NASHVILLE - Tennessee homeowners facing bankruptcy will have better financial protection from creditors under a new state law taking effect New Year's Day that raises the state's homestead exemption for the first time in nearly a half-century.
The measure is one of nearly two dozen bills that become law on Jan. 1. While most state laws take effect upon passage or on July 1, a smattering of measures' effective dates are tied to the start of the new year.
Other laws going into effect Saturday include two criminal justice bills pushed by Gov. Bill Lee last year. One offers community-based alternatives to incarceration for low-level or nonviolent felons, while the other helps inmates with education and life skills to improve their chances of success in the outside world.
Yet another new law taking effect, sponsored by Rep. Esther Helton, R-East Ridge, a registered nurse, and Sen. Shane Reeves, R-Murfreesboro, a businessman and pharmacist, deals with pharmacy benefits managers.
Among other things, Public Chapter 569 seeks to prevent pharmacy benefits managers, which are companies that manage prescription drug benefits on behalf of health insurers, large employers and other payers, from reimbursing pharmacies below their drug-acquisition costs. It also seeks to deter possible conflicts of interest by prohibiting patient-steering practices.
Helton originally brought the measure in 2020 to block pharmacy benefits managers from reaping financial benefits from a federal drug-pricing discount program intended to help nonprofit hospitals and health centers serving low-income communities.
The new law increasing protections for homeowners, Public Chapter 301, is the first time Tennessee has boosted its homestead exemption since 1977, when a state constitutional convention put it on the ballot and voters readily approved it.
Tennessee had the lowest homestead exemption of the states that do not allow the use of the federal homestead exemption, according to a 2016 report issued by the Tennessee Advisory Commission on Intergovernmental Relations. The report found decades of inflation had eroded the real value of the exemption which has been $5,000 for individuals and $7,500 for joint owners. Under the new law, that rises to $35,000 for an individual owning the property and to $52,500 for a couple or others jointly owning property and claiming jointly.
"If you've got to file bankruptcy or have certain creditor issues, that's a mechanism basically to protect the equity in your home," Rep. Johnny Garrett, R-Goodlettsville, an attorney and the bill's primary House sponsor, told the Times Free Press in a telephone interview on Wednesday. Bill cosponsors included House Finance Committee Chair Patsy Hazlewood, R-Signal Mountain.
"It took into account what the average home price was and what the average equity in someone's house was at that time," Garrett said. "So it needed to be increased because it hasn't been touched in so long." It affects "any and everybody who would have to file a Chapter 13 or Chapter 7" bankruptcy case, Garrett said. "Even in a judgment sense, if you get sued and you have a judgment against you and a debt collector is collecting on that judgment, you can use the homestead exemption where they can't collect against your home. So it's not just in the bankruptcy setting."
Other new laws that go into effect Jan. 1 include:
Re-entry Success Act
Pressed by Gov. Bill Lee, Public Chapter 410 provides additional funding to Tennessee counties that initiate evidence-based programming to better prepare inmates housed in county jails. The new law is intended as a multi-pronged approach to help improve public safety and facilitate positive outcomes for those leaving incarceration. It establishes mandatory supervision requiring all state inmates receive a minimum of one year supervised reentry integration before leaving custody.
The legislation establishes a presumption of parole release at a person's release eligibility date or upon a subsequent parole hearing, unless good cause is shown. Eligible inmates are those who are serving times for a nonviolent felony offense or a sentence for a Class E or Class D felony offense. The inmate must have no disciplinary record, be designated low risk for community supervision and must have completed or be enrolled in recommended programming to help ensure successful reentry into society. The Evidence-Based Jail Programming project provides $5 million for programs demonstrated to reduce recidivism rates and increase local collaboration to improve outcomes for convicted felons after release.
Joining Lee at his signing ceremony in Nashville last May was Chattanooga Councilwoman Demetrus Coonrod, who years earlier overcame a federal conviction for conspiracy to commit armed robbery to become a businesswoman and eventually a politician who is now a Chattanooga City Council member.
Inmate Recidivism
The new law, Public Chapter 390, seeks to reduce recidivism among low-risk inmates in local jails by providing trade-related education. It allows state community colleges and Tennessee's Colleges of Applied Technology (TCATs) to partner with local governments to provide educational and workforce development programs.
Crime victims/restitution
Public Chapter 413 is an effort to support victims' rights by outlining an order of priority for funds paid into courts for any criminal case and is intended to ensure a victim of a crime is paid restitution first. Another provision extends the amount of time a victim has to apply for the Criminal Injuries Compensation Fund from one to two years. The fund reimburses victims of violent crimes and their dependents who have suffered out-of-pocket expenses due to physical injuries, loss of income or death.
