(1) Local governments are hereby authorized to make interfund loans in accordance with procedures for issuance of notes or bonds in part 5, 7 or 8 of this chapter or § 9-21-604.
(2) Local governments are hereby authorized to make interfund loans in accordance with the procedures of § 9-21-604(b) of all funds derived from the sale of any Tennessee private act hospital established pursuant to private acts of the state and the Private Act Hospital Authority Act of 1996, compiled in title 7, chapter 57, part 6. This section does not authorize the expenditure of funds derived from the sale of a private act hospital for any purpose contrary to law or applicable court order.