April 26, 2016
109th General Assembly adjourns with tax reduction and public safety highlighting final week of legislative action
The 109th General Assembly adjourned on April 22nd to become a part of Tennessee history with the last week of legislative action seeing passage of some of the most important bills of the 2016 session. This includes legislation to phase out the Hall Income Tax, a bill to aid 100 percent service-related disabled veterans and the elderly disabled with property tax relief, the Public Safety Act to reduce crime and improve public safety, and the Rural Economic Opportunity Act to spur economic development in some of Tennessee’s most economically distressed counties. The Senate also approved major legislation cracking down on drunk drivers and a key bill to address opioid abuse in Tennessee.
On the final legislative day, the General Assembly approved historic legislation reducing the Hall tax rate from six percent to five percent, a seventeen percent cut from the total dollars collected by the state for fiscal year 2016. Senate Bill 47 calls for an annual reduction of at least one percent until the tax is eliminated. Furthermore, the bill provides that by January 1, 2022, the Hall Income Tax will no longer be collected and eliminated as a legal means of taxation in Tennessee.
The General Assembly also approved Senate Bill 1796 before adjourning, which increases property tax relief for disabled veterans, and/ or their widows or widowers, by repealing the income cap that was put in place last year. The legislation also raises the property value limit for the low-income elderly and the low-income disabled from $23,000 to $23,500.
2016 legislative session see passage of major legislation strengthening Tennessee’s DUI laws
The State Senate passed legislation in the closing week of the 2016 legislative session creating stricter penalties for DUI offenders in a year that has seen major legislation strengthening Tennessee’s drunk driving laws. Senate Bill 2065, sponsored by Senator John Stevens (R-Huntingdon), requires a judge to order an ignition interlock device for all convicted DUI offenders unless the judge provides a finding of fact for not ordering the device.
Although Tennessee currently mandates the use of ignition interlock devices, there is only about 15 to 20 percent compliance rate with the law because judges must provide a reason why the device should be placed on a DUI offender’s vehicle. This legislation flips that requirement by providing that a judge must state findings of fact on why an interlock device should not be installed on the offender’s vehicle.
Under the bill, offenders must have the ignition interlock devices in their car and operating for 365 consecutive days or for the entire time their license is revoked, whichever is longer. To ensure compliance, the legislation establishes penalties for the unauthorized tampering or removal of the interlock device. If the device is removed during the 365-day period, the offender must start over until it is served consecutively.
Similarly, if there has been any tampering with the device in the last 120 days of the sentence, the legislation provides that the period for which the interlock system is required will be extended by another 120 days.
The bill prescribes an additional $12.50 fee to the offender for administrative costs.
The Tennessee Senate also passed Senate Bill 35, sponsored by Senator Doug Overbey (R-Maryville), this week prohibiting those convicted of vehicular homicide by intoxication from being eligible for probation.
Other key bills addressing drunk driving offenses approved by the legislature this year include:
- Senate Bill 1572, sponsored by Senator Randy McNally (R-Oak Ridge), which elevates a DUI offense for those convicted six or more times from a class E felony to a class C felony and requires prior convictions for alcohol-related vehicle offenses, including those committed out-of-state, to be counted as prior convictions;
- Senate Bill 2576, sponsored by Senate Majority Leader Mark Norris (R-Collierville), which requires immediate sharing of an impaired driver’s DUI arrest and conviction history with law enforcement, the courts and the National Crime Information Centers, making the information accessible by law enforcement officers in their squad cars to check the criminal background of arrestees;
- Senate Bill 2577, sponsored by Senator Norris, which calls for timely transmission of fingerprints taken for vehicular impairment offenses;
- Senate Bill 1582, sponsored by Senator Overbey, which allows judges to order any device necessary to ensure that the offender complies with probation conditions and a clinical assessment to better cover driving under the influence of drugs;
- Senate Bill 2399, sponsored by Senator Overbey, which authorizes the use of the state’s Interlock Assistance Fund for transdermal monitoring devices or other alternative alcohol or drug monitoring devices when a court determines that an offender is unable to pay for it; and,
- Senate Bill 1730, sponsored by Senator Kerry Roberts (R-Springfield), which creates a Driving Under the Influence (DUI) memorial signing program to erect and maintain memorial signs on the non-interstate highways commemorating residents who died as a result of DUI related incident.
In 2015, 267 people died on Tennessee roadways from alcohol related deaths, accumulating 27.8 percent of all traffic fatalities that year.
Major legislation to reduce crime passes legislature
The Tennessee Senate approved major legislation sponsored by Senate Majority Leader Mark Norris (R-Collierville) and co-sponsored by Senate Judiciary Committee Chairman Brian Kelsey (R-Germantown), Senate Judiciary Committee Vice-Chairman Doug Overbey (R-Maryville), Senator Ed Jackson (R-Jackson), Senator Becky Massey (R-Knoxville) and Senator John Stevens (R-Huntingdon) this week which aims to reduce crime and improve public safety. The Public Safety Act of 2016 addresses the most serious offenses driving Tennessee’s violent crime rate by establishing mandatory minimum sentences for those convicted of three or more charges of aggravated burglary, especially aggravated burglary, or drug trafficking. A burglary is considered especially aggravated if the victim suffers serious bodily injury during the offense.
Under current law, those convicted three times or more of aggravated burglary and especially aggravated burglary must serve only 30 percent of their sentence before being considered for release or parole. The act sets the mandatory minimum period of incarceration to 85 percent for third and subsequent convictions for aggravated burglary, especially aggravated burglary and Class A, B, and C felonies for the sale, manufacture, and distribution of controlled substances.
