Title 12 Public Property, Printing And Contracts

Chapter 1 Acquisition of Property

Part 1 General Provisions

§ 12-1-101. Acceptance of gifts.

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

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

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

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

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

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12-1-105

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

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

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12-1-105

§ 12-1-105. Payment for federal property.

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

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

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

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12-1-107

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

In the event it becomes necessary to so acquire any land under authority of §§ 12-1-106 — 12-1-108, the commissioner of the department seeking to have the same acquired shall make a request in writing to the governor, giving in detail the location of the land sought to be acquired, its probable cost, the necessity for the acquisition and all other information the commissioner deems material, and if the governor approves the request for acquisition, the commissioner shall then be authorized to acquire the land.

§ 12-1-108. Condemnation request.

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

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12-1-107

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

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

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49-50-1001(b)(6)

§ 12-1-110. Joint purchase of art.

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

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

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

Part 2 Government Taking of Private Property

§ 12-1-201. Purpose of part.

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

§ 12-1-202. Part definitions.

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

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9-8-307(a)(1)(V)

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

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

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

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

§ 12-1-205. Attorneys' fees.

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

§ 12-1-206. Limitation of action.

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

Chapter 2 Administration and Disposition of State Property

Part 1 General Provisions

§ 12-2-101. Development of natural resources.

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

§ 12-2-102. Inventory maintained by governor.

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

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12-2-110

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

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

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

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

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

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

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12-2-104

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

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

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

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

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

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

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

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

§ 12-2-110. Provisions in pari materia.

Sections 12-2-103 — 12-2-111 shall be read in pari materia with § 12-2-102, except insofar as those sections are expressly in conflict therewith, and, in the event of such conflict, §§ 12-2-103 — 12-2-111 shall prevail.

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12-2-111

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

The commissioner of general services, on approval of the governor, is empowered to employ a qualified engineer and such other assistants as may be necessary to enable the commissioner to fully perform the duties and to execute the powers conferred by §§ 12-2-103 — 12-2-110.

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12-2-110

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

(a) The commissioner of general services, with the approval of the governor and attorney general and reporter, may sell, lease or otherwise convey any interest in surplus state real property according to the following provisions:
1. (1) Real property shall not be sold in fee, and any interest or rights in minerals, coal, natural gas, oil, timber and any other energy related resources shall not be conveyed if there is any feasible use for the property by any state agency, as determined by the governor, the attorney general and reporter and the commissioner of general services. Should the state agency have an approved use for the property, the commissioner is authorized to transfer jurisdiction to the appropriate agency at no cost;
2. (2) As to sales in fee, and to a conveyance of an interest or rights in minerals, coal, natural gas, oil, timber, and other energy-related resources, such property must be appraised by an independent, qualified appraiser, wholly disconnected from state government or other legal governmental entity except as may otherwise be determined by the state building commission. The state building commission may require a second appraisal to be completed by a qualified appraiser, wholly disconnected from the first appraiser, prior to the disposal of the property;
3. (3) As to sales in fee, and to any conveyance of any interest or rights in minerals, coal, natural gas, oil, timber and any other energy-related resources, such surplus property having an average appraised value exceeding twenty-five thousand dollars ($25,000) shall be advertised not less than one (1) time in a newspaper which is local with respect to the property to be sold and once in a newspaper in either Nashville, Memphis, Chattanooga or Knoxville, whichever is nearest by air; provided, that if one (1) of these four (4) cities is the situs of the property to be sold, advertisement shall be made twice within a two-week period. Any interest or rights in minerals, coal, natural gas, oil, timber and any other energy-related resources shall be sold by the sealed bid method with the condition that the state shall have the right to refuse any and all bids. Fee interests in real property shall be sold by the sealed bid method or by public auction in accordance with policies established by the state building commission, with the condition that the state shall have the rights to refuse any and all bids. As used in this subdivision (a)(3), “public auction” may include, without limitation, internet auctions and in-person auctions so long as such auctions are open for participation by the public at large. Upon the approval of the governor, the attorney general and reporter, and the commissioner, the successful bidder will be notified of the intent to award within a period of forty-five (45) days commencing from the date of bid openings;
4. (4) All interests in real property other than the fee interest, including, but not limited to, leases, easements and rights-of-way, shall be disposed of in accordance with policies established by the state building commission, including advertisement and appraisal where deemed appropriate by the state building commission; provided, however, that, if the property was acquired by or for the use of the department of transportation for right-of-way, then the department of transportation may convey the interests in the property by negotiated sale or disposal to any legal governmental body for a public use purpose, subject to reversion to the department of transportation for failure to continue public ownership and use, or to the former owner or an adjoining owner for fair market value, in accordance with procedures established in subdivision (a)(8). If approved by the department of transportation, and the federal highway administration where required by federal law, a functional replacement of real property may be considered to continue public ownership and use, and shall not be subject to reversion to the department of transportation, if the replacement property is at least equal in fair market value to the property being replaced. For the purposes of this subdivision (a)(4), a functional replacement of real property means real property that serves the same function as the real property conveyed by the state by providing equivalent utility, as determined by the department of transportation, and the federal highway administration where required by federal law. The fair market value of the replacement property shall be determined in accordance with the procedures for determining the fair market value of the surplus property established in subdivision (a)(8). This subdivision (a)(4) shall not apply to the disposal or conveyance in any manner of any interest or rights in minerals, coal, natural gas, oil, timber and any other energy related resources; provided, that the commission shall have authority to promulgate rules and regulations over the disposal or conveyances pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5;
5. (5) Subdivisions (a)(2) and (3) may be waived to permit the negotiated sale of any such property to any legal governmental body for a public use purpose, and, further, to permit any other negotiated sale or disposal without advertisement or appraisal as the state building commission may deem in the best interest of the state. Subdivisions (a)(2) and (3) may also be waived to permit the commissioner, with the approval of the attorney general and reporter and the governor, to grant such easements and rights-of-way as are deemed necessary to provide services for the benefit of the state agency, department or institution or of the general public;
6. (6) The final conveyance of any property shall be effective to vest in the purchaser thereof such title as the state shall have in the premises; the state shall not be liable upon any covenant of warranty or seisin irrespective of whether or not the same is contained in such conveyance;
7. (7) The funds so collected from the sale and conveyance of such property not otherwise specified shall be paid into the general fund of the state; provided, that all expenses incurred during such sale shall be paid from the proceeds and the balance of such proceeds shall be deposited into the general fund, except where otherwise provided by law. In instances in which other law specifies that the proceeds be deposited into a fund other than the general fund or into a special account in the general fund, the expenses of such sale or conveyance shall be paid from such other fund or special account. The funds so collected from the sale and conveyance of any property which has been deemed surplus right-of-way held for the use or benefit of the department of transportation shall be paid into the highway fund, and all expenses incurred during such sale shall be paid from the highway fund;
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8. (8)
  1. (A) If the property was acquired by or for the use of the department of transportation for right-of-way, if its fair market value does not exceed two hundred fifty thousand dollars ($250,000) or such amounts in excess of two hundred fifty thousand dollars ($250,000) as may be approved by the state building commission, and if any adjoining property owner or the former owner of that property wishes to purchase the property, or if a legal governmental body wishes to acquire the property for a public use purpose under this subdivision (a)(8)(A) or subdivision (a)(8)(B), or if a legal governmental body wishes to acquire the property for fair market value as provided in subdivision (a)(8)(D), then this subdivision (a)(8) shall apply, notwithstanding any other provision of this section. Instead, the commissioner of transportation is authorized to declare the property surplus if the commissioner determines that the purpose of its acquisition has been completed and that the property is no longer needed by the department of transportation or another state agency, and may sell it to any adjoining property owner or the former owner of that property, for an amount representing not less than the fair market value, together with costs; provided, however, that the department of transportation may convey the property or any interest in the property by negotiated sale or disposal to any legal governmental body for a public use purpose, subject to reversion to the department of transportation for failure to continue public ownership and use. If approved by the department of transportation, and the federal highway administration where required by federal law, the department of transportation may accept real property in exchange for the surplus real property conveyed if the replacement property is at least equal in fair market value to the surplus property being replaced. The fair market value of the replacement property shall be determined in accordance with the procedures for determining the fair market value of the surplus property established in this subdivision (a)(8). The commissioner of general services shall concur in the fair market value amount or in the negotiated sale or disposal of the property to a legal governmental body for a public use purpose. If in the judgment of the department of transportation a survey of the property is required, the prospective purchaser shall pay the department of transportation in advance for the cost of the survey;
  2. (B) The former property owner's right shall terminate ten (10) years after the date of acquisition by the department of transportation by conveyance or date of taking in condemnation of the subject property by the department. The former property owner's right shall not transfer to the owner's heirs. The former property owner shall have first right of refusal to purchase the right-of-way; provided, however, that the department may convey the property or any interest in the property to a legal governmental body for a public use purpose, subject to reversion to the department of transportation for failure to continue public ownership and use, without offering the former owner a first right of refusal to purchase the property. If the former property owner relinquishes the owner's right or the right has expired, the property may be conveyed to a legal governmental body in accordance with subdivision (a)(8)(D) or to an adjoining property owner. If more than one (1) adjoining property owner is interested in purchasing the right-of-way, the interested adjoining property owners shall submit sealed bids to the department of transportation, with the minimum bid price being the fair market value determined by appraisal, and the property may be conveyed to the adjoining property owner offering the highest responsive bid. The successful bidder shall reimburse any unsuccessful prospective purchaser for survey and appraisal costs incurred in accordance with the requirements of this subdivision (a)(8);
  3. (C) For the purposes of this subdivision (a)(8), the fair market value of surplus right-of-way property shall be determined in accordance with the following procedures:
    1. (i) The department of transportation shall make a preliminary planning estimate of the fair market value of the property in accordance with procedures that the department may establish;
    2. (ii) If the department of transportation's preliminary planning estimate of the fair market value of the property is twenty-five thousand dollars ($25,000) or less, the property shall be appraised by an appraiser on staff with the department of transportation at no cost to the prospective purchaser;
    3. (iii) If the department of transportation's preliminary planning estimate or subsequent staff appraisal of the fair market value of the property is greater than twenty-five thousand dollars ($25,000), the property shall be appraised by an independent appraiser whose services shall be procured by the department of transportation in accordance with state law. The independent appraiser must be licensed and certified by the Tennessee real estate appraiser commission and shall be selected from a list of prequalified appraisers approved by the department of transportation. The prospective purchaser shall pay the department of transportation in advance for the cost of the independent appraisal;
    4. (iv) The initial appraisal shall be subject to review and approval by the department of transportation in accordance with procedures that the department of transportation may establish. The appraisal review shall be conducted, at the department of transportation's expense, by a review appraiser who is licensed and certified by the Tennessee real estate appraiser commission and who is either employed by or under contract with the department of transportation. The review appraiser shall either approve the initial appraisal or reject the initial appraisal and reappraise the property to determine the fair market value of the property, subject to the approval of the director of the right-of-way division of the department of transportation or the director's designee. If approved by the director or the director's designee, the review appraiser's determination shall be presented to a prospective purchaser as the fair market value of the property;
    5. (v) If a prospective purchaser does not accept the appraised fair market value of the property as determined by the review appraiser, the prospective purchaser may request a final review and reconsideration by the commissioner of transportation or the commissioner's designee. The commissioner or the commissioner's designee shall obtain a final review of the appraisal by a review appraiser who is licensed and certified by the Tennessee real estate appraiser commission and who is either employed by or under contract with the department of transportation; provided, however, that the final review appraiser shall not be the same person who previously reviewed the initial appraisal. The prospective purchaser shall be given the opportunity to present information concerning the value of the property for the consideration of the final review appraiser. The final review appraiser shall consider all relevant information, including any appraisal previously performed by or for the department of transportation, and shall have the authority to reappraise or make adjustments in the appraised fair market value, in accordance with generally accepted professional standards and guidelines. The final review appraiser's determination of the fair market value of the property shall be subject to the approval of the commissioner or the commissioner's designee; and
    6. (vi) The department's final determination of the fair market value of the property is subject to the concurrence of the commissioner of general services;
  4. (D) Notwithstanding any law to the contrary, if the department of transportation's staff appraisal of a tract of surplus real property under subdivision (a)(8)(C)(ii) is equal to or less than ten thousand dollars ($10,000), the department may transfer its interest in the property to any legal governmental body for the appraised value of the property, subject to the former owner's right of first refusal under subdivision (a)(8)(B), without further appraisal or approval under this section, except for the appraisal review provided in subdivision (a)(8)(C)(iv);
9. (9) If property acquired by the department of transportation for a right-of-way through the exercise of eminent domain or otherwise is determined by the commissioner of transportation to be no longer needed by the department of transportation, and the excess property is not transferred to another state agency or conveyed to some other legal governmental body as provided in this section, and the excess property is not disposed of in accordance with subdivision (a)(8), the excess property shall be disposed of by the department of general services in accordance with the following procedures:
  1. (A) The excess property shall be sold to any adjoining property owner or the former owner of that property at fair market value. All funds collected from the sale of the property shall be paid into the highway fund, as provided in subdivision (a)(7);
  2. (B) The costs associated with the conveyance of the land, including, but not limited to, the cost of appraising and surveying the property, shall be reimbursed to the state by the purchaser of the property;
  3. (C) Any conveyance of the property made pursuant to this subsection (a) shall be subject to approval in advance by the state building commission;
  4. (D) If no adjoining property owner or the former owner of that property is able and willing to purchase the excess property at fair market value, then the excess property may be disposed of in accordance with existing statutes;
  5. (E) For the purposes of this subsection (a), the fair market value of the excess property shall initially be determined by the state through procedures established by the state building commission. If such initial determination of fair market value is deemed unacceptable by the intended purchaser, the fair market value of the excess property shall then be determined by averaging the state's initial determination of fair market value with two (2) additional fair market value appraisals of the excess property. The two (2) additional appraisals shall be performed by two (2) nonassociated appraisers from the locality in which the property is located. The two (2) appraisers shall be mutually agreed upon by the parties to the conveyance; none of the appraisers involved shall have any personal or financial interest in the conveyance;
  6. (F) The former property owner's right shall terminate ten (10) years after the date of acquisition by the department of transportation by conveyance or date of taking in condemnation of the subject property by the department. The former property owner's right shall not transfer to such owner's heirs. The former property owner shall have the first right of refusal to purchase the right-of-way. If the former property owner relinquishes such owner's right, the adjoining property owners interested in purchasing the right-of-way shall submit sealed bids with the minimum bid price being the fair market value determined by appraisal;
  7. (G) If approved by the department of transportation, and the federal highway administration where required by federal law, the department of general services may accept real property in exchange for the excess real property conveyed if the replacement property is at least equal in fair market value to the excess property being replaced. The fair market value of the replacement property shall be determined in accordance with the procedures for determining the fair market value of the excess property established in this subdivision (a)(9);
10. (10) Notwithstanding any provision to the contrary, any funds collected from the lease of surplus state real property for communications relay apparatus or antennae sites that would otherwise be paid into the general fund of the state pursuant to subdivision (a)(7) shall be specifically earmarked for maintenance of state park facilities, including furniture, fixtures and equipment. Any such funds that are unencumbered or unexpended at the end of any fiscal year shall not revert to the state general fund, but shall be carried forward until expended for the purposes stated in this section;
11. (11)
  1. (A) Notwithstanding subdivision (a)(9) or any other law to the contrary, when and if the state transfers to the local government in which any tract or combination of tracts of property which are contiguous to one another and exceed twenty (20) acres in size and which were acquired by the department of transportation as part of an uncompleted and cancelled interstate and defense highway right-of-way in a county with a population in excess of eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census, is located, the transfer shall be subject to final approval by the state building commission and shall only be used for redevelopment pursuant to subdivision (a)(11)(B);
  2. (B) Any property transferred pursuant to subdivision (a)(11)(A) shall be subject to the following restrictions:
    1. (i) Development by the local government of a flowering-tree landscaped parkway-type roadway in accordance with title 54, chapter 17, part 1;
    2. (ii) Development of the remaining property, with priority given to subdivision (a)(11)(B)(ii)(a), for:
      1. (a) Housing; provided, that some of the land is used for development of affordable housing with the needs of the community for affordable housing properly addressed in that use;
      2. (b) School land;
      3. (c) Park land;
      4. (d) Public spaces; and
      5. (e) Associated mixed-use neighborhood uses; and
    3. (iii) The roadway involved herein from the end of Sam Cooper Boulevard to East Parkway and all the land involved herein shall conform to the limitations regulating scenic highways as in § 54-17-109, except for § 54-17-109(11); and
12. (12) Notwithstanding any provisions of this section to the contrary, if property acquired by or for the use of the department of transportation for right-of-way has not been disposed of in accordance with subdivision (a)(8) or (a)(9) and no person or entity, including the former owner of that property, has been able and willing to purchase the property within five (5) years after the date the property has been offered for sale by the department of transportation, then the property may be sold at public auction pursuant to rules promulgated by the commissioner of transportation.
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(b) The commissioner of general services shall notify the house of representatives and senate member or members from the district in which the property to be sold or conveyed is located, and the notification shall be at least twenty (20) days prior to the agreement of sale or conveyance.
(c) This section and § 4-15-102 do not apply to timber which is harvested and sold pursuant to bona fide timber management practices. For the purpose of harvesting and selling of timber pursuant to bona fide timber management practices, the timber shall be treated as personal property and sold pursuant to rules and regulations of the procurement commission as provided in part 4 of this chapter.
(d) This section and § 4-15-102 do not apply to leasing surplus state real property under crop lease arrangements by the Tennessee wildlife resources agency which shall be responsible for the leasing of such surplus state real property for crop leases, as well as being responsible for the administration of all crop leases; such leasing and administration shall be through procedures reviewed and approved by the state building commission.

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

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

§ 12-2-114. State leases — Procedure.

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

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49-9-1408

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

(a) Notwithstanding any other law to the contrary, no lease of property to the state government or any agency, department, institution or office thereof shall be entered into unless the instrument of lease is first approved as to form and legality by the attorney general and reporter. This provision shall only apply to leases which are longer than five (5) years or if the consideration for any such lease amounts to more than two hundred fifty thousand dollars ($250,000) per year.
(b)
1. (1) If any proposed lease of property by or to the state government or any agency, department, institution or office thereof is longer than five (5) years or if the consideration for any such lease amounts to more than two hundred fifty thousand dollars ($250,000) per year or such other amount as determined by the state building commission, it shall first be submitted to and approved by the state building commission.
2. (2)
  1. (A) With respect to any lease of property that is not submitted to and approved by the state building commission, the office of the state architect shall, subject to such exceptions as the commission may by its policies direct, post on its website at a minimum the following information, as applicable, regarding each such lease:
    1. (i) Name or names of lessor or lessors and lessee or lessees;
    2. (ii) Lease description and purpose;
    3. (iii) Lease term;
    4. (iv) Rental rate, stated as total rent for the lease term, annual rent, and as a rent per square foot;
    5. (v) Source or sources of funding;
    6. (vi) Procurement method used to obtain the lease; and
    7. (vii) Any other information as directed by the commission.
  2. (B) In addition to the above, the state architect shall post on the office's website any changes to information posted in accordance with this subdivision (b)(2) as soon as practicable after the change is authorized.
  3. (C) The state architect shall ensure that all information posted on the office's website pursuant to this subsection (b) is set forth in a manner and format consistent with the policies and procedures of the commission.
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(c) No lease of property to the state government or any agency, department, institution or office thereof shall be valid unless the requirements of this section are met.
(d) Notwithstanding the language in § 9-4-5113 to the contrary, leases of property to the state government or any agency, department, institution or office thereof, the total cost of which is less than an amount determined pursuant to policy established by the commissioner of finance and administration and approved by the state building commission, need not be certified, as indicated in § 9-4-5113, by the commissioner.

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49-9-1408

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

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

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

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

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

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

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

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

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

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

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

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

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

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

§ 12-2-123. Dynamic accessibility symbol.

(a) The commissioner of general services shall promulgate rules for the purpose of designating the symbol of access to be used for buildings owned or operated by this state on signage indicating access for persons with disabilities. The commissioner, in promulgating rules, may collaborate and seek input from state agencies for the purpose of carrying out this section.
(b) The symbol must depict a logo with a dynamic character leaning forward with a sense of movement, be readily identifiable, and be simply designed with no secondary meaning. The symbol must signify equivalent facilitation and accessibility as the previously used international symbol of access. The symbol must be depicted in substantially the following form:
(c) The symbol must be accompanied by the adjective “Accessible,” when appropriate for the signage, and must be used to designate every point of access for persons with disabilities for all state buildings, structures, or real property constructed or purchased on or after July 1, 2020. For existing state buildings, structures, and real property, signage indicating access for persons with disabilities must conform to the requirements of this section as the signage is replaced or repaired, or when the area of an existing state building, structure, or real property containing signage is renovated. A state department or agency may conform to the requirements of this section prior to the need to replace or repair existing signage, or renovate any area of real property of this state with respect to such signage, if the state department or agency has the existing resources to make the replacements, repairs, or renovations.

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55-21-104(a)(1)

Part 2 Sale of Confiscated Motor Vehicles and Intoxicating Liquors

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

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

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57-9-201(a)

§ 12-2-202. Public sale and advertisement.

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

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

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

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

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

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57-9-201(a)

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

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

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12-2-201(b)(1)(B)

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

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

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

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

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

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

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12-2-201(b)(2)

§ 12-2-209. Application of law.

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

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

§ 12-2-301. Part definitions.

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

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

In order to provide projects for a municipality and to enable the construction and financing thereof on lands owned by the municipality or by a not-for-profit corporation, but for no other purpose unless authorized by law, a municipality has the following powers and duties:
1. (1) Without limitation by reason of any other provisions of law, the power to sell and convey title to a not-for-profit corporation any land and any existing building thereon owned by the municipality for such consideration and upon such terms and conditions as in the judgment of the governing body are in the interests of the municipality;
2. (2) Without limitation by reason of any other provisions of law, the power to lease to a not-for-profit corporation for a term or terms, not exceeding fifty (50) years each, any land and existing buildings thereon owned by the municipality upon such terms and conditions as in the judgment of the governing body are in the interests of the municipality;
3. (3) The power to lease or sublease from a not-for-profit corporation and to make available for public use any project erected upon land conveyed or leased to a not-for-profit corporation or upon any of the land owned by a not-for-profit corporation upon such terms, conditions and rentals as in the judgment of the governing body are in the interests of the municipality;
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4. (4) The power to pledge and assign all or any part of the revenues derived from the operation of a project as security for the payment of rentals due and to become due under any lease or sublease under subdivision (3);
5. (5) The power to covenant and agree in any lease or sublease made under subdivision (3) to impose fees, rentals or other charges for the use and occupancy or other operation of such project in an amount calculated to produce net revenues sufficient to pay the rentals due and to become due under such lease or sublease; and
6. (6) The power and duty, upon receipt of notice of any assignment by any such not-for-profit corporation of any lease or sublease made under subdivision (3), or of any of its rights under any such lease or sublease, to recognize and give effect to such assignment, and to pay to the assignee thereof rentals and other payments then due or which may become due under any such lease or sublease which has been so assigned by such not-for-profit corporation.

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

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

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

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

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

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

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

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

Part 4 State Surplus Personal Property Act of 1976

§ 12-2-401. Short title.

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

§ 12-2-402. Part definitions.

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

§ 12-2-403. Methods of disposal.

(a) No article or personal property may be disposed of as surplus except by one (1) of the following methods:
1. (1) Public auction, publicly advertised and held;
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  - 49-6-2208(a)
2. (2) Sale under sealed bids, publicly advertised, opened and recorded;
3. (3) Sale by internet auction;
4. (4) Negotiated contract for sale, at arms length; but only in those instances in which the availability of the property is recurring or repetitive in character, such as marketable waste products, for disposal of the property as it is generated in the most economically feasible, fiscally sound, and administratively practicable method for the state to utilize;
5. (5) Trade-in, where such is permitted due to the nature of the property or equipment and under the terms and conditions of the contract by which the state replaces the property, and subject, further, to this part and the regulations of the procurement commission promulgated to govern the disposal of property by trade-in; and
6. (6) Sale under rules and regulations as provided in subsection (d).
(b) The procurement commission may promulgate special regulations for the disposal of surplus personal property, such as firearms, ammunition, and other explosives, which, by their character and utility, must be disposed of in a method consistent with prevailing federal law.
(c)
1. (1) Political subdivisions of the state, governmental entities and corporations organized and conducted not-for-profit which have been approved as authorized donees under the federal surplus property program and not-for-profit federally financed rural electric cooperatives, as defined in title 65, chapter 25, may purchase personal property declared surplus and classified by the commissioner for disposal pursuant to § 12-2-407.
2. (2) A member of the general public may purchase a bloodhound declared surplus and classified by the commissioner for disposal pursuant to the procedures established in § 12-2-407 for sales to governmental entities.
3. (3) A member of the general assembly may purchase office furniture, equipment, or other personal property for use in the home district legislative office of such member if such furniture, equipment or property has been declared surplus and classified by the commissioner for disposal pursuant to procedures established in § 12-2-407 for sales to governmental entities.
(d) The commissioner, with the approval of the procurement commission, may promulgate special rules and regulations in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, to permit sales to nonprofit volunteer fire, police, and rescue organizations operated for a public purpose. Such regulations shall provide for sale of surplus property to such organizations on the basis of fair market value of such property as determined by the commissioner. Such regulations shall establish eligibility requirements for organizations to purchase surplus property under this subsection (d). Determinations of eligibility shall be made in accordance with rules and regulations promulgated under this section by the commissioner and all decisions of the commissioner shall be final. Such sales shall be subject to the restrictions contained in § 12-2-407.
(e) The commissioner of finance and administration, with the approval of the governor and the attorney general and reporter, may approve the transfer of surplus personal property to a selected local government, with or without financial consideration, when associated real property is being transferred to that local government under provisions of this chapter; provided, that the authorizing officials named in this subsection (e) first must determine that such transfer of personal property ownership is in the interest of the state.
(f) The commissioner of general services, with the approval of the governor and the procurement commission, may approve the transfer of surplus personal property to local government, with or without financial consideration; provided, that such property was initially acquired from the federal government for civil defense purposes; provided further, that the authorizing officials named in this subsection (f) first determine that such transfer of personal property ownership is in the interest of the state.
(g)
1. (1) For purposes of this subsection (g), “computer equipment” includes personal computers, printers, CD-ROM readers, monitors, keyboards, CPU's, scanners, and all accessories and other peripheral equipment used in a data processing operation.
2. (2) The commissioner of general services, in consultation with the information systems council, with the approval of the governor and the commissioner of education, is authorized to transfer surplus computer equipment to local education agencies, without financial consideration; provided, that such property is suitable for educational purposes for the public schools as determined by the commissioner of education; and provided further, that the authorizing officials named in this subsection (g) first determine that the transfer of such personal property ownership is in the best interest of the state.
3. (3) Prior to the disposition of surplus computer equipment, a determination shall be made as to whether requests have been made by a local education agency for computer equipment. If suitable computer equipment is available which meets the needs of requests on file by local education agencies, such property shall be transferred, without financial consideration, to such local education agencies. If, however, available surplus computer equipment is not suitable for educational purposes or if no requests are on file by local education agencies for equipment which meets the needs of such requests, then the surplus computer equipment shall be disposed of as otherwise provided in this section.
4. (4) The procurement commission shall adopt rules and regulations on the procedure for the disposal of such computer equipment as provided in this subsection (g) and, in consultation with the commissioner of education, on the procedures for a local education agency to apply for and be considered for receiving such property.
5. (5) The department or agency which declares the computer equipment surplus may be charged a fee to cover the cost of disposing of such equipment. The amount of the fee shall be determined by the procurement commission.
6. (6) Notwithstanding any other law to the contrary, any surplus computer equipment held by the department of human services and not deemed to meet the needs of requests on file by local education agencies shall be transferred by the department of human services without financial consideration to community agencies that serve low income individuals.
(h)
1. (1) Notwithstanding any other law to the contrary, the department of safety may, without payment of financial consideration and following notice to the commissioner of general services, transfer a surplus first responder two-way radio held by the department to the county government of a county that is designated as a distressed county in the most recently published edition of the Appalachian Regional Commission economic classification system index.
2. (2) After the transfer of a surplus two-way radio to a distressed county under subdivision (h)(1), other surplus two-way radios may then be transferred to other county governments in need of such equipment that submit proof to the department's satisfaction that such counties cannot purchase the radios within the budget for that fiscal year.
3. (3) Surplus first responder two-way radios held by the department that were obtained from the federal government or purchased with federal grant funds must be transferred in accordance with federal law or regulation regarding such property.
(i) Notwithstanding any law to the contrary, a surplus commercial motor vehicle in possession of a state agency may, with payment of reasonable financial consideration and following notice to the commissioner of general services, be transferred to the department of safety for use in the department's commercial driver license testing program. A surplus vehicle transferred under this section must be sold as provided in this section when the vehicle is no longer in use by the department of safety.

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71-1-104(b)

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

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

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68-211-865(a)(1)

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

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

§ 12-2-406. Advertisement and notice.

