Department of Finance & Administration
Larry B. Martin, Interim Commissioner

Legislation to prohibit the state from contracting with persons or companies that use illegal immigrants became Public Chapter No. 878 when it was signed into law by Governor Bredesen on June 15, 2006. The law took effect on January 1, 2007 but authorized the Commissioner of Finance and Administration to promulgate rules that would effectuate the purposes of the act before January 1, 2007. The Governor signed Executive Order 41 on September 5, 2006 for that purpose.

Executive Order 41 directed the Commissioner of Finance and Administration to promulgate rules and regulations to effectuate Public Chapter No. 878 "in order to ensure full compliance with both the letter and the spirit of this law."

Provisions of Public Chapter No. 878 and Executive Order 41 include the following:

• The state or state entities will not contract to acquire goods or services from any person who knowingly utilizes the services of illegal immigrants in the performance of a contract for goods or services entered into with the state or a state entity. Likewise, persons who knowingly utilize the services of illegal immigrants are prohibited from using these employees to perform work on contracts with the state or state entities.
• Persons and companies doing business with the State of Tennessee or a state entity must attest that they will not knowingly utilize the services of illegal immigrants in the performance of a contract and will not knowingly utilize the services of any subcontractor who will utilize the services of illegal immigrants in the performance of the contract. These attestations must be updated at least semi-annually.
• Persons and companies discovered to have knowingly used the services of illegal immigrants in the performance of providing goods or services to the state will be prohibited from contracting or bidding on any contract for a period of one (1) year from the date of discovery. The prohibition may be appealed using an appeals process to be established by the Commissioner of Finance and Administration.
• The Department of Finance and Administration is directed to develop policies to ensure that all contracts entered into by the Executive branch comply with the provisions of Public Chapter 878 and to assist all state entities in the development of procedures. Random checks of personnel records of contractors are permitted.
• All contracts initiated on or after October 1, 2006 will include explicit language deeming the requirements of Public Chapter 878 to be a material part of the contract and include language specifying penalties, establishing the authority of the state to conduct random checks of personnel records and requiring semi-annual attestations.