2017 Other Bills of Interest

The 2017 session of the 110th General Assembly adjourned on Wednesday, May 10, 2017.  With almost 2,000 bills and resolutions introduced, this proved to be a busy session for the Tennessee Apartment Association.  Highlights from this legislative session include the passage of the IMPROVE Act which will help maintain and expand Tennessee’s safe and reliable transportation network, the Tennessee Broadband Accessibility Act which proposes a responsible path to improve access to broadband, and the Reconnect Act which offers all adults without a degree tuition-free access to community college.  As is required by the Tennessee Constitution, the legislature passed a balanced $37.1 billion budget, taking on no new debt and cutting taxes by $257 million in the next fiscal year. As always, TAA monitored all legislation and actively lobbied relative legislation on behalf of its members to ensure that Tennessee remains friendly to the multifamily housing industry by providing a business friendly environment with limited regulation and oversight.

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TAA-Initiated Legislation

In 2016, the 109th General Assembly enacted Public Chapter 822 that prohibited a local governmental unit from enacting, maintaining, or enforcing “any zoning regulation, requirement, or condition of development imposed by land use or zoning ordinances, resolutions, or regulations or pursuant to any special permit, special exception, or subdivision plan that requires the direct or indirect allocation of a percentage of existing or newly constructed private residential or commercial units for long-term retention as affordable or workforce housing.”  Subsequently, on September 6, 2016, the Metropolitan Government of Nashville and Davidson County enacted an ordinance to incentivize inclusionary housing with any residential development that seeks additional development entitlements beyond that permitted by the current zoning district.  While the members of GNAA are more comfortable with the language that passed than what was originally introduced, the program is an incredibly inefficient way to address the needs of low-income families and is in direct conflict with Public Chapter 822.  Despite multiple requests, the Attorney General refused to issue an opinion on the legality of Metro’s inclusionary housing program due to the threat of and potential for pending legislation by other interested stakeholders.  As such, the Tennessee Apartment Association Board of Director’s vote to pursue legislation addressing the issue at the state level.

Senate Bill 0363 by Senator Ferrell Haile/House Bill 1143 by House Majority Leader Glen Casada was introduced to clarify that no local government has the authority to enact a law that would place requirements regarding inclusionary, affordable, or below market value housing when entitlements, variances, or any other form of permit or authorization is sought from the local government.  Specifically, the language prohibits a local government from conditioning any zoning change, variance, building permit, or any change in land use restrictions or requirements on the allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates.  Additionally, the language prohibits a local government from requiring a person to waive the person’s constitutionally protected rights related to real property in order to increase the number of existing or newly constructed private residential or commercial rental units to be available for purchase or lease at below market rates.  Nothing in the language precludes a local government from creating or implementing a purely voluntary incentive-based programed designed to increase the construction or rehabilitation of workforce or affordable housing.  Such programs may include providing local tax incentives, subsidization, real property or infrastructure assistance, or any other incentive that makes the construction of affordable housing more economical, so long as no power or authority granted to the local government to regulate zoning or land use planning is used to incentivize or leverage a person to develop, build, sell, or rent housing at below market value.

The senate bill will be heard by the Senate State and Local Government Committee.  The house companion bill will be heard by the House Local Government Committee.  The bill is expected to begin making its way through the committee process within the next few weeks. If passed, all ordinances, resolutions, regulations, rules, or requirements of any type of a local government that are in conflict with the language, including Metro’s program, will be void and unenforceable.

The 110th General Assembly Convenes

The 110th General Assembly convened on Tuesday, January 10, 2017.  The legislative session began its work with the swearing-in ceremony of both re-elected and newly elected legislators and concluded with the assignment of the members to their respective committees.

Twelve new legislators join the General Assembly this year. In the Senate, Senator Jon Lundberg (R – Bristol) will move up from the House to fill the seat vacated by retiring Lt. Governor Ron Ramsey.  In the House, there are eleven new representatives.  They are: John Crawford (R – Kingsport), Michael Curcio (R – Dickson), Ron Gant (R – Williston), Gary Hicks (R- Rogersville), Mark Lovell (R – Eads), Tim Rudd (R- Murfreesboro), Paul Sherrell (R – Sparta), Rick Staples (D – Knoxville), Dwayne Thompson (D – Cordova), Rick Tillis (R – Lewisburg), and Sam Whitson (R – Franklin).

With the retirement of Lt. Governor Ron Ramsey, the Tennessee Senate elected Senator Randy McNally (R – Oak Ridge) to preside over the body as the next Lt. Governor and Speaker of the Senate. He assumes the post after previously serving as Chairman of the Senate Finance, Ways, and Means Committee for the past eight years.  Otherwise, Senate leadership remains unchanged.

In the House, Speaker of the House Beth Harwell (R – Nashville) was re-elected unanimously to another two-year term as Speaker. Aside from the speakership, the House saw a number of changes to its senior leadership.  Representative Glen Casada (R – Thompsons Station) now assumes the role of majority leader, replacing newly-named House Finance Subcommittee Chairman Representative Gerald McCormick.  Representative Ryan Williams (R – Cookeville) takes over for Casada as the new House Republican Caucus Chairman.

As is tradition, the legislature adjourned from its organizational session for two weeks in order to move offices, get acquainted with new roles, and attend orientation sessions for newly elected officials. The bodies will reconvene on Monday, January 30 for the Governor’s State of the State address and to begin the state’s work.

Key issues to watch in 2017 include a long-term transportation fund that is expected to lead to a proposed gas tax increase; repeal of ‘health care’ and health insurance increases; a push to allow wine and liquor sales on Sunday; BEP education funding; municipal broadband access; and tax on out-of-state internet sales. Of interest to the multifamily industry is a push for uniform regulations for short-term rental properties and continued work on rent-control and inclusionary zoning policies.