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SENATE BILL 1430
By Johnson
HOUSE BILL 1407
By Lamberth
HB1407
003646
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AN ACT to authorize the state of Tennessee, acting by
resolutions of its funding board, to issue and sell
its bonds and bond anticipation notes to provide
for acquisition of equipment and sites, and
erection, construction, and equipment of sites and
buildings, expressly including the acquisition of
existing structures for expansion, improvements,
betterments, and extraordinary repairs to existing
structures, for construction of highways, and
repair, replacement, or rehabilitation of bridges,
and for grants to any county, metropolitan
government, incorporated town, city, special
district of the state, or any governmental agency or
instrumentality of any of them; to make grants to
industrial development corporations to provide for
acquisition of equipment and acquisition, site
preparation, erection, construction, and equipment
of sites and buildings; and infrastructure
improvements and development; to issue its debt
in excess of the authorized amount to fund
discount and costs of issuance; and to provide for
the expenditure of said funds. This act makes
appropriations for an indefinite period of time for
the purpose of allocating the proceeds of the
bonds and notes authorized by this act.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. The state of Tennessee, acting by resolutions of its funding board, is
hereby authorized and empowered to issue and sell direct general obligation bonds of the state
of Tennessee in amounts not to exceed one billion nine million five hundred forty-seven
thousand dollars ($1,009,547,000) to effectuate the purposes specified in Section 4 of this act.
Further, the funding board is authorized to sell bonds in amounts not to exceed 2.5% of the
amounts specified above and authorized in Section 4, for the purpose of funding discount and
costs of issuance. Such bonds may be issued and sold in one (1) block or in several
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installments and separately or together with other general obligation bonds of the state of
Tennessee as the board may determine, either at public or private sale as provided by law.
SECTION 2. The bonds and the interest bearing coupons attached thereto, if any, must
be in such form, mature at such time or times within twenty (20) years from the date of their
issuance subject to Section 7 of this act, be executed in such manner, be payable at such place
or places both as to principal and interest, and be in such denominations and bear such rate or
rates of interest, payable in such manner, as the funding board shall by resolution direct;
provided, however, that the maximum rate determined by the funding board in no instance shall
exceed the legal rate as provided in Tennessee Code Annotated, Section 47-14-103. The
bonds and interest payable thereon are exempt from taxation by the state of Tennessee or by
any county, municipality, or taxing district of the state except inheritance, transfer, and estate
taxes.
SECTION 3. When the bonds are so issued and sold, they are direct general obligations
of the state of Tennessee for the payment of which well and truly to be made according to the
tenor, effect, and terms thereof the full faith and credit of the state, together with its taxing
power, shall irrevocably be pledged; and the bonds as authorized in this act must be issued
agreeable to the terms of Tennessee Code Annotated, Title 9, Chapter 9; and they must be
financed, retired, and paid both as to principal and interest as provided in that chapter and are
subject to the terms and conditions therein and herein contained. When the bonds are sold and
proceeds paid over to the state treasurer, the funds must be paid out by the treasurer and the
proper fiscal officers of the state, as provided by general law and this act, but only, except for
accrued interest paid as part of the purchase price on order of the proper administrative
authorities of the agency or department in this act named for the benefit of which such bonds
have been authorized and only to the extent such bonds have in fact been issued for the benefit
of such agency or department.
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SECTION 4. The proceeds of any and all issues of bonds authorized in this act must be
allocated to the following departments:
(1) Department of Finance and Administration in the amount of seven hundred
ninety-five million five hundred forty-seven thousand dollars ($795,547,000) and
expended for the purposes of acquisition of equipment and sites, and erection,
construction and equipment of sites and buildings, expressly including the acquisition of
existing structures for expansion, improvements, betterments, and extraordinary repairs
to existing structures, and for the purpose of making grants to any county, metropolitan
government, incorporated town, city, special district of the state, or any governmental
agency or instrumentality of any of them, if such project grant is approved by the State
Building Commission. Such grants so identified and approved are determined to be for
a public purpose.
(2) Department of Finance and Administration in the amount of one hundred
thirty-four million dollars ($134,000,000) to provide funds for the state office buildings
and support facilities revolving fund to be allocated and expended for the purposes of
acquisition of equipment and sites, and erection, construction, and equipment of sites
and buildings, expressly including the acquisition of existing structures for expansion,
improvements, betterments, and extraordinary repairs to existing structures.
