Knowledgebase-Referenda on Bond Issues


Information Product

Title:Referenda on Bond Issues
Summary:MTAS was asked to analyze the law governing referenda on bond issues.
Original Author:Hemsley, Sid
Co-Author:
Product Create Date:05/29/2002
Last Reviewed on::03/03/2006
Subject:Finance--Bond issues; Finance--Bonds
Type:Legal Opinion
Legal Opinion: Referenda on Bond Issues public.doc

Reference Documents:

Text of Document:
May 29, 2002


Dear City Manager:

You have two questions related to the bond resolution passed by the City, approving the issue of $20,000,000 in general revenue bonds:

1. What is the deadline for the filing of a petition by the voters for a referendum on the bond issue?

The answer is 20 days following the date of the publication of the bond resolution passed by the city.

2. If the deadline for the filing of a petition by the public for a referendum on the bond issue has passed, can the city on its own initiative call for a referendum on the bond issue?

The answer is that the city can on its own initiative call for a referendum on the bond issue.

Analysis of Question 1

The Local Government Public Obligations Act of 1968, codified at Tennessee Code Annotated, 9-21-101 et seq., contains the regulations governing the various bonds and notes authorized to be issued by local governments in Tennessee. Tennessee Code Annotated, 9-21-201–216 govern the issue of general obligation bonds by local governments. Tennessee Code Annotated, 9-21-207(a)(2) provides that after a local government has passed a resolution for the issue of general obligation bonds, no election on the issue of such bonds is necessary “In any case where a petition has not been filed within the time limit specified in 9-21-206.” Tennessee Code Annotated, 9-21-206 requires that the petition be filed within 20 days of the date of the publication of the resolution.

Analysis of Question 2

Tennessee Code Annotated, 9-21-208 authorizes a local government to voluntarily call for a referendum on the issue of general obligation bonds, after the passage of the bond resolution, even if no petition for a referendum has been filed. Tennessee Code Annotated, 9-21-209 provides for the content of the resolution calling for the referendum. Tennessee Code Annotated, 9-21-212 also says that if the vote is not in favor of the bond issue, “then the proposition shall not again be the subject of an initial resolution until three (3) months have expired from the date of such election.”

Sincerely,


Sidney D. Hemsley
Senior Law Consultant

SDH/

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