TN HB1097

Tennessee Attorney General may review local government actions (ordinances, regulations, policies) for violations of state law or the Tennessee Constitution and must provide written notice identifying specific violations

Local governments have 60 days after receiving notice to either repeal/revise the action to resolve the violation, or challenge the findings by filing a special action before a three-judge panel

If a three-judge panel finds the local government action violates state law or the Constitution, the panel must order the Commissioner of Finance and Administration and State Treasurer to withhold all state funds from that local government, including state-shared taxes and grants

Withheld funds are held in reserve and released once the local government resolves the violation; withholding cannot occur if it would violate federal law, state contracts, court judgments, or constitutional obligations

Takes effect July 1, 2025, applying to local government actions taken on or after that date and funds allocated during or after the 2026-2027 fiscal year