Humphreys County

SENATE BILL 1566
By Roberts

HOUSE BILL 1500
By Reedy
HB1500
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AN ACT to create the Humphreys County Water
Authority.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Creation.
A water and wastewater authority to be known as the "Humphreys County Water
Authority" is hereby created and established for and on behalf of the citizens of
Humphreys County, Tennessee, and the surrounding region.
SECTION 2. Purpose of Authority.
It is hereby declared that the Humphreys County Water Authority, created
pursuant to this act, shall be public and a governmental body and a political subdivision
of the state of Tennessee. It is further declared that the planning, acquisition, operating,
and financing of water and wastewater systems by said Authority is hereby declared to
be a public and governmental purpose and a matter of public necessity.
SECTION 3. Definitions.
Whenever used in this act, unless a different meaning clearly appears in the
context, the following terms, whether used in the singular or plural, shall be given the
following respective interpretations:
(a) "Authority" means the Humphreys County Utility Authority created by
this act;
(b) "Board" means the board of commissioners of the Authority;

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(c) "Bonds" means bonds, interim certificates or other debt obligations of
the Authority issued pursuant to this act, including joint obligations of the
Authority and the county, cities and/or any participating governmental entity;
(d) "Cities" means the City of Waverly, Tennessee, the City of McEwen,
Tennessee, and the City of New Johnsonville, Tennessee;
(e) "County" means Humphreys County, Tennessee;
(f) "Governing body" means the legislative body of a utility district, city,
town, county, or other political subdivision of the state of Tennessee;
(g) "Notes" means notes or interim certificates of the Authority issued
pursuant to this act, including joint obligations of the Authority and the county,
cities and/or any participating governmental entity;
(h) "Participating governmental entity" means any utility district, utility
authority, city, town, county, or other political subdivision of this state, which
pursuant to a resolution of its governing body, sells, transfers, donates or
otherwise conveys its water or wastewater to the Authority for operation by the
Authority;
(i) "Person" means any individual, firm, partnership, association,
corporation, or any combination thereof;
(j) "Refunding bonds" means refunding bonds, including joint obligations
of the Authority and the county, the cities and/or any participating governmental
entity, issued pursuant to this act and Tennessee Code Annotated, Title 9,
Chapter 21, Parts 1 and 9, to refund bonds of the Authority or bonds issued to
refund bonds or notes of the county, the cities, or any participating governmental
entity, including joint obligations of the Authority and the county, the cities, and/or
any participating governmental entity, the proceeds of which were used to

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construct, acquire, extend, improve or equip all or a portion of a system acquired
by the Authority or to refund bonds, the proceeds of which were used for such
purposes;
(k) "State" means the state of Tennessee;
(l) "System" means a water or wastewater system used in the treatment
and distribution of water or the collection and treatment of wastewater, including
treatment facilities, transmission lines, distribution lines, collection lines, storage
facilities, pumping, power, and other equipment, and their appurtenances,
extensions, improvements, remodeling, additions, and other alterations thereof;
and
(m) "Utility" means any public or quasi-public entity that provides water or
wastewater services to the public.
SECTION 4. Board of Commissioners - Qualification and Selection.
(a) The governing body of the Authority shall be a board of commissioners of
five (5) persons of good standing and reputation, who shall have been residents of
Humphreys County for more than one (1) year. No such person shall be an employee of
any water or wastewater utility in Humphreys County.
(b) Membership on the board of commissioners of the Authority is as follows:
(1) Two (2) commissioners who reside within the unincorporated area of
Humphreys County. The commissioners shall be appointed by the Humphreys
County Executive and approved by the legislative body of Humphreys County.
One (1) of these commissioners shall serve an initial term of four (4) years and
the second commissioner shall serve an initial term of three (3) years. The
county executive may self-appoint to serve as a commissioner.

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(2) One (1) commissioner shall be appointed by the mayor and approved
by the legislative body of the City of Waverly. The mayor may self-appoint to
serve as a commissioner. The commissioner must reside within the municipal
boundaries of the City of Waverly. This commissioner shall serve an initial term
of four (4) years.
(3) One (1) commissioner shall be appointed by the mayor and approved
by the legislative body of the City of McEwen. The mayor may self-appoint to
serve as a commissioner. The commissioner must reside within the municipal
boundaries of the City of McEwen. This commissioner shall serve an initial term
of three (3) years.
(4) One (1) commissioner shall be appointed by the mayor and approved
by the legislative body of the City of New Johnsonville. The mayor may self-
appoint to serve as a commissioner. The commissioner must reside within the
municipal boundaries of the City of New Johnsonville. This commissioner shall
serve an initial term of three (3) years.
(5) If a participating governmental entity sells, transfers, donates or
otherwise conveys its water or wastewater system to the Authority for operation
by the Authority pursuant to this Act, a new board member seat shall be added to
the Authority's board of commissioners for the participating governmental entity,
and the commissioner shall have a term of four (4) years. If the new participating
governmental entity is a city or town, the new board member must reside within
the municipal boundaries of the city or town and will be appointed by the mayor
of the city or town and approved by a majority of its legislative body. If the new
participating governmental entity is a utility district, utility authority, or other
political subdivision of this state, the new board member must reside within the

