Tenn. Code Ann. § 9-4-602 — TN Code / Title 9 / Chapter 4 / Section 9-4-602
Investment of state funds
Status: in_force

(a) (1) (A) It is the policy of the state of Tennessee that all funds in the state treasury shall be invested by the state treasurer to the extent practicable. (B) (i) Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following: (a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies; (b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations; (c) Repurchase agreements for obligations of the United States or its agencies; (d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107 ; provided, that certificates of deposit are collateralized in accordance with § 9-4-403 ; (e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services; (f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and (g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)( g ), if "eligible collateral" is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)( g ). (ii) Investment in the instruments authorized in subdivisions (a)(1)(B)(i)( e )-( g ) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)( e )-( g ). (C) Included within the policy guidelines approved by the funding board shall be the procedure for determining the interest rate to be paid on investments of the treasury. Each time interest rates are changed, pursuant to the policy, the state treasurer shall report the change to the other members of the funding board. (2) In lieu of actual physical delivery of investments purchased pursuant to this section, the state treasurer may accept trust receipts therefor as provided in § 9-4-408 . (b) (1) In addition to the authority granted in subsection (a), the state funding board may, by resolution duly adopted, authorize the state treasurer to invest so much cash in the state treasury as it may deem appropriate in obligations of the state or any agency of the state maturing in not more than one (1) year from the date of such investment; provided, that the funding board has determined that such obligations could not otherwise be sold in traditional markets at reasonable rates of interest; and provided further, that the yield on such obligations is equal to or greater than, in the determination of the funding board with the concurrence of the state treasurer, the yield of other obligations in which the state could invest at that time under subsection (a). The funding board may, by resolution, establish guidelines and, within such guidelines, delegate the investment authority hereby conferred to the state treasurer. Such obligations, when so purchased, shall be turned over to the state treasurer, whose official bond shall be security for the safekeeping of such obligations. In lieu of actual physical delivery of such obligations so purchased, the state treasurer may accept trust receipts as provided in § 9-4-408 . (2) The funding board and the governing boards of the respective state agencies may authorize the sale of obligations of the state and state agencies, respectively, to the state pursuant to the terms and conditions set forth in this section. (c) (1) The state funding board is authorized to establish policy and procedure for investment of bond proceeds, as defined in subdivision (c)(2), in guaranteed investment contracts, including security requirements, if any. Prior to the adoption or promulgation by the state funding board of such policy and procedures, the entities listed in this subsection (c) may enter into such investments to the extent otherwise authorized by law. Nothing in this subsection (c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for an investment entered into prior to the adoption or promulgation by the state funding board of such policies and procedures. (2) "Bond proceeds" means the proceeds from the sale of bonds, notes, and other obligations issued by the state funding board, the state school bond authority, the local development authority, state housing development agency and the state veterans' homes board, and reserves and funds maintained for debt service purposes. (3) A guaranteed investment contract is an authorized investment for bond proceeds if the guaranteed investment contract: (A) Has a defined termination date no later than five and one-half (5 ½) years from the date of issuance of the debt obligations, except for funds held in a debt service reserve fund, which shall be no later than the final maturity of the debt obligations; and (B) Complies with standards in the policy established by the state funding board, including creditworthiness. (4) The governing body of the entity shall, in the resolution or action authorizing the issuance of bonds, expressly authorize guaranteed investment contracts as an eligible investment. (d) In addition to the authority granted in subsection (a), the state funding board may, in accordance with policy guidelines approved by resolution of the board and duly acknowledged by the finance, ways and means committees of the house of representatives and the senate, authorize the state treasurer to enter into short-term arrangements or obligations not authorized elsewhere in this section for the sole purpose of meeting the liquidity needs of the pooled investment fund. The state treasurer shall report any such arrangements to the finance, ways and means committees of the house of representatives and the senate. Such arrangements or obligations shall not be used for the purposes of speculation, but shall only be used to meet operational liquidity requirements. Amended by 2021EX3 Tenn. Acts, ch. 2, s 8, eff. 11/12/2021. Acts 1985, ch. 118, § 42; 1988, ch. 602, § 1; 1989, ch. 448, §§ 1-3; 1990, ch. 702, § 3; 1996, ch. 621, §§ 16, 17; 2003 , ch. 204, § 1; 2009 , ch. 294, § 1.
(a) (1) (A) It is the policy of the state of Tennessee that all funds in the state treasury shall be invested by the state treasurer to the extent practicable. (B) (i) Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following: (a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies; (b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations; (c) Repurchase agreements for obligations of the United States or its agencies; (d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107 ; provided, that certificates of deposit are collateralized in accordance with § 9-4-403 ; (e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services; (f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and (g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)( g ), if "eligible collateral" is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)( g ). (ii) Investment in the instruments authorized in subdivisions (a)(1)(B)(i)( e )-( g ) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)( e )-( g ). (C) Included within the policy guidelines approved by the funding board shall be the procedure for determining the interest rate to be paid on investments of the treasury. Each time interest rates are changed, pursuant to the policy, the state treasurer shall report the change to the other members of the funding board. (2) In lieu of actual physical delivery of investments purchased pursuant to this section, the state treasurer may accept trust receipts therefor as provided in § 9-4-408 .
(1) (A) It is the policy of the state of Tennessee that all funds in the state treasury shall be invested by the state treasurer to the extent practicable. (B) (i) Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following: (a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies; (b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations; (c) Repurchase agreements for obligations of the United States or its agencies; (d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107 ; provided, that certificates of deposit are collateralized in accordance with § 9-4-403 ; (e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services; (f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and (g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)( g ), if "eligible collateral" is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)( g ). (ii) Investment in the instruments authorized in subdivisions (a)(1)(B)(i)( e )-( g ) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)( e )-( g ). (C) Included within the policy guidelines approved by the funding board shall be the procedure for determining the interest rate to be paid on investments of the treasury. Each time interest rates are changed, pursuant to the policy, the state treasurer shall report the change to the other members of the funding board.
(A) It is the policy of the state of Tennessee that all funds in the state treasury shall be invested by the state treasurer to the extent practicable.
(B) (i) Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following: (a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies; (b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations; (c) Repurchase agreements for obligations of the United States or its agencies; (d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107 ; provided, that certificates of deposit are collateralized in accordance with § 9-4-403 ; (e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services; (f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and (g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)( g ), if "eligible collateral" is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)( g ). (ii) Investment in the instruments authorized in subdivisions (a)(1)(B)(i)( e )-( g ) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)( e )-( g ).
(i) Investments shall be made in accordance with policy guidelines approved by resolution of the state funding board, which may authorize investment in any of the following: (a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies; (b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations; (c) Repurchase agreements for obligations of the United States or its agencies; (d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107 ; provided, that certificates of deposit are collateralized in accordance with § 9-4-403 ; (e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services; (f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and (g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)( g ), if "eligible collateral" is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)( g ).
(a) Bonds, notes and treasury bills of the United States or other obligations guaranteed as to principal and interest by the United States or any of its agencies;
(b) Obligations guaranteed as to principal and interest by the federal home loan mortgage corporation, federal national mortgage association, student loan marketing association and other United States government-sponsored corporations;
(c) Repurchase agreements for obligations of the United States or its agencies;
(d) Certificates of deposit in banks and savings and loan associations recognized as state depositories pursuant to § 9-4-107 ; provided, that certificates of deposit are collateralized in accordance with § 9-4-403 ;
(e) Prime commercial paper which shall be rated in the highest category by at least two (2) commercial paper rating services;
(f) Prime banker's acceptances that are eligible for purchase by the federal reserve system; and
(g) Securities lending agreements whereby securities may be loaned for a fee; provided, that eligible collateral as defined in § 9-4-103 whose market value is at least equal to one hundred two percent (102%) of the value of the borrowed securities shall be required for each loan. For purposes of this subdivision (a)(1)(B)(i)( g ), if "eligible collateral" is pledged as cash, the cash collateral must be equal to at least one hundred percent (100%) of the market value of the borrowed securities. Institutions and other entities governed by the board of trustees of the University of Tennessee or the board of regents do not have the authority to use the investment vehicle established pursuant to this subdivision (a)(1)(B)(i)( g ).
(ii) Investment in the instruments authorized in subdivisions (a)(1)(B)(i)( e )-( g ) shall be prohibited until the state funding board adopts a resolution approving policy guidelines authorizing use of such investment instruments. Such policy guidelines shall include limitations on the amount of funds which may be invested in instruments authorized pursuant to subdivisions (a)(1)(B)(i)( e )-( g ).
(C) Included within the policy guidelines approved by the funding board shall be the procedure for determining the interest rate to be paid on investments of the treasury. Each time interest rates are changed, pursuant to the policy, the state treasurer shall report the change to the other members of the funding board.
(2) In lieu of actual physical delivery of investments purchased pursuant to this section, the state treasurer may accept trust receipts therefor as provided in § 9-4-408 .
