Last week the Tennessee General Assembly approved  a $42.6 billion budget, a much more robust spending plan compared to last year’s “bare bones” budget of $39.45 billion. In formulating the spending plan, Governor Bill Lee and his administration worked with the stated goal of returning to pre-pandemic priorities while keeping government limited. The budget is fairly unique, given the focus on using one time funds for capital maintenance and infrastructure for a total of $238 million.

 As expected, the legislature placed its own stamp on the budget, making some alterations to the Governor’s original plan by slashing several proposals in half and increasing others. The Lee administration proposed allocating $200 million to broadband infrastructure, but the legislature slashed that amount to $100 million, with members claiming that the reduction could be made up from expected federal dollars. The legislature trimmed the Governor’s proposed tax free holiday on restaurants and grocery stores to $50 million, and cutting the holiday to one week instead of two. The Governor’s proposed $200 million for cities and counties was also cut in half; however, leaders said that by virtue of that cut local entities would receive the money sooner with no strings attached. Nashville Democrats expressed concerns of equity, with smaller counties expecting to receive more funds per resident than the larger counties in the state. 

 By cutting those three funds in half, legislators were able to deposit $250 million in one-time funds into the state pension funds for state employees, a move deemed to be wiser than a $60 million recurring deposit. Legislators also doubled the Governor’s proposed deposit in to the rainy day fund, taking the total in the fund to a record $1.55 billion. The legislative changes did not seem to dampen the Governor’s spirits however, as he issued a statement  immediately upon final passage that both praised the budget and thanked the General Assembly for its support.  

 Despite the legislative changes, the Governor did succeed in getting several of his original proposals funded. Legislators approved of $190 million in additional FastTrack economic development grants, $900 million for upgrades to state buildings, $30 million in state park maintenance and $250 million for the K-12 Mental Health Trust Fund. And while legislators eliminated the Governor’s line item proposal to reduce the professional privilege tax paid by professions such as physicians, lobbyists and attorneys by $100 dollars, legislative leaders expressed a resolve to repeal the tax in its entirety next year.  

Only a few pieces of non-administration legislation with large price tags received funding once the dust had settled. The fortunate few included: a measure to add more members to the Public Utility Commission, a bill to provide additional funds for graduate medical education, exemption of gun safes and safety devices from sales tax for one year, a measure to create the framework for receiving and spending funds from opioid settlements, Certificate of Need reform, and changes regarding Pharmacy Benefit Managers. 

 Overall, Tennessee’s FY21-22 budget reflects the state’s economic growth and stability in the past year. The state saw positive growth since April 2020, only one of seven states to experience gain. Tennessee was also able to actually grow its reserves instead of drawing them due to the pandemic. Lawmakers continue to credit the state’s conservative fiscal policies for its success.  The state also continues to attract top businesses, including the continued proliferation of Amazon distribution centers in rural counties, not to mention as the company’s twin office towers being constructed in downtown Nashville, an unexpected offshoot of Amazon’s decision to scrap its “HQ2” in New York. That facility alone will bring 5,000 jobs to the area.  Not to be outdone, the software giant Oracle announced in early April that it planned to invest $1.2 billion to build a major operations campus just north of downtown Nashville,  employing roughly 8,500 and amounting to the biggest economic development announcement in Tennessee history. Many believe that the Amazon and Oracle investments, following major investments by tech-heavy companies such as Philips Healthcare, will incentivize similar, tech-heavy companies to follow suit, making Nashville, one of the emerging technology centers in the country.   

Lawmakers Attempt Major Changes in Judicial System in Tennessee 

With Nashville becoming increasingly blue in recent years as the surrounding counties and a vast majority of the state remain deep red, a number of political dynamics have emerged as a byproduct of that friction. Perhaps nowhere is that more apparent than with the Chancery Courts of Davidson County, which by law are the trial courts for most cases involving the State of Tennessee. The judges presiding over those courts (referred to as Chancellors) have been subject to increasing scrutiny in recent years as a number of high profile decisions — including decisions on Governor Lee’s educational savings account bill, a voting registration bill, and a very prominent decision on absentee balloting — have gone against the state/administration/GOP positions. That led to a number of legislative proposals this year that targeted either a specific Chancellor or the system itself. 

The first salvo, a House resolution to remove Chancellor Ellen Lyle from the bench through a little-used provision in the state constitution, came largely as a result of Lyle’s rulings in August 2020 over election law issues. The effort attracted a great deal of attention from a number of judicial interests, including the Tennessee Bar Association, which strongly opposed the bill on the grounds that it would erode the balance of powers and have a chilling effect on an independent judiciary. The resolution subsequently died in the House Civil Justice Subcommittee, a surprising outcome given that the resolution had originally drawn some 70 co-sponsors. The vote to defeat the resolution was one of the more dramatic moments of session, as resolution sponsor Tim Rudd (R-Murfreesboro) angrily addressed the subcommittee following the vote, and subsequently confronted subcommittee chairman Andrew Farmer (R-Sevierville) in the hallway after the hearing had adjourned.

