(a) The comptroller of the treasury shall file with the Tennessee board of utility regulation a copy of the audited annual financial report of any financially distressed utility system within sixty (60) days from the date that the audit is filed with the comptroller of the treasury, for administrative review by the board.
lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Tennessee Code 7-82-703

  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • 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
  • utility system: includes :
    (1) The water, wastewater, or natural gas systems of a county, metropolitan government, or incorporated town or city. See Tennessee Code 7-82-701
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) A utility system is financially distressed when it has a deficit total net position in any one (1) year, has a deficit unrestricted net position in any one (1) year, has a negative change in net position for two (2) consecutive years without regard to any grants or capital contributions, or is currently in default on any of its debt instruments.
(c)

(1) The comptroller of the treasury shall refer a utility system to the board if the utility system:

(A) Fails to complete and submit to the comptroller for administrative review an audited annual financial report for two (2) consecutive years;
(B) Is found to have used utility funds to pay non-utility expenses, used non-utility funds to pay utility expenses, or transferred utility funds to any other non-utility fund or account, unless the use or transfer is allowed by law; or
(C) Is found to have made an illegal payment or transfer of funds.
(2) The board is authorized to take one (1) or more remedial actions as described under § 7-82-706(b) for a financially distressed utility system.
(d) After reviewing the audited annual financial report and operations of the financially distressed utility system, and after holding a public hearing, which may be held as part of a regularly scheduled or specially called board meeting, the board may prescribe a rate structure to be adopted by the financially distressed utility system to:

(1) Eliminate the utility system’s negative changes in net position;
(2) Liquidate any deficit total net position, in an orderly fashion; or
(3) Cure a default on any indebtedness of the utility system.
(e) In the event the governing body of the financially distressed utility system fails to adopt the prescribed rate structure described in accordance with subsection (d), the board shall petition the chancery court in a jurisdiction in which the utility system is operating or in the chancery court of Davidson County to require the adoption of the rate structure prescribed by the board. The court may also order other remedies that, in the court’s discretion, may be required to cause the utility system to operate in accordance with state law and in a financially self-sufficient manner.
(f) Notwithstanding any other law to the contrary, this section does not preclude a public utility system from operating water and sewer systems as individual or combined entities.
(g) Notwithstanding any other law to the contrary, a government joint venture that supplies or treats water or wastewater for wholesale use only to other governments does not fall under the jurisdiction of the board for the purpose of reporting negative change in net position annually; provided, however, that the government joint venture must be referred to the board if the government joint venture is in a deficit or default position as described under this section.
(h) As used in this section, “change in net position” means total revenues less all grants, capital contributions, and expenses.
  Previous section
Next section  
 Part 7 Contents