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service area of the utility district, utility authority, or other political subdivision of
this state and will be appointed by the county mayor or county executive of the
county in which the utility district, utility authority, or other political subdivision of
this state was created and must be approved by a majority of that county's
legislative body.
(6) When the new board member seat added under subdivision (b)(5)
creates an even number of board members for the Authority, another new board
member seat will be created as an at-large commissioner of the board at the
same time. The at-large board commissioner will be appointed by a majority vote
of the Authority's board of commissioners, and the term of the new at-large board
commissioner will be four (4) years.
(c) Vacancies on the Authority's board shall be filled by the appointing authority
for that commissioner office as set forth in Section 4(b). Except for an at-large board
member seat, the appointee shall have the same residence requirements as the
appointee's predecessor as set forth in Section 4(b).
(d) The term of office of each commissioner shall be four (4) years after the
initial terms of office to create staggered terms. Upon the expiration of a commissioner's
term of office, the commissioner shall continue to hold office until a successor is
appointed and qualified to serve.
(e) No later than thirty (30) days prior to the expiration of the term of office of any
incumbent commissioner, the appointing authority for that commissioner office shall
appoint an individual to fill the upcoming vacancy.
(f) When a vacancy occurs by reason of non-residence, incapacity, resignation,
or death of a commissioner, the term of office of the replacement commissioner shall be
for the unexpired term of the commissioner's predecessor in office. If the Humphreys

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County Executive or any City Mayor serving as a commissioner of the board vacates his
or her elected office of County Executive or City Mayor by reason of non-residence,
incapacity, resignation, death, or failure to be re-elected, the term of office of the
replacement commissioner shall be for the unexpired term of the commissioner's
predecessor in office.
SECTION 5. Board of Commissioners - Officers and Meetings.
(a) A majority of the board constitutes a quorum, and the board shall act by a
vote of a majority present at any meeting attended by a quorum.
(b) At its first meeting and at the first meeting of each calendar year thereafter,
the board shall elect one (1) of its members to serve as chairman, vice chairman, and
secretary of the board. The board may establish other officer positions from time to time
as deemed advisable by the board. The secretary shall keep minutes of all regular and
special meetings of the Authority.
(c) The board shall hold meetings at such times and places as the board may
determine and all such meetings shall be public meetings under Tennessee Code
Annotated, Title 8, Chapter 44, Part 1. Special meetings may be called and held upon
such notice and in such manner as the board may determine. Except as otherwise
expressly provided herein, the board shall establish its own rules of procedure for its
board meetings.
(d) All powers of the Authority shall be vested in the board of commissioners,
which shall exercise these powers by vote or resolution. Each commissioner shall have
an equal vote on all matters.
(e) All board members shall serve without compensation; however, the board
may receive per diem payments for not more than twelve (12) meetings of the board of
commissioners in any calendar year, at a rate not greater than one hundred fifty dollars

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($150) per meeting, which the board may establish by resolution. The board members
may be reimbursed from Authority funds for any actual, reasonable expenses that the
board member may incur as an incident to holding office as a board member in
accordance with the expense reimbursement policy adopted by the board for the
Authority. The board members are eligible to participate in any group medical insurance
plan and group life insurance plan established by the Authority for its employees to the
same extent as the employees of the Authority when the Authority's board of
commissioners authorizes such participation.
SECTION 6. Powers of the Authority.
The Authority shall have the powers necessary to accomplish the purpose of this
act (excluding the power to levy and collect taxes), including, but not limited to, the
following:
(a) To have perpetual succession, to sue and be sued, and to adopt a
corporate seal;
(b) To plan, establish, acquire, construct, equip, furnish, improve, repair,
extend, maintain, and operate one (1) or more water and wastewater systems
within or without Humphreys County, including all real and personal property,
facilities, improvements and appurtenances, which the board of the Authority
may deem necessary in connection therewith and regardless of whether or not
such system shall then be in existence;
(c) To enter into agreements with the county, the cities, and any
participating governmental entity for the orderly transfer of all or any part of its
water system or wastewater system; provided, that the governing body of the
county, the cities, or any participating governmental entity has irrevocably voted
to consolidate such system into the Authority or to transfer such system to the

