TCSA Capitol Update
Week of April 1 - April 5, 2024
This week at the General Assembly, there weren’t a lot of major developments related to legislation. There were, however, significant political developments. A few more committees closed, but there was no public progress toward resolving issues between the House and Senate on school vouchers or on competing proposals to change the state’s Franchise and Excise tax. Talks are supposedly happening between leadership of the two chambers. If any compromises have been reached, they have yet to be announced. As lawmakers wrapped up their business for the week and headed home Thursday, many of them were watching to see if they drew an opponent. The qualifying deadline for candidates wanting to run for the House and Senate was Noon that day. That looming deadline was possibly the reason some controversial issues didn’t come up for a vote this week. Some legislators might not feel any more comfortable next week, as more than usual face opposition. In the Senate, it appears every incumbent Senator up for election this fall will face at least one opponent, with some facing both primary and general election challengers. About fifteen House members are unopposed. That count may grow as several outstanding qualifying petitions were still pending. There are quite a few current and former county officials who have thrown their hat into the ring this cycle - some for open seats, while others are challenging incumbent legislators.
Change in operations
At this point in the session, the flow of the legislature alters. Many committees have completed their work for the year and have stopped meeting. Currently, the Senate only has Finance Committee meetings and floor sessions scheduled for next week, except for the Energy, Agriculture and Natural Resources committee which is expected to re-open on Wednesday to hear a limited number of bills. The House Local Government Committee only has 9 bills left on its calendar for next week. All of its subcommittee have closed for the year as have all House subcommittees except for the Finance Subcommittee. The Senate and House are both scheduled to have an additional floor session on Wednesday as more legislation makes its way to the chambers for a final vote. The Finance committees will begin meeting more frequently as the final measures expected to pass this year have to be incorporated into the budget. The Senate has indicated that it hopes to take up the state budget the week of April 15th. This gives the two chambers one more week to try and resolve major issues before getting down to business on the state’s finances. We also expect to soon see both chambers adopt the “flow motion,” which is a procedural move to suspend certain rules to allow legislation to move more quickly between committees and to the floor for a vote.
School Vouchers
At least publicly, the two chambers remain at odds on how to resolve their differences on a universal school voucher proposal. The House version attempts to pay for a number of new proposals by shuffling some of the funds budgeted for the state’s TISA education funding formula. The Senate version of the bill does not include such measures and would fit under the amount of funding Governor Lee provided in his budget proposal. The bills carrying these proposals (HB1183/SB503) are scheduled for the Senate Finance Committee and House Finance Subcommittee next week.
Franchise and Excise Tax Revisions
Both the House and Senate seem poised to make a $400 million cut in the F&E taxes going forward. Where there is disagreement is in how many years of back taxes they want to refund to companies who paid higher amounts under the alternative minimum tax provisions they are deleting. The Senate has budgeted for a full three years of refunds. The House proposes only one. The House is also pushing for more transparency and accountability from companies filing for the refunds.
Governor’s Initiatives
A couple of Governor Lee’s initiatives are moving here at the end of the session. The Resilient TN Revolving Loan Fund that would provide loans to local governments for disaster mitigation projects passed on the House Floor Monday. It had previously passed the Senate. A second proposal that creates a fund to provide financial incentives for farmers to keep their land in agriculture (HB1890/SB2099) moved forward to the House Finance Committee. The bill was held up in the Senate Agriculture committee, which had closed for the year. As mentioned above, that committee is scheduled to re-open next week, where this bill is expected to be heard.
Mental Health Evaluations
One of the items that was added to the budget in the Governor’s supplemental amendment was funding for the state to take back the responsibility to pay for mental health evaluations of individuals charged with a misdemeanor. This cost was shifted to counties during the Bredesen administration. Leader William Lamberth in the House passed this measure during last fall’s special session, but it didn’t move in the Senate. He once again championed this cause this session and convinced the Governor to fund the initiative. HB 1643/SB2028 is headed to the House floor on a consent calendar. In the Senate, the bill has been approved by the Judiciary committee and is headed to Finance.
Development Taxes
The bill to revise the County Powers Relief Act related to development taxes is headed to the House floor for a vote next Thursday. The bill, HB 2426/SB2261, is a compromise between certain growth counties and homebuilders. It allows the rate levied on residential development under the act to increase from $1.00 to $1.50 per square foot and adds commercial properties to those that can be taxed. However, it requires counties using the act to show on-going growth in order to continue levying the tax. There are provisions to grandfather in counties currently using the law at the rate they are levying the tax at the start of this year. The bill also makes additional changes to grant builders relief, including moving the due date for the tax from when they get a building permit to prior to the issuance of the certificate of occupancy. The bill came out of the State and Local Committee in the Senate and has been referred to the Finance Committee.
Conflicts on the County Commission
The bill regarding conflicts of interest on the county commission passed the Senate on Monday. Their version of SB2548/HB2685 differs from the House version in that it eliminates the ability of members of the public to contest votes during a commission meeting. The bill will appear on the House message calendar next Monday for that chamber to vote on whether to accept the amendment.
County Commissioner Continuing Education
The bill to make commissioner education mandatory is sitting behind the budget in the House since it imposes a cost on county governments. It provides that commissioners who are required to complete continuing education would not be able to run for re-election if they fail to do so. Those who get the necessary credits would be entitled to a $600 annual stipend, paid for by the county. That cost sent HB2677 behind the budget. The Senate version, SB2897 is headed to the Finance committee in that chamber.
Hurry Up and Wait
As we enter the last few weeks of session, there may be long stretches without any new developments. Then, when something does happen, it can happen in a hurry. We will continue to monitor all the remaining issues as well as the state budget and provide you updates as timely as possible. Thanks again for all your support during this legislative session.