(a) The governor may exempt an agency from complying with any provision of this chapter where necessary to conform to any provisions of federal law or rules and regulations as a condition to the receipt of federal granted funds provided that:

(1) The governor determines that, because of a conflict between this chapter and federal law or rules and regulations, receipt of federal funds either authorized, anticipated, or appropriated is placed in jeopardy;

(2) The governor determines that the alternative procedure necessary to satisfy federal funding requirements does not abrogate basic fairness;

(3) The governor exempts that agency from only those provisions of the chapter compliance with which would jeopardize federal funding;

(4) The governor states in detail and in writing the governor's findings under subdivisions (a)(1) and (2), the extent of the agency's exemption under subdivision (a)(3), and the alternative procedures to replace those procedures from which the agency is exempted under this section;

(5) The governor files a copy of such written statement with the secretary of state;

(6) The effectiveness of the exemption shall in no case be extended beyond thirty (30) days after the date of adjournment of the next session of the general assembly lasting ten (10) legislative days or longer; and that if the general assembly fails to act within such legislative session to make by law such exemption permanent, then the governor may not at a later time reinstitute the same exemption; and

(7) The governor may at any time determine that the federal funding is no longer jeopardized and at such time revoke the governor's exemption of an agency from any particular provision of the chapter, which revocation shall be effective upon the governor filing a written statement to that effect with the secretary of state.

(b) Such administrative latitude is intended to facilitate the operation of state government and cooperation between the state of Tennessee and the United States government and shall not be used to create job positions that are intended to exist beyond the federal funding, nor to create any program requiring the expenditure of state funds not specifically directed by the general assembly, or that are intended to exist beyond the federal funding.