If all goes according to plan, the 111th Tennessee General Assembly should adjourn in about five weeks. Most House subcommittees are closed, and most committees are wrapping up their business. Here are some highlights of what’s passed, what’s failed and what debates remain.
GREAT NEWS! The repeal of the unfair amusement tax on small gyms (SB 960/HB 1138) passed 95-0 in the House and 28-1 in the Senate. The bill levels the playing field for smaller fitness centers to compete with large big box gyms that weren’t collecting the nearly 10 percent tax and will help more Tennesseans stay fit. NFIB thanks Gov. Bill Lee for his leadership on this issue, as well as Senators Richard Briggs (bill sponsor), Jack Johnson, Steve Dickerson and Lt. Gov. Randy McNally and Representatives Charlie Baum (bill sponsor), Mark White, Martin Daniel, Andy Holt, Susan Lynn, William Lamberth, and House Speaker Glen Casada.
NFIB has engaged on several tax issues impacting small business owners in certain industries (like automatic car washes and waste haul/dumpster bins). NFIB is quite concerned, along with other groups, that too many retroactive tax assessments are being issued by the Department of Revenue when grey area exists, in particular when there is no specific legislative authority to tax these industries (92% on recent NFIB TN special survey) and when field audits are being used to establish tax policy (73%).
HB 84/SB 237, which makes clear that services related to automatic car washes are not taxable, passed the House Monday evening 85-2. Without this legislation, small operators in this industry would be severely impacted. Also, NFIB introduced a bill (HB 1441/SB 1309) that sought to clarify state policy for taxation of waste haul disposal units (dumpsters) that is unfair and very unclear. As a result of our efforts, an NFIB member in Crossville who was audited will not be issued a three-year retroactive assessment, and the Department of Revenue has pledged to issue guidance soon to establish prospective requirements of industry participants. NFIB thanks the bill sponsors, Rep. Chris Todd and Sen. Jon Lundberg, both NFIB members, for progress made. We plan to engage stakeholders to address the broader issue of unfair retroactive tax assessments.
The always important House Employee Affairs Subcommittee has closed, as has the full committee. Chairman Clark Boyd, an NFIB member from Lebanon, has been very supportive of small business, as have subcommittee chairs John Holsclaw (NFIB member) and Mike Sparks. Please thank them and other members of the full committee. Committee members David Hawk, Rush Bricken, Mark Cochran and Lowell Russell were very supportive on small business issues. The Senate Commerce & Labor Committee, chaired by NFIB member Paul Bailey, remains open.
Here’s a summary of activity on key bills:
SB 433/HB 12, “Lemonade Stand Bill”: Allows children under 18 to sell lemonade, etc., without having to get a license, pay fees. Passed the House; passed the Senate Monday evening 33-0.
SB 510/HB 419, Right to Shop Act supported by NFIB (as amended): A good starting point to improve transparency in healthcare and incentivize health insurance plan enrollees to shop for non-emergency, outpatient services. In committees this week
HB 986/SB 758, Pregnancy Workers Fairness Act: NFIB and the TN Chamber proposed a compromise amendment, but it was declined by the sponsors/advocates. NFIB could not support a new cause of action that would have stacked state claims on federal claims (the law is already robust) or a reasonable accommodation standard of eight employees or more (current federal law is 15). Our amendment 1) offered state mediation by the Office of the Attorney General for contested claims, but not by the Human Rights Commission as proposed; 2) aggressive education of all existing federal and state responsibilities for employers and rights for pregnant workers, including a prominently displayed online resource with the Department of Labor & Workforce Development; and 3) a reasonable accommodation standard of 15 employees, much like the EEOC’s.
HB 856/SB 815: Adds private employers to the Healthy Workplace Act of 2014 (anti-bullying policies). It is permissive for employers. As amended, the bill ensures private employers have the same immunity protections as public employers. Passed House; in Senate Commerce Committee this week.
SB 466/HB 539, IRS 20-factor test for unemployment, replacing the current TN ABC test: The original bill included workers’ comp, which was removed after the business community expressed concerns about undermining many years of common law. The House removed workers’ comp, and the amended bill passed unanimously. The Senate has not taken action, but NFIB is supportive of the amended bill since the new test for unemployment is favorable to employers.
HB 1239/SB 1165, drops TN’s e-Verify mandate from 50 employees to 25. NFIB is neutral. The original bill was too onerous (dropped mandate to six employees, made contractors liable for subs’ hiring of illegals, issuance of work stops for major projects where illegals are hired). This bill has advanced through House committees but has not been calendared in Senate Commerce yet.
HB 387/SB 380, well-intended legislation that could have had a significant negative impact on our employer-employee relationship laws. NFIB has pledged to work over the summer with committee members and the sponsors to find alternative ways to protect independent contractors who are sexually harassed, without having frivolous lawsuits.
The Statewide Standardization Bill, supported by NFIB based on 2019 Ballot results, has passed both chambers. The legislation establishes that state government has authority over any restrictions on auxiliary containers and food standards, making it clear they are not subject to local ordinance. The legislation will ensure employers in food retail and food service abide under one set of rules rather than by community patchwork. The legislation is necessary since the cities of Nashville and Memphis have considered or are considering regulation of plastic disposables and menu labeling. Senator Richard Briggs, who voted for the bill, announced he is planning to introduce some form of a statewide ban on plastics in 2020.
We expect the state budget to pass in about four weeks and adjournment in early May. NFIB will be reading amendments closely the next few weeks to make sure your business is protected, but please let us know if you have any comments, questions or concerns.