March 31, 2017
TN Chamber Supported Tax Proposal Passes Legislature; 
$11 million Savings to Business Annually

Last year, the Tennessee Chamber Tax Committee introduced legislation with a number of other groups to require Tennessee to adopt an annualized franchise and excise payment formula. These efforts fell short due to the cost of the proposed legislation in 2016 that was not included in Governor Haslam's proposed budget. The Chamber worked over the summer and this year was able to pass the legislation for employers.  On Monday night, the House approved HB 320 by Rep. David Hawk (R-Greeneville) by a 95-0 vote.  The legislation authorizes franchise and excise tax payers to elect to calculate the excise tax component of their quarterly estimated F&E tax payments based on an annualized method, as provided in Section 6655(e)(2) of the IRS code. The legislation also decreases from $1,000 to $200, the penalty for late filings of application for F&E tax exemptions.
The legislation is also important to reduce fluctuations in business tax collections which recently forced the TN Chamber to defend the business community from allegations of business abuse of "loopholes" in our tax code. In addition, the annualized method will allow taxpayers who receive a larger share of their income toward the end of the tax year to reduce their earlier estimated payments when they are realizing a lower share of income, and then make up for such reduced initial payments with their remaining estimated payments or their final payment due.  Special thanks to Chamber members, Carl Hartley, Merwin Ullestad, Larry Hyatt, Mason Barrick, Brett Carter, Steve Miller, Allen Rider and Mandy Young for their work.
House and Senate Committees
Legislative Updates:

TN Chamber Outlines work on a number of Bills Impacting Business and Industry:
With spring in the air and committee hearings full, the legislative session picked up pace in advancing a number of TN Chamber supported proposals and defeating proposals opposed by the Tennessee Chamber. Here is a quick rundown... 
SB0473 / HB0979 - Sen. Kerry Roberts (R-Springfield) / Rep. Kent Calfee (R-Kingston) Freedom to Prosper Act

Known as the "Freedom to Prosper Act", this legislation would prevent cities and counties from layering on additional licensing restrictions and fees for occupations and professions.  The sponsors mentioned that several jurisdictions around the country have added additional requirements forcing licensed occupations to register and pay a fee before conducting business in their county. 
Tennessee Chamber is Supportive of consistency for occupational licensing and reducing redundancy.  The State of Tennessee already requires a license or certification on over 200 job classifications and additional regulations should be determined by the General Assembly to ensure consistency.  This bill will not impact the current status of governments in the largest counties to administer the licensing authorities currently provided by the State.
Status : This bill failed to get enough votes in the Senate on Tuesday (3/28) and was held in committee until next year.  On Thursday, the Sen. Roberts had gathered enough signatures from committee members to reconsider their actions.  It will be heard again this coming Tuesday (4/4). The House version has passed one committee and will be heard next week in Finance.

HB 1382 / SB 0888 - Rep Jernigan (D-Old Hickory) / Sen. Ferrell Haile (R-Gallatin) Right to Repair
As drafted the Right to Repair Act would force the manufacturers of agricultural equipment to provide all diagnostic, repair, software and software repair tools to any repair provider or owner upon request.   
Tennessee Chamber Opposes & Tennessee Manufacturers Association Opposes.  Both worked hard to explain the flaws in this legislation. The use software and electronic controls in modern agricultural equipment are used for safety systems and emission controls.  It is important that technicians are properly trained to ensure the continued safe operation of these systems. Secondarily, the intellectual property of manufacturers' software and the privacy of users can be placed in jeopardy when the keys to the encrypted controls are placed on the open market. The sponsors of the legislation have also noted their interest in expanding the legislation to other consumer goods
Outcome: DEFEATED; Referred to the 2nd calendar of 2018.

