(a) The governing body of a local government acting by resolution may issue and sell interest-bearing capital outlay notes for all purposes for which bonds can be legally authorized and issued by a local government for public works projects as defined in § 9-21-105 and for property valuation, tax assessment, and tax equalization programs.
Terms Used In Tennessee Code 9-21-601
Bonds: means bonds or interim certificates issued pending preparation or delivery of definitive bonds of a local government issued pursuant to this chapter. See Tennessee Code 9-21-105
Governing body: means the legislative body of any local government of this state or any other authority charged with the governing of the affairs of any local government in this state. See Tennessee Code 9-21-105
Local government: means any county, municipality or metropolitan government in this state. See Tennessee Code 9-21-105
Notes: means notes or interim certificates issued pending preparation or delivery of definitive notes of a local government issued pursuant to this chapter. See Tennessee Code 9-21-105
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Obligations: means bonds, notes and any other evidence of indebtedness lawfully issued or assumed by a local government. See Tennessee Code 9-21-105
Public works project: includes any one (1) or any combination of the following: acquisitions of land for the purpose of providing or preserving open land. See Tennessee Code 9-21-105
(b)(1) The sale of all interest-bearing capital outlay notes must first be approved by the comptroller of the treasury or the comptroller’s designee. In order to obtain such approval, the local government shall submit to the comptroller of the treasury or the comptroller’s designee a copy of the proposed resolution or resolution authorizing the notes; a copy of the proposed disclosure statement, if any; a statement showing the estimated annual principal and interest requirements for the notes; a detailed statement showing the estimated cost of issuance, which must include all amounts that the local government would be required to report under § 9-21-134; and a list of the projects to be financed together with any other information deemed pertinent to the note issue by the local government. Based upon the information submitted and any additional information deemed pertinent by the local government, the local government shall state and demonstrate in its request for approval that the proposed sale is feasible, that the proposed sale is in the best interest of the local government, and that the local government is able to amortize the proposed indebtedness, together with all other obligations of the local government then outstanding.(2) The state funding board may establish guidelines to assist the comptroller of the treasury or the comptroller’s designee in reviewing applications submitted by the local government. The guidelines, if any, must be made available to the local government upon request to the comptroller of the treasury or the comptroller’s designee.(3) The comptroller of the treasury or the comptroller’s designee shall notify the governing body of the local government of the comptroller of the treasury’s or the comptroller’s designee’s approval or disapproval within ten (10) days from the date that all required information is received by the comptroller of the treasury or the comptroller’s designee. If the comptroller of the treasury or the comptroller’s designee approves a sale for the capital outlay notes or if the comptroller of the treasury or the comptroller’s designee fails to act within such time, then the local government may proceed to sell the notes in that manner.(4) In determining whether to approve the sale of capital outlay notes, the comptroller of the treasury or the comptroller’s designee shall consider whether the issuance of the capital outlay notes, as compared to the issuance of general obligation bonds, is in the best interest of the local government. The comptroller or the comptroller’s designee shall not approve the sale of any capital outlay notes if the comptroller or the comptroller’s designee determines that the reasonably expected weighted average life of the public works project proposed to be financed materially exceeds the weighted average maturity of the capital outlay notes proposed to be issued and that the public works project should be financed with general obligation bonds.