On domestic violence, the legislation will allow a law enforcement officer to seek an order of protection on behalf of a domestic abuse victim. Additionally, if a law enforcement officer makes an arrest for a crime involving domestic abuse, then an automatic order of protection will be issued when there is probable cause to believe that the alleged assailant used or attempted to use deadly force against a domestic violence victim. A hearing should be held within 15 days of the automatic order of protection being issued.
A third and subsequent domestic violence conviction would change from a misdemeanor to a Class E felony under the legislation. This change maintains the current minimum 90-day sentence for a domestic violence conviction.
In addition, the measure retools community supervision to reduce the number of people returning to prison for probation and parole violations when their noncompliance does not rise to the level of a new criminal offense. The move is expected to save the state $80 million.
Of the 12,588 people entering state prison last year, 40 percent were probationers or parolees sent to prison because they violated supervision conditions. This legislation authorizes the department to utilize a robust, structured matrix of both sanctions and incentives to facilitate compliance with the conditions of supervision by the more than 71,000 state probationers and parolees.
The bill is funded by an $18 million appropriation in the state budget which passed the General Assembly last week.
Rural Economic Opportunity Act — The General Assembly passed significant job creation bill in the last week of legislative action to spur economic development in some of the state’s most economically distressed counties. Twenty-one of Tennessee’s 95 counties are considered economically distressed, meaning that they are in the bottom 10 percent nationally in terms of unemployment, per capita income, and poverty.
The “Rural Economic Opportunity Act of 2016,” sponsored by Senate Majority Leader Mark Norris (R-Collierville) has two components that aim to alleviate unemployment in these areas by supporting jobs and economic development. This includes implementation of the “Propelling Rural Economic Progress” (PREP) program that would create a grant fund to aid rural counties in building sites and infrastructure to incentivize businesses to develop in their region.
The second component of Senate Bill 2538 restructures the county tier system used for determining whether a company looking to locate or expand operations is eligible for job tax credits. This legislation would lower the job creation threshold to 20 in tier three counties and 10 in the additional fourth tier, used for the economically distressed counties. Tax credits help fuel company expansion by rewarding job creation based on the number of positions created, amount invested, type of business and location.
Small Business / SBIR / STTR Grants — The Senate passed legislation this week to aid small technology businesses across the state. Senate Bill 2606, sponsored by Senate Majority Leader Mark Norris (R-Collierville), seeks to take advantage of small business innovations and federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants. It would allow the Tennessee Technology Development Corporation, now known as LaunchTN, to have the authority to establish an applied research and developmental finance program to provide matching grants to small technology businesses. Fifteen other states, including Virginia and Kentucky, have taken advantage of the US Small Business Administration match-granting program and this legislation will make Tennessee more competitive with the neighboring states.
Federal Refugee Program – The Senate adopted a House amendment and sent to the governor legislation which urges Tennessee’s Attorney General to commence legal action in response to the federal government forcing Tennessee to spend state dollars for the Refugee Resettlement Program. If the Attorney General does not commence civil action, Senate Joint Resolution 467 , sponsored by Senate Majority Leader Mark Norris (R-Collierville), gives the General Assembly the authority to retain outside counsel for this purpose. Recently, high ranking officials in Washington have cast doubt on the screening process. Instead of the vetting process taking 18 to 24 months which the Obama administration said was proof of how through the process was, it has now been announced that Syrian refugees will be on American soil within 90 days.
Retail Accountability Act – Legislation passed the State Senate this week making changes to the state’s Retail Accountability Program (RAP). The law was first passed in 2012 to ensure that the taxes paid by consumers for beer and tobacco products are properly submitted to the state by requiring wholesalers to report to the Department of Revenue what is sold to retailers. In the first two and a half years of the program, the state has collected an additional $60 million in previously unreported sales tax revenue, which prompted an expansion of the program last year. However, the Department of Revenue’s implementation of the expanded program was more far-reaching than legislators intended. Senate Bill 2570 more clearly defines the scope of the program, including exempting perishable groceries and frozen foods from the reporting process and creating a sunset deadline for the legislature to evaluate the program’s effectiveness at a later date. It also calls for a change from monthly to quarterly reporting. The bill is sponsored by Senate Majority Leader Mark Norris (R-Collierville).
UTK Office of Diversity / Minority Scholarships — This week, the Senate Education Committee passed legislation taking $436,000 from the Office of Diversity and Inclusion at the University of Tennessee at Knoxville (UTK) and using it for scholarships in a minority engineering scholarship program. Senate Bill 1912, sponsored by Senator Todd Gardenhire (R-Chattanooga), reallocates the salaries of the four employees in UTK’s Office of Diversity and Inclusion for the fiscal year of 2016-2017 for the purpose of awarding scholarships to minority engineering students. The money may help up to 100 minority students in the engineering program receive a scholarship.
The bill also provides that state funds shall not be expended by the University of Tennessee to promote the use of gender neutral pronouns, to promote or inhibit the celebration of religious holidays or fund or support “Sex Week.”
In August, UTK came under fire by lawmakers, alumni and the general public for an Office of Diversity and Inclusion post on the university’s website asking students and faculty to toss out “he” and “she” when addressing students for gender-neutral pronouns like “ze” and “zir.” In December, the office posted guidance to students and faculty to ensure holiday parties at the campus are not a Christmas party in disguise. These actions follow several years of widespread disapproval over the university’s “Sex Week” which included such events as drag shows, lectures given by a porn actress, and condom scavenger hunts. Sex week has continued despite objections with an acceleration of objectionable content in this year’s list of courses.
