CAPITOL HILL WeeK: Legislation Providing Hall Income Tax Relief for Senior Citizens Passes Tax Subcommittee

NASHVILLE, Tenn. –  More senior citizens would qualify for Hall income tax relief under legislation sponsored by Senate Majority Leader Mark Norris (R-Collierville), that was approved by the Senate Finance Committee’s Tax Subcommittee this week.  Senate Bill 198 is part of Governor Bill Haslam’s legislative package to provide tax relief to Tennesseans.  The package also includes Senate Bill 199 to reduce the state sales tax on food from 5.25% to 5.0% which is pending consideration in the Tax Subcommittee on March 12.

 “This legislation allows more seniors to qualify for Hall tax relief,” said Leader Norris, who sponsored the constitutional amendment to enact property tax freezes for senior citizens by Tennessee municipalities.  “It dovetails very well with our property tax relief amendment for seniors and helps those who have saved for their retirement.”

The Hall tax is imposed on income derived from interest on bonds, notes and stock dividends.   Since enactment of the Hall tax in 1929, the use of investment savings has grown as a primary source of retirement income.  The legislation approved this week raises the Hall income tax exemption level for citizens age 65 and older from $26,200 to $33,000 for single filers and from $37,000 to $59,000 for joint filers.

The action by the Subcommittee builds on Hall tax relief efforts taken in 2011 which raised the exemption level for senior citizens from $16,200 to $26,200 for single filers and from $27,000 to $37,000 for joint filers. 

“Senior citizens who are on fixed incomes are hit hardest by the Hall tax,” added Norris.  “The increase in the income exemption will also make the state more competitive which is good for our economy.”

The state budget legislation provides a total of $23.1 million, which will go back to taxpayers through a combination of tax relief proposals.  In addition to the Hall tax and food tax relief bills, the budget provides funds to raise the inheritance tax exemption level from $1.25 million to $2 million as authorized by Public Chapter 1057, passed by the General Assembly last year.  Finally, the budget proposal provides tax relief for low income seniors, veterans and the disabled by fully funding the growth of the property tax freeze program enacted in 2007. 

Treasurer Lillard presents changes in retirement plan for new hires

State Treasurer David Lillard appeared before the Pension and Insurance Committee this week to present his proposal to reform the state’s Tennessee Consolidated Retirement System (TCRS) pension plan.  The proposed changes, which would only affect new employees hired on or after July 1, 2014, were brought to the legislature to ensure future generations of state employees, higher education employees and K-12 teachers will receive the benefits promised to them during their time as state employees. 

Founded in 1945, Lillard said the TCRS is in good financial shape due to the commitment of every governor and General Assembly since 1972 to fully fund it “no matter how hard it was.”  He also attributed its success to a good investment strategy and fair benefit payouts to employees.  However, he cautioned lawmakers that “changes are needed now to protect taxpayers and keep promises to employees.”

From 2009 through 2011, 43 states enacted major changes in state retirement plans for broad categories of public employees and teachers to address long-term funding issues according to the National Conference of State Legislatures.  Although Tennessee is doing better than other states with similar pension plans, earnings have fallen short of expectations over the past five years.  Lillard said changes are needed because it is uncertain how much money the retirement system’s investments will yield in the future.  He also pointed to new Governmental Accounting Standards Board rules that require cities and states to disclose all pension obligations.  Without changes, the new rules could interfere with Tennessee’s credit rating and ability to secure bonds at the best possible rate.

Senate Bill 1005, sponsored by Senate Finance Committee Chairman Randy McNally (R-Oak Ridge), would change the current defined-benefits system for new employees hired after June 2014 to a hybrid plan that includes elements of defined-benefits and defined-contribution programs. A defined-benefit plan guarantees retirees a fixed pension benefit based on their years of service and earnings, while defined-contribution plans do not have guaranteed payment levels but rather specified contribution levels by the employer.

“The proposed pension changes would not affect anyone that is currently a state employee, a teacher, a higher education employee or an employee of a local government participating in the Tennessee Consolidated Retirement System,” said Senator McNally.  “The new changes proposed represent a proactive approach to ensure the security and stability of pension benefits for current employees, retirees, as well as future employees that will be hired in years to come.” 

For more information, visit the TCRS website and select the tab titled “Proposed State & Teacher Plans”.

