Tennessee Code Title 4. State Government § 4-1-429

(b)(1) If a local government receives a notice pursuant to subsection (a), the local government may, within sixty (60) days from receipt of the notice:

(2) If the local government repeals or adequately revises the local government action to eliminate any violation of state law or the Constitution of Tennessee and provides the attorney general and reporter with a written statement that the violation has been resolved pursuant to subdivision (b)(1)(A), and the attorney general and reporter agrees that the violation has been resolved, then the attorney general and reporter shall take no further action.

(3) If the local government challenges the findings of the attorney general and reporter pursuant to subdivision (b)(1)(B), then the attorney general and reporter shall defend the attorney general and reporter's findings in the special action.

(c)(1) If, after sixty (60) days from receipt of the notice sent pursuant to subsection (a), the local government does not repeal or adequately revise the local government action to eliminate any violation of state law or the Constitution of Tennessee or does not provide the attorney general and reporter with a written statement that the violation has been resolved pursuant to subdivision (b)(1), then the attorney general and reporter shall proceed pursuant to subdivision (c)(2).

(2) Pursuant to the requirements of subdivision (c)(1) and if the local government did not file an action pursuant to subdivision (b)(1)(B), the attorney general and reporter shall file a special action before a three-judge panel, in accordance with § 20-18-101, seeking a declaratory judgment that the local government action is inconsistent with and violates state law or the Constitution of Tennessee.

(3) If the three-judge panel in either the action filed by the local government pursuant to subdivision (b)(1)(B) or by the attorney general and reporter pursuant to subdivision (c)(2) finds that the local government action is inconsistent with and violates state law or the Constitution of Tennessee, the panel shall order 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.

(4) 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 shall notify:

(1) “Local government” means a county, including a county with a metropolitan or charter form of government, and an incorporated city or town;  and

(2) “Local government action” means an ordinance, regulation, or order adopted or promulgated by the chief executive officer or governing body of a local government or a regulation, rule, written policy, or written guideline adopted by any agency, department, or other subdivision of the local government.