7-1-101. Definitions — Chapters 1-6.

As used in chapters 1-6 of this title, unless the context otherwise requires:

1. “City governing body” means the city council or other public agency possessing power and authority usually possessed by a city council;
2. “County governing body” means that body in a particular county that is vested with the power to levy property taxes;
3. “General services district” means a service district within a metropolitan government whose geographical limits are coextensive with the total area in which the government functions;
4. “Metropolitan government” means the political entity created by consolidation of all, or substantially all, of the political and corporate functions of a county and a city or cities;
5. “Metropolitan government charter commission” or “charter commission” means a commission established to propose to the voters for adoption the charter for a metropolitan government;
6. “Municipal corporation” means an incorporated city or town;
7. “Principal city” means:
   1. That municipal corporation having the largest population of any municipality in a particular county; or
   2. If the municipal corporation having the largest population of any municipality in a county fails to adopt a consolidation resolution within ninety (90) days of the county's adoption of a consolidation resolution, the county seat of that county, if the county seat is an incorporated municipality;
8. “Smaller city” means any municipal corporation other than the principal city; and
9. “Urban services district” means a service district within a metropolitan government in which are furnished by the metropolitan government municipal services additional to those provided in the general services district.

Acts 1957, ch. 120, § 1; 1977, ch. 453, § 1; T.C.A., § 6-3701; Acts 2019, ch. 314, § 1.

Amendments. The 2019 amendment added (7)(B).

Effective Dates. Acts 2019, ch. 314, § 2. May 8, 2019.

Cross-References. Athletic competition leave, title 8, ch. 50, part 11.

Recording of deeds where metropolitan government effective, §§ 66-24-113, 66-24-114.

Transportation systems, ownership authorized, title 7, ch. 56.

Textbooks. Tennessee Jurisprudence, 8 Tenn. Juris., Counties, §§ 11, 22; 19 Tenn. Juris., Municipal Corporations, §§ 2, 3.

Law Reviews.

Constitutional Law — 1964 Tennessee Survey (James C. Kirby, Jr.), 18 Vand. L. Rev. 1103 (1965).

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

Attorney General Opinions. Voting under the Metropolitan Government Act, OAG 97-096, 1997 Tenn. AG LEXIS 107 (7/1/97).

Voting on metropolitan planning organization, OAG 00-015, 2000 Tenn. AG LEXIS 15 (1/26/00).

Voting under Charter Government Unification Act and Metropolitan Government Act.  OAG 10-51, 2010 Tenn. AG LEXIS 51 (4/15/10).

Annexation under metropolitan form of government.  OAG 10-109, 2010 Tenn. AG LEXIS 115 (10/28/10).

7-1-102. Legislative purpose and intent — Construction — Continuation of local functions and powers.

1. It is hereby declared to be the legislative intent and purpose of chapters 1-3 of this title to provide for the consolidation of all, or substantially all, of the governmental and corporate functions now or hereafter vested in municipal corporations with the governmental and corporate functions now or hereafter vested in the counties in which such municipal corporations are located, and to provide for the creation of metropolitan governments, which may be used to fulfill the unique and urgent needs of a modern metropolitan area.
2. Chapters 1-3 of this title are hereby declared to be remedial legislation to be liberally construed as a utilization of the constitutional power granted by Amendment No. 8 to article XI, § 9 of the Constitution of Tennessee approved at an election on November 3, 1953.
3. After consolidation of a county and a municipal corporation or corporations under § 7-1-103, no functions of the governing bodies of the county and the municipal corporation, or of the officers thereof, shall be retained and continued, unless chapters 1-3 of this title or the charter of the metropolitan government expressly so provide, or unless such retention and continuation are required by the Constitution of Tennessee. After the consolidation, no officer or agency of the county or of the municipal corporation shall retain any right, power, duty or obligation, unless chapters 1-3 of this title or the charter of the metropolitan government expressly so provide, or unless such retention and continuation are required by the Constitution of Tennessee.
4. Any municipal corporation that lies in two (2) or more counties, except those in counties excluded in § 7-1-112(d), may consolidate with the county in which the majority of its territory lies.

Acts 1957, ch. 120, § 2; T.C.A., § 6-3702; Acts 1988, ch. 911, § 1.

Cross-References. Hospital authority, charter amendment not necessary to form, § 7-57-106.

Law Reviews.

Local Government — 1962 Tennessee Survey (Gilbert Merritt, Jr.), 16 Vand. L. Rev. 800 (1963).

7-1-103. Consolidation of functions.

1. Each county in this state, without regard to population, and the municipal corporations within such county, may consolidate all, or substantially all, of their governmental and corporate functions in the manner and with the consequences provided in this chapter. The consolidation, when complete, shall result in the creation and establishment of a new metropolitan government to perform all, or substantially all, of the governmental and corporate functions previously performed by the county and by the municipal corporations, the voters of which approve the consolidation.
2. Nothing contained in this section, or any other law, except § 7-1-112(d), shall be construed to prohibit a municipal corporation that lies in two (2) or more counties from consolidating its governmental and corporate functions with the county in which the majority of its territory lies.

Acts 1957, ch. 120, § 3; 1963, ch. 97, § 1; T.C.A., § 6-3703; Acts 1988, ch. 911, § 2.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal Corporations, § 4.

Law Reviews.

Constitutional Law — 1962 Tennessee Survey (James C. Kirby, Jr.), 16 Vand. L. Rev. 649 (1963).

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

7-1-104. Creation of municipality or public service district after charter commission created.

When a metropolitan government charter commission is created, as provided in § 7-2-101, no municipality and no public service district, including, but not limited to, a utility district, sanitary district or school district, shall thereafter be created in the county proposed to be included in such consolidation, unless and until the proposed charter of metropolitan government shall have been rejected by voters in a referendum election as provided in § 7-2-106, or unless and until a charter has been adopted by the voters in a referendum election as provided in § 7-2-106 with provisions permitting such municipalities or public service districts as described in § 7-1-103.

Acts 1957, ch. 120, § 15; 1963, ch. 256, § 1; T.C.A., § 6-3716.

Cross-References. Special service districts authorized, § 7-2-108.

7-1-105. Civil districts.

When a metropolitan government is created and established within a county, there shall then be and continue only two (2) civil districts, one (1) consisting of the area embraced in the urban services district and the other consisting of the area of the county other than the urban services district.

Acts 1957, ch. 120, § 20; T.C.A., § 6-3721.

Cross-References. Urban, general and special service districts, § 7-2-108.

7-1-106. Excluded smaller city — Inclusion within metropolitan government.

Any smaller city that has been excluded from a metropolitan government created and established under chapters 1-3 of this title may at any time surrender its municipal charter and become a part of that metropolitan government under such terms and conditions and by such methods and procedures as may be established in the charter of the metropolitan government; provided, that no such consolidation shall become effective until submitted to the registered voters residing within the smaller city and approved by a majority of those voting.

Acts 1957, ch. 120, § 17; 1972, ch. 740, § 4(62); T.C.A., § 6-3722.

Cross-References. Courts and judicial functions, § 7-3-311.

Smaller cities, inclusion in proposed consolidation, § 7-2-107.

Law Reviews.

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

7-1-107. Effect on local government simplification statutes.

Nothing in chapters 1-3 of this title shall be construed to alter, abridge or abrogate any provision of §§ 5-1-113 and 49-2-503 or any other law, practice, custom or tradition with respect to contractual, cooperative, unilateral or other devices for simplifying or expediting municipal or county government.

Acts 1957, ch. 120, § 22; T.C.A., § 6-3723.

7-1-108. Appointment of state officials to public utility boards.

Notwithstanding any law, including any municipal or metropolitan charter to the contrary, the appropriate appointing authority may appoint at least one (1) elected state official to serve as a member of the board of any public utility operated by a municipality or metropolitan government. This section shall only apply to those counties having a metropolitan form of government.

Acts 1981, ch. 292, §§ 1, 2.

7-1-109. Elected officials may decline salaries.

Any and all elected public officials in counties that have a metropolitan form of government are authorized to refuse or decline any and all salaries to which they may be entitled under the laws of this state or local ordinances.

Acts 1983, ch. 248, § 1.

7-1-110. Change by ordinance of local governmental entities or functions established by private act.

Any city or county office, department, board, commission, agency or function established by private act prior to the adoption of a metropolitan form of government may be altered, consolidated or abolished by ordinance of the chief legislative body of the metropolitan government if the charter of the metropolitan government does not otherwise provide for the office, department, board, commission, agency or function, and such alteration, consolidation or abolition is not otherwise prohibited by chapters 1-6 of this title or the Constitution of Tennessee.

Acts 1987, ch. 52, § 1.

7-1-111. Electric power boards — Removal of members of certain utility boards — Salary increase.

1. Notwithstanding any law to the contrary, any electric power board having a customer service greater than two hundred thousand (200,000) active electric meters within a county having a metropolitan form of government shall be composed of at least seven (7) members.
2. The initial term of office of the two (2) additional members of the electric power board appointed pursuant to this section shall be for a period of five (5) years and three (3) years respectively, with each such appointment to be effective July 1, 1988. Each successive term of office shall be for a period of five (5) years from the date of expiration of the preceding term of office.
3. Any member of a utility board created under the charter of a metropolitan government that has a population in excess of four hundred thousand (400,000), according to the 1980 federal census or any subsequent federal census, may be removed from office upon a vote of three fourths (¾) of the members of the governing body of such metropolitan government, but only after the assertion of reasons for removal as set forth in a resolution passed by three fourths (¾) of the members of such governing body and only after the holding of a public hearing before such governing body.
4. No officer of an electric system owned and operated by a metropolitan government shall receive any salary increase that exceeds ten percent (10%) of such officer's base salary for the previous year unless such increase is approved by a unanimous vote of the board.

Acts 1988, ch. 681, §§ 1, 2; 1991, ch. 390, § 1; 1991, ch. 517, § 2.

Compiler's Notes. For tables of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

7-1-112. Consolidation with county wherein majority of municipal territory lies.

1. Notwithstanding § 7-2-106, or any other law to the contrary, whenever a municipal corporation that lies in two (2) or more counties is proposed for consolidation with the county in which the majority of its territory lies, any referendum held pursuant to § 7-2-106 shall also include all qualified voters of the municipal corporation, regardless of whether such voters reside or own property outside of the boundaries of the county in which the majority of the municipal corporation's territory lies. The respective county election commissions shall cooperate fully in order to implement this section in an effective, efficient, and timely manner.
2. Notwithstanding § 2-2-107, or any other law to the contrary, whenever a municipal corporation that lies in two (2) or more counties consolidates its governmental and corporate functions with the county in which the majority of its territory lies, elections for consolidated government representation and school board representation, as well as all other referenda and elections pertaining to the affairs of such consolidated government, shall also include all qualified voters of such municipal corporation, regardless of whether such voters reside or own property outside of the boundaries of the county in which the majority of the municipal corporation's territory lies. The respective election commissions shall cooperate fully in order to implement this section in an effective, efficient, and timely manner.
3. Whenever a municipal corporation that lies in two (2) or more counties consolidates its governmental and corporate functions with the county in which the majority of its territory lies, the urban services tax prescribed pursuant to § 7-2-108(a)(5) may be levied throughout the territory of the municipal corporation; however, the general services tax prescribed pursuant to § 7-2-108(a)(5) shall not be levied in any portion of the territory of the municipal corporation that lies outside of the boundaries of such county.
4. 1. This section and §§ 7-1-102(d) and 7-1-103(b) do not apply in counties with populations according to the 1980 federal census or any subsequent federal census of:

      not less than  nor more than

      19,650 19,725

      26,400 26,500

      28,250 28,300

      28,650 28,660

      32,760 32,800

      32,850 32,950

      37,000 37,100

      49,400 49,500

      58,075 58,175

      84,000 84,100

      85,725 85,825

   2. This section and §§ 7-1-102(d) and 7-1-103(b) do not apply in counties having a metropolitan form of government and a population in excess of four hundred fifty thousand (450,000), according to the 1980 federal census or any subsequent federal census.

Acts 1988, ch. 911, §§ 3-5, 7-12.

Compiler's Notes. For table of U.S. decennial populations of counties, see Volume 13 and its supplement.

Attorney General Opinions. Assuming that the majority of the territory of a city is in one county, that county can establish a metropolitan government to include the city and the remaining parts of the county, OAG 01-17, 2001 Tenn. AG LEXIS 17 (2/6/01).

A metropolitan government may levy an urban services tax, but not a general services tax, on parcels located within the largest city but outside the county, OAG 01-17, 2001 Tenn. AG LEXIS 17 (2/6/01).

7-2-101. Metropolitan government charter commission — Creation — Methods of selecting members.

The initial step in a consolidation under this chapter shall be the creation of a metropolitan government charter commission, sometimes called “charter commission” in this chapter, by one (1) of the following methods:

1. The commission may be created by the adoption of a consolidation resolution by the governing body of a county and by the adoption of a substantially similar resolution by the governing body of the principal city in the county;
   1. The resolution may be adopted by a majority vote of the members of such governing body present and voting, a quorum being present, at any regular meeting or at any meeting specially called to consider the resolution. The resolution shall provide that a metropolitan government charter commission is established to propose to the people the consolidation of all, or substantially all, of the governmental and corporate functions of the county and its principal city and the creation of a metropolitan government for the administration of the consolidated functions;
   2. The resolution shall either:
      1. Authorize the county mayor to appoint ten (10) commissioners, subject to confirmation by the county governing body, and authorize the mayor of the principal city to appoint five (5) commissioners, subject to confirmation by the city governing body; or
      2. Provide that an election shall be held to select members of the metropolitan government charter commission;
   3. It is the legislative intent that the persons appointed to the charter commission shall be broadly representative of all areas of the county and principal city and that every effort shall be made to include representatives from various political, social, and economic groups within the county and principal municipality;
   4. Promptly after the adoption of the consolidation resolution by the governing body of a county, its clerk shall certify the fact of such adoption with a copy of the resolution to the clerk of the governing body of the principal city, and promptly after the adoption of a consolidation resolution by the governing body of the principal city, its clerk shall certify the fact of such adoption to the clerk of the governing body of the county;
   5. When the resolutions of the governing bodies of the county and of the principal city shall provide for the appointment of commissioners of the county and city, the metropolitan government charter commission shall be created and duly constituted after appointments have been made and confirmed;
   6. When the resolutions provide for an election to select members of the metropolitan government charter commission, copies of the resolution shall be certified by the clerks of the governing bodies to the county election commission, together with certificates as to the fact and date of adoption, and then an election shall be held as provided in § 7-2-102;
   7. In any county having a metropolitan form of government in existence on January 1, 1977, the metropolitan mayor or county mayor is authorized to appoint five (5) commissioners, subject to confirmation by the county governing body, and the mayor of the principal city is authorized to appoint five (5) commissioners, subject to confirmation by the city governing body;
   8. When the consolidation resolutions provide for the appointment of members of the metropolitan government charter commission, such appointments shall be made within thirty (30) days after the adoption of the resolution by the last governing body to do so, whether of the county or the principal city;
2. In counties having a board of county commissioners, a charter commission may be created by the adoption of a consolidation resolution by either the governing body of the county or the board of county commissioners and by the adoption of a substantially similar resolution by the governing body of the principal city in the county;
   1. The resolution may be adopted by majority vote of the total number of members to which such governing body is entitled, or by a majority of the members of the board of county commissioners, at any regular or called meeting of such county governing body or board of county commissioners;
   2. The resolution and the procedures concerning its adoption and certification and the appointment or election of members of the charter commission pursuant thereto shall be governed by subdivision (1), except that if members of the charter commission are to be appointed, the resolution shall authorize the county mayor to appoint six (6) commissioners, and the board of county commissioners to appoint six (6) commissioners, and the mayor of the principal city to appoint eight (8) commissioners;
      1. The commissioners appointed by the mayor of the principal city shall be made subject to confirmation by the city governing body, and the commissioners appointed by the county mayor and by the board of county commissioners shall be made subject to confirmation by whichever of the county bodies first adopts a consolidation resolution, unless both bodies adopt a consolidation resolution on the same day, in which case, the commissioners appointed by the county mayor shall be confirmed by the county governing body and the commissioners appointed by the board of county commissioners shall not be subject to confirmation;
      2. It is the legislative intent that the persons appointed shall be broadly representative of all areas of the county and principal city and that every effort shall be made to include representatives from various political, social and economic groups within the county and principal municipality;
3. The charter commission may be created in any county in the manner prescribed by private act of the general assembly; or
4. The commission may be created upon receipt of a petition, signed by qualified voters of the county, equal to at least ten percent (10%) of the number of votes cast in the county for governor in the last gubernatorial election;
   1. The petition shall be delivered to the county election commission for certification. After the petition is certified, the county election commission shall deliver the petition to the governing body of the county and the governing body of the principal city in the county. The petition shall become the consolidation resolution of the county and the principal city in the county. The resolution shall provide that a metropolitan government charter commission is established to propose to the people the consolidation of all, or substantially all, of the government and corporate functions of the county and its principal city, and the creation of a metropolitan government for the administration of the consolidated functions;
   2. The resolution shall either:
      1. Authorize the county mayor to appoint ten (10) commissioners, subject to confirmation by the county governing body, and authorize the mayor of the principal city to appoint five (5) commissioners, subject to confirmation by the city governing body; or
      2. Provide that an election shall be held to select members of the metropolitan government charter commission; provided, that if the governing body of the county and the governing body of the principal city cannot agree on the method of selecting members of the metropolitan government charter commission within sixty (60) days of certification, then an election shall be held to select members of the metropolitan government charter commission as provided in § 7-2-102;
   3. It is the legislative intent that the persons appointed to the charter commission shall be broadly representative of all areas of the county and principal city and that every effort shall be made to include representatives from various political, social, and economic groups within the county and principal municipality;
   4. When such resolution provides for the appointment of commissioners of the county and city, the metropolitan government charter commission shall be created and duly constituted after appointments have been made and confirmed;
   5. When the resolution provides for an election to select members of the metropolitan government charter commission, copies of the resolution shall be certified by the clerks of the governing bodies to the county election commission, and then an election shall be held as provided in § 7-2-102;
   6. When the consolidation resolution provides for the appointment of members of the metropolitan government charter commission, the appointments shall be made within thirty (30) days after the resolution is submitted to the governing bodies of the county and the principal city; and
   7. If the referendum to approve consolidation fails, another commission may not be created by petition for three (3) years.

Acts 1957, ch. 120, § 4; 1961, ch. 199, § 1; modified; 1977, ch. 481, §§ 1-6; modified; T.C.A., § 6-3704; Acts 1989, ch. 576, §§ 1, 2, 7; 1998, ch. 1101, § 18; 2003, ch. 90, § 2.

Code Commission Notes.

Because of the limited applicability of Acts 1989, ch. 576, the amendments by that act have been placed in notes, rather than incorporated into the text of the section. However, the history line for the section has been updated to reflect the amendment by that act. Section 7 of that act provided that 1989 amendments shall only apply to counties having a population of more than two hundred thousand (200,000), according to the 1980 federal census or any subsequent census, and having only two (2) municipalities within the county.

Acts 1989, ch. 576, § 1, effective June 8, 1989, amended (1)(B)(i) to read: “Authorize the county executive [now county mayor] to appoint nine (9) commissioners, at least one (1) of whom must be of African American descent, subject to confirmation by the county governing body and authorize the mayor of the principal city to appoint six (6) commissioners, at least one (1) of whom must be of African American descent, subject to confirmation by the city governing body and authorize the mayor of any other municipality within the county to appoint one (1) commissioner, subject to confirmation by such municipality's governing body;”.

Acts 1989, ch. 576, § 2, effective June 8, 1989, amended (1)(D) to read: “(D) Promptly after the adoption of the consolidation resolution by the governing body of a county, its clerk shall certify the fact of such adoption with a copy of the resolution to the clerk of the governing body of the principal city and the governing body of the principal city shall act upon such resolution within sixty (60) days of the receipt thereof. Failure of the governing body to so act shall render this effort at consolidation void. Promptly after the adoption of a consolidation resolution by the governing body of the principal city, the clerk shall certify the fact of such adoption to the clerk of the governing body of the county.”

Compiler's Notes. Acts 2003, ch. 90, § 2, directed the code commission to change all references from “county executive” to “county mayor” and to include all such changes in supplements and replacement volumes for the Tennessee Code.

Law Reviews.

Constitutional Law — 1962 Tennessee Survey (James C. Kirby, Jr.), 16 Vand. L. Rev. 649 (1963).

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

Attorney General Opinions. Constitutionality, OAG 89-140, 1989 Tenn. AG LEXIS 140 (12/8/89).

Procedure for county adoption of a metropolitan form of government, OAG 98-0133, 1998 Tenn. AG LEXIS 133 (8/6/98).

7-2-102. Election of members.

1. No less than forty-six (46) days nor more than sixty (60) days after the adoption of a consolidation resolution by the governing bodies of a county and of its principal city, which resolution providing for an election of the members of a metropolitan government charter commission, it shall be the duty of the county election commission to hold a special election to elect members of the charter commission.
2. The cost of the election shall be paid out of county funds.
3. The ten (10) candidates receiving the highest total vote in the election shall be elected as members of the metropolitan government charter commission.
4. Any qualified voter of the county shall be eligible for election as a member of the charter commission.
5. The deadline for filing nominating petitions for candidates for the charter commission is twelve o'clock (12:00) noon of the fortieth day before the election.

Acts 1963, ch. 260, § 1; 1972, ch. 740, § 4(60); impl. am. Acts 1972, ch. 740, § 7; T.C.A., § 6-3705.

7-2-103. Organization of charter commission — Officers and personnel — Compensation — Vacancies.

1. The members of the charter commission shall hold an organizational meeting at the courthouse at ten o'clock a.m. (10:00 a.m.) on the fifth day following their appointment or election, or at such subsequent date and place as a majority of the members may assemble.
2. The metropolitan government charter commission shall be authorized to elect a chair, a secretary, and such other officers as it may deem necessary.
3. The charter commission shall be authorized to employ such staff as may be required to assist it in drafting a charter for a single metropolitan government, which shall consolidate county and city functions as provided in this chapter and which shall be proposed for adoption.
4. Members of the charter commission shall not receive per diem or other compensation for their services, except reimbursement of actual expenses by members.
5. The staff employed by the commission shall be paid compensation as determined by the charter commission within the limits of funds available to it under this chapter.
6. Vacancies in the office of charter commission shall be filled by the remaining members.

Acts 1957, ch. 120, § 5; 1961, ch. 199, § 3; T.C.A., § 6-3706; Acts 1989, ch. 576, §§ 3, 4, 7.

Code Commission Notes.

Because of the limited applicability of Acts 1989, ch. 576, the amendments by that act have been placed in these Code Commission Notes, rather than incorporated into the text of the section. However, the history line for the section has been updated to reflect the amendment by that act. Section 7 of the act provided the amendments only apply to counties having a population of more than two hundred thousand (200,000) according to the 1980 federal census or any subsequent census, and having only two (2) municipalities within the county.

Acts 1989, ch. 576, § 3, effective June 8, 1989, amended (a) to read: “(a) The county clerk shall call and convene members of the charter commission to hold an organizational meeting at the courthouse at ten o'clock a.m. (10:00 a.m.) on the fifth day following their appointment or, if elected, on the fifth day following their certification.”

Acts 1989, ch. 576, § 4, effective June 8, 1989, amended (f) to read: “(f) Any vacancy occurring in the office of the charter commission of appointed members shall be filled in the same manner as the original appointment subject to approval by the local governing body. Any vacancy occurring in the office of the charter commission of elected members shall be filled by appointment of the county executive [now county mayor] subject to approval by the local governing body.”

7-2-104. Appropriation for charter commission — Disbursement — Cooperation from public officials.

1. Whenever any charter commission is established as provided in this chapter, it shall be the duty of the governing body of the county to appropriate sufficient funds to defray the expenses of the commission, which appropriation shall be not less than twenty-five thousand dollars ($25,000) nor more than fifty thousand dollars ($50,000). Such funds shall be disbursed by the county mayor or other fiscal officer of the county upon vouchers or warrants signed by the chair and the secretary of the commission.
2. All public officials shall, upon request, furnish the commission with all information and assistance necessary or appropriate for its work.

Acts 1957, ch. 120, § 6; 1961, ch. 199, § 4; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A., § 6-3707; Acts 1989, ch. 576, §§ 5, 7; 1997, ch. 261, § 1; 2003, ch. 90, § 2.

Code Commission Notes.

Because of the limited applicability of Acts 1989, ch. 576, the amendments by that act have been placed in these Code Commission Notes, rather than incorporated into the text of the section. However, the history line for the section has been updated to reflect the amendment by that act. Section 7 of the act provided the amendments only apply to counties having a population of more than two hundred thousand (200,000) according to the 1980 federal census or any subsequent census, and having only two (2) municipalities within the county.

Acts 1989, ch. 576, § 5, effective June 8, 1989, amended (a) by substituting “seventy-five thousand dollars ($75,000)” for “fifty thousand dollars ($50,000)”.

Compiler's Notes. Acts 2003, ch. 90, § 2, directed the code commission to change all references from “county executive” to “county mayor” and to include all such changes in supplements and replacement volumes for the Tennessee Code Annotated.

Cross-References. Creation of metropolitan government charter commissions, § 7-2-101.

Law Reviews.

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

7-2-105. Preparation and filing of proposed charter — Publication.

Any charter commission established under this chapter shall prepare and file the charter proposed by it not later than nine (9) months after the date of its initial meeting, or within such extended limit of time as may be authorized by resolution of the governing bodies of the county and principal city. Copies of the proposed charter shall be filed with the county clerk, with the city clerk of each incorporated municipality in the county and with the county election commission. The copies shall be public records, available for inspection or examination by any interested person. The charter commission shall also furnish or make available to every daily or weekly newspaper published in the county a complete copy of the charter. The charter commission shall take such other steps within the limitation of its available funds as it deems reasonable and appropriate to inform the public throughout the county of the contents of the proposed charter, and the proposed charter may be published or summarized in pamphlets and booklets to be made available for general distribution.

Acts 1957, ch. 120, § 7; impl. am. Acts 1972, ch. 740, § 7; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A., § 6-3708.

Law Reviews.

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

Attorney General Opinions. Procedure for county adoption of a metropolitan form of government, OAG 98-0133, 1998 Tenn. AG LEXIS 133 (8/6/98).

7-2-106. Referendum on proposed charter.

1. After a copy of the proposed charter has been certified to the county election commission, as provided in § 7-2-105, it shall be the duty of the county election commission to hold a special referendum election for the ratification or rejection of the proposed charter. The ballot shall be prepared so as to provide a choice for voters between:

   For Consolidation of   and                (Name of city)      (Name of county)  Against Consolidation of   and               (Name of city)      (Name of county)

   Click to view form.

2. The special referendum election shall be held on a date fixed by the county election commission not less than eighty (80) days nor more than one hundred (100) days subsequent to the filing of the charter as provided in § 7-2-105. Notice of the referendum election shall be given as required in other elections on questions submitted to the vote of the people. The date of the election and the form of ballot shall be uniform throughout the entire county, but the county election commission shall canvass the returns and certify the results as if separate elections were being held for the principal city and for the area of the county outside of the principal city of the county. For the purpose of determining whether the proposed charter has been accepted or rejected, the county election commission shall canvass the returns and certify the results:
   1. For the principal city; and
   2. For the entire area of the county outside of the principal city, including in such area the smaller cities, if any, within the county.
3. The proposed charter shall be deemed ratified and adopted if the proposed charter is approved by a majority of those voting within the principal city and also a majority of those voting in the county outside of the principal city.
4. The proposed charter shall be deemed rejected and shall not become effective if it is disapproved by a majority of those voting in the principal city. The proposed charter shall also be deemed rejected and shall not become effective if it is disapproved by a majority of those voting in the county outside of the principal city.
5. The returns of the referendum election shall be certified by the county election commission to the secretary of state, together with a copy of the charter previously filed with the county election commission by the charter commission. Thereupon, the secretary of state shall issue a proclamation showing the result of the election on the adoption or rejection of the proposed charter, one (1) copy of which proclamation shall be attached to the copy of the charter certified to the secretary of state and one (1) copy of which shall be delivered to the county clerk, who shall attach the proclamation to the copy of the charter certified to the county clerk. Whenever a charter for metropolitan government has been adopted, the two (2) certified copies with proclamations attached to the certified copies shall be deemed duplicate original copies of the charter of the metropolitan government. The certified copy of the charter and proclamation deposited with the county clerk shall subsequently be delivered by the county clerk to the officer of the metropolitan government that the metropolitan charter may direct.

Acts 1957, ch. 120, § 8; 1972, ch. 740, § 4(61); impl. am. Acts 1972, ch. 740, § 7; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A., § 6-3709.

Law Reviews.

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

Attorney General Opinions. Procedure for county adoption of a metropolitan form of government, OAG 98-0133, 1998 Tenn. AG LEXIS 133 (8/6/98).

In a referendum on the question of whether to ratify or reject a metropolitan charter, a person who owns property in the principal city but who lives in the outlying county may not vote in both the election for the principal city and for the county outside of the principal city, OAG 05-115 (7/26/05), 2005 Tenn. AG LEXIS 117.

Voting under Charter Government Unification Act and Metropolitan Government Act.  OAG 10-51, 2010 Tenn. AG LEXIS 51 (4/15/10).

7-2-107. Smaller cities — Inclusion in proposed consolidation — Referendum.

1. After a charter commission has been created, any smaller city within the county may by action of its legislative body appoint a representative to consult with the charter commission concerning the terms upon which the functions of such smaller city may be included in the proposed consolidation. Any terms proposed by the charter commission with respect to the smaller city shall be filed and published separately as an appendix to the metropolitan charter proposed with respect to the principal city, and shall be submitted independently in a special referendum election for ratification or rejection by the voters of the smaller city and by the voters of the county outside the smaller city in a manner similar to that provided in §§ 7-2-105 and 7-2-106 with respect to the proposed metropolitan charter for the principal city.
2. The appendix shall be deemed ratified and adopted if it is approved by a majority of those voting within the smaller city and also by a majority of those voting in the county outside of such smaller city, but shall not become effective unless the proposed metropolitan charter with respect to the principal city and the county is ratified and adopted.
3. The appendix shall be deemed rejected and shall not become effective if it is disapproved by a majority of those voting in the smaller city. It shall also be deemed rejected and shall not become effective if it is disapproved by a majority of those voting in the county outside of such smaller city.
4. The returns of the referendum election on the proposed appendix shall be certified and proclaimed in a manner similar to that provided in § 7-2-106 with respect to the proposed metropolitan charter for the principal city.
5. Where a proposed charter of metropolitan government is ratified by a majority of those voting in a principal city and of those voting in the county outside of the principal city, but a smaller city continues, either because a proposed appendix has been rejected or no such appendix has been proposed, the smaller city shall become a part of the general services district, but the smaller city may not thereafter be included within the urban services district by action of the metropolitan council.

Acts 1957, ch. 120, § 9; T.C.A., § 6-3710.

Cross-References. Excluded smaller cities, inclusion within metropolitan government, § 7-1-106.

Attorney General Opinions. Two cities contained in a metropolitan government cannot comprise two separate urban services districts subject to different property tax levies to accommodate the outstanding debt and assets of each city prior to the establishment of the metropolitan government, OAG 01-17, 2001 Tenn. AG LEXIS 17 (2/6/01).

7-2-108. Metropolitan charters — Contents — Removal of members of boards, commissions or authorities.

1. The proposed metropolitan charter shall provide:
   1. For the creation of a metropolitan government vested with:
      1. Any and all powers that cities are, or may hereafter be, authorized or required to exercise under the Constitution and general laws of the state, as fully and completely as though the powers were specifically enumerated in the Constitution and general laws of the state, except only for such limitations and restrictions as are provided in chapters 1-6 of this title or in such charter; and
      2. Any and all powers that counties are, or may hereafter be, authorized or required to exercise under the Constitution and general laws of the state, as fully and completely as though the powers were specifically enumerated in the Constitution and general laws of the state, except only for such limitations and restrictions as are provided in chapters 1-6 of this title or in such charter;
   2. That the territory embraced in the metropolitan government shall be the total area of the county;
   3. The name of the metropolitan government, which name may be:
      1. The name of the principal city followed by the words “metropolitan government”;
      2. The name of the county followed by the words “metropolitan government”;
      3. A compound word consisting of the name of the principal city of the county, followed by the words “metropolitan government”; or
      4. Such other name as the charter commission shall deem historically and geographically appropriate;
   4. That the metropolitan government shall be a public corporation, with perpetual succession, capable of suing and being sued, and capable of purchasing, receiving and holding property, real and personal, and of selling, leasing or disposing of property, real and personal, to the same extent as other governmental entities;
   5. For two (2) service districts within the geographical limits of the metropolitan government, a general services district and an urban services district, as to both of which districts the metropolitan government shall have jurisdiction and authority. The general services district shall consist of the total area of the county. The urban services district shall consist originally of the total area of the principal city at the time of the filing of the proposed charter with the county election commission, together with such area of any smaller cities as may be specified in an appendix duly ratified and adopted under § 7-2-107. In the event additional territory has been added to the principal city by annexation, effective subsequent to the creation of a charter commission or subsequent to the time of the filing of the proposed charter, the metropolitan council is hereby authorized, and it shall be its duty to remove from the total area of the urban services district such areas of the principal city as to which the metropolitan government will not be able to provide substantial urban services within a reasonable period, that shall not be greater than one (1) year after ad valorem taxes in the annexed area become due, and which shall specifically include sanitary sewers within a period that shall not be greater than thirty-six (36) months after ad valorem taxes in the annexed area become due;
   6. That the area of the urban services district may be expanded and its territorial limits extended by annexation whenever particular areas of the general services district come to need urban services and the metropolitan government becomes able to provide such service within a reasonable period. The annexation shall be under provisions and limitations specified in the charter, consistent with those provided by §§ 6-51-101 — 6-51-106;
   7. For the functions of the metropolitan government that shall be performed throughout the entire general services district and the governmental services that shall be rendered in such district;
   8. That the tax levy for the general services district shall be set so as to be sufficient, with other available funds and grants, to defray the cost of all governmental services that are provided generally throughout or on behalf of such district;
   9. For the functions of the metropolitan government that shall be performed within the urban services district and the governmental services that shall be rendered in such district;
   10. That the tax levy for the urban services district shall be set so as to be sufficient, with other available funds and grants, to defray the cost of municipal-type governmental services that are provided within such district;
   11. For a metropolitan council, which shall be the legislative body of the metropolitan government and shall be given all the authority and functions of the governing bodies of the county and cities being consolidated, with such exceptions and with such additional authority as may be specified elsewhere in chapters 1-6 of this title;
   12. For the size, method of election, qualification for holding office, method of removal, term of office and procedures of the metropolitan council, with such other provisions with respect to the council as are normally related to the organization, powers and duties of governing bodies in cities and counties;
   13. For the assignment of administrative and executive functions to officers of the metropolitan government, which officers may be given, subject to such limitations as may be deemed appropriate, all or any part of the administrative and executive functions possessed by the county and cities being consolidated and such additional powers and duties, not inconsistent with general law, as may be deemed necessary or appropriate for the metropolitan government;
   14. For the names or titles of the administrative and executive officers of the metropolitan government, their qualifications, compensation, method of selection, tenure, removal, replacement and such other provisions with respect to such officers, not inconsistent with general law, as may be deemed necessary or appropriate for the metropolitan government;
   15. That the urban services district shall be and constitute a municipal corporation with a three-member urban council, whose sole function shall be a mandatory obligation to levy a property tax adequate with other available funds to finance the budget for urban services, as determined by the metropolitan council. The proposed metropolitan charter shall provide the method of selecting the urban council;
   16. For such administrative departments, agencies, boards and commissions as may be necessary and appropriate to perform the consolidated functions of city and county government in an efficient and coordinated manner and for this purpose for the alteration or abolition of existing city and county offices, departments, boards, commissions, agencies and functions, except where otherwise provided in chapters 1-6 of this title or prohibited by the Constitution of Tennessee;
   17. For the maintenance and administration of an effective civil service system, and also for the consolidation of county and city employees' retirement and pension systems and the regulation of such consolidated system; provided, that nothing in chapters 1-6 of this title or in a charter adopted pursuant to those provisions shall impair or diminish the rights and privileges of the existing employees under civil service or in the existing county and city employees' retirement and pension systems;
   18. For the consolidation of the existing school systems with the county and city or cities, including the creation of a metropolitan board of education, which board may be vested with power to appoint a director of schools, if there are no special school districts operating in the county. If one (1) or more special school districts operate within the county, then the metropolitan charter need not provide for the consolidation of the existing school systems. If the school districts are not consolidated, then any special school district shall continue to exist as a separate entity;
   19. For a determination, as between the general services district and the urban services district, of proportionate responsibility for the existing county bonded indebtedness, both countywide and district, and for the existing municipal indebtedness;
   20. For the method and procedure by which the charter may subsequently be amended; provided, that no such amendment shall be effective until submitted to the qualified voters residing within the general services district and approved by a majority of those voters voting on the amendment;
   21. For such procedures, methods and steps as are determined to be necessary or appropriate to effectuate a transition from separate county and city governments into a single metropolitan government in which the functions of county and of city have been consolidated; and
   22. Such terms and provisions as are contained in any private act or municipal charter with respect to any municipally owned utility supported by its own revenues and operated, administered and managed pursuant to the private act or municipal charter; provided, that such terms and provisions of the charter may subsequently be amended pursuant to subdivision (a)(20).
2. The metropolitan charter may provide for annual assessments of real property.
3. In each county in this state, without regard to population, the metropolitan charter may provide, in addition to the urban services district and general services district required by subdivision (a)(5), for one (1) or more special service districts within all or any part of the general services district outside the urban services district, for the purpose of furnishing in any part or all of the general services district one (1) or more services that are furnished within the urban services district. If the metropolitan charter provides for special service districts, the following provisions shall apply to the creation, alteration, and taxation of special service districts:
   1. The boundaries of special service districts shall be determined by the metropolitan council and shall become fixed by ordinance of the metropolitan council thirty (30) days or more after notice of the determination of the boundaries of a district has been given to the property owners of the district. Notice shall be given by mailing a description of the boundaries of the district to all of the property owners of record within the district, at their last known address. It shall not be necessary for the boundaries of any special service district to be contiguous with the boundaries of the urban services district. The boundaries of any special service district may be altered at any time by means of the same procedure by which it was created;
   2. The metropolitan council shall levy an annual ad valorem tax upon the property owners of each special service district. The tax shall be set at a rate sufficient to pay that special service district's share of the total budget of the metropolitan government for the particular service being rendered to the residents and property owners of the district. The tax shall be assessed in the same manner as the general services district tax and collected as an addition to the general services district tax;
   3. Each special service district may be given a name that the metropolitan council deems appropriate, and the boundaries of special service districts may overlap or be coextensive with boundaries of other special service districts;
   4. In the case of special service districts for sanitary sewers, the sanitary sewers shall be furnished to the residents and property owners of the special service districts within thirty-six (36) months after ad valorem taxes in the special service districts become due; and
   5. When substantial urban services are offered within an area served by special service districts, then that area shall become a part of the urban services district under the charter provisions and limitations established pursuant to subdivision (a)(6).
4. Those counties with populations in excess of four hundred fifty thousand (450,000), according to the 1980 federal census or any subsequent federal census, and having a metropolitan form of government, shall provide that any member of a board, commission or authority created under the charter of a metropolitan government may be removed from office upon a vote of three fourths (¾) of the members of the governing body of the metropolitan government, but only for good cause shown as set forth in a resolution passed by a three-fourths (¾) majority vote of the members of the governing body, and only after the holding of a public hearing before the governing body.