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Authority, and to the extent permitted by law and contract, to assume, to
reimburse or to otherwise agree to pay outstanding obligations or liabilities of the
county, the cities, or any participating governmental entity incurred to acquire,
extend or equip the system;
(d) To enter into agreements with the county, the city, the districts or any
other municipality to acquire by purchase, exchange, gift, devise, lease, the
exercise of the power of eminent domain, or otherwise, any system or property
related thereto of the county, the city, the districts or any other municipality and to
operate such system separately or as a part of Authority's system, or to enter into
agreements with the county, the city, the districts or any other municipality
providing for the operation by the Authority of the system, or any portion thereof,
owned by the county, the city, the districts or any other municipality;
(e) To buy, sell, store, treat and distribute water and to collect and treat
wastewater for persons, for any county, municipality or other political subdivision
of this state, this state or any agency thereof, the United States or any agency
thereof, and to enter into contracts, agreements, or other arrangements with such
persons or entities therewith;
(f) To make and enter into all contracts, trust instruments, agreements,
and other instruments with the county, the cities, any participating governmental
entity, this state or any agency thereof, the United States or any agency thereof,
or any person, whether public or private, bonds, notes, loan agreements with the
Tennessee Local Development Authority and/or the Tennessee Department of
Environment and Conservation and other forms of indebtedness as if it were a
local government as such term is defined in applicable statutes governing grants
and loans, to construct, equip or extend the system, and to enter into contracts

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for the management and operation of a system or any facilities or service of the
Authority for the treatment, processing, collection, distribution, storage, transfer,
or disposal of water and wastewater;
(g) To incur debts, to borrow money, to issue bonds, and to provide for
the rights of the holders thereof;
(h) To apply for, accept and pledge donations, contributions, loans,
guarantees, financial assistance, capital grants, or gifts from the county, the
cities, any participating governmental entity, this state or any agency thereof, the
United States or any agency thereof, or any person, whether public or private, for
or in aid of the purposes of the Authority, and to enter into agreements in
connection therewith and to accept the same;
(i) To pledge all or any part of the revenues, receipts, donations,
contributions, loans, guarantees, financial assistance, capital grants, or gifts of
the Authority, to mortgage and pledge one (1) or more of its systems or any part
or parts thereof, whether then owned or thereafter acquired, and to assign and
pledge all or any part of its interest in and rights under contracts and other
instruments relating thereto as security for the payments of the principal,
premium, if any, and interest on bonds, refunding bonds, loan agreements, or
notes issued by the Authority;
(j) To have control of its systems, facilities, and services with the right
and duty to establish and charge rates, fees, and charges for the use of the
Authority's systems, facilities, and services and to collect revenues and receipts
therefrom, not inconsistent with the rights of holders of its bonds, refunding
bonds, and notes;

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(k) To enter onto any lands, waters, and premises for the purpose of
making surveys, soundings, and examinations in and for the furtherance of the
purposes authorized by this act;
(l) To use any right-of-way, easement, or other similar property right
necessary or convenient in connection with a system, held by this state or by any
political subdivision thereof; provided, the governing body of such political
subdivision consents to such use;
(m) To employ and pay compensation to attorneys, accountants,
engineers, architects, financial advisors, technical consultants, and independent
contractors as the board shall deem necessary for the business of the Authority;
(n) To employ and pay compensation to such employees, including a
general manager, who shall have such authority, duties, and responsibilities as
the board deems necessary;
(o) To procure and enter into contracts for any type of insurance or
indemnity against loss or damage to property from any cause, including loss of
use and occupancy, against death or injury of any act of any member, officer, or
employee of the Authority in the performance of the duties of the office or
employment or any other insurable risk, including the payment of its bonds,
refunding bonds or notes, as the board in its discretion may deem necessary;
(p) To enter into contracts with the state of Tennessee or otherwise for a
plan for medical, dental, vision, disability, death benefits, or other employee
insurance benefits for the officers and employees of the Authority;
(q) To exercise all powers expressly given to it and necessarily implied
therefrom, to make and execute contracts and all other instruments necessary or
convenient to do any and all things for the exercise of its powers hereunder, and

