Amends TCA Title 7; Title 9 and Section 12-10-116.

This bill requires that certain notes issued by governing bodies of municipalities related to public works projects be approved by the comptroller of the treasury or the comptroller’s designee; and makes other revisions to provisions governing bonds and notes issued by local governments, as follows: (1) Revenue Bond Law. This bill requires that revenue anticipation notes under the Revenue Bond Law first be approved by the comptroller of the treasury or the comptroller's designee. Also, this bill adds that if the revenues of the public works system are insufficient to pay all such notes at maturity, any unpaid notes may be renewed one time for a period not to exceed one year or may be retired with funding bonds issued pursuant to the Cash Basis Law of 1937, or may be otherwise liquidated as approved by the comptroller of the treasury or the comptroller's designee; (2) Emergency Communications District Law. In regard to the authorization for districts to issue bonds, this bill adds any provision of this authorization related to the review or approval of any bond or note issued by the comptroller of the treasury or the comptroller's designee, or other state agency, does not apply when the bond or bonds or other evidence of indebtedness of the district are to be purchased or the loan is to be made by the farmers home administration or any other direct lending department of the government of the United States; (3) Local Government Public Obligations Act of 1986. This bill: (A) Redefines the following terms under the Act: "certain unfunded pension obligations"; public works project"; "refinancing"; and "refunding bonds; and defines "mandated project" as a public works project that a local government is required by a court order or other governmental mandate to construct as determined by the local government with the approval of the comptroller of the treasury or the comptroller's designee; (B) Deletes from the Act the provision whereby, in certain circumstances, a local government that issues bonds for certain unfunded pension obligations is not required to receive a recommendation by the comptroller of the treasury or the comptroller's designee or the approval of the state funding board; (C) Revises the authority of state funding board to exempt certain finance transactions from certain information filing requirements regarding debt obligation issuances. Under present law, the board may exempt from the filing requirements any finance transaction: deemed de minimis by the board; where the public entity is required by statute to participate in the financing program; that is a conduit transaction for a nongovernmental entity; or where the disclosure of costs of the transaction is deemed not consistent with the public disclosure intent of the law. This bill removes these restrictions on the boards authority to exempt and instead provides that the board may develop any exemptions deemed necessary or appropriate from filing requirements; (D) Revises provisions governing the initial general obligation bond resolution to add that the governing body of the local government is not required to adopt an initial resolution for general obligation bonds if the public works project for which the bonds are being issued is a mandated project, and the governing body of a county is not required to adopt an initial resolution for general obligation bonds if the public works project for which the bonds are being issued is a school project; (E) Revises the provisions governing interfund loans to add that local governments that internally lend restricted monies must ensure interest is paid for the use of internal monies. At a minimum, the interest rate must be the highest rate currently being earned on other investments, excluding pension investments. If there are no applicable investments, the interest rate must be the amount that could be earned for deposits in the local government investment pool administered by the state department of treasury; (F) Requires that the sale of all interest-bearing capital outlay notes first be approved by the comptroller of the treasury or the comptroller's designee. This bill sets out in detail the procedure for such approval (G) Revises the provisions governing the purchase price and terms of capital outlay notes and interest rate agreements; (H) Revises the provisions governing certain capitol outlay notes subject to periodic renewals. Under present law, capital outlay notes issued pursuant to those provisions may be issued for a period not to exceed the end of the third fiscal year following the fiscal year in which the notes were issued; provided, that, with the approval of the comptroller of the treasury or the comptroller's designee, the maturity date of such notes may be extended or renewed for not more than two additional periods not exceeding three years each. This bill revises this provision to instead provide that such capital outlay notes may be issued for a period not to exceed the end of the 12th fiscal year following the fiscal year in which the notes were issued. This bill also sets out the manner of repayment for such notes; (I) Revises the provisions governing capital outlay notes issued solely for the acquisition of a fee simple absolute interest in land; provides that capital outlay notes may be refunded with general obligation refunding bonds; and clarifies provisions governing the method for selling certain capital outlay notes to provide that such notes that mature not later than the third fiscal year after the fiscal year in which the notes are issued may be sold in such manner either at a competitive public sale or at a private negotiated sale as the governing body of the local government may direct. Capital outlay notes issued solely for the acquisition of a fee simple absolute interest in land to the seller of such land or such seller's designee and that are issued for a period not to exceed the end of the 10th fiscal year following the fiscal year in which the notes were issued may be sold by private negotiated sale. Capital outlay notes issued for a period greater than the end of the third fiscal year following the fiscal year in which the notes were issued, but not greater than the end of the 12th fiscal year following the fiscal year in which the notes were issued with a principal amount not in excess of $5 million must be sold at competitive public sale or by the informal bid process. Capital outlay notes issued for a period greater than the end of the third fiscal year following the fiscal year in which the notes were issued, but not greater than the end of the 12th fiscal year following the fiscal year in which the notes were issued with a principal amount in excess of $5 million must be sold at competitive public sale. This bill also revises the provisions governing the sale of 12-year capital outlay notes and the refunding of capital outlay notes; (J) Adds, in regard to general obligation refunding bonds, that the modification of an outstanding obligation must be deemed a refunding of the modified obligation, and such refunding must be required to comply with the Act, if the modification is of such significance that the obligation would be deemed to be reissued for federal tax law purposes, whether or not the outstanding obligation is tax-exempt for purposes of federal tax laws; and (K) Revises the authorization to refinance and to issue revenue funding bonds. Under present law, revenue refunding bonds may not be issued, unless the governing body of the local government makes a finding that one or more of the following purposes will be accomplished: cost savings to the public; removal or modification of one or more restrictive covenants; or payment or discharge of all or any part of an issue or series of outstanding obligations, including any interest thereon, in arrears or to become due and for the payment of which sufficient funds are not available. This bill adds "elimination or mitigation of risk due to interest rate changes" as a purpose for which such bonds may be issued; and (4) Public Building Authorities Act of 1971. This bill deletes the present law provision whereby a lease, loan agreement, sales contract or operating contract under the Act may be entered into for the purpose of converting capital outlay notes to a loan.