(a) The authority shall have power and is authorized to issue its bonds for the construction, acquisition, reconstruction, improvement, betterment, or extension of any system of the authority or to assume and to agree to pay any indebtedness incurred for any of the foregoing purposes. The proceeds of the sale of any bonds may be applied to: (1) The payment of the costs of such construction, acquisition, reconstruction, improvement, betterment, or extension; (2) The payment of the costs associated with any such construction, acquisition, reconstruction, improvement, betterment, or extension, including engineering, architectural, inspection, legal, and accounting expenses; (3) The payment of the costs of issuance of such bonds, including underwriter's discount, financial advisory fee, preparation of the definitive bonds, preparation of all public offering and marketing materials, advertising, credit enhancement, and legal, accounting, fiscal, and other similar expenses; (4) The payment of interest during the period of construction and for six (6) months thereafter on any money borrowed or estimated to be borrowed; (5) Reimbursement of the authority for moneys previously spent by the authority for any of the purposes described in subdivisions (a)(1)-(4); (6) The establishment of reasonable reserves for the payment of debt service on such bonds, or for repair and replacement to the system of the authority for whose benefit the financing is being undertaken, or for such other purposes as the board deems necessary in connection with the issuance of any bonds and operation of the system for whose benefit the financing is being undertaken; (7) The contribution of the authority's share of the funding for any joint undertaking for the purposes set forth in this subsection (a); and (8) The contribution by the authority to any subsidiary or separate entity controlled by the authority for the purposes set forth in this subsection (a). (b) The authority shall have the power and is authorized to issue its bonds to refund and refinance outstanding bonds of the authority hereafter issued or lawfully assumed by the authority. The proceeds of the sale of the bonds may be applied to: (1) The payment of the principal amount of the bonds being refunded and refinanced; (2) The payment of the redemption premium thereon, if any; (3) The payment of unpaid interest on the bonds being refunded, including interest in arrears, for the payment of which sufficient funds are not available, to the date of delivery or exchange of the refunding bonds; (4) The payment of interest on the bonds being refunded and refinanced from the date of delivery of the refunding bonds to maturity or to, and including, the first or any subsequent available redemption date or dates on which the bonds being refunded may be called for redemption; (5) The payment of the costs of issuance of the refunding bonds, including underwriter's discount, financial advisory fee, preparation of the definitive bonds, preparation of all public offering and marketing materials, advertising, credit enhancement, and legal, accounting, fiscal, and other similar expenses, and the costs of refunding the outstanding bonds, including the costs of establishing an escrow for the retirement of the outstanding bonds, trustee, and escrow agent fees in connection with any escrow, and accounting, legal, and other professional fees in connection therewith; and (6) The establishment of reasonable reserves for the payment of debt service on the refunding bonds, or for repair and replacement to the system of the authority for whose benefit the financing is being undertaken, or for such other purposes as shall be deemed necessary in connection with the issuance of the refunding bonds and operation of the system for whose benefit the financing is being undertaken. Refunding bonds may be issued to refinance and refund more than one (1) issue of outstanding bonds, notwithstanding that such outstanding bonds may have been issued at different times. Refunding bonds may be issued jointly with other refunding bonds or other bonds of the authority. The principal proceeds from the sale of refunding bonds may be applied either to the immediate payment and retirement of the bonds being refunded or, to the extent not required for the immediate payment of the bonds being refunded, to the deposit in escrow with a bank or trust company to provide for the payment and retirement at a later date of the bonds being refunded. (c) The authority shall have the power and is authorized to issue its bonds to retire all bonds of the associated municipality issued to finance or refinance any of the systems, and, to the extent permitted by contracts with any of the owners of the municipal bonds, to assume and agree to pay when due the municipal bonds, retire the municipal bonds, or deposit in escrow funds sufficient, together with earnings thereon, to retire the municipal bonds at maturity or upon redemption. The proceeds of such bonds may be used in the same manner and to the same extent as permitted under subsection (b). (d) The authority has the power and is authorized to issue notes in anticipation of the collection of revenues from the system for whose benefit the financing is undertaken for the purpose of financing electrical power purchases, including transmission costs, storage costs, and pipeline capacity costs. Any such notes must be secured solely by a pledge of, and lien on, the revenues of the system for whose benefit the financing is undertaken. The principal amount of notes that may be issued during any twelve-month period must not exceed sixty percent (60%) of total electrical power purchases for the same period, and all notes issued during such period must be retired and paid in full on, or before, the end of such period. The notes must be sold in such manner, at such price, and upon such terms and conditions as may be determined by the board. No notes shall be issued