Two bills passed by the Senate Judiciary Committee build on legislature’s ongoing efforts to attack the problem of human trafficking in Tennessee

Two bills sponsored by Senator Doug Overbey (R-Maryville) were approved by the Senate Judiciary Committee this week that build on the legislature’s ongoing efforts to attack the problem of child prostitution and human trafficking in Tennessee.  The legislation is part of a series of bills designed to enhance penalties against those who patronize or promote the illegal act.

According to a 2011 Tennessee Bureau of Investigation (TBI) study, human sex trafficking is a widespread problem in Tennessee, with 78 of the 95 counties reporting the crime has occurred within their boundaries during the last 24 months.  The study showed that sixty-two counties reported the presence of minor human sex trafficking.   

Among other provisions, Senate Bill 447 repeals the Class A felony for trafficking for commercial sex acts of a child under 15 years of age and replaces it with a sentence enhancement for trafficking commercial sex acts of a minor.  This action would require the offender to be sentenced within Range II which adds 12 to 20 years in jail time for convicted offenders. The bill also enhances trafficking for commercial sex acts from a Class B felony to a Class A felony when the offense is gang-related, which adds 10.49 years in prison time if the offender is a criminal gang member or the offense constitutes a criminal gang offense.

The legislation additionally requires that those persons convicted of “patronizing prostitution of a minor” must register with the state’s Sex Offender Registry and changes the national hotline a minor arrested for prostitution should call to the “Tennessee Human Trafficking Resource Center hotline.”

Senate Bill 446 adds aggravated sexual exploitation of a minor, trafficking for commercial sex acts, patronizing prostitution, and promoting prostitution, to the list of offenses for which a minor or a law enforcement officer posing as a minor might be solicited.  According to the Tennessee Department of Corrections, there has been an average of almost 15 admissions each year over the past 10 years for trafficking for commercial sex acts, patronizing prostitution, promoting prostitution, and aggravated sexual exploitation of a minor.

“Human trafficking is a growing problem in Tennessee,” said Senator Overbey.  “It feeds on vulnerable victims, the young and impoverished.  This legislation will give law enforcement the tools they need to address it in a more comprehensive fashion.”

Legislation authorizing use of student photo IDs issued by state colleges and universities for voting purposes receives Committee approval

Legislation authorizing the use of student photo IDs as acceptable identification for voting purposes was approved by Senate State and Local Government Committee on Tuesday.  Senate Bill 125  also clarifies that locally issued photo library cards are not allowed under Tennessee’s voter ID law.

“This legislation allows photo IDs issued by state community colleges and state universities as an acceptable form of identification,” said Senator Bill Ketron (R-Murfreesboro), sponsor of the proposal.  “We allowed the use photo identification of faculty members of our state colleges and universities under the original Tennessee law which passed in 2011.  We believe that this state-issued ID has worked as a sufficient form of identification and that students should also be included.”

Ketron said the legislation clears up any confusion regarding locally issued cards which he said were not supposed to be allowed under the original law passed in 2011.  This includes any library cards issued by local governments.  It also prohibits the use of out-of-state identification.

The Tennessee Court of Appeals ruled last fall that library cards issued by the Memphis Library were an acceptable form of identification for voting purposes.  The court said that the 2011 law did not clearly spell out that locally issued photo identification cards were not allowed.  The state appealed that decision. 

“We considered locally-issued cards when debating the original bill, but after reviewing the process, decided that the safeguards were not in place to ensure the integrity of the ballot like state and federally-issued identification,” said Senator Ketron.  “We continue to believe that the safeguards are not in place to use these cards as acceptable identification for voting purposes.” 

“This is simply a bill to make it clear that the photo identification must be state or federally issued photo ID cards, and that students attending state universities can use their photo ID when voting,” he concluded.

In Brief…

Home School Students / Athletic Participation — The full Senate has passed legislation authorizing home school students to participate in interscholastic athletics at the public school in which they are zoned. Senate Bill 240, sponsored by Senator Stacey Campfield (R-Knoxville), gives home-schooled students an opportunity to try out for the local school sports teams if they meet the same health, academic and conduct standards required of other participants.  The bill was fueled by the success of NFL quarterback Tim Tebow who was a home schooled student.   The legislation is not in conflict with Tennessee Secondary School Athletic Association (TSSAA) standards as the organization has opted to leave the decision about participation of home schooled students to local boards of education.

