This bill creates the Tennessee Transportation Financing Authority (the "authority") to be attached to the office of the comptroller of the treasury for all administrative purposes. The authority is created to provide financing and refinancing for the development, maintenance, and improvement of transportation facilities within this state. The authority may exercise all powers necessary or convenient for carrying out its statutory purposes. Such powers are vested in and exercised by a board, which is composed of the governor, the commissioner of finance and administration, the state treasurer, the secretary of state, and the comptroller. This bill requires the governor to serve as the chair, and the comptroller to serve as the vice chair and secretary. The board has the power to prescribe its bylaws, guidelines, rules, and regulations and govern its meetings and procedures as it deems advisable. A majority of the board constitutes a quorum, and the confirming vote of at least three members of the board is required. CONTRACTUAL AUTHORITY When entering into contracts or agreements facilitating the issuance and sale of bonds, this bill authorizes the authority to agree in the written contract or agreement that the rights and remedies of the parties are to be governed by the laws of this state or the laws of such other state or nation as long as jurisdiction over the authority against which an action on such a contract or agreement is brought lies solely in a court in this state that would otherwise have jurisdiction of actions brought in contract against the authority. BOND ISSUES This bill authorizes the authority to issue bonds, without limitation as to the amount, for the purpose of financing or refinancing costs associated with the development of transportation facilities. The bonds must be authorized by resolution of the authority and are subject to such terms and conditions as determined by the authority. The bonds may be made redeemable before maturity at the option of the authority at such price or prices and under such terms and conditions as may be fixed by the authority. The authority must determine the form of the bonds, and may provide for interest coupons at such time or in the future, and the manner of execution or authentication of the bonds and coupons, and must fix the denomination or denominations of the bonds and the place or places of payment of the principal and interest, which may be at any bank or trust company within or without the state. REFUNDING BONDS This bill authorizes the authority to issue refunding bonds for the purpose of refunding any bonds then outstanding that were issued under this bill. The authority may offer for sale any bonds to be issued by the authority either by competitive or negotiated public sale or private sale. For bonds issued by the authority, all statutory limitations regarding maximum interest rates are expressly removed. The authority 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 agreements as the authority may determine, including provisions permitting the authority to pay to or receive any loss of benefits under such agreement upon early termination thereof or default under such agreement. RECITALS This bill authorizes a resolution authorizing bonds to provide that the bonds contain a recital that they are issued pursuant to this bill, which recital is conclusive evidence of their validity and the regularity of their issuance. The validity of the authorization and issuance of bonds is not dependent on or affected in any way by proceedings taken for, or contracts or agreements made in connection with, the development of transportation facilities. EXEMPTIONS This bill provides that every issue of its bonds are payable solely out of any revenues and are not a debt of, and do not constitute a general obligation or pledge of the full faith and credit of, the state or of any county, municipality, taxing entity, or other political subdivision of the state and may be secured by a pledge of revenues. Additionally, the bonds and the interest on the bonds are exempt from taxation by the state and by any county, municipality, or taxing entity of the state, except for inheritance, transfer, and estate taxes. TERMS AND PAYMENT OBLIGATIONS This bill authorizes the authority to delegate to any member or officer of the authority the power to establish the terms of any bonds and any payment obligations under any agreements to be entered into in connection with any bonds within parameters determined by the authority and to approve the forms of any documents to be executed in connection therewith. Under this bill, if any member or officer of the authority whose signature appears on the bonds or coupons ceases to be a member or officer of the authority before the delivery thereof, then the signature is valid and sufficient for all purposes. PUBLIC HEARING When required by federal law, this bill requires a public hearing for private activity bonds of the authority to be conducted by the board or any one or more officers or members of the authority after prior notice. Additionally, for public approval, the governor must serve as the applicable elected representative. PLEDGES This bill provides that any pledge made by the authority is valid and binding. The revenues or properties so pledged and thereafter received by the authority are immediately subject to the lien of the pledge without any physical delivery thereof or further act, and the lien of any such pledge is valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the authority, irrespective of whether the parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created needs to be recorded. However, the Perfection, Priority and Enforcement of Public Pledges and Liens Act applies to any pledge of the authority. SECURE PAYMENT This bill authorizes the authority to exercise powers in order to secure the payment of the principal of and interest on the bonds and any payment obligations under any agreements entered into in connection with any bonds. This bill provides any bond of the authority or payment obligation under any agreement entered into in connection with a bond does not constitute a debt, or pledge of the faith and credit, of the state or of any other political subdivision of the state but is payable solely from the revenues pledged thereto. All such bonds and related payment obligations must contain a statement to the effect that the state, any political subdivision of the state, and the authority is not obligated to pay the same