Cost saving legislation would overhaul the way state government
procures contracts for goods and services

Major legislation overhauling the way state government contracts for the purchase of up to $25 billion in goods and services has been approved by the Senate State and Local Government Committee. The legislation, Senate Bill 3598, sponsored by Senator Bill Ketron (R-Murfreesboro), is designed to implement cost saving strategies taken from the best practices implemented by procurement officials nationwide that could save Tennessee hundreds of millions of dollars over the long run.

“This bill streamlines the way we do business to help ensure Tennessee taxpayers get the best value for our dollars in state contracting,” said Senator Ketron, who is Chairman of the Fiscal Review Committee, the legislature’s financial watchdog panel. “We will save hundreds of millions of dollars for the taxpayers over the long run by applying best practices and modernizing how state government manages the procurement of goods and services.”

The bill uses information contained in a State of Tennessee Procurement Assessment showing state authority for contracting is divided with one path for procuring goods and routine services and another path for the purchase of professional services. Each path has its own rules, players, decision makers, databases, technology, policies and staff. Without a single entity in charge of or accountable for statewide procurement spending, there is currently no easy way to manage a coherent, comprehensive, statewide cost saving strategy for procurement. The report also said it was confusing for vendors to do business with the state due to inefficient and redundant processes.

The proposed legislation would combine procurement of goods and services for the state into one central office housed in a department to be chosen by the governor. The governor would also appoint a single Chief Procurement Officer who has extensive qualifications and experience in contract administration to head the agency. The Chief Procurement officer would lead a staff of 88 well trained professionals to carryout the function of procurement management, contract management, contract compliance /quality assurance, and vendor customer relations.

An Advisory Council for State Procurement would be established to provide counsel to the new agency, replacing the present Board of Standards and Review Committee. It would consist of representatives from state agencies, the legislative branch and those with expertise from the vendor community. A State Procurement Commission consisting of the State Comptroller, the Commissioner General Services and the Commissioner of Finance and Administration would be formed to examine and approve rules, regulations and procedures for the agency under the bill. A Protest Committee consisting of the State Treasurer, the Commissioner of Finance and Administration and the Commissioner of General Services would hear protests regarding procurement of contracts as long as they have no direct conflict of interest on the matter.

The new statewide system could also take advantage of the government’s clout as a volume-buyer to leverage more competitive bidding. Other objectives of the legislation is to provide opportunity and fairness in state contracting and implementation of performance measures to make sure taxpayer dollars are used efficiently and effectively.

“We are in very tough financial times right now and, if we are going to move forward, we must restructure state government from the way we know it,” added Ketron.

The bill is similar to a new law implemented in Georgia and comes from the best practices obtained from the National Association of State Procurement Officials, the American Bar Association 2000 Model Procurement Code for State and Local Governments and reports from the Federal Government Accountability Office. It now moves to the Senate Finance Committee for consideration.

In other action on state cost saving measures, the Senate State and Local Government Committee has approved legislation to provide more accurate and transparent information regarding the potential costs of legislation or state regulatory actions. Senate Bill 3549, which is also sponsored by Senator Ketron, requires monetary estimates of all bills, ending the practice of fiscal notes classifying the impact of legislation as “not-significant.”

Currently, fiscal notes reflect what a bill will cost over the duration of the next budget year, which runs from July 1 to June 30. This legislation requires a three-year cost analysis and that state departments or agencies provide an estimate of the fiscal impact of proposed rules and regulations to the Secretary of State. The Secretary of State would then post a table listing any estimated fiscal impact of all proposed regulations on its Website for transparency.

“We must take a longer-term look at the impact of legislation, given the current economic climate,” added Senator Ketron. “This bill makes sure that all the facts are on the table about the potential cost of a bill before we vote to enact it.”

Long term care CHOICES Program working to provide seniors and the disabled with more health care options

The TennCare Oversight Committee heard an update this week regarding the progress of the state’s new CHOICES program for long-term care. The program, which is a result of the “Long-Term Care Community Choices Act of 2008,” expands access to home and community-based services for seniors and the disabled to allow them to age in place in their homes.