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

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

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

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

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

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

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

§ 12-2-410. Disposals — Procedures.

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

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12-2-411

§ 12-2-411. Disposition of proceeds.

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

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§ 12-2-412. Violations — Penalties.

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

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

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

§ 12-2-414. Rules and regulations.

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

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

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

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§ 12-2-416. Violation of § 12-2-415.

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

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12-2-417

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

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

§ 12-2-418. [Repealed]

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

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

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

(a) Notwithstanding any other provisions of law, counties, municipalities and metropolitan governments may purchase, trade or receive as a gift, upon approval of the governing bodies involved in the transaction, any used or surplus personal property from another county, municipality, metropolitan government, state government, federal government or any instrumentality of the foregoing, without regard to any laws regarding public advertisement and competitive bidding. A transfer of surplus personal property from the state of Tennessee must satisfy the requirements of § 12-2-407. Also notwithstanding any other provision of law, any county, municipality, or metropolitan government may by resolution or ordinance of its governing body establish a procedure for the disposition of its surplus personal property to other governmental entities, including, but not limited to, counties, municipalities, metropolitan governments, the state of Tennessee, the federal government, other states or their political subdivisions and the instrumentalities of any of the foregoing, by sale, gift, trade, or barter upon such terms as the governing body may authorize, without regard to any other provisions of law regarding the sale or disposition of used or surplus personal property.
(b) This section shall be construed as supplemental authority for counties, municipalities and metropolitan governments.

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

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

Part 5 Sale of Surplus Public Property

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

Notwithstanding any rule, regulation or other law to the contrary, any county, metropolitan government, municipality or other political subdivision of this state, upon majority vote of the local legislative body, may dispose of real property or personal property by private negotiation and sale where:
1. (1) The real or personal property is significant for its architectural, archaeological, artistic, cultural or historical associations, or significant for its relationship to other property significant for architectural, archaeological, artistic, cultural or historical associations, or significant for its natural, scenic or open condition;
2. (2) The real or personal property is to be sold to a nonprofit corporation or trust whose purposes include the preservation or conservation of real or personal properties of architectural, archaeological, artistic, cultural, historical, natural or scenic significance; and
3. (3) A preservation agreement or conservation agreement is placed in the deed conveying the property from the county, metropolitan government, municipality or other political subdivision of this state to the nonprofit corporation or trust. The nonprofit corporation or trust shall only dispose of or use such real or personal property subject to covenants or other legally binding restrictions that will promote the preservation or conservation of the property, and, where appropriate, secure rights of public access.

Chapter 3 Public Purchases

Part 1 Applicability of Chapter

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

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

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§ 12-3-102. Exempt agencies and purchases.

(a) Procurements and contracts by and for the following state governmental entities shall be exempt from the operation of this chapter:
1. (1) The legislative branch;
2. (2) The judicial branch;
3. (3) The board of trustees of the University of Tennessee system, the Tennessee board of regents system, the state university boards, the Tennessee higher education commission, and the Tennessee student assistance corporation;
4. (4) Contracts advertised and awarded by the state building commission pursuant to § 4-15-102. If there is a question whether a contract or procurement requires state building commission or central procurement office approval, the chief procurement officer and the state architect shall determine in writing the procurement method or the contract form that is in the best interest of the state. Any such agreement reached by the chief procurement officer and the state architect shall be subject to the approval of the comptroller of the treasury;
5. (5) Construction and engineering contracts entered into by the department of transportation pursuant to title 54, chapter 5;
6. (6) Contracts for procurement of services in connection with the issue, sale, purchase, and delivery of bonds, notes and other debt obligations or the administration, safekeeping, and payment after delivery of such debt obligations by the state or any of its agencies;
7. (7) Contracts for appraisal, relocation or acquisition services related to the acquisition of land that are entered into by the department of transportation pursuant to title 54, chapter 5; and
8. (8) Administrative contracts for specific service signs pursuant to title 54, chapter 5, part 11, shall be awarded to the vendor who offers the lowest responsible response. The basis of all responses shall be the least cost to the retail user of the signs. All administrative contracts shall be awarded on an objective, competitive basis pursuant to rules and regulations promulgated by the department of transportation.
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  - 54-5-1103(c)
  - 54-5-1304
(b) Notwithstanding subsection (a), any or all state entities exempt from the requirements of this part, as well as any private nonprofit institution of higher education chartered in this state, are authorized to procure goods or services under this chapter through the central procurement office.

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

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

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

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

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Part 2 General Provisions

§ 12-3-201. Chapter definitions.

As used in this chapter, unless the context otherwise requires:
1. (1) “Central procurement office” means the government agency established in § 4-56-104;
2. (2) “Chief procurement officer” means the person holding the position established in § 4-56-104, as the head of the central procurement office and with the powers and duties set forth in § 4-56-105;
3. (3) “Committee” means the state protest committee as established in § 4-56-103;
4. (4) “Contract” means any duly authorized and legally binding written agreement for the procurement of goods and services;
5. (5) “Council” means the advisory council on state procurement established in § 4-56-106;
6. (6) “Data” means any recorded information, regardless of its form or characteristic;
7. (7) “Energy efficiency standard” means a performance standard that prescribes the relationship of the energy use of a product to its useful output of services;
8. (8)
  1. (A) “Goods” means all personal property, including, but not limited to, supplies, equipment, materials, printing, and insurance;
  2. (B) “Goods” does not include real property;
9. (9)
  1. (A) “Grant” means any grant awarded to the state or awarded by the state to any person to support a program authorized by law;
  2. (B) “Grant” does not include an award whose primary purpose is to procure an end product, whether in the form of supplies, services, or construction, or any contract resulting from such an award;
10. (10) “Invitation to bid” means all documents, whether attached or incorporated by reference, utilized for soliciting bids for the lowest cost, responsive and responsible bidder;
11. (11) “Major energy-consuming product” means any article so designated by the chief procurement officer in consultation with the central procurement office staff;
12. (12) “Political subdivision” means any authority, city, town, municipality, county or instrumentality of any authority, city, town, municipality or county within the state;
13. (13)
  1. (A) “Procurement” means buying, purchasing, renting, leasing, or otherwise acquiring of any goods or services;
  2. (B) “Procurement” also includes all functions that pertain to the obtaining of goods or services, including the description of requirements, selection and solicitation of sources, preparation and award of a contract, and all phases of contract administration;
14. (14) “Procurement commission” means the state procurement commission, as established in § 4-56-102;
15. (15) “Proprietary” means a good or service that is used, produced, or marketed under exclusive legal right of the inventor, maker or service provider that is protected under trade secret, patent, trademark, or copyright law;
16. (16) “Request for proposal” means a written solicitation for written proposals to provide goods or services to the state or a state governmental entity based upon specified evaluation criteria;
17. (17) “Respondent” includes a “bidder” or “proposer” that is a natural person or legal entity that has properly registered as required by the state. The terms “bidder” and “proposer” may be used interchangeably as the context requires;
18. (18) “Response” means a written response to a solicitation for goods and services;
19. (19) “Responsible” means a person who has the capacity in all respects to perform fully the contract requirements, as well as the integrity and reliability, which will assure good faith performance;
20. (20) “Responsive” means a person who has submitted a response that conforms in all material respects to the competitive procurement;
21. (21) “Services” means all services and agreements obligating the state, except services for highway and road improvements governed by title 54 and design and construction services governed by title 4, chapter 15;
22. (22) “Solicitation” means any type of document that invites responses and may include, by way of example, an “invitation to bid”, a “request for proposal” or a “competitive negotiation”;
23. (23)
  1. (A) “Specification” means any description of the physical, functional, performance characteristics, or nature of a supply, service, or construction item;
  2. (B) “Specification” includes, as appropriate, requirements for inspecting, testing, or preparing a supply, service, or construction item for delivery;
24. (24) “State agency” means any state governmental entity, other than the central procurement office and those state entities exempted by § 12-3-102, that is authorized to enter into contracts by this title or its implementing regulations, or by way of delegation from the chief procurement officer, or that utilizes any goods or services procured under this title;
25. (25) “State governmental entity” means any agency, authority, board, commission, department, or office within the executive, legislative or judicial branches of state government or any autonomous state agency, authority, board, commission, council, department, office, or institution of higher education; and
26. (26) “Vendor” means a natural person or legal entity that has been established by the department of finance and administration's division of accounts as a vendor through proper authority for which payment may be made by the state.

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

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

Part 3 Purchases and Contracts for Goods and Services

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

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

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

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

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

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

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

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

§ 12-3-305. Responsibility for effective management of contracts — Guidelines — Inclusion of total estimated scope or volume in solicitations — Certification to state agencies the sources of services and supply and the contract price of the various goods and services covered by contracts.

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

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

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

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

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

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

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

§ 12-3-309. Prohibited contracts.

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

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

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

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

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

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

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

Part 4 Delegation of Purchasing Authority

§ 12-3-401. Procedure for delegated authority.

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

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Part 5 Competitive Solicitations

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

Unless otherwise authorized by law, state contracts shall be awarded by competitive sealed solicitations by the central procurement office in the manner set forth in § 12-3-502, except as provided in § 12-3-401 and §§ 12-3-503 — 12-3-508.

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

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

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

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

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

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

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12-3-601(a)(1)

§ 12-3-505. Emergency purchases.

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

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49-6-3115(f)(2)

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

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

§ 12-3-507. Competitive negotiation.

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

§ 12-3-508. Utilities — Service contracts.

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

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12-3-501

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

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

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

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

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

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

§ 12-3-512. Cooperative purchasing agreements.

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

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4-56-108(a)(4)

§ 12-3-513. Competitive reverse auction process.

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

§ 12-3-514. Protests by aggrieved respondents.

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

§ 12-3-515. Contract limitations — When voidable — Authority.

(a) A state governmental entity shall not enter into a contract subject to the operation of this chapter that contains a term or condition that:
1. (1) Requires this state or a state governmental entity to:
  1. (A) Defend, indemnify, or hold harmless another person;
  2. (B) Assume liability for an act or omission against a person, except as specifically provided in the contract or as otherwise provided by law;
  3. (C) Be bound by terms and conditions that are unknown to this state at the time of signing such contract or that may be unilaterally changed by another party;
  4. (D) Pay liquidated damages; or
  5. (E) Pay taxes, except as may be required by law;
2. (2) In litigation about a term of the contract, permits a person, other than the attorney general and reporter, to serve as legal counsel for this state or a state governmental entity, except as provided in § 8-6-106;
3. (3) Establishes the venue for an action or dispute with this state or a state governmental entity in a jurisdiction other than the Tennessee claims commission, the chancery courts of Williamson County, and federal courts in this state;
4. (4) Provides that the contract must be construed in accordance with the laws of a state other than this state;
5. (5) Requires binding arbitration; or
6. (6) Contains an automatic renewal obligating state funds subsequent to the initial term of the contract.
(b) If a contract entered into by a state governmental entity that is subject to the authority of the chief procurement officer under this chapter or title 4, chapter 56, contains a term or condition prohibited under this section, then such term or condition is void, and the contract is enforceable as if the contract did not contain such term or condition.
(c) The chief procurement officer may promulgate rules to effectuate the purposes of this section.

Part 6 Cost Principles and Audits

§ 12-3-601. Cost or pricing data.

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

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

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

§ 12-3-603. Regulations regarding cost principles.

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

Part 7 Procurement with Limitation of Liability

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

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

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12-3-1210(1)

Part 8 Procurement Specifications and Scopes of Work

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Part 9 Life Cycle Cost and Procurement Act of 1978

§ 12-3-901. Short title.

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

§ 12-3-902. Part definitions.

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

§ 12-3-903. Policy of state.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

§ 12-3-912. Administrative procedures.

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

Part 10 Permanent Register of Respondents

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

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

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

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

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

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

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

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

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

§ 12-3-1101. Short title.

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

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12-3-1101

§ 12-3-1102. Part definitions.

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

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

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

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12-3-1104(b)

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

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

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

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

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

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

§ 12-3-1107. Annual report.

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

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

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

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12-3-1101

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

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

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

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

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

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

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

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

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

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

Part 12 Local Governments

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

(a) The central procurement office may, upon request, purchase goods and services for any county, city, municipality, special district, school district, other local governmental unit of the state, or quasi-governmental entity organized under a city, municipality, or county. The purchases shall be made on the same terms and under the same rules and regulations as now provided for the purchase of goods and services by the central procurement office. The cost of any purchase made pursuant to this section shall be borne by the local governmental unit concerned. The central procurement office has the power to promulgate all rules and regulations necessary for the operation of this section, subject to the approval of the procurement commission.
(b) It is the intent of this section that the central procurement office advise local governments of the benefits to be derived from the use of the purchasing procedures authorized herein. Where any local or private act, charter, or general law requires that a local governmental unit purchase by competitive procurement method, the local unit of government may, notwithstanding the local or private act, charter, or general law, purchase, without public advertisement or competitive soliciting, under contracts or price agreements entered into by the central procurement office.
(c) To the extent permitted by federal law or regulations, local governments may make purchases of goods, except motor vehicles other than those manufactured for a special purpose as defined in § 12-3-1208, or services included in federal general service administration contracts or other applicable federal open purchase contracts either directly or through the appropriate state agency; provided, that no purchase under this section shall be made at a price higher than that which is contained in the contract between the general services administration and the vendor affected.
(d)
1. (1) Except as provided in subdivision (d)(5), when any local or private act, charter, or general law requires that a local governmental unit purchase by competitive soliciting, the local unit of government may, notwithstanding the local or private act, charter, or general law, purchase, without public advertisement or competitive soliciting, any item from local sources if such item is available for purchase under contracts or price agreements entered into by the central procurement office, and such item is available at the same or lower cost from such local sources. This subsection (d) shall apply only in cases where the local governmental entity is not permitted to purchase from an existing contract established by the central procurement office. Any item purchased locally must be of equal or better specifications than the item under the competitive contract.
2. (2) The legislative body of a county by resolution or a municipality by ordinance may establish and adopt a program to encourage participation in government purchasing programs by minority-owned businesses. Such programs may include set-aside provisions which conform to federal law.
3. (3) This subsection (d) shall be permissive relative to sellers of motor vehicles.
4. (4) This subsection (d) shall have no effect unless it is approved by a two-thirds (⅔) vote of the local legislative body and such approval is filed with the comptroller of the treasury.
5. (5) This subsection (d) does not apply in a county having a metropolitan form of government and a population in excess of five hundred thousand (500,000), or in a county having a population in excess of eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census.

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

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

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

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

§ 12-3-1204. Competitive solicitation.

(a) As used in this section, “municipality,” “county,” and “metropolitan government” apply only to municipalities, counties, and metropolitan governments with a population greater than one hundred fifty thousand (150,000), according to the 1990 federal census or any subsequent federal census.
(b) In any municipality, county, or metropolitan government, notwithstanding any charter provision, private act, or other provision of law, a purchase, lease, or lease-purchase must be preceded by competitive solicitation only if the purchase, lease, or lease-purchase exceeds ten thousand dollars ($10,000).
(c) When the charter of a metropolitan government requires that purchases be made on the basis of competitive bidding, notwithstanding subsection (b), “competitive soliciting” for the metropolitan government means:
2. Dollar Amount of Purchase Requirement
3. $1,000 to $3,999.99Three (3) verbal (including telephone) quotations when possible.
4. $4,000 to $9,999.99Three (3) written (including fax) quotations when possible.
5. $10,000 and aboveCompetitive sealed bids or proposals for nonemergency and nonproprietary product purchases.
(d) Any municipality, county, or metropolitan government may retain present competitive soliciting requirements and may retain the right to establish, in accordance with charter amendment or private act, whichever is applicable, different dollar amount thresholds and different requirements for competitive bids and competitive proposals from those established in this section.
(e) Nothing in this section shall be deemed to expressly or impliedly repeal § 7-52-117, or any part of that section.
(f) This section shall not supersede or be construed to supersede § 12-3-1201.

§ 12-3-1205. Cooperative purchasing agreements.

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

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

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

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

(a) Any municipality may use competitive sealed proposals to purchase goods and services rather than competitive sealed bids when the municipal governing body, acting under the restrictions and requirements of this section and a procurement code adopted by the governing body, determines that the use of competitive sealed bidding is either not practicable or not advantageous to the municipality. In actual emergencies caused by unforeseen circumstances, such as natural or human-made disasters, delays by contractors, delays in transportation, or unanticipated volume of work, purchases through competitive sealed proposals may be made without specific authorizing action of the municipal governing body. A record of any emergency purchase shall be made by the person or body authorizing the emergency purchase, specifying the amount paid, the items and services purchased, from whom the purchase was made, and the nature of the emergency. A report of the emergency purchase through competitive sealed proposals containing all relevant information shall be made as soon as possible by the person or body authorizing the purchase to the municipal governing body.
(b) In the decision to use competitive sealed proposals, the governing body shall follow a procurement code, which shall be adopted by the municipality by ordinance before purchases may be made under this section. The code shall contain criteria for purchasing through competitive sealed proposals and procedures consistent with this section.
(c) The procurement code shall provide that competitive sealed proposals may be used only when qualifications, experience, or competence are more important than price in making the purchase and:
1. (1) When there is more than one (1) solution to a purchasing issue and the competitive sealed proposals will assist in choosing the best solution; or
2. (2) When there is no readily identifiable solution to a purchasing issue and the competitive sealed proposals will assist in identifying one (1) or more solutions.
(d) The municipal technical advisory service of the University of Tennessee's institute for public service, in conjunction with the comptroller of the treasury's office, shall develop a model procurement code that may be adopted by any municipality to guide the governing body and purchasing agent in making purchases through requests for competitive sealed proposals. The model procurement code shall contain provisions allowing an aggrieved respondent to protest the intended award to another respondent if the protest is filed within seven (7) calendar days after the intended award is announced. The protest shall be filed with and decided by the municipal governing body.
(e) Adequate public notice of the request for competitive sealed proposals shall be given in the same manner provided for competitive sealed bids.
(f) Competitive sealed proposals must be opened in a manner that avoids disclosure of the contents to competing respondents during the negotiation. The proposals and all related materials must be open for public inspection after the intent to award the contract to a particular respondent is announced.
(g) The request for competitive sealed proposals must state the relative importance of price and other evaluation factors.
(h) As provided in the request for competitive sealed proposals and in the procurement code, interviews, presentations, demonstrations and discussions, either oral or in writing, or both, may be conducted for clarification to assure full understanding of, and responsiveness to, the solicitation requirements with the one (1) or more responsible respondents who submit proposals determined by the purchasing agent to be reasonably susceptible of being selected. The respondents must be accorded fair and equal treatment with respect to an opportunity for an interview, presentation, demonstration, discussion, or revision of proposals, and revisions may be permitted after submission and before the intent to award to a particular respondent is announced to obtain the best and final offers. In conducting interviews, presentations, demonstrations, or discussions, the purchasing agent and other municipal personnel shall not disclose to a respondent during the negotiations information derived from proposals submitted by competing respondents.
(i) The award shall be made to the responsible respondent whose proposal the governing body determines is the most advantageous to the municipality, taking into consideration price and the evaluation factors set out in the request for competitive sealed proposals. No other factor may be used in the evaluation. The purchasing agent shall place in the contract file a statement containing the basis on which the award was made.
(j)
1. (1) A governmental utility board shall have the same rights and be subject to the same restrictions and requirements as apply to a municipal governing body under this section. The governmental utility board shall adopt a procurement code by resolution before purchases may be made under this section.
2. (2) For purposes of subdivision (j)(1), a “governmental utility board” includes a board of public utilities created under title 7, chapter 52, and shall also include any other county, metropolitan government or municipal utility board or supervisory body created by private act, home rule charter or local ordinance or resolution.
3. (3) Nothing in this subsection (j) shall otherwise modify or impair any limitations on the contracting power of the governmental utility boards as the powers may exist under applicable law.
(k) The board of commissioners of a utility district created pursuant to title 7, chapter 82, or any public or private act by the general assembly, has the same rights and is subject to the same restrictions and requirements as apply to a municipal governing body under this section. The board of commissioners of a utility district shall adopt a purchasing policy pursuant to title 7, chapter 82, part 8, that contains criteria for purchasing through competitive sealed proposals and procedures consistent with this section before purchases may be made under this section.
(l) For the purposes of this section, “procurement code” has the same meaning as “purchasing policy” as described in § 7-82-801, for utility districts.

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

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

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

(a) Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of this state for legal services, fiscal agent, financial advisor or advisory services, services from an insurance producer, as that term is defined in § 56-6-102, educational consultant services, and similar services by professional persons or groups of high ethical standards, must not be based upon competitive solicitations, but must be awarded on the basis of recognized competence and integrity. The prohibition against competitive soliciting in this subsection (a) does not prohibit an entity enumerated from interviewing eligible persons or entities to determine the capabilities of such persons or entities.
(b) Any person providing fiscal agent, financial advisor or advisory services to any county, city, metropolitan government, town, utility district or other municipal or public corporation shall perform such services only pursuant to a written contract, specifying the services to be rendered, the costs therefore, and the expenses to be covered under such contract.
(c) Any person providing fiscal agent, financial advisor or advisory services to any county, city, metropolitan government, town, utility district or other municipal or public corporation of this state who desires to bid, directly or indirectly, on any bonds, notes or other obligations of such entity sold pursuant to public, competitive sale shall receive in writing prior to the sale the permission of such entity to respond either directly or indirectly on the obligations.
(d) For the purposes of this section, “providing fiscal agent, financial advisor or advisory services” means a relationship that exists when a person renders or enters into an agreement to render financial advisory or consultant services to or on behalf of an issuer with respect to a new issue or issues of municipal securities, including advice with respect to the structure, timing, terms and other similar matters concerning such issue or issues, for a fee or other compensation or in expectation of such compensation for the rendering of such services. Notwithstanding the foregoing provisions of this subsection (d), a financial advisory relationship shall not be deemed to exist when, in the course of acting as an underwriter, a municipal securities dealer renders advice to an issuer, including advice with respect to the structure, timing, terms and other similar matters concerning a new issue of municipal securities.
(e)
1. (1) Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of the state for information management services, including, but not limited to, computer program analyst services shall, upon approval by a two-thirds (⅔) vote of the governing body, be procured through a request for proposals process. The request for proposals process will invite prospective respondents to participate and will indicate the service requirements and the factors used for evaluating the proposals. Such factors shall include cost, the vendor's qualifications and any additional factor or factors deemed relevant by the procuring entity for the procurement of the service. Cost shall not be the sole criterion for evaluation. The contract for such services will be awarded to the best evaluated, responsive respondent.
2. (2) This subsection (e) shall only apply in counties having a population of not less than four hundred seventy thousand (470,000) nor more than four hundred eighty thousand (480,000), according to the 1980 federal census or any subsequent federal census.

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

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

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

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

§ 12-3-1212. Resolution or ordinance to increase threshold amount for requiring public advertisement and competitive bidding.

(a) Notwithstanding another law to the contrary, a county, municipality, utility district, or other local governmental entity having centralized purchasing authority with a full-time purchasing agent may, by resolution or ordinance of its governing body, increase the threshold over which public advertisement and sealed competitive bids or proposals are required to an amount not to exceed fifty thousand dollars ($50,000) for nonemergency, nonproprietary purchases.
(b) Notwithstanding another law to the contrary, a county, municipality, utility district, or other local governmental entity having non-centralized purchasing authority may, by resolution or ordinance of its governing body, increase the threshold over which public advertisement and sealed competitive bids or proposals are required to an amount not to exceed twenty-five thousand dollars ($25,000) for nonemergency, nonproprietary purchases.
(c) At least three (3) written quotations are required when possible for purchases costing less than the bid threshold established under subsection (a) or (b), but more than forty percent (40%) of such bid threshold or some lower amount as may be established by the governing body in a resolution. Purchases of like items must be aggregated for purposes of the bid threshold.
(d) For purposes of this section, a “full-time purchasing agent” means a person who devotes the whole of the person's working time to the demands and duties of the office of purchasing agent.

§ 12-3-1213. Local governments authority to contract — Contract agreements entered by state building commission.

Where any local or private act, charter, or general law requires that a local governmental unit purchase by competitive procurement method, the local governmental unit may, notwithstanding the local or private act, charter, or general law, purchase, without public advertisement or competitive soliciting, under contracts or price agreements entered into by the state building commission.

Chapter 4 Public Contracts

Part 1 General Provisions

§ 12-4-101. Personal interest of officers prohibited.

(a)
1. (1) It is unlawful for any officer, committee member, director, or other person whose duty it is to vote for, let out, overlook, or in any manner to superintend any work or any contract in which any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute shall or may be interested, to be directly interested in any such contract. “Directly interested” means any contract with the official personally or with any business in which the official is the sole proprietor, a partner, or the person having the controlling interest. “Controlling interest” includes the individual with the ownership or control of the largest number of outstanding shares owned by any single individual or corporation. This subdivision (a)(1) shall not be construed to prohibit any officer, committee person, director, or any person, other than a member of a local governing body of a county or municipality, from voting on the budget, appropriation resolution, or tax rate resolution, or amendments thereto, unless the vote is on a specific amendment to the budget or a specific appropriation or resolution in which such person is directly interested.
2. (2)
  1. (A) Subdivision (a)(1) shall also apply to a member of the board of directors of any not-for-profit corporation authorized by the laws of Tennessee to act for the benefit or on behalf of any one (1) or more counties, cities, towns and local governments pursuant to title 7, chapter 54 or 58.
  2. (B) Subdivision (a)(2)(A) shall not apply to any county with a metropolitan form of government and having a population of four hundred thousand (400,000) or more, according to the 1980 federal census or any subsequent federal census.
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- 5-5-112(d)
- 6-54-107(c)(4)
(b) It is unlawful for any officer, committee member, director, or other person whose duty it is to vote for, let out, overlook, or in any manner to superintend any work or any contract in which any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute shall or may be interested, to be indirectly interested in any such contract unless the officer publicly acknowledges such officer's interest. “Indirectly interested” means any contract in which the officer is interested but not directly so, but includes contracts where the officer is directly interested but is the sole supplier of goods or services in a municipality or county.
(c) This section shall apply to a member of the board of directors or officer of any nonprofit corporation required under § 8-44-102 to conduct all meetings of its governing body as open meetings.

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§ 12-4-102. Penalty for unlawful interest.

Should any person, acting as such officer, committee member, director, or other person referred to in § 12-4-101, be or become directly or unlawfully indirectly interested in any such contract, such person shall forfeit all pay and compensation therefor. Such officer shall be dismissed from such office the officer then occupies, and be ineligible for the same or a similar position for ten (10) years.

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§ 12-4-103. Bidding, sale, or offer for sale by state employees or members of general assembly prohibited.

(a)
1. (1) It is hereby declared unlawful for any state official or employee to bid on, sell, or offer for sale, any merchandise, equipment or material, or similar commodity, to the state of Tennessee during the tenure of such official's or employee's office or employment, or for six (6) months thereafter, or to have any interest in the selling of the same to the state.
2. (2)
  1. (A) Except as otherwise provided in this subdivision (a)(2), it is an offense for any member of the general assembly to bid on, sell, or offer for sale any service to a state entity or to have a financial interest in the bidding, selling, or offering for sale of any service to a state entity. The prohibition set out in this subdivision (a)(2)(A) applies during the tenure of the member's office and for six (6) months thereafter.
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  2. (B) It is an exception to the application of subdivision (a)(2)(A) if:
    1. (i) A member of the general assembly was elected prior to July 1, 2021;
    2. (ii) The member provided or offered to provide the service to a state entity prior to July 1, 2021, and the service is being provided or offered to the same state entity;
    3. (iii) The member has held office as a member of the general assembly continuously since July 1, 2021; and
    4. (iv) The member disclosed the nature of the service and the name of the state entity to which the service is provided or offered on the member's statement of interest pursuant to § 8-50-502 no later than September 1, 2021, and annually thereafter, for all years in which the member has continuously served as a member of the general assembly.
  3. (C) It is an exception to the application of subdivision (a)(2)(A) if the service is provided through an employment contract, an indigent defense contract, or a medical services contract unless prohibited by the Constitution of Tennessee.
  4. (D) It is an exception to the application of subdivision (a)(2)(A) if the financial interest in the bidding, selling, or offering for sale of any service to a state entity is:
    1. (i) Held in a blind trust pursuant to § 35-50-120 prior to administration of the member's oath of office, during the tenure of such member's service as a member of the general assembly, and for at least six (6) months thereafter; and
    2. (ii) Disclosed in accordance with § 2-10-128(a)(3).
  5. (E) It is an exception to the application of subdivision (a)(2)(A) if the financial interest in the bidding, selling, or offering for sale of any service to a state entity is:
    1. (i)
      1. (a) Held as an investment with a federally chartered bank or state chartered bank;
      2. (b) Held as a share in a mutual fund; or
      3. (c) Held as a security in a business enterprise listed on the New York Stock Exchange, the NYSE American, or the Nasdaq and the holding represents less than five percent (5%) of the outstanding securities of the business enterprise; and
    2. (ii) Disclosed pursuant to § 2-10-128 or § 8-50-502, as applicable.
  6. (F) The exceptions provided in subdivisions (a)(2)(B)-(E) do not apply to services provided to the legislative branch of state government. This subdivision (a)(2) does not preclude either house of the general assembly from adopting a rule more restrictive than the prohibition set out in subdivision (a)(2)(A).
  7. (G) For purposes of this subdivision (a)(2):
    1. (i) “Compensation” means any salary, fee, payment, reimbursement, or other valuable consideration, or any combination thereof;
    2. (ii) “Service” means any work, labor, or assistance provided in exchange for compensation; and
    3. (iii) “State entity” means an agency, branch, bureau, commission, department, or division of this state, and does not include a local government.
(b) A person violating subsection (a) shall be liable to the state for any and all sums paid out by the state, together with interest at the rate of eight percent (8%) per annum, growing out of any such transaction.
(c) A violation of subsection (a) is a Class E felony.
(d)
1. (1) A person who is convicted under subdivision (a)(2) is forever afterwards disqualified from holding any office under the laws or constitution of this state.
2. (2) If at the time of conviction for an offense specified in subdivision (a)(2), the person still holds an office under the constitution of this state, then this subsection (d) applies to such person at the end of the person's term of office, unless otherwise expelled from office prior to that time.

