Does the original Tennessee Executive Residence Preservation Foundation still have any official role over the Governor's mansion?

Subject

Opinion No. 11-41, Tennessee Executive Residence Preservation Foundation, May 5, 2011

Plain-English summary

There are two separate organizations in this story, both with names involving "Executive Residence" and "Foundation," and the question is which one has what authority over Tennessee's Governor's mansion.

The first, the Tennessee Executive Residence Foundation, Inc., was a private nonprofit chartered in 1971 to acquire art, furniture, and historic items for the Executive Residence. In 1974, the legislature gave that 1971 Foundation specific statutory powers over the residence's furnishings. In 1999, the legislature took those powers back, set up a new statutory board, and directed that a successor foundation be created. The new entity, "Foundation II," was incorporated in December 2000 and was later renamed the Tennessee Residence Foundation.

So as of May 2011, the original 1971 Foundation still legally existed as a Tennessee nonprofit and still had its charter purpose of enriching the residence with art and furniture, but it had no statutory authority over the mansion. Whatever it does in connection with the residence has to fit within the master plan and rules set by the Tennessee Residence Commission (governor, first spouse, Commissioner of General Services, state architect, chair of the Historical Commission, and director of the State Museum) under the 2010 Tennessee Residence Commission Act.

The AG also flagged a housekeeping problem: in 2005 the Code Commission marked Tenn. Code Ann. §§ 4-23-101 and -102 "obsolete," but the AG observed that those sections describe powers the 1999 Act transferred to Foundation II that the new entity still exercises. The AG suggested fixing the references and not treating those sections as dead text.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Background and statutory framework

A short timeline traces the legal authority over the Executive Residence:

• 1971: Tennessee Executive Residence Foundation, Inc. incorporated as a nonprofit to acquire items of Tennessee provenance for the residence.
• 1974: Public Chapter 443 gives the Foundation statutory authority to acquire and dispose of furnishings, with the Governor's approval. Codified at Tenn. Code Ann. §§ 4-23-101 et seq.
• 1999: Public Chapter 212 strips the original Foundation of all statutory duties and creates a board of directors to form a successor entity. Tenn. Code Ann. § 4-23-103(a), (d), (e), (f).
• December 2000: That board incorporates the Tennessee Executive Residence Preservation Foundation II as a Tennessee nonprofit.
• 2004: Public Chapter 548 renames Foundation II the "Tennessee Residence Foundation" in the statute.
• 2005: Public Chapter 267 expands Foundation II's statutory authority to raise and spend funds for renovation, restoration, reconstruction, expansion, and upkeep of the residence (Tenn. Code Ann. § 4-23-103(g)). The same Act also deleted a 1999 provision that would have transferred funds from the original 1971 Foundation to the new board. The Code Commission "deemed obsolete" Tenn. Code Ann. §§ 4-23-101 and -102.
• 2010: Public Chapter 1111 (the Tennessee Residence Commission Act) creates the Tennessee Residence Commission, which formulates the master plan for the residence and establishes rules and policies governing acquisitions, maintenance, and use of the residence.

The AG's bottom line is that any continuing role the original 1971 Foundation plays toward the residence must follow the master plan, rules, and policies the Commission sets.

Common questions

Does the original 1971 Foundation still legally exist?

Yes, as a Tennessee nonprofit public benefit corporation. The AG noted that its charter still recites a purpose of acquiring art and furniture for the residence. What it lost in 1999 was its statutory authority to act on behalf of the State.

So can the original Foundation buy furniture for the mansion today?

Per this opinion, only in coordination with the Tennessee Residence Commission. The Commission sets the acquisition rules and the master plan. The Foundation can fundraise and hold assets as a private nonprofit, but it cannot place items in the residence or dispose of items there outside the Commission's framework.

Why is there a "Foundation" and a "Foundation II"?

Because the legislature did not dissolve the 1971 Foundation when it stripped its statutory duties. It instead created a new statutory board and directed that board to incorporate a new nonprofit. The result is two separate Tennessee corporations with overlapping interest in the residence, only one of which (the Tennessee Residence Foundation, formerly Foundation II) has statutory standing.

What happened to the original Foundation's assets?

The 1999 Act originally required the original Foundation's funds to be transferred to the new board. The General Assembly deleted that transfer provision in 2005 (2005 Tenn. Pub. Acts 267, § 1). The AG did not opine on what that deletion means for the original Foundation's holdings going forward; the deletion simply removed the mandatory transfer mechanism.

Why does the AG mention Tenn. Code Ann. §§ 4-23-101 and -102 being "deemed obsolete"?

