(Tennessee Code Annotated References)

7-82-108. Authorized investments.

(a) In order to provide a safe temporary medium for investment of idle funds, utility districts are authorized to invest in the following:

(1) Bonds, notes, or treasury bills of the United States;

(2) Nonconvertible debt securities of the following issuers:

(A) The federal home loan bank;

(B) The federal national mortgage association;

(C) The federal farm credit bank; and

(D) The student loan marketing association;

(3) Any other obligations not listed above which are guaranteed as to principal and interest by the United States or any of its agencies;

(4) Certificates of deposit and other evidences of deposit at state and federal chartered banks and savings and loan associations. All investments made pursuant to this subdivision shall be secured in the manner set forth in § 9-1-107 or title 9, chapter 4, parts 1 and 4;

(5) Obligations of the United States or its agencies under a repurchase agreement for a shorter time than the maturity date of the security itself if the market value of the security itself is more than the amount of funds invested; provided, that utility districts may invest in repurchase agreements only if the state director of local finance approves repurchase agreements as an authorized investment, and if such investments are made in accordance with procedures established by the state funding board;

(6) The investments listed in subdivisions (a)(1)-(4) may have a maturity of not greater than four (4) years from the date of investment; however, such investments may have a maturity of greater than four (4) years from the date of investment if such maturity is approved by the state director of local finance;

and

(7) The local government investment pool created by title 9, chapter 4, part 7.

(b) Proceeds of bonds, notes and other obligations issued by utility districts, reserves held in connection therewith and the investment income therefrom, may be invested in obligations which:

(1) (A) Are rated in either of the two (2) highest rated categories by a nationally recognized rating agency of such obligations;

(B) Are direct general obligations of a state of the United States, or a political subdivision or instrumentality thereof, having general taxing powers; and

(C) Have a final maturity on the date of investment of not to exceed forty-eight (48) months, or which may be tendered by the holder to the issuer thereof, or an agent of the issuer, at not less than forty-eight (48) month intervals; or

(2) (A) Are rated in the two (2) highest rating categories by a nationally recognized rating agency of such obligations;

(B) Are obligations of a state of the United States, or a political subdivision or instrumentality thereof, secured solely by revenues received by or on behalf of the state or political subdivision or instrumentality thereof which revenues are irrevocably pledged to the payment of the principal of and interest on such obligations; and

(C) Have a final maturity on the date of investment of not to exceed forty-eight (48) months, or which may be tendered by the holder to the issuer thereof, or an agent of the issuer, at not less than forty-eight (48) month intervals.

Such proceeds and the investment income thereon may also be invested as otherwise set forth in this section.

(c) The investments authorized by this section are in addition to those authorized in any other general law.