April 27, 2017
After Passage of IMPROVE, 
Legislature Turns to Budget; 
House and Senate Inch Closer to Adjournment
 
With the IMPROVE Act now adopted by both legislative chambers and signed into law by Governor Haslam, House and Senate members are starting to pivot their focus to the state's proposed $37 billion budget for the upcoming fiscal year.  Passing a balanced budget is the chief constitutional obligation of the General Assembly and is typically one of the final major legislative items considered by the legislature before adjournment.  This week, legislative leaders announced they hoped to adopt a budget by the end of next week and wrap up the 2017 session possibly as early as Tuesday, May 9.  
The Administration's budget amendment makes a number of modifications to both current and upcoming fiscal year budget expenditures.  


To see the 2017-2018 budget overview,  click here.  
To see the Administration's budget amendment summary,  click here.
Haslam Signs IMPROVE Act, or Tax Cut Act of 2017, 
into Law

On Wednesday, Governor Haslam announced he had signed the IMPROVE Act, or Tax Cut Act of 2017, into law.  As noted by the media, the Governor's action was considerably speedier than usual and may signal a desire by the Governor and the legislature to shift focus towards debate on the state budget.  
 
The Governor's signature follows the House's adoption of the bill on Monday night by a vote of 67-21.  In that vote, the House agreed to the Senate's addition of elderly and disabled veterans property tax relief to the IMPROVE Act.  Overall, the final legislation included a modernized transportation and infrastructure funding plan (an increase of 6 cents on gasoline taxes and 10 cents on diesel) that will fund approximately 962 transportation projects across Tennessee.  It will also provide substantial new revenue to counties and cities for their road maintenance programs.  Tennessee currently ranks 41st in fuel taxes, and while this new law will change our ranking slightly, it will keep us well within the competitive range of our adjoining states for fuel tax rates.  For our manufacturers, the legislation included the single sales factor option.  This critical franchise and excise tax reapportionment will extend much-needed tax relief to Tennessee manufacturers and constitutes a big win for both our business climate and our state's ability to recruit and expand businesses.  Additionally, the reduction in the food tax from 5% to 4% will produce a significant annual cost savings on groceries for Tennessee families, offsetting and even surpassing the minor increase in the gas tax rate.  Despite numerous attempts to highlight this provision, the tax savings contained in the IMPROVE Act may be one of the least-appreciated benefits of the legislation.
 
Thank you to our members, local chamber partners, and advocacy collaborators for all of your work and input on the legislation.  We are optimistic that this legislation will not only result in much-needed expansions and maintenance of our transportation and transit infrastructure, but will also generate enhanced capital investment and job growth in Tennessee's manufacturing sector.  Due to the numerous amendments considered throughout the process, we will share a final copy of the legislation with you once an "official" engrossed copy of the bill becomes available.
 
In the meantime, please stay tuned for more.  We are looking to partner with Governor Haslam and legislative leaders when they perform ceremonial bill signings to spread the word across the state about the IMPROVE Act. 

Another word of thanks to Governor Bill Haslam and the Tennessee Department of Economic and Community Development. Governor Haslam and his ECD team worked with the Tennessee Chamber on a number of legislative proposals this session and worked with us to develop a strategy to get this legislation passed.  We are thankful for their partnership and collaboration. 
 
And finally, a special note of appreciation to the only ones that actually have a vote- House and Senate members (we know who they are) who worked tirelessly to make this bill a reality.  We will be in future communication about these individuals and how we can coordinate to support their efforts! 
Governor Haslam Releases Announcement Applauding Signing of the IMPROVE Act
The announcement below was released by Governor Haslam's office, explaining the IMPROVE Act.  
 
(NASHVILLE, 4/24) - Tennessee Gov. Bill Haslam (Monday) praised passage of the IMPROVE Act, a key piece of his NextTennessee legislative plan, giving the largest tax cut in Tennessee history and making the state more competitive in recruiting manufacturing jobs while delivering a safe, reliable and debt-free transportation network for the next generation of Tennesseans.
 
"The IMPROVE Act is a conservative plan that directly addresses how we fund our roads and bridges for the first time in 30 years. I thank the General Assembly for passing IMPROVE, and especially Senate Majority Leader Mark Norris (R-Collierville) and Reps. Barry Doss (R-Leoma) and Bill Dunn (R-Knoxville) for their work carrying the legislation," Haslam said.
 
The IMPROVE Act, "Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy," is on its way to the governor's desk after the House of Representatives today concurred with the Senate bill passed last Wednesday 25-6. The House version passed last week 60-37.
 
The legislation cuts nearly $300 million in taxes next year and more than $500 million in taxes annually at its full implementation. The tax cuts include a 20 percent decrease in the sales tax on groceries that equals $125 million and a $113 million reduction in business taxes on manufacturers. The legislation also begins an annual cut in the Hall income tax - a tax that is statutorily required to be eliminated by 2022 but previously without a specific schedule to do so.
 
