HB 2669 / SB 2731 Summary (Tennessee, 114th Legislature)
Purpose
- The bill replaces Benton County Chapter 541 (Private Acts of 1939, as amended) with a modernized framework for county financial management. It covers budgeting, investment oversight, debt management, and cash management, aiming to create a comprehensive, accountable system for county finances.
Key provisions and changes
- Definitions and framework:
- Establishes clear definitions for terms such as budget, official of the county, budget committee, expenditure, obligation, and county legislative body.
- Budget Committee (Section 3):
- Creates a Budget Committee of up to five members from the County Legislative Body.
- Committee compensation: per diem as set by the County Legislative Body; may hire staff to assist with budget preparation; can approve compensation for support.
- Authority to employ necessary help for budget work.
- Budget preparation and deadlines (Section 4):
- Budget preparation begins after the second Monday of March.
- Requires a complete, itemized, function/classified budget for the ensuing fiscal year (starting July 1, or other date per law).
- Budget must show prior year, current year, and proposed year figures; include revenue sources (including borrowings) and a full balance sheet of each fund.
- Public transparency and hearings (Section 5):
- Summaries of the budget posted publicly; copies provided to County Legislative Body members.
- Public hearings with at least five days’ notice; citizens may speak.
- Budget submitted to the County Legislative Body with a recommendation; not mandatory to adopt the committee’s recommendation.
- If not adopted, the budget can be sent back up to two times; a third failure triggers the County Legislative Body to prepare and adopt its own budget, based on the committee’s estimates but with authority to adjust appropriations.
- Tax levy to balance the budget: mandatory resolution to fix a tax rate based on current collection experience; potential to use available fund balance to balance the budget; tax rate calculation uses prior year cash collection experience.
- Target: adoption of the budget by July 1, with potential extension granted by the State Comptroller for extraordinary circumstances (beyond August 31).
- Budget balancing (Section 6):
- Balancing elements include: interest and sinking funds for debt, principal payments; any cash deficits from outstanding obligations; and required information from all departments (including authorized positions) to be included in the final budget.
- School funds: School Board and County Director of Schools must provide an itemized school budget consistent with Sections 5 and 6 for inclusion with the county budget.
- Reporting requirements (Section 7):
- Before the July meeting, or when budget is passed, the county must produce a statement showing receipts and disbursements for the prior 12 months; posted at the courthouse.
- Accounting and expenditures (Section 8):
- The County Mayor to maintain accounts classified by function/activities.
- All officials must obtain a purchase order and use a requisition process showing unexpended balances before expenditures.
- Accountability and overdrafts (Section 9):
- Officials overdrafting or spending beyond appropriations can be held personally liable, including bonds and potential debt actions to recover funds.
- Unappropriated expenditures (Section 10):
- Expenditures not provided in the budget require unassigned fund balance and a two-thirds County Legislative Body vote.
- Idle funds and investment (Section 11):
- Establishes policies for investing idle county cash in line with Tennessee law (Tenn. Code Ann. 5-8-301).
- Ethics and conflicts (Section 12):
- Prohibits financial interests by officials, employees, or their spouses in county purchasing.
- Misconduct and enforcement (Section 13):
- Violations constitute official misconduct; the county attorney is directed to investigate and, if warranted, pursue ouster under state law.
- Severability and housekeeping (Sections 14-16):
- Provisions are severable; act supersedes conflicting private acts; dates may be adjusted for emergencies or legal changes with temporary approval by the County Legislative Body.
- Conditions to effectiveness:
- The act takes effect only if approved by two-thirds of the Benton County Legislative Body.
- Upon approval, it becomes effective as stated in the act.
Who is affected
- Benton County government leadership (County Legislative Body, County Mayor, Budget Committee, County Clerk/Trustee, and department heads).
- Benton County School Board and Benton County Director of Schools (budget alignment).
- County employees and officials responsible for expenditures and approvals.
- County residents, who gain increased budget transparency and public oversight through posted budget summaries and public hearings.
Procedural and timeline aspects
- Budget cycle: begins after the second Monday in March; budget year runs July 1 to June 30 (or as legally defined).
- Public process: requires public hearings at least five days prior to adoption; multiple review cycles allowed (up to two reviews after initial submission; a third failure triggers county-adopted budget).
- Tax rate: adopted to balance the budget based on current-year collection experience; potential use of fund balance permitted under specified rules.
- Effective date: contingent on two-thirds vote of Benton County Legislative Body.
Notes
- The bill would supersede existing private acts for Benton County upon passage and effective date.
- It includes typical safeguards for financial control, accountability, and oversight, with explicit penalties for overdrafts and conflicts of interest.
