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No Competitive Bids for $34K in Van Buren Co.: State Audit

Van Buren County spent more than $34,000 in spending on food and custodial supplies for the county jail and police cameras for which the county failed to solicit competitive bids, state auditors have found.

State law requires competitive bids for purchases over $2,500, auditors wrote in their report, so that taxpayers get the best deal for the money. The review covered fiscal year 2013.

“The failure to solicit competitive bids could result in the department paying more than the most competitive price,” auditors wrote.

Auditors also cited the lack of a paper trail for $3,000 in spending on undercover drug operations in the sheriff’s department and said it had shared its findings with the district attorney.

The county said in its response to the auditors’ findings that it has procedures to make spending of the drug fund money more accountable.

Last year, auditors found similar oversight problems with the drug control money: financial reports that failed to include $7,370, a lack of documentation of cash handled by undercover officers, and missing signatures on paperwork tracking payments to informants. The paperwork should be signed by the informant, the officer making the payment, and a second officer as a witness to the payment, according to auditors in that 2012 review. Van Buren County’s forms lacked signatures from the informants or a second officer as witness.

In a review of Clay County’s finances, auditors said the county commission had approved spending $23,000 for public works beyond estimated funding.

The county also lacks a formal purchase order system, auditors found.

County officials said financial difficulties prevent them from setting up a purchase order system, and that they are making their current purchasing process work “to the best of our ability.”

Casada Looks Forward to Quizzing Textbook Commission

Rep. Glen Casada says he has a lot of questions for the State Textbook Commission due to what he calls “biased” material in the social studies books currently being used by Tennessee schoolchildren.

The Joint Subcommittee of Government Operations is scheduled to meet Wednesday with and review the governor-appointed panel and decide whether it should continue to exist, or whether reforms of some sort are warranted. Casada, the House GOP caucus chairman, said the discussion should prove interesting.

“The chairman of the committee, Sen. Mike Bell, is going to allow parents from across the state to give testimony as to the bias they see in their textbooks in their home counties,” said Casada. Bell is a Republican from Riceville.

Casada, who serves with Bell on the committee, said he doesn’t at this point have any preconceived ideas about what should happen after the meeting. He said he’s “just curious as to what the Textbook Commission is going to say,” that he’s hoping for answers to “allegations” that some textbooks public schools are using in Tennessee are ideologically prejudiced against capitalism and Western Culture.

Casada said he has reviewed two social studies textbooks and both “put in bad light the free-market system.”

“There are dozens, and I mean literally dozens, of examples of bias,” he said. “For example, there’s a question that’s just stated as a fact that capitalism is one of the causes of poverty. Well, that’s insane. Capitalism is what gets us out of poverty. It’s socialism that puts us in poverty. Yet no where in this textbook is that example given.”

Additionally, Casada takes issue with the books’ depiction of “foreign despots,” such as Mao Tse Tung. Casada said the communist dictator “is uplifted as a man who brought education and health care to his people in China.”

“But nowhere in that page when they talk about the Cultural Revolution do they mention the millions of people he killed,” said Casada.

Tennessee law requires representatives from most state agencies to appear before the Legislature periodically to justify their work and why the agency or commission is still needed. Casada said he finds selection of the textbook commission unusual because, unlike with other boards and commissions, there’s no involvement of the Legislature.

DA, Sheriff Criticize Animal-Cruelty Reporting Measure

While Gov. Bill Haslam weighs his options regarding legislation sitting on his desk that opponents have dubbed the “Ag Gag” bill, the chorus of condemnation continues to grow.

Earlier this week two prominent Tennessee crime-fighters told TNReport they have concerns about the bill from a policing standpoint. The state’s longest serving district attorney as well as the president of the Tennessee Sheriff’s Association are saying the legislation is flawed to such degree that enforcement and prosecutions would be problematic if it becomes law.

The bill, sponsored in the state House by Andy Holt, R-Dresden, and in the Senate by Somerville Republican Dolores Gresham, requires anyone “who intentionally” films or photographs animal abuse “for the purpose of documenting the offense” to hand the material over to law enforcement within 48 hours.

It passed handily in the Senate, but by only one vote in the House of Representatives. Both chambers are dominated by the GOP. The governor is also a Republican.

District Attorney General Tommy Thompson, Jr. of the 15th Judicial District called the legislation “an obstruction to justice.”

“This bill is more an industry protection act. It’s a way to prevent people from finding out, because you have to get the trust of the people who are doing it,” said Thompson, a Democrat who for 36 years has served as chief criminal prosecutor for Wilson, Trousdale, Smith, Macon and Jackson counties.

“The people who are doing it are smarter with the law than a lot of the people who are enforcing it,” he added. “They aren’t going to do anything where you can see them until you gain their trust.”

However, a spokeswoman for the Tennessee Farm Bureau, which supports the legislation, told TNReport the measure has been unfairly characterized by media and opponents.

Noting that the bill was initially titled the “Livestock Protection Act” by one of the sponsors, Farm Bureau Executive Vice President Rhedona Rose said the purpose and intent of it is to protect the animals and stop the abuse of the animals. Calling it “Ag Gag” misrepresents what the bill in fact does, she said, which is require people who knowingly witness and record animal abuse to promptly report it to law enforcement officials who can then take steps to stop it immediately.

