that portion, if applicable, which is liable to be taxed therefor, is filed with the official charged with maintaining the records of the local government within twenty (20) days from the publication of the initial resolution, then no general obligation bonds shall be issued without the assent of the majority of the registered voters in the local government or a portion of the local government, if applicable, voting upon a proposition for the issuance of the general obligation bonds in the manner provided by §§ 9-21-209 and 9-21-210. The county election commission shall certify to the local government within fifteen (15) days of receipt by the county election commission of any petition filed hereunder, the total number of registered voters as of the date of publication of the notice and the total number of valid signatures of registered voters signing the petition. Registered voters shall not withdraw their signatures from a petition after signing the petition.
History (2)
- Acts 1986, ch. 770, § 2-7
- 1993, ch. 514, § 2.
§ 9-21-208. Voluntary election. - If the governing body of the local government makes a decision to issue general obligation bonds for a public works project, and concurrently decides to hold an election for ascertaining the will of the electorate, then it need not adopt and publish an initial resolution and notice, but it shall adopt an election resolution in accordance with § 9-21-209 and it shall hold an election in accordance with § 9-21-210. A governing body may also hold an election for ascertaining the will of the electorate after adoption and publication of an initial resolution, even if no petition has been filed.
History (1)
- Acts 1986, ch. 770, § 2-8.
§ 9-21-209. Election resolution. - If it is necessary to hold an election on the proposition to issue general obligation bonds or if the governing body decides to hold an election to ascertain the will of the electorate even if no petition has been filed, then the election shall be called by the governing body of the local government. Such election shall be held as an election on a question by the county election commission pursuant to § 2-3-204. The governing body shall adopt a resolution (herein called the “election resolution”) which shall supersede by its adoption, and immediately upon its adoption, the initial resolution, if any. The election resolution shall state in substance:
- (1) The amount or maximum amount of general obligation bonds to be issued;
- (2) The public works project or projects for which the general obligation bonds are to be issued;
- (3) The rate or maximum rate of interest which the general obligation bonds are to bear;
- (4) A brief concise statement that the general obligation bonds will be payable:
- (A) From ad valorem taxes levied upon all the taxable property in the local government or a portion of the local government, if applicable, and if the latter, then a brief statement or description of such portion of the local government;
- (B) From revenues and, in the event of a deficiency in such revenues, from taxes; or
- (C) From taxes, and additionally secured by a pledge of revenues;
- (5) A proposition to issue the general obligation bonds as it is to appear on the ballot, including the maximum amount of such bonds to be authorized and the public works project or projects for which such bonds are to be issued; and
- (6) That the county election commission is to hold the election.
History (2)
- Acts 1986, ch. 770, § 2-9
- 1998, ch. 618, § 1.
§ 9-21-210. Eligibility to vote. - (a) For general obligation bonds issued by a local government which are payable from taxes levied upon all taxable property in the local government, any registered voter in the local government may vote in the election.
- (b) For general obligation bonds issued by a local government which are payable from taxes levied on only a portion of the local government, any registered voter in that portion of the local government may vote in the election.
- (c) Upon receipt of the statement of the votes in the election from the county election commission, the governing body at or before its next regular meeting shall again canvass the returns and determine and declare the results of the election.
History (1)
- Acts 1986, ch. 770, § 2-10.
§ 9-21-211. Limitation on election contests. - No suit, action or other proceeding contesting the validity of the bond election shall be entertained in any of the courts of this state unless such suit, action or other proceeding is commenced within ten (10) days from the date of canvassing of the returns and the determination and declaration of the results thereof by the governing body, whichever is later.
History (1)
- Acts 1986, ch. 770, § 2-11.
§ 9-21-212. Waiting period for new election. - If an election on the proposition to issue general obligation bonds is had and a majority of the registered voters voting on the proposition do not vote in favor of the issuance of the general obligation bonds in question, then the proposition shall not again be the subject of an initial resolution until three (3) months have expired from the date of such election.
History (1)
- Acts 1986, ch. 770, § 2-12.
§ 9-21-213. Terms of general obligation bonds — Citizens' bonds — Interest rate agreements. - (a) The general obligation bonds may be sold in one (1) or more series, may bear such date or dates, shall mature at such time or times, not exceeding forty (40) years from their respective dates, may bear interest at a zero (0) rate or at such other rate or rates (which may vary from time to time), may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may carry such registration and conversion privileges, may be executed in such manner, may be payable in such medium of payment at such place or places, may be subject to such terms of redemption, with or without premium, and may provide for the replacement of mutilated, destroyed, stolen or lost bonds, all as may be provided by resolution of the governing body of the local government. The term of the general obligation bonds shall not exceed the reasonably expected economic life of the project being financed with such bonds, as stated in the resolution authorizing the general obligation bonds. An erroneous estimate of the reasonably expected economic life of the project shall in no way affect the validity of such bonds.
- (b) A general obligation bond issue may be delivered as an installment bond payable as to principal and interest in equal or approximately equal installments for the term of the bond issue in accordance with the resolution authorizing the bond issue. The authorizing resolution shall stipulate the maximum annual principal and interest requirements during the full term of the installment bond issue.
- (c)
- (1) Notwithstanding any other provision of this chapter to the contrary, whenever the governing body of the local government is authorized to issue and sell general obligation bonds, it may by resolution authorize the issuance and sale of no more than three million dollars ($3,000,000) per issue of general obligation bonds to be known as citizens bonds; provided, that the aggregate amount of citizens bonds outstanding cannot exceed twenty percent (20%) of the aggregate outstanding debt of the local government. Citizens bonds shall mature at such time or times not exceeding twenty (20) years from their respective dates. The governing body of the local government must disclose to each purchaser of a citizens bond the interest rate of return on a fully taxable investment which would be equivalent to the tax-free yield on the citizens bond assuming the highest marginal rate of income tax under the Internal Revenue Code of 1986 (26 U.S.C.), as amended.
- (2) Upon the adoption by the governing body of the initial resolution authorizing the issuance of the citizens bonds, the governing body shall submit for review and approval to the comptroller of the treasury or the comptroller's designee the proposed method of pricing and the disclosure documents as required by this section. The comptroller of the treasury or the comptroller's designee shall approve or disapprove the sale of citizens bonds in writing within fifteen (15) days from the date of receipt of the initial resolution and documentation required by this section or otherwise deemed appropriate. Approved citizens bonds may be sold at either a competitive or negotiated sale; however, no one (1) individual or entity may purchase twenty-five percent (25%) or more of the original offering of the citizens bonds. Prior to the negotiated sale of citizens bonds and as a factor in the comptroller of the treasury's or the comptroller's designee's approval of a negotiated sale of citizens bonds, the local government shall submit to the comptroller of the treasury or the comptroller's designee certificates from two (2) disinterested bondhouses indicating the approximate rates of interest which, in the opinions of the bondhouses, would be bid if the citizens bonds were to be sold at a competitive sale.
- (3) The local government shall make provision in the resolution for the retirement of a portion of the citizens bonds equal to not less than one-twentieth (⁄) of the citizens bonds or such other provision to provide funds for retirement. In approving any issue of citizens bonds, the comptroller of the treasury or the comptroller's designee may waive the requirement for periodic retirement. No local elected official of a municipality or county may purchase the bonds authorized by this subsection (c).
- (d) With respect to all or any portion of any issue of general obligation bonds issued or anticipated to be issued hereunder, at any time during the term of the general obligation bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized herein are in compliance with the guidelines, rules or regulations as set forth in § 9-21-130, a local government by resolution may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the local government may determine, including, without limitation, provisions permitting the local government to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement.
History (5)
- Acts 1986, ch. 770, § 2-13
- 1987, ch. 77, § 16
- 1987, ch. 290, § 1
- 1999, ch. 432, § 3
- 2010, ch. 868, §§ 45, 46.
§ 9-21-214. Powers to secure and to covenant as to general obligation bonds. - In order to secure the payment of the principal of and interest on general obligation bonds issued pursuant to this part and part 1 of this chapter, or in connection with such bonds, any local government has the power as to such bonds to:
- (1) Pledge the full faith, credit, and unlimited taxing power of the local government as to all taxable property in the local government or a portion of the local government, if applicable, to the punctual payment of the principal of and interest on such bonds;
- (2) Pledge all or any part of the fees, rents, tolls, interest earnings, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the punctual payment of the principal of and interest on bonds issued to finance such public works project or projects, or any other public works project or projects, and to covenant against thereafter pledging any such fees, rents, tolls, interest earnings or charges to any other bonds or any other obligations of the local government;
- (3) Provide for the terms, forms, registration, exchange, execution and authentication of the general obligation bonds in a manner not inconsistent with parts 1 and 2 of this chapter;
- (4) Covenant as to the use and disposition of the proceeds from the sale of the general obligation bonds in a manner not inconsistent with parts 1 and 2 of this chapter;
- (5) Covenant as to the fees, rents or tolls to be charged in connection with any public works project or projects and as to the use and disposition to be made thereof, and to enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to a public works project which is to be owned or leased by a local government or local government instrumentality;
- (6) Covenant as to the operation and maintenance of the public works project;
- (7) Covenant to set aside or pay over reserves and sinking funds for the general obligation bonds and as to the disposition thereof;
- (8) Redeem the general obligation bonds, and covenant for their redemption and to provide the terms and conditions thereof;
- (9) Covenant as to its books of account, as to the inspection and audit thereof and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105. All audits shall be performed in accordance with the standards established by the comptroller of the treasury;
- (10) Covenant and prescribe as to what occurrences shall constitute “events of default” and the terms and conditions upon which any or all of the general obligation bonds shall become or may be declared due before maturity and to the terms and conditions upon which such declaration and its consequences may be waived;
- (11) Covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation;
- (12) Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties;
- (13) Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the general obligation bonds, or in the discretion of the governing body, to make the general obligation bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the general obligation bonds and for their security that may be consistent with the Constitution of Tennessee;
- (14) Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the acquisition or construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of the taxing power and in addition to a pledge of rates, fees, rents and charges received or receivable from any sewer system then existing or to be constructed;
- (15) Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which in its discretion, it may install and operate and maintain beside specified portions of the public streets;
- (16) Covenant that the costs of operating and maintaining parking facilities payable, in part, from the revenues of such parking facilities shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations; and
- (17) Covenant and provide for the discharge and satisfaction and defeasance of all or any part of the general obligation bonds and the indebtedness evidenced thereby.
History (1)
- Acts 1986, ch. 770, § 2-14.
§ 9-21-215. Tax resolution — Levy for payment of general obligation bonds. - (a) At any time before delivering any general obligation bonds to be issued pursuant to this part and part 1 of this chapter, the governing body shall adopt a resolution (herein called the “tax resolution”) which shall recite in substance that adequate provision will be made for raising annually by tax upon the taxable property in the local government or a portion of the local government, if applicable, of a sum sufficient to pay the principal of and interest on the general obligation bonds as the same shall become due.
- (b) A tax sufficient to pay when due the principal of and interest on the general obligation bonds shall be levied annually and assessed, collected and paid, in like manner with the other taxes of the local government and shall be in addition to all other taxes authorized or limited by law. It is the duty of the governing body to include in the annual levy a tax sufficient to pay the principal of and interest on the general obligation bonds as the same become due; provided, that if the bonds are payable from taxes and additionally secured by a pledge of revenues, and if the tax resolution shall so provide, then the tax to be levied and assessed by the governing body may be reduced by such amount and under such conditions as may be determined in the tax resolution. When any part of the principal of or interest on any general obligation bonds issued by any local government pursuant to this part and part 1 of this chapter, not payable exclusively from the revenues of a public works project, are not paid when due, there shall be levied and assessed by the governing body and collected by the proper collecting officers at the first assessment, levy and collection of taxes in the local government after such omission or failure, a tax sufficient to pay the same.
- (c) If the general obligation bonds are issued to finance the cost of a public works project pursuant to a plan of improvement for a central business improvement district created pursuant to the Central Business Improvement District Act of 1971, compiled in title 7, chapter 84, the local government may, nevertheless, proceed to levy and collect assessments pursuant to the Central Business Improvement District Act; and the proceeds of such assessments when collected, other than amounts required to pay the principal of and interest on the bonds, shall be paid into the treasury of the local government and used to reimburse the treasury for any amounts paid out of the treasury to pay the principal of and interest on such bonds; and such moneys reimbursed to the treasury may be used, under the direction of the governing body of the local government, for any lawful corporate purpose for which taxes may be legally levied and collected.
History (1)
- Acts 1986, ch. 770, § 2-15.
§ 9-21-216. Remedies of general obligation bondholders. - Any holder of general obligation bonds issued pursuant to parts 1 and 2 of this chapter has the right, in addition to all other rights:
- (1) By mandamus or other suit, action or proceeding in any court of competent jurisdiction to enforce such holder's rights against the local government, the governing body of the local government and any officer, agent, or employee of the local government, including, but not limited to, the right to require the local government, the governing body and any proper officer, agent or employee of the local government to assess, levy and collect taxes, and to fix and collect fees, rents, tolls, or other charges adequate to carry out any agreement as to, or pledge of, such taxes, fees, rents, tolls, or other charges, and to require the local government, the governing body of the local government and any officer, agent or employee of the local government to carry out any other covenants and agreements and to perform its and their duties under this chapter. No holder or holders of bonds payable exclusively from the revenues of a public works project shall ever have the right to compel the levying and collection of taxes to pay such bonds and the interest thereon; and
- (2) By action or suit in equity, to enjoin any acts or things which may be unlawful or a violation of the rights of such holder or holders of general obligation bonds.
History (1)
- Acts 1986, ch. 770, § 2-16.
Part 3 Revenue Bonds § 9-21-301. Authorization for the issuance of revenue bonds. - (a) Any local government is authorized to issue revenue bonds under this part and part 1 of this chapter for a public works project. “Revenue bonds” are defined as those bonds which are payable exclusively from the revenues of one (1) or more public works projects.
- (b) The bonds may be sold in such blocks as the governing body may by resolution determine.
History (1)
- Acts 1986, ch. 770, § 3-1.
§ 9-21-302. Sale of revenue bonds — Agreements regarding dates of delivery. - (a) Any local government proposing to sell revenue bonds under this part and part 1 of this chapter is authorized to sell such bonds either at a competitive public sale or at a private negotiated sale as the governing body of the local government may direct.