The defeat of the Lyle resolution by no means marked the end of the battle, however. In subsequent weeks a number of proposals emerged to change the means by which cases involving the state are handled, often through amendments to bills that initially had other purposes. Those proposals included a measure to have cases involving the state brought in the plaintiff’s home county and cases involving out of state plaintiffs brought in Sumner County, a predominantly Republican county just north of Nashville. There was also a measure to have a three judge panel appointed to hear cases challenging the validity of an act of the general assembly apportioning or redistricting state legislative or congressional districts, with two of the judges appointed by the Supreme Court, and coming from both of the remaining grand divisions from the one in which the case was filed.  While both of those measures passed the House but were shelved in the Senate — at least initially.  

A number of judicial-related initiatives took prominent roles in the closing days of session. One successful initiative provided that in cases where the state or an agency or official of the state is a party and a lower court grants an injunction or dissolves an injunction, the Attorney General has an immediate right of appeal of the lower court’s non-final ruling rather than having to wait until granted permission by the trial court. The purpose of the bill is to expedite the escalation of such cases into the appellate court system if needed, and can provide the state with quick relief as to lower court election law rulings. Proponents argued the bill was necessary since under current law, appeals of non-final decisions can only be done with the permission of the trial court, which can potentially tie up and/or delay matters of great importance to the state.

Then there was the matter of how to handle trial court-level cases concerning the state, which endured until the closing moments of session. The Senate proposed a concept that creates a statewide three-judge panel of chancery court judges to hear cases involving the state, with judges initially appointed by the governor and subsequently subject to statewide, partisan elections.  That concept, which was heavily pushed by  Lt. Governor Randy McNally (R-Oak Ridge) and Senate Judiciary Committee Chairman Mike Bell (R-Riceville), was based on the premise that Davidson County judges – and the voters that elect them – should not be permitted to be the trial court for matters affecting the state. As Sen. Bell asked rhetorically in committee, “why should judges who are elected by the most liberal constituency in the state…why should they be the ones deciding cases that affect the state in general?” 

Meanwhile the House had its own ideas. In its version of the same bill, which also passed on the closing day, opted against the statewide chancery and instead created a Court of Special Appeals to handle the narrow band of cases at the appellate court level. That court would be comprised of three judges, appointed by the governor, that would be subject to a statewide retention election, just as is the case with other appellate judges. With differing versions of the bill and neither chamber willing to budge, the respective speakers appointed a conference committee in the final hours of session to try to iron out the differences, and the compromise proved to be the last bill taken up by the General Assembly in 2021. In the end, the conference committee crafted a measure that created a three judge panel of trial court judges, two of whom are to be appointed by the Supreme Court and must hail from the other two grand divisions, to handle constitutional challenges and declaratory/injunctive claims against the state, a department/agency of the state, and/or one of its officers. The measure, which combined a number of elements of previously unsuccessful bills – including the venue for out of state plaintiffs to be held in Sumner County – passed the House 67-22-1 and the Senate 27-2 just minutes before adjournment.  Democrats in both chambers railed against the measure, opposing both the drastic changes to the current procedure for handling cases and the last-second nature of those changes. 

Certificate of Need Reform Reaches Finish Line 

After grinding to a halt on the figurative one yard line in 2020 due to a last-minute deadlock between the two chambers, Certificate of Need reform finally crossed the goal line this year, constituting a significant step  in health care in Tennessee. The soon-to-be-enacted law will strive to remove barriers to competition, improve access to care, promote consumerism and improve rural health. It changes the Certificate of Need process by eliminating the economic feasibility requirement for projects, expediting approval from 135 to 60 days, limiting CON opposition to competitors within a 35-mile radius, eliminating frivolous appeals by competitors, and requiring CON competitors to disclose grounds for opposition before the application is heard before the Board of the Health Services and Development Agency. It was sponsored by Sen. Shane Reeves (R-Murfreesboro) and Rep. Clark Boyd (R-Lebanon). 

The bill also provides exemptions for economically distressed counties without a hospital and further provides that mental health hospitals can no longer be subject to CON regulation. Moreover, non-pediatric MRI services, PET scan services, and outpatient diagnostic centers (ODCs) would no longer be subject to CON regulation in counties with a population in excess of 175,000 (Shelby, Davidson, Hamilton, Rutherford, Williamson, Sumner, Montgomery, and Knox), and existing facilities would be able to increase and redistribute their acute, psychiatric, and rehabilitation beds without CON regulation. 

Legislators Pass Key Education Legislation in Special Session 

Following the organizational week of session in mid-January, Governor Lee called a special session to address education matters that arose from the COVID-19 pandemic. Lawmakers made quick work, passing legislation to address the learning loss students have experienced since March 2020 by creating summer camps to aid students below proficiency in language arts and math, as well as establishing a tutoring program for the districts and that requires third graders to be held back if the student is not reading on grade level. Legislators also passed phonic-based reading and instruction legislation, requiring districts to provide foundational literacy skills instruction, provide reading intervention and administer reading screeners for students in kindergarten through third grade.

In the final major piece of special-session legislation, lawmakers ensured that teachers, students, and districts would not be held accountable for standardized testing results. At the end of the 2019-20 school year, Governor Lee enacted a hold harmless provision to ensure there are no negative consequences associated with poor student assessments, and legislation passed during the special session extends that to include the current school year. The General Assembly also  approved legislation to raise teacher salaries by  4%.

