Local Government, General - As enacted, makes changes to the process by which local governments may issue and sell grant anticipation notes; authorizes the comptroller to approve certain notes issued by a local government if the local government demonstrates that a natural disaster has caused economic distress. - Amends TCA Title 9, Chapter 13, Part 2 and Title 9, Chapter 21, Part 7.

HB 1672 modifies how Tennessee local governments issue certain debt instruments. It allows local governments to issue notes maturing beyond the fiscal year if the comptroller approves them for economic distress caused by a natural disaster (with FEMA certification) or after demonstrating such distress. For grant anticipation notes used to fund public works projects before receiving state/federal grant money, the bill requires comptroller approval before issuance and mandates these notes be secured by the expected grant funds. Local governments may add extra security (like general obligations), but proceeds from other debt (e.g., capital outlay notes) cannot be used to pay for these grant anticipation notes.