- (b) The governing body of a local government may enter into an agreement to sell its revenue bonds under this part providing for delivery of its bonds on a date greater than ninety (90) days and not greater than five (5) years (or such greater period of time if approved by the comptroller of the treasury or the comptroller's designee) from the date of execution of such agreement only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that such an agreement or contract of a local government to sell its revenue bonds as authorized in this subsection (b) is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with § 9-21-130. Agreements to sell revenue bonds for delivery ninety (90) days or less from the date of execution of the agreement to sell the revenue bonds do not require a report of the comptroller of the treasury or the comptroller's designee.
History (2)
- Acts 1986, ch. 770, § 3-2
- 1999, ch. 432, § 4.
§ 9-21-303. Sale of revenue bonds at below par value. - All revenue bonds issued by any local government under the authority of this part and part 1 of this chapter shall be sold for not less than ninety-seven percent (97%) of par value and accrued interest as the governing body of the local government may direct. Nothing in this chapter shall be construed to prevent the sale of particular bonds constituting a part of a single issue or series of bonds at a price below that herein specified, as long as the total price paid by the purchaser for the entire issue or series of bonds offered for sale on any given date is not less than ninety-seven percent (97%) of the par value of the entire issue or series of bonds and accrued interest; provided, that if any part of such issue or series of such revenue bonds is to be sold at a zero (0) rate of interest or at an original issue discount, such bonds may be sold at less than ninety-seven percent (97%) of the original reoffering price of such discount bonds and accrued interest.
History (1)
- Acts 1986, ch. 770, § 3-3.
§ 9-21-304. Initial revenue bond resolution. - (a) Prior to the issuance of any revenue bonds pursuant to this part and part 1 of this chapter, the governing body of the local government shall adopt a resolution (herein referred to as the “initial resolution”) determining to issue the revenue bonds.
- (b) The initial resolution shall state in substance:
- (1) The amount or maximum amount of revenue bonds to be issued;
- (2) The public works project or projects for which the revenue bonds are to be issued, but if the bonds are to be issued for more than one (1) project, the initial resolution need not state the amount which will be used for each project;
- (3) The rate or maximum rate of interest which the revenue bonds are to bear; and
- (4) A brief concise statement that the revenue bonds will be payable exclusively from revenues of the public works project or projects.
- (c) The initial resolution shall be published in full once in a newspaper of general circulation in the local government.
History (2)
- Acts 1986, ch. 770, § 3-4
- 1988, ch. 750, § 43.
§ 9-21-305. Terms of revenue bonds. - (a) The revenue bonds may be sold in one (1) or more series, may bear such date or dates, shall mature at such time or times, not exceeding forty (40) years from their respective dates, may bear interest at a zero (0) rate or at such other rate or rates (which may vary from time to time), may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may carry such registration and conversion privileges, may be executed in such manner, may be payable in such medium of payment at such place or places, may be subject to such terms of redemption, with or without premium, and may provide for the replacement of mutilated, destroyed, stolen, or lost bonds, all as may be provided by resolution of the governing body of the local government. The term of the revenue bonds shall not exceed the reasonably expected economic life of the project being financed with such bonds, as stated in the resolution authorizing the revenue bonds. An erroneous estimate of the reasonably expected economic life of the project shall in no way affect the validity of such bonds.
- (b) A revenue bond issue may be delivered as an installment bond payable as to principal and interest in equal or approximately equal installments for the term of the bond issue in accordance with the resolution authorizing the bond issue. The authorizing resolution shall stipulate the annual principal and interest requirements during the full term of the installment bond issue.
- (c) With respect to all or any portion of any issue of revenue bonds issued or anticipated to be issued hereunder, at any time during the term of the revenue bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized herein are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in § 9-21-130, a local government by resolution may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the local government may determine, including, without limitation, provisions permitting the local government to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement.
History (2)
- Acts 1986, ch. 770, § 3-5
- 1999, ch. 432, § 5.
§ 9-21-306. Powers to secure and to covenant as to revenue bonds. - (a) In order to secure the payment of the principal of and interest on revenue bonds issued pursuant to this part and part 1 of this chapter, and the payment of the obligations of any local government under any interest rate agreement authorized by this part, including its obligation for termination or other non-periodic payments, or in connection with such bonds or interest rate agreements, any local government has the power as to such bonds or interest rate agreements to:
- (1) Pledge all or any part of the fees, rents, tolls, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the punctual payment of the principal of and interest on bonds issued to finance such public works project or projects, or any other public works project or projects, and the payment of the obligations of any local government under any interest rate agreement authorized by this part, and covenant against thereafter pledging any such fees, rents, tolls, or charges to any other bonds or any other obligations of the local government;
- (2) Covenant as to the fees, rents or tolls to be charged in connection with any public works project or projects and as to the use and disposition to be made thereof, and enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to a public works project which is to be owned or leased by a local government or local government instrumentality;
- (3) Provide for the terms, forms, registration, exchange, execution and authentication of the revenue bonds in a manner not inconsistent with this part and part 1 of this chapter;
- (4) Covenant as to the use and disposition of the proceeds from the sale of the revenue bonds in a manner not inconsistent with this part and part 1 of this chapter;
- (5) Covenant as to limitations on the issuance of additional obligations to finance the improving of the public works project and on the lien thereof;
- (6) Covenant as to the amount and kind of insurance to be maintained on the public works project, and the use and disposition of insurance moneys;
- (7) Covenant as to the transfer from the general funds of the local government to the account or accounts of the public works project, an amount equal to the cost of furnishing the local government or any of its departments, boards or agencies with the services, facilities, and commodities of the public works project;
- (8) Covenant as to the operation and maintenance of the public works project;
- (9) Covenant to set aside or pay over reserves and sinking funds for the revenue bonds and as to the disposition thereof;
- (10) Redeem the revenue bonds, and covenant for their redemption and to provide the terms and conditions thereof;
- (11) Covenant as to its books of account, as to the inspection and audit thereof, and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105. All audits shall be performed in accordance with the standards established by the comptroller of the treasury;
- (12) Covenant and prescribe as to what occurrences shall constitute “events of default” and the terms and conditions upon which any or all of the revenue bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;
- (13) Covenant as to the rights, remedies, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation;
- (14) Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties;
- (15) Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the revenue bonds, or in the discretion of the governing body, to make the revenue bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the revenue bonds and for their security that may be consistent with the Constitution of Tennessee;
- (16) Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of rates, fees, rents and charges received or receivable from any sewer system then existing or to be constructed;
- (17) Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which in its discretion, it may install and operate and maintain beside specified portions of the public streets;
- (18) Covenant that the costs of operating and maintaining parking facilities payable from the revenues of such parking facilities shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations;
- (19) Vest in a trustee or trustees powers and duties, including the right to enforce any covenants made to secure, or to pay, the revenue bonds, limitations on liabilities, and the terms and conditions upon which the holders of the revenue bonds or any portion or percentage of them may enforce any covenants thereunder or duties imposed thereby;
- (20) Prescribe a procedure by which the terms of any resolution authorizing revenue bonds, or any other contract with bondholders, including, but not limited to, an indenture of trust or similar instrument, may be amended or abrogated and as to the amount of revenue bonds the holders of which must consent thereto and the manner in which such consent must be given; and
- (21) Covenant and provide for the discharge and satisfaction and defeasance of all or any part of revenue bonds and the indebtedness evidenced thereby.
- (b) This section shall apply to any governmental entity created by private act that has the power to issue revenue bonds and to enter into interest rate agreement of the type authorized by this part.
History (2)
- Acts 1986, ch. 770, § 3-6
- 2004, ch. 589, § 1.
§ 9-21-307. Revenue bonds of the same issue shall be equally and ratably secured. - All revenue bonds of the same issue shall be equally and ratably secured, without priority by reason of number, date of bonds, date of sale, date of execution, or of delivery, by a lien upon the revenues of the public works project or projects, the revenues of which are pledged to the payment of such bonds, in accordance with this part and the resolution authorizing the issuance of the revenue bonds.
History (1)
- Acts 1986, ch. 770, § 3-7.
§ 9-21-308. Rates, fees or charges — Collection, revision and disposition. - (a) The governing body of a local government issuing revenue bonds pursuant to this part and part 1 of this chapter shall prescribe and collect reasonable rates, fees or charges for the services, facilities and commodities of the public works project or projects, and shall revise such rates, fees, or charges from time to time whenever necessary so that the public works project or projects shall be and always remain self-supporting. The rates, fees or charges prescribed shall be at least sufficient to produce revenue to:
- (1) Provide for all expenses of operation and maintenance of the public works project or projects, including reasonable reserves therefor; and
- (2) Pay when due all bonds and notes and interest thereon, for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reasonable reserves therefor.
- (b) If the governing body of the local government shall by resolution so request, the revenues produced from the rates, fees or charges prescribed may, after providing for payments referred to in subsection (a), be applied to payments to the local government in lieu of ad valorem taxes on the property of the public works project or projects not to exceed the amount of taxes payable on privately owned property of a similar nature.
- (c) Rates, fees and charges shall be made for any service, facility, and commodity of any public works project to a local government or to any department or works thereof at the rate applicable to other customers taking service under similar conditions. Revenues derived from such service shall be treated as all other revenues.
- (d) Any surplus thereafter remaining, after establishment of proper reserves, if any, may be applied to the acquisition, extension, and/or improvement of the public works project or projects or may be applied to the reduction of rates in the case of a public works project that provides water, sewer, gas, or electric services.
- (e) Notwithstanding any other law to the contrary, as a matter of public policy, public works projects financed under this chapter shall be operated on sound business principles as self-sufficient entities. User charges, rates and fees shall reflect the actual cost of providing the services rendered. Public works shall not operate for gain or profit or as a source of revenue to a government entity, but shall operate for the use and benefit of the customers served by such public works and for the improvement of the health and safety of the inhabitants of the area served. Nothing herein shall preclude a municipal utility system from operating water and sewer systems as individual or combined entities. Nothing herein shall preclude a municipal utility system from operating a public works system as a special revenue fund when the governing body of the municipality determines that it is in the best interest of the customers of the public works system and the citizens of the municipality. All water systems and wastewater facilities must utilize an enterprise fund for accounting and reporting its operations. Any water system or wastewater facility currently not operating as an enterprise fund must be doing so by July 1, 2016. To the extent of any conflict between this section and the Wastewater Facilities Act of 1987, compiled in title 68, chapter 221, part 10, the latter statute shall control.
- (f) To the extent of any conflict between this section and § 7-39-404, § 7-34-115, or title 7, chapter 52, part 3, the latter statutes shall control.
- (g) If a municipality violates this section, it must repay any funds illegally transferred. If the municipality does not have sufficient funds to repay any funds illegally transferred, the municipality is required to submit a plan covering a period not to exceed five (5) years in which to repay the funds. The plan shall be submitted to and approved by the comptroller of the treasury or the comptroller's designee. Upon discovery of such violation through an audit, any city official in violation of this section is subject to ouster under title 8, chapter 47.
History (6)
- Acts 1986, ch. 770, § 3-8
- 1987, ch. 77, § 5
- 1988, ch. 750, § 45
- 1993, ch. 509, §§ 2-4
- 2010, ch. 868, § 47
- 2014, ch. 628, §§ 11, 12.
§ 9-21-309. Recourse restricted to revenues. - (a) No recourse shall be had for the payment of the revenue bonds, or interest thereon, or any part thereof, against the general funds of any local government, nor shall the full faith and credit or taxing power of any local government be deemed to be pledged to the payment of the revenue bonds.
- (b) The revenue bonds, and interest thereon, shall not be a debt of the local government, nor a charge, lien or encumbrance, legal or equitable, upon any property of the local government or upon any income, receipts or revenues of the local government other than the revenues that shall have been pledged to the payment of the revenue bonds. Every revenue bond shall recite in substance that the bond, including interest thereon, is payable solely from the revenues pledged to the payment thereof and that the local government is under no obligation to pay the same, except from those revenues.
History (1)
- Acts 1986, ch. 770, § 3-9.
§ 9-21-310. Remedies of revenue bondholders. - Subject to any contractual limitations binding upon the holders of any issue of revenue bonds, or trustee therefor, including, but not limited to, the restriction of the exercise of any remedy to a specified proportion or percentage of such holders, any holder of revenue bonds, or trustee therefor, shall have the right and power, for the equal benefit and protection of all holders of revenue bonds similarly situated and, in addition to all other rights:
- (1) By mandamus or other suit, action or proceeding at law or in equity, to enforce such rights against the local government and its governing body and any of its officers, agents and employees and to require and compel the local government or the governing body or its officers, agents or employees to perform and carry out its and their duties and obligations under this part and part 1 of this chapter and its and their covenants and agreements with revenue bondholders;
- (2) By action or suit in equity, to require the local government and the governing body thereof to account as if they were the trustee of an express trust;
- (3) By action or by suit in equity, to enjoin any acts or things which may be unlawful or in violation of the rights of the revenue bondholders; and
- (4) To bring suit upon the revenue bonds.
History (1)
- Acts 1986, ch. 770, § 3-10.
§ 9-21-311. Appointment of receiver on default. - (a) In the event that the local government shall default in the payment of the principal of or interest on any of the revenue bonds after the same shall become due, whether at maturity or upon call for redemption, and the default shall continue for a period of thirty (30) days, or in the event that the local government or the governing body or its officers, agents or employees shall fail or refuse to comply with this chapter or shall default in any agreement made with the holders of the revenue bonds, then any holder of revenue bonds, or trustee therefor, shall have the right to file a petition in the nature of a general creditor's bill in the chancery court of the county in which the public works project is situated, or if the public works project is situated in more than one (1) county, in the chancery court of any county in which any portion of the public works project is situated, or in any court of competent jurisdiction, for the appointment of a receiver of the public works project. The petition may be filed whether or not all the revenue bonds have been declared due and payable and whether or not the holder or holders or trustee therefor is seeking or has sought to enforce any other right, or exercise any remedy in connection with the revenue bonds.
- (b) Upon application, the chancery court may appoint a receiver of the public works project. The chancery court shall appoint a receiver of the public works project if the application is made by the holders of twenty-five percent (25%) in principal amount of the revenue bonds then outstanding or by any trustee for holders of the revenue bonds in that principal amount.
History (1)
- Acts 1986, ch. 770, § 3-11.
§ 9-21-312. Judicial supervision of receiver. - The receiver shall, in the performance of the powers conferred upon such receiver, act under the direction and supervision of the court making the appointment, and shall at all times be subject to the orders and decrees of the court, and may be removed by the court. Nothing contained in this chapter shall limit or restrict the jurisdiction of the court to enter such other and further orders and decrees as the court may deem necessary or appropriate for the exercise by the receiver of any functions specifically set forth in this part.
History (1)
- Acts 1986, ch. 770, § 3-12.
