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Terms Used In Tennessee Code 68-221-1006

  • Authority: means the Tennessee local development authority as created by title 4, chapter 31. See Tennessee Code 68-221-1003
  • Clean Water Act: means the Water Pollution Control Act of 1972, P. See Tennessee Code 68-221-1003
  • Department: means the department of environment and conservation. See Tennessee Code 68-221-1003
  • Fund: means the wastewater facility revolving loan fund. See Tennessee Code 68-221-1003
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Local government: means :
    (i) A county, incorporated town or city, metropolitan government, state agency, water/wastewater authority, energy authority or any instrumentality of government created by any one (1) or more of these or by an act of the general assembly:
    (a) Which has authority to administer a wastewater facility. See Tennessee Code 68-221-1003
  • Security: means that which is determined by the authority to be acceptable to secure a loan to a local government under this part and includes, but is not limited to, revenues of the facility, ad valorem taxes, state-shared taxes, letters of credit or bond insurance. See Tennessee Code 68-221-1003
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Wastewater facility: means any facility, including the reserve capacity thereof, whose purpose is to collect, store, treat, neutralize, stabilize, recycle, reclaim or dispose of wastewater, including treatment or disposal plants, interceptors, outfall, and outlet sewers, pumping stations, equipment and furnishings thereof and their appurtenances which are necessary to accomplish the foregoing purposes. See Tennessee Code 68-221-1003
(1) Loans shall be made only to local governments that:

(A) Operate a wastewater facility that is on the department‘s project priority ranking list established pursuant to § 68-221-804 and regulations thereunder;
(B) In the opinion of the authority, demonstrate sufficient revenues to operate and maintain the facility for its useful life and to repay the loan;
(C) Pledge security as required by the authority for repayment of the loan;
(D) Agree to adjust periodically fees and charges for services of the wastewater facility in order that loan payments and costs of the wastewater facility are timely paid; provided, however, upon determination that fees and charges are reasonable, the authority may in its discretion make a loan to a local government which is relying upon and using ad valorem taxes or other lawful sources of revenue, in addition to fees and charges, to pay timely loan payments and costs of the facility;
(E) Certify to comply with a plan of operations approved by the department regarding the quality, compensation and number of facility personnel for the life of the loan;
(F) Agree to maintain financial records in accordance with governmental accounting standards and to conduct an annual audit of the facility’s financial records in accordance with generally accepted governmental auditing standards and with minimum standards prescribed by the comptroller of the treasury, and to file such audit with the comptroller. In the event of the failure or refusal of the local government to have the audit prepared, then the comptroller of the treasury may appoint an accountant or direct the department of audit to prepare the audit at the expense of the local government; and
(G) Provide such assurances as are reasonably requested by the authority and the department.
(2) In regard to a local government as defined in § 68-221-1003(7)(C), loans are subject to the following conditions and requirements:

(A) The local government will not be considered for loans with principal forgiveness under the program;
(B) The local government must be categorized as one hundred percent (100%) ability to pay on the index established pursuant to § 68-221-1005;
(C) The local government must have at least a debt service coverage ratio of 1.25;
(D) The local government must provide security determined by the authority to be acceptable to secure a loan under this part; and
(E) The authority is authorized to direct the local government to the Tennessee public utility commission, created by § 65-1-101, for compliance.
(b) Loans for public purpose projects relating to privately owned, non-point sources of pollution shall not be made to a local government which pledges its credit to secure such loan except upon the assent of three-fourths (3/4) of the votes cast in an election of the qualified voters of the local government.
(c) A local government may use the proceeds from a loan made from the fund to provide a local match for a federal (except for EPA Title II construction grants) or state wastewater facility grant.
(d) A loan shall be made for a period of time not to exceed thirty (30) years or the design life of the wastewater facility; however, loans made with funds governed by the Clean Water Act (33 U.S.C. § 1251 et seq.) shall be for such period of time as provided in that act. For each loan, the authority shall determine the interest rate and the payment schedule for repayment of the loan.
(e) Loans shall be made only for items approved by the department.
(f) The requirements of this section with respect to “local governments” are deemed satisfied when any one (1) of the entities jointly participating in the wastewater facility being funded pursuant to the loan agreement and qualifying as a local government as provided in § 68-221-1003(7) satisfies the requirement.
(g) The comptroller of the treasury, through the department of audit, shall be responsible for determining that any audit required in this chapter is prepared in accordance with generally accepted governmental auditing standards. The comptroller of the treasury is authorized to direct the department of audit to make an audit of financial review of the books and records of the local government.
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