Tennessee Bankers

2020 TBA Legislative Report

The Tennessee Bankers Association is pleased to present this review of 2020 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

Ownership in Appraisal Management Companies

Public Chapter 579 (SB 2144 / HB 2213)

Effective Date:  7/1/2020

Extends the requirement for review of persons owning interest in an appraisal management company to all persons rather than just those owning more than ten percent (10%) of an appraisal management company; and removes the current exception to an appraisal management company otherwise being prohibited from removing an appraiser from its appraiser panel or refusing to assign requests for real estate appraisal services to an appraiser without meeting certain requirements.

 

Securities; Exemptions from the TN Securities Act of 1980

Public Chapter 604 (SB 1990 / HB 1886)

Effective Date:  3/20/2020

Exempts from certain requirements under the Tennessee Securities Act of 1980 securities that meet requirements for federal exemption for intrastate offerings under Rule 147A, which allows offers to be accessible to certain out-of-state residents and companies incorporated or organized out of state.

 

Business Filings Submitted to Secretary of State

Public Chapter 719 (SB 1754 / HB 1811)

Effective Date:  6/22/2020

Makes various changes concerning business filings submitted to the secretary of state, including clarifying that business filings must meet both statutory and rule requirements; removing the requirement that filings be typewritten and instead requires that filings be capable of being printed in ink in a clear and legible fashion on one side of letter size paper; changing the timing of filing an annual report; and specifying for cooperatives, for-profit corporations, nonprofit corporations, LLCs, and partnerships that if the secretary of state has prescribed a mandatory method of filing, then the document must be filed in the prescribed manner and a conformed copy of a document submitted to the secretary for filing must also be stamped with the word "Filed." 

 

Money Transmitter Applicant Requirements

Public Chapter 730 (SB 2166 / HB 2235)

Effective Dates:  6/22/2020; 1/1/2021

Allows the commissioner of the department of financial institutions to require applicants for money transmitter licensure to consent to a criminal history records check and to submit a fingerprint sample; and revises other provisions regarding money transmitters.

 

Workers Compensation Filing, Notice Requirements

Public Chapter 731 (SB 2190 / HB 2257)

Effective Date:  6/22/2020

Extends the deadline for an injured employee to file a claim for increased benefits with the bureau of workers' compensation; and lengthens the period of time following an injury an employee has to provide notice to the bureau of workers' compensation of an injury and the failure of an employer to secure payment of compensation

 

Enacts the Pregnant Workers Fairness Act

Public Chapter 745 (SB 2520 / HB 2708)

Effective Dates:  10/1/2020; 1/1/2021

Enacts the “Tennessee Pregnant Workers Fairness Act”, which, among other things, applies to employers that employ 15 or more employees and requires the commissioner of labor and workforce development enforce laws requiring employers to make reasonable accommodations for medical needs arising from pregnancy or childbirth and allows employers to request a medical certificate from a healthcare professional if a pregnant employee asks for any type of job restructuring. 

 

Revisions to Contractors’ Laws

Public Chapter 749 (SB 2681 / HB 2706)

Effective Date:  7/1/2020

Makes various changes related to prime and remote contractors, including requiring that financial institutions set up retainage accounts if they build their own facility or take over a project in default if they intend to complete the project; specifies that equitable relief may not be sought against the person holding retainage as an escrow agent and that person bears no liability for the nonpayment of the retainage but that a court may issue an order to the person holding the retained funds to pay any funds it finds is owed to a prime or remote contractor; and that, in the event of untimely payment of progress payments to a prime or remote contractor, upon following certain procedures, the person owed the money can suspend work until the payment is received.

 

Financial Institutions

Disclosure of Written Agreement Jointly Issued to Bank by Commissioner, FDIC

Public Chapter 581 (SB 2165 / HB 2234)

Effect Date:  3/19/2020

*Legislation from the Department of Financial Institutions

Allows the commissioner of financial institutions to publicly disclose any written agreement jointly issued to a bank by the commissioner and the federal deposit insurance corporation, the federal reserve board, or the federal reserve board's duly authorized representative in order to allow federal agencies.  The intent of this change is to allow agencies and the bank to focus on the most critical issues impacting the viability of the bank while reserving lesser issues for a time when the condition of the bank has stabilized. The legislation also removes the requirement that all individuals who control any aspect of a private trust company be family members.