§ 9-21-313. Duties of receiver. - It is the duty of a receiver to:
- (1) Immediately, either directly or through agents and attorneys, enter and take possession of each and every part of the public works project;
- (2) Have, hold, use, operate, manage and control the public works project in the name of the local government or otherwise, as the receiver may deem best;
- (3) Exercise all the rights and powers of the local government with respect to the public works project which the local government itself might exercise;
- (4) Maintain, restore, insure and keep insured the public works project and from time to time shall make all necessary or proper repairs as the receiver may deem expedient;
- (5) Establish, levy, maintain and collect such fees, tolls, rentals, and other charges in connection with the public works project as the receiver may, subject to approval of the court, deem necessary or proper and reasonable; and
- (6) Deposit the revenues in a separate account and apply the revenues so collected and received in such manner as the court shall direct.
History (1)
- Acts 1986, ch. 770, § 3-13.
§ 9-21-314. Sale of assets by receiver prohibited. - Notwithstanding § 9-21-313, the receiver shall have no power to sell, assign, mortgage or otherwise dispose of any assets of whatever kind or character belonging to the local government or any local government instrumentality and useful for the public works project. The authority of any receiver shall be limited to the operation and maintenance of the public works project, and no court shall have jurisdiction to enter any order or decree requiring or permitting the receiver to sell, mortgage, or otherwise dispose of any such assets.
History (1)
- Acts 1986, ch. 770, § 3-14.
§ 9-21-315. Surrender of possession by receiver. - Whenever all that is due upon the revenue bonds, and interest thereon, and upon any other obligations, and interest thereon, having a charge, lien, or encumbrance on the revenues of the public works project and under any of the terms of any covenants or agreements with bondholders shall have been paid or deposited as provided herein, and all defaults shall have been cured and made good, the court may in its discretion, and after such notice and hearing as it deems reasonable and proper, direct the receiver to surrender possession of the public works project to the local government. Upon any subsequent default, the holders of the revenue bonds shall have the same right to secure the appointment of a receiver as provided in this part.
History (1)
- Acts 1986, ch. 770, § 3-15.
§ 9-21-316. Remedies cumulative — Effect of abandonment or nonexercise of right or remedy. - No remedy conferred by this part upon any holder of revenue bonds, or any trustee therefor, is intended to be exclusive of any other remedy, but each remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by this chapter or by any other law. No waiver of any default or breach of duty or contract, whether by any holder of bonds, or any trustee therefor, shall extend to or shall affect any subsequent default or breach of duty or contract or shall impair any rights or remedies thereon. No delay or omission of any revenue bondholder or any trustee therefor to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default. Every substantive right and every remedy, conferred upon the holders of revenue bonds, may be enforced and exercised from time to time and as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and then discontinued or abandoned, or shall be determined adversely to the holder of the revenue bonds, or any trustee therefor, then and in every such case the local government and such holder, or such trustee, shall be restored to their former positions and rights and remedies as if no such suit, action or proceeding had been brought or taken. Nothing herein shall be construed as denying to any such suit or decree rendered therein such force as it would otherwise have by virtue of the legal doctrine of res judicata.
History (1)
- Acts 1986, ch. 770, § 3-16.
Part 4 General Provisions Governing the Issuance of All Notes by Local Governments § 9-21-401. Applicability. - The terms of this part and part 1 of this chapter shall be applicable to the authorization and issuance by any local government of debt under this chapter.
History (2)
- Acts 1986, ch. 770, § 4-1
- 2014, ch. 766, § 2.
§ 9-21-402. Notes issued to finance industrial parks. - (a) A local government which intends to issue bond anticipation notes, capital outlay notes or grant anticipation notes to finance an industrial park shall first comply with title 13, chapter 16.
- (b) A local government which intends to issue bond anticipation notes, capital outlay notes or grant anticipation notes to finance a business park shall first comply with the requirements outlined in § 9-21-105(21)(B)(i).
- (c) Notwithstanding subsections (a) and (b), a certificate of public purpose and necessity shall not be required to finance an industrial park or a business park in any local government with a population of not less than three hundred thousand (300,000), according to the 2000 federal census or any subsequent federal census. The total pledge of full faith and credit of any such local government related to the project shall not exceed ten percent (10%) of the total assessed valuation of any property in the local government, ascertained by the last completed assessment at the time of issuance of the obligations. In any resolution pledging the full faith and credit and unlimited taxing power of any such local government to secure any obligations related to the project, the governing body of the local government shall state that the project being considered is well conceived, has a reasonable prospect for success, will provide proper economic development and employment, and will not likely become a burden on the taxpayers of the local government.
History (3)
- Acts 1986, ch. 770, § 4-2
- 1998, ch. 728, § 2
- 2006, ch. 770, § 2.
§ 9-21-403. Annual budget — Biennial budget — Resolution or budget ordinance — Balanced budget. - (a)
- (1) In order for the current available funding of a local government to be sufficient to meet current expenditures, an annual budget must be required of the local government by the comptroller of the treasury or the comptroller's designee. The annual budget must be on the same basis of accounting as required by generally accepted accounting principles and prepared in a form consistent with accepted governmental standards and as approved by the comptroller of the treasury or the comptroller's designee. The comptroller of the treasury shall provide guidance to the form of the budget, including supplemental schedules, as necessary, to demonstrate local governments have adequate cash to meet its current obligations, including principal and interest, as applicable.
- (2)
- (A) Notwithstanding subdivision (a)(1), the comptroller of the treasury may authorize a municipality to submit a biennial budget if the comptroller of the treasury or the comptroller's designee determines that the municipality operates with sufficient financial resources to more than adequately service its issued debt. In such case, the comptroller of the treasury or the comptroller's designee may approve the municipality for a biennial budget as authorized by § 4-3-305.
- (B) The comptroller of the treasury or the comptroller's designee may revoke the authority of a municipality to submit a biennial budget in its discretion at any time and for any reason. If a municipality utilizes short-term financing to meet operating expenses, then the authority to submit a biennial budget shall be automatically revoked.
- (C) A municipality that operates under a biennial budget shall submit any budget amendments adopted by the municipality and such reports as may be required to the comptroller of the treasury or the comptroller's designee.
- (3) As used in subdivision (a)(2), “biennial budget” means the adoption of two (2) annual budgets every two (2) years.
- (b) After receiving the annual budget estimate, the governing body shall prepare an appropriation resolution or budget ordinance, consistent with its form of government, using the budget estimate as a basis, but appropriating such sums as the governing body may deem proper for current operating expenses, whether greater or less than the budget estimate set forth. However, an appropriation recommended by the budget estimate for interest on the indebtedness of the local government, for sinking funds, and for principal of debt maturing during the fiscal year shall not be reduced below scheduled requirements by the governing body. The taxes levied for such appropriation may be over and above all other taxes authorized or limited by law. Immediately after the passage of the appropriation resolution or budget ordinance, the governing body shall pass a resolution or ordinance levying upon all property subject to taxation, a tax rate sufficient to produce the sum necessary to balance the budget.
- (c) The comptroller of the treasury or the comptroller's designee shall require any periodic information from a local government that has issued debt under this chapter or under prior authorizing statutes or is subject to the budget requirements of § 4-3-305 and make such audits as the comptroller of the treasury or the comptroller's designee may deem necessary, to the end that it may be ascertained that the budget is kept balanced during the life of the debt. The annual budget of each local government must be submitted to the comptroller of the treasury or the comptroller's designee immediately upon its adoption. The comptroller of the treasury or the comptroller's designee shall thereupon determine whether or not the budget will be in balance in accordance with this chapter. If the budget does not comply with this chapter, then the comptroller of the treasury or the comptroller's designee shall have the power and the authority to direct the governing body of the local government to adjust its estimates, to reduce expenditures, or to make additional tax levies sufficient to comply with this chapter. Any budget adopted by the governing body of a local government must be submitted for approval by the comptroller of the treasury or the comptroller's designee. The comptroller of the treasury or the comptroller's designee shall approve the budget only when the comptroller of the treasury or the comptroller's designee is satisfied that it complies with this chapter.
History (5)
- Acts 1986, ch. 770, § 4-3
- 2010, ch. 868, § 48
- 2014, ch. 766, §§ 3, 4
- 2016, ch. 626, § 1
- 2021, ch. 256, §§ 5, 6.
§ 9-21-404. Requirement of budget approval — Waiver. - If a budget is either not approved by the comptroller of the treasury or the comptroller's designee or not submitted to the comptroller of the treasury or the comptroller's designee when required under this part within two (2) months of the beginning of the fiscal year, then debt or financing obligations shall not be issued by the public entity until the comptroller of the treasury or the comptroller's designee has approved the budget, or as otherwise provided for in a manner approved by the comptroller of the treasury or the comptroller's designee. In the case of an emergency, the comptroller of the treasury or the comptroller's designee, may waive the requirement of budget approval in order to allow the public entity to enter into emergency financial transactions.
History (3)
- Acts 1986, ch. 770, § 4-4
- 2010, ch. 868, § 49
- 2021, ch. 256, § 7.
§ 9-21-405. Definition of “period.” - “Period,” as used in this part and parts 5-8 of this chapter, includes in each instance any number of portions of time not exceeding in the aggregate the length of time included in such period.
History (1)
- Acts 1986, ch. 770, § 4-5.
§ 9-21-406. Nonconforming obligations. - (a) Any note or promise to repay money (herein called “obligation”) issued or made under this chapter contrary to requirements precedent to the issuance of notes under this part and parts 5-8 of this chapter, as the case may be, shall be considered nonconforming and shall be subject to the restrictions and penalties of this section.
- (b) Upon identification of a nonconforming obligation the comptroller of the treasury or the comptroller's designee shall send written notice to offending parties, including the chief executive officer and chief financial officer of the affected local government. This notice shall contain a detailed description of:
- (1) The nature of the nonconformance;
- (2) Specific corrective actions necessary to bring the obligation into conformity; and
- (3) A reasonable time, as determined by the comptroller or comptroller's designee, within which the local government shall complete the necessary corrective actions.
- (c) Upon receipt of a notice issued pursuant to subsection (b), a local government shall respond to the notice in writing within ten (10) business days. This response shall state:
- (1) Acknowledgment of the alleged nonconformance, and:
- (A) A detailed plan for obtaining conformity;
- (B) A statement as to whether the time frame established by the notice of subsection (b) is sufficient to complete corrective actions necessary for conformance; and
- (C) If necessary, a request for additional time to complete corrective actions necessary for conformance; or
- (2) Disputation of the alleged nonconformance, and:
- (A) A detailed explanation of reasons for disputation; and
- (B) A request for reconsideration.
- (d) Upon receipt of the response required by subsection (c), the comptroller or comptroller's designee shall within ten (10) business days send a written response to the chief executive officer of the local government, the chief financial officer of the local government and the local governing body. That response shall:
- (1) In cases where the local government acknowledges initial determination of the comptroller or the comptroller's designee:
- (A) Accept or deny the plan offered pursuant to subdivision (c)(1)(A); and
- (B) Where applicable, approve or deny the request made pursuant to subdivision (c)(1)(C) for additional time to complete corrective actions necessary to obtain conformity; or
- (2) In cases where the local government disputes the initial determination of the comptroller or comptroller's designee, contain a statement addressing the merits of the disputation. This statement shall:
- (A) Accept the disputation and consider the obligation in conformity; or
- (B) Deny the disputation and restate the necessary corrective actions and reasonable time frame for completing such.
- (e)
- (1) At the conclusion of the time frame established pursuant to subsection (d) by the comptroller or comptroller's designee for completion of the necessary corrective actions the comptroller or comptroller's designee shall, within ten (10) business days, make a determination as to whether the local government has completed the necessary corrective actions to the official's satisfaction.
- (2) Upon the determination that the necessary corrective actions have been satisfactorily completed, the obligation shall be considered in conformity and no penalty shall be assessed. Notice of such shall, within ten (10) business days of determination, be sent to all parties.
- (3) Upon the determination that the necessary corrective actions have not been satisfactorily completed, notice shall be sent to all parties, including the chief executive office of the local government, the chief financial officer of the local government and the local governing body. Such notice shall be sent within ten (10) business days of such determination and shall include:
- (A) A statement of nonconformance;
- (B) A written explanation of deficiencies in conformance; and
- (C) A statement that the nonconformance shall be reported to the comptroller and that the parties shall be subject to the penalty provisions of this section.
- (f) Upon receipt of a notice of nonconformance issued pursuant to subdivision (e)(3) the comptroller shall:
- (1) Levy a penalty in accordance with the guidelines adopted pursuant to subsection (g);
- (2) Upon a determination that it is in the best interests of fairness, extend the time frame in which parties may complete necessary corrective action, before a penalty is levied; or
- (3) Waive the penalty.
- (g) The state funding board shall develop and adopt guidelines for the purpose of identifying classifications of nonconformity and levying of penalties pursuant to this section. In developing and adopting these guidelines, the following shall be taken into consideration:
- (1) The distinction between material nonconformance and administrative nonconformance;
- (2) The distinction between willful or knowing nonconformance and inadvertent or accidental nonconformance;
- (3) The existence and extent or absence of actual damages to the public;
- (4) That every penalty imposed should be levied upon a totality of the circumstances; and
- (5) Where determining the necessity of public notification of nonconforming obligations, the comptroller shall use a method commensurate with the nature of the nonconformance.
- (h) The comptroller or the comptroller's designee may extend the time for written notices or responses provided for in this section for a reasonable duration upon a determination that such extension of time is in the best interest of the parties. An offending party or affected local government may request an extension of time by submitting such request with reasoning to the comptroller or the comptroller's designee.
History (4)
- Acts 1986, ch. 770, § 4-6
- 1988, ch. 798, § 1
- 2010, ch. 868, § 50
- 2011, ch. 458, § 1.
§ 9-21-407. Remedies of noteholders. - Any holder of notes issued pursuant to this chapter has the right, in addition to all other rights:
- (1) By mandamus or other suit, action or proceeding in any court of competent jurisdiction to enforce such holder's rights against the local government, the governing body of the local government and any officer, agent, or employee of the local government, including, but not limited to, the right to require the local government, the governing body and any proper officer, agent or employee of the local government to assess, levy and collect taxes, and to fix and collect fees, rents, tolls, or other charges adequate to carry out any agreement as to, or pledge of, such taxes, fees, rents, tolls, or other charges, and to require the local government, the governing body of the local government and any officer, agent or employee of the local government to carry out any other covenants and agreements, and to perform its and their duties under this chapter. No holder or holders of notes payable exclusively from the revenues of a public works project shall ever have the right to compel the levying and collection of taxes to pay such notes and the interest thereon; and
- (2) By action or suit in equity to enjoin any acts or things which may be unlawful or a violation of the rights of such holder or holders of notes.