There were no alternatives to institutional nursing home care in Tennessee before 2003, with the state ranking last in the nation in home and community based services expenditures for the elderly and adults with disabilities. Although home and community-based care services began in Tennessee in 2004, there was slow growth through 2006, with only 1,131 persons enrolled in the program in the first two years. After implementation of the new law, home and community-based services make up 9.32 percent of all long term care funding, which is up from .74 percent in 1999.

The CHOICES program integrates TennCare nursing facility services and home and community based services for the elderly and adults with physical disabilities into the existing managed care system. The goal is a more balance long-term care system depending on the needs and preferences of people receiving long term care services.

On March 1, the initial enrollment target for CHOICES was set at 7,500 for home- and community-based services. The enrollment target will increase to 9,500 on July 1, 2010. The state has the potential to serve as many as 11,000 members now that program slots can be refilled as soon as they become available, which will nearly double the number of people receiving home- and community-based services in the first year of the CHOICES program.

The program is currently serving new enrollees in Middle Tennessee and is now looking ahead to the implementation of CHOICES to those in need of long term care services in East and West Tennessee.

“This program restructured how long-term care is handled in the TennCare program by providing elderly and disabled Tennesseans with more choices and a simpler process for accessing them,” said Senator Diane Black, one of the sponsors of the 2008 legislation and a member of the Joint Committee on Long Term Care. “This will allow us to serve more people in their homes with the kinds of services that meet their needs in a way that makes better financial sense.”

In other action on health care, the TennCare Oversight Committee was updated on new federal health reform bill signed by the President on March 23. TennCare officials said that the new federal law changes many aspects of health care in the U.S., including the required insurance coverage for all individuals, new rules for insurance providers, the creation of a health insurance exchange, and broad changes to state’s Medicaid and CHIP programs.

Officials said that while the law provides an outline of the changes ahead, the federal government must release policies, regulations and guidelines before final details are known. The Department continues to receive interpretation of the bill as passed using information from the Congressional Budget Office, the federal government, Kaiser, and other state Medicaid programs, as well as, from Tennessee’s own internal data.

Some changes impacting Medicaid programs will take place in the next few years; however, most do not take effect until 2014. Among the immediate changes is the Maintenance of Effort (MOE) requirement that provides Medicaid agencies cannot change eligibility standards, methodologies or procedures to be more restrictive than they were when the federal bill was signed into law.

Senate Judiciary Committee continues attack on crime

The Senate Judiciary Committee continued to make progress in attacking crime in the state with passage of several bills this week, including two measures sponsored by Senator Rusty Crowe (R-Johnson City) to address domestic violence. One proposal, Senate Bill 2708, prohibits a respondent of an order of protection from telephoning, contacting, or otherwise communicating directly or indirectly with the petitioner. The bill makes it clear that the person to whom the order is directed cannot contact the victim “for any purpose.” The action would prevent excuses from being used in violation of the order.

“This just makes sure that there is a clear understanding that there is to be no communication when an order of protection is issued,” said Senator Crowe.

The second domestic violence proposal, Senate Bill 2709, allows the court to order domestic abuse perpetrators to attend counseling programs. The bill prescribes a list of counseling programs the judges can order from if they choose, including, intervention programs that are certified by Domestic Violence State Coordinating Council. The bill increases the maximum penalty for those convicted of the crime from $200 to $225, with the proceeds going to grants for domestic violence shelter programs.

Senator Crowe also guided to passage Senate Bill 2882 which aims to curb the number of deaths in work and school zones due to reckless driving. The bill adds to the list of charges that can be considered under the state’s vehicular homicide law, cases where the cause was the driver’s knowing failure to exercise due care in a construction zone or a school safety zone.

There were 12 fatal crashes in construction zones and three deaths in school safety zones last year. The crime would be punishable as a Class D felony.