Acts 1957, ch. 120, § 10; 1961, ch. 199, § 5; 1963, ch. 42, § 1; 1970, ch. 467, § 1; 1971, ch. 14, § 1; impl. am. Acts 1972, ch. 740, § 7; T.C.A., § 6-3711; Acts 1991, ch. 517, § 1; 1992, ch. 828, § 1; 1993, ch. 179, § 1; 2001, ch. 115, § 1; 2001, ch. 168, § 1; 2009, ch. 371, § 1.

Code Commission Notes.

Former § 7-2-108(a)(5)(B), concerning adoption of metropolitan governments in counties by September 1, 2001, was deemed obsolete and was deleted by the code commission in 2005.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. Assessment of testing fee on driving while intoxicated convictions for use of testing unit, § 55-10-403.

Board of equalization sessions, duration, § 67-1-404.

Council members, minimum salaries in municipalities of over 170,000 population, § 7-51-302.

Hospital authority act is supplemental to powers conferred by other law, § 7-57-106.

Judges, municipal, minimum salary in municipalities of over 170,000 population, § 6-56-151.

Mayor, minimum compensation in municipalities of over 170,000 population, § 7-51-301.

Prisoner furloughs, §§ 41-2-142, 41-2-143.

Public service districts restricted, § 7-1-104.

Solid waste energy recovery facilities, construction authorized, title 68, ch. 211, part 5.

Transportation systems, ownership authorized, title 7, ch. 56.

Utilities, cut-off procedure, title 65, ch. 32.

Law Reviews.

Open Space Taxation and State Constitutions (David A. Myers), 33 Vand. L. Rev. 837 (1980).

Two Claims, Two Keys—Overcoming Tennessee's Dual-Majority Voting Mechanism to Facilitate Consolidation Between Memphis City and Shelby County (D. Eric Setterlund), 41 U. Mem. L. Rev. 933 (2011).

Attorney General Opinions. Two cities contained in a metropolitan government cannot comprise two separate urban services districts subject to different property tax levies to accommodate the outstanding debt and assets of each city prior to the establishment of the metropolitan government, OAG 01-17, 2001 Tenn. AG LEXIS 17 (2/6/01).

A metropolitan charter must provide for the consolidation of the existing school systems with the county and city or cities, including the creation of a metropolitan board of education, OAG 01-17, 2001 Tenn. AG LEXIS 17 (2/6/01).

A metropolitan government charter could provide for a city manager, OAG 06-100 (6/12/06), 2006 Tenn. AG LEXIS 109.

A metropolitan charter provision limiting annexation to one of the methods set out by the general law (referendum) is permissible and complies with T.C.A. § 7-2-108(a)(6).  OAG 10-104, 2010 Tenn. AG LEXIS 110 (10/12/10).

Annexation under metropolitan form of government.  OAG 10-109, 2010 Tenn. AG LEXIS 115 (10/28/10).

Part 1
General Provisions

Part 1
General Provisions

7-5-101. Short title.

This chapter shall be known and may be cited as the “Metropolitan Governments' Port Authority Act.”

Acts 1979, ch. 95, § 1; T.C.A., § 6-3750.

7-5-102. Declaration of purpose and necessity — Exemption from taxation.

It is hereby declared that a clear need exists in metropolitan areas of Tennessee for improved transportation and navigation for the movement and transportation of people, goods and merchandise, and for the creation of expanded employment opportunities through the promotion of commerce and industry, with minimal pollution, which requires that such metropolitan areas have the option of placing the central operation and financing of such metropolitan port and development agencies within metropolitan instrumentalities, and that such instrumentalities have the authority to acquire from the state, or other owners, real and personal property, and to develop, manage and operate the same for economic and industrial development. It is hereby declared that port authorities created pursuant to this chapter are public and governmental bodies acting as agencies and instrumentalities of the creating and participating municipalities; and that the acquisition, operation, financing and disposal of ports, lands, industrial and other related facilities are hereby declared to be for a public and governmental purpose and a matter of public necessity. The property and revenues of the authority or any interest in the property and revenues shall be exempt from all state, county and municipal taxation.

Acts 1979, ch. 95, § 2; T.C.A., § 6-3751.

7-5-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Authority” means a metropolitan port authority created pursuant to this chapter;
2. “Board” means the board of commissioners of an authority;
3. “Bonds” includes notes, interim certificates or other obligations of an authority;
4. “Contracting party” or “other contracting party” means any party to a sale contract, lease, or loan agreement except the authority;
5. “Creating municipality” means any city or county having a metropolitan form of government and having a population of not less than one hundred thousand (100,000), that creates an authority pursuant to this chapter;
6. “Enterprise” means the manufacturing, processing, assembling, and commercial service operations to be carried on with or otherwise using the facilities of a project;
7. “Executive officer” means the mayor, county mayor, or other chief executive officer of any creating municipality;
8. “Governing body” means the chief legislative body of any creating municipality;
9. “Lease” includes a lease containing an option to purchase the project for a nominal sum upon payment in full or provision for the purchase of all bonds issued in connection with the project and all interest on the bonds and all other expenses in connection with the project, and a lease containing an option to purchase the project at any time, as provided in the option, upon payment of the purchase price, which shall be sufficient to pay all bonds issued in connection with the project and all interest on the bonds and all other expenses incurred in connection with the project, but which payment may be made in the form of one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of the lessee providing for time payments, including, without limitation, interest on the notes, debentures, bonds or other secured or unsecured debt obligations sufficient for such purposes and delivered to the corporation or to the trustee under the indenture pursuant to which the bonds were issued;
10. “Loan agreement” means an agreement providing for an authority to loan the proceeds derived from the issuance of bonds pursuant to this chapter to one (1) or more contracting parties, to be used to pay the costs of one (1) or more projects and providing for the repayment of the loan by the other contracting party or parties, and which may provide for the loans to be secured or evidenced by one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of the contracting party or parties delivered to the authority or to the trustee under the indenture pursuant to which the bonds were issued;
11. “Metropolitan government” means the political entity created by consolidation of all, or substantially all, of the political and corporate functions of a county and a city or cities;
12. “Pollution” means the placing of any noxious or deleterious substances, including noise, in any air or water of or adjacent to the state of Tennessee or affecting the physical, chemical or biological properties of any air or waters of or adjacent to the state of Tennessee in a manner and to an extent that renders or is likely to render the air or waters inimical or harmful to the public health, safety or welfare, or to any animal, bird or aquatic life, or to the use of the air or waters for domestic, industrial, agricultural or recreational purposes;
13. “Pollution control facilities” means any equipment, structure or facility or any land and any building, structure, and facility or other improvement of any kind, or any combination thereof, and all real and personal property deemed necessary therewith having to do with or the end purpose of which is the control, abatement or prevention of water, air, noise or general environmental pollution, including, but not limited to, any air pollution control facility, noise abatement facility, water management facility, wastewater collecting systems, wastewater treatment works, or solid waste disposal facility;
14. “Port” means a terminal facility with all associated components necessary for the loading and unloading of goods and people involved in inland waterway transport and navigation;
15. 1. “Project” means all or any part of, or any interest in:
       1. Any land and building, including office building, and facility or other improvement on land, and all real and personal properties deemed necessary in connection therewith, whether or not now in existence, that shall be suitable for the following or by any combination of two (2) or more thereof:

1. Any industry for the manufacturing, processing or assembling of any agricultural, mining, or manufactured products; any commercial enterprise in selling, providing, or handling any financial service or in storing, warehousing, distributing or selling any products of agriculture, mining, or industry;
2. Any undertaking involving the use of ship canals, ports or port facilities, off-street parking facilities, docks or dock facilities, or harbor facilities, or of railroads, monorail or tramway, railway terminals, or railway belt lines and switches;
3. All or any part of any office building or buildings for the use of such tenant or tenants as may be determined or authorized by the board, including, without limitation, any industrial, commercial, financial or service enterprise, any nonprofit domestic corporation or enterprise now or hereafter organized, whose purpose is the promotion, support and encouragement of either agriculture or commerce in this state or whose purpose is the promoting of the health, welfare and safety of the citizens of the state;
4. Any office or other public building for any metropolitan government having a population of not less than one hundred thousand (100,000), or any board of public utilities, or any public authority, agency or instrumentality of the state of Tennessee or of the United States;
5. Any buildings, structures and facilities, including the site thereof, machinery, equipment and furnishings, suitable for use by any metropolitan government having a population of not less than one hundred thousand (100,000) as health care or related facilities, including, without limitation, hospitals, clinics, nursing homes, research facilities, extended or long-term care facilities, and all buildings, structures and facilities deemed necessary or useful in connection therewith;
6. Any nonprofit educational institution in any manner related to or in furtherance of the educational purposes of such institution, including, but not limited to, classroom, laboratory, housing, administrative, physical education, and medical research and treatment facilities;
7. Any planetarium or museum; and
8. Any facilities for any recreation or amusement park, public park or theme park suitable for use by any private corporation or any governmental unit of the state of Tennessee, including the state of Tennessee;

   Impl. am. Acts 1978, ch. 934, §§ 16, 36; Acts 1979, ch. 95, § 3; T.C.A., § 6-3752; Acts 2003, ch. 90, § 2.

   Compiler's Notes. For tables of population of Tennessee municipalities, and for U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Not included are facilities designed for the sale or distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities, except such as are specifically included in this subdivision (15)(A); and

Any pollution control facilities that are suitable for use by any of the facilities listed in subdivision (15)(A)(i) or by any public utility whether publicly or privately owned, board of public utilities, public authority, or agency or instrumentality of the state of Tennessee or the United States, or by any combination of two (2) or more;

The board shall find with respect to any office building financed under this chapter that the acquisition and leasing or sale of such building, or the financing of the acquisition and leasing or sale by loan agreement, as the case may be, will develop trade and commerce in and adjacent to the municipality, will contribute to the general welfare and will alleviate conditions of unemployment, and such finding by the board shall be conclusive;

“Revenues” of a project, or derived from a project, include payments under a lease or sale contract and repayments under a loan agreement, or under notes, debentures, bonds and other secured or unsecured debt obligations of a lessee or contracting party delivered as provided in this chapter;

“Sale contract” means a contract providing for the sale of one (1) or more projects to one (1) or more contracting parties and includes a contract providing for payment of the purchase price in one (1) or more installments. If the sale contract permits title to the project to pass to the other contracting party or parties prior to payment in full of the entire purchase price, the sale contract shall also provide for the other contracting party or parties to deliver to the authority or to the trustee under the indenture pursuant to which the bonds were issued one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of such contracting party or parties providing for timely payments, including, without limitation, interest on the notes, debentures, bonds or other secured or unsecured debt obligations for the balance of the purchase price at or prior to the passage of such title; and

“State” means the state of Tennessee.

Acts 2003, ch. 90, § 2, directed the code commission to change all references from “county executive” to ”county mayor” and to include all such changes in supplements and replacement volumes for the Tennessee Code Annotated.

7-5-104. Creation of metropolitan port authority.

1. Any metropolitan government having a population of not less than one hundred thousand (100,000) may create a metropolitan port authority in the manner provided in this chapter.
2. The governing body of the creating municipality, if it shall determine the public convenience and necessity requires the creation of a metropolitan port authority, shall adopt, and the executive officer of the creating municipality shall approve, a resolution so declaring and creating an authority, which resolution shall designate the name and principal office address of the authority. A certified copy of the resolution shall be filed with the secretary of state and with the commissioner of transportation, and upon adoption and filing, the authority shall constitute a body politic and corporate, with all the powers provided in this chapter. A copy of the resolution shall also be filed with the department of community and economic development, or its functional successor.

Acts 1979, ch. 95, § 4; T.C.A., § 6-3753.

Cross-References. Creation without charter amendment, § 7-5-113.

Compiler's Notes. For tables of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

7-5-105. Board of commissioners.

1. The governing power of the authority shall be vested in a board of commissioners of nine (9) persons, each of whom shall have no financial interest in the authority or its concessions, appointed by the executive officer of the creating municipality and confirmed by resolution of its governing body. All commissioners shall be of excellent character and reputation and any commissioners appointed from the fields of finance, industry or commerce, and real estate shall be eminently qualified in their fields of endeavor and shall possess all necessary licenses enabling them to practice their professions in Tennessee.
2. Terms of office for the commissioners shall be as follows: the term of the first two (2) commissioners confirmed shall be one (1) year, for the second two (2) commissioners confirmed, two (2) years and for the last five (5) commissioners confirmed, three (3) years. The succeeding commissioners shall be appointed for a term of three (3) years. In the event of a failure to appoint or confirm a successor to any member of the board, the commissioner whose term has expired shall continue to serve until such commissioner's successor has been duly confirmed as provided in this section, but in no event for longer than one (1) year after such commissioner's term has expired. In the event of a vacancy on the board by reason of nonresidence, incapacity, resignation or death, a successor shall be appointed and confirmed as provided in this section, and within one (1) year after the vacancy occurs. A commissioner may be removed from office by a two-thirds (2/3) vote of the governing body of the creating municipality, but only after notice of the cause of such removal has been served upon the commissioner, and only after the commissioner has been granted an opportunity for a public hearing in such cause.
3. Before entering upon their duties, all commissioners shall take and subscribe to an oath of office as provided by the Constitution of Tennessee and by law for municipal officers. Copies of the oath of each commissioner shall be filed with the clerk of the creating municipality.
4. Any person of at least twenty-one (21) years of age and who has resided within the creating municipality for a period of at least one (1) year immediately preceding such person's confirmation by the governing body shall be eligible to serve as a member of the board. Any commissioner who ceases to reside within the creating municipality shall automatically be ineligible to serve in the office as of the date such commissioner ceases to reside within the municipality. Such cessation of residence within the creating municipality shall constitute a resignation from the board.
5. The board shall elect from among its members a chair, vice chair and any other such officers it may in its bylaws determine are necessary. A majority of the commissioners shall constitute a quorum for the transaction of business. The board shall hold regular meetings at least once every three (3) months, and at such regular time and place as the commissioners may determine by resolution or bylaw; additional or special meetings may be held as determined by the board.
6. Commissioners shall receive no salary, but shall be reimbursed for necessary expenses incurred in the performance of their official duties by the authority or by appropriation of the governing body.
7. Except as expressly otherwise specified in this chapter, all power granted in this chapter to an authority shall be exercised by the board.

Acts 1979, ch. 95, § 5; T.C.A., § 6-3754; Acts 1984, ch. 556, § 1.

7-5-106. Officers and other employees.

The board shall appoint a port authority manager who shall be the chief executive and administrative officer of the authority, and shall enter into a contract with the manager establishing such port authority manager's salary and term of office. The manager shall appoint, subject to the approval of the board, all other officers and other employees subject to any civil service plan adopted by the board. The port authority manager shall prepare an annual operating budget of the authority and submit the budget to the board for approval at least sixty (60) days prior to the beginning of the fiscal year. If the budget shall not have been acted upon by the board on the first day of the fiscal year, it shall then automatically go into effect. The manager shall also submit periodic reports to the board as the board may direct. The manager shall attend all meetings of the board.

Acts 1979, ch. 95, § 6; T.C.A., § 6-3755.

7-5-107. General powers.

An authority has all powers necessary to accomplish the purposes of this chapter, excluding the power to levy and collect taxes and special assessments, including but not limited to, the power to:

1. Have perpetual succession, sue and be sued, and adopt a corporate seal;
2. Acquire, construct, purchase, operate, maintain, replace, repair, rebuild, extend, and improve within the boundaries of the creating municipality and in contiguous counties so long as the governing bodies of such counties grant their concurrence and agreement, ports and any and all other related facilities, equipment, projects and appurtenances necessary or convenient for the promotion of industrial development, commerce and recreation and for the improvement of the access to all channels of commerce, and make the facilities available to any firm, person, public or private corporation, to any other shipper, consignee, or carrier, and charge for their use and for any and all services performed by the authority; provided, that nothing in this chapter shall give the authority the power or the duty to construct, purchase, operate, maintain, replace, repair, rebuild, extend and improve any public-use freight port or terminal; and provided, further, that such powers granted by this subdivision (2) shall only be exercised over lands acquired by the authority pursuant to the powers granted in this chapter;
3. Issue and sell bonds payable solely out of the revenue and receipts derived from the authority's projects or of any thereof as may be designated in the proceedings of the authority commissioners under which the bonds shall be authorized to be issued, including debt obligations of the lessee, devisee, or contracting party obtained from or in connection with the financing of a project;
4. Borrow money from banks and other financial institutions by issuing its notes for the purpose of carrying out any of its powers;
5. As security for the payment of the principal of and interest on any bonds or notes so issued and any agreements made in connection with the bonds or notes, mortgage and pledge any or all of its projects, or any part or parts of its projects, whether then owned or thereafter acquired, and pledge the revenues and receipts from its projects, or from any thereof, or assign and pledge all or any part of its interest in and rights under the leases, sale contracts or loan agreements relating to its projects or to any thereof;
6. Apply to the proper authorities of the United States, pursuant to appropriate law, for the right to establish, operate, and maintain foreign-trade zones within the limits of the port authority and establish, operate, and maintain the foreign-trade zones;
7. Authorize the application for and establishment, operation and maintenance of foreign-trade subzones outside the limits of the port authority through the authority's foreign-trade zone upon the request of any party and the approval of a majority of the legislative body in the county or municipality in which the requesting party is located;
8. Accept donations to the authority of cash, lands or other property to be used in the furtherance of the purposes of this chapter;
9. Accept grants, loans, or other financial assistance from any federal, state, county, or municipal agency, or in aid of the acquisition or improvement of the administration and operation of any of the facilities provided for in this chapter;
10. Purchase, rent, lease or otherwise acquire and dispose of any and all kinds of property, real, personal or mixed, tangible or intangible, and whether or not subject to mortgages, liens, charges, or other encumbrances, that in the judgment of the commissioners, is necessary or convenient to carry out the powers granted in this section. The authority granted in this section to acquire property shall include, but not be limited to, the acquisition of lands in the vicinity of the port and terminal facilities provided for in this section, and to give priority for the use of such lands to projects requiring access to inland waterways in their operations;
11. Make contracts and execute instruments containing such covenants, terms and conditions, as in the judgment of the commissioners, may be necessary, proper or advisable for the purpose of obtaining grants, loans, or other financial assistance from any federal or state agency, for or in aid of the acquisition or improvement of the facilities provided for in this chapter; make all other contracts and execute all other instruments including, without limitation, licenses, long-term or short-term leases, deeds, mortgages and deeds of trust, and other agreements relating to property and facilities under its jurisdiction, and the construction, operation, maintenance, repair, and improvement thereof, as in the judgment of the board, may be necessary, proper, or advisable for the furtherance of the purposes of this chapter, and the full exercise of the powers granted in this section; and carry out and perform the covenants, terms, and conditions of all such contracts or instruments;
12. Enter upon any lands, waters, and premises for the purpose of making surveys, soundings, and examination in connection with the acquisition, improvement, operation, or maintenance of any of the facilities provided for in this chapter;
13. Promulgate and enforce such rules and regulations as the board may deem proper for the orderly administration of the authority and the efficient operation of its facilities;
14. Use in the performance of its functions the officers, agents, employees, services, facilities, records and equipment of the creating municipality, with the consent of any such municipality and subject to such terms and conditions as may be agreed upon; and
15. Do all acts and things necessary, or deemed necessary or convenient, to carry out the powers expressly given in this chapter. None of the powers created in this section may be exercised either directly or indirectly by the municipality to provide real estate that had been condemned by eminent domain subsequent to March 29, 1979, while such real estate was in use as residential dwellings, it being the intent of this chapter that none of the power or authority created in this chapter and vested in either the creating municipality or the authority to be created shall be exercised in such a way that real estate utilized in creating or carrying out the purposes or functions of the authority provided in § 7-5-104 shall have been condemned or acquired by eminent domain after March 29, 1979, while it was in use as residential dwellings.

Acts 1979, ch. 95, § 7; T.C.A., § 6-3756; Acts 1981, ch. 295, § 1.

Cross-References. Foreign trade zones, title 7, ch. 85.

7-5-108. Real property interests.

Any creating municipality, upon the written recommendation of the board, may acquire any interest in land within the boundaries of the creating municipality by gift, purchase, lease, or condemnation and may transfer such interest to an authority by sale, lease or gift. Such transfer may be authorized by ordinance of the governing body of the creating municipality without submission of the question to the voters and without regard to the requirements, restrictions, or other provisions contained in any other general, special, or local law, with the exception of title 29, chapters 16 and 17, or as the same may be hereafter enacted. None of the foregoing interest in land transferred to an authority by any creating municipality shall have been acquired by eminent domain after March 29, 1979, while the land was in use as residential dwellings.

Acts 1979, ch. 95, § 8; T.C.A., § 6-3757.

7-5-109. Bonds.

1. The authority has the power to issue negotiable bonds from time to time in order to accomplish any of the purposes authorized by this chapter, and it also has the power to issue refunding bonds for the purposes, and in the amounts and manner provided in title 9, chapter 21. All the bonds shall be payable solely from all or any part of the revenues, income and charges of the authority and the bonds shall not constitute an obligation of the creating municipality, and the bonds shall so state.
2. The bonds shall be authorized by resolution of the board and shall bear such date, mature at such time or times, bear interest at such rate or rates payable annually or semiannually, be in such form and denominations, be subject to such terms of redemption with or without premium, carry such registration privileges, be payable in such medium and at such place or places, be executed in such manner, all as may be provided in the resolution authorizing the bonds. The bonds may be sold at public or private sale in such manner and for such amount as the board may determine.
3. The resolution may include any covenants with the bondholders deemed necessary by the board to make the bonds secure and marketable, including, but not limited to, covenants regarding the application of the bond proceeds; the pledging, application and securing of the revenues of the authority; the creation and maintenance of reserves; the investment of funds; the issuance of additional bonds; the maintenance of minimum fees, charges and rental; the operation and maintenance of its port authority; insurance and insurance proceeds; accounts and audits; the sale of port authority properties; remedies of bondholders; the vesting in a trustee or trustees such powers and rights as may be necessary to secure the bonds and the revenues and funds from which they are payable; the terms and conditions upon which bondholders may exercise their rights and remedies; the replacement of lost, destroyed or mutilated bonds; the definition, consequences and remedies of an event of default; the amendment of such resolution; and the appointment of a receiver in the event of a default.
4. Any holder of any such bonds, including any trustee for any bondholders, may enforce their rights against the authority, its board or any officer, agent or employee thereof by mandamus, injunction or other action in any court of competent jurisdiction, subject to the covenants included in the bond resolution.
5. All sums received as accrued interest from the sale of any bonds shall be applied to the payment of interest on the bonds. All sums received as principal or premium from the sale shall be applied to the purpose for which the bonds were issued, and may include, but not limited to, expenses for fiscal, legal, engineering and architectural services, expenses for the authorization, sale and issuance of the bonds, expenses for obtaining an economic feasibility survey in connection with the bonds, and to create a reserve for the payment of not exceeding one (1) year's interest on the bonds.
6. Bonds issued pursuant to this chapter executed by officers in office on the date of such execution shall be valid obligations of the authority, notwithstanding that before the delivery of the bonds any or all of the persons executing the bonds shall have ceased to be officers.
7. Bonds issued pursuant to this chapter, and the income from the bonds, shall be exempt from all state, county and municipal taxation, except inheritance, transfer and estate taxes.
8. All public officers and bodies of the state, municipal corporations, political subdivisions, all insurance companies and associations, all savings banks and savings institutions, including savings and loan associations, all executors, administrators, guardians, trustees, and all other fiduciaries in the state may legally invest funds within their control in bonds of an authority.

Acts 1979, ch. 95, § 9; T.C.A., § 6-3758; Acts 1988, ch. 750, § 12.

Cross-References. State and local taxation, title 67.

7-5-110. Employees.

Employees other than independent contractors of the authority shall be considered employees of the creating municipality, and shall enjoy all rights and responsibilities as do other employees of the creating municipality, and shall be considered in classified or unclassified service as are all other employees of the creating municipality.

Acts 1979, ch. 95, § 10; T.C.A., § 6-3759.

7-5-111. Powers of creating municipalities.

Any creating municipality has all of the necessary powers in order to further the purposes of this chapter, including, without limitation, the following, any or all of which powers may be exercised by resolution of its governing body:

1. Advance, donate or lend money, raised from any source and by any means, or real or personal property to the authority;
2. Provide that any funds on hand or to become available to it for port purposes shall be paid directly to the authority;
3. Cause water, sewer, gas, electric or other utility services to be provided to the authority;
4. Open and improve streets, roads and alleys to the port;
5. Provide police and fire protection services to the port; and
6. Pledge the full faith and credit and unlimited taxing power of the municipality as surety for the payment of the authority's bonds in accordance with the procedure for industrial development corporations as set out in §§ 7-53-306 and 7-53-307. None of the foregoing powers may be exercised either directly or indirectly by the municipality to provide real estate that had been condemned by eminent domain subsequent to March 29, 1979, while such real estate was in use as residential dwellings, it being the intent of this chapter that none of the power or authority created in this chapter and vested in either the creating municipality or the authority to be created shall be exercised in such a way that real estate utilized in creating or carrying out the purposes or functions of the authority provided in § 7-5-104 shall have been condemned or acquired by eminent domain after March 29, 1979, while it was in use as residential dwellings.

Acts 1979, ch. 95, § 11; T.C.A., § 6-3760.

7-5-112. Dissolution — Disposition of property.

Whenever the governing body of the creating municipality by resolution determines that the purposes for which the authority was created have been substantially accomplished, that all of the bonds and other obligations of the authority have been fully paid, then the executive officer of the creating municipality shall execute and file for record with the secretary of state a certificate of dissolution reciting such facts and declaring the authority to be dissolved. Upon such filing, the authority shall be dissolved, and title to all funds and other properties of the authority at the time of the dissolution shall vest in and be delivered to the creating municipality.

Acts 1979, ch. 95, § 12; T.C.A., § 6-3761.

7-5-113. Supplemental nature of chapter.

1. The powers conferred by this chapter shall be in addition and supplemental to the powers conferred by any other law, and are not in substitution for such powers, and the limitations imposed by this chapter shall not affect such powers.
2. The powers granted in this chapter may be exercised without regard to requirements, restrictions or procedural provisions contained in any other law or charter, except as expressly provided in this chapter.
3. Any metropolitan government authorized under this chapter to create a metropolitan port authority may do so without the necessity of a charter amendment, notwithstanding anything in its charter to the contrary.

Acts 1979, ch. 95, § 13; T.C.A., § 6-3762.

7-6-101. Short title.

This chapter shall be known and may be cited as the “Metropolitan Celebration Authority Act.”

Acts 1979, ch. 389, § 1; T.C.A., § 6-3764.

7-6-102. Legislative declaration and purpose — Exemption from taxation.

1. It is hereby declared that metropolitan celebration authorities created pursuant to this chapter shall be public and governmental bodies acting as agencies and instrumentalities of the creating municipality, and that the acquisition, construction, operation and financing of improvements by such authorities are hereby declared to be a public and governmental purpose and a matter of public necessity.
2. The property and revenues of the authority or any interests in property and revenues shall be exempt from all state, county and municipal taxation.
3. The authorities shall be created for the purpose of implementing projects to commemorate and celebrate the bicentennial anniversary of the principal city of any county adopting a metropolitan form of government.

Acts 1979, ch. 389, § 2; T.C.A., § 6-3765.

7-6-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Authority” means a metropolitan celebration authority created pursuant to the authority of this chapter;
2. “Board” means the board of commissioners of an authority;
3. “Bonds” includes notes, interim certificates or other obligations of an authority;
4. “Creating municipality” means any county having adopted a metropolitan form of government that creates an authority pursuant to this chapter;
5. “Executive officer” means the mayor, county mayor or other chief executive officer of any creating municipality; and
6. “State” means the state of Tennessee.

Acts 1979, ch. 389, § 3; T.C.A., § 6-3766; Acts 2003, ch. 90, § 2.

Compiler's Notes. Acts 2003, ch. 90, § 2, directed the code commission to change all references from “county executive” to “county mayor” and to include all such changes in supplements and replacement volumes for the Tennessee Code Annotated.

7-6-104. Creation of a metropolitan celebration authority.

1. Any county having a metropolitan form of government may create a metropolitan celebration authority in the manner provided in this section.
2. The governing body of the creating municipality shall adopt, and its executive officer shall approve, a resolution calling for a public hearing on the question of creating a metropolitan celebration authority. Notice of the date, hour, place and purpose of the hearing shall be published at least once each week for two (2) consecutive weeks in a newspaper of general circulation in the creating municipality, the last publication to be at least one (1) week prior to the date set for the hearing.
3. The hearing shall be had before the governing body and all interested persons shall have an opportunity to be heard.
4. After the hearing, if the governing body determines that the public convenience and necessity require the creation of an authority, it shall adopt, and its executive officer shall approve, a resolution so declaring and creating an authority, which resolution shall designate the name and principal office address of the authority. A certified copy of the resolution shall be filed with the secretary of state and with the Tennessee historical commission, along with the resolution approving the appointment of the board as provided for in § 7-6-105, and, upon the adoption and filing, the authority shall constitute a body politic and corporate, with all the powers provided in this chapter.

Acts 1979, ch. 389, § 4; T.C.A., § 6-3767.

7-6-105. Board of commissioners.

1. 1. The authority shall be governed by a board of commissioners composed of eleven (11) members. Three (3) members shall be officers of the state, who shall be appointed by the executive officer of the creating municipality after consultation with the governor, the speaker of the senate and the speaker of the house of representatives. The executive officer of the creating municipality or the executive officer's designee shall be a member. Seven (7) members shall be appointed by the executive officer of the creating municipality subject to confirmation by the governing body of the municipality. The executive officer or the executive officer's designee shall serve during the term of the executive officer. The three (3) members who shall be officers of the state shall serve while holding their respective offices. The seven (7) members appointed by the executive officer subject to confirmation by the governing body shall serve for terms of one (1), two (2), three (3), four (4), five (5), six (6) and seven (7) years, respectively.
   2. Nothwithstanding subdivision (a)(1), any member may be removed at the pleasure of the executive officer.
2. The board shall elect from its members a chair and vice chair, each of whom shall be voting members, and shall adopt bylaws and rules of procedure.
3. A majority of the commissioners shall constitute a quorum for the transaction of business.
4. Except as expressly otherwise specified, all powers granted in this chapter to the authority shall be exercised by the board.
5. Commissioners shall receive no salary, but shall be reimbursed for necessary expenses incurred in the performance of their official duties.

Acts 1979, ch. 389, § 5; T.C.A., § 6-3768.

7-6-106. Officers and employees.

1. The board shall appoint an executive director who shall be the chief executive and administrative officer of the authority, and shall enter into a contract with the executive director establishing the executive director's salary and term of office.
2. The executive director shall appoint, subject to confirmation by the board, the following additional officers: a secretary, an auditor, a legal counsel and a treasurer.
3. All other officers and employees of the authority shall be appointed by the executive director.
4. The executive director shall attend all meetings of the board.

Acts 1979, ch. 389, § 6; T.C.A., § 6-3769.

7-6-107. General powers.

An authority has all of the powers necessary to accomplish the purposes of this chapter, excluding the exercise of the power of eminent domain and the power to levy and collect taxes and special assessments, including, but not limited to, the power to:

1. Have perpetual succession, sue and be sued, and adopt a corporate seal;
2. Acquire real or personal property or any interest in real or personal property by gift, lease, or purchase, for any of the purposes provided in this chapter and sell, lease or otherwise dispose of any such property;
3. Enter into contracts and agreements with any person or entity for any of the purposes provided for in this chapter; and
4. Make application directly to the proper federal, state, county and municipal officials and agencies, or to any other source, public or private, for loans, grants, guarantees or other financial assistance in aid of the purposes provided for in this chapter.

Acts 1979, ch. 389, § 7; T.C.A., § 6-3770.

7-6-108. Bonds.

1. The authority has the power to issue negotiable bonds from time to time in order to accomplish any of the purposes authorized by this chapter, and it also has the power to issue refunding bonds for the purposes, and in the amounts and manner provided in title 9, chapter 21. All the bonds shall be payable solely from all or any part of the revenues, income and charges of the authority and the bonds shall not constitute an obligation of the creating municipality, and the bonds shall so state.
2. The bonds shall be authorized by resolution of the board and shall bear such date, mature at such time or times, bear interest at such rate or rates, payable annually or semiannually, be in such form and denominations, be subject to such terms of redemption with or without premium, carry such registration privileges, be payable in such medium and at such place or places, be executed in such manner, all as may be provided in the resolution authorizing the bonds. The bonds may be sold at public or private sale in such manner and for such amount as the board may determine.
3. The resolution may include any covenants with the bondholders deemed necessary by the board to make the bonds secure and marketable, including, but not limited to, covenants regarding the application of the bond proceeds; the pledging, application and securing of the revenues of the authority; the creation and maintenance of reserves; the investment of funds; the issuance of additional bonds; remedies of bondholders; the vesting in a trustee or trustees such powers and rights as may be necessary to secure the bonds and the revenues and funds from which they are payable; the terms and conditions upon which the bondholders may exercise their rights and remedies; the replacement of lost, destroyed or mutilated bonds; the definition, consequences and remedies of an event of default; the amendment of such resolution; and the appointment of a receiver in the event of default.
4. Any holder of any such bonds, including any trustee for any bondholders, may enforce their rights against the authority, its board or any officer, agent or employee thereof by mandamus, injunction or other action in any court of competent jurisdiction, subject to the covenants included in the bond resolution.
5. All sums received as accrued interest from the sale of any bonds shall be applied to the payment of interest on such bonds. All sums received as principal or premium from the sale shall be applied to the purpose for which the bonds were issued, and may include, but not limited to, expenses for fiscal, legal, engineering and architectural services, expenses for the authorization, sale and issuance of the bonds, expenses for obtaining an economic feasibility survey in connection with the bonds, and to create a reserve for the payment of not exceeding one (1) year's interest on the bonds.
6. Bonds issued pursuant to this chapter executed by officers in office on the date of the execution shall be valid obligations of the authority, notwithstanding that before the delivery of the bonds any and all of the persons executing bonds shall have ceased to be such officers.
7. Bonds issued pursuant to this chapter, and the income from the bonds, shall be exempt from all state, county and municipal taxation except inheritance, transfer and estate taxes.
8. All public officers and bodies of the state, municipal corporations, political subdivisions, all insurance companies and associations, all savings banks and savings institutions, including savings and loan associations, all executors, administrators, guardians, trustees, and all other fiduciaries in the state may legally invest funds within their control in bonds of the authority.

Acts 1979, ch. 389, § 8; T.C.A., § 6-3771; Acts 1988, ch. 750, § 13.

7-6-109. Certain powers of creating municipality.

1. The creating municipality has all of the necessary power in order to further the purposes of this chapter, including, without limitation, any and all of which powers may be exercised by resolution of its governing body, the power to:
   1. Advance, donate or lend money or real or personal property to the authority;
   2. Provide that any funds on hand or to become available to it for celebration purposes shall be paid directly to the authority;
   3. Cause water, sewer, gas, electric or other utility services to be provided to the authority;
   4. Sell, lease, dedicate, donate or otherwise convey to the authority any of its interest in real or personal property, or grant easements, licenses or other rights or privileges therein to the authority; and
   5. Open and improve streets, roads and alleys at the request of the authority.
2. None of the foregoing powers may be exercised either directly or indirectly by the municipality to provide real estate that had been condemned by eminent domain subsequent to May 30, 1979, while such real estate was in use as residential dwellings, it being the intent of this chapter that none of the power or authority created in this chapter and vested in either the creating municipality or the celebration authority to be created shall be exercised in such a way that real estate utilized in creating or carrying out the purposes or functions of the metropolitan celebration authority provided in § 7-6-104 shall have been condemned or acquired by eminent domain after May 30, 1979, while it was in use as residential dwellings.

Acts 1979, ch. 389, § 9; T.C.A., § 6-3772.

7-6-110. Dissolution — Disposition of property.

Whenever the governing body of a creating municipality shall by resolution determine that the purposes for which the authority was created have been substantially accomplished and that all the bonds and other obligations of the authority have been fully paid or secured and payment provided for, then the executive officer of the creating municipality shall execute and file for record with the secretary of state and the Tennessee historical commission a certificate of dissolution reciting such facts and declaring the authority to be dissolved. Upon filing, the authority shall be dissolved, and title to all funds and other properties of the authority, real, personal and mixed, at the time of the dissolution shall vest in and be delivered to such creating municipality.

Acts 1979, ch. 389, § 10; T.C.A., § 6-3773.

7-6-111. Supplemental nature of chapter.

1. The powers conferred by this chapter are in addition and supplemental to the powers conferred by any other law, and are not in substitution for such powers, and the limitations imposed by this chapter shall not affect such powers.
2. The powers granted in this chapter may be exercised without regard to requirements, restrictions or procedural provisions contained in any other law or charter, except as expressly provided for in this chapter.
3. Any county having adopted a metropolitan form of government may create a metropolitan celebration authority as provided in this chapter without the necessity of a charter amendment, notwithstanding anything in its charter to the contrary.

Acts 1979, ch. 389, § 11; T.C.A., § 6-3774.

7-6-112. Construction — Chapter controlling.

This chapter shall be liberally construed to effect the purposes of this chapter, and insofar as this chapter may be inconsistent with any other law, this chapter shall be controlling.

Acts 1979, ch. 389, § 13; T.C.A., § 6-3775.

7-7-101. Short title.

This chapter shall be known and may be cited as the “Metropolitan Hearing Officer Act of 1983.”

Acts 1983, ch. 346, § 1.

7-7-102. Appointment — Salary and benefits.

1. The chief legislative body of any county having a metropolitan form of government is empowered to authorize the chief executive officer of the county to appoint a metropolitan hearing officer who shall serve at the pleasure of the chief executive officer.
2. The metropolitan hearing officer shall receive such salary and other benefits as may be provided by the chief legislative body.

Acts 1983, ch. 346, § 2.

7-7-103. Qualifications.

The qualifications of a metropolitan hearing officer are as follows:

1. A resident of the county, having been a resident for at least three (3) years immediately prior to appointment; and
2. An attorney in good standing and licensed to practice law in the state of Tennessee for at least three (3) years immediately prior to appointment.

Acts 1983, ch. 346, § 3.

7-7-104. Powers and duties.

The powers, duties, obligations and responsibilities of a metropolitan hearing officer are to:

1. Promptly hold a hearing on all matters appealed to appellate boards of the county;
2. Issue subpoenas as requested by either party in such matters;
3. Prepare a complete record of each hearing;
4. Make written recommendations following each hearing; and
5. Furnish each member of the appropriate appellate boards with a copy of the documents required in subdivisions (3) and (4) for their review.

