(a) Any municipal corporation is authorized to enter into such leases, loan agreements, sales contracts or operating contracts by resolution of its governing body or, in the case of such agreements or contracts for the financing of a project or projects eligible to be financed pursuant to title 7, chapter 34, with a term of not more than five (5) years, by resolution of the governing body or the board or commission having jurisdiction, control and management of the utility system of the municipal corporation being financed, with an authority or other contracting party with respect to projects or parts thereof, for such term or terms and upon such conditions as may be determined by such governing body, board or commission, as appropriate, notwithstanding and without regard to the restrictions, prohibitions or requirements of any other law, whether public or private.

Terms Used In Tennessee Code 12-10-116

  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Governing body: means the body in which the general legislative powers of a municipal corporation are vested, and in the case of counties means the legislative body of the respective counties. See Tennessee Code 12-10-103
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Loan agreement: means an agreement providing for an authority to loan the proceeds derived from the issuance of bonds pursuant to this chapter to one (1) or more contracting parties to be used to pay the cost of one (1) or more projects and providing for the repayment of such loan by the other contracting party or parties, and which may provide for such loans to be secured by or evidenced by one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of the contracting party or parties, delivered to the authority or to the trustee under the indenture pursuant to which the bonds were issued. See Tennessee Code 12-10-103
  • Municipal corporation: means any county, metropolitan government, incorporated city or town, utility district, school district, power district, sanitary district or other municipal, quasi-municipal or governmental body or political subdivision in this state, and any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter authorized by law to be created. See Tennessee Code 12-10-103
  • Operating contract: means the written undertaking whereby the authority and a municipal corporation contract respecting construction of improvements upon and/or for the operation and maintenance of property owned by or leased by other than the authority to the municipal corporation. See Tennessee Code 12-10-103
  • other contracting party: means any party to a sale contract or loan agreement except the authority. See Tennessee Code 12-10-103
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Project: includes an undertaking whereby a municipal corporation contracts with an authority respecting construction of improvements upon and/or for the operation and maintenance of property owned by or leased by other than the authority to the municipal corporation. See Tennessee Code 12-10-103
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b) Any lease, loan agreement, sales contract or operating contract described in this chapter may be entered into for the purpose of refunding any bonds of a municipal corporation which can be refunded under title 9, chapter 21, parts 9 and 10; or for the purpose of refunding capital outlay notes which can be refunded under title 9, chapter 21, part 6. Prior to the adoption of the resolution authorizing such an agreement or contract, a plan of refunding shall be submitted for review to the comptroller of the treasury or the comptroller’s designee who shall proceed in the same manner as provided in § 9-21-903, in the case of an agreement or contract described in § 12-10-115(a), or § 9-21-1003, in the case of an agreement or contract described in § 12-10-115(b). If the report of the comptroller of the treasury or the comptroller’s designee states that the plan of refunding does not substantially comply with the guidelines, if any, described in § 9-21-903, in the case of an agreement or contract described in § 12-10-115(a), or § 9-21-1003, in the case of an agreement or contract described in § 12-10-115(b), a notice in substantially the form set forth in §§ 9-21-903(c) and 9-21-1003(c), as applicable, shall be published prior to the execution of the agreement or contract in a newspaper having general circulation in the local government.
(c) With respect to all or any portion of any lease, loan agreement, sales contract and operating contract described in this chapter, entered into or anticipated to be entered into, at any time during the term of the lease, loan agreement or operating contract, and upon receipt of a report of the comptroller of the treasury or the comptroller’s designee finding that the contracts and agreements authorized in this subsection (c) are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in § 12-10-111(l), a municipal corporation, by resolution, may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the municipal corporation may determine, including, without limitation, provisions permitting the municipal corporation to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such lease, loan agreement or operating contract.
  Previous section
Next section  
 Chapter 10 Contents