TSCPA News

Legislative Update - April 7

April 7, 2017

2017 LEGISLATIVE REPORT

April 7, 2017

Bills and Legislative News Affecting the Accounting Profession

 Comments

The bills on the following list have been identified by TSCPA’s legislative tracker as bills of interest to the CPA profession.  They may be viewed in their entirety at www.legislature.state.tn.us/.  If you have questions or comments, please email tscpa@tscpa.com. 

Key
✔- Legislation with an active status
♦ - Comments
PC - Link to Public Chapter

AUDIT

ü SB 315 by Gresham/HB 136 by M. White - Local government audit findings. Requires a local government receiving annual audit findings to submit its annual budget and a corrective action plan to the comptroller. Prohibits the comptroller from approving a local government budget with audit findings if the local government fails to submit a corrective action plan to the comptroller. Authorizes sales tax revenue to be withheld from a noncomplying local government. Grants the comptroller discretion to waive certain requirements.

Fiscal Note:            (Dated February 12, 2017) Other Fiscal Impact – The fiscal impact of this bill is a potential temporary loss of use of an unknown but significant amount of sales tax revenue for any local government entity out of compliance with this legislation. Otherwise, any fiscal impact for state and local government is considered not significant.

Senate Status:         Set in State & Local Government on 4/11/2017.

House Status:         Set in Local Government Subcommittee on 4/11/2017.

PC SB 463 by Bell/HB 436 by McDaniel - Time frame for submission of corrective action plan after audit from comptroller. Requires the officer who is the administrative head of any department, agency, or institution of the state, to submit a corrective action plan to the comptroller of the treasury which addresses the actions taken, or to be taken, in response to each audit finding and related recommendations of the comptroller of the treasury relative to the effective and efficient management of accounts, books, records, or other evidences of financial transactions. The corrective action plan should provide the name or names of the contact person or persons responsible for the corrective action, the corrective action taken or planned, and the anticipated completion date. The comptroller of the treasury shall at any time notify the chairs of the finance ways and means, government operations, and fiscal review committees of the general assembly of any department, agency, or institution’s failure to timely implement such recommendations, to submit the audit report required by subsection (c) of the bill, or to comply with its corrective action plan. Those committees may direct the department, agency, or institution to provide a written statement to the requesting committee explaining why full corrective action has not been taken. If a requesting committee determines that the written statement is not sufficient, that committee may require the department, agency, or institution to appear before the committee.

Status:                    Enacted as Public Chapter 20 effective March 24, 2017.

ü SB 878 by Harris/HB 827 by S. Jones - Performance audits of private service providers contracting with the department of children's services. Requires the comptroller to audit the performance of any private provider of services that contracts with the department including an evaluation of provider performance as it relates to outcomes of clients and their families. Requires the comptroller to report its findings to the judiciary committee of the senate and the civil justice committee of the house of representatives.

Fiscal Note:            (Dated March 26, 2017) Increase State Expenditures - $3,000/One-Time $92,000/Recurring

Senate Status:         Set in State & Local Government on 4/11/2017.

House Status:         Set in State Government Subcommittee on 4/12/2017.

budget

SB 483 by Norris/HB 511 by Sargent - Appropriations - FY 2016 and FY 2017. Make appropriations for the purpose of defraying the expenses of the state government for the fiscal years beginning July 1, 2016, and July 1, 2017,

Senate Status:         Referred to Finance, Ways & Means.

House Status:         Referred to Finance Subcommittee.

SB 484 by Norris/HB 512 by Sargent - Statutory revisions necessary for implementation of the annual appropriations act. Allows the commissioner of health to direct funds in the health access incentive account to programs relative to prevention initiatives, efforts to improve the built environment, and strategies to improve the health of the population. Makes statutory revisions necessary to implementation of the annual appropriations act.

Senate Status:         Referred to Finance, Ways & Means.

House Status:         Referred to Finance Subcommittee.

SB 485 by Norris/HB 513 by Sargent - Bond issuance. Authorizes the state to issue and sell direct obligation bonds of up to $80 million.

Fiscal Note:            (Dated February 15, 2017) Increase State Expenditures - $8,800,000 – First-Year Debt Service $130,400,000 Over the life of the bonds $80,000,000 Principal $50,400,000 Interest

Senate Status:         Referred to Finance, Ways & Means.

House Status:         Referred to Finance Subcommittee.

SB 486 by Norris/HB 514 by Sargent - Authorizes state spending to exceed growth in revenues by 2.85 percent. Authorizes state spending to exceed growth in revenues by $438 million or 2.85 percent.

Fiscal Note:            (Dated February 22, 2017) Other Fiscal Impact – Authorizes an increase in appropriations from state tax revenue up to $438,000,000 for FY16-17.

Senate Status:         Referred to Finance, Ways & Means.

House Status:         Referred to Finance Subcommittee.

COMMERCIAL LAW

ü SB 438 by J. Johnson/HB 484 by Travis - Tennessee Uniform Limited Partnership Act of 2017. Amends TCA Title 61, relative to commercial law and business entities in Tennessee. Enacts the Tennessee Uniform Limited Partnership Act of 2017. Revises sections regarding limited partnerships and limited liability partnerships, including dissolution of such partnerships. Also amends sections relative to foreign limited partnerships.

Fiscal Note:            (Dated March 6, 2017) Increase State Revenue - $51,300/FY17-18/General Fund $1,600/FY17-18/Division of Business Services $114,600/FY18-19 and Subsequent Years/General Fund $3,500/FY18-19 and Subsequent Years/ Division of Business Services Increase State Expenditures - Exceeds $80,000/FY17-18/General Fund

Senate Status:         Commerce passed on 4/3/2017; Sent to Calendar Committee.

House Status:         Finance Subcommittee placed behind the budget.

GENERAL

SB 201 by Overbey/HB 1019 by Jernigan - Amenity allowances for certain domestic not-for-profit entities. Changes part of the mailing address for the Attorney General and Reporter for receiving comments under the Public Benefit Hospital Sales and Conveyance Act of 2006. Permits not-for-profit hospitals to submit the claims data discharge report by electronic transmission. Prevents commissioner of revenue from exercising enforcement against a not-for-profit taxpayer until the taxpayer's appeal is finally adjudicated.

Senate Status:         Referred to Health & Welfare.

House Status:         Referred to Health Subcommittee.

ü PC SB 417 by Lundberg/HB 469 by Zachary - Fundraising for the TN financial literacy commission. Clarifies that the state treasurer as chair of the Tennessee financial literacy commission has the authority to raise funds for the commission.

Status:                    Enacted as Public Chapter 81 effective March 31, 2017.

GOVERNMENT REGULATION

ü SB 449 by Bell/HB 566 by Howell - Guides to practice for administrative agencies. Requires state government entities that establish or adopt guides to practice do so through the promulgation of rules. Specifies that guides to practice include codes of ethics, voluntary certification programs, and metrics for minimum qualities of service.

