Bill > HB1338

This bill amends Tennessee's local government debt regulations by expanding the definition of "local government" to include water, wastewater, and energy authorities, and introduces new oversight requirements for what it terms "heightened risk debt". Specifically, the bill defines heightened risk debt as any debt obligation with variable interest rates, interest rate reset provisions, or put options that allow debt holders to force early repayment. Before issuing such debt, local governments (now including water, wastewater, and energy authorities) must submit a request to the state comptroller for approval. The comptroller must evaluate each request based on the local government's specific circumstances and can only approve the debt if it determines the terms are in the public's interest. The comptroller must respond within 15 business days, and if no disapproval is reported, the local government can proceed with the debt issuance. The bill also clarifies that debt principal should be treated as payable at its stated maturity or mandatory redemption date, and exempts loans or interim certificates from these new federal or state government departments from the new approval process. The changes will take effect on July 1, 2025.

Government Affairs

https://wapp.capitol.tn.gov/apps/Billinfo/default.aspx?BillNumber=HB1338&ga=114