Tennessee General Assembly Kicks off 2024 Session

The 113th Tennessee General Assembly kicked off the 2024 legislative session earlier this month in Nashville, beginning the final year of a two-year legislative session. With the drama of the final weeks of the 2023 session and the 2023 Special Session on the minds of many, the House’s rules of conduct – typically ignored by most legislative observers — are squarely in the spotlight as session begins. Then there is the state’s budget outlook, as Tennessee finds itself in the unfamiliar position of having budget revenues that are actually falling short of projections – a far cry from recent years. And since 2024 is an election year where half of the Senate and all of the House seats will be on the ballot in the August primaries and November general, the speculation of which incumbents will/won’t run for reelection is already taking place, as is the inevitable jockeying that always follows. With the prospect of many incumbents having a primary opponent to grapple with this summer, look for the legislature to complete its business in a workmanlike manner so members can return to their districts and begin the process of fundraising and campaigning.

House Rule Package Features a Handful of Changes

In the wake of the August Special Session, where new rules were enacted that banned members of the public from carrying signs into House committee meetings and galleries, the House Rules Committee meeting attracted an unusual level of attention. While there were only a handful of changes – including a lifting of the rule prohibiting the public from carrying signs -one of the most notable concerned punishments for lawmakers who disrupted another member. The new rule provides that if a lawmaker is found to be out of order, the initial penalization is that they cannot speak on that topic for the rest of the day. If they are ruled out of order for a second time, they will only be permitted 2 minutes to speak instead of the original 5 minutes. If the member is out of order for a third time, this will result in the member losing the privilege to speak on the floor for two legislative days.

Finance & Administration Commissioner Updates Legislators on Budget Outlook

After years of surplus revenues, the state is likely due for some belt-tightening amid a string of underperforming months. Revenues for the first four months of the fiscal year have all fallen under budgeted estimates. However, revenues remain higher than pre-pandemic levels, and the state is in a strong position. Tennessee Department of Finance and Administration Commissioner Jim Bryson recently spoke before the Senate Finance Committee and urged lawmakers to remain calm. “We are prepared to weather the speed bumps ahead,” he said. Lawmakers may rein in some one-time expenditures, but the state reserves remain significant. Governor Bill Lee will unveil his proposed budget during his State of the State Address, which is scheduled for next Monday, February 5.

Return of Gun Safety Proposals

Once again, gun safety proposals are expected to be a hot topic of debate this session, as Nashville is still coping with the tragedy that took place at the Covenant School in late March. Protesters converged on the Capitol in the weeks following the shooting, demanding stronger gun control laws. Protestors again came to the Capitol in droves during the August special session, which saw little action on gun safety. With many of the gun law proposals having been deferred to the current session, tensions are once again expected to be high. Governor Lee floated an extreme risk proposal in the closing weeks of the 2023 session, but it was met with tepid support. He has announced that he does not intend to resurrect that proposal for this session.

School Choice Expansion Will Once Again Be a High-Profile Issue

Look for education to once again be a front-burner issue this session, as Governor Lee has announced his intention to expand his Education Savings Accounts (“ESA”) program. While a formal piece of legislation has not yet been released, as proposed, the Education Freedom Scholarship Act would offer 20,000 students an estimated $7,075 to attend a private school or pay for other approved educational expenses. The current ESA program, which officially got up and running in the 2022-23 school year, accepts students from low income households that are zoned to attend schools in Metro-Nashville Public Schools, Memphis-Shelby County Schools, Hamilton County Schools and the state’s Achievement School District. Roughly 2,400 students are currently enrolled in the ESA program. Supporters of the Governor’s expansion proposal say that the ESA program provides students with more quality education options, while critics argue that funding education savings accounts takes money away from public schools, resulting in depleted resources and continued underfunding and neglect.

Tennessee Franchise Tax Could Be at Legal Risk

Earlier this month, Department of Revenue Commission David Gerregano presented to the House Finance Committee and detailed the Governor’s plan to overhaul the state’s franchise tax. The Lee administration is recommending the state make $1.2 billion in refunds to companies over a period of four years and then cut $400 million annually thereafter in the franchise tax. Legislation is being proposed that would authorize the Department of Revenue to issue refunds to companies that have paid franchise taxes based on their property value. Getting straight to the point, Gerregano testified that “the reason for bringing the franchise tax bill is precipitated in response to the significant legal risk from a potential litigation challenge…Our department and tax experts at the Attorney General’s Office have identified a significant legal risk in the way the franchise tax is currently structured, which could be extremely costly to Tennessee taxpayers. To allay those risks, we’ve advised the administration to consider changes to the franchise tax.”

The legal risk that has precipitated the change stems from a United States Supreme Court opinion concerning the state of Maryland, and the dormant Commerce Clause, which prevents states from passing legislation that places excessive burdens on interstate commerce. The Supreme Court opinion led several Tennessee businesses to make the same argument about Tennessee’s franchise tax, thus forcing Tennessee to address the issue. When asked about a legal basis for a change in the state’s franchise tax, Governor Bill Lee told reporters, “we know that there is a risk because what the law has been [is] deemed by the tax experts as needing a change. There’s no lawsuit at this point. Going forward….I can’t speak to whether or not there would be or if there is a legal risk.”

Commissioner Gerregano also outlined plans to provide refunds to companies that are deemed to have overpaid, upon application by the companies.  While the concept met resistance from at least one lawmaker that preferred taxpayers be given a tax credit looking forward, it appears that the state will proceed with the rebate plan.

The bill filing deadline in the House is January 31 and February 1 for the Senate. As of today, there have been over 500 bills filed for the legislative session. As a reminder, Governor Lee’s State of the State Address will be next Monday, February 5 at 6 p.m. CST.

