Tennessee Code 68-221-503 – Authorization for loans to municipalities for waterworks – Funding – Conditions of approval and repayment – Loan eligibility of municipalities not receiving state-shared taxes
Construction: means the erection, building, acquisition, alteration, reconstruction, improvement or extension of waterworks, preliminary planning to determine the economic and engineering feasibility of waterworks, the engineering, architectural, legal, fiscal and economic investigations and studies, surveys, designs, plans, working drawings, specifications, procedures and other action necessary in the construction of waterworks, and the inspection and supervision of the construction of waterworks. See Tennessee Code 68-221-502
Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
Municipality: means any county, metropolitan government, incorporated town or city, or special district of this state empowered to provide water services, or any combination of two (2) or more of the foregoing acting jointly, in connection with an eligible project. See Tennessee Code 68-221-502
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
User fees: Fees charged to users of goods or services provided by the government. In levying or authorizing these fees, the legislature determines whether the revenue should go into the treasury or should be available to the agency providing the goods or services.
Waterworks: includes all or any part of the following: source of supply, pumping facilities, purification works, collection and storage facilities and distribution system for water, together with all necessary parts and appurtenances for proper operation. See Tennessee Code 68-221-502
(1) The state is authorized to make loans to any municipality for the construction of waterworks.(2) Such loans shall be made from the proceeds of bonds or notes issued by the authority for the purpose of making such loans.(3) The authority shall establish the repayment schedule for the repayment of the loan, and the loan agreement, shall be between the state, acting through the department and the authority, and the municipality; provided, that at the time of approval of the loan agreement, the annual repayment schedule applicable to all approved loans to a municipality under this part, when combined with annual repayment schedules applicable to approved loans and grants to the municipality under part 2 of this chapter and [former] chapter 211, part 4 of this title [repealed], shall not exceed two hundred percent (200%) of the unobligated amount of annual state-shared taxes paid to the municipality as shown by the latest completed audit for the state’s fiscal year; provided further, that the authority may impose more strict requirements if, in its judgment, it is deemed necessary or advisable.(4)(A) Nothing contained herein shall require a uniform test for all loans, it being the intent of the general assembly that the authority exercise discretion based on the facts and circumstances of each loan.(B) In exercising its discretion, the authority shall take into consideration the general financial condition of the municipality receiving the loan and the ability of the system, for which such loan is to be made, to generate user fees sufficient to pay the costs of operation, maintenance and debt service of the system, including depreciation in accordance with generally accepted accounting principles.(5) For purposes of determining compliance with this subsection (a), the annual repayment schedule for each loan or grant shall be, in cases prior to the funding of such grants or loans or where such grants or loans have been financed on an interim basis other than by bonds, an estimated annual repayment schedule showing debt service requirements under the grant or loan agreements as if the bonds to be issued to fund such grants or loans will bear interest at a rate per annum and mature in such manner as the authority shall establish at the time of approval of each such grant or loan and, in cases where bonds have been issued to fund such grant or loan, the actual debt service requirements on such bonds.(b) Only municipalities receiving state-shared taxes shall be eligible to participate in the loan program; provided, that one (1) or more municipalities receiving state-shared taxes may enter into a loan agreement with the state and loan the proceeds of such waterworks loan to a municipality not receiving state-shared taxes.
