Tennessee Bankers

2019 TBA Legislative Report

The Tennessee Bankers Association is pleased to present this review of 2019 Tennessee legislation affecting the banking industry. Each entry includes a public chapter summary, link to the full text, and the effective date.

Please contact Amy Heaslet if you would like more information about these new laws and the impact they may have on your bank.

Table of Contents

 

Business Regulation

Insurance Company Determining its Obligations Under an Insurance Policy

Public Chapter 121 (HB 348 / SB 413) 

Effective Date: 4/9/2019

Allows an insurance company to determine its obligations under an insurance policy as to all parties through a declaratory judgment action, an interpleader claim or action, or both, and creates a rebuttable presumption the insurance company is acting in good faith if the company files such an action or claim.

 

Registration Exemptions for Charitable Organizations

Public Chapter 132 (HB 57 / SB 232) 
Effective Date: 7/1/2019

Increases from over $30,000 to over $50,000 the amount of gross contributions that must be raised or received from the public by a charitable organization in order to trigger registration and reporting requirements with the secretary of state.

 

Clarification of Time-Share Transfer Contracts

Public Chapter 147 (HB 230 / SB 263) 

Effective Date: 4/17/2019

Clarifies that time-share transferring contracts are voidable by the purchaser for 10 days from the date of the signing of the contract – not 15 days – if the purchaser made an on-site inspection of a component site of the time-share project.

 

Removes Requirement That Towing Firms Wait 30 Days Before Selling Vehicles in Custody

Public Chapter 209 (HB 538 / SB 1493) 

Effective Date: 4/25/2019

Removes requirement that a towing firm wait 30 days to proceed to sell a vehicle taken into custody, and expands the towing advisory board from nine to 11 members by adding a member appointed by the Tennessee Trucking Association and a member appointed by the American Car Rental Association. 

 

Increases Amount Brought in Action- Caller Identification Spoofing

Public Chapter 217 (HB 1245 / SB 754) 

Effective Date: 4/23/2019

Increases the civil penalty amount that the attorney general and reporter may bring in an action against a person who commits the offense of caller identification spoofing from $10,000 to $30,000 per violation. Clarifies that each call received by a subscriber wherein the caller identification information is misleading or inaccurate constitutes a separate violation.

 

Estates, Trusts, Guardianships and Conservatorships

Transfer of Wills and Marriage Licenses from Clerk’s Office

Public Chapter 79 (HB 392 / SB76) 

Effective Date: 4/03/2019

Allows marriage documentation to be held be in a suitable facility that stores local government records securely against theft and natural disasters rather than only the clerk's office. Permits the clerk to transfer wills after three years since the final settlement of the estate or final disposition of all actions involving the will. Specifies a will must be transferred to a county archive facility or any other suitable facility approved by the judge of the respective court and the county public records commission. Requires the clerk to keep record of each transferred will.

 

Trust Omnibus Legislation 

Public Chapter 197HB 675 / SB 542) 

Effective Date: 4/25/2019

Revises various provisions governing trusts and estates, including permitting a revocable living trust that becomes irrevocable upon the death of the settlor to refer to a written statement of personal property not otherwise disposed of by the revocable trust.

 

Public Guardianship for the Elderly

Public Chapter 230 (HB 686 / SB 711) 

Effective Date: 4/30/2019

Allows the executive director of the Tennessee Commission on Aging and Disability to request the district public guardian to serve as a conservator for disabled persons who are younger than sixty (60) years of age if certain criteria are met.

 

Authorizes Establishment of a Single Trust Fund for all Pre-Need Funeral Contracts  

Public Chapter 247 (HB 785 / SB 602) 

Effective Date: 5/2/19: 7/1/2019
Authorizes a trustee to establish a single trust fund for all pre-need funeral contracts issued by multiple pre-need sellers, instead of having to establish a trust fund for each pre-need seller.

 

Oath by Administrator or Executor

Public Chapter 332 (HB 190 / SB 174) 

Effective Date: 5/10/2019

Declares the administrator or executor of an estate shall swear an oath acknowledging that the representative is not disqualified from serving due to receiving a sentencing of imprisonment.

