Tennessee Code Title 41. Correctional Institutions and Inmates § 41-8-110

(a) For the purpose of providing moneys to assist approved applicant counties in financing capital improvements of correctional facilities, the state funding board, in addition to the powers otherwise granted by law, has the power and is authorized to issue from time to time direct general obligation interest-bearing bonds and bond anticipation notes in such principal amounts as may from time to time be authorized by law.

(b) Loans or grants authorized in accordance with § 41-8-109 shall be made from the proceeds of the bonds or notes to an approved applicant county in the county correctional incentive program. The board shall require the county to submit a financing agreement that includes provisions for the payment of the cost of constructing, acquiring, reconstructing, improving, equipping or furnishing any county correctional facility, including the payment of engineering, fiscal, architectural and legal expenses incurred in connection with the facility and the issuance of the bonds or notes, and shall require the county to execute a contract specifying, among other things, the repayment terms and the project to be funded.