HB 2667

                                ~tate of utennessee
                          PRIVATE CHAPTER NO. 71
                                   HOUSE BILL NO. 2667
                                 By Representative Bricken
                           Substituted for: Senate Bill No. 2730
                                     By Senator Bowling
       AN ACT to create the "Southern Cumberland Plateau Regional Water and Wastewater
Authority."
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
      SECTION 1. Purpose and creation of Authority.
              (a) A governmental authority to be known as the "Southern Cumberland Plateau
      Regional Water and Wastewater Authority" is hereby created and established for the
      following purposes:
                     (1) Planning, acquiring, constructing, improving, extending, furnishing,
             equipping, financing, owning, operating, and maintaining water and wastewater
             systems, including treatment, storage, distribution and collection facilities,
             properties and services, as hereinafter provided;
                     (2) The selling, donating, conveying, or otherwise disposing of water and
             wastewater and the undertaking any project or work related thereto or connected
             therewith;
                    (3) Planning and developing the water resources of the geographic region
             and providing necessary wastewater collection and treatment attendant thereto;
             and
                    (4) Providing environmental services and securing economic benefits to
             the geographic region that it encompasses and may serve.
             (b) The Authority shall be a separate legal entity and shall be a public corporation
      in perpetuity under its corporate name, and the powers granted are for public and
      governmental purposes and matters of public necessity.
      SECTION 2. Definitions.
              Whenever used in this act, unless a different meaning clearly appears in the
      context, the following terms, whether used in the singular or plural, shall be given the
      following respective interpretations:
                   ( 1) "Authority" means the Southern Cumberland Plateau Regional Water
             and Wastewater Authority created by this act;
                     (2) "Board" means the Board of Commissioners of the Authority;
                     (3) "Bonds" means bonds, interim certificates or other obligations of the
             Authority issue pursuant to this act, including joint obligations of the Authority and
             the County, the Cities, Utility Districts or municipalities;
                    (4) "Cities" mean the Town of Monteagle, Tennessee, and the Town of
             Tracy City, Tennessee;
                     (5) "County" means Grundy County, Tennessee;
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                   (6) "Governing Body" means the chief legislative body of a municipality,
            as hereinafter defined;
                     (7) "Municipality" means any county, incorporated city or town, utility
            district, or other municipal, or governmental body or subdivision in this State,
            thereof now or hereafter authorized by law to be created;
                    (8) "Notes" means notes or interim certificates of the Authority issued
            pursuant to this act, including joint obligations of the Authority and the County,
            Cities and/or Utility Districts;
                   (9) "Person" means any individual, firm,  partnership, association,
            corporation, or any combination thereof;
                     (10) "Refunding Bonds" means refunding bonds, issued pursuant to this
            act, including joint obligations of the Authority and the County, Cities, Utility
            Districts, or other municipality issued pursuant to this act and Tennessee Code
            Annotated, Title 9, Chapter 21, Parts 1 and 9, to refund bonds of the Authority or
            bonds issued by such County, Cities, Utility Districts or other municipality, the
            proceeds of which were used to construct, acquire, extend, improve or equip all
            or a portion of a system acquired by the Authority or to refund bonds, the
            proceeds of which were used for such purposes;
                   (11) "State" means the State of Tennessee;
                    (12) "System" means a water and wastewater system, which shall
            include, but not be limited to, all devices and systems used in the storage,
            treatment, recycling and reclamation of sewage of residential, commercial and
            industrial wastes of a liquid nature to restore and maintain the chemical, physical,
            and biological integrity of the State's waters; any devices and systems used in
            the treatment and distribution of water, including wells, water treatment facilities,
            water storage facilities, water transmission lines, pumping, power and other
            equipment, and other appurtenances, extensions, improvements, remodeling,
            additions and alterations thereof; and elements essential to provide a reliable
            recycled supply, such as standby treatment units and clear well facilities, and any
            works; and
                     (13) "Utility Districts" mean the Big Creek Utility District and the Sewanee
            Utility District.
     SECTION 3. Board of Commissioners.
             (a) The Authority shall have a Board of Commissioners in which all powers of the
     Authority shall be vested. Each Commissioner shall have an equal vote in the affairs of
     the Authority.
              (b) A representative of Grundy County, Tennessee, the Town of Monteagle,
     Tennessee, the Town of Tracy City, Tennessee, Big Creek Utility District, and Sewanee
     Utility District shall each hold a seat on the Board of Commissioners.
            (c)
                   (1) The membership of the Board of Commissioners shall consist of five
            (5) Commissioners designated as follows:
                          (A) The County Mayor of Grundy County or his/her designee, who
                   is named in a revocable written instrument executed by the County
                   Mayor;
                          (B) The Mayor of Monteagle or his/her designee, who is named in
                   a revocable written instrument executed by the Mayor;
                          (C) The Mayor of Tracy City or his/her designee, who is named in
                   a revocable written instrument executed by the Mayor; and
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                             (D) One ( 1) Commissioner to be appointed by each governing
                   body of the Big Creek Utility District and Sewanee Utility District. The
                   governing body of each utility district is hereby authorized to appoint one
                   (1) person as Commissioner and such person shall be a member of the
                   utility district's board of commissioners.
                   (2) If, pursuant to Section 21, the Board adds a new member beyond the
            number prescribed in subdivision (c)(1) due to the addition of a new participating
            municipality to the Authority, thus having an even number of members, then such
            new member must be a resident of Grundy County.
            (d) All vacancies on the Board shall be filled as follows:
                   (1) For the Commissioner selected pursuant to subdivision (c)(1 )(A)
            above, vacancies shall be filled by the County Mayor of Grundy County;
                   (2) For the Commissioner selected pursuant to subdivision (c)(1 )(8)
            above, vacancies shall be filled by the Mayor of Monteagle;
                   (3) For the Commissioner selected pursuant to subdivision (c)(1 )(C)
            above, vacancies shall be filled by the Mayor of Tracy City; and
                     (4) For the Commissioners selected pursuant to subdivisions (c)(1 )(D)
            and (c)(2) above, vacancies shall be filled by the governing body of the utility
            district/municipality whose seat is vacated by the departing Commissioner.
