Legislative Update - Week of March 18, 2019

Governor’s Priorities Include Education Reform

In his State of the State Address, Governor Lee outlined his legislative priorities which included two major education reform measures. Last week he provided the specifics of his proposals, and proponents and opponents were quick to react. 

First, his administration has legislation (bill will be rewritten with an amendment) to create a state charter school authorizing commission. Currently, local boards of education review charter school applications, and if an application is denied they may appeal to the state board of education. The Governor’s proposal would remove the state board from the process and instead create a new 9-member panel that would have the ability to review charter school applications. Charter applicants would have the discretion of applying directly to the commission rather than applying to a local board of education. Local boards of education would continue to serve as authorizers if charter school applicants choose to apply to them. Unlike the current process, if the new commission or a local board of education denies an application, there is no appeals process. The House bill is scheduled for a hearing in the House Education Committee on Wednesday at 9:00 a.m., and the Senate bill is scheduled in the Senate Education Committee on Wednesday at 2:30 p.m.

Second, the Lee administration has legislation (bill will be rewritten with an amendment) to create an Education Savings Account program. This program would provide roughly $7,300 to eligible students whose parents could then choose how to best provide educational options through private schools, tutors, technology and other education-related expenses as approved by the Department of Education. Under the proposal, students are eligible if they attend a school within a school district that has at least three schools in the bottom 10% of schools based on academic performance, but students do not have to attend one of the low performing schools to be eligible. This qualifier would make students eligible for the program who currently attend a school in Davidson, Hamilton, Knox, Madison, and Shelby Counties. Participating private schools would have to administer the TN Ready assessments to participating students in the subjects of math and English/language arts. The House bill is scheduled in the House Education Curriculum, Testing & Innovation Subcommittee tomorrow at noon.

Bill to Watch this Week

HB 1265 by Holt/SB 513 by Roberts – this bill would delete several state economic development incentive programs while also potentially exposing the proprietary information of companies that receive state incentives.

This bill is entitled the Fair Accountability and Clarity in Tax Subsidies Act. While its stated intent relates to transparency, it would delete the following state incentives for job creation and economic development: franchise tax credits; the job tax credit upon the creation of less than 25 qualified jobs; the job tax credit where the newly created position existed in this state less than 90 days prior to being filled; and some tax credits awarded to companies who establish a regional, national or international headquarters in Tennessee. The bill would also make public certain tax information of participating companies that is currently confidential under state law. 

Proponents and opponents of this bill have been working on amendatory language. It is anticipated that this bill will be rewritten this week to a) require separate “claw back” agreements for capital investment grants that are approved through the state budget and b) remove the ability of the commissioners of revenue, economic and community development to make exceptions to statutory requirements for eligibility for certain job tax credits.   

The House bill is scheduled for a hearing in the House Commerce Committee tomorrow at 1:30 p.m.