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. 

Tennessee General Assembly Kicks Off 2023 Session; Governor’s Inauguration Set for January 21; 2023 Annual PAC Registration Due

 

The 113th Tennessee General Assembly kicked off the 2023 legislative session this week in Nashville, beginning the first year of a two-year legislative session.

Legislature Elects Leadership and Constitutional Officers               

Lt. Governor Randy McNally (R-Oak Ridge) was elected to his third term as speaker of the Senate, with all 27 Republicans voting unanimously in favor of the current Speaker, while the six Senate Democrats abstained from voting. House Speaker Cameron Sexton (R-Crossville) was elected to his second full term with 76 members voting in favor. The other 22 votes went to Democratic Caucus Chair John Ray Clemmons (D-Nashville). The House and Senate unanimously reelected Comptroller Jason Mumpower and Treasurer David Lillard for new two-year terms. Secretary of State Tre Hargett’s four-year term isn’t up until 2024.

Changes to Committee Chairs 

In the House, Speaker Sexton named Bud Hulsey (R-Kingsport) to succeed retired Dickson state Rep. Michael Curcio as chair of the Civil Justice Committee. Rep. David Hawk (R-Greenville) was appointed chair of the Health Subcommittee, taking over the position previously held by former Rep. Bob Ramsey (R-Maryville) who was defeated in last year’s Republican primary. Rep. Chris Todd (R-Jackson) succeeds retired Rep. Curtis Halford (R-Dyer) as chair of the Agriculture and Natural Resources Committee. Sexton decided to do away with the Naming and Designating Committee, created in 2019 by former Representative and House Speaker Glen Casada (R-Franklin). New to the committee structure this year is the Population Health Subcommittee, chaired by Rep. Michele Carringer (R-Knoxville).

The Senate saw minimal changes with its committee structure, with the exception of Sen. Todd Gardenhire (R-Chattanooga) appointed as the new chair of the Judiciary Committee. Sen. Jon Lundberg (R-Bristol) will continue as chair of the Education Committee. Lundberg was named interim chair last legislative session, following former Sen. Brian Kelsey’s (R-Germantown) decision to step down as chair.

Governor Lee 2023 Inauguration 

Gov. Bill Lee will take the oath of office for his second term next Saturday, January 21. The inauguration ceremony itselfwill take place at 11 a.m. on Legislative Plaza in Nashville, and a full weekend of activities are planned, including a music event on Lower Broadway, a prayer service, and a dinner and ball. The theme for this year’s inaugural celebration is “Tennessee: Leading the Nation.”

Reminder:  Deadline Approaching for PAC Registration Requirements

As we reported last summer, the ethics laws passed during the 2022 legislative session – which took effect July 1, 2022– made a number of changes to the reporting requirements for PACs.  The law requires all PACs to certify the name and address of its treasurer, officers, and responsible individuals (any person who directly controls expenditures) with the Tennessee Registry of Election Finance. The new law also requires each PAC to identify at least one officer, not including the treasurer, and identify at least one person who directly controls who expenditures. PACs that existed prior to the July 1, 2022 effective date must submit proper proof of identification for each treasurer, officer, and responsible individual to the Registry no later than January 31, 2023. If a PAC designates a new treasurer, officer, or responsible individual after submitting its annual registration, the PAC must notify the Registry of any new designated individual within 30 days. 

To read more about these changes to the annual PAC registration process, please see slide deck prepared by the Tennessee Bureau of Ethics and Campaign Finance.

Looking Ahead 

We are expecting the remainder of January to be relatively slow. Both chambers are taking a break for the first half of next week, but will return to Capitol Hill next Friday and Saturday for Gov. Lee’s inauguration events. The first full week of committee meetings in the Senate will begin on Tuesday, January 24. The House will begin committee meetings the following week on Monday, February 6. Bills are beginning to trickle in, and we are beginning to build our bill tracking reports, which should appear as early as next week. As always, please do not hesitate to reach out to us if you have any questions.

House and Senate GOP re-elect top leadership team

Tennessee House Republicans unanimously voted current Speaker Cameron Sexton (R-Crossville) to lead the House of Representatives for a third term. The House GOP Caucus also voted to reelect Rep. William Lamberth (R-Portland) as Majority Leader, Rep. Jeremy Faison (R-Cosby) as Caucus Chairman, and Rep. Johnny Garrett (R-Goodlettsville) to serve as Majority Whip. Rep. Pat Marsh (R-Shelbyville) was chosen to serve his second term as Speaker Pro Tempore, and Rep. Mark Cochran (R-Englewood) was elected to his first term as Assistant Majority Leader.

The Senate Republican Caucus voted current Lt. Governor Randy McNally (R-Oak Ridge) to a fourth term as Speaker, and to return Sen. Jack Johnson (R-Franklin) as Majority Leader and Sen. Ken Yager (R-Kingston) as Caucus Chairman.

 

The national dynamic of election day drama and razor-thin margins was noticeably absent in Tennessee last night, as the GOP once again dominated elections at all levels and reaffirmed Tennessee’s reputation as one of the most reliably-red states in the country. The night was punctuated by Governor Bill Lee’s resounding 65-33 victory over Democrat Jason Martin, guaranteeing Lee a second term and improving significantly upon his 21-point landslide win in 2018. Lee’s victory means that it has now been eleven years since a Democrat occupied Tennessee’s Governor’s office, when Phil Bredesen served from 2003 until 2011. Indeed, Bredesen’s 2006 victory marks the last time a Democrat won a statewide election in the Volunteer State.

 

The GOP also grew its Congressional delegation from Tennessee to 8-1 as Maury County Mayor Andy Ogles prevailed decisively in the newly-drawn Fifth Congressional District, defeating State Sen. Heidi Campbell (D-Nashville) by 14 points and ensuring that Nashville would have a Republican in Congress for the first time since Reconstruction. Meanwhile, Republicans maintained their supermajority in the General Assembly, winning most contested races by 2:1 margins or more and actually picking up one House seat along the way, expanding their House tally to 77 of 99 overall seats.  

 

Understated Campaign Pays Off for Lee

 

The widely popular Lee ran a low-key campaign, spending relatively little time on the trail, running “soft” commercials that laid out his economic accomplishments and pro-family record, and barely acknowledging his opponent. He touted the fact that he is now two for two in positive campaigns, noting that once again he refused to air any negative ads. Virtually all major media outlets called the race for Lee as soon as the polls closed. 

 

Perhaps the highlight of Lee’s victory party in Franklin last night was the surprise appearance of First Lady Maria Lee, who has been out of the public eye since being diagnosed with lymphoma in August. The Governor noted that the First Lady couldn’t stay home, adding that the cancer battle has “been tough – but she’s tougher.”

 

Lee also highlighted infrastructure as a top priority for his second term. He noted that Tennessee is simply not building enough and maintaining enough roads to keep up with the incredible growth, pledging that “you’re going to be hearing a lot more about that, starting tomorrow even.” 

 

Congressional Recap: TN-5 Pushes Congressional Delegation from 7-2 to 8-1

 

Ogles’ win culminated a long journey for the Tennessee Republican Party, which sought to use the redistricting process to add one more red seat to Tennessee’s Congressional delegation. Legislative leadership effectively divided Tennessee’s Fifth Congressional seat – Nashville’s seat, and one traditionally classified as “solid Democrat” – into three separate parts, melding each into a strongly Republican district. Democrats loudly protested the move to no avail, and longtime Congressman Jim Cooper (D-Nashville) announced that he would not seek re-election for the newly constituted seat. That set off a feeding frenzy of Republican hopefuls, including more than one that were relative newcomers to Nashville. Ogles emerged from a crowded primary field as the Republican nominee, outperforming other better-funded candidates. Ogles, who promoted himself as “Tennessee’s most conservative mayor,” faced respectable opposition in State Senator Campbell, but in the end prevailed by 14 points. Ogles was featured in the Washington Post last week as one of a new class of “hard line Republicans” that could push for issues such as impeachment and investigations upon arriving in Washington. 

