June 4, 2009

Legislature passes key bills as lawmakers look to close 2009 session next week

The Tennessee State Senate passed several key bills this week, including anti-crime measures, second amendment rights bills, energy legislation and a major transportation bill as the 2009 session of the Tennessee General Assembly draws to a close. The legislature has completed the vast majority of its business while awaiting Governor Phil Bredesen’s amended budget package. That package includes the appropriations amendment, “omnibus budget bill” and “technical corrections bill.” The General Assembly will also take up any remaining legislation that has a fiscal impact on the budget at the same time or directly after the financial package is considered.

The appropriations bill is the legislation that proposes state government spending for the next fiscal year that begins on July 1. The “omnibus bill” would put language into the law allowing the administration to transfer funds from specific state government programs to be used in the general fund to help fill budget shortfalls. It also delays pay raises for certain employees that are mandated by state law, and contains some tax increases, like one proposed for Health Maintenance Organizations (HMOs). The “technical corrections bill” is a mixed bag of financial proposals that often accompanies the budget. Generally, it also contains any proposed tax increases, as well as any tax credits proposed in the budget, among other provisions.

The General Assembly will study the governor’s financial spending package next week and make any needed changes. Expect the legislature to focus almost entirely on the budget during the remaining days of the 2009 legislative session.

Tennessee Transportation Infrastructure Fund bill advances

Legislation that would provide a vehicle for local governments to finance and complete local transportation projects was approved in the Senate Finance Committee this week. The bill would give local governments the option of applying for a low interest loan for eligible infrastructure projects with flexible repayment terms. The State Transportation Infrastructure Fund would also let Tennessee make application for a portion of $200 million in stimulus funds recently made available through the American Recovery and Reinvestment Act.

“There are more projects that need funding than there is funding available,” said Senate Majority Leader Norris (R-Collierville). “One of the frustrations with stimulus money is that we can’t put it in the bank, and that we have to spend it right now.”

The state formed an infrastructure bank in 1998 within the Department of Transportation to capitalize on funds available for pilot projects. However, only one project has been financed by the bank since that time, even though there are about $2 million in funds available.

The legislation would place the Infrastructure Fund under the purview of the Tennessee Local Development Authority (TLDA). Prior to reaching the TLDA, applications will be reviewed by the Commissioner of the Tennessee Department of Transportation.

Thirty-three states have infrastructure banks, with two-thirds having a board which is responsible for project approval and oversight. The bill, SB 2120, now goes to the full Senate Transportation for final approval.

General Assembly overrides Governor’s veto / Bill allows law-abiding handgun permit holders to “carry” into establishments serving alcohol provided they do not consume alcoholic beverages

The Senate voted 21 to 9 on Thursday to override Governor Phil Bredesen’s veto of legislation that would allow law-abiding handgun permit holders to “carry” into restaurants or other establishments serving alcohol. The measure would apply as long as the owners of the premises have not posted notification that guns are banned and that the legal permit holder abides by current law which prohibits them from drinking alcoholic beverages while carrying their firearm.

Those who are in possession of a handgun are already prohibited from consuming alcohol or face a Class A misdemeanor, which carries a $2,000 fine and up to 11 months and 29 days in jail. The permit holders are screened through background checks conducted by the Tennessee Bureau of Investigation.

The bill upholds the Second Amendment rights of Tennesseeans to possess a firearm. That right was upheld last year in the landmark case of Heller vs. U.S. in which the U.S. Supreme Court ruled that the Second Amendment to the U.S. Constitution protects an individual’s right to possess a firearm for private use.

The vote to override the bill was taken as crime victim Nicki Goeser, who supported the action, looked on from the floor of the Senate. Goeser’s husband Ben Goeser was shot and killed by Hank Calvin Wise in April in the Karaoke business he managed. There were about 50 people inside the business when the shooting occurred. Nicki Goeser and patrons who watched as the crime occurred were prevented from carrying a weapon in the establishment under current Tennessee law.

The sponsor also read letters of support from chiefs of police and sheriffs, who support the legislation. One of the reasons cited was the impeccable record of responsibility practiced by legal permit holders both in Tennessee and nationwide.

