Public Funds and Financing - As enacted, redefines "local government" to include a water, wastewater, or energy authority for purposes of the present law applicable to bonds and notes issued by local governments; makes o, the official text

elil•lll••••

                                        ....~.--~~~

                                                 :::i~4~1-.(-!,,;r,·.\?C•'R~IC-,jU:~,"(~"l,'R:J'EW~ji:~r~,,:!i:

                                       .......~~"*'-.~.~~..~•.--~...

        State efJmnessee

                            PUBLIC CHAPTER NO. 218

                                                    SENATE BILL NO. 191

                                                              By Taylor

                                           Substituted for: House Bill No. 1338

                                        By Lamberth, Cochran, McCalmon, Davis

AN ACT to amend Tennessee Code Annotated, Section 9-21-133 and Title 9, Chapter 21, Part 4,
          relative to local government debt.

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

          SECTION 1. Tennessee Code Annotated, Section 9-21-133(a)(1)(B), is amended by deleting
subdivision (vii) and substituting the following:

                    (vii) Is evidenced by a loan with either this state or a department or agency of the
          federal government; or

          SECTION 2. Tennessee Code Annotated, Section 9-21-133(a)(3), is amended by deleting
the subdivision and substituting the following:

                    (3) "Local government" means any incorporated city or town; metropolitan
          government; county; water, wastewater, or energy authority; or utility district; and

          SECTION 3. Tennessee Code Annotated, Section 9-21-133(b), is amended by deleting the
subsection and substituting the following:

                    (b) For purposes of this section, principal of debt must be treated as being payable or
          amortized upon its stated maturity or upon any mandatory redemption date.

          SECTION 4. Tennessee Code Annotated, Title 9, Chapter 21, Part 4, is amended by adding
the following new section:

          9-21-409.

                    (a) As used in this section:

                              (1) "Heightened risk debt" means any debt obligation containing:

                                        (A) A variable interest rate or rates;

                                        (B) An interest rate reset provision, where the interest rate can be
                              changed at certain intervals during the life of the debt; or

                                        (C) A put option, where the holder of the debt has the ability to force
                              repayment before the final maturity date of the debt; and

                              (2) "Local government" means any incorporated city or town; metropolitan
                    government; county; water, wastewater, or energy authority; or utility district.

                    (b) Prior to issuing any heightened risk debt, a local government shall submit a
          request to the comptroller of the treasury or the comptroller's designee for approval. The
          comptroller or the comptroller's designee may request any additional information as may be
          required to properly review the request. The comptroller or the comptroller's designee shall
          evaluate each request based on the local government's particular circumstances and shall
SB 191
         approve the request only if a determination is made that the debt terms are in the public's
         interest.
                   (c) The comptroller of the treasury or the comptroller's designee shall report the
         comptroller's approval or disapproval of the request to the governing body of the local
         government within fifteen (15) business days after receipt of the request and all requested
         supplemental documentation. After receiving the approval of the comptroller or the
         comptroller's designee of the request or after the expiration of fifteen (15) business days from
         the date the request and all supplemental documentation are received by the comptroller or
         the comptroller's designee and no disapproval having been reported by the comptroller or the
         comptroller's designee, whichever date is earlier, the local government may take such action
         with reference to the proposed request as it deems advisable in accordance with this section.
                   (d) This section does not apply to loans or interim certificates with or purchased by
         either this state or a department or agency of the federal government.
          SECTION 5. This act takes effect July 1, 2025, the public welfare requiring it.

                                                                 2
         SENATE BILL NO. 191

PASSED:  April 7, 2025

                                                RANDY ~NALLY

                                   SPEAKER OF THE ~ENA TE

                        CAMEROW-SEXTON,SPEAKER

                        HOUSE OF REPRESENTATIVES

Aprr APPROVED this ~,ii-I- day of  f               2025

         ~
                               BILL LEE, GOVERNOR