Adams and Reese Legislative Update 7-1-2020

The 111th Tennessee General Assembly adjourned sine die just after 3 a.m. on June 19th with
agreements on the budget, but the two chambers failed to come to terms on major legislative initiatives
such as COVID-19 protection for businesses, certificate of need legislation, and telemedicine. This
month’s adjournment lacked much of the pomp and circumstance typically associated with sine die,
perhaps a fitting end to a session that began with a new Governor and a considerable amount of new
members, and would ultimately experience two different House Speakers, a tornado, a pandemic, three
separate budgets in two years, and an uncharacteristic level of sparring between the two chambers
regarding both the scope of legislation to be deliberated and — in several cases — the content of that
legislation. Lawmakers also grappled with an unprecedented budget situation and frequent protests.

Gone was much of Governor Bill Lee’s once-ambitious legislative agenda, voluntarily shelved by the
Governor in the interest of focusing on managing a budget situation that was greatly affected by the
pandemic. In the end, legislators passed a $39.5 billion budget that barely resembled the one that the
Governor proposed to the General Assembly during his State of the State Address in early February.
Both the budget and the legislative process were greatly impacted by COVID-19, especially since the
Legislature recessed from March 18 to June 1 to stay at home for the pandemic.

Taken as a whole, the final budget largely addresses a $500 billion shortfall in the current year budget
and a $1 billion deficit in the budget that begins on July. Highlights include a $25 million sales tax
holiday, $210.5 million for cities and counties (including raising the cap on the amount allocated to
Memphis and Nashville to $10 million each), and $100 million to the rainy day fund. The budget
eliminates the pay raises for teachers, state employees, and higher education that had been previously
promised. Originally, the fund for cities and counties was set at $100 million and reserved for a one-time
expense relative to capital maintenance, utility upgrades, public safety projects, or road projects.
However, given the pandemic and storms that hit the state, cities and counties will be given flexibility on
the use of the funds. The final budget managed to preserve most of Governor Lee’s reductions, and
critical items emerged unscathed, including commitments to fully fund the Basic Education Program
(BEP), Pensions & Health Insurance, debt service requirements.

This month, the General Assembly passed legislation (SB2667/HB2842) to allow the Tennessee Trucking
Association Foundation to hold its annual raffle in December which benefits numerous charities and
educational programs. Additionally, the General Assembly passed the Tennessee Trucking Association’s
bill (SB1608/HB1594) dealing the drop deck length distance from the king pin to rear of the trailer, a
measure that expands, from 50 to 52 feet from the point of attachment to the tractor, the length a
truck-tractor and semitrailer or trailer combination that may operate over the federal and state highway
system in Tennessee.

Now that the General Assembly’s flag has been lowered from the Capitol cupola, thus
signaling adjournment, legislators’ attention turns toward re-election — with all House seats and half of
the Senate seats on the slate for the August primaries and November general election. Lawmakers will
now return to their districts, begin fundraising – something they are prohibited from doing while
legislature is in session — and immediately prepare for the August 6 primaries, with only one month
remaining until early voting begins.

On behalf of the Tennessee Government Relations Team at Adams and Reese, it is an honor and a
privilege to serve you before the Tennessee General Assembly, and we wish you and yours good health
and a relaxing summer. As always, please do not hesitate to contact us if we can further serve you in
any way.