            (e) The terms of the Commissioners shall be as follows:
                     (1) The term of the Commissioner serving pursuant to subdivision
            (c)(1 )(A) shall be concurrent with the term of office of the County Mayor of
            Grundy County.
                     (2) The term of the Commissioner serving pursuant to subdivision
            (c)(1 )(B) shall be concurrent with the term of office of the Mayor of Monteagle.
                    (3) The term of the Commissioner serving pursuant to subdivision
            (c)(1)(C) shall be concurrent with the term of office of the Mayor of Tracy City.
                     (4) The term of the Commissioners serving pursuant to subdivisions
            (c)(1 )(D) and (c)(2) shall be four (4) years except for a replacement
            Commissioner filling an unexpired term.
            (f) Each member of the Board of Commissioners shall continue to hold office until
     a successor is appointed in accordance with this section.
             (g) A majority of the Board constitutes a quorum, and the Board shall act by a
     vote of a majority present at any meeting attended by a quorum. Vacancies among the
     Commissioners shall not affect their power and authority so long as a quorum remains.
     Within thirty (30) days after its selection, as herein provided, the Board shall hold a
     meeting to elect a Chairman, a Vice Chairman, and a Secretary. The Chairman shall
     give notice of all meetings of the Board and shall preside at all regular and special
     meetings. The Secretary shall keep minutes of all regular and special meetings of the
     Board. The Board may elect such other officers as shall from time to time be deemed
     advisable by the Board. The terms and duties of the Chairman, Vice Chairman,
     Secretary, and any other officers deemed advisable by the Board shall be established by
     the Board in the Authority's bylaws.
           (h) The Board may delegate to one (1) or more of its members or to its agents
     and employees such powers and duties as it may deem proper.
             (i) The Board shall hold meetings at such times and places as the Board may
     determine and all such meetings shall be open to the public. Special meetings may be
     called and held upon such notice and in such manner as the Board may, by resolution or
     bylaw, determine. Except as otherwise expressly provided herein, the Board shall
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     establish its own rules of procedure. Any action taken by the Board exercising its powers
     and authority under the provisions of this act may be exercised by vote or resolution at
     any regular or special meeting.
             0) All Commissioners shall serve without compensation except that by resolution
     of the Board each Commissioner may receive a per diem payment in an amount up to
     but not exceeding one hundred dollars ($100) per Commissioner per meeting of the
     Authority; provided, however, that the Commissioners shall not be compensated for
     more than twelve (12) meetings in one (1) calendar year. All Commissioners shall be
     entitled to the reimbursement of actual expenses incurred in connection with the
     performance of their duties.
     SECTION 4. Powers of the Authority.
            The Authority shall have the following powers in addition to those specified in
     other sections of this act, together with powers incidental thereto or necessary for the
     performance of those hereinafter stated:
                    (1) To sue and be sued and to prosecute and defend, at law or in equity,
            in any court having jurisdiction of the subject matter and of the parties;
                  (2) To adopt bylaws, rules, and regulations for the management and the
            conduct of the affairs of the Authority and of the Board;
                   (3) To have a seal and to alter the same at pleasure; provided, however,
            the absence thereof shall have no effect on the validity of any document,
            instrument, or other writing;
                    (4) To plan, establish, acquire, whether by purchase, exchange, gift,
            devise, lease, the exercise of the power of eminent domain, or otherwise, and to
            construct, equip, furnish, improve, repair, extend, maintain, and operate one (1)
            or more systems within or without the geographic boundary and service areas of
            the County, the Cities and the Utility Districts as such boundaries now or may
            hereafter exist, including all real and personal property, facilities, and
            appurtenances which the Board of the Authority may deem necessary in
            connection therewith and regardless of whether or not such system shall then be
            in existence;
                     (5) To enter into agreements with the County, the Cities, the Utility
            Districts and any other municipality for the orderly transfer of all or any part of the
            system of the County, the Cities, the Utility Districts and any other municipality,
            and to the extent permitted by law and contract, to assume, to reimburse or to
            otherwise agree to pay outstanding obligations or liabilities of the County, the
            Cities, the Utility Districts or such other municipality incurred to acquire, extend,
            or equip the system;
                     (6) To enter into agreements with the County, the Cities, the Utility
            Districts, and any other municipality, to acquire by lease, gift, purchase, or
            otherwise any system or property related thereto, of the County, the Cities, the
            Utility Districts, or any other municipality and operate such system separately or
            as a part of its systems; or enter into agreements with the County, the Cities, the
            Utility Districts, or any other municipality providing for the operation by the
            Authority of the system, or any portion thereof, owned by County, the Cities, the
            Utility Districts, or any other municipality;
                    (7) To acquire, whether by purchase, exchange, gift, devise, lease, the
            exercise of the power of eminent domain, or otherwise, any and all types of
            property, franchises, assets, and liabilities, whether real, personal, or mixed,
            tangible or intangible, and whether or not subject to mortgages, liens, charges, or
            other encumbrances and to hold, sell, lease, exchange, donate, or convey its
            properties, facilities, or services, but only for the purpose of continuing operation
            of any system by the Authority, whenever the Board of the Authority shall find
            such action to be in furtherance of the purposes for which the Authority is hereby
            created; provided, however, revenues of any system of the Authority is hereby
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         accounted for in such manner as not to impair the obligations of contract with
         reference to bond issues or other legal obligations of the transferor and shall fully
         protect and preserve the contract rights vested in the owners of outstanding
         bonds, obligations, or contractual interests; provided, further, any income from
         the sale of the such properties, facilities, and services shall be dedicated to the
         continued operation of any system by the Authority;
                  (8) To buy, sell, store, treat, and distribute water; to collect and provide
         treatment for wastewater from, with or to any municipality or other governmental
         unit of the State or any agency thereof or the United States or any agency
         thereof, or any persons whether public or private, and to enter into contracts,