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§ 12-4-104. Penalty for unlawful transactions.

(a) It is an offense for a public employee involved in negotiating a procurement agreement to accept employment with any person or entity with whom the employee dealt in an official capacity on behalf of the state concerning the procurement agreement for a period of twenty-four (24) months from the ending of the procurement agreement or one (1) year immediately following departure from employment as the public officer or employee, whichever occurs first. For purposes of this section, “procurement agreement” means any agreement to procure goods or services, including, but not limited to, a contract or grant, but does not include a contract or grant by a public institution of higher education to procure research or public service-related goods or services.
(b) It is an offense for any person who, for compensation, prepares a solicitation for or on behalf of a public body to:
1. (1) Submit a response to a solicitation for that procurement or any portion thereof; or
2. (2) Disclose to any respondent to a solicitation information concerning the procurement that is not available to the public. A public body may permit such person to submit response to a solicitation for that procurement or any portion thereof if the public body determines that the exclusion of the person would limit the number of potential qualified respondents to a solicitation in a manner contrary to the best interest of the public body.
(c)
1. (1) It is an offense for a contractor or subcontractor to demand or receive from any of the contractor's or subcontractor's suppliers or for a contractor to demand or receive from the contractor's subcontractors, as an inducement for the award of a subcontract or order, any payment, loan, subscription, advance, deposit of money, services or anything, present or promised, unless consideration of substantially equal or greater value is exchanged.
2. (2) It is an offense for a subcontractor or supplier to make or offer to make any payment, loan, subscription, advance, deposit of money, services or anything, present or promised, unless consideration of substantially equal or greater value is exchanged.
3. (3) It is an offense for any person to demand or receive any payment, loan, subscription, advance, deposit of money, services or anything of value in return for an agreement not to compete on a public contract.
4. (4) If a contractor, subcontractor, supplier or any person violates any provision of this subsection (c), the amount thereof shall be conclusively presumed to have been included in the price of the contract, subcontract or order and ultimately borne by the public body and shall be recoverable from both the maker and recipient. Recovery from one (1) offending party shall not preclude recovery from other offending parties.
(d)
1. (1) A contract entered into in violation of this section on or after October 1, 2011, is void. A contract that is otherwise void under this section may continue in effect until an alternative can be arranged when:
  1. (A) Immediate termination would result in harm to the public health or welfare; and
  2. (B) The continuation is approved by the commission.
2. (2) Approval of continuation of contracts under this subsection (d) shall be given for the minimum period necessary to protect the public health or welfare. The chief procurement officer and the comptroller of the treasury shall be notified immediately upon a determination that a contract violates this subsection (d).
(e)
1. (1) As used in this section, the term “public officer” means an individual who is elected or appointed to serve or represent a public agency, other than an employee or independent contractor of a public agency.
2. (2) A public officer or employee is involved in administering a contract if the officer or employee oversees the performance of the contract or has authority to make decisions regarding the contract or to interpret the contract.
3. (3) A public officer or employee is involved in making a contract if such officer or employee participates in the development of specifications or terms or in the preparation or award of the contract. A public officer is also involved in making a contract if the board, commission, or other body of which such officer is a member takes action on the contract, whether or not the public officer actually participates in that action, unless the contract is approved under an exception to this section under which the public officer is allowed to benefit and is prohibited from voting.
4. (4) A public officer or employee derives a direct benefit from a contract if the person or the person's spouse:
  1. (A) Has more than a ten-percent ownership or other interest in an entity that is a party to the contract;
  2. (B) Derives any income or commission directly from the contract; or
  3. (C) Acquires property under the contract.
(f) A public officer or employee is not involved in making or administering a contract solely because of the performance of ministerial duties related to the contract.
(g) A violation of this section is a Class A misdemeanor.

§ 12-4-105. Grand jury investigations.

The judges of the circuit and criminal courts of the state shall give §§ 12-4-103 — 12-4-105 in charges to their respective grand juries, and the grand juries shall have inquisitorial powers to summon witnesses and to inquire into probable violations of those sections.

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12-4-105

§ 12-4-106. Prohibition against receiving rebates, gifts, money or anything of value — Conflicts of interest.

(a) No officer or employee of the central procurement office, nor any member of the procurement commission, nor any head of any state department, institution or agency, nor any employee of any state department, institution or agency charged with the responsibility of initiating requisitions, shall accept or receive, directly or indirectly, from any person, firm or corporation to whom any contract for the purchase of goods or services for the state may be awarded, by rebate, gifts, or otherwise, any money or anything of value whatsoever, or any promise, obligation, or contract for future rewards or compensation.
(b)
1. (1) It is a conflict of interest for any person or any company with whom such person is an officer, a director, or an equity owner having an ownership interest greater than one percent (1%) to bid on any public contract for goods or services for a governmental entity if such person or the immediate family member of such person is a member of a board or commission having responsibility for letting or approving such contract.
2. (2) As used in this subsection (b):
  1. (A) “Governmental entity” means any state agency, authority, board, commission, department, or office within the executive, legislative or judicial branch of state government or any autonomous state agency, authority, board, commission, department, office, or institution of higher education; and
  2. (B) “Immediate family” means spouse, dependent children or stepchildren, or relatives related by blood or marriage.

§ 12-4-107. Contracts for professional services.

(a)
1. (1) All contracts for architectural and engineering services procured by any municipal corporation, county, state, development district, utility district, human resource agency, or other political subdivision created by statute, and all contracts for construction services procured by any county, city, metropolitan government, or town for projects described in subsection (b), shall meet the following requirements:
  1. (A) In the procurement of architectural and engineering services, the selection committee or procurement official may seek qualifications and experience data from any firm or firms licensed in this state and interview such firm or firms. The selection committee or procurement official shall evaluate statements of qualifications and experience data regarding the procurement of architectural and engineering services, and shall conduct discussions with such firm or firms regarding the furnishing of required services and then shall select the firm deemed to be qualified to provide the services required;
  2. (B) The selection committee or procurement official shall negotiate a contract with the qualified firm for architectural and engineering services at compensation which the selection committee or procurement official determines to be fair and reasonable to the government. In making such determination, the selection committee or procurement official shall take into account the estimated value of the services to be rendered, the scope of work, complexity and professional nature thereof;
  3. (C) Should the selection committee or procurement official be unable to negotiate a satisfactory contract with the firm considered to be qualified, at a price determined to be fair and reasonable, negotiations will continue with other qualified firms until an agreement is reached;
  4. (D) A city, county or utility district having a satisfactory existing working relationship for architectural or engineering services may expand the scope of the services; provided, that they are within the technical competency of the existing firm, without exercising this section.
2. (2) A city or county may procure surveying services by the means set forth under subdivision (a)(1).
(b) Construction projects of a county, city, metropolitan government, town, utility district, or utility authority shall meet the following requirements:
1. (1) For construction of local projects or additions to existing buildings, a county, city, metropolitan government, town, utility district, or utility authority may contract for construction management agent or advisor services or construction manager at-risk services. Construction management services may be performed by a qualified person licensed under the Contractors Licensing Act of 1994, compiled in title 62, chapter 6, part 1. Construction management services are to be procured for each project through a written request for proposals process through advertisement. The procurement and advertisement shall be in accordance with the laws, regulations, and ordinances of the county, city, metropolitan government, town, utility district, or utility authority. The written request for proposals process shall invite prospective proposers to participate and shall indicate the service requirements and the factors used for evaluating the proposals. These factors may include the construction manager's qualifications and experience on similar projects, qualifications of personnel to be assigned to the project, fees and costs, or any additional factors deemed relevant by the procuring entity for procurement of the service. The contract for such services shall be awarded to the best qualified and responsive responder. A construction manager agent or advisor is prohibited from undertaking actual construction work on a project over which the construction manager agent or advisor coordinates or oversees the planning, bid, or construction phases of the project, except in instances when bids have been solicited twice and no bids have been submitted. If the construction manager agent or advisor can document that a good faith effort was made in each bid solicitation to obtain bids and no bids were received, then the construction manager agent or advisor may perform the construction work at a price agreed upon by the construction manager agent or advisor, the architect, and the owner of the project. A governing body, at its own discretion, may perform work on the project with its own employees and may include the coordination and oversight of this work as part of the services of the construction manager agent or advisor. Sealed bids for actual construction work shall be opened at the bid opening and the names of the contractors and their bid amounts shall be announced;
2. (2) Construction management agent or advisor services or construction manager at-risk services for the construction of local projects or additions to existing buildings may be performed by:
  1. (A) A general contractor licensed in this state pursuant to the Contractors Licensing Act of 1994; provided, that none of such services performed by a general contractor involve any of the services exempt from the requirements of title 62, chapter 6, part 1 as “normal architectural and engineering services” under § 62-6-102(4)(B), unless, with regard to the performance of any services defined as normal architectural and engineering services, the general contractor is also licensed as an architect or engineer under title 62, chapter 2; or
  2. (B) An architect or an engineer licensed pursuant to title 62, chapter 2; provided, that none of such services performed by an architect or engineer involve any of the services required to be performed by a contractor within the definition of “contractor” under § 62-6-102, unless with regard to the performance of any services included within the definition of “contractor”, the architect or engineer is also licensed as a contractor under the Contractors Licensing Act of 1994;
3. (3) Construction work that is under the coordination and oversight of a construction manager shall be procured through competitive bids.

§ 12-4-108. Withdrawal of retained funds — Contractors.

(a) Any construction contractor may, from time to time, withdraw any part, or the whole, of the amount which has been retained from partial payments to the contractor pursuant to the terms of the contract upon the deposit of securities in the manner described in this section.
(b) This section shall require delivery of securities to or in the name of the:
1. (1) State treasurer for construction contracts entered into by the state, and any agency or department thereof, including the department of transportation, under § 54-5-113; or
2. (2) Any other appropriate public official named in the contract for construction contracts entered into by the University of Tennessee or any county, municipality, or political subdivision of the state, including, but not limited to, metropolitan government.
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(c) The following shall be considered as securities and may be substituted for retained funds:
1. (1) United States treasury bonds, United States treasury notes, United States treasury bills;
2. (2) General obligation bonds of the state of Tennessee;
3. (3) Certificates of deposit or evidence of other deposits irrevocably pledged from a state or national bank having its principal office in Tennessee or a state or federal savings and loan association having its principal office in Tennessee; or
4. (4) A letter of credit from a state or national bank having its principal office in Tennessee. The terms and conditions of any letter of credit shall be subject to the approval of the public official described in subsection (b). All letters of credit shall be accompanied by an authorization of the contractor to deliver retained funds to the bank issuing the letter.
(d) No retained amount shall be withdrawn which would represent an amount in excess of the market value of the securities at the time of deposit or of the par value of such securities, whichever is lower, or in excess of the maximum amount committed and stated in the letter of credit.
(e) At the time of deposit of the securities, they shall be accompanied by a conditional assignment to the public official described in subsection (b), which will empower the public official to take custody of the security and to negotiate it at any time to the extent necessary to cause the contract to be fulfilled.
(f) In the case of securities deposited with the state treasurer, such securities shall be negotiated by the state treasurer in the event that the state building commission or the commissioner of transportation, whichever is applicable, determines that such is desirable in order to effectuate the timely completion of the project.
(g) So long as securities remain on deposit and the contractor is not in default, all interest and income paid shall go to the contractor, less any custodial care and servicing costs.
(h) The securities which remain on deposit at the time of completion of the contract and satisfaction of any statutory obligations with respect thereto shall be returned to the contractor.
(i) The public official described in subsection (b) shall have the power to enter into a trust agreement with any state or national bank or state or federal savings and loan association or savings bank located in Tennessee for the safekeeping, custodial care and servicing of securities to the extent necessary to effectuate the purposes of this section. The financial institution serving as trustee under such trust agreement shall hold the securities in trust for the purposes of this section and for the use and benefit of the persons entitled to them under the provisions hereof; provided, that the securities held in trust will not be commingled with any securities owned by the financial institution or any third party, but will at all times remain segregated and subject to identification as the particular securities deposited and held in trust for the purposes of this section.

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9-4-107(d)

§ 12-4-109. Preplanning of capital investment projects account.

There is hereby established an account to be known as the capital preplanning account, which shall be the funding source for the preplanning of all capital projects undertaken by the departments and agencies of the state. The account shall be reimbursed for the preplanning cost of a capital investment project from the appropriations allocated to that project. Any funds remaining in the account at the end of any fiscal year shall be carried over to the succeeding fiscal year and expended only for the purpose specified in this section.

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§ 12-4-110. Energy-related services.

Contracts by counties, cities, metropolitan governments, towns, utility districts and other municipal and public corporations of this state for energy-related services that include both engineering services and equipment, and have as their purpose the reduction of energy costs in public facilities, shall be awarded on the same basis as contracts for professional services.

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§ 12-4-111. Standard prototype design for correctional facilities.

(a) For purposes of this part, “state standard prototype,” means a design on which a state correctional facility is based so that the design can be used by the state to construct similar buildings at different sites at a future time. The state building commission may designate state standard prototypes from design documents which were originally prepared for the exclusive use of the state. The state architect shall place the appropriate designation on a document which is determined to be a state standard prototype.
(b) Prior to the reuse of documents for a project in which the original architect or engineer is not also involved, the state shall remove and obliterate from all documents the identification of the original architect or engineer, including name, address, professional seal or stamp, and signature. The architect or engineer who is involved in a state standard prototypical reuse project shall affix such architect's or engineer's seal or stamp to such design, and shall be solely responsible for all documents on which such architect's or engineer's seal or stamp is placed, and shall hold the original architect or engineer harmless from suits by third parties.
(c) The original architect or engineer shall not be liable for injury or damage resulting from reuse of plans, designs, details, specifications or construction documents of a state standard prototype by the state or third parties, if the original architect or engineer is not also involved in the reuse project. It is the intent of this section that the architect or engineer who seals or stamps a prototype is legally responsible only for that set of documents on which such architect's or engineer's seal or stamp is placed.

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§ 12-4-112. State agency contract guidelines.

(a) As used in this section, “governmental entity” means any county, municipality, metropolitan government, town, utility district, or other municipal or public corporation of this state.
(b) Notwithstanding any other provision of law or private act to the contrary, a governmental entity may enter into multi-year contracts for painting and other maintenance of water storage tanks and appurtenant facilities procured through a request for proposals process. The request for proposals process shall invite prospective proposers to participate and shall indicate the service requirements and the categories used for evaluating the proposals, together with the relative weight of each category. Such categories shall include such factors as qualifications, experience on similar projects, availability of workers, technical approach, minority participation, cost, and any additional factor or factors deemed relevant by the procuring governmental entity. Cost shall not be the sole criterion for evaluation. Proposers shall be given at least thirty (30) days from public advertisement of the request for proposals to consider the evaluation factors set forth in the solicitation documents before submitting proposals. The contract shall be awarded to the best proposer who meets the minimum required qualifications, using the evaluation criteria set forth in this subsection (b).
(c) Any governmental entity may, at its option, require such multi-year contracts to be competitively bid.

§ 12-4-113. Deadline for addenda and questions concerning bid documents.

(a) If a statute, ordinance, resolution, rule or regulation mandates the use of competitive bidding of any kind or nature whatsoever, by any state agency, county or municipal corporation, then, notwithstanding such law, ordinance, resolution, rule or regulation, no addenda within less than forty-eight (48) hours of the bid opening date, excluding weekends and legal holidays designated in § 15-1-101, shall be permitted unless the bid deadline is extended for a reasonable time as determined by the purchasing agent, which shall not be less than forty-eight (48) hours excluding weekends and legal holidays designated in § 15-1-101, to allow for any necessary changes to the bid documents and to allow bidders to resubmit their bids accordingly.
(b) Any questions concerning the bid documents must be received by the designer no less than ninety-six (96) hours before bid opening date.
(c) This section does not apply to the central procurement office, to any procurement conducted pursuant to chapter 3 of this title, to any department of transportation contracts, or to any state or local agency contracts funded in whole or in part with state or federal highway funds.

§ 12-4-114. No conflict of interest allowed.

(a)
1. (1) No public officer or employee who is involved in making or administering a contract on behalf of a public agency may derive a direct benefit from the contract except as provided in this section, or as otherwise allowed by law.
2. (2) No public employee having official responsibility for a procurement transaction shall participate in that transaction on behalf of the public body when the employee knows that:
  1. (A) The employee is contemporaneously employed by a respondent to a solicitation or contractor involved in the procurement transaction;
  2. (B) The employee, the employee's spouse, or any member of the employee's immediate family holds a position with a respondent to a solicitation, a contractor involved in the procurement transaction, such as an officer, director, trustee, partner or the like, or is employed in a capacity involving personal and substantial participation in the procurement transaction, or owns or controls an interest of more than five percent (5%);
  3. (C) The employee, the employee's spouse, or any member of the employee's immediate family has a pecuniary interest arising from the procurement transaction; or
  4. (D) The employee, the employee's spouse, or any member of the employee's immediate family is negotiating, or has an arrangement concerning, prospective employment with a respondent to a solicitation or contractor involved in the procurement transaction.
3. (3) A public officer or employee who will derive a direct benefit from a contract with the public agency the officer or employee serves, but who is not involved in making or administering the contract, shall not attempt to influence any other person who is involved in making or administering the contract.
4. (4) No public officer or employee may solicit or receive any gift, reward, or promise of reward in exchange for recommending, influencing, or attempting to influence the award of a contract by the public agency the officer or employee serves.
(b) As used in this section, “immediate family” means spouse, dependent children or stepchildren, or relatives related by blood or marriage.

§ 12-4-115. “Organizational conflicts of interest” defined — Policies and procedures — Reporting.

(a) As used in this section, “organizational conflicts of interest” may include any relationship or action between any party, including contractors and consultants, and the state or its agents making decisions to procure or contract that may:
1. (1) Conflict with the state's best interest; or
2. (2) Taint the procurement process or reputation of the state.
(b) The central procurement office, state building commission and department of transportation shall establish policies and procedures to define and identify organizational conflicts of interest. The policies and procedures shall set forth methods, which may include avoidance, mitigation, or waiver, to deal with organizational conflicts of interest.
(c) The policies and procedures shall provide that all determinations relating to specific organizational conflicts of interest be in writing. Such determinations shall periodically be reported to the speaker of the house of representatives, the speaker of the senate and to the comptroller of the treasury.

§ 12-4-116. Electronic bidding.

Notwithstanding any law, rule or regulation to the contrary, local governments may satisfy any requirement for mailing by distributing invitations to bid, requests for proposals and other solicitations electronically. In addition, local governments may receive bids, proposals, and other offers electronically. In order to assure the fullest possible participation of small businesses and minority-owned businesses, local governments shall not require such small businesses and minority-owned businesses to receive or respond to invitations to bid, requests for proposals, or other solicitations electronically.

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62-2-306(e)

§ 12-4-117. Residency and income requirements for employees prohibited — Exception — Definitions.

(a) Notwithstanding any state law to the contrary, neither the state, its political subdivisions, agencies, or instrumentalities thereof, or any local government shall require a company bidding or contracting to provide services on a public construction project to employ individuals who reside within the jurisdiction of the state or local government or who are within a specific income range, unless otherwise required by federal law.
(b) For purposes of this section:
1. (1) “Local government” means any municipality or county, including a county with a metropolitan form of government; and
2. (2) “Public construction project” means any construction project wherein state or local government funds may be appropriated or expended for the purpose of erecting, remodeling, altering, repairing, demolishing, or making any addition to any building; or any construction project for the purpose of building, rebuilding, locating, relocating, or repairing any street, highway, or bridge.

§ 12-4-118. Energy performance or guaranteed savings contract using alternative procurement or contracting vehicles — Annual measurement and verification audit — Guarantee.

(a) Notwithstanding any law to the contrary, state agencies, in consultation with the department of general services, and in accordance with policies established by the state building commission and state funding board, may enter into an energy performance or guaranteed savings contract using alternative procurement or contracting vehicles, including, but not limited to, existing in-state and out-of-state government contracts that have been competitively procured, that incorporate energy or utility savings into the scope of work to be performed under the contract, and that expressly authorize other contracting entities to execute contracts or price agreements under the terms and conditions of the master contract on behalf of a department, institution, agency, or campus having control of, or responsibility for, the management or operation of buildings and facilities; provided, that the contract award meets the requirements of § 12-4-110 relative to energy-related service contracts for counties, cities, metropolitan governments, towns, utility districts, and other municipal and public corporations of this state. Such contracts are subject to approval by the state building commission. Agencies shall make reasonable efforts to ensure that small businesses are not disadvantaged in the determination of a qualified energy services provider.
(b) Projects implemented under an energy performance or guaranteed energy savings contract under subsection (a) may include, but are not limited to, the following energy or utility conservation measures:
1. (1) Building envelope weatherization;
2. (2) Building automation controls;
3. (3) Lighting retrofits and controls;
4. (4) Water conservation, HVAC, chiller plant, boiler plant, or other mechanical modifications;
5. (5) Submetering to measure performance of controls or systems; and
6. (6) Other energy or utility conservation measures that would result in cost savings.
(c) For the duration of each individual contract, an annual measurement and verification audit utilizing generally accepted auditing standards, such as the International Performance Measurement and Verification Protocol, must be conducted, and the related audit report must include, but not be limited to, energy or utility savings achieved, energy or utility savings targets met or exceeded, energy or utility savings targets missed, and guarantees paid by the energy service company executing the contract. The annual measurement and verification audit must be conducted by, and the related audit report must be prepared by, a third party at the expense of the energy service company executing the contract. Each audit report must be submitted annually by the state department, institution, or agency that has entered one (1) or more energy performance or guaranteed energy savings contracts to the department of environment and conservation's office of energy programs within thirty (30) days following the close of the fiscal year. The department of environment and conservation's office of energy programs shall submit the data to the governor, the commissioner of environment and conservation, state procurement agencies, the state building commission, the comptroller of the treasury, the speaker of the senate, and the speaker of the house of representatives no later than August 31 for each year in which each energy performance or guaranteed energy savings contract is executed and in effect.
(d) Notwithstanding any law to the contrary, any energy service company executing an energy performance contract or a guaranteed energy savings contract shall provide a written guarantee that the operational, energy, or utility savings produced by such contract during each year of the contract will be sufficient to pay for the financing repayment costs for that year. The energy service company shall post a performance bond, letter of credit, or similar surety with the procurement agency for a term of up to three (3) years and that may be renewed for subsequent terms of up to three (3) years to insure the guaranteed savings over the contract term. The costs associated with the energy performance or guaranteed energy savings contract may be financed by a third-party installment payment agreement, tax exempt lease purchase agreement, or other appropriate financing agreement arranged by the energy service company for a term of up to the lesser of twenty (20) years or the aggregate weighted expected useful life of the items that are the subject of the agreement. The financing agreement must provide that the state procurement agency may terminate the agreement if sufficient funds are not appropriated to the state procurement agency in any fiscal year during the term of the contract to make the payments under the contract.
(e) Notwithstanding any law to the contrary, this section is not applicable to energy-related service contracts for institutions of higher education, or for counties, cities, metropolitan governments, towns, utility districts, and other municipal and public corporations of this state.

§ 12-4-119. Certification that company not engaged in boycott of Israel.

(a) As used in this section:
1. (1) “Boycott of Israel” means engaging in refusals to deal, terminating business activities, or other commercial actions that are intended to limit commercial relations with Israel, or companies doing business in or with Israel or authorized by, licensed by, or organized under the laws of the State of Israel to do business, or persons or entities doing business in Israel, when such actions are taken:
  1. (A) In compliance with, or adherence to, calls for a boycott of Israel; or
  2. (B) In a manner that discriminates on the basis of nationality, national origin, religion, or other unreasonable basis, and is not based on a valid business reason;
2. (2) “Company” means a for-profit or not-for-profit organization, association, corporation, partnership, joint venture, limited partnership, limited liability partnership, limited liability company, or other entity or business association, including all wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates of those entities or business associations;
3. (3) “Israel” means the State of Israel and Israeli-controlled territories; and
4. (4) “Public entity” means this state or any political subdivision thereof, including all boards, commissions, agencies, institutions, authorities, counties, municipalities, and other bodies politic and corporate of this state, created by or in accordance with state law or rule.
(b) A public entity shall not enter into a contract with a company to acquire or dispose of services, supplies, information technology, or construction unless the contract includes a written certification that the company is not currently engaged in, and will not for the duration of the contract engage in, a boycott of Israel.
(c) This section does not apply to a contract with a total potential value of less than two hundred fifty thousand dollars ($250,000) or to contractors with less than ten (10) employees.
(d) A contract entered into on or after July 1, 2022, that fails to comply with this section is void.
(e) The commissioner of finance and administration or the commissioner's designee may promulgate rules to implement this section so long as the rules are consistent with this section and do not create exceptions to it.
(f) This section does not diminish or infringe upon a right protected under the constitution of this state or the first amendment to the constitution of the United States.
(g) This section must not be construed to conflict with local, state, or federal discrimination laws.

§ 12-4-120. Section definitions — Drones — Prohibited Purchase — Contract termination.

(a) As used in this section:
1. (1) “Agency” means a local agency or law enforcement agency;
2. (2) “Drone” means a powered, aerial vehicle that:
  1. (A) Does not carry a human operator and is operated without the possibility of direct human intervention from within or on the aircraft;
  2. (B) Uses aerodynamic forces to provide vehicle lift;
  3. (C) Can fly autonomously or be piloted remotely; and
  4. (D) Can be expendable or recoverable;
3. (3) “Law enforcement agency” means a lawfully established local agency that is responsible for the prevention and detection of crime, local government code enforcement, and the enforcement of penal, traffic, regulatory, game, or controlled substance laws; and
4. (4) “Local agency” means a county, municipality, branch, or agency of a county or municipality, public utility, utility district, or an entity created pursuant to an interlocal agreement.
(b) Notwithstanding § 39-13-902 or another law, an agency shall not purchase or acquire a drone, as defined in the federal National Defense Authorization Act of 2019 (Pub. L. No. 115-232), produced by a manufacturer banned under Section 889 of the National Defense Authorization Act of 2019, as amended.
(c) A contract or agreement for the purchase or acquisition of a drone in violation of this section is void and unenforceable.

Part 2 Surety Bonds

§ 12-4-201. Contractors bonds — Securities or cash in lieu of bonds.

(a)
1. (1) No contract shall be let for any public work in this state, by any city, county or state authority, until the contractor shall have first executed a good and solvent bond to the effect that the contractor will pay for all the labor and materials used by the contractor, or any immediate or remote subcontractor under the contractor, in such contract, in lawful money of the United States. The bond to be so given shall be for no less than twenty-five percent (25%) of the contract price on all contracts in excess of one hundred thousand dollars ($100,000). Where advertisement is made, the condition of the bond shall be stated in the advertisement; provided, that §§ 12-4-201 — 12-4-206 shall not apply to contracts of one hundred thousand dollars ($100,000) or less.
2. (2) A good and solvent bond means a bond written by a surety or insurance company listed on the United States department of the treasury financial management service list of approved bonding companies which is published annually in the federal register at the time the bond is provided in accordance with this part.
3. (3) No bond shall be deemed to be a good and solvent bond if it is written for an amount which is in excess of the amount indicated as approved for sureties or insurance companies by the United States department of the treasury financial management service list published at the time the bond is provided.
4. (4) Any surety bond written for a public work project shall be written by a surety or insurance company that is licensed and authorized to do business as a surety or insurer in this state.
5. (5) Any bond which is not in accordance with this section shall be null and void as against the public policy of this state and shall be rejected by the building or bidding authority.
(b)
1. (1) No contract let for any public work in this state, by any city, county or state authority, shall require a contractor or subcontractor to obtain any bond including, but not limited to, payment bonds, performance bonds and bid bonds, from a particular surety, agent, broker or producer.
2. (2) No public officer, whose duty it is to let or award contracts, shall require a contractor or subcontractor to obtain any bond, including, but not limited to, payment bonds, performance bonds and bid bonds, from a particular surety, agent, broker or producer.
3. (3) This subsection (b) shall not preclude a city, county, or state authority from requiring that a contractor or subcontractor obtain a bond, including payment bonds, performance bonds and bid bonds, from a properly licensed surety, agent, broker or producer.
(c) In lieu of the bond required by subsection (a), the following securities or cash may be substituted at the percentage rate required for such bond:
1. (1) United States treasury bonds, United States treasury notes and United States treasury bills;
2. (2) General obligation bonds of the state of Tennessee;
3. (3) Certificates of deposit or evidence of other deposits irrevocably pledged from:
  1. (A) A state or national bank having its principal office in Tennessee;
  2. (B) A state or federal savings and loan association having its principal office in Tennessee;
  3. (C) Any state or national bank, that has its principal office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits; or
  4. (D) Any state or federal savings and loan association that has its principal office located outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits;
4. (4) A letter of credit from a state or national bank or state or federal savings and loan association having its principal office in Tennessee; or any state or national bank or state or federal savings and loan association that has its principal office outside this state and that maintains one (1) or more branches in this state which are authorized to accept federally insured deposits. The terms and conditions of any letter of credit shall be subject to the approval of the public official named in the contract. The form of such letter of credit shall be provided by the bank or savings and loan association and may be based on either the Uniform Commercial Code, title 47, chapter 5, or the ICC Uniform Customs and Practice for Documentary Credits (UCP 500). All letters of credit shall be accompanied by an authorization of the contractor to deliver retained funds to the bank issuing the letter; or
5. (5) Cash; provided, that, where cash is posted, the contracting authority shall pay to the contractor interest at the same rate that interest is paid on funds invested in a local government investment pool established pursuant to § 9-4-704, for the contract period.

