(a) Capital outlay notes issued pursuant to this section may be issued for a period not to exceed the end of the third fiscal year following the fiscal year in which the notes were issued; provided, that, with the approval of the comptroller of the treasury or the comptroller's designee, the maturity date of such notes may be extended or renewed for not more than two (2) additional periods not exceeding three (3) years each. Each fiscal year that any such original or such extension or renewal notes are outstanding following the fiscal year in which notes are issued, the local government shall retire a portion thereof equal to not less than one ninth (⁄) of the original principal amount of the notes. The resolution authorizing any such issue of notes shall provide for the principal of the notes to be payable annually, either by maturity or by mandatory redemption. The resolution authorizing such notes may provide that the notes shall be subject to redemption prior to maturity at the option of the local government. The comptroller of the treasury or the comptroller's designee, in approving any such notes, may waive the requirement of periodic retirement.

(b) Capital outlay notes issued from funds derived from the sale of any Tennessee private act hospital may be issued for a period not to exceed the end of the twentieth fiscal year following the fiscal year in which the notes were issued, with the approval of the comptroller of the treasury or the comptroller's designee. Each fiscal year that any such notes are outstanding following the fiscal year in which notes are issued, the local government shall retire a portion thereof equal to not less than one-twentieth (1/20) of the original principal amount of the notes. The resolution authorizing any such issue of notes shall provide for the principal of the notes to be payable annually, either by maturity or by mandatory redemption. The resolution authorizing such notes may provide that the notes shall be subject to redemption prior to maturity at the option of the local government. The comptroller of the treasury or the comptroller's designee, in approving any such notes, may waive the requirement of periodic retirement.