As 2023 came to a close, we are looking forward to a very active 2024 legislative session. We had an unusual 2023 legislative session with much attention at times dealing with the fallout from protests at the Capitol, battles between the legislature and the City of Nashville on oversight of the airport and Sports Authority, attempts to downsize the Metro Council, expulsions of legislators, and the horrific Covenant School shooting which resulted in a special session at the legislature in August. 

TTA was very active in 2023 with Truck PAC making over $100,000 in contributions to legislators who have supported the industry. This wouldn’t have been possible without your support. On December 13, 2023, TTA hosted a joint fundraising dinner for Senate Commerce Committee Chairman Paul Bailey and Speaker Pro Tem Pat Marsh, with many of the members of the TTA Executive Committee attending. Much thanks always to Senator Bailey, Representative Pat Marsh and other members of the legislature who have businesses associated with the industry. Only with their involvement and the staff of TTA are we able to promote the interests of TTA in the legislature. 

Also, we are still very active in regard to addressing the illegal booting and towing issues in Memphis. On a short term basis, the license of A1 Towing has been suspended and, at our request, an investigation into the towing activity has been opened by the Tennessee Attorney General’s office. On a long term basis, we are working on legislation with key legislators to prohibit this type of activity in the future. TTA will also have other issues to address once the legislature returns to session in January 2024.  

Illegal Towing and Booting in Memphis

 

Over the past several weeks, TTA has been engaged with local and state officials addressing a predatory towing issue in Memphis. A1 Towing and Hauling in Memphis has been accused of illegally towing and booting tractor trailers in violation of multiple state and local laws as related to fees, aggressive activity, notice, impersonating law enforcement and other inappropriate activity. Numerous complaints have been filed by trucking companies from all across the country. Several TTA members have been victims. In addition, Several A1 employees have been arrested although some charges have been dropped. To make matters worse the local courts have been slow to address the issue.

We have been working with Mayor Strickland’s office in Memphis and have had several calls with the Memphis legal director and staff members for the Memphis Transportation Commission.

Memphis has taken action to revoke the company’s permit that should occur in the near future. A 1 has had its permits revoked in other areas of the state and country. The Tennessee Towing Association has been supportive of our efforts and are outraged by A 1’s activity. Complaints have been filed with the Tennessee Attorney General, and an investigation has been initiated. A meeting will be held soon with the Attorney General’s office. In addition, it is expected that major carriers in Tennessee will be filing a lawsuit against A 1.

Senator Paul Bailey and Representative Pat Marsh are supportive of our efforts. Unfortunately, nothing from a legislative standpoint can be done in the near future until the legislature returns in January. At issue is a “ booting law” which was enacted earlier this year that was intended to add consumer protections to prevent this very type of activity. We are confident that A 1 is violating the new law, Public Chapter 220. We will be pursuing legislation in 2024 to make it clear that A 1 is subject to the consumer protections provided under the law, that local laws are not preempted, and storage fees are limited.

If your company has been affected by this activity in Memphis, please let TTA know.

We received word on November 29th that the City of Memphis has suspended the permit of A 1 for 30 days.

Tennessee Government Relations Special Update – August 31, 2023

 

Tennessee Legislature Wraps Up Special Session: Friction Between House and Senate, Intense Floor Sessions, and Controversial House Rules

The Tennessee General Assembly concluded its special session on public safety this week, adjourning sine die eight days after the legislature first convened on Monday, August 21. The special session had been in the works since April, when the legislature opted to wrap up the 2023 regular session in an expedited fashion, declining to deliberate some of the safety measures that Governor Bill Lee was advocating in the wake of the tragic shooting at Nashville’s Covenant School in March. As was the case in April, large crowds of demonstrators filled the Capitol and legislative office building, calling for stronger gun laws and other public safety measures. And also like April, many of the ensuing headlines dealt more with ancillary issues than legislation – such as friction between House Democrats and House GOP leadership, and treatment of spectators and demonstrators in the House galleries and committee rooms – but this session was also marked by a very public disagreement between House and Senate leadership as to the number and scope of bills that the legislature should deliberate.  

Differing Approaches Between House and Senate Result in Friction Between Chambers

Most of the major headlines this week concerned the public friction between the House and Senate, with the two chambers having very different views on the amount of legislation that should be considered and passed during the special session. Despite having full legislative calendars, the Senate considered just a handful of bills, often adjourning committee hearings and floor sessions after just minutes. The House took a different approach, holding lengthy committee hearings and floor sessions where they deliberated dozens of bills on multiple topics. With such varying approaches, it became obvious last week that the two chambers were approaching an impasse and it was unclear whether a compromise was in the works. The standoff then came into full view last Thursday when, rather than coming to an agreement as to what additional bills would be considered and passed, the two legislative bodies dug in on their respective positions and adjourned for the weekend.  

Unfortunately, the time away from Nashville did little to thaw relations between the two chambers. Senate GOP leadership made it clear on Monday that they were not going to budge on their position that they had passed the key initiatives that were at the core of the special session, and that while several of the additional bills being pushed in the House had merit, a more deliberate process needed to be followed.  With rumors circulating that the stalemate could cause session to extend for several more weeks, the end came quickly as both chambers adjourned sine die around midday on Tuesday.  For the Senate’s part, Senate Majority Leader Jack Johnson (R-Franklin) told Nashville’s WTVF-5, “our position is we’ve completed our business.  There are some other bills that have been filed, some of them very good pieces of legislation.  But we just don’t believe we’ve got the time in a truncated special session to give them thorough consideration.  So let’s wait until January and take those up.” 

