Article 64.

1.

(a) There is hereby created and established an agency of the metropolitan government to be known as the metropolitan transit authority, sometimes hereinafter designated as transit authority. The transit authority shall be composed of five (5) members, and all of said members shall have been residents of the metropolitan government area for at least three (3) years prior to their becoming members of the metropolitan transit authority. No person shall be eligible as a member of the metropolitan transit authority who holds any other elective or appointive public office or employment or who is employed by or has financial interest in a transit company regulated by said transit authority of the metropolitan government.

(b)

The terms of office of all members, except the original members hereinafter named and except those elected to fill unexpired terms, shall be five (5) years, with staggered terms, so that the term of one (1) member shall end on May 1st of each year, beginning with 1954.

(c)

The original members of the transit authority shall be appointed by the mayor of the City of Nashville on or before May 15, 1953. One (1) of said members so appointed shall serve until May 1, 1954, one (1) shall serve until May 1, 1955, one (1) shall serve until May 1, 1956, one (1) shall serve until May 1, 1957, and one (1) shall serve until May 1, 1958. Vacancies in membership of the transit authority resulting from expiration of office or otherwise, shall be filled by appointment by the metropolitan mayor. Any successor member shall have the same qualified voter status as his predecessor.

(d)

Three (3) members of said transit authority shall constitute a quorum for the transaction of business. The affirmative vote of a majority of a quorum shall be necessary to take any action or to adopt any motion.

(e)

The first meeting of said transit authority shall be held on or before May 25, 1953, at a time and place designated by the Mayor of the City of Nashville, on notice of such meeting given to the members of Nashville Transit Authority and to the present secretary of Nashville Public Utilities Commission. At such meeting, or at an adjourned meeting, said transit authority shall organize by selecting one (1) of its members as chairman and another as vice-chairman, who shall serve as such until May 1, 1954, at which time and annually thereafter the authority shall elect or re-elect its chairman and vice-chairman. At such meeting, or at an adjourned meeting, said transit authority shall appoint a secretary, who need not be a member thereof.

(f)

The secretary shall be a licensed and practicing attorney at the Nashville Bar of not less than five (5) years' experience, and not less than thirty (30) years of age. The secretary shall devote such time as may be necessary to its duties, but he may engage in the practice of his profession so long as such practice does not interfere with the performance of his duties as secretary of the transit authority. The secretary shall not appear as counsel in any cause or matter pending before any court or administrative agency wherein any street railway company subject to the jurisdiction of the transit authority is a party, nor shall the secretary accept employment, directly or indirectly, from any street railway company which is subject to the jurisdiction and control of the transit authority. The secretary shall keep himself advised of all matters and questions pending before the transit authority, and shall furnish any information required when requested to do so by members of the transit authority. The duties of the secretary shall be fixed by the transit authority; provided, however, that any such secretary having acquired a civil service status with the City of Nashville shall keep and maintain such status, with all the rights, benefits and obligations incident thereto.

(g)

Metropolitan transit authority shall hold public meetings once each month, at a place, and on a day, and at an hour to be determined by its members, with suitable prior public announcement or notice thereof. Upon request of the transit authority, the metropolitan mayor shall make available to the transit authority a meeting place in a metropolitan building at a convenient location, where such meetings may be held, and where any hearings conducted in connection with the exercise of its duties and fulfillment of its obligations by the transit authority likewise may be held and conducted. The transit authority shall hold such additional meetings as its business may require.

2.

(a) The following terms, wherever used or referred to in this Act, shall have the following respective meanings unless a different meaning clearly appears from the context:

1.

"Metropolitan transit authority" or "transit authority" or "authority" shall mean the municipal regulatory agency established under the terms and provisions of chapter 487, Private Acts of 1953, amending chapter 246, Private Acts of 1947, the same being the Charter of the City of Nashville, in compliance with chapter 58, Public Acts of 1953.

2.

"Metropolitan council" shall mean the governing body of the metropolitan government as presently or at any time hereafter constituted.

3.

"Metropolitan government" shall mean the Metropolitan Government of Nashville and Davidson County.

4.

"Metropolitan treasurer" shall mean the treasurer of the metropolitan government, or the person holding the successor office in the metropolitan government charged with the supervision of and responsibility for the receipt, custody and disbursement of all funds belonging to the metropolitan government and all funds collected by city officials as agents or trustees.

5.

"Public transportation facilities," "public transportation properties," or "public transit facilities" shall include all the real and personal property, buildings and improvements, street railway cars, self-propelled motor coaches, trolley coaches, mass transportation vehicles for the transportation of passengers, accessory vehicles, materials, tools, supplies, equipment, and other real and personal property necessary, useful and suitable in the operation of a public transit system.

6.

"Garage facilities" shall include the buildings and improvements, and all other real property at any time leased, owned, acquired or erected for office, garage, maintenance, service, storage and terminal facilities, and necessary, useful and suitable for a public transit system.

7.

"Transit facilities" shall include street railway cars, self-propelled motor coaches, trolley coaches and other mass transportation vehicles for the transportation of passengers, accessory vehicles, material, tools, supplies and equipment, and other personal property at any time leased, owned or acquired and necessary, useful and suitable in the operation of a public transit system.

8.