         agreements, or other arrangements with the County, the Cities, the Utility
         Districts, any municipality or other persons in connection therewith;
                  (9) To make and enter into all contracts, trust instruments, agreements,
         and other instruments with the County, the Cities, the Utility Districts, any
         municipality, the State or agency thereof, the United States or any agency
         thereof, or any person, including, without limitation, bonds, notes, loan
         agreements with the Tennessee Local Development Authority and/or the
         Tennessee Department of Environment and Conservation and other forms of
         indebtedness as if it were a local government as such term is defined in
         applicable statutes governing grants and loans, to construct, equip or extend the
         system, and to enter into contracts for the management and operation of a
         system or any facilities or service of the Authority for the treatment, processing,
         collection, distribution, storage, transfer, or disposal of water and wastewater;
                 (10) To incur debts, to borrow money, to issue bonds, and to provide for
         the rights of the holders thereof;
                  (11) To apply for, accept and pledge donations, contributions, loans,
         guarantees, financial assistance, capital grants, or gifts from the County, the
         Cities, the Utility Districts, any municipality, the State or any agency thereof, the
         United States or any agency thereof, or any person, whether public or private, for
         or in aid of the purposes of the Authority, to enter into agreements in connection
         therewith and to accept the same;
                 (12) To pledge all or any part of the revenues, receipts, donation,
         contributions, loans, guarantees, financial assistance, capital grants, or gifts of
         the Authority, to mortgage and pledge one (1) or more of its systems or any part
         or parts thereof, whether then owned or thereafter acquired, and to assign and
         pledge all or any part of its interest in and rights under contracts and other
         instruments relating thereto as security for the payments of the principal,
         premium, if any, and interest on bonds, refunding bonds, loan agreements or
         notes issued by the Authority;
                 (13) To have control of its systems, facilities, and services with the right
         and duty to establish and charge rates, fees, rental, tolls, deposits, and other
         charges for the use of the facilities and services of the Authority, of the sale of
         materials or commodities by the Authority and to collect revenues and receipts
         therefrom, not inconsistent with the rights of holders of its bonds, refunding
         bonds, and notes;
               (14) To enter onto any lands, waters, and premises for the purpose of
         making surveys, soundings, and examinations in and for the furtherance of the
         purposes authorized by this act;
                  (15) To use any right-of-way, easement, or other similar property right
         necessary or convenient in connection with a system, held by the State or any
         political subdivision thereof, provided the governing body of such political
         subdivision consents to such use;
                 ( 16) To employ and pay compensation to such agents, including
         attorneys, accountants) engineers, architects, and financial advisors, as the
         Board shall deem necessary for the business of the Authority;
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                   (17) To employ and pay compensation to such employees, including a
            general manager, who shall have such authority, duties, and responsibilities as
            the Board deems necessary;
                   (18) To procure and enter into contracts for any type of insurance or
            indemnity against loss or damage to property from any cause, including loss of
            use and occupancy, against death or injury of any act of any member, officer, or
            employee of the Authority in the performance of the duties of the office or
            employment or any other insurable risk, including the payment of its bonds,
            refunding bonds or notes, as the Board in its discretion may deem necessary;
                     (19) To enter into, by contract with the County, the Cities, and/or the
            Utility Districts, or otherwise, a plan for pension, disability, hospitalization, and
            death benefits for the officers and employees of the Authority;
                     (20) To exercise all powers expressly given to it and necessarily implied
            therefrom, to make and execute contracts and all other instruments necessary or
            convenient to do any and all things for the exercise of its powers hereunder, and
            to establish and make rules and regulations not inconsistent with the provision of
            this act, deemed expedient for the management of the Authority's affairs;
                   (21) To adopt purchasing procedures for the Authority in accordance with
            the purchasing procedures for Utility Districts as defined in Tennessee Code
            Annotated, Title 7, Chapter 82, Part 8;
                   (22) To make all necessary investments, in the discretion of the Board,
            consistent with the powers of local governments to make such investments as
            provided in Tennessee Code Annotated, Section 9-1-107; and
                    (23) To become a member of a local chamber of commerce.
     SECTION 5. Condemnation and eminent domain.
             The Authority may condemn in its own name any land, rights in land, easements,
     and/or rights-of-way which in the judgment of the Board are necessary for carrying out
     the purposes for which the Authority is created. Such property or interest in such
     property may be so acquired whether or not the same is owned or held for public use by
     persons having the power of eminent domain, or otherwise held or used for public
     purposes; provided, however, such prior public use will not be interfered with by the use
     to which such property will be put by the Authority. Such power of condemnation may be
     exercised in any mode or manner prescribed by any applicable statutory provisions now
     in force or hereafter enacted for the exercise of the power of eminent domain.
     SECTION 6. Rates sufficient to pay costs and retire bonds.
            The Board shall prescribe and collect reasonable rates, fees, tolls, or charges for
     the services, facilities, and commodities of any system, shall prescribe penalties for the
     nonpayment thereof, and shall revise such rates, fees, tolls or charges from time to time
     whenever necessary to ensure _that any system shall be and always remain self-
     supporting. The rates, fees, tolls, or charges prescribed shall be such as will always
     produce revenue at least sufficient:
                   (1) To provide for all expenses of operation and maintenance of the
            system, including reserves therefor;
                   (2) To pay when due all bonds, notes and interest and premium thereon
            for the payment of which such revenues are or shall have been pledged,
            charged, or otherwise encumbered, including reserves therefor;
                   (3) To provide for the redemption and purchase bonds, in which case
            such bonds shall be·cancelled)
                    (4) To provide for the creation and maintenance of a cash working fund;
            and
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                   (5) To provide for the acquisition, extension, and improvement of the
            system.
     SECTION 7. Notes of the Authority.