The Senate approach drew the ire of many of those who converged on the Capitol advocating for stronger gun laws and public safety measures, many of whom made those views very clear from the gallery of the Senate chamber when the Senate adjourned this week.  The stalemate also left many House members questioning the actual impact of the special session.  House Majority Leader William Lamberth (R-Portland) said he was “very disappointed that we didn’t get more done in this special session. In the House, we had a lot of bills that got left on the table that I hope will still be taken back up in January to help families in Tennessee be safer.”

In response, Senate Republican leaders noted the importance of being deliberate with such important issues as well as following Governor Lee’s lead and sticking to the issues that were part of the Governor’s package of bills.  When asked in an interview with WTVF what he would tell the what he would tell the mothers of schoolchildren that filled the galleries and hallways the last two weeks, Leader Johnson said, “I say we hear you, we hear you. And as I said, there are some really good bills that are among those that have been filed in the House, but what I would say to those families is: we want to get it done right, not get it done fast.”

House Rules Draw Controversy, Litigation

Controversy in the House started right out of the gate, as lawmakers on the first day of the special session spent almost two hours in heated debate over new House rules adopted for the session. A rule to prevent members of the public from holding signs while in the House gallery and committee rooms garnered massive public attention, drawing strong criticism from House Democrats and media outlets as well as subsequently leading to a lawsuit by the ACLU of Tennessee. The ACLU brought its action on behalf of three attendees that were removed from a House committee room for holding up signs, arguing that the rule operated as a violation on the public’s First Amendment rights.  In response, Davidson County Chancellor Anne Martin promptly issued a temporary restraining order blocking the House rule, thus allowing signs for the time being, and scheduled an emergency hearing for Monday where she heard competing arguments from the ACLU in opposition to the House rule and the Tennessee Attorney General’s office, which supported the measure. The ACLU argued that the rule operated as an unreasonable suppression of the public’s right of free speech, while also noting the dynamic that under the new rules, the public could bring a gun into a legislative hearing, but not a picture of a gun. The Attorney General argued that the Court had overstepped its authority in temporarily blocking the rule, noting that other states have similar rules barring signs in state capitol buildings, as does the U.S. Supreme Court, and that signs can be a disruption. After considering the arguments, Chancellor Martin ordered that the House rule was to remain blocked, expressing the opinion that the Plaintiffs had demonstrated a likelihood of success on the merits of their claim that the rule violated the First Amendment. The temporary restraining order put in place blocking the rule was converted to a temporary injunction which will remain until further order of the Court.

Tensions Remain High In House Floor Sessions

The tensions between House members that were often witnessed during the 2023 regular session once again reappeared in the special session. Starting with the controversy over the rules, tempers ran high between members of the two parties, and floor sessions often contained heated debates and arguments, both over the bills as well as members’ conduct.  On Monday, Rep. Justin Jones (D-Nashville) was twice ruled out of order by Speaker Cameron Sexton (R-Crossville), leading to a 70-20 vote to silence Jones for the rest of the day under the new House rules. Democrats walked out of the chamber en masse as a result. Then on Tuesday there was a confrontation between Speaker Sexton and Rep. Justin Pearson (D-Memphis) just moments after Sexton gaveled the session to a close. Pearson had attempted to confront Sexton near the dais with a handmade sign as Sexton tried to exit the chamber, and some jostling and shouting ensued between the two. Pearson was quoted as shouting, “we came here and did absolutely nothing to protect kids.”  Meanwhile, House Republican leadership criticized the Democratic caucus for the breaches in decorum. House Majority Leader William Lamberth (R-Portland) characterized the events as “a couple of bad apples trying to spoil the bunch,” while Speaker Sexton said, “it’s unfortunate that it keeps getting there, but it is what it is. I mean, y’all can judge for yourself.”

Pearson and Jones drew national attention in April when the two were expelled from the House on a party line vote for a demonstration on the House floor, but both were quickly reinstated to their House seats by local governmental bodies.   

Lawmakers Pass Four Bills Aimed at Public Safety

The House and the Senate ultimately passed only four bills during the special session – three bills aimed at promoting public safety and one appropriations bill. HB7012/SB7085 authorizes the Department of Safety to provide free firearm locks to Tennessee residents upon request, and requires all state-approved handgun safety courses to contain instruction on safe storage of firearms. The bill also permanently exempts the sales and use taxes on firearm safes and firearm safety devices beginning November 1, 2023. HB7013/SB7086 requires court clerks to update records in the state’s background check database within 72 hours and requires case dispositions and expungements be reported to the Tennessee Bureau of Investigation (TBI) electronically. This bill codifies the Governor’s executive order made earlier this year that reduced the timeframe from 30 days to 72 hours. HB7041/SB7088 directs the TBI to submit an annual report on child and human trafficking crimes and trends in Tennessee. The TBI is currently required to track this data, but the new law requires the agency to assemble this information all in one place. The fourth and final bill, HB7070/SB7089, appropriates more than $110 million in public safety funding including $30 million in school safety grants to public and private higher education institutions, $10 million additional funding for school safety grants, $50 million to mental health agencies,  as well as $15.1 million for mental health professionals, the behavioral health scholarship program and mental health safety net.

Despite the small number of bills passed, Governor Bill Lee maintains that the special session was a success, stating, “Significant funding was focused on issues that matter to public safety. We improved the background check system, attacked human trafficking, made more access for safe storage [and] funded mental health resources across the state. We made progress.”

Looking Ahead

The second half of the 113th General Assembly will reconvene on Tuesday, January 9, 2024. As always, please let us know if you have any questions or if we can be helpful with anything during the off-season. Have a great Labor Day weekend.

