The Tennessee Bankers Association is pleased to present this review of 2016 Tennessee legislation affecting the banking industry. With each entry are included a public chapter number summary with a link to full text and the effective date.
Please contact us if you would like more information about these new laws and the impact they may have on your bank.
Tim Amos, Executive Vice President & General Counsel
Amy Heaslet, Senior Vice President & Deputy Counsel
Table of Contents
Requirements for Signs Prohibiting Firearms
Public Chapter 638 (SB 774 / HB 682)
Establishes new minimum requirements for signs prohibiting firearms in a corporation, business entity or local, state or federal government entity. Declares the sign shall include the phrase "NO FIREARMS ALLOWED" and T.C.A. citation. This phrase (but not the T.C.A. citation) must measure at least one inch high and eight inches wide. This bill further requires that the sign include a pictorial representation of the phrase "NO FIREARMS ALLOWED" that includes a red circle with a red diagonal line through the circle and a black image of a firearm inside the red circle under the diagonal line, with the representation to be four inches high and four inches wide.
Decreasing Time Period for Charging a Fee for Vehicle Storage
Public Chapter 649 (SB 14756 / HB 1443)
Reduces, from 60 days to 21 days, the maximum period of time in which a person engaged in towing and storing motor vehicles may charge a vehicle's owner or lienholder a storage fee. Decreases the time from 14 days to 10 days required to give notice for any additional fees beyond 21 days.
Dissolution of Business Entities
Public Chapter 688 (SB 1871 / HB 2337)
Specifies that corporations, nonprofit corporations, and LLCs that have been administratively dissolved by expiration of their period of duration may reinstate within three years by amending its charter or articles to extend its duration or set its duration to perpetual and filing an application. Clarifies that a corporation cannot divert the purpose of charitable property that the corporation holds in trust by amending its bylaws, rather than its charter, without a court order. Makes expiration of a period fixed in the articles of incorporation for an LLC a basis for the secretary of state to commence a proceeding to administratively dissolve an LLC. Under present law, expiration of a period fixed in the articles of incorporation is an event that will automatically cause the LLC to dissolve.
Notification Regarding Unauthorized Release of Personal Information
Public Chapter 692 (SB 2005 / HB 1631)
Redefines the time period within which a business must notify a consumer if the consumer's personal information that was held by the business was obtained by an unauthorized person from immediate notification to no later than 45 days; includes employees of the business who use the information in an unlawful manner as unauthorized persons, thus triggering the notice requirements. This law does not apply to financial institutions subject to Title V of the Gramm-Leach-Bliley Act of 1999.
Revisions for Accreditation and Reinsurance
Public Chapter 735 (SB 2532 / HB 2568)
Establishes governance standards for risk retention groups and requires existing risk retention groups to ensure compliance with such standards by April 7, 2017.. Requires each registered insurer and each registered health maintenance organization to report to the commissioner of commerce and insurance all dividends and other distributions to shareholders within five days following the declaration thereof and at least ten days prior to their payment. Current law specifies 15 days following the declaration. Requires the commissioner to promulgate rules that establish procedures to consider promptly the informational prepayment notices and standards and to review annually all ordinary dividends within the preceding 12 months. Revises various provisions regarding accreditation and reinsurance of insurance companies
Certain Private Employers Subject to E-Verify Program
Public Chapter 828 (SB 1965 / HB 1830)
Makes various changes to the Tennessee Lawful Employment Act, including requiring, beginning January 1, 2017, a private employer with 50 or more employees to enroll in the E-verify program.
Appropriations for FY 2015-2016
Public Chapter 758 (SB 2653 / HB 2629)
Makes appropriations for the fiscal years beginning July 1, 2015, and July 1, 2016. The total budget is $35 billion and includes reducing the Hall Income tax by 1 percent; adding additional money to the state’s Rainy Day Fund, and dedicating $104 million for teacher pay raises and more than $1.7 billion for higher education.
