Public Funds and Financing

AN ACT to amend Tennessee Code Annotated, Section 9-21-134, relative to debt reporting requirements.

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Atchley, Harshbarger
Last action: 2025-03-21
Official status: Comp. became Pub. Ch. 17
Effective date: Not listed

Plain English Breakdown

The bill does not specify penalties for non-compliance with reporting requirements.

Public Funds and Financing Act

This act changes how Tennessee's state funding board decides what information public entities must disclose about their financial transactions and requires them to report covenant violations and credit rating downgrades.

What This Bill Does

Removes specific details the board needs to consider when deciding what information public entities should disclose.
Requires public entities to report any event of default, covenant violation, or credit rating downgrade within ten business days to the comptroller of the treasury or their designee.

Who It Names or Affects

Public entities in Tennessee, such as cities, counties, and other government bodies.
The state funding board which oversees financial transactions for these entities.

Terms To Know

Covenant violation: Not following the rules set out in a lending document.
Credit rating downgrade: A reduction or removal of a credit rating by an organization recognized by the U.S. Securities and Exchange Commission.

Limits and Unknowns

The bill does not specify how the board will determine what information must be disclosed.
It is unclear if there are any penalties for failing to report covenant violations or credit rating downgrades as required.

Bill History

2025-03-21 Tennessee General Assembly
Comp. became Pub. Ch. 17
2025-03-21 Tennessee General Assembly
Effective date(s) 03/12/2025
2025-03-21 Tennessee General Assembly
Pub. Ch. 17
2025-03-12 Tennessee General Assembly
Signed by Governor.
2025-03-10 Tennessee General Assembly
Transmitted to Governor for action.
2025-03-06 Tennessee General Assembly
Signed by H. Speaker
2025-03-05 Tennessee General Assembly
Signed by Senate Speaker
2025-03-04 Tennessee General Assembly
Enrolled and ready for signatures
2025-03-03 Tennessee General Assembly
Passed H., Ayes 86, Nays 2, PNV 0
2025-02-27 Tennessee General Assembly
Sponsor(s) Added.
2025-02-27 Tennessee General Assembly
Comp. SB subst.
2025-02-27 Tennessee General Assembly
Reset on Reg. Cal. for 3/3/2025
2025-02-27 Tennessee General Assembly
Subst. for comp. HB.
2025-02-27 Tennessee General Assembly
Rcvd. from S., held on H. desk.
2025-02-24 Tennessee General Assembly
H. Placed on Regular Calendar for 2/27/2025
2025-02-24 Tennessee General Assembly
Objected to on Consent Calendar.
2025-02-24 Tennessee General Assembly
Sponsor(s) Added.
2025-02-24 Tennessee General Assembly
Engrossed; ready for transmission to House
2025-02-24 Tennessee General Assembly
Passed Senate, Ayes 33, Nays 0
2025-02-20 Tennessee General Assembly
H. Placed on Consent Calendar for 2/24/2025
2025-02-20 Tennessee General Assembly
Placed on Senate Regular Calendar for 2/24/2025
2025-02-19 Tennessee General Assembly
Placed on cal. Calendar & Rules Committee for 2/20/2025
2025-02-19 Tennessee General Assembly
Rec. for pass; ref to Calendar & Rules Committee
2025-02-18 Tennessee General Assembly
Recommended for passage, refer to Senate Calendar Committee
2025-02-12 Tennessee General Assembly
Placed on cal. State & Local Government Committee for 2/19/2025
2025-02-12 Tennessee General Assembly
Rec. for pass by s/c ref. to State & Local Government Committee
2025-02-11 Tennessee General Assembly
Placed on Senate State and Local Government Committee calendar for 2/18/2025
2025-02-05 Tennessee General Assembly
Placed on s/c cal Cities & Counties Subcommittee for 2/12/2025
2025-01-28 Tennessee General Assembly
Assigned to s/c Cities & Counties Subcommittee
2025-01-16 Tennessee General Assembly
Ref. to State & Local Government Committee
2025-01-15 Tennessee General Assembly
P2C held on desk, pending appointment of Standing Committees
2025-01-15 Tennessee General Assembly
Passed on Second Consideration, refer to Senate State and Local Government Committee
2025-01-14 Tennessee General Assembly
Intro., P1C.
2025-01-14 Tennessee General Assembly
Introduced, Passed on First Consideration
2025-01-13 Tennessee General Assembly
Filed for introduction
2025-01-13 Tennessee General Assembly
Filed for introduction

