Tennessee House Bill HB1787

Tennessee 2023-2024 Regular Session

• Introduced: 1/9/24
• Refer: 1/11/24
• Refer: 1/31/24
• Refer: 2/6/24
• Engrossed: 2/13/24
• Enrolled: 2/23/24
• Passed: 3/7/24
• Chaptered: 3/19/24

Caption

AN ACT to amend Tennessee Code Annotated, Title 5, Chapter 8, Part 3; Title 6, Chapter 56, Part 1 and Title 7, Chapter 82, relative to authorized investments of local governments.

Impact

The amendments proposed by HB 1787 limit the investments of local governments to those rated A or higher by a nationally recognized statistical rating organization. Specifically, it allows for investment in prime commercial paper and other secure financial instruments from federal government-sponsored enterprises. By placing these restrictions, the bill aims to protect taxpayer money and reduce the risks associated with municipal investments. If enacted, this could lead to a shift in how local governments approach their investment strategies and affect their revenue-generating capabilities.

Summary

House Bill 1787 aims to amend sections of the Tennessee Code Annotated that govern the authorized investments for local governments. This bill specifically addresses the types of bonds and debt securities that local governments can invest in, tightening criteria around the ratings of these financial instruments. The goal is to ensure that local governments are investing in safer, more reliable options, enhancing the financial stability of municipalities throughout Tennessee.

Sentiment

The sentiment around HB 1787 appears generally supportive among legislators who prioritize financial security and accountability in government spending. Proponents argue that the bill will safeguard local government investments, which is crucial for public trust. However, there may also be concerns from local officials who see these restrictions as limiting their capacity to make investment decisions tailored to their unique circumstances. Therefore, while there is strong support for the intent of the bill, there is also recognition of the potential constraints it could impose on local governance.

Contention

One of the notable points of contention surrounding HB 1787 is the balance between ensuring safety in investments and allowing local governments the flexibility to manage their finances as they see fit. Critics may argue that the bill's stringent investment criteria could impair local governments from exploring high-yield investment opportunities. Additionally, the specifics around the amendments, which involve numerous numerical alterations and redefinitions of investment classifications, could lead to confusion among local officials tasked with compliance.