"Public transit system" shall include public transportation facilities as herein defined, together with all contractual rights, franchises, certificates of convenience and necessity, operating permits, and operating rights over streets and highways.

9.

"Bonds" shall mean any bonds, interim certificates, notes, debentures or other obligations of the transit authority issued pursuant to this Act.

10.

"Bond resolution" shall mean any resolution authorizing, ratifying or affecting any bonds, interim certificates, notes, debentures, or other obligations of the transit authority issued pursuant to this Act.

11.

"Mortgage" shall include all deeds of trust, mortgages or other instruments conveying real or personal property as security for bonds, and conferring right to foreclose and cause a sale thereof according to the terms of any such instrument.

12.

"Trust indenture" shall include instruments pledging: (i.) revenues of real or personal properties, but not conveying such properties or conferring the right to foreclose and cause a sale thereof; (ii.) revenues from the operation of a public transit system or any part, parcel or piece thereof; and (iii.) revenues of the "authority" from any source which may be described in such instruments.

13.

"Street railway companies" shall mean companies operating street railway cars, gasoline or electric or other self-propelled coaches for transportation of passengers within the jurisdictional limits of metropolitan transit authority, which is within the general services district of the metropolitan government.

14.

"Public transit company" or "transit company" shall mean a company operating a public transit system within the jurisdictional limits of the transit authority, and the terms are synonymous with the words "street railway company" as above defined.

(b)

The metropolitan transit authority is hereby vested with, and shall exercise the general supervision and regulation, jurisdiction and control over street railway companies, their property, property rights, facilities and franchises as were vested in the City of Nashville under section 5447.1, Supplement to the Code of Tennessee, 1950, and any amendatory Acts thereto, and as have been vested in the metropolitan government by the other terms and provisions of this Charter of the metropolitan government, or by any other Public Act or Private Act of the General Assembly of Tennessee. Metropolitan transit authority shall have the same powers with respect to street railway companies operating within the jurisdictional limits above defined, as heretofore granted to the City of Nashville, to the governing body thereof, to the metropolitan government, to the governing body thereof, or to the railroad and public utilities commission; provided, however, that nothing herein shall be construed to change the method of assessing the properties of street railway companies for ad valorem taxes by the railroad and public utilities commission, and such assessments and the method of taxation of said companies, shall remain as now provided by law; provided further that any property of the metropolitan government or of metropolitan transit authority leased to or used by a street railway company shall not be subject to assessment by the railroad and public utilities commission.

(c)

The entire and complete supervision, regulation, jurisdiction and control over street railway companies operating within the metropolitan government area, shall be vested solely in and exercised solely by the transit authority. With reference to public transit systems, all power and authority heretofore delegated to or vested in the City of Nashville or the metropolitan government and all duties placed upon the metropolitan government, either by its Charter, or by Private Act or by general law, are hereby transferred to and vested in the transit authority. Neither the metropolitan mayor, the metropolitan council, nor any other officer or agency of the metropolitan government shall have or exercise any authority whatsoever over such street railway companies or over the transit authority, except as expressly provided in this article 64. Whenever any action of the metropolitan mayor and metropolitan council or thing affecting the ownership, operation, contracts, notes, stocks, debentures, financing, transfer, assignment, rental or sale of any street railway company, its property, property rights, franchises, permits or certificates, or any amendment thereto shall have been required heretofore by resolution or ordinance, same shall be acted upon and effective hereinafter by order of metropolitan transit authority; provided, however, that no franchise to operate a street railway company upon the streets of the metropolitan government area shall be granted except upon referendum, as set forth under other provisions of this Charter; and provided further, that nothing herein shall be construed as depriving the citizens of the metropolitan government area of the right to grant franchises by referendum through the procedure now established by law.

(d)

The metropolitan attorney shall furnish legal advice, representation and services to the transit authority in connection with its work, and when requested to do so by said transit authority. Whenever in the judgment of the transit authority the public interest so requires, special counsel, auditors or transit experts shall be employed and paid such compensation for their services as the transit authority shall determine to be reasonable compensation for services rendered, the same to be paid, however, out of the funds available for defraying the expenses of the transit authority.

(e)

Every street railway company, the supervision and regulation, jurisdiction and control over which is vested in the transit authority, shall pay an inspection fee to the transit authority, the same to be used by the transit authority in defraying its necessary expenses. The payment of such inspection fee shall be in lieu of any inspection fee heretofore levied, paid or payable, by such street railway company to the State of Tennessee, the railroad & public utilities commission, the metropolitan government, or for the benefit of the Metropolitan government. The annual inspection fee payable under this article 64 shall be at the rate fixed by order of metropolitan transit authority, not to exceed $2.50 per seat, per vehicle, used in the transportation of passengers by such street railway company. The annual inspection fee shall be paid in semiannual installments in the months of June and December of each year for the current year, beginning in June, 1953. All funds now in the public transportation fund of the City of Nashville are hereby transferred and set over to the account of metropolitan transit authority of the purpose of payment of expenses of such authority as herein provided.

3.

(a) Members of the transit authority shall serve without compensation, but may have refunded to them the necessary and essential expenses incurred by them in carrying out their duties.