 

Banking Law Updates

Public Chapter 605 (SB 2112 / HB 2175)

Effective Date:  3/20/2020

*Legislation from the Tennessee Bankers Association

Makes various changes to banking laws, including removing newspaper publication requirements for bank mergers; deleting out-of-date requirements for interstate branching; creating an exception for geographical limitations on banks’ boards of directors; removing requirement that original incorporators be named on re-stated charters; reducing from permanently to 7 years the retention period for certain bank records, including shareholder and board meeting minutes; allowing one joint account owner to remove another without liability for the bank; removing presumption of tenancy by the entireties  on joint accounts held by spouses; and removing the repeal date of June 30, 2022 of the Elder Financial Exploitation Prevention Act to make it permanent.

 

Judicial

Tennessee COVID-19 Recovery Act

Public Chapter 1 (SB 8002 / HB 8001)

Effective Date:  8/17/2029

Enacts the Tennessee COVID-19 Recovery Act, which specifies there is no claim against any person for loss, damage, injury, or death arising from COVID-19, unless the claimant proves by clear and convincing evidence that the person caused the loss, damage, injury, or death by an act or omission constituting gross negligence or willful misconduct; specifies requirements for filing of claim, including requiring claimant to file a certificate of good faith regarding claimant consulting with a physician who is competent to express an opinion on exposure to or contraction of COVID-19; and clarifies that the failure of a claimant to satisfy the requirements shall, upon motion, make the action subject to dismissal with prejudice.

 

New Judicial District

Public Chapter 530 (SB 561 / HB 1156)

Effective Date:  3/10/2020

Divides the current 21st judicial district into a new 21st district consisting of Williamson County and a new 32nd judicial district consisting of Hickman, Lewis, and Perry counties.

 

Court Clerks Assessing Electronic Fees

Public Chapter 647 (SB 2630 / HB 2772)

Effective Date:  4/1/2020

Requires compliance with technological standards established by the supreme court in any court where electronic filing, signing, or verification of papers has been authorized by local court rule; and, allows clerks to collect a maximum transaction fee of $5 for each electronic filing and $50 for each case or offer an annual subscription fee no more than $300 for registered users of the electronic filing system.

 

Location of Court Proceedings

Public Chapter 805 (SB 2741 / HB 2768)

Effective Date:  7/15/2020

Allows a court to temporarily hold court proceedings in a courthouse or other room located outside the county seat under specific circumstances such as a natural disaster, conflicts of trials or other judicial proceedings; requires proceedings held in such other locations to be made available to public viewing by streaming video through the internet; and requires proceedings to return to the courthouse when it is ready for use.

 

Local/State Government

Extends the TN commission on aging and disability

Public Chapter 563 (SB 1702 / HB 1780)

Effective Date:  3/19/2020

Extends the Tennessee commission on aging and disability to June 30, 2026

 

Extends the TN emergency management agency

Public Chapter 566 (SB 1706 / HB 1784)

Effective Date:  3/19/2020

Extends the Tennessee emergency management agency to June 30, 2025.

 

Housing Authority May Assist in Development of Affordable House Projects

Public Chapter 609 (SB 1607 / HB 1654)

Effective Date:  3/25/2020

Specifies that a housing authority may assist in the development of projects that promote affordable rental housing, including mixed-income rental housing developed primarily for persons of low and moderate income as part of its authority to further the goals and local objectives established in redevelopment and urban renewal plans; and authorizes the exercise of such powers in the same manner as mixed finance projects for persons of low income. 

 

Bond Issuance

Public Chapter 649 (SB 2469 / HB 2820)

Effective Date:  4/2/2020

Authorizes the state of Tennessee, acting by resolution of its funding board, to issue and sell general obligations bonds of the state in amounts not to exceed $124 million; and makes appropriations for an indefinite period of time for the purpose of allocating the proceeds of the bonds and notes authorized by this legislation.

 

Appropriations for FY2019 and FY2020

Public Chapter 651 (SB 2466 / HB 2821)

Effective Dates:  4/2/2020; 7/1/2020  

Makes appropriations for the fiscal years beginning July 1, 2019, and July 1, 2020.

 

Unclaimed Property:  Holding and Selling a Security

Public Chapter 718 (SB 1634 / HB 1851)

Effective Date:  6/22/2020

Increases from “eight months to a year” to “32 to 36 months” the time within which the treasurer must sell a security after receiving it; and extends from “eight months” to “32 months” the minimum time period during which the treasurer is required to hold a security prior to selling it and paying the sale proceeds to the owner, upon the owner's request. 

 

Disposal of Real Property by County

Public Chapter 721 (SB 1862 / HB 1857)

Effective Date:  6/22/2020

Authorizes a county, upon two-thirds vote of the county legislative body, to dispose of real property at a nominal cost by private negotiation and sale to a 501(c)(3) nonprofit corporation, incorporated under the laws of this state, whose purpose includes educational services to youth in areas including health, science, agriculture, and civic engagement through in-school and after-school programs and school and community clubs and camps.