             (a) The Authority may issue, by resolution adopted by the Board, interest-bearing
     bond anticipation notes for all purposes for which bonds can be legally authorized and
     issued by the Authority. Such notes shall be secured by the proceeds from the sale of
     the bonds in anticipation of which the notes are issued and additionally secured by a lien
     upon the revenues of the system on a parity with the bonds in anticipation of which such
     notes are issued. In no event shall the amount of outstanding bond anticipation notes
     exceed the principal amount of the bonds to be issued by the Authority. The notes shall
     mature not later than two (2) years from their date of issuance and may be extended or
     renewed for not more than two (2) additional periods of two (2) years each by resolution
     of the Board and the issuance of renewal or extension notes.
             (b) Notes shall be sold at public or private sale for not less than ninety-seven
     percent (97%) of the par value thereof and accrued interest as the Board may direct.
     Notes may be sold in one (1) or more series, may bear such date or dates, may bear
     interest at such rate or rates (which may vary from time to time), may be payable at such
     time or times, may be in such denomination or denominations, may be in such form,
     either coupon or registered, may be payable at such place or places, may be executed
     in such manner, may be payable in such medium of payment, may be subject to such
     terms of redemption, without a premium or, for notes sold for not less than the par value
     thereof and accrued interest, without or with a premium, all as may be provided by
     resolution of the Board.
             (c) Notes shall be executed in the name of the Authority by the proper officials
     authorized to execute the same, together with the seal of the Authority attached thereto.
             (d) The proceeds arising from the sale of such notes shall be disbursed as
     provided by the resolution authorizing the issuance of the notes. The term "bond
     anticipation notes" includes interim certificates or other temporary obligations which may
     be issued by the Authority to the purchaser of such notes upon the terms and conditions
     herein provided. When the bonds shall be issued and sold a sufficient amount of the
     proceeds of the bonds shall be applied to the payment of the notes at their maturity or
     upon their earlier redemption as directed by the Board by resolution.
             (e) The Authority herein granted to issue "bond anticipation notes" also includes
     the issuance of "grant anticipation notes," to be secured by the grant in anticipation of
     which such notes are issued, with all provisions of this section being applicable to such
     grant anticipation notes.
     SECTION 8. Bonds of the Authority.
              (a) The Authority shall have the power to issue bonds from time to time to finance
     the construction, purchase, acquisition, extension, improvements and equipping of one
     ( 1) or more systems. All bonds issued shall be payable solely out of the revenues and
     receipts derived from the system for which such bonds are issued or as may be
     designated in the proceedings under which the bonds shall be authorized to be issued.
     Such bonds may be issued in one (1) or more series, may be executed and delivered at
     any time and from time to time, may be in such form and denomination and of such
     terms and maturities, may be subject to redemption prior to maturity either with or
     without premium, may be in fully registered form, may bear such conversion privileges
     and be payable in such installments and at such time or times not exceeding forty (40)
     years from the date thereof, may be payable at such place or places whether within or
     without the State of Tennessee, may bear interest at such rate or rates payable at such
     time or times and at such place or places and evidenced in such manner, and may
     contain such provisions not inconsistent herewith, all as shall be provided in the
     proceedings whereunder the bonds shali be authorized to be issued.
            (b) Bonds may be sold at public or private sale for such price and in such manner
     and from time to time as may be determined by the Board of Commissioners to be most
     advantageous, and the Authority may pay any and all expenses, premiums, and
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     commission which its Board of Commissioners may deem necessary or advantageous in
     connection with the issuance thereof.
            (c) All bonds and the interest applicable thereto are hereby made and shall be
     construed to be negotiable instruments.
            (d) Interim certificates or notes or other temporary obligations pending the
     issuance of revenue bonds shall be payable out of proceeds of bonds or other funds of
     the Authority available for such purpose.
             (e) Proceeds of bonds may be used for the purpose of constructing, acquiring,
     reconstructing, improving, equipping, furnishing, bettering, or extending a system,
     including the payment of interest on the bonds during construction of any project for
     which bonds are issued and for two (2) years after the estimated date of completion, the
     payment of engineering, fiscal, architectural, bond insurance, and legal expenses
     incurred in connection therewith and the issuance of bonds, and the establishment of a
     reasonable reserve fund for the payment of principal of and interest on such bonds if a
     deficiency occurs in the revenues and receipts available for such payment.
     SECTION 9. Refunding bonds of the Authority.
            (a) Any bonds at any time outstanding may at any time and from time to time be
     funded by the issuance of refunding bonds in such amount as the Board may deem
     necessary, but not exceeding the sum of the following:
                   (1) The principal amount of the bonds being refinanced;
                   (2) Applicable redemption premiums thereon;
                    (3) Unpaid interest on such bonds to the date of delivery or exchange of
            the refunding bonds;
                    (4) If the proceeds from the sale of the refunding bonds are to be
            deposited in trust as hereinafter provided, interest to accrue on such obligations
            from the date of delivery to the first or any subsequent available redemption date
            or dates elected, in its discretion, by the Board, or to the date or dates of
            maturity, whichever shall be determined by the Board to be the most
            advantageous or necessary to the Authority;
                   (5) A reasonable reserve for the payment of principal of and interest on
            such bonds and/or a renewal and replacement reserve;
                    (6) If the project to be constructed from the proceeds of the obligations
            being refinanced has not been completed, an amount sufficient to meet the
            interest charges on the refunding bonds during the construction of such project
            and for two (2) years after the estimated date of completion (but only to the
            extent that interest charges have not been capitalized from the proceeds of the
            obligations being refinanced); and
                    (7) Expenses, premiums, and commissions of the Authority, including
            bond discount deemed by the Board to be necessary for the issuance of the
            refunding bonds. A determination by the Board that any refinancing is
            advantageous or necessary to the Authority or that any of the amounts provided
            in the preceding sentence shall be included in such refinancing, or that any of the
            obligations to be refinanced shall be called for redemption on the first or any
            subsequent available redemption date or permitted to remain outstanding until
            their respective dates of maturity shall be conclusive.
