§ 49-3-1206 — Project financing agreements

(a) (1) The authority has the power to finance projects for the Tennessee student assistance corporation or for institutions under an agreement or agreements with the corporation or with the board governing the institution for which the project is to be provided, and the corporation and each of the boards shall have the power and authority to undertake such an agreement or agreements. (2) Each such agreement shall provide that the authority shall make available to the corporation or the board that is a party to the agreement, under such terms and conditions as shall be agreed upon in the agreement, such portion or portions of the proceeds of sale of the bonds and notes issued by the authority to finance the project or projects to which the agreement relates as the authority shall determine to be available for the purpose of financing the costs of the project or projects. (b) The corporation or a board is authorized and empowered, in connection with any agreement undertaken pursuant to this section to which it is a party, and subject to such agreements with third parties as may then exist, to: (1) Pledge or assign to the authority all or any portion of the revenues, fees, rentals and other charges and moneys received or to be received by or for the institution or the corporation for which the project is undertaken pursuant to the agreement, which may be available for the purpose of paying the fees and charges due the authority under the agreement, so that the payment of the fees and charges may be fully secured and protected; (2) Deduct from amounts appropriated by the general assembly for the operation and maintenance of the institution for which the project is undertaken pursuant to the agreement, or from amounts appropriated for the operation of an educational loan program established pursuant to chapter 4 of this title, for which the project is undertaken pursuant to the agreement, and pay to the authority such amount or amounts as may be required to make up any deficiencies in the revenues, fees, rentals and other charges and moneys available to the board or the corporation for the purpose of paying the fees and charges due the authority under the applicable agreement; (3) Set aside reserves and agree to the maintenance, regulation and disposition of the reserves; (4) Agree to limitations on the purpose to which the proceeds of sale of authority notes and bonds may be applied and the manner in which the notes and bonds shall be disbursed and applied and the pledging of such proceeds to secure the payment of authority notes or bonds or of any issue of the notes or bonds; (5) Agree to limitations on the undertaking of additional obligations payable from the revenues, fees, rentals and other charges and moneys of the applicable institution or the corporation with the authority, or with others, and the terms upon which the additional obligations may be undertaken; (6) Upon receipt of any notice of assignment by the authority of the fees and charges payable to the authority under an agreement, recognize and give effect to the assignment, and pay to the assignee the fees and charges then due or that may become due under the agreement that have been so assigned by the authority; and (7) Agree to any other matters, of like or different character, that in any way affect the security or protection of the fees and charges required to be made under the terms of an agreement with the authority. (c) In order to comply with the terms and provisions of any agreement undertaken by it with the authority pursuant to this section, the Tennessee student assistance corporation, to the extent authorized by other statutes and regulations, or a board shall have power to: (1) Fix and maintain: (A) Fees, rentals and other charges from students, faculty members and others using or being served by, or having the right to be served by, a project; (B) Matriculation, hospital, laboratory, athletic, admission and other fees from students, faculty members and others matriculated, attending or employed at an institution, which shall be uniform for all those similarly situated; and (C) Fees, rentals and other charges from students, faculty members and others using or being served by, or having the right to use, or having the right to be served by, existing buildings, stadia and other structures at the applicable institution, which fees, rentals and other charges shall be uniform for all those similarly situated or accommodated; and (2) Covenant with the authority as to the fixing, maintaining and collecting of the fees, rentals and other charges. (d) (1) The authority has the power and authority to finance school credit bond projects for a local government under a loan agreement for the sole purpose of enabling the local government or public charter school to benefit from the issuance of qualified zone academy bonds, as defined in [former] § 54E of the Internal Revenue Code of 1986 ( 26 U.S.C. § 54E [repealed]), or qualified school construction bonds, as defined in [former] § 54F of the Internal Revenue Code of 1986, ( 26 U.S.C. § 54F [repealed]), or both. The authority shall develop the application and review procedure for the loans and bonds. The authority, and to the extent requested by the authority, the department of education, shall have such other powers as may be necessary and appropriate for the exercise of the