(b) (1) In addition to the authority granted in subsection (a), the state funding board may, by resolution duly adopted, authorize the state treasurer to invest so much cash in the state treasury as it may deem appropriate in obligations of the state or any agency of the state maturing in not more than one (1) year from the date of such investment; provided, that the funding board has determined that such obligations could not otherwise be sold in traditional markets at reasonable rates of interest; and provided further, that the yield on such obligations is equal to or greater than, in the determination of the funding board with the concurrence of the state treasurer, the yield of other obligations in which the state could invest at that time under subsection (a). The funding board may, by resolution, establish guidelines and, within such guidelines, delegate the investment authority hereby conferred to the state treasurer. Such obligations, when so purchased, shall be turned over to the state treasurer, whose official bond shall be security for the safekeeping of such obligations. In lieu of actual physical delivery of such obligations so purchased, the state treasurer may accept trust receipts as provided in § 9-4-408 . (2) The funding board and the governing boards of the respective state agencies may authorize the sale of obligations of the state and state agencies, respectively, to the state pursuant to the terms and conditions set forth in this section.
(1) In addition to the authority granted in subsection (a), the state funding board may, by resolution duly adopted, authorize the state treasurer to invest so much cash in the state treasury as it may deem appropriate in obligations of the state or any agency of the state maturing in not more than one (1) year from the date of such investment; provided, that the funding board has determined that such obligations could not otherwise be sold in traditional markets at reasonable rates of interest; and provided further, that the yield on such obligations is equal to or greater than, in the determination of the funding board with the concurrence of the state treasurer, the yield of other obligations in which the state could invest at that time under subsection (a). The funding board may, by resolution, establish guidelines and, within such guidelines, delegate the investment authority hereby conferred to the state treasurer. Such obligations, when so purchased, shall be turned over to the state treasurer, whose official bond shall be security for the safekeeping of such obligations. In lieu of actual physical delivery of such obligations so purchased, the state treasurer may accept trust receipts as provided in § 9-4-408 .
(2) The funding board and the governing boards of the respective state agencies may authorize the sale of obligations of the state and state agencies, respectively, to the state pursuant to the terms and conditions set forth in this section.
(c) (1) The state funding board is authorized to establish policy and procedure for investment of bond proceeds, as defined in subdivision (c)(2), in guaranteed investment contracts, including security requirements, if any. Prior to the adoption or promulgation by the state funding board of such policy and procedures, the entities listed in this subsection (c) may enter into such investments to the extent otherwise authorized by law. Nothing in this subsection (c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for an investment entered into prior to the adoption or promulgation by the state funding board of such policies and procedures. (2) "Bond proceeds" means the proceeds from the sale of bonds, notes, and other obligations issued by the state funding board, the state school bond authority, the local development authority, state housing development agency and the state veterans' homes board, and reserves and funds maintained for debt service purposes. (3) A guaranteed investment contract is an authorized investment for bond proceeds if the guaranteed investment contract: (A) Has a defined termination date no later than five and one-half (5 ½) years from the date of issuance of the debt obligations, except for funds held in a debt service reserve fund, which shall be no later than the final maturity of the debt obligations; and (B) Complies with standards in the policy established by the state funding board, including creditworthiness. (4) The governing body of the entity shall, in the resolution or action authorizing the issuance of bonds, expressly authorize guaranteed investment contracts as an eligible investment.
(1) The state funding board is authorized to establish policy and procedure for investment of bond proceeds, as defined in subdivision (c)(2), in guaranteed investment contracts, including security requirements, if any. Prior to the adoption or promulgation by the state funding board of such policy and procedures, the entities listed in this subsection (c) may enter into such investments to the extent otherwise authorized by law. Nothing in this subsection (c) is intended to alter any existing authority in this chapter or in any other law otherwise providing authority for an investment entered into prior to the adoption or promulgation by the state funding board of such policies and procedures.
(2) "Bond proceeds" means the proceeds from the sale of bonds, notes, and other obligations issued by the state funding board, the state school bond authority, the local development authority, state housing development agency and the state veterans' homes board, and reserves and funds maintained for debt service purposes.
(3) A guaranteed investment contract is an authorized investment for bond proceeds if the guaranteed investment contract: (A) Has a defined termination date no later than five and one-half (5 ½) years from the date of issuance of the debt obligations, except for funds held in a debt service reserve fund, which shall be no later than the final maturity of the debt obligations; and (B) Complies with standards in the policy established by the state funding board, including creditworthiness.
(A) Has a defined termination date no later than five and one-half (5 ½) years from the date of issuance of the debt obligations, except for funds held in a debt service reserve fund, which shall be no later than the final maturity of the debt obligations; and
(B) Complies with standards in the policy established by the state funding board, including creditworthiness.
(4) The governing body of the entity shall, in the resolution or action authorizing the issuance of bonds, expressly authorize guaranteed investment contracts as an eligible investment.
(d) In addition to the authority granted in subsection (a), the state funding board may, in accordance with policy guidelines approved by resolution of the board and duly acknowledged by the finance, ways and means committees of the house of representatives and the senate, authorize the state treasurer to enter into short-term arrangements or obligations not authorized elsewhere in this section for the sole purpose of meeting the liquidity needs of the pooled investment fund. The state treasurer shall report any such arrangements to the finance, ways and means committees of the house of representatives and the senate. Such arrangements or obligations shall not be used for the purposes of speculation, but shall only be used to meet operational liquidity requirements.
Amended by 2021EX3 Tenn. Acts, ch. 2, s 8, eff. 11/12/2021.
Acts 1985, ch. 118, § 42; 1988, ch. 602, § 1; 1989, ch. 448, §§ 1-3; 1990, ch. 702, § 3; 1996, ch. 621, §§ 16, 17; 2003 , ch. 204, § 1; 2009 , ch. 294, § 1.
Tenn. Code Ann. § 9-4-705 — TN Code / Title 9 / Chapter 4 / Section 9-4-705
Application and agreement - Electronic transfers and filing - Redemption of shares
Status: in_force

(a) A local government desiring to participate in the local government investment pool shall submit an application and agreement on a form prescribed by the state treasurer with a resolution passed by the local government's governing body demonstrating approval to participate in the fund. Pursuant to § 9-1-107(b) , the governing body of the local government may delegate revocable investment authority to the financial officer charged with custody of the funds of the local government, who shall thereafter assume full responsibility for transactions with the local government investment pool. (b) Once the application and agreement are approved by the state treasurer, the local government may transfer money to the state treasurer to invest in the local government investment pool and purchase shares in the fund on behalf of the local government. (c) Money transferred by each participating local government to the local government investment pool for investment as an investment or principal payment must be done electronically. Such local governments shall also electronically file any report or other document with which such electronically transferred payment is associated or on which credit for the payment electronically transferred is taken. In extenuating circumstances, the state treasurer may waive the requirements of this section with respect to any local government. To obtain a waiver, the local government shall demonstrate in writing to the state treasurer that such extenuating circumstances exist. (d) At any time, and subject to the limits, conditions, or restrictions imposed by the state funding board, a participant in the fund may request the return of its principal investment or investment income or both; however, a redemption of shares does not guarantee that a participant will receive the entire amount of the principal investment or investment income or both. Amended by 2022 Tenn. Acts, ch. 824, s 5, eff. 4/14/2022. Acts 1985, ch. 118, § 52.
(a) A local government desiring to participate in the local government investment pool shall submit an application and agreement on a form prescribed by the state treasurer with a resolution passed by the local government's governing body demonstrating approval to participate in the fund. Pursuant to § 9-1-107(b) , the governing body of the local government may delegate revocable investment authority to the financial officer charged with custody of the funds of the local government, who shall thereafter assume full responsibility for transactions with the local government investment pool.
(b) Once the application and agreement are approved by the state treasurer, the local government may transfer money to the state treasurer to invest in the local government investment pool and purchase shares in the fund on behalf of the local government.
(c) Money transferred by each participating local government to the local government investment pool for investment as an investment or principal payment must be done electronically. Such local governments shall also electronically file any report or other document with which such electronically transferred payment is associated or on which credit for the payment electronically transferred is taken. In extenuating circumstances, the state treasurer may waive the requirements of this section with respect to any local government. To obtain a waiver, the local government shall demonstrate in writing to the state treasurer that such extenuating circumstances exist.
(d) At any time, and subject to the limits, conditions, or restrictions imposed by the state funding board, a participant in the fund may request the return of its principal investment or investment income or both; however, a redemption of shares does not guarantee that a participant will receive the entire amount of the principal investment or investment income or both.
Amended by 2022 Tenn. Acts, ch. 824, s 5, eff. 4/14/2022.
Acts 1985, ch. 118, § 52.
Tenn. Code Ann. § 9-2-121 — TN Code / Title 9 / Chapter 2 / Section 9-2-121
Failure to pay on warrant
Status: in_force

If such clerk or judge, after settlement and obtaining a warrant to pay into the county treasury the amount found due from such clerk or judge to the county, fails to pay it, the trustee shall, in like manner, cause judgment to be taken against such clerk or judge and the sureties of such clerk or judge for the amount found due the county by the account, with interest thereon from the time the money should have been paid, with twelve and one-half percent (12.5%) damages, and costs. Code 1858, § 516 (deriv. Acts 1839-1840, ch. 85, § 2); Shan., §1027; Code 1932, § 1756; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-221.
If such clerk or judge, after settlement and obtaining a warrant to pay into the county treasury the amount found due from such clerk or judge to the county, fails to pay it, the trustee shall, in like manner, cause judgment to be taken against such clerk or judge and the sureties of such clerk or judge for the amount found due the county by the account, with interest thereon from the time the money should have been paid, with twelve and one-half percent (12.5%) damages, and costs.