Enacts the Tennessee Recreation Vehicle Franchise Act of 2016
Public Chapter 781 (SB 1980 / BH 2471)
Enacts the "Tennessee Recreation Vehicle Franchise Act of 2016." Generally, under present law, persons who sell RVs are subject to the laws governing motor vehicle dealers in regard to licensure and other requirements to engage in such business. Creates a separate system for licensure and establishes other requirements for recreational dealers and manufacturers, which are similar to the existing laws for motor vehicle dealers. Defines "recreational vehicle" as a vehicle that is either self-propelled or towed by a consumer-owned tow vehicle, and designed to provide temporary living quarters for recreational, camping, or travel use. Requires a person to be licensed with the motor vehicle commission in order to engage in business as, serve in the capacity of, or act as a manufacturer, factory representative, recreational vehicle dealer, or recreational vehicle salesperson, and makes it unlawful for any person to commercially engage in any activity involving the distribution or sale of RVs without first qualifying for and obtaining a license or licenses specifically authorized by this bill. This bill sets out in detail the process for applying for a license; the grounds on which a license may be denied, suspended, or revoked; the process for the sponsor or promoter of an RV show to obtain a permit from the commission; and the requirements for such shows. This bill prohibits an RV dealer from selling a new RV in this state without having first entered into a manufacturer/dealer agreement with a manufacturer or distributor that has been signed by both parties. This bill establishes requirements and provisions governing: (1) the cancellation, termination, or nonrenewal of a manufacturer/dealer agreement by a manufacturer, distributor, or dealer; (2) succession or transfer of a dealership; (3) warranty obligations; (4) indemnification; (5) inspection and rejection of a recreational vehicle by a dealer; (6) the prohibition on a manufacturer or distributor coercing or attempting to coerce a dealer to engage in certain activities; and (7) mediation.
Abandoned Aircraft at Airports
Public Chapter 800 (SB 1659 / HB 1434)
Authorizes, under certain circumstances, an airport authority to sell an aircraft abandoned on the airport authority's property; and establishes procedures for conducting the sale, notifying interested parties, and enforcing a lien for unpaid storage fees.
Storage Fees for Towed Vehicles
Public Chapter 867 (SB 2334 / HB 2402)
Prohibits certain persons engaged in the business of towing or storing motor vehicles from charging a storage fee for any day on which the vehicle is not available for release to the owner, lienholder, or insurer, unless such failure to release is based on a hold placed on the vehicle by law enforcement; requires such businesses to release the vehicle to the insurer or lienholder, or an authorized agent or representative, upon the insurer's or lienholder's payment of reasonable charges due, without requiring additional consent from the owner of the vehicle.
Defines Funeral Merchandise for Prearrangement Insurance Policies
Public Chapter 911 (SB 621 / HB 199)
Effective 4/27/2016 for purposes of promulgating rules; 1/01/2017 for all other purposes.
Makes various changes to the Tennessee Prepaid Funeral Benefit Act and Title 46 of Tenn. Code Ann. relative to the financial management of cemeteries, consequently authorizing cemeteries to offer pre-need sales contracts that offer funeral merchandise in addition to cemetery merchandise. Defines “cemetery merchandise” as merchandise sold by a funeral establishment, cemetery, or any other individual, partnership, company, corporation or association, intended for use in the final disposition of a human corpse.
The Fantasy Sports Act
Public Acts 978 (SB 2109 / HB 2105)
Effective 4/27/16 for purposes of promulgating rules; 7/01/2016 for all other purposes.
Requires any person offering fantasy sports contests through an online digital platform that enables Tennessee consumers to participate in contests to be licensed as a fantasy sports operator by the secretary of state. Requires an application for such license be submitted to the secretary of state along with a fee.
Qualified Data Centers – Capital Investment Reduction
Public Chapter 1001 (SB 2537 / HB 1535)
Reduces the capital investment requirement for eligibility for qualified data center sales and use tax exemptions from $250 million to $100 million; exempts cooling equipment and backup power equipment sold or used by qualified data centers from the sales and use tax; requires a qualified data center that applies for job tax credits to certify that it has not, within the previous 12 months, been found to be in violation of certain laws.
Captive Insurance Companies
Public Chapter 1018 (SB 2402 / HB 2228)
Establishes a new method by which a captive insurance company may redomesticate to this state. Creates a one-time tax holiday from self-procurement taxes for a Tennessee resident captive owner who re-domesticates a captive to Tennessee or creates a captive in Tennessee and moves substantial business into that new captive from a foreign or alien captive prior to December 1, 2018, if certain capital requirements are met. Clarifies that protected cells have to be specifically named in lawsuits and, if not, then the lawsuit will only be against the core protected cell company and they cannot have their assets used to satisfy a judgment against another cell. Changes the financial reporting date from March 1st to March 15th.
