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SB 2731

Benton County - Subject to local approval, updates the system for the management of county finances, including, but not limited to, budgeting, investment oversight, debt management, and cash management oversight. - Amends Chapter 541 of the Private Acts of 1939; as amended and rewritten.

114th Regular Session (2025-2026)

Rewrites Benton County finances into a modern, transparent budgeting system with strict controls, oversight, and potential personal liability for overdrafts.

Passed on Second Consideration, held on desk. Local Bill
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Bill Summary · SB 2731

Summary of Bill SB 2731 (Session 114) – Benton County, Tennessee

Note: This summary focuses on the substantive provisions and potential impacts of the bill as drafted. It is intended to be neutral and informative.

Basic purpose

  • Rewrites and modernizes Benton County’s statutory framework for managing county finances.
  • The bill replaces Chapter 541 of the Private Acts of 1939 (as amended) with a new structure focused on budgeting, investment oversight, debt management, and cash management.
  • Substantively, it aims to create a modern, transparent, and accountable system for county finances.

Key provisions and changes

Section 1 — Overall purpose

  • Establishes a modern system for county finances, including budgeting, investment oversight, debt management, and cash management oversight.

Section 2 — Definitions

  • Clarifies key terms used throughout the act, including:
    • Budget: appropriation of money for each department/activity for the fiscal year.
    • Official of the county: anyone authorized to draw from the Trustee and expend county funds.
    • Budget Committee: a five-member committee appointed by the County Legislative Body.
    • Expenditure/Obligation: definitions for spending and legal commitments.
    • County Legislative Body: the county’s legislative body.

Section 3 — Budget Committee

  • Creates a Budget Committee of up to five County Legislative Body members.
  • Committee members are appointed by the Chairman and confirmed by the County Legislative Body.
  • Committee members receive a per diem as set by the County Legislative Body.
  • Committee has authority to hire staff to assist with budget preparation and to fix pay for those services.

Section 4 — Budget preparation timeline and content

  • The Budget Committee begins preparing a budget after the second Monday in March.
  • The budget must include:
    • itemized expenditures by function/activity,
    • estimated revenues (including borrowings),
    • a financial balance sheet for each fund,
    • comparisons to prior and current years’ appropriations and expenditures.
  • The budget is prepared for the upcoming appropriation year (beginning July 1 unless another date is set by law).

Section 5 — Budget hearings and adoption process

  • A brief synopsis of the budget must be posted publicly.
  • Public hearings must be held with at least five days’ notice.
  • The Budget Committee presents the budget to the County Legislative Body with recommendations.
  • The County Legislative Body can adopt the Budget Committee’s budget or return it for revision up to two times.
  • If the budget fails a third time, the County Legislative Body adopts its own budget, using the budget estimate as a baseline but with discretionary appropriations.
  • Tax rates: the County Legislative Body must adopt a tax rate to balance the budget, based on current-year collection experience; the rate should be calculated to balance the budget with available funds as of the previous year.
  • Budget should be adopted by July 1, or as extended by the State Comptroller for extraordinary circumstances (up to August 31).

Section 6 — Contents and constraints of the balanced budget

  • Establishes what must be included to balance the budget, including:
    • Interest, sinking funds, and principal payments for debt,
    • Cash deficits and outstanding obligations,
    • Information from all departments (including number of authorized positions),
    • School funds: the Benton County School Board and Director of Schools must provide a detailed budget estimate for maintenance and operation for the upcoming year.
  • Ensures budgeting alignment with state requirements and maintenance-of-effort constraints.

Section 7 — Reporting of receipts and disbursements

  • Monthly or yearly (immediately prior to July meeting) financial statement showing aggregate receipts and disbursements for the prior 12 months.
  • Statement to be posted publicly (courthouse bulletin board).

Section 8 — Accounting and purchasing controls

  • County Mayor must install and maintain a standardized accounting system showing appropriations, expenditures, and unexpended balances.
  • All expenditures require a requisition and purchase order showing unexpended balances.

Section 9 — Over-expenditure liability

  • If an official spends more than appropriations or available funds, the official and bondsmen may be personally liable.
  • The county and/or payee may pursue legal action to recover overdrafts with interest from the date of issuance.

Section 10 — Unappropriated fund balance

  • Appropriations not included in the budget may be made from unassigned fund balance with a two-thirds County Legislative Body vote.

Section 11 — Investment of idle funds

  • The County Legislative Body will establish policies for investing idle funds in accordance with state law (Tenn. Code Ann. § 5-8-301).

Section 12 — Ethics and conflicts of interest

  • Prohibits financial interests by the County Legislative Body, Budget Committee, Board of Education, Highway Department, or their spouses in county purchases.

Section 13 — Official misconduct and enforcement

  • Violations can lead to removal from office.
  • The County Attorney is directed to investigate and, if warranted, pursue ouster under state law on misconduct grounds.

Section 14–15 — Severability and date modifications

  • Provisions are severable.
  • Dates may be adjusted for changes in law or emergencies, with temporary modifications approved by the County Legislative Body.

Section 16 — Supersession

  • Upon becoming effective, this Act supersedes conflicting private acts or amendments for Benton County.

Effective date and approval

  • The act requires approval by a two-thirds vote of the Benton County legislative body.
  • Once approved locally, the act becomes effective as provided in statute (Section 3), with the threshold requirement and proclamation processes outlined.

Who is affected

  • Benton County Legislative Body, County Mayor, Budget Committee, and county department heads.
  • Benton County School Board and Director of Schools (financial planning alignment with the county budget).
  • County employees and officials who authorize or incur expenditures.
  • Spouses of certain county officials (due to conflict-of-interest provisions).

Potential impacts

  • Creates a formal, modern budgeting process with clearer timelines and accountability.
  • Strengthens financial controls and oversight for expenditures and debt service.
  • Improves transparency through public posting of budgets and annual receipts/disbursements.
  • Introduces personal liability for overdrafts by county officials.
  • Aligns county budgeting with state law requirements, including maintenance-of-effort for education and debt management.
  • Adds ethics and enforcement mechanisms to deter mismanagement.

If you’d like, I can provide a side-by-side comparison with the current Benton County financing framework or extract a plain-language briefing for a non-expert audience.

Compiled from official sources — confirm details with the bill’s official record.

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