 

Industrial Development Corporation Purchasing Certain Buildings

Public Chapter 722 (SB 1956 / HB 2041)

Effective Date:  6/22/2020

Creates an exception to the prohibition on an industrial development corporation purchasing a hotel, motel, or apartment building, if the project is a tourism attraction involving an aggregate investment of public and private funds in excess of $75 million.

 

Destruction of Public Records

Public Chapter 738 (SB 2313 / HB 2578)

Effective Date:  6/22/2020

Prohibits a governmental entity from authorizing the destruction of public records subject to disclosure if the governmental entity knows the records are subject to a pending public record request submitted to the governmental entity.

 

State Treasury / Agreements with Federal Reserve Bank

Public Chapter 755 (SB 2880) / HB 2088)

Effective Date:  6/22/2020

Authorizes the state treasurer to enter into agreements with any federal reserve bank, instead of a federal reserve member bank or trust company located in Tennessee, for the purpose of transferring public funds and funds of the Tennessee consolidated retirement system through the facilities of the federal reserve banking system.

 

Bond Issuance

Public Chapter 758 (SB 2938 / HB 2930)

Effective Date:  6/30/2020

Authorizes the state, acting by resolution of its funding board, to issue and sell its interest-bearing bonds.

 

State Budget Procedures

Public Chapter 759 (SB 2932 / HB 2924)

Effective Dates:  6/30/2020; 10/1/2020

Makes revisions to general law necessary to implement the annual appropriations act; and decreases, from $500,000 a year to $100,000 a year, the threshold of sales to consumers in this state for which a dealer with no physical presence in this state or a marketplace facilitator is required to collect and remit the state sales and use tax with an effective date to begin collection and remittance of sales and use tax of October 1, 2020.

 

Appropriations for FY2019 and FY2020

Public Chapter 760 (SB 2931 / HB 2922)

Effective Date:  6/22/2020

Makes appropriations for the fiscal years beginning July 1, 2019, and July 1, 2020.

 

TN Housing Development Agency – Bond Issuance

Public Chapter 766 (SB 1576 / HB 1622)

Effective Date:  7/15/2020

Increases, from $2.93 billion to $4 billion, the maximum aggregate principal amount for which the agency may issue bonds and notes at any one time.

 

Taxes

 

Revisions to Property Tax Appeal Process

Public Chapter 521 (SB 1625 / HB 1813)

Effective Date:  3/6/2020

Makes various revisions to the property tax appeal process, including removing language that prohibits taxpayers in certain counties from filing an appeal directly with the state board of equalization; and specifying that any additional tax due following an appeal will accrue interest from the delinquency rate at the composite prime rate published by the federal reserve board minus two points. 

 

Tax Credits for Brownfield Properties

Public Chapter 606 (SB 2158 / HB 2227)

Effective Date:  7/1/2020

Authorizes tax credits for privilege and excise taxes equal to 75 percent of the purchase price of brownfield property purchased in a tier 3 or tier 4 enhancement county for the purpose of a qualified development project, and revises other provisions regarding tax credits for brownfield properties.

 

Allocation of Sales and Use Tax Revenue

Public Chapter 809 (SB 2878 / HB 2734)

Effective Date:  7/15/2020

Establishes that counties with three or more distressed rural counties bordering it will be defined as an “eligible county” for purposes of sales and use tax revenue apportionment to commercial development districts (CDD) in rural, economically distressed counties; and requires that an application for properties in such eligible counties must be submitted to the Commissioner of Finance and Administration on or after January 1, 2021, and no later than December 31, 2026. 

 

Miscellaneous

Landlord/Tenant – Termination of Residential Tenancies

Public Chapter 528 (SB 1615 / HB 1606)

Effective Date:  7/1/2020

Revises provisions governing the notice required for termination of a residential tenancy in certain situations, including reducing the required notice period for termination of residential tenancy to 3 days in a county with a population more than 75,000 and to 14 days for all other counties in situations where an unauthorized subtenant refuses to vacate the premises.

 

Easements on Private Property

Public Chapter 703 (SB 1896 / HB 1914)

Effective Date:  6/22/2020

Restricts the width of a private easement or right-of-way to 25 feet; authorizes the court to award attorney fees to the defending landowner in an action for an easement or right-of-way brought by a private person owning land obstructed entirely from a public road by the intervening land of another person; and makes various other changes regarding private easements.