Tennessee Code Title 9. Public Finances § 9-21-704

(a) Grant anticipation notes issued under this part must be secured by a pledge of the money to be received pursuant to a grant contract between a state or federal agency and a local government, in an amount not less than the principal amount of such notes.  At its discretion, the local government may add as additional security to the grant anticipation notes one (1) or both of the following:

(b) Interest on grant anticipation notes may be a general obligation of a local government, and the local government has the authority to levy ad valorem taxes for the payment of interest on such notes.  This section does not preclude a local government from issuing capital outlay notes or bond anticipation notes in conjunction with grant anticipation notes issued under this section;  provided, that the proceeds from the sale of any such capital outlay notes or bond anticipation notes must not be applied to the payment of such grant anticipation notes.