Safe Harbor / Infants — Legislation which aims to improve health outcomes for infants born to drug-addicted mothers has received final approval in the State Senate.  Senate Bill 459, sponsored by Senator Ken Yager (R-Harriman), encourages pregnant women who misuse prescription opioids to access early prenatal care and drug rehabilitation.  In exchange, they would be given a safe harbor from having their parental rights terminated through a petition filed by the Department of Children’s Services due to prenatal drug abuse.  The safe harbor only applies if the mother is seen by an obstetrician provider within the first 20 weeks of her pregnancy, attends regular prenatal visits and complies with substance abuse treatment.  The bill requires treating physicians to give priority at public treatment centers to pregnant women seeking care through provisions of the legislation.

Good news on jobs front — Tennessee has created nearly 80,000 new jobs since 2011 according to Economic and Community Development Commissioner Bill Hagerty.  The Commissioner told committee members his department had held approximately 6,000 meetings with companies looking to locate or expand jobs here and attended over 12,000 meetings with community leaders. Tennessee ranks first in the Southeast in new manufacturing jobs created in 2012 due to increased legislative and administrative efforts to bring new and better paying jobs to the state.

Commerce and Jobs / Legislation Impact Notes — Legislation that requires state lawmakers to look at the impact a proposed law will have on commerce and jobs in Tennessee was approved this week in the Senate State and Local Government Committee.  Senate Bill 116, sponsored by Senator Bill Ketron (R-Murfreesboro), directs the General Assembly’s Fiscal Review Committee to consider, as part of its analysis on proposed legislation, the financial impact of certain bills on commerce and jobs in Tennessee.  Approximately one-third of bills filed in the General Assembly affect business and commerce.  The business-friendly bill is endorsed by the Chattanooga Area Chamber of Commerce, Knoxville Chamber of Commerce, Greater Memphis Chamber of Commerce, Nashville Area Chamber of Commerce and the National Federation of Independent Business (NFIB).

World War I — The Government Operations Committee voted this week to approve legislation recognizing the centenary of WWI.  Senate Bill 9, sponsored by Senator Jim Summerville (R-Dickson), would form a “Great War Commission” that would be charged with facilitating recognition of the 100th anniversary of WWI and Tennessee’s role in that war.  Over 100,000 Tennesseans were drafted or volunteered to serve in the armed services with six of those receiving the Medal of Honor. The commission would be responsible memorializing those Tennesseans that made the ultimate sacrifice and those that returned home severely wounded. It would have the ability to work with national and local organizations, accept loans and donations, and coordinate educational initiatives.

Public Utilities / Pole Attachments — Legislation advanced through the Senate Commerce Committee this week to provide Tennessee with a specific framework to promote efficient, fair and reasonable rates for cable and internet providers to attach communications gear to poles owned by electric cooperatives and municipal utilities.  Senate Bill 1222, sponsored by Senate Speaker Pro Tempore Bo Watson (R-Hixson), provides a method for calculating the costs of pole attachments.  The bill also provides a fair process for dispute resolution through an Administrative Law Judge in cases when the electric cooperative or the municipality disagree about the costs for pole attachment.  In addition, the legislation puts a cap on what can be charged for the attachment.  Finally, the bill sets up a 12-member operation working group with 6 members from each side to continue to keep the lines of communication open regarding pole attachment issues in the future. 

Armed Forces / Leave — The full Senate has approved legislation that would enable public employees who are members of any reserve component of the armed forces to use up to five days of sick leave in lieu of annual leave so that the service member would not have to take leave without pay. Senate Bill 667, proposed by Senator Dolores Gresham (R-Somerville), includes members of the Tennessee Army and Air National Guard. In order to qualify for this benefit, the employee must have received 20 working days of compensation.

Polling Places — State Senators have approved Senate Bill 549, sponsored by Senator Mike Bell (R-Riceville), which allows only US citizens to enter polling places. The legislation would also require that polling volunteers also be citizens. “I believe the most sacred place in our government is the polling place. This bill is about protecting the integrity of the elections,” said Bell.

Schools / Medal of Honor Character Development Program — Final approval has been given to Senate Joint Resolution 45, sponsored by Senator Becky Massey (R-Knoxville), which encourages the use of the Congressional Medal of Honor Character Development Program by Tennessee public schools. The nationwide program sponsored by the Congressional Medal of Honor Foundation seeks to incorporate the ideals of courage and selfless service into middle and high school curriculum across the country.