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§ 12-4-202. Failure to require bond.

If any public officer, whose duty it is to let or award contracts, lets or awards any contract without requiring bond for payment of labor and material, in compliance with § 12-4-201, such officer commits a Class C misdemeanor.

§ 12-4-203. Contractor disclaiming subcontractor's liability.

In the event the contractor who has executed the bond gives notice, in writing, by return receipt registered mail, to any laborer or furnisher of material or to any such immediate or remote subcontractor that such contractor will not be responsible therefor, then such person who thereafter furnishes such material or labor shall not secure advantage of §§ 12-4-201 — 12-4-206, for materials furnished or labor done after the receipt of such notice.

§ 12-4-204. Action on bond by laborer or furnisher of labor or material to the contractor.

Any laborer or furnisher of labor or material to the contractor, or to any immediate or remote subcontractor under the contractor, may bring an action on the bond, and have recovery in such laborer's or furnisher's own name, upon giving security, or taking the oath prescribed for poor persons as provided by law; but in the event of such suit, the city, county, or state shall not be liable for any costs accruing thereunder.

§ 12-4-205. Notice of claim.

Such furnisher of labor or material, or such laborer, to secure the advantage of §§ 12-4-201 — 12-4-206, shall, after such labor or material is furnished, or such labor is done, and within ninety (90) days after the completion of such public work, give written notice by return receipt certified mail, or by personal delivery, either to the contractor who executed the bond, or to the public official who had charge of the letting or awarding of the contract; such written notice to set forth the nature, an itemized account of the material furnished or labor done, and the balance due therefor; and a description of the property improved. In the case of public work undertaken by a municipality, or any of its commissions, notice, or statement herein required, so mailed or delivered to the mayor thereof, shall be deemed sufficient. In the case of public work by any county or any of its commissions, notice or statement herein required, so mailed, or delivered to the county mayor of such county, shall be deemed sufficient. In the case of public work by the state, or any of its commissions, notice and statement herein required, so mailed, or delivered to the governor, shall be deemed sufficient.

§ 12-4-206. Joinder of parties — Limitation of actions.

Several persons entitled may join in one (1) suit on such bond, or one (1) of them may file a bill in equity in behalf of all such, who may, upon execution of a bond for costs, by petition assert their rights in the proceeding; provided, that action shall be brought or claims so filed within six (6) months following the completion of such public work, or of the furnishing of such labor or materials.

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§ 12-4-207. Bond to pay taxes, licenses, and other amounts due.

(a) Any person, firm or corporation entering into a formal contract with this state, or any county thereof, municipality or political subdivision, or any public board, department, commission or institution thereof for the construction or maintenance of public buildings, works or projects, or the doing of repairs to any public building, works or projects, shall be required, before commencing on such work covered by such contract, to execute the usual bond with good and sufficient sureties, as required by law, with the additional obligation that such contractor shall promptly make payment of all taxes, licenses, assessments, contributions, penalties, and interest thereon when, and if, the same may be lawfully due this state, or any county, municipality or political subdivision thereof by reason of and directly connected with the performance of such contract or any part thereof. Any such bond shall be deemed to include the foregoing obligation irrespective of whether or not the same be expressly written into such bond.
(b) On any contract of less than ten thousand dollars ($10,000), the foregoing obligation need not be undertaken, nor shall it be implied, if the contractor presents sufficient evidence that the payments required by this section have been paid. The sufficiency of the evidence presented shall be determined in the following manner:
1. (1) The state building commission shall make the determination of sufficiency for projects under its jurisdiction pursuant to rules lawfully promulgated by the commission;
2. (2) The state procurement commission shall make the determination of sufficiency in any case involving any state agency, department or institution by whatever name called, except as otherwise provided by subdivision (b)(1) or (b)(4), pursuant to rules lawfully promulgated by the procurement commission;
3. (3) The governing bodies of counties and municipalities or appropriate central administrative authority designated by vote of the governing bodies shall make the determination of sufficiency in the case of county or municipal agencies pursuant to rules lawfully adopted by the governing bodies or their designated central administrative authority. In making such designations and developing such rules, county and municipal operating departments and agencies shall not be given authority to determine the application of this law to specific cases without the approval of some higher central authority, whether the governing body or some central administrative authority; and
4. (4) For other political subdivisions, public boards, departments, commissions or institutions not otherwise covered by subdivision (b)(1), (b)(2) or (b)(3), the legally constituted governing board, or, if such does not exist, the administrative authority shall make the determination of sufficiency pursuant to rules lawfully adopted by the board or authority.

§ 12-4-208. Action on bond.

In default of the prompt payment of all such taxes, licenses, assessments, contributions, damages, penalties and interest thereon, as may be due by any such contractor, a direct proceeding on the bond may be brought in any court of competent jurisdiction by the proper officer or agency having lawful authority so to do, to enforce such payment. The right to so proceed in this matter is cumulative and in addition to such other remedies as may now be provided by law.

Part 3 Reimbursement of Health Care Provider Costs

§ 12-4-301. Establishment of rules and regulations for determining payment.

(a) It is hereby made the duty of the commissioner of health, in consultation with the comptroller of the treasury, to establish rules and regulations for the determination of payment to the contracting health care providers who contract with the several state agencies for the care of persons.
(b) This part shall not apply to health care providers, for purposes of payment to such health care providers pursuant to title 71, chapter 5, except as expressly provided by rules and regulations promulgated by the department of health pursuant to § 71-5-105; provided, that this part shall not apply to payments made pursuant to title 8, chapter 27.

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12-4-302

§ 12-4-302. Determination of payment.

For the purposes herein set out, payment shall be determined by the comptroller of the treasury in accordance with the rules and regulations established by the department of health pursuant to § 12-4-301, in consultation with the several state departments and agencies contracting with health care providers for services and the Tennessee Hospital Association.

§ 12-4-303. Eligibility to receive payment.

To be eligible to receive payment, the contracting health care providers shall use uniform statistics and classification of accounts as published by the American Hospital Association for all accounting records, or any other acceptable accounting methods approved by the department of health, in consultation with the comptroller of the treasury and the Tennessee Hospital Association.

§ 12-4-304. Penalty for improper accounting.

For the purpose of this part, any contracting provider that does not adopt the uniform classification of accounts, or other acceptable accounting methods as shall be established by the department of health, in consultation with the comptroller of the treasury and the Tennessee Hospital Association, or does not submit cost data as required by the department, shall be assessed a penalty of ten dollars ($10.00) for each day such provider is not in compliance with this section.

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§ 12-4-305. Certification of figures — Noncertified statements.

The department of health, in consultation with the comptroller of the treasury, may require that figures submitted by the health care provider be certified by the administrator of the provider and by a licensed public accountant or certified public accountant. The final authority for the determination and certification of figures submitted by the provider to the department shall be the comptroller of the treasury; provided, that any provider that does not submit certified statements, when required, shall be assessed the penalty provided by § 12-4-304.

§ 12-4-306. Forms for reports and statements.

All forms for reporting figures by health care providers shall be designed and specified by the department of health, in consultation with the comptroller of the treasury and the state departments purchasing health care services and the Tennessee Hospital Association. All providers shall be required to submit statements on the form or forms prescribed and designed by the department for this purpose.

§ 12-4-307. Audits.

The comptroller of the treasury is empowered and has the right and privilege to audit any contracting health care provider to verify statements and data submitted by the provider; provided, that all legal aids granted to the comptroller of the treasury elsewhere, by law, are expressly reserved to the comptroller of the treasury in such audits.

§ 12-4-308. Reimbursement of licensed residential homes for mentally ill.

(a)
1. (1) The department of mental health and substance abuse services shall, by rule, establish a pilot program to reimburse licensed supportive living facilities for the mentally ill, as defined by departmental rules, in those counties having a population according to the 1980 federal census or any subsequent such census of:
  3. 23,850 23,900
  4. 26,400 26,500
  5. 32,60032,700
  6. 32,760 32,800
  7. 34,600 34,700
  8. 56,000 56,100
  9. 74,50074,600
  10. 287,700 287,800
  11. 319,625319,725
  12. 400,000 500,000
  13. 770,000 780,000
2. (2) The rules may, in the discretion of the department, distinguish between the types of facilities and between beds within a facility to implement the pilot program, the cost of which shall not exceed the amount provided for such purpose in the general appropriations act.
(b)
1. (1) The department shall reimburse licensed supportive living facilities for the mentally ill in a daily or monthly amount to be established by the department for each resident whose income is limited to payments under the Social Security Act (42 U.S.C. § 301 et seq.), and does not exceed the monthly SSI federal benefit rate (FBR). No supportive living facility participating in the pilot program shall receive reimbursement under the pilot program for more than thirty percent (30%) of its licensed residential capacity. If necessary to implement this program within the limits of its annual appropriation, the department may promulgate rules to further limit the number of residents for whom reimbursement may be claimed.
2. (2) For the period beginning January 1, 2006, and until May 4, 2006, only, any payments withheld due to a resident's income exceeding the six-hundred-dollar per month limit shall be paid in accordance with subdivision (b)(1).
(c)
1. (1) This section shall have no application unless funding is specifically provided for and included in the general appropriations bill. During any fiscal year, departmental reimbursement paid to licensed supportive living facilities under the authority of subsection (b) shall not exceed the level of funding specifically provided for such purpose within the general appropriations bill.
2. (2) The implementation of this section and the expenditure of any funds to implement such provisions shall be subject to the approval of the commissioner of finance and administration.
(d) The department is authorized to promulgate, in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, such rules as may be necessary to effectively and efficiently implement this section.

Part 4 Prevailing Wage Act for State Highway Construction Projects

§ 12-4-401. Short title.

This part shall be known and may be cited as the “Prevailing Wage Act for State Highway Construction Projects.”

§ 12-4-402. Part definitions.

As used in this part, unless the context otherwise requires:
1. (1) “Commission” means the prevailing wage commission;
2. (2) “Highway contractor” means any contractor, subcontractor, person, firm, or corporation engaged in a state construction project for the purpose of building, rebuilding, locating, relocating, or repairing any public highway;
3. (3) “Prevailing wage” means the rate of pay as determined according to this part;
4. (4) “Public highway” means any street, road, highway, expressway, bridge, or viaduct, including an adjacent right-of-way, that is constructed or maintained by the state, or any municipality or political subdivision of the state, and that is funded in whole or in part with federal or state highway funds;
5. (5) “State contract” means any contractual agreement, written or oral, entered into by any person, firm or corporation with this state for the performance of work on a state highway construction project; and
6. (6) “State highway construction project” means any construction project for the purpose of building, rebuilding, locating, relocating, or repairing any public highway.

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12-4-903(3)(C)(i)(a)

§ 12-4-403. Establishment and payment of prevailing wage.

(a) It is hereby declared to be the policy of this state that the prevailing wage rate be determined by defined standards and that such rate be paid workers on all state highway construction projects.
(b) Any highway contractor entering into a state contract for the performance of work on state highway construction projects shall pay not less than the prevailing wage rate for all types and classifications of such work as determined by this part.

§ 12-4-404. Prevailing wage commission.

(a) There shall be a prevailing wage commission composed of five (5) members, including the commissioner of labor and workforce development, who shall serve as chair, the state architect, and the commissioner of transportation or the commissioner's designee. Two (2) members shall be appointed by the governor who shall serve terms of two (2) years.
(b) The commission has the duty of determining the prevailing wage rate for state highway construction.
(c) All reimbursement for travel expenses shall be in accordance with the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter.

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4-29-249(a)(18)

§ 12-4-405. Determination of prevailing wage.

For purposes of this part, the prevailing wage rate shall be determined as follows:
1. (1) Every highway contractor, as herein defined, in this state, shall have the right to certify, on contracts entered into, to the commission, on or before October 31 in each year that a determination is to be made, the following:
  1. (A) Copies of payroll records for the immediate preceding calendar quarter by area as defined in subdivision (2); and
  2. (B) The numbers of hours worked and the straight time rate per hour paid for such hours in each of the classifications referred to in this part by area as defined in subdivision (2) for the immediate preceding calendar quarter;
2. (2) For purposes of calculating the prevailing wage rate for workers employed by highway contractors, the state shall be deemed to consist of one (1) statewide area;
3. (3) For purposes of determining the prevailing wage rate for workers employed by highway contractors, the commission may issue classifications of crafts of workers including, but not limited to, the following: bricklayers; iron workers, structural; iron workers, reinforcing; carpenters or leadspersons; cement masons; nozzlepersons or gunpersons (gunite); painters or sandblasters; shovel operators; backhoe operators; crane operators; end loaders; pile driver operators; motor patrols, finish; concrete paver operators; mechanics, Class I; mechanics, Class II; motor patrols (rough); bulldozer or push dozer operators; scraper operators; trenching machine operators; central mixing (asphalt or concrete); tractors, booms and hoists; concrete finishing machines; soil cement machines; asphalt pavers; rollers, high type; spreaders, self propelled; distributors, bituminous; roller, other than finish; tractor, crawler, utility; dozers or loaders, stock piles only; concrete mixers, less than one (1) yard; mulchers or seeders; earth drills; scale operators; tractors, farm; curb machines; ditch pavers; pump operators; concrete saws; guardrail erectors; sign erectors; motor crane drivers; fence erectors; firefighters; asphalt rakers; tract drill operators; concrete edgers; powder persons; form setters, steel rods; air tool operators; mortar mixers; chain saws; pipe layers; concrete rubbers; laborers; flaggers; oilers; welder's helpers; mechanic's helpers; electricians; truck drivers, two (2) and three (3) axles; truck drivers, four (4) and five (5) axles or more or heavy duty off-the-road trucks; welders, receive rate for craft performing operation to which welding is incidental;
4. (4) The prevailing wage rate for each area specified in subdivision (2) shall be determined by calculating the average hourly rate of pay for each classification referred to in subdivision (3). The commission shall determine the prevailing wage annually for highway construction from the documentation certified to the commission pursuant to subdivision (1). The commission, if it ascertains that current economic conditions warrant, can adjust the final wage determination as developed by the documentation certified to the commission by adding to or subtracting from the determination a percentage factor of not more than six percent (6%), based on the previous year's prevailing wage rates. Such determination shall be effective until the next determination of the prevailing wage rate pursuant to the terms hereof, unless herein otherwise specifically provided. The prevailing wage rate must be determined pursuant to this part and the failure of any highway contractor or contractors to provide the documentation referred to in subdivision (1) shall not affect such determination;
5. (5)
  1. (A) The commission shall determine the prevailing wage rate pursuant to the terms of this part and give notice thereof on or before December 1 of each year a determination is to be made. The commission shall give notice of such prevailing wage rate to all highway contractors who submitted documentation in accordance with subdivision (1) and to any others making written request for such notice. Such notice shall include the time and place of the public hearing required by § 12-4-406. The commission shall take all reasonable steps to verify the survey results submitted to it by highway contractors pursuant to this part, and may, at any time, after first holding a public hearing thereon, adjust wage rates so that they reflect only survey data which has been verified by the commission;
  2. (B) The prevailing wage commission is urged to continue its efforts to develop an internet application for the submission of survey forms by highway contractors and periodically update the general assembly on the progress of such development; and
6. (6) Until such time as the commission makes a prevailing wage rate determination pursuant to this part, the prevailing wage rate in effect on April 23, 1975, shall be considered to be the prevailing wage rate.

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12-4-406(a)

§ 12-4-406. Review of prevailing wage determination.

(a) The commission shall conduct a public hearing within ten (10) days of the notice required in § 12-4-405. At such public hearing, the commission shall present the documentation provided for in this part other than payroll records, and any other facts upon which the prevailing wage determination was made. Any interested party may present any other facts or documentation material to the determination of the prevailing wage rate at such hearing. Within ten (10) days after such public hearing, the commission shall give notice of its final determination on such prevailing wage rate to all highway contractors who submitted documentation in accordance with this part and to any others making written request for such notice.
(b) Judicial review of such final determination of the prevailing wage rate shall be in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

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12-4-405(5)(A)

§ 12-4-407. Rates set out in specifications.

Before advertising for bids or entering into any contract for a state highway construction project, every state agency under whose jurisdiction such work is to be performed shall ascertain from the commission prevailing wage rates for all classifications as herein provided in the areas where the work is to be performed. This schedule of wages shall be attached to and made a part of the specifications for the work, and shall be printed on the bidding blanks and made a part of every contract for the construction of any state highway construction project.

§ 12-4-408. Wage rates promulgated — Contract provision required.

After the prevailing wage determination has been made by the commission, the same shall be furnished to all state agencies which may be charged with the responsibility of entering into any state contract, and shall specify what wage rates shall be paid on all classifications of work that may be used by such person, highway contractors, firm or corporation in carrying out such contractual agreement. In all cases where the commission has established a prevailing rate of wages, the contract executed between any state agency and the successful bidder or highway contractors shall contain a provision requiring the successful bidder and all of the successful bidder's subcontractors to pay the rate of wages so established. The successful bidder or highway contractors and all subcontractors shall strictly comply with these provisions of the contract.

§ 12-4-409. Bond for compliance.

In all cases where any state agency awards a contract for any state highway construction project under this part, the bond of the highway contractor or subcontractor shall contain a provision obligating such highway contractor or subcontractor to a faithful performance of each and every requirement imposed upon such highway contractor or subcontractor under the terms of this part.

§ 12-4-410. Posting of wage rates.

Each highway contractor and subcontractor subject to this part shall post and keep posted in a conspicuous place at the site of the construction work a copy of the prevailing wage rates prescribed in the state contract.

§ 12-4-411. Payroll records of contractors.

(a) Any person, highway contractor, firm or corporation who may enter into any state contract shall furnish to the state agency entering into such contractual agreement any necessary forms, papers, payroll copies or any other information that may be required of any such person, highway contractor, firm or corporation by the state agency to show compliance with this part.
(b) Payroll records shall not be destroyed for one (1) year following the completion of the state highway construction project.

§ 12-4-412. Breach of contract provisions — Actions against highway contractors — Advertising and reletting contract.

The commission or any employee of any highway contractor or subcontractor whose wages are determined pursuant to this part may maintain an action against any highway contractor or subcontractor for the breach of any condition of any performance bond given under this part, and, in case of breach of any provision of such bond, the particular state agency which awarded the contract may advertise the work and relet the contract in the same manner as the original letting.

§ 12-4-413. Delegation of administrative responsibilities.

The commission may delegate administrative responsibilities conferred hereunder to the department of labor and workforce development.

§ 12-4-414. Inspection of records.

All records and documentation provided for in this part, other than payroll records, shall be made available for public inspection by the commission and the department of labor and workforce development during normal business hours.

§ 12-4-415. Rules and regulations.

The commission may promulgate such rules and regulations, neither inconsistent nor contradictory with this part, which it deems necessary to effectuate this part.

Part 5 State Construction Projects Liability Act of 1977

§ 12-4-501. Liability of contractor in construction projects.

This part shall be known as the “State Construction Projects Liability Act of 1977.”

§ 12-4-502. Part definitions.

As used in this part, unless the context otherwise requires:
1. (1) “Acceptance” means notification by an authorized officer or employee of the state that the work completed has been in accordance with the terms and conditions of the state contract;
2. (2) “State” means the state of Tennessee;
3. (3) “State construction project” means any construction project for the purpose of erecting, remodeling, altering, repairing, demolishing, or making any additions to any building or buildings, any other type of building and construction work, or any construction project for the purpose of building, rebuilding, locating or relocating or repairing any streets, highways or bridges, wherein any state funds may be appropriated or expended for such building or construction work;
4. (4) “State contract” means any contractual agreement, written or oral, inclusive of plans and specifications incidental thereto, entered into by any person, firm or corporation with the state for the performance of work on a state construction project; and
5. (5) “State contractor” means any person, firm or corporation engaged in a state construction project pursuant to a state contract.

§ 12-4-503. Discharge of contractor from liability.

Upon acceptance by the state of a state contractor's work, provided that such state contractor's work is done in accordance with the plans and specifications, such state contractor is discharged from all liability to any party by reason of its lack of ordinary care in the performance of, or failure to perform, such work on such state construction project.

Part 6 Ineligibility for Employment on Public Contracts

§ 12-4-601. Other state entities.

As used in this part, “other state entities” includes counties, cities, municipalities, and any other political subdivision of this state.

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12-3-306(b)(2)

§ 12-4-602. Prohibition on solicitation of government contracts by those convicted of certain offenses.

(a) “Employment on any contract” means to perform services or provide materials to the state or subcontract to perform such services or provide such materials.
(b) It is unlawful for the following persons and business organizations to solicit employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities, for a period of twenty-five (25) years from the date of such person's or organization's conviction, except as provided in §§ 12-4-605 and 12-4-606:
1. (1) Persons, partnerships, joint ventures, firms or corporations who have pleaded guilty or nolo contendere to or have been convicted of violations of the Sherman Antitrust Act (15 U.S.C. § 1), mail fraud (18 U.S.C. § 1341), or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigation of such offenses;
2. (2) Corporations, publicly or closely held, where any officer, director, shareholder active in management or employee holding a similar managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses. This subdivision (b)(2) shall be applicable only where such officer, director, shareholder or employee committed such violation while acting as a representative of such corporation;
3. (3) Corporations, publicly or closely held, where any officer, director, shareholder active in management or employee holding a similar managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses, and where such corporations are formed subsequent to such plea or conviction;
4. (4) Partnerships where any partner has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses. This subdivision (b)(4) shall be applicable only where such partner committed such violation while acting as a representative of such partnership;
5. (5) Partnerships where any partner has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded in whole or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses, and where such partnerships are formed subsequent to such plea or conviction;
6. (6) Joint ventures or other associations where any joint venturer, managing agent, person entitled to share in the proceeds and engaged in the active management thereof, or person holding a managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities, or arising out of official investigation of such offenses. This subdivision (b)(6) shall be applicable only where such joint venturer, managing agent, person entitled to share in the proceeds, or person holding an executive position committed such violation while acting as a representative of such joint venture or association;
7. (7) Joint ventures or other associations where any joint venturer, managing agent, person entitled to share in the proceeds and engaged in the active management thereof, or person holding a managerial position has pleaded guilty or nolo contendere or has been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigations of such offenses, and where such joint ventures or associations are formed subsequent to such plea or conviction; or
8. (8) Succeeding or related corporations, partnerships, joint ventures, or other business organizations which have substantial factual or legal connections, continuity or identity with persons or organizations that have pleaded guilty or nolo contendere or have been convicted of violations of the Sherman Antitrust Act, mail fraud, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state or other state entities or arising out of official investigations of such offenses. Determination of factual or legal connection, continuity or identity under this subdivision (b)(8) shall be made by the attorney general and reporter upon request of the succeeding or related business organization.

§ 12-4-603. Notification of governmental entities by attorney general and reporter.

It is the responsibility of the attorney general and reporter to timely notify those state departments, agencies and other entities involved in letting or funding state or other state entity contracts of those persons and business organizations ineligible to solicit employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities.

§ 12-4-604. Intentional violation of part — Penalty.

An intentional violation of this part is a Class E felony.

§ 12-4-605. Applicability.

No person or business organization shall be prohibited by this part from soliciting employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities due to a conviction resulting from activities engaged in prior to May 22, 1981.

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12-4-602(b)

§ 12-4-606. Exemptions.

The attorney general and reporter and the district attorneys general in their respective districts have the authority to grant exemptions from the prohibitions on soliciting employment on certain contracts enumerated herein to persons giving information to such officials in a criminal investigation or testifying in a state criminal trial in connection with any contract let or funded wholly or in part by the state or by other state entities or in a criminal trial arising out of official investigations of such offenses; provided, that such information or testimony results in a conviction. Such officials also have the authority to grant such exemptions to persons giving information to such officials in a civil investigation or testifying in a lawsuit brought by the state under the Sherman Antitrust Act (15 U.S.C. § 1), or title 47, chapter 25, in connection with any contract let or funded wholly or in part by the state or by other state entities; provided, that such information or testimony results in a monetary judgment for the state. Such exemptions may be total, limited to certain contracting agencies or departments, or limited in time.

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12-4-602(b)

Part 7 Prompt Pay Act of 1985

§ 12-4-701. Short title.

This part shall be known and may be cited as the “Prompt Pay Act of 1985.”

§ 12-4-702. Part definitions.

As used in this part, unless the context otherwise requires:
1. (1) “Acquire” means to derive a benefit from, whether by lease, grant, expenditure, or otherwise;
2. (2) “Agency” means any entity of the state government, as defined in § 4-5-102;
3. (3) “Business” means a business organization in any form, institution, association, profession, occupation or calling of any kind, whether or not conducted for profit;
4. (4) “Property” means anything of value, including, but not limited to, real estate, tangible and intangible personal property, contract rights, choses-in-action and other interests in or claims to wealth, admission or transportation tickets, captured or domestic animals, electric or other power and signatures which purport to create, maintain or extinguish any legal obligation; and
5. (5) “Service” means labor that does not include a tangible commodity. “Service” includes, but is not limited to: labor; professional advice; services provided by health care providers to medicaid recipients upon filing of a properly completed claim form; telephone, cable television and other utility service; accommodations in hotels, restaurants or elsewhere; admissions to exhibits and entertainments; the use of machines designed to be operated by coin or other thing of value; and the use of rented real or personal property.

§ 12-4-703. When payment required.

An agency which acquires property or services pursuant to a contract with a business shall pay for each complete delivered item of property or service in accordance with the contract between the business and agency or, if no date or other provision for payment is specified by contract, within forty-five (45) days after receipt of the invoice covering the delivered items or services.

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§ 12-4-704. Interest.

(a) Interest shall accrue and be charged on payments overdue under § 12-4-703 at one and one-half percent (1½%) per month beginning on the day after payment is due.
(b) Interest which is unpaid at the end of each sixty-day period or at the end of any specified period provided by contract shall be added to the principal amount of the debt and shall thereafter accumulate interest.

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12-4-706

§ 12-4-705. Appropriations to pay interest prohibited.

An agency may not seek additional appropriations to pay interest which accrues as a result of its failure to make timely payments required by § 12-4-703.

§ 12-4-706. Applicability of part.

This part is not applicable if an agency's failure to pay timely interest required by § 12-4-704 is the result of a dispute between the agency and the business over the amount due or over compliance with the contract.

§ 12-4-707. Payments to subcontractors — Interest.

(a) Upon payment by an agency, a business which has acquired under contract, property or services in connection with its contract with such agency from a subcontractor or supplier shall pay the subcontractor or supplier within thirty (30) days after receiving payment from the agency.
(b) Interest at the rate of one and one-half percent (1½%) per month shall accrue and is due any subcontractor or supplier who is not paid within thirty (30) days after the business receives payment from the agency, unless otherwise provided by contract between the agency and the business, or by contract between the business and the subcontractor or supplier. Interest begins to accrue on the thirty-first day at the rate specified in this subsection (b).

Part 8 Bidding Preferences

§ 12-4-801. Part definitions.

As used in this part, unless the context otherwise requires:
1. (1) “Public construction project” means and includes a public works project as defined in the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21;
2. (2) “Responsible bidder” means a person who has the capacity in all respects to perform fully the contract requirements, and the integrity and reliability which will assure good faith performance; and
3. (3) “Responsive bidder” means a person who has submitted a bid which conforms in all material respects to all documents, whether attached or incorporated by reference, utilized for soliciting bids.

§ 12-4-802. Allowance of bidding preferences — Reciprocity.