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             (b) Any such refunding may be effected whether the bonds to be refunded shall
     have then matured or shall thereafter mature, either by the exchange of the refunding
     bonds for the bonds to be refunded thereby with the consent of the holders of the bonds
     so to be refunded, or by sale of the refunding bonds and the application of the proceeds
     thereof to the payment of the bonds refunded thereby, and regardless of whether or not
     the bonds to be refunded were issued in connection with the same projects or separate
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     projects, and regardless of whether or not the bonds proposed to be refunded shall be
     payable on the same date or different dates or shall be due serially or otherwise.
             (c) At the time of delivery of the refunding bonds, the bonds to be refunded will
     not be retired or a valid and timely notice of redemption of the outstanding bonds is not
     given in accordance with the resolution, indenture, or other instrument governing the
     redemption of the outstanding bonds, then, prior to the issuance of the refunding bonds,
     the Board shall cause to be given adequate notice of its intention to issue the refunding
     bonds. The notice shall be given either by mail to the owners of all the outstanding
     bonds to be refunded at their addresses shown on the bond registration records for the
     outstanding bonds, or· given by publication, or by such other means which may be
     deemed sufficient pursuant to the laws of this State. The notice shall set forth the
     estimated date of delivery of the bonds, refunding bonds and identify the bonds, or the
     individual maturities thereof, proposed to be refunded; provided, that if portions of
     individual maturities are proposed to be refunded the notice shall identify the maturities
     subject to partial refunding and the aggregate principal amount to be refunded within
     each maturity. If the issuance of the refunding bonds does not occur as provided in the
     notice, the governing body shall cause notice thereof to be given as provided above.
     Except as otherwise set forth in this section, the notice required pursuant to this section
     shall be given whether or not any of the bonds to be refunded are to be called for
     redemption.
            (d) If any of the obligations to be refunded are to be called for redemption, notice
     of redemption shall be given in a manner required by the proceedings authorizing such
     outstanding obligations.
             (e) The principal proceeds from the sale of any refunding bonds shall be applied
     only as follows, either:
                   (1) To the immediate payment and retirement of the bonds being
            refunded; or
                    (2) To the extent not required for immediate payment of the bonds being
            refunded, such proceeds shall be deposited in trust to provide for the payment
            and retirement of the bonds being refunded and to pay any expenses incurred in
            connection with such refunding, but provision may be made for the pledging and
            disposition of any surplus, including, without limitation, provisions for the pledging
            of any such surplus to the payment of the principal of, premium, if any, and
            interest or any issue or series of refunding bonds. Money in any such trust fund
            may be invested in the discretion of the Board.
              (f) Nothing herein shall be construed as a limitation on the duration of any deposit
     in trust for the retirement of obligations being refunded, but which shall not have matured
     and which shall not be presently redeemable or, if presently redeemable, shall not have
     been called for redemption.
     SECTION 10. Security for payment of bonds and notes.
             (a) The principal of, premium, if any, and interest on any bonds, refunding bonds
     and notes may be secured by a pledge of revenues and receipts of a system. The
     proceedings under which the bonds refunding bonds, or notes are authorized to be
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     issued may contain any agreements, provisions, and covenants respecting the
     maintenance of such system or other facilities covered thereby, the fixing and collection
     of rents, fees, or payments with respect to any system or portions thereof covered by
     such proceedings, the creation and maintenance of special funds from such revenues
     and from the proceeds of such bonds, refunding bonds and notes and the rights and
     remedies available in the event of default, all as the Board shall deem advisable and not
     in conflict with the provisions of this act. To the extent provided in the proceedings
     authorizing any bonds, refunding bonds, or notes each pledge and agreement made for
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     the benefit of security of any of the bonds, refunding bonds, or notes shall continue in
     effect until the principal of and interest on the bonds, refunding bonds, or notes for the
     benefit of which the same were made shall have been fully paid or adequate provision
     for the payment thereof shall have been made by the Authority. In the event of a default
     in such payment or in any agreements of the Authority made as part of the proceedings
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     under which the bonds, refunding bonds, or notes were issued, such payment or
     agreement may be enforced by suit, mandamus, or the appointment of a receiver in
     equity, or the proceedings under which the bonds, refunding bonds, or notes are issued.
            (b) The Board may designate the appropriate officials to execute all documents
     necessary to guarantee or in any other manner to secure the payment of the bonds or
     notes of the Authority; provided, however, the approval of the governing body of the
     County or District to such guarantee or security shall have been obtained before the
     execution of such documents. Provided, further prior to any meeting where such
     authorization will be considered by the governing body of the County or District, the
     governing body shall cause reasonable public notice to be published describing the
     matter to be considered and containing an estimate of the dollar amount of any
     contingent liability by the County or District of such authorization is given.
             (c) Bonds, notes, or refunding bonds may constitute a joint obligation of the
     Authority and the County or District. Any such bond, note, or refunding bond upon which
     the County is jointly obligated with the Authority may be secured by the full faith and
     credit and unlimited ad valorem taxing power of the County. Bonds, notes or refunding
     bonds issued as a joint obligation of the Authority and the County shall be issued in the
     form and manner of Tennessee Code Annotated, Title 9, Chapter 21, Parts 1, 2, and 9,
     where applicable, and in the event of a conflict between this act and Tennessee Code
     Annotated, Title 9, Chapter 21, Parts 1, 2, and 9, then the provisions of Tennessee Code
     Annotated, Title 9, Chapter 21, Parts 1, 2, and 9, shall prevail. Notes issued as a joint
     obligation of the Authority and the County shall be issued in the form and manner of
     Tennessee Code Annotated, Title 9, Chapter 21, Parts 1, 4, and 5, where applicable and
     in the event of a conflict between this act and the provisions of Tennessee Code
     Annotated, Title 9, Chapter 21, Parts 1, 4, and 5, shall prevail.