Worker’s Compensation — This week the Senate passed a measure improving the worker’s compensation reforms adopted in 2013. The legislation, sponsored by Senator Mark Norris (R-Collierville), was brought by the Tennessee Chamber of Commerce and approved by the Worker’s Compensation Council. Senate Bill 2582 changes the injury notification requirement for workplace injuries from 30 days to 15 days to encourage workers to more timely notify their employer if they have been injured on the job. It also provides additional protections for workers by authorizing a worker’s compensation judge to award medical and/or disability benefits that have been wrongly denied during an expedited compensation hearing. The legislation encourages more employers to participate in the Tennessee Drug Free Workplace Act by authorizing employers to offer annual acknowledgment or notification to all employees of the provisions in that program rather than require the one hour annual training. Approximately 4,000 employers use the drug free workplace act out of 120,000 estimated employers and this law aims to create more participation. In addition, the legislation allows the Division of Worker’s Compensation to hire attorneys as ombudsman to help navigate the system.
Gang Violence — The General Assembly approved legislation this week providing clarity to a 2012 law calling for enhanced penalties for crimes committed in association with gang activity. Senate Bill 1558 requires an offense be punished one classification higher than the classification established by the offense if the defendant was a criminal gang member at the time of the offense and the criminal gang offense was committed at the direction of, in association with, or for the benefit of the defendant’s criminal gang or a member of the criminal gang. If the defendant was a leader or organizer of the criminal gang, then the offense shall be punished two classifications higher. The Tennessee Court of Criminal Appeals recently ruled the 2012 law was too broad and that in order to meet constitutional standards that the offense committed needed to be related to gang membership in order to eligible for an increased charge.
The General Assembly worked with the District Attorney General’s Conference in crafting the legislation. “Gang warfare, gang crime, is a cancer on society,” said Senate Majority Leader Mark Norris (R-Collierville), sponsor of the bill. “We need to equip law enforcement and the courts with all the tools they need, and that is exactly what this law does.”
And then there were what Senate Majority Leader Mark Norris, R-Collierville, diplomatically called “distractions and diversions from time to time.”
Tennessee General Assembly wraps 2016 session
By Richard Locker of The Commercial Appeal
NASHVILLE — Gov. Bill Haslam and Republican legislative leaders said the top accomplishments of the 2016 legislative session that ended Friday included a big increase in education funding, reduction of the Hall income tax, a restructuring of public higher education, a public safety act and the $34.9 billion balanced budget with no new debt.
In its 3½-month run, the General Assembly approved a long list of bills that will affect Tennesseans in ways large and small at work, at school, on their commutes, in their businesses and at play. Lawmakers expanded the places where permit holders can go armed, created new governing boards for the University of Memphis, Middle Tennessee State, Tennessee State and the three other Board of Regents universities, and ordered drivers convicted of texting while driving to driving school.
The Legislature legalized and taxed fantasy sports gambling, ended probation for vehicular homicide when the driver is intoxicated, and repealed a law that allows parents to reject needed medical treatment for their children due to their religious beliefs.
If Haslam allows the Hall tax bill to become law — he expressed concerns about its impact on the state’s future fiscal stability — it would cut the tax on stock and dividend income from 6 to 5 percent this year and eliminate the tax in 2022.
The progressive Institute on Taxation and Economic Policy says the reduction and repeal would make Tennessee’s tax system more regressive, with most Tennesseans getting little or no benefit. Meanwhile, Tennessee remains one of a dozen states still taxing food.
Legislatures also are known by what they refused to do. This session saw the defeat or failure of a dozen or more bills that captured headlines, including school vouchers, forcing women to watch an ultrasound of her fetus before an abortion, allowing communities to deannex themselves from their cities and towns through referendums, a tuition freeze at state universities, mandatory TBI investigations of shootings by police and public release of the results, the governor’s Insure Tennessee plan for up to 300,000 low-income uninsured residents, and allowing the Tennessee children of undocumented immigrants to pay in-state tuition rates at state colleges.
The perennial effort to repeal the motorcycle helmet law failed again. Advocates blamed heavy lobbying by AT&T, Comcast and other for-profits for the defeat of efforts to let municipal and rural electric co-ops provide broadband internet service into areas not served by commercial providers. Bills to abolish the state-run Achievement School District and to restrict its authority also failed.
And then there were what Senate Majority Leader Mark Norris, R-Collierville, diplomatically called “distractions and diversions from time to time.”
Lawmakers spent countless hours debating, passing and trying unsuccessfully to override Haslam’s veto of a bill naming the Holy Bible as “the official state book,” despite a 2015 attorney general’s opinion that it was unconstitutional.
They spent exponentially more time on a bill banning transgender students in public schools and college from using the school restrooms and locker rooms of the gender they identify with than on Democrats’ bills to enact a state minimum wage, a non-starter. The restroom bill was killed, then resurrected by lawmakers frightened by calls and emails encouraged by the conservative Family Action Council of Tennessee. The council warned of grown men in little girls restrooms. Its House sponsor finally withdrew it last week in the wake of national ridicule and an attorney general’s opinion that it could halt the flow of federal education funding.
It was one of several bills targeting the LGBT community. A bill allowing counselors to deny services to people because of their “strongly held religious beliefs” — later changed to “sincerely held principles” — won approval. And lawmakers approved a resolution disagreeing with the 2015 U.S. Supreme Court ruling legalizing same-sex marriage nationwide.
Several legislators’ efforts to defund diversity programs at the University of Tennessee, delivered with angry denunciations of students and administrators, culminated in a one-year diversion of $436,000 in salary money from UT’s office of diversity and inclusion and into scholarships for minority engineering students.
Lawmakers allowed employees of state colleges and universities with handgun-carry permits to go armed on their campuses, banned any “adverse action” by the colleges against students and employees with permits for keeping guns in their vehicles on campus, and required private schools and universities to write their own guns-on-campus policies.
The Legislature turned down a “constitutional carry” bill sought by some gun advocates, which would have allowed anyone who can legally own a gun to go armed without a permit.
