May 22, 2009

Senate continues to work on tough issues facing 2009 legislative session

Tennessee lawmakers continued to make progress on Capitol Hill this week on some of the toughest issues facing the legislature in the 2009 legislative session, including judicial selection and the state’s unemployment compensation fund. However, the biggest legislative hurdle before adjournment is the state’s budget, which is currently being revised by Governor Phil Bredesen to reflect the loss of another $160 to $300 million in anticipated revenues.

Funding Board lowers estimates — Senate Finance Committee members were briefed by State Comptroller Justin Wilson regarding the latest figures from the state’s Funding Board, which lowered its estimates last week on what the state can expect to receive in revenues for current budget year and the one set to begin on July 1. The Board revised its estimates after April revenues showed a six to seven percent shortfall in sales tax collections and a 23 percent decline in the state’s franchise taxes.

The Funding Board, comprised of the state’s top economists, said Tennessee has continued to experience a major decline in big ticket sales, which has negatively impacted the state’s sales and privilege tax collections. The economists do not expect to see improvement in revenues until the first quarter of the next fiscal year and forecasted a continued decline until that time.

Wilson said that Board’s new estimates for total state taxes show a range of decrease in revenues as low as -9.0 percent, to a high of -8.50 percent for the current budget year. The Board expects only a slight improvement in total state taxes from a low of -.75 percent to a high of .45 percent in the 2009-2010 fiscal year.

The new estimates mean the state’s budget shortfall has now grown by an additional $300 million from the Board’s previous forecast to reach a total gap of approximately $1.4 billion in the current budget year. It also means the governor must go back to work on a plan to cut $160 to $300 million from his state spending plan to meet Tennessee’s Constitutional requirement of a balanced budget. Lawmakers expect a new plan to adjust the budgeting needs by at least $200 million accordingly by May 29.

The Funding Board could not predict the effects of a federal stimulus package on Tennessee’s economy over the next 14 months. Economic experts nationwide have also shown little confidence in predicting a turnaround in the immediate future as a result of the federal American Recovery and Reinvestment Act.

Unemployment legislation advances — Most of the federal stimulus funds contain strings that require states to use the money for mandated purposes. It can also demand passage of legislation not enacted by state legislatures previously as a condition for receiving the stimulus money. An example of such mandates was visible this week with passage of legislation in the Senate Finance Committee on an unemployment compensation bill designed to draw down stimulus funds.

The unemployment bill reduces the time period in which applicants must work to be determined eligible, changes the number of hours for eligibility for part-time workers from 32 to 20, and increases payments to applicants with dependents. The federal stimulus law does not allow states to automatically “sunset” the expansion of benefits when the stimulus money is exhausted. The Department of Labor has determined the bill will cost Tennessee approximately $25 million per year, when the stimulus funds dry up, which causes some to have future concerns for the solvency of the fund.

“In a sense this is the Unemployment Compensation Modernization Act that was unsuccessfully moved through Congress that has now been incorporated in the American Recovery and Reinvestment Act,” said Senator Bo Watson (R-Chattanooga). “Once those changes have been in place, the ability to change our law back is going to be near impossible.”

In addition, the unemployment bill proposes increasing unemployment insurance to maintain solvency of the fund by raising the taxable wage base to $9,000 from $7,000 and adopting a 0.6 percent premium charge. The legislation would also allow for 20 weeks of extended benefits utilizing stimulus funds.

The current Trust Fund stands at just over $200 million. Insolvency would mean federal control of the state’s fund, allowing Washington to dictate future tax rates and wage base thresholds. It would also mean mandatory borrowing with interest from the federal government that could cost businesses more in the long run according to the Bredesen administration. The legislation would generate $220 million in new revenues, a level which Labor Commissioner James Neely says would keep Tennessee from going “into the red” and borrowing from the federal government at interest rates of up to 25 percent.

Judicial Nominating Commission – Several bills advanced in Senate Committees this week to revise the current method for selecting the state’s appellate and Supreme Court judges. The action comes as the Judicial Selection Commission, a component of Tennessee’s current plan for appointing judges, is set to expire next month. Under that plan, called the Tennessee Plan, the commission that nominates judges is selected from lists submitted by various legal organizations to the Speakers of the House and Senate and governor.