Amendment:          House Business and Utilities Committee Amendment 1, Senate Amendment 1 (005309) deletes and rewrites the bill, clarifies that the rules promulgated by entities pursuant to this legislation shall supersede any existing guides to practice developed or approved by a private organization or association that conflict with or are otherwise not included in such rules. Requires that no entity adopt guides to practice that a private organization or association developed or approved; only applies to guides to practice established, adopted, or amended after effective date. Rules will supersede existing guides.

Senate Status:         Senate passed on 4/3/2017 with amendment 1.

House Status:         Government Operations passed on 4/5/2017; Sent to Calendar & Rules.

ü SB 910 by Bell/HB 852 by Daniel - Burden of proof in contested case hearings on state agencies. Places the burden of proof in contested case hearings on state agencies to prove, by clear and convincing evidence, that the action taken by the agencies was proper.

Senate Status:         Set in Government Operations on 4/12/2017.

House Status:         Set in State Government Subcommittee on 4/12/2017.

SB 911 by Bell/HB 769 by Daniel - Requirements for revocation of a license by an agency. Prohibits the revocation of a license by an agency unless the agency provides notice of facts or conduct that warrant such action and the licensee was permitted to show compliance; requires testimony in an agency proceeding to be given under oath and for persons who allege misconduct by a licensee to be present and available to testify at the proceeding. Requires a person who is denied an occupational license or certification by the final decision of an agency and that decision is subsequently reversed on appeal, to be awarded attorney fees, court costs, pre-judgment interest, post-judgment interest, and lost wages from the agency. Specifies that any lost wages awarded shall only include income lost for the period in which the person was aggrieved by the final decision in the contested case hearing.

Senate Status:         Taken off notice in Government Operations on 3/29/2017.

House Status:         Taken off notice in Business & Utilities Subcommittee on 3/28/2017.

SB 1075 by Lundberg/HB 971 by Crawford - Adverse action related to a license or other privilege - written request for hearing. Increases from 10 to 12 the number of days following any adverse action related to a license or other privilege that the licensee must file a written request for a hearing before the commissioner to contest the action.

Senate Status:         Referred to Finance Revenue Subcommittee.

House Status:         Referred to Finance Subcommittee.

ü SB 1217 by Norris/HB 326 by Hawk - UAPA - rules that may constitute unreasonable restraints of trade. Authorizes commissioners and chief executive officers of administrative departments under which regulatory boards operate to review and either approve or veto rules that may constitute unreasonable restraints of trade. –Part of Administration Package to correct Supreme Court on a North Carolina case as it relates to Accountancy Board and other regulatory boards’ exposure to personal liability. TSCPA is supportive. Amendment added narrows Administration authority over Rules.•

Amendment:          Senate Amendment 2, House Business & Utilities Committee amendment 1 (004380) rewrites language in the bill to require each supervising official to ensure that the actions of regulatory boards that displace competition are consistent with a clearly articulated state policy. The supervising official must evaluate whether the action may constitute a potentially unreasonable restraint of trade that requires further review; and if it is determined that an action requires further review, the supervising official must provide notice to the regulatory board within ten (10) business days of the date the action was taken that the action is subject to further review. The supervising official must also review the full evidentiary record regarding the action and, if necessary, supplement the evidentiary record or direct the regulatory board or other involved persons or entities to supplement the evidentiary record. Amends section 2 of the bill to state that prior to a rule being filed by a regulatory board, with the secretary of state, the commissioner or chief executive officer of the administrative department under which a regulatory board operates or to which a regulatory board is administratively attached, or a designee to the extent a conflict of interest may exist with respect to the commissioner or chief executive officer, will remand a rule that may constitute a potentially unreasonable restraint of trade to the regulatory board for additional information, further proceedings, or modification, if the rule is not consistent with a clearly articulated state policy or law established by the general assembly with respect to the regulatory board.

Link to Amendment:    http://www.capitol.tn.gov/Bills/110/Amend/SA0052.pdf

Senate Status:         Senate passed on 3/16/2017 with amendment.

House Status:         Set on floor on 4/10/2017.

HALL INCOME TAX

SB 1073 by Lundberg/HB 1122 by Hulsey - Tax on income from stocks and bonds. Reimburses counties and municipalities for lost revenue due to the reduction and elimination of the tax on income from stocks and bonds. Phases out reimbursement over a number of years.

Fiscal Note:            (Dated February 25, 2017) Other Fiscal Impact – To the extent the General Assembly does not enact bills for any year FY17-18 through FY21-22 to reduce the HIT rate by one percent per year, as legislative intent calls for in Tenn. Code Ann. § 67-2-124(b), there will be an increase in state expenditures, and an equivalent increase in local government revenue, of: $99,746,100 in FY22-23; $88,663,200 in FY23-24; $77,580,300 in FY24-25; $66,497,400 in FY25-26; $55,414,500 in FY26-27; $44,331,600 in FY27-28; $33,248,700 in FY28-29; $22,165,800 in FY29-30; and $11,082,900 in FY30-31. To the extent the General Assembly does enact bills for each year FY17-18 through FY21-22 to reduce the HIT rate by one percent per year, there will be an increase in state expenditures, and an equivalent increase in local government revenue, of: $35,626,400 in FY17-18; $54,427,000 in FY18-19; $73,227,700 in FY19-20; $92,028,300 in FY20-21; $110,828,900 in FY21-22; $99,746,100 in FY22-23; $88,663,200 in FY23-24; $77,580,300 in FY24-25; $66,497,400 in FY25-26; $55,414,500 in FY26-27; $44,331,600 in FY27-28; $33,248,700 in FY28-29; $22,165,800 in FY29-30; and $11,082,900 in FY30-31.

Senate Status:         Referred to Finance Revenue Subcommittee.

House Status:         Taken off notice in Finance Subcommittee on 3/1/2017.

SB 1332 by Yarbro/HB 564 by Thompson - Discounted privilege taxes for motor vehicles owned or operated by service members and reservists. Allows any county that has levied or may levy a motor vehicle privilege tax, to grant active members of the national guard or the armed forces of the United States and members of a reserve component of the armed forces of the United States or the national guard who reside in the county, a fifty percent discount to pay for the issuance of a special decal, stamp, or other device evidencing of payment for an antique motor vehicle. The discount must be approved by a two-thirds vote of the county legislative body at two consecutive, regularly scheduled meetings, or approved by a majority of the number of qualified voters of the county voting in a referendum on the question of whether or not active and reserve members should be liable for payment of one-half of the tax.

Fiscal Note:            (Dated March 6, 2017) Decrease Local Revenue – Exceeds $4,200/Permissive

Senate Status:         Finance Revenue Subcommittee passed on 3/15/2017; Sent to Finance.

House Status:         Local Government Subcommittee deferred on 3/28/2017 to 2018.

PROFESSIONAL PRIVILEGE TAX

SB 205 by Bowling/HB 1034 by Van Huss - Eliminates the professional privilege tax. Eliminates the professional privilege tax for the tax year ending on May 31, 2018, and subsequent tax years.