History (1)
- Acts 1986, ch. 770, § 4-7.
§ 9-21-408. Internal loans. - (a) Local governments may make internal loans in accordance with procedures for issuance of notes or bonds in part 5, 6, 7, or 8 of this chapter.
- (b) Local governments may make internal loans in accordance with the procedures of § 9-21-604(b) of all funds derived from the sale of any Tennessee private act hospital established pursuant to private acts of the state and the Private Act Hospital Authority Act of 1996, compiled in title 7, chapter 57, part 6. This section does not authorize the expenditure of funds derived from the sale of a private act hospital for any purpose contrary to law or applicable court order.
- (c) Guidelines for internal loans for the purposes of this section must be provided by the comptroller of the treasury or the comptroller's designee as authorized in § 4-3-305.
- (d) Local governments that internally lend restricted monies shall ensure interest is paid for the use of internal monies. At a minimum, the interest rate must be the highest rate currently being earned on other investments, excluding pension investments. If there are no applicable investments, the interest rate must be the amount that could be earned for deposits in the local government investment pool administered by the state department of treasury.
History (3)
- Acts 1994, ch. 806, § 9
- 2016, ch. 832, § 1
- 2021, ch. 128, § 10.
Part 5 Bond Anticipation Notes § 9-21-501. Authorization for the issuance of bond anticipation notes. - The governing body of the local government acting by resolution is hereby authorized to issue and sell interest-bearing bond anticipation notes for all purposes for which bonds can be legally authorized and issued by a local government for public works projects as defined by this chapter, and for purposes authorized by chapter 11 of this title and by title 49, chapter 3, part 10. Such resolution shall not be effective until the initial resolution authorizing the issuance of the bonds, if required, shall have been adopted, published and no petition protesting the issuance of such bonds shall have been filed as permitted by law.
History (2)
- Acts 1986, ch. 770, § 5-1
- 1987, ch. 77, § 6.
§ 9-21-502. Purchase and terms of bond anticipation notes. - Bond anticipation notes shall be sold for not less than ninety-nine percent (99%) of the par value thereof and accrued interest as the governing body of the local government may direct. Bond anticipation notes may be sold in one (1) or more series, may bear such date or dates, may bear interest at such rate or rates (which may vary from time to time), may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may be payable at such place or places, may be executed in such manner, may be payable in such medium of payment, may be subject to such terms of redemption, without a premium or, for notes sold for not less than the par value thereof and accrued interest, without or with a premium of not exceeding one percent (1%) of the principal amount thereof, all as may be provided by resolution of the governing body of the local government.
History (1)
- Acts 1986, ch. 770, § 5-2.
§ 9-21-503. Method of sale of bond anticipation notes. - Bond anticipation notes may be sold in such manner either at a competitive public sale or at a private negotiated sale as the governing body of the local government may direct.
History (1)
- Acts 1986, ch. 770, § 5-3.
§ 9-21-504. Security for bond anticipation notes. - (a) Bond anticipation notes issued in anticipation of bonds secured by the full faith and credit of the local government shall be secured by a pledge of the taxing power of the local government, as to all taxable property in the local government or a portion of the local government, if applicable, which shall be subject to taxation for the payment of the bonds, the issuance of which is anticipated by such notes, and may, at the option of the local government, be additionally secured by the same revenues which will secure the bonds, the issuance of which is anticipated by such notes and identified in the initial resolution authorizing such bonds. When the bond anticipation notes are so issued and sold, they shall be direct obligations of the local government, the payment of which shall be made according to the tenor and effect thereof. The governing body of the local government is hereby authorized to levy and provide for the collection of a special tax over and above all other taxes authorized or limited by law to be imposed and levied on all the taxable property in the local government or a portion of the local government, if applicable, to create a sinking fund to retire the notes with interest as they fall due.
- (b) Bond anticipation notes issued in anticipation of the issuance of bonds secured by and payable solely from revenues of a public works project may be secured by the revenues from the public works project.
- (c) When bonds shall have been issued and sold for a public works project, a sufficient amount of the proceeds shall be applied to the payment at their maturity or redemption of any bond anticipation notes issued for such public works project then outstanding. Nothing in this chapter shall prohibit the retirement of bond anticipation notes from other local government funds available and authorized for such purpose.
History (1)
- Acts 1986, ch. 770, § 5-4.
§ 9-21-505. Approval of bond anticipation notes and application for their extension or renewal. - The sale of bond anticipation notes shall first be approved by the comptroller of the treasury or the comptroller's designee, and the notes shall be issued for the express purpose of providing funds in anticipation of the sale of bonds. All such notes shall be issued for a period not to exceed two (2) years from the date of issue; provided, that with the approval of the comptroller of the treasury or the comptroller's designee the notes may be extended or renewed for not more than two (2) additional periods not exceeding two (2) years each. Each year that extension or renewal notes are outstanding, the local government shall retire a portion thereof equal to not less than one-twentieth (⁄) of the original principal amount of the notes, and to that end, the resolution authorizing any such issue of extension or renewal notes shall provide for the notes to mature serially, and may provide that the notes shall be subject to redemption prior to maturity at the option of the local government. In approving any issue of extension or renewal notes, the comptroller of the treasury or the comptroller's designee may waive the requirement of periodic retirement. Application to the comptroller of the treasury or the comptroller's designee for the extension or renewal of any such notes shall be by resolution of the governing body. Notwithstanding this section, the comptroller of the treasury or the comptroller's designee shall not be required to approve the issuance or extension of any bond anticipation note issued in anticipation of the issuance of a bond or other debt obligation to a state or federal agency.
History (4)
- Acts 1986, ch. 770, § 5-5
- 1987, ch. 77, § 7
- 2005, ch. 393, § 2
- 2010, ch. 868, § 51.
Part 6 Capital Outlay Notes § 9-21-601. Issuance and sale of interest-bearing capital outlay notes — Approval by comptroller. - (a) The governing body of a local government acting by resolution may issue and sell interest-bearing capital outlay notes for all purposes for which bonds can be legally authorized and issued by a local government for public works projects as defined in § 9-21-105 and for property valuation, tax assessment, and tax equalization programs.
- (b)
- (1) The sale of all interest-bearing capital outlay notes must first be approved by the comptroller of the treasury or the comptroller's designee. In order to obtain such approval, the local government shall submit to the comptroller of the treasury or the comptroller's designee a copy of the proposed resolution or resolution authorizing the notes; a copy of the proposed disclosure statement, if any; a statement showing the estimated annual principal and interest requirements for the notes; a detailed statement showing the estimated cost of issuance, which must include all amounts that the local government would be required to report under § 9-21-134; and a list of the projects to be financed together with any other information deemed pertinent to the note issue by the local government. Based upon the information submitted and any additional information deemed pertinent by the local government, the local government shall state and demonstrate in its request for approval that the proposed sale is feasible, that the proposed sale is in the best interest of the local government, and that the local government is able to amortize the proposed indebtedness, together with all other obligations of the local government then outstanding.
- (2) The state funding board may establish guidelines to assist the comptroller of the treasury or the comptroller's designee in reviewing applications submitted by the local government. The guidelines, if any, must be made available to the local government upon request to the comptroller of the treasury or the comptroller's designee.
- (3) The comptroller of the treasury or the comptroller's designee shall notify the governing body of the local government of the comptroller of the treasury's or the comptroller's designee's approval or disapproval within ten (10) days from the date that all required information is received by the comptroller of the treasury or the comptroller's designee. If the comptroller of the treasury or the comptroller's designee approves a sale for the capital outlay notes or if the comptroller of the treasury or the comptroller's designee fails to act within such time, then the local government may proceed to sell the notes in that manner.
- (4) In determining whether to approve the sale of capital outlay notes, the comptroller of the treasury or the comptroller's designee shall consider whether the issuance of the capital outlay notes, as compared to the issuance of general obligation bonds, is in the best interest of the local government. The comptroller or the comptroller's designee shall not approve the sale of any capital outlay notes if the comptroller or the comptroller's designee determines that the reasonably expected weighted average life of the public works project proposed to be financed materially exceeds the weighted average maturity of the capital outlay notes proposed to be issued and that the public works project should be financed with general obligation bonds.
History (3)
- Acts 1986, ch. 770, § 6-1
- 2010, ch. 868, § 52
- 2021, ch. 128, § 11.
§ 9-21-602. Purchase price and terms of capital outlay notes — Weighted average maturity of capital outlay notes. - (a) Capital outlay notes must be sold for not less than ninety-nine percent (99%) of the par value thereof and accrued interest as the governing body of the local government may direct. Capital outlay notes may be sold in one (1) or more series; may bear such date or dates; may bear interest at such rate or rates, which may vary from time to time; may be payable at such time or times; may be in such denomination or denominations; may be in such form, either coupon or registered; may be payable at such place or places; may be executed in such manner; may be payable in such medium of payment; may be subject to such terms of redemption, without a premium or, for notes sold for not less than the par value thereof and accrued interest, without or with a premium of not exceeding one percent (1%) of the principal amount thereof, all as may be provided by resolution of the governing body of the local government.
- (b) The weighted average maturity of capital outlay notes issued pursuant to this part and parts 1 and 4 of this chapter must not exceed the reasonably expected weighted average life of the project being financed as stated in the resolution authorizing the capital outlay notes. An erroneous estimate of the reasonably expected weighted average life of the project must in no way affect the validity of such notes.
History (4)
- Acts 1986, ch. 770, § 6-2
- 1999, ch. 432, § 6
- 2001, ch. 253, § 9
- 2021, ch. 128, § 12.
§ 9-21-603. Security for capital outlay notes. - When the capital outlay notes are issued and sold, they shall be direct obligations of the local government, the payments of which shall be made according to the tenor and effect thereof, to which shall be pledged the taxing power of the local government as to all taxable property in the local government. The governing body is hereby authorized to levy and provide for the collection of a special tax over and above all other taxes authorized or limited by law to be imposed and levied on all the taxable property in the local government to create a sinking fund to retire such notes with interest as they fall due. Capital outlay notes issued for an income producing public works project may be additionally secured by and payable from revenues of such public works project.
History (1)
- Acts 1986, ch. 770, § 6-3.
§ 9-21-604. Period of capital outlay notes — Repayment. - (a)
- (1) Capital outlay notes issued pursuant to this section may be issued for a period not to exceed the end of the twelfth fiscal year following the fiscal year in which the notes were issued. The repayment must be in a manner that:
- (A) An equal amount of principal is paid in each fiscal year that the capital outlay notes are outstanding after the first fiscal year in which the notes are issued;
- (B) Level debt service, as described in subdivision (a)(2), is paid in each fiscal year that the capital outlay notes are outstanding after the first fiscal year in which the notes are issued; or
- (C) The debt service is paid on the capital outlay notes as approved by the comptroller or the comptroller's designee.
- (2) The resolution authorizing any such issue of notes must provide for the principal of the notes to be paid consistent with the requirements of subdivision (a)(1), either by maturity or by mandatory redemption. The resolution authorizing such notes may provide that the notes must be subject to redemption prior to maturity at the option of the local government. Debt service payable with respect to capital outlay notes is level as long as the debt service payable in any fiscal year other than the fiscal year in which the notes are issued does not exceed the average debt service payable in each fiscal year other than the fiscal year in which the notes are issued by more than five percent (5%).
- (b) Capital outlay notes issued from funds derived from the sale of any Tennessee private act hospital may be issued for a period not to exceed the end of the twentieth fiscal year following the fiscal year in which the notes were issued, with the approval of the comptroller of the treasury or the comptroller's designee. Each fiscal year that any such notes are outstanding following the fiscal year in which notes are issued, the local government must retire a portion thereof equal to not less than one-twentieth (⁄) of the original principal amount of the notes. The resolution authorizing any such issue of notes must provide for the principal of the notes to be payable annually, either by maturity or by mandatory redemption. The resolution authorizing such notes may provide that the notes must be subject to redemption prior to maturity at the option of the local government. The comptroller of the treasury or the comptroller's designee, in approving any such notes, may waive the requirement of periodic retirement.
History (8)
- Acts 1986, ch. 770, § 6-4
- 1987, ch. 77, § 8
- 1993, ch. 514, §§ 3, 4
- 1994, ch. 806, § 4
- 2005, ch. 393, § 4
- 2010, ch. 868, § 53
- 2016, ch. 832, § 2
- 2021, ch. 128, § 13.
§ 9-21-605. [Repealed]
History (5)
- Acts 1986, ch. 770, § 6-5
- 1987, ch. 77, § 9
- 2005, ch. 393, § 5
- 2010, ch. 868, § 54
- repealed by Acts 2021, ch. 128, § 14, effective April 13, 2021.
§ 9-21-606. Refunding of capital outlay notes with general obligation refunding bonds or public building authority loans. - Capital outlay notes may be refunded with general obligation refunding bonds as provided in part 9 of this chapter or with public building authority loans as provided in title 12, chapter 10; provided, however, that if the final maturity of the refunding bonds or public building authority loans exceeds the final maturity of the capital outlay notes being refunded, then an initial resolution authorizing general obligation refunding bonds or public building authority loans must be adopted in conformance with § 9-21-205 or § 12-10-116, and must conform to § 9-21-206, requiring publication of the resolution and the notice required by that section, as applicable. Sections 9-21-207 and 9-21-209 – 9-21-212, governing election requirements and procedures, and § 9-21-215, governing the adoption of a tax resolution by the governing body of the local government, also apply.
History (4)
- Acts 1986, ch. 770, § 6-6
- 2010, ch. 868, § 55
- 2021, ch. 128, § 15
- 2022, ch. 822, § 3.
§ 9-21-607. Methods of sale of capital outlay notes. - Capital outlay notes that mature not later than the third fiscal year after the fiscal year in which the notes are issued may be sold in such manner either at a competitive public sale or at a private negotiated sale as the governing body of the local government may direct. Capital outlay notes issued solely for the acquisition of a fee simple absolute interest in land to the seller of such land or such seller's designee and that are issued for a period not to exceed the end of the tenth fiscal year following the fiscal year in which the notes were issued may be sold by private negotiated sale. Capital outlay notes issued for a period greater than the end of the third fiscal year following the fiscal year in which the notes were issued, but not greater than the end of the twelfth fiscal year following the fiscal year in which the notes were issued with a principal amount not in excess of five million dollars ($5,000,000) must be sold at competitive public sale or by the informal bid process described in § 9-21-609. Capital outlay notes issued for a period greater than the end of the third fiscal year following the fiscal year in which the notes were issued, but not greater than the end of the twelfth fiscal year following the fiscal year in which the notes were issued with a principal amount in excess of five million dollars ($5,000,000) must be sold at competitive public sale. For purposes of this part, a competitive public sale must be undertaken in the same manner as a competitive public sale is undertaken for general obligation bonds under part 2 of this chapter; provided, however, that if the principal amount of capital outlay notes to be sold is not greater than five million dollars ($5,000,000) then the notice of sale may be published solely in a newspaper having general circulation in the local government.
