Grundy County

HOUSE BILL 2667
By Bricken

SENATE BILL 2730
By Bowling
SB2730
017501
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AN ACT to create the "Southern Cumberland Plateau Regional
Water and Wastewater Authority."

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Purpose and creation of Authority.
(a) A governmental authority to be known as the "Southern Cumberland Plateau
Regional Water and Wastewater Authority" is hereby created and established for the
following purposes:
(1) Planning, acquiring, constructing, improving, extending, furnishing,
equipping, financing, owning, operating, and maintaining water and wastewater
systems, including treatment, storage, distribution and collection facilities,
properties and services, as hereinafter provided;
(2) The selling, donating, conveying, or otherwise disposing of water and
wastewater and the undertaking any project or work related thereto or connected
therewith;
(3) Planning and developing the water resources of the geographic
region and providing necessary wastewater collection and treatment attendant
thereto; and
(4) Providing environmental services and securing economic benefits to
the geographic region that it encompasses and may serve.
(b) The Authority shall be a separate legal entity and shall be a public
corporation in perpetuity under its corporate name, and the powers granted are for public
and governmental purposes and matters of public necessity.
SECTION 2. Definitions.

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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:
(1) "Authority" means the Southern Cumberland Plateau Regional Water
and Wastewater Authority created by this act;
(2) "Board" means the Board of Commissioners of the Authority;
(3) "Bonds" means bonds, interim certificates or other obligations of the
Authority issue pursuant to this act, including joint obligations of the Authority and
the County, the Cities, Utility Districts or municipalities;
(4) "Cities" mean the Town of Monteagle, Tennessee, and the Town of
Tracy City, Tennessee;
(5) "County" means Grundy County, Tennessee;
(6) "Governing Body" means the chief legislative body of a municipality,
as hereinafter defined;
(7) "Municipality" means any county, incorporated city or town, utility
district, or other municipal, or governmental body or subdivision in this State,
thereof now or hereafter authorized by law to be created;
(8) "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 Utility Districts;
(9) "Person" means any individual, firm, partnership, association,
corporation, or any combination thereof;
(10) "Refunding Bonds" means refunding bonds, issued pursuant to this
act, including joint obligations of the Authority and the County, Cities, Utility
Districts, or other municipality 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 by such County, Cities, Utility Districts or other municipality, the

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proceeds of which were used to 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;
(11) "State" means the State of Tennessee;
(12) "System" means a water and wastewater system, which shall
include, but not be limited to, all devices and systems used in the storage,
treatment, recycling and reclamation of sewage of residential, commercial and
industrial wastes of a liquid nature to restore and maintain the chemical, physical,
and biological integrity of the State's waters; any devices and systems used in
the treatment and distribution of water, including wells, water treatment facilities,
water storage facilities, water transmission lines, pumping, power and other
equipment, and other appurtenances, extensions, improvements, remodeling,
additions and alterations thereof; and elements essential to provide a reliable
recycled supply, such as standby treatment units and clear well facilities, and any
works; and
(13) "Utility Districts" mean the Big Creek Utility District and the Sewanee
Utility District.
SECTION 3. Board of Commissioners.
(a) The Authority shall have a Board of Commissioners in which all powers of
the Authority shall be vested. Each Commissioner shall have an equal vote in the affairs
of the Authority.
(b) A representative of Grundy County, Tennessee, the Town of Monteagle,
Tennessee, the Town of Tracy City, Tennessee, Big Creek Utility District, and Sewanee
Utility District shall each hold a seat on the Board of Commissioners.
(c)
(1) The membership of the Board of Commissioners shall consist of five
(5) Commissioners designated as follows:

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(A) The County Mayor of Grundy County or his/her designee, who
is named in a revocable written instrument executed by the County
Mayor;
(B) The Mayor of Monteagle or his/her designee, who is named in
a revocable written instrument executed by the Mayor;
(C) The Mayor of Tracy City or his/her designee, who is named in
a revocable written instrument executed by the Mayor; and
(D) One (1) Commissioner to be appointed by each governing
body of the Big Creek Utility District and Sewanee Utility District. The
governing body of each utility district is hereby authorized to appoint one
(1) person as Commissioner and such person shall be a member of the
utility district's board of commissioners.
(2) If, pursuant to Section 21, the Board adds a new member beyond the
number prescribed in subdivision (c)(1) due to the addition of a new participating
municipality to the Authority, thus having an even number of members, then such
new member must be a resident of Grundy County.
(d) All vacancies on the Board shall be filled as follows:
(1) For the Commissioner selected pursuant to subdivision (c)(1)(A)
above, vacancies shall be filled by the County Mayor of Grundy County;
(2) For the Commissioner selected pursuant to subdivision (c)(1)(B)
above, vacancies shall be filled by the Mayor of Monteagle;
(3) For the Commissioner selected pursuant to subdivision (c)(1)(C)
above, vacancies shall be filled by the Mayor of Tracy City; and
(4) For the Commissioners selected pursuant to subdivisions (c)(1)(D)
and (c)(2) above, vacancies shall be filled by the governing body of the utility
district/municipality whose seat is vacated by the departing Commissioner.
(e) The terms of the Commissioners shall be as follows:

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(1) The term of the Commissioner serving pursuant to subdivision
(c)(1)(A) shall be concurrent with the term of office of the County Mayor of
Grundy County.
(2) The term of the Commissioner serving pursuant to subdivision
(c)(1)(B) shall be concurrent with the term of office of the Mayor of Monteagle.
(3) The term of the Commissioner serving pursuant to subdivision
(c)(1)(C) shall be concurrent with the term of office of the Mayor of Tracy City.
(4) The term of the Commissioners serving pursuant to subdivisions
(c)(1)(D) and (c)(2) shall be four (4) years except for a replacement
Commissioner filling an unexpired term.
(f) Each member of the Board of Commissioners shall continue to hold office
until a successor is appointed in accordance with this section.
(g) 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. Vacancies among the
Commissioners shall not affect their power and authority so long as a quorum remains.
Within thirty (30) days after its selection, as herein provided, the Board shall hold a
meeting to elect a Chairman, a Vice Chairman, and a Secretary. The Chairman shall
give notice of all meetings of the Board and shall preside at all regular and special
meetings. The Secretary shall keep minutes of all regular and special meetings of the
Board. The Board may elect such other officers as shall from time to time be deemed
advisable by the Board. The terms and duties of the Chairman, Vice Chairman,
Secretary, and any other officers deemed advisable by the Board shall be established by
the Board in the Authority's bylaws.
(h) The Board may delegate to one (1) or more of its members or to its agents
and employees such powers and duties as it may deem proper.
(i) The Board shall hold meetings at such times and places as the Board may
determine and all such meetings shall be open to the public. Special meetings may be

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called and held upon such notice and in such manner as the Board may, by resolution or
bylaw, determine. Except as otherwise expressly provided herein, the Board shall
establish its own rules of procedure. Any action taken by the Board exercising its
powers and authority under the provisions of this act may be exercised by vote or
resolution at any regular or special meeting.
(j) All Commissioners shall serve without compensation except that by resolution
of the Board each Commissioner may receive a per diem payment in an amount up to
but not exceeding one hundred dollars ($100) per Commissioner per meeting of the
Authority; provided, however, that the Commissioners shall not be compensated for
more than twelve (12) meetings in one (1) calendar year. All Commissioners shall be
entitled to the reimbursement of actual expenses incurred in connection with the
performance of their duties.
SECTION 4. Powers of the Authority.
The Authority shall have the following powers in addition to those specified in
other sections of this act, together with powers incidental thereto or necessary for the
performance of those hereinafter stated:
(1) To sue and be sued and to prosecute and defend, at law or in equity,
in any court having jurisdiction of the subject matter and of the parties;
(2) To adopt bylaws, rules, and regulations for the management and the
conduct of the affairs of the Authority and of the Board;
(3) To have a seal and to alter the same at pleasure; provided, however,
the absence thereof shall have no effect on the validity of any document,
instrument, or other writing;
(4) To plan, establish, acquire, whether by purchase, exchange, gift,
devise, lease, the exercise of the power of eminent domain, or otherwise, and to
construct, equip, furnish, improve, repair, extend, maintain, and operate one (1)
or more systems within or without the geographic boundary and service areas of