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to establish and make rules and regulations not inconsistent with the provision of
this act, deemed expedient for the management of the Authority's affairs;
(r) To adopt a purchasing policy in accordance with the purchasing policy
provisions for utility districts set forth in Tennessee Code Annotated, Title 7,
Chapter 82, Part 8;
(s) To make all necessary investments, in the discretion of the board,
consistent with the powers of local governments to make such investments as
provided by state law; and
(t) To make all needful rules, regulations and bylaws for the management
and the conduct of the affairs of the Authority and to adopt rules and regulations
governing the provision of water service and wastewater service provided by the
Authority.
SECTION 7. Exclusive Service Area.
(a) Upon the acquisition of one of the cities' water system and wastewater
system, the Authority shall have the exclusive right to provide water and wastewater
service within the city's municipal boundaries at the time of the acquisition and as its
municipal boundaries are expanded by annexation or any other means.
(b) Upon the acquisition of a utility district, utility authority, or other political
subdivision of this state, the Authority shall have the exclusive right to provide water and
wastewater service within the geographic boundaries and service area of the utility
district, utility authority, or other political subdivision of this state as they existed on the
date of the acquisition.
(c) By resolution of the board, the board may designate any other areas in
Humphreys County as the Authority's exclusive service area, which areas are outside of

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the municipal boundaries of any of the cities that have not consolidated with the
Authority or which areas do not have water or wastewater service from any other utility.
SECTION 8. General Manager.
(a) The board may appoint a general manager who shall be the chief executive
and administrative officer of the Authority, and the Authority may enter into a contract
with the general manager establishing the general manager's salary, term of office, and
duties.
(b) The general manager shall appoint the Authority's employees and shall fix
their duties and compensation.
(c) The general manager shall appoint the Authority's auditor, legal counsel,
engineer, other technical consultants, and independent contractors as they are needed,
subject to the approval of the board.
(d) The general manager shall submit such periodic reports to the board as it
may direct.
(e) The general manager shall attend all meetings of the board.
(f) The general manager shall perform all other duties as directed by the board.
SECTION 9. Condemnation and Eminent Domain.
The Authority may condemn in its own name any land, rights in land, easements,
and/or rights-of-way, which in the judgment of the board are necessary for carrying out
the purposes for which the Authority is created. Such property or interest in such
property may be so acquired whether or not the same is owned or held for public use by
persons having the power of eminent domain, or otherwise held or used for public
purposes; provided, however, such prior public use will not be interfered with by the use
to which such property will be put by the Authority. Such power of condemnation may

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be exercised in the manner prescribed by any applicable statutory provisions now in
force or hereafter enacted for the exercise of the power of eminent domain.
SECTION 10. Rates, Fees and Charges.
The board shall prescribe and collect reasonable rates, fees, and charges for the
services, facilities, and commodities of any system and shall revise such rates, fees, and
charges from time to time whenever necessary to ensure that any Authority's water and
wastewater systems shall be and always remain self-supporting. The rates, fees, or
charges prescribed shall be such as will always produce revenue at least sufficient:
(a) To provide for all expenses of operation and maintenance of the
systems, including reserves therefor;
(b) To pay when due all bonds, notes, and interest and premium thereon
for the payment of which such revenues are or shall have been pledged,
charged, or otherwise encumbered, including reserves therefor; and
(c) To provide for the extension and improvements of the systems.
SECTION 11. Notes of the Authority.
(a) By resolution adopted by the board, the Authority may issue interest-bearing
bond anticipation notes for all purposes for which bonds can be legally authorized and
issued by the Authority. Such notes shall be secured by the proceeds from the sale of
the bonds in anticipation of which the notes are issued and shall be secured by a lien
upon the revenues of the Authority's system on a parity with the bonds in anticipation of
which such notes are issued. In no event shall the amount of outstanding bond
anticipation notes exceed the principal amount of the bonds to be issued by the
Authority. The notes shall mature not later than two (2) years from their date of issuance
and may be extended or renewed for not more than two (2) additional periods of two (2)
years each by resolution of the board and the issuance of renewal or extension notes.

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(b) Notes shall be sold at public or private sale for such price and in such
manner as the board may direct. Notes may be sold in one (1) or more series, may bear
such date or dates, may bear interest at such rate or rates (which may vary from time to
time), may be payable at such time or times, may be in such denomination or
denominations, may be in such form, either coupon or registered, may be payable at
such place or places, may be executed in such manner, may be payable in such
medium of payment, may be subject to such terms of redemption, without a premium or,
for notes sold for not less than the par value thereof and accrued interest, without or with
a premium, all as may be provided by resolution of the board.
(c) Notes shall be executed in the name of the Authority by the proper officials
authorized to execute the same, together with the seal of the Authority attached thereto,
if required.
(d) The proceeds arising from the sale of such notes shall be disbursed as
provided by the resolution authorizing the issuance of the notes. The term "bond
anticipation notes" includes interim certificates or other temporary obligations, which may
be issued by the Authority to the purchaser of such notes upon the terms and conditions
herein provided. When the bonds shall be issued and sold, a sufficient amount of the
proceeds of the bonds shall be applied to the payment of the notes at their maturity or
upon their earlier redemption as directed by the board by resolution.
(e) The Authority herein granted to issue "bond anticipation notes" also includes
the issuance of "grant anticipation notes," to be secured by the grant in anticipation of
which such notes are issued, with all provisions of this section being applicable to such
grant anticipation notes.
SECTION 12. Bonds of the Authority.