Fiscal Note:            (Dated February 7, 2017) Decrease State Revenue - Net Impact - $88,918,900/FY16-17 and Subsequent Years Decrease State Expenditures - $974,400/FY16-17 and Subsequent Years Increase Local Revenue - $441,200/FY16-17 and Subsequent Years

Senate Status:         Finance Revenue Subcommittee sent to Finance with a negative recommendation on 3/1/2017.

House Status:         General Subcommittee of Finance placed behind the budget.

SB 234 by Harris/HB 602 by Williams - Professional privilege taxation. Amends language exempting an attorney who is legally forbidden to practice law by the supreme court of Tennessee, from the privilege tax.

Fiscal Note:            (Dated February 23, 2017) Decrease State Revenue – Net Impact – Exceeds $231,900 Increase Local Revenue – Exceeds $3,300

Senate Status:         Finance Revenue Subcommittee sent to Finance with a negative recommendation on 3/1/2017.

House Status:         Referred to Finance Subcommittee.

SB 306 by Kyle/HB 46 by Clemmons - Professional privilege tax. Exempts individuals from the professional privilege tax for the first year in which they are licensed or registered in a taxable profession.

Fiscal Note:            (Dated February 1, 2017) Decrease State Revenue - Net Impact - $9,004,100 Decrease State Expenditures - $98,800 Increase Local Revenue - $44,700

Senate Status:         Finance Revenue Subcommittee sent to Finance with a negative recommendation on 3/1/2017.

House Status:         Finance Subcommittee placed behind the budget.

PROFESSIONS AND LICENSURE

SB 290 by Yarbro/HB 355 by Beck - Includes sales prices for accounting and legal services within a central business improvement district as exempt from additional fees. Clarifies that the sales prices for accounting, legal, or other professional services provided within a central business improvement district located within a tourism development zone are not subject to an additional fee. –Bill changes definition to exclude accounting profession that is taxed in Nashville business improvement district.•

Senate Status:         Referred to State & Local Government.

House Status:         Referred to State Government Subcommittee.

SB 292 by Tracy/HB 333 by Doss - Changes regulatory board time requirements. Changes the time all costs assessed in accordance with this section are final to 35 days instead of 30 days after a final order of assessment is served.

Amendment:          House Business & Utilities Committee amendment 1 (003216), which deletes all language after the enacting clause and instead requires that the regulatory board retains and establishes the qualifications and compensation for investigators, inspectors, and other staff requiring professional qualifications. Requires all members of the board's staff requiring professional qualifications to serve at the pleasure of the board. Any expenditures by the board shall be subject to approval by the commissioner of finance and administration.

Senate Status:         Commerce passed on 3/28/2017 with amendment; Sent to Calendar Committee.

House Status:         Referred to Finance Subcommittee.

ü SB 473 by Roberts/HB 979 by Calfee - Freedom to Prosper Act. Enacts the "Freedom to Prosper Act" to prohibit local government entities with jurisdictional boundaries from: (1) Imposing any licensing requirements on an occupation unless the political subdivision imposed licensing requirements on that occupation prior to July 1, 2017. Subject to (3), a political subdivision may continue to impose licensing requirements on an occupation if the political subdivision imposed licensing requirements on that occupation prior to July 1, 2017; (2) Imposing any licensing requirement on an occupation that expands or increases any licensing requirements imposed on such occupation by a state agency; or (3) Continuing to impose licensing requirements on an occupation, if a state agency begins to impose licensing requirements on the occupation and the occupation was not previously subject to licensing requirements imposed by a state agency.

Fiscal Note:            (Dated March 5, 2017) Forgone Local Revenue – Exceeds $10,000 Local Expenditures – Cost Avoidance – Exceeds $10,000

Amendment:          Senate Commerce & Labor Committee Amendment 1 (006536) deletes and rewrites the bill such that the only substantive changes include: clarifies that the prohibition on new licensing requirements of a previously unregulated profession, occupation, or trade only applies to occupations which are currently subject to state licensure requirements; clarifies that the provisions of this bill as amended do not apply to licensing requirements of or on any other regulation of law enforcement officers, firefighters, emergency medical service providers, emergency rescue management providers, or any other type of first responder or emergency service provider.

Senate Status:         Commerce passed on 4/4/2017 with amendment 1; Sent to Calendar Committee.

House Status:         Set in Finance Subcommittee on 4/12/2017.

PUBLIC EMPLOYEES

ü SB 808 by Yager/HB 909 by Wirgau - County Financial Officer Certification and Education Act of 2017. Establishes the County Financial Officer Certification and Education Act of 2017. Requires certain county financial officers to complete initial training and continuing education in order to ensure competence in the handling of county funds and the protection of public moneys.

Fiscal Note:            (Dated March 11, 2017) Increase State Expenditures - $1,575,600/One-Time $500,000/Recurring Other Fiscal Impact – Upon depletion of the one-time $1,575,600 appropriation, there will be a mandatory recurring increase in local government expenditures for training of employees estimated to exceed $150,000 annually.* There is a potential temporary loss of use of an unknown but significant amount of sales tax revenue for any local government entity out of compliance with this legislation. The extent of any mandatory increase to local government expenditures for payment of employees at higher compensation rates due to professional certifications being obtained cannot be determined. An appropriation of $2,075,600 is included in the Governor’s Recommended Budget Document for FY17-18, on page B-90, of which $500,000 is recurring and $1,575,600 is non-recurring. SB 808 – HB 909

Senate Status:         Set in State & Local Government on 4/5/2017.

House Status:         Set in Local Government Subcommittee on 4/11/2017.

ü SB 1209 by Norris/HB 319 by Hawk - Background checks for employees with access to federal tax information. Authorizes state departments to obtain criminal background checks on all employees or contractors with access to federal tax information. Requires these departments to establish written policies related to employee background checks. Authorizes department chiefs to designate who meets the requirement for criminal background checks. –Part of Administration Package.•

Fiscal Note:            (Dated March 28, 2017) Increase State Revenue – $50,800/Tennessee Bureau of Investigation/FY17-18 $21,200/Tennessee Bureau of Investigation/FY18-19 and Subsequent Years Increase State Expenditures – $138,200/General Fund/FY17-18 $57,600/General Fund/FY18-19 and Subsequent Years

Amendment:          Senate State & Local Government Committee Amendment 1, House State Government Amendment 1 (005296) deletes and rewrites the proposed legislation to remove subsection (e) that authorized the chief executive officer of each department to establish the job titles and classifications subject to background checks.

Senate Status:         Finance, Ways & Means passed on 4/4/2017; Sent to Calendar Committee.

House Status:         State Government passed on 4/4/2017 with amendment 1; Set in Finance Subcommittee on 4/12/2017.

PUBLIC FINANCE

SB 157 by Watson/HB 132 by C. Johnson - Power of the Tennessee Local Development Authority to purchase bonds. Clarifies that the power of the Tennessee Local Development Authority to purchase bonds or notes under the Tennessee Local Development Authority Act is supplemental to other laws conferring that power. Explains professional services are not required to be based on competitive procurement methods. Requires superintendents of correctional institutions to keep records of supplies electronically or in a well-bound book. States bonds are exempt from gift taxes imposed prior to January 1, 2012.

