UPDATE: Tennessee Governor Bill Haslam (R) announced Friday that he is withholding his signature from a controversial bill that will strip funds the University of Tennessee, Knoxville’s diversity office thus allowing the bill to become law.

“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 of Diversity and Inclusion for one year into scholarships for minority engineering students,” Gov. Haslam said in a statement released to The Tennessean. “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.”

“I don’t think he’ll veto anything. That’s just my gut feeling. Are there some he’s holding that maybe become law without his signature? Possibly.”

The University of Tennessee, Knoxville’s Vice Chancellor for Diversity and Inclusion resigned Thursday, the day before a bill stripping his department of state funding is due to become law barring an unexpected veto by Gov. Bill Haslam.

Chancellor Rickey Hall has been at the center of repeated controversy at UT’s diversity office, starting when he posted a gender-neutral pronoun guide on the school’s website in September, and escalating after he encouraged faculty members to “ensure that [their] holiday party is not a Christmas party.”

Ever since, lawmakers have been highly critical of Hall, with some even calling for his resignation upon learning of the “holiday party” guidelines.

Thursday, the University of Washington announced that it had accepted Hall’s application as the school’s new diversity officer beginning August 1, though the release made no mention of his troubled tenure at UT.

Campus Reform reached out to Hall’s office to ask for the reasons for his transfer, but did not receive a response in time for publication.

Meanwhile, Gov. Haslam is facing a Friday deadline to determine the fate of the bill diverting funds from the school’s diversity office to a scholarship fund for engineering students. Only a veto can stop the measure at this point, as it will become law even without his signature at the end of the day.

Lawmakers close to Haslam have indicated that he likely will not veto the bill, pointing out that he has only used his veto powers four times thus far in his five-year tenure, and House Speaker Beth Harwell told the Times Free Press that Haslam himself had implied to lawmakers that he would not try to block any of the bills passed this session.

Harwell said Haslam “indicated toward the end [of lawmakers’ annual session] that he didn’t see anything that would cause us to need an override session,” venturing that “I’m anticipating that means he’s going to sign them.”

Haslam could also let the bill take effect without his signature if he refrains from issuing an executive veto before the end of a ten-day deadline (excluding Sundays), which Lt. Gov. Ron Ramsey said is a possibility.

“I don’t think he’ll veto anything. That’s just my gut feeling. No, he hasn’t told me that. I think if he had I would have known by now—I’d like to think I would have,” Ramsey told reporters last week, suggestively adding, “Are there some he’s holding that maybe become law without his signature? Possibly.”

The bill, HB 2248, explicitly prevents the school from ever using state funds “to promote the use of gender neutral pronouns; to promote or inhibit the celebration of religious holidays; or to fund or support Sex Week.”

[RELATED: TN legislators ponder cutting funds for Diversity and Inclusion, Sex Week]

Instead, state funds will be diverted from the diversity office into a scholarship for minority engineering students as well as a state “decal program,” which will receive $100,000 to spend on decals with the national motto—“In God We Trust”—for law enforcement vehicles.

[RELATED: TN House and Senate pass bill that will strip funds from UT diversity office]

Tennessee’s state legislature has a historically tense relationship with UT’s diversity office dating back to 2013, when lawmakers cut funds from the diversity office in response to its first annual Sex Week. This year, lawmakers found UT’s Sex Week particularly “disturbing” after it hosted an amateur porn star to lecture students on “butt stuff” and “oral pleasures.”

[RELATED: UT Sex Week to feature porn star under guise of ‘sex educator’]

“The content is horrifically disturbing,” State Rep. Kevin Brooks (R) said in reaction to this year's Sex Week. “The fact that we are using state dollars and state classrooms on state campuses to promote UT Sex Week is unforgivable.”

[RELATED: Lawmakers: UT diversity office a ‘national embarrassment’]

Although the House and the Senate were initially considering two separate companion bills, only the House version was ultimately passed, albeit with some amendments removing its more punitive provisions, including one that would have cut funding for the diversity office completely.

The latest version of the bill diverts—for one year only—about $436,000 away from the school’s diversity office. The bill, however, seemingly prevents UT from ever using state funds to promote Sex Week, even though the financial diversion is only a one-time regulation.

Gov. Haslam has offered little comment on HB 2248. Campus Reform reached out to Haslam’s office but no representatives were immediately available for comment. This story will be updated when Gov. Haslam determines the outcome of the bill.

Follow the author of this article on Twitter: @AGockowski