Acts 1983, ch. 346, § 4.

7-7-105. Hearings by administrative law judges in certain counties.

1. In lieu of appointing a hearing officer as authorized in this chapter, any county having a metropolitan form of government and a population of over four hundred fifty thousand (450,000), according to the 1990 census or any subsequent federal census, is empowered to contract with the secretary of state for use of administrative law judges, duly appointed pursuant to § 4-5-102(1), on a case-by-case basis to conduct hearings on any matters appealed to boards and commissions of the county.
2. Any appeal conducted by an administrative law judge under this section shall be conducted substantially in accordance with the contested case provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3. The board or commission that considers such appeals shall promulgate rules that specify the provisions of the Uniform Administrative Procedures Act applicable to such appeals.

Acts 1994, ch. 678, § 1.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

7-8-101. Authorized.

1. Any county having a metropolitan form of government may establish a housing trust fund for the purposes set out in this chapter, to be administered by the housing development agency of such county (herein referred to as “agency”) in accordance with this chapter. The cost of administering this fund shall be borne by the agency out of its administrative budget.
2. The funds provided for by this chapter shall be used to provide low income persons with safe and affordable housing. Funds shall be loaned, or grants made available, from the housing trust fund for programs to include, but not be limited to, the following: bi-weekly mortgages; rehabilitation loans for substantial rehabilitation of existing residential real property; weatherization for existing single family residences, which shall be mandatory after the qualified individual has received assistance three (3) times from a low income energy program in the county; land acquisition in redevelopment areas; interest buy-down to enable a qualified individual to purchase a residence; and homeless shelters.

Acts 1987, ch. 411, § 1.

7-8-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Housing trust fund” means appropriations, reserves or dedications of any funds by the county;
2. “Low income persons” means qualified persons or families who lack the amount of income that is necessary, as determined by the agency, to enable them, without low interest financial assistance, to live in decent, safe and affordable dwellings without overcrowding; and
3. “Substantial rehabilitation” means improvements made to residential real property that exceed thirty-five percent (35%) of the proposed market value of the structure after rehabilitation.

Acts 1987, ch. 411, § 2.

7-8-103. Disposition of funds.

Any loans or grants to applicants by the county, including interest earned on investment of repayments of the loans, shall be used to benefit low income individuals or families residing within the county. All funds received for the purposes provided for in this chapter and all such interest repayments shall be added to the housing trust fund and deposited in an accredited financial institution located within the county to be designated by the county. The funds shall be deposited in a separate account earmarked to be used solely for programs established through and included in the housing trust fund pursuant to this chapter.

Acts 1987, ch. 411, § 3.

7-8-104. Design of program — Rules and regulations.

The agency shall design and tailor the program according to its needs and requirements and shall promulgate necessary rules and regulations to implement the effect and intent of this chapter.

Acts 1987, ch. 411, § 4.

7-8-105. Escrow account — Loan fund endowment — Contributions.

1. Any county having a metropolitan form of government may create a special escrow account earmarked for the sole purpose of generating revenue to provide low income persons, as defined in § 7-8-102, with safe and affordable housing.
2. Notwithstanding any other law to the contrary, the escrow account shall consist of amounts deposited voluntarily, including, but not limited to, funds that are held in escrow and represent earnest money in real estate transactions, mortgage reserve account deposits, and tenant security deposits.
3. Any such county may establish a loan fund endowment in connection with the housing trust fund program, and may charge up to five dollars ($5.00) per month for the term of the loan as a participation fee in lieu of interest on loans made to qualified individuals. All proceeds from a loan fund endowment shall be used to support the housing trust fund and may be used as required under this chapter.
4. The county may make “in-kind” contributions. Such in-kind contributions may include, but not be limited to, land, personnel costs, program support costs, such as accounting, audit, purchasing services, and other costs as established by a cost allocation plan that directly supports program operations.

Acts 1987, ch. 411, § 5.

7-8-106. Use of homebuyers' revolving loan fund pool funds.

The county may utilize any funds authorized by title 13, chapter 23, part 3, as provided by § 13-23-303(b) for any and all authorized purposes in the housing trust fund.

Acts 1987, ch. 411, § 6.

Part 1
General Provisions

7-31-101. Duty to maintain roads.

1. It is the duty of all incorporated municipalities, when a public highway passes through the corporation, or to any public place within the incorporated municipality, to keep the road in good repair. Nothing in this subsection (a) shall be construed to apply to any railroads or their rights-of-way.
2. It is the duty of the grand jury to make presentments as for misdemeanor against the mayor and governing body of any incorporated municipality that violate this section.

Acts 1859-1860, ch. 72, §§ 1, 2; Shan., §§ 1989, 1990; mod. Code 1932, §§ 3405, 3406; T.C.A. (orig. ed.), § 6-1001.

Cross-References. Bonds for improvements based on assessed values of benefited properties, title 7, ch. 33, part 3.

Bridges erected by county over river through county seat towns, § 54-11-220.

Highways, state funds for local aid, title 54, ch. 4, part 2.

Obstructing highway or other passageway, § 39-17-307.

Penalty for misdemeanor, §§ 39-11-114, 40-35-111.

Throwing glass or other dangerous substance on or near public highway, penalty, § 39-14-502.

Attorney General Opinions. Cities and counties lack statutory authority to regulate mortgage transactions, OAG 03-016, 2003 Tenn. AG LEXIS 19 (2/11/03).

Collateral References.

Constitutionality of statutory provisions as to political corporations or divisions that shall bear cost of establishing or maintaining highway. 2 A.L.R. 746, 123 A.L.R. 1462.

7-31-102. Duty to keep board functioning.

It is the duty of all incorporated municipalities to keep an organized governing board functioning, and if any incorporated municipalities fail so to do for six (6) consecutive months, the residents of the municipality shall be subject to work on the public roads for the space of twelve (12) months thereafter, and until a board is elected, organized and functioning.

Acts 1859-1860, ch. 72, § 3; Shan., § 1991; mod. Code 1932, § 3407; T.C.A. (orig. ed.), § 6-1002.

Law Reviews.

Easements in Tennessee, 24 Tenn. L. Rev. 219 (1956).

7-31-103. Notice of tort action based on condition of streets.

No suit shall be brought against any municipal corporation on account of injuries received by person or property on account of the negligent condition of any street, alley, sidewalk, or highway of the municipal corporation, unless within one hundred twenty (120) days after an injury to the person or property has been inflicted, a written notice shall be served upon the mayor or manager of the municipality, stating the time and place where the injury was received and the general nature of injury inflicted. The failure to give the notice prescribed in this section, within the time set out, shall be a valid defense against any liability of the municipality that might otherwise exist on account of the defective or negligent condition of the street, alley, sidewalk, or highway; provided, that proof of registered letter by registry receipt addressed to the mayor or manager setting forth the injury and place of injury complained of shall be a complete compliance with this section.

Acts 1913, ch. 55, § 1; Shan., § 4469a1; mod. Code 1932, § 8596; T.C.A. (orig. ed.), § 6-1003; Acts 1982, ch. 627, § 1.

Cross-References. Certified mail in lieu of registered mail, § 1-3-111.

Textbooks. Tennessee Jurisprudence, 6 Tenn. Juris., Constitutional Law, § 66; 19 Tenn. Juris., Municipal Corporations, § 99; 23 Tenn. Juris., Streets and Highways, § 35.

Law Reviews.

Sovereign Immunity and The Tennessee Governmental Tort Liability Act (John C. Cook), 41 Tenn. L. Rev. 885 (1974).

7-31-104. Establishment of streets in extension.

When the limits of an incorporated municipality are enlarged by law, the mayor and board may establish such new streets, alleys, or parks as are deemed necessary by reason of the enlargement. When the improvement is made for its public utility, it shall be done at the expense of the corporation; but should improvement be done for individual convenience, the applicants shall pay the expenses.

Code 1858, §§ 1386, 1387; Shan., §§ 1979, 1980; mod. Code 1932, §§ 3394, 3395; T.C.A. (orig. ed.), § 6-1004.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, § 28.

7-31-105. Construction of sidewalks authorized.

It is lawful for any person owning town lots, or lands adjoining the public highways or streets in any village or unincorporated town in the state, to construct suitable sidewalks on those highways or streets along the line of the lots or lands.

Acts 1897, ch. 99, § 1; Shan., § 1679a1; Code 1932, § 2807; T.C.A. (orig. ed.), § 6-1005.

Cross-References. Ramps at crosswalks required, § 7-31-114.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, § 28.

7-31-106. Unlawful use of sidewalks.

When any sidewalks are constructed, every person who rides or drives a horse, team or other vehicle on the sidewalks, except for the purpose of crossing the sidewalks when necessary to do so, or who hitches any horse or other animal to any tree growing on or adjacent to such sidewalks, commits a Class C misdemeanor.

Acts 1897, ch. 99, § 2; 1899, ch. 193, § 1; Shan., § 1679a2; Code 1932, § 2808; T.C.A. (orig. ed.), § 6-1006; Acts 1989, ch. 591, § 113.

Cross-References. Obstructing highway or other passageway, penalty, § 39-17-307.

Penalty for Class C misdemeanor, § 40-35-111.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, § 28.

7-31-107. Condemnation for streets.

Wherever any municipal corporation shall seek to condemn lands to be used in establishing, widening, extending, or otherwise improving its public streets, alleys, highways, parks, parkways, or boulevards, it shall have full power to condemn the fee of the land necessary to be taken, by paying the fair cash market value of the land to be fixed in the manner provided by law where private property is taken for public use.

Acts 1923, ch. 76, § 1; Shan. Supp., § 1981a1; Code 1932, § 3398; T.C.A. (orig. ed.), § 6-1007.

Cross-References. Acquisition of right-of-way, lands or easements for road purposes, title 29, ch. 17, part 8.

Condemnation by city manager-commission charter city, § 6-19-101.

Condemnation for school purposes, § 49-6-2002.

Rights and powers of section conferred upon all municipal corporations, § 7-35-102.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, § 28.

Law Reviews.

Easements in Tennessee, 24 Tenn. L. Rev. 219 (1956).

7-31-108. Assessment of damages by freeholders.

When the owner of the land through which any street, alley, or park is to be extended or established requires compensation or damages for the extension or establishment, the legislative body of such municipality shall, by ordinance or resolution, appoint freeholders, not exceeding seven (7) in number, who after first being duly sworn, shall examine the premises and assess the damages or compensation, and report the damages or compensation to the mayor and aldermen or the legislative body of the municipality, which body shall cause the report to be spread upon its minutes with its action on the assessment.

Code 1858, § 1388; Shan., § 1981; Acts 1925, ch. 31, § 1; mod. Code 1932, § 3397; T.C.A. (orig. ed.), § 6-1008.

Cross-References. Rights and powers of section conferred upon all municipal corporations, § 7-35-102.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, § 63.

Law Reviews.

Real Property — 1954 Tennessee Survey, 7 Vand. L. Rev. 921 (1954).

7-31-109. Opening of street on payment of damages.

Upon payment of the compensation or damages that have been assessed by the condemnation commission and approved by the municipal legislative body, into the office of the recorder or city clerk, for the benefit, or to the account and subject to the order of the owner of the land condemned, the administrative officer or officers of the municipality may order the owner of the land condemned to open the public streets, alleys, highways, parks, parkways, or boulevards, and give the municipality possession of the public streets, alleys, highways, parks, parkways, or boulevards, and fifteen (15) days after the date of the order such municipality may open and take possession of the public streets, alleys, highways, parks, parkways, or boulevards.

Code 1858, § 1389; Shan., § 1982; Acts 1925, ch. 31, § 1; Code 1932, § 3399; T.C.A. (orig. ed.), § 6-1009.

Cross-References. Rights and powers of section conferred upon all municipal corporations, § 7-35-102.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, §§ 28, 30; 23 Tenn. Juris., Streets and Highways, § 56.

7-31-110. Failure to open street on condemnation.

If any owner of land condemned refuses or fails to give possession of land to the municipality or to open the public streets, alleys, highways, parks, parkways, or boulevards, so condemned within fifteen (15) days after the order of the administrative officer or officers of such municipality, then such owner may be fined not less than five dollars ($5.00) nor more than fifty dollars ($50.00) for such failure and refusal, and each and every day of such failure and refusal is deemed a separate offense. If the owner of land condemned contests the right or legality of the condemnation, then the obligation to surrender possession to the municipality and the liability for the fine for failing so to do shall not obtain until the question of the right or legality of the condemnation shall be finally determined. Any municipal court shall have jurisdiction over such offenses. This remedy is not exclusive, but is in addition to the right of the municipality to take possession as owner of the condemned land and to open the public streets, alleys, highways, parks, parkways, or boulevards.

Code 1858, § 1390; Shan., § 1983; Acts 1925, ch. 31, § 1; mod. Code 1932, § 3400; T.C.A. (orig. ed.), § 6-1010.

Cross-References. Rights and powers of section conferred upon all municipal corporations, § 7-35-102.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, §§ 28, 59, 61.

7-31-111. Appeal from order opening street.

Any owner aggrieved by the opening of the public streets, alleys, highways, parks, parkways, or boulevards may appeal to the circuit court within twenty (20) days after the administrative officer or officers of the municipality have ordered the public streets, alleys, highways, parks, parkways, or boulevards to be opened and possession delivered; provided, that any such appeal shall not operate to prevent the municipality from taking possession of the land condemned, nor stay the opening or extension of any such street, alley or other improvement.

Code 1858, § 1391; Shan., § 1984; Acts 1925, ch. 31, § 1; mod. Code 1932, § 3401; T.C.A. (orig. ed.), § 6-1011.

Cross-References. Rights and powers of section conferred upon all municipal corporations, § 7-35-102.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, §§ 59, 61.

Law Reviews.

The Tennessee Court System — Circuit Court (Frederic S. LeClercq), 8 Mem. St. U.L. Rev. 241 (1978).

7-31-112. Damage from change of grade or repair.

When any owner of real estate in any municipality sustains any damage to the owner's property by reason of any change made in the natural or established grade of any highway, street or alley, or by reason of the raising or lowering of the grades, or other acts done for the purpose of improving or repairing any highway, street or alley, the owner shall be paid all damages for the damage by such municipality, which damages may be recovered by suit brought at any time within one (1) year from the completion of or the cessation of such works, acts, or improvements; but all benefits accruing by reason of such improvements, acts, or works shall be allowed to affect, reduce, and offset the damages provided for in this section.

Acts 1891, ch. 31, §§ 1, 2; 1893, ch. 41, §§ 1, 2; Shan., § 1988; mod. Code 1932, § 3404; T.C.A. (orig. ed.), § 6-1012.

Textbooks. Tennessee Jurisprudence, 10 Tenn. Juris., Eminent Domain, §§ 63, 64; 18 Tenn. Juris., Limitations of Actions, § 17; 20 Tenn. Juris., Nuisances, § 33; 23 Tenn. Juris., Streets and Highways, § 20.

Law Reviews.

Sovereign Immunity and The Tennessee Governmental Tort Liability Act (John C. Cook), 41 Tenn. L. Rev. 885 (1974).

7-31-113. Maintenance guaranties in paving contracts.

1. Municipalities have the power to provide in any contract made by them for paving any street, highway, alley, park, or public square, that the contractor shall guarantee to maintain and repair the street, highway, alley, park, or public square, for such time as the governing body or board of the municipality shall deem proper, the expense of which shall be included in the assessment for the construction, and no special or improvement assessment shall be affected or invalidated on account of the guaranty.
2. The municipalities have the authority to provide the manner and time of payment for the guaranty of maintenance or repairs.

Acts 1919, ch. 121, § 1; Shan. Supp., § 1980a1; mod. Code 1932, § 3396; T.C.A. (orig. ed.), § 6-1013.

7-31-114. Installation of ramps at crosswalks.

1. Every incorporated city and town shall install ramps at crosswalks, in both business and residential areas, when making new installations of sidewalks, curbs or gutters, or improving or replacing existing sidewalks, curbs or gutters, so as to make the transition from street to sidewalk easily negotiable for persons with disabilities in wheelchairs and for other persons who may have difficulty in making the required step up or down from curb level to street level.
2. “Ramps,” as used in this section, means a sloping asphalt or concrete surface, from the level of the sidewalk or curb to the level of the street at curbside, extending outward and downward from the curb to the street for such a distance, at such an angle, and at such a width as will facilitate the movement up and down such ramps of persons in wheelchairs or persons who have difficulty in stepping up or down between curb level and street level.
3. All such ramps shall be constructed or installed in accordance with design specifications for the ramps prepared by the department of transportation. The department shall make available to such municipalities design standards for such ramps.

Acts 1974, ch. 544, §§ 1, 2; T.C.A., § 6-1014; Acts 2011, ch. 47, § 4.

Compiler's Notes. Acts 2011, ch. 47, § 107 provided that nothing in the legislation shall be construed to alter or otherwise affect the eligibility for services or the rights or responsibilities of individuals covered by the provision on the day before the date of enactment of this legislation, which was July 1, 2011.

Acts 2011, ch. 47, § 108 provided that the provisions of the act are declared to be remedial in nature and all provisions of the act shall be liberally construed to effectuate its purposes.

7-32-101. Chapter definitions — Powers of municipalities.

1. As used in this chapter, unless the context otherwise requires:
   1. “Assessed value basis” means the apportionment of the applicable cost according to the ratio that the assessed value of the individual parcels of property bears to the total assessed value of all such properties at such time as is determined by the legislative body;
   2. “Benefits received basis” means the apportionment of the applicable costs according to an equitable determination by the legislative body of the municipality of the special benefit received by the individual parcel of property from the public facility, taking into account any of the following factors: square footage of parcels or anticipated improvements, or both, front footage, assessed value, type of use, business classification, property location, zones of benefit or a combination of such factors;
   3. “City clerk” or comparable official includes the clerk or other officer who maintains the records of a municipality;
   4. “Fair basis” means assessed value basis, square foot basis, or benefits received basis;
   5. “Public facility” means roads, streets, sidewalks, utilities, including electrical, gas, water and wastewater improvements, related improvements, parking facilities, parks and greenways and any improvements for public safety, including police and fire stations;
   6. “Mayor” of a municipality in this chapter includes the chief executive officer of any municipality;
   7. “Municipality” or “city” means any town, city, metropolitan government or county;
   8. “Square foot basis” means the apportionment of the applicable costs according to the ratio that the square footage of the individual parcels of property or the buildings expected to be constructed on the property bears to the square footage of all the property or the buildings expected to be constructed on the property; and
   9. “Treasurer” includes the finance director or other chief financial officer of the municipality.
2. The municipalities whose charters do not contain specific provisions to the contrary, or otherwise, have the power to design, or cause to be designed, contract for, and execute, or cause to be executed, the construction and improvement or the reconstruction or reimprovement of any street, avenue, alley, highway, or other public place, by opening, extending, widening, grading, paving, macadamizing, curbing, guttering, draining, or otherwise improving any street, avenue, alley, highway, or other public place, in such manner and with such materials and with such culverts and drains as the legislative body of such municipality may prescribe, and to cause not less than two thirds (2/3) of the cost or expense of the work and improvements mentioned in this subsection (b) to be assessed against the property abutting or adjacent to the street, avenue, alley, or any other public place so improved.
3. The municipalities described in subsection (b) shall also have the power to design, or cause to be designed, contract for, execute, or cause to be executed, improvements or alterations for flood control, water management, soil erosion, and disaster relief and to cause not less than two thirds (2/3) of the cost or expense of the work and improvements mentioned in this subsection (c) not paid by federal funds to be assessed against property within the flood plain in which the improvements or alterations are made.
4. 1. Notwithstanding any local charter provision or other law to the contrary, the legislative body of any municipality may approve the transfer to the municipality of a public facility or property to be improved as a public facility that has been acquired, improved or constructed by a third party, including a private entity, or enter into an agreement with a private entity under which the private entity agrees to pay all or a portion of the costs of a public facility being constructed by the municipality; provided, that, in either case, the municipality reasonably anticipates that private investment of not less than twenty-five million dollars ($25,000,000) will be made on property benefitted by the public facility.
   2. 1. The transfer of any public facility or agreement for a third party to pay costs relating to a public facility shall be documented by written agreement between the municipality and the other party or parties thereto, and the agreement shall be approved in substantially final form by the legislative body of the municipality. The agreement may provide that payment of any amounts under the agreement by the municipality may be contingent upon the availability of funds from the proceeds of bonds issued pursuant to § 7-33-121, and the agreement may also provide that the obligation of a private entity to pay a portion of the cost of a public facility may be reduced to the extent proceeds of bonds issued pursuant to § 7-33-121 are available for such purpose. The mayor of the municipality shall submit the proposed form of the agreement to the legislative body for approval. As a condition to entering into an agreement, the legislative body shall determine that the municipality and the citizens of the municipality will receive a public benefit from entering into the agreement. Before approving any such agreement and the assessment of any portion of any costs to be incurred under the agreement pursuant to § 7-32-115, the legislative body of the municipality shall hold a public hearing relating to the proposed agreement and assessment.
      2. Notice of the public hearing shall be published by the mayor of the municipality in a newspaper of general circulation in the municipality at least two (2) weeks prior to the date of the public hearing. The notice shall include the time, place and purpose of the public hearing and notice of how the proposed form of the agreement and a map of the area that is proposed to be subject to assessment pursuant to § 7-32-115 can be viewed by the public and the date the documents will be available for review, which shall be no later than one (1) week prior to the date of the hearing. Additionally, the notice shall be mailed by the mayor of the municipality or the mayor's designee via certified mail to each owner of property proposed to be subject to assessment at the address of the owner on the records of the assessor of property of the county in which the property is located. The notice may be combined with the notice of assessment required by § 7-32-115(b).
   3. The municipality may pay consideration for any transfer of a public facility pursuant to this subsection (d). The amount of the consideration and the terms of payment for the consideration shall be set forth in the agreement described in subdivision (d)(2); however, the consideration may not exceed the cost documented by the transferring party of acquiring, improving or constructing the public facility, including any costs incurred in the acquisition of the land on which the public facility is or will be located; provided, however, that the municipality may pay the appraised value for the acquisition of real property to be used in connection with public facilities to be constructed or improved by the municipality or other governmental entity. The consideration shall be payable in the manner agreed upon between the municipality and the transferor or transferors of the public facilities and may be payable in the installments and at the times agreed upon by the municipality and the transferor or transferors. Additionally, a municipality may agree as additional consideration for the transfer of a public facility to reimburse the transferor or transferors or a public facility for expenditures made by the transferor or transferors to improve existing public facilities in order to facilitate the construction of the public facility being sold or to connect the public facility being sold to existing public facilities; however, the amount of the reimbursement may not exceed the actual documented cost of the expenditures.
   4. Notwithstanding any other provision to the contrary, §§ 7-32-102 — 7-32-114 shall not apply to the acquisition, improvement or construction of any public facilities pursuant to this subsection (d) or § 7-32-115(b) or any assessments relating to the acquisition, improvement or construction.
   5. The authority granted to municipalities by this subsection (d) shall not be construed to limit in any manner the authority of any municipality to acquire a public facility or any other property or enter into any agreement with another party in accordance with other law or any local charter.
   6. Any action taken by the legislative body under this chapter relating to any agreement entered into pursuant to this subsection (d) or any assessments under § 7-32-115 or any matters relating thereto may be by resolution, adopted at a meeting, regular or special, of the legislative body at which the resolution is introduced and shall take effect immediately upon adoption. Except as specifically provided in this subsection (d), the resolution need not be published or posted or be subject to veto by the municipality's mayor, nor shall the resolution require for its passage more than a majority vote of all members of the legislative body then in office. Any property that is subject to assessment pursuant to § 7-32-115 shall be specifically identified in the resolution that is adopted approving any such assessment. In approving the property that is to be subject to assessment, the legislative body may remove, but not add, any properties to those identified in the map of the properties that are subject to public view prior to the public hearing required as described in subdivision (d)(2).

Acts 1913 (1st Ex. Sess.), ch. 18, § 1; Shan., § 1991a1; mod. Code 1932, § 3408; T.C.A. (orig. ed.), § 6-1101; Acts 2001, ch. 267, § 1; 2007, ch. 493, § 1; 2008, ch. 971, § 1; 2009, ch. 489, §§ 1, 2.

Compiler's Notes. Acts 2008, ch. 971, § 1 provided that the code commission is directed to change all references to “tax assessor”, wherever such references appear, to “assessor of property”, as such sections are amended or volumes are replaced. See § 1-1-116.

Acts 2009, ch. 489, § 9 provided that the act, which amended §§ 7-32-101, 7-32-115, 7-32-129, 7-32-133, 7-32-138 and 7-33-121, shall apply to all agreements and assessments entered into or imposed pursuant to § 7-32-101(d) and § 7-32-115(b) on or after July 1, 2007.

Cross-References. Bonds for improvements based on assessed values of benefited properties, §§ 7-33-301 — 7-33-305.

Improvements by city manager-commission charter city, § 6-19-101.

Flood control authorities, title 64, ch. 3.

Textbooks. Tennessee Jurisprudence, 22 Tenn. Juris., Special Assessments, §§ 3, 7.

Law Reviews.

Impact Fees in Tennessee, a Public and Private Partnership (Andrea C. Barach, Jane Pine Wood), 18 Mem. St. U.L. Rev. 685 (1988).

7-32-102. Ordinance for improvement.

When the legislative body of any municipality shall determine to construct any improvement authorized by § 7-32-101, it shall adopt an ordinance that such improvement or improvements shall be made, which ordinance shall describe the nature and extent of the work, the character of materials to be used, the location and the terminal points of the proposed improvements, and the flood plain, streets, alleys, highways, or other public places, or part or parts thereof, on which such improvements are to be made, and which shall direct that full details, drawings, plans, specifications, and surveys of the work and estimates be prepared by the city engineer, or such other person as may be designated in the ordinance; or the legislative body may adopt plans for such work already prepared.

Acts 1913 (1st Ex. Sess.), ch. 18, § 2; Shan., § 1991a2; mod. Code 1932, § 3409; T.C.A. (orig. ed.), § 6-1102; Acts 2001, ch. 267, § 2.

7-32-103. Filing of documents.

Details, drawings, plans, specifications, and estimates shall, when completed, be placed on file in the office of the city engineer, or other official designated in the ordinance, where the property owners who may be affected by such improvement may see and examine the details, drawings, plans, specifications, and estimates.

Acts 1913 (1st Ex. Sess.), ch. 18, § 2; Shan., § 1991a3; Code 1932, § 3410; T.C.A. (orig. ed.), § 6-1103.

7-32-104. Appointment of time to hear objections.

The ordinance shall appoint a time when the legislative body of the municipality shall meet, which shall not be less than two (2) weeks after the date of the first publication of notice of the ordinance, to hear any objections or remonstrances that may be made to the improvement, the manner of making objections, or the character of material to be used.

Acts 1913 (1st Ex. Sess.), ch. 18, § 2; Shan., § 1991a4; Code 1932, § 3411; T.C.A. (orig. ed.), § 6-1104.

7-32-105. Notice of ordinance and hearing of objections.

Notice of the adoption of an ordinance shall be given by publishing a notice once a week for two (2) consecutive weeks in some newspaper of general circulation in the municipality. It shall not be necessary to set out in full in the notice the ordinance, but the notice shall state the character of the improvement or improvements, the location and terminal points of the improvements, and also the time and place, not less than two (2) weeks from the date of first publication of the notice, at which the legislative body of the municipality shall meet to hear remonstrances or protests against the making of the improvement or improvements.

Acts 1913 (1st Ex. Sess.), ch. 18, § 2; Shan., §§ 1991a5, 1991a6; Acts 1921 Private, ch. 526, § 1; mod. Code 1932, §§ 3412, 3413; T.C.A. (orig. ed.), § 6-1105.

Collateral References.

“Owner,” scope and import of term in statutes as to giving notice of making of local improvements. 2 A.L.R. 790, 95 A.L.R. 1085.

7-32-106. Hearing of objections — Final action on ordinance.

At the time and place appointed, pursuant to § 7-32-105, the legislative body shall meet, and at the meeting, or at the time and place to which the meeting may be adjourned from time to time, all persons whose property may be affected by the improvement or improvements may appear in person or by attorney or by petition and protest against the making of such improvement or improvements, the material to be used, and the manner of making improvement or improvements; and the legislative body shall consider such objections and protests, if any, and may confirm, amend, modify, or rescind the original ordinance. Failure to object or protest at the time of confirmation of the original ordinance shall constitute a waiver of any and all irregularities, omissions, and defects in the proceedings taken prior to such a time.

Acts 1913 (1st Ex. Sess.), ch. 18, § 2; Shan., §§ 1991a7, 1991a8; Code 1932, §§ 3414, 3415; T.C.A. (orig. ed.), § 6-1106.

Cross-References. Waiver of objection to assessment, § 7-32-124.

7-32-107. Undertaking work — Construction contract.

Upon the confirmation of the ordinance, it shall be the duty of the legislative body to proceed to construct the improvements thus authorized, which may be done by contract with the lowest and best responsible bidder, in accordance with the charter of such city or town, or it may be done by the municipality, as it may elect.

Acts 1913 (1st Ex. Sess.), ch. 18, § 3; Shan., § 1991a9; Code 1932, § 3416; T.C.A. (orig. ed.), § 6-1107.

7-32-108. Security required of bidders.

In case the work is let to the lowest and best responsible bidder, all bids submitted for the construction of an improvement shall be accompanied by a certified check or a suitable bond, with at least two (2) good and solvent sureties, who are citizens or residents of the city or town where the improvement is to be done; or in lieu of personal sureties, the bond of some surety company authorized to do business in this state may be given in a penal sum of at least ten percent (10%) of the entire cost of the work to be done or improvements to be made, computed on the basis of the bid submitted, and conditioned that the contractors named in the bid shall, in case the work is awarded to them, enter into a contract with the city or town within the time required and for the price named in their respective bids, and in accordance with the plans and specifications of the municipality and the ordinance providing for the improvement.

Acts 1913 (1st Ex. Sess.), ch. 18, § 3; Shan., § 1991a10; Code 1932, § 3417; T.C.A. (orig. ed.), § 6-1108.

7-32-109. Rejection of bids — Rebidding.

The legislative body has the power to reject any and all bids and to order new bids.

Acts 1913 (1st Ex. Sess.), ch. 18, § 3; Shan., § 1991a11; Code 1932, § 3418; T.C.A. (orig. ed.), § 6-1109.

7-32-110. Contractor's performance bond.

The successful bidder shall execute a bond to the city or town, in an amount equal to fifty percent (50%) of the entire contract price of the improvement, conditioned that the party shall well and truly perform all of the terms and conditions of the contract, in a good and workmanlike manner, and in accordance with the plans and specifications, which shall form part of the contract, and shall indemnify and hold the city harmless from all losses, costs, and expenses that it may sustain by reason of any negligence or default of such contractor.

Acts 1913 (1st Ex. Sess.), ch. 18, § 3; Shan., § 1991a12; mod. Code 1932, § 3419; T.C.A. (orig. ed.), § 6-1110.

7-32-111. Costs borne by railway.

Should there be a street, electric, interurban or steam railroad track or tracks on any street, alley, avenue, or highway improved under this chapter, the cost of such improvement between the rails and the spaces between such tracks and eighteen inches (18") beyond the outer rail, including switches and turnouts, shall be paid by the owners of such railroad, and shall be assessed and collected from such owner, and shall be a lien upon the railroad and the property used in connection with the railroad and the property; provided, that where any such railroad shall occupy any street, alley, or highway under ordinance or contract with the municipality, it shall pay or improve according to such ordinance or contract, as is provided in § 7-32-113.

Acts 1913 (1st Ex. Sess.), ch. 18, § 14; Shan., § 1991a62; mod. Code 1932, § 3469; T.C.A. (orig. ed.), § 6-1111.

Collateral References.

Liability of street railway that paves or is liable for paving occupied portion of street to assessment for improvement of remainder. 29 A.L.R. 679.

Parkway occupied by street railway company as assessable for street improvements. 10 A.L.R. 164.

7-32-112. Replacement of railway rails.

When any of the improvements authorized by this chapter have been directed to be done by ordinance, as provided in this chapter, the legislative body of such city has the power to require any street or other railroad company to replace the rails that such company may have in such streets with other rails of a kind to be specified by the legislative body, when, in the judgment of the legislative body, the rails ordered to be removed are not suitable to be used with paving that is about to be put down by the body. Should the company refuse to comply with the requirements of the notice, the legislative body has the right, and it shall be its duty, to institute suitable legal proceedings against the company to compel and require the company to lay and replace the rails as are thus specified; and if successful in such legal proceedings, the city shall be entitled to recover from such company any and all costs, expenses, and losses incurred by it because of such refusal and failure of such company to comply with such order.

Acts 1913 (1st Ex. Sess.), ch. 18, § 20; Shan., § 1991a68; mod. Code 1932, § 3475; T.C.A. (orig. ed.), § 6-1112.

7-32-113. Ascertainment of railway's intent.

When any street, highway, avenue, or alley to be improved has located in the street, highway, avenue, or alley the track or tracks of any street railway, interurban railway, or commercial railway company that has agreed to pave any portion of the street, highway, avenue, or alley, and by the terms of its agreement has the option of either doing the work of paving in accordance with the plans and specifications prepared by such city, or of permitting the city or town to do the work at a price to be paid to the city or town by the company, it is the duty of the legislative body, before enacting the ordinance or ordinances providing for the improvement, to ascertain whether the company desires to do its portion of the paving itself or that the same be done by the municipality.

Acts 1913 (1st Ex. Sess.), ch. 18, § 5; Shan., § 1991a17; mod. Code 1932, § 3424; T.C.A. (orig. ed.), § 6-1113.

7-32-114. Deduction of cost payable by railway.

If the company elects to have its portion of the paving done by the municipality, then, and before proceeding to apportion the cost of the improvement upon any lots or parcels of ground abutting on or adjacent to the highway, the board shall first deduct from the total of the improvement the amount that should be paid by such company; and after deducting the amount that is to be paid by such street or other railway company, the legislative body shall proceed to apportion two thirds (2/3) of the balance of the cost of such improvement upon the land abutting on and adjacent to such street, highway, avenue, or alley, as provided in this chapter.

Acts 1913 (1st Ex. Sess.), ch. 18, § 5; Shan., § 1991a18; Code 1932, § 3425; T.C.A. (orig. ed.), § 6-1114.

7-32-115. Apportionment by frontage among property owners.

1. After the completion of the work or improvement, it shall be the duty of the legislative body, in conformity with the requirements of the ordinance, to apportion at least two thirds (2/3) of the cost of such improvement not paid by federal funds upon the land within the flood plain or abutting on or adjacent to the street, highway, avenue, alley, or other public place, which apportionment shall be made against the land, and the several lots or parcels of the land, according to the frontage of the lots or parcels on the street, highway, avenue, or alley.
2. 1. If a municipality enters into an agreement pursuant to § 7-32-101(d), the legislative body of the municipality may apportion the costs incurred by the municipality under the agreement and all other costs authorized by this subsection (b) among each parcel of property that is determined by the legislative body to directly benefit from the public facilities that are the subject of the agreement on a fair basis, as defined in § 7-32-101, and shall levy an assessment on each parcel of property of the amount so apportioned.
   2. In addition to amounts authorized to be apportioned and assessed pursuant to subdivision (b)(1), the municipality may also apportion and assess the following costs in connection with the assessment:
      1. Costs incurred by the municipality or other public entity at the request of the other party to the agreement entered into pursuant to § 7-32-101(d) to pay costs of public facilities that will benefit the property subject to assessment;
      2. All costs relating to the issuance of bonds or other obligations pursuant to § 7-33-121 including interest expense and such amounts as the municipality deems necessary to pay capitalized interest on the bonds to the extent permitted by applicable law and to fund reserve funds to secure the payment of the bonds or other obligations; and
      3. All other fiscal, legal and administrative expenses of the municipality relating to the agreement entered into pursuant to § 7-32-101(d), any assessment under this chapter or any related financing. A municipality's determination that public facilities benefit the property subject to assessment under this chapter shall be conclusive.
   3. If a municipality levies assessments with respect to parcels of properties pursuant to this subsection (b), the municipality shall also be authorized to levy an annual assessment as to those parcels, without any further authorization from the governing body of the municipality, in the same proportion as the assessments are levied pursuant to subdivision (b)(1) to pay the costs reasonably estimated by the municipality to be incurred in connection with the administration and collection of the assessments.
   4. The legislative body of the municipality is authorized to adopt such policies and procedures as the legislative body deems appropriate to administer assessments imposed under this subsection (b), including, but not limited to, policies relating to the rate and methodology governing the implementation of the assessment. The policies and procedures may also address such matters as the reapportionment of assessments upon the request of property owners, reallocation of assessments upon subdivision of property, credits against assessment payments based upon other available funds, including earnings on reserve funds, maintenance of an assessment roll and procedures for the prepayment of assessments.
   5. A municipality may levy a maximum assessment under this subsection (b) based upon the estimated cost of the public facilities and other permitted costs being assessed, and, in such case, the amount of the assessment shall be reduced by the municipality once the actual costs are established by the municipality and may provide that assessments may become effective at different periods of time to take into account when the costs being assessed will be incurred. The legislative body of the municipality may also provide that assessments shall only be effective upon any issuance of bonds or other obligations pursuant to § 7-33-121.
   6. 1. Each person owning property affected by the levy of an assessment shall receive written notice of:
         1. The method of apportionment of the assessment; and
         2. The amount of the assessment allocated to the owner's parcel.
      2. The notice shall be delivered by certified mail to the address listed on the records of the assessor of property of the county in which the property is located.
   7. For purposes of apportioning and assessing costs pursuant to this subsection (b), §§ 7-32-116 — 7-32-118 and § 7-32-121(c) shall not be applicable.

Acts 1913 (1st Ex. Sess.), ch. 18, § 4; Shan., § 1991a13; Code 1932, § 3420; T.C.A. (orig. ed.), § 6-1115; Acts 2001, ch. 267, § 3; 2007, ch. 493, § 2; 2008, ch. 971, § 1; 2009, ch. 489, § 3.

Compiler's Notes. Acts 2008, ch. 971, § 1 provided that the code commission is directed to change all references to “tax assessor”, wherever such references appear, to “assessor of property”, as such sections are amended or volumes are replaced. See § 1-1-116.

Acts 2009, ch. 489, § 9 provided that the act, which amended §§ 7-32-101, 7-32-115, 7-32-129, 7-32-133, 7-32-138 and 7-33-121, shall apply to all agreements and assessments entered into or imposed pursuant to § 7-32-101(d) and § 7-32-115(b) on or after July 1, 2007.

Textbooks. Tennessee Jurisprudence, 22 Tenn. Juris., Special Assessments, § 8.

Collateral References.

Eminent domain: consideration of fact that landowner's remaining land will be subject to special assessment in fixing severance damages. 59 A.L.R.3d 534.

Widening of city street as local improvement justifying special assessment of adjacent property. 46 A.L.R.3d 127.