Senate Status:         Referred to Finance, Ways & Means.

House Status:         Referred to State Government Subcommittee.

PC SB 314 by Briggs/HB 386 by Farmer - Reporting tax increment revenues. Requires tax increment agencies to file annual statement of revenue for only active plans which are currently producing tax increment revenues.

Status:                    Enacted as Public Chapter 17 effective March 24, 2017.

TAXES BUSINESS

SB 8 by Green/HB 714 by Whitson - Statutory apportionment formula used to calculate franchise and excise taxes. For tax years beginning on or after July 1, 2017, changes the statutory apportionment formula used to calculate franchise and excise taxes from a three-factor formula to a single-sales-factor formula.

Fiscal Note:            (Dated February 10, 2017) Decrease State Revenue – $12,233,000/FY17-18 $48,195,500/FY18-19 $90,795,500/FY19-20 $73,148,000/FY20-21 $67,500,000/FY21-22 and Subsequent Years Increase State Expenditures – $383,800/FY17-18 Other Fiscal Impact – Secondary economic impacts may occur as a result of this bill. Due to multiple unknown factors, fiscal impacts directly attributable to such secondary economic impacts cannot be quantified with reasonable certainty.

Senate Status:         Finance Revenue Subcommittee returned to Finance without a recommendation on 3/21/2017.

House Status:         Referred to Finance Subcommittee.

ü SB 302 by E. Jackson/HB 646 by McDaniel - Bail bonds tax excluded from total gross sales reported on business tax returns. Clarifies that the bail bonds tax collected by a bail bondsman shall be excluded from the total gross sales reported on business tax returns or deducted from the gross sales reported.

Fiscal Note:            (Dated March 2, 2017) Decrease State Revenue – $2,800 Decrease Local Revenue – $3,800

Senate Status:         Set in Finance, Ways & Means on 4/11/2017.

House Status:         Finance passed on 4/4/2017; Set on floor on 4/10/2017.

ü SB 351 by Lundberg/HB 509 by Crawford - Franchise tax credit. Extends the date by which applications for a franchise tax credit on purchases of industrial machinery can be received and approved by the commissioner of revenue and the commissioner of economic and community development to be exempt from the 15-year limitation on carrying forward credits, from January 1, 2011 to January 1, 2014.

Fiscal Note:            (Dated February 26, 2017) Decrease State Revenue – $1,500,000/FY27-28 Exceeds $1,500,000/FY28-29 and Subsequent Years

Senate Status:         Taken off notice in Finance Revenue Subcommittee on 3/1/2017.

House Status:         Set in Finance Subcommittee on 4/12/2017.

ü SB 828 by Yarbro/HB 844 by Fitzhugh - Requires a report on the total number of jobs created for which franchise and excise tax credits were claimed. Requires commissioner of revenue to annually report the total of created jobs which tax credits were claimed for the preceding year to finance, ways, and means committee.

Amendment:          Senate Finance, Ways & Means Committee Amendment 1, House Amendment 1 (005076) deletes all language after the enacting clause. Requires the Commissioner of the Department of Revenue (DOR) to report, by January 1, 2018, and annually thereafter, to the members of Finance, Ways and Means Committees of the General Assembly the following information with respect to franchise and excise tax credits claimed for tax periods ending during the previous fiscal year: the number of taxpayers claiming the credit; the total amount of credit claimed; the number of jobs created during the fiscal year as reported by the taxpayer, if the credit is awarded based on jobs created; the total amount of credit carried forward from a prior tax year; and the nature of business of the taxpayers claiming the credit, if the nature of the business is available.

Senate Status:         Finance, Ways & Means passed on 4/4/2017 with amendment 1; Sent to Calendar Committee.

House Status:         House passed on 4/6/2017 with amendment 1.

ü SB 901 by Bell/HB 65 by Smith - Exemption from franchise and excise tax liability for certain new businesses. Exempts certain new businesses from a portion of their franchise and excise tax liability during their first two years of existence based on the number of employees and the amount of gross receipts in the first two tax years.

Fiscal Note:            (Dated February 15, 2017) Decrease State Revenue – $388,000/FY18-19 $630,400/FY19-20 $668,200/FY20-21 $668,200/FY21-22 $323,300/FY22-23 $50,300/FY23-24

Senate Status:         Finance Revenue Subcommittee passed on 3/15/2017; Sent to Finance.

House Status:         Set in Finance Subcommittee on 4/12/2017.

ü SB 1078 by Lundberg/HB 1095 by T. Hill - Franchise and excise tax credits and exemptions for aeronautical jobs. Requires the department of revenue to report the number and amount of franchise and excise tax credits and exemptions issued to privately owned air carriers, general aviation airports, and aeronautical facilities operated in this state.

Amendment:          Senate Transportation & Safety Committee amendment 1 (006491) deletes and rewrites the bill, adding language that outlines repayment of grant funds for airports that received state funds for the planning and construction of any aerospace industrial park.

Senate Status:         Transportation & Safety passed on 3/29/2017 with amendment; Sent to Finance.

House Status:         Transportation Subcommittee passed on 4/5/2017; Set in Transportation on 4/11/2017.

ü SB 1207 by Norris/HB 320 by Hawk - Re-calculation of franchise/excise tax payments. Alters the formula used to calculate quarterly payments for franchise and excise taxes. Reduces the penalty for failing to timely file an excise tax exemption form from $1,000 to $200. –Part of Administration Package. Annualization bill. Funded in budget. TSCPA supports.•

Fiscal Note:            (Dated February 28, 2017) Decrease State Revenue – $11,225,900/FY16-17 $3,697,700/FY17-18 $261,100/FY18-19 and Subsequent Years The Governor’s Recommended Budget Document for FY17-18, on page A-38, recognizes a one-time decrease in state revenue to the General Fund of $3,436,600, and a recurring decrease in state revenue to the General Fund of $261,100. The proposed budget further recognizes a decrease in state revenue to the General Fund of $11,225,900 in FY16-17.

Senate Status:         Senate passed on 4/3/2017.

House Status:         House passed on 3/27/2017.

Other Status:          Sent to the speakers for signatures on 4/3/2017.

SB 1236 by Norris/HB 957 by Akbari - Community resurgence job tax credits. Revises the wage requirement for a qualifying job under the Community Resurgence Job Tax Credit Act of 2015 from requiring wages equal to, or greater than, the state's average occupational wage to requiring wages at least 65 percent of the labor workforce development area wage.

Fiscal Note:            (Dated March 8, 2017) Decrease State Revenue – Exceeds $50,000/FY17-18 Exceeds $100,000/FY18-19 and Subsequent Years Forgone State Revenue – Exceeds $50,000/FY17-18 Exceeds $100,000/FY18-19 and Subsequent Years

Senate Status:         Finance Revenue Subcommittee passed on 3/15/2017; Sent to Finance.

House Status:         General Subcommittee of Finance placed behind the budget.

SB 1274 by Norris/HB 1042 by Gant - Taxation of business entities and their owners. Allows professionals who own corporations, limited partnerships, and similar business entities to take their professional privilege tax payment as a credit against the business entity's franchise and excise tax liability.

