Tennessee Code Title 9. Public Finances § 9-4-5115

(a) No state funds received by a local government unit shall be expended to pay attorney's fees, court costs, or other expenses attributable to a lawsuit filed against the state, a state agency, or a state official in which the local government unit is named as a plaintiff. If the state, agency, or official prevails in the lawsuit, then the department of finance and administration shall deduct from the local government unit's allocation of state-shared taxes, in the case of a city or county, or allocation of funds based on the Tennessee investment in student achievement formula (TISA), in the case of an LEA, such sum or part of such sum to recover attorney's fees, court costs, and other expenses attributable to defending the state in the lawsuit.

(b) As used in this section, “local government unit” means a county, municipality, or local education agency (LEA) as defined in § 49-1-103.