SENATE BILL 191
By Taylor
HOUSE BILL 1338
By Lamberth
HB1338
000710
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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;
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(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 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.
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(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.