Uniform Fiduciary Access to Digital Assets Act
Public Chapter 570 (SB 326 / HB 774)
Enacts the "Uniform Fiduciary Access to Digital Assets Act." Specifies the personal representative of the decedent has the right to access the content of an electronic communication that the custodian is permitted to disclose, any catalogue of electronic communications sent or received by the decedent, and any other digital asset in which at death the decedent had a right or interest. Permits the court to grant a guardian or conservator the right to access certain electronic communications and digital assets regarding a minor or person with a disability. Specifies other rights pertaining to digital assets and electronic communications regarding fiduciaries.
Fiduciary Request of Court Approval to Change Nature of Investment
Public Chapter 640 (SB 1810 / HB 1700)
Grants the court discretion to waive the requirement that a fiduciary request court approval for any change in the nature of any investment if a minimum balance is maintained and other requirements are met; ans adds income-producing property to the list of approved investments.
Definition of Private Trust Company
Public Chapter 714 (SB 2550 / HB 1547)
Effective Date 4/06/2016
Legislation from the Tennessee Department of Financial Institutions. Broadens the scope of "family" for the purpose of a private trust company. Defines "family member" as a designated ancestor and: (1) an individual within the 12th degree of lineal kinship of a designated ancestor; (2) an individual within the 11th degree of collateral kinship of a designated ancestor; (3) a spouse or former spouse of a designated ancestor or of an individual defined as a family member in (1) or (2); and (4) an individual who is a relative of a spouse or former spouse specified in subdivision (3) who is within the 5th degree of lineal or collateral kinship of the spouse or former spouse. Defines "lineal kinship" as direct ancestors and descendants of an individual and defines "collateral kinship" as a relationship that is not lineal, but stems from a common ancestor. Redefines “transact a trust business” to refer to transactions with a client who is not a "family client." Defines "family client,” "family affiliate" and "family services provider."
Filing of Court Accountings Regarding Distributees of Residue
Public Chapter 809 (SB 2254 / HB 2172)
Requires that waivers that excuse a personal representative from filing court accountings be sworn by the distributees of the residue file; authorizes a person named executor in a decedent's last will and testament to decline to serve as such personal representative by filing a sworn statement or statement under penalty of perjury with the court; changes references from "executor or administrator" to "personal representative'' in the provision authorizing an executor or administrator to resign or relinquish trust.
Sharing FBI Criminal Background Information
Public Chapter 745 (SB 2549 / HB 1546)
Legislation from the Tennessee Department of Financial Institutions. Allow the TDFI to request the FBI to do criminal history background checks for alternative financial service providers; specifically those licensed under the recently enacted Tennessee Flex Credit Act.
Contributions to ABLE Accounts for Students
Public Chapter 793 (SB 2504 / HB 2592)
Authorizes the use of individual education account funds for contributions to an achieving a better life experience (ABLE) account for the benefit of a participating student. Deletes requirement that eligibility for ABLE program be limited to state residents and residents of contracting states.
Increases Amount of Funds Payable upon Death
Public Chapter 804 (SB 1972 / HB 1894)
Increases the amount of checks from $2,500 to $10,000 that banks and savings and loan associations may negotiate if written to a deceased person if no estate is open or it is already closed and presented by a personal representative, surviving spouse or next of kin. It also increases the maximum amount of a life insurance policy from $7,500 to $15,000 in order that a photocopy of a certificate of death, along with certain statements, may constitute proof of death. It also increase the amount from $10,000 to $15,000 that a bank may pay from a deceased depositor’s account to a personal representative or to pay funeral or medical expenses when there is no executor of the estate.
Removes Condo Associations’ Super Priority Lien for Delinquent Dues
Public Chapter 866 (SB 2397 / HB 2401)
Removes the ability of an HOA-initiated foreclosure under the Tennessee Condominium Act to extinguish a first mortgage lien, but would allow HOAs the continued ability to foreclose but not extinguish a first or contemporaneous mortgage and provide HOAs a “payment preference” in foreclosure proceeds if a lender forecloses up to six months of delinquent dues or 1 percent of the maximum indebtedness of the first mortgage or deed of trust. It would also require HOAs to record their lien if they seek more than 6 months of delinquent dues or 1 percent of the maximum principal indebtedness.
Fees for Sheriffs and Constables
Public Chapter 582 (SB 1488 / HB 1467)
Authorizes sheriffs and constables to collect the same fee payment for unsuccessful service of process as successful service, provided, that service is attempted in accordance with the laws of the state. Current law specifies that the sheriff or constable is only entitled to $9.00 for returning any service of process where the sheriff or constable attempts service but is unsuccessful.
