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Tennessee Gov. Bill Haslam speaks to reporters in the Old Supreme Court Chamber of the state Capitol in Nashville, Tenn., on Wednesday, May 18, 2016. The Republican governor questioned the need for a special legislative session to respond to a directive by President Barack Obama's administration on bathroom access for transgender students. (AP Photo/Erik Schelzig)

This story was updated at 12:54 p.m. with new details.

NASHVILLE - Despite reservations, Gov. Bill Haslam today allowed a bill stripping the University of Tennessee's diversity office of one year's funding to become law as well as a resolution directing State Attorney General Herbert Slatery to sue the Obama administration over the federal refugee resettlement program.

Haslam declined to sign the legislation but in the absence of a veto, they became law.

The Republican also signed into law another bill he had raised concerns over: The new law phases out Tennessee's Hall Income Tax on bond interest and stock dividends over the next six years.

In addition to the state losing revenue, local governments, which receive a three eighths share of the money, will lose a source of state funding they say could force them to hike property taxes on everyone.

Despite saying he had concerns about the UT-Knoxville bill as well as the anti-refugee resettlement resolution, the Republican governor chose not to veto the measures passed by fellow Republicans in the General Assembly.

Regarding the refugee lawsuit resolution, which also authorizes the state to hire outside counsel if Slatery refuses to handle the matter, Haslam said "I trust the Attorney General to determine whether the state has a claim in this case or in any other, and I have constitutional concerns about one branch of government telling another what to do."

He said as a result he is returning Senate Joint Resolution "without my signature and am requesting that the Attorney General clarify whether the legislative branch actually has the authority to hire outside counsel to represent the state."

"I also question whether seeking to dismantle the Refugee Act of 1980 is the proper course for our state," Haslam said in his message. "Rather, I believe the best way to protect Tennesseans from terrorism is to take the steps outlined in my administration's Public Safety Action Plan, which enhances our ability to analyze information for links to terrorist activity, creates a Cyber Security Advisory Council, restructures our office of Homeland Security, establishes school safety teams, and provides training for active shooter incidents and explosive device attacks."

Regarding the bill - now law - stripping UT Knoxville campus's Office for Diversity and Inclusion of $436,000 for the 2016-2017 budget year, the governor said "I am letting HB 2248 become law without my signature.

"This bill received considerable debate and discussion during legislative session, and the final form of HB 2248 was revised so that its primary effect is to redirect administrative funding for the Office for Diversity and Inclusion for one year into scholarships for minority engineering students," Haslam said.

"Although I do not like the precedent of redirecting funds within a higher education institution's budget, I find the ultimate outcome of the legislation less objectionable and am therefore letting it become law without my endorsement."

Sen. Todd Gardenhire, R-Chattanooga, sponsored the UT diversity bill and watered down the House sponsor's intent of permanently stripping the office's funding. Gardenhire said he hit upon the idea of diverting the money for minority scholarships after speaking with a black engineer attending UT on a since-discontinued minority scholarship program.

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