“We have had several tragic deaths recently in these zones where drivers know they are supposed to be taking extraordinary care,” said Senator Crowe. “This bill allows district attorneys to look at these crimes and bring charges under Tennessee’s vehicular homicide law when the inattention is so reckless that it results in a death in one of these two safety zones.”

In other Senate Judiciary Committee action, State Senator Tim Burchett (R-Knoxville) won passage of Senate Bill 3169 to add juvenile sex offenders to Tennessee’s DNA database after they are adjudicated. The DNA database is the 21st century’s answer to the old fingerprinting method. In 2007, the General Assembly passed the Johnia Berry law, sponsored by Lt. Governor Ron Ramsey (R-Blountville) to widen Tennessee’s DNA database to solve crimes. This bill adds adjudicated juvenile sex offenders to the list of those who must submit DNA samples under that law.

State Senators approve Uniform Interstate Family Support Act

The State Senate voted and sent to the governor legislation that will allow Tennessee to participate in the International Recovery of Child Support and Other Forms of Family Maintenance.

With increasing frequency, U. S. and Tennessee citizens who live, work or are deployed in foreign countries begin families while they are in other countries and become subject to foreign country support orders. When either parent or the children come to Tennessee or the U. S. and need support or need to establish paternity, current law is limited.

“As more parents cross state borders it is difficult to enforce child support orders,” said Senator Mike Faulk (R-Church Hill) sponsor of the bill. As they cross international borders it is almost impossible to enforce these orders. This legislation contains procedures for processing child support orders across both state and international borders that are uniform, simple, efficient, and accessible. Many of these provisions were taken from the experience within the U. S. from enforcing child support orders across state lines.”

The Uniform Interstate Family Support Act (“UIFSA”) was drafted in 1992. Over the years, while the United States was developing its own method of uniform enforcement of child support, the rest of the world was participating in various forums, including the Hague Convention, an international event, to reach a similar end. In 2003, the United States joined the Hague Convention to engage in discussions of worldwide child support uniformity.

UIFSA was most recently modified in 2008 during the Hague Convention; however, these amendments have not yet been implemented. They are expected to become law in the near future after it is approved by the Senate and signed by the President. When implemented, Tennessee will be ready to participate under the legislation approved.

In Brief

DUI / Interlock devices – The full Senate has approved legislation that would increase the use of ignition interlock devices to curb the number of alcohol-related car crashes in Tennessee. Senate Bill 2965, sponsored by Senator Mae Beavers (R-Mt. Juliet), requires the use of the devices if the offender has a blood or breath alcohol concentration of .15 percent or higher; is accompanied by a person under 18 years of age; or, violates the present implied consent laws. It also provides that those convicted of drunk driving under .15 with the option to install an interlock device instead of being geographically restricted by the court. Interlock devices are small pieces of equipment attached to the steering wheel of a car with a tube that the driver must breathe into in order to allow the ignition to start. Studies show the devices have been very successful in curbing drunk driving.

Abortion / federal healthcare law — The State Senate has passed and sent to the governor legislation sponsored by Senator Diane Black (R-Gallatin) to prohibit taxpayer-funded coverage for abortion services in Tennessee associated with the federal healthcare law passed by Congress. The bill, Senate Bill 2686, prohibits any health care plan established pursuant to federal health care reform legislation enacted by the 111th United States Congress from offering coverage for abortion services.

Elected Attorney General — The Senate voted 19 to 14 this week in favor of a resolution sponsored by Senator Mae Beavers (R-Mt. Juliet), calling for an elected State Attorney General (AG). The resolution, Senate Joint Resolution 698, seeks to amend the state’s Constitution to allow a popular election every four years. Tennessee is the only state in the nation that allows the State Supreme Court to select the attorney general. The amendment resolution must be approved by both the 106th General Assembly, currently in session, and the 107th, which will take office in 2011, before going to voters in a statewide referendum in November 2014.