Fiscal Note:            (Dated March 8, 2017) Decrease State Revenue – $2,000,000

Senate Status:         Finance Revenue Subcommittee returned to Finance on 3/15/2017 with a negative recommendation.

House Status:         Finance Subcommittee placed behind the budget.

SB 1277 by Norris/HB 1345 by Camper - Pilot program to issue franchise and excise tax credits to shippers making shipments into and from Shelby County. Establishes a pilot program to issue franchise and excise tax credits to shippers making shipments into and from Shelby County. Requires a shipper to establish and implement a turn-around policy that assures pickups and deliveries are performed during the period of time agreed upon, and that the shipper provides the motor carrier with contact information for any person receiving the delivery.

Fiscal Note:            (Dated March 10, 2017) Decrease State Revenue – Exceeds $2,065,900/FY18-19 and Subsequent Years Increase State Expenditures – $149,300/FY18-19 $139,600/FY19-20 and Subsequent Years Other Fiscal Impact – Secondary economic impacts may occur as a result of this bill. Such impacts may be reflected as improvements in shipment delivery times for Tennessee businesses, an increase in the state’s competitiveness in retaining existing shipping companies and recruiting other shipping companies to locate in the state, and additional commercial activity in the state as a result of qualified companies reinvesting their savings in the state’s economy. Any fiscal impacts directly attributable to such economic impacts are considered secondary and cannot be quantified with reasonable certainty.

Senate Status:         Finance Revenue Subcommittee returned to Finance on 3/15/2017 with a negative recommendation.

House Status:         Finance Subcommittee placed behind the budget.

ü SB 1426 by Tracy/HB 674 by Lynn - Retailers to deduct bad debt written off by a lender from a private label credit card account. Allows retailers to deduct bad debt written off by a lender from a private label credit card account on the retailer's sales tax return under certain conditions.

Fiscal Note:            (Dated March 17, 2017) Decrease State Revenue – $4,367,000 Decrease Local Revenue – $1,750,000

Senate Status:         Referred to Delayed Bills.

House Status:         Set in Finance Subcommittee on 4/12/2017.

TAXES FUEL

ü SB 1221 by Norris/HB 534 by Casada – Transportation Funding. –Part of Administration Package. Gas Tax bill.•

Amendment:          House Finance, Ways & Means Subcommittee Amendment 1 (006827) enacts the Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy (IMPROVE) Act. Increases motor vehicle registration fees for Class (A) through Class (H) vehicles by $5.00 each. Imposes an additional motor vehicle registration and renewal fee of $100.00 on electric vehicles. Increases registration fees for private and commercial motor vehicles operating for hire who transport passengers by $10.00 each. Increases registration taxes for trucks and truck tractors by $20.00 each. Increases the gasoline tax rate from $0.20 per gallon to: $0.24 per gallon effective July 1, 2017; $0.25 per gallon effective July 1, 2018; and $0.26 per gallon effective July 1, 2019. Requires all revenue generated from the gasoline tax rate increase be allocated as follows: 25.40 percent to counties (subject to certain restrictions); 12.70 percent to municipalities; and 61.90 percent to the Highway Fund. Deletes the local gasoline tax option, codified in Tennessee Code Annotated Chapter 67, Title 3, Part 10, which authorized municipalities and counties to levy a local gasoline tax of $0.01 per gallon to fund public transportation systems. Increases the diesel tax rate from $0.17 per gallon to: $0.21 per gallon effective July 1, 2017; $0.24 per gallon effective July 1, 2018; and $0.27 per gallon effective July 1, 2019. Establishes that the diesel tax rate will remain $0.17 for diesel fuel that is indelibly dyed and used by a commercial carrier to produce power for a means of transportation, as defined in the Transportation Fuel Equity Act. Requires all revenue generated from the diesel tax rate increase be allocated as follows: 17.50 percent to counties; 8.80 percent to municipalities; and 73.70 percent to the Highway Fund. Increases the liquified gas tax rate from $0.14 to: $0.17 per gallon effective July 1, 2017; $0.19 per gallon effective July 1, 2018; and $0.22 per gallon effective July 1, 2019. Requires all revenue generated from the liquified gas tax rate increase be allocated to the Highway Fund. Increases the compressed natural gas tax rate from $0.13 to: $0.16 per gallon effective July 1, 2017; $0.18 per gallon effective July 1, 2018; and $0.21 per gallon effective July 1, 2019. Requires all revenue generated from the compressed natural gas tax rate increase be allocated to the Highway Fund. Establishes the intent of the General Assembly that all revenues derived from the increased taxes and fees imposed by the IMPROVE Act on petroleum products, alternative fuels, and motor vehicle registrations, shall be used to: Maintain roads and bridges on the state highway system, including the interstate highway system; Support economic development through the construction of transportation facilities in accordance with the State Industrial Access Act and the Local Interstate and Fully Controlled Access Highway Connector Act; Maintain public roads and bridges within the boundaries of the state parks; Support local government investment in transit programs to improve regional transit services across the state and help manage congestion along major highways; Assist rural transit providers in improving the efficiency of demand response services; o Support projects and programs identified in the Department of Transportation’s annual transportation improvement program; and Fund the development and construction of 962 projects specified in the IMPROVE Act. Authorizes the Department of Transportation (TDOT) to recommend modifications of the project list, and requires the Department to report to the General Assembly, beginning on or before July 1, 2018, and annually thereafter, on the status of projects listed in the IMPROVE Act. Authorizes local governments to levy a surcharge on the same privileges subject to the following taxes, if the underlying local tax on such privileges is currently being collected: local option sales and use tax; business tax; motor vehicle tax; local rental car tax; tourist accommodation tax or hotel occupancy tax; and residential development tax. Establishes maximum rates for such surcharges. Establishes that no such surcharge shall become effective unless a local government develops and adopts a transit improvement program, and unless it is approved by a majority of the number of registered voters of the local government. Defines “local government” as any county in the state or any city having a population in excess of 112,000 according to the 2010 federal census or any subsequent federal censuses; or any city having a population in excess of 165,000 according to the 2010 federal census or any subsequent federal censuses. Establishes that any surcharge shall be levied, collected, and administered in the same manner as the applicable underlying local tax, and authorizes the Department of Revenue (DOR) to keep an administrative fee of 1.125 percent of proceeds of any such surcharge that the Department will administer and collect. Requires revenue from the surcharge be used for costs associated with the planning, engineering, development, construction, implementation, administration, management, operation, and maintenance of public transit system projects that are part of a transit improvement plan. Establishes that, if a transit improvement program or public transit system project becomes unfeasible, impossible, or not financially viable, the revenue from the surcharge may be directed to and utilized for separate transit improvement program or public transit system project, if certain conditions are met. Authorizes taxpayers whose principal business in Tennessee is manufacturing to elect to apportion their net worth, for franchise tax purposes, and their net earnings, for excise tax purposes, by multiplying them by a fraction, the numerator of which is the total receipts of the taxpayer in Tennessee during the taxable year and the denominator of which is the total receipts of the taxpayer from any location within or outside of the state during the taxable year. This authorization applies to tax years beginning on or after January 1, 2017. Establishes that a taxpayer’s principal business in Tennessee is manufacturing if more than 50 percent of the revenue derived from its activities in this state, excluding passive income, is from fabricating or processing tangible personal property for resale and consumption off the premises. Decreases, from 5.00 percent to 4.00 percent, the state sales tax rate on the retail sale of food and food ingredients. This tax rate decrease is effective July 1, 2017. Decreases the Hall Income Tax (HIT) rate from 5.00 percent to: 4.00 percent for tax years beginning on or after January 1, 2017; 3.00 percent for tax years beginning on or after January 1, 2018; 2.00 percent for tax years beginning on or after January 1, 2019; 1.00 percent for tax years beginning on or after January 1, 2020; and zero percent for tax years beginning on or after January 1, 2021.