 Once the regular session got underway, the General Assembly continued to address educational concerns that arose from the pandemic. Lawmakers passed a bill early in session that gave the governor the ability to bring students back to the classroom, bypassing the local school boards. Another successful measure ensured that  local education agencies do not receive less funding from lower student attendance that occurred from the pandemic; however, they would receive more funds if they experienced growth in student attendance. 

Medical Labs to See Relaxed Employee Requirements 

Medical laboratories in Tennessee should find it easier to recruit in the near future, following passage of a bill to increase the amount of lab workers within the state. House Bill 226 amends the Tennessee Medical Laboratory Act for pharmacies and private laboratories, and now only requires workers to have a bachelor’s degree, with the receipt of additional training onsite. The pandemic has illuminated the importance of fully employed laboratories within the state, as well as the staffing challenges the labs face.  The legislation received widespread support from labs within the state, which sees the legislation as a vehicle to help them recruit more personnel.  

Governor Lee Achieves Goal of Key Criminal Justice Reform

Fulfilling one of his top priorities dating back to his gubernatorial campaign of 2017-18,  Governor Lee was able to pass substantial criminal justice reform this year with the passage of two major pieces of reform legislation. The Governor has long advocated justice reform, calling upon his experiences performing volunteer work for re-entry nonprofits prior to entering the political world.  While the issue has been a front-burner priority for the Governor since first taking office, many plans were put on hold due to initial hesitancy by key members of the General Assembly, and later because of the pandemic. This year the Governor was able to pass two major pieces of legislation, both of which won broad support.  

The first bill, which offers alternatives to incarceration, aims to use best practices for community supervision and focus on community resources rather than keeping non-violent felons in jail. Eligibility for recovery courts such as veteran courts, mental health courts and drug courts will be expanded for those charged for nonviolent offenses. Probation times will be shortened to eight years instead of ten for those with a single conviction. It also prevents a technical violation from being the sole reason for probation being revoked. The bill aims to generate more consistency among judges in the state and to lower incarceration rates and costs. 

The second piece of legislation, the Reentry Success Act of 2021, focuses on inmates as they leave prison to ensure a successful reentry to civilian life. Currently about half of Tennessee felons will return to prison within three years. The legislation ensures that following their first year after release, non-violent or low level felons will be supervised by an employee of the Tennessee Department of Corrections. Inmates would also be able to work towards completing their pre-release conditions while still in jail and will ensure their release on their release date. It also entices employers to hire those recently released from prison by offering immunity on negligence lawsuits. 

Opioid Settlement Fund Legislation Succeeds  

One of the final pieces of legislation the General Assembly considered was the creation of an opioid abatement fund and council to oversee funds once settlement agreements are reach with four opioid-related entities. The fund creates a structure for both receiving and determining how those funds will be spent. Tennessee Attorney General Herbert Slatery endorsed the bill and has been a major supporter, often appearing in committee to answer questions from the legislators. Amerisource, McKesson, Cardinal, and Johnson & Johnson are the only entities to have their settlement agreements go into the fund, but funds received from the Purdue Pharma bankruptcy will flow into it as well. The state and counties will split the funds 60/40, similar to plan created by Kansas. The subdivisions and state would each receive 15% of the settlement with no strings attached, but the remainder would have to be used for abatement issues. 

An abatement council would also be created, made up of 15 members, 4 each appointed by the Governor, Senate, and House, 2 selected by the counties and 1 from the cities. The council’s main duty is to ensure the funds would go towards an opioid related abatement programs such as treatment, education, drug courts, and numerous data-evidence based programs. Medication Assisted Treatment (MAT) will be monitored carefully to ensure that patients are not swapping one drug addiction for another.

Permitless Carry Passes After Being Initially Halted Due to Pandemic 

While a number of  2020 legislative initiatives that were halted due to the pandemic achieved passage in 2021, the so-called “Permitless Carry” bill may have been the most prominent. A major priority of Governor Lee in both years, the bill permits Tennesseans 21 and older, and members of the military 18 and older,  to obtain and carry a handgun without a permit. Felons, those convicted of domestic violence offenses, people convicted of a DUI or stalking and people who have been committed by the court to a mental institution are not covered by the legislation. The bill also increases punishment for theft of a firearm to a felony and prohibits convicted felons of obtaining a firearm from early release. With passage, Tennessee now joins 18 other states with similar laws regarding permits.  

While the measure enjoyed widespread Republican support, it was not a party line vote, as a handful of Republican members opposed the legislation. And while the bill received major support from the NRA, some gun rights activists criticized the bill for not going far enough, arguing that it should also apply to long guns and should cover Tennesseans 18 and older. Supporters also promised this would not be the end for the push for gun rights, claiming they plan to bring more legislation in the future to apply to all firearms. 

Various law enforcement groups, such as The Tennessee’s Sheriffs’ Association and the Tennessee Bureau of Investigation opposed the legislation, claiming it would increase the rate of crime in the state. 

The bill is expected to cost the state $20 million in lost revenues from permit fees, as well as an expected increase for incarceration costs. Nevertheless, lawmakers fully funded the cost of the bill in the FY21-22 budget.  