Limits on Certain Compensatory Damages
Public Chapter 593 (SB 1785 / HB 1774)
Limits to $25,000 the amount of compensatory damages awarded to each complaining party for losses in certain retaliatory discharge actions against employers with less than eight employees at the time the cause of action arose.
Government Imposter and Deceptive Advertisements Act
Public Chapter 594 (SB 1928 / HB 2049)
Prohibits the following acts and practices and declares them to be unfair and deceptive acts: (1) using or employing an advertisement for purposes of selling goods or services that simulates a summons, complaint, jury notice, or other court, judicial, or administrative process of any kind; (2) representing, implying, or otherwise causing a likelihood of confusion that goods or services, advertisement, or offer was sent or distributed by or has been approved, authorized, or endorsed, in whole or in part, by a governmental entity, when such is not true; (3) using or employing language, symbols, or content, such as emblems, titles, or websites, that represents, implies, or otherwise causes a likelihood of confusion that goods or services, advertisement, or offer is from a governmental entity, when such is not true; and (4) failing to disclose on the advertisement when offering items that are available free of charge or at a lesser price from a governmental entity. Sets out specific requirements for such disclosures.
Supreme Court to Set Costs for Services Performed by Court Clerks
Public Chapter 721 (SB 2022 / HB 1791)
Allows the supreme court, through order or rule, to set all filing costs, fees, charges, and surcharges for documents filed in and functions performed by the clerks of the appellate courts or board of judicial conduct. Authorizes the appellate court clerks to charge a transaction, subscription or other fee to users of the electronic filing system, once implemented.
Expands Applicability of Neighborhood Preservation Act
Public Chapter 727 (SB 2300 / HB 1932)
Expands the applicability of the Neighborhood Preservation Act to certain occupied buildings and residential properties by authorizing a person to bring a civil action against the owner of an occupied building or property that is not properly maintained or that fails to comply with certain ordinances or regulations.
Supreme Court – Application for Interlocutory or Extraordinary Appeal
Public Chapter 755 (SB 1781 / HB 1734)
Authorizes the supreme court, upon its own motion, to assume jurisdiction over an application for interlocutory or extraordinary appeal that is filed with an intermediate state appellate court.
Approval of Transfer of Structured Settlement Payment Rights
Public Chapter 795 (SB 760 / HB 586)
Requires an application for approval of a transfer of structured settlement payment rights to be made by the transferee and permits the application to be brought in the county in which the payee resides or where the settlement was approved or judgment rendered in the underlying tort claim, or in the court or before the authority that approved the structured settlement agreement; revises other provisions regarding structured settlements.
Witness Signatures for Wills
Public Chapter 843 (SB 1560 / HB 1472)
For wills executed prior to July 1, 2016, considers signatures to an affidavit meeting the requirement of a holographic will as signatures to a will for purposes of the will being properly executed, if the signatures are made at the same time as the testator signs the will and the affidavit contains language meeting all the requirements of an otherwise properly executed will. Creates a rebuttable presumption that the testator and witnesses signed at the same time if the signatures are made on the same day. Any affidavit used to properly execute the will under the bill as amended cannot also serve as a self-proving affidavit. Any will executed after July 1, 2016, is required to meet all statutory requirements of the current law.
Expands Provisions Authorizing Garnishment of Earnings
Public Chapter 851 (SB 1969 / HB 1775)
Revises provisions governing the garnishment of earnings; changes references from garnishment of "salaries, wages or other compensation" to garnishment of "earnings".
Deletes Time Requirement for Filing Civil Action for Housing Discrimination
Public Chapter 863 (SB 1884 / HB 2335)
Eliminates requirement that a party remove a case to state court within 90 days after the complaint is filed if the Tennessee human rights commission determines there is reasonable cause to believe discrimination took place in regard to housing.
Prohibits Landlords from Evicting Victims of Domestic Abuse
Public Chapter 895 (SB 2592 / HB 2116)
Specifies that if domestic abuse is the underlying offense for which a tenancy is terminated, only the perpetrator may be evicted. Even if evicted or removed from the lease, the perpetrator shall remain financially liable for all amounts due under the lease agreement. The rights under this Act shall not apply until the victim has been judicially granted an order of protection against the perpetrator and a copy of the order is provided to the landlord. This Act shall not apply to any rental property located in a county governed by the Uniform Residential Landlord and Tenant Act.
