Senator Mark Norris
9A Legislative Plaza,
Nashville, Tennessee 37243-0232
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©2017 Mark Norris
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).