 

Addresses Prepaid Funeral Benefits 

Public Chapter 339 (HB 650 / SB 1173) 

Effective Date: 5/10/2019

Specifies that an owner may irrevocably assign the policy or policy benefits to a funeral establishment if the insurance company issuing the policy does not offer a funeral trust or only offers a funeral trust for an additional charge. 

 

Tennessee Disclaimer of Property Interests Act

TBA Legislation

Public Chapter 340 (HB 676 / SB 699) 

Effective Date: 5/10/2019

Makes several technical corrections and updates to Tennessee’s trust-related laws, including allowing for nonjudicial modification of irrevocable trusts after a settlor’s death; specifying courts have authority to approve final accountings; expanding the uneconomic trust statute to allow for termination if the trustee’s fee equals 5% or more of the trust’s assets; allowing a holder of a general power appointment to represent permissible appointees with respect to a dispute if there is a material conflict of interest; allowing for the creation of “special purpose entities” to serve as trust protectors and advisors; establishing the Tennessee Disclaimer of Property Interests Act; and allowing for trusts to be established under guardianships and conservatorships.

 

Financial Institutions

Collection of Property Taxes by Banks- Evidence of Payments Provided to Trustee

Public Chapter 220 (HB 51 / SB 393) 

Effective Date: 7/1/2019

Changes the frequency that banks that collect property taxes must provide evidence of such payments to the trustee from daily to at least every three business days. Deletes outdated references to penalties that are no longer applied and deletes and obsolete code section.

 

Requires Municipalities to Contract with a Bank for the Deposit of Municipal Funds

Public Chapter 277 (HB 204 / SB 72) 

Effective Date: 7/1/2019

Requires cities to re-evaluate their contracts with financial institutions for deposit of daily balances of municipal funds at least once every 4 years and if it is determined that it should be rebid, a city shall receive bids from at least 2 financial institutions.  Currently, only the state and municipalities are required to do so every 4 years.  This would allow factors in the determination of the highest and best bid to include interest paid, lowest service charges, factors affecting the safety and liquidity of municipal funds, and any other relevant factors.

 

Judicial

Wrongful Death Settlement or Judgment 

Public Chapter 101 (HB 596 / SB381)

Effective Date: 4/11/2019

Prohibits the person who intentionally killed the decedent from filing a wrongful death action or sharing any portion of a wrongful death settlement or judgment based on death of the decedent.

 

Granting of Custody to a Relative Customer

Public Chapter 130 (HB 3 / SB 12) 

Effective Date: 4/9/2019: 7/1/2019

Requires the department of children's services to distribute information on available relative caregiver resources to the administrative office of the courts, and the administrative office of the courts to distribute the information to each court within the state that issues orders regarding child custody or guardianship.

 

Clarification of Time-Share Transfer Contracts

Public Chapter 147 (HB 230 / SB 263) 

Effective Date: 4/17/2019

Clarifies that a contract transferring a time-share is voidable by the purchaser for 10 days from the date of the signing of the contract, not 15 days, if the purchaser made an on-site inspection of a component site of the time-share project.

 

Electronic or Paper Filing in Civil Procedure

Public Chapter 151 (HR 1003 / SB 955) 

Effective Date: 4/17/2019

Allows a party or non-party making certain filings with a court to redact portions of a person's social security number, taxpayer identification number, birth date, or financial account number or the name of a minor when included in the filing, unless such information is otherwise required by statute, rule, or order

 

Specifies the Responsibilities of a Process Server in Delivering a Civil Warrant 

Public Chapter 196 (HR 393 / SB 456) 

Effective Date: 1/1/2020

Specifies that if the process server for a civil warrant is a sheriff or constable, they must be identified by name and agency on the service return or the affidavit. If service of process is made by a private process server, the process server must be identified by name and must include a mailing or physical address. Failure of the process server to include this information does not invalidate the effectiveness of the service.