Major Legislation Succeeds

2021 was a good year for high profile bills, as a number of bills that attracted considerable media attention proved successful in the end:  

• Transgender Athletes: Status: Passed.  Student athletes in middle and high school will be required to play on the sport team of the sex at birth. 
• Nissan Stadium Tax Cut: Status: Passed. The Tennessee Titans will be able to keep sales tax revenue from Nissan Stadium for future developments and renovations.
• Knoxville Minor League Ball Park: Status: Passed. Legislators approved $13.5 million for a downtown Knoxville ballpark.
• Vaccine Passport Ban: Status: Passed. State and local governments will be barred from requiring COVID-19 vaccines.
• College Athlete Compensation; Name/Image/Likeness. Status: Passed. Beginning in 2022, athletes can begin accepting compensation for the use of the athlete’s name, image, or likeness.
• Medical Marijuana. Status: Passed, With a Caveat. After legislation that would allow medical marijuana for several conditions originally failed, legislators passed a measure that allows medical marijuana for several conditions once the Federal Government declassifies marijuana as a schedule 1 drug.

• Unemployment Benefits: Status: Passed. Those receiving unemployment benefits will only receive them for 12 weeks instead of 26 beginning in December 2023, those funds will go to the unemployment trust fund instead.

Looking Ahead: Fundraising, Reelection Prep, Redistricting and Possible Special Session Loom on Horizon

The conclusion of the legislative session signals the kickoff of the second season in Tennessee politics, fundraising season. The April, 2022 qualifying deadline is seared into the mind of all incumbents, who will look to bolster their political war chests this summer and fall to ward off any potential challengers for the 2022 primary elections. Lawmakers also hope to have a relatively uneventful “non-election” off season, unlike the 2019 offseason, which initially promised to be somewhat quiet but eventually saw a very unexpected and dramatic change in House Speakers by end of summer.  

The bolstering of war chests will not be limited to the legislative branch. Look for Governor Bill Lee to both increase his fundraising efforts and take strategic steps to both prepare for his 2022 reelection campaign. Lee remains popular in Tennessee despite being dealt with the historically tough hand of steering the state through a pandemic, and it is difficult to imagine the Democrats being able to muster any candidate that could pose a realistic challenge to Lee. Indeed, the Governor’s proclamation last week that he was lifting all restrictions as COVID-19 was no longer a public health emergency in Tennessee was met with widespread praise, especially in Republican circles. Nevertheless, the Governor is not likely to take reelection for granted, and is expected to take an even more public role across the state as the calendar moves into the summer.

2021 is also a redistricting year in Tennessee, and that process will garner more and more interest as the official census numbers are known this fall. District lines are redrawn every ten years according to population and must not discriminate on the basis of race and ethnicity. In Tennessee, the congressional and state legislative district boundaries are set by the state legislature, and given the supermajority that the GOP currently enjoys, look for the district lines to remain as favorable to Republicans as possible. Redistricting must be completed before the beginning of the 2022 legislative cycle.     

With Tennessee set to receive over $6 billion in COVID-19 relief funds from the federal government later this year, there has been hallway chatter about the possibility of a special session in late summer/early fall to provide the legislature with an opportunity to give input as to how those funds are to be spent. That could foreshadow a bit of friction between the executive and legislative branches, as often the two can differ as to precisely how funds need to be spent, and the Lee administration may believe it does not need legislative input in that regard. In any event, a possible special session regarding COVID-19 money – including the debate over whether it is necessary – could provide some additional political theatre in Tennessee this summer.

As you review your attached bill tracking report and take stock of the events of the 2021 session, please recall that since 2021 is the first year of the two year 112^thGeneral Assembly, any bill that was not voted down in committee or on the floor is technically still able to pick up where it left off and move forward in the 2022 session. That said, look for lawmakers to replicate or even improve on the volume of bills filed in 2022 as compared to 2021. Following the adjournment of the 2022 session, the slate will be wiped clean and the process will begin anew for the 113^th General Assembly when it convenes in January, 2023.   

Finally, on a somber note, our thoughts are with two legislators that have faced health issues this session. Representative Mike Carter (R-Ootlewah), Chairman of the House Civil Justice Committee, is currently engaged in a difficult battle with advanced pancreatic cancer and has missed a majority of session due to treatment. Representative David Byrd (R- Waynesboro) has also been absent this session as he continues to suffer complications stemming from a COVID-19 diagnosis in December.   

On behalf of the Tennessee government relations team at Adams and Reese, it has been a privilege representing your interests at the Tennessee state legislature. Have a safe and enjoyable summer.

 Declaring that COVID-19 is no longer a public health emergency in Tennessee, Governor Lee announced Tuesday that all statewide public health orders would end on May 31. The Governor made the announcements in conjunction with his issuance of Executive Order 80, which among other things removes the local authority of county mayors in 89 of Tennessee’s 95 counties from being able to require face coverings.  It also extends deregulatory provisions, maintains federal funding, and provides that local health clinics will offer a walk-up vaccine option.  In addition, the Executive Order also retires the “Tennessee Pledge” guidelines for businesses operating during the pandemic.   

Governor Lee has also requested that counties with independent health departments – Shelby, Madison, Davidson, Hamilton, Knox and Sullivan – lift all remaining business restrictions, mask requirements, and other measures no later than May 30.

