(a) All property ordered forfeited shall be sold at public auction. The proceeds from all property forfeited and sold at public auction shall be disposed of by the court as directed by this part. The attorney general shall first be compensated for all expenses incident to the litigation, as approved by the court. Any such costs for appeals shall be provided for by the trial court upon conclusion of the litigation. The attorney general shall then direct that any public agency be reimbursed for out-of-pocket expenses resulting from the investigation, seizure and storage of the forfeited property. If any property seized and ordered forfeited was taken from the lawful owner through theft or fraud, then the property shall be returned to the lawful owner, or restitution provided, as the court determines.

(b) The court shall then award the remainder of the funds as follows:

(1) In the event that the investigating and seizing agency is a state agency, the funds shall be distributed to the state general fund;

(2) In the event that the investigating and seizing agency is the Tennessee bureau of investigation, or in the event that the office of inspector general participates in the investigation, seizure, or prosecution, then, the funds shall be distributed to the state treasurer, who shall deposit the funds in a designated account for the agency to be used in its operations; provided, that, if more than one (1) state agency participated in the investigation or seizure as certified by the prosecuting attorney, then the court shall order a distribution according to the participation of each;

(3) In the event that the investigating and seizing agency is a local public agency, then the funds shall be distributed to its local government, when, upon ratification of this part by the local governing body of a municipality, metropolitan government or county governing body by ordinance or resolution, the municipality, metropolitan government or county has authorized the receipt of the distributed funds and has designated how the funds are to be distributed, which shall be designated for law enforcement, and the court shall make the award and distribution consistent with such ordinance or resolution by the local governing body. When more than one (1) local public agency participated in the investigation and seizure of forfeited property as certified by the attorney general, then the court shall order a distribution according to the participation of each local public agency. Accounting procedures for the financial administration of such funds shall be in keeping with those prescribed by the comptroller of the treasury; or

(4)

(A) In any matter concerning or arising out of TennCare fraud or abuse that is or may be the subject of a proceeding pursuant to this part, the district attorney general may specially appoint the following persons to prepare, initiate, and conduct such proceedings as the district attorney general is authorized by law to conduct pursuant to this part:

(i) Upon consent of the commissioner of finance and administration or the commissioner's designee, a licensed attorney employed by the department of finance and administration;

(ii) Upon consent of the director of the Tennessee bureau of investigation or the director's designee, a licensed attorney employed by the Tennessee bureau of investigation; or

(iii) Upon the consent of the chief executive officer of any governmental agency, a licensed attorney employed by that agency.

(B) The acts of an attorney acting for the district attorney general pursuant to this subdivision (b)(4) shall be valid as if done by the district attorney general, and there shall be no requirement that the district attorney general be disqualified from acting or that there be a vacancy in the office. Nor shall the district attorney general or any of the district attorney general's assistants be compelled to attend court proceedings in the matters in which an attorney is acting for the district attorney general pursuant to this subdivision (b)(4); provided, that the district attorney general or any of the district attorney general's assistants may be in attendance, and participate, if the district attorney general so desires. The authority to make such appointments extends to all proceedings brought under this part, whether civil or criminal.

(c) For purposes of this section, a local public agency includes any county or municipal law enforcement agency or commission, any judicial district drug task force established under state law, the district attorney general, or any local department or agency of local government authorized by the attorney general to participate in the investigation.

(d) Funds awarded under this section may not be used to supplement salaries of any public employee or law enforcement officer. Funds awarded under this section may not supplant other local or state funds.