Tennessee Code 9-9-105 – Bonds constitute direct state obligations – Debt obligations constitute a charge and lien – Satisfaction of debt service coverage test
(a) All bonds issued (and to be issued) under this chapter, all notes issued (and to be issued) in anticipation of such bonds, and all tax revenue anticipation notes issued (and to be issued) under this chapter shall constitute direct general obligations of the state of Tennessee for the payment of the principal of and premium, if any, and interest on which there is also pledged the full faith and credit of the state of Tennessee. Subject only to § 9-9-104(a), all such debt obligations shall constitute a charge and lien upon the entire fees, taxes and other revenues and funds allocated to the general fund, the debt service fund, and the highway fund; and, if necessary, upon the first such fees, taxes, revenues and funds thereafter received and allocated to such funds, except only such fees, taxes, revenues and funds as may be otherwise legally restricted.
Terms Used In Tennessee Code 9-9-105
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.
Highway: includes public bridges and may be held equivalent to the words "county way" "county road" or "state road". See Tennessee Code 1-3-105
Lien: A claim against real or personal property in satisfaction of a debt.
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) The state of Tennessee hereby covenants with the persons who now or may hereafter hold any debt obligations described in § 9-9-105(a) that it will raise fees, taxes and other revenues sufficient, together with funds on hand derived from all sources, to pay the principal of and premium, if any, and interest on such obligations as and when due and payable.(c)(1) The state of Tennessee hereby covenants with the persons who now or may hereafter hold any bonds issued under this chapter that no bonds shall be issued under this chapter after July 1, 2013, unless the following debt service coverage test is satisfied: the amount necessary to pay the maximum annual debt service payable in the then current or any future fiscal year, is not greater than ten percent (10%) of the amount of total state tax revenue allocated to the general fund, to the debt service fund, and to the highway fund for the immediately preceding fiscal year.(2) For purposes of satisfying this test, “state tax revenues” are defined as those taxes, licenses, fees, fines, and permits collected by the department of revenue and allocated to the general fund, the debt service fund, and the highway fund excluding the portion of those taxes shared with local governments.(3) “Debt service”, for this purpose, means and includes principal of and interest on all outstanding bonds issued under this chapter and the bonds then proposed to be issued under this chapter, in the aggregate; provided, that in determining the outstanding bonds, there shall be excluded any outstanding bonds the payment of which has been fully provided for by funds or securities (including expected income therefrom), or both, set aside for that purpose.