The legislature is expected to return for a special session in Nashville on August 28, 2023 to address gun safety and security issues that arose out of the Covenant School shooting tragedy that occurred in March 2023. Governor Lee has been a proponent of enacting legislation that will address issues that are specifically related to how to limit individuals who are facing mental health issues from possessing certain firearms. Many members of the legislature, including those from rural areas, are taking a less active position on addressing gun-related issues. There have been many groups that have become very active, especially in Middle Tennessee, including parents of the Covenant School. These groups are advocating for the legislature to address issues regarding individuals with mental health issues possessing firearms, tightening up laws related to individuals who have been involved in domestic violence episodes from possessing firearms, as well as addressing the major issue related to individuals failing to keep their firearms properly secured when left in vehicles. The Nashville police department and other groups have estimated that over 70% of the violent crimes committed with guns in Nashville involve guns that have been stolen from vehicles. 

As a result of the upcoming special session, there has been very little fundraising activity this summer. TTA through its Truck PAC has been active in a few events and will continue to remain active throughout the year. The Tennessee Journal noted that TTA was active in assisting Senator Ferrell Haile recently, as well as Tim Hill, who is a former state Representative from East Tennessee. Tim Hill was reappointed to serve out the remaining term of Representative Scotty Campbell and recently won a special election. Tim was the former Chairman of the House Commerce Committee and decided not to run for re-election when he ran for Congress a few years ago. 

There is a recent article that was published and written by Adam Friedman for the Tennessee Lookout related to political spending in Tennessee since 2009. A link to the information is: https://tennesseelookout.com/2023/07/24/cash-for-clout-tennessees-million-dollar-club/. The information is related to different trade associations, firms, companies, etc., who have not only spent PAC contributions but also on employing lobbyists since 2009. For what it is worth, TTA comes in at No. 98 out of the top 100, which is about where I expected TTA to be. Please remember, over the past 6 or 7 years TTA has increased its Truck PAC fundraising and contributions significantly, so the above article is somewhat skewed in regards to TTA. Note that many of the other companies employ several lobbyists at times, where TTA over the past 30 plus years has employed one lobbyist. This information is interesting and I just wanted to provide this to you so you can see that it is a big business at the legislature when it comes to hiring lobbyists and making PAC contributions. Since TTA has spent an estimated $1.5 million since 2009, it is important more than ever to support TTA and its legislative activities, especially by contributing to Truck PAC.

I hope you have a wonderful summer and we look forward to seeing you at the convention in San Destin, Florida.  

Laws Taking Effect July 1, 2023

On July 1, a slate of new laws will go into effect in Tennessee. Legislation with specific importance to the industry include two bills highlighted below.

Public Chapter 39 (SB210/HB180). This legislation, sponsored by TTA, will add an additional 2,000 lb. variance on tractor trailers that are operated by electric motors and powered by electric batteries.  This is currently allowed on all federal highways but needs to be extended to state highways.  This is the exact variance currently allowed for tractor trailers that are operated by natural gas.

Public Chapter 229 (SB1337/HB87). This legislation was sponsored by TTA, working in conjunction with other groups, in an effort to tighten up additional notice provisions for the towing of vehicles on private property to line up with the requirements for public property tows. 

Revising the state towing statute is an ongoing process. The statutes are extremely antiquated and were first enacted as far back as 1938. In the near future, we suspect some type of overall modernization of these towing statutes will be seriously considered. Please note, one section of the legislation takes effect July 1, 2023. All other remaining sections went into effect upon becoming law, April 25, 2023.

On Friday, April 21, 2023, the Tennessee General Assembly adjourned its 2023 session, thus concluding one of the more tumultuous sessions in modern history. Legislative highlights included passage of a $3.3 billion infrastructure package that will include the addition of “choice lanes” on Tennessee interstates, and passage of a $56.2 billion budget that includes a three-month sales tax holiday for groceries, as well significant raises for teachers. History will remember the session as being marred by the tragic shooting at The Covenant School in Nashville, resulting in the deaths of three school children and three adults. The tragedy has gripped Nashville ever since, with ripple effects that placed Tennessee at the front of national headlines and could impact Tennessee politics for years to come.

The session had been relatively workmanlike leading up into the March 27 shooting, as Governor Bill Lee was close to passing his infrastructure package, non-finance committees were winding down in advance of the administration’s budget amendment being released in early April, and leadership was targeting a May 1 adjournment. The Covenant tragedy immediately stoked calls for greater gun control with thousands of protesters descending upon the Capitol on March 30, calling for greater school safety and gun control measures. The Lee administration and legislative leadership immediately swung into action with an enhanced school safety bill, which passed both chambers overwhelmingly. However, for much of the remainder of session, the protestors packed the House galleries and Capitol common areas on a daily basis demanding that more action be taken to address gun violence.  

As emotions intensified, eventually Reps. Justin Jones (D-Nashville), Justin Pearson (D-Memphis), and Gloria Johnson (D-Knoxville) were initially stripped of their committee assignments and allegedly had their access to the legislative building and parking facility cut off over the weekend after March 30, 2023. On Monday, House Republicans filed articles of expulsion, seeking to remove the three from the General Assembly.

The House held expulsion hearings on Thursday, April 6.  At the conclusion of a House session that lasted roughly 3 hours, they eventually expelled Reps. Jones and Pearson but not Rep. Johnson.  Reps. Jones and Pearson were reinstated by their local government bodies to fill the remainder of their own terms and both will run in special elections in the near future, which they are expected to win handily.