Code 1858, § 516 (deriv. Acts 1839-1840, ch. 85, § 2); Shan., §1027; Code 1932, § 1756; impl. am. Acts 1979, ch. 68, §§ 2, 3; T.C.A. (orig. ed.), § 9-221.
Tenn. Code Ann. § 9-4-512 — TN Code / Title 9 / Chapter 4 / Section 9-4-512
Payment of losses - Procedure
Status: in_force

When the state treasurer determines that a default or insolvency has occurred, the state treasurer shall provide notice as required in § 9-4-513 and implement the following procedures: (1) The state treasurer, in cooperation with the commissioner of financial institutions, the appropriate federal regulator, or the conservator or receiver of the qualified public depository in default, shall ascertain the amount of funds of each public depositor on deposit at such depository, the amount of deposit insurance applicable to such deposits and the amount of such deposits which will not be covered through the sale or use of eligible collateral pledged by the defaulting depository; (2) Upon ascertaining the amount of such deposits which will not be covered through any applicable deposit insurance or eligible collateral pledged by the defaulting depository, the state treasurer shall as promptly as possible provide coverage of the remaining loss by assessment against the other qualified public depositories. Such assessment shall be determined by multiplying the total amount of the loss to all public depositors by a percentage which represents the average share of public fund deposits held by that depository during the previous twelve (12) months divided by the average total public deposits held by all depositories during the same twelve-month period, excluding the public deposits of the defaulting depository; (3) Each qualified public depository shall pay its assessment to the state treasurer within five (5) business days after it receives notice of the assessment. If a depository fails to pay its assessment when due, the state treasurer shall satisfy the assessment by selling or using the eligible collateral pledged by that depository; and (4) Public depositors receiving payment under this section shall assign to the state treasurer any interest they may have in funds that may subsequently be made available to the qualified public depository in default. If the qualified public depository in default or its receiver provides the funds to the state treasurer, the state treasurer shall distribute the funds, plus all accrued interest which has accumulated from the investment of the funds, if any, to the depositories which paid assessments on the same pro rata basis as the assessments were paid. Amended by 2021EX3 Tenn. Acts, ch. 2, Secs.s4, s5, s6 eff. 11/12/2021. Acts 1990, ch. 1043, § 1; 1996, ch. 621, § 14; 1997 , ch. 217, § 17.
When the state treasurer determines that a default or insolvency has occurred, the state treasurer shall provide notice as required in § 9-4-513 and implement the following procedures:
(1) The state treasurer, in cooperation with the commissioner of financial institutions, the appropriate federal regulator, or the conservator or receiver of the qualified public depository in default, shall ascertain the amount of funds of each public depositor on deposit at such depository, the amount of deposit insurance applicable to such deposits and the amount of such deposits which will not be covered through the sale or use of eligible collateral pledged by the defaulting depository;
(2) Upon ascertaining the amount of such deposits which will not be covered through any applicable deposit insurance or eligible collateral pledged by the defaulting depository, the state treasurer shall as promptly as possible provide coverage of the remaining loss by assessment against the other qualified public depositories. Such assessment shall be determined by multiplying the total amount of the loss to all public depositors by a percentage which represents the average share of public fund deposits held by that depository during the previous twelve (12) months divided by the average total public deposits held by all depositories during the same twelve-month period, excluding the public deposits of the defaulting depository;
(3) Each qualified public depository shall pay its assessment to the state treasurer within five (5) business days after it receives notice of the assessment. If a depository fails to pay its assessment when due, the state treasurer shall satisfy the assessment by selling or using the eligible collateral pledged by that depository; and
(4) Public depositors receiving payment under this section shall assign to the state treasurer any interest they may have in funds that may subsequently be made available to the qualified public depository in default. If the qualified public depository in default or its receiver provides the funds to the state treasurer, the state treasurer shall distribute the funds, plus all accrued interest which has accumulated from the investment of the funds, if any, to the depositories which paid assessments on the same pro rata basis as the assessments were paid.
Amended by 2021EX3 Tenn. Acts, ch. 2, Secs.s4, s5, s6 eff. 11/12/2021.
Acts 1990, ch. 1043, § 1; 1996, ch. 621, § 14; 1997 , ch. 217, § 17.
Tenn. Code Ann. § 9-20-104 — TN Code / Title 9 / Chapter 20 / Section 9-20-104
Preparation, distribution and contents of allocation plans
Status: in_force

The commissioner shall, prior to January 1 of each year, prepare and distribute an allocation plan for bonds that meets the following goals: (1) Provides equal access to the state bond authority for large cities, small towns and rural areas; and (2) Provides the most benefit to the state from the bond authority available to it. Acts 1985, ch. 237, § 4.
The commissioner shall, prior to January 1 of each year, prepare and distribute an allocation plan for bonds that meets the following goals:
(1) Provides equal access to the state bond authority for large cities, small towns and rural areas; and
(2) Provides the most benefit to the state from the bond authority available to it.
Acts 1985, ch. 237, § 4.
Tenn. Code Ann. § 9-4-1205 — TN Code / Title 9 / Chapter 4 / Section 9-4-1205
Purpose of trust fund - Certification of amount needed to fund increase in employer contribution rate - Use of assets
Status: in_force

(a) As provided in this section, the purpose of the teacher legacy pension stabilization reserve trust fund is to protect teacher members of the legacy plan from a reduction or erosion of funds in the legacy plan that are necessary to pay benefits provided by the plan. If in any given year, the actuarially determined employer contribution rate for teachers exceeds the actuarially determined employer contribution rate for teachers as of fiscal year 2018, the board of trustees of the Tennessee consolidated retirement system may certify to the trustees of the trust the amount necessary to fund the increase in the employer contribution rate for that year. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the teacher legacy pension stabilization reserve trust fund would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the teacher legacy pension stabilization reserve trust fund to the state accumulation fund of the legacy plan. (b) The assets of the teacher legacy pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets. Added by 2017 Tenn. Acts, ch. 374,s 8, eff. 5/11/2017.
(a) As provided in this section, the purpose of the teacher legacy pension stabilization reserve trust fund is to protect teacher members of the legacy plan from a reduction or erosion of funds in the legacy plan that are necessary to pay benefits provided by the plan. If in any given year, the actuarially determined employer contribution rate for teachers exceeds the actuarially determined employer contribution rate for teachers as of fiscal year 2018, the board of trustees of the Tennessee consolidated retirement system may certify to the trustees of the trust the amount necessary to fund the increase in the employer contribution rate for that year. Upon receipt of the certification, the trustees of the trust shall determine whether transferring all or a portion of the requested amount from the teacher legacy pension stabilization reserve trust fund would be in the best interests of the trust beneficiaries. If it is, the trustees shall direct the treasurer to transfer such amount as the trustees shall determine from the teacher legacy pension stabilization reserve trust fund to the state accumulation fund of the legacy plan.
(b) The assets of the teacher legacy pension stabilization reserve trust fund shall be used exclusively for the purpose set forth in this section and to pay the reasonable expenses incurred in administering and investing the trust assets.
Added by 2017 Tenn. Acts, ch. 374,s 8, eff. 5/11/2017.
Tenn. Code Ann. § 9-3-407 — TN Code / Title 9 / Chapter 3 / Section 9-3-407
Corrective action plan
Status: in_force

Each local government with one (1) or more audit findings in its annual audit shall submit a corrective action plan to the comptroller of the treasury or the comptroller's designee in a manner as prescribed by the comptroller or the comptroller's designee that addresses the actions taken or to be taken in response to each audit finding received in the annual audit. The corrective action plan must provide the name or names of the contact person or persons responsible for the corrective action, the corrective action taken or planned, and the anticipated completion date. If the local government does not agree with an audit finding, or believes corrective action is not required, the corrective action plan must state the reasons and justifications for that disagreement or belief. Added by 2017 Tenn. Acts, ch. 383,s 1, eff. 5/18/2017.
Each local government with one (1) or more audit findings in its annual audit shall submit a corrective action plan to the comptroller of the treasury or the comptroller's designee in a manner as prescribed by the comptroller or the comptroller's designee that addresses the actions taken or to be taken in response to each audit finding received in the annual audit. The corrective action plan must provide the name or names of the contact person or persons responsible for the corrective action, the corrective action taken or planned, and the anticipated completion date. If the local government does not agree with an audit finding, or believes corrective action is not required, the corrective action plan must state the reasons and justifications for that disagreement or belief.
Added by 2017 Tenn. Acts, ch. 383,s 1, eff. 5/18/2017.