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the County, the Cities and the Utility Districts as such boundaries now or may
hereafter exist, including all real and personal property, facilities, 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;
(5) To enter into agreements with the County, the Cities, the Utility
Districts and any other municipality for the orderly transfer of all or any part of the
system of the County, the Cities, the Utility Districts and any other municipality,
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, the Utility Districts or such other municipality incurred to acquire, extend,
or equip the system;
(6) To enter into agreements with the County, the Cities, the Utility
Districts, and any other municipality, to acquire by lease, gift, purchase, or
otherwise any system or property related thereto, of the County, the Cities, the
Utility Districts, or any other municipality and operate such system separately or
as a part of its systems; or enter into agreements with the County, the Cities, the
Utility Districts, or any other municipality providing for the operation by the
Authority of the system, or any portion thereof, owned by County, the Cities, the
Utility Districts, or any other municipality;
(7) To acquire, whether by purchase, exchange, gift, devise, lease, the
exercise of the power of eminent domain, or otherwise, any and all types of
property, franchises, assets, and liabilities, whether real, personal, or mixed,
tangible or intangible, and whether or not subject to mortgages, liens, charges, or
other encumbrances and to hold, sell, lease, exchange, donate, or convey its
properties, facilities, or services, but only for the purpose of continuing operation
of any system by the Authority, whenever the Board of the Authority shall find

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such action to be in furtherance of the purposes for which the Authority is hereby
created; provided, however, revenues of any system of the Authority is hereby
accounted for in such manner as not to impair the obligations of contract with
reference to bond issues or other legal obligations of the transferor and shall fully
protect and preserve the contract rights vested in the owners of outstanding
bonds, obligations, or contractual interests; provided, further, any income from
the sale of the such properties, facilities, and services shall be dedicated to the
continued operation of any system by the Authority;
(8) To buy, sell, store, treat, and distribute water; to collect and provide
treatment for wastewater from, with or to any municipality or other governmental
unit of the State or any agency thereof or the United States or any agency
thereof, or any persons whether public or private, and to enter into contracts,
agreements, or other arrangements with the County, the Cities, the Utility
Districts, any municipality or other persons in connection therewith;
(9) To make and enter into all contracts, trust instruments, agreements,
and other instruments with the County, the Cities, the Utility Districts, any
municipality, the State or agency thereof, the United States or any agency
thereof, or any person, including, without limitation, 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 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;
(10) To incur debts, to borrow money, to issue bonds, and to provide for
the rights of the holders thereof;

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(11) To apply for, accept and pledge donations, contributions, loans,
guarantees, financial assistance, capital grants, or gifts from the County, the
Cities, the Utility Districts, any municipality, the 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, to enter into agreements in connection
therewith and to accept the same;
(12) To pledge all or any part of the revenues, receipts, donation,
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;
(13) To have control of its systems, facilities, and services with the right
and duty to establish and charge rates, fees, rental, tolls, deposits, and other
charges for the use of the facilities and services of the Authority, of the sale of
materials or commodities by the Authority and to collect revenues and receipts
therefrom, not inconsistent with the rights of holders of its bonds, refunding
bonds, and notes;
(14) 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;
(15) To use any right-of-way, easement, or other similar property right
necessary or convenient in connection with a system, held by the State or any
political subdivision thereof, provided the governing body of such political
subdivision consents to such use;

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(16) To employ and pay compensation to such agents, including
attorneys, accountants, engineers, architects, and financial advisors, as the
Board shall deem necessary for the business of the Authority;
(17) 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;
(18) 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;
(19) To enter into, by contract with the County, the Cities, and/or the
Utility Districts, or otherwise, a plan for pension, disability, hospitalization, and
death benefits for the officers and employees of the Authority;
(20) 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
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;
(21) To adopt purchasing procedures for the Authority in accordance with
the purchasing procedures for Utility Districts as defined in Tennessee Code
Annotated, Title 7, Chapter 82, Part 8;
(22) To make all necessary investments, in the discretion of the Board,
consistent with the powers of local governments to make such investments as
provided in Tennessee Code Annotated, Section 9-1-107; and
(23) To become a member of a local chamber of commerce.

