(a) There is hereby established the Tennessee heritage conservation trust fund board of trustees. The board shall be attached to the department of environment and conservation for administrative purposes, but shall be independent of the department. Expenditures from the trust fund shall be made only upon authorization of the board.

(b)

(1) The board shall consist of eleven (11) members.

(2) Trustees shall be appointed by the governor, subject to confirmation by each house of the general assembly, but appointments shall be effective until adversely acted upon by the general assembly.

(3) Persons appointed to the board shall include persons knowledgeable in the areas of land acquisition, management, conservation and protection.

(4) The membership of the board shall appropriately reflect the racial and geographic diversity of this state. At no time shall the membership of the board be composed of more than four (4) members who reside in any one (1) of the grand divisions of the state, as defined in title 4, chapter 1, part 2.

(5) The commissioner of environment and conservation, the commissioner of agriculture, and the executive director of the wildlife resources agency, or their designees, shall serve as ex officio, nonvoting members of the board.

(6) The governor shall appoint a board chair from the membership of the board. Other officers shall be selected as provided in the bylaws of the fund.

(c) Trustees shall serve four-year, renewable terms; provided, that of the initial trustees appointed:

(1) Three (3) trustees shall be appointed for an initial term of four (4) years;

(2) Three (3) trustees shall be appointed for an initial term of three (3) years;

(3) Three (3) trustees shall be appointed for an initial term of two (2) years; and

(4) Two (2) trustees shall be appointed for an initial term of one (1) year.

(d) Should a board position become vacant through resignation, removal, or other cause, the governor shall appoint a new member to serve the unexpired term, subject to confirmation of each house of the general assembly, as provided in subsection (b). Trustees shall continue to serve on the board after the expiration of the trustee's term until a new trustee is appointed.

(e) A quorum of the board shall be seven (7) trustees.

(f) Trustees shall receive no compensation for their service on the board, but may be reimbursed for those expenses allowed by the comprehensive travel regulations, as promulgated by the department of finance and administration and approved by the attorney general and reporter.

(g) The board shall adopt and implement a policy related to conflicts of interest, to ensure that all trustees avoid any situation that creates an actual or perceived conflict of interest related to the work of the trust fund.

(h) The board shall submit an annual report to the governor, speaker of the house of representatives, speaker of the senate, comptroller of the treasury, chair of the energy, agriculture and natural resources committee of the senate, chair of the agriculture and natural resources committee of the house of representatives, chair of the government operations committee of the senate, and chair of the government operations committee of the house of representatives, by June 30 of each year. Such report shall include detailed information on the operation and financial status of the trust fund and any nonprofit entity created pursuant to § 11-7-103(f).

(i) The trust fund and any nonprofit entity created pursuant to § 11-7-103(f) shall be subject to an annual audit by the comptroller of the treasury, and the trust fund or entity shall bear the full costs of this audit.

(j) Operating expenses of the board and its staff shall be paid from the fund.