History (2)
- Acts 1986, ch. 770, § 6-7
- 2021, ch. 128, § 16.
§ 9-21-608. [Repealed]
History (6)
- Acts 1986, ch. 770, § 6-8
- 1987, ch. 77, § 10
- 1993, ch. 514, § 5
- 2005, ch. 393, § 6
- 2010, ch. 868, § 56
- repealed by Acts 2021, ch. 128, § 17, effective April 13, 2021.
§ 9-21-609. Sale of capital outlay notes by informal bid process. - If capital outlay notes are authorized to be sold by an informal bid process, the local government or its designee shall contact at least three (3) financial institutions by telephone or letter to request such financial institutions to provide a rate or rates of interest for the term or terms of such notes. If the informal bid process is used, the local government or its designee shall provide the comptroller of the treasury or the comptroller's designee a summary of the rate quotes received from financial institutions with its request for approval of the sale of the capital outlay notes. Any recurring fees that will be included as part of the interest rate over and above the bank rate must be identified.
History (6)
- Acts 1986, ch. 770, § 6-9
- 1993, ch. 514, §§ 6-8, 10
- 2005, ch. 393, § 7
- 2010, ch. 868, § 57
- 2021, ch. 128, § 18
- 2022, ch. 822, §§ 1, 2.
§ 9-21-610. [Repealed]
History (4)
- Acts 1986, ch. 770, § 6-10
- 2005, ch. 393, § 8
- 2010, ch. 868, § 58
- repealed by Acts 2021, ch. 128, § 19, effective April 13, 2021.
§ 9-21-611. Capital outlay notes issued solely to the environmental protection agency. - (a) Capital outlay notes issued solely to the environmental protection agency of the United States (EPA) under the Asbestos in School Hazard Abatement Program (20 U.S.C. § 4011 et seq.) may be issued for a period not to exceed twenty (20) years from the date of issue. The resolution authorizing any such issue of notes shall provide for the notes to mature serially and may provide that the notes shall be subject to redemption prior to maturity at the option of local government. The comptroller of the treasury or the comptroller's designee in approving any such notes may waive the requirement of periodic retirement.
- (b) All capital outlay notes issued prior to June 8, 1989, and all proceedings theretofore taken to authorize the issuance of such notes by any local government to the EPA for the asbestos in school hazard abatement program of the EPA are hereby ratified, validated and confirmed, and such 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 or issue such notes and to provide for the payment thereof in the manner stated in such notes and in the proceedings authorizing their issuance, and notwithstanding any defects or irregularities in any such proceedings or the failure of any such proceedings authorizing any such notes to comply with this chapter or any applicable general or special law.
History (2)
- Acts 1989, ch. 542, §§ 2, 3
- 2010, ch. 868, § 59.
§ 9-21-612. Refunding of capital outlay notes by issuing capital outlay notes. - Capital outlay notes issued pursuant to this part may be refunded by issuing capital outlay notes under this part, in accordance with the requirements and procedures set forth in this part and in §§ 9-21-903, 9-21-904, 9-21-910, 9-21-912, 9-21-913 and 9-21-914. The final maturity date of the refunding notes must not be later than the final maturity date of the notes being refunded, unless otherwise approved by the comptroller of the treasury or the comptroller's designee.
History (6)
- Acts 1994, ch. 806, § 5
- T.C.A., § 9-21-917
- Acts 1996, ch. 632, § 1
- 2005, ch. 393, § 9
- 2010, ch. 868, § 60
- 2021, ch. 128, § 20.
Part 7 Grant Anticipation Notes § 9-21-701. Authorization for the issuance of grant anticipation notes. - The governing body of a local government, acting by resolution, is hereby authorized to issue and sell interest-bearing grant anticipation notes for public works projects secured solely by a pledge of moneys, which pledge shall not be less than the principal amount of such notes, to be received pursuant to a contract or agreement between a state or federal agency and the local government. The resolution shall not be effective until the contract or agreement between the state or federal agency and the local government has been executed by all parties to the contract or agreement. The sale of all interest-bearing grant anticipation notes shall first be approved by the comptroller of the treasury or the comptroller's designee.
History (2)
- Acts 1986, ch. 770, § 7-1
- 2010, ch. 868, § 61.
§ 9-21-702. Terms of grant anticipation notes. - Grant anticipation notes shall be sold at not less than par value and accrued interest. Grant anticipation notes may be sold in one (1) or more series, may bear such date or dates, shall mature at such time or times, may bear interest at such rate or rates (which may vary from time to time), may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may be payable at such place or places, may be executed in such manner, may be payable in such medium of payment, may be subject to such terms of redemption, without premium, at the option of the local government as grant funds become available for such purpose, all as may be provided by resolution of the governing body of the local government.
History (1)
- Acts 1986, ch. 770, § 7-2.
§ 9-21-704. Security for grant anticipation notes. - The principal of grant anticipation notes shall not be direct general obligations of the local government, and the local government shall have no authority to levy ad valorem taxes for the payment of the principal of such notes; provided, that interest on grant anticipation notes may be a general obligation of a local government, and the local government shall have the authority to levy ad valorem taxes for the payment of interest on such notes. When the grant anticipation notes are issued and sold, they shall be secured solely by a pledge of moneys, which pledge shall not be less than the principal amount of such notes, to be received pursuant to a contract or agreement between a state or federal agency and the local government. Nothing herein shall preclude a local government from issuing capital outlay notes or bond anticipation notes in conjunction with grant anticipation notes issued under this section; provided, that the proceeds from the sale of any such capital outlay notes or bond anticipation notes shall not be applied to the payment of such grant anticipation notes.
History (1)
- Acts 1986, ch. 770, § 7-4.
§ 9-21-705. Duration — Extension or renewal. - Grant anticipation notes shall be issued for a period not to exceed three (3) years from the date of issuance; provided, that the comptroller of the treasury or the comptroller's designee may initially approve, or subsequently approve, a maturity date of such notes of not more than seven (7) years from the date of issuance, and may additionally approve a further extension or renewal not to exceed ten (10) years from the date of issuance upon application from the local government, by resolution, certifying that at least ten percent (10%) of the moneys anticipated to be received under the contract or agreement between such state or federal agency and the local government is not expected to be received within seven (7) years following the date of issuance of the notes.
History (3)
- Acts 1986, ch. 770, § 7-5
- 1987, ch. 77, § 11
- 2010, ch. 868, § 62.
Part 8 Tax Anticipation Notes § 9-21-801. Authorization, security, and retirement of tax anticipation notes. - The governing body of a local government may issue interest-bearing tax anticipation notes for the purpose of meeting appropriations made for the current fiscal year in anticipation of the collection of taxes and revenues of that fiscal year in amounts not exceeding sixty percent (60%) of such appropriation; provided, that the sale of the notes shall first be approved by the comptroller of the treasury or the comptroller's designee. The notes may be renewed from time to time and money may be borrowed from time to time for the payment of any indebtedness evidenced thereby, but all such notes shall mature not later than the close of the current fiscal year. If taxes and revenues are found to be overestimated and it becomes impossible to pay the notes prior to the close of the current fiscal year, application shall be made to the comptroller of the treasury or the comptroller's designee within ten (10) days prior to the close of the current fiscal year for permission to issue funding bonds to cover the unpaid note balances in the manner provided by chapter 11 of this title, or as otherwise provided for in a manner approved by the comptroller of the treasury or the comptroller's designee.
History (3)
- Acts 1986, ch. 770, § 8-1
- 1987, ch. 77, § 12
- 2010, ch. 868, § 63.
§ 9-21-802. Terms of tax anticipation notes. - Tax anticipation notes shall be sold at not less than par value and accrued interest. Tax anticipation notes may be sold in one (1) or more series, may bear such date or dates, may bear interest at such rate or rates (which may vary from time to time), may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may be payable at such place or places, may be executed in such manner, may be payable in such medium of payment, may be subject to such terms of redemption, without a premium, all as may be provided by resolution of the governing body of the local government.
History (1)
- Acts 1986, ch. 770, § 8-2.
§ 9-21-803. Method of sale of tax anticipation notes. - Tax anticipation notes may be sold in such manner either at a competitive public sale or at a private negotiated sale as the governing body of the local government may direct.
History (1)
- Acts 1986, ch. 770, § 8-3.
Part 9 General Obligation Refunding Bonds § 9-21-901. Authorization to issue general obligation refunding bonds — Modification of outstanding obligation. - (a) Any local government has the power and is authorized to issue, by resolution, general obligation refunding bonds to refund outstanding obligations heretofore or hereafter lawfully issued or assumed by the local government, and to provide for the rights of the holders thereof and to secure such bonds as provided in this part and part 1 of this chapter.
- (b) General obligation refunding bonds issued hereunder and secured by the full faith and credit and unlimited taxing power of the local government shall be for the purpose of:
- (1) Refunding outstanding obligations which are secured by a pledge of the full faith and credit and unlimited taxing power of the local government;
- (2) Refunding outstanding obligations secured by a pledge of revenues in addition to the full faith and credit pledge; or
- (3) Refunding outstanding obligations secured solely by the revenues of a public works project.
- (c) General obligation refunding bonds may be issued to refinance more than one (1) issue of outstanding obligations, notwithstanding that such obligations may have been issued at different times.
- (d) The resolution authorizing general obligation refunding bonds may also provide for other bonds to be issued jointly with such refunding bonds.
- (e) For purposes of this chapter, the modification of an outstanding obligation must be deemed a refunding of the modified obligation, and such refunding must be required to comply with this chapter, if the modification is of such significance that the obligation would be deemed to be reissued for federal tax law purposes, whether or not the outstanding obligation is tax-exempt for purposes of federal tax laws. However, an outstanding obligation is not significantly modified and does not rise to the level of a state law reissuance if the obligation allows for and contemplates a modification of the rate of interest of the outstanding obligation at any time during its existence.
History (3)
- Acts 1986, ch. 770, § 9-1
- 2021, ch. 128, § 21
- 2022, ch. 822, § 4.
§ 9-21-902. Determination by governing body to be conclusive. - A determination by the governing body that any refunding is advantageous or necessary to the local government, or that any of the amounts provided in § 9-21-904 should be included in such refunding, or that any of the outstanding obligations should be called for redemption on the first or any subsequent available redemption date or permitted to remain outstanding until their respective dates of maturity, shall be conclusive. However, the determination as to whether the general obligation refunding bonds can be sold at a private negotiated sale is subject to § 9-21-910(c).
History (1)
- Acts 1986, ch. 770, § 9-2.
§ 9-21-903. Plan of refunding to be submitted to the comptroller of the treasury or the comptroller's designee — Publication of notice of refunding. - (a) Prior to the adoption by the governing body of the resolution authorizing the issuance of general obligation refunding bonds, a plan of refunding shall be submitted for review to the comptroller of the treasury or the comptroller's designee, who shall immediately acknowledge receipt in writing of the proposed plan of refunding. If the sole purpose of the plan of refunding is to provide cost savings to the public, a computation of projected cost savings shall also be submitted to the comptroller of the treasury or the comptroller's designee as a part of the plan of refunding. The comptroller of the treasury or the comptroller's designee may report thereon to the governing body within fifteen (15) days after receipt of the plan. After receiving a report of the comptroller of the treasury or the comptroller's designee on the plan of refunding or after the expiration of fifteen (15) days from the date the plan of refunding is received by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the governing body may take such action with reference to the proposed plan of refunding as it deems advisable in accordance with this part.
- (b) If the sole purpose of the plan of refunding is to provide cost savings to the public and if the state funding board has established guidelines with respect to such cost savings, the comptroller of the treasury or the comptroller's designee shall determine whether the plan of refunding substantially complies with the guidelines, and shall so state in the report on the plan of refunding. After receiving a report of the comptroller of the treasury or the comptroller's designee stating that the plan of refunding complies substantially with such guidelines or after the expiration of fifteen (15) days from the date the plan of refunding is received by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the governing body may take such action with reference to the proposed plan of refunding as it deems advisable in accordance with this part.
- (c) If a report of the comptroller of the treasury or the comptroller's designee states that the plan of refunding does not substantially comply with the guidelines, if any, a notice in substantially the following form shall be published prior to the sale of such bonds once in a newspaper having general circulation in the local government:
- NOTICE
- The following report has been received from the comptroller of the treasury or the comptroller's designee:
- (full text of report)
- Unless within ten (10) days from the date of publication hereof a petition signed by at least ten percent (10%) of the registered voters of the local government (or the portion thereof being taxed for the bonds) shall have been filed with the (official charged with maintaining the records of the issuer) protesting the issuance of the general obligation refunding bonds, such general obligation refunding bonds may be issued as the governing body deems advisable.
History (2)
- Acts 1986, ch. 770, § 9-3
- 2010, ch. 868, § 64.
§ 9-21-904. Maximum amount of principal for which general obligation refunding bonds may be issued. - (a) The principal amount of any issue of general obligation refunding bonds shall not exceed the sum of the following:
- (1) The principal amount of the outstanding obligations to be refunded; provided, that general obligation refunding bonds may be issued in such amounts to permit any part of the bonds to reflect a zero (0) rate of interest on an original issue discount;
- (2) The redemption premium, if any, thereon;
- (3) The interest due and payable on such outstanding obligations to and including the first or any subsequent available redemption date or dates selected, in its discretion, by the governing body, or to the date or dates of maturity, whichever shall be determined by the governing body to be most advantageous or necessary to the local government; and
- (4) Any expenses of the issuance and sale of such general obligation refunding bonds, including bond discount, credit enhancement, engraving, printing, and advertising fees, the creation of initial debt service reserve funds, and reasonable and necessary fees of financial and legal advisors deemed by the governing body to be necessary for the issuance of the general obligation refunding bonds.
- (b) Any money in a sinking or reserve fund or other fund for the obligations to be refunded may be used for the purposes stated in subdivisions (a)(1)-(4) or may be deposited in a sinking fund or reserve fund or other fund for the refunding bonds.
History (2)
- Acts 1986, ch. 770, § 9-4
- 1987, ch. 77, § 13.