Posting Notice to Prevent Firearms
Public Chapter 947 (SB 1736 / HB 2033)
Provides immunity from civil liability to a person, business, or other entity that owns, controls, or manages property and has the authority to prohibit weapons on that property by positing, with respect to any claim based on the person's, business's, or other entity's failure to adopt such a policy.
Charging of Transaction Fee for Electronic Filings and Signings
Public Chapter 970 (SB 1998 / HB 1857)
Authorizes clerks in courts where electronic filing, signing or verification of papers has been authorized by local rule and in accordance with Rule 5B of the Tennessee Rules of Civil Procedure to assess a transaction fee for each party to the case not to exceed $5 per filing or $50 per case.
Establishes an Adult Protective Investigative Team
Public Chapter 1006 (SB 2588 / HB 1936)
Requires, by January 1, 2017, the district attorney general of each judicial district to establish a vulnerable adult protective investigative team in order to coordinate the investigation of suspected instances and coordinate responses to suspected instances of abuse, neglect or exploitation of an adult.
Prohibits Temporary Injunction If Owner Is Not Person Creating the Nuisance
Public Chapter 1067 (SB 1200 / HB 255)
Permits a court to dismiss or continue a nuisance action if the property owner was unaware of the nuisance prior to receiving notice and has taken steps to abate the nuisance after receiving notice.
Judgment of Partition – Appointment of Commissioners
Public Chapter 1078 (SB 1692 / HB 1527)
Requires, upon the filing of a suit for partition of real or personal property, the parties to submit the names of three commissioners selected and agreed upon by the parties; specifies that if the parties are unable to agree, the judge will appoint three commissioners.
Tennessee Commission on Aging and Disability
Public Chapter 544 (SB 1511 / HB 1607)
Extends the Tennessee commission on aging and disability four years to June 30, 2020.
County Workhouse and Other Public Financial Records
Public Chapter 571 (SB 1354 / HB 192)
Requires a state officer, employee, or user of certain programs to receive approval from the office of state and local finance and either the Tennessee local development authority, state school bond authority, or state funding board, as applicable, before authorizing any change, amendment, or modification to a project or program that would affect the tax-exempt status.
Residency Requirements Not Allowed for Construction Contracts
Public Chapter 587 (SB 1621 / HB 1674)
Prohibits the state or any local government from requiring a company bidding on a state or local construction project to employ individuals who reside within the jurisdiction of the state or local government.
Information Requests by Private Employers to Local Governments
Public Chapter 606 (SB 2103 / HB 2002)
Prohibits a local government, as a condition of doing business within the jurisdictional boundaries of the local government or contracting with the local government, from prohibiting a private employer from requesting certain information on an application for employment or during the process of hiring a new employee.
Records Received for Surveys by Comptroller Are Confidential
Public Chapter 618 (SB 1639 / HB 1682)
Specifies that records received for surveys created, obtained, or compiled by the comptroller of the treasury are confidential; exempts surveys conducted by the office of open records counsel from this confidentiality requirement.
Collection of Funds by Credit or Debit Card by Local Governments
Public Chapter 621 (SB 1838 / HB 1698)
Removes provision whereby a processing fee may not exceed five percent of the amount of payment collected by credit or debit card in regard to the authority for a local government to set and collect a processing fee in an amount that is equal to the amount paid to a third-party processor for processing the payment.
Biennial Budgets for Certain Local Governments
Public Chapter 626 (SB 2176 / HB 2419)
Authorizes the comptroller to allow a municipality to submit two annual budgets every two years (a "biennial budget"), if the comptroller or the comptroller's designee determines that the municipality operates with sufficient financial resources to more than adequately service its issued debt.
Putnam County – Removal of Vegetation and Debris from Property
Public Chapter 681 (SB 1462 / HB 1439)
Permits the removal of overgrown vegetation and accumulated debris on owner-occupied residential property in Putnam County. Costs of removed, if not paid by the owner, becomes a tax lien on the property.
Authorizes Davidson County to Issue Bonds for Affordable Housing
Public Chapter 738 (SB 1446 / HB 1426)
Authorizes Davidson County to issue bonds to fund affordable housing and workforce housing projects.
Insurance – Protection Against Breach of Fiduciary Duty by County Employee
Public Chapter 749 (SB 1996 / HB 1496)
Requires county governments to either obtain and maintain blanket surety bond coverage with a minimum coverage of $150,000 for all county employees not covered by individual bonds references elsewhere in state statute, or purchase an insurance policy that provides coverage for breach of their fiduciary duties.