IMPROVE is a net tax cut for Tennesseans - a fact confirmed by the Americans for Tax Reform, an organization that opposes all tax increases as a matter of principle - and results in tax savings for an average Tennessee family.
 
Nearly 1,000 road and bridge projects across all 95 counties will be delivered through a conservative, responsible and user-based approach of raising the gas tax by six cents and diesel tax by 10 cents, each over the next three years. It also increases the user fee for electric vehicle owners and allows local voters, through a referendum, in the state's largest counties and its four largest cities to impose a surcharge on taxes they already collect to be dedicated to transit projects. 

Chamber-Supported Work-Based Learning Bill for LEAP Program Adopted Overwhelmingly by Legislature; Heads to Governor for Signature
 
This week, legislation designed to directly address the technical skill needs of employers and equip thousands of Tennessee students with a career-ready education passed overwhelmingly on the floor of both the House and Senate.  Adopted by a 94-0 vote in the House and a 29-0 vote in the Senate, this critical piece of workforce legislation was supported by the Tennessee Chamber and sponsored by Senate Majority Leader Mark Norris and freshman Representative Ron Gant.  The bill seeks to build upon the Labor Education Alignment Program (LEAP) by authorizing the Board of Regents and the Tennessee Higher Education Commission to develop curricula for work-based learning courses that combine practical, on-the-job skills and trainings with integrated classroom instruction for students pursuing an industry-related postsecondary credential.  With the help of this bill, Tennessee's technical schools and industry-oriented postsecondary institutions would be able to incorporate apprenticeships, co-ops, job shadowing opportunities, and the like with traditional classroom-based coursework as part of their credit-bearing offerings for students pursuing an industrial or technical education.  The Tennessee Chamber further plans to strengthen employer participation in LEAP by engaging with stakeholders and experts in both education and industry over the summer to develop a comprehensive and substantive work-based education liability protection proposal for the 2018 legislative session.



Tennessee General Assembly: Weekly Calendars
Senate's weekly calendar click  HERE .
House of Representatives' weekly committee calendar click  HERE

  Tennessee Business Barometer:
Optimism Grows, but Hiring Still a Concern
 
The Tennessee Chamber, in partnership with the MTSU Jones College of Business, released their quarterly business index results.   The most recent survey results show,  "Overall, Tennessee business leaders are growing in their optimism regarding the current and future economy," reported Dr. Tim Graeff, MTSU professor of marketing and coordinator of the index. 
 
Business leaders, however, remain concerned about being able to find enough qualified employees.  "Expectations for short-term sales and profitability are positive, tempered by concerns regarding long-term growth due to decreasing expectations for business investment," Graeff noted. "Moreover, while many firms seek to grow and expand their employment base, it is clear that business leaders are becoming increasingly frustrated at the difficulty associated with finding qualified employees."
 
The Tennessee Business Barometer survey is a collaborative effort between Jones College of Business at Middle Tennessee State University and the Tennessee Chamber of Commerce & Industry. The survey measures the mood and outlook of business leaders statewide through online surveys.  Click here to view the complete April survey.
 
In related news, USA Today (4/26) reports that small businesses "are brimming with confidence - and backing up their upbeat outlook with a burst of hiring and spending." In their national survey, 64 percent of firms with 100 or fewer employees said they are doing well, up from 61 percent in late 2015. In addition, "72% of the respondents anticipate they'll do well in the coming year compared to their current performance, up from 64% in late 2015."
Republican Bill Lee Announces Run for Governor of Tennessee
This past Sunday, Franklin businessman Bill Lee made it official and formally announced his candidacy for Governor.  He adds his name to the growing slate of candidates seeking to replace term-limited Gov. Bill Haslam in 2018.
 
For the past three decades, Lee has built a family business into a Middle Tennessee brand.  Now the chairman and former CEO of Franklin-based Lee Co. will look to run on that career - and a life story forever altered by family tragedy - in a Republican bid for Tennessee governor.  "My life's circumstances and my life's experiences have led me to this," Lee said in an exclusive interview with the USA Today Network  during which he announced a gubernatorial run that had been widely anticipated.
 
Lee, 57, of Williamson County, enters a wide-open GOP primary with no government experience and a campaign platform of jobs, education and public safety.  Rather than political service, Lee, who still lives on the cattle farm in Fernvale where he was raised, will lean on his lifelong career at Lee Co., a full-service home services, facilities and construction company founded by his grandfather in 1944, which Lee later purchased from his father and became president in 1992.
 
