Tennessee Code Title 49. Education § 49-3-352

(a) There is established within the general fund of each LEA a special revenue account to be known as the dedicated education fund.

(b) All appropriations from all sources intended to fund any function or expense of the LEA shall be appropriated to this account and an affirmative vote by a majority of the membership of the board shall be required to disburse funds from the account. Money in the dedicated education fund shall be invested as provided by law.

(c) Any fund balance remaining unexpended at the end of a fiscal year in the general fund of the local public education system shall be carried forward into the subsequent fiscal year. The fund balance shall be available to offset shortfalls of budgeted revenues or, subject to § 49-2-301(b)(1)(U), shall be available to meet unforeseen increases in operating expenses. Any accumulated fund balance in excess of three percent (3%) of the budgeted annual operating expenses for the current fiscal year may be budgeted and expended for any education purposes, but must be recommended by the board of education prior to appropriation by the local legislative body. Notwithstanding this section or any other law to the contrary, in any fiscal year in which state-shared revenues distributed to counties are reduced below the levels distributed to counties in the 2002-2003 fiscal year, any or all of the accumulated fund balance may be used for education purposes without restrictions; provided, however, that for the 2004-2005 fiscal year only, if an LEA submits to the department for approval a budget that contains the use of unrestricted accumulated funds under this subsection (c) and it is subsequently determined that state-shared revenues distributed to counties are equal to or greater than levels distributed to counties in the 2002-2003 fiscal year, the commissioner shall have the authority to approve the unrestricted use of the accumulated funds.

(d) Subsection (b) shall not apply in counties having a population of not less than seventy-five thousand one hundred (75,100) nor more than seventy-five thousand two hundred (75,200), according to the 2010 federal census or any subsequent federal census, and that contain a national laboratory. In any such county, all appropriations from all sources to fund public education shall be deposited into the dedicated education fund. Money in the dedicated education fund shall be invested as provided by law.