Senate Status:         Set in Finance, Ways & Means on 4/11/2017.

House Status:         Finance Subcommittee passed on 4/5/2017 with amendment 1; Set in Finance on 4/11/2017.

SB 1275 by Norris/HB 1253 by Rudd - Claims of tax refunds for gasoline losses. Increases the amount of time from 60 days to 90 days in which a vendor must submit a written claim for a refund of tax on a loss of gasoline or diesel due to fire, flood, storm, theft, or other causes over which a vendor has no control.

Senate Status:         Referred to Transportation.

House Status:         Referred to Transportation Subcommittee.

TAXES GENERAL

SB 193 by Overbey/HB 331 by Swann - People 100 years of age or older exempt from the Hall income tax. Exempts people 100 years of age or older, or any persons who file a joint return and either spouse is 100 years of age or older, from the Hall income tax.

Fiscal Note:            (Dated February 3, 2017) Decrease State Revenue - Net Impact - $76,000/Each Year FY17-18 through FY21-22 Decrease Local Revenue - Net Impact - $40,600/Each Year FY17-18 through FY21-22

Senate Status:         Taken off notice in Finance, Ways & Means.

House Status:         General Subcommittee of Finance placed behind the budget.

ü SB 1350 by Bailey/HB 693 by Williams - Report on the amount of disaster relief refunds issued by the department of revenue. Requires the commissioner of revenue to annually report the amount of disaster relief refunds issued by the department.

Senate Status:         Set in State & Local Government on 4/11/2017.

House Status:         Transportation Subcommittee deferred on 4/5/2017 to 2018.

TAXES PROPERTY

ü SB 21 by Green/HB 23 by M. Hill - Property tax relief for disabled veterans. Re-establishes the first portion of home value for which real property tax relief will be reimbursed to disabled veteran home owners from $100,000 to $175,000.

Fiscal Note:            (Dated February 9, 2017) Increase State Expenditures - $4,835,000

Senate Status:         Taken off notice in State & Local Government on 4/4/2017.

House Status:         Set in Local Government Subcommittee on 4/11/2017.

ü SB 23 by Green/HB 20 by Forgety - Property tax relief for disabled veterans and low-income elderly. Increases the home value for which real property tax relief will be granted from $100,000 to $175,000 for veterans with disabilities and from $23,500 to $25,000 for low-income elderly or disabled homeowners.

Fiscal Note:            (Dated February 15, 2017) Increase State Expenditures - $5,992,200

Amendment:          House Local Government Amendment 2 (006630) deletes and rewrites the bill to require the state to reimburse the first 27,000 of the full market value of such property owned by elderly low-income homeowners and disabled homeowners and the first $135,100 of the full market to disabled veterans.

Senate Status:         State & Local Government Veterans Affairs Subcommittee returned to full committee with a neutral recommendation on 3/6/2017.

House Status:         Local Government Subcommittee passed on 4/4/2017 with amendment 1; Sent to Finance.

SB 139 by Dickerson/HB 87 by Crawford - County board of equalization notices of final decision. Requires the county board of equalization to give notice to any property owner that appears before the board of its final decision and the procedure of appeal to the state board of equalization. Also to give notice of the taxpayer's right to electronically file an appeal to the state board of equalization including a link to the online appeal form, the current address of the state board of equalization as indicated on its website, statutory deadlines, and any other information required by the state board of equalization.

Status:                    Sent to the Governor on 3/30/2017.

PC SB 142 by Bailey/HB 83 by Gravitt - County board of equalization continuing education and training. Requires board members of the board of equalization and county board hearing officers to complete annual continuing education and training on duties and responsibilities of their office as a condition of appointment or continued service. Requires a minimum of at least four hours of training for board members to complete annually and minimum recordkeeping requirements related to members' certificates of attendance. Such training will include board governance, open meetings requirements, and other topics reasonably related to the duties of the members of the county board of equalization.

Amendment:          House amendment 1 (003956) adds new language to clarify that mandatory annual continuing education and training is only required under subsection (e) of the bill, to the extent that the education and training is provided by the comptroller of the treasury free of charge.

Status:                    Enacted as Public Chapter 13 effective March 24, 2017.

ü SB 238 by Haile/HB 282 by Carr - Board of Equalization- property tax appeals. Authorizes the state board of equalization to appoint members from the division of property assessments, to serve in the capacity of hearing examiners to conduct preliminary hearings and to make investigations for the board or the assessment appeals commission regarding complaints and appeals from assessments and classifications. Clarifies that a hearing examiner includes an administrative judge serving by appointment of the state board of equalization or an administrative judge serving on behalf of the board under appointment by the secretary of state. Sets standards for a review hearing in the case of an appeal of a hearing examiners' decision, or if the state board of equalization or the assessment appeals commission does not adopt the recommendation of the hearing examiner.

Senate Status:         Senate passed on 3/20/2017.

House Status:         House passed on 4/3/2017.

Other Status:          Sent to the Governor on 4/6/2017.

ü SB 254 by Crowe/HB 176 by Forgety - Property tax relief for disabled veterans. Increases the property value threshold for determining the extent of property tax relief payments to disabled veterans and their surviving spouses from $100,000 to $175,000 of the full market value of the property.

Fiscal Note:            (Dated March 5, 2017) Increase State Expenditures - $3,219,500/FY17-18 $2,961,900/FY18-19 Other Fiscal Impact – In FY19-20 and subsequent years, the estimated increase in state expenditures pursuant to this bill will diminish by approximately eight percent each year into perpetuity until the impact of the property tax relief program is constant with the impact experienced under current law.

Senate Status:         State & Local Government Veterans Affairs Subcommittee returned to full committee with a neutral recommendation on 3/6/2017.

House Status:         Set in Local Government Subcommittee on 4/11/2017.

ü SB 257 by Tracy/HB 579 by Tillis - Notice to property taxpayer in property tax case. States that return of the receipt for a mailed summons or notice that is either signed by the defendant or marked refused shall be grounds for a default judgment in a delinquent property tax case.

Senate Status:         Senate passed on 4/3/2017.

House Status:         House passed on 3/27/2017.

Other Status:          Sent to the speakers for signatures on 4/3/2017.

