At the request of a member of the general assembly, this bill requires the attorney general to investigate an ordinance, regulation, order, or other official action adopted or taken by the chief executive officer or governing body of a local government or any written policy, written rule, or written regulation adopted by any agency, department, or other entity of the local government that the member alleges violates, or that would violate if enacted or enforced, state law or the Constitution of Tennessee. This bill requires the attorney general to make a written report of findings and conclusions as a result of the investigation within 30 days after receipt of the request and to provide a copy of the report to the governor, the speaker of the senate, the speaker of the house of representatives, the member or members of the general assembly making the original request, and the secretary of state. If the attorney general concludes that the ordinance, regulation, order, written policy, written rule, or other action under investigation:  Violates, or would violate if enacted or enforced, a provision of state law or the Constitution of Tennessee, the attorney general must provide notice to the local government, by certified mail, of the violation and must indicate that the local government has 30 days to resolve the violation or file an action challenging the conclusion and any withholding of funds.  May violate, or would violate if enacted or enforced, a provision of state law or the Constitution of Tennessee, the attorney general must file a special action in the supreme court to resolve the issue, and the supreme court must give the action precedence over all other cases.  Does not violate any provision of state law or the Constitution of Tennessee, the attorney general must take no further action pursuant to this bill. If the attorney general determines that the local government has failed to resolve the violation or file an action challenging the conclusion and any withholding of funds within 30 days of the notification, or within 30 days of the supreme court determining that the ordinance, regulation, order, written policy, written rule, or other action violates, or would violate if enacted or enforced, a provision of state law or the Constitution of Tennessee, then this bill requires the attorney general to do the following:  Notify the appropriate state officials who must withhold all or a portion of the funds of the state and all funds administered by the state and its agencies, boards, and instrumentalities allotted or appropriated to the local government, including, but not limited to, state-shared taxes.  Continue to monitor the response of the local government, and when the offending ordinance, regulation, order, or action is repealed or the violation is otherwise resolved, the attorney general must notify (i) the governor, the speaker of the senate, the speaker of the house of representatives, and the member or members of the general assembly making the original request that the violation has been resolved; and (ii) the appropriate state officials to restore the distribution of state-shared revenues to the local government. Before a member of the general assembly may request an investigation by the attorney general and reporter of a written policy, written rule, or written regulation adopted by an agency, department, or other entity of a local government pursuant to this bill, this bill requires the member of the general assembly to first provide a written notification of the alleged violation of state law or the Constitution of Tennessee to the chief executive officer and governing body of the local government. If the local government does not repeal or otherwise resolve the violation within 60 days after receiving the notification, the member of the general assembly may request an investigation by the attorney general. However, this bill does not authorize the withholding of funds allocated to a local government that would violate contracts to which the state is a party, the requirements of federal law imposed on the state, judgments of a court binding on the state, or obligations of the state under the Tennessee Constitution. ON APRIL 16, 2025, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 1097, AS AMENDED. AMENDMENT #1 rewrites this bill to authorize the attorney general and reporter to review whether a local government action violates state law or the Constitution of Tennessee. If the attorney general and reporter concludes that a local government action reviewed pursuant to this amendment violates state law or the Constitution of Tennessee, then the attorney general and reporter is required to provide to the local government's chief executive officer, governing body, or other subdivision of the local government that adopted the local government action written notice identifying the specific statutory or constitutional provision that the local government action is deemed to violate. If a local government receives a notice pursuant to this amendment, the local government may, within 60 days from receipt of the notice: (1) Resolve the violation by repealing or revising the local government action, subject to review by the attorney general and reporter. If the attorney general and reporter agrees that the violation is resolved, then no further action will be taken; or (2) Challenge the findings by filing a special action before a three-judge panel seeking a declaratory judgment that the local government action is lawful and constitutional. This amendment requires the attorney general and reporter to defend its findings in the special action. If, after 60 days from receipt of the notice of violation under this amendment, the local government has failed to resolve the violation and has either not filed an action or received an adverse ruling from the three-judge panel, this amendment requires the attorney general and reporter to do the following: (1) Instruct the commissioner of finance and administration and the state treasurer to withhold all funds of the state allotted to the local government via grant, contract, or statute, including, but not limited to, state-shared taxes. The amounts withheld must be held in reserve by the department and allocated to the local government once the violation has been resolved. This amendment prohibits the withholding of funds when such withholding would violate contracts to which the state is a party, the requirements of federal law imposed on the state, judgments of a court binding on the state, or constitutional obligations of the state; and (2) Continue to monitor the response of the local government, and when the action is resolved, the attorney general and reporter shall notify: (1) The governor, the speaker of the senate, the speaker of the house of representatives, and the local government that the violation has been resolved; and (2) The commissioner of finance and administration and the state treasurer to resume funding the local government, which must include the distribution of state-shared revenues to the local government. The provisions of this amendment take effect July 1, 2025, and apply to local government actions taken on or after that date and funds allocated or appropriated during or after the 2026-2027 fiscal year. ON APRIL 21, 2025, THE SENATE SUBSTITUTED HOUSE BILL 1097 FOR SENATE BILL 845, ADOPTED AMENDMENT #3, AND PASSED HOUSE BILL 1097, AS AMENDED. AMENDMENT #3 makes the following revisions:  Instead of the attorney general instructing the commissioner and state treasurer to withhold state funds, requires the attorney general to file a special action before a three-judge panel seeking a declaratory judgment that the local government action is inconsistent with and violates state law or the Constitution of Tennessee. If the three-judge panel finds that the local government action is inconsistent with and violates state law or the Constitution of Tennessee, then the panel must order the commissioner of finance and administration and the state treasurer to so withhold state funds.  Requires, upon receipt of sufficient documentation acceptable to the three-judge panel that the action is resolved so as to no longer violate state law or the Constitution of Tennessee, the three-judge panel to notify the attorney general and the other persons described in the bill. ON APRIL 22, 2025, THE HOUSE NONCONCURRED IN SENATE AMENDMENT #3. ON APRIL 22, 2025, THE SENATE REFUSED TO RECEDE FROM ITS ADOPTION OF SENATE AMENDMENT #3. ON APRIL 22, 2025, THE HOUSE REFUSED TO RECEDE IN ITS ACTIONS IN NONCONCURRING IN SENATE AMENDMENT # 3 AND APPOINTED A CONFERENCE COMMITTEE. ON APRIL 22, 2025, THE SENATE APPOINTED A CONFERENCE COMMITTEE. ON APRIL 22, 2025, THE HOUSE ADOPTED THE CONFERENCE COMMITTEE REPORT. ON APRIL 22, 2025, THE SENATE ADOPTED THE CONFERENCE COMMITTEE REPORT.