powers and duties conferred by this part. (2) Any local government is authorized by resolution of its governing body to enter into such loan agreement with the authority with respect to a school credit bond project upon such terms and conditions as may be determined by the authority pursuant to subdivision (d)(1) in such agreement and by the governing body of such local government, notwithstanding and without regard to the restrictions, prohibitions or requirements of any other law, whether public or private. Counties having a city or cities operating schools independent of the county or having special school districts operating schools independent of the county shall not be required to share proceeds of any loan agreement for a school credit bond project, notwithstanding any other law to the contrary. (3) Each such loan agreement shall provide the terms and conditions under which the authority shall lend to the local government such portion or portions of the proceeds of the sale of the bonds and notes issued by the authority to finance the school credit bond project to which the loan agreement relates. The conditions may include the pledging by the local government of state-shared taxes. The loan may cover cost of issuance. (e) (1) Whenever, and as often as, a local government enters into a loan agreement with the authority under this chapter, the governing body of the local government shall provide by resolution for the levy and collection of a tax upon all taxable property within the local government sufficient to pay when due all amounts payable under the loan agreement as and when such amounts become due and payable, including all fees and charges due the authority under the loan agreement and, furthermore, to pledge such tax and the full faith and credit of the local government to the payments; provided, that a special school district shall provide for the collection of such a tax upon the levy of the tax by the general assembly. The tax shall be assessed, levied, collected and paid in like manner as other taxes of the local government. The tax shall not be included within any statutory or other limitation of rate or amount for the local government, but shall be excluded from and be in addition to and in excess of the statutory or other limitation of rate or amount for the local government, notwithstanding and without regard to the prohibitions, restrictions or requirements of any other law, whether public or private. There shall be set aside from the tax levy into a special fund an amount sufficient for the payment of the annual amount due under any such loan agreement, and the money in the fund shall be used exclusively for such purpose and shall not be used for any other purpose until such amount has been paid in full. (2) The local government shall have the power and authority by resolution of the governing body of the local government to pledge or assign to the authority all or any portion of such taxes, in addition to its share of the state-shared taxes as the meaning is established by § 4-31-102 , that are not otherwise obligated. In the event any local government having entered into a loan agreement pledging state-shared taxes pursuant to this part fails to remit funds in accordance with the payments established by the authority, the commissioner of finance and administration, after notice from the authority of such event, shall, without further authorization, deduct from any state-shared taxes that are otherwise apportioned to the local government the amount required to make the local government current with respect to the unpaid amounts due the authority under the loan agreement and pay such amount to the authority. The authority shall deliver by certified mail to the local government a written notice of the deduction. Furthermore, such local government failing to remit funds in accordance with the payments established by the authority shall levy and assess the additional tax as provided in subdivision (e)(1) necessary to meet the obligation of the local government according to its loan agreement. (3) The local government is authorized to: (A) Set aside reserves and agree to the maintenance, regulation and disposition of the reserves; (B) Agree to limitations on the purpose to which the proceeds of the sale of the authority notes and bonds may be applied and the manner in which the proceeds shall be disbursed and applied and the pledging of the proceeds to secure the payment of authority notes or bonds or of any issue of the notes or bonds; (C) Upon receipt of any notice of assignment by the authority of the fees and charges payable to the authority under a loan agreement, recognize and give effect to the assignment, and pay to the assignee the fees and charges then due or that may become due under the loan agreement that have been so assigned by the authority; and (D) Agree to any other matters of like or different character that in any way affect the security or protection of the fees and charges required to be made under the terms of an agreement with the authority. (4) The state board of education, jointly with the state funding board, may enter into a loan agreement with the authority under this chapter and title 9, chapter 9.

Legislative History

Acts 1965, ch. 256, §§ 5, 6; 1980, ch. 711, §§ 6-11; 1983, ch. 338, § 3; T.C.A., §§ 49-3516, 49-3517; Acts 1999, ch. 429, § 5; 2000, ch. 696, § 2; 2009 , ch. 601, §§ 3 - 5.