Rose also pointed to Tennessee’s relatively high score on an Animal Legal Defense Fund assessment of all 50 states’ laws relating to animal treatment as evidence of “how strong we are in dealing with animal abusers.”

“I think the farm community is very frustrated that because of a few bad actors, the entire agriculture farm community is getting a black eye,” Rose said. “They are ready to deal with those who are in fact causing that image and feel like that folks that have proof of that image and knowingly and intentionally go out and capture the proof of that image, they could get it to law enforcement to be dealt with quickly.”

Nevertheless, vocal opponents of the measure, including Republicans like Senate Majority Leader Mark Norris and House Consumer and Human Resources Subcommittee Chairwoman Susan Lynn, have said the bill seems more like a thinly veiled effort to stifle the activities of animal rights activists — that the legislation would in effect “gag” them in the interest of protecting ag and livestock producers.

Thompson, the district attorney, said putting together enough evidence for a prosecution to occur would in fact require more than just one recorded instance of animal abuse. He compared the undercover operations of documenting animal abuse to undercover drug operations.

“If the drug task force had to report their buys within two days, first of all, you would never have enough informants who could get in like that,” he said. “Secondly, if you have to report within two days, the person comes to court and says, ‘That was just the first time I ever did it. I made a mistake. I’m sorry,’ and he may be the biggest drug dealer in town.”

Thompson, who also raises cattle, said the drug task force always tries to do three or four buys from a dealer so they can’t claim it was a casual sale when they come to court.

“You can’t just stand there and take pictures in two days,” said Thompson. “You have to work awhile and let them trust you before you get in position to where the real abuse is going on.”

Thompson added that the bill “doesn’t really have any teeth to it, because anything that is a Class C misdemeanor by fine only gets moved to the bottom of the priority list for law enforcement. There’s so much more important stuff going on.”

Putnam County Sheriff David K. Andrews pretty much agreed with Thompson that the bill has no real teeth and that capturing a one-time incident is basically futile.

“There’s no jail time to it. If a judge issues a pick-up on someone, law enforcement is going to make an effort to pick that person up. But then when you pick him up, what do you do with him?” said Andrews, who last summer was elected to lead the Tennessee Sheriff’s Association.

“If he can’t pay it and won’t pay it, what are you going to do? You can’t put him in jail.”

While the Sheriff’s Association has not taken an official active role in the legislation, Andrews said he used to work undercover and that if you buy drugs from someone just one time, “you might as well not go to court.

“They’re going to say, ‘Well, judge, I really just done this the one time. I was coerced or this or that.’ It sort of takes the teeth out of your prosecution,” Andrews said.

The governor is awaiting an opinion on the bill’s constitutionality from the state attorney general before deciding whether to signs it, veto it or let it become law without is endorsement.

Amelia Morrison Hipps may be reached at amhipps@downhomepolitics.com, on Twitter @DwnHomePolitics or at 615-442-8667.

Cigarette Markup Would Nearly Double Under Lawmakers’ Proposal

Tennesseans would pay more for their smokes under a bill working its way through the General Assembly.

The measure, SB788/HB644, would increase the amount Tennessee retailers are required to mark up cigarettes from 8 percent to 15 percent of cost. It would be the first change to the requirement since 1950. 

“The Legislature in the past has passed the cigarette minimum markup law to prohibit retailers from using cigarettes as a loss leader and to discourage consumption of cigarettes, including, of course, underage usage of cigarettes,” state Rep. Matt Hill, R-Jonesborough, said in a House Agriculture Subcommittee meeting Feb. 27.

“Unfortunately, we’ve had some large, out-of-state cigarette manufacturers who have come in and used the minimum price laws by contractually requiring our convenience stores, primarily, and other retailers to sell tobacco products at or near the state minimum.” 

A “loss leader” is a good sold at or below its market cost in order to stimulate the sales of other, more profitable goods.

The bill would provide relief from a situation, created in part by the state, that crimps revenue for tobacco retailers, said Senate sponsor Rusty Crowe, R-Johnson City.

According to Sen. Jack Johnson, R-Franklin, pricing pressure comes from the top down with “quasi-monopolistic” manufacturers compelling retailers into pricing contracts, which push prices down toward the state minimum. Johnson chairs the Senate Commerce and Labor Committee, which passed the bill unanimously Wednesday.

Two companies in the state own 80 percent to 90 percent of the state’s market share of tobacco, according to Emily LeRoy, the executive director of the Tennessee Fuel & Convenience Store Association. Their outsize role contributes to the pressure on operators to either sell cigarettes nearly at a loss or simply not carry those products, LeRoy said.

In the Senate hearing, both Bo Watson, R-Hixson, and Reginald Tate, D-Memphis, questioned why the state was responsible for setting a mark-up rate at all. 

Answer: Protecting children.

Setting the price helps prevent “age-sensitive” products, such as tobacco, alcohol and lottery tickets, from being “among the so-called loss-leader products, Johnson said in the hearing. He added that it is also in the state’s interest to deter smoking.

