2024 TENNESSEE LEGISLATIVE RECAP - Tennessee Nonprofit Network

General Recap

Provided by Tennessee Nonprofit Network’s partners, Capitol Resources LLC.

The second session of the 113th Tennessee General Assembly concluded on Thursday, April 25th. The legislature passed a budget totaling $52.8 billion – a reduction of $10 billion from the current fiscal year. This decrease is attributed to the reduction in one-time spending, underperforming state tax revenues, and a decline in federal revenue. However, amidst these cuts, the legislature managed to bolster the state’s rainy-day fund by depositing $100 million, bringing it to over $2 billion – the highest it has ever been. The budget secured passage in the Senate with a party-line vote of 26-4 and in the House with a 78-18 vote.

Criticism arose from Democrats concerning certain allocations within the budget, notably the $1.9 billion for Governor Lee’s franchise tax refund initiative and approximately $144 million for his private school voucher program, known as the Education Freedom Act. Despite attempts by Democrats to reallocate these funds towards initiatives such as maternal health services, grocery sales tax relief, and increased investment in pre-K education, their amendments were unsuccessful.

School vouchers legislation, or the Education Freedom Act, faced significant hurdles which ultimately led to the legislation not advancing due to disagreement between the Senate and House regarding testing requirements, educator healthcare benefits, and enrollment eligibility in neighboring school districts.

However, Governor Lee expressed optimism, stating that both chambers remained committed to pursuing education freedom in the future. The $144 million allocated for this initiative will revert to the general fund.

Negotiations surrounding the Governor’s proposal to eliminate the property portion of the state’s franchise tax extended deep into the session. This measure will result in an annual loss of $400 million in revenue for the state. It includes provisions for approximately $1.2 billion to cover a refund period for companies subject to the tax based on property valuation. After extensive conference committee deliberations, the House and Senate reached a compromise, incorporating a full lookback period of three and a half years for the refund period and implementing temporary and limited transparency measures based on refund amounts.

Legislators also voted to require pornographic websites to verify all users are 18 or older before providing access. They also approved a bill to require parental consent and age verification before children are allowed to create social media accounts.

Also approved was the Ensuring Likeness Voice and Image Security Act, or ELVIS Act, which creates voice protections against deepfakes and unauthorized uses of artists’ voices and likenesses.

The most contentious legislation adopted this year will authorize school faculty or staff to carry a concealed handgun on school property. They must obtain a valid handgun carry permit, undergo a background check, receive a psychiatric certification, and complete 40 hours of training in school policing. They must also receive permission from the school district, the school principal, and local law enforcement.

Legislators also passed a bill that would allow for the death penalty for adults convicted of raping a child, with certain aggravating factors.

On healthcare, legislators approved a measure to phase out certificate of need permit requirements for new health care facilities to open in counties that do not already have hospitals to increase access to emergency care.

Budget Highlights

Taxes

Franchise and Excise Tax Legislation
- $400 million tax cut for over 100,000 businesses
- $1.5 billion set aside for 3 years for potential tax refunds to avoid possible litigation of previous Franchise and Excise Tax Law

Grants for Local Communities

$36 million nonrecurring grants to rural communities and distressed counties
$40 million for infrastructure improvements to the Tennessee Department Economic and Community Development’s I-24 industrial site
$7.2 million for food banks to support purchases from local farmers
$5 million grant pool for museums
$3 million grant pool for senior centers

Education

$261 million for the K-12 student-based funding formula (TISA)
- $125 million for teacher pay raises to keep on track to reach a starting salary of $50k for teachers by 2026
- $15 million for charter school facility funding
$30 million for summer learning programs
$8 million to expand the school-based behavioral health liaison program to fund 114 liaisons

$3.2 million for AP courses to students across rural and urban Tennessee

Health and Social Services

Utilizes $163 million in shared savings under the current TennCare Medicaid demonstration waiver to fund investments in rural healthcare, behavioral health supports, and value-based payments over five years.
$197 million over five years in TennCare funding to go toward apprenticeships, expanding access to specialty care and telemedicine, hospital and physician practice grants.
$100 million over five years in TennCare funding for community mental health centers and behavioral health hospitals to expand access to addiction treatment, in- home support, and children’s hospital infrastructure.
- $80 million for rural healthcare initiatives
- $50 million for Rural Health Resiliency grants
- $15.8 million for rural health pathways workforce development program
- $25 million for behavioral health supports
- Nearly $350 million for capital projects, including $233 million for the new Woodland Hills facility and Wilder Youth Development Center for justice-involved youth
- $3 million for crisis pregnancy care centers (diverted from a Department of Health Maternal Health Services Pilot program)
$26.7 million investment in services for Tennesseans with disabilities

Law, Safety, and Correction

$17 million to add 60 new highway patrol troopers, supervisors, and support staff
$6.4 million for deployment of Tennessee’s national guard to the U.S. southern border
$4.4 million to implement blended sentencing to address juvenile crime
$3.3 million for mental health evaluations / treatment for certain misdemeanor defendants

Miscellaneous

$63 million to create eight new Tennessee State Parks in addition to the five announced last year, with the goal of funding a total of 13 new state parks
$15 million to expand blueway trail access
$10 million to replace the roof of the State Capitol
$10 million for a Nuclear Development grant
$1 million for Davy Crockett Statue on State Capitol grounds

BILLS OF INTEREST

On behalf of TNN, 189 bills were tracked this legislative session. Of those bills, 38 passed both chambers.