(b)

In the exercise of its duties of supervision and regulation, jurisdiction and control over street railway companies, the transit authority is authorized to employ appropriate personnel, and to designate the duties and salaries of such personnel, and to incur any and all other necessary expenses incident to the exercise of the duties of the transit authority. The individuals employed by Nashville Transit Authority at the effective date of this Charter as secretary to Nashville Transit Authority and as bus inspectors for Nashville Transit Authority shall become employees of metropolitan transit authority and shall continue to perform the duties heretofore performed by them at their respective salaries until their duties and compensation are otherwise fixed and determined by metropolitan transit authority.

(c)

The secretary of Nashville Transit Authority and the bus inspectors for Nashville Transit Authority under the preceding paragraph, presently having a civil service and retirement status as employees of the transit authority shall keep and maintain such civil service and retirement status and shall be entitled to all the rights, privileges, obligations and benefits thereof. Regular employees of metropolitan transit authority hereafter employed, either to replace such secretary or such bus inspectors or as additional employees shall be entitled to the same pension, retirement, disability and death benefits under the same conditions as other persons employed by metropolitan government after the effective date of this Charter; provided, however, that such future regular employees of metropolitan transit authority shall be excluded from the provisions of article 12 of this Charter, establishing the system of personnel administration.

4.

(a) Metropolitan transit authority is authorized and empowered to make all reasonable rules and regulations appropriate to the exercise of its jurisdiction and powers and to its functioning as an effective administrative or regulatory agency. The rules and regulations of Nashville Transit Authority shall constitute the rules and regulations of metropolitan transit authority until the transit authority adopts and promulgates its rules and regulations.

(b)

The transit authority may designate its secretary as an examiner, or any other person possessing the qualifications herein fixed for the secretary as an examiner, and by its rules and regulating may delegate to such an examiner the power to receive petitions and complaints, to investigate the same, to conduct hearings, and to receive evidence orally, by deposition, or by stipulation, and to make findings and recommendations. All findings or recommendations of such examiner shall be subject to the right of any interested party to except thereto, and to be hear by the members of the transit authority upon the record, and upon such exceptions, any interested party so requesting in writing shall have the right to a hearing de novo before the transit authority. No recommendations of such examiner shall constitute final action until approved and adopted by order of the transit authority subsequent to the receipt of a report from said examiner.

(c)

Upon any investigation or hearing involving the fixing of rates to be charged by a street railway company, metropolitan transit authority shall give full and due consideration to all factors pertinent thereto in arriving at fair and reasonable rates and to various methods of rate determination, including the theory of operating ratio after taxes, to the end that the company shall be permitted to have and to receive from efficient operation a fair and reasonable net profit or return.

(d)

No final order shall be entered by the transit authority in any manner affecting any street railway company operating under its jurisdiction until after reasonable notice and full hearing, at which all interested parties shall be afforded the opportunity of being represented by counsel.

(e)

Any interested party shall be given the opportunity to intervene, and to present evidence, and to be heard at any such hearing. Any party desiring to have a written record made may employ the services of a court reporter at the expense of that party. Any party desiring a transcript of such record shall pay the costs thereof at the record shall pay the costs thereof at the regular established rate for the transcription of stenographic records of proceedings in the circuit and chancery courts of Davidson County.

(f)

The power to issue subpoenas for the personal appearance and testimony of witnesses, and subpoenas duces tecum for the production of documents in connection with the taking of evidence is vested in metropolitan transit authority, such subpoenas to be issued over the signature of the chairman or vice-chairman upon application to the secretary. Upon failure of any person to appear in response to such subpoenas, or to produce documents as therein required, metropolitan transit authority, through its secretary and chairman, or vice-chairman, may apply to any circuit or chancery court of Davidson County, Tennessee, by petition, for the enforcement of its subpoena. Upon order being entered by the court to which such application is made directing the appearance of the witness, or the production of the documents in response to the subpoena, the failure to comply with the order of the court shall be punishable by the court as in cases of contempt.

(g)

Any final order of the metropolitan transit authority shall be subject to review under sections 27-9-101 to 27-9-114, inclusive, of the Code of Tennessee.

5.

(a) For the purpose of securing, maintaining, and facilitating efficient and economical public transportation in the metropolitan government area within the regulatory jurisdiction of metropolitan transit authority, the authority shall have and exercise all of the powers heretofore conferred upon it and likewise shall have and exercise all of the powers conferred by this Act, except the power to issue bonds. With reference to the issuance of any bonds within the limitations hereinafter provided, the authority shall determine the necessity for the issuance of such bonds which shall be revenue bonds, shall evidence such determination by resolution, and upon the submission of any such resolution of the authority to the metropolitan council it shall be the duty of the metropolitan mayor of the metropolitan government and the metropolitan council to provide by resolution for the issuance of such revenue bonds as directed by the authority. Such resolution of the metropolitan council may be adopted at the same meeting at which it is introduced, as any other resolution of the council is adopted, and shall take effect immediately, and need not be published or posted.