Employer options for payment of wages — Tennessee employers would have the right to issue payment of wages through either an electronic automated fund transfer or a prepaid debit card under legislation approved by the State Senate on Monday. The bill, Senate Bill 2633, sponsored by Senator Jack Johnson (R-Franklin), gives employers the right to choose to use these payment methods as an alternative. The move is expected to save employers, who choose to utilize fund transfer, an estimated 75 percent from the costs of issuing payment by check. Under the bill, employees would not be charged for the debit card withdrawal if they choose to access an in-network ATM machine to receive the payment.

Veterans / fundraising — A resolution seeking to amend Tennessee’s Constitution to allow tax exempt veterans groups to raise funds in the same manner as 501 (c)(3) charitable organizations was sent to a Summer Study Committee for further review and to refine the language of the proposal. Veterans groups were left out of the Constitutional Amendment approved by voters in 2002, due to the way their organizations are generally structured as 501 (c) (19) or 501 (c) (4) organizations under the Internal Revenue Code. The Committee will look at making the language as precise as possible to allow charitable fundraisers by veterans, without unintentionally opening a door to any unscrupulous gaming activities. The resolution, SJR 982 is sponsored by Lt. Governor Ron Ramsey (R-Blountville), and Senators Rusty Crowe (R-Johnson City), Bill Ketron (R-Murfreesboro) and Jim Tracy (R-Shelbyville).

Highways / federal funds — Legislation that calls for Tennessee to keep its own road money rather than participate in the Federal-Aid Highway Program was approved by the Senate Finance Committee. The bill, Senate Bill 3678, sponsored by Senator Tim Burchett (R-Knoxville), provides for Tennessee to opt out of the federal program subject to enabling action by Congress. The state could then elect to retain the state’s contributions to the federal Highway Trust Fund for transportation purposes. Tennessee is a donor state as far as the Federal-Aid Highway Program is concerned. In the 2008-2009, Tennessee remitted $740.6 million in taxes collected from fuel, batteries and diesel to the federal highway trust fun and received $673.4 million in allocations. Under the proposal, taxes retained by the state would be directed to the State Highway Fund instead.

Civics in High Schools — State Senators voted this week to urge the teaching of civics classes in high schools in Tennessee. The measure, Senate Bill 3432, sponsored by Senator Jim Tracy (R-Shelbyville), prescribes the goals of the class to include information regarding the three branches of government, the fundamental documents, an understanding of how laws are enacted, and ways that citizens can shape and influence their government.

False Allegations / Sexual Abuse — The full Senate has approved a bill that allows the court to hold in contempt any person who makes false allegations of sexual abuse in furtherance of litigation. The bill specifies that the court may hold the violator in “contempt” and could order them to pay all litigation expenses and court costs. The measure, Senate Bill 1264, is sponsored by Senator Dewayne Bunch (R-Cleveland).

Meth labs – The State Senate voted this week to approve legislation designed to protect the public from being harmed by the ill effects of entering a house or building that has been used as a meth lab. The bill makes it a Class B misdemeanor offense to knowingly inhabit a property quarantined by law enforcement due to the manufacture of methamphetamine within the structure, unless that person is part of the official police investigation. The bill, Senate Bill 2969, is sponsored by Senator Diane Black (R-Gallatin).

Foreign defamation / Libel Tourism — State Senator Bill Ketron (R-Murfreesboro) guided passage of Senate Bill 3589 through the State Senate this week. The bill would help in the fight against a tactic known as “Libel Tourism” which results from defamation lawsuits filed against authors critical of individuals with known ties to terrorist organizations like al Qaeda and Hamas. The legislation ensures that Tennessee Courts have the ability not to recognize a foreign judgment, if that country’s laws protecting free speech and the free press are not as protective as freedoms provided in the constitutions of Tennessee and United States. The measure relates to grounds for non-recognition of foreign defamation judgments, closely resembling similar laws passed by the New York, New Jersey, Illinois, California, Utah and Florida Legislatures on the matter.

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