Public Officials

Plain English Breakdown

The official source material does not provide specific details on the funding for implementation and enforcement or appeal processes for penalties.

Public Officials' Investments

This bill requires Tennessee public officials and their spouses to divest certain investments or place them in a blind trust by October 1, 2026.

What This Bill Does

• Defines 'covered investment' as direct ownership of stocks, commodities, futures, derivatives, options, indirect ownership of investment funds, trusts, employee benefit plans, and deferred compensation plans, excluding diversified mutual funds, exchange-traded funds, treasury bonds, or interests in public or private retirement plans.
• Requires public officials and their spouses to divest covered investments or place them in a blind trust by October 1, 2026, or within 90 days of taking office for newly elected or appointed officials.
• Allows the commissioner of commerce and insurance to grant up to a 45-day extension for compliance if there is good cause shown.
• Requires public officials and their spouses to submit a certificate of compliance to the commissioner on a form prescribed by them, and provide a copy to the secretary of state upon compliance.
• Authorizes the commissioner to impose civil penalties of up to $1,000 per day for violations.

Who It Names or Affects

• Public officials in Tennessee, including the governor, members of the general assembly, and representatives elected from Tennessee to the U.S. Senate or House of Representatives.
• Spouses of public officials who own covered investments.

Terms To Know

Covered investment

Direct ownership of stocks, commodities, futures, derivatives, options, indirect ownership of investment funds, trusts, employee benefit plans, and deferred compensation plans, excluding diversified mutual funds, exchange-traded funds, treasury bonds, or interests in public or private retirement plans.

Blind trust

A trust where the trustee manages the assets without the beneficiary knowing what they are or how they are managed.

Limits and Unknowns

• The bill does not specify who will fund the costs associated with implementing and enforcing these requirements.
• It is unclear if there are any provisions for public officials to appeal penalties imposed by the commissioner.
• The exact rules that the commissioner may promulgate have not been specified.

Official Summary Text

This bill requires a
public official or the spouse of a public official who owns or holds a covered investment
to (i) d
ivest the covered investment or
(ii) p
lace the covered investment in a blind trust.
As used in this bill, a "covered investment" means both (i)
a direct investment in a stock, commodity, future, or other similar and comparable economic investment through a derivative, option, or similar asset;
and (ii)
an indirect investment in an investment fund, a trust, an employee benefit plan, or a d
eferred compensation plan
. However, such term does
not include a diversified mutual fund, a diversified exchange-traded fund, treasury bonds, or compensation from or an interest in a public or private retirement plan
.

COMPLIANCE

This bill requires a
public official and the spouse of the public official
generally to
comply by October 1, 2026, or for newly elected or appointed public officials and their spouses, no later than
90
days after the public official takes the oath of office.
However, a
public official or the spouse of the public official may seek an extension from the commissioner
of commerce and insurance
("commissioner")
of no more than
45
days to comply
,
and the commissioner may grant the extension for good cause shown.

Upon compliance, a public official and the spouse of the public official
must
submit a certificate of compliance to the commissioner on a form prescribed by the commissioner and provide a copy to the secretary of state.

VIOLATIONS

This bill authorizes the
commissioner
to
impose a civil penalty of no

more than $1,000 for a violation of this
bill
. Each day for which a violation occurs constitutes a separate offense.

RULEMAKING

This bill authorizes

t
he commissioner
to
promulgate rules to carry out this
bill
and specify the assets that are deemed covered investments.

Current Bill Text

SENATE BILL 2682
By Kyle

HOUSE BILL 2462
By Pearson
HB2462
012390
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 2;
Title 3; Title 4; Title 8 and Title 48, relative to
investments by public officials.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 48, Chapter 1, Part 1, is amended by
adding the following as a new section:
(a) As used in this section:
(1) "Covered investment":
(A) Means a direct investment in a stock, commodity, future, or
other similar and comparable economic investment through a derivative,
option, or similar asset;
(B) Means an indirect investment in an investment fund, a trust,
an employee benefit plan, or a deferred compensation plan; and
(C) Does not include a diversified mutual fund, a diversified
exchange-traded fund, treasury bonds, or compensation from or an
interest in a public or private retirement plan; and
(2) "Public official" means the governor, a member of the general
assembly, or a representative elected from this state to the United States senate
or house of representatives, including a person who is appointed to fill a vacancy
in such office.
(b)
(1) A public official or the spouse of a public official who owns or holds a
covered investment shall:

- 2 - 012390

(A) Divest the covered investment; or
(B) Place the covered investment in a blind trust.
(2) A public official and the spouse of the public official shall comply with
subdivision (b)(1) by October 1, 2026, or for newly elected or appointed public
officials and their spouses, not later than ninety (90) days after the public official
takes the oath of office.
(c) Upon compliance with subsection (b), a public official and the spouse of the
public official shall submit a certificate of compliance to the commissioner on a form
prescribed by the commissioner, and shall provide a copy to the secretary of state.
(d) A public official or the spouse of the public official may seek an extension
from the commissioner of not more than forty-five (45) days to comply with subsection
(b) and the commissioner may grant the extension for good cause shown.
(e) The commissioner may impose a civil penalty of not more than one thousand
dollars ($1,000) for a violation of this section. Each day for which a violation occurs
constitutes a separate offense.
(f) The commissioner may promulgate rules to carry out this section and specify
the assets that are deemed covered investments. Rules must be promulgated in
accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter
5.
SECTION 2. This act takes effect July 1, 2026, the public welfare requiring it.