under this subsection (d) unless the electric system has positive retained earnings as shown in the most recent audited financial statements of the system, and the system has produced positive net income in at least one (1) fiscal year out of the three (3) fiscal years next preceding the issuance of the notes as shown on the audited financial statements of the system. No notes issued under this subsection (d) shall be issued without first being approved by the comptroller of the treasury. If revenues of such system are insufficient to pay all such notes at maturity, any unpaid notes may be renewed one (1) time for a period not to exceed one (1) year or otherwise liquidated as approved by the comptroller of the treasury. (e) The authority shall have the power and is authorized to issue its bonds to finance in whole or in part the cost of the acquisition of electrical power purchased from the Tennessee valley authority on a current or long-term prepaid purchase basis and pledge to the punctual payment of any such bonds and interest thereon its rights in such contracts and an amount of the revenues from its electric system, or of any part of such system, sufficient to pay the bonds and interest as the same shall become due and create and maintain reasonable reserves therefor. Such amount shall consist of all or any part or portion of such revenue; and the board in determining the cost of the acquisition of electrical power under this subsection (e) may include all costs and estimated costs of the issuance of the bonds, and all engineering, inspection, fiscal, and legal expenses. (f) Bonds issued under this section as a part of an issue the last maturity of which is not later than five (5) years following the date of issue shall be issued, and referred to, as notes. (g) (1) An authority, whether created pursuant to this chapter or another public or private act, shall not issue a bond, or a note other than a note issued in anticipation of the collection of revenues, as authorized by this chapter or the public or private act creating the authority, until the resolution authorizing the issuance of the bond or note is submitted to the comptroller of the treasury, or the comptroller of the treasury's designee, for review, together with a statement as of the beginning of the then current fiscal year, which must show: (A) The authority's total outstanding bonds, notes, warrants, refunding bonds, and other forms of indebtedness; (B) The maturity dates of the bonds, notes, warrants, refunding bonds, other forms of indebtedness, interest rates, and special provisions for payment; (C) The project to be funded by the bonds or notes; and (D) The current operating financial statement of the authority and other pertinent financial information. (2) The comptroller of the treasury, or the comptroller's designee, shall immediately acknowledge, in writing, receipt of the proposed bond or note issue statement and information. (3) (A) The comptroller of the treasury, or the comptroller's designee, shall, within fifteen (15) days from the date the proposed bond or note issue statement and information is received by the comptroller of the treasury, or the comptroller's designee, issue a report on the proposal to the authority. In addition, the report must: (i) Be published on the authority's website during the week following the report's receipt; and (ii) Be made a part of the bond transcript. (B) The authority may take an action with reference to the proposed bond or note issue as it deems advisable after: (i) (a) Receipt of the report of the comptroller of the treasury, or the comptroller's designee; and (b) Publication of the report made in accordance with subdivision (g)(3)(A); or (ii) Expiration of fifteen (15) days from the date that the proposed bond or note issue was received by the comptroller of the treasury, or the comptroller's designee, whichever is earlier. (h) A provision of this section related to the review or approval of a bond or note issued by the comptroller of the treasury, or the comptroller's designee, or another state agency, does not apply when the bond or other evidence of indebtedness of the authority is to be purchased, or the loan is to be made, by the farmers home administration or another direct lending department of the federal government. (i) (1) Prior to the beginning of the fiscal year, an authority shall adopt a balanced annual operating budget that identifies the authority's anticipated revenues by source and anticipated expenses by type of expense. The budget must be: (A) Based upon historical operating results and reasonably anticipated future operations; and (B) Created in conformity with generally accepted accounting principles and prepared in a form consistent with accepted governmental standards and as approved by the comptroller of the treasury or the comptroller's designee. (2) A budget as adopted must be submitted to the comptroller of the treasury, or the comptroller's designee, for approval. (3) The comptroller of the treasury, or the comptroller's designee, shall provide guidance to the form of a budget, including supplemental schedules, as necessary, to demonstrate that an authority has adequate cash to meet current obligations, including principal and interest, as applicable. (4) If a proper budget is not approved by or submitted to the comptroller of the treasury, or the comptroller's designee, within two (2) months of the beginning of the fiscal year, then the authority shall not issue a debt or financing obligation until the comptroller of the treasury, or the comptroller's designee, has approved the budget, or as otherwise provided for in a manner approved by the comptroller of the treasury, or the comptroller's designee. (5) In the case of an emergency, the comptroller of the treasury, or the comptroller's designee, may waive the requirement of budget approval in order to allow the authority to enter into emergency financial transactions.