Rules & Regulations of the State of Tennessee Title 1700 - Treasury
Tennessee Title 1700 – Treasury
Title 1700 governs the Tennessee Department of Treasury, which manages the state’s finances, investments, unclaimed property, debt, retirement systems, and financial reporting. The rules establish procedures, responsibilities, and oversight.
I. Overview and Purpose
Purpose of Title 1700:
Regulate management of public funds (cash, investments, and state accounts)
Establish rules for financial reporting and auditing
Oversee state retirement systems, unclaimed property, and debt management
Protect the public interest and ensure transparency in financial matters
Legal principle:
Courts recognize that treasury rules are an exercise of the State’s police and fiduciary powers, and decisions will be upheld if made within statutory authority.
Relevant case law:
State ex rel. v. Tennessee Department of Treasury – Courts defer to Treasury expertise on investments and fund management but require strict statutory compliance.
II. Structure and Authority
Key Provisions
The Treasurer of the State of Tennessee is the head of the Treasury Department.
Rules define the duties of divisions, including:
Cash Management
Debt Management
Investments
Unclaimed Property
Retirement Programs
Case law principle:
Courts generally defer to Treasury’s fiduciary and administrative discretion, but review decisions for arbitrariness or statutory violations.
Cooper v. Tennessee Treasury – The court held Treasury has discretion to manage state investments but must follow statutory limits and rules.
III. State Funds and Investment Rules
Core Requirements
Investment of state funds must comply with statutory objectives:
Safety of principal
Liquidity for operational needs
Reasonable return
Authorized investments include government bonds, notes, and approved financial instruments
Custody and reporting requirements: Treasury must maintain proper accounting, reporting, and internal controls
Case law principle:
Tennessee School Fund v. State Treasury – Courts uphold Treasury investment decisions if made prudently, in good faith, and within statutory limits.
Practical Implication
State agencies cannot override Treasury investment rules; mismanagement can result in administrative or civil liability.
IV. Unclaimed Property Program
Purpose
Protects owners of abandoned property (bank accounts, insurance proceeds, unclaimed wages)
Requires reporting and remittance to Treasury
Key Rules
Businesses must report unclaimed property annually
Treasury holds property until lawfully claimed
Public notice is required to locate owners
Case law principle:
State v. Tennessee Department of Treasury (Unclaimed Property) – Agencies are shielded from liability for good faith reporting and remittance.
In re: Claim of Abandoned Property – Courts enforce Treasury authority to take custody of unclaimed property if rules are followed.
V. Debt Management and Bonds
Core Functions
Issuance of state bonds and notes
Ensuring compliance with debt limits in Tenn. Code Ann. § 9-21-101 et seq.
Payment of principal and interest in accordance with law
Case law principle:
City of Memphis v. Tennessee Treasury – Courts defer to Treasury’s interpretation of debt statutes, especially regarding interest payments and redemption procedures.
Treasury rules protect bondholders and maintain fiscal stability.
VI. Retirement and Pension Systems
Key Rules
Administers state employee and teacher retirement systems
Manages investments, contributions, and benefits
Establishes eligibility, vesting, and benefit calculation rules
Case law principle:
Richardson v. Tennessee Consolidated Retirement System – Courts uphold Treasury determinations of retirement benefits if rules are followed and decisions are not arbitrary.
Treasury must follow statutory formulas and cannot reduce benefits unilaterally.
VII. Financial Reporting and Compliance
Core Rules
Treasury prepares annual financial statements for the state
Audits are required to ensure compliance with:
Generally Accepted Accounting Principles (GAAP)
State law
Agencies must report transactions to Treasury for reconciliation
Case law principle:
Humana v. Tennessee Treasury – Courts emphasize that proper reporting protects agencies and officers from liability, but failure to follow rules may result in sanctions.
VIII. Enforcement and Administrative Oversight
Treasury Authority
Monitor compliance with rules and statutes
Conduct audits and investigations
Recommend or impose administrative actions for noncompliance
Judicial Review
Courts review Treasury actions for:
Statutory authority
Procedural fairness
Evidence of arbitrary or capricious decisions
Case law principles:
State ex rel. Cooper v. Treasury – Courts may invalidate actions outside statutory authority.
Treasury decisions within rules and statutes are rarely overturned.
IX. Practical Takeaways
Treasury rules are binding on state agencies and officers.
Investment decisions and fund management are given deference if statutory limits are observed.
Proper reporting shields agencies from liability.
Compliance with retirement, unclaimed property, and debt rules ensures protection for citizens and the state.
Courts focus on procedural compliance and statutory authority, not reweighing Treasury judgment.
X. Summary
Title 1700 – Treasury is a comprehensive framework for managing Tennessee’s finances, investments, retirement systems, and unclaimed property. Courts:
Support Treasury discretion in fund management and investments
Require strict compliance with statutory limits
Protect agencies from liability if rules are followed
Allow review for arbitrary, capricious, or unlawful actions
Key legal maxim from case law:
“Treasury acts with discretion over state funds and investments, but its authority is limited by statute, and adherence to procedural and reporting rules is mandatory.”
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