Tennessee Code Title 7. Consolidated Governments and Local Governmental Functions and Entities § 7-82-703

(a) The comptroller of the treasury shall file with the Tennessee board of utility regulation a copy of the audited annual financial report of any financially distressed utility system within sixty (60) days from the date that the audit is filed with the comptroller of the treasury, for administrative review by the board.

(b) A utility system is financially distressed when it has a deficit total net position in any one (1) year, has a deficit unrestricted net position in any one (1) year, has a negative change in net position for two (2) consecutive years without regard to any grants or capital contributions, or is currently in default on any of its debt instruments.

(d) After reviewing the audited annual financial report and operations of the financially distressed utility system, and after holding a public hearing, which may be held as part of a regularly scheduled or specially called board meeting, the board may prescribe a rate structure to be adopted by the financially distressed utility system to:

(e) In the event the governing body of the financially distressed utility system fails to adopt the prescribed rate structure described in accordance with subsection (d), the board shall petition the chancery court in a jurisdiction in which the utility system is operating or in the chancery court of Davidson County to require the adoption of the rate structure prescribed by the board. The court may also order other remedies that, in the court's discretion, may be required to cause the utility system to operate in accordance with state law and in a financially self-sufficient manner.

(f) Notwithstanding any other law to the contrary, this section does not preclude a public utility system from operating water and sewer systems as individual or combined entities.

(g) Notwithstanding any other law to the contrary, a government joint venture that supplies or treats water or wastewater for wholesale use only to other governments does not fall under the jurisdiction of the board for the purpose of reporting negative change in net position annually; provided, however, that the government joint venture must be referred to the board if the government joint venture is in a deficit or default position as described under this section.

(h) As used in this section, “change in net position” means total revenues less all grants, capital contributions, and expenses.