State and Local Government Committee advances bill letting attorney general seek three-judge review and withhold state funds

The State and Local Government Committee voted 5-1 to advance Senate Bill 845 after adopting Amendment 7091, which allows the state Attorney General and Reporter to seek a declaratory judgment from a three-judge panel that a local government action violates state law or the Tennessee Constitution and, if a violation is found, order the commissioner of finance and the state treasurer to withhold specified state funds from that local government.

The amendment and the bill matter because they create a formal process for state review of local actions, require a 60-day period for a local government to repeal or revise an action or to challenge the attorney general’s finding, and authorize withholding of state-allocated funds, including state-shared taxes, if a three-judge panel finds a violation.

Senator Lowe, the sponsor, presented Amendment 7091 and summarized its effect: "Amendment 7091 outlines pretty similar to the last time we considered this bill with 1 section change. Just to remind the committee 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 state the state constitution. If it's determined that a violation has occurred, the AG will give notice to local government, and the local government then will have 60 days to repeal or revise that action, or challenge the finding of the Attorney General. The bill requires that any challenge be heard and determined by a 3 judge panel." He also read language in the amendment directing the Attorney General and Reporter "to file a special action before a 3 judge panel in accordance with 20 dash 18 1 0 1 seeking a declaratory judgment" and that the panel could order state officials to withhold funds "including but not limited to state shared taxes."

One senator who opposed the legislation voiced concern about the breadth and tone of the measure, saying it risks damaging relations between state and local governments: "we've never needed to have this type of mechanism to go after local governments in such a holistic and punitive way... I don't think it actually strengthens the state, the cities, or their relationship, or frankly, their compliance with the law. Like, we should love the law, but we shouldn't love threats about the law." That senator said the effect of a court proceeding—appeals to intermediate and supreme courts—could interrupt a local government's tax base while litigation proceeds.

A different senator responded by emphasizing the state's role under the constitution: "all local governments are essentially subsidiaries of state. The state is the sovereign entity... they are still a part of Tennessee." That senator said the amendment provides a chance for local governments to fix actions that are "egregious and ... out of step" and, if they decline to fix a confirmed violation, there should be consequences to ensure uniform application of state law.

Another senator gave a procedural clarification, noting that references to "the state of Tennessee" reflect the state's population and that legislators are representatives of the roughly "7 plus million people that encompass Tennessee."

After discussion, the committee adopted Amendment 7091 and then advanced Senate Bill 845 to the calendar. Committee roll call produced a 5-1 vote in favor; the transcript records the ayes and reports the final tally as five yeas and one no. The committee adjourned following the vote.

No further details on implementation timelines, specific statutes beyond the amendment text read aloud (recorded as "20 dash 18 1 0 1" in the transcript), or a list of the local actions the bill would target were specified during the meeting.