Whenever the lowest responsible and responsive bidder on a public construction project in this state is a resident of another state which is contiguous to Tennessee and which allows a preference to a resident contractor of that state, a like reciprocal preference is allowed to the lowest responsible and responsive bidder on such project who is either a resident of this state or is a resident of another state which does not allow for a preference to a resident contractor of that state.

Part 9 Freedom in Contracting Act

§ 12-4-901. Short title.

This part shall be known and may be cited as the “Freedom in Contracting Act.”

§ 12-4-902. Purpose.

The purpose of this part is to prohibit public agencies from imposing certain labor and wage requirements as a condition of performing public works that are state funded in part or in whole.

§ 12-4-903. Prohibited provisions in bid specifications, project agreements and other documents.

The state and its political subdivisions, agencies and instrumentalities thereof, when engaged in procuring products or services or letting contracts to be funded in part or in whole with state funds, shall ensure that no bid specifications, project agreements and other controlling documents, entered into, required or subject to approval by the state, subdivision, agency or instrumentality:
1. (1) Require bidders, offerors, contractors or subcontractors to enter into or adhere to agreements with one (1) or more labor organizations on the same or related projects;
2. (2) Discriminate against bidders, offerors, contractors or subcontractors for refusing to become or remain signatories or otherwise adhere to agreements with one (1) or more labor organizations on the same or related construction projects; or
3. (3) Require any bidder, offeror, contractor or subcontractor to enter into, adhere to or enforce any agreement that requires its employees as a condition of employment to:
  1. (A) Become members of or become affiliated with a labor organization or employee organization of any kind;
  2. (B) Pay dues or fees to a labor organization or employee organization, over an employee's objection, in excess of the employee's share of labor or employee organization costs relating to collective bargaining, contract administration or grievance adjustment; or
  3. (C) Require any bidder, offeror, contractor or subcontractor to pay:
    1. (i) Wages that exceed:
      1. (a) The state's most current prevailing wage scale established pursuant to part 4 of this chapter if the agreement involves a state highway construction project, as defined by § 12-4-402; or
      2. (b) The Tennessee Occupational Wages Report, as defined by § 12-4-907, if the agreement involves a construction project other than a project described in subdivision (3)(C)(i)(a); or
    2. (ii) A specific dollar amount for the provision of fringe benefits for employees.

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§ 12-4-904. Prohibition against issuing grants or agreements conditioned on prohibited provisions.

(a) The state and its political subdivisions, agencies and instrumentalities thereof shall not issue grants or enter into cooperative agreements for construction projects conditioned on a requirement that bid specifications, project agreements or other controlling documents pertaining to the grant or cooperative agreement contain any of the elements specified in § 12-4-903.
(b) The state and its political subdivisions or any agencies or instrumentalities thereof shall exercise such authority as may be required to preclude a grant recipient or party to a cooperative agreement from imposing any of the elements specified in § 12-4-903 in connection with any grant or cooperative agreement awarded or entered into.

§ 12-4-905. Standing to challenge bid specifications, project agreements or other agreements.

Any interested party, including a bidder, offeror, contractor, subcontractor, or taxpayer, shall have standing to challenge any bid specification, project agreement, controlling document, grant or cooperative agreement that such party alleges has violated this part. Such party shall be awarded costs and attorney's fees in the event that the challenge prevails.

§ 12-4-906. Employer to pay employees a wage necessary to meet the federal requirements to obtain federal funds.

If compliance with this part by the state and its political subdivisions, agencies and instrumentalities, relative to a specific contract, project, or program would result in the denial of federal funds that would otherwise be available to the state and its political subdivisions, agencies and instrumentalities, then the state or its political subdivisions, agencies or instrumentalities may require a private employer to pay its employees a wage necessary to meet the federal requirements to obtain the federal funds, but only relative to such contract, project or program.

§ 12-4-907. Meaning of the Tennessee occupational wages report.

For purposes of this part, Tennessee occupational wages report means the applicable report that is published by the department of labor and workforce development, employment security division.

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Part 10 Insurance Purchasing Program

§ 12-4-1001. Alternative methods for purchasing insurance.

The state treasurer shall investigate alternative methods, including competitive bidding, for purchasing insurance for the use and benefit of the state and its agencies, departments or divisions. The state treasurer shall prepare a plan for purchasing insurance, and shall submit the plan to the board of claims prior to its implementation.

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12-4-1002

§ 12-4-1002. Establishment of practices and procedures for purchasing insurance.

The state treasurer shall establish accepted practices and procedures to be followed in purchasing insurance under the plan developed under § 12-4-1001. Such practices and procedures shall be subject to the approval of the board of claims.

§ 12-4-1003. State employees and agents — Insurance sales to state prohibited.

All officers, officials, agents or employees of the state and its divisions, departments and agencies are prohibited from bidding, selling or contracting to sell any policy of insurance to the state or its divisions, departments and agencies.

§ 12-4-1004. Insurance on public buildings — Amount required — Deductibles.

All buildings and building contents owned by the state shall be insured for not less than their actual cash value subject to an aggregate deductible of not less than one million five hundred thousand dollars ($1,500,000) and to such individual claim deductible as may be commercially reasonable.

§ 12-4-1005. Insurance on public buildings — Repair or replacement costs.

The repair or replacement of damaged or destroyed buildings and building contents shall include engineering and other services necessary for such an insurance program to be paid from the risk management fund created pursuant to § 9-8-109.

§ 12-4-1006. Establishment of policies and procedures for administration of insurance program.

The state treasurer shall establish appropriate policies and procedures governing the administration of the insurance program provided herein, including the allocation of premium and other costs and the payment of losses from the risk management fund created pursuant to § 9-8-109. Such policies and procedures shall be subject to the approval of the board of claims.

§ 12-4-1007. Procedure for obtaining policies — Reporting.

(a)
1. (1) The policy or policies of insurance provided in this part shall be obtained by the state treasurer subject to the approval of the board of claims. Notwithstanding the Surplus Lines Insurance Act, compiled in title 56, chapter 14, or any other law to the contrary, the state treasurer, with the approval of the board of claims, shall consider proposals from admitted carriers and nonadmitted surplus lines carriers. In order for nonadmitted carriers to be eligible for consideration under this section, at least two (2) admitted carriers must have declined to submit a proposal, and the nonadmitted carriers shall:
  1. (A) Have a minimum A.M. Best financial strength rating of “A-” and an A.M. Best financial size category of no less than “VI”, or such other A.M. Best rating as may be established by the board of claims provided that the financial strength rating shall not be less than “A-” and the A.M. Best financial size category shall not be less than “VI”; and
  2. (B) Be a member of an insurance holding company system, as defined in § 56-11-101(b), that has at least one (1) affiliate carrier admitted in this state as a property or casualty insurer.
2. (2) Should A.M. Best change or amend its rating methodology, then the board of claims shall adopt a minimum rating requirement that is equivalent to the rating as stated in subdivision (a)(1)(A). The state treasurer shall place the insurance directly with the companies without policies being countersigned notwithstanding § 56-2-409.
(b) The state treasurer shall make periodic reports to the fiscal review committee of the general assembly and to the state building commission concerning the operations of the insurance program.

Chapter 5 Public Printing

§ 12-5-101. Supervision by department of general services.

The department of general services has entire charge and supervision of all printing done for each and every department or branch of government of the state, including all departmental offices and all charitable, penal, educational or reform institutions.

§ 12-5-102. Cost data for public documents.

(a)
1. (1) Every department or agency of the state which promulgates public documents shall cause the following statement with cost data inserted to be printed on the publication adjacent to the identification of the agency responsible for the publication:
  1. “This public document was promulgated at a cost of $ per copy.”
2. (2) This statement shall be printed in either the same size type as the body copy of the publication or in such type style and size to be fully legible and set in a box composed of a light-weight-rule line.
(b) As used in this section, unless the context otherwise requires, “public document” means any annual, biennial, regular or special report or publication of which at least one thousand (1,000) copies are printed and which may be subject to distribution to the public, or any printed material which is controlled by the publications committee established in chapter 7, part 1 of this title, regardless of the number of copies produced. Public documents include:
1. (1) The acts and journals of the general assembly, the reports of the supreme court and such other courts as shall have their decisions reported by the attorney general and reporter or shall be required by any act or resolution of the general assembly;
2. (2) The periodic reports of officers of the state and any special reports that may from time to time be made by state officers or committees of the general assembly or other committees provided for by law;
3. (3) Such other reports or statements as may be published under the authority of the state or any official thereof; and
4. (4) Items exempted from the requirements of this section include letterhead stationery, envelopes, or memoranda and correspondence utilizing a manual signature and not reproduced through a printing related function;
(c) For the purposes of this section, the following two (2) factors shall be utilized in computing cost data whether on bid by a private person or company, or by a state institution:
1. (1) Preparation. Included in this is expenditure for materials, artwork and typesetting involved in preparing the public document for publication; and
2. (2) Printing. Included in this is expenditure for reproduction, binding and other printing industry related functions.
(d) This section shall be enforced and administered through the publications committee created pursuant to chapter 7, part 1 of this title. The publications committee may, in its discretion, render opinions to agencies as to whether those agencies are in compliance with this section. If the committee decides that those agencies are not in compliance, it has authority to direct those agencies to cease publication of the public documents which are not in compliance until such time as compliance shall be demonstrated to the committee's satisfaction.

Chapter 6 Distribution of Publications

§ 12-6-101. Chapter definitions.

As used in this chapter:
1. (1) “Non-depository publication” means printed and electronic publications not collected by state depository libraries, including, but not limited to:
  1. (A) Ephemeral materials, such as business cards, stationery, invitations, postcards, and flyers;
  2. (B) Publications created for state agency internal use, such as handbooks, manuals, conference items of temporary use, instructional items, and agendas;
  3. (C) Agency materials not distributed outside of the creating agency, such as working papers, internal newsletters, internal memoranda, and confidential material; and
  4. (D) Reprints of federal materials;
2. (2) “Publication” includes any newsletter, stationery, greeting card, report, or printed or electronic material produced in any format for distribution outside the creating department or agency, including those published by facilities not operated by the state; and
3. (3)
  1. (A) “State depository publication” includes:
    1. (i) The acts and journals of the general assembly, the reports of the supreme court, and such other courts that have their decisions reported by the attorney general and reporter, or that are required to be reported by any act or resolution of the general assembly;
    2. (ii) The regularly published reports of officers of this state and any special reports that may from time to time be published by state officers or committees of the general assembly or other committees provided for by law, including, but not limited to:
      1. (a) Public and private acts;
      2. (b) Court reports and opinions;
      3. (c) Rules and regulations;
      4. (d) Budget, revenue, and tax report documents;
      5. (e) Annual and biennial reports;
      6. (f) Vital statistics, court statistics, and census reports;
      7. (g) Periodic and special reports;
      8. (h) State plans and strategic plans;
      9. (i) Tennessee Blue Book;
      10. (j) Fact books;
      11. (k) Maps;
      12. (l) Magazines;
      13. (m) External newsletters (those available for public information); and
      14. (n) Such other reports or statements published under the authority of the state, or any official thereof; and
  2. (B) “State depository publication” does not include non-depository publications.

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12-6-102(e)

§ 12-6-102. General distribution of acts.

(a) It is the duty of the secretary of state to distribute the printed acts, upon written request received not later than February 1 of each year, as follows: to each executive officer and Tennessee public utility commission commissioner of the state, one (1) copy; to each judge and each clerk of the supreme, appeals, circuit, criminal and general sessions courts, one (1) copy; to each chancellor, each clerk and master, one (1) copy; to each district attorney general and each assistant, one (1) copy; to the attorney general and reporter and each assistant, one (1) copy; to each clerk of the probate courts and each judge of the county or probate courts, and to each register and each trustee, and each assessor of property, one (1) copy; each of the copies to belong to the indicated office, and go to the successor of the incumbent; also to the order of the University of Tennessee, up to thirty (30) copies for the use of the University of Tennessee as a depository and for exchanges.
(b) A copy of the printed acts shall be, upon written request received not later than February 1 of each year, delivered to every organized bar association in this state; provided, that such bar association maintains a law library; and provided the name and address of such bar association shall be certified to the secretary of state by the county clerk of the county in which the association exists; and provided further, that should the association cease to function or to maintain a law library, all copies of the acts shall thereupon be turned over and delivered to the county clerk.
(c) Bound volumes of acts or resolutions may be made available to any person, firm or corporation, requesting same in writing not later than February 1 of each year, at a price to be fixed by the secretary of state not to exceed per volume printing cost.
(d) Any requests for acts or resolutions received later than February 1 of each year will be accepted subject to availability.
(e) This section and §§ 12-6-101 and 12-6-103 shall not apply to the Tennessee Code Annotated, any supplement thereto or replacement volume thereof, or any act enacting that code.

§ 12-6-103. Publication of acts and journals.

The secretary of state shall also make available additional copies of the acts by publishing the acts in electronic format on the department of state's website. Each house shall make available copies of their journals by publishing the journals in electronic format on their respective websites.

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12-6-102(e)

§ 12-6-104. Shipment of acts.

The secretary of state shall cause the acts for the several officers whose offices are not at the capitol to be safely packed and boxed, and to be shipped prepaid in the way most feasible.

§ 12-6-105. Penalty for failure to distribute acts.

(a) If the printer or secretary of state fails to perform such printer's or secretary of state's duties, the printer or secretary of state shall forfeit five hundred dollars ($500), to be recovered in the name and for the use of the state by the comptroller of the treasury.
(b) Moreover, such failure is a Class C misdemeanor, and the comptroller of the treasury shall cause the delinquent to be indicted for the same.
(c) The comptroller of the treasury shall forfeit the sum of five hundred dollars ($500), to be recovered by any person who will sue for the same, if the comptroller of the treasury fails to enforce the aforementioned penalties against the printer and secretary of state.

§ 12-6-106. All other public documents.

All other public documents, required to be distributed by law, may be distributed with the acts and journals.

§ 12-6-107. Libraries as depositories for state documents and state depository publications — Copies — Legislative reference and law library.

(a) The state library and archives at Nashville, the John C. Hodges Library of the University of Tennessee, at Knoxville, the Benjamin L. Hooks Central Library at Memphis, the Ned R. McWherter Library at the University of Memphis, the Sherrod Library at East Tennessee State University, and such other libraries as the governor may at any time name by executive order are designated depositories for state documents and for all state depository publications issued by any official of the state.
(b) Upon request of a designated depository of state depository publications, such depository is entitled to receive, without charge, one (1) copy of the bills, resolutions, amendments, daily journals, informational services showing committee actions and the status of pieces of legislation, daily calendars, published committee reports, and any official or unofficial published index.
(c) To ensure access of all state depository publications to members of the general assembly without the expense of furnishing copies for each member, all state documents and state depository publications otherwise distributed to depository libraries must be distributed to the legislative reference and law library for the use of the general assembly.

§ 12-6-108. Printed copy of acts for members of the general assembly — Written request requirements.

Each member of the general assembly is entitled to one (1) copy of the printed acts of the general assembly of which the person was a member, which must be delivered to the member's legislative office in Nashville, but only upon written request to the secretary of state by the member not later than February 1 of each year.

§ 12-6-109. Notice of publications — Access to state electronic publications.

At least quarterly, a list of all publications must be provided by the department of general services to the Tennessee state library and archives and other state depository libraries. Notice of publication and access to state electronic publications must be provided to all state depository libraries.

§ 12-6-110. Copies to depositories, legislative reference and law library, secretary of state, and commissioner of general services.

At the expense of each department, agency, board, or commission, the person in charge of making documents and publications shall distribute or have distributed:
1. (1) One (1) copy of all state depository publications to the librarian, person, or persons in charge of each of the depositories and the legislative reference and law library;
2. (2) Upon request, two (2) copies of all state depository publications to the secretary of state; and
3. (3) Upon request, two (2) copies of all state depository publications to the commissioner of general services.

§ 12-6-111. Exchange copies for university.

Upon request by the University of Tennessee, the person in charge of the making of such publications or the issuance of such documents shall furnish the university up to thirty (30) copies of each publication or document.

§ 12-6-112. Care of depository copies.

The librarian or other person in charge of each depository shall receive and carefully preserve all state documents and publications, both printed and electronic, so received.

§ 12-6-113. Exchanges by state librarian.

The state librarian and archivist may, from time to time, procure from the general government, any foreign government, or from any state or territory within the United States, the public acts, and law and equity reports of such government, state or territory, by exchanging the public acts or reports of this state.

§ 12-6-114. [Repealed]

§ 12-6-115. Rules regarding state depository publications in electronic format.

The secretary of state shall promulgate rules to effectuate the preservation, distribution, accessibility, and availability of state depository publications in electronic format. The rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

§ 12-6-116. Copies of acts — Acts on the internet.

The secretary of state is authorized to furnish to any person, firm, or corporation, so requesting in writing, copies of the public acts of the general assembly which are prepared at intervals during and after each legislative session and made available online pending publication of the bound volumes of the public acts of Tennessee, for that session. Notwithstanding any other law, the secretary of state is authorized to fulfill this chapter and § 8-3-104 by publishing the text of the public acts in electronic form by use of the internet.

§ 12-6-117. Certain resolutions not to be printed or distributed — Distribution to state library and archives and legislative reference and law library.

(a) Notwithstanding any law to the contrary, resolutions of the general assembly that honor or commend individuals or groups or that express sympathy or condolences upon the death of an individual shall not be printed in the Acts of Tennessee, nor shall such resolutions be distributed in accordance with this chapter, unless the secretary of state, in consultation with the speaker of the senate and speaker of the house of representatives, determines that the resolution requires printing due to the prominence of or contributions made by such person or group. The secretary of state shall publish all resolutions in electronic form by use of the internet.
(b) The secretary of state shall deliver one (1) copy of all resolutions that are not printed pursuant to this section to the state library and archives and to the legislative reference and law library.

§ 12-6-118. Automatic and other distributions.

Except for exchange and depository copies provided for herein, there shall be no automatic distribution of any state report or publication, unless such distribution is required by an act or resolution enacted after May 25, 1984. Any other distribution must be approved by the state publications committee, as provided for in chapter 7, part 1 of this title, or be upon individual request of a person entitled to or desirous of receipt of any such publication or report.

§ 12-6-119. Electronic general assembly journals.

Copies of the journals of the house of representatives and the senate may be distributed to depository libraries in electronic format rather than in bound volumes.

Chapter 7 State Publications Committees

Part 1 General Provisions

§ 12-7-101. Control of cost and proliferation of publications and reports — Permanent record of publications.

In order to control the cost and proliferation of publications and reports printed by state agencies, the commissioner of general services shall provide a permanent record of publications issued by state government and shall have authority to issue regulations implementing provisions concerning designation in such a manner as to provide for maximum continuity of the publications.

§ 12-7-102. Duties of commissioner of general services.

(a) It is the duty of the commissioner of general services to establish rules and regulations to control the costs and quantity of all publications, and to promulgate rules and regulations governing the printing and distribution of state agency reports and publications issued by agencies and departments of the government of this state, excluding institutions of higher education, the judicial branch of state government and those state institutions and facilities exempted from public purchase laws in § 12-3-103. For purposes of this part, rules of the publications committee in existence on May 1, 2008, shall be deemed rules of the commissioner of general services.
(b) The rules and regulations on distribution shall include a provision stipulating that there shall be no automatic distribution of reports or publications, except the distribution provided for in chapter 6 of this title, or otherwise by law or resolution enacted after May 25, 1984, but that all distributions must either be approved in general by the commissioner of general services or be made upon request by the recipient.
(c) It also is the duty of the commissioner of general services to establish a procedure for reviewing all publications as defined in subsection (e), and to approve or disapprove the printing of existing publications and planned publications that come under this part.
(d) The commissioner of general services shall determine the need for existing and planned publications based upon the agency's goals and purpose or statutory requirements, and the quantity and distribution of each approved publication.
(e) “Publications” includes any newsletter, stationery, greeting card, report or printed material produced for distribution outside the department or agency for which the report or printed material is printed, including those printed at facilities not operated by the state.
(f) The commissioner of general services may appoint a designee to fulfill the responsibilities laid out in this section.

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§ 12-7-103. Approval required.

(a) No publication, coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, shall be printed unless it has been approved in accordance with rules promulgated by the commissioner of general services. Rules set forth by the commissioner of general services shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(b) The commissioner of general services shall require any publication printed to include the number of copies printed.
(c) The commissioner of general services shall not approve any publication that purports to contain a citation to or a reproduction of a duly promulgated agency rule, as defined by the Uniform Administrative Procedures Act, in § 4-5-102, prior to receiving a written statement from the secretary of state or the secretary of state's representative verifying the fact that the rule so cited or reproduced has been duly promulgated and is currently in effect.
(d) A printing authorization number shall be assigned to each publication that has been approved as required by this section. The printing authorization number shall be affixed to the publication adjacent to the identification of the agency responsible for the publication. No printing facility operated by the state shall print any publication, coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, unless the printing authorization number has been affixed as required by this subsection (d). No contract shall be entered into, nor requisition issued, nor acted upon, by any state department or agency, including, but not limited to, the division of purchasing, for printing of any publication coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, at any facility, unless the printing authorization number has been affixed as required by this subsection (d). All state contracts or grant agreements, including, but not limited to, all contracts for personal, professional and consultant services entered into under former §§ 12-4-109 and 12-4-110 [repealed], that involve or may involve the printing of any publication, coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, shall contain a provision whereby the contractor or grantee agrees that no publication shall be printed unless a printing authorization number has been obtained and affixed as required by this section.
(e) Whenever any department, institution or agency of the state government contracts for the printing of a publication coming within the jurisdiction of the commissioner of general services as provided by § 12-7-102, and the publication has not been approved in accordance with rules promulgated by the commissioner of general services, the contract shall be void and of no effect.

§ 12-7-104. Publications information required.

The commissioner of general services shall, as a minimum, keep the following information on each approved publication:
1. (1) Name of publication;
2. (2) Department producing publication;
3. (3) Purpose and brief description of publication contents;
4. (4) Number of copies authorized to be printed;
5. (5) A general list of distribution; and
6. (6) Estimated cost of preparation and printing.

§ 12-7-105. Requested material to be provided — Cooperation required.

It is the duty of all departments, institutions or agencies of state government to furnish to the commissioner of general services all material requested from the commissioner regarding publications and reports.

§ 12-7-106. [Repealed]

§ 12-7-107. Approval procedure.

The approval procedure for publications established under this part may allow one-time approval of a publication that is printed on a periodic basis and that conforms to the format, design, and purpose of the publication as originally presented to the commissioner of general services for approval without requiring review and approval of subsequent issues of the publication.

§ 12-7-108. Exceptions to Part.

The requirements of this part do not apply to any student newspaper publication or annuals and/or yearbooks.

Part 2 Use of Alkaline Paper

§ 12-7-201. Legislative findings and declarations.

The general assembly finds and declares that the use of alkaline paper for the publication of state records and documents of enduring value is a social and moral imperative to preserve our collective knowledge and heritage for the future. To this end, the general assembly declares it to be the public policy of this state to utilize alkaline paper in the printing and/or publication of permanent state records and documents whenever feasible.

§ 12-7-202. State records and documents to be printed on alkaline paper.

Each department, board, commission, agency or other entity of state government, including state institutions of higher education, shall use alkaline paper that meets or exceeds the American National Standards Institute standard for permanent paper for printed library materials (ANSI Z39.48), as approved by the commissioner of general services, for the printing or publication of all permanent state records or documents.

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12-7-203

§ 12-7-203. Administration and enforcement — Approved list of alkaline papers.

The commissioner of general services is charged with the responsibility of administering and enforcing this part. The commissioner of general services shall provide to each department, board, commission, agency or other entity of state government an approved list of alkaline papers that meet or exceed the standard for permanent paper established in § 12-7-202.

§ 12-7-204. County and municipal governments.

The general assembly further urges and encourages all county governments, municipal governments and other local governmental entities to utilize alkaline paper that meets the ANSI Z39.48 standard when such governments print and/or publish public records and documents of enduring value.

§ 12-7-205. Rules and regulations.

The commissioner of general services is authorized to promulgate rules and regulations to effectuate the purposes of this part. All such rules and regulations shall be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

§ 12-7-206. Construction with § 20-6-103.

Nothing in this part shall be construed to supersede § 20-6-103. To the extent that this part is in conflict with § 20-6-103, § 20-6-103 shall control.

Chapter 8 Sale of Products

§ 12-8-101. Local government ownership and operation of hot mix asphalt facility or aggregate production facility.

(a) Notwithstanding any other provision of law to the contrary, local governments may, individually or jointly, own or operate a facility for the manufacture or production of hot mix asphalt, in accordance with the restrictions and limitations provided for in this section.
(b)
1. (1) A local government desiring to own or operate a hot mix asphalt facility shall prepare a financial feasibility study, referred to as “study” in this section, that analyzes all appropriate costs and benefits related to the operation of the plant.
2. (2) The study required by this section shall be prepared in compliance with generally accepted governmental accounting and financial reporting standards and shall include the following:
  1. (A) Accurate production cost estimates, including debt service and depreciation on the asphalt plant and necessary ancillary equipment, and all other fixed and variable plant operating costs, including, but not limited to, capital cost of equipment and installation, land acquisition, personnel costs, employer fixed costs, materials, transportation, utility costs and all costs associated with environmental and safety compliance standards. This report shall be completed in general compliance with the comptroller of the treasury's asphalt production cost models;
  2. (B) An estimate of the potential cost savings in materials and transportation and operational costs that may be realized by the local government operating the proposed facility, including a record of competitive bids, F.O.B. at plant, for asphalt that the local government or governments have received in recent years, including the current year, and an examination of bids received by comparable local governments;
  3. (C) An estimated need for paving or hot mix asphalt for fifteen (15) years that demonstrates that the local government or governments would produce the volume necessary to realize a cost savings by owning or operating an asphalt facility;
  4. (D) Offers from suppliers of the necessary raw materials showing that those suppliers will sell materials to the local government or governments at competitive prices, and the locations of those suppliers; and
  5. (E) Estimates of whether the operation of a facility by the local government would have a significant impact on the local economy and state and local tax revenues, including sales and use tax, local option sales tax, mineral severance tax, business tax, and real and personal property tax.
(c)
1. (1) Whenever a local government proposes to own or operate a hot mix asphalt facility pursuant to this section and develops the feasibility study required by subsection (b), such study shall be submitted for review to a financial feasibility oversight committee, referred to as the “committee” in this section. The committee shall consist of three (3) members. One (1) member shall be selected by the Tennessee Road Builders Association; one (1) member shall be selected by the Tennessee County Highway Officials Association; and one (1) member shall be selected by the comptroller of the treasury. All expenses relating to the committee shall be solely and equally shared by the Tennessee Road Builders Association and the Tennessee County Highway Officials Association.
2. (2) Once a feasibility study has been prepared by a local government, a copy of such study shall be delivered to the comptroller of the treasury and a copy shall be provided to the mayor or chief executive officer of the local government to be made available to the public for inspection and review. Within fifteen (15) days of receiving the study, the comptroller shall notify the Tennessee Road Builders Association and the Tennessee County Highway Officials Association of the need for a committee to be appointed and shall name the comptroller's appointee to the committee. Within fifteen (15) days of receiving notice from the comptroller, the Tennessee Road Builders Association and the Tennessee County Highway Officials Association shall name their appointees to the committee. Committee members shall receive a copy of the committee report immediately upon designation of membership. Within thirty (30) days of the appointment of the committee, the mayor or chief executive officer of the local government desiring to own or operate a hot mix asphalt facility shall establish a meeting date for the committee. Not less than ten (10) days prior to the meeting, the local government shall provide public notice of the date, time and location of the meeting in a newspaper of general circulation in the jurisdiction of the government where the facility is proposed. The meetings of the committee shall be open to the public and all records of the committee shall likewise be open to public inspection. The member of the committee appointed by the comptroller shall serve as chair of the committee and conduct the meetings of the committee.
3. (3) The sole function of the financial feasibility oversight committee shall be to review the feasibility study, to determine that all appropriate ordinary and necessary capital and operational costs for a local government to own and operate a hot mix asphalt manufacturing facility have been included in the study and have been publicly disclosed.
4. (4) Once the review has been completed, the feasibility oversight committee shall either:
  1. (A) Approve the study, if, in the determination of the committee, the study includes all significant costs and accurately estimates the costs and benefits of owning and operating a facility; or
  2. (B) Disapprove the study, if, in the determination of the committee, the study is incomplete and lacks substantial information to provide an accurate estimate of the costs and benefits of owning or operating a plant.
5. (5) If the committee determines that the feasibility study is incomplete, the committee shall indicate in writing those items that the study lacks and shall return the study to the submitting entity for modification and resubmission. If, after a second resubmission, a majority of the committee still determines that the study is incomplete, the study shall then be forwarded to the governing body of the submitting entity with a negative recommendation from the committee and shall include written comments indicating those areas where the study is insufficient.
6. (6) The determination of the committee shall be forwarded to the governing body of the government or governments desiring to own or operate the facility within thirty (30) days after the committee meets to review the study.
7. (7) If the membership of the feasibility oversight committee does not unanimously agree as to whether the study is sufficient, the committee shall forward two (2) written reports to the local governing body, stating the majority and minority positions of the committee and indicating the reasons why the members of the committee approve or disapprove of the study.
(d) After receiving the report of the financial feasibility oversight committee, the governing body shall examine the feasibility study, all supporting documentation and the determination and written comments of the oversight committee, and shall approve or deny any action to acquire an asphalt facility in a resolution or ordinance passed by a two-thirds (⅔) vote of the governing body, before the local government expends any public funds for the purpose of acquiring a hot mix asphalt facility.
(e) For the purpose of this section, the term “local government” is defined to include any county or incorporated municipality. Two (2) or more local governments may own or operate a facility jointly. For jointly owned or operated facilities, all local governments desiring to participate in the operation of the facility must be a part of the initial feasibility study for the facility.
(f) Any unit of local government owning or operating a facility for the manufacture or production of hot mix asphalt shall comply with any state rule, regulation or standard for the quality of asphalt used in the construction of roads, streets or highways.
(g) Nothing in this section shall be considered a limitation or prohibition on the state or any political subdivision, including counties and municipalities, from expanding, replacing, altering or continuing any plant or facility for the manufacture or production of hot mix asphalt in existence on March 29, 1976. This section shall not apply to a metropolitan government, and nothing in this section shall be construed as limiting the authority of a metropolitan government to own or operate a plant or facility for the production or manufacture of hot mix asphalt.
(h) For any local government owning or operating a plant or facility for the production or manufacture of asphalt pursuant to the authority granted by this section, the comptroller of the treasury, or a private auditor or firm approved by the comptroller, shall conduct an annual audit of such facility regularly, on a time interval to be determined by the comptroller.
(i) Asphalt produced in a facility operated by any local government, pursuant to the authority granted in this section, shall be used exclusively for paving of public streets, roads or highways under the discretion and control of that unit of local government. Each unit of local government operating a facility, pursuant to the authority granted in this section, shall keep a detailed inventory and record that complies with generally acceptable governmental accounting standards, of where all asphalt products produced by the facility are used.
(j) A local government that owns or operates an asphalt facility shall be required to solicit bids annually for hot mix asphalt products. In advertising for bids, the local government shall explicitly reserve the right to reject any and all bids. The local government shall have the undisputed authority to reject all bids and continue to utilize its own asphalt facility for all or a portion of its asphalt needs. The requirements of this subsection (j) shall not apply to any local government that owns or operates an asphalt facility on June 7, 2005.
(k) A local government that does not own or operate an aggregate production facility, such as a quarry or other facility for the production of crushed limestone, commercial lime, agricultural lime, sand, gravel, or any other product resulting from the processing of aggregate on June 7, 2005, shall be prohibited from acquiring such facility, unless the local government prepares a financial feasibility study comparable to the one required in subsection (b) for asphalt facilities, and submits the study for review to the oversight committee established in subsection (c). The procedures for review and approval of the study shall be substantially the same as that for asphalt facilities and all other costs that are specific to an aggregate production facility. The acquisition of such facility shall also require the passage of a resolution or ordinance by a two-thirds (⅔) vote of the governing body of the local government. The aggregate production facility owned or operated by a local government may transfer aggregate only to an entity of that local government; provided, that the governing body of the local government that operates the facility first conducts a study to determine the actual costs of producing the materials and requires reimbursement of actual costs to the unit of local government operating the aggregate production facility.