Tenn. Code Ann. § 9-21-214 — TN Code / Title 9 / Chapter 21 / Section 9-21-214
Powers to secure and to covenant as to general obligation bonds
Status: in_force

In order to secure the payment of the principal of and interest on general obligation bonds issued pursuant to this part and part 1 of this chapter, or in connection with such bonds, any local government has the power as to such bonds to: (1) Pledge the full faith, credit, and unlimited taxing power of the local government as to all taxable property in the local government or a portion of the local government, if applicable, to the punctual payment of the principal of and interest on such bonds; (2) Pledge all or any part of the fees, rents, tolls, interest earnings, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the punctual payment of the principal of and interest on bonds issued to finance such public works project or projects, or any other public works project or projects, and to covenant against thereafter pledging any such fees, rents, tolls, interest earnings or charges to any other bonds or any other obligations of the local government; (3) Provide for the terms, forms, registration, exchange, execution and authentication of the general obligation bonds in a manner not inconsistent with parts 1 and 2 of this chapter; (4) Covenant as to the use and disposition of the proceeds from the sale of the general obligation bonds in a manner not inconsistent with parts 1 and 2 of this chapter; (5) Covenant as to the fees, rents or tolls to be charged in connection with any public works project or projects and as to the use and disposition to be made thereof, and to enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to a public works project which is to be owned or leased by a local government or local government instrumentality; (6) Covenant as to the operation and maintenance of the public works project; (7) Covenant to set aside or pay over reserves and sinking funds for the general obligation bonds and as to the disposition thereof; (8) Redeem the general obligation bonds, and covenant for their redemption and to provide the terms and conditions thereof; (9) Covenant as to its books of account, as to the inspection and audit thereof and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105 . All audits shall be performed in accordance with the standards established by the comptroller of the treasury; (10) Covenant and prescribe as to what occurrences shall constitute "events of default" and the terms and conditions upon which any or all of the general obligation bonds shall become or may be declared due before maturity and to the terms and conditions upon which such declaration and its consequences may be waived; (11) Covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation; (12) Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties; (13) Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the general obligation bonds, or in the discretion of the governing body, to make the general obligation bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the general obligation bonds and for their security that may be consistent with the Constitution of Tennessee; (14) Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the acquisition or construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of the taxing power and in addition to a pledge of rates, fees, rents and charges received or receivable from any sewer system then existing or to be constructed; (15) Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which in its discretion, it may install and operate and maintain beside specified portions of the public streets; (16) Covenant that the costs of operating and maintaining parking facilities payable, in part, from the revenues of such parking facilities shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations; and (17) Covenant and provide for the discharge and satisfaction and defeasance of all or any part of the general obligation bonds and the indebtedness evidenced thereby. Acts 1986, ch. 770, § 2-14.
In order to secure the payment of the principal of and interest on general obligation bonds issued pursuant to this part and part 1 of this chapter, or in connection with such bonds, any local government has the power as to such bonds to:
(1) Pledge the full faith, credit, and unlimited taxing power of the local government as to all taxable property in the local government or a portion of the local government, if applicable, to the punctual payment of the principal of and interest on such bonds;
(2) Pledge all or any part of the fees, rents, tolls, interest earnings, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the punctual payment of the principal of and interest on bonds issued to finance such public works project or projects, or any other public works project or projects, and to covenant against thereafter pledging any such fees, rents, tolls, interest earnings or charges to any other bonds or any other obligations of the local government;
(3) Provide for the terms, forms, registration, exchange, execution and authentication of the general obligation bonds in a manner not inconsistent with parts 1 and 2 of this chapter;
(4) Covenant as to the use and disposition of the proceeds from the sale of the general obligation bonds in a manner not inconsistent with parts 1 and 2 of this chapter;
(5) Covenant as to the fees, rents or tolls to be charged in connection with any public works project or projects and as to the use and disposition to be made thereof, and to enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to a public works project which is to be owned or leased by a local government or local government instrumentality;
(6) Covenant as to the operation and maintenance of the public works project;
(7) Covenant to set aside or pay over reserves and sinking funds for the general obligation bonds and as to the disposition thereof;
(8) Redeem the general obligation bonds, and covenant for their redemption and to provide the terms and conditions thereof;
(9) Covenant as to its books of account, as to the inspection and audit thereof and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105 . All audits shall be performed in accordance with the standards established by the comptroller of the treasury;
(10) Covenant and prescribe as to what occurrences shall constitute "events of default" and the terms and conditions upon which any or all of the general obligation bonds shall become or may be declared due before maturity and to the terms and conditions upon which such declaration and its consequences may be waived;
(11) Covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation;
(12) Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties;
(13) Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the general obligation bonds, or in the discretion of the governing body, to make the general obligation bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the general obligation bonds and for their security that may be consistent with the Constitution of Tennessee;
(14) Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the acquisition or construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of the taxing power and in addition to a pledge of rates, fees, rents and charges received or receivable from any sewer system then existing or to be constructed;
(15) Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which in its discretion, it may install and operate and maintain beside specified portions of the public streets;
(16) Covenant that the costs of operating and maintaining parking facilities payable, in part, from the revenues of such parking facilities shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations; and
(17) Covenant and provide for the discharge and satisfaction and defeasance of all or any part of the general obligation bonds and the indebtedness evidenced thereby.
Acts 1986, ch. 770, § 2-14.
Tenn. Code Ann. § 9-13-204 — TN Code / Title 9 / Chapter 13 / Section 9-13-204
Loan guarantees - Cutoff date for guarantee
Status: in_force

In order to provide emergency technical and financial assistance to a local government, the state funding board is authorized to guarantee the payment of a loan made to a local government by another lender only under the following conditions: (1) A majority of all members constituting the local government legislative body, by resolution, has requested a loan guarantee from the state funding board; (2) The local government legislative body agrees in its resolution requesting a loan guarantee to accept the emergency technical assistance provided by the comptroller of the treasury or the comptroller's designee and to be bound by the decisions of the comptroller of the treasury or the comptroller's designee; (3) The state funding board has determined that current local government revenues are insufficient to pay the annual debt service and costs of operation of such local government or local government service; and (4) The local government legislative body shall submit a plan, subject to approval by the state funding board, for the efficient operations of government services including, where applicable, a plan for the consolidation of services within that local government. Such plan shall include local government tax revenues at least equal to one hundred percent (100%) of that local government's fiscal capacity as determined by the advisory commission on intergovernmental relations. If a local government has not levied taxes at this level, a plan to increase taxes to such level at the earliest practical date must be submitted to and approved by the state funding board. The board's guarantee of the payment of any loan under this part shall be conditioned upon the implementation of the plan required under this section. Acts 1984, ch. 996, § 5; 1992, ch. 526, §§ 1-6; 1995, ch. 63, § 1; 2010, ch. 868, § 36.
In order to provide emergency technical and financial assistance to a local government, the state funding board is authorized to guarantee the payment of a loan made to a local government by another lender only under the following conditions:
(1) A majority of all members constituting the local government legislative body, by resolution, has requested a loan guarantee from the state funding board;
(2) The local government legislative body agrees in its resolution requesting a loan guarantee to accept the emergency technical assistance provided by the comptroller of the treasury or the comptroller's designee and to be bound by the decisions of the comptroller of the treasury or the comptroller's designee;
(3) The state funding board has determined that current local government revenues are insufficient to pay the annual debt service and costs of operation of such local government or local government service; and
(4) The local government legislative body shall submit a plan, subject to approval by the state funding board, for the efficient operations of government services including, where applicable, a plan for the consolidation of services within that local government. Such plan shall include local government tax revenues at least equal to one hundred percent (100%) of that local government's fiscal capacity as determined by the advisory commission on intergovernmental relations. If a local government has not levied taxes at this level, a plan to increase taxes to such level at the earliest practical date must be submitted to and approved by the state funding board. The board's guarantee of the payment of any loan under this part shall be conditioned upon the implementation of the plan required under this section.
Acts 1984, ch. 996, § 5; 1992, ch. 526, §§ 1-6; 1995, ch. 63, § 1; 2010, ch. 868, § 36.
