Chapter 1
Acquisition of Property

Part 1
General Provisions

12-1-101. Acceptance of gifts.

  1. The governor is authorized to accept, on behalf of the state, gifts of real estate or personal property upon such terms and conditions and for such uses and purposes as may be agreed upon by the grantor or donor thereof and the governor.
  2. Notwithstanding subsection (a), the commissioner or appointing authority of any executive branch department or agency of state government is authorized to accept, on behalf of their department or agency, gifts of personal property with a value not exceeding five thousand dollars ($5,000). Any gift with a value exceeding five thousand dollars ($5,000) must be accepted by the governor pursuant to subsection (a).
  3. Any gift accepted pursuant to subsection (a) or (b) must be reported to the commissioner of finance and administration and to the director of the fiscal review committee within thirty (30) days of acceptance. The commissioner shall maintain a registry of such gifts that is available for public inspection.
  4. Nothing in this section shall be construed to limit, diminish, supersede or otherwise alter specific authority of commissioners or appointing authorities to accept and receive gifts or donations that is otherwise granted elsewhere in this code.

Acts 1941, ch. 129, § 1; mod. C. Supp. 1950, § 186.1; T.C.A. (orig. ed.), § 12-101; Acts 2005, ch. 32, § 1.

Cross-References. Acceptance of gifts in aid of emergency prevention, mitigation, preparedness, response or recovery, § 58-2-109.

Attorney General Opinions. There would be no legal prohibition against the building of a bridge on a state road by a nonprofit foundation, provided that there was a prior contract between the department of transportation and the foundation, pursuant to T.C.A. § 54-5-109, and that, upon completion of the bridge, the planned conveyance of the bridge to the state could be accomplished pursuant to T.C.A. § 12-1-101, assuming the governor and the foundation agree as to terms and conditions of the transfer, as well as to uses and purposes of the property, OAG 02-103, 2002 Tenn. AG LEXIS 108 (10/01/02).

12-1-102. Authority for purchase of federal surplus property.

Notwithstanding any statute, public or private, providing the details of purchases on behalf of the state, or any political subdivision thereof, the state, or any political subdivision thereof, may purchase any surplus property offered for sale by the United States government from such government in such manner and on such terms as may be agreed upon between the seller and the buyer, including the right to execute deferred payment obligations and to make such purchases without taking bids or making advertisements therefor; provided, that all such purchases should be made by the agency of the state or political subdivision charged by existing or future law, with the authority to make purchases generally for the buyer.

Acts 1945, ch. 16, § 1; mod. C. Supp. 1950, § 423.2 (Williams, § 423.27); T.C.A. (orig. ed.), § 12-102.

Cross-References. Acquisition of federal surplus property through state board of education, § 49-1-304.

Central procurement office charged with state purchases, § 12-3-101.

Purchase of federal surplus property, §§ 12-1-10112-1-105.

12-1-103. Commission to purchase federal property.

There is appointed a commission to be composed of the governor, state treasurer and attorney general and reporter, which commission is clothed with authority to purchase from the federal government such property as the federal government may offer for sale and which may be used advantageously, in the discretion of the commission, by any department or agency of the state.

Acts 1945, ch. 168, § 1; C. Supp. 1950, § 1032.1; T.C.A. (orig. ed.), § 12-103.

12-1-104. Federal improvements on state land.

This commission may contract for and purchase any improvements or installations which may be located on lands belonging to the state and which have been placed on such lands by the federal government, or by any agency thereof, with authority reserved in the federal government to remove such improvements or installations, if it so elects. The terms and conditions of any such purchase shall be agreed upon by this commission and the proper representatives of the federal government.

Acts 1945, ch. 168, § 2; C. Supp. 1950, § 1032.2; T.C.A. (orig. ed.), § 12-104.

12-1-105. Payment for federal property.

Payment for any purchases made under §§ 12-1-103 and 12-1-104 shall be made out of any money in the state treasury not otherwise appropriated, and notwithstanding any contrary provision in any other statute.

Acts 1945, ch. 168, § 2; C. Supp. 1950, § 1032.2; T.C.A. (orig. ed.), § 12-105.

Compiler's Notes. This section may be affected by § 9-1-116, concerning entitlement to funds, absent appropriation.

12-1-106. Land acquired by commissioner — Payment.

The commissioner of any department of the state, with the approval of the commissioner of finance and administration, is authorized to acquire land on behalf of the state either by purchase or condemnation for use for public purposes. The land shall be paid for out of any available funds in the state treasury not otherwise appropriated.

Acts 1943, ch. 89, § 1; mod. C. Supp. 1950, § 3166.1; T.C.A. (orig. ed.), § 12-106; Acts 1984, ch. 770, § 1.

Compiler's Notes. This section may be affected by § 9-1-116, concerning entitlement to funds, absent appropriation.

Cross-References. Property acquired for defense purposes, title 58, ch. 1, part 5.

12-1-107. Application for purchase of land.

In the event it becomes necessary to so acquire any land under authority of §§ 12-1-10612-1-108, the commissioner of the department seeking to have the same acquired shall make a request in writing to the governor, giving in detail the location of the land sought to be acquired, its probable cost, the necessity for the acquisition and all other information the commissioner deems material, and if the governor approves the request for acquisition, the commissioner shall then be authorized to acquire the land.

Acts 1943, ch. 89, § 1; C. Supp. 1950, § 3166.1; T.C.A. (orig. ed.), § 12-107.

12-1-108. Condemnation request.

In the event it becomes necessary to condemn the land, the commissioner and the governor shall request the attorney general and reporter in writing to file the proper condemnation proceedings, which shall be under the general laws relating to the acquisition of land for public purposes by condemnation, authority being granted for that purpose.

Acts 1943, ch. 89, § 1; mod. C. Supp. 1950, § 3166.1; T.C.A. (orig. ed.), § 12-108.

Cross-References. Eminent domain by public agencies, title 29, ch. 17, parts 1-8.

12-1-109. Land for institutional water or sewage system.

The state, acting through the department or agency having the power of supervision over any penal, charitable, reformatory, or educational institution belonging to the state, with the approval of the governor, shall have the right to acquire by purchase, donation, or condemnation on behalf of the state, all necessary land with interests therein, including necessary flowage rights, rights of riparian owners on any stream within the state, and easements for pipelines for the purpose of the installation of a system of waterworks or sewage disposal, for the use of such institution. The state shall make compensation in such case to the owner of such land or rights out of any funds belonging to the state, not otherwise appropriated.

Acts 1929, ch. 121, §§ 1, 2; mod. Code 1932, §§ 3165, 3166; modified; T.C.A. (orig. ed.), § 12-109.

Cross-References. Private property not to be taken for public use without just compensation, Tenn. Const., art. I, § 21.

12-1-110. Joint purchase of art.

  1. Any state agency authorized to purchase a work of art is authorized to enter into contracts with a private or public foundation to jointly purchase a work of art as defined in § 47-25-1002. Such contracts shall be entered into in accordance with state purchasing statutes and regulations.
  2. Such contracts, to be mutually agreed upon, shall provide that neither party may dispose of its partial ownership without the consent of the other, and shall set forth in detail the proportion of ownership of each party, the alternation of custody of the work of art, provision for conservation treatment, if needed, provision for transport between the parties, and the conditions of display and care to be observed while the work of art is in the control of each party.
  3. No such contract shall be binding on the state agency until it is reviewed and approved by the office of the attorney general and reporter as to its legality for new purchases.
  4. Nothing in this section shall be construed to apply to property already owned by the state, nor shall it impair the obligation of state agencies to dispose of their ownership or part ownership in property in accordance with applicable state statutes and regulations governing disposal of state property.

Acts 1988, ch. 598, § 1.

12-1-111. Continued validity of agreement between local government and adjoining private property owner for agricultural use of government land upon sale of such land to another local government.

  1. If any real property owned by a local government, where a written agreement was executed allowing adjoining private property owners to utilize the local government's real property for agricultural use when the property was transferred by execution of a quitclaim deed to the local government, is then sold or transferred to another local government or to a state agency, then the written agreement shall continue to be valid.
  2. Any local government transferring or selling real property as described in subsection (a) shall give written notice to any affected private property owners thirty (30) days prior to the sale or transfer.
  3. If any private property owner is required to cease agricultural use of any real property that is sold or transferred to a state agency pursuant to subsection (a), then the state agency shall be responsible for providing information regarding potential grant funding for fencing and watering livestock and may work with the owner to seek such funding, if such funding is available; provided, that the owner shall be responsible for maintaining any of the resulting improvements.

Acts 2015, ch. 496, § 1.

Part 2
Government Taking of Private Property

12-1-201. Purpose of part.

The purpose of this part is to provide a mechanism for education of, and consideration by, state agencies and the public regarding what government actions may result in an unconstitutional taking of private property, in order to avoid an unnecessary burden on the public treasury and unwarranted interference with private property rights. It is not the purpose of this part either to enlarge or to reduce the scope of private property protections afforded by the constitution of the United States or Tennessee.

Acts 1994, ch. 924, § 2.

12-1-202. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Government action” does not include:
    1. The formal exercise of the power of eminent domain;
    2. The forfeiture or seizure of private property by law enforcement agencies as evidence of a crime or for violations of law;
    3. Orders issued by a state agency or court of law that result from a violation of law and that are authorized by statute; or
    4. The discontinuation of government programs;
  2. “Private property” means real property, or improvements to real property, not owned by the federal government or a state agency; and
  3. “Unconstitutional taking” or “taking” means the taking of private property by government action such that compensation to the owner of that property is required by either:
    1. The fifth or fourteenth amendment to the Constitution of the United States; or
    2. The Constitution of Tennessee, Art. 1, § 21.

Acts 1994, ch. 924, § 3.

12-1-203. Guidelines for avoiding unconstitutional takings.

The attorney general and reporter shall develop and submit to the secretary of state for publication in the Tennessee administrative register guidelines to assist in the identification and evaluation of government actions that may result in unconstitutional taking. The attorney general and reporter shall base the guidelines on current law as articulated by the United States supreme court and the supreme court of Tennessee, and shall update the guidelines at least on an annual basis to take account of changes in the law. Nothing in the guidelines shall be construed either to enlarge or to reduce the scope of private property protection afforded by the constitution of the United States or Tennessee. Furthermore, in reviewing rules in the process of promulgation, the attorney general and reporter shall not approve rules that would effect an unconstitutional taking.

Acts 1994, ch. 924, § 4.

12-1-204. Effect of taking on property valuation.

If a court determines that a government action has resulted in an unconstitutional taking in Tennessee, the effect on the valuation of such property shall be taken into account in determining the value of the property for property tax purposes under title 67, chapter 5, part 6.

Acts 1994, ch. 924, § 5.

12-1-205. Attorneys' fees.

An owner of private property who successfully establishes that a government action is an unconstitutional taking of such owner's private property requiring payment or just compensation shall be entitled to recover the same attorneys' fees, costs and expenses as are allowable in actions brought pursuant to § 29-16-123(b). Such recovery shall be in accordance with the procedures provided in such section.

Acts 1994, ch. 924, § 6.

12-1-206. Limitation of action.

An owner of private property shall commence any proceedings claiming a government action is an unconstitutional taking within the same limitation of actions period as provided in § 29-16-124 for actions commenced pursuant to § 29-16-123.

Acts 1994, ch. 924, § 7.

Chapter 2
Administration and Disposition of State Property

Part 1
General Provisions

12-2-101. Development of natural resources.

The governor is empowered to develop the natural resources of any and all property owned by the state. In order to carry out the provision of this section, the governor may use any of the resources, facilities, and activities of any department of the state. The governor may enter into contracts for the state with any person to do the necessary work that may be required, and if necessary, may lease any of the property at a reasonable rental or royalty in order that any of the mineral and oil resources may be properly developed.

Acts 1919, ch. 191, §§ 1, 2; Shan. Supp., §§ 241a2, 241a3; Code 1932, §§ 185, 186; T.C.A. (orig. ed.), § 12-201.

12-2-102. Inventory maintained by governor.

The governor is authorized and directed to maintain a complete inventory of all state-owned property, together with necessary surveys, maps, photographs and appraisals, and one (1) copy thereof shall be filed in the office of the secretary of state, one (1) with the commissioner of general services, one (1) with the governor, and additional copies with such other public officials as the governor may designate so that the same may be made a part of the permanent records of the state. This inventory shall be added to from time to time as additional property is acquired by the state or by any agency thereof.

Acts 1941, ch. 149, § 1; mod. C. Supp. 1950, § 186.2; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; impl. am. Acts 1972, ch. 542, § 15; T.C.A. (orig. ed.), § 12-202; Acts 2013, ch. 454, § 35.

Cross-References. Effect of subsequent sections, § 12-2-110.

12-2-103. Inventory by commissioner of general services.

The commissioner of general services shall make and maintain a complete inventory in permanent form of all state-owned real property, together with necessary surveys, maps, photographs and appraisals, and when such inventory has been completed, a copy of the same shall be filed in the office of the governor, state treasurer, secretary of state, and such other public officials and departments as the governor may designate. The original copy of the inventory shall remain in the office of the commissioner of general services for safekeeping and be preserved by the commissioner as other public records. Partial copies shall be filed with each department of the state, covering property occupied or used by such department.

Acts 1947, ch. 106, § 2; mod. C. Supp. 1950, § 255.77 (Williams, § 254.20); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-203; Acts 2013, ch. 454, § 36.

12-2-104. Conveyances and documents transmitted to commissioner of general services.

It is the duty of each state official who acquires real property by deed, lease or otherwise for the state of Tennessee, upon delivery of the instrument by which the property is conveyed, immediately to transmit the same to the commissioner of general services in order to ensure compliance with § 12-2-105. Each state official, having in such state official's custody any deeds, leases, abstracts of title, or certificates of title, is hereby directed to transmit the same to the commissioner.

Acts 1947, ch. 106, § 5; C. Supp. 1950, § 255.80 (Williams, § 254.23); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-204; Acts 2013, ch. 454, § 36.

Cross-References. Titles recorded by secretary of state, § 8-3-104.

12-2-105. Assembly and recording of conveyances.

  1. It is the duty of the commissioner of general services to collect all deeds to state-owned real property, and record each of the deeds in the county or counties in which the property is located. Thereafter, the commissioner shall transmit to the secretary of state the deeds, and they shall be recorded word for word and indexed in a well-bound book similar in design to the books used by the various county registers. In the event the commissioner is unable to locate any deed to state-owned property, the commissioner shall obtain a certified or photostatic copy of the same, if possible, and file it in such commissioner's office in conformity with this section.
  2. The above procedure shall be followed in connection with any property which the state as lessee has under lease.

Acts 1947, ch. 106, § 3; C. Supp. 1950, § 255.78 (Williams, § 254.21); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-205; Acts 2013, ch. 454, § 36.

12-2-106. Payment of registers' fees.

All county registers of this state are required to extend credit to the commissioner of general services for the recordation of various instruments, including deeds and leases, and, after the instruments have been recorded, the county register will submit such county register's bill for services to the commissioner in order to obtain payment of the same.

Acts 1947, ch. 106, § 10; C. Supp. 1950, § 255.85 (Williams, § 254.28); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-206; Acts 2013, ch. 454, § 36.

12-2-107. Copies of deeds certified by secretary of state.

The secretary of state is authorized to issue certified copies of deeds to state-owned property which have been recorded in the secretary of state's office, and the same are declared to be admissible as evidence in any court of this state.

Acts 1947, ch. 106, § 9; C. Supp. 1950, § 255.84 (Williams, § 254.27); T.C.A. (orig. ed.), § 12-207.

12-2-108. Permanent records of commissioner of general services — Deeds — Records of leases.

  1. Upon recordation of the deeds by the secretary of state, the secretary of state shall promptly return the same to the commissioner of general services for safekeeping in the commissioner's office as public records, together with abstracts of title, and certificates of title, covering the property.
  2. It is the further duty of the commissioner to keep a permanent record in the commissioner's office of deeds which have come into the commissioner's possession, showing where the property is located, its size, its cost, when acquired, and such other information as the commissioner deems necessary.
  3. Upon recordation of leases by the secretary of state, the secretary of state shall promptly return the same to the commissioner for safekeeping in the commissioner's office. Such leases may be disposed of pursuant to guidelines established by the public records commission; however, such leases must be maintained for a period of no less than seven (7) years from the termination date of the lease. Leases which have been in existence for more than twenty (20) years on June 25, 1991, may be disposed of pursuant to such guidelines established by the public records commission. Prior to disposal of all other leases, the leases shall be microfilmed, and the microfilm shall be preserved pursuant to § 10-7-303(e).

Acts 1947, ch. 106, § 4; C. Supp. 1950, § 255.79 (Williams, § 254.22); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-208; Acts 1991, ch. 498, §§ 1-3; 2013, ch. 454, § 36.

12-2-109. Withdrawal of papers from commissioner's office.

The commissioner of general services shall not permit any deeds, leases, abstracts of title, certificates of title or other instruments on file in the commissioner's office to be withdrawn or taken therefrom except in instances where it may be necessary to use them in connection with pending or threatened litigation affecting any of the lands, and then the attorney general and reporter may withdraw the papers temporarily from the office of the commissioner of general services for use in connection with such pending or threatened litigation, leaving a descriptive receipt therefor.

Acts 1947, ch. 106, § 6; C. Supp. 1950, § 255.81 (Williams, § 254.24); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-209; Acts 2013, ch. 454, § 36.

12-2-110. Provisions in pari materia.

Sections 12-2-10312-2-111 shall be read in pari materia with § 12-2-102, except insofar as those sections are expressly in conflict therewith, and, in the event of such conflict, §§ 12-2-10312-2-111 shall prevail.

Acts 1947, ch. 106, § 11; mod. C. Supp. 1950, § 255.86 (Williams, § 254.29); T.C.A. (orig. ed.), § 12-210.

12-2-111. Engineer and assistants to commissioner.

The commissioner of general services, on approval of the governor, is empowered to employ a qualified engineer and such other assistants as may be necessary to enable the commissioner to fully perform the duties and to execute the powers conferred by §§ 12-2-10312-2-110.

Acts 1947, ch. 106, § 7; C. Supp. 1950, § 255.82 (Williams, § 254.25); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 12-211; Acts 2013, ch. 454, § 36.

12-2-112. Disposal of surplus interests in real property and energy resources.

  1. The commissioner of general services, with the approval of the governor and attorney general and reporter, may sell, lease or otherwise convey any interest in surplus state real property according to the following provisions:
    1. Real property shall not be sold in fee, and any interest or rights in minerals, coal, natural gas, oil, timber and any other energy related resources shall not be conveyed if there is any feasible use for the property by any state agency, as determined by the governor, the attorney general and reporter and the commissioner of general services. Should the state agency have an approved use for the property, the commissioner is authorized to transfer jurisdiction to the appropriate agency at no cost;
    2. As to sales in fee, and to any conveyance of any interest or rights in minerals, coal, natural gas, oil, timber and any other energy-related resources, such property shall be appraised by at least two (2) independent, qualified appraisers, wholly disconnected from state government or any other legal governmental entity except as may otherwise be determined by the state building commission;
    3. As to sales in fee, and to any conveyance of any interest or rights in minerals, coal, natural gas, oil, timber and any other energy-related resources, such surplus property having an average appraised value exceeding twenty-five thousand dollars ($25,000) shall be advertised not less than one (1) time in a newspaper which is local with respect to the property to be sold and once in a newspaper in either Nashville, Memphis, Chattanooga or Knoxville, whichever is nearest by air; provided, that if one (1) of these four (4) cities is the situs of the property to be sold, advertisement shall be made twice within a two-week period. Any interest or rights in minerals, coal, natural gas, oil, timber and any other energy-related resources shall be sold by the sealed bid method with the condition that the state shall have the right to refuse any and all bids. Fee interests in real property shall be sold by the sealed bid method or by public auction in accordance with policies established by the state building commission, with the condition that the state shall have the rights to refuse any and all bids. As used in this subdivision (a)(3), “public auction” may include, without limitation, internet auctions and in-person auctions so long as such auctions are open for participation by the public at large. Upon the approval of the governor, the attorney general and reporter, and the commissioner, the successful bidder will be notified of the intent to award within a period of forty-five (45) days commencing from the date of bid openings;
    4. All interests in real property other than the fee interest, including, but not limited to, leases, easements and rights-of-way, shall be disposed of in accordance with policies established by the state building commission, including advertisement and appraisal where deemed appropriate by the state building commission; provided, however, that, if the property was acquired by or for the use of the department of transportation for right-of-way, then the department of transportation may convey the interests in the property by negotiated sale or disposal to any legal governmental body for a public use purpose, subject to reversion to the department of transportation for failure to continue public ownership and use, or to the former owner or an adjoining owner for fair market value, in accordance with procedures established in subdivision (a)(8). If approved by the department of transportation, and the federal highway administration where required by federal law, a functional replacement of real property may be considered to continue public ownership and use, and shall not be subject to reversion to the department of transportation, if the replacement property is at least equal in fair market value to the property being replaced. For the purposes of this subdivision (a)(4), a functional replacement of real property means real property that serves the same function as the real property conveyed by the state by providing equivalent utility, as determined by the department of transportation, and the federal highway administration where required by federal law. The fair market value of the replacement property shall be determined in accordance with the procedures for determining the fair market value of the surplus property established in subdivision (a)(8). This subdivision (a)(4) shall not apply to the disposal or conveyance in any manner of any interest or rights in minerals, coal, natural gas, oil, timber and any other energy related resources; provided, that the commission shall have authority to promulgate rules and regulations over the disposal or conveyances pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;
    5. Subdivisions (a)(2) and (3) may be waived to permit the negotiated sale of any such property to any legal governmental body for a public use purpose, and, further, to permit any other negotiated sale or disposal without advertisement or appraisal as the state building commission may deem in the best interest of the state. Subdivisions (a)(2) and (3) may also be waived to permit the commissioner, with the approval of the attorney general and reporter and the governor, to grant such easements and rights-of-way as are deemed necessary to provide services for the benefit of the state agency, department or institution or of the general public; (6)  The final conveyance of any property shall be effective to vest in the purchaser thereof such title as the state shall have in the premises; the state shall not be liable upon any covenant of warranty or seisin irrespective of whether or not the same is contained in such conveyance;
      1. The former property owner's right shall terminate ten (10) years after the date of acquisition by the department of transportation by conveyance or date of taking in condemnation of the subject property by the department. The former property owner's right shall not transfer to the owner's heirs. The former property owner shall have first right of refusal to purchase the right-of-way; provided, however, that the department may convey the property or any interest in the property to a legal governmental body for a public use purpose, subject to reversion to the department of transportation for failure to continue public ownership and use, without offering the former owner a first right of refusal to purchase the property. If the former property owner relinquishes the owner's right or the right has expired, the property may be conveyed to a legal governmental body in accordance with subdivision (a)(8)(D) or to an adjoining property owner. If more than one (1) adjoining property owner is interested in purchasing the right-of-way, the interested adjoining property owners shall submit sealed bids to the department of transportation, with the minimum bid price being the fair market value determined by appraisal, and the property may be conveyed to the adjoining property owner offering the highest responsive bid. The successful bidder shall reimburse any unsuccessful prospective purchaser for survey and appraisal costs incurred in accordance with the requirements of this subdivision (a)(8);
      2. For the purposes of this subdivision (a)(8), the fair market value of surplus right-of-way property shall be determined in accordance with the following procedures:
        1. The department of transportation shall make a preliminary planning estimate of the fair market value of the property in accordance with procedures that the department may establish;
        2. If the department of transportation's preliminary planning estimate of the fair market value of the property is ten thousand dollars ($10,000) or less, the property shall be appraised by an appraiser on staff with the department of transportation at no cost to the prospective purchaser;
        3. If the department of transportation's preliminary planning estimate or subsequent staff appraisal of the fair market value of the property is greater than ten thousand dollars ($10,000), the property shall be appraised by an independent appraiser whose services shall be procured by the department of transportation in accordance with state law. The independent appraiser must be licensed and certified by the Tennessee real estate appraiser commission and shall be selected from a list of prequalified appraisers approved by the department of transportation. The prospective purchaser shall pay the department of transportation in advance for the cost of the independent appraisal;
        4. The initial appraisal shall be subject to review and approval by the department of transportation in accordance with procedures that the department of transportation may establish. The appraisal review shall be conducted, at the department of transportation's expense, by a review appraiser who is licensed and certified by the Tennessee real estate appraiser commission and who is either employed by or under contract with the department of transportation. The review appraiser shall either approve the initial appraisal or reject the initial appraisal and reappraise the property to determine the fair market value of the property, subject to the approval of the director of the right-of-way division of the department of transportation or the director's designee. If approved by the director or the director's designee, the review appraiser's determination shall be presented to a prospective purchaser as the fair market value of the property;
        5. If a prospective purchaser does not accept the appraised fair market value of the property as determined by the review appraiser, the prospective purchaser may request a final review and reconsideration by the commissioner of transportation or the commissioner's designee. The commissioner or the commissioner's designee shall obtain a final review of the appraisal by a review appraiser who is licensed and certified by the Tennessee real estate appraiser commission and who is either employed by or under contract with the department of transportation; provided, however, that the final review appraiser shall not be the same person who previously reviewed the initial appraisal. The prospective purchaser shall be given the opportunity to present information concerning the value of the property for the consideration of the final review appraiser. The final review appraiser shall consider all relevant information, including any appraisal previously performed by or for the department of transportation, and shall have the authority to reappraise or make adjustments in the appraised fair market value, in accordance with generally accepted professional standards and guidelines. The final review appraiser's determination of the fair market value of the property shall be subject to the approval of the commissioner or the commissioner's designee; and
        6. The department's final determination of the fair market value of the property is subject to the concurrence of the commissioner of general services;
      3. Notwithstanding any law to the contrary, if the department of transportation's staff appraisal of a tract of surplus real property under subdivision (a)(8)(C)(ii) is equal to or less than ten thousand dollars ($10,000), the department may transfer its interest in the property to any legal governmental body for the appraised value of the property, subject to the former owner's right of first refusal under subdivision (a)(8)(B), without further appraisal or approval under this section, except for the appraisal review provided in subdivision (a)(8)(C)(iv);

        If property acquired by the department of transportation for a right-of-way through the exercise of eminent domain or otherwise is determined by the commissioner of transportation to be no longer needed by the department of transportation, and the excess property is not transferred to another state agency or conveyed to some other legal governmental body as provided in this section, and the excess property is not disposed of in accordance with subdivision (a)(8), the excess property shall be disposed of by the department of general services in accordance with the following procedures:

      4. The excess property shall be sold to any adjoining property owner or the former owner of that property at fair market value. All funds collected from the sale of the property shall be paid into the highway fund, as provided in subdivision (a)(7);
      5. The costs associated with the conveyance of the land, including, but not limited to, the cost of appraising and surveying the property, shall be reimbursed to the state by the purchaser of the property;
      6. Any conveyance of the property made pursuant to this subsection (a) shall be subject to approval in advance by the state building commission;
      7. If no adjoining property owner or the former owner of that property is able and willing to purchase the excess property at fair market value, then the excess property may be disposed of in accordance with existing statutes;
      8. For the purposes of this subsection (a), the fair market value of the excess property shall initially be determined by the state through procedures established by the state building commission. If such initial determination of fair market value is deemed unacceptable by the intended purchaser, the fair market value of the excess property shall then be determined by averaging the state's initial determination of fair market value with two (2) additional fair market value appraisals of the excess property. The two (2) additional appraisals shall be performed by two (2) nonassociated appraisers from the locality in which the property is located. The two (2) appraisers shall be mutually agreed upon by the parties to the conveyance; none of the appraisers involved shall have any personal or financial interest in the conveyance;
      9. The former property owner's right shall terminate ten (10) years after the date of acquisition by the department of transportation by conveyance or date of taking in condemnation of the subject property by the department. The former property owner's right shall not transfer to such owner's heirs. The former property owner shall have the first right of refusal to purchase the right-of-way. If the former property owner relinquishes such owner's right, the adjoining property owners interested in purchasing the right-of-way shall submit sealed bids with the minimum bid price being the fair market value determined by appraisal;
      10. If approved by the department of transportation, and the federal highway administration where required by federal law, the department of general services may accept real property in exchange for the excess real property conveyed if the replacement property is at least equal in fair market value to the excess property being replaced. The fair market value of the replacement property shall be determined in accordance with the procedures for determining the fair market value of the excess property established in this subdivision (a)(9);

        Notwithstanding any provision to the contrary, any funds collected from the lease of surplus state real property for communications relay apparatus or antennae sites that would otherwise be paid into the general fund of the state pursuant to subdivision (a)(7) shall be specifically earmarked for maintenance of state park facilities, including furniture, fixtures and equipment. Any such funds that are unencumbered or unexpended at the end of any fiscal year shall not revert to the state general fund, but shall be carried forward until expended for the purposes stated in this section;

        (A)  Notwithstanding subdivision (a)(9) or any other law to the contrary, when and if the state transfers to the local government in which any tract or combination of tracts of property which are contiguous to one another and exceed twenty (20) acres in size and which were acquired by the department of transportation as part of an uncompleted and cancelled interstate and defense highway right-of-way in a county with a population in excess of eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census, is located, the transfer shall be subject to final approval by the state building commission and shall only be used for redevelopment pursuant to subdivision (a)(11)(B);

      11. Any property transferred pursuant to subdivision (a)(11)(A) shall be subject to the following restrictions:
        1. Development by the local government of a flowering-tree landscaped parkway-type roadway in accordance with title 54, chapter 17, part 1;
        2. Development of the remaining property, with priority given to subdivision (a)(11)(B)(ii)(a ), for:
          1. Housing; provided, that some of the land is used for development of affordable housing with the needs of the community for affordable housing properly addressed in that use;
          2. School land;
          3. Park land;
          4. Public spaces; and
          5. Associated mixed-use neighborhood uses; and
        3. The roadway involved herein from the end of Sam Cooper Boulevard to East Parkway and all the land involved herein shall conform to the limitations regulating scenic highways as in § 54-17-109, except for § 54-17-109(11); and
  2. The commissioner of general services shall notify the house of representatives and senate member or members from the district in which the property to be sold or conveyed is located, and the notification shall be at least twenty (20) days prior to the agreement of sale or conveyance.
  3. This section and § 4-15-102 do not apply to timber which is harvested and sold pursuant to bona fide timber management practices. For the purpose of harvesting and selling of timber pursuant to bona fide timber management practices, the timber shall be treated as personal property and sold pursuant to rules and regulations of the procurement commission as provided in part 4 of this chapter.
  4. This section and § 4-15-102 do not apply to leasing surplus state real property under crop lease arrangements by the Tennessee wildlife resources agency which shall be responsible for the leasing of such surplus state real property for crop leases, as well as being responsible for the administration of all crop leases; such leasing and administration shall be through procedures reviewed and approved by the state building commission.

The funds so collected from the sale and conveyance of such property not otherwise specified shall be paid into the general fund of the state; provided, that all expenses incurred during such sale shall be paid from the proceeds and the balance of such proceeds shall be deposited into the general fund, except where otherwise provided by law. In instances in which other law specifies that the proceeds be deposited into a fund other than the general fund or into a special account in the general fund, the expenses of such sale or conveyance shall be paid from such other fund or special account. The funds so collected from the sale and conveyance of any property which has been deemed surplus right-of-way held for the use or benefit of the department of transportation shall be paid into the highway fund, and all expenses incurred during such sale shall be paid from the highway fund;

(A)  If the property was acquired by or for the use of the department of transportation for right-of-way, if its fair market value does not exceed seventy-five thousand dollars ($75,000) or such amounts in excess of seventy-five thousand dollars ($75,000) as may be approved by the state building commission, and if any adjoining property owner or the former owner of that property wishes to purchase the property, or if a legal governmental body wishes to acquire the property for a public use purpose under this subdivision (a)(8)(A) or subdivision (a)(8)(B), or if a legal governmental body wishes to acquire the property for fair market value as provided in subdivision (a)(8)(D), then this subdivision (a)(8) shall apply, notwithstanding any other provision of this section. Instead, the commissioner of transportation is authorized to declare the property surplus if the commissioner determines that the purpose of its acquisition has been completed and that the property is no longer needed by the department of transportation or another state agency, and may sell it to any adjoining property owner or the former owner of that property, for an amount representing not less than the fair market value, together with costs; provided, however, that the department of transportation may convey the property or any interest in the property by negotiated sale or disposal to any legal governmental body for a public use purpose, subject to reversion to the department of transportation for failure to continue public ownership and use. If approved by the department of transportation, and the federal highway administration where required by federal law, the department of transportation may accept real property in exchange for the surplus real property conveyed if the replacement property is at least equal in fair market value to the surplus property being replaced. The fair market value of the replacement property shall be determined in accordance with the procedures for determining the fair market value of the surplus property established in this subdivision (a)(8). The commissioner of general services shall concur in the fair market value amount or in the negotiated sale or disposal of the property to a legal governmental body for a public use purpose. If in the judgment of the department of transportation a survey of the property is required, the prospective purchaser shall pay the department of transportation in advance for the cost of the survey;

Notwithstanding any provisions of this section to the contrary, if property acquired by or for the use of the department of transportation for right-of-way has not been disposed of in accordance with subdivision (a)(8) or (a)(9) and no person or entity, including the former owner of that property, has been able and willing to purchase the property within five (5) years after the date the property has been offered for sale by the department of transportation, then the property may be sold at public auction pursuant to rules promulgated by the commissioner of transportation.

Acts 1953, ch. 258, § 1 (Williams, § 423.25a); 1974, ch. 621, §§ 1, 2; 1976, ch. 564, § 1; 1977, ch. 37, § 1; T.C.A. (orig. ed.), § 12-212; Acts 1981, ch. 184, §§ 1-7; 1981, ch. 332, § 27; 1984, ch. 790, § 1; 1984, ch. 872, § 1; 1985, ch. 291, § 1; 1986, ch. 662, §§ 1, 2; 1989, ch. 249, §§ 1-3; 1991, ch. 498, § 6; 1993, ch. 159, § 1; 1997, ch. 402, §§ 1-5; 1998, ch. 985, § 1; 1999, ch. 448, § 1; 2000, ch. 966, §§ 1, 2; 2006, ch. 649, § 1; 2007, ch. 118, §§ 1-3; 2010, ch. 985, §§ 1-3; 2011, ch. 295, § 19; 2013, ch. 454, §§ 36, 37; 2014, ch. 561, § 1; 2018, ch. 949, §§ 1-3.

Compiler's Notes. Acts 1999, ch. 448, § 2 provided that the act shall become operative only if the federal highway administrator advises the commissioner of transportation in writing that the provisions of the act shall not render Tennessee in violation of federal laws and regulations and subject to penalties prescribed therein.

For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Cross-References. Exemption from state purchases law, § 12-3-102.

General fund deposit exception for Chickasaw Basin reserve account, § 64-1-204.

Real estate appraiser commission, title 62, ch. 39, part 2.

Attorney General Opinions. Perpetual highway easement not subject to surplus sale, OAG 98-046, 1998 Tenn. AG LEXIS 46 (2/17/98).

The state can return Columbia Project lands to the original owners if the Tennessee Valley Authority transfers the lands to the state without any deed restrictions that would preclude returning the lands, and the state determines that the lands are surplus real property with an average appraised value of less than $ 25,000.00 in accordance with T.C.A. § 12-2-112(a)(3), OAG 00-173, 2000 Tenn. AG LEXIS 176 (11/16/00).

12-2-113. Public properties may be used to promote and foster industrial development.

  1. The state of Tennessee and the counties and cities thereof are authorized and empowered to permit use of their respective properties to promote and foster industrial development and create employment opportunities within their respective boundaries so long as such use does not unreasonably interfere with the use of such properties for their public purposes.
  2. The state of Tennessee is specifically authorized through the governor and the commissioner of finance and administration, acting in cooperation with the state department involved, to enter into contracts with utility districts, water districts, local governments, industry or others for the sale of water from reservoirs owned by the state, in order that the purposes set forth in subsection (a) can be achieved.

Acts 1963, ch. 331, § 1; 1969, ch. 8, § 1; modified; T.C.A., § 12-228.

12-2-114. State leases — Procedure.

  1. As used in this section, “entity” means any state agency, department, or institution of higher education of the state.
  2. When it becomes necessary for an entity to enter into a new lease as lessee, the applicable state procurement agency, in accordance with the policy of the state building commission, shall:
    1. Prepare a general statement of the entity's space needs; and
    2. Advertise, at the cost of the entity requesting the space, the entity's space needs on the website of the state procurement agency and in a newspaper of general circulation in the city or county where the space is needed on at least one (1) occasion and at least two (2) weeks before proposals are opened, or as required by the policy of the state building commission, unless one (1) of the following exceptions is satisfied:
      1. The annual rental will be less than an amount to be specified by the policy of the state building commission, the amount not to exceed fifty thousand dollars ($50,000);
      2. The property to be leased is owned or otherwise controlled by a city, county, or other political subdivision of the state or the federal government;
      3. The space required by the entity has special and unique requirements as determined and approved by the state building commission; or
      4. The term of the lease will be one (1) year or less.
  3. When it becomes necessary for an entity to amend a lease where it is the lessee, advertising shall not be required for:
    1. Lease renewals where the right to renew the lease and the terms of the rental rate for the renewal term were included in the original lease;
    2. Extensions to the term of a lease by one (1) year or less beyond the expiration date set forth in the original lease; or
    3. Other amendments to a lease, unless required by the policy of the state building commission.
  4. Any proposal to lease space to the entity shall contain the name of any persons who are contemplated to become financially interested in the lease and shall be made readily available and accessible for public examination.
  5. After receipt of the proposals, the state procurement agency, in accordance with the policy of the state building commission, may then negotiate with the prospective lessors for leasing of the needed space, taking into account not only the rent offered but the type of space, the location, its suitability for the purpose, services offered by the lessor, moving costs, and all other relevant factors. The state shall enter into a lease with the proposer offering the proposal with the lowest total cost, unless a statement of justification supporting award to a different proposer has been submitted to and approved by the state building commission prior to entering into the lease.

Acts 1976, ch. 842, § 1; T.C.A., § 12-252; Acts 1980, ch. 740, § 1; 1981, ch. 196, § 1; 1981, ch. 332, § 29; 1984, ch. 754, § 1; 1989, ch. 454, §§ 4, 5; 1990, ch. 734, §§ 3, 4; 1997, ch. 402, §§ 6, 7; Acts 2013, ch. 454, § 36; 2015, ch. 382, § 1.

12-2-115. Approval of lease instrument where state is lessee or lessor.

  1. Notwithstanding any other law to the contrary, no lease of property to the state government or any agency, department, institution or office thereof shall be entered into unless the instrument of lease is first approved as to form and legality by the attorney general and reporter. This provision shall only apply to leases which are longer than five (5) years or if the consideration for any such lease amounts to more than one hundred fifty thousand dollars ($150,000) per year.
    1. If any proposed lease of property by or to the state government or any agency, department, institution or office thereof is longer than five (5) years or if the consideration for any such lease amounts to more than one hundred fifty thousand dollars ($150,000) per year or such other amount as determined by the state building commission, it shall first be submitted to and approved by the state building commission.
      1. With respect to any lease of property that is not submitted to and approved by the state building commission, the office of the state architect shall, subject to such exceptions as the commission may by its policies direct, post on its website at a minimum the following information, as applicable, regarding each such lease:
        1. Name or names of lessor or lessors and lessee or lessees;
        2. Lease description and purpose;
        3. Lease term;
        4. Rental rate, stated as total rent for the lease term, annual rent, and as a rent per square foot;
        5. Source or sources of funding;
        6. Procurement method used to obtain the lease; and
        7. Any other information as directed by the commission.
      2. In addition to the above, the state architect shall post on the office's website any changes to information posted in accordance with this subdivision (b)(2) as soon as practicable after the change is authorized.
      3. The state architect shall ensure that all information posted on the office's website pursuant to this subsection (b) is set forth in a manner and format consistent with the policies and procedures of the commission.
  2. No lease of property to the state government or any agency, department, institution or office thereof shall be valid unless the requirements of this section are met.
  3. Notwithstanding the language in § 9-4-5113 to the contrary, leases of property to the state government or any agency, department, institution or office thereof, the total cost of which is less than an amount determined pursuant to policy established by the commissioner of finance and administration and approved by the state building commission, need not be certified, as indicated in § 9-4-5113, by the commissioner.

Acts 1978, ch. 585, § 1; 1978, ch. 943, § 1; T.C.A., § 12-253; Acts 1984, ch. 754, § 2; 1985, ch. 291, § 2; 1989, ch. 454, §§ 1, 2; 1991, ch. 498, § 5; 1997, ch. 402, §§ 8-12; 2012, ch. 554, §§ 1, 2.

12-2-116. Agreements for private development, construction and operation of facilities — Requirements.

    1. Notwithstanding any other provisions of this part, the commissioner of general services, with the approval of the state building commission and subject to the policies and procedures of the commission, may in order to provide utilization of state-owned lands and facilities in the public interest, enter into agreements for the private development, redevelopment, construction and operation of facilities on lands owned by or under the control of the state.
    2. Such agreements may include provisions for the sale, lease or other conveyance of state-owned real property, subject to the approval of the commissioner and the state building commission. The requirements of § 12-2-112 shall not apply to such conveyances.
  1. Any agreements entered into in accordance with this section shall be entered into only after public advertisement and only after proposals have been requested and evaluated pursuant to the policies and procedures of the state building commission.
  2. Any agreements for the sale of state-owned real property entered into under this section shall contain the provision that the state shall have the first right for repurchase of such previously state-owned real property, including all improvements thereof, under any subsequent offer for sale of such real property. The repurchase amount shall be at no more than fair market value as established by appraisal.

Acts 1990, ch. 734, § 2; 2013, ch. 454, § 36.

Cross-References. Plans for armories, acceptance and use of funds, § 58-1-508.

Attorney General Opinions. T.C.A. § 11-3-112 is not applicable to the proposed transaction, but T.C.A. § 12-2-116 is applicable and provides specific and separate authority for the Tennessee Department of General Services to enter into an agreement for the private redevelopment, construction, and operation of the facilities at Fall Creek Falls State Park.  OAG 17-16, 2017 Tenn. AG LEXIS 16 (3/2/2017).

12-2-117. Sale or lease of department property — Trust fund.

  1. All property owned or held by mental health facilities and controlled by the department of mental health and substance abuse services which is not in use may be sold or leased in accordance with this part. The procedures for selling or leasing such property shall be those required by law and the state building commission for other state owned real property.
    1. Notwithstanding § 12-2-112(a)(7), the proceeds received from the sale or lease of such land shall be deposited in a special trust fund created by subsection (c).
    2. The interest and principal from such trust shall be used as provided in the general appropriations act for the specific purposes of planning and construction of mental health facilities as well as for the transition of patients from an institutional setting into community programs.
    3. Notwithstanding subdivision (b)(2), on June 30, 2013, the commissioner of finance and administration shall transfer from the special trust fund to the general fund an amount of $1,923,100 in order to recognize the fiscal year 2011-2012 transition costs related to the closure of Lakeshore mental health institute, which were funded by an appropriation from the special trust fund in chapter 1029, § 38 of the Public Acts of 2012, and, if the 2013 general appropriations bill provides for such additional transfer, an amount not to exceed $2,700,000, relative to an appropriation in the 2013 general appropriations act from the special trust fund for additional transition costs which may be incurred in fiscal years 2012-2013 and 2013-2014. The commissioner of finance and administration shall determine the amount of the additional transfer in accordance with provisions stated in the 2013 general appropriations act.
    4. If the 2014 or future general appropriations acts provide for funding of additional transition costs related to the closure of Lakeshore mental health institute, then the commissioner of finance and administration is authorized to transfer from the special trust fund to the general fund such additional amounts as may be specified in the general appropriations act.
    5. The general assembly expressly declares that the transition costs addressed in subdivisions (b)(3) and (4) may include, without limitation, severance benefits, terminal leave, other pay and benefits costs, build-out costs, transition to community services costs, and other costs of closure of the institute.
  2. There is hereby created within the general fund a special trust fund earmarked for the sole purpose of providing funds to the department for the purposes set forth in subdivision (b)(2).
  3. The department shall not submit a budget that proposes to use funds derived from the sale or lease of property owned or held by the department to supplant its current level of appropriated funding.
    1. All property owned or held by the state developmental centers as defined in § 33-1-101 and controlled by the department of intellectual and developmental disabilities services that is not in use may be sold or leased in accordance with this part. The procedures for selling or leasing such property shall be those required by law and the state building commission for other state-owned real property.
    2. Notwithstanding § 12-2-112(a), the proceeds received from the sale or lease of such land shall be deposited in a special trust fund created by subdivision (e)(4).
    3. The interest and principal from such trust shall be used as provided in the general appropriations act for the specific purposes of planning and developing intellectual disability programs for persons with intellectual disabilities as defined in § 33-1-101, including, but not limited to, the transition of persons from an institutional setting into community services, start-up funding for individuals and agencies, and the purchase of homes.
    4. There is hereby created within the general fund a special trust fund earmarked for the sole purpose of providing funds to the department of intellectual and developmental disabilities for the purposes set forth in subdivision (e)(3).
    5. The department of intellectual and developmental disabilities shall not submit a budget that proposes to use funds derived from the sale or lease of property owned or held by the department of intellectual and developmental disabilities to supplant its current level of appropriated funding.

Acts 1992, ch. 898, §§ 2-5; 2000, ch. 947, § 6; 2003, ch. 334, § 1; 2009, ch. 477, § 1; 2010, ch. 1100, §§ 21, 22; 2011, ch. 158, § 7; 2012, ch. 575, § 1; 2013, ch. 454, § 5.

Code Commission Notes.

Acts 2010, ch. 734, § 1 provided that the Tennessee code commission is directed to change all references to “mental retardation”, wherever such references appear in titles 33, 39 and 41, to “intellectual disability”, as supplements are issued and volumes are replaced. The terms “intellectual disability” and “intellectual disabilities” were substituted for the term “mental retardation” by the code commission in subdivision (e)(3) to conform to the definition in § 33-1-101.

Compiler's Notes. Acts 1992, ch. 898, § 6 provided that this section does not apply to any land sale initiated prior to July 1, 1992.

Acts 2009, ch. 477, § 1, directed the code commission to change all references from “division of mental retardation services” to “division of intellectual disabilities services” and to include the changes in supplements and replacement volumes for the Tennessee Code Annotated.

Acts 2010, ch. 1100, § 153 provided that the commissioner of mental health and developmental disabilities, the commissioner of mental health, the commissioner of intellectual and developmental disabilities, and the commissioner of finance and administration are authorized to promulgate rules and regulations to effectuate the purposes of the act. All such rules and regulations shall be promulgated in accordance with the provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

12-2-118. Operation of school system or school placed on probation.

Whenever the commissioner of education is authorized by the state board of education to take responsibility for the operation of any local school system or school that has been placed on probation pursuant to title 49, chapter 1, part 6, the commissioner or agents duly appointed by the commissioner to operate such local school system or school shall have all powers authorized by this title and necessary to the operation of such school or local education agency.

Acts 1998, ch. 737, § 3.

12-2-119. Disposition of proceeds from sale and conveyance of surplus real property or improvements managed as state office buildings and support facilities revolving fund property.

Notwithstanding any law to the contrary, proceeds from the sale and conveyance of surplus real property or improvements managed as state office buildings and support facilities revolving fund property shall be deposited in the state office buildings and support facilities revolving fund, created by § 9-4-901, to be used for capital outlay.

Acts 2013, ch. 454, § 9.

12-2-120. Disposition of proceeds from sale and conveyance of surplus real property or improvements used for operation of state prisons.

Notwithstanding any law to the contrary, proceeds from the sale and conveyance of surplus real property or improvements used for operation of state prisons, if not managed as state office buildings and support facilities revolving fund property, shall be deposited in the Sentencing Act of 1985 reserve, created pursuant to § 9-4-210, to be used for purposes authorized by that section.

Acts 2013, ch. 454, § 9.

12-2-121. Disposition of proceeds from the sale and conveyance of surplus real property or improvements used for state armories or other operations of the department of military.

Notwithstanding any law to the contrary, proceeds from the sale and conveyance of surplus real property or improvements used for state armories or other operations of the department of military, if not managed as state office buildings and support facilities revolving fund property, shall be deposited in a reserve for military facilities, which hereby is created in the general fund, to be used for capital outlay for replacement facilities of the department and other capital outlay of the department.

Acts 2013, ch. 454, § 9.

12-2-122. Reserve for forestry facilities created.

Notwithstanding any law to the contrary, proceeds from the sale and conveyance of surplus real property or improvements used for state forestry or other operations of the department of agriculture, if not managed as state office buildings and support facilities revolving fund property, shall be deposited in a reserve for forestry facilities, which hereby is created in the general fund, to be used for capital outlay for replacement facilities of the department and other capital outlay of the department.

Acts 2014, ch. 917, § 4.

12-2-123. Dynamic accessibility symbol. [Effective on July 1, 2020.]

  1. The commissioner of general services shall promulgate rules for the purpose of designating the symbol of access to be used for buildings owned or operated by this state on signage indicating access for persons with disabilities. The commissioner, in promulgating rules, may collaborate and seek input from state agencies for the purpose of carrying out this section.
  2. The symbol must depict a logo with a dynamic character leaning forward with a sense of movement, be readily identifiable, and be simply designed with no secondary meaning. The symbol must signify equivalent facilitation and accessibility as the previously used international symbol of access. The symbol must be depicted in substantially the following form:

    Click to view

  3. The symbol must be accompanied by the adjective “Accessible,” when appropriate for the signage, and must be used to designate every point of access for persons with disabilities for all state buildings, structures, or real property constructed or purchased on or after July 1, 2020. For existing state buildings, structures, and real property, signage indicating access for persons with disabilities must conform to the requirements of this section as the signage is replaced or repaired, or when the area of an existing state building, structure, or real property containing signage is renovated.

Acts 2019, ch. 112, § 2.

Compiler's Notes. 2019, ch. 112, § 1 provided that the act shall be known and may be cited as the “Dynamic Accessibility Act.”

Acts 2019, ch. 112, § 8 provided that a state governmental entity that receives documentation from a federal agency that compliance with a provision of the act may jeopardize federal funding or grant money for the state governmental entity is not required to comply with such provision; provided, that the state governmental entity shall comply with each provision of the act that does not jeopardize such federal funding or grant money.

Effective Dates. Acts 2019, ch. 112, 9. July 1, 2020; provided that for the purposes of promulgating rules and carrying out any administrative duties necessary to effectuate the provisions and intent of this act, the act took effect  April 9, 2019.

Part 2
Sale of Confiscated Motor Vehicles and Intoxicating Liquors

12-2-201. Sale authorized — Sales to governmental entities — Duties of the chief procurement officer.

  1. The chief procurement officer is hereby authorized to dispose of at public sale, or to a governmental entity in accordance with the requirements of § 12-2-407, all motor vehicles and intoxicating beverages which have been seized and confiscated by any duly authorized agent, employee, or representative of certain departments and agencies of this state; to wit, the alcoholic beverage commission, department of safety, and wildlife resources agency, including any such seizure and confiscation made by any sheriff, deputy sheriff or constable of any county, when any such motor vehicle or intoxicating beverage shall have been used, owned or possessed in violation of any of this state, relating to intoxicating liquors, or shall have been used, owned or possessed in violation of any of the laws relating to narcotics and contraband drugs, or when the same shall have been used, owned, or possessed in violation of certain game and fish laws, the intoxicating liquor laws being chapter 49 of the Public Acts of 1939, as amended, and compiled in title 57, chapter 3, parts 1-4, as well as chapter 119 of the Public Acts of 1941, as amended, compiled in title 57, chapter 9, part 2, and chapter 50 of Public Acts of 1919, as amended by § 57-9-115, the narcotic and contraband drug laws being chapter 83 of the Public Acts of 1955, as amended, compiled in §§ 53-11-201, 53-11-203 and 53-11-204, and the game and fish laws being chapter 115 of the Public Acts of 1951, as amended, compiled in § 70-6-202.
    1. Notwithstanding any provision of the law or this chapter to the contrary, in the sale of motor vehicles to governmental entities in accordance with § 12-2-407, it is the duty of the chief procurement officer to:
      1. Determine the place of storage and the location of the sale of such motor vehicles;
      2. Determine, in lieu of § 12-2-205, the fair market value of such vehicles to be sold;
      3. Set the percentage of the sale price to be retained by the procurement office to defray the costs of administering the sale and such percentage may exceed the amount provided in § 12-2-207(a);
        1. Enter notice of the intended disposal by public sale in at least one (1) newspaper of general circulation in the county or counties in which the disposal is to be made;
        2. Include in such advertisement the manner in which interested parties can obtain information regarding the make, model, condition and options which may be on a vehicle; and
        3. Post printed public notices in at least two (2) public places in the county in which the vehicle was seized and confiscated, with one (1) of the public places to be the courthouse; and
      4. Promulgate rules and regulations for the implementation of this section.
    2. For such sales, § 12-2-202(b) does not apply. Notwithstanding any law or § 12-2-208 to the contrary, any state, city or county officer, employee or such person's agent may buy or offer to buy motor vehicles when such purchase is in the name of and for the use of a governmental entity.

Acts 1959, ch. 303, § 1; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1963, ch. 257, §§ 11-32, 34-49; impl. am. Acts 1963, ch. 258, §§ 2, 3; impl. am. Acts 1963, ch. 259, § 2; impl. am. Acts 1972, ch. 543, § 7; impl. am. Acts 1974, ch. 481, §§ 4, 6; T.C.A., § 12-219; Acts 1991, ch. 460, § 1; 2011, ch. 295, § 9(a), (b).

Attorney General Opinions. Purchase of confiscated items by law enforcement officers or city or county employees, OAG 99-105, 1999 Tenn. AG LEXIS 105 (5/10/99).

12-2-202. Public sale and advertisement.

  1. Whenever any of such property as motor vehicles and intoxicating beverages has finally been forfeited to the state, or turned over to the state for sale and disposal, without further proceedings, and no court or other competent authority has ordered the property to be returned to the claimant, the chief procurement officer is hereby directed and authorized to proceed to sell the property at public sale for cash in conformity with this part.
  2. In connection with the sale of such property, the chief procurement officer shall fully advertise the property to be sold in the manner provided in the following sections.
  3. Notwithstanding any law to the contrary, including, but not limited to, provisions related to the manner of advertisement, the chief procurement officer is authorized to dispose of, by advertising on the internet and selling by internet auction, confiscated intoxicating beverages, confiscated motor vehicles and any other lawfully confiscated property.

Acts 1959, ch. 303, § 2; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., § 12-220; Acts 2008, ch. 882, § 1; 2011, ch. 295, § 9(a), (c).

12-2-203. Manner of advertisement and sale of confiscated motor vehicles — Storage prior to sale.

  1. Notice of intended disposal by public sale shall be entered by the chief procurement officer in at least one (1) newspaper of general circulation in the county or counties in which disposal is to be made. The advertisement shall contain the manner in which interested parties can obtain information regarding the make, model, condition, and options which may be on the vehicle. Printed public notes shall be posted in at least two (2) public places in the county in which the vehicle was seized and confiscated, and one (1) of the public places shall be the courthouse. The advertisement shall give the date, time and place of the sale, and shall also contain information as to where the vehicle may be inspected prior to such sale. The day of the sale shall be held not less than seven (7) days nor more than fifteen (15) days from the day of the notice in the newspaper, excluding Saturdays, Sundays and holidays. The sale shall be for cash and bids may be submitted in writing to the chief procurement officer at Nashville.
  2. Whenever any motor vehicle has been seized and confiscated and is to be disposed of under this part, the chief procurement officer shall determine the place of storage and location of sale. The chief procurement officer is hereby authorized in the chief procurement officer’s discretion to appoint or designate some suitable person to hold or conduct the sale as authorized hereunder. The chief procurement officer or such person designated to hold the sale is hereby authorized to reject any and all bids which might be received when, in the chief procurement officer’s opinion, the bid received is not commensurate with the fair market value of the vehicle offered for sale, and, in such instances, the vehicle shall be readvertised for sale.
  3. The property shall also be circularized to such persons, firms, and car dealers, who have indicated a desire to be notified when any motor vehicles are to be offered for sale.

Acts 1959, ch. 303, § 2; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., § 12-221; Acts 1992, ch. 713, §§ 1, 2; 2011, ch. 295, § 9(a), (d).

12-2-204. Manner of advertisement and sale of confiscated intoxicating beverages.

  1. In connection with the advertisement concerning the sale of intoxicating beverages, the advertisement shall contain the manner in which interested parties can obtain information regarding the description of the beverages to be sold, the number of bottles, the size of bottles, and the brand name or names. The advertisement shall likewise contain the time and place of the sale and such a sale for intoxicating beverages shall only be held in a wet county.
  2. The advertisement shall be for a period of not less than ten (10) days, excluding Saturdays, Sundays and holidays, by printed public notices posted in at least two (2) public places in the county where the beverages are to be sold and one (1) of the places shall include the courthouse. In addition thereto, a copy of the notice of sale shall be circularized and mailed to at least twenty-five percent (25%) of the licensed retail liquor dealers in the city and county in which the sale is to be held. All persons submitting a bid for the intoxicating beverages shall be licensed to sell such intoxicating beverages in this state, and all bids received shall be in writing and the terms of the sale shall be cash.

Acts 1959, ch. 303, § 2; T.C.A., § 12-222; Acts 1992, ch. 713, § 3.

12-2-205. Determination of fair market value prior to sale.

Prior to the sale of any such property as herein authorized, the  chief procurement officer shall determine the fair market value of the property to be sold.

Acts 1959, ch. 303, § 2; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., § 12-223; Acts 1992, ch. 713, § 4; 2011, ch. 295, § 9(a).

12-2-206. Rejection of bids — Readvertisement.

Any and all bids received by the chief procurement officer for any of the property to be sold hereunder may be rejected by the chief procurement officer, and the property may be readvertised for sale when, in the opinion of the chief procurement officer, no bid had been received commensurate with the fair market value of the property offered for sale.

Acts 1959, ch. 303, § 2; impl. am. Acts 1961, ch. 97, § 5; T.C.A., § 12-224; Acts 2011, ch. 295, § 9(e).

12-2-207. Retention of administration costs — Disposition of remaining proceeds.

  1. The state shall retain a fee for all property sold hereunder to defray the costs of administering this part. The amount of the fee shall be determined in the same manner as is authorized for the sale of state surplus property under § 12-2-411. The remainder of the proceeds shall be paid over to the respective departments and agencies of the state in accordance with the particular law under which the property was seized and confiscated.
  2. When any intoxicating liquor has been seized and confiscated by a law enforcement officer of any county or municipality, the state shall retain a fee for administrative expenses. The amount of the fee shall be determined in the same manner as is authorized for the sale of state surplus property under § 12-2-411. The balance of the proceeds of the sale shall be paid over to the particular county or municipality served or represented by the arresting officer or officers making such seizure and confiscation, as now authorized under § 57-9-115.

Acts 1959, ch. 303, § 2; T.C.A., § 12-225; Acts 1992, ch. 713, §§ 5, 6.

12-2-208. Purchase by officer unlawful — Penalty for violation.

    1. Except as provided in subsection (b), it is hereby declared unlawful for any state, city or county officer, employee or such officer's or employee's agent to buy or offer to buy any of the property to be sold hereunder except by bid at public auction during the tenure of such person's office or employment, or for six (6) months thereafter.
    2. Any such person violating or attempting to violate this subsection (a) or subsection (b) shall be dismissed and discharged from such person's respective job or position, and shall forfeit any pay or compensation which might be due such person. In addition thereto, any such sale is hereby expressly declared null and void, and such person shall, in addition, forfeit all right and title in the property.
    3. A violation of this section is a Class C misdemeanor.
  1. Notwithstanding subdivision (a)(1), it is declared unlawful for any state, city or county officer, employee or such officer's or employee's agent directly or indirectly involved in the confiscation of such property to buy or offer to buy any of the property to be sold hereunder. It is further declared unlawful for officers and employees designated by the procurement office, in accordance with applicable regulations of the procurement commission, to buy or offer to buy any of the property to be sold hereunder.

Acts 1959, ch. 303, § 3; T.C.A., § 12-226; Acts 1989, ch. 591, § 113; 1998, ch. 1043, § 1; 2011, ch. 295, § 9(f).

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

Attorney General Opinions. Purchase of confiscated items by law enforcement officers or city or county employees, OAG 99-105, 1999 Tenn. AG LEXIS 105 (5/10/99).

12-2-209. Application of law.

This part is applicable to all motor vehicles seized and confiscated in any county or municipality in this state when the same has been used to store or transport intoxicating beverages in violation of the liquor laws of the state, and this part likewise applies to the seizure and confiscation of intoxicating beverages owned or possessed in violation of the liquor laws of the state, whether the beverages are stamped or unstamped, and this part applies to both wet and dry counties.

Acts 1959, ch. 303, § 4; T.C.A., § 12-227.

Part 3
Sales and Leases by Municipalities to and from Not-for-Profit Corporations

12-2-301. Part definitions.

As used in this part, unless the context otherwise clearly requires:

  1. “Governing body” includes all bodies and boards, by whatsoever names they may be known, charged with the governing of a municipality;
  2. “Municipality” includes any county, city or town of the state;
  3. “Not-for-profit corporation” means a general welfare corporation organized under § 48-1101(15) [repealed] as it existed prior to July 1, 1969, or a corporation, not-for-profit, organized under title 48 for the acquisition, construction, equipment and furnishing of buildings, structures, facilities and permanent improvements of all descriptions for lease, subdivision or conveyance to counties, cities and towns of the state; and
  4. “Project” means and includes any building, structure, facility or permanent improvement, including the necessary equipment and furnishings therefor, which a municipality proceeding under this part is authorized to own, use or operate under any other provision of law.

Acts 1965, ch. 328, § 1; impl. am. Acts 1968, ch. 523, § 1 (17.06); T.C.A., § 12-229.

Compiler's Notes. Subdivision (15) of § 48-1101, as it existed prior to its repeal by Acts 1968, ch. 523, § 1 (17.02), read:

“(15)  The acquisition, construction, equipment and furnishing of buildings, structures, facilities and permanent improvements of all descriptions for lease, subdivision or conveyance to counties, cities and towns of the state. Any corporation organized for the purposes of this subdivision (15) is hereby declared to be performing a public function in behalf of the county, city or town with respect to which it is providing buildings, structures, facilities or permanent improvements and to be a public instrumentality for such purposes. Accordingly, the corporation and all properties and any interest therein at any time owned by it and leased or conveyed to a county, city or town and the income therefrom and all bonds or other obligations issued by it and the income therefrom shall be exempt from all taxation in the state except those taxes imposed by title 67, ch. 30 of this Code. Also, for purposes of the Securities Law of 1955, compiled as § 48-1601 et seq., and any amendment thereto or in subject petition therefor, bonds and other obligations issued by such a corporation shall be deemed to be securities issued by a public instrumentality of the state.”

The not-for-profit corporation provisions in title 48, ch. 1, parts 1-14 were repealed as of January 1, 1988. As of that date, title 48, chs. 51-68 contain the provisions relating to not-for-profit corporations.

Attorney General Opinions. Pledge of city appropriations to nonprofit organization, OAG 99-225, 1999 Tenn. AG LEXIS 231 (12/3/99).

12-2-302. Powers and duties of municipality.

In order to provide projects for a municipality and to enable the construction and financing thereof on lands owned by the municipality or by a not-for-profit corporation, but for no other purpose unless authorized by law, a municipality has the following powers and duties:

  1. Without limitation by reason of any other provisions of law, the power to sell and convey title to a not-for-profit corporation any land and any existing building thereon owned by the municipality for such consideration and upon such terms and conditions as in the judgment of the governing body are in the interests of the municipality;
  2. Without limitation by reason of any other provisions of law, the power to lease to a not-for-profit corporation for a term or terms, not exceeding fifty (50) years each, any land and existing buildings thereon owned by the municipality upon such terms and conditions as in the judgment of the governing body are in the interests of the municipality;
  3. The power to lease or sublease from a not-for-profit corporation and to make available for public use any project erected upon land conveyed or leased to a not-for-profit corporation or upon any of the land owned by a not-for-profit corporation upon such terms, conditions and rentals as in the judgment of the governing body are in the interests of the municipality;
  4. The power to pledge and assign all or any part of the revenues derived from the operation of a project as security for the payment of rentals due and to become due under any lease or sublease under subdivision (3);
  5. The power to covenant and agree in any lease or sublease made under subdivision (3) to impose fees, rentals or other charges for the use and occupancy or other operation of such project in an amount calculated to produce net revenues sufficient to pay the rentals due and to become due under such lease or sublease; and
  6. The power and duty, upon receipt of notice of any assignment by any such not-for-profit corporation of any lease or sublease made under subdivision (3), or of any of its rights under any such lease or sublease, to recognize and give effect to such assignment, and to pay to the assignee thereof rentals and other payments then due or which may become due under any such lease or sublease which has been so assigned by such not-for-profit corporation.

Acts 1965, ch. 328, § 2; impl. am. Acts 1968, ch. 523, § 1 (17.06); T.C.A. (orig. ed.), § 12-230.

12-2-303. Municipality's liability under lease — Actions by not-for-profit corporations as lessors.

The municipality shall be liable for accrued rentals and for any other default under any lease or sublease made under § 12-2-302(3), and may be sued therefor on contract as in other contract actions, except that it shall not be necessary for the not-for-profit corporation, as lessor, under any such lease or sublease or any assignee of such lessor or any person or legal entity proceeding on behalf of such lessor to file any claim or take any other action or proceeding prior to the commencement of any such action.

Acts 1965, ch. 328, § 3; impl. am. Acts 1968, ch. 523, § 1 (17.06); T.C.A., § 12-231.

12-2-304. Municipality's obligations not within debt limitations.

The obligations assumed and undertaken by a municipality pursuant to a lease or sublease made under § 12-2-302(3), including any unconditional or other obligation to pay rentals for a fixed term or terms, shall not be deemed or construed as constituting a debt of the municipality within the terms, provisions or limitations of any constitutional, statutory, charter or other limitations.

Acts 1965, ch. 328, § 4; T.C.A., § 12-232.

12-2-305. Provision in lease to convey title upon retirement of obligations.

Every lease and sublease made by a municipality with a not-for-profit corporation under § 12-2-302(3) shall include a provision requiring such not-for-profit corporation to transfer and convey all of its right, title and interest in and to the project covered thereby immediately upon the payment and retirement of all bonds and other obligations issued by such not-for-profit corporation for the purpose of financing the cost of such project.

Acts 1965, ch. 328, § 5; impl. am. Acts 1968, ch. 523, § 1 (17.06); T.C.A., § 12-233.

12-2-306. Powers conferred supplementary to other powers — Limitations do not restrict powers granted by other laws.

The powers conferred by this part shall be in addition and supplementary to and the limitations by such sections shall not affect the powers conferred by any other general, special or local law. Projects may be undertaken under this part, notwithstanding that any other general, special or local law may provide for the acquisition, construction or lease of projects by municipalities, and without regard to the requirements, restrictions, limitations or other provisions contained in any other general, special or local law.

Acts 1965, ch. 328, § 6; T.C.A., § 12-234.

Part 4
State Surplus Personal Property Act of 1976

12-2-401. Short title.

This part shall be known and may be cited as the “State Surplus Personal Property Act of 1976.”

Acts 1976, ch. 821, § 1; T.C.A., § 12-235.

12-2-402. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Commission” means the procurement commission;
  2. “Commissioner” means the commissioner of general services;
  3. “Personal property” or “property” means every species of state property which is not either:
    1. Real property, the disposal of which is subject to this title, governing the disposal of state real property; or
    2. Intangible personal property as defined in § 67-5-501, relative to the assessment of intangible personal property for tax purposes; and
  4. “Surplus” or “surplus property” means that personal property which has been determined to be obsolete, outmoded, or no longer usable by the state and declared as such, by the commissioner or head of the releasing department or agency, in accordance with this part.

Acts 1976, ch. 821, § 2; T.C.A., § 12-236; Acts 2011, ch. 295, §§ 9(a), 19; 2012, ch. 626, § 4.

12-2-403. Methods of disposal.

  1. No article or personal property may be disposed of as surplus except by one (1) of the following methods:
    1. Public auction, publicly advertised and held;
    2. Sale under sealed bids, publicly advertised, opened and recorded;
    3. Sale by internet auction;
    4. Negotiated contract for sale, at arms length; but only in those instances in which the availability of the property is recurring or repetitive in character, such as marketable waste products, for disposal of the property as it is generated in the most economically feasible, fiscally sound, and administratively practicable method for the state to utilize;
    5. Trade-in, where such is permitted due to the nature of the property or equipment and under the terms and conditions of the contract by which the state replaces the property, and subject, further, to this part and the regulations of the procurement commission promulgated to govern the disposal of property by trade-in; and
    6. Sale under rules and regulations as provided in subsection (d).
  2. The procurement commission may promulgate special regulations for the disposal of surplus personal property, such as firearms, ammunition, and other explosives, which, by their character and utility, must be disposed of in a method consistent with prevailing federal law.
    1. Political subdivisions of the state, governmental entities and corporations organized and conducted not-for-profit which have been approved as authorized donees under the federal surplus property program and not-for-profit federally financed rural electric cooperatives, as defined in title 65, chapter 25, may purchase personal property declared surplus and classified by the commissioner for disposal pursuant to § 12-2-407.
    2. A member of the general public may purchase a bloodhound declared surplus and classified by the commissioner for disposal pursuant to the procedures established in § 12-2-407 for sales to governmental entities.
    3. A member of the general assembly may purchase office furniture, equipment, or other personal property for use in the home district legislative office of such member if such furniture, equipment or property has been declared surplus and classified by the commissioner for disposal pursuant to procedures established in § 12-2-407 for sales to governmental entities.
  3. The commissioner, with the approval of the procurement commission, may promulgate special rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to permit sales to nonprofit volunteer fire, police, and rescue organizations operated for a public purpose. Such regulations shall provide for sale of surplus property to such organizations on the basis of fair market value of such property as determined by the commissioner. Such regulations shall establish eligibility requirements for organizations to purchase surplus property under this subsection (d). Determinations of eligibility shall be made in accordance with rules and regulations promulgated under this section by the commissioner and all decisions of the commissioner shall be final. Such sales shall be subject to the restrictions contained in § 12-2-407.
  4. The commissioner of finance and administration, with the approval of the governor and the attorney general and reporter, may approve the transfer of surplus personal property to a selected local government, with or without financial consideration, when associated real property is being transferred to that local government under provisions of this chapter; provided, that the authorizing officials named in this subsection (e) first must determine that such transfer of personal property ownership is in the interest of the state.
  5. The commissioner of general services, with the approval of the governor and the procurement commission, may approve the transfer of surplus personal property to local government, with or without financial consideration; provided, that such property was initially acquired from the federal government for civil defense purposes; provided further, that the authorizing officials named in this subsection (f) first determine that such transfer of personal property ownership is in the interest of the state.
    1. For purposes of this subsection (g), “computer equipment” includes personal computers, printers, CD-ROM readers, monitors, keyboards, CPU's, scanners, and all accessories and other peripheral equipment used in a data processing operation.
    2. The commissioner of general services, in consultation with the information systems council, with the approval of the governor and the commissioner of education, is authorized to transfer surplus computer equipment to local education agencies, without financial consideration; provided, that such property is suitable for educational purposes for the public schools as determined by the commissioner of education; and provided further, that the authorizing officials named in this subsection (g) first determine that the transfer of such personal property ownership is in the best interest of the state.
    3. Prior to the disposition of surplus computer equipment, a determination shall be made as to whether requests have been made by a local education agency for computer equipment. If suitable computer equipment is available which meets the needs of requests on file by local education agencies, such property shall be transferred, without financial consideration, to such local education agencies. If, however, available surplus computer equipment is not suitable for educational purposes or if no requests are on file by local education agencies for equipment which meets the needs of such requests, then the surplus computer equipment shall be disposed of as otherwise provided in this section.
    4. The procurement commission shall adopt rules and regulations on the procedure for the disposal of such computer equipment as provided in this subsection (g) and, in consultation with the commissioner of education, on the procedures for a local education agency to apply for and be considered for receiving such property.
    5. The department or agency which declares the computer equipment surplus may be charged a fee to cover the cost of disposing of such equipment. The amount of the fee shall be determined by the procurement commission.
    6. Notwithstanding any other law to the contrary, any surplus computer equipment held by the department of human services and not deemed to meet the needs of requests on file by local education agencies shall be transferred by the department of human services without financial consideration to community agencies that serve low income individuals.

Acts 1976, ch. 821, § 3; 1978, ch. 625, § 1; 1978, ch. 797, § 1; T.C.A., § 12-237; Acts 1981, ch. 181, § 1; 1981, ch. 319, § 1; 1982, ch. 845, § 1; 1993, ch. 299, § 1; 1997, ch. 52, § 1; 1997, ch. 359, § 1; 1997, ch. 474, § 1; 1998, ch. 853, § 1; 2001, ch. 90, § 1; 2007, ch. 411, § 1; 2011, ch. 295, §§ 9(a), 19; 2012, ch. 626, § 3.

Cross-References. Sale of timber as surplus personal property, § 12-2-112.

12-2-404. Declaration of property as surplus.

Each article of personal property to be disposed of as surplus property under this part shall be declared surplus by the commissioner or head of the releasing department or agency in accordance with this part and the regulations of the procurement commission. The commissioner shall approve or disapprove any such declarations pursuant to regulations of the procurement commission.

Acts 1976, ch. 821, § 4; T.C.A., § 12-238; Acts 2011, ch. 295, §§ 9(a), 19; 2012, ch. 626, § 4.

12-2-405. Determination of method of disposal.

  1. If the commissioner approves the declaration of property as surplus, the commissioner shall assign the property designated as surplus to one (1) of the four (4) methods of disposal set forth in this part, in accordance with regulations of the procurement commission. Such assignment and classification shall be duly recorded in writing with appropriate supporting documentation.
  2. In classifying surplus property for disposal, the following criteria shall be considered:
    1. The character, utility and functionality of the property;
    2. The economies of disposal in light of all relevant circumstances attendant the proposed disposal, including the condition and climate of the potential market and present estimated market value of the property, transportation costs, and other cost factors associated with disposal; and
    3. Sound fiscal and budgetary policy and practices.

Acts 1976, ch. 821, § 5; T.C.A., § 12-239; Acts 2011, ch. 295, §§ 9(a), 19; 2012, ch. 626, § 4.

12-2-406. Advertisement and notice.

  1. Public auctions and sales under sealed bid, as provided in this part, shall be publicly advertised and publicly held. Notice of intended disposal by public auction or sale under sealed bid shall be entered by the commissioner in at least one (1) newspaper of general circulation in the county or counties in which the disposal is to be made. Such notice shall specify and reasonably describe the property to be disposed of, the date, time, place, manner, and conditions of disposal, all as previously determined by the commissioner in accordance with regulations of the procurement commission. The advertisement shall be entered in the public notice or equivalent section of the newspaper and shall be run not less than one (1) day. Disposal shall be made not sooner than seven (7) days after the last day of publication nor later than fifteen (15) days after the last day of publication of the required notice, excluding Saturdays, Sundays and holidays. Prominent notice shall also be conspicuously posted for ten (10) days prior to the date of disposal, excluding Saturdays, Sundays, and holidays, in at least two (2) public places in the county or counties where the disposal is to be made. Furthermore, notice shall be sent to the county clerk of each county of the state, and such notice shall be posted in each county courthouse unless otherwise directed by the procurement commission.
  2. Notice of intended disposal by internet auction shall be posted on the internet. Such notice shall specify and reasonably describe the property to be disposed of, the date, time, manner and conditions of disposal, all as previously determined by the commissioner in accordance with regulations of the procurement commission.
  3. Except as the procurement commission may promulgate rules to govern other notification to persons, firms and corporations of public auctions and sales, no person, firm or corporation shall be notified of any public auction or sale except as provided by this part.
  4. The commissioner may promulgate special provisions regarding notice and manner of disposal of firearms, ammunition and other explosives as provided in this part and with respect to the trade-in of surplus property as provided in this part, such regulations to be subject to the approval of the procurement commission.

Acts 1976, ch. 821, § 6; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A., § 12-240; Acts 1981, ch. 332, § 28; 2001, ch. 90, § 2; 2011, ch. 295, §§ 9(a), 19; 2012, ch. 626, § 4.

12-2-407. Sale of surplus property to governmental entities and not-for-profit corporations.

  1. The procurement commission shall promulgate regulations governing the transfer of surplus property to such governmental entities and corporations organized and conducted not-for-profit which have been approved as authorized donees under the federal surplus property program. Such regulations shall include, but not be limited to, prices to be set on items of surplus property, restrictions on the resale and the reversion to the state of any profit realized from any such resale. A not-for-profit corporation must first be listed as an authorized donee under the federal surplus property program administered by the department of general services. As the commissioner approves the declaration of property as surplus and assigns it for disposal, the commissioner shall set the price based on the fair market value for each item pursuant to the regulations of the procurement commission. Governmental entities and authorized donees may purchase such items at the price set by the commissioner at such times, as specified by regulations of the procurement commission, prior to the date of disposal by another method. For all surplus property, governmental entities and authorized donees shall retain possession of such property for one (1) year unless disposal is approved by the procurement commission. Transfers of surplus property shall be made at locations designated by the commissioner. Any transfer of motor vehicles, subject to the registration laws of this state, to a governmental entity or authorized donee, shall become null and void, and such property shall revert to the state if such governmental entity or authorized donee does not transfer the registration of title to such motor vehicle to its name within seven (7) days after the sale.
    1. Notwithstanding any other provisions of law to the contrary, a designated nonprofit contractor or contractors of the department of human services have the first priority to purchase suitable and serviceable passenger motor vehicles which are declared to be surplus pursuant to this part for use by programs which have been or may be established by the department in which persons who are recipients of assistance in the families first program operated pursuant to title 71, chapter 3, part 1, or any successor program, or persons who are transitioning from those programs, are provided the opportunity to purchase such passenger motor vehicles as part of the person's efforts to obtain or maintain employment.
    2. The designated nonprofit contractors designated by the department have first priority to purchase up to fifty percent (50%) of the available estimated yearly supply of the passenger motor vehicles declared as surplus pursuant to this part in fiscal year 2001, and up to twenty-five percent (25%) in each fiscal year thereafter at a price not to exceed the loan value of such vehicles. The price of such vehicles subject to this subsection (b) shall take into consideration the mileage and condition of the vehicle at the time it is offered for purchase.
    3. Upon payment of the purchase price to the department of general services for the passenger motor vehicle, the nonprofit contractor designated by the department of human services shall receive possession of and title to the vehicle from the department of general services for use of the passenger motor vehicle in accordance with the department of human services' assistance program, or any successor program, under subdivision (b)(1) and in accordance with the contract between the nonprofit contractor and the department of human services.

Acts 1976, ch. 821, § 7; 1978, ch. 797, § 2; T.C.A., § 12-241; Acts 1981, ch. 319, § 2; 1982, ch. 845, §§ 2, 3; 1998, ch. 853, § 2; 2000, ch. 875, § 1; 2011, ch. 295, § 9(a), (g), (h); 2012, ch. 626, §§ 4, 5.

12-2-408. Payment — Transfer of possession.

  1. Acceptable payment for property purchased under any method prescribed by this part shall be prescribed by the procurement commission in its rules and regulations.
  2. Possession of property shall not pass until the occurrence of such conditions as the procurement commission may prescribe by rules or regulations; provided, that where payment is tendered by check or bank draft, transfer of possession shall be withheld until the check or draft has been honored by the drawee bank. Possession shall pass to political subdivisions of the state and other governmental entities upon receipt, by the state, of purchase vouchers of such political subdivisions and other governmental entities. Titles to motor vehicles sold as surplus property to political subdivisions and other governmental entities shall be closed as to the transferee when the title is passed.
  3. Notwithstanding any other provision of the law, rule or regulation promulgated pursuant thereto, possession of property sold to any eligible corporation organized and conducted not-for-profit, whose chartered activities are related to health and/or education in accordance with the Official Compilation, Rules and Regulations of the State of Tennessee, rule 0690-2-1-.14 as promulgated by the procurement commission, shall not pass until payment is made to the state by an authorized signature on an authorized purchase order or check from such institution or by cash, cashier's check or certified check.
  4. Notwithstanding any provision of this part to the contrary, acceptable payment for property purchased under any method prescribed by this part shall include payment by credit card.

Acts 1976, ch. 821, § 8; T.C.A., § 12-242; Acts 1983, ch. 244, § 1; 2011, ch. 295, §§  9(a), (i), 19; 2012, ch. 626, § 6.

12-2-409. Disposal — Exempt personal property.

  1. Disposal of surplus personal property which is determined to not be salvageable or usable, in accordance with regulations of the procurement commission, and disposal of surplus property in the collection of the Tennessee state museum, are exempt from this part; provided, that such disposals are made in accordance with regulations of the procurement commission.
    1. Disposal of surplus personal property in the possession of the general assembly is exempt from this part; provided, that such disposals are made in a commercially reasonable manner pursuant to the policies and guidelines developed by the joint legislative services committee, created by § 3-10-101, and approved by both speakers.
    2. A member of the general assembly may purchase office furniture, equipment, or other personal property for use in the home district legislative office of such member if such furniture, equipment or property has been declared surplus and classified for disposal pursuant to the policies and guidelines developed and approved pursuant to subdivision (b)(1).
      1. Except as permitted by subdivision (b)(2), it is hereby declared unlawful for any state official or employee to purchase from the general assembly except by bid at public auction or by internet auction, using a personal computer on personal time, any surplus property during the tenure of such person's office or employment, or for six (6) months thereafter.
      2. A purchaser who violates this subdivision (b)(3) commits a Class A misdemeanor.

Acts 1976, ch. 821, § 9; T.C.A., § 12-243; Acts 1981, ch. 277, § 1; 2011, ch. 295, §§ 9(a), 19; 2012, ch. 626, § 7.

Cross-References. Penalty for a Class A misdemeanor, § 40-35-111.

12-2-410. Disposals — Procedures.

All disposals of surplus state personal property shall be conducted by the department of general services, in accordance with this part and applicable regulations of the procurement commission. The procurement commission may, however, in its discretion, designate the department having jurisdiction over the producing facility as the agent for disposal in the case of surplus agricultural products or livestock; provided, that such disposal is made in accordance with the other provisions of this part and the applicable regulations of the procurement commission.

Acts 1976, ch. 821, § 10; T.C.A., § 12-244; Acts 2011, ch. 295, §§ 9(a), (j), 19; 2012, ch. 626, § 5.

12-2-411. Disposition of proceeds.

The proceeds from the disposal of property under this part shall be remitted to the department releasing such property. The commissioner shall charge the releasing department a reasonable fee to cover the cost of disposition of the property, except where the releasing department is authorized pursuant to § 12-2-410 to serve as the agent for disposal. The method of determining such fee shall be governed by regulations of the procurement commission.

Acts 1976, ch. 821, § 11; T.C.A., § 12-245; Acts 2011, ch. 295, §§ 9(a), 19.

12-2-412. Violations — Penalties.

  1. It is hereby declared unlawful for any state official or employee to purchase from the state except by bid at public auction or by internet auction, using a personal computer on personal time, any surplus property during the tenure of such person's office or employment, or for six (6) months thereafter.
  2. A purchaser who violates this section commits a Class A misdemeanor.

Acts 1976, ch. 821, § 12; T.C.A., § 12-246; Acts 1989, ch. 591, §§ 1, 6; 2004, ch. 554, § 1.

Cross-References. Penalty for Class A misdemeanor, § 40-35-111.

State surplus property disposition regulations, violations, penalties, §§ 12-2-416, 12-2-417.

12-2-413. Disposals pursuant to statute valid.

Bids, negotiations, purchases, trade-ins, and other procedures for disposal of surplus personal property authorized by statute and regulation shall not be construed as in violation of any law prohibiting arrangements, contracts, agreements, trusts, or combinations which lessen full and free competition in the disposal of state surplus personal property or which tend to control the price of such property.

Acts 1976, ch. 821, § 13; T.C.A., § 12-247.

12-2-414. Rules and regulations.

The promulgation of rules and regulations pursuant to this part shall be in conformity with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Acts 1976, ch. 821, § 14; T.C.A., § 12-248.

12-2-415. State surplus property disposition regulation.

All arrangements, contracts, agreements, trusts, or combinations between persons or corporations made with a view to lessen, or which tend to lessen, full and free competition in the disposal of state surplus personal property, under this part, and all arrangements, contracts, agreements, trusts or combinations between persons or corporations designed to, or which tend to, control the price, which the state receives for such property, or the cost to the purchaser of such property, are declared to be against public policy, unlawful, and void.

Acts 1976, ch. 799, § 1; T.C.A., § 12-249.

12-2-416. Violation of § 12-2-415.

A violation of § 12-2-415 is a Class E felony.

Acts 1976, ch. 799, § 2; T.C.A., § 12-250; Acts 1989, ch. 591, § 23.

Cross-References. Penalty for Class E felony, § 40-35-111.

State surplus personal property sales, violations, penalties, § 12-2-412.

12-2-417. State employee violation — Punishment.

A state employee who violates § 12-2-415 shall be punished by removal from employment in the state service and shall be prohibited from such employment for a period of five (5) years, in addition to the penalties provided in § 12-2-416.

Acts 1976, ch. 799, § 3; T.C.A., § 12-251.

Cross-References. State surplus personal property sales, violations, penalties, § 12-2-412.

12-2-418. [Repealed.]

Acts 2009, ch. 244, § 1; repealed by Acts 2013, ch. 118, § 1, effective April 12, 2013.

Compiler's Note. Former § 12-2-418 (Acts 2009, ch. 244, § 1) concerned mining or recovery of lead found on state property as the result of discharging a firearm.

Former § 12-2-418 (Acts 1989, ch. 328, § 1; 1992, ch. 988, § 5), concerning legislative office furniture, was repealed by Acts 1993, ch. 167, § 1, effective April 13, 1993.

12-2-419. Resale of surplus property — Disposition of proceeds.

  1. Notwithstanding any provision of law, rule or regulation to the contrary, any profit realized from the resale of surplus property transferred to vocational programs operated under title 49, chapter 11, or state technical institutes operated by the state board of regents when such entity or corporation has repaired the item through its vocational program for the purpose of resale shall not revert to the state but may be retained by such entity or corporation. Notwithstanding any provision of the law to the contrary, such surplus property may be resold at any time after it has been repaired without prior approval of the procurement commission.
  2. The resale of such surplus property shall be made only after public advertisement of the sale in a newspaper of general circulation in the county or municipality in which the sale will take place at least twice in a two-week period preceding the sale.

Acts 1991, ch. 364, § 1; 1994, ch. 709, § 1; 2011, ch. 295, §§ 9(a), 19.

12-2-420. Transfers of surplus personal property among governmental entities.

  1. Notwithstanding any other provisions of law, counties, municipalities and metropolitan governments may purchase, trade or receive as a gift, upon approval of the governing bodies involved in the transaction, any used or surplus personal property from another county, municipality, metropolitan government, state government, federal government or any instrumentality of the foregoing, without regard to any laws regarding public advertisement and competitive bidding. Also notwithstanding any other provision of law, any county, municipality, or metropolitan government may by resolution or ordinance of its governing body establish a procedure for the disposition of its surplus personal property to other governmental entities, including, but not limited to, counties, municipalities, metropolitan governments, the state of Tennessee, the federal government, other states or their political subdivisions and the instrumentalities of any of the foregoing, by sale, gift, trade, or barter upon such terms as the governing body may authorize, without regard to any other provisions of law regarding the sale or disposition of used or surplus personal property.
  2. This section shall be construed as supplemental authority for counties, municipalities and metropolitan governments.

Acts 1989, ch. 305, § 1; T.C.A. § 12-3-1005.

12-2-421. Purchases of property at public auctions — Reporting.

  1. Notwithstanding the requirements of its charter, or any other law, any municipality or county may purchase at any publicly advertised auction new or secondhand articles or equipment or other materials, supplies, commodities and equipment without public advertisement and competitive bidding. The governing body shall establish written procedures governing purchases at publicly advertised auctions.
  2. If a municipality or county purchases any materials, supplies, commodities or equipment at a publicly advertised auction pursuant to subsection (a), then the purchasing official shall report the following information to the governing body of the municipality or county making such purchase:
    1. A description of the materials, supplies, commodities or equipment that was purchased;
    2. The auction where such items were purchased;
    3. The purchase price of such items; and
    4. The vendor of such materials, supplies, commodities or equipment.

Acts 1994, ch. 795, §§ 1, 2; T.C.A. § 12-3-1006.

Part 5
Sale of Surplus Public Property

12-2-501. Disposal of real or personal property by private negotiation and sale.

Notwithstanding any rule, regulation or other law to the contrary, any county, metropolitan government, municipality or other political subdivision of this state, upon majority vote of the local legislative body, may dispose of real property or personal property by private negotiation and sale where:

  1. The real or personal property is significant for its architectural, archaeological, artistic, cultural or historical associations, or significant for its relationship to other property significant for architectural, archaeological, artistic, cultural or historical associations, or significant for its natural, scenic or open condition;
  2. The real or personal property is to be sold to a nonprofit corporation or trust whose purposes include the preservation or conservation of real or personal properties of architectural, archaeological, artistic, cultural, historical, natural or scenic significance; and
  3. A preservation agreement or conservation agreement is placed in the deed conveying the property from the county, metropolitan government, municipality or other political subdivision of this state to the nonprofit corporation or trust. The nonprofit corporation or trust shall only dispose of or use such real or personal property subject to covenants or other legally binding restrictions that will promote the preservation or conservation of the property, and, where appropriate, secure rights of public access.

Acts 2013, ch. 115, § 1.

Attorney General Opinions. Authority of city and county to dispose of surplus real property by private sale.  OAG 13-84, 2013 Tenn. AG LEXIS 85 (10/31/13).

Chapter 3
Public Purchases

Part 1
Applicability of Chapter

12-3-101. State requirements to be purchased by the central procurement office.

Except as provided in §§ 12-3-102 and 12-3-103, all goods and services, and all telephone, telegraph, electric light, gas, power, postal services, and the leasing of any equipment required for the use of state government, shall be purchased and contracted for by the central procurement office consistent with the requirements of this chapter and any rules, regulations or policies and procedures approved by the procurement commission.

Acts 2013, ch. 403, § 8.

Compiler's Notes. Former title 12, ch. 3 and ch. 4, part 1 were recodified by Acts 2013, ch. 403, §§ 8-70, effective July 1, 2013.

Former title 12, ch. 3, part 1, §§ 12-3-10112-3-133 (Williams, §§ 370.11, 370.27, 370.31, 370.32, 370.37, 370.39, 370.40); impl. am. Acts 1957, ch. 4, § 1; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; Acts 1969, ch. 115, § 1; impl. am. Acts 1969, ch. 302, § 1; Acts 1971, ch. 405, § 1; impl. am. Acts 1972, ch. 543, § 7; Acts 1973, ch. 144, § 4; 1973, ch. 216, § 1; 1973, ch. 320, § 4;  1975, ch. 60, § 1; 1976, ch. 601, § 1; 1976, ch. 776, §§ 1, 2; 1977, ch. 437, § 1; 1978, ch. 932, § 3; T.C.A. (orig. ed.), §§ 12-309, 12-328, 12-329, 12-333, 12-334, 12-336; 12-337, 12-3-123, 12-3-124, 12-3-128, 12-3-131, 12-3-132; Acts 1980, ch. 741, § 4; T.C.A., § 12-3-130; Acts 1981, ch. 332, §§ 16, 17; 1986, ch. 896, § 1; 1987, ch. 337, § 17; 1995, ch. 305, § 97; 1996, ch. 682, § 1; 2003, ch. 288, § 1; 2009, ch. 106, § 5; 2010, ch. 694, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2012, ch. 731, § 1) was repealed and reenacted by Acts 2013, ch. 403, §§ 8-12, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-101(b)  were transferred to § 12-3-202.

Former §§ 12-3-10812-3-132 were transferred in 1981.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Business enterprise programs for the blind, exemption from state purchasing requirements, § 71-4-403.

Driver license photo system competitive bidding provisions applicable, § 55-50-335.

Public purchasing chapter inapplicable to certain prison contractors, § 41-24-111.

Attorney General Opinions. Alternative dispute resolution commission exempt, OAG 96-147, 1996 Tenn. AG LEXIS 176 (12/18/96).

Applicability of statutes pertaining to public purchasing and public contracting, and governing general contractors, to housing authorities established by municipalities or counties pursuant to T.C.A. §§ 13-20-101 et seq., OAG 05-170, 2005 Tenn. AG LEXIS 172 (11/21/05).

Tennessee education lottery corporation: contract amendments.  OAG 10-73, 2010 Tenn. AG LEXIS 79 (5/21/10).

Applicability of procurement requirements when providing grants and entering into agreements to assist impaired professionals pursuant to T.C.A. § 63-1-136; applicability to grant contracts for peer assistance issued by health-related regulatory boards under T.C.A. § 63-1-136. OAG 14-98, 2014 Tenn. AG LEXIS 101 (10/30/14).

Law Reviews.

Bid Protests in Tennessee (Steven W. Feldman), 34 Tenn. B.J. 27 (1998).

12-3-102. Exempt agencies and purchases.

  1. Procurements and contracts by and for the following state governmental entities shall be exempt from the operation of this chapter:
    1. The legislative branch;
    2. The judicial branch;
    3. The board of trustees of the University of Tennessee system, the Tennessee board of regents system, the state university boards, the Tennessee higher education commission, and the Tennessee student assistance corporation;
    4. Contracts advertised and awarded by the state building commission pursuant to § 4-15-102. If there is a question whether a contract or procurement requires state building commission or central procurement office approval, the chief procurement officer and the state architect shall determine in writing the procurement method or the contract form that is in the best interest of the state. Any such agreement reached by the chief procurement officer and the state architect shall be subject to the approval of the comptroller of the treasury;
    5. Construction and engineering contracts entered into by the department of transportation pursuant to title 54, chapter 5;
    6. Contracts for procurement of services in connection with the issue, sale, purchase, and delivery of bonds, notes and other debt obligations or the administration, safekeeping, and payment after delivery of such debt obligations by the state or any of its agencies;
    7. Contracts for appraisal, relocation or acquisition services related to the acquisition of land that are entered into by the department of transportation pursuant to title 54, chapter 5; and
    8. Administrative contracts for specific service signs pursuant to title 54, chapter 5, part 11, shall be awarded to the vendor who offers the lowest responsible response. The basis of all responses shall be the least cost to the retail user of the signs. All administrative contracts shall be awarded on an objective, competitive basis pursuant to rules and regulations promulgated by the department of transportation.
  2. Notwithstanding subsection (a), any or all state entities exempt from the requirements of this part, as well as any private nonprofit institution of higher education chartered in this state, are authorized to procure goods or services under this chapter through the central procurement office.

Acts 2013, ch. 403, § 9; 2016, ch. 869, § 32; 2020, ch. 794, § 2.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 1, §§ 12-3-10112-3-133 (Williams, §§ 370.11, 370.27, 370.31, 370.32, 370.37, 370.39, 370.40); impl. am. Acts 1957, ch. 4, § 1; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; Acts 1969, ch. 115, § 1; impl. am. Acts 1969, ch. 302, § 1; Acts 1971, ch. 405, § 1; impl. am. Acts 1972, ch. 543, § 7; Acts 1973, ch. 144, § 4; 1973, ch. 216, § 1; 1973, ch. 320, § 4;  1975, ch. 60, § 1; 1976, ch. 601, § 1; 1976, ch. 776, §§ 1, 2; 1977, ch. 437, § 1; 1978, ch. 932, § 3; T.C.A. (orig. ed.), §§ 12-309, 12-328, 12-329, 12-333, 12-334, 12-336; 12-337, 12-3-123, 12-3-124, 12-3-128, 12-3-131, 12-3-132; Acts 1980, ch. 741, § 4; T.C.A., § 12-3-130; Acts 1981, ch. 332, §§ 16, 17; 1986, ch. 896, § 1; 1987, ch. 337, § 17; 1995, ch. 305, § 97; 1996, ch. 682, § 1; 2003, ch. 288, § 1; 2009, ch. 106, § 5; 2010, ch. 694, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2012, ch. 731, § 1) was repealed and reenacted by Acts 2013, ch. 403, §§ 8-12, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to parts of  § 12-4-109 were transferred to this section.

Former §§ 12-3-10812-3-132 were transferred in 1981.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Acts 2016, ch. 869, § 33 provided that the state university boards are authorized to promulgate rules to effectuate the purposes of this act. The rules shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Compiler's Notes. For the Preamble to the act concerning HOPE Lottery Scholarships and the Tennessee Promise and Reconnect programs, see Acts 2020, ch. 794.

Acts 2020, ch. 794, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Financial Aid Simplification for Tennesseans (FAST) Act”.

Amendments. The 2020 amendment, in (a)(3), deleted “and” following “regents system” and added “, the Tennessee higher education commission, and the Tennessee student assistance corporation”.

Effective Dates. Acts 2020, ch. 794, § 70. August 1, 2020.

Attorney General Opinions. Applicability of procurement requirements when providing grants and entering into agreements to assist impaired professionals pursuant to T.C.A. § 63-1-136; applicability to grant contracts for peer assistance issued by health-related regulatory boards under T.C.A. § 63-1-136. OAG 14-98, 2014 Tenn. AG LEXIS 101 (10/30/14).

12-3-103. Requirements of professional persons or groups providing fiscal agent, financial advisor, advisory or consultant services covered by this part.

  1. Contracts for legal services, fiscal agent, financial advisor or advisory services, educational consultant services, and similar services by professional persons or groups with high ethical standards, shall not be based upon competitive procurement methods, but shall be awarded on the basis of recognized competence and integrity. The prohibition against competitive procurement in this section shall not prohibit any entity enumerated from interviewing eligible persons or entities to determine the capabilities of such persons or entities.
  2. Any person providing fiscal agent, financial advisor or advisory services covered by this part shall perform such services only pursuant to a written contract specifying the services to be rendered, the costs of the services, and the expenses to be covered under such contract.
  3. Any person providing fiscal agent, financial advisor or advisory services covered by this part who desires to respond, directly or indirectly, on any bonds, notes or other obligations of such entity sold pursuant to public, competitive sale shall receive in writing prior to the sale the permission of such entity to respond either directly or indirectly on the obligations.
  4. For the purposes of this section, “providing fiscal agent, financial advisor or advisory services” means a relationship that exists when a person renders, or enters into an agreement to render, financial advisory or consultant services to or on behalf of an issuer with respect to a new issue or issues of municipal securities, including advice with respect to the structure, timing, terms and other similar matters concerning such issue or issues, for a fee or other compensation or in expectation of such compensation for the rendering of such services.
  5. A financial advisory relationship shall not be deemed to exist when, in the course of acting as an underwriter, a municipal securities dealer renders advice to an issuer, including advice with respect to the structure, timing, terms and other similar matters concerning a new issue of municipal securities.

Acts 2013, ch. 403, § 10.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 1, §§ 12-3-10112-3-133 (Williams, §§ 370.11, 370.27, 370.31, 370.32, 370.37, 370.39, 370.40); impl. am. Acts 1957, ch. 4, § 1; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; Acts 1969, ch. 115, § 1; impl. am. Acts 1969, ch. 302, § 1; Acts 1971, ch. 405, § 1; impl. am. Acts 1972, ch. 543, § 7; Acts 1973, ch. 144, § 4; 1973, ch. 216, § 1; 1973, ch. 320, § 4;  1975, ch. 60, § 1; 1976, ch. 601, § 1; 1976, ch. 776, §§ 1, 2; 1977, ch. 437, § 1; 1978, ch. 932, § 3; T.C.A. (orig. ed.), §§ 12-309, 12-328, 12-329, 12-333, 12-334, 12-336; 12-337, 12-3-123, 12-3-124, 12-3-128, 12-3-131, 12-3-132; Acts 1980, ch. 741, § 4; T.C.A., § 12-3-130; Acts 1981, ch. 332, §§ 16, 17; 1986, ch. 896, § 1; 1987, ch. 337, § 17; 1995, ch. 305, § 97; 1996, ch. 682, § 1; 2003, ch. 288, § 1; 2009, ch. 106, § 5; 2010, ch. 694, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2012, ch. 731, § 1) was repealed and reenacted by Acts 2013, ch. 403, §§ 8-12, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-106 were transferred to this section.

Former §§ 12-3-10812-3-132 were transferred in 1981.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-104. Transfer of equipment between departments, institutions and agencies.

Whenever any state department or agency applies to the department of general services to lease or rent any equipment, the department of general services shall first ascertain whether or not any such equipment is available for use from any other department, institution, or agency. The department of general services shall have the power to request the transfer of any such equipment from one (1) department, institution, or agency to another with the approval of the head of the transferring department, institution, or agency.

Acts 2013, ch. 403, § 11.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 1, §§ 12-3-10112-3-133 (Williams, §§ 370.11, 370.27, 370.31, 370.32, 370.37, 370.39, 370.40); impl. am. Acts 1957, ch. 4, § 1; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; Acts 1969, ch. 115, § 1; impl. am. Acts 1969, ch. 302, § 1; Acts 1971, ch. 405, § 1; impl. am. Acts 1972, ch. 543, § 7; Acts 1973, ch. 144, § 4; 1973, ch. 216, § 1; 1973, ch. 320, § 4;  1975, ch. 60, § 1; 1976, ch. 601, § 1; 1976, ch. 776, §§ 1, 2; 1977, ch. 437, § 1; 1978, ch. 932, § 3; T.C.A. (orig. ed.), §§ 12-309, 12-328, 12-329, 12-333, 12-334, 12-336; 12-337, 12-3-123, 12-3-124, 12-3-128, 12-3-131, 12-3-132; Acts 1980, ch. 741, § 4; T.C.A., § 12-3-130; Acts 1981, ch. 332, §§ 16, 17; 1986, ch. 896, § 1; 1987, ch. 337, § 17; 1995, ch. 305, § 97; 1996, ch. 682, § 1; 2003, ch. 288, § 1; 2009, ch. 106, § 5; 2010, ch. 694, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2012, ch. 731, § 1) was repealed and reenacted by Acts 2013, ch. 403, §§ 8-12, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-104 were enacted at this section.

Former §§ 12-3-10812-3-132 were transferred in 1981.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 2
General Provisions

12-3-201. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Central procurement office” means the government agency established in § 4-56-104; (2)  “Chief procurement officer” means the person holding the position established in § 4-56-104, as the head of the central procurement office and with the powers and duties set forth in § 4-56-105;
    1. “Goods” does not include real property;

      (A)  “Grant” means any grant awarded to the state or awarded by the state to any person to support a program authorized by law;

    2. “Grant” does not include an award whose primary purpose is to procure an end product, whether in the form of supplies, services, or construction, or any contract resulting from such an award;

      “Invitation to bid” means all documents, whether attached or incorporated by reference, utilized for soliciting bids for the lowest cost, responsive and responsible bidder;

      (A)  “Procurement” means buying, purchasing, renting, leasing, or otherwise acquiring of any goods or services;

      “Political subdivision” means any authority, city, town, municipality, county or instrumentality of any authority, city, town, municipality or county within the state;

      “Major energy-consuming product” means any article so designated by the chief procurement officer in consultation with the central procurement office staff;

    3. “Procurement” also includes all functions that pertain to the obtaining of goods or services, including the description of requirements, selection and solicitation of sources, preparation and award of a contract, and all phases of contract administration;

      “Procurement commission” means the state procurement commission, as established in § 4-56-102;

      (A)  “Specification” means any description of the physical, functional, performance characteristics, or nature of a supply, service, or construction item;

      “Solicitation” means any type of document that invites responses and may include, by way of example, an “invitation to bid”, a “request for proposal” or a “competitive negotiation”;

      “Services” means all services and agreements obligating the state, except services for highway and road improvements governed by title 54 and design and construction services governed by title 4, chapter 15;

      “Responsive” means a person who has submitted a response that conforms in all material respects to the competitive procurement;

      “Responsible” means a person who has the capacity in all respects to perform fully the contract requirements, as well as the integrity and reliability, which will assure good faith performance;

      “Response” means a written response to a solicitation for goods and services;

      “Respondent” includes a “bidder” or “proposer” that is a natural person or legal entity that has properly registered as required by the state. The terms “bidder” and “proposer” may be used interchangeably as the context requires;

      “Request for proposal” means a written solicitation for written proposals to provide goods or services to the state or a state governmental entity based upon specified evaluation criteria;

      “Proprietary” means a good or service that is used, produced, or marketed under exclusive legal right of the inventor, maker or service provider that is protected under trade secret, patent, trademark, or copyright law;

    4. “Specification” includes, as appropriate, requirements for inspecting, testing, or preparing a supply, service, or construction item for delivery;

      “State agency” means any state governmental entity, other than the central procurement office and those state entities exempted by § 12-3-102, that is authorized to enter into contracts by this title or its implementing regulations, or by way of delegation from the chief procurement officer, or that utilizes any goods or services procured under this title;

      “Vendor” means a natural person or legal entity that has been established by the department of finance and administration's division of accounts as a vendor through proper authority for which payment may be made by the state.

      “State governmental entity” means any agency, authority, board, commission, department, or office within the executive, legislative or judicial branches of state government or any autonomous state agency, authority, board, commission, council, department, office, or institution of higher education; and

“Committee” means the state protest committee as established in § 4-56-103;

“Contract” means any duly authorized and legally binding written agreement for the procurement of goods and services;

“Council” means the advisory council on state procurement established in § 4-56-106;

“Data” means any recorded information, regardless of its form or characteristic;

“Energy efficiency standard” means a performance standard that prescribes the relationship of the energy use of a product to its useful output of services;

(A)  “Goods” means all personal property, including, but not limited to, supplies, equipment, materials, printing, and insurance;

Acts 2013, ch. 403, § 13.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 2, §§ 12-3-20112-3-262 (Acts 1987, ch. 337, §§ 2-14, 16; 1998, ch. 895, §§ 1-4; 1989, ch. 497, § 1; 1990, ch. 910, § 1; 1992, ch. 865, § 1; 2000, ch. 924, §§ 1, 2; Acts 2003, ch. 184, § 3; 2004, ch. 613, § 3; 2005, ch. 461, § 1; 2006, ch. 859, § 1;  2007, ch. 147, § 1; Acts 2007, ch. 296, § 1; 2009, ch. 65, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 17, 19; 2012, ch. 625, §§ 1-4, 6), concerning bidding, contracts and purchases generally, was repealed and reenacted by Acts 2013, ch. 403, §§ 13-15.

Former title 12, ch. 3, part 2, §§ 12-3-20112-3-210, 12-3-24012-3-247, and 12-3-26012-3-262 (Acts 1937, ch. 33, § 41; C. Supp. 1950, § 255.41 (Williams, § 255.42); impl. am. Acts 1953, ch. 163, § 1; 1953, ch. 163, §§ 7-17, 19, 24, 26, 32 (Williams, §§ 370.18-370.26, 370.28, 370.35, 370.41); impl. am. Acts 1959, ch. 9, §§ 3, 5; impl. am. Acts 1961, ch. 97, §§ 3, 5; 1972, ch. 516, § 1; impl. am. Acts 1972, ch. 543, § 7; 1973, ch. 369, §§ 1, 2; 1976, ch. 601, § 2; 1976, ch. 809, § 1; 1978, ch. 618, § 1; 1979, ch. 159, § 1; 1979, ch. 181, § 1; T.C.A. (orig. ed.), §§ 12-313 — 12-327, 12-330 — 12-332, 12-335, 12-3-10612-3-120, 12-3-12512-3-127, 12-3-129; Acts 1981, ch. 332, §§ 7-15), concerning purchases generally, was repealed by Acts 1987, ch. 337, § 1.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-201 were enacted at this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-202. Long distance telephone service for students at state universities and colleges.

Subject to the regulations and requirements of the Tennessee public utility commission and other state or federal bodies, the central procurement office is authorized to extend the use of the state network long distance telephone service to students at state universities and colleges. If the central procurement office extends such service, it shall charge the institution the amount that it costs the state for such service.

Acts 2013, ch. 403, § 14; 2017, ch. 94, § 79.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 2, §§ 12-3-20112-3-262 (Acts 1987, ch. 337, §§ 2-14, 16; 1998, ch. 895, §§ 1-4; 1989, ch. 497, § 1; 1990, ch. 910, § 1; 1992, ch. 865, § 1; 2000, ch. 924, §§ 1, 2; Acts 2003, ch. 184, § 3; 2004, ch. 613, § 3; 2005, ch. 461, § 1; 2006, ch. 859, § 1;  2007, ch. 147, § 1; Acts 2007, ch. 296, § 1; 2009, ch. 65, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 17, 19; 2012, ch. 625, §§ 1-4, 6), concerning bidding, contracts and purchases generally, was repealed and reenacted by Acts 2013, ch. 403, §§ 13-15.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-101 were transferred to this section, and provisions similar to this section were transferred to § 12-3-501.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 3
Purchases and Contracts for Goods and Services

12-3-301. Written acquisition plan — Data relating to purchases and purchase estimates — Amendments to acquisition plan.

    1. Before April 1 of each year, each state agency shall compile and submit to the chief procurement officer and the comptroller of the treasury, a written acquisition plan for the upcoming fiscal year forecasting the specific categories and quantities of goods and services anticipated for purchase by the state agency. The chief procurement officer shall develop procedures to ensure uniformity among the various state agencies both in the manner of calculating such forecasts and in the style and format used for submitting such written acquisition plans to the chief procurement officer. The information contained within such forecasts shall be based on good faith estimates and shall not be construed in any way to legally bind or authorize the state agency to make any purchase in conflict with the other requirements of this chapter.
    2. This subsection (a) shall not apply to those entities exempt from this chapter pursuant to § 12-3-102.
  1. Before July 1 of each year, the chief procurement officer shall compile and publish the written acquisition plans submitted by the various agencies pursuant to subsection (a), within an annual report that shall be entitled “The Forecast of Acquisition Plans for State Departments and Agencies for Fiscal Year _____—_____.” A copy of the report shall be posted on the central procurement office's website.
  2. It is the duty of all state agencies to furnish to the central procurement office, upon request, data relating to purchases and purchase estimates.
  3. An agency is permitted to amend or supplement its written acquisition plan before the end of a given fiscal year for unforeseen circumstances pursuant to rules, regulations and policies approved by the commission.

Acts 2013, ch. 403, § 16.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-133 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Attorney General Opinions. Tennessee education lottery corporation: contract amendments.  OAG 10-73, 2010 Tenn. AG LEXIS 79 (5/21/10).

12-3-302. Bidding not to include statement that bidder willing to meet lowest bid price — Exception where negotiation permitted.

  1. Any statement or agreement in which the respondent is asked to indicate a willingness to meet the low price, if such respondent is not the low respondent, is adverse to the competitive procurement standards and shall not be included in any solicitation to be awarded by any state agencies.
  2. This section applies to divisible contracts.
  3. This section shall not apply when applicable law permits negotiated contracts.
  4. For the purposes of this section, contracts for the administration of specific service signs pursuant to title 54, chapter 5, part 11 shall not be negotiable.

Acts 2013, ch. 403, § 17.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-111 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-303. Execution of contracts by executive branch state agencies — Approval by chief procurement officer — Contracts for rendering public relations, advertising or related services — Applicability to various contracts — Posting of contracts on state procurement office’s website.

  1. Any contract for goods or services entered into by an executive branch state agency shall be executed by the head of such state agency and approved by the chief procurement officer. Notwithstanding any other law to the contrary, approval of the chief procurement officer and no other officer of the state government is necessary, except as follows:
    1. Contracts for financial management or accounting services shall also be approved by the commissioner of finance and administration;
    2. Contracts for auditing services shall also be approved by the comptroller of the treasury;
    3. Contracts for engineering or architectural services shall also be approved by the office of the state architect;
    4. Contracts of the Tennessee higher education commission, the Tennessee student assistance corporation, and all state colleges and universities operated by the board of trustees of the University of Tennessee, the board of regents, and the state university boards do not need to be approved by the chief procurement officer; however, these contracts are subject to applicable provisions of the rules and policies promulgated by the central procurement office and approved by the procurement commission; or
    5. Those procurements, contracts, grants, and other documents subject to approval by the comptroller of the treasury pursuant to § 4-56-108 or otherwise required by law.
  2. All contracts for rendering public relations, advertising or related services entered into by or on behalf of agencies and departments of the executive branch of state government shall be restricted to provide for only the rendition of media advertising and related design and production services, except as otherwise determined in accordance with policies established by the procurement commission.
    1. This section shall not apply to construction and engineering contracts entered into by the department of transportation pursuant to title 54, chapter 5, or to contracts for projects required by law to be approved by the state building commission.
    2. This section shall not apply to contracts to hire additional counsel for the state or any of its departments, institutions or agencies; provided, that all such contracts shall be made in accordance with § 8-6-106, except for legal counsel employed pursuant to any statute concerning the issuance and sale of bonds, notes, or other obligations.
    3. This section shall not apply to contracts for procurement of services in connection with the issue, sale, purchase, and delivery of bonds, notes and other debt obligations or the administration, safekeeping, and payment after delivery of such debt obligations by the state or any of its agencies.
  3. All contracts for goods and services shall be posted on the state procurement office's website, at a minimum providing the following information, as applicable, regarding each request for goods or services:
    1. Business unit or agency requesting;
    2. Contract number;
    3. Brief description of the contract;
    4. Type of contract;
    5. Commencement date of the contract;
    6. Ending date of the contract;
    7. Maximum liability; and
    8. Status of the contract.

Acts 2013, ch. 403, § 18; 2020, ch. 794, § 3.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former §§ 12-4-109 and 12-4-110 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

For the Preamble to the act concerning HOPE Lottery Scholarships and the Tennessee Promise and Reconnect programs, see Acts 2020, ch. 794.

Acts 2020, ch. 794, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Financial Aid Simplification for Tennesseans (FAST) Act”.

Amendments. The 2020 amendment, in (a)(4),  inserted “the Tennessee higher education commission, the Tennessee student assistance corporation, and”, substituted “University of Tennessee, the board of regents,” for “University of Tennessee or the state board of regents,”, inserted “, and the state university boards”, and substituted “however, these contracts” for “provided, that these contracts”.

Effective Dates. Acts 2020, ch. 794, § 70. August 1, 2020.

12-3-304. Unauthorized contracts void — Personal liability of officers and heads of agencies.

  1. When any state agency required by this chapter to purchase goods or services through the central procurement office, contracts for the purchase of goods or services contrary to this chapter or the rules and regulations made hereunder, such contract shall be void and of no effect.
  2. When the central procurement office contracts for the purchase of goods or services contrary to this chapter or the rules and regulations made hereunder, such contract shall also be void and of no effect.
  3. If any state agency, including the central procurement office, purchases any goods or services contrary to this chapter or the rules and regulations made hereunder, then the chief procurement officer or head of such state agency shall be personally liable for the costs thereof, and if such goods or services are so unlawfully purchased and paid for out of state moneys, then the amount thereof may be recovered in the name of the state in an appropriate action instituted by the state.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-105 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-305. Responsibility for effective management of contracts — Adoption of regulations or policies that define service contracting fundamentals — Inclusion of the maximum liability or total estimated purchase in solicitations — Certification to state agencies the sources of services and supply and the contract price of the various goods and services covered by contracts.

  1. The central procurement office or the procuring state governmental entity shall be responsible for the effective management of all contracts procured under its authority and shall adopt regulations or policies that define service contracting fundamentals. Such regulations or policies shall include, but are not limited to, contract management and monitoring of vendors, grants and sub-recipient relationships. The regulations for monitoring shall, at a minimum, require the filing of the monitoring plan with the chief procurement officer before any contracts are approved.
  2. Any state agency, when entering into contracts with any organizations that agree to provide services to third parties, shall, subject to approval by the chief procurement officer and the comptroller of the treasury, establish guidelines for such organizations. These guidelines shall define the responsibility and prescribe procedures to be followed by the contracting agencies, including, but not limited to, the use of generally accepted accounting procedures, sound business practices, and compliance with related state and federal regulations regarding the fiscal policies of nonprofit organizations. The guidelines established shall be used as prerequisites for the state's agreement to provide matching or other state funds or federal funds or entering into a third party contract.
  3. Every solicitation issued for the purpose of establishing a contract shall include the maximum liability or total estimated purchase by agencies of state government for the current contract period, if applicable, and for the new contract period. More than one (1) contract may be let for the supply of any given class or type of goods or services and any contract may provide for the cancellation thereof by either party. Contracts executed or proposed to be executed for periods of time of more than twelve (12) months shall be subject to the policies, rules and regulations of the central procurement office, as approved by the procurement commission, and shall meet the following conditions:
    1. Such contracts may contain a provision giving the state the right of cancellation for convenience for periods of time established by the chief procurement officer;
    2. Such contracts shall contain a provision giving the state the right of cancellation at the end of any fiscal year without notice, in the event that funds to support the contract become unavailable; and
    3. No contract may be let for periods of time in excess of sixty (60) months, unless the chief procurement officer determines the contract is in the best interest of the state and approves the contract in accordance with rules and regulations, and policies and procedures approved by the procurement commission, as being in the best interest of the state.
  4. After contracts have been awarded, the chief procurement officer shall certify to state agencies the sources of services and supply and the contract price of the various goods and services covered by the contracts. It is unlawful for any state agency to purchase any goods or services covered thereby from any sources other than those certified by the chief procurement officer, except as otherwise provided in this chapter.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former §§ 12-3-112, 12-3-203 and 12-4-109(d) were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-306. Registration with the department of revenue to collect and remit sales and use taxes — Development of procedures for compliance.

  1. A state governmental entity shall not contract to acquire goods or services, and no person may contract to supply goods or services to a state governmental entity, unless, prior to, or contemporaneous with, entering into the contract, the person contracting to supply goods or services and its affiliates register with the department of revenue to collect and remit the sales and use tax levied by the Retailers' Sales Tax Act, compiled in title 67, chapter 6. Nothing in this section shall require a person or affiliate to register if the person or affiliate does not make sales to customers in the state of tangible personal property or services, which if the sales occurred wholly within the state, would be taxable under title 67, chapter 6. This section is specifically applicable to foreign persons, notwithstanding the fact that such foreign persons or their affiliates may not otherwise be legally obligated to collect and remit such tax.
  2. For purposes of this section:
    1. “Affiliates” means each and every affiliate of the person contracting with the state or other state entities, as the term “affiliate” is defined in § 48-103-102;
    2. “Other state entities” has the same meaning as in § 12-4-601; and
    3. “Person” or “persons” has the same meaning as in § 67-6-102.
  3. The commissioner of revenue and the chief procurement officer shall develop procedures for compliance with this section with approval by the procurement commission.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-120 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-307. Application of procedural and administrative accountability requirements to matching funds.

Contracting state agencies that establish the procedural and administrative accountability requirements shall apply these requirements to all matching funds. The established procedural and administrative requirements shall remain in effect for the entire fiscal year covered by the third party contract, and no contracting agency shall modify or amend these procedures without the state agency's approval.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-113 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-308. Contracts through or administered by social services agencies without discrimination — Religious organizations.

  1. Notwithstanding any other law to the contrary, state and local governments shall contract for goods and services provided through, or administered by, the departments of children's services, health, and human services without discrimination against religious organizations or discrimination based on race, age, color, sex, or national origin and shall provide beneficiaries of assistance under the programs established by law with forms of disbursement that are redeemable with these organizations that are awarded a contract. State and local governments may use any state, federal, local or other moneys available for these purposes.
  2. State and local governments shall allow contracts with religious organizations to provide goods and services provided through, or administered by, the departments of children's services, health, and human services and to accept forms of disbursement under any program established on the same basis as any other nongovernmental provider without impairing the religious character of these organizations, and without diminishing the religious freedom of beneficiaries of assistance funded under these programs. The programs shall be implemented consistent with the first amendment of the United States Constitution. State and local governments shall not discriminate against an organization that is, or applies to be, a contractor to provide assistance or that accepts forms of disbursement on the basis that the organization has a religious character.
  3. A religious organization with a contract described in this section shall retain its independence from federal, state and local governments, including the religious organization's control over the definition, development, practice and expression of its religious beliefs. State and local governments shall not require a religious organization to alter its form of internal governance or to remove religious art, icons, scripture or other symbols in order to be eligible to contract to provide assistance or to accept grants or other forms of disbursement funded under any program or public contract.
  4. If a person, who applies for or receives goods, services or disbursements, objects to the religious character of the organization or institution from which the person receives, or would receive, assistance funded under any program, the state or local government shall provide the person, within a reasonable period of time after the date of the objection, with assistance from an alternative provider that is accessible to the person if an alternative provider is available and the value of which is not less than the value of assistance that the person would have received from the religious organization. Organizations shall provide notice to people receiving assistance of the right to object pursuant to this subsection (d).
  5. A religious organization's exemption provided under § 702 of the Civil Rights Act of 1964 (42 U.S.C. § 2000e-1(a)), regarding employment practices is not affected by its participation in, or receipt of, moneys from programs described in this section. Nothing in this section allows religious organizations to discriminate in employment practices on the basis of race, age, color, sex or national origin.
  6. Except as otherwise provided by law, a religious organization shall not discriminate against a person in regard to rendering assistance funded under any program described in this section on the basis of religion, a religious belief or refusal to participate in a religious practice, or on the basis of race, age, color, sex or national origin.
  7. Except as provided in subsection (h), any religious organization that contracts to provide goods, services or assistance funded under any program is subject to audit by the comptroller of the treasury, and is required to comply with the same rules and laws as other contractors to account in accordance with generally accepted auditing principles for the use of the moneys provided under the program.
  8. If a religious organization segregates public moneys provided under these programs into separate accounts, only the programs funded by financial assistance provided with these moneys are subject to audit by the comptroller of the treasury.
  9. Appeals from the decisions of the head of a state agency, board or commission may be made to the commissioner of finance and administration in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
  10. No moneys provided directly to institutions or organizations to provide services and administer programs under this section may be spent for sectarian worship, instruction or proselytization. This subsection (j) does not apply to the contracting for the services of chaplains by state and local governments.
  11. For the purposes of this section, “state and local governments” means state agencies, boards and commissions and political subdivisions of this state.
  12. No funds provided by any state or local government for goods and services to religious organizations shall supplant present funding of programs provided by such groups but shall be a supplement to the activities rendered by these groups.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-122 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-309. Prohibited contracts.

  1. Prohibited contracts:
    1. No state governmental entity shall contract to acquire goods or services from any person who knowingly utilizes the services of illegal immigrants in the performance of a contract for goods or services entered into with a state governmental entity;
    2. No person may contract to supply goods or services to a state governmental entity if that person knowingly utilizes the services of illegal immigrants in the performance of a contract to supply goods or services entered into with the state or a state entity.
  2. After January 1, 2007, no person may enter into a contract to supply goods or services to a state governmental entity without first attesting in writing that the person will not knowingly utilize the services of illegal immigrants in the performance of the contract, and will not knowingly utilize the services of any subcontractor who will utilize the services of illegal immigrants in the performance of the contract.
  3. If any person who contracts to supply goods or services to a state governmental entity, or who submits a response to contract to supply goods or services to a state governmental entity, is discovered to have knowingly utilized the services of illegal immigrants in the performance of the contract to supply goods or services to a state governmental entity, the chief procurement officer shall declare that person to be prohibited from contracting for or submitting a response for any contract to supply goods or services to a state governmental entity for a period of one (1) year from the date of discovery of the usage of illegal immigrant services in the performance of a contract to supply goods or services to a state governmental entity.
  4. Any person who is prevented from contracting for or submitting a response for a contract to supply goods or services to a state governmental entity for one (1) year pursuant to subsection (c) may appeal the imposition of the one-year prohibition by utilizing an appeals process to be established by the chief procurement officer and approved by the procurement commission.
  5. The chief procurement officer is authorized to promulgate rules and regulations to effectuate the purposes of this section and shall be approved by the procurement commission. All rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-124 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-310. Definition of “call center” — Contracts for call center services.

  1. As used in this section, “call center” includes a person who performs services, including, but not limited to, data entry services, electronic governmental transfers, or other electronic, telephone and telecommunication services.
  2. The chief procurement officer shall promulgate regulations pursuant to title 4, chapter 56, authorizing a preference in the evaluation of proposals for state contracts requiring vendors of call center services to only employ, use, or contract with citizens of the United States who reside in the United States, or any person authorized to work in the United States pursuant to federal law, including legal resident aliens in the United States to provide call center services.
  3. Any respondent seeking this preference shall supply such supporting documentation as the state may require and shall certify that it will provide services solely by citizens of the United States who reside within the United States, or persons authorized to work in the United States pursuant to federal law, including legal resident aliens in the United States. The certification shall acknowledge and confirm the right of the state to audit and monitor compliance and seek appropriate remedies for noncompliance.

Acts 2013, ch. 403, § 18.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 3, §§ 12-3-30112-3-314 (Acts 1981, ch. 332, §§ 18-20; 2000, ch. 722, § 1; 2004, ch. 798, § 1; 2010, ch. 1098, § 2; T.C.A. § 12-3-215; 2011, ch. 295, §§ 5, 19), concerning cost principles and audit, was transferred to title 12, ch. 3, part 6 by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-109(e) were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 3 to title 12, ch. 3, part 6, and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-311. Certain noncompetitive purchases and contracts entered into by the department of transportation are subject to the approval of the comptroller of the treasury — Review by the fiscal review committee.

All noncompetitive purchases and contracts entered into by the department of transportation for nonconstruction and nonengineering projects or services with a term of more than one (1) year or which are renewable by either party that would extend the contract beyond twelve (12) months and which have a cumulative value of not less than two hundred fifty thousand dollars ($250,000), including all possible renewals, shall be subject to the approval of the comptroller of the treasury. A list of all such purchases and contracts shall be filed with and subject to review by the fiscal review committee.

Acts 2013, ch. 217, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

12-3-312. Contract Accountability and Responsible Employment (CARE) Act.

  1. As used in this section, “state agency” also includes institutions of higher education. “State agency” does not include the department of treasury, the Tennessee financial literacy commission, the Tennessee consolidated retirement system, or any office of a constitutional officer of this state.
  2. Prior to the procurement of a contract for services between a state agency and a private party in excess of two and one-half million dollars ($2,500,000) and that results in the layoff or furlough of one (1) or more state employees, the state agency shall produce an economic impact statement using professionally accepted methodologies. The economic impact statement must include the information identified in § 4-33-104(b).
  3. An economic impact statement produced under subsection (b) must be submitted to the fiscal review committee for dissemination to the members of the general assembly no less than forty-five (45) days prior to the execution of the contract.
  4. Upon receipt of an economic impact statement under subsection (c), the chair of the fiscal review committee may schedule a hearing to review the economic impact statement.
  5. A state agency notified of a hearing conducted under subsection (d) shall provide the fiscal review committee, upon request, any information reasonably related to the proposed contract that the committee deems relevant; provided, that a state agency is not required to produce privileged information or any record that is not open for public inspection pursuant to state law.
  6. Upon compliance with subsections (b) and (c), nothing in this section prohibits a state agency from executing a proposed contract for services that is subject to this section.
  7. This section applies only to contracts procured on and after March 9, 2018, and does not apply to any contract for services executed on or before March 9, 2018, including, but not limited to, any option for renewal or extension of such contract.

Acts 2018, ch. 544, § 2.

Compiler's Notes. Acts 2018, ch. 544, § 1 provided that the act, which enacted this section, shall be known and may be cited as the “Contract Accountability and Responsible Employment (CARE) Act.”

Part 4
Delegation of Purchasing Authority

12-3-401. Procedure for delegated authority.

  1. The chief procurement officer may authorize any or all state agencies to procure all or any specific types and classes of goods or services, without following the procedures relating to the requisitioning of such goods or services through the central procurement office. The comptroller of the treasury shall review and approve such delegations as required by procurement commission policy. The chief procurement officer shall consider the individual state agency's purchasing record in these delegations and shall periodically review purchasing activities of any state agency granted such delegation, and may reduce or revoke such delegated purchasing authority.
  2. It is intended that delegation of purchase authority may be made by state agency, by type of good or service, by dollar amount of procurement, or by any combination thereof, in order to reduce the procurement time required and to increase the amount of purchases made from any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business, as defined in § 12-3-1102.
  3. Upon delegated authority, any procurement not exceeding fifty thousand dollars ($50,000), for which a source of supply has not otherwise been established, shall be made without requisitioning such goods or services through the central procurement office; provided, that procurement requirements shall not be artificially divided so as to constitute a small purchase under this section.
  4. All requisitions and solicitations provided for in this section shall be posted on the state procurement office's website, at a minimum providing the following information, as applicable, regarding each such procurement:
    1. Procuring agency;
    2. Requisition number;
    3. Vendor;
    4. Total amount of requisition;
    5. Line item of description; and
    6. Line item amount.

Acts 2013, ch. 403, § 19; 2017, ch. 485, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 4, §§ 12-3-40112-3-403 (Acts 1953, ch. 163, §§ 3, 33 (Williams, §§ 370.12, 370.42); impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; Acts 1970, ch. 548, § 1; 1972, ch. 543, § 16; 1976, ch. 806, § 1(50); T.C.A. (orig. ed.), §§ 12-301-12-303, 12-3-201, 12-3-202, 12-3-203; Acts 1981, ch. 332, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning the board of standards, was repealed by Acts 2011, ch. 295, § 11, effective April 1, 2012.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-210 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which enacted this section, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 5
Competitive Solicitations

12-3-501. Award of contracts by competitive sealed solicitations.

Unless otherwise authorized by law, state contracts shall be awarded by competitive sealed solicitations by the central procurement office in the manner set forth in § 12-3-502, except as provided in § 12-3-401 and §§ 12-3-50312-3-508.

Acts 2013, ch. 403, § 20.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-202 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-502. Solicitations — Responses — Rejection of responses — Correction or withdrawal of responses — Cancellation of awards or contracts — Filing of notices of intent to award — Procurement and performance bonds or other security.

  1. The central procurement office shall publicly advertise a copy of the solicitation. All responses received by the central procurement office shall be opened and examined at the time and place specified in the solicitation. Any and all responses may be rejected pursuant to subsection (b).
  2. Whenever the chief procurement officer approves the rejection of all responses for a certain solicitation, the chief procurement officer shall file a notice of such action with the comptroller of the treasury and shall take such action only for one (1) or more of the following reasons:
    1. Unreasonably high prices;
    2. Error in the solicitation;
    3. Cessation of need;
    4. Unavailability of funds; or
    5. Any other reason determined to be in the best interest of the state.
  3. Submission of a response shall not create rights, interests, or claims of entitlement in any respondent, including the lowest apparent respondent in terms of cost.
    1. Correction or withdrawal of inadvertently erroneous responses, before or after award, or cancellation of awards or contracts based on such mistakes, shall be permitted with approval of the chief procurement officer. All cancellation of awards or contracts shall be filed with the comptroller of the treasury.
    2. After response opening, no changes in prices or other provisions of responses prejudicial to the interest of the state or fair competition shall be permitted.
    3. Except as otherwise provided by regulation or policy of the procurement commission, all decisions to permit the correction or withdrawal of responses, or cancel awards or contracts based on response mistakes, shall be supported by a written determination made by the chief procurement officer and such determination shall be filed with the comptroller of the treasury.
  4. Only criteria or factors set forth in the solicitation may be used in evaluating a response.
  5. After response evaluation and prior to award of the contract, the chief procurement officer shall issue a notice of intent to award to all respondents to the solicitation. Notification by the state of intent to award shall not create rights, interests, or claims of entitlement in any respondent.
  6. Upon issuance of the intent to award, all data relating to the procurement shall be made available for inspection to each respondent of the solicitation, upon request. No contract shall be awarded by the chief procurement officer without providing respondents a reasonable opportunity for inspection. The chief procurement officer shall establish procedures for providing inspection by respondents to solicitations. Such procedures shall be approved by the procurement commission. Notification by the state of intent to award shall not create rights, interests, or claims of entitlement in any respondent.
  7. Each contract shall be awarded in the name of the state, with reasonable promptness by written notice to the respondent to whom a contract will be awarded in accordance with the criteria for award as set forth in the solicitation.
  8. Procurement and performance bonds or other security may be required for any contract. Any such requirement shall be set forth in the solicitation. The chief procurement officer shall promulgate rules establishing the requirements for the use and appropriate amount of such bonds or other security with approval by the procurement commission.

Acts 2013, ch. 403, § 21.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-203 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-503. Informal solicitation — Small purchases — Active solicitation of responses from minority-owned, woman-owned, service-disabled veteran-owned, business owned by persons with disabilities, or small business.

  1. The procurement commission may grant the chief procurement officer authority to establish informal solicitation rules, regulations, policies and procedures for procurements. The maximum amount of the procurement shall be determined in accordance with the following:
    1. If all of the members of the procurement commission agree, the amount shall be up to fifty thousand dollars ($50,000) or less; and
    2. Procurement requirements shall not be artificially divided in order to constitute an informal procurement under this section.
  2. The procurement commission may grant the chief procurement officer authority to establish small purchase rules, regulations, policies, and procedures. The maximum amount of the purchases shall be determined in accordance with the following:
    1. If all the members of the procurement commission agree, the amount shall be up to ten thousand dollars ($10,000) or less; and
    2. Purchasing requirements shall not be artificially divided in order to constitute a small purchase under this section.
  3. Notwithstanding subsections (a) and (b), such state agencies shall actively solicit responses from any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business in accordance with part 11 of this chapter.

Acts 2013, ch. 403, § 22; 2017, ch. 485, § 2.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-204 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-504. Sole source procurement — Noncompetitive negotiation.

The chief procurement officer shall identify goods or services that may not be procured by competitive means because of the existence of a single source of supply. The chief procurement officer shall submit to the procurement commission for approval rules, policies, and procedures prescribing the manner in which such procurements may be accomplished, which may include noncompetitive negotiation. Sole source goods and services shall be purchased only in accordance with these rules, policies, and procedures approved by the procurement commission.

Acts 2013, ch. 403, § 23.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-205 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-505. Emergency purchases.

The chief procurement officer is authorized to purchase for a state governmental entity in the open market specific goods or services for immediate delivery to meet emergencies arising from any unforeseen cause, including, but not limited to, delays by contractors, delays in transportation, unanticipated volume of work, and acts of God. The chief procurement officer may delegate this authority to any state agency; provided, that a report on the circumstances of any such emergency and the actions taken by such state agency as a result of the emergency shall be transmitted in writing as soon as possible by such state agency to the chief procurement officer. The report shall set forth the prices at which goods and services were purchased and the total amount of the purchase. The chief procurement officer shall keep each report on file in the permanent records of the central procurement office. All emergency purchases shall be posted on the single public internet website in such form as prescribed by the procurement commission. All emergency purchases shall, if practicable, be made on the basis of competitive procurement.

Acts 2013, ch. 403, § 24.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-206 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-506. Negotiation with vendors — General services administration price agreement.

In accordance with rules and regulations of the central procurement office approved by the procurement commission and adopted pursuant to title 4, chapter 56, and chapters 3 and 4 of this title, the chief procurement officer is authorized to negotiate with vendors who maintain a general services administration pricing agreement with the United States or any agency thereof; provided, that no contract executed under this section shall authorize a price higher than is contained in the contract between the general services administration and the affected vendor.

Acts 2013, ch. 403, § 25.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-207 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-507. Competitive negotiation.

Except as otherwise provided by law, a contract may be entered into by competitive negotiation when it is determined by the chief procurement officer that it is in the best interest of the state. Each use of competitive negotiation shall be subject to approval by the chief procurement officer and the comptroller of the treasury in accordance with rules, policies, and procedures of the procurement commission. Notice of such approved competitive negotiations shall be posted on the central procurement office's website.

Acts 2013, ch. 403, § 26.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-208 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-508. Utilities — Service contracts.

Subject to rules of the central procurement office approved by the procurement commission, the central procurement office shall purchase or contract for all telephone, telegraph, electric light, gas, power, postal, and other services for which a rate for the use thereof has been established by a public authority, in such manner as the chief procurement officer deems to be in the best interest of the state.

Acts 2013, ch. 403, § 27.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-209 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-509. Certification by receiving agent as condition of payment.

When any goods or services are received by a state agency, the state agency's receiving agent shall certify electronically or in writing that the goods or services received were equal in quality and quantity to those requisitioned or ordered. The certification shall accompany the voucher directing the payment. The state shall not remit funds in payment of any voucher unless the voucher is accompanied by the certification.

Acts 2013, ch. 403, § 28.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-212 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-510. Records of purchases open to public.

Notwithstanding § 12-3-502, all procurement records of the department and all records of the procurement commission shall be open and accessible to the public during the regular office hours of the central procurement office or state agency, when such inspections do not interfere with the orderly operation of the central procurement office or state agency.

Acts 2013, ch. 403, § 29.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-213 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-511. Ascertainment of availability of funds.

The central procurement office shall not honor or act upon any requisitions from any state agency without first having ascertained from the commissioner of finance and administration, or other responsible official, the availability of funds to cover the proposed expenditure.

Acts 2013, ch. 403, § 30.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-215 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-512. Cooperative purchasing agreements.

The central procurement office and public institutions of higher education may participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of goods or services with one (1) or more other states or local governments in accordance with an agreement entered into between the participants. All cooperative purchasing conducted under this section shall be awarded through full and open competition.

Acts 2013, ch. 403, § 31; 2015, ch. 272, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-216 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-513. Competitive reverse auction process.

  1. For a purchase of goods and services under this chapter, the central procurement office may purchase goods and services through a competitive reverse auction process that allows responses on specified goods or services electronically and adjustments to pricing during a specified time period. An award shall be made to the offeror determined to be the lowest responsible and responsive respondent at the close of the specified solicitation period.
  2. Policies and procedures concerning this procurement methodology, including the criteria, and the evaluation process shall be developed by the central procurement office and approved by the procurement commission.
  3. This section shall not apply to:
    1. Construction services; or
    2. Architectural or engineering services.

Acts 2013, ch. 403, § 32.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-219 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-514. Protests by aggrieved respondents.

  1. As used in this section:
    1. “Protest” means a written objection by a respondent, as defined in § 12-3-201, challenging a solicitation, an award, or a proposed award of a contract; and
    2. “Protesting party” means a respondent, as defined in § 12-3-201, who has filed a protest.
  2. Any respondent who has submitted a response to a solicitation authorized under this chapter and who claims to be aggrieved in connection with the solicitation, award, or proposed award of a contract may protest to the chief procurement officer. The protest shall be submitted in writing within seven (7) calendar days after the earlier of the notice of the award or intent to award the contract is issued. Any issues raised by the protesting party after the seven-day period to protest shall not be considered as part of the protest. Upon receipt of a protest of a solicitation, award, or proposed award of a contract, and a protest bond as required in subsection (d), a stay of the solicitation, award, or proposed award shall be in effect until the protest is resolved as provided under this section.
  3. The signature of an attorney or a protesting party on a protest constitutes a certification by the signer that the signer has read the protest and that to the best of the signer's knowledge, information, and belief, formed after reasonable inquiry, the protest is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not for any improper purpose, such as to harass, limit competition, or cause unnecessary delay or needless increase in the cost of the procurement or of the litigation. If a protest is signed in violation of this subsection (c), then the chief procurement officer or protest committee, upon motion or upon its own initiative, may impose upon the person who signed the protest, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties, including the affected state agency, the amount of the reasonable expenses, including reasonable attorneys' fees incurred from the filing of the protest.
  4. A protest under this section is not actionable unless the protesting party submits a protest bond contemporaneously with a protest. A protest bond shall be payable to the state in the amount of:
    1. Five percent (5%) of the lowest bid or cost proposal evaluated;
    2. Five percent (5%) of the maximum liability or estimated maximum liability provided in the solicitation;
    3. Five percent (5%) of the estimated maximum revenue, if the solicitation, award, or proposed award is for a contract in which the state receives revenue; or
    4. For no-cost contracts, an amount to be determined by the chief procurement officer.
  5. The protest bond shall be in form and substance acceptable to the state and shall be surrendered to the state after the protesting party has had an opportunity to oppose the payment of the protest bond and after a finding by the protest committee that:
    1. The protest was signed, before or after appeal to the chief procurement officer or protest committee, in violation of subsection (c);
    2. The protest has been brought or pursued in bad faith;
    3. The affected state agency has suffered damages resulting in a loss of funding, increased expenditures, or a disruption in services; the protest was filed in bad faith or in violation of subsection (c); and the protest was not upheld;
    4. The protest did not state on its face a valid basis for protest; or
    5. For any other reason approved by the protest committee.
  6. The chief procurement officer shall hold the protest bond for at least eleven (11) calendar days after the date of the final determination of the protest by the chief procurement officer. If a protesting party appeals the chief procurement officer's determination to the protest committee, then the chief procurement officer shall hold the protest bond until instructed by the protest committee to either keep the bond, as set forth in subsection (d), or return it to the protesting party.
  7. At the time of filing a notice of a protest of a solicitation, award, or proposed award of a contract in which the estimated maximum liability, estimated maximum revenue, or lowest evaluated cost proposal is less than one million dollars ($1,000,000), a minority-owned business, woman-owned business, Tennessee service-disabled veteran-owned business, business owned by persons with disabilities, or small business, as those terms are defined in § 12-3-1102, may submit a written petition for exemption from the protest bond requirement of subsection (d). The petition shall include clear evidence of status as a minority-owned business, woman-owned business, Tennessee service-disabled veteran-owned business, business owned by persons with disabilities, or small business. After receipt of the petition by the central procurement office, the chief procurement officer has seven (7) calendar days in which to make a determination. If an exemption from the protest bond requirement is granted, then the protest shall proceed as though the bond were posted. If the chief procurement officer denies an exemption from the protest bond requirement, then the protesting party shall post the protest bond with the chief procurement officer as required in subsection (d) within five (5) calendar days of the determination.
  8. The chief procurement officer, in consultation with the head of the state agency, has authority to resolve the protest. The chief procurement officer shall resolve the protest within sixty (60) calendar days after a protest is filed. The final determination of the chief procurement officer shall be made in writing and submitted to the protesting party, the protest committee, and the comptroller of the treasury. If the chief procurement officer fails to resolve the protest within sixty (60) calendar days, then the protesting party may request that the protest committee meet to consider the protest. The chief procurement officer shall provide the minutes of the protest proceedings to each committee member and to the comptroller of the treasury and shall post the final determination within fifteen (15) business days to the website of the central procurement office. A request for consideration before the protest committee shall be made in writing within seven (7) calendar days from the date of the chief procurement officer's final determination or within seven (7) calendar days following the chief procurement officer's failure to resolve the protest within sixty (60) calendar days after receipt of the protest.
  9. A stay made pursuant to subsection (b) shall not be lifted unless, after giving the protesting party an opportunity to be heard, the chief procurement officer or the protest committee makes a written determination that continuation of the procurement process or the award of the contract without further delay is necessary to protect the interests of the state.
  10. Nothing in this section requires a contested case hearing as set forth in the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. A protesting party shall exhaust all administrative remedies provided in this section prior to the initiation of any judicial review of a protest.
  11. If a protest is received by the state subsequent to a contract executed pursuant to a procurement process, then the Tennessee claims commission has exclusive jurisdiction to determine all monetary claims against the state, including, but not limited to, claims for the negligent deprivation of statutory rights pursuant to § 9-8-307(a)(1)(N).
  12. Protests appealed to the chancery court from the protest committee shall be by common law writ of certiorari. The scope of review in the proceedings shall be limited to the record made before the protest committee and shall involve only an inquiry into whether the protest committee exceeded its jurisdiction, followed an unlawful procedure, or acted illegally, fraudulently, or arbitrarily without material evidence to support its action.
  13. The procurement commission is authorized to promulgate necessary rules in accordance with the Uniform Administrative Procedures Act, as well as policies and procedures, to implement this section.

Acts 2013, ch. 403, § 33; 2015, ch. 272, § 2; 2017, ch. 485, § 3.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 5, §§ 12-3-50112-3-531 (Acts 1953, ch. 163, §§ 4-6, 27 (Williams, §§ 370.13-370.15, 370.36); modified; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; Acts 1975, ch. 202, § 1; T.C.A. (orig. ed.), §§ 12-304-12-308, 12-3-20412-3-208; Acts 1981, ch. 94, §§ 1-4; 1981, ch. 332, §§ 2-6; 1987, ch. 337, § 19; 2005, ch. 166, § 1;  2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19), concerning specification, was repealed and reenacted by Acts 2013, ch. 403, §§ 20-34, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which repealed and reenacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 6
Cost Principles and Audits

12-3-601. Cost or pricing data.

  1. A contractor who makes a contract with the state under this chapter shall, except as provided in subsection (c), submit cost or pricing data, and shall certify that, to the best of its knowledge and belief, the cost of pricing data submitted was accurate, complete, and current as of a mutually determined specified date prior to the date of:
    1. The pricing of any contract awarded pursuant to sole source procurement authority pursuant to § 12-3-504, where the total contract price is expected to exceed an amount established by the procurement commission; or
    2. The pricing of any change order or contract modification which is expected to exceed an amount established by the procurement commission.
  2. Any contract, change order, or contract modification under which a certificate is required shall contain a provision that the price to the state, including profit or fee, shall be adjusted to exclude any significant sums by which the state finds that such price was increased because the contractor-furnished cost or pricing data was inaccurate, incomplete, or not current as of the date agreed upon between the parties.
  3. The requirements of this section need not be applied to contracts when:
    1. The contract price is based on adequate price competition;
    2. The contract price is based on established catalogue prices or market prices;
    3. Contract prices are set by law or regulation; or
    4. It is determined in writing in accordance with regulations promulgated by the procurement commission that the requirements of this section may be waived, and the reasons for such waiver are stated in writing.

Acts 1981, ch. 332, § 18; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2013, ch. 403, § 35; T.C.A. § 12-3-301.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 6, §§ 12-3-60112-3-612 was transferred to title 12, ch. 3, part 9 by Acts 2013, ch. 403, §§ 50-58, and former title 12, ch. 3, part 3 was transferred to this part by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 6 to title 12, ch. 3, part 9 and transferred former title 12, ch. 3, part 3 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-602. Right to inspect plant or place of business and audit books and records.

  1. The state may, at reasonable times, and subject to regulation of the procurement commission, inspect the part of the plant or place of business of a contractor or any subcontractor which is related to the performance of any contract awarded or to be awarded by the state.
  2. The state may, at reasonable times and places, audit the books and records of any person who has submitted cost or pricing data to the extent that such books and records relate to such cost or pricing data. Any person who receives a contract, change order, or contract modification for which cost or pricing data are required, shall maintain such books and records that relate to such cost or pricing data for three (3) years from the date of final payment under the contract, unless a shorter period is otherwise authorized in writing.
  3. The state shall be entitled to audit the books and records of a contractor or any subcontractor under any contract or subcontract other than a firm fixed-price contract, to the extent that such books and records relate to the performance of such contract or subcontract. Such books and records shall be maintained by the contractor for a period of three (3) years from the date of final payment under the prime contract and by the subcontractor for a period of three (3) years from the date of final payment under the subcontract, unless a shorter period is otherwise authorized in writing. All contracts after July 1, 2013, shall include a provision with this statutory requirement and the provision cannot be amended or removed without the written consent of the comptroller of the treasury.

Acts 1981, ch. 332, § 19; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2013, ch. 403, § 36; T.C.A. § 12-3-302.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 6, §§ 12-3-60112-3-612 was transferred to title 12, ch. 3, part 9 by Acts 2013, ch. 403, §§ 50-58, and former title 12, ch. 3, part 3 was transferred to this part by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 6 to title 12, ch. 3, part 9 and transferred former title 12, ch. 3, part 3 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-603. Regulations regarding cost principles.

The chief procurement officer shall propose regulations for approval by the procurement commission setting forth cost principles which shall be used to determine the allowability of incurred costs for the purpose of reimbursing costs under contract provisions that provide for the reimbursement of costs; provided, that if a written determination is made by the chief procurement officer to justify such action, such cost principles may be modified by contract and reported to the comptroller of the treasury.

Acts 1981, ch. 332, § 20; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2013, ch. 403, § 37; T.C.A. § 12-3-303.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 6, §§ 12-3-60112-3-612 was transferred to title 12, ch. 3, part 9 by Acts 2013, ch. 403, §§ 50-58, and former title 12, ch. 3, part 3 was transferred to this part by Acts 2013, ch. 403, §§ 35-37, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 6 to title 12, ch. 3, part 9 and transferred former title 12, ch. 3, part 3 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 7
Procurement with Limitation of Liability

12-3-701. Procurement of goods and services with limitation of a contractor's liability.

    1. The chief procurement officer may authorize the procurement of goods and services with a limitation of a contractor's liability; provided, all respondents to a solicitation had an equal opportunity to request a limitation of liability.
    2. Unless authorized under this section by the chief procurement officer, no contract shall limit a contractor's liability to the state in an amount less than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract.
    3. The chief procurement officer may authorize a limitation of liability amount of less than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract if the chief procurement officer determines that the limitation of liability amount is necessary to prevent harm to the state from failing to obtain the goods or services sought or from obtaining the goods or services at a higher price.
    4. The chief procurement officer is authorized to approve a limitation of liability amount greater than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract if the chief procurement officer determines that an increase in the liability amount is necessary to protect the state's best interests.
    5. A solicitation that includes a limitation of liability amount of less than two (2) times the maximum liability, estimated liability, or maximum revenue of a contract shall be approved by the comptroller of the treasury before the limitation of liability amount may be included in a contract.
    6. A solicitation that does not have a maximum liability, estimated liability, or maximum revenue of a contract may have a limitation of liability if approved by the chief procurement officer and the comptroller of the treasury, and if all respondents to the solicitation had an equal opportunity to request a limitation of liability.
  1. A limitation of liability in a contract with the state shall not apply to:
    1. Liability for intellectual property or to any other liability, including, without limitation, indemnification obligations for infringement of third-party intellectual property rights;
    2. Claims covered by any specific provision in a contract with the state providing for liquidated damages; or
    3. Claims for intentional torts, criminal acts, fraudulent conduct, or acts or omissions that result in personal injuries or death.
  2. A limitation of liability included in a contract with the state shall not waive or limit the state's legal rights, sovereign immunity, or any other immunity from suit provided by law. Nothing in this section authorizes a cause of action against the state in any foreign jurisdiction.
  3. The procurement commission is authorized to promulgate rules, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, as well as policies and procedures, to implement this section.

Acts 2013, ch. 403, § 39; 2015, ch. 272, § 3.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 7, §§ 12-3-70112-3-704 (Acts 1953, ch. 163, §§ 20, 21 (Williams, §§ 370.29, 370.30); impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A. (orig. ed.), §§ 12-310-12-312,  12-3-103, 12-3-104, 12-3-105; Acts 1999, ch. 382, § 3;  2010, ch. 1098, § 2; 2011, ch. 295, § 5.), was transferred to title 12, ch. 3, part 10 by Acts 2013, ch. 403, §§  59-62, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-314 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 7 to title 12, ch. 3, part 10 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 8
Procurement Specifications and Scopes of Work

12-3-801. Specifications and scopes of work to permit open and competitive soliciting.

Whenever possible, all procurement specifications and scopes of work for goods and services to be purchased by the central procurement office or state agencies shall be worded or designed to permit open and competitive soliciting for the supplying of the goods or services to which they apply and all proprietary specifications and scopes of work shall be developed in accordance with rules of the central procurement office approved by the procurement commission.

Acts 2013, ch. 403, § 41.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-502 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-802. Adoption and application of standard specifications and scopes of work.

It is the duty of all state agencies to furnish to the chief procurement officer recommended specifications for all goods and services required and to be required by such state agencies. It is the duty of the chief procurement officer to canvas the recommended specifications and either approve or modify the standard specifications and scopes of work so recommended, subject to the policy and criteria of the procurement commission. All standard specifications and scopes of work shall remain on file in the central procurement office and shall be posted on the central procurement office's website. Each standard specification adopted for any good or service shall fit, insofar as possible, the requirements of the majority of the state agencies that use the same.

Acts 2013, ch. 403, § 42.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-501 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-803. Changes and additions to standard specifications.

After the approval and adoption of standard specifications in the manner provided in § 12-3-802, changes in, alterations to, modifications of, or additions to such standard specifications may be made in accordance with rules or policy of the central procurement office as approved by the procurement commission.

Acts 2013, ch. 403, § 43.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-503 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-804. Standard specifications preferred — Procedure for exceptions.

The chief procurement officer shall make use of standard specifications whenever practicable. Goods and services purchased without standard specifications shall be made in accordance with policies and criteria established by the procurement commission.

Acts 2013, ch. 403, § 44.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-504 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-805. Requisition of goods and services for which no standard adopted.

Whenever any department, institution, or agency of state government requisitions any goods or services for which a standard specification has not been adopted and approved, it shall be accompanied by or contain a recommended specification for such goods or services.

Acts 2013, ch. 403, § 45.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-505 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-806. Specifications for office goods — Biennial report.

  1. Whenever the chief procurement officer determines it to be advantageous, then specifications for office goods to be purchased by the state agencies shall be worded or designed so as to permit remanufactured office goods to be eligible for purchase. Such specifications may provide that remanufactured office materials, supplies and equipment be comparable in use and quality to new or currently manufactured office materials, supplies and equipment.
  2. The chief procurement officer shall prepare and submit to the governor, the speakers of the senate and the house of representatives, the chairs of the committees on government operations, and the procurement commission, a biennial report concerning the purchase of remanufactured office goods. Such report shall include the amount and frequency of such purchases, the cost savings realized by the state as a result of such purchases, and any remaining issues or areas for improvement.

Acts 2013, ch. 403, § 46.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-509 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-807. Standard specifications for lubricating motor oil — Authorized purchases — List of businesses distributing re-refined or recycled oil.

  1. Standard specifications adopted for lubricating motor oil for competitive solicitations to be let by the central procurement office, or by the appropriate purchasing agencies for any political subdivision of the state, shall be prescribed to include re-refined or recycled lubricating motor oil. Such specifications may exclude re-refined or recycled lubricating motor oil for circumstances or equipment that require specialized treatment, upon submission of documented evidence to the procurement commission or the appropriate purchasing agency of the political subdivision to substantiate each such claim for exclusion.
  2. Standard specifications adopted for lubricating motor oil for competitive solicitations to be let by any state agency or by any political subdivision of the state, shall be prescribed to include re-refined or recycled lubricating motor oil. Such specifications may exclude re-refined or recycled lubricating motor oil for circumstances or equipment that require specialized treatment, upon submission of documented evidence to the appropriate departmental, institutional or agency head to substantiate each such claim for exclusion. The requirements of this section shall not be construed to prohibit such state agency from purchasing and contracting for the purchase of such re-refined or recycled lubricating motor oil through the central procurement office or through the appropriate local purchasing agency.
  3. Any nonprofit corporation receiving funding from the state or contracting with any department, institution, or agency of state government or political subdivision of the state to provide services to the public, shall be authorized to purchase and contract for the purchase of such re-refined or recycled lubricating motor oil as provided in this section through the central procurement office under this chapter or through the appropriate local purchasing agency.
    1. The central procurement office shall compile and publish a list of business entities that commercially distribute re-refined or recycled lubricating motor oil that complies with the standard specifications adopted by the central procurement office pursuant to this section. The central procurement office shall make such list available to the various entities and political subdivisions of state government. The central procurement office shall mail such list to the chief executive of each county and each municipality.
    2. Prior to accepting competitive responses for a contract concerning lubricating motor oil, a county or municipality shall notify each business entity on the central procurement office's list of relevant facts concerning such proposed contract.

Acts 2013, ch. 403, § 47.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-531 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-808. Specifications for purchases of chemical products.

  1. Specifications for purchases of chemical products pursuant to this chapter shall require that the manufacturer of the chemical products create and maintain a material safety data sheet (MSDS) for such chemical products on the national MSDSSEARCH repository or the manufacturer's website so that the information can be accessed by means of the internet. A site operated by or on behalf of the manufacturer or a relevant trade association is acceptable so long as the information is freely accessible to the public. In lieu of posting a MSDS on MSDSSEARCH, a respondent shall include the manufacturer's universal resource locator (URL) for their MSDS in the response proposal or purchase order.
  2. The chief procurement officer shall post on the chief procurement officer's website the URL for MSDSSEARCH.

Acts 2013, ch. 403, § 48.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to part 11 by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-217 were transferred to this section.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to title 12, ch. 3, part 11 and enacted this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 9
Life Cycle Cost and Procurement Act of 1978

12-3-901. Short title.

This part shall be known as and may be cited as the “Life Cycle Cost and Procurement Act of 1978.”

Acts 1978, ch. 655, § 1; T.C.A., §§ 12-1101, 12-3-301; T.C.A. § 12-3-601; Acts 2013, ch. 403, § 50.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-902. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Energy efficiency standard” means a performance standard which prescribes the relationship of the energy use of a product to its useful output of services;
  2. “Major energy-consuming product” means any article so designated by the chief procurement officer in consultation with the central procurement office staff;
  3. “Political subdivision” means any city, town, municipality or county within the state; and
  4. “State procurement commission” means the commission established as set forth in title 4, chapter 56.

Acts 1978, ch. 655, § 3; T.C.A., §§ 12-1103, 12-3-303; Acts 2008, ch. 717, §§ 6, 7; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-603; Acts 2013, ch. 403, § 51.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-903. Policy of state.

It is hereby declared to be the policy of the state and its political subdivisions to use the life cycle costs of commodities as developed and disseminated by the federal government when purchased by the state or its political subdivisions where feasible as provided in this part.

Acts 1978, ch. 655, § 2; T.C.A., §§ 12-1102, 12-3-302; T.C.A. § 12-3-602; Acts 2013, ch. 403, § 52.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-904. Purchases to be made according to energy efficiency standards.

The chief procurement officer, to the maximum extent feasible, shall determine which commodities and products purchased by the state may be purchased according to energy efficiency standards based on rules and regulations, policies, and procedures approved by the procurement commission.

Acts 1978, ch. 655, § 4; T.C.A., §§ 12-1104, 12-3-304; Acts 1981, ch. 332, § 24; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-604; Acts 2013, ch. 403, § 53.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-905. Energy efficiency standards to be adopted — Equipment, appliances, lighting and heating and cooling products and systems to be Energy Star qualified — Future contracts — Guidelines.

  1. The chief procurement officer, in consultation with the central procurement office staff, shall adopt rules and regulations approved by the procurement commission relative to energy efficiency standards for major energy-consuming products to be procured by the state.
  2. When federal energy efficiency standards exist, the procurement commission, in consultation with the department of general services, shall, where feasible, adopt standards at least as stringent as the federal standards.
  3. For the purpose of implementing this part only, the central procurement office shall advise and consult with the chief procurement officer as an ex officio member.
  4. All future office equipment, appliances, lighting and heating and cooling products and systems purchased by and for state agencies shall be Energy Star qualified; provided, that such Energy Star qualified products and systems are commercially available.
  5. Existing purchasing contracts for all state agencies that do not provide as options Energy Star qualified office equipment, appliances, lighting and heating and cooling products and systems shall not be renewed upon expiration. All future contracts for state agencies shall provide as options Energy Star qualified office equipment, appliances, lighting and heating and cooling products and systems.
  6. The central procurement office, in consultation with the department of finance and administration, shall establish and publish guidelines providing direction to all state agencies regarding implementation of this section.

Acts 1978, ch. 655, § 5; T.C.A., §§ 12-1105, 12-3-305; Acts 2008, ch. 717, § 8; 2009, ch. 529, § 14; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-605; Acts 2013, ch. 403, § 54.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-906. Life cycle costs used in purchase of major energy-consuming products.

When energy efficiency standards are established, the procurement commission shall adopt rules requiring life cycle costs to be used by the chief procurement officer in contracting for major energy-consuming products. In determining life cycle costs, the procurement commission and the chief procurement officer may consider the acquisition cost of the product, the energy consumption and the projected cost of energy over the useful life of the product, and the anticipated resale or salvage value of the product.

Acts 1978, ch. 655, § 6; T.C.A., §§ 12-1106, 12-3-306; Acts 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-606; Acts 2013, ch. 403, § 55.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-907. Energy efficiency standards and life cycle costs to be used by political subdivisions.

Except when private act or state law prohibits, every political subdivision shall adopt and incorporate in its procurement policies energy efficiency standards and life cycle costing employed by the state in its procurement policies.

Acts 1978, ch. 655, § 7; T.C.A., §§ 12-1107, 12-3-307; T.C.A. § 12-3-607; Acts 2013, ch. 403, § 56.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Former § 12-3-907 (Acts 1971, ch. 425, § 4; T.C.A., §§ 12-345, 12-3-507), concerning the insurance of public buildings, the termination of existing policies and the disbursement of refunded premiums, was repealed by Acts 2003, ch. 212, § 7, effective July 1, 2003.

12-3-908. Action by aggrieved party to void executory contract for purchase of commodities.

  1. Executory contracts for the purchase of commodities by a political subdivision included in this part shall be voidable by the circuit courts upon the bringing of an action by an aggrieved party.
  2. The court may void the contract upon the showing by the aggrieved party that:
    1. The party is a seller of the commodity;
    2. The party is doing business in the state;
    3. The commodity to be sold has an energy efficiency rating and life cycle cost lower than the commodity contracted for by the purchaser;
    4. The purchaser is a political subdivision, and the standard for the commodity has been adopted for one (1) year by the procurement commission and has not been incorporated or adopted by the political subdivision; and
    5. The aggrieved party is ready, willing and able, without any other legal constraints, to sell the commodity to the purchaser.

Acts 1978, ch. 655, § 8; T.C.A., §§ 12-1108, 12-3-308; Acts 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-608; Acts 2013, ch. 403, § 57.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-909. Assistance in development of energy efficiency standards.

The chief procurement officer shall provide technical assistance to aid in the development or implementation of energy efficiency standards for procurement policies to political subdivisions that request assistance.

Acts 1978, ch. 655, § 9; T.C.A., §§ 12-1109, 12-3-309; T.C.A. § 12-3-609; Acts 2013, ch. 403, § 58.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-910. Cooperation among state and local agencies.

The appropriate state agencies shall cooperate and coordinate their efforts in the development and implementation of energy efficiency standards for procurement policies to the fullest extent possible with the Tennessee municipal league, the municipal technical advisory service, the county technical advisory service, the Tennessee county services association, and any other appropriate state or local agency or group.

Acts 1978, ch. 655, § 10; T.C.A., §§ 12-1110, 12-3-310; T.C.A. § 12-3-610; Acts 2013, ch. 403, § 58.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-911. Adoption of more stringent energy efficiency standards by political subdivisions.

Nothing in this part shall be construed to prohibit the adoption of an energy efficiency standard by a political subdivision when that standard has not been adopted by rules of the procurement commission, or where the standard proposed to be adopted by the political subdivision is more stringent than the standard adopted by the rules of the procurement commission.

Acts 1978, ch. 655, § 11; T.C.A., §§ 12-1111, 12-3-311; Acts 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-611; Acts 2013, ch. 403, § 58.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-912. Administrative procedures.

The Uniform Administrative Procedures Act, compiled in title 4, chapter 5, shall apply to this part.

Acts 1978, ch. 655, § 13; T.C.A., §§ 12-1113, 12-3-313; T.C.A. § 12-3-612; Acts 2013, ch. 403, § 58.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3; Acts 1971, ch. 425, §§ 1-3, 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-339 -12-344, 12-346,  12-3-501, 12-3-502, 12-3-504, 12-3-505, 12-3-506, 12-3-508; Acts 1980, ch. 464, § 1; 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2.), concerning purchasing insurance for the state and its agencies, was transferred to title 12, ch. 4, part 10, and former part 6, §§ 12-3-60112-3-612, was transferred to this part by Acts 2013, ch. 403, §§ 50-58, 82.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to title 12, ch. 4, part 10, and transferred former title 12, ch. 3, part 6 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 10
Permanent Register of Respondents

12-3-1001. Register — Prerequisite for respondents.

No person, firm or corporation shall be considered for contract award by the central procurement office under this chapter or under the rules and regulations established by the central procurement office, unless and until such person, firm, or corporation makes proper application to the central procurement office, as prescribed by rule or policy approved by the procurement commission, to be placed upon the permanent register of respondents. The central procurement office shall establish and maintain the register under and in compliance with the rules and regulations adopted by the procurement commission.

Acts 1953, ch. 163, § 20 (Williams, § 370.29); impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A. (orig. ed.), §§ 12-310, 12-3-103; Acts 2010, ch. 1098, § 2; 2011, ch. 295, § 5; T.C.A. § 12-3-701; Acts 2013, ch. 403, § 59.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 10, §§ 12-3-100112-3-1012, was transferred to title 12, ch. 3, part 12, and former title 12, ch. 3, part 7, §§ 12-3-70112-7-704, was transferred to this part by Acts 2013, ch. 403, §§ 59-62 and 68-70, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 10 to title 12, ch. 3, part 12, and transferred former title 12, ch. 3, part 7 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1002. Application for qualification as respondents.

All such applications by prospective respondents shall contain:

  1. A verified statement by the applicant disclosing and setting forth the types or classes of goods or services which the applicant desires to furnish and is able to furnish to the state or any state agency;
  2. A statement disclosing whether such applicant will furnish such goods or services as a manufacturer, dealer, agent, distributor, factor, or otherwise; and
  3. Such other information as may be required by the central procurement office to establish the ability of the applicant to perform any future undertaking for the state.

Acts 1953, ch. 163, § 20 (Williams, § 370.29); impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A. (orig. ed.), §§ 12-311, 12-3-104; T.C.A. § 12-3-702; Acts 2013, ch. 403, § 60.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 10, §§ 12-3-100112-3-1012 was transferred to title 12, ch. 3, part 12, and former title 12, ch. 3, part 7, §§ 12-3-70112-7-704, was transferred to this part by Acts 2013, ch. 403, §§ 59-62 and 68-70, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 10 to title 12, ch. 3, part 12, and transferred former title 12, ch. 3, part 7 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1003. Permanent mailing list of respondents.

The central procurement office shall establish and maintain from the permanent register of respondents a permanent mailing list, which shall include the names and mailing addresses of all interested respondents.

Acts 1953, ch. 163, § 21 (Williams, § 370.30); impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A. (orig. ed.), §§ 12-312, 12-3-105; T.C.A. § 12-3-703; Acts 2013, ch. 403, § 61.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 10, §§ 12-3-100112-3-1012 was transferred to title 12, ch. 3, part 12, and former title 12, ch. 3, part 7, §§ 12-3-70112-7-704, was transferred to this part by Acts 2013, ch. 403, §§ 59-62 and 68-70, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 10 to title 12, ch. 3, part 12 and transferred former title 12, ch. 3, part 7 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Attorney General Opinions. A municipality or county is not authorized to purchase a used or secondhand item from a private individual or entity without public advertisement and competitive bidding following a valuation of the item based on advertised prices for similar used and secondhand items listed for sale on websites.  OAG 13-44, 2013 Tenn. AG LEXIS 45 (6/10/13).

12-3-1004. Distributing and posting solicitations and responses electronically.

Notwithstanding any provision of law, rule or regulation to the contrary, the central procurement office may satisfy any requirement for mailing by distributing solicitations electronically and posting solicitations to the central procurement office internet website. In addition, the central procurement office may receive responses electronically. In order to assure the fullest possible participation of small businesses and minority-owned businesses, the central procurement office shall not require such small businesses and minority-owned businesses to receive or respond to solicitations electronically.

Acts 1999, ch. 382, § 3; T.C.A. § 12-3-704; Acts 2013, ch. 403, § 62.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 10, §§ 12-3-100112-3-1012 was transferred to title 12, ch. 3, part 12, and former title 12, ch. 3, part 7, §§ 12-3-70112-7-704, was transferred to this part by Acts 2013, ch. 403, §§ 59-62 and 68-70, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 10 to title 12, ch. 3, part 12 and transferred former title 12, ch. 3, part 7 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Part 11
Tennessee Minority-Owned, Woman-Owned, Service-Disabled Veteran-Owned, Business Owned by Persons with Disabilities, and Small Business Procurement and Contracting Act

12-3-1101. Short title.

Sections 12-3-1101 — 12-3-1108 shall be known and may be cited as the “Tennessee Minority-Owned, Woman-Owned, Service-Disabled Veteran-Owned, Business Owned by Persons with Disabilities, and Small Business Procurement and Contracting Act.”

Acts 1980, ch. 888, § 2; T.C.A., § 12-3-601; Acts 1988, ch. 818, § 1; 2004, ch. 569, § 1; T.C.A.§ 12-3-801; Acts 2013, ch. 403, § 64; 2017, ch. 485, § 4.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former title 12, ch. 3, part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Attorney General Opinions. Any racial classification used in awarding public contracts is subject to strict scrutiny and will only be upheld if the state or local government can establish that it is narrowly tailored to promote a compelling governmental interest. Courts have found that remedying the effects of past intentional discrimination is a compelling governmental interest.  OAG 12-92, 2012 Tenn. AG LEXIS 90 (10/3/12).

12-3-1102. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Business owned by persons with disabilities” means a business owned by a person with a disability that is a continuing, independent, for-profit business that performs a commercially useful function, and is at least fifty-one percent (51%) owned and controlled by one (1) or more persons with a disability; or, in the case of any publicly owned business, at least fifty-one percent (51%) of the stock of which is owned and controlled by one (1) or more persons with a disability and whose management and daily business operations are under the control of one (1) or more persons with a disability;
  2. “Department” means the department of general services;
  3. “Minority” means a person who is a citizen or lawful permanent resident of the United States and who is:
    1. African American, a person having origins in any of the black racial groups of Africa;
    2. Hispanic, a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race;
    3. Asian American, a person having origins in any of the original peoples of the Far East, Southeast Asia, the Indian subcontinent, or the Pacific Islands; or
    4. Native American, a person having origins in any of the original peoples of North America;
  4. “Minority-owned business” means a minority-owned business that is a continuing, independent, for profit business that performs a commercially useful function, and is at least fifty-one percent (51%) owned and controlled by one (1) or more minority individuals who are impeded from normal entry into the economic mainstream because of past practices of discrimination based on race or ethnic background;
  5. “Person with a disability” means an individual who meets at least one (1) of the following:
    1. Has been diagnosed as having a physical or mental disability resulting in marked and severe functional limitations that is expected to last no less than twelve (12) months;
    2. Is eligible to receive social security disability insurance (SSDI); or
    3. Is eligible to receive supplemental security income (SSI) and has a disability as defined in subdivision (5)(A);
  6. “Procurement and contracting” means the procurement of equipment, supplies, personal services, professional services, consulting services, construction contracts, and architectural and engineering services;
  7. “Service-disabled veteran” means any person who served honorably on active duty in the armed forces of the United States with at least a twenty percent (20%) disability that is service-connected, meaning that such disability was incurred or aggravated in the line of duty in the active military, naval or air service;
  8. “Service-disabled veteran-owned business” means a service-disabled veteran-owned business that is a continuing, independent, for profit business located in this state that performs a commercially useful function, and:
    1. Is at least fifty-one percent (51%) owned and controlled by one (1) or more service-disabled veterans;
    2. In the case of a business solely owned by one (1) service-disabled veteran and such person's spouse, is at least fifty percent (50%) owned and controlled by the service-disabled veteran; or
    3. In the case of any publicly owned business, at least fifty-one percent (51%) of the stock of which is owned and controlled by one (1) or more service-disabled veterans and whose management and daily business operations are under the control of one (1) or more service-disabled veterans;
  9. “Small business” means a business that is a continuing, independent, for profit business which performs a commercially useful function with residence in this state and has total gross receipts of not more than ten million dollars ($10,000,000) averaged over a three-year period or employs no more than ninety-nine (99) persons on a full-time basis;
  10. “State agency” means any department, office, institution of higher education, board, commission, or any other state agency that receives state funds; and
  11. “Woman-owned business” means a woman-owned business that is a continuing, independent, for profit business that performs a commercially useful function, and is at least fifty-one percent (51%) owned and controlled by one or more women; or, in the case of any publicly owned business, at least fifty-one percent (51%) of the stock of which is owned and controlled by one (1) or more women and whose management and daily business operations are under the control of one (1) or more women.

Acts 1980, ch. 888, § 4; T.C.A., § 12-3-602; Acts 1988, ch. 818, § 2; 1993, ch. 488, § 2; 1994, ch. 767, § 3; 1994, ch. 981, § 1; 2004, ch. 569, § 1; 2010, ch. 1098, § 2; 2010, ch. 1135, §§ 8, 9; 2010, ch. 1140, § 1; 2011, ch. 295, § 5; T.C.A. § 12-3-802; Acts 2013, ch. 403, § 65; 2017, ch. 485, § 5.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1103. Criteria and standards for eligibility.

  1. The procurement commission is authorized to adopt rules and regulations establishing criteria and standards for minority-owned businesses, woman-owned businesses, service-disabled veteran-owned businesses, businesses owned by persons with disabilities, and small businesses that are eligible to be included under this part. The rules and regulations must include methods by which eligibility can be verified and the business deemed certified.
  2. Such criteria and standards for eligibility shall include, but not be limited to, the number of employees, the total gross receipts or annual sales volume, including ownership and control.
  3. The maximum number of employees and the maximum dollar value of a small business under such rules and regulations may vary from industry to industry to the extent necessary to reflect the differing characteristics of any relevant factors of each particular industry.
  4. The governor's office of diversity business enterprises shall implement and administer a certification program and publish a directory of businesses certified as small businesses and diversity business enterprises.
  5. Any business desiring to be certified as a small business or diversity business enterprise shall make application to the governor's office of diversity business enterprises on an application as prescribed by such office.

Acts 1980, ch. 888, § 5; T.C.A., § 12-3-603; Acts 1988, ch. 818, § 3; 2004, ch. 569, § 1; 2010, ch. 1098, § 2; 2010, ch. 1135, § 10; 2010, ch. 1140, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-803; Acts 2013, ch. 403, § 66; 2017, ch. 485, §§ 6, 7.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1104. Active solicitation of bids and proposals required.

    1. All state agencies are required to actively solicit bids and proposals for equipment, supplies, personal services, professional services, consulting services, construction contracts, and architectural and engineering services from a minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business in order to strive to obtain a fair proportion of procurements from any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business.
    2. The amount of fair proportion shall be recommended annually by the governor's office of diversity business enterprises to the procurement commission for its review and approval. In annually determining the amount of fair proportion, the procurement commission shall establish, based on the recommendation of the governor's office of diversity business enterprises, a separate amount of fair proportion for each of the five (5) subcategories of businesses identified in § 12-3-1102: minority-owned businesses, woman-owned businesses, service-disabled veteran-owned businesses, businesses owned by persons with disabilities, and small businesses. Nothing in this part establishes any mandatory goal or quota with respect to minority-owned businesses, woman-owned businesses, service-disabled veteran-owned businesses, businesses owned by persons with disabilities, or small businesses.
  1. Procurements shall not be deemed to be from either minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business if the business with which such contracting is done is owned by or is under the controlling interest of another business which exceeds the limitations of § 12-3-1103. No minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business to which a contract has been awarded shall subcontract any portion of such contract with any business which exceeds the limitations of § 12-3-1103 and continue to maintain eligibility under this part without express approval of the chief procurement officer.
  2. As used in subsection (a), “actively solicit bids and proposals” may include contacting the governor's office of diversity business enterprises; reviewing compiled directories of a minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business; purchasing publication of notices within newspapers of general circulation or through electronic media; and inviting any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business to submit bids or to obtain information pertaining to the submission of bids.

Acts 1980, ch. 888, § 6; T.C.A., § 12-3-604; Acts 1988, ch. 818, § 4; 1993, ch. 521, § 2; 1994, ch. 981, § 4; 2004, ch. 569, § 1; 2010, ch. 1098, § 2; 2010, ch. 1140, §§ 3, 4; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-804; Acts 2013, ch. 403, § 67; 2017, ch. 485, §§ 8, 9.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1105. Design and implementation of procedures.

The departments of general services, finance and administration, transportation and economic and community development, and the state building commission shall cooperate with the governor's office of diversity business enterprises in the design and implementation of procedures for the identification of any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business, the selection for bid and proposal lists and the monitoring of procurements from minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business.

Acts 1980, ch. 888, § 7; T.C.A., § 12-3-605; Acts 1988, ch. 818, § 5; 2004, ch. 569, § 1; 2010, ch. 1140, § 5; T.C.A. § 12-3-805; Acts 2013, ch. 403, § 67; 2017, ch. 485, § 10.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1106. Diversity business program director — Annual goals for contracting with businesses.

  1. The chief procurement officer, as director of the governor's office of diversity business enterprises, shall appoint a diversity business program director to work in conjunction with the departments of general services, finance and administration, transportation, economic and community development and the state building commission to:
    1. Compile and maintain a comprehensive list of any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business by cooperating with both governmental and private sector entities in locating potential sources for various products and services;
    2. Assist any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business in complying with state procurement and contracting procedures and requirements;
    3. Examine requests from state agencies for the purchase of goods or services to help determine which solicitations may offer increased opportunities for any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business; and
    4. Make recommendations to appropriate state agencies for the simplification of procurement and contract specifications and terms in order to increase the opportunities of participation by any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business.
  2. All state agencies shall fully cooperate with the governor's office of diversity business enterprises and shall provide staff support and any other assistance upon request of the chief procurement officer. This cooperation specifically includes, but is not limited to, establishing and striving to achieve annual state agency level internal goals for minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business contracting. In establishing and striving to achieve these annual goals, each agency shall work closely with the governor's office of diversity business enterprises. Each agency shall provide as requested to the governor's office of diversity business enterprises periodic reports on upcoming procurement and contract opportunities and on the level of participation by minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business in that agency's procurements and contracts.

Acts 1980, ch. 888, § 9; T.C.A., § 12-3-607; Acts 1988, ch. 818, § 7; 2004, ch. 569, § 1; 2010, ch. 1098, § 2; 2010, ch. 1140, § 7; 2011, ch. 295, § 5; T.C.A. § 12-3-807; Acts 2013, ch. 403, § 67; 2017, ch. 485, § 11.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1107. Annual report.

  1. The chief procurement officer shall annually report, on or before each December 31, to the governor and to each member of the general assembly concerning the awarding of purchases to minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business and the total value of awards made during the preceding fiscal year under this part. The chief procurement officer shall also include in such annual report:
    1. The number of solicitations of minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business by category;
    2. The number of responses received from minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business by category;
    3. The dollar amount of purchases awarded to such businesses by category; and
    4. The total dollar amount of purchases awarded to all businesses in the state.
  2. In annually reporting the information on any minority-owned business, woman-owned business, service-disabled veteran-owned business, business owned by persons with disabilities, or small business, based upon information provided by vendors, the chief procurement officer shall, in a separate section of the report, indicate the number of businesses solicited within each of the five (5) subcategories enumerated within § 12-3-1102, the number of responses received from each of the five (5) subcategories enumerated within § 12-3-1102, and the total number and dollar amount of all purchases awarded within each of the five (5) subcategories enumerated within § 12-3-1102. For purposes of evaluation, the report shall also indicate the total number and dollar amount of all purchases by all state agencies during the reporting period.

Acts 1980, ch. 888, § 10; T.C.A., § 12-3-608; Acts 1988, ch. 818, § 8; 1994, ch. 981, § 5; 2004, ch. 569, § 1; 2010, ch. 1098, § 2; 2010, ch. 1140, § 8; 2011, ch. 295, § 5; T.C.A. § 12-3-808; Acts 2013, ch. 403, § 67; 2017, ch. 485, §§ 12, 13, 17.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Reporting requirement satisfied by notice to general assembly members of publication of report, § 3-1-114.

12-3-1108. Preference to in-state meat producers by departments and agencies.

All departments, agencies and institutions of state government that purchase meat, meat food products or meat by-products, as defined in § 53-7-202, with state funds shall give preference to producers located within the boundaries of this state when awarding contracts or agreements for the purchase of such meat or meat products, so long as the terms, conditions and quality associated with the in-state producers' proposals are equal to those obtainable from producers located elsewhere.

Acts 1975, ch. 20, § 1; T.C.A., §§ 12-348, 12-3-121; T.C.A. § 12-3-809; Acts 2013, ch. 403, § 67.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1109. Preference to in-state meat producers by schools.

All public education institutions using state funds to purchase meat, meat food products, or meat by-products, as defined in § 53-7-202, shall give preference in awarding contracts or agreements for the purchase of such meat or meat products to producers located within the boundaries of this state so long as the terms, conditions and quality associated with the in-state producers' proposals are equal to those obtainable from producers located elsewhere.

Acts 1975, ch. 20, § 2; T.C.A., §§ 12-349, 12-3-122; T.C.A. § 12-3-810; Acts 2013, ch. 403, § 67.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1110. Preference to in-state coal mining companies.

Notwithstanding any provision of law to the contrary, all state agencies, departments, boards, commissions, institutions, institutions of higher education, schools and all other state entities shall purchase coal mined in this state if such coal is available at a delivered price that is equal to or less than coal mined outside the state.

Acts 1983, ch. 225, § 1; T.C.A. § 12-3-811; Acts 2013, ch. 403, § 67.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1111. Preference to in-state natural gas producers.

Notwithstanding any provision of law to the contrary, all state agencies, departments, boards, commissions, institutions, institutions of higher education, schools and all other state entities shall purchase natural gas produced from wells located in the state if such gas is available at a price which is equal to or less than natural gas produced from wells located outside the state, transportation costs taken into account.

Acts 1983, ch. 247, § 1; T.C.A. § 12-3-812; Acts 2013, ch. 403, § 67.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1112. Governor's office of diversity business enterprises — Purpose — Small business liaison representative — Study of opportunities.

  1. There is created the governor's office of diversity business enterprises to administer this part. All positions, resources and functions of the governor's office of diversity business enterprises existing within the department of general services shall be transferred to the procurement office on October 1, 2011.
  2. The office of diversity business enterprises shall assist small businesses and businesses owned by minorities, women, service-disabled veterans, and persons with disabilities to develop into viable, successful businesses. This work shall include assisting these businesses to compete successfully for the state's expenditures for goods and services.
  3. Each state agency shall designate a staff person as a small business liaison representative to the governor's office of diversity business enterprises to coordinate the agency's efforts to utilize small businesses and diversity business enterprises in their procurement and contracting opportunities.
  4. After appointment of the chief procurement officer, such officer, in consultation with the department of general services and the department of economic and community development, shall study opportunities available to small businesses and diversity business enterprises in state contracting and the potential effect of enhancing such opportunities through utilization of monetary allowances. It is the legislative intent that such study shall, insofar as possible, assess the impact on small businesses and diversity business enterprises that would have occurred if monetary allowances of varying amounts had been available. Further, it is the legislative intent that such study shall estimate the costs to the state that would have resulted from such monetary allowances.
  5. The small business advocate within the office of the comptroller of the treasury shall be qualified by training or relevant and recent experience in administering programs to encourage and enhance economic opportunities for minority-owned businesses, woman-owned businesses, service-disabled veteran-owned businesses, businesses owned by persons with disabilities, and small businesses. At least annually, the advocate shall attend training or other specialized instruction to enhance understanding of the particular obstacles impeding minority-owned businesses, woman-owned businesses, service-disabled veteran-owned businesses, businesses owned by persons with disabilities, and small businesses from normal entry into the economic mainstream. The training shall be provided by the governor's office of diversity business enterprises in the normal course of business as part of the regular training program for state agencies. When the advocate position is filled by reassigning a current employee, such employee shall receive the requisite training prior to assuming advocate duties.

Acts 2010, ch. 1135, §§ 7, 11, 13; T.C.A. § 12-3-813; Acts 2013, ch. 403, § 67; 2017, ch. 485, §§ 14-16.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 8 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-3-1113. Preference to goods produced or grown in this state, including agricultural products.

  1. Notwithstanding any other law to the contrary, all departments and agencies making purchases of goods, including agricultural products, shall give preference to those produced or grown in this state or offered by Tennessee respondents as follows:
    1. Goods produced in this state or offered by Tennessee respondents shall be given equal preference if the cost to the state and quality are equal; and
    2. Agricultural products grown in this state shall be given first preference and agricultural products offered by Tennessee respondents shall be given second preference, if the cost to the state and quality are equal.
  2. If goods, including agricultural products, produced or grown in this state or offered by Tennessee respondents are not equal in cost and quality to other products, then goods, including agricultural products, produced or grown in other states of the United States shall be given preference over foreign products if the cost to the state and quality are equal.
  3. As used in this section:
    1. “Agricultural products” includes textiles and other similar products; and
    2. “Tennessee respondents” means a business:
      1. Incorporated in this state;
      2. That has its principal place of business in this state; or
      3. That has an established physical presence in this state.
  4. The commission and all state agencies making purchases of vegetation for landscaping purposes, including plants, shall give preference to Tennessee vegetation native to the region if the cost to the state is not greater and the quality is not inferior.
  5. All departments and agencies procuring services shall give preference to services offered by a Tennessee respondent if:
    1. The services meet state requirements regarding the service to be performed and expected quality; and
    2. The cost of the service does not exceed the cost of other similar services of similar expected quality that are not offered by a Tennessee respondent.

Acts 2013, ch. 403, § 67.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 11, §§ 12-3-110112-3-1103 (Acts 1999, ch. 382, § 5; 2010, ch. 1098, § 2; 2011, ch. 295, § 5), concerning the advisory committee for the use of the internet, was repealed by Act 2013, ch. 272, § 1, effective April 25, 2013; and former part 8, §§ 12-3-80112-3-813, was transferred to this part by Acts 2013, ch. 403, §§ 64-67, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-121 were transferred to this section.

Part 12
Local Governments

12-3-1201. Purchases for local governmental units.

  1. The central procurement office may, upon request, purchase goods and services for any county, city, municipality, special district, school district, other local governmental unit of the state, or quasi-governmental entity organized under a city, municipality, or county. The purchases shall be made on the same terms and under the same rules and regulations as now provided for the purchase of goods and services by the central procurement office. The cost of any purchase made pursuant to this section shall be borne by the local governmental unit concerned. The central procurement office has the power to promulgate all rules and regulations necessary for the operation of this section, subject to the approval of the procurement commission.
  2. It is the intent of this section that the central procurement office advise local governments of the benefits to be derived from the use of the purchasing procedures authorized herein. Where any local or private act, charter, or general law requires that a local governmental unit purchase by competitive procurement method, the local unit of government may, notwithstanding the local or private act, charter, or general law, purchase, without public advertisement or competitive soliciting, under contracts or price agreements entered into by the central procurement office.
  3. To the extent permitted by federal law or regulations, local governments may make purchases of goods, except motor vehicles other than those manufactured for a special purpose as defined in § 12-3-1208, or services included in federal general service administration contracts or other applicable federal open purchase contracts either directly or through the appropriate state agency; provided, that no purchase under this section shall be made at a price higher than that which is contained in the contract between the general services administration and the vendor affected.
    1. Except as provided in subdivision (d)(5), when any local or private act, charter, or general law requires that a local governmental unit purchase by competitive soliciting, the local unit of government may, notwithstanding the local or private act, charter, or general law, purchase, without public advertisement or competitive soliciting, any item from local sources if such item is available for purchase under contracts or price agreements entered into by the central procurement office, and such item is available at the same or lower cost from such local sources. This subsection (d) shall apply only in cases where the local governmental entity is not permitted to purchase from an existing contract established by the central procurement office. Any item purchased locally must be of equal or better specifications than the item under the competitive contract.
    2. The legislative body of a county by resolution or a municipality by ordinance may establish and adopt a program to encourage participation in government purchasing programs by minority-owned businesses. Such programs may include set-aside provisions which conform to federal law.
    3. This subsection (d) shall be permissive relative to sellers of motor vehicles.
    4. This subsection (d) shall have no effect unless it is approved by a two-thirds (2/3) vote of the local legislative body and such approval is filed with the comptroller of the treasury.
    5. This subsection (d) does not apply in a county having a metropolitan form of government and a population in excess of five hundred thousand (500,000), or in a county having a population in excess of eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census.

Acts 1970, ch. 410, §§ 1, 2; 1972, ch. 571, § 1; modified; T.C.A., §§ 12-338, 12-3-401; Acts 1985, ch. 400, § 1; 1997, ch. 246, § 1; 1997, ch. 335, §§ 1-6; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; T.C.A. § 12-3-1001; Acts 2013, ch. 403, § 68; 2018, ch. 724, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

For tables of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Law Reviews.

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

Attorney General Opinions. Applicability of statutes pertaining to public purchasing and public contracting, and governing general contractors, to housing authorities established by municipalities or counties pursuant to T.C.A. §§ 13-20-101 et seq., OAG 05-170, 2005 Tenn. AG LEXIS 172 (11/21/05).

12-3-1202. Purchase of secondhand articles or equipment by municipalities or counties.

  1. Notwithstanding any charter, private act, or general law requirements, any municipality or any county may purchase used or secondhand articles consisting of goods, equipment, materials, supplies, or commodities from any federal, state, or local governmental unit or agency without public advertisement and competitive soliciting.
  2. Notwithstanding any charter, private act, or general law requirements, any municipality or any county may purchase used or secondhand articles consisting of goods, equipment, materials, supplies, or commodities from any private individual or entity without public advertisement and competitive soliciting as long as the purchasing government documents the general range of value of the purchased item through a listing in a nationally recognized publication or through an appraisal by a licensed appraiser, and the price is not more than five percent (5%) higher than the highest value of the documented range.

Acts 1984, ch. 765, § 7; 2007, ch. 383, § 1; 2010, ch. 955, § 1; T.C.A. § 12-3-1003; Acts 2013, ch. 403, § 69.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

12-3-1203. Purchases for other local governmental units.

    1. Any municipality, county, utility district, or other local governmental unit of the state may, upon request, purchase supplies, equipment, and services for any other municipality, county, utility district, or other local governmental unit.
    2. The purchases shall be made on the same terms and under the same rules and regulations as regular purchases of the purchasing entity.
    3. The cost of the purchase shall be borne by the local government for which the purchase was made.
    4. Where the local government making the request is required to advertise and receive bids, it shall be sufficient for those purposes that the purchasing entity comply only with its own purchasing requirements.
    1. Any local education agency (LEA) may purchase equipment under the same terms of a legal bid initiated by any other LEA in Tennessee.
      1. Any LEA may purchase directly from a vendor the same equipment at the same price and under the same terms as provided in a contract for such equipment entered into by any other LEA.
      2. Any LEA which purchases equipment under this subsection (b) shall directly handle payment, refunds, returns, and any other communications or requirements involved in the purchase of the equipment without involving the LEA which originated the contract. The originating LEA shall have no liability or responsibility for any purchases made by another LEA under a contract which the originating LEA negotiated and consummated.
    1. Any municipality, county, utility district, or other local governmental unit of this state may purchase supplies, goods, equipment, and services under contracts or price agreements entered into by any other local governmental unit of this state. Such purchases shall be made on the same terms and under the same rules and regulations as regular purchases of the purchasing entity. Any local governmental unit that purchases supplies, goods, equipment, or services under this section shall directly handle payment, refunds, returns, and any other communication or requirements involved in the purchase without involving the local governmental unit that originated the contract. The originating local governmental unit shall have no liability or responsibility for any purchases made by another local governmental unit under a contract that the originating local governmental unit negotiated and consummated. Where any local or private act, charter, or general law requires that a local governmental unit purchase by competitive bidding, the local governmental unit may, notwithstanding the local or private act, charter, or general law, purchase without public advertisement or competitive bidding in accordance with this section.
    2. This subsection (c) shall not apply to:
      1. Purchases of new or unused motor vehicles, unless the motor vehicles are manufactured for a special purpose as defined in § 12-3-1208; and
      2. Purchases related to any transportation infrastructure project, including, but not limited to, projects for the construction or improvement of streets, highways, bridges, tunnels, or any roadway related facility.

Acts 1984, ch. 765, § 7; 2003, ch. 228, § 1; 2010, ch. 1067, § 2; 2012, ch. 600, §§ 1-3; 2013, ch. 329, § 1; T.C.A. § 12-3-1004; Acts 2013, ch. 403, § 68.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

Attorney General Opinions. It would be possible for a local sheriff's office and a school board to combine their food procurement bids in order to take advantage of the higher total purchase amount so that both local governmental entities save money.  OAG 15-31, 2015 Tenn. AG LEXIS 31 (4/2/15).

12-3-1204. Competitive solicitation.

  1. As used in this section, “municipality,” “county,” and “metropolitan government” apply only to municipalities, counties, and metropolitan governments with a population greater than one hundred fifty thousand (150,000), according to the 1990 federal census or any subsequent federal census.
  2. In any municipality, county, or metropolitan government, notwithstanding any charter provision, private act, or other provision of law, a purchase, lease, or lease-purchase must be preceded by competitive solicitation only if the purchase, lease, or lease-purchase exceeds ten thousand dollars ($10,000).
  3. When the charter of a metropolitan government requires that purchases be made on the basis of competitive bidding, notwithstanding subsection (b), “competitive soliciting” for the metropolitan government means:

    Dollar Amount of Purchase    Requirement

    $1,000 to $3,999.99 Three (3) verbal (including telephone)   quotations when possible.

    $4,000 to $9,999.99 Three (3) written (including fax)   quotations when possible.

    $10,000 and above Competitive sealed bids or proposals for   nonemergency and nonproprietary   product purchases.

  4. Any municipality, county, or metropolitan government may retain present competitive soliciting requirements and may retain the right to establish, in accordance with charter amendment or private act, whichever is applicable, different dollar amount thresholds and different requirements for competitive bids and competitive proposals from those established in this section.
  5. Nothing in this section shall be deemed to expressly or impliedly repeal §  7-52-117, or any part of that section.
  6. This section shall not supersede or be construed to supersede § 12-3-1201.

Acts 1995, ch. 176, § 1; T.C.A. § 12-3-1007; Acts 2013, ch. 403, § 70.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

For tables of populations of Tennessee municipalities and  U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

12-3-1205. Cooperative purchasing agreements.

  1. Any municipality, county, utility district, or other local government of the state may participate in, sponsor, conduct or administer a cooperative purchasing agreement for the procurement of any supplies, services or construction with one (1) or more other local governments in accordance with an agreement entered into between the participants. Such cooperative purchasing may include, but is not limited to, joint or multi-party contracts between local governments. Where the participants in a joint or multi-party contract are required to advertise and receive bids, it shall be sufficient for those purposes that the purchasing entity comply only with its own purchasing requirements.
    1. Notwithstanding any other law to the contrary, any municipality, county, utility district, or other local government of the state may participate in, sponsor, conduct, or administer a cooperative purchasing agreement for the procurement of any goods, supplies, services, or equipment with one (1) or more other governmental entities outside this state, to the extent the laws of the other state permit the joint exercise of purchasing authority, or with an agency of the United States, to the extent federal law permits the joint exercise of purchasing authority, in accordance with an agreement entered into between or among the participants; provided, such goods, supplies, services, or equipment were procured in a manner that constitutes competitive bidding and were advertised, evaluated, and awarded by a governmental entity and made available for use by other governmental entities.
    2. A municipality, county, utility district, or other local government of the state may participate in a master agreement by adopting a resolution accepting the terms of the master agreement. If a participant in a joint or multi-party agreement is required to advertise and receive bids, then it will be deemed sufficient for those purposes that the purchasing entity or the entity that procured the bid complied with its own purchasing requirements. The participant shall acquire and maintain documentation that the purchasing entity or entities that procured the bid complied with its own purchasing requirements.
    3. The powers conferred by this section are in addition and supplemental to the powers conferred by any other law, and any limitations imposed by this section shall not affect powers conferred by any other law.
    4. This subsection (b) does not apply to:
      1. Purchases of new or unused motor vehicles, unless the motor vehicles are manufactured for a special purpose as defined in § 12-3-1208. As used in this subdivision (b)(4)(A), “motor vehicle” does not include a farm tractor, mower, earth-moving machinery, construction machinery, or other similar machinery or equipment;
      2. Purchases of construction, engineering, or architectural services, or construction materials. As used in this subdivision (b)(4)(B), “construction materials” does not include materials used in the operation of a municipal utility system, including, but not limited to, transformers, conductors, insulators, poles, cross-arms, anchors, pipes, valves, meters, or other components or parts of a utility system, whether purchased in accordance with a purchasing agreement with the Tennessee Valley authority or another purchasing arrangement; or
      3. Purchases of fuel, fuel products, and lubricating oils.
    5. The authorization for exercising joint purchasing authority with an agency of the United States under subdivision (b)(1) does not include the authority to purchase construction machinery, including, but not limited to, bulldozers and other heavy equipment utilized in construction or on construction sites.
  2. The chief procurement officer may collect information from municipalities, counties, utility districts, or any other local government unit concerning the type, cost, quality, and quantity of commonly used goods, supplies, services, or equipment being procured under cooperative purchasing agreements. The chief procurement officer may make available all such information to any municipality, county, utility district, or other local government unit upon request.

Acts 1999, ch. 382, § 4; 2010, ch. 1067, § 1; 2011, ch. 152, § 1; 2013, ch. 329, § 3; T.C.A. § 12-3-1009; Acts 2013, ch. 403, § 70; 2016, ch. 935, §§ 1, 2; 2018, ch. 574, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

Acts 2016, ch. 935, § 3 provided that the act, which amended this section, shall apply to cooperative purchasing agreements entered into on or after July 1, 2016.

12-3-1206. Transfer of assets for fire protection.

  1. Notwithstanding any other law, a county, municipality and metropolitan government may transfer the ownership of assets for fire protection purchased through or with the proceeds of federal, state or local grants to volunteer fire departments within such county, municipality or metropolitan area; provided, that such volunteer fire departments are registered as nonprofit organizations with the office of the secretary of state.
  2. This section shall have no effect in a county, municipality or metropolitan area unless it is approved by the appropriate legislative body.

Acts 2000, ch. 604, § 1; T.C.A. § 12-3-1010; Acts 2013, ch. 403, § 70.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

Attorney General Opinions. Donation of assets to volunteer fire service, OAG 07-087, 2007 Tenn. AG LEXIS 134 (6/5/07).

12-3-1207. Authorization to use competitive sealed proposals.

  1. Any municipality may use competitive sealed proposals to purchase goods and services rather than competitive sealed bids when the municipal governing body, acting under the restrictions and requirements of this section and a procurement code adopted by the governing body, determines that the use of competitive sealed bidding is either not practicable or not advantageous to the municipality. In actual emergencies caused by unforeseen circumstances, such as natural or human-made disasters, delays by contractors, delays in transportation, or unanticipated volume of work, purchases through competitive sealed proposals may be made without specific authorizing action of the municipal governing body. A record of any emergency purchase shall be made by the person or body authorizing the emergency purchase, specifying the amount paid, the items and services purchased, from whom the purchase was made, and the nature of the emergency. A report of the emergency purchase through competitive sealed proposals containing all relevant information shall be made as soon as possible by the person or body authorizing the purchase to the municipal governing body.
  2. In the decision to use competitive sealed proposals, the governing body shall follow a procurement code, which shall be adopted by the municipality by ordinance before purchases may be made under this section. The code shall contain criteria for purchasing through competitive sealed proposals and procedures consistent with this section.
  3. The procurement code shall provide that competitive sealed proposals may be used only when qualifications, experience, or competence are more important than price in making the purchase and:
    1. When there is more than one (1) solution to a purchasing issue and the competitive sealed proposals will assist in choosing the best solution; or
    2. When there is no readily identifiable solution to a purchasing issue and the competitive sealed proposals will assist in identifying one (1) or more solutions.
  4. The municipal technical advisory service of the University of Tennessee's institute for public service, in conjunction with the comptroller of the treasury's office, shall develop a model procurement code that may be adopted by any municipality to guide the governing body and purchasing agent in making purchases through requests for competitive sealed proposals. The model procurement code shall contain provisions allowing an aggrieved respondent to protest the intended award to another respondent if the protest is filed within seven (7) calendar days after the intended award is announced. The protest shall be filed with and decided by the municipal governing body.
  5. Adequate public notice of the request for competitive sealed proposals shall be given in the same manner provided for competitive sealed bids.
  6. Competitive sealed proposals shall be opened in a manner that avoids disclosure of contents to competing respondents during the negotiation. The proposals shall be open for public inspection after the intent to award the contract to a particular respondent is announced.
  7. The request for competitive sealed proposals shall state the relative importance of price and other evaluation factors.
  8. As provided in the request for competitive sealed proposals and in the procurement code, discussions may be conducted for clarification to assure full understanding of, and responsiveness to, the solicitation requirements with responsible respondents who submit proposals determined by the purchasing agent to be reasonably susceptible of being selected. These respondents shall be accorded fair and equal treatment with respect to any opportunity for discussion and revision of proposals, and revisions may be permitted after submission and before the intent to award to a particular respondent is announced to obtain the best and final offers. In conducting discussions, the purchasing agent and other municipal personnel may make no disclosure to any respondent of any information derived from proposals submitted by competing respondents.
  9. The award shall be made to the responsible respondent whose proposal the governing body determines is the most advantageous to the municipality, taking into consideration price and the evaluation factors set out in the request for competitive sealed proposals. No other factor may be used in the evaluation. The purchasing agent shall place in the contract file a statement containing the basis on which the award was made.
    1. A governmental utility board shall have the same rights and be subject to the same restrictions and requirements as apply to a municipal governing body under this section. The governmental utility board shall adopt a procurement code by resolution before purchases may be made under this section.
    2. For purposes of subdivision (j)(1), a “governmental utility board” includes a board of public utilities created under title 7, chapter 52, and shall also include any other county, metropolitan government or municipal utility board or supervisory body created by private act, home rule charter or local ordinance or resolution.
    3. Nothing in this subsection (j) shall otherwise modify or impair any limitations on the contracting power of the governmental utility boards as the powers may exist under applicable law.

Acts 2007, ch. 583, § 1; T.C.A. § 12-3-1011; Acts 2013, ch. 403, § 68.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

12-3-1208. Reverse auctions by local governmental units.

    1. As used in this section, “local governmental unit” means and includes a county, city, municipality, special district, utility district, school district, authority or any other entity created or appointed by a local governmental unit of the state.
    2. For a purchase of goods or services, any local governmental unit may purchase goods or services through a competitive reverse auction process that allows offerors to bid on specified goods or services electronically and adjust bid pricing during a specified time period.
    3. This section shall not apply to:
      1. Construction services, other than those relating to maintenance, repairs and renovations, the cost of which is less than twenty-five thousand dollars ($25,000);
      2. Architectural or engineering services;
      3. New or unused motor vehicles, unless the motor vehicles are manufactured for a special purpose. “Manufactured for a special purpose” includes, but is not limited to, school buses, buses with capacity exceeding twenty-two (22) passengers used to provide public transportation, garbage trucks, fire trucks or ambulances; or
      4. New or unused construction equipment.
  1. The purchasing agent of the local governmental unit shall solicit bids by public notice inserted at least once in a newspaper of countywide circulation five (5) calendar days prior to the first day bids can be submitted. If the county in question has no newspaper with countywide circulation, the purchasing agent shall post notices on a public bulletin board in the county courthouse. The purchasing agent may also solicit bid requests by mail to prospective bidders or by distributing invitations to bid electronically via email or by posting on the entity's website. All invitations to bid shall include a general description of the goods or services to be purchased and information related to the time and place of opening bids.
  2. In order to assure the fullest possible participation of small businesses and minority-owned businesses, a local governmental unit shall provide a mechanism either through the local governmental unit itself or through a third party, if a third party source is utilized to conduct the reverse auction, to facilitate participation of small and minority-owned businesses in a reverse auction.
  3. All bid responses received shall be made available publicly at the time and place identified in the invitation to bid. An award shall be made to the offeror determined to be the lowest responsible and responsive bidder at the close of the specified bid period. Each bid, with the name and address of the bidder, shall be recorded and the names of the bidders, the amounts of their bids and the name of the successful bidder shall, after the award, be open to public inspection. All bids should be preserved for a period of sixty (60) months.
    1. Prior to the initial utilization of a reverse auction, the local governmental unit shall file a plan with the comptroller of the treasury. The plan shall indicate the technology to be utilized, whether a third party source will be utilized to conduct a reverse auction or auctions, a description of policies and procedures related to the implementation of the reverse auction process and documentation of internal controls that will ensure the integrity of the process.
    2. The plan shall also indicate whether such a process will be implemented within the existing operating resources of the local governmental unit or indicate prior approval of the governing body of the local governmental unit if additional operating resources are needed.

Acts 2009, ch. 399, § 1; 2013, ch. 329, § 6; T.C.A. § 12-3-1012; Acts 2013, ch. 403, § 70.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

12-3-1209. Requirements of professional persons or groups providing legal services, fiscal agent, financial advisor, advisory or consultant services covered by this part.

  1. Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of the state, for legal services, fiscal agent, financial advisor or advisory services, educational consultant services, and similar services by professional persons or groups of high ethical standards, shall not be based upon competitive solicitations, but shall be awarded on the basis of recognized competence and integrity. The prohibition against competitive soliciting in this section shall not prohibit any entity enumerated from interviewing eligible persons or entities to determine the capabilities of such persons or entities.
  2. Any person providing fiscal agent, financial advisor or advisory services to any county, city, metropolitan government, town, utility district or other municipal or public corporation shall perform such services only pursuant to a written contract, specifying the services to be rendered, the costs therefore, and the expenses to be covered under such contract.
  3. Any person providing fiscal agent, financial advisor or advisory services to any county, city, metropolitan government, town, utility district or other municipal or public corporation of this state who desires to bid, directly or indirectly, on any bonds, notes or other obligations of such entity sold pursuant to public, competitive sale shall receive in writing prior to the sale the permission of such entity to respond either directly or indirectly on the obligations.
  4. For the purposes of this section, “providing fiscal agent, financial advisor or advisory services” means a relationship that exists when a person renders or enters into an agreement to render financial advisory or consultant services to or on behalf of an issuer with respect to a new issue or issues of municipal securities, including advice with respect to the structure, timing, terms and other similar matters concerning such issue or issues, for a fee or other compensation or in expectation of such compensation for the rendering of such services. Notwithstanding the foregoing provisions of this subsection (d), a financial advisory relationship shall not be deemed to exist when, in the course of acting as an underwriter, a municipal securities dealer renders advice to an issuer, including advice with respect to the structure, timing, terms and other similar matters concerning a new issue of municipal securities.
    1. Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of the state for information management services, including, but not limited to, computer program analyst services shall, upon approval by a two-thirds (2/3) vote of the governing body, be procured through a request for proposals process. The request for proposals process will invite prospective respondents to participate and will indicate the service requirements and the factors used for evaluating the proposals. Such factors shall include cost, the vendor's qualifications and any additional factor or factors deemed relevant by the procuring entity for the procurement of the service. Cost shall not be the sole criterion for evaluation. The contract for such services will be awarded to the best evaluated, responsive respondent.
    2. This subsection (e) shall only apply in counties having a population of not less than four hundred seventy thousand (470,000) nor more than four hundred eighty thousand (480,000), according to the 1980 federal census or any subsequent federal census.

Acts 2013, ch. 403, § 70.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-106 were transferred to this section.

For tables of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Attorney General Opinions. Under T.C.A. §§ 29-20-407 and 12-3-1209, a local governmental entity may only purchase liability insurance without the necessity of any legally required public bidding if the liability insurance is purchased through a plan authorized and approved by any organization of governmental entities representing cities and counties.  OAG 13-65, 2013 Tenn. AG LEXIS 68 (8/23/13).

12-3-1210. Authority of the Tennessee board of regents system and the University of Tennessee system.

Notwithstanding any law to the contrary, the Tennessee board of regents system and the University of Tennessee system are authorized to:

  1. Develop procedures to apply the policy of § 12-3-701 to their constituent institutions, including procedures describing the circumstances in which limitations below two (2) times the value of the contract are permitted and procedures for obtaining permission from the appropriate official of the Tennessee board of regents or the University of Tennessee;
  2. Purchase software for use restricted solely to academic teaching or research upon terms that may limit the contractor's liability or warranties; provided, that in no event, shall the liability of the contractor be limited for intentional torts, criminal acts or fraudulent conduct; and
  3. Acquire software or services, materials, supplies and equipment free or at nominal cost upon terms that may limit the contractor's liability or warranties; provided, that in no event, shall the liability of the contractor be limited for intentional torts, criminal acts or fraudulent conduct.

Acts 2013, ch. 403, § 70.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

12-3-1211. Contracts for the purchase of personal computers and related devices by public school teachers.

  1. The central procurement office may establish contracts for the purchase of personal computers and related devices by public school teachers for use outside the classroom. The computers and related devices shall not be purchased with public funds, but shall be paid for and owned by teachers individually. The contracts shall be established in accordance with this chapter.
  2. The central procurement office shall promulgate rules to regulate the purchases authorized in this section. The rules shall be approved by the procurement commission.

Acts 2001, ch. 207, § 1; 2010, ch. 1098, § 2; 2011, ch. 295, §§ 5, 19; 2013, ch. 403, § 70; T.C.A. §§ 12-3-1201, 12-3-1202.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, ch. 3, part 12, §§ 12-3-1201, 12-3-1202, concerning the purchase of computers and other electronic devices, was transferred to § 12-3-1211, and former title 12, ch. 3, part 10, §§ 12-3-100112-7-1012, was transferred to this part by Acts 2013, ch. 403, §§ 68-70, effective July 1, 2013.

12-3-1212. Resolution or ordinance to increase threshold amount for requiring public advertisement and competitive bidding.

Notwithstanding any charter provision, private act, or other law to the contrary, any county, municipality, utility district, LEA in accordance with § 49-2-203(a), or other local governmental entity having centralized purchasing authority with a full-time purchasing agent is authorized, by resolution or ordinance of its governing body, to increase the threshold over which public advertisement and sealed competitive bids or proposals are required to an amount not to exceed twenty-five thousand dollars ($25,000) for nonemergency, nonproprietary purchases. At least three (3) written quotations shall be required whenever possible for purchases costing less than the bid threshold established for public advertisement and sealed competitive bids or proposals but more than forty percent (40%) of such bid threshold or some lower amount as may be established by the governing body in the resolution. Purchases of like items shall be aggregated for purposes of the bid threshold.

Acts 2015, ch. 457, § 1; 2017, ch. 415, § 1.

Chapter 4
Public Contracts

Part 1
General Provisions

12-4-101. Personal interest of officers prohibited.

    1. It is unlawful for any officer, committee member, director, or other person whose duty it is to vote for, let out, overlook, or in any manner to superintend any work or any contract in which any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute shall or may be interested, to be directly interested in any such contract. “Directly interested” means any contract with the official personally or with any business in which the official is the sole proprietor, a partner, or the person having the controlling interest. “Controlling interest” includes the individual with the ownership or control of the largest number of outstanding shares owned by any single individual or corporation. This subdivision (a)(1) shall not be construed to prohibit any officer, committee person, director, or any person, other than a member of a local governing body of a county or municipality, from voting on the budget, appropriation resolution, or tax rate resolution, or amendments thereto, unless the vote is on a specific amendment to the budget or a specific appropriation or resolution in which such person is directly interested.
      1. Subdivision (a)(1) shall also apply to a member of the board of directors of any not-for-profit corporation authorized by the laws of Tennessee to act for the benefit or on behalf of any one (1) or more counties, cities, towns and local governments pursuant to title 7, chapter 54 or 58.
      2. Subdivision (a)(2)(A) shall not apply to any county with a metropolitan form of government and having a population of four hundred thousand (400,000) or more, according to the 1980 federal census or any subsequent federal census.
  1. It is unlawful for any officer, committee member, director, or other person whose duty it is to vote for, let out, overlook, or in any manner to superintend any work or any contract in which any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute shall or may be interested, to be indirectly interested in any such contract unless the officer publicly acknowledges such officer's interest. “Indirectly interested” means any contract in which the officer is interested but not directly so, but includes contracts where the officer is directly interested but is the sole supplier of goods or services in a municipality or county.
  2. This section shall apply to a member of the board of directors or officer of any nonprofit corporation required under § 8-44-102 to conduct all meetings of its governing body as open meetings.

Acts 1869-1870, ch. 92, § 1; Shan., § 1133; Code 1932, § 1874; Acts 1977, ch. 102, § 1; T.C.A. (orig. ed.), § 12-401; Acts 1983, ch. 388, §§ 4, 6; 1984, ch. 831, § 1; 1986, ch. 765, §§ 1-3; 1988, ch. 908, §§ 4, 5; 1989, ch. 366, §§ 1-3; 1998, ch. 774, § 1; 2006, ch. 923, § 4; 2013, ch. 403, § 71; 2016, ch. 1072, § 5.

Compiler's Notes. Former title 12, ch. 3 and ch. 4, part 1 were recodified by Acts 2013, ch. 403, §§ 8-70, effective July 1, 2013. The following table of disposition lists the sections in former ch. 3 and ch. 4, part 1, indicating the location of the same or similar provisions, if any.

  1. This section shall not apply in counties having the following populations, according to the 2000 federal census or any subsequent federal census, nor to municipalities located within such counties:

    Many of the casenotes listed below are from cases decided prior to the 1986 amendment to this section adding subsection (c). Although the addition of this subsection may affect the continued validity of some of the notes, the notes have been set out for historical reference purposes.

    For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Acts 2013, ch. 403, § 83 provided that the act, which amended this section, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Certification of funds available, § 9-4-5113.

Distributing and posting solicitations and responses electronically, § 12-3-1004.

Employment of licensed architects and engineers, § 62-2-302.

Improvements constructed with convict labor, § 41-22-102.

Public buildings, accessibility for physically handicapped, title 68, ch. 120, part 2.

Textbooks. Tennessee Jurisprudence, 7 Tenn. Juris., Contracts, §§ 11, 47, 117; 21 Tenn. Juris., Public Officers, § 4.

Law Reviews.

Local Government Law — 1961 Tennessee Survey (Eugene Puett), 14 Vand. L. Rev. 1335.

Attorney General Opinions. Applicability, OAG 88-37, 1988 Tenn. AG LEXIS 37 (2/23/88).

Applicability to lobbyists, OAG 90-73, 1990 Tenn. AG LEXIS 73 (7/27/90).

Direct and indirect conflicts of interest, OAG 93-73, 1993 Tenn. AG LEXIS 73 (12/28/93).

Utility district contract with manager, OAG 94-104, 1994 Tenn. AG LEXIS 105 (9/9/94).

County commissioners adopting County Financial Management System of 1981, OAG 97-166, 1997 Tenn. AG LEXIS 183 (12/16/97).

Dual membership on city council and hospital board, OAG 98-004, 1998 Tenn. AG LEXIS 4 (1/5/98).

County commissioner's association with nonprofit corporation seeking county ambulance contract, OAG 98-0109 (6/11/98).

County or school board employee serving on county legislative body, OAG 98-0112, 1998 Tenn. AG LEXIS 112 (6/16/98).

Utility board employee serving as mayor or city council member, OAG 98-0130, 1998 Tenn. AG LEXIS 129 (7/27/98).

Reimbursement for state judge's rental and other expenses of office owned by judge, OAG 98-162, 1998 Tenn. AG LEXIS 162 (8/24/98); OAG 98-0163, 1998 Tenn. AG LEXIS 163 (8/24/98).

Conflicts of interest involving downtown development entities and directors, OAG 99-043, 1999 Tenn. AG LEXIS 56 (2/25/99).

Conflict of interest of volunteers in district attorney general's office, OAG 99-085, 1999 Tenn. AG LEXIS 85 (4/6/99).

Volunteer created no conflict of interest in district attorney general's office, OAG 99-122, 1999 Tenn. AG LEXIS 131 (5/28/99).

Constable serving as deputy sheriff, OAG 99-160, 1999 Tenn. AG LEXIS 148 (8/19/99).

Contract funded by federal grant, conflict of interest, OAG 99-185, 1999 Tenn. AG LEXIS 213 (9/17/99).

School board member, conflict of interest, OAG 99-209, 1999 Tenn. AG LEXIS 189 (10/20/99).

Emergency dispatchers — conflicts of interest, OAG 99-219, 1999 Tenn. AG LEXIS 179 (11/4/99).

Right to work law, union rules and fines, conflicts of interest, remedies, OAG 99-231, 1999 Tenn. AG LEXIS 225 (12/15/99).

General sessions judge serving as Trenton City judge, OAG 00-043, 2000 Tenn. AG LEXIS 43 (3/13/00).

Legislator as state employee, OAG 00-064, 2000 Tenn. AG LEXIS 65 (4/3/00).

An attorney who works for the Tennessee department of correction may engage in the practice of law outside the department of correction, OAG 00-111, 2000 Tenn. AG LEXIS 113(6/20/00).

Assuming a construction manager is not a public official or officer, there is no conflict of interest under T.C.A. § 12-4-101(a)(1) for a construction manager who performs services for a county board of education to also bid on, contract to perform, and/or be awarded construction work on school building projects the individual was hired to supervise, OAG 00-117, 2000 Tenn. AG LEXIS 119 (7/5/00).

An assistant district attorney general who has a financial interest in a probation agency, or would otherwise derive personal benefit from the business of the agency, should not participate in prosecutions involving defendants who are seeking probation, have been placed on probation, or where probation is being revoked, OAG 00-137, 2000 Tenn. AG LEXIS 138 (8/24/00).

A county commissioner who was a bookkeeper for the county board of education did not have a conflict of interest that required abstention from a vote regarding the adoption of the county financial management system of 1981, OAG 00-180, 2000 Tenn. AG LEXIS 183 (11/22/00).

T.C.A. § 12-4-101 did not prohibit a county and the county school board from purchasing items from a business owned by an individual whose spouse was employed by the county school board as a teacher as the teacher presumably was not part of the decision-making process regarding the purchases, OAG 00-181, 2000 Tenn. AG LEXIS 184 (11/22/00).

A county commissioner can be an employee of the county highway commission, so long as the commissioner observes the voting rules set out in T.C.A. § 12-4-101(c), OAG 01-084, 2001 Tenn. AG LEXIS 75 (5/23/01).

Although both the sheriff and a constable within a county were required to serve civil process, an individual holding both offices would not violate T.C.A. § 12-4-101(a) for that reason alone, as it was unlikely that a court would conclude that the duty of a sheriff or a constable to serve civil process was “work” or a “contract” within the meaning of the statute and as neither sheriff nor a constable controls the other's duty to serve civil process, OAG 02-012, 2002 Tenn. AG LEXIS 13 (1/18/02).

Assuming the school board has no authority to vote for, let out, overlook, or superintend a contract with the county sheriff's department for counseling services, T.C.A. § 12-4-101(a) does not prohibit a member of the school board from entering into such a contract, OAG 02-128, 2002 Tenn. AG LEXIS 133 (11/25/02).

Except for the narrow exception of a county commissioner in T.C.A. § 12-4-101(c)(1), a violation of the general conflict of interest statute or T.C.A. § 5-21-121(a) has no effect on the validity of an official's vote, OAG 02-128, 2002 Tenn. AG LEXIS 133 (11/25/02).

The exclusion of human resource agencies from the potential conflict of interest disclosure of a grant proposal for child care broker services does not violate the equal protection provisions of the United States or Tennessee constitutions, OAG 03-013, 2003 Tenn. AG LEXIS 9 (1/30/03).

Members of a county board of commissioners serving on the board of directors of a non-profit corporation are not prohibited from voting on a contract to sell county property to the corporation, even if the sale is for less than fair market value, OAG 03-120, 2003 Tenn. AG LEXIS 138 (9/24/03).

If members of a county board of commissioners serving on the board of directors of a non-profit corporation the commissioners have a pecuniary interest in the sale of county assets to the corporation, they must disclose that interest, OAG 03-120, 2003 Tenn. AG LEXIS 138 (9/24/03).

Legislator's conflict of interest: lottery advertising, OAG 04-002, 2004 Tenn. AG LEXIS 2 (1/06/04).

Sale of land owned by a county commissioner to the county highway department, which will not purchase such land without county commission approval, provided he abstains from voting on the transaction and states his interest, is prohibited under T.C.A. § 12-4-101(a)(1), but violation of the statute is not a crime, OAG 04-016, 2004 Tenn. AG LEXIS 16 (2/05/04).

T.C.A. § 12-4-101(a)(1) prohibits a county commissioner from voting on or supervising a contract for the sale of his or her land, OAG 04-016, 2004 Tenn. AG LEXIS 16 (2/05/04).

Under T.C.A. § 12-4-102, an officer who enters into a contract in violation of this section must forfeit compensation under the contract; a suit to enforce this provision is a quo warranto action that ordinarily must be brought by the district attorney general, OAG 04-016, 2004 Tenn. AG LEXIS 16 (2/05/04).

An officer who is directly interested in a contract in violation of T.C.A. § 12-4-101(a)(1) is to be dismissed from office and is ineligible to serve in the same or similar position for ten years, OAG 04-016, 2004 Tenn. AG LEXIS 16 (2/05/04).

Under subsection (b) of this section, a member of the county financial management committee must disclose his or her indirect interest when voting on contracts that affect his or her spouse's employment contract with the county, especially such matters as the spouse's compensation, but the statute does not require abstention, OAG 05-017, 2005 Tenn. AG LEXIS 17 (2/03/05).

Legislator as president of the Tennessee Professional Fire Fighters Association, OAG 05-126, 2005 Tenn. AG LEXIS 128 (8/22/05).

Direct appropriation grant to corporation for which legislator is president,  OAG 05-169, 2005 Tenn. AG LEXIS 171 (11/3/05).

Applicability of statutes pertaining to public purchasing and public contracting, and governing general contractors, to housing authorities established by municipalities or counties pursuant to T.C.A. §§ 13-20-101 et seq., OAG 05-170, 2005 Tenn. AG LEXIS 172 (11/21/05).

It does not present any conflict of interest for an instructor at the fire service and codes academy to serve on the commission on fire fighting personnel standards commission, OAG 06-114, 2006 Tenn. AG LEXIS 149 (7/19/06).

T.C.A. § 12-4-101(a)(1) would not prohibit an incumbent commissioner from voting for herself in a decision under T.C.A. § 2-8-111, OAG 06-132, 2006 Tenn. AG LEXIS 149 (8/16/06).

Conflicts of interest involving state and county election commissions, OAG 06-159, 2006 Tenn. AG LEXIS 179 (10/9/06).

Service on the board of the Tellico Reservoir Development Agency by a state representative, OAG 07-036, 2007 Tenn. AG LEXIS 38 (3/26/17).

Company that employs a state legislator may seek to enter into contracts with the state, OAG 08-192, 2008 Tenn. AG LEXIS 237 (12/29/08).

State legislator contracting with non-profit state grant recipient: use of state grant funds.  OAG 10-02, 2010 Tenn. AG LEXIS 2 (1/14/10).

Citizen school board member conflicts of interest.  OAG 10-46, 2010 Tenn. AG LEXIS 46 (4/12/10).

Four Lake Regional Industrial Development Authority: appointing executive director.  OAG 10-55, 2010 Tenn. AG LEXIS 55 (4/23/10).

Conflict of interest of county commissioner also employed or formerly employed by a county department.  OAG 11-50, 2011 Tenn. AG LEXIS 52 (6/16/11).

Conflict of Interest -- Member of County Board of Education.  OAG 12-04, 2012 Tenn. AG LEXIS 108 (11/9/12).

Conflicts of interest: joint economic and community development boards.  OAG 12-09, 2012 Tenn. AG LEXIS 10 (1/20/12).

Same individual serving as county finance director and member of school board.  OAG 12-19, 2012 Tenn. AG LEXIS 19 (2/22/12).

Human resource agency board member conflict of interest.  OAG 12-37, 2012 Tenn. AG LEXIS 37 (3/19/12).

County commission meetings: quorum and majority vote requirements; requirements as to particular type of space or facility for meetings.  OAG  12-109, 2012 Tenn. AG LEXIS 113 (12/14/12).

Algood city administrator serving as Algood city police chief.  OAG 13-63, 2013 Tenn. AG LEXIS 64 (8/9/13).

County commissioner voting on county school system budget.  OAG 13-89, 2013 Tenn. AG LEXIS 90 (11/12/13).

Teacher elected to serve on local school board by which teacher is employed may not retain employment as a teacher.  OAG 14-53, 2014 Tenn. AG Lexis 55 (5/1/14)

The “sole supplier” exception in T.C.A. § 12-4-101(b) applies only when a county official is the sole supplier located in the county. Under the general rule established by Tennessee courts, the doctrine of quantum meruit does not apply if an official contracts with the county in violation of T.C.A. § 12-4-101. OAG 16-19, 2016 Tenn. AG LEXIS 20 (5/18/2016).

A member of the Underground Storage Tanks and Solid Waste Disposal Control Board is a state official.  While state officials are treated as “state employees” for some purposes, state officials are not treated as “state employees” for the purpose of procuring a public contract.  If a contractor has an employee or subcontractor who serves as a member of the Underground Storage Tanks and Solid Waste Disposal Control Board, the contractor may respond to a request for proposal or a request for qualifications to provide services under a contract with a state agency whose services are not overseen by the Board when the Board member does not have a duty “to vote for, let out, overlook, or in any manner superintend any work or any contract” in which the state agency is interested.  The contractor may not contract with a state agency if the Board member has a duty “to vote for, let out, overlook, or in any manner superintend any work or any contract” in which the state agency is interested and the Board member is “directly interested” in the contract).  The only exception is the “sole supplier” provision.  If the Board member is “directly interested” in the contract but is the sole supplier of the services in a municipality or county, the Board member is treated as being only “indirectly interested” in the contract.  In that instance, for the contract to be valid, the Board member must publically acknowledge his or her interest. OAG 18-20, 2018 Tenn. AG LEXIS 19 (4/23/2018).

NOTES TO DECISIONS

1. Constitutionality.

2. —Private Act.

Private Acts 1933, ch. 695, making it a misdemeanor for any member of the county court [now county legislative body] or any person related to any member of such court [now county legislative body] to enter into any contract for the sale of any property or services for a consideration to be paid out of the public funds of a county having a population between 159,000 and 200,000, is unconstitutional as depriving persons similarly situated of rights enjoyed by other citizens of the same class, as being unreasonable, unnatural and arbitrary, in view of Tenn. Const., art. I, § 8; art. XI, § 8; U.S. Const., amend. 14, State ex rel. Hamby v. Cummings, 166 Tenn. 460, 63 S.W.2d 515, 1933 Tenn. LEXIS 100 (1933).

Where Private Acts 1943, ch. 219 which created a new highway commission for Clay County contained a provision which authorized such commission to employ its members for services other than those rendered as commissioners, such provision was contrary to the provisions of this section and was unconstitutional as suspending the general law for the benefit of the highway commissioners of Clay County but did not have the effect of invalidating the entire act where it was merely incidental and did not affect the main purpose of the act. Kyle v. Marcom, 181 Tenn. 57, 178 S.W.2d 618, 1944 Tenn. LEXIS 345 (1944).

3. Construction and Interpretation.

Where the evidence showed that the supervisor of instruction was a certificated teacher and his duties included classroom teaching, he was a teacher within the ambit of the former § 49-217 [repealed] and was competent to serve both as a teacher and a member of a quarterly county court [now county legislative body] and there was no material conflict between his service for the county board of education and his service as a member of the quarterly county court [now county legislative body]. State ex rel. Finger v. Kidd, 534 S.W.2d 309, 1976 Tenn. LEXIS 595 (Tenn. 1976).

4. —Liberal Construction.

This section and §§ 12-4-10212-4-105 were enacted to protect the public from official corruption and oppression and should be liberally construed so as to effectuate the object sought. State ex rel. Abernathy v. Robertson, 5 Tenn. Civ. App. (5 Higgins) 438 (1914).

5. —Good Faith.

The fact that the rule laid down by this statute may operate partially in certain instances is no argument against it and it does not matter that the services were rendered faithfully and inured to the benefit of the county or that the material furnished was necessarily and cheaply furnished. Madison County v. Alexander, 116 Tenn. 685, 94 S.W. 604, 1906 Tenn. LEXIS 20 (1906).

Good faith of mayor was not a defense where a partnership composed of himself and another hauled rock and garbage for the town for a consideration paid by the town even though there was no express agreement on the part of the town to pay for the services rendered, since there was an implied contract by the city to pay for the work. Crass v. Walls, 36 Tenn. App. 546, 259 S.W.2d 670, 1953 Tenn. App. LEXIS 140 (Tenn. Ct. App. 1953).

6. —Interest of Official Forbidden.

The policy of the statute is that a public official may not contract with a body of which he is a member because it may become very detrimental to the public interest. Madison County v. Alexander, 116 Tenn. 685, 94 S.W. 604, 1906 Tenn. LEXIS 20 (1906).

7. —Loan of Money.

This section does not apply to a bona fide loan of money. State v. Yoakum, 43 Tenn. App. 123, 306 S.W.2d 39, 1957 Tenn. App. LEXIS 105 (Tenn. Ct. App. 1957).

8. —Works of Necessity.

An exception arises if work performed for town is due to immediate necessity but this exception does not apply to an ordinary necessity where evidence showed that parties other than mayor were available to do the work. Crass v. Walls, 36 Tenn. App. 546, 259 S.W.2d 670, 1953 Tenn. App. LEXIS 140 (Tenn. Ct. App. 1953).

9. —Private Act — Effect.

The question raised but not decided as to whether, insofar as it relates to Hamilton County, this section was repealed by Private Acts 1911, ch. 281. State ex rel. Hamby v. Cummings, 166 Tenn. 460, 63 S.W.2d 515, 1933 Tenn. LEXIS 100 (1933).

10. Contracts Forbidden.

Plaintiff employed as cook at workhouse and authorized to purchase supplies for feeding of prisoners was not entitled to recover from county for supplies furnished from store owned by plaintiff, since recovery was against public policy. Ramsey v. Gibson County, 7 Tenn. Civ. App. (7 Higgins) 53 (1916).

These sections only apply to cases where the contract is with the officers themselves. This is manifestly true, because it is provided that the officer shall forfeit all compensation. Burns v. Nashville, 142 Tenn. 541, 221 S.W. 828, 1919 Tenn. LEXIS 80 (1920), cited in Savage v. Mynatt, 156 Tenn. 119, 299 S.W. 1043, 1927 Tenn. LEXIS 92 (1927).

Contracts with counties or cities, in which county or municipal officers are interested, are unlawful, and cannot be enforced by the officers who thereby subject themselves to hazard of removal from office. State ex rel. Laurenceburg v. Perkinson, 159 Tenn. 442, 19 S.W.2d 254, 1928 Tenn. LEXIS 104 (1929).

Contract of a member of quarterly county court [now county legislative body] to act as road supervisor for county highway commission was illegal, since contract in reality was with the county. Cagle v. Benton County, 181 Tenn. 235, 181 S.W.2d 1, 1944 Tenn. LEXIS 365 (1944).

School board cannot hire justice of peace [now member of the county legislative body] to drive school bus. State ex rel. Ellis v. Ellis, 191 Tenn. 376, 234 S.W.2d 817, 1950 Tenn. LEXIS 444 (1950).

Superintendent of schools was not entitled to salary as supervising teacher where he recommended his own appointment after being defeated in election though he did not assume position of supervisor until after new superintendent took office. State ex rel. Ellis v. Robbins, 195 Tenn. 681, 263 S.W.2d 518, 1953 Tenn. LEXIS 395 (1953).

Hauling of rock and garbage for the town by a partnership composed of mayor and another was not the performance of service by the mayor, and was forbidden. Crass v. Walls, 36 Tenn. App. 546, 259 S.W.2d 670, 1953 Tenn. App. LEXIS 140 (Tenn. Ct. App. 1953).

Where chair of county board of education acted as agent of insurance companies which insured public school of the county and received commissions for the same, fact that rates were fixed by statute or at least governed thereby did not afford basis of demurrer in proceeding by district attorney general under these sections where board of education was vested with discretion as to whether it would procure insurance or carry its own and, if it did procure insurance, had a discretion as to the amount within the value of the property insured. State ex rel. Abernathy v. Anthony, 206 Tenn. 597, 335 S.W.2d 832, 1960 Tenn. LEXIS 399 (1960).

11. Contracts Not Forbidden.

Contract of county board of education with justice of the peace [now member of the county legislative body] to teach school, held not invalidated by this statute. State ex rel. Boles v. Groce, 152 Tenn. 566, 280 S.W. 27, 1925 Tenn. LEXIS 102 (1926).

Where tract of land was acquired by board of education with funds bequeathed to board under will to be held in trust and used for benefit of high school as distinguished from general school system, and where board subsequently attempted to dispose of tract by ultimately conveying to member of board and using proceeds for purchase of other land, this section did not apply, although rule of trust loyalty did apply with equal rigor. Munsey v. Russell Bros., 31 Tenn. App. 187, 213 S.W.2d 286, 1948 Tenn. App. LEXIS 82 (Tenn. Ct. App. 1948).

12. Remedies.

When a suit is brought for violation of this part, and brought in the name of the state by the district attorney general seeking the penalties, punishment and relief provided by those code sections, such suit is quo warranto proceeding. State ex rel. Abernathy v. Anthony, 206 Tenn. 597, 335 S.W.2d 832, 1960 Tenn. LEXIS 399 (1960).

It was error to join an action in the nature of quo warranto, based upon this part, and an action for debt brought by a relator on behalf of the city, based upon § 6-54-107 et seq. The quo warranto action by the state affords complete relief and must take precedence over the action for debt by the city. Smyrna v. Ridley, 730 S.W.2d 318, 1987 Tenn. LEXIS 905 (Tenn. 1987).

13. —Indictment.

In case of a willful violation of this section and §§ 12-4-10212-4-105, amounting to the corrupt abuse of official power, the contract forbidden by this section cannot be enforced and the officer may be indicted for official misbehavior. State v. Ward, 163 Tenn. 265, 43 S.W.2d 217, 1931 Tenn. LEXIS 110 (1931).

14. —Appropriation for Payment Void.

Appropriation for payment of county court [now county legislative body] members for service on court committees violates this section and such appropriation is void. Southern v. Beeler, 183 Tenn. 272, 195 S.W.2d 857, 1946 Tenn. LEXIS 267 (1946).

15. Appeal by State.

Court of appeals had jurisdiction of appeal of proceeding by state seeking to recover compensation paid defendant as mayor and for dismissal of mayor from office, since appeal did not involve right to office and as result of long practice of court of appeals to review proceedings under this section and §§ 12-402 — 12-405 (now §§ 12-4-10212-4-105). Crass v. Walls, 194 Tenn. 573, 253 S.W.2d 755, 1952 Tenn. LEXIS 422 (1952).

16. District Attorney General.

District attorney general has right to dismiss suits under this section and § 12-4-102 at any stage as well as to refuse to bring such suit initially if he does not believe such suit is in the public interest. State v. Parker, 204 Tenn. 30, 315 S.W.2d 396, 1958 Tenn. LEXIS 242 (1958).

Suit by citizens and taxpayers to recover on warrants signed by county executive (now county mayor) and allegedly payable to concerns in which judge was interested could not be maintained without intervention of district attorney general. State v. Parker, 204 Tenn. 30, 315 S.W.2d 396, 1958 Tenn. LEXIS 242 (1958).

12-4-102. Penalty for unlawful interest.

Should any person, acting as such officer, committee member, director, or other person referred to in § 12-4-101, be or become directly or unlawfully indirectly interested in any such contract, such person shall forfeit all pay and compensation therefor. Such officer shall be dismissed from such office the officer then occupies, and be ineligible for the same or a similar position for ten (10) years.

Acts 1869-1870, ch. 92, §§ 2, 3; Shan., §§ 1134, 1135; Code 1932, §§ 1875, 1876; T.C.A. (orig. ed.), § 12-402; Acts 1983, ch. 388, § 5.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Textbooks. Tennessee Jurisprudence, 21 Tenn. Juris., Public Officers, § 28.

Law Reviews.

Defending the Public Interest: Citizen Suits for Restitution Against Bribed Officials, 48 Tenn. L. Rev. 347.

Attorney General Opinions. Under this section, an officer who enters into a contract in violation of T.C.A. § 12-4-101 must forfeit compensation under the contract; a suit to enforce this provision is a quo warranto action that ordinarily must be brought by the district attorney general, OAG 04-016, 2004 Tenn. AG LEXIS 16 (2/05/04).

NOTES TO DECISIONS

1. Construction and Interpretation.

Where a statute imposed penalties for making contracts, it implicitly forbade parties from making such contracts and, where the contract was prohibited, whether expressly or by implication, it was illegal and could not be enforced. State ex rel. Kirkpatrick v. Tipton, 670 S.W.2d 224, 1984 Tenn. App. LEXIS 2689 (Tenn. Ct. App. 1984).

2. Construction with Other Acts.

3. —Ouster Law.

City council member who voted for resolution authorizing appointment of collector for delinquent city taxes and who thereafter accepted appointment of collector but who upon being advised that he could not hold two offices resigned office of collector and authorized city treasurer to deduct from his salary as council member the amount previously paid him in fees was not subject to ouster from city council by proceeding filed under § 8-47-101 for misconduct in office based on violation of § 12-4-101, since misconduct was not intentional. State ex rel. Brumit v. Grindstaff, 169 Tenn. 383, 88 S.W.2d 142, 1935 Tenn. LEXIS 59 (1935).

In an action to oust a justice of the peace [now member of the county legislative body] from office, under title 8, ch. 47, the plaintiff having elected to proceed under the ouster law, their remedy is governed by its provisions, and no judgment can be rendered beyond that authorized by such act. State ex rel. Phillips v. Greer, 170 Tenn. 529, 98 S.W.2d 79, 1936 Tenn. LEXIS 24 (1936).

Proceedings for enforcement of this section are under the common law and not under the Ouster Act (title 8, ch. 47). State ex rel. Wallen v. Miller, 202 Tenn. 498, 304 S.W.2d 654, 1957 Tenn. LEXIS 415 (1957).

4. Purpose and Policy.

This provision shows the evident intent of the lawmakers to meet a serious menace to public funds by drastic and far-reaching provisions. Savage v. Mynatt, 156 Tenn. 119, 299 S.W. 1043, 1927 Tenn. LEXIS 92 (1927).

5. Authority of District Attorney.

District attorney general has right to dismiss suits under § 12-4-101 and this section at any stage as well as to refuse to bring such suit initially if he does not believe such suit is in the public interest. State v. Parker, 204 Tenn. 30, 315 S.W.2d 396, 1958 Tenn. LEXIS 242 (1958).

Suit by citizens and taxpayers to recover on warrants signed by county executive (county mayor) and allegedly payable to concerns in which judge was interested could not be maintained without intervention of district attorney general. State v. Parker, 204 Tenn. 30, 315 S.W.2d 396, 1958 Tenn. LEXIS 242 (1958).

6. Statute of Limitations.

An action to enforce the sanctions for an interest in city contracts imposed by this section is one not expressly provided for, and, thus, is controlled by the ten-year statute contained in § 28-3-110(3) (now § 28-3-110(a)(3)). Smyrna v. Ridley, 730 S.W.2d 318, 1987 Tenn. LEXIS 905 (Tenn. 1987).

7. Contracts Forbidden.

Justices [now members of county legislative bodies] are forbidden by statute to take contracts or to receive compensation for their performance, where the contract is made with the county court [now county legislative body] or the compensation is to be fixed by that body, and the county is not liable for services so rendered. Hope v. Hamilton County, 101 Tenn. 325, 47 S.W. 487, 1898 Tenn. LEXIS 68 (1898); Madison County v. Alexander, 116 Tenn. 685, 94 S.W. 604, 1906 Tenn. LEXIS 20 (1906).

8. Loan of Money.

Where there was nothing contained in contract for purchase of school bus showing an interest, directly or indirectly, as contemplated by statute, but apparently the intention was to lend the personal credit of the defendant to the county so as to permit the county to purchase a school bus, the funds for which were not then available, there was no violation of this chapter. State ex rel. Chitwood v. Murley, 202 Tenn. 637, 308 S.W.2d 405, 1957 Tenn. LEXIS 449 (1957).

9. Services Voluntarily Rendered.

This statute does not prohibit a city from paying its councilmen for services voluntarily rendered by them without any contract, express or implied, that they were to be compensated, where the city has received the full benefit of the services, and there is no suspicion of bad faith in the transaction. Knoxville v. Christenberry, 147 Tenn. 286, 247 S.W. 98, 1922 Tenn. LEXIS 40 (1923); Savage v. Mynatt, 156 Tenn. 119, 299 S.W. 1043, 1927 Tenn. LEXIS 92 (1927).

Though it may be considered a matter of bad taste for the members of a city council to make provision for payment to themselves for services previously rendered to the city without contract, there is no legal prohibition against their making such payment. Knoxville v. Christenberry, 147 Tenn. 286, 247 S.W. 98, 1922 Tenn. LEXIS 40 (1923).

10. Removal.

11. —Parties.

Objection in removal proceeding that suit was not instituted by proper parties would not be considered where question was not raised until after submission of case to the chancellor. Crass v. Walls, 36 Tenn. App. 546, 259 S.W.2d 670, 1953 Tenn. App. LEXIS 140 (Tenn. Ct. App. 1953).

12. —District Attorney — Discretion.

In a proceeding to forfeit the office of a justice of the peace [now member of the county legislative body] for violation of this section, the district attorney [now district attorney general] has power to discontinue the action over the objection of the attorney general and reporter. State ex rel. Hardwick v. Vest, 136 Tenn. 167, 188 S.W. 1143, 1916 Tenn. LEXIS 112 (1916).

13. —Expiration of Term — Effect.

Where pending an appeal from a judgment ousting a justice of the peace [now member of the county legislative body] from office for becoming interested in public contracts, the term of the justice [now member] expired, the appeal should be dismissed, as against relator's contention that they have a right to prosecute the appeal in order that defendant may be decreed ineligible to hold office for 10 years, in view of these sections and § 8-47-107. State ex rel. Lavender v. Bingham, 170 Tenn. 552, 98 S.W.2d 86, 1936 Tenn. LEXIS 29 (1936).

The procedure provided for ouster of public officials by title 8, ch. 47, is an additional or cumulative remedy against officials for official misconduct and carries with it no fine, penalty or obligation so that a judgment under this section declaring the offending official ineligible to hold office for 10 years cannot be entered, hence question becomes moot when the term of office of the official expires and the proceedings must be dismissed. State ex rel. Phillips v. Greer, 170 Tenn. 529, 98 S.W.2d 79, 1936 Tenn. LEXIS 24 (1936); State ex rel. Lavender v. Bingham, 170 Tenn. 552, 98 S.W.2d 86, 1936 Tenn. LEXIS 29 (1936).

14. —Ouster Penalty.

It is unlawful for county or municipal officers to become interested in contracts with a county or city and such contracts cannot be enforced by the officers entering into them, even though made in good faith, and the officer subjects himself to the hazard of removal from office. State ex rel. Laurenceburg v. Perkinson, 159 Tenn. 442, 19 S.W.2d 254, 1928 Tenn. LEXIS 104 (1929).

Violation with knowledge of illegality constitutes ground for ouster under title 8, ch. 47. State v. Ward, 163 Tenn. 265, 43 S.W.2d 217, 1931 Tenn. LEXIS 110 (1931).

15. Ten-Year Ineligibility.

Any officer violating the provisions of § 12-4-101 and this section is thereby rendered ineligible. State ex rel. Abernathy v. Robertson, 5 Tenn. Civ. App. (5 Higgins) 438 (1914).

A person violating this section and § 12-4-101, during one term of his office cannot be legally elected to another term during the 10-year period of disability. State ex rel. Abernathy v. Robertson, 5 Tenn. Civ. App. (5 Higgins) 438 (1914).

Decree holding mayor ineligible for office for period of 10 years as a result of entering into a contract with town to perform certain work was justified since statute so provides. Crass v. Walls, 36 Tenn. App. 546, 259 S.W.2d 670, 1953 Tenn. App. LEXIS 140 (Tenn. Ct. App. 1953).

16. Forfeiture of Compensation.

The chair of a building committee appointed from the membership of the county court [now county legislative body] to superintend improvements made upon the courthouse and jail is not entitled to compensation for such services notwithstanding they were onerous and valuable. Hope v. Hamilton County, 101 Tenn. 325, 47 S.W. 487, 1898 Tenn. LEXIS 68 (1898).

Suit to recover for the value of articles sold and delivered cannot be maintained, although they were proper articles of food needed by the workhouse department, and worth the price charged for them. A sale to the workhouse department and superintendent was really, in fact and law, a sale to the county. It is one of the duties of each member of the county court [now county legislative body] to pass upon these appropriations, either directly or indirectly. Madison County v. Alexander, 116 Tenn. 685, 94 S.W. 604, 1906 Tenn. LEXIS 20 (1906).

The fact that a city was under no legal obligation to pay for services rendered to it by its officers, in addition to their official duties, does not authorize the city or its successor to recover a payment made for such services after the city had received the benefit thereof. Knoxville v. Christenberry, 147 Tenn. 286, 247 S.W. 98, 1922 Tenn. LEXIS 40 (1923).

A public official who contracts with himself will not be allowed to recover on such contract. Savage v. Mynatt, 156 Tenn. 119, 299 S.W. 1043, 1927 Tenn. LEXIS 92 (1927).

It is definitely settled that an official will not be allowed to recover, without regard to the value or extent of the services furnished, whenever such official is within the terms of the statute. Savage v. Mynatt, 156 Tenn. 119, 299 S.W. 1043, 1927 Tenn. LEXIS 92 (1927).

17. Repayment.

The language “shall forfeit all pay and compensation therefor” embraces not only a refusal of payment, but the right to compel repayment when made in the teeth of the statute. Savage v. Mynatt, 156 Tenn. 119, 299 S.W. 1043, 1927 Tenn. LEXIS 92 (1927).

A person violating § 12-4-101 must forfeit all pay and compensation, regardless of good faith or whether a profit was realized. State ex rel. Kirkpatrick v. Tipton, 670 S.W.2d 224, 1984 Tenn. App. LEXIS 2689 (Tenn. Ct. App. 1984).

12-4-103. Bidding, sale, or offer for sale by state employees prohibited.

  1. It is hereby declared unlawful for any state official or employee to bid on, sell, or offer for sale, any merchandise, equipment or material, or similar commodity, to the state of Tennessee during the tenure of such official's or employee's office or employment, or for six (6) months thereafter, or to have any interest in the selling of the same to the state.
  2. A person violating subsection (a) shall be liable to the state for any and all sums paid out by the state, together with interest at the rate of eight percent (8%) per annum, growing out of any such transaction.
  3. A violation of subsection (a) is a Class E felony.

Acts 1953, ch. 160, §§ 2, 3 (Williams, §§ 1876.2, 1876.3); impl. am. Acts 1979, ch. 203, § 20; T.C.A. (orig. ed.), § 12-404; Acts 1989, ch. 591, § 24; 2013, ch. 403, § 73.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Acts 2013, ch. 403, § 83 provided that the act, which amended this section, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Penalty for Class E felony, § 40-35-111.

Penalty for unlawful transactions, § 12-4-104.

12-4-104. Penalty for unlawful transactions.

  1. It is an offense for a public employee or former public employee having official responsibility for procurement transactions to accept employment with any respondent to a solicitation or contractor with whom the employee or former employee dealt in an official capacity concerning procurement transactions for a period of one (1) year from the cessation of employment by the public body unless the employee or former employee provides written notification to the public body, or a public official if designated by the public body, or both, prior to commencement of employment by that respondent to a solicitation or a contractor.
  2. It is an offense for any person who, for compensation, prepares a solicitation for or on behalf of a public body to:
    1. Submit a response to a solicitation for that procurement or any portion thereof; or
    2. Disclose to any respondent to a solicitation information concerning the procurement that is not available to the public. A public body may permit such person to submit response to a solicitation for that procurement or any portion thereof if the public body determines that the exclusion of the person would limit the number of potential qualified respondents to a solicitation in a manner contrary to the best interest of the public body.
    1. It is an offense for a contractor or subcontractor to demand or receive from any of the contractor's or subcontractor's suppliers or for a contractor to demand or receive from the contractor's subcontractors, as an inducement for the award of a subcontract or order, any payment, loan, subscription, advance, deposit of money, services or anything, present or promised, unless consideration of substantially equal or greater value is exchanged.
    2. It is an offense for a subcontractor or supplier to make or offer to make any payment, loan, subscription, advance, deposit of money, services or anything, present or promised, unless consideration of substantially equal or greater value is exchanged.
    3. It is an offense for any person to demand or receive any payment, loan, subscription, advance, deposit of money, services or anything of value in return for an agreement not to compete on a public contract.
    4. If a contractor, subcontractor, supplier or any person violates any provision of this subsection (c), the amount thereof shall be conclusively presumed to have been included in the price of the contract, subcontract or order and ultimately borne by the public body and shall be recoverable from both the maker and recipient. Recovery from one (1) offending party shall not preclude recovery from other offending parties.
    1. A contract entered into in violation of this section on or after October 1, 2011, is void. A contract that is otherwise void under this section may continue in effect until an alternative can be arranged when:
      1. Immediate termination would result in harm to the public health or welfare; and
      2. The continuation is approved by the commission.
    2. Approval of continuation of contracts under this subsection (d) shall be given for the minimum period necessary to protect the public health or welfare. The chief procurement officer and the comptroller of the treasury shall be notified immediately upon a determination that a contract violates this subsection (d).
    1. As used in this section, the term “public officer” means an individual who is elected or appointed to serve or represent a public agency, other than an employee or independent contractor of a public agency.
    2. A public officer or employee is involved in administering a contract if the officer or employee oversees the performance of the contract or has authority to make decisions regarding the contract or to interpret the contract.
    3. A public officer or employee is involved in making a contract if such officer or employee participates in the development of specifications or terms or in the preparation or award of the contract. A public officer is also involved in making a contract if the board, commission, or other body of which such officer is a member takes action on the contract, whether or not the public officer actually participates in that action, unless the contract is approved under an exception to this section under which the public officer is allowed to benefit and is prohibited from voting.
    4. A public officer or employee derives a direct benefit from a contract if the person or the person's spouse:
      1. Has more than a ten-percent ownership or other interest in an entity that is a party to the contract;
      2. Derives any income or commission directly from the contract; or
      3. Acquires property under the contract.
  3. A public officer or employee is not involved in making or administering a contract solely because of the performance of ministerial duties related to the contract.
  4. A violation of this section is a Class A misdemeanor.

Acts 1953, ch. 160, §§ 2, 3 (Williams, §§ 1876.2, 1876.3); impl. am. Acts 1979, ch. 203, § 20; T.C.A. (orig. ed.), § 12-404; Acts 1989, ch. 591, § 24; 2013, ch. 403, § 74.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Acts 2013, ch. 403, § 83 provided that the act, which rewrote this section, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Penalty for Class A misdemeanor, § 40-35-111.

12-4-105. Grand jury investigations.

The judges of the circuit and criminal courts of the state shall give §§ 12-4-10312-4-105 in charges to their respective grand juries, and the grand juries shall have inquisitorial powers to summon witnesses and to inquire into probable violations of those sections.

Acts 1953, ch. 160, § 4 (Williams, § 1876.4); T.C.A. (orig. ed.), § 12-405.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Law Reviews.

The Tennessee Court Systems — The Jury System, 8 Mem. St. U.L. Rev. 489.

12-4-106. Prohibition against receiving rebates, gifts, money or anything of value — Conflicts of interest.

  1. No officer or employee of the central procurement office, nor any member of the procurement commission, nor any head of any state department, institution or agency, nor any employee of any state department, institution or agency charged with the responsibility of initiating requisitions, shall accept or receive, directly or indirectly, from any person, firm or corporation to whom any contract for the purchase of goods or services for the state may be awarded, by rebate, gifts, or otherwise, any money or anything of value whatsoever, or any promise, obligation, or contract for future rewards or compensation.
    1. It is a conflict of interest for any person or any company with whom such person is an officer, a director, or an equity owner having an ownership interest greater than one percent (1%) to bid on any public contract for goods or services for a governmental entity if such person or the immediate family member of such person is a member of a board or commission having responsibility for letting or approving such contract.
    2. As used in this subsection (b):
      1. “Governmental entity” means any state agency, authority, board, commission, department, or office within the executive, legislative or judicial branch of state government or any autonomous state agency, authority, board, commission, department, office, or institution of higher education; and
      2. “Immediate family” means spouse, dependent children or stepchildren, or relatives related by blood or marriage.

Acts 2013, ch. 403, § 75.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-3-106 were transferred to this section, and some provisions similar to this former section were transferred to § 12-3-1209.

Acts 2013, ch. 403, § 83 provided that the act, which enacted this section, shall apply to contracts entered into or renewed on and after July 1, 2013.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal Corporations, §§ 70, 71, 76.

Attorney General Opinions. A county could not award a road design and construction contract on a “design-build” basis, without competitive bidding, to an engineering firm that had partnered with a road construction firm for that purpose, even though the county's governing body believed such an award to be in the best interest of the taxpayers, as the county was required to advertise the proposed letting of such a contract and to receive sealed bids for the proposed road project, OAG 00-086, 2000 Tenn. AG LEXIS 88 (5/5/00).

A city board of education was not required to competitively bid a contract with a foundation, OAG 01-111, 2001 Tenn. AG LEXIS 102 (7/11/01).

NOTES TO DECISIONS

1. Contracts for Definite Amount.

A trial judge properly stated in his charge to the jury that this statute did not preclude a city from entering into a contract for a definite amount or putting a ceiling on a definite amount to perform auditing services nor would it prevent a city from entering into a contract on an hourly basis for that service. Strickland v. Lawrenceburg, 611 S.W.2d 832, 1980 Tenn. App. LEXIS 367 (Tenn. Ct. App. 1980).

12-4-107. Contracts for professional services.

    1. All contracts for architectural and engineering services procured by any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute, and all contracts for construction services procured by any county, city, metropolitan government, or town for projects described in subsection (b), shall meet the following requirements:
      1. In the procurement of architectural and engineering services, the selection committee or procurement official may seek qualifications and experience data from any firm or firms licensed in this state and interview such firm or firms. The selection committee or procurement official shall evaluate statements of qualifications and experience data regarding the procurement of architectural and engineering services, and shall conduct discussions with such firm or firms regarding the furnishing of required services and then shall select the firm deemed to be qualified to provide the services required;
      2. The selection committee or procurement official shall negotiate a contract with the qualified firm for architectural and engineering services at compensation which the selection committee or procurement official determines to be fair and reasonable to the government. In making such determination, the selection committee or procurement official shall take into account the estimated value of the services to be rendered, the scope of work, complexity and professional nature thereof;
      3. Should the selection committee or procurement official be unable to negotiate a satisfactory contract with the firm considered to be qualified, at a price determined to be fair and reasonable, negotiations will continue with other qualified firms until an agreement is reached;
      4. A city, county or utility district having a satisfactory existing working relationship for architectural or engineering services may expand the scope of the services; provided, that they are within the technical competency of the existing firm, without exercising this section.
    2. A city or county may procure surveying services by the means set forth under subdivision (a)(1).
  1. Construction projects of a county, city, metropolitan government, town, utility district, or utility authority shall meet the following requirements:
    1. For construction of local projects or additions to existing buildings, a county, city, metropolitan government, town, utility district, or utility authority may contract for construction management agent or advisor services or construction manager at-risk services. Construction management services may be performed by a qualified person licensed under the Contractors Licensing Act of 1994, compiled in title 62, chapter 6, part 1. Construction management services are to be procured for each project through a written request for proposals process through advertisement. The procurement and advertisement shall be in accordance with the laws, regulations, and ordinances of the county, city, metropolitan government, town, utility district, or utility authority. The written request for proposals process shall invite prospective proposers to participate and shall indicate the service requirements and the factors used for evaluating the proposals. These factors may include the construction manager's qualifications and experience on similar projects, qualifications of personnel to be assigned to the project, fees and costs, or any additional factors deemed relevant by the procuring entity for procurement of the service. The contract for such services shall be awarded to the best qualified and responsive responder. A construction manager agent or advisor is prohibited from undertaking actual construction work on a project over which the construction manager agent or advisor coordinates or oversees the planning, bid, or construction phases of the project, except in instances when bids have been solicited twice and no bids have been submitted. If the construction manager agent or advisor can document that a good faith effort was made in each bid solicitation to obtain bids and no bids were received, then the construction manager agent or advisor may perform the construction work at a price agreed upon by the construction manager agent or advisor, the architect, and the owner of the project. A governing body, at its own discretion, may perform work on the project with its own employees and may include the coordination and oversight of this work as part of the services of the construction manager agent or advisor. Sealed bids for actual construction work shall be opened at the bid opening and the names of the contractors and their bid amounts shall be announced;
    2. Construction management agent or advisor services or construction manager at-risk services for the construction of local projects or additions to existing buildings may be performed by:
      1. A general contractor licensed in this state pursuant to the Contractors Licensing Act of 1994; provided, that none of such services performed by a general contractor involve any of the services exempt from the requirements of title 62, chapter 6, part 1 as “normal architectural and engineering services” under § 62-6-102(4)(B), unless, with regard to the performance of any services defined as normal architectural and engineering services, the general contractor is also licensed as an architect or engineer under title 62, chapter 2; or
      2. An architect or an engineer licensed pursuant to title 62, chapter 2; provided, that none of such services performed by an architect or engineer involve any of the services required to be performed by a contractor within the definition of “contractor” under § 62-6-102, unless with regard to the performance of any services included within the definition of “contractor”, the architect or engineer is also licensed as a contractor under the Contractors Licensing Act of 1994;
    3. Construction work that is under the coordination and oversight of a construction manager shall be procured through competitive bids.

Acts 1969, ch. 331, § 1; T.C.A., § 12-432; Acts 1984, ch. 822, § 2; 1990, ch. 699, § 1; 1991, ch. 518, §§ 1, 2; 1998, ch. 990, § 1; 2009, ch. 518, § 1; 2013, ch. 403, § 76; T.C.A. § 12-4-106; Acts 2018, ch. 794, §§ 1, 2; 2019, ch. 225, § 1; 2019, ch. 338, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-107 (Acts 1969, ch. 331, § 2; impl. am. Acts 1959, ch. 9, § 8; T.C.A., § 12-433), concerning the filing of fiscal agent and/or financial advisor contracts, was repealed by Acts 2006, ch. 874, §  2, effective July 1, 2006.

Acts 2013, ch. 403, § 83 provided that the act, which transferred § 12-4-106 to this section and amended it, shall apply to contracts entered into or renewed on and after July 1, 2013.

Amendments. The 2019 amendment by ch. 225, substituted “county, city, metropolitan government, town, utility district, or utility authority” for “county, city, metropolitan government, or town” throughout (b).

The 2019 amendment by ch. 338, added (a)(2).

Effective Dates. Acts 2019, ch. 225, § 2. April 30, 2019.

Acts 2019, ch. 338, § 2. May 10, 2019.

Attorney General Opinions. T.C.A. § 12-4-107 does not permit the State, counties, cities, towns, or metropolitan governments to solicit or receive proposals or to enter into contracts for “Construction Management-at-Risk Services” for the construction of local correctional facility projects or additions to existing correctional facility buildings.   Since the “Construction Management-at-Risk Services” contracts in question contemplate that the construction manager may itself perform at least some of the construction work, such contracts would not be permitted under T.C.A. § 12-4-107(b) for local correctional facility construction projects. OAG 17-49, 2017 Tenn. AG LEXIS 49 (11/2/2017).

12-4-108. Withdrawal of retained funds — Contractors.

  1. Any construction contractor may, from time to time, withdraw any part, or the whole, of the amount which has been retained from partial payments to the contractor pursuant to the terms of the contract upon the deposit of securities in the manner described in this section.
  2. This section shall require delivery of securities to or in the name of the:
    1. State treasurer for construction contracts entered into by the state, and any agency or department thereof, including the department of transportation, under § 54-5-113; or
    2. Any other appropriate public official named in the contract for construction contracts entered into by the University of Tennessee or any county, municipality, or political subdivision of the state, including, but not limited to, metropolitan government.
  3. The following shall be considered as securities and may be substituted for retained funds:
    1. United States treasury bonds, United States treasury notes, United States treasury bills;
    2. General obligation bonds of the state of Tennessee;
    3. Certificates of deposit or evidence of other deposits irrevocably pledged from a state or national bank having its principal office in Tennessee or a state or federal savings and loan association having its principal office in Tennessee; or
    4. A letter of credit from a state or national bank having its principal office in Tennessee. The terms and conditions of any letter of credit shall be subject to the approval of the public official described in subsection (b). All letters of credit shall be accompanied by an authorization of the contractor to deliver retained funds to the bank issuing the letter.
  4. No retained amount shall be withdrawn which would represent an amount in excess of the market value of the securities at the time of deposit or of the par value of such securities, whichever is lower, or in excess of the maximum amount committed and stated in the letter of credit.
  5. At the time of deposit of the securities, they shall be accompanied by a conditional assignment to the public official described in subsection (b), which will empower the public official to take custody of the security and to negotiate it at any time to the extent necessary to cause the contract to be fulfilled.
  6. In the case of securities deposited with the state treasurer, such securities shall be negotiated by the state treasurer in the event that the state building commission or the commissioner of transportation, whichever is applicable, determines that such is desirable in order to effectuate the timely completion of the project.
  7. So long as securities remain on deposit and the contractor is not in default, all interest and income paid shall go to the contractor, less any custodial care and servicing costs.
  8. The securities which remain on deposit at the time of completion of the contract and satisfaction of any statutory obligations with respect thereto shall be returned to the contractor.
  9. The public official described in subsection (b) shall have the power to enter into a trust agreement with any state or national bank or state or federal savings and loan association or savings bank located in Tennessee for the safekeeping, custodial care and servicing of securities to the extent necessary to effectuate the purposes of this section. The financial institution serving as trustee under such trust agreement shall hold the securities in trust for the purposes of this section and for the use and benefit of the persons entitled to them under the provisions hereof; provided, that the securities held in trust will not be commingled with any securities owned by the financial institution or any third party, but will at all times remain segregated and subject to identification as the particular securities deposited and held in trust for the purposes of this section.

Acts 1970, ch. 387, § 1; 1971, ch. 340, § 1; 1972, ch. 613, § 1; impl. am. Acts 1972, ch. 829, § 7; T.C.A., § 12-434; Acts 1980, ch. 741, § 11; 1981, ch. 371, §§ 1-3; 1983, ch. 118, § 1; 1986, ch. 618, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Law Reviews.

1985 Tennessee Survey: Selected Developments in Tennessee Law, 53 Tenn. L. Rev. 337 (1986).

Selected Tennessee Legislation of 1983 (N. L. Resener, J. A. Whitson, K. J. Miller), 50 Tenn. L. Rev. 785 (1983).

NOTES TO DECISIONS

1. Construction.

The word “contractor” in this section means both general contractors and subcontractors, regardless of whether there is privity between the governmental body and the contractor. ABC Plumbing & Heating, Inc. v. Dick Corp., 684 S.W.2d 84, 1985 Tenn. LEXIS 467 (Tenn. 1985).

2. Retainage.

Where a subcontractor for plumbing knew it was a subcontractor to a general contractor under contract to a governmental entity, and the general contractor, pursuant to contract, withheld retainage for work done on the subcontract, this section and not § 66-11-144 (now § 66-34-104) was applicable, and the contractor and not the subcontractor was entitled to interest on the retainage held. ABC Plumbing & Heating, Inc. v. Dick Corp., 684 S.W.2d 84, 1985 Tenn. LEXIS 467 (Tenn. 1985).

12-4-109. Preplanning of capital investment projects account.

There is hereby established an account to be known as the capital preplanning account, which shall be the funding source for the preplanning of all capital projects undertaken by the departments and agencies of the state. The account shall be reimbursed for the preplanning cost of a capital investment project from the appropriations allocated to that project. Any funds remaining in the account at the end of any fiscal year shall be carried over to the succeeding fiscal year and expended only for the purpose specified in this section.

Acts 1972, ch. 751, § 1; T.C.A., §§ 9-409, 9-4-109; Acts 2013, ch. 403, § 77; T.C.A. § 12-4-114.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-114 was transferred to this section by Acts 2013, ch. 403, § 77, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-109 were transferred to §§ 12-3-102, 12-3-303, 12-3-305 and 12-3-310.

Acts 2013, ch. 403, § 83 provided that the act, which transferred this section from former § 12-4-114 without amendment, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Applicability of section to highway specific service signs, § 54-5-1103.

Contract services subcommittee, § 3-7-112.

Distributing and posting solicitations and responses electronically, § 12-3-1004.

Prompt payment for property and services, title 12, ch. 4, part 7.

Law Reviews.

Bid Protests in Tennessee (Steven W. Feldman), 34 Tenn. B.J. 27 (1998).

Attorney General Opinions. T.C.A. former § 12-4-109(a)(1)(A) requires that evaluation criteria must be included in the RFP, OAG 07-12, 2007 Tenn. AG LEXIS 12 (2/12/07).

12-4-110. Energy-related services.

Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of this state for energy-related services that include both engineering services and equipment, and have as their purpose the reduction of energy costs in public facilities, shall be awarded on the same basis as contracts for professional services.

Acts 1988, ch. 611, § 1; 2013, ch. 403, § 78; T.C.A. § 12-4-115.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-115 was transferred to this section by Acts 2013, ch. 403, § 78, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-110 were transferred to § 12-3-303.

Acts 2013, ch. 403, § 83 provided that the act, which transferred this section from former § 12-4-115 without amendment, shall apply to contracts entered into or renewed on and after July 1, 2013.

Cross-References. Applicability of section to highway specific service signs, § 54-5-1103.

Attorney General Opinions. T.C.A. § 12-4-115 (transferred to T.C.A. § 12-4-110) does not apply to contracts procured by a local education agency for the construction or renovation of public school buildings, regardless of the specific procurement process employed by the LEA for its construction projects.  T.C.A. § 49-2-203 controls how an LEA shall procure contracts to construct or renovate a public school.  OAG 13-04, 2013 Tenn. AG LEXIS 1 (1/10/13).

12-4-111. Standard prototype design for correctional facilities.

  1. For purposes of this part, “state standard prototype,” means a design on which a state correctional facility is based so that the design can be used by the state to construct similar buildings at different sites at a future time. The state building commission may designate state standard prototypes from design documents which were originally prepared for the exclusive use of the state. The state architect shall place the appropriate designation on a document which is determined to be a state standard prototype.
  2. Prior to the reuse of documents for a project in which the original architect or engineer is not also involved, the state shall remove and obliterate from all documents the identification of the original architect or engineer, including name, address, professional seal or stamp, and signature. The architect or engineer who is involved in a state standard prototypical reuse project shall affix such architect's or engineer's seal or stamp to such design, and shall be solely responsible for all documents on which such architect's or engineer's seal or stamp is placed, and shall hold the original architect or engineer harmless from suits by third parties.
  3. The original architect or engineer shall not be liable for injury or damage resulting from reuse of plans, designs, details, specifications or construction documents of a state standard prototype by the state or third parties, if the original architect or engineer is not also involved in the reuse project. It is the intent of this section that the architect or engineer who seals or stamps a prototype is legally responsible only for that set of documents on which such architect's or engineer's seal or stamp is placed.

Acts 1988, ch. 800, § 2; 2013, ch. 403, § 79; T.C.A. § 12-4-116.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former §  12-4-111 were transferred to § 12-3-302.

Cross-References. Applicability of section to highway specific service signs, § 54-5-1103.

12-4-112. State agency contract guidelines.

  1. As used in this section, “governmental entity” means any county, municipality, metropolitan government, town, utility district, or other municipal or public corporation of this state.
  2. Notwithstanding any other provision of law or private act to the contrary, a governmental entity may enter into multi-year contracts for painting and other maintenance of water storage tanks and appurtenant facilities procured through a request for proposals process. The request for proposals process shall invite prospective proposers to participate and shall indicate the service requirements and the categories used for evaluating the proposals, together with the relative weight of each category. Such categories shall include such factors as qualifications, experience on similar projects, availability of workers, technical approach, minority participation, cost, and any additional factor or factors deemed relevant by the procuring governmental entity. Cost shall not be the sole criterion for evaluation. Proposers shall be given at least thirty (30) days from public advertisement of the request for proposals to consider the evaluation factors set forth in the solicitation documents before submitting proposals. The contract shall be awarded to the best proposer who meets the minimum required qualifications, using the evaluation criteria set forth in this subsection (b).
  3. Any governmental entity may, at its option, require such multi-year contracts to be competitively bid.

Acts 2005, ch. 386, § 1; 2013, ch. 403, § 80; T.C.A. § 12-4-123.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-112 were transferred to § 12-3-305, and provisions similar to former §  12-4-123 were transferred to this section.

Attorney General Opinions. Tennessee education lottery corporation: contract amendments.  OAG 10-73, 2010 Tenn. AG LEXIS 79 (5/21/10).

12-4-113. Deadline for addenda and questions concerning bid documents.

  1. If a statute, ordinance, resolution, rule or regulation mandates the use of competitive bidding of any kind or nature whatsoever, by any state agency, county or municipal corporation, then, notwithstanding such law, ordinance, resolution, rule or regulation, no addenda within less than forty-eight (48) hours of the bid opening date, excluding weekends and legal holidays designated in § 15-1-101, shall be permitted unless the bid deadline is extended for a reasonable time as determined by the purchasing agent, which shall not be less than forty-eight (48) hours excluding weekends and legal holidays designated in § 15-1-101, to allow for any necessary changes to the bid documents and to allow bidders to resubmit their bids accordingly.
  2. Any questions concerning the bid documents must be received by the designer no less than ninety-six (96) hours before bid opening date.
  3. This section shall not apply to the department of transportation contracts or any state or local agency contracts funded in whole or in part with state or federal highway funds.

Acts 2011, ch. 260, § 1; 2013, ch. 329, § 4, 5; 2013, ch. 403, § 81; T.C.A. § 12-4-126.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-126 was transferred to this section by Acts 2013, ch. 403, § 81, effective July 1, 2013.

Former title 12, chs. 3 and 4 were recodified by Acts 2013, ch. 403, effective July 1, 2013. In the recodification, some provisions similar to former § 12-4-113 were transferred to § 12-3-307, and provisions similar to former § 12-4-126 were transferred to this section.

12-4-114. No conflict of interest allowed.

    1. No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law.
    2. No public employee having official responsibility for a procurement transaction shall participate in that transaction on behalf of the public body when the employee knows that:
      1. The employee is contemporaneously employed by a respondent to a solicitation or contractor involved in the procurement transaction;
      2. The employee, the employee's spouse, or any member of the employee's immediate family holds a position with a respondent to a solicitation, a contractor involved in the procurement transaction, such as an officer, director, trustee, partner or the like, or is employed in a capacity involving personal and substantial participation in the procurement transaction, or owns or controls an interest of more than five percent (5%);
      3. The employee, the employee's spouse, or any member of the employee's immediate family has a pecuniary interest arising from the procurement transaction; or
      4. The employee, the employee's spouse, or any member of the employee's immediate family is negotiating, or has an arrangement concerning, prospective employment with a respondent to a solicitation or contractor involved in the procurement transaction.
    3. A public officer or employee who will derive a direct benefit from a contract with the public agency the officer or employee serves, but who is not involved in making or administering the contract, shall not attempt to influence any other person who is involved in making or administering the contract.
    4. No public officer or employee may solicit or receive any gift, reward, or promise of reward in exchange for recommending, influencing, or attempting to influence the award of a contract by the public agency the officer or employee serves.
  1. As used in this section, “immediate family” means spouse, dependent children or stepchildren, or relatives related by blood or marriage.

Acts 2013, ch. 403, § 72.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-114 was transferred to § 12-4-109 by Acts 2013, ch. 403, § 77, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which enacted this section, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-115. “Organizational conflicts of interest” defined — Policies and procedures — Reporting.

  1. As used in this section, “organizational conflicts of interest” may include any relationship or action between any party, including contractors and consultants, and the state or its agents making decisions to procure or contract that may:
    1. Conflict with the state's best interest; or
    2. Taint the procurement process or reputation of the state.
  2. The central procurement office, state building commission and department of transportation shall establish policies and procedures to define and identify organizational conflicts of interest. The policies and procedures shall set forth methods, which may include avoidance, mitigation, or waiver, to deal with organizational conflicts of interest.
  3. The policies and procedures shall provide that all determinations relating to specific organizational conflicts of interest be in writing. Such determinations shall periodically be reported to the speaker of the house of representatives, the speaker of the senate and to the comptroller of the treasury.

Acts 2014, ch. 758, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-115 was transferred to § 12-4-110 by Acts 2013, ch. 403, § 78, effective July 1, 2013.

Cross-References. Reporting requirement satisfied by notice to general assembly members of publication of report, § 3-1-114.

12-4-116. Electronic bidding.

Notwithstanding any law, rule or regulation to the contrary, local governments may satisfy any requirement for mailing by distributing invitations to bid, requests for proposals and other solicitations electronically. In addition, local governments may receive bids, proposals, and other offers electronically. In order to assure the fullest possible participation of small businesses and minority-owned businesses, local governments shall not require such small businesses and minority-owned businesses to receive or respond to invitations to bid, requests for proposals, or other solicitations electronically.

Acts 2014, ch. 645, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-116 was transferred to § 12-4-111 by Acts 2013, ch. 403, § 79, effective July 1, 2013.

12-4-117. Residency and income requirements for employees prohibited — Exception — Definitions.

  1. Notwithstanding any state law to the contrary, neither the state, its political subdivisions, agencies, or instrumentalities thereof, or any local government shall require a company bidding or contracting to provide services on a public construction project to employ individuals who reside within the jurisdiction of the state or local government or who are within a specific income range, unless otherwise required by federal law.
  2. For purposes of this section:
    1. “Local government” means any municipality or county, including a county with a metropolitan form of government; and
    2. “Public construction project” means any construction project wherein state or local government funds may be appropriated or expended for the purpose of erecting, remodeling, altering, repairing, demolishing, or making any addition to any building; or any construction project for the purpose of building, rebuilding, locating, relocating, or repairing any street, highway, or bridge.

Acts 2016, ch. 587, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-117 (Acts 1991, ch. 262, § 1), concerning members of the local governing body employed as court reporters, was repealed by Acts 1993, ch. 85, § 1, effective March 29, 1993.

12-4-118. Energy performance or guaranteed energy savings contract pilot projects — Alternative procurement or contracting vehicles.

  1. Notwithstanding any law to the contrary, for purposes of developing and implementing up to five (5) energy performance or guaranteed energy savings contract pilot projects for state-owned buildings and facilities, state procurement agencies may enter into an energy performance or guaranteed energy savings contract using alternative procurement or contracting vehicles, including, but not limited to, existing in-state and out-of-state government contracts that have been competitively procured, that incorporate energy savings into the scope of work to be performed under the contract, and that expressly authorize other contracting entities to execute contracts or price agreements under the terms and conditions of the master contract on behalf of a department, institution, agency, or campus having control of, or responsibility for, the management or operation of buildings and facilities; provided, that the contract award meets the requirements of § 12-4-110 relative to energy-related service contracts for counties, cities, metropolitan governments, towns, utility districts, and other municipal and public corporations of the state. Such contracts are subject to approval by the state building commission.
  2. All projects implemented under an energy performance or guaranteed energy savings contract under subsection (a) are deemed to be pilot projects and shall be limited to the following energy conservation measures:
    1. Building envelope weatherization;
    2. Building automation controls;
    3. Lighting retrofits and controls;
    4. Water conservation, HVAC, chiller plant, boiler plant, or other mechanical modifications; and
    5. Submetering to measure performance of controls or systems.
  3. For the duration of each individual contract, an annual measurement and verification audit utilizing generally accepted auditing standards, such as the International Performance Measurement and Verification Protocol, shall be conducted, and the related audit report will include, but not be limited to, energy savings achieved, energy savings targets met or exceeded, energy savings targets missed, and guarantees paid by the energy service company executing the contract. The annual measurement and verification audit shall be conducted by, and the related audit report shall be prepared by, a third-party at the expense of the energy service company executing the contract. Each audit report shall be submitted annually by the state department, institution, or agency participating in one (1) or more pilot projects to the department of environment and conservation's office of energy programs within thirty (30) days following the close of the fiscal year. The department of environment and conservation's office of energy programs shall submit the data to the governor, the commissioner of environment and conservation, state procurement agencies, the state building commission, the comptroller of the treasury, the speaker of the senate, and the speaker of the house of representatives no later than August 31 for each year in which each project is implemented and in effect.
  4. Any energy performance or guaranteed energy savings contract executed in accordance with this section must reach substantial completion of energy conservation measures on or before December 31, 2020.
  5. The commissioner of environment and conservation, in cooperation with the state procurement agencies participating in one (1) or more pilot projects under this section, shall submit a report summarizing the results of each pilot project implemented under this section to the governor, the comptroller of the treasury, the speaker of the senate, and the speaker of the house of representatives no later than June 30, 2022.
  6. This section shall not limit the availability of appropriate state agencies to otherwise enter into energy performance or guaranteed energy savings contracts.

Acts 2018, ch. 902, § 1.

Compiler's Notes. For the disposition of sections in title 12, ch. 3, as amended by Acts 2013, ch. 403, effective July 1, 2013, please see the table of disposition in § 12-3-101.

Former § 12-4-118 (Acts 1999, ch. 458, §§ 2, 4), concerning liability for improper date or time processing by computer hardware and software, was repealed by Acts 2006, ch. 559, § 1, effective April 24, 2006.

Part 2
Surety Bonds

12-4-201. Contractors bonds — Securities or cash in lieu of bonds.

    1. No contract shall be let for any public work in this state, by any city, county or state authority, until the contractor shall have first executed a good and solvent bond to the effect that the contractor will pay for all the labor and materials used by the contractor, or any immediate or remote subcontractor under the contractor, in such contract, in lawful money of the United States. The bond to be so given shall be for no less than twenty-five percent (25%) of the contract price on all contracts in excess of one hundred thousand dollars ($100,000). Where advertisement is made, the condition of the bond shall be stated in the advertisement; provided, that §§ 12-4-201 — 12-4-206 shall not apply to contracts of one hundred thousand dollars ($100,000) or less.
    2. A good and solvent bond means a bond written by a surety or insurance company listed on the United States department of the treasury financial management service list of approved bonding companies which is published annually in the federal register at the time the bond is provided in accordance with this part.
    3. No bond shall be deemed to be a good and solvent bond if it is written for an amount which is in excess of the amount indicated as approved for sureties or insurance companies by the United States department of the treasury financial management service list published at the time the bond is provided.
    4. Any surety bond written for a public work project shall be written by a surety or insurance company that is licensed and authorized to do business as a surety or insurer in this state.
    5. Any bond which is not in accordance with this section shall be null and void as against the public policy of this state and shall be rejected by the building or bidding authority.
    1. No contract let for any public work in this state, by any city, county or state authority, shall require a contractor or subcontractor to obtain any bond including, but not limited to, payment bonds, performance bonds and bid bonds, from a particular surety, agent, broker or producer.
    2. No public officer, whose duty it is to let or award contracts, shall require a contractor or subcontractor to obtain any bond, including, but not limited to, payment bonds, performance bonds and bid bonds, from a particular surety, agent, broker or producer.
    3. This subsection (b) shall not preclude a city, county, or state authority from requiring that a contractor or subcontractor obtain a bond, including payment bonds, performance bonds and bid bonds, from a properly licensed surety, agent, broker or producer.
  1. In lieu of the bond required by subsection (a), the following securities or cash may be substituted at the percentage rate required for such bond:
    1. United States treasury bonds, United States treasury notes and United States treasury bills;
    2. General obligation bonds of the state of Tennessee;
    3. Certificates of deposit or evidence of other deposits irrevocably pledged from:
      1. A state or national bank having its principal office in Tennessee;
      2. A state or federal savings and loan association having its principal office in Tennessee;
      3. Any state or national bank, that has its principal office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits; or
      4. Any state or federal savings and loan association that has its principal office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits;
    4. A letter of credit from a state or national bank or state or federal savings and loan association having its principal office in Tennessee; or any state or national bank or state or federal savings and loan association that has its principal office outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits. The terms and conditions of any letter of credit shall be subject to the approval of the public official named in the contract. The form of such letter of credit shall be provided by the bank or savings and loan association and may be based on either the Uniform Commercial Code, title 47, chapter 5, or the ICC Uniform Customs and Practice for Documentary Credits (UCP 500). All letters of credit shall be accompanied by an authorization of the contractor to deliver retained funds to the bank issuing the letter; or
    5. Cash; provided, that, where cash is posted, the contracting authority shall pay to the contractor interest at the same rate that interest is paid on funds invested in a local government investment pool established pursuant to § 9-4-704, for the contract period.

Acts 1925, ch. 121, § 1; Shan. Supp., § 3546a4; mod. Code 1932, § 7955; Acts 1977, ch. 188, § 1; T.C.A. (orig. ed.), § 12-417; Acts 1985, ch. 151, § 1; 1986, ch. 551, § 8; 1989, ch. 84, § 1; 1997, ch. 402, § 13; 2003, ch. 82, § 1; 2004, ch. 518, § 1; 2013, ch. 195, § 1; 2017, ch. 92, § 1.

Compiler's Notes.  For the Preamble to the act concerning bonding requirements on public works, please refer to Acts 2013, ch. 195.

Cross-References. Contractors for department of highways, bond, § 54-5-119.

Employee's liens, § 66-13-101.

Mechanics' and materialmen's liens, § 66-11-102.

Textbooks. Tennessee Jurisprudence, 1 Tenn. Juris., Agency, § 25; 5 Tenn. Juris., Bridges, §§ 3, 6; 19 Tenn. Juris., Municipal Corporations, § 75; 23 Tenn. Juris., Streets and Highways, § 18; 26 Tenn. Juris., Working Contracts, §§ 14, 15.

NOTES TO DECISIONS

1. Construction with Other Laws.

The reference in § 12-4-207 to “the usual bond with good and sufficient sureties, as required by law” refers to the bond required by this section. Griggs v. Peerless Ins. Co., 528 S.W.2d 182, 1975 Tenn. LEXIS 621 (Tenn. 1975).

2. —Highway Construction.

Insofar as this act, relating to contracts for public work generally, conflicts with §§ 54-5-12354-5-127, relating to highway contracts alone, the provisions of §§ 54-5-12354-5-127 controlled the rights of all parties to highway contracts. Pan American Petroleum Corp. v. McQuary, 164 Tenn. 646, 51 S.W.2d 854, 1931 Tenn. LEXIS 64 (1932).

3. Surety Bond.

The purpose of the bond is to afford protection to furnishers of materials and labor, since they have no lien on public construction. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

Where public lands were not subject to labor and materialmen's liens, the legislature required all public works to be bonded for the protection of laborers and materialmen and the bond must be enforced within statutory limitations. Heglar v. McAdoo Contractors, Inc., 487 S.W.2d 312, 1972 Tenn. Crim. App. LEXIS 314 (Tenn. Ct. App. 1972).

When the terms of the bond contain the minimum requirements of this part and no more, it is termed a statutory bond. Wal-Board Supply Co. v. Daniels, 629 S.W.2d 686, 1981 Tenn. App. LEXIS 584 (Tenn. Ct. App. 1981).

When the bond, according to its terms, extends greater privilege to the claimant than required by §§ 12-4-20112-4-208 it is referred to as a common-law bond. Wal-Board Supply Co. v. Daniels, 629 S.W.2d 686, 1981 Tenn. App. LEXIS 584 (Tenn. Ct. App. 1981).

A supplier of materials who performed no labor in the installation of the materials was not within the definition of “contractor, or any immediate or remote subcontractor” so as to be protected by subsection (a). Inryco, Inc. v. Eatherly Constr. Co., 793 F.2d 767, 1986 U.S. App. LEXIS 26340 (6th Cir. Tenn. 1986).

4. —Statutory Compliance.

The statute does not require that public construction bonds shall in terms run in favor of the materialmen and laborers, only that the surety shall be in effect obligated to pay for all the materials and labor. Provision is made through the obligee for such claimants. Sherman v. Cate, 159 Tenn. 69, 16 S.W.2d 25, 1928 Tenn. LEXIS 63 (1929).

Cashing by supplier of check marked “Acct. in full” did not constitute accord and satisfaction, where person with whom supplier had dealt as issuer-contractor's agent marked through the words prior to the cashing. Failure of surety on the bond to deny that timely notice of the claim was given and that suit was brought within six months after completion of the project in its answer denied it the right to rely on those defenses. Sawner v. M. P. Smith Constr. Co., 526 S.W.2d 492, 1975 Tenn. App. LEXIS 176 (Tenn. Ct. App. 1975).

5. —Coverage.

Rental paid to another by the contractor for the use of a steam boiler in the construction work was a lienable item, though the boiler was not wrought into or consumed in use as a part of the contractor's equipment, since the use for which the rent was paid did go into the structure. Nicks v. W. C. Baird & Co., 165 Tenn. 89, 52 S.W.2d 147, 1931 Tenn. LEXIS 175 (1932).

Where general contractor's contract for construction of school buildings specifically obligated him to pay for all labor and materials used in such construction and to supply surety bond conditioned on full performance of the contract, and contract was made a part of surety bonds by reference without limitation as to extent or purpose, such bonds not only guaranteed construction of the buildings in accordance with the terms of the contract but also guaranteed payment for labor and materials. Engert v. Peerless Ins. Co., 53 Tenn. App. 310, 382 S.W.2d 541, 1964 Tenn. App. LEXIS 105 (Tenn. Ct. App. 1964).

Principal and surety of bond of general contractor were not liable on bond for unemployment compensation taxes incurred by subcontractor. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

A bondsman is required by statute to afford certain protection under certain statutory rules; but if the bondsman elects by the terms of its bond to extend that protection under less stringent rules, it may do so and is bound by the terms of its bond. Wal-Board Supply Co. v. Daniels, 629 S.W.2d 686, 1981 Tenn. App. LEXIS 584 (Tenn. Ct. App. 1981).

6. —Reformation of Bond.

Where all parties intended that the bond should be a statutory one, it may be reformed; but reformation is not necessary when the bond is given a practical construction. The statute does not require that it run, in terms, in favor of laborers or materialmen. Sherman v. Cate, 159 Tenn. 69, 16 S.W.2d 25, 1928 Tenn. LEXIS 63 (1929).

7. —Owners' Acts or Agreements — Effect.

The rights of materialmen and laborers to recover against the surety on a bond to secure performance of a public work contract are not affected by alterations or amendments to the contract agreed on between the contractor and the owner or by any act or omission of the obligee not participated in by the materialmen and laborers even though conduct or default would release the surety from liability to the obligee. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

8. —Common Law Obligations.

Bonds which in one aspect protect the governmental agency and in another aspect protect laborers and materialmen may be separate and distinct obligations although combined in one paper. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

The obligation of the surety on the bond to the governmental agency may be subject to the common law and the obligation to laborers and materialmen may be subject to the statute if the latter obligation is only such an obligation as required by the statute. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

Where bond is conditioned more broadly than the statute requires, recovery may be had on it as a valid common-law obligation. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

Bond provision that the principal and surety agreed not only to pay for labor and materials, but also to pay “all just claims for damages and injuries to property” was an obligation above and beyond the statutory requirements making the bond the common-law variety. Koch v. Construction Tech., 924 S.W.2d 68, 1996 Tenn. LEXIS 320 (Tenn. 1996).

Decisions Under Prior Law

1. Surety Bond.

2. —Statutory Compliance.

The bond of a contractor employed to build a courthouse for a county, conditioned to provide and furnish the labor and materials of every description necessary to complete such courthouse, and for the faithful performance of the work, was not equivalent to the statutory bond. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906); Tennessee Supply Co. v. Bina Young & Son, 142 Tenn. 142, 218 S.W. 225, 1919 Tenn. LEXIS 44 (1919).

A bond conditioned to pay all obligations of the contractor that may constitute a lien upon the structure was not a bond which protects laborers and furnishers, so far as surety was concerned. Tennessee Supply Co. v. Bina Young & Son, 142 Tenn. 142, 218 S.W. 225, 1919 Tenn. LEXIS 44 (1919), differentiated in Sherman v. Cate, 159 Tenn. 69, 16 S.W.2d 25, 1928 Tenn. LEXIS 63 (1929).

3. —Coverage.

Materialmen were entitled to recover for coal furnished to run boiler of engine used in construction work. Pittsburg Coal Co. v. Southern Asphalt & Constr. Co., 138 Tenn. 154, 196 S.W. 490, 1917 Tenn. LEXIS 17 (1917).

A storekeeper who paid, in merchandise, the paychecks of employees of the contractor, under an arrangement that the contractor would make a settlement on the 20th of every month, was not entitled to recover on the bond, where it appeared that no assignment of the claims of laborers to the storekeeper was made, but a mere credit arrangement between the storekeeper and the contractor was made. Carter County v. Oliver-Hill Const. Co., 143 Tenn. 649, 228 S.W. 720, 1920 Tenn. LEXIS 50 (1921).

Where the road contractor's bond extended its indemnity to laborers and materialmen, the surety was liable to persons furnishing food for laborers and feed for animals engaged in performance of the contract; but the surety was not liable for goods furnished the contractor for its commissary, which were sold to outsiders as well as to employees. Carter County v. Oliver-Hill Const. Co., 143 Tenn. 649, 228 S.W. 720, 1920 Tenn. LEXIS 50 (1921).

Materialmen were not entitled to recovery for horse feed for teams transporting material for the construction of the school building. Cass v. Smith, 146 Tenn. 218, 240 S.W. 778, 1921 Tenn. LEXIS 14 (1922).

4. —Penalty — Liability.

A bond under this statute was not an insurance policy so as to allow recovery of a penalty for refusal to pay promptly the liability sum. Kimball v. Parks, 151 Tenn. 103, 268 S.W. 117, 1924 Tenn. LEXIS 49 (1925), cited in Peoples Bank & Trust Co. v. United States Fidelity & Guaranty Co., 156 Tenn. 517, 3 S.W.2d 163, 1927 Tenn. LEXIS 147 (1928).

5. —Reformation of Bond.

There could be no reformation against the surety where parties did not intend a bond under this statute. Tennessee Supply Co. v. Bina Young & Son, 142 Tenn. 142, 218 S.W. 225, 1919 Tenn. LEXIS 44 (1919).

6. —Misapplication of Payments.

In an action against a surety on the bond of a municipal contractor, where the materialmen had applied payments by the contractor on jobs other than those from which they were received, those received from the city job could not be credited to the surety, under the trust fund doctrine, where there was no certainty that diversions to the city job from others did not offset diversions from that job. Kimball v. Parks, 151 Tenn. 103, 268 S.W. 117, 1924 Tenn. LEXIS 49 (1925).

7. —Owners' Acts or Agreements — Effect.

Under the statutory bond of a contractor, no act of the owner could relieve the surety from liability to the furnisher of materials and labor. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906).

8. —Subrogation of Paying Surety.

Public contractor's surety, on payment of duly filed claims of materialmen and laborers, was subrogated to the claimants' rights against the contractor, and to participate as claimants would have participated in the distribution of the assets of the contractor. Cass v. Smith, 146 Tenn. 218, 240 S.W. 778, 1921 Tenn. LEXIS 14 (1922).

9. Contractor's Creditors Subjecting Fund.

Where, after the completion of a courthouse, there remained a fund due to the contractor, which had been subjected, by garnishment, by a creditor of the contractor, to the payment of his debt, furnishers of material and labor, without having impounded the fund, were not entitled thereafter to assert any claim thereto. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906).

12-4-202. Failure to require bond.

If any public officer, whose duty it is to let or award contracts, lets or awards any contract without requiring bond for payment of labor and material, in compliance with § 12-4-201, such officer commits a Class C misdemeanor.

Acts 1925, ch. 121, § 3; Shan. Supp., § 3546a6; Code 1932, § 7957; T.C.A. (orig. ed.), § 12-418; Acts 1989, ch. 591, § 113.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

Textbooks. Tennessee Jurisprudence, 5 Tenn. Juris., Bridges, § 6; 18 Tenn. Juris., Limitation of Actions, § 26; 21 Tenn. Juris., Public Officers, § 47; 26 Tenn. Juris., Working Contracts, § 14.

Decisions Under Prior Law

1. County — Freedom from Liability.

The general rule that a county was not liable for damages resulting to third persons from the neglect of its officers, in regard to the public highways, operated to exempt the county itself from liability to anyone for the neglect of its bridge commissioners, in letting a contract for the construction of a public bridge, to take the bond required from the contractor. Rhea County v. Sneed, 105 Tenn. 581, 58 S.W. 1063, 1900 Tenn. LEXIS 108 (1900).

There was no implied contract on the part of a county to pay for the materials and labor used by its contractor or his subcontractor in the construction of a public bridge or a courthouse, for a stipulated sum, where the materials were purchased and the laborers were employed by such contractor or his subcontractor. Rhea County v. Sneed, 105 Tenn. 581, 58 S.W. 1063, 1900 Tenn. LEXIS 108 (1900); W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906).

2. County Officials — Liability for Failure to Require Bond.

County bridge commissioners letting a contract for the construction of a public bridge, and members of a building committee contracting for the erection of a courthouse, failing to exact the statutory bond of the contractors, were not only indictable, but were also liable in a civil action for any damages resulting to laborers and furnishers of material, who would have been protected by the execution of the prescribed bond. Rhea County v. Sneed, 105 Tenn. 581, 58 S.W. 1063, 1900 Tenn. LEXIS 108 (1900); Templeton v. Nipper, 107 Tenn. 548, 64 S.W. 889, 1901 Tenn. LEXIS 106 (1901); W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906).

The individual liability of public officers, for their failure to take the contractor's statutory bond, was not escaped by the failure of the claimants to give notice of their claims within required days after the completion of the work, because the statutory provision as to notice was applicable only where the prescribed bond had been taken. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906); Tennessee Supply Co. v. Bina Young & Son, 142 Tenn. 142, 218 S.W. 225, 1919 Tenn. LEXIS 44 (1919).

12-4-203. Contractor disclaiming subcontractor's liability.

In the event the contractor who has executed the bond gives notice, in writing, by return receipt registered mail, to any laborer or furnisher of material or to any such immediate or remote subcontractor that such contractor will not be responsible therefor, then such person who thereafter furnishes such material or labor shall not secure advantage of §§ 12-4-20112-4-206, for materials furnished or labor done after the receipt of such notice.

Acts 1925, ch. 121, § 1; Shan. Supp., § 3546a4; mod. Code 1932, § 7955; T.C.A. (orig. ed.), § 12-419.

Cross-References. Certified mail in lieu of registered mail, § 1-3-111.

NOTES TO DECISIONS

1. No Mechanic's Lien on Public Buildings.

There was no mechanic's lien on public buildings. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906); Tennessee Supply Co. v. Bina Young & Son, 142 Tenn. 142, 218 S.W. 225, 1919 Tenn. LEXIS 44 (1919).

12-4-204. Action on bond by laborer or furnisher of labor or material to the contractor.

Any laborer or furnisher of labor or material to the contractor, or to any immediate or remote subcontractor under the contractor, may bring an action on the bond, and have recovery in such laborer's or furnisher's own name, upon giving security, or taking the oath prescribed for poor persons as provided by law; but in the event of such suit, the city, county, or state shall not be liable for any costs accruing thereunder.

Acts 1925, ch. 121, § 2; Shan. Supp., § 3546a5; Code 1932, § 7958; T.C.A. (orig. ed.), § 12-420.

Textbooks. Tennessee Jurisprudence, 19 Tenn. Juris., Municipal Corporations, § 75.

NOTES TO DECISIONS

1. Procedure.

2. —Suit by City as Obligee.

The obligee may sue for the benefit of the furnisher of materials. Sherman v. Cate, 159 Tenn. 69, 16 S.W.2d 25, 1928 Tenn. LEXIS 63 (1929).

Decisions Under Prior Law

1. Terms of Bond.

2. —Limitation to Valid Liens.

Right of action on bond indemnifying owner against liens was not given furnishers of material and labor by a provision in the bond “that the owner, in estimating his damages, may include the claim of mechanics and materialmen arising out of the performance of such contract, and paid by him, only when the same … are valid liens against his property,” because there was no mechanic's lien on public buildings. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906).

3. —Bond Specifying Suit by Owner.

An action for materials furnished and labor done would not lie on the bond of a contractor to construct public works where the bond expressly provided that the surety was liable thereunder to anyone except the owner. W. T. Hardison & Co. v. Yeaman, 115 Tenn. 639, 91 S.W. 1111, 1905 Tenn. LEXIS 96 (1906).

4. Procedure.

5. —Accrual of Action.

The city's suit was not premature, upon the ground that it had in its hands and due the contractor more than enough money to pay all labor and material claims, where it set up the contractor's abandonment of the contract, and showed liquidated damages in the way of additional cost of completion and the liens and claims of laborers and materialmen, showing considerable shortage. Bristol v. Bostwick, 139 Tenn. 304, 202 S.W. 61, 1917 Tenn. LEXIS 107 (1918).

6. —Suit by City as Obligee.

A city, as obligee, could sue in its own behalf for additional sums expended to complete a building and for benefit of laborers and furnishers unpaid. Bristol v. Bostwick, 139 Tenn. 304, 202 S.W. 61, 1917 Tenn. LEXIS 107 (1918).

7. —Cross-Bills in City's Suit.

Where the city sued, in its own behalf and also in behalf of the laborers and materialmen setting up their claims, demurrers to the separate petitions or cross-bills of the various laborers and materialmen should have been sustained; because the bill was not one of interpleader nor a general creditor's suit. Bristol v. Bostwick, 139 Tenn. 304, 202 S.W. 61, 1917 Tenn. LEXIS 107 (1918).

8. Parties.

9. —Contractor's Receiver Suing.

A contractor's receiver could not sue on the bond since such suit should be instituted by the materialmen and laborers themselves, or by the school board for their benefit. The solicitors for the receiver were not entitled to fee out of the funds in the hands of the school board, which the court ordered to be paid into the court. Cass v. Smith, 146 Tenn. 218, 240 S.W. 778, 1921 Tenn. LEXIS 14 (1922).

10. —Furnisher of Materials Suing.

An action on the contractor's bond by the furnisher of coal to a contractor, to be used and actually used in the construction of a public work, could not be defended on the ground of want of privity between the plaintiff and the surety, for this section expressly authorized such action. Pittsburg Coal Co. v. Southern Asphalt & Constr. Co., 138 Tenn. 154, 196 S.W. 490, 1917 Tenn. LEXIS 17 (1917).

11. Defendants.

A furnisher of materials could maintain suit against a surety on the bond as well as the principal. Templeton v. Nipper, 107 Tenn. 548, 64 S.W. 889, 1901 Tenn. LEXIS 106 (1901); Pittsburg Coal Co. v. Southern Asphalt & Constr. Co., 138 Tenn. 154, 196 S.W. 490, 1917 Tenn. LEXIS 17 (1917).

12-4-205. Notice of claim.

Such furnisher of labor or material, or such laborer, to secure the advantage of §§ 12-4-20112-4-206, shall, after such labor or material is furnished, or such labor is done, and within ninety (90) days after the completion of such public work, give written notice by return receipt certified mail, or by personal delivery, either to the contractor who executed the bond, or to the public official who had charge of the letting or awarding of the contract; such written notice to set forth the nature, an itemized account of the material furnished or labor done, and the balance due therefor; and a description of the property improved. In the case of public work undertaken by a municipality, or any of its commissions, notice, or statement herein required, so mailed or delivered to the mayor thereof, shall be deemed sufficient. In the case of public work by any county or any of its commissions, notice or statement herein required, so mailed, or delivered to the county mayor of such county, shall be deemed sufficient. In the case of public work by the state, or any of its commissions, notice and statement herein required, so mailed, or delivered to the governor, shall be deemed sufficient.

Acts 1925, ch. 121, § 4; Shan. Supp., § 3546a7; mod. Code 1932, § 7956; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), § 12-421; Acts 2003, ch. 90, § 2; 2004, ch. 542, § 1.

Compiler's Notes. Acts 2003, ch. 90, § 2, directed the code commission to change all references from “county executive” to “county mayor” and to include all such changes in supplements and replacement volumes for the Tennessee Code Annotated.

Textbooks. Gibson's Suits in Chancery (7th ed., Inman), § 470.

Tennessee Jurisprudence, 18 Tenn. Juris., Mechanics' Liens, §§ 14, 29; 19 Tenn. Juris., Municipal Corporations, § 75; 20 Tenn. Juris., Notice, § 3; 26 Tenn. Juris., Working Contracts, §§ 14, 19.

Law Reviews.

Contracts — 1964 Tennessee Survey (Paul J. Hartman), 18 Vand. L. Rev. 1115.

NOTES TO DECISIONS

1. Notice.

2. —Time for Filing.

Cashing by supplier of check marked “Acct. in full” did not constitute accord and satisfaction, where person with whom supplier had dealt as issuer-contractor's agent marked through the words prior to the cashing. Failure of surety on the bond to deny that timely notice of the claim was given and that suit was brought within six months after completion of the project in its answer denied it the right to rely on those defenses. Sawner v. M. P. Smith Constr. Co., 526 S.W.2d 492, 1975 Tenn. App. LEXIS 176 (Tenn. Ct. App. 1975).

3. —Waiver or Estoppel.

As to effect of waiver or estoppel upon defense of failure to give notice. Graybar Electric Co. v. New Amsterdam Casualty Co., 186 Tenn. 446, 211 S.W.2d 903, 1948 Tenn. LEXIS 567 (1948).

4. Recovery on Bond as Common Law Obligation.

Where contractor's bond for work to be done under the provisions of the Federal Emergency Administration Public Works Act (40 U.S.C. § 270a et seq.) provided that the contractor should assume all undertakings under the contract and should assure and protect all laborers and furnishers of material both under the provisions of code and “also independently of such statutes”, a materialman who did not give notice within the time provided by this section could recover on the bond as a valid common law obligation. Hogan v. Walsh & Wells, Inc., 180 Tenn. 670, 177 S.W.2d 835, 1944 Tenn. LEXIS 336 (1944).

Where, without reference to Tennessee statutes relating to contractor's bonds for public work, a labor and material payment bond to a county board of education eliminated requirement for notice within 90 days and provided for suit within one year, instead of six months after completion of work, materialman could sue within one year, without notice, as such extra-statutory provisions are enforceable as a valid common law obligation. National Surety Corp. v. Fischer Steel Corp., 213 Tenn. 396, 374 S.W.2d 372, 1964 Tenn. LEXIS 399 (1964).

When the bond involved is a common-law bond, the question is whether the plaintiff has complied with the bond's notice terms, not with the terms of the statutory notice requirement. Wal-Board Supply Co. v. Daniels, 629 S.W.2d 686, 1981 Tenn. App. LEXIS 584 (Tenn. Ct. App. 1981).

5. Requirements.

There is no requirement that claimants itemize and separate materials that were used in each of several improvements that might be constructed under one contract. Engert v. Peerless Ins. Co., 53 Tenn. App. 310, 382 S.W.2d 541, 1964 Tenn. App. LEXIS 105 (Tenn. Ct. App. 1964).

In a dispute over payment of a bond by a bonding company to an equipment leasing company, the leasing company's fraud in the claims process barred it from recovering anything under the payment bond, and the trial court erred in entering a judgment in favor of the leasing company against the bonding company. Nashville Ford Tractor, Inc. v. Great Am. Ins. Co., 194 S.W.3d 415, 2005 Tenn. App. LEXIS 840 (Tenn. Ct. App. 2005).

Decisions Under Prior Law

1. Notice.

2. —Time for Filing.

Where the receiver of a contract on a public building was enjoined from completing the contract, the filing of claims of laborers and materialmen within prescribed time from such injunction was sufficient compliance with this statute requiring such claims to be filed within prescribed time after the completion of the contract. Bristol v. Bostwick, 139 Tenn. 304, 202 S.W. 61, 1917 Tenn. LEXIS 107 (1918).

Materialmen and laborers, to avail themselves of a public contractor's bond, must file their claims within required period after the completion of the contract, or after the contractor's abandonment of the work. Cass v. Smith, 146 Tenn. 218, 240 S.W. 778, 1921 Tenn. LEXIS 14 (1922).

3. —Service by Whom.

Notice was not legal process, but it could be served by a deputy sheriff, deemed, as to the act, to be agent of the claimant. Henry Weis Mfg. Co. v. Jones, 4 Tenn. App. 374, — S.W. —, 1926 Tenn. App. LEXIS 191 (Tenn. Ct. App. 1926).

4. —Notice to Whom.

Materialmen and laborers, to avail themselves of a public contractor's bond, need not give contractor's surety notice of their claims. Bristol v. Bostwick, 146 Tenn. 205, 240 S.W. 774, 1921 Tenn. LEXIS 13 (1922).

Notice to one member of a board of education letting a schoolhouse construction contract was sufficient and was treated as notice to the whole board. Henry Weis Mfg. Co. v. Jones, 4 Tenn. App. 374, — S.W. —, 1926 Tenn. App. LEXIS 191 (Tenn. Ct. App. 1926).

5. Time of Completion.

6. —Fixing.

A public contractor and his surety, claiming that the contractor had not abandoned his contract, but was illegally deprived thereof by the city, could not insist upon any particular time as fixing the completion of the contract within this statute. Bristol v. Bostwick, 146 Tenn. 205, 240 S.W. 774, 1921 Tenn. LEXIS 13 (1922).

7. —Abandonment.

Temporary cessation of work or interference therewith, not acquiesced in by the contractor, did not work a forfeiture by the contractor of the public contract. Bristol v. Bostwick, 146 Tenn. 205, 240 S.W. 774, 1921 Tenn. LEXIS 13 (1922).

The abandonment or default of a public contractor, to constitute the expiration or completion of his contract, had to be such as to be legally binding upon him. Bristol v. Bostwick, 146 Tenn. 205, 240 S.W. 774, 1921 Tenn. LEXIS 13 (1922).

Materialmen's notice of claim against municipal contractor was valid as against the contractor's surety where it was given within required number of days after abandonment by the contractor, despite the fact that the surety took over and completed the work. Kimball v. Parks, 151 Tenn. 103, 268 S.W. 117, 1924 Tenn. LEXIS 49 (1925).

12-4-206. Joinder of parties — Limitation of actions.

Several persons entitled may join in one (1) suit on such bond, or one (1) of them may file a bill in equity in behalf of all such, who may, upon execution of a bond for costs, by petition assert their rights in the proceeding; provided, that action shall be brought or claims so filed within six (6) months following the completion of such public work, or of the furnishing of such labor or materials.

Code 1932, § 7959; T.C.A. (orig. ed.), § 12-422.

Textbooks. Tennessee Jurisprudence, 18 Tenn. Juris., Limitations of Actions, § 26; 19 Tenn. Juris., Municipal Corporations, § 75; 23 Tenn. Juris., Streets and Highways, § 18; 26 Tenn. Juris., Working Contracts, § 19.

Law Reviews.

Contracts — 1964 Tennessee Survey (Paul J. Hartman), 18 Vand. L. Rev. 1115.

NOTES TO DECISIONS

1. Purpose and Policy.

The purposes of this section were to prevent a multiplicity of suits and to fix a short period of limitation in which suits of this nature might be brought. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

2. Construction of Section.

This section which originated in the Code of 1932 is not to be regarded as an amendment to an earlier act but as a part of the Act of 1931 which promulgated the Code of 1932. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

Provision that if any limitation embodied in a labor and materials payment bond, given a county board of education, is prohibited by any law, such limitation be deemed amended to equal the minimum period of limitation permitted, did not reduce the contractual period of one year to six months fixed by this section to sue on the bond, since no law prohibited the contractual period of limitation contained in the bond. National Surety Corp. v. Fischer Steel Corp., 213 Tenn. 396, 374 S.W.2d 372, 1964 Tenn. LEXIS 399 (1964).

3. Applicability of Section.

The 1967 amendment to § 54-5-119 rendered the statute of limitations provided for in this section inapplicable to suits on highway contractors' bonds under § 54-5-119. United States Fidelity & Guaranty Co. v. Thompson & Green Machinery Co., 568 S.W.2d 821, 1978 Tenn. LEXIS 613 (Tenn. 1978).

The 1967 amendment of § 54-5-119 specifies the sole limitation on actions on highway contractors' bonds and, therefore, the notice provisions of § 12-4-205 do not apply in lieu of specific notice requirements in the Highway Act. United States Fidelity & Guaranty Co. v. Thompson & Green Machinery Co., 568 S.W.2d 821, 1978 Tenn. LEXIS 613 (Tenn. 1978).

4. Limitations.

Where subcontractor filed petition to intervene in proceeding for declaration of subcontractor's rights under surety bond within six months after substantial completion of construction, claim was deemed filed within the statutory period, even though petition was not entered of record until after the expiration of the statutory period. Engert v. Peerless Ins. Co., 53 Tenn. App. 310, 382 S.W.2d 541, 1964 Tenn. App. LEXIS 105 (Tenn. Ct. App. 1964).

Cashing by supplier of check marked “Acct. in full” did not constitute accord and satisfaction, where person with whom supplier had dealt as issuer-contractor's agent marked through the words prior to the cashing. Failure of surety on the bond to deny that timely notice of the claim was given and that suit was brought within six months after completion of the project in its answer denied it the right to rely on those defenses. Sawner v. M. P. Smith Constr. Co., 526 S.W.2d 492, 1975 Tenn. App. LEXIS 176 (Tenn. Ct. App. 1975).

5. —Waiver or Estoppel.

As to effect of waiver or estoppel upon statutory limitation. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943); Graybar Electric Co. v. New Amsterdam Casualty Co., 186 Tenn. 446, 211 S.W.2d 903, 1948 Tenn. LEXIS 567 (1948).

Where, without reference to Tennessee statutes relating to contractor's bonds for public work, a labor and material payment bond to a county board of education eliminated requirement for notice within 90 days and provided for suit within one year, instead of six months after completion of work, materialman could sue within one year, without notice, as such extra-statutory provisions are enforceable as a valid common law obligation. National Surety Corp. v. Fischer Steel Corp., 213 Tenn. 396, 374 S.W.2d 372, 1964 Tenn. LEXIS 399 (1964).

Where the construction bond provided that the defendant general contractor would protect furnishers of materials as required by the Public Works Act and also independently of the act, defendant waived the six-month period of limitations contained in this section, and the six-year period applicable to contracts generally pursuant to § 28-3-109 applied. Varner Constr. Co. v. Mid-South Specialties, Inc., 547 S.W.2d 569, 1977 Tenn. LEXIS 565 (Tenn. 1977).

6. —Several or Joint Action.

The six-month limitation of this section applies equally to suits brought by several materialmen and laborers under the provisions of this section and to separate suits brought by materialmen and laborers under § 12-4-204. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

7. —Suit by Laborers and Materialmen.

Where bond was executed for the two-fold purpose of securing performance of the contract and protecting laborers and materialmen, the obligations assumed with reference to the laborers and materialmen were those imposed by the statute and the bond was a statutory bond with reference to such persons so that they were governed by the limitation of this section in commencing suit even though the bond was for the full amount of the contract, contained no provision for notice of claim after completion of work or furnishing labor or materials or for avoiding further liability after due notice, contained no limitation for suit, expressly made materialmen and laborers obligees with right to sue, provided for amendment of the construction contract and continued liability thereafter and for extensions of the time of performance by the owner. Knoxville v. Melvin F. Burgess, Inc., 180 Tenn. 412, 175 S.W.2d 548, 1943 Tenn. LEXIS 16 (1943).

8. —Notice.

The state must give notice and bring suit against a surety within a reasonable time, according to the provisions of notice and suit on the bond itself. Griggs v. Peerless Ins. Co., 528 S.W.2d 182, 1975 Tenn. LEXIS 621 (Tenn. 1975).

12-4-207. Bond to pay taxes, licenses, and other amounts due.

  1. Any person, firm or corporation entering into a formal contract with this state, or any county thereof, municipality or political subdivision, or any public board, department, commission or institution thereof for the construction or maintenance of public buildings, works or projects, or the doing of repairs to any public building, works or projects, shall be required, before commencing on such work covered by such contract, to execute the usual bond with good and sufficient sureties, as required by law, with the additional obligation that such contractor shall promptly make payment of all taxes, licenses, assessments, contributions, penalties, and interest thereon when, and if, the same may be lawfully due this state, or any county, municipality or political subdivision thereof by reason of and directly connected with the performance of such contract or any part thereof. Any such bond shall be deemed to include the foregoing obligation irrespective of whether or not the same be expressly written into such bond.
  2. On any contract of less than ten thousand dollars ($10,000), the foregoing obligation need not be undertaken, nor shall it be implied, if the contractor presents sufficient evidence that the payments required by this section have been paid. The sufficiency of the evidence presented shall be determined in the following manner:
    1. The state building commission shall make the determination of sufficiency for projects under its jurisdiction pursuant to rules lawfully promulgated by the commission;
    2. The state procurement commission shall make the determination of sufficiency in any case involving any state agency, department or institution by whatever name called, except as otherwise provided by subdivision (b)(1) or (b)(4), pursuant to rules lawfully promulgated by the procurement commission;
    3. The governing bodies of counties and municipalities or appropriate central administrative authority designated by vote of the governing bodies shall make the determination of sufficiency in the case of county or municipal agencies pursuant to rules lawfully adopted by the governing bodies or their designated central administrative authority. In making such designations and developing such rules, county and municipal operating departments and agencies shall not be given authority to determine the application of this law to specific cases without the approval of some higher central authority, whether the governing body or some central administrative authority; and
    4. For other political subdivisions, public boards, departments, commissions or institutions not otherwise covered by subdivision (b)(1), (b)(2) or (b)(3), the legally constituted governing board, or, if such does not exist, the administrative authority shall make the determination of sufficiency pursuant to rules lawfully adopted by the board or authority.

Acts 1947, ch. 33, § 1; C. Supp. 1950, § 7955.1 (Williams, § 1689.6); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1978, ch. 694, § 1; T.C.A. (orig. ed.), § 12-423; Acts 2011, ch. 295, §§ 12, 19.

NOTES TO DECISIONS

1. Construction.

This section and § 12-4-208 are to be construed in pari materia. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

This section and § 12-4-208 do not create liability for taxes owed by a stranger to the bond. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

This section and § 12-4-208 do not create liability on the part of the principal and surety on bond of general contractor for unemployment compensation taxes incurred by subcontractor. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

The claims of the state, counties, municipalities, and political subdivisions thereof are placed in the same category as those of materialmen and laborers and are subject to the same restrictions and requirements as all others for whose benefit the bond was required. Griggs v. Peerless Ins. Co., 528 S.W.2d 182, 1975 Tenn. LEXIS 621 (Tenn. 1975).

2. Construction with Other Laws.

The reference in this section to “the usual bond with good and sufficient sureties, as required by law” refers to the bond required by § 12-4-201. Griggs v. Peerless Ins. Co., 528 S.W.2d 182, 1975 Tenn. LEXIS 621 (Tenn. 1975).

12-4-208. Action on bond.

In default of the prompt payment of all such taxes, licenses, assessments, contributions, damages, penalties and interest thereon, as may be due by any such contractor, a direct proceeding on the bond may be brought in any court of competent jurisdiction by the proper officer or agency having lawful authority so to do, to enforce such payment. The right to so proceed in this matter is cumulative and in addition to such other remedies as may now be provided by law.

Acts 1947, ch. 33, § 2; C. Supp. 1950, § 7955.1 (Williams, § 1689.7); T.C.A. (orig. ed.), § 12-424.

NOTES TO DECISIONS

1. Construction of Statute.

Section 12-4-207 and this section are to be construed in pari materia. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

Section 12-4-207 and this section did not create liability for taxes owed by a stranger to the bond. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

Section 12-4-207 and this section did not create liability on the part of the principal and surety on bond of general contractor for unemployment compensation taxes incurred by subcontractor. Scott v. Travelers Indem. Co., 215 Tenn. 173, 384 S.W.2d 38, 1964 Tenn. LEXIS 549 (1964).

The claims of the state, counties, municipalities, and political subdivisions thereof are placed in the same category as those of materialmen and laborers and are subject to the same restrictions and requirements as all others for whose benefit the bond was required. Griggs v. Peerless Ins. Co., 528 S.W.2d 182, 1975 Tenn. LEXIS 621 (Tenn. 1975).

Part 3
Reimbursement of Health Care Provider Costs

12-4-301. Establishment of rules and regulations for determining payment.

  1. It is hereby made the duty of the commissioner of health, in consultation with the comptroller of the treasury, to establish rules and regulations for the determination of payment to the contracting health care providers who contract with the several state agencies for the care of persons.
  2. This part shall not apply to health care providers, for purposes of payment to such health care providers pursuant to title 71, chapter 5, except as expressly provided by rules and regulations promulgated by the department of health pursuant to § 71-5-105; provided, that this part shall not apply to payments made pursuant to title 8, chapter 27.

Acts 1961, ch. 117, § 1; T.C.A., § 12-425; Acts 1984, ch. 787, § 1.

Compiler's Notes. Acts 1984, ch. 787, § 14, provided “Rules and regulations of the comptroller and other departments of state government affected by this act shall remain in effect until subsequently repealed. Rules and regulations promulgated hereunder may be initially promulgated as public necessity rules (now emergency rules) pursuant to Tennessee Code Annotated, § 4-5-209 (now § 4-5-208).”

Cross-References. Prompt payment for property and services, title 12, ch. 4, part 7.

12-4-302. Determination of payment.

For the purposes herein set out, payment shall be determined by the comptroller of the treasury in accordance with the rules and regulations established by the department of health pursuant to § 12-4-301, in consultation with the several state departments and agencies contracting with health care providers for services and the Tennessee Hospital Association.

Acts 1961, ch. 117, § 2; 1963, ch. 289, § 1; T.C.A., § 12-426; Acts 1984, ch. 787, § 2.

12-4-303. Eligibility to receive payment.

To be eligible to receive payment, the contracting health care providers shall use uniform statistics and classification of accounts as published by the American Hospital Association for all accounting records, or any other acceptable accounting methods approved by the department of health, in consultation with the comptroller of the treasury and the Tennessee Hospital Association.

Acts 1961, ch. 117, § 3; T.C.A., § 12-427; Acts 1984, ch. 787, § 3.

Cross-References. Medical assistance, payments to vendors, § 71-5-130.

12-4-304. Penalty for improper accounting.

For the purpose of this part, any contracting provider that does not adopt the uniform classification of accounts, or other acceptable accounting methods as shall be established by the department of health, in consultation with the comptroller of the treasury and the Tennessee Hospital Association, or does not submit cost data as required by the department, shall be assessed a penalty of ten dollars ($10.00) for each day such provider is not in compliance with this section.

Acts 1961, ch. 117, § 4; T.C.A., § 12-428; Acts 1984, ch. 787, § 4; 1988, ch. 779, § 1.

Cross-References. Medical assistance, payments to vendors, § 71-5-130.

12-4-305. Certification of figures — Noncertified statements.

The department of health, in consultation with the comptroller of the treasury, may require that figures submitted by the health care provider be certified by the administrator of the provider and by a licensed public accountant or certified public accountant. The final authority for the determination and certification of figures submitted by the provider to the department shall be the comptroller of the treasury; provided, that any provider that does not submit certified statements, when required, shall be assessed the penalty provided by § 12-4-304.

Acts 1961, ch. 117, § 5; 1974, ch. 487, § 1; T.C.A., § 12-429; Acts 1984, ch. 787, § 5; 1988, ch. 779, § 2.

12-4-306. Forms for reports and statements.

All forms for reporting figures by health care providers shall be designed and specified by the department of health, in consultation with the comptroller of the treasury and the state departments purchasing health care services and the Tennessee Hospital Association. All providers shall be required to submit statements on the form or forms prescribed and designed by the department for this purpose.

Acts 1961, ch. 117, § 6; T.C.A., § 12-430; Acts 1984, ch. 787, § 6.

12-4-307. Audits.

The comptroller of the treasury is empowered and has the right and privilege to audit any contracting health care provider to verify statements and data submitted by the provider; provided, that all legal aids granted to the comptroller of the treasury elsewhere, by law, are expressly reserved to the comptroller of the treasury in such audits.

Acts 1961, ch. 117, § 7; T.C.A., § 12-431; Acts 1984, ch. 787, § 7.

12-4-308. Reimbursement of licensed residential homes for mentally ill.

    1. The department of mental health and substance abuse services shall, by rule, establish a pilot program to reimburse licensed supportive living facilities for the mentally ill, as defined by departmental rules, in those counties having a population according to the 1980 federal census or any subsequent such census of:

      not less than  nor more than

      23,850  23,900

      26,400  26,500

      32,600 32,700

      32,760  32,800

      34,600  34,700

      56,000  56,100

      74,500 74,600

      287,700  287,800

      319,625 319,725

      400,000  500,000

      770,000  780,000

    2. The rules may, in the discretion of the department, distinguish between the types of facilities and between beds within a facility to implement the pilot program, the cost of which shall not exceed the amount provided for such purpose in the general appropriations act.
    1. The department shall reimburse licensed supportive living facilities for the mentally ill in a daily or monthly amount to be established by the department for each resident whose income is limited to payments under the Social Security Act (42 U.S.C. § 301 et seq.), and does not exceed the monthly SSI federal benefit rate (FBR). No supportive living facility participating in the pilot program shall receive reimbursement under the pilot program for more than thirty percent (30%) of its licensed residential capacity. If necessary to implement this program within the limits of its annual appropriation, the department may promulgate rules to further limit the number of residents for whom reimbursement may be claimed.
    2. For the period beginning January 1, 2006, and until May 4, 2006, only, any payments withheld due to a resident's income exceeding the six-hundred-dollar per month limit shall be paid in accordance with subdivision (b)(1).
    1. This section shall have no application unless funding is specifically provided for and included in the general appropriations bill. During any fiscal year, departmental reimbursement paid to licensed supportive living facilities under the authority of subsection (b) shall not exceed the level of funding specifically provided for such purpose within the general appropriations bill.
    2. The implementation of this section and the expenditure of any funds to implement such provisions shall be subject to the approval of the commissioner of finance and administration.
  1. The department is authorized to promulgate, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, such rules as may be necessary to effectively and efficiently implement this section.

Acts 1988, ch. 937, § 1; 1989, ch. 12, §§ 1, 2; 1990, ch. 870, §§ 1, 2; 1996, ch. 869, § 1; 1996, ch. 875, § 1; 2000, ch. 947, § 6; 2006, ch. 619, § 1; 2010, ch. 1098, § 3; 2010, ch. 1100, § 23; 2011, ch. 295, §§ 5, 14; 2012, ch. 575, § 1; T.C.A. § 12-4-330.

Code Commission Notes.

Former subsection (e), concerning evaluation and review of the effectiveness and utilization of the pilot program to reimburse licensed supportive living facilities for the mentally ill, was deleted as obsolete by the code commission.

The intention of Acts 2011, ch. 295, § 14, effective May 27, 2011, was to create an exception to Acts 2010, ch. 1098, § 3, which purported to substitute “chief procurement officer” for “commissioner of finance and administration” in (c)(2), to become effective October 1, 2011, so that this change would not be made in this code section.

This section was renumbered from § 12-4-330 to § 12-4-308 by authority of the Code Commission in 2019.

Compiler's Notes. For table of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

The federal benefit rate, referred to in this section, is compiled under Title XVI of the Social Security Act.

Acts 2010, ch. 1100, § 153 provided that the commissioner of mental health and developmental disabilities, the commissioner of mental health, the commissioner of intellectual and developmental disabilities, and the commissioner of finance and administration are authorized to promulgate rules and regulations to effectuate the purposes of the act. All such rules and regulations shall be promulgated in accordance with the provisions of the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Part 4
Prevailing Wage Act for State Highway Construction Projects

12-4-401. Short title.

This part shall be known and may be cited as the “Prevailing Wage Act for State Highway Construction Projects.”

Acts 1975, ch. 368, § 1; T.C.A., § 12-435; Acts 2013, ch. 280, § 1.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

Law Reviews.

Labor Law — 1963 Tennessee Survey (Paul H. Sanders & Harvey Couch), 17 Vand. L. Rev. 1091.

Attorney General Opinions. To the extent a city has been granted the power, it has the authority to establish a prevailing wage rate that adds benefits to, or exceeds the State prevailing wage rate, OAG 03-146, 2003 Tenn. AG LEXIS 168 (11/17/03).

12-4-402. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Commission” means the prevailing wage commission;
  2. “Highway contractor” means any contractor, subcontractor, person, firm, or corporation engaged in a state construction project for the purpose of building, rebuilding, locating, relocating, or repairing any public highway;
  3. “Prevailing wage” means the rate of pay as determined according to this part;
  4. “Public highway” means any street, road, highway, expressway, bridge, or viaduct, including an adjacent right-of-way, that is constructed or maintained by the state, or any municipality or political subdivision of the state, and that is funded in whole or in part with federal or state highway funds;
  5. “State contract” means any contractual agreement, written or oral, entered into by any person, firm or corporation with this state for the performance of work on a state highway construction project; and
  6. “State highway construction project” means any construction project for the purpose of building, rebuilding, locating, relocating, or repairing any public highway.

Acts 1975, ch. 368, § 1; T.C.A., § 12-436; Acts 2013, ch. 280, § 2; 2015, ch. 68, §§ 1, 2.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-403. Establishment and payment of prevailing wage.

  1. It is hereby declared to be the policy of this state that the prevailing wage rate be determined by defined standards and that such rate be paid workers on all state highway construction projects.
  2. Any highway contractor entering into a state contract for the performance of work on state highway construction projects shall pay not less than the prevailing wage rate for all types and classifications of such work as determined by this part.

Acts 1975, ch. 368, § 1; T.C.A., § 12-437; Acts 2013, ch. 280, §§ 3, 4.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-404. Prevailing wage commission.

  1. There shall be a prevailing wage commission composed of five (5) members, including the commissioner of labor and workforce development, who shall serve as chair, the state architect, and the commissioner of transportation or the commissioner's designee. Two (2) members shall be appointed by the governor who shall serve terms of two (2) years.
  2. The commission has the duty of determining the prevailing wage rate for state highway construction.
  3. All reimbursement for travel expenses shall be in accordance with the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter.

Acts 1975, ch. 368, § 1; 1976, ch. 806, § 1(54); T.C.A., § 12-438; Acts 1983, ch. 218, § 1; 1990, ch. 658, § 1; 1999, ch. 520, § 33; 2013, ch. 280, § 5.

Compiler's Notes. The prevailing wage commission, created by this section, terminates June 30, 2023. See §§ 4-29-112, 4-29-244.

Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-405. Determination of prevailing wage.

For purposes of this part, the prevailing wage rate shall be determined as follows:

  1. Every highway contractor, as herein defined, in this state, shall have the right to certify, on contracts entered into, to the commission, on or before October 31 in each year that a determination is to be made, the following:
    1. Copies of payroll records for the immediate preceding calendar quarter by area as defined in subdivision (2); and
    2. The numbers of hours worked and the straight time rate per hour paid for such hours in each of the classifications referred to in this part by area as defined in subdivision (2) for the immediate preceding calendar quarter;
  2. For purposes of calculating the prevailing wage rate for workers employed by highway contractors, the state shall be deemed to consist of one (1) statewide area;
  3. For purposes of determining the prevailing wage rate for workers employed by highway contractors, the commission may issue classifications of crafts of workers including, but not limited to, the following: bricklayers; iron workers, structural; iron workers, reinforcing; carpenters or leadspersons; cement masons; nozzlepersons or gunpersons (gunite); painters or sandblasters; shovel operators; backhoe operators; crane operators; end loaders; pile driver operators; motor patrols, finish; concrete paver operators; mechanics, Class I; mechanics, Class II; motor patrols (rough); bulldozer or push dozer operators; scraper operators; trenching machine operators; central mixing (asphalt or concrete); tractors, booms and hoists; concrete finishing machines; soil cement machines; asphalt pavers; rollers, high type; spreaders, self propelled; distributors, bituminous; roller, other than finish; tractor, crawler, utility; dozers or loaders, stock piles only; concrete mixers, less than one (1) yard; mulchers or seeders; earth drills; scale operators; tractors, farm; curb machines; ditch pavers; pump operators; concrete saws; guardrail erectors; sign erectors; motor crane drivers; fence erectors; firefighters; asphalt rakers; tract drill operators; concrete edgers; powder persons; form setters, steel rods; air tool operators; mortar mixers; chain saws; pipe layers; concrete rubbers; laborers; flaggers; oilers; welder's helpers; mechanic's helpers; electricians; truck drivers, two (2) and three (3) axles; truck drivers, four (4) and five (5) axles or more or heavy duty off-the-road trucks; welders, receive rate for craft performing operation to which welding is incidental;
  4. The prevailing wage rate for each area specified in subdivision (2) shall be determined by calculating the average hourly rate of pay for each classification referred to in subdivision (3). The commission shall determine the prevailing wage annually for highway construction from the documentation certified to the commission pursuant to subdivision (1). The commission, if it ascertains that current economic conditions warrant, can adjust the final wage determination as developed by the documentation certified to the commission by adding to or subtracting from the determination a percentage factor of not more than six percent (6%), based on the previous year's prevailing wage rates. Such determination shall be effective until the next determination of the prevailing wage rate pursuant to the terms hereof, unless herein otherwise specifically provided. The prevailing wage rate must be determined pursuant to this part and the failure of any highway contractor or contractors to provide the documentation referred to in subdivision (1) shall not affect such determination;
    1. The commission shall determine the prevailing wage rate pursuant to the terms of this part and give notice thereof on or before December 1 of each year a determination is to be made. The commission shall give notice of such prevailing wage rate to all highway contractors who submitted documentation in accordance with subdivision (1) and to any others making written request for such notice. Such notice shall include the time and place of the public hearing required by § 12-4-406. The commission shall take all reasonable steps to verify the survey results submitted to it by highway contractors pursuant to this part, and may, at any time, after first holding a public hearing thereon, adjust wage rates so that they reflect only survey data which has been verified by the commission;
    2. The prevailing wage commission is urged to continue its efforts to develop an internet application for the submission of survey forms by highway contractors and periodically update the general assembly on the progress of such development; and
  5. Until such time as the commission makes a prevailing wage rate determination pursuant to this part, the prevailing wage rate in effect on April 23, 1975, shall be considered to be the prevailing wage rate.

Acts 1975, ch. 368, §§ 1, 3; 1978, ch. 696, §§ 1-3; T.C.A., § 12-439; Acts 1983, ch. 218, § 2; 1991, ch. 36, § 1; 2004, ch. 538, § 1; 2013, ch. 280, §§ 4, 6, 8-10.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

Attorney General Opinions. Prevailing wage rates that were in effect on the date the bid was advertised should be incorporated into both the bid specifications and the construction contract itself, OAG 07-015, 2007 Tenn. AG LEXIS 15 (2/12/07).

Decisions Under Prior Law

1. Classification of Employees.

Subcontractor on state construction project was required to classify its own employees but in doing so would be limited to a classification based on the work performed by each employee. Burns v. Temperature Control Co., 52 Tenn. App. 51, 371 S.W.2d 804, 1962 Tenn. App. LEXIS 130 (Tenn. Ct. App. 1962).

12-4-406. Review of prevailing wage determination.

  1. The commission shall conduct a public hearing within ten (10) days of the notice required in § 12-4-405. At such public hearing, the commission shall present the documentation provided for in this part other than payroll records, and any other facts upon which the prevailing wage determination was made. Any interested party may present any other facts or documentation material to the determination of the prevailing wage rate at such hearing. Within ten (10) days after such public hearing, the commission shall give notice of its final determination on such prevailing wage rate to all highway contractors who submitted documentation in accordance with this part and to any others making written request for such notice.
  2. Judicial review of such final determination of the prevailing wage rate shall be in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Acts 1975, ch. 368, § 1; T.C.A., § 12-440; Acts 2013, ch. 280, § 6.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-407. Rates set out in specifications.

Before advertising for bids or entering into any contract for a state highway construction project, every state agency under whose jurisdiction such work is to be performed shall ascertain from the commission prevailing wage rates for all classifications as herein provided in the areas where the work is to be performed. This schedule of wages shall be attached to and made a part of the specifications for the work, and shall be printed on the bidding blanks and made a part of every contract for the construction of any state highway construction project.

Acts 1975, ch. 368, § 1; T.C.A., § 12-441; Acts 2013, ch. 280, § 7.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

Attorney General Opinions. Prevailing wage rates that were in effect on the date the bid was advertised should be incorporated into both the bid specifications and the construction contract itself, OAG 07-015, 2007 Tenn. AG LEXIS 15 (2/12/07).

12-4-408. Wage rates promulgated — Contract provision required.

After the prevailing wage determination has been made by the commission, the same shall be furnished to all state agencies which may be charged with the responsibility of entering into any state contract, and shall specify what wage rates shall be paid on all classifications of work that may be used by such person, highway contractors, firm or corporation in carrying out such contractual agreement. In all cases where the commission has established a prevailing rate of wages, the contract executed between any state agency and the successful bidder or highway contractors shall contain a provision requiring the successful bidder and all of the successful bidder's subcontractors to pay the rate of wages so established. The successful bidder or highway contractors and all subcontractors shall strictly comply with these provisions of the contract.

Acts 1975, ch. 368, § 1; T.C.A., § 12-442; Acts 2013, ch. 280, § 4.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-409. Bond for compliance.

In all cases where any state agency awards a contract for any state highway construction project under this part, the bond of the highway contractor or subcontractor shall contain a provision obligating such highway contractor or subcontractor to a faithful performance of each and every requirement imposed upon such highway contractor or subcontractor under the terms of this part.

Acts 1975, ch. 368, § 1; T.C.A., § 12-443; Acts 2013, ch. 280, §§ 7, 11.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-410. Posting of wage rates.

Each highway contractor and subcontractor subject to this part shall post and keep posted in a conspicuous place at the site of the construction work a copy of the prevailing wage rates prescribed in the state contract.

Acts 1975, ch. 368, § 1; T.C.A., § 12-444; Acts 2013, ch. 280, § 13.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-411. Payroll records of contractors.

  1. Any person, highway contractor, firm or corporation who may enter into any state contract shall furnish to the state agency entering into such contractual agreement any necessary forms, papers, payroll copies or any other information that may be required of any such person, highway contractor, firm or corporation by the state agency to show compliance with this part.
  2. Payroll records shall not be destroyed for one (1) year following the completion of the state highway construction project.

Acts 1975, ch. 368, § 1; T.C.A., § 12-445; Acts 2013, ch. 280, §§ 4, 7.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-412. Breach of contract provisions — Actions against highway contractors — Advertising and reletting contract.

The commission or any employee of any highway contractor or subcontractor whose wages are determined pursuant to this part may maintain an action against any highway contractor or subcontractor for the breach of any condition of any performance bond given under this part, and, in case of breach of any provision of such bond, the particular state agency which awarded the contract may advertise the work and relet the contract in the same manner as the original letting.

Acts 1975, ch. 368, § 1; T.C.A., § 12-446; Acts 2013, ch. 280, § 11.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-413. Delegation of administrative responsibilities.

The commission may delegate administrative responsibilities conferred hereunder to the department of labor and workforce development.

Acts 1975, ch. 368, § 1; T.C.A., § 12-447; Acts 1999, ch. 520, § 33.

12-4-414. Inspection of records.

All records and documentation provided for in this part, other than payroll records, shall be made available for public inspection by the commission and the department of labor and workforce development during normal business hours.

Acts 1975, ch. 368, § 1; T.C.A., § 12-448; Acts 1999, ch. 520, § 33.

NOTES TO DECISIONS

1. Construction With Other Law.

Trial court properly determined the Prevailing Wage Act did not implicitly exempt from disclosure under the Tennessee Public Records Act (TPRA) the residential addresses of employees of private contractors contained in payroll records submitted to the Convention Center Authority, a public entity, because the implicit exemption to the TPRA extended to payroll records under T.C.A. § 12-4-414, which referenced records to be held open for inspection by the Prevailing Wage Commission and the Department of Labor, was not applicable to the payroll records at issue; the information was requested by a citizen, who was also the business manager of a local union. Patterson v. Convention Ctr. Auth. of the Metro. Gov't of Nashville, 421 S.W.3d 597, 2013 Tenn. App. LEXIS 31 (Tenn. Ct. App. Jan. 17, 2013), appeal denied, — S.W.3d —, 2013 Tenn. LEXIS 686 (Tenn. Aug. 14, 2013).

12-4-415. Rules and regulations.

The commission may promulgate such rules and regulations, neither inconsistent nor contradictory with this part, which it deems necessary to effectuate this part.

Acts 1975, ch. 368, § 1; T.C.A., § 12-449.

Part 5
State Construction Projects Liability Act of 1977

12-4-501. Liability of contractor in construction projects.

This part shall be known as the “State Construction Projects Liability Act of 1977.”

Acts 1977, ch. 367, § 1; T.C.A., § 12-452.

12-4-502. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Acceptance” means notification by an authorized officer or employee of the state that the work completed has been in accordance with the terms and conditions of the state contract;
  2. “State” means the state of Tennessee;
  3. “State construction project” means any construction project for the purpose of erecting, remodeling, altering, repairing, demolishing, or making any additions to any building or buildings, any other type of building and construction work, or any construction project for the purpose of building, rebuilding, locating or relocating or repairing any streets, highways or bridges, wherein any state funds may be appropriated or expended for such building or construction work;
  4. “State contract” means any contractual agreement, written or oral, inclusive of plans and specifications incidental thereto, entered into by any person, firm or corporation with the state for the performance of work on a state construction project; and
  5. “State contractor” means any person, firm or corporation engaged in a state construction project pursuant to a state contract.

Acts 1977, ch. 367, § 2; T.C.A., § 12-452.

NOTES TO DECISIONS

1. Liability Discharged.

Summary judgment for a construction company was proper in a driver's action alleging that a low point in pavement caused him to lose control of his vehicle because the company supported with affidavits its position that it owed no liability to the driver; the affidavits stated that the company had completed the required construction, that the state accepted the company's work pursuant to the State Construction Projects Liability Act of 1977, T.C.A. §§ 12-4-502(1) and 12-4-503, that the company had turned all control of the highway over to the state, and that the Tennessee Department of Transportation accepted the project from it. Lee v. Lyons Constr. Co., — S.W.3d —, 2011 Tenn. App. LEXIS 674 (Tenn. Ct. App. Dec. 19, 2011), modified, 368 S.W.3d 510, 2012 Tenn. App. LEXIS 13 (Tenn. Ct. App. Jan. 10, 2012).

2. Acceptance.

Summary judgment in favor of a contractor in a driver's motor vehicle accident case was appropriate because the contractor established the State of Tennessee had accepted its road work, pursuant to the State Construction Projects Liability Act of 1977, T.C.A. §§ 12-4-502(1) and 12-4-503, and the memorandum and graph relied upon by the driver to defeat the contractor's motion were unauthenticated hearsay and not admissible in evidence as contemplated by Tenn. R. Civ. P. 56.06. Lee v. Lyons Constr. Co., 368 S.W.3d 510, 2012 Tenn. App. LEXIS 13 (Tenn. Ct. App. Jan. 10, 2012), appeal denied, — S.W.3d —, 2012 Tenn. LEXIS 283 (Tenn. Apr. 11, 2012).

12-4-503. Discharge of contractor from liability.

Upon acceptance by the state of a state contractor's work, provided that such state contractor's work is done in accordance with the plans and specifications, such state contractor is discharged from all liability to any party by reason of its lack of ordinary care in the performance of, or failure to perform, such work on such state construction project.

Acts 1977, ch. 367, § 3; T.C.A., § 12-452.

NOTES TO DECISIONS

1. Legislative Intent.

This section was intended to and does cover liability which may arise subsequently to the acceptance of the contractor's work by the state and pertains to the workmanship performed by the contractor, but does not operate to release and discharge a tortfeasor for damages caused to another merely by the state's acceptance of the work. Anthony v. Construction Products, Inc., 677 S.W.2d 4, 1984 Tenn. App. LEXIS 2880 (Tenn. Ct. App. 1984).

This statute was not intended nor does it apply to relieve the contractor of his obligation to respond in damages to one injured or damaged by the contractor's actions at the time of performing the work required by the contract. Anthony v. Construction Products, Inc., 677 S.W.2d 4, 1984 Tenn. App. LEXIS 2880 (Tenn. Ct. App. 1984).

2. Liability Discharged.

Summary judgment for a construction company was proper in a driver's action alleging that a low point in pavement caused him to lose control of his vehicle because the company supported with affidavits its position that it owed no liability to the driver; the affidavits stated that the company had completed the required construction, that the state accepted the company's work pursuant to the State Construction Projects Liability Act of 1977, T.C.A. §§ 12-4-502(1) and 12-4-503, that the company had turned all control of the highway over to the state, and that the Tennessee Department of Transportation accepted the project from it. Lee v. Lyons Constr. Co., — S.W.3d —, 2011 Tenn. App. LEXIS 674 (Tenn. Ct. App. Dec. 19, 2011), modified, 368 S.W.3d 510, 2012 Tenn. App. LEXIS 13 (Tenn. Ct. App. Jan. 10, 2012).

3. Liability Not Found.

Summary judgment in favor of a contractor in a driver's motor vehicle accident case was appropriate because the contractor established the State of Tennessee had accepted its road work, pursuant to the State Construction Projects Liability Act of 1977, T.C.A. § 12-4-503, and the memorandum and graph relied upon by the driver to defeat the contractor's motion were unauthenticated hearsay and not admissible in evidence as contemplated by Tenn. R. Civ. P. 56.06. Lee v. Lyons Constr. Co., 368 S.W.3d 510, 2012 Tenn. App. LEXIS 13 (Tenn. Ct. App. Jan. 10, 2012), appeal denied, — S.W.3d —, 2012 Tenn. LEXIS 283 (Tenn. Apr. 11, 2012).

4. Illustrative Cases.

Contractor that resurfaced a state highway was not entitled to summary judgment when a motorcyclist alleged that the motorcyclist was in an accident caused by loose gravel from the recent paving project on the state highway because the motorcyclist came forward with specific facts showing genuine issues for trial as to whether the contractor deviated from the plans and specifications by leaving loose gravel on the road before the final inspection. Flagg v. Hudson Constr. Co., — S.W.3d —, 2019 Tenn. App. LEXIS 264 (Tenn. Ct. App. May 28, 2019), appeal denied, — S.W.3d —, 2019 Tenn. LEXIS 474 (Tenn. Sept. 18, 2019).

Part 6
Ineligibility for Employment on Public Contracts

12-4-601. Other state entities.

As used in this part, “other state entities” includes counties, cities, municipalities, and any other political subdivision of this state.

Acts 1981, ch. 393, § 1.

12-4-602. Prohibition on solicitation of government contracts by those convicted of certain offenses.

  1. “Employment on any contract” means to perform services or provide materials to the state or subcontract to perform such services or provide such materials.
  2. It is unlawful for the following persons and business organizations to solicit employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities, for a period of twenty-five (25) years from the date of such person's or organization's conviction, except as provided in §§ 12-4-605 and 12-4-606:
    1. Persons, partnerships, joint ventures, firms or corporations who have pleaded guilty or nolo contendere to or have been convicted of violations of the Sherman Antitrust Act (15 U.S.C. § 1), mail fraud (18 U.S.C. § 1341), or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigation of such offenses;
    2. Corporations, publicly or closely held, where any officer, director, shareholder active in management or employee holding a similar managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses. This subdivision (b)(2) shall be applicable only where such officer, director, shareholder or employee committed such violation while acting as a representative of such corporation;
    3. Corporations, publicly or closely held, where any officer, director, shareholder active in management or employee holding a similar managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses, and where such corporations are formed subsequent to such plea or conviction;
    4. Partnerships where any partner has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses. This subdivision (b)(4) shall be applicable only where such partner committed such violation while acting as a representative of such partnership;
    5. Partnerships where any partner has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded in whole or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses, and where such partnerships are formed subsequent to such plea or conviction;
    6. Joint ventures or other associations where any joint venturer, managing agent, person entitled to share in the proceeds and engaged in the active management thereof, or person holding a managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities, or arising out of official investigation of such offenses. This subdivision (b)(6) shall be applicable only where such joint venturer, managing agent, person entitled to share in the proceeds, or person holding an executive position committed such violation while acting as a representative of such joint venture or association;
    7. Joint ventures or other associations where any joint venturer, managing agent, person entitled to share in the proceeds and engaged in the active management thereof, or person holding a managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses, and where such joint ventures or associations are formed subsequent to such plea or conviction; or
    8. Succeeding or related corporations, partnerships, joint ventures, or other business organizations which have substantial factual or legal connections, continuity or identity with persons or organizations that have pleaded guilty or nolo contendere or have been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state or other state entities or arising out of official investigations of such offenses. Determination of factual or legal connection, continuity or identity under this subdivision (b)(8) shall be made by the attorney general and reporter upon request of the succeeding or related business organization.

Acts 1981, ch. 393, § 1.

12-4-603. Notification of governmental entities by attorney general and reporter.

It is the responsibility of the attorney general and reporter to timely notify those state departments, agencies and other entities involved in letting or funding state or other state entity contracts of those persons and business organizations ineligible to solicit employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities.

Acts 1981, ch. 393, § 1.

12-4-604. Intentional violation of part — Penalty.

An intentional violation of this part is a Class E felony.

Acts 1981, ch. 393, § 1; 1989, ch. 591, § 25.

Cross-References. Penalty for Class E felony, § 40-35-111.

12-4-605. Applicability.

No person or business organization shall be prohibited by this part from soliciting employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities due to a conviction resulting from activities engaged in prior to May 22, 1981.

Acts 1981, ch. 393, § 1; 1989, ch. 366, § 4; 1991, ch. 114, § 1.

12-4-606. Exemptions.

The attorney general and reporter and the district attorneys general in their respective districts have the authority to grant exemptions from the prohibitions on soliciting employment on certain contracts enumerated herein to persons giving information to such officials in a criminal investigation or testifying in a state criminal trial in connection with any contract let or funded wholly or in part by the state or by other state entities or in a criminal trial arising out of official investigations of such offenses; provided, that such information or testimony results in a conviction. Such officials also have the authority to grant such exemptions to persons giving information to such officials in a civil investigation or testifying in a lawsuit brought by the state under the Sherman Antitrust Act (15 U.S.C. § 1), or title 47, chapter 25, in connection with any contract let or funded wholly or in part by the state or by other state entities; provided, that such information or testimony results in a monetary judgment for the state. Such exemptions may be total, limited to certain contracting agencies or departments, or limited in time.

Acts 1981, ch. 393, § 1.

Part 7
Prompt Pay Act of 1985

12-4-701. Short title.

This part shall be known and may be cited as the “Prompt Pay Act of 1985.”

Acts 1985, ch. 57, § 1.

12-4-702. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Acquire” means to derive a benefit from, whether by lease, grant, expenditure, or otherwise;
  2. “Agency” means any entity of the state government, as defined in § 4-5-102;
  3. “Business” means a business organization in any form, institution, association, profession, occupation or calling of any kind, whether or not conducted for profit;
  4. “Property” means anything of value, including, but not limited to, real estate, tangible and intangible personal property, contract rights, choses-in-action and other interests in or claims to wealth, admission or transportation tickets, captured or domestic animals, electric or other power and signatures which purport to create, maintain or extinguish any legal obligation; and
  5. “Service” means labor that does not include a tangible commodity. “Service” includes, but is not limited to: labor; professional advice; services provided by health care providers to medicaid recipients upon filing of a properly completed claim form; telephone, cable television and other utility service; accommodations in hotels, restaurants or elsewhere; admissions to exhibits and entertainments; the use of machines designed to be operated by coin or other thing of value; and the use of rented real or personal property.

Acts 1985, ch. 57, § 1; 1986, ch. 603, § 1; 1988, ch. 463, § 1.

12-4-703. When payment required.

An agency which acquires property or services pursuant to a contract with a business shall pay for each complete delivered item of property or service in accordance with the contract between the business and agency or, if no date or other provision for payment is specified by contract, within forty-five (45) days after receipt of the invoice covering the delivered items or services.

Acts 1985, ch. 57, § 1.

12-4-704. Interest.

  1. Interest shall accrue and be charged on payments overdue under § 12-4-703 at one and one-half percent (1½%) per month beginning on the day after payment is due.
  2. Interest which is unpaid at the end of each sixty-day period or at the end of any specified period provided by contract shall be added to the principal amount of the debt and shall thereafter accumulate interest.

Acts 1985, ch. 57, § 1.

12-4-705. Appropriations to pay interest prohibited.

An agency may not seek additional appropriations to pay interest which accrues as a result of its failure to make timely payments required by § 12-4-703.

Acts 1985, ch. 57, § 1.

12-4-706. Applicability of part.

This part is not applicable if an agency's failure to pay timely interest required by § 12-4-704 is the result of a dispute between the agency and the business over the amount due or over compliance with the contract.

Acts 1985, ch. 57, § 1.

12-4-707. Payments to subcontractors — Interest.

  1. Upon payment by an agency, a business which has acquired under contract, property or services in connection with its contract with such agency from a subcontractor or supplier shall pay the subcontractor or supplier within thirty (30) days after receiving payment from the agency.
  2. Interest at the rate of one and one-half percent (1½%) per month shall accrue and is due any subcontractor or supplier who is not paid within thirty (30) days after the business receives payment from the agency, unless otherwise provided by contract between the agency and the business, or by contract between the business and the subcontractor or supplier. Interest begins to accrue on the thirty-first day at the rate specified in this subsection (b).

Acts 1985, ch. 57, § 1.

Part 8
Bidding Preferences

12-4-801. Part definitions.

As used in this part, unless the context otherwise requires:

  1. “Public construction project” means and includes a public works project as defined in the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21;
  2. “Responsible bidder” means a person who has the capacity in all respects to perform fully the contract requirements, and the integrity and reliability which will assure good faith performance; and
  3. “Responsive bidder” means a person who has submitted a bid which conforms in all material respects to all documents, whether attached or incorporated by reference, utilized for soliciting bids.

Acts 1990, ch. 1062, § 2.

Cross-References. Advisory committee for use of the internet, title 12, ch. 3, part 11.

Distributing and posting solicitations and responses electronically, § 12-3-1004.

12-4-802. Allowance of bidding preferences — Reciprocity.

Whenever the lowest responsible and responsive bidder on a public construction project in this state is a resident of another state which is contiguous to Tennessee and which allows a preference to a resident contractor of that state, a like reciprocal preference is allowed to the lowest responsible and responsive bidder on such project who is either a resident of this state or is a resident of another state which does not allow for a preference to a resident contractor of that state.

Acts 1990, ch. 1062, § 3.

Attorney General Opinions. The state or a local government may, generally, constitutionally impose residency requirements or incentives that give preferential treatment to contractors that are either residents of the state or of the area encompassing a local government.  OAG 12-92, 2012 Tenn. AG LEXIS 90 (10/3/12).

Part 9
Freedom in Contracting Act

12-4-901. Short title.

This part shall be known and may be cited as the “Freedom in Contracting Act.”

Acts 2011, ch. 233, § 2.

Compiler's Notes. Acts 2011, ch. 233, § 7, provided that notwithstanding any other provision of law to the contrary, any provision of this part shall not apply to the extent that compliance with such provision would violate federal law or cause a loss of federal funding.

Acts 2011, ch. 233, § 8, provided that the act, which enacted this part,  shall apply to contracts entered into on or after July 1, 2011.

12-4-902. Purpose.

The purpose of this part is to prohibit public agencies from imposing certain labor and wage requirements as a condition of performing public works that are state funded in part or in whole.

Acts 2011, ch. 233, § 3.

Compiler's Notes. Acts 2011, ch. 233, § 7, provided that notwithstanding any other provision of law to the contrary, any provision of this part shall not apply to the extent that compliance with such provision would violate federal law or cause a loss of federal funding.

Acts 2011, ch. 233, § 8, provided that the act, which enacted this part,  shall apply to contracts entered into on or after July 1, 2011.

12-4-903. Prohibited provisions in bid specifications, project agreements and other documents.

The state and its political subdivisions, agencies and instrumentalities thereof, when engaged in procuring products or services or letting contracts to be funded in part or in whole with state funds, shall ensure that no bid specifications, project agreements and other controlling documents, entered into, required or subject to approval by the state, subdivision, agency or instrumentality:

  1. Require bidders, offerors, contractors or subcontractors to enter into or adhere to agreements with one (1) or more labor organizations on the same or related projects;
  2. Discriminate against bidders, offerors, contractors or subcontractors for refusing to become or remain signatories or otherwise adhere to agreements with one (1) or more labor organizations on the same or related construction projects; or
  3. Require any bidder, offeror, contractor or subcontractor to enter into, adhere to or enforce any agreement that requires its employees as a condition of employment to:
    1. Become members of or become affiliated with a labor organization or employee organization of any kind;
    2. Pay dues or fees to a labor organization or employee organization, over an employee's objection, in excess of the employee's share of labor or employee organization costs relating to collective bargaining, contract administration or grievance adjustment; or
    3. Require any bidder, offeror, contractor or subcontractor to pay:
      1. Wages that exceed:
  1. The state's most current prevailing wage scale established pursuant to part 4 of this chapter if the agreement involves a state highway construction project, as defined by § 12-4-402; or
  2. The Tennessee Occupational Wages Report, as defined by § 12-4-907, if the agreement involves a construction project other than a project described in subdivision (3)(C)(i)(a) ; or

A specific dollar amount for the provision of fringe benefits for employees.

Acts 2011, ch. 233, § 4; 2013, ch. 91, § 3; 2013, ch. 280, § 12; 2013, ch. 335, § 1.

Compiler's Notes. Acts 2011, ch. 233, § 7, provided that notwithstanding any other provision of law to the contrary, any provision of this part shall not apply to the extent that compliance with such provision would violate federal law or cause a loss of federal funding.

Acts 2011, ch. 233, § 8, provided that the act, which enacted this part,  shall apply to contracts entered into on or after July 1, 2011.

Acts 2013, ch. 91, § 5 provided that the act, which amended subdivision (3)(C)(i), shall apply to contracts entered into or renewed on or after April 11, 2013.

Acts 2013, ch. 280, § 18 provided that the act, which amended this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

Acts 2013, ch. 335, § 2 provided that the act, which amended this section, shall apply to any action filed on or after May 13, 2013.

12-4-904. Prohibition against issuing grants or agreements conditioned on prohibited provisions.

  1. The state and its political subdivisions, agencies and instrumentalities thereof shall not issue grants or enter into cooperative agreements for construction projects conditioned on a requirement that bid specifications, project agreements or other controlling documents pertaining to the grant or cooperative agreement contain any of the elements specified in § 12-4-903.
  2. The state and its political subdivisions or any agencies or instrumentalities thereof shall exercise such authority as may be required to preclude a grant recipient or party to a cooperative agreement from imposing any of the elements specified in § 12-4-903 in connection with any grant or cooperative agreement awarded or entered into.

Acts 2011, ch. 233, § 5.

Compiler's Notes. Acts 2011, ch. 233, § 7, provided that notwithstanding any other provision of law to the contrary, any provision of this part shall not apply to the extent that compliance with such provision would violate federal law or cause a loss of federal funding.

Acts 2011, ch. 233, § 8, provided that the act, which enacted this part,  shall apply to contracts entered into on or after July 1, 2011.

12-4-905. Standing to challenge bid specifications, project agreements or other agreements.

Any interested party, including a bidder, offeror, contractor, subcontractor, or taxpayer, shall have standing to challenge any bid specification, project agreement, controlling document, grant or cooperative agreement that such party alleges has violated this part. Such party shall be awarded costs and attorney's fees in the event that the challenge prevails.

Acts 2011, ch. 233, § 6.

Compiler's Notes. Acts 2011, ch. 233, § 7, provided that notwithstanding any other provision of law to the contrary, any provision of this part shall not apply to the extent that compliance with such provision would violate federal law or cause a loss of federal funding.

Acts 2011, ch. 233, § 8, provided that the act, which enacted this part,  shall apply to contracts entered into on or after July 1, 2011.

12-4-906. Employer to pay employees a wage necessary to meet the federal requirements to obtain federal funds.

If compliance with this part by the state and its political subdivisions, agencies and instrumentalities, relative to a specific contract, project, or program would result in the denial of federal funds that would otherwise be available to the state and its political subdivisions, agencies and instrumentalities, then the state or its political subdivisions, agencies or instrumentalities may require a private employer to pay its employees a wage necessary to meet the federal requirements to obtain the federal funds, but only relative to such contract, project or program.

Acts 2013, ch. 280, § 14.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which enacted this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

12-4-907. Meaning of the Tennessee occupational wages report.

For purposes of this part, Tennessee occupational wages report means the applicable report that is published by the department of labor and workforce development, employment security division.

Acts 2013, ch. 280, § 14.

Compiler's Notes. Acts 2013, ch. 280, § 18 provided that the act, which enacted this section, shall apply to contracts entered into or renewed on or after January 1, 2014.

Part 10
Insurance Purchasing Program

12-4-1001. Alternative methods for purchasing insurance.

The state treasurer shall investigate alternative methods, including competitive bidding, for purchasing insurance for the use and benefit of the state and its agencies, departments or divisions. The state treasurer shall prepare a plan for purchasing insurance, and shall submit the plan to the board of claims prior to its implementation.

Acts 1970, ch. 567, § 1; T.C.A., §§ 12-339, 12-3-501; Acts 1994, ch. 669, § 4; 2001, ch. 89, § 1; 2013, ch. 403, § 82; T.C.A. § 12-3-901.

Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-1002. Establishment of practices and procedures for purchasing insurance.

The state treasurer shall establish accepted practices and procedures to be followed in purchasing insurance under the plan developed under § 12-4-1001. Such practices and procedures shall be subject to the approval of the board of claims.

Acts 1970, ch. 567, § 2; impl. am. Acts 1972, ch. 543, § 7; T.C.A., §§ 12-340, 12-3-502; Acts 1994, ch. 669, § 5; 2001, ch. 89, § 2; 2013, ch. 403, § 82; T.C.A. § 12-3-902.

Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-1003. State employees and agents — Insurance sales to state prohibited.

All officers, officials, agents or employees of the state and its divisions, departments and agencies are prohibited from bidding, selling or contracting to sell any policy of insurance to the state or its divisions, departments and agencies.

Acts 1970, ch. 567, § 3; T.C.A., §§ 12-341, 12-3-503; Acts 2013, ch. 403, § 82; T.C.A. § 12-3-903.

Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-1004. Insurance on public buildings — Amount required — Deductibles.

All buildings and building contents owned by the state shall be insured for not less than their actual cash value subject to an aggregate deductible of not less than one million five hundred thousand dollars ($1,500,000) and to such individual claim deductible as may be commercially reasonable.

Acts 1971, ch. 425, § 1; T.C.A., § 12-342; Acts 1980, ch. 464, § 1; T.C.A. § 12-3-504; Acts 2013, ch. 403, § 82; T.C.A. § 12-3-904.

Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-1005. Insurance on public buildings — Repair or replacement costs.

The repair or replacement of damaged or destroyed buildings and building contents shall include engineering and other services necessary for such an insurance program to be paid from the risk management fund created pursuant to § 9-8-109.

Acts 1971, ch. 425, § 2; T.C.A., §§ 12-343, 12-3-505; Acts 2003, ch. 212,  5; 2013, ch. 403, § 82; T.C.A. § 12-3-905.

Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-1006. Establishment of policies and procedures for administration of insurance program.

The state treasurer shall establish appropriate policies and procedures governing the administration of the insurance program provided herein, including the allocation of premium and other costs and the payment of losses from the risk management fund created pursuant to § 9-8-109. Such policies and procedures shall be subject to the approval of the board of claims.

Acts 1971, ch. 425, § 3; T.C.A., §§ 12-344, 12-3-506; Acts 1994, ch. 669, § 6; 2001, ch. 89, § 3; 2003, ch. 212, § 6; 2013, ch. 403, § 82; T.C.A. § 12-3-906.

Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

12-4-1007. Procedure for obtaining policies — Reporting.

    1. The policy or policies of insurance provided in this part shall be obtained by the state treasurer subject to the approval of the board of claims. Notwithstanding the Surplus Lines Insurance Act, compiled in title 56, chapter 14, or any other law to the contrary, the state treasurer, with the approval of the board of claims, shall consider proposals from admitted carriers and nonadmitted surplus lines carriers. In order for nonadmitted carriers to be eligible for consideration under this section, at least two (2) admitted carriers must have declined to submit a proposal, and the nonadmitted carriers shall:
      1. Have a minimum A.M. Best financial strength rating of “A-” and an A.M. Best financial size category of no less than “VI”, or such other A.M. Best rating as may be established by the board of claims provided that the financial strength rating shall not be less than “A-” and the A.M. Best financial size category shall not be less than “VI”; and
      2. Be a member of an insurance holding company system, as defined in § 56-11-101(b), that has at least one (1) affiliate carrier admitted in this state as a property or casualty insurer.
    2. Should A.M. Best change or amend its rating methodology, then the board of claims shall adopt a minimum rating requirement that is equivalent to the rating as stated in subdivision (a)(1)(A). The state treasurer shall place the insurance directly with the companies without policies being countersigned notwithstanding § 56-2-409.
  1. The state treasurer shall make periodic reports to the fiscal review committee of the general assembly and to the state building commission concerning the operations of the insurance program.

    Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1971, ch. 425, § 5; T.C.A., §§ 12-346, 12-3-508; Acts 1994, ch. 669, § 7; 2001, ch. 89, § 4; 2007, ch. 168, § 1; 2010, ch. 993, § 2; 2013, ch. 403, § 82; T.C.A. § 12-3-908.

    Compiler's Notes. Former title 12, ch. 3, part 9, §§ 12-3-90112-3-908 (Impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1970, ch. 567, §§ 1-3;  1971, ch. 425, §§ 1-5; impl. am. Acts 1972, ch. 543, § 7; Acts 1980, ch. 464, § 1; T.C.A., §§ 12-339 — 12-346, 12-3-50112-3-508; Acts 1994, ch. 669, §§ 4-7; 2001, ch. 89, §§ 1-4; 2003, ch. 212, §§ 5, 6; 2007, ch. 168, § 1; 2010, ch. 993, § 2), was transferred to title 12, ch. 4, part 10 by Acts 2013, ch. 403, §§ 82, effective July 1, 2013.

Acts 2013, ch. 403, § 83 provided that the act, which transferred former title 12, ch. 3, part 9 to this part, shall apply to contracts entered into or renewed on and after July 1, 2013.

Title 56, chapter 14, part 1 referenced in (a)(1) was renumbered as title 56, chapter 14 by the authority of the code commission in 2016.

Chapter 5
Public Printing

12-5-101. Supervision by department of general services.

The department of general services has entire charge and supervision of all printing done for each and every department or branch of government of the state, including all departmental offices and all charitable, penal, educational or reform institutions.

Acts 1915, ch. 45, § 1; Shan., § 1a2; impl. am. Acts 1923, ch. 7, §§ 2, 3, 20; mod. Code 1932, § 29; impl. am. Acts 1937, ch. 33, § 42; impl. am. Acts 1939, ch. 11, § 23; mod. C. Supp. 1950, § 29; impl. am. Acts 1953, ch. 163, § 29; impl. am. Acts 1959, ch. 9, § 5; impl. am. Acts 1961, ch. 97, § 5; impl. am. Acts 1972, ch. 543, § 7; T.C.A. (orig. ed.), § 12-502; T.C.A. § 12-5-101.

Compiler's Notes. Former § 12-5-101 (Acts 1909, ch. 346, § 1; Shan., § 1a15; Code 1932, § 45; T.C.A. (orig. ed.), § 12-501), concerning the definition of public printing and the preference for Tennessee printers, was repealed by Acts 1981, ch. 332, § 26.

Former §§ 12-5-10312-5-124 (Code 1858, §§ 19-21 (deriv. Acts 1841-1842, ch. 120, §§ 1-3); Acts 1859-1860, ch. 97, § 2; 1895, ch. 169, §§ 11-13, 15-17, 26; 1915, ch. 45, §§ 3-12; 1927, ch. 48, § 1; Shan., §§ 1a7-1a14, 11-13, 15-17, 28, 38-39; Code 1932, §§ 31-33, 36-38, 40, 41, 43, 44, 46-48, 50-52, 64-68; C. Supp. 1950, §§ 31, 32, 34-38, 40, 43, 44, 46, 65, 66, 68; Acts 1972, ch. 598, § 1; T.C.A. (orig. ed.), §§ 12-503 — 12-516, 12-518 — 12-520, 12-533 — 12-537), concerning public printing, were repealed by Acts 1981, ch. 332, § 26. For supervision by the department of general services, see the present section.

Cross-References. Powers of department of general services, § 4-3-1105.

12-5-102. Cost data for public documents.

    1. Every department or agency of the state which promulgates public documents shall cause the following statement with cost data inserted to be printed on the publication adjacent to the identification of the agency responsible for the publication:

      “This public document was promulgated at a cost of $  per copy.”

    2. This statement shall be printed in either the same size type as the body copy of the publication or in such type style and size to be fully legible and set in a box composed of a light-weight-rule line.
  1. As used in this section, unless the context otherwise requires, “public document” means any annual, biennial, regular or special report or publication of which at least one thousand (1,000) copies are printed and which may be subject to distribution to the public, or any printed material which is controlled by the publications committee established in chapter 7, part 1 of this title, regardless of the number of copies produced. Public documents include:
    1. The acts and journals of the general assembly, the reports of the supreme court and such other courts as shall have their decisions reported by the attorney general and reporter or shall be required by any act or resolution of the general assembly;
    2. The periodic reports of officers of the state and any special reports that may from time to time be made by state officers or committees of the general assembly or other committees provided for by law;
    3. Such other reports or statements as may be published under the authority of the state or any official thereof; and
    4. Items exempted from the requirements of this section include letterhead stationery, envelopes, or memoranda and correspondence utilizing a manual signature and not reproduced through a printing related function;
  2. For the purposes of this section, the following two (2) factors shall be utilized in computing cost data whether on bid by a private person or company, or by a state institution:
    1. Preparation.  Included in this is expenditure for materials, artwork and typesetting involved in preparing the public document for publication; and
    2. Printing.  Included in this is expenditure for reproduction, binding and other printing industry related functions.
  3. This section shall be enforced and administered through the publications committee created pursuant to chapter 7, part 1 of this title. The publications committee may, in its discretion, render opinions to agencies as to whether those agencies are in compliance with this section. If the committee decides that those agencies are not in compliance, it has authority to direct those agencies to cease publication of the public documents which are not in compliance until such time as compliance shall be demonstrated to the committee's satisfaction.

Acts 1977, ch. 398, §§ 1-4; T.C.A., § 12-538; Acts 1983, ch. 82, §§ 1-3; T.C.A. § 12-5-102.

Chapter 6
Distribution of Publications

12-6-101. Chapter definitions.

As used in this chapter:

  1. “Non-depository publication” means printed and electronic publications not collected by state depository libraries, including, but not limited to:
    1. Ephemeral materials, such as business cards, stationery, invitations, postcards, and flyers;
    2. Publications created for state agency internal use, such as handbooks, manuals, conference items of temporary use, instructional items, and agendas;
    3. Agency materials not distributed outside of the creating agency, such as working papers, internal newsletters, internal memoranda, and confidential material; and
    4. Reprints of federal materials;
  2. “Publication” includes any newsletter, stationery, greeting card, report, or printed or electronic material produced in any format for distribution outside the creating department or agency, including those published by facilities not operated by the state; and
    1. “State depository publication” includes:
      1. The acts and journals of the general assembly, the reports of the supreme court, and such other courts that have their decisions reported by the attorney general and reporter, or that are required to be reported by any act or resolution of the general assembly;
      2. The regularly published reports of officers of this state and any special reports that may from time to time be published by state officers or committees of the general assembly or other committees provided for by law, including, but not limited to:
  1. Public and private acts;
  2. Court reports and opinions;
  3. Rules and regulations;
  4. Budget, revenue, and tax report documents;
  5. Annual and biennial reports;
  6. Vital statistics, court statistics, and census reports;
  7. Periodic and special reports;
  8. State plans and strategic plans;
  9. Tennessee Blue Book;
  10. Fact books;
  11. Maps;
  12. Magazines;
  13. External newsletters (those available for public information); and
  14. Such other reports or statements published under the authority of the state, or any official thereof; and

“State depository publication” does not include non-depository publications.

Code 1858, § 22 (deriv. Acts 1831, ch. 2, § 9); Shan., § 40; Acts 1923, ch. 101, § 2; Code 1932, § 69; T.C.A. (orig. ed.), § 12-601; Acts 1981, ch. 191, § 1; 1984, ch. 798, § 2; 2019, ch. 8, § 1.

Amendments. The 2019 amendment rewrote the section, which read: “Each member of the general assembly is entitled to one (1) copy of the printed acts of the general assembly of which such person was a member, which shall be delivered to such member's legislative office in Nashville, but only upon written request to the secretary of state by such member not later than February 1 of each year.”

Effective Dates. Acts 2019, ch. 8, § 9. March 13, 2019.

Cross-References. English deemed official and legal language, § 4-1-404.

12-6-102. General distribution of acts.

  1. It is the duty of the secretary of state to distribute the printed acts, upon written request received not later than February 1 of each year, as follows: to each executive officer and Tennessee public utility commission commissioner of the state, one (1) copy; to each judge and each clerk of the supreme, appeals, circuit, criminal and general sessions courts, one (1) copy; to each chancellor, each clerk and master, one (1) copy; to each district attorney general and each assistant, one (1) copy; to the attorney general and reporter and each assistant, one (1) copy; to each clerk of the probate courts and each judge of the county or probate courts, and to each register and each trustee, and each assessor of property, one (1) copy; each of the copies to belong to the indicated office, and go to the successor of the incumbent; also to the order of the University of Tennessee, up to thirty (30) copies for the use of the University of Tennessee as a depository and for exchanges.
  2. A copy of the printed acts shall be, upon written request received not later than February 1 of each year, delivered to every organized bar association in this state; provided, that such bar association maintains a law library; and provided the name and address of such bar association shall be certified to the secretary of state by the county clerk of the county in which the association exists; and provided further, that should the association cease to function or to maintain a law library, all copies of the acts shall thereupon be turned over and delivered to the county clerk.
  3. Bound volumes of acts or resolutions may be made available to any person, firm or corporation, requesting same in writing not later than February 1 of each year, at a price to be fixed by the secretary of state not to exceed per volume printing cost.
  4. Any requests for acts or resolutions received later than February 1 of each year will be accepted subject to availability.
  5. This section and §§ 12-6-101 and 12-6-103 shall not apply to the Tennessee Code Annotated, any supplement thereto or replacement volume thereof, or any act enacting that code.

Code 1858, § 30; Shan., § 42; Acts 1923, ch. 101, § 2; mod. Code 1932, § 70; Acts 1935, ch. 181, § 2; 1941, ch. 22, § 1; mod. C. Supp. 1950, § 70; modified; impl. am. Acts 1955, ch. 69, § 1; Acts 1961, ch. 290, § 1; modified; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 12-602; Acts 1981, ch. 191, §§ 2-5; 1988, ch. 745, § 1; 1991, ch. 98, § 1; 1994, ch. 622, § 1; 1995, ch. 305, § 98; 2017, ch. 94, § 32.

Cross-References. Printing and distribution of school laws, § 49-1-201.

Tennessee Code Annotated, §§ 1-1-1051-1-113.

Law Reviews.

The Tennessee Court Systems — Prosecution, 8 Mem. St. U.L. Rev. 477.

12-6-103. Publication of acts and journals.

The secretary of state shall also make available additional copies of the acts by publishing the acts in electronic format on the department of state's website. Each house shall make available copies of their journals by publishing the journals in electronic format on their respective websites.

Code 1858, § 31; Shan., § 43; mod. Code 1932, § 71; T.C.A. (orig. ed.), § 12-603; Acts 2015, ch. 305, § 1.

12-6-104. Shipment of acts.

The secretary of state shall cause the acts for the several officers whose offices are not at the capitol to be safely packed and boxed, and to be shipped prepaid in the way most feasible.

Code 1858, § 32; Acts 1873, ch. 63; Shan., §§ 44-46; Acts 1923, ch. 101, § 4; mod. Code 1932, §§ 72-74; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A. (orig. ed.), § 12-604; Acts 1981, ch. 191, § 6.

12-6-105. Penalty for failure to distribute acts.

  1. If the printer or secretary of state fails to perform such printer's or secretary of state's duties, the printer or secretary of state shall forfeit five hundred dollars ($500), to be recovered in the name and for the use of the state by the comptroller of the treasury.
  2. Moreover, such failure is a Class C misdemeanor, and the comptroller of the treasury shall cause the delinquent to be indicted for the same.
  3. The comptroller of the treasury shall forfeit the sum of five hundred dollars ($500), to be recovered by any person who will sue for the same, if the comptroller of the treasury fails to enforce the aforementioned penalties against the printer and secretary of state.

Code 1858, §§ 26-28; Shan., §§ 47-49; Code 1932, §§ 75-77; T.C.A. (orig. ed.), § 12-605; Acts 1989, ch. 591, § 113.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

12-6-106. All other public documents.

All other public documents, required to be distributed by law, may be distributed with the acts and journals.

Code 1858, § 37; Shan., § 54; Code 1932, § 78; T.C.A. (orig. ed.), § 12-606; Acts 1984, ch. 798, § 7; 2017, ch. 111, § 1.

Cross-References. Reporting requirement satisfied by notice to general assembly members of publication of report, § 3-1-114.

12-6-107. Libraries as depositories for state documents and state depository publications — Copies — Legislative reference and law library.

  1. The state library and archives at Nashville, the John C. Hodges Library of the University of Tennessee, at Knoxville, the Benjamin L. Hooks Central Library at Memphis, the Ned R. McWherter Library at the University of Memphis, the Sherrod Library at East Tennessee State University, and such other libraries as the governor may at any time name by executive order are designated depositories for state documents and for all state depository publications issued by any official of the state.
  2. Upon request of a designated depository of state depository publications, such depository is entitled to receive, without charge, one (1) copy of the bills, resolutions, amendments, daily journals, informational services showing committee actions and the status of pieces of legislation, daily calendars, published committee reports, and any official or unofficial published index.
  3. To ensure access of all state depository publications to members of the general assembly without the expense of furnishing copies for each member, all state documents and state depository publications otherwise distributed to depository libraries must be distributed to the legislative reference and law library for the use of the general assembly.

Acts 1917, ch. 42, § 1; Shan. Supp., § 1387a7; Code 1932, § 2283; T.C.A. (orig. ed.), § 12-607; Acts 1981, ch. 191, § 7; 1984, ch. 798, § 3; 1984, ch. 903, § 1; 2019, ch. 8, § 2.

Amendments. The 2019 amendment, in (a), inserted “and archives”, substituted “John C. Hodges Library of the University of Tennessee, at Knoxville, the Benjamin L. Hooks Central Library at Memphis, the Ned R. McWherter Library at the University of Memphis, the Sherrod Library at East Tennessee State University,” for “library of the University of Tennessee at Knoxville, the Cossitt Library at Memphis”, and inserted “state depository”, in (b), substituted “depository publications” for “document” and substituted “is entitled” for “shall be entitled”; in (c), inserted “depository” following “access of all state”, inserted “state depository” following “all state documents and”, and substituted “libraries must be distributed to the legislative reference and law library” for “libraries shall also be distributed to the legislative library”.

Effective Dates. Acts 2019, ch. 8, § 9. March 13, 2019.

12-6-108. Printed copy of acts for members of the general assembly — Written request requirements.

Each member of the general assembly is entitled to one (1) copy of the printed acts of the general assembly of which the person was a member, which must be delivered to the member's legislative office in Nashville, but only upon written request to the secretary of state by the member not later than February 1 of each year.

Acts 1917, ch. 42, § 4; Shan. Supp., § 1387a11; Code 1932, § 2287; T.C.A. (orig. ed.), § 12-608; 2019, ch. 8, § 3.

Amendments. The 2019 amendment rewrote the section, which read: “The publications and documents referred to shall include: (1) The acts and journals of the general assembly, the reports of the supreme court, and such other courts as shall have their decisions reported by the attorney general and reporter, or shall be required by any act or resolution of the general assembly; (2) The periodical reports of officers of the state and any special reports that may from time to time be made by state officers or committees of the general assembly or other committees provided for by law; and (3) Such other reports or statements as may be published under the authority of the state, or any official thereof.”

Effective Dates. Acts 2019, ch. 8, § 9. March 13, 2019.

12-6-109. Notice of publications — Access to state electronic publications.

At least quarterly, a list of all publications must be provided by the department of general services to the Tennessee state library and archives and other state depository libraries. Notice of publication and access to state electronic publications must be provided to all state depository libraries.

Acts 1917, ch. 42, § 3; Shan. Supp., § 1387a10; Code 1932, § 2286; T.C.A. (orig. ed.), § 12-609; Acts 1981, ch. 191, § 8; 2019, ch. 8, § 4.

Amendments. The 2019 amendment rewrote the section, which read: “The person or persons in charge of the making of such documents and publications as are at any time issued by the state, or by any official or officials of the state, shall furnish a list of such documents and publications to the secretary of state.”

Effective Dates. Acts 2019, ch. 8, § 9. March 13, 2019.

12-6-110. Copies to depositories, legislative reference and law library, secretary of state, and commissioner of general services.

At the expense of each department, agency, board, or commission, the person in charge of making documents and publications shall distribute or have distributed:

  1. One (1) copy of all state depository publications to the librarian, person, or persons in charge of each of the depositories and the legislative reference and law library;
  2. Upon request, two (2) copies of all state depository publications to the secretary of state; and
  3. Upon request, two (2) copies of all state depository publications to the commissioner of general services.

Acts 1917, ch. 42, § 2; Shan. Supp., § 1387a8; mod. Code 1932, § 2284; C. Supp. 1950, § 2284; T.C.A. (orig. ed.), § 12-610; Acts 1981, ch. 191, § 9; 1981, ch. 81, § 1; 2019, ch. 8, § 5.

Amendments. The 2019 amendment, in the introductory language, substituted “each” for “such”, deleted “such” preceding “documents”, substituted “distribute or have distributed” for “furnish or have furnished”; rewrote (1), which read: “Two (2) copies directly to the librarian or person in charge of each of the depositories;”; inserted “of all state depository publications” in (2); and rewrote (3), which read: “Two (2) copies to any location or locations specified by the proper governing publications committee created pursuant to chapter 7, part 1 of this title.”

Effective Dates. Acts 2019, ch 8, § 9. March 13, 2019.

12-6-111. Exchange copies for university.

Upon request by the University of Tennessee, the person in charge of the making of such publications or the issuance of such documents shall furnish the university up to thirty (30) copies of each publication or document.

Acts 1935, ch. 181, § 3; C. Supp. 1950, § 2284; T.C.A. (orig. ed.), § 12-611; Acts 1981, ch. 191, § 10.

12-6-112. Care of depository copies.

The librarian or other person in charge of each depository shall receive and carefully preserve all state documents and publications, both printed and electronic, so received.

Acts 1917, ch. 42, § 2; Shan. Supp., § 1387a9; Code 1932, § 2285; T.C.A. (orig. ed.), § 12-612; Acts 2019, ch. 8, § 6.

Amendments. The 2019 amendment, in the first sentence, deleted “It is the duty of” from the beginning, substituted “shall receive” for “to give receipt for”, inserted “both printed and electronic”, and deleted the second and third sentences, which read: “One (1) of the two (2) copies shall be lendable on application, to the persons, if any, allowed to take other books from the library of the depository. The other copy shall not be allowed to be taken from the premises of the depository.”

Effective Dates. Acts 2019, ch. 8, § 9. March 13, 2019.

12-6-113. Exchanges by state librarian.

The state librarian and archivist may, from time to time, procure from the general government, any foreign government, or from any state or territory within the United States, the public acts, and law and equity reports of such government, state or territory, by exchanging the public acts or reports of this state.

Code 1858, § 38 (deriv. Acts 1843-1844, ch. 135, § 2); impl. am. Priv. Acts 1859-1860, ch. 53, § 2; Acts 1879, ch. 31, §§ 1, 6; Shan., § 55; mod. Code 1932, § 79; impl. am. Acts 1951, ch. 197, § 1; T.C.A. (orig. ed.), § 12-613.

12-6-114. [Repealed]

Acts 1879, ch. 31, § 8; Shan., § 51; mod. Code 1932, § 80; impl. am. Acts 1951, ch. 197, § 1; T.C.A. (orig. ed.), § 12-614; Acts 1981, ch. 191, § 11; repealed by Acts 2019, ch. 8, § 8, effective March 13, 2019.

Compiler's Notes. Former § 12-6-114, concerned delivery of exchange copies.

12-6-115. Rules regarding state depository publications in electronic format.

The secretary of state shall promulgate rules to effectuate the preservation, distribution, accessibility, and availability of state depository publications in electronic format. The rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Acts 2019, ch. 8, § 7.

Compiler's Notes. Former § 12-6-115 (Code 1858, § 39 (deriv. Acts 1843-1844, ch. 135, § 1); Shan., § 56; mod. Code 1932, § 81; C. Supp. 1950, § 81; T.C.A. (orig. ed.), § 12-615), concerning expense of exchanges, was repealed by Acts 1981, ch. 191, § 13. For present law, see § 8-1-106.

Effective Dates. Acts 2019, ch. 8, § 9. March 13, 2019.

12-6-116. Copies of acts — Acts on the internet.

The secretary of state is authorized to furnish to any person, firm, or corporation, so requesting in writing, copies of the public acts of the general assembly which are prepared at intervals during and after each legislative session and made available online pending publication of the bound volumes of the public acts of Tennessee, for that session. Notwithstanding any other law, the secretary of state is authorized to fulfill this chapter and § 8-3-104 by publishing the text of the public acts in electronic form by use of the internet.

Acts 1970, ch. 460, § 1; T.C.A., § 12-616; Acts 1981, ch. 191, § 12; 1990, ch. 1024, § 14; 1994, ch. 622, § 2; 1999, ch. 150, § 2; 2017, ch. 111, §§ 2, 3.

Cross-References. Electronic general assembly journals, § 12-6-119.

Report of local action included in published volume, § 8-3-204.

Attorney General Opinions. The secretary of state fulfills his duty to publish the acts of the general assembly by publishing them in electronic form via the internet, OAG 07-018, 2007 Tenn. AG LEXIS 18 (2/16/07).

12-6-117. Certain resolutions not to be printed or distributed — Distribution to state library and archives and legislative reference and law library.

  1. Notwithstanding any law to the contrary, resolutions of the general assembly that honor or commend individuals or groups or that express sympathy or condolences upon the death of an individual shall not be printed in the Acts of Tennessee, nor shall such resolutions be distributed in accordance with this chapter, unless the secretary of state, in consultation with the speaker of the senate and speaker of the house of representatives, determines that the resolution requires printing due to the prominence of or contributions made by such person or group. The secretary of state shall publish all resolutions in electronic form by use of the internet.
  2. The secretary of state shall deliver one (1) copy of all resolutions that are not printed pursuant to this section to the state library and archives and to the legislative reference and law library.

Acts 1981, ch. 109, § 3; 2017, ch. 111, §§ 4, 5.

12-6-118. Automatic and other distributions.

Except for exchange and depository copies provided for herein, there shall be no automatic distribution of any state report or publication, unless such distribution is required by an act or resolution enacted after May 25, 1984. Any other distribution must be approved by the state publications committee, as provided for in chapter 7, part 1 of this title, or be upon individual request of a person entitled to or desirous of receipt of any such publication or report.

Acts 1984, ch. 798, § 4.

12-6-119. Electronic general assembly journals.

Copies of the journals of the house of representatives and the senate may be distributed to depository libraries in electronic format rather than in bound volumes.

Acts 1999, ch. 150, § 1.

Cross-References. Public Acts on the internet, § 12-6-116.

Chapter 7
State Publications Committees

Part 1
General Provisions

12-7-101. Control of cost and proliferation of publications and reports — Permanent record of publications.

In order to control the cost and proliferation of publications and reports printed by state agencies, the commissioner of general services shall provide a permanent record of publications issued by state government and shall have authority to issue regulations implementing provisions concerning designation in such a manner as to provide for maximum continuity of the publications.

Acts 1976, ch. 694, § 1; 1979, ch. 296, § 1; T.C.A., § 12-1001; Acts 1990, ch. 1024, § 1; 2008, ch. 1120, § 2.

Compiler's Notes. The state agencies publication committee, created by this section, was terminated by Acts 2008, ch. 1120, § 2, effective June 13, 2008.

12-7-102. Duties of commissioner of general services.

  1. It is the duty of the commissioner of general services to establish rules and regulations to control the costs and quantity of all publications, and to promulgate rules and regulations governing the printing and distribution of state agency reports and publications issued by agencies and departments of the government of this state, excluding institutions of higher education, the judicial branch of state government and those state institutions and facilities exempted from public purchase laws in § 12-3-103. For purposes of this part, rules of the publications committee in existence on May 1, 2008, shall be deemed rules of the commissioner of general services.
  2. The rules and regulations on distribution shall include a provision stipulating that there shall be no automatic distribution of reports or publications, except the distribution provided for in chapter 6 of this title, or otherwise by law or resolution enacted after May 25, 1984, but that all distributions must either be approved in general by the commissioner of general services or be made upon request by the recipient.
  3. It also is the duty of the commissioner of general services to establish a procedure for reviewing all publications as defined in subsection (e), and to approve or disapprove the printing of existing publications and planned publications that come under this part.
  4. The commissioner of general services shall determine the need for existing and planned publications based upon the agency's goals and purpose or statutory requirements, and the quantity and distribution of each approved publication.
  5. “Publications” includes any newsletter, stationery, greeting card, report or printed material produced for distribution outside the department or agency for which the report or printed material is printed, including those printed at facilities not operated by the state.
  6. The commissioner of general services may appoint a designee to fulfill the responsibilities laid out in this section.

Acts 1976, ch. 694, § 2; T.C.A., § 12-1002; Acts 1980, ch. 742, §§ 1, 2; 1982, ch. 563, § 4; 1984, ch. 798, § 5; 1990, ch. 1024, §§ 2, 3; 2008, ch. 1120, § 2.

12-7-103. Approval required.

  1. No publication, coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, shall be printed unless it has been approved in accordance with rules promulgated by the commissioner of general services. Rules set forth by the commissioner of general services shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
  2. The commissioner of general services shall require any publication printed to include the number of copies printed.
  3. The commissioner of general services shall not approve any publication that purports to contain a citation to or a reproduction of a duly promulgated agency rule, as defined by the Uniform Administrative Procedures Act, in § 4-5-102, prior to receiving a written statement from the secretary of state or the secretary of state's representative verifying the fact that the rule so cited or reproduced has been duly promulgated and is currently in effect.
  4. A printing authorization number shall be assigned to each publication that has been approved as required by this section. The printing authorization number shall be affixed to the publication adjacent to the identification of the agency responsible for the publication. No printing facility operated by the state shall print any publication, coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, unless the printing authorization number has been affixed as required by this subsection (d). No contract shall be entered into, nor requisition issued, nor acted upon, by any state department or agency, including, but not limited to, the division of purchasing, for printing of any publication coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, at any facility, unless the printing authorization number has been affixed as required by this subsection (d). All state contracts or grant agreements, including, but not limited to, all contracts for personal, professional and consultant services entered into under former §§ 12-4-109 and 12-4-110 [repealed], that involve or may involve the printing of any publication, coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, shall contain a provision whereby the contractor or grantee agrees that no publication shall be printed unless a printing authorization number has been obtained and affixed as required by this section.
  5. Whenever any department, institution or agency of the state government contracts for the printing of a publication coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, and the publication has not been approved in accordance with rules promulgated by the commissioner of general services, the contract shall be void and of no effect.

Acts 1976, ch. 694, § 3; T.C.A., § 12-1003; Acts 1980, ch. 455, § 1; 1982, ch. 563, §§ 5, 6; 1983, ch. 80, §§ 1, 2; 2008, ch. 1120, § 2.

Compiler's Notes. Former §§ 12-4-109 and 12-4-110, referred to in this section, were recodified by Acts 2013, ch, 403, effective July 1, 2013.  Provisions similar to former § 12-4-109 were transferred to other sections within title 12, ch. 3, parts 1 and 3. Provisions similar to former § 12-4-110 were transferred to § 12-3-303.

12-7-104. Publications information required.

The commissioner of general services shall, as a minimum, keep the following information on each approved publication:

  1. Name of publication;
  2. Department producing publication;
  3. Purpose and brief description of publication contents;
  4. Number of copies authorized to be printed;
  5. A general list of distribution; and
  6. Estimated cost of preparation and printing.

Acts 1976, ch. 694, § 4; T.C.A., § 12-1004; Acts 1990, ch. 1024, § 4; 2008, ch. 1120, § 2.

12-7-105. Requested material to be provided — Cooperation required.

It is the duty of all departments, institutions or agencies of state government to furnish to the commissioner of general services all material requested from the commissioner regarding publications and reports.

Acts 1976, ch. 694, § 5; T.C.A., § 12-1005; Acts 2008, ch. 1120, § 2.

12-7-106. [Repealed.]

Acts 1976, ch. 694, § 6; T.C.A., § 12-1006; Acts 1980, ch. 455, § 2; 1982, ch. 563, §§ 7-9; 1984, ch. 798, § 6; 1998, ch. 581, § 2; 2002, ch. 758, § 3, repealed by Acts 2015. ch. 87, § 2, effective April 9, 2015.

Compiler's Notes. Former § 12-7-106 concerned higher education and technical institutions publication committee; establishment; duties.

Acts 2015, ch. 87, § 5 provided that, notwithstanding § 4-29-112, the higher education and technical institutions publication committee, created by § 12-7-106, shall terminate and shall cease to exist upon April 9, 2015.

12-7-107. Approval procedure.

The approval procedure for publications established under this part may allow one-time approval of a publication that is printed on a periodic basis and that conforms to the format, design, and purpose of the publication as originally presented to the commissioner of general services for approval without requiring review and approval of subsequent issues of the publication.

Acts 1976, ch. 694, § 7; T.C.A., § 12-1007; Acts 2008, ch. 1120, § 2; 2015, ch. 87, § 3.

12-7-108. Exceptions to Part.

The requirements of this part do not apply to any student newspaper publication or annuals and/or yearbooks.

Acts 1976, ch. 694, § 8; T.C.A., § 12-1008.

Part 2
Use of Alkaline Paper

12-7-201. Legislative findings and declarations.

The general assembly finds and declares that the use of alkaline paper for the publication of state records and documents of enduring value is a social and moral imperative to preserve our collective knowledge and heritage for the future. To this end, the general assembly declares it to be the public policy of this state to utilize alkaline paper in the printing and/or publication of permanent state records and documents whenever feasible.

Acts 1995, ch. 114, § 2.

Cross-References. School recycling program, § 49-6-1020.

12-7-202. State records and documents to be printed on alkaline paper.

Each department, board, commission, agency or other entity of state government, including state institutions of higher education, shall use alkaline paper that meets or exceeds the American National Standards Institute standard for permanent paper for printed library materials (ANSI Z39.48), as approved by the commissioner of general services, for the printing or publication of all permanent state records or documents.

Acts 1995, ch. 114, § 3; 2008, ch. 1120, § 3.

12-7-203. Administration and enforcement — Approved list of alkaline papers.

The commissioner of general services is charged with the responsibility of administering and enforcing this part. The commissioner of general services shall provide to each department, board, commission, agency or other entity of state government an approved list of alkaline papers that meet or exceed the standard for permanent paper established in § 12-7-202.

Acts 1995, ch. 114, § 4; 2008, ch. 1120, § 4.

12-7-204. County and municipal governments.

The general assembly further urges and encourages all county governments, municipal governments and other local governmental entities to utilize alkaline paper that meets the ANSI Z39.48 standard when such governments print and/or publish public records and documents of enduring value.

Acts 1995, ch. 114, § 7.

12-7-205. Rules and regulations.

The commissioner of general services is authorized to promulgate rules and regulations to effectuate the purposes of this part. All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

Acts 1995, ch. 114, § 6; 2008, ch. 1120, § 5.

12-7-206. Construction with § 20-6-103.

Nothing in this part shall be construed to supersede § 20-6-103. To the extent that this part is in conflict with § 20-6-103, § 20-6-103 shall control.

Acts 1995, ch. 114, § 5.

Chapter 8
Sale of Products

12-8-101. Local government ownership and operation of hot mix asphalt facility or aggregate production facility.

  1. Notwithstanding any other provision of law to the contrary, local governments may, individually or jointly, own or operate a facility for the manufacture or production of hot mix asphalt, in accordance with the restrictions and limitations provided for in this section.
    1. A local government desiring to own or operate a hot mix asphalt facility shall prepare a financial feasibility study, referred to as “study” in this section, that analyzes all appropriate costs and benefits related to the operation of the plant.
    2. The study required by this section shall be prepared in compliance with generally accepted governmental accounting and financial reporting standards and shall include the following:
      1. Accurate production cost estimates, including debt service and depreciation on the asphalt plant and necessary ancillary equipment, and all other fixed and variable plant operating costs, including, but not limited to, capital cost of equipment and installation, land acquisition, personnel costs, employer fixed costs, materials, transportation, utility costs and all costs associated with environmental and safety compliance standards. This report shall be completed in general compliance with the comptroller of the treasury's asphalt production cost models;
      2. An estimate of the potential cost savings in materials and transportation and operational costs that may be realized by the local government operating the proposed facility, including a record of competitive bids, F.O.B. at plant, for asphalt that the local government or governments have received in recent years, including the current year, and an examination of bids received by comparable local governments;
      3. An estimated need for paving or hot mix asphalt for fifteen (15) years that demonstrates that the local government or governments would produce the volume necessary to realize a cost savings by owning or operating an asphalt facility;
      4. Offers from suppliers of the necessary raw materials showing that those suppliers will sell materials to the local government or governments at competitive prices, and the locations of those suppliers; and
      5. Estimates of whether the operation of a facility by the local government would have a significant impact on the local economy and state and local tax revenues, including sales and use tax, local option sales tax, mineral severance tax, business tax, and real and personal property tax.
    1. Whenever a local government proposes to own or operate a hot mix asphalt facility pursuant to this section and develops the feasibility study required by subsection (b), such study shall be submitted for review to a financial feasibility oversight committee, referred to as the “committee” in this section. The committee shall consist of three (3) members. One (1) member shall be selected by the Tennessee Road Builders Association; one (1) member shall be selected by the Tennessee County Highway Officials Association; and one (1) member shall be selected by the comptroller of the treasury. All expenses relating to the committee shall be solely and equally shared by the Tennessee Road Builders Association and the Tennessee County Highway Officials Association.
    2. Once a feasibility study has been prepared by a local government, a copy of such study shall be delivered to the comptroller of the treasury and a copy shall be provided to the mayor or chief executive officer of the local government to be made available to the public for inspection and review. Within fifteen (15) days of receiving the study, the comptroller shall notify the Tennessee Road Builders Association and the Tennessee County Highway Officials Association of the need for a committee to be appointed and shall name the comptroller's appointee to the committee. Within fifteen (15) days of receiving notice from the comptroller, the Tennessee Road Builders Association and the Tennessee County Highway Officials Association shall name their appointees to the committee. Committee members shall receive a copy of the committee report immediately upon designation of membership. Within thirty (30) days of the appointment of the committee, the mayor or chief executive officer of the local government desiring to own or operate a hot mix asphalt facility shall establish a meeting date for the committee. Not less than ten (10) days prior to the meeting, the local government shall provide public notice of the date, time and location of the meeting in a newspaper of general circulation in the jurisdiction of the government where the facility is proposed. The meetings of the committee shall be open to the public and all records of the committee shall likewise be open to public inspection. The member of the committee appointed by the comptroller shall serve as chair of the committee and conduct the meetings of the committee.
    3. The sole function of the financial feasibility oversight committee shall be to review the feasibility study, to determine that all appropriate ordinary and necessary capital and operational costs for a local government to own and operate a hot mix asphalt manufacturing facility have been included in the study and have been publicly disclosed.
    4. Once the review has been completed, the feasibility oversight committee shall either:
      1. Approve the study, if, in the determination of the committee, the study includes all significant costs and accurately estimates the costs and benefits of owning and operating a facility; or
      2. Disapprove the study, if, in the determination of the committee, the study is incomplete and lacks substantial information to provide an accurate estimate of the costs and benefits of owning or operating a plant.
    5. If the committee determines that the feasibility study is incomplete, the committee shall indicate in writing those items that the study lacks and shall return the study to the submitting entity for modification and resubmission. If, after a second resubmission, a majority of the committee still determines that the study is incomplete, the study shall then be forwarded to the governing body of the submitting entity with a negative recommendation from the committee and shall include written comments indicating those areas where the study is insufficient.
    6. The determination of the committee shall be forwarded to the governing body of the government or governments desiring to own or operate the facility within thirty (30) days after the committee meets to review the study.
    7. If the membership of the feasibility oversight committee does not unanimously agree as to whether the study is sufficient, the committee shall forward two (2) written reports to the local governing body, stating the majority and minority positions of the committee and indicating the reasons why the members of the committee approve or disapprove of the study.
  2. After receiving the report of the financial feasibility oversight committee, the governing body shall examine the feasibility study, all supporting documentation and the determination and written comments of the oversight committee, and shall approve or deny any action to acquire an asphalt facility in a resolution or ordinance passed by a two-thirds (2/3) vote of the governing body, before the local government expends any public funds for the purpose of acquiring a hot mix asphalt facility.
  3. For the purpose of this section, the term “local government” is defined to include any county or incorporated municipality. Two (2) or more local governments may own or operate a facility jointly. For jointly owned or operated facilities, all local governments desiring to participate in the operation of the facility must be a part of the initial feasibility study for the facility.
  4. Any unit of local government owning or operating a facility for the manufacture or production of hot mix asphalt shall comply with any state rule, regulation or standard for the quality of asphalt used in the construction of roads, streets or highways.
  5. Nothing in this section shall be considered a limitation or prohibition on the state or any political subdivision, including counties and municipalities, from expanding, replacing, altering or continuing any plant or facility for the manufacture or production of hot mix asphalt in existence on March 29, 1976. This section shall not apply to a metropolitan government, and nothing in this section shall be construed as limiting the authority of a metropolitan government to own or operate a plant or facility for the production or manufacture of hot mix asphalt.
  6. For any local government owning or operating a plant or facility for the production or manufacture of asphalt pursuant to the authority granted by this section, the comptroller of the treasury, or a private auditor or firm approved by the comptroller, shall conduct an annual audit of such facility regularly, on a time interval to be determined by the comptroller.
  7. Asphalt produced in a facility operated by any local government, pursuant to the authority granted in this section, shall be used exclusively for paving of public streets, roads or highways under the discretion and control of that unit of local government. Each unit of local government operating a facility, pursuant to the authority granted in this section, shall keep a detailed inventory and record that complies with generally acceptable governmental accounting standards, of where all asphalt products produced by the facility are used.
  8. A local government that owns or operates an asphalt facility shall be required to solicit bids annually for hot mix asphalt products. In advertising for bids, the local government shall explicitly reserve the right to reject any and all bids. The local government shall have the undisputed authority to reject all bids and continue to utilize its own asphalt facility for all or a portion of its asphalt needs. The requirements of this subsection (j) shall not apply to any local government that owns or operates an asphalt facility on June 7, 2005.
  9. A local government that does not own or operate an aggregate production facility, such as a quarry or other facility for the production of crushed limestone, commercial lime, agricultural lime, sand, gravel, or any other product resulting from the processing of aggregate on June 7, 2005, shall be prohibited from acquiring such facility, unless the local government prepares a financial feasibility study comparable to the one required in subsection (b) for asphalt facilities, and submits the study for review to the oversight committee established in subsection (c). The procedures for review and approval of the study shall be substantially the same as that for asphalt facilities and all other costs that are specific to an aggregate production facility. The acquisition of such facility shall also require the passage of a resolution or ordinance by a two-thirds (2/3) vote of the governing body of the local government. The aggregate production facility owned or operated by a local government may transfer aggregate only to an entity of that local government; provided, that the governing body of the local government that operates the facility first conducts a study to determine the actual costs of producing the materials and requires reimbursement of actual costs to the unit of local government operating the aggregate production facility.

Acts 1955, ch. 96, § 1; 1963, ch. 338, § 1; 1976, ch. 767, §§ 1, 3; T.C.A. (orig. ed.), § 12-701; Acts 2005, ch. 344, § 1.

Cross-References. Private use of county road equipment and materials prohibited, § 54-7-202.

Attorney General Opinions. Population-based exemptions of former subdivision (b)(3) unconstitutional, OAG 99-037, 1999 Tenn. AG LEXIS 14 (2/22/99).

Applicability of grandfather clause to replacement asphalt plant, OAG 99-037, 1999 Tenn. AG LEXIS 14 (2/22/99).

County authority to provide crushed stone to entities outside county, OAG 99-058, 1999 Tenn. AG LEXIS 41 (3/10/99).

12-8-102. Penalty — Injunctive relief.

Any state, county, or municipal officer violating this chapter, or knowingly permitting any provision of such chapter to be violated, commits a Class C misdemeanor. In addition to such penalty, injunctive relief may be had against a violator of this chapter by petition addressed to the chancellor of the judicial district in which such violation is alleged to have taken place.

Acts 1955, ch. 96, § 2; 1976, ch. 767, § 2; T.C.A., § 12-702; Acts 1989, ch. 591, § 113.

Cross-References. Penalty for Class C misdemeanor, § 40-35-111.

12-8-103. Gratuitous work for nonprofit organizations — Sales to farmers.

Nothing in this chapter shall prohibit or be construed as prohibiting the county road commission, the state, or any municipality or its agents, from doing work gratuitously for cemeteries, churches, schools, and any other charitable nonprofit organization, or from making sales of agricultural lime to farmers for use in connection with their own farming activities.

Acts 1955, ch. 96, § 3; T.C.A., § 12-703.

Cross-References. Misuse of county money or property by chief administrative officer, § 54-7-206.

Use of county equipment or material for private purposes, § 54-7-202.

Attorney General Opinions. County authority to provide crushed stone to entities outside county, OAG 99-058, 1999 Tenn. AG LEXIS 41 (3/10/99).

Chapter 9
Interlocal Cooperation Act

12-9-101. Short title.

This chapter may be cited as the “Interlocal Cooperation Act.”

Acts 1967, ch. 350, § 2; T.C.A., § 12-801.

Cross-References. Agreements with other states concerning medical laboratories, §§ 68-29-102, 68-29-133.

Cooperation between departments of state government, § 4-4-112.

Garbage services, cooperation with county, title 5, ch. 19.

Housing of convicted felons by counties, § 41-8-106.

Interlocal cooperation, ambulance services, § 7-61-104.

Interlocal cooperation, counties with contiguous counties, § 5-1-114.

Interlocal cooperation, counties with municipalities, § 5-1-113.

Interlocal cooperation, fire fighting, municipalities, title 6, ch. 54, part 6.

Interlocal cooperation, home mortgages, § 7-60-217.

Interlocal cooperation, joint building inspectors, municipalities not exceeding 25,000 population, § 6-54-116.

Interlocal cooperation on transportation systems, title 7, chapter 56.

Joint educational facilities and services, title 49, ch. 2, part 13.

Joint municipal and county park and recreation systems, § 11-21-112.

Municipal police powers, mutual aid agreements, § 6-54-307.

Law Reviews.

Selected Tennessee Legislation of 1986, 54 Tenn. L. Rev. 457 (1987).

Attorney General Opinions. Interlocal agreements under T.C.A. §§ 12-9-101 et seq., OAG 06-081, 2006 Tenn. AG LEXIS 90.

Interlocal agreements to provide cable services. OAG 12-15, 2012 Tenn. AG LEXIS 15 (2/15/12).

NOTES TO DECISIONS

1. Legislative Intent.

This chapter provides no substantive rights or obligations but is simply a procedural statute which enables political subdivisions to combine efforts to achieve common goals. The legislature's failure to include an exculpatory clause does not imply that the legislative branch intended to impose liability on political subdivisions which join together under this chapter. Foster Wheeler Energy Corp. v. Metropolitan Knox Solid Waste Authority, Inc., 970 F.2d 199, 1992 U.S. App. LEXIS 16712 (6th Cir. Tenn. 1992), rehearing denied, 970 F.2d 199, 1992 U.S. App. LEXIS 20940 (6th Cir. 1992).

12-9-102. Purpose.

It is the purpose of this chapter to permit local governmental units the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage and thereby provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population, and other factors influencing the needs and development of local communities.

Acts 1967, ch. 350, § 1; T.C.A., § 12-802.

12-9-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Local government entity” means any city, town, municipality, county, including any county having a metropolitan form of government, local education agency, development district, utility district, human resource agency or other political subdivision of this state;
  2. “Local government joint venture entity” means any entity created pursuant to this chapter, including, but not limited to, a self-insurance pool, trust, joint venture, nonprofit organization, or any other type of organization that is sponsored, owned, operated, or governed by two (2) or more local government entities as a separate and specific activity;
  3. “Public agency” means:
    1. Any political subdivision of this state;
    2. Any private incorporated fire department and industrial fire department not supported by public funds or which are only partially supported by public funds;
    3. Any incorporated rescue squad that is not supported by public funds or that is only partially supported by public funds;
    4. Any agency of the state government or of the United States; and
    5. Any political subdivision of another state; and
  4. “State” means a state of the United States.

Acts 1967, ch. 350, § 3; T.C.A., § 12-803; Acts 1983, ch. 45, § 2; 1995, ch. 17, § 1; 2006, ch. 923, § 1.

12-9-104. Interlocal agreements.

    1. Any power or powers, privileges or authority exercised or capable of exercise by a public agency of this state, including those provided in § 6-54-307 or § 68-221-1107(b), may be exercised and enjoyed jointly with any other public agency of this state having the power or powers, privilege or authority, and jointly with any public agency of any other state or the United States to the extent that laws of such other state or of the United States permit such joint exercise or enjoyment. Any agency of the state government when acting jointly with any public agency may exercise and enjoy all of the powers, privileges and authority conferred by this chapter upon a public agency. The authority for joint or cooperative action of political subdivisions shall apply to powers, privileges or authority vested in, funded by, and/or under the control of their governing bodies and relative to which the governing bodies may make other types of contracts. No joint or cooperative agreement shall be entered into affecting or relating to the constitutional or statutory powers, privileges or authority of officers of political subdivisions, or of agencies of political subdivisions with a separate governing board and having powers granted by statute independent of the governing body. Notwithstanding any provision of the law to the contrary, any municipality may enter into an agreement with the sheriff, court of general sessions, and the governing body of any county in which it is located to provide for the enforcement of the municipality's ordinances according to §§ 8-8-201(a)(34) and 16-15-501. The agreement between the municipality and the county governing body shall be limited to provide that the cost of such enforcement will be borne by the municipality where the court costs paid over to the county, as provided by § 16-15-501, are not adequate.
    2. Agencies of political subdivisions that have governing boards separate from the governing bodies of the political subdivisions may make agreements for joint or cooperative action with other such agencies and with other public agencies. The power to make joint or cooperative agreements includes any power, privilege or authority exercised or that may be exercised by each of the agencies that is a party to the agreement. Agreements between agencies of political subdivisions that have separate governing boards and other such agencies and agreements between such agencies and public agencies shall substantially conform to the requirements of this chapter. The governing bodies of such political subdivisions shall require agreements made by their agencies pursuant to this chapter to be submitted to the governing body for approval before the agreements take effect.
  1. Any two (2) or more public agencies may enter into agreements with one another for joint or cooperative action pursuant to this chapter. Appropriate action of the governing bodies of the participating public agencies by resolution or otherwise pursuant to law shall be necessary before any such agreement may enter into force.
  2. Any such agreement shall specify the following:
    1. Its duration;
    2. The precise organization, composition and nature of any separate legal or administrative entity or entities created thereby, which may include, but is not limited to, a corporation not-for-profit, together with the powers delegated to such a corporation;
    3. Its purpose or purposes;
    4. The manner of financing the joint or cooperative undertaking and of establishing and maintaining a budget for such undertaking;
    5. The permissible method or methods to be employed in accomplishing the partial or complete termination of the agreement and for disposing of property upon such partial or complete termination; and
    6. Any other necessary and proper matters.
  3. In the event that the agreement does not establish a separate legal entity or entities to conduct the joint or cooperative undertaking, the agreement shall, in addition to the requirements of subdivisions (c)(1)-(6), contain the following:
    1. Provision for an administrator or a joint board responsible for administering the joint or cooperative undertaking. In the case of a joint board, public agencies party to the agreement shall be represented; and
    2. The manner of acquiring, holding and disposing of real and personal property used in the joint or cooperative undertaking.
    1. No agreement made pursuant to this chapter shall relieve any public agency of any obligation or responsibility imposed upon it by law, except that, to the extent of actual and timely performance thereof by a joint board or other legal or administrative entity or entities created by an agreement made hereunder, those performances may be offered in satisfaction of the obligation or responsibility.
      1. Notwithstanding the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21, including § 9-21-105 and § 9-21-107 to the contrary, a separate legal or administrative entity, created by interlocal agreement between two (2) or more political subdivisions of the state acting pursuant to this chapter, is not empowered to:
        1. Assess, levy, or collect ad valorem taxes;
        2. Issue general obligation bonds; or
        3. Exercise the power of eminent domain.
      2. However, to the extent that the participating political subdivisions possess such powers, the political subdivisions may exercise such powers on behalf and for the benefit of the separate legal or administrative entity.
  4. Financing of joint projects by agreement shall be as provided by law.

Acts 1967, ch. 350, § 4; 1973, ch. 88, § 3; 1973, ch. 355, § 3; T.C.A., § 12-804; Acts 1981, ch. 289, § 3; 1982, ch. 930, § 2; 1984, ch. 890, § 1; 1985, ch. 84, §§ 1-4; 1986, ch. 698, § 1; 1990, ch. 921, § 2; 1991, ch. 91, § 1; 1992, ch. 880, § 2; 1993, ch. 401, § 1; 2004, ch. 849, § 2.

Cross-References. Mutual aid agreements, § 6-54-307.

Law Reviews.

Eminent Domain — Moving Expense — A Condemnor in Tennessee Is Required to Pay Moving Expense for Fixtures and Chattels Upon Condemnation, 2 Mem. St. U.L. Rev. 205.

Attorney General Opinions. General sessions court judge acting as city court judge, OAG 09-0171, 1998 Tenn. AG LEXIS 171 (8/28/98).

County authority to provide crushed stone to entities outside county, OAG 99-058, 1999 Tenn. AG LEXIS 41 (3/10/99).

Several utility districts may establish a  corporation as part of an interlocal cooperative agreement for a joint exercise of their powers; whether a district is authorized to support the activities in which the corporation will engage depends on whether its support is necessary or requisite to its authority to own, operate, develop, and maintain a utility district, OAG 03-017, 2003 Tenn. AG LEXIS 24 (2/19/03).

Drug task forces are able to own real property in their own name as long as this is allowed by the particular interlocal agreement establishing the task force, OAG 05-038, 2003 Tenn. AG LEXIS 24 (3/29/05).

Extent of municipal police authority beyond municipal limits.  OAG 10-48, 2010 Tenn. AG LEXIS 48 (4/12/10).

Interlocal agreements to provide cable services.  OAG 12-15, 2012 Tenn. AG LEXIS 15 (2/15/12).

City’s ability to contract with out-of-state water commission, OAG 14-65, 2014 Tenn. AG Lexis 66 (6/25/14)

Authority of TWRA Officers to Enforce Local Noise Ordinances on Waters by Agreement with Local Law Enforcement Agency.  OAG 15-68, 2015 Tenn. AG LEXIS 69  (9/23/15).

NOTES TO DECISIONS

1. Legislative Intent.

This chapter provides no substantive rights or obligations but is simply a procedural statute which enables political subdivisions to combine efforts to achieve common goals. The legislature's failure to include an exculpatory clause does not imply that the legislative branch intended to impose liability on political subdivisions which join together under this chapter. Foster Wheeler Energy Corp. v. Metropolitan Knox Solid Waste Authority, Inc., 970 F.2d 199, 1992 U.S. App. LEXIS 16712 (6th Cir. Tenn. 1992), rehearing denied, 970 F.2d 199, 1992 U.S. App. LEXIS 20940 (6th Cir. 1992).

2. Liability.

This chapter prohibits counties or municipalities from shielding themselves from liability by interposing a cooperation agreement where there is a pre-existing legal obligation which arises from state law, imposing no new rights or obligations on counties or municipalities independent of other sources of state law. Foster Wheeler Energy Corp. v. Metropolitan Knox Solid Waste Authority, Inc., 970 F.2d 199, 1992 U.S. App. LEXIS 16712 (6th Cir. Tenn. 1992), rehearing denied, 970 F.2d 199, 1992 U.S. App. LEXIS 20940 (6th Cir. 1992).

3. “Separate Legal Entity.”

Because the 19th judicial district drug task force was not a separate legal entity, but a joint undertaking of several counties and cities, it was not a “person” amenable to suit under 42 U.S.C. § 1983. Timberlake v. Benton, 786 F. Supp. 676, 1992 U.S. Dist. LEXIS 2549 (M.D. Tenn. 1992).

4. Director of Joint Undertaking.

A suit nominally brought against an official as director of a joint undertaking is in fact a suit against the cities and counties comprising the joint undertaking if the official functions as a final policymaker for it. Timberlake v. Benton, 786 F. Supp. 676, 1992 U.S. Dist. LEXIS 2549 (M.D. Tenn. 1992).

12-9-105. Status of agreements — Parties to actions.

In the event that an agreement entered into pursuant to this chapter is between or among one (1) or more public agencies of this state and one (1) or more public agencies of another state or of the United States, the agreement shall have the status of an interstate compact, but in any case or controversy involving performance or interpretation thereof or liability thereunder, the public agencies party thereto shall be real parties in interest and the state may maintain an action to recoup or otherwise make itself whole for any damages or liability which it may incur by reason of being joined as a party therein. Such action shall be maintainable against any public agency or agencies whose default, failure of performance, or other conduct caused or contributed to the incurring of damage or liability by the state.

Acts 1967, ch. 350, § 5; T.C.A., § 12-805; Acts 1984, ch. 890, § 2.

12-9-106. Approval or disapproval.

In the event that an agreement made pursuant to this chapter shall deal in whole or in part with the provision of services or facilities with regard to which an officer or agency of the state government has constitutional or statutory powers of control, the agreement shall, as a condition precedent to its entry into force, be submitted to the state officer or agency having such power of control and shall be approved or disapproved by such state officer or agency as to all matters within such officer's or agency's jurisdiction.

Acts 1967, ch. 350, § 6; T.C.A., § 12-806; Acts 1984, ch. 890, § 3.

12-9-107. Appropriations — Furnishing of property, personnel and service.

Any public agency entering into an agreement pursuant to this chapter may appropriate funds and may sell, lease, give, or otherwise supply the administrative joint board or other legal or administrative entity created to operate the joint or cooperative undertaking by providing such personnel or services therefor as may be within its legal power to furnish.

Acts 1967, ch. 350, § 7; T.C.A., § 12-807.

12-9-108. Interlocal contracts for performance of services.

Any one (1) or more public agencies may contract with any one (1) or more public agencies to perform any governmental service, activity or undertaking which each public agency entering into the contract is authorized by law to perform; provided, that such contract shall be authorized by the governing body of each party to the contract. Such contract shall set forth fully the purposes, powers, rights, objectives, and responsibilities of the contracting parties. Contracts entered into pursuant to this section need not conform to the requirements set forth in this chapter for contracts for joint undertakings.

Acts 1967, ch. 350, § 8; T.C.A., § 12-808; Acts 1984, ch. 890, § 4.

Attorney General Opinions. Powers of water and wastewater treatment authority outside of its service area.  OAG 11-53, 2011 Tenn. AG LEXIS 55 (6/30/11).

City’s ability to contract with out-of-state water commission, OAG 14-65, 2014 Tenn. AG Lexis 66 (6/25/14)

12-9-109. Contracts under other laws unaffected.

Nothing in this chapter shall prohibit any public agency from contracting with other public agencies under existing statutory or charter authority.

Acts 1967, ch. 350, § 9; T.C.A., § 12-809.

12-9-110. Contracts for conveyance of property.

  1. Any one (1) or more public agencies may contract with any one (1) or more public agencies for the conveyance or transfer of property, real or personal, if:
    1. The public agency or agencies receiving the conveyance or transfer utilizes the property for a public purpose; and
    2. The governing body of each public agency that is a party to the contract authorizes such conveyance or transfer and determines that the terms and conditions set forth are appropriate.
  2. Any public agency utilizing the authority of this section shall not be required to declare such property surplus prior to the conveyance or transfer, and shall also be exempt from contrary requirements in any budget or purchasing act, public or private.

Acts 2005, ch. 336, § 1.

12-9-111. Filing of interlocal agreements forming local government joint venture.

Any interlocal agreement entered into by local government entities that creates a local government joint venture entity shall be filed in the office of the comptroller of the treasury within ninety (90) days of execution of the agreement. Any interlocal agreement entered into by local government entities of this state that created a local government joint venture entity that is in effect on June 20, 2006, shall be filed with the office of the comptroller of the treasury within one hundred twenty (120) days of June 20, 2006.

Acts 2006, ch. 923, § 2.

12-9-112. Annual statement on interlocal agreements that create local government joint venture entity.

  1. Any local government joint venture entity shall, during the term of the agreement, file an annual statement with the office of the comptroller of the treasury. The statement shall set forth the names of all parties to the agreement, the annual revenue and expenses of any entity created under the agreement and the other information required by the comptroller.
  2. The comptroller of the treasury may develop guidelines in furtherance of the administration of this section.

Acts 2006, ch. 923, § 2; 2007, ch. 207, § 1.

Chapter 10
Public Building Authorities Act of 1971

12-10-101. Short title.

This chapter shall be known and may be cited as the “Public Building Authorities Act of 1971.”

Acts 1971, ch. 126, § 1; T.C.A., § 12-901.

12-10-102. Purposes — Liberal construction.

    1. It is hereby found and declared that there exist in many municipalities within this state inadequate and outmoded public buildings, structures, and facilities for the furnishing of governmental, educational and other public services and for use in the conduct of government by the various branches, departments and agencies thereof; that in many cases, by reason of the age and physical condition of such public buildings, structures and facilities and the increased activities on the part of both the citizens and government, such facilities are no longer adapted or adequate to meet the needs of the growing population; that, as a consequence thereof, there are many counties, cities and towns, and other branches and agencies of state and local government within the state which are compelled to spend large sums of money annually in the rental, operation and maintenance of additional building space to house the various branches, departments and agencies of government to meet this ever increasing need; that, as a result thereof, in many of the counties, cities and towns within this state, the public buildings housing the various branches, departments and agencies of government are widely scattered and dispersed throughout the locality, thereby resulting in reduced efficiency of operation in the necessary intergovernmental activities of the various branches and agencies of government; that many public records, wills, conveyances, vital statistics, court decrees, and other similar documents in use in the conduct of daily business, are now filed in poorly protected and overcrowded spaces and at widely separated locations by reason of the lack of an adequate public building or buildings; that the rendering of governmental, health, safety, educational, and welfare services is adversely affected by reason thereof, to the detriment of the citizens in such counties, cities and towns; that the shortage of adequate buildings, structures and facilities impairs the efficient and economical governmental functions of the various branches and agencies of government and the rendering of governmental, educational, health, safety, and welfare services; that in many instances it is not feasible for the various branches and agencies of government to make capital expenditures for the purpose of constructing or acquiring public buildings, structures or facilities and there are not otherwise available buildings, structures or facilities for rent for public purposes; that in many instances effective cooperation between various units of government in providing adequate facilities for the rendering of public services has been hampered because of inadequate statutory authority therefor; and in order to eradicate these conditions, it is hereby found and declared to be necessary and desirable to make possible the construction, acquisition, or enlargement of public buildings, structures, and facilities, hereafter in this chapter referred to as “projects,” to be made available for use by municipal corporations and other public lessees at convenient locations within the counties, cities and towns, in the efficient and economical furnishing of governmental, educational, health, safety, and welfare services to the citizens of such counties, cities and towns; and the eradication of the aforementioned conditions by the passage of this chapter to authorize the incorporation in the several counties, cities and towns of public corporations to finance, acquire, erect, own, operate, maintain, lease, and/or dispose of public buildings, structures, and facilities for the use of the several municipal corporations and other public lessees is hereby declared to be a public use essential to the public interest.
    2. It is further found and declared that, in this state and in many municipalities within this state, there exist serious deficiencies in and a need for additional public buildings, structures, facilities, roads, streets, sidewalks and alleys and that such public buildings, structures, facilities, roads, streets, sidewalks and alleys are in need of enlargement and repair, to the end that the quality of life and the health, safety and welfare of the citizens of this state and the municipalities therein will be enhanced and protected and that the transportation of goods and persons and the flow of commerce will thereby be facilitated, and that it is necessary and desirable to make possible the construction, acquisition, enlargement, repair and renovation of such public buildings, structures, facilities, roads, streets, sidewalks and alleys, hereafter also in this chapter referred to as “projects,” to be made available for use by the state of Tennessee or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof, and municipal corporations and other public bodies, and any such undertaking is hereby declared to be a public use essential to the public interest.
  1. This chapter shall be liberally construed in conformity with such intention.

Acts 1971, ch. 126, § 2; T.C.A., § 12-902; Acts 1980, ch. 653, §§ 1-3; 1982, ch. 902, §§ 1-3; 1984, ch. 823, § 1.

Attorney General Opinions. County school board's authority to contract with public building authority, OAG 99-094, 1999 Tenn. AG LEXIS 94 (4/21/99).

12-10-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:

  1. “Authority” or “public building authority” means any public corporation organized pursuant to this chapter;
  2. “Bonds” or “revenue bonds” means bonds, notes, interim certificates or other obligations of an authority issued pursuant to this chapter, or pursuant to any other law, as supplemented by, or in conjunction with, this chapter;
  3. “Contracting party” or “other contracting party” means any party to a sale contract or loan agreement except the authority;
  4. “Governing body” means the body in which the general legislative powers of a municipal corporation are vested, and in the case of counties means the legislative body of the respective counties;
  5. “Lessee” means any municipal corporation, the state of Tennessee, the United States, or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter existing;
  6. “Loan agreement” means an agreement providing for an authority to loan the proceeds derived from the issuance of bonds pursuant to this chapter to one (1) or more contracting parties to be used to pay the cost of one (1) or more projects and providing for the repayment of such loan by the other contracting party or parties, and which may provide for such loans to be secured by or evidenced by one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of the contracting party or parties, delivered to the authority or to the trustee under the indenture pursuant to which the bonds were issued;
  7. “Municipal corporation” means any county, metropolitan government, incorporated city or town, utility district, school district, power district, sanitary district or other municipal, quasi-municipal or governmental body or political subdivision in this state, and any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter authorized by law to be created;
  8. “Municipality” means any county, incorporated city or town or utility district in this state with respect to which an authority may be organized;
  9. “Operating contract” means the written undertaking whereby the authority and a municipal corporation contract respecting construction of improvements upon and/or for the operation and maintenance of property owned by or leased by other than the authority to the municipal corporation;
  10. “Project” means any undertaking which is eligible to be financed by bonds, notes, interim certificates or other obligations issued pursuant to law by any municipal corporation, the state of Tennessee or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof, but if and only to the extent that they or any one (1) or more of them are participating as a contracting party or party to a lease under this chapter or any other provision of law; provided, that any project undertaken on behalf of the state of Tennessee or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof, shall be subject to the approval of the state building commission, and the financing arrangements for such project shall be subject to the approval of the state funding board. “Project” includes an undertaking whereby a municipal corporation contracts with an authority respecting construction of improvements upon and/or for the operation and maintenance of property owned by or leased by other than the authority to the municipal corporation; provided, that the authority may not borrow money or issue bonds with respect thereto unless the authority has a freehold or leasehold interest in the real estate;
  11. “Revenues” of a project, or derived from a project, includes payments under a lease or sale contract and repayments under a loan agreement, or under notes, debentures, bonds and other secured or unsecured debt obligations of a lease or contracting party delivered as herein provided;
  12. “Sale contract” means a contract providing for the sale of one (1) or more projects to one (1) or more contracting parties and includes a contract providing for payment of the purchase price in one (1) or more installments. If the sale contract permits title to the project to pass to the other contracting party or parties prior to payment in full of the entire purchase price, it shall also provide for the other contracting party or parties to deliver to the authority or to the trustee under the indenture pursuant to which the bonds were issued one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of such contracting party or parties providing for timely payments, including, without limitation, interest thereon for the balance of the purchase price at or prior to the passage of such title; and
  13. “State of Tennessee” means the state of Tennessee and, unless otherwise indicated by the context, any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter existing.

Acts 1971, ch. 126, § 3; impl. am. Acts 1978, ch. 934, §§ 7, 36; T.C.A., § 12-903; Acts 1980, ch. 653, §§ 4, 5; 1982, ch. 902, §§ 4, 5; 1984, ch. 823, §§ 2-4; 1995, ch. 74, §§ 1, 2; 2008, ch. 720, § 1.

Attorney General Opinions. County school board a “municipal corporation,” OAG 99-094, 1999 Tenn. AG LEXIS 94 (4/21/99).

12-10-104. Application to governing body for approval of incorporation.

Whenever any number of natural persons, not less than three (3), each of whom shall be a duly qualified elector of the county or of the incorporated city or town or each of whom shall be a current customer of the utility district, shall file with the governing body thereof an application in writing seeking permission to apply for the incorporation of a public building authority of the municipality, the governing body shall proceed to consider the application. If the governing body shall, by appropriate resolution duly adopted, find and determine that it is wise, expedient, necessary or advisable that the authority be formed, and shall authorize the persons making such application to proceed to form such authority and shall approve the form of certificates of incorporation proposed to be used in organizing the authority, then the persons making such application shall execute, acknowledge and file a certificate of incorporation for the authority as hereinafter provided. No authority may be formed unless such application shall have first been filed with the governing body of the municipality and the governing body shall have adopted a resolution as provided in this section.

Acts 1971, ch. 126, § 4; T.C.A., § 12-904; Acts 2008, ch. 720, § 2.

12-10-105. Certificate of incorporation — Contents.

  1. The certificate of incorporation shall set forth:
    1. The names and residences of the applicants together with a recital that each of them is an elector of the county or of the incorporated city or town or is a customer of the utility district.
    2. The name of the authority which shall be public building authority of the  of  (the blanks to be filled in with the name of the municipality);
    3. A recital that permission to organize the authority has been granted by resolution duly adopted by the governing body of the municipality and the date of the adoption of such resolution;
    4. The location of the principal office of the authority;
    5. The purposes for which the authority is proposed to be organized;
    6. The number of directors of the authority;
    7. The period, which may be perpetual, for the duration of the authority; and
    8. Any other matter which the applicants may choose to insert therein which shall not be inconsistent with this chapter or with the laws of this state.
  2. The certificate of incorporation shall be subscribed and acknowledged by each of the applicants before an officer authorized by the laws of Tennessee to take acknowledgments to deeds.

Acts 1971, ch. 126, § 5; T.C.A., § 12-905; Acts 2008, ch. 720, § 3.

12-10-106. Filing and approval of certificate of incorporation.

  1. When executed and acknowledged in conformity with § 12-10-105, the certificate of incorporation shall be filed with the secretary of state.
  2. The secretary of state shall thereupon examine the certificate of incorporation and, if the secretary of state finds that the recitals contained therein are correct, that the requirements of § 12-10-104 have been complied with, and that the name is not identical with or so nearly similar to that of another public building authority already in existence in this state as to lead to confusion and uncertainty, the secretary of state shall approve the certificate of incorporation and record it in an appropriate book or record in the secretary of state's office.
  3. When such certificate has been so made, filed and approved, the authority shall constitute a public corporation under the name set out in the certificate of incorporation.

Acts 1971, ch. 126, § 6; T.C.A., § 12-906.

12-10-107. Amendment of certificate of incorporation.

The certificate of incorporation may at any time and from time to time be amended so as to make any changes therein and add any provisions thereto which might have been included in the certificate of incorporation in the first instance. Any such amendment shall be effected in the following manner: the members of the board of directors of the authority shall file with the governing body of the municipality with which the application for the creation of the authority was filed, an application in writing seeking permission to amend the certificate of incorporation, specifying in such application the amendment proposed to be made. Such governing body shall consider such application and, if it by appropriate resolution duly finds and determines that it is wise, expedient, necessary or advisable that the proposed amendment be made, and authorizes the same to be made, and approves the form of the proposed amendment, then the persons making such application shall execute an instrument embodying the amendment specified in such application, and shall file the same with the secretary of state. The proposed amendment shall be subscribed and acknowledged by each member of the board of directors before an officer authorized by the laws of Tennessee to take acknowledgments to deeds. The secretary of state shall thereupon examine the proposed amendment and, if the secretary of state finds compliance with the requirements of this section, and the proposed amendment is within the scope of what might be included in an original certificate of incorporation, the secretary of state shall approve the amendment and record it in an appropriate book in the secretary of state's office. When such amendment has been so made, filed and approved, it shall thereupon become effective and the certificate of incorporation shall thereupon be amended to the extent provided in the amendment. No certificate of incorporation shall be amended except in the manner provided in this section.

Acts 1971, ch. 126, § 7; T.C.A., § 12-907.

12-10-108. Board of directors — Executive committee — Administrator — Consent action.

    1. The authority shall have a board of directors in which all corporate powers of the authority shall be vested and which shall consist of any number of directors, no less than seven (7), all of whom shall be duly qualified electors of the municipality. The directors shall serve as such without compensation, except that they shall be reimbursed for their actual expenses incurred in and about the performance of their duties hereunder. No director shall be an officer or employee of the municipality. The directors shall be appointed by the chief executive officer, subject to confirmation of the governing body of the municipality, and they shall be so appointed that they shall hold office for staggered terms. In the case of authorities created pursuant to the approval of two (2) or more municipalities acting jointly, as hereinafter provided, the number of directors appointed by the chief executive officer of each municipality shall be as nearly equal as practicable. At the time of the appointment of the first board of directors, the chief executive officer of the municipality shall divide the directors into three (3) groups containing as near equal whole numbers as may be possible. The first term of the directors included in the first group shall be two (2) years, the first term of the directors included in the second group shall be four (4) years, the first term of the directors included in the third group shall be six (6) years, and thereafter the terms of all directors shall be six (6) years; provided, that if at the expiration of any term of office of any director a successor thereto shall not have been appointed, then the director whose term of office shall have expired shall continue to hold office until such director's successor shall be so appointed.
      1. Notwithstanding any provision of subdivision (a)(1) or any other law to the contrary, if a public building authority engages in or contracts for the modification, construction, operation, maintenance, or management of an arena facility for a National Basketball Association member professional basketball team, then the board of directors appointed and confirmed pursuant to subdivision (a)(1) must include two (2) additional directors whose qualifications, appointment and service shall be governed by this subdivision (a)(2). Following consultation with the speaker of the senate and the speaker of the house of representatives, the chief executive officer of the municipality shall appoint, subject to confirmation of the governing body of the municipality:
        1. One (1) state senator whose legislative district lies, in whole or in part, within the boundaries of the municipality; and
        2. One (1) state representative whose legislative district lies, in whole or in part, within the boundaries of the municipality.
      2. The term of office for each director appointed pursuant to this subdivision (a)(2) shall not extend beyond the director's current term of office in the state senate or house of representatives. Each director appointed pursuant to this subdivision (a)(2) shall serve as such without compensation, except that such director shall be reimbursed for such director's actual expenses incurred in and about the performance of such director's duties hereunder. Notwithstanding the fact that two (2) or more municipalities may have approved incorporation of the public building authority pursuant to § 12-10-104, this subdivision (a)(2) shall not be construed to require appointment of more than one state senator and one state representative to serve as directors; and, under such circumstances, the chief executive officers of the municipalities shall jointly make such appointments, subject to confirmation of the governing bodies of the municipalities.
    2. Notwithstanding subdivision (a)(1) or any other law to the contrary, the directors of an authority created by a utility district shall be customers of the utility district and members of the board of commissioners and employees of the utility district may serve as a director.
    3. Notwithstanding subdivision (a)(1) or any other law to the contrary, the directors of an authority created jointly by two (2) or more utility districts pursuant to § 12-10-120 must either be a customer of one of the creating utility districts or a member of the board of directors of the Tennessee association of utility districts. The directors shall be appointed by the board of commissioners of each creating utility district with the number of directors appointed by each board of commissioners to be as nearly equal as practicable. The directors shall be appointed so that they have staggered terms. At the time of the appointment of the first board of directors, the boards of commissioners of the creating utility districts shall divide the directors into three (3) groups containing as near equal whole numbers as may be possible. The first term of the directors included in the first group shall be two (2) years, the first term of the directors included in the second group shall be four (4) years, the first term of the directors included in the third group shall be six (6) years, thereafter the terms of all directors shall be six (6) years; provided, that, if at the expiration of any term of office of any director a successor to the director has not been appointed, then the director whose term of office has expired shall continue to hold office until the director's successor has been so appointed. The term of office of each director who is a member of the board of directors of the Tennessee association of utility districts shall not extend beyond the director's term as a director of the Tennessee association of utility districts.
  1. The directors shall meet and organize as a board and shall elect one (1) of its members as chair, one (1) as vice chair, one (1) as treasurer and one (1) as secretary, and such officers shall annually be elected thereafter in like manner. The duties of secretary and treasurer may be performed by the same director. In the absence of any of the chair, vice chair, secretary or treasurer, another member may be elected to fill the vacancy for the anticipated term thereof. Any action taken by the directors under this chapter may be authorized by resolution at any regular or special meeting, and such resolution shall take effect immediately and need not be published or posted. A majority of the board shall constitute a quorum for the transaction of business. The concurring vote of a majority of all the directors shall be necessary for the exercise of any of the powers granted by this chapter.
  2. The board of directors may establish an executive committee to be composed of officers designated in subsection (b) and at least one (1) other director. Except as may be limited by the board of directors, the executive committee shall have responsibility for the general superintendence of the administrative affairs of the authority. It shall have the power to employ, discharge, and, within budgeted or otherwise available funds, to compensate regular and part-time employees of the authority; to authorize contracts for the operation and maintenance of projects, which contracts shall be for a period not exceeding one (1) year in duration and for which funds have been budgeted or otherwise provided by the board of directors; to manage and operate parking facilities; within available funds, to provide operating and maintenance services respecting a project; and to administer contracts and undertakings of the authority. The executive committee shall keep minutes and supply a copy of the same to each director. Action shall be by an affirmative vote of a majority of the executive committee. All actions of the executive committee may be reviewed by the board of directors except as to rights of contractees which have accrued.
  3. The board of directors may establish the position of administrator. The administrator may be employed by the board of directors to perform the administrative duties of the authority within the authority granted by the board of directors and/or the executive committee. Except as otherwise directed, the administrator may establish responsibilities of employees of the authority and supervise their performance, including the power, within budgeted or otherwise available funds, to hire and to discharge regular and part-time employees; and, subject to direction of the secretary and treasurer, have responsibility for the records and accounts of the authority.
  4. If authorized by the charter and bylaws, the board of directors and the committee thereof may take action by written consent. The bylaws shall require copies of such consent actions to be provided forthwith to each director.

Acts 1971, ch. 126, § 8; T.C.A., § 12-908; Acts 1996, ch. 762, § 1; 1997, ch. 405, § 6; 2001, ch. 364, § 1; 2008, ch. 720, § 4.

Attorney General Opinions. The amendment of T.C.A. § 12-10-108 by the addition of subdivision (a)(2) did not create a new board, commission, or authority, OAG 01-123, 2001 Tenn. AG LEXIS 114 (8/7/01).

12-10-109. Powers of authorities.

  1. Each public building authority created pursuant to this chapter shall be a public nonprofit corporation and a public instrumentality of the municipality with respect to which the authority is organized. The authority has the following powers, together with all powers incidental thereto or necessary for the performance of those hereinafter stated, to:
    1. Have succession by its corporate name for the period specified in the certificate of incorporation unless sooner dissolved as hereinafter provided;
    2. Sue and be sued and prosecute and defend, at law or in equity, in any court having jurisdiction of the subject matter and of the parties;
    3. Have and use a corporate seal and alter the same at pleasure;
    4. Acquire, whether by purchase, construction, exchange, gift, lease or otherwise, and improve, repair, extend, equip, furnish, operate and maintain one (1) or more projects, which projects may be within or without the municipality or municipalities with respect to which the authority shall have been created, including all real and personal properties which the board of directors of the authority may deem necessary in connection therewith, and regardless of whether or not any such projects shall then be in existence, and including the power to demolish such existing structures as may be on sites acquired when such structures are not needed for the project;
    5. Pave and improve streets within the area of a project and construct, repair and install sidewalks, sewers, gutters, water mains and other similar improvements and facilities in the area, and provide offstreet parking facilities in connection with any project;
    6. Operate, maintain, manage, and enter into contracts for the operation, maintenance and management of any project undertaken, and make rules and regulations with regard to such operation, maintenance and management;
    7. Employ, contract with, fix the compensation of, and discharge engineering, architectural, legal and financial experts and such other employees, both professional and other, as may be necessary to carry out the purposes of this chapter and provide for the proper operation and maintenance of any project;
    8. Lease all or any part or parts of any project to any lessee and execute written leases therefor, for any period of time not to exceed forty (40) years, and charge and collect rent therefor and terminate any such lease upon the failure of the lessee to comply with any of the obligations thereof; and include in or exclude from any such lease, provisions that the lessee shall have the option to renew the term of the lease for such period or periods and at such rent as shall be determined by the board of directors, that such lessee may purchase the project being leased or that upon payment of the indebtedness of the authority incurred with respect to such project, it may lease or convey any or all of its projects to the lessee or lessees thereof with or without consideration;
    9. Lease such space in a project as from time to time may not be needed by any lessee to any other person, corporation, partnership or association for such purposes as the board of directors may determine will best serve the comfort and convenience of the occupants of such project and upon such terms and in such manner as the board may determine;
    10. Sell, exchange, donate and convey any or all of its properties whenever the board of directors shall find any such action to be in furtherance of the purposes for which the authority was organized, and enter into sales contracts with others in connection with the sale of any such properties;
    11. Procure and enter into contracts for any type of insurance or indemnity against loss or damage to property from any cause, including loss of use and occupancy, against death or injury of any person, against employer's liability, against any act of any member, officer or employee of the authority in the performance of the duties of such person's office or employment or any other insurable risk, as the board of directors in its discretion may deem necessary;
    12. Accept donations, contributions, capital grants or gifts from any individuals, associations, municipal or private corporations, the state of Tennessee and the United States, or any agency or instrumentality thereof, for or in aid of any of the purposes of this chapter and enter into agreements in connection therewith;
    13. Borrow money from time to time and in evidence of the obligation thereby incurred to issue and sell its revenue bonds in such amount or amounts as the board of directors may determine to provide funds for the purpose of financing, acquiring, erecting, extending, improving, equipping or repairing any project or for any combination of such purposes, and demolishing structures on the project site and acquiring a site or sites necessary and convenient for such project, including, but without in any way limiting the generality of the foregoing, architectural, engineering, legal, financing and bond insurance expenses, and including an amount sufficient to meet the interest charges on such revenue bonds during construction of any project and for two (2) years after the estimated date of completion; and refund and refinance, from time to time, revenue bonds so issued and sold, as often as may be deemed to be advantageous by the board of directors; and pending the issuance of its revenue bonds for the purposes in this chapter authorized, issue its interim certificates or notes or other temporary obligations;
    14. Enter into any agreement or contract with any lessee, who, pursuant to the terms of this chapter, is renting or is about to rent from the authority all or part of any building or buildings or facilities, whereby under such agreement or contract the lessee obligates itself to pay all or part of the cost of maintaining and operating the premises so leased. Such agreement may be included as a provision of any lease entered into pursuant to the terms of this chapter or may be made the subject of a separate agreement or contract between the authority and such lessee;
    15. As security for the payment of the principal of and interest on any bonds so issued and any agreements made in connection therewith, mortgage and pledge any or all of its projects or any part or parts thereof, whether then owned or thereafter acquired, and pledge the revenues and receipts therefrom or from any thereof, and/or assign and pledge all or any part of its interest in and rights under the leases, sales contracts or loan agreements relating thereto or any thereof;
    16. Exercise all powers expressly given in its certificate of incorporation and establish bylaws and make all rules and regulations not inconsistent with the certificate of incorporation or this chapter deemed expedient for the management of the affairs of the authority;
    17. Enter into loan agreements with others with respect to one (1) or more projects for such payments and upon such terms as the board of directors of the authority may deem advisable in accordance with this chapter, including, but not limited to, the following:
      1. The board of directors of the authority may, by appropriate action, request the comptroller of the treasury or the comptroller's designee to review loan agreements entered into between the authority and a municipal corporation; and
      2. If the comptroller of the treasury or the comptroller's designee determines that it is advisable to review the loan agreements pursuant to a request by the authority, then prior to entering into a loan agreement with the authority, the municipal corporation must obtain the approval of the comptroller of the treasury or the comptroller's designee;
    18. Sell, lease, transfer or convey any air rights and appropriate easements, including easements for support, ingress and egress, in, above, under or adjacent to property acquired for the construction, maintenance and operation of a project. Sale, lease, transfer or conveyance may be accomplished either by public bid or by private sale in such manner, upon such terms and for such consideration as may be determined by the board of directors to be most advantageous to the authority;
    19. Enter into contracts with a municipal corporation respecting construction of improvements upon and/or operation and maintenance of any property owned by or leased by other than the authority to the municipal corporation. Such contracts shall specify the extent and nature of the services to be rendered by the authority; and
    20. Have control of its parking facilities with the right and duty to establish and charge fees, rentals, rates and other charges, and collect revenues therefrom, not inconsistent with the rights of the holders of its bonds.
  2. Except as otherwise approved by the comptroller of the treasury, any authority created pursuant to this chapter shall have the power and shall cause to be made an annual audit of the accounts and records of the authority. The audit shall include all funds of the authority whether held by the authority or pursuant to trust indentures. The comptroller of the treasury, through the department of audit, shall be responsible for ensuring that the audits are prepared in accordance with generally accepted governmental auditing standards and determining if the audits meet minimum audit standards which shall be prescribed by the comptroller of the treasury. No audit may be accepted as meeting the requirements of this subsection (b) until such audit has been approved by the comptroller of the treasury. The audits may be prepared by certified public accountants, public accountants or by the department of audit. In the event the authority shall fail or refuse to have the audit prepared, then the comptroller of the treasury may appoint a certified public accountant or public accountant or direct the department of audit to prepare the audit, the cost of such audit to be paid by the authority. All such audits shall be completed as soon as practicable after the end of the authority's fiscal year. One (1) copy of the audit shall be furnished to each member of the board of directors, the chief executive officer of the municipality with respect to which the authority has organized, and the comptroller of the treasury. Copies of each audit shall also be made available to the press.
  3. Any municipal corporation that has submitted a loan agreement to be entered into between the municipal corporation and the authority to the comptroller of the treasury or the comptroller's designee for approval pursuant to this section shall submit an annual budget in a form consistent with accepted governmental standards to the comptroller of the treasury or the comptroller's designee immediately upon its adoption, and each year thereafter, so long as the loan agreement is outstanding.
  4. An authority created by a utility district or jointly created by two (2) or more utility districts under § 12-10-120 shall only have the powers set forth in this section and in this chapter for projects that consist of utility infrastructure, improvements, facilities and buildings that are an integral part of a public utility's operations and that are used by a public utility in providing utility services to its customers.
  5. The powers granted by this chapter may be exercised without regard to requirements, restrictions or procedural provisions contained in § 55-21-105(a) or any other law or charter, except as expressly provided in this chapter.

Acts 1971, ch. 126, § 9; 1977, ch. 92, § 1; T.C.A., § 12-909; Acts 1980, ch. 653, §§ 6-8; 1982, ch. 902, §§ 6-8; 1984, ch. 823, §§ 5, 9; 1987, ch. 182, §§ 1, 2; 1989, ch. 337, § 1; 1995, ch. 74, § 3; 2008, ch. 720, § 5; 2010, ch. 868, §§ 73-75; 2014, ch. 634, §§ 1, 3.

Attorney General Opinions. Power of authority to enter into interest rate cap agreement in connection with issuance of variable rate revenue bonds, OAG 95-054, 1995 Tenn. AG LEXIS 55 (5/19/95).

12-10-110. Acceptance of donations.

  1. For the purpose of aiding and cooperating with an authority, the municipality, with respect to which such authority is created, may assign or loan any of its employees, including its engineering staff and facilities, and may provide necessary office space, equipment, or other facilities for the use of such authority.
  2. The governing body of such municipality and the governing body of any municipal corporation entering into a lease of any project or part or parts thereof may make donations of property, real or personal, or cash grants to the authority in such amount or amounts as it may deem proper and appropriate in aiding the authority to effectuate the purpose for its creation.
  3. Any municipality with respect to which an authority is created and any municipal corporation entering into a lease with an authority, which owns a fee simple title to real property located within the area of any project, may convey such real property, or any part thereof, to the authority and may include a provision in such conveyance for the reverter of such real property to the transferor at such time as all revenue bonds or other obligations of the authority incident to the real property so conveyed shall have been paid in full, and any authority created pursuant to this chapter is hereby authorized to accept such a conveyance.

Acts 1971, ch. 126, § 10; T.C.A., § 12-910.

12-10-111. Bonds of the authority — Issuance — Terms — Refunding — Payment.

  1. Except as herein otherwise expressly provided, all bonds issued by the authority shall be payable solely out of the revenue and receipts derived from the authority's projects or of any thereof as may be designated in the proceedings of the board of directors under which the bonds shall be authorized to be issued, including debt obligations of the lessee or contracting party obtained from or in connection with the financing of a project. Such bonds may be issued in one (1) or more series, may be executed and delivered by the authority at any time and from time to time, may be in such form and denomination and of such terms and maturities, may be subject to redemption prior to maturity either with or without premium, may be in fully registered form or in bearer form registrable either as to principal or interest, or both, may bear such conversion privileges and be payable in such installments and at such time or times not exceeding forty (40) years from the date thereof, may be payable at such place or places whether within or without this state, may bear interest at such rate or rates payable at such time or times and at such place or places and evidenced in such manner, and may contain such provisions not inconsistent herewith, all as shall be provided in the proceedings of the board of directors whereunder the bonds shall be authorized to be issued.
    1. Bonds and notes issued under this chapter in registered form shall be executed in the manner provided for in the Tennessee Public Obligations Registration Act, compiled in title 9, chapter 19.
    2. Bonds and notes, and any interest coupons attached thereto, issued under this chapter which are not in registered form shall be executed in the name of the authority by such officers of the authority and in such manner as the board of directors may direct, and shall be sealed with the corporate seal of the authority. If so provided in the proceedings authorizing the bonds or notes, the facsimile signature of any of the officers of the authority may appear on such bonds or notes and a facsimile of the corporate seal of the authority may appear on the bonds or notes in lieu of the manual signature of such officer and the manual impress of such seal; provided, that at least one (1) of the signatures appearing on such bonds or notes shall be a manual signature. Interest coupons attached to such bonds or notes shall be executed with the facsimile signatures of the officers who shall execute the bonds or notes, who shall adopt as and for their own signatures their respective facsimile signatures appearing on such coupons.
    3. Bonds or notes issued under this chapter, and the coupons appurtenant thereto, if any, bearing the signature of any officer in office on the date of signing thereof shall be valid and binding obligations, notwithstanding that before the delivery thereof, such person shall have ceased to be an officer of the authority.
  2. Any bonds of the authority may be sold at public or private sale for such price and in such manner and from time to time as may be determined by the board of directors of the authority to be most advantageous, and the authority may pay all expenses, premiums and commissions which its board of directors may deem necessary or advantageous in connection with the issuance thereof.
  3. All bonds of the authority and the interest coupons applicable thereto are hereby made and shall be construed to be negotiable instruments.
  4. Interim certificates or notes or other temporary obligations issued by the authority pending the issuance of its revenue bonds shall be payable out of revenues and receipts in like manner as such revenue bonds and shall be retired from the proceeds of such bonds upon the issuance thereof, and shall be in such form and contain such terms, conditions and provisions consistent with this chapter as the board of directors may determine.
  5. Any bonds or notes of the authority or any other authority at any time outstanding may at any time and from time to time be refunded by the authority by the issuance of its refunding bonds in such amount as the board of directors may deem necessary, but not exceeding the sum of the following:
    1. The principal amount of the obligations being refinanced;
    2. Applicable redemption premiums thereon;
    3. Unpaid interest on such obligations to the date of delivery or exchange of the refunding bonds;
    4. In the event the proceeds from the sale of the refunding bonds are to be deposited in trust as hereinafter provided, interest to accrue on such obligations from the date of delivery to the first or any subsequent available redemption date or dates selected, in its discretion, by the board of directors, or to the date or dates of maturity, whichever shall be determined by the board of directors to be most advantageous or necessary to the authority;
    5. A reasonable reserve for the payment of principal of and interest on such bonds and/or a renewal and replacement reserve;
    6. If the project to be constructed from the proceeds of the obligations being refinanced has not been completed, an amount sufficient to meet the interest charges on the refunding bonds during the construction of such project and for two (2) years after the estimated date of completion, but only to the extent that interest charges have not been capitalized from the proceeds of the obligations being refinanced; and
    7. Expenses of the authority, including bond discount, deemed by the board of directors to be necessary for the issuance of the refunding bonds. A determination by the board of directors that any refinancing is advantageous or necessary to the authority, or that any of the amounts provided in the preceding sentence should be included in such refinancing, or that any of the obligations to be refinanced should be called for redemption on the first or any subsequent available redemption date or permitted to remain outstanding until their respective dates of maturity, shall be conclusive; provided, that prior to the adoption by the board of directors of the resolution authorizing the issuance of refunding bonds under this section, the plan for refunding shall be submitted to the comptroller of the treasury or the comptroller's designee for review, and the comptroller of the treasury or the comptroller's designee may report thereon to the board of directors within fifteen (15) days from the date the plan is received by the comptroller of the treasury or the comptroller's designee, and the comptroller of the treasury or the comptroller's designee shall immediately acknowledge receipt in writing of the proposed refunding plan. After receiving the report of the comptroller of the treasury or the comptroller's designee or after the expiration of fifteen (15) days from the date the refunding plan is received by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the board of directors may take such action with reference to such proposed refunding plan as it deems advisable.
  6. Any such refunding may be effected whether the obligations to be refunded shall have then matured or shall thereafter mature, either by sale of the refunding bonds and the application of the proceeds thereof to the payment of the obligations to be refunded thereby, or by the exchange of the refunding bonds for the obligations to be refunded thereby with the consent of the holders of the obligations so to be refunded, and regardless of whether or not the obligations to be refunded were issued in connection with the same projects or separate projects, and regardless of whether or not the obligations proposed to be refunded shall be payable on the same date or different dates or shall be due serially or otherwise.
  7. If, at the time of delivery of the refunding bonds, the obligations to be refunded will not be retired or a valid and timely notice of redemption of the outstanding obligations is not given in accordance with the resolution, indenture or other instrument governing the redemption of the outstanding obligations, then, prior to the issuance of the refunding bonds, the board of directors shall cause to be given a notice of its intention to issue the refunding bonds. The notice shall be given either by mail to the owners of all the outstanding obligations to be refunded at their addresses shown on the bond registration records for the outstanding obligations or given by publication one (1) time each in a newspaper having a general circulation in the municipality with respect to which the corporation was organized and in a financial newspaper published in New York, New York, having a national circulation. The notice shall set forth the estimated date of delivery of the refunding bonds and identify the obligations, or the individual maturities thereof, proposed to be refunded; provided, that, if portions of individual maturities are proposed to be refunded, the notice shall identify the maturities subject to partial refunding and the aggregate principal amount to be refunded within each maturity. If the issuance of the refunding bonds does not occur as provided in the notice, the governing body shall cause notice thereof to be given as provided above. Except as otherwise set forth in this subsection (h), the notice required pursuant to this subsection (h) shall be given whether or not any of the obligations to be refunded are to be called for redemption.
  8. The principal proceeds from the sale of any refunding bonds shall be applied only as follows, either:
    1. To the immediate payment and retirement of the obligations being refunded; or
    2. To the extent not required for the immediate payment of the obligations being refunded, then such proceeds shall be deposited in trust and together with any investment income thereon to provide for the payment and retirement of the obligations being refunded, and to pay any expenses incurred in connection with such refunding, but provision may be made for the pledging and application of any surplus for any purposes of the authority including, without limitation, provision for the pledging of any such surplus to the payment of the principal of and interest on any issue or series of refunding bonds or other obligations of the authority. Money in any such trust fund may be invested in direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States government, or obligations of any agency or instrumentality of the United States government, or in certificates of deposit issued by a bank or trust company located in this state if such certificates shall be secured by a pledge of any of the obligations having an aggregate market value, exclusive of accrued interest, equal at least to the principal amount of the certificates so secured. Nothing herein shall be construed as a limitation on the duration of any deposit in trust for the retirement of obligations being refunded but which shall not have matured and which shall not be presently redeemable or, if presently redeemable, shall not have been called for redemption.
  9. The board of an authority may enter into an agreement to sell its bonds and its refunding bonds providing for delivery on a date greater than ninety (90) days and not greater than five (5) years, or such greater period of time if approved by the comptroller of the treasury or the comptroller's designee, in the case of bonds and not greater than the later of the first date on which the bonds being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that such an agreement or contract is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with subsection (l ). Agreements to sell bonds or refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement to sell the bonds or refunding bonds do not require a report of the comptroller of the treasury or the comptroller's designee pursuant to subsection (l ).
  10. With respect to all or any portion of any issue of bonds and refunding bonds issued or anticipated to be issued hereunder, at any time during the term of the bonds or refunding bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized in this subsection (k) are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in subsection (m), an authority, by resolution, may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the board of the authority may determine, including, without limitation, provisions permitting the authority to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement. Such a contract or agreement to be entered into by an authority with respect to bonds or refunding bonds issued to fund or finance a lease agreement, loan agreement or operating contract with a municipal corporation must also be approved by the governing body of the municipal corporation.
    1. The state funding board shall establish guidelines, rules or regulations with respect to the agreements and contracts referenced in subsections (j) and (k) and § 12-10-116(c), which may include, but shall not be limited to, the following:
      1. The conditions under which such agreements or contracts can be entered into;
      2. The methods by which such contracts are to be solicited and procured;
      3. The form and content such contracts shall take;
      4. The aspects of risk exposure associated with such contracts;
      5. The standards and procedures for counterparty selection, including rating criteria;
      6. The procurement of credit enhancement, liquidity facilities, or the setting aside of reserves in connection with such contracts or agreements;
      7. The methods of securing the financial interest in such contracts;
      8. The methods to be used to reflect such contracts in the authority's or municipal corporation's financial statements;
      9. Financial monitoring and periodic assessment of such contracts by the authority or municipal corporation;
      10. The application and source of nonperiodic payments; and
      11. Educational requirements for officials of the authority or the municipal corporation responsible for approving any such contract or agreement.
    2. Prior to the adoption by the governing body of the authority or the governing body of the municipal corporation of a resolution authorizing such contract or agreement, a request shall be submitted to the comptroller of the treasury or the comptroller's designee for a report finding that such contract or agreement is in compliance with the guidelines, rules or regulations of the state funding board. Within fifteen (15) days of receipt of the request, the comptroller of the treasury or the comptroller's designee shall determine whether the contract or agreement substantially complies with the guidelines and shall report thereon to the authority or municipal corporation. If the report of the comptroller of the treasury or the comptroller's designee finds that the contract or agreement complies with the guidelines, rules or regulations of the state funding board or the comptroller of the treasury shall fail to report within the fifteen-day period, then the authority or the municipal corporation may take such action with respect to the proposed contract or agreement as it deems advisable in accordance with this section and the guidelines, rules or regulations of the state funding board. If the report of the comptroller of the treasury or the comptroller's designee finds that such contract or agreement is not in compliance with the guidelines, rules or regulations, then the authority or the municipal corporation is not authorized to enter into such contract or agreement. The guidelines, rules or regulations shall provide for an appeal process to a determination of noncompliance.
  11. When entering into any contracts or agreements facilitating the issuance and sale of bonds or refunding bonds, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, and agreements with the purchaser of the bonds or refunding bonds evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the authority may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over any authority or municipal corporation against which an action on such a contract or agreement is brought shall lie solely in a court located in Tennessee which would otherwise have jurisdiction of actions brought in contract against such authority or municipal corporation.
  12. In addition to any other investments authorized herein, cities, counties, or metropolitan governments may invest, or cause to be invested, the proceeds of loans to such cities, counties, or metropolitan governments from a public building authority in a guaranteed investment contract chosen or established by such public building authority provided:
    1. Such guaranteed investment contract has a defined termination date not exceeding five (5) years from the date of the issuance of the obligation by the public building authority for the purpose of funding such loans;
    2. Such guaranteed investment contract is secured by obligations described in § 9-4-103 and secured at a level as required by § 9-4-105;
    3. Such guaranteed investment contract is issued by an issuer having a credit rating of at least AA or its equivalent, by at least one (1) nationally recognized rating agency; and
    4. The obligations securing such guaranteed investment contract are deposited with an independent third party selected by the public building authority and are pledged to the cities, counties, and metropolitan governments receiving such loans.

Acts 1971, ch. 126, § 11; 1977, ch. 92, § 2; T.C.A., § 12-911; Acts 1982, ch. 902, § 9; 1988, ch. 826, § 1; 1997, ch. 405, §§ 1, 2; 1999, ch. 426, §§ 1, 4; 2001, ch. 253, § 14; 2002, ch. 545, § 1; 2010, ch. 868, § 76.

12-10-112. Security for bonds — Enforcement — Revision of lease, loan agreement or sales contract charges.

  1. The principal of and interest on any bonds issued by the authority shall be secured by a pledge of the revenues and receipts out of which the same shall be made payable and may be secured by a mortgage or deed of trust covering all or any part of the projects from which the revenues or receipts so pledged may be derived, including any enlargements of and additions to any such projects thereafter made, and by an assignment and pledge of all or any part of the authority's interest in and rights under the leases, sales contracts, or loan agreements relating to such projects, or any part thereof. The proceedings under which the bonds are authorized to be issued and any such mortgage or deed of trust may contain any agreements and provisions respecting the maintenance of the projects covered thereby, the fixing and collection of rents for any portions thereof leased by the authority to others, the creation and maintenance of special funds from such revenues and the rights and remedies available in the event of default, all as the board of directors shall deem advisable and not in conflict with this chapter. Each pledge, agreement, mortgage and deed of trust made for the benefit or security of any of the bonds of the authority shall continue effective until the principal of and interest on the bonds for the benefit of which the same were made shall have been fully paid. In the event of default in such payment or in any agreement of the authority made as a part of the contract under which the bonds were issued, whether contained in the proceedings authorizing the bonds or in any mortgage and deed of trust executed as security therefor, such payment or agreement may be enforced by suit, mandamus, the appointment of a receiver in equity or by foreclosure of any such mortgage and deed of trust, or any one (1) or more of such remedies.
  2. The board of directors of any authority issuing bonds under provisions of this chapter shall charge, collect and revise from time to time, whenever necessary, rents and charges for the rental of projects or parts thereof or installment payments under any loan agreement or sales contract with respect thereto, the revenues from which are pledged to the payment of such bonds, sufficient to pay for the operation and maintenance of such projects and such portion of the administrative costs of the authority as may be provided in the lease or leases of such projects or the loan agreement or agreements or the sales contract or contracts with respect thereto, and to pay such bonds and the interest thereon as the same become due, including such reserves as may be determined to be necessary by the board of directors.

Acts 1971, ch. 126, § 12; T.C.A., § 12-912; Acts 1982, ch. 902, § 10; 1984, ch. 823, § 6.

12-10-113. Tax exemption — Status under securities law.

  1. The authority is hereby declared to be performing a public function in behalf of the municipality with respect to which it is organized, and to be a public instrumentality of such municipality. Accordingly, the authority and all properties at any time owned by it, and the income therefrom, and all bonds issued by it, and the income therefrom, shall be exempt from all taxation in this state.
  2. Also, for purposes of the Securities Law of 1955, formerly compiled in §§ 48-1601 — 48-1653 [repealed], and any amendment thereto or substitution therefor, bonds issued by the authority shall be deemed to be securities issued by a public instrumentality or a political subdivision of this state.

Acts 1971, ch. 126, § 13; T.C.A., § 12-913.

Compiler's Notes. The Securities Law of 1955, formerly compiled in §§ 48-1601 — 48-1653, was repealed by Acts 1980, ch. 866, § 27. The Tennessee Securities Act of 1980 is compiled in title 48, ch. 1, part 1.

12-10-114. Nonliability of municipality.

  1. The municipality shall not in any event be liable for the payment of the principal of or interest on any bonds of the authority or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever which may be undertaken by the authority, and none of the bonds of the authority or any of its agreements or obligations shall be construed to constitute an indebtedness of the municipality within the meaning of any constitutional or statutory provision whatsoever.
  2. Notwithstanding subsection (a), a municipality may, by a written indemnity agreement, agree to indemnify an authority and its directors, officers and employees against losses, claims, expenses, costs, obligations, debts, suits, demands, actions and liabilities, including those arising from the authority's negligence, which are asserted against the authority, or its directors, officers or employees in connection with any project undertaken by the authority, and such indemnity agreement shall be enforceable against the municipality in accordance with its terms, including any such indemnity agreement in effect on May 7, 1998.

Acts 1971, ch. 126, § 14; T.C.A., § 12-914; Acts 1998, ch. 904, § 1.

12-10-115. Payments under lease, loan agreement, sales contract or operating contract — Tax and other methods.

    1. Except as provided in subsections (b) and (c), whenever, and as often as, a municipal corporation having taxing power enters into a lease, loan agreement, sales contract or operating contract with a public building authority or other contracting party under this chapter, the governing body of such municipal corporation shall provide by resolution for the levy and collection of a tax sufficient to pay when due the annual amount payable under such lease, loan agreement, sales contract or operating contract as and when it becomes due and payable, and to pay any expenses of maintaining and operating the project required to be paid by the municipal corporation under the terms of such lease, loan agreement, sales contract or operating contract or by instrument collateral thereto and, furthermore, to pledge such tax and the full faith and credit of the municipal corporation to such payments. Such tax shall be assessed, levied, collected and paid in like manner as other taxes of the municipal corporation. Such tax shall not be included within any statutory or other limitation of rate or amount for such municipal corporation but shall be excluded therefrom and be in addition thereto and in excess thereof, notwithstanding and without regard to the prohibitions, restrictions or requirements of any other law, whether public or private. There shall be set aside from such tax levy into a special fund an amount sufficient for the payment of the annual amount due under any such lease, loan agreement, sales contract or operating contract and the money in such fund shall be used exclusively for such purpose and shall not be used for any other purpose until such annual amount has been paid in full. The foregoing shall not be construed to limit the power of the authority or other contracting party to enter into leases, loan agreements, sales contracts or operating contracts with municipal corporations not having the power of taxation.
    2. Except for a lease, loan agreement, sales contract or operating contract entered into for school purposes as specified in § 49-3-1004, and except as provided in subsection (b), before any municipal corporation having the power of taxation enters into any lease, loan agreement, sales contract or operating contract with a public building authority under this part, the municipal corporation must comply with the resolution, notice and election provisions found in §§ 9-21-205 — 9-21-212. If such lease, loan agreement, sales contract or operating contract is done to retire or refund existing debt, then the resolution, notice