 

Uniform Foreign-Country Money Judgments Recognition Act

Public Chapter 278 (HB 1032 / SB 275) 

Effective Date: 7/01/2019

Defines a "foreign country judgment" to be the judgment of a court of a foreign country and specifies standards and procedures for recognition of foreign country judgment.

 

Defines a Guardian for Purposes of Criminal Compensation

Public Chapter 311 (HB 864 / 1324) 

Effective Date: 5/08/2019

Defines “guardian” or “legal guardian” as “a person having the legal authority to provide the care, supervision, and control of a minor child as established by law or court order” for purposes of criminal injuries compensation. 

 

Statutory Revisions Required for Implementation of the Annual Appropriations Act 

Public Chapter 404 (HB 1510 / SB 1516) 

Effective Date: 5/17/2019

Revises certain provisions governing the distribution of revenue under the Business Tax Act.

 

Elderly Abuse and Vulnerable Adult Protection

Public Chapter 474 (HB 909 / SB 1039) 

Effective Date: 5/24/2019: 1/1/2019

Enacts the "Elderly and Vulnerable Adult Protection Act of 2019," which creates a Class E felony offense of abuse of an elderly adult and creates a Class D felony offense of abuse of a vulnerable adult. Also creates a Class A misdemeanor offense for any person to knowingly sexually exploit an elderly adult or vulnerable adult. Revises provisions pertaining to procedure for seeking relief by relative having personal knowledge that an adult has been subject to or threatened with willful abuse, neglect or exploitation. 

 

Local/State Government

Disclosure of public entities financial obligations and events of default

Public Chapter 6 (SB201 / HB166)

Effective Date: 3/20/2019

Requires the state funding board to disclose public entities financial obligations and events of default on the website of the MSRB, and events of default to the office of comptroller of treasury by entities not required by the SEC within 10 business days of event of default.

 

Filing of Year’s Property Maps with Register of Deeds

Public Chapter 59 (SB 278 / HB 100) 

Effective Date: 1/1/2020

Changes date when assessors must file that year's property maps with the register of deeds from October 1 to April 15.

 

Property Tax Assessments 

Public Chapter 63 (HB 143 / SB 351)

Effective Date: 2/28/2019

As enacted, allows county clerks to keep oaths prescribed for assessors and deputies in electronic or digital format; authorizes assessors to provide to taxpayers an informal review of property assessments; revises the fees for processing a taxpayer appeal of a property assessment; authorizes the assessment appeals commission to delegate decision-making authority to a single panel member if an evidentiary record needs to remain open for a period after the public hearing.

 

Allows Register of Deeds to Store Local Government Records in a Suitable Facility 

Public Chapter 68 (HB 609 / SB 531)

Effective Date: 2/28/2019

Allows a register of deeds to store local government records, in addition to storage in the register's office, in a suitable facility; defines suitable facility as one that will secure records against theft and natural disasters.

 

Recording the Annexation Resolutions and De-annexation Ordinances

Public Chapter 120(HB 362 /SB 359) 

Effective Date: 4/09/2019

Requires municipalities to record annexation resolutions and de-annexation ordinances with the register of deeds in affected county or counties.

 

Revises Requirements on Brownfield Redevelopment Projects

Public Chapter 257 (HB 327 / SB 355) 

Effective Date: 4/30/2019

Revises provisions governing redevelopment of brownfield sites in economically disadvantaged areas, including making the urban brownfield redevelopment project statute applicable to "mid-size and small counties" rather than "large and mid-size counties." Under present law, an urban brownfield redevelopment project must occur on a parcel or parcels of land located in a redevelopment zone and must either contain at least one brownfield site or contain a site of at least 10 acres that has remained vacant or substantially unoccupied for at least five years and, at any time within 20 years prior to June 1, 2011, included a manufacturing, industrial, distribution, or retail facility containing at least 1 million square feet. Allows the total amount of manufacturing, industrial, distribution, or retail facility space to be used to meet the 1 million square feet threshold. A redevelopment zone must be located in a county with a population of 80,000, or more. Adds that a redevelopment zone must also be located in a county having a population of 336,400, or less. Adds that an industrial development corporation must cease to receive allocations of sales and property tax revenue upon the maturity of the original bond or obligation used to finance the project, whose maximum amount of debt maturity must be no longer than 30 years.

