7-87-109 - Bond issuance.
7-87-109. Bond issuance.
(a) (1) An authority has the power to borrow money for any corporate purposes and issue revenue bonds for any corporate purposes, including revenue refunding bonds, in such form and upon such terms as it may determine, payable out of any revenues of the authority, including grants or contributions from the federal government or other sources. Such bonds may be sold at public or private sale. Revenue bonds may be sold at public or private sale. Revenue bonds may be issued for any corporate purposes and the authority may pledge as security for such bonds all or any portion of concessions, fees, rents, charges, or any other revenues derived from the operation of the port. Further, the payment or purchase of such revenue bonds, if issued for any essential public purpose, may be additionally secured, in whole or in part, in the manner provided in this section, by a pledge of the full faith and credit and unlimited taxing powers of the municipality or municipalities with respect to which the authority has been created. Such revenue bonds or revenue refunding bonds shall be issued in the manner provided for a local government in title 9, chapter 21; provided, that any such fees, rents, or charges so pledged that are fixed and established pursuant to the provisions of a lease or contract are not subject to revision or change except in such manner as is provided in such lease or contract. Any bonds of any authority issued pursuant to this chapter that are payable, as to principal and interest, solely from revenues of a port or port facility, and they shall so state on their face, shall not constitute a debt of any municipality, the state, or any political subdivision of the state, other than the authority or any municipality guaranteeing the payment or purchase of the bonds in the manner provided in this chapter, and shall not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. Neither the commissioners of any authority nor any person executing such bonds shall be liable personally on the bonds by reason of the issuance of the bonds.
(2) An authority, or municipality or municipalities with respect to which the authority has been created, may enter into interest rate exchange agreements with respect to any issue of revenue bonds or revenue refunding bonds, with any person, under such terms and conditions as the authority or municipality may determine, including, but not limited to, provisions permitting the authority or municipality to indemnify or otherwise pay any person for any loss of benefits under such agreement upon early termination of or default under such agreement.
(b) In case any of the commissioners or officers of an authority whose signatures appear on any bonds or coupons shall cease to be commissioners or officers after authorization, but before the delivery, of the bonds, the signatures shall nevertheless be valid and sufficient for all purposes, the same as if the commissioners or officers had remained in office until delivery. Any provision of any loan to the contrary notwithstanding, any bonds issued pursuant to this chapter shall be fully negotiable.
(c) Any bond reciting in substance that it has been issued by an authority pursuant to the provisions of this chapter and for a purpose or purposes authorized to be accomplished by this chapter shall be conclusively deemed, in any suit, action, or proceeding involving the validity or enforceability of the bond or security for the bond, to have been issued pursuant to such provisions and for such purpose or purposes.
(d) Bonds issued by an authority pursuant to the provisions of this chapter are declared to be issued for an essential public and governmental purpose, and together with interest on the bonds and income from the bonds, are exempt from all state, county and municipal taxation, except for inheritance, transfer and estate taxes, and except as otherwise provided in this code.
(e) (1) The governing body of a municipality or municipalities with respect to which the authority has been created may, by resolution, pledge the full faith and credit and unlimited taxing power of the municipality as guarantor to the payment of the principal or premium, if any, and interest on bonds of an authority, the purchase price of any such bonds subject to optional or mandatory tender for purchase, or the reimbursement or repayment to any bank or financial institution under any agreement providing for any draw, borrowing, advance or payment to be made for the payment of such principal, premium, interest or purchase price or the payment of amounts payable under any interest rate exchange agreement.
(2) Prior to any meeting where such guarantee will be considered by the governing body of the municipality, a notice shall be published at least five (5) days in advance of such meeting in a newspaper of general circulation within the municipality, describing the matter to be considered and containing an estimate of the dollar amount of any contingent liability proposed to be undertaken by the municipality.
(3) In the event of any such pledge of the full faith and credit and unlimited taxing power of the municipality, any holder or holders of the bonds, including a trustee or trustees for holders of such bonds, any financial institution providing any agreement on the payment of principal, premium, interest, purchase price on such bonds or any party to any interest rate exchange agreement with respect to such bonds shall have the right, in addition to all other rights, by mandamus or other suit, action, or proceeding in any court of competent jurisdiction, to enforce such person's rights against the municipality so pledging, and the governing body of such municipality and any officer, agent, or employee of such municipality, including, but not limited to, the right to require the municipality and governing body and any proper officer, agent, or employee of the municipality to assess, levy, and collect taxes and other revenues and charges adequate to carry out any agreement as to, or pledge of, such taxes, revenues, and charges. The taxes authorized to be pledged in this subdivision (e)(3) shall be levied without limit as to rate or amount upon all taxable property within the municipality, and all such taxes to be levied are hereby declared to have been levied for county and corporation purposes, respectively, within the meaning of the Constitution of Tennessee, article II, section 29.
[Acts 1995, ch. 432, § 9.]