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SECTION 5. 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
be exercised in any mode or manner prescribed by any applicable statutory provisions
now in force or hereafter enacted for the exercise of the power of eminent domain.
SECTION 6. Rates sufficient to pay costs and retire bonds.
The Board shall prescribe and collect reasonable rates, fees, tolls, or charges for
the services, facilities, and commodities of any system, shall prescribe penalties for the
nonpayment thereof, and shall revise such rates, fees, tolls or charges from time to time
whenever necessary to ensure that any system shall be and always remain self-
supporting. The rates, fees, tolls, or charges prescribed shall be such as will always
produce revenue at least sufficient:
(1) To provide for all expenses of operation and maintenance of the
system, including reserves therefor;
(2) 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;
(3) To provide for the redemption and purchase bonds, in which case
such bonds shall be cancelled;
(4) To provide for the creation and maintenance of a cash working fund;
and

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(5) To provide for the acquisition, extension, and improvement of the
system.
SECTION 7. Notes of the Authority.
(a) The Authority may issue, by resolution adopted by the Board, 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 additionally
secured by a lien upon the revenues of the 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.
(b) Notes shall be sold at public or private sale for not less than ninety-seven
percent (97%) of the par value thereof and accrued interest 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.
(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

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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 8. Bonds of the Authority.
(a) The Authority shall have the power to issue bonds from time to time to
finance the construction, purchase, acquisition, extension, improvements and equipping
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 of Commissioners to

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be most advantageous, and the Authority may pay any and all expenses, premiums, and
commission which its Board of Commissioners 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.
(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 9. 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

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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;
(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.

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(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
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 which 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, such proceeds shall be deposited in trust to provide for the payment

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and retirement of the bonds being refunded and to pay any expenses incurred in
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 10. 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 a 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 rents, fees, or payments 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 the event of a default
in such payment or in any agreements of the Authority made as part of the proceedings

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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 or District 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 or District, 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 or District of such authorization is given.

(c) Bonds, notes, or refunding bonds may constitute a joint obligation of the
Authority and the County or District. Any such bond, note, or refunding bond upon which
the County is jointly obligated with the Authority may be secured by the full faith and
credit and unlimited ad valorem taxing power of the County. Bonds, notes or refunding
bonds issued as a joint obligation of the Authority and the County 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
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 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.

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(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 11. Exemption from taxation and state regulation.
(a) The Authority, its properties at any time owned by it 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 the Authority shall be deemed to be securities
issued by a public instrumentality or a political subdivision of the 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 a system, including the regulation of its rates, fees,
tolls, or charges, except to the extent provided by this act.
(c) The Authority is subject to the jurisdiction of the Tennessee Board of Utility
Regulation, created under Tennessee Code Annotated, Section 7-82-701.

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(d) The Authority is subject to regulation by the Department of Environment and
Conservation as a public water supply and public sewerage system.
SECTION 12. Liability and indebtedness of political subdivisions.
(a) Neither the County, the Cities, the Utility Districts, the State, nor any
municipality other than the Authority shall, except as may otherwise be authorized by the
Board of Commissioners of the Authority and the governing body of the particular
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 which 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, or any municipality 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 or any municipality, except as may
otherwise be authorized by the governing body of the County, Utility District or Cities,
and the holders or owners of such bonds shall have no right to have taxes levied by any
municipality, the State or any other taxing authority within the State for the payment of
principal of, premium, if any, and interest on such bonds, but shall be payable solely
from revenues and monies pledges for their payment.
(c) Except as may otherwise be authorized by the governing body of the County,
the Cities, or the Utility Districts as specified hereinabove, 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 or any municipality or any other taxing authority within the
State, but are payable solely from revenues and monies pledged to the payment thereof.
SECTION 13. Dissolution and disposition of funds.