Tenn. Code Ann. § 9-3-504 — TN Code / Title 9 / Chapter 3 / Section 9-3-504
Political subdivisions to develop funding policies
Status: in_force

(a) Notwithstanding any law, rule, ordinance, resolution, charter, pension plan, agreement or pension plan contract to the contrary, the applicable provisions of this part shall apply to any political subdivision in the state that has established and maintains, directly or indirectly, a defined benefit pension plan for the benefits of its employees, irrespective of the manner in which the pension plan is administered. (b) Each political subdivision shall develop a funding policy for financing the obligations under the pension plan. Such funding policy shall be legally adopted and approved through a resolution by the political subdivision's chief legislative body or governing body. The funding policy shall be in effect until amended. Each political subdivision shall develop a funding policy for fiscal years beginning after June 15, 2015. The funding policy and any amendment thereto shall be submitted to the comptroller of the treasury within thirty (30) days after adoption. (c) The political subdivision's funding policy shall include, but not be limited to the following: (1) The ADC for each pension plan shall include the normal costs and the amortization of the unfunded accrued liability, to the extent that any of the plans have any unfunded accrued liability for a particular fiscal year; (2) The maximum amortization period for which any unfunded accrued liabilities will be paid; and (3) A statement that the political subdivision's budget shall include funding of at least one hundred percent (100%) of the ADC, except as provided in § 9-3-505(b) . (d) The actuarial methodology is expected to provide that projected revenues (employer contributions, employee contributions, and investment earnings), and current assets will finance all of the projected benefits (death, disability, and retirement) provided by the plan. In the event that pension plan has an unfunded accrued liability, the level dollar amortization method shall be utilized beginning on or before June 15, 2020, for financing the unfunded accrued liability, and will continue to be utilized thereafter. (e) The ADC calculated by the political subdivision's actuary shall be calculated utilizing the following methodology, and in accordance with the Actuarial Standards of Practice established by the Actuarial Standards Board: (1) Actuarial cost method allocating normal costs over a period beginning no earlier than the date of employment which should not exceed the last assumed retirement age. This method is designed to fully fund the long-term costs of promised benefits, consistent with the objective of keeping contributions relatively stable and equitably allocating the costs over the employees' period of active service. Commencing with the plan fiscal year beginning after June 15, 2019, a generally accepted actuarial method that achieves the above objectives shall be used, except the projected unit credit method is not permitted; (2) Actuarial value of assets calculated using a maximum ten-year asset smoothing period. Any smoothing period greater than five (5) years will have a maximum twenty percent (20%) market corridor. For the purposes of this subsection (e), the term "market corridor" means a range beyond which deviations are not smoothed; (3) No later than the plan fiscal year beginning after June 15, 2020, the level dollar amortization method of unfunded accrued liabilities; (4) Mortality assumptions, which should consider the effect of expected mortality improvements, and shall be utilized beginning on or before the plan fiscal year after June 15, 2024, and will continue to be utilized thereafter; (5) Investment earnings assumption that shall not be greater than fifty (50) basis points above the rate adopted by the Tennessee consolidated retirement system; and (6) A closed amortization period not to exceed thirty (30) years for all unfunded accrued liabilities. (f) The ADC for the political subdivision's pension plan shall be determined by an independent, qualified actuary. (g) The actuary used by the political subdivision shall be a member of the American Academy of Actuaries. (h) The actuary used by a political subdivision for the calculation of the ADC for its pension plan shall not be an employee of that political subdivision, and shall not be otherwise eligible to participate in any of the political subdivision's pension plans. (i) The measurement standard used to determine a pension plan's funded status must be done in accordance with rules, standards, guidelines, and interpretations established by the governmental accounting standards board. (j) The actuary's determinations, including the ADC, shall be contained in a report submitted to the political subdivision and shall include a certification indicating the actuary's report has been prepared in accordance with all of the Actuarial Standards of Practice established by the Actuarial Standards Board as well as an explanation for any deviations. The actuary shall also certify in the report the overall appropriateness of the analysis in addition to the assumptions and results. The assumptions analyzed by the actuary must include, but not be limited to, the following: asset experience, including, but not limited to, the investment rate of return, discount rate, salary experience, cost of living adjustments, rates of retirement, turnover, and disability; mortality, including future improvement; and forms of benefit payments, including, but not limited to, lump sum payments. Amended by 2020 Tenn. Acts, ch. 783, s 1, eff. 7/15/2020. Amended by 2018 Tenn. Acts, ch. 681, s 1, eff. 4/12/2018. Added by 2014 Tenn. Acts, ch. 990,s 3, eff. 5/22/2014.
(a) Notwithstanding any law, rule, ordinance, resolution, charter, pension plan, agreement or pension plan contract to the contrary, the applicable provisions of this part shall apply to any political subdivision in the state that has established and maintains, directly or indirectly, a defined benefit pension plan for the benefits of its employees, irrespective of the manner in which the pension plan is administered.
(b) Each political subdivision shall develop a funding policy for financing the obligations under the pension plan. Such funding policy shall be legally adopted and approved through a resolution by the political subdivision's chief legislative body or governing body. The funding policy shall be in effect until amended. Each political subdivision shall develop a funding policy for fiscal years beginning after June 15, 2015. The funding policy and any amendment thereto shall be submitted to the comptroller of the treasury within thirty (30) days after adoption.
(c) The political subdivision's funding policy shall include, but not be limited to the following: (1) The ADC for each pension plan shall include the normal costs and the amortization of the unfunded accrued liability, to the extent that any of the plans have any unfunded accrued liability for a particular fiscal year; (2) The maximum amortization period for which any unfunded accrued liabilities will be paid; and (3) A statement that the political subdivision's budget shall include funding of at least one hundred percent (100%) of the ADC, except as provided in § 9-3-505(b) .
(1) The ADC for each pension plan shall include the normal costs and the amortization of the unfunded accrued liability, to the extent that any of the plans have any unfunded accrued liability for a particular fiscal year;
(2) The maximum amortization period for which any unfunded accrued liabilities will be paid; and
(3) A statement that the political subdivision's budget shall include funding of at least one hundred percent (100%) of the ADC, except as provided in § 9-3-505(b) .
(d) The actuarial methodology is expected to provide that projected revenues (employer contributions, employee contributions, and investment earnings), and current assets will finance all of the projected benefits (death, disability, and retirement) provided by the plan. In the event that pension plan has an unfunded accrued liability, the level dollar amortization method shall be utilized beginning on or before June 15, 2020, for financing the unfunded accrued liability, and will continue to be utilized thereafter.
(e) The ADC calculated by the political subdivision's actuary shall be calculated utilizing the following methodology, and in accordance with the Actuarial Standards of Practice established by the Actuarial Standards Board: (1) Actuarial cost method allocating normal costs over a period beginning no earlier than the date of employment which should not exceed the last assumed retirement age. This method is designed to fully fund the long-term costs of promised benefits, consistent with the objective of keeping contributions relatively stable and equitably allocating the costs over the employees' period of active service. Commencing with the plan fiscal year beginning after June 15, 2019, a generally accepted actuarial method that achieves the above objectives shall be used, except the projected unit credit method is not permitted; (2) Actuarial value of assets calculated using a maximum ten-year asset smoothing period. Any smoothing period greater than five (5) years will have a maximum twenty percent (20%) market corridor. For the purposes of this subsection (e), the term "market corridor" means a range beyond which deviations are not smoothed; (3) No later than the plan fiscal year beginning after June 15, 2020, the level dollar amortization method of unfunded accrued liabilities; (4) Mortality assumptions, which should consider the effect of expected mortality improvements, and shall be utilized beginning on or before the plan fiscal year after June 15, 2024, and will continue to be utilized thereafter; (5) Investment earnings assumption that shall not be greater than fifty (50) basis points above the rate adopted by the Tennessee consolidated retirement system; and (6) A closed amortization period not to exceed thirty (30) years for all unfunded accrued liabilities.
(1) Actuarial cost method allocating normal costs over a period beginning no earlier than the date of employment which should not exceed the last assumed retirement age. This method is designed to fully fund the long-term costs of promised benefits, consistent with the objective of keeping contributions relatively stable and equitably allocating the costs over the employees' period of active service. Commencing with the plan fiscal year beginning after June 15, 2019, a generally accepted actuarial method that achieves the above objectives shall be used, except the projected unit credit method is not permitted;
(2) Actuarial value of assets calculated using a maximum ten-year asset smoothing period. Any smoothing period greater than five (5) years will have a maximum twenty percent (20%) market corridor. For the purposes of this subsection (e), the term "market corridor" means a range beyond which deviations are not smoothed;
(3) No later than the plan fiscal year beginning after June 15, 2020, the level dollar amortization method of unfunded accrued liabilities;
(4) Mortality assumptions, which should consider the effect of expected mortality improvements, and shall be utilized beginning on or before the plan fiscal year after June 15, 2024, and will continue to be utilized thereafter;
(5) Investment earnings assumption that shall not be greater than fifty (50) basis points above the rate adopted by the Tennessee consolidated retirement system; and
(6) A closed amortization period not to exceed thirty (30) years for all unfunded accrued liabilities.
(f) The ADC for the political subdivision's pension plan shall be determined by an independent, qualified actuary.
(g) The actuary used by the political subdivision shall be a member of the American Academy of Actuaries.
(h) The actuary used by a political subdivision for the calculation of the ADC for its pension plan shall not be an employee of that political subdivision, and shall not be otherwise eligible to participate in any of the political subdivision's pension plans.
(i) The measurement standard used to determine a pension plan's funded status must be done in accordance with rules, standards, guidelines, and interpretations established by the governmental accounting standards board.
(j) The actuary's determinations, including the ADC, shall be contained in a report submitted to the political subdivision and shall include a certification indicating the actuary's report has been prepared in accordance with all of the Actuarial Standards of Practice established by the Actuarial Standards Board as well as an explanation for any deviations. The actuary shall also certify in the report the overall appropriateness of the analysis in addition to the assumptions and results. The assumptions analyzed by the actuary must include, but not be limited to, the following: asset experience, including, but not limited to, the investment rate of return, discount rate, salary experience, cost of living adjustments, rates of retirement, turnover, and disability; mortality, including future improvement; and forms of benefit payments, including, but not limited to, lump sum payments.
Amended by 2020 Tenn. Acts, ch. 783, s 1, eff. 7/15/2020.
Amended by 2018 Tenn. Acts, ch. 681, s 1, eff. 4/12/2018.
Added by 2014 Tenn. Acts, ch. 990,s 3, eff. 5/22/2014.