After the National Rifle Association’s lobbyist expressed opposition, a committee killed a bill to penalize adults who leave guns accessible to children when children get them and injure or kill themselves or others. It was called MaKayla’s Law” after 8-year-old MaKayla Dyer, killed in Jefferson County last year by an 11-year-old neighbor boy with his father’s shotgun.
The Legislature approved the governor’s Public Safety Act, reducing prison time for less violent offenders and stiffening penalties for more serious offenses, including domestic violence. It also broadened existing law against sexual offenses and by authority figures.
At the last minute, lawmakers corrected flaws in a 2012 law that enhanced penalties for crimes by gang members but was struck down this month by the state Court of Criminal Appeals. The bill reinstates the tougher penalties if the crime is directly related to gang activity.
The Legislature passed a resolution ordering a lawsuit against the federal government over refugee resettlement in Tennessee, to be handled by a conservation out-of-state group that’s offered its help if the state attorney general refuses.
At the governor’s request, lawmakers altered the state’s school funding formula, called the Basic Education Program, although school districts had hoped for full funding of a separate plan called BEP 2.0, adopted in 2007 but never fully funded when the Great Recession struck. They did approve increases for teacher pay and insurance, technology, special education, and English Language learners.
Haslam is still considering vetoes but praised lawmakers’ overall work.
“We take it for granted here, but there are a lot of states that would love to have wrapped up a budget like we did that contains the largest investment in public education in history with a tax decrease. And not only is the state’s debt down but we didn’t take on any new debt. The comptroller’s office can’t find another year in which that happened,” he said.
In other action, the Legislature:
Restored property tax relief for disabled veterans and low-income elderly homeowners that had been reduced last year.
Required workers’ compensation claims to be filed within 15 days of job-related injury rather than 30, and stepped-up job search requirements for unemployment benefits.
Approved a measure making it more difficult to remove or rename monuments to historical figures, including Confederate symbols, by requiring a two-thirds approval of the Tennessee Historical Commission.
Nullified local governments’ authority to require contractors on local projects to hire specific percentages of workers from within the city.
Allowed shipments of wine to grocery stores in advance of the July 1 date in which food stores can start selling wine, and imposed a two-store limit on the number of liquor stores a single person or company can own.
Reserved for passing only the far-left lane on highways with at least three lanes in each direction — the “Slow Poke” law.
Authorized public-private partnerships for mass transit, and allowed transit buses to drive on the shoulders of highways.
Added Tennessee to a list of states calling for a national constitutional convention to amend the U.S. Constitution to limit powers of the federal government.
Imposed tougher penalties for school bus drivers for texting while operating the buses, in response to the December 2014 crash of two Knoxville school buses that killed two children and a teacher’s aide.
Created a task forces to study the potential for horse racing and gambling, juvenile justice reform and alternative ways to expand health coverage.
Made major changes in the “certificate of need” system that make it easier for hospitals to expand without state approval.
Required licensing and inspection of pain management clinics.
April 15, 2016
Legislature passes key bills as lawmakers look to close 2016 session next week
Budget calls for phase out of Hall Income Tax and increased property tax relief for 100 percent service-related disabled veterans and elderly disabled
The Tennessee Senate passed the state budget as the 2016 session of the Tennessee General Assembly draws to a close. The $34.9 billion debt-free budget proposes state government spending for the next fiscal year that begins July 1, 2016 and extends to June 30, 2017.
“Senate Bill 2653 is the Balanced Budget Act of 2016,” said Senate Majority Leader Mark Norris (R-Collierville), sponsor of the legislation. “It focuses on the ‘four Es’ of Tennessee – employment, education, economic opportunity and enforcement of the law. The balanced budget is ‘job one’ because it not only demonstrates our stewardship of the taxpayers’ property, but it reflects upon our ability to assure the best return on their investment of precious resources and undergirds our constitutional responsibility to provide for the peace, safety and happiness of the people of Tennessee.”
Among two key provisions in the budget is one which calls for the phase out of Tennessee’s Hall Income Tax on interest and dividend income from investments. Since enactment of the Hall tax in 1929, the use of investment savings has grown as a primary source of retirement income. The current tax rate is six percent applied to all taxable interest and dividend income over $1250 per person and $2500 for married couples filing jointly. The legislation calls for cutting the tax by one percent this year, with the legislative intent to eliminate it by 2021.
In addition, the budget provides for increased property tax relief for 100 percent service-related disabled veterans by repealing the income cap that was put in place last year and raises the property value limit for the elderly disabled. Norris said there are currently 21 counties which are making up any differentials that are helping to even the tax relief that can be given.
On K-12 education, the budget makes the largest investment without a tax increase in Tennessee’s history by providing an additional $261 million for Tennessee’s public schools. Significant K-12 increases include $104.6 million for teacher salaries, $29.5 million to fund 12 months (up from 11) of health insurance for teachers, $13.9 million for additional English Language Learning teachers (ELL) and translators, and $3.6 million for training teachers and principals.
In higher education, the budget totals $1.7 billion, including $50 million recurring for the outcomes formula productivity increases at the University of Tennessee (UT) and Tennessee Board of Regents (TBR) institutions. Similarly, it provides additional funds of almost $9.2 million for operating increases at UT and TBR non-formula institutions. In addition, the appropriations bill provides a one-time influx of $297.8 million for capital improvements and maintenance at the state’s higher education institutions.
The budget also provides $10 million in non-recurring funds for the Labor Education and Alignment Program (LEAP) program which was very successfully funded with an initial $10 million several years ago. The LEAP program, sponsored by Leader Norris, enables students in Tennessee Colleges of Applied Technology and community colleges to participate in technical training developed with input from area employers. The cooperative training counts as part of an approved curriculum toward a meaningful certificate or degree.
The Senate’s amendment to the budget bolsters job creation by adding $4.25 million to the governor’s proposed $20 million for the Drive to 55 capacity fund. The Drive to 55 initiative aims to get 55 percent of Tennesseans equipped with a college degree or certificate by the year 2025.
