Tenn. Code Ann. § 10-1-204

The secretary of state is authorized and empowered to make agreements with the United States and its agencies in regard to the administration of library programs, and to accept federal funds upon such terms and conditions as may be required by act of congress or rules and regulations issued in accordance with such act; provided, that state funds shall not be obligated for participation in any federal program unless the same are paid from current appropriations or operating funds. If required, the state treasurer shall give receipt for such funds, make a special bond for the same, or keep special accounts of such funds. At the end of this or succeeding bienniums, such funds shall not become a part of the state's general fund but shall be expended only for such library purposes as may have been agreed upon.