Tenn. Code Ann. § 9-8-108 — TN Code / Title 9 / Chapter 8 / Section 9-8-108
Powers and duties
Status: in_force

(a) The board of claims: (1) Has the authority, but is not required, to investigate and hear claims and make awards when appropriate in cases based on acts or omissions of state officers or employees where a claim does not fall within the jurisdiction of the claims commission under § 9-8-307(a) . The board of claims shall not have jurisdiction over any claim arising under § 9-8-307(a) , even though the claimant requests punitive damages and/or damages in excess of those set forth in § 9-8-307(e) . No award shall be made unless the board determines that the facts would entitle the claimant to a judgment in action at law. Where the board determines to hear a claim, it may refer the claim to a designee for a hearing and written recommendation to the board on whether or not to make an award. If the recommendation by the designee is against an award or less than the amount requested by the claimant, the claimant shall have the right to an appeal to the board. The board may, in its discretion, hold a hearing or decide the claim on the record. All decisions of the board shall be final; (2) Is authorized to pay final judgments in civil lawsuits against state employees as provided in § 9-8-112 ; (3) Shall review and make recommendations to the commissioner of finance and administration and the general assembly regarding the following: (A) The required funding of the risk management fund; (B) The required funding of the claims commission administrative costs; and (C) Appropriate levels of self-insurance, purchased insurance or any combination thereof for the protection of the state and/or its employees and the required funding for such insurance policies. The recommendation made by the board of claims to the general assembly for excess coverage for the ensuing calendar year pursuant to § 9-8-307(e) may include self-insurance, purchased insurance or any combination of the two (2); (4) Shall review and approve insurance policies designed to pay claims against the state or its employees arising from contract or tort. This responsibility includes the authority to coordinate the purchase of insurance between the various departments, agencies, and institutions, and all other entities created by the state other than counties and municipal corporations in order that adequate protection be given at the least possible cost; (5) Has jurisdiction to hear disputes between the various departments and agencies of the state involving the assignment of losses to individual departments, as well as general responsibility to establish policies governing the administration of the state's contract and tort insurance program; (6) Shall retain consultants as necessary to fully discharge the duties assigned to the board; (7) Shall hear claims for compensation by persons wrongfully imprisoned and granted exoneration pursuant to § 40-27-109 . Any award made by the board pursuant to this subdivision (a)(7) shall be subject to the following conditions: (A) Compensation payable to such persons shall be determined by the board considering all factors the board considers relevant including, but not limited to, the person's physical and mental suffering and loss of earnings; provided, however, that the maximum aggregate total of such compensation shall not exceed one million dollars ($1,000,000); (B) Any amount awarded shall be payable in equal monthly installments until paid in full, unless the person dies prior to receipt of the full amount. The amount of the monthly installments payable under this subdivision (a)(7) shall be calculated by dividing the noncommuted amount, determined pursuant to subdivision (a)(7)(D), by the estimated number of months the claimant will live based upon the claimant's life expectancy at the time of the award as determined from the mortality tables last adopted by the board of trustees of the Tennessee consolidated retirement system pursuant to § 8-34-503 , or based on such shorter period of time as the board, in its discretion, determines appropriate; (C) If the person dies without leaving a surviving spouse or surviving minor children, the payments shall cease. Upon the death of the claimant, any monthly installments left remaining shall be paid to the claimant's surviving spouse and surviving minor children in equal portions. The amount payable to the surviving spouse, if any, shall be paid until the surviving spouse's death or remarriage. If the surviving spouse dies or remarries, then the amount that was payable to the surviving spouse shall be divided equally among the claimant's surviving minor children. Each child shall receive such child's share until reaching majority status or death, whichever occurs first, at which time the amount shall be redistributed equally among the remaining minor children. For purposes of this subdivision (a)(7)(C), "minor" means any person who has not attained eighteen (18) years of age; (D) Upon motion of the claimant or in the discretion of the board, all or a portion of the compensation payable monthly under this subdivision (a)(7) may be commuted to a lump sum payment. In determining whether to commute the compensation, the board shall consider whether there exist special needs warranting such commutation, whether the commutation will be in the best interest of the person and whether that person has the ability to wisely manage and control the commuted award irrespective of whether there exist special needs. The claimant has the burden of proving that a lump sum payment is warranted; (E) (i) In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that: (a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services; (b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and (c) The contract provides for survivor benefits; (ii) The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7); (F) Any claim for compensation under this subdivision (a)(7) must be filed with the board no later than one (1) year from the date that the claimant is granted exoneration pursuant to § 40-27-109 ; (G) The state of Tennessee shall have a right of subrogation as provided by law for any amount awarded pursuant to this subdivision (a)(7) against any person who willfully and intentionally committed an act or engaged in conduct that directly resulted in or contributed to the wrongful conviction and imprisonment of the claimant; and (H) (i) Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to: (a) Reconsider the period of time over which the monthly installments shall be paid; (b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or (c) Both subdivisions (a)(7)(H)(i)( a ) and ( b ); (ii) In determining whether to grant all or any portion of the claimant's request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted; (8) Shall certify the per occurrence limit to the claims commission; (9) Has the authority to hear claims and make awards for property damage caused by an escapee from a state correctional facility; provided, that: (A) The claimant has the burden of proving that the escapee caused the damage, that the proximate cause of the escape was the negligence of a state employee, that the incident giving rise to the loss occurred in the county in which the escape occurred or in a county contiguous to the county in which the escape occurred, that the damage occurred within seventy-two (72) hours of the escape and that the amount requested is not reimbursable from any other source; (B) No award shall be paid if the state correctional facility from which the individual causing such damage escaped is classified as a community service center, a work release center or a nonsecured juvenile facility; (C) No award shall be paid to any individual who aided in the escape of the inmate causing such damage; (D) For purposes of this subdivision (a)(9), negligence shall exist when an employee of the department of correction is disciplined as a result of acts or omissions related to the occurrence of escape; and (E) Claim awards are limited to five thousand dollars ($5,000) per claimant; (10) Is authorized to establish incentive programs for state departments, agencies, and institutions, including public institutions of higher education, for the purpose of reducing liabilities to the risk management fund created pursuant to § 9-8-109 . Such incentive programs may include, but are not limited to, differential premium rates based on participation in loss control programs established by the board of claims; increased or decreased deductibles based on participation in loss control programs established by the board; and the imposition of fines and penalties. An incentive program established pursuant to this subdivision (a)(10) may include, but need not be limited to, policies and procedures for the effective and efficient administration of claims. Such policies and procedures may establish the timeframe and content for the agency response relative to claims and the imposition of fines and penalties for noncompliance. Any such premiums, deductibles, fines, or penalties must be paid from the budget of the respective department, agency, or institution and deposited into the risk management fund; and (11) Is authorized to adopt and publish rules and regulations necessary for the proper performance of its duties. (b) The board of claims may not consider a claim filed more than one (1) year after the occurrence of the incident giving rise to the claim. (c) Prior to the acquisition of any commercial grade motor vehicle that is to be used primarily for transporting nonstudents by any state department, agency, or institution, including any public institution of higher education, such department, agency or institution shall procure bids for obtaining appropriate levels of insurance on such motor vehicle as shall be determined by the board of claims. This subsection (c) shall only apply to commercial grade motor vehicles that are intended to be used ten percent (10%) or more of the time for travel outside this state. The board of claims shall determine by policy the type motor vehicles that shall be considered commercial grade motor vehicles for purposes of this subsection (c). The department, agency or institution shall maintain such insurance coverage during the time the department, agency or institution owns the motor vehicle. The board of claims is authorized, at its discretion, to review and approve the insurance company from which the insurance shall be procured, the amount of the premiums and the period of the insurance policy. For purposes of this section, "acquisition" means by purchase, devise, gift or otherwise. Amended by 2021 Tenn. Acts, ch. 98, s 1, eff. 4/7/2021. Amended by 2013 Tenn. Acts, ch. 164, s 3, eff. 7/1/2013. Acts 1984, ch. 972, § 16; 1986, ch. 626, § 6; 1986, ch. 911, § 5; 1988, ch. 467, § 1; 1988, ch. 701, § 1; 2003 , ch. 212, § 4; 2004, ch. 880, § 1; 2010 , ch. 946, § 1; 2010 , ch. 993, § 1; 2012, ch. 1055, §§ 1, 2.
