Public Funds and Financing - As enacted, broadens certain disclosure obligations of state and local governmental entities by requiring their disclosure of covenant violations and credit rating downgrades to the comptroll, the official text

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PUBLIC CHAPTER NO. 17

                                                     SENATE BILL NO. 114

                                                   By Harshbarger, Hatcher

                                             Substituted for: House Bill No. 136

                                                      By Atchley, Vaughan

AN ACT to amend Tennessee Code Annotated, Section 9-21-134, relative to debt reporting
          requirements.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Section 9-21-134(a), is amended by adding the
following as new subdivisions:

                    ( ) "Covenant violation" means noncompliance with one (1) or more covenants as
          defined in a lending document of a finance transaction;

                    ( ) "Credit rating downgrade" means the reduction or elimination of a credit rating by
          any nationally recognized statistical rating organization as identified by the United States
          securities and exchange commission;

          SECTION 2. Tennessee Code Annotated, Section 9-21-134(c), is amended by deleting the
subsection and substituting:

                    (c)(1) The board shall determine the information to be disclosed pursuant to subdivision
                    (c)(2).

                              (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 required by the board pursuant to
                    subdivision (c)(1) to the governing body of the public entity, with a copy also submitted
                    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 required by subdivision (c)(1) to the body at the next scheduled meeting.

          SECTION 3. Tennessee Code Annotated, Section 9-21-134, is amended by inserting the
following as a new subsection (d) and redesignating the existing subsection (d) as subsection (e):

                    (d) The state funding board shall require public entities to:

                              (1) Timely comply with continuing disclosure obligations, if applicable;

                              (2) Disclose financial obligations and events of default on the Electronic
                    Municipal Market Access (EMMA) website of the Municipal Securities Rulemaking
                    Board (MSRB), if applicable; and

                              (3) Disclose any event of default, covenant violation, or credit rating downgrade
                    to the comptroller of the treasury or the comptroller's designee within ten (10) business
                    days, in accordance with guidelines approved by the board.

          SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it.
         SENATEBILLNO. 114

PASSED:  March 3, 2025

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                                       \     RANDY-M~NALLY

                                          SPEAKER OF THE SENATE

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                                       CAME  SEXTON, SPEAKER

                                       HOUSE OF REPRESENTATIVES

fld- APPROVED this  day of tv'\o.Yc_.L       2025

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