The Code Commission's notation suggests those sections are no longer operative. The AG pushed back, saying the powers those sections described were transferred to Foundation II in 1999 and are still being exercised. The AG recommended updating the references in those sections from "Tennessee Executive Residence Preservation Foundation" to "Tennessee Residence Foundation" to match the 2004 nomenclature change, rather than treating the sections as dead.

What does the Tennessee Residence Commission actually do?

Under the 2010 Act, the Commission: (1) formulates a master plan for the residence and grounds; (2) sets policies for improvements, alterations, repairs, and reconstruction; (3) sets rules for acquiring furniture, fixtures, carpets, rugs, paintings, draperies, and objects of art; (4) sets rules for the private quarters; (5) sets maintenance rules; and (6) sets rules for nongovernmental use of the residence.

Citations

• Tenn. Code Ann. §§ 4-23-101, et seq.; Tenn. Code Ann. § 4-23-103(a), (d), (e), (f), (g)
• 1974 Tenn. Pub. Acts 443; 1999 Tenn. Pub. Acts 212; 2004 Tenn. Pub. Acts 548; 2005 Tenn. Pub. Acts 267; 2010 Tenn. Pub. Acts 1111

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2011/op11-041.pdf

Original opinion text

May 5, 2011
Opinion No. 11-41
Tennessee Executive Residence Preservation Foundation

QUESTION

What is the impact of legislative actions taken by the General Assembly on the "Tennessee Executive Residence Preservation Foundation"?

OPINION

The Tennessee Executive Residence Preservation Foundation is a Tennessee non-profit corporation that, according to its charter, has the purpose of acquiring items of art, furniture and historic significance to enrich the Tennessee Executive Residence and to improve and enhance the physical appearance and habitability of the Tennessee Executive Residence. In 1974, the General Assembly granted to the Foundation certain statutory duties and responsibilities with respect to the Tennessee Executive Residence, but in 1999, the General Assembly divested the Foundation of all such duties and responsibilities. Any continuing relationship between the Foundation and the Tennessee Executive Residence must be conducted in accordance with the master plan, rules and policies established by the Tennessee Residence Commission as set forth in the Tennessee Residence Commission Act of 2010.

ANALYSIS

The Tennessee Executive Residence Foundation, Inc. ("the Foundation") was incorporated as a Tennessee non-profit public benefit corporation in May 1971. The Foundation's charter originally provided that the purpose of the Foundation was "to acquire by means of loan and/or gift items of art, furniture and historic significance to enrich the Tennessee Executive Residence, with particular emphasis on things of Tennessee provenance." The charter was subsequently amended in December 1971 to provide that the Foundation's purpose is "to acquire by means of loan, gift, purchase or any other method items of art, furniture and historic significance to enrich the Tennessee Executive Residence, with particular emphasis on things of Tennessee provenance." The Foundation's charter was amended a third time in March 1987 and currently provides as follows:

The purpose for which the corporation is organized is to acquire by means of loan, gift, purchase or any other method, items of art, furniture and historic significance to enrich the Tennessee Executive Residence with particular emphasis on things of Tennessee provenance; to improve and enhance the physical appearance and habitability of the Tennessee Executive Residence; and to accept gifts, devises and bequests so as to carry out these purposes.

The Foundation's charter further provides that upon dissolution or final liquidation of the Foundation, "its assets will be distributed and turned over to the State of Tennessee or some agency thereof."

In 1974, the Legislature passed Public Chapter 443, which granted statutory authority to the Foundation to acquire or dispose of furnishings, fixtures, works or art and other articles for the executive residence. Chapter 443 further provided that any such furnishings and other articles could only be placed and retained in the Executive Residence, as well as sold or otherwise disposed of, by the Foundation with the approval of the current Governor. Any items not in use or display in the Executive Residence were to be transferred on loan to the State Museum or to an appropriate historical site or location for restoration, exhibition or storage. This Act was subsequently codified at Tenn. Code Ann. §§ 4-23-101, et seq.

Since the creation of the Foundation and the enactment of Public Chapter 443, the Legislature has enacted subsequent legislation concerning the furnishings in the Executive Residence and in light of that legislation, you have inquired as to the status of the Foundation's relationship with the Executive Residence.

In 1999, the Legislature passed Public Chapter 212, which divested the Foundation of all of the statutory duties and responsibilities that had been conveyed to it by 1974 Public Chapter 443. Tenn. Code Ann. § 4-23-103(e). In its place, Public Chapter 212 established a board of directors for a new entity that was to exercise all of the statutory duties and responsibilities of the Tennessee Executive Residence Preservation Foundation. Id. § 4-23-103(a). The Act directed this newly created board to prepare the appropriate filings and bylaws to create a new foundation. Id. § 4-23-103(f). The Act further provided the new board of directors, on behalf of the Foundation, with the authority to receive and expend funds, including funds appropriated by the General Assembly. Id. § 4-23-103(d).