Bills of interest included:

SB 1661/HB 1707: Revises various provisions regarding the regulation of charitable solicitations regarding the age of organization to be regulated, public contributions, and tax exemption status. Allows a civil penalty to be assessed if violations occur.

SB 1662/HB 1708: Changes certain fees payable to the secretary of state by certain charitable organizations from $50 to $10. Increases from $500,000 to $1,000,000 the amount of gross revenue received during a fiscal year to trigger certain reporting requirements. Assesses a late fee of $25 per month on certain financial reports that are not timely filed.

SB 1669/HB 1651: Authorizes nonprofit organizations to submit an annual charitable gaming event application to the Secretary of State(SOS) within five calendar days after this proposed legislation becomes law for events being held from the period beginning July 1, 2023, and ending June 30, 2024, and for events being held in the period beginning July 1, 2024, and ending June 30, 2025.

SB 2561/HB 2618: If a written request for the following information is made jointly by the speaker of the senate and the speaker of the house of representatives, then this amendment requires a nonprofit organization that has entered into a contract or memorandum of understanding with the district attorney general related to policies and strategies related to cash bail, unless such contract or memorandum of understanding is required by statute, to disclose to the speakers the list of persons or entities that have donated to the nonprofit organization in the previous calendar year in accordance with this amendment; (2) The disclosed list of persons or entities that have donated to the nonprofit organization must be restricted to the lesser of the top five donors or the top 5 percent of donors in the previous calendar year. The aggregate donation during the previous calendar year must be equal to or greater than $25,000; and (3) Disclosure of the list of persons or entities must only include the name of the person or entity. Other personal identifying information or details must not be included.

SB 2296/HB 2248: Authorizes the department to contract with a 501(c)(3) nonprofit organization that maintains a principal office in this state and that is affiliated with a nonprofit membership organization composed of family physicians, family medicine residents, and medical students in this state for the nonprofit organization to administer some or all portions of the family medicine student loan repayment program.

SB 1882/HB 1980: Authorizes a charitable nonprofit corporation located in Knox County or within a municipality located within Knox County that acquires replacement property which is operated as a licensed residential home for the aged, to claim and file a property tax exemption as a religious, charitable, scientific, or nonprofit educational institution. this bill applies to properties acquired before the effective date of this bill, so that the properties are not subject to property taxes while owned by the qualifying corporation and used for one or more of the exempt purposes for which the corporation was created or exists and any property taxes paid on the property that were collected prior to the effective date of this bill must be refunded by also requiring any interest, fees, penalties, postage, expenses, and all other related costs paid on the property that were collected prior to the effective date of this act to be refunded.

SB 2018/HB 2434: Establishes that a private entity is not liable in a class action lawsuit resulting from a cybersecurity event unless the cybersecurity event was caused by willful and wanton misconduct or gross negligence on the part of the private entity.

SB 2078/HB 1886: Implements penalties for certain offenses for beneficiaries of the temporary assistance for needy families (TANF) program and food stamp program, including penalties for fraudulent receipt of benefits. Removes an exemption from the TANF work requirement for a parent or caretaker relative who proves to the satisfaction of the department the existence of the person’s temporary incapacity or permanent disability. Removes the requirement that the TANF maximum payment standard must not increase when a caregiver relative becomes pregnant while receiving assistance.

SB 2134/HB 2405: Establishes the Social Work Licensure Compact for the purpose of increasing public access to social work

SB 2410/HB 2504: Establishes that it is an offense for a person, on behalf of a debt collector or inbound telemarketer service, to knowingly cause any caller identification service to transmit misleading or inaccurate caller identification information.

SB 2503/HB 2610: Requires the attorney general and reporter to conduct a review of the human rights commission including the responsibilities and functions of the commission in order to evaluate if the attorney general and reporter could take on the responsibilities of services and reducing overly burdensome and duplicative requirements associated with holding multiple licenses.

SB 2269/HB 2406: Requires the department of human services to identify any federal regulations or state law or rules determined to inhibit the department’s ability to timely review and approve applications and deliver benefits for the food assistance program, submit any waivers identified to alleviate any federal regulatory limitations, and submit a report on or before December 31, 2024.

SB 2374/HB 2317: Requires TACIR to complete a study on laws, regulations, and rules affecting the start-up, operation, and expansion of child care businesses in this state.

SB 2399/HB 2296: Requires the Board of Professional Counselors, Marital and Family Therapists, and Clinical Pastoral Therapists (Board) to license without examination a marital and family therapist applicant who is licensed to practice independently in another state if the applicant’s qualifications meet the licensure requirements in this state.

The first session of the 114^th Tennessee General Assembly will convene on Tuesday, January 9, 2025.