              (d) Any bond, note, or refunding bond issued under this act may be secured by a
     mortgage or deed of trust covering any or all part of the property, real or personal, of the
     Authority. Any pledge, of lien, on revenues, fees, rents, tolls or other charges received or
     receivable by any local government to secure the payment of any bonds, notes, or
     refunding bonds issued pursuant to the act and the interest thereon, shall be valid and
     binding from the time that the pledge or lien is created and granted and shall inure to the
     benefit of the holder or holders of any such bonds, notes, or refunding bonds until
     payment in full of the principal and premium and interest thereon. Neither the resolution
     nor any other instrument granting, creating or giving notice of the pledge of a lien, or
     other such security interest, need be filed or recorded to preserve or protect the validity
     or priority of such pledge or lien.
     SECTION 11. Exemption from taxation and state regulation.
             (a) The Authority, its properties at any time owned by it and the income and
     revenues therefrom shall be exempt from all State, county, and municipal taxation. All
     bonds, notes, and refunding bonds issued by the Authority and the income therefrom
     shall be exempt from all State, county, and municipal taxation, except inheritance,
     transfer and estate taxes, or except as otherwise provided by state law. For purposes of
     Tennessee Code Annotated, Title 42, Chapter 2, and any amendments thereto or
     substitution therefor, bonds issued by the Authority shall be deemed to be securities
     issued by a public instrumentality or a political subdivision of the State.
              (b) Neither the Tennessee Public Utility Commission nor any other Board or
     commission of like character hereafter created shall have jurisdiction over the Authority
     in the management and control of a system, including the regulation of its rates, fees,
     tolls, or charges, except to the extent provided by this act.
            (c) The Authority is subject to the jurisdiction of the Tennessee Board of Utility
     Regulation, created under Tennessee Code Annotated, Section 7-82-701.
           (d) The Authority is subject to regulation by the Department of Environment and
     Conservation as a public water supply and public sewerage system.
     SECTION 12. Liability and indebtedness of political subdivisions.
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             (a) Neither the County, the Cities, the Utility Districts, the State, nor any
     municipality other than the Authority shall, except as may otherwise be authorized by the
     Board of Commissioners of the Authority and the governing body of the particular
     governmental entity, in any event be liable for the payment of the principal of, premium,
     if any, or interest on any bonds, notes, or refunding bonds of the Authority or for the
     performance of any pledge, obligation, or agreement of any kind whatsoever which may
     be undertaken by the Authority, and none of the bonds, notes, or refunding bonds of the
     Authority or any of its agreements or obligations shall be construed to constitute an
     indebtedness of the State, or any municipality within the meaning of any constitutional or
     statutory provision whatsoever.
             (b) Bonds, notes, or refunding bonds of the Authority shall not constitute a debt
     or a pledge of the faith and credit of the State or any municipality, except as may
     otherwise be authorized by the governing body of the County, Utility District or Cities,
     and the holders or owners of such bonds shall have no right to have taxes levied by any
     municipality, the State or any other taxing authority within the State for the payment of
     principal of, premium, if any, and interest on such bonds, but shall be payable solely
     from revenues and monies pledges for their payment.
             (c) Except as may otherwise be authorized by the governing body of the County,
     the Cities, or the Utility Districts as specified hereinabove, all such bonds shall contain
     on the face thereof a statement to the effect that the bonds, refunding bonds, or notes
     are not a debt of the State or any municipality or any other taxing authority within the
     State, but are payable solely from revenues and monies pledged to the payment thereof.
     SECTION 13. Dissolution and disposition of funds.
             No part of the net earnings of the Authority remaining after payment of its
     expenses shall inure to the benefit of any persons except as set forth in this section.
     When the Board has determined that the purposes of the Authority have been
     accomplished and no bonds, notes, or refunding bonds of the Authority are outstanding
     and unpaid and adequate provision has been made for the full payment of all liabilities,
     obligations, and contracts of the Authority, the Board may adopt a resolution dissolving
     the Authority. Upon the adoption of such resolution, a certified copy of the resolution
     authorizing the dissolution of the Authority shall be filed with the Secretary of State of
     Tennessee. Upon the filing of the certified copy of the resolution with the Secretary of
     State of Tennessee, the Authority's existence shall terminate. All assets of the Authority
     not used to wind up the affairs of the Authority shall be paid in equal proportions to the
     County, the Cities, the Utility Districts, and to any other municipality which holds a seat
     on the Board in accordance with SECTION 21 at the time of dissolution. To the extent
     allowed by this act, nothing herein contained shall prevent the Board from transferring its
     properties in accordance with the terms of any contract, agreement, or covenant entered
     into or undertaken by the Authority or pursuant to a merger or consolidation of the
     Authority with a county, municipality, utility district or other public corporation authorized
     to provide water and wastewater services.
     SECTION 14. Budget and annual audits.
            (a) The Board shall annually establish and adopt a budget for the Authority.
            (b) The Board shall cause to be prepared each fiscal year an annual audit of the
     books and records of the Authority. The Comptroller of the Treasury, through the
     Department of Audit, is responsible for determining that such audits are prepared in
     accordance with generally accepted governmental auditing standards. A copy of such
     annual audit shall be filed with the office of the County Mayor of Grundy County, the
     Mayor of the Town of Monteagle, and the Mayor of the Town of Tracy City and with the
     governing bodies of the Utility Districts and with the governing body of any other
     municipality which holds a seat on the Board in accordance with SECTION 21.
     SECTION 15. Powers of the Utility Districts.
            (a) The Utility Districts may take all actions hereunder by resolution of its
     governing body. The Utility Districts shall have all powers necessary in order to further
     the purposes of this act, including, without limitation, the power to sell, lease, dedicate,
                                               ., 1
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     donate, or otherwise convey to the Authority any of its interests in any existing water and
     wastewater system, franchises, assets, liabilities, or other related property, whether real
     or personal, or mixed, tangible or intangible, and whether or not subject to mortgages,
     liens, charges, or other encumbrances, or grant easements, licenses, or other rights or
     privileges therein to the Authority and to contract with the Authority.