Authority to Waive Payments in Lieu of Taxes Made by Lessees
Public Chapter 777 (SB 1728 / HB 1692)
Grants industrial development corporations the authority to waive payments in lieu of taxes made by lessees if creating municipality formally delegates such authority to corporation. Sets requirement for best interests determination by comptroller and commissioner of economic and community development of any contract resulting in lessee making payments less than amount of taxes otherwise due for a period greater than 20 years plus a three-year construction period.
Names of Delinquent Tax Payers to Be Published in a Newspaper
Public Chapter 796 (SB 1450 / HB 1465)
Authorizes local collecting officials of hotel taxes to publish the names of delinquent taxpayers and the amounts owed in certain circumstances; clarifies that the present law that makes state tax records confidential does not apply to local hotel tax records.
Purchasing and Procurements
Public Chapter 817 (SB 377 / HB 261)
Enacts the Iran Divestment Act, which requires the chief procurement officer (CPO), no later than 120 days after the effective date of this act, to publish a list of persons determined to engage in investment activities in Iran. Requires this list to be posted on the state’s website and updated every 180 days. Prohibits any person on the list from contracting with the state and requires the state to terminate any existing contracts.
Allocation of Newly Constructed Rental Units for Affordable Housing
Public Chapter 822 (SB 1636 / HB 1632)
Prohibits a local governmental unit from enacting zoning regulations that require the allocation of a percentage of existing or newly constructed private residential or commercial rental units for long-term retention as affordable or workforce housing.
Sale of Private Act Hospital by Local Government
Public Chapter 832 (SB 2380 / HB 1801)
Expands the authority of the local governments to make interfund loans to include all funds derived from the sale of a Tennessee private act hospital; limits capital outlay notes from the sale of a Tennessee private act hospital not to exceed a period of 20 fiscal years.
Bonds Issued by State Funding Board
Public Chapter 849 (SB 1643 / HB 1686)
Requires that bonds issued by the state funding board be sold in such manner and at such times as may be approved by the board rather than requiring those bonds to be sold at public sale or, at the discretion of the board and until June 30, 2016, at private sale; deletes provisions requiring the board to report periodically to the finance committees of the general assembly as to the terms and method of sale of bonds sold until June 30, 2016.
Reduced Fees for Filing Business Tax Returns
Public Chapter 850 (SB 1748 / HB 1764)
Reduces the fee paid to county clerks for filing a business tax return from $7.00 to $5.00 by eliminating the $2.00 that is earmarked for clerks' computer expenses.
County Mayor to Sell Land Held Because of Delinquent Taxes
Public Chapter 853 (SB 2604 / HB 1826)
Authorizes a county mayor to sell land held by the county due to delinquent taxes during the redemption period under certain conditions, and reduces the amount of time a tax must be due on abandoned property before the tax lien can be enforced from two years to one year.
Uniform Administrative Procedures Act
Public Chapter 859 (SB 2389 / HB 2068)
Specifies that administrative agencies shall have no inherent, general, or common law powers, and shall only exercise the powers conferred on them by statute or by the federal or state constitutions. Clarifies that agency powers under the UAPA are to be narrowly construed. Increases burden of agencies by requiring them to prove, by clear and convincing evidence, that administrative rules conform to certain specific criteria.
Deposits into the Petroleum Underground Storage Tank Fund
Public Chapter 877 (SB 1690 / HB 1503)
Authorizes the Underground Storage Tanks and Solid Waste Disposal Control Board (USTSWB) to promulgate rules suspending fees imposed on owners or operators of petroleum underground storage tanks. Requires damages, costs, and restitution awards collected or received by the state pertaining to the act to be deposited into PUSTF, to the extent that such recoveries represent the restoration of amounts disbursed from the PUSTF. Requires the board to adjust underground storage tank fees by rule rather than regulation, to consider all current and futures liabilities and income of the PUSTF and to maintain a sufficient level of funds for current and expected obligations.
Online Payments to State Government
Public Chapter 880 (SB 2547 / HB 1544)
Authorizes the department of finance and administration to manage online payments to state government; authorizes the charging of additional fees to cover the cost of accepting online payments; clarifies that an online payment through the state portal does not discharge an obligation to the state until the state receives actual final payment.
Formula for Calculating Hearing Costs in Property Tax Appeals
Public Chapter 938 (SB 1646 / HB 1689)
Requires the State Board of Equalization to issue a refund in the amount of one-half of the appellant fees paid to appeal a property assessment in instances where the ordered reduction is less than one-half of the appellant’s claim. If the board exercises its discretion not to review a matter heard by the assessment appeals commission, the commission is required to issue a notice, including notice by electronic means, of its final actions to the parties or, upon request, a certificate of assessment or other final certificate of its actions.