“COVID-19 is now a managed public health issue in Tennessee and no longer a statewide public health emergency,” said Lee. “As Tennesseans continue to get vaccinated, it’s time to lift remaining local restrictions, focus on economic recovery and get back to business in Tennessee.”

Legislators Approve Bill to Prevent Execution of Disabled Persons

 Both the House and Senate passed a measure this week that would allow death row inmates to appeal their sentence on intellectual disability grounds, and allow people to claim in court that they have an intellectual disability. The bill eliminates a procedural technicality and modernizes the definition of intellectual disability in Tennessee code. It aligns Tennessee with a U. S. Supreme Court ruling in 2002 which deemed that executing a person with an intellectual disability is against the Eighth Amendment. It also reflects a lengthy push for legislation allowing courts to examine the intellectual competency of convicted inmates. The bill now heads to Governor Lee’s desk for signature.

To-Go Alcohol to Continue under Passed Legislation

 To-go alcohol will continue to be permitted for two years, extending a provision that Governor Lee passed during the pandemic. Restaurants that are licensed to sell liquor can continue to offer curbside alcohol until July 2023. It is expected to generate $4.7 million in state tax revenue and $3 million the following year. Drinks are required to be sold with food and can only be for one serving of alcohol. Supporters of the legislation believe this will aid small businesses and help restaurants continue to recover from the effects of the pandemic. It passed the House by a 70-21 margin and prevailed 23-4 in the Senate. 

Medical Marijuana Legislation Fails in House Committee

 The push for medical marijuana in the legislature failed by a single vote in the House Criminal Justice committee Tuesday. The legislation had made substantial progress through the legislature, passing all the necessary Senate committees as well as the House Health Committee, but still faced challenges with House Republicans due to marijuana’s status as a schedule 1 drug, which would result in Tennessee conflicting with federal law. To that end, Governor Lee has indicated he will oppose medical marijuana until it is deemed legal by the Federal Drug Enforcement Agency.

The legislation would have decriminalized possession of non-smokable forms of marijuana for 11 conditions. Medical marijuana would not be able to be sold in the state and doctors would be prohibited from prescribing it to their patients. Law enforcement and prosecutors opposed the legislation, claiming it would be more difficult to know who is legally in possession of medical marijuana.

Looking Ahead

 While adjournment is expected to take place next week, several major pieces of legislation remain, including Certificate of Need reform, the creation of a statewide chancery court, and the opioid abatement settlement legislation.  While each measure appears likely to pass at this point, the last several days of any legislative session can be unpredictable at best.  Recent sessions have frequently been marked by high tensions and bickering between the two chambers, although that dynamic has yet to appear this session. 

 Following adjournment we will send our year-in-review, which is a high-level summary of the political landscape of the session, the outcome of major legislation, and a look ahead to the off season.  In the meantime, have a safe and pleasant weekend.  

In anticipation of the state reaching settlements with four major opioid-related entities, two legislative committees approved legislation this week that will help create a structure for both receiving those funds and determining how they will be spent.  The legislation, which has the endorsement of Attorney General Herbert Slatery, would set up an opioid abatement fund, create an opioid abatement council to oversee those funds, and allow the state to enter into settlement agreements with Amerisource, McKesson, Cardinal, and Johnson & Johnson.  The fund would also be the repository of funds from the Purdue Pharma bankruptcy. The legislation proposes a 60/40 split between the state and counties, respectively, and is patterned after the structure that the state of Kansas has established.  As part of the 60/40 split, the subdivisions and state would each receive 15% of the settlement with no strings attached, but the remainder would have to be used for abatement issues.

The legislation contemplates an abatement council that would have 15 members, with four each appointed by the Governor, Senate, and House, two selected by the counties and one from the cities. The council would oversee the funds and ensure the funds were going to opioid related abatement programs such as treatment, education, drug courts, and numerous data-evidence based programs. The use of the funds must be on the pre-approved list or approved by the council. Medication Assisted Treatment (MAT) will be monitored carefully and guidelines will be established by the council to see the effect it has on patients, to ensure that patients are not simply swapping one drug addiction with another. Attorney General Slatery appeared in committee this week to answer questions and show support.

Creation of New Chancery Court Legislation Advances 

While a number of legislators have offered proposals this session to change the courts and judges that deliberate cases where the state is a party – including cases that deal with election law and redistricting issues as well as those concerning the constitutionality of a state statute or legislative action — one bill emerged this week with the support of Lt. Governor Randy McNally.  That will create a statewide chancery court that would obtain jurisdiction on constitutional challenges and other types of cases involving the state, instead of every decision at the trial court level being decided by Davidson County (Nashville) judges, as has traditionally been the practice. Under the bill, the governor would appoint three chancellors, one from each grand division, and those judges would subsequently stand for election. In presenting the bill to the Senate Judiciary Committee, Senate sponsor Mike Bell (R- Riceville) – who also chairs the committee — asked rhetorically,  “why should judges who are elected by the most liberal constituency in the state… why should they be the ones deciding cases that affect the state in general?”

The legislation states that the statewide chancery court would have original jurisdiction in a number of situations related to the state, including constitutional challenges, state statues, executive orders, administrative rules or regulations, as well as situations where the state is a party and the plaintiff is seeking declaratory orders or injunctive relief.