Thirty-six other states, including Tennessee’s neighbors, have a law that allows for legal permit holders to carry their firearms into restaurants or bars that serve alcohol. There has been no move to repeal the law by any of those states due to responsible gun ownership by permit holders. The bill is one of several proposals in the General Assembly being considered this year to allow citizens to exercise their Second Amendment rights.

The House of Representatives also voted 69 to 27 to override the veto this week. The bill goes into effect 40 days from today, which is July 14.

Legislature passes “Tennessee Firearms Freedom Act”

The State Senate approved the “Tennessee Firearms Freedom Act” this week aimed at restoring states’ control of intra-state commerce and the regulation of firearms manufactured and sold within Tennessee. The bill, SB 1610 sponsored by Senator Beavers (R-Mt. Juliet), was proposed to prevent a federal attempt to legislate beyond the Constitutional limits of Congress under the Tenth Amendment.

“Be it the federal government mandating changes in order for states to receive federal funds or telling us how to regulate commerce contained completely within this state – enough is enough,” said Judiciary Chairman Mae Beavers, sponsor of the bill.

The Tennessee Firearms Freedom Act asserts that if a firearm or ammunition is made totally within the state of Tennessee and stamped “Made in Tennessee,” then the federal government has no jurisdiction over that item in any fashion so long as it remains in state and outside of interstate commerce. All state regulations applying to the possession of firearms in Tennessee would still be applicable and must be complied with.

Legislation makes it easier to prosecute those selling alcohol to intoxicated patrons

The State Senate approved legislation this week to clarify Tennessee law to make it easier for District Attorneys in the state to prosecute irresponsible businesses that serve alcohol to a person who is “visibly” intoxicated. The bill will also make it easier for a person who is injured by a drunk driver to recover damages.

The legislation, SB 1939 sponsored by Senator Mike Faulk (R-Church Hill), works in concert with SB 1947 which has already been signed into law to clarify three different criminal statutes dealing with selling alcoholic beverages to intoxicated persons.

The Alcoholic Beverage Commission already has a definition for “visibly intoxicated” that would be the standard under the two bills passed this year. The Commission is responsible for providing the course needed before a server can serve alcohol.

“These bills clear up any ambiguity about what defines a visibly intoxicated person under Tennessee law,” added Faulk. “It should also help in deterring an irresponsible business from serving alcohol to someone who is intoxicated and could end up killing someone if the drunken patron drives an automobile.”

Similarly, adults who knowingly allow youths aged 18 to 21 to drink alcoholic beverages could be prosecuted under a law that was approved by State Senators this week. The bill, SB 38, sponsored by Senator Jim Tracy (R-Shelbyville), closes a loophole in the current law regarding underage drinking by applying it to all youths banned from consuming alcohol under Tennessee law.

Legislation approved cracks down on money laundering

The Tennessee State Senate has approved legislation sponsored by Senator Doug Overbey (R-Maryville) that allows a court to take the ill-gotten gains of criminals who are convicted under Tennessee’s money laundering law. The bill, SB 784, defines the term “proceeds” of the criminal activity as interpreted by the U.S. Supreme Court in the decision U.S. v. Santos.

“Currently, our state law does not provide for a definition in accordance with the U.S. Supreme Court’s Santos decision that would allow for law enforcement to go after the gross proceeds of ill-gotten gains of criminals who are convicted of laundering money,” said Senator Overbey. “This bill cures that problem by defining the term “proceeds” and “gross proceeds” used under the law, so that criminals cannot keep assets gained by their illegal activities and can be prosecuted to the full extent of the law.”

The legislation defines “proceeds” to include “gross proceeds” to make it a crime to engage in a financial transaction of certain specified unlawful activities with the intent to promote those activities or to conceal the proceeds. The proceeds include any real, personal or intangible property of any kind connected to the illegal activity.