Official Summary Text

Present law creates the state funding board ("board"), which is composed of the governor, the commissioner of finance and administration, the state treasurer, the secretary of state, and the comptroller of
the treasury. The board may develop model finance transaction policies for use by public entities, including any exemptions deemed necessary or appropriate from filing requirements.

EXEMPTION INFORMATION

For filing exemptions, present law requires th
e board to determine the information to be disclosed, including:



A brief description of the finance transaction.



The issuance, continuing, and one-time costs of the finance transaction.



A brief description of any continuing disclosure obligations with respect to the finance transaction.



A copy of the offering document, if any.



Such other information and in such manner as may be required by the board.

This bill removes this list of considerations for the board when deciding what information must be di
sclosed. This bill simply requires the board to determine the information to be disclosed.

DISCLOSURES

Present law requires public entities to disclose financial obligations and events of default on the Electronic Municipal Market Access website of the
Municipal Securities Rulemaking Board (MSRB), and for those public entities that are not subject to such MSRB obligations, to disclose any event of default to the comptroller of the treasury or the comptroller's designee within 10 business days, in accor
d
ance with guidelines approved by the board.

This bill requires public entities to also disclose any event of default, covenant violation, or credit rating downgrade to the comptroller of the treasury or the comptroller's designee within 10 business days,
in accordance with guidelines approved by the board, regardless of whether or not the entity is subject to MSRB obligations.

ON FEBRUARY 27, 2025, THE HOUSE SUBSTITUTED SENATE BILL 114 FOR HOUSE BILL 136 AND RESET SENATE BILL 114.

Current Bill Text

Read the full stored bill text

SENATE BILL 114
By Harshbarger

HOUSE BILL 136
By Atchley

HB0136
000709
- 1 -

AN ACT to amend Tennessee Code Annotated, Section 9-
21-134, relative to debt reporting requirements.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 9-21-134(a), is amended by adding
the following as new subdivisions:
( ) "Covenant violation" means noncompliance with one (1) or more covenants
as defined in a lending document of a finance transaction;
( ) "Credit rating downgrade" means the reduction or elimination of a credit
rating by any nationally recognized statistical rating organization as identified by the
United States securities and exchange commission;
SECTION 2. Tennessee Code Annotated, Section 9-21-134(c), is amended by deleting
the subsection and substituting:
(c)
(1) The board shall determine the information to be disclosed pursuant to
subdivision (c)(2).
(2) Not later than forty-five (45) days following the issuance, reissuance,
incurrence, execution, or assumption of a finance transaction, the public entity
shall submit, or cause to be submitted, the information required by the board
pursuant to subdivision (c)(1) to the governing body of the public entity, with a
copy also submitted to the comptroller of the treasury or the comptroller's
designee. If an open meeting of the governing body is not scheduled within the
forty-five-day period, then the public entity shall give a copy to each member of

- 2 - 000709

the body within such period and present the information required by subdivision
(c)(1) to the body at the next scheduled meeting.
SECTION 3. Tennessee Code Annotated, Section 9-21-134, is amended by inserting
the following as a new subsection (d) and redesignating the existing subsection (d) as
subsection (e):
(d) The state funding board shall require public entities to:
(1) Timely comply with continuing disclosure obligations, if applicable;
(2) Disclose financial obligations and events of default on the Electronic
Municipal Market Access (EMMA) website of the Municipal Securities
Rulemaking Board (MSRB), if applicable; and
(3) Disclose any event of default, covenant violation, or credit rating
downgrade to the comptroller of the treasury or the comptroller's designee within
ten (10) business days, in accordance with guidelines approved by the board.
SECTION 4. This act takes effect upon becoming a law, the public welfare requiring it.