This bill, and others like it, mirrors the frustration felt by some in state government over recent rulings from Davidson County judges on state-related issues, including some high-profile election law rulings last summer. Those rulings particularly attracted the ire of Republican legislators, as evidenced by a GOP-led House resolution to have one Davidson County judge removed from office. While that resolution died in subcommittee, it did not stem the tide of attempts to change how lower court cases involving the state are handled.  With Nashville growing more Democratic, and having a position akin to an island of blue surrounded by a sea of Republican red in most other counties of the state, the judges in Davidson County have been increasingly under the microscope at the General Assembly. 

The bill moves on to Senate Finance, Ways and Means and House Finance, Ways and & Means Subcommittee next week.

 Solicitor General Legislation Halted for the Year 

Legislation that would move the solicitor general position under the General Assembly and have that position defend the constitutionality of state laws was postponed until 2022. The position currently is housed under the Attorney General’s office, which raised concerns the move could violate separation of powers. Tennessee is the only state that has their Supreme Court appoint their Attorney General, an issue for the Senate sponsor, Paul Bailey (R- Sparta), who argued that he wants someone to represent the legislative branch and possibly work on their behalf when the legislature is at odds with the governor.

The Attorney General’s office said the legislation could lead to inefficiency for the state’s legal interests. After a conversation with the Attorney General’s office, Bailey agreed to delay the bill until next year to discuss solutions on the issue, and expressed a hope that a separate position can be carved out to serve as the legislature’s legal counsel.

Tennessee Unemployment Structure to be Cut with Legislation 

After a change of Senate sponsors, the Senate Commerce committee approved legislation to reduce from 26 to 12 the maximum number of weeks a Tennessean can collect unemployment. Senator Art Swann (R- Maryville), the original sponsor, stated that he no longer wanted to sponsor the legislation once the amendment was crafted to drop the number of weeks to 12, a figure that Swann criticized as being too low. Jon Lundberg (R- Bristol) took over the legislation for the Senate while Rep. Kevin Vaughan (R- Collierville) is pushing it forward in the House.

The legislation intends to replenish the state’s unemployment trust fund balance, which has been below the federally recommended level for the past few years. It would increase the weekly unemployment payments up to $50. The shift to 12 weeks would not begin until July 2023, but would make Tennessee have the shortest length of time for an unemployed person to receive benefits.

The legislation comes from House Speaker Cameron Sexton (R- Crossville), and it appears that the measure now enjoys widespread support among legislative leadership.  It will be heard in Senate Finance, Ways and Means next week and is currently stationed in a “behind the budget” holding pattern in the House, meaning it must obtain budgetary funding in order to move forward.   

Looking Ahead 

            As the 112^th General Assembly heads toward what could be the final week of the 2021 session, one can expect a busy few days. Budget negotiations will continue through the weekend, and the budget could potentially be on the chamber floors as early as Tuesday if things go smoothly.  Then there are the scores of remaining bills that need handling unrelated to the budget. All bets are off once the budget is passed however, as once it has completed its only constitutionally required duty, the legislature is known to adjourn with numerous bills still in the pipeline.   

           Stay tuned, and do not hesitate to contact us if you have any questions or concerns. Have a great weekend.

Criminal Justice Reforms, Compensation

for College Athletes Nearing Goal Line

Governor Lee Signs Permitless Carry Legislation into Law

Yesterday, Governor Lee signed legislation into law to allow permitless carry for open and concealed carrying of handguns, making Tennessee the 19^th state to become a “constitutional carry” state. The NRA-backed law will allow persons 21 and older and military members 18 and older to carry handguns without a permit, but it does not apply to long guns, which resulted in some gun rights activists criticizing the law as not going far enough. On the other side, some law enforcement officials expressed concerns of crime increasing as a result of the new law, and also argued that the law would make officers more vulnerable.  

The bill does expand the list of people that were not allowed to have a permit in the first place – such as felons and people with domestic violence offenses – and the new permitless carry right will not expand to persons with a stalking convictions, DUI convictions, or persons that have been committed by a court to a mental institution.   

The bill will take effect on July 1. While it is projected to cost the state $20 million, Republican leaders argue it could cost the state less.

Lee Voices Opposition to Vaccine Passports, Public Universities Will Not Require Vaccination 

This week Governor Bill Lee joined the quickly growing ranks of Republican officials that oppose the concept of “vaccine passports,” which in theory are a requirement of showing proof of vaccination to be able to travel or access businesses.  While no governmental entity in Tennessee has adopted the concept of a vaccine passport, the opposition to them has become a popular GOP policy position.  In a statement to reporters, Governor Lee said “I think vaccine passports are a bad idea. I do not believe governments should impose vaccine requirements or mandates in any way and I’m working with the Legislature to support legislation that backs that up.” The issue of vaccine passports arose too late in session to have legislation initially aimed at the topic, but the Lee administration and lawmakers have managed to amend existing legislation to address the concept.  SB858 (Bowling; R-Tullahoma) / HB 575 (Ragan; R-Oak Ridge), as amended by the Lee administration, provides that government cannot force private businesses to require vaccine passports as a condition to entry, leaving the decision on the issue of masks and proof of vaccine to the businesses themselves.  The legislation also reduces the power of county health boards by making them advisory only, as opposed to being allowed to act unilaterally.  The measure passed the House Health Subcommittee and Senate Commerce & Labor Committee this week. It will most likely be discussed on the Senate floor next week.