Pursuant to the provisions of the Act, the new board of directors filed the necessary documents to incorporate the Tennessee Executive Residence Preservation Foundation II ("Foundation II") in December 2000 as a Tennessee nonprofit public benefit corporation. Foundation II continues to operate at present pursuant to its statutory authority and to the provisions of its charter, which authorizes Foundation II to:

[P]urchase, receive through loan, or otherwise acquire or dispose of furnishings, fixtures, works of art and other articles which are of Tennessee origin or of particular historic or artistic interest to the citizens of Tennessee, or which are otherwise needed to furnish and to permanently enhance the interior décor of the public reception and formal entertainment areas within the Tennessee executive residence. The purpose of the Corporation shall be to exercise such enumerated powers and otherwise to provide for the preservation, protection, maintenance and enhancement of the artistic, historic and architectural value of the public and formal areas of the Tennessee Executive Residence by all reasonable means.

The General Assembly expanded the statutory authority of Foundation II in 2005 to include the power "to raise and spend funds for the renovation, restoration, reconstruction, expansion and upkeep of the executive residence." 2005 Tenn. Pub. Acts 267, § 2 (codified at Tenn. Code Ann. § 4-23-103(g)).

In 2004, the General Assembly amended Section 4-23-103 to refer to Foundation II in 2005 as the "Tennessee Residence Foundation," 2004 Tenn. Pub. Acts 548, and Foundation II subsequently filed the necessary documents to amend its charter and change its name.

In 2010, the General Assembly enacted the Tennessee Residence Commission Act of 2010. See 2010 Tenn. Pub. Acts 1111. This Act creates the Tennessee Residence Commission ("Commission"), which consists of the governor, the first spouse, the Commissioner of General Services, the state architect, the chair of the Tennessee Historical Commission and the executive director of the Tennessee State Museum, or their respective designees. This Commission is given the following powers and duties:

(1) Formulate and develop a plenary master plan and program for the adaptive restoration and preservation of the Tennessee residence, including the building and contiguous grounds;

(2) Consistent with the master plan required in subdivision (a)(1), establish policies governing any improvements, alterations, repairs, replacements, or reconstruction of the residence, its appurtenant buildings, and its grounds, including furniture and fixtures;

(3) Establish rules and policies governing the acquisition of furniture and fixtures, including but not limited to, carpets, rugs, paintings, draperies, and objects of art, for the public quarters of the residence;

(4) Establish rules and policies to ensure that the private quarters of the executive residence are maintained appropriately;

(5) Establish rules and policies governing maintenance of the Tennessee residence; and

(6) Establish rules and policies governing the use of the Tennessee residence for any nongovernmental activities.

While the Foundation created in 1971 continues to exist as a Tennessee non-profit corporation and, according to its charter, continues to have the purpose of acquiring items of art, furniture and historic significance to enrich the Tennessee Executive Residence and to improve and enhance the physical appearance and habitability of the Tennessee Executive Residence, it has been divested of any statutory authority relative to the executive residence and may take any action relative to the residence only in accordance with the master plan, rules and policies established by the Tennessee Residence Commission as set forth in the Tennessee Residence Commission Act of 2010.

ROBERT E. COOPER, JR.
Attorney General and Reporter

BARRY TURNER
Deputy Attorney General

JANET M. KLEINFELTER
Deputy Attorney General

Requested by:
The Honorable Bill Ketron
State Senator
13 Legislative Plaza
Nashville, TN 37243-0213

Footnotes:

1 The language reads "The foundation established pursuant to Chapter 443 of the Public Acts of 1974 shall no longer have any duties or responsibilities with regard to the executive residence."

2 The same provision of the 1999 Act also contained the following language: "To this end, all funds held by the Foundation established pursuant to Chapter 443 of the Public Acts of 1974 on the effective date of this act shall be transferred to the control of the Board of Directors established pursuant to this section." In 2005, the Legislature amended the Act to delete this provision. See 2005 Tenn. Pub. Acts 267, § 1.

3 In 2005, the Tennessee Code Commission "deemed obsolete" the provisions of Tenn. Code Ann. §§ 4-23-101 – 102, which concerned "the Tennessee Executive Residence Preservation Foundation and its powers, placement of articles and approval of the governor." Tenn. Code Ann. §§ 4-23-101 – 102, Code Commission Notes. As these two code sections describe the powers of the Foundation that were transferred to Foundation II by the 1999 Act and are still exercised by Foundation II, it is not clear that the sections should be deemed obsolete. For clarity, references in those two code sections to the "Tennessee Executive Residence Preservation Foundation" should be changed to "Tennessee Residence Foundation" to conform to the revised nomenclature used in § 4-23-103 pursuant to 2004 Tenn. Pub. Acts 548.