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(a) The Authority shall have the power to issue bonds from time to time to
finance the construction, purchase, acquisition, extension, and improvement of one (1)
or more systems. All bonds issued shall be payable solely out of the revenues and
receipts derived from the system for which such bonds are issued or as may be
designated in the proceedings under which the bonds shall be authorized to be issued.
Such bonds may be issued in one (1) or more series, may be executed and delivered at
any time and from time to time, may be in such form and denomination and of such
terms and maturities, may be subject to redemption prior to maturity either with or
without premium, may be in fully registered form, may bear such conversion privileges
and be payable in such installments and at such time or times not exceeding forty (40)
years from the date thereof, may be payable at such place or places whether within or
without the state of Tennessee, may bear interest at such rate or rates payable at such
time or times and at such place or places and evidenced in such manner, and may
contain such provisions not inconsistent herewith, all as shall be provided in the
proceedings whereunder the bonds shall be authorized to be issued.
(b) Bonds may be sold at public or private sale for such price and in such
manner and from time to time as may be determined by the board to be most
advantageous, and the Authority may pay any and all expenses, premiums, and
commission, which its board may deem necessary or advantageous in connection with
the issuance thereof.
(c) All bonds and the interest applicable thereto are hereby made and shall be
construed to be negotiable instruments.
(d) Interim certificates or notes or other temporary obligations pending the
issuance of revenue bonds shall be payable out of proceeds of bonds or other funds of
the Authority available for such purpose.

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(e) Proceeds of bonds may be used for the purpose of constructing, acquiring,
reconstructing, improving, equipping, furnishing, bettering, or extending a system,
including the payment of interest on the bonds during construction of any project for
which bonds are issued and for two (2) years after the estimated date of completion, the
payment of engineering, fiscal, architectural, bond insurance, and legal expenses
incurred in connection therewith and the issuance of bonds, and the establishment of a
reasonable reserve fund for the payment of principal of and interest on such bonds if a
deficiency occurs in the revenues and receipts available for such payment.
SECTION 13. Refunding Bonds of the Authority.
(a) Any bonds at any time outstanding may, at any time and from time to time,
be funded by the issuance of refunding bonds in such amount as the board may deem
necessary, but not exceeding the sum of the following:
(1) The principal amount of the bonds being refinanced;
(2) Applicable redemption premiums thereon;
(3) Unpaid interest on such bonds to the date of delivery or exchange of
the refunding bonds;
(4) If the proceeds from the sale of the refunding bonds are to be
deposited in trust as hereinafter provided, interest to accrue on such obligations
from the date of delivery to the first or any subsequent available redemption date
or dates elected, in its discretion, by the board, or to the date or dates of maturity,
whichever shall be determined by the board to be the most advantageous or
necessary to the Authority;
(5) A reasonable reserve for the payment of principal of and interest on
such bonds and/or a renewal and replacement reserve;

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(6) If the project to be constructed from the proceeds of the obligations
being refinanced has not been completed, an amount sufficient to meet the
interest charges on the refunding bonds during the construction of such project
and for two (2) years after the estimated date of completion (but only to the
extent that interest charges have not been capitalized from the proceeds of the
obligations being refinanced); and
(7) Expenses, premiums, and commissions of the Authority, including
bond discount deemed by the board to be necessary for the issuance of the
refunding bonds. A determination by the board that any refinancing is
advantageous or necessary to the Authority or that any of the amounts provided
in the preceding sentence shall be included in such refinancing, or that any of the
obligations to be refinanced shall be called for redemption on the first or any
subsequent available redemption date or permitted to remain outstanding until
their respective dates of maturity, shall be conclusive.
(b) Any such refunding may be effected whether the bonds to be refunded shall
have then matured or shall thereafter mature, either by the exchange of the refunding
bonds for the bonds to be refunded thereby with the consent of the holders of the bonds
so to be refunded, or by sale of the refunding bonds and the application of the proceeds
thereof to the payment of the bonds refunded thereby, and regardless of whether or not
the bonds to be refunded were issued in connection with the same projects or separate
projects, and regardless of whether or not the bonds proposed to be refunded shall be
payable on the same date or different dates or shall be due serially or otherwise.
(c) At the time of delivery of the refunding bonds, the bonds to be refunded will
not be retired or a valid and timely notice of redemption of the outstanding bonds is not
given in accordance with the resolution, indenture, or other instrument governing the