(a) The board of claims: (1) Has the authority, but is not required, to investigate and hear claims and make awards when appropriate in cases based on acts or omissions of state officers or employees where a claim does not fall within the jurisdiction of the claims commission under § 9-8-307(a) . The board of claims shall not have jurisdiction over any claim arising under § 9-8-307(a) , even though the claimant requests punitive damages and/or damages in excess of those set forth in § 9-8-307(e) . No award shall be made unless the board determines that the facts would entitle the claimant to a judgment in action at law. Where the board determines to hear a claim, it may refer the claim to a designee for a hearing and written recommendation to the board on whether or not to make an award. If the recommendation by the designee is against an award or less than the amount requested by the claimant, the claimant shall have the right to an appeal to the board. The board may, in its discretion, hold a hearing or decide the claim on the record. All decisions of the board shall be final; (2) Is authorized to pay final judgments in civil lawsuits against state employees as provided in § 9-8-112 ; (3) Shall review and make recommendations to the commissioner of finance and administration and the general assembly regarding the following: (A) The required funding of the risk management fund; (B) The required funding of the claims commission administrative costs; and (C) Appropriate levels of self-insurance, purchased insurance or any combination thereof for the protection of the state and/or its employees and the required funding for such insurance policies. The recommendation made by the board of claims to the general assembly for excess coverage for the ensuing calendar year pursuant to § 9-8-307(e) may include self-insurance, purchased insurance or any combination of the two (2); (4) Shall review and approve insurance policies designed to pay claims against the state or its employees arising from contract or tort. This responsibility includes the authority to coordinate the purchase of insurance between the various departments, agencies, and institutions, and all other entities created by the state other than counties and municipal corporations in order that adequate protection be given at the least possible cost; (5) Has jurisdiction to hear disputes between the various departments and agencies of the state involving the assignment of losses to individual departments, as well as general responsibility to establish policies governing the administration of the state's contract and tort insurance program; (6) Shall retain consultants as necessary to fully discharge the duties assigned to the board; (7) Shall hear claims for compensation by persons wrongfully imprisoned and granted exoneration pursuant to § 40-27-109 . Any award made by the board pursuant to this subdivision (a)(7) shall be subject to the following conditions: (A) Compensation payable to such persons shall be determined by the board considering all factors the board considers relevant including, but not limited to, the person's physical and mental suffering and loss of earnings; provided, however, that the maximum aggregate total of such compensation shall not exceed one million dollars ($1,000,000); (B) Any amount awarded shall be payable in equal monthly installments until paid in full, unless the person dies prior to receipt of the full amount. The amount of the monthly installments payable under this subdivision (a)(7) shall be calculated by dividing the noncommuted amount, determined pursuant to subdivision (a)(7)(D), by the estimated number of months the claimant will live based upon the claimant's life expectancy at the time of the award as determined from the mortality tables last adopted by the board of trustees of the Tennessee consolidated retirement system pursuant to § 8-34-503 , or based on such shorter period of time as the board, in its discretion, determines appropriate; (C) If the person dies without leaving a surviving spouse or surviving minor children, the payments shall cease. Upon the death of the claimant, any monthly installments left remaining shall be paid to the claimant's surviving spouse and surviving minor children in equal portions. The amount payable to the surviving spouse, if any, shall be paid until the surviving spouse's death or remarriage. If the surviving spouse dies or remarries, then the amount that was payable to the surviving spouse shall be divided equally among the claimant's surviving minor children. Each child shall receive such child's share until reaching majority status or death, whichever occurs first, at which time the amount shall be redistributed equally among the remaining minor children. For purposes of this subdivision (a)(7)(C), "minor" means any person who has not attained eighteen (18) years of age; (D) Upon motion of the claimant or in the discretion of the board, all or a portion of the compensation payable monthly under this subdivision (a)(7) may be commuted to a lump sum payment. In determining whether to commute the compensation, the board shall consider whether there exist special needs warranting such commutation, whether the commutation will be in the best interest of the person and whether that person has the ability to wisely manage and control the commuted award irrespective of whether there exist special needs. The claimant has the burden of proving that a lump sum payment is warranted; (E) (i) In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that: (a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services; (b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and (c) The contract provides for survivor benefits; (ii) The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7); (F) Any claim for compensation under this subdivision (a)(7) must be filed with the board no later than one (1) year from the date that the claimant is granted exoneration pursuant to § 40-27-109 ; (G) The state of Tennessee shall have a right of subrogation as provided by law for any amount awarded pursuant to this subdivision (a)(7) against any person who willfully and intentionally committed an act or engaged in conduct that directly resulted in or contributed to the wrongful conviction and imprisonment of the claimant; and (H) (i) Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to: (a) Reconsider the period of time over which the monthly installments shall be paid; (b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or (c) Both subdivisions (a)(7)(H)(i)( a ) and ( b ); (ii) In determining whether to grant all or any portion of the claimant's request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted; (8) Shall certify the per occurrence limit to the claims commission; (9) Has the authority to hear claims and make awards for property damage caused by an escapee from a state correctional facility; provided, that: (A) The claimant has the burden of proving that the escapee caused the damage, that the proximate cause of the escape was the negligence of a state employee, that the incident giving rise to the loss occurred in the county in which the escape occurred or in a county contiguous to the county in which the escape occurred, that the damage occurred within seventy-two (72) hours of the escape and that the amount requested is not reimbursable from any other source; (B) No award shall be paid if the state correctional facility from which the individual causing such damage escaped is classified as a community service center, a work release center or a nonsecured juvenile facility; (C) No award shall be paid to any individual who aided in the escape of the inmate causing such damage; (D) For purposes of this subdivision (a)(9), negligence shall exist when an employee of the department of correction is disciplined as a result of acts or omissions related to the occurrence of escape; and (E) Claim awards are limited to five thousand dollars ($5,000) per claimant; (10) Is authorized to establish incentive programs for state departments, agencies, and institutions, including public institutions of higher education, for the purpose of reducing liabilities to the risk management fund created pursuant to § 9-8-109 . Such incentive programs may include, but are not limited to, differential premium rates based on participation in loss control programs established by the board of claims; increased or decreased deductibles based on participation in loss control programs established by the board; and the imposition of fines and penalties. An incentive program established pursuant to this subdivision (a)(10) may include, but need not be limited to, policies and procedures for the effective and efficient administration of claims. Such policies and procedures may establish the timeframe and content for the agency response relative to claims and the imposition of fines and penalties for noncompliance. Any such premiums, deductibles, fines, or penalties must be paid from the budget of the respective department, agency, or institution and deposited into the risk management fund; and (11) Is authorized to adopt and publish rules and regulations necessary for the proper performance of its duties.
(1) Has the authority, but is not required, to investigate and hear claims and make awards when appropriate in cases based on acts or omissions of state officers or employees where a claim does not fall within the jurisdiction of the claims commission under § 9-8-307(a) . The board of claims shall not have jurisdiction over any claim arising under § 9-8-307(a) , even though the claimant requests punitive damages and/or damages in excess of those set forth in § 9-8-307(e) . No award shall be made unless the board determines that the facts would entitle the claimant to a judgment in action at law. Where the board determines to hear a claim, it may refer the claim to a designee for a hearing and written recommendation to the board on whether or not to make an award. If the recommendation by the designee is against an award or less than the amount requested by the claimant, the claimant shall have the right to an appeal to the board. The board may, in its discretion, hold a hearing or decide the claim on the record. All decisions of the board shall be final;
(2) Is authorized to pay final judgments in civil lawsuits against state employees as provided in § 9-8-112 ;
(3) Shall review and make recommendations to the commissioner of finance and administration and the general assembly regarding the following: (A) The required funding of the risk management fund; (B) The required funding of the claims commission administrative costs; and (C) Appropriate levels of self-insurance, purchased insurance or any combination thereof for the protection of the state and/or its employees and the required funding for such insurance policies. The recommendation made by the board of claims to the general assembly for excess coverage for the ensuing calendar year pursuant to § 9-8-307(e) may include self-insurance, purchased insurance or any combination of the two (2);
(A) The required funding of the risk management fund;
(B) The required funding of the claims commission administrative costs; and
(C) Appropriate levels of self-insurance, purchased insurance or any combination thereof for the protection of the state and/or its employees and the required funding for such insurance policies. The recommendation made by the board of claims to the general assembly for excess coverage for the ensuing calendar year pursuant to § 9-8-307(e) may include self-insurance, purchased insurance or any combination of the two (2);
(4) Shall review and approve insurance policies designed to pay claims against the state or its employees arising from contract or tort. This responsibility includes the authority to coordinate the purchase of insurance between the various departments, agencies, and institutions, and all other entities created by the state other than counties and municipal corporations in order that adequate protection be given at the least possible cost;
(5) Has jurisdiction to hear disputes between the various departments and agencies of the state involving the assignment of losses to individual departments, as well as general responsibility to establish policies governing the administration of the state's contract and tort insurance program;
(6) Shall retain consultants as necessary to fully discharge the duties assigned to the board;