(3) Department of Transportation in the amount of eighty million dollars
($80,000,000) and expended for the construction of highways and for the purpose of
acquisition of equipment and sites, and erection, construction, and equipment of sites
and buildings, expressly including the acquisition of existing structures for expansion,
improvements, betterments, and extraordinary repairs to existing structures, and repair,
replacement, or rehabilitation of bridges.
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(4) In its discretion, the funding board is authorized to issue bonds in amounts
not to exceed 2.5% of the amounts specified above in subdivision (1), the proceeds of
which are to be allocated to such departments as determined by the funding board and
expended for the purpose of funding discount and the costs of issuance.
SECTION 5. The proper authorities enumerated in this act and charged with the duty of
expending the funds shall have authority to proceed with the projects authorized in this act and
for that purpose may hire an architect or architects, advertise for bids, and award contracts, all
within the provisions of the general law, expressly including Tennessee Code Annotated, Title 4,
Chapter 15, and rules of the state building commission, and in agreement with the terms of this
act. No contract, including a contract for architectural services, involving a project authorized by
this act which is subject to the approval of the state building commission shall be entered into
unless and until that contract shall have been approved by the state building commission. The
foregoing provisions shall not apply to any grants authorized in this act, but the department of
finance and administration, charged with the duty of expending funds, shall have the authority to
enter into such grant contracts and perform in accordance with their terms only after the projects
have been approved by the state building commission.
SECTION 6. The allocation made to each agency or department as provided in Section
4 may be applied as determined by the funding board to bear its appropriate portion of discount
and costs of issuance.
SECTION 7. Pending the issuance of the definite bonds authorized by this act, the state
of Tennessee, acting by resolutions of its funding board, is authorized and empowered to issue
and sell, either at public or private sale, together with accrued interest thereon, its interest-
bearing bond anticipation note or notes. Such note or notes must be authorized by resolution of
the funding board. The note or notes must bear such date or dates, bear interest at such rate or
rates, be in such denominations, be in such form, be executed in such manner, be payable in
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such medium of payment, at such place or places, and mature on such date or dates, subject to
such terms and conditions as such resolution or resolutions may provide. In its discretion, the
funding board may provide that a bond anticipation note or any renewal of such note may
mature more than five (5) years from the date of issue of the original note; provided, that an
amortization schedule of repayment of principal is established for the project funded by the note
and provisions are made such that any note or renewal note or bond refunding such note
attributed to the financing of such project must be redeemed or retired no later than either
twenty-five (25) years from the date of issue of such original note or twenty (20) years from the
date the project is completed and placed in full service, whichever is earlier. Provisions of
general law with respect to authentication, execution, and registration of general obligation
bonds of the state of Tennessee shall also apply to the notes to the extent applicable. The note
or notes and the interest payable thereon are exempt from taxation by the state of Tennessee or
by any county, municipality, or taxing district of the state except inheritance, transfer, and estate
taxes. Any resolution or resolutions of the funding board authorizing the issuance of such bond
anticipation note or notes shall provide that the same are issued in anticipation of the bonds
authorized under this act and shall further provide that the full faith and credit and taxing power
of the state of Tennessee are pledged to the payment thereof.
In its discretion, the funding board is authorized to issue bond anticipation notes, the
proceeds of which are to be allocated to the funding board and expended for the purpose of
funding discount and the costs of issuance, as part of the 2.5% additional amounts authorized
by Section 4 of this act.
SECTION 8. No bonds shall be issued under the authority of this act until such time as
the general assembly has appropriated sufficient funds to pay the first year's obligation of
principal and interest on the amount of bonds to be issued, and the state funding board has
determined that such funds are available.
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SECTION 9. Notwithstanding any other provision of this act to the contrary, the bonds
and bond anticipation notes authorized by this act may be designated "college savings bonds"
and be issued pursuant to the provisions of the Baccalaureate Education Savings for
Tennessee Act, Chapter 190, Public Acts of 1989.
SECTION 10. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
SECTION 11. No expenditure of public funds pursuant to this act shall be made in
violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 United
States Code 2000d.
SECTION 12. This act takes effect upon becoming a law, the public welfare requiring it.