SB 1105 / HB 0477 & SB 1106 / HB 1246 - Sen. Sara Kyle (D-Memphis) / Rep. John Ray Clemmons Proposed Pay Equity Legislation
Both of these pay equity bills created a number of additional legal actions that could be brought against employers regarding employee pay in a number of areas including gender.  Most concerning is the addition compliance burden that all employers would have to comply with including documentation that an employer must provide to show that any discrepancies related to pay were NOT related to an employee's gender.
Tennessee Chamber Noted Concerns:  There is currently, federal law in place that offers guidance to employers and protection to employees on gender pay equity issues, and we understand there are federal proposals pending as well.
Outcome: DEFEATED: SB 1105 failed in Senate Commerce committee & HB 1246 failed in House Consumer & Human Resources committee

SB 1371 / HB 1405 - Sen. Jack Johnson (R-Franklin) / Rep. Kelly Keisling (R-Byrdstown) Protection of Natural Gas Transmission

As amended this legislation clarifies that the State Air Control Board in Tennessee should make its determinations on air pollution control permits based on the scientific approaches established in law and rule, currently. 
Tennessee Chamber Supports.  This bill is brought by the Tennessee Chamber.  Recently, a local government pushed to include an additional standard to block a specific project and could have stopped future industrial and utility permitting.  Their proposal is not based in the same scientific method as the current law and was rejected by the Air Board.  We are certain the Air Board was correct and this legislation provides clarification for future attempts to circumvent the law and regulations governing air quality and potential emissions.
Outcome: PASSED full Senate, PASSED in House Energy Subcommittee this week: set to be heard in House Agriculture & Natural Resources Committee on Tuesday (4/4).

HB 1021 / SB 1336 - Rep. Cameron Sexton (R-Crossville) / Sen. Paul Bailey (R- Sparta) Local Referendum for Energy Projects
This legislation was brought by local sponsors to block a proposed wind farm development in Crab Orchard, TN.  The Chamber is a proponent of consistent state application of environmental and energy permits and fear local referendum would stop or impact a number of industrial activities. A series of amendments proposed on the bill established a series of steep regulatory hurdles that must be met before a permit could be submitted for construction.  Most onerous was language requiring a county wide referendum to approve an industrial project after the time and effort to receive an approved permit.  The referendum concept proposes a dangerous precedent.  Future industrial projects and economic development would be seriously impacted if permits were required for new site development.   After several vigorous debates in House and Senate committees, cooler heads prevailed and have proposed a serious study on the issue over the summer.
Tennessee Chamber opposed but moved to neutral with proposed amendment to study the issue.
Outcome: DEFEATED: An amendment has been agreed to that limits the application of the proposed bill.  It will set a moratorium until July 2018 on construction and establish a study committee to review other states regulatory methods on wind turbines.  The study committee will make recommendations on what action Tennessee should take. The House version will be heard in House Agriculture & Natural Resources Committee on Tuesday (4/4).
If you would like to be informed about the study committee meetings on this topic, please contact the Tennessee Chamber.  We will need assistance in providing best practices for industrial permitting and land use.


Tennessee Chamber opposes additional insurance mandates.  Recent changes in surrounding healthcare recently have resulted in significant cost increases for all employers. Chamber members frequently note rising healthcare costs is one of their greatest concerns. The Tennessee Chamber evaluates all proposals to determine the resulting cost impact it will have on insurance prices for business. 
HB 960 / SB 0991 - Rep. Bryan Terry (R- Murfreesboro) / Sen. Mark Green (R-Clarksville) Drug Formularies
As drafted this legislation proposes a "frozen formulary" to annual health insurance plans, locking in a preferred drug's pricing for the entire year. It is a drug coverage mandate that will prevent insurance companies from negotiating prescription drug prices to be cost effective for their patients.  The result will drive up pharmaceutical costs, and thus, insurance premiums for all private employers and individuals.  Healthcare mandates at the state level add costs to individual and small group plans and creates a challenging environment for Tennessee business to afford healthcare plans for their employees.
SB 0922 / HB 1059 - Sen. Bill Ketron (R- Murfreesboro) / Rep. Lamberth (R-Cottontown) Mandate for Oral Chemotherapy
Requires health insurance to charge patients the same amount for anti-cancer drugs regardless of whether or not they cost the same.  States the drugs must be comparable, whether given intravenously or taken orally in pill form.  The Tennessee Chamber opposes this mandate, the bill does not consider whether the pharmaceutical company, hospital or pharmacy may charge different prices for these medications.  Patients are only required to pay $150 for a month's supply.  As written the legislation does not apply to health insurance purchased through the Affordable Care Act (Obamacare).
Outcome: House and Senate version to be heard in committee this week (4/3 or 4/4).