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redemption of the outstanding bonds, then, prior to the issuance of the refunding bonds,
the board shall cause to be given adequate notice of its intention to issue the refunding
bonds. The notice shall be given either by mail to the owners of all the outstanding
bonds to be refunded at their addresses shown on the bond registration records for the
outstanding bonds, or given by publication, or by such other means that may be deemed
sufficient pursuant to the laws of this state. The notice shall set forth the estimated date
of delivery of the bonds, refunding bonds and identify the bonds, or the individual
maturities thereof, proposed to be refunded; provided, that if portions of individual
maturities are proposed to be refunded, the notice shall identify the maturities subject to
partial refunding and the aggregate principal amount to be refunded within each
maturity. If the issuance of the refunding bonds does not occur as provided in the
notice, the governing body shall cause notice thereof to be given as provided above.
Except as otherwise set forth in this section, the notice required pursuant to this section
shall be given whether or not any of the bonds to be refunded are to be called for
redemption.
(d) If any of the obligations to be refunded are to be called for redemption, notice
of redemption shall be given in a manner required by the proceedings authorizing such
outstanding obligations.
(e) The principal proceeds from the sale of any refunding bonds shall be applied
only as follows, either:
(1) To the immediate payment and retirement of the bonds being
refunded; or
(2) To the extent not required for immediate payment of the bonds being
refunded, with such proceeds to be deposited in trust to provide for the payment
and retirement of the bonds being refunded and to pay any expenses incurred in

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connection with such refunding, but provision may be made for the pledging and
disposition of any surplus, including, without limitation, provisions for the pledging
of any such surplus to the payment of the principal of, premium, if any, and
interest or any issue or series of refunding bonds. Money in any such trust fund
may be invested in the discretion of the board.
(f) Nothing herein shall be construed as a limitation on the duration of any
deposit in trust for the retirement of obligations being refunded, but which shall not have
matured and which shall not be presently redeemable or, if presently redeemable, shall
not have been called for redemption.
SECTION 14. Security for Payment of Bonds and Notes.
(a) The principal of, premium, if any, and interest on any bonds, refunding
bonds, and notes may be secured by a pledge of revenues and receipts of the
Authority's system. The proceedings under which the bonds, refunding bonds, or notes
are authorized to be issued may contain any agreements, provisions, and covenants
respecting the maintenance of such system or other facilities covered thereby, the fixing
and collection of rates, fees, or charges with respect to any system or portions thereof
covered by such proceedings, the creation and maintenance of special funds from such
revenues and from the proceeds of such bonds, refunding bonds, and notes and the
rights and remedies available in the event of default, all as the board shall deem
advisable and not in conflict with the provisions of this act. To the extent provided in the
proceedings authorizing any bonds, refunding bonds, or notes, each pledge and
agreement made for the benefit of security of any of the bonds, refunding bonds, or
notes shall continue in effect until the principal of and interest on the bonds, refunding
bonds, or notes for the benefit of which the same were made shall have been fully paid
or adequate provision for the payment thereof shall have been made by the Authority. In

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the event of a default in such payment or in any agreements of the Authority made as
part of the proceedings under which the bonds, refunding bonds, or notes were issued,
such payment or agreement may be enforced by suit, mandamus, or the appointment of
a receiver in equity, or the proceedings under which the bonds, refunding bonds or notes
are issued.
(b) The board may designate the appropriate officials to execute all documents
necessary to guarantee or in any other manner to secure the payment of the bonds or
notes of the Authority; provided, however, the approval of the governing body of the
county, any of the cities, or any participating governmental entity to such guarantee or
security shall have been obtained before the execution of such documents. Provided
further, prior to any meeting where such authorization will be considered by the
governing body of the county, any of the cities, or any participating governmental entity,
the governing body shall cause reasonable public notice to be published describing the
matter to be considered and containing an estimate of the dollar amount of any
contingent liability by the county, any of the cities, or any participating governmental
entity if such authorization is given.
(c) Bonds, notes, or refunding bonds may constitute a joint obligation of the
Authority and the county, any of the cities, or any participating governmental entity. Any
such bond, note or refunding bond upon which the county, any of the cities, or any
participating governmental entity is jointly obligated with the Authority may be secured by
the full faith and credit and unlimited ad valorem taxing power of the county or city.
Bonds, notes or refunding bonds issued as a joint obligation of the Authority and the
county, any of the cities, or any participating governmental entity shall be issued in the
form and manner of Tennessee Code Annotated, Title 9, Chapter 21, Parts 1, 2, and 9,
where applicable, and in the event of a conflict between this act and Tennessee Code