 

While Tennessee’s Seventh Congressional District also received a large chunk of Nashville/Davidson County, it did nothing to dampen the performance of incumbent Mark Green (R-Clarksville), who won a third term in Washington thanks to a 60-38 victory over Odessa Kelly (D-Nashville). The remaining Nashville portion was combined into the Sixth District, where Republican incumbent John Rose also won in a landslide by a 66-34 margin.    

 

Republican U.S. Reps. Tim Burchett, Scott DesJarlais, Chuck Fleischmann, Diana Harshbarger and David Kustoff were all successful in their reelection bids.  Democratic U.S. Rep. Steve Cohen (D-Memphis) also won reelection, keeping him Tennessee’s lone remaining Democratic congressman.

 

Legislative Update: Few Upsets, But A Number of New Faces

 

There were few headlines in the legislative races, with numerous uncontested races on the ballot and many of the contested races featuring lopsided outcomes. In perhaps the most notable outcome, longtime incumbent John Mark Windle, a former Democrat that now is classified as an Independent, lost his reelection bid in House District 41 to Republican Ed Butler by a 53-47 margin. Windle’s seat was significant in that it was the lone rural legislative seat not held by the Republicans, who have dramatically reversed Tennessee’s legislative makeup over the last 15 years by eroding the Democrats’ stronghold over Tennessee’s rural districts, turning them exclusively red. 

 

While Windle was the only incumbent to lose his election bid, there will still be several new faces when the legislature convenes in January. Indeed, there will be 17 new members in the 113th General Assembly, including Senators Brent Taylor (R-Memphis, succeeding Brian Kelsey) and Charlane Oliver (D-Nashville, succeeding Brenda Gilmore), as well as Reps. Caleb Hemmer (D-Nashville; Dist. 59), and Jake McCalmon (R-Franklin, replacing Glen Casada). And in one of the more interesting developments of the offseason, community activist Justin Jones (D-Nashville) – who was once banned from the Capitol for throwing a paper cup at then-Speaker Casada – is now part of the General Assembly, having prevailed in an uncontested election to represent House District 52. 

 

Looking Ahead: Infrastructure, Education, Criminal Justice Expected to Highlight 2023 Session

 

In his victory speech last night, Governor Lee expressed his goal to address Tennessee’s infrastructure needs without going into debt or raising taxes, which will be a challenge in itself. Infrastructure will not be the only focus however, as issues such as parental rights and school choice also look to take center stage. Lee argued that “we can fund public schools and provide alternative opportunities for children at the same time if we are committed to funding students and not systems.”  

 

Also look for considerable attention on criminal justice issues. The “Truth in Sentencing” law that was championed by the legislature late in the 2022 session and passed without Lee’s signature became a wedge issue between Lee and legislative leadership. The issue once again rose to the surface following two high-profile crimes in Memphis in September, where it was revealed that in both cases the assailants had only served partial sentences for previous crimes. That gave rise to a new series of calls for sentencing reform, especially among juveniles, and in response lawmakers created a joint committee to review the sentencing and supervision of criminal defendants, in order to provide additional safeguards to the public. Republican leadership has announced plans to push for even stricter sentencing laws in 2023.

 

The 113th General Assembly is scheduled to convene at noon on Tuesday, January 10, 2023. 

 

One of the major challenges that the state of Tennessee will face in the future will be maintaining the state highway fund at a level needed to continue to repair and replace roads and bridges but to also construct new highways.  Anita Wadhwani with the Tennessee Lookout Report recently published an excellent article.  A link to that article is: https://tennesseelookout.com/briefs/advisory-group-projects-looming-deficits-in-tennessee-road-and-highway-project-funding/

As noted in her article, there was a hearing where representatives of the Tennessee Advisory Commission on Intergovernmental Relations (“TACIR”) provided an update which should get the attention of not only the legislature but also the trucking industry.  TACIR testimony indicated by 2040 10% of all vehicles on Tennessee’s roadways are projected to be electric. It is also expected that the average national vehicle fuel efficiency will increase from 23-miles-per-gallon to 30-miles-per-gallon during the same timeframe.  As a result, based on loss of fuel tax revenue, fuel efficiency and inflation, it is projected that Tennessee will see a $399 million reduction in its gas tax spending power.

The challenge faced by the State to maintain the highway fund at a level to pay for repairs and construction of new projects will be challenging.  Not only will there be a decrease of revenue but the fact that the state fuel tax is not indexed for inflation will certainly cause issues that the legislature will want to review in the near future.  As noted in the article, Tennessee has 96,000 miles of public roads and 20,000 bridges but federal government funding is designated only for about 1/5 of all of the state’s roads and highways.

We expect this issue to remain on the radar of the legislature in the near future with all options being on the table.  Recent options that were recommended include raising registration fees for electric vehicles, implementing indexing on the state fuel tax, and even the possibility of reviewing some type of fee based on mileage.

We are heading into the final days of the 2022 election season.  Thanks to your support, TruckPAC has been very active in helping legislators who are supportive of the industry.  TTA along with Adams and Reese hosted a dinner in Nashville on October 19, 2022 in support of House Speaker Cameron Sexton and his leadership PAC.  As always, thank you for your support!

Thanks to all those who attended the TTA convention recently held in Sandestin, Florida, September 19-21, 2022. It was good to see everyone engaged on many issues that affect the trucking industry. Also, a major thank you to Senator Paul Bailey and Representative Pat Marsh for attending. The legislative update not only included Senator Bailey and Representative Marsh but also representatives of the Department of Safety which was very enlightening and informative.
 
It was also very nice to honor one of our own, Pat Marsh, as the 2022 recipient of the Pinnacle Award. Pat’s service in the legislature over the past several years has been so helpful. He is someone we have always leaned on for assistance on issues involving the trucking industry. As I noted in my comments at the convention, we are so fortunate to have individuals like Pat Marsh and Paul Bailey whose involvement in this industry makes all of our jobs a lot easier. 
 
TTA will be involved with supporting a dinner for House Speaker Cameron Sexton on October 19, 2022. This is the third fundraising dinner of the year that TTA has hosted for a member of the legislature. These dinners prove to be very helpful in that they give representatives of the industry an opportunity to spend quality time with leaders of the legislature to discuss issues affecting the industry. This would not be possible without your support of TruckPAC. Before the year is over, TruckPAC will have contributed more than $100,000 to legislative candidates. This is only made possible by your continued support. Thank you for your support of TruckPAC and our lobbying efforts on behalf of the industry!

BREAKING: FORMER TENNESSEE HOUSE SPEAKER CASADA, CHIEF OF STAFF ARRESTED BY FBI FOLLOWING FEDERAL INDICTMENT ON THEFT, KICKBACKS, MONEY LAUNDERING

 

In a development that has been brewing for some time, former Tennessee House Speaker Glen Casada and his former Chief of Staff, Cade Cothren, were both arrested by FBI agents at their homes at 7 a.m. last Tuesday morning.  The arrests come in the wake of a 20-count federal indictment charging the two with conspiracy to commit the crimes of theft, wire fraud, bribery/kickbacks, and money laundering. If convicted, the charges carry maximum sentences of 20 years in prison.  Both Casada and Cothren appeared in court following their arrests, where they pled “not guilty,” and in a comment to the media Casada’s attorney promised to mount “a vigorous defense” to the charges.  They were released from custody on Tuesday.