Other key budget improvements include:
- $100 million for the state’s Rainy Day Fund, bringing it to an estimated $668 million;
- $142 million for transportation to restore money taken from the state’s road fund under the previous administration;
- $20 million to help keep communities safe and prisons secure, including about $18 million for the “Public Safety Act” which will help reduce the recidivism rate in Tennessee and more efficiently sentence violent offenders;
- $1.2 million for 12 new highway patrol officers;
- $1 million for communications systems improvements in the Department of Safety;
- $4.1 million for salary adjustments for commissioned officers in the Department of Safety;
- Funds for four additional forensic technical service agents in the Tennessee Bureau of Investigations to help analyze and process cellular data confiscated in the course of investigating crimes including sex trafficking;
- Funding for support staff in training for elder abuse to the District Attorneys General Conference;
- $1.1 million for rural communities by increasing producer grants and $10 million for the Rural Economic Opportunity Propelling Rural Economic Progress” (PREP) program fund;
- $18.2 million to restore the TennCare provider rate reduction and $6 million to restore the TennCare Pharmacy rate cut by $6 million;
- $193 million in TennCare reserves;
- $3.2 million for federally qualified health care and community health services; and,
- $500,000 for perinatal services statewide.
“It matters who governs and it matters how we govern,” Leader Norris added. “I often say, ‘the best is yet to come so long as we make the best of what comes our way.’ I believe that working together for Tennessee we will.”
Victim’s Rights / Parole Hearings — A bill to permit the Board of Probation and Parole to defer a new parole hearing for up to ten years after the Board denies an inmate’s parole if the inmate is using the parole hearings process to intimidate and harass the victim was approved by the Senate on Wednesday. Senate Bill 407 stems from the brutal kidnapping of Laura Dean and Gerald Street in Hawkins County, Tennessee. The victims were taken through multiple counties and Dean was raped before the two were thrown off a bridge. The perpetrators were sentenced to 130 years in prison. Since that time, they have become eligible for parole and had at least seven parole hearings in a ten-year period, two being only nine months apart. Currently, the Board cannot defer further hearings beyond seven years. This legislation allows the Board the discretion to wait ten years before considering whether an inmate is eligible for parole. The bill will now go to the floor of the Senate for final consideration. It is sponsored by Senator Doug Overbey (R-Maryville).
F & E Taxes — Senator Randy McNally (R-Oak Ridge) guided the passage of legislation concerning franchise and excise (F&E) taxes through the Senate Finance, Ways and Means Committee this week. Senate Bill 2558 improves the process for estimating F&E taxes by allowing a current year method, which gives businesses an alternative 80% calculation method. This scheme will be used by some taxpayers, like retailers, that enter fourth quarters that often make or break their year, giving them greater flexibility and time to reconcile their estimates. The legislation also significantly lowers the penalty for underpayment of F&E taxes from five to two percent. “The bill efforts “The bill efforts to take some of the volatility out of the excise tax by lowering some of the penalties and discourages people from overpaying which leads to credits and refunds,” said Sen. McNally. Last year, the Department of Revenue received $160,000,000 in overpayment from franchise and excise taxes.
Officer Involved Shootings / Reports — Senator Brian Kelsey (R-Germantown) guided passage of legislation regarding officer involved shootings through the Senate Finance, Ways and Means Committee this week. Senate Bill 2023 will allow for an investigatory report prepared by the Tennessee Bureau of Investigation (TBI) in response to an officer involved shooting to be released by the district attorney general. Currently, a district attorney must petition the court to release the report. This bill aims to provide more transparency to the public regarding the reports.
Business / Licensing and Regulations — Legislation to reassess some of the barriers of entry to the workforce was approved by the State Senate on Monday. Senate Bill 2469, sponsored by Senator Mark Green (R-Clarksville), would compel various licensing authorities to review their entry regulations in various occupations and report such to the Senate Government Operations Committee. Once reviewed, the committee can make recommendations to remove some of the unnecessary restrictions and demands. The “Right to Earn a Living Act” will help relieve the burden of excessive regulation on the right of an individual to pursue a chosen business or profession.
Elderly / Healthcare Structures — The State Senate passed legislation this week that will help relieve some of the burdens placed upon Tennessee’s elderly. Sponsored by Mike Bell (R-Riceville), Senate Bill 2375 will authorize zoning consideration of temporary family healthcare structures for mentally or physically impaired citizens on the property of their caregiver. Similar to a “mother-in-law apartment,” the temporary housing must have access to water, sewer and electric utilities. The elderly is the fasting growing age demographic in Tennessee and by 2020, 1 in 5 citizens will be over the age of 65 and 70 percent will require some form of assistance. This legislation allows for those vulnerable adults to receive the assistance they need from their families while still maintaining some independence. The companion bill awaits consideration by the full House of Representatives.
Court of Criminal Appeals – The Senate Judiciary Committee voted this week in favor of recommending the confirmation of Shelby County Attorney J. Ross Dyer to the Court of Criminal Appeals, Western Section. Dyer was nominated by Governor Bill Haslam to replace Roger Page, who recently became a Tennessee Supreme Court Justice. Dyer, 43, has been the chief counsel for Shelby County since 2014, serving as the top legal advisor to the county mayor, county commission and other county officials. Prior to that, he was senior counsel and managing attorney for the Memphis office of the Tennessee Attorney General from 2004-2014. He was also team leader and assistant attorney general in the criminal justice division of the Nashville office of the Tennessee Attorney General from 1998-2004. In those positions, he handled more than 20 cases in the Tennessee Supreme Court and more than 1,000 cases in the Tennessee Court of Criminal Appeals. The House of Representatives and Senate will meet in a joint session on Monday to act on the nomination.
