2010 Tennessee Code
Title 9 - Public Finances
Chapter 21 - Local Government Public Obligations Law
Part 4 - General Provisions Governing the Issuance of All Notes by Local Governments
9-21-403 - Budget approval required by state director of local finance.

9-21-403. Budget approval required by state director of local finance.

(a)  In order for the fiscal affairs of a local government to be maintained on a cash basis, after the issuance of any interest-bearing notes as provided by this chapter, and in order that the current receipts of such local government shall be sufficient to meet current expenditures, an annual budget shall be required of the local government by the state director of local finance. The annual budget shall be prepared in a form consistent with accepted governmental standards and as approved by the state director of local finance.

(b)  After receiving the annual budget estimate, the governing body shall prepare an appropriation resolution, using the budget estimate as a basis, but appropriating such sums as the governing body may deem proper for current operating expenses, whether greater or less than the budget estimate set forth. However, no appropriation recommended by the budget estimate for interest on the indebtedness of the local government for sinking funds and for principal of serial bonds and notes maturing during the fiscal year shall be reduced by the governing body. The taxes levied for such appropriation may be over and above all other taxes authorized or limited by law. Immediately after the passage of the appropriation resolution, the governing body shall pass a resolution levying upon all property subject to taxation, a tax rate sufficient to produce the sum necessary to balance the budget upon a cash basis.

(c)  The state director of local finance shall require any periodic information from a local government which has issued notes under this chapter or under prior authorizing statutes and make such audits as the director may deem necessary, to the end that it may be ascertained that the budget is kept balanced during the life of the notes. The annual budget of each local government with notes outstanding shall be submitted to the state director of local finance immediately upon its adoption. The state director of local finance must thereupon determine whether or not the budget will be in balance in accordance with the provisions of this chapter. If the budget does not comply with the provisions of this chapter, then the state director shall have the power and the authority to direct the governing body of the local government to adjust its estimates or to make additional tax levies sufficient to comply with the provisions of this chapter. Any budget adopted by the governing body of a local government which had notes outstanding at the beginning of the fiscal year which were issued under the provisions of this chapter or under the provisions of prior statutes shall not become the official budget for the fiscal year until such budget is approved by the state director. The state director shall approve the budget only when the state director is satisfied that it complies with the provisions of this chapter.

[Acts 1986, ch. 770, § 4-3.]  

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