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Hospitalty & Tourism Legislative Update

The General Assembly began its 2024 session on January 9th at noon as required by the Tennessee Constitution. However, both the House& Senate closed for the week of January 15th due to extreme weather, dangerous temperatures, and treacherous road conditions. The General Assembly will resume business on Monday, January 22.

The House spent the first week adopting new rules. As finally adopted, the rules require a ticket to sit in one side of the house gallery. The other side of the house gallery remains open to the public on a first come, first served basis. Additional rules adopted limit member speaking and strengthen the speaker’s ability to punish members who are out of order.

This session is expected to be short for several reasons.

  1. It is an election year and members can’t raise money until the session is over.

  2. Members are in Nashville for 3 1/2 days a week making it difficult for them to campaign, while challengers are free to raise funds and campaign.

  3. There is a lack of surplus funds. When there are surplus funds to be argued over during the session, it takes a week or two longer for members to fight over the gravy. This year’s tax receipts have not reached the level predicted in this year’s budget.

There is an additional cause for fiscal caution because there is litigation challenging the legality of the state’s franchise tax. The franchise tax on business entities is a major part of the state’s income. Apparently, discussions between lawyers for the plaintiff companies and the Attorney General’s office have reached the stage where the Attorney General may think that the state’s position is not defensible. There is some discussion of what the state might pay back to business taxpayers seeking to recover overpayment of franchise taxes. The amount of such potential overpayments may exceed $1 billion. This is enough to put a major kink in the coming year’s budget.

The deadline for filing bills this year is around February 1 but could be pushed back because of the closure during the extreme winter weather. Only a few hundred bills have been introduced to date. The next three weeks will be heavily dedicated to reading these bills and searching formatters of concern.

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