Affordable Healthcare — The State Senate approved a minor amendment and sent to the governor legislation to provide Tennesseans with an affordable free-market option to contract directly with their physician for primary healthcare services. The “Health Care Empowerment Act” removes roadblocks in state law to the growing Direct Primary Care (DPC) healthcare model by ensuring that it is not considered an HMO or insurance company for purposes of regulation in Tennessee.
Under the DPC model, patients pay their doctors a monthly fee in return for agreed-upon primary care services. In order to be Obamacare-compliant, a patient may supplement a DPC membership with a high-deductible “catastrophic” insurance policy. The combined cost of monthly membership fees and insurance premiums is anticipated to be substantially lower than a traditional health insurance plan with co-pays, deductibles, and premiums.
Senate Bill 2443 aims to give healthcare consumers who are struggling to pay the increasing costs of premiums or who have been priced out of the market, with an affordable option to contract directly with their physician for primary care services. It also gives physicians the opportunity to set aside insurance hassles and just practice medicine.
Studies show that in states where direct primary care is utilized, health outcomes have improved with doctors spending more time with patients on preventative care and monitoring chronic conditions. Presently, 14 states have passed enabling DPC legislation. The bill is sponsored by Senator Kerry Roberts (R-Springfield).
Fetal Remains Act — Legislation which addresses concerns raised last year regarding the selling of human fetal passed the Senate this week. The “Fetal Remains Act,” seeks to stop the possibility of abortion clinics selling fetal remains by properly equipping the Tennessee Department of Health to be able to identify this practice.
The bill comes after the Senate’s Government Operations Committee held a hearing last summer to look at enforcement of Tennessee’s law banning the sale of tissue or organs from an aborted fetus. Following the meeting, Governor Haslam charged the Tennessee Department of Health (TDH) with conducting a comprehensive review of abortion regulations and inspection requirements related to the disposition of an aborted fetus to identify ways to strengthen the regulatory framework surrounding facilities that perform abortions. A number of administrative changes were implemented immediately to help address the issue, but legislation was also needed to strengthen accountability and transparency for surgery centers performing abortions.
Senate Bill 2568 requires increased reporting of the disposition of fetal remains, prohibits reimbursement of any costs associated with shipping an aborted fetus or fetal remains and establishes a mandatory interim assessment process for an ambulatory surgical treatment center performing more than 50 abortions annually. At present, any abortion performed in Tennessee must be reported to the Tennessee Department of Health (TDH) within 10 days of the procedure. This bill adds the requirement that, for a surgical abortion, physicians must also report the method of disposition of the fetal remains and, in the event the remains were transferred to a third party, the name and address of the third party and date of transfer. For facilities performing 50 or more surgical abortions per year, these facilities must maintain a record of such reports and produce the reports to TDH during inspections under the legislation.
In addition to the current ban on the sale or purchase of fetal tissue, this bill adds language to make clear that reimbursement for any costs associated with the preparation, preservation, transfer, shipping or handling of an aborted fetus or fetal tissue is also a Class E felony. The legislation requires the mother’s authorization for disposition of the fetus that results from a surgical abortion to be included as part of the informed consent process prior to the procedure, as well.
Finally, the bill requires that any facility performing more than 50 surgical abortions per year must perform interim assessments of their compliance with the Board of Licensing Health Care Facilities on specified measures and report on sentinel events. Facilities with deficiencies will develop an acceptable plan of correction. These assessments will provide for a more robust on-site inspection by TDH and help foster a continuous culture of compliance. The bill is sponsored by Senate Majority Leader Mark Norris (R-Collierville) and Senator Kerry Roberts (R-Springfield).
April 8, 2016
Norris Advances Rural Economic Opportunity Act
Critically important employment and economic opportunity legislation topped a busy week on Capitol Hill. This includes a major bill sponsored by Senate Majority Leader Mark Norris (R-Collierville) to spur economic development in some of the state’s most economically distressed counties.
Twenty-one of Tennessee’s 95 counties are considered economically distressed, meaning that they are in the bottom 10 percent nationally in terms of unemployment, per capita income, and poverty. Senate Bill 2538, known as the “Rural Economic Opportunity Act of 2016,” has two components that aim to alleviate unemployment in these areas by supporting jobs and economic development. This includes implementation of the “Propelling Rural Economic Progress” (PREP) program which creates a grant fund to aid rural counties in building sites and infrastructure to incentivize businesses to develop in their region.
“It’s going to provide a way for the Department of Economic and Community Development to spur economic development in rural parts of the state, but only through appropriations by the General Assembly,” stated Norris. “You can think, in your districts, of the small projects that the proponents will come to you and plead, ‘we just need $150,000 for this certification so we can open up a whole new program,’ and all kinds of things that we see. It is very difficult for us to fund those, under the current construct. The PREP fund is really going to help us in that regard and spur economic growth and development in those counties.”
The second component of the bill restructures the county tier system used for determining whether a company looking to locate or expand operations is eligible for job tax credits. Tax credits help fuel company expansion by rewarding job creation based on the number of positions created, amount invested, type of business and location.
The legislation adds a fourth tier the state’s current three-tier tax incentive arrangement to help drive development in less wealthy counties. In order for a business to receive job tax credits, under all three of the current tiers, they must provide a minimum of 25 jobs. This legislation would lower the job creation threshold to 20 in tier three counties and 10 in the additional fourth tier, used for the economically distressed counties.
“What we have come to grips with, particularly in those 21 counties, is that the system we use statewide isn’t flexible enough to provide the kind of opportunities those counties can hope to reach,” Norris continued. “By creating the fourth tier, we’re creating more opportunities for them to create more jobs or expansions which they could actually qualify.”
The legislation now moves to the Senate floor for final consideration.