Lee's main opponent for the nomination, so far, is Knoxville businessman Randy Boyd, who also has served in appointed positions but has not ever been elected.  However, they will not be the only Republicans, as House Speaker Beth Harwell, Senate Majority Leader Mark Norris and Congressman Diane Black are among those still considering the race for Governor.  State Senator Mark Green, who had previously announced, has suspended his efforts after being nominated to by the President to serve as Secretary of the Army.   Former Nashville Mayor Karl Dean is the only Democrat to have formally entered the race.  House Minority Leader Craig Fitzhugh is also considering a run.
Tennessee's Prudent Use of Business Incentives Promotes Investment, Jobs
Commissioner Bob Rolfe penned a guest column for the Knoxville News Sentinel outlining the ways ECD has sought to use business incentives more effectively and transparently. Rolfe's column also provides more context to recent media coverage that has overly-simplified and, in some cases, misinterpreted the purpose and impact of the business incentives.
 
He writes, "ECD is prudently managing its FastTrack grant funding, and doing so in a way that bolsters the future economic growth of Tennessee. Meanwhile, the primary business tax credits encourage the investments needed to maintain Tennessee's industrial base. These credits ensure thousands of high-quality jobs remain in Tennessee and position our existing employers to remain competitive on a global scale."
Tennessee / Virginia Partner to Bring Manufacturing Roundtable
May 4th at Bristol Motor Speedway
 
Please join us as Tennessee Chamber / Tennessee Manufacturers Association  partners with the Virginia Manufacturers Association to offer a Manufacturing Town Hall meeting on May 4th at the Bristol Motor Speedway in Bristol, Tennessee.  The event will feature a number of important policy discussions and networking opportunities for manufacturers.  For east Tennessee and Southern Virginia, there are a number of manufacturers that contribute greatly to both states' economic activity.  Additionally, Tennessee Chamber Board member Jerry Caldwell has graciously offered an exclusive tour of the Bristol Motor Speedway. The event is free to attend and begins at 12:00pm.  For more details, contact suzie.lusk@tnchamber.org


Washington D.C. Fly-In
May 15-17, 2017

The Tennessee Chamber is proud to announce our inaugural Washington D.C. fly-in.  We hope you can join us and make this event a great success.  Planned activities include meetings with Tennessee's U.S. Senate and House delegation and staff and policy briefings at the U.S. Chamber and National Association of Manufacturers.  Please consider sponsorship opportunities as well for your company to be recognized in our Nation's capital.  

Host/Recommended Hotel: Hotel George - 15 E St NW, Washington, DC 20001; Phone: (202) 347-4200
*No room block, but we suggest staying here if possible (TN Chamber staff will be here)

Cost: $199/member (Hotel cost NOT included)

Deadline to book: April 28 (**Limited spots are available); Contact Carolyn Davis (
carolyn.davis@tnchamber.org ) if you will attend

Sponsorship Opportunities: *Presenting Sponsor - $5,000
*Premier Sponsors - $2,500

After Successful First Weeks of TNReady Testing, School Districts Experience Few Issues with New Test Rollout
 
With the first weeks of statewide standardized testing now complete, schools and local districts across Tennessee are seeing a largely smooth roll-out of the new test, reporting only a few "sporadic" problems.  According to the Knoxville News Sentinel, the small-scale troubles mostly revolve around routine user errors, such as individual students proceeding on to the next test section instead of stopping.  While every principal was given the flexibility to set their own testing schedule within the three-week window, by now every school in the district has undergone some testing.  Across the state, about 600,000 students between grades 3-11 will take some version of the TNReady test. While most of those will be paper and pencil test-takers, more than 30,000 high school students in 24 districts across Tennessee have taken a TNReady test online, Education Commissioner Candice McQueen told school districts last Friday. 
 
After last year's testing troubles, the state cancelled its contract with the vendor and selected a new testing company to administer this year's assessments. Officials have since expressed confidence in the new vendor, Queststar, and their ability to launch the new tests. They also opted to offer an optional, small-scale online version for high school students only, helping to avoid a large-scale server crash like last year.
What's the Big Deal about a President's
First 100 days?

( CNN 4/23) The first 100 days of a two-term presidency amount to about 3% of an eight-year span, but for decades the opening stretch of an administration has become the barometer of a commander in chief's governing power, or lack thereof.
 
The measurement began after Franklin Delano Roosevelt entered office amid the tumult of the Great Depression. With banks caving in and jobs vanishing, FDR set to work passing laws and establishing new government bureaus to curb the economic suffering.  He swore in his entire Cabinet at once, signed 76 bills into law, and began rolling out the New Deal in his first 100 days in office -- a frenzy of activity that, ever since, all presidents have been matched against.
 
Presidents usually chafe at the comparison to FDR, who benefited from a Congress that could hardly say no at a time of economic calamity. But the 100-day construct abides, fueled both by journalists eager for a yardstick to measure a new administration and by presidents themselves, who lay out 100-day plans as candidates and almost unfailingly fall short.
 
For a deeper dive, we suggest this 2009 article from US News & World Report discussing the same topic during President Obama's first 100 days. 


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The Capitol Update is written by the Chamber's government affairs staff and is distributed statewide to all of our business, local chamber and economic development professionals.  The Tennessee Chamber Capitol Update is a powerful grassroots communication tool and we encourage you to share this publication with your team members to provide crucial updates and engage your local elected officials on important issues.