Both SB 2114 sponsored by Senate Majority Leader Mark Norris (R-Collierville), and SB 1573 sponsored by Speaker Pro-Tempore Jamie Woodson (R-Knoxville) and Norris, provides for a 17-member Judicial Nominating Commission that would be limited to 10 attorney members. After being appointed through this process, the judge would stand for approval by the voters who could decide whether or not to “retain” or “replace” them. Currently, citizens vote “yes” or “no” on the ballot regarding the retention of judges.

If voters decide to replace a judge, an interim judge would be appointed by the governor until the next election. At that point, the people could decide who would fill the slot through a popular election, which is the same process by which the state’s trial judges are currently selected.

Another bill, SB 1715 sponsored by Senator Doug Overbey (R-Maryville), contains the same provisions, except there is no contested elections and the governor must choose from the six nominees who come from the Nominating Commission.

All three bills provide public access to every aspect of the nominating process. They also ban lobbyists or employers of lobbyists from serving on the Nominating Commission.

There was an additional amendment placed on SB 2114 that allows several choices regarding the judicial process to be heard on the Senate floor. The amendment would abolish a nominating commission and allow the governor to choose a judge, who would then stand for election by popular vote. That amendment also contains a provision calling for citizens to vote on a limited Constitutional Convention on whether or not they want to keep the judicial selection process or elect judges through popular election.

Tennessee’s Constitution says judges must be “elected by the qualified voters of the state.” The debate in the legislature has focused on whether or not the selection process with a retention vote meets that test. All three bills will be heard in the Senate Finance Committee on Tuesday. If approved there, the legislation could be on the floor as early as Thursday of next week.

Also advancing this week is legislation, SB 2168, sponsored by Senator Dewayne Bunch (R-Cleveland), that is a stop gap plan to allow the governor to fill court vacancies until an election could be held in the event legislation on the matter is not passed this year. The back-up plan would restore selection of judges to the method that was used previous to changes made in the system in the 1970s.

Two bills advance to protect children from abuse

Two bills sponsored by Senator Tim Burchett (R-Knoxville) to protect children advanced in the State Senate this week, including one measure approved by the Senate Judiciary Committee to set up a Tennessee Second Look Commission to review cases and procedures related to child sexual abuse.

The Commission would review cases from the initial report of alleged abuse through to a finding or criminal conviction of abuse. Burchett said it is an important first step in understanding how the system fails endangered kids.

“The facts show that our present court system fails kids, even after the abuse has been reported,” said Senator Burchett. “We must find a better way to protect these kids which is the purpose of the study.”

The bill, SB 1534, is one of a series of proposals promoted by actor and child protection activist David Keith, spokesman for the National Association to Protect Children. Last week, Keith told Senate Judiciary Committee members that only two percent of the 750,000 pedophiles identified by computer in the United States have been investigated. He said hundreds of thousands of children are being raped, tortured, filmed and traced through Internet and computer technology.

The 17-member Commission would be administered through the state’s Administrative Office of the Courts (AOC) and would submit a final report by January 1, 2011.

The second bill sponsored by Burchett and approved by the full Senate this week provides General Sessions, Circuit and Criminal Courts concurrent jurisdiction with Juvenile Courts over prosecutions of child abuse, neglect and endangerment offenses. The legislation aims to allow a court to act more swiftly to provide protection for endangered kids.

“This gives prosecutors more flexibility to hear the case regarding an endangered child in another court,” added Burchett. “The goal is to put the child’s welfare first.”

Currently, exclusive jurisdiction in child abuse cases is vested in Juvenile Court. This legislation retains jurisdiction in juvenile court, but allows the prosecutors the discretion to bring the case to another court which might be more appropriate to the crime or that might be able to hear the case quicker.

The bill, SB 1530, now goes to the governor for his signature.

Legislation aims to provide benefits to small and medium size businesses

Legislation to establish “The Tennessee Small Business Investment Company Credit Act (TSBIA)” overcame its first hurdle with passage by the Senate Commerce Committee this week. The bill is an effort to provide benefits to small, medium-sized, and start-up businesses that do not enjoy the same economic development incentives that have been provided to the larger companies that invest capital in Tennessee. The bill, SB 1203, is sponsored by Senator Doug Overbey (R-Maryville).

Overbey said the bill is a proven economic development tool that will channel $120 million to local businesses for expansion and working capital to increase jobs immediately. Insurance companies have large pools of untapped capital. The TSBIA is a mechanism to entice these companies to invest that capital in Tennessee small businesses.