ü SB 564 by Harper/HB 585 by Love – Meharry Medical College exempt from property taxes in Davidson County. Exempts Meharry Medical College in Davidson County from property taxes.

Fiscal Note:            (Dated February 27, 2017) Decrease Local Revenue - $735,100/FY17-18/Davidson County Increase Local Expenditures - $130,700/FY17-18/Davidson County*

Amendment:          House Finance Committee Amendment 1 (005818) deletes language of the original bill that referenced nonprofit medical college educational institutions located in Shelby County. Clarifies that a county is not required to refund any taxes collected prior to the effective date of the act.

Senate Status:         State & Local Government passed on 3/21/2017; Sent to Finance.

House Status:         Finance passed on 4/4/2017 with amendment 1; Set on floor on 4/13/2017.

SB 594 by Watson/HB 544 by McCormick - Report on counties and cities that have adopted property tax freeze program. Requires the comptroller to report to the chairs of the senate finance, ways and means committee and the house finance, ways and means committee concerning the number of counties and municipalities that have adopted the property tax freeze program by ordinance or resolution by January 15, 2018.

Senate Status:         Referred to Finance, Ways & Means.

House Status:         Referred to Local Government Subcommittee.

ü SB 870 by Yarbro/HB 1357 by Mitchell - Property tax freeze for elderly. Requires that an application for a property tax freeze be approved if the qualified applicant dies prior to filing the application on or after January 1 of the tax year for which the freeze is sought

Fiscal Note:            (Dated March 23, 2017) Other Fiscal Impact – To the extent qualified property tax freeze program recipients die on or after January 1 but prior to filing applications for the applicable tax year, the applicable local governments offering such tax freeze programs may incur a decrease in local property tax revenue if qualified applications are submitted after such recipients’ deaths. The extent and timing of any such decreases are unknown.

Senate Status:         Set in State & Local Government on 4/11/2017.

House Status:         Set in Local Government Subcommittee on 4/11/2017.

ü SB 904 by Bell/HB 912 by Wirgau - Redefines "farm property" for classification and assessment of property tax. Redefines "farm property" for classification and assessment of property tax.

Fiscal Note:            (Dated March 11, 2017) Decrease Local Revenue – Net Impact – $1,470,900

Amendment:          Senate State & Local Government Committee Amendment 1, House Local Government Committee Amendment 1 (005385) deletes language in the original bill that defines “farm property” and replaces it with language specifying that “agriculture” shall be defined by Tenn. Code Ann. § 1-3-105(2) and § 43-1-113, for purposes of property tax assessment.

Senate Status:         State & Local Government passed on 4/4/2017 with amendment 1; Set in Finance, Ways & Means on 4/11/2017.

House Status:         Local Government passed on 4/4/2017 with amendment 1; Sent to Finance.

ü SB 907 by Bell/HB 768 by Howell - Mailings of notice by delinquent tax attorneys. Clarifies that a delinquent tax attorney preparing to seize personal property may, when delivering notice by mail, deliver the notice by certified, registered, or first class mail.

Amendment:          Senate State & Local Government Committee Amendment 1, House Amendment 1 (005253) rewrites this bill to authorize an assessor of property to presume that a mobile home attached to real property that is used as a residence may be classified as residential property for purposes of property taxes. This amendment applies to tax years beginning on or after January 1, 2017.

Senate Status:         State & Local Government passed on 4/4/2017 with amendment 1; Set in Finance, Ways & Means on 4/11/2017.

House Status:         House passed on 4/3/2017 with amendment 1.

ü SB 940 by Ketron/HB 791 by Sparks - Property taxes Equalization Board adjustments. Deletes an outdated cross-reference to a deleted statute.

Amendment:          Senate State & Local Government Committee Amendment 1, House Local Government Amendment 1 (005178) deletes all language after the enacting clause. Establishes a 15 acre minimum for property classified as forest land under the agricultural, forest, and open space land act. Transfers the responsibility for taxpayers appeals of forest land eligibility determination from the state forester to the county boards of equalization and the state board of equalization. Senate State & Local Government Committee Amendment 2 (006304) changes the effective date.

Senate Status:         State & Local Government passed on 4/4/2017 with amendments 1 and 2; Sent to Finance.

House Status:         Finance Subcommittee passed on 4/5/2017; Set in Finance on 4/11/2017.

SB 1235 by Norris/HB 874 by Akbari - Expansion of the tax credit allowed for the purchase of brownfield property. Taxes, Exemption and Credits. Makes revisions to tax credits, such as expanding the tax credit allowed for the purchase of brownfield property to include real property that was previously the subject of an investigation or remediation as a brownfield project under a voluntary agreement or consent order.

Fiscal Note:            (Dated March 11, 2017) Decrease State Revenue – $9,940,000

Senate Status:         Referred to State & Local Government.

House Status:         Taken off notice in Local Government Subcommittee on 4/4/2017.

ü SB 1264 by Norris/HB 172 by McCormick - Veteran's disability status for purposes of property tax relief. Changes from "United States department of veterans administration" to "United States department of veterans affairs" the name of the agency responsible for making determinations of a veteran's disability status for purposes of qualifying for property tax relief.

Amendment:          Senate State & Local Government Veterans Affairs Subcommittee amendment 1 (004670), which raises the reimbursement on local property taxes for disabled veterans from 100,000 dollars to 135,100 dollars, and requires that the amount of reimbursement be updated annually by the comptroller of the treasury to reflect inflation

Senate Status:         State & Local Government Veterans Affairs Subcommittee passed on 3/6/2017 with amendment; Sent to State & Local Government.

House Status:         Set in Local Government Subcommittee on 4/11/2017.

ü SB 1318 by Crowe/HB 86 by Curcio - Property tax exemption records. Changes the language of the preexisting code to clarify that property assessors may retain electronic or digital copies of property tax exemption applications to comply with existing retention requirement.

Senate Status:         Senate passed on 3/13/2017.

House Status:         House passed on 4/3/2017.

Other Status:          Sent to the Governor on 4/6/2017.

ü SB 1370 by Bailey/HB 425 by Williams - County board of equalization to conduct certain hearings by phone. Authorizes a county board of equalization to conduct hearings by telephone, television, software or electronic means when a taxpayer is provided an opportunity to challenge an increase of tax assessment or change in property classification.

Amendment:          House Amendment 1 (005113) deletes all language after the enacting clause. Authorizes the county trustee or other property tax collecting official to decline to bill the tax, decline to refer the tax for further collection, or abate any penalty or interest otherwise due for late payment of the tax in the instance of a de minimus property tax of less than five dollars that is authorized by a private act, resolution, or ordinance levying the tax. Requires the tax collecting official to maintain a list of de minimus taxes by parcel and by year, and the tax may be collected when a tax related to the same parcel is tendered for a later year provided that such collection is not barred by any applicable statute of limitations.

Senate Status:         Set in State & Local Government on 4/11/2017.

House Status:         House passed on 3/30/2017 with amendment.

