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HB 1338

Public Funds and Financing - As enacted, redefines "local government" to include a water, wastewater, or energy authority for purposes of the present law applicable to bonds and notes issued by local governments; makes other related revisions. - Amends TCA Section 9-21-133 and Title 9, Chapter 21, Part 4.

114th Regular Session (2025-2026) Introduced by William Lamberth

Tennessee allows water, wastewater, and energy authorities to issue bonds as "local governments," enabling cheaper infrastructure financing through established public borrowing rules.

Comp. became Pub. Ch. 218
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Bill Summary · HB 1338

Legislative bill overview

HB 1338 expands the legal definition of "local government" in Tennessee's bonding law to explicitly include water, wastewater, and energy authorities. This allows these previously excluded utility authorities to issue bonds and notes under the same regulatory framework that applies to traditional municipalities and counties.

Why is this important

Water, wastewater, and energy authorities manage critical infrastructure that often requires capital investment—projects like pipe replacement, treatment facility upgrades, or grid improvements. By gaining access to the bond market under established local government rules, these authorities can more efficiently and affordably finance infrastructure projects, potentially lowering costs for ratepayers through better borrowing terms.

Potential points of contention

  • Debt accountability: Expanding borrowing authority to more entities could increase total public debt outstanding; critics may worry about oversight of authority spending and repayment discipline
  • Ratepayer impact: While better access to capital may lower costs, any inefficiency or mismanagement could be passed to utility customers who have limited control over authority decisions
  • Definition scope: The term "water, wastewater, or energy authority" may be interpreted broadly, potentially allowing entities beyond the original intent to access privileged bonding status

Compiled from official sources — confirm details with the bill’s official record.

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