“The TSBIA is a forward-looking economic development tool for the future growth and prosperity of a state that focuses on promising small companies and stimulates dynamic economic growth, creating new jobs and generating tax revenues,” said Sen. Overbey. “The economic impact of a TSBIA would begin almost immediately.”

Legislation encourages creation of green jobs and sustainable buildings

Legislation that would enable local governments to promote energy efficiency and sustainability was approved by the full Senate this week. The bill, SB 1919 sponsored by Senator Jack Johnson (R-Franklin), expands local power of housing and development agencies to promote economic development through the use of tax increment financing.

“As we rebuild our economy, we should build for the future as well as the present,” said Senator Johnson. “Real economic growth is sustainable growth, and green jobs are an important part of our future.”

The legislation creates incentives for local governments to use tax increment financing to pay for energy efficiency costs, encourages sustainable design by including Green Globes and LEED-certification costs within the financing package, and promotes local alternative energy projects that incorporate green design principles. These organizations provide the nationally-recognized standards for energy efficiency.

“This bill will ensure that economic re-development will continue and that it is environmentally friendly to our communities,” Johnson concluded. “I am pleased the State Senate has approved this legislation.”

Bills in Brief

Courts / “Good faith exception” — The full Senate approved legislation this week that allows a judge to give a jury access to evidence or facts obtained as a result of a search or seizure which contains a minor technical error. Many states, as well as the federal courts, have enacted what is known as the “common sense” or “good faith exception” to the exclusionary rule regarding suppression of evidence in violation to the Fourth Amendment’s unreasonable search and seizure provision. The bill, SB 518, attempts to balance the scales of justice to a standard embraced by the U.S. Supreme Court in United States v. Leon and Herring v. United States, which was the law in Tennessee prior to 1979. This standard allows the judge and jury to weigh all the facts and still administer justice in an objective manner.

Abortion Resolution – The House of Representatives have passed Senate Joint Resolution 127, which aims to restore to the people of Tennessee their rightful authority to regulate abortion through their elected representatives with an overwhelming 77-21 vote. The constitutional amendment is in response to the 2001 Tennessee Supreme Court decision in Planned Parenthood vs Sundquist, when the court created a right to unregulated abortion. The decision also prohibited the Tennessee legislature from enacting regulations governing abortions, arguably making Tennessee the most liberal in the nation with regards to abortion laws. The resolution had passed the Senate for the last several years, but had never cleared the hurdle of the Public Health Subcommittee in the House of Representatives until a Republican majority was elected. The Democrat leadership in the House kept the resolution bottled up in a subcommittee, even though the measure had bi-partisan support.

Victims of Crime — Legislation to provide funding for a program that gives victims of crime notification regarding any change in status of the offender was approved by the Senate Finance Committee this week. The bill, SB 1684 sponsored by Senator Bill Ketron (R-Murfreesboro), creates the Statewide Automated Victim Information and Notification System Fund by adding a $1 litigation tax on all criminal charges. This legislation would raise the necessary funds to keep the program up and running and expand its scope to more Tennessee counties.

Education pays – The full Senate has approved legislation that encourages local education agencies (LEAs) to develop “Education Pays” pilot programs for at-risk students. The idea is for the Pilot Program to provide monetary or other rewards of value for academic achievement funded through private organizations. The measure, SB 482 sponsored by Senator Dewayne Bunch (R-Cleveland), also encourages the State Board of Education to study the effects of any such programs in Tennessee and from other states and report its findings to the General Assembly. Several localities across the country have been successful in implementing such programs to ensure that the right incentives are in place to reward good behavior for high risk youth.

Second Amendment Rights / Parks – Legislation met the final approval of the Senate this week to allow legal gun carry permit holders to posses a firearm in state or federal parks in Tennessee. The legislation also allows local government bodies to maintain control of concealed carry within local parks. According to a report from the U.S. Department of Interior, there were 8 murders, 43 forcible rapes, 57 robberies and 274 instances of aggravated assault in parks nationwide in 2007. In January, the federal government lifted a regulation that banned guns in national parks and wildlife refuges. The measure, SB 976, is sponsored by Senator Mae Beavers (R-Mt. Juliet).