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No part of the net earnings of the Authority remaining after payment of its
expenses shall inure to the benefit of any persons except as set forth in this section.
When the Board has determined that the purposes of the Authority have been
accomplished and 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, the Board may adopt a resolution dissolving
the Authority. Upon the adoption of such resolution, a certified copy of the resolution
authorizing the dissolution of the Authority shall be filed with the Secretary of State of
Tennessee. Upon the filing of the certified copy of the resolution with the Secretary of
State of Tennessee, the Authority's existence shall terminate. All assets of the Authority
not used to wind up the affairs of the Authority shall be paid in equal proportions to the
County, the Cities, the Utility Districts, and to any other municipality which holds a seat
on the Board in accordance with SECTION 21 at the time of dissolution. 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 or pursuant to a merger or consolidation of the
Authority with a county, municipality, utility district or other public corporation authorized
to provide water and wastewater services.
SECTION 14. Budget and annual audits.
(a) The Board shall annually establish and adopt a budget for the Authority.
(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 Grundy County, the
Mayor of the Town of Monteagle, and the Mayor of the Town of Tracy City and with the

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governing bodies of the Utility Districts and with the governing body of any other
municipality which holds a seat on the Board in accordance with SECTION 21.
SECTION 15. Powers of the Utility Districts.
(a) The Utility Districts may take all actions hereunder by resolution of its
governing body. The Utility Districts shall have all powers necessary in order 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 Utility Districts may enter into agreements with the Authority for the
orderly transfer of all or any part of its system and to enter into agreement for the
Authority to assume, to pay or to refund bonds, refunding bonds and notes issued by the
Utility Districts or loan agreements entered into by the Utility Districts to acquire,
construct, or equip all or any part of a system.
(c ) The Utility Districts are authorized to advance, donate, or lend money to the
Authority and to provide that funds available to it for a system shall be paid to the
Authority.
(d) A utility district shall have the same right to enter into any agreement with the
Authority that the Board deems necessary to carry out the purposes of this act, as the
utility district has to enter into similar agreements with water and wastewater treatment
authorities as provided by Tennessee Code Annotated, Title 68, Chapter 221, Part 6,
and by the Utility District Law under Tennessee Code Annotated, Title 7, Chapter 82.
SECTION 16. 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,

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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 SECTION 10.
(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.
(d) The County may advance, donate or lend money to the Authority and to
provide that funds available to it for a system shall be paid to the Authority.
(e) The County has the power to enter into any other agreement with the
Authority that the Board deems necessary to carry out the provisions of this act.
SECTION 17. Powers of the Cities.
(a) The Cities 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 their 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

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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 Authority and to pledge their 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 SECTION 10.
(c) The Cities may enter into agreements with the Authority for the orderly
transfer of all or any part of their systems 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 Cities or loan agreements entered into by the Cities to acquire, construct
or equip all or any part of a system.
(d) The Cities may advance, donate or lend money to the Authority and to
provide that funds available to them for systems shall be paid to the Authority.
SECTION 18. Collection of sewer charges.
(a) As used in this section, "sewer" means waste water collection and/or
treatment.
(b) The Authority may enter into contracts with any public or private corporation
providing sewer services or with any municipality operating a water system for the
collection of sewer charges. The Authority, or any municipality so contracting with the
Authority or contracting directly with any public or private corporation providing sewer
services, is authorized and empowered:
(i) To meter, bill and collect sewer service charges as an added
designated item on its water service bills, or otherwise;
(ii) To discontinue water service to sewer users who fail or refuse to pay
sewer service charges;

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(iii) Not to accept payment of water service charges from any customer
without receiving at the same time payment of any sewer service charges owed
by such customer; and
(iv) Not to reestablish water service for any customer until such time as
all past due sewer service charges owed by such customer have been paid.
(c) Such municipality is hereby authorized to perform all acts and discharge all
obligations required by the provisions of any such contract or contracts.
SECTION 19. Powers not restricted.
Neither this act nor anything herein contained shall be construed as a restriction
or a limitation upon any powers which a county, city or utility district 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 therefore except as provided in this act, any law to the
contrary notwithstanding; provided, however, nothing herein shall be construed to
deprive the State of Tennessee and its governmental subdivisions of their respective
police powers, or to impair any power of any official or agency of said State and its
governmental subdivisions which may be otherwise provided by law.
SECTION 20. Agreements with the Authority.
The Authority is hereby authorized, whenever the same shall be found desirable
by its Board, to enter into contracts, agreements, or other arrangements with any
municipality for the purchase or sale of water to such municipality or for the treatment,
transportation or collection of wastewater to or for such municipality. Any such contract
or agreement may extend for any period not exceeding forty (40) years from the date
thereof.
Any utility district seeking to enter into such agreement with the Authority shall
have the same rights and liabilities as it would otherwise have in entering into a similar