Fiduciary Responsibilities of Utility District Commissioners
Public Chapter 1011 (SB 1647 / HB 1690)
Clarifies behavior that constitutes meeting a utility district commissioner's fiduciary responsibility, to include that such responsibility includes an action where a commissioner derives a personal benefit from the underlying misconduct, breach of duty, or failure in the operation or oversight of the utility district. Further defines "fiduciary responsibility to include acting with the highest degree of honesty and loyalty towards a utility district and in the best interests of the utility district.”
Rural Economic Opportunity Act of 2016
Public Chapter 1019 (SB 2538 / HB 2570)
Enacts the Rural Economic Opportunity Act of 2016. Authorizes a job tax credit for qualified business enterprises located in tier 4 enhancement counties. Creates a tier 4 enhancement county based on unemployment, per capita income, and poverty levels that does the following: (1) reduces the number of qualified jobs that must be created in order to receive a job tax credit from 25 to 20 for an enterprise located in a tier 3 enhancement county and from 25 to 10 for an enterprise located in a tier 4 enhancement county; (2) extends the additional credit to an enterprise located in a tier 4 enhancement county, for a period of five years beginning with the first tax year in which the qualified business enterprise applies the credit; provided, that the enterprise meets the requirements for a job tax credit under present law; (3) extends the additional tax credit to an enterprise located in an area designated as an adventure tourism district that is located in a tier 4 enhancement county, for a period of five years beginning with the first tax year in which the enterprise applies the credit. In order to receive the additional annual credit the enterprise must create at least 10 qualified jobs; and (4) grants an enterprise located in a tier 4 enhancement county five years to create the minimum number of qualified jobs necessary to receive the job tax credit. Establishes the propelling rural economic progress (P.R.E.P.) fund as a separate account in the general fund. Provides that fund will be composed of funds appropriated by the general assembly and gifts, grants, and other donations received by the department of economic and community development. Stipulates that monies in the fund will be awarded as grants to counties where the grants will have a direct impact on employment and investment opportunities in the future, as determined by the commissioner of economic and community development. Provides that commitments made by the commissioner of finance and administration for grants from the PREP fund must not exceed the appropriations made for the purposes of the program. Requires actual expenditures and obligations at end of fiscal year not exceed any available reserves and appropriations of the programs. Permits grants from the PREP fund to be: (1) made only to local governments or their economic development organizations, other political subdivisions of the state, any subdivision of state government, or to not-for-profit organizations; and (2) used to facilitate economic development activities in rural areas or in a manner that directly impacts rural areas.
Public Chapter 1060 (SB 2655 / HB 2631)
Effective Date 4/28/2016
Authorizes the state to issue direct general obligation interest bearing bonds in amounts not to exceed $87,700,000. The proceeds will be allocated to the department of transpiration for the construction of highways and for the purpose of acquisition of equipment of sites and buildings, including the acquisition of existing structures for expansion, improvements and repairs to existing structures.
Chancellors to Set aside a County’s Bid on Delinquent Property
Public Chapter 1085 (SB 1949 / HB 2343)
Requires the county mayor of each county, after taking charge of lands bought by the county at delinquent tax sales, to evaluate the property, within 90 to 120 days, and determine whether the value of the property or amount of money the county is likely to receive if the county sold the property exceeds the financial or environmental risks associated with the property; upon determining that financial risk exceeds value, permits county legislative body to petition chancery court to rescind the sale and appoint a master to hold subsequent sale or sales. If not sold, permits transfer to nongovernmental entity free of tax lien.
Exempts Certain Public Housing Authorities from Property Taxes
Public Chapter 642 (SB 1897 / HB 1846)
Exempts public housing authorities from property tax liability when they enter into leases that permit the public housing authority to acquire the property for a nominal sum at or before the completion of the lease term.
Rollback Tax Liability for Agricultural, Forest or Open Space Land
Public Chapter 685 (SB 1642 / HB1685)
Exempts owners of property that is disqualified as agricultural, forest, or open space land from liability for rollback taxes if the disqualification is due to a change in law or correction of an assessor's error and certain other conditions are met. Specifies that the property owner shall be liable for rollback taxes under these circumstances if the erroneous classification resulted from any fraud, deception, or intentional misrepresentation by the property owner.
