TCSA Capitol Update
Week of April 8 - April 12, 2024
Vouchers and F&E Taxes Still In Limbo
Time is running out, but the leadership of the House and Senate say talks are still ongoing about the dramatically different versions of private school voucher legislation moving in each chamber. The bills have progressed to the Finance Committee in the Senate and the Finance Subcommittee in the House, but have been deferred yet again. Neither chamber has taken a vote on the proposal since it came out of the Senate Education Committee on March 6th and it was recommended by the House Government Operations Committee on March 18th. The chambers both intend to take up the state budget at some point next week. Obviously this item will need to be resolved in order for them to do so. Another major sticking point between the chambers is the legislation to revise the state’s franchise and excise tax. The bill has passed both chambers but in a different form. The Senate on Thursday refused to concur in the House version which reduced the number of years businesses would be eligible for a refund. This sets up the possibility of a conference committee on this bill if the House refuses to recede from its amendment. The differences involve hundreds of millions of dollars in refunds, so this will also have to be resolved in order for the legislature to finalize a budget.
More Frequent Property Reappraisals
The Comptroller’s bill to shorten reappraisal cycles was approved by the Senate Finance committee this week. After sitting dormant for a couple of weeks, SB 1946/HB 2057, was approved unanimously by Senate Finance and sent to the calendar committee to be scheduled for a floor vote. The bill had progressed all the way to the House floor back at the beginning of March, but ran into questions and opposition there. Interested parties have been working behind the scenes to try and revive the measure. The urgent need for this bill only became more apparent when new sales ratios were announced for many counties this week. A fiscal analysis on the bill gave the impression that it was a significant tax increase, even though reappraisals are required by law to be revenue neutral. This created some confusion amongst legislators and delayed the legislation’s progress.
Challenging County Commission Votes
The House concurred in Senate changes to HB 2685/SB 2548. This bill laid out procedures for how challenges could be raised to votes by a county commissioner who had a conflict of interest. As the bill originally passed in the House, in addition to members of the commission, members of the public in attendance at a commission meeting could also raise objections to individual commissioner votes. This created concern as the bill was heard in the Senate State and Local Government Committee. That committee amended out the public objections, noting that most members of the public would not have a clear understanding of financial conflict of interest rules that govern the county commission. The bill passed the Senate in that form. When that change came over to the House for consideration, it concurred in the amendment. The bill is headed to the Governor for his signature.
County Commission Training
The bill to mandate continuing education for county commissioners and also provide a financial incentive for completion, came out of the Senate Finance Committee this week. SB 2897/HB2677 would provide for future county commissioners that if they do not get the required continuing education during their term, they would be ineligible to run for re-election. If they complete their hours, they would be entitled to a $600 stipend, paid by the county. This cost in the legislation caused the bill to be placed behind the budget in the House.
Reduced Sales Tax on Groceries
A bill to allow reductions in the local option sales tax on food was amended in Senate Finance this week. The bill, as introduced, allowed local governments to exempt groceries from the local option sales tax or levy a lower tax rate on these items. As the bill progressed, questions arose about how that change could affect K-12 education funding. An amendment was prepared to clarify that a municipality could only reduce the amount of local option sales tax levied above the county rate. That way, any reduction in the tax would not decrease the portion of local option sales tax going to schools. In this form, SB 2520/HB2641 was approved by Finance. The bill will be headed for a floor vote in the Senate.
Elections Issues
A bill that would create a process for recall elections for some local officials is now off notice in both chambers. HB 1818/SB1580 was taken off notice in the House Finance Subcommittee this week. It was previously taken off notice in the Senate.
Meanwhile, a bill that narrowly passed the Senate that prohibited someone from holding two elected offices was deferred again in the Local Government Committee in the House. HB 2080/SB1968 passed the Senate back in February with the minimum number of 17 votes. Since that time, the House sponsor has consistently delayed the bill and not presented it in the House committee. That committee is expected to close next week.
The bill allowing election commissions to purchase equipment passed on the House floor this week. As originally proposed, the bill would also have allowed the election commission to spend local funds or incur debt on behalf of the county. As amended, the bill does allow the election commission to go forward with equipment purchases, but only if the cost is entirely paid for by state or federal funds designated for that purpose. HB 2096/SB 2587 will now go to the Governor for his signature.
Farmland Trust Fund Initiative Shelved
A bill that would create a state-funded pool to provide financial incentives to keep land in farming has progressed in the House toward a floor vote, but it was not approved by the Senate Agriculture Committee. HB 1890/SB2099, an administration initiative, was approved by the House Finance Committee this week and sent to Calendar and Rules to be scheduled for a floor vote. The bill was not allowed out of the Ag committee in the Senate when that committee closed a few weeks ago. The chairman called to reopen the committee this week to consider the bill, but the votes still were not there and the bill was sent to the General Subcommittee - a measure meaning the bill is off notice. The committee then closed again, subject to the call of the chair.
Final Weeks to be Hectic and Unpredictable
Both chambers are planning to suspend rules to allow legislation to move more quickly through committees and to the chamber floors for votes. The House Speaker told members to be prepared for floor sessions Monday through Friday next week, as the House has some catching up to do. The appropriations bills have been calendared to be heard in both the House and Senate Finance Committees next Tuesday. This means over the weekend, leadership will need to resolve some major issues and finalize any proposed legislative tweaks to the Governor’s proposed budget. If those discussions hit a snag, the budget could be delayed. Otherwise, the plan is to get the budget out of committee on Tuesday and to the floor for a vote on Wednesday or Thursday of next week.
There will still be a lot of legislation to wrap up after the budget. So, it is expected that the General Assembly will return to Nashville for at least one more week after that before adjourning sine die to begin campaigning for reelection over the summer.