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Municipal Technical Advisory Service (MTAS)

The Iran Divestment Act

Reference Number: MTAS-3003
Reviewed Date: 12/20/2021
With the passage of Public Chapter No. 817 and effective July 1, 2016, the General Assembly of the State of Tennessee added an additional chapter to the Tennessee Code Annotated cited as the “Iran Divestment Act”.  Codified in T.C.A. §12-12-101 through §12-12-113, the General Assembly implemented the authority granted under federal law, specifically Section 202 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111-195).
 
This title requires the state chief procurement officer to publish a list of persons and entities determined to be engaged in investment activities with Iran on the state’s website. Those included on this list are prohibited from contracting with any political subdivision of this state and any contract entered into shall be void. The list adopted by the Tennessee Department of General Services, Central Procurement Office can be found at the link in Appendix A.

Under the Iran Divestment Act, political subdivisions in Tennessee are prohibited from entering into any procurement or contract over $1,000 with a person who engages in investment activities in Iran. Every bid or proposal submitted to a political subdivsion after July 1, 2016 where competitive bidding is required, must contain the following statement by the bidder under penalties of perjury:

“By submission of this bid, each bidder and each person signing on behalf of any bidder certifies, and in the case of a joint bid each party thereto certifies as to its own organization, under penalty of perjury, that to the best of its knowledge and belief that each bidder is not on the list created pursuant to §12-12-106.”
 
Under T.C.A. § 12-12-111, a bid shall not be considered nor any award made where the required statement has not been submitted. If the bidder cannot make the certification, the bidder must so state and must furnish with the bid a signed statement setting forth in detail the reasons. A political subdivision may award a bid to a bidder who cannot make the certification, on a case-by-case basis, if:
 
(1) The investment activities in Iran were made before July 1, 2016, the investment activities in Iran have not been expanded or renewed on or after July 1, 2016, and the person has adopted, publicized, and is implementing a formal plan to cease the investment activities in Iran and to refrain from engaging in any new investments in Iran; or
 
(2) The political subdivision makes a determination that the goods or services are necessary for the political subdivision to perform its functions and that, absent such an exemption, the political subdivision would be unable to obtain the goods or services for which the contract is offered. Such determination shall be made in writing and shall be a public document.