The arrests mark the latest development in the FBI’s ongoing investigation of a shadowy political consulting firm, Phoenix Solutions, which is alleged to have been secretly operated by Cothren and Casada. The FBI raided the offices and homes of a handful of Republican lawmakers and staff in January, 2021, as part of an investigation into the laundering of campaign finance money toward Phoenix, which was originally established to offer services to legislators facing primary challenges and was later expanded to act as a mail vendor for the General Assembly.   Then in March of this year, former House Insurance Committee Chair Robin Smith (R-Hixson) resigned from the legislature a day before pleading guilty to a federal wire fraud charge for her role in the scheme.  Federal prosecutors alleged that Smith, Casada and Cothren had schemed to set up and run Phoenix, with Cothren running the firm and operating under a false identity of “Matthew Phoenix.”  Smith admitted her guilt and pledged to cooperate fully as a witness for the federal government.  

Casada decided not to run for reelection this year, instead opting to run for county clerk in his home county, Williamson County. He lost that race by a landslide.

After first being elected to the legislature in 2001, the ambitious Casada quickly rose through the leadership ranks.  He was elected House Republican Caucus Chairman in 2004, and went about aggressively fundraising and recruiting Republican candidates for office.  He is credited for leading the GOP’s strategy that in 2008 helped it gain a majority in the House for the first time since Reconstruction.  He followed that up by leading the efforts in 2010 to help the GOP obtain the supermajority that it still enjoys today.  Casada ascended to the role of House Majority Leader in 2017, and two years later seized the opportunity to run for Speaker when Beth Harwell (R-Nashville) stepped down to run for Governor. 

During the 2019 session, Casada quickly embraced the full power of the Speaker’s role.  Among other things, he kept the vote for the school voucher bill open for 40 minutes as he worked to break a deadlock and ensure the bill’s passage.  He also stripped certain members of leadership positions, and was accused of deploying staff members as “hall monitors,” acting as his eyes and ears in legislative hallways.  By the last week of the 2019 session, Casada looked to be on the path to become one of the most powerful Speakers in Tennessee history, but was blindsided on the final day of session by a news story that alleged he had participated in a text message thread with Cothren that had contained both sexist and racist messaging.  That was followed by a story alleging that Cothren had engaged in the use of illegal drugs.  The onslaught of negative press continued on a frequent basis until July of that year when the House Republican Caucus delivered an overwhelming vote of “no confidence.” Casada resigned the next month, and he was replaced in the role by Cameron Sexton (R-Crossville).   Casada spent the next three sessions relegated to back bencher status, and for the last 19 months has been hounded by allegations of impropriety stemming from the FBI raid in January of 2021.  With Tuesday’s arrest, it effectively punctuates one of the more stunning downfalls in Tennessee political history.

Speaker Sexton released the following statement:

“In Tennessee, we will not tolerate public corruption, defrauding the state, or bribery at any level. I commend the Federal Bureau of Investigation for its hard work, diligence, and dedication that resulted in [Tuesday] morning’s arrests. 

As I have previously stated on several occasions, shortly after becoming Speaker in 2019, I began assisting the federal authorities during and throughout the investigation — including leading up to today’s indictments, and I will continue to do so if a trial is needed.  

Together, our legislative body has stood strong over the past two years to take significant actions during this investigation by passing laws to strengthen campaign finance regulations and new ethics laws for elected officials and staff. 

Today is a good day for Tennesseans because we did not turn a blind eye to these criminal activities.”

Tennessee Mid-Summer Update: New Laws in Place; Congressional Race Heating Up

 

With all of the state House seats and half of the Senate seats up for re-election, not to mention a hotly contested Congressional race that will likely take the GOP’s numerical advantage in Tennessee’s Congressional delegation from 7-2 to 8-1, this summer has been far from quiet. Plus, with the overwhelming number of predominately blue or red districts across the state, the August primary is the only competitive race in many instances. That means that campaign ads are increasingly filling the airwaves, fundraisers are filling calendars, and more and more voters are starting to take interest in the races. And as is custom, a raft of new state laws took effect on July 1, including one law that adds new reporting requirements for Political Action Committees (PACs).

New Campaign Finance/Ethics Law Contains Changes for PAC Reporting

 Tennessee’s latest finance and ethics reform law took effect on July 1, and among other things will require greater openness and transparency from political candidates and political action committees (PACs) in an attempt to curtail bad actors and to shine light on so-called “dark money” groups. Going forward, PACs will experience the following changes: 

  • The new law deletes the so-called blackout provision whereby a PAC is prohibited from making a contribution to any candidate after the 10th day before an election until the day of the election. Going forward however, PACs must disclose most donations, loans, or expenditures made or received within the window of the last ten days before an election by the end of the next business day. The threshold amounts requiring next-day disclosure are as follows: 
    • $5,000 for statewide offices;
    • $3,000 for senate elections; and
    • $1,000 for any other state or local public office.
  • The foregoing reports must include the amount, date, and a brief description of the contribution, expenditure, or loan reported. For independent expenditures, the report must include the name of the candidate or measure supported or proposed. For loans, the report must contain the name and address of the lender, the recipient of the proceeds of the loan, and any person who makes any type of security agreement binding such person or such person’s property for the repayment of all or any part of the loan.
  • Established PACs (those already in existence as of July 1, 2022) have until January 31, 2023 to submit certification of the name and address of all officers of the committee and of all persons who directly control expenditures by submitting valid government photo IDs to the Tennessee Registry of Election Finance. If a PAC designates a new person under this law, the committee shall submit evidence of identification within thirty days of the designation. New PACs (those registered on or after July 1, 2022) are required to provide the above disclosures prior to making any expenditures or taking contributions.
  • The law also makes the officer in charge of the committee’s expenditures personally liable for any fines assessed by the Registry. However, it prohibits the PAC from paying a fine issued against a candidate by the Registry. These penalties must not be paid using PAC funds.
  • PACs must now ensure that all funds in a campaign account remain separate and segregated at all times from other funds, including personal funds. A candidate or PAC found to be in violation of this provision commits a Class 2 offense and is subject to a civil penalty of up to $25 per day and a maximum penalty not to exceed $10,000.
  • In order to comply with an audit, PACs must retain copies of all checks, money orders, wire or account transfer statements, withdrawal statements, credit or debit statements, bank statements, vendor receipts, and other documentation directly resulting from a financial transaction involving the receipt or disbursement of any funds subject to disclosure for two years after the date of the election to which the records refer.

The law, which was sponsored by Lt. Governor Randy McNally (R-Oak Ridge) and House Speaker Cameron Sexton (R-Crossville), came as a result of an FBI investigation of campaign funding and activity in Tennessee. The investigation, which is ongoing, has resulted in a number of highly-publicized raids of legislator and staff offices and homes, as well as Rep. Robin Smith’s (R-Hixon) guilty plea for wire fraud and subsequent resignation from the General Assembly. 

In a release, McNally stated that the law is “aimed at bad actors,” as well as “the various shell companies and shadowy PACs used by certain legislators to line their own pockets.” McNally added, “if you are working to influence the outcome of an election, the voters deserve to know who you are and what you are doing. What could possibly be wrong with that? The fact this is even in question demonstrates the need for the legislation.” 

As it relates to candidates, the new law requires disclosure of all expenditures and sets a cap on non-itemized expenses at $2,000 per statement period. A candidate’s contributions will be audited automatically for reporting periods beginning on or after January 16, 2023, if more than 30% of the report contains un-itemized contributions.

The law also prohibits candidates and political action committees from utilizing pre-checked or pre-marked boxes in a solicitation authorizing or requiring future contributions to that candidate or committee. Such a request must now be accepted and acknowledged in writing by the potential contributor in clear and precise language.

