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SB 1281

Regional Authorities and Special Districts - As enacted, requires that interest income accruing on investments and deposits as a result of the Megasite Authority of West Tennessee's collection of rates to customers of a water system or wastewater system operated by the authority be credited to a separate account and carried forward into each subsequent fiscal year. - Amends TCA Section 64-9-107.

114th Regular Session (2025-2026)

Tennessee law now requires the Megasite Authority of West Tennessee to separately account for and carry forward interest earned on water/wastewater customer rates annually.

Pub. Ch. 274
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Bill Summary · SB 1281

Legislative bill overview

SB 1281 requires the Megasite Authority of West Tennessee to segregate and carry forward interest income earned on water and wastewater customer rates into a dedicated account each fiscal year. This amendment to TCA Section 64-9-107 establishes accounting requirements for how the authority manages interest revenue from its utility operations.

Why is this important

Interest income from utility rate collections can represent meaningful revenue that affects how water and wastewater systems reinvest in infrastructure, maintenance, and customer rates. By requiring separate accounting and carryforward provisions, the bill creates transparency and potentially ensures interest funds are reserved for specific purposes rather than mixed into general revenues, which could impact future rate decisions and system investments.

Potential points of contention

  • Restricted use unclear: The bill requires segregation but doesn't explicitly specify what the reserved interest must be used for, leaving ambiguity about whether it's restricted to infrastructure, rate relief, or other purposes
  • Administrative burden: Creating separate accounts increases accounting complexity and administrative costs that ultimately may be passed to ratepayers
  • Limited scope: The requirement applies only to the Megasite Authority, raising questions about why similar requirements don't apply to other regional water authorities in Tennessee

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

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