AN ACT to amend Tennessee Code Annotated, Title 4; Title 5; Title 6; Title 7; Title 8 and Title 9, relative to actions of local governments.
SB0845, enacted as Public Chapter 514, creates a state enforcement process for reviewing local government actions that may violate Tennessee law or the Tennessee Constitution. It authorizes the attorney general and reporter to review ordinances, regulations, orders, policies, and guidelines adopted by counties, metropolitan or charter counties, cities, towns, and their subdivisions. If the attorney general concludes a local action is unlawful, the local government must be notified in writing of the specific legal provision at issue.
After notice, the local government has 60 days either to repeal or revise the action to cure the violation or to challenge the attorney general’s finding in a special action before a three-judge panel under § 20-18-101. If the local government does not cure the issue or challenge the finding, the attorney general must file the special action. If the panel rules that the local action violates state law or the state constitution, the commissioner of finance and administration and the state treasurer must withhold state funds otherwise due to the local government, including state-shared taxes, until the violation is resolved. Once the panel is satisfied the violation has been cured, it must notify state officials to resume funding.
The bill also limits the withholding remedy by excluding funds where withholding would conflict with state contracts, federal law, binding court judgments, or the Tennessee Constitution. It applies only to local government actions taken on or after July 1, 2025, and to funds allocated or appropriated during or after the 2026-2027 fiscal year.
The bill adds a new state oversight and enforcement mechanism in Title 4 that gives the attorney general direct authority to review local government actions for compliance with state law and the Tennessee Constitution. It also creates a judicial review process through a three-judge panel and authorizes the suspension of state financial support, including shared tax revenues, as a penalty for noncompliant local actions. Local governments affected include counties, metropolitan and charter counties, cities, and towns, along with their agencies and subdivisions.
The voting history suggests the bill was controversial but ultimately advanced. It initially failed in the Senate State and Local Government Committee, then later received a favorable recommendation with amendments by a 5-1 vote. The final enactment indicates enough support to pass both chambers and be signed into law, but the committee history shows significant concern among some members about the scope of state power over local governments.
The main point of contention is the bill’s expansion of state authority over local policymaking, especially the threat to withhold state funds if a local government action is found unlawful. Supporters likely viewed it as a tool to ensure local compliance with state law and the Tennessee Constitution, while opponents likely objected to the breadth of the attorney general’s review power, the mandatory funding cutoff, and the potential impact on local autonomy and budgets. The narrow committee vote and initial failure indicate that the enforcement mechanism and fiscal penalties were the most disputed features.