Capitol Update: February 7, 2025
After the hectic pace and prolonged debates of the special session last week, this week at the General Assembly was quieter, yet still busy. The Senate held no meetings – either in chambers or in committee. The House had most of its committees and subcommittees meet, but primarily for organizational purposes. Very few meetings had any bills on notice at all. Speaking of bills, both chambers set the close of business on Thursday the 6th as the deadline for timely filing legislation this year. This meant everyone around the Capitol complex – legislators, staff and lobbyists – was scrambling to make sure House and Senate sponsors were in place for their proposals and at least some language for a bill was filed (more on that later).
The week started with 636 bills filed in the House this year and 690 filed in the Senate. Those numbers had more than doubled by Thursday afternoon, with each chamber having 1,400 bills or more. County associations are quickly working to review and analyze all the new proposals filed this week while also gearing up to respond to bills, which are on notice for consideration in committees and subcommittees next week, and preparing for County Government Day the following week.
At this point, it’d be challenging to know exactly what the sponsors intend with many of these bills. You can only tell which portions of the code they are affecting. Each bill is required by law to have what is called a caption, which identifies the subjects of the legislation in broad terms and denotes which sections of the Tennessee Code the bill can amend. The caption can be as limited as covering a specific subsection of an individual statute for a narrow purpose, or it can be so broad as to cover numerous titles of the code on topics as broad as “taxation,” “education” or “local government.”
While every bill has to have a caption, in recent years, the General Assembly has developed a practice of filing a large number of what are called “caption bills” that essentially have a caption, but no other substance. The bill may open up the entirety of Title 49, related to education, but only include one or two sentences to change a random reporting deadline from January 1st to January 15th. These bills are essentially shells that are awaiting a later amendment to re-write the entire legislation and fill in all the substance being developed by the legislator. It is only once the amendment becomes available (often the day before the committee meeting) that the true purpose of the legislation is evident.
Realty Transfer Tax Legislation Filed in Both Chambers
Legislation was filed this week that proposes to return one-half of the proceeds from the state’s real estate transfer tax to the county where the tax was collected. The bill was developed in consultation with legislators who raised concerns about the revenue being used to fund salaries and benefits and suggested that the revenue be earmarked for non-recurring expenditures. This revenue source has undoubtedly grown over time, but it fluctuates from year to year with the housing market. This was the main reason why they did not want it used to fund positions.
Additionally, legislators were much more enthusiastic about the funding being used for infrastructure and specifically for roads and bridges. The bill that county associations are supporting (HB649/SB1080) is sponsored by House Speaker Pro Tem Pat Marsh and Senate Majority Leader Jack Johnson. County officials should be very grateful to these two legislative leaders for being willing to pursue this initiative. Again, those bill numbers are HB649/SB1080.
In the House, where the bill has been filed for a few days, the proposal has already garnered several co-sponsors. Promoting this legislation will be a major emphasis of County Government Day, when TCSA members are in town to visit with legislators on February 17th and 18th. In addition, other legislators have filed similar proposals to return portions of the tax to counties. We think there is wide support for the measure already. The challenge will be finding funds within the state budget to cover the loss of revenue to the state.
State of the State and Proposed Budget on the Horizon
Coming Monday (February 10th), Governor Lee will be delivering his State of the State address and unveiling his proposed budget for FY-2025-2026. This will set the stage for the General Assembly to begin its work in earnest. Once it is revealed, we’ll update you on how the proposed state budget impacts county operations. While the only thing the legislature is constitutionally required to do is pass a budget, the coming months will see the General Assembly debate hundreds of other proposals as legislators aim for adjournment in late April or early May.
As always, there are plenty of bills filed this year that have the potential to impact county government. Some proposals help counties, while others would clearly hinder. Over the coming weeks, we’ll make you aware of the most significant proposals and update you as the bills move through the legislative process. Check these updates regularly for information on the latest developments.