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Annotated, Title 9, Chapter 21, Parts 1, 2, and 9, then the provisions of Tennessee Code
Annotated, Title 9, Chapter 21, Parts 1, 2, and 9 shall prevail. Notes issued as a joint
obligation of the Authority and the county, any of the cities, or any participating
governmental entity shall be issued in the form and manner of Tennessee Code
Annotated, Title 9, Chapter 21, Parts 1, 4, and 5, where applicable and in the event of a
conflict between this act and the provisions of Tennessee Code Annotated, Title 9,
Chapter 21, Parts 1, 4, and 5 shall prevail.
(d) Any bond, note, or refunding bond issued under this act may be secured by a
mortgage or deed of trust covering any or all part of the property, real or personal, of the
Authority. Any pledge of lien on revenues, fees, rents, tolls or other charges received or
receivable by any local government to secure the payment of any bonds, notes or
refunding bonds issued pursuant to the act and the interest thereon, shall be valid and
binding from the time that the pledge or lien is created and granted and shall inure to the
benefit of the holder or holders of any such bonds, notes or refunding bonds until
payment in full of the principal and premium and interest thereon. Neither the resolution
nor any other instrument granting, creating, or giving notice of the pledge of a lien or
other such security interest, need be filed or recorded to preserve or protect the validity
or priority of such pledge or lien.
SECTION 15. Exemption from Taxation and State Regulation.
(a) The Authority, its properties and the income and revenues therefrom shall be
exempt from all state, county, and municipal taxation. All bonds, notes, and refunding
bonds issued by the Authority and the income therefrom shall be exempt from all state,
county, and municipal taxation, except inheritance, transfer, and estate taxes, or except
as otherwise provided by state law. For purposes of Tennessee Code Annotated, Title
42, Chapter 2, and any amendments thereto or substitution therefor, bonds issued by

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the Authority shall be deemed to be securities issued by a public instrumentality or a
political subdivision of this State.
(b) Neither the Tennessee Public Utility Commission nor any other board or
commission of like character hereafter created shall have jurisdiction over the Authority
in the management and control of its system, the regulation of its rates, fees, or charges,
or the issuance of notes, bonds, or refunding bonds. The Authority is subject to the
regulation of the Tennessee Board of Utility Regulation. The Authority is subject to
regulation by the Department of Environment and Conservation as a public water supply
and public sewerage system.
SECTION 16. Liability and Indebtedness of Political Subdivisions.
(a) Neither the state, any county, any municipality, or other political subdivision
of this state other than the Authority shall, except as may otherwise be authorized by the
board of the Authority and the governing body of the county, any of the cities, or any
participating governmental entity, in any event be liable for the payment of the principal
of, premium, if any, or interest on any bonds, notes or refunding bonds of the Authority
or for the performance of any pledge, obligation, or agreement of any kind whatsoever
that may be undertaken by the Authority, and none of the bonds, notes, or refunding
bonds of the Authority or any of its agreements or obligations shall be construed to
constitute an indebtedness of the state, any county, any municipality, or other political
subdivision of this state within the meaning of any constitutional or statutory provision
whatsoever.
(b) Bonds, notes, or refunding bonds of the Authority shall not constitute a debt
or a pledge of the faith and credit of the state, any county, or any municipality, except as
may otherwise be authorized by the governing body of the county, any of the cities, or
any participating governmental entity, and the holders or owners of such bonds shall

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have no right to have taxes levied by any county, municipality, the state, or any other
taxing authority within this state for the payment of principal of, premium, if any, and
interest on such bonds, but shall be payable solely from revenues and monies pledged
for their payment.
(c) Except as may otherwise be authorized, the governing body of the county,
any of the cities, or any participating governmental entity, all such bonds shall contain on
the face thereof a statement to the effect that the bonds, refunding bonds, or notes are
not a debt of the state, any county, any municipality, other political subdivision of this
state, or any other taxing authority within this state, but are payable solely from revenues
and monies pledged to the payment thereof.
SECTION 17. Disposition of Funds.
No part of the net earnings of the Authority remaining after payment of its
expenses shall inure to the benefit of any persons except that, at such times as no
bonds, notes, or refunding bonds of the Authority are outstanding and unpaid and
adequate provision has been made for the full payment of all liabilities, obligations, and
contracts of the Authority, and the Authority shall have, by operation of law, been
terminated, any assets of the Authority, to the extent not necessary for such purposes,
shall be paid to the county, any of the cities that have conveyed their systems to the
Authority, and any participating governmental entity that is a county or municipality in
equal proportions. To the extent allowed by this act, nothing herein contained shall
prevent the board from transferring its properties in accordance with the terms of any
contract, agreement, or covenant entered into or undertaken by the Authority.
SECTION 18. Budget and Annual Audit.
(a) The board shall annually establish and adopt a budget for the Authority.