 

Time in Which a County Board of Equalization Must Complete its Assessment Reviews

Public Chapter 322 (HB 817 / SB 1184) 

Effective Date: 5/8/2019

Makes the provision for the assessor of property recording with the register of deeds an application for the classification of property as agricultural, forest, or open space land discretionary instead of mandatory, and requires the property owner to record the application with the register of deeds if the assessor does not.

 

Manner of Death Determinations by County Medical Examiner 

Public Chapter 343 (HB 1005 / SB 620) 

Effective Date: 5/10/2019

Revises provisions governing the process to be followed when the next of kin disagrees with a finding that the suspected or determined manner of death was a suicide. 

 

Bond Issuance by State of Tennessee 

Public Chapter 403 (HB 1509 / SB 1517) 

Effective Date: 5/17/2019

Authorizes and empowers the state to issue and sell direct general obligation bonds of the state of Tennessee in amounts not to exceed $124,000,000. Specifies that the proceeds of such bonds are to be allocated to the department of transportation to be used for the construction of highways and the acquisition of equipment and sites. Also authorizes the funding board to sell bonds in amounts not to exceed 2.5 percent of the amounts specified above for the purpose of funding discount and costs of issuance. Specifies that bonds may be issued and sold in one block or in several installments and separately or together with other general obligation bonds of the state of Tennessee as the board may determine, either at public or private sale as provided by law.

 

Appropriations- Fiscal Year 2018 and 2019

Public Chapter 405 (HB 1508 / SB 1518) 

Effective Date: 7/1/2019: 5/17/2019

Make appropriations for the purpose of defraying the expenses of the state government for the fiscal years beginning July 1, 2018, and July 1, 2019, in the administration, operation and maintenance of the legislative, executive and judicial branches of the various departments, institutions, offices and agencies of the state. Also make appropriations for certain state aid and obligations, for capital outlay, and for the service of the public debt. Repeals certain appropriations and any acts inconsistent herewith. 

 

Transfers Responsibilities- Tennessee Consumer Protection Act of 1977

Public Chapter 459 (HB 948 / SB 804) 

Effective Date: 9/30/2019

Abolishes the division of consumer affairs in the department of commerce and insurance and transfers the responsibilities of the division concerning the consumer protection laws to the attorney general and reporter; authorizes a court to order the parties to engage in pre-trial mediation in the course of any action brought in the name of the state pursuant to the Consumer Protection Act; authorizes the division of consumer affairs in the office of the attorney general and reporter to facilitate communication between a complainant and person identified in a complaint in an effort to encourage mutually agreeable resolutions. 

 

Specifies County Clerks for Certain Duties 

Public Chapter 462 (HB 82 / SB 1486) 

Effective Date: 7/1/2019

Establishes that, in the event a certificate of title is in possession of some prior lienor, the new or subordinate lienor is required to forward to the respective county clerk, rather than the Dept. of Revenue, the required fee for noting the lien, along with proof of the lien as required by rules and regulations of the DOR, and the county clerk, when satisfied of the right to have the lien noted on the certificate of title, shall forward the application and proof of lien to the DOR. Establishes that all proceeds from the $11.00 fee for noting new or transferring liens or encumbrances or for noting on a certificate of title the extension of any mortgage continue to be allocated to the DOR.

 

Taxes

Removes Certain State Provisions Regarding Property Tax

Public Chapter 118 (HB 403 / SB 241) 

Effective Date: 4/9/2019

Removes various provisions regarding state property tax, including authority to place liens and issue distress warrants.

 

Delinquent Property Taxes Due on Parcel 

Public Chapter 170 (HB 1112 / SB 712) 

Effective Date: 4/18/2019

Provides that a purchaser of a parcel subject to delinquent taxes may only demand rents or profits from the occupier of the parcel after the purchaser has made an advance demand for such rents or profits; makes other revisions regarding delinquent tax proceedings.