Further, the law mandates that nonprofit organizations classified as 501(c)(4), 501(c)(5), or 501(c)(6) disclose any expenditures of more than $5,000 made on communications that feature a candidate’s name or image which take place within 60 days of an election. However, there are exceptions for communications to the nonprofit’s members, lobbying during a special session, and communications to groups that have opted in to receive such communications. 

Other New Laws of Note Include Sales Tax Compensation, Energy Infrastructure, and Suspension of License Plate Fees           

The McNally-Sexton ethics reform law was far from the only law that took effect on July 1.  Other laws of note include the following:

Compensating vendors for sales tax collections: Vendors in Tennessee are charged with hiring the personnel, investing in software, and devoting the time necessary to collect more than $11 billion in sales tax annually. Until 2000, vendors were compensated for their work, but have yet to receive any financial incentive since that year due to the state’s fiscal cutbacks. This newly enacted law restores compensation for vendors in the form of a 2% remuneration on the first $2,500 in sales tax collected and 1.15% on all sums over $2,500 on each report.

Energy Infrastructure: Under this new law, local governments are now prohibited from blocking the development of infrastructure while preserving municipal zoning power. The law applies to storage tanks, pipelines, gas transmission lines and other infrastructure essential to fuel the economy and meet transportation and industry demands. In addition to zoning, localities may still use their police powers to regulate certain aspects of construction and maintenance to reduce or prevent the risk of an imminent and substantial threat to human safety. This includes the localities’ right to charge reasonable, cost-based compensation for the use of the locality’s highways and streets. Supporters of the new law argued that given the highly regulated nature of the energy industry and the fact that energy infrastructure regularly crosses state lines, one municipality should not be able to block its development unilaterally.

License Plate Registration Fees Suspended: From July 1, 2022 until June 30, 2023, Tennesseans will not have to pay the state’s annual license plate registration fee of $23.75.

Certificates of Need: As of July 1, the Board of Licensing Healthcare Facilities merged with the Health Services and Development Agency to form the Health Facilities Commission. This change was a result of a recommendation from the HSDA to improve the state’s Certificate of Need process. 

Truth in Sentencing: A rift developed between Governor Lee and Republican legislative leadership over this bill, which became law without the Governor’s signature. The law provides that individuals convicted of certain offenses must now serve the entirety of their sentence before being eligible for release. These offenses include: (1) aggravated assault; (2) vehicular homicide; (3) possessing a firearm during the attempt or commission of a dangerous felony; (4) aggravated kidnapping; (5) aggravated robbery; (6) carjacking; (7) aggravated burglary; (8) aggravated arson; and (9) the manufacture, delivery, or sale of controlled substances which carry an instant offense as a Class A, B, or C felony if the person has two or more prior convictions for this offense.  The measure received strong bipartisan report in the General Assembly, which promoted the bill as showing that Tennessee is tough on crime; however, it ran into strong opposition from Governor Lee and criminal justice reform advocates, who argued that the legislation would result in significant operational and financial strain such as higher recidivism and prison overcrowding, with no reduction in crime. 

Overdose prevention: Effective July 1, healthcare providers that offer a prescription for an opioid to a patient must also offer a prescription for naloxone. Naloxone can reverse an overdose if administered in time.

Tire dumping penalties: This law makes it a Class E felony charge for a first-time conviction when disposing of eight or more tires for commercial purposes. It also creates a Class A misdemeanor charge of aggravated littering for the unauthorized and willful disposal of two or more tires on public or private property.

Residential blasting: To address neighborhood concerns about residential blasting, this law updates blasting requirements, including the addition of safety processes and protocols. The law aims to reduce vibrations, improve communication with the public, and clean up and repeal standards that have been in effect since 1975.

Human trafficking prevention: This new law expands the mandatory training in school to detect and prevent human trafficking to all school employees, including personnel such as janitors, bus drivers, and cafeteria workers. Prior to the implementation of the new law, only teachers were required to undergo the training.

Public camping prohibited: This law makes it a felony for a person to camp on state property in areas that have not been designated as camping areas, and a misdemeanor to camp along areas such as an interstate highway, a ramp,or under an overpass. Critics argued that the law further criminalizes poverty and homelessness, and the bill became law without Governor Lee’s signature.

Election Update: TN-5 Has Become a Three Horse Race; Several Intriguing Races to Replace Departing Legislators 

Early voting for Tennessee’s August 4th primary election began last Friday, and all eyes are on the newly-drawn 5th Congressional District. That seat, which has historically been considered “safely Democrat” and for the last 20 years has been occupied by Jim Cooper (D-Nashville), underwent a dramatic change in the most recent redistricting process. The district was redrawn by the GOP-dominated General Assembly in a fashion that should now make it “lean Republican,” a change that led Cooper to decide that he would not seek an additional term. Cooper did not spare his criticism of the legislature in the process. “Despite my strength at the polls, I could not stop the general assembly from dismembering Nashville. No one tried harder to keep our city whole,” Cooper said in a statement. 

The approval of the newly-constituted district, paired with Cooper’s announcement, set off immediate, widespread interest in the seat as well as a feeding frenzy of prospective candidates. Even President Trump entered the fray to endorse a candidate. The field was narrowed somewhat in April when the Tennessee Republican Party eliminated three formidable candidates for a lack of bona fides, leaving voters with a race that essentially comes down to three candidates:

  • Beth Harwell, the former Speaker of the state House;
  • Andy Ogles, the mayor of Maury County; and
  • Kurt Winstead, a retired Brigadier General in the TN National Guard.

While Harwell leads in name recognition, Ogles’ strong conservative record makes him a dark horse candidate, and Winstead’s fundraising numbers suggest he could be a strong contender as well. Friday’s fundraising disclosures show that Winstead received $381,980 in donations and loaned his campaign $660,000 in the second quarter. However, he also paid back $460,000 of an earlier loan, totaling a net $581,980 in collections for this quarter. Adding that amount to the $519,625 from first quarter contributions and the $20,000 remaining from his initial $480,000 loan, Winstead’s total is roughly $1.1 million since joining the race. Harwell raised $421,360 in the second quarter, an improvement over her first-quarter collections of $353,927. Harwell’s total receipts to date are $775,287. Surprisingly, Ogles reported no fundraising numbers by the July 15 Federal Election Commission deadline. The missed deadline will likely subject Ogles to a fine from the FEC.

On the Democrat side, State Senator Heidi Campbell (D-Nashville) is replacing Cooper as the party nominee and is running unopposed in the primary. However, Campbell will face a stiff test in November’s general election, as the GOP has long coveted a “Nashville” seat in Congress, not to mention the ability to shift the balance of power in Washington as well. 

The election intrigue is not limited to Congress. The General Assembly will also see a number of interesting races, with a handful of hotly contested primaries taking place to determine who will replace retiring incumbents such as Sen. Mike Bell (R-Riceville), Sen. Brenda Gilmore (D-Nashville), Rep. Kent Calfee (R-Harriman), Rep. Mike Stewart (D-Nashville), Rep. Brandon Ogles (R-Franklin), Rep. Glen Casada (R-Franklin), and Rep. Michael Curcio (R-Dickson). As noted previously, the plethora of safely Democratic or Republican districts frequently means that all of the action is in the primary, with the general election often standing as a mere formality. 

We will update you following the outcome of the August primary elections. In the meantime, we hope you are having a safe and enjoyable summer, and please don’t hesitate to reach out if you have any questions. 

This campaign season is very busy with some active races.  On June 20, 2022, TTA along with Adams and Reese hosted a fundraising dinner for Senator Jack Johnson from Williamson County. Jack is the current Republican Majority Leader in the Senate and longtime supporter of the trucking industry.  He has a well-funded primary opponent that has caused Jack to have to defend his pro-business record since being in the legislature. The event on June 20th was a major success and we couldn’t have sponsored the event without the support of members of TTA and the contributions made to TRUCK PAC.   Also, the individual support of Gary Sasser, Tommy Hodges, Scott George, JB Baker, Connie Vaughn, and Jack McKee made the event a major success. TTA will be hosting a similar event this fall for House Commerce Chairman Kevin Vaughn of West Tennessee.  Please continue to support TRUCK PAC with your contributions and support.   