Pharmacy benefits managers
The Patient Access Choice and Transparency Act, Public Chapter 569, prioritizes patient-centered care by making changes to how Pharmacy Benefit Managers, which manage prescription drug benefits for insurers, operate in Tennessee. It's intended to ensure patients can use the pharmacies they choose instead of being required by insurers to use specialty pharmacies that bill sponsor Helton and others say don't always meet patients' needs. Proponents say it will help patients with chronic, complex or rare diseases while also protecting rural hospitals that use 340B programs. Helton brought the measure in response to problems encountered by Cempa Community Care in Chattanooga. In 2020, a Senate panel shipped it off to summer study over the objections of Finance Committee Chairman Bo Watson, R-Hixson, effectively killing the effort for the year.
Teacher Discipline Act
Public Chapter 77 establishes a six-step process allowing teachers to seek to remove a student who causes repeated disruptions. Once the disruptive student is disciplined, principals can use their discretion to send them back into the classroom or permanently remove the child. The measure also allows teachers to file an appeal with a school's director or local superintendent if they disagree with that decision.
College athlete compensation
Public Chapter 400 allows student athletes to profit from their name, image and likeness without jeopardizing their college eligibility. The measure passed in May. It's been rendered irrelevant to some extent, first after the U.S. Supreme Court's opening the legal door to the move in a June legal ruling. And then the NCAA, recognizing the game was over, approved students' ability to make money off their fame on June 30, one day before other states' laws went into effect July 1.
Convenient voting
Public Chapter 419 is aimed at increasing voter participation and allows voters to cast ballots on election day at any of a participating county's polling locations most convenient to their work, school or travel. The law is an expansion of a pilot project in Rutherford County that was later expanded to Monroe, Williamson and Wilson counties during the last elections. The new law makes the pilot programs permanent in Rutherford, Monroe, Williamson and Wilson counties. It also authorizes Weakley, Sullivan and Sumner counties to participate for federal, state and local elections held in 2022. Before a county can opt into the program, it must be approved by a supermajority of the county's election commission and must be funded by the local governing body.
Gaming/sports wagering
Public Chapter 593 removes the Sports Wagering Advisory Council from the control of the Tennessee Lottery Corporation, transfers the authority of rule promulgation and approval of promulgated rules solely to the council regarding online sports gambling.
Elder abuse
Public Chapter 84 requires petitions for appointment of a conservator to include results of searches for the proposed conservator in the Department of Health's registry of people who have abused, neglected or misappropriated the property of vulnerable people and the National Sex Offender Registry.
Wine sales
Public Chapter 331 allows consumers to have wine shipped to them. It creates a license for "wine fulfillment houses" with a $300 application fee, $300 annual renewal fee and a $50 annual fee for each additional location and keeps out-of-state vendors from violating Tennessee's existing state laws by not paying appropriate state taxes.
Precious Cargo Act
Public Chapter 55 seeks to help people who need assistance in expressing themselves or in exiting a vehicle when approached by law enforcement or first responders. It updates the Tennessee Vehicle Title and Registration System database in order for law enforcement to have the appropriate information when a check is run on the affected person's license plate. House sponsors include Rep. Dan Howell, R-Georgetown.
Dual enrollment grants
Public Chapter 536 is intended to help high school students earn college credits, increasing the number of dual enrollment courses paid for by the state from two to four. As enacted, it clarifies that the dual enrollment program will award the in-state tuition and mandatory fees cost up to a maximum amount for the first four courses taken and makes other related changes. The law would allow students to have a full-time semester completed once they graduate from high school and formally enter college.
Chiropractic services
Public Chapter 525 allows TennCare to cover chiropractic services.
Tennessee Election Integrity Act
Public Chapter 374 requires all absentee ballots to include an easily discernible watermark, requires absentee ballot counting boards of local county election commissions to reject ballots without a watermark.
Domestic abuse
In an effort to combat domestic violence, Public Chapter 117 requires applicants for a technician certificate of registration, master barber certificate of registration, barber instructor certificate of registration, cosmetologist license, manicuring license, cosmetology instructor license, aesthetician license or natural hair styling license to get one hour of online or in-person training by a nonprofit recognized by the Tennessee Coalition Against Domestic Violence. The course involves how to recognize signs of abuse, respond and refer a client to resources for victims.
County boundaries
Alters the boundary between Davidson and Wilson counties to detach certain parcels of real property now located in Davidson County and to attach them to Wilson County.
Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.