(7) Shall hear claims for compensation by persons wrongfully imprisoned and granted exoneration pursuant to § 40-27-109 . Any award made by the board pursuant to this subdivision (a)(7) shall be subject to the following conditions: (A) Compensation payable to such persons shall be determined by the board considering all factors the board considers relevant including, but not limited to, the person's physical and mental suffering and loss of earnings; provided, however, that the maximum aggregate total of such compensation shall not exceed one million dollars ($1,000,000); (B) Any amount awarded shall be payable in equal monthly installments until paid in full, unless the person dies prior to receipt of the full amount. The amount of the monthly installments payable under this subdivision (a)(7) shall be calculated by dividing the noncommuted amount, determined pursuant to subdivision (a)(7)(D), by the estimated number of months the claimant will live based upon the claimant's life expectancy at the time of the award as determined from the mortality tables last adopted by the board of trustees of the Tennessee consolidated retirement system pursuant to § 8-34-503 , or based on such shorter period of time as the board, in its discretion, determines appropriate; (C) If the person dies without leaving a surviving spouse or surviving minor children, the payments shall cease. Upon the death of the claimant, any monthly installments left remaining shall be paid to the claimant's surviving spouse and surviving minor children in equal portions. The amount payable to the surviving spouse, if any, shall be paid until the surviving spouse's death or remarriage. If the surviving spouse dies or remarries, then the amount that was payable to the surviving spouse shall be divided equally among the claimant's surviving minor children. Each child shall receive such child's share until reaching majority status or death, whichever occurs first, at which time the amount shall be redistributed equally among the remaining minor children. For purposes of this subdivision (a)(7)(C), "minor" means any person who has not attained eighteen (18) years of age; (D) Upon motion of the claimant or in the discretion of the board, all or a portion of the compensation payable monthly under this subdivision (a)(7) may be commuted to a lump sum payment. In determining whether to commute the compensation, the board shall consider whether there exist special needs warranting such commutation, whether the commutation will be in the best interest of the person and whether that person has the ability to wisely manage and control the commuted award irrespective of whether there exist special needs. The claimant has the burden of proving that a lump sum payment is warranted; (E) (i) In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that: (a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services; (b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and (c) The contract provides for survivor benefits; (ii) The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7); (F) Any claim for compensation under this subdivision (a)(7) must be filed with the board no later than one (1) year from the date that the claimant is granted exoneration pursuant to § 40-27-109 ; (G) The state of Tennessee shall have a right of subrogation as provided by law for any amount awarded pursuant to this subdivision (a)(7) against any person who willfully and intentionally committed an act or engaged in conduct that directly resulted in or contributed to the wrongful conviction and imprisonment of the claimant; and (H) (i) Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to: (a) Reconsider the period of time over which the monthly installments shall be paid; (b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or (c) Both subdivisions (a)(7)(H)(i)( a ) and ( b ); (ii) In determining whether to grant all or any portion of the claimant's request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted;
(A) Compensation payable to such persons shall be determined by the board considering all factors the board considers relevant including, but not limited to, the person's physical and mental suffering and loss of earnings; provided, however, that the maximum aggregate total of such compensation shall not exceed one million dollars ($1,000,000);
(B) Any amount awarded shall be payable in equal monthly installments until paid in full, unless the person dies prior to receipt of the full amount. The amount of the monthly installments payable under this subdivision (a)(7) shall be calculated by dividing the noncommuted amount, determined pursuant to subdivision (a)(7)(D), by the estimated number of months the claimant will live based upon the claimant's life expectancy at the time of the award as determined from the mortality tables last adopted by the board of trustees of the Tennessee consolidated retirement system pursuant to § 8-34-503 , or based on such shorter period of time as the board, in its discretion, determines appropriate;
(C) If the person dies without leaving a surviving spouse or surviving minor children, the payments shall cease. Upon the death of the claimant, any monthly installments left remaining shall be paid to the claimant's surviving spouse and surviving minor children in equal portions. The amount payable to the surviving spouse, if any, shall be paid until the surviving spouse's death or remarriage. If the surviving spouse dies or remarries, then the amount that was payable to the surviving spouse shall be divided equally among the claimant's surviving minor children. Each child shall receive such child's share until reaching majority status or death, whichever occurs first, at which time the amount shall be redistributed equally among the remaining minor children. For purposes of this subdivision (a)(7)(C), "minor" means any person who has not attained eighteen (18) years of age;
(D) Upon motion of the claimant or in the discretion of the board, all or a portion of the compensation payable monthly under this subdivision (a)(7) may be commuted to a lump sum payment. In determining whether to commute the compensation, the board shall consider whether there exist special needs warranting such commutation, whether the commutation will be in the best interest of the person and whether that person has the ability to wisely manage and control the commuted award irrespective of whether there exist special needs. The claimant has the burden of proving that a lump sum payment is warranted;
(E) (i) In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that: (a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services; (b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and (c) The contract provides for survivor benefits; (ii) The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7);
(i) In the event compensation is awarded to a claimant pursuant to this subdivision (a)(7), the board, at the request of the claimant, may fund on behalf of such claimant an annuity contract to be secured by the claimant; provided, however, that: (a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services; (b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and (c) The contract provides for survivor benefits;
(a) Such contract shall only be secured from an insurance company licensed under the laws of this state whose claims paying ability is rated as superior or excellent by at least two (2) nationally recognized rating services;
(b) The contract, by its terms, cannot be sold, transferred, assigned, discounted or used as security for a loan; and
(c) The contract provides for survivor benefits;
(ii) The cost of any such annuity contract shall be paid from the compensation awarded to the claimant under this subdivision (a)(7);
(F) Any claim for compensation under this subdivision (a)(7) must be filed with the board no later than one (1) year from the date that the claimant is granted exoneration pursuant to § 40-27-109 ;
(G) The state of Tennessee shall have a right of subrogation as provided by law for any amount awarded pursuant to this subdivision (a)(7) against any person who willfully and intentionally committed an act or engaged in conduct that directly resulted in or contributed to the wrongful conviction and imprisonment of the claimant; and
(H) (i) Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to: (a) Reconsider the period of time over which the monthly installments shall be paid; (b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or (c) Both subdivisions (a)(7)(H)(i)( a ) and ( b ); (ii) In determining whether to grant all or any portion of the claimant's request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted;
(i) Any claimant awarded compensation pursuant to this subdivision (a)(7) that did not involve the funding of an annuity contract pursuant to subdivision (a)(7)(E) may, after three (3) years from the initial award and once every three-year period thereafter, file a petition with the board requesting the board to: (a) Reconsider the period of time over which the monthly installments shall be paid; (b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or (c) Both subdivisions (a)(7)(H)(i)( a ) and ( b );
(a) Reconsider the period of time over which the monthly installments shall be paid;
(b) Commute to a lump sum payment all or a portion of the compensation left remaining to be paid monthly under subdivision (a)(7)(B); or
(c) Both subdivisions (a)(7)(H)(i)( a ) and ( b );
(ii) In determining whether to grant all or any portion of the claimant's request, the board shall consider whether there exists special needs warranting the request, whether the granting of the request will be in the best interest of the claimant and, if the request involves a commutation to a lump sum, whether the claimant has the ability to wisely manage and control the commuted amount irrespective of whether there exists special needs. The claimant has the burden of proving that the request is warranted;
(8) Shall certify the per occurrence limit to the claims commission;
(9) Has the authority to hear claims and make awards for property damage caused by an escapee from a state correctional facility; provided, that: (A) The claimant has the burden of proving that the escapee caused the damage, that the proximate cause of the escape was the negligence of a state employee, that the incident giving rise to the loss occurred in the county in which the escape occurred or in a county contiguous to the county in which the escape occurred, that the damage occurred within seventy-two (72) hours of the escape and that the amount requested is not reimbursable from any other source; (B) No award shall be paid if the state correctional facility from which the individual causing such damage escaped is classified as a community service center, a work release center or a nonsecured juvenile facility; (C) No award shall be paid to any individual who aided in the escape of the inmate causing such damage; (D) For purposes of this subdivision (a)(9), negligence shall exist when an employee of the department of correction is disciplined as a result of acts or omissions related to the occurrence of escape; and (E) Claim awards are limited to five thousand dollars ($5,000) per claimant;
(A) The claimant has the burden of proving that the escapee caused the damage, that the proximate cause of the escape was the negligence of a state employee, that the incident giving rise to the loss occurred in the county in which the escape occurred or in a county contiguous to the county in which the escape occurred, that the damage occurred within seventy-two (72) hours of the escape and that the amount requested is not reimbursable from any other source;
(B) No award shall be paid if the state correctional facility from which the individual causing such damage escaped is classified as a community service center, a work release center or a nonsecured juvenile facility;
(C) No award shall be paid to any individual who aided in the escape of the inmate causing such damage;
(D) For purposes of this subdivision (a)(9), negligence shall exist when an employee of the department of correction is disciplined as a result of acts or omissions related to the occurrence of escape; and
(E) Claim awards are limited to five thousand dollars ($5,000) per claimant;
(10) Is authorized to establish incentive programs for state departments, agencies, and institutions, including public institutions of higher education, for the purpose of reducing liabilities to the risk management fund created pursuant to § 9-8-109 . Such incentive programs may include, but are not limited to, differential premium rates based on participation in loss control programs established by the board of claims; increased or decreased deductibles based on participation in loss control programs established by the board; and the imposition of fines and penalties. An incentive program established pursuant to this subdivision (a)(10) may include, but need not be limited to, policies and procedures for the effective and efficient administration of claims. Such policies and procedures may establish the timeframe and content for the agency response relative to claims and the imposition of fines and penalties for noncompliance. Any such premiums, deductibles, fines, or penalties must be paid from the budget of the respective department, agency, or institution and deposited into the risk management fund; and
(11) Is authorized to adopt and publish rules and regulations necessary for the proper performance of its duties.
(b) The board of claims may not consider a claim filed more than one (1) year after the occurrence of the incident giving rise to the claim.
(c) Prior to the acquisition of any commercial grade motor vehicle that is to be used primarily for transporting nonstudents by any state department, agency, or institution, including any public institution of higher education, such department, agency or institution shall procure bids for obtaining appropriate levels of insurance on such motor vehicle as shall be determined by the board of claims. This subsection (c) shall only apply to commercial grade motor vehicles that are intended to be used ten percent (10%) or more of the time for travel outside this state. The board of claims shall determine by policy the type motor vehicles that shall be considered commercial grade motor vehicles for purposes of this subsection (c). The department, agency or institution shall maintain such insurance coverage during the time the department, agency or institution owns the motor vehicle. The board of claims is authorized, at its discretion, to review and approve the insurance company from which the insurance shall be procured, the amount of the premiums and the period of the insurance policy. For purposes of this section, "acquisition" means by purchase, devise, gift or otherwise.
Amended by 2021 Tenn. Acts, ch. 98, s 1, eff. 4/7/2021.
Amended by 2013 Tenn. Acts, ch. 164, s 3, eff. 7/1/2013.
Acts 1984, ch. 972, § 16; 1986, ch. 626, § 6; 1986, ch. 911, § 5; 1988, ch. 467, § 1; 1988, ch. 701, § 1; 2003 , ch. 212, § 4; 2004, ch. 880, § 1; 2010 , ch. 946, § 1; 2010 , ch. 993, § 1; 2012, ch. 1055, §§ 1, 2.