(a) The board of trustees has the power and authority to enter into investment contracts with, or to issue notes, bonds or other evidences of indebtedness to, any instrumentality of the state which is designated to invest funds received pursuant to the tobacco litigation master settlement agreement entered into by Tennessee and certain other states, United States territories and possessions, and participating tobacco manufacturers, dated November 23, 1998.

(b) In exercising the authority granted in subsection (a), the board of trustees is authorized to enter into such arrangements under terms and conditions the board determines to be in the best interest of the retirement system. Any debt issued pursuant to this section shall not be invalid for any irregularity or defect in the proceedings for the issuance or sale thereof. Further, all obligations issued under this section shall be exempt from taxation by the state, or by any county, municipality or taxing district of the state.

(c) Notwithstanding § 8-6-106 or other law to the contrary, the board may employ bond counsel, financial advisors, underwriters, and such other professionals deemed necessary to assist the board in the issuance, management and servicing of all debt issued by the board hereunder. Any professional so employed hereunder shall be paid such compensation as the board may deem just and such compensation may be paid out of the proceeds of any debt issued hereunder or from the assets of the retirement system. The board is further authorized to pay any or all costs or expenses incurred by the board relative to the issuance, management and servicing of any debt issued hereunder from the proceeds of any such debt or from other assets of the retirement system.