During the last couple of days of the legislature, it was revealed by Channel 5 News that on March 30, 2023, Rep. Scotty Campbell (R-Mountain City) was found guilty by the House Workplace Discrimination and Harassment Subcommittee of violating the House’s workplace discrimination and harassment policy. According to the news reports, it was alleged that Campbell sexually harassed two college students that were serving as legislative interns. Rep.  Campbell initially denied the accounts; however, by the time the House returned for the afternoon floor session on the same day, a report was released on Rep. Campbell had resigned and his desk was cleaned out. Rep. Campbell had been serving as Vice Chair of the House Republican Caucus.

TTA had several significant pieces of legislation that was pursued this legislative session.  Fortunately, we began pushing our legislation very early in the session and did not get caught up in the activity of the last 30 days of the legislative session.  In addition to the Governor’s $3.3 billion infrastructure plan, TTA was also successful in the following:

  1. EV Bill (SB210/HB180).  Passage of the EV Bill allows a 2,000 lb. variance for EV powered tractor-trailers.
  1. Towing Revisions (SB1337/HB87).  This provided another revision of the towing statute which tightened up the notice and lien provisions in Tennessee.  A major part of the legislation was to amend the towing statutes to make sure that the notice provisions regarding the towing of vehicles, as well as the towing and selling of vehicles, are the same for private tows as public tows.  Also, other revisions were made to accommodate faster forms of notification.
  1. HAZMAT-CDL (SB79/HB142).  This bill basically allows for a HAZMAT designation to be included on a CDL license. 
  1. A successful TTA Day on the Hill and legislative reception on April 5, 2023 at the offices of Adams and Reese.

While 2023 is not an election year in Tennessee, the events that occurred the last few weeks could lead to a busy off season for the legislature.  The Governor announced two hours after the legislature adjourned that he will be calling the legislature back in a special session to address gun violence issues in Tennessee.  Of course, the official end of the season also signals a kick off of the legislative fund-raising season.  2023 is the first year of a two-year General Assembly and any bill that remains this year could technically remain for the 2024 legislative session.  Along those lines, you are encouraged to look at the final comprehensive bill tracking report for the year and note the current progress of bills of interest.

On behalf of the Tennessee Government Relations Team at Adams and Reese, it has been a privilege to represent you in Tennessee this legislative session.  We look forward to working with you in the off season to further advance your interests and prepare for the 2024 legislative session.

The Tennessee legislature is entering its final few days of this session and several major committees have either shut down or on their final calendars.  Over the past few days, the following actions have taken place:

 

1.       $3 Billion Infrastructure Plan. On March 30, 2023 the Senate and House passed the $3 Billion Infrastructure Plan.  Highlights of the plan include fees on electric vehicles to offset the foregone fuel tax revenue, as well as the establishment of public-private partnerships to construct “choice lanes.” Choice lanes allow drivers to proceed in certain lanes on the interstate for a fee, such as is commonly seen in states such as Georgia and Florida. While some critics call the lanes “toll roads,” which is something Tennessee has never pursued, proponents argue that it simply gives motorists a choice of traveling a less congested express lane for a fee, while the remaining lanes remain free as they always have.

 

2.       Three-Year License Plate.  The House passed HB675 with a unanimous floor vote.  This will allow rental car companies who currently have two-year license plates to obtain three-year license plates.  This has been done as a result of vehicles remaining in fleets for a longer period of time because of the pandemic and supply chain issues. 

 

3.       Towing Statutes.  On March 30, 2023 the House and Senate passed HB87/SB1337 which is this year’s revisions to the towing statutes in Tennessee.  The towing statutes in Tennessee are antiquated as they were first enacted in 1938.  This legislation was drafted with input from rental car companies, insurance companies and the Towing Association.  Among other things, this legislation will streamline notification by allowing towing companies to send notifications by overnight mail such as UPS and FedEx.  It clarifies that rental companies include motor vehicle rental companies and requires that notifications under public tows are applicable to private tows, which requires use of the TIES system to identify and notify owners of vehicles.  There are other changes that are enacted in an attempt to modernize the statute, as well.

 

Please remember the TTA Day on the Hill is April 5, 2023 and we hope to see you there.  Also, TTA will host its popular reception with bourbon and cigars at 4:30 pm that same day at Adams and Reese, 1600 West End Avenue, Suite 1400, Nashville Tennessee and we hope you will find time to attend that, as well. 

 

The legislature is in the middle of its busy 2023 session.  The firm’s weekly general legislative update is included below.  Of specific importance to the industry are updates on the following:

  1. SB210/HB180.  This is legislation sponsored by TTA that will add up to an additional 2,000 lb. variance on tractor trailers that are operated by electric motors and have electric batteries.  This is currently allowed on all federal highways but needs to be extended to state highways.  This is the exact variance allowed for tractor trailers that are being operated by natural gas.
  2. SB1337/HB87.  This is legislation sponsored by TTA working in conjunction with other groups to tighten up additional notice provisions for the towing of vehicles on private property to get in line with the requirements for public property tows.  Revising the state towing statute is an ongoing process.  The statutes were first enacted as far back as 1938 and in the near future, we suspect some type of overall modernization of these towing statutes will be seriously considered. 

Please note that on April 5, 2023, TTA will host its popular annual legislative reception at Adams and Reese LLP, 1600 West End Avenue, Suite 1400, Nashville, Tennessee 37203.  This is always a great event and provides an excellent opportunity to spend time with our state legislators and staff.

Tennessee Government Relations Weekly Report

The legislature has quickly shifted into full gear, with committee hearings consisting of both budget presentations and a healthy number of bills, including the amendments that are typical this time of year. The session will be running at a frantic pace the next several weeks.   