Penalties for Deficient or Delinquent Franchise and Excise Taxes
Public Chapter 881 (SB 2558 / HB 1554)
Specifies additional circumstances under which the commissioner of revenue may waive penalties for delinquent franchise and excise taxes; alters the formula for calculating quarterly estimated payments for franchise and excise taxes; and reduces penalties for deficient or delinquent estimated franchise and excise tax payments from 5 percent to 2 percent per month.
Electric Cooperatives – Property and Taxation
Public Chapter 937 (SB 1633 / HB 1664)
Effective Date 1/01/2016
Removes a four-year exemption from ad valorem property taxes for certain facilities and plants of rural electric and community service cooperatives. Requires electric cooperatives to maintain possession of certain abandoned property throughout the period of notice and publication from the office of the state treasurer. Authorizes electric cooperatives to distribute unclaimed abandoned property for bona fide charitable purposes, economic development purposes, low-income energy assistance or educational purposes.
Notification of Professional Privilege Tax Owed
Public Chapter 1010 (SB 1886 / HB 1634)
Effective Date 7/01/2016
Requires the department of revenue to notify taxpayers by mail or e-mail of the amount of professional privilege tax owed, due date, and any electronic filing or payment requirement.
Angel Investors – Tax Credit
Public Chapter 1055 (SB 2539 / HB 1536)
Effective Date 1/01/2017
Establishes a tax credit equal to 33 percent of the value of cash investments made in certain companies by an "angel investor" if the investment is at least $15,000 and represents no more than 40 percent of the capitalization of the company at the time of the investment.
Hall Income Tax Reduction
Public Chapter 1064 (SB 47 / HB 813)
Effective 5/20/2016; Applicable to tax years beginning on or after 1/01/2016
Reduces Hall income tax this year from six percent to five percent; expresses legislative intent that the tax be statutorily reduced by one percent annually beginning with the first annual session of the 110th general assembly; eliminates the tax for tax years beginning on or after January 1, 2022.
Disabled Veterans – Property Tax Relief
Public Chapter 1065 (SB 1796 / HB 2156)
Increases the amount on which property tax reimbursement will be paid from the first $23,000 to the first $23,500 for low-income, elderly homeowners and for disabled homeowners; removes the income limitation applicable for tax relief for disabled veteran homeowners.
Proof of Compliance with TN Financial Responsibility Law
Public Chapter 663 (SB 2463 / HB 2305)
Beginning January 1, 2017, increases the minimum single policy limit, cash deposit, and bond amount required for proof of insurance under the Tennessee Financial Responsibility law from $60,000 each to $65,000.
Registration of Off-Highway Vehicles
Public Chapter 790 (SB 2255 / HB 2288)
Effective 4/12/2016 for purposes of promulgating rules; 1/01/2016 for all other purposes
Authorizes Class I and Class II off-highway vehicles to be registered with the department of revenue and to be operated on county roads. Defines Class I and II off-highway vehicles. Authorizes issuance of off-highway license plates for each category and establishes equipment and safety requirements for the vehicles.
Workers Compensation: Provisions Governing Payments for Permanent Partial Disabilities
Public Chapter 816 (SB 2563 / HB 1559)
Revises various provisions governing payments for permanent partial disabilities; revises other provisions of the workers' compensation law.
Community Cemetery Grant Fund
Public Chapter 997 (SB 2488 / HB 2268)
Creates the Community Cemetery Grant Fund, which may receive grants, contributions, appropriations and other moneys made available to it. This fund shall be administered by the commissioner of the department of commerce and insurance. Moneys in the funds shall be invested by the state treasurer. Grants from the CCGF may be made to a non-profit cemetery that is exempt from federal tax under 26 U.S.C. §501(c)(13) and has an owner or operator that has been placed in receivership pursuant to Tenn. Code Ann. 46-1-312 and has been granted a community cemetery exemption pursuant to Tenn. Code Ann. § 46-1-106(b).
Elder Abuse: Background Checks and Adult Protective Services
Public Chapter 1044 (SB 1848 / HB 1824)
Effective Date 4/28/16 for sections 4 and 8; 7/01/2016 for all others sections
Makes changes relative to the department of commerce and insurance and background checks at home care organizations; requires director of commission on aging and disability to establish a working group to draft and develop a field guide to provide law enforcement with the specific statutes and other resources related to assisting in the prevention, investigation and prosecution of elder and vulnerable adult abuse. Establishes that Tennessee Vulnerable Adult Coalition, as an advisory entity to the commission on aging.