The Finance, Ways and Means Committee approved another job creation bill which is designed to enhance the growth of Tennessee’s captive insurance industry which spurs high paying jobs. The legislation, sponsored by Senator Doug Overbey (R-Maryville), provides a road map in state law for moving a captive from another state to Tennessee, updating the statute to keep Tennessee competitive.
A captive is a wholly owned subsidiary created to provide insurance to its non-insurance parent company (or companies). Captives are established to meet the risk-management needs of the owners or members. Employees supporting the industry are generally high wage earners such as accountants, actuaries and attorneys. Captives also generate a tremendous amount of capital investment in financial institutions in areas in which they locate.
Tennessee’s captive insurance business has grown dramatically since the state’s captive law was revised in 2011 when there were only two captive insurance companies in the state. Just two years later, the law had stimulated the investment of about $29 million in Tennessee banks. At the end of 2015, the number of captive insurance companies domiciled in the state had grown to 126. In addition, there were 304 risk bearing cells for a total of 430 risk bearing entities. A preliminary estimate of the current bank deposits as a result of captives locating in the state today stands at almost $400 million. This growth has catapulted Tennessee to rank in the top five states in the nation for captives to locate.
“What we are talking about is bringing in capital into the state of Tennessee that is invested in our financial institutions that then becomes a part of the capital that gets reinvested here,” said Senator Overbey. “That’s really the important part. It’s not growing this industry just for the sake of growing and saying we have 430 risk bearing entities. The importance is the capital that is brought into our state, to our financial institutions and then turns over time and time and time again. That’s the importance of keeping our laws up-to-date and supporting the work of this sector.”
Senate Bill 2402 also creates a one-time tax holiday from the self-procurement tax for a Tennessee company to move its captive to Tennessee prior to December 1, 2018. The self-procurement tax is a self-reported tax on insureds residing in the state.
In addition, the proposal requires that any legal action taken against a protected cell, of a protected cell captive insurance company, specifically name the cell as a party to the suit. This clarifies that the assets of one cell cannot be used to satisfy a judgment against another cell.
The bill is currently pending final action of the floor of both the Senate and House of Representatives.
Education bills support efforts to spur job creation by increasing the number of Tennesseans with a post-secondary degree or credential
Several bills were approved in the State Senate this week which support the state’s job creation efforts by providing Tennesseans with more opportunities to receive a post-secondary degree or credential. This includes legislation approved by the Senate Finance, Ways and Means Committee to bolster Tennessee’s Community College Reconnect Grant which helps adults who want to return to college and complete their degree.
The Community Reconnect Grant passed in 2015 as a pilot program to assist adults in completing an associate’s degree at Tennessee community colleges. Given its success, Senate Majority Leader Mark Norris (R-Collierville) presented Senate Bill 2595 which opens up the opportunity to more Tennesseans by changing the eligibility requirements. Under the legislation, there is no longer an income cap condition; one can have their completed academic hours towards any associate degree instead of an associate of applied science degree; and the time period for one to have not been enrolled in a postsecondary school changes from two years to one.
The legislation advances the state’s “Drive to 55” initiative to get 55 percent of Tennesseans equipped with a college degree or certificate by the year 2025. The Drive to 55 initiative established the Tennessee Promise program, the nation’s first scholarship and mentorship program that provides high school graduates last-dollar scholarships to attend two years of community or technical college free of tuition and fees; reduced the number of college freshmen requiring remediation through the SAILS (Seamless Alignment and Integrated Learning Support) program; provided free technical college for adults through TCAT Reconnect Grants; created Tennessee Reconnect to help more adults return to college to complete unfinished degrees; developed a more comprehensive state approach to serving student veterans; and leveraged technology to enhance classroom instruction and college advising.
The bill passed committee unanimously and will next be considered on the Senate floor.
The Senate Finance, Ways and Means Committee also approved a bill, sponsored by Senator Doug Overbey (R-Maryville), expanding the Tennessee STEP UP scholarship. The scholarship assists students with intellectual and developmental disabilities (IDD) in paying for post-secondary education. Senate Bill 1584 extends the scholarship to provide for up to four years of education, instead of the current two, in order to match federally qualified programs.
The program has served 123 young adults since its inception at the state’s five institutions which have the comprehensive transition and post-secondary program designation from the U.S. Department of Education. These are Vanderbilt University, the University of Tennessee at Knoxville, the University of Memphis, Lipscomb University and Union University. There is currently an 85 percent completion rate for the programs and 75 percent of graduates have secured paid employment.
The bill now goes to the Senate floor for final consideration.
In addition, the full Senate gave final approval to the Focus On College and University Success (FOCUS) Act. The purpose of the legislation, sponsored by Leader Norris, is to better align Tennessee’s postsecondary colleges and universities to meet the goal of graduating more Tennesseans with post-secondary certifications.
Senate Bill 2569 creates local boards for Austin Peay State University, East Tennessee State University, Middle Tennessee State University, Tennessee State University, Tennessee Technological University and the University of Memphis. This allows for a more sharpened focus by the Tennessee Board of Regents (TBR) on the state’s 13 community and 27 technical colleges. The Tennessee Higher Education Commission (THEC) would assume an enhanced coordinating role in higher education, ensuring progress on a cohesive, statewide master plan; maintaining academic program quality; and formulating a strategic finance plan for state higher education.
The bill now goes to the governor before becoming law and will take effect on July 1.
Similarly, State Senators have passed the “Higher Education Authorization Act” which aligns the for-profit higher education sector with the state’s Drive to 55 efforts by reshaping its regulatory framework. The primary feature of the new regulatory framework is an optional, expedited fast track path for institutions to pursue authorization that acknowledges the academic accreditation achieved by the respective campus.