Legislators Set Focus on Revisions to Third-Grade Retention Law

A flurry of bills aimed at modifying Tennessee’s third-grade retention law will soon be the topic of discussion for lawmakers as they decide the law’s future. Lawmakers may consider as many as nine bills targeting the state law, some of which would eliminate it altogether while others would give the main decision-making authority back to the local school system. The law, enacted in 2021 as part of Governor Lee’s comprehensive education reform, seeks to tackle literacy concerns while children are still very young. Provisions in the law grant state-funded summer and after-school programs to students who aren’t deemed proficient readers on state TCAP tests administered each spring. If a child is still not meeting state standards upon completion of the additional literacy programs, it may be decided that the child needs to retake their third-grade year. Right now, 64% of Tennessee third-graders are not reading at grade level. Even with some of the law’s safety nets in place that allow for additional literacy tutoring or retesting, parents and education advocates express a potential for major overcrowding concerns. Sen. Majority Leader Jack Johnson (R-Franklin), the bill’s original sponsor, maintained his support for the retention law stating that the retention policy is in the best interests of all Tennesseans, but he is open to implementing a universal screener test, which he believes is a better indicator of a child’s reading proficiency than the TCAP.

 Bill to Cut Size of Nashville’s Metro Council Clears Senate Committee

A bill that would cut the size of Nashville’s Metro Council from 40 members to 20 advanced in the Senate this week. The bill would allow a metropolitan government to undergo a redistricting process to expand council districts prior to May 1; if that deadline is not met, then current members’ terms would be extended for one year. Proponents of the legislation have argued that the bill has statewide application, however, Senate sponsor Bo Watson (R-Hixson) told Senate State and Local Government Committee members that the bill only affects Davidson County. There are three metropolitan governments in the state, and Nashville is the only one with a council larger than 20 members. The bill –  largely seen as retaliation against Nashville’s Metro Council for blocking an effort for Nashville to host the 2024 Republican National Convention – passed out of committee on a 6-3 vote. Last week, Nashville Mayor John Cooper submitted letters to both RNC and DNC officials indicating Nashville will submit bids to host a 2028 national political convention. The Metro Council would still have the final say, as the Council would ultimately have to approve the site agreement.

Measure Aimed at Limiting Primary Elections Defeated in House Committee

A bill aimed at closing primary elections in Tennessee failed to make it out of the House Local Government Committee after it was defeated on a voice vote. HB405 sponsored by freshman Rep. Bryan Richey (R-Maryville) sought to limit local primary elections by allowing only those individuals who declare a political party in advance the ability to vote in a primary election, rather than allowing voters to select the party ballot of their choice on election day. Tennessee currently has an open primary system and does not require registration by party.

Cannabis-Related Bills Begin Journey Through Committee Process

The usual batch of cannabis bills is starting to make its way through the legislative process. While one met its demise before the Senate Judiciary Committee on Tuesday, two more are set to be considered next week. SB1072, sponsored by Sen. Jeff Yarbro (D-Nashville), sought to decriminalize the possession of small amounts of marijuana, potentially saving local governments up to $15 million a year on incarceration costs. It failed on a 2-7 vote. Two more bills will be up next week, this time with Republican sponsors. SB1104 would establish the “Tennessee Medical Cannabis Act,” allowing doctors to treat patients that have “qualifying medical conditions” with cannabis products containing a maximum 2,000 mg of THC. Another Republican-sponsored bill, SB378, would regulate the production and sale of hemp-derived cannabinoids – including delta-8 and delta-10 products – and would also make the sale of hemp-derived cannabinoids illegal for anyone under 21.

Looking Ahead

Legislative activity will continue to increase over the next few weeks as budget hearings begin to wrap up and committee calendars grow larger with more bills on notice for consideration. Along those lines, please review your bill tracking report, as bills are starting to move, and we are also adding bills where appropriate. As always, if you have any questions, please do not hesitate to let us know. Have a great weekend!

Tennessee Government Relations Weekly Report – February 17, 2023

 

Legislative activity continued to increase this week, with longer committee calendars that included decent amounts of legislation sprinkled amongst budget hearings. Look for the overall level of legislative activity to increase even more next week.   

Bills Targeting Nashville Continue to Gain Momentum

A bill aimed at repealing Nashville’s authority to impose extra sales taxes in a designated tourist zone to fund Nashville’s Music City Center is well on its way to a floor vote. Late Thursday, however, Republican legislative leadership signaled the possibility of slow-walking the legislation if Mayor John Cooper were to pursue hosting the 2028 Republican National Convention. Cooper has since indicated his willingness to engage in the dialogue with Republican leaders after weeks of increasing tension between Nashville Metro Council and the General Assembly’s Republican supermajority. The bill, if passed, raises some concerns about a similarly-funded proposal for a new $2.2 billion NFL stadium currently being considered by Metro Council, which will also rely upon state funding, including sales taxes.

Other bills aimed at overhauling Nashville’s governing bodies—the first, HB48, which cuts Metro Council’s 40 members down to 20, and the other two, HB1197 and HB1176, which create new sports and airport authority boards, continue to gain momentum as they make their way through the committee process.

House Subcommittee Advances Bill Providing Exception to Abortion Law

This week lawmakers in the House Population Subcommittee approved a bill that would legalize abortion in the case of a medical emergency. The bill, HB883, clarifies that termination of a pregnancy would not constitute a criminal abortion for the following reasons: medical emergencies, disposal of un-implanted fertilized eggs, removal of ectopic or molar pregnancies, medically futile pregnancies or lethal fetal anomalies. There is no explicit exception to the abortion ban under current law. The bill has broad bipartisan support and will next be heard in the House Health Committee.