             (b) The Utility Districts may enter into agreements with the Authority for the
     orderly transfer of all or any part of its system and to enter into agreement for the
     Authority to assume, to pay or to refund bonds, refunding bonds and notes issued by the
     Utility Districts or loan agreements entered into by the Utility Districts to acquire,
     construct, or equip all or any part of a system.
             (c ) The Utility Districts are authorized to advance, donate, or lend money to the
     Authority and to provide that funds available to it for a system shall be paid to the
     Authority.
              (d) A utility district shall have the same right to enter into any agreement with the
     Authority that the Board deems necessary to carry out the purposes of this act, as the
     utility district has to enter into similar agreements with water and wastewater treatment
     authorities as provided by Tennessee Code Annotated, Title 68, Chapter 221, Part 6,
     and by the Utility District Law under Tennessee Code Annotated, Title 7, Chapter 82.
     SECTION 16. Powers of the County.
             (a) The County may take all actions hereunder by resolution of its governing
     body. The County shall have all powers necessary to further the purposes of this act,
     including, without limitation, the power to sell, lease, dedicate, donate, or otherwise
     convey to the Authority any of its interests in any existing water and wastewater system,
     franchises, assets, liabilities, or other related property, whether real or personal, or
     mixed, tangible or intangible, and whether or not subject to mortgages, liens, charges, or
     other encumbrances or grant easements, licenses, or other rights or privileges therein to
     the Authority and to contract with the Authority.
             (b) The County, through its governing body is authorized to issue joint obligations
     with the Authority and to pledge its full faith and credit and unlimited taxing power to
     such bonds, notes, or refunding bonds and to guarantee the bonds, notes, or refunding
     bonds as set forth in SECTION 10.
              (c) The County may enter into agreements with the Authority for the orderly
     transfer of all or any part of its system and to enter into agreements with the Authority for
     the Authority to assume, to pay or to refund bonds, refunding bonds and notes issued by
     the County or loan agreements entered into by the County to acquire, construct or equip
     all of any part of a system.
            (d) The County may advance, donate or lend money to the Authority and to
     provide that funds available to it for a system shall be paid to the Authority.
             (e) The County has the power to enter into any other agreement with the
     Authority that the Board deems necessary to carry out the provisions of this act.
     SECTION 17. Powers of the Cities.
             (a) The Cities may take all actions hereunder by resolution of its governing body.
     The Cities shall have all powers necessary to further the purposes of this act, including,
     without limitation: the power to sell, lease, dedicate, donate, or otherwise convey to the
     Authority any of their interests in any existing water .and wastewater system, franchises,
     assets, liabilities, or other related property, whether real or personal, or mixed, tangible
     or intangible, and whether or not subject to mortgages, liens, charges, or other
     encumbrances or grant easements, licenses, or other rights or privileges therein to the
     Authority and to contract with the Authority.
             (b) The Cities, through their governing bodies, are authorized to issue joint
     obligations with Authority and to pledge their full faith and credit and unlimited taxing
                                               12
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     power to such bonds, notes, or refunding bonds and to guarantee the bonds, notes, or
     refunding bonds as set forth in SECTION 10.
             (c) The Cities may enter into agreements with the Authority for the orderly
     transfer of all or any part of their systems and to enter into agreements with the Authority
     for the Authority to assume, to pay or to refund bonds, refunding bonds, and notes
     issued by the Cities or loan agreements entered into by the Cities to acquire, construct
     or equip all or any part of a system.
            (d) The Cities may advance, donate or lend money to the Authority and to
     provide that funds available to them for systems shall be paid to the Authority.
     SECTION 18. Collection of sewer charges.
            (a) As used in this section, "sewer" means waste water collection and/or
     treatment.
              (b) The Authority may enter into contracts with any public or private corporation
     providing sewer services or with any municipality operating a water system for the
     collection of sewer charges. The Authority, or any municipality so contracting with the
     Authority or contracting directly with any public or private corporation providing sewer
     services, is authorized and empowered:
                   (i) To meter, bill and collect sewer service charges as an added
            designated item on its water service bills, or otherwise;
                   (ii) To discontinue water service to sewer users who fail or refuse to pay
            sewer service charges;
                   (iii) Not to accept payment of water service charges from any customer
            without receiving at the same time payment of any sewer service ch~rges owed
            by such customer; and
                   (iv) Not to reestablish water service for any customer until such time as all
            past due sewer service charges owed by such customer have been paid.
             (c) Such municipality is hereby authorized to perform all acts and discharge all
     obligations required by the provisions of any such contract or contracts.
     SECTION 19. Powers not restricted.
             Neither this act nor anything herein contained shall be construed as a restriction
     or a limitation upon any powers which a county, city or utility district might otherwise
     have under any laws of this State, but shall be construed as cumulative of and
     supplemental to any such powers. No proceeding, notice, or approval shall be required
     with respect to the issuance of any bonds, refunding bonds, or notes of the Authority or
     any instrument as security therefore except as provided in this act, any law to the
     contrary notwithstanding; provided, however, nothing herein shall be construed to
     deprive the State of Tennessee and its governmental subdivisions of their respective
     police powers, or to impair any power of any official or agency of said State and its
     governmental subdivisions which may be otherwise provided by law.
     SECTION 20. Agreements with the Authority.
             The Authority is hereby authorized, whenever the same shall be found desirable
     by its Board, to enter into contracts, agreements, or other arrangements with any
     municipality for the purchase or sale of water to such municipality or for the treatment,
     transportation or collection of wastewater to or for such municipality. Any such contract
     or agreement may extend for any period not exceeding forty (40) years from the date
     thereof.
            Any utility district seeking to enter into such agreement with the Authority shall
     have the same rights and liabilities as it would otherwise have in entering into a similar
     agreement with a water and wastewater treatment authority as provided by Tennessee
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     Code Annotated, Title 68, Chapter 221, Part 6, and the Utility District Law under
     Tennessee Code Annotated, Title 7, Chapter 82.
