Bill > HB1672

This bill modifies how local governments in Tennessee can issue and sell "grant anticipation notes," which are essentially short-term loans taken out in anticipation of receiving grant money for public works projects. It expands the types of entities that can issue these notes to include "utility authorities" in addition to "utility districts." Crucially, the bill allows the state Comptroller, who oversees state finances, to approve these notes even if they mature beyond the current fiscal year, under specific circumstances. These circumstances include situations where a local government has experienced economic distress due to a natural disaster, as certified by the Federal Emergency Management Agency (FEMA) or otherwise demonstrated to the Comptroller. The bill also clarifies that the resolution to issue these notes is only effective once the grant contract is finalized, and that the Comptroller's approval is required before issuance. Furthermore, it details how these notes can be secured, allowing for a pledge of the anticipated grant money, and optionally, a general obligation pledge or a pledge from a specific fund that benefits from the grant. The bill also clarifies that interest on these notes can be a general obligation of the local government, meaning they can levy property taxes to pay the interest, and it permits the issuance of other types of notes alongside grant anticipation notes, as long as their proceeds aren't used to pay off the grant anticipation notes.