HB 546 - SB 509
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 15, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
HB 546 - SB 509
SUMMARY OF BILL: Authorizes a local government to procure through cooperative
purchasing agreements (CPAs) materials, labor, and services used for maintenance, operations,
component replacement, or repairs of existing facilities and grounds owned or operated by a local
education agency (LEA) or by a local government agency.
FISCAL IMPACT:
NOT SIGNIFICANT
Assumptions:
• Pursuant to Tenn. Code Ann. § 12-3-1205(a)-(b), local governments and utility districts may
participate in, sponsor, conduct, or administer a CPA for the procurement of:
o Any supplies, services or construction with one or more other local governments,
so long the purchasing entity complies with its own purchasing requirements; and
o Any goods, supplies, services, or equipment with one or more other governmental
entities outside this state, or with an agency of the United States, provided, such
procurement is competitively bid.
• Pursuant to Tenn. Code Ann. § 12-3-1205(b)(4)(B), purchases of construction, engineering,
or architectural services, or construction materials are prohibited from being purchased
through a CPA.
• The proposed legislation excludes from the definition of construction and construction
materials: materials, labor, and services used for maintenance, operations, component
replacement, or repairs of existing facilities and grounds owned or operated by an LEA or
by a local government agency, thereby authorizing the local government to make such
purchases through a CPA.
• The number of purchases that will be made through a CPA as a result of this legislation is
not known.
• Though competitively bid procurements are typically estimated to result in the most cost-
effective purchase for a governmental entity, it is unknown if a local government’s
participation in a CPA for the purchase of the goods and services authorized under this
legislation will result in any significant deviation from the current costs incurred for such
goods and services.
• It is generally assumed that LEAs and local government agencies will enter into CPAs in the
best interest of its citizens and that costs incurred through such agreements would, at the
least, result in expenditures being on par with the current costs at which they are being
procured.
HB 546 - SB 509 2
• LEAs and local government agencies may experience a decrease in administrative burden
and expenditures for no longer hosting bids for such goods and services.
• The proposed legislation may result in a permissive increase or decrease in local
expenditures; however, it is estimated that the net impact to local expenditures is not
significant.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director