Tennessee Wine & Spirits Retailers Association

Hoping to break a “logjam” in negotiations with state Senate Republicans, Gov. Phil Bredesen proposed this week phasing in his 40-cent per pack cigarette tax increase over a two-year period. Bredesen, who has faced stringent opposition this year from many Republicans in the state Senate over his proposed tripling of the state’s per pack cigarette tax, said at a mid-afternoon press conference Wednesday that he is now proposing to phase in that 40-cent tax increase over two years — 25 cents this year and 15 cents next year. Bredesen said his new proposal is “reasonable” in trying to break the “logjam” with the Republicans in the state Senate, who are in operational control of the chamber. Much of the $219 million from the tax hike would fund the first part of a proposed $476 million overhaul of the state's Basic Education Program funding formula. "We don't need it all this year," Gov. Bredesen said. "We probably can't use it all this year." He said unanticipated state revenues of about $300 million in the next fiscal year should not be used as an excuse to "reduce a perfectly reasonable cigarette tax. Let's use it to prefund some stuff we know we've got coming down the road."

Also at the state capitol this week, the House Republican leader, along with other Republicans, unveiled a proposed budget that would not require a cigarette tax increase at all. House GOP Leader Jason Mumpower says his caucus is overwhelmingly in favor of a budget that doesn’t raise taxes. Mumpower says the proposal is proof their party is in touch with the people of Tennessee. House Republicans say their proposed budget increases the amount allocated to education over the previous year, although it would not fully fund the proposed new formula for the Basic Education Program. It would also lower the tax on food, either by creating an annual tax holiday or lowering the state food tax rate by one cent.

Being inspired by Tennessee's flush financial times, some Democratic state lawmakers are working to give themselves a collective $20 million to spend on pet projects in their own districts. Each House member would get $100,000 and each senator $300,000. It would mark the return of a type of legislative allowance dead since the state's late-1990s budget crisis and would improve scads of Little League fields, museums, civic centers and the like, lawmakers argue. Critics of the plan say it looks like the legislature is trying to “buy votes”.

The “AT&T” bill will be up again in both houses in what will hopefully be the final meeting of both Commerce Committees. The House will also have a joint committee meeting of the full Commerce and State and Local Government committee to hear the bill. The fate of the bill is still undecided, but movement of the bill out of any committee pushes momentum in AT&T’s favor.

The Administration is hoping to have its supplemental appropriations amendment introduced this next week. Many of the House and Senate committees will close down as well, which leaves only the budget to be considered. The Senate Finance Committee will hear the Appropriations bill on its calendar Tuesday.

Adjournment is still undecided. It was hopeful that the session would adjourn by the end of May, but there is talk now of going into the first week or so of June.