 

With the legislature adjourning several days ago, we thought now would be a good opportunity to bring you up to date on the revision of the towing statute that is PC 826. This was primarily sponsored by Senator Bailey and co-sponsored by Senators Powers and Stevens in the Senate and primarily sponsored by Representative Marsh and co-sponsored by Representative Hazelwood in the House.

The purpose of this legislation is to tighten up some of the notification requirements after equipment is towed in regard to T.C.A. § 66-19-103 – Garage keepers or Towing Firms Lien. There is a difference between public tows and private tows. Public tows contain a more detailed process when it comes to notifying equipment owners when equipment has been towed. A public tow is a tow that is authorized by a public agency like a local police department or state highway patrol. Also, there are stiff penalties for towing/garage keeper firms that do not provide immediate notice when equipment is towed. Although private tows do not occur as often as public tows, this has still caused some issues over the past several months where equipment was being towed from private property. Before the legislation was amended this year (HB2245/SB2886), when private tows were involved, the only notice that was given was a notice provided in a local news publication which would have contained, if ascertainable, the VIN and advertising that the equipment would be sold. 
The legislation that was passed now requires that if the motor vehicle being towed clearly identifies the USDOT number issued by the FMCSA, a registration plate issued and attached to the motor vehicle described in § 55-4-113(a)(2), or a registration plate issued and attached to the trailer described in § 55-4-113(a)(5), the garage keeper or towing firm is required to notify the owner of the motor vehicle identified by the USDOT number or the owner assigned to the registration plate issued at the address identified with the USDOT number, rental equipment information, or the vehicle’s registration within three (3) working days of taking possession of such vehicle or equipment by registered mail, return receipt requested. A violation of this requirement is now a violation of Title 47, Chapter 18, Part 1.

There have been comments by one person who allegedly speaks on behalf of the towing industry that the state law required a three-day notification. That is incorrect and did not provide that the towing company had to use the information provided for the USDOT no. or registered plates to provide the three-day notice. Hopefully, this newly enacted law will cut down on some of the bad behavior of towing companies in regard to failing to provide notice of towing of equipment and also provide adequate notice of the sale of equipment.

CURTAIN CLOSES ON 2022 TENNESSEE LEGISLATIVE SESSION

The 112th General Assembly adjourned sine die Thursday 4/28 at 3:38 p.m., ending what has been a marathon legislative stretch with three different sessions over an eight-month span. With so much legislative activity packed into such a comparatively short period of time, many lawmakers expressed burnout and fatigue very early in the 2022 regular session, with many confiding that, combined with the special sessions that took place in the fall, it felt like they never really left Nashville in the first place. Layer that with the dynamic of having new legislative boundaries – that in some cases created dramatically different districts – and most lawmakers hoped for an early adjournment to allow them
ample time to return home to regroup and prepare for the August primaries. That may have also impacted the volume of legislation filed and the relative lack of contentious, high-profile bills that flowed through committees.

Looking back at the high points of 2022, Governor Bill Lee was able to close out the final legislative session of his first term by revamping the state’s educational funding model for the first time in three decades while also seeing most of his legislative agenda pass without much hand-wringing. Lawmakers passed a once-in-a-decade redistricting plan that looks to preserve GOP supermajorities in the state house while also giving the GOP one additional congressional seat. In its one Constitutionally-required task, the General Assembly passed a balanced, $52.8 billion state budget that managed to contain more than $418 million in tax cuts – always popular in an election year. Lawmakers will now return home and
in most cases will prepare for campaigns, as half of the Senate and all of the House seats are up for reelection. Moreover, with many legislators having to play get-to-know-you with entirely new communities and counties in their districts and many also having challengers in the August primaries, there is plenty of incentive to quickly flip the switch to campaign mode and hit the ground running.

Redistricting Drama: Republican Plans Spur Litigation, Supreme Court Appeal

There was no easing-in process when the General Assembly reconvened in January, as it quickly had to address its first order of business – the finalization and approval of Tennessee’s new legislative districts. Redistricting is a once-in-a-decade process that takes place upon conclusion of the census, and the majority party is given the privilege of running that process, thus ultimately controlling how the district lines are redrawn. In Tennessee, the GOP looked to capitalize on its supermajority in Tennessee and create an even greater numerical advantage over the Democrats. Immediately upon the release of the draft versions of Republican-drawn districts, Democratic leaders leveled harsh criticism at their
counterparts, arguing that the draft plans were illegal and unfair. Legislative Democrats noted that many Democratic incumbents had been drawn into the same districts, and alleged that the Republicans had engaged in gerrymandering. Other Democratic leaders alleged that the new districts reflected discrimination. The Democrats characterized their own draft plans as more fair, especially for Tennessee’s major metropolitan areas. Not surprisingly, Republicans denied these claims. They continuously defended their proposals as transparent and legal while also citing various times throughout history where both Davidson and Shelby counties have been split into multiple districts. In the end, the final Republican-drawn plans passed easily along party lines.

The redistricting process took on an even greater sense of urgency given the razor-thin margins that currently exist in Washington and the notion that every state and every seat counts. That dynamic played out in plain view in Tennessee’s congressional redistricting process, as the GOP currently enjoys a 7-2 advantage, but would very much like to expand that to 8-1. The Fifth Congressional district, which is currently held by Rep. Jim Cooper (D-Nashville) was creatively transformed to make the seat likely to fall into the hands of the Republicans, a move that drew harsh criticism from Democrats and also resulted in  Cooper’s announcement that he would not run for re-election. The drama did not stop there however, as the creation of a likely-Republican seat with no sitting incumbent drew Congressional hopefuls out of
the woodwork, creating a field that seemingly grew by the week and resulting in both state legislation and state Republican Party maneuvering that became a national story, as noted below.

It is not uncommon to see redistricting spur litigation, and this year’s effort was no exception. A lawsuit was filed in late February, backed by the Tennessee Democratic Party. The suit argued that the General Assembly unconstitutionally drew House and Senate maps to further entrench the Republican supermajority by dividing more counties than necessary in the House map and numbering Senate districts nonconsecutively. The lawsuit particularly focused on four districts in Davidson County, which were previously consecutively numbered. In early April, a three-judge panel – a new, legislativelycreated concept designed to handle election cases, Constitutional matters and cases where the state is a
party — blocked the General Assembly from enforcing the state Senate redistricting plan, ordering the body to fix issues with the map within 15 days. The decision shocked Republican leadership and led to an emergency appeal directly to the Tennessee Supreme Court due to the decision’s potential impact on filing deadlines and the election itself. In the appellate brief, Attorney General Herbert Slatery argued that the injunction could “wreak electoral chaos,” specifically noting the fact that it had been issued on the eve of the candidate filing deadline. The majority opinion of the Supreme Court agreed with that point of view, taking the position that in ordering the injunction, the three judge panel “failed to
adequately consider the harm the injunction will have on election officials who are detrimentally impacted by the extension of the candidate filing deadline, as well as the public interest in ensuring orderly elections and avoiding voter confusion.” Thus, the Republican plan was upheld, with the only real impact being a modest extension in the candidate filing deadline.

Legislators Approve $52.8 Billion Budget

Last week, the General Assembly passed a $52.8 billion budget, which is the largest in state history and a significant bump for Tennessee standards from last year’s $42.6 billion. Most of Governor Lee’s budgetary proposals, issued initially in February and capped by a proposed budget amendment in late March, emerged largely unscathed from the legislative process. The budget will go into effect on July 1.