 

Net Earnings and Loss to be Defined as Federal Taxable Income or Loss 

Public Chapter 306 (HB 1028 / SB 558) 

Effective Date: 5/8/2019: 1/1/18

Excludes, for excise tax purposes, repatriated earnings and GILTI when computing net earnings or net losses or allowable deductions. Provides that 5 percent of repatriated earnings and GILT that, prior to any deductions, are included in federal taxable income will be added back when computing net earnings for excise tax purposes. These provisions would apply to tax periods beginning on or after January 1, 2018.

 

Extends F&E Tax Credits 

Public Chapter 401 (HB 1410 / SB 1462) 

Effective Date: 5/10/2019

Adds to the definition of "eligible activity" the construction or expansion of an office or other facility in which low-income housing related planning and education opportunities will be provided, for the purpose of calculation of tax credits against franchise and excise tax liability. Establishes that the definition of an "eligible housing entity" includes a development district that engages in an eligible activity.

 

Property Purchased by a County at a Tax Sale 

Public Chapter 419 (HB 350 / SB 1263) 

Effective Date: 5/21/2019
Provides that whenever Hardeman County acquires property at a tax sale, any non-governmental entity holding a vested and duly recorded contractual right to the payment of fees or assessments secured by such property retains such right; further provides that Hardeman County will be liable for the payment of such fees and assessments if the county makes actual use of the property purchased at the tax sale.

 

Repeal of Professional Privilege Tax for Certain Professions

Public Chapter 478 (HB 1262 / SB 398) 

Effective Date: 5/24/219

Limits the professions to which the professional privilege tax applies to: lobbyists; persons licensed or registered under the laws governing securities as agents, broker-dealers, and investment advisers; physicians and osteopathic physicians; and attorneys; applicable to privilege taxes due and payable after May 31, 2020.  

 

Miscellaneous

Financial Literacy Week in Tennessee

TBA Legislation

Public Chapter 37 (SB 233 / HB87)

Effective Date: 3/22/2019

Designates the week beginning on the first Sunday in April as Financial Literacy Week in Tennessee.

 

Legalizes Certain Wagers on Fantasy Sports Leagues and Sports Pools

Public Chapter 126 (HB 1033 / SB 1057) 

Effective Date: 7/1/2019

Enacts the "March Madness and Fantasy Football Freedom Act," which decriminalizes, under certain circumstances, wagers on fantasy sports leagues and sports pools. 

 

Creates Elder Abuse Task Force

Public Chapter 135 (HB 249 / SB 199)

Effective Date: 4/9/2019

Creates elder abuse task force charged with examining the current state of financial elder abuse, determining its economic and human impact, and developing recommendations to address problems associated with financial exploitation of the elderly. The task force will consist of 12 members, appointed by the health and financial commissioners, speakers of the legislative houses, district attorney, and TBI, as well as representatives from health and banking associations. The task force will submit its findings and recommendations to the governor and the general assembly no later than January 15, 2021.

 

Task Force to Study Hemp

Public Chapter 387 (HB 1468 / SB 888)

Effective Date: 5/10/2019

Creates an advisory task force to study issues relative to hemp, including, but not limited to, processing, testing, transporting, regulation of hemp products, and its economic impact on rural areas of the state. Requires the task force to be comprised of 12 members, six appointed by the Speaker of the Senate, and six appointed by the Speaker of the House of Representatives. Authorizes the task force to hold up to three meetings to hear public testimony from persons with expertise in the hemp industry. Requires the task force to submit a report to the General Assembly by January 1, 2020, at which time the task force shall cease to exist.

 

Orders Daylight Savings Time as the Standard Time of the State

Public Chapter 416 (HB 247 / SB 1100) 

Effective Date: 5/21/2019

As enacted, establishes daylight saving time as the standard time in Tennessee, subject to authorization to do so from the United States Congress and certain other conditions being met.