Tennessee § 9-9-105 - Bonds constitute direct state obligations — Debt obligations constitute a charge and lien — Satisfaction of debt service coverage test.

§ 9-9-105. Bonds constitute direct state obligations — Debt obligations constitute a charge and lien — Satisfaction of debt service coverage test.

All bonds issued (and to be issued) under this chapter, all notes issued (and to be issued) in anticipation of such bonds, and all tax revenue anticipation notes issued (and to be issued) under this chapter shall constitute direct general obligations of the state of Tennessee for the payment of the principal of and premium, if any, and interest on which there is also pledged the full faith and credit of the state of Tennessee. Subject only to § 9-9-104(a), all such debt obligations shall constitute a charge and lien upon the entire fees, taxes and other revenues and funds allocated to the general fund, the debt service fund, and the highway fund; and, if necessary, upon the first such fees, taxes, revenues and funds thereafter received and allocated to such funds, except only such fees, taxes, revenues and funds as may be otherwise legally restricted. The state of Tennessee hereby covenants with the persons who now or may hereafter hold any debt obligations described in § 9-9-105(a) that it will raise fees, taxes and other revenues sufficient, together with funds on hand derived from all sources, to pay the principal of and premium, if any, and interest on such obligations as and when due and payable. The state of Tennessee hereby covenants with the persons who now or may hereafter hold any bonds issued under this chapter that no bonds shall be issued under this chapter after July 1, 2013, unless the following debt service coverage test is satisfied: the amount necessary to pay the maximum annual debt service payable in the then current or any future fiscal year, is not greater than ten percent (10%) of the amount of total state tax revenue allocated to the general fund, to the debt service fund, and to the highway fund for the immediately preceding fiscal year. For purposes of satisfying this test, “state tax revenues” are defined as those taxes, licenses, fees, fines, and permits collected by the department of revenue and allocated to the general fund, the debt service fund, and the highway fund excluding the portion of those taxes shared with local governments. “Debt service”, for this purpose, means and includes principal of and interest on all outstanding bonds issued under this chapter and the bonds then proposed to be issued under this chapter, in the aggregate; provided, that in determining the outstanding bonds, there shall be excluded any outstanding bonds the payment of which has been fully provided for by funds or securities (including expected income therefrom), or both, set aside for that purpose. Acts 1937, ch. 165, § 8 (Williams, § 1811.19); modified; T.C.A. (orig. ed.), § 9-906; Acts 1998, ch. 582, § 9; 2013, ch. 176, § 5. Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated. Acts 1998, ch. 582, § 11 provided that if any court of last resort should determine the tax levied by Acts 1997, ch. 316 to be invalid, then immediately upon the effective date of the court's order, the prior sections amended by Acts 1998, ch. 582, §§ 7-10 shall be revived as in effect prior to January 1, 1998, and the reference in Acts 1998, ch. 582, § 1 to § 67-3-1303 shall be deleted and § 67-3-904 shall be substituted instead. Acts 1998, ch. 582, § 13 provided that the amendments by §§ 7-11 of that act apply retroactively to January 1, 1998. Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.” Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.