week in review from state senator doug overbey

Senate Approves No Tax Budget/
General Assembly expects to wind up business next week

With only days left before adjournment, State Senators worked this week to find common ground on the budget for the 2010-2011 fiscal year that will begin on July 1. The Senate Finance Committee approved a budget with no tax increase that reduces spending and holds the line against funding pork barrel projects in a time of economic recession.  The plan adopted by the Senate Finance Committee cuts $100 million from Governor Phil Bredesen’s $28 billion budget proposal to offset $139 million in proposed tax increases.

The Senate Finance Committee has passed a budget that prioritizes education, job creation and public safety. It also anticipates provision of $100 million in flood relief for cash-strapped local governments to draw down critical federal funds.  An additional $19.9 million is provided for sales tax rebates for the purchase of major appliances and furniture by victims certified by FEMA for federal assistance. The plan also maintains $377 million in the state’s Rainy Day Fund, which serves as our savings account in case Tennessee revenues do not meet expectations.

The plan, as amended, also provides funds in the coming fiscal year’s budget for career ladder teacher pay, perinatal outreach grants, and agricultural enhancement funds.  It also includes a longevity pay stipend for state employees contingent on revenues exceeding budgeted projections.  

The budget provides contingent funds for an employee buyout plan.  The employee buyout plan entails offering “voluntary buyouts” to reduce the state payroll by an estimated $60 million in recurring funds.  The buyout plan is based on Governor Phil Bredesen’s 2008 plan which provided cash incentives and health insurance and tuition assistance for those in targeted areas for reorganization.

The full Senate will take up the appropriations bill next week.

Worker’s Compensation bill addresses gaps
in coverage while protecting small businesses

The Senate Finance Committee approved legislation that creates a procedure for sole proprietors, partners, officers of corporations, and members of limited liability companies engaged in the construction industry to file for an exemption from obtaining workers’ compensation insurance on themselves.  The legislation, Senate Bill 3591, comes after the General Assembly voted earlier this year to suspend a new law requiring sole proprietors and partners engaged in the construction industry to carry workers’ compensation coverage on themselves.  The new law was suspended due to unintended effects of the measure.  

The legislation represents a consensus of all parties after several months of negotiations between those impacted by this matter.  It is designed to address concerns over gaps in coverage and provides exemptions so that small businesses will not be harmed.  It also addresses provability, verifiability and accountability in our state’s worker’s compensation law.  

The proposal aims to address gaps in coverage for workers in the various construction fields without harming small business owners.  The bill reinstates the requirement that sole proprietors and partners engaged in the construction industry carry workers’ compensation insurance on themselves but provides a mechanism for exemption.  

Those eligible for the exemption, include:
•    Up to three officers of a corporation
•    Certain members of a  limited liability company, if they own at least 30 percent of the company
•    Partners that own at least 30 percent of a limited partnership
•    Sole proprietors
•    Up to three members of a family-owned business

The bill requires any construction services provider requesting exemption, which has not been issued a valid license from the Board of Licensing Contractors, to obtain first a construction services provider registration from the Secretary of State.  They may then apply to the Secretary of State’s office either in person or online for an exemption.  No more than three persons on any one commercial job are eligible for an exemption. The bill also requires the provider requesting an exemption be current in paying all taxes.  

The cost, under the bill, would total $200 every two years for a construction service provider registration and exemption.  A construction service provider that has been issued a license by the Board of Licensing Contractors would pay $100 every two years for an exemption.  Costs incurred by a construction service provider will be significantly less than a worker’s compensation insurance premium based on the construction service provider’s payroll.  The bill also increases the penalties against an employer engaged in the construction industry who fails to comply with the law.

Finally, the bill creates an offense for an employer knowingly to coerce a job applicant to obtain a worker’s compensation exemption or to fire an employee due to failure to receive an exemption.  The proposal establishes a task force that will study the effects of employee misclassification in the construction industry.

The bill is supported by the National Federal of Independent Businessmen and the Home Builders Association of Tennessee.   