7-32-116. Limitation on aggregate amount of assessment.

1. The aggregate amount of the levy or assessment made against any lot or parcel of land shall not exceed one half (½) of the cash value of the lot and improvements on the lot.
2. By cash value, it is the intent of this section to mean the fair sale price of the lot and improvements on the lot if sold at a voluntary sale.
3. The city or town shall pay any part of the levy or assessment against any such lot or parcel of land as may be in excess of one half (½) of the cash value of the lot or parcel of land.

Acts 1913 (1st Ex. Sess.), ch. 18, § 4; Shan., § 1991a14; Code 1932, § 3421; Acts 1951, ch. 94, § 1; T.C.A. (orig. ed.), § 6-1116.

Textbooks. Tennessee Jurisprudence, 22 Tenn. Juris., Special Assessments, § 8.

7-32-117. Apportionment of cost of intersection improvements.

Where intersections of any street, avenue, or other highway are improved, the municipality shall pay one third (1/3) of the cost of the improvement, and the balance shall be assessed against the property of the street improved and the intersecting street or streets for one half (½) a block in all directions according to the frontage of the property; provided, that the cost to be assessed against railways having tracks within such intersections shall be deducted from the cost of such intersections to be paid by the municipality and property owners.

Acts 1913 (1st Ex. Sess.), ch. 18, § 4; Shan., § 1991a15; Code 1932, § 3422; T.C.A. (orig. ed.), § 6-1117.

7-32-118. Property owners bearing entire cost.

In the event a petition is presented to the legislative body of the municipality averring the willingness of each of the signers to pay their pro rata share of the entire cost of any improvement such as is authorized by this chapter, and relieve the municipality from the payment of any part of the improvement as to any street, highway, or alley, or part or parts thereof, which petition is signed by the owners of at least seventy-five percent (75%) of the frontage of the lots or parcel of land abutting on such street, highway, or alley or part or parts thereof, proposed to be thus improved, such petition may be granted by the legislative body; and then proceedings may be had under this chapter and chapter 33 of this title, the same in all respects as if the improvement had been begun by the legislative body on its own initiative. Bonds may be issued and assessments shall be made, except that the assessments shall, in such event, be made for the entire cost of the improvement, and bonds may be issued for the entire cost instead of assessments being made and bonds being issued for only two thirds (2/3) of the cost of the improvements; provided, that no assessment under this section shall in any event exceed on any lot one half (½) of the assessed value of the lot for municipal taxes for the current year, and all other provisions of this chapter and chapter 33 of this title shall be applicable in respect of any improvement made under this section, except as in this section otherwise expressly provided.

Acts 1913 (1st Ex. Sess.), ch. 18, § 15; Shan., § 1991a63; Code 1932, § 3470; modified; T.C.A. (orig. ed.), § 6-1118.

7-32-119. Costs of improvements.

The cost of any improvement contemplated in this chapter shall include the expense of the preliminary and other surveys, the inspection and superintendence of the work, the preparation of plans and specifications, the printing and publishing of notices, resolutions, and ordinances required, including notice of assessment, preparing bonds, interest on bonds, and any other expense necessary for the completion of the improvement; provided, that the cost of any guaranty or maintenance of any work constructed under the terms of this chapter shall not be assessed against the property abutting on or adjacent to street or streets or other ways improved.

Acts 1913 (1st Ex. Sess.), ch. 18, § 4; Shan., § 1991a16; mod. Code 1932, § 3423; T.C.A. (orig. ed.), § 6-1119.

Collateral References.

Eminent domain: consideration of fact that landowner's remaining land will be subject to special assessment in fixing severance damages. 59 A.L.R.3d 534.

7-32-120. Water connections.

1. Before making any of the improvements contemplated in this chapter, the legislative body shall have the power to order the owners of all abutting real estate to connect their several premises with water mains located in the streets or highways adjacent to their several premises; and upon default of the owners for thirty (30) days after such order to make connection, the city may contract for and make the connection aforementioned, at such distances, under such regulations, and in accordance with such specifications as may be prescribed by the legislative body; and the whole cost of each connection shall be assessed against the premises with which the connection is made.
2. Any number of such connections may be included in one (1) contract, and the cost thereof shall be added to the final levy or assessment made against the property of each lot owner, as hereinbefore provided.

Acts 1913 (1st Ex. Sess.), ch. 18, § 17; Shan., § 1991a65; Code 1932, § 3472; T.C.A. (orig. ed.), § 6-1120.

Cross-References. Requiring sewer and water connections, § 7-35-201.

7-32-121. Notice of apportionment completion and hearing on objections.

1. When the legislative body has completed apportionment, the city clerk, or such person as may be designated by the legislative body of the city, shall publish a notice that the assessment list has been completed, and that, on a day named, which shall be not less than ten (10) days after the date of publication of the notice, the city council or board will consider any and all objections to the apportionment that have been filed in the office of the city clerk or person designated.
2. The notice shall further recite that the lists are in the office of the city clerk or person designated, and may be inspected within business hours and during the time specified by anyone interested.
3. The notice shall also state the general character of the improvement and the terminal points of the improvement.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., §§ 1991a19, 1991a20; Code 1932, §§ 3426, 3427; T.C.A. (orig. ed.), § 6-1121.

Cross-References. Notice of new assessment replacing assessment set aside, § 7-32-127.

7-32-122. Filing objections to assessments.

All persons whose property it is proposed to assess for the cost of the improvement or any costs incurred pursuant to § 7-32-101(d) may, at any time on or before the date named in the notice, and before the meeting of the legislative body, file in writing with the city clerk or person designated any objections or defense to the proposed assessment or to the amount of the assessment.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., § 1991a21; mod. Code 1932, § 3428; T.C.A. (orig. ed.), § 6-1122; Acts 2007, ch. 493, § 3.

7-32-123. Hearing on assessments and objections.

On the date named in the notice, or at any day to which the meeting may be adjourned or to which consideration of the assessments and the objections to the assessment may be postponed, the legislative body shall hear and consider the assessment and objections to the assessment, and, after so doing, shall confirm, modify, or set aside the assessments as shall be deemed right and proper. If any objections to an assessment to pay costs pursuant to § 7-32-101(d) are made, the confirmation of the assessment shall require the unanimous approval of the members of the legislative body present at the meeting at which the objection is considered.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., § 1991a22; Code 1932, § 3429; T.C.A. (orig. ed.), § 6-1123; Acts 2007, ch. 493, § 4.

7-32-124. Failure to object to assessments.

1. If no objection to the assessment or the amount of the assessment is filed, or if the property owners fail to appear in person or by attorney and present the objection, the assessment shall be confirmed and made final.
2. Property owners who do not file objection in writing or protest against the assessment shall be held to have consented to the assessment and are forever barred to attack the regularity, validity, or legality of the assessment.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., §§ 1991a23, 1991a24; Code 1932, §§ 3430, 3431; T.C.A. (orig. ed.), § 6-1124; Acts 2007, ch. 493, § 5.

Cross-References. Waiver of objections to the improvement, § 7-32-106.

7-32-125. Final action on assessments.

1. The confirmation and final action by the legislative body specified in § 7-32-124 shall be done at a single meeting of the body.
2. It is hereby declared that the provisions of the charters of the cities in reference to the passage of ordinances shall not be applicable to the action of the bodies in levying such assessments, except that such levy or assessment shall be approved by the mayor, and in the event the mayor refuses to approve or vetoes the levies or assessments, which the mayor shall do as a whole, such levies or assessments shall be passed over the mayor's veto in like manner as ordinances or resolutions are passed over such vetoes.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., § 1991a25; Code 1932, § 3432; T.C.A. (orig. ed.), § 6-1125.

7-32-126. Appeal on assessments.

1. When any owner or part owner of any of the lots of lands in the flood plain or abutting on or adjacent to any street, highway, avenue, or alley that is improved or about to be improved as provided in this chapter, and upon or against which lots or lands, levies or assessments have been made for the purpose of paying for such improvement, as has been provided in this chapter, shall be aggrieved by the action of the legislative body of such city in confirming the levies or assessments made by the legislative body as mentioned in this chapter, such owner or person shall have the right to appeal from the action of such legislative body to the circuit court of the county in which such city or town is located; provided, that the owner made objection or protest to the levies or assessments at the time provided for and appointed for objecting to the levies or assessments, such appeal shall be perfected by filing with the clerk of such circuit court a petition setting forth the facts in regard to such levies and assessments and the irregularities or illegal acts in the making of the levies or assessments; and such clerk shall then notify such city or town to deliver a copy of such levies or assessments, and all proceedings had in reference to the levies or assessments, to the clerk of the circuit court, and such case then be docketed for trial as other civil causes at law. The appeal of any individual shall not affect the legality of such levy or assessment as to other property involved in the levies or assessments. Such appeal shall be perfected within thirty (30) days after the final action of the legislative body making such levies or assessments, and if not perfected within this time, the levies or assessments shall be regarded as final, and shall not be reviewed by certiorari, injunctions, bills to quiet title or otherwise by any of the courts.
2. Notwithstanding subsection (a), an owner of property subject to an assessment may irrevocably waive the owner's right to appeal in the contract for installment payments described in § 7-32-134 or by otherwise evidencing waiver in writing.

Acts 1913 (1st Ex. Sess.), ch. 18, § 19; Shan., § 1991a67; Code 1932, § 3474; T.C.A. (orig. ed.), § 6-1126; Acts 2001, ch. 267, § 4; 2007, ch. 493, § 6.

7-32-127. New assessment to replace assessment set aside.

If in any court any final assessment made in pursuance of this chapter is set aside for irregularities, omissions, or defects in the proceedings, then the legislative body of such city may, upon recommendation and notice as required in the making of an original assessment, make a new assessment in accordance with this chapter.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., § 1991a28; Code 1932, § 3435; T.C.A. (orig. ed.), § 6-1127.

Cross-References. Notice of assessments, § 7-32-121.

7-32-128. Correction of errors.

Any error, mistake of name, number of lot, amount, or other irregularity may at any time be corrected; and no such levy or assessment shall ever be declared void or invalid by reason of any error, mistake, or irregularity, but the person aggrieved may have the error, mistake, or irregularity corrected by application to the legislative body of the city or town.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., § 1991a27; Code 1932, § 3434; T.C.A. (orig. ed.), § 6-1128.

7-32-129. Delivery of assessments to tax collector — Indexing of information.

1. After the legislative body has levied the assessments against certain parcels of property, the city clerk or person designated shall deliver the assessments to the tax collector of the municipality, who shall enter the assessments into the tax collector's records, which shall include the following information:
   1. Name of owner of the property;
   2. The amount that has been assessed against the parcel of property; and
   3. Any other information deemed appropriate.
2. The information in subsection (a) shall be indexed according to the names of the owners of the property.

Acts 1913 (1st Ex. Sess.), ch. 18, § 8; Shan., § 1991a34; Code 1932, § 3441; T.C.A. (orig. ed.), § 6-1129; Acts 2001, ch. 267, § 5; 2007, ch. 493, § 7; 2009, ch. 489, § 4.

Compiler's Notes. Acts 2009, ch. 489, § 9 provided that the act, which amended §§ 7-32-101, 7-32-115, 7-32-129, 7-32-133, 7-32-138 and 7-33-121, shall apply to all agreements and assessments entered into or imposed pursuant to 7-32-101(d) and 7-32-115(b) on or after July 1, 2007.

7-32-130. Entries in assessment book — Copies.

The special assessment book referred to in § 7-32-129 shall be a book of original entries for any and all purposes, and certified copies of the entries shall be competent evidence in all cases in all the courts.

Acts 1913 (1st Ex. Sess.), ch. 18, § 16; Shan., § 1991a64; Code 1932, § 3471; T.C.A. (orig. ed.), § 6-1130.

7-32-131. Lien of assessment — Tax sale.

1. All such assessments shall constitute a lien on the respective lots or parcels of land upon which they are levied, superior to all other liens except those of the state, county and city for taxes.
2. The enforcement by the state, county, and city of their liens for taxes on any lot or parcel of land upon which has been levied an assessment for any improvement authorized by this chapter shall not operate to discharge or in any manner affect the city's or town's lien for such assessment; however, a purchaser at a tax sale by the state, county, or city of any lot or parcel of land upon which the assessment has been levied shall take the same subject to the lien of such assessment, and if bought by the state, any conveyance of the title thus acquired or any redemption shall be subject to the lien of such assessment.

Acts 1913 (1st Ex. Sess.), ch. 18, § 6; Shan., § 1991a26; Code 1932, § 3433; T.C.A. (orig. ed.), § 6-1131.

7-32-132. Warrant for and payment of assessments.

The tax collector shall issue the tax collector's receivable warrant to the individual or owner desiring to pay any of the assessments, which amount shall be paid to the treasurer of the city as other taxes and revenues of the city are now paid.

Acts 1913 (1st Ex. Sess.), ch. 18, § 8; Shan., § 1991a35; Code 1932, § 3442; T.C.A. (orig. ed.), § 6-1132.

7-32-133. Date assessments due — Installment payments.

1. All assessments levied by virtue of this chapter shall be due and payable within thirty (30) days after the assessment is made final pursuant to § 7-32-125; but at the election of the property owner, to be expressed by notice as provided in § 7-32-134, the assessment may be paid in five (5) annual installments, and shall bear interest at the rate of six percent (6%) per annum, interest payable semiannually.
2. For an assessment levied pursuant to § 7-32-115(b), the municipality may permit payment of the assessment in installments, made not more frequently than monthly and amortized for a period not to exceed thirty (30) years from the date of acquisition and accruing interest at a rate to be determined by the municipality; however, the interest rate shall not exceed the maximum rate of interest permitted by law. Property owners at the time of the initial assessment shall enter into a written agreement detailing the terms of the installment payments pursuant to § 7-32-134.

Acts 1913 (1st Ex. Sess.), ch. 18, § 7; Shan., § 1991a29; Acts 1921 Private, ch. 526, § 1; mod. Code 1932, § 3436; T.C.A. (orig. ed.), § 6-1133; Acts 2007, ch. 493, § 8; 2009, ch. 489, § 5.

Compiler's Notes. Acts 2009, ch. 489, § 9 provided that the act, which amended §§ 7-32-101, 7-32-115, 7-32-129, 7-32-133, 7-32-138 and 7-33-121, shall apply to all agreements and assessments entered into or imposed pursuant to § 7-32-101(d) and § 7-32-115(b) on or after July 1, 2007.

Textbooks. Tennessee Jurisprudence, 22 Tenn. Juris., Special Assessments, § 9.

7-32-134. Contract for installment payments.

1. A property owner desiring to exercise the privilege of payment by installments shall, before the expiration of the thirty (30) days provided for in § 7-32-133, enter into an agreement in writing with the municipality that, in consideration of such privilege, the property owner will make no objection to any illegality or irregularity with regard to the assessment against such property owner's property, and will pay the assessment, as required by law, with the specified interest. Where an assessment is levied against a parcel of property that is subject to or becomes subject to a horizontal property regime, a condominium regime, a time-share regime or a vacation club regime, the officers of the organization representing the owners of interests in such parcel of property or managing such property on behalf of the owners of interests in such parcel of property may enter into such agreement to pay the assessment by installments and such agreement shall be binding upon all owners of interests in property represented in such organization or managed by such organization.
2. The agreement shall be filed in the office of the city clerk or person designated by the municipality.

Acts 1913 (1st Ex. Sess.), ch. 18, § 7; Shan., § 1991a30; Code 1932, § 3437; T.C.A. (orig. ed.), § 6-1134; Acts 2010, ch. 958, § 1.

Textbooks. Tennessee Jurisprudence, 22 Tenn. Juris., Special Assessments, § 9.

7-32-135. Payment date without installment contract.

In all cases where an agreement pursuant to § 7-32-134 has not been signed and filed within the time limit, the entire assessment shall be payable in cash, without interest, before the expiration of thirty (30) days.

Acts 1913 (1st Ex. Sess.), ch. 18, § 7; Shan., § 1991a31; Code 1932, § 3438; T.C.A. (orig. ed.), § 6-1135.

7-32-136. Prepayment of installments.

1. Any property owner who elects to pay the property owner's assessments in five (5) annual installments pursuant to § 7-32-134 shall have the right and privilege of paying the assessment in full at any installment period by paying the full amount of the installments, together with all accrued interest, and an additional sum equal to one half (½) the annual interest on the installments.
2. Notwithstanding subsection (a), an owner of property subject to an assessment may irrevocably waive the owner's right to prepay the assessment in the contract for installment payments described in § 7-32-134 or by otherwise evidencing waiver in writing.

Acts 1913 (1st Ex. Sess.), ch. 18, § 7; Shan., § 1991a32; Code 1932, § 3439; T.C.A. (orig. ed.), § 6-1136; Acts 2007, ch. 493, § 9.

7-32-137. Default in installment payments.

If any property owner defaults in the payment of any installment and interest on the installments, all of the installments, with interest, and an additional sum equal to one half (½) the annual interest, shall become immediately due and payable.

Acts 1913 (1st Ex. Sess.), ch. 18, § 7; Shan., § 1991a33; Code 1932, § 3440; T.C.A. (orig. ed.), § 6-1137.

7-32-138. Attachment on delinquency in payments — Sale of land.

1. Whenever any installments of any assessments become past due for a period of sixty (60) days, it is the duty of the tax collector of the city to certify the installment and all other installments of the same assessment to the city attorney, whose duty it shall be to immediately enforce the collection of the installment or installments, by attachment levied upon the lot or parcel of ground upon which such assessment was levied. In case of any such delinquency, attachment shall be sued out and the lien under the attachment enforced in the chancery court of the county where the land is located. Alternatively, the municipality may collect any installments of any assessments that are past due in the same manner that the municipality is authorized to collect property taxes of the municipality.
2. Any land so attached may be sold in the attachment proceedings in bar of the equity of redemption and all other rights, legal or equitable, belonging to the owners of the land.

Acts 1913 (1st Ex. Sess.), ch. 18, § 8; Shan., § 1991a36; Code 1932, § 3443; T.C.A. (orig. ed.), § 6-1138; Acts 2009, ch. 489, § 6.

Compiler's Notes. Acts 2009, ch. 489, § 9 provided that the act, which amended §§ 7-32-101, 7-32-115, 7-32-129, 7-32-133, 7-32-138 and 7-33-121, shall apply to all agreements and assessments entered into or imposed pursuant to 7-32-101(d) and 7-32-115(b) on or after July 1, 2007.

7-32-139. Purchase by city — Resale by city.

Whenever such proceedings taken by any such city or town result in the sale of any lot of ground to pay any installment or installments of such levies or assessments, the mayor of such city or town shall have the right to bid at such sale up to the amount of all of the assessments that are outstanding against the property. If the property is struck off to the mayor, the title of the property shall be taken in the name of the municipality. The mayor shall thereafter have the power to execute a quitclaim deed of such city to any individual who tenders in consideration of the quitclaim deed the amount of such special assessments that may have been levied against such property, together with all costs, interest, or charges that may have been incurred in the effort to collect such assessments.

Acts 1913 (1st Ex. Sess.), ch. 18, § 18; Shan., § 1991a66; Code 1932, § 3473; T.C.A. (orig. ed.), § 6-1139.

7-32-140. Power to borrow and pay for improvements.

The municipalities affected by this chapter shall have the authority and power to borrow money for the purpose of making payments for the improvements contemplated in this chapter in anticipation of realization of funds, either by the sale of bonds or special assessments. Such municipalities are further authorized to make payments out of any funds on hand or such funds as may be available for either that portion of the work to be assessed against the abutting property owners or owners of property in a flood plain or to be paid by the municipality itself. Nothing in this chapter or chapter 33 of this title shall be construed to prohibit the municipalities affected hereby from making payment of the entire cost of such improvements out of any funds that may be provided or available for such purposes.

Acts 1913 (1st Ex. Sess.), ch. 18, § 23; Shan., § 1991a84; Code 1932, § 3491; T.C.A. (orig. ed.), § 6-1140; Acts 2001, ch. 267, § 6.

7-32-141. Supplemental to other law.

This chapter and chapter 33 of this title shall not repeal, modify, or interfere with the operation of any special or local assessment or abutting property law enacted for the benefit of any particular city or cities; provided, that such chapters shall be additional and supplemental to the powers conferred by such local or special law, and any municipality may take advantage of any of the rights, powers, and authority conferred by such chapters, in addition to those which such cities now possess.

Acts 1913 (1st Ex. Sess.), ch. 18, § 25; Shan., § 1991a86; mod. Code 1932, § 3493; T.C.A. (orig. ed.), § 6-1141.

7-32-142. Construction of chapter.

This chapter, being necessary to secure and preserve public health, safety, convenience and welfare, shall be liberally construed to effect its purposes.

Acts 2007, ch. 493, § 10.

Part 1
General Provisions

7-34-101. Short title.

This chapter shall be known and may be cited as the “Revenue Bond Law.”

Acts 1935 (Ex. Sess.), ch. 33, § 1; C. Supp. 1950, § 4406.42 (Williams, § 4406.34); T.C.A. (orig. ed.), § 6-1301.

Cross-References. Bonds for municipal gas acquisition corporations, § 7-39-304.

Limitation of actions on bonds, § 28-3-113.

Power districts, title 7, ch. 83.

Utility districts, title 7, ch. 82.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal, State and County Securities, § 10.

Law Reviews.

Local Government Law — 1962 Tennessee Survey (Gilbert Merritt, Jr.), 16 Vand. L. Rev. 800 (1963).

Attorney General Opinions. Municipal electric systems as borrowers and re-lenders to third parties, OAG 93-05, 1993 Tenn. AG LEXIS 5 (1/14/93).

Sewer system installation subsidies, OAG 94-105, 1994 Tenn. AG LEXIS 104 (9/9/94).

7-34-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Governing body” means bodies and boards, by whatsoever names they may be known, charged with the governing of a municipality;
2. “Municipality” means any county or incorporated city or town of the state; and
3. “Public works” means any one (1) or combination of two (2) or more of the following: water, sewerage, gas or electric heat, light or power works, plants and systems or parking facilities, together with all parts thereof and appurtenances thereto, including, but not limited to, supply and distribution systems, electrical power purchased from the Tennessee Valley authority or similar governmental agencies, on a current or long-term purchase basis, reservoirs, dams, sewage treatment and disposal works and generating plants.

Acts 1935 (Ex. Sess.), ch. 33, § 2; C. Supp. 1950, § 4406.43 (Williams, § 4406.35); T.C.A. (orig. ed.), § 6-1302; Acts 1981, ch. 260, § 1; 1996, ch. 614, § 1; 2003, ch. 20, § 1.

Compiler's Notes. Acts 2003, ch. 20, § 3 provided that the powers and authority conferred by the act shall be in addition and supplemental to, and the limitation imposed by the act shall not affect the powers conferred by any other general, special or local law or by any private act.

7-34-103. Declaration of policy.

1. It is declared to be the policy of this state that any municipality acquiring, purchasing, constructing, reconstructing, improving, bettering or extending any public works pursuant to this chapter shall manage such public works in the most efficient manner consistent with sound economy and public advantage, to the end that the services of the public works shall be furnished to consumers at the lowest possible cost.
2. No municipality shall operate public works for gain or profit or primarily as a source of revenue to the municipality, but shall operate public works for the use and benefit of the consumers served by the public works and for the promotion of the welfare and for the improvement of the health and safety of the inhabitants of the municipality.
3. No use of revenues authorized by this chapter shall be construed as being contrary to the policy declared in this section.

Acts 1935 (Ex. Sess.), ch. 33, § 3; C. Supp. 1950, § 4406.44 (Williams, § 4406.36); Acts 1969, ch. 335, § 1; T.C.A. (orig. ed.), § 6-1303.

Law Reviews.

Local Government Law — 1956 Tennessee Survey (Joseph Martin, Jr.), 9 Vand. L. Rev. 1032 (1956).

7-34-104. Powers of municipalities.

1. In addition to powers that it may now have, any municipality has the power under this chapter to:
   1. Construct, acquire by gift, purchase, or exercise the right of eminent domain, reconstruct, improve, better or extend any public works, within or without the municipality, or partially within or partially without the municipality, and acquire by gift, purchase, or exercise the right of eminent domain, lands, rights in land or water rights in connection with lands, rights in land or water rights;
   2. Operate and maintain any public works for its own use or for the use and benefit of its inhabitants, and also operate and maintain such public works for the use and benefit of persons, firms, and corporations, including municipal corporations and inhabitants of municipal corporations whose residences or places of business are located outside the territorial boundaries of the municipality;
   3. Lease any public works to, or operate and maintain any public works, either wholly or partially, for the use and benefit of the United States or the state of Tennessee or any agency, instrumentality or authority of either the United States or the state of Tennessee, all under such terms and conditions as may be mutually agreed upon, including the transfer of title to such public works after all bonds issued to finance the acquisition or construction of such public works and the interest on all bonds have been paid or provision made for the payment of the bonds; provided, that any public works may, in the discretion of the governing body, be so leased or operated and maintained as a unit separate and distinct from any other public works of the municipality, and the governing body may pledge the revenues and rentals of the public works exclusively for the payment of the principal and interest of any bonds issued to finance the acquisition or construction of such public works, but nothing contained in this subdivision (a)(3) shall prohibit the governing body from pledging the revenues of other public works for the payment of the principal and interest of such bonds and it is hereby given full authority to do so;
   4. Issue its bonds to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, betterment or extension of any public works. The governing body of the municipality in determining the cost may include all cost and estimated cost of the issuance of the bonds, all engineering, inspection, fiscal and legal expenses, and interest that it is estimated will accrue during the construction period and six (6) months thereafter on money borrowed or that it is estimated will be borrowed pursuant to this chapter;
   5. Prescribe and collect rates, fees, and charges for the services, facilities and commodities furnished by such public works;
   6. Pledge to the punctual payment of the bonds and interest on the bonds an amount of the revenues of such public works, including improvements, betterments, or extensions to the public works thereafter constructed or acquired, or of any part of such public works, sufficient to pay the bonds and interest as the bonds and interest shall become due and create and maintain reasonable reserves for the payment of the bonds and interest. The amount may consist of all or any part or portion of such revenue;
   7. Contract with any person, municipality, the United States, the president of the United States, the Tennessee Valley authority, and any and all other authorities, agencies, and instrumentalities of the United States, and, in connection with any such contract, stipulate and agree to such covenants, terms and conditions as the governing body may deem appropriate, including, but not limited to, covenants, terms and conditions with respect to the resale rates, financial and accounting methods, services, operation and maintenance practices, and the manner of disposition of the revenues of the public works, operated and maintained by the municipality;
   8. Use any right-of-way, easement or other similar property right necessary or convenient in connection with the acquisition, improvement, operation or maintenance of a public works, held by the state or any other political subdivision of the state; provided, that the governing body of such other political subdivision shall consent to such use; and
   9. Issue bonds pursuant to this chapter to finance, in whole or in part, the cost of the acquisition of electrical power purchased from the Tennessee Valley authority or similar government agencies on a current or long-term prepaid purchase basis and pledge to the punctual payment of any such bonds and interest on the bonds its rights in such contracts and an amount of the revenues of its public works, including improvements, betterments, or extensions to such public works thereafter constructed or acquired, or of any part of such public works, sufficient to pay the bonds and interest as the bonds and interest become due and create and maintain reasonable reserves for the payment of the bonds and interest. The amount shall consist of all or any part or portion of such revenue. The governing body of the municipality, in determining the cost of the acquisition of electrical power under this subsection (a), may include all costs and estimated costs of the issuance of the bonds, all engineering, inspection, fiscal and legal expenses.
2. Any municipality authorized by chapter 52, part 4 of this title, to provide any of the services described in chapter 52, part 4 shall have the power and is hereby authorized to borrow money, contract debts and issue its bonds or notes pursuant to the terms of this subsection (b) to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, betterment or extension of a system or systems, or any part thereof, to provide any of such services, including the acquisition of land or rights in land and the acquisition and installation of all equipment necessarily incident to the provision of such services; provided, that:
   1. Notwithstanding any law to the contrary, such services shall not constitute “public works” as defined in § 7-34-102;
   2. For regulatory purposes, a municipality issuing bonds or notes for the purposes set forth in this subsection (b) shall allocate to the costs of providing any of the services authorized by § 7-52-401 payments of principal of, interest on and amortized costs incurred in connection with the issuance of such bonds or notes; provided, that if any of such bonds or notes are issued in such a way that interest on the bonds is excludable from gross income for federal income tax purposes, the municipality shall allocate to costs, in lieu of the actual interest being paid on such bonds or notes, an amount equal to interest that would be payable on the bonds or notes if the bonds or notes were bearing interest at rates equal to the average of the most recently published Moody's Long-Term Corporate Bond Yield Averages and Intermediate Corporate Bond Yield Averages for AAA Public Utilities;
   3. Nothing in this subsection (b) shall be read to diminish or alter the jurisdiction of the Tennessee public utility commission over municipalities that provide any of the services described in chapter 52, part 4 of this title;
   4. To the extent that they do not conflict with subdivisions (b)(1)-(3), the provisions of this chapter relating to the authorization, issuance and sale of bonds or notes, the use and application of revenues of the system or systems being financed, powers to secure such bonds and notes, covenants and remedies for the benefit of bond or note holders with respect to such bonds or notes, validity with respect to such bonds or notes, and powers to refund and refinance such bonds or notes shall apply to any bonds or notes issued for the purposes described in this subsection (b) and the system or systems financed by the issuance and sale of bonds or notes; and
   5. Section 7-52-402 shall apply to the use and application of revenues authorized and permitted by this section.

Acts 1935 (Ex. Sess.), ch. 33, § 4; 1937, ch. 230, § 2; 1949, ch. 211, § 1; C. Supp. 1950, § 4406.45 (Williams, § 4406.37); modified; Acts 1955, ch. 216, § 1; modified; 1975, ch. 5, § 1; T.C.A. (orig. ed.), § 6-1304; Acts 1987, ch. 158, § 3; 1998, ch. 1004, § 1; 2003, ch. 20, § 2; 2017, ch. 94, § 9.

Compiler's Notes. Acts 2003, ch. 20, § 3 provided that the powers and authority conferred by the act shall be in addition and supplemental to, and the limitation imposed by the act shall not affect the powers conferred by any other general, special or local law or by any private act.

Amendments. The 2017 amendment substituted “Tennessee public utility commission” for “Tennessee regulatory authority” in (b)(3).

Effective Dates. Acts 2017, ch. 94, § 83. April 4, 2017.

Cross-References. Cities and towns, mutual assistance in firefighting, title 6, ch. 54, part 6.

Extension of service beyond city limits, § 7-51-401.

Utility districts, title 7, ch. 82.

Attorney General Opinions. Home rule municipality's authority regarding the control of storm water, OAG 92-71, 1992 Tenn. AG LEXIS 69 (12/28/92).

Multi-county gas utility districts, OAG 93-56 (9/2/93).

Domestic nonprofit water cooperative merging with or transferring assets to municipality, OAG 06-176, 2006 Tenn. AG LEXIS 196 (12/19/06).

7-34-105. Works within other municipalities.

No municipality shall construct public works wholly or partly within the corporate limits of another municipality, other than to perform maintenance on or make improvements to its existing public works system in its service area, except with the consent of the governing body of the other municipality.

Acts 1935 (Ex. Sess.), ch. 33, § 13; C. Supp. 1950, § 4406.54 (Williams, § 4406.46); T.C.A. (orig. ed.), § 6-1305; Acts 2009, ch. 74, § 1.

Attorney General Opinions. A municipality is authorized to take and condemn lands to lay a sewer line through another municipality; however, if the utility is financed under the Revenue Bond Law or the Local Government Public Obligations Act of 1986, the municipality building the utility through the territory of another municipality must obtain the consent of the latter's governing body, OAG 01-098, 2001 Tenn. AG LEXIS 89 (6/13/01).

7-34-106. Exemption from utilities regulation.

It is unnecessary for a municipality proceeding under this chapter to obtain a certificate of convenience or necessity, franchise, license, permit, or other authorization from a bureau, board, commission, or other like instrumentality of the state to acquire, construct, purchase, reconstruct, improve, extend, maintain, or operate public works, except as provided in § 68-221-1017.

Acts 1935 (Ex. Sess.), ch. 33, § 16; C. Supp. 1950, § 4406.57 (Williams, § 4406.49); T.C.A. (orig. ed.), § 6-1306; Acts 2020, ch. 720, § 1.

Amendments. The 2020 amendment rewrote this section, which read: “It shall not be necessary for any municipality proceeding under this chapter to obtain any certificate of convenience or necessity, franchise, license, permit, or other authorization from any bureau, board, commission or other like instrumentality of the state in order to acquire, construct, purchase, reconstruct, improve, better, extend, maintain and operate any public works.”

Effective Dates. Acts 2020, ch. 720, § 6. June 22, 2020.

Cross-References. Municipal gas companies exempt, § 7-39-311.

Municipal utilities exemption not eliminated, § 7-34-117.

Collateral References.

Public utility acts, applicability of, to municipal corporations owning or operating a public utility. 10 A.L.R. 1432, 18 A.L.R. 946.

7-34-107. Deposit of revenues.

All moneys of a municipality derived from a public works shall be deposited in one (1) or more banks or trust companies in a special account or accounts.

Acts 1935 (Ex. Sess.), ch. 33, § 14; 1937, ch. 230, § 3; C. Supp. 1950, § 4406.55 (Williams, § 4406.47); T.C.A. (orig. ed.), § 6-1307.

7-34-108. Charges to municipality or department.

Charges shall be made for any service rendered by a public works to a municipality or to any department or works of the municipality, at the rate applicable to other customers taking service under similar conditions. Revenues derived from such service shall be treated as all other revenues.

Acts 1935 (Ex. Sess.), ch. 33, § 15; C. Supp. 1950, § 4406.56 (Williams, § 4406.48); T.C.A. (orig. ed.), § 6-1308.

Collateral References.

Advertising or promotional expenditures of public utility as part of operating expenses for ratemaking purposes. 83 A.L.R.3d 963.

Power of municipality to charge nonresidents higher fees than resident for use of municipal facilities. 57 A.L.R.3d 998.

7-34-109. Authorized projects — Bond issues — Resolutions — Interim certificates.

1. The construction, acquisition, reconstruction, improvement, betterments or extension of any public works may be authorized under this chapter, and bonds may be authorized to be issued under this chapter to provide funds for such purpose or purposes by resolution or resolutions of the governing body, which may be adopted at the same meeting at which they are introduced by a majority of all members of the governing body then in office, and shall take effect immediately upon adoption.
2. The bonds shall bear interest at a zero (0) rate or at rates that vary from time to time or at such rate or rates; payable at such time or times; may be in one (1) or more series; may bear such date or dates; may mature at such time or times, not exceeding forty (40) years from their respective dates; may be payable in such medium of payment, at such place or places; may carry such registration privileges; may be subject to such terms of redemption; may be executed in such manner; may contain such terms, covenants and conditions; and may be in such form, as such resolution or subsequent resolutions may provide.
3. The bonds may be sold at public or private sale at such price as may be determined by the governing body.
4. Pending the preparation of the definitive bonds, interim receipts or certificates in such form and with such provisions as the governing body may determine may be issued to the purchaser or purchasers of bonds sold pursuant to this chapter.
5. The bonds and interim receipts or certificates shall be fully negotiable within the meaning of and for all purposes of the Uniform Commercial Code, compiled in title 47, chapters 1-9.
6. With respect to all or any portion of any issue of bonds or notes issued or anticipated to be issued under this chapter, at any time during the term of the bonds or notes, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized in this subsection (f) are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in subsection (h), a municipality by resolution may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the municipality may determine, including, but not limited to, provisions permitting the municipality to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination of the agreement or default under such agreement.
7. The governing body of a municipality may enter into an agreement to sell its bonds and notes, other than its refunding bonds, under this chapter, providing for delivery of its bonds and notes on a date greater than ninety (90) days and not greater than five (5) years, or such greater period of time if approved by the comptroller of the treasury or the comptroller's designee, from the date of execution of such agreement or to sell its refunding bonds under this chapter, providing for delivery of its refunding bonds on a date greater than ninety (90) days from the date of execution of the agreement and not greater than the first optional redemption date on which the bonds being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the agreement or contract of a municipality to sell its bonds and notes as authorized in this subsection (g) is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with subsection (h). Agreements to sell bonds and refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement do not require a report of the comptroller of the treasury or the comptroller's designee.
8. 1. The state funding board shall establish guidelines, rules or regulations with respect to the agreements and contracts referenced in subsections (f) and (g), which may include, but shall not be limited to, the following:
      1. The conditions under which such agreements or contracts can be entered into;
      2. The methods by which such contracts are to be solicited and procured;
      3. The form and content such contracts shall take;
      4. The aspects of risk exposure associated with such contracts;
      5. The standards and procedures for counterparty selection, including rating criteria;
      6. The procurement of credit enhancement, liquidity facilities, or the setting aside of reserves in connection with such contracts or agreements;
      7. The methods of securing the financial interest in such contracts;
      8. The methods to be used to reflect such contracts in the municipality's financial statements;
      9. Financial monitoring and periodic assessment of such contracts by the municipality;
      10. The application and source of nonperiodic payments; and
      11. Educational requirements for officials of any municipality responsible for approving any such contract or agreement.
   2. Prior to the adoption by the governing body of the municipality of a resolution authorizing such contract or agreement, a request shall be submitted to the comptroller of the treasury or the comptroller's designee for a report finding that such contract or agreement is in compliance with the guidelines, rules or regulations of the state funding board. Within fifteen (15) days of receipt of the request, the comptroller of the treasury or the comptroller's designee shall determine whether the contract or agreement substantially complies with the guidelines, rules or regulations and shall report on such compliance to the municipality. If the report of the comptroller of the treasury or the comptroller's designee finds that the contract or agreement complies with the guidelines, rules or regulations of the state funding board or the comptroller of the treasury shall fail to report within the fifteen-day period, then the municipality may take such action with respect to the proposed contract or agreement as it deems advisable in accordance with this section and the guidelines, rules or regulations of the state funding board. If the report of the comptroller of the treasury or the comptroller's designee finds that such contract or agreement is not in compliance with the guidelines, rules or regulations, then the municipality is not authorized to enter into such contract or agreement. The guidelines, rules or regulations shall provide for an appeal process to a determination of noncompliance.
9. When entering into any contracts or agreements facilitating the issuance and sale of bonds and notes, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating to the contracts or agreements, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, and agreements with the purchaser of the bonds authorized under this section or with the purchaser of the notes authorized under § 7-34-111 evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the municipality may agree in the written contract or agreement that the rights and remedies of the parties to the contract or agreement shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over any municipality against which an action on such a contract or agreement is brought shall lie solely in a court in Tennessee that would otherwise have jurisdiction of actions brought in contract against such municipality.
10. Prior to the adoption or promulgation by the state funding board of guidelines, rules or regulations with respect to the contracts and agreements authorized in subsections (f) and (g), a municipality may enter into such contracts or agreements to the extent otherwise authorized in this chapter or in any other law notwithstanding subsections (f) and (g). Nothing in subsection (f), (g), (h) or (i) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for a municipality to enter into the contracts or agreements described in subsection (f), (g), (h) or (i) heretofore entered into or entered into prior to the adoption or promulgation by the state funding board of guidelines, rules or regulations.
11. When entering into an interest rate agreement authorized by this section, a municipality may secure its obligations under the agreement, including its obligation for termination or other nonperiodic payments, with the revenues available to secure the bonds with respect to which such interest rate agreement is entered into.