          The Governor also confirmed his opposition this week to the concept of public universities requiring students to receive the COVID-19 vaccine in order to attend classes.  While the University of Tennessee system initially indicated that it would require students to be vaccinated, it has since backed off of that position and now strongly encourages students to receive the vaccine, but nothing more.  Governor Lee also made it clear that while he opposed a vaccine mandate for public institutions, private universities – such as Vanderbilt, Belmont and Lipscomb — were free to make their own policies in that regard.   “I think that private institutions have decisions they make on their own. I think government agencies should not have vaccine requirements.”

Senate Committee Approves Legislation to Reform Life-Sentence Law

This week the Senate Judiciary Committee advanced bipartisan legislation that aims to dramatically reduce the time required of a person sentenced to life with the possibility of parole. Under current law, a person sentenced to life with the possibility of parole is not considered for release until they served 51 years in prison, which as proponents argue, essentially leads to life without parole. Moreover, Tennessee’s life-sentence law is double the national average. Bill sponsor Janice Bowling (R- Tullahoma), wants to reduce the sentence to 25 years, the same period of time that was used for this sentence prior to the 1994 Crime Bill. Senator Bowling noted those who received this sentencing were typically younger than 25 years old. Supporters of the legislation, who spoke in front of the committee, noted  that young people that receive this sentencing are prepared to return to society sooner rather than later, but due to the long period in jail, are unable to prove themselves as proper citizens. Although Governor Lee has touted goals of criminal justice reform, this legislation is not a part of his legislative package.

 Tax-Exemption Legislation Passes in House

Monday evening the House unanimously passed legislation to exempt certain COVID-19 related relief payments from the Tennessee excise tax. The deduction would exempt COVID-19 relief payments received between March 1, 2020, and Dec. 31, 2021, from the TN Business Relief Program, TN Supplemental Employer Recovery Grant Program, Coronavirus Agriculture and Forestry Business Fund, Hospital Staffing Assistance Program, Emergency Medical Services Ambulance Assistance Program, and the TN Small and Rural Hospital Readiness Grants Program.  This legislation is being proposed by Governor Lee in an effort to tackle the daunting economic impact the pandemic has had on the state, with proponents of the legislation arguing that businesses should not be taxed on the funds that they need to stay in operation. 

Looking Ahead  

Next week the Finance Committees will hear from the Department of Finance & Administration Commissioner Butch Eley, as he unveils Governor Lee’s proposed supplemental budget.  Meanwhile, back-room negotiations over potential budget issues are well underway, concerning potential changes to taxes such as the professional privilege tax on doctors, lawyers, financial advisors and other professions,  as well the aviation fuel tax. All of the final decisions on those and a myriad of other issues will emerge in the next few weeks. 

Have a great weekend.  

“Constitutional Carry” Passes House; Advances to Governor Lee for Signature

One of the most heavily-discussed pieces of legislation this session has now passed the House and is headed to Governor Lee’s desk for signature.  The “Constitutional Carry” bill, as it is often called, allows adults ages 20 and older to carry open or concealed handguns without a permit, and allows members of the military to do the same provided they are 18 or older.  Currently, gun owners have to take a training course before carrying a handgun. 

The bill has been a centerpiece of Governor Lee’s legislative package for 2021, and it passed easily in the Republican-controlled House this week, by a 64-29 margin. Majority Leader William Lamberth (R-Portland) called the vote “a massive step forward for freedom in our great state.”  Tennessee issued 145,000 permits in 2020.   

Governor Lee Brings Back Push for Mental Health Trust Fund for Students

 This week, Governor Lee reintroduced a proposal for a $250 million fund for mental health services for school-aged children in Tennessee. The Mental Health Trust Fund would support direct clinical services in schools, mental health awareness, suicide prevention and other related concerns. The fund was originally proposed in the Governor’s 2020-21 budget, but was put on pause amid the COVID-19 pandemic. Governor Lee says the pandemic makes mental health “important now more than ever. The challenges of this past year have complicated those mental health challenges for those kids.”

One in five children currently receive a mental health diagnosis, with most students receiving services through their school. The fund will utilize state dollars, but it is unclear when the schools will receive the funding.

Businesses to Decide which Health Guidelines to Follow under Passed Legislation

The House unanimously passed legislation Monday evening that allows businesses to decide whether to follow health guidelines issued by either state or local authorities during a pandemic. The “Business Fairness Act,” which was championed by the National Federation of Independent Businesses (NFIB), still requires businesses to follow public health guidelines, but allows them to choose between the state or local guidelines, which sometimes differed, with the state guidelines tending to be somewhat less stringent.  The impetus for the bill arose during the pandemic, when Governor Lee lifted certain statewide orders for the 89 counties that operated under the authority of the Tennessee Department of Health, while businesses in the state’s six largest counties – with their own, independently operating public health departments — were forced to continue to operate under requirements that were unique to those counties, which tended to be more restrictive. 