     SECTION 21. Changes in size of the Board of Commissioners.
             Should a municipality not represented on the Authority's initial Board of
     Commissioners as set forth in SECTION 3 enter into a contract to sell water to or
     purchase water from the Authority, or enter into a contract with the Authority for the
     treatment, transportation or collection of wastewater to or for such municipality, such
     municipality shall be eligible to have a representative on the Authority's Board of
     Commissioners. The Authority's Board of Commissioners shall have the sole discretion
     to determine whether to increase the size of the Authority's Board of Commissioners to
     allow an eligible municipality to have a seat on the Board. Any increase in the size of the
     Authority's Board of Commissioners for an eligible municipality shall require a two-thirds
     (2/3) vote of the Board.
              The number of Commissioners on the Authority's Board of Commissioners shall
     always be an odd number. If the Authority's Board of Commissioners decides to increase
     the size of its Board for an eligible municipality as described in the preceding paragraph
     and such increase results in the Board having an even number of Commissioners, the
     Commissioner for the eligible municipality shall replace the at-large Commissioner
     selected pursuant to SECTION 3(c)(2) at the end of the at-large Commissioner's existing
     one-year term, and the at-large Commissioner seat on the Board shall cease to exist. If
     the eligible municipality is a city or county, the initial Commissioner for the eligible
     municipality shall be the mayor of the city or county or such mayor's designee whose
     term of office shall be concurrent with the term of the mayor. If the eligible municipality is
     a utility district, the initial Commissioner shall be appointed by the governing body of
     utility district. Such Commissioner's initial term shall expire on the same date as the
     terms of the other Board members representing utility districts on the Board at the time
     of appointment, and thereafter such Commissioner's term shall be four (4) years.
              In the event a utility district that holds a seat on the Board of Commissioners
     merges into or consolidates with another utility district or municipality so that the utility
     district is dissolved, the size of the Board shall contract to one (1) less seat because of
     such dissolution and such utility district's seat on the Board shall cease to exist. If this
     contraction of the Authority's Board of Commissioners results in the Board having an
     even number of Commissioners, the seat of the at-large Commissioner shall also cease
     to exist upon the effective date of the dissolution of the utility district so that the number
     of the Authority's Board of Commissioners shall remain an odd number.
             In the event the at-large Commissioner seat is no longer in existence as a result
     of adding an additional seat to the Board for an eligible municipality or the contraction of
     the Board on account of the dissolution of a utility district as described in the two (2)
     preceding paragraphs, the Authority's Board of Commissioners may re-establish the at-
     large Commissioner seat described in SECTION 3(c)(2) if necessary to maintain an odd
     number of Commissioners on the Board should the Board decide to add any additional
     seats to the Board as set forth in this section or the size of the Board is contracted again
     by the dissolution of any other utility district with a seat on the Board.
     SECTION 22. Liberal construction.
              This act is remedial in nature and shall be liberally construed to affect its purpose
     of providing for a systematic and efficient means of distributing and encouraging the best
     utilization and conservation of water resources and wastewater service and the powers
     herein granted may be exercised without regard to requirements, restrictions or
     procedural provisions contained in any other law or charter except as herein expressly
     provided. Provided, however, that the continued operation of any utility district entering
     into an agreement with the Authority, including the Utility Districts, as provided in
     SECTION 18 of this act, shall be in compliance with the Utility District Law under
     Tennessee Code Annotated, Title 7, Chapter 82.
     SECTION 23. Severability.
                                               14
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               If any provIsIon of this act or the application thereof to any person or
       circumstance is held to be invalid, such invalidity shall not affect any other provision or
       application of the act which can be given effect without the invalid provision or
       application, and to that end the provisions of this act are declared to be severable.
        SECTION 24. This act shall have no effect unless it is approved by a two-thirds (2/3)
vote of the legislative body of Grundy County. Its approval or nonapproval shall be proclaimed
by the presiding officer of the legislative body and certified to the secretary of state.
       SECTION 25. For the purpose of approving or rejecting the provisions of this act, it shall
be effective upon becoming a law, the public welfare requiring it. For all other purposes, it shall
become effective as provided in Section 24.
                                                15
                     HOUSE BILL NO.     2667
PASSED:    April 23. 2026
                                            -~
                                      CAMERON SEXTON, SPEAKER
                                      HOUSE OF REPRESENTATIVES
                            ~. :A» ~~,,~
                                        '  RANDY MCN4Y
                                            SPEAKER OF THE SENA TE
APPROVED this #,I~     day of   [Vb ,. 1  2026
BILL LEE, GOVERNOR
                  ..,.~·    ~-
                                                                                                                                 Local Legislative Body
                                                                                                                                   RECEIVED
                                                                                                                                            Jul 21 2026
                                                                                                                                     Secretary of State
                                           NOTICE TO SECRETARY OF STATE  Division of Publications
                                           OF RATIFICATION OF PRIVATE ACT
                                                            SECRETARY OF STATE
                                                              Division of Publications
                                                        312 Rosa L. Parks Avenue, 8th Floor
                                                       William R. Snodgrass Tennessee Tower
                                                                Nashville, TN 37243
                  Private Chapter No. _ _ _71_ - - ~ which is _ _ _ _H_o_u_s_e_ _ __
                                                                                             (House or Senate)
                 Bill No. _ _ _2_66_7_ _ _ ofthe 114th General Assembly,
                 @Passed  D Failed  D Nb Action Taken
                 The vote took place on  , and the results were as follows:
                 _q__ Votes For
                 _O
                  __ Votes Against
                 ____O__ Abstention
                 (please list number of votes)
                         Embossed Seal:
                          (if applJicable)
                                                                                                   County or City
                                                                                             I Date (mm't<ld!yyyy)
SS-7032 (Rev. 01/25)   Please return completed form to Division of Publications, 312 Rosa L. Parks Avenue, 8th Floor, Nashville, TN 37243  RDA 1677