Bill to Expand Private School Voucher Program Sails Through Senate

Governor Bill Lee’s Education Savings Account program — a voucher program that allows students to take public education funds and apply it to private school tuition — is on the verge of expanding. On Thursday, the Senate passed legislation, SB12/HB433, that adds Hamilton County to the voucher program.  Currently the program is only available in Davidson and Shelby Counties. The House bill is scheduled for the K-12 Subcommittee next Tuesday, February 21.

Looking Ahead

State offices will be closed next Monday in observance of President’s Day, but the remainder of the week will bring about a full slate of legislative activity. Expect more of your tracked bills to be put on notice as committee calendars continue to increase each week. As always, please don’t hesitate to reach out to us if you have any questions. Enjoy the holiday weekend.

Tennessee Legislative Report: Governor Highlights Roads, Tax Cuts, and Strengthening Families as Major Initiatives in State of the State Address

 

Governor Lee Delivers Fifth State of the State Address

Before a packed House chamber on Monday evening, Governor Bill Lee delivered his fifth State of the State address to a joint session of the Tennessee General Assembly. In a heartfelt moment of unity, Lee began by honoring First Lady Maria Lee, who is currently undergoing treatment for lymphoma and was unable to attend the evening’s event.

Embarking upon his second term as Tennessee’s 50th governor, Lee sought to highlight the many contrasts between Tennessee’s prosperity and the nation at large. His theme, “Leading the Nation,” was prominent throughout his one-hour speech and elicited a number of standing ovations. Citing the record number of families and companies opting to relocate to the Volunteer State, Lee credited his administration’s ongoing commitment to ensuring a high quality of life through investments in public education, workforce development, and safe schools.

Lee presented a $55.6 billion budget with a central theme of expanding economic prosperity for all Tennesseans. Following his past practice, Lee once again allocated a substantial portion to the state’s Rainy Day Fund – this time $250 million – which takes the fund to a record level and will amount to a new high of 9.1% of the state’s total budget. The remaining bulk of Lee’s proposed budget is directed at transportation, education, strengthening Tennessee’s families, and a robust conservation strategy. A 2023-24 fiscal year budget overview can be found here.

Transportation Takes Top Priority as Lee Advocates for Choice Lanes

As expected, the Governor’s address devoted considerable time to infrastructure, which has been a constant point of emphasis for the Governor in the last several months.  The Governor devoted more than a third of his proposed $9 billion budget in new allocations to what he calls the Transportation Modernization Act. The nearly $3.5 billion investment will aim to alleviate urban congestion through an overhaul of the roadway delivery system, dedicating $3 billion to building roads in all three Grand Divisions and another $300 million to the local highway program so communities can build and maintain the roads they need.

The Governor called for a new way of looking at roads and road funding, noting that outside-the-box solutions would be required if Tennessee is going to put any kind of dent into its considerable backlog of highway projects.  Along those lines, the Governor advocated for “choice lanes,” a public-private partnership that adds additional lanes to existing highways which motorists can use at their discretion, and will be billed for their use.  The Governor was quick to point out what he considers the distinction between choice lanes and toll roads – which have long been taboo in Tennessee – and punctuated the point by saying, “hear me when I say this: toll roads are not on the table.”  While choice lanes would be a drastic change for Tennessee’s self-funded, “pay as you go” system with no debt and no toll roads, Lee noted that choice lanes are used extensively in peer states such as Florida and Texas.

While some legislators will be weary of the plan given the departure from Tennessee’s past resistance to any form of “toll” on highways, the plan seems to have widespread support.  Indeed, the Tennessee Road Builders Association has already expressed support for Lee’s proposal. 

Job Growth and Tax Cuts

Amidst the overall uncertainty of the American economy, Lee’s budget proposal includes greater tax cuts to ease the effects of nationwide inflation, including an expanded three-month reprieve in grocery taxes for Tennessee families. Lee also introduced the “Tennessee Works Act,” a $150 million investment to lower the tax burden on small businesses and transition corporate taxes to a Single Sales Factor.

Reinforcing his commitment to job growth, Lee’s proposal builds upon the 170,000 jobs created throughout the past four years, by prioritizing Tennessee Colleges of Applied Technology (TCAT) with a substantial investment for new construction and updates to existing TCAT facilities. The TCAT Master Plan comes with a historical investment of $1 billion, the largest in state history. The TCAT Master Plan will permit skills-training for 10,000 new workers and build six new TCAT facilities in strategic locations across the state. 

Education and Family Highlights Include Teacher Raises, School Security and Enhanced Postpartum Coverage

In the wake of last year’s complete overhaul of Tennessee’s educational funding framework, there was speculation of what the Governor would propose this year in the education space. The Governor’s speech once again drew headlines with his proposal of an additional $350 million in education funding, including $125 million for teacher pay raises. If adopted, the new legislation would raise the base teacher salary from $35,000 to $50,000 by the time Lee leaves office. Lee’s budget also allocates funds toward enhanced literacy programs and expanded summer camp opportunities for children.

Lee also emphasized school safety by proposing the placement of a Homeland Security Agent in each of Tennessee’s 95 counties to allow for thorough reporting measures using the SafeTN App, where any Tennessean can report suspicious activity; an addition, Lee contends, will permit greater oversight and access for parents and students to report concerns or threats.

In keeping with his dedicated efforts toward strengthening Tennessee’s families, Lee shared the successes of the nation’s first-of-its kind TennCare Medicaid waiver program, which has resulted in more than $300 million in shared savings, at no burden to Tennessee taxpayers. These savings will allow for enhanced postpartum coverage and services for an additional 25,000 women, children, and parents. Additionally, with these savings, Lee is proposing covering the cost of diapers for the first two years of a baby’s life for mothers on TennCare.