The bill also aims to protect small businesses and ensure they are able to open if larger businesses are allowed to open. In the spring of 2020, Governor Lee temporarily required “nonessential” businesses to shut down due to the pandemic.  Proponents of the legislation argue that tended to affect smaller retail stores, while the nature of operations of some larger stores such as Target and Walmart placed them into the “essential” category, thus allowing them to remain open. Once the Governor lifted those restrictions, the proponents argue, businesses in some counties were allowed to reopen while certain businesses in the large counties with their own health departments were often required to remain closed.   

The legislation passed unanimously in both chambers and heads to Governor Lee for signature.

Legislation to Prohibit Government from Requiring Vaccine Advances

With the hallway outside its meeting room clogged with anti-vaccine protesters —  a first for this Covid-19 legislative session — the Senate Health & Welfare Committee advanced legislation yesterday to prohibit governments from requiring Tennesseans to receive the COVID-19 vaccine. Senator Janice Bowling (R- Tullahoma) presented the bill, stating people are afraid of the government and they have a right to be. The legislation would prohibit the Governor from issuing executive orders, as well as prohibit departments and agencies from issuing rules mandating that residents receive the COVID-19 vaccine. Hospitals, long-term facilities and public universities controlled by the state will be excluded.

Despite clearing an important hurdle in the Senate, the legislation still has work to do in the House, where it was moved to the final calendar of the House Health Committee due to concerns over which government entities should be allowed to require vaccines.

More Committees Targeting Closure

 Several committees and subcommittees officially closed this week, with one of the most significant committees in the entire legislature – Senate Commerce – targeting the end of next week to complete its work for the year.  Observers will note that while a number of committees are on what are referenced as their “final calendar,” it may take multiple meetings over days or weeks to actually complete that work. Along those lines, Senate Judiciary will begin to work through its final calendar next week, but may not complete its work until the week of April 12.  It is also important to note that even a closed committee is subject to be reopened at the call of the Chair, which is a phenomenon that is frequently observed in the closing days of session. 

With so many committees on final calendars, please take a close look at your bill tracking report.  Any bill that has not begun to move through the legislative process is highly unlikely to move at all this year, absent unusual circumstances.  Please note however that as 2021 is the first year of a two-year General Assembly, any bill that does not make it into law this year is still subject to be revived in 2022 as long as it has not been voted down in committee.

As always, please do not hesitate to reach out to us if you have any questions. Have a safe and joyous Easter weekend.  

Legislation to Remove Chancellor Lyle Fails

A House Resolution to initiate the process of removing Davidson County Chancellor Ellen Hobbs Lyle from the bench failed in the House Civil Justice Subcommittee this week, following lengthy testimony by three members of the legal community who expressed concerns about the impact the resolution would have on the concepts of separation of powers, and a fair and impartial judiciary.  Sponsor Tim Rudd (R-Murfreesboro) initially attempted to defer the legislation to the last calendar, but following the testimony the question was called, and the “no” votes prevailed on a voice vote. 

The resolution to initiate removal proceedings resulted from a series of election law rulings siding against the state that Chancellor Lyle issued in the summer of 2020, which were partially overturned on appeal.  In opposing the resolution, legal interests – including the Tennessee Bar Association – argued that the system of checks and balances worked as it should, as the appellate court system overturned the opinion, and other corrective measures such as the Board of Judicial Conduct and the voice of the people at the ballot box were in place as well.    

Legislation Advances to Streamline Laboratory Personnel Regulations

Legislation to streamline the process to increase the amount of medical laboratory personnel advanced this week. House Bill 226, by Rep. Kevin Vaughan (R- Collierville) passed the Health Subcommittee.  The legislation is intended to align the state with federal regulations by amending the Tennessee Medical Laboratory Act for pharmacies and private laboratories. Vaughan stressed the lack of lab workers within the state, stating workers would only be required to have a bachelorette degree and then receive additional training once hired. Dr. Dave Smalley, President of the American Esoteric Laboratories in Memphis, spoke in support of the legislation, noting that 65% of medical laboratory training programs have closed, and arguing that the legislation will allow labs to be able to recruit more needed personnel. The bill will be heard in the House Health Committee next week.

Department of Health Reports Positive Outlook for Vaccine Rollout  

The Senate Health and Welfare Committee heard testimony from Department of Health Commissioner Lisa Piercey on Wednesday, with Commissioner Piercey reporting an encouraging and optimistic outlook on the future of the vaccination rollout in Tennessee.  Piercey forecast that the state would be in a position to open each phase of the rollout in the next 60 days, highlighting the state’s focus on equity, instead of speed in the process.  Last week, the state moved into Phase “1C” as some counties – previously  vaccinating only teachers and people age 65 and older – ran out of eligible residents seeking the vaccine. Piercey indicated that the state would see a surge in vaccine distribution in the very near future with increased amounts of doses being sent to every state.

Looking Ahead 

Legislative leadership continues to eye a late-April adjournment, which means that committee activity will increase significantly in the next month.  Expect committee calendars to grow in the next week, as lawmaker scramble to put bills “on notice” before committee closures are announced.  Please pay close attention to your bill tracking report this month and let us know of any matter of importance.  As always, please do not hesitate to reach out to us if you have any questions. Have a great weekend.