Senate committee approves bill letting attorney general seek three-judge review and order withholding of state funds from local governments

The State and Local Government Committee met in a special session to reconsider Senate Bill 845, a measure that would authorize the attorney general to seek a three-judge panel determination that a local government action violates state law or the Tennessee Constitution and, if the panel finds a violation, order the commissioner of finance and the state treasurer to withhold state funds allotted to the local government, including state-shared taxes.

Senator Lowe, the bill sponsor and presenter of Amendment 7091, described the measure and the change in the amendment. "This bill institutes where the state attorney general may review the actions by local governments to determine whether or not the actions violate state law or the state constitution," Lowe said, and summarized the amendment as adding language that the attorney general shall file a special action before a three-judge panel in accordance with 20-18-101 seeking a declaratory judgment. He said that if the panel finds a violation, the panel "shall order the commissioner [of] finance and the state treasurer to withhold funds of the state allotted to local governments via grant contract statute including but not limited to state shared taxes."

The bill also requires that, after the attorney general provides notice, a local government have 60 days to repeal or revise the challenged action or challenge the finding. Lowe told the committee the amendment was "pretty similar to the last time we considered this bill with 1 section change."

Senator Yarbrough opposed the legislation on policy and relational grounds, saying the tool is "extreme" and risks harming state-local relations. "We haven't needed a mechanism so extreme as this, or frankly something that facilitates poor relationships, facilitates, kind of a, what strikes me as the capacity for the state government to be vindictive towards local governments," Yarbrough said. He added, "I don't think it actually strengthens the state, the cities, or their relationship, or frankly, their compliance with the law."

Another committee member, identified in the transcript as Senator Centralo, responded that local governments remain subject to the constitution and state law and described local governments as "subsidiaries of state" in the sense that the state is the sovereign entity. Centralo said the bill provides a chance to fix actions and a path to appeal.

The committee put Amendment 7091 onto the bill by voice vote and then voted on the bill. Chairman Briggs moved the bill with Senator Lowe seconding. The roll call recorded five ayes and one no; the committee chair announced "you have 5 ayes, 1 no." The transcript records the following roll-call votes: Chairman Briggs (aye); Chairman Gardiner (aye); Chairman Hatcher (aye); Senator Lowe (aye); Senator Wally (aye); Senator Yarbrough (no). The chairman said Senate Bill 845 will go to the calendar.

This session was held pursuant to Senate rule 83.11(C), and the amendment cites filing under the statutory provision referred to in the transcript as 20-18-101.

The committee adjourned subject to the call of the chairman.