§ 9-21-905. Initial resolution and election requirements — When required. - If the general obligation refunding bonds shall be payable from ad valorem taxes without limitation of rate or amount and the outstanding obligations to be refunded are secured solely by the revenues of a public works project, then an initial resolution authorizing general obligation refunding bonds shall be adopted in conformance with § 9-21-205 and shall conform to § 9-21-206 requiring publication of the resolution and the notice therein required. Sections 9-21-207 and 9-21-209 — 9-21-212, governing election requirements and procedures, and § 9-21-215, governing the adoption of a tax resolution by the governing body of the local government, shall also apply. If the refunding bonds will be secured in the same manner as the bonds being refunded, an initial resolution need not be adopted.
History (2)
- Acts 1986, ch. 770, § 9-5
- 1987, ch. 77, § 14.
§ 9-21-906. Sale of general obligation refunding bonds at below par value. - All general obligation refunding bonds issued by any local government under the authority of this part and part 1 of this chapter shall be sold for not less than ninety-eight percent (98%) of par value and accrued interest as the governing body of the local government may direct. Nothing in this chapter shall be construed to prevent the sale of particular bonds constituting a part of a single issue or series of bonds at a price below that herein specified, as long as the total price paid by the purchaser for the entire issue or series of bonds offered for sale on any given date shall be not less than ninety-eight percent (98%) of the par value of the entire issue or series of bonds and accrued interest; provided, that if any part of such issue or series of such general obligation refunding bonds are to be sold at a zero (0) rate of interest or at an original issue discount, such bonds may be sold at not less than ninety-eight percent (98%) of the original reoffering price of such discount bonds and accrued interest.
History (1)
- Acts 1986, ch. 770, § 9-6.
§ 9-21-907. Terms of general obligation refunding bonds. - (a) The general obligation refunding bonds may be sold in one (1) or more series, may bear such date or dates, shall mature at such time or times not exceeding forty (40) years from their respective dates, may bear interest at a zero (0) rate or at such other rate or rates (which may vary from time to time), may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may carry such registration and conversion privileges, may be executed in such manner, may be payable in such medium of payment at such place or places, may be subject to such terms of redemption with or without a premium, and may provide for the replacement of mutilated, destroyed, stolen, or lost bonds, all as may be provided by resolution of the governing body.
- (b) A general obligation refunding bond issue may be delivered as an installment bond payable as to principal and interest in equal or approximately equal installments for the term of the installment bond issue in accordance with the resolution authorizing the bond issue. The authorizing resolution shall stipulate the annual principal and interest requirements during the full term of the bond issue.
- (c) With respect to all or any portion of any issue of general obligation refunding bonds issued or anticipated to be issued hereunder, at any time during the term of the general obligation refunding bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized herein are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in § 9-21-130, a local government by resolution may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the local government may determine, including, without limitation, provisions permitting the local government to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement.
History (3)
- Acts 1986, ch. 770, § 9-7
- 1999, ch. 432, § 7
- 2001, ch. 253, § 10.
§ 9-21-908. Limitation on maturity of bonds to be refunded. - Unless the outstanding obligations are retired at the time of delivery of the general obligation refunding bonds, then the general obligation refunding bonds shall not be issued to refund the outstanding obligations unless the outstanding obligations shall mature by their terms, or shall be subject to redemption and be called for redemption within ten (10) years from the date of delivery of the general obligation refunding bonds. However, this time limitation shall not apply if the comptroller of the treasury or the comptroller's designee approves a greater period in the comptroller of the treasury's or the comptroller's designee's report on the proposed refunding plan.
History (2)
- Acts 1986, ch. 770, § 9-8
- 2010, ch. 868, § 65.
§ 9-21-909. Installment sales and exchanges. - General obligation refunding bonds may be sold or exchanged in installments at different times or an entire issue or series may be sold or exchanged at one (1) time. Any issue or series of general obligation refunding bonds may be exchanged in part or sold in part in installments at different times or at one (1) time. The general obligation refunding bonds may be sold or exchanged at any time on, before, or after the maturity of any of the outstanding obligations to be refunded.
History (1)
- Acts 1986, ch. 770, § 9-9.
§ 9-21-910. Sale of general obligation refunding bonds — Notices — Agreement to sell. - (a) Any local government of this state proposing to sell general obligation refunding bonds for any authorized purpose under this part and part 1 of this chapter is authorized to sell such bonds either at a competitive public sale or at a private negotiated sale as the governing body of the local government may direct. However, if the general obligation refunding bonds are to be sold at a private negotiated sale, then approval must first be obtained from the comptroller of the treasury or the comptroller's designee in accordance with subsection (c).
- (b) If the general obligation refunding bonds will be sold at a competitive public sale, the local government shall publish a notice of sale at least five (5) days prior to the date on which the general obligation refunding bonds are to be sold, either in a financial newspaper having national circulation, or via an electronic communication system that is generally available to the financial community. The notice of sale shall set forth the time, date and place of sale, the maximum amount of general obligation refunding bonds to be sold, the maximum interest rate, the maximum discount, if any, that will be permitted, in dollars or as a percentage of par value, and the basis upon which the general obligation refunding bonds will be awarded. If the principal amount of general obligation refunding bonds to be sold is not greater than five million dollars ($5,000,000), then the notice of sale may be published either as set forth in this subsection (b), or solely in a newspaper having general circulation in the local government.
- (c)
- (1) If the general obligation refunding bonds, except for bonds sold pursuant to a commitment of a state or federal agency to purchase the same, will be sold at private negotiated sale, then the local government shall first submit to the comptroller of the treasury or the comptroller's designee for approval, a copy of the initial resolution as adopted, if applicable, a copy of the proposed resolution authorizing the general obligation refunding bonds, a copy of the proposed disclosure statement, if any, and a detailed statement showing the estimated cost of issuance which shall include at least the following, if applicable:
- (A) Fiscal agent and/or financial advisor fees;
- (B) Bond counsel fees;
- (C) Other legal charges, if any;
- (D) Credit enhancement fees;
- (E) Trustee fees;
- (F) Registration fees;
- (G) Paying agent fees;
- (H) Rating agency fees;
- (I) Underwriters' discount or charges;
- (J) Remarketing agent fees; and
- (K) Printing, advertising and other expenses;
- together with any other information deemed pertinent to the bond issue by the local government.
- (2) Based upon the information submitted and any additional information deemed pertinent by the local government, the local government shall state and demonstrate in its request for approval to the comptroller of the treasury or the comptroller's designee that the proposed private negotiated sale is feasible, that the proposed private negotiated sale is in the best interests of the local government, and that the local government should be able to amortize the proposed indebtedness together with all other obligations then outstanding. The state funding board may establish guidelines to assist the comptroller of the treasury or the comptroller's designee in reviewing applications so submitted by the local government. Such guidelines, if any, will be made available to the local government upon request to the comptroller of the treasury or the comptroller's designee. The comptroller of the treasury or the comptroller's designee shall notify the governing body of the local government of the comptroller of the treasury's or the comptroller's designee's approval or disapproval within fifteen (15) days from the date that all required information is received by the comptroller of the treasury or the comptroller's designee. If the comptroller of the treasury or the comptroller's designee approves a private negotiated sale for the general obligation refunding bonds or if the comptroller of the treasury or the comptroller's designee fails to act within such time, then the local government may proceed to sell the general obligation refunding bonds in that manner. If the comptroller of the treasury or the comptroller's designee does not approve the proposed negotiated sale, then the local government may proceed to sell the general obligation refunding bonds at a competitive public sale in the manner provided by subsection (b).
- (d) The governing body of a local government may enter into an agreement to sell its general obligation refunding bonds under this part providing for delivery of its general obligation refunding bonds on a date greater than ninety (90) days and not greater than the first optional redemption date on which the obligations being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the agreement or contract of a local government to sell its general obligation refunding bonds as authorized in this subsection (d) is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with § 9-21-130. Agreements to sell general obligation refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement to sell the general obligation refunding bonds do not require a report of the comptroller of the treasury or the comptroller's designee.
History (7)
- Acts 1986, ch. 770, § 9-10
- 1987, ch. 77, § 15
- 1995, ch. 67, § 2
- 1996, ch. 632, § 2
- 1999, ch. 432, § 8
- 2005, ch. 393, § 10
- 2010, ch. 868, § 66.
§ 9-21-911. Sale of general obligation refunding bonds to a state or federal agency. - (a) If any general obligation refunding bonds are to be sold pursuant to a commitment of a state or federal agency to purchase the same, such bonds may be sold at a private negotiated sale to the state or federal agency without the necessity of any public advertisement of the sale or of the approval of the comptroller of the treasury or the comptroller's designee.
- (b) Any general obligation refunding bonds that are issued pursuant to subsection (a) are not subject to the requirements of § 9-21-903 if:
- (1) The general obligation refunding bonds will repay a public building authority loan authorized in title 12, chapter 10; and
- (2) The public building authority loan that the general obligation refunding bonds will repay was used as interim financing for the general obligation refunding bonds.
- (c) When a public building authority loan is used as interim financing for a general obligation refunding bond issued pursuant to subsection (a), the general obligation refunding bond resolution required by § 9-21-901 must be adopted prior to or simultaneously with the resolution authorizing the public building authority loan.
History (4)
- Acts 1986, ch. 770, § 9-11
- 2005, ch. 393, § 11
- 2010, ch. 868, § 67
- 2024, ch. 690, § 1.
§ 9-21-912. Notice of refunding. - If, at the time of delivery of the general obligation refunding bonds, the obligations to be refunded will not be retired or a valid and timely notice of redemption of the outstanding obligations is not given in accordance with the resolution, indenture or other instrument governing the redemption of the outstanding obligations, then, prior to the issuance of the general obligation refunding bonds, the governing body shall cause to be given a notice of its intention to issue the general obligation refunding bonds. The notice shall be given either by mail to the owners of all the outstanding obligations to be refunded at their addresses shown on the bond registration records for the outstanding obligations or given by publication one (1) time each in a newspaper having a general circulation in the local government and in a financial newspaper published in New York, New York, having a national circulation. The notice shall set forth the estimated date of delivery of the general obligation refunding bonds and identify the obligations, or the individual maturities thereof, proposed to be refunded; provided, that if portions of individual maturities are proposed to be refunded, the notice shall identify the maturities subject to partial refunding and the aggregate principal amount to be refunded within each maturity. If the issuance of the general obligation refunding bonds does not occur as provided in the notice, the governing body shall cause notice thereof to be given as provided above. Except as otherwise set forth in this section, the notice required pursuant to this section shall be given whether or not any of the obligations to be refunded are to be called for redemption.
History (2)
- Acts 1986, ch. 770, § 9-12
- 1994, ch. 806, § 7.
§ 9-21-913. Notice of redemption. - If any of the obligations to be refunded are to be called for redemption, the governing body shall cause the notice of redemption to be given in the manner and at the time required by the resolution or ordinance authorizing such outstanding obligations.
History (1)
- Acts 1986, ch. 770, § 9-13.
§ 9-21-914. Application of proceeds of sale of general obligation refunding bonds. - (a) The principal proceeds from the sale of any general obligation refunding bonds shall be applied only as follows, either to the:
- (1) Immediate payment and retirement of the obligations being refunded; or
- (2) Extent not required for the immediate payment of the outstanding obligations being refunded, the proceeds of the general obligation refunding bonds shall be deposited in escrow with a bank or trust company either located in this state or regulated by a federal entity to provide for the payment of the outstanding obligations and to pay any expenses incurred in connection with the refunding, and may also be used to pay interest on the general obligation refunding bonds prior to the retirement of the outstanding obligations.
- (b) Money in any such escrow fund may be invested in:
- (1) Direct obligations of, or obligations, the principal of and interest on which are guaranteed by, the United States;
- (2) Obligations of any agency or instrumentality of the United States;
- (3) Certificates of deposit issued by a bank or trust company located in this state; provided, that such certificates shall be secured by a pledge of any of the obligations referred to in subdivisions (b)(1) and (2) having an aggregate market value, exclusive of accrued interest, equal at least to the principal amount of the certificates of deposit so secured; or
- (4) Obligations which are rated in either of the top two (2) highest rated categories by a nationally recognized rating agency of such obligations and whose interest income is exempt from tax by the United States, which are direct general obligations of the state or a political subdivision thereof or obligations guaranteed by the state, to the payment of the principal of and interest on which the full faith and credit of the state are pledged or obligations of any other state or political subdivision or instrumentality thereof; provided, that approval of the comptroller of the treasury or the comptroller's designee is first obtained.
- (c) The bank or trust company holding the proceeds of such general obligation refunding bonds in escrow shall deliver to the local government official designated by law as custodian of local government funds, a copy of the document evidencing each transaction relating to the escrow fund, or a report thereof, as each transaction occurs. On or before August 1 of each year, a report of the financial condition of the escrow fund as of June 30 of that year, and an operating statement for the escrow fund for the year ending June 30 of such year, shall be delivered to the custodian. However, at the discretion of the escrow agent, the report of the financial condition of the escrow fund may be made on a more frequent basis. Nothing herein shall be construed as a limitation on the duration of any deposit in escrow for the retirement of obligations being refunded but which shall not have matured and which shall not be presently redeemable or, if presently redeemable, shall not have been called for redemption.
History (3)
- Acts 1986, ch. 770, § 9-14
- 2001, ch. 253, § 11
- 2010, ch. 868, § 68.
§ 9-21-915. Powers to secure and to covenant as to general obligation refunding bonds. - In order to secure the payment of the principal of and interest on general obligation refunding bonds issued pursuant to this part and part 1 of this chapter, or in connection with such bonds, any local government shall have the power as to such bonds to:
- (1) Pledge the full faith, credit and unlimited taxing power of the local government as to all taxable property in the local government or a portion of the local government, if applicable, to the punctual payment of the principal of and interest on such bonds;
- (2) Pledge all or any part of the fees, rents, tolls, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the punctual payment of the principal of and interest on such bonds issued to finance such public works project or projects or any other public works project or projects, and to covenant against thereafter pledging any such fees, rents, tolls, or charges to any other bonds or any other obligations of the local government;
- (3) Provide for the terms, forms, registration, exchange, execution and authentication of the general obligation refunding bonds in a manner not inconsistent with this part and part 1 of this chapter;
- (4) Covenant as to the use and disposition of the proceeds from the sale of the general obligation refunding bonds in a manner not inconsistent with this part and part 1 of this chapter;
- (5) Covenant as to the fees, rents or tolls to be charged in connection with any public works project or projects, covenant that provisions will be made for the retirement of the outstanding obligations from the proceeds of the general obligation refunding bonds being issued, and covenant as to any other use and disposition to be made of the proceeds thereof, and enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to a public works project which is owned or leased by a local government or local government instrumentality;
- (6) Covenant as to the operation and maintenance of the public works project;
- (7) Covenant to set aside or pay over reserves and sinking funds for the general obligation refunding bonds and as to the disposition thereof;
- (8) Redeem the general obligation refunding bonds, and covenant for their redemption and provide the terms and conditions thereof;
- (9) Covenant as to its books of account, as to the inspection and audit thereof and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105. All audits shall be performed in accordance with the standards established by the comptroller of the treasury;
- (10) Covenant and prescribe as to what occurrences shall constitute “events of default” and the terms and conditions upon which any or all of the general obligation refunding bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;
- (11) Covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation;
- (12) Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties;
- (13) Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the general obligation refunding bonds, or in the discretion of the governing body, make the general obligation refunding bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the general obligation refunding bonds and for their security that may be consistent with the Constitution of Tennessee;
- (14) Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the acquisition or construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of the taxing power and in addition to a pledge of rates, fees, rents and charges received or receivable from a sewer system then existing or to be constructed;
- (15) Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which, in its discretion, it may install and operate and maintain beside specified portions of the public streets;
- (16) Covenant that the costs of operation and maintaining parking facilities payable, in part from the revenues of such parking facilities, shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations; and
- (17) Covenant and provide for the discharge and satisfaction and defeasance of all or any part of general obligation refunding bonds and the indebtedness evidenced thereby.