(b)

All properties, rights and things acquired by or for the authority under the provisions of this Act shall be acquired, held, owned, transferred and conveyed in the name of the metropolitan government. Such properties and rights are hereinafter sometimes referred to as property of the authority, owned by the authority or in which the authority has a transferrable interest. All agreements, contracts, transfers, and conveyances in connection therewith shall be made and executed by the authority in the name of the metropolitan government, and all such contracts, agreements, transfers and conveyances shall be signed by the chairman or vice-chairman of the authority and attested by the secretary or assistant secretary and shall need no further approval than that of the authority. Neither the metropolitan mayor, the metropolitan council nor any other officer, department, board or commission of the metropolitan government shall have or exercise any authority whatsoever over metropolitan transit authority other than, and except to the extent expressly provided herein.

6.

(a) The authority, in addition to the regulatory powers heretofore vested in it, and subject to the provisions of the preceding paragraphs 5. (a) and (b), shall have and exercise the following powers and authority:

1.

To make and execute contracts and other instruments necessary or convenient to the exercise of the powers of authority.

2.

To make and from time to time amend and repeal by-laws, rules and regulations not inconsistent with this Act.

3.

To own in the name of the metropolitan government and to operate a public transit system.

4.

To acquire by gift, lease, purchase or otherwise and to own public transportation facilities in the name of the metropolitan government.

5.

To own, acquire by gift, lease, purchase or otherwise in the name of the metropolitan government, and to replace, construct, reconstruct, improve, alter or repair garage facilities.

6.

To own, acquire by gift, lease, purchase or otherwise in the name of the metropolitan government, and to replace, improve, alter, or repair transit facilities.

7.

To lease, sell or convey to public transit companies for public transit purposes all or any part of the public transit system, public transit facilities, garage facilities, or transit facilities owned by the authority in the name of the metropolitan government, or in which the authority has a leasehold interest, equity or other possessory right which it may transfer or assign.

8.

To enter into operating contracts and agreements with public transit companies for the use and operation of public transportation facilities, garage facilities, or transit facilities, owned by the authority in the name of the metropolitan government, by such companies in furnishing public transportation.

9.

To lease, sell, transfer and convey, or otherwise dispose of public transportation properties, garage facilities, or transit facilities owned by the authority in the name of the metropolitan government, or any part, parcel, or piece thereof, when the same no longer is used or useful for public transportation purposes.

10.

To insure and provide for the insurance of property or operations of the authority against such risks as the authority may deem advisable and to require parties, with whom the authority contracts, to do so.

11.

To borrow money upon bonds, notes, debentures or other evidences of indebtedness issued as herein provided in the form of either long term or short term debt and to secure the same by pledges of revenues of the authority from any source in whole or in part, and by vendor's liens, mortgages, deeds of trust, chattel mortgages, conditional sales contracts, or equipment trust obligations, upon property held or to be held by the authority in the name of the metropolitan government, and in any other manner.

12.

To pledge rentals received by virtue of any lease with any public transit company as security for the payment of bonds issued under this Act.

13.

To contract with public transit companies operating within the metropolitan government area and under the jurisdiction of metropolitan transit authority, for the payment of a percentage of the gross receipts of such public transit companies in lieu of the payment of a percentage of the gross receipts to the metropolitan government provided for by general law.

14.

To expressly pledge such percentage of gross receipts so contracted to be paid in lieu of the payment of the tax levied by general law, as security for the payment of any bonds issued under this Act and if not so pledged to use the same for the general purposes set out in the following paragraph, or to relieve public transit companies of such gross receipts payments.

15.

To enter into an agreement with any public transit company operating under its jurisdiction, placing a limitation upon earnings of such company, providing for the deposit and holding of any amounts in excess of such limited earnings, establishing fare regulator funds in connection therewith, securing minimum earnings to any such public transit company, and providing for the use and disposition of excess amounts for reductions of transit fares collected by such public transit company, or for retirement of debt created under this Act upon any property owned by the authority in the name of the metropolitan government and used by such public transit company by contract with the authority.

16.

To agree to limitations upon the right of the authority to dispose of any public transportation facilities, garage facilities, transit facilities, or any part, piece, or parcel thereof in connection with any loan.

17.

To require investment of any funds held to the credit of the authority, in reserve, sinking funds, or any funds not required for immediate disbursement, in property or securities in which savings banks may legally invest funds subject to their control.

18.

To exercise the power of eminent domain in the name of the metropolitan government in order to acquire garage facilities, acting in accordance with the provisions of sections 29-16-101 et seq., of the Code of Tennessee, and any amendments thereto, or pursuant to any other applicable statutory provisions now in force or hereafter enacted for the exercise of the power of eminent domain.

19.

To execute and deliver in the name of the metropolitan government leases, deeds, mortgages, deeds of trust, chattel mortgages, conditional sales agreements, or equipment trust notes or other instruments evidencing liens upon public transportation properties, garage facilities, transit facilities, or parts, pieces or parcels thereof, acquired by the authority and securing the payment of the purchase price, but not to pledge the credit of the metropolitan government.

20.

To accept from others in connection with transfers or conveyances by the authority or contractual agreements between the authority and others, leases, bills of sale, deeds, mortgages, deeds of trust, chattel mortgages, conditional sales agreements, equipment trust notes, or other instruments evidencing liens upon property transferred by the authority and securing the purchase price thereof.

21.

To receive from the metropolitan government or any agency thereof any funds paid by said metropolitan government or any agency thereof for the use of the transit authority in carrying out the purposes of the authority.

22.

To do all things necessary and convenient to carry out the purposes of this Act.