§ 12-8-102. Penalty — Injunctive relief.

Any state, county, or municipal officer violating this chapter, or knowingly permitting any provision of such chapter to be violated, commits a Class C misdemeanor. In addition to such penalty, injunctive relief may be had against a violator of this chapter by petition addressed to the chancellor of the judicial district in which such violation is alleged to have taken place.

§ 12-8-103. Gratuitous work for nonprofit organizations — Sales to farmers.

Nothing in this chapter shall prohibit or be construed as prohibiting the county road commission, the state, or any municipality or its agents, from doing work gratuitously for cemeteries, churches, schools, and any other charitable nonprofit organization, or from making sales of agricultural lime to farmers for use in connection with their own farming activities.

Chapter 9 Interlocal Cooperation Act

§ 12-9-101. Short title.

This chapter may be cited as the “Interlocal Cooperation Act.”

§ 12-9-102. Purpose.

It is the purpose of this chapter to permit local governmental units the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage and thereby provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population, and other factors influencing the needs and development of local communities.

§ 12-9-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:
1. (1) “Local government entity” means any city, town, municipality, county, including any county having a metropolitan form of government, local education agency, development district, utility district, human resource agency or other political subdivision of this state;
2. (2) “Local government joint venture entity” means any entity created pursuant to this chapter, including, but not limited to, a self-insurance pool, trust, joint venture, nonprofit organization, or any other type of organization that is sponsored, owned, operated, or governed by two (2) or more local government entities as a separate and specific activity;
3. (3) “Public agency” means:
  1. (A) Any political subdivision of this state;
  2. (B) Any private incorporated fire department and industrial fire department not supported by public funds or which are only partially supported by public funds;
  3. (C) Any incorporated rescue squad that is not supported by public funds or that is only partially supported by public funds;
  4. (D) Any agency of the state government or of the United States; and
  5. (E) Any political subdivision of another state; and
4. (4) “State” means a state of the United States.

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7-39-312(1)

§ 12-9-104. Interlocal agreements.

(a)
1. (1) Any power or powers, privileges or authority exercised or capable of exercise by a public agency of this state, including those provided in § 6-54-307 or § 68-221-1107(b), may be exercised and enjoyed jointly with any other public agency of this state having the power or powers, privilege or authority, and jointly with any public agency of any other state or the United States to the extent that laws of such other state or of the United States permit such joint exercise or enjoyment. Any agency of the state government when acting jointly with any public agency may exercise and enjoy all of the powers, privileges and authority conferred by this chapter upon a public agency. The authority for joint or cooperative action of political subdivisions shall apply to powers, privileges or authority vested in, funded by, and/or under the control of their governing bodies and relative to which the governing bodies may make other types of contracts. No joint or cooperative agreement shall be entered into affecting or relating to the constitutional or statutory powers, privileges or authority of officers of political subdivisions, or of agencies of political subdivisions with a separate governing board and having powers granted by statute independent of the governing body. Notwithstanding any provision of the law to the contrary, any municipality may enter into an agreement with the sheriff, court of general sessions, and the governing body of any county in which it is located to provide for the enforcement of the municipality's ordinances according to §§ 8-8-201(a)(34) and 16-15-501. The agreement between the municipality and the county governing body shall be limited to provide that the cost of such enforcement will be borne by the municipality where the court costs paid over to the county, as provided by § 16-15-501, are not adequate.
2. (2) Agencies of political subdivisions that have governing boards separate from the governing bodies of the political subdivisions may make agreements for joint or cooperative action with other such agencies and with other public agencies. The power to make joint or cooperative agreements includes any power, privilege or authority exercised or that may be exercised by each of the agencies that is a party to the agreement. Agreements between agencies of political subdivisions that have separate governing boards and other such agencies and agreements between such agencies and public agencies shall substantially conform to the requirements of this chapter. The governing bodies of such political subdivisions shall require agreements made by their agencies pursuant to this chapter to be submitted to the governing body for approval before the agreements take effect.
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- 29-20-401(b)(2)
(b) Any two (2) or more public agencies may enter into agreements with one another for joint or cooperative action pursuant to this chapter. Appropriate action of the governing bodies of the participating public agencies by resolution or otherwise pursuant to law shall be necessary before any such agreement may enter into force.
(c) Any such agreement shall specify the following:
1. (1) Its duration;
2. (2) The precise organization, composition and nature of any separate legal or administrative entity or entities created thereby, which may include, but is not limited to, a corporation not-for-profit, together with the powers delegated to such a corporation;
3. (3) Its purpose or purposes;
4. (4) The manner of financing the joint or cooperative undertaking and of establishing and maintaining a budget for such undertaking;
5. (5) The permissible method or methods to be employed in accomplishing the partial or complete termination of the agreement and for disposing of property upon such partial or complete termination; and
6. (6) Any other necessary and proper matters.
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- 29-20-401(b)(4)
- 65-36-107
(d) In the event that the agreement does not establish a separate legal entity or entities to conduct the joint or cooperative undertaking, the agreement shall, in addition to the requirements of subdivisions (c)(1)-(6), contain the following:
1. (1) Provision for an administrator or a joint board responsible for administering the joint or cooperative undertaking. In the case of a joint board, public agencies party to the agreement shall be represented; and
2. (2) The manner of acquiring, holding and disposing of real and personal property used in the joint or cooperative undertaking.
(e)
1. (1) No agreement made pursuant to this chapter shall relieve any public agency of any obligation or responsibility imposed upon it by law, except that, to the extent of actual and timely performance thereof by a joint board or other legal or administrative entity or entities created by an agreement made hereunder, those performances may be offered in satisfaction of the obligation or responsibility.
2. (2)
  1. (A) Notwithstanding the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21, including § 9-21-105 and § 9-21-107 to the contrary, a separate legal or administrative entity, created by interlocal agreement between two (2) or more political subdivisions of the state acting pursuant to this chapter, is not empowered to:
    1. (i) Assess, levy, or collect ad valorem taxes;
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      9-21-105(15)(B)(iii)
    2. (ii) Issue general obligation bonds; or
    3. (iii) Exercise the power of eminent domain.
  2. (B) However, to the extent that the participating political subdivisions possess such powers, the political subdivisions may exercise such powers on behalf and for the benefit of the separate legal or administrative entity.
(f) Financing of joint projects by agreement shall be as provided by law.

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§ 12-9-105. Status of agreements — Parties to actions.

In the event that an agreement entered into pursuant to this chapter is between or among one (1) or more public agencies of this state and one (1) or more public agencies of another state or of the United States, the agreement shall have the status of an interstate compact, but in any case or controversy involving performance or interpretation thereof or liability thereunder, the public agencies party thereto shall be real parties in interest and the state may maintain an action to recoup or otherwise make itself whole for any damages or liability which it may incur by reason of being joined as a party therein. Such action shall be maintainable against any public agency or agencies whose default, failure of performance, or other conduct caused or contributed to the incurring of damage or liability by the state.

§ 12-9-106. Approval or disapproval.

In the event that an agreement made pursuant to this chapter shall deal in whole or in part with the provision of services or facilities with regard to which an officer or agency of the state government has constitutional or statutory powers of control, the agreement shall, as a condition precedent to its entry into force, be submitted to the state officer or agency having such power of control and shall be approved or disapproved by such state officer or agency as to all matters within such officer's or agency's jurisdiction.

§ 12-9-107. Appropriations — Furnishing of property, personnel and service.

Any public agency entering into an agreement pursuant to this chapter may appropriate funds and may sell, lease, give, or otherwise supply the administrative joint board or other legal or administrative entity created to operate the joint or cooperative undertaking by providing such personnel or services therefor as may be within its legal power to furnish.

§ 12-9-108. Interlocal contracts for performance of services.

Any one (1) or more public agencies may contract with any one (1) or more public agencies to perform any governmental service, activity or undertaking which each public agency entering into the contract is authorized by law to perform; provided, that such contract shall be authorized by the governing body of each party to the contract. Such contract shall set forth fully the purposes, powers, rights, objectives, and responsibilities of the contracting parties. Contracts entered into pursuant to this section need not conform to the requirements set forth in this chapter for contracts for joint undertakings.

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7-39-312(1)

§ 12-9-109. Contracts under other laws unaffected.

Nothing in this chapter shall prohibit any public agency from contracting with other public agencies under existing statutory or charter authority.

§ 12-9-110. Contracts for conveyance of property.

(a) Any one (1) or more public agencies may contract with any one (1) or more public agencies for the conveyance or transfer of property, real or personal, if:
1. (1) The public agency or agencies receiving the conveyance or transfer utilizes the property for a public purpose; and
2. (2) The governing body of each public agency that is a party to the contract authorizes such conveyance or transfer and determines that the terms and conditions set forth are appropriate.
(b) Any public agency utilizing the authority of this section shall not be required to declare such property surplus prior to the conveyance or transfer, and shall also be exempt from contrary requirements in any budget or purchasing act, public or private.

§ 12-9-111. Filing of interlocal agreements forming local government joint venture.

Any interlocal agreement entered into by local government entities that creates a local government joint venture entity shall be filed in the office of the comptroller of the treasury within ninety (90) days of execution of the agreement. Any interlocal agreement entered into by local government entities of this state that created a local government joint venture entity that is in effect on June 20, 2006, shall be filed with the office of the comptroller of the treasury within one hundred twenty (120) days of June 20, 2006.

§ 12-9-112. Annual statement on interlocal agreements that create local government joint venture entity.

(a) Any local government joint venture entity shall, during the term of the agreement, file an annual statement with the office of the comptroller of the treasury. The statement shall set forth the names of all parties to the agreement, the annual revenue and expenses of any entity created under the agreement and the other information required by the comptroller.
(b) The comptroller of the treasury may develop guidelines in furtherance of the administration of this section.

Chapter 10 Public Building Authorities Act of 1971

§ 12-10-101. Short title.

This chapter shall be known and may be cited as the “Public Building Authorities Act of 1971.”

§ 12-10-102. Purposes — Liberal construction.

(a)
1. (1) It is hereby found and declared that there exist in many municipalities within this state inadequate and outmoded public buildings, structures, and facilities for the furnishing of governmental, educational and other public services and for use in the conduct of government by the various branches, departments and agencies thereof; that in many cases, by reason of the age and physical condition of such public buildings, structures and facilities and the increased activities on the part of both the citizens and government, such facilities are no longer adapted or adequate to meet the needs of the growing population; that, as a consequence thereof, there are many counties, cities and towns, and other branches and agencies of state and local government within the state which are compelled to spend large sums of money annually in the rental, operation and maintenance of additional building space to house the various branches, departments and agencies of government to meet this ever increasing need; that, as a result thereof, in many of the counties, cities and towns within this state, the public buildings housing the various branches, departments and agencies of government are widely scattered and dispersed throughout the locality, thereby resulting in reduced efficiency of operation in the necessary intergovernmental activities of the various branches and agencies of government; that many public records, wills, conveyances, vital statistics, court decrees, and other similar documents in use in the conduct of daily business, are now filed in poorly protected and overcrowded spaces and at widely separated locations by reason of the lack of an adequate public building or buildings; that the rendering of governmental, health, safety, educational, and welfare services is adversely affected by reason thereof, to the detriment of the citizens in such counties, cities and towns; that the shortage of adequate buildings, structures and facilities impairs the efficient and economical governmental functions of the various branches and agencies of government and the rendering of governmental, educational, health, safety, and welfare services; that in many instances it is not feasible for the various branches and agencies of government to make capital expenditures for the purpose of constructing or acquiring public buildings, structures or facilities and there are not otherwise available buildings, structures or facilities for rent for public purposes; that in many instances effective cooperation between various units of government in providing adequate facilities for the rendering of public services has been hampered because of inadequate statutory authority therefor; and in order to eradicate these conditions, it is hereby found and declared to be necessary and desirable to make possible the construction, acquisition, or enlargement of public buildings, structures, and facilities, hereafter in this chapter referred to as “projects,” to be made available for use by municipal corporations and other public lessees at convenient locations within the counties, cities and towns, in the efficient and economical furnishing of governmental, educational, health, safety, and welfare services to the citizens of such counties, cities and towns; and the eradication of the aforementioned conditions by the passage of this chapter to authorize the incorporation in the several counties, cities and towns of public corporations to finance, acquire, erect, own, operate, maintain, lease, and/or dispose of public buildings, structures, and facilities for the use of the several municipal corporations and other public lessees is hereby declared to be a public use essential to the public interest.
2. (2) It is further found and declared that, in this state and in many municipalities within this state, there exist serious deficiencies in and a need for additional public buildings, structures, facilities, roads, streets, sidewalks and alleys and that such public buildings, structures, facilities, roads, streets, sidewalks and alleys are in need of enlargement and repair, to the end that the quality of life and the health, safety and welfare of the citizens of this state and the municipalities therein will be enhanced and protected and that the transportation of goods and persons and the flow of commerce will thereby be facilitated, and that it is necessary and desirable to make possible the construction, acquisition, enlargement, repair and renovation of such public buildings, structures, facilities, roads, streets, sidewalks and alleys, hereafter also in this chapter referred to as “projects,” to be made available for use by the state of Tennessee or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof, and municipal corporations and other public bodies, and any such undertaking is hereby declared to be a public use essential to the public interest.
(b) This chapter shall be liberally construed in conformity with such intention.

§ 12-10-103. Chapter definitions.

As used in this chapter, unless the context otherwise requires:
1. (1) “Authority” or “public building authority” means any public corporation organized pursuant to this chapter;
2. (2) “Bonds” or “revenue bonds” means bonds, notes, interim certificates or other obligations of an authority issued pursuant to this chapter, or pursuant to any other law, as supplemented by, or in conjunction with, this chapter;
3. (3) “Contracting party” or “other contracting party” means any party to a sale contract or loan agreement except the authority;
4. (4) “Governing body” means the body in which the general legislative powers of a municipal corporation are vested, and in the case of counties means the legislative body of the respective counties;
5. (5) “Lessee” means any municipal corporation, the state of Tennessee, the United States, or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter existing;
6. (6) “Loan agreement” means an agreement providing for an authority to loan the proceeds derived from the issuance of bonds pursuant to this chapter to one (1) or more contracting parties to be used to pay the cost of one (1) or more projects and providing for the repayment of such loan by the other contracting party or parties, and which may provide for such loans to be secured by or evidenced by one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of the contracting party or parties, delivered to the authority or to the trustee under the indenture pursuant to which the bonds were issued;
7. (7) “Municipal corporation” means any county, metropolitan government, incorporated city or town, utility district, school district, power district, sanitary district or other municipal, quasi-municipal or governmental body or political subdivision in this state, and any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter authorized by law to be created;
8. (8) “Municipality” means any county, incorporated city or town or utility district in this state with respect to which an authority may be organized;
9. (9) “Operating contract” means the written undertaking whereby the authority and a municipal corporation contract respecting construction of improvements upon and/or for the operation and maintenance of property owned by or leased by other than the authority to the municipal corporation;
10. (10) “Project” means any undertaking which is eligible to be financed by bonds, notes, interim certificates or other obligations issued pursuant to law by any municipal corporation, the state of Tennessee or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof, but if and only to the extent that they or any one (1) or more of them are participating as a contracting party or party to a lease under this chapter or any other provision of law; provided, that any project undertaken on behalf of the state of Tennessee or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof, shall be subject to the approval of the state building commission, and the financing arrangements for such project shall be subject to the approval of the state funding board. “Project” includes an undertaking whereby a municipal corporation contracts with an authority respecting construction of improvements upon and/or for the operation and maintenance of property owned by or leased by other than the authority to the municipal corporation; provided, that the authority may not borrow money or issue bonds with respect thereto unless the authority has a freehold or leasehold interest in the real estate;
11. (11) “Revenues” of a project, or derived from a project, includes payments under a lease or sale contract and repayments under a loan agreement, or under notes, debentures, bonds and other secured or unsecured debt obligations of a lease or contracting party delivered as herein provided;
12. (12) “Sale contract” means a contract providing for the sale of one (1) or more projects to one (1) or more contracting parties and includes a contract providing for payment of the purchase price in one (1) or more installments. If the sale contract permits title to the project to pass to the other contracting party or parties prior to payment in full of the entire purchase price, it shall also provide for the other contracting party or parties to deliver to the authority or to the trustee under the indenture pursuant to which the bonds were issued one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of such contracting party or parties providing for timely payments, including, without limitation, interest thereon for the balance of the purchase price at or prior to the passage of such title; and
13. (13) “State of Tennessee” means the state of Tennessee and, unless otherwise indicated by the context, any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or hereafter existing.

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§ 12-10-104. Application to governing body for approval of incorporation.

Whenever any number of natural persons, not less than three (3), each of whom shall be a duly qualified elector of the county or of the incorporated city or town or each of whom shall be a current customer of the utility district, shall file with the governing body thereof an application in writing seeking permission to apply for the incorporation of a public building authority of the municipality, the governing body shall proceed to consider the application. If the governing body shall, by appropriate resolution duly adopted, find and determine that it is wise, expedient, necessary or advisable that the authority be formed, and shall authorize the persons making such application to proceed to form such authority and shall approve the form of certificates of incorporation proposed to be used in organizing the authority, then the persons making such application shall execute, acknowledge and file a certificate of incorporation for the authority as hereinafter provided. No authority may be formed unless such application shall have first been filed with the governing body of the municipality and the governing body shall have adopted a resolution as provided in this section.

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§ 12-10-105. Certificate of incorporation — Contents.

(a) The certificate of incorporation shall set forth:
1. (1) The names and residences of the applicants together with a recital that each of them is an elector of the county or of the incorporated city or town or is a customer of the utility district.
2. (2) The name of the authority which shall be public building authority of the of (the blanks to be filled in with the name of the municipality);
3. (3) A recital that permission to organize the authority has been granted by resolution duly adopted by the governing body of the municipality and the date of the adoption of such resolution;
4. (4) The location of the principal office of the authority;
5. (5) The purposes for which the authority is proposed to be organized;
6. (6) The number of directors of the authority;
7. (7) The period, which may be perpetual, for the duration of the authority; and
8. (8) Any other matter which the applicants may choose to insert therein which shall not be inconsistent with this chapter or with the laws of this state.
(b) The certificate of incorporation shall be subscribed and acknowledged by each of the applicants before an officer authorized by the laws of Tennessee to take acknowledgments to deeds.

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12-10-106(a)

§ 12-10-106. Filing and approval of certificate of incorporation.

(a) When executed and acknowledged in conformity with § 12-10-105, the certificate of incorporation shall be filed with the secretary of state.
(b) The secretary of state shall thereupon examine the certificate of incorporation and, if the secretary of state finds that the recitals contained therein are correct, that the requirements of § 12-10-104 have been complied with, and that the name is not identical with or so nearly similar to that of another public building authority already in existence in this state as to lead to confusion and uncertainty, the secretary of state shall approve the certificate of incorporation and record it in an appropriate book or record in the secretary of state's office.
(c) When such certificate has been so made, filed and approved, the authority shall constitute a public corporation under the name set out in the certificate of incorporation.

§ 12-10-107. Amendment of certificate of incorporation.

The certificate of incorporation may at any time and from time to time be amended so as to make any changes therein and add any provisions thereto which might have been included in the certificate of incorporation in the first instance. Any such amendment shall be effected in the following manner: the members of the board of directors of the authority shall file with the governing body of the municipality with which the application for the creation of the authority was filed, an application in writing seeking permission to amend the certificate of incorporation, specifying in such application the amendment proposed to be made. Such governing body shall consider such application and, if it by appropriate resolution duly finds and determines that it is wise, expedient, necessary or advisable that the proposed amendment be made, and authorizes the same to be made, and approves the form of the proposed amendment, then the persons making such application shall execute an instrument embodying the amendment specified in such application, and shall file the same with the secretary of state. The proposed amendment shall be subscribed and acknowledged by each member of the board of directors before an officer authorized by the laws of Tennessee to take acknowledgments to deeds. The secretary of state shall thereupon examine the proposed amendment and, if the secretary of state finds compliance with the requirements of this section, and the proposed amendment is within the scope of what might be included in an original certificate of incorporation, the secretary of state shall approve the amendment and record it in an appropriate book in the secretary of state's office. When such amendment has been so made, filed and approved, it shall thereupon become effective and the certificate of incorporation shall thereupon be amended to the extent provided in the amendment. No certificate of incorporation shall be amended except in the manner provided in this section.

§ 12-10-108. Board of directors — Executive committee — Administrator — Consent action.

(a)
1. (1) The authority shall have a board of directors in which all corporate powers of the authority shall be vested and which shall consist of any number of directors, no less than seven (7), all of whom shall be duly qualified electors of the municipality. The directors shall serve as such without compensation, except that they shall be reimbursed for their actual expenses incurred in and about the performance of their duties hereunder. No director shall be an officer or employee of the municipality. The directors shall be appointed by the chief executive officer, subject to confirmation of the governing body of the municipality, and they shall be so appointed that they shall hold office for staggered terms. In the case of authorities created pursuant to the approval of two (2) or more municipalities acting jointly, as hereinafter provided, the number of directors appointed by the chief executive officer of each municipality shall be as nearly equal as practicable. At the time of the appointment of the first board of directors, the chief executive officer of the municipality shall divide the directors into three (3) groups containing as near equal whole numbers as may be possible. The first term of the directors included in the first group shall be two (2) years, the first term of the directors included in the second group shall be four (4) years, the first term of the directors included in the third group shall be six (6) years, and thereafter the terms of all directors shall be six (6) years; provided, that if at the expiration of any term of office of any director a successor thereto shall not have been appointed, then the director whose term of office shall have expired shall continue to hold office until such director's successor shall be so appointed.
2. (2)
  1. (A) Notwithstanding any provision of subdivision (a)(1) or any other law to the contrary, if a public building authority engages in or contracts for the modification, construction, operation, maintenance, or management of an arena facility for a National Basketball Association member professional basketball team, then the board of directors appointed and confirmed pursuant to subdivision (a)(1) must include two (2) additional directors whose qualifications, appointment and service shall be governed by this subdivision (a)(2). Following consultation with the speaker of the senate and the speaker of the house of representatives, the chief executive officer of the municipality shall appoint, subject to confirmation of the governing body of the municipality:
    1. (i) One (1) state senator whose legislative district lies, in whole or in part, within the boundaries of the municipality; and
    2. (ii) One (1) state representative whose legislative district lies, in whole or in part, within the boundaries of the municipality.
  2. (B) The term of office for each director appointed pursuant to this subdivision (a)(2) shall not extend beyond the director's current term of office in the state senate or house of representatives. Each director appointed pursuant to this subdivision (a)(2) shall serve as such without compensation, except that such director shall be reimbursed for such director's actual expenses incurred in and about the performance of such director's duties hereunder. Notwithstanding the fact that two (2) or more municipalities may have approved incorporation of the public building authority pursuant to § 12-10-104, this subdivision (a)(2) shall not be construed to require appointment of more than one state senator and one state representative to serve as directors; and, under such circumstances, the chief executive officers of the municipalities shall jointly make such appointments, subject to confirmation of the governing bodies of the municipalities.
3. (3) Notwithstanding subdivision (a)(1) or any other law to the contrary, the directors of an authority created by a utility district shall be customers of the utility district and members of the board of commissioners and employees of the utility district may serve as a director.
4. (4) Notwithstanding subdivision (a)(1) or any other law to the contrary, the directors of an authority created jointly by two (2) or more utility districts pursuant to § 12-10-120 must either be a customer of one of the creating utility districts or a member of the board of directors of the Tennessee association of utility districts. The directors shall be appointed by the board of commissioners of each creating utility district with the number of directors appointed by each board of commissioners to be as nearly equal as practicable. The directors shall be appointed so that they have staggered terms. At the time of the appointment of the first board of directors, the boards of commissioners of the creating utility districts shall divide the directors into three (3) groups containing as near equal whole numbers as may be possible. The first term of the directors included in the first group shall be two (2) years, the first term of the directors included in the second group shall be four (4) years, the first term of the directors included in the third group shall be six (6) years, thereafter the terms of all directors shall be six (6) years; provided, that, if at the expiration of any term of office of any director a successor to the director has not been appointed, then the director whose term of office has expired shall continue to hold office until the director's successor has been so appointed. The term of office of each director who is a member of the board of directors of the Tennessee association of utility districts shall not extend beyond the director's term as a director of the Tennessee association of utility districts.
(b) The directors shall meet and organize as a board and shall elect one (1) of its members as chair, one (1) as vice chair, one (1) as treasurer and one (1) as secretary, and such officers shall annually be elected thereafter in like manner. The duties of secretary and treasurer may be performed by the same director. In the absence of any of the chair, vice chair, secretary or treasurer, another member may be elected to fill the vacancy for the anticipated term thereof. Any action taken by the directors under this chapter may be authorized by resolution at any regular or special meeting, and such resolution shall take effect immediately and need not be published or posted. A majority of the board shall constitute a quorum for the transaction of business. The concurring vote of a majority of all the directors shall be necessary for the exercise of any of the powers granted by this chapter.
(c) The board of directors may establish an executive committee to be composed of officers designated in subsection (b) and at least one (1) other director. Except as may be limited by the board of directors, the executive committee shall have responsibility for the general superintendence of the administrative affairs of the authority. It shall have the power to employ, discharge, and, within budgeted or otherwise available funds, to compensate regular and part-time employees of the authority; to authorize contracts for the operation and maintenance of projects, which contracts shall be for a period not exceeding one (1) year in duration and for which funds have been budgeted or otherwise provided by the board of directors; to manage and operate parking facilities; within available funds, to provide operating and maintenance services respecting a project; and to administer contracts and undertakings of the authority. The executive committee shall keep minutes and supply a copy of the same to each director. Action shall be by an affirmative vote of a majority of the executive committee. All actions of the executive committee may be reviewed by the board of directors except as to rights of contractees which have accrued.
(d) The board of directors may establish the position of administrator. The administrator may be employed by the board of directors to perform the administrative duties of the authority within the authority granted by the board of directors and/or the executive committee. Except as otherwise directed, the administrator may establish responsibilities of employees of the authority and supervise their performance, including the power, within budgeted or otherwise available funds, to hire and to discharge regular and part-time employees; and, subject to direction of the secretary and treasurer, have responsibility for the records and accounts of the authority.
(e) If authorized by the charter and bylaws, the board of directors and the committee thereof may take action by written consent. The bylaws shall require copies of such consent actions to be provided forthwith to each director.