HB1029 / SB 1049 - Rep. Susan Lynn (R-Mt. Juliet) / Sen. Janice Bowling (R-Tullahoma) Mandates on Certain Industrial Chemicals
This legislation purposes to ban several chemicals that are used as flame retardants.  It places unneeded mandates on manufacturers of clothing, upholstery and furniture that use flame retardants.  Retailers would also have to meet certain standards and become liable if products were not marked correctly. 
Tennessee Chamber opposes these unnecessary mandates that drive up the cost of doing business.  Chemicals that are used as flame retardants are heavily federally regulated, adding an additional layer of inspections, certifications and fees is completely unnecessary.  These types of chemicals are approved and have been determined to be safe to use.  Further, chemicals used in consumer products, when they are scientifically determined to be unsafe are immediately taken off the market (often by the manufacturers themselves). 
Outcome: DEFEATED: This bill will not be heard in 2017. The House sponsor requested that it be taken off notice and the Senate sponsor has not requested that it be scheduled.
Committees that have closed:
Senate Energy, Agriculture & Natural Resources committee
House Business & Utilities subcommittee
We anticipate more committees will close in the week ahead. 

Tax Foundation Report Shows Mixed Results for Tennessee Business Taxes
The latest reported issued by the Tax Foundation  compares Tennessee's tax climate in a number of areas with other states.  Overall, the absence of a state income tax and the recent phase-outs of inheritance and investment taxes have bolstered our state's ranking, while our business tax climate still falls in middle of the pack relative to the other fifty states. 
In terms of our state's overall tax climate index, Tennessee ranked 13th  best in the nation, owing largely to our low tax burden on individuals.  For other areas, Tennessee was higher than many other Southeastern states, especially in the areas of sales taxes and corporate income taxes. For fuel taxes, Tennessee is the 41st  lowest in the nation.  You can see a quick summary of the rankings below.

Alabama 32 Arkansas 38 Florida 4 Georgia 36 Kentucky 34
North Carolina 11 South Carolina 37 Tennessee

 Corporate income:
Alabama 14
Arkansas 40
Florida 19 Georgia 10 Kentucky 28
North Carolina 4 South Carolina 15 Tennessee 
The brightest spot for our state in the report highlighted Tennessee's top ranking for responsible public debt practices.  When examining the state debt for FY 2014 in all fifty states, Tennessee ranks 50th,  the lowest of all states with only $924 in debt per capita.  Other surrounding states did not fare as well in their respective ranking.
Debt per capita:
Alabama 41 Arkansas 46 Florida 42 Georgia 47 Kentucky 22
Louisiana 16 Mississippi 35 North Carolina 43 South Carolina 30 Tennessee 

Growing Jobs or Government? Instructional Facilities Still an Obstacle for Expanding Career and Technical Education Options
Earlier this month, we reviewed a story from Memphis detailing how the Greater Memphis Automobile Dealers Association is planning to team up with the William R. Moore College of Technology to launch their own innovative tailor-made industry classes for aspiring automotive technicians .  The group had initially planned to locate its instructional facilities on a vacant tech center campus owned by Shelby County Schools, asking the district to donate the property for just a one-dollar annual lease.  However, despite wanting fewer vacant school buildings, SCS and the school board's facilities committee rejected giving vacant buildings away, even for educational purposes.  Now, the local Shelby County government is eyeing the same property and is asking the school board to hand it over for the same one-dollar annual rate, this time for a proposed environmental services facility.   
"I don't mind helping government... but the Moore tech guys, we said no to a dollar," SCS facilities committee chairman Billy Orgel pointedly observed. "I'd almost rather figure out something with them because they're going to train-it's going to create jobs in an area that needs jobs."
Of the 54 dealerships in the Memphis Automobile Association, and all of them report workforce shortages or hiring needs for skilled and appropriately-trained auto technicians.  A newly certified car tech can start at $35,000 and reach $65,000 in three years.
Local Chamber Alert...