The Santos case involved the conviction in Indiana federal court of running an illegal gambling business and money laundering. Because Santos’s conviction was based on evidence that he used gross receipts, not profits, to promote his gambling ring, the District Court overturned his money laundering conviction, which was later upheld by the U.S. Supreme Court. The court ruling meant that to prove money laundering, the government is required to show that profits from the underlying illegal activity were used to further promote or conceal that activity.

“We cannot allow criminals to run a money laundering operation, shelter their profits, and get away with their crime,” said Senator Overbey. “This bill cures a defect in Tennessee law and gives it the teeth it needs to crack down on these criminals.”

Education Committee recommends lottery scholarship language be added to Budget bill

The Senate Education Committee sent a report to members of the Senate Finance Committee on Monday regarding the direction of lottery scholarship funds. The report provides language to be inserted into the budget, or appropriations bill, that requires Tennessee Student Assistance Corporation (TSAC) to give the General Assembly 90 days notice before drawing out any funds from the long term fixed investments.

Approximately $321 million has been placed in the Lottery for Education long term investment account according to Tennessee State Treasurer David Lillard, with the interest obligated to support $17 million in scholarship awards. There is approximately $101 million in Lottery for Education short term investment accounts.

The Committee also recommended language be inserted into the budget bill to ban approval of bonuses for any Lottery Corporation employee in a year in which lottery revenues are flat or declining. Gross sales for the lottery have totaled $902 million through April 30 as compared to $894 million last year. Lottery executives told lawmakers on the committee they expect the revenues to “remain constant or flat.”

Finally, the report recommended the Funding Board make lottery revenue projections for the current and next four fiscal years. Under the plan, the Funding Board would meet prior to December 15 to project the funding needs of the lottery scholarship and grant program for the current and succeeding four fiscal years. This action would help the General Assembly plan any course of action needed during the following legislative session.

Lottery proceeds for education are estimated to be $269 million for the 2009-10 fiscal year, while proceeds for after-school programs are expected to be approximately $13.2 million.

“In a time of economic contraction it is imperative that long range projections are used to keep the programs on track,” said Senate Education Chairman Dolores Gresham (R-Somerville), who sponsored the report. The members of the Education Committee were concerned that Tennessee take a fiscally conservative approach to the Lottery budget. The awards and scholarships made to our students are very important to all of us. We want to maintain a conservative and rational approach to the distributions of funds according to the priorities laid out in the Constitution.”

Senate passes legislation to “shore up” state’s declining Unemployment Fund

The full Senate has approved legislation to “shore up” Tennessee’s declining Unemployment Trust Fund and to enable the state to draw down $141 million in stimulus funds. The state was required to enact three costly options from a menu of five expansions of benefits to receive stimulus funds under the American Recovery and Reinvestment Act (ARRA). Following the requirement, 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 $30 million per year, when the stimulus funds dry up, which causes some to have future concerns for the solvency of the fund.

In addition, the unemployment bill would increase unemployment insurance to maintain solvency of the fund by raising the taxable wage base to $9,000 from $7,000 triggered by the amount of money remaining in the fund and adopts a 0.6 percent premium charge.

The current Trust Fund stands at approximately $200 million. With unemployment at 9.1 percent in Tennessee, there is a tremendous increase in benefit claims. Insolvency would mean federal control of the state’s fund, meaning Washington could 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.

Bills in Brief

Abortion Resolution — The Senate voted 24 to 9 to accept a minor House Amendment and send to the governor a resolution to give Tennesseans the opportunity to restore their voice in determining what state law should be regarding commonsense protections for abortions. The resolution, SJR 127 sponsored by Senator Diane Black (R-Gallatin), would allow citizens to amend Tennessee’s Constitution to say that the right to an abortion is only protected under the U.S. Constitution as interpreted by the U.S. Supreme Court. The practical effect of the legislation would be to bring Tennessee back into a position of neutrality so the people’s elected representatives can decide within the bounds of federal decisions what protections can be put into place.