The final budget contains a $250 million investment into the state’s Rainy Day Fund, which serves as Tennessee’s savings account to withstand economic downturns, raising the fund to an all-time high level of $1.8 billion. Another highlight, which reflects Tennessee’s historically fiscally conservative approach, is the $1.3 billion of Tennessee’s $3 billion revenue surplus that is set aside for future use. The budget also uses the surplus for many one-time expenditures to prevent the growth of state government while still providing resources and relief to important initiatives. The budget includes upwards of $400 million in tax cuts – important in an election year – including breaks designed to help Tennesseans battle rising inflation. It includes a one-year slash to the $35 license plate registration fee beginning July 1 and an
elimination of the tax on food items in the month of August. Gov. Lee has previously stated, “As Americans see their cost-of-living skyrocket amid historic inflation, suspending the grocery tax is the most effective way to provide direct relief to every Tennessean. Our state has the ability to put dollars back in the pockets of hardworking Tennesseans, and I thank members of the General Assembly for their continued partnership in maintaining our fiscally conservative approach.” The professional privilege tax – a $400 tax to attorneys, doctors, financial advisors and lobbyists – was cut, but only for physicians, thereby leaving the other professions in the tax to pay the full amount. The budget also featured a $68
million cut for a sales tax reduction on broadband supplies as well as a $3 million cut for agricultural machinery and equipment.

Education was a top priority for this year’s budget, as it includes the largest increase in K-12 education funding in the history of Tennessee. With an additional $1 billion in K-12 funding, Tennessee is investing a total of $6.5 billion in K-12 education. This includes $750 million for the Tennessee Investment in Student Achievement Act (TISA), along with $125 million to increase teacher salaries. Improvements for higher education include $200 million for TCAT infrastructure improvements, $500 million to career and technical education grants for high school and middle school students, $66.3 million for a 4% salary increase within higher education, and $88 million for GIVE and HOPE scholarship expansions, bringing the scholarship award to $5,700 per year for juniors and seniors and $4,500 per year for freshman and
sophomores.

There was also the issue of a new domed stadium for Nashville, which emerged late in the closing weeks of session and required extensive negotiation and drawn out debate. In the end the House and Senate compromised and included a $500 million bond appropriation for a new facility, to be built on the East Bank of the Cumberland River in downtown Nashville, right next to Nissan Stadium. As is the case with most stadium proposals, the plan drew both passionate support and criticism, with opponents criticizing such a large taxpayer investment designed to largely benefit Nashville. Meanwhile, supporters maintain that a new stadium will dramatically transform the East Bank, especially paired with the new Oracle campus that is being built just north of the stadium. Supporters also argue that with Nashville’s emergence as a worldwide destination, a new stadium is necessary to host events such as Super Bowls, Final Fours, and the College Football Playoff. Early estimations project that the overall cost will fall somewhere in the $2 billion range, meaning that both the Titans organization and the City of Nashville will also need to contribute substantial sums to the effort.

Governor’s Education Funding Reform Passes Both House and Senate; Headed to Governor’s Desk for Signature

In what marked as perhaps the crowning legislative achievement of his first term in office, Governor Bill Lee’s K-12 education funding formula — known as the Tennessee Investment in Student Achievement (TISA) Act – received its final approval on the last day of session. The current formula stems from a decades-old Basic Education Program, which has been criticized as being outdated and not properly in line with students’ needs. The new funding plan is the culmination of months of engagement that began in October with numerous education stakeholders convening to provide input to various committees.

Beginning in the 2023-24 school year, the TISA formula will invest $9 billion in total education funding, including state and local funds, and includes $1 billion in new recurring state funds and $750 million in one-time state funds this year. Under the new funding formula, local education districts will receive more funding than they do under the current BEP formula, and the total local contribution will not increase for four more years. The exact increases will depend on the student population being served in each district.

The plan features a base funding rate of $6,860 per student, weighted for districts with higher need students, such as those who are economically disadvantaged or have unique learning needs. TISA also includes a direct funding component that provides additional dollars for high-impact programs, such as K-3 literacy efforts, CTE courses and public charter schools.

As for price tags, the TISA formula allocates $6.6 billion for base funding for every K-12 public school student; $1.8 billion in additional funding allocated based on weights to address specific student needs; $376 million in direct funding to support learning opportunities beyond the classroom, like tutoring; and $100 million in outcomes funding to be awarded based on student achievement. Under this formula, $125 million will be allocated to fund an increase in existing teacher salaries this fiscal year, which will carry over to the TISA base component for salaries moving forward. This particular funding change aims to address a major frustration with the current BEP formula, which makes it difficult to provide
additional funding allocations specifically for teacher salary increases. TISA also allocates additional education funding for fast-growing school districts with at least 2% growth from the school year prior. Fiscal capacity will be calculated at the county level using the current 50/50 split between the TACIR and University of Tennessee CEBER models. The state board will periodically monitor whether additional changes to the fiscal capacity calculation are needed. TISA also has reporting and district accountability requirements, including an annual report prepared by the Department of Education to be delivered to the General Assembly that details academic analysis, accountability report cards, local district TISA
review requests, and a review by the state Comptroller. Additionally, local school boards will have an opportunity to provide input on student achievement each school year and describe how the local budget and expenditures enable districts to progress student outcomes. In a statement released yesterday, Governor Lee said, “Today is a tremendous day for Tennessee students. After months of engagement with thousands of Tennesseans, our state will have a new,
innovative K-12 funding formula that improves public education by putting our kids first.”

Smith Resigns and Pleads Guilty; Multiple Members Subpoenaed to Appear Before Grand Jury

In March, around the high-water mark of legislative activity, Capitol Hill was rocked by the stunning resignation and subsequent plea bargain of Rep. Robin Smith (R-Hixon), who pled guilty to federal wire fraud charges. Smith, a former House Insurance Committee Chair, had seemingly been a target in an FBI investigation since January, 2021, when federal agents raided her Chattanooga-area home and her office in Nashville, along with a few other lawmakers and legislative staff.

Smith’s resignation and guilty plea stemmed from her involvement and cooperation with a political consulting firm that is alleged to have been fronted by a former Chief of Staff for then-Speaker Glen Casada. The staffer, Cade Cothren, was alleged to have been operating the firm under the assumed name and identity of “Matthew Phoenix” and accused of offering campaign consulting and mail services for legislators – even though no legislator actually met “Phoenix” in person — in addition to acting as an approved vendor for the General Assembly’s mailing service program. It is alleged that the firm profited from taxpayer funds.

While the charging document against Smith identifies both Casada and Cothren as conspirators in the scheme, neither has been charged to date. Two legislative staff members that had been put on paid leave as a result of the investigation were terminated in the days after the Smith plea bargain was announced.

In conjunction with her guilty plea, Smith said in a statement, “There are no excuses. I intend to cooperate fully as a witness with the federal government and do whatever I can to assist the government in this regard. I have resigned as Representative of the Tennessee House. I did so out of respect for the honor of Tennesseans, my commitment to public service over the last several decades, and of course, my Christian faith. I believe in forgiveness and I hope to earn yours over time.” In Smith’s plea deal, prosecutors agreed to recommend a lesser sentence if she “provided substantial assistance to the government in the investigation and prosecution of another person who has committed an offense,”
though the court is not bound to follow the prosecution’s recommendation.

On the heels of Smith’s resignation, a number of lawmakers were subpoenaed to appear before a federal grand jury as part of an ongoing FBI investigation into Capitol Hill corruption. The list included House Speaker Cameron Sexton (R-Crossville), who stated he was called to give factual information and is not a target of the investigation. Sexton added that he has been cooperating with federal agents since he won election to the Speaker’s post in the fall of 2019 following Casada’s resignation, but has declined to reveal details about his testimony.