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agreement with a water and wastewater treatment authority as provided by Tennessee
Code Annotated, Title 68, Chapter 221, Part 6, and the Utility District Law under
Tennessee Code Annotated, Title 7, Chapter 82.
SECTION 21. Changes in size of the Board of Commissioners.
Should a municipality not represented on the Authority's initial Board of
Commissioners as set forth in SECTION 3 enter into a contract to sell water to or
purchase water from the Authority, or enter into a contract with the Authority for the
treatment, transportation or collection of wastewater to or for such municipality, such
municipality shall be eligible to have a representative on the Authority's Board of
Commissioners. The Authority's Board of Commissioners shall have the sole discretion
to determine whether to increase the size of the Authority's Board of Commissioners to
allow an eligible municipality to have a seat on the Board. Any increase in the size of
the Authority's Board of Commissioners for an eligible municipality shall require a two-
thirds (2/3) vote of the Board.
The number of Commissioners on the Authority's Board of Commissioners shall
always be an odd number. If the Authority's Board of Commissioners decides to
increase the size of its Board for an eligible municipality as described in the preceding
paragraph and such increase results in the Board having an even number of
Commissioners, the Commissioner for the eligible municipality shall replace the at-large
Commissioner selected pursuant to SECTION 3(c)(2) at the end of the at-large
Commissioner's existing one-year term, and the at-large Commissioner seat on the
Board shall cease to exist. If the eligible municipality is a city or county, the initial
Commissioner for the eligible municipality shall be the mayor of the city or county or
such mayor's designee whose term of office shall be concurrent with the term of the
mayor. If the eligible municipality is a utility district, the initial Commissioner shall be
appointed by the governing body of utility district. Such Commissioner's initial term shall
expire on the same date as the terms of the other Board members representing utility

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districts on the Board at the time of appointment, and thereafter such Commissioner's
term shall be four (4) years.
In the event a utility district that holds a seat on the Board of Commissioners
merges into or consolidates with another utility district or municipality so that the utility
district is dissolved, the size of the Board shall contract to one (1) less seat because of
such dissolution and such utility district's seat on the Board shall cease to exist. If this
contraction of the Authority's Board of Commissioners results in the Board having an
even number of Commissioners, the seat of the at-large Commissioner shall also cease
to exist upon the effective date of the dissolution of the utility district so that the number
of the Authority's Board of Commissioners shall remain an odd number.
In the event the at-large Commissioner seat is no longer in existence as a result
of adding an additional seat to the Board for an eligible municipality or the contraction of
the Board on account of the dissolution of a utility district as described in the two (2)
preceding paragraphs, the Authority's Board of Commissioners may re-establish the at-
large Commissioner seat described in SECTION 3(c)(2) if necessary to maintain an odd
number of Commissioners on the Board should the Board decide to add any additional
seats to the Board as set forth in this section or the size of the Board is contracted again
by the dissolution of any other utility district with a seat on the Board.
SECTION 22. Liberal construction.
This act is remedial in nature and shall be liberally construed to affect its purpose
of providing for a systematic and efficient means of distributing and encouraging the best
utilization and conservation of water resources and wastewater service and the powers
herein granted may be exercised without regard to requirements, restrictions or
procedural provisions contained in any other law or charter except as herein expressly
provided. Provided, however, that the continued operation of any utility district entering
into an agreement with the Authority, including the Utility Districts, as provided in

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SECTION 18 of this act, shall be in compliance with the Utility District Law under
Tennessee Code Annotated, Title 7, Chapter 82.
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 Grundy County. Its approval or nonapproval shall be proclaimed
by the presiding officer of the 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.