House Bill 561 amends various sections of the Tennessee Code Annotated to allow municipal, metropolitan-government, county-owned water or wastewater systems, and utility districts to borrow money in anticipation of revenue collection. The bill introduces new subsections that permit these entities to issue negotiable notes for emergency cash flow, with specific conditions. Notably, the principal value of the notes cannot exceed 60% of the total projected cash flows for a twelve-month period, and all notes must be retired by the end of that period. The issuance of these notes requires approval from the comptroller of the treasury or their designee, who will also develop a corrective action plan to ensure financial stability.

Additionally, the bill includes provisions for the Tennessee board of utility regulation to review the borrowing entities and enforce remedial measures if necessary. It also modifies existing language regarding the removal of governing body members for misconduct and other failures. The act is set to take effect on July 1, 2025, ensuring that the new regulations are in place to support the financial management of utilities in Tennessee.

Statutes affected:
Introduced: 7-34-111, 7-36-113, 7-82-501(b), 7-82-501, 7-82-501(f), 7-82-702(a)(3), 7-82-702, 68-221-611(n), 68-221-611, 68-221-1311(m), 68-221-1311