Fifth District Drama Becomes National Story

Despite the court battle over state level maps, the epicenter of the redistricting issue has been the 5th Congressional District, which is currently held by a Democrat, Jim Cooper. The old 5th District, which was largely comprised of Nashville/Davidson County – frequently described as an island of blue in a sea of red – is now divided into three parts. A large portion of the county is now combined with strong Republican suburbs such as Williamson County (Brentwood; Franklin) and Wilson County (Mt. Juliet; Lebanon), along with rural and conservative counties such as Lewis, Maury, and Marshal. With these changes, Democrats will have a tall task gaining a Congressional seat in the foreseeable future, subject of course to further population growth in the Nashville metropolitan area. The potential consequence is
that Republicans could dilute partisan support from their districts and open the door for a competitive and possibly losing race for them, as has happened before in states like Georgia, specifically in the districts surrounding Atlanta.

The announcement that the 5th Congressional district would be broken up – which was quickly followed by Cooper’s announced retirement – set off a feeding frenzy among Republican hopefuls. Several threw their hats into the ring in the following weeks. Some had well-known track records, such as former House Speaker Beth Harwell and retired Army Reserve Gen. Kurt Winstead. Others were either newcomers or relative unknowns, such as former U.S. State Department spokeswoman Morgan Ortagus, businessman Baxter Lee, and music video producer Robby Starbuck. Ortagus was immediately thrust into the spotlight, receiving an endorsement from President Trump before she even formally
entered the race, and quickly became a target of critics. Some labeled her as a “carpetbagger” given her newcomer status in Nashville, a charge that gained steam following a radio interview where Ortagus could not identify the interstates that run through Nashville or identify Tennessee’s legendary former football coach, General Robert Neyland.

Newcomers Ortagus and Starbuck faced their first major hurdle when the legislature passed a bill that imposed residency requirements on congressional candidates that would have knocked both out of the race, but that bill was not signed into law by Gov. Lee prior to the filing deadline for candidates – perhaps intentionally — and could not apply retroactively. Then last week, in a move that has drawn national attention and may have far-reaching consequences, the Tennessee Republican Party State Executive Committee voted to bar Ortagus, Starbuck and Baxter Lee from the race on a technicality. The TNGOP deemed them ineligible to run as Republicans for failing to meet the eligibility requirement of
having voted in three of the last four statewide Republican primaries. With the three removals, Harwell, Winstead, and Maury County Mayor Andy Ogles are among the most prominent remaining candidates. Current state Senator Heidi Campbell (D-Nashville), has entered her name into the ring on the Democratside.

It remains to be seen whether there will be any fallout from the decision to bar Lee, Ortagus and Starbuck, but it is possible. The move has been widely criticized by Republicans at the national level, including Donald Trump, Jr. With Nashville being a leading contender for hosting the 2024 Republican National Convention, it is possible that the move will impact Nashville’s prospects. Indeed, South Carolina Senator Lindsey Graham said in a tweet, “I can’t imagine having the 2024 Republican National Convention in a state that would allow this type of corrupt politics.”

Lawmakers Pass Legislation Raising Nashville Hotel-Motel Tax

Current negotiations have the state contributing $500 million in bonds, the Titans paying $700 million, and the city of Nashville contributing $700 million. The $500 million in bonds was passed as part of the budget, and the Adams Family, owners of the Tennessee Titans, are essentially investing everything that they have to come up with their $700 million to cover their share. As a way to help foot the bill for Metro Nashville’s share of the new stadium, state and local lawmakers have passed a bill raising Nashville’s hotel-motel tax, a move that has been supported by the hospitality community. Rep. Bill Beck (D-Nashville) has been leading the charge in this effort, which would pave the way for Nashville’s Metro Council to raise the tax from 6% to 7%, a move which would likely generate an additional $10- $20 million in revenue. The tax increase would be largely paid for by tourists and work hand in hand with other funding streams, covering most if not all of Metro’s estimated $700 million contribution over an extended period of time.

Team officials hope to have renderings and designs by this fall, which will determine whether the stadium will feature a fixed roof or retractable roof along with the number of seats and a final estimate. The Titans are targeting an opening by the 2026 NFL season. The economic impact for a domed stadium is estimated at $30 billion over the next 20 to 30 years, according to a Finance and Administration report, with sales taxes in and around the stadium projected at $400 million.

“Truth in Sentencing” to Become State Law

As the session reached the closing weeks, a criminal justice initiative that was labeled “Truth in Sentencing” began to attract considerable attention. The bill provided that individuals convicted of a number of felonies serve 85% to 100% of their sentence before release. Criminals convicted of nine different offenses including first-degree murder, criminally negligent homicide, aggravated vehicular homicide, and especially aggravated kidnapping would have to serve 100% of their sentence undiminished by any sentence reduction credits for which the person is eligible or earns, although a
person convicted of one of these nine offenses could still earn credits that can be used for increased privileges, reduced security classification, or for any purpose other than the reduction of the sentence imposed by the court. While very popular with the legislature, the bill stirred strong concerns with Governor Lee and other criminal justice reform advocates, and there were rumors that the Governor might veto the measure. That led to discussion that the session might need to extend into May to give the legislature an opportunity to override any possible veto. In the end the sides were able to compromise and the bill gained successful passage and made it into the budget. There are still concerns
about the price tag, as the Tennessee Department of Correction estimate it will cost $96 million over the next decade.

Other High-Profile Issues

A number of high-profile bills saw their fate determined this session. Those include the following:
• COVID-19 Vaccination Policy: Status: Passed. Requires an employer with a mandatory COVID-19 vaccination policy to grant exemptions for medical or religious reasons to any who files a request.
• Campaign Finance: Status: Passed. Requires 501(c)4 groups to report any campaign expenses of more than $5,000 within 60 days of an election.
• Critical Infrastructure: Status: Passed. Preempts local governments from taking action that would prohibit fossil fuel pipeline development or expansion. It does not prohibit local officials from taking action when there’s a conflict with a program administered or approved by the state, including groundwater and drinking water protections.
• Name/Image/Likeness for College Athletes: Status: Passed. Revises last year’s NIL law to, among other things, allow coaches and other college officials to take a greater role in developing NIL opportunities for athletes, including direct coordination with entities that serve to benefit a university’s athletic program. Also allows for group licensing.
• Transgender Pronouns: Status: Passed. Allows public school teachers to refuse to “use a student’s preferred pronoun” if the pronoun is “not consistent with the student’s biological sex.”
• Transgender Athletes: Status: Passed. Bans transgender athletes at the college level from participating in women’s sports in Tennessee.
• Tobacco Use: Status: Passed. Allows any municipality in a county having a population of more than 180,000 to prohibit bars and restaurants from permitting smoking. The bill exempts cigar bars.

Looking Ahead: Lee Looks to Have Smooth Sailing for Second Term; Multiple New Faces in General Assembly Following Resignations and Retirements

With the April qualifying deadline in the rearview mirror, candidates will quickly move into campaign mode, raising money for the primary and general campaigns and in many cases becoming familiar with their newly-reconstituted districts. Many legislators have primary opponents, which heightens the sense of urgency.

One candidate that looks to have a more relaxing summer this time around is Governor Bill Lee, who finds himself in a very strong position as he prepares to campaign for a second term, and will not face a primary opponent. For Lee, that is a welcome departure from the hotly-contested 2018 gubernatorial primary, where Republican candidates engaged in a spirited campaign and shelled out a combined a combined $49 million. Lee served as a dark-horse candidate in that primary, taking on the likes of wellknown figures such as U.S. Rep. Diane Black, House Speaker Beth Harwell, and Knoxville entrepreneur Randy Boyd, only to mount a stirring rally in the final weeks to score a victory that was seemingly
improbable at the beginning of the summer.