History (1)
- Acts 1986, ch. 770, § 9-15.
Part 10 Revenue Refunding Bonds § 9-21-1001. Authorization to refinance and to issue revenue refunding bonds. - (a) Any local government has the power and is authorized to issue by resolution revenue refunding bonds to refinance outstanding obligations heretofore or hereafter issued or lawfully assumed by the local government which are payable solely from all or any part of the revenues of one (1) or more enterprises, or from a combination of such revenues and taxes, to refinance any enterprise or combination of enterprises, and for such purpose or purposes to combine or divide any two (2) or more enterprises, and to provide for the rights of the holders thereof and to secure such bonds as provided in this part and part 1 of this chapter.
- (b) Revenue refunding bonds shall not be issued under this part and part 1 of this chapter, unless the governing body of the local government makes a finding, which finding shall be conclusive, that one (1) or more of the following purposes will be accomplished:
- (1) Cost savings to the public;
- (2) Removal or modification of one (1) or more restrictive covenants;
- (3) Elimination or mitigation of risk due to interest rate changes; or
- (4) Payment or discharge of all or any part of an issue or series of outstanding obligations, including any interest thereon, in arrears or to become due and for the payment of which sufficient funds are not available.
- (c) Revenue refunding bonds may be issued to refinance more than one (1) issue of outstanding obligations, notwithstanding that such outstanding obligations may have been issued at different times and may be secured by the revenues of different enterprises; and any such enterprises may be operated as a single enterprise, subject to contract rights vested in the holders of obligations being refinanced.
- (d) The resolution authorizing revenue refunding bonds may also provide for other bonds to be issued jointly with the revenue refunding bonds.
- (e) For purposes of this chapter, the modification of an outstanding obligation is deemed a refunding of the modified obligation, and such refunding must comply with this chapter, if the modification is of such significance that the obligation would be deemed to be reissued for federal tax law purposes, regardless of whether the outstanding obligation is tax-exempt for purposes of federal tax laws.
History (3)
- Acts 1986, ch. 770, § 10-1
- 2021, ch. 128, § 22
- 2022, ch. 663, § 1.
§ 9-21-1002. Determination by governing body to be conclusive. - A determination by the governing body that any refunding is advantageous or necessary to the local government, or that any of the amounts provided in § 9-21-1004 should be included in such refunding, or that any of the outstanding obligations should be called for redemption on the first or any subsequent available redemption date or permitted to remain outstanding until their respective dates of maturity, shall be conclusive.
History (1)
- Acts 1986, ch. 770, § 10-2.
§ 9-21-1003. Plan of refunding to be submitted to the comptroller of the treasury or the comptroller's designee. - (a) Prior to the adoption by the governing body of the resolution authorizing the issuance of revenue refunding bonds, a plan of refunding shall be submitted for review to the comptroller of the treasury or the comptroller's designee, who shall immediately acknowledge receipt in writing of the proposed plan of refunding. If the sole purpose of the plan of refunding is to provide cost savings to the public, a computation of projected cost savings shall also be submitted to the comptroller of the treasury or the comptroller's designee as a part of the plan of refunding. The comptroller of the treasury or the comptroller's designee may report thereon to the governing body within fifteen (15) days after receipt of the plan. After receiving a report of the comptroller of the treasury or the comptroller's designee on the plan of refunding or after the expiration of fifteen (15) days from the date the plan of refunding is received by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the governing body may take such action with reference to the proposed plan of refunding as it deems advisable.
- (b) If the sole purpose of the plan of refunding is to provide cost savings to the public and if the state funding board has established guidelines with respect to such cost savings, the comptroller of the treasury or the comptroller's designee shall determine whether the plan of refunding substantially complies with the guidelines, and shall so state in the report on the plan of refunding. After receiving a report of the comptroller of the treasury or the comptroller's designee stating that the plan of refunding complies substantially with such guidelines or after the expiration of fifteen (15) days from the date the plan of refunding is received by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the governing body may take such action with reference to the proposed plan of refunding as it deems advisable.
- (c) If a report of the comptroller of the treasury or the comptroller's designee states that the plan of refunding does not substantially comply with the guidelines, if any, a notice in substantially the following form shall be published prior to the sale of such bonds once in a newspaper having general circulation in the local government:
- NOTICE
- The following report has been received from the comptroller of the treasury or the comptroller's designee:
- (full text of report)
- Unless within ten (10) days from the date of publication hereof, a petition signed by at least ten percent (10%) of the registered voters shall have been filed with the (official charged with maintaining the records of the issuer) protesting the issuance of the revenue refunding bonds, such revenue refunding bonds may be issued as the governing body deems advisable.
History (2)
- Acts 1986, ch. 770, § 10-3
- 2010, ch. 868, § 69.
§ 9-21-1004. Maximum amount of principal for which revenue refunding bonds may be issued. - The principal amount of any issue of revenue refunding bonds shall not exceed the sum of the following:
- (1) The principal amount of the outstanding obligations being refinanced;
- (2) The redemption premium, if any, thereon;
- (3) Unpaid interest on the outstanding obligations being refinanced to the date of delivery or exchange of the revenue refunding bonds;
- (4) The interest due and payable on such outstanding obligations, to and including the first or any subsequent available redemption date or dates selected, in its discretion, by the governing body of the local government, or to the date or dates of maturity, whichever shall be determined by the governing body of the local government to be most advantageous or necessary to the local government;
- (5) A reasonable reserve for the payment of principal of and interest on the revenue refunding bonds; and
- (6) Any expenses of the issuance and sale of the revenue refunding bonds, including bond discount, credit enhancement, engraving, printing, and advertising fees, and reasonable and necessary fees of financial and legal advisors, deemed by the governing body to be necessary for the issuance of the revenue refunding bonds.
History (1)
- Acts 1986, ch. 770, § 10-4.
§ 9-21-1005. Sale of revenue refunding bonds at below par value. - All revenue refunding bonds issued by any local government under the authority of this part and part 1 of this chapter shall be sold for not less than ninety-seven percent (97%) of par value and accrued interest as the governing body of the local government may direct. Nothing in this chapter shall be construed to prevent the sale of particular bonds constituting a part of a single issue or series of bonds at a price below that herein specified, as long as the total price paid by the purchaser for the entire issue or series of bonds offered for sale on any given date shall be not less than ninety-seven percent (97%) of the par value of the entire issue or series of bonds and accrued interest; provided, that if any part of such issue or series of such revenue refunding bonds are to be sold at a zero (0) rate of interest or at an original issue discount, such bonds may be sold at not less than ninety-seven percent (97%) of the original reoffering price of such discount bonds and accrued interest.
History (1)
- Acts 1986, ch. 770, § 10-5.
§ 9-21-1006. Terms of revenue refunding bonds — Interest rate agreements. - (a) The revenue refunding bonds may be sold in one (1) or more series, may bear such date or dates, shall mature at such time or times not exceeding forty (40) years from their respective dates, may bear interest at a zero (0) rate or at such other rate or rates (which may vary from time to time), may be in such denomination or denominations, may be payable at such time or times, may be in such form, either coupon or registered, may carry such registration and conversion privileges, may be executed in such manner, may be payable in such medium of payment at such place or places, may be subject to such terms of redemption, with or without a premium, and may provide for the replacement of mutilated, destroyed, stolen or lost bonds, all as may be provided by resolution of the governing body.
- (b) The revenue refunding bond issue may be delivered as an installment bond payable as to principal and interest in equal or approximately equal installments for the term of the bond issue in accordance with the resolution authorizing the bond issue. The authorizing resolution shall stipulate the annual principal and interest requirements during the full term of the installment bond issue.
- (c) With respect to all or any portion of any issue of revenue refunding bonds issued or anticipated to be issued hereunder, at any time during the term of the revenue refunding bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized herein are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in § 9-21-130, a local government by resolution may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the local government may determine, including, without limitation, provisions permitting the local government to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement.
History (3)
- Acts 1986, ch. 770, § 10-6
- 1999, ch. 432, § 9
- 2001, ch. 253, § 12.
§ 9-21-1007. Limitation on maturity of bonds to be refunded. - Unless the outstanding obligations are retired at the time of delivery of the revenue refunding bonds, then the revenue refunding bonds shall not be issued to refund the outstanding obligations unless the outstanding obligations shall mature by their terms or shall be subject to redemption and be called for redemption within ten (10) years from the date of delivery of the revenue refunding bonds. However, this time limitation shall not apply if the comptroller of the treasury or the comptroller's designee approves a greater period in the comptroller of the treasury's or the comptroller's designee's report on the proposed refunding plan.
History (2)
- Acts 1986, ch. 770, § 10-7
- 2010, ch. 868, § 70.
§ 9-21-1008. Sale or exchange of revenue refunding bonds — Agreements to sell. - (a) Any local government, proposing to sell revenue refunding bonds for any authorized purpose under this part and part 1 of this chapter, is authorized to sell the revenue refunding bonds either at a competitive public sale or at a private negotiated sale, as the governing body of the local government may determine.
- (b) If the governing body determines to exchange any revenue refunding bonds, those refunding bonds may be exchanged privately for and in payment and discharge of any of the outstanding obligations being refunded. The refunding bonds may be exchanged for a like or greater principal amount of the obligations being exchanged therefor, except that the principal amount of the revenue refunding bonds may exceed the principal amount of the obligations exchanged therefor only to the extent determined by the governing body to be necessary or advisable to fund redemption premiums and unpaid interest to the date of exchange not provided for otherwise. The holder or holders of the obligations being refunded need not pay accrued interest on the refunding bonds if and to the extent that interest is due or accrued and unpaid on the obligations being refunded and to be surrendered.
- (c) The governing body of a local government may enter into an agreement to sell its revenue refunding bonds under this part providing for delivery of its revenue refunding bonds on a date greater than ninety (90) days and not greater than the first optional redemption date on which the obligations being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the agreement or contract of a local government to sell its revenue refunding bonds as authorized in this subsection (c) is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with § 9-21-130. Agreements to sell revenue refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement to sell the revenue refunding bonds do not require a report of the comptroller of the treasury or the comptroller's designee.
History (2)
- Acts 1986, ch. 770, § 10-8
- 1999, ch. 432, § 10.
§ 9-21-1009. Installment sales or exchanges. - Revenue refunding bonds may be sold or exchanged in installments at different times or an entire issue or series may be sold or exchanged at one (1) time. Any issue or series of revenue refunding bonds may be exchanged in part or sold in part in installments at different times or at one (1) time. The revenue refunding bonds may be sold or exchanged at any time on, before, or after the maturity of any of the outstanding obligations to be refinanced by the revenue refunding bonds.
History (1)
- Acts 1986, ch. 770, § 10-9.
§ 9-21-1010. Notice of refunding. - If, at the time of delivery of the revenue refunding bonds, the obligations to be refunded will not be retired or a valid and timely notice of redemption of the outstanding bonds is not given in accordance with the resolution, indenture or other instrument governing the redemption of the outstanding obligations, then, prior to the issuance of the revenue refunding bonds, the governing body shall cause to be given a notice of its intention to issue the revenue refunding bonds. The notice shall be given either by mail to the owners of all the outstanding obligations to be refunded at their addresses shown on the bond registration records for the outstanding obligations or given by publication one (1) time each in a newspaper having a general circulation in the local government and in a financial newspaper published in New York, New York, having a national circulation. The notice shall set forth the estimated date of delivery of the revenue refunding bonds and identify the obligations, or the individual maturities thereof, proposed to be refunded; provided, that if portions of individual maturities are proposed to be refunded, the notice shall identify the maturities subject to partial refunding and the aggregate principal amount to be refunded within each maturity. If the issuance of the revenue refunding bonds does not occur as provided in the notice, the governing body shall cause notice thereof to be given as provided above in this section. Except as otherwise set forth in this section, the notice required pursuant to this section shall be given whether or not any of the obligations to be refunded are to be called for redemption.
History (2)
- Acts 1986, ch. 770, § 10-10
- 1994, ch. 806, § 8.
§ 9-21-1011. Notice of redemption. - If any of the obligations to be refunded are to be called for redemption, the governing body shall cause the notice of redemption to be given in the manner and at the time required by the resolution or ordinance authorizing the outstanding obligations.
History (1)
- Acts 1986, ch. 770, § 10-11.
§ 9-21-1012. Application of proceeds of sale of revenue refunding bonds. - (a) The principal proceeds from the sale of any revenue refunding bonds shall be applied only as follows, either to the:
- (1) Immediate payment and retirement of the obligations being refunded; or
- (2) Extent not required for the immediate payment of the outstanding obligations being refunded, the proceeds of the revenue refunding bonds shall be deposited in escrow with a bank or trust company either located in this state or regulated by a federal entity to provide for the payment of the outstanding obligations and to pay any expenses incurred in connection with the refunding, and may also be used to pay interest on the revenue refunding bonds prior to the retirement of the outstanding obligations.