§ 12-10-109. Powers of authorities.

(a) Each public building authority created pursuant to this chapter shall be a public nonprofit corporation and a public instrumentality of the municipality with respect to which the authority is organized. The authority has the following powers, together with all powers incidental thereto or necessary for the performance of those hereinafter stated, to:
1. (1) Have succession by its corporate name for the period specified in the certificate of incorporation unless sooner dissolved as hereinafter provided;
2. (2) Sue and be sued and prosecute and defend, at law or in equity, in any court having jurisdiction of the subject matter and of the parties;
3. (3) Have and use a corporate seal and alter the same at pleasure;
4. (4) Acquire, whether by purchase, construction, exchange, gift, lease or otherwise, and improve, repair, extend, equip, furnish, operate and maintain one (1) or more projects, which projects may be within or without the municipality or municipalities with respect to which the authority shall have been created, including all real and personal properties which the board of directors of the authority may deem necessary in connection therewith, and regardless of whether or not any such projects shall then be in existence, and including the power to demolish such existing structures as may be on sites acquired when such structures are not needed for the project;
5. (5) Pave and improve streets within the area of a project and construct, repair and install sidewalks, sewers, gutters, water mains and other similar improvements and facilities in the area, and provide offstreet parking facilities in connection with any project;
6. (6) Operate, maintain, manage, and enter into contracts for the operation, maintenance and management of any project undertaken, and make rules and regulations with regard to such operation, maintenance and management;
7. (7) Employ, contract with, fix the compensation of, and discharge engineering, architectural, legal and financial experts and such other employees, both professional and other, as may be necessary to carry out the purposes of this chapter and provide for the proper operation and maintenance of any project;
8. (8) Lease all or any part or parts of any project to any lessee and execute written leases therefor, for any period of time not to exceed forty (40) years, and charge and collect rent therefor and terminate any such lease upon the failure of the lessee to comply with any of the obligations thereof; and include in or exclude from any such lease, provisions that the lessee shall have the option to renew the term of the lease for such period or periods and at such rent as shall be determined by the board of directors, that such lessee may purchase the project being leased or that upon payment of the indebtedness of the authority incurred with respect to such project, it may lease or convey any or all of its projects to the lessee or lessees thereof with or without consideration;
9. (9) Lease such space in a project as from time to time may not be needed by any lessee to any other person, corporation, partnership or association for such purposes as the board of directors may determine will best serve the comfort and convenience of the occupants of such project and upon such terms and in such manner as the board may determine;
10. (10) Sell, exchange, donate and convey any or all of its properties whenever the board of directors shall find any such action to be in furtherance of the purposes for which the authority was organized, and enter into sales contracts with others in connection with the sale of any such properties;
11. (11) Procure and enter into contracts for any type of insurance or indemnity against loss or damage to property from any cause, including loss of use and occupancy, against death or injury of any person, against employer's liability, against any act of any member, officer or employee of the authority in the performance of the duties of such person's office or employment or any other insurable risk, as the board of directors in its discretion may deem necessary;
12. (12) Accept donations, contributions, capital grants or gifts from any individuals, associations, municipal or private corporations, the state of Tennessee and the United States, or any agency or instrumentality thereof, for or in aid of any of the purposes of this chapter and enter into agreements in connection therewith;
13. (13) Borrow money from time to time and in evidence of the obligation thereby incurred to issue and sell its revenue bonds in such amount or amounts as the board of directors may determine to provide funds for the purpose of financing, acquiring, erecting, extending, improving, equipping or repairing any project or for any combination of such purposes, and demolishing structures on the project site and acquiring a site or sites necessary and convenient for such project, including, but without in any way limiting the generality of the foregoing, architectural, engineering, legal, financing and bond insurance expenses, and including an amount sufficient to meet the interest charges on such revenue bonds during construction of any project and for two (2) years after the estimated date of completion; and refund and refinance, from time to time, revenue bonds so issued and sold, as often as may be deemed to be advantageous by the board of directors; and pending the issuance of its revenue bonds for the purposes in this chapter authorized, issue its interim certificates or notes or other temporary obligations;
14. (14) Enter into any agreement or contract with any lessee, who, pursuant to the terms of this chapter, is renting or is about to rent from the authority all or part of any building or buildings or facilities, whereby under such agreement or contract the lessee obligates itself to pay all or part of the cost of maintaining and operating the premises so leased. Such agreement may be included as a provision of any lease entered into pursuant to the terms of this chapter or may be made the subject of a separate agreement or contract between the authority and such lessee;
15. (15) As security for the payment of the principal of and interest on any bonds so issued and any agreements made in connection therewith, mortgage and pledge any or all of its projects or any part or parts thereof, whether then owned or thereafter acquired, and pledge the revenues and receipts therefrom or from any thereof, and/or assign and pledge all or any part of its interest in and rights under the leases, sales contracts or loan agreements relating thereto or any thereof;
16. (16) Exercise all powers expressly given in its certificate of incorporation and establish bylaws and make all rules and regulations not inconsistent with the certificate of incorporation or this chapter deemed expedient for the management of the affairs of the authority;
17. (17) Enter into loan agreements with others with respect to one (1) or more projects for such payments and upon such terms as the board of directors of the authority may deem advisable in accordance with this chapter, including, but not limited to, the following:
  1. (A) The board of directors of the authority may, by appropriate action, request the comptroller of the treasury or the comptroller's designee to review loan agreements entered into between the authority and a municipal corporation; and
  2. (B) If the comptroller of the treasury or the comptroller's designee determines that it is advisable to review the loan agreements pursuant to a request by the authority, then prior to entering into a loan agreement with the authority, the municipal corporation must obtain the approval of the comptroller of the treasury or the comptroller's designee;
18. (18) Sell, lease, transfer or convey any air rights and appropriate easements, including easements for support, ingress and egress, in, above, under or adjacent to property acquired for the construction, maintenance and operation of a project. Sale, lease, transfer or conveyance may be accomplished either by public bid or by private sale in such manner, upon such terms and for such consideration as may be determined by the board of directors to be most advantageous to the authority;
19. (19) Enter into contracts with a municipal corporation respecting construction of improvements upon and/or operation and maintenance of any property owned by or leased by other than the authority to the municipal corporation. Such contracts shall specify the extent and nature of the services to be rendered by the authority; and
20. (20) Have control of its parking facilities with the right and duty to establish and charge fees, rentals, rates and other charges, and collect revenues therefrom, not inconsistent with the rights of the holders of its bonds.
(b) Except as otherwise approved by the comptroller of the treasury, any authority created pursuant to this chapter shall have the power and shall cause to be made an annual audit of the accounts and records of the authority. The audit shall include all funds of the authority whether held by the authority or pursuant to trust indentures. The comptroller of the treasury, through the department of audit, shall be responsible for ensuring that the audits are prepared in accordance with generally accepted governmental auditing standards and determining if the audits meet minimum audit standards which shall be prescribed by the comptroller of the treasury. No audit may be accepted as meeting the requirements of this subsection (b) until such audit has been approved by the comptroller of the treasury. The audits may be prepared by certified public accountants, public accountants or by the department of audit. In the event the authority shall fail or refuse to have the audit prepared, then the comptroller of the treasury may appoint a certified public accountant or public accountant or direct the department of audit to prepare the audit, the cost of such audit to be paid by the authority. All such audits shall be completed as soon as practicable after the end of the authority's fiscal year. One (1) copy of the audit shall be furnished to each member of the board of directors, the chief executive officer of the municipality with respect to which the authority has organized, and the comptroller of the treasury. Copies of each audit shall also be made available to the press.
(c) Any municipal corporation that has submitted a loan agreement to be entered into between the municipal corporation and the authority to the comptroller of the treasury or the comptroller's designee for approval pursuant to this section shall submit an annual budget in a form consistent with accepted governmental standards to the comptroller of the treasury or the comptroller's designee immediately upon its adoption, and each year thereafter, so long as the loan agreement is outstanding.
(d) An authority created by a utility district or jointly created by two (2) or more utility districts under § 12-10-120 shall only have the powers set forth in this section and in this chapter for projects that consist of utility infrastructure, improvements, facilities and buildings that are an integral part of a public utility's operations and that are used by a public utility in providing utility services to its customers.
(e) The powers granted by this chapter may be exercised without regard to requirements, restrictions or procedural provisions contained in § 55-21-105(a) or any other law or charter, except as expressly provided in this chapter.
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- 55-21-105(a)

§ 12-10-110. Acceptance of donations.

(a) For the purpose of aiding and cooperating with an authority, the municipality, with respect to which such authority is created, may assign or loan any of its employees, including its engineering staff and facilities, and may provide necessary office space, equipment, or other facilities for the use of such authority.
(b) The governing body of such municipality and the governing body of any municipal corporation entering into a lease of any project or part or parts thereof may make donations of property, real or personal, or cash grants to the authority in such amount or amounts as it may deem proper and appropriate in aiding the authority to effectuate the purpose for its creation.
(c) Any municipality with respect to which an authority is created and any municipal corporation entering into a lease with an authority, which owns a fee simple title to real property located within the area of any project, may convey such real property, or any part thereof, to the authority and may include a provision in such conveyance for the reverter of such real property to the transferor at such time as all revenue bonds or other obligations of the authority incident to the real property so conveyed shall have been paid in full, and any authority created pursuant to this chapter is hereby authorized to accept such a conveyance.

§ 12-10-111. Bonds of the authority — Issuance — Terms — Refunding — Payment.

(a) Except as herein otherwise expressly provided, all bonds issued by the authority shall be payable solely out of the revenue and receipts derived from the authority's projects or of any thereof as may be designated in the proceedings of the board of directors under which the bonds shall be authorized to be issued, including debt obligations of the lessee or contracting party obtained from or in connection with the financing of a project. Such bonds may be issued in one (1) or more series, may be executed and delivered by the authority at any time and from time to time, may be in such form and denomination and of such terms and maturities, may be subject to redemption prior to maturity either with or without premium, may be in fully registered form or in bearer form registrable either as to principal or interest, or both, may bear such conversion privileges and be payable in such installments and at such time or times not exceeding forty (40) years from the date thereof, may be payable at such place or places whether within or without this state, may bear interest at such rate or rates payable at such time or times and at such place or places and evidenced in such manner, and may contain such provisions not inconsistent herewith, all as shall be provided in the proceedings of the board of directors whereunder the bonds shall be authorized to be issued.
(b)
1. (1) Bonds and notes issued under this chapter in registered form shall be executed in the manner provided for in the Tennessee Public Obligations Registration Act, compiled in title 9, chapter 19.
2. (2) Bonds and notes, and any interest coupons attached thereto, issued under this chapter which are not in registered form shall be executed in the name of the authority by such officers of the authority and in such manner as the board of directors may direct, and shall be sealed with the corporate seal of the authority. If so provided in the proceedings authorizing the bonds or notes, the facsimile signature of any of the officers of the authority may appear on such bonds or notes and a facsimile of the corporate seal of the authority may appear on the bonds or notes in lieu of the manual signature of such officer and the manual impress of such seal; provided, that at least one (1) of the signatures appearing on such bonds or notes shall be a manual signature. Interest coupons attached to such bonds or notes shall be executed with the facsimile signatures of the officers who shall execute the bonds or notes, who shall adopt as and for their own signatures their respective facsimile signatures appearing on such coupons.
3. (3) Bonds or notes issued under this chapter, and the coupons appurtenant thereto, if any, bearing the signature of any officer in office on the date of signing thereof shall be valid and binding obligations, notwithstanding that before the delivery thereof, such person shall have ceased to be an officer of the authority.
(c) Any bonds of the authority may be sold at public or private sale for such price and in such manner and from time to time as may be determined by the board of directors of the authority to be most advantageous, and the authority may pay all expenses, premiums and commissions which its board of directors may deem necessary or advantageous in connection with the issuance thereof.
(d) All bonds of the authority and the interest coupons applicable thereto are hereby made and shall be construed to be negotiable instruments.
(e) Interim certificates or notes or other temporary obligations issued by the authority pending the issuance of its revenue bonds shall be payable out of revenues and receipts in like manner as such revenue bonds and shall be retired from the proceeds of such bonds upon the issuance thereof, and shall be in such form and contain such terms, conditions and provisions consistent with this chapter as the board of directors may determine.
(f) Any bonds or notes of the authority or any other authority at any time outstanding may at any time and from time to time be refunded by the authority by the issuance of its refunding bonds in such amount as the board of directors may deem necessary, but not exceeding the sum of the following:
1. (1) The principal amount of the obligations being refinanced;
2. (2) Applicable redemption premiums thereon;
3. (3) Unpaid interest on such obligations to the date of delivery or exchange of the refunding bonds;
4. (4) In the event the proceeds from the sale of the refunding bonds are to be deposited in trust as hereinafter provided, interest to accrue on such obligations from the date of delivery to the first or any subsequent available redemption date or dates selected, in its discretion, by the board of directors, or to the date or dates of maturity, whichever shall be determined by the board of directors to be most advantageous or necessary to the authority;
5. (5) A reasonable reserve for the payment of principal of and interest on such bonds and/or a renewal and replacement reserve;
6. (6) If the project to be constructed from the proceeds of the obligations being refinanced has not been completed, an amount sufficient to meet the interest charges on the refunding bonds during the construction of such project and for two (2) years after the estimated date of completion, but only to the extent that interest charges have not been capitalized from the proceeds of the obligations being refinanced; and
7. (7) Expenses of the authority, including bond discount, deemed by the board of directors to be necessary for the issuance of the refunding bonds. A determination by the board of directors that any refinancing is advantageous or necessary to the authority, or that any of the amounts provided in the preceding sentence should be included in such refinancing, or that any of the obligations to be refinanced should be called for redemption on the first or any subsequent available redemption date or permitted to remain outstanding until their respective dates of maturity, shall be conclusive; provided, that prior to the adoption by the board of directors of the resolution authorizing the issuance of refunding bonds under this section, the plan for refunding shall be submitted to the comptroller of the treasury or the comptroller's designee for review, and the comptroller of the treasury or the comptroller's designee may report thereon to the board of directors within fifteen (15) days from the date the plan is received by the comptroller of the treasury or the comptroller's designee, and the comptroller of the treasury or the comptroller's designee shall immediately acknowledge receipt in writing of the proposed refunding plan. After receiving the report of the comptroller of the treasury or the comptroller's designee or after the expiration of fifteen (15) days from the date the refunding plan is received by the comptroller of the treasury or the comptroller's designee, whichever date is earlier, the board of directors may take such action with reference to such proposed refunding plan as it deems advisable.
(g) Any such refunding may be effected whether the obligations to be refunded shall have then matured or shall thereafter mature, either by sale of the refunding bonds and the application of the proceeds thereof to the payment of the obligations to be refunded thereby, or by the exchange of the refunding bonds for the obligations to be refunded thereby with the consent of the holders of the obligations so to be refunded, and regardless of whether or not the obligations to be refunded were issued in connection with the same projects or separate projects, and regardless of whether or not the obligations proposed to be refunded shall be payable on the same date or different dates or shall be due serially or otherwise.
(h) If, at the time of delivery of the refunding bonds, the obligations to be refunded will not be retired or a valid and timely notice of redemption of the outstanding obligations is not given in accordance with the resolution, indenture or other instrument governing the redemption of the outstanding obligations, then, prior to the issuance of the refunding bonds, the board of directors shall cause to be given a notice of its intention to issue the refunding bonds. The notice shall be given either by mail to the owners of all the outstanding obligations to be refunded at their addresses shown on the bond registration records for the outstanding obligations or given by publication one (1) time each in a newspaper having a general circulation in the municipality with respect to which the corporation was organized and in a financial newspaper published in New York, New York, having a national circulation. The notice shall set forth the estimated date of delivery of the refunding bonds and identify the obligations, or the individual maturities thereof, proposed to be refunded; provided, that, if portions of individual maturities are proposed to be refunded, the notice shall identify the maturities subject to partial refunding and the aggregate principal amount to be refunded within each maturity. If the issuance of the refunding bonds does not occur as provided in the notice, the governing body shall cause notice thereof to be given as provided above. Except as otherwise set forth in this subsection (h), the notice required pursuant to this subsection (h) shall be given whether or not any of the obligations to be refunded are to be called for redemption.
(i) The principal proceeds from the sale of any refunding bonds shall be applied only as follows, either:
1. (1) To the immediate payment and retirement of the obligations being refunded; or
2. (2) To the extent not required for the immediate payment of the obligations being refunded, then such proceeds shall be deposited in trust and together with any investment income thereon to provide for the payment and retirement of the obligations being refunded, and to pay any expenses incurred in connection with such refunding, but provision may be made for the pledging and application of any surplus for any purposes of the authority including, without limitation, provision for the pledging of any such surplus to the payment of the principal of and interest on any issue or series of refunding bonds or other obligations of the authority. Money in any such trust fund may be invested in direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States government, or obligations of any agency or instrumentality of the United States government, or in certificates of deposit issued by a bank or trust company located in this state if such certificates shall be secured by a pledge of any of the obligations having an aggregate market value, exclusive of accrued interest, equal at least to the principal amount of the certificates so secured. Nothing herein shall be construed as a limitation on the duration of any deposit in trust for the retirement of obligations being refunded but which shall not have matured and which shall not be presently redeemable or, if presently redeemable, shall not have been called for redemption.
(j) The board of an authority may enter into an agreement to sell its bonds and its refunding bonds providing for delivery on a date greater than ninety (90) days and not greater than five (5) years, or such greater period of time if approved by the comptroller of the treasury or the comptroller's designee, in the case of bonds and not greater than the later of the first date on which the bonds being refunded can be optionally redeemed resulting in cost savings or at par, whichever is earlier, only upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that such an agreement or contract is in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board in accordance with subsection (l). Agreements to sell bonds or refunding bonds for delivery ninety (90) days or less from the date of execution of the agreement to sell the bonds or refunding bonds do not require a report of the comptroller of the treasury or the comptroller's designee pursuant to subsection (l).
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- 12-10-122(b)
(k) With respect to all or any portion of any issue of bonds and refunding bonds issued or anticipated to be issued hereunder, at any time during the term of the bonds or refunding bonds, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized in this subsection (k) are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in subsection (m), an authority, by resolution, may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the board of the authority may determine, including, without limitation, provisions permitting the authority to pay to or receive from any person or entity any loss of benefits under such agreement upon early termination thereof or default under such agreement. Such a contract or agreement to be entered into by an authority with respect to bonds or refunding bonds issued to fund or finance a lease agreement, loan agreement or operating contract with a municipal corporation must also be approved by the governing body of the municipal corporation.
(l)
1. (1) The state funding board shall establish guidelines, rules or regulations with respect to the agreements and contracts referenced in subsections (j) and (k) and § 12-10-116(c), which may include, but shall not be limited to, the following:
  1. (A) The conditions under which such agreements or contracts can be entered into;
  2. (B) The methods by which such contracts are to be solicited and procured;
  3. (C) The form and content such contracts shall take;
  4. (D) The aspects of risk exposure associated with such contracts;
  5. (E) The standards and procedures for counterparty selection, including rating criteria;
  6. (F) The procurement of credit enhancement, liquidity facilities, or the setting aside of reserves in connection with such contracts or agreements;
  7. (G) The methods of securing the financial interest in such contracts;
  8. (H) The methods to be used to reflect such contracts in the authority's or municipal corporation's financial statements;
  9. (I) Financial monitoring and periodic assessment of such contracts by the authority or municipal corporation;
  10. (J) The application and source of nonperiodic payments; and
  11. (K) Educational requirements for officials of the authority or the municipal corporation responsible for approving any such contract or agreement.
2. (2) Prior to the adoption by the governing body of the authority or the governing body of the municipal corporation of a resolution authorizing such contract or agreement, a request shall be submitted to the comptroller of the treasury or the comptroller's designee for a report finding that such contract or agreement is in compliance with the guidelines, rules or regulations of the state funding board. Within fifteen (15) days of receipt of the request, the comptroller of the treasury or the comptroller's designee shall determine whether the contract or agreement substantially complies with the guidelines and shall report thereon to the authority or municipal corporation. If the report of the comptroller of the treasury or the comptroller's designee finds that the contract or agreement complies with the guidelines, rules or regulations of the state funding board or the comptroller of the treasury shall fail to report within the fifteen-day period, then the authority or the municipal corporation may take such action with respect to the proposed contract or agreement as it deems advisable in accordance with this section and the guidelines, rules or regulations of the state funding board. If the report of the comptroller of the treasury or the comptroller's designee finds that such contract or agreement is not in compliance with the guidelines, rules or regulations, then the authority or the municipal corporation is not authorized to enter into such contract or agreement. The guidelines, rules or regulations shall provide for an appeal process to a determination of noncompliance.
(m) When entering into any contracts or agreements facilitating the issuance and sale of bonds or refunding bonds, including contracts or agreements providing for liquidity and credit enhancement and reimbursement agreements relating thereto, interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, other interest rate hedging agreements, and agreements with the purchaser of the bonds or refunding bonds evidencing a transaction bearing a reasonable relationship to this state and also to another state or nation, the authority may agree in the written contract or agreement that the rights and remedies of the parties thereto shall be governed by the laws of this state or the laws of such other state or nation; provided, that jurisdiction over any authority or municipal corporation against which an action on such a contract or agreement is brought shall lie solely in a court located in Tennessee which would otherwise have jurisdiction of actions brought in contract against such authority or municipal corporation.
(n) In addition to any other investments authorized herein, cities, counties, or metropolitan governments may invest, or cause to be invested, the proceeds of loans to such cities, counties, or metropolitan governments from a public building authority in a guaranteed investment contract chosen or established by such public building authority provided:
1. (1) Such guaranteed investment contract has a defined termination date not exceeding five (5) years from the date of the issuance of the obligation by the public building authority for the purpose of funding such loans;
2. (2) Such guaranteed investment contract is secured by obligations described in § 9-4-103 and secured at a level as required by § 9-4-105;
3. (3) Such guaranteed investment contract is issued by an issuer having a credit rating of at least AA or its equivalent, by at least one (1) nationally recognized rating agency; and
4. (4) The obligations securing such guaranteed investment contract are deposited with an independent third party selected by the public building authority and are pledged to the cities, counties, and metropolitan governments receiving such loans.
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- 9-4-103(a)(11)

§ 12-10-112. Security for bonds — Enforcement — Revision of lease, loan agreement or sales contract charges.

(a) The principal of and interest on any bonds issued by the authority shall be secured by a pledge of the revenues and receipts out of which the same shall be made payable and may be secured by a mortgage or deed of trust covering all or any part of the projects from which the revenues or receipts so pledged may be derived, including any enlargements of and additions to any such projects thereafter made, and by an assignment and pledge of all or any part of the authority's interest in and rights under the leases, sales contracts, or loan agreements relating to such projects, or any part thereof. The proceedings under which the bonds are authorized to be issued and any such mortgage or deed of trust may contain any agreements and provisions respecting the maintenance of the projects covered thereby, the fixing and collection of rents for any portions thereof leased by the authority to others, the creation and maintenance of special funds from such revenues and the rights and remedies available in the event of default, all as the board of directors shall deem advisable and not in conflict with this chapter. Each pledge, agreement, mortgage and deed of trust made for the benefit or security of any of the bonds of the authority shall continue effective until the principal of and interest on the bonds for the benefit of which the same were made shall have been fully paid. In the event of default in such payment or in any agreement of the authority made as a part of the contract under which the bonds were issued, whether contained in the proceedings authorizing the bonds or in any mortgage and deed of trust executed as security therefor, such payment or agreement may be enforced by suit, mandamus, the appointment of a receiver in equity or by foreclosure of any such mortgage and deed of trust, or any one (1) or more of such remedies.
(b) The board of directors of any authority issuing bonds under provisions of this chapter shall charge, collect and revise from time to time, whenever necessary, rents and charges for the rental of projects or parts thereof or installment payments under any loan agreement or sales contract with respect thereto, the revenues from which are pledged to the payment of such bonds, sufficient to pay for the operation and maintenance of such projects and such portion of the administrative costs of the authority as may be provided in the lease or leases of such projects or the loan agreement or agreements or the sales contract or contracts with respect thereto, and to pay such bonds and the interest thereon as the same become due, including such reserves as may be determined to be necessary by the board of directors.

§ 12-10-113. Tax exemption — Status under securities law.

(a) The authority is hereby declared to be performing a public function in behalf of the municipality with respect to which it is organized, and to be a public instrumentality of such municipality. Accordingly, the authority and all properties at any time owned by it, and the income therefrom, and all bonds issued by it, and the income therefrom, shall be exempt from all taxation in this state.
(b) Also, for purposes of the Securities Law of 1955, formerly compiled in §§ 48-1601 — 48-1653 [repealed], and any amendment thereto or substitution therefor, bonds issued by the authority shall be deemed to be securities issued by a public instrumentality or a political subdivision of this state.

§ 12-10-114. Nonliability of municipality.

(a) The municipality shall not in any event be liable for the payment of the principal of or interest on any bonds of the authority or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever which may be undertaken by the authority, and none of the bonds of the authority or any of its agreements or obligations shall be construed to constitute an indebtedness of the municipality within the meaning of any constitutional or statutory provision whatsoever.
(b) Notwithstanding subsection (a), a municipality may, by a written indemnity agreement, agree to indemnify an authority and its directors, officers and employees against losses, claims, expenses, costs, obligations, debts, suits, demands, actions and liabilities, including those arising from the authority's negligence, which are asserted against the authority, or its directors, officers or employees in connection with any project undertaken by the authority, and such indemnity agreement shall be enforceable against the municipality in accordance with its terms, including any such indemnity agreement in effect on May 7, 1998.

§ 12-10-115. Payments under lease, loan agreement, sales contract or operating contract — Tax and other methods.