In order to obtain this fast tracked authorization, the institutions are required to be in good standing with a regional or national accreditor, be recognized by the U.S. Department of Education and provide documentation of other consumer protection safeguards to the Tennessee Higher Education Commission. As a new consumer protection mechanism, the Tennessee Higher Education Commission (THEC) will provide comprehensive performance data to the public on institutions receiving fast-track authorization that will allow prospective students to review and evaluate institutional outcomes. Senate Bill 2564 is sponsored by Senate Government Operations Committee Chairman Mike Bell (R-Riceville).
In other higher education news this week, it was announced that 81 percent of the 2015-16 class of Tennessee Promise students returned for the spring semester after beginning classes last fall. This high retention rate for Tennessee Promise students is a significant indicator these students are on pathways to success in higher education. In fall 2015 there was a 24.7 percent enrollment increase at community colleges and a 20 percent enrollment increase at colleges of applied technology (TCATs).
Data provided by the Tennessee Higher Education Commission indicates that Tennessee Promise students enrolled at a TCAT had a retention rate of almost 95 percent while community college students were retained at a rate of 78.5 percent.
Legislation establishing an online voter registration system for Tennesseans approved by Senate Finance, Ways and Means Committee
Legislation providing for the establishment of an online voter registration system for Tennesseans was approved by members of the Senate Finance, Ways and Means Committee on Wednesday. Under Senate Bill 1626, sponsored by Senate State and Local Government Committee Chairman Ken Yager (R-Kingston), voters with an unexpired driver’s license or personal identification card issued by the Department of Safety will be able to go to an official state website where they will be able to register to vote online.
The voter registration application would be reviewed electronically. If the request is confirmed to be valid, the new registration would be added to the state’s voter registration list after being reviewed by the respective county election commission office. The validation step is done by comparing the information on the online registration form against the information provided by the same individual when he or she received a driver’s license or state-issued identification card.
The signature already on record with the state would become the signature on record for voting. If the information does not match, applicants would be directed to print and complete the application and mail it to the county election commission office in their county of residence to be processed.
Twenty-nine states plus the District of Columbia offer online registration. Upon passage, the bill would become effective on July 1.
Identity Theft — The State Senate passed legislation this week that prohibits registers of deeds from disclosing personal information to help guard against identity theft. Senate Bill 910, sponsored by Senator Jack Johnson (R-Franklin), categorizes certain data as “personally identifying information,” including social security numbers, driver license numbers, employer tax identification numbers, electronic identification numbers and residential addresses and forbids the release of it. The bill passed the Senate floor unanimously.
DNA Preservation Act — The Senate Judiciary Committee approved the “DNA Preservation Act” on Monday, requiring that biological evidence collected in capital crime cases in Tennessee be properly preserved until the convicted person’s execution or completion of sentence. Senate Bill 2342, sponsored by Senator Steve Dickerson (R-Nashville), recognizes the crucial role DNA evidence plays in convicting criminals of abhorrent acts and upholding justice. At the same time, it recognizes the role it can play in exonerating the innocent from wrongful charges and convictions, while helping find the true perpetrator of the crime.
Dyslexia Screening — In final action on the Senate floor, State Senators voted to approve a bill requiring school districts to screen students in grades K-12 for dyslexia. Senate Bill 2635, sponsored by Senate Education Committee Chairman Dolores Gresham (R-Somerville), also creates a nine-member Dyslexia Advisory Council to coordinate with the state’s Department of Education (DOE) in the selection of the universal screening tool that will be used. In addition, the measure requires the DOE to provide training to educators to identify the condition and appropriately intervene to help the student learn.
Elder Abuse – Major legislation protecting senior citizens from the growing problem of elder abuse has passed. Senate Bill 1848, sponsored by Senator Todd Gardenhire (R-Chattanooga), contains key recommendations from as task force studying the problem who called for setting up checks on the people who are working in direct contact with vulnerable adults in home healthcare and hospice. The legislation lays out requirements that must be met before an employee may be hired. Applicants must supply fingerprint samples, submit to a background check and provide past references. These requirements would also apply to third party vendors that have direct contact with the patients.
Transparency in Student Testing — Legislation which aims to bring more transparency to student testing has passed the Senate. Based upon recommendations from a taskforce of educators, legislators and parents that worked for six months to study and identify best practices in the testing of Tennessee students, Senate Bill 2540, sponsored by Senator Ferrell Haile (R-Gallatin), offers key solutions to help students reach their academic goals. The legislation would allow teachers, parents and students the ability to obtain 70 percent or more of the questions and answers from standardized tests annually, allowing them to review the areas of opportunity. The bill would also eliminate two of the standardized tests for grades 8 and 10 and allow all 11th grade students to retake the ACT or SAT free of charge, in order to give them the opportunity to increase their scores and options for postsecondary education.
Senate Investigations and Oversight / Child Feeding Programs – On Tuesday, the Senate Investigations and Oversight Subcommittee of the Senate Finance, Ways and Means Committee looked at recent audits completed by the Tennessee Comptroller of the Treasury regarding questionable costs or misspent funds in the federal Child and Adult Care Food Program administered by the state’s Department of Human Services. The department contracts with vendors to administer the program. The subcommittee, chaired by Senator Steven Dickerson (R-Nashville), heard from Comptroller Justin Wilson and Department of Human Services Commissioner Raquel Hatter, particularly in regards to the last two audits released in March. The subcommittee is looking at potential shortcomings in the internal controls in the department to monitor the vendors and asked the commissioner to institute concrete improvements in the program. The department was also asked to issue written updates regarding steps taken to make improvements in one month and two month intervals. The Subcommittee will then have a public meeting to follow up on the matter in three months. Approximately $80 million flows through DHS for program services each year. Legislation was passed during the legislative session making critical changes in the way the department contract with and monitors organizations that receive taxpayer money to feed children and adults who need temporary help from the government. Senate Bill 1472 is sponsored by Senator Jim Tracy (R-Shelbyville).