Division of Intellectual Disabilities — State Senator Ken Yager (R-Harriman) gained unanimous approval in the State Senate this week for legislation he is sponsoring to rename the state’s Division of Mental Retardation Services the “Division of Intellectual Disabilities.” The initiative began with Special Olympics and other advocates for intellectually challenged individuals to change any derogatory use of the word “retardation” from the country’s vocabulary, beginning with references in government programs or services. The bill, SB 1121, was supported by the Department of Mental Retardation Advisory Council which is made up of disability advocates, family members, providers, and consumers who voted in favor of supporting this initiative earlier this year. Due to cost factors, the name of the Division will be changed as new volumes of Tennessee’s laws are replaced and supplements are published.

Micro-stamping – The Judiciary Committee has approved SB 1908 to prohibit the sale of “micro-stamped” firearms or ammunition in Tennessee. Although micro-stamping legislation supporters claim it will help police solve crimes, many believe their real purpose is to price handguns beyond the reach of many Americans, by requiring firearms to be made with the gadgetry necessary to create the markings or to ban handguns by requiring that they “micro-stamp” more consistently than is technologically possible.

Real ID – The State Senate voted this week to make Tennessee the 12th state in the U.S. prohibiting the issuance of a REAL ID card. The bill, SB 1934 sponsored by Senator Tim Burchett (R-Knoxville), directs the Tennessee Department of Safety not to implement the provisions of the federal REAL ID program. The REAL ID Act was signed into law in 2005. The federal initiative forces states to standardize driver’s licenses cards across the nation into a single national identity card and database. It does this by stipulating that state driver’s licenses and state ID cards will not be accepted for “federal purposes” unless they are in compliance with the Act. If implemented, it would cost the state $30 million.

Government transparency — Legislation to provide oversight for Tennessee’s government transparency website advanced in the Senate Finance Committee this week. The bill, SB 149 sponsored by Senator Bill Ketron (R-Murfreesboro), would make the website subject to audit by the State Comptroller’s office. Ketron and other Republicans have pushed for years to implement an open government website where citizens can see how tax revenues are spent. The website was finally implemented earlier this year. This legislation will simply make sure there is oversight of the website.

Preferred Provider Organization Transparency Act — — The Senate Finance and Commerce Committee has approved legislation this week named the “Preferred Provider Organization Transparency Act.” The bill makes sure that health care providers who contract with health insurance plans have full knowledge of any assignment of their contract to entities associated with the insurance company with whom they would be paid. Under the bill, SB 693 sponsored by Senator Steve Southerland, the third party would be required to inform the contracting health care provider of a Web site on which they may get information about any changes in the health plan status. This includes to whom the third party has granted access to the provider’s health care services and contractual discounts. The bill will help doctors know who is paying and to whom they can address any problems.

Rules of the Road – Legislation adding two dangerous traffic violations to the list of current violations which are penalized under a Class A and Class B misdemeanors has been approved by the full Senate this week. The violations include crossing a double yellow line to hit another vehicle head-on and cutting off a vehicle while passing. The penalty would be a Class A misdemeanor if another person is killed and a Class B misdemeanor if they are seriously injured. The bill, SB 289, is sponsored by Senator Mae Beavers (R-Mt. Juliet).

ICE – The Senate Judiciary Committee has approved legislation calling for Tennessee jails to send information to the federal Immigration and Customs Enforcement office (ICE) regarding prisoners who do not have documentation that they are in the U.S. legally. The bill requires the jail keeper to fax, email or send a copy of the booking information within three business days of the person’s arrest. The bill, SB 1141, is sponsored by Senator Dolores Gresham (R-Somerville)

Opposition to housing prisoners from Guantanamo Bay in Tennessee – Members of the Senate Finance Committee voted this week to expresses Tennessee’s opposition to the utilization of any local, state, federal or private jail, prison or detention facility in the state to confine prisoners from the United States detention facility at Guantanamo Bay, Cuba. The bill, SJR 381, is sponsored by Senator Jim Tracy (R-Shelbyville).

Wine / Shipping – The full Senate approved a House amendment and sent to the governor legislation to allow consumers to ship wine from wineries to their homes. Currently, it is a felony under Tennessee law to transport wine across state lines. This legislation allows wineries to ship up to three cases of wine per year to Tennessee consumers provided they have license. The bill, SB 166, is sponsored by Senator Paul Stanley (R-Germantown).

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