Legislative Update - April 2018

 

The General Assembly is working on its last big assignment for the year: the budget. Nearly all the committees are closed, except of course the House and Senate Finance Committees. The budget is the biggest item every year, and when it starts to move, it means the end of session is just a few days away. The House and Senate should take up the budget as next week, with many other small and big bills to still work through. The hope is the legislature will adjourn for the year next week.  

After passing the full House the week before, legislation to prevent sales tax from being collected on utility fees passed the full Senate Wednesday. With Wednesday’s action, SB2121 by Sen. Ken Yager and Rep. Steve McDaniel passed the legislature with popular support in both houses of the legislature. All of the state’s utility associations (TMEPA, TECA, TML, Tennessee Association of Utility Districts, Tennessee Gas Association, and even TML) filed the legislation to prevent a tax increase from going into effect as the Department of Revenue believed that state law could allow the department to require utilities to collect sales tax on connection and reconnection fees. Now that won’t happen. The bill goes to the governor for his signature, where he is expected to sign it.

On Wednesday the full Senate approved SB2504, the wireless industry’s legislation to put in place statewide guidelines for how local governments approve and site small cell wireless antennas. With the full House already approving the bill, it is likely to be signed by the governor. The bill has two amendments, the main amendment and a second amendment that makes some tweaks. Between the two amendments, the broad exemption for any poles owned by a distributor of electric service and any "government-owned electric, gas, water or wastewater utility" remained in the bill. 

Under a bill (SB1793) passed by the full Senate Wednesday, the legislature took the last step in approving legislation that will require wind energy facilities to jump significant state and local regulatory hoops to be allowed in Tennessee. The legislation has allows local governments to set up regulations for the facilities as well. The main amendment that makes the bill can be found here. 

On Thursday, the House passes legislation that requires beginning in March 2019 the comptroller to offer free online training starting for water utility board members to comply with their training requirements. Last year the legislature passed legislation that requires municipal utility boards that oversee water and wastewater services to receive training, with 12 hours required within one year of appointment to the board and 12 hours over the next three years. SB2292 by Sen. Mike Bell and Rep. Bill Sanderson as amended also allows statewide associations to offer online training as well. The bill also reduces from 12 to 7 the total number of training and continuing education hours a municipal utility board commissioner must attend annually. The bill moves to the full Senate now.

Next week the full Senate is likely to take up HB1727, which changes state law regarding the rights of a former owner to property acquired through eminent domain for an amount not less than the fair market value, together with costs. Under current law passed in 2014, a local government that acquires property through eminent domain must attempt to sell the property back to the former owner if the property is being sold within ten years of being acquired. As amended, this year’s bill changes the amount the former owner has to pay as the lesser of 1) price paid to the former property owner, plus interest and the appraised fair market value of any improvements made to the property, or 2) amount representing not less than the fair market value of the property. Also, every two years the former owner could request from the local government entity a statement of intent for the use of the property. The full House already approved the bill two weeks ago. 

 

Municipal Gas Utilities Funding Economic Development and Chambers of Commerce

At the request of a handful of small municipal natural gas companies in West Tennessee, Sen. Dolores Gresham and Rep. Ron Gant are moving HB1914 that seeks to allow municipal natural gas utilities to devote revenues from the natural gas system to fund chambers of commerce and economic and community organizations. The bill is on the House and Senate floors, however TMEPA is working with the bill sponsors and TML to clarify the bill language. The bill as amended says a "municipality" may devote revenues from the natural gas utility to chambers of commerce and economic and community organizations. Since the bill simply says that a "municipality" may devote the funds, we are concerned when there is a utility board separate from the city council that a city council could spend municipal natural gas utility funds on behalf of the utility without the utility board’s taking any action on it. Needless to say, this could have significant consequences in the future for a municipal natural gas utility. We have been in discussions with TML, the bill sponsors, and staff from the Comptroller’s office, all of whom understand our concerns and appear willing to clarify the language to keep the status quo of the utility board being the entity that approves spending gas utility funds when there is a separate utility board from the city council. This bill only applies to municipal natural gas utilities. It does not apply to other utility services like electric or water, and it only applies to municipal gas services, not utility districts. We believe municipal electric utilities can already do this under existing statutory authority. We’ll continue to work on getting this bill language cleaned up before it passes the House and Senate. 

Legislation to expand the ability for communities to deannex from municipalities is dead for the year. As passed by the Senate last year, SB641 would allow residents in an area to hold a referendum to vote on whether to leave the city. The bill would also prohibit the discontinuation of utility services outside municipal boundaries for reasons related to deannexation. Also included in the legislation is language that clarifies any deannexation would not affect current utility services, meaning utility service would not have to be pulled out of deannexed areas. This issue saw heavy debate in 2016, and a bill even based both the House and Senate in different forms. While the full Senate approved the bill last year, Rep. Carter, the House sponsor, said this week he doesn’t have the votes to move the bill forward this year.

A bill that would make daylight savings time permanent all year was sent to a summer study in the Senate State and Local Government Committee this month. In the House it had been resurrected after it was killed early this session in a House subcommittee. HB1881 will be heard next in the full House State Government Committee next week, however it’s likely dead for the year given the Senate companion bill won’t be moving forward. Recently, Florida moved to permanent daylight savings time.