- (b) Money in any such escrow fund may be invested in:
- (1) Direct obligations of, or obligations, the principal of and interest on which are guaranteed by the United States;
- (2) Obligations of any agency or instrumentality of the United States;
- (3) Certificates of deposit issued by a bank or trust company located in this state; provided, that such certificates shall be secured by a pledge of any of the obligations referred to in subdivisions (b)(1) and (2) having an aggregate market value, exclusive of accrued interest, equal at least to the principal amount of the certificates of deposit so secured; or
- (4) Obligations which are rated in either of the top two (2) highest rated categories by a nationally recognized rating agency of such obligations and whose interest income is exempt from taxation by the United States, which are direct and general obligations of the state or a political subdivision thereof or obligations guaranteed by the state, to the payment of the principal of and interest on which the full faith and credit of the state are pledged or obligations of any other state or political subdivision or instrumentality thereof; provided, that approval of the comptroller of the treasury or the comptroller's designee is first obtained.
- (c) The bank or trust company holding the proceeds of such revenue refunding bonds in escrow shall deliver to the local government official designated by law as custodian of local government funds, a copy of the document evidencing each transaction relating to the escrow fund, or a report thereof, as each transaction occurs. On or before August 1 of each year, a report of the financial condition of the escrow fund as of June 30 of that year and an operating statement for the escrow fund for the year ending June 30 of such year shall be delivered to the custodian. However, at the discretion of the escrow agent, the report of the financial condition of the escrow fund may be made on a more frequent basis. Nothing herein shall be construed as a limitation on the duration of any deposit in escrow for the retirement of obligations being refunded but which shall not have matured and which shall not be presently redeemable or, if presently redeemable, shall not have been called for redemption.
History (3)
- Acts 1986, ch. 770, § 10-12
- 2001, ch. 253, § 13
- 2010, ch. 868, § 71.
§ 9-21-1013. Powers to secure and to covenant as to revenue refunding bonds. - In order to secure the payment of the principal of and interest on revenue refunding bonds issued pursuant to this part and part 1 of this chapter, and the payment of the obligations of any local government under any interest rate agreement authorized by this part, including its obligation for termination or other non-periodic payments, or in connection with such bonds or interest rate agreements, any local government has the power as to such bonds or interest rate agreements to:
- (1) Pledge all or any part of the fees, rents, tolls, or other charges received or receivable by the local government from any enterprise or enterprises then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such enterprise or enterprises, to the punctual payment of the principal of and interest on bonds issued to finance such enterprise or enterprises, or any other enterprise or enterprises, and the payment of the obligations of any local government under any interest rate agreement authorized by this part, and covenant against thereafter pledging any such fees, rents, tolls, or charges to any other bonds or any other obligations of the local government;
- (2) Covenant as to the fees, rents or tolls to be charged in connection with any enterprise or enterprises, covenant that provisions will be made for the retirement of the outstanding obligations from the proceeds of the revenue refunding bonds being issued, and covenant as to any other use and disposition to be made of the proceeds thereof, and enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to an enterprise which is to be owned or leased by a local government or local government instrumentality;
- (3) Provide for the terms, forms, registration, exchange, execution and authentication of the revenue refunding bonds in a manner not inconsistent with this part and part 1 of this chapter;
- (4) Covenant as to the use and disposition of the proceeds from the sale of the revenue refunding bonds in a manner not inconsistent with this part and part 1 of this chapter;
- (5) Covenant as to limitations on the issuance of additional obligations to finance the improving of the enterprise and on the lien thereof;
- (6) Covenant as to the amount and kind of insurance to be maintained on the enterprise, and the use and disposition of insurance moneys;
- (7) Covenant as to the transfer from the general funds of the local government to the account or accounts of the enterprise, an amount equal to the cost of furnishing the local government or any of its departments, boards or agencies with the services, facilities, and commodities of the enterprise;
- (8) Covenant as to the operation and maintenance of the enterprise;
- (9) Covenant to set aside or pay over reserves and sinking funds for the revenue refunding bonds and as to the disposition thereof;
- (10) Redeem the revenue refunding bonds, and covenant for their redemption and provide the terms and conditions thereof;
- (11) Covenant as to its books of account, as to the inspection and audit thereof, and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105. All audits shall be performed in accordance with the standards established by the comptroller of the treasury;
- (12) Covenant and prescribe as to what occurrences shall constitute “events of default” and the terms and conditions upon which any or all of the revenue refunding bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;
- (13) Covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of any covenant, condition or obligation;
- (14) Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties;
- (15) Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the revenue refunding bonds, or in the discretion of the governing body, to make the revenue refunding bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the revenue refunding bonds and for their security that may be consistent with the Constitution of Tennessee;
- (16) Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of rates, fees, rents and charges received or receivable from any sewer system then existing or to be constructed;
- (17) Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which, in its discretion, it may install and operate and maintain beside specified portions of the public streets;
- (18) Covenant that the costs of operating and maintaining parking facilities payable from the revenues of such parking facilities shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations;
- (19) Vest in a trustee or trustees powers and duties, including the right to enforce any covenants made to secure, or to pay, the revenue refunding bonds, limitations on liabilities, and the terms and conditions upon which the holders of the revenue refunding bonds or any portion or percentage of them may enforce any covenants thereunder or duties imposed thereby;
- (20) Prescribe a procedure by which the terms of any resolution authorizing revenue refunding bonds, or any other contract with bondholders, including, but not limited to, an indenture of trust or similar instrument, may be amended or abrogated and as to the amount of revenue refunding bonds, the holders of which must consent thereto and the manner in which such consent must be given;
- (21) Confer upon the holders of the revenue refunding bonds all rights, powers and remedies which the holders would be entitled to if they were the owners and had possession of the obligations being refunded including, but not limited to, the preservation of the lien of such obligations without extinguishment, impairment or diminution. If this additional security is pledged, then each revenue refunding bond shall contain a recital to the effect that the holder thereof has been granted this additional security; and
- (22) Covenant and provide for the discharge and satisfaction and defeasance of all or any part of revenue refunding bonds and the indebtedness evidenced thereby.
History (2)
- Acts 1986, ch. 770, § 10-13
- 2004, ch. 589, § 2.
§ 9-21-1014. Revenue refunding bonds of the same issue shall be equally and ratably secured. - All revenue refunding bonds of the same issue shall be equally and ratably secured, without priority by reason of number, date of bonds, date of sale, date of execution or of delivery, by a lien upon the revenues of the enterprise, the revenues of which are pledged to the payment of such bonds, in accordance with this part and the resolution authorizing the issuance of the revenue refunding bonds.
History (1)
- Acts 1986, ch. 770, § 10-14.
§ 9-21-1015. Rates prescribed sufficient to produce sufficient revenues. - The governing body of a local government issuing revenue refunding bonds pursuant to this part and part 1 of this chapter shall prescribe and collect reasonable rates, fees or charges for the services, facilities and commodities of the enterprise, and shall revise such rates, fees or charges from time to time whenever necessary so that the enterprise shall be and always remain self-supporting. The rates, fees or charges prescribed shall be at least sufficient to produce revenue to:
- (1) Provide for all expenses of operation and maintenance of the enterprise, including reasonable reserves therefor; and
- (2) Pay when due all bonds and interest thereon, for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reasonable reserves therefor.
History (1)
- Acts 1986, ch. 770, § 10-15.
§ 9-21-1016. Recourse restricted to revenues. - (a) No recourse shall be had for the payment of the revenue refunding bonds, or interest thereon, or any part thereof, against the general funds of any local government, nor shall the credit or taxing power of any local government be deemed to be pledged to the payment of the revenue refunding bonds.
- (b) The revenue refunding bonds, and interest thereon, shall not be a debt of the local government, nor a charge, lien or encumbrance, legal or equitable, upon any property of the local government or upon any income, receipts or revenues of the local government other than the revenues that shall have been pledged to the payment of the revenue refunding bonds. Every revenue refunding bond shall recite in substance that the bond, including interest thereon, is payable solely from the revenues pledged to the payment thereof and that the local government is under no obligation to pay the same, except from such revenues.
History (1)
- Acts 1986, ch. 770, § 10-16.
Part 11 Health Care Revenue Anticipation Notes § 9-21-1101. Authorization, security, and retirement of health care revenue anticipation notes. - The governing body of a local government operating a nursing home is authorized to issue health care revenue anticipation notes under this part and part 1 of this chapter for the purpose of providing funds to be transferred to the state pursuant to an approved intergovernmental transfer agreement between the state and the local government. The principal amount of the notes shall not exceed an amount as determined by the commissioner of finance and administration, as specified in the intergovernmental transfer agreement. The sale of the notes shall first be approved by the comptroller of the treasury or the comptroller's designee. Such notes and any interest thereon shall be secured solely by the payments by the state to the local government pursuant to the intergovernmental transfer agreement, and any payments received from the state by the local government shall immediately be applied to the retirement of any health care revenue anticipation notes issued for such purpose, together with any interest accruing thereon, with any remainder being used in such manner as determined by the governing body of the local government.
History (2)
- Acts 2004, ch. 705, § 2
- 2010, ch. 868, § 72.
§ 9-21-1102. Terms of health care revenue anticipation notes. - Health care revenue anticipation notes shall be sold at not less than par value plus accrued interest. Health care revenue anticipation notes may be sold in one (1) or more series, may bear such date or dates, may bear interest at such rate or rates, which may vary from time to time, may be payable at such time or times, may be in such denomination or denominations, may be in such form, either coupon or registered, may be payable at such place or places, may be executed in such manner, may be payable in such medium of payment, may be subject to such terms of redemption, without a premium, all as may be provided by resolution of the governing body of the local government. The notes shall mature no later than thirty (30) days from the date of issuance.
§ 9-21-1104. Interfund loans. - Local governments are hereby authorized to make interfund loans in accordance with procedures for issuance of notes under this part.
Chapter 22 Public Pledges and Liens § 9-22-101. Short title. - This chapter shall be known and may be cited as the “Perfection, Priority and Enforcement of Public Pledges and Liens Act.”
§ 9-22-102. Intent. - It is the intent and purpose of this chapter to clarify the statutory framework governing the perfection, priority and enforcement of pledges and liens made or granted in connection with the issuance of public obligations, and to preserve the customary practices with respect to these matters that have developed in the state of Tennessee among issuers and purchasers of public obligations. This chapter provides a uniform and comprehensive statutory framework governing the perfection, priority and enforcement of pledges and liens created by certain state and local governments, governmental entities, agencies and instrumentalities in connection with their issuance of debt obligations, and specifies the extent to which the perfection, priority and enforcement of such pledges and liens are excluded from title 47, chapter 9. If any statute of this state, other than title 47, chapter 9, imposes or authorizes a pledge or lien relating to any public obligations, then that statute, any official action entered into or adopted pursuant thereto, and this chapter, to the extent not in conflict with the foregoing, shall in all respects govern the creation, perfection, priority and enforcement of such pledges and liens, and title 47, chapter 9, shall not govern such matters.
§ 9-22-103. Chapter definitions. - In this chapter:
- (1) Except as provided in the following sentence, the term “collateral” means any revenues, operating income, fees, rents, tolls or other charges received or receivable by an issuer from any public works project or otherwise, rights to payment and other rights under agreements, rights to and receipts of tax collections and revenues, rights to and receipts of grants or contributions, any funds, moneys or accounts, and any other personal property that an issuer is authorized to pledge to or grant a lien on to secure the payment of a public obligation, excluding any “goods,” as such term is defined in § 47-9-102(a). In the case of public corporations incorporated under title 7, chapter 82 or chapter 86, the term “collateral” includes, in addition to the foregoing, all other property, real and personal, including “goods,” as such term is defined in § 47-9-102(a), comprising the systems owned and operated by such corporations;
- (2) “Interest rate agreement” means an interest rate swap or exchange agreement, an agreement establishing interest rate floors or ceilings, or both, and other interest rate hedging agreements that an issuer is authorized by statute to enter into;
- (3) “Issuer” means the state of Tennessee, authorities and agencies of the state of Tennessee and all political subdivisions and public instrumentalities of the state of Tennessee, including, without limitation: cities; towns; metropolitan governments; counties; authorities; districts; public corporations; authorities, agencies and instrumentalities of the foregoing; and other public entities. Notwithstanding the foregoing, for purposes of this chapter, the term “issuer” shall not include public corporations incorporated under title 7, chapter 53, or title 48, chapter 101, part 3;
- (4) “Official actions” means the actions, by statute, order, ordinance, charter, resolution, contract or other authorized means, by which an issuer provides for issuance of a public obligation; and
- (5) “Public obligation” means:
- (A) An agreement of an issuer to pay principal and any interest thereon, whether in the form of a contract to repay borrowed money, a lease, an installment purchase agreement or otherwise, and includes a share, participation or other interest in any such agreement; and
- (B) An agreement of an issuer to make payments, including termination or other non-periodic payments, pursuant to an interest rate agreement.
History (2)
- Acts 2001, ch. 290, § 1
- 2004, ch. 589, §§ 6, 7.
§ 9-22-104. Perfection of pledges or liens. - The grant of a pledge or the creation of a lien on collateral by an issuer, which grant or creation is otherwise authorized under Tennessee law, shall be valid and binding from the time that the pledge or lien is created or granted and shall inure to the benefit of the holder or holders of the public obligations with respect to which such pledge or lien was created or granted until the payment in full of the principal thereof and premium and interest thereon, and neither the official action nor any other instrument granting, creating, or giving notice of the pledge or lien need be publicly filed or recorded to preserve, protect or perfect the validity or priority of such pledge or lien.
§ 9-22-105. Priority of pledges or liens. - (a) Public obligations evidenced by multiple bonds, notes, certificates or other instruments of the same issue shall be equally and ratably secured, without priority by reason of number, date, date of sale, date of execution or date of delivery, by any pledge or lien created or granted on collateral to secure the payment thereof, unless otherwise provided by the official action authorizing such public obligations.
- (b) Any pledge or lien on collateral created or granted by an issuer shall be junior in priority to pledges, liens and other security interests created or granted prior to the date such pledge or lien is created or granted; provided, that an official action may provide for the issuance of additional public obligations on a parity with, or senior to, the public obligations authorized thereby.
§ 9-22-106. Enforcement of pledges or liens. - The manner in which the holder or holders of public obligations may enforce the pledge or lien created by an issuer with respect thereto shall be governed by Tennessee law authorizing the creation of such pledge or lien, and, subject to such provisions of Tennessee law, the terms of the official action authorizing such public obligations.
§ 9-22-107. Impairment of contract. - Nothing in this chapter shall be deemed in any way to alter the terms of any agreements made with the holders of any public obligations of an issuer or to authorize an issuer to alter the terms of any such public obligations, or to impair, or to authorize any issuer to impair, the rights and remedies of any creditors of any issuer.
§ 9-22-108. Supplementary nature. - This chapter shall be in addition to and supplemental to all other laws of Tennessee; provided, that wherever the application of this chapter conflicts with the application of such other provisions, such other provisions shall prevail.
2024 Tennessee Code Unannotated