Four years later, Lee enjoys high approval ratings, a track record of leadership based upon his handling of the pandemic, a strong economy with tax revenues well exceeding budgeted estimates, and the enviable status of leading one of the top states in the country for economic development. Lee can point to worldwide brands such as Amazon and Oracle now building major headquarters facilities in Nashville and bringing thousands of high-paying jobs, not to mention a Ford electric-truck plant being built outside of Memphis that will be unprecedented in its size and scope. Lee has amassed a large campaign war chest that will only grow larger in the coming months, prepping him for November’s general election, where he will take on the victor from a field of relatively-unknown and lightly-funded Democratic candidates. Those candidates include community leader Carnita Atwater, Nashville physician Dr. Jason Martin, and Memphis City Council member JB Smiley Jr. To illustrate the scope of the challenge facing the Democratic nominee, according to April 11 campaign finance disclosure reports, Lee has 56 times more cash in the bank than the rest of the candidates in the field.
Tennessee’s congressional delegation looks to be relatively unchanged, with the exception of the Fifth Congressional district discussed above. Look for the GOP to increase their 7-2 advantage in the delegation to 8-1, a margin that still causes longtime political observers to shake their heads, recalling a time not long ago when the Democrats were Tennessee’s dominant party. Indeed, in 1993 the Democrats had a strong legislative majority, enjoyed a 6-3 advantage in Tennessee’s Congressional delegation, and also occupied both U.S. Senate seats as well as the Governor’s mansion. By November, the GOP will likely have every one of those positions, with the exception of a lone Congressional seat,
and have long held a supermajority in the legislature.

For its part, the General Assembly heads into election season with an abnormally high number of members having announced that they will not be seeking reelection, either in pursuit of other positions or retirement from politics altogether. The number of departures from the legislature is believed to be unprecedented, and along with new district maps, will present an interesting campaign season, as well as more than a few new faces for the 113th General Assembly.

Current House Members not seeking reelection:
District 18: Eddie Mannis (R-Knoxville);
District 24: Mark Hall (R-Cleveland). Running for the state Senate.
District 32: Kent Calfee (R-Kingston).
District 35. Jerry Sexton (R-Bean Station).
District 52: Mike Stewart (D-Nashville).
District 59: Jason Potts (D-Nashville).
District 61: Brandon Ogles (R-Franklin).
District 63: Glen Casada (R-Franklin). Former Speaker; running for Williamson County Clerk.
District 67: Jason Hodges (D-Clarksville).
District 69: Michael Curcio (R-Dickson); Chairman, House Criminal Justice Committee.
District 71: David Byrd (R-Waynesboro).
District 75: Bruce Griffey (R-Paris). Running for circuit judge.
District 79: Curtis Halford (R-Dyer); Chairman, House Agriculture and Natural Resources Committee.
District 91: London Lamar (D-Memphis). Appointed to Senate vacancy and running for the upper chamber.

Current Senate members not seeking reelection:
District 9: Mike Bell (R-Riceville); Chairman, Senate Judiciary Committee.
District 19: Brenda Gilmore (D-Nashville).
District 31: Brian Kelsey (R-Germantown); Former Chairman, Senate Education Committee.

Bill Tracking Report Update: The Slate Gets Wiped Clean

Finally, a note about the bill tracking reports — since 2022 is the final year of a two-year legislative session, any bill that did not pass in the 112th General Assembly is dead and will not carry over to the 2023 session. The 2023 session will be the first year of the 113th General Assembly, and will begin with a clean legislative slate, therefore any initiative from 2022 that did not pass will need to be reintroduced at that time.

On behalf of the Tennessee Government Relations Team at Adams and Reese, it has been an honor and a privilege to serve you before the Tennessee General Assembly, and we wish you and yours good health and a relaxing remainder of spring and summer. For our part, we will quickly turn the page to focus on fundraising season and preparing for the 2023 legislative session, so we will look to stay in touch as we move into the summer months. Best regards.

School Funding Plan Advances in Both Chambers; Gov. Lee Plans to Propose a 30 Day Pause on Sales
Tax on Groceries

With committees continuing to close and the announcement of the Lee Administration’s budget
amendment, all indications are that the 2022 legislative session is now entering the glide path toward
conclusion. While there is still much to be done and a significant amount of legislation still in the
pipeline, the unveiling of the budget amendment often stands as the second major step – right behind
the closure of committees – that the end of session is on the horizon. With every passing day, Governor
Lee’s education funding plan and the state budget will draw increasing attention, and other legislation
will gradually ease into the background.
The other byproduct of committees closing is that more and more bills have seen their fate determined.
Any bill that is still parked in a closed committee is highly unlikely to move this year, and the same can
be said for any bill that is still parked in a committee and not on that committee’s final calendar. In the
past few weeks, the House Agriculture and Natural Resources Committee, House Insurance Committee,
House Education Instruction Committee, and Senate Education Committee have completed their work
and closed subject to the call of the Chair. A number of other committees are on final calendars,
including Senate Health, Senate State and Local, Senate Judiciary, the House Criminal Justice
Subcommittee, the House State Government Committee, and the House K-12 Subcommittee.

School Funding Plan Advances in Both Chambers

Governor Bill Lee’s K-12 education funding overhaul has started to clear critical hurdles, and its journey
through the legislative process is now underway. The legislation, which has been dubbed Tennessee
Investment in Student Achievement — or “TISA” for short — would allocate more than $9 billion in state
and local funds for education, including $1.8 billion for students with specific needs, such as those living
in substantial poverty or students with disabilities. The legislation (SB2396/HB2143) passed out of the
House K-12 Subcommittee on March 22nd after nearly three hours of testimony and questions. The
Senate Education Committee also advanced the bill a day later on the 23rd, along with five amendments
to the bill. The adjustments to the bill’s original language allude to the Lee administration having to
compromise on language with lawmakers and stakeholders in order to address increased feedback and
a growing number of concerns associated with the legislation. The bill moved on to the House Education
Administration on March 30th, and an additional five amendments were adopted. The legislation is set to
appear in the Senate Finance, Ways and Means Committee the week of April 4.

Gov. Lee Plans to Propose a 30 Day Pause on Sales Tax on Groceries

In the wake of the Governor’s State of the State address in February, the Lee Administration submitted a proposed initial budget that, while focused on conservative principles, did not feature any tax cuts. The messaging that followed indicated that tax cuts would be forthcoming in the budget amendment. The Lee Administration’s budget amendment was released on March 29th , and the details of the plan have emerged, including the Governor’s proposal to institute a month long pause to the state’s 4% tax on groceries. The proposal is being described as a direct response to nationwide inflation and viewed as a way to provide direct relief to Tennesseans. In 2020, Democrat lawmakers proposed a similar “food tax holiday” that was estimated to cost the state upwards of $100 million in revenue. That isn’t the only tax cut contained in the budget amendment, as it will also feature a reduction to the oft-criticized Professional Privilege Tax, which imposed a $400 per year tax on attorneys, physicians, financial planners, lobbyists and other professions. 

The amendment is far from the final product as it must then go through the legislative process and
endure the refinement and negotiation that process entails. The sole task assigned to the Legislature in
the state constitution is to pass the state’s budget, meaning that any legislation that is still pending at
the time the budget passes always runs the risk of having the legislature adjourn for the year before
taking final action on the legislation.

Looking Ahead

With more committee closures expected for next week, more and more legislation will either continue to move or meet its demise. That process has already begun as the volume of legislation before committees is significantly less than it was just two weeks ago. Given the amount of legislation that flowed through committees in the past few weeks, floor calendars are now at max capacity, and the Senate has now added a third floor session – to be held on Wednesday – to accommodate the volume.