(b)

The maximum effective period for any contract or agreement between the authority and any public transit company hereafter entered into shall be thirty (30) years from and after the date of such agreement, or the expiration date of the franchise of such transit company, whichever period is lesser. In the case of a public transit company holding an indefinite or perpetual franchise, that is, with no limitation date fixed, the limitation of thirty (30) years shall be applicable. In the absence of any effective period fixed in any such agreement, the maximum period herein provided shall be applicable. From time to time any such agreement may be amended or altered by further agreement between the authority and such company. Any agreement heretofore entered into between the authority and any public transit company operating under its jurisdiction and in effect at the date of this enactment, which would have a valid and binding agreement under this Act, shall be valid and binding as though this Act had been in effect at the time such agreement was made; provided, that the limitation of years as herein fixed shall not become operative as to agreements heretofore made except upon agreement between the authority and any such public transit company.

(c)

The provisions of any agreement or contract entered into between the authority and a public transit company as herein provided, or any amendment thereof, and the provisions of any lease, sale, or operating agreement negotiated or entered into as herein authorized, shall not be considered as a purchase by the metropolitan government of a public utility or the sale, lease or disposal of a public utility belonging to the metropolitan government, under the provisions of article 13, subparagraph 36 of this Charter, nor shall the provisions of any such contract, lease, sale, or operating agreement be considered as a public utility franchise or as a renewal, extension or amendment thereof; nor shall the same be considered as an acquisition by condemnation, or otherwise, of property of a public utility. No ordinance nor resolution of the metropolitan council, and no referendum shall be required under the provisions of this Charter or under the provisions of the laws of the State of Tennessee to make any such contract, lease, sale or operating agreement valid, effective and binding, but the same shall be valid, effective and binding upon agreement between the authority and the public transit company without further approval.

(d)

The metropolitan government in no wise shall be responsible for the performance of any agreement by the authority or for the payment of any amounts agreed to be paid by the authority in the exercise of any of the powers herein given the authority. Persons, firms or corporations contracting with the authority in the name of the metropolitan government shall be deemed to have acted with full knowledge of this and all other terms of this Act.

(e)

Funds, fees, charges, rentals and revenues received by the authority shall be paid to and received by the metropolitan treasurer of the metropolitan government and kept by him to the credit of the authority in separate accounts, wherever separate accounts are required. Funds which are pledged to secure the payment of any obligation, indebtedness, or evidence of indebtedness of the authority, will not be commingled with any other fund of the authority, except by agreement with the holders of such obligations or evidences of indebtedness. The authority and/or the metropolitan government in any mortgages, trust indentures, or agreements with bondholders may provide that certain funds or revenues or payments from specific sources shall be kept in separate accounts and any such agreement shall be complied with by the metropolitan treasurer in keeping the accounts of metropolitan transit authority. No withdrawals from any account or accounts and no payments from such funds shall be made except upon order of the authority. The authority from time to time through its chairman or secretary shall order payments made from such account or accounts and payments shall be made upon such orders in writing signed by the chairman or by the secretary, so long as there is a balance to the credit of said account or accounts.

(f)

The metropolitan treasurer shall keep accurate records and books dealing with the separate accounts of metropolitan transit authority and shall make a report to the metropolitan mayor of the metropolitan government and to the chairman of the authority on or before the first day of July each year showing in detail the amounts received and from what sources, and the expenditures made and how expended. Such books and records shall be open to inspection and examination by accountants or auditors of the metropolitan government as all books and records of the metropolitan treasurer are inspected. The secretary of metropolitan transit authority shall likewise keep accurate records and books showing all orders upon the metropolitan treasurer for expenditures of funds from accounts of the authority, to whom such funds are payable, and the purposes for which expenditures are made. The books and records of the secretary of the authority likewise shall be open to inspection and examination by the accountants or auditors of the metropolitan government.

(g)

Metropolitan transit authority shall have no power or authority to levy or collect any special tax, fee or charge upon a public transit company operating under its jurisdiction, except such taxes, fees or charges as are now in effect and are payable to the authority and as provided in this Charter, provided, however, that the authority and any public transit company operating under its jurisdiction may enter into any agreement, the making of which is authorized under this Act.

(h)

In any lease agreement entered into between the authority and a public transit company there may be included in addition to the usual and necessary provisions of an agreement of such nature the following special requirements:

(1)

The lessee shall confine its transit operations to the geographical area within the regulatory jurisdiction of the authority. The same ownership in the form of a holding company, or other business form or entity may own and operate a transit system in the metropolitan government area, along with other transit systems, but the operations of the lessee under the jurisdiction of the authority shall be an entirely separate business entity. All necessary consents shall be given by the authority to the transfer of transit franchises and properties to new companies or corporations, if such transfer becomes desirable, necessary or proper to meet this requirement. The authority by resolution may waive the requirements of this paragraph with reference to the geographical limitations upon operations and the separability of a lessee transit company as a business entity.

(2)

The authority, as a condition of the lease agreement, may require the lessee to pay rentals in advance not to exceed a sum equal to the rental for one period of twelve months. The payment of this amount, however, shall not excuse the lessee from paying current rentals, but the advance rental deposit shall be applied to the payment of the rentals for the period covered during the last months of the lease.