Domestic Violence – The State Senate approved two bills this week dealing with domestic violence. One bill, SB 1094 sponsored by Senator Paul Stanley (R-Germantown), provides for a tenth court to hear domestic violence cases in Shelby County. The second bill, SB 314 sponsored by Senator Diane Black (R-Gallatin), sets forth a process for surrender of a firearm in cases where an order of protection has been granted in domestic violence cases. That bill came back to the Senate for approval of a House Amendment and now goes to the governor for his signature. The legislation aims to prevent further violence by setting up a procedure for the person to hand the gun over to a third party. The possession of a firearm while under an order of protection is an offense under federal law.

Uniform Debt Management Services Act — The State Senate approved an amendment and sent to the governor comprehensive legislation sponsored by Senator Doug Overbey (R-Maryville) to benefit Tennessee consumers who utilize the services of debt management specialists. The legislation, SB 812, requires a debt management company in Tennessee to obtain a license and supply information about their practices, fees, educational materials and employee qualifications. A company must also post a surety bond or another security to safeguard any money that it receives from individuals for payment of creditors. In addition, the debt management company must provide a disclosure to consumers that this may not be the best option for them and that it may affect their credit rating.

Trespassing – Two bills dealing with landowners and their responsibility when trespassers come onto their property were approved this week. One bill, SB 679 sponsored by Speaker Pro Tempore Jamie Woodson (R-Knoxville), amends Tennessee’s criminal trespass law to shift the burden from individual property owners to the alleged trespassers. Current statute requires extensive posting and signage, and this bill shifts that burden to the individual who will be required to know if he/she has permission to be on the land. Farmland can prove to be especially difficult to post, and this bill will protect farmers to ensure that trespassers are held accountable for their actions.

The second bill, SB 2102 sponsored by Senator Bo Watson (R-Chattanooga), addresses problems experienced by landowners and farmers where ATV riders or others have trespassed on private property. Under current law, if a trespasser is harmed by a dangerous condition created by a force of nature, like a ditch produced by heavy rainfall, the landowner could be responsible regardless of whether or not the person harmed was invited. This legislation seeks to remedy that action by protecting landowners when the condition is one created by natural forces.

State Election Commission — The full Senate has approved legislation to update the political composition of the State Election Commission to reflect a Republican majority as a result of the 2008 election. State law currently requires that the political composition of the five-member State Election Commission be three members of the majority party and two members of the minority party. Under the bill, SB 547 sponsored by Senate Majority Leader Mark Norris (R-Collierville), the new members would rotate off the Commission in two years when their terms of office expire. The make-up of the board would consequently return to a five-member status after that time. A Joint Convention will be held on Wednesday, June 10, to vote on the two new members of the Commission.

Cap and Trade — A resolution expressing Tennessee’s opposition to a federal proposal that would establish a carbon cap-and-trade system has been approved on final consideration in the State Senate. The measure, SJR 327 sponsored by Senator Jack Johnson (R-Franklin), comes after senior U.S. administration officials indicated that if Congress does not pass comprehensive legislation providing for a cap-and-trade system to regulate greenhouse gas emissions they will press ahead unilaterally with proposals using the Environmental Protection Agency’s (EPA) existing authority under the Clean Air Act.

Government transparency — Legislation to provide oversight for Tennessee’s government transparency website has passed on the floor of the Senate. The bill, SB 149 sponsored by Senator Bill Ketron (R-Murfreesboro), would make the website subject to audit by the State Comptroller’s office. 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.

Traffic Cameras — The State Senate has voted to prohibit the use of surveillance cameras on federal interstate highways except for department of transportation designated work zones. The measure, SB 1502 sponsored by Senator Tim Burchett (R-Knoxville) does not apply to Smart Way cameras or other intelligent transportation system cameras operated by the Department of Transportation.

Energy initiative – The State Senate has approved legislation aimed at drawing down stimulus funds for energy efficiency in Tennessee. Key components of the bill, SB 2300, include requiring state government to “lead by example” with improved energy management of its buildings and passenger motor vehicle fleet. It also encourages job creation in the clean energy technology sector by making qualified businesses eligible for Tennessee’s existing emerging industry tax credit. In addition it promotes energy efficiency in newly constructed homes with a limited statewide residential building code and expanding eligibility for federal funds used to “weatherize” existing homes in low-income areas.

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