Reestablishment of Native Species in Reclaimed Coalfields — The full Senate has approved Senate Joint Resolution 111 urging the Tennessee Department of Environment and Conservation and federal Office of Surface Mining Reclamation and Enforcement to study the feasibility of reestablishing plant and animal species native to Tennessee’s coalfield areas.  The goal of this cooperation is to encourage appropriate reclamation methods of coal mined lands in order to maximize the reestablishment of native species.  The coal mining industry is actively involved in efforts to reestablish the American chestnut tree that once was plentiful in Tennessee.  Reclaimed coal mines have also facilitated the reintroduction of more than 400 elk into Tennessee.  The resolution is sponsored by Senate Energy, Agriculture and Environment Committee Chairman Steve Southerland (R-Morristown).

E-Citations — The Senate Transportation Committee has approved a bill setting up a framework for the issuance of e-citations in Tennessee.  An e- (electronic) citation is an automated traffic ticket that is prepared by a law enforcement officer and filed electronically with the court.  Senate Bill 846, sponsored by Senator Bill Ketron (R-Murfreesboro, aims to cut the time police officers spend on the side of the road at a traffic stop from an average of 15 to 18 minutes to 8 to 10 minutes, freeing them up for more important duties.  Several tragic accidents involving law enforcement officers during traffic stops point to a real safety concern during issuance of citations.  The bill also eliminates concerns over legibility of handwritten citations and clerical errors, as well as reducing the costs for data entry processing of citations to the courts.  In order to defray the costs of the system, a $5.00 fee would be would be paid by defendants that plead guilty or are found guilty.  Currently six cities in Tennessee use e-citations and two are in the process of implementing the system.   Alabama, Arkansas, North Carolina and Georgia have already implemented e-citations in their state.

Middle Tennessee Dams / Fishing — The Senate Energy, Agriculture and Environment Committee voted this week to urge the U.S. Army Corp of Engineers to work with local communities and the Tennessee Wildlife Resources Agency regarding alternative safety methods rather than closing boater access above and below 10 Middle Tennessee dams.  The action to close the waters, which have some of the highest fish catch rates, would negatively impact fishing, recreation and tourism.   The resolution calls on the Corp of Engineers “to hold the current plan in abeyance until alternative plans are investigated that promotes both boater safety and the recognizes the outstanding fishing and tourism opportunity in these areas.”  The Dams include Barkley, Center Hill, Cheatham, Cordell Hull, Dale Hollow, J. Percy Priest, Laurel River, Martins Fork, Old Hickory, and Wolf Creek.   Senate Joint Resolution 132 is sponsored by Senator Mae Beavers (R-Mt. Juliet).

Service Animals — Senate Bill 1026  was approved by the Senate Judiciary Committee this week requiring the value of a service dog include any training or veterinary care in setting the punishment when a person is convicted of intentionally killing the animal.  The value would also include disposal or burial costs for the dog. Under current law, the killing of an animal that belongs to another is equitable to theft of property. This bill, , sponsored by Senator Doug Overbey (R-Maryville), adds these components to the court’s consideration when deciding the value of the dog, given the training involved and their tremendous contribution to the community or owner.

State Veteran Homes – Tennessee’s has two state veteran nursing homes which were named by U.S. News & World Report as among the best in the country. U.S. News rated more than 15,000 nursing homes using data research on nursing home safety, health inspection and staffing.  The source of the data originates from the Centers for Medicare and Medicaid Services (CMS).  In 2012, CMS issued five star ratings to the Ben Atchley State Veterans’ Home in Knoxville and the Tennessee State Veterans’ Home in Murfreesboro.

Newborns / Pulse Oximetry Testing — The recently enacted legislation requiring that all newborns in Tennessee be evaluated with the simple pulse oximetry test to see if they have undetected congenital heart disease has paid off for one fortunate infant according to William F. Walsh, Professor of Pediatrics and Chief of Nurseries at the Monroe Carell Jr. Children’s Hospital at Vanderbilt.  Public Chapter 556 , sponsored by Senator Doug Overbey (R-Maryville), required the state’s Genetic Advisory Committee to develop a program to screen newborns for critical cyanotic congenital heart disease (CCCHD) using pulse oximetry by January 1, 2013. The infant had normal evaluations before delivery by his obstetrician and after birth passed his physical examination.  However the new screening test detected a low saturation of blood which was not visible to the naked eye. He was referred to a cardiologist where he was found to have a life threatening narrowing of the major blood vessel to the body.  He was referred for surgery and is now recovering.



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