(a)
1. (1) Except as provided in subsections (b) and (c), whenever, and as often as, a municipal corporation having taxing power enters into a lease, loan agreement, sales contract or operating contract with a public building authority or other contracting party under this chapter, the governing body of such municipal corporation shall provide by resolution for the levy and collection of a tax sufficient to pay when due the annual amount payable under such lease, loan agreement, sales contract or operating contract as and when it becomes due and payable, and to pay any expenses of maintaining and operating the project required to be paid by the municipal corporation under the terms of such lease, loan agreement, sales contract or operating contract or by instrument collateral thereto and, furthermore, to pledge such tax and the full faith and credit of the municipal corporation to such payments. Such tax shall be assessed, levied, collected and paid in like manner as other taxes of the municipal corporation. Such tax shall not be included within any statutory or other limitation of rate or amount for such municipal corporation but shall be excluded therefrom and be in addition thereto and in excess thereof, notwithstanding and without regard to the prohibitions, restrictions or requirements of any other law, whether public or private. There shall be set aside from such tax levy into a special fund an amount sufficient for the payment of the annual amount due under any such lease, loan agreement, sales contract or operating contract and the money in such fund shall be used exclusively for such purpose and shall not be used for any other purpose until such annual amount has been paid in full. The foregoing shall not be construed to limit the power of the authority or other contracting party to enter into leases, loan agreements, sales contracts or operating contracts with municipal corporations not having the power of taxation.
2. (2) Except for a lease, loan agreement, sales contract or operating contract entered into for school purposes as specified in § 49-3-1004, and except as provided in subsection (b), before any municipal corporation having the power of taxation enters into any lease, loan agreement, sales contract or operating contract with a public building authority under this part, the municipal corporation must comply with the resolution, notice and election provisions found in §§ 9-21-205 — 9-21-212. If such lease, loan agreement, sales contract or operating contract is done to retire or refund existing debt, then the resolution, notice and election requirements need not be followed.
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- 12-10-116(b)
(b)
1. (1) Notwithstanding subsection (a), a municipal corporation may enter into a lease, loan agreement, sales contract or operating contract with a public building authority or other contracting party under this chapter payable exclusively from the revenues of one (1) or more projects of the municipal corporation, if the governing body of such municipal corporation shall provide by resolution that the lease, loan agreement, sales contract or operating contract shall be so payable. The obligations of the municipal corporation under such a lease, loan agreement, sales contract or operating contract shall be secured solely by a pledge of and lien on the revenues so pledged, and, in the case of a utility district, a statutory lien in the nature of a mortgage lien upon any utility system or systems of such district, which pledge and lien shall be in favor of the public building authority or other contracting party pursuant to this chapter, and their assigns, and all such property shall remain subject to such pledge and lien until the payment in full of the obligations of the municipal corporation under the lease, loan agreement, sales contract or operating contract. If the governing body of the municipal corporation shall provide for a lease, loan agreement, sales contract or operating contract solely payable from and secured by such revenues, no recourse shall be had for the payment of any obligations thereunder against the general funds of the municipal corporation, nor shall the full faith and credit or taxing power, if any, of the municipal corporation, be deemed to be pledged to the payment of the obligations. Such obligations shall not be a debt of the municipal corporation, nor a charge, lien or encumbrance, legal or equitable, upon any property of the municipal corporation or upon any income, receipts or revenues of the municipal corporation other than revenues pledged to the payment of the obligations as provided herein.
2. (2) The pledge of and lien on revenues and the statutory mortgage lien hereinabove described shall be valid and binding from the time the pledge or lien is created or granted and shall inure to the benefit of the public building authority or contracting party, or their assigns, until the obligations secured are paid and performed in full. The priority of any pledge or lien with respect to competing pledges or liens shall be determined by the date such pledge or lien is created or granted and neither the lease, loan agreement, sales contract or operating contract nor any other instrument granting, creating or giving notice of the pledge or lien needs to be filed or recorded in order to preserve or protect the validity or priority of such pledge or lien.
3. (3) The governing body of a municipal corporation entering into a lease, loan agreement, sales contract or operating agreement described in this subsection (b) shall prescribe and collect, or cause to be prescribed and collected, reasonable rates, fees or charges for the services, facilities and commodities of the project or projects, and shall revise such rates, fees, or charges from time to time, whenever necessary, so that the project or projects shall be and always remain self-supporting. The rates, fees or charges prescribed shall be at least sufficient to produce revenue to provide for all expenses of operation and maintenance of the project or projects, including reasonable reserves therefor, and pay when due all bonds and notes and interest thereon and all obligations under any lease, loan agreement, sales contract or operating contract for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reasonable reserves therefor. A municipal corporation described in § 7-34-102, which enters into a lease, loan agreement, sales contract or operating contract relating to a system or systems included within the definition of “public works” as set forth in § 7-34-102, shall be governed by the terms and requirements of § 7-34-115.
4. (4) A municipal corporation entering into a lease, loan agreement, sales contract or operating contract relating to a project hereunder is authorized to make such covenants and agreements with the public building authority or contracting party as such corporation is authorized to make with and for the benefit of bond holders under any of the laws of this state. The public building authority or contracting party shall have all the remedies provided to bond holders pursuant to title 7, chapter 34, or title 9, chapter 21, part 3, with respect to the municipal corporations described therein and the revenues pledged by the corporations, or pursuant to title 7, chapter 82, with respect to the municipal corporations described therein and the revenues pledged thereby.
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- 12-10-116(b)
(c)
1. (1) Proceeds received from a lease, loan agreement, sales contract or operating contract with a public building authority or other contracting party under provisions of this chapter for school capital outlay purposes by a municipal corporation that is a county or metropolitan government within which an incorporated city or town or a special school district operates a school system shall be shared with such incorporated city or town or special school district system on the same basis as the proceeds of bonds issued pursuant to title 49, chapter 3, part 10 are shared. The trustee of the county or treasurer of the metropolitan government shall pay over to the treasurer of the incorporated city or town or the special school district that amount of the proceeds which bears the same ratio to the entire amount of proceeds, net of all costs incurred in connection with the execution and delivery of the lease, loan agreement, sales contract or operating contract and any bonds or notes of the public building authority issued in connection with such lease, loan agreement, sales contract or operating contract, as the average daily attendance of the incorporated city or town or special school district for the year ending June 30 immediately preceding the receipt of the proceeds bears to the average daily attendance of the entire county or metropolitan government for the year ending June 30 immediately preceding the receipt of the proceeds. No proceeds to be shared hereunder shall be required to be disbursed to the incorporated city or town or special school district until the time the county or metropolitan government actually receives the proceeds of the lease, loan agreement, sales contract, or operating contract.
2. (2) The governing body of any such incorporated city or town or special school district may, by resolution regularly adopted, waive its right to all or a portion of any funds due under this subsection (c).
3. (3) In lieu of the levy and collection of the tax required pursuant to subsection (a), a county or metropolitan government may provide for the payment of the amounts due under such lease, loan agreement, sales contract or operating contract by levying a tax only on that portion of the taxable property within the county or metropolitan government lying outside the territorial limits of the incorporated city or town or special school district independently operating its schools, and may in addition pledge and use for such purpose the proceeds of the county's or metropolitan government's share of the sales tax distributed under title 67, chapter 6, or a portion of the Tennessee investment in student achievement formula (TISA) base funding amount and a portion of an infrastructure stipend allocated pursuant to § 49-3-107, subject to the maximum limits established pursuant to § 4-31-1005(g)(2). In such event, the proceeds of the lease, loan agreement, sales contract or operating contract shall not be required to be shared with any incorporated city or town or special school district school system.
4. (4) The proceeds of any lease, loan agreement, sales contract or operating contract executed and delivered pursuant to this chapter to refund outstanding obligations issued by a county or metropolitan government for school capital outlay purposes shall not be required to be shared as provided herein, unless the outstanding obligations to be refunded were payable as provided in subdivision (c)(3) and the lease, loan agreement, sales contract or operating contract executed and delivered to accomplish such refunding is payable from taxes to be levied on all taxable property in the county or metropolitan government.
5. (5) This subsection (c) is not applicable in counties and metropolitan governments having a population in excess of eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census, or any municipality within such county served by a municipal or special school district.
(d) The governing body of any municipal corporation not having the power of taxation and the state of Tennessee shall, upon entering into a lease, loan agreement, sales contract or operating contract with a public building authority or other contracting party, make adequate provision for the payment of the annual amount payable under the lease, loan agreement, sales contract or operating contract.

§ 12-10-116. Municipal leases, loan agreements, sales contracts or operating contracts authorized — Agreements relating to interest rates.

(a) Any municipal corporation is authorized to enter into such leases, loan agreements, sales contracts or operating contracts by resolution of its governing body or, in the case of such agreements or contracts for the financing of a project or projects eligible to be financed pursuant to title 7, chapter 34, with a term of not more than five (5) years, by resolution of the governing body or the board or commission having jurisdiction, control and management of the utility system of the municipal corporation being financed, with an authority or other contracting party with respect to projects or parts thereof, for such term or terms and upon such conditions as may be determined by such governing body, board or commission, as appropriate, notwithstanding and without regard to the restrictions, prohibitions or requirements of any other law, whether public or private.
(b) Any lease, loan agreement, sales contract or operating contract described in this chapter may be entered into for the purpose of refunding any bonds of a municipal corporation which can be refunded under title 9, chapter 21, parts 9 and 10; or for the purpose of refunding capital outlay notes which can be refunded under title 9, chapter 21, part 6. Prior to the adoption of the resolution authorizing such an agreement or contract, a plan of refunding shall be submitted for review to the comptroller of the treasury or the comptroller's designee who shall proceed in the same manner as provided in § 9-21-903, in the case of an agreement or contract described in § 12-10-115(a), or § 9-21-1003, in the case of an agreement or contract described in § 12-10-115(b). If the report of the comptroller of the treasury or the comptroller's designee states that the plan of refunding does not substantially comply with the guidelines, if any, described in § 9-21-903, in the case of an agreement or contract described in § 12-10-115(a), or § 9-21-1003, in the case of an agreement or contract described in § 12-10-115(b), a notice in substantially the form set forth in §§ 9-21-903(c) and 9-21-1003(c), as applicable, shall be published prior to the execution of the agreement or contract in a newspaper having general circulation in the local government.
(c) With respect to all or any portion of any lease, loan agreement, sales contract and operating contract described in this chapter, entered into or anticipated to be entered into, at any time during the term of the lease, loan agreement or operating contract, and upon receipt of a report of the comptroller of the treasury or the comptroller's designee finding that the contracts and agreements authorized in this subsection (c) are in compliance with the guidelines, rules or regulations adopted or promulgated by the state funding board, as set forth in § 12-10-111(l), a municipal corporation, by resolution, may authorize and enter into interest rate swap or exchange agreements, agreements establishing interest rate floors or ceilings or both, and other interest rate hedging agreements under such terms and conditions as the governing body of the municipal corporation may determine, including, without limitation, provisions permitting the municipal corporation 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 lease, loan agreement or operating contract.
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- 12-10-111(l)(1)
- 12-10-122(b)

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9-21-606

§ 12-10-117. Execution of leases, contracts and deeds.

Except as otherwise provided in this chapter, all leases, contracts, deeds of conveyance, or instruments in writing executed by the authority shall be executed in the name of the authority by the chair and secretary of the authority, or by such other officers as the board of directors, by resolution, may direct, and the seal of the authority shall be affixed thereto.

§ 12-10-118. Status as nonprofit corporation — Disposition of earnings.

The authority shall be a public nonprofit corporation and no part of its net earnings remaining after payment of its expenses shall inure to the benefit of any individual, firm or corporation, except that in the event the board shall determine that sufficient provision has been made for the full payment of the expenses, bonds and other obligations of the authority, including reserves therefor, then any net earnings of the authority thereafter accruing may be used to provide a reserve for depreciation of any project or projects undertaken by such authority in an amount determined by the board to be necessary and reasonable, and net earnings available thereafter shall be paid to the municipality with respect to which the authority was organized; provided, that nothing herein contained shall prevent the board from transferring all or any part of its properties in accordance with the terms of any lease entered into by the authority.

§ 12-10-119. Dissolution of authority.

Whenever the board of directors of an authority shall by resolution determine that there has been substantial compliance with the purposes for which the authority was formed and all bonds theretofore issued and all obligations theretofore incurred by the authority have been fully paid, the members of the board shall thereupon execute and file for record in the office of the secretary of state a certificate of dissolution reciting such facts and declaring the authority to be dissolved. Such certificate of dissolution shall be executed under the seal of the authority. Upon the filing of such certificate of dissolution, the authority shall stand dissolved, the title to all funds and properties owned by it at the time of such dissolution shall vest in the municipality with respect to which the authority was organized, and possession of such funds and properties shall forthwith be delivered to such municipality.

§ 12-10-120. Joint operation of authorities.

The powers herein conferred upon authorities created under this chapter may be exercised by two (2) or more such authorities acting jointly. Two (2) or more municipalities may by acting jointly incorporate a public building authority to effectuate the purposes of this chapter. When two (2) or more municipalities incorporate such an authority, each and every requisite pertaining to the application for incorporation, qualification of applicants, certificate of incorporation and amendment of certificate shall, as nearly as may be practicable, be incumbent in like manner upon each municipality joining in the creation of such public building authority.

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§ 12-10-121. Project sites — State may transfer property to and contract with authorities.

(a) Any municipal corporation may acquire a project site by gift, purchase or lease, or exercise of the power of eminent domain, and may transfer any project site to an authority by sale, lease or gift. Such transfer may be authorized by a resolution of the governing body of the municipal corporation without submission of the question to the voters, and without regard to the requirements, restrictions, limitations or other provisions contained in any other general, special or local law. Such project site may be within or without the municipal corporation, or partially within and partially without the municipal corporation.
(b) The state of Tennessee may make such contribution, grant, loan, gift, transfer, sale or lease of money or property, both real and personal, to an authority, and may enter into such contracts and agreements with respect thereto, as may from time to time be deemed necessary and desirable by the state, and subject to the requirements, restrictions, limitations or other provisions contained in any other general, special or local law.

§ 12-10-122. Application of other laws to authority — Compliance with contract requirements — Agreements concerning interest rates.

(a) Neither this chapter nor anything herein contained shall be construed as a restriction or limitation upon any powers which an authority, as a public corporation, might otherwise have under any laws of this state, but shall be construed as cumulative of any such powers. No proceedings, notice or approval shall be required for the organization of the authority or the issuance of any bonds or any instrument as security therefor, except as herein provided, any other law to the contrary notwithstanding; provided, that nothing herein shall be construed to deprive the state and its governmental subdivisions of their respective police powers over properties of the authority, or to impair any power thereover of any official or agency of the state and its governmental subdivisions which may be otherwise provided by law. Projects may be acquired, purchased, constructed, reconstructed, improved, bettered and extended and bonds may be issued under this chapter for such purposes, notwithstanding that any other general, special or local law may provide for the acquisition, purchase, construction, reconstruction, improvement, betterment and extension of a like project, or the issuance of bonds for like purposes, and without regard to the requirements, restrictions, limitations or other provisions contained in any other general, special or local law.
(b) Prior to the adoption or promulgation by the state funding board of guidelines, rules or regulations with respect to the contracts and agreements authorized in § 12-10-111(j) and (k) and § 12-10-116(c), a municipal corporation or authority may enter into such contracts or agreements to the extent otherwise authorized in this chapter or in any other law notwithstanding § 12-10-111(j) and (k) and § 12-10-116(c). Nothing in § 12-10-111(j) and (k) and § 12-10-116(c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for a municipal corporation or authority to enter into the contracts or agreements described in § 12-10-111(j) and (k) and § 12-10-116(c), previously entered into or entered into prior to the adoption or promulgation by the state funding board of guidelines, rules or regulations.

§ 12-10-123. [Reserved.]

§ 12-10-124. Common accounts — Certain purchases for which competitive bidding not required — Contracting by public invitation for proposals.

(a) An authority which operates or maintains more than one (1) project may maintain a common account or accounts and buy supplies and services in common; provided, that expenditures periodically shall be allocated to each project on an appropriate basis.
(b) An authority in the operation, maintenance, and routine repairs of a project may purchase goods, supplies and services which are generally sold to the public by advertised price without the necessity of competitive bidding; provided, that no purchase shall exceed five thousand dollars ($5,000) or any larger limit as shall be allowed for such purchases under the regulations of a municipal corporation with which the authority has contracted.
(c)
1. (1) No authority shall contract for the construction of buildings or improvements, the expenditure for which is estimated, projected or budgeted to be in excess of ten thousand dollars ($10,000) but less than one million dollars ($1,000,000) except when such contract is made through a public advertisement and competitive bid process. Public advertisement shall be given at least ten (10) days in advance of accepting bids for such construction, and the authority shall award the contract to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation to bid.
2. (2)
  1. (A) No authority shall contract for the construction of buildings or improvements, the expenditure for which is estimated, projected or budgeted to be one million dollars ($1,000,000) or more except when such contract is made either:
    1. (i) Through a public advertisement and competitive bid process;
    2. (ii) Through a request for proposals process which includes minimum required qualifications; or
    3. (iii) Through a request for qualifications process which includes minimum required qualifications and a selection process pursuant to which multiple proposers are selected and prequalified to submit competitive bids.
  2. (B) Public advertisement shall be given at least ten (10) days in advance of accepting bids or proposals for such construction. If the authority uses the competitive bid process, the authority shall award the contract to the lowest responsible and responsive bidder whose bid meets the requirements and criteria set forth in the invitation to bid. If the authority uses the request for proposals process, the authority shall award the contract to the lowest responsible and responsive bidder who meets the minimum required qualifications. If the authority uses the request for qualifications process, the authority shall award the contract to the lowest pre-qualified bidder.
3. (3) The authority may reject any bid or proposal from a contractor who:
  1. (A) At the time of the advertisement for bids or proposals, is a party to litigation or a contractual dispute with the authority or the municipality for which the authority is building or managing the project; or
  2. (B) Has defaulted on a contract with the authority or the municipality for which the authority is building or managing the project within the five-year period preceding the time of the advertisement for bids or proposals.
4. (4) Notwithstanding the foregoing provisions of this subsection (c), contractual arrangements for construction delivery methods other than the competitive bid method, such as, but not limited to, the construction manager method, the construction manager at risk method, and the design-build method, or for remodeling and maintenance, may be awarded by a request for proposals process as provided in subsection (d).
(d) The authority shall contract for all services, including construction management services and design-build services, through the process provided in subsection (c) or by a request-for-proposals process; provided, however, that no such process shall be required if the authority contracts with a provider of any such service for a project who has been selected by a municipal corporation who is a contracting party or lessee with respect to such project through one (1) of the processes described in subsection (c) or this subsection (d); and provided, further, that this subsection (d) shall not apply to the provision of services for which a letter of engagement or other arrangement has been entered into prior to June 19, 2001. The request for proposals process will invite prospective proposers and will indicate the service requirements and the categories to be considered in the evaluation of the proposals, together with the relative weight of each category. The categories shall include such factors as qualifications, experience, staff availability, technical approach, minority participation and cost, as deemed appropriate by the authority. Proposers shall be given at least ten (10) days from public advertisement of the request for proposals to consider the evaluation factors set forth in the solicitation documents before submitting proposals. The contract shall be awarded to the best proposer, using the evaluation criteria set forth above, who meets the minimum required qualifications. Notwithstanding the foregoing provisions, contracts for professional services are not required to be awarded through a competitive bid process or a request for proposals process.
(e) No authority shall enter into a lease or lease-purchase agreement for land, buildings or leased premises which requires total lease payments or lease-purchase payments by the authority of ten thousand dollars ($10,000) or greater, unless such agreement is made after competitive bids upon public advertisement or by a request for proposals process. A competitive bid process or request for proposals process is not required for an authority to enter into a lease or lease-purchase agreement with a municipal corporation, the state of Tennessee, the United States, or any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof.
(f) Nothing contained herein shall require the authority to accept any bid or proposal, and the authority may choose to reject all bids or proposals.
(g) An authority contracting with the state of Tennessee shall be subject to the same procurement procedures as though the project were being undertaken by the state of Tennessee unless the state building commission determines that a particular project should not be subject to the procurement procedures and includes a statement to that effect in the contract with the authority.

Chapter 11 Interstate Contracting for Federal Programs Act

§ 12-11-101. Short title — Purpose.

(a) This chapter may be cited as the “Interstate Contracting for Federal Programs Act.”
(b) The purpose of this chapter is to allow the state to join with other states in contracting to provide necessary materials and services for federal-state programs, in order to provide effective use of combined resources to prevent duplication and unnecessary expense to the citizens of this state.

§ 12-11-102. Chapter definitions.

As used in this chapter, unless the context otherwise requires:
1. (1) “Contractor” means a governmental entity, corporation, partnership, natural person, or joint venture which is qualified to provide materials and services for use in federal-state programs;
2. (2) “Federal government authorization” means approval in writing, whether in the form of statute, regulation, bulletin, manual, or letter signed by an authorized person, approving certain activities under a federal-state program;
3. (3) “Joint federal-state program” means any program authorized by the statutes and/or regulations of the United States and the state of Tennessee where both governments supervise, authorize, and/or fund a program to provide money, goods, or assistance to residents of the state of Tennessee. A program may be a joint federal-state program even if one (1) government is solely responsible for funding or operating the program;
4. (4) “State” means a state of the United States;
5. (5) “State of Tennessee” includes all agencies of the state of Tennessee listed in title 4, chapter 3; and
6. (6) “United States” means the federal government of the United States or any federal agency as defined under federal law.

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12-11-103(e)

§ 12-11-103. Contracts for joint federal-state programs.

(a) The state of Tennessee may enter into joint contractual arrangements with other states and/or the United States to obtain materials and services to carry out the purposes of a federal-state program.
(b) The state of Tennessee may enter into agreements with another state and/or the United States to purchase materials and services to carry out the purposes of a federal-state program. This agreement may be part of a series of the agreements whereas one (1) state or the United States has agreed to serve as a “lead state” and purchase materials and/or services from one (1) or more contractors, and resell these materials and services to the state of Tennessee and other states.
(c) The state of Tennessee may serve as a “lead state” and thus agree to purchase materials and/or services from one (1) or more contractors, and resell some of these materials and services to one (1) or more other states.
(d) No contract authorized under subsections (a)-(c) may be signed unless the contract is for goods and services necessary for a federal-state program, the procurement is legally acceptable under the laws of the federal government and those of all participating states, and unless the procurement has received federal government authorization.
(e) The contracts authorized under subsections (a)-(c) may be entered into with one (1) or more states or the United States and one (1) or more contractors as defined in § 12-11-102.
(f) Any contract authorized by this section may be negotiated and entered into without regard to the requirements for competitive bidding of chapter 3 of this title and the requirements of former § 12-4-109 [See the Compiler’s Notes]. Such exemptions must be approved in writing by the commissioner of the agency of the state of Tennessee authorized to manage the joint federal-state program, the commissioner of finance and administration and the comptroller of the treasury.

§ 12-11-104. Negotiations for joint federal-state program contracts.

(a) The state of Tennessee may join with other states and/or the United States in evaluating responses to invitations for proposals for contracts to supply materials or services for joint federal-state programs. The state of Tennessee, subject to the approval of the attorney general and reporter, may negotiate agreements with other states concerning the joint procurement efforts.
(b) The state will have the right to terminate negotiations or contracts pursuant to this chapter at any time in its sole discretion. The state's right to terminate will be regardless of whether the procurement effort has been approved by any federal court or agency or if other states or federal agencies determine to continue with a joint procurement program.
(c) All contracts entered into pursuant to this chapter are contingent on the receipt of necessary appropriations from the general assembly and the federal government, and shall be terminated if such funding becomes unavailable.

Chapter 12 Iran Divestment Act

§ 12-12-101. Short title.

This chapter shall be known and may be cited as the “Iran Divestment Act.”

§ 12-12-102. Legislative intent.

It is the intent of the general assembly to fully implement the authority granted under Section 202 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111-195).

§ 12-12-103. Chapter definitions.

As used in this chapter:
1. (1) “Energy sector of Iran” means activities to develop petroleum or natural gas resources or nuclear power in Iran;
2. (2) “Financial institution” means the term as used in Section 14 of the Iran and Libya Sanctions Act of 1996 (Public Law 104 - 172; 50 U.S.C. § 1701 note);
3. (3) “Investment” means a commitment or contribution of funds or property, whatever the source, a loan or other extension of credit, and the entry into or renewal of a contract for goods or services. “Investment” does not include indirect beneficial ownership through index funds, commingled funds, limited partnerships, derivative instruments, or the like;
4. (4) “Iran” includes the government of Iran and any agency or instrumentality of Iran;
5. (5) “Person” means any of the following:
  1. (A) A natural person, corporation, company, limited liability company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group;
  2. (B) Any governmental entity or instrumentality of a government, including a multilateral development institution, as defined in Section 1701(c)(3) of the International Financial Institutions Act (22 U.S.C. § 262r(c)(3)); or
  3. (C) Any successor, subunit, parent entity, or subsidiary of, or any entity under common ownership or control with, any entity described in subdivisions (5)(A) and (B); and
6. (6) “State agency” means each state board, commission, department, executive department or office, institution, and instrumentality.

§ 12-12-104. Chapter inapplicable to procurement of contract valued at $1,000 or less.

This chapter shall not apply to a procurement or contract valued at one thousand dollars ($1,000) or less.

§ 12-12-105. Engagement in investment activities in Iran.

For purposes of this chapter, a person engages in investment activities in Iran if:
1. (1) The person provides goods or services of twenty million dollars ($20,000,000) or more in the energy sector of Iran, including a person that provides oil or liquefied natural gas tankers, or products used to construct or maintain pipelines used to transport oil or liquefied natural gas, for the energy sector of Iran; or
2. (2) The person is a financial institution that extends twenty million dollars ($20,000,000) or more in credit to another person, for forty-five (45) days or more, if that person will use the credit to provide goods or services in the energy sector in Iran and is identified on a list, created pursuant to § 12-12-106, as a person engaging in investment activities in Iran as described in this section.

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§ 12-12-106. List of persons engaging in investment activities in Iran — Ineligibility to contract with state.

(a)
1. (1) No more than one hundred twenty (120) days after July 1, 2016, the state chief procurement officer shall publish, using credible information freely available to the public, a list of persons it determines engage in investment activities in Iran, as described in § 12-12-105. The list, when completed, shall be posted on the state's website.
2. (2) The chief procurement officer shall update the list every one hundred eighty (180) days, using credible, freely available, public information regarding the persons or entities described in subdivision (a)(1).
3. (3) Before finalizing an initial list or an updated list, as reasonably practicable, the chief procurement officer shall do all of the following before a person is included on the list:
  1. (A) Provide ninety (90) days' written notice of the chief procurement officer's intent to include the person on the list, if the state is reasonably able to provide the written notice by electronic communication or through the U.S. postal service. The notice shall inform the person that inclusion on the list would make the person ineligible to contract with the state. The notice shall specify that the person, if it ceases its engagement in investment activities in Iran, may be removed from the list;
  2. (B) The chief procurement officer shall provide a person with an informal opportunity to comment in writing that it is not engaged in investment activities in Iran. If the person demonstrates to the chief procurement officer that the person is not engaged in investment activities in Iran, the person shall not be included on the list. Nothing in this section requires a contested case hearing as set forth in the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. A person contesting being placed on the list described in subsection (a) shall exhaust all administrative remedies provided in this section prior to the initiation of any judicial review of being placed on such list.
4. (4) The chief procurement officer shall make every effort to avoid erroneously including a person on the list.
(b) A person that is identified on a list created pursuant to subsection (a) as a person engaging in investment activities in Iran as described in § 12-12-105, is ineligible to contract with the state.
(c) Any contract entered into with a person that is ineligible to contract with the state shall be terminated by the state.

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§ 12-12-107. Right to contract with state on case-by-case basis.

Notwithstanding § 12-12-106, a person engaged in investment activities in Iran as described in § 12-12-105, may contract with the state, on a case-by-case basis, if:
1. (1) The investment activities in Iran were made before July 1, 2016, the investment activities in Iran have not been expanded or renewed after July 1, 2016, and the person has adopted, publicized, and is implementing a formal plan to cease the investment activities in Iran and to refrain from engaging in any new investments in Iran; or
2. (2) The state agency makes a determination that the commodities or services are necessary to perform its functions and that, absent such an exemption, the state agency would be unable to obtain the commodities or services for which the contract is offered. Such determination shall be entered into the procurement record.

§ 12-12-108. Certification that person or assignee not identified on list — No use of subcontractor identified on list.

(a) A state agency or entity shall require a person that attempts to contract with the state, including a contract renewal or assumption, to certify, at the time the bid is submitted or the contract is entered into, renewed, or assigned, that the person or the assignee is not identified on a list created pursuant to § 12-12-106. A state agency shall include certification information in the procurement record.
(b) A person that contracts with the state, including a contract renewal or assumption, shall not utilize, on the contract with the state agency or entity, any subcontractor that is identified on a list created pursuant to § 12-12-106.
(c) Upon receiving information that a person who has made the certification required by subsection (a) is in violation thereof, the state agency or entity shall review such information and offer the person an opportunity to respond. If the person fails to demonstrate that it has ceased its engagement in the investment, which is in violation of this chapter within ninety (90) days after the determination of such violation, then the state agency or entity shall take such action as may be appropriate and provided for by law, rule, or contract, including, but not limited to, imposing sanctions, seeking compliance, recovering damages, or declaring the contractor in default.

§ 12-12-109. Report.

The chief procurement officer shall report to the speaker of the senate, the speaker of the house of representatives, and the governor annually by October 1, on the status of the federal Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111-195), the Iran Divestment Act of 2014, and any rules or regulations adopted thereunder.

§ 12-12-110. Ineligibility to contract with political subdivision.

A person that is identified on a list created pursuant to § 12-12-106, as a person engaging in investment activities in Iran as described in § 12-12-105 shall be ineligible to contract with any political subdivision of this state, and any contract entered into with a political subdivision of this state shall be void ab initio.

§ 12-12-111. Statement of noninvestment required for competitive bidding.

(a) On or after July 1, 2016, every bid or proposal made to a political subdivision of the state or any public department, agency, or official thereof where competitive bidding is required by statute, rule, regulation, or local ordinance or resolution, for work or services performed or to be performed or goods sold or to be sold, shall contain the following statement subscribed by the bidder and affirmed by such bidder as true under the penalties of perjury: “By submission of this bid, each bidder and each person signing on behalf of any bidder certifies, and in the case of a joint bid each party thereto certifies as to its own organization, under penalty of perjury, that to the best of its knowledge and belief that each bidder is not on the list created pursuant to § 12-12-106.”
(b) Notwithstanding subsection (a), the statement of noninvestment in the energy sector of Iran may be submitted electronically.
(c) A bid shall not be considered for award nor shall any award be made where the condition set forth in subsection (a) has not been complied with; provided, however, that if in any case the bidder cannot make the foregoing certification, the bidder shall so state and shall furnish with the bid a signed statement which sets forth in detail the reasons therefor. A political subdivision may award a bid to a bidder who cannot make the certification pursuant to subsection (a), on a case-by-case basis, if:
1. (1) The investment activities in Iran were made before July 1, 2016, the investment activities in Iran have not been expanded or renewed on or after July 1, 2016, and the person has adopted, publicized, and is implementing a formal plan to cease the investment activities in Iran and to refrain from engaging in any new investments in Iran; or
2. (2) The political subdivision makes a determination that the goods or services are necessary for the political subdivision to perform its functions and that, absent such an exemption, the political subdivision would be unable to obtain the goods or services for which the contract is offered. Such determination shall be made in writing and shall be a public document.

§ 12-12-112. Chapter inapplicable to investments involving Tennessee consolidated retirement system.

This chapter shall not apply to investments made by the state treasurer or board of trustees involving the Tennessee consolidated retirement system.

§ 12-12-113. Applicability of restrictions.

The restrictions provided for in this chapter apply only until Congress, by legislation, declares that divestment of the type provided for in this chapter interferes with the conduct of United States foreign policy or revokes its current sanctions against Iran.