Legislation aims to save state government hundreds of millions by overhauling the way state government contracts for goods and services

The Senate Finance Committee approved major legislation this week overhauling the way state government contracts for the purchase of up to $25 billion in goods and services.  The legislation, Senate Bill 3598, is designed to implement cost saving strategies taken from the best practices implemented by procurement officials nationwide that could save Tennessee hundreds of millions of dollars over the long run.
 
The bill uses information contained in a State of Tennessee Procurement Assessment showing state authority for contracting is divided with one path for procuring goods and routine services and another path for the purchase of professional services.  Each path has its own rules, players, decision makers, databases, technology, policies and staff.   Without a single entity in charge of or accountable for statewide procurement spending, there is currently no easy way to manage a coherent, comprehensive, statewide cost saving strategy for procurement.  The report also said it is confusing for vendors to do business with the state due to inefficient and redundant processes.

The proposed legislation would combine procurement of goods and services for the state into one central office housed in a department to be chosen by the governor.  The governor would also appoint a single Chief Procurement Officer who has extensive qualifications and experience in contract administration to head the agency.

The Chief Procurement officer would lead a staff of 88 well-trained professionals to carryout the function of procurement management, contract management, contract compliance /quality assurance, and vendor customer relations.  An Advisory Council for State Procurement would be established to provide counsel to the new agency, replacing the present Board of Standards and Review Committee.  It would consist of representatives from state agencies, the legislative branch and the vendor community.  A State Procurement Commission consisting of the State Comptroller, the Commissioner General Services and the Commissioner of Finance and Administration would be formed to examine and approve rules, regulations and procedures for the agency under the bill.  A Protest Committee consisting of the State Treasurer, the Commissioner of Finance and Administration and the Commissioner of General Services would hear protests regarding procurement of contracts as long as they have no direct conflict of interest on the matter.

The new statewide system could also take advantage of the government’s clout as a volume-buyer to leverage more competitive bidding.   Other objectives of the legislation are to provide opportunity and fairness in state contracting and implementation of performance measures to make sure taxpayer dollars are used efficiently and effectively.  

The bill is similar to a new law implemented in Georgia and comes from the best practices obtained from the National Association of State Procurement Officials, the American Bar Association 2000 Model Procurement Code for State and Local Governments and reports from the Federal Government Accountability Office. It now moves to the floor for final consideration, having been approved in the House of Representatives earlier this week.

State Senate votes to override governor’s veto

The State Senate voted this week to uphold the Second Amendment rights of Tennesseans by overriding the governor’s veto on legislation to allow law-abiding handgun permit holders to carry into establishments serving alcohol as long as they do not consume alcoholic beverages and the owners of the premises have not posted notification that firearms are banned.  The bill, Senate Bill 3012, clarifies language in the law passed last year, particularly as it applies to the posting of notices, and adds penalties for those who consume alcohol while carrying their gun in violation of the statute.

All states surrounding Tennessee, except North Carolina, allow legal gun-carry permit holders to carry in places that serve alcohol.  Proponents of the legislation say that it upholds the U.S. and Tennessee Constitution’s right to bear arms. It also follows 13 years of experience with Tennessee’s handgun carry law that shows a record of safety among permit holders.

The bill addresses Davidson County Chancellor Claudia Bonnyman’s decision to strike down the law due to ambiguity. The measure makes clear what signs qualify as a legal posting so there is no vagueness or ambiguity. The notification must be of appropriate dimensions.  The wording must also contain key components spelled out in the proposed law or owners could post notification by using the international gun symbol drawing with a mark through it or both.  

Finally, the bill prescribes a Class A misdemeanor offense for those convicted of drinking alcohol in violation of the gun carry permit law.  In addition, those convicted of intoxication would be subject to losing their gun carry permit for three years.

Senate passes bill calling for Tennessee jails to send information
regarding prisoners who are in the U.S. illegally to ICE

The State Senate approved legislation calling for Tennessee jails to send information to the federal Immigration and Customs Enforcement office (ICE) regarding prisoners who do not have documentation that they are in the U.S. legally.  The bill, Senate Bill 1141, requires the jail keeper to fax, email or send a copy of the booking information.

