42-4-109 - Bonds. - Tennessee Statutes

42-4-109. Bonds.

(a)  (1)  An authority has the power to borrow money for any of its corporate purposes and issue its revenue bonds therefor, 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, which bonds may be sold at public or private sale. Revenue bonds may be issued for the above purposes and the authority may pledge as security for the bonds all or any portion of the landing fees, concession fees, rents, charges, or any other revenues derived from the operation of the airport. Further, the payment or purchase of revenue bonds, if issued for an 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 power of the creating municipality or any participating municipality. The revenue bonds and/or revenue refunding bonds shall be issued in the manner provided for a local government in title 9, chapter 21; provided, that any fees, rents, or charges so pledged that are fixed and established pursuant to the provisions of a lease or contract shall not be subject to revision or change except in the manner provided in the 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 an airport or air navigation facility (and they shall so state on their face) shall not constitute a debt of any municipality, the state, or any political subdivision thereof, other than the authority or any municipality guaranteeing the payment or purchase of the bonds in the manner provided in this section, 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, creating municipality or any participating municipality 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, creating municipality or any participating municipality may determine, including, without limitation, provisions permitting the authority, creating municipality or participating municipality to indemnify or otherwise pay any person for any loss of benefits under the agreement upon early termination thereof or default under the 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 law 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 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 the security therefor, to have been issued pursuant to this chapter and for such purpose or purposes.

(d)  Bonds issued by an authority pursuant to 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, shall be 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 creating municipality, or any participating municipality, may by resolution pledge the full faith and credit and unlimited taxing power of the municipality as guarantor to the payment of the principal of, 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 the principal, premium, interest or purchase price or the payment of amounts payable under any interest rate exchange agreement.

     (2)  Prior to any meeting where any such guarantee will be considered by the governing body of a creating or participating municipality, a notice shall be published at least five (5) days in advance of such meeting in a newspaper of general circulation within the creating or participating 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 creating or participating municipality.

     (3)  In the event of any such pledge of 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 the bonds, any financial institution providing any agreement on the payment of principal, premium, interest, purchase price on the bonds or any party to any interest rate exchange agreement with respect to the 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 the holder's rights against the municipality so pledging, and the governing body of the municipality and any officer, agent, or employee of the 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, the taxes, revenues, and charges. The taxes herein authorized to be pledged 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 declared to have been levied for county and corporation purposes, respectively, within the meaning of the Constitution of Tennessee, article II, § 29.

[Acts 1969, ch. 174, § 9; 1975, ch. 298, § 1; T.C.A., § 42-709; Acts 1988, ch. 750, § 49; 1989, ch. 514, §§ 1, 2.]