TAXES SALES

SB 3 by Dickerson/HB 6 by R. Williams - Apportionment of sales tax revenue associated with a major league soccer franchise. Allocates state sales tax revenue derived from sales of admissions to events of a major league soccer franchise to the municipality in which a sports authority is organized and has secured the franchise.

Fiscal Note:            (Dated February 26, 2017) Other Fiscal Impact – To the extent Nashville’s bid for a major league soccer team is successful, the state would forgo $1,364,200 in revenue each year beginning in FY19-20. All of this forgone revenue, plus an additional $65,800 that the local government would receive under current law pursuant to the state-shared sales tax allocation for a total of $1,430,000, would be allocated to Nashville for the exclusive use of the sports authority.

Senate Status:         Finance Revenue Subcommittee passed on 3/1/2017; Sent to Finance.

House Status:         House passed on 3/30/2017.

SB 10 by Green/HB 15 by Goins - Exemption - vehicles sold to disabled veteran or service member. Exempts from sales tax, registration fees, and motor vehicle privilege tax, any motor vehicle sold, given or donated to a veteran or service member who has a service-connected disability and who is eligible for a U.S. Department of Veterans Affairs automobile grant under the Disabled Veterans' and Servicemen's Automobile Assistance Act of 1970.

Fiscal Note:            (Dated January 24, 2017) Decrease State Revenue - Net Impact - $100,700 Decrease Local Revenue - $6,000

Senate Status:         Transportation & Safety passed on 3/6/2017; Sent to Finance.

House Status:         Finance Subcommittee placed behind the budget.

SB 368 by Overbey/HB 369 by Carr - Materials purchased by a local education agency. Exempts contractors and subcontractors from the sales or use tax on construction materials if the materials are purchased by a local education agency and are used in the construction or improvements of such entity.

Fiscal Note:            (Dated February 18, 2017) Decrease State Revenue –$7,346,200 Decrease Local Revenue –$2,997,800 Decrease Local Expenditures –$10,344,000

Senate Status:         Finance Revenue Subcommittee returned to Finance without a recommendation on 3/21/2017.

House Status:         Finance Subcommittee placed behind the budget.

SB 415 by Lundberg/HB 1101 by T. Hill - Increase in local option sales tax rate without referendum. Allows county and municipal governments to increase existing local option sales tax rates without approval of the voters in a referendum. Requires any increase by local governments to be subject to approval of the local legislative body by a two-thirds vote.

Fiscal Note:            (Dated March 18, 2017) Other Fiscal Impact – A potential, unquantifiable, increase in local government revenue and a potential, unquantifiable, cost avoidance for local governments that would hold a referendum not in conjunction with a regular election under current law.

Senate Status:         Referred to State & Local Government.

House Status:         Withdrawn in House on 3/2/2017.

SB 416 by Lundberg/HB 697 by Crawford - Exemption - diapers used by children. Exempts from sales and use tax the gross receipts derived from the sale of diapers for use by children.

Fiscal Note:            (Dated March 1, 2017) Decrease State Revenue – Net Impact – $6,825,700 Decrease Local Revenue – Net Impact – $2,785,400

Senate Status:         Referred to Finance Revenue Subcommittee.

House Status:         Referred to Finance Subcommittee.

SB 846 by Briggs/HB 611 by Kane - Exemption - pet grooming services. Exempts pet grooming services from the sales and use tax.

Fiscal Note:            (Dated February 23, 2017) Decrease State Revenue – Net Impact – $1,407,400 Decrease Local Revenue – Net Impact – $574,300

Senate Status:         Finance Revenue Subcommittee sent to Finance with a negative recommendation on 3/1/2017.

House Status:         Taken off notice in Finance Subcommittee on 3/8/2017.

SB 955 by Tracy/HB 703 by K. Brooks - Dealers may retain portion of taxes to compensate for costs incurred in accounting and remitting such taxes. Allows dealers reporting and remitting sales taxes to the department of revenue to retain a certain portion of those taxes in order to compensate for costs incurred in discharging their duties.

Fiscal Note:            (Dated February 25, 2017) Increase State Revenue – Net Impact – $12,490,900 Decrease Local Revenue – Net Impact – $30,553,700

Senate Status:         Taken off notice in Finance Revenue Subcommittee on 3/21/2017.

House Status:         Finance Subcommittee placed behind the budget.

SB 963 by Roberts/HB 1012 by Hawk - Report on revenue generated from sales tax on food. Requires the commissioner of revenue to annually report the amount of revenue generated from the tax on the sale of food to the chairs of the finance, ways and means committees of the senate and the house.

Senate Status:         Taken off notice in Finance Revenue Subcommittee on 3/15/2017.

House Status:         Failed in Transportation Subcommittee on 3/1/2017.

SB 1004 by Beavers/HB 744 by Powers - Second amendment sales tax holiday. Establishes a Second Amendment sales tax holiday for the first weekend of September of each year for firearms and ammunition.

Fiscal Note:            (Dated March 10, 2017) Decrease State Revenue – $235,000 Increase State Expenditures – $95,900

Senate Status:         Finance Revenue Subcommittee passed on 3/15/2017; Sent to Finance.

House Status:         General Subcommittee of Finance placed behind the budget.

SB 1118 by Kyle/HB 833 by Jones - Reduces state sales tax rate on diapers, feminine hygiene products, and nonexempt over-the-counter drugs. Reduces the state sales and use tax rate on retail sales of diapers, feminine hygiene products, and nonexempt over-the-counter drugs from 7 percent to 5 percent.

Fiscal Note:            (Dated March 8, 2017) Decrease State Revenue – Net Impact – $14,543,100 Decrease Local Revenue – Net Impact – $509,900

Senate Status:         Finance Revenue Subcommittee returned to finance with a negative recommendation on 3/21/2017.

House Status:         Referred to Finance Subcommittee.

SB 1169 by Hensley/HB 426 by Butt - Exemption - CPAP supplies. Exempts CPAP supplies from being subject to sales and use tax.

Fiscal Note:            (Dated March 8, 2017) Decrease State Revenue – Net Impact – $1,275,000 Decrease Local Revenue – Net Impact – $520,300

Senate Status:         Finance Revenue Subcommittee returned to Finance with a negative recommendation on 3/21/2017.

House Status:         Finance Subcommittee deferred on 3/29/2017 to last calendar.

SB 1174 by Hensley/HB 926 by Butt - Reduces sales and use tax on food. Reduces the sales and use tax on food from 5 percent to 4.5 percent.

Fiscal Note:            (Dated February 22, 2017) Decrease State Revenue – Net Impact – $57,588,600 Decrease Local Revenue – Net Impact – $2,018,800 General

Senate Status:         Taken off notice in Finance Revenue Subcommittee on 3/1/2017.

House Status:         Referred to Finance Subcommittee.

ü SB 1208 by Norris/HB 318 by Hawk - Delays effective date of certain streamlined sales tax provisions. Delays effective date of certain streamlined sales tax provisions until July 1, 2019. –Part of Administration Package.•

Senate Status:         Senate passed on 4/3/2017.

House Status:         House passed on 3/20/2017.

Other Status:          Sent to the speakers for signatures on 4/3/2017.