9-9-111 - Covenants for protection of bondholders.
9-9-111. Covenants for protection of bondholders.
(a) Except as in this section otherwise provided, so long as any obligations issued under the provisions of this chapter or chapter 165 of the Public Acts of 1937, or the bonds described in §§ 4 and 5 of such Act of 1937, remain outstanding and unpaid, the state of Tennessee hereby covenants with the persons who now or may hereafter hold these obligations or bonds, and with the state funding board, as trustee for the holders of the outstanding bonds of the state described in §§ 4 and 5, that it will not decrease by legislative action the motor vehicle registration fees, the special tax on petroleum products provided for by § 67-3-1303, or the franchise taxes now required by law to be paid, or eliminate from the requirement to pay such fees or taxes any substance, motor vehicle or corporation on account of which the payment of such fees or taxes is now required, and that it will levy a tax of not less than five cents (5¢) per gallon upon gasoline or other motor vehicle fuel, unless the state funding board shall certify that all payments due the state funding board under the provisions of this chapter have been made in full, that the state is not in default in the payment of any outstanding debt, or in the payment of interest thereon, and that such fees and taxes at lower rates to be specified by the state funding board, in such year or years (not exceeding two (2) years), will be sufficient to provide funds adequately to meet all payments required to be made by the state funding board in such year or years, as well as to provide for the other obligations and expenses of the state for such year or years, to be defrayed therefrom, in which event the state of Tennessee shall be under no obligation to charge or levy in such year or years fees or taxes in excess of the rates so certified by the state funding board.
(b) The holders of all bonds of the state and all persons who may hereafter purchase such bonds shall have, and are hereby declared to have, a vested right in the performance of the covenants and pledges contained in this chapter, and the performance of the duties imposed upon any officer or agency of the state by the provisions of this chapter may be enforced by the holder of any bond of the state, issued under the provisions of this chapter, by appropriate proceedings.
[Acts 1937, ch. 165, § 12 (Williams, § 1811.23); impl. am. Acts 1949, ch. 52, § 1; modified; impl. am. Acts 1959, ch. 9, § 8; Acts 1977, ch. 3, § 5; T.C.A. (orig. ed.), § 9-916; Acts 1998, ch. 582, § 10.]