Nonliability of Municipality — Pledge by Municipality of Full Faith and Credit and Unlimited Taxing Power
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Except to the extent of any revenues that may be specifically allocated, transferred, contributed or pledged by a municipality in accordance with this chapter and except as provided in subsection (b), no municipality shall in any event be liable for the payment of the principal of or interest on any bonds of the authority or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever that may be undertaken by the authority, and none of the bonds of the authority or any of its agreements or obligations shall be construed to constitute an indebtedness of the municipality within the meaning of any constitutional or statutory provision whatsoever.
Following compliance by the authority with § 7-90-123 and after complying with the resolution, notice, and election provisions found in title 9, chapter 21, with such reasonable provisions as are necessary to reflect that the bonds are not being issued directly by the municipality, the governing body of a municipality or municipalities with respect to which the authority has been created may, by resolution, pledge the full faith and credit and unlimited taxing power of the municipality to the payment of the principal or premium, if any, and interest on bonds of an authority, the purchase price of any such bonds subject to optional or mandatory tender for purchase, or the reimbursement or repayment to any bank or financial institution under any agreement providing for any draw, borrowing, advance or payment to be made for the payment of such principal, premium, interest or purchase price or the payment of amounts payable under any interest rate exchange agreement.
Prior to any meeting where such pledge will be considered by the governing body of the municipality, a notice shall be published at least five (5) days in advance of such meeting in a newspaper of general circulation within the municipality, describing the matter to be considered and containing an estimate of the dollar amount of any contingent liability proposed to be undertaken by the municipality.
In the event of any such pledge of the full faith and credit and unlimited taxing power of the municipality, any holder or holders of the bonds, including a trustee or trustees for holders of such bonds, any financial institution providing any agreement on the payment of principal, premium, interest, purchase price on such bonds or any party to any interest rate exchange agreement with respect to such bonds shall have the right, in addition to all other rights, by mandamus or other suit, action, or proceeding in any court of competent jurisdiction, to enforce such person's rights against the municipality so pledging, and the governing body of such municipality and any officer, agent, or employee of such municipality, including, but not limited to, the right to require the municipality and governing body and any proper officer, agent, or employee of the municipality to assess, levy, and collect taxes and other revenues and charges adequate to carry out any agreement as to, or pledge of, such taxes, revenues, and charges. The taxes authorized to be pledged in this subdivision (b)(3) shall be levied without limit as to rate or amount upon all taxable property within the municipality, and all such taxes to be levied are hereby declared to have been levied for county and corporation purposes, respectively, within the meaning of the Constitution of Tennessee, Article II, § 29.