Eliminating Appalachia Regional Commission, Delta Regional Authority funding would impact 73 Tennessee Counties
If President Trump's 2018 budget proposal is passed in an unaltered state, it's difficult to imagine how it would not impact rural development programs in Tennessee, but lawmakers point out the federal budget is a long way away from a done deal.  Within the proposed budget there are zero dollars appropriated for three rural development agencies - effectively eliminating the agencies - two of which serve 73 of the state's 95 counties: Delta Regional Authority (DRA) serves 21 West Tennessee counties, while Appalachian Regional Commission serves 52 Tennessee counties.  The Maryville Daily Times has an informative map.
Get Engaged : Contact your  US Senators and your US Representative (enter your zip code).  


Signing Of Executive Order Rolls Back Clean Power Plan, Significant Energy Regulations.

President Trump signed an executive order on Tuesday in a move that media reporting says fulfills a campaign promise to roll back major regulations impeding manufacturers' ability to succeed. Reuters (3/28) reports the "order's main target" is the Clean Power Plan, which requires states to "slash carbon emissions from power plants." The action, Reuters adds, also reverses a ban on coal leasing on federal lands; ends rules aimed at curbing methane emissions from oil and gas production; and reduces the consideration given to climate change and carbon emissions in policy and infrastructure permitting decisions.

NAM President and CEO Jay Timmons joined Trump at the Environmental Protection Agency where the president signed the order. Timmons said, "President Trump and manufacturers know that Americans have the capacity to create more manufacturing jobs, make American energy secure and unleash innovation for a better environment all at once. We are grateful the president kept another campaign promise." 
Surviving Active Shooter Situations 
in the Workplace
A Mitigation Strategy for Workplace Violence

Date/Time : April 20, 8:00am - Noon CDT  (half-day workshop) 
Hampton Inn & Suites
                   5001 Crossings Blvd., Mt. Juliet, TN 371222
Fee(s): $150 TN Chamber Members; $175 Non-members 
Are you responsible for delivering governmental or professional services, products, education, or health care?  If you are, the data shows that you also need to be concerned about violence in the workplace and its impact on your business and employees.

Report: Trump wants tax reform, infrastructure at same time  reports that "President Trump is reportedly looking at doing a tax overhaul and an infrastructure package at the same time."  According to the story, "infrastructure was likely going to be delayed until next year," but coupling it with a tax overhaul has now after the failure of the House GOP's ObamaCare repeal.  One report notes, "President Donald Trump feels burned by the House Freedom Caucus and is ready to deal with Democrats."

Mule Day in Columbia This Weekend
Marks the Arrival of Spring & Kickis Off the Festival Season in TN
Following a more than 40-year-old local tradition, the Mule Day Wagon Train rolled into Maury County Park on Wednesday afternoon.  For three days, the mule skinners traveled more than 40 miles on Maury County's rural roads, retracing the steps that thousands would travel every spring as they made their way to trade outside Columbia's courthouse.  The wagon train signals the official start to four days of celebration highlighting the region's rural heritage. Read more in the  Columbia Daily Herald .
The weather is predicted to be sunny and 69 degrees in the  Mule Capitol of the World.  Drive in early for one of the many breakfasts, stay for the Parade of Mules at 11:00AM, kids will love the stick mule race and the braying contest, don't miss the Mule Pulling State Championship, and if you can't get enough there is a BBQ supper & bake sale late afternoon.  There is plenty more to do in Maury county, so check out the Mule Day Saturday Calendar  here .
Cover of Mule Day program featuring last year's King Mule owned by 
Steve Eller of Lafayette, TN.

For further information, please contact:

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.