The legislation makes sure that ICE and Homeland Security are informed regarding anyone who has been booked into Tennessee jails and is in the U.S. illegally. As amended, the legislation calls for statewide standards to be developed by the POST (Police Officers Standard Training) Commission.  

The bill does not apply to any county or municipality that enters into a memorandum of understanding with the United States Department of Homeland Security or ICE concerning enforcement of federal immigration laws.  The legislation now goes back to the House for approval of the Senate amendments.

In Brief ….

TNInvestco -- The State Senate has approved a jobs creation bill by expanding the state’s TNInvestco tax credit program by $80 million. The innovative new program provides investment capital to small, medium and start-up businesses in Tennessee and is considered a model job growth plan for other states. Small businesses provide 67 percent of first jobs and produce the majority of innovations. In October, six investment firms were chosen to receive an allocation of $20 million dollars in gross premiums tax credits which are then marketed to insurance companies to create a pool of venture capital funds for investment in start-up and mid-stage companies in Tennessee.  Senate Bill 3049 would allow the program to include four additional participants already selected as alternates. It also adds improvements to the bill to increase transparency and accountability in the program.  

Sex Offenders / Registry for serious juvenile offenders -- Tennessee would add juveniles convicted of the most serious sex offenses to the state’s Sex Offender Registry under legislation approved by the Senate Finance Committee.  Proponents of the bill claim that Tennessee is required to have juvenile offenders on the state’s sex crime registries under the federal Adam Walsh Act or risk losing a percentage of its Byrnes grant.  The bill, Senate Bill 2725, applies to the most violent juvenile offenders between 14 and 18 years of age who have been convicted of rape, rape of a child, aggravated rape of a child, or aggravated sexual battery.  The bill would apply if there is more than a four-year age difference between the offender and the victim in the case of the rape of a child under age 13.  Juveniles would only be added to the Registry if they are assessed under the court’s authority with the results showing the offender is at a high risk of reoffending or upon second conviction.  

Tickets / Super Speeders – The Senate Finance Committee voted to create an offense for those driving 25 mph or more above the posted speed limit, but who are not otherwise charged with reckless driving. The Court of Appeals has ruled that excessive speed alone cannot be used to charge someone with reckless driving.  Therefore, no distinction is made for those driving at super speeds unless the officer observes another driving infraction.  This legislation, Senate Bill 2523, would provide stiffer penalties of not less than $200 or more than $500 for drivers convicted under the proposal.  

DUI / Broadens definition – The definition of driving under the influence (DUI) would be broadened under legislation approved by the State Senate.  Senate Bill 2970 prohibits any person from driving while under the influence of any intoxicant, marijuana, controlled substance, drug, substance affecting the central nervous system or combination that impairs the driver’s ability to operate a motor vehicle.  The bill aims to allow for the prosecution under the state’s DUI laws of those who use other substances that impairs their driving, including huffing.  The measure now goes to the governor for his signature.

Veterans / State Contracts – Members of the Senate Finance Committee voted this week to encourage state government relationships with veteran-owned businesses that have not always had access to state government contracts.  Senate Bill 2785 calls for state agencies actively to solicit bids and proposals for equipment, supplies, and services from veteran-owned businesses.  These businesses are defined as those which are at least 51 percent-owned by a veteran who has served honorably on active duty in the U.S. Armed Forces.  The Department of Veterans Affairs estimates that there are at least 548 veteran-owned businesses in the state.

Kaiser study / Obama health care plan – Tennesseans could be paying an additional $1.5 billion in health care services in the first five years of implementation of President Obama’s health care plan passed by Congress in March.  A study by the Kaiser Foundation reports that Tennessee could add nearly a half million more residents on the TennCare program during that period.  The analysis projects the nationwide Medicaid enrollment will increase by 15.9 million at a total cost of $464 billion.