TN Legislative Recap: Anti-Business Labor Agenda Defeated, Hot-Button Issues to Return

Date: May 06, 2015

The Tennessee General
Assembly adjourned this week after approving a $33.8 billion budget and
debating hot-button issues including proposed healthcare, labor and tax reforms.
Small business again fared well overall but will be monitoring the impact of
several bills that passed and others that will be debated again in 2016.

A
listing of bills NFIB supported, opposed or tracked is available here.

Anti-Business Labor Agenda
Stopped

NFIB
vigorously opposed a series of unnecessary or harmful bills that would have
impacted your ability to own, operate and grow your business. Specifically:

  • A
    bill
    that would initiate a study of a mandated paid leave program stayed
    in committee, while a
    similar measure
    to mandate time off for school visits failed. NFIB
    argued against the measures, noting employers are meeting the needs of the
    workforce through traditional leave and paid-time off programs and must
    maintain flexibility to run their enterprises.
  • Several attempts to enact a state
    minimum wage failed in committee and on the House floor. NFIB and other
    groups continue to argue the measures would hurt entry-level and lower
    skill workers.
  • A House subcommittee defeated the “Pay
    Equality Act
    ,” which would have enabled a state right of action on
    gender pay discrimination claims. While asserting our members’ support of
    “equal pay for equal work,” NFIB argued three federal laws already address
    this issue and proponents’ statistics do not include the choices women
    make in many circumstances.
  • A bill to “ban
    the box”
    was held by a House sponsor. The legislation seeks to
    prohibit employers from asking an applicant’s criminal history on a first
    interview or application. It is likely to be debated in 2016
    .

Workers’ Comp Alternative
Proposal to Return in 2016

Legislation
that would establish an alternative workers’ compensation system as an ERISA
benefit advanced through a Senate committee, with no action taken on the House
side. Senate
Bill 721
by Sen. Mark Green (Clarksville) was amended after much discussion
and input, stopping just short of the Senate floor as session ended. NFIB remains
neutral on the bill, based on 2015 Member Ballot results, but worked with Sen.
Green, an NFIB member, and others to share opportunities to address several
concerns. The legislation will be taken up again next year.

NFIB
is pleased that the workers’ comp reform effort from 2013 is bearing fruit,
with average rates dropping and early reports of less friction within the new
administrative system.

What’s on Tap?

NFIB
will be watching for the return of several key bills, while assessing the
impact of several new laws, including:

  • Senate
    Bill 603
    , the governor’s Revenue Modernization Act, passed
    overwhelmingly in both chambers. The sweeping legislation: creates a
    substantial nexus definition for out-of-state businesses, taxing those
    that meet bright-line factors; establishes a market-based sourcing
    standard for apportioning the franchise & excise (F&E) tax,
    replacing cost of performance, for out-of-state domiciled companies; establishes
    “triple weighting,” placing more emphasis on sales and less on payroll and
    personal property, which will provide F&E tax relief for some larger
    in-state businesses; enables sales & use tax to be collected on remotely
    accessed computer software, while exempting software-based services “in
    the cloud” used for information and data processing services; and
    establishes a click-through nexus standard and threshold for dealers and
    their customers. At NFIB’s request, a provision that would have given the
    Commissioner of Revenue rulemaking authority to change the process of
    collecting the F&E tax was removed. NFIB plans to engage the
    administration, legislature and other groups to pass legislation that
    would give businesses more flexibility in reporting the tax and decrease
    the significant underpayment penalty.
  • Insure Tennessee, the governor’s
    Medicaid expansion proposal, failed in a special session in February and again
    in April
    . NFIB was neutral on the effort, based on special survey
    results from January; we remain opposed to traditional Medicaid expansion,
    based on our 2013 Member Ballot.
  • An
    effort
    to phase out the $400 professional privilege tax gained modest
    momentum but still has several hurdles. Legislation
    to restore vendors’ compensation
    was filed and will return in 2016.
  • At NFIB’s request, a
    requirement
    for employers with 10 employees or more to file quarterly
    unemployment reports online was amended to enable employers with 10-99
    employees to request relief from the new mandate. Employers with fewer
    than 10 employees remain completely exempt.
  • Legislation
    that would establish an administrative system to review medical
    malpractice claims is expected in 2016.
  • A judge in Hamilton County has ruled
    that Tennessee’s non-economic (pain and suffering) cap of $750,000 is
    unconstitutional. NFIB and other business groups are monitoring and
    discussing potential next steps.

Good News on Your Radar

Thanks
to your NFIB membership, big benefits are in place or about to occur! Here’s a
sampling:

  • Full repeal of the state death tax
    will finalize in 2016, a major win for thousands of NFIB members. Farmers
    and multi-generational businesses will avoid a state tax of between 5.5
    percent and 9.5 percent on their estates.
  • Qualifying seasonal small business
    owners will have potential relief from unemployment claims, beginning July
    1, 2016. For more details read
    here
    and watch for
    notices from Tennessee’s Department of Labor & Workforce Development
    .
  • The Unemployment Trust Fund remains
    in better shape, with tax rates much lower than in years past, despite a
    blip in January to a higher tax table. Unemployment claim processing is
    improving, while fraud and abuse appears to be down, after several years
    of uneven results.
  • A 2011 state law continues to hold Tennessee
    cities in check from passing various mandates – wage, wage theft, leave
    and healthcare.

Please
contact State Director Jim Brown at 615-874-5288 or [email protected] with any comments or questions.

Related Content: Small Business News | Tennessee

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