HOUSE BILL 1403
By Hicks G
SENATE BILL 1392
By Watson
SB1392
001588
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AN ACT to authorize the state of Tennessee, acting by
resolutions of its funding board, to issue and sell
its bonds and bond anticipation notes to provide
for acquisition of equipment and sites, and
erection, construction, and equipment of sites and
buildings, expressly including the acquisition of
existing structures for expansion, improvements,
betterments, and extraordinary repairs to existing
structures, for construction of highways, and
repair, replacement, or rehabilitation of bridges,
and for grants to any county, metropolitan
government, incorporated town, city, special
district of the state, or any governmental agency
or instrumentality of any of them; to make grants
to industrial development corporations to provide
for acquisition of equipment and acquisition, site
preparation, erection, construction, and
equipment of sites and buildings; and
infrastructure improvements and development;
and to provide for the expenditure of said funds;
to issue its debt in excess of the authorized
amount to fund discount and costs of issuance;
and to provide for the expenditure of said funds.
This act makes appropriations for an indefinite
period of time for the purpose of allocating the
proceeds of the bonds and notes authorized by
this act.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. The state of Tennessee, acting by resolutions of its funding board, is
hereby authorized and empowered to issue and sell direct general obligation interest-bearing
bonds of the state of Tennessee in amounts not to exceed thirty million dollars ($30,000,000) to
effectuate the purposes specified in Section 4 of this act. Further, the funding board is
authorized to sell bonds in amounts not to exceed two and one-half percent (2.5%) of the
amounts specified above and authorized in Section 4, for the purpose of funding discount and
costs of issuance. Such bonds may be issued and sold in one (1) block or in several
installments and separately or together with other general obligation bonds of the state of
Tennessee as the board may determine, after advertisement as provided by law.
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SECTION 2. The bonds and the interest-bearing coupons attached thereto, if any, shall
be in such form, mature at such time or times within twenty (20) years from the date of their
issuance, be executed in such manner, be payable at such place or places both as to principal
and interest, and be in such denomination and bear such rate of interest, payable in such
manner, as the funding board shall by resolution direct; provided, however, that the maximum
rate determined by the funding board in no instance shall exceed the legal rate as provided in
Section 47-14-103 of Tennessee Code Annotated. The bonds shall be sold by the funding
board after advertisement as provided by law, together with the accrued interest thereon, and
when they have been sold, the proceeds derived from the sale thereof shall be paid to the state
treasurer to be disbursed by the treasurer and other fiscal officers and agencies of the state as
provided by the general law and this act. The bonds and interest payable thereon shall be
exempt from taxation by the state of Tennessee or by any county, municipality, or taxing district
of the state except inheritance, transfer, and estate taxes.
SECTION 3. When the bonds are so issued and sold, they shall be direct general
obligations of the state of Tennessee for the payment of which well and truly to be made
according to the tenor, effect, and terms thereof the full faith and credit of the state together with
its taxing power, shall irrevocably be pledged; and the bonds as authorized herein shall be
issued agreeable to the terms of Title 9, Chapter 9 of Tennessee Code Annotated; and they
shall be financed, retired, and paid both as to principal and interest as provided in that chapter
and shall be subject to the terms and conditions therein and herein contained. When the bonds
are sold and proceeds paid over to the state treasurer, the funds shall be paid out by the
treasurer and the proper fiscal officers of the state, as provided by general law, but only on
order of the proper administrative authorities of the agency or department herein named for the
benefit of which such bonds have been authorized and only to the extent such bonds have in
fact been issued for the benefit of such agency or department.
SECTION 4. The proceeds of any and all issues of bonds herein authorized shall be
allocated to the Tennessee higher education commission to be allocated and expended for the
purpose of capital outlay and maintenance for institutions of higher education. In its discretion
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the funding board is authorized to issue bonds in amounts not to exceed two and one-half
percent (2.5%) of the amounts specified above, the proceeds of which are to be allocated to the
funding board and expended for the purpose of funding discount and the costs of issuance.
SECTION 5. The proper authorities heretofore enumerated and charged with the duty of
expending the funds shall have authority to proceed with the projects authorized herein and for
that purpose may hire an architect or architects, advertise for low bids and award contracts to
low bidders, all within the provisions of the general law, expressly including the provisions of
Title 4, Chapter 15 of Tennessee Code Annotated, and in agreement with the terms of this act.
No contract, including a contract for architectural services, involving a project authorized by this
act which is subject to the approval of the state building commission shall be entered into unless
and until that contract shall have been approved by the building commission.
SECTION 6. The appropriation made to each agency or department as provided in
Section 4 may be applied as determined by the funding board to bear its appropriate portion of
discount and costs of issuance.
SECTION 7. Pending the issuance of the definite bonds authorized by this act, 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, together with accrued interest thereon, its
interest-bearing bond anticipation note or notes. Such note or notes shall be authorized by
resolution of the funding board, shall bear such date or dates, as such resolution or resolutions
provide. The note or notes shall bear interest at such rate or rates, be in such denominations,
be in such form, be executed in such manner, be payable in such medium of payment, at such
place or places and mature on such date or dates, subject to such terms and conditions as such
resolution or resolutions may provide. In its discretion, the funding board may provide that a
bond anticipation note or any renewal of such note may mature more than five (5) years from
the date of issue of the original note; provided, that an amortization schedule of repayment of
principal is established for the project funded by the note and provisions are made such that any
note or renewal note or bond refunding such note attributed to the financing of such project shall
be redeemed or retired either twenty-five (25) years from the date of issue of such original note
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or twenty (20) years from the date the project is completed and placed in full service, whichever
is earlier. Provisions of general law with respect to authentication, execution, and registration of
general obligation bonds of the state of Tennessee shall also apply to the notes to the extent
applicable. The note or notes and the interest payable thereon shall be exempt from taxation by
the state of Tennessee or by any county, municipality, or taxing district of the state except
inheritance, transfer, and estate taxes. Any resolution or resolutions of the funding board
authorizing the issuance of such bond anticipation note or notes shall provide that the same are
issued in anticipation of the bonds authorized hereunder and shall further provide that the full
faith and credit of the state of Tennessee are pledged to the payment thereof.
SECTION 8. No bonds shall be issued under the authority of this act until such time as
the general assembly has appropriated sufficient funds to pay the first year's obligation of
principal and interest on the amount of bonds to be issued and the state funding board has
determined that such funds are available.
SECTION 9. Notwithstanding any other provision of this act to the contrary, the bonds
and bond anticipation notes authorized by this act may be designated "college savings bonds"
and be issued pursuant to the provisions of the Baccalaureate Education Savings for
Tennessee Act, Chapter 190 of the Public Acts of 1989.
SECTION 10. If any provision of this act or the application thereof to any person or
circumstance is held invalid, such invalidity shall not affect other provisions or applications of the
act which can be given effect without the invalid provision or application, and to that end the
provisions of this act are declared to be severable.
SECTION 11. No expenditure of public funds pursuant to this act shall be made in
violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 United
States Code 2000d.
SECTION 12. This act takes effect upon becoming a law, the public welfare requiring it.