Amends TCA Title 12, Chapter 4.

This bill limits the authority of a political subdivision to enter into a contingent fee contract for legal services to situations where the political subdivision: (1) Makes available to the public a statement setting forth, among other things, the qualifications of any attorney the subdivision may retain, the nature of any relationship between the governing body and any attorney the subdivision may retain, and the reasons why the political subdivision cannot pursue the matter without using a contingent fee basis. This statement must be given before or along with the present law required public notice for public meetings of a governing body; and (2) Approves the contract in an open meeting called for the purpose of considering the need for obtaining the legal services, the terms of the contract with the attorney or law firm, the competence, qualifications, and experience of the attorney or law firm, and the reasons why the contract is in the best interest of the people who are served by the political subdivision. This bill prohibits a political subdivision from finally executing a contingent fee contract for legal services unless it submits the contract to the attorney general and reporter along with a description of the matter, a description of the interest any governmental entity may have in the matter, a copy of the notice required in item (1) above, and a statement of how and when the notice was provided to the public. This bill authorizes the attorney general to refuse to approve of the contract if: pursuit of the action interferes with the attorney general's statutory or constitutional obligations, including the trial and direction of all civil litigated matters and administrative proceedings in which the state or any officer, department, agency, board, commission, or instrumentality of this state may be interested; the attorney general has the authority to pursue the matter; the matter relates to an issue of statewide concern (conduct or harm more likely than not to adversely affect the interested citizens of a least five counties of this state) and the attorney general's pursuit in lieu of the political subdivision is in the state's best interest; or the subdivision failed to comply with items (1) and (2) above or the findings made by the political subdivision to justify the contract are not supported by the documentation submitted. Under this bill, the attorney general may take up to 90 days to approve or disapprove the contract, unless the political subdivision requests expedited consideration. This bill requires the attorney general to: (1) Receive consent of the governor or an appropriately designated member of the governor's cabinet, prior to disapproving a contract; and (2) Submit a report, upon the disapproval of a contract, to both the speaker of the house of representatives and of the senate, stating that the contract was disapproved, the reason for its disapproval, and the manner in which the attorney general plans to address the issue of statewide concern identified in the contract. The report will be subject to executive review. This bill requires a subdivision to award a contingent fee contract for legal services on the basis of demonstrated competence, qualifications, and experience to perform the services sought and for a fair and reasonable price. This bill prohibits a subdivision from awarding a contingent fee contract for legal services on the basis of competitive bids. A contract entered into or an arrangement made in violation of this bill will be void as against public policy.