Tennessee Legislation Service (c) 2007 M. Lee Smith Publishers Thursday, May 17, 2007
ALCOHOLIC BEVERAGES
SB 0634* HB 1750 (Full Text)	Allows sale of alcohol on Sundays that are certain holidays. Allows retailers to sell alcoholic beverages on Sundays between the hours of noon and eleven p.m. and on Labor Day, the Fourth of July, and New Year's Day. (S: Marrero; H: Jones U.) Senate Status: Failed in Senate State & Local Government 03/13/2007 for lack of a second. House Status: Referred to House Local Government Subcommittee.
SB 0680* HB 0787 (Full Text)	Cannot sell beer or alcohol near drug treatment facility. Authorizes counties and cities to adopt ordinance or resolution that prohibits sale of beer and alcoholic beverages within 2,000 feet of a drug or alcohol treatment facility. (S: Bunch; H: Campfield) Senate Status: Referred to Senate State & Local Government. House Status: Referred to House Local Government Subcommittee.
SB 0795* HB 1324 (Full Text)	ID tags on beer kegs. Requires retailers to place identification tag on kegs containing beer that identifies the seller. Requires purchaser to pay a minimum deposit of $75 and to sign a registration form. Directs department of revenue to prescribe and supply forms for keg identification so that buyers and sellers can be held accountable for unlawful purchases. Violation is a Class C misdemeanor. (S: Burchett; H: Briley) Senate Status: Referred to Senate State & Local Government. House Status: Taken off notice in House Local Government Subcommittee 04/18/2007.
SB 1221* HB 1194 (Full Text)	Special occasion license for certain events. Allows charitable, nonprofit, or political organization to obtain special occasion license for event in political subdivision that has approved sale of alcoholic beverages for consumption on the premises. Clarifies current law that specifies approval only of the sale of alcoholic beverages at retail on the premises. (S: Cooper J.; H: Harmon) House amendment 1 rewrites the bill to authorize the Swiss Colony in Gruetli-Lager to give samples of homemade wine at its annual festival. Senate Status: Senate passed 05/07/2007. House Status: House 04/09/2007 passed with amendment 1. Other Status: Sent to the speakers for signatures 05/07/2007.
SB 1223* HB 1529 (Full Text)	Special occasion license for charitable organization. Permits alcoholic beverage commission to issue a special occasion license to certain 501(c)(3) organizations for selling wine in closed containers for consumption on or off premises. Allows any resident of Tennessee to donate wine to such organizations. (S: Cooper J.; H: Odom) Senate amendment 1, House State & Local Government Committee amendment 1 requires organization to have $1,000,000 annual budget. Also requires donated bottles of wine to be properly registered with the department of revenue. Senate Status: Senate 05/07/2007 passed with amendment 1. House Status: Set for House Calendar & Rules Committee 05/22/2007.
SB 1224* HB 1755 (Full Text)	Retail license holder may offer free samples of wine. Permits entities holding a retail license or a winery license to provide free samples of wine to consumers on the premises under certain circumstances. Subjects those who violate specified requirements while providing samples to suspension of license or a fine of up to $3,000. (S: Cooper J.; H: Jones U.) House Co-Sponsor: Tindell Senate Status: Taken off notice in Senate State & Local Government 05/01/2007. House Status: Taken off notice in House Local Government Subcommittee 05/09/2007.
SB 1807* HB 2120 (Full Text)	Any wine made from 50% TN fruit - unlimited sale. Allows any winery selling wine made from 50% of any Tennessee fruit to sell it on premises without restriction on number of gallons sold where grapes were previously the only fruit under this provision. (S: Ketron; H: Litz) Senate amendment 1 allows any winery selling wine made from 50% of any Tennessee agricultural product to sell it on premises without restriction on number of gallons sold. The bill is restricted to Tennessee fruit. Senate Status: Senate 05/07/2007 passed with amendment 1. House Status: Set for House State & Local Government Committee 05/22/2007.
SB 1821* HB 1658 (Full Text)	Registration period for beer manufacturers, distributors. Increases time period from 20 to 25 days for manufacturer or distributor of beer to register at the office of the commissioner of revenue. Broadly captioned. (S: Bunch; H: Mumpower) Senate Status: Referred to Senate State & Local Government. House Status: Caption bill held on House clerk's desk.
SB 1879 HB 1119 (Full Text)	Beer distributors' registration. Increases time period during which beer distributors must register with commissioner of revenue from 20 to 25 days. (S: Jackson; H: Buck) Senate Status: Referred to Senate State & Local Government. House Status: Caption bill held on House clerk's desk.
SB 1977* HB 1850 (Full Text)	Wine direct shipper license. Creates wine direct shipper license to be issued through the alcoholic beverage commission that would allow an in-state or out-of-state entity to ship wine directly to consumers age 21 years or older in this state for personal use. (S: Stanley; H: Todd) Senate Status: Senate State & Local Government deferred to 2008. House Status: House Local Government Subcommittee deferred to 2008.
SB 2072 HB 1899* (Full Text)	Sales of wine by certain retail food stores. Prescribes the creation of an additional class of licenses allowing the sale of wine at retail food stores. (S: Marrero; H: Kernell) Senate Status: Failed in Senate State & Local Government 03/13/2007 for lack of a motion. House Status: Referred to House Local Government Subcommittee.
SB 2289 HB 1825* (Full Text)	Wholesaler's license expansion. Allows wholesaler's licenses to be granted in any municipality that has approved the sale of alcoholic beverages rather than only those with a minimum population of 100,000. (S: Burchett; H: Lundberg) Senate Status: Referred to Senate State & Local Government. House Status: House Local Government Subcommittee deferred to 04/18/2007.
COMMERCIAL LAW
SB 0850* HB 1019 (Full Text)	Processing fees charged for use of debit or credit card. Prohibits card issuer from charging a processing fee to retail merchants for the use of credit or debit cards that is more than seventy-five hundredths of one percent (0.75%) per transaction for all processing fees involving the use of a credit or debit card. (S: Kilby; H: Ferguson) Senate Status: Senate Commerce, Labor & Agriculture deferred to 05/01/2007. House Status: Taken off notice in House Utilities, Banking & Small Business Subcommittee 04/10/2007.
TAXES BUSINESS
SB 1394* HB 1193 (Full Text)	Increased tax on cigarettes and wine. Increases tax on spirits from $4.40 per gallon to $4.50 per gallon. Also increases tax on wine from $1.21 per gallon to $1.31 per gallon. Increases tax on cigarettes from 10 mills per cigarette to 1.5 cents per cigarette. (S: Crutchfield; H: Harmon) Senate Status: Taken off notice in Senate Finance Tax Subcommittee 03/20/2007. House Status: Referred to House Finance Budget Subcommittee.
TAXES SALES
SB 1802* HB 1296 (Full Text)	Exemptions for certain licensed wholesalers and retailers. Exempts certain sales of tangible personal property and services made by licensed wholesalers and retailers from a central warehouse or distribution point other than its principal place of business from sales and use tax. (S: Ketron; H: Sargent) Senate Status: Referred to Senate Finance, Ways & Means. House Status: Referred to House Finance Budget Subcommittee.
SB 1974* HB 2158 (Full Text)	Alcoholic beverages sold for consumption on premises. Specifies that the burden of proving that a taxpayer's records are inaccurate for the purpose of projecting taxpayer sales of alcoholic beverages for on-premises consumption from the taxpayer's wholesale purchases shall be on the department of revenue, (S: Haynes; H: Briley) Senate Status: Senate State & Local Government 04/17/2007 recommended. Sent to Senate Finance, Ways & Means. House Status: Set for House Finance, Ways & Means Budget Subcommittee 05/23/2007.

Bredesen ready to negotiate on cigarette tax hike

Tennessee Legislation Service (c) 2007 M. Lee Smith Publishers Thursday, May 17, 2007

ALCOHOLIC BEVERAGES

COMMERCIAL LAW

TAXES BUSINESS

TAXES SALES

Tennessee Legislation Service (c) 2007 M. Lee Smith Publishers
Thursday, May 17, 2007