or the interest thereon except from revenues pledged thereto, and that neither the faith and credit nor the taxing power of the state or of any political subdivision thereof is pledged to the payment of the principal of or the interest on such bonds or related payment obligations. BONDHOLDER PROTECTION This bill does not impair the obligation of any contract made by the authority upon any bonds or any payment obligations under any agreements entered into in connection with any bonds. The state covenants and agrees with the holders of the bonds that so long as the bonds are outstanding and unpaid, the state must not limit nor alter the rights vested in the authority with respect to any agreements made with, or remedies available to, the holders of bonds issued under this bill until the bonds, together with all interest thereon, and all costs and expenses in connection with any proceeding by or on behalf of the holders, are fully met and discharged. The authority may include this pledge and agreement of the state in any agreement with the holders of the bonds. RIGHT TO PERFORMANCE This bill provides that the holders of all bonds of the authority and all persons who may purchase the bonds or to whom the authority has incurred a payment obligation under any agreement entered into in connection with any bond have a vested right in the performance of the covenants and pledges contained in this bill, and the performance of the duties imposed upon any officer or member of the authority by this bill may be enforced by the holder of any such bond subject to any limitation imposed on the right to do so pursuant to this bill or other payment obligation by appropriate proceedings. DEPOSIT OF FUNDS This bill authorizes all banks, trust companies, bankers, savings banks and institutions, loan associations, investment companies, and other persons carrying on a banking and investment business; all insurance companies and other persons carrying on an insurance business; and all executors, administrators, trustees, and other fiduciaries to legally invest sinking funds, moneys, or other funds in any of the bonds, and the bonds must be authorized security for all public deposits. REVENUES OF THE AUTHORITY This bill provides that all moneys received by the authority under this bill are deemed to be trust funds to be held and applied solely as provided in this bill. The resolution authorizing the bonds of any issue or the trust indenture or agreement or resolution securing such bonds must provide that any officer with whom, or any bank or trust company with which, such moneys are deposited must act as a trustee of the moneys and must hold and apply the same for the purposes hereof, subject to such regulations as this bill and such trust indenture or agreement or resolution may provide. Additionally, all expenses of the authority incurred in carrying out this bill must be payable solely from revenues, and liability must not be incurred by the authority beyond the extent to which moneys were provided or received. RECORDKEEPING This bill requires the secretary of the board to keep appropriate records concerning the payment of bonds issued under this bill and any payment obligations under any agreements entered into in connection with any such bonds. The accounts and records of the authority showing the receipt and disbursement of funds from whatever source derived must be in a form prescribed by governmental generally accepted accounting principles. Such accounts must correspond as nearly as possible to the accounts and records for such matters maintained by enterprises. Additionally, the secretary of the board must maintain an aggregate listing of its current debt in accordance with guidelines approved by the state funding board. At the end of each fiscal year, the authority must file the listing, and any other information required by the guidelines, with the state funding board. Additionally, the authority must file with the state funding board notice of default on any of its debt obligations within five days of the event. IMPLEMENTATION This bill authorizes the authority to (i) procure such legal and technical advice, approving opinions, and such financial assistance as it may consider necessary in connection with the carrying into effect of this bill, and (ii) pay all necessary expenses and all other incidental expenses as may be necessary. All such expenses, as well as the amount of any discount at which bonds issued under this bill are sold, may be funded by bonds issued under this bill. DISPOSITION UPON DISSOLUTION This bill provides that after all bonds of the authority and any payment obligations under any agreements entered into in connection with any such bonds are discharged and the authority is dissolved, its remaining assets must inure to the benefit of the state. PROPRIETARY RECORDS Records received or possessed by the authority that have been determined to be proprietary by the department of transportation or another responsible public entity under present law must remain confidential and are not subject to public inspection but only upon request by the private person or entity to the authority with proof that the department or other responsible public entity has made a determination that the records are proprietary. IMMUNITY This bill does not waive the immunity of the state from suit or extend its consent to be sued. STATE USER FEE FUND Present law authorizes the department of finance and administration to establish state user fee funds in the state treasury or with a trustee, paying agent or other custodian, as may be necessary, convenient, or desirable to implement this bill and to comply with the terms of any resolution or indenture authorizing any bonds. This bill adds that user fee revenue derived from or related to a user fee facility developed pursuant to the terms of a concession agreement or other user fee facility development agreement must be deposited to such funds as designated in the applicable concession agreement or user fee facility development agreement, including to a fund or funds created in connection with the issuance of bonds by the authority pursuant to present law as is provided for in such agreements or separate loan agreements. However, unless otherwise expressly instructed to do so in writing by the department of transportation, the department of finance and administration must not deposit any such user fee revenue into the state user fee fund.

Statutes affected:
Introduced: 4-29-248(a), 4-29-248, 54-3-103, 54-3-105