ON APRIL 20, 2023, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 328, AS AMENDED
AMENDMENT #1 rewrites this bill to rename the "Tennessee Local Development Authority Act" to be the "Tennessee Local Development Authority Public Safety Protection Act of 2023,"and make various changes to the provisions.
LOANS FOR THE PURCHASE OF EQUIPMENT FOR USE OF COUNTY OR VOLUNTEER FIRE DEPARTMENTS
Under present law, in addition to the powers otherwise granted by law, the authority has the power and is authorized to make loans to any county for the acquisition of equipment for the use of county or volunteer fire departments serving the unincorporated areas of a county pursuant to a loan agreement between the county and the authority. Such loans must be made from the proceeds of bonds or notes issued by the authority for the purpose of making such loans.
This amendment deletes this provision and authorizes the Tennessee local development authority to make loans to a county for the acquisition of equipment for a county's public safety officers or a volunteer fire department's public safety officers pursuant to a loan agreement between the county and the authority. These loans must be made from the proceeds of bonds or notes issued by the authority of the state for these purposes.
This amendment defines equipment as including, but not limited to:
(1) For firefighters, uniforms, fire engines and other vehicles, ladders, hooks, hoses, and all other equipment necessary for containing and extinguishing fires;
(2) For law enforcement officers, uniforms, vehicles, weapons, holsters, handcuffs, restraints, batons, protective gear, and all other equipment necessary for the apprehension of suspects and criminals and the investigation and detection of crime;
(3) For emergency medical services personnel, uniforms, vehicles, stretchers, medical devices, medical supplies, first aid kits, automatic external defibrillators, and all other equipment necessary for the provision of emergency care; and
(4) For emergency communications dispatchers, uniforms, radios, antennas, base stations, call boxes, dispatch consoles, pagers, public safety systems, and all other equipment for the provision of emergency dispatching.
Under present law, the authority must establish a repayment schedule to be made by a county under a loan agreement. Such repayments must be in such amounts as will be at least sufficient, together with other funds available therefor, to pay the principal of, and interest on, bonds and notes issued by the authority for the purpose of providing loans to counties for the purchase of equipment, and as may be necessary for the authority to maintain a reserve for debt service. The authority may collect an administrative fee in addition to such repayment schedule in an amount as may be set forth in the loan agreement. At the time of approval of a loan agreement, the annual repayment schedule applicable to all approved loans to a county, when combined with the annual repayment schedules applicable to approved loans to counties under other law or any other loan agreement entered into between the county and the authority must not exceed 100 percent of the unobligated amount of annual state-shared taxes paid to the county as shown by the latest completed audit for the state's fiscal year.
Nothing contained above must require a uniform test for all loans, it being the intent of the general assembly that the authority exercise discretion based on the facts and circumstances of each loan. In exercising its discretion, the authority must take into consideration the general financial condition of the county receiving the loan.
For purposes of determining compliance, the annual repayment schedule for each loan must be, in cases prior to the funding of such loans or where such loans have been financed on an interim basis other than by bonds, an estimated annual repayment schedule showing debt service requirements under the loan agreements as if the bonds to be issued to fund such loans will bear interest at a rate per annum and mature in such manner as the authority must establish at the time of the approval of each such loan and, in cases where bonds have been issued to fund such loan, the actual debt service requirements on such bonds.
This amendment adds that repayments must be in the amounts at least sufficient, together with other funds available, to pay the principal of, and interest on state-appropriated funds for the purpose of providing loans to counties and nonprofit entities for the purchase of public safety officer equipment.
ADMINISTRATION OF LOANS
Under present law, any county entering into a loan agreement with the authority must state in the loan application, in addition to any requirements established by the authority pursuant to rules and regulations, that the purchase of the equipment is reasonably calculated to result in a reduction of fire insurance premium rates for businesses and residents within the unincorporated area of the county served by the county or volunteer fire department.
This amendment clarifies that this applies to the purchase of equipment for firefighters.
LOAN AGREEMENTS
Under present law, subject to the administration of loan provisions provided above and subject to any existing contractual obligations of the county, the authority may enter into loan agreements with any county, and any county may enter into loan agreements with the authority for loans for equipment for the use of county or volunteer fire departments serving the unincorporated area of the county.
This amendment clarifies that the authority is authorized to enter into loan agreements for equipment for county public safety officers of a volunteer fire department's public safety officers.
FURTHER AGREEMENTS AND GUARANTEES
Under present law, the authority has the right to enter into such further agreements with a county and require such further guarantees or securities as it may see fit prior to, or simultaneously with, the issuance of bonds or to refuse to issue bonds until such agreements or securities, in any form that the authority may elect, are agreed to or are obtained.
This amendment adds that the authority also has the right to enter into such further agreements prior to the issuance or refusal to issue loans from bond proceeds or state appropriations.
AUTHORITY TO ESTABLISH RURAL FIRE PROTECTION EQUIPMENT FUND
Under present law, the authority is hereby authorized to establish in the state treasury a separate special trust fund of the authority for each separate issue of bonds or notes that is similarly secured, to be known as the “rural fire protection equipment fund,” and to bear such additional designation as the authority deems appropriate to properly identify each fund. The state covenants and agrees that from and after the issuance of any bonds or notes, moneys derived by the state from payments made pursuant to loan agreements with such counties and moneys withheld from state-shared taxes apportioned to such counties as permitted under the terms of the loan agreements that are pledged to the payment of such bonds or notes must be paid into the particular fund established for the issuance of bonds or notes to which such moneys are pledged. Such moneys must be accounted for separately from all other moneys in the state treasury and must be applied by the authority solely for the purpose of paying principal of and interest and premium, if any, on such issue of bonds and notes issued pursuant to this section, refunding moneys due to participating counties where appropriate, and paying all other costs incidental to the administration of the authority in connection with the loan agreements and the issuance of such issue of bonds and notes.
This amendment renames the fund established to be known as the "public safety protection fund." This amendment also provides that the state covenants and agrees that from and after the loaning of state-appropriated funds, monies derived by this state are pledged to the payment of such loans.

Statutes affected:
Introduced: 9-1-111(g), 9-1-111