Acts 1935 (Ex. Sess.), ch. 33, § 5; C. Supp. 1950, § 4406.46 (Williams, § 4406.38); Acts 1955, ch. 216, § 2; 1969, ch. 192, § 1; 1969, ch. 284, § 1; T.C.A. (orig. ed.), § 6-1309; Acts 1985, ch. 225, § 3; 1999, ch. 427, § 1; 2001, ch. 253, §§ 3-7; 2004, ch. 589, § 3.

Cross-References. Bonds exempt from taxation, § 7-34-116.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal, State and County Securities, § 10.

7-34-110. Covenants in resolutions — Bondholders' remedies.

1. Any resolution authorizing the issuance of bonds under this chapter may contain covenants as to:
   1. The purpose or purposes to which the proceeds of sale of bonds may be applied and the use and disposition of the proceeds;
   2. The use and disposition of the revenue of the public works for which the bonds are to be issued, including the creation and maintenance of reserves;
   3. The transfer from the general funds of the municipality to the account or accounts of the public works an amount equal to the cost of furnishing such municipality or any of its departments, boards or agencies with the services, facilities and commodities of the public works;
   4. The issuance of other or additional bonds payable from the revenue of the public works;
   5. The operation and maintenance of such public works;
   6. The insurance to be carried on the bonds and the use and disposition of insurance moneys;
   7. Books of accounts and the inspection and audit of the books and as to accounting methods; and
   8. The terms and conditions upon which the holders of the bonds or any proportion of them or any trustees for the holders shall be entitled to the appointment of a receiver by the chancery court, which court shall have jurisdiction in such proceedings, and which receiver may enter and take possession of the public works, operate and maintain the public works, prescribe rates, fees or charges, and collect, receive and apply all revenue thereafter arising from the public works in the same manner as the municipality itself might do.
2. This chapter and any such resolution or resolutions shall be a contract with the holder or holders of the bonds, and the duties of the municipality and of its governing body and officers under this chapter and any such resolution or resolutions shall be enforceable by any bondholder by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction.

Acts 1935 (Ex. Sess.), ch. 33, § 6; C. Supp. 1950, § 4406.47 (Williams, § 4406.39); T.C.A. (orig. ed.), § 6-1310.

7-34-111. Revenue anticipation notes — Bonds and notes not general obligations.

1. The governing body, or any board or commission of a municipality having jurisdiction, control and management of the public works of a municipality, may borrow money in anticipation of the collection of revenues from such public works and issue negotiable notes to evidence such borrowing, the proceeds from the sale of such notes to be used for the purpose of paying the cost of construction of additions, betterments and improvements to and extensions of the public works, the revenues of which are pledged to the payment of such notes.
2. Such notes shall be payable not later than five (5) years from the date of the notes, and shall be sold in such manner and upon such terms and conditions as may be determined by the governing body, board or commission issuing the notes.
3. The governing body may issue bonds in the manner provided by § 7-34-109, for the funding of notes issued pursuant to subsection (a), and for the purpose of refunding at or prior to maturity bonds theretofore issued pursuant to § 7-34-109.
4. The governing body, or any board or commission of a municipality having jurisdiction, control and management of an electric power distribution system or a natural gas distribution system, may borrow money in anticipation of the collection of revenues from such system and issue negotiable notes to evidence such borrowing for the purpose of financing electrical power or gas purchases, including storage costs and pipeline capacity costs. Any such notes shall be secured solely by a pledge of and lien on the revenues of such system. The principal amount of notes that may be issued during any twelve-month period shall not exceed sixty percent (60%) of total electrical power or gas purchases for the same period, and all notes issued during such period shall be retired and paid in full on or before the end of such period. The notes shall be sold in such manner, at such price and upon such terms and conditions as may be determined by the governing body, board or commission issuing such notes. No notes shall be issued under this subsection (d) unless the electric system or gas system for which the notes are to be issued has positive retained earnings as shown in the most recent audited financial statements of the system, and the system has produced positive net income in at least one (1) fiscal year out of the three (3) fiscal years next preceding the issuance of the notes as shown on the audited financial statements of the system. No notes shall be issued without first being approved by the comptroller of the treasury or the comptroller's designee. If the revenues of such system are insufficient to pay all such notes at maturity, any unpaid notes may be renewed one (1) time for a period not to exceed one (1) year or may be retired with funding bonds issued pursuant to the Cash Basis Law of 1937, compiled in title 9, chapter 11, or may be otherwise liquidated as approved by the comptroller of the treasury or the comptroller's designee.
5. This chapter for the payment and security of bonds issued pursuant to this chapter shall be equally applicable to notes issued pursuant to this section.
6. No holder or holders of any bonds or notes issued under this chapter shall have the right to compel any exercise of the taxing powers of the municipality to pay the bonds or notes, or the interest on the bonds or notes, and each bond or note issued under this chapter shall recite in substance that the bond or note, as the case may be, including the interest on the bond or note, is payable solely from the revenues pledged to the payment of the bond or note, and that the bond or note does not constitute a debt of the municipality within the meaning of any statutory limitation.

Acts 1935 (Ex. Sess.), ch. 33, § 9; C. Supp. 1950, § 4406.50 (Williams, § 4406.42); Acts 1957, ch. 196, § 1; T.C.A. (orig. ed.), § 6-1311; Acts 1996, ch. 794, §§ 1, 2; 2010, ch. 868, § 17.

Collateral References.

Revenue bonds or other bonds not creating indebtedness as within constitutional or statutory requirement of prior approval by electors of issuance of bonds or incurring indebtedness by municipality. 146 A.L.R. 604.

7-34-112. Validity of bonds.

The bonds bearing the signatures of officers in office on the date of the signing of the bonds shall be valid and binding obligations, notwithstanding that before delivery of, and payment for, the bonds any or all the persons whose signatures appear on the bonds have ceased to be officers of the municipality issuing the bonds. The validity of the bonds shall not be dependent on nor affected by the validity or regularity of any proceedings relating to the acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of the public works for which the bonds are issued. The resolution authorizing the bonds may provide that the bonds shall contain a recital that they are issued pursuant to this chapter, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.

Acts 1935 (Ex. Sess.), ch. 33, § 7; C. Supp. 1950, § 4406.48 (Williams, § 4406.40); T.C.A. (orig. ed.), § 6-1312.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal, State and County Securities, § 10.

7-34-113. Lien on public works revenue.

1. All bonds of the same issue shall, subject to the prior and superior rights of outstanding bonds, claims or obligations, have a prior and paramount lien on the revenue of the public works for which the bonds have been issued, over and ahead of all bonds of any issue payable from the revenue that may be subsequently issued, and over and ahead of any claims or obligations of any nature against the revenue subsequently arising or subsequently incurred; provided, that the proceedings authorizing any issue of bonds may provide for the issuance of additional bonds on a parity with the bonds.
2. All bonds of the same issue shall be equally and ratably secured without priority by reason of number, date of bonds, of sale, or execution, or of delivery, by a lien on the revenue in accordance with this chapter and the resolution or resolutions authorizing the bonds.

Acts 1935 (Ex. Sess.), ch. 33, § 8; C. Supp. 1950, § 4406.49 (Williams, § 4406.41); Acts 1967, ch. 256, § 1; T.C.A. (orig. ed.), § 6-1313.

7-34-114. Rates sufficient to support plant — Consumer use of auxiliary energy sources.

1. The governing body of a municipality issuing bonds pursuant to this chapter shall prescribe and collect reasonable rates, fees or charges for the services, facilities and commodities of such public works, and shall revise such rates, fees or charges, from time to time, whenever necessary so that such public works shall be and always remain self-supporting. The rates, fees or charges prescribed shall be such as will produce revenue at least sufficient to:
   1. Pay when due all bonds and interest on the bonds, for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reserves for the payment of the bonds and interest; and
   2. Provide for all expenses of operation and maintenance of such public works, including reserves for the expenses and maintenance.
2. When such public works supplies its services to consumers who use solar or wind powered equipment as a source of energy, such public works shall not discriminate against such consumers by its rates, fees or charges or by altering the availability or quality of energy.
3. Any consumer who uses solar power, wind power, or other auxiliary source of energy shall install and operate the equipment, property, or appliance for such energy source in compliance with any state or local code or regulation applicable to the safe operation of such equipment, property, or appliance.

Acts 1935 (Ex. Sess.), ch. 33, § 10; C. Supp. 1950, § 4406.51 (Williams, § 4406.43); T.C.A. (orig. ed.), § 6-1314; Acts 1980, ch. 756, § 1.

Cross-References. Discrimination by public utilities against consumers using auxiliary energy sources, §§  65-4-105, 65-5-104.

Attorney General Opinions. Municipal authority to charge residents never connected to water system, OAG 98-0152, 1998 Tenn. AG LEXIS 152 (8/12/98).

Discount rates for charitable organizations not authorized, OAG 99-026, 1999 Tenn. AG LEXIS 25 (2/16/99).

Collateral References.

Advertising or promotional expenditures of public utility as part of operating expenses for ratemaking purposes. 83 A.L.R.3d 963.

Validity of “fuel adjustment” or similar clauses authorizing electric utility to pass on increased cost of fuel to its customers. 83 A.L.R.3d 933.

7-34-115. Operation of utility systems — Disposition of revenue. [Effective until January 1, 2021. See the version effective on January 1, 2021.]

1. 1. Notwithstanding any other law to the contrary, as a matter of public policy, municipal utility systems shall be operated on sound business principles as self-sufficient entities. User charges, rates and fees shall reflect the actual cost of providing the services rendered. No public works shall operate for gain or profit or as a source of revenue to a governmental entity, but shall operate for the use and benefit of the consumers served by such public works and for the improvement of the health and safety of the inhabitants of the area served. Nothing in this section shall preclude a municipal utility system from operating water and sewer systems as individual or combined entities. Nothing in this section shall preclude a municipal utility system from operating a public works system as a special revenue fund when the governing body of the municipality determines that it is in the best interest of the customers of the public works system and the citizens of the municipality. All water systems and wastewater facilities must utilize an enterprise fund for accounting and reporting its operations. Any water system or wastewater facility currently not operating as an enterprise fund must be doing so by July 1, 2016. To the extent of any conflict between this section and the Wastewater Facilities Act of 1987, compiled in title 68, chapter 221, part 10, the latter statute shall control. Any municipality shall devote all revenues derived from a public works to or for:
      1. The payment of all operating expenses;
      2. Bond interest and retirement or sinking fund payments, or both;
      3. The acquisition and improvement of public works;
      4. Contingencies;
      5. The payment of other obligations incurred in the operation and maintenance of the public works and the furnishing of services;
      6. The redemption and purchase of bonds, in which case such bonds shall be cancelled;
      7. The creation and maintenance of a cash working fund;
      8. The payment of an amount to the general fund of the municipality not to exceed a cumulative return of six percent (6%) per annum of any equity invested from the general fund, if any, of the municipality. Equity investment includes any contributions or purchases made by the municipality from the general fund, including, but not limited to, cash contributions, retirement of debt service and purchases of equipment, so long as these contributions are reflected in the utility's financial statement; provided, that such definition of equity investment shall not change the status under this section of any payments made pursuant to any city charter in existence on or before July 1, 1993; and
      9. If the governing body of the municipality by resolution so requests, payments to the municipality in lieu of ad valorem tax on the property of the public works within the corporate limits of the municipality not to exceed the amount of taxes payable on privately owned property of similar nature.
   2. Notwithstanding subdivision (a)(1) or any other law to the contrary, if the municipal utility system is a natural gas utility system, the municipal utility board with management responsibility for the municipal utility system or, if there is no such board, the municipal governing body, may also devote revenues derived from the system to funding chambers of commerce and economic and community organizations in accordance with an ordinance or resolution adopted by the governing body of the municipality. A municipal utility system whose revenues are devoted pursuant to this subdivision (a)(2) shall not raise rates on customers to cover contributions targeted for economic development efforts. The authorization provided in this subdivision (a)(2) shall only apply to municipal natural gas utility systems that are located in counties having a population of less than three hundred thirty-six thousand four hundred (336,400) according to the 2010 federal census, and the authorization provided in this subdivision (a)(2) is in addition to such authorization as may be provided to municipal utility systems under otherwise applicable law.
2. Any surplus remaining, after establishment of proper reserves, if any, shall be devoted solely to the reduction of rates.
3. In the event a municipality establishes a pension plan for employees of public works, expenditures incident to inaugurating and maintaining such plan shall be deemed an operating expense for purposes of this section.
4. In computing the equity investment of the municipality, the value of the public works shall be taken as its historical cost. The payment of bonds or the acquisition or improvement of property from the receipts derived from a public works or any other operation of the public works as such shall not be considered to increase the equity investment of the municipality.
5. Nothing in this section shall be construed to limit the power of the municipality to make contracts with the purchasers of bonds:
   1. As to the use and disposition of the revenues otherwise than as set forth in subsection (a);
   2. As to the order of application of such revenues; or
   3. As to limitations on the amount of payments to the municipality either as a return on the equity investment of the municipality, if any, or as a payment in lieu of taxes.
6. If a municipality violates this section, it must repay any funds illegally transferred. If the municipality does not have sufficient funds to repay any funds illegally transferred, the municipality is required to submit a plan covering a period not to exceed five (5) years in which to repay the funds. The plan shall be submitted to and approved by the comptroller of the treasury or the comptroller's designee. Upon discovery of such violation through an audit, any city official in violation of this section is subject to ouster under title 8, chapter 47.
7. Nothing in this section shall preclude a local government from being entitled to receive from a utility the amount of direct and properly allocated and disclosed indirect operating expenses incurred by the municipality on behalf of the utility.
8. To the extent of any conflict between this section and § 7-39-404, or chapter 52, part 3 of this title, § 7-39-404, or chapter 52, part 3 of this title shall control.
9. 1. In addition to the authority granted under otherwise applicable law, a municipality operating a municipal utility system may, acting through the authorization of the board or supervisory body having responsibility for the municipal utility system, accept and distribute excess receipts for bona fide charitable purposes pursuant to programs approved by the board or supervisory body, which programs may include, but are not limited to, programs in which utility bills are rounded up to the next dollar when the amount of any excess receipt due to rounding is shown as a separate line on the utility bill.
   2. Excess receipts accepted by a municipal utility system pursuant to programs authorized by subdivision (i)(1) are not considered revenue to the municipal utility system, and the municipality may only use the excess receipts for charitable purposes.
   3. For purposes of this subsection (i):
      1. “Charitable purpose” means a purpose that provides relief to the poor or underprivileged, advances education or science, addresses community deterioration, provides community assistance, assists in economic development, provides for the erection of public buildings, monuments, or works, assists in historic preservation, or promotes social welfare through nonprofit or governmental organizations designed to accomplish any of the purposes listed in this subdivision (i)(3); and
      2. “Opt-out basis” means automatically enrolling customers in a program and requiring notice from the customer of a desire to be removed from the program in order to cease participation in the program.
   4. 1. A municipal utility system that establishes a program authorized by subdivision (i)(1) on or after January 1, 2021, shall not enroll any customer into the program without the express consent of the customer.
      2. A customer who is enrolled in a program authorized by subdivision (i)(1) may opt out of the program by providing notice to the utility of the customer's desire to cease participation in the program.
      3. Upon receiving an opt-out notice from a customer, the utility shall remove the customer from enrollment in the program no later than the first day of the customer's next regular billing cycle that begins no fewer than thirty (30) days after the date of the customer's opt-out notice.
   5. 1. Any municipal utility system that on June 3, 2019, utilizes a program authorized by subdivision (i)(1) and operates the program on an opt-out basis shall send a written notice to each municipal utility system customer no later than November 1, 2020, that contains, but is not limited to, the following information:
         1. A statement that the municipal utility system utilizes a program authorized by subdivision (i)(1), the program is operated on an opt-out basis, and a description of the program;
         2. Notification that a customer whose bill is currently rounded up by the utility has the right to opt out of participation in the program; and
         3. Contact information for the utility and instructions on how the customer may contact the utility to opt out of participation in the program.
      2. The written notice required by this subdivision (i)(5) may be provided to the customer by electronic means and may accompany a regular billing statement, at the discretion of the municipal utility system.
      3. A municipal utility system that on June 3, 2019, utilizes a program authorized by subdivision (i)(1) and operates the program on an opt-out basis that fails to send the notice required by this subdivision (i)(5) shall, on and after January 1, 2021, cease operating the program on an opt-out basis and shall not operate a program unless operated in compliance with subdivision (i)(4).
   6. Any municipal utility system that utilizes a program authorized by subdivision (i)(1) and that maintains a website that is accessible by the general public shall publish in a conspicuous location on the website by November 1, 2020, and throughout the duration of the municipal utility system's utilization of the program, the following information:
      1. A statement that the municipal utility system utilizes a program authorized by subdivision (i)(1) and a description of the program;
      2. Notification that a customer whose bill is currently rounded up by the utility has the right to opt out of participation in the program; and
      3. Contact information for the utility and instructions on how the customer may contact the utility to opt into or out of participation in the program.
10. 1. The governing body of a municipal utility system subject to this section that supervises, controls, or operates a public water or public sewer system, including, but not limited to, those systems using a separate utility board pursuant to any public or private act, must meet the training and continuing education requirements in this subsection (j).
    2. All members of the municipal utility board of commissioners shall, within one (1) year of initial appointment or election to the board of commissioners or within one (1) year of reappointment or reelection to the board of commissioners, attend a minimum of twelve (12) hours of training and continuing education in one (1) or more of the subjects listed in subdivision (j)(4).
    3. 1. In each continuing education period after the initial training and continuing education required by subdivision (j)(2), a municipal utility board commissioner shall attend a minimum of twelve (12) hours of training and continuing education in one (1) or more of the subjects listed in subdivision (j)(4).
       2. For the purposes of this subsection (j) and subsection (k), “continuing education period” means a period of three (3) years beginning January 1 after the calendar year in which a municipal utility board commissioner completes the training and continuing education requirements set forth in subdivision (j)(2) and each succeeding three-year period thereafter.
    4. The subjects for the training and continuing education required by this subsection (j) shall include, but not be limited to, board governance, financial oversight, policy-making responsibilities, and other topics reasonably related to the duties of the members of the board of commissioners of a municipal utility.
    5. Any association or organization with appropriate knowledge and experience may prepare a training and continuing education curriculum for municipal utility board commissioners covering the subjects set forth in subdivision (j)(4) to be submitted to the comptroller of the treasury for review and approval prior to use. The comptroller shall file a copy of approved training and continuing education curriculum with the water and wastewater financing board. Changes and updates to the curriculum must be submitted to the comptroller for approval prior to use. Any training and continuing education curriculum approved by the comptroller must be updated every three (3) years and resubmitted to the comptroller for review and approval.
    6. For purposes of this subsection (j), a municipal utility board commissioner may request a training and continuing education extension of up to six (6) months from the comptroller of the treasury or the comptroller's designee. The request shall only be granted upon a reasonable showing of substantial compliance with this subsection (j). If the extension is granted, the municipal utility board commissioner must complete any additional required training hours necessary to achieve full compliance for only the relevant continuing education period within the extension period. The municipal utility board commissioner shall file copies of any extension request letters and corresponding comptroller of the treasury determination letters with the water and wastewater financing board.
    7. 1. Beginning no later than March 1, 2019, the comptroller of the treasury shall offer online training and continuing education courses for purposes of compliance with this subsection (j).
       2. Any association or organization with appropriate knowledge and experience may prepare an online training and continuing education curriculum for municipal utility board commissioners covering the subjects set forth in subdivision (j)(4) to be submitted to the comptroller of the treasury for review and approval prior to use.
       3. The comptroller of the treasury shall file a copy of approved online training and continuing education curriculum with the water and wastewater financing board. Changes and updates to the curriculum must be submitted to the comptroller of the treasury for approval prior to use. Any online training and continuing education curriculum approved by the comptroller of the treasury must be updated every three (3) years and resubmitted to the comptroller of the treasury for review and approval.
       4. Any person required to complete training and continuing education under this subsection (j) may take one (1) or more of such online courses in lieu of attending training and continuing education courses in person.
       5. The online training and continuing education provider shall provide a certificate of completion or attendance that shall be submitted by the municipal utility board commissioner to the municipality. Each municipality shall keep the certificate of completion or attendance for six (6) years after the calendar year in which the certificate of completion or attendance is submitted.
11. If any member of a municipal utility board of commissioners fails to meet the training and continuing education requirements set forth in subsection (j) before the end of the continuing education period or before the end of any extension approved by the comptroller of the treasury or the comptroller's designee, then the water and wastewater financing board shall have full discretion to order reasonable sanctions against the municipality, including, but not limited to, the municipality being ineligible to receive assistance from the Tennessee local development authority under § 68-221-1206(a)(3).
12. Notwithstanding any other law to the contrary, a municipal utility system providing water, sewer, or natural gas service has the power to enter into agreements with companies to provide water, sewer, or natural gas leak protection bill coverage, insurance, or service agreements for customers and to offer their customers water line, sewer line, or natural gas line damage protection coverage, insurance, or service agreements for customer-owned water, sewer, or natural gas lines. The municipal utility system may include the costs for the coverage, insurance, or service agreements on the monthly utility bills of their customers.

Acts 1935 (Ex. Sess.), ch. 33, § 11; 1949, ch. 43, § 1; C. Supp. 1950, § 4406.52 (Williams, § 4406.44); Acts 1969, ch. 335, § 2; T.C.A. (orig. ed.), § 6-1315; Acts 1986, ch. 533, § 1; 1993, ch. 509, § 1; 1998, ch. 763, § 1; 2003, ch. 181, § 1; 2010, ch. 868, § 18; 2014, ch. 628, §§ 1-4; 2017, ch. 118, § 1; 2018, ch. 956, § 1; 2018, ch. 1003, § 1; 2019, ch. 41, § 1; 2019, ch. 228, § 1; 2019, ch. 508, § 1.

Amendments. The 2017 amendment added (j) and (k).

The 2018 amendment by ch. 956, added (j)(7).

The 2018 amendment by ch. 1003, added (a)(2).

The 2019 amendment by ch. 41, rewrote (j)(7)(E), which read: “Beginning no later than March 1, 2019, the comptroller of the treasury shall offer online training and continuing education courses for purposes of compliance with this subsection (j).”

The 2019 amendment by ch. 228, added (l ).

The 2019 amendment by ch. 508, rewrote (i), which read: “(1) In addition to the authority granted under otherwise applicable law, a municipality operating a municipal utility system has the power and is authorized, acting through the authorization of the board or supervisory body having responsibility for the municipal utility system, to accept and distribute voluntary contributions for bona fide charitable purposes pursuant to programs approved by the board or supervisory body, which programs may include, but shall not be limited to, programs in which utility bills are rounded up to the next dollar when such contribution is shown as a separate line on the utility bill. (2)  Contributions accepted by a municipal utility system pursuant to programs authorized by subdivision (i)(1) shall not be considered revenue to the municipal utility system, and such contributions shall be used only for charitable purposes. (3)  For purposes of this subsection (i), a “charitable purpose” is one that provides relief to the poor or underprivileged, advances education or science, addresses community deterioration, provides community assistance, assists in economic development, provides for the erection of public buildings, monuments or works, assists in historic preservation, or promotes social welfare through nonprofit or governmental organizations designed to accomplish any of the purposes listed in this subdivision (i)(3).”

Effective Dates. Acts 2017, ch. 118, § 6. April 12, 2017.

Acts 2018, ch. 956, § 2. May 15, 2018.

Acts 2018, ch. 1003, § 2. May 21, 2018.

Acts 2019, ch. 41, § 2. March 22, 2019.

Acts 2019, ch. 228, § 4. April 30, 2019.

Acts 2019, ch. 508, § 6. June 3, 2019.

Cross-References. Powers in carrying out purposes, § 7-82-304.

Attorney General Opinions. Discount utility rates to charitable organizations, OAG 97-127, 1997 Tenn. AG LEXIS 160 (9/08/97).

Municipal authority to charge residents never connected to water system, OAG 98-0152, 1998 Tenn. AG LEXIS 152 (8/12/98).

Discount rates for charitable organizations not authorized, OAG 99-026, 1999 Tenn. AG LEXIS 25 (2/16/99).

7-34-115. Operation of utility systems — Disposition of revenue. [Effective on January 1, 2021. See the version effective until January 1, 2021.]

1. 1. Notwithstanding any other law to the contrary, as a matter of public policy, municipal utility systems shall be operated on sound business principles as self-sufficient entities. User charges, rates and fees shall reflect the actual cost of providing the services rendered. No public works shall operate for gain or profit or as a source of revenue to a governmental entity, but shall operate for the use and benefit of the consumers served by such public works and for the improvement of the health and safety of the inhabitants of the area served. Nothing in this section shall preclude a municipal utility system from operating water and sewer systems as individual or combined entities. Nothing in this section shall preclude a municipal utility system from operating a public works system as a special revenue fund when the governing body of the municipality determines that it is in the best interest of the customers of the public works system and the citizens of the municipality. All water systems and wastewater facilities must utilize an enterprise fund for accounting and reporting its operations. Any water system or wastewater facility currently not operating as an enterprise fund must be doing so by July 1, 2016. To the extent of any conflict between this section and the Wastewater Facilities Act of 1987, compiled in title 68, chapter 221, part 10, the latter statute shall control. Any municipality shall devote all revenues derived from a public works to or for:
      1. The payment of all operating expenses;
      2. Bond interest and retirement or sinking fund payments, or both;
      3. The acquisition and improvement of public works;
      4. Contingencies;
      5. The payment of other obligations incurred in the operation and maintenance of the public works and the furnishing of services;
      6. The redemption and purchase of bonds, in which case such bonds shall be cancelled;
      7. The creation and maintenance of a cash working fund;
      8. The payment of an amount to the general fund of the municipality not to exceed a cumulative return of six percent (6%) per annum of any equity invested from the general fund, if any, of the municipality. Equity investment includes any contributions or purchases made by the municipality from the general fund, including, but not limited to, cash contributions, retirement of debt service and purchases of equipment, so long as these contributions are reflected in the utility's financial statement; provided, that such definition of equity investment shall not change the status under this section of any payments made pursuant to any city charter in existence on or before July 1, 1993; and
      9. If the governing body of the municipality by resolution so requests, payments to the municipality in lieu of ad valorem tax on the property of the public works within the corporate limits of the municipality not to exceed the amount of taxes payable on privately owned property of similar nature.
   2. 1. Notwithstanding subdivision (a)(1) or any other law to the contrary, if the municipal utility system is a natural gas utility system, then the municipal utility board with management responsibility for the municipal utility system or, if there is no such board, the municipal governing body, may also devote revenues derived from the system to funding chambers of commerce and economic and community organizations in accordance with an ordinance or resolution adopted by the governing body of the municipality.
      2. The comptroller of the treasury shall devise standard procedures to assist a municipal utility system whose revenues are devoted pursuant to this subdivision (a)(2) in the disposition of those funds. The municipal utility board with management responsibility for the municipal utility system or, if there is no such board, the municipal governing body, shall devise guidelines directing for what purpose the appropriated money may be spent. These guidelines must provide generally that any funds appropriated must be used to benefit the customers of the municipal utility system. Any funds appropriated under this subdivision (a)(2) must be used and expended under the direction and control of the governing body of a municipality in conjunction with the guidelines and procedures set forth in this subdivision (a)(2)(B).
      3. A municipal utility system, whose revenues are devoted pursuant to this subdivision (a)(2), shall not raise rates on customers to cover contributions targeted for economic development efforts. The authorization in this subdivision (a)(2) only applies to municipal natural gas utility systems that are located in counties having a population of less than three hundred thirty-six thousand four hundred (336,400), according to the 2010 federal census and any subsequent federal census, and the authorization in this subdivision (a)(2) is in addition to any authorization as may be provided to municipal utility systems under otherwise applicable law.
   3. Any chamber of commerce, or economic and community organization, that seeks financial assistance from a municipal utility system pursuant to subdivision (a)(2) shall file with the city clerk a copy of an annual report of its business affairs and transactions that includes, but is not limited to:
      1. Either a copy of the entity's most recently completed annual audit or an annual report detailing all receipts and expenditures relative to the use of funds received from the municipal natural gas utility system in a form prescribed by the comptroller of the treasury and prepared and certified by the chief financial officer of the chamber of commerce or the economic and community organization;
      2. A description of how the financial assistance serves the municipal utility system and its customers; and
      3. The proposed use of the municipal utility system's contributions.
   4. The annual report filed pursuant to subdivision (a)(3) must be open for public inspection during regular business hours at the city clerk's office.
   5. Financial reports must be available to fiscal officers of the municipality and are subject to audit under § 6-56-105.
   6. Appropriations to chambers of commerce, or economic and community organizations, may be made only after notices have been published either on the website of the municipality, if possible, or in a newspaper of general circulation of the intent to make an appropriation to a chamber of commerce, or economic and community organization, specifying the intended amount of the appropriation and the purposes for which the appropriation will be spent.
2. Any surplus remaining, after establishment of proper reserves, if any, shall be devoted solely to the reduction of rates.
3. In the event a municipality establishes a pension plan for employees of public works, expenditures incident to inaugurating and maintaining such plan shall be deemed an operating expense for purposes of this section.
4. In computing the equity investment of the municipality, the value of the public works shall be taken as its historical cost. The payment of bonds or the acquisition or improvement of property from the receipts derived from a public works or any other operation of the public works as such shall not be considered to increase the equity investment of the municipality.
5. Nothing in this section shall be construed to limit the power of the municipality to make contracts with the purchasers of bonds:
   1. As to the use and disposition of the revenues otherwise than as set forth in subsection (a);
   2. As to the order of application of such revenues; or
   3. As to limitations on the amount of payments to the municipality either as a return on the equity investment of the municipality, if any, or as a payment in lieu of taxes.
6. If a municipality violates this section, it must repay any funds illegally transferred. If the municipality does not have sufficient funds to repay any funds illegally transferred, the municipality is required to submit a plan covering a period not to exceed five (5) years in which to repay the funds. The plan shall be submitted to and approved by the comptroller of the treasury or the comptroller's designee. Upon discovery of such violation through an audit, any city official in violation of this section is subject to ouster under title 8, chapter 47.
7. Nothing in this section shall preclude a local government from being entitled to receive from a utility the amount of direct and properly allocated and disclosed indirect operating expenses incurred by the municipality on behalf of the utility.
8. To the extent of any conflict between this section and § 7-39-404, or chapter 52, part 3 of this title, § 7-39-404, or chapter 52, part 3 of this title shall control.
9. 1. In addition to the authority granted under otherwise applicable law, a municipality operating a municipal utility system may, acting through the authorization of the board or supervisory body having responsibility for the municipal utility system, accept and distribute excess receipts for bona fide charitable purposes pursuant to programs approved by the board or supervisory body, which programs may include, but are not limited to, programs in which utility bills are rounded up to the next dollar when the amount of any excess receipt due to rounding is shown as a separate line on the utility bill.
   2. Excess receipts accepted by a municipal utility system pursuant to programs authorized by subdivision (i)(1) are not considered revenue to the municipal utility system, and the municipality may only use the excess receipts for charitable purposes.
   3. For purposes of this subsection (i):
      1. “Charitable purpose” means a purpose that provides relief to the poor or underprivileged, advances education or science, addresses community deterioration, provides community assistance, assists in economic development, provides for the erection of public buildings, monuments, or works, assists in historic preservation, or promotes social welfare through nonprofit or governmental organizations designed to accomplish any of the purposes listed in this subdivision (i)(3); and
      2. “Opt-out basis” means automatically enrolling customers in a program and requiring notice from the customer of a desire to be removed from the program in order to cease participation in the program.
   4. 1. A municipal utility system that establishes a program authorized by subdivision (i)(1) on or after January 1, 2021, shall not enroll any customer into the program without the express consent of the customer.
      2. A customer who is enrolled in a program authorized by subdivision (i)(1) may opt out of the program by providing notice to the utility of the customer's desire to cease participation in the program.
      3. Upon receiving an opt-out notice from a customer, the utility shall remove the customer from enrollment in the program no later than the first day of the customer's next regular billing cycle that begins no fewer than thirty (30) days after the date of the customer's opt-out notice.
   5. 1. Any municipal utility system that on June 3, 2019, utilizes a program authorized by subdivision (i)(1) and operates the program on an opt-out basis shall send a written notice to each municipal utility system customer no later than November 1, 2020, that contains, but is not limited to, the following information:
         1. A statement that the municipal utility system utilizes a program authorized by subdivision (i)(1), the program is operated on an opt-out basis, and a description of the program;
         2. Notification that a customer whose bill is currently rounded up by the utility has the right to opt out of participation in the program; and
         3. Contact information for the utility and instructions on how the customer may contact the utility to opt out of participation in the program.
      2. The written notice required by this subdivision (i)(5) may be provided to the customer by electronic means and may accompany a regular billing statement, at the discretion of the municipal utility system.
      3. A municipal utility system that on June 3, 2019, utilizes a program authorized by subdivision (i)(1) and operates the program on an opt-out basis that fails to send the notice required by this subdivision (i)(5) shall, on and after January 1, 2021, cease operating the program on an opt-out basis and shall not operate a program unless operated in compliance with subdivision (i)(4).
   6. Any municipal utility system that utilizes a program authorized by subdivision (i)(1) and that maintains a website that is accessible by the general public shall publish in a conspicuous location on the website by November 1, 2020, and throughout the duration of the municipal utility system's utilization of the program, the following information:
      1. A statement that the municipal utility system utilizes a program authorized by subdivision (i)(1) and a description of the program;
      2. Notification that a customer whose bill is currently rounded up by the utility has the right to opt out of participation in the program; and
      3. Contact information for the utility and instructions on how the customer may contact the utility to opt into or out of participation in the program.
10. 1. The governing body of a municipal utility system subject to this section that supervises, controls, or operates a public water or public sewer system, including, but not limited to, those systems using a separate utility board pursuant to any public or private act, must meet the training and continuing education requirements in this subsection (j).
    2. All members of the municipal utility board of commissioners shall, within one (1) year of initial appointment or election to the board of commissioners or within one (1) year of reappointment or reelection to the board of commissioners, attend a minimum of twelve (12) hours of training and continuing education in one (1) or more of the subjects listed in subdivision (j)(4).
    3. 1. In each continuing education period after the initial training and continuing education required by subdivision (j)(2), a municipal utility board commissioner shall attend a minimum of twelve (12) hours of training and continuing education in one (1) or more of the subjects listed in subdivision (j)(4).
       2. For the purposes of this subsection (j) and subsection (k), “continuing education period” means a period of three (3) years beginning January 1 after the calendar year in which a municipal utility board commissioner completes the training and continuing education requirements set forth in subdivision (j)(2) and each succeeding three-year period thereafter.
    4. The subjects for the training and continuing education required by this subsection (j) shall include, but not be limited to, board governance, financial oversight, policy-making responsibilities, and other topics reasonably related to the duties of the members of the board of commissioners of a municipal utility.
    5. Any association or organization with appropriate knowledge and experience may prepare a training and continuing education curriculum for municipal utility board commissioners covering the subjects set forth in subdivision (j)(4) to be submitted to the comptroller of the treasury for review and approval prior to use. The comptroller shall file a copy of approved training and continuing education curriculum with the water and wastewater financing board. Changes and updates to the curriculum must be submitted to the comptroller for approval prior to use. Any training and continuing education curriculum approved by the comptroller must be updated every three (3) years and resubmitted to the comptroller for review and approval.
    6. For purposes of this subsection (j), a municipal utility board commissioner may request a training and continuing education extension of up to six (6) months from the comptroller of the treasury or the comptroller's designee. The request shall only be granted upon a reasonable showing of substantial compliance with this subsection (j). If the extension is granted, the municipal utility board commissioner must complete any additional required training hours necessary to achieve full compliance for only the relevant continuing education period within the extension period. The municipal utility board commissioner shall file copies of any extension request letters and corresponding comptroller of the treasury determination letters with the water and wastewater financing board.
    7. 1. Beginning no later than March 1, 2019, the comptroller of the treasury shall offer online training and continuing education courses for purposes of compliance with this subsection (j).
       2. Any association or organization with appropriate knowledge and experience may prepare an online training and continuing education curriculum for municipal utility board commissioners covering the subjects set forth in subdivision (j)(4) to be submitted to the comptroller of the treasury for review and approval prior to use.
       3. The comptroller of the treasury shall file a copy of approved online training and continuing education curriculum with the water and wastewater financing board. Changes and updates to the curriculum must be submitted to the comptroller of the treasury for approval prior to use. Any online training and continuing education curriculum approved by the comptroller of the treasury must be updated every three (3) years and resubmitted to the comptroller of the treasury for review and approval.
       4. Any person required to complete training and continuing education under this subsection (j) may take one (1) or more of such online courses in lieu of attending training and continuing education courses in person.
       5. The online training and continuing education provider shall provide a certificate of completion or attendance that shall be submitted by the municipal utility board commissioner to the municipality. Each municipality shall keep the certificate of completion or attendance for six (6) years after the calendar year in which the certificate of completion or attendance is submitted.
11. If any member of a municipal utility board of commissioners fails to meet the training and continuing education requirements set forth in subsection (j) before the end of the continuing education period or before the end of any extension approved by the comptroller of the treasury or the comptroller's designee, then the water and wastewater financing board shall have full discretion to order reasonable sanctions against the municipality, including, but not limited to, the municipality being ineligible to receive assistance from the Tennessee local development authority under § 68-221-1206(a)(3).
12. Notwithstanding any other law to the contrary, a municipal utility system providing water, sewer, or natural gas service has the power to enter into agreements with companies to provide water, sewer, or natural gas leak protection bill coverage, insurance, or service agreements for customers and to offer their customers water line, sewer line, or natural gas line damage protection coverage, insurance, or service agreements for customer-owned water, sewer, or natural gas lines. The municipal utility system may include the costs for the coverage, insurance, or service agreements on the monthly utility bills of their customers.

Acts 1935 (Ex. Sess.), ch. 33, § 11; 1949, ch. 43, § 1; C. Supp. 1950, § 4406.52 (Williams, § 4406.44); Acts 1969, ch. 335, § 2; T.C.A. (orig. ed.), § 6-1315; Acts 1986, ch. 533, § 1; 1993, ch. 509, § 1; 1998, ch. 763, § 1; 2003, ch. 181, § 1; 2010, ch. 868, § 18; 2014, ch. 628, §§ 1-4; 2017, ch. 118, § 1; 2018, ch. 956, § 1; 2018, ch. 1003, § 1; 2019, ch. 41, § 1; 2019, ch. 228, § 1; 2019, ch. 508, § 1; 2020, ch. 791, §§ 1, 2.

Amendments. The 2017 amendment added (j) and (k).

The 2018 amendment by ch. 956, added (j)(7).

The 2018 amendment by ch. 1003, added (a)(2).

The 2019 amendment by ch. 41, rewrote (j)(7)(E), which read: “Beginning no later than March 1, 2019, the comptroller of the treasury shall offer online training and continuing education courses for purposes of compliance with this subsection (j).”

The 2019 amendment by ch. 228, added (l ).

The 2019 amendment by ch. 508, rewrote (i), which read: “(1) In addition to the authority granted under otherwise applicable law, a municipality operating a municipal utility system has the power and is authorized, acting through the authorization of the board or supervisory body having responsibility for the municipal utility system, to accept and distribute voluntary contributions for bona fide charitable purposes pursuant to programs approved by the board or supervisory body, which programs may include, but shall not be limited to, programs in which utility bills are rounded up to the next dollar when such contribution is shown as a separate line on the utility bill. (2)  Contributions accepted by a municipal utility system pursuant to programs authorized by subdivision (i)(1) shall not be considered revenue to the municipal utility system, and such contributions shall be used only for charitable purposes. (3)  For purposes of this subsection (i), a “charitable purpose” is one that provides relief to the poor or underprivileged, advances education or science, addresses community deterioration, provides community assistance, assists in economic development, provides for the erection of public buildings, monuments or works, assists in historic preservation, or promotes social welfare through nonprofit or governmental organizations designed to accomplish any of the purposes listed in this subdivision (i)(3).”

The 2020 amendment effective January 1, 2021, rewrote (a)(2) which read: “Notwithstanding subdivision (a)(1) or any other law to the contrary, if the municipal utility system is a natural gas utility system, the municipal utility board with management responsibility for the municipal utility system or, if there is no such board, the municipal governing body, may also devote revenues derived from the system to funding chambers of commerce and economic and community organizations in accordance with an ordinance or resolution adopted by the governing body of the municipality. A municipal utility system whose revenues are devoted pursuant to this subdivision (a)(2) shall not raise rates on customers to cover contributions targeted for economic development efforts. The authorization provided in this subdivision (a)(2) shall only apply to municipal natural gas utility systems that are located in counties having a population of less than three hundred thirty-six thousand four hundred (336,400) according to the 2010 federal census, and the authorization provided in this subdivision (a)(2) is in addition to such authorization as may be provided to municipal utility systems under otherwise applicable law.”; and added (a)(3) – (6).

Effective Dates. Acts 2017, ch. 118, § 6. April 12, 2017.

Acts 2018, ch. 956, § 2. May 15, 2018.

Acts 2018, ch. 1003, § 2. May 21, 2018.

Acts 2019, ch. 41, § 2. March 22, 2019.

Acts 2019, ch. 228, § 4. April 30, 2019.

Acts 2019, ch. 508, § 6. June 3, 2019.

Acts 2020, ch. 791, § 3. January 1, 2021.

Cross-References. Powers in carrying out purposes, § 7-82-304.

Attorney General Opinions. Discount utility rates to charitable organizations, OAG 97-127, 1997 Tenn. AG LEXIS 160 (9/08/97).

Municipal authority to charge residents never connected to water system, OAG 98-0152, 1998 Tenn. AG LEXIS 152 (8/12/98).

Discount rates for charitable organizations not authorized, OAG 99-026, 1999 Tenn. AG LEXIS 25 (2/16/99).

7-34-116. Exemption from taxation.

1. So long as a municipality owns any public works, the property and revenue of such public works shall be exempt from all state, county and municipal taxation.
2. Bonds and the income from bonds issued pursuant to this chapter shall be exempt from all state, county and municipal taxation, except inheritance, transfer and estate taxes.

Acts 1935 (Ex. Sess.), ch. 33, § 12; C. Supp. 1950, § 4406.53 (Williams, § 4406.45); T.C.A. (orig. ed.), § 6-1316.

7-34-117. Exemption from Tennessee public utility commission jurisdiction.

No requirements or provisions of this chapter shall be construed so as to deprive any municipality issuing bonds pursuant to this chapter of the exemption previously granted to municipalities from the jurisdiction of the Tennessee public utility commission.

Acts 1935 (Ex. Sess.), ch. 33, § 17; 1937, ch. 230, § 4; C. Supp. 1950, § 4406.58 (Williams, § 4406.50); impl. am. Acts 1955, ch. 69, § 1; T.C.A. (orig. ed.), § 6-1317; Acts 1995, ch. 305, § 74; 2017, ch. 94, § 10.

Amendments. The 2017 amendment substituted “Tennessee public utility commission” for “Tennessee regulatory authority” at the end of the section.

Effective Dates. Acts 2017, ch. 94, § 83. April 4, 2017.

Cross-References. Municipal gas companies exempt, § 7-39-311.

Municipalities exempt from regulation, §§ 7-34-106, 7-39-311.

Law Reviews.

Symposium – Memphis in The Law: The Process of Determining What Process is Due: The Continuing Saga of Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1 (1978) (Donna Harkness), 41 U. Mem. L. Rev. 745 (2011).

Collateral References.

Public utility acts, applicability of, to municipal corporations owning or operating a public utility. 10 A.L.R. 1432, 18 A.L.R. 946.

7-34-118. Supplemental nature of chapter.

The powers conferred by this chapter shall be in addition and supplemental to, and the limitations imposed by this chapter shall not affect, the powers conferred by any other general, special or local law. Public works may be acquired, purchased, constructed, reconstructed, improved, bettered, and extended, and bonds may be issued under this chapter for such purposes, notwithstanding that any general, special or local law may provide for the acquisition, purchase, construction, reconstruction, improvement, betterment and extension of like public works, or the issuance of bonds for like purposes, and without regard to the requirements, restrictions, limitations or other provisions contained in any other general, special or local law, including, but not limited to, any requirement for the approval by the voters of any municipality.

Acts 1935 (Ex. Sess.), ch. 33, § 18; C. Supp. 1950, § 4406.59 (Williams, § 4406.51); T.C.A. (orig. ed.), § 6-1318.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal, State and County Securities, § 10.

Part 1
Eminent Domain

7-36-101. Short title.

This chapter shall be known and may be cited as the “Municipal Energy Authority Act”.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-102. Chapter definitions.

As used in this chapter:

1. “Acquire” means to construct or to acquire by purchase, lease, lease-purchase, devise, gift, exercise of the power of eminent domain, or exercise of any other mode of acquisition;
2. “Associated municipality” means a municipality that is located in a county having a population of three hundred thirty-five thousand (335,000) or less, according to the 2010 federal census or any subsequent federal census, and that, as of the date an authority is formed under this chapter, operates an electric system under the authority of chapter 52 of this title; the municipality's charter; or otherwise applicable law;
3. “Authority” means an authority created pursuant to this chapter;
4. “Board” means the board of directors of the authority;
5. “Bonds” means bonds, interim certificates, notes, debentures, lease-purchase agreements, and all other evidences of indebtedness either issued by or the payment of which has been assumed by the authority;
6. “Dispose” means to sell, lease, convey, or otherwise transfer any property or any interest in property of the authority;
7. “Electric service” means the furnishing of electric power and energy for lighting, heating, power, or any other purpose for which electric power and energy can be used;
8. “Energy” means any and all forms of energy no matter how or where generated or produced;
9. “Federal agency” means the United States, the president of the United States, the Tennessee Valley authority, and any other authority, agency, instrumentality, or corporation of the United States;
10. “Governing body” means the legislative body of the associated municipality creating an authority pursuant to this chapter or, as applicable in § 7-36-110, the legislative body of another municipality;
11. “Improve” means to construct, reconstruct, repair, extend, enlarge, or alter;
12. “Improvement” means any extension, betterment, or addition to any system;
13. “Municipal bonds” means bonds of the associated municipality issued to finance or refinance any of the systems;
14. “Municipal electric system” means the electric system division or department of the associated municipality;
15. “Municipality” means any county or incorporated city or town within or outside this state;
16. “Person” means any natural person, firm, association, corporation, limited liability company, business trust, partnership, or governmental entity;
17. “Refunding bonds” means bonds of the authority issued to refund all or any part of bonds of the authority or the municipal bonds;
18. “Supervisory board” means the board of public utilities or other similar body of the associated municipality, as such board is constituted as of the date an authority is formed pursuant to this chapter;
19. “System” means any plant, works, facility, property, or parts thereof, together with all appurtenances thereto, used or useful in connection with the furnishing of any of the services and commodities authorized to be provided in this chapter, including generation or production facilities, transmission facilities, storage facilities, and distribution facilities, and all real and personal property of every nature comprising part of or used or useful in connection with a “system”, and all appurtenances, contracts, leases, franchises, and other intangibles relating to a “system”;
20. “Telecommunications service” means telephone, cable television, voice, data, or video transmissions, video programming, Internet access and related services, load control, meter reading, appliance monitoring, power exchange, and billing, or any other telecommunications services or similar or component service that may be provided, as allowed by law, including servicing and repairing related equipment, regardless of the facilities used;
21. “Wastewater service” means the collection, transportation, and treatment of water discharged from residential, commercial, industrial, or other processes for final discharge to the environment; and
22. “Water service” means the procurement, treatment, and distribution of water for domestic use or any other purpose for which water can be used.

Acts 2016, ch. 995, § 1; 2017, ch. 446, §§ 1-3.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Compiler's Notes. For U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

2017 Amendments.  The 2017 amendment, in the definition of “Associated municipality”, deleted “has adopted home rule, that” preceding “is located in”, substituted “three hundred thirty-five thousand (335,000)” for “one hundred fifty thousand (150,000)” following “population of”, and substituted “this title; the municipality's charter;” for “this title, the municipality's home rule charter,” following “chapter 52 of”; in the definition of “System”, inserted “storage facilities,” preceding “and distribution facilities”; and added definitions of “Wastewater service”; and “Water service”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-103. Formation of authority.

1. If the governing body of an associated municipality, by appropriate resolution, duly adopted by a two-thirds (2/3) or greater vote, finds and determines that it is wise, expedient, necessary, or advisable that an authority be formed, it shall authorize the mayor of the associated municipality or other person to proceed to form an authority, and shall approve the form of certificate of incorporation proposed to be used in organizing the authority, and then the mayor or other person authorized by the resolution shall execute, acknowledge, and file a certificate of incorporation for the corporation as provided in this chapter.
2. No authority may be formed pursuant to this chapter unless the governing body has adopted a resolution as provided in this section.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-104. Certificate of incorporation.

1. The certificate of incorporation shall set forth:
   1. The name of the authority;
   2. A recital that permission to organize the authority has been granted by resolution duly adopted by the governing body of the associated municipality and the date of the adoption of the resolution;
   3. The location of the principal office of the authority;
   4. The purposes for which the authority is proposed to be organized;
   5. The number of directors of the authority;
   6. The period for the duration of the authority, if other than perpetual; and
   7. Any other matter that the governing body of the associated municipality may choose to insert in the certificate of incorporation, which shall not be inconsistent with this chapter or with the laws of this state. It shall not be necessary to set forth in the certificate of incorporation the powers enumerated in this chapter.
2. The certificate of incorporation shall be acknowledged by the mayor of the associated municipality or other person authorized by the resolution described in § 7-36-103 before an officer authorized by the laws of this state to take acknowledgments of deeds.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-105. Filing and approval of certificate of incorporation — Creation of authority — Corporate name.

1. When executed and acknowledged in conformity with § 7-36-104, the certificate of incorporation shall be filed with the secretary of state. The secretary of state shall examine the certificate of incorporation and, if the secretary of state finds that the recitals contained in the certificate of incorporation are correct, that the requirements of § 7-36-104 have been complied with, and that the name is not identical with or so nearly similar to that of another entity already in existence in this state as to lead to confusion and uncertainty, then the secretary of state shall approve the certificate of incorporation and record it in an appropriate book of record in the secretary of state's office.
2. When the certificate has been made, filed, and approved, the corporate existence shall begin, and the certificate shall be conclusive evidence that the authority has been formed pursuant to this chapter.
3. Upon its formation, a governmental authority shall be created and constituted. The authority shall be a public corporation under the corporate name set forth in its certificate of incorporation, and shall under that name be a political subdivision of this state and a body politic and corporate. The authority shall be for the purpose of planning, acquiring, constructing, improving, furnishing, equipping, financing, owning, operating, and maintaining electric, water, and wastewater systems, and telecommunications systems as are specified in its certificate of incorporation. The authority may provide such services within or outside the corporate limits of the associated municipality and within or outside this state.
4. An authority may elect to adopt one (1) or more assumed corporate names other than its true corporate name. Before conducting affairs in this state under an assumed corporate name or names, the authority shall, for each assumed corporate name, pursuant to resolution by its board of directors, execute and file an application with the secretary of state setting forth the true corporate name of the authority as stated in its certificate of incorporation, that the authority intends to transact business under an assumed corporate name, and the assumed corporate name which it proposes to use. An authority may, by resolution of its board of directors, amend or withdraw any of its assumed corporate names by filing notice of such amendment or withdrawal with the secretary of state.

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 4.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments.  The 2017 amendment, in (c), substituted “electric, water, and wastewater systems,” for “electric utility” preceding “and telecommunications systems” and inserted “as are specified in its certificate of incorporation. The authority may provide such services” preceding “within or outside”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016. Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-106. Amendment of certificate of incorporation.

1. The certificate of incorporation may, at any time, be amended so as to make any changes in the certificate of incorporation and add any provisions to the certificate of incorporation that might have been included in the original certificate of incorporation.
2. An amendment to the certificate of incorporation shall be effected in the following manner:
   1. The members of the board of directors of the authority shall file with the governing body of the associated municipality an application in writing seeking permission to amend the certificate of incorporation, specifying in such application the amendment proposed to be made;
   2. The governing body shall consider the application and, if it shall, by appropriate resolution, duly find and determine that it is wise, expedient, necessary, or advisable that the proposed amendment be made and shall authorize the amendment to be made and shall approve the form of the proposed amendment, then the persons making application shall execute an instrument embodying the amendment specified in the application, and shall file the application with the secretary of state;
   3. The proposed amendment shall be subscribed and acknowledged by each member of the board of directors before an officer authorized by the laws of this state to take acknowledgments to deeds; and
   4. The secretary of state shall examine the proposed amendment and, if the secretary of state finds that the requirements of this section have been complied with and the proposed amendment is within the scope of what might be included in an original certificate of incorporation pursuant to § 7-36-104, then the secretary of state shall approve the amendment and record it in an appropriate book in the secretary of state's office.
3. When an amendment has been made, filed, and approved, it shall become effective and the certificate of incorporation shall be amended pursuant to subsection (b) to the extent provided in the amendment.
4. No certificate of incorporation shall be amended except in the manner provided in this section.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-107. Powers of authority.

1. The authority is authorized, effective immediately upon the effective date of its formation, either singly or jointly with one (1) or more persons, municipalities, or federal agencies, or with this state, or with one (1) or more agencies or instrumentalities of this state or any municipality:
   1. To sue and be sued;
   2. To have a seal and alter the same at pleasure;
   3. To acquire, construct, improve, furnish, equip, finance, own, operate, and maintain within or outside the corporate limits of the associated municipality, a system for the furnishing of electrical service and to provide electric service to any person, governmental entity, or other user or consumer of electric services within or outside the associated municipality. The system shall be operated as a financially separate system independent of, and financially separate from, the other utility systems of the authority, and, except to the extent the authority succeeds to the rights and powers of the municipal electric system, the authority shall not exercise any of the powers granted in this subdivision (a)(3) wholly or partly within the legal boundaries of an incorporated city or town or electric cooperative, except as allowed by law;
   4. To acquire, construct, improve, furnish, equip, finance, own, operate, and maintain, within or outside the corporate limits of the associated municipality, a system for the furnishing of water service and to provide water service to any person, governmental entity, or other user or consumer of water services within or outside the associated municipality; provided, the system shall be operated as a financially separate system independent of, and financially separate from, the other utility systems of the authority and managed by the water division of the authority; and provided, further, the authority shall not exercise any of the powers granted in this subdivision (a)(4) wholly or partly within the legal boundaries of a utility district incorporated pursuant to the Utility District Act of 1937, compiled in chapter 82 of this title, or any other municipality, except to the extent the authority succeeds to the rights and powers of a municipal water system or except as allowed by law, without the consent of the governing body of such utility district or municipality;
   5. To acquire, construct, improve, furnish, equip, finance, own, operate, and maintain within or outside the corporate limits of the associated municipality, a system for providing wastewater service to any person, governmental entity, or other user or consumer of wastewater services within and outside the associated municipality; provided, the system shall be operated as a financially separate system independent of, and financially separate from, the other utility systems of the authority and managed by the wastewater division of the authority; and provided, further, the authority shall not exercise any of the powers granted in this subdivision (a)(5) wholly or partly within the legal boundaries of a utility district incorporated pursuant to the Utility District Act of 1937, or any other municipality, except to the extent the authority succeeds to the rights and powers of the municipal wastewater system or except as allowed by law, without the consent of the governing body of such utility district or municipality;
   6. To acquire, construct, improve, furnish, equip, finance, own, operate, and maintain within and outside the corporate limits of the associated municipality, a system for the furnishing of telecommunications service and to provide telecommunications service to any person, governmental entity, or other user or consumer of telecommunications services within or outside the associated municipality. The system shall be operated as a financially separate system independent of, and financially separate from, the other utility systems of the authority; provided:
      1. To the extent that the authority, or any joint venture, partnership, or cooperative arrangement of which the authority is a party, or any limited liability company or not-for-profit corporation of which the authority is a member provides telephone or telegraph services, the authority, or such other entity, shall be subject to regulation by the Tennessee public utility commission in the same manner and to the same extent as other certified providers of such services, including, but not limited to, rules or orders governing anticompetitive practices, and shall be considered as and have the duties of a public utility, as defined in § 65-4-101, but only to the extent necessary to effect such duties and only with respect to the authority's provision of telephone and telegraph services;
      2. The authority shall have all the powers and authority conferred upon municipalities by §§ 7-52-401; 7-52-402; 7-52-403; 7-52-405; 7-52-406; 7-52-601 — 7-52-605, but excluding any requirement under § 7-52-603(a)(1)(A) to create multiple divisions for telecommunications services; and §§ 7-52-609 — 7-52-611. In the exercise of such powers, the authority shall be subject to all the obligations, restrictions, and limitations imposed upon municipalities by those sections and imposed upon providers of the services described in those sections by federal law. All actions authorized by those sections to be taken by the board or supervisory body having responsibility for a municipal electric plant shall be authorized to be taken by the board of directors of the authority and all powers granted to a municipal electric system under those statutes shall be exercised by the electric division of the authority;
      3. Nothing in this subdivision (a)(6) operates to restrict or impair in any way the ability of the authority to acquire, construct, improve, furnish, equip, finance, own, operate, and maintain a telecommunications system or to offer or provide telecommunications services through one (1) or more other systems of the authority, if such system and services are related to the provision of services of such system or the operation of the system, including, without limitation, load control, meter reading, appliance monitoring, power exchange, billing, or any other similar or component service; and
      4. Notwithstanding this chapter to the contrary, the authority shall be subject to the territorial limitations set forth in § 7-52-601 in the same manner and to the same extent as such limitations apply from time to time to a municipal electric system providing services pursuant to § 7-52-601;
   7. To fix, levy, charge, and collect fees, rents, tolls, or other charges for the use of, or in connection with, any system of the authority as shall be consistent with the provision of the services pursuant to this chapter or sale or other disposition of the commodities provided by the various utilities authorized in this section based on cost, sound economy, public good, and prudent business operations, which fees, rents, tolls, or charges shall be established by the board without the necessity of review or approval by any other municipality, the state, or any commission or authority thereof or any federal agency other than as provided in federal statutes or contracts and other than as provided in subdivision (a)(6). Whenever any fees, rents, tolls, or other charges for telephone or telegraph services regulated pursuant to subdivision (a)(6) are to change, such fees, rents, tolls, or charges shall be established by the board and be subject to review and approval by the Tennessee public utility commission in the same manner and to the same extent as other certified providers of such services;
   8. To acquire, hold, own, and dispose of property, real and personal, tangible and intangible, or interests therein, in its own name, subject to mortgages or other liens or otherwise and to pay for property in cash or on credit through installment payments, and to secure the payment of all or any part of any installment obligations in connection with any acquisition;
   9. To have complete control and supervision of any system of the authority and to make such rules governing the rendering of service thereby as may be just and reasonable;
   10. To contract debts, borrow money, issue bonds, and enter into lease-purchase agreements to acquire, construct, improve, furnish, equip, extend, operate, or maintain any system, or any part thereof, or to provide the authority's share of the funding for any joint undertaking or project, and to assume and agree to pay any indebtedness incurred for any of the purposes described in this subdivision (a)(10);
   11. To accept gifts or grants of money or property, real or personal, and voluntary and uncompensated services or other financial assistance from any person, state agency, federal agency, or municipality, for, or in aid of, the acquisition or improvement of any system;
   12. 1. To accept and distribute excess receipts for bona fide economic development or community assistance purposes pursuant to programs approved by the board, which programs may include, but are not limited to, programs in which bills to customers are rounded up to the next dollar when the amount of any excess receipt due to rounding is shown as a separate line on the bill, and excess receipts accepted pursuant to such programs are not considered revenue to the authority, and the authority may only use the excess receipts for economic development or community assistance purposes;
       2. 1. An authority that establishes a program authorized by subdivision (a)(12)(A) on or after January 1, 2021, shall not enroll any customer into the program without the express consent of the customer;
          2. A customer who is enrolled in a program authorized by subdivision (a)(12)(A) may opt out of the program by providing notice to the authority of the customer's desire to cease participation in the program;
          3. Upon receiving an opt-out notice from a customer, the authority shall remove the customer from enrollment in the program no later than the first day of the customer's next regular billing cycle that begins no fewer than thirty (30) days after the date of the customer's opt-out notice;
       3. 1. Any authority that on June 3, 2019, utilizes a program authorized by subdivision (a)(12)(A) and operates the program on an opt-out basis shall send a written notice to each customer of the authority no later than November 1, 2020, that contains, but is not limited to, the following information:
             1. A statement that the authority utilizes a program authorized by subdivision (a)(12)(A), the program is operated on an opt-out basis, and a description of the program;
             2. Notification that a customer whose bill is currently rounded up by the authority has the right to opt out of participation in the program; and
             3. Contact information for the authority and instructions on how the customer may contact the authority to opt out of participation in the program;
          2. The written notice required by this subdivision (a)(12)(C) may be provided to the customer by electronic means and may accompany a regular billing statement, at the discretion of the authority;
          3. A municipal utility system that on June 3, 2019, utilizes a program authorized by subdivision (a)(12)(A) and operates the program on an opt-out basis that fails to send the notice required by this subdivision (a)(12)(C) shall, on and after January 1, 2021, cease operating the program on an opt-out basis and shall not operate a program unless operated in compliance with subdivision (a)(12)(B); and
          4. For purposes of this subdivision (a)(12), “opt-out basis” means automatically enrolling customers in a program and requiring notice from the customer of a desire to be removed from the program in order to cease participation in the program; and
       4. Any authority that utilizes a program authorized by subdivision (a)(12)(A) and that maintains a website that is accessible by the general public shall publish in a conspicuous location on the website by November 1, 2020, and throughout the duration of the authority's utilization of the program, the following information:
          1. A statement that the authority utilizes a program authorized by subdivision (a)(12)(A) and a description of the program;
          2. Notification that a customer whose bill is currently rounded up by the authority has the right to opt out of participation in the program; and
          3. Contact information for the utility and instructions on how the customer may contact the utility to opt into or out of participation in the program;
   13. To condemn either the fee or such right, title, interest, or easement in property as the board may deem necessary for any of the purposes mentioned in this chapter, and such property or interest in such property may be so acquired whether or not the same is owned or held for public use by corporations, associations, or persons having the power of eminent domain, or otherwise held or used for public purposes, and such power of condemnation may be exercised in the method of procedure prescribed by title 29, chapter 16, or in the method of procedure prescribed by any other applicable statutory provisions for the exercise of the power of eminent domain; provided, however, that where title to any property sought to be condemned is defective, it shall be passed by decree of court. Where condemnation proceedings become necessary, the court in which such proceedings are filed shall, upon application by the authority and upon the posting of a bond with the clerk of the court in such amount as the court may deem commensurate with the value of the property, order that the right of possession shall issue immediately or as soon and upon such terms as the court, in its discretion, may deem proper and just;
   14. To make and execute any contract and instrument necessary or convenient for the full exercise of the powers granted in this section, and in connection therewith to stipulate and agree to such covenants, terms, and conditions, and such term or duration as shall be appropriate, including, without limitation, contracts for the purchase or sale of any of the commodities or services authorized in this section to be provided by the authority, and carry out and perform the covenants, terms, and conditions of such contracts and instruments. In connection with any contract to acquire or sell any of the commodities or services authorized in this section, the authority may enter into commodity price exchange or swap agreements, agreements establishing price floors or ceilings, or both, or other price hedging contracts with any person or entity under such terms and conditions as the authority may determine, including, without limitation, provisions permitting the authority to indemnify or otherwise pay any person or entity for any loss of benefits under such agreement upon early termination thereof or default thereunder. When entering into any such contract or arrangement or any such swap, exchange, or hedging agreement evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the authority may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over the authority shall lie solely in the courts sitting in the county where the authority's principal office is located. Nothing in the selection of laws of another state or nation shall alter, impair, or modify the rights, privileges, and obligations of the authority as a governmental entity under this chapter and under the laws of this state;
   15. To sell, exchange, or interchange any of the commodities or services authorized to be provided in this section either within or outside this state and to establish prices to be paid for such commodities or services, and establish pricing structures with respect thereto, including provision for price rebates, discounts, and dividends; and, in connection with any such sales, exchanges, or interchanges, to act as agent for such consumers, to secure contracts and arrangements with other entities or persons, to make contracts for the sale, exchange, interchange, pooling, transmission, storage, or distribution of any of the commodities or services authorized to be provided in this section, inside or outside this state, and to transmit, transport, and distribute any such commodities or services both for itself and on behalf of others;
   16. To make contracts and execute instruments containing such covenants, terms, and conditions as may be necessary, proper, or advisable for the purpose of obtaining loans from any source, or grants, loans, or other financial assistance from the state or any federal agency, and to carry out and perform the covenants and terms and conditions of all such contracts and instruments;
   17. To enter on any lands, waters, and premises for the purpose of making surveys, soundings, and examinations in connection with the acquisition, improvement, operation, or maintenance of any system and the furnishing of any of the services authorized to be provided in this section;
   18. To use any right-of-way, easement, or other similar property right necessary or convenient in connection with the acquisition, improvement, operation, or maintenance of one (1) or more systems, held by this state, the associated municipality, or any other municipality; provided, that such other municipality shall consent to such use;
   19. To provide to any municipality, person, federal agency, this state, or any agency or instrumentality thereof, transmission, storage, or transportation capacity for any of the commodities or services authorized in this section, and management and purchasing services associated therewith;
   20. To employ, engage, retain, and pay compensation to such officers, agents, consultants, professionals, and employees of the authority as shall be necessary to operate the systems, manage the affairs of the authority, and otherwise further the purposes of the authority and the exercise of the powers thereof, and to fix their compensation and to establish a program of employee benefits, including a retirement system;
   21. To establish a retirement system for all employees of the authority and to maintain all rights and benefits of employees as they existed under the retirement system of the municipal electric system without diminution;
   22. To enter into joint ventures and cooperative arrangements with one (1) or more persons, including the formation of a partnership, limited liability company, or not-for-profit corporation to accomplish any of the purposes set forth in this section or to exercise any of the powers set forth in this section;
   23. Upon proper action by the associated municipality, to commence operating the systems and to exercise exclusive control and direction of the systems and, upon proper action by the associated municipality, to accept title to the assets and assume the liabilities of the systems, and upon such action to hold all the rights as existed with the municipal electric system without diminution;
   24. To do business under one (1) or more assumed corporate names pursuant to § 7-36-105(d);
   25. To manage and operate utility systems owned by other persons. Such management or operating agreements shall be consistent with subdivision (a)(3), as applicable;
   26. To enter into mutual aid agreements with other utility systems and other persons;
   27. To assist persons to whom the authority sells electric power, energy, water, wastewater, or telecommunications in installing fixtures, appliances, apparatus, and equipment of all kinds and character and, in connection therewith, to purchase, acquire, lease, sell, distribute, make loans, provide service contracts, and repair such fixtures, appliances, apparatus, and equipment and sell, assign, transfer, endorse, pledge, and otherwise dispose of notes or other evidences of indebtedness any and all types of security therefor;
   28. To have such powers as are now or hereafter authorized for municipal electric, water, and wastewater utilities within this state; and
   29. To do any act authorized in this section or necessary or convenient to carry out the powers expressly given in this chapter under, through, or by means of its own officers, agents, and employees, or by contracts with any person, federal agency, or municipality.
2. The authority's water and wastewater systems shall have all the powers, authority, duties, obligations, requirements, and oversight that are conferred and imposed upon municipalities and a municipality's water and wastewater system in title 68, chapter 221. All actions authorized and required by title 68, chapter 221 to be taken by the board or supervisory body having responsibility for a municipality's water or wastewater system shall be authorized to be taken by the board of directors of the authority, and all powers, authority, duties, obligations, requirements, and oversight granted to and required of a municipality's water and wastewater system under title 68, chapter 221 shall be exercised by the water and wastewater divisions of the authority.

Acts 2016, ch. 995, § 1; 2017, ch. 94, §§ 11, 79; 2017, ch. 446, §§ 5-11; 2019, ch. 508, § 2.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Amendments. The 2017 amendment by ch. 94, substituted “Tennessee public utility commission” for “Tennessee regulatory authority” near the middle of (4)(A); and in the second sentence of (5).

The 2017 amendment by ch. 446, designated the existing language as (a); added present (a)(4) and (a)(5); redesignated former (4) through (27) as present (a)(6) through (a)(29); in present (a)(6)(C), substituted “operates” for “shall operate” preceding “to restrict”, “one (1) or more other systems of the authority” for “its electric system” following “through”, “services of such system or the operation of the system” for “electric service or the operation of the electric system” following “the provision of”; in present (a)(7), substituted “subdivision (6)” for “subdivision (4)” twice; in present (a)(15), inserted “storage,” preceding “or distribution”; in present (a)(19), inserted “storage,” preceding “or transportation”; in present (a)(27), inserted “the authority sells” following “to whom”, “water, wastewater, or telecommunications” for “or telecommunications is sold” preceding “in installing”, and “types” for “type” preceding “of security”; in present (28), substituted “municipal electric, water, and wastewater utilities” for “electric systems of municipalities,” following “authorized for”; and added (b).

The 2019 amendment rewrote (a)(12) which read, “To accept and distribute voluntary contributions for bona fide economic development or community assistance purposes pursuant to programs approved by the board, which programs may include, but shall not be limited to, programs in which bills to customers are rounded up to the next dollar when such contribution is shown as a separate line on the bill, and contributions accepted pursuant to such programs shall not be considered revenue to the authority and such contributions shall be used only for economic development or community assistance purposes;”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 94, § 83. April 4, 2017.

Acts 2017, ch. 446, § 19. May 25, 2017.

Acts 2019, ch. 508, § 6. June 3, 2019.

7-36-108. Independent operation of utility system.

Each system of the authority shall operate independently of the others and shall be self-sustaining, except insofar as the board may by resolution combine any of the systems which, in the opinion of the board, shall be advisable and economical and which by the general laws of the state or any federal laws or any contracts or indentures are not required to be operated separately. Telecommunications service shall continue to be maintained as a separate division pursuant to § 7-36-107(a)(6).

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 12.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments. The 2017 amendment deleted “utility” preceding “system” and substituted “insofar as the board may by resolution combine any of the systems which, in the opinion of the board, shall be advisable and economical and which by the general laws of the state or any federal laws or any contracts or indentures are not required to be operated separately. Telecommunications service shall continue to be maintained as a separate division pursuant to § 7-36-107(6)” for “as otherwise provided in this chapter” at the end.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-109. Powers of board of directors.

1. The affairs of the authority and the exercise of the powers of the authority shall be vested in the board of directors. The following powers shall be exercised directly by the board by resolution of the board:
   1. Selection and employment of the president, who shall serve as the chief executive officer of the authority, who shall serve at the pleasure of the board, and whose compensation shall be set by the board. Nothing in this chapter shall prevent the board from entering into an employment contract with the president. The president shall select, employ, and discharge all employees and fix their duties and compensation;
   2. Issuance of bonds of the authority and the encumbering of assets of the authority, to the extent authorized in this chapter, to secure any such bonds;
   3. Approval of rates of each of the systems;
   4. Approval of the annual budget of each of the systems;
   5. Adoption of bylaws for the conduct of the business of the board;
   6. Selection of any certified public accountant to perform audits of the books and affairs of the authority; and
   7. Adoption of a purchasing policy for the authority and the approval of purchases and disposition of property in accordance with the terms thereof.
2. All other powers of the authority shall be exercised by the president of the authority and the officers, agents, and employees of the authority, except as otherwise provided in this chapter.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-110. Appointment of directors — Chair and vice chair — Meetings — Removal from office.

1. The initial board of directors of the authority shall be composed of the members of the board of directors of the supervisory board, who shall serve as directors for the unexpired terms of their appointment to the board of directors of the supervisory board and who shall take office and begin exercising the powers granted in this section immediately upon the registration date of the certificate of incorporation.
2. All subsequent appointments shall be for four-year terms, or such other term length as may be set forth in the certificate of incorporation, commencing upon the expiration of the prior director's specific term. Except as otherwise provided in the certificate of incorporation, the board of directors shall fill vacancies, subject to the approval of the governing body of the associated municipality, or such governing body of another municipality having appointment power for a member of the supervisory board at the time the authority is formed. In the event the applicable governing body does not approve the person thus appointed by the board of directors, the board of directors shall appoint some other person, subject to the approval of the applicable governing body. The composition and manner of the appointment for members of the board of directors set forth in this section may be modified pursuant to the certificate of incorporation or an amendment to the certificate of incorporation; provided, that the applicable governing body having a power of appointment shall approve any provision of the certificate of incorporation or amendment that eliminates its power of appointment. The associated municipality shall, at all times, have authority to approve no less than a majority of the members of the board of directors.
3. The board of directors and the applicable governing body shall, as applicable and in accordance with this section, within ninety (90) days, fill each vacancy created by the death, resignation, or removal of any director and gain approval of the applicable governing body, and such director shall serve for the remaining unexpired term of the former director.
4. Except as provided in subsection (g), each director shall hold office until the director's successor is appointed, approved, and qualified, and each director shall be eligible for reappointment unless otherwise provided in the certificate of incorporation.
5. Immediately upon their qualification as a board, and at least annually thereafter, the board of directors shall select from the board's membership a chair and a vice chair. No additional compensation shall be paid to a director for serving as a chair or vice chair. The board shall have a recording secretary, who need not be a member of the board and who shall be appointed by the president, subject to the approval of the board. The recording secretary shall record all minutes of the board, keep and maintain all books and records of the board, and perform other duties as the president shall determine.
6. The board shall hold regular monthly meetings and special meetings as may be necessary for the transaction of the business of the authority. Special meetings of the board may be called by the chair or, in the absence or disability of the chair, by any board member. No meeting of the board shall be held unless a majority of the directors are present. All acts of the board shall be by a vote of at least a majority of the directors eligible to vote on a matter. Resolutions of the board shall be effective upon adoption after one (1) reading and may be adopted at the same meeting at which the resolutions are introduced. The time and place of all meetings will be set by the board. The board of directors shall be allowed necessary traveling and other expenses while engaged in the business of the board, plus an allowance for attendance at meetings in the same manner and to the same extent as is provided for directors of municipal electric systems under § 7-52-110(e). Such expenses shall constitute a cost of operation and maintenance of the authority.
7. Any director may be removed from office for cause upon a vote of two-thirds (2/3) of the members of the governing body of the applicable approving governing body, but only after preferment of formal charges by resolution of a majority of the members of the governing body.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-111. President.

1. The board shall appoint a president, as provided in § 7-36-109(a)(1), who shall be chief executive officer of the authority. The salary of the president shall be fixed by the board, and the board may enter into an employment contract with the president for a term of no more than five (5) years containing such terms as the board may deem advisable. The president may be removed by the board, subject to any provisions contained in an employment contract with the president.
2. Within the limits of the funds available, and subject to exercise by the board of the powers reserved to it pursuant to § 7-36-109, all powers of the authority granted in this chapter shall be exercised by the president and the various officers and employees of the authority.
3. The president shall have charge of the management and operation of the systems and the enforcement and execution of all rules, regulations, programs, plans, and decisions made or adopted by the board.
4. The president shall appoint each system division head and all officers of the authority, and the president or the president's designee shall hire all employees of the authority. All officers and employees of the authority shall serve at the pleasure of the president, and the president shall be responsible for maintaining an adequate workforce for the authority.
5. Subject to §§ 7-36-109 and 7-36-112, the president is authorized to acquire and dispose of all property, real and personal, necessary to effectuate this chapter. The title of such property shall be taken in the name of the authority.
6. All contracts, agreements, indentures, trust agreements, and other instruments necessary or proper in carrying out the purposes and powers of the authority or in conducting the affairs of the authority or in operating the systems of the authority shall be executed by the president, the president's designee, or such other officer or person as may be authorized by the board, the signature thereof to be binding upon the authority. The execution by the president, the president's designee, or such other officer or person as may be authorized by the board of any such contract, agreement, indenture, trust agreement, or instrument implementing or evidencing the exercise of powers reserved to the board pursuant to § 7-36-109 shall first be approved by resolution of the board.
7. The president shall cause to be kept full and proper books and records of all operations and affairs of the authority and shall cause to be kept separate books and accounts for each system, so that these books and accounts will reflect the financial condition of each division separately, and may require that the moneys and securities of each division be placed in separate funds to the end that each division shall be self-sustaining. All divisions shall be audited annually by an independent certified public accountant selected by the board.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-112. Policy governing purchases of services or property, leases and lease-purchases, and disposition of property — Power to dispose of electric plant.

1. The board shall adopt a policy governing all purchases of services or property, whether real or personal, all leases and lease-purchases, and the disposition of all property of the authority. The policy shall authorize the president, the president's designee, or such other officer or person as may be authorized by the board, to enter into contracts and agreements for the purchase of services or property, real or personal, leases and lease-purchases, disposition of property of the authority with a value not exceeding an amount from time to time established by the board but not less than fifty thousand dollars ($50,000), and providing for board approval for such purchases, leases, lease-purchases, and dispositions in excess of such amount. Subject to the terms of the purchasing policy relating to board approval, the president, the president's designee, or such other officer or person as may be authorized by the board, on behalf of the authority, shall be authorized to execute all contracts, purchase orders, and other documents necessary in connection with the purchase of property or services and the disposition of property of the authority, including deeds of conveyance of real property. The policy authorized by this subsection (a) shall provide for competitive bidding, but may provide exceptions to any competitive bidding requirements where exceptions are provided to municipalities, municipal electric systems, municipal utilities, or energy acquisition corporations under the general law. The purchasing policy may also provide procedures for documentation of compliance with purchasing procedures and such other provisions and terms as the board deems necessary.
2. Notwithstanding this chapter to the contrary, the authority does not have any power to dispose of all or substantially all of the electric, water, or wastewater system of the authority, as applicable, except upon the concurrence and consent of the governing body of the associated municipality and, in the case of the disposition of the electric plant of the authority, except upon the further approval of a majority of those voting in a referendum called by the governing body of the associated municipality in accordance with § 7-52-132. For purposes of establishing compliance with § 7-52-132, the board is deemed the “supervisory body,” the electric plant of the authority is deemed an “electric plant,” and such compliance shall be determined in the same manner and to the same extent as if the authority were operated as the electric system of the associated municipality.

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 13.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments. The 2017 amendment, in (b), substituted “does” for “shall” preceding “not have”, “electric, water, or wastewater system of the authority, as applicable,” for “electric plant of the authority” preceding “except upon the concurrence”, substituted “and, in the case of the disposition of the electric plant of the authority, except upon the further” for “and upon” preceding “approval”, and twice substituted “is” for “shall be” preceding “deemed”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-113. Issuance of bonds — Proceeds of sale of bonds.

1. The authority shall have power and is authorized to issue its bonds for the construction, acquisition, reconstruction, improvement, betterment, or extension of any system of the authority or to assume and to agree to pay any indebtedness incurred for any of the foregoing purposes. The proceeds of the sale of any bonds may be applied to:
   1. The payment of the costs of such construction, acquisition, reconstruction, improvement, betterment, or extension;
   2. The payment of the costs associated with any such construction, acquisition, reconstruction, improvement, betterment, or extension, including engineering, architectural, inspection, legal, and accounting expenses;
   3. The payment of the costs of issuance of such bonds, including underwriter's discount, financial advisory fee, preparation of the definitive bonds, preparation of all public offering and marketing materials, advertising, credit enhancement, and legal, accounting, fiscal, and other similar expenses;
   4. The payment of interest during the period of construction and for six (6) months thereafter on any money borrowed or estimated to be borrowed;
   5. Reimbursement of the authority for moneys previously spent by the authority for any of the purposes described in subdivisions (a)(1)-(4);
   6. The establishment of reasonable reserves for the payment of debt service on such bonds, or for repair and replacement to the system of the authority for whose benefit the financing is being undertaken, or for such other purposes as the board deems necessary in connection with the issuance of any bonds and operation of the system for whose benefit the financing is being undertaken;
   7. The contribution of the authority's share of the funding for any joint undertaking for the purposes set forth in this subsection (a); and
   8. The contribution by the authority to any subsidiary or separate entity controlled by the authority for the purposes set forth in this subsection (a).
2. The authority shall have the power and is authorized to issue its bonds to refund and refinance outstanding bonds of the authority hereafter issued or lawfully assumed by the authority. The proceeds of the sale of the bonds may be applied to:
   1. The payment of the principal amount of the bonds being refunded and refinanced;
   2. The payment of the redemption premium thereon, if any;
   3. The payment of unpaid interest on the bonds being refunded, including interest in arrears, for the payment of which sufficient funds are not available, to the date of delivery or exchange of the refunding bonds;
   4. The payment of interest on the bonds being refunded and refinanced from the date of delivery of the refunding bonds to maturity or to, and including, the first or any subsequent available redemption date or dates on which the bonds being refunded may be called for redemption;
   5. The payment of the costs of issuance of the refunding bonds, including underwriter's discount, financial advisory fee, preparation of the definitive bonds, preparation of all public offering and marketing materials, advertising, credit enhancement, and legal, accounting, fiscal, and other similar expenses, and the costs of refunding the outstanding bonds, including the costs of establishing an escrow for the retirement of the outstanding bonds, trustee, and escrow agent fees in connection with any escrow, and accounting, legal, and other professional fees in connection therewith; and
   6. The establishment of reasonable reserves for the payment of debt service on the refunding bonds, or for repair and replacement to the system of the authority for whose benefit the financing is being undertaken, or for such other purposes as shall be deemed necessary in connection with the issuance of the refunding bonds and operation of the system for whose benefit the financing is being undertaken. Refunding bonds may be issued to refinance and refund more than one (1) issue of outstanding bonds, notwithstanding that such outstanding bonds may have been issued at different times. Refunding bonds may be issued jointly with other refunding bonds or other bonds of the authority. The principal proceeds from the sale of refunding bonds may be applied either to the immediate payment and retirement of the bonds being refunded or, to the extent not required for the immediate payment of the bonds being refunded, to the deposit in escrow with a bank or trust company to provide for the payment and retirement at a later date of the bonds being refunded.
3. The authority shall have the power and is authorized to issue its bonds to retire all bonds of the associated municipality issued to finance or refinance any of the systems, and, to the extent permitted by contracts with any of the owners of the municipal bonds, to assume and agree to pay when due the municipal bonds, retire the municipal bonds, or deposit in escrow funds sufficient, together with earnings thereon, to retire the municipal bonds at maturity or upon redemption. The proceeds of such bonds may be used in the same manner and to the same extent as permitted under subsection (b).
4. The authority has the power and is authorized to issue notes in anticipation of the collection of revenues from the system for whose benefit the financing is undertaken for the purpose of financing electrical power purchases, including transmission costs, storage costs, and pipeline capacity costs. Any such notes must be secured solely by a pledge of, and lien on, the revenues of the system for whose benefit the financing is undertaken. The principal amount of notes that may be issued during any twelve-month period must not exceed sixty percent (60%) of total electrical power purchases for the same period, and all notes issued during such period must be retired and paid in full on, or before, the end of such period. The notes must be sold in such manner, at such price, and upon such terms and conditions as may be determined by the board. No notes shall be issued under this subsection (d) unless the electric system has positive retained earnings as shown in the most recent audited financial statements of the system, and the system has produced positive net income in at least one (1) fiscal year out of the three (3) fiscal years next preceding the issuance of the notes as shown on the audited financial statements of the system. No notes issued under this subsection (d) shall be issued without first being approved by the comptroller of the treasury. If revenues of such system are insufficient to pay all such notes at maturity, any unpaid notes may be renewed one (1) time for a period not to exceed one (1) year or otherwise liquidated as approved by the comptroller of the treasury.
5. The authority shall have the power and is authorized to issue its bonds to finance in whole or in part the cost of the acquisition of electrical power purchased from the Tennessee Valley authority on a current or long-term prepaid purchase basis and pledge to the punctual payment of any such bonds and interest thereon its rights in such contracts and an amount of the revenues from its electric system, or of any part of such system, sufficient to pay the bonds and interest as the same shall become due and create and maintain reasonable reserves therefor. Such amount shall consist of all or any part or portion of such revenue; and the board in determining the cost of the acquisition of electrical power under this subsection (e) may include all costs and estimated costs of the issuance of the bonds, and all engineering, inspection, fiscal, and legal expenses.
6. Bonds issued under this section as a part of an issue the last maturity of which is not later than five (5) years following the date of issue shall be issued, and referred to, as notes.

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 14.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments. The 2017 amendment, in (d), in the first sentence, substituted “has the power and is authorized” for “shall have the power” preceding “to issue” and substituted “transmission costs, storage costs, and pipeline capacity costs” for “transmission costs” at the end; in the second sentence, substituted “must for “shall”  preceding “be secured” and “ system. for whose benefit the financing is undertaken” for “electric system” at the end; in the third sentence, substituted “that” for “which” preceding “may be issued”; and in the fourth sentence, substituted “The notes must” for “The notes shall”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-114. Resolution authorizing issuance or assumption of bonds — Repurchase of bonds — Temporary bonds — Contract or agreement facilitating issuance and sale of bonds.

1. No bonds shall be issued or assumed under this chapter unless authorized to be issued or assumed by resolution of the board, which resolution may be adopted at the same meeting at which it is introduced by a majority of all members then in office, and shall take effect immediately upon adoption. Bonds authorized to be issued under this chapter may be issued in one (1) or more series, may bear such date, mature at such time, not exceeding forty (40) years from their respective dates, bear interest at such rate, payable at such time, be in such denominations, be in such form, either coupon or registered, be executed in such manner, be payable in such medium of payment, at such place, and be subject to such terms of redemption, with or without premium, as such resolution may provide. Bonds may be issued for money or property at competitive or negotiated sale for such price as the board, or its designee, shall determine.
2. Bonds may be repurchased by the authority out of any available funds at a price not to exceed the principal amount of the outstanding bonds and accrued interest, and all bonds so repurchased shall be cancelled or held as an investment of the authority as the board may determine.
3. Pending the preparation or execution of definitive bonds, interim receipts or certificates or temporary bonds may be delivered to the purchasers of bonds.
4. 1. With respect to all or any portion of any issue of bonds issued under this chapter, at any time during the term of the bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized in this subsection (d) are in compliance with the guidelines or rules promulgated by the state funding board, as set forth in § 7-34-109(h), the authority, by resolution of the board, may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the board may determine, including, without limitation, provisions permitting the authority to pay to, or receive from, any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement.
   2. The authority may enter into an agreement to sell bonds, other than its refunding bonds, under this chapter providing for delivery of its bonds on a date greater than ninety (90) days and not greater than five (5) years, or such greater period of time if approved by the comptroller of the treasury or the comptroller's designee, from the date of execution of such agreement or to sell its refunding bonds providing for delivery thereof on a date greater than ninety (90) days from the date of execution of the agreement and not greater than the first optional redemption date on which the bonds being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury, or the comptroller's designee, finding that the agreement or contract of the authority to sell its bonds as authorized in this subsection (d) is in compliance with rules promulgated by the state funding board in accordance with § 7-34-109(h). Agreements to sell bonds and refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement do not require a report of the comptroller of the treasury or the comptroller's designee.
   3. Prior to the adoption by the board of a resolution authorizing a contract or agreement described in subdivision (d)(1) or (d)(2), a request shall be submitted to the comptroller of the treasury, or the comptroller's designee, for a report finding that such contract or agreement is in compliance with the guidelines or rules of the state funding board. Within fifteen (15) days of receipt of the request, the comptroller of the treasury, or the comptroller's designee, shall determine whether the contract or agreement substantially complies with the guidelines or rules and shall report such compliance to the authority. If the report of the comptroller of the treasury, or the comptroller's designee, finds that the contract or agreement complies with the guidelines or rules of the state funding board, or the comptroller of the treasury, or the comptroller's designee, fails to report within the fifteen-day period, then the authority may take such action with respect to the proposed contract or agreement as it deems advisable in accordance with this section and the guidelines or rules of the state funding board. If the report of the comptroller of the treasury, or the comptroller's designee, finds that such contract or agreement is not in compliance with the guidelines or rules, then the authority is not authorized to enter into such contract or agreement. The rules shall provide for an appeal process upon a determination of noncompliance.
   4. When entering into any contract or agreement facilitating the issuance and sale of bonds, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, and agreements with the purchaser of the bonds, evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the authority may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over the authority shall lie solely in the courts sitting in the county where the authority's principal office is located. Nothing in the selection of laws of another state or nation shall alter, impair, or modify the rights, privileges, and obligations of the authority as a governmental entity under this chapter and under the laws of this state.
   5. Prior to the adoption or promulgation by the state funding board of rules with respect to the contracts and agreements authorized in subdivisions (d)(1) and (d)(2), the authority may enter into such contracts or agreements to the extent otherwise authorized by the laws of this state.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-115. Power to secure bonds and to covenant as to bonds.

1. In order to secure the payment of the principal and interest on the bonds issued under this chapter, or in connection with such bonds, the authority has the power to secure such bonds and to covenant as to the bonds as set forth in §§ 9-21-306 and 7-34-110.
2. In connection with the issuance of bonds and in order to secure the payment of its bonds, the authority shall have power:
   1. To pledge all or any part of its revenues;
   2. To vest in any trustee the right to enforce any covenant made to secure, to pay, or in relation to its bonds, to provide for the powers and duties of such trustee, to limit the liabilities thereof, and to provide the terms and conditions upon which the trustee or the holders of bonds or any amount or proportion of them may enforce any such covenant; and
   3. To make such covenants and to do such acts as may be necessary in order to secure its bonds or which, in the absolute discretion of the board, tend to make the bonds more marketable, notwithstanding that such covenants and acts may restrict or interfere with the exercise of the powers granted in this chapter. The authority shall be given the power to do all things in the issuance of bonds, and for their security, that a private business corporation can do under the laws of this state.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-116. Rights and remedies of bondholders.

In addition to all other rights and remedies, any holders of bonds of the authority, including a trustee for bondholders, shall have the right:

1. By mandamus or other suit, action, or proceeding at law or in equity, to enforce the bondholder's rights against the authority and the board of the authority, including the right to require the authority and such board to fix and collect rates and charges adequate to carry out any agreement as to, or pledge of, the revenues produced by such rates or charges, and to require the authority and such board to carry out any other covenant and agreement with such bondholders and to perform their duties under this chapter;
2. By action or suit in equity, to enjoin any acts which may be unlawful or a violation of the rights of such holder of bonds;
3. By suit, action, or proceeding in the chancery court sitting in the county in which the authority's principal office is located, to obtain an appointment of a receiver of any system of the authority or any part thereof. If such receiver be appointed, such receiver may enter and take possession of such system or part thereof and operate and maintain same, and collect and receive all fees, rents, tolls, or other charges arising therefrom in the same manner as the authority itself might do and shall dispose of such money in a separate account and apply the same in accordance with the obligations of the authority as the court shall direct; and
4. By suit, action, or proceeding in the chancery court sitting in the county in which the authority's principal office is located, to require the board of the authority to account as if it were the trustee of an express trust.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-117. Bond not debt of state, municipality, or other political subdivision of state.

No owner of any bonds issued under this chapter shall have the right to compel any exercise of the taxing powers of this state, the associated municipality, or any other municipality or political subdivision of this state to pay such bonds or the interest thereon. Each bond issued under this chapter shall recite in substance that such bond, including the interest thereon, is payable solely from the revenues pledged to the payment thereof, and that the bond does not constitute a debt of this state, any municipality, or any other political subdivision of this state.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-118. Validity of bonds.

Bonds issued under this chapter bearing the signature of the president or other authorized officer in office on the date of the signing thereof shall be valid and binding obligations; provided, that before the delivery thereof and payment therefor, any person whose signature appears thereon shall have ceased to be an officer. The validity of any bonds shall not be dependent on, or affected by, the validity or regularity of any proceedings relating to the acquisition or improvement of the system for which such bonds are issued. The resolution authorizing bonds may provide that the bonds shall contain a recital that the bonds are issued pursuant to this chapter, which recital shall be conclusive evidence of the bonds' validity and of the regularity of the bonds' issuance.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-119. Rates, fees, or other charges for services, facilities, and commodities.

1. The authority shall not be operated for gain or profit or primarily as a source of revenue to the associated municipality or any other person or entity. The authority shall, however, prescribe and collect rates, fees, or charges for the services, facilities, and commodities made available by the authority, and shall revise such rates, fees, or charges from time to time whenever necessary so that each system, or any combined systems as authorized in this chapter, shall be and always remain self-supporting, and shall not require appropriations by the associated municipality or any other municipality, this state, or any political subdivision of this state to carry out the authority's purpose. Any one (1) system of the authority shall not subsidize any other system, unless the systems are operated as a combined system in accordance with the terms of this chapter, in which case the combined system shall be self-supporting. The authority shall keep books and records as may be required to properly account for the reasonable distribution of joint or common expenses between the systems of the authority.
2. The rates, fees, or charges prescribed for each system shall be such as will produce revenue at least sufficient:
   1. To provide for the payment of all expenses of operation and maintenance of such system;
   2. To pay when due principal of, and interest on, all bonds of the authority payable from the revenues of such system;
   3. To pay any payments in lieu of taxes authorized to be paid pursuant to this chapter; and
   4. To establish proper reserves for the system.

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 15.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments. The 2017 amendment, in (a), inserted “from time to time” preceding “whenever necessary”, inserted “, or any combined systems as authorized in this chapter” following “each system”, inserted “be and always” preceding “remain”, and substituted “unless the systems are operated as a combined system in accordance with the terms of this chapter, in which case the combined system shall be self-supporting. The authority shall keep” for “and the authority shall keep such” preceding “books and records”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-120. Pledge of, or lien on, revenues, fees, rents, tolls, or other charges.

1. Any pledge of, or lien on, revenues, fees, rents, tolls, or other charges received or receivable by the authority to secure the payment of any bonds of the authority, and the interest thereon, shall be valid and binding from the time that the pledge or lien is created or granted and shall inure to the benefit of any owner of any such bonds until the payment in full of the principal thereof and premium and interest thereon. The priority of any pledge or lien with respect to competing pledges or liens shall be determined by the date such pledge or lien is created or granted. Neither the resolution nor any other instrument granting, creating, or giving notice of the pledge or lien need be filed or recorded to preserve or protect the validity or priority of such pledge or lien.
2. If a conflict arises between this section and the Perfection, Priority and Enforcement of Public Pledges and Liens Act, compiled in title 9, chapter 22, the Perfection, Priority and Enforcement of Public Pledges and Liens Act shall control.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-121. Tax exemption.

So long as the authority owns any of the systems, the property and revenue of such system shall be exempt from all state, county, and municipal taxation. Any bonds issued by the authority pursuant to this chapter, and the income therefrom, shall be exempt from all state, county, and municipal taxation, except inheritance, transfer and estate taxes, and except as otherwise provided by the laws of this state.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-122. Payments in lieu of taxes.

The authority is authorized to pay or cause to be paid from the revenues of each of the systems for each fiscal year payments in lieu of taxes to the associated municipality or such other municipality as shall properly receive said payments. Payments from the electric system revenues must be made and computed in accordance with the Municipal Electric Plant Law of 1935, compiled in chapter 52, part 1 of this title, and payments made from revenues of the telecommunication system must be made in accordance with §§ 7-52-404 and 7-52-606. Payments made from revenues of the water and wastewater systems must be made by agreement with the affected municipality. The authority shall make payments in lieu of taxes to the associated municipality, accruing from and after the effective date of the transfer of such system or systems from the associated municipality, from such system's revenues on the same basis as payments are currently being made by the supervisory body. The authority shall provide the associated municipality with a copy of its annual audited financial statements at the time each such annual payment is made and shall provide access to such financial information of the authority as is necessary for the associated municipality to review the basis for and amounts of payments required pursuant to this section. To the extent not otherwise addressed in chapter 52, parts 4 and 6 of this title, in connection with the provision of telecommunications service, the authority is subject to all other state and local fees and charges imposed upon private providers of telecommunications services.

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 16.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments. The 2017 amendment, in the second sentence, substituted “must” for “shall” twice, deleted “, part 1” following “chapter 52”, and substituted “telecommunication” for “telecommunications” preceding “system”; added the present third sentence; in the present fourth sentence, substituted “such system or systems” for “the electric system” following “transfer of”, “such system's” for “the electric system” preceding “revenues on”, and “body” for “board” at the end; and, in the last sentence, substituted “is” for “shall be” preceding “subject to” and “telecommunications” for “such” preceding “services”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-36-123. Deposit of moneys.

All moneys of the authority, from whatever source derived, shall be deposited in one (1) or more banks or trust companies and, to the extent required of political subdivisions of this state, such accounts shall be continuously insured by an agency of the federal government or secured by a pledge of direct obligations of the United States or of this state having an aggregate market value, exclusive of accrued interest, at all times at least equal to the balance on deposit in any such account. Such securities shall either be deposited with the authority or held by a trustee or agent satisfactory to the authority. In lieu of any pledge of such securities, the deposits may be secured by a surety bond, which shall be in form, sufficiency, and substance satisfactory to the authority.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-124. Investment of funds.

All funds of the authority are authorized to be invested as follows:

1. Direct obligations of the United States government or any of its agencies;
2. Obligations guaranteed as to principal and interest by the United States government or any of its agencies;
3. Certificates of deposit and other evidences of deposit at state and federally chartered banks, savings and loan institutions, or savings banks deposited and collateralized as described in § 7-36-123;
4. Repurchase agreements entered into with the United States or its agencies or with any bank, broker-dealer, or other such entity so long as the obligation of the obligated party is secured by a perfected pledge of full faith and credit obligations of the United States or its agencies;
5. Guaranteed investment contracts or similar agreements providing for a specified rate of return over a specified time period with entities rated, at the time of investment, in one (1) of the two (2) highest rating categories of a nationally recognized rating agency;
6. The local government investment pool created by title 9, chapter 4, part 7;
7. Direct general obligations of a state of the United States, or a political subdivision or instrumentality thereof, having general taxing powers and rated, at the time of investment, in either of the two (2) highest rating categories by a nationally recognized rating agency of such obligations;
8. Obligations of any state of the United States or a political subdivision or instrumentality thereof, secured solely by revenues received by, or on behalf of, the state or political subdivision or instrumentality thereof irrevocably pledged to the payment of the principal and interest on such obligations, rated, at the time of investment, in the two (2) highest rating categories by a nationally recognized rating agency of such obligations;
9. The authority's own bonds or notes; or
10. Any additional investments authorized to be made by a municipal electric system in this state.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-125. Assets after cessation of existence of authority.

If the authority ceases to exist, or in the event of the sale of all or substantially all of the assets of the electric system of the authority, all of its assets remaining after all of its obligations and liabilities have been satisfied or discharged shall pass to, and become the property of, the associated municipality.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-126. Authority as political subdivision for purposes of regulation of public utilities.

The authority is and shall be considered a political subdivision for purposes of title 65, chapter 4.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-127. Board as governing body for purposes of Open Meetings Act.

The board shall be considered a governing body for purposes of the open meetings act, compiled in title 8, chapter 44.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-128. Authority as governmental entity for purposes of Governmental Tort Liability Act.

The authority shall be considered a governmental entity for purposes of the Tennessee Governmental Tort Liability Act, compiled in title 29, chapter 20.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-129. Authority as public agency for purposes of Interlocal Cooperation Act.

The authority shall be considered a public agency for purposes of the Interlocal Cooperation Act, compiled in title 12, chapter 9.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-130. Authority as municipality, associated municipality, and governing body for purposes of Energy Acquisition Corporations Act.

The authority shall be considered a municipality for the purposes of the Energy Acquisition Corporations Act, compiled in chapter 39 of this title and may be an associated municipality of an energy acquisition corporation under such act, and the board shall be a governing body for purposes of such act.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-131. Powers conferred by chapter additional to other powers.

The powers conferred by this chapter shall be in addition, and supplemental, to the powers conferred by any other law.

Acts 2016, ch. 995, § 1.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

7-36-132. Transfer from associated municipality to authority.

1. The associated municipality is authorized to transfer to an authority created pursuant to this chapter all of the associated municipality's right, title, and interest in and all the assets of the municipal electric, water, wastewater, and telecommunications systems, or any one (1) or more of such systems, including all real and personal property, tangible or intangible, and any right or interest in any such property, whether or not subject to mortgages, liens, charges, or other encumbrances, and all appurtenances, contracts, leases, franchises, and other intangibles must be transferred to the authority. The transfer must be authorized by resolution of the governing body of the associated municipality adopted on one (1) reading and must be accomplished through documents and instruments authorized by the resolution and executed by the officers of the associated municipality as designated by the resolution. A transfer of an associated municipality's electric or telecommunications system to an authority in accordance with this subsection (a) is not a disposition of assets for purposes of § 7-52-132.
2. Upon formation of an authority pursuant to this chapter, a franchise is granted to the authority to provide within the corporate limits of the associated municipality any and all of the services that it is authorized to provide under applicable law and as set forth in its certificate of incorporation, subject to payment in lieu of taxes pursuant to § 7-36-122. Consistent with § 7-36-107(a)(6), the associated municipality may require such franchise or franchises for the provision of telecommunications services as are permitted under state or federal law.
3. Upon transfer of an electric, water, or wastewater system from an associated municipality to an authority and the assumption or satisfaction of all obligations of the supervisory board, the jurisdiction and control of the associated municipality and the supervisory board over such system must be transferred to the authority, and the supervisory board having oversight over such system shall cease to exist.
4. It is a condition of the transfer of a system from the associated municipality to the authority that upon the transfer the authority must either retire the associated municipality's bonds associated with such system by the payment of the bonds in full upon transfer, defease such associated municipality's bonds by depositing funds in irrevocable escrow for the payment of these bonds, or assume and agree to pay in full principal of and interest on such bonds of the associated municipality. Upon the assumption by the authority of the associated municipality bonds and its agreement to pay those bonds when due, the authority shall be fully obligated to pay when due, principal, premium, and interest with respect to those bonds with the same force and effect as if those bonds were issued by the authority. Bonds issued pursuant to this section must be secured by, and payable from, the revenues of the respective system in the same way as other bonds of the authority issued pursuant to this chapter. The transfer of each of the systems must be accomplished in such a manner as not to impair the obligations of contract with reference to the associated municipality's bonds and other legal obligations of the associated municipality and to preserve and protect the contract rights vested in the owners of such bonds and other obligations.

Acts 2016, ch. 995, § 1; 2017, ch. 446, § 17.

Code Commission Notes.

Acts 2016, ch. 995, § 1 enacted a new chapter 41, §§ 7-41-101 — 7-41-132,  but the chapter has been redesignated as chapter 36, §§ 7-36-101 — 7-36-132 by authority of the Code Commission.

2017 Amendments. The 2017 amendment substituted “must” for “shall” wherever it appears; in (a), in the first sentence, substituted “electric, water, wastewater, and telecommunications systems, or any one (1) or more of such systems” for “electric system and the telecommunications system, if any”, in the next to last sentence, substituted “the officers” for “such officers” following “executed by”, and in the last sentence, inserted “of an associated municipality's electric or telecommunications system” following “A transfer” and substituted “is not a” for “shall not be deemed” preceding “a disposition”; in (b), deleted “electric” following “any and all of the”, inserted “and as set forth in its certificate of incorporation” following “applicable law”, and substituted “§ 7-36-107(7)” for “§ 7-36-107(4)” following “Consistent with”; in (c), substituted “an electric, water, or wastewater system” for “the electric system” following “Upon transfer of” and inserted “having oversight over such system”; and, in (d), substituted “It is” for “It shall be”, “the transfer” for “such transfer” following “that upon”, and “of the bonds” for “thereof” following “by the payment”.

Effective Dates. Acts 2016, ch. 995, § 3. April 27, 2016.

Acts 2017, ch. 446, § 19. May 25, 2017.

7-37-101. Short title.

This chapter shall be known and may be cited as the “Industrial Building Revenue Bond Act of 1951.”

Acts 1951, ch. 137, § 1 (Williams, § 4406.53a); T.C.A. (orig. ed.), § 6-1701.

Cross-References. Lease of buildings and facilities authorized, title 12, ch. 2, part 3.

Limitation of actions on bonds, § 28-3-113.

Textbooks. Tennessee Jurisprudence, 8 Tenn. Juris., Counties, § 26; 19 Tenn. Juris., Municipal, State and County Aid, § 2.

Law Reviews.

Financing Industrial Development in the South, 14 Vand. L. Rev. 621 (1961).

7-37-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Governing body” means bodies and boards, by whatsoever names they may be known, charged with the governing of a municipality;
2. “Industrial building” means any one (1) or combination of buildings, structures or facilities leased, or to be leased, to an industrial or commercial concern by the municipality and used, or to be used, as a factory, mill, shop, assembly plant, processing plant, fabricating plant, ship canal, port or port facility, dock or dock facility, harbor facility, railroad, railway terminal, railway belt line, railway switching facility or office building or buildings for the use of such concern, including the industrial building site and any warehouse building or facility incidental to such industrial building, which may include any manufacturing, processing or building equipment or machinery necessary to the operation conducted, or to be conducted, in such industrial building by an industrial concern; provided, that the industrial building need not be, nor have been acquired, pursuant to this chapter. “Industrial building” does not include any office building or buildings constituting a single project and not connected to or combined with any other building, structure or facility defined in this subdivision (2) as an “industrial building”, unless such office building or buildings are leased to an industrial or commercial concern that, at the time of the issuance of bonds under this chapter, for the purpose of acquiring or constructing such office building or buildings, does not have in the municipality an existing office employing more than five (5) persons, and it is found by the governing body that the acquisition or construction and leasing of such office building or buildings will result in the creation of new employment for a substantial number of people residing in and around the municipality; and
3. “Municipality” means any incorporated city or town, county or a metropolitan government in this state.

Acts 1951, ch. 137, § 2 (Williams, § 4406.53b); 1955, ch. 344, § 1; 1957, ch. 257, § 1; 1959, ch. 152, § 1; 1961, ch. 129, § 1; 1965, ch. 198, § 1; T.C.A. (orig. ed.), § 6-1702; Acts 1988, ch. 750, § 23.

7-37-103. Purpose of chapter.

It is determined and declared that the purpose of this chapter is to relieve conditions of unemployment, to aid in the rehabilitation of returning veterans, and to encourage the increase of industry and commerce within this state, thereby reducing the evils attendant upon unemployment.

Acts 1951, ch. 137, § 3 (Williams, § 4406.53c); 1959, ch. 152, § 2; T.C.A. (orig. ed.), § 6-1703.

7-37-104. Powers of municipalities.

In addition to powers that it may now have, any municipality has the power under this chapter to:

1. Construct, acquire by gift or purchase, reconstruct, improve, better or extend any industrial building within or without the municipality or partially within or partially without the municipality, but in no event farther than ten (10) miles from the territorial boundaries of such municipality, and to acquire by gift, purchase or the exercise of the right of eminent domain lands or rights in land in connection with the industrial building; provided, that no county or metropolitan government has the power to construct, acquire by gift or purchase, reconstruct, improve, better or extend any industrial building outside the territorial limits of the county or metropolitan government;
2. Issue bonds to finance in whole or in part the cost of the acquisition, purchase, construction, reconstruction, improvement, betterment or extension of any industrial building. The governing body of the municipality in determining such cost may include all cost and estimated cost of the issuance of such bonds, all engineering, inspection, fiscal and legal expenses, and interest that it is estimated will accrue during the construction period and for six (6) months thereafter on money borrowed or that it is estimated will be borrowed pursuant to this chapter;
3. Rent or lease such industrial buildings to industrial or commercial concerns in such manner that rents to be charged for the use of the industrial buildings shall be fixed and revised from time to time so as to produce income and revenues sufficient to provide for the prompt payment of interest upon all bonds issued under this chapter and create a sinking fund to pay the principal of such bonds when due;
4. Pledge to the punctual payment of bonds authorized under this chapter and interest on the bonds the income and revenues to be received from such industrial buildings, including improvements, betterments, or extensions to the industrial buildings thereafter constructed or acquired, sufficient to pay the bonds and interest, as the bonds, and interest shall become due and to create and maintain reasonable reserves for the payment of the bonds and interest;
5. Mortgage or convey in trust any industrial building or buildings as defined in this chapter in favor of the holder or holders of bonds issued under this chapter;
6. Sell and convey such industrial buildings, including, but not limited to, the sale and conveyance of the industrial buildings subject to a mortgage as provided in this chapter, for such price and at such time as the governing body of the municipality may determine; no sale or conveyance of such industrial buildings shall ever be made in such manner as to impair the rights or interests of the holder or holders of any bonds secured by the industrial buildings;
7. Issue its bonds to refund in whole or in part, bonds theretofore issued by such municipality under authority of this chapter; and
8. Enter upon any lands, waters or premises, through its agents, servants, or employees, for the purpose of making surveys, soundings, or examinations, when necessary in order to carry out the purpose and objects of this chapter, doing no unnecessary damage. In the event any person is damaged by reason of any such entry, the municipality shall be liable to the person to the extent of damages actually sustained.

Acts 1951, ch. 137, § 4 (Williams, § 4406.53d); 1955, ch. 344, § 2; 1959, ch. 152, § 3; 1968, ch. 581, §§ 1, 2; T.C.A. (orig. ed.), § 6-1704; Acts 1988, ch. 750, § 24.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal Corporations, § 39.

7-37-105. Exemption from state regulation.

1. It is not necessary for any municipality proceeding under this chapter to obtain any certificate of convenience or necessity, franchise, license, permit, or other authorization from any bureau, board, commission, or other lay instrumentality of the state in order to acquire, construct, purchase, reconstruct, improve, better, or extend any industrial building or for the issuance of bonds in connection with the acquisition, construction, purchase, reconstruction, improvement, betterment, or extension of any industrial building.
2. No later than sixty (60) days after the date of any bond sale, pursuant to the provisions of the bond sale, the chief administrative officer of the municipality shall file with the office of the commissioner of economic and community development, industrial development division, the following information:
   1. The name of issuing municipality;
   2. The name of lessee;
   3. The total amount of the bond issue;
   4. The bond interest and maturity schedule; and
   5. The identity of the fiscal agent.

Acts 1951, ch. 137, § 13 (Williams, § 4406.53m); 1967, ch. 108, § 1; impl. am. Acts 1972, ch. 852, § 12; T.C.A. (orig. ed.), § 6-1705; Acts 1980, ch. 536, § 1.

7-37-106. Improvements and bonds authorized.

The construction, acquisition, reconstruction, improvement, betterment, or extension of any industrial buildings may be authorized under this chapter, and bonds may be authorized to be issued under this chapter to provide funds for such purpose or purposes or for the refunding of bonds theretofore issued under this chapter, by resolution or resolutions of the governing body, which may be adopted at the same meeting at which the bonds are introduced by a majority of all the members of the governing body then in office, and shall take effect immediately upon adoption. The bonds shall bear interest at such rate or rates, payable semiannually, may be in one (1) or more series, may bear such date or dates, may mature at such time or times not exceeding forty (40) years from their respective dates, may be payable in such medium of payment at such place or places, may carry such registration privileges, may be subject to such terms of redemption, may be executed in such manner, may contain such terms, covenants, and conditions, and may be in such form, coupon or registered, as such resolution or subsequent resolutions may provide.

Acts 1951, ch. 137, § 5 (Williams, § 4406.53e); 1969, ch. 152, § 1; 1969, ch. 284, § 6; T.C.A. (orig. ed.), § 6-1706.

7-37-107. Covenants permissible in bonds — Mortgage or deed of trust.

1. Any resolution authorizing the issuance of bonds under this chapter may contain covenants as to:
   1. The use and disposition of the rentals from the industrial building for which the bonds are to be issued, and from any other industrial buildings owned by the municipality at the time, including the creation and maintenance of reserves;
   2. The issuance of other or additional bonds payable from the income and revenues from such industrial building;
   3. The maintenance and repair of such industrial building;
   4. The insurance to be carried on the industrial building and the use and disposition of insurance moneys; and
   5. The terms and conditions upon which the holders of the bonds, or any portion of the bonds or any trustees for the bonds shall be entitled to the appointment of a receiver by the chancery court, which court shall have jurisdiction in such proceedings, and which receiver may enter and take possession of the industrial building and lease and maintain the building, prescribe rentals and collect, receive, and apply all income and revenues thereafter arising from the rentals, in the same manner and to the same extent as the municipality itself might do.
2. Any resolution authorizing the issuance of bonds under this chapter may provide that the principal of and interest on any bonds issued under this chapter shall be secured by a mortgage or deed of trust covering the industrial building for which the bonds are issued and from any other industrial building owned by the municipality at the time, and may include any improvements or extensions thereafter made. Such mortgage or deed of trust may contain such covenants and agreements to properly safeguard the bonds as may be provided for in the resolution authorizing the bonds, but not inconsistent with this chapter and shall be executed in the manner as may be provided for in the resolution. The provisions of this chapter and any such resolution or resolutions and any such mortgage or deed of trust shall be a contract with the holder or holders of the bonds and shall continue in effect until the principal of and the interest on the bonds so issued shall have been fully paid, and the duties of the municipality and its governing body and officers under this chapter, and any such resolution or resolutions and any such mortgage or deed of trust shall be enforceable by any bondholder by mandamus, foreclosure of any such mortgage or deed of trust or other appropriate suit, action or proceedings in any court of competent jurisdiction.

Acts 1951, ch. 137, § 7 (Williams, § 4406.53g); 1955, ch. 344, § 4; T.C.A. (orig. ed.), § 6-1707.

7-37-108. Lien on rentals.

All bonds issued under this chapter shall have a lien upon the rentals from the industrial building for which the bonds have been issued, and from any other industrial building securing the bonds pursuant to resolution, mortgage or deed of trust as provided in this chapter, and the governing body may provide in the resolution or resolutions authorizing such bonds for the issuance of additional bonds to be equally and ratably secured by a lien upon such rentals, or may provide that the lien upon such rentals for future bonds shall be subordinate.

Acts 1951, ch. 137, § 9 (Williams, § 4406.53i); 1955, ch. 344, § 5; T.C.A. (orig. ed.), § 6-1708.

7-37-109. Bonds not general obligation.

No holder or holders of any bonds issued under this chapter shall ever have the right to compel any exercise of taxing power of the municipality to pay the bonds or the interest on the bonds and the bonds shall not constitute an indebtedness of the municipality or a loan of credit of the bond within the meaning of any constitutional or statutory provision. It shall be plainly stated on the face of each bond that it has been issued under this chapter, and that it does not constitute an indebtedness of the municipality or a loan of credit of the bond within the meaning of any constitutional or statutory provision.

Acts 1951, ch. 137, § 10 (Williams, § 4406.53j); T.C.A. (orig. ed.), § 6-1709.

7-37-110. Election — Questions submitted — Declaration of result.

Prior to the delivery of and payment for any bonds authorized under this chapter, a three-fourths (¾) majority of the registered voters of such municipality voting at an election on the question of issuing such bonds shall approve of such bond issue; provided, that no such election shall be necessary in connection with the authorization of refunding bonds under this chapter. The governing body of the municipality shall, by resolution, direct the county election commission to hold the election and state the proposition to issue the bonds as it is to appear on the ballots. It shall not be necessary to submit to the voters any question other than the maximum amount of bonds to be issued and the purpose for the bonds, except that, if such bonds are to be secured by an industrial building, its rental or income, other than the industrial building for which the bonds are proposed to be issued, then the question of whether bonds so secured are to be issued shall be submitted to the voters. Upon receipt of the statement of the votes in the election from the county election commission, the governing body of the municipality, at or before its regular meeting, shall again canvass the returns and determine and declare the results of the election. The governing body shall enter upon its minutes the results and returns in the election, and the entry shall, after the delivery of and payment for any bonds voted upon at the election, be conclusive evidence of the result of the election, and no suit, action or other proceeding contesting the validity of such election shall be entertained in any of the courts of this state thereafter.

Acts 1951, ch. 137, § 6 (Williams, § 4406.53f); Acts 1955, ch. 344, § 3; 1972, ch. 740, § 4(25); T.C.A. (orig. ed.), § 6-1710.

Cross-References. General municipal elections, §§ 6-53-101 — 6-53-107.

7-37-111. Sale of bonds.

Bonds may be sold in such manner and upon such terms as may be deemed advisable by the governing body; provided, that bonds for refunding purposes shall not be sold at less than ninety-seven percent (97%) of par value and accrued interest.

Acts 1951, ch. 137, § 5 (Williams, § 4406.53e); 1969, ch. 152, § 2; 1969, ch. 284, § 7; T.C.A. (orig. ed.), § 6-1711; Acts 1988, ch. 750, § 25.

7-37-112. Interim financing — Certificates.

Pending the preparation of the definitive bonds, interim receipts or certificates in such form and with such provisions as the governing body may determine, may be issued to the purchaser or purchasers of bonds sold pursuant to this chapter. The bonds and interim receipts or certificates shall be fully negotiable within the meaning of and for all purposes of the Uniform Commercial Code, compiled in title 47, chapters 1–9.

Acts 1951, ch. 137, § 5 (Williams, § 4406.53e); modified; T.C.A. (orig. ed.), § 6-1712.

7-37-113. Validity of bonds.

Bonds bearing the signatures of officers in office on the date of the signing of the bonds shall be valid and binding obligations, notwithstanding that before the delivery of the bonds and payment for the bonds any or all the persons whose signatures appear on the bonds shall have ceased to be officers of the municipality issuing the bonds. The validity of the bonds shall not be dependent on nor affected by the validity or regularity of any proceedings relating to the acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of the industrial building for which the bonds are issued. The resolution authorizing the bonds may provide that the bonds shall contain a recital that they are issued pursuant to this chapter, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.

Acts 1951, ch. 137, § 8 (Williams, § 4406.53h); T.C.A. (orig. ed.), § 6-1713.

7-37-114. Tax exemption of bonds.

All bonds and the income from the bonds issued pursuant to this chapter shall be exempt from all state, county, and municipal taxation, except inheritance, transfer and estate taxes, except as otherwise provided in this code.

Acts 1951, ch. 137, § 12 (Williams, § 4406.53l ); T.C.A. (orig. ed.), § 6-1714; Acts 1988, ch. 750, § 26.

7-37-115. Rentals sufficient to pay bonds.

The governing body of a municipality issuing bonds pursuant to this chapter shall prescribe and collect rentals for industrial buildings, and shall revise the rentals from time to time whenever necessary so that the income and revenues to be derived from such rentals will always be sufficient to pay when due all bonds and interest on the bonds for the payment of which such revenues are pledged, including reserves for the payment of the bonds and interest on the bonds.

Acts 1951, ch. 137, § 11 (Williams, § 4406.53k); 1959, ch. 152, § 4; T.C.A. (orig. ed.), § 6-1715.

7-37-116. Supplemental nature of chapter.

The powers conferred by this chapter shall be in addition and supplemental to, and the limitations imposed by this chapter shall not affect the powers conferred by, any other general, special or local law. Industrial buildings may be acquired, purchased, constructed, reconstructed, improved, bettered, and extended, and bonds may be issued under this chapter for such purposes, notwithstanding that any general, special, or local law may provide for the acquisition, purchase, construction, reconstruction, improvement, betterment and extension of a like industrial building, or the issuance of bonds for like purposes, and without regard to the requirements, restrictions, limitation or other provisions contained in any other general, special or local law.

Acts 1951, ch. 137, § 14 (Williams, § 4406.53n); T.C.A. (orig. ed.), § 6-1716.

7-38-101. Formation.

Any number of persons, resident within a municipality, may form themselves into a company for the purpose of extinguishing fires, by having their names and objective recorded in the register's office of the county.

Code 1858, § 1706 (deriv. Acts 1831, ch. 27, § 1); Shan., § 3019; mod. Code 1932, § 5244; T.C.A. (orig. ed.), § 6-2401.

Cross-References. Commission on fire fighting personnel standards and education, title 4, ch. 24, part 1.

Rural fire protection equipment, title 4, ch. 31, part 5.

Attorney General Opinions. Requirement of local governments to provide police, fire, and medical services.  OAG 10-03, 2010 Tenn. AG LEXIS 3 (1/19/10).

7-38-102. Rules and regulations — Fines.

A company may make rules and regulations for their government, and may impose fines for nonattendance or other delinquencies, not exceeding twenty dollars ($20.00), upon their members, to be recovered in the name adopted for such company before any judge of the court of general sessions.

Code 1858, § 1707 (deriv. Acts 1831, ch. 27, § 1); Shan., § 3020; Code 1932, § 5245; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 6-2402.

7-38-103. Property.

The company may also procure fire engines, buckets, hooks, ladders, and all implements necessary for working such engines and carrying out the objectives of its formation, and may hold property, real or personal, sufficient for its purposes, and as a place for the keeping of the implements and meetings of its members.

Code 1858, § 1708 (deriv. Acts 1831, ch. 27, § 1); Shan., § 3021; Code 1932, § 5246; T.C.A. (orig. ed.), § 6-2403.

7-38-104. Exemption from military service.

The members of these companies, and the fire companies of any incorporated town or city are exempt from military duty in time of peace.

Code 1858, § 1709 (deriv. Acts 1831, ch. 27, § 2); Acts 1877, ch. 52, § 1; Shan., § 3022; Code 1932, § 5247; T.C.A. (orig. ed.), § 6-2404; Acts 2008, ch. 1159, § 2.

Part 1
General Provisions

7-40-101. Short title.

This chapter shall be known and may be cited as the “Border Region Retail Tourism Development District Act.”

Acts 2011, ch. 420, § 2.

Attorney General Opinions. The use of these sales tax funds in accordance with the Border Region Retail Tourism Development District Act constitutes a public purpose. Thus Article II, Sections 24 and 31, of the Tennessee Constitution do not prohibit the distribution of sales tax revenue as provided by the Act.  OAG 12-07, 2012 Tenn. AG LEXIS 4 (1/13/12).

7-40-102. Purpose.

The purpose of this chapter is to increase tourism and the competitiveness of this state with bordering states by empowering local governments to encourage the development of extraordinary retail or tourism facilities, including shopping, recreational, and other activities.

Acts 2011, ch. 420, § 3.

7-40-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Base tax revenues” means the revenues generated from the collection of state sales and use taxes from all businesses within the applicable border region retail tourism development district as of the end of the fiscal year of this state immediately prior to the year in which the municipality or industrial development corporation is entitled to receive an allocation of tax revenue pursuant to this chapter. In no event shall the apportionment pursuant to this chapter be adjusted to reduce the economic benefit to the municipality as is provided in this chapter;
2. “Best interests of the state” means a determination by the commissioner of revenue, with approval by the commissioner of economic and community development, that:
   1. The economic development project or extraordinary retail or tourism facility within the district is a result of the special allocation and distribution of state sales tax provided for in § 7-40-106; and
   2. The district is a result of the project or extraordinary retail or tourism facility;
3. “Border region retail tourism development district” or “district” means one (1) or more parcels of real property located within a municipality, some part of whose corporate limits borders a neighboring state, and which some boundary of a district is no more than one-half (½) mile from an existing federally-designated interstate exit, is no more than twelve (12) miles from a state border as measured by straight line, is no larger than a total area of nine hundred fifty (950) acres, and designated as a border region retail tourism development district by a municipal ordinance and certified by the commissioner;
4. “Commissioner” means the commissioner of revenue;
5. “Cost” means all cost of an economic development project in a district incurred by the municipality or industrial development corporation during the investment period, including, but not limited to, the cost of developing the district, as well as acquisition, design, construction, renovation, improvement, demolition, and relocation of any improvements; the cost of labor, materials, and equipment; the cost of all lands, property rights, easements and franchises required; financing charges, interest, and debt service prior to, during, or after construction; the cost of issuing bonds in connection with any financing, cost of plans and specifications, services and estimates of costs and of revenue; cost of direct or indirect assistance, including funds for location assistance; cost of site preparation, engineering, accounting, and legal services; all expenses necessary or incident to determining the feasibility or practicability of such acquisitions or constructions; salaries, overhead, and other costs of the municipality or industrial development corporation allocated to the project, including new development or subsequent phases of the project to be completed within the thirty-year period established in § 7-40-104(d), and administrative, legal, and engineering expenses and such other expenses as may be necessary or incident to such acquisition, design, construction, renovation, demolition, relocation, or the financing thereof, including any such costs incurred by a municipality or industrial development corporation relating to the development of an extraordinary retail or tourism facility within two (2) years prior to the municipality's designation of the proposed border region retail tourism development district for such project;
6. “Economic development project” or “project” means the provision of direct or indirect financial assistance, including funds for location assistance, to an extraordinary retail or tourism facility and other retail or tourism facilities developed to accompany the extraordinary retail or tourism facility in a border region retail tourism development district by a municipality or an industrial development corporation including, but not limited to, the purchase, lease, grant, construction, reconstruction, improvement, or other acquisition or conveyance of land, buildings or equipment, or other infrastructure; public works improvements essential to the location of an extraordinary retail or tourism facility and other retail or tourism facilities developed to accompany the extraordinary retail or tourism facility; payments for professional services contracts necessary for a municipality or industrial development corporation to implement a plan or project; the provision of direct loans or grants for land, buildings, or infrastructure; and loan guarantees securing the cost of land, buildings, location assistance, or infrastructure in an amount not to exceed the revenue that may be derived from the sales and use tax transferred to the municipality as provided in this chapter. It also includes development of parks, plazas, sidewalks, access ways, roads, drives, bridges, ramps, landscaping, signage, parking lots, parking structures, and other public improvements constructed or renovated by the municipality or an industrial development corporation in connection with the project in the district and any related infrastructure and utility improvements for public or private peripheral development for the district and which is constructed, renovated, or installed by the municipality or an industrial development corporation;
7. “Extraordinary retail or tourism facility” means a single store, series of stores, or other public tourism facility or facilities located within a border region retail tourism development district, or any combination of a single store, series of stores, or public tourism facility or facilities, and shall include retail or other public tourism facilities, or any combination of such retail and public tourism facilities that are reasonably anticipated to draw at least one million (1,000,000) visitors a year upon completion. The extraordinary retail or tourism facility shall reasonably be expected to require a capital investment of at least twenty million dollars ($20,000,000) including land, buildings, site preparation costs, and is reasonably anticipated to remit at least two million dollars ($2,000,000) in state sales and use tax, annually, when completed. The thresholds set forth in this subdivision (7) shall be met based on the performance or reasonably anticipated performance of the projects in the district as a whole, and the commissioner does not have the discretion to exclude consideration of the cost to develop any business in a district;
8. “Industrial development corporation” means a corporation created or authorized by a municipality or county pursuant to chapter 53 of this title;
9. “Investment period” means a period beginning two (2) years prior to the municipality's designation of the proposed border region retail tourism development district for the project and ending fifteen (15) years after certification of the district pursuant to § 7-40-104(a)(4);
10. “Municipal governing body” means the city council, city commission, or board of mayor and aldermen of a city; and
11. “Municipality” means an incorporated city located in this state.

Acts 2011, ch. 420, § 4; 2012, ch. 1092, §§ 1, 2; 2018, ch. 804, § 1; 2019, ch. 511, §§ 2, 5.

Compiler's Notes. Acts 2012, ch. 1092, § 5 provided that §§ 1-3 of the act, which amended  §§ 7-40-103 and 7-40-104, shall apply to every border region retail tourism development district, whether certified by the commissioner of revenue before or after May 21, 2012.

Acts 2019, ch. 511, § 9 provided that the act shall apply retroactively to any district certified prior to June 3, 2019. No such certified district shall be decertified as a result of the amendments to the Border Region Retail Tourism evelopment District Act, compiled in Title 7, Chapter 40, made by the act.

Amendments. The 2018 amendment substituted “fifteen (15) years” for “ten (10) years” in the definition of “investment period”.

The 2019 amendment, in (7), inserted “or any combination of a single store, series of stores, or public tourism facility or facilities,” following “development district,” inserted “, or any combination of such retail and public tourism facilities” following “tourism facilities”, and added the third sentence.

Effective Dates. Acts 2018, ch. 804, § 2. April 24, 2018.

Acts 2019, ch. 511, § 10. June 3, 2019.

7-40-104. Requirements for apportionment of state sales and use taxes.

1. To be entitled to receive the apportionment of state sales and use taxes as provided in this chapter, the requirements set forth in subdivisions (a)(1)-(4) shall be met.
   1. A municipal legislative body shall adopt an ordinance designating the boundaries of the border region retail tourism development district; provided, however, that no municipality shall contain more than one (1) such district.
   2. The municipality shall then file a certified copy of the ordinance with the commissioner along with a request for certification of the district. The request shall include a master development plan for the proposed district containing such information as may be reasonably required by the commissioner. No change to, or deviation from, a master development plan for a district, once the district is certified, or change in, or deviation from, a project in a district that has been certified, shall result in a district losing its certification, or disqualification of any cost, so long as the district is reasonably anticipated to attain the thresholds set forth in § 7-40-103(7) based on objective professional standards. In order to support decertification or disqualification of cost, the commissioner bears the burden of establishing that such change or deviation has caused the district to not be reasonably anticipated to attain the requisite thresholds set forth in § 7-40-103(7).
   3. The commissioner shall promptly review the request to confirm that the proposed boundaries of the proposed border region retail tourism development district do not exceed the maximum size set forth in this chapter. If the commissioner determines that the boundaries of the proposed border region retail tourism development district exceeds the area allowed by this chapter, then the commissioner may adjust or reduce the boundaries of the proposed district in consultation with the municipality. In reviewing the request, the commissioner shall inform the commissioners of economic and community development and tourist development of the pending request.
   4. If the commissioner, with approval by the commissioner of economic and community development, determines that the special allocation of state sales tax, as authorized by § 7-40-106, is reasonably anticipated to attain the goals set forth in § 7-40-103(7) based on applicable objective professional standards, then the commissioner shall approve the request and certify the district. Upon certification of the district, the commissioner shall provide prompt notice of the certification to the commissioner of economic and community development, the commissioner of tourist development, and the requesting municipal governing body.
2. Upon certification of the district, state sales and use taxes shall be apportioned and distributed to the municipality as provided in this chapter.
3. The apportionment and distribution of state sales and use taxes shall commence with the first fiscal year after the certification of the district for which the municipality has submitted a cost certification for that fiscal year as provided in this subsection (c). The base tax revenues shall be determined in accordance with the definition in § 7-40-103, irrespective of whether a municipality filed a cost certification for the first year for which the municipality was entitled to receive an allocation of tax revenue. Within thirty (30) days after the end of each fiscal year for which a municipality is requesting an allocation of sales and use tax revenues, the municipality may submit to the commissioner a summary of the cost of the economic development project through the end of that fiscal year with supporting documentation certified by the chief financial officer of the municipality. The certification by the chief financial officer of the municipality shall be deemed an official act of that officer on behalf of the municipality, and that officer shall not be personally liable for any incorrect information in the certification. The commissioner shall review the cost certification to confirm that state sales and use taxes, in the amount determined by the commissioner, should be apportioned and distributed to the municipality pursuant to this chapter and shall notify the department of economic and community development of such.
4. The certified district shall be dissolved following the expiration of thirty (30) years, or upon the date on which the cost of the project has been fully paid, whichever is sooner; provided, that the thirty-year period in this subsection (d) shall be concurrent with the time limitation established in § 7-40-106.
5. Not later than June 30, 2019, any municipality in which a district has been certified may exclude, on a one-time basis, from the district for the remainder of the term that the district is certified, any property or properties initially included in the certified district by designating the exclusion of the property or properties by resolution of the legislative body of the municipality. A certified copy of the resolution shall be filed with the commissioner not later than sixty (60) days after adoption by the legislative body of the municipality. Upon exclusion, and except as provided in this subsection (e), the excluded property or properties shall be treated as if the property or properties were never included in the district for all purposes, including the calculation of base tax revenues, commencing with the fiscal year ending June 30, 2019, and the municipality shall not be entitled to receive any future incremental increases in tax revenues relating to businesses located on the excluded property or properties. Notwithstanding this subsection (e), the adoption of the resolution shall not affect any prior distribution relating to the district for any fiscal year ending on or before June 30, 2018.
6. For purposes of determining whether a business is located in the district, the commissioner shall rely on the address of the business as shown on the business's tax return.
7. If a municipality elects to remove properties from the certified district by designating the exclusion of the property or properties pursuant to subsection (e) other adjacent property or properties may become eligible to be included in the certified district in a total acreage amount less than or equal to the total acreage of those properties excluded. Inclusion of such property or properties must be designated by resolution of the legislative body of the municipality. A certified copy of the resolution shall be filed with the commissioner not later than sixty (60) days after adoption by the legislative body of the municipality. Upon inclusion, and except as provided in subsection (e) the included property or properties shall be treated as if the property or properties were included in the district for all purposes, including the calculation of base tax revenues, commencing with the fiscal year ending June 30, 2018, and the municipality shall be entitled to receive future incremental increases in tax revenues relating to businesses located on the included property or properties. Notwithstanding this subsection (g), the adoption of the resolution shall not affect any prior distribution relating to the district for any fiscal year ending on or before June 30, 2018.

Acts 2011, ch. 420, § 5; 2012, ch. 1092, § 3; 2015, ch. 405, §§ 1, 2; 2019, ch. 390, §§ 1-3; 2019, ch. 511, §§ 3, 4, 6.

Compiler's Notes. Acts 2012, ch. 1092, § 5 provided that §§ 1-3 of the act, which amended  §§ 7-40-103 and 7-40-104, shall apply to every border region retail tourism development district, whether certified by the commissioner of revenue before or after May 21, 2012.

Acts 2019, ch. 511, § 9 provided that the act  shall apply retroactively to any district certified prior to June 3, 2019. No such certified district shall be decertified as a result of the amendments to the Border Region Retail Tourism Development District Act, compiled in Title 7, Chapter 40, made by the act.

Amendments. The 2015 amendment, in (c), substituted the first four sentences for the former first sentence, which read:  “The apportionment and distribution of state sales and use taxes to the municipality as provided in this chapter shall commence at the beginning of the fiscal year after the certification of the district; provided, that prior to the beginning of such fiscal year and on an annual basis thereafter, the municipality shall submit to the commissioner a summary of the cost of the economic development project with supporting documentation, certified by the chief financial officer of the municipality.”; and added (e) and (f).

The 2019 amendment by ch. 390, in (e), substituted “June 30, 2019” for “June 30, 2015”, twice, and “June 30, 2018” for “June 30, 2014” in the last sentence; and added (g).

The 2019 amendment by ch. 511, in (a)(2), added the third and fourth sentences; in (a)(4), substituted “is reasonably anticipated to attain the goals set forth in §  7-40-103(7) based on applicable objective professional standards” for “is in the best interests of the state”; and in (c), substituted “may” for “shall” preceding “submit to the” in the third sentence.

Effective Dates. Acts 2015, ch. 405, § 5. May 8, 2015.

Acts 2019, ch. 390, § 4. May 10, 2019.

Acts 2019, ch. 511, § 10. June 3, 2019.

7-40-105. Annual adjustments.

Annual adjustments to the sales and use tax revenues collected in the district shall be made by the department of revenue within ninety (90) days of the end of each fiscal year and shall be effective immediately upon notification of such adjustment from the department of revenue to the municipality or industrial development corporation.

Acts 2011, ch. 420, § 6.

7-40-106. Conditions for and duration of apportionment and distribution of state sales and use taxes.

1. Notwithstanding the allocations provided for in § 67-6-103(a), if a municipality or industrial development corporation finances, constructs, leases, equips, renovates, assists, incents, or acquires an extraordinary retail or tourism facility or a project in a certified district, then seventy-five percent (75%) of state sales and use tax collected in the district in excess of base tax revenues shall be apportioned and distributed to the municipality in an amount equal to the incremental increase in state sales and use taxes derived from the sale of goods, products, and services within the district in excess of base tax revenues.
2. Apportionment and distribution of such taxes shall continue for a period of thirty (30) years, or until the date on which all the cost of the economic development project, including any principal and interest on indebtedness, including refunding indebtedness of the municipality or industrial development corporation related to the development of the project have been fully paid, whichever is sooner. Following the expiration of this thirty-year period, or upon the date on which such cost has been fully paid, whichever is sooner, all amounts that would have otherwise been distributed to the municipality or retained in lieu of distribution shall be allocated as provided elsewhere without regard to this chapter.
3. Tax revenue distributed to the municipality pursuant to this chapter shall be for the exclusive use of the municipality or the industrial development corporation formally designated by the municipality for payment of the cost of the economic development project, including principal and interest on indebtedness, including refunding indebtedness of the municipality or industrial development corporation related to the development of the project. The apportionment and payment shall be made by the department of revenue to the municipality within ninety (90) days of the end of each fiscal year for which the municipality is entitled to receive an allocation and payment pursuant to this chapter. If the commissioner determines that any cost included in a certification of a municipality submitted pursuant to § 7-40-104(c) is not a qualifying cost within the meaning of § 7-40-103, the commissioner shall promptly give notice of the determination to the municipality. Upon receipt of the notice, the municipality may contest the determination following the procedures set forth in § 4-5-223. If the commissioner determines that any cost is not a qualifying cost, the commissioner may not recoup, on such basis, any payment that has already been made by the commissioner to the municipality or industrial development board. However, the amount of the unqualified cost shall offset and reduce the amount of any future distribution of tax revenues to the municipality or industrial development board. The chief financial officer of the municipality may rely on certifications and documentation of third parties in connection with making any certification under this chapter unless the chief financial officer has actual knowledge that the certification or documentation by the third party is false. Once the commissioner has approved any cost, whether incurred by the municipality or, as a result of delegation, by an industrial development board or any developer acting by agreement with the municipality or industrial development board, such approval shall be deemed conclusive that the district is being developed for an extraordinary retail or tourism facility as described in § 7-40-103(7).

Acts 2011, ch. 420, § 7; 2015, ch. 405, § 3; 2019, ch. 511, § 7.

Compiler's Notes. Acts 2019, ch. 511, § 9 provided that the act  shall apply retroactively to any district certified prior to June 3, 2019. No such certified district shall be decertified as a result of the amendments to the Border Region Retail Tourism development District Act, compiled in Title 7, Chapter 40, made by the act.

Amendments. The 2015 amendment added the last five sentences in (c).

The 2019 amendment added the eighth sentence to (c).

Effective Dates. Acts 2015, ch. 405, § 5. May 8, 2015.

Acts 2019, ch. 511, § 10. June 3, 2019.

7-40-107. Delegation to industrial development corporation.

An eligible municipality in which a district is located is authorized to delegate to any industrial development corporation within the county or counties where the municipality is located the authority to carry out all or part of the project and to issue revenue bonds to finance a project within a district and to incur cost for the project; provided, that the municipality may enter into an agreement with an industrial development corporation in which the municipality shall agree to promptly pay to the industrial development corporation the tax revenues received pursuant to this chapter sufficient to service the repayment of such bonds and costs incurred by the industrial development corporation for the project. Upon receipt, that portion of such tax revenues shall be held in trust by the municipality for the benefit of the industrial development corporation.

Acts 2011, ch. 420, § 8.

7-40-108. Indebtedness.

Any bonds, notes, refunding bonds, or other indebtedness relative to the cost of an economic development project shall not be issued for a term longer than thirty (30) years and the municipality or industrial development corporation is authorized to pledge all proceeds or taxes received by it pursuant to this chapter to the payment of principal of and interest on such bonds, notes, or other indebtedness; provided, that the thirty-year period in this section shall be concurrent with the time limitation established in § 7-40-106.

Acts 2011, ch. 420, § 9.

7-40-109. Issuance of bonds.

Prior to the issuance of any bonds to finance the cost of an economic development project that will be repaid in whole or part from apportionments under this chapter, the municipality or industrial development corporation issuing such bonds shall submit a proposed debt amortization schedule for such bonds to the commissioner for approval. Such schedule shall show the anticipated contribution to be made to the annual debt service for such bonds from the apportionment of sales and use taxes pursuant to this chapter and all other sources. After the date of issuance of such bonds, the municipality shall continue to contribute each year thereafter until such bonds are retired or a sufficient sinking fund has been established for their retirement.

Acts 2011, ch. 420, § 10.

7-40-110. Incentives and financial support.

A municipality may, including through an industrial development corporation, limit, condition, or provide incentives or financial support in the district as it deems appropriate, including the requirement that the benefited property owners participate in the repayment of such in an amount equal to twenty-five percent (25%) of the property tax for the real property owned by the property owner in the district each year, for such length of time as the municipality receives an appropriation of sales and use tax in accordance with this chapter and the property owner provides a lien on the property for such repayment; provided, however, that a municipality may not provide financial assistance to the location or relocation of existing retailers located within a fifteen-mile radius of the district, provided such existing location is inside the borders of this state, unless the sales floor space is increased by thirty-five percent (35%) or greater from such existing store. Furthermore, a municipality may allocate some or all of the incremental increase in property tax revenue directly as a result of the development within the district to pay for some costs associated with the district formation as well as economic development projects or extraordinary retail or tourism projects within the district.

Acts 2011, ch. 420, § 11.

7-40-111. Exercise all powers and rights — Standing — Remedies.

Notwithstanding any law to the contrary, the municipality and the industrial development corporation are authorized to exercise all power and rights, express or implied, granted by this chapter. Any developer of a project within a district who has entered into an agreement with a municipality or industrial development board related to such project or any proposed project or district has standing, with respect to such project and district, to seek remedies to enforce this chapter or any rights created by this chapter, including specifically the remedy to appeal the commissioner's determination that a cost is not a qualifying cost under § 7-40-106(c).

Acts 2011, ch. 420, § 12; 2019, ch. 511, § 8.

Compiler's Notes. Acts 2019, ch. 511, § 9 provided that the act  shall apply retroactively to any district certified prior to June 3, 2019. No such certified district shall be decertified as a result of the amendments to the Border Region Retail Tourism development District Act, compiled in Title 7, Chapter 40, made by the act.

Amendments. The 2019 amendment added the second sentence.

Effective Dates. Acts 2019, ch. 511, § 10. June 3, 2019.

7-40-112. Application of chapter to certain border region retail tourism development districts.

This chapter shall only apply to border region retail tourism development districts for which a certified copy of the ordinance required by § 7-40-104(a)(1), along with the request for certification required by § 7-40-104(a)(2), has been filed with the commissioner before January 1, 2012.

Acts 2012, ch. 1092, § 4.

7-40-113. Application of chapter to certain costs.

The benefits of this chapter shall apply to any cost incurred in connection with developing a project as a whole, even if:

1. The cost includes development of portions of the district or business in the district, or both, that do not, by themselves, generate state sales and use tax revenue, visitors, or sufficient state sales and use tax revenue, by themselves, to meet the standards set forth in § 7-40-103(7), including a retail store, or series of stores, or other attractions or facilities open to the public, that do not or will not, by themselves, generate state sales and use tax revenue; or
2. The sequence of development results in development of businesses or attractions, or both, to attract or stimulate interest in the project by retail businesses or retail tourism facilities to be developed at a later time.

Acts 2019, ch. 511, § 1.

Compiler's Notes. Acts 2019, ch. 511, § 9 provided that the act shall apply retroactively to any district certified prior to June 3, 2019. No such certified district shall be decertified as a result of the amendments to the Border Region Retail Tourism development District Act, compiled in Title 7, Chapter 40, made by the act.

Effective Dates. Acts 2019, ch. 511, § 10. June 3, 2019.

7-41-101. Short title.

This chapter shall be known and may be cited as the “Regional Retail Tourism Development District Act.”

Acts 2019, ch. 498, § 2.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-102. Purpose of chapter.

The purpose of this chapter is to increase tourism and the competitiveness of this state with bordering states by empowering local governments to encourage the development of extraordinary retail or tourism facilities, including shopping, recreational, and other activities.

Acts 2019, ch. 498, § 3.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

1. “Base tax revenues” means the revenues generated from the collection of state sales and use taxes from all businesses within the applicable regional retail tourism development district as of the end of the fiscal year of this state immediately prior to the year in which the municipality or industrial development corporation is entitled to receive an allocation of tax revenue pursuant to this chapter. In no event shall the apportionment pursuant to this chapter be adjusted to reduce the economic benefit to the municipality as is provided in this chapter;
2. “Best interests of the state” means a determination by the commissioner of revenue, with approval by the commissioner of economic and community development, that:
   1. The economic development project or extraordinary retail or tourism facility within the district is a result of the special allocation and distribution of state sales tax provided for in §  7-41-106; and
   2. The district is a result of the project or extraordinary retail or tourism facility;
3. “Commissioner” means the commissioner of revenue;
4. “Cost” means all costs of an economic development project in a district incurred by the municipality or industrial development corporation, including, but not limited to, the cost of developing the district, as well as acquisition, design, construction, renovation, improvement, demolition, and relocation of any improvements; the cost of labor, materials, and equipment; the cost of all lands, property rights, easements, and franchises required; financing charges, interest, and debt service prior to, during, or after construction; the cost of issuing bonds in connection with any financing; cost of plans and specifications, services, and estimates of costs and of revenue; cost of direct or indirect assistance, including funds for location assistance; cost of site preparation, engineering, accounting, and legal services; all expenses necessary or incident to determining the feasibility or practicability of such acquisitions or construction; salaries, overhead, and other costs of the municipality or industrial development corporation allocated to the project, including new development or subsequent phases of the project to be completed within the thirty-year period established in §  7-41-104(d), and administrative, legal, and engineering expenses and such other expenses as may be necessary or incident to such acquisition, design, construction, renovation, demolition, relocation, or the financing thereof, including the costs incurred by a municipality or industrial development corporation relating to the development of an extraordinary retail or tourism facility within two (2) years prior to the municipality's designation of the proposed regional retail tourism development district for such project;
5. “Economic development project” or “project” means the provision of direct or indirect financial assistance, including funds for location assistance, to an extraordinary retail or tourism facility and other retail or tourism facilities developed to accompany the extraordinary retail or tourism facility in a regional retail tourism development district by a municipality or an industrial development corporation, including, but not limited to, the purchase, lease, grant, construction, reconstruction, improvement, or other acquisition or conveyance of land, buildings, equipment, or other infrastructure; public works improvements essential to the location of an extraordinary retail or tourism facility and other retail or tourism facilities developed to accompany the extraordinary retail or tourism facility; payments for professional services contracts necessary for a municipality or industrial development corporation to implement a plan or project; the provision of direct loans or grants for land, buildings, or infrastructure; and loan guarantees securing the cost of land, buildings, location assistance, or infrastructure in an amount not to exceed the revenue that may be derived from the sales and use tax transferred to the municipality as provided in this chapter. It also includes development of parks, plazas, sidewalks, access ways, roads, drives, bridges, ramps, landscaping, signage, parking lots, parking structures, and other public improvements constructed or renovated by the municipality or an industrial development corporation in connection with the project in the district and any related infrastructure and utility improvements for public or private peripheral development for the district that is constructed, renovated, or installed by the municipality or an industrial development corporation;
6. “Extraordinary retail or tourism facility” means a single store, series of stores, or other public tourism facility or facilities located within a regional retail tourism development district, and includes retail or other public tourism facilities that are reasonably anticipated to draw at least one million (1,000,000) visitors a year upon completion. The extraordinary retail or tourism facility must reasonably be expected to require a capital investment of at least twenty million dollars ($20,000,000), including land, buildings, and site preparation costs, and must reasonably be anticipated to remit at least two million dollars ($2,000,000) in state sales and use tax annually when completed;
7. “Industrial development corporation” means a corporation created or authorized by a municipality or county pursuant to chapter 53 of this title;
8. “Municipal governing body” means the city council, city commission, or board of mayor and aldermen of a city;
9. “Municipality” means an incorporated city located in this state; and
10. “Regional retail tourism development district” or “district” means one (1) or more parcels of real property located within a county having a population of not less than one hundred twenty-two thousand nine hundred (122,900) nor more than one hundred twenty-three thousand (123,000), according to the 2010 federal census or any subsequent census, and which some boundary of the district is no more than one-half (1/2) mile from an existing federally designated interstate exit, is no more than twenty (20) miles from the state border of two (2) neighboring states as measured by straight line, is no larger than a total area of nine hundred fifty (950) acres, and is designated as a regional retail tourism development district by a municipal ordinance and certified by the commissioner.

Acts 2019, ch. 498, § 4.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-104. Requirements to receive apportionment of state sales and use taxes — Certification of district — Apportionment and distribution of state sales and use taxes to municipality.

1. To receive the apportionment of state sales and use taxes as provided in this chapter, the following requirements must be met:
   1. A municipal legislative body must adopt an ordinance designating the boundaries of the regional retail tourism development district. A municipality shall not contain more than one (1) such district;
   2. The municipality must file a certified copy of the ordinance with the commissioner along with a request for certification of the district. The request must include a master development plan for the proposed district containing such information as may be reasonably required by the commissioner;
   3. The commissioner shall promptly review the request to confirm that the proposed boundaries of the proposed regional retail tourism development district do not exceed the maximum size set forth in this chapter. If the commissioner determines that the boundaries of the proposed regional retail tourism development district exceed the area allowed by this chapter, then the commissioner may adjust or reduce the boundaries of the proposed district in consultation with the municipality. In reviewing the request, the commissioner shall inform the commissioners of economic and community development and tourist development of the pending request; and
   4. If the commissioner, with approval by the commissioner of economic and community development, determines that the special allocation of state sales tax, as authorized by § 7-41-106, is in the best interests of the state, then the commissioner shall approve the request and certify the district. Upon certification of the district, the commissioner shall provide prompt notice of the certification to the commissioner of economic and community development, the commissioner of tourist development, and the requesting municipal governing body.
2. Upon certification of the district, state sales and use taxes must be apportioned and distributed to the municipality as provided in this chapter.
3. The apportionment and distribution of state sales and use taxes to the municipality as provided in this chapter must commence at the beginning of the fiscal year after the certification of the district. Prior to the beginning of that fiscal year, and on an annual basis thereafter, the municipality shall submit to the commissioner a summary of the cost of the economic development project with supporting documentation, certified by the chief financial officer of the municipality, which must include the cost of any new phases or additional development of the project to be completed within the thirty-year time limitation established in subsection (d). The commissioner shall review the cost certification to determine whether state sales and use taxes, in the amount determined by the commissioner, must be apportioned and distributed to the municipality pursuant to this chapter and shall notify the department of economic and community development of the determination.
4. Additional development or new phases of a project within a certified district shall not be initiated after the expiration of twenty (20) years following certification of the district. The certified district must be dissolved following the expiration of thirty (30) years, or upon the date on which the cost of the project has been fully paid, whichever occurs first. The thirty-year period in this subsection (d) runs concurrently with the time limitation established in § 7-41-106.

Acts 2019, ch. 498, § 5.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-105. Annual adjustments to sales and use tax revenues collected in district.

The department of revenue shall make annual adjustments to the sales and use tax revenues collected in the district within ninety (90) days of the end of each fiscal year. The annual adjustments are effective immediately upon notification of the adjustment from the department of revenue to the municipality or industrial development corporation.

Acts 2019, ch. 498, § 6.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-106. Apportionment and distribution if extraordinary retail or tourism facility or project in certified district.

1. Notwithstanding the allocations provided for in § 67-6-103(a), if a municipality or industrial development corporation finances, constructs, leases, equips, renovates, assists, incents, or acquires an extraordinary retail or tourism facility or a project in a certified district, then seventy-five percent (75%) of state sales and use tax collected in the district in excess of base tax revenues must be apportioned and distributed to the municipality in an amount equal to the incremental increase in state sales and use taxes derived from the sale of goods, products, and services within the district in excess of base tax revenues.
2. Apportionment and distribution according to subsection (a) must continue for a period of thirty (30) years, or until the date on which the entire cost of the economic development project, including any principal and interest on indebtedness, including refunding indebtedness of the municipality or industrial development corporation related to the development of the project, are fully paid, whichever occurs first. Following the expiration of this thirty-year period, or upon the date on which such cost has been fully paid, whichever is sooner, all amounts that would have otherwise been distributed to the municipality or retained in lieu of distribution shall be allocated as provided elsewhere without regard to this chapter.
3. Tax revenue distributed to the municipality pursuant to this chapter is for the exclusive use of the municipality or the industrial development corporation formally designated by the municipality for payment of the cost of the economic development project, including principal and interest on indebtedness, including refunding indebtedness of the municipality or industrial development corporation related to the development of the project. The department of revenue shall apportion the payment to the municipality within ninety (90) days of the end of each fiscal year for which the municipality is entitled to receive an allocation and payment pursuant to this chapter.

Acts 2019, ch. 498, § 7.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-107. Delegation to industrial development corporation.

An eligible municipality in which a district is located is authorized to delegate to any industrial development corporation within the county or counties where the municipality is located the authority to carry out all or part of the project, to issue revenue bonds to finance a project within a district, and to incur cost for the project. The municipality may enter into an agreement with an industrial development corporation in which the municipality agrees to promptly pay to the industrial development corporation the tax revenues received pursuant to this chapter sufficient to service the repayment of the bonds and costs incurred by the industrial development corporation for the project. Upon receipt, that portion of tax revenues must be held in trust by the municipality for the benefit of the industrial development corporation.

Acts 2019, ch. 498, § 8.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-108. Bonds, notes, refunding bonds, or other indebtedness relative to cost of economic development project.

Any bonds, notes, refunding bonds, or other indebtedness relative to the cost of an economic development project must not be issued for a term longer than thirty (30) years, and the municipality or industrial development corporation may pledge all proceeds or taxes it receives pursuant to this chapter to the payment of principal and interest on the bonds, notes, or other indebtedness. The thirty-year period in this section runs concurrently with the time limitation established in § 7-41-106.

Acts 2019, ch. 498, § 9.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-109. Debt amortization schedule for bonds.

Prior to the issuance of any bonds to finance the cost of an economic development project that will be repaid in whole or part from apportionments under this chapter, the municipality or industrial development corporation issuing the bonds shall submit a proposed debt amortization schedule for the bonds to the commissioner for approval. The schedule must show the anticipated contribution to be made to the annual debt service for the bonds from the apportionment of sales and use taxes pursuant to this chapter and all other sources. After the date of issuance of the bonds, the municipality shall continue to contribute each year thereafter until the bonds are retired or a sufficient sinking fund has been established for their retirement.

Acts 2019, ch. 498, § 10.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-110. Limitations, conditions, or provision of incentives or financial support in district.

A municipality may, including through an industrial development corporation, limit, condition, or provide incentives or financial support in the district as it deems appropriate, including the requirement that the benefited property owners participate in the repayment of indebtedness due to district formation in an amount equal to twenty-five percent (25%) of the property tax for the real property owned by the property owner in the district each year, for the length of time as the municipality receives an appropriation of sales and use tax in accordance with this chapter and the property owner provides a lien on the property for such repayment. A municipality shall not provide financial assistance for the location or relocation of existing retailers located within a fifteen-mile radius of the district, if the existing location is within this state, unless the sales floor space is increased by thirty-five percent (35%) or more from that of the existing store. A municipality may allocate some or all of the incremental increase in property tax revenue directly as a result of the development within the district to pay for costs associated with the district formation, economic development projects, or extraordinary retail or tourism projects within the district.

Acts 2019, ch. 498, § 11.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

7-41-111. Exercise of powers and rights granted by chapter.

Notwithstanding any law to the contrary, the municipality and the industrial development corporation may exercise all power and rights, express or implied, granted by this chapter.

Acts 2019, ch. 498, § 12.

Effective Dates. Acts 2019, ch. 498, § 15. July 1, 2019.

Part 1
Emergency Government Relocation

Part 1
Municipal Electric Plant Law of 1935