A 2011 Gallup ranking of smoker-percentages by state put Tennessee at No. 8 in the country. Kentucky was No. 1. Alabama No. 9.

“I don’t know, but I see the poorest people are mostly the ones that smoke, and they’re going to smoke no matter what, and it takes that much out of their family’s budget,” said state Sen. Charlotte Burks, D-Monterey. She ended up voting for the measure.

The bill passed the House agriculture committee on a voice vote, with Rep. Billy Spivey, R-Lewisburg, requesting to be recorded as voting no.

The bill’s next stop is the Finance Committee in both chambers. According to Crowe, the measure will boost local revenue but cause a decrease in state revenue.

State Audit Finds $70M-Plus in Unwarranted Unemployment Payouts

Because of errors and fraud, the state of Tennessee issued $73.4 million in overpayments to people drawing unemployment benefits over the past six years, according to a new audit report.

The problems threaten the integrity of the program, the comptroller’s office said in its report, released this week.

Auditors found poor systems for detecting fraud, backlogs in claims handling, and “automated approval of claims” without verifying that employees qualified. They also faulted workers at the Department of Labor and Workforce Development for not taking simple steps, like verifying the Social Security numbers of people drawing unemployment.

Auditors found the department had paid out $135,000 to people who were not eligible because they were gainfully employed by the state – or in some cases dead.

“The Commissioner should take immediate action to implement a strong system of internal controls over the claimant eligibility process for the (unemployment insurance) program. This control system should be designed to prevent and/or detect errors and fraud and mitigate the risk that (unemployment) benefits will be paid to ineligible claimants.”

The commissioner in question, Department of Labor and Workforce Development chief Karla Davis, resigned earlier this month, citing family reasons. The Haslam administration announced that Burns Phillips, a Finance and Administration official, would serve as acting commissioner.

Lt. Gov. Ron Ramsey, R-Blountville, said Thursday that he’d not yet seen the report but was not surprised auditors had uncovered problems at the labor department.

Ramsey has successfully pushed to tighten requirements on unemployment-insurance beneficiaries, and in the process has developed a bad impression of the labor department.

“To say that that department has been unresponsive and hard to work with would be an understatement,” Ramsey said. “You send email after email after email and get no response. We ask for statistic after statistic and get no response.”

Last year the Legislature toughened requirements on beneficiaries, like requiring them to keep a log of their efforts to find work. Some 400 people were kicked off the program in a random check of more than 6,100 claimants during the first seven weeks the law was in place, the Chattanooga Times Free Press reported in December.

Read the audit here.

Lawmaker Per-Diem Limitation Passes Senate, Hotel Allowance Changed

The per diem bill affecting Tennessee legislators living within a 50-mile radius of the Capitol passed the Senate 28-2, but only after being amended, which will send it back to the House for reconciliation.

The Senate on Thursday substituted its own SB107 for HB80, which passed 72-15 earlier this month, but added an amendment from the State and Local Government Committee that changes the reimbursement for lodging on the occasion area lawmakers stay in Nashville instead of returning home.

The amendment uses the lodging allowance granted to federal employees instead of the actual costs of a hotel room, as in the House version, said Sen. Ken Yager, chair of the Senate State and Local Government Committee. That would keep their lodging payment at $107 a day, contingent on individual approval from the speaker of their respective chamber.

According to the bill, lawmakers whose primary residence is within a 50-mile radius of the Capitol would no longer automatically receive $107 a day for a hotel room, but instead would receive mileage reimbursement at 46 cents a mile. This would apply to each legislative day in Nashville or any day, except Friday, that the lawmaker participates in any other activity in Nashville and would be limited to one round trip per day.

Legislators would continue to receive $66 a day for meals and incidentals.

The House and Senate versions must now be reconciled before the legislation can go to Gov. Bill Haslam for his signature.

Neither of the two Republican senators who voted against the bill – Dolores Gresham of Somerville and Todd Gardenhire of Chattanooga – live within the 50-mile radius.

According to the bill’s fiscal note, HB80 would save the state $253,616, based on figures from in 2012, when 33 legislators lived within 50 miles of the Capitol.

If the bill becomes law, the change will not impact sitting legislators, just those elected in 2014 forward.

Amelia Morrison Hipps may be reached at amhipps@capitolnewstn.com, on Twitter @CapitolNews_TN or at 615-442-8667.

GOP-Backed ‘Wage Protection Act’ Heads to Haslam’s Desk

Unlike the testy exchanges on the House floor, the Tennessee Wage Protection Act’s passage in the upper chamber, 25-6-1, was met with only an explanation and a lone voice of opposition.

Brian KelseyBrian Kelsey

Sen. Brian Kelsey, sponsor of SB35, moved Thursday to conform and substitute his bill with HB501, which passed the House 66-27-1 earlier this month.

“House Bill 501 will ensure that commerce can work cleanly and efficiently in Tennessee by making sure that our wage and benefit restrictions are made at the state level,” the Republican from Germantown said.

Sen. Jim Kyle, