Chapter 1
General Provisions

9-1-101. Fiscal year for state and county government.

  1. The fiscal year of state government shall hereafter commence on July 1 of each year and end on the following June 30. This fiscal year shall be followed in making appropriations and in financial reporting, and shall be uniformly adopted by all departments, institutions, offices and agencies of state government.
  2. Unless otherwise allowed by the comptroller of the treasury upon grounds of special hardships, the fiscal year of the counties of the state shall begin on July 1 of each year and shall end on the following June 30. The fiscal year shall constitute the budget year and the year for accounting and reporting of each and every fund, office, department, institution, activity and agency of the county government, but the aforementioned provision shall be in addition to, and not in lieu of, any accounting and reporting now required of any official by general law.

Acts 1937, ch. 33, § 27; C. Supp. 1950, § 255.27; Acts 1957, ch. 311, § 1; T.C.A. (orig. ed.), § 9-101.

Cross-References. Fiscal year under county budgeting law, § 5-12-105.

9-1-102. Borrowing by state employees and officials restricted.

State employees and officials are prohibited from borrowing money upon the faith and credit of the state for any purpose whatever, except as otherwise provided by law.

Acts 1877, ch. 56, § 1; Shan., § 241a1; Code 1932, § 184; T.C.A. (orig. ed.), § 9-102; Acts 1985, ch. 118, § 2.

9-1-103. Protection of appropriations of state and departmental revenues and state funds and institutional and program revenues by the state's sovereign immunity.

  1. Except to the extent that sovereign immunity is expressly waived by the general assembly, all appropriations of state revenues and departmental revenues previously and hereafter made to the state, its departments, agencies, boards, educational institutions, instrumentalities, and incorporated entities performing the state's governmental functions shall be state funds and shall be protected by the state's sovereign immunity from every court's judgment, decree, attachment, or other legal process; provided, however, that any law authorizing an agency, board, or entity to sue or be sued shall not constitute a waiver of sovereign immunity.
  2. Except to the extent that sovereign immunity is expressly waived by the general assembly, all appropriations of state funds and institutional and program revenues previously and hereafter made to institutions and programs of higher education shall be state funds and shall be protected by the state's sovereign immunity from any court's judgment, decree, attachment, or other legal process; provided, however, that any law authorizing an institution or program of higher education to sue or be sued shall not constitute a waiver of sovereign immunity.

Acts 2013, ch. 454, § 31; 2014, ch. 917, §§ 1, 2.

Code Commission Notes.

Acts 2013, ch. 454, § 31 purported to enact a new § 9-1-120. The section was enacted as § 9-1-103 under the authority of the code commission.

9-1-104. Right of prepayment to appear on instrument.

Whenever the right to pay, prior to maturity, bonds, notes or other obligations of the state of Tennessee, or political subdivisions thereof, exists, the fact of such right of prepayment shall appear on the face of the instrument, or on the reverse side thereof, in a prominent place.

Acts 1947, ch. 67, § 1; mod. C. Supp. 1950, § 1811.7 (Williams, § 1811.31); T.C.A. (orig. ed.), § 9-104.

9-1-105. State-shared revenue to counties and municipalities — Effective date for distribution purposes.

For the purpose of distributing state-shared revenue to counties and municipalities based upon the population as disclosed by the last federal decennial census, the effective date of such federal decennial census for counties shall be the first day of the month next following the date on which the federal bureau of the census releases the final population figures for all Tennessee counties, and the effective date for municipalities shall be the first day of the month next following the date on which the federal bureau of the census releases the final population figures for all Tennessee municipalities.

Acts 1955, ch. 60, § 1; T.C.A., § 9-105.

Compiler's Notes. For tables of population of Tennessee municipalities, and for U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement.

Textbooks. Tennessee Jurisprudence, 5 Tenn. Juris., Census, § 1.

9-1-106. Negotiability of public bonds.

The negotiability of all bonds issued by this state, any county, municipal corporation or other subdivision or public agency thereof shall be governed by the Uniform Commercial Code — Investment Securities, compiled in title 47, chapter 8, any other statute to the contrary notwithstanding.

Acts 1963, ch. 152, § 1; T.C.A., § 9-106.

9-1-107. Investments or deposits in federal savings banks or pooled investment fund — Deposits exceeding insurance limits.

    1. Counties, municipalities, districts, and other public or quasi-public corporations and public officials, boards, agencies, or other public or quasi-public entities, other than the state, are expressly authorized and empowered to invest or deposit funds held by them, including sinking funds and pension and retirement funds in accounts of federal savings banks, whose deposits are insured by the federal deposit insurance corporation.
    2. Deposits in excess of the limits of insurance on such accounts are authorized where the collateral given is of the character set forth in § 9-4-103, or where the collateral given is an irrevocable letter of credit issued by the federal savings bank, or where the collateral consists of a promissory note secured by a first mortgage or a first deed of trust upon residential real property located in Tennessee; provided, that:
      1. The promissory note shall at all times be in an amount in value at least fifty percent (50%) in excess of the amount deposited with the bank, such value to be determined in accordance with procedures established by regulations hereby authorized to be issued by the comptroller of the treasury;
      2. The bank may exercise, enforce, or waive any right or power granted to it by promissory note, mortgage, or deed of trust; provided, that the security for the note shall not be released or diminished in value by such action;
      3. The following may not be used as security for deposits:
        1. Any promissory note on which any payment is more than ninety (90) days past due;
        2. Any promissory note secured by a mortgage or deed of trust as to which there is a lien prior to the mortgage or deed of trust; or
        3. Any promissory note secured by a mortgage or deed of trust as to which notice of default has been recorded or an action has been commenced. In addition, no promissory note on which payment is more than thirty (30) days past due shall be used initially as such security;
      4. If the security or any note is released, or if the note is diminished in value by action of the bank as set forth in subdivision (a)(2)(B), or if any note becomes delinquent as set forth in subdivision (a)(2)(C), or if for any other reason the value of the note or security is impaired, the bank shall promptly substitute collateral meeting the requirements hereof sufficient to cover the deposits to be secured hereunder; and
      5. Such deposits in excess of the limits of insurance shall, as to each bank, be limited to no more than five percent (5%) of the assets of such bank with respect to each depositor hereunder, and shall be limited to no more than ten percent (10%) of the assets of such association with respect to all depositors hereunder.
  1. Counties, municipalities, districts and other public or quasi-public entities are authorized to deposit or invest funds in the local government investment pool under chapter 4, part 7 of this title. The governing body of such local government may delegate revocable investment authority to the financial officer charged with custody of the funds of the local government, who shall thereafter assume full responsibility for transactions with the local government investment pool.

Acts 1969, ch. 181, § 1; 1977, ch. 205, § 1; 1979, ch. 111, §§ 1, 2; impl. am. Acts 1978, ch. 708, § 5.26; T.C.A., § 9-107; Acts 1984, ch. 627, § 1; 1985, ch. 118, § 4.

Cross-References. Savings and loan associations, title 45, ch. 3.

Tennessee consolidated retirement system, title 8, chs. 34-37.

9-1-108. Collection of funds on behalf of the state or local government — Acceptance of checks or money orders — Acceptance of credit or debit cards.

  1. It is lawful for any municipal, county or state officer to receive, in payment of any public taxes, licenses, fines, fees or other moneys collected, checks or money orders made payable to the appropriate municipal official, county officer or to the “State of Tennessee.” If a check or money order so received is not duly paid, the person by whom such check or money order has been tendered shall remain liable for the payment of the tax, license, fee or other obligation, and for all legal penalties and/or interest, to the same extent as if such check or money order had not been tendered.
  2. It is lawful for any public official who collects funds on behalf of the state or any local government to receive checks in such public official's official capacity made payable either to the individual public office or to the individual person's name who holds such public office; provided, that it is unlawful for any such public official to instruct the public to make such checks payable to the individual person's name who holds such public office on any notice sent to the public to collect such funds. This subsection (b) applies only to any county with a metropolitan form of government and is controlling if in conflict with any county or local ordinance to the contrary.
    1. It is lawful for any municipal or county entity or officer to receive payment by credit card or debit card for any public taxes, licenses, fines, fees or other moneys collected by such municipal or county entity or officer.
    2. As used in this subsection (c), unless the context otherwise requires:
      1. “Credit card” has the same meaning as defined in § 47-22-101;
      2. “Debit card” has the same meaning as defined in § 39-14-102; and
      3. “Municipal or county entity” includes, but is not limited to, a municipality, county, metropolitan government, utility district, board, commission or authority created or authorized by general or local law.
    3. Any municipal or county entity or officer collecting payment by credit card or debit card pursuant to this subsection (c) shall set and collect a processing fee in an amount that is equal to the amount paid the third party processor for processing the payment. Such processing fee may be waived by approval of the governing body.
    4. If a payment by credit card is not honored by the credit card company issuing the card, or if a payment by a debit card is not honored by the entity on which the funds are drawn, the municipal or county governmental entity or officer may collect a service charge from the person who owes the municipal or county tax, fee, fine, penalty, interest or other charge, for processing the transaction. The amount of the service charge shall be the same amount as the fee charged for the collection of a check drawn on an account with insufficient funds; provided, that this service charge shall not apply nor be collected if an electronic device is used to conduct the transaction, the card and card holder are present, and the officer learns of the declination of the credit card or debit card at the time the transaction is processed.
    5. The municipal or county entity or officer collecting funds through payment by a credit card or debit card shall state on any notice to the person owing the tax, fine, fee or other money either the percentage of the processing fee for use of a credit card or debit card or the actual fee imposed for the use of a credit card or debit card.

Acts 1969, ch. 303, § 1; T.C.A., § 9-108; Acts 1989, ch. 480, § 1; 1992, ch. 962, § 1; 2000, ch. 706, § 1; 2001, ch. 348, §§ 1-3; 2016, ch. 621, § 1.

Cross-References. Collection of taxes, title 67, ch. 1, part 7; title 67, ch. 5, part 18.

Use of personal name as payee prohibited, § 9-1-117.

9-1-109. Penalties for nonpayment of checks or money orders.

If any check or money order so received is not duly paid, in addition to other penalties provided by law, there shall be paid as a penalty by the person who tendered such check or money order, upon written notice and demand by the state, county or municipal officer to whom such check was tendered, an amount equal to one percent (1%) of the amount of such check or money order, except that if the amount of the check or money order is less than two thousand dollars ($2,000), the penalty under this section shall be twenty dollars ($20.00) or the amount of the check, whichever is lesser.

Acts 1969, ch. 303, § 2; T.C.A., § 9-109; Acts 1992, ch. 962, § 2.

9-1-110. Issuance of credit by commissioner of revenue for taxes, licenses or fees of amounts received by check or money order.

In the event any such check or money order is not duly paid, after acceptance by any municipal, county or state officer as payment of any taxes, licenses or fees in good faith and with reason to believe the same would be duly paid, the commissioner may give credit in such manner as such commissioner may prescribe to the officer for such amount included in the check or money order tendered as payment of taxes, licenses or fees due to the state.

Acts 1969, ch. 303, § 3; T.C.A., § 9-110.

9-1-111. Report on federal receipts by designated state agencies. [Repealed effective July 1, 2024.]

  1. For purposes of this section:
    1. “Designated state agency” means:
      1. Department of agriculture;
      2. Department of financial institutions;
      3. Department of environment and conservation;
      4. Department of correction;
      5. Department of economic and community development;
      6. Department of education;
      7. Board of trustees of the University of Tennessee;
      8. Board of regents of the state university and community college system;
      9. Local governing boards of trustees of state universities;
      10. Department of general services;
      11. Department of human services;
      12. Department of commerce and insurance;
      13. Department of labor and workforce development;
      14. Department of mental health and substance abuse services;
      15. Department of human resources;
      16. Department of health;
      17. Department of revenue;
      18. Department of safety;
      19. Department of tourist development;
      20. Department of transportation;
      21. Department of the treasury;
      22. Department of veterans services;
      23. The military department; and
      24. Bureau of TennCare;
    2. “Federal receipts” means the federal financial assistance, as defined in 31 U.S.C. § 7501, that is reported as part of a single audit; and
    3. “Single audit” has the same meaning as defined in 31 U.S.C. § 7501.
  2. Subject to subsections (c) and (d), a designated state agency shall for each year designated in subsection (g), on or before October 31, prepare a report that:
    1. Reports the aggregate value of federal receipts the designated state agency received for the preceding fiscal year;
    2. Reports the aggregate amount of federal funds appropriated by the general assembly to the designated state agency for the preceding fiscal year;
    3. Calculates the percentage of the designated state agency's total budget for the preceding fiscal year that constitutes federal receipts that the designated state agency received for that fiscal year; and
    4. Develops plans for operating the designated state agency if there is a reduction of:
      1. Five percent (5%) in the federal receipts that the designated state agency receives;
      2. Twenty-five percent (25%) in the federal receipts that the designated state agency receives; and
      3. One hundred percent (100%) in the federal receipts that the designated state agency receives.
  3. The report required by subsection (b) that the department of education prepares must include the information required by subdivisions (b)(1)-(3) for each school district, including special school districts, and each charter school within the public education system.
  4. Each designated state agency that prepares a report in accordance with subsection (b) shall submit the report to the department of finance and administration on or before November 1 of each year designated by subsection (g).
    1. The department of finance and administration shall, on or before November 30 of each year designated by subsection (g), prepare a report that:
      1. Compiles and summarizes the reports the department of finance and administration receives in accordance with subsection (d); and
      2. Compares the aggregate value of federal receipts each designated state agency received for the previous fiscal year to the aggregate amount of federal funds appropriated by the general assembly to that designated state agency for that fiscal year.
    2. The department of finance and administration shall, as part of the report required by subdivision (e)(1), compile a list of designated state agencies that do not submit a report as required by this section.
  5. The department of finance and administration shall submit the report required by subsection (e) to the chairs of the finance, ways and means committees of the house of representatives and the senate on or before January 15 of each year following the year designated by subsection (g).
  6. Reports required by this section must be prepared in 2019, 2021, and 2023.
  7. This section is repealed on July 1, 2024.

Acts 2019, ch. 480, § 1; 2020, ch. 626, § 1.

Amendments. The 2020 amendment added (a)(1)(X).

Effective Dates. Acts 2020, ch. 626, § 2. March 19, 2020.

9-1-112 — 9-1-115. [Reserved.]

  1. Notwithstanding any other law to the contrary, availability of programs and services to people in this state shall be limited to the extent that funds are appropriated by the general assembly or the appropriate governing body of a political subdivision.
  2. No person shall be entitled to have made available to such person, or otherwise be entitled to, any program or any services provided by or through the state, its departments, agencies or political subdivisions unless funds remain available for such program or service from moneys appropriated for that purpose by the general assembly or the appropriate governing body of a political subdivision.

Acts 1982, ch. 549, § 1.

Compiler's Notes. The following sections contain specific appropriations or create obligations that may be affected by this section: 2-2-136, 2-4-108, 2-5-217, 2-6-312, 2-9-112, 2-9-113, 2-12-108, 3-7-101, 4-3-1008, 4-3-2207, 4-3-2208, 4-3-5004, 4-6-113, 4-6-115, 4-6-131, 4-6-143, 4-7-111, 4-7-112, 4-9-104, 4-11-102, 4-12-106, 4-13-305, 4-14-107, 4-15-103, 4-21-202, 4-21-311, 4-24-202, 8-1-106, 8-6-105, 8-6-106, 8-6-109, 8-7-202, 8-7-306, 8-26-101, 8-26-103, 8-26-104, 8-26-106, 8-26-112, 8-26-114, 8-27-201 [now see §  8-27-203], 8-30-105, 8-34-304, 8-34-312, 8-34-403, 8-37-402, 8-38-116, 8-39-102, 8-39-104, 8-42-104, 8-42-107, 8-46-205, 9-8-112, 11-4-401, 11-14-201, 12-1-105, 12-1-106, 13-3-103, 13-10-107, 13-10-109, 13-11-105, 13-11-107, 13-14-111, 13-14-113, 13-20-303, 33-1-202, 33-2-1104, 33-3-503, 33-9-204, 37-1-150, 37-2-303, 38-7-102, 38-8-111, 38-8-205, 40-14-207, 40-14-209, 40-14-304, 40-14-305, 40-14-311, 40-14-312, 40-14-314, 40-17-112, 40-17-208, 40-23-104, 40-23-107, 40-24-106, 40-25-111, 40-25-112, 40-25-129, 40-25-130, 40-25-131, 40-25-132, 40-25-139, 40-25-140, 40-25-141, 40-28-106, 40-28-117, 40-28-122, 40-33-110, 41-2-119, 41-2-133, 41-4-115, 41-4-139, 41-8-106, 41-21-219, 43-6-105, 43-21-111, 49-3-101, 49-3-306, 49-3-309, 49-3-310, 49-3-311, 49-3-312, 49-3-313, 49-4-704, 49-6-3001, 49-6-3003, 49-6-3104, 49-6-4404, 49-7-102, 49-7-113, 49-8-112, 49-10-101, 49-10-103, 49-10-113, 49-11-610, 49-11-803, 50-3-102, 50-7-504, 54-5-201, 54-5-804, 58-1-109, 58-1-230, 58-2-113, 58-2-115, 58-4-102, 67-1-508, 68-5-105, 68-12-111, 68-35-101, 68-35-103, 68-41-102, 68-49-101, 68-140-103, 71-2-301, 71-3-612, 71-4-605, 71-5-106, 71-5-201, 71-5-305, 71-5-311, 71-5-312, 71-5-2101, 71-5-2104, 71-5-2311, 71-6-107, 71-6-109.

9-1-117. Receipt or collection of personal checks by state, municipal or county officials.

An official or employee within state, county, or municipal government or any agency thereof, who is required or authorized to receive or collect personal checks or similar sight orders on behalf of such government, agency or office, shall not require or encourage the drawer of any such check or order to give or include as payee any personal name as opposed to the name of the state, county, or municipal government or the agency or office or the official's name and title. Such official or employee shall not require or encourage any such drawer to give or include as payee the name of any official, employee, or other person in such person's personal capacity. This section shall not be construed or implemented to prohibit use of notification forms which were printed prior to May 8, 1996.

Acts 1996, ch. 909, § 1.

Cross-References. Use of personal name as payee prohibited, § 9-1-108.

Law Reviews.

1996 Real Estate Legislation: What You Don't Know Can  Hurt You (William R. Bruce), 32 Tenn. B.J. 12 (1996).

9-1-118. Depositing, investing or placing for deposit funds held by state and government entities.

  1. In addition to other investments authorized by law, and notwithstanding any other law, the state and other government entities, including counties, municipalities, districts, and other public or quasi-public corporations and public officials, boards, agencies, or other public or quasi-public entities, are expressly authorized and empowered to deposit, invest or place for deposit funds held by them, including sinking funds and pension and retirement funds, in accordance with the following conditions:
    1. The funds are initially deposited, invested, or placed for deposit through a bank or savings and loan association with a branch in Tennessee authorized to accept deposits that is selected by the government entity;
    2. To prevent deposits from exceeding the insurance coverage provided by the federal deposit insurance corporation (FDIC), the government entity making the deposit shall provide the selected depository with written notification of the names of all banks and savings and loan associations that are holding funds, other than funds deposited or placed in accordance with this section on behalf of the governmental entity, and on behalf of any department, agency, or other instrumentality having the same federal employer identification number (FEIN) as the governmental entity;
    3. The selected depository arranges for the deposit of the moneys, in one (1) or more federally insured banks or savings and loan associations, wherever located, for the account of the government entity; provided, that the selected depository shall not arrange for the deposit of the moneys with any bank or savings and loan association listed in the notification provided by the government entity, pursuant to subdivision (a)(2);
    4. The full amount of principal and any accrued interest of each such deposit is insured by the FDIC;
    5. The selected depository is authorized to and acts as custodian for the government entity with respect to such deposit issued for its account, or if uncertified deposits, books and records evidencing the deposit; and
    6. At the same time that the government entity funds are deposited, the selected depository receives an amount of federally insured deposits from customers of other financial institutions, wherever located, equal to or greater than the amount of the funds initially invested by the government entity through the selected depository.
  2. To the extent insured by applicable federal deposit insurance, funds invested, deposited or placed for deposit in accordance with the conditions prescribed in this section shall not be subject to any additional security or collateral that may be applicable to the deposit or investment of public funds.
  3. Any funds invested, deposited or placed for deposit that are not covered by federal deposit insurance shall be collateralized in the same manner as state deposits, as provided in chapter 4 of this title, or in the collateral pool as provided in chapter 4, part 5 of this title.
  4. The selected depository shall not utilize any organization to perform or otherwise provide the services under this section, unless the state treasurer has approved the organization's request to perform such services. Such approval by the state treasurer shall be submitted to the commissioners of financial institutions and finance and administration for their concurrence.
  5. This investment is subject to the approval of the state funding board for investments made by the state treasurer. This investment is subject to the approval of the respective boards of the University of Tennessee and the board of regents for their systems. For political subdivision officials responsible for investing funds of local governments, this investment is subject to the approval of the appropriate committee, that being the investment committee or the finance committee.
  6. Each authorizing body shall establish policies and procedures for the investments as approved by this section. Such policies and procedures shall include the establishment of appropriate controls to ensure that full FDIC insurance coverage is obtained. Controls may include, but not be limited to, using a single official FEIN or taxpayer identification number (TIN) for deposits made by a public unit as determined by the FDIC.

Acts 2005, ch. 432, § 1; 2012, ch. 544, §§ 1-4.

9-1-119. Computer software as equipment for financing purposes.

Whenever the right to issue debt, whether bonds, notes or other obligations, exists for the state of Tennessee, any corporate governmental agency or instrumentality of the state of Tennessee, any county, city, municipal corporation, or other subdivision or public agency or entity thereof to finance capital assets, computer software, whether acquired before, at the same time as, or after the hardware needed for utilization of the software, to the extent accounted for as a capital asset, shall constitute equipment for financing purposes.

Acts 2005, ch. 248, § 1.

9-1-116. Programs and services limited to extent funds available.

Chapter 2
Accounting for Revenues

9-2-101. Sources of revenue.

The revenue of the state is derived from taxes on property, incomes, sales of land, the exercise of privileges, litigation, from fines, forfeitures and escheats, from merchants, from peddlers, and from inheritance taxes, jail fees and interest.

Code 1858, § 538; Shan., § 685; mod. Code 1932, § 1081; T.C.A. (orig. ed.), § 9-201.

Cross-References. Department of finance and administration, title 4, ch. 3, part 10.

Disposition of fines in criminal cases, § 40-24-106.

Inheritance taxes, title 67, ch. 8, parts 3-5.

Theft of property, § 39-14-103.

NOTES TO DECISIONS

1. Construction and Interpretation.

2. —Strict Construction.

Revenue acts are not to be interpreted so as to extend their provisions beyond the clear import of the language used. Bank of Commerce & Trust Co. v. McCabe, 164 Tenn. 591, 51 S.W.2d 850, 1931 Tenn. LEXIS 54 (1932).

Revenue acts are construed strictly against the state. Bank of Commerce & Trust Co. v. McCabe, 164 Tenn. 591, 51 S.W.2d 850, 1931 Tenn. LEXIS 54 (1932).

3. —“Inheritance” Defined.

The word “inheritance,” as used in inheritance tax laws, means succession to all the rights of the decedent, whether by will or by operation of law. Knox v. Emerson, 123 Tenn. 409, 131 S.W. 972, 1910 Tenn. LEXIS 14 (1910).

4. —Jail Fees as Revenue.

While it is true that jail fees paid by the county to the clerk of the criminal or circuit court, to be refunded to the state for jail fees advanced by it, do not constitute one of the sources of revenue defined by this section; and while, perhaps, revenue may be confined to money raised by some of the modes of taxation, still in one sense all money belonging to the state is revenue. Donelson v. State, 71 Tenn. 692, 1879 Tenn. LEXIS 132 (1879).

9-2-102. Uniform accounting system.

  1. It is the duty of the department of audit to prescribe a uniform system of bookkeeping designating the character of books, reports, receipts, and records, and the method of keeping same, in all state, county, and municipal offices, including utility districts, which handle public funds. It is the duty of all officials to adopt and use the system and the character of books, reports, and records designated; provided, that the comptroller of the treasury may approve any existing system. The approval of such systems by the comptroller of the treasury is subject to the concurrence of the commissioner of finance and administration.
  2. It is the duty of all local governments that are subject to the audit requirements of the comptroller of the treasury and that handle public funds to close their official accounting records and to have those records available for audit no later than two (2) months after the close of their fiscal year.

Acts 1907, ch. 602, § 78; Shan., § 969a3; Code 1932, § 1681; mod. C. Supp. 1950, § 1681; Acts 1975, ch. 173, § 1; T.C.A. (orig. ed.), § 9-202; Acts 2015, ch. 41, § 1.

9-2-103. Receipts required.

Each state, county and municipal official who receives any sum or sums in such official's capacity shall issue to the payer thereof a receipt and shall retain a duplicate thereof in the office of such official; provided, that this provision for official receipts shall not apply to the payment of funds from one department or division of the state government to another such department or division. Any system now in use shall be acceptable if approved by the comptroller of the treasury.

Acts 1947, ch. 224, § 1; C. Supp. 1950, § 1902.1; T.C.A. (orig. ed.), § 9-203; Acts 1995, ch. 70, § 1.

9-2-104. Issuance, preservation and numbering of receipts.

  1. The receipt shall be issued in duplicate and a copy thereof shall be retained by the person so receiving such money and shall be available to the state auditors upon demand.
  2. The receipts shall be in a well-bound book, or on a form approved by the comptroller of the treasury, and shall be prenumbered consecutively.

Acts 1947, ch. 224, § 1; C. Supp. 1950, § 1902.1; Acts 1977, ch. 103, § 1; T.C.A. (orig. ed.), § 9-204.

9-2-105. Furnishing receipt books.

It is the duty of the chief administrative officer of the municipality to procure such receipt books for municipal officials, it is the duty of the county mayor to procure such receipt books for county officials, and it is the duty of the department head of the state agency to procure the same for state officials. The state or county official issuing receipts hereunder shall preserve such official's copy of such receipt book until the same has been audited as provided by law, after which time such official may make such disposition thereof as deemed advisable, unless otherwise directed by the comptroller of the treasury. The cost of printing the receipt books by the county or municipal officials shall be paid in the same manner now provided for the payment for other office supplies. The cost of receipt books used in state offices shall be paid in the same manner as now provided for the payment for other state office supplies.

Acts 1947, ch. 224, § 2; C. Supp. 1950, § 1902.2; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), § 9-205; Acts 1995, ch. 70, §§ 2-5; 2003, ch. 90, § 2.

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.

9-2-106. Penalty for violations.

Any person violating any of the provisions of §§ 9-2-1039-2-105 commits a Class C misdemeanor.

Acts 1947, ch. 224, § 3; C. Supp. 1950, § 1902.3; T.C.A. (orig. ed.), § 9-206; Acts 1989, ch. 591, § 113.

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

9-2-107. Settlement for school funds.

The commissioner of finance and administration shall settle with the banks, insurance companies, tax collectors, and clerks, and all other corporations, companies, officers and persons, all accounts of moneys due from them, or any of them, which have been appropriated to the use of common schools, and which are by law subject to annual distribution, and shall charge the same, and keep a full account thereof, in books to be kept for the purpose, and shall issue such commissioner's warrant for the payment thereof into the treasury in the same manner as for the payment of the revenue of the state.

Code 1858, § 208 (deriv. Acts 1837-1838, ch. 148, § 45); Shan., § 258; Code 1932, § 202; impl. am. Acts 1937, ch. 33, §§ 24, 29; C. Supp. 1950, § 202; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 9-207.

9-2-108. Reports of clerks and judges.

The clerks of all the courts and every judge of the court of general sessions shall make a report, in writing, under oath, to the county mayor, giving the names of each person, in alphabetical order, from whom such clerk or judge has received state, county, or municipal revenue during the quarter next preceding the day on which the report shall be made, and also giving the amount of state, county, and municipal revenue received from each person, when paid, and on what account paid, stating particularly the nature of the privilege, if a privilege, and separating in such clerk or judge's report the state, county, and municipal revenue received by such clerk or judge. Such reports shall be sworn to before some officer authorized to administer oaths, before their presentation to the county mayor. A judge who has not received any revenue shall not be required to make such report.

Acts 1875, ch. 46, §§ 1, 3, 5; Shan., §§ 1011, 1013, 1016a1; Code 1932, §§ 1739, 1741, 1745; impl. am. Acts 1978, ch. 934, §§ 16, 36; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-208; Acts 2003, ch. 90, § 2.

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.

NOTES TO DECISIONS

1. Clerk Receiving No Revenue — Report Necessary.

A justice of the peace [now judge of the court of general sessions] need not report if such justice has received no revenue, but the clerk of the court is not so excused. State v. Jones, 70 Tenn. 716, 1879 Tenn. LEXIS 229 (1879).

9-2-109. Time of reports — Filing.

  1. The report required by § 9-2-108 shall be made quarterly, on the first Monday in January, April, July and October.
  2. The county mayor shall note on each report the day the same was by such county mayor received, and shall cause the report to be kept fastened in book form and file the same with the county register.
  3. The reports shall be public records, open to the inspection of the public, free of charge, whenever such inspection may be demanded.

Acts 1875, ch. 46, § 2; 1877, ch. 88, § 1; Shan., § 1012; Code 1932, § 1740; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), § 9-209; Acts 2003, ch. 90, § 2.

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.

9-2-110. Failure of judge or clerk to report.

  1. If any judge or clerk who has received any revenue fails to make such report in the time prescribed, such judge or clerk shall be subject to presentment; and, upon conviction, a judge shall be fined not less than ten dollars ($10.00) and a clerk not less than fifty dollars ($50.00).
  2. If the jury by whom the defendant is tried and convicted finds that the failure to make such report was willful or due to gross neglect, such clerk or judge shall be removed from office, as a part of the judgment of the court.

Acts 1875, ch. 46, § 5; Shan., §§ 1018, 1019; mod. Code 1932, §§ 1747, 1748; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-210.

NOTES TO DECISIONS

1. Failure to Report.

The indictment for failure to report need not charge that the failure or omission to report was corruptly done; and if the failure is found by the jury to be willful, the clerk or justice [now judge] shall be removed from office. State v. Jones, 70 Tenn. 716, 1879 Tenn. LEXIS 229 (1879).

9-2-111. Perjury by judge or clerk.

If any clerk or judge of the court of general sessions knowingly omits to charge in such clerk's or judge's account any sum of money for which, by law, such clerk or judge is liable to account, and swear to the statement, knowing it to be incorrect, and produce such false account to the county mayor for settlement, such clerk or judge commits perjury.

Code 1858, § 512 (deriv. Acts 1807, ch. 66, § 2); Shan., § 1020; mod. Code 1932, § 1749; impl. am. Acts 1978, ch. 934, §§ 16, 36; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-211; Acts 2003, ch. 90, § 2.

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.

Cross-References. Perjury, § 39-16-702.

9-2-112. Examination of reports by grand jury — Penalties for violations.

  1. It is the duty of the grand jury, impaneled next after the filing of the reports by clerks or judges, to examine the same, in order to ascertain their correctness, and if such grand jury shall find any omission in the reports, or any amount erroneously charged, or any error whatever in the reports, and shall be of opinion that such omission, mistake or error was corruptly or fraudulently made, such grand jury shall present the officer who made the report.
  2. Upon conviction, the officer and such officer's sureties shall be bound to pay whatever fine and costs may be adjudged against the officer.
  3. If the traverse jury should find the omission or other error to have been willfully made, then the court, in addition to the fine and costs, shall also remove the officer from office.
  4. The grand jury has the power to send for persons and papers to facilitate its investigations into the correctness of the reports.

Acts 1875, ch. 46, § 4; Shan., § 1021; Code 1932, § 1750; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-212.

Decisions Under Prior Law

1. Proceeding for Removal.

The proceeding for the removal of an officer from his office was summary and highly penal in its nature, and the judgment of removal had to assume, in itself, the existence of a state of facts which rendered the removal legal and proper under the statute authorizing the same. Ragsdale v. State, 32 Tenn. 416, 1852 Tenn. LEXIS 93 (1852).

9-2-113. Payment by judge.

The judges shall, within ten (10) days after the time required for making such report, pay into the hands of the county trustee the amount of county revenue by them last reported, and into the hands of the county clerk the amount of state revenue by them last reported, and to the treasurer or other proper financial officer of the municipality the amount of municipal revenue in their hands.

Acts 1875, ch. 46, § 5; Shan., § 1014; Code 1932, § 1742; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-213.

9-2-114. Payment by clerks.

The clerks of all courts shall, within twenty (20) days after the time required for making such report, pay over to the county trustee the amount of the county revenue then in their hands, and to the state treasurer the amount of state revenue then in their hands, and to the state treasurer or other proper financial officer of the municipality the amount of municipal revenue in their hands.

Acts 1875, ch. 46, § 5; Shan., § 1015; mod. Code 1932, § 1743; T.C.A. (orig. ed.), § 9-214.

9-2-115. Failure of clerk or judge to pay over.

Any judge or clerk failing to make the payments as required of them, respectively, by §§ 9-2-113 and 9-2-114, shall be proceeded against by the officer to whom the payment should have been made, by motion on such judge's or clerk's official bond.

Acts 1875, ch. 46, § 5; Shan., § 1016; mod. Code 1932, § 1744; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-215.

9-2-116. Failure of clerk or judge to produce proper receipt.

If any clerk fails to produce the trustee's receipt, when called on by the judge of the court of general sessions or the county mayor, or fails to produce the receipts of the commissioner of revenue and of the state treasurer, when called on by the county mayor, or by the district attorney general or attorney general and reporter; or if the receipt produced shows, from its date or otherwise, that the clerk has not complied with the requirements of the law, the court shall dismiss such clerk from office and appoint another in such clerk's stead, to hold the office until such clerk's successor is elected.

Code 1858, §§ 511, 714 (deriv. Acts 1841-1842, ch. 147, § 2); Shan., § 1022; Code 1932, § 1751; impl. am. Acts 1937, ch. 33, §§ 50, 51; impl. am. Acts 1959, ch. 9, § 14; modified; impl. am. Acts 1978, ch. 934, §§ 16, 36; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-216; Acts 2003, ch. 90, § 2.

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.

Decisions Under Prior Law

1. Conviction upon Indictment Unnecessary.

The (former) county court could remove its clerk and appoint another, where the failure to produce his receipts appeared of record, without any conviction of his delinquency, upon indictment. Hardin County Court v. Hardin, 7 Tenn. 291, 1823 Tenn. LEXIS 59 (1823).

2. Judgment.

3. —Facts Assumed.

The judgment had to assume, in itself, the existence of a state of facts which rendered it legal and proper to remove the clerk from office, namely, that he was clerk of the court during the year or the term for which it is alleged that he was in default, and that it was moved before the court that he produce his revenue receipts, as directed under the statute, and that he failed to produce same. From these premises, a judgment that the clerk has forfeited his office, and that he be removed therefrom, was a proper and legal conclusion. Ragsdale v. State, 32 Tenn. 416, 1852 Tenn. LEXIS 93 (1852).

4. —Relief from Judgment.

From this judgment, an appeal in the nature of a writ of error did not lie; if it did, it would have had effect to suspend the judgment of removal and continue the clerk in office, pending the appeal. The remedy was by mandamus to be restored to office, or by writ of error to cause the proceedings to be revised and reversed, if erroneous. Ragsdale v. State, 32 Tenn. 416, 1852 Tenn. LEXIS 93 (1852). See Hardin County Court v. Hardin, 7 Tenn. 291, 1823 Tenn. LEXIS 59 (1823); Sevier v. Justices of Washington County, 7 Tenn. 334, 1824 Tenn. LEXIS 11 (1824); Fields v. State, 8 Tenn. 167, 8 Tenn. 168, 1827 Tenn. LEXIS 27 (1827); Dodd v. Weaver, 34 Tenn. 670, 1855 Tenn. LEXIS 116 (1855); Felts v. Memphis, 39 Tenn. 650, 1859 Tenn. LEXIS 296 (1859).

5. Reinstatement During Term.

An order of removal of the clerk, made on an early day of the term, was superseded by an order to reinstate the clerk, made on a subsequent day of the same term, whether such order of restitution was erroneous or otherwise; and the court, at a subsequent term, could not annul the reinstatement or order of restitution; but it could then make a new order of removal for the previous default. Hardin County Court v. Hardin, 7 Tenn. 291, 1823 Tenn. LEXIS 59 (1823).

9-2-117. Judgment for trustee against clerk or judge.

If any clerk or judge fails or refuses to pay to the county trustee any county money collected by such clerk or judge, the county trustee may proceed, by motion in the circuit court of the county, and the court shall give judgment against such clerk or judge and the sureties of such clerk or judge for the penalty of the bond, and award execution.

Code 1858, § 513 (deriv. Acts 1839-1840, ch. 85, § 1); Shan., § 1023; mod. Code 1932, § 1752; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-217.

Decisions Under Prior Law

1. Time for Motion.

Where the statute required that the motion should be made at the first term of the court after the clerk's default, it could not be made at a special term held thereafter, which was not an adjourned sitting of the preceding term. Garner v. Carrol, 15 Tenn. 364, 15 Tenn. 365, 1835 Tenn. LEXIS 12 (1835).

9-2-118. Satisfaction of judgment.

The clerk or judge may discharge such judgment by producing to the trustee the warrant of the county mayor, to pay the amount found by the trustee due to the county on settlement of the account of such clerk or judge, and paying the amount to the trustee, who shall receive the same in discharge of the judgment, leaving such clerk or judge and the sureties of such clerk or judge liable for the costs of the suit.

Code 1858, § 514 (deriv. Acts 1839-1840, ch. 85, § 1); Shan., § 1024; mod. Code 1932, § 1753; impl. am. Acts 1978, ch. 934, §§ 16, 36; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-218; Acts 2003, ch. 90, § 2.

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.

9-2-119. Commissions lost by default.

On settlement, the defaulting clerk or judge is not allowed a credit for any commissions on the money in regard to which such clerk or judge made the default.

Code 1858, § 515 (deriv. Acts 1839-1840, ch. 85, § 1); Shan., § 1025; mod. Code 1932, § 1754; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-219.

9-2-120. [Reserved.]

If such clerk or judge, after settlement and obtaining a warrant to pay into the county treasury the amount found due from such clerk or judge to the county, fails to pay it, the trustee shall, in like manner, cause judgment to be taken against such clerk or judge and the sureties of such clerk or judge for the amount found due the county by the account, with interest thereon from the time the money should have been paid, with twelve and one-half percent (12.5%) damages, and costs.

Code 1858, § 516 (deriv. Acts 1839-1840, ch. 85, § 2); Shan., § 1027; Code 1932, § 1756; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-221.

9-2-122. Clerk's records furnished to county mayor.

The county clerk shall, on demand, furnish to the county mayor:

  1. A list of the amount of taxes put into the hands of the collector, and due and owing to the county for any year;
  2. A statement, with sufficient vouchers, showing the amount of moneys paid by the clerk to the trustee, as required by law, for fines and forfeitures;
  3. The amount of all appropriations made for the year by the county legislative body; and
  4. All necessary documents and vouchers, showing any receipt or disbursement of the county moneys.

Code 1858, § 517; Shan., § 1028; Code 1932, § 1757; impl. am. Acts 1978, ch. 934, §§ 7, 16, 22, 36; T.C.A. (orig. ed.), § 9-222; Acts 2003, ch. 90, § 2.

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.

9-2-123. [Reserved.]

If it is made satisfactorily to appear to the court that the execution was placed in the hands of the sheriff, against whom the motion is made, and that such sheriff has failed to return the same, the court shall render judgment against the sheriff and the sureties of such sheriff for the amount due the state, or county, or common school fund, or other persons, for costs and the costs of the motion.

Code 1858, § 717 (deriv. Acts 1833, ch. 43, § 1); Shan., § 1030; Code 1932, § 1759; T.C.A. (orig. ed.), § 9-224.

Law Reviews.

The Tennessee Court Systems — Prosecution, 8 Mem. St. U.L. Rev. 477.

9-2-125. Notice of motion against sheriff.

No notice of this motion is required when it is made at the first term after the execution has been placed in the sheriff's hands; but if the motion is made at a subsequent term, it shall be entered upon the minutes, and docketed as a suit, and proceeded with on the second or subsequent day of the next succeeding term, as if notice had been given.

Code 1858, § 718 (deriv. Acts 1833, ch. 43, § 2); Shan., § 1031; Code 1932, § 1760; T.C.A. (orig. ed.), § 9-225.

Law Reviews.

The Tennessee Court Systems — Prosecution, 8 Mem. St. U.L. Rev. 477.

9-2-126. [Reserved.]

Every county official collecting or receiving public money from any source whatsoever belonging to or for the use of the state shall comply with § 9-4-301.

Acts 1937, ch. 33, § 28; 1937, ch. 107, § 1; C. Supp. 1950, § 255.28; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 9-227; Acts 1985, ch. 118, § 6.

Textbooks. Tennessee Jurisprudence, 22 Tenn. Juris., Stare Decisis, § 5.

NOTES TO DECISIONS

1. Retroactive Divestiture.

Tax money paid into the treasury of the state becomes the property of the state, with title thereto vested in the state and no opinion of a court changing the construction of a statute can constitutionally operate retrospectively so as to divest the state of title to that money. Blank v. Olsen, 662 S.W.2d 324, 1983 Tenn. LEXIS 798 (Tenn. 1983).

Decisions Under Prior Law

1. State's Preference.

The state was entitled to a preferential payment of its deposit in the event of insolvency of its depository. Maryland Casualty Co. v. McConnell, 148 Tenn. 656, 257 S.W. 410, 1923 Tenn. LEXIS 52 (1924).

Under the common law, the state was entitled to priority in payment out of the effects of an insolvent debtor, and this rule has been adopted in Tennessee. State ex rel. Robertson v. Liberty Bank & Trust Co., 165 Tenn. 40, 52 S.W.2d 150, 1931 Tenn. LEXIS 167 (1932).

Statute that provided for depository bond for safekeeping and paying over of state funds did not waive state's prerogative right to priority. State ex rel. Robertson v. Liberty Bank & Trust Co., 165 Tenn. 40, 52 S.W.2d 150, 1931 Tenn. LEXIS 167 (1932).

2. Surety Paying Bank's Debt to State — Subrogation.

Where a surety of a bank for state deposits on the insolvency of the bank paid the entire indebtedness of the bank to the state, it was entitled to be subrogated to the rights of the state. Maryland Casualty Co. v. McConnell, 148 Tenn. 656, 257 S.W. 410, 1923 Tenn. LEXIS 52 (1924).

3. Pledge of Assets to Secure General Deposits.

A state bank may pledge its assets to secure general deposits of county and state funds. Grigsby v. People's Bank of Martin, 158 Tenn. 182, 11 S.W.2d 673, 1928 Tenn. LEXIS 138 (1928).

4. Depository Bond — Continuing Obligation.

A depository bond given by a bank and its officers and stockholders to a clerk and master of a chancery court, “and his successors in office,” was a continuing obligation enforceable, against the sureties for loss occurring during a subsequent term of such official, so long as the bank continues to receive deposits of such official unless the sureties took steps to terminate their liability. Holmes v. Elder, 170 Tenn. 257, 94 S.W.2d 390, 1936 Tenn. LEXIS 11, 104 A.L.R. 1282 (1936).

5. Receipt of Interest on Deposits.

The identity of money raised for school purposes was not lost by a deposit thereof in a bank at interest, for the interest was but incidental. Maryland Casualty Co. v. McConnell, 148 Tenn. 656, 257 S.W. 410, 1923 Tenn. LEXIS 52 (1924).

9-2-128. Prosecution for failure to pay receipts into treasury.

  1. Any of the aforementioned departments, institutions, offices, agencies, officers or employees who fail to pay immediately into the state treasury any money belonging to the state as directed in § 9-2-127 are subject to punishment for theft.
  2. The venue of any such prosecution is the county in which such departments, institutions, offices, agencies, officers or employees serve in their official capacity.

Acts 1943, ch. 142, § 1; C. Supp. 1950, § 255.28; T.C.A. (orig. ed.), § 9-228; Acts 1989, ch. 591, § 21.

Cross-References. Territorial jurisdiction, § 39-11-103.

9-2-129 — 9-2-136. [Reserved.]

Each county office, department, board, commission or agency charged with the duty of disbursing county funds in counties which do not have a central accounting system approved by the comptroller of the treasury shall file quarterly with the county fiscal agent a sworn itemized report listing by fund accounts all accounts payable and other obligations, including notes payable. Such report shall be made and sworn to by the principal officer, chair or employee in charge of the department, office, board, commission or agency. A copy of the report shall be filed with the county clerk.

Acts 1957, ch. 355, § 1; impl. am. Acts 1978, ch. 934, §§ 22, 36; T.C.A., § 9-237.

Cross-References. Penalty for failure to perform duty under section, § 9-2-139.

9-2-138. Reconciliation of county fund accounts with trustee's records — Monthly and quarterly reports.

  1. The administrative officers and employees shall reconcile their respective fund accounts with the records of the county trustee, and shall make a report at the end of each month showing the condition of the respective fund accounts. As to each fund, the report shall include the balance at the beginning of the month, receipts and expenditures for the month, and the balance at the end of the month. The monthly reports shall also include a reconciliation of the trustee's balances with the balances of the department, office, board, commission or agency. The reports shall be retained in the permanent files of the department, office, board, commission or agency.
  2. At the end of each quarter, the officers charged herein with making monthly reports shall prepare a quarterly report summarizing the monthly reports of that quarter, and a copy of the same shall be filed with the county fiscal agent.

Acts 1957, ch. 355, § 2; T.C.A., § 9-238.

Cross-References. Penalty for failure to perform duty under section, § 9-2-139.

9-2-139. Failure of county officers and employees to file reports or reconcile accounts a misdemeanor.

It is a Class C misdemeanor for any county officer or any employee to fail to perform any duty required by §§ 9-2-137 and 9-2-138.

Acts 1957, ch. 355, § 3; T.C.A., § 9-239; Acts 1989, ch. 591, § 113.

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

9-2-121. Failure to pay on warrant.

9-2-124. Judgment against sheriff.

9-2-127. Payments by county officials into treasury or state depository.

9-2-137. Counties not having approved central accounting system — Quarterly report of accounts payable and obligations.

Chapter 3
Local Governments

Part 1
Funding of Local Debt

9-3-101. Serial bonds authorized.

A municipal or public corporation organized under the laws of the state of Tennessee, including, but not limited to, counties, municipalities, metropolitan governments, utility districts, and industrial development boards or corporations, may, by resolution duly adopted by its governing body, authorize the issuance, in lieu of serial bonds, of fully registered bonds, without coupons, payable in installments corresponding to the maturities of such serial bonds. Such resolution shall provide that at the request of the holder of an installment bond such municipality or public corporation shall have prepared, executed and delivered to the holder, in exchange for such installment bond, serial bonds in an aggregate principal amount equal to the principal amount of such installment bond then unpaid, having maturities corresponding to the maturities of the installments of principal of such installment bond then unpaid, and bearing interest at the same rate or rates as provided in such installment bond. Upon any such exchange, such installment bond shall be cancelled. The reasonable expenses in connection with such exchange shall, at the option of the municipal or public corporation, be paid by the holder or the issuer. Until so exchanged, such installment bonds shall in all respects be entitled to the same benefits as the serial bonds to be issued.

Acts 1985, ch. 118, § 9.

Compiler's Notes. Former part 1 of this chapter, relating to general audit provisions, was transferred in 1985 to part 2 of this chapter.

Cross-References. Public entities, information concerning debt obligation issuances, § 9-21-134.

9-3-102. Facsimile signatures and seals on public securities.

  1. As used in this chapter, unless the context clearly otherwise requires:
    1. “Facsimile” means a reproduction by engraving, imprinting, stamping, lithographing or other means;
    2. “Municipality” means any county, incorporated city or town, school district, utility district, improvement district, taxing district, housing authority, industrial development board, health and educational facilities board, or other district, authority, commission, board, public body or political subdivision in this state; and
    3. “Public security” means any bond, note, warrant, certificate of indebtedness or other obligation for the payment of money authorized to be issued by a municipality.
  2. Notwithstanding any other law:
    1. Any public security required to be executed by the officers of a municipality may be executed with the facsimile rather than the manual signatures of such officers if so provided in the proceedings authorizing the issuance of such public security; provided, that at least one (1) such signature on each public security shall be manually subscribed or, in the alternative, in the case of any public security being authenticated by a corporate trustee pursuant to the terms of an indenture of trust or other trust instrument, only the signature of the authenticating agent of such trustee need be manually subscribed on such public security, if so provided in such proceedings; and
    2. A facsimile of the official seal of a municipality may be placed on any public security in lieu of the manual impress of such seal, if so provided in the proceedings authorizing the issuance of such public security.
  3. This section is in addition and supplemental to existing law and shall not repeal any other law permitting the use of facsimile signatures or seals on public securities.

Acts 1985, ch. 118, § 10.

Compiler's Notes. Former § 9-3-102 was transferred to § 9-3-202 in 1982.

9-3-103. Term of loan agreements — Security for loan agreement.

Whenever any county, metropolitan government, incorporated town or city or special district of this state is authorized by law to enter into any loan agreement, indenture or other contract or instrument for the borrowing of money, such loan agreement, indenture or other contract or instrument may be for such term as the parties thereto may agree, but in no event may such term exceed forty (40) years or the term otherwise authorized by law, and may provide for such security as authorized by law for the term of such loan agreement, indenture or other contract or instrument.

Acts 1985, ch. 118, § 11.

Compiler's Notes. Former § 9-3-103 was transferred to § 9-3-203 in 1985.

Part 2
General Audit Provisions

9-3-201. Purpose and scope of audit.

  1. An audit shall be made:
    1. For purpose of ascertaining errors, irregularities, or defaults, if any, in the offices of any county officials handling and disbursing public funds;
    2. For purpose of checking all cost bills to see that all proper items of cost, both county and state, have been duly charged, taxed and reported by the clerks of the courts in all civil, criminal, and chancery cases; and
    3. To examine and check the accounts of the county superintendents of public instruction for the purpose of ascertaining that the school funds of the state are being expended according to the laws of the state, and for the maintenance and extension of terms of schools in the counties as provided and contemplated by the laws of the state.
  2. The auditors shall have the authority and jurisdiction to audit the books and records of any judge of the court of general sessions when directed to do so by the comptroller of the treasury.

Acts 1923, ch. 109, § 1; Shan. Supp., § 948a10; Code 1932, § 1654; Acts 1935, ch. 96, § 1; mod. C. Supp. 1950, § 1654 (Williams, §§ 1654, 1661.1); impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), §§ 9-302, 9-3-101; Acts 1985, ch. 118, § 8.

Compiler's Notes. Former part 1 was transferred to part 2 of this chapter in 1985.

Former part 2 was transferred to part 3 of this chapter in 1985.

Cross-References. Annual audit, § 4-3-304.

9-3-202. Investigation of delinquent taxes.

In making such audit, the auditors shall also investigate and ascertain what inheritance and succession taxes and privilege and ad valorem taxes are delinquent and unpaid in any of the counties, and to ascertain the correct and proper amount of such inheritance and succession taxes and privilege and ad valorem taxes that have not been paid.

Acts 1923, ch. 109, § 2; Shan. Supp., § 948a11; Code 1932, § 1655; mod. C. Supp. 1950, § 1655; T.C.A. (orig. ed.), §§ 9-303, 9-3-102; Acts 1985, ch. 118, § 8.

Decisions Under Prior Law

1. Accountant's Report as Evidence.

Where it would have been wholly impracticable to conduct an investigation as to the condition of accounts of the defendant county trustee, in open court or in the master's office, a written report of competent accountants, appointed to investigate and report upon the condition of the accounts was competent evidence, although not conclusive. State ex rel. Stewart v. Follis, 140 Tenn. 513, 205 S.W. 444, 1917 Tenn. LEXIS 157 (1918).

Where an unidentified part of the report of the condition of accounts of the defendant county trustee was made by persons who were not examined as witnesses, and the witnesses examined made no test of such work, the whole report must be excluded. State ex rel. Stewart v. Follis, 140 Tenn. 513, 205 S.W. 444, 1917 Tenn. LEXIS 157 (1918).

9-3-203. Improperly assessed personal property.

Such auditors shall have the authority to:

  1. Ascertain any unassessed personal property or personal property assessed on a wrong or improper basis, or where such assessment on personal property was obtained by fraud, deceit, misrepresentation or concealment, but only for the current year for which such audit is made; and
  2. Report the same to the comptroller of the treasury, whose duty it is to direct the trustee of the county in which such property is located to enter the same on the tax books of such county and the same to be the assessment in such county wherein is such personal property, and to be collected in the same way and manner as other property assessed for taxation.

Acts 1923, ch. 109, § 3; Shan. Supp., § 948a12; Code 1932, § 1656; Acts 1945, ch. 36, § 1; C. Supp. 1950, § 1656; Acts 1977, ch. 103, § 3; T.C.A. (orig. ed.), §§ 9-304, 9-3-103; Acts 1985, ch. 118, § 8.

9-3-204. Filing of report — Further duties.

Within a reasonable time after the completion of any such audit in any county, one (1) copy of such audit shall be filed with the county trustee of such county and one (1) with the county mayor. These auditors shall undertake and discharge such further duties as the comptroller of the treasury may from time to time require of them.

Acts 1923, ch. 109, § 1; Shan. Supp., § 948a10; Code 1932, § 1654; Acts 1933, ch. 74, § 5; mod. C. Supp. 1950, § 1654; Acts 1977, ch. 103, § 4; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), §§ 9-305, 9-3-104; Acts 1985, ch. 118, § 8; 2003, ch. 90, § 2.

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.

9-3-205. Audit of county highway commissions.

  1. The state and county auditors referred to by this part are required to audit the books and records of county highway commissions whenever they make an audit of other offices in the several counties of this state, but this does not apply to counties which have an auditing department or may hereafter have such department.
  2. Such report setting forth the result of their audit of the county highway commissions shall be filed with the county mayor within a reasonable time after the same has been completed and is subject to public inspection as other public records.

Acts 1945, ch. 159, § 1; C. Supp. 1950, § 1661.1 (Williams, § 1661.2); impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), §§ 9-306, 9-3-105; Acts 1985, ch. 118, § 8; 2003, ch. 90, § 2.

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.

9-3-206. Access to records.

These auditors shall have access to all books, records and accounts, including the official bank accounts of any such officials, for the purpose of making their audits and their reports.

Acts 1923, ch. 109, § 5; Shan. Supp., § 948a14; Code 1932, § 1658; T.C.A. (orig. ed.), §§ 9-307, 9-3-106; Acts 1985, ch. 118, § 8.

9-3-207. Summons of witnesses — Documents furnished — Bond of auditors.

  1. These auditors shall also have the right to summon and examine witnesses and to administer the oaths to such witnesses in making any investigation of the records and reports of any such county officials; and also for the purpose of ascertaining and determining and reporting the amount of delinquent or unpaid or unassessed privilege and ad valorem taxes and inheritance and succession taxes.
  2. The comptroller of the treasury and commissioner of revenue shall furnish these auditors with such reports, documents, data, or other information, as will facilitate their investigation.

Acts 1923, ch. 109, § 5; Shan. Supp., § 948a15; Code 1932, § 1659; impl. am. Acts 1959, ch. 9, § 14; Acts 1977, ch. 103, § 5; T.C.A. (orig. ed.), §§ 9-308, 9-3-107; Acts 1985, ch. 118, § 8.

9-3-208. Report and collection of delinquencies.

  1. These auditors are authorized to collect any amounts that their audits may show to be due and owing to the state and county from any such county official; and also to collect any delinquent or unpaid inheritance and succession taxes and privilege and ad valorem taxes that may be due and owing to the county and state, and to report the same to the county mayor for the portion of the same due to the county, and they shall report to the comptroller of the treasury the portion of the same due to the state; provided, that the same can be collected by the auditors without suit.
  2. But in the event the auditors cannot collect the sums without suit, they shall report the same to the county mayor and to the comptroller of the treasury, and it shall be the duty of the county mayor to have the county attorney of such county, if there be a county attorney elected, and if not, then an attorney of such county mayor's selection residing in the county, to institute suit or suits for the collection of these sums so reported by these auditors within ninety (90) days from the date of receiving such report; provided, that the same has not been barred by the statute of limitation; and provided further, that if it is in the matter of inheritance or succession taxes, that the full time for making payment of same has expired, or, if pending on exception, when disposition is made of such exception. In the event the county mayor fails or refuses to have such suits instituted as herein provided, within ninety (90) days after receiving such report, the comptroller of the treasury may appoint an attorney to institute and prosecute a suit or suits for the benefit of the state and county.

Acts 1923, ch. 109, § 4; Shan. Supp., § 948a13; Code 1932, § 1657; Acts 1945, ch. 36, § 1; mod. C. Supp. 1950, § 1657; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), §§ 9-309, 9-3-108; Acts 1985, ch. 118, § 8; 2003, ch. 90, § 2.

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. Tennessee Jurisprudence, 21 Tenn. Juris., Public Officers, § 46.

Decisions Under Prior Law

1. Fees Allowed.

Revenue agent and his attorney were entitled to allowance of fees in tax collection suit where suit was filed prior to enactment of Public Acts 1923, ch. 109, placing responsibility for collection of taxes in hands of auditors. State v. Collier, 160 Tenn. 403, 23 S.W.2d 897, 1929 Tenn. LEXIS 120 (1930), superseded by statute as stated in, Toler by Lack v. City of Cookeville, 952 S.W.2d 831, 1997 Tenn. App. LEXIS 89 (Tenn. Ct. App. 1997).

9-3-209. Attorney's fees for collection of delinquencies.

  1. When suits are instituted by the county mayor or by the comptroller of the treasury as herein provided, the fee to be allowed and paid the attorney for such attorney's services shall be fixed by the county mayor where the suit is instituted by direction of the county mayor, but the same shall be approved by the comptroller of the treasury; and, where suits are instituted by direction of the comptroller of the treasury upon the failure of the county mayor, such attorney's fees shall be fixed by the comptroller of the treasury, with the approval of the governor.
  2. No attorney's fees shall accrue against the state or county unless they are collected by the attorney from penalties of delinquents.

Acts 1923, ch. 109, § 7; Shan. Supp., § 948a17; Code 1932, § 1661; Acts 1945, ch. 36, § 1; C. Supp. 1950, § 1661; impl. am. Acts 1978, ch. 934, §§ 16, 36; T.C.A. (orig. ed.), §§ 9-310, 9-3-109; Acts 1985, ch. 118, § 8; 2003, ch. 90, § 2.

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.

9-3-210. County contributions to expenses of audit.

  1. For the purpose of contributing to the expenses and compensation of the auditors, each county shall pay into the office of the comptroller of the treasury, on or before June 30 of each year, the same to be paid into the state treasury by the comptroller of the treasury, an amount to be determined on the basis of thirty-six cents (36¢) for each person in the county as shown by the population of the county under the last or any future federal census.
  2. Beginning July 1, 2017, and using that year as a base, the foregoing thirty-six cents (36¢) shall be annually increased by three percent (3%), with fractional changes rounded to the nearest one cent (1¢). However, the comptroller of the treasury may, at the comptroller's discretion, reduce the amount required to be paid under this section when the work performed justifies the reduction.

Acts 1923, ch. 109, § 6; Shan. Supp., § 948a16; Code 1932, § 1660; Acts 1945, ch. 36, § 1; C. Supp. 1950, § 1660; Acts 1953, ch. 59, § 1; modified; Acts 1968, ch. 585, § 1; 1976, ch. 786, § 1; T.C.A. (orig. ed.), § 9-311; Acts 1982, ch. 694, § 1; T.C.A. (orig. ed.), § 9-3-110; Acts 1985, ch. 118, § 8; 1989, ch. 494, § 1; 2008, ch. 762, § 1; 2016, ch. 1059, § 1.

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

9-3-211. Annual audit in each political subdivision and special taxing district.

  1. An annual audit of financial records and transactions covering each fiscal year shall be made of each department, office, agency, division or board which is charged with the care and control of public funds, in each political subdivision and special taxing district and which is not now required by law to be audited by the office of the comptroller of the treasury.
  2. Such audit for each fiscal year shall be made and completed no later than the close of the succeeding year.
  3. All audits performed by internal audit staffs of any such department, office, agency, division or board shall be conducted in accordance with the standards established by the comptroller of the treasury, pursuant to § 4-3-304(9).

Acts 1961, ch. 233, § 1; T.C.A., § 9-313; Acts 1984, ch. 794, § 5; T.C.A., § 9-3-111; Acts 1985, ch. 118, § 8.

Law Reviews.

Local Government Law — 1961 Tennessee Survey (Eugene Puett), 14 Vand. L. Rev. 1335.

9-3-212. Duty to order and pay for audits — Audit standards — Rules and regulations.

  1. It is the duty of each political subdivision, special taxing district, board, commission, educational cooperative, intergovernmental cooperative or other governmental agency, including, but not limited to, municipal corporations, utility districts, school boards, and housing authorities created under the Housing Authorities Law, compiled in title 13, chapter 20, part 1, with respect to all funds under its control, to order and pay for such audit and for any other audit which it is required to perform under state law, and to contract with certified public accountants, public accountants, or the department of audit to make such audit.
  2. The comptroller of the treasury, when the comptroller deems it necessary, may require any audit required of any such agency, or any investigative or review work in addition to such audit which, in the exercise of the comptroller's discretion, the comptroller believes necessary to ascertain or correct errors, irregularities, or defaults in the management and disbursement of funds controlled by such agency, to be conducted by the department of audit; provided, that the comptroller may also charge such agency for additional investigative or review work or additional accounting services which the comptroller may deem necessary.
  3. Nothing herein shall amend or modify any requirement of a general or private act for an audit by a certified public accountant or public accountant. This section shall apply to political subdivisions, special taxing districts, boards, commissions, educational cooperatives, intergovernmental cooperatives, and any other governmental agency, including, but not limited to, municipal corporations, utility districts, school boards, and housing authorities created under the Housing Authorities Law, compiled in title 13, chapter 20, part 1, which are otherwise subject to financial audit by the state or federal government. In addition to the other requirements of this section, such agency shall furnish a copy of such audit report to the comptroller of the treasury.
  4. The comptroller of the treasury, through the department of audit, shall be responsible for determining that such audits are prepared in accordance with generally accepted governmental auditing standards and that such audits meet the minimum standards prescribed by the comptroller. The comptroller of the treasury shall prepare a uniform audit manual as is required to assure that the books and records are kept in accordance with generally accepted accounting principles and that the minimum audit standards prescribed by the comptroller are met.

Acts 1961, ch. 233, § 2; 1977, ch. 103, § 7; T.C.A., §§ 9-314, 9-3-112; Acts 1985, ch. 118, § 8; 1992, ch. 764, § 1; 2018, ch. 495, § 6.

9-3-213. Person or firm making audit to furnish copy to comptroller of the treasury.

Any person or firm making such audit shall furnish a certified copy of the audit report to the office of the comptroller of the treasury at the same time of submitting such report to the body that ordered the audit to be made.

Acts 1961, ch. 233, § 3; T.C.A., §§ 9-315, 9-3-113; Acts 1985, ch. 118, § 8.

Part 3
Misappropriation of State-Shared Funds

9-3-301. Misappropriation of state-shared funds by counties — Withholding of funds — Bond.

  1. In the event that any county official, department, commission or other agency of any county, misappropriates any funds paid to the county from state-shared revenues to the extent that such is in violation of any state law, the comptroller of the treasury, upon determination by a certified audit that such a misappropriation has occurred, shall certify the same to the commissioner of finance and administration.
  2. Upon such certification, the commissioner shall withhold, or cause to be withheld, from state-shared revenues from all other agencies, commissions, departments, or officials of the county, a sum equal to the ratio of the amount misappropriated during the fiscal year to all the state-shared revenues payable to all agencies or departments of the county during the fiscal year, as applied to the amount of state-shared revenues, the individual agency or department was due from state-shared revenues during the fiscal year.
  3. Any county official vested by law with the authority to administer state-shared funds shall furnish a good and sufficient bond in the amount of one hundred thousand dollars ($100,000), or in a greater sum as the county legislative body may determine, payable to the state, to indemnify the county against the loss of any funds occurring as a result of such person's unlawful or dishonest acts. The bond shall be prepared in accordance with title 8, chapter 19, approved by the county legislative body, recorded in the office of the county register of deeds and transmitted to the office of the county clerk for safekeeping.

Acts 1972, ch. 835, § 1; 1977, ch. 270, § 15; T.C.A., §§ 9-316, 9-3-201; Acts 1985, ch. 118, § 8; 1998, ch. 677, § 13; 2013, ch. 315, § 20.

Compiler's Notes. Acts 2013, ch. 315, § 31 provided that the act, which amended subsection (c), shall apply to the renewal or obtaining an official bond for any bonding after April 29, 2013.

9-3-302. Funds may be withheld in year subsequent — Amount equal to amount misappropriated.

The commissioner of finance and administration may withhold such funds as specified in § 9-3-301 from distribution to the county during the fiscal year immediately subsequent to the year the misappropriation took place. Upon such certification, the commissioner may withhold or cause to be withheld, from state-shared revenues distributed to the county, for use by a particular agency or department in which the misappropriation occurred, a sum equal to the amount misappropriated.

Acts 1972, ch. 835, § 2; T.C.A., §§ 9-317, 9-3-202; Acts 1985, ch. 118, § 8.

9-3-303. Right to appeal the determination of comptroller of the treasury.

Any county or county official aggrieved by the determination of the comptroller of the treasury may appeal such decision to the chancery court of the county where the misappropriation occurred.

Acts 1972, ch. 835, § 3; T.C.A., §§ 9-318, 9-3-203; Acts 1985, ch. 118, § 8.

Part 4
Local Government Modernization Act of 2005

9-3-401. Short title.

In order to ensure local governments in Tennessee maintain adequate accounting records and comply with generally accepted accounting principles for financial accounting and reporting, there is hereby created the “Local Government Modernization Act of 2005.”

Acts 2005, ch. 191, § 1.

9-3-402. Determination of local governments not in compliance with accounting and financial reporting standards — Development of work plan.

The comptroller of the treasury shall determine those local governments that are in noncompliance with the accounting and financial reporting standards established by the Governmental Accounting Standards Board (GASB). Those governments determined to be in noncompliance with GASB accounting and financial reporting standards shall be required to submit an implementation work plan to the comptroller of the treasury on a date prescribed by the comptroller. The chief executive officer of the local government shall serve as the primary person with authority and responsibility for development and submission of the local government's work plan, which shall include the primary government and all component units of the local government. The work plan shall include due dates and responsible persons or parties for implementation.

Acts 2005, ch. 191, § 1; 2018, ch. 499, § 1.

9-3-403. Assistance to develop work plan.

If a local government fails to submit a work plan by the date prescribed, the comptroller shall provide assistance to the local government to develop a work plan within sixty (60) days of the date the plan should have been filed. If the local government does not agree to a work plan within this sixty-day period, the comptroller shall provide a work plan that meets the requirements for implementation.

Acts 2005, ch. 191, § 1; 2018, ch. 499, § 2.

9-3-404. Penalties and restrictions for failure to implement accounting and financial reporting standards.

If a local government fails to implement accounting and financial reporting standards as required by the GASB, as determined by the comptroller, the following penalties or restrictions may be imposed on the noncomplying local government:

    1. The local government shall not be eligible for economic and community development grants funded by the state and administered by the department of economic and community development as mutually agreed upon by the comptroller and the commissioner of economic and community development, and bank excise tax and Hall income tax revenues that are collected and distributed by the state shall be reduced to an amount agreed upon by the comptroller and the commissioner of revenue, but not to exceed five percent (5%) of the total amount due the local government in any fiscal year, until the local government is in compliance with accounting and financial reporting standards required by the GASB;
    2. If a school district, defined as a county, municipal or special school district or system, fails to comply, the school district shall not be eligible for certain state funded education grants administered by the department of education until the school district complies with accounting and financial reporting standards required by the GASB. The comptroller and the commissioner of education shall mutually agree to the categories of grants subject to this restriction; and
    3. If a county highway department fails to comply, the comptroller and the commissioner of revenue shall agree on an amount whereby the funds that the county highway fund would otherwise receive from state gasoline tax proceeds as allocated pursuant to § 67-3-901 shall be reduced. After such amount is agreed upon, the department of revenue shall make the reductions from the monthly allocations of gasoline tax proceeds to the county. The amounts so reduced shall be held in reserve by the department of revenue and allocated to the county upon the county becoming compliant as determined by the comptroller;
  1. The comptroller shall provide the local government with a list of professional accounting firms available to assist in implementation of the work plan. The local government shall provide funds for the cost of this assistance. If the local government fails to provide funds for the cost of this assistance, such cost shall become an outstanding legal obligation of the local government. If the local government fails to pay the cost, the state shall pay the cost and the local government shall be required to reimburse the state; and
  2. In those county governments that fail to implement accounting and financial reporting standards required by the GASB, the comptroller shall review and evaluate the county's financial management system and make a recommendation to the county's legislative body on how to improve the financial management system to facilitate compliance with accounting and financial reporting standards. The county legislative body shall act upon the recommendation of the comptroller within ninety (90) days of notification.

Acts 2005, ch. 191, § 1; 2018, ch. 499, §§ 3-5.

9-3-405. Establishment of audit committee — Notice requirements — Open meetings — Confidential, nonpublic executive sessions.

  1. Local governments are encouraged to consider establishing an audit committee. The comptroller may require that an audit committee be established in any local government in this state that:
    1. Is in noncompliance with the accounting and financial reporting standards required by the GASB; or
    2. Has recurring findings from the annual audit for three (3) or more consecutive years as determined by the comptroller to be a material weakness in internal control or material noncompliance under government auditing standards.
  2. The governing body of the local government shall create the audit committee. The audit committee members shall be external to management and may be members of the governing body, citizens from within the boundaries of the local government, or a combination of both. Members of the audit committee shall be selected by the legislative body. The audit committee shall establish responsibilities and duties that are stated in a resolution approved by the legislative body. The responsibilities and duties, at a minimum, shall address financial and other reporting practices, internal control, compliance with laws and regulations, and ethics. The resolution, or any subsequent amendments to the resolution, creating the duties and responsibilities of the audit committee shall be submitted to the comptroller prior to approval by the legislative body. The comptroller shall review the proposed resolution, or any subsequent amendments to the resolution, and report back to the local government on whether the resolution, or subsequent amendments to the resolution, follows recommended guidelines for an audit committee. The resolution, or subsequent amendments to the resolution, adopted by the legislative body must conform to the report issued by the comptroller. Notwithstanding the requirements of this subsection (b), if an audit committee was created by the legislative body of a county whose charter requires charter changes to be approved in a referendum, and if such actions occurred and were approved in a referendum prior to January 1, 2011, then such an audit committee shall be considered created pursuant to this part.
  3. Except as provided in subsection (d), all meetings of an audit committee created pursuant to this chapter shall abide by the notice requirements adhered to by the local government to which the audit committee is attached.
  4. All meetings of an audit committee created pursuant to this chapter shall be subject to the open meetings provisions of title 8, chapter 44, except, upon a majority vote of those members in attendance for the public portion of the meeting, the audit committee may hold confidential, nonpublic executive sessions to discuss the following items:
    1. Items deemed not subject to public inspection under §§ 10-7-503 and 10-7-504, and all other matters designated as confidential or privileged under this code;
    2. Current or pending litigation and pending legal controversies;
    3. Pending or ongoing audits or audit related investigations;
    4. Information protected by federal law; and
    5. Matters involving information under § 9-3-406 where the informant has requested anonymity.
  5. The presiding officer shall announce during the public portion of the audit committee meeting that no business, other than that described under subdivisions (d)(1)-(5), shall be considered during the confidential, nonpublic executive session by the audit committee.
  6. For purposes of providing notice of a confidential, nonpublic executive session, the agenda must disclose the general nature of the item or items to be discussed as described under subdivisions (d)(1)-(5).
  7. A meeting at which both subject matter open to the public and confidential subject matter will be discussed shall be conducted as follows:
    1. All business relating to subject matter that is public in nature shall be conducted first; and
    2. At the conclusion of the meeting relating to subject matter that is public in nature and upon a successful majority vote to enter into executive session, the chair shall announce to the members and the public assembled that the public portion of the meeting is adjourned and that the remainder of the meeting will concern matters that are confidential under subdivisions (d)(1)-(5). When everyone at the meeting who is not authorized to attend the confidential portion of the meeting has departed, the confidential portion of the meeting shall commence.
  8. Only individuals whose presence is reasonably necessary in order for the audit committee to carry out its executive session responsibilities may attend the portion of the executive session relevant to that person's presence; however, nothing contained in this section shall prohibit the comptroller of the treasury or the comptroller's designee from attending or being present during an executive session.
  9. This chapter is not intended to prevent the full governing body of the local government from going into confidential, nonpublic executive session with the audit committee at a regularly or specially scheduled meeting of the full governing body for the purpose of further discussing only those matters as described under subdivisions (d)(1)-(5). All portions of meetings of the full governing body of the local government, where matters described under subdivisions (d)(1)-(5) will be discussed, shall be exempt from title 8, chapter 44; provided, that the full governing body of the local government shall abide by the same executive session notice requirements imposed upon the audit committee by this section, and shall not make a decision or deliberate toward a decision on any matter.

Acts 2005, ch. 191, § 1; 2009, ch. 368, § 1; 2011, ch. 97, § 1; 2018, ch. 499, § 6.

Cross-References. Confidentiality of public records, § 10-7-504.

9-3-406. Establishment of process for confidential reporting of suspected illegal, improper, wasteful or fraudulent activity — Retaliatory activities prohibited.

  1. An audit committee created pursuant to this chapter shall establish a process by which employees, taxpayers, or other citizens may confidentially report suspected illegal, improper, wasteful, or fraudulent activity. If the information provided causes the chair of the audit committee to believe that illegal, improper, wasteful, or fraudulent activity may have occurred, then the chair of the audit committee shall report the information to the office of the comptroller of the treasury pursuant to title 8, chapter 4, part 5. The detailed information received and generated pursuant to a report of suspected illegal, improper, wasteful, or fraudulent activity, shall be considered audit working papers and is therefore not an open record pursuant to title 10, chapter 7.
  2. Section 50-1-304 shall apply to all local government employees. In addition, no local government employees shall suffer any of the prohibited retaliatory actions specified in § 50-1-304 for reporting or cooperating with the audit committee, internal auditors, or auditors from, or approved by, the comptroller of the treasury, or for reporting any facts to the local government to which the audit committee is attached. Any person who knowingly and willingly retaliates or takes adverse action of any kind against any person for reporting alleged wrongdoing pursuant to this chapter commits a Class A misdemeanor.

Acts 2009, ch. 368, § 2; 2013, ch. 64, § 2.

Cross-References. Confidentiality of public records, § 10-7-504.

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

9-3-407. Corrective action plan.

Each local government with one (1) or more audit findings in its annual audit shall submit a corrective action plan to the comptroller of the treasury or the comptroller's designee in a manner as prescribed by the comptroller or the comptroller's designee that addresses the actions taken or to be taken in response to each audit finding received in the annual audit. The corrective action plan must provide the name or names of the contact person or persons responsible for the corrective action, the corrective action taken or planned, and the anticipated completion date. If the local government does not agree with an audit finding, or believes corrective action is not required, the corrective action plan must state the reasons and justifications for that disagreement or belief.

Acts 2017, ch. 383, § 1.

Part 5
Public Employee Defined Benefit Financial Security Act of 2014

9-3-501. Short title.

This part shall be known and may be cited as the “Public Employee Defined Benefit Financial Security Act of 2014.”

Acts 2014, ch. 990, § 3.

9-3-502. Applicability of part.

This part shall apply to political subdivisions that provide defined benefit plans not administered by the Tennessee consolidated retirement system.

Acts 2014, ch. 990, § 3.

9-3-503. Part definitions.

  1. As used in this part, unless the context otherwise requires:
    1. “Actuarially determined contribution” (ADC), formerly known as the “actuarially required contribution” means the actuarially determined annual required contribution that incorporates both the normal cost of benefits and the amortization of the pension plan's unfunded accrued liability;
    2. “Pension plan” means the defined benefit pension plan established and maintained by a political subdivision for its employees, excluding a political subdivision's participation in the Tennessee consolidated retirement system pursuant to title 8, chapters 34–37. The term “pension plan” shall include all pension plans that are open or closed to membership, and shall also include the plural, referring to any and all pension plans provided by a political subdivision;
    3. “Political subdivision” means any local governmental entity, including, but not limited to any municipality, metropolitan government, county, utility district, school district, public building authority, housing authority, emergency communications district, and development district created and existing pursuant to the laws of this state, or any instrumentality of government created by any one (1) or more of the named local governmental entities;
    4. “Political subdivision employee” means any person in the employ of a political subdivision who participates in the political subdivision's pension plan;
    5. “Unfunded accrued liability” means the actuarially determined accrued liabilities of the pension plan that are greater than the actuarially determined value of the pension plan assets.

Acts 2014, ch. 990, § 3.

9-3-504. Political subdivisions to develop funding policies.

  1. Notwithstanding any law, rule, ordinance, resolution, charter, pension plan, agreement or pension plan contract to the contrary, the applicable provisions of this part shall apply to any political subdivision in the state that has established and maintains, directly or indirectly, a defined benefit pension plan for the benefits of its employees, irrespective of the manner in which the pension plan is administered.
  2. Each political subdivision shall develop a funding policy for financing the obligations under the pension plan. Such funding policy shall be legally adopted and approved through a resolution by the political subdivision's chief legislative body or governing body. The funding policy shall be in effect until amended. Each political subdivision shall develop a funding policy for fiscal years beginning after June 15, 2015. The funding policy and any amendment thereto shall be submitted to the comptroller of the treasury within thirty (30) days after adoption.
  3. The political subdivision's funding policy shall include, but not be limited to the following:
    1. The ADC for each pension plan shall include the normal costs and the amortization of the unfunded accrued liability, to the extent that any of the plans have any unfunded accrued liability for a particular fiscal year;
    2. The maximum amortization period for which any unfunded accrued liabilities will be paid; and
    3. A statement that the political subdivision's budget shall include funding of at least one hundred percent (100%) of the ADC, except as provided in § 9-3-505(b).
  4. The actuarial methodology is expected to provide that projected revenues (employer contributions, employee contributions, and investment earnings), and current assets will finance all of the projected benefits (death, disability, and retirement) provided by the plan. In the event that pension plan has an unfunded accrued liability, the level dollar amortization method shall be utilized beginning on or before June 15, 2020, for financing the unfunded accrued liability, and will continue to be utilized thereafter.
  5. The ADC calculated by the political subdivision's actuary shall be calculated utilizing the following methodology, and in accordance with the Actuarial Standards of Practice established by the Actuarial Standards Board:
    1. Actuarial cost method allocating normal costs over a period beginning no earlier than the date of employment which should not exceed the last assumed retirement age. This method is designed to fully fund the long-term costs of promised benefits, consistent with the objective of keeping contributions relatively stable and equitably allocating the costs over the employees' period of active service. Commencing with the plan fiscal year beginning after June 15, 2019, a generally accepted actuarial method that achieves the above objectives shall be used, except the projected unit credit method is not permitted;
    2. Actuarial value of assets calculated using a maximum ten-year asset smoothing period. Any smoothing period greater than five (5) years will have a maximum twenty percent (20%) market corridor. For the purposes of this subsection (e), the term “market corridor” means a range beyond which deviations are not smoothed;
    3. No later than the plan fiscal year beginning after June 15, 2020, the level dollar amortization method of unfunded accrued liabilities;
    4. Mortality assumptions, which should consider the effect of expected mortality improvements, and shall be utilized beginning on or before the plan fiscal year after June 15, 2024, and will continue to be utilized thereafter;
    5. Investment earnings assumption that shall not be greater than fifty (50) basis points above the rate adopted by the Tennessee consolidated retirement system; and
    6. A closed amortization period not to exceed thirty (30) years for all unfunded accrued liabilities.
  6. The ADC for the political subdivision's pension plan shall be determined by an independent, qualified actuary.
  7. The actuary used by the political subdivision shall be a member of the American Academy of Actuaries.
  8. The actuary used by a political subdivision for the calculation of the ADC for its pension plan shall not be an employee of that political subdivision, and shall not be otherwise eligible to participate in any of the political subdivision's pension plans.
  9. The measurement standard used to determine a pension plan's funded status must be done in accordance with rules, standards, guidelines, and interpretations established by the governmental accounting standards board.
  10. The actuary's determinations, including the ADC, shall be contained in a report submitted to the political subdivision and shall include a certification indicating the actuary's report has been prepared in accordance with all of the Actuarial Standards of Practice established by the Actuarial Standards Board as well as an explanation for any deviations. The actuary shall also certify in the report the overall appropriateness of the analysis in addition to the assumptions and results. The assumptions analyzed by the actuary must include, but not be limited to, the following: asset experience, including, but not limited to, the investment rate of return, discount rate, salary experience, cost of living adjustments, rates of retirement, turnover, and disability; mortality, including future improvement; and forms of benefit payments, including, but not limited to, lump sum payments.

Acts 2014, ch. 990, § 3; 2018, ch. 681, § 1; 2020, ch. 783, § 1.

Amendments. The 2020 amendment added (j).

Effective Dates. Acts 2020, ch. 783, § 4. July 15, 2020.

9-3-505. Payments by political subdivision to pension plan — Annual funding progress percentage — Plan of correction.

  1. A political subdivision shall annually pay a payment to the pension plan of no less than one hundred percent (100%) of the ADC; however, it may make a payment of more than one hundred percent (100%) of the ADC.
  2. A political subdivision that is not paying at least one hundred percent (100%) of the ADC to its pension plan for the fiscal year that includes June 30, 2015, shall maintain effort in the percentage of the ADC paid and, in addition thereto, in each subsequent year, pay the cumulative annual funding progress percentage to increase the funding percentage of the ADC to the pension plan until payment of one hundred percent (100%) of the ADC occurs within a maximum of five (5) consecutive years after June 30, 2015. The annual funding progress percentage is, as a minimum, the percentage determined by dividing by five (5) the difference between the percentage of the ADC paid in the plan fiscal year preceding July 1, 2015, subtracted from one hundred percent (100%). When payment of one hundred percent (100%) of the ADC occurs, the political subdivision shall continue to pay one hundred percent (100%) of the ADC annually. The ADC shall be recalculated each year and the percentage of funding shall be based on the most recent recalculation of the ADC.
  3. If a political subdivision is unable to meet the annual funding progress percentage set out in subsection (b), the political subdivision may submit a plan of correction to the state treasurer for consideration. If the state treasurer determines the plan of correction is sufficient to comply with the requirements of subsection (b) as soon as possible and to pay one hundred percent (100%) of the ADC to the pension plan by June 30, 2020, the state treasurer shall submit the plan of correction to the state funding board for approval. The plan of correction shall contain, at a minimum, the following: the reason for the political subdivision's inability to meet the annual funding progress percentage of subsection (b); the political subdivision's detailed plan to comply with the requirements of subsection (b) as soon as possible and to pay one hundred percent (100%) of the ADC to the pension plan no later than June 30, 2020, including, but not limited to the amount or amounts to be paid by a date certain or over a period of time; reports necessary to demonstrate how the political subdivision will comply with the plan of corrective action; and any amendment to the political subdivision's funding policy to comply with the plan of corrective action. In addition to the information provided in the political subdivision's plan of corrective action, the political subdivision shall promptly furnish any additional documentation the state treasurer may request, including, but not limited to, financial data and actuarial reports.
  4. A political subdivision that does not pay one hundred percent (100%) of its ADC in any fiscal year beginning with July 1, 2020, shall pay the difference between funding equal to one hundred percent (100%) of its ADC and what was actually paid by the political subdivision in a particular fiscal year by adding the difference or differences to the one-hundred-percent payment of the political subdivision's ADC, which must be paid in the fiscal year subsequent to the underpaid ADC. The difference or differences may be added cumulatively to the political subdivision's one-hundred-percent payment of its ADC.

Acts 2014, ch. 990, § 3; 2020, ch. 783, § 2.

Amendments. The 2020 amendment added (d).

Effective Dates. Acts 2020, ch. 783, § 4. July 15, 2020.

9-3-506. Provisions applicable to political subdivision's administration of pension plan benefits.

  1. The following shall apply to all political subdivisions subject to this part:
      1. For political subdivision employees hired on or after May 22, 2014, the political subdivision may freeze, suspend or modify benefits, employee contributions, plan terms and design on a prospective basis;
      2. Subdivision (a)(1)(A)  does not affect any judicial precedents or statutory law as they apply to employees who were employed prior to May 22, 2014;
    1. For any pension plan that is funded below sixty percent (60%), the political subdivision shall not establish a benefit enhancement until it has received written approval by the state treasurer. For the purposes of this subdivision (a)(2), “benefit enhancement” means any change in member benefits, benefit structure, or benefit formula provided by a political subdivision relative to its pension plan that, according to the political subdivision's actuary, will or is estimated to permanently, temporarily, or intermittently increase either the employer or employee contributions or the liabilities of the pension plan; and
    2. For political subdivisions with an existing pension plan as of May 22, 2014, the political subdivision shall not establish a new pension plan that changes the funding policy, increases the employer cost, or adds to the unfunded accrued liability of an existing pension plan until it has received written approval from the state treasurer. For the purposes of this subdivision (a)(3), a political subdivision establishes a new pension plan by taking any or a combination of the following actions:
      1. Establishing a tier that has not been previously provided as part of a pension plan;
      2. Reopening a previously closed pension plan or previously closed tier of a pension plan; or
      3. Establishing a plan that is different from the political subdivision's existing pension plan.
  2. The accrued benefits earned prior to any adjustment pursuant to subdivision (a)(1) shall remain an enforceable right and may not be reduced without the written consent of the political subdivision employee, unless the employee is subject to the forfeiture of the employee's retirement benefits in accordance with § 8-35-124.
    1. Notwithstanding any other law, for political subdivision employees hired on or after May 22, 2014, nothing under state law confers to participants in the pension plan an implied right to future retirement benefit arrangements, and such participants may not assert the indefinite continuation of the retirement formulas, contribution rates, eligibility ages, or any other provision of the pension plan.
    2. Subdivision (c)(1) does not affect any judicial precedents or statutory law as they apply to employees who were employed prior to May 22, 2014.

Acts 2014, ch. 990, § 3; 2018, ch. 681, § 2; 2020, ch. 783, § 3.

Amendments. The 2020 amendment rewrote (a)(2) and (a)(3) which read: “(2) For any pension plan that is funded below sixty percent (60%), the political subdivision shall not establish benefits enhancements unless approved by the state treasurer; and (3) For political subdivisions with an existing pension plan as of May 22, 2014, the political subdivision shall not establish a new pension plan until it has received written approval from the state treasurer.”

Effective Dates. Acts 2020, ch. 783, § 4. July 15, 2020.

9-3-507. Withholding of money from state-shared taxes to be paid to political subdivision's pension plan in event of failure to pay established percentages.

  1. In the event the political subdivision shall fail to fund the ADC according to the percentages established in § 9-3-505, the commissioner of finance and administration, at the direction of the comptroller of the treasury, is authorized to withhold such amount or part of such amount from any state-shared taxes that are otherwise apportioned to such political subdivision. The money withheld from state-shared taxes shall be paid to the political subdivision's pension plan.
  2. The deduction shall be made as a first charge against any moneys payable to such political subdivision regardless of the source of such payment and regardless of the purpose or contemplated use of such funds.
  3. Regardless of a political subdivision's funding level of its ADC, a political subdivision may, with the recommendation of the state treasurer and the approval of the board of trustees of the Tennessee consolidated retirement system:
    1. Continue the administration of its pension plan, but have the pension plan funds co-invested with the pension plan assets for the Tennessee consolidated retirement system, but established in a separate fund from the Tennessee consolidated retirement system assets, and accounted for separately with accurate and detailed accounting records. The separate fund shall be operated in accordance with IRS Revenue Ruling 2011-1 or subsequent guidance regarding a group trust fund under Internal Revenue Code §  401(a)(24) (26 U.S.C. § 401(a)(24)). Before a political subdivision's pension plan assets are co-invested with Tennessee consolidated retirement system assets, the political subdivision shall provide the department of treasury with its plan document and a determination letter from the internal revenue service that its plan assets are qualified assets or written advice from competent counsel of the Tennessee consolidated retirement system that the plan is a qualified plan. The political subdivision shall enter into an agreement with the retirement system for the co-investment of the political subdivision's pension plan assets, which shall include a charge assessed by the retirement system against the political subdivision for services related to the co-investment of assets; or
      1. Continue the pension plan, but have the plan administered by the Tennessee consolidated retirement system and have the assets co-invested with the Tennessee consolidated retirement system pension plan assets;
      2. The political subdivision shall enter into an agreement with the Tennessee consolidated retirement system to provide billing services, participant enrollment services, participant accounts, data processing, recordkeeping, investment and other related services that are necessary or appropriate to the administration of the political subdivision's pension plan. The agreement may provide that the services be provided directly by staff of the retirement system or through contracts with other providers;
      3. Any agreement entered into under this section shall require that the political subdivision remain the responsible administrator for the political subdivision's pension plan, and that neither the state of Tennessee nor the retirement system, or any of its officers, agents, employees, or boards shall act as a trustee or be considered the trustee for the political subdivision's pension plan;
      4. The chair of the retirement system shall assess a charge to the political subdivision for the administration of the political subdivision's pension plan and co-investment of its assets, in an amount to be determined by the chair, to meet the administrative expenses of the retirement system in providing the administration and co-investment services under this section. It is the legislative intent that the state shall realize no increased cost as a result of the administration of the political subdivision's pension plan and co-investment of its assets, and that all costs associated with the administration of the pension plan, including administrative and co-investment costs, shall be the responsibility of the respective political subdivision. In the event that the political subdivision refuses or otherwise fails to satisfy this liability, such amounts shall become a lien on the property of the political subdivision and may be withheld from state-shared taxes which are otherwise apportioned to the political subdivision;
      5. As a condition of providing the services described in this section for the administration of a political subdivision's pension plan, and at any time thereafter, the chair of the retirement system may require that the political subdivision provide proof that the political subdivision's pension plan is a qualified plan and otherwise complies with the applicable provisions of the Internal Revenue Code, as amended. The chair of the retirement system may require an opinion of counsel or other assurance satisfactory to the chair that the provision of the services described in this section does not cause the retirement system, the state, or any of their agencies or employees to violate any federal or state laws or regulations;
      6. Political subdivisions shall take all actions that the retirement system, in its discretion, deems necessary for compliance by the retirement system with all applicable federal and state laws or for qualification of the retirement system for any exemptions from regulation available under those laws, including, but not limited to, the federal Securities Act of 1933, as amended, (15 U.S.C. § 77a et seq.), and the Investment Company Act of 1940, as amended, (15 U.S.C. § 80(a)-1 et seq.);
      7. The political subdivision's plan shall be administered separately from the Tennessee consolidated retirement system, and shall be administered according to the political subdivision's pension plan documents;
      8. The political subdivision's plan assets shall be established in a separate fund from the Tennessee consolidated retirement system assets, and accounted for separately with accurate and detailed accounting records. The separate fund shall be operated in accordance with IRS Revenue Ruling 2011-1 or subsequent guidance regarding a group trust fund under Internal Revenue Code §  401(a)(24). Before a political subdivision's pension plan assets are co-invested with Tennessee consolidated retirement system assets, the political subdivision shall provide the department of treasury with its plan document and a determination letter from the internal revenue service that its plan assets are qualified assets.
  4. Notwithstanding any law to the contrary, through its administration of a political subdivision's pension plan, or the co-investment of the political subdivision's pension plan assets, as set forth in subdivisions (c)(1) and (2), the Tennessee consolidated retirement system shall not be liable for the payment of any retirement allowances or other benefits on account for the political subdivision employees or their respective beneficiaries, for which reserves have not been previously created from funds contributed by the political subdivision or the political subdivision employees for such benefits.
    1. Notwithstanding any law to the contrary, to the extent that some or all of a political subdivision's pension plan assets intended to be invested pursuant to subsection (c) do not comport with the investment policy for the Tennessee consolidated retirement system:
      1. The board of trustees for the Tennessee consolidated retirement system may permit, as a written exception or amendment to the investment policy, the co-investment of the pension plan assets with the pension plan assets for the Tennessee consolidated retirement system under subsection (c). Such an exception or amendment shall contain the limitations, conditions, or restrictions on the co-investment of pension plan assets, including, but not limited to, the management strategy and timeframe for the conversion or liquidation of the pension plan assets to an investment authorized by the retirement system's investment policy within a reasonable period of time, considering the market for such investments. An exception or amendment under this subsection (e) may address multiple pension plans, a single pension plan, or be general in nature; or
      2. The state treasurer may take custody of the pension plan assets in an account separate from the Tennessee consolidated retirement system assets. The state treasurer shall invest the pension plan assets in accordance with the political subdivision's investment policy. The political subdivision's agreement for services provided under this section shall provide:
        1. The limitations, conditions, or restrictions on the investment of pension plan assets, including, but not limited to, the management strategy and timeframe for the conversion or liquidation of the pension plan assets to an investment authorized by the retirement system's investment policy within a reasonable period of time, considering the market for such investments; and
        2. A charge assessed to the political subdivision for such services.
    2. Nothing in this subsection (e) shall prohibit a portion of a political subdivision's assets from being co-invested while a portion of the political subdivision's assets are invested separately under this subsection (e).

Acts 2014, ch. 990, § 3; 2018, ch. 833, § 1.

Chapter 4
State Funds, State Budget and Appropriations

Part 1
Definitions

9-4-101. Collateral.

“Collateral” means eligible collateral pledged by a state depository.

Acts 1985, ch. 118, § 13.

Compiler's Notes. Former § 9-4-101 (Acts 1919, ch. 29, §§ 1, 2; Shan. Supp., §§ 20094¼, 294½; Code 1932, §§ 253, 254; T.C.A. (orig. ed.), § 9-401; Acts 1983, ch. 91, § 2), concerning deposit of state funds, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

9-4-102. Default.

“Default” may include, but is not limited to:

  1. The failure of any state depository to return any state deposit, including earned interest, in accordance with the terms of the deposit contract;
  2. The failure of any state depository to pay any check, draft or warrant drawn by the state treasurer;
  3. The failure of any state depository to honor any request for electronic transfer of funds to the state;
  4. The failure of any state depository to account for any check, draft, warrant, order, deposit certificate or money entrusted to it by the state;
  5. The issuance of any order of any court or the taking of any formal action by any supervisory authority, which has the effect of restraining a state depository from making payments of deposit liabilities;
  6. The appointment of a receiver for a state depository; or
  7. Any other action which the state treasurer determines to place state deposits in jeopardy.

Acts 1985, ch. 118, § 14.

Compiler's Notes. Former § 9-4-102 (Code 1858, § 230 (deriv. Acts 1835-1836, ch. 27, § 10); Shan., § 278; Code 1932, § 222; mod. C. Supp. 1950, § 222; T.C.A. (orig. ed.), § 9-402; Acts 1983, ch. 91, § 3), concerning deposit of receipts by treasurer, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

Cross-References. Default, § 9-4-406.

9-4-103. Eligible collateral.

“Eligible collateral” means:

  1. Bonds of the United States or any of its agencies;
  2. Obligations guaranteed by the United States or any of its agencies, the payments of which are fully guaranteed both as to principal and interest by the United States;
  3. Bonds of the state of Tennessee, including any revenue bond issued by any agency of the state specifically including institutions under the control of the state board of regents, the board of trustees of the University of Tennessee and bonds issued in the name of the state school bond authority;
  4. Bonds of any utility district, county or municipal corporation of the state of Tennessee, including bonds payable from revenues (expressly excluding bonds of any road, levee or drainage district) upon which such bonds there has been no default in the payment of interest more than thirty (30) days upon any one (1) installment of interest, for the five (5) years next preceding the deposit of such bonds;
  5. Loans to students guaranteed one hundred percent (100%) by the Tennessee student assistance corporation, during the dormant period of such loan;
  6. Bonds issued under title 7, chapters 37 and 53, or under title 48, chapter 101, part 3, that are rated “A” or higher by any nationally recognized rating service;
  7. In addition, the state treasurer, with the concurrence of the commissioners of finance and administration and of financial institutions, may accept any other collateral security which is acceptable to the secretary of the treasury to secure the United States for deposits of public money in tax and/or loan accounts;
  8. An irrevocable letter of credit issued by the federal home loan bank; provided, that:
    1. The federal home loan bank is rated investment grade by at least one (1) nationally recognized securities rating service; and
    2. The state treasurer may require the state depository to promptly pledge securities in lieu of the letter of credit if the state treasurer believes it necessary to protect public funds;
  9. A surety bond issued by an insurance company licensed under the laws of this state that meets the following:
      1. The company has a financial strength rating, also known as claims-paying ability, in one (1) of the two (2) highest categories by at least one (1) nationally recognized statistical rating agency; and
      2. Any other financial or participation criteria and conditions established by the state funding board;
    1. The company offering the surety bond and the form of the bond is approved by the state funding board;
    2. The amount of surety bond pledged by any one (1) state depository or qualified public depository in lieu of other eligible collateral shall not exceed thirty million dollars ($30,000,000) or fifty percent (50%) of all collateral for that institution required to be pledged to the state treasurer or to the collateral pool, whichever is lower;
    3. The treasurer shall monitor the financial strength rating of a qualified insurance company no less than weekly, and at least annually shall file a report with the state funding board and the collateral pool board on the condition of the qualified insurance company. If the condition of an insurer changes to the extent that the issuer would no longer be qualified under the requirements of subdivision (9)(A), the treasurer shall immediately notify the state funding board and the collateral pool board; and the insurer shall thereafter become disqualified;
    4. In the event an insurer becomes disqualified under subdivision (9)(D), the state depository or qualified public depository using the insurer's surety bond shall be required within thirty (30) days' notice from the treasurer to substitute other eligible collateral or to otherwise meet the required collateral level;
    5. Notwithstanding the disqualification of an insurer under subdivisions (9)(D) and (E), the surety bond of the insurer shall remain in effect until its expiration, nonrenewal or termination as otherwise permitted by law;
    6. In addition to the authority otherwise provided in this section or by law, the state treasurer may require the state depository or qualified public depository to promptly pledge eligible collateral in lieu of the surety bond if the treasurer makes a finding that additional collateral is necessary to protect public funds;
    7. A surety bond authorized in this subdivision (9) may only be used to secure funds in the custody of the state treasurer or to secure funds covered by the collateral pool created under part 5 of this chapter; and
    8. In the event that an issuer of surety bonds desires to withdraw from the program or to terminate a surety bond, the bond issuer shall give the state treasurer and the insured state depository or qualified public depository no less than sixty (60) days' advance notice of the withdrawal, nonrenewal or cancellation of the bonds; or
  10. State or municipal bonds from other states or from municipalities in other states; provided, that:
    1. The bond meets the definition of “qualified tax-exempt obligation” as defined in Section 265(b)(3) of the Internal Revenue Code of 1986 (26 U.S.C. § 265(b)(3));
    2. The bond is rated AA-, Aa3, or a higher rating by a nationally recognized bond rating service;
    3. The bond is not a structured debt instrument; and
    4. If the bond is downgraded below the minimum rating, the state depository shall substitute other eligible collateral or otherwise meet the required collateral levels within two (2) working days.

Acts 1985, ch. 118, § 15; 1986, ch. 551, § 2; 1994, ch. 586, § 1; 1997, ch. 217, §§ 3, 14; 2009, ch. 6, § 1; 2012, ch. 942, § 1; 2013, ch. 202, § 1; 2018, ch. 752, §§ 1, 2.

Compiler's Notes. Former § 9-4-103 (Acts 1883, ch. 132, § 1; Shan., § 279; Code 1932, § 223; mod. C. Supp. 1950, § 223; Acts 1957, ch. 308, § 1; T.C.A. (orig. ed.), § 9-403; Acts 1983, ch. 91, § 4), concerning certificates of deposit, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

9-4-104. Loss.

“Loss” includes, but is not limited to:

  1. The principal amount of the state deposit;
  2. All accrued interest through the date of default;
  3. Additional interest at the rate the state deposit was earning on the total of subdivisions (1) and (2) through the day of payment to the state by a liquidator or other third party or through the date of sale by the state treasurer or the state treasurer's agent; and
  4. Attorney's fees incurred in recovering state deposits.

Acts 1985, ch. 118, § 16.

Compiler's Notes. Former § 9-4-104 (Acts 1937, ch. 33, § 26; 1939, ch. 11, § 13; C. Supp. 1950, § 255.26; T.C.A. (orig. ed.), § 9-404), concerning petty cash accounts, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

9-4-105. Required collateral.

“Required collateral” means collateral whose market value is equal to one hundred five percent (105%) of the value of the state deposit secured thereby, less so much of such amount as is protected by the federal deposit insurance corporation.

Acts 1985, ch. 118, § 17; 1990, ch. 702, § 2.

Compiler's Notes. Former § 9-4-105 (Acts 1937, ch. 33, § 26; 1939, ch. 11, § 13; C. Supp. 1950, § 55.26; T.C.A. (orig. ed.), § 9-405), concerning special federal funds, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

9-4-106. State deposit.

“State deposit” means all state funds which are placed in a state depository, plus interest accrued thereon.

Acts 1985, ch. 118, § 18.

Compiler's Notes. Former § 9-4-106 (Acts 1949, ch. 137, § 1; C. Supp. 1950, § 252.2 (Williams, § 255.48a); Acts 1971, ch. 249, § 1; T.C.A. (orig. ed.), § 9-406; Acts 1983, ch. 90, § 1; 1983, ch. 91, § 2), concerning investment in government bonds, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

9-4-107. State depository.

    1. “State depository” means:
      1. Any savings bank (savings institution), or any bank chartered by the state of Tennessee;
      2. Any national bank, or federal savings institution that has its main office located in this state; or
      3. Any national or state bank, or any federal or state savings institution that has its main office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits;

        that has been designated by the state treasurer, the governor and the commissioner of finance and administration as a state depository.

    2. Notwithstanding any other law to the contrary, an automated teller machine or such other similar type receptacle or device shall not be considered a branch for purposes of this section.
  1. Whenever the satisfactory conduct of the state's business clearly demands it, and not otherwise, a bank, savings institution or trust company that does not otherwise meet the requirements in subsection (a) may be designated as a state depository by the state treasurer, the governor and the commissioner of finance and administration. In the event it becomes necessary to designate such a bank, savings institution or trust company, the department or agency seeking such designation shall make a written request to the officials enumerated above, giving in detail the necessity for the designation and all other information the officials deem material. Any bank, savings institution or trust company designated under this subsection (b) shall be deemed a state depository only for the specific purpose for which it was designated and shall not be recognized as a state depository for any other purpose.
  2. A bank, savings institution or trust company located outside this state shall not be eligible to be designated as a state depository pursuant to this section unless the bank, savings institution or trust company:
    1. Agrees that this chapter shall govern in determining its rights and responsibilities as a state depository; and
    2. Agrees to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter.
  3. Notwithstanding § 12-4-108 to the contrary, the public official described in § 12-4-108(b) shall have the power to enter into a trust agreement with any savings institution or bank described in subsection (a) for the safekeeping, custodial care and servicing of securities substituted for retained funds pursuant to § 12-4-108.
  4. It is the duty of the commissioner of financial institutions to make inquiry, on a timely basis, of the primary regulatory authority respecting the condition and safety of each out-of-state state chartered bank and of each out-of-state state chartered savings institution as a state depository, and to advise the state treasurer and the commissioner of finance and administration of the results. Such inquiry shall be made on at least an annual basis.

Acts 1985, ch. 118, § 19; 1986, ch. 551, § 11; 1986, ch. 923, § 1; 1989, ch. 183, § 1; 1997, ch. 217, § 15; 2001, ch. 33, §§ 1, 2.

Compiler's Notes. Former § 9-4-107 (Acts 1869-1870, ch. 81, § 6; Shan., § 268; Code 1932, § 212; C. Supp. 1950, § 212; T.C.A. (orig. ed.), § 9-407), concerning interest accounts kept by commissioner of finance and administration, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

Attorney General Opinions. Designation of a branch of an out-of-state bank as a state depository, OAG 97-031, 1997 Tenn. AG LEXIS 30 (3/31/97).

9-4-108. Trustee custodian.

  1. “Trustee custodian” means any bank or federal reserve bank or branch thereof or the federal home loan bank which the state treasurer has designated as trustee custodian to hold eligible collateral on behalf of the state treasurer. Such designation by the state treasurer of a bank other than a federal reserve bank or the federal home loan bank shall be submitted to the commissioners of financial institutions and finance and administration for their concurrence.
  2. Financial institutions located outside this state shall be eligible to apply to be designated as trustee custodians pursuant to subsection (a); provided, that the financial institution:
    1. Is approved to serve as a trustee custodian to hold collateral pledged to secure United States treasury tax and loan accounts;
    2. Agrees that the laws of this state shall govern in determining its rights and responsibilities as a trustee custodian; and
    3. Agrees to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter.

Acts 1985, ch. 118, § 20; 1990, ch. 702, § 6.

Compiler's Notes. Former § 9-4-108 (Code 1958, § 219 (deriv. Acts 1835-1836, ch. 12, § 13); Shan., § 265; Code 1932, § 209; mod. C. Supp. 1950, § 209; T.C.A. (orig. ed.), § 9-408), concerning copies of commissioner of finance and administration's records, was repealed by Acts 1985, ch. 118, § 12. For new law generally, see parts 1-3 of this chapter.

Applicability of this part and parts 3 and 5 of this chapter — “State treasurer” construed.
  1. Parts 1, 3 and 5 of this chapter apply to the deposit of all public funds by counties and municipalities including, but not limited to, those deposited under §§ 5-8-201, 5-8-207, 5-8-301(b)(2), 6-4-402, 6-22-120, 6-35-313, 6-56-106, and 6-56-110. No private act shall provide for the deposit or security for public funds in any manner or under any terms other than that provided in this chapter.
  2. For the purpose of carrying out this section, any reference to the state treasurer or any other state official in this part and part 4 of this chapter is deemed to mean the county or municipal official charged with the deposit of county or municipal funds, and shall not require the state treasurer nor any other state official to perform any deposit, collateral nor safekeeping services on behalf of the local government.

Acts 1994, ch. 752, § 9; 1996, ch. 621, § 1; T.C.A. § 9-4-111.

Code Commission Notes.

This section was renumbered from § 9-4-111 to § 9-4-109 by authority of the Code Commission in 2020.

Part 2
Accounts or Appropriations for Designated Purposes

9-4-201. Special federal funds.

The commissioner of finance and administration shall set up and maintain special accounts in the general fund with respect to moneys received for designated purposes from the federal government.

Acts 1985, ch. 118, § 21.

9-4-202. Separate account, collateral, and bond.

  1. Notwithstanding any law or regulation to the contrary, any reference to a separate account in state law is deemed to mean a separate account within the state's accounting system and shall not require establishment of a separate account in a state depository.
  2. Any reference to separate collateral shall be satisfied if sufficient total collateral is maintained in accordance with parts 1-4 of this chapter.
  3. Any reference to separate bond shall be satisfied through coverage of the state treasurer by the state's blanket surety bond pursuant to § 4-4-108.

Acts 1985, ch. 118, § 22.

9-4-203. Trust funds.

Unless otherwise provided by law, the funding board established by § 9-9-101 shall act as trustee for any funds which are directed to be held in trust by the state or any agency thereof. Unless otherwise provided by law, the state treasurer shall invest such trust funds under policy guidelines established by resolution of the funding board pursuant to § 9-4-602. Each trust fund shall be responsible for administrative expenses incurred in the investment of such funds.

Acts 1985, ch. 118, § 23.

9-4-204. Police pay supplement fund.

  1. There is created within the general fund a special agency account to be known as the “police pay supplement fund.”
  2. Notwithstanding any law to the contrary, all funds designated to fund the police pay supplement created pursuant to § 38-8-111 shall be deposited in the police pay supplement fund and disbursed in accordance with law solely for the payment of police pay supplements and such other uses as may be authorized by § 38-8-111.

Acts 1985, ch. 461, § 2; 2007, ch. 567, § 2; 2011, ch. 84, § 1.

NOTES TO DECISIONS

1. Appropriations.

The salary supplement of up to $600 provided in this section and § 38-8-111 is not a guaranteed expenditure of state funds, as it is specifically provided in this section, §§ 9-1-116 and 38-8-111 that no funds are to be expended except as specifically appropriated for such purposes. Carter v. McWherter, 859 S.W.2d 343, 1993 Tenn. App. LEXIS 249 (Tenn. Ct. App. 1993).

9-4-205. Victims of crime assistance fund.

  1. There is created a fund within the treasury of the state of Tennessee to be known as the “victims of crime assistance fund.”
  2. Moneys shall be deposited to the fund pursuant to § 67-4-606 and as may be otherwise provided by law and shall be invested pursuant to § 9-4-603. Moneys in the fund shall not revert to the general fund of the state, but shall remain available for appropriation to victims of crime assistance programs as determined by the general assembly.
  3. Funds in the victims of crime assistance fund and available federal funds, to the extent permitted by federal law and regulation, shall be used first to fund the victim-witness coordinator program established in § 8-7-206 and, to the extent that additional funds are available, to support other eligible victims of crime assistance programs. Such eligible victims of crime assistance programs shall include, but not be limited to, programs which provide appropriate counseling and support to victims, including each victim's family and programs which assist in the rehabilitation of victims of crime.
  4. The commissioner of human services shall receive grant applications for funds and shall approve such grants as are desirable to effectuate the purposes of the Victims of Crime Assistance Act of 1986, as contained in this section and §§ 8-7-206, 40-24-107(e) [repealed], and 67-4-606(a)(5), to the full extent of available funding in the victims of crime assistance fund established by this section. To assist in establishing criteria, priorities and the review of grant applications, the commissioner of human services shall establish an advisory committee composed of persons from each grand division who are knowledgeable in establishing and administering victims of crime assistance programs.

Acts 1986, ch. 880, § 1; 2002, ch. 723, § 4.

Compiler's Notes. Section 40-24-107(e), referred to in this section, was repealed by Acts 2003, ch. 235, § 3, effective June 2, 2003.

Cross-References. Criminal injuries compensation fund, § 40-24-107.

Grand divisions, title 4, ch. 1, part 2.

Rights of victims of crimes, Tenn. Const., art. I, § 35.

Victims bill of rights, title 40, ch. 38.

9-4-206. Impaired drivers trust fund.

  1. There is created in the state treasury a fund to be known as the “impaired drivers trust fund.” Moneys shall be deposited in the fund as provided in § 55-10-413(b), and shall be invested for the benefit of the fund pursuant to § 9-4-603. Moneys in the fund shall not revert to the general fund of the state, but shall remain available to be used by the division of vocational rehabilitation in the department of human services exclusively for the purpose specified in subsection (b).
    1. The purpose of the impaired drivers trust fund is to provide financial assistance unavailable through any other source to residents of the state who, as a result of a traumatic brain injury, require such assistance. Moneys in the fund shall, whenever possible, be utilized to match any available federal dollars, and such moneys from the trust fund and the federal match shall be utilized to provide services needed to assist persons suffering from traumatic brain injuries including, but not limited to, day care services, available physical therapy, and any other appropriate developmental programs.
    2. As used in this subsection (b), “traumatic brain injury”:
      1. Means an acquired injury to the brain caused by an external physical force resulting in total or partial disability or impairment;
      2. Includes open and closed head injuries that may result in seizures, and/or in mild, moderate, or severe impairments in one (1) or more areas including cognition, language, memory, attention, reasoning, abstract thinking, psychosocial behavior, physical functions, information processing, and speech; and
      3. Does not include brain injuries induced by birth trauma, but may include brain injuries caused by anoxia and other related causes, infectious disease not of a degenerative nature, brain tumor, toxic chemical or drug reactions.

Acts 1990, ch. 1081, § 2; 1993, ch. 470, § 1; 2013, ch. 154, § 30.

9-4-207. Transportation equity trust fund — Account.

  1. There is hereby created a segregated account within the state treasury to be known as the “transportation equity trust fund.” Moneys shall be deposited to the fund pursuant to § 67-6-103(b), and shall be invested for the benefit of the fund pursuant to § 9-4-603. Moneys in the fund shall not revert to any other fund at the end of a fiscal year but shall remain available for appropriation by the general assembly for use as provided below.
  2. Notwithstanding any law to the contrary, all funds directed to be deposited to the fund pursuant to § 67-6-103(b) shall be so deposited and shall be administered by the department of transportation and used only for the benefit and operation of railways, aeronautics, waterways programs and related activities.

Acts 1992, ch. 1015, § 1.

9-4-208. Appropriations to promote industries and facilities involving modern technologies — Audits.

  1. It is in the interest of this state to promote, encourage and foster the commercial and economic interests of the state by attraction of industries, educational and research facilities, and other facilities involving modern technologies. In furtherance of this end, the general assembly may appropriate funds to organizations that carry out these purposes.
  2. The comptroller of the treasury shall have the authority to audit any funds appropriated and/or expended pursuant to this section.

Acts 1984, ch. 970, § 1; T.C.A. § 9-6-117.

9-4-209. Civil rights attorneys' fees awards account.

  1. There is hereby created a fund or account, known as the “civil rights attorneys' fees awards account,” out of which federal court judgments awarding attorneys' fees in civil rights cases shall be paid where the state is liable for such judgments.
  2. The civil rights attorneys' fees awards account shall be a sum sufficient account, and there shall be appropriated each year an amount sufficient to pay all fee awards for which the state is liable.
  3. The civil rights attorneys' fees awards account shall be administered by the commissioner of finance and administration. Payments shall be made upon certification by the attorney general and reporter of the amount and liability of the state.

Acts 1984, ch. 985, §§ 1-3; T.C.A. § 9-6-118.

Law Reviews.

Attorneys' Fees — Tennessee Recognizes the “Third Party Exception” to the American Rule, 16 Mem. St. U.L. Rev. 399 (1986).

9-4-210. Increase in imprisonment terms — Appropriations for operating costs.

  1. For any law enacted after July 1, 1986, which results in a net increase in periods of imprisonment in state facilities, there shall be appropriated from recurring revenues the estimated operating cost of such law.
  2. “Operating costs,” as referred to in subsection (a), means all costs other than capital outlay costs.
  3. The amount of appropriations made under subsections (a) and (d) shall be equal to the amounts reflected in fiscal notes prepared by the staff of the fiscal review committee. For purposes of subsection (a), such cost shall be the operating cost, in current dollars, of the highest of the next ten (10) fiscal years commencing after December 4, 1985.
  4. Prior to submission of the budget for fiscal years beginning after 1986-1987, estimates of appropriations made under subsection (a) may be adjusted to determine the amount of appropriations of recurring revenues to be repeated for the ensuing fiscal year. If no adjustment is made, then the amount of appropriations previously made shall be repeated.
  5. Appropriations made under this section shall be placed in a reserve to be used only for the following purposes:
    1. Cancellation of bonds authorized but not yet sold; and
    2. Capital outlay for the department of correction.
  6. Any law enacted without the funding required by this section shall be null and void unless such funding is appropriated in the general appropriations act.

Acts 1985 (1st Ex. Sess.), ch. 1, §§ 1-6; T.C.A. § 9-6-119.

Attorney General Opinions. Effect of T.C.A. § 9-4-210 on general assembly elected after its passage, OAG 08-195, 2008 Tenn. AG LEXIS 240 (12/31/08).

9-4-211. Reserve for revenue fluctuations.

    1. There is hereby created on the books and records of the state treasury a reserve account in the general fund to be known as the “reserve for revenue fluctuations.” Amounts which may from time to time be in this reserve shall be available, as hereinafter provided, to meet unexpected shortfalls of revenue or to meet expenditure requirements in excess of budgeted appropriation levels.
    2. Each year, beginning with the budget for the 1998-1999 fiscal year, the governor shall include in the budget document and the general appropriations bill prepared pursuant to § 9-4-5106, an amount to be allocated to this reserve at least equal to ten percent (10%) of the estimated growth in state tax revenues to be allocated to the general fund and the education trust fund. This allocation shall be included in the budget presented each year until the amount in the reserve equals eight percent (8%) of the estimated state tax revenues to be allocated to the general fund and the education trust fund for that year. In subsequent budgets, the governor shall include an allocation to the reserve equal to the lesser of:
      1. An amount equal to ten percent (10%) of the estimated growth in state tax revenues to be allocated to the general fund and the education trust fund; or
      2. An amount sufficient to maintain the reserve at eight percent (8%) of the estimated state tax revenues to be allocated to the general fund and the education trust fund for that year.
  1. Amounts available in the revenue fluctuation reserve may be used by the commissioner of finance and administration to offset shortfalls in state tax revenues which may occur and for which funds are not otherwise available. It is hereby declared to be the legislative intent that to the extent practicable, all revenue shortfalls will be offset by reductions in expenditures before using amounts in the revenue fluctuation reserve.
  2. Upon determining that it is likely that amounts in the revenue fluctuation reserve will be required to be utilized to meet a shortfall of state tax revenue, the commissioner shall report this determination immediately to the chairs of the finance, ways and means committees of the senate and the house of representatives. Upon receipt of such notification, each chair shall, as soon as practicable, call a meeting of the finance, ways and means committees, at which time the commissioner shall report information concerning the need to utilize amounts in the revenue fluctuation reserve. At the discretion of the chairs, the committees may meet jointly to receive the commissioner's report.
  3. Subject to specific provisions of the general appropriations bill, an amount not to exceed the greater of one hundred million dollars ($100,000,000) or one-half (½) of the amount available in the reserve may be used by the commissioner to meet expenditure requirements in excess of budgeted appropriation levels. It is hereby declared to be the legislative intent that any such excess expenditure requirements be avoided by reducing such requirements insofar as possible. Prior to using any amounts in the reserve for this purpose, the commissioner shall notify the secretary of the state funding board and the chairs of the finance, ways and means committees of the senate and the house of representatives that the reserve funds are to be used for this purpose. Upon receipt of such notification, each chair shall, as soon as practicable, call a meeting of the finance, ways and means committees, at which time the commissioner shall report information concerning the need to utilize amounts in the revenue fluctuation reserve. At the discretion of the chairs, the committees may meet jointly to receive the commissioner's report.

Acts 1987, ch. 429, § 1; 1996, ch. 832, § 1; T.C.A. § 9-6-120; Acts 2003, ch. 355, § 12; 2013, ch. 175, § 1.

Code Commission Notes.

Former subdivision (a)(2)(C), concerning subdivision (a)(2) not applying in the fiscal year beginning on July 1, 2003, and ending on June 30, 2004, was deleted as obsolete by the code commission in 2012.

Compiler's Notes. Acts 2003, ch. 355, § 66 provided that no expenditure of public funds pursuant to the act shall be made in violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 U.S.C. § 2000d.

Attorney General Opinions. State tax revenue allocated to the Rainy Day Fund in the budget document should not be included in “appropriations from state tax revenues” when determining whether the Copeland Cap has been exceeded. When state officials calculate the rate of growth, they may include only appropriations from state tax revenues that are received in the fiscal year.  Appropriations from the reserve for revenue fluctuation, to the extent it includes state tax revenue from the earlier year, are not included in the Copeland Cap calculation. OAG 18-05, 2018 Tenn. AG LEXIS 5 (2/12/2018).

9-4-212. State appropriations to nongovernmental defender services in capital cases.

No state funds for appeals of capital cases shall be appropriated for or allocated to The Capital Case Resource Center of Tennessee, Inc., or any other nongovernmental corporation or organization, except that this prohibition shall not apply to an individual member of the bar appointed by a court to represent an indigent defendant.

Acts 1995, ch. 528, § 1; T.C.A. § 9-6-122.

9-4-213. State appropriations to child advocacy centers.

  1. Except as otherwise provided in subsection (b), on and after July 1, 1998, no state funds appropriated specifically for child advocacy centers shall be allocated or paid to any such center unless the center clearly demonstrates that it:
    1. Is a nonprofit corporation which has received a determination of exemption from the internal revenue service under 26 U.S.C. § 501(c)(3);
    2. Employs an executive director who is answerable to the board of directors and who is not the salaried employee of any governmental entity signing the memorandum of understanding and working protocol identified in subdivision (a)(3);
    3. Has a signed memorandum of understanding and working protocol executed among:
      1. The department of children's services;
      2. All county and municipal law enforcement agencies within the geographical area served by the center;
      3. All district attorneys general offices within the geographical area served by the center; and
      4. Any other governmental entity which participates in child abuse investigations or offers services to child abuse victims within the geographical area served by the center;
    4. Facilitates the use of a multidisciplinary team (representing prosecution, law enforcement, mental health, medical, child protective and social services professionals and the juvenile court) which jointly:
      1. Assess victims of child abuse and their families; and
      2. Determine the need for services;
    5. Provides a facility that is child-focused, neutral, comfortable, private, and safe, where the multidisciplinary team can meet to coordinate the efficient and appropriate disposition of child abuse cases through the civil and criminal justice systems;
    6. Provides for the provision of needed services, referral to such services, and case tracking;
    7. Has written policies and procedures consistent with the standards established by the National Children's Alliance; and
    8. Agrees to accurately collect and report key outcome data and information relative to each center's operations to the Tennessee chapter of children's advocacy centers, which is the statewide membership organization. The Tennessee chapter of children's advocacy centers shall compile and report such data annually to the chairs of the judiciary and health and welfare committees of the senate, the chair of the health committee of the house of representatives, and the chair of the committee of the house of representatives having oversight over children and families. The data and information collected pursuant to this subdivision (a)(8) shall include, at a minimum, the following:
      1. Number and demographic profiles of cases served by age, gender, race, type of abuse, and treatment thereof, including mental health and medical services rendered;
      2. Demographic profiles of perpetrators of abuse by age, gender, race, relationship to victim, and the outcome of any legal action taken against such perpetrators;
      3. Nature of services and support provided by or through the center; and
      4. Data and information relative to community investment in and community support of the center.
    1. On and after July 1, 1998, no state funds appropriated specifically for one-time, start-up assistance for new child advocacy centers shall be allocated or paid to any such center unless the center clearly demonstrates that it:
      1. Has a signed memorandum of understanding and working protocol executed among:
        1. The department of children's services;
        2. All county and municipal law enforcement agencies within the area served by the center;
        3. All district attorneys general offices within the area served by the center; and
        4. Any other governmental entity which participates in child abuse investigations or offers services to child abuse victims within the area served by the center; and
      2. Has formally filed an application for a determination of exemption from the internal revenue service under 26 U.S.C. § 501(c)(3).
    2. After receiving any such start-up assistance, no additional state funds appropriated specifically for child advocacy centers shall be allocated or paid to such center unless the center clearly demonstrates that it complies with the enumerated requirements set forth in subsection (a).
  2. In those geographical areas in which a child advocacy center meets the requirements of subsection (a) or (b), child advocacy center directors or their designees shall be members of the child protective multi-disciplinary teams under title 37, chapter 1, parts 4 and 6, for purposes of provision of services and functions established by this section or delegated pursuant to this section. In such event, child advocacy center directors or their designees may access and generate all necessary information, which shall retain its confidential status, consistent with § 37-1-612.
  3. Notwithstanding any other provision of this section to the contrary, the department of children's services, or any other department administering state funds specially appropriated for child advocacy centers, shall continue to allocate and/or pay such funds to existing child advocacy centers with active applications on file with the department, if such centers demonstrate satisfactory progress in efforts to achieve compliance with this section.

Acts 1998, ch. 988, § 1; T.C.A. § 9-6-123; Acts 1999, ch. 453, § 3; 2011, ch. 410, § 3(a); 2013, ch. 236, § 21; 2018, ch. 678, §§ 1-3; 2019, ch. 345, § 17.

Cross-References. Confidentiality of public records, § 10-7-504.

9-4-214. Victims of human trafficking fund.

  1. There is created a fund within the state treasury, to be known as the “victims of human trafficking fund.” The fund consists of grants, appropriations by the general assembly, and any federal funds, to the extent permitted by federal law and regulation. Moneys deposited in the fund must be invested for the benefit of the fund pursuant to § 9-4-603. Moneys in the fund must not revert to the general fund, but must remain available to be used by the department of finance and administration's office of criminal justice programs exclusively for the purpose specified in subsection (b). The commissioner of the department of finance and administration has the authority to promulgate rules in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, in order to ensure the funds are received and expended for the purposes consistent with subsection (b).
  2. The purpose of the victims of human trafficking fund is to provide specialized comprehensive treatment and support services to the victims of human trafficking offenses, as defined in § 39-13-314. Specialized comprehensive treatment and support services for victims of human trafficking include, but are not limited to, medical care, mental health and substance abuse care, nutritional counseling, safe housing, job training, transportation, and other basic human needs. The department of finance and administration's office of criminal justice programs shall distribute moneys in the fund in the form of grants to agencies that provide specialized comprehensive treatment and support services for the victims of human trafficking. It is the legislative intent that priority for funding be directed to the single point of contact agencies in this state recognized by the Tennessee bureau of investigation and the department of children's services.

Acts 2019, ch. 356, § 1.

Part 3
Receipt and Deposit

9-4-301. State funds to be deposited.

  1. It is the duty of every department, institution, office and agency of the state and every officer and employee of state government, including the state treasurer, collecting or receiving state funds, to deposit them immediately into the state treasury or to the account of the state treasurer in a bank designated as a state depository or to the appropriate departmental account if authorized by § 9-4-302. The state funding board has the authority to establish a cash management policy to govern the cash management and deposit practices of every department, institution, office and agency of state government. The board is authorized to review cash management practices and make recommendations to appropriate state officials regarding modifications to current practices as well as the cash processing equipment needs of various state agencies.
  2. Notwithstanding any other law to the contrary, and notwithstanding any written comment on the payment instrument or any other verbal or written comment, whenever any official deposits state funds in accordance with subsection (a), in any form or description, including, but not limited to, checks, drafts or warrants, that deposit shall in no manner relieve the person or organization submitting the amount of any liability which has or is subsequently determined to be owed to the state except to the extent that the amount deposited discharges the amount owed to the state. When an instrument is tendered by such person or organization and is deposited by the state for an amount which is less than the full amount owed, the remaining liability is enforceable in the same manner as the original amount owed to the state.
  3. Such deposit shall be made without any deductions on account of salaries, fees, costs, charges, expenses, refunds, claims, or demands of any description whatsoever.
  4. Unless otherwise provided by law, all county and other officials collecting moneys for the use and benefit of the state shall remit the same to the commissioner of revenue in accordance with procedures established by the commissioner of finance and administration and approved by the state treasurer and the comptroller of the treasury.

Acts 1985, ch. 118, § 24; 1986, ch. 923, § 2; 1988, ch. 602, § 7.

9-4-302. Departmental accounts.

  1. No department, officer or agency of state government, except the state treasurer, shall deposit state funds to the credit of such department, officer or agency in any financial institution except as provided in this section.
  2. Whenever the satisfactory conduct of the state's business clearly demands it, and not otherwise, the commissioner of finance and administration, with the approval of the governor and the state treasurer, may authorize establishment of an account in the name of a state department or agency in a state depository.
  3. Whenever state officials are required to hold funds in trust as a result of their official duties, such funds may be held in departmental accounts, unless otherwise directed by the commissioner of finance and administration, the governor and the state treasurer.
  4. Whenever a departmental account is established, unless otherwise provided, funds in the account shall be invested in accordance with § 9-4-602.
  5. A petty cash account may be allowed by the commissioner of finance and administration to each state department, institution or agency, which shall in the opinion of the commissioner require such account, and such account so established shall be reimbursed only upon statements and bills audited by the department of finance and administration. In the event that a petty cash account requires the establishment of a separate account in a financial institution, such account shall be established in accordance with subsection (b).
  6. The commissioner of finance and administration shall promptly notify the comptroller of the treasury of any accounts established pursuant to this section.

Acts 1985, ch. 118, § 25; 1986, ch. 923, § 3.

9-4-303. Educational institutions.

Sections 9-4-301 and 9-4-302 shall not apply to institutions and other entities governed by the board of trustees of the University of Tennessee or the state board of regents. Those institutions and other entities shall operate in accordance with procedures established by their respective governing boards which are consistent with the provisions regulating other state agencies. The institutions and other entities governed by the board of trustees of the University of Tennessee or the state board of regents may participate in the state pooled investment fund established pursuant to § 9-4-603.

Acts 1985, ch. 118, § 26; 1986, ch. 551, § 3.

9-4-304. Service charges on state accounts.

Whenever interest bearing accounts are established by the state treasurer or other state official pursuant to § 9-4-301, § 9-4-302 or § 9-4-307, reasonable service charges may be deducted from interest income pursuant to procedures established by the state treasurer and commissioner of finance and administration. There is hereby appropriated from interest income an amount sufficient to pay such charges.

Acts 1985, ch. 118, § 27.

9-4-305. Deposit certification.

  1. All deposits made pursuant to § 9-4-301, except as provided in subsection (b), shall be evidenced by a deposit certification in accordance with procedures established by the commissioner of finance and administration and approved by the state treasurer.
  2. Deposits of state funds that result from transfers within the banking system utilizing electronic transfer of funds and initiated by the state treasurer shall be evidenced by those documents and advices as are used within the banking system to execute such funds transfer, and shall be accepted by the commissioner of finance and administration in lieu of deposit certifications. Such documents and advices shall be delivered directly by the state treasurer to the commissioner of finance and administration. The use of the term “banking system” in this subsection (b) shall not be construed to restrict the definition of “state depository” to any meaning other than that set forth in § 9-4-107.

Acts 1985, ch. 118, § 28; 1986, ch. 923, § 4.

9-4-306. Monthly reports.

  1. Each state depository where public deposits are made by the state treasurer shall transmit to the state treasurer a monthly statement of moneys received, charges assessed, interest credited and amounts paid by it on account of the state.
  2. Each state depository where a departmental account is maintained shall transmit to the department or agency head a monthly statement of moneys received, charges assessed, interest credited and amounts paid by it.

Acts 1985, ch. 118, § 29.

9-4-307. State depositories.

The state treasurer is authorized to open accounts in state depositories and establish procedures to be followed by each depository for the handling of state deposits.

Acts 1985, ch. 118, § 30.

9-4-308. Transfer of funds through federal reserve banking system.

The state treasurer, in the exercise of the state treasurer's official duties, is hereby authorized to enter into agreements with any federal reserve bank as the state treasurer deems necessary or advisable, for the purpose of transferring funds through the facilities of the federal reserve banking system. Such agreements may contain terms and conditions determined by the state treasurer to be advisable, including, but not limited to, provisions relative to indemnification, hold harmless, and choice of law.

Acts 1977, ch. 269, § 1; T.C.A., § 9-613; Acts 1980, ch. 446, § 2; T.C.A. § 9-6-115; Acts 2020, ch. 755, § 1.

Amendments. The 2020 amendment rewrote the section which read: “The state treasurer, in the exercise of such state treasurer's official duties, is hereby authorized to enter into a contract with a federal reserve member bank or trust company located in Tennessee, including the trust company created by chapter 4, part 8 of this title, for the purpose of transferring public funds and funds of the Tennessee consolidated retirement system through the facilities of the federal reserve banking system.”

Effective Dates. Acts 2020, ch. 755, § 2. June 22, 2020.

Part 4
Security

9-4-401. Preference in insolvency.

In the liquidation of insolvent state depositories, the return of all state deposits, including funds held in trust by state officials, shall be preferred in payment.

Acts 1985, ch. 118, § 31.

9-4-402. Reports by commissioner of financial institutions.

  1. It is the duty of the commissioner of financial institutions to advise, on a timely basis, the state treasurer and the commissioner of finance and administration of the condition of each state bank and state chartered savings and loan association, including recommendations regarding its condition and safety as a state depository.
  2. It is the duty of the commissioner of financial institutions to make inquiry, on a timely basis, of the United States comptroller of the currency, respecting the condition and safety of each national bank as a state depository, and to advise the state treasurer and the commissioner of finance and administration of the results.
  3. It is the duty of the commissioner of financial institutions to make inquiry, on a timely basis, of the federal deposit insurance corporation, respecting the condition and safety of each federally chartered federal savings bank as a state depository, and to advise the state treasurer and the commissioner of finance and administration of the results.
  4. Any doubts as to the safety of any state depository shall be resolved by the state treasurer and the commissioner of finance and administration against the depository; in the event the two (2) disagree, the commissioner of financial institutions shall vote.
  5. If determined to be necessary under subsection (d), steps toward further security or realization shall be taken in accordance with the direction of the state treasurer and the commissioner of finance and administration. Such steps may include a requirement that additional collateral be pledged or all or a portion of the state deposit may be withdrawn without penalty or forfeiture of interest.

Acts 1985, ch. 118, § 32.

Attorney General Opinions. Designation of a branch of an out-of-state bank as a state depository, OAG 97-031, 1997 Tenn. AG LEXIS 30 (3/31/97).

9-4-403. Giving of security.

All state funds held in state depositories shall be secured by required collateral as provided in § 9-4-404, except for funds on deposit in the name of the state with a federal reserve bank.

Acts 1985, ch. 118, § 33; 2017, ch. 65, § 2.

9-4-404. Valuation of eligible collateral.

  1. The state treasurer shall evaluate the market value of required collateral monthly, and more frequently if market conditions require.
  2. Any state depository whose collateral has a market value less than one hundred five percent (105%) of the value of its state deposits, less so much of such amount as is protected by the federal deposit insurance corporation, shall provide additional collateral at the request of the state treasurer.
  3. If within two (2) working days such additional collateral is not provided, the state treasurer shall submit to the commissioners of financial institutions and of finance and administration a written summary of the results of the market valuation of collateral for that depository, together with a summary of the deposits secured by the collateral and take such action as a majority of these three (3) officials, based upon information received pursuant to § 9-4-402, deems appropriate. Such action may include withdrawal of part or all of the state deposit in that depository without penalty or forfeiture of interest.
  4. The state treasurer, county trustee or other public official charged with the deposit of public funds may contract for the evaluation of the market value of required collateral. Such contract may be with any person, including a financial institution or trustee custodian; provided, that such contract may not be with the depository pledging the collateral to be valued.

Acts 1985, ch. 118, § 34; 1992, ch. 592, § 9; 1994, ch. 752, § 12.

9-4-405. Interest on collateral.

Prior to default, the state treasurer, county trustee or other public official charged with the deposit of public funds and the trustee custodian, if the collateral is held by a trustee custodian, is authorized to remit to the state depository any and all interest, distributions or prepayments of any kind, upon eligible collateral pledged by such depository.

Acts 1985, ch. 118, § 35; 1994, ch. 752, § 13.

9-4-406. Default.

  1. Default shall be deemed to occur whenever any state depository fails to return any state deposit including earned interest when due in accordance with the terms of the deposit contract.
  2. In all other situations, as defined in § 9-4-102, where the safety or security of state deposits is in doubt, the state treasurer shall determine whether default has occurred, and the date on which it occurred, following consultation with the other members of the state funding board, the attorney general and reporter and the commissioner of financial institutions. Once the state treasurer has made such a determination, the other state officials with whom the state treasurer consulted shall be advised.
  3. In the event of default by any state depository, the state depository shall be responsible for any loss to the state.
  4. Such loss shall be satisfied out of collateral pledged by the state depository to whatever extent possible.
  5. Collateral pledged in accordance with this part may be sold by the state treasurer or, at the direction of the state treasurer, by the trustee custodian or any other person, including a federal agency, holding such collateral. In the alternative, the state treasurer may choose to hold such collateral. If the state treasurer holds such collateral, loss shall be reduced by the market value of the collateral and any accrued interest thereon as of the date of default.
  6. The attorney general and reporter is authorized to prosecute, in the name of the state, actions for recovery of any loss incurred by the state under this section.
  7. Excess proceeds, if any, realized from the sale of collateral will be returned to the defaulting state depository or its successor.

Acts 1985, ch. 118, § 36.

9-4-407. Safekeeping of securities.

  1. The state treasurer is expressly authorized to contract for the safekeeping and servicing of eligible collateral and/or securities owned by the Tennessee consolidated retirement system and/or other securities of which the state treasurer is the custodian.
  2. The state treasurer is expressly authorized, if the state treasurer deems it advisable, to insure securities against theft or other loss.
  3. All expenses incidental to the safekeeping and servicing of securities other than eligible collateral shall be paid by the state agency or the retirement system charged with the responsibility of the securities.
  4. The state of Tennessee shall be liable to the state depository for any loss of eligible collateral arising from embezzlement and/or theft while in the possession of the state treasurer or under the state treasurer's dominion or control under this section. The state of Tennessee is not liable, however, for loss to the state depository from market fluctuations in the value of collateral or loss to such depository while the collateral is in possession of any common carrier in route to or from the state depository to or from the state treasurer.

Acts 1985, ch. 118, § 37.

9-4-408. Trust receipts.

  1. In lieu of the actual deposit of eligible collateral under § 9-4-407, the state treasurer is authorized, at the state treasurer's option, to accept trust receipts.
  2. Trust receipts shall be issued by trustee custodians in a form acceptable to the state treasurer following the deposit of eligible collateral with the trustee custodian by a state depository.
  3. Eligible collateral deposited with a trustee custodian shall be subject in all respects to the claims and rights of the state to the same extent as though such collateral had been physically deposited with the state treasurer under § 9-4-407.
  4. Each trust receipt shall be nonnegotiable and irrevocable and shall continue in full force and effect until surrendered by the issuing trustee custodian with the release of the state treasurer endorsed thereon over the state treasurer's signature or as otherwise released pursuant to subsection (g) or (h).
  5. The state treasurer may present the trust receipt at any time to the issuing trustee custodian and upon delivery thereof shall be entitled to receive any and all collateral represented thereby from the trustee custodian, and such collateral shall thereafter be held by the state treasurer as if deposited with the state treasurer by the state depository as collateral, without further liability on the part of the trustee custodian.
  6. Following delivery of the collateral to the state treasurer, the state treasurer is permitted to register such collateral in the name of the state and to hold it on behalf of the state depository.
  7. The state treasurer is authorized to establish alternative procedures for the deposit and release of eligible collateral held on the state treasurer's behalf by trustee custodians pursuant to this chapter.
  8. A county or city official charged with the deposit of public funds is authorized to contract for alternative procedures for the deposit and release of eligible collateral held on the behalf of the county or city by a trustee custodian pursuant to this chapter. The alternative procedure established may be the procedure adopted by the state treasurer in subsection (g), or must provide for a release of collateral only upon the authorization of the county or city official or a person authorized by law to act on behalf of the official. The official's authorization shall be given in writing and delivered, sent or transmitted to the trustee in any reasonable manner, including, without limitation, by means of telephonic facsimile transmission.

Acts 1985, ch. 118, § 38; 1990, ch. 1043, § 2; 1994, ch. 752, §§ 10, 11.

Cross-References. Applicability to trustee custodians, § 9-4-505.

9-4-409. Trustee custodians.

  1. When any trustee custodian holds collateral for a state depository which is related to the custodian through shared ownership or control, such collateral shall be held in a restricted account at a federal reserve bank or branch thereof or at a federal home loan bank or branch thereof.
  2. The state treasurer is expressly authorized either in person or by agent to examine and check the collateral held by the trustee custodian and to require reasonable reports from the trustee custodian.
  3. Neither the state nor the state treasurer is liable to the state depository for eligible collateral deposited with or held by any trustee custodian, for any loss arising from any breach of the trust or agreement or from any other cause while such eligible collateral is in the possession or custody of such trustee custodian pursuant to a trust receipt.

Acts 1985, ch. 118, § 39; 1990, ch. 702, § 7.

Cross-References. Applicability to trustee custodians, § 9-4-505.

Part 5
Collateral Pool for Public Deposits Act of 1990

9-4-501. Short title.

This part shall be known and may be cited as the “Collateral Pool for Public Deposits Act of 1990.”

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

Cross-References. Pledge of assets by bank, § 45-2-611.

9-4-502. Part definitions.

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

  1. “Average daily balance” means the sum of the average daily demand deposits, the average daily time deposits, and the average daily savings deposits of public depositors held during the calendar month immediately preceding the current month;
  2. “Average daily demand deposit” means the total by account of all public funds held on a daily basis in demand deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month. “Demand deposit account” has the meaning as defined by the board of governors of the federal reserve system, Regulation D, 12 CFR 204, as amended;
    1. “Average daily savings deposit” means either:
      1. The total by account of all public funds held on a daily basis in savings deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month; or
      2. The sum of the amount of public funds in savings deposit accounts on the last day of the two (2) calendar months immediately preceding the current month divided by two (2);
    2. “Savings deposit account” has the meaning as defined by the board of governors of the federal reserve system, Regulation D, 12 CFR 204, as amended;
    1. “Average daily time deposit” means either:
      1. The total by account of all public funds held on a daily basis in time deposit accounts during the calendar month immediately preceding the current month divided by the number of calendar days in the month; or
      2. The higher of:
  1. The actual amount of public funds in time deposit accounts on the last day of the calendar month immediately preceding the current month; or
  2. The sum of the amount of public funds in time deposit accounts on the last day of the two (2) calendar months immediately preceding the current month divided by two (2);

    which has been appropriately designated to hold public deposits by a public depositor;

“Time deposit account” has the meaning as defined by the board of governors of the federal reserve system, Regulation D, 12 CFR 204, as amended;

“Average monthly balance” means the average monthly balance of public deposits held by the depository during any twelve (12) calendar months. The average monthly balance of the previous twelve (12) calendar months must be determined by adding the average daily balance for the calendar month immediately preceding the current month and the average daily balances for the eleven (11) months preceding that month and dividing the total by twelve (12). Notwithstanding this subdivision (5) or any other law to the contrary, the average monthly balance shall not exceed one hundred ten percent (110%) of the average daily balance as such term is defined in subdivision (1);

“Board” means the collateral pool board created pursuant to § 9-4-506;

“Collateral-pledging level,” for a qualified public depository, means that level of collateral determined to be required to be pledged by the collateral pool board;

“Collateral pool” means an arrangement whereby the repayment of public deposits deposited with any qualified public depository is secured through the sum total of eligible collateral pledged by all qualified public depositories, and contingent liability agreements as provided by the collateral pool board;

“Default” may include, but is not limited to:

The failure of any qualified public depository to return any public deposit, including earned interest in accordance with the terms of the deposit contract;

The failure of any qualified public depository to pay any properly payable check, draft or warrant drawn by the public depositor;

The failure of any qualified public depository to honor any valid request for electronic transfer of funds;

The failure of any qualified public depository to account for any check, draft, warrant, order, deposit certificate or money entrusted to it;

The issuance of any order of any court or the taking of any formal action by any supervisory authority, which has the effect of restraining a qualified public depository from making payments of deposit liabilities;

The appointment of a conservator or receiver for a qualified public depository;

Failure to provide the required collateral as established by the board; or

Any other action which the state treasurer determines to place public deposits in jeopardy;

“Deposit insurance” means the insurance provided by the federal deposit insurance corporation;

“Depository pledge agreement” means the contract between the state treasurer, a qualified public depository, and a trustee custodian providing for the pledge and deposit of collateral, and other provisions determined by the state treasurer;

“Eligible collateral” has the meaning set forth in § 9-4-103;

“Loss” includes, but is not limited to:

The principal amount of the public deposit;

All accrued interest through the date of default;

Additional interest at the rate the public deposit was earning on the total of subdivisions (13)(A) and (B) through the day of payment by a liquidator or other third party or through the date of sale of eligible collateral by the state treasurer or the state treasurer's agent; and

Attorney's fees incurred in recovering public deposits;

“Public deposit” means funds in which the entire beneficial interest is owned by a public depositor or funds held in the name of a public official of a public depositor charged with the duty to receive or administer funds and acting in such official's official capacity;

“Public deposit security trust fund” or the “fund” means the fund created pursuant to § 9-4-514;

“Public depositor” means the state of Tennessee, or any of its agencies, or any Tennessee county, Tennessee incorporated municipality and their political subdivisions, or any utility district organized under the laws of the state or any interstate compact to which the state is a party;

(A)  “Public depository” means:

Any savings and loan association, or savings bank (collectively referred to as savings institutions), or any bank chartered by the state of Tennessee;

Any national bank or federal savings institution that has its main office located in this state; or

Any national or state bank, or any federal or state savings institution that has its main office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits; and

Notwithstanding any other law to the contrary, an automated teller machine or such other similar type receptacle or device shall not be considered a branch for purposes of this subdivision (17);

A bank or savings institution located outside this state desiring to be designated as a qualified public depository must agree that this chapter shall govern in determining its rights and responsibilities as a qualified public depository, and must agree to be subject to the jurisdiction of the courts of this state, or of the courts of the United States which are located within this state, for the purpose of any litigation arising out of this chapter;

“Qualified public depository” means any public depository that meets all of the requirements of this part and that has been authorized by the board to secure public deposits through the collateral pool;

“Required collateral” of a qualified public depository means eligible collateral, excluding accrued interest, having a market value equal to or in excess of the greater of the average daily balance or average monthly balance of public deposits multiplied by the qualified public depository's collateral-pledging level as determined by the board; and

“Trustee custodian” means a financial institution designated to hold eligible collateral on behalf of the state treasurer and a qualified public depository pursuant to § 9-4-108.

Acts 1990, ch. 1043, § 1; 1992, ch. 592, §§ 10-12; 1996, ch. 621, §§ 2-6; 1997, ch. 217, § 16; 2004, ch. 454, § 1.

Code Commission Notes.

The definition of “task force”, formerly set out in this section, was deleted as obsolete by the code commission in 2012.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-503. Application for participation in collateral pool.

  1. Any public depository which holds public deposits may apply to the board for permission to participate in the collateral pool to secure all public deposits at such public depository.
  2. An application submitted pursuant to this part is subject to the approval of the board. The board shall set the number of votes required for the approval of such applications.
  3. The board may require such information regarding the financial condition of the public depository as the board deems necessary for determining the suitability of that depository to participate in the collateral pool. Prior to participation in the collateral pool, a qualified public depository shall execute a depository pledge agreement.

Acts 1990, ch. 1043, § 1; 1996, ch. 621, §§ 7, 8.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-504. Collateral for public deposits.

  1. Every qualified public depository shall deposit with the state treasurer eligible collateral equal to or in excess of the required collateral of the depository. Each qualified public depository shall calculate monthly the amount of its required collateral based upon notice of its collateral-pledging level from the board.
  2. A qualified public depository shall maintain required collateral to secure public deposits. A qualified public depository which accepts any public deposit that would increase its required collateral by twenty-five percent (25%) shall deposit additional eligible collateral to secure such increase within two (2) business days of the deposit.
  3. Upon approval to participate in the collateral pool, a qualified public depository may secure public deposits through the collateral pool.
  4. A qualified public depository shall notify its public depositors that all their public deposits are secured through the collateral pool as provided in this part. The notification shall be made at the time the public depository is admitted to the collateral pool or when an account is established by a public depositor with the qualified public depository. A qualified public depository must notify its public depositors of any change in the manner collateral is held. Notice to public depositors under this part shall constitute the mailing of the appropriate information to the individual indicated on the account authorization.
  5. A qualified public depository shall carry in its accounting records a general ledger or other appropriate account of all public deposits to be secured through the collateral pool and the total value of eligible collateral pledged to secure such deposits.
    1. A qualified public depository may accept deposits, investments or deposits for placement as provided in § 9-1-118, and may act as custodian of other evidences of the deposits by the public entity.
    2. Deposits placed in federally insured institutions, in amounts that are fully insured and that are not liabilities of the qualified public depository, are not included in the term average daily balance, as provided in § 9-4-502. However, any funds accepted for deposit or placement that are not placed in federally insured institutions shall be included in the term average daily balance and collateralized as provided in this section.

Acts 1990, ch. 1043, § 1; 1996, ch. 621, § 9; 2005, ch. 432, § 2; 2012, ch. 544, § 5.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-505. Trustee custodians.

  1. Upon being designated as a qualified public depository, the qualified public depository shall select one (1) or more trustee custodians for the deposit of eligible collateral by the qualified public depository.
  2. Designation of trustee custodians shall be made in accordance with § 9-4-108.
  3. Sections 9-4-408 and 9-4-409 shall apply to trustee custodians designated under this part.
  4. Trustee custodians shall submit a report quarterly to the state treasurer providing a description of eligible collateral securities deposited by the qualified public depository and the current par value of eligible collateral, as well as other reasonable reports requested by the state treasurer.
  5. Neither the state, the state treasurer, nor the collateral pool shall be liable to either the qualified public depository or the public depositors for eligible collateral deposited with or held by any trustee custodian for any loss arising from any breach of the trust or from any other cause whatsoever.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-506. Creation of collateral pool board — Members.

    1. There is hereby created a collateral pool board composed of seven (7) members as follows:
      1. The commissioner of financial institutions;
      2. The state treasurer;
      3. One (1) representative of banks and savings institutions with assets of five hundred million dollars ($500,000,000) or more appointed by the state treasurer, who may be selected from lists of qualified persons submitted by interested banking groups including, but not limited to, the Tennessee Bankers Association board of directors;
      4. One (1) representative of banks and savings institutions with assets of less than five hundred million dollars ($500,000,000) appointed by the state treasurer, who may be selected from lists of qualified persons submitted by interested banking groups including, but not limited to, the Tennessee Bankers Association board of directors;
      5. Two (2) representatives of banks and savings institutions at-large appointed by the state treasurer, who may be selected from lists of qualified persons submitted by interested banking groups, including, but not limited to, the Tennessee Bankers Association board of directors; and
      6. One (1) representative of local governments who shall have at least two (2) years experience in the field of finance. The local government representative shall be appointed by the state treasurer for a two-year term. The state treasurer may select the local government representative from lists of qualified persons submitted by interested county and municipal organizations including, but not limited to, the Tennessee County Services Association, the Tennessee Municipal League and the Tennessee County Officials Association.
    2. The state treasurer shall consult with interested groups including, but not limited to, the organizations listed in subdivision (a)(1) to determine qualified persons to fill positions on the board.
    1. The members shall be appointed for two-year terms. Any member is eligible for reappointment and shall serve until a successor qualifies.
    2. The board shall annually elect from its membership a chair and a vice chair and shall designate a secretary who need not be a member of the board. The secretary shall keep a record of the proceedings of the board and is the custodian of all printed materials filed with or by the board.
    3. Notwithstanding the existence of vacancies on the board, a majority of the members constitutes a quorum and the board may not take official action in the absence of a quorum. The board shall convene as needed.
  1. If a vacancy occurs in the position of any appointed member, a new member shall be appointed in the same manner as such member's predecessor for the remainder of the unexpired term.
  2. A member of the board shall receive no compensation for service on the board, but a member of the board shall be reimbursed for the member's travel expenses in accordance with the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general and reporter.
  3. The secretary of the board shall notify the executive directors of the Tennessee Municipal League, the Tennessee County Officials Association and the Tennessee County Services Association of each meeting of the board. Any documents given in advance of the meeting to board members shall also be supplied to such directors prior to the meeting. The respective directors of the Tennessee Municipal League, the Tennessee County Officials Association and the Tennessee County Services Association may designate another individual to receive the notice and materials required in this subsection (e) in lieu of such director. Failure to provide the notice or materials to such directors or designees shall not invalidate any action taken by the board at the meeting.
  4. The board is attached for administrative purposes to the department of the treasury.
  5. In making appointments to the collateral pool board, the state treasurer shall strive to ensure that at least one (1) person serving on the board is sixty (60) years of age or older or is female and that at least one (1) person serving on the board is a member of a racial minority.

Acts 1990, ch. 1043, § 1; 1992, ch. 592, §§ 13, 14; 1996, ch. 621, § 10; 2001, ch. 33, §§ 4, 5, 7; 2009, ch. 558, § 3; 2013, ch. 54, § 3.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

The collateral pool board, created by this section, terminates June 30, 2026. See §§ 4-29-112, 4-29-247.

9-4-507. [Reserved.]

The collateral pool board has the following powers, together with all powers incidental thereto or necessary for the performance of those hereinafter stated:

  1. The board may establish criteria, as may be necessary, to:
    1. Approve entry into the collateral pool by a public depository;
    2. Order discontinuance of participation in the program by a qualified public depository;
    3. Restrict the total amount of public deposits held by a public depository that is subject to the authority of the board;
    4. Establish collateral-pledging levels based on qualitative and quantitative standards as well as the number of participating qualified public depositories and the financial performance of such participants; and
    5. Suspend or disqualify, or disqualify after suspension, any qualified public depository that has violated this part or rules adopted under this part. Any public depository that is suspended or disqualified pursuant to this subdivision (1) is subject to § 9-4-517 governing withdrawal from the public deposit security program and return of pledged collateral;
  2. If the board has reason to believe that any qualified public depository or any other financial institution subject to the authority of the board is or has been violating this part or rules adopted under this part, it may issue to the qualified public depository or other financial institution an order to cease and desist from the violation or to correct the condition giving rise to or resulting from the violation. The board may suspend or disqualify any qualified public depository for violation of any order issued pursuant to this subdivision (2);
  3. The board may establish a minimum amount of required collateral to provide for the contingent liability;
  4. The board may establish a process by which to determine, to the greatest extent practicable, that a qualified public depository is securing all its public deposits through the collateral pool;
  5. The board may review administration of the pool by the state treasurer and prepare an annual report on the condition of the pool;
  6. The board may, at its discretion, require every qualified public depository to pay on a periodic basis an operating fee as may be set by the board. In determining whether to set a fee and the amount to be paid, the board may consider any matter which, in its discretion, it deems relevant including, but not limited to, the number of participating qualified public depositories and the financial performance of such participants;
  7. The board, upon six (6) affirmative votes, may promulgate reasonable substantive and procedural rules as are necessary to carry out the purpose and intent of this part. Such rules shall be adopted pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;
  8. The board may delegate any of its powers conferred in this section to the state treasurer; and
  9. The board may purchase insurance from insurers licensed to do business in this state for the purpose of providing coverage against loss caused by the default or insolvency of qualified public depositories. Any loss may be satisfied from such insurance prior to the assessment against qualified public depositories as provided in § 9-4-512(3).

Acts 1990, ch. 1043, § 1; 1992, ch. 592, §§ 17-20, 24; 1996, ch. 621, § 11; 1997, ch. 217, §§ 4, 7.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-509. Hearing and judicial review — Administrative procedure.

The Uniform Administrative Procedures Act, compiled in title 4, chapter 5, governs all matters and procedures respecting the hearing and judicial review of any contested case, as defined therein, arising under this part.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-510. Guarantee to public depositors against loss.

A qualified public depository shall guarantee public depositors against loss caused by the default or insolvency of other qualified public depositories as provided in § 9-4-512.

Acts 1990, ch. 1043, § 1; 1996, ch. 621, § 12.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-511. State treasurer — Powers.

In fulfilling the requirements of this part, the state treasurer has the power to:

  1. Require such collateral, or increase the collateral-pledging level, of any qualified public depository as may be necessary to administer this part and to protect the integrity of the collateral pool as directed by the board;
  2. Decline to accept, or reduce the reported value of, collateral as circumstances may require in order to ensure the pledging of sufficient marketable collateral to meet the purposes of this part;
  3. Verify the reports of any qualified public depository relating to public deposits it holds when necessary to protect the integrity of the collateral pool;
  4. Sell pledged securities, or move pledged securities to an account established in the state treasurer's name, for the purpose of paying losses to public depositors not covered by deposit insurance or to perfect the state treasurer's interest in the pledged securities;
  5. Transfer funds directly from the trustee custodian to public depositors or the receiver in order to facilitate prompt payment of claims;
  6. Provide data as may be necessary to assist the board in developing standards and criteria for the program;
  7. Review, implement, monitor, evaluate and modify, as needed, all or any part of the standards and policies recommended by the board;
  8. Confirm public deposits, to the extent possible under current law, when needed;
  9. Monitor and confirm, as often as deemed necessary by the state treasurer, the pledged collateral held by trustee custodians;
  10. Audit or verify the reports required under this part or under rules adopted under this part;
  11. Maintain perpetual inventory of pledged collateral and perform monthly market valuations and quality ratings;
  12. Perform financial analysis of all qualified public depositories; and
  13. Perfect interest in pledged collateral by having pledged securities moved into an account established in the state treasurer's name. This action shall be taken at the discretion of the state treasurer.

Acts 1990, ch. 1043, § 1; 1992, ch. 592, §§ 21, 22, 25; 1996, ch. 621, § 13.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-512. Payment of losses — Procedure.

When the state treasurer determines that a default or insolvency has occurred, the state treasurer shall provide notice as required in § 9-4-513 and implement the following procedures:

  1. The state treasurer, in cooperation with the commissioner of financial institutions, the appropriate federal regulator, or the conservator or receiver of the qualified public depository in default, shall ascertain the amount of funds of each public depositor on deposit at such depository, the amount of deposit insurance applicable to such deposits and the amount of such deposits which will not be covered through the sale of securities pledged by the defaulting depository;
  2. Upon ascertaining the amount of such deposits which will not be covered through any applicable deposit insurance or through the sale of securities pledged by the defaulting depository, the state treasurer shall as promptly as possible provide coverage of the remaining loss by assessment against the other qualified public depositories. Such assessment shall be determined by multiplying the total amount of the loss to all public depositors by a percentage which represents the average share of public fund deposits held by that depository during the previous twelve (12) months divided by the average total public deposits held by all depositories during the same twelve-month period, excluding the public deposits of the defaulting depository;
  3. Each qualified public depository shall pay its assessment to the state treasurer within five (5) business days after it receives notice of the assessment. If a depository fails to pay its assessment when due, the state treasurer shall satisfy the assessment by selling securities pledged by that depository; and
  4. Public depositors receiving payment under this section shall assign to the state treasurer any interest they may have in funds that may subsequently be made available to the qualified public depository in default. If the qualified public depository in default or its receiver provides the funds to the state treasurer, the state treasurer shall distribute the funds, plus all accrued interest which has accumulated from the investment of the funds, if any, to the depositories which paid assessments on the same pro rata basis as the assessments were paid.

Acts 1990, ch. 1043, § 1; 1996, ch. 621, § 14; 1997, ch. 217, § 17.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-513. Notice to claimants.

  1. Within thirty (30) days after the date of default or insolvency of a qualified public depository, the state treasurer shall publish or cause to be published notice of such default or insolvency once a week for two (2) consecutive weeks in a newspaper of general circulation in each grand division and in the Tennessee Administrative Register. The notice shall direct all public depositors who sustained a loss occasioned by the default or insolvency that was not satisfied pursuant to § 9-4-512 to file their claims with the state treasurer within ninety (90) days after the date of the first publication of the notice.
  2. No claim made pursuant to subsection (a) shall be binding on the pool or the qualified public depositories unless presented within ninety (90) days after the date of the first publication of the notice. Further, no such claim shall be binding on the pool or the qualified public depositories if the loss was occasioned by the public depositor's failure to comply with the requirements of § 9-4-519(a)(1). This subsection (b) does not affect any proceeding to:
    1. Enforce any real property mortgage, chattel mortgage, security interest, or other lien on property of a qualified public depository that is in default or insolvency; or
    2. Establish liability of a qualified public depository that is in default or insolvency to the limits of any federal or other casualty insurance protection.

Acts 1990, ch. 1043, § 1; 1997, ch. 217, § 18.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

Cross-References. Grand divisions, title 4, ch. 1, part 2.

9-4-514. Public deposit security trust fund.

  1. In order to facilitate the administration of this part, there is created the “public deposit security trust fund,” hereafter in this section designated the “fund.” The fund shall be composed of securities pledged as collateral from any defaulting institution, proceeds from the sale of such securities, or from any assessment.
  2. The state treasurer is authorized to pay any loss to public depositors from the fund, and there are hereby appropriated from the fund such sums as may be necessary from time to time to pay the losses.
  3. Any money in the fund estimated not to be needed for immediate cash requirements shall be invested pursuant to § 9-4-603.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-515. Effect of merger or acquisition — Change of name or address.

  1. In the event a qualified public depository not in default is merged into, acquired by, or consolidated with a bank or savings institution that is not a qualified public depository, the resulting institution shall become a qualified public depository, and the contingent liability of the former institution shall be a liability of the resulting institution. Within thirty (30) days after the effective date of the merger, acquisition or consolidation, the resulting institution shall execute in its own name and deliver to the state treasurer the contingent liability agreement required by § 9-4-510. If the resulting institution chooses not to remain a qualified public depository, it shall comply with the procedures for withdrawal from the collateral pool as provided in § 9-4-516.
  2. The qualified public depository shall notify the state treasurer of any acquisition or merger within three (3) days after the final approval of the acquisition or merger by its appropriate regulator.
  3. Collateral subject to a depository pledge agreement may not be released by the state treasurer or the custodian until the assumed liability is evidenced by the deposit of collateral pursuant to the depository pledge agreement of the successor entity. The reporting requirement and pledge of collateral will remain in force until the state treasurer determines that the liability no longer exists. The surviving or new qualified public depository shall be responsible and liable for all of the liabilities and obligations of each qualified public depository merged with or acquired by it.
  4. Each qualified public depository shall report any change of name and address to the state treasurer on a form provided by the state treasurer, regardless of whether the name change is a result of an acquisition or merger. Notification must be made within three (3) days of such change.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-516. Voluntary withdrawal from collateral pool.

  1. A qualified public depository may withdraw from the collateral pool by giving written notice to the state treasurer and to the public depositors having public deposits at the qualified public depository.
  2. Notice of withdrawal shall be mailed or delivered in sufficient time to be received by the state treasurer and by the public depositors at least one hundred eighty (180) days before the effective date of withdrawal. The state treasurer shall timely publish the withdrawal notice in the Tennessee Administrative Register which shall constitute notice to all depositors. On the effective date of withdrawal, the state treasurer is authorized to transfer eligible collateral as jointly directed by the public depository and public depositors to ensure that public depositors are adequately collateralized individually.
  3. The contingent liability for any loss prior to the effective date of withdrawal of the depository withdrawing from the collateral pool shall continue after the effective date of the withdrawal. The board may establish minimum collateral and reporting requirements sufficient to meet the needs to satisfy any potential contingent liability of a withdrawing qualified public depository.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-517. Mandatory withdrawal from collateral pool.

  1. A qualified public depository is required to withdraw upon a majority vote of the board. The board may vote to require a qualified public depository to withdraw upon a default by the qualified public depository, or upon the failure of the qualified public depository to meet the eligibility or pledging criteria established by the board. The board shall establish an effective date for such withdrawal.
  2. The state treasurer shall notify the qualified public depository of the effective date of the withdrawal not less than thirty (30) days prior to such effective date. Within ten (10) business days after receipt of such notification, the qualified public depository must notify the public depositors having public deposits at the qualified public depository of the effective date of the withdrawal. On the effective date of withdrawal, the state treasurer is authorized to transfer eligible collateral as jointly directed by the public depository and public depositors to ensure that public depositors are adequately collateralized individually.
  3. The contingent liability for any loss prior to the effective date of withdrawal of the depository withdrawing from the collateral pool shall continue after the effective date of the withdrawal. The board may establish minimum collateral and reporting requirements sufficient to meet the needs to satisfy any potential contingent liability of a withdrawing qualified public depository.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-518. Reports of qualified public depositories.

  1. Within fifteen (15) days after the end of each calendar month, or when requested by the state treasurer, each qualified public depository shall submit to the state treasurer a written report, under oath, indicating the average daily balance of all secured public deposits held by it during the month, the average monthly balance of all public deposits held for the previous twelve (12) calendar months, and any other information that the state treasurer determines necessary to administer this part.
  2. In addition to the report required in subsection (a), each qualified public depository shall submit to the state treasurer:
    1. If requested by the board or the state treasurer, a copy of the quarterly report of condition required by the Federal Deposit Insurance Act (12 U.S.C. § 1817 et seq.), if such depository is a bank;
    2. A schedule of financial information as determined by the board taken from the quarterly report on condition required by the Federal Deposit Insurance Act, if such depository is a bank;
    3. If requested by the board or the state treasurer, a copy of the monthly and quarterly reports required to be filed with the office of thrift supervision, or such other federal regulator by whatever name called, if such depository is a savings institution; and
    4. A schedule of financial information as determined by the board taken from the monthly and quarterly reports required to be filed with the office of thrift supervision, or such other federal regulator by whatever name called, if such depository is a savings institution.
  3. In addition to the requirements of subsection (a), the following forms shall be made under oath:
    1. The contingent liability agreement;
    2. The depository pledge agreement; and
    3. The public depository change of name, address and charter of institution.
  4. Any information contained in a report by a qualified public depository required under this part or any rule adopted under this part, which is confidential by any law of the United States or of this state, shall be considered confidential and not subject to dissemination to anyone other than the state treasurer and the board under this part, and the comptroller of the treasury, or the comptroller of the treasury's designated representatives, for purposes of audit. The confidentiality of such information shall be maintained by the comptroller of the treasury in the same manner as the comptroller maintains the confidentiality of working papers which are not subject to § 10-7-503. It is the responsibility of each qualified public depository from which information is required to inform the state treasurer of information that is confidential, and the state treasurer does not have a duty to inquire into whether information is confidential.
  5. Section 10-7-503 shall not apply to information deemed confidential as provided in subsection (d). All meetings of the board wherein such information is discussed shall be exempt from title 8, chapter 44.

Acts 1990, ch. 1043, § 1; 1991, ch. 438, § 1; 1997, ch. 217, § 5; 2003, ch. 38, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

Cross-References. Confidentiality of public records, § 10-7-504.

9-4-519. Requirements for public depositors.

  1. Public depositors shall comply with the following requirements:
    1. A public depositor shall ensure that the name of the public depositor is on the account or certificate provided to the public depositor by the qualified public depository in a manner sufficient to disclose the identity of the public depositor; and
    2. A public depositor who sustained a loss occasioned by a default or insolvency of a qualified public depository that was not satisfied pursuant to § 9-4-512 shall notify the state treasurer of that fact within three (3) business days after receiving actual notice of the default from publications made pursuant to § 9-4-513(a).
  2. If a public depositor does not comply with subdivision (a)(1), the pool shall not be liable for the loss incurred to that particular account created by the public depositor. The waiver of immunity provided in § 9-4-520 shall be ineffective as to that public depositor for such account.

Acts 1990, ch. 1043, § 1; 1991, ch. 438, § 2; 1997, ch. 217, § 6.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-520. State and public depositors not liable — Exception.

Under no circumstance is the state, or any state agency, or public depositor, liable for all or any portion of any loss resulting from the default or insolvency of a qualified public depository except as provided in § 9-4-519(b).

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-521. [Reserved.]

Any fees collected under this part shall be paid into the treasury of the state, and the same are hereby appropriated exclusively to the department of the treasury to be used in carrying out this part.

Acts 1990, ch. 1043, § 1.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

9-4-523. State treasurer empowered to act as successor pledgee.

  1. At such time as a public depository joins the collateral pool, the state treasurer is empowered to assume responsibility as successor pledgee of any and all collateral pledged on or after July 1, 1992, to individual public depositors by that public depository. The state treasurer is further empowered to assume responsibility as successor pledgee of any and all collateral pledged prior to July 1, 1992, to individual public depositors by such public depository, upon the written consent of the public depositors.
  2. Upon assuming responsibility as successor pledgee as provided in subsection (a), the state treasurer is empowered to sign such documents on behalf of individual public depositors as may be required by a trustee custodian.

Acts 1990, ch. 1043, § 1; 1992, ch. 592, § 23.

Compiler's Notes. Former part 5, §§ 9-4-5019-4-511 (Acts 1980, ch. 449, §§ 1-10, 12; T.C.A., §§ 9-5-4019-5-410, 9-5-412; Acts 1985, ch. 118, § 40; 1986, ch. 551, §§ 4-7; 1988, ch. 602, §§ 2-6), concerning an alternate method of securing the deposit of state funds, was repealed effective January 1, 1991 by Acts 1990, ch. 1043, § 1, which also enacted a new title 9, ch. 4, part 5 concerning a collateral pool for public deposits, effective January 1, 1991.

Part 6
Disbursement and Investment of State Funds

9-4-601. Disbursements, investments and transfers of funds, generally.

    1. No money shall be drawn from the state treasury except in accordance with appropriations duly authorized by law. Every disbursement from the state treasury, except as hereinafter provided, shall be upon the authorization of the commissioner of finance and administration, which authorization shall be in the form of a warrant, drawn in favor of the payee, and the warrant shall, upon being signed by the commissioner and delivered to the payee, become a draft on the treasury of the state. Electronic transfer of funds, in lieu of a warrant, may be utilized when such use is deemed by the commissioner and the state treasurer to be in the best interest of the state. When this method of disbursement is utilized, the commissioner shall authorize such transfer in writing, and the state treasurer shall accept such written advice in lieu of a warrant.
    2. Notwithstanding title 66, chapter 29, warrants, drafts, and checks drawn on the state treasury that have not been redeemed within twelve (12) months of issue date shall be cancelled and written off the state's books, with the funds reverting to the fund of issue. Subsequent claims by the payee of said instruments shall be honored upon receipt of documentation to substantiate the claim. The commissioner of finance and administration and the state treasurer shall ensure the state's compliance with the unclaimed property law.
  1. The commissioner may, with the approval of the state treasurer and the comptroller of the treasury, authorize warrants as set forth in subsection (a) to be issued on the commissioner's behalf by another state official or by a third party pursuant to contract with the state. In exercising discretion pursuant to this subsection (b), the commissioner shall set out in writing such commissioner's authorization and the limitations and restrictions upon that authorization.
  2. All state money in any depository of the state government shall stand on the books of the depository to the credit of the state treasurer. Transfer of funds between depositories, in order to facilitate a concentration of funds for immediate investment, or payment of state obligations pursuant to subsection (a), shall be made by electronic transfer of funds or in accordance with such other procedures authorized by the state treasurer and approved by the commissioner and the comptroller of the treasury.
  3. The state treasurer is specifically authorized to purchase investments which are otherwise authorized by law or by authority delegated to the state treasurer pursuant to § 9-4-602 by electronic transfer of funds or in accordance with such other procedures authorized by the state treasurer and approved by the commissioner and the comptroller of the treasury.
  4. Whenever electronic transfer of funds is used for the purpose authorized by this section, such electronic funds transfer shall be made through the federal reserve system upon instructions of the state treasurer confirmed by written documentation, or by magnetic tape, disc or other medium designed for electronic communication. Copies of such written documentation or electronic communication shall be furnished immediately to the commissioner and shall contain a full description of the transaction in a form acceptable to the commissioner.

Acts 1985, ch. 118, § 41; 1986, ch. 551, § 1; 2013, ch. 454, § 30.

Cross-References. Restrictions on expending public funds for advertising or public relations, § 9-4-609.

Attorney General Opinions. As a general matter, absent the enactment of an appropriations bill for a fiscal year, there is no authority in most circumstances for the state to spend money, whether generated by the state's own taxing powers or received from other sources such as the federal government, OAG 00-083, 2000 Tenn. AG LEXIS 86 (5/4/00).

A state agency may not make an expenditure of funds from the state treasury which has not been appropriated by the legislature, and a statutory grant of rule-making authority which is not itself an appropriation may not be used to circumvent this constitutional and statutory restriction, OAG 04-142, 2004 Tenn. AG LEXIS 158 (9/01/04).

9-4-602. Investment of state funds.

      1. It is the policy of the state of Tennessee that all funds in the state treasury shall be invested by the state treasurer to the extent practicable.
        1. Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following:
          1. Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies;
          2. Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations;
          3. Repurchase agreements for obligations of the United States or its agencies;
          4. Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107; provided, that certificates of deposit are collateralized in accordance with § 9-4-403;
          5. Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services;
          6. Prime banker's acceptances that are eligible for purchase by the federal reserve system; and
          7. Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this provision, “eligible collateral” includes cash collateral which is equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)(g ).
        2. Investment in the instruments authorized in subdivisions (a)(1)(B)(i)(e )-(g ) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)(e )-(g ).
      2. Included within the policy guidelines approved by the funding board shall be the procedure for determining the interest rate to be paid on investments of the treasury. Each time interest rates are changed, pursuant to the policy, the state treasurer shall report the change to the other members of the funding board.
    1. In lieu of actual physical delivery of investments purchased pursuant to this section, the state treasurer may accept trust receipts therefor as provided in § 9-4-408.
    1. In addition to the authority granted in subsection (a), the state funding board may, by resolution duly adopted, authorize the state treasurer to invest so much cash in the state treasury as it may deem appropriate in obligations of the state or any agency of the state maturing in not more than one (1) year from the date of such investment; provided, that the funding board has determined that such obligations could not otherwise be sold in traditional markets at reasonable rates of interest; and provided further, that the yield on such obligations is equal to or greater than, in the determination of the funding board with the concurrence of the state treasurer, the yield of other obligations in which the state could invest at that time under subsection (a). The funding board may, by resolution, establish guidelines and, within such guidelines, delegate the investment authority hereby conferred to the state treasurer. Such obligations, when so purchased, shall be turned over to the state treasurer, whose official bond shall be security for the safekeeping of such obligations. In lieu of actual physical delivery of such obligations so purchased, the state treasurer may accept trust receipts as provided in § 9-4-408.
    2. The funding board and the governing boards of the respective state agencies may authorize the sale of obligations of the state and state agencies, respectively, to the state pursuant to the terms and conditions set forth in this section.
    1. The state funding board is authorized to establish policy and procedure for investment of bond proceeds, as defined in subdivision (c)(2), in guaranteed investment contracts, including security requirements, if any. Prior to the adoption or promulgation by the state funding board of such policy and procedures, the entities listed in this subsection (c) may enter into such investments to the extent otherwise authorized by law. Nothing in this subsection (c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for an investment entered into prior to the adoption or promulgation by the state funding board of such policies and procedures.
    2. “Bond proceeds” means the proceeds from the sale of bonds, notes, and other obligations issued by the state funding board, the state school bond authority, the local development authority, state housing development agency and the state veterans' homes board, and reserves and funds maintained for debt service purposes.
    3. A guaranteed investment contract is an authorized investment for bond proceeds if the guaranteed investment contract:
      1. Has a defined termination date no later than five and one-half (5 ½) years from the date of issuance of the debt obligations, except for funds held in a debt service reserve fund, which shall be no later than the final maturity of the debt obligations; and
      2. Complies with standards in the policy established by the state funding board, including creditworthiness.
    4. The governing body of the entity shall, in the resolution or action authorizing the issuance of bonds, expressly authorize guaranteed investment contracts as an eligible investment.
  1. In addition to the authority granted in subsection (a), the state funding board may, in accordance with policy guidelines approved by resolution of the board and duly acknowledged by the finance, ways and means committees of the house of representatives and the senate, authorize the state treasurer to enter into short-term arrangements or obligations not authorized elsewhere in this section for the sole purpose of meeting the liquidity needs of the pooled investment fund. The state treasurer shall report any such arrangements to the finance, ways and means committees of the house of representatives and the senate. Such arrangements or obligations shall not be used for the purposes of speculation, but shall only be used to meet operational liquidity requirements.

Acts 1985, ch. 118, § 42; 1988, ch. 602, § 1; 1989, ch. 448, §§ 1-3; 1990, ch. 702, § 3; 1996, ch. 621, §§ 16, 17; 2003, ch. 204, § 1; 2009, ch. 294, § 1.

Compiler's Notes. Acts 2003, ch. 204, § 2, provided that no expenditure of public funds pursuant to that act shall be made in violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 U.S.C. § 2000d.

9-4-603. Pooled investment fund.

  1. There is hereby established the “pooled investment fund” for the purpose of receiving and investing any money in the custody of any officer or officers of the state unless prohibited by statute to be invested.
  2. Participants in the fund under this section shall be deemed to be the general fund of the state and any department or agency of the state which is required by court order, contract, state or federal law or federal regulation to receive interest on invested funds and which are authorized by the state treasurer to participate in the fund.
  3. The state treasurer shall administer the pooled investment fund on behalf of the participants in accordance with § 9-4-602 and shall have the authority to establish accounts and different classes of shares within the fund.
  4. All investments purchased belong jointly to the participants in the fund and the participants will share capital gains, income, and losses pro rata.
  5. The state shall keep a separate account, designated by name and number of each participant. Individual transactions and totals of all investments belonging to each participant shall be recorded in the accounts.
  6. The state shall report monthly to every participant having a beneficial interest in the pooled investment fund. The report shall show the changes in investments made during the preceding month.
  7. The state treasurer shall establish a revolving account, under the state treasurer's custody, to defray administrative costs of the pooled investment fund. The state treasurer may deduct from each participant's pro rata earnings through the fund a reasonable charge for administering the fund. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account.
  8. As the administrator of the pooled investment fund, the state treasurer is authorized to receive, invest and distribute a participant's funds by means of an electronic transfer or other reasonable methods. The state funding board may establish limits, restrictions or conditions on the acceptance of moneys into the fund and the withdrawal of moneys from the fund.
  9. At any time, a participant in the fund may request the return of its principal investment or investment income or both; however, a redemption of shares does not guarantee that a participant will receive the entire amount of the principal investment or investment income or both.

Acts 1985, ch. 118, § 43; 2002, ch. 514, §§ 3, 4; 2013, ch. 208, §§ 1-3.

Cross-References. Participation in fund by educational institutions, § 9-4-303.

Public deposit security trust fund, § 9-4-514.

9-4-604. Payments to debtor of state.

No person shall draw any money from the public treasury until all debts, dues, and demands owing by such person to the state are first liquidated and paid off. The commissioner of finance and administration shall not issue any warrant upon the treasury in favor of a person in default until all of such person's arrearages to the treasury are audited and paid, otherwise than by allowing such defaulter or delinquent credits on the amounts of such person's delinquencies for such sum or sums as may at any time be due and owing to such person from the treasury. Notwithstanding the provisions of this section to the contrary, the commissioner may issue such a warrant upon the commissioner's determination that refusing to issue such a warrant would result in an interruption of essential services.

Acts 1985, ch. 118, § 44; 2004, ch. 931, § 1.

9-4-605. Issuance of duplicate warrants.

The commissioner of finance and administration may issue a duplicate warrant to any person to whom an original warrant was issued and which was lost, mislaid, or destroyed, in accordance with procedures established by the commissioner and approved by the state treasurer and comptroller of the treasury.

Acts 1985, ch. 118, § 45.

9-4-606. Appropriation release requirements.

  1. The commissioner of finance and administration is authorized to require the preparation and submission of work programs, financial reports and any other fiscal information the commissioner deems necessary before releasing any appropriations or grant to any agency, association, district, center, or other organization that is not under the direct control of an executive department or agency of state government.
  2. The comptroller of the treasury is authorized and empowered to audit the fiscal records of any such agency, association, district, center or other such organization receiving state appropriations or grants.

Acts 1985, ch. 118, § 46.

9-4-607. Refunds of erroneously paid amounts.

With respect to any revenues or receipts collected by any department or agency with the exception of those collected by the department of revenue, other law to the contrary notwithstanding, such amounts as are determined to have been erroneously paid may be refunded by such procedure as shall be developed by the commissioner of finance and administration and approved by the comptroller of the treasury.

Acts 1985, ch. 118, § 47.

9-4-608. Intermediate-term investment fund.

  1. The state funding board shall determine whether a need exists for a longer-term investment fund for funds in the custody of the state treasurer. Upon determining that such a need exists, the state funding board may, by resolution duly adopted, create an intermediate-term investment fund as an additional investment vehicle for money in the custody of any department or agency of the state which is required by court order, contract, state or federal law or federal regulation to receive interest on invested funds. The funding board shall establish the terms of participation in the fund, and shall set the minimum and maximum amounts which may be invested in the fund by each participant. The investment fund shall be administered by the state treasurer within the guidelines established by the funding board.
  2. The authorized instruments for investment in the intermediate-term investment fund shall be those instruments contained in § 9-4-602, as well as the pooled investment fund set forth in § 9-4-603.
  3. Any department or agency of the state which is required by court order, contract, state or federal law or federal regulation to receive interest on invested funds may apply with the state treasurer to participate in the fund. Upon approval of any such application and upon investment of cash in the fund, the respective department or agency shall be deemed a participant in the fund. The general fund of the state may also participate in the fund. A participant may invest its cash for any length of time in the fund; provided, that the funding board may establish restrictions for withdrawal and/or penalties for early withdrawal.
  4. All securities purchased shall belong jointly to the participants in the fund and the participants will share capital gains, income, and losses pro rata.
  5. The state treasurer shall keep a separate account, designated by name and number of each participant. Individual transactions and totals of all investments belonging to each participant shall be recorded in the accounts.
  6. The state treasurer shall report monthly to every participant having a beneficial interest in the intermediate-term investment fund. The report shall show the changes in investments made during the preceding month.
  7. The state treasurer shall establish a revolving account, under the state treasurer's custody, to defray administrative costs of the investment fund. The state treasurer may deduct from each participant's pro rata earnings through the fund, a reasonable charge for administering the fund. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account.
  8. The county legislative body shall determine whether a need exists for a longer-term investment for funds in the custody of the county trustee. Upon determining that such a need exists, the county legislative body may, by resolution duly adopted, authorize the county trustee to invest county funds in the state intermediate-term investment fund, notwithstanding § 5-8-301. The resolution shall contain a disclosure statement as the treasurer shall periodically require. County investments in the state intermediate-term investment fund shall be administered by the county trustee within the guidelines established.
  9. Notwithstanding § 5-8-301, any entity that is eligible to participate in the pooled investment fund codified in § 9-4-603 may participate in the state intermediate-term investment fund.
  10. Local governments may invest in the intermediate-term investment fund by having the local government's legislative body, council, commission or other authorizing individual or authorizing governing body submit a duly adopted resolution to the state treasurer demonstrating its authority to participate, along with any other documents required by the state treasurer. The resolution shall contain a disclosure statement as the state treasurer shall periodically require.
  11. As the administrator of the intermediate-term investment fund, the state treasurer is authorized to receive, invest and distribute a participant's funds by means of an electronic transfer or other reasonable methods. The state funding board may establish limits, conditions or restrictions on the acceptance of moneys into the fund and the withdrawal of moneys from the fund.

Acts 1997, ch. 217, § 13; 2012, ch. 1002, § 1; 2013, ch. 208, §§ 4-7.

9-4-609. Restriction on expending public funds for advertising or public relations.

  1. As used in this section, “public funds” means state revenues appropriated in the general appropriations act.
  2. The general assembly finds that it is the public policy of this state that public funds shall not be obligated nor expended, nor shall a contract be entered into with an advertising, government affairs, or public relations firm, to promote, achieve, establish or restore a favorable relationship with the Tennessee public solely related to the image of any department, agency or office of the legislative, judicial or executive branch of government, when such advertising or public relations material, advertisement or communication provides no useful information, service or benefit to the public, unless such expenditure is included as a specific identifiable item in the general appropriations act.
  3. The board of regents and the board of trustees shall develop policies governing the expenditure of public funds which, while promoting the respective institutions of higher education included within their systems and adequately informing the general public about the specific educational opportunities, nature and uniqueness of each institution, are not used to represent the institution as being superior to any other specific state public institution of higher education.
  4. If a governmental entity has entered into a contract that includes the expenditure of funds prohibited under this section, the governmental entity shall immediately exercise any available cancellation clause in such contract that may be exercised related to such advertising or public relations material or communication.
  5. Nothing in this section shall apply to funds appropriated in the general appropriations act to promote state agriculture, industry, trade, commerce, tourism or recreation or to participate in or promote conferences, training or similar meetings.

Acts 1999, ch. 260, § 1.

9-4-610. Tennessee interagency cash flow committee.

  1. There is hereby created the Tennessee interagency cash flow committee, as an interagency committee, for the purpose of establishing, compiling and maintaining an eighteen-month forward rolling cash flow projection that projects on a monthly basis all material sources and all material uses of pooled investment fund cash projected to be received and expended by the state.
    1. The committee shall consist of six (6) members as follows:
      1. The state treasurer, or the state treasurer's designee;
      2. One (1) staff person with the department of the treasury, designated by the state treasurer;
      3. The comptroller of the treasury, or the comptroller's designee;
      4. One (1) staff person with the comptroller of the treasury, designated by the comptroller;
      5. The commissioner of finance and administration, or a staff person with the department of finance and administration, designated by the commissioner of finance and administration as the commissioner's designee; and
      6. The commissioner of revenue, or a staff person with the department of revenue, designated by the commissioner of revenue as the commissioner's designee.
    2. The state treasurer, or the state treasurer's designee, shall serve as chair of the committee.
    3. All members of the committee serve at the will and pleasure of the authority designating such member.
  2. The committee shall meet at the call of the state treasurer. The presence of a majority of the membership of the committee shall constitute a quorum. All actions of the committee shall be adopted upon a majority vote of the members of the committee who are participating in a meeting.
  3. The committee shall, from time to time, determine the materiality of all items of sources and uses to be furnished by state entities, the materiality of those items to be included in the cash flow projection, the format of the cash flow projection, the categories of sources and uses to be included in such projection and any notes or explanatory statements to be included in the projection. The state tax revenue components of the projection shall be based on the official revenue estimates of the department of finance and administration in monthly units.
  4. All state departments, agencies, boards, commissions, bureaus and instrumentalities, except the Tennessee board of regents and the University of Tennessee, shall promptly furnish to the committee periodically, or as otherwise requested, all requested information relating to sources and uses of pooled investment fund cash (historical and/or projected) in such form and format as the committee shall direct and which the committee deems necessary for the compilation and maintenance of the cash flow and state general fund earnings projections. Such requested information shall include estimates and other items necessary for projecting cash flow and earnings information relative to the various interest-bearing funds and accounts within the pooled investment fund, as well as information relative to the funds and amounts comprising the general fund's share of the pooled investment fund.
  5. Commencing July 1, 2014, the state treasurer shall post monthly on the public website of the treasury department the latest version of the cash flow projection and any notes or explanatory statements accompanying such projection.

Acts 2011, ch. 346, § 1; 2013, ch. 20, § 3; 2017, ch. 324, §§ 3, 4.

Compiler's Notes. The Tennessee interagency cash flow committee, created by this section, terminates June 30, 2023. See §§ 4-29-112, 4-29-244.

The URL of the public website of the Tennessee treasury department is http://www.treasury.tn.gov.

9-4-611. Compensation of members of state boards and commissions.

Notwithstanding any law to the contrary, no member of any state board or commission established by law or pursuant to law, which receives an appropriation, regardless of the source of funding, shall receive any compensation, whether denominated per diem or by whatever name called, except for days in which such member actually works four (4) or more hours performing duties directly relating to that board's or commission's activities or for time or days spent attending meetings of that board or commission. This section shall not preclude payment of salaries which are set by law in annual or monthly amounts. The chair or head of each board or commission, the department head to which such board or commission is attached administratively, and the commissioner of finance and administration shall prescribe procedures to contain, as a minimum, a certification of time worked by each member claiming compensation.

Acts 2013, ch. 454, § 17.

9-4-612. Investments of state funds in obligations guaranteed by United States government.

  1. Notwithstanding any requirement of this part, or any other law to the contrary, on and after April 22, 2015, the state treasurer may, in the state treasurer's sole discretion, invest money in the custody of any officer or officers of the state, which is otherwise required to be invested pursuant to § 9-4-603 or § 9-4-608, pursuant to this section, if the state officer or officers who have custody of the money request that the money be invested pursuant to this section.
  2. Investments made pursuant to this section are not subject to § 9-4-602.
  3. The authorized instruments for investment under this section shall be:
    1. Bonds, notes, and treasury bills of the United States or any other obligations guaranteed as to principal and interest by the United States or any of its agencies; and
    2. Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association, and other United States government sponsored corporations.
  4. Investments made pursuant to this section shall not be pooled, and each investor will bear the capital gains, income, and losses for that investor's investment.
  5. The state treasurer shall keep a separate account, designated by name and number of each investor. Individual transactions and totals of all investments belonging to each investor shall be recorded in the accounts.
  6. The state treasurer shall report monthly to every investor under this section. The report shall show any changes in investments made during the preceding month.
  7. The state treasurer shall establish a revolving account, under the state treasurer's custody, to defray administrative costs, investment costs, and any other expenses associated with investments made pursuant to this section. The state treasurer may deduct from each investor's earnings, a reasonable charge for administering the investor's investment. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account.
    1. Subject to subdivision (h)(2), at any time, an investor may request the return of the investor's principal investment or investment income or both; however, a redemption of the investment does not guarantee that an investor will receive the entire amount of the principal investment or investment income or both.
    2. In any case where an investor requests the return of an investment that will require liquidation of the investment prior to the investment reaching full maturity, the liquidation and return of the investment shall not be made unless the state treasurer approves the liquidation of the investment.

Acts 2015, ch. 196, § 1; 2018, ch. 909, § 1.

Part 7
Local Government Investment Pool

9-4-701. Purpose and findings.

The purpose of this part is to enable public entities in Tennessee to participate together in providing maximum opportunities for the investment of idle public funds. The general assembly finds and declares that the public interest is satisfied by providing maximum investment of idle funds, thereby reducing the need for imposing additional taxes.

Acts 1985, ch. 118, § 48.

Cross-References. Investments by local governments authorized, § 9-1-107.

9-4-702. Creation.

A local government investment pool is hereby created consisting of the aggregate of all funds from local governments that are placed in the custody of the state treasurer or the agents of the state treasurer for investment, reinvestment and the administration of the fund.

Acts 1985, ch. 118, § 49; 2013, ch. 208, § 8.

9-4-703. Advisory committee.

The members of the state funding board created by § 9-9-101 shall serve in an advisory capacity to the state treasurer in all matters pertaining to the local government investment pool.

Acts 1985, ch. 118, § 50; 1997, ch. 217, § 12.

9-4-704. Commingling with state funds — Interest — Charges — Accounts — Reports.

  1. Funds in the local government investment pool established by this part may be commingled, for investment purposes, with state funds held in the pooled investment fund created under § 9-4-603 or may be maintained in a separate pool that is subject to the provisions set forth in §§ 9-4-602 and 9-4-603. The state funding board shall determine whether the funds shall be commingled with the pooled investment fund or maintained in a separate pool. The local government investment pool funds shall be commingled with the pooled investment fund unless the state funding board decides otherwise. The commingling of the local government investment pool with the pooled investment fund for investment purposes shall not prohibit the funds from being established as two (2) separate funds and accounted for separately with accurate and detailed accounting records. As the administrator of the local government investment pool, the state treasurer is authorized to receive, invest and distribute a participant's funds by means of an electronic transfer or other reasonable methods. The state funding board may establish limits, conditions or restrictions on the acceptance of moneys into the fund and the withdrawal of moneys from the fund.
  2. The state treasurer may deduct from each participant's pro rata earnings through the fund a reasonable charge for administering the fund. In the event that the state treasurer does deduct an administrative fee, it shall be deposited and expended through the revolving account established in § 9-4-603(g).
  3. A separate account designated by name and number for each participant in the fund shall be kept to record individual transactions and totals of all investments belonging to each participant.
  4. A monthly report showing the changes in investments made during the preceding month shall be furnished to each participant having a beneficial interest in the investment pool.

Acts 1985, ch. 118, § 51; 2002, ch. 514, §§ 1, 2; 2013, ch. 208, §§ 9, 10.

9-4-705. State assistance.

The state treasurer is authorized to assist local governments in investing funds that are temporarily in excess of operating needs by:

  1. Explaining investment opportunities to such local governments through publication and other appropriate means;
  2. Acquainting such local governments with the state's practice and experience in investing short-term funds; and
  3. Providing technical assistance in investment of idle funds to local governments that request such assistance.

Acts 1985, ch. 118, § 52.

9-4-706. Safekeeping and servicing of securities.

  1. The state treasurer is authorized to open such accounts as are permitted by the federal reserve for the safekeeping and other servicing of securities of local governments, and to enter into agreements with local governments to provide for such services as may be permitted by the federal reserve.
  2. The state treasurer is further authorized to deduct reasonable charges for the services provided pursuant to this section from the participating local government's account in the local government investment pool established pursuant to this part.

Acts 1986, ch. 923, § 6.

9-4-707. Electronic transfer of funds and reports — Waiver.

Commencing on July 1, 2011, each local government participating in the local government investment pool shall electronically transfer to the local government investment pool any funds for which the local government desires to be invested or reinvested pursuant to this part. Such local governments shall also electronically file any report or other document with which such electronically transferred payment is associated or on which credit for the payment electronically transferred is taken. In extenuating circumstances, the state treasurer has discretionary authority to waive the requirements of this section with respect to any local government. To obtain a waiver, the local government shall demonstrate in writing to the treasurer that such circumstances exist.

Acts 2010, ch. 728, § 1.

Part 8
State Trust of Tennessee [Repealed]

9-4-801. [Repealed.]

Acts 1985, ch. 118, § 53; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

Acts 2017, ch. 65, § 4 provided that notwithstanding § 4-29-112, the state trust of Tennessee, created by § 9-4-801, shall terminate and shall cease to exist March 31, 2017.

9-4-802. [Repealed.]

Acts 1985, ch. 118, § 54; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-803. [Repealed.]

Acts 1985, ch. 118, § 55; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-804. [Repealed.]

Acts 1985, ch. 118, § 56; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-805. [Repealed.]

Acts 1985, ch. 118, § 57; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-806. [Repealed.]

Acts 1985, ch. 118, § 58; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-807. [Repealed.]

Acts 1985, ch. 118, § 59; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-808. [Repealed.]

Acts 1985, ch. 118, § 60; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-809. [Repealed.]

Acts 1985, ch. 118, § 61; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-810. [Repealed.]

Acts 1985, ch. 118, § 62; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-811. [Repealed.]

Acts 1985, ch. 118, § 63; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

9-4-812. [Repealed.]

Acts 1989, ch. 115, § 1; repealed by Acts 2017, ch. 65, § 3, effective March 31, 2017.

Compiler's Notes. Former part 8, §§ 9-4-8019-4-812 concerned the state trust of Tennessee.

Part 9
State Office Buildings and Support Facilities Revolving Fund

9-4-901. Created.

There is hereby created within the general fund a special account to be known as the “state office buildings and support facilities revolving fund.”

Acts 1993, ch. 332, § 1.

9-4-902. Unencumbered funds and unexpended balance.

Any unencumbered funds and any unexpended balance of the fund remaining at the end of any fiscal year shall not revert to the general fund, but shall be carried forward until expended in accordance with this part.

Acts 1993, ch. 332, § 1.

9-4-903. Interest.

Interest accruing on investments and deposits of the fund shall be returned to the fund and remain a part of the fund.

Acts 1993, ch. 332, § 1.

9-4-904. Investments — Administration of fund.

Moneys in the fund shall be invested by the state treasurer for the benefit of the fund pursuant to § 9-4-603. The fund shall be administered by the commissioner of general services in accordance with policy established by the state building commission.

Acts 1993, ch. 332, § 1; 2013, ch. 454, § 38.

9-4-905. Purpose of fund.

The state office buildings and support facilities revolving fund is to provide for:

  1. Operating expenses for office buildings and support facilities;
  2. Debt service payments on general obligation bonds authorized to build or acquire office buildings and support facilities;
  3. Routine maintenance expenditures on office buildings and support facilities;
  4. Major maintenance and renovation projects for office buildings and support facilities as approved by the state building commission;
  5. Relocation expenses for state agencies;
  6. Payments for leased space occupied by state agencies; and
  7. Payments to build or acquire buildings or support facilities as approved by the state building commission.

Acts 1993, ch. 332, § 1.

9-4-906. Deposits.

Notwithstanding any law to the contrary, there shall be deposited in the fund any and all appropriations made either in the general appropriations act, including any rents for leased state facilities covered by the fund, or in any other act which is for the purpose of funding the items listed in § 9-4-905.

Acts 1993, ch. 332, § 1.

9-4-907. Lease payments.

Lease payments for space occupied by state agencies, including the legislative and judicial branches, shall be established by policy issued by the commissioner of general services and approved by the state building commission; provided, however, that until such time as a policy shall be issued by the commissioner of general services and approved by the state building commission, the policy formerly issued by the commissioner of finance and administration and approved by the state building commission shall remain effective. The lease payments shall be paid to the fund.

Acts 1993, ch. 332, § 1; 2013, ch. 454, § 39.

Part 10
Pension Stabilization Reserve Trust

9-4-1001. Pension stabilization reserve trust fund.

The pension stabilization reserve trust is created. The pension stabilization reserve trust fund shall be established and funded through the employer contributions contributed to the trust pursuant to § 8-36-920(d)(4), and all income from the investment of the funds in the trust fund. The trust and the funds therein shall be administered by the treasury department. The trust fund shall be an irrevocable trust exclusively for the benefit of the participants and beneficiaries of the Hybrid Retirement Plan for State Employees and Teachers compiled in title 8, chapter 36, part 9. The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. It shall be impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the Hybrid Retirement Plan for State Employees and Teachers and this trust, for any part of the corpus or income of the trust to be used or diverted for purposes other than for the exclusive benefit of the employees or their beneficiaries. The attorney general and reporter shall approve the terms of the trust instrument.

Acts 2017, ch. 374, § 1; 2018, ch. 590, § 1.

Code Commission Notes.

Acts 2017, ch. 374, § 1 enacted a new part 57, §§ 9-4-57019-4-5706, but the part has been redesignated as part 10, §§ 9-4-10019-4-1006 by authority of the Code Commission.

9-4-1002. Trustees.

The comptroller of the treasury, the commissioner of financial institutions, the commissioner of finance and administration, the secretary of state, and the state treasurer, or their designees, shall serve as trustees of the trust. The comptroller of the treasury shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.

Acts 2017, ch. 374, § 1.

Code Commission Notes.

Acts 2017, ch. 374, § 1 enacted a new part 57, §§ 9-4-57019-4-5706,  but the part has been redesignated as part 10, §§ 9-4-10019-4-1006 by authority of the Code Commission.

9-4-1003. Investment policy — Individual separate stabilization reserve trust accounts.

  1. The trustees shall adopt an investment policy authorizing how assets in the trust may be invested. The policy shall not authorize assets in the trust to be invested in any instrument, obligation, security, or property that would not constitute a legal investment for assets of the Tennessee consolidated retirement system. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
  2. The funds transferred or deposited into the trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred or deposited into the trust. All or a portion of the trust may be invested, reinvested, and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to part 6 of this chapter. The assets of the trust may also be co-invested in a group trust in accordance with § 8-37-104(f).
  3. The trust fund shall consist of the following individual separate stabilization reserve trust accounts for the purpose of accounting for the employer contributions made to the trust on account of:
    1. State employees participating in the Hybrid Retirement Plan for State Employees and Teachers, compiled in title 8, chapter 36, part 9; and
    2. Teachers participating in the Hybrid Retirement Plan for State Employees and Teachers.
  4. In addition, the trust fund shall consist of individual separate stabilization reserve trust accounts established in the name of each political subdivision participating in the Hybrid Retirement Plan for State Employees and Teachers for the purpose of accounting for the employer contributions made to the trust by the political subdivision on account of its employees.
  5. The state treasurer shall assess a charge to the trust, in an amount to be determined by the treasurer, to meet the administrative and investment expenses of the treasury department in providing services under this part.

Acts 2017, ch. 374, § 1; 2018, ch. 590, § 2.

Code Commission Notes.

Acts 2017, ch. 374, § 1 enacted a new part 57, §§ 9-4-57019-4-5706,  but the part has been redesignated as part 10, §§ 9-4-10019-4-1006 by authority of the Code Commission.

9-4-1004. Purpose of trust fund — Certification of amount needed to fund benefits — Use of assets.

  1. As provided in this section, the purpose of the pension stabilization reserve trust fund is to protect the participants and beneficiaries of the Hybrid Retirement Plan for State Employees and Teachers from a reduction or loss of benefits through the implementation of the cost controls contained in § 8-36-922(c)(1)(C)-(G) or in § 8-36-922(d)(1). If in any given year, the total amount in an employer's employer reserve account established pursuant to § 8-36-920(e) is not sufficient to meet the actuarial liabilities for which the employer's employer reserve account was created, then the board of trustees of the Tennessee consolidated retirement system shall certify to the trustees of the trust the amount necessary to fund current benefits as determined by the actuarial valuation performed by the retirement system's actuary. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the employer's stabilization reserve trust account to the applicable employer reserve account of the employer would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the employer's stabilization reserve trust account to the applicable employer reserve account of the employer.
  2. The assets of the pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.

Acts 2017, ch. 374, § 1; 2018, ch. 590, § 3.

Code Commission Notes.

Acts 2017, ch. 374, § 1 enacted a new part 57, §§ 9-4-57019-4-5706,  but the part has been redesignated as part 10, §§ 9-4-10019-4-1006 by authority of the Code Commission.

9-4-1005. Suspension of deposits of employer contributions.

Deposits of employer contributions into the pension stabilization reserve trust fund as provided in § 8-36-920 shall be suspended effective July 1 of any given year next following the most recent actuarial valuation conducted pursuant to § 8-36-922(b) for an employer whose stabilization reserve trust account equals or exceeds a certain maximum amount that is determined by the trustees of the trust created pursuant to this part. The amount shall be expressed in dollars, as a percentage, or other form as shall be determined at the sole discretion of the trustees. The trustees, in consultation with board of trustees of the Tennessee consolidated retirement system and the retirement system's actuary, shall establish the methodology and procedures to be used in ascertaining the maximum amount. Deposits into the pension stabilization reserve trust fund shall be reinstated for the employer effective July 1 of any given year next following the most recent actuarial valuation conducted pursuant to § 8-36-922(b) when the total amount in the employer's stabilization reserve trust account is less than the maximum amount adopted by the trustees pursuant to this section.

Acts 2017, ch. 374, § 1.

Code Commission Notes.

Acts 2017, ch. 374, § 1 enacted a new part 57, §§ 9-4-57019-4-5706,  but the part has been redesignated as part 10, §§ 9-4-10019-4-1006 by authority of the Code Commission.

9-4-1006. Annual financial reports.

The trustees shall prepare annual financial reports following the close of each fiscal year relative to the activities of the trust. The annual reports, all books, accounts, and financial records of the trust shall be subject to audit by the comptroller of the treasury.

Acts 2017, ch. 374, § 1.

Code Commission Notes.

Acts 2017, ch. 374, § 1 enacted a new part 57, §§ 9-4-57019-4-5706,  but the part has been redesignated as part 10, §§ 9-4-10019-4-1006 by authority of the Code Commission.

Part 11
State Employee Legacy Pension Stabilization Reserve Trust

9-4-1101. Part definitions.

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

  1. “Legacy pension plan” means the Tennessee consolidated retirement system that is established in title 8, chapters 34 - 37, excluding the Hybrid Retirement Plan for State Employees and Teachers, compiled in title 8, chapter 36, part 9;
  2. “State employee” means any person who is a state official, including members of the general assembly, the attorney general and reporter, district attorneys general, state judges, and district public defenders, or any person who is employed in the service of and whose compensation is payable by the state, or any person who is employed by the state whose compensation is paid in whole or in part from federal or other funds. “State employee” also means any person who is employed in the service of and whose compensation is payable by a public institution of higher education, or any person who is employed by a public institution of higher education whose compensation is paid in whole or in part from federal or other funds; and
  3. “Trustees” means the five (5) trustees designated in § 9-4-1002.

Acts 2017, ch. 374, § 7.

Code Commission Notes.

Acts 2017, ch. 374, § 7 enacted a new part 58, §§ 9-4-58019-4-5806,  but the part has been redesignated as part 11, §§ 9-4-11019-4-1106 by authority of the Code Commission.

9-4-1102. State employee legacy pension stabilization reserve trust fund.

The state employee legacy pension stabilization reserve trust is created. The state employee legacy pension stabilization reserve trust fund shall be established and funded through appropriations made in the general appropriations act from time to time for such purpose. The trust and the funds therein shall be administered by the department of the treasury. The trust fund shall be an irrevocable trust exclusively for the benefit of state employees who are members of the legacy plan. The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. It shall be impossible, at any time prior to the satisfaction of all liabilities with respect to state employees and their beneficiaries under the legacy pension plan and this trust, for any part of the corpus or income of the trust to be used or diverted for purposes other than for the exclusive benefit of the state employees or their beneficiaries. The attorney general and reporter shall approve the terms of the trust instrument.

Acts 2017, ch. 374, § 7; 2018, ch. 590, § 4.

Code Commission Notes.

Acts 2017, ch. 374, § 7 enacted a new part 58, §§ 9-4-58019-4-5806,  but the part has been redesignated as part 11, §§ 9-4-11019-4-1106 by authority of the Code Commission.

9-4-1103. Chair of trustees.

The comptroller of the treasury shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.

Acts 2017, ch. 374, § 7.

Code Commission Notes.

Acts 2017, ch. 374, § 7 enacted a new part 58, §§ 9-4-58019-4-5806,  but the part has been redesignated as part 11, §§ 9-4-11019-4-1106 by authority of the Code Commission.

9-4-1104. Investment policy — Charge for administrative and investment expenses.

  1. The trustees shall adopt an investment policy authorizing how assets in the trust may be invested. The policy shall not authorize assets in the trust to be invested in any instrument, obligation, security, or property that would not constitute a legal investment for assets of the Tennessee consolidated retirement system. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
  2. The funds transferred or deposited into the trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred or deposited into the trust. All or a portion of the trust may be invested, reinvested, and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to part 6 of this chapter. The assets of the trust may also be co-invested in a group trust in accordance with § 8-37-104(f).
  3. The state treasurer shall assess a charge to the trust, in an amount to be determined by the treasurer, to meet the administrative and investment expenses of the treasury department in providing services under this part.

Acts 2017, ch. 374, § 7; 2018, ch. 590, § 5.

Code Commission Notes.

Acts 2017, ch. 374, § 7 enacted a new part 58, §§ 9-4-58019-4-5806, but the part has been redesignated as part 11, §§ 9-4-11019-4-1106 by authority of the Code Commission.

9-4-1105. Purpose of trust fund — Certification of amount needed to fund increase in employer contribution rate — Use of assets.

  1. As provided in this section, the purpose of the state employee legacy pension stabilization reserve trust fund is to protect state employee members of the legacy plan from a reduction or erosion of funds in the legacy plan that are necessary to pay benefits provided by the plan. If in any given year, the actuarially determined employer contribution rate for state employees exceeds the actuarially determined employer contribution rate for state employees as of fiscal year 2018, the board of trustees of the Tennessee consolidated retirement system may certify to the trustees of the trust the amount necessary to fund the increase in the employer contribution rate for that year. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the state employee legacy pension stabilization reserve trust fund would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the state employee legacy pension stabilization reserve trust fund to the state accumulation fund of the legacy plan.
  2. The assets of the state employee legacy pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.

Acts 2017, ch. 374, § 7.

Code Commission Notes.

Acts 2017, ch. 374, § 7 enacted a new part 58, §§ 9-4-58019-4-5806,  but the part has been redesignated as part 11, §§ 9-4-11019-4-1106 by authority of the Code Commission.

9-4-1106. Annual financial reports.

The trustees shall prepare annual financial reports following the close of each fiscal year relative to the activities of the trust. The annual reports, all books, accounts, and financial records of the trust shall be subject to audit by the comptroller of the treasury.

Acts 2017, ch. 374, § 7.

Code Commission Notes.

Acts 2017, ch. 374, § 7 enacted a new part 58, §§ 9-4-58019-4-5806,  but the part has been redesignated as part 11, §§ 9-4-11019-4-1106 by authority of the Code Commission.

Part 12
Teacher Legacy Pension Stabilization Reserve Trust

9-4-1201. Part definitions.

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

  1. “Legacy pension plan” means the Tennessee consolidated retirement system that is established in title 8, chapters 34-37, excluding the Hybrid Retirement Plan for State Employees and Teachers, compiled in title 8, chapter 36, part 9;
  2. “Teacher” has the meaning set forth in § 8-34-101(49)(B), but does not include any person employed by a public institution of higher education; and
  3. “Trustees” means the five (5) trustees designated in § 9-4-1002.

Acts 2017, ch. 374, § 8.

Code Commission Notes.

Acts 2017, ch. 374, § 8 enacted a new part 59, §§ 9-4-59019-4-5906,  but the part has been redesignated as part 12, §§ 9-4-12019-4-1206 by authority of the Code Commission.

9-4-1202. Teacher legacy pension stabilization reserve trust fund.

The teacher legacy pension stabilization reserve trust is created. The teacher legacy pension stabilization reserve trust fund shall be established and funded through a mechanism and methodology as shall be determined in the future by the commissioner of finance and administration and the state treasurer. The trust and the funds therein shall be administered by the department of the treasury. The trust fund shall be an irrevocable trust exclusively for the benefit of teachers who are members of the legacy plan. The assets of the trust fund shall be preserved, invested, and expended solely pursuant to and for the purposes of this part and shall not be loaned or otherwise transferred or used for any other purpose. It shall be impossible, at any time prior to the satisfaction of all liabilities with respect to teachers and their beneficiaries under the legacy pension plan and this trust, for any part of the corpus or income of the trust to be used or diverted for purposes other than for the exclusive benefit of the teachers or their beneficiaries. The attorney general and reporter shall approve the terms of the trust instrument.

Acts 2017, ch. 374, § 8; 2018, ch. 590, § 6.

Code Commission Notes.

Acts 2017, ch. 374, § 8 enacted a new part 59, §§ 9-4-59019-4-5906,  but the part has been redesignated as part 12, §§ 9-4-12019-4-1206 by authority of the Code Commission.

9-4-1203. Chair of trustees.

The comptroller of the treasury shall serve as the chair of the trustees and shall preside over all meetings and proceedings of the trustees.

Acts 2017, ch. 374, § 8.

Code Commission Notes.

Acts 2017, ch. 374, § 8 enacted a new part 59, §§ 9-4-59019-4-5906,  but the part has been redesignated as part 12, §§ 9-4-12019-4-1206 by authority of the Code Commission.

9-4-1204. Investment policy — Charge for administrative and investment expenses.

  1. The trustees shall adopt an investment policy authorizing how assets in the trust may be invested. The policy shall not authorize assets in the trust to be invested in any instrument, obligation, security, or property that would not constitute a legal investment for assets of the Tennessee consolidated retirement system. The state treasurer shall be responsible for the investment and reinvestment of trust funds in accordance with the policies and guidelines established by the trustees.
  2. The funds transferred or deposited into the trust may be commingled with, co-invested with, and invested or reinvested with other assets transferred or deposited into the trust. All or a portion of the trust may be invested, reinvested, and co-invested with other funds, not a part of the trust, which are held by the state treasurer, including, but not limited to, assets of the Tennessee consolidated retirement system and the state pooled investment fund established pursuant to part 6 of this chapter. The assets of the trust may also be co-invested in a group trust in accordance with § 8-37-104(f).
  3. The state treasurer shall assess a charge to the trust, in an amount to be determined by the treasurer, to meet the administrative and investment expenses of the treasury department in providing services under this part.

Acts 2017, ch. 374, § 8; 2018, ch. 590, § 7.

Code Commission Notes.

Acts 2017, ch. 374, § 8 enacted a new part 59, §§ 9-4-59019-4-5906,  but the part has been redesignated as part 12, §§ 9-4-12019-4-1206 by authority of the Code Commission.

9-4-1205. Purpose of trust fund — Certification of amount needed to fund increase in employer contribution rate — Use of assets.

  1. As provided in this section, the purpose of the teacher legacy pension stabilization reserve trust fund is to protect teacher members of the legacy plan from a reduction or erosion of funds in the legacy plan that are necessary to pay benefits provided by the plan. If in any given year, the actuarially determined employer contribution rate for teachers exceeds the actuarially determined employer contribution rate for teachers as of fiscal year 2018, the board of trustees of the Tennessee consolidated retirement system may certify to the trustees of the trust the amount necessary to fund the increase in the employer contribution rate for that year. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the teacher legacy pension stabilization reserve trust fund would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the teacher legacy pension stabilization reserve trust fund to the state accumulation fund of the legacy plan.
  2. The assets of the teacher legacy pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.

Acts 2017, ch. 374, § 8.

Code Commission Notes.

Acts 2017, ch. 374, § 8 enacted a new part 59, §§ 9-4-59019-4-5906,  but the part has been redesignated as part 12, §§ 9-4-12019-4-1206 by authority of the Code Commission.

9-4-1206. Annual financial reports.

The trustees shall prepare annual financial reports following the close of each fiscal year relative to the activities of the trust. The annual reports, all books, accounts, and financial records of the trust shall be subject to audit by the comptroller of the treasury.

Acts 2017, ch. 374, § 8.

Code Commission Notes.

Acts 2017, ch. 374, § 8 enacted a new part 59, §§ 9-4-59019-4-5906,  but the part has been redesignated as part 12, §§ 9-4-12019-4-1206 by authority of the Code Commission.

Parts 13-50
[Reserved]

Part 51
State Budget and Appropriations

9-4-5101. Items set forth in budget.

  1. The budget of the state government shall present a complete financial plan for the ensuing fiscal year, which plan shall set forth all proposed expenditures for the administration, operation, and maintenance of the several departments, institutions, offices and agencies of the state government, the interest and debt redemption charges during the fiscal year.
  2. The budget shall also present proposals for capital projects to be undertaken or completed during the ensuing year, and the means of financing such projects.
  3. In addition thereto, the budget shall set forth the anticipated revenues of the state government and any other means of financing the expenditures proposed for the ensuing fiscal year.

Acts 1937, ch. 33, § 17; C. Supp. 1950, § 255.17; Acts 1969, ch. 12, § 1; 1970, ch. 434, § 1; T.C.A. (orig. ed.), § 9-601; T.C.A., § 9-6-101; Acts 2002, ch. 510, § 1; 2013, ch. 243, § 3.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which deleted subsection (d), shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

Cross-References. Budget powers, § 4-3-1006.

Establishment of budget section in department of finance and administration, § 4-3-1003.

9-4-5102. Performance-based program budgeting.

It is the intent of the general assembly that, to the extent practicable, the budget of the state government shall be prepared using performance data and other relevant program measures. The goals for such budget shall include:

  1. For each budget unit, detailed statements identifying all substantial aspects of agency operations, priorities, and activities, to specifically include:
    1. A description of the objective or objectives of each program;
    2. A description of the activity or activities which are intended to accomplish each objective;
    3. Indicators of quantity and quality of performance of these activities; and
    4. The level of effort required to accomplish each activity in terms of funds and personnel; and
  2. A summary statement incorporating the information in subdivision (1) for the current and one (1) prior fiscal year for each budget unit and detailed statements of the sources of funding for all fiscal years presented.

Acts 1977, ch. 457, § 1; T.C.A., § 9-616; Acts 1984, ch. 771, § 1; T.C.A. § 9-6-102; Acts 2002, ch. 875, § 6; 2013, ch. 243, § 4.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5103. Estimates by departments — Classification of expenditures.

  1. On or before December 1 of each year, all departments, offices, and agencies of the state government shall prepare on blanks furnished to them by the commissioner of finance and administration, and submit to such officer, estimates of their expenditure requirements for the next fiscal year compared with the corresponding figures of the last completed fiscal year and estimated figures for the current fiscal year. The expenditure estimates shall be classified to set forth the data by funds, organization units, character and objects of expenditure; the organization units may be subclassified by function and activities, or in any other manner at the discretion of the commissioner.
  2. Any state agency subject to part 56 of this chapter shall include with its budget request the performance measures and standards required by § 9-4-5606.

Acts 1937, ch. 33, § 19; C. Supp. 1950, § 255.19; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1969, ch. 12, §§ 2, 3; T.C.A. (orig. ed.), § 9-602; T.C.A. § 9-6-103; Acts 2002, ch. 875, § 3; 2013, ch. 243, § 5.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended subsection (b), shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

Cross-References. State schools, §§ 49-1-302, 49-50-1001, 49-50-1002.

9-4-5104. Revenue estimates.

On or before January 1 of each year, the commissioner of finance and administration shall prepare revenue estimates for the current fiscal year and for the next fiscal year for inclusion in the budget. The revenue estimates shall be classified so as to show the receipts by funds, organization units, and sources of income.

Acts 1937, ch. 33, § 19; C. Supp. 1950, § 255.19; modified; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1969, ch. 12, § 4; T.C.A. (orig. ed.), § 9-603; T.C.A. § 9-6-104.

9-4-5105. Review of estimates — Transmittal of budget document — Governor's power to amend the budget not restricted or prohibited.

  1. The governor, with the assistance of the commissioner of finance and administration, shall review the estimates, altering, revising, increasing, or decreasing the items of the estimates as the governor may deem necessary in view of the needs of the various spending agencies and the total anticipated revenues of the state government during the ensuing fiscal year.
  2. The commissioner, at the instance of the governor, shall then prepare a budget document in the form required by this chapter, and the governor shall transmit such document in printed form to the general assembly prior to February 1, each year unless the general assembly, by joint resolution, authorizes transmittal by a later date; provided, that a governor in the first year of such governor's term in office is required to transmit such budget document in printed form to the general assembly prior to March 1 of that year, unless the general assembly, by joint resolution, authorizes transmittal by a later date.
  3. Nothing contained in § 16-3-803(l) or any other law shall be construed to restrict or prohibit the governor's authority to revise the budget, submitted pursuant to §§ 16-3-803(l) and 9-4-5103, for maintenance and operation of the state court system, and such budget or revised budget shall be included within the budget document required by this section.

Acts 1937, ch. 33, § 20; 1945, ch. 10, § 1; C. Supp. 1950, § 255.20; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1969, ch. 12, §§ 5, 6; 1975, ch. 27, § 1; 1979, ch. 218, § 1; T.C.A. (orig. ed.), § 9-604; Acts 1992, ch. 896, § 2; T.C.A. § 9-6-105.

9-4-5106. Form and contents of budget document — General appropriations bill.

  1. The budget document, presenting the financial plan of the state government for the next fiscal year, shall be set up in three (3) parts, the nature and contents of which are as follows:
      1. Part 1 shall consist of a budget message by the governor which shall outline the financial policy of the state government for the ensuing fiscal year, describing in connection therewith the important features of the financial plan; it shall also embrace a general budget summary setting forth the aggregate figures of the budget in such manner as to show the balances, relations between the total proposed expenditures and the total anticipated revenues, together with the other means of financing the budget for the next fiscal year, contrasted with the corresponding figures for the last completed fiscal year and for the fiscal year in progress. The general budget summary shall be supported by explanatory schedules or statements, classifying the expenditures contained therein by organization units, objects and funds and the income by organization units, sources, and funds;
      2. Part 1 also shall include a schedule on tax exemptions, identifying, to the extent practicable, all exemptions from state taxes and estimating the amount of revenue which would be collected by the state in the ensuing fiscal year if the exemptions were not to exist. The schedule shall include an estimate for each such exemption. The estimates of such exemptions shall be based upon the revenue estimates included in the budget document;
    1. Part 2 shall embrace the detailed budget estimates both of expenditures and revenues as provided in this chapter; it also shall include performance measures and standards required by §  9-4-5606; it shall also include a statement of the bonded indebtedness of the state government, showing the debt redemption requirements scheduled over the fiscal years until the final date of retirement, the net and gross debt of the state, and the condition of the sinking funds; in addition thereto, it shall contain any statements relative to the financial plan which the governor may deem desirable, or which may be required by the general assembly; and
    2. Part 3 shall embrace complete drafts of the budget bills, that is, the legislative measures required to give legal sanction to the financial plan when adopted by the general assembly. These bills shall include an appropriation bill, authorizing, by spending agencies and by funds, all expenditures of the state government for the next fiscal year, and such other bills as may be required to provide the revenues necessary to finance the budget. The governor shall submit these bills for introduction in both houses of the general assembly no later than fourteen (14) days after the budget document is transmitted or by the general bill cut-off date in the respective houses, whichever is later.
  2. The capital budget, to be included in part 2 of the budget document, shall contain funding for all capital outlay. Funding for all capital improvement projects of whatever amount and funding for each capital maintenance project of one million dollars ($1,000,000) or more shall be specified by project, by affected spending agency, and by funding sources, including state current funds, bonds, and other revenue. Funding for each capital maintenance project of less than one million dollars ($1,000,000) shall be specified in such detail in the budget document as the governor shall determine.

Acts 1937, ch. 33, § 18; C. Supp. 1950, § 255.18; Acts 1969, ch. 12, §§ 7-10; T.C.A. (orig. ed.), § 9-605; Acts 1992, ch. 896, § 3; 1993, ch. 66, § 12; T.C.A. § 9-6-106; Acts 2002, ch. 510, § 2; 2002, ch. 875, §§ 4, 7; 2012, ch. 1026, § 6; 2013, ch. 243, §§ 6, 19, 20; 2013, ch. 454, §§ 16, 40.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5107. Direct and continuing appropriations.

  1. By authorizing the issuance of debt that is not a liability of the state and the payment of debt service thereon by the state school bond authority in title 49, by the local development authority in title 4, by the housing development agency in title 13, and by the state veterans' homes board in title 58, the general assembly intends that such authorizations constitute:
    1. With respect to each debt issuer listed above, a direct and continuing appropriation to that debt issuer of its earnings, revenues or other assets for expenditures authorized by or pursuant to the respective enabling legislation and the authority to expend those funds in accordance with or pursuant to such legislation; and
    2. With respect to any public higher education entity whose contracts or agreements with the state school bond authority support the payment of such debt issuer's debt service, a direct and continuing appropriation to that entity of its earnings, revenues or other assets pledged or governed by such contracts or agreements and the authority to expend those funds in accordance with or pursuant to the respective contracts or agreements.
  2. Such funds are hereby appropriated on a direct and continuing basis to each debt issuer listed in subsection (a) and to each public higher education entity described in subsection (a) for such purposes.
  3. For purposes of this section, the term “revenues” includes amounts allowable, without regard to any offset, to any such debt issuers from the federal government with respect to qualified bonds.

Acts 2001, ch. 264, § 2; 2010, ch. 1117, § 6.

Attorney General Opinions. Even if the general assembly fails to adopt a budget, including a continuation budget, by June 30, the Tennessee state school bond authority, the Tennessee local development authority, the Tennessee housing development authority, and the Tennessee state veterans' homes board may continue to pay debt service from their revenues and expend their revenues, OAG 02-034, 2002 Tenn. AG LEXIS 35 (3/15/02).

9-4-5108. Form of appropriation bill — Capital projects — General legislation — Contents of title.

    1. The general appropriations bill, provided for in § 9-4-5106, shall be drawn in such form as to authorize only lump sum appropriations to meet the expenditure needs of the various spending agencies of the state government for the next fiscal year.
    2. For the expenses of operation and maintenance in each department, division, institution, office, or other agency, there shall be not more than two (2) appropriations, one (1) for personal services and one (1) for other expenses, which shall be allotted before becoming available for expenditure as provided in §§ 9-4-5109 — 9-4-5113.
  1. Appropriations for capital improvement and capital maintenance projects shall be specified by state agency in lump sums consistent with capital improvement and maintenance projects detailed in the budget document.
  2. The appropriation bill shall not contain any provisions of general legislation.
  3. The title of any bill making appropriations from the treasury shall include the phrase, “This act makes appropriations for (here insert the object).” The title shall also state whether the act shall be for a limited period of time or for an indefinite period. If it is for a limited period of time, the title shall state that time period.
  4. Notwithstanding any other law to the contrary, the appropriations bill may specify incentives or disincentives relative to performance-based budgeting.

Acts 1937, ch. 33, § 21; C. Supp. 1950, § 255.21; Acts 1969, ch. 12, §§ 11, 12; 1977, ch. 393, § 1; T.C.A. (orig. ed.), § 9-606; T.C.A. § 9-6-108; Acts 2002, ch. 875, § 5; 2012, ch. 1026, § 7.

Cross-References. Origin and frame of bills, Tenn. Const., art. II, § 17.

Attorney General Opinions. Constitutionality of Acts 1991, ch. 509, § 41, item 16, OAG 91-78, 1991 Tenn. AG LEXIS 89 (8/27/91).

Act authorizing constituent accountability funds required appropriations titling, OAG 99-040, 1999 Tenn. AG LEXIS 59 (2/24/99).

Unless it is expressly forbidden by statute, state agencies, generally, and public health and safety and various administrative agencies, in particular, may continue to carry out their duties and responsibilities regardless of whether an appropriations act has been enacted, OAG 00-083, 2000 Tenn. AG LEXIS 86 (5/4/00).

Whether any particular official's salary may be paid if an appropriations act has not been enacted would depend on whether the statute setting that official's salary and authorizing its payment itself constitutes an appropriation, OAG 00-083, 2000 Tenn. AG LEXIS 86 (5/4/00).

2013 Appropriations Act provision relating to York Institute.  OAG 13-75, 2013 Tenn. AG LEXIS 76 (9/26/13).

9-4-5109. Amendment of appropriation recommendations.

The governor may amend or supplement the governor's recommendations as to the general appropriations bill while it is before the general assembly.

Acts 1937, ch. 33, § 23; C. Supp. 1950, § 255.23; T.C.A. (orig. ed.), § 9-607; T.C.A. § 9-6-109.

9-4-5110. Work program — Allotments.

  1. Not later than June 1 of each year, the governor shall require the head of each department, office, and agency of the state government to submit to the commissioner of finance and administration a work program for the ensuing fiscal year, such program to include all appropriations made by the general assembly to such department, office, or agency for its operation and maintenance and for capital projects, and to show the requested allotments of the appropriations by quarters for the entire fiscal year. The governor, with the assistance of the commissioner, shall review the requested allotments with respect to the work program of each department, office, or agency, and shall, if the governor deems it necessary, revise, alter, or change such allotments before approving them. The aggregate of such allotments shall not exceed the total appropriations made by the general assembly to the department, office, or agency for the fiscal year in question. The commissioner shall transmit a copy of the allotments as approved by the governor to the head of each department, office, or agency concerned. The commissioner shall thereupon authorize all expenditures to be made from the appropriations on the basis of such allotments and not otherwise.
  2. Notwithstanding subsection (a), the speakers of the senate and the house of representatives or, by joint delegation, their director of legislative administration; the chief justice or, by delegation, the administrative director of the courts; the attorney general and reporter; the secretary of state; the comptroller of the treasury; and state treasurer are authorized to revise their respective budgets and personnel authorizations within the appropriations made in the appropriations act and to submit those revised summaries to the commissioner of finance and administration, who shall approve the work program of those agencies, if within the amounts appropriated.

Acts 1937, ch. 33, § 22; C. Supp. 1950, § 255.22; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 9-608; T.C.A. § 9-6-110; Acts 2013, ch. 454, § 33.

9-4-5111. Reserve allotment.

  1. In order to provide some degree of flexibility to meet emergencies arising during each fiscal year in the expenditures for operation and maintenance of the various departments, offices and agencies of state government, the commissioner of finance and administration, with the approval of the governor, may require the head of each department, office, or agency, in making the original allotments, to set aside a reserve, the exact amount of which shall be determined by the commissioner of finance and administration, of the total amount appropriated to the department, office, or agency.
  2. At any time during the fiscal year, this reserve or any portion of it may be returned to the appropriation to which it belongs and may be added to any one (1) or more of the allotments; provided, that the commissioner deems such action necessary, and any unused portion thereof shall remain at the end of the fiscal year as an unexpended balance of appropriation. Any unexpended and unencumbered balance of allotments at the end of each quarter shall be credited to the reserve set up for the fiscal year.
  3. During fiscal year 2020-2021, before requiring each head to set aside a reserve pursuant to subsection (a) or otherwise reserving allotments pursuant to this section, the commissioner of finance and administration shall submit written notice of the proposed reserve allotment to the speakers of the senate and the house of representatives and to the chairs of the finance, ways and means committees of the senate and house of representatives. No such allotments shall be reserved until the speakers and chairs have acknowledged in writing receipt of such written notice. When submitted, a copy of the notice shall be provided to the fiscal review committee executive director and the office of legislative budget analysis directors for information purposes. A proposed reserve allotment shall not be acknowledged by the chairs during a time that the general assembly is in regular, annual session until each finance, ways and means committee has held a hearing on the proposed allotment, or the committees have held a joint hearing.

Acts 1937, ch. 33, § 22; C. Supp. 1950, § 255.22; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 9-609; T.C.A. § 9-6-111; Acts 2020, ch. 759, § 14.

Amendments. The 2020 amendment added (c).

Effective Dates. Acts 2020, ch. 759, § 18. June 30, 2020.

Attorney General Opinions. Creation of reserves, OAG 93-06, 1993, Tenn. AG LEXIS 6 (1/14/93).

9-4-5112. Revision of work programs.

  1. The head of any department, office, or agency of the state government, whenever such head deems it necessary by reason of changed conditions, may revise the work program of such head's department, office, or agency at the beginning of any quarter during the fiscal year, and submit such revised program to the commissioner of finance and administration, with such head's request for a revision of the allotments of the remaining quarters of that fiscal year. If, upon such reexamination of the work program, the commissioner, with the approval of the governor, decides to grant the request for the revision of the allotments, the same procedure, so far as it relates to review, approval, and control, shall be followed as in the making of the original allotments.
  2. Revisions to the work programs of the secretary of state, comptroller of the treasury, and state treasurer shall be approved by the commissioner of finance and administration if submitted in accordance with the appropriations act, if within the amounts appropriated, and if submitted with the concurrence of the speaker of the senate and the speaker of the house of representatives.

Acts 1937, ch. 33, § 22; C. Supp. 1950, § 255.22; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 9-610; T.C.A. § 9-6-112; Acts 2013, ch. 454, § 34.

9-4-5113. Certification of funds to meet obligations.

  1. No department or officer under such department shall enter into any contract, agreement, or obligation, involving the expenditure of money, unless the commissioner of finance and administration shall first certify that there is a balance in the appropriation from which such obligation is required to be paid, that is not otherwise encumbered to pay obligations previously incurred.
  2. Subsection (a) shall not apply to the general assembly, state court system, attorney general and reporter, district attorneys general, district public defenders, office of the post-conviction defender, secretary of state, comptroller of the treasury, and the state treasurer; provided, however, that the chief administrative officer for each of these agencies shall ensure, before entering into any contract, agreement, or obligation involving the expenditure of money, that there is a balance in the appropriation from which such obligation is required to be paid that is not otherwise encumbered to pay obligations previously incurred.
  3. All funds appropriated to the secretary of state, comptroller of the treasury, and state treasurer shall be administered in a ministerial capacity by the department of finance and administration in accordance with budgets and any revisions thereto of the respective entities for which such appropriations are made.

Acts 1923, ch. 7, § 17; Code 1932, § 279; C. Supp. 1950, § 255.22; impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; T.C.A. (orig. ed.), § 9-611; T.C.A. § 9-6-113; Acts 2013, ch. 454, § 24; 2014, ch. 917, § 3.

9-4-5114. Obligations after fiscal year prohibited — Allotments required.

No appropriation shall confer authority to incur an obligation after the termination of the fiscal year to which it relates. No appropriation to any state department, institution, office, or agency, excepting the general assembly, shall become available for expenditure until allotted upon the basis of a work program, duly approved by the governor, as provided in §§ 9-4-51109-4-5112.

Acts 1937, ch. 33, § 25; C. Supp. 1950, § 255.25; T.C.A. (orig. ed.), § 9-612; T.C.A. § 9-6-114.

Cross-References. Appropriation of public moneys, Tenn. Const., art. II, § 24.

Attorney General Opinions. As a general matter, absent the enactment of an appropriations bill for a fiscal year, there is no authority in most circumstances for the state to spend money, whether generated by the state's own taxing powers or received from other sources such as the federal government, OAG 00-083, 2000 Tenn. AG LEXIS 86 (5/4/00).

9-4-5115. State funds received by local government unit not to be expended for costs of lawsuit against state in which local government unit is plaintiff.

  1. No state funds received by a local government unit shall be expended to pay attorney's fees, court costs, or other expenses attributable to a lawsuit filed against the state, a state agency, or a state official in which the local government unit is named as a plaintiff. If the state, agency, or official prevails in the lawsuit, then the department of finance and administration shall deduct from the local government unit's allocation of state-shared taxes, in the case of a city or county, or allocation of funds based on the Basic Education Program (BEP) formula, in the case of an LEA, such sum or part of such sum to recover attorney's fees, court costs, and other expenses attributable to defending the state in the lawsuit.
  2. As used in this section, “local government unit” means a county, municipality, or local education agency (LEA) as defined in § 49-1-103.

Acts 2015, ch. 425, § 4.

9-4-5116. Abortion funding.

No state funds shall be expended to perform abortions. The limitations established in this section shall not apply to an abortion if:

  1. The pregnancy is the result of an act of rape or incest; or
  2. In the case where a woman suffers from a physical disorder, physical injury, or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that would, as certified by a physician, place the woman in danger of death unless the abortion is performed.

Acts 2003, ch. 355, § 67.

Compiler's Notes. Acts 2003, ch. 355, § 66 provided that no expenditure of public funds pursuant to the act shall be made in violation of the provisions of Title VI of the Civil Rights Act of 1964, as codified in 42 U.S.C. § 2000d.

Collateral References.

Validity of state statutes and regulations limiting or restricting public funding for abortions sought by indigent women. 118 A.L.R.5th 463.

9-4-5117. Certification of board fees — Regulatory fees.

  1. Notwithstanding any law to the contrary, upon receiving from the commissioner of finance and administration the approved work program, as provided in § 9-4-5110, for the department of commerce and insurance, division of regulatory boards, and department of health, division of health-related boards, the commissioners of those departments shall certify by October 31 to the commissioner of finance and administration and, as applicable, to the director of the division of regulatory boards, as defined in § 4-3-1304, and to the director of the division of health-related boards, as defined in § 63-1-131, the total amount of board fee revenue required by each board for the current fiscal year, based on the approved work program. The commissioners of commerce and insurance and of health shall include the direct costs allocated to each board for the then-current fiscal year and shall reduce the certified amount by the amount of any excess fees from the immediately preceding two-year period, it being the legislative intent that fees and expenditures should be equal over a two-year period for each board, as provided in § 4-29-121. Such certification shall not preclude the retention of any board fee revenue estimated to be required for support of each board's operation for the then-current two-year period.
    1. The fee established pursuant to the amounts certified as set forth in subsection (a) shall be designated as the board fee.
    2. In addition to the board fee, each regulatory board shall also assess a state regulatory fee in such amount as is set each year in the general appropriations act. The state regulatory fee shall be in lieu of any allocation of indirect costs that would otherwise be allocated to such boards.
    1. Within sixty (60) days after receiving the certification of the amount of fees required by each board, the director of the division of regulatory boards and the director of the division of health-related boards shall provide the commissioner of finance and administration with an official estimate of fees to be collected by each board for the fiscal year.
    2. To the extent the estimate of fees for an individual board is less than the certified amount, the appropriation for that board shall be reduced in the amount of the deficiency, and the commissioner of finance and administration is directed to reduce the budget of the board accordingly.
    3. The general assembly may supplement any board's appropriation from fee revenue by an appropriation of tax revenue by making a specific appropriation of such tax revenue in the general appropriations act.

Acts 1989, ch. 523, § 1; 2012, ch. 714, § 1; 2013, ch. 454, §§ 10-13; T.C.A. § 4-3-1011.

9-4-5118. State funds not to be expended to pay municipality’s public indebtedness.

  1. No state funds shall be expended to pay the public indebtedness of any municipality; provided, however, that this subsection (a) does not preclude any municipality from utilizing its allocation of state-shared taxes for the purpose of paying its public indebtedness.
  2. As used in this section, unless the context otherwise requires:
    1. “Public indebtedness” means the bonds, notes or other evidence of indebtedness lawfully issued or assumed;
    2. “State departmental revenues” means:
      1. Earnings or charges for goods or services; or
      2. Donations, contributions or participation by political subdivisions, foundations, corporations, firms or persons;
    3. “State funds” means state departmental revenues or state revenues;
    4. “State revenues” means the proceeds collected from taxes, licenses, fees, fines, forfeitures or other imposts laid specifically by law for state government; and
    5. “State-shared taxes” means taxes imposed and collected by the state pursuant to law and allocated by law among units of local government.
  3. This section shall not be construed as limiting the authority provided in chapter 13, part 2 of this title or chapter 21, part 7 of this title.

Acts 2014, ch. 853, § 1.

Compiler's Notes. Pursuant to Article III, Section 18 of the Constitution of Tennessee, Acts 2014, ch. 853 took effect on April 29, 2014.

9-4-5119. Prohibited use of state funds by University of Tennessee — Use of funds in budget of office of diversity and inclusion.

  1. State funds shall not be expended by the University of Tennessee to promote the use of gender neutral pronouns, to promote or inhibit the celebration of religious holidays, or to fund or support sex week.(b)  All funds in the budget of the office for diversity and inclusion at the University of Tennessee, Knoxville, for fiscal year 2016-2017, shall be reallocated in the university's budget and used by the university solely for scholarships to be awarded through a minority engineering scholarship program. Any funds from the budget of the office for diversity and inclusion that are not used for minority engineering scholarships in fiscal year 2016-2017 shall remain in the scholarship program for use in future fiscal years.

Acts 2016, ch. 1066, §§ 1, 2.

Compiler's Notes. Acts 2016, ch. 1066, § 1 provided that the act take effect upon becoming a law, the public welfare requiring it. The act was returned without the governor's signature and became effective on May 20, 2016, under the provisions of Tenn. Const., art. III, § 18.

Part 52
Estimated Rate of Growth of Economy; Limitation on Appropriations

9-4-5201. Basis for estimated rate of growth of economy.

  1. The estimated rate of growth of the state's economy shall be based upon the projected change in Tennessee personal income.
  2. Tennessee personal income shall consist of those sources of income included in the United States department of commerce's definition of “personal income.”

Acts 1979, ch. 408, § 1; T.C.A., §§ 9-621, 9-6-201.

Cross-References. General assembly to determine rate of growth of expenditures, Tenn. Const., art. II, § 24.

9-4-5202. Reports of estimated rate of growth of economy — Duties of state funding board.

  1. At least once each year, and whenever requested to do so by the commissioner of finance and administration or by the joint request of the chairs of the finance, ways and means committees of the senate and house of representatives, the state funding board shall secure from the Tennessee econometric model a report of the estimated rate of growth of the state's economy. Such report shall include the major assumptions and the methodology used in arriving at such estimate.
  2. Upon receiving the report specified in subsection (a), the state funding board shall make comments relating to the reasonableness of the estimate, including any different estimate the board deems necessary. The board shall also enclose a list identifying state tax revenue sources and nontax revenue sources, approved by the attorney general and reporter. The department of finance and administration shall provide to the board revenue estimates for each source. The department of revenue shall provide to the board estimates of growth in franchise and excise tax revenue and include in the estimates a description of whether the growth is nonrecurring or recurring.
  3. In the event data from Tennessee econometric model is unavailable, the funding board, after consulting with the finance, ways and means committees of the senate and house of representatives, shall obtain and/or prepare a report of the estimated rate of growth of the state's economy.
  4. The reports specified in subsections (a), (b) and (c) shall be forwarded to the commissioner of finance and administration and to each member of the general assembly, after review and definitive comment by the finance, ways and means committees of the senate and house of representatives.
    1. In November of each year, the state funding board shall conduct public hearings to develop estimates of state revenue for the upcoming fiscal year, as well as any revisions to the current fiscal year estimates, as the board deems appropriate. All estimates shall be adopted by a majority vote of the entire board.
    2. The funding board shall request economic forecasts and revenue estimates from representatives of state higher education institution business centers located in each of the grand divisions and such other groups or persons as the funding board deems appropriate.
    3. On December 1, or as soon thereafter as practical, the funding board shall present its state revenue estimates, together with a summary of the economic forecast upon which the estimates are based, to the governor and the chairs of the finance, ways and means committees of the senate and house of representatives. If, in the opinion of the funding board, circumstances warrant a review of state revenue estimates it has previously presented, or upon a request of the chairs, the funding board shall consider information it deems necessary and appropriate and may revise its state revenue estimates if appropriate. Any revision to its revenue estimates and reasons therefor shall be forwarded to the governor and chairs.
    4. The funding board shall identify and report in its presentation of state revenue estimates whether any growth in franchise and excise tax revenue is nonrecurring or recurring.

Acts 1979, ch. 408, § 2; T.C.A., § 9-622; Acts 1993, ch. 303, § 1; T.C.A. § 9-6-202; Acts 2015, ch. 92, §§ 1, 2; 2018, ch. 1031, § 1.

Cross-References. Grand divisions, title 4, ch. 1, part 2.

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

Attorney General Opinions. Appropriations, constitutional limit on growth, OAG 94-92, 1994 Tenn. AG LEXIS 93 (8/26/94).

9-4-5203. Governor's budget document — Appropriations exceeding growth of state's economy — Bills — Index.

  1. The budget document presented by the governor to the general assembly shall include a statement or showing projecting Tennessee personal income as provided in § 9-4-5201, for the ensuing fiscal year, for the calendar year in progress, for the fiscal year in progress, for the latest completed calendar year, and for calendar year 1977.
  2. The budget document presented by the governor shall also include a statement or a summary showing recommended appropriations from state tax revenues for the ensuing fiscal year, such actual appropriations for the fiscal year in progress, and the 1977-1978 fiscal year appropriations from state tax revenues.
    1. When in any budget document the percentage increase of recommended appropriations from state tax revenues exceeds the percentage increase of estimated Tennessee personal income as defined in § 9-4-5201, for the ensuing fiscal year, the governor shall submit a bill or bills for introduction in both houses of the general assembly which shall contain no other subject matter and shall set forth the dollar and percentage by which the estimated growth of the state's economy is exceeded by the appropriations of state tax revenue in accordance with the Constitution of Tennessee, Article II, § 24.
    2. For purposes of determining compliance with this section and with the Constitution of Tennessee, Article II, § 24:
      1. Funds allocated to the reserve for revenue fluctuations shall not be included as appropriations from state tax revenues; and
      2. Funds expended from the reserve for revenue fluctuations to offset shortfalls in state tax revenue in accordance with § 9-4-211(b) shall not be included as appropriations from state tax revenues.
  3. When the percentage increase of appropriations of state tax revenue by the general assembly exceeds the percentage increase of estimated Tennessee personal income as defined in § 9-4-5201, for the ensuing fiscal year, the general assembly shall by law containing no other subject matter, set forth the dollar and the percentage by which the estimated growth of the state's economy is exceeded by the appropriations of state tax revenue in accordance with Constitution of Tennessee, Article II, § 24.
    1. The index of appropriations from state tax revenues for the 2011-2012 fiscal year may exceed the index of estimated growth in the state's economy by two hundred fifty million dollars ($250,000,000) or two and one one-hundredths percent (2.01%).
    2. The index of appropriations from state tax revenues for the 2012-2013 fiscal year may exceed the index of estimated growth in the state's economy by one hundred thirty-two million five hundred thousand dollars ($132,500,000) or one percent (1.0%).
    3. The index of appropriations from state tax revenues for the 2016-2017 fiscal year may exceed the index of estimated growth in the state's economy by four hundred thirty-eight million dollars ($438,000,000) or two and eighty-five hundredths percent (2.85%).
    4. The index of appropriations from state tax revenues for the 2019-2020 fiscal year may exceed the index of estimated growth in the state's economy by six hundred twenty-nine million dollars ($629,000,000) or three and six-tenths percent (3.6%).

Acts 1979, ch. 408, § 3; T.C.A., § 9-623; Acts 1984 (1st Ex. Sess.), ch. 9, § 1; 1984 (1st Ex. Sess.), ch. 11, § 1; 1985, ch. 446, § 1; 1985, ch. 447, § 1; 1986, ch. 938, § 1; 1989, ch. 577, § 1; 1989, ch. 578, § 1; 1991, ch. 520, § 1; 1992, ch. 1004, § 1; 1997, ch. 512, § 1; T.C.A. § 9-6-203; Acts 1999, ch. 402, § 1; 2000, ch. 992, § 1; 2002, ch. 857, § 1; 2004, ch. 960, § 1; 2007, ch. 589, § 1; 2007, ch. 590, § 1; 2009, ch. 553, § 1; 2010, ch. 1110, § 1; 2011, ch. 471, § 1; 2012, ch. 1025, § 1; 2013, ch. 451, § 1; 2017, ch. 463, § 1; 2018, ch. 689, § 1; 2020, ch. 650, § 1.

Code Commission Notes.

Former subsection (e), concerning the amount by which the index of appropriations from state tax revenues may exceed the index of estimated growth in the state’s economy in fiscal years 1984-2011, was deleted as obsolete by the code commission in 2012.

Compiler's Notes. The history of § 9-4-5203(e), indicating by fiscal year the dollar amount and percentage by which the index of appropriations from state tax revenues may exceed the index of estimated growth in the state’s economy, is set out in the table below.

Rate of Growth of Appropriations  Above Year-to-Year Economic Growth Rate (Millions) Fiscal Year Dollars Rate Public Act 1984-1985 $ 186.5 6.87% Acts 1984 (1st E.S.), ch. 11 1984-1985 396.1 14.60% Acts 1985, ch. 447  1985-1986 58.0 1.79% Acts 1985, ch. 446 1986-1987 100.0 2.76% Acts 1986, ch. 938 1988-1989 101.0 2.38% Acts 1989, ch. 577 1989-1990 74.0 1.59% Acts 1989, ch. 578 1991-1992 703.1 15.09% Acts 1991, ch. 520 1992-1993 450.0 8.69% Acts 1992, ch. 1004 1996-1997 55.0 0.84% Acts 1997, ch. 512 1999-2000 189.0 2.13% Acts 1999, ch. 402 1999-2000 81.0 1.00% Acts 2000, ch. 992 2002-2003 771.0 9.27% Acts 2002, ch. 857 2003-2004 275.0 2.91% Acts 2004, ch. 960 2006-2007 46.0 0.39% Acts 2007, ch. 589 2007-2008 57.3 0.46% Acts 2007, ch. 590 2009-2010 248.5 2.25% Acts 2009, ch. 553 2010-2011 126.6 1.10% Acts 2010, ch. 1110 2010-2011 250.0 2.15% Acts 2011, ch. 471 2011-2012 250.0 2.01% Acts 2012, ch. 1025 2012-2013 132.5 1.00% Acts 2013, ch. 451 2016-2017 438.0 2.85% Acts 2017, ch. 463 2019-2020 629.0 3.6% Acts 2020, ch. 650

Click to view Rate of Growth of Appropriations Above Year-to-Year Economic Growth Rate(Millions)

For the Preambles to the acts pursuant to Tenn. Const. art. II, § 24 providing for the dollar amount and rate by which the growth of appropriations from state tax revenues will exceed the estimated growth in the state's economy and to amend title 9, chapter 4, part 52, please refer to Acts 2007, chs. 589 and 590.

Amendments. The 2020 amendment added (e)(4).

Effective Dates. Acts 2020, ch. 650, § 2. April 2, 2020.

Cross-References. Rate of growth of appropriations limited, Tenn. Const., art. II, § 24.

Attorney General Opinions. Both the Tenn. Const., art. II, § 24 and T.C.A. § 9-4-5203 require officials to determine the percentage increase in “appropriations from state tax revenues” from the previous fiscal year in preparing the budget for each fiscal year, OAG 07-126, 2007 Tenn. AG LEXIS 126 (8/27/07).

Part 53
State Sharing

9-4-5301. Statutes providing base apportionment for determining additional state revenues.

Funds apportioned as state-shared taxes to county and municipal governments for any fiscal year under authority of the following statutes shall provide the base apportionment for the purpose of determining the availability of additional state revenues to meet the requirement of the Constitution of Tennessee, Article II, § 24 that the state share in the cost of any law of general application imposing increased expenditure requirements on cities and counties:

  1. Retailers' sales tax, as authorized by title 67, chapter 6, and apportioned by § 67-6-103;
  2. Gross receipts taxes, such portions as are authorized as payments to the state from the Tennessee Valley authority under § 13 of the act of congress creating the authority, as amended, and apportioned under §§ 67-9-101(a)(2) and 67-9-102(a);
  3. Income tax on dividends and interest, as authorized by title 67, chapter 2, and apportioned by § 67-2-119;
  4. Special privilege tax on beer, as authorized by title 57, chapter 5, and apportioned by § 57-5-205;
  5. Gross receipts tax on alcoholic beverages consumed on premises, as authorized by title 57, chapter 4, and apportioned by § 57-4-306; and
  6. Tax on sale or distribution of wine and spirits, as authorized by title 57, chapter 3, and apportioned by § 57-3-306.

Acts 1979, ch. 436, § 1; T.C.A., §§ 9-631, 9-6-301; Acts 2014, ch. 901, § 3.

Compiler's Notes. Section 13 of the Tennessee Valley Authority Act 1933, referred to in this section, is codified in 16 U.S.C. § 831l.

Cross-References. State prohibited from imposing increased costs on local governments without sharing in costs, Tenn. Const., art. II, § 24.

9-4-5302. Governor's budget to show increase in apportionment — Amount of increase available to local governments.

  1. Beginning with fiscal year 1980-1981, the budget document submitted by the governor to the general assembly shall indicate the amount of increase in the apportionment of the funds specified in § 9-4-5301 to incorporated municipalities and to county governments above apportionments for the previous year.
  2. An amount of one million dollars ($1,000,000) of such increase shall be available for allocation to incorporated municipalities and to county governments as needed, to provide the state's share of any contribution required to fund any law of general application which requires, without local discretion, that incorporated municipalities or county governments increase expenditures as a direct consequence of the passage of any general law; provided, that when the cost of any such law is estimated to exceed fifty thousand dollars ($50,000), the source and amount of funding from state funds shall be set forth in such law.
  3. In the event the source and amount of funding from state funds is not set forth in such law, such sources and amounts shall be set forth in the general appropriations act enacted during the same session as such general law.

Acts 1979, ch. 436, § 2; T.C.A., §§ 9-632, 9-6-302.

9-4-5303. List of laws requiring increased local government expenditures — Report of allocations required to provide funding.

  1. Prior to approval of the general appropriation act by committees on finance, ways and means of the senate and the house of representatives, the commissioner of finance and administration shall certify in writing to the chairs of those committees a listing of all laws of general application which have been adopted and signed by the governor, whose passage will require increased incorporated municipality expenditures or county government expenditures within the meaning of the fourth paragraph of the Constitution of Tennessee, Article II, § 24.
  2. Such certification shall, to the extent possible, cite the specific costs attributed to each law by the fiscal notes prepared by the fiscal review committee, with such adjustments as are necessary to reflect the effect of any amendments or other changing circumstances.
  3. Following receipt of such certification from the commissioner, the committees shall report in writing to the speakers of the house of representatives and the senate, with copy to the commissioner and the comptroller of the treasury, the extent of allocations from the increases in the funds identified in § 9-4-5301 required to provide the state's share of the funding of any such incorporated municipality expenditure increase or county government expenditure increase.
  4. Any law of general application requiring increased incorporated municipality expenditures or increased county government expenditures which passes and is signed following the certification required by this section shall be identified in like manner in a supplemental certification to the committees, which shall file with the speakers, with copy to the commissioner and the comptroller of the treasury, a cumulative report indicating total assessments against such increases identified in § 9-4-5302.

Acts 1979, ch. 436, § 3; T.C.A., §§ 9-633, 9-6-303.

9-4-5304. Procedure for meeting requirement that state share increased expenditures.

For any bill requiring increased expenditures by cities and counties in an amount exceeding that level established in § 9-4-5302, the general assembly shall follow the procedure established in this section in meeting the requirement that the state share in the cost of such bill:

  1. A fiscal note prepared by the fiscal review committee shall be furnished indicating the fiscal effect of such bill and whether or not such legislation imposes an increased expenditure requirement on cities and counties;
  2. If the legislation imposes an increased expenditure requirement on cities or counties, then such legislation shall be amended in committee to indicate the state share of such expenditure;
  3. The sponsor of such legislation shall cause an amendment to the general appropriations act to be prepared to fund the state share and shall present such amendment to the standing committee to which such legislation is referred and to the finance, ways and means committees or on the floor of the senate or the house of representatives when the general appropriations act is being considered; and
  4. Such amendment to the general appropriations act shall state the amount appropriated to fund the state share.

Acts 1979, ch. 436, § 4; T.C.A., §§ 9-634, 9-6-304.

Cross-References. General assembly to provide for state sharing in cost of mandated expenditures of local governments, Tenn. Const., art. II, § 24.

9-4-5305. Construction of this part.

Nothing in this part shall be construed to reduce the apportionment to local governments of the total amounts due under the statutes cited in § 9-4-5301.

Acts 1979, ch. 436, § 6; T.C.A., §§ 9-635, 9-6-305.

9-4-5306. Locality does not meet municipality requirements.

  1. Notwithstanding any law to the contrary,

    IF, after July 1, 1998, a locality is deemed by the state to be a municipality for purposes of distributing grants or state-shared taxes; AND

    IF, thereafter the locality, acting in good faith and under color of law and for municipal purposes, receives and expends or obligates grants or state-shared taxes; AND

    IF, thereafter it is judicially determined that the locality was not incorporated in accordance with the requirements of law and, therefore, is not a municipality; THEN

    Neither the locality nor any person who acted on behalf of the locality is required to return or repay such grants or state-shared taxes; however, subject to § 67-5-104(c), any portion of such grants or state-shared taxes, that remains unexpended and unobligated, shall become assets of the county.

  2. As used in subsection (a), “the locality, acting in good faith and under color of law and for municipal purposes, … expends” includes, but is not limited to, reimbursement paid from grants or state-shared taxes for documented, reasonable expenses of municipal incorporation that were paid out-of-pocket by one (1) or more residents acting on behalf of the locality and its incorporation.

Acts 2000, ch. 898, § 1.

Cross-References. Locality does not meet municipality requirements, § 67-5-104.

Part 54
Block Grant Review Act of 1996

9-4-5401. Short title.

This part shall be known and may be cited as the “Block Grant Review Act of 1996.”

Acts 1996, ch. 1062, § 1; T.C.A. § 9-6-401.

9-4-5402. Purpose.

The purpose of this part is to require state agencies to act with deliberate planning and with maximum feasible input of concerned citizens, religious congregations, nonprofit agencies and service providers and their clients/customers and board members and local government officials, in implementing reorganizations and new priority decisions related to receipt of federal block grants or other state decisions related to the devolution of policy and funding decisions from the federal government to the state.

Acts 1996, ch. 1062, § 2; T.C.A. § 9-6-402.

9-4-5403. Considerations in block grants and federal devolution.

To the greatest extent practicable and as permitted by law, each state agency shall make block grant and federal devolution decisions based on the following principles:

  1. Minimizing harmful impacts on current programs, current and potential recipients of assistance, local governments, nonprofit agencies and the state economy;
  2. Ensuring formal and informal participation of concerned citizens, regulated industry or other entities, environmental groups, religious organizations, nonprofit agencies and service providers and their clients/customers and board members and local government officials in proposed reorganizations and new priority decisions, so that their experience may be used creatively by state decision makers; and
  3. Providing the above-referenced groups and categories of citizens with full and prompt access to information on new policy and funding and program organization related to block grants and federal devolution of authority.

Acts 1996, ch. 1062, § 3; T.C.A. § 9-6-403.

9-4-5404. Reporting requirements.

Each state agency responsible for making or recommending decisions on block grants and related topics shall issue a written report by February 1 each year to the finance, ways and means committee of the senate; and the finance, ways and means committee of the house of representatives; the health and welfare committee of the senate; the health committee of the house of representatives; the energy, agriculture and natural resources committee of the senate; the agriculture and natural resources committee of the house of representatives; the legislative office of budget analysis; and the governor. This report shall detail block grant and federal devolution decisions made or recommended by the agency and how those decisions made or recommended implement or fail to implement the principles outlined in § 9-4-5403. Each agency that submits this report shall include in the report an executive summary of the major priority decisions and reorganizations related to receipt of the federal block grants or federal devolution decisions.

Acts 1996, ch. 1062, § 4; T.C.A. § 9-6-404; Acts 2010, ch. 1030, § 10; 2011, ch. 410, § 3(b); 2012, ch. 604, § 8; 2013, ch. 236, § 83; 2016, ch. 797, § 1.

Compiler's Notes. For the Preamble to the act concerning the prohibition against establishment of a special committee if there is a standing committee on the same subject, please refer to Acts 2011, ch. 410.

9-4-5405. Compliance — Financial costs.

The head of each state agency shall be responsible for ensuring compliance with this part, with the financial costs of compliance being assumed by each state agency.

Acts 1996, ch. 1062, § 5; T.C.A. § 9-6-405.

Part 55
[Reserved]

Part 56
Tennessee Governmental Accountability Act of 2013

9-4-5601. Short title.

This part shall be known and may be cited as the “Tennessee Governmental Accountability Act of 2013.”

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 7.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5602. Implementation of system of strategic planning, performance measures, and performance review.

The general assembly finds and declares that accountability in program performance is vital to effective and efficient delivery of governmental services, and to maintain public confidence and trust in government. To maximize accountability, a system of strategic planning, program performance measures, and performance audits should be implemented to measure the effectiveness and efficiency of governmental services. It is of paramount public importance that this system encourages full and candid participation by all agencies of state government. This system will generate information necessary to inform the public fully and for the general assembly to make meaningful decisions about the allocation of scarce resources in meeting vital needs.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 8.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5603. Application.

The strategic planning, program performance measures, and performance review requirements of this part shall apply to all agencies unless exempted in this part or exempted by the commissioner of finance and administration.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 9.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5604. Part definitions.

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

  1. “Agency” or “state agency” means any unit organization of the executive department, including any official, department, board, commission, division, bureau, section, district, office, authority, committee, or council or any other unit of state government, however designated, including, without limitation, higher education. For purposes of this part, “agency” or “state agency” shall not include the governor's office, the judicial department, the comptroller of the treasury state treasurer, secretary of state, attorney general and reporter or the legislative department. For purposes of this part, “judicial department” means the court system, district attorneys general conference, district public defenders conference, and the office of post-conviction defender;
  2. “Baseline data” means indicators of a state agency's current performance level, pursuant to guidelines established by the commissioner of finance and administration;
  3. “Commissioner” means the commissioner of finance and administration;
  4. “Outcome” means an indicator of the actual impact or public benefit of a program;
  5. “Output” means the actual service or product delivered by a state agency;
  6. “Performance measure” means a quantitative or qualitative indicator used to assess state agency performance, including outcome and output indicators;
  7. “Program” means a set of activities undertaken in accordance with a plan of action organized to realize identifiable goals and objectives. These activities are chosen by the department of finance and administration in consultation with the agency or state agency to be measured in order to support the overall goals and objectives of the department; and
  8. “Standard” means the desired level of performance of a program, measured by outcome or output.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 10.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5605. Legislative intent.

  1. It is the legislative intent that the requirements of this part constitute a new approach to measuring the strategic functions and operations of each department in order for the state government to operate more efficiently and effectively.
  2. The comptroller of the treasury shall have authority to employ outside consultants and entities with expertise in governmental finance and performance review for the purpose of conducting performance reviews or otherwise fulfilling the comptroller's duties under this part. The performance reviews required under this part may be conducted by a private entity selected by the comptroller, subject to the competitive bidding requirements of title 12, chapter 4.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 11.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5606. Development of performance measures and standards — Submission of strategic plan and proposed performance measures and standards.

  1. The commissioner of finance and administration shall annually issue instructions for the strategic plans and for the development of performance measures and standards for each program.
  2. By August 15 of each year, each state agency subject to this part is required to submit to the commissioner of finance and administration, in a form to be specified by the commissioner, a draft strategic plan and proposed performance measures and standards for each program. Such state agencies shall also identify the outputs or outcomes produced by each program, baseline data associated with each performance measure, and performance standards. Performance measures and standards shall be reviewed by the commissioner of finance and administration and revised as deemed necessary by the commissioner of finance and administration.
  3. Each state agency subject to this part shall submit to the commissioner of finance and administration any documentation required by the commissioner regarding the validity, reliability, and appropriateness of each performance measure and standard and regarding how the strategic plan and the performance measures are used in management decision-making and other agency processes.
    1. Annually, at a time to be determined by the commissioner of finance and administration after the general appropriations act becomes law, state agencies may submit to the commissioner any adjustments to their performance measures and standards based on the amounts appropriated for each program by the general assembly. The chairs of the finance, ways and means committees of the senate and the house of representatives may request updated performance measures based on the increase or decrease of appropriations in the given year.
    2. At any time during the fiscal year in which a state agency, by restraining order, injunction, consent decree, settlement, or any final judgment of a court of competent jurisdiction, or by law or executive order, is required to modify its operations, or the state agency receives additional federal or other funding, the state agency may submit to the commissioner of finance and administration any necessary adjustments to its performance measures and standards.
    3. When an adjustment is made pursuant to subdivisions (d)(1) and (2), all performance measures and standards, including any adjustments made, shall be submitted to and reviewed and revised as necessary by the commissioner of finance and administration. The commissioner shall maintain the official record of adjustments to the performance measures and standards and shall update the reports accordingly. Programs that have been eliminated or added from the report in a given year shall be indicated in the annual report or when the report is updated.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 12.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5607. [Reserved.]

  1. The commissioner of finance and administration shall evaluate at least annually each state agency's strategic plan and program performance measures. When necessary the commissioner of finance and administration shall update each state agency's strategic plan and program performance measures. Such updates shall include comments from the state agency when necessary to explain how the program is performing.
  2. The commissioner of finance and administration may make recommendations to the governor and the finance, ways, and means committees of the senate and the house of representatives concerning the following nonexhaustive performance measure incentives or disincentives for potential inclusion in the appropriations bill:
    1. Incentives may include, but are not limited to:
      1. Additional flexibility in budget management;
      2. Additional flexibility in salary rate and position management, notwithstanding title 8, chapter 23, or any other law to the contrary;
      3. Retention of up to fifty percent (50%) of unexpended and unencumbered balances of appropriations, excluding special categories and grants in aid, that may be used for nonrecurring purposes including, but not limited to, lump-sum bonuses, employee training, or productivity enhancements, including technology and other improvements; and
      4. Additional funds to be used for, but not limited to, lump-sum bonuses, employee training, or productivity enhancements, including technology and other improvements;
    2. Disincentives may include, but are not limited to:
      1. Mandatory quarterly reports to the governor on the agency's progress in meeting performance standards;
      2. Mandatory quarterly appearances before the governor to report on the agency's progress in meeting performance standards;
      3. Elimination or restructuring of the program, which may include, but not be limited to, transfer of the program or outsourcing all or a portion of the program;
      4. Reduction of total positions for a program;
      5. Restriction on or reduction of the appropriation for the program; and
      6. Reduction of managerial salaries, notwithstanding the requirements of title 8, chapter 23, or any other law to the contrary.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 14.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5609. Preparation of strategic plan.

    1. Beginning August 15, 2013, and each year thereafter, each state agency subject to this part, shall submit a draft strategic plan and the agency's programs chosen for the program performance measures to the department of finance and administration for review, modification, and approval. Each strategic plan and program performance plan shall be submitted to the general assembly and the governor not later than September 30 of each year and shall cover the fiscal year in effect as of the date of the report.
    2. The programs report shall include, but not be limited to, the following matters:
      1. A clear statement of the purpose for each program;
      2. A description of the program, when such information is needed to explain the program;
      3. The funding amount of each program, when such information is identifiable by agency;
      4. The outcomes or outputs produced by each program; and
      5. The historical trends of outputs or outcomes of the program, when such information is available.
      1. The Tennessee higher education commission shall submit to the commissioner of finance and administration a single strategic plan, with the advice of the University of Tennessee, the state university and community college system, and the Tennessee student assistance corporation.
      2. The comptroller of the treasury, state treasurer, secretary of state, and attorney general and reporter shall prepare their strategic plans separately.
      3. The administrative office of the courts shall prepare a strategic plan separately on behalf of the court system. Such plan shall include the court system, the district attorneys general conference, the district public defenders conference, and the office of post-conviction defender.
      4. The joint legislative services committee shall prepare a strategic plan separately on behalf of the legislative department.
    1. Each strategic plan shall be submitted to the general assembly and the governor not later than September 30 of each year and shall cover the fiscal year in effect as of the date of the report.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 15.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

9-4-5610. Performance review.

  1. Each state agency shall be subject to a performance review of its activities by the comptroller of the treasury.
  2. The performance review shall include such matters as the comptroller of the treasury deems appropriate related to the manner in which the entity is delivering its services and achieving its objectives, including but not limited to:
    1. The efficient use of all state and federal resources and user fees;
    2. Additional non-state revenue or cost savings that the entity could achieve; and
    3. The extent to which the entity has achieved the objectives of its strategic plan.
  3. Each entity subject to a performance review shall cooperate fully with the comptroller of the treasury and shall timely provide all relevant documents and requested information. If any entity refuses to provide any requested documents or information, the comptroller shall include such refusal in its report, as well as the reasons given by the entity for not furnishing the documents or information.

Acts 2002, ch. 875, § 1.

9-4-5611. Admissibility of information in judicial proceeding or administrative hearing.

  1. Notwithstanding subsection (c), to achieve full and candid participation in the planning and audit process, no strategic plan or performance review, or any information generated solely for or by any such plan or review, shall be admissible in any judicial proceeding or administrative hearing.
  2. Any documents or information referenced in any such plan or audit that exist independently of the planning and review process shall not be subject to the prohibition of subsection (a). The admissibility of such documents and information shall be determined in accordance with the rules of evidence and standards otherwise applicable to any such proceeding.
  3. Each strategic plan and performance review shall be a public record under title 10, chapter 7.

Acts 2002, ch. 875, § 1.

9-4-5612. Proposed instructions for the development of performance measures for the legislature.

The director of the office of legislative administration shall develop and submit to the joint legislative services committee proposed instructions for the development of performance measures for the legislative department. The joint legislative services committee shall review such proposed instructions, may revise or amend the proposed instructions, and shall adopt final instructions for the development of such performance measures.

Acts 2002, ch. 875, § 1; 2013, ch. 243, § 16.

Compiler's Notes. Acts 2013, ch. 243, § 1 provided that the act, which amended this section, shall be known and cited as the “Tennessee Governmental Accountability Act of 2013.”

Part 1
Establishment and Operation of Board

9-8-101. Board established — Membership — Chair — Claims not within jurisdiction.

  1. A board of claims whose membership is composed of the commissioner of human resources or such commissioner's designee, the commissioner of finance and administration or such commissioner's designee, the state treasurer or the state treasurer's designee, the comptroller of the treasury or the comptroller's designee, and the secretary of state or the secretary of state's designee is hereby established.
  2. The state treasurer or the state treasurer's designee shall be the ex officio chair of the board of claims.
  3. Claims arising after January 1, 1985, that do not fall within the jurisdiction of the claims commission may only be paid after approval by the principals of the board of claims.

Acts 1945, ch. 73, § 1; C. Supp. 1950, § 1034.1 (Williams, § 1034.26); Acts 1951, ch. 39, § 1; impl. am. Acts 1959, ch. 9, §§ 3, 14; impl. am. Acts 1972, ch. 829, § 7; Acts 1979, ch. 184, § 1; T.C.A. (orig. ed.), § 9-801; Acts 1981, ch. 154, § 1; 1985, ch. 105, § 12; 1997, ch. 34, § 1.

Compiler's Notes. The board of claims, created by this section, terminates June 30, 2025. See §§ 4-29-112, 4-29-246.

Pursuant to Acts 2007, ch. 60, references to the department of personnel were changed to the department of human resources, effective April 24, 2007.

Cross-References. Levee or drainage district filing petition with board of claims, § 69-5-314.

Textbooks. Tennessee Jurisprudence, 23 Tenn. Juris., State, § 14.

Law Reviews.

Handling Tort Claims Against the State of Tennessee (Lewis L. Laska), 23 Tenn. B.J. 26 (1987).

Moving to Comparative Negligence in an Era of Tort Reform: Decisions for Tennessee (Carol A. Mutter), 57 Tenn. L. Rev. 199 (1990).

Selected Tennessee Legislation of 1986, 54 Tenn. L. Rev. 457 (1987).

Torts — Hurd v. Woolfork: The Public Duty Doctrine in Tennessee, 28 U. Mem. L. Rev. 1279 (1998).

NOTES TO DECISIONS

1. Similar Private Act Constitutional.

Private Acts 1951, ch. 253, authorizing quarterly courts (now legislative bodies) of certain counties to compensate persons damaged by torts of county held constitutional. Griffin v. Davidson County, 194 Tenn. 335, 250 S.W.2d 554, 1952 Tenn. LEXIS 386 (1952).

2. Construction.

Jurisdiction of board of claims to adjudicate claims against state must be strictly construed and cannot be enlarged by implication. Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 1956 Tenn. LEXIS 329 (1956).

3. Nature of Board.

The board of claims is not necessarily a judicial body but is largely a legislative body which is free to exercise through quasi-judicial functions those claims that the legislature has constituted it to exercise through proper legislation. Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 1956 Tenn. LEXIS 329 (1956).

Decisions Under Prior Law

1. Exclusive Remedy Not Created.

Acts 1913, ch. 75, creating a board of claims to determine claims for damages arising out of negligence in maintenance and construction of state highways, is not an exclusive remedy, hence landowner can sue county for damages in consequence of construction of highway. Unioci County v. Barnett, 181 Tenn. 565, 182 S.W.2d 865, 1944 Tenn. LEXIS 278 (1944).

9-8-102. Board attached to department of the treasury — Secretary.

  1. For the purpose of administration, including fiscal and personnel operations, the board is attached to the department of the treasury.
  2. The chair has the authority to designate an employee of the department of the treasury as secretary to the board of claims, who will keep the records and minutes of the board and perform other administrative tasks as assigned by the board.

Acts 1945, ch. 73, § 6; C. Supp. 1950, § 1034.6 (Williams, § 1034.31); impl. am. Acts 1959, ch. 9, § 3; impl. am. Acts 1961, ch. 97, § 3; Acts 1976, ch. 806, § 1(45); T.C.A. (orig. ed.), § 9-802; Acts 1981, ch. 154, § 2; 1986, ch. 626, § 4.

9-8-103 — 9-8-106. [Reserved.]

The functions and responsibilities of the defense counsel commission arising out of incidents occurring after January 1, 1985, are hereby transferred to the board of claims. The board may establish procedures and rules under which these functions and responsibilities may be carried out by a subcommittee of the board. The defense counsel commission shall retain jurisdiction over all requests for counsel and compensation arising out of incidents occurring before January 1, 1985.

Acts 1984, ch. 972, § 15.

Compiler's Notes. Acts 1985, ch. 166, § 1 terminated the defense counsel commission effective April 18, 1985, but continued it for the purposes mandated by this section.

9-8-108. Powers and duties.

  1. The board of claims:
    1. Has the authority, but is not required, to investigate and hear claims and make awards when appropriate in cases based on acts or omissions of state officers or employees where a claim does not fall within the jurisdiction of the claims commission under § 9-8-307(a). The board of claims shall not have jurisdiction over any claim arising under § 9-8-307(a), even though the claimant requests punitive damages and/or damages in excess of those set forth in § 9-8-307(e). No award shall be made unless the board determines that the facts would entitle the claimant to a judgment in action at law. Where the board determines to hear a claim, it may refer the claim to a designee for a hearing and written recommendation to the board on whether or not to make an award. If the recommendation by the designee is against an award or less than the amount requested by the claimant, the claimant shall have the right to an appeal to the board. The board may, in its discretion, hold a hearing or decide the claim on the record. All decisions of the board shall be final;
    2. Is authorized to pay final judgments in civil lawsuits against state employees as provided in § 9-8-112;
    3. Shall review and make recommendations to the commissioner of finance and administration and the general assembly regarding the following:
      1. The required funding of the risk management fund;
      2. The required funding of the claims commission administrative costs; and
      3. Appropriate levels of self-insurance, purchased insurance or any combination thereof for the protection of the state and/or its employees and the required funding for such insurance policies. The recommendation made by the board of claims to the general assembly for excess coverage for the ensuing calendar year pursuant to § 9-8-307(e) may include self-insurance, purchased insurance or any combination of the two (2);
    4. Shall review and approve insurance policies designed to pay claims against the state or its employees arising from contract or tort. This responsibility includes the authority to coordinate the purchase of insurance between the various departments, agencies, and institutions, and all other entities created by the state other than counties and municipal corporations in order that adequate protection be given at the least possible cost;
    5. Has jurisdiction to hear disputes between the various departments and agencies of the state involving the assignment of losses to individual departments, as well as general responsibility to establish policies governing the administration of the state's contract and tort insurance program;
    6. Shall retain consultants as necessary to fully discharge the duties assigned to the board;
    7. Shall hear claims for compensation by persons wrongfully imprisoned and granted exoneration pursuant to § 40-27-109. Any award made by the board pursuant to this subdivision (a)(7) shall be subject to the following conditions:
      1. Compensation payable to such persons shall be determined by the board considering all factors the board considers relevant including, but not limited to, the person's physical and mental suffering and loss of earnings; provided, however, that the maximum aggregate total of such compensation shall not exceed one million dollars ($1,000,000);
      2. Any amount awarded shall be payable in equal monthly installments until paid in full, unless the person dies prior to receipt of the full amount. The amount of the monthly installments payable under this subdivision (a)(7) shall be calculated by dividing the noncommuted amount, determined pursuant to subdivision (a)(7)(D), by the estimated number of months the claimant will live based upon the claimant's life expectancy at the time of the award as determined from the mortality tables last adopted by the board of trustees of the Tennessee consolidated retirement system pursuant to § 8-34-503, or based on such shorter period of time as the board, in its discretion, determines appropriate;
      3. If the person dies without leaving a surviving spouse or surviving minor children, the payments shall cease. Upon the death of the claimant, any monthly installments left remaining shall be paid to the claimant's surviving spouse and surviving minor children in equal portions. The amount payable to the surviving spouse, if any, shall be paid until the surviving spouse's death or remarriage. If the surviving spouse dies or remarries, then the amount that was payable to the surviving spouse shall be divided equally among the claimant's surviving minor children. Each child shall receive such child's share until reaching majority status or death, whichever occurs first, at which time the amount shall be redistributed equally among the remaining minor children. For purposes of this subdivision (a)(7)(C), “minor” means any person who has not attained eighteen (18) years of age;
      4. Upon motion of the claimant or in the discretion of the board, all or a portion of the compensation payable monthly under this subdivision (a)(7) may be commuted to a lump sum payment. In determining whether to commute the compensation, the board shall consider whether there exist special needs warranting such commutation, whether the commutation will be in the best interest of the person and whether that person has the ability to wisely manage and control the commuted award irrespective of whether there exist special needs. The claimant has the burden of proving that a lump sum payment is warranted;
        1. In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that:
          1. Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services;
          2. The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and
          3. The contract provides for survivor benefits;
        2. The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7);
      5. Any claim for compensation under this subdivision (a)(7) must be filed with the board no later than one (1) year from the date that the claimant is granted exoneration pursuant to § 40-27-109;
      6. The state of Tennessee shall have a right of subrogation as provided by law for any amount awarded pursuant to this subdivision (a)(7) against any person who willfully and intentionally committed an act or engaged in conduct that directly resulted in or contributed to the wrongful conviction and imprisonment of the claimant; and
        1. Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to:
          1. Reconsider the period of time over which the monthly installments shall be paid;
          2. Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or
          3. Both subdivisions (a)(7)(H)(i)(a ) and (b );
        2. In determining whether to grant all or any portion of the claimant’s request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted;
    8. Shall certify the per occurrence limit to the claims commission;
    9. Has the authority to hear claims and make awards for property damage caused by an escapee from a state correctional facility; provided, that:
      1. The claimant has the burden of proving that the escapee caused the damage, that the proximate cause of the escape was the negligence of a state employee, that the incident giving rise to the loss occurred in the county in which the escape occurred or in a county contiguous to the county in which the escape occurred, that the damage occurred within seventy-two (72) hours of the escape and that the amount requested is not reimbursable from any other source;
      2. No award shall be paid if the state correctional facility from which the individual causing such damage escaped is classified as a community service center, a work release center or a nonsecured juvenile facility;
      3. No award shall be paid to any individual who aided in the escape of the inmate causing such damage;
      4. For purposes of this subdivision (a)(9), negligence shall exist when an employee of the department of correction is disciplined as a result of acts or omissions related to the occurrence of escape; and
      5. Claim awards are limited to five thousand dollars ($5,000) per claimant;
    10. Is authorized to establish incentive programs for state departments, agencies and institutions, including public institutions of higher education, for the purpose of reducing liabilities to the risk management fund created pursuant to § 9-8-109. Such incentive programs may include, but are not limited to, differential premium rates based on participation in loss control programs established by the board of claims, increased or decreased deductibles based on participation in loss control programs established by the board, and the imposition of fines and penalties. Any such premiums, deductibles, fines, or penalties shall be paid from the budget of the respective department, agency or institution and deposited into the risk management fund; and
    11. Is authorized to adopt and publish rules and regulations necessary for the proper performance of its duties.
  2. The board of claims may not consider a claim filed more than one (1) year after the occurrence of the incident giving rise to the claim.
  3. Prior to the acquisition of any commercial grade motor vehicle that is to be used primarily for transporting nonstudents by any state department, agency, or institution, including any public institution of higher education, such department, agency or institution shall procure bids for obtaining appropriate levels of insurance on such motor vehicle as shall be determined by the board of claims. This subsection (c) shall only apply to commercial grade motor vehicles that are intended to be used ten percent (10%) or more of the time for travel outside this state. The board of claims shall determine by policy the type motor vehicles that shall be considered commercial grade motor vehicles for purposes of this subsection (c). The department, agency or institution shall maintain such insurance coverage during the time the department, agency or institution owns the motor vehicle. The board of claims is authorized, at its discretion, to review and approve the insurance company from which the insurance shall be procured, the amount of the premiums and the period of the insurance policy. For purposes of this section, “acquisition” means by purchase, devise, gift or otherwise.

Acts 1984, ch. 972, § 16; 1986, ch. 626, § 6; 1986, ch. 911, § 5; 1988, ch. 467, § 1; 1988, ch. 701, § 1; 2003, ch. 212, § 4; 2004, ch. 880, § 1; 2010, ch. 946, § 1; 2010, ch. 993, § 1; 2012, ch. 1055, §§ 1, 2; 2013, ch. 164, § 3.

Law Reviews.

The Exclusiveness of an Employee's Workers' Compensation Remedy Against His Employer (Joseph H. King, Jr.), 55 Tenn. L. Rev. 405 (1988).

NOTES TO DECISIONS

1. Jurisdiction of Claims.

Once the claims commission is divested of jurisdiction over a particular claim, the plaintiff no longer possesses an unqualified right to have a state administrative tribunal determine the merits of the claim. Shell v. State, 893 S.W.2d 416, 1995 Tenn. LEXIS 14 (Tenn. 1995).

9-8-109. Risk management fund.

  1. A risk management fund shall be established as a separate account in the state treasury. Amounts remaining in the fund at the end of each fiscal year shall not revert to the general fund. Moneys in the risk management fund shall be invested by the state treasurer pursuant to chapter 4, part 6 of this title, for the sole benefit of that fund.
  2. The board of claims shall recommend annually to the commissioner of finance and administration the total occurrence basis funding required to satisfy the liabilities arising under this chapter, the liabilities arising under title 12, chapter 3, part 9 and the contribution required of each state department, agency and institution, including higher education, needed to achieve the required funding.
  3. The claims commission shall forward to the division of claims and risk management all of its decisions after they become final. The division of claims and risk management shall pay all claims for which the state is liable after the decision becomes final. Claim awards from the commission or the board of claims, as well as settlements, shall be paid only from funds appropriated or reserved for that purpose. There is hereby appropriated a sum sufficient to the risk management fund for the purpose of paying claims; provided, that awards made pursuant to actions founded upon express contract or breach thereof or awards made for the recovery of taxes shall not be paid from the risk management fund, but instead shall be paid from other funds in accordance with procedures established by the board of claims and approved by the commissioner of finance and administration.
  4. Expenses payable from the risk management fund shall include those attributable to: defending state employees pursuant to title 8, chapter 42, part 1; defending the state pursuant to part 3 of this chapter; the division of claims and risk management; the Tennessee claims commission; the department of the treasury's casualty risk program; and expenses and losses arising pursuant to title 12, chapter 3, part 9. The expenses pursuant to this subsection (d) are subject to annual appropriations and chapter 6 of this title. Subsequent to the close of each fiscal year, the attorney general and reporter shall provide to the state board of claims a report describing the manner in which funds received from the risk management fund were used in defending actions brought against the state and its employees.

Acts 1984, ch. 972, § 17; 1985, ch. 105, § 17; 1995, ch. 260, § 1; 2003, ch. 212, §§ 1-3, 8; 2004, ch. 448, § 1; 2017, ch. 271, § 1.

9-8-110. Division of claims and risk management.

The state treasurer shall administer a division of claims and risk management to compile information and administer risk management programs. This division shall serve as staff to the board of claims in matters relating to casualty risk.

Acts 1984, ch. 972, § 18; 1994, ch. 669, § 3; 2017, ch. 271, § 2.

9-8-111. Compensation for loss, damage or destruction of personal property.

    1. The state shall compensate state employees for the loss, damage or destruction of personal property which is not otherwise compensable which occurs in the course of employment and which is required by the state to be used in the course of employment.
    2. For purposes of this section, a motor vehicle shall be considered required by the state to be used in the course of employment only if:
      1. The employee was reimbursed for mileage by the state for use of such motor vehicle at the time of the incident giving rise to the claim; or
      2. The employee was authorized to use a rental motor vehicle paid for by the state at the time of the incident giving rise to the claim.
    3. The requirement that the employee's personal property be required by the state to be used in the course of employment shall be waived if:
      1. The loss, damage or destruction resulted from an assault and battery upon the state employee;
      2. The loss, damage or destruction occurred while the employee was performing duties outside the normal scope of such employee's employment at the direction of an immediate supervisor; or
      3. The loss, damage or destruction occurred as a result of a special hazard of the employee's employment which is not encountered by the general public.
  1. Notwithstanding subsection (a), the state shall not compensate state employees for the loss, damage or destruction of personal property if:
    1. The loss, damage or destruction resulted from an act of God or natural disaster;
    2. The loss, damage or destruction of personal property which is not a motor vehicle resulted from the employee's negligence;
    3. The loss, damage or destruction of personal property which is a motor vehicle resulted from the employee's gross negligence; or
    4. The loss, damage or destruction represents normal wear and tear of personal property.
  2. In cases where the employee has the benefit of insurance coverage for the personal property, the employee shall not be compensated by the state unless the employee has attempted to obtain compensation from such insurer. The state shall compensate the employee only to the extent the employee is not compensated by the insurer.
  3. In cases where the loss, damage or destruction is to a motor vehicle and the employee does not have the benefit of insurance coverage for the motor vehicle, the employee shall not be compensated by the state in an amount in excess of five hundred dollars ($500).
  4. The burden shall be upon the employee to prove the extent of the loss, damage or destruction of personal property and the failure of an insurer to compensate for such loss, damage or destruction. The state shall only be responsible for compensating employees to the extent that such proof is submitted.

Acts 1981, ch. 517, § 1; T.C.A., § 9-8-218; Acts 1984, ch. 972, § 19; 1986, ch. 626, § 9; 1988, ch. 850, § 1; 1998, ch. 785, § 1.

9-8-112. Final judgments against state employees.

    1. The board of claims is authorized to pay final judgments for state employees, as defined in § 8-42-101, for any damages, including interest thereon, which are awarded in a final judgment in a civil lawsuit against the employee in a court of competent jurisdiction where it is determined by the board that the incident on which such damages were awarded occurred when the employee was acting in good faith within the scope of such employee's official duty and under apparent lawful authority or orders.
    2. No final judgment or interest thereon shall be paid where the employee's conduct amounted to gross negligence or willful, intentional or malicious conduct.
    3. Any portion of the judgment covered by liability insurance will not be paid.
    4. Settlements or compromises of litigation reached out of court by mutual agreement between the parties may be disallowed by the board if the board determines that the terms of the proposed settlement have no relationship to the employee's liability and the injury or damage caused.
  1. In order for any payment to be made as authorized herein, the employee must have exercised such employee's right to retain counsel in accordance with title 8, chapter 42, to defend such employee in the action filed or must be represented by the attorney general and reporter. No payment shall be made unless the employee shall notify, in writing, the attorney general and reporter of the existence of such action within ten (10) days after process is served personally on the employee. This requirement shall be met by an employee's timely filing of a request for the employment of counsel with the defense counsel commission, and shall not be required where process has been served on the attorney general and reporter.
  2. Any final judgment against an employee whose act or omission gave rise to the claim shall constitute a complete bar to any action, by reason of the same subject matter, against the state of Tennessee. Likewise, any judgment, if permitted or awarded by the state, shall constitute a complete bar to any action, by reason of the same subject matter, against a state employee as defined in § 8-42-101.
  3. This section shall not be construed as a waiver of official or sovereign immunity where the injury arises from the act, or failure to act, of an employee where the act is the type of act for which the employee would be or heretofore has been personally immune from liability nor as a waiver of any other defense or jurisdictional bar available to the employee. Furthermore, this section shall not be construed under any circumstances as making the state an insurer of the aforementioned state employees nor as constituting a waiver of the sovereign immunity of the state.
  4. In order for payments to be made as authorized herein, an employee must submit a written request to the board, together with a certified copy of the judgment against the employee, within fifteen (15) days following the entry of the judgment. The board shall act on a request promptly and shall give the employee written notice of its action. The board's decision shall be judicially reviewable by the employee as a final decision in a contested case pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, part 3.
  5. This section applies to final judgments rendered on or after July 1, 1979.
  6. This section shall apply to causes of action arising on or after January 1, 1985, only as set forth in subsection (h).
    1. The board of claims, upon determining that the officer or employee was acting within the scope of the officer's or employee's official duties, shall reimburse the affected officer or employee for actual damages and costs, including attorneys fees, awarded by judgment or settlement up to the limits found in § 9-8-307(e), against state officers and employees for any cause of action arising on or after January 1, 1985, where the state officers' or employees' immunity set forth in § 9-8-307(h) is not sustained. Notwithstanding the foregoing, the board of claims may, in its sole discretion, reduce the reimbursement provided in this subsection (h) if the board finds a circumstance to exist which makes such a reduction proper and just. Such a circumstance may include, but is not limited to, the failure of the officer or employee to fully cooperate in the investigation and defense of the litigation. In cases where the judgment or settlement is in excess of the limits found in § 9-8-307(e), the board of claims may pay any of the amounts in excess of those limits where such reimbursement is found to bear a reasonable relationship to the officer's or employee's liability or the injury or damage caused.
    2. For purposes of this subsection (h), actions deemed to be within the scope of official duties include, but are not limited to, actions taken pursuant to the statutes, policies or procedures of this state, or when the officer or employee had reason to believe that the officer or employee acted pursuant to the statutes, policies or procedures of the state.
    3. Payments may be denied pursuant to this subsection (h) if the officer or employee or the officer's or employee's counsel have not made reasonable efforts to defend or if the officer's or employee's actions were grossly negligent, willful, malicious, criminal or done for personal gain. All other applicable provisions of this section shall apply to this subsection (h). The board may promulgate rules and regulations implementing this subsection (h).

Acts 1982, ch. 717, § 1; 1983, ch. 68, § 1; T.C.A., § 9-8-220; Acts 1984, ch. 972, § 19; 1985, ch. 105, § 13; 1985, ch. 322, §§ 1, 2; 1995, ch. 260, § 2.

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

Cross-References. Claims against the state, title 9, ch. 8, parts 3 and 4.

Defense counsel for state employees, § 8-42-103.

Employment of private counsel, § 8-42-104.

Part 2
Educator Protection Act of 2015

9-8-201. Short title.

This part shall be known and may be cited as “The Educator Protection Act of 2015.”

Acts 2015, ch. 493, § 1.

9-8-202. Purpose of part — Tennessee educator liability fund.

The purpose of this part is to create the Tennessee educator liability fund to provide excess professional liability insurance coverage for all teachers and student teachers, subject to the appropriations of the general assembly. The fund shall protect against damages for claims arising out of the performance of teachers' and student teachers' duties within the scope of their employment or assignment. The fund shall be administered by the board of claims.

Acts 2015, ch. 493, § 1.

9-8-203. Part definitions.

  1. As used in this part, unless the context otherwise requires:
    1. “Fund” means the Tennessee educator liability fund;
    2. “Student teacher” means an individual enrolled as a student in an institution of higher education approved by the state board of education for teacher training, who is jointly assigned by the institution of higher education and either a local board of education or a charter school to teach under the direction of a licensed teacher employed by the local board of education or the charter school;
    3. “Teacher”:
      1. Means any individual employed by a local board of education in a position that requires a license issued by the department of education for service in public elementary and secondary schools of this state, supported, in whole or in part, by local, state, or federal funds; and
      2. Includes an individual employed at a public charter school in a position that requires a license issued by the department of education for service in a public elementary and secondary school of this state.
  2. For the purposes of this part, teachers and student teachers shall not be considered “state employees” as defined in § 8-42-101.

Acts 2015, ch. 493, § 1.

9-8-204. Establishment of Tennessee educator liability fund — Source of funds — Investment of funds.

  1. The Tennessee educator liability fund shall be established as a separate account in the state treasury and shall be separate and apart from the risk management fund established by § 9-8-109.
  2. The fund shall be funded from appropriations by the general assembly, and shall include interest earned on the appropriated money. Appropriations to the fund may be adjusted based on the number of claims filed and amounts paid from the fund. Amounts remaining in the fund at the end of each fiscal year, including interest, shall not revert to the general fund.
  3. Moneys in the fund shall be invested by the state treasurer pursuant to chapter 4, part 6 of this title, for the sole benefit of the fund.

Acts 2015, ch. 493, § 1.

9-8-205. Authority of board of claims.

Notwithstanding any law to the contrary and in addition to the board of claims' authority set forth in § 9-8-108, the board of claims is authorized to:

  1. Establish the type or types of insurance and the insurance limits as excess insurance coverage necessary to carry out the purposes of this part;
  2. Purchase or procure the insurance policy or policies with the fund as the insured;
  3. Establish the effective date for which insurance coverage will be provided;
  4. Enter into contracts with financial consultants, actuaries, auditors, investment managers, individual attorneys, law firms, and other consultants and professionals as necessary to effectuate the purposes of this part;
  5. Establish the process for the administration of claims filed pursuant to this part;
  6. Recommend annually to the commissioner of finance and administration the total occurrence basis funding required to satisfy the liabilities arising under this part; and
  7. Promulgate rules that are necessary to carry out the purpose and intent of this part.

Acts 2015, ch. 493, § 1.

9-8-206. Insurance coverage — Expenses paid from fund — Applicability of coverage.

  1. Coverage provided under this part shall automatically cover all full-time and part-time teachers and student teachers at no cost to the teachers or student teachers.
  2. The expenses paid from the fund shall include the costs associated with the administration of the fund, including, but not limited to, any insurance policy, policies, or contracts that may be authorized by the board of claims.
  3. Pursuant to this part, the insurance policy or policies that may be purchased or procured, and the contracts that may be executed, shall cover incidents that have occurred on or after May 20, 2015.

Acts 2015, ch. 493, § 1.

Part 3
Tennessee Claims Commission

9-8-301. Creation.

  1. There is hereby created an administrative tribunal consisting of three (3) members, one (1) from each grand division, known as the “Tennessee claims commission.”
  2. For administrative purposes, the commission shall be attached to the treasury department. The administrative responsibilities of the commission shall be performed by the state treasurer, in consultation with the claims commission and under the oversight of the board of claims. The state treasurer is authorized to delegate to the administrative clerk such of these responsibilities as the state treasurer deems appropriate.
  3. The authority to appoint, terminate and control the staff of the commission shall rest with the state treasurer; provided, that the individual claims commissioners may appoint, terminate and control the staff personnel assigned to their respective offices. All decisions relative to compensation of the staff of the commission, including the staff positions assigned to the individual commissioners, shall be subject to the approval of the state treasurer. The individual claims commissioners shall consult with the state treasurer prior to taking any personnel action with respect to the staff personnel assigned to their respective offices, and the state treasurer shall consult with the members of the claims commission prior to taking any personnel action for all other staff of the commission.
  4. The employees shall not have state service status but shall be subject to personnel policies and regulations which are applicable to employees of the treasury department, such as leave, compensation, classification and travel requests.
  5. Notwithstanding any provision of Acts 1997, ch. 165, to the contrary, the autonomy of individual claims commissioners in performing their claims adjudication function shall be respected by the state treasurer and the board of claims. Nothing within that act shall be construed to give the state treasurer or board of claims authority to supervise or take any personal actions with regard to the individual claims commissioners.
  6. For the purposes of this part and part 4 of this chapter, “grand division of the state” shall be defined as such term is defined in title 4, chapter 1, part 2, except that Cumberland County shall be included within the middle grand division.

Acts 1984, ch. 972, § 1; 1997, ch. 165, §§ 2, 11; 2003, ch. 411, § 1; 2012, ch. 800, § 49.

Compiler's Notes. The Tennessee claims commission, created by this section, terminates June 30, 2025. See §§ 4-29-112, 4-29-246.

Acts 2012, ch. 800, § 1 provided that the act, which amended subsection (d), shall be known and cited as the “Tennessee Excellence, Accountability, and Management (T.E.A.M.) Act of 2012.”

Acts 1997, ch. 165, referred to in this section, rewrote this section, amended §§ 9-8-304, 9-8-305, 9-8-403 and 9-8-405, and added § 9-8-309.

Cross-References. Grand divisions, title 4, ch. 1, part 2.

Law Reviews.

Selected Tennessee Legislation of 1986, 54 Tenn. L. Rev. 457 (1987).

State Liability at the Tennessee Claims Commission: Balancing Sovereign Immunity and Individual Rights of Redress (Steven W. Feldman), 37 Tenn. B.J. 19 (2001).

Attorney General Opinions. The Tennessee Claims Commission is part of the executive branch of the government.  A Tennessee claims commissioner is not a member of the judiciary and employees of the claims commission and claims commissioners are subject to T.C.A. § 2-19-207.  OAG 13-111, 2013 Tenn. AG LEXIS 114 (12/30/13).

NOTES TO DECISIONS

1. In General.

The Tennessee Claims Commission Act did not deprive federal district court of jurisdiction over medical malpractice action against defendants in their individual capacity. Rather, it granted absolute immunity to defendants who were state employees acting within the scope of their employment. Thompson v. Regional Medical Center, 754 F. Supp. 594, 1991 U.S. Dist. LEXIS 4215 (W.D. Tenn. 1991).

2. Bankruptcy.

Remedies of debtor in bankruptcy were not limited to an action pursuant to the Tennessee Claims Commission Act, and debtor's contract with state university was subject to assumption under applicable bankruptcy law, where ineffective termination left the contract intact and the contract required “claims against the state for breach,” to be submitted to the Tennessee claims commission, not issues regarding the ultimate existence or nonexistence of the contract. In re Pyramid Operating Auth., Inc., 144 B.R. 795, 1992 Bankr. LEXIS 2373 (Bankr. W.D. Tenn. 1992).

9-8-302. Appointments — Terms — Residence — Vacancies — Chair.

  1. Each commissioner shall be appointed by the governor with confirmation by resolution of both houses of the general assembly for a term of eight (8) years.
  2. To provide staggered terms for the commissioners, the term expiring on June 30, 2003, shall be filled for an eight (8) year appointment while the current terms of the remaining two (2) commissioners shall each be extended for two (2) additional years. Thereafter, all commissioners shall be appointed to eight (8) year terms.
  3. Each commissioner shall have resided in the grand division from which such commissioner is appointed for one (1) year prior to appointment, resided in Tennessee for five (5) years prior to appointment, and shall have been licensed to practice law in Tennessee for at least five (5) years prior to appointment. No commissioner may practice law while serving on the commission. The commissioners shall discontinue the practice of law as soon after their appointments as is practicable. The commissioners shall comply with the standards of conduct contained in the Code of Judicial Conduct of the Rules of the Tennessee Supreme Court.
  4. The commissioners shall be eligible for reappointment.
  5. Temporary vacancies on the commission shall be filled by a qualified person appointed by the governor. Any other vacancy shall be filled for the remainder of the term by a qualified person appointed by the governor with the consent of both houses of the general assembly. If such a vacancy occurs while the general assembly is not in session, the governor shall appoint a qualified person to serve during the interim.
  6. The commission shall designate one (1) of its members to serve as chair.

Acts 1984, ch. 972, §§ 2, 6; 1985, ch. 105, § 3; 1993, ch. 367, §§ 1, 2; 2002, ch. 816, §§ 1, 2.

Compiler's Notes. Acts 1993, ch. 367, § 3 provided that the amendment by that act shall apply to the term of each commissioner who is appointed and confirmed pursuant to this section and whose term commences on or after January 1, 1993.

Cross-References. Code of Judicial Conduct, Tenn. R. Sup. Ct. 10.

Grand divisions, title 4, ch. 1, part 2.

9-8-303. Compensation.

The commissioners of the claims commission shall receive the same compensation as a Class 1 commissioner.

Acts 1984, ch. 972, § 3.

Cross-References. Salaries of Class 1 and Class 2 officers, § 8-23-101.

9-8-304. Administrative clerk — Open proceedings — En banc hearings.

  1. The claims commission, subject to the approval of the state treasurer, shall designate a commission employee to serve as administrative clerk to the claims commission. The administrative clerk, in consultation with the commission chair, shall schedule meetings of the commission.
  2. The administrative clerk, in consultation with the commission chair, shall docket proceedings and schedule hearings on claims. Each claim shall be assigned to the appropriate commissioner for the grand division in which the wrongful act occurred or in which the claimant lives; provided, that the chair of the commission shall have the authority to assign cases arising in one grand division to a commissioner in another grand division if such is necessary to alleviate congestion, delay, or an imbalance in caseloads among grand divisions. Each claim shall be heard in the grand division in which the wrongful act occurred or in which the claimant lives. The commission shall follow the law established for trial courts concerning opening proceedings to the public.
  3. The administrative clerk, in consultation with the state treasurer, is responsible for the day-to-day management of the commission's staff and such other activities as may be required including, but not limited to, reporting on the status of claims. In managing the affairs of the commission, the state treasurer shall consult with the claims commission.
  4. For the purpose of uniformity, the commission, upon the request of two (2) members thereof, may sit en banc  to hear and decide any matter for which there is a disagreement among two (2) or more of the commissioners.

Acts 1984, ch. 972, § 4; 1997, ch. 165, § 3.

Cross-References. Grand divisions, title 4, ch. 1, part 2.

9-8-305. Powers and duties.

Each commissioner, and each administrative law judge assigned pursuant to this part, has the authority to:

  1. Hear and determine claims against the state falling within the categories enumerated in § 9-8-307;
  2. Issue subpoenas, swear in witnesses at hearings and other commission functions, effect discovery and issue protective orders and the like, and seek enforcement pursuant to § 4-5-311(a) and (b);
  3. Rule on motions and objections;
  4. Regulate the course of proceedings;
  5. Take official notice of:
    1. State statutes and the rules and regulations of state agencies; and
    2. Any fact that can be judicially noticed; and
  6. Issue written findings of facts and opinions of law.

Acts 1984, ch. 972, § 5; 1986, ch. 626, § 7; 1997, ch. 165, §§ 4, 5.

Attorney General Opinions. The Tennessee Claims Commission is part of the executive branch of the government.  A Tennessee claims commissioner is not a member of the judiciary and employees of the claims commission and claims commissioners are subject to T.C.A. § 2-19-207.  OAG 13-111, 2013 Tenn. AG LEXIS 114 (12/30/13).

NOTES TO DECISIONS

1. Illustrative Cases.

Congress'  legislative record in passing 17 U.S.C. § 511 did not establish a pattern of unconstitutional conduct, inadequate state law remedies, or that the federal remedy proscribed and made actionable no more facially constitutional state conduct than reasonably necessary in relation to a constitutional harm, and thus, plaintiff copyright holder's infringement claim against defendant state tourist department failed; while the department had not shown that claims under T.C.A. §§ 9-8-305(1), 9-8-307, provided an alternative remedy, the holder had not pointed to any evidence in the legislative history indicating that Congress considered the unavailability of remedies under state law in deciding to abrogate the states'  immunity from federal suit. Jacobs v. Memphis Convention & Visitors Bureau, 710 F. Supp. 2d 663,  2010 U.S. Dist. LEXIS 70990 (W.D. Tenn. May 10, 2010).

9-8-306. Promulgation of rules and regulations.

The commission is authorized to promulgate rules and regulations not inconsistent with this chapter in order for it to fulfill its duties in an orderly and efficient manner.

Acts 1984, ch. 972, § 7.

Attorney General Opinions. The Tennessee Claims Commission is part of the executive branch of the government.  A Tennessee claims commissioner is not a member of the judiciary and employees of the claims commission and claims commissioners are subject to T.C.A. § 2-19-207.  OAG 13-111, 2013 Tenn. AG LEXIS 114 (12/30/13).

9-8-307. Jurisdiction — Claims — Waiver of actions — Standard for tort liability — Damages — Immunities — Definitions — Transfer of claims.

    1. The commission or each commissioner sitting individually has exclusive jurisdiction to determine all monetary claims against the state based on the acts or omissions of “state employees,” as defined in § 8-42-101, falling within one (1) or more of the following categories:
      1. The negligent operation or maintenance of any motor vehicle or any other land, air, or sea conveyance. In addition, the state may be held liable pursuant to this subdivision (a)(1)(A) for the negligent operation of state-owned motor vehicles or other conveyances by persons who are not state employees; provided, that such persons operated the vehicle or other conveyance with the permission of a state employee;
      2. Nuisances created or maintained;
      3. Negligently created or maintained dangerous conditions on state controlled real property. The claimant under this subdivision (a)(1)(C) must establish the foreseeability of the risks and notice given to the proper state officials at a time sufficiently prior to the injury for the state to have taken appropriate measures;
      4. Legal malpractice or health care liability by a state employee; provided, that the state employee has a professional/client relationship with the claimant;
      5. Negligent care, custody and control of persons;
      6. Negligent care, custody or control of personal property;
      7. Negligent care, custody or control of animals. Damages are not recoverable under this section for damages caused by wild animals;
      8. Negligent construction of state sidewalks and buildings;
      9. Negligence in planning and programming for, inspection of, design of, preparation of plans for, approval of plans for, and construction of, public roads, streets, highways, or bridges and similar structures, and negligence in maintenance of highways, and bridges and similar structures, designated by the department of transportation as being on the state system of highways or the state system of interstate highways;
      10. Dangerous conditions on state maintained highways. The claimant under this subdivision (a)(1)(J) must establish the foreseeability of the risk and notice given to the proper state officials at a time sufficiently prior to the injury for the state to have taken appropriate measures;
        1. Workers' compensation claims by state employees, including injuries incurred by national guard members, Tennessee state guard members, civil air patrol members, civil defense agency personnel and emergency forest firefighters while on active duty and in the course of that duty;
        2. The commission's payment of these claims shall be in such amount and subject to such limitations as set forth in title 50, chapter 6, except the following provisions shall have no application to workers' compensation claims filed against the state: §§ 50-6-103, 50-6-104, 50-6-106(5), 50-6-118, 50-6-128, 50-6-203(a)-(e) and (g), 50-6-205(b)(2), (b)(3), (c) and (d), 50-6-208, 50-6-210(f), 50-6-211, 50-6-213, 50-6-222, 50-6-225(d), 50-6-229(b), 50-6-233, 50-6-236(c)(2)-(3) and (g), 50-6-237, 50-6-238, 50-6-239, 50-6-244, 50-6-306, 50-6-307, and title 50, chapter 6, part 4. Section 50-6-114 shall apply to workers' compensation claims against the state, except that the state is authorized to give an employee the option to use accrued sick and annual leave in lieu of receiving temporary total disability benefits. In no event shall an employee receive both accrued sick and annual leave and temporary total disability benefits for the period of temporary total disability. Where appropriate, the claims commission shall be considered the court or tribunal to determine claims within title 50, chapter 6. Payments shall be made and accepted without regard to fault as a cause of the injury or death;
        3. The subsequent injury and vocational recovery fund shall have no application to workers' compensation claims against the state of Tennessee. Payment of compensation shall not be considered a binding determination of the obligations of the employer as to future compensation payments. Likewise, the acceptance of compensation by the officer or employee is not considered a binding determination of the obligations of the employer as to future compensation payments; nor shall the acceptance of compensation by the officer or employee be considered a binding determination of the employer's rights;
        4. The interested parties have the right to settle all matters of compensation between themselves, but all settlements, before the settlements are binding on either party, shall be reduced to writing and shall be approved by the claims commissioner before whom the claim for compensation is entitled to be heard, or to a workers' compensation judge pursuant to § 50-6-240. Any proposed settlement presented to a claims commissioner for approval pursuant to this subdivision (a)(1)(K)(iv) shall be examined by the claims commissioner to determine whether the officer or employee is receiving, substantially, the benefits provided by the Workers' Compensation Law, compiled in title 50, chapter 6. To this end, the commissioner may call and examine witnesses. Upon such settlement being approved, an order shall be rendered by the commissioner and duly entered by the clerk;
        5. In case any officer or employee of the state of Tennessee for whose injury or death compensation is payable under the Workers' Compensation Law shall at the time of injury be employed or paid jointly by two (2) or more employers subject to such law, such employers shall contribute to payment of such compensation in a proportion of their several wage liability to such officer or employee. The state of Tennessee is considered the primary employer and the determination of workers' compensation paid shall be pursuant to the procedures provided for state officers and employees. If one (1) or more, but not all, of such officers and employees are subject to the Workers' Compensation Law and otherwise subject to liability for compensation hereunder, then the liability of such of them as are so subject shall be to pay the proportion of the entire compensation which their portion of the wage liability bears to the wages of the officer or employee; provided, that nothing in this section shall prevent any agreement between the different employers between themselves as to the distribution of the ultimate burden of such compensation. The state of Tennessee shall pay the officer or employee under the Workers' Compensation Law and seek contribution from other contributing employers. The state of Tennessee has a right of action in the courts against the joint employers;
        6. Notwithstanding § 9-8-402(d) or any other law to the contrary, upon motion of the employee, the claims commission may, prior to the benefits review conference or any final hearing on the claim, order the state to initiate, continue or reinstate temporary disability benefits or to provide medical benefits to the employee pending a final decision in the case, if the claims commission determines that such an order would be appropriate in light of available information. If the commission determines it appropriate to order the state to provide medical benefits pursuant to this subdivision (a)(1)(K)(vi), the commission's authority shall include, but not be limited to, the authority to order specific medical treatment recommended by the treating physician, and the authority to require the state to provide the appropriate panel of physicians to the employee, including a panel of appropriate specialists. With respect to the determination of whether to order the payment of temporary disability or medical benefits, the claims commission shall decide such issues solely on the basis of the information available to the commission, without favor or presumption for or against either party;
      11. Actions for breach of a written contract between the claimant and the state which was executed by one (1) or more state officers or employees with authority to execute the contract; provided, that the group insurance agreements created pursuant to §§ 8-27-202 and 8-27-302 shall be considered contracts for purposes of this subsection (a) in order for the commission to determine insurance claims which have been previously rejected by the state insurance committee or the local education insurance committee;
      12. Negligent operation of machinery or equipment;
      13. Negligent deprivation of statutory rights created under Tennessee law, except for actions arising out of claims over which the civil service commission has jurisdiction. The claimant must prove under this subdivision (a)(1)(N) that the general assembly expressly conferred a private right of action in favor of the claimant against the state for the state's violation of the particular statute's provisions;
      14. Claims for the recovery of taxes collected or administered by the state, except any tax collected or administered by the commissioner of revenue, any tax collected or administered by the commissioner of commerce and insurance pursuant to title 56, and any unemployment insurance tax collected or administered by the commissioner of labor and workforce development;
      15. Claims for the loss, damage or destruction of the personal property of state employees based on § 9-8-111;
        1. Claims for injuries incurred by persons where such injury occurred while the person was a passenger in a motor vehicle operated by a state employee while such employee was acting within the scope of employment. The claimant has the burden of proving the following:
          1. The injuries suffered by the claimant occurred as a result of an accident involving a motor vehicle operated by a non-state employee and a motor vehicle operated by a state employee who, at the time of the accident, was acting within the scope of employment;
          2. The proximate cause of the accident was the negligent operation of the motor vehicle operated by the nonstate employee;
          3. The claimant has been unable to recover any damages from the negligent party because the negligent party was uninsured or underinsured at the time of the accident and is otherwise financially incapable of fully compensating the claimant;
          4. The claimant has been unable to recover sufficient amounts under the Workers' Compensation Law or from any other public or private source, including the claimant's uninsured motorist's insurance policy, to fully compensate for the injuries suffered; and
          5. The claimant's presence in the motor vehicle operated by the state employee was for the benefit of the state, except that this requirement shall be waived for persons who are injured while a passenger in a state-owned motor vehicle used in the state employee van pool program authorized in § 4-3-1105(19);
        2. Notwithstanding subsection (e), awards under this subdivision (a)(1)(Q) are limited to amounts recoverable under subdivision (a)(1)(K). Awards under this subdivision (a)(1)(Q) shall not be considered payments under an uninsured motorists insurance policy as provided for in title 56, chapter 7, part 12;
      16. Claims for libel and/or slander where a state employee is determined to be acting within the scope of employment;
        1. Claims for compensation filed under the Criminal Injuries Compensation Act, compiled in title 29, chapter 13, and § 40-24-107. Claims filed pursuant to this subdivision (a)(1)(S) shall be determined in accordance with title 29, chapter 13;
        2. Notwithstanding title 29, chapter 13, to the contrary, the claims commission has exclusive jurisdiction to determine all claims filed for compensation under the Criminal Injuries Compensation Act in accordance with title 29, chapter 13; provided, that this exclusive jurisdiction shall apply only to claims for compensation filed on or after January 1, 1987. At the request of the claimant and with the consent of the court, any claim filed prior to January 1, 1987, may be transferred to the claims commission for determination of the claim;
      17. Actions based on § 69-1-201;
      18. Actions based on violations of the requirements of procurement of commodities or services under title 71, chapter 4, part 7;
      19. Unconstitutional taking of private property, as defined in § 12-1-202, including intentional state governmental action resulting in a taking other than the taking of real property and real property rights for the state's system of highways or the state's system of interstate highways; and
      20. Claims arising out of the billing, collection, or remittance of 911 surcharges.
    2. No item enumerated in this subsection (a) shall be interpreted to allow any claim against the state on account of the acts or omissions of persons, partnerships, corporations or other entities licensed or regulated by agencies of the state, notwithstanding any negligence committed by the state in the course of performing licensing or regulatory activities. No item enumerated in this subsection (a) shall be interpreted to allow any claims against the state arising out of or resulting from:
      1. The issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order or similar authorization, except as provided for in subdivision (a)(1)(V);
      2. An inspection, or by reason of making an inadequate or negligent inspection of any property, except as provided for in subdivision (a)(1)(I);
      3. Riots, unlawful assemblies, public demonstrations, mob violence and civil disturbances; except that the claims commission shall have jurisdiction over riots and disturbances occurring on or after January 1, 1985, by persons who are in the care, custody and control of the state where the state's negligence is the proximate cause of the riot or disturbance which, in turn, is the proximate cause of the injury to the claimant or damage to the claimant's personal property;
      4. Acts of a defendant serving a sentence under probation coupled with periodic confinement pursuant to § 40-35-307; work release pursuant to § 40-35-315; on furlough pursuant to § 40-35-316; a community-based alternative to confinement pursuant to title 40, chapter 36; or parole pursuant to § 40-35-504, unless the defendant is in the custody of or under the control or supervision of a jailer, corrections officer, law enforcement officer, or other agent of the state, or unless the state was negligent in its release of the defendant; provided, that the state is liable for reasonable medical care for inmates under work release, furlough, or community-based alternatives to confinement, although the inmates are not physically in the custody and control of and under the direct personal control of a jailer, corrections officer or other law enforcement officer. The state, county, municipality or political subdivision which may employ the inmate but does not have direct supervision and control of the inmate's work release, confinement or community-based alternative to confinement is not liable for the inmate's reasonable medical treatment for injuries incurred while on such work release, community-based alternative, or other work detail. Nothing in this subdivision (a)(2)(D) shall be construed as changing the general law of comparative fault. Nothing in this subdivision (a)(2)(D) shall be construed as changing the liability for injuries caused by a person or agency due to that person's or agency's own negligence. Nothing in this subdivision (a)(2)(D) shall be construed as changing the general law on liability in subdivision (a)(1)(E); or
      5. Any failure or malfunction occurring before January 1, 2005, which is caused directly or indirectly by the failure of computer software or any device containing a computer processor to accurately or properly recognize, calculate, display, sort, or otherwise process dates or times, if, and only if, the failure or malfunction causing the loss was unforeseeable or if the failure or malfunction causing the loss was foreseeable but a reasonable plan or design or both for identifying and preventing the failure or malfunction was adopted and reasonably implemented complying with generally accepted computer and information system design standards. Notwithstanding any other provision of the law, nothing in this subdivision (a)(2)(E) shall in any way limit the liability of a third party, direct or indirect, who is negligent. Further, a person who is injured by the negligence of a third party contractor, direct or indirect, shall have a cause of action against the contractor.
    3. It is the intent of the general assembly that the claims commission shall only hear claims arising on or after January 1, 1985. All claims arising prior to January 1, 1985, are to be governed by the law as it was prior to that date. For purposes of jurisdiction, a claim for recovery of taxes is deemed to arise on the date of the payment under protest. However, for any claim falling within the jurisdiction of the claims commission as determined by this subdivision (a)(3) and arising before January 1, 1985, the board of claims may authorize the chair of the board to transfer any claim or classes of claims to the claims commission. No claims shall be transferred where the claimant objects. Transferred claims are subject to the same requirements and procedures as claims originally filed with the claims commission. It is the intent of the general assembly that the jurisdiction of the claims commission be liberally construed to implement the remedial purposes of this legislation. It is the intent of the general assembly that no distinctions be made between officers and employees of the state under this legislation. The availability of state records and documents concerning claims is subject to the same discovery defenses as are available to other parties. The portion of the records in possession of the division of claims and risk management containing the amount of funds reserved for each claim for the risk management fund is confidential and not subject to § 10-7-503, until the final adjudication of the claim.
  1. Claims against the state filed pursuant to subsection (a) shall operate as a waiver of any cause of action, based on the same act or omission, which the claimant has against any state officer or employee. The waiver is void if the commission determines that the act or omission was not within the scope of the officer's or employee's office or employment.
  2. The determination of the state's liability in tort shall be based on the traditional tort concepts of duty and the reasonably prudent person's standard of care.
  3. The state will be liable for actual damages only. No award shall be made unless the facts found by the commission would entitle the claimant to a judgment in an action at law if the state had been a private individual. The state will not be liable for punitive damages and the costs of litigation other than court costs. The state will not be liable for willful, malicious, or criminal acts by state employees, or for acts on the part of state employees done for personal gain. The state may assert any and all defenses, including common law defenses, which would have been available to the officer or employee in an action against such an individual based upon the same occurrence. The state may assert any absolute common law immunities available to the officer or employee, however, good faith common law immunity may not be asserted. If the claimant is successful with any claim filed with the claims commission after January 1, 1985, the state shall pay such interest as the commissioner may determine to be proper, not exceeding the legal rate as provided in § 47-14-121. In contract actions, interest may be awarded, but if the rate of interest is provided in the contract, the award of interest shall be at that rate.
  4. For causes of action arising in tort, the state shall only be liable for damages up to the sum of three hundred thousand dollars ($300,000) per claimant and one million dollars ($1,000,000) per occurrence. The board of claims is authorized to purchase insurance, on a per claimant or per occurrence basis, for any class of claim. Any recovery covered by such a policy may exceed the monetary limits of this subsection (e), but only up to the policy limit.
  5. No language contained in this chapter is intended to be construed as a waiver of the immunity of the state of Tennessee from suit in federal courts guaranteed by the eleventh amendment to the Constitution of the United States.
  6. No language contained in this chapter is intended to be construed to abridge the common law immunities of state officials and employees.
  7. State officers and employees are absolutely immune from liability for acts or omissions within the scope of the officer's or employee's office or employment, except for willful, malicious, or criminal acts or omissions or for acts or omissions done for personal gain. For purposes of this chapter, “state officer” or “employee” has the meaning set forth in § 8-42-101(3).
    1. Claims that were timely filed against a state employee with a court of competent jurisdiction and that fall within the jurisdiction of the claims commission found in subdivision (a)(1)(A) shall be dismissed as to the state employee and transferred to the division of claims and risk management to proceed as a claim against the state; provided, that the state employee alleged to have acted negligently was, at the time of the incident giving rise to the claim, operating a private motor vehicle within the scope of the employee's office or employment, and the employee's action or inaction was not willful, malicious, criminal or done for personal gain. When a motion for transfer is made, the court shall require that notice be given the attorney general and reporter and the state shall be permitted to intervene and respond to the motion. Upon such transfer, the claim shall be considered timely filed with the division of claims and risk management and the claims commission. Such transfer shall be effected upon an order of dismissal and transfer from the court. Any such transfer must be made within one (1) year of the filing of the original complaint with the court or on or after April 22, 1998, whichever is later. Such claims shall be considered by the division of claims and risk management and the claims commission, as provided by law. This subsection (i) shall be effective for causes of action arising on or after July 1, 1995, pending on or after April 22, 1998, and causes of action arising on or after April 22, 1998.
    2. Claims which are transferred to the division of claims and risk management pursuant to this subsection (i) shall be investigated by the division of claims and risk management, acted upon or transferred by the division, and acted upon by the claims commission pursuant to the same statutory requirements and procedures as apply to claims originally filed with the division of claims and risk management.

      [Repealed effective July 1, 2022. See Compiler's Note.]

  8. Notwithstanding any other provision of this chapter to the contrary, the state does not waive its sovereign immunity for any loss, damage, injury, or death arising from COVID-19, as defined in § 29-34-802(a), unless the claimant proves by clear and convincing evidence that the loss, damage, injury, or death was proximately caused by an act or omission of the state or an employee or agent of the state constituting gross negligence. The requirements of § 29-34-802(c) apply to any such cause of action when applicable.

Acts 1984, ch. 972, § 8; 1985, ch. 36, § 12; 1985, ch. 105, §§ 1, 4-7, 16; 1985, ch. 322, § 3; 1986, ch. 626, §§ 1-3; 1986, ch. 749, § 1; 1986, ch. 911, §§ 1, 2, 4; 1988, ch. 890, § 1; 1989, ch. 28, § 2; 1989, ch. 491, §§ 1, 2, 5; 1991, ch. 133, § 3; 1991, ch. 499, § 2; 1993, ch. 494, § 2; 1996, ch. 698, § 1; 1996, ch. 1036, § 1; 1998, ch. 785, §§ 2-7, 18, 31, 32; 1999, ch. 458, §§ 1, 4; 2000, ch. 573, § 1; 2003, ch. 212, § 8; 2004, ch. 699, § 1; 2005, ch. 384, §§ 1-3; 2012, ch. 798, § 4; 2013, ch. 289, §§ 94, 95; 2014, ch. 795, § 14; 2017, ch. 271, § 1; 2017, ch. 344, § 1; 2017, ch. 423, § 2; 2018, ch. 873, § 1; 2020 (2nd Ex. Sess.), ch. 1, § 4.

Compiler's Notes. Acts 1986, ch. 626, § 12 provided that the provisions of the 1986 amendment to this section by that act which added (a)(2) and (a)(3) were retroactively effective for causes of action arising on or after January 1, 1985.

Acts 1988, ch. 890, § 2 provided that the 1988 amendment by that act shall apply to all records relating to claims against the state filed on or after May 2, 1988.

Acts 1996, ch. 698, § 2 provided that the 1996 amendment by that act shall apply to all workers' compensation claims filed against the state on or after July 1, 1996.

Acts 2000, ch. 573, § 5, provided that the amendment to this section by that act shall apply to all claims for compensation arising from offenses occurring on or after July 1, 1999.

Acts 2005, ch. 384, § 7 provided that the act shall apply to accidents or injuries occurring on or after July 1, 2005.

Acts 2013, ch. 289, § 103 provided that the act, which amended subdivision (a)(1)(K), shall be known and may be cited as the “Workers' Compensation Reform Act of 2013.”

Acts 2014, ch. 795, § 1 provides that the act, which added subdivision (a)(1)(W), shall be known and may be cited as the “911 Funding Modernization and IP Transition Act of 2014.”

Acts 2020 (2nd Ex. Sess.), ch. 1, § 7 provided: “(a) This act shall take effect upon becoming a law, the public welfare requiring it, and unless otherwise prohibited by the United States or Tennessee Constitution, this act applies to all claims arising from COVID-19 except those in which, on or before August 3, 2020:

“(1) A complaint or civil warrant was filed;

“(2) Notice of a claim was given pursuant to § 9-8-402; or

“(3) Notice was satisfied pursuant to § 29-26-121(a)(3).

“(b) This act is repealed on July 1, 2022, but continues to apply to any loss, illness, injury, or death occurring before that date to which none of the exceptions listed in subdivisions (a)(1)-(3) apply.”

Amendments. The 2020 (2nd Ex. Sess.) amendment by ch. 1 added (j).

Effective Dates. Acts 2020 (2nd Ex. Sess.), ch. 1, § 7. August 17, 2020.

Cross-References. Confidentiality of public records, § 10-7-504.

Defense counsel for state employees, § 8-42-103.

Employment of private counsel, § 8-42-104.

Immunity for year 2000 computer calculation errors, § 29-20-205.

Reimbursement of state officers found not immune, § 9-8-112.

Responsibility for maintenance of roads, bridges, etc, in state highway system, § 54-1-126.

Law Reviews.

A Pragmatic Approach to Improving Tort Law, 54 Vand. L. Rev. 1447 (2001).

Accidental Torts, 54 Vand. L. Rev. 1225 (2001).

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

Cost-Benefit Analysis and the Negligence Standard, 54 Vand. L. Rev. 893 (2001).

The Duty Concept in Negligence Law, 54 Vand. L. Rev. 787 (2001).

Torts — Johnson v. LeBonheur Children's Medical Center: Private Hospitals May be Held Vicariously Liable Under Agency Theory for the Negligence of State-Employed Physician Residents, 34 U. Mem. L. Rev. 459 (2004).

Criminal Injuries Compensation: A Primer (Richard W. Rucker), 23 Tenn. B.J. 32 (1987).

Duty Rules, 54 Vand. L. Rev. 767 (2001).

Intent and Recklessness in Tort: The Practical Craft of Restating Law, 54 Vand. L. Rev. 1133 (2001).

Interpretive Construction, Systematic Consistency, and Criterial Norms in Tort Law, 54 Vand. L. Rev. 1157 (2001).

Legal Cause: Cause-In-Fact and the Scope of Liability for Consequences, 54 Vand. L. Rev. 941 (2001).

Non-Utilitarian Negligence Norms and the Reasonable Person Standard, 54 Vand. L. Rev. 863 (2001).

On Determining Negligence Norms, the Reasonable Person Standard, and the Jury, 54 Vand. L. Rev. 813 (2001).

Once More Into the Bramble Bush: Duty, Causal Contribution, and the Extent of Legal Responsibility, 54 Vand. L. Rev. 1071 (2001).

Purpose, Belief, and Recklessness: Pruning the Restatement's (Third) Definition of Intent, 54 Vand. L. Rev. 1165 (2001).

Removing Emotional Harm from the Core of Tort Law, 54 Vand. L. Rev. 751 (2001).

Restatement (Third) of Torts: General Principles and the Prescription of Masculine Order, 54 Vand. L. Rev. 1367 (2001).

Restating Duty, Breach, and Proximate Cause in Negligence Law: Descriptive Theory and the Rule of Law, 54 Vand. L. Rev. 1039 (2001).

Scientific Uncertainty and Causation in Tort Law, 54 Vand. L. Rev. 1011 (2001).

State Defiance of Bankruptcy Law (Kenneth N. Klee, James O. Johnston, Eric Winston), 52 Vand. L. Rev. 1527 (1999).

State Liability at the Tennessee Claims Commission: Balancing Sovereign Immunity and Individual Rights of Redress (Steven W. Feldman), 37 Tenn. B.J. 19 (2001).

The Exclusiveness of an Employee's Workers' Compensation Remedy Against His Employer (Joseph H. King, Jr.), 55 Tenn L. Rev. 405 (1988).

The Hand Formula in the Draft Restatement (Third) of Torts: Encompassing Fairness as Well as Efficiency Values, 54 Vand. L. Rev. 901 (2001).

The John W. Wade Conference on the Third Restatement of Torts, 54 Vand. L. Rev. 639 (2001).

The Passing of Palsgraf?, 54 Vand. L. Rev. 803 (2001).

The Restatement of Torts and the Courts, 54 Vand. L. Rev. 1439 (2001).

The Restatement (Third) and the Place of Duty in Negligence Law, 54 Vand. L. Rev. 657 (2001).

The Theory of Enterprise Liability and Common Law Strict Liability, 54 Vand. L. Rev. 1285 (2001).

The Theory of Tort Doctrine and the Restatement (Third) of Torts, 54 Vand. L. Rev. 1413 (2001).

The Trouble with Negligence, 54 Vand. L. Rev. 1187 (2001).

The Unexpected Persistence of Negligence, 1980 - 2000, 54 Vand. L. Rev. 1337 (2001).

Torts — Parent v. State: Tennessee's Recreational Use Statute and Its Effects on Liability, 30 U. Mem. L. Rev. 671 (2000).

Updating Tennessee's Public Records Law (Douglas Pierce), 24 Tenn. B.J. 24 (1988).

Enough with the White Lie-ability: Decreasing Frivolous Health Care Liability Actions in Tennessee with Time and Transparency, 46 U. Mem. L. Rev. 503 (2015).

Attorney General Opinions. Liability of community service agencies and their boards, OAG 97-092, 1997 Tenn. AG LEXIS 87 (6/26/97).

Liability for conduct of inmates performing community service work, OAG 97-112, 1997 Tenn. AG LEXIS 145 (8/12/97).

State liability for negligence of senior law students appearing for indigents, OAG 99-028, 1999 Tenn. AG LEXIS 23 (2/17/99).

Liability of state, district attorney general and special prosecutor, OAG 99-173, 1999 Tenn. AG LEXIS 135 (9/7/99).

The adoption of a standard or policy concerning retention rates for rock fall by the department of transportation comes within the planning and policy making type of action protected by discretionary function immunity, OAG 01-136, 2001 Tenn. AG LEXIS 143 (9/4/01).

When activated by the governor to active state duty and operating in the course of that duty, the Tennessee state guard constitutes an arm of the state and enjoys the sovereign immunity of the state of Tennessee; thus, if monthly drills and training opportunities are in the course of active duty, the state guard, under the order, control and supervision of the governor, is immune from suit, OAG 02-011, 2002 Tenn. AG LEXIS 1 (1/10/02).

When on active state duty and in the course of that duty, the members of the Tennessee state guard have immunity; there is no immunity available, however, for training or other activities outside the scope of active duty, OAG 02-011, 2002 Tenn. AG LEXIS 1 (1/10/02).

Individual members of the Tennessee state guard are eligible to receive worker's compensation benefits, OAG 02-011, 2002 Tenn. AG LEXIS 1 (1/10/02).

Personal immunity of emergency medical technicians and paramedics from tort suits, OAG 03-093, 2003 Tenn. AG LEXIS 112 (7/28/03).

Liability of statewide independent living council members, OAG 04-100, 2004 Tenn. AG LEXIS 108  (6/24/04).

If not immune pursuant to T.C.A. § 58-2-403, volunteers are immune as provided in subsection (h) of this section in Tennessee, and the State of Tennessee is liable for their negligence, OAG 04-174, 2004 Tenn. AG LEXIS 186 (12/17/04).

Volunteers are entitled to immunity under this section and the State of Tennessee is entitled to sovereign immunity in other states if those states choose to recognize the immunity afforded the State of Tennessee and its volunteers by the State of Tennessee; regardless, if sued personally, volunteers can request legal representation at the expense of the State of Tennessee and reimbursement of any judgment, OAG 04-174, 2004 Tenn. AG LEXIS 186 (12/17/04).

No statute exists under which a citizen could file a claim against the state for injury, accident or illness caused by exposure to second-hand smoke in public places, OAG 05-050, 2005 Tenn. AG LEXIS 50 (4/19/05).

Payment of medical expenses of jail prisoners on medical furlough or bond, OAG 06-084, 2006  Tenn. AG LEXIS 93 (5/5/06).

Immunity of Tennessee National Guardsmen on active duty, OAG 07-03, 2007 Tenn. AG LEXIS 3 (1/8/07).

Duties and liabilities of district public guardian.  OAG 13-36, 2013 Tenn. AG LEXIS 37 (5/2/13).

The Healthy Workplace Act of 2014 does not create a new cause of action against state or local employers or against state or local employees for abusive conduct in the workplace.  It appears that when a state or local government complies with the policy-adoption requirement of T.C.A. § 50-1-503(b), that entity would, under certain circumstances, acquire a specific supplement to the immunity already applicable under the Governmental Tort Liability Act (GTLA) and the Tennessee Claims Commission Act. OAG 15-01, 2015 Tenn. AG LEXIS 1 (1/6/15).

Each “employer” may adopt a policy conforming to T.C.A. § 50-1-503(b).  When the employer is a local governmental entity, such as a county or a municipality, the question of who has authority within that local governmental entity to adopt such a policy is a matter of local law and will depend in each case on the particular charter of the local government, its ordinances, rules, and regulations. OAG 15-01, 2015 Tenn. AG LEXIS 1 (1/6/15).

The Healthy Workplace Act extends to quasi-governmental entities. “Employer” is defined in the Act as any agency, county, metropolitan government, municipality, or other political subdivision of the state. The definition of “agency” in the Act includes all boards, offices, and other agencies of the executive, legislative, or judicial branches of government. OAG 15-01, 2015 Tenn. AG LEXIS 1 (1/6/15).

NOTES TO DECISIONS

1. Constitutionality.

Even assuming the scope of the Tennessee Claims Commission Act could not be discovered from the caption or from the body of the act in violation of Tenn. Const. art. II, § 17, its subsequent reenactment cured such constitutional objection. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

Trial of a claim for recovery of insurance taxes by the Tennessee claims commission and a review of the decision in the courts satisfies the claimant's right to due process. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

The provision of authority to the Tennessee claims commission to transfer actions for recovery of insurance taxes to the chancery courts under certain circumstances does not violate separation of powers provisions in the constitution. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

Provision of this section that the filing of claims against the state with the claims commission waives any federal cause of action arising out of the same conduct does not violate the supremacy clause of the United States Constitution. Bryant-Bruce v. Vanderbilt Univ., 974 F. Supp. 1127, 1997 U.S. Dist. LEXIS 11552 (M.D. Tenn. 1997).

2. Applicability.

Subdivision (a)(1)(E) has no application to persons paying entrance fees to state maintained recreation facilities merely because there are rules and regulations pertaining to the use thereof. Learue v. State, 757 S.W.2d 3, 1987 Tenn. App. LEXIS 2871 (Tenn. Ct. App. 1987).

Subdivision (a)(1)(E) pertains to persons confined to penal institutions, residences, or health and other similar facilities maintained by the state.Learue v. State, 757 S.W.2d 3, 1987 Tenn. App. LEXIS 2871 (Tenn. Ct. App. 1987).

This section applies to university professors serving on tenure review committee. Purisch v. Tennessee Technological Univ., 76 F.3d 1414, 1996 FED App. 69P, 1996 FED App. 0069P, 1996 U.S. App. LEXIS 3402 (6th Cir. Tenn. 1996).

3. Duty.

This section imposes a duty upon the state independent of other statutes relative to the duties of state and county workhouses to prevent the escape of prisoners. Cox v. State, 844 S.W.2d 173, 1992 Tenn. App. LEXIS 632 (Tenn. Ct. App. 1992).

Finding that the claimant was not entitled to recover benefits after her fiancé committed suicide while incarcerated was proper pursuant to T.C.A. § 9-8-307(c) because the Tennessee Claim Commission correctly determined that the claimant was unable to prove a breach of duty without expert evidence to establish the applicable standards of care by which the appellate court was able to judge the actions of the prison officials and mental health professionals involved in the decision not to implement suicide precautions. Atkinson v. State, 337 S.W.3d 199, 2010 Tenn. App. LEXIS 440 (Tenn. Ct. App. July 9, 2010), appeal denied, — S.W.3d —, 2010 Tenn. LEXIS 1120 (Tenn. Nov. 16, 2010).

4. Recovery.

This section does not limit recovery to persons who suffer injury while in the care, custody and control of the state. Cox v. State, 844 S.W.2d 173, 1992 Tenn. App. LEXIS 632 (Tenn. Ct. App. 1992).

In negligence claim against prison officials, the plaintiff did not allege sufficient facts to establish acts of deliberate indifference by state employees; thus, summary judgment on the claim was appropriate. Luther v. Compton, 5 S.W.3d 635, 1999 Tenn. LEXIS 597 (Tenn. 1999).

When the State of Tennessee was found liable to a claimant for tort damages, those damages were not reduced by insurance adjustments on the claimant's medical bills because the legislature did not clearly express an intent to abrogate the common law collateral source rule as to such damages, so the statutory term “actual damages” did not mean actual amounts paid, and the claimant was entitled to damages based on the claimant's unadjusted medical bills, as the collateral source rule precluded introducing evidence of the insurance adjustments. In re Estate of Tolbert v. State, — S.W.3d —, 2018 Tenn. App. LEXIS 113 (Tenn. Ct. App. Feb. 28, 2018).

5. Jurisdiction.

In case where person was injured in state park swimming pool, commission had jurisdiction under provisions of subdivision (a)(3) (now (a)(1)(C)) relating to negligently created or maintained dangerous conditions on state controlled real property. Learue v. State, 757 S.W.2d 3, 1987 Tenn. App. LEXIS 2871 (Tenn. Ct. App. 1987).

Conduct of the commissioner of general services, board of standards (now procurement commission), and administration division of claims (now division of claims and risk management), in refusing to hear bidder's complaint, in suggesting that bidder had other remedies, and that bidder take its claim to the commission, did not confer subject matter jurisdiction on the commission, and did not estop the state from raising lack of subject matter jurisdiction as a defense. Computer Shoppe, Inc. v. State, 780 S.W.2d 729, 1989 Tenn. App. LEXIS 531 (Tenn. Ct. App. 1989).

Under this section, the claims commission had jurisdiction to decide a claim brought by prisoner for deprivation of statutory right to medical treatment. Bryson v. State, 793 S.W.2d 252, 1990 Tenn. LEXIS 275 (Tenn. 1990).

Federal district court lacks subject matter jurisdiction over monetary claims against the state of Tennessee pursuant to U.S. Const., amend. 11. Thompson v. Regional Medical Center, 754 F. Supp. 594, 1991 U.S. Dist. LEXIS 4215 (W.D. Tenn. 1991).

Claims commission lacks subject matter jurisdiction to rule on hospitals' challenge to the validity of a state Medicaid regulation. Baptist Hosp. v. Tennessee Dep't of Health, 982 S.W.2d 339, 1998 Tenn. LEXIS 718 (Tenn. 1998).

The claims commission has jurisdiction to hear claims that Tennessee's practice of charging handicapped individuals a fee for handicap placards violates the Americans with Disabilities Act. Hedgepeth v. Tennessee, 33 F. Supp. 2d 668, 1998 U.S. Dist. LEXIS 21033 (W.D. Tenn. 1998), aff'd, 215 F.3d 608, 2000 FED App. 197P, 2000 U.S. App. LEXIS 13002 (6th Cir. Tenn. 2000).

The jurisdictional categories in this section should not be interpreted narrowly. A liberal construction, however, is a different proposition than a construction creating a new category. The commission, therefore, does not have subject matter jurisdiction to hear contribution and idemnity claims against the state. Northland Ins. Co. v. State, 33 S.W.3d 727, 2000 Tenn. LEXIS 685 (Tenn. 2000).

When deciding whether a claim is within the proper statutory scope of the commission's jurisdiction to hear and decide claims against the state, the court will give a liberal construction in favor of jurisdiction but only so long as: (1) the particular grant of jurisdiction is ambiguous and admits of several constructions; and (2) the most favorable view in support of the petitioner's claim is not clearly contrary to the statutory language used by the legislature. Stewart v. State, 33 S.W.3d 785, 2000 Tenn. LEXIS 711 (Tenn. 2000).

In a suit against a state official in his or her official capacity is a “suit against the state“ and the suit must be brought in compliance with Article I, Sec. 17 of the Tennessee Constitution; therefore, exclusive jurisdiction for plaintiff's claim against the state was vested in the claims commission pursuant to this section. Whitaker v. Whirlpool Corp., 32 S.W.3d 222, 2000 Tenn. App. LEXIS 171 (Tenn. Ct. App. 2000).

Once the professor filed her breach of contract claim against the university before the Tennessee claims commission and the waiver had been activated, it could not be undone, despite the voluntary dismissal or nonsuit; T.C.A. § 9-8-307(b) provided that filing the claim activated the waiver, regardless of the subsequent disposition of the claim, and dismissal activated the one-year time limit of the savings statute, T.C.A. § 28-1-105; the waiver provision of T.C.A. § 9-8-307(b) was activated upon the filing of the claim, even if the claim was later voluntarily withdrawn or non-suited. Haley v. Univ. of Tennessee-Knoxville, 188 S.W.3d 518, 2006 Tenn. LEXIS 192 (Tenn. 2006).

In a parent's wrongful death action against the state for the death of the parent's child, who had been removed from the parent's custody and placed in an aunt's custody, the Tennessee Claims Commission properly dismissed the claim for lack of jurisdiction because it was not a cause of action authorized by T.C.A. § 9-8-307(a)(1)(E). Mullins v. State, 320 S.W.3d 273,  2010 Tenn. LEXIS 867 (Tenn. Sept. 17, 2010).

Considering the statutory scheme of the Tennessee Claims Commission Act as a whole and T.C.A. § 9-8-307(b) in particular, the initial filing of a notice of claim in the Division of Claims Administration constituted a claim against the state filed pursuant to T.C.A. § 9-8-307(a). Sumner v. Campbell Clinic P.C., 498 S.W.3d 20, 2016 Tenn. App. LEXIS 210 (Tenn. Ct. App. Mar. 29, 2016), appeal denied, Sumner v. Campbell Clinic PC, — S.W.3d —, 2016 Tenn. LEXIS 571 (Tenn. Aug. 18, 2016).

Although the trial court did not expressly rule on the issue of waiver and its effect on subject matter jurisdiction, an inmate properly raised the issue on appeal because prison officials posited throughout the pendency of the action that the trial court lacked subject matter jurisdiction; because the inmate's waiver of the action deprived the trial court of subject matter jurisdiction, the issue required the dismissal of his cause of action and, therefore, it was dispositive of the appeal. Sexton v. Hart, — S.W.3d —, 2019 Tenn. App. LEXIS 168 (Tenn. Ct. App. Apr. 4, 2019).

Because an inmate waived his cause of action by first filing a claim with the Division of Claims Administration, the trial court lacked subject matter jurisdiction to consider the merits of his petition for a writ of mandamus; the inmate waived any other cause of action based on the same acts or omissions that he alleged against the officials in his claim to the Division because it made no finding that the officials were acting outside their offices or employment. Sexton v. Hart, — S.W.3d —, 2019 Tenn. App. LEXIS 168 (Tenn. Ct. App. Apr. 4, 2019).

6. —Claims for Recovery of Taxes.

The sole and exclusive jurisdiction for the recovery of insurance taxes is vested in the Tennessee claims commission. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

Section 56-4-219, requiring a suit in chancery court to recover insurance taxes paid in protest, is not in conflict with this section. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

Rights allowed by student to have been violated under university's honor code, which was regulation, were not “statutory rights” within meaning of (a)(1)(N) and, thus, commission lacked authority to entertain student's claim. Daley v. State, 869 S.W.2d 338, 1993 Tenn. App. LEXIS 434 (Tenn. Ct. App. 1993).

The collection of taxes charged for disabled parking placards under § 55-21-103 could be adequately challenged before the Claims Commission. Hedgepeth v. Tennessee, 215 F.3d 608, 2000 FED App. 197P, 2000 U.S. App. LEXIS 13002 (6th Cir. Tenn. 2000).

7. —Claims for Deprivation of Rights.

A cause of action for negligent deprivation of constitutional rights was not barred by retroactive application of the 1989 amendment deleting the words “or constitutional” from subdivision (a)(1)(N). Shell v. State, 893 S.W.2d 416, 1995 Tenn. LEXIS 14 (Tenn. 1995).

Inmate filed a claim against the State that the trial judge deprived him of his statutory rights because the indictments against him were void and because he was tried, convicted, and sentenced in absentia; he based his claim on T.C.A. §§ 40-3-101, 40-14-101, 40-14-102, 40-17-105, and 40-18-118, and Tenn. R. Crim. P. 43, but none of those statutes and rules expressly conferred a private right of action against the State to him; thus, the Tennessee Claims Commission for the Eastern Grand did not err when it held that it lacked subject matter jurisdiction over the inmate's claim pursuant to T.C.A. § 9-8-307(a)(1)(N) and that the inmate failed to state a claim upon which relief can be granted. Therefore, pursuant to Tenn. Const. art. I, § 17, the Commission did not err when it granted the State's motion to dismiss, Tenn. R. Civ. P. 12.02(1). Williams v. State, 139 S.W.3d 308, 2004 Tenn. App. LEXIS 43 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2004 Tenn. LEXIS 530 (Tenn. June 1, 2004), appeal denied, Williams v. Parker, — S.W.3d —, 2006 Tenn. LEXIS 9 (Tenn. 2006).

8. —Claims for Nuisance.

The building of a state highway which interfered with the natural drainage of water causing damage to an adjoining landowner gave rise to a nuisance claim over which the commission had jurisdiction and inverse condemnation was not the exclusive remedy. Ardis Mobile Home Park v. State, 910 S.W.2d 863, 1995 Tenn. App. LEXIS 790 (Tenn. Ct. App. 1995).

9. —Claims for Negligent Care, Custody and Control.

Confinement in a state institution or facility is not a prerequisite to recovery under subdivision (a)(1)(E); commission had subject matter jurisdiction over action against state for negligence in releasing former mental patient, who shot four people subsequent to his release. Hembree v. State, 925 S.W.2d 513, 1996 Tenn. LEXIS 434 (Tenn. 1996).

Cause of action for negligently created or maintained conditions on state-controlled real property is controlled by this section. Parent ex rel. Parent v. State, 991 S.W.2d 240, 1999 Tenn. LEXIS 246 (Tenn. 1999).

In premises liability case arising from fall by plaintiff on the University of Tennessee campus, plaintiff's claim was dismissed because the proximate cause of plaintiff's injury was a failure on plaintiff's part to exercise ordinary care for personal safety demonstrated by using the lawn for a sidewalk, parking in a no-parking zone, and “cutting corners in order to catch a faculty member before he got in his routine.” Dobson v. State, 23 S.W.3d 324, 1999 Tenn. App. LEXIS 869 (Tenn. Ct. App. 1999).

The Tennessee claims commission lacked jurisdiction pursuant to subdivisions (a)(1)(E) and (F) for the alleged negligence of a state highway patrol officer in failing to properly control county police authorities at an arrest scene. Stewart v. State, 33 S.W.3d 785, 2000 Tenn. LEXIS 711 (Tenn. 2000).

Though the state breached its duty to the prisoner by inadequately training the prisoner and failing to maintain a safe workplace, the prisoner's claim for compensation was denied, as the prisoner was at least 50 percent at fault in causing the injuries. Lewis v. State, 73 S.W.3d 88, 2001 Tenn. App. LEXIS 504 (Tenn. Ct. App. 2001).

Estate's claim did not state an action upon which relief could be granted pursuant to T.C.A. § 9-8-307(a)(1)(E); the claim did not allege that state employees conducted the screening or evaluation of a patient at the nursing home, and there was no showing that the state had care, custody or control and there was no assertion that the state's limited involvement imposed a duty to control the actions of the patient after he was placed in the nursing home. Conley v. State, 141 S.W.3d 591, 2004 Tenn. LEXIS 662 (Tenn. 2004).

White v. Gerbitz, 860 F.2d 661, 1988 U.S. App. LEXIS 14257 (6th Cir. Tenn. 1988), cert. denied, 489 U.S. 1028, 109 S. Ct. 1160, 103 L. Ed. 2d 219, 1989 U.S. LEXIS 928 (1989); Hiefner v. University of Tenn., 914 F. Supp. 1513, 1995 U.S. Dist. LEXIS 20349 (E.D. Tenn. 1995); Mirabella v. University of Tennesee, 915 F. Supp. 925, 1994 U.S. Dist. LEXIS 20841 (E.D. Tenn. 1994).

Parents waived any federal cause of action for damages against agents and employees of the state arising from reports of suspected child abuse by filing a claim with the claims commission based on the same alleged acts or omissions. Bryant-Bruce v. Vanderbilt Univ., 974 F. Supp. 1127, 1997 U.S. Dist. LEXIS 11552 (M.D. Tenn. 1997).

Tennessee Claims Commission properly dismissed an inmate's complaint for lack of subject matter jurisdiction because the statutory scheme did not grant a private right of action for the State's negligent deprivation; the inmate's claim that the State failed to comply with statutes in calculating his sentence fell within a claim for negligent deprivation of statutory rights, and he cited no cases holding that a claim involving a duty conferred by statute fell within subsection (a)(1)(E). Mosley v. State, 475 S.W.3d 767, 2015 Tenn. App. LEXIS 518 (Tenn. Ct. App. June 10, 2015), appeal denied, — S.W.3d —, 2015 Tenn. LEXIS 982 (Tenn. Nov. 24, 2015).

Trial court's dismissal of a patient's claims against a doctor was affirmed where the patient's decision to assert a claim against the State pursuant to the Tennessee Claims Commission Act waived any other claims that the patient had against the doctor based on the same acts or omissions, and thus, the trial court lacked subject matter jurisdiction. Sumner v. Campbell Clinic P.C., 498 S.W.3d 20, 2016 Tenn. App. LEXIS 210 (Tenn. Ct. App. Mar. 29, 2016), appeal denied, Sumner v. Campbell Clinic PC, — S.W.3d —, 2016 Tenn. LEXIS 571 (Tenn. Aug. 18, 2016).

In an appeal involving the jurisdiction of the Claims Commission to hear an action brought by a former medical student, the appellate court concluded the Claims Commission properly determined it had no subject matter jurisdiction because the former student's complaint did not state a claim for the negligent care, custody or control of persons, based on the actions or omissions of a state employee, as provided by T.C.A. § 9-8-307(a)(1)(E). Williams v. State, — S.W.3d —, 2018 Tenn. App. LEXIS 202 (Tenn. Ct. App. Apr. 23, 2018).

10. State Employees.

Where affidavits submitted by doctor enrolled in state medical school's residency program did not show that he was duly licensed in Tennessee or that he was under the direct supervision and control of a Tennessee-licensed physician when he examined plaintiff and referred her for psychiatric evaluation, the doctor's motion for summary judgment based upon subsection (h) immunity failed. Williams v. Shelby County Health Care Corp., 803 F. Supp. 1306, 1992 U.S. Dist. LEXIS 15697 (W.D. Tenn. 1992).

Absolute immunity granted pursuant to T.C.A. § 9-8-307 to a state-employed physician was not removed by the creation of a dual master relationship; nothing in the statute immunizes a private hospital from the acts or omissions of physicians employed by the state who are also acting as agents or servants of the private hospital. Johnson v. LeBonheur Children's Med. Ctr., 74 S.W.3d 338, 2002 Tenn. LEXIS 193 (Tenn. 2002).

In a wrongful death action by the widow of the deceased, who was an inmate in a county jail, because the healthcare providers provided crisis response services under a grant of the Tennessee department of mental health and mental retardation to determine who may be suicidal and to determine the form of treatment that would be most effective, the healthcare providers were community-based screening agencies that functioned under T.C.A. §§ 33-2-601 through 33-2-604 (§§ 33-6-603 and 33-6-604 now repealed), and because healthcare providers who screened incarcerated individuals were not precluded from state employee status under T.C.A. § 8-42-101(3)(D), the employee was an immune state employee pursuant to T.C.A. § 9-8-307 and was not liable to the widow in the wrongful death claim; however, the employee's personal immunity did not prevent the healthcare providers from being held vicariously liable for the employee's negligence under the doctrine of respondeat superior and the trial court improperly granted the healthcare providers' motion for summary judgment under Tenn. R. Civ. P. 56.04. Shelburne v. Frontier Health, 126 S.W.3d 838, 2003 Tenn. LEXIS 367 (Tenn. 2003).

Estate failed to state a cause of action under T.C.A. § 9-8-307(a)(1)(D); although pre-admission screening is required by federal statute, the evaluations were not conducted by state employees, pursuant to 42 U.S.C. § 1396r(b)(3)(F), and the claim did not allege any facts that would establish a professional/client relationship between the estate or the decedent and a state employee, such that the claim failed to satisfy the requirements for a medical malpractice claim. Conley v. State, 141 S.W.3d 591, 2004 Tenn. LEXIS 662 (Tenn. 2004).

Applicant for a teaching position at a state community college did not waive the applicant's Tennessee Human Rights Act, T.C.A. § 4-21-101 et seq., cause of action against the Tennessee Board of Regents and the college by virtue of the applicant filing a claim in the Tennessee Claims Commission because the statutory waiver provision did not apply to the Board or the college in that neither the Board, nor the college were included in the statutory definition of state officers or employees. Watson v. Tenn. Bd. of Regents, — S.W.3d —, 2018 Tenn. App. LEXIS 10 (Tenn. Ct. App. Jan. 12, 2018).

11. Sovereign Immunity.

University of Tennessee resident physicians' receipt of educational benefit from their residency programs did not exclude such resident physicians from immunity as state employees under the exception in subsection (h). Thompson v. Regional Medical Center, 748 F. Supp. 575, 1990 U.S. Dist. LEXIS 14281 (W.D. Tenn. 1990).

The Tennessee Claims Commission Act did not deprive federal district court of jurisdiction over medical malpractice action against defendants in their individual capacity. Rather, it granted absolute immunity to defendants who were state employees acting within the scope of their employment. Thompson v. Regional Medical Center, 754 F. Supp. 594, 1991 U.S. Dist. LEXIS 4215 (W.D. Tenn. 1991).

The Tennessee Claims Commission Act authorized lawsuit by victim who was beaten, raped and sodomized by inmate on work release assignment; consequently, the public duty doctrine had no applicability, either as a rule of standing or as a common law defense to negligence. Cox v. State, 844 S.W.2d 173, 1992 Tenn. App. LEXIS 632 (Tenn. Ct. App. 1992).

This section authorized claimant who was beaten, raped and sodomized by inmate on work release assignment to recover against the state for damages she sustained as a result of the state's “negligent care, custody and control of persons.” Cox v. State, 844 S.W.2d 173, 1992 Tenn. App. LEXIS 632 (Tenn. Ct. App. 1992).

Under subsection (d) the state may assert the common law immunity which has developed in this state with regard to discretionary actions of state employees. Cox v. State, 844 S.W.2d 173, 1992 Tenn. App. LEXIS 632 (Tenn. Ct. App. 1992).

Section immunizes state officers and employees from liability for acts or omissions within the scope of their employment, except for willful, malicious, or criminal acts or omissions or acts or omissions done for personal gain. Wynn v. Morgan, 861 F. Supp. 622, 1994 U.S. Dist. LEXIS 16833 (E.D. Tenn. 1994).

Discretionary function immunity is a qualified, good faith immunity, rather than an absolute immunity. By the express provisions of T.C.A. § 9-8-307(d), it cannot be relied upon by the state in an action before the Tennessee claims commission. Even in the absence of a clear legislative mandate such as is contained in § 9-8-307(d), the state may not assert discretionary function immunity as a matter of law so as to justify summary judgment. Lucas v. State, 141 S.W.3d 121, 2004 Tenn. App. LEXIS 83 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2004 Tenn. LEXIS 583 (Tenn. June 21, 2004).

Under no circumstances is any immunity available to the state that could not be characterized as “absolute immunity,” such being the only type of immunity that survives the enactment of the Tennessee Claims Commission Act, T.C.A. § 9-8-301, et seq.Lucas v. State, 141 S.W.3d 121, 2004 Tenn. App. LEXIS 83 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2004 Tenn. LEXIS 583 (Tenn. June 21, 2004).

Where the inmate asserted that a doctor and a facility administrator were negligent with respect to his treatment for hepatitis, the record showed that none of the medical aid rendered at the private for-profit correctional facility was administered by an employee of the state, and rather, each of the individuals was an employee of an independent contractor; thus summary judgment for the state was proper as it enjoyed sovereign immunity and the proper defendant for the inmate's negligence claims would have been the private contractor or its employees. Younger v. State, 205 S.W.3d 494, 2006 Tenn. App. LEXIS 54 (Tenn. Ct. App. 2006), appeal denied, — S.W.3d —, 2006 Tenn. LEXIS 628 (Tenn. 2006).

Congress' legislative record in passing 17 U.S.C. § 511, did not establish a pattern of unconstitutional conduct, inadequate state law remedies, or that the federal remedy proscribed and made actionable no more facially constitutional state conduct than reasonably necessary in relation to a constitutional harm, and thus, plaintiff copyright holder's infringement claim against defendant state tourist department failed; while the department had not shown that claims under T.C.A. §§ 9-8-305(1), 9-8-307, provided an alternative remedy, the holder had not pointed to any evidence in the legislative history indicating that Congress considered the unavailability of remedies under state law in deciding to abrogate the states' immunity from federal suit. Jacobs v. Memphis Convention & Visitors Bureau, 710 F. Supp. 2d 663,  2010 U.S. Dist. LEXIS 70990 (W.D. Tenn. May 10, 2010).

Tennessee Claims Commission did not err in granting the State's motion to dismiss an employee's action alleging that he was entitled to compensation pursuant to former T.C.A. § 8-30-224 because the Legislature did not expressly confer a private right of action in favor of an individual claimant against the State for its violation of former T.C.A. § 9-8-307(a)(1)(N) as required by T.C.A. § 9-8-307(a)(1)(N). Brown v. State, 333 S.W.3d 102, 2010 Tenn. App. LEXIS 203 (Tenn. Ct. App. Mar. 19, 2010), appeal denied, — S.W.3d —, 2010 Tenn. LEXIS 841 (Tenn. Sept. 1, 2010).

12. Notice.

A district highway superintendent whose primary responsibility is to keep the roads safe for public travel in any kind of conditions and to keep warning signs visible is one of the proper state officials for the purpose of satisfying the notice requirement. Sweeney v. State, 768 S.W.2d 253, 1989 Tenn. LEXIS 126 (Tenn. 1989).

Claims commission did not err in dismissing suit brought by a visitor to a state office building who injured herself when she fell on the icy parking lot based on a finding that the state did not have sufficient notice of the icy parking lot as required by T.C.A. § 9-8-307(a)(1)(C) to support a finding of negligence, and had no duty to constantly monitor weather conditions. Bowman v. State, 206 S.W.3d 467, 2006 Tenn. App. LEXIS 198 (Tenn. Ct. App. 2006), appeal denied, — S.W.3d —, 2006 Tenn. LEXIS 948 (Tenn. Oct. 16, 2006).

13. State Highways.

The evidence showed that the state was negligent, and that a dangerous condition existed at the accident site under the factors set forth in Sweeney v. State, 768 S.W.2d 253, 1989 Tenn. LEXIS 126 (Tenn. 1989); Goodermote v. State, 856 S.W.2d 715, 1993 Tenn. App. LEXIS 155 (Tenn. Ct. App. 1993).

Dangerous condition found. Sweeney v. State, 768 S.W.2d 253, 1989 Tenn. LEXIS 126 (Tenn. 1989).

State of Tennessee was negligent where it failed to install a guardrail, earthen berm, or other safety mechanism across an opening between twin bridges, even though the plans for the highway included them. Goodermote v. State, 856 S.W.2d 715, 1993 Tenn. App. LEXIS 155 (Tenn. Ct. App. 1993).

The state has a duty to exercise reasonable care under all the attendant circumstances in planning, designing, constructing and maintaining the state system of highways. Goodermote v. State, 856 S.W.2d 715, 1993 Tenn. App. LEXIS 155 (Tenn. Ct. App. 1993).

Plaintiff was not required to show that the state could foresee the specific facts of the automobile accident before plaintiff could recover; it was necessary only that the plaintiff establish that the state could have foreseen the general manner in which the injury or loss occurred. Goodermote v. State, 856 S.W.2d 715, 1993 Tenn. App. LEXIS 155 (Tenn. Ct. App. 1993).

In an unsafe roads case, a court properly denied the state's motion for summary judgment, asserted on the basis that it was entitled to discretionary function immunity; discretionary function immunity is a qualified immunity and not an absolute immunity. Lucas v. State, 141 S.W.3d 121, 2004 Tenn. App. LEXIS 83 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2004 Tenn. LEXIS 583 (Tenn. June 21, 2004).

Decedent's estates were entitled to recover damages from the State of Tennessee, following a motor vehicle accident at a newly constructed highway intersection, because the evidence preponderated against the determination that the risk involved at the intersection was foreseeable, or that notice was provided to the proper state officials sufficiently prior to the injury for the state officials to have taken appropriate measures. Church v. Charles Blalock & Sons, Inc., 492 S.W.3d 263, 2015 Tenn. App. LEXIS 830 (Tenn. Ct. App. Oct. 9, 2015), appeal denied, — S.W.3d —, 2016 Tenn. LEXIS 122 (Tenn. Feb. 18, 2016).

State of Tennessee was not entitled to summary judgment when a motorcyclist alleged that the motorcyclist was in an accident caused by loose gravel from a recent paving project on a state highway because the motorcyclist presented just enough evidence to allow a fact finder to consider whether a state employee's inspection of the highway was negligent and whether the State had constructive notice of the loose gravel on the highway. 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).

14. State-Controlled Real Property.

Subdivision (a)(1)(C) removes the state's immunity to the same extent as the obligation of a private owner or occupier of land; in other words, for the purposes of determining the state's liability after removal of immunity, this section merely codifies the common law obligation of the owner or occupier of land who has an obligation to exercise ordinary care and diligence in maintaining his premises in a safe condition for visitors upon the premises, and is under an affirmative duty to protect these persons against dangers of which they know or which, with reasonable care, they might discover. Sanders v. State, 783 S.W.2d 948, 1989 Tenn. App. LEXIS 625 (Tenn. Ct. App. 1989).

For the purposes of deciding the state's liability after removal of immunity, this section codifies the common law obligation of owners and occupiers of land. Hames v. State, 808 S.W.2d 41, 1991 Tenn. LEXIS 135 (Tenn. 1991).

The absence of lightning proof shelters or devices to warn golfers of thunderstorms on a golf course owned and operated by the state did not constitute a negligently created or maintained dangerous condition within the meaning of subdivision (a)(1)(C). Hames v. State, 808 S.W.2d 41, 1991 Tenn. LEXIS 135 (Tenn. 1991).

The state was not liable to plaintiff who injured herself when she stepped in a hole at a state park, where she failed to show that the state had notice, actual or constructive, of the condition that caused her injuries. Byrd v. State, 905 S.W.2d 195, 1995 Tenn. App. LEXIS 343 (Tenn. Ct. App. 1995), appeal denied, 1995 Tenn. LEXIS 497 (Tenn. Aug. 28, 1995).

The state is not the insurer of those who enter upon its facilities; therefore, where plaintiff failed to exercise ordinary care for own safety while at a state university, plaintiff's premises liability claim was dismissed. Dobson v. State, 23 S.W.3d 324, 1999 Tenn. App. LEXIS 869 (Tenn. Ct. App. 1999).

15. Personal Property.

Damages for the loss or destruction of personal property are measured by the market value of the property at the time of its loss. Reid v. State, 9 S.W.3d 788, 1999 Tenn. App. LEXIS 272 (Tenn. Ct. App. 1999), rehearing denied, — S.W.3d —, 1999 Tenn. App. LEXIS 441 (Tenn. Ct. App. June 10, 1999).

16. Breach of Contract.

The 1989 amendment of subdivision (a)(1)(L) is not retroactive. Computer Shoppe, Inc. v. State, 780 S.W.2d 729, 1989 Tenn. App. LEXIS 531 (Tenn. Ct. App. 1989).

Neither the college handbook or the acceptance letter to medical school was a contract between the college and the medical student because: (1) The state did not intend to be contractually bound by the contents of the handbook; and (2) If the acceptance letter was a contract, its terms had been completed long before the current action; therefore, the Tennessee claims commission's decision granting summary judgment to the state and dismissing the student's claim for damages against the college for the student's removal from a clerkship and the creation of requirements the student had to complete in order to be allowed to resume medical school classes was proper. Ku v. State, 104 S.W.3d 870, 2002 Tenn. App. LEXIS 888 (Tenn. Ct. App. 2002), review or rehearing denied, — S.W.3d—, 2003 Tenn. LEXIS 396 (Tenn. 2003).

Trial court did not err by capping a state university's liability at $300,000 pursuant to T.C.A. § 9-8-307(e) because the damages were awarded for tort liability, not breach of contract, and the indemnification agreement at issue manifested no specific intent to create enforceable rights in persons who may be injured by the conduct of the State and a building owner who held a state university function on his premises, who were the parties to the indemnification agreement. Wells v. State, 435 S.W.3d 734, 2013 Tenn. App. LEXIS 670 (Tenn. Ct. App. Oct. 8, 2013), appeal denied, — S.W.3d —, 2014 Tenn. LEXIS 323 (Tenn. Apr. 9, 2014).

17. Post-Judgment Interest.

The $300,000 limit for the recovery of damages in tort claims against the state does not include post-judgment interest, and post-judgment interest can be awarded over and above the $300,000 cap. Austin v. State, 831 S.W.2d 789, 1991 Tenn. App. LEXIS 938 (Tenn. Ct. App. 1991).

Post-judgment interest does not constitute a part of “damages” within the meaning of subsection (e). Austin v. State, 831 S.W.2d 789, 1991 Tenn. App. LEXIS 938 (Tenn. Ct. App. 1991).

18. Limitations of Actions.

For purposes of the statute of limitations, accrual of a cause of action for negligent deprivation of constitutional rights was determined by reference to generally applicable principles of negligence law. Shell v. State, 893 S.W.2d 416, 1995 Tenn. LEXIS 14 (Tenn. 1995).

Where the circuit court did not transfer claimant's legal malpractice action against the state because of a failure to meet the consent requirements of paragraph (i)(1) for transfer, the claimant could not rely upon the filing of the complaint in the circuit court to toll the running of the statute of limitations and, therefore, the claim was properly dismissed. Locust v. State, 912 S.W.2d 716, 1995 Tenn. App. LEXIS 381 (Tenn. Ct. App. 1995), superseded by statute as stated in, Brown v. State, — S.W.3d —, 2003 Tenn. App. LEXIS 329 (Tenn. Ct. App. May 2, 2003).

19. Costs.

The state may not be taxed discretionary or litigation costs absent an express legislative mandate. Phillips v. Tennessee Tech. Univ., 984 S.W.2d 217, 1998 Tenn. LEXIS 715 (Tenn. 1998).

The state may be liable for fees charged to a worker's compensation claimant by a treating physician or specialist, as provided in § 50-6-226(c)(1). Phillips v. Tennessee Tech. Univ., 984 S.W.2d 217, 1998 Tenn. LEXIS 715 (Tenn. 1998).

Subsection (d) specifically prohibits the Commissioner from taxing discretionary costs against the state. Reid v. State, 9 S.W.3d 788, 1999 Tenn. App. LEXIS 272 (Tenn. Ct. App. 1999), rehearing denied, — S.W.3d —, 1999 Tenn. App. LEXIS 441 (Tenn. Ct. App. June 10, 1999).

20. “Claimant” Defined.

The term “claimant” as found in T.C.A. § 9-8-307(e) means “decedent” when viewed in context with the relevant wrongful death statutes, T.C.A. §§ 20-5-106 and 20-5-113; thus, decedent's parents were limited to a maximum recovery in a wrongful death action against the State where the decedent was the only “claimant” under the tort claims statute and the parents were not entitled to an award for their own losses. Ki v. State, 78 S.W.3d 876, 2002 Tenn. LEXIS 307 (Tenn. 2002).

21. Transfer of Claims.

Prisoner's case was based solely on medical negligence, and did not involve the negligent operation of a motor vehicle or other land, air, or sea conveyance; therefore, even if the prisoner had requested such a transfer, T.C.A. § 9-8-307(i)(1) would not have authorized the Chancery Court to transfer his lawsuit to the Tennessee Claims Commission, such that the request would not have been granted for failure to meet the criteria of § 9-8-307(i)(1), and consequently the filing of the chancery lawsuit did not toll the statute of limitations. Turner v. State, 184 S.W.3d 701, 2005 Tenn. App. LEXIS 380 (Tenn. Ct. App. 2005).

Decisions Under Prior Law

1. Implied Contracts.

Suits against the state may only be brought in such manner and in such courts as the legislature may by law direct and the former law granted permission to bring suit only on express contracts. Greenhill v. Carpenter, 718 S.W.2d 268, 1986 Tenn. App. LEXIS 3582 (Tenn. Ct. App. 1986). (Decision under former law.)

2. Liability Restricted to Enumerated Classes.

Where Public Acts 1951, ch. 268, § 2A made appropriations for payment of claims against state which were not to be paid until after investigation and determination by board of claims but expressly provided that the inclusion of these items in the bill did not create any new liability against the state, the legislature intended that no claim could be approved by the board for payment unless a claim fell within one of enumerated classes in Board of Claims Act, hence a claim of surety company of subcontractor who paid principal contractor for finishing construction of road could not be paid, since it was not included in any of the enumerated classes. Daugherty v. S. & W. Const. Co., 196 Tenn. 357, 268 S.W.2d 94, 1954 Tenn. LEXIS 389 (1954).

3. Jurisdiction.

The board's jurisdiction is limited to the cases specified in the statute and this limitation cannot be enlarged by implication. Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 1956 Tenn. LEXIS 329 (1956).

Board of claims did not have jurisdiction under this section to entertain claim for wrongful death of plaintiff's husband resulting from action of drunken convict in driving prison truck across sidewalk and into front of restaurant. Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 1956 Tenn. LEXIS 329 (1956).

4. —Declaratory Judgments.

Court did not have jurisdiction under the declaratory judgment law to entertain suit for declaratory judgment as to jurisdiction of board to entertain claims against state. Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 1956 Tenn. LEXIS 329 (1956). See also, Schoenly v. Nashville Speedways, Inc., 208 Tenn. 107, 344 S.W.2d 349, 1961 Tenn. LEXIS 401 (1961).

Action of board in refusing to entertain plaintiff's claim against state was final and plaintiff was not thereafter entitled to declaratory judgment as to jurisdiction of board to entertain such claim. Hill v. Beeler, 199 Tenn. 325, 286 S.W.2d 868, 1956 Tenn. LEXIS 329 (1956).

5. Effect of Award.

Determination and award on a claim of the nature referred to herein is to be likened to a judgment and the payment of such award is not to be treated as a gratuity or a covenant not to sue but as a satisfaction of the judgment. Schoenly v. Nashville Speedways, Inc., 208 Tenn. 107, 344 S.W.2d 349, 1961 Tenn. LEXIS 401 (1961).

6. Joint Tort-Feasors.

Injured person who claimed that injuries were the result of negligence of state highway patrolman and who was awarded damages by board could not maintain subsequent action against others who were joint tort-feasors with patrolman. Schoenly v. Nashville Speedways, Inc., 208 Tenn. 107, 344 S.W.2d 349, 1961 Tenn. LEXIS 401 (1961).

7. Sovereign Immunity.

Tennessee has waived its sovereign immunity from liability in negligence action only to limited extent provided in statute creating state board of claims. Hill v. United States, 453 F.2d 839, 1972 U.S. App. LEXIS 11853, 15 A.L.R. Fed. 658 (6th Cir. Tenn. 1972).

9-8-308. Privilege tax on filing of claims — Exemption.

  1. There is levied a privilege tax on the filing of claims with the claims commission of twenty-five dollars ($25.00) on each claim filed with the claims commission; provided, that no tax shall be levied on claimants who consent at the time of filing with the administrative clerk for their claims to be assigned to the small claims docket under § 9-8-403(a)(2), and proceed upon affidavits filed with the claims commission without a hearing. The tax shall be collected by the administrative clerk of the claims commission, and all funds collected by the clerk shall be paid over to the appropriate fund, as shall be determined by the state treasurer. Claims automatically transferred to the claims commission by the division of claims and risk management pursuant to § 9-8-402(c) due to a failure to honor or deny the claim during the ninety-day settlement period shall not be subject to the privilege tax established by this section. Notwithstanding any limit on the amount which may be awarded to a claimant, the commissioner or the reviewing court shall have the discretion to order that the privilege tax paid pursuant to this section be refunded to a claimant whose claim is determined to be meritorious.
  2. Any person shall be permitted to file a claim with the claims commission without paying the privilege tax established by subsection (a) by taking and subscribing the following oath in writing: “I,  , do solemnly swear, that, owing to my poverty, I am not able to pay the privilege tax ordinarily required to file a claim with the claims commission and that I am justly entitled to the damages sought to the best of my belief.”

Acts 1989, ch. 491, § 6; 1990, ch. 755, § 14; 1993, ch. 494, § 3; 1998, ch. 785, § 15; 2017, ch. 271, § 1.

9-8-309. Temporary assignment of administrative law judges to commission.

Upon the request of the governor, or of an individual claims commissioner as to claims within that commissioner's grand division, or of a majority of the claims commissioners as to claims within any grand division, the secretary of state may assign administrative law judges from the administrative procedures division of the secretary of state's office to assist in the removal of unacceptable congestion, delay on the claims commission docket or in the event of a claims commissioner's recusal or disability. Upon such assignment, administrative law judges shall have all the powers, duties and immunities as a regularly appointed claims commissioner. Costs associated with the assignment of administrative law judges to hear claims commission matters shall be paid from the risk management fund.

Acts 1997, ch. 165, § 1; 2003, ch. 212, § 8; 2013, ch. 380, § 1.

Cross-References. Grand divisions, title 4, ch. 1, part 2.

9-8-310. Retaliatory termination for filing of claim — Filing of grievances.

  1. An entity of state government may not terminate a state employee for filing a workers' compensation claim with the claims commission.
  2. Any employee terminated for filing a workers' compensation claim may file a grievance in accordance with § 8-30-318, or may file a claim with the claims commission, at the option of such employee, in accordance with this part.

Acts 1998, ch. 738, § 1; 1999, ch. 54, § 1.

Compiler's Notes. This section shall apply to all cases claiming retaliatory discharge for filing a workers' compensation claim against the State of Tennessee with the claims commission on or after July 1, 1992, pending or on appeal April 14, 1998, and all arising on or after April 14, 1998.

Acts 1999, ch. 54, § 2 provided that this section as amended by Acts 1999, ch. 54, § 1, applies to all cases filed with the claims commission on or after July 1, 1992, pending or on appeal on April 7, 1999 and all arising on or after April 7, 1999.

NOTES TO DECISIONS

1. Jurisdiction.

The Tennessee claims commission did have subject matter jurisdiction to decide the plaintiff's claim for retaliatory discharge. Morris v. State, 1999 Tenn. LEXIS 274 (Tenn. May 24, 1999).

9-8-311. Confidentiality of medical records maintained by commission.

  1. Medical records received and maintained by the commission shall be treated as confidential and shall not be open for inspection by members of the public pursuant to title 10, chapter 7.
  2. As used in this section:
    1. “Healthcare provider” means healthcare professionals, establishments, or facilities licensed, registered, certified, or permitted pursuant to title 63 or title 68 and regulated under the authority of either the department of health or any agency, board, council, or committee attached to the department of health; and
    2. “Medical record” means any and all documents maintained by a healthcare provider relating to a patient's diagnosis, care, and treatment, including, but not limited to, notes, reports, memos, e-mails, facsimile transmissions, laboratory tests, billing documents, and medication orders.

Acts 2015, ch. 47, § 1.

Cross-References. Confidentiality of Public Records, § 10-7-504.

Part 4
Division of Claims and Risk Management

9-8-401. Creation.

There is hereby created a division of claims and risk management as a division of the department of the treasury. The staff of the present board of claims shall also be the staff of the division of claims and risk management.

Acts 1984, ch. 972, § 9; 2017, ch. 271, § 1.

9-8-402. Claims.

    1. The claimant must give written notice of the claimant's claim to the division of claims and risk management as a condition precedent to recovery, except claims for recovery of taxes shall be filed directly with the administrative clerk of the claims commission. The filing of a false notice with the division of claims and risk management is punishable as a Class A misdemeanor.
    2. The notice shall state the circumstances upon which the claim is based, including, but not limited to: the state department, board, institution, agency, commission or other state entity that allegedly caused the injury; the time and place of the incident from which the claim arises; and the nature of the claimant's injury.
    3. The entire disputed amount of tax, penalty and interest must be paid under protest before any action can be filed contesting the assessment of any tax. The claim for recovery of taxes must be filed with the claims commission within six (6) months of the payment under protest. This is the sole and exclusive jurisdiction for determining tax liability, except that any tax collected or administered by the commissioner of revenue shall be contested according to chapter 749 of the Acts of 1986, and any unemployment insurance tax collected or administered by the commissioner of labor and workforce development shall be contested according to title 50, chapter 7.
    4. No writ for the prevention of the collection of any revenue claimed, or to hinder and delay the collection of the same, shall in anywise issue, either injunction, supersedeas, prohibition, or any other writ or process whatever; but in all cases in which, for any reason, any person shall claim that the tax so collected was wrongfully or illegally collected, the remedy for that party shall be as herein provided, and in no other manner.
    5. The notice to the division is deemed to be notice to the employer for workers' compensation purposes. Claims not within the jurisdiction of the claims commission shall be sent to the board of claims. A copy of any claim filed with or transferred to the claims commission must be served on the attorney general and reporter and the division of claims and risk management by certified mail, return receipt requested, or by such other method as the attorney general and reporter deems appropriate.
  1. The claim is barred unless the notice is given within the time provided by statutes of limitations applicable by the courts for similar occurrences from which the claim arises; provided, however, that, for workers' compensation purposes, the right to compensation and other benefits under the Workers' Compensation Law, compiled in title 50, chapter 6, shall be barred, unless the notice required by subsection (a) is filed with the division of claims and risk management within one (1) year after the accident resulting in injury. The filing of the notice by the claimant tolls all statutes of limitations as to other persons potentially liable to the claimant due to the occurrence from which the claim before the commission arises. The applicable statute of limitations for the recovery of taxes shall continue to be six (6) months after the payment of the taxes under protest. Absent prior written consent of the commission, it is mandatory that any claim filed with the claims commission upon which no action is taken by the claimant to advance the case to disposition within any one-year period of time be dismissed with prejudice.
  2. The division of claims and risk management shall investigate every claim and shall make every effort to honor or deny each claim within ninety (90) days of receipt of the notice. If the claim is denied, the division shall so notify the claimant and inform the claimant of the reasons therefor and of the claimant's right to file a claim with the claims commission within ninety (90) days of the date of the denial notice. If the claim is honored and the damages may be ascertained within the ninety-day settlement period, the division shall so notify the claimant, and inform the claimant of the conditions of the settlement offer, and of the claimant's right to file such claimant's claim with the claims commission within ninety (90) days of the date of the settlement notice if the conditions of the settlement offer are unacceptable. If the claim is honored and the amount of damages may not be ascertained within the ninety-day settlement period because evidence of loss will be obtained after the ninetieth day of the settlement period, the division shall so notify the claimant and inform the claimant of the claimant's right to file a claim with the claims commission within ninety (90) days of the date the division forwards final compensation to the claimant or upon written request for transfer to the commission by the claimant; provided, that final compensation shall be forwarded to the claimant within one (1) year of the date of the settlement notice. If the division fails to honor or deny the claim within the ninety-day settlement period, the division shall automatically transfer the claim to the administrative clerk of the claims commission.
    1. Notwithstanding subsection (c) or any other law to the contrary, if the division denies the compensability of a workers' compensation claim, the division shall so notify the claimant and inform the claimant of the reasons for the denial, and of the claimant's right to request an alternative dispute resolution, pursuant to § 50-6-236, within ninety (90) days from the date of the denial notice. If the division fails to honor or deny the compensability of a workers' compensation claim within the ninety-day settlement period, the division shall submit the dispute to the alternative dispute resolution process, as provided in § 50-6-236.
    2. Where the division of claims and risk management has paid workers' compensation benefits, either voluntarily or as a result of an order to do so, within one (1) year following the accident resulting in injury, the claimant must file a petition for benefit determination, pursuant to § 50-6-236, no later than one (1) year from the latter of the date of the last authorized treatment or the time the division ceased to make payments of compensation to or on behalf of the claimant, in order for the claimant to recover any unpaid or further workers' compensation benefits. For purposes of this section, the issuing date of the last voluntary payment of compensation, not the date of its receipt, shall constitute the time the division ceased making payments and the division shall provide such date on request.
    3. In conducting any alternative dispute resolution pursuant to this subsection (d), the conference shall be held in the county where the employee lives, unless otherwise agreed to between the parties or otherwise directed by the commissioner. A workers' compensation specialist, as defined in § 50-6-102, shall have the authority to continue or reschedule an alternative dispute resolution.
    4. In the event an agreement cannot be reached through alternative dispute resolution as to all issues related to the claim, the claimant shall have ninety (90) days, after the issuance of a dispute certification notice as provided in § 50-6-236, to file a claim with the claims commission. A claim for workers' compensation benefits must be instituted in the claims commission within that ninety (90) days.
    5. No claim for workers' compensation shall be filed with the claims commission until the alternative dispute resolution process, as provided in § 50-6-236, has been exhausted. Notwithstanding this subsection (d), if the parties have mutually agreed to a compromise and settlement of a claim for workers' compensation, the parties shall not be required to exhaust the alternative dispute resolution process before filing a claim and submitting the compromise and settlement to the claims commission for approval, pursuant to § 9-8-307(a)(1)(K), or to a workers' compensation judge pursuant to § 50-6-240. If the settlement is not approved, the parties shall then exhaust the alternative dispute resolution process.
    6. The right to compensation for an occupational disease, or a claim for death benefits as a result of an occupational disease, must be initiated within the time periods set forth in this section; provided, however, that the applicable time limitation period or periods shall commence as of the date of the beginning of the incapacity for work resulting from an occupational disease, or upon the date death results from the occupational disease; provided, however, that, if, upon the date of the death of the employee, the employee's claim has become barred, the claim of the employee's dependent or dependents shall likewise be barred.
    7. In case of physical or mental incapacity, other than minority, of the injured person or such injured person's dependents to perform or cause to be performed any action required within the time specified in this section, then the period of limitation in such case shall be extended for one (1) year from the date when such incapacity ceases.

Acts 1984, ch. 972, § 10; 1985, ch. 105, §§ 2, 9, 10; 1986, ch. 626, § 11; 1986, ch. 749, § 2; 1989, ch. 591, §§ 1, 6; 1998, ch. 785, §§ 16, 17; 2004, ch. 699, § 2; 2005, ch. 384, §§ 4-6; 2013, ch. 289, §§ 96-99; 2017, ch. 271, § 1.

Compiler's Notes. For disposition of Acts 1986, ch. 749, see the Session Law Disposition Table in Volume 13 of the Tennessee Code Annotated.

Acts 2005, ch. 384, § 7 provided that the act shall apply to accidents or injuries occurring on or after July 1, 2005.

Acts 2013, ch. 289, § 103 provided that the act, which amended this section, shall be known and may be cited as the “Workers' Compensation Reform Act of 2013.”

Cross-References. Payment of tax under protest, title 67, ch. 1, part 9.

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

NOTES TO DECISIONS

1. Applicability.

This section does not apply to action by parents of an emotionally disturbed child under Federal Education of All Handicapped Children Law for repayment of education expenses, as it applies only to claims against the state. Janzen v. Knox County Bd. of Education, 790 F.2d 484, 1986 U.S. App. LEXIS 24930 (6th Cir. Tenn. 1986).

2. Statutes of Limitation.

The time for pursuing a remedy against the state can be extended neither by filing an unauthorized suit in an unauthorized forum, nor by the application of the “savings statute,” § 28-1-105, which does not specifically apply to claims against the state. Brown v. State, 783 S.W.2d 567, 1989 Tenn. App. LEXIS 727 (Tenn. Ct. App. 1989).

Where the circuit court did not transfer claimant's legal malpractice action against the state because of a failure to meet the consent requirements of § 9-8-307(i)(1) for transfer, the claimant could not rely upon the filing of the complaint in the circuit court to toll the running of the statute of limitations and, therefore, the claim was properly dismissed. Locust v. State, 912 S.W.2d 716, 1995 Tenn. App. LEXIS 381 (Tenn. Ct. App. 1995), superseded by statute as stated in, Brown v. State, — S.W.3d —, 2003 Tenn. App. LEXIS 329 (Tenn. Ct. App. May 2, 2003).

Tennessee Claims Commission for the Eastern Grand properly held the inmate's claim against the state was barred by the statute of limitations because (1) the inmate filed his claim against the state well beyond the one-year statute of limitations in T.C.A. §§ 9-8-402(b) and 28-3-104(a); and (2) the inmate had full knowledge of the facts relevant to his alleged injury when it occurred because he knew that he was being tried and sentenced in abstentia; thus, the Commission did not err when it granted the State's motion to dismiss, Tenn. R. Civ. P. 12. Williams v. State, 139 S.W.3d 308, 2004 Tenn. App. LEXIS 43 (Tenn. Ct. App. 2004), appeal denied, — S.W.3d —, 2004 Tenn. LEXIS 530 (Tenn. June 1, 2004), appeal denied, Williams v. Parker, — S.W.3d —, 2006 Tenn. LEXIS 9 (Tenn. 2006).

Alleged injured party's claim against a city was time-barred because the Claims Commission Act's tolling provision, T.C.A. § 9-8-402(b), did not toll the statute of limitations for a claim against a city under the Governmental Tort Liability Act, as no language in the Claims Commission Act expressly declared such a legislative intent. Moreno v. City of Clarksville, 479 S.W.3d 795, 2015 Tenn. LEXIS 741 (Tenn. Sept. 18, 2015).

There was more than a one-year lapse between claimant's February 2016 complaint and her March 2017 letter, and another such lapse occurred between the March 2017 letter and claimant's July 2018 complaint; the record included no indication that claimant sought the written consent of the Claims Commission for her failure to take any action during the periods that the case sat dormant, and thus the action was properly dismissed. Ledford ex rel. Rodriguez v. State, — S.W.3d —, 2020 Tenn. App. LEXIS 144 (Tenn. Ct. App. Apr. 7, 2020).

Dismissal of a spouse's loss of consortium claim by the Tennessee Claims Commission was appropriate because the spouse failed to comply with the statutory notice requirement when the spouse failed to file separate notice of the claim with the Tennessee Division of Claims Administration (DCA) within one year of a motor vehicle accident. The lack of notice to the DCA was not cured by inclusion of the loss of consortium claim in the Tennessee Claims Commission complaint, which was filed within one year of the accident. Kampmeyer v. State, — S.W.3d —, 2020 Tenn. App. LEXIS 390 (Tenn. Ct. App. Aug. 28, 2020).

3. Jurisdiction.

Because an inmate waived his cause of action by first filing a claim with the Division of Claims Administration, the trial court lacked subject matter jurisdiction to consider the merits of his petition for a writ of mandamus; the inmate waived any other cause of action based on the same acts or omissions that he alleged against the officials in his claim to the Division because it made no finding that the officials were acting outside their offices or employment. Sexton v. Hart, — S.W.3d —, 2019 Tenn. App. LEXIS 168 (Tenn. Ct. App. Apr. 4, 2019).

9-8-403. Dockets — Determination of claims — Appeals — Notice of appeal.

  1. The commission shall maintain two (2) separate dockets. Upon transfer to the administrative clerk of the claims commission, the claim shall be assigned to the applicable docket:
    1. A regular docket similar to those maintained by courts of record. A court reporter shall be utilized at all hearings on claims on the regular docket and a record of such proceedings shall be made. These proceedings shall be conducted pursuant to the Tennessee Rules of Civil Procedure where applicable and otherwise pursuant to rules and regulations promulgated by the commission. The decisions of the individual commissioners may be appealed to the entire claims commission pursuant to rules promulgated by the commission. The decisions of the individual commissioners or, when rendered, decisions of the entire commission regarding claims on the regular docket may be appealed to the Tennessee court of appeals pursuant to the same rules of appellate procedure which govern interlocutory appeals and appeals from final judgments in trial court civil actions, except that tax appeals shall go directly to the Tennessee supreme court and workers' compensation appeals shall be appealed pursuant to the procedure for other workers' compensation cases under § 50-6-225; or
    2. A small claims docket consisting of claims satisfying the monetary limit applicable to the general sessions court of Davidson County. No court reporter shall be utilized nor any record made of these proceedings. These proceedings shall be conducted pursuant to rules and regulations promulgated by the commission. If a claimant consents to having the claimant's claim proceed upon affidavits filed with the commission without a hearing, the state shall be deemed to have waived a hearing on the claim unless the state requests a hearing within sixty (60) days after the claim is filed with, or transferred to, the commission. No appeal may be taken from a commissioner's decision regarding claims appearing on the small claims docket.
  2. All claims shall be heard without the aid of a jury. The claimant may appear on such claimant's own behalf or through counsel.
  3. At the discretion of either party at any time prior to a hearing, a claim may be removed from the small claims docket to the regular docket. Once removed, the claim shall be treated like any other claim on the regular docket.
  4. The state may, under rules promulgated by the commission, bring third parties before the commission when necessary to determine the ultimate liability.
  5. The commission shall also determine all claims on behalf of the state against the claimant arising out of the same occurrence.
  6. The state may assert any or all available defenses.
  7. A settlement offer by either party may not be used as evidence in a later commission hearing.
  8. Claims based on the negligent care, custody or control of personal property by persons in the legal custody of the state shall proceed on affidavits only, except where the commission determines that witnesses should be heard.
  9. Notwithstanding any provision to the contrary, claims for compensation filed under the Criminal Injuries Compensation Act, compiled in title 29, chapter 13, and § 40-24-107, shall be heard on the small claims docket only, unless removed to the regular docket pursuant to subsection (c).
  10. Commissioners shall provide findings of facts and conclusions of law on the disposition of all claims on the regular docket. Except as provided in § 29-13-109, an order disposing of a claim on the small claims docket need not include findings of fact and conclusions of law unless requested by a party. The commission is encouraged to make oral decisions immediately after a hearing on any claim if the commission finds that further deliberation is unnecessary. If a claim is disposed of by an oral ruling, counsel for the prevailing party shall prepare and submit an appropriate order reflecting such ruling. Such order shall include proposed findings of fact and conclusions of law if the claim was heard on the regular docket or if a party requested such findings and conclusions in a hearing on the small docket. Any orders prepared by counsel for the prevailing party shall be submitted to the adverse party for approval.
  11. If a claimant appeals the decision of a commissioner pursuant to subdivision (a)(1), the claimant shall, in addition to complying with all other requirements for perfecting an appeal, notify the clerk of the commission by filing the notice of appeal with the clerk. The notice shall be accompanied by a bond payable to the State of Tennessee in an amount determined by the clerk to be sufficient to defray the cost of preparing the transcript. The bond shall be in the form of a cash deposit, or by bond secured either by a corporation authorized under the laws of this state to act as surety on such a bond or by one (1) or more individual personal sureties residing within this state and who own real estate within this state. The bond shall be conditioned to pay the charge for services of the court reporter in preparing the transcript of the evidence introduced at the hearing before the commission. Whenever security is given in the form of a bond with one (1) or more sureties, the address of each surety shall be shown on the bond. In the event the claimant does not obtain the relief prayed for in the claimant's appeal, the cost of preparing the transcript shall be taxed against the claimant and shall be paid by the claimant or the surety on the bond filed with the commission.
  12. In the discretion of the claims commission and by agreement of the parties, all or part of a hearing may be conducted by electronic means.

Acts 1984, ch. 972, § 11; 1985, ch. 105, §§ 8, 14; 1997, ch. 34, § 2; 1997, ch. 165, §§ 6-8, 13; 1998, ch. 785, §§ 10-14; 1999, ch. 145, § 1; 2000, ch. 573, § 2.

Compiler's Notes. Acts 2000, ch. 573, § 5, provided that the amendment to this section by that act shall apply to all claims for compensation arising from offenses occurring on or after July 1, 1999.

The subsection designation was deleted from the reference to § 50-6-225 in (a)(1) due to amendment of that section by Acts 2013, ch. 289, § 60, effective July 1, 2014.

Textbooks. Tennessee Forms (Robinson, Ramsey and Harwell), No. 2-12-1.

Law Reviews.

State Liability at the Tennessee Claims Commission: Balancing Sovereign Immunity and Individual Rights of Redress (Steven W. Feldman), 37 Tenn. B.J. 19 (2001).

NOTES TO DECISIONS

1. Appeals.

A direct appeal from the Tennessee claims commission is governed by the Tennessee Rules of Appellate Procedure. Beare Co. v. State, 814 S.W.2d 715, 1991 Tenn. LEXIS 295 (Tenn. 1991).

The provision of subdivision (a)(1) of this section, that appeals from the Tennessee claims commission in tax matters shall go directly to the supreme court, was repealed by implication by § 37-10-304, transferring appellate jurisdiction over all civil appeals to the court of appeals. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

9-8-404. Removal of claims — Appeals.

  1. Prior to hearing, upon the petition of either party showing the approval of the attorney general and reporter, the claim shall be removed to the appropriate chancery or circuit court with venue for handling in accordance with this part, except the normal procedural rules of the court shall be applicable. Appeal from the chancery or circuit court shall be to the court of appeals.
  2. The commission may transfer the action to the appropriate chancery or circuit court with venue on its own after a determination, in writing, by the commission that fair and complete resolution of all claims involved cannot be accomplished in administrative proceedings before the commission. Such transfers shall be limited to tort claims arising out of the same fact situation where much of the evidence to be presented would be admissible against the state and one (1) or more additional defendants. If such transferred claim is not consolidated for trial, the claim against the state shall be transferred back to the commission. If, prior to the time of trial, all claims other than those against the state have been dismissed, settled or otherwise concluded, upon motion of the state the claim shall be transferred back to the commission. The transferred claim shall be handled in accordance with this part, except the normal procedural rules of the court shall be applicable. Appeal from the chancery or circuit court shall be to the court of appeals.
  3. If the docket for any grand division becomes overloaded in the judgment of the commission chair, the chair may assign one (1) of the other two (2) commissioners to hear some of those claims in that division.

Acts 1984, ch. 972, § 12; 1988, ch. 850, § 2; 1989, ch. 491, §§ 3, 4; 1990, ch. 806, §§ 1, 2.

Cross-References. Grand divisions, title 4, ch. 1, part 2.

Venue for action against state concerning real property lien, § 20-13-110.

NOTES TO DECISIONS

1. Constitutionality.

The provision of authority to the Tennessee claims commission to transfer actions for recovery of insurance taxes to the chancery courts under certain circumstances does not violate separation of powers provisions in the constitution. Stewart Title Guar. Co. v. McReynolds, 886 S.W.2d 233, 1994 Tenn. App. LEXIS 296 (Tenn. Ct. App. 1994).

9-8-405. Settlement of claims — Mediation.

  1. Any claim filed with the division may be settled pursuant to § 20-13-103, following consultation with the governmental entity affected therein. Additionally, the attorney general and reporter, with the written approval of the governor and the comptroller of the treasury, may authorize the state treasurer to settle certain classes of claims without the necessity of complying with § 20-13-103.
  2. In the event of disapproval of a proposed settlement, the claim shall be processed in the same manner as other claims before the commission.
  3. By agreement of the parties, a mediator may be employed in an attempt to settle a claim. Such a claim still must be settled in accordance with subsection (a) and/or § 20-13-103. Costs associated with alternative dispute resolution, as agreed to by the parties, shall be paid from the risk management fund.

Acts 1984, ch. 972, § 13; 1997, ch. 165, § 9; 2003, ch. 212, § 8.

9-8-406. Representation of state — Negotiation of prehearing claim settlements.

The attorney general and reporter shall represent the state in all claims before the commission; however, the attorney general and reporter may delegate to the department of the treasury or the governmental entity against which the claim is made the authority to negotiate prehearing claim settlements, and to represent the state in proceedings before the claims commission or any portion of that authority which the attorney general and reporter deems appropriate.

Acts 1984, ch. 972, § 14.

9-8-407. Actions against third parties for reimbursement.

  1. Whenever the acts or omissions of a third party are the proximate cause of an incident giving rise to a claim against the state for which the state has, pursuant to this chapter, compensated the person injured or damaged by the acts or omissions of such third party, the state of Tennessee may institute an action against such third party for the recovery of the whole or any specified part of the amount paid by the state in the appropriate court in Tennessee, or in the federal, state or district court in which such third party resides.
  2. As a condition for the settlement of a claim filed under this chapter in which a third party may be liable, the state treasurer, exercising the settlement authority delegated to the state treasurer pursuant to § 9-8-405, shall require the claimant to agree, by such form as the attorney general and reporter may direct, to cooperate fully with appropriate officials of the state should the state proceed to institute an action against a third party to recover the whole or any specified part of the amount paid by the state. Should the claimant fail to cooperate with the state in accordance with such agreement, the state shall have the right to recover any amounts paid by the state to the claimant. In awarding compensation, the claims commission shall include a requirement that the claimant execute an agreement with the state to cooperate with the state in an action against a liable third party in accordance with this section, unless the commission finds that the facts in such claim dictate that such an agreement should not be required.
  3. Should any claimant choose to exercise such claimant's right to recover damages in civil court for injury or damages, such claimant shall notify the attorney general and reporter of the institution of such a lawsuit by serving the attorney general and reporter through the United States mail with a copy of the complaint, all subsequent pleadings and a copy of the final judgment in order to give the state notice of the existence of such an action so that the state may pursue its subrogated interest.

Acts 1986, ch. 626, § 10.

9-8-408. Confidentiality of medical records maintained by division.

  1. Medical records received and maintained by the division of claims and risk management shall be treated as confidential and shall not be open for inspection by members of the public pursuant to title 10, chapter 7.
  2. As used in this section:
    1. “Healthcare provider” means healthcare professionals, establishments, or facilities licensed, registered, certified, or permitted pursuant to title 63 or title 68 and regulated under the authority of either the department of health or any agency, board, council, or committee attached to the department of health; and
    2. “Medical record” means any and all documents maintained by a healthcare provider relating to a patient's diagnosis, care, and treatment, including, but not limited to, notes, reports, memos, e-mails, facsimile transmissions, laboratory tests, billing documents, and medication orders.

Acts 2015, ch. 47, § 2; 2017, ch. 271, § 1.

Cross-References. Confidentiality of Public Records, § 10-7-504.

9-4-508. Collateral pool boards — Powers and duties.

9-4-522. Deposits of funds — Operating expenses.

9-4-5608. Evaluation of compliance — Report.

9-8-107. Defense counsel commission functions and responsibilities transferred to board of claims.

Chapter 9
Funding of State Debt

Part 1
General Provisions

9-9-101. State funding board.

The state funding board shall be composed of the governor, the commissioner of finance and administration, the state treasurer, the secretary of state, and the comptroller of the treasury. The governor shall serve as the chair, and the comptroller shall serve as the vice chair and secretary. The board has the power to prescribe its rules and regulations and govern its meetings and procedures as it may deem advisable. A majority of the board constitutes a quorum and the confirming vote of at least three (3) members of the board is required.

Acts 1927, ch. 1, § 4; 1929, ch. 125, § 1; 1929 (Ex. Sess.), ch. 9, § 1; Code 1932, § 1800; Acts 1937, ch. 33, § 45; 1937, ch. 258, § 1; 1939, ch. 11, § 29; 1941, ch. 7, § 1; C. Supp. 1950, §§ 255.47, 1800.1 (Williams, §§ 255.48, 1800.1); Acts 1959, ch. 9, § 8; 1959, ch. 155, § 1; impl. am. Acts 1961, ch. 97, § 3; Acts 1976, ch. 806, § 1(46); T.C.A. (orig. ed.), § 9-901; Acts 2010, ch. 982, § 1; 2013, ch. 176, § 2.

Compiler's Notes. The state funding board, created by this section, terminates June 30, 2024. See §§ 4-29-112, 4-29-245.

Acts 2013, ch. 176, § 1 provided that the act, which deleted subsection (b), shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which deleted subsection (b), shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

Cross-References. Age discrimination prohibited for appointments to state boards and commissions, § 4-1-403.

Bonds for aid of consolidating counties, § 5-3-122.

Federal loans, approval by funding board, § 4-4-116.

State funding board attached to office of the comptroller of the treasury, § 4-3-306.

Law Reviews.

Financing Public Needs After Tax Reform (Jon G. Roach), 23 Tenn. B.J. 19 (1987).

Attorney General Opinions. In the event the general assembly does not enact an annual appropriations act, principal and interest on long-term general obligation bonds may still be paid, OAG 00-083, 2000 Tenn. AG LEXIS 86 (5/4/00).

9-9-102. Maintenance of records on the condition of all debt obligations and payments.

The commissioner of finance and administration shall maintain, or cause to be maintained, records on the condition of all debt obligations described in § 9-9-105(a) and of the payment of the principal of and premium, if any, and interest on such obligations.

Acts 1899, ch. 8, § 1; Shan., § 1068a2; Code 1932, § 1802; mod. C. Supp. 1950, § 1802; modified; T.C.A. (orig. ed.), § 9-903; Acts 1985, ch. 118, § 64; 2000, ch. 598, § 1; 2013, ch. 176, § 3.

Compiler's Notes. Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section,  shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-103. Debt service payments.

There is hereby appropriated to the state funding board on a direct and continuing basis a sum sufficient for payment of debt service (principal, interest and premium, if any) on outstanding bonds and other debt obligations (including notes), amounts due on contracts or agreements authorized under this chapter, and necessary related expenses. The state funding board is authorized to make debt service payments on outstanding bonds and other debt obligations (including notes), and make payments due under contracts and agreements authorized under this chapter, and necessary related expenses, as provided in this section from any funds held in the state treasury not otherwise legally restricted, independent of an appropriation bill as contemplated by chapter 4, part 51 of this title.

Acts 1937, ch. 165, § 1 (Williams, § 1811.12); impl. am. Acts 1949, ch. 52, § 1; modified; T.C.A. (orig. ed.), § 9-904; Acts 1998, ch. 582, § 7; 2001, ch. 264, § 1; 2013, ch. 176, § 4.

Compiler's Notes. Acts 1998, ch. 582, § 11 provided that if any court of last resort should determine the tax levied by Acts 1997, ch. 316 to be invalid, then immediately upon the effective date of the court's order, the prior sections amended by Acts 1998, ch. 582, §§ 7-10 shall be revived as in effect prior to January 1, 1998, and the reference in Acts 1998, ch. 582, § 1 to § 67-3-1303 shall be deleted and § 67-3-904 shall be substituted instead.

Acts 1998, ch. 582, § 13 provided that the amendments by §§ 7-11 of that act apply retroactively to January 1, 1998.

Acts 2013, ch. 176, § 1 provided that the act, which deleted subsection (a), shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which deleted subsection (a), shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-104. Pledge of revenues — Covenants for protection of bondholders.

  1. For the payment of the principal of and interest on the bonds of the state of Tennessee issued under this chapter outstanding as of July 1, 2013, there is hereby pledged the annual proceeds of a tax of not less than five cents (5¢) per gallon upon gasoline, the annual proceeds of the special tax on petroleum products provided for by § 67-3-203, one-half (½) of the annual proceeds of motor vehicle registration fees now or hereafter required to be paid to the state, and the entire annual proceeds of franchise taxes imposed by the franchise tax law, compiled in title 67, chapter 4, part 21. This pledge shall not extend to any bonds issued under this chapter after July 1, 2013.
  2. As long as any bonds issued under this chapter that were outstanding as of July 1, 2013 remain outstanding, the state of Tennessee hereby covenants with the persons who now or may hereafter hold such bonds that it will not decrease by legislative action any of the fees or taxes that constitute the special revenues pledged by this section, or eliminate from the requirement to pay such fees or taxes any substance, motor vehicle or corporation on account of which the payment of such fees or taxes is now required, and that it will levy a tax of not less than five cents (5¢) per gallon upon gasoline or other motor vehicle fuel, unless the state funding board shall certify that all payments due the state funding board under this chapter have been made in full, that the state is not in default in the payment of any outstanding debt or in the payment of interest thereon, and that such fees and taxes at lower rates to be specified by the state funding board, in such year or years (not exceeding two (2) years), will be sufficient to provide funds adequate to meet all payments required to be made by the state funding board in such year or years, as well as to provide for the other obligations and expenses of the state for such year or years, to be defrayed therefrom, in which event the state of Tennessee shall be under no obligation to charge or levy in such year or years fees or taxes in excess of the rates so certified by the state funding board.
  3. In no event shall the pledge and covenants set forth in this section extend past or be effective after June 30, 2033.

Acts 1937, ch. 165, § 13 (Williams, § 1811.24); impl. am. Acts 1949, ch. 52, § 1; modified; Acts 1977, ch. 3, § 1; T.C.A. (orig. ed.), § 9-905; Acts 1998, ch. 582, §§ 1, 8; 2013, ch. 176, § 5.

Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

Acts 1998, ch. 582, § 11 provided that if any court of last resort should determine the tax levied by Acts 1997, ch. 316 to be invalid, then immediately upon the effective date of the court's order, the prior sections amended by Acts 1998, ch. 582, §§ 7-10 shall be revived as in effect prior to January 1, 1998, and the reference in Acts 1998, ch. 582, § 1 to § 67-3-1303 shall be deleted and § 67-3-904 shall be substituted instead.

Acts 1998, ch. 582, § 13 provided that the amendments by §§ 7-11 of that act apply retroactively to January 1, 1998. Section 8, which amended this section, substituted “the special tax on petroleum products provided for in § 67-3-1303” for “the volatile substances inspection fee” in the first sentence.

Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section,  shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-105. Bonds constitute direct state obligations — Debt obligations constitute a charge and lien — Satisfaction of debt service coverage test.

  1. All bonds issued (and to be issued) under this chapter, all notes issued (and to be issued) in anticipation of such bonds, and all tax revenue anticipation notes issued (and to be issued) under this chapter shall constitute direct general obligations of the state of Tennessee for the payment of the principal of and premium, if any, and interest on which there is also pledged the full faith and credit of the state of Tennessee. Subject only to § 9-9-104(a), all such debt obligations shall constitute a charge and lien upon the entire fees, taxes and other revenues and funds allocated to the general fund, the debt service fund, and the highway fund; and, if necessary, upon the first such fees, taxes, revenues and funds thereafter received and allocated to such funds, except only such fees, taxes, revenues and funds as may be otherwise legally restricted.
  2. The state of Tennessee hereby covenants with the persons who now or may hereafter hold any debt obligations described in § 9-9-105(a) that it will raise fees, taxes and other revenues sufficient, together with funds on hand derived from all sources, to pay the principal of and premium, if any, and interest on such obligations as and when due and payable.
    1. The state of Tennessee hereby covenants with the persons who now or may hereafter hold any bonds issued under this chapter that no bonds shall be issued under this chapter after July 1, 2013, unless the following debt service coverage test is satisfied: the amount necessary to pay the maximum annual debt service payable in the then current or any future fiscal year, is not greater than ten percent (10%) of the amount of total state tax revenue allocated to the general fund, to the debt service fund, and to the highway fund for the immediately preceding fiscal year.
    2. For purposes of satisfying this test, “state tax revenues” are defined as those taxes, licenses, fees, fines, and permits collected by the department of revenue and allocated to the general fund, the debt service fund, and the highway fund excluding the portion of those taxes shared with local governments.
    3. “Debt service”, for this purpose, means and includes principal of and interest on all outstanding bonds issued under this chapter and the bonds then proposed to be issued under this chapter, in the aggregate; provided, that in determining the outstanding bonds, there shall be excluded any outstanding bonds the payment of which has been fully provided for by funds or securities (including expected income therefrom), or both, set aside for that purpose.

Acts 1937, ch. 165, § 8 (Williams, § 1811.19); modified; T.C.A. (orig. ed.), § 9-906; Acts 1998, ch. 582, § 9; 2013, ch. 176, § 5.

Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

Acts 1998, ch. 582, § 11 provided that if any court of last resort should determine the tax levied by Acts 1997, ch. 316 to be invalid, then immediately upon the effective date of the court's order, the prior sections amended by Acts 1998, ch. 582, §§ 7-10 shall be revived as in effect prior to January 1, 1998, and the reference in Acts 1998, ch. 582, § 1 to § 67-3-1303 shall be deleted and § 67-3-904 shall be substituted instead.

Acts 1998, ch. 582, § 13 provided that the amendments by §§ 7-11 of that act apply retroactively to January 1, 1998.

Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-106. Certification of amount necessary for payment of debt obligations.

The state funding board shall certify to the commissioner of finance and administration from time to time, but not less than annually, the amount necessary, together with funds on hand derived from all sources, to enable the board to provide for the payment of the principal of and premium, if any, and interest on all debt obligations described in § 9-9-105(a) as and when the same shall become due and payable.

Acts 1937, ch. 165, § 8 (Williams, § 1811.19); impl. am. Acts 1949, ch. 52, § 1; modified; impl. am. Acts 1959, ch. 9, § 8; Acts 1973, ch. 336, § 1; T.C.A. (orig. ed.), § 9-907; Acts 2013, ch. 176, § 5.

Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

Cross-References. Parts of 1937 act left unrepealed, § 1-2-106.

9-9-107. Payments by state funding board.

The state funding board shall provide for the payment of the principal of and premium, if any, and interest on all bonds issued under this chapter, all notes issued in anticipation of such bonds and all tax revenue anticipation notes issued under this chapter, amounts due on contracts or agreements described in § 9-9-202(g) and (h) or other contracts or agreements relating to such debt obligations, and necessary related expenses incurred under this chapter as the same shall become due, out of the fees, taxes and other revenues and funds available for such purposes.

Acts 1937, ch. 165, §§ 9, 10 (Williams, §§ 1811.20, 1811.21); impl. am. Acts 1959, ch. 9, § 8; T.C.A. (orig. ed.), § 9-908; Acts 2000, ch. 598, § 2; 2013, ch. 176, § 5.

Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-108. State funding board's authority to deposit or transfer funds.

The state funding board may:

  1. Deposit funds and revenues paid to it in the pooled investment fund authorized by § 9-4-603 or in a deposit account at a bank or trust company located within or without this state, which will give such security for such deposit of the kind and type now required by law for the deposit of other state funds; or
  2. Transfer cash, pending its application to the payment of the principal of or interest on the outstanding obligations of the state, into a fiduciary or trust account with a bank or trust company located within or without this state, under terms as the board may require to ensure the safety of the funds.

Acts 1937, ch. 165, § 10 (Williams, § 1811.21); impl. am. Acts 1959, ch. 9, § 8; T.C.A. (orig. ed.), § 9-909; Acts 1985, ch. 118, § 65; 2000, ch. 598, § 2.

Cross-References. Collateral for deposit of state funds, title 9, ch. 4.

9-9-109. Custodian for securities.

The state funding board is expressly authorized to contract with a bank or trust company located within or without this state to act as a custodian for securities held by or for the benefit of the board, including collateral pledged pursuant to § 9-9-108(1), under terms as the board may require to ensure the safety of the securities.

Acts 1937, ch. 165, § 3 (Williams, § 1811.14); impl. am. Acts 1959, ch. 9, § 8; T.C.A. (orig. ed.), § 9-910; Acts 1985, ch. 118, § 66; 2000, ch. 598, § 2.

Cross-References. Collateral for state funds, title 9, ch. 4.

9-9-110. Investment of cash not immediately required.

Cash in the hands of the state funding board not immediately required for the payment of the principal of or interest on outstanding obligations of the state and held as provided by § 9-9-108 may be invested, in the board's discretion, in general obligation debt of the state of Tennessee or in any other obligations which are legal for the investment of funds of the state of Tennessee, with such yield and maturity as determined by the board after consultation with the state treasurer.

Acts 1937, ch. 165, § 11 (Williams, § 1811.22); impl. am. Acts 1959, ch. 9, § 8; Acts 1977, ch. 3, § 2; T.C.A. (orig. ed.), § 9-911; Acts 1985, ch. 118, § 67; 2000, ch. 598, § 2.

Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

9-9-111. Vested rights of holders of debt obligations.

The holders of all debt obligations of the state of Tennessee described in § 9-9-105(a) and all persons who may hereafter purchase such obligations shall have, and are hereby declared to have, a vested right in the performance of the covenants and pledges contained in this chapter, and the performance of the duties imposed upon any officer or agency of the state of Tennessee by or pursuant to this chapter may be enforced by the holder of any such obligation by appropriate proceedings; provided, that no such holders or purchasers of debt obligations issued after July 1, 2013, shall have any such rights with respect to § 9-9-104.

Acts 1937, ch. 165, § 12 (Williams, § 1811.23); impl. am. Acts 1949, ch. 52, § 1; modified; impl. am. Acts 1959, ch. 9, § 8; Acts 1977, ch. 3, § 5; T.C.A. (orig. ed.), § 9-916; Acts 1998, ch. 582, § 10; 2013, ch. 176, § 6.

Compiler's Notes. Section 67-3-911 deemed this section to be applicable to and to include the special tax on petroleum products levied by § 67-3-904, in lieu of the fees for inspection of volatile substances, so as not to effect a decrease by legislative action of the fees or taxes required by law to be paid at the time of enactment of the covenants.

For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

Acts 1998, ch. 582, § 11 provided that if any court of last resort should determine the tax levied by Acts 1997, ch. 316 to be invalid, then immediately upon the effective date of the court's order, the prior sections amended by Acts 1998, ch. 582, §§ 7-10 shall be revived as in effect prior to January 1, 1998, and the reference in Acts 1998, ch. 582, § 1 to § 67-3-1303 shall be deleted and § 67-3-904 shall be substituted instead.

Acts 1998, ch. 582, § 13 provided that the amendments by §§ 7-11 of that act apply retroactively to January 1, 1998.

Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-112. Exemption from taxes.

Principal of and interest on debt obligations issued under this chapter shall be exempt from taxation by the state, or by any county, municipality or taxing district of the state, except inheritance, transfer and estate taxes.

Acts 1937, ch. 165, § 15 (Williams, § 1811.26); 1977, ch. 3, § 6; T.C.A. (orig. ed.), § 9-917; Acts 2013, ch. 176, § 6.

Compiler's Notes. For codification of Acts 1937, ch. 165, see the Session Law Disposition Tables in Volume 13 of the Tennessee Code Annotated.

Acts 2013, ch. 176, § 1 provided that the act, which amended this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

Cross-References. Gift, estate and inheritance taxes, title 67, ch. 8, parts 1-5.

9-9-113. Bond term not to exceed lifetime of item financed — Tax exempt status.

  1. No funds obtained through the sales of any bonds or notes of the state of Tennessee as provided for by this chapter shall be used to purchase or otherwise obtain any equipment, goods, or services, unless the equipment, goods, or services shall have a reasonably anticipated lifetime of use equal to or greater than the period of time for which the bonds or notes are issued and during which interest is payable for them. The “reasonably anticipated lifetime” within the meaning of this section shall be determined by the state building commission for projects under its jurisdiction and by other appropriate authority designated by the state funding board for all projects or programs not under the jurisdiction of the state building commission. Architectural, engineering, and other like services, which are determined by the state building commission or other appropriate authority designated by the state funding board to be a normal part of the project or program cost are not precluded by this section from funding from bond or note proceeds.
  2. For the purpose of ensuring that the bonds, notes and other obligations issued after September 1, 1986, pursuant to this chapter maintain their tax-exempt status as may be provided by the Internal Revenue Code of 1986 (26 U.S.C.), as amended, no state officer or employee or user of a project or program shall authorize or allow any change, amendment or modification to a project or program financed or refinanced with the proceeds of such obligations which change, amendment or modification would affect the tax-exempt status of such obligations unless the change, amendment, or modification shall have received the prior approval of the office of state and local finance in the office of the comptroller of the treasury and the state funding board. Failure to receive such approval shall render any change, amendment, or modification null and void.

Acts 1977, ch. 222, § 1; T.C.A., § 9-929; Acts 1987, ch. 114, § 1; 2016, ch. 571, § 3.

Cross-References. Revenues to include proceeds of debt obligations, Tenn. Const., art. II, § 24.

9-9-114. Records of state obligations payments.

The secretary of the funding board shall keep, or cause to be kept, appropriate records concerning the payment of obligations of the state issued under this chapter, including information regarding items redeemed.

Acts 1957, ch. 297, § 1; T.C.A., § 9-925; Acts 2000, ch. 598, § 3.

9-9-115. Destruction of paid or cancelled bonds by paying agent.

  1. The state of Tennessee, acting by resolution of the state funding board, may authorize and direct the paying agent for its bonds, notes and coupons, or other person in possession of its bonds, notes and coupons, to destroy all bonds, notes and coupons duly paid and cancelled.
  2. Such bonds, notes and coupons duly paid and cancelled during any fiscal year beginning July 1 and ending on the following June 30 may be destroyed only after the fiscal audit of the appropriate state agency covering the fiscal year has been completed, and the department of audit will notify the state funding board that due account has been made of such duly paid and cancelled bonds, notes and coupons. The paying agent or other person in possession of the state's bonds, notes and coupons shall furnish a certified list of bonds, notes and coupons duly paid and cancelled, showing for each issue of bonds and notes: the bond, note and coupon number, the amount, the date paid, and such additional information as the state funding board by resolution may require.
  3. This section shall be in addition to any other law. Where this section is in conflict with other law, this section shall prevail.

Acts 1977, ch. 273, §§ 1, 2; T.C.A., § 9-930.

9-9-116. Technical advice — Expenses of carrying out chapter.

The state funding board is hereby authorized to procure such legal and technical advice, approving opinions and such financial assistance as it may consider necessary in connection with the carrying into effect of  this chapter, and is also authorized to pay all necessary expenses, including costs of advertisement, printing bonds, certificates and coupons, publication of all releases, purchases of all necessary books and records, and all other incidental expenses as may be necessary. All such expenses, as well as the amount of any discount at which bonds issued under this chapter shall be sold, may be funded by bonds issued under this chapter and authorized heretofore or hereafter by the general assembly, to be issued by the funding board.

Acts 1937, ch. 165, § 14 (Williams, § 1811.25); 1977, ch. 3, § 7; T.C.A. (orig. ed.), § 9-918; Acts 1998, ch. 582, § 2.

9-9-117. State immunity preserved.

Nothing in this chapter shall be construed as either waiving the immunity of the state of Tennessee from suit or as extending its consent to be sued, notwithstanding any other portion or portions of this chapter to the contrary.

Acts 1937, ch. 165, § 15 (Williams, § 1811.26); T.C.A. (orig. ed.), § 9-919.

9-9-118. Authority to establish guidelines, rules and regulations.

The state funding board is authorized to establish guidelines, rules or regulations with respect to certain agreements and contracts facilitating the issuance and sale of debt by governmental entities established by private act, 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 debt when such agreements and contracts have been authorized under the private act subject to guidelines of the state funding board.

Acts 2002, ch. 818, § 1; T.C.A. § 9-9-120.

Code Commission Notes.

This section was renumbered from § 9-9-120 to § 9-9-118 by authority of the Code Commission in 2020.

Part 2
Issuance and Sale of Bonds

9-9-201. Obligations subject to funding.

All general obligation bonds already issued or which may hereafter be issued by the state of Tennessee shall be subject to financing, refinancing and retirement under this chapter.

Acts 1943, ch. 136, § 1; C. Supp. 1950, § 1811.6 (Williams, § 1811.29a); T.C.A. (orig. ed.), § 9-912.

9-9-202. Authorization to issue bonds — Purposes, contents, form, redemption of bonds — Interest rate agreements — Jurisdiction.

  1. For the purpose of effectuating this chapter, the funding board is hereby authorized to issue bonds of the state of Tennessee in amounts and for purposes heretofore or hereafter authorized by the general assembly. Each issue of bonds may be for one (1) or more purposes, irrespective whether the purposes have been provided for by the same legislative enactments, and, unless otherwise provided by law, shall be direct general obligations of the state of Tennessee for the payment of which as to both principal and interest the full faith and credit of the state is irrevocably pledged, and shall be further secured by the pledge of special revenues pursuant to this chapter.
  2. The bonds shall be dated, shall bear interest at such rate or rates payable at such time or times and at such place or places, shall mature at such time or times, and shall be payable in such medium of payment, as may be determined by the board.
  3. The bonds may be made redeemable before maturity at the option of the board at such price or prices and under such terms and conditions as may be fixed by the board prior to the issuance of the bonds.
  4. The board shall determine the form of the bonds, including the form of interest coupons to be attached thereto, and the manner of execution or authentication of the bonds and coupons, and shall fix the denomination or denominations of the bonds and the place or places of payment of the principal and interest, which may be at any bank or trust company within or without the state.
  5. The bonds may be issued in coupon or registered form, or both, as the board may determine, and provision may be made for the registration of coupon bonds as to principal only or also as to both principal and interest, and for the exchange and interchange of registered and coupon bonds.
  6. In case any member or officer of the board whose signature or facsimile signature thereof shall appear on the bonds or coupons shall cease to be a member or officer of the board before the delivery thereof, such signature or facsimile signature nevertheless shall be valid and sufficient for all purposes, the same as if such person had remained a member or officer of the board until after such delivery.
  7. With respect to all or any portion of any issue of bonds issued hereunder, the funding board 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 agreements as the funding board may determine, including, without limitation, provisions permitting the funding board 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.
  8. When entering into any contracts or agreements facilitating the issuance and sale of 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 authorized under this section evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the state funding board 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 the state funding board against which an action on such a contract or agreement is brought shall lie solely in a court in Tennessee which would otherwise have jurisdiction of actions brought in contract against the board.

Acts 1937, ch. 165, § 2 (Williams, § 1811.13); 1977, ch. 3, § 3; T.C.A. (orig. ed.), § 9-913; Acts 1999, ch. 425, § 1; 2010, ch. 982, § 2.

Cross-References. Prepayment rights on face of bonds, § 9-1-104.

9-9-203. Authority to offer bonds for sale and determine interest rates — Delivery periods.

  1. The funding board is hereby authorized, empowered and directed to offer for sale any and all bonds heretofore or hereafter authorized to be issued by the funding board, and to determine by resolution the maximum rate or rates of interest which such bonds shall bear.
  2. The funding board may enter into an agreement to sell its bonds under this chapter providing for delivery of its bonds not more than five (5) years or such greater period of time if recommended by the comptroller of the treasury or the comptroller's designee, from the date of execution of such agreement or, in the case of refunding bonds, the earlier of the first date on which the bonds being refunded can be optionally redeemed resulting in cost savings or be optionally redeemed at par.

Acts 1957, ch. 186, § 1; T.C.A., § 9-921; Acts 1999, ch. 425, § 2.

Cross-References. Bonds for medical arts buildings, title 68, ch. 11, part 6.

Waterworks construction loans, title 68, ch. 221, part 5.

9-9-204. Removal of statutory limitations on interest rates.

Whenever the interest rate or rates determined by resolution of the funding board exceed those contained in the act or acts authorizing the issuance of such bonds, the rate or rates determined by the funding board shall prevail, it being the legislative intent to remove all statutory limitations regarding maximum interest rates and all such limitations are hereby expressly removed; provided, that the maximum rate determined by the funding board in no instance shall exceed the rate as provided by § 47-14-103.

Acts 1957, ch. 186, § 2; T.C.A., § 9-922; Acts 1981, ch. 128, § 3; 2010, ch. 982, § 4.

9-9-205. Sale of bonds — Appropriation of funds in lieu of sale of bonds.

  1. Any and all bonds issued by the funding board shall be sold in such manner and at such times as may be approved by the funding board.
  2. If there are unappropriated funds in the general fund, highway fund or state debt service fund of the state sufficient to defray the cost of the betterments, improvements, buildings, and projects for which bonds shall have been authorized, or any part thereof, then the funding board may request an allocation from such unappropriated funds in lieu of issuing bonds in such amount. There is hereby appropriated upon any such request of the funding board from the general fund, highway fund or state debt service fund a sum sufficient to pay the cost, or any part thereof, of such betterments, improvements, buildings, and projects, as the funding board shall have been authorized to finance through the issuance of bonds. For the purposes of this section, the use of highway funds shall be limited to highway projects.
  3. Notwithstanding the foregoing, if there are notes of the state outstanding that were issued in anticipation of the issuance of bonds that mature without having been funded by the issuance of bonds, the funding board shall, without further authorization, apply funds appropriated to the state debt service fund for amortization of authorized and unissued bonds not required for the payment of principal of and interest on bonds which have been issued to the retirement of a like amount of principal or interest on such notes. There is hereby appropriated from such funds in the state debt service fund a sum sufficient to retire the principal of and interest on such notes, and, upon the retirement of such principal, the authorization for the issuance of such principal amount of the bonds for the purposes for which the notes were issued shall become void.

Acts 1957, ch. 186, § 3; 1977, ch. 3, § 9; T.C.A., § 9-923; Acts 1982, ch. 833, §§ 1, 2; 1998, ch. 582, § 3; 2003, ch. 10, § 1; 2009, ch. 4, § 1; 2010, ch. 982, § 3; 2012, ch. 572, § 1; 2016, ch. 849, § 1.

Compiler's Notes. Acts 2003, ch. 10, § 3 provided that any language inconsistent with the provisions in this section in any general obligation bond enacted prior to April 2, 2003, shall be of no effect.

Acts 2009, ch. 4, § 2 provided that any language inconsistent with the provisions of § 9-9-205(a) in any general obligation bond act enacted prior to March 10, 2009, shall be of no effect.

9-9-206. Application of law to other statutes.

  1. Parts 1 and 2 of this chapter shall be applicable to existing statutes authorizing the issuance of bonds, as well as acts of this and subsequent general assemblies.
  2. Notwithstanding any other general law, parts 1 and 2 of this chapter shall prevail. However, bonds heretofore or hereafter authorized by the general assembly to be issued by the state funding board may be sold pursuant to the Baccalaureate Education Savings for Tennessee Act, compiled in title 49, chapter 7, part 9.

Acts 1957, ch. 186, §§ 4, 5; 1977, ch. 3, § 10; T.C.A., § 9-924; Acts 1989, ch. 190, § 9.

9-9-207. Issuance of refunding bonds.

  1. The funding board may issue general obligation refunding bonds to refund outstanding obligations previously issued under the authority of this chapter, upon the determination by the board that such bonds are necessary:
    1. To accomplish cost savings to the public;
    2. For the administrative convenience of the board;
    3. To pay or discharge all or any part of an issue or series of bonds, including any interest thereon, in arrears or to become due and for the payment of which sufficient funds are not available; or
    4. To eliminate bond covenants that have been determined to be burdensome to the state due to a change in circumstances if such elimination is not otherwise prohibited by law. Such determination shall be clearly stated in any resolution authorizing such refunding bonds and shall be conclusive.
  2. The refunding bonds may be issued to pay or provide for the payment of principal, redemption premium, and accrued interest on the bonds to be refunded, and expenses related to the issuance of the refunding bonds, including discount and costs of issuance.
  3. Refunding bonds may be sold as determined by the funding board, at public or private sale, in accordance with this chapter.

Acts 1937, ch. 165, § 13 (Williams, § 1811.24); modified; impl. am. Acts 1959, ch. 9, § 8; Acts 1977, ch. 3, § 4; T.C.A. (orig. ed.), § 9-914; Acts 1998, ch. 582, § 4; 2013, ch. 176, § 9.

Compiler's Notes. Acts 2013, ch. 176, § 1 provided that the act, which amended subsection (a), shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which amended subsection (a), shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

9-9-208. Authorization to cancel bonds — Factors in determination.

The funding board is authorized, empowered and directed to cancel bonds authorized to be issued by the funding board upon its determination by resolution that one (1) of the following has occurred and the canceled amount of that bond authorization is no longer needed to fund the authorized project:

  1. The project has been financed with commercial paper and the commercial paper has been retired in whole or in part without issuance of bonds;
  2. The project was authorized to be financed with bonds but was financed in whole or in part with current funds;
  3. The bonds were authorized but are no longer necessary for a governmental purpose; or
  4. The amount of the remaining authorization is de minimis and as such will not be utilized.

Acts 2009, ch. 311, § 1; 2014, ch. 824, § 1.

Compiler's Notes.  Former § 9-9-208 (Acts 1937, ch. 165, § 13 (Williams, § 1811.24); modified; T.C.A. (orig. ed.), § 9-915; Acts 1981, ch. 128, § 2), concerning the sale of refunding bonds, was repealed by Acts 1998, ch. 582, § 5, effective March 3, 1998.

Pursuant to Article III, Section 18 of the Constitution of Tennessee, Acts 2014, ch. 824 took effect on April 28, 2014.

Part 3
Tax Revenue Anticipation Notes

9-9-301. Issuance and sale — Interest — Guidelines.

  1. Pending the receipt of tax revenues during any fiscal year, the state of Tennessee, acting by resolutions of its funding board, is hereby authorized and empowered to issue and sell, either at public or private sale, at not less than par and accrued interest, its interest-bearing revenue anticipation note or notes. Such note or notes shall be authorized by resolution of the funding board, shall bear such date or dates, and shall mature at such time or times, including any renewals thereof, as such resolution or resolutions may provide, but shall mature within the fiscal year of their issuance. Such notes shall bear interest at such rate or rates, be in such denominations, be in such form, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places and be subject to such terms of redemption and contain such other terms and provisions, and the state may otherwise provide with respect to the authorization, sale and issuance of such notes, as such resolution or resolutions may provide.
  2. Any resolution or resolutions of the state funding board authorizing the issuance of such tax revenue anticipation note or notes shall provide that the same are issued in anticipation of the tax revenue within the then current fiscal year and shall further provide that the full faith and credit of the state of Tennessee are pledged to the payment of such note or notes. The state funding board shall provide for the payment of the principal of and interest on all notes issued under this section as the same shall become due, out of revenues and funds available for such purposes.
  3. The state funding board is hereby authorized to procure such legal and technical advice, approving opinions and such financial assistance as it may consider necessary in connection with the carrying into effect of this section, and is also authorized to pay all necessary expenses and incidental expenses. All such expenses may be funded by notes issued under this section.

Acts 2002, ch. 552, § 2; Acts 2013, ch. 176, § 10; T.C.A. § 9-10-101(a)-(c).

Compiler's Notes. Former § 9-10-101 (a)–(c) (Acts 2002, ch. 552, § 2), concerning issuance and sale, interest and guidelines, was transferred to § 9-9-301 by Acts 2013, ch. 175, § 10, effective July 1, 2013.

Acts 2013, ch. 176, § 1 provided that the act, which transferred former § 9-10-101(a)-(c) to this section, shall be known and may be cited as the “Hawkins-Wilson Act.”

Acts 2013, ch. 176, § 11 provided that nothing in the act, which transferred former § 9-10-101(a)-(c) to this section, shall be construed so as to impair the obligation of any contract made by the state of Tennessee upon any bond of the state issued under title 9, chapter 9 outstanding as of July 1, 2013.

Part 4
Citizens Bonds

9-9-401. Small-denominations bonds authorized — Terms and sale — Limitations.

  1. Notwithstanding any other law to the contrary, whenever the state funding board is authorized to issue and sell bonds of the state, it may by resolution authorize the issuance and sale of all or any portion of such bonds in denominations of less than five thousand dollars ($5,000), to be known as “Tennessee citizens bonds,” hereinafter referred to as “citizens bonds.” Such bonds shall be issued and sold by the state funding board through the state treasurer either at public or private sale, maturing in such amounts and upon such dates, at such interest rate or rates, payable at such time and in such manner, at par or at discount, in bearer or registered form, and upon such other terms and conditions as shall be determined to be in the best interests of the state in accordance with a plan approved by resolution of the funding board. It is the legislative intent that the interest rate set by the funding board on the sale of citizens bonds shall be approximately the same yield to the investor as was available from the most recent sale of general obligation bonds.
  2. Not more than two million dollars ($2,000,000) principal amount of citizens bonds shall be sold by the state treasurer in any one (1) fiscal year. If sold at discount, the discount of such bonds may not exceed thirty percent (30%) of the bond's value at maturity, and the principal amount shall be the discounted value for which the bonds are sold. The face value of citizens bonds sold at discount will be the principal amount and all interest which will be owed on the bond if it is held to full maturity. The maximum rate of interest in no instance shall exceed the legal rate as provided in § 47-14-103. No citizens bond shall mature more than five (5) years after its date of issue. Each citizens bond shall provide that it will be redeemed by the state, upon due presentation by the appropriate person on any business day after its date of sale by the state treasurer, at such price as the state treasurer shall determine according to a schedule established with respect to each issue of citizens bonds prior to the sale thereof.
  3. It is the legislative intent that the aggregate principal amount of citizens bonds sold to an individual purchaser should not exceed five thousand dollars ($5,000) of the primary sale during any fiscal year. Citizens bonds shall be executed in the name of the state by the state treasurer, either manually or by facsimile signature and shall be countersigned by the secretary of state, with the great seal of the state or a facsimile thereof attached thereto. The secretary of state may direct that the secretary of state's signature be placed on citizens bonds by mechanical or electronic device at the time of issuance.

Acts 1980, ch. 480, § 1; 1981, ch. 46, § 1.

9-9-402. Application of part.

This part shall be applicable to all general obligation bonds which have been authorized but which remain unissued on February 22, 1980, and all subsequent authorizations for general obligation bonds.

Acts 1980, ch. 480, § 2.

9-9-403. Bonds and interest tax-exempt — Exceptions.

Citizens bonds and the interest payable thereon are exempt from taxation by the state of Tennessee and each county, municipality and taxing district of the state, except inheritance, transfer and estate taxes.

Acts 1980, ch. 480, § 3.

Cross-References. Gift, estate, and inheritance taxes, title 67, ch. 8, parts 1-5.

9-9-404. Issuance and sale to conform to other laws.

Except as otherwise authorized by this part, citizens bonds shall be issued and sold in conformity with the terms and conditions specified in this chapter and the provisions of the law authorizing the particular bond issue for which such citizens bonds are authorized by the funding board.

Acts 1980, ch. 480, § 4.

9-9-405. Redemption of citizens bonds.

Whenever the state treasurer is authorized pursuant to § 9-9-401 to sell citizens bonds, the state treasurer is also specifically authorized to redeem those citizens bonds, whenever under the terms of the bond sale they are lawfully presented to the state treasurer, from funds available to the state treasurer and be reimbursed for such redemptions from available funds in the state's debt service fund.

Acts 1980, ch. 480, § 5; 2003, ch. 10, § 2.

Compiler's Notes. Acts 2003, ch. 10, § 3 provided that any language inconsistent with the provisions in this section in any general obligation bond enacted prior to April 2, 2003, shall be of no effect.

9-9-406. Rules and regulations.

The state treasurer is authorized to promulgate rules and regulations which are consistent with the plan approved by the state funding board pursuant to § 9-9-401 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 1980, ch. 480, § 6.

Chapter 10
[Reserved]

Chapter 11
Cash Basis Law of 1937

9-11-101. Short title.

This chapter may be cited as the “Cash Basis Law of 1937.”

Acts 1937, ch. 300, § 1; C. Supp. 1950, § 3516.11; T.C.A. (orig. ed.), § 9-1101.

Cross-References. Public entities, information concerning debt obligation issuances, § 9-21-134.

9-11-102. Chapter definitions.

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

  1. “Bond order,” as applied to a city, means the ordinance authorizing the issuance of bonds of the city, and, as applied to a county, means the order of resolution authorizing the issuance of bonds of the county;
  2. “Clerk” means the officer acting as clerk of the governing body;
  3. “Funding bonds” means bonds issued to pay or to extend the time of payment of debt not evidenced by bonds;
  4. “Governing body,” as applied to a county, means the county legislative body, and, as applied to a city, means the city council, board of commissioners, board of mayor and aldermen or the board or body in which the general legislative powers of the city are vested;
  5. “Refunding bonds” means bonds issued to pay or to extend the time of payment of debts evidenced by bonds; and
  6. “Unit” includes each county and city in the state, which shall issue bonds under this chapter.

Acts 1937, ch. 300, § 2; C. Supp. 1950, § 3516.12; impl. am. Acts 1959, ch. 9, § 8; impl. am. Acts 1978, ch. 934, §§ 7, 36; T.C.A. (orig. ed.), § 9-1102; Acts 2010, ch. 868, § 30.

9-11-103. Issuance of funding bonds.

In order that the fiscal affairs of the counties and cities in the state may be placed on a cash basis, each such unit is authorized and empowered to issue at one (1) time or from time to time bonds of the unit for the following purposes:

  1. Funding any or all warrants, notes or other indebtedness of such unit not evidenced by bonds, and interest accrued thereon, which shall be outstanding at the close of the fiscal year immediately preceding the authorization of such funding bonds;
  2. Refunding any or all bonds of the unit, and interest accrued thereon, whether such unit issued such bonds or assumed or became liable therefor, including bonds not matured if the unmatured bonds be then redeemable or if the holders thereof be willing to surrender the same for retirement, and including bonds belonging to the sinking fund of such unit; and
  3. Paying any redemption premium upon bonds so refunded and also such expenses as the governing body may deem reasonable and proper for carrying out this chapter.

Acts 1937, ch. 300, § 3; C. Supp. 1950, § 3516.13; T.C.A. (orig. ed.), § 9-1103.

Cross-References. Additional bonds authorized, § 9-11-109.

Administration by the comptroller of the treasury, 4-3-305.

Refunding on consolidation of counties, §§ 5-3-1135-3-121.

9-11-104. Contents of bond order.

All bonds issued by a unit under this chapter shall be authorized by a bond order passed by the governing body of the unit. Notwithstanding any public or private statute relating to the unit, such bond order may be finally passed at the meeting at which the same shall be introduced. The bond order shall state:

  1. A brief description of the indebtedness to be funded or refunded sufficient to identify such indebtedness, and the amount of redemption premium, if any, to be paid upon bonds refunded and the amount of expenses, if any, to be paid from the proceeds of bonds;
  2. The maximum aggregate principal amount of bonds to be issued;
  3. That a tax sufficient to pay the principal of and interest on the bonds shall be annually levied upon all taxable property in the unit; and
  4. That the bond order shall take effect upon its passage and shall not be submitted to the voters of the unit.

Acts 1937, ch. 300, § 4; C. Supp. 1950, § 3516.14; T.C.A. (orig. ed.), § 9-1104.

9-11-105. Publication of bond order.

A bond order shall be published once in each of two (2) consecutive weeks after its final passage. Such publication shall be made in a newspaper published in the unit. If there is no such newspaper, the bond order shall be posted at the door of the building in which the governing body usually holds its meetings and at three (3) other public places in the unit. A notice in substantially the following form (the blanks being first properly completed), with the printed or written signature of the clerk appended thereto, shall be published with the bond order:

“The foregoing order (ordinance) was passed on the  day of  , 20  , and was first published (posted) on the  day of  , 20  .

“Any action or proceeding questioning the validity of the order (ordinance) or the indebtedness to be funded (or refunded) or the tax to be levied for the payment of the principal and interest of such bonds, must be commenced within thirty (30) days after its first publication (or posting).

Clerk.”

Acts 1937, ch. 300, § 6; C. Supp. 1950, § 3516.16; T.C.A. (orig. ed.), § 9-1105.

9-11-106. Limitation of actions to invalidate bonds.

Any action or proceedings in any court to set aside a bond order, or to obtain any other relief upon the ground that the order is invalid, or that the indebtedness to be funded or refunded is invalid, or that there is no authority for the levy of a tax to pay the principal of and interest on the bonds, must be commenced within thirty (30) days after the first publication of the notice aforementioned and the bond order referred to in the notice. After the expiration of such period of limitation, no right of action or defense founded upon the invalidity of the bond order or the indebtedness to be funded or refunded or the tax to be levied shall be asserted, nor shall the validity of the bond order or of the funding or refunding bonds to be issued or the tax to be levied for the payment of the principal of and interest thereon, be open to question in any court upon any ground whatever, except in an action or proceedings commenced within such period.

Acts 1937, ch. 300, § 7; C. Supp. 1950, § 3516.17; T.C.A. (orig. ed.), § 9-1106.

9-11-107. Resolution for issuance of bonds.

  1. At any time after the passage of the bond order, the governing body of a unit shall have full authority by resolution to provide for the issuance of the bonds authorized by such bond order. Such resolution providing for the issuance of the bonds may be introduced and finally passed at any regular or duly called special meeting of the governing body and shall be in force and effect from and after its passage.
  2. The governing body shall by resolution determine the rate or rates of interest to be paid on the bonds, and the time or times of payment of such interest, and the maturity or maturities of the bonds, which shall be at a time or times not exceeding twenty (20) years from the date of the bonds in the case of funding bonds, and not exceeding thirty (30) years from the date of bonds in the case of refunding bonds; provided, that with the approval of the comptroller of the treasury or the comptroller's designee, funding bonds may be made to mature at any time or times not exceeding thirty (30) years from the date of the bonds and refunding bonds may be made to mature at any time or times not exceeding forty (40) years from the date of the bonds.
  3. The governing body shall also by resolution determine the form of the bonds, the officers by whom they shall be executed and the place or places in Tennessee or in any other state at which the principal and interest shall be payable.
  4. In case any of the officers whose signatures appear on the bonds or coupons shall cease to be such officers before the delivery of such bonds, such signatures shall nevertheless be valid and sufficient for all purposes, the same as if they had remained in office until such delivery.
  5. The bonds may be made registrable as to principal alone and as to both principal and interest, under such terms and conditions as may be determined by the governing body, and provisions may be made for the exchange of fully registered bonds for coupon bonds and of coupon bonds for fully registered bonds.

Acts 1937, ch. 300, § 8; C. Supp. 1950, § 3516.18; Acts 1969, ch. 283, § 3; T.C.A. (orig. ed.), § 9-1107; Acts 2010, ch. 868, § 31.

9-11-108. Annual statement by fiscal officer.

Before any funding or refunding bonds shall be issued under this chapter, a fiscal officer of the unit shall prepare a statement as of the beginning of the then current fiscal year, which statement shall show in detail the total outstanding bonds, notes, warrants and other evidences of indebtedness of the unit, together with the maturity dates thereof, interest rates, special provisions for payment, together with a description of the indebtedness proposed to be funded or refunded by the issuance of bonds. Such statement shall also show in detail the total tax collections of the unit for the preceding year, the amount of delinquent taxes, and the amount of expenditures of all funds during the preceding fiscal year, the proposed maturity or maturities of the new funding or refunding bonds to be issued, and any and all other pertinent information which may be requested by the comptroller of the treasury or the comptroller's designee. Such statement shall be filed with the comptroller of the treasury or the comptroller's designee, together with an application from the governing body of the unit requesting that the issuance of the proposed bonds be approved. If the comptroller of the treasury or the comptroller's designee shall determine that, in the comptroller of the treasury's or the comptroller's designee's opinion, the unit can fulfill this chapter as hereinafter set forth, the comptroller of the treasury or the comptroller's designee shall so certify in writing to the unit, and such certificate shall be recorded in the minutes of the unit.

Acts 1937, ch. 300, § 14; C. Supp. 1950, § 3516.23 (Williams, § 3516.24); T.C.A. (orig. ed.), § 9-1108; Acts 2010, ch. 868, § 32.

9-11-109. Sale price — Exchange — Premiums and discount.

The governing body may sell any or all of the bonds authorized under this chapter in such manner and for such price as it may determine to be for the best interest of the unit. Any or all of the bonds authorized under this chapter may be exchanged for the bonds to be refunded thereby or the evidences of indebtedness to be funded thereby, including bonds not matured or redeemable if the holder thereof be willing to surrender the same for retirement. Additional bonds may be authorized and sold under § 9-11-103(3), in an amount sufficient to pay:

  1. Any redemption premium on bonds refunded; and
  2. If such funding or refunding bonds shall be sold or delivered in exchange at a discount, the amount of such discount.

Acts 1937, ch. 300, § 9; C. Supp. 1950, § 3516.19; Acts 1969, ch. 283, § 4; T.C.A. (orig. ed.), § 9-1109.

9-11-110. Exercise of powers.

Except as hereinafter provided, the authority conferred by this chapter may be exercised at any time and from time to time, and the authorization of funding or refunding bonds by one (1) bond order shall not prevent the authorization of additional funding or refunding bonds by subsequent bond order or orders. One (1) resolution providing for the issuance of funding or refunding bonds may provide for the issuance of two (2) or more separate series of such bonds, and each series or class may have different terms and provisions from the others, and the bonds of each series or class may bear interest at different rates.

Acts 1937, ch. 300, § 12; C. Supp. 1950, § 3516.21 (Williams, § 3516.22); T.C.A. (orig. ed.), § 9-1110.

9-11-111. Exemption from taxation.

Any bonds issued pursuant to this chapter and the income therefrom are exempt from all state, county and municipal taxation except for inheritance, transfer and estate taxes and except as otherwise provided in this code.

Acts 1937, ch. 300, § 13; C. Supp. 1950, § 3516.22 (Williams, § 3516.23); T.C.A. (orig. ed.), § 9-1111; Acts 1988, ch. 750, § 41.

9-11-112. Tax levy and sinking fund provisions.

All bonds issued under this chapter shall be direct and general obligations of the unit issuing the same, for the payment of which the full faith and credit of the unit shall be irrevocably pledged. In each fiscal year while any funding or refunding bonds issued under this chapter shall be outstanding, there shall be levied upon all taxable property in the unit an ad valorem tax sufficient to pay the interest thereon as it falls due and the principal of such bonds which shall then have matured or which shall mature within the same fiscal year, and any sinking fund payments which may be provided for by the bonds or by the resolution authorizing the same, as well as all deficits in such interest, principal and sinking fund payments arising from failure to comply with this chapter or by failure to collect the taxes levied or otherwise; provided, that the governing body, in its discretion, may levy in any fiscal year a tax sufficient to pay, in addition to the interest and principal which shall fall due in such fiscal year, any portion of the interest or principal which shall fall due in any succeeding fiscal year, and may also levy in any fiscal year a tax for sinking fund payments in addition to the tax required for such payments by the resolution authorizing any of such bonds. The governing body may provide in the resolution authorizing the issuance of any such funding or refunding bonds that any sinking fund provided for such bonds shall be used solely for the purpose of redemption of the bonds authorized by such resolution, and all bonds so purchased or redeemed shall be cancelled and shall not be reissued.

Acts 1937, ch. 300, § 10; C. Supp. 1950, § 3516.20; T.C.A. (orig. ed.), § 9-1112.

9-11-113. Annual cash basis budget.

In order that the fiscal affairs of a unit may be maintained on a cash basis after issuance of any funding or refunding bonds under this chapter, and in order that the current receipts of such unit shall be sufficient to meet current expenditures, an annual budget shall be prepared by an official of the unit designated by the governing body for that purpose, which budget shall include the following:

  1. The full amount required for interest on the indebtedness of the unit and for sinking funds and for principal of serial bonds maturing during the fiscal year;
  2. A detailed statement of the amounts required during the fiscal year for the expense of conducting or operating each department, division, office or board and the subdivisions of each;
  3. The amount of any cash deficit, being the sum of all outstanding and unpaid bills or other lawful obligations and all amounts payable to all special funds of the unit at the close of the preceding fiscal year incurred for debt or other lawful charges in connection with the operation of the unit, to the extent that such sum exceeds the cash on hand or on deposit to the credit of the general funds of the unit, exclusive, however, of any cash derived from prepaid taxes or other sources applicable to the budget of the succeeding fiscal year; and
  4. An itemized estimate of the cash receipts to be available during the current fiscal year, but such itemized estimate shall be subject to the following provisions:
    1. Such estimate of collections of delinquent taxes shall not exceed an amount which represents the same percentage of the amount of taxes delinquent on the first day of the current fiscal year as the percentage of delinquent taxes outstanding on the first day of the preceding fiscal year which were actually collected in cash during such preceding fiscal year;
    2. Such estimate of collections of special assessments shall not exceed an amount which represents the same percentage of the amount of special assessments unpaid and owing to the unit on the first day of the current fiscal year as the percentage of special assessments unpaid and owing to the unit on the first day of the preceding fiscal year which were actually collected in cash during such preceding fiscal year;
    3. Such estimate of collections of miscellaneous revenues from sources other than taxes or special assessments shall in no instance nor as to any item be in an amount in excess of the amount of such miscellaneous revenues collected in cash in the preceding year; provided, that there may be included in the estimated cash receipts such amount of additional miscellaneous revenues to be derived from sources other than ad valorem taxes or special assessments as may be approved by the comptroller of the treasury or the comptroller's designee; and
    4. The amount of the cash surplus, being an amount not larger than the amount of cash on hand or on deposit to the credit of the general funds of the unit at the close of the preceding fiscal year exclusive, however, of any cash derived from prepaid taxes or other sources applicable to the budget of the succeeding fiscal year, to the extent that such cash is in excess of all outstanding and unpaid bills or other obligations lawfully incurred during such fiscal year and all amounts payable therefrom to all special funds of the unit.

Acts 1937, ch. 300, § 15; C. Supp. 1950, § 3516.24 (Williams, § 3516.25); T.C.A. (orig. ed.), § 9-1113; Acts 2010, ch. 868, § 33.

9-11-114. Appropriation ordinance.

After receiving the annual budget estimate, the governing body of the unit shall prepare an appropriation ordinance or resolution, using the budget estimate as a basis, but appropriating such sums as the governing body may deem proper for the expenses listed under § 9-11-113(2), whether greater or less than the budget estimate set forth under such subdivision (2), but no appropriation recommended by the budget estimate under § 9-11-113(1) and (3) shall be reduced by the governing body, and the taxes levied for such appropriations may be over and above all other taxes authorized or limited by law.

Acts 1937, ch. 300, § 15; C. Supp. 1950, § 3516.24 (Williams, § 3516.25); T.C.A. (orig. ed.), § 9-1114.

9-11-115. Tax levy for cash basis.

Immediately after the passage of the appropriation ordinance or resolution, the governing body shall pass an ordinance or resolution levying upon all property subject to taxation within the unit and basing such levy upon the current tax collection experience of the preceding fiscal year, such rate of tax as may be required to produce the sum necessary to balance the budget upon a cash basis. The sum necessary to balance the budget shall be ascertained by deducting from the total cash appropriations made under § 9-11-113(1), (2) and (3), such cash receipts applicable to such cash appropriations as may be estimated under the limitations of § 9-11-113(4)(A)-(D). In order that the current tax levy so made shall be truly based upon the current tax collection experience of the preceding year, such current tax levy shall be determined by dividing the sum necessary to be raised in order to balance the budget by a percentage which does not exceed the percentage obtained by dividing the amount of current taxes collected in cash in the preceding fiscal year by the amount of the taxes levied and payable in such preceding fiscal year.

Acts 1937, ch. 300, § 16; C. Supp. 1950, § 3516.25 (Williams, § 3516.26); T.C.A. (orig. ed.), § 9-1115.

9-11-116. Enforcement power of the comptroller of the treasury or comptroller's designee.

The comptroller of the treasury or the comptroller's designee shall require such periodic information from a unit operating under this chapter and make such audits as the comptroller of the treasury or the comptroller's designee deems necessary, to the end that it may be ascertained that the budget of the unit is kept balanced during the life of bonds issued under this chapter. The annual budget of each unit operating under this chapter shall be submitted to the comptroller of the treasury or the comptroller's designee at least three (3) weeks prior to its adoption. The comptroller of the treasury or the comptroller's designee must thereupon determine whether or not the budget will be in balance in accordance with this chapter. If the budget does not comply with this chapter, the comptroller of the treasury or the comptroller's designee shall have the power and authority to direct the governing body of the unit to adjust its estimates or to make additional tax levies sufficient to comply with this chapter. No budget shall be adopted by the governing body of a unit which shall have issued bonds under this chapter until it shall have been approved by the comptroller of the treasury or the comptroller's designee. The comptroller of the treasury or the comptroller's designee shall approve the budget only when the comptroller of the treasury or the comptroller's designee is satisfied that it complies with this chapter.

Acts 1937, ch. 300, § 17; C. Supp. 1950, § 3516.26 (Williams, § 3516.27); T.C.A. (orig. ed.), § 9-1116; Acts 2010, ch. 868, § 34.

9-11-117. Tax anticipation notes.

The governing body of any unit which shall have issued bonds under this chapter may issue tax anticipation notes under chapter 21 of this title.

Acts 1937, ch. 300, § 18; C. Supp. 1950, § 3516.27 (Williams, § 3516.28); T.C.A. (orig. ed.), § 9-1117; Acts 1982, ch. 580, § 2; 1988, ch. 750, § 42.

9-11-118. Remedies of bondholders.

  1. Any holder of bonds issued under this chapter, or any person or officer being a party in interest, may either at law or in equity by suit, action or mandamus, enforce and compel the performance of the duties required by this chapter of the governing body or any board or officer of the unit.
  2. Inasmuch as the purpose of this chapter is to place and maintain the fiscal affairs of the counties and cities in the state on a cash basis, this chapter shall constitute an irrepealable contract with the holders of bonds issued under this chapter.

Acts 1937, ch. 300, § 19; C. Supp. 1950, § 3516.28 (Williams, § 3516.29); T.C.A. (orig. ed.), § 9-1118.

9-11-119. Nature and construction of chapter.

No restriction, limitation, or provision contained in any other law, either public or private, relating to the issuance of bonds, notes, or other obligations of a unit, or limiting the amount of taxes which may be levied in a unit, shall apply to bonds or notes issued under this chapter. The powers granted by this chapter are in addition to all other powers heretofore granted to a unit, and nothing herein contained shall be construed as prohibiting a unit from issuing bonds or notes under any public or private statute applicable to such unit. Nothing in this chapter shall be construed as mandatory for any unit to issue funding or refunding bonds under the terms and conditions of this chapter.

Acts 1937, ch. 300, § 5; C. Supp. 1950, § 3516.15; T.C.A. (orig. ed.), § 9-1119; Acts 1982, ch. 580, § 3.

Chapter 12
[Reserved]

Chapter 13
Loans to Local Subdivisions in Emergencies

Part 1
General Provisions

9-13-101. Authority to lend appropriated funds.

The state board of equalization, with the approval of the funding board, is hereby authorized to lend state funds appropriated and made available for that purpose to municipalities and counties of the state upon terms and conditions hereinafter prescribed.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 1; T.C.A., § 9-1301.

Cross-References. Authority of counties to receive and disburse grants, loans and funds from state and federal governments, § 5-8-108.

Financially distressed municipalities, counties, utility districts and education agencies, title 9, ch. 13, part 3.

Local economic adjustment assistance, title 9, ch. 14.

9-13-102. Reduction of assessment of utility property as prerequisite for loan.

Such loans shall be made only to such municipalities or counties as can be shown to have incurred unanticipated losses of revenue necessitated or prompted by decrees or orders of competent courts reducing the assessments of railroad or public utility properties which are centrally assessed by the comptroller of the treasury and the state board of equalization.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 2; T.C.A., § 9-1302; Acts 1995, ch. 305, § 95.

9-13-103. Application for loan.

Applications for such loans shall be made only in writing and through the chief executive officer of the county or municipality so applying upon the duly enacted resolution of the governing body of such county or municipality. The application shall be addressed to the state board of equalization and shall set forth such information as the board may by regulation require relative to the budget, revenues, obligations and governmental operations of such municipality or county.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 3; T.C.A., § 9-1303.

9-13-104. Determination of necessity for loan.

The state board of equalization shall consider the loan application and conduct such investigation of the fiscal condition of the applicant county or municipality as it may deem proper to determine the necessity for such financial assistance. To this end, the board is empowered to avail itself of the services of the comptroller of the treasury and the comptroller of the treasury's office. The board shall have the right to obtain any information pertinent to the subject matter from any department of the state government and any office or department or agency of the government of the applicant city or county. It shall specifically have the power to subpoena and require the testimony under oath of any officer or employee of the applicant, and to compel the production of any paper or record in the possession or custody of any such officer or employee.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 4; T.C.A., § 9-1304; Acts 1995, ch. 305, § 96.

9-13-105. Certification to funding board.

If following its investigation and consideration of the application the board of equalization shall deem the applicant municipality or county to require such financial assistance, it shall certify such finding in writing to the funding board for its approval.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 5; T.C.A., § 9-1305.

9-13-106. Consideration by funding board — Manner of making loan — Repayment — Interest.

  1. The funding board shall independently consider any application for loan assistance as herein provided, and, on the concurrence of two-thirds (2/3) of its membership, authorize the board of equalization to lend to a municipality or county an amount not to exceed eighty percent (80%) of the local revenues shown to be lost as a result of such circumstances. Such loans shall be made only upon notes executed by the chief executive officer of the municipality or county showing on their face the concurrence of three-fourths (¾) of the governing body of the municipality or county and evidencing an attested copy of the official minutes showing such concurrence.
  2. The loans shall be repayable with interest at the rate of two percent (2%) in equal installments commencing two (2) years following the date of the note and extending not more than five (5) years from the day of the first payment.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 6; T.C.A., § 9-1306.

9-13-107. Default — Withholding state funds.

In the event of default in the payment of any installment upon any loan made pursuant to this part, the board of equalization shall give notice of such default to the commissioner of finance and administration and the state treasurer. The commissioner shall thereupon withhold any distribution to the municipality or county of any funds otherwise distributable to it under the terms of any statute of this state until any and all arrearages have been paid by the municipality or county.

Acts 1966 (2nd Ex. Sess.), ch. 3, § 7; T.C.A., § 9-1307.

Part 2
Emergency Financial Aid to Local Governments

9-13-201. Short title.

This part shall be known and may be cited as the “Emergency Financial Aid to Local Government Law of 1995.”

Acts 1984, ch. 996, § 3; 1995, ch. 63, § 1.

Cross-References. Financially distressed municipalities, counties, utility districts and education agencies, title 9, ch. 13, part 3.

9-13-202. Legislative intent.

The general assembly finds and declares that it is in the best interests of the citizens of this state that local governments be fiscally responsible and utilize sound financial management principles in serving their citizens. The general assembly notes that there are certain conditions and circumstances in which local governments must have emergency technical and financial assistance if they are to better serve their citizenry or, in the case of economic distress due to natural disaster, must have the financial flexibility to stabilize their financial condition. It is the intent of this part to provide procedures whereby local governments may acquire such emergency technical and financial assistance provided and guaranteed by the state or, in the case of natural disaster, may obtain adequate financing, thus enabling such local governments to stabilize their financial condition and to meet their current operational and debt service costs.

Acts 1984, ch. 996, § 1; 1995, ch. 63, § 1; 2010, ch. 1117, § 1.

9-13-203. Part definitions.

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

  1. “Emergency technical assistance” means direction, oversight, management, and approval of all financial dealings and transactions of a local government by the comptroller of the treasury or the comptroller's designee;
  2. “Loan guarantee” means the guarantee by the state, acting through the state funding board under this part, of a loan to a local government from a lender other than the state; and
  3. “Local government” means any incorporated city or town, metropolitan government, or county, including enterprise funds of such government entity, or utility district for purposes of §§ 9-13-206 and 9-13-212.

Acts 1984, ch. 996, § 4; 1995, ch. 63, § 1; 2010, ch. 868, § 35; 2010, ch. 1117, § 2.

9-13-204. Loan guarantees — Cutoff date for guarantee.

In order to provide emergency technical and financial assistance to a local government, the state funding board is authorized to guarantee the payment of a loan made to a local government by another lender only under the following conditions:

  1. A majority of all members constituting the local government legislative body, by resolution, has requested a loan guarantee from the state funding board;
  2. The local government legislative body agrees in its resolution requesting a loan guarantee to accept the emergency technical assistance provided by the comptroller of the treasury or the comptroller's designee and to be bound by the decisions of the comptroller of the treasury or the comptroller's designee;
  3. The state funding board has determined that current local government revenues are insufficient to pay the annual debt service and costs of operation of such local government or local government service; and
  4. The local government legislative body shall submit a plan, subject to approval by the state funding board, for the efficient operations of government services including, where applicable, a plan for the consolidation of services within that local government. Such plan shall include local government tax revenues at least equal to one hundred percent (100%) of that local government's fiscal capacity as determined by the advisory commission on intergovernmental relations. If a local government has not levied taxes at this level, a plan to increase taxes to such level at the earliest practical date must be submitted to and approved by the state funding board. The board's guarantee of the payment of any loan under this part shall be conditioned upon the implementation of the plan required under this section.

Acts 1984, ch. 996, § 5; 1992, ch. 526, §§ 1-6; 1995, ch. 63, § 1; 2010, ch. 868, § 36.

9-13-205. Security for loans — Pledges — Disposition of proceeds — Withholding of state-shared taxes.

The state funding board shall establish the terms and conditions of loan guarantees to local governments and may require such guarantees or security as it deems necessary to adequately secure the loans. The local government shall pledge the full faith and credit of the local government as security for any loan or loan guarantee. The local government shall also agree to pledge a sufficient amount of state-shared taxes to make principal and interest payments on the loan guaranteed by the state. The commissioner of finance and administration is authorized to withhold such sum or part of such sum from any state-shared taxes which are otherwise apportioned to the local government.

Acts 1984, ch. 996, § 6; 1992, ch. 526, § 7; 1995, ch. 63, § 1.

9-13-206. Issuance of notes.

Notwithstanding any other law to the contrary, the legislative body of any local government is hereby authorized to issue notes which may mature beyond the close of the fiscal year in which such notes are issued, when such notes either:

  1. Are approved by the comptroller of the treasury or the comptroller's designee and guaranteed by the state funding board; or
  2. Approved by the comptroller of the treasury or the comptroller's designee in the case of economic distress due to natural disaster certified by the federal emergency management agency (FEMA).

Acts 1984, ch. 996, § 7; 1995, ch. 63, § 1; 2010, ch. 868, § 37; 2010, ch. 1117, § 3.

9-13-207. Scope of assistance — Guidelines — Personnel — Audits — County budgets.

  1. Whenever a loan is guaranteed by the state funding board, the comptroller of the treasury or the comptroller's designee shall, subject to the comptroller of the treasury's or the comptroller's designee's discretion, provide emergency technical assistance to such local government until such time as the local government has completely repaid any loans guaranteed by or owed to the state.
  2. The comptroller of the treasury or the comptroller's designee shall provide emergency technical assistance under the guidelines of the statutes or private acts applicable to the local government and shall perform the duties prescribed by such statutes or private acts; provided, that if the applicable local government purchasing law authorizes emergency purchases, such emergency purchases shall only be made with the prior approval of the comptroller of the treasury or the comptroller's designee.
  3. All authority for the implementation and administration of the laws set out in subsection (b) shall be vested in the comptroller of the treasury or the comptroller's designee.
    1. Notwithstanding any other law, the comptroller of the treasury or the comptroller's designee has total and complete authority over the budget, purchases and expenditures of such local government, including the budget, purchases and expenditures of the local government school system and enterprise funds.
    2. The commissioner of education shall appoint a qualified and responsible person to advise and assist the comptroller of the treasury or the comptroller's designee on budgeting, accounting, purchasing, and expenditures of the school system of the local government.
  4. The comptroller of the treasury or the comptroller's designee shall require such periodic information from a local government operating under this part and require such audits as the comptroller of the treasury or the comptroller's designee may deem necessary. The annual budget of each local government shall be submitted to the comptroller of the treasury or the comptroller's designee at least three (3) weeks prior to its adoption. The comptroller of the treasury or the comptroller's designee shall determine whether or not the budget will be in balance and is fiscally responsible. No budget shall be adopted by the legislative body until it shall have been approved by the comptroller of the treasury or the comptroller's designee. Such governing body shall adopt a budget at the first meeting of the legislative body in July of each year or prior to such meeting as required by any public or private act, or as soon thereafter as practical, but in no event shall the budget be adopted later than the third Monday in September.

Acts 1984, ch. 996, § 8; 1992, ch. 526, § 8; 1995, ch. 63, § 1; 2010, ch. 868, § 38.

9-13-208. Notice of director's approval for purchases or payments.

The state funding board shall publish a notice, in a newspaper of general circulation in any local government which is receiving emergency technical assistance pursuant to this part, that no purchase of or payment for goods, services or equipment or other matters shall be made by such local government without the prior approval of the comptroller of the treasury or the comptroller's designee. Such notice shall be published at least once weekly for two (2) consecutive weeks. Such notice shall also be posted for two (2) consecutive weeks in five (5) conspicuous places in the local government, one (1) of which shall be the courthouse.

Acts 1984, ch. 996, § 9; 1995, ch. 63, § 1; 2010, ch. 868, § 39.

9-13-209. Payment of costs — Administrative personnel.

  1. When a local government is granted a loan guarantee, any costs as determined and approved by the state funding board which are associated with providing the loan guarantee or technical assistance, including, but not limited to, the services of the comptroller of the treasury or the comptroller's designee and other personnel, shall be borne by such local government; provided, that such costs shall not exceed five percent (5%) of the amount of the loan guarantee.
  2. The comptroller of the treasury shall provide any staff necessary to administer this part; provided, that, whenever possible and feasible, the comptroller of the treasury or the comptroller's designee will utilize employees of such local government, county technical assistance service, or municipal technical advisory service to assist in the administrative tasks.

Acts 1984, ch. 996, § 10; 1995, ch. 63, § 1; 2010, ch. 868, § 40.

9-13-210. Reports to legislative committees.

The comptroller of the treasury shall report to the state funding board at the next meeting of the state funding board following any approval of note issuance pursuant to § 9-13-206. The state funding board shall report to the finance, ways and means committees of the senate and the house of representatives whenever a loan guarantee is requested, and shall keep the committees advised whenever any subsequent action is taken.

Acts 1984, ch. 996, § 11; 1995, ch. 63, § 1; 2010, ch. 1117, § 4.

9-13-211. Penalty for nonperformance.

Any official or employee of the local government, or of any institution or agency thereof, who fails or refuses to perform the duties required of such official or employee by this part, or who fails or refuses otherwise to conform to this part, commits a Class C misdemeanor and is subject to fine and to removal from office or position in accordance with title 8, chapter 47.

Acts 1984, ch. 996, § 12; 1989, ch. 591, § 113; 1995, ch. 63, § 1.

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

9-13-212. Issuance of notes — Guidelines — Use for operational expenses.

Notes issued pursuant to this part shall be issued in the manner provided by chapter 21, parts 1, 4, 6, and 8 of this title. Notwithstanding any other law to the contrary, any notes issued pursuant to this part may be used for operational expenses and extend past the current fiscal year.

Acts 1992, ch. 526, § 9; 1995, ch. 63, § 1; 2010, ch. 1117, § 5.

Part 3
Financially Distressed Municipalities, Counties, Utility Districts and Education Agencies

9-13-301. Short title.

This part shall be known and may be cited as the “Financially Distressed Municipalities, Counties, Utility Districts and Education Agencies Act of 1993.”

Acts 1993, ch. 76, § 1.

9-13-302. Duties of the comptroller of the treasury.

The comptroller of the treasury shall develop and recommend statutory changes, policies, and procedures for the purpose of:

  1. Promptly identifying financially distressed municipalities, counties, utility districts and education agencies;
  2. Providing for the timely restructuring of the debt of such municipalities, counties, utility districts and education agencies;
  3. Considering the need for temporary loans or other fiscal adjustments to prevent fiscal crisis; and
  4. Providing for consolidation or merger of contiguous municipalities, counties, utility districts or education agencies, or for the merger of functions of such entities in order to relieve financial distress.

Acts 1993, ch. 76, § 2.

Chapter 14
Local Economic Adjustment Act of 1975

9-14-101. Short title.

This chapter shall be known and may be cited as the “Local Economic Adjustment Act of 1975.”

Acts 1975, ch. 312, § 1; T.C.A., § 9-1501.

9-14-102. Purpose.

In order to promote the health, safety, right to gainful employment, economic opportunity and general welfare of the inhabitants of this state, the local governments (cities, towns and counties) are authorized to participate cooperatively with the state and federal governments in activities designed to alleviate or moderate existing or potential conditions of severe economic adjustment, resulting from termination or closure of major industries or firms, unemployment caused therefrom, and other hardships that would result in loss of the labor force, breakup of the family unit, and other conditions resulting from explosions, floods, earthquakes, or other major disasters, natural or man-made.

Acts 1975, ch. 312, § 2; T.C.A., § 9-1502.

9-14-103. Chapter definitions — Economic adjustment project.

For the purposes of this chapter, unless the context otherwise requires:

  1. “Cities,” “towns” and “counties” mean those general government units that are political subdivisions of the state of Tennessee;
  2. “Economic adjustment project” means those activities for which funds are available from local, state or federal sources and which include one (1) or more of the following objectives:
    1. Plan, finance, construct, operate and maintain all types of public facilities, including publicly owned industrial parks;
    2. Make commercial loans for business and industrial development;
    3. Do economic development planning, including research and technical assistance studies related to accelerating the development process;
    4. Provide public service jobs;
    5. Provide rent supplements to families and individuals, including loans and grants;
    6. Provide mortgage payment assistance to families and individuals, including loans and grants;
    7. Provide for costs of relocation of families and individuals, including loans and grants;
    8. Provide vocational and technical training in cooperation with the state's system of vocational and technical schools; and
    9. Provide other appropriate assistance related to economic adjustment and the purposes of this chapter;
  3. “Federal government” means the government of the United States and any agency, department, board or commission thereof performing or administering programs enacted by statute; and
  4. “State” means the state of Tennessee, including all state agencies, departments, boards, commissions, and other bodies which carry out state functions and programs. “State” also includes development districts as created by title 13, chapter 14.

Acts 1975, ch. 312, § 3; T.C.A., § 9-1503.

9-14-104. Loans and grants authorized.

  1. Cities and counties are authorized to accept grants from the federal government to carry out economic adjustment projects. Cities and counties are also authorized to enter into contractual agreements with the federal government and with state government to accept grants and disburse or redistribute funds for purposes of economic adjustment projects, such disbursements to be in the form of grants and loans. No grant, however, shall be made to a private profit-making entity. Grants or loans can be made to a private or public nonprofit organization or association.
  2. Loans for commercial and industrial development purposes shall be legally binding obligations and shall require interest payments and shall be consummated in accordance with applicable state and federal statutes and regulations. Commercial loans can be made only for legal purposes and subject to safeguards to protect the public interest, and can be made in conjunction with another commercial lender, a federal agency, and a state industrial development authority. Commercial loans made under this chapter can be first, second or third mortgage loans. The claim and right for principal repayment on second and third mortgage loans shall be secondary and subordinate to the first mortgage loan, except that repayment of principal and interest shall be made and prorated concurrently as agreed among the several lenders. In cases of foreclosure and acquisition of assets for liquidation or resale, the claim and right of the city or county shall be in a first, second or third mortgage position, as appropriate and as agreed to.
  3. Loans made for public facilities, the repayment of which extends more than five (5) years, shall be in the form of municipal bonds, subject to the bond provisions and procedures spelled out by state enabling statutes for cities, counties and other political subdivisions. Loans made for less than five (5) years may be at a reduced interest cost, but not less than two percent (2%), simple interest.

Acts 1975, ch. 312, § 4; T.C.A., § 9-1504.

Cross-References. Authority of counties to receive and disburse grants, loans and funds from state and federal governments, § 5-8-108.

9-14-105. City and county economic adjustment departments.

Cities and counties, singly or jointly by contract with each other or with state government, in initiating an economic adjustment project or program, shall create a department within the local government to carry out such projects or programs over a multi-year period. Such department shall be staffed by competent professionals, and headed by a director responsible to the local government as determined by ordinance, resolution or contract agreement.

Acts 1975, ch. 312, § 5; T.C.A., § 9-1505.

9-14-106. Funds.

Cities and counties are specifically authorized to appropriate funds from local sources, from general funds available, and from any other source authorized by state law, to operate the department and otherwise manage an economic adjustment project as described in this chapter, including the provision of funds needed to match available state and federal funds for such purposes. Commercial loans made to individuals, private firms and corporations shall in no way extend the credit of cities and counties in behalf thereof; however, such loans can be made in behalf of the federal government and with use of federal funds granted for such purposes.

Acts 1975, ch. 312, § 6; T.C.A., § 9-1506.

9-14-107. Record of activities and finances.

Appropriate financial and other records shall be kept on all transactions, which will show at all times activities planned, in progress and completed, the cost of each activity, the operational costs, and other such information as may be required to protect the public interest. An annual financial audit of the department shall be made by the comptroller of the treasury as provided by § 9-3-211. All records shall be open for public inspection during regular working hours. All audits performed by the internal audit staff of the department shall be conducted in accordance with the standards established by the comptroller of the treasury pursuant to § 4-3-304(9).

Acts 1975, ch. 312, § 7; T.C.A., § 9-1507; Acts 1984, ch. 794, § 6.

9-14-108. Construction of chapter.

This chapter, being necessary for the welfare of the state and its inhabitants, shall be liberally construed so as to effectuate its purposes.

Acts 1975, ch. 312, § 8; T.C.A., § 9-1508.

Chapter 15
[Reserved]

Chapter 16
Special County Census for Allocation of Funds

9-16-101. Special census by counties.

For purposes of determining its eligibility in whole or part for an allocation of tax proceeds or other funds, each county may take not more than two (2) special censuses at its own expense at any time during the interim between the regular decennial federal censuses. The special census shall be taken by the federal census bureau or in a manner directed by and satisfactory to the department of economic and community development. The population of the county shall thereafter be revised in accordance with the special census, effective on July 1 following certification of the census results by the federal census bureau or department of economic and community development to the commissioner of finance and administration.

Acts 1978, ch. 806, § 1; T.C.A., § 9-1701; Acts 1995, ch. 501, § 7.

Cross-References. Special census by municipality for distribution of municipal street aid funds, § 54-4-203.

Special census by municipality for distribution of sales tax, § 67-6-103.

Special census by municipality for distribution of state privilege tax, § 57-5-205.

Textbooks. Tennessee Jurisprudence, 5 Tenn. Juris., Census, § 1.

Chapter 17
[Reserved]

Chapter 18
Financial Integrity Act of 1983

9-18-101. Short title.

This chapter shall be known and may be cited as the “Financial Integrity Act of 1983.”

Acts 1983, ch. 129, § 1.

Law Reviews.

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

9-18-102. Internal controls — Management assessment of risk.

  1. Each agency of state government and institution of higher education along with each county, municipal, and metropolitan government shall establish and maintain internal controls, which shall provide reasonable assurance that:
    1. Obligations and costs are in compliance with applicable law;
    2. Funds, property, and other assets are safeguarded against waste, loss, unauthorized use, or misappropriation; and
    3. Revenues and expenditures are properly recorded and accounted for to permit the preparation of accurate and reliable financial and statistical reports and to maintain accountability over the assets.
  2. To document compliance with the requirements set forth in subsection (a), each agency of state government and institution of higher education shall annually perform a management assessment of risk. The internal controls discussed in subsection (a) should be incorporated into this assessment. The objectives of the annual risk assessment are to provide reasonable assurance of the following:
    1. Accountability for meeting program objectives;
    2. Promoting operational efficiency and effectiveness;
    3. Improving reliability of financial statements;
    4. Strengthening compliance with laws, regulations, rules, and contracts and grant agreements; and
    5. Reducing the risk of financial or other asset losses due to fraud, waste and abuse.

Acts 1983, ch. 129, § 1; 1998, ch. 664, §§ 1, 2; 2008, ch. 750, § 1; 2015, ch. 112, § 1.

9-18-103. Guidelines for assessment of compliance.

The commissioner of finance and administration, in consultation with the comptroller of the treasury, shall establish guidelines for the assessment, by management of state agencies and higher education institutions, of the risks and systems of internal control to determine compliance with the requirements of § 9-18-102. The commissioner, in consultation with the comptroller of the treasury, may modify the guidelines from time to time as deemed necessary.

Acts 1983, ch. 129, § 1; 1998, ch. 664, § 3; 2008, ch. 750, § 2.

9-18-104. Report by head of executive agency.

  1. By December 31, 2008, initially, and then by December 31 of every year thereafter, the head of each state agency and higher education institution shall, on the basis of the evaluations conducted in accordance with guidelines prescribed under § 9-18-103, prepare and transmit to the commissioner of finance and administration and the comptroller of the treasury a report that states that:
    1. The agency or institution acknowledges its management's responsibility for establishing, implementing and maintaining an adequate system of internal control; and
    2. A management assessment of risk performed by the agency or institution provides or does not provide reasonable assurance of compliance with the objectives of the assessment as specified in this chapter.
  2. In the event that the agency's or institution's assessment does not provide reasonable assurance of compliance with the objectives of the assessment as stated in this chapter, the report shall include a corrective action plan that identifies:
    1. Any significant deficiencies or material weaknesses in the agency's or institution's system of internal control and/or lack of risk mitigating control activity; and
    2. The plans and the schedule for correcting the weaknesses.

Acts 1983, ch. 129, § 1; 1998, ch. 664, §§ 4-6; 2008, ch. 750, § 3; 2009, ch. 99, § 1.

Chapter 19
Registration of Public Obligations

9-19-101. Short title.

This chapter may be known as the “Tennessee Public Obligations Registration Act.”

Acts 1983, ch. 100, § 1.

9-19-102. Chapter definitions.

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

  1. “Book-entry form” means, with respect to public obligations, obligations that are not represented by an instrument but are evidenced and transferred on registration books maintained for that purpose by or on behalf of the issuer;
  2. “Facsimile seal” means the reproduction by engraving, imprinting, stamping, or other means of the seal of the issuer, official or official body;
  3. “Facsimile signature” means the reproduction by engraving, imprinting, stamping, or other means of the manual signature of an authorized officer;
  4. “Financial intermediary” means a bank, broker, or clearing corporation or the nominee of any of them, or other person or nominee which in the ordinary course of its business maintains public obligation accounts for its customers, when so acting;
  5. “Issuer” means any entity, department, or agency which under the laws of this state issues public obligations. “Issuer” may thus include the state of Tennessee, agencies of the state of Tennessee and all political subdivisions and public instrumentalities of the state of Tennessee, including, without limitation, cities, towns, metropolitan governments, counties, authorities, districts, and corporations or other public entities;
  6. “Official” or “official body” means the officer or board that is empowered under the laws of this state to provide for original issuance of a public obligation of the issuer, by defining the obligation and its terms, conditions and other incidents, the successor or successors of any such official or official body, and such other person or group of persons as shall be assigned duties of such official or official body under applicable law from time to time;
  7. “Official actions” means the actions by statute, order, ordinance, charter, resolution, contract, or other authorized means by which the issuer provides for issuance of a public obligation; and
  8. “Public obligation” means an agreement of an issuer to pay principal and any interest thereon, whether in the form of a contract to repay borrowed money, a lease, an installment purchase agreement, or otherwise, and includes a share, participation, or other interest in any such agreement.

Acts 1983, ch. 100, § 2.

9-19-103. Authorization to issue public obligations.

Notwithstanding any other law, issuers are hereby authorized to issue public obligations in fully registered form. Such obligations in fully registered form may, if permitted by the official action authorizing public obligations, be issued in book-entry form. If permitted by the official actions authorizing public obligations, obligations in fully registered form and in bearer form shall be exchangeable from time to time.

Acts 1983, ch. 100, § 3.

9-19-104. Registration agents — Paying agents.

Any issuer of fully registered public obligations is authorized to appoint a registration agent or agents and paying agent or agents with respect to the issuance, exchange and transfer of such public obligations or to maintain records so that public obligations in book-entry form may be effected, with such duties as shall be determined by the issuer. Any such registration agent may be a bank, trust company, financial institution or other financial intermediary within or without this state, including the federal government or any of its agencies or instrumentalities. The state funding board is authorized to adopt such guidelines as it deems necessary relative to the qualifications that such bank, trust company, financial institution, or other financial intermediary must meet to qualify as a registration agent or paying agent for any fully registered public obligations to be issued by any issuer in Tennessee. Any issuer may act as its own registration agent and paying agent in accordance with such terms and conditions as may be established by the state funding board. Any issuer, including the state of Tennessee, may, upon approval by the state funding board, appoint the state of Tennessee, acting by and through the comptroller of the treasury, as registration agent and the state of Tennessee, acting by and through the state treasurer, as paying agent.

Acts 1983, ch. 100, § 4.

9-19-105. Records and books.

  1. The registration agent shall keep such books as shall be necessary in connection with the issuance, exchange and transfer of fully registered public obligations. Any issuer may provide that no such fully registered public obligation shall be valid for any purpose unless certified or authenticated by such registration agent, and if so provided, then such fully registered public obligation shall be valid only if so certified or authenticated by the manual signature of an officer of such registration agent.
  2. The issuance and transference of a public obligation in book-entry form shall be effected by means of entries on the records of the registration agent which shall reflect the description of the issue, the principal amount, the interest rate, the maturity date, the owner of the public obligation and such other information as the issuer deems appropriate. If so permitted by the official actions authorizing public obligations, conversions may be effectuated between such obligations in book-entry form and registered public obligations evidenced by an instrument for owners of obligations who request such a change. The registration agent shall issue a confirmation of a book-entry transaction in the form of a written advice to the appropriate parties thereto. Such written advice shall confer no rights on the recipient, and shall be neither a negotiable instrument nor a security.

Acts 1983, ch. 100, § 5.

9-19-106. Signatures and seals.

  1. Notwithstanding any other law to the contrary, public obligations issued in registered form are not required to bear manual signatures of officials of the issuer if such public obligations bear facsimile signatures in lieu thereof, and are certified or authenticated with the manual signature of an officer of the registration agent, and if the use of such facsimile signatures and certification or authentication is provided for in the official actions of the official body authorizing such obligations.
  2. In case any official of the issuer whose signature or facsimile signature appears on a public obligation shall cease to hold office before the delivery thereof to the initial purchasers or before any exchange or transfer between subsequent holders thereof, such signature or facsimile signature nevertheless shall be valid for all purposes the same as if such official had remained in office until after such delivery, exchange or transfer.
  3. When a seal is required or permitted in the execution of any public obligation, the seal may be printed, engraved, stamped, or otherwise placed in facsimile thereon. The facsimile seal has the same legal effect as the impression of the seal.
  4. Notwithstanding the foregoing, no signature or endorsement shall be required upon the original issuance or subsequent transfer of fully registered public obligations in the event that such obligations are issued in book-entry form.

Acts 1983, ch. 100, § 6.

9-19-107. Notice of redemption.

In the event fully registered public obligations are subject to redemption by the terms thereof, the issuer may redeem one (1) or more of such obligations or portions thereof by giving the notice specified by the official actions authorizing such obligations or, in the event no provision for notice is therein specified, by mailing or directing the registration agent to mail, postage prepaid, not less than twenty-one (21) days prior to the date fixed for redemption, to the registered owners of such obligations which are to be redeemed at their last address appearing upon the registration books, a notice that the issuer is calling for redemption prior to maturity of such obligations in accordance with the terms thereof. Such notice shall specify the number, issue, date, date fixed for redemption, the date interest will cease to accrue, the redemption price and such further information with respect to such obligations as may be required by the terms thereof. Such notice may be waived by the registered owner of the public obligation subject to redemption.

Acts 1983, ch. 100, § 7.

9-19-108. Interest.

Interest on fully registered public obligations shall be payable on such dates as shall be specified in the official actions authorizing such obligations to the record owners of such obligations as of such record dates as shall be specified in the official actions.

Acts 1983, ch. 100, § 8.

9-19-109. Confidentiality of owner's identity.

The identity of any owner of, or any other information by or from which may be determined the identity of any owner of, any public obligation issued by any issuer shall be treated as confidential and not open to public inspection. The confidentiality herein established shall not be deemed to have been extinguished but shall remain inviolate in cases where such information is in the possession of banks, trust companies, financial institutions or other financial intermediaries of the issuer, including, but not limited to, registration, paying or transfer agents.

Acts 1983, ch. 100, § 9.

Cross-References. Confidentiality of public records, § 10-7-504.

NOTES TO DECISIONS

1. Intent.

This statute was not intended to prevent access to the identities of bondholders, where that information is necessary to resolve matters in litigation. Huntsville Utility Dist. of Scott County v. General Trust Co., 839 S.W.2d 397, 1992 Tenn. App. LEXIS 238 (Tenn. Ct. App. 1992).

9-19-110. Construction of chapter.

The powers conferred by this chapter are in addition and supplemental to the powers conferred by any other law and without regard to the provisions, requirements or restrictions of any other law. The provisions hereof are not in substitution for the powers conferred by any other law. In the event that the provisions hereof conflict with other provisions of general or special law or charter provisions, the provisions hereof shall be deemed to control.

Acts 1983, ch. 100, § 10.

Law Reviews.

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

Chapter 20
Tennessee Allocation Plan for Private Activity Bonds

9-20-101. Short title.

This chapter shall be known as the “Tennessee Allocation Plan for Private Activity Bonds.”

Acts 1985, ch. 237, § 1; 1987, ch. 57, § 1.

Code Commission Notes.

Acts 1985, ch. 237, § 6 provided that for the purposes of this chapter, any issue of private activity bonds with respect to which the commissioner has issued a letter of reservation for calendar year 1985 pursuant to the authority granted by Executive Order 62 promulgated August 7, 1984, shall be deemed approved under this chapter.

Cross-R