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SENATE BILL 2680
By Kyle
HOUSE BILL 2464
By Pearson
HB2464
011045
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AN ACT to amend Tennessee Code Annotated, Title 4;
Title 7; Title 8; Title 47, Chapter 18; Title 65 and
Title 68, relative to products connected to foreign
adversaries.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 8, Chapter 4, is amended by adding the
following as a new part:
8-4-801. Part definitions.
As used in this part:
(1) "Artificial intelligence" or "AI" means models and systems capable of
performing functions generally associated with human intelligence, including
reasoning and learning;
(2) "Electric utility" means:
(A) An entity subject to the jurisdiction of the Tennessee board of
utility regulation in accordance with § 7-82-701 that transmits or
distributes electricity to the public;
(B) A county-owned or municipal-owned utility that transmits or
distributes electricity to the public;
(C) A public utility, as defined in § 65-4-101, that transmits or
distributes electricity to the public; and
(D) A cooperative, as defined in § 65-25-102, that transmits or
distributes electricity to the public;
(3) "Foreign adversary" means a nation specified in 15 CFR 791.4; and
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(4) "High performance computing (HPC) facility" means a facility, other
than a facility owned or operated by a federal, state, or local governmental entity,
that houses or operates a supercomputer, data center, artificial intelligence data
center, AI factory, AI-optimized computing facility, HPC or AI cluster or
supercluster, or exascale computing system in this state that utilizes, on average,
more than fifty megawatts (50 MW) per month for its operation and maintenance.
8-4-802. Prohibited use of products sourced from foreign adversaries by electric
utilities - Required reporting - Required posting.
(a) Each electric utility in this state shall not use transformers, parts, or
equipment manufactured or sold by entities owned or controlled by foreign adversaries
to support any part of the electrical grid operating in this state.
(b) Each electric utility in this state shall annually report no later than January 31,
the source of its transformers, parts, or equipment that support any part of the electrical
grid operating in this state to the comptroller of the treasury.
(c) Each electric utility in this state shall annually conduct no later than January
31, an internal audit on its compliance with this section, and upon request by the
comptroller of the treasury, permit such a compliance audit by the comptroller of the
treasury or a third party retained by the comptroller of the treasury. If the electric utility
conducts the audit, then the electric utility shall submit the audit findings to the
comptroller of the treasury no later than March 1 of each year.
(d) The comptroller shall post the annual reports and audit findings prominently
on its website no later than October 1 of each year.
8-4-803. Prohibited use of products sourced from foreign adversaries by HPC
facilities - Required reporting - Required posting.
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(a) An HPC facility in this state shall not use transformers, parts, or equipment
manufactured or sold by entities owned or controlled by foreign adversaries to support
any of its facility operations, including the construction and maintenance of the facility.
(b) Each HPC facility in this state shall annually report no later than January 31,
the source of its transformers, parts, or equipment that support any part of its facility
operations to the comptroller of the treasury.
(c) Each HPC facility utility in this state shall annually conduct no later than
January 31, an internal audit on its compliance with this section, and upon request by
the comptroller of the treasury, permit such a compliance audit by the comptroller of the
treasury or a third party retained by the comptroller of the treasury. If the facility
conducts the audit, then the facility shall submit the audit findings to the comptroller of
the treasury no later than March 1 of each year.
(d) The comptroller of the treasury shall post the annual reports and audit
findings prominently on its website no later than October 1 of each year.
8-4-804. Violations - Notice.
(a) If an electric utility or HPC facility violates this section, then the comptroller of
the treasury shall provide written notice to the utility or facility of noncompliance and that
the utility or facility has thirty (30) days to comply with this section.
(b) If the utility or facility is not in compliance at the end of the thirty-day period,
then the comptroller of the treasury shall provide notice to each local government in
which the utility or facility is located or operates and to the attorney general and reporter.
(c) The comptroller of the treasury shall provide notice to each applicable local
government and to the attorney general and reporter upon subsequent compliance.
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(d) The comptroller of the treasury shall post any utility or facility that fails to
comply with this section prominently on its website and shall update such posting if the
utility or facility subsequently complies with this section.
8-4-805. Loss of license or permit during noncompliance.
If a local government receives notice pursuant to § 8-4-104, then the local
government must suspend any applicable operating license or permit of the utility or
facility and prohibit issuance of any new license or permit to the utility or facility, pending
notification of compliance from the comptroller of the treasury.
8-4-806. Action by attorney general and reporter - Penalties.
(a) If the attorney general and reporter receives notice pursuant to § 8-4-104,
then the attorney general and reporter may bring an action for a violation of this section
seeking the following:
(1) A civil penalty of not more than twenty-five thousand dollars ($25,000)
per violation;
(2) Injunctive or declaratory relief; and
(3) Reasonable court costs and attorneys' fees.
(b) For purposes of determining the number of violations pursuant to subdivision
(a)(1), each separate transformer, part, or equipment used in violation of this section
constitutes a separate violation. Failure to report, and to subsequently comply by
reporting, also constitute separate violations.
8-4-807. Civil action.
A resident of this state, who is aggrieved by a violation of this section, may bring
a civil cause of action seeking:
(1) Actual damages;
(2) Punitive damages;
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(3) Injunctive or declaratory relief;
(4) Reasonable court costs and attorneys' fees; and
(5) Any other relief the court deems proper.
SECTION 2. If any provision of this act or the application of any provision of this act to
any person or circumstance is held invalid, the invalidity does not affect other provisions or
applications of the act that can be given effect without the invalid provision or application, and to
that end, the provisions of this act are severable.
SECTION 3. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
SECTION 4. This act takes effect July 1, 2026, the public welfare requiring it.