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(b) The board shall cause to be prepared each fiscal year an annual audit of the
books and records of the Authority. The Comptroller of the Treasury, through the
Department of Audit, is responsible for determining that such audits are prepared in
accordance with generally accepted governmental auditing standards. A copy of such
annual audit shall be filed with the office of the County Mayor of Humphreys County, the
mayor of the cities that have conveyed their systems to the Authority, and to the chief
executive officer of the participating governmental entity.
SECTION 19. Powers of the County.
(a) The county may take all actions hereunder by resolution of its governing
body. The county shall have all powers necessary to further the purposes of this act,
including, without limitation, the power to sell, lease, dedicate, donate, or otherwise
convey to the Authority any of its interests in any existing water and wastewater system,
franchises, assets, liabilities, or other related property, whether real or personal, or
mixed, tangible or intangible, and whether or not subject to mortgages, liens, charges, or
other encumbrances or grant easements, licenses or other rights or privileges therein to
the Authority and to contract with the Authority.
(b) The county, through its governing body, is authorized to issue joint
obligations with the Authority and to pledge its full faith and credit and unlimited taxing
power to such bonds, notes or refunding bonds and to guarantee the bonds, notes or
refunding bonds as set forth in Sections 11 through 14 of this act.
(c) The county may enter into agreements with the Authority for the orderly
transfer of all or any part of its system and to enter into agreements with the Authority for
the Authority to assume, to pay or to refund bonds, refunding bonds and notes issued by
the county or loan agreements entered into by the county to acquire, construct, or equip
all of any part of a system.

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SECTION 20. Powers of the Cities.
(a) The cities may may take all actions hereunder by resolution of its governing
body. The cities shall have all powers necessary to further the purposes of this act,
including, without limitation, the power to sell, lease, dedicate, donate, or otherwise
convey to the Authority any of its interests in any existing water and wastewater system,
franchises, assets, liabilities, or other related property, whether real or personal, or
mixed, tangible or intangible, and whether or not subject to mortgages, liens, charges, or
other encumbrances or grant easements, licenses, or other rights or privileges therein to
the Authority and to contract with the Authority.
(b) The cities, through their governing bodies, are authorized to issue joint
obligations with the Authority and to pledge its full faith and credit and unlimited taxing
power to such bonds, notes or refunding bonds and to guarantee the bonds, notes, or
refunding bonds as set forth in Sections 11 through 15 of this act.
(c) The cities may enter into agreements with the Authority for the orderly
transfer of all or any part of its system and enter into agreements with the Authority for
the Authority to assume, to pay or to refund bonds, refunding bonds and notes issued by
the cities or loan an ownership and operation by the authority or loan agreements
entered into by the cities to acquire, construct, or equip all of any part of a system.
SECTION 21. Powers not restricted.
Neither this act nor anything contained herein shall be construed as a restriction
or a limitation upon any powers which a county, city, utility district, or utility authority
might otherwise have under any laws of this state, but shall be construed as cumulative
of and supplemental to any such powers. No proceeding, notice, or approval shall be
required with respect to the issuance of any bonds, refunding bonds, or notes of the
Authority or any instrument as security therefor except as provided in this act, any law to

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the contrary notwithstanding; provided, however, nothing herein shall be construed to
deprive the state of Tennessee and its political subdivisions of their respective police
powers, or to impair any power of any official or agency of this state and its political
subdivisions, which may be otherwise provided by law.
SECTION 22. Liberal Construction.
The provisions of this act shall be liberally construed to affect the purposes
thereof, and insofar as the provisions of this act may be inconsistent with the provisions
of any other law, the provisions of this act shall be controlling.
SECTION 23. Severability.
If any provision of this act or the application thereof to any person or
circumstance is held to be invalid, such invalidity shall not affect any other provision or
application of the act, which can be given effect without the invalid provision or
application, and to that end the provisions of this act are declared to be severable.
SECTION 24. This act shall have no effect unless it is approved by a two-thirds (2/3)
vote of the legislative body of Humphreys County. Its approval or nonapproval shall be
proclaimed by the presiding officer of such legislative body and certified to the secretary of
state.
SECTION 25. For the purpose of approving or rejecting the provisions of this act, it shall
be effective upon becoming a law, the public welfare requiring it. For all other purposes, it shall
become effective as provided in Section 24.