Lee has proposed more than $190 million in additional resources to strengthen and support the Department of Child Services and a new $10 million grant program to support Tennessee foster and adoption nonprofit efforts. An additional $100 million proposed grant program will partner with nonprofits in supporting mothers, fathers, and families during a crisis pregnancy. Lee reinforced his dedication to strengthening Tennessee families and proposed a “commonsense paid parental-leave program” along with increased base-pay raises for state employees. 

Conservation: Lee Emphasizes Parks, Brownfields, and Nuclear

For his final term, Lee has committed to an agenda that addresses conservation efforts. He proposed $328.7 million in funding to upgrade as well as increase access to existing state parks, and also create new state parks.  The Governor also unveiled plans to implement cleanup and revitalization efforts for all of the state’s 175 brownfields.

Doubling down on previous efforts to emphasize nuclear energy and establish Tennessee as a national leader in that field, the Governor proposed an additional $50 million toward a Nuclear Fast Track fund to attract companies that will establish nuclear development. 

Reminder: Deadline Approaching for Employer Expenditure Report

All employers of lobbyists are required to file a 2022 year-end Employer Expenditure Report with the Tennessee Bureau of Ethics and Campaign Finance by next Tuesday, February 14, 2023. The report covers the period July 1 through December 31, 2022, and is filed electronically through the Commission’s website. For more information, click here. 

Looking Ahead

With both the State of the State and the bill filing deadline in the rear view mirror, the legislature will quickly move into high gear. Leadership is encouraging members to put bills on notice, and the level of committee activity will increase considerably.

As always, we encourage you to look closely at your weekly bill tracking report, which may have grown since last week as we have reviewed and possibly flagged more legislation. You may also notice the presence of bills that on their face seem to have no relevance.  In many cases these are considered “caption bills,” which have a much broader potential range of subjects than first meets the eye.  We have flagged certain caption bills not because of how they currently read, but instead to keep an eye out on possible amendments. Along those lines, please take a look at the attached report, and do not hesitate to let us know if you have any questions or concerns.

Thanks, and enjoy Super Bowl weekend.

Tennessee Legislative Recap: Lee Highlights Transportation, Energy in Inaugural Address; Senate Gets Underway

 

Governor Bill Lee Sworn In for Second and Final Term 

Tennessee Governor Bill Lee took the oath of office for his second and final four-year term on January 21, featuring a day that began with a star-studded worship service and ended with a black-tie ball. More than 1,500 people were slated to attend Gov. Lee’s inauguration, held outside at Legislative Plaza under sunny skies, a welcomed departure from his last inauguration which was forced inside due to rain. In his inaugural address, Lee praised Tennessee’s virtues as leading the nation in economic development and fiscal stewardship while touting the need for civility, a gesture likely aimed at encouraging nonpartisan efforts among lawmakers. He laid out his vision for the remainder of his time in office, including developing the transportation and energy strategy his administration first unveiled earlier this month, enhancing conservation efforts, and improving the state’s foster care and adoption system to better protect children. Earlier this month, Governor Lee introduced the Transportation Modernization Act, his administration’s infrastructure plan to address the state’s exponential growth and resulting traffic congestion. Lee emphasized his ongoing commitment to Tennesseans to not take on any debt or raise taxes, but shared his intention to make “strategic transportation investments that prepare rural and urban communities for increased economic advantages and improved mobility in the years ahead.” Through the use of choice lanes, increased private investment in urban roadways, and efforts toward quicker delivery on road projects, Lee’s proposal seeks to solve current and future mobility challenges.

Supreme Court Vacancy 

Governor Lee is tasked with nominating the next Tennessee Supreme Court judge from three finalists to replace Justice Sharon Lee’s vacated seat when she retires August 31. This will be Governor Lee’s second appointment, and makes all five Supreme Court Justices Republican appointments. On the list for the Governor’s consideration:

  • Kristi Davis of Knoxville; Davis currently serves as a judge on the Tennessee Court of Appeals, having previously served as a judge in Knox County Circuit Court, Division 1 and 14 years in private practice.
  • Tom Greenholtz of Ooltewah; Greenholtz is an Eastern Section judge of the Tennessee Court of Criminal Appeals.
  • Dwight E. Tarwater of Knoxville; Tarwater has practiced law since 1980 and previously served as a partner at Paine, Tarwater, and Bickers LLP. He also served as general counsel to former Governor Bill Haslam between 2014-2018.

Following the Governor’s nomination, the General Assembly must confirm the appointment. 

Special Election for House District 86 

By a wide margin, Justin J. Pearson (D-Memphis) won the Tennessee House District 86 special election to fill the seat formerly held by late Representative Barbara Cooper (D-Memphis). Pearson easily defeated nine other candidates, including Rep. Cooper’s daughter, Tanya Cooper. Rep. Cooper served in the General Assembly for more than 25 years and was the oldest serving lawmaker in Tennessee recorded history.  There was no Republican candidate for the seat, so Pearson will take office February 1.  Pearson is a community activist in Memphis that is best known for leading efforts against a pipeline that would have run near a water aquifer and through poor, predominantly black neighborhoods in Memphis.  

Looking Ahead 

While the Senate got underway last week, the House remained adjourned, as members continue to get settled into new offices and complete organizational tasks. The Senate largely devoted its week to introductions and presentations. 

Both chambers will be in session this week, signaling the end of the organizational period.  With that, legislative activity will start picking up over the next couple of weeks, marked by a flurry of filing activity early next week in advance of Tuesday’s House bill filing deadline. The Senate deadline is two days later, on Thursday, February 2.  We expect committee calendars to begin filling up two to three weeks from now. 

Governor Lee’s State of the State address is scheduled for February 6, where he will mark the state’s accomplishments and outline his legislative priorities for the year.