(3)

The lessee may be required to agree to repair and maintain the leased premises at lessee's expense and to cause to be issued policies of insurance with fire and extended coverage protection for the authority and/or the metropolitan government in an amount equal to the insurable value of such facilities, or such lesser amount as shall be agreeable to the authority, the expense of such repairs, maintenance and insurance to constitute a part of the operating expenses of the lessee.

7.

(a) Where public transit companies operate under the jurisdiction and regulation of the authority, the authority shall adjust transit fares for such companies, as, if and when required, to the end that at all times the revenues of such companies from their operations under the regulation and jurisdiction of the authority shall be adequate to meet all reasonable operating expenses, including any moneys payable to the authority, depreciation, and taxes, including federal income tax; to provide sufficient revenues to meet any commitments under any contract entered into between the authority and such public transit company for the payment of moneys; to provide sufficient revenues for the payment of funds required to meet the obligations of any bonds and interest thereon issued or incurred under this Act in providing garage facilities or transit facilities which may be used by any such public transit company; and to permit such public transit company, after meeting all the foregoing requirements or any additional requirements hereafter fixed upon its revenues, to receive from efficient operation a fair and reasonable net profit. If there shall be a delay in any fare adjustment by the authority, then such adjustment when made shall also take into consideration the extent to which the public transit company affected has failed to receive a fair and reasonable profit during any preceding period, provided that no period of time preceding the date of this enactment shall be included in any such preceding period. The soundness and security of the investment of any bonds issued under this Act, the efficiency and adequacy of the public service rendered by the public transit company, and the continued solvency and reasonably profitable operation of the public transit company, shall be assured and confirmed.

(b)

In fixing rates of fare, and determining proper return therefrom to public transit companies, the authority may establish the fair and reasonable operating ratio for public transit companies, that is, the fair and reasonable relationship between the expenses (including all operating expenses, moneys payable to the authority, depreciation and taxes including federal income tax) and gross revenues. Standards of proper, efficient and adequate service likewise shall be established, and managerial duty to maintain, and managerial discretion in maintaining the same by public transit companies shall be recognized and assumed.

(c)

The authority shall not use or exercise its power to engage in the operation of a public transit system so as to engage in competitive operation with any public transit company which is operating a public transit system under the jurisdiction and regulation of the authority. The authority by and with the consent of any public transit company operating within the jurisdictional limits of the authority may acquire, own and operate the public transportation properties of any such public transit company. The authority may use and dispose of such properties within the powers granted to authority under this Act. Nothing herein contained, however, shall be construed to restrict or limit in any manner the exercise of the regulatory jurisdiction of the authority so as to require any public transit company operating within its jurisdictional limits to furnish safe, adequate and proper service, nor shall the provisions of this paragraph restrict or limit the right of the metropolitan government to institute proceedings to forfeit franchises for misuser or nonuser thereof in proper cases.

(d)

If the authority shall become the operator of a public transit system it shall manage and operate such system in an efficient manner so as to enable it to fix rates of fare for passengers upon such transit system at reasonable rates consistent with providing safe, adequate and proper service, and the authority shall not operate any such public transit system for a profit or as a source of revenue to the metropolitan government. To this end if the authority shall own and operate a public transit system it shall fix rates of fare at no higher rates than shall be found to be necessary in order to produce revenues which (together with all other available moneys, revenues, income and receipts of the authority from whatever source derived) will be sufficient to pay as the same become due the principal and interest on the bonds issued under this Act; to meet the cost of and provide for maintaining and operating the public transit system, depreciation on the public transportation properties, and the administrative expenses of the authority; and to create adequate and proper reserves to meet principal and interest payments on such bonds.

8.

(a) Revenue bonds may be issued under this Act to provide for the construction, acquisition, repair, improvement, replacement, or extension of public transportation facilities, garage facilities, or transit facilities, or for the refunding of any bonds theretofore issued for such purpose. Such bonds may be secured by pledge of the income or revenues of the authority from any source whatsoever but the resolution adopted by the authority and the resolution of the metropolitan council shall describe the source or sources of revenue which are pledged to secure any particular bond issue. Any such bonds may be secured additionally by vendor's lien, mortgage, deed of trust, or chattel mortgage. No person executing the bonds shall be liable personally on the bonds by reason of the issuance thereof.

(b)

Bonds issued under the authority of this Act shall be payable out of revenues of funds of the authority. The bonds shall not constitute an indebtedness of the metropolitan government within the meaning of any constitutional, statutory or charter limitation or restriction. Bonds may be issued under this Act notwithstanding any debt limitation prescribed by any statute or the terms of the Charter of the metropolitan government. Nothing herein contained, however, shall prevent or interfere in any manner with the issuance of general obligation or revenue bonds of the metropolitan government under other authorization, for the purpose of making funds available to metropolitan transit authority in furtherance of the general purposes of this Act.

The bonds herein provided for shall be issued in one or more series and shall bear such dates or mature at such dates or times, not exceeding thirty (30) years from their respective issue dates, bear interest at such rate or rates, not exceeding interest at six (6%) per annum, payable semiannually, be in such denomination (which may be interchangeable), be in such form, either coupon or registered, carry such registration privilege, be executed in such manner, be payable in such medium of payment at such place or places, and be subject to such terms of redemption (with or without premium) as the bond resolution or the trust indenture or mortgage may provide.

(c)

After the sale of any revenue bonds pursuant to this article, the metropolitan government shall have power to authorize the execution and issuance to the purchasers, pending the preparation of the definitive bonds, of interim certificates therefor or of temporary bonds or other temporary instruments exchangeable for the definitive bonds when prepared, executed and ready for delivery. The holders of such interim certificates, temporary bonds or other temporary instruments shall have all rights and remedies which they would have as holders of the definitive bonds.

9.

The metropolitan government shall cause to be published in a newspaper published in the metropolitan government area a notice stating the date of adoption of such bond resolution, the amount and maturities of the bonds authorized to be issued, and also stating that any action or proceeding of any kind or nature in any court questioning the validity of the creation and establishment of the transit authority, or the validity or proper authorization of bonds provided for by the bond resolution, or the validity of any covenants, agreements or contracts, provided for by the bond resolution shall be commenced within twenty (20) days after the first publication of such notice. If no such action or proceedings shall be commenced or instituted within twenty (20) days after the first publication of such notice, then all residents and taxpayers and owners of property in the metropolitan government area and all other persons whatsoever shall be forever barred and foreclosed from instituting or commencing any action or proceeding in any court, or from pleading any defense to any action or proceeding, questioning the validity of the creation and establishment of the transit authority, the validity or proper authorization of such bonds, or the validity of any such covenants, agreements and contracts, and said bonds, covenants, agreements and contracts shall be conclusively deemed to be valid and binding obligations in accordance with their terms and tenor.

10.

Any provision of any law to the contrary notwithstanding, any bond or other obligations issued pursuant to this article shall be fully negotiable within the meaning and for all purposes of the law merchant and negotiable instruments law of the State of Tennessee, and each holder or owner of such a bond or other obligation, or of any coupon appurtenant thereto, by accepting such bond or coupon shall be conclusively deemed to have agreed that such bond, obligation or coupon is and shall be fully negotiable within the meaning and for all purposes of said law merchant and negotiable instruments law of the State of Tennessee.

11.

Any bond resolution providing for or authorizing the issuance of any bond may contain provisions, and the metropolitan government and/or transit authority, in order to secure the payments of such bonds and in addition to other powers, shall have power by provision in the bond resolution to covenant and agree with the several holders of such bonds as to:

(a)

The custody, security, use, expenditures or application of the proceeds of the bonds.

(b)

The acquisition, construction, and completion or replacement of all or any part of the public transit facilities.

(c)

The use, regulation, operation, maintenance, issuance or disposition of all or any part of the public transit facilities, or restrictions on the exercises of the powers of the metropolitan transit authority to dispose, or to limit or regulate the use, of all or any part of said facilities.

(d)

Payment of the principal of or interest on the bonds, or any other obligations, and the sources and methods thereof, the rank or priority of any such bonds or obligations as to any lien or security or the acceleration of the maturity of any such bonds or obligations.

(e)

The use, and disposition of any moneys of the metropolitan transit authority, including revenues or rental derived or to be derived from the operation of said public transit facilities.

(f)

Pledging, setting aside, depositing, or trusteeing all or any part of: (i.), the percentage of the gross receipts of any public transit company paid to the authority in lieu of the payment of the percentage of the gross receipts provided for under general law; (ii.), the rentals received by the authority; and (iii.), other revenues or moneys of the authority, to secure the payment of the principal of or interest on bonds issued under this Act, or the payment of expenses of operation or maintenance of the public transit facilities, and defining and describing the powers and duties of any trustee with regard thereto.

(g)

Setting aside out of the percentage of the gross receipts paid in lieu of the percentage of the gross receipts provided under general law, rentals and other revenues and moneys of the authority as reserves and sinking funds, and designating the source, custody, security, regulation, application and disposition thereof.

(h)

Limitations on the issuance of additional bonds or any other obligations or on the incurrence of indebtedness for the purposes provided in this article.

(i)

Vesting in a trustee or trustees such property rights, powers and duties in trust, as may be deemed necessary or desirable.

(j)

Payment of costs or expenses incident to the enforcement of the bonds or of the provisions of the bond resolution or of any covenant or contract with the holders of the bonds.

(k)

The procedure, if any, by which the terms of any covenant of contract with, or duty to, the holders of bonds may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given or evidenced.

(l)

Any other manner or course of conduct which, by recital in the bond resolution, is declared to further secure the payment of the principal of or interest on the bonds.

12.

All such provisions of the bond resolution and all such covenants and agreements shall constitute valid and legally binding contracts between the metropolitan government and the transit authority and the several holders of the bonds regardless of the time of issuance of such bonds, and shall be enforceable by any such holder or holders by mandamus or other appropriate action, suit or proceeding at law or in equity in any court of competent jurisdiction.

13.

(a) In the event that there shall be a default in the payment of principal or of interest on any bonds after the same shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of thirty (30) days, or in the event that the metropolitan government or the transit authority shall fail or refuse to comply with the provisions of this Act or shall fail or refuse to carry out and perform the terms of any contract with the holders of any such bonds, and such failure or refusal shall continue for a period of thirty (30) days after written notice to the metropolitan government or the transit authority of its existence and nature, the holders of twenty-five (25%) per centum in aggregate principal amount of the bonds then outstanding by instruments filed in the office of the metropolitan clerk and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of the bonds of such series for the purposes provided in this section, and to have the power provided in this section.

(b)

Such trustee may and upon written request of the holders of twenty-five (25%) per centum in aggregate principal amount of the bonds of such series then outstanding shall in his or its own name:

(1)

By mandamus, certiorari or other action, suit, writ or proceeding at law or in equity, enforce all rights of the holders of such bonds, including the right to require the transit authority to charge and collect rental adequate to carry out any contract as to, or pledge of, revenue, and to require the metropolitan government or the transit authority to carry out and perform the terms of any contract with holders of such bonds or its duties under this Act.

(2)

Bring action or suit upon all or any part of such bonds or interest coupons or claims appurtenant thereto.

(3)

By action or suit in equity require the metropolitan government or the transit authority to account as if it were the trustee of an express trust for the holders of such bonds.

(4)

By action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such bonds.

(5)

Declare all such bonds due and payable whether or not in advance of maturity, upon thirty (30) days' prior notice in writing to the metropolitan government or the transit authority, and if all defaults shall be made good, then with the consent of the holders of twenty-five (25%) per centum of the principal amount of such bonds then outstanding, annul such declaration and its consequences.

(c)

Such trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of the functions specifically set forth herein or incident to the general representation of the holders of bonds of such series in the enforcement and protection of their rights.

(d)

In any suit, action or proceeding by such trustee, the fees, counsel fees and expenses of the trustee and of the receiver, if any, appointed pursuant to this Act, shall constitute taxable costs and disbursements, and all costs and disbursements, allowed by the court, shall be a first charge upon any rental and revenues of the transit authority pledge for the payment or security of such bonds.

(e)

Such trustee, upon such default referred to in this section, whether or not all of the bonds of such series shall have been declared due and payable, shall be entitled as of right to the appointment of a receiver of the transit authority's public transit facilities, and such receiver may enter upon and take possession of said facilities and, subject to any pledge or contract with the holders of such bonds, shall take possession of all moneys and all property derived from or applicable to the acquisition, construction, operation, maintenance or reconstruction of said facilities and proceed to operate the same or collect rental therefor.

14.

(a) The public transit facilities and other property of metropolitan transit authority are hereby declared to be public property or a political subdivision of the state devoted to an essential public and governmental function and purpose and shall be exempt from all taxation by the state or any subdivision thereof, T.C.A. § 67-5-203 et seq. All bonds issued pursuant to this article are hereby declared to be issued by a political subdivision of this state and for an essential public and governmental purpose, and such bonds, and the interest thereon and the income therefrom and all service charges, funds, revenues and other moneys pledged or available to pay or secure the payment of such bonds, or interest thereon, shall at all times be exempt from taxations by the state or any subdivision thereof, except for transfer, inheritance and estate taxes.

(b)

Bonds issued pursuant to this article shall be legal investments for banks, trustees and other fiduciaries in Tennessee and shall be eligible as security for the deposit of public funds.

15.

The State of Tennessee does hereby pledge, covenant and agree with the holders of any bonds issued pursuant to this Act that the State, until such bonds together with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders, are fully met and discharged, will not:

(i.)

Limit or alter the rights hereby vested in the authority to acquire, construct, maintain, reconstruct, replace, operate, lease, mortgage, transfer and convey public transportation properties, garage facilities and transit facilities.

(ii.)

Limit or alter the rights hereby vested in the authority to fix, establish, charge and collect fares, rentals, revenues and moneys from the sources herein provided.

(iii.)

Limit or alter the right hereby vested in the authority to contract with public transit companies for the payment of a percentage of gross receipts in lieu of the gross receipts tax levied under Item T, section 1248.3, Supplement to the Code of Tennessee [Repealed]*, and to pledge the same as security for payment of the bonds issued under this Act, any such pledge having once been made, not to be subject to impairment or change.

(iv.)

Limit or alter the right of the authority to fulfill the terms of any agreement made with the holders of bonds issued under this Act.

(v.)

Impair the rights and remedies of the holders of the bonds issued under this Act.

(vi.)

Modify in any way the exemptions from taxation provided for in this Act.

Editor's note— Repealed by Acts, 1955, ch. 255, § 1.

16.

The powers conferred by this Act authorizing the acquisition, construction and operation of public transportation properties, garage facilities and transit facilities, the lease, mortgage, sale or disposition thereof, and the issuance of bonds, shall be in addition to and supplemental to any powers conferred by any other general, special or local law and the provisions of this Act shall be complete authority for the acquisition, construction, operation, lease, mortgage, sale or disposition of public transportation facilities, garage facilities, and transit facilities, and the issuance of revenue bonds without regard to or compliance with the requirements, restrictions, limitations or provisions contained in any other general, special or local law.

17.

Wherever in this Act an act is required to be done or may be done by a chairman, vice-chairman, secretary or assistant secretary of metropolitan transit authority, such act effectively may be done by the person filling such position at that time. Whenever an act is required to be done by a chairman, in his absence upon resolution of the authority recognizing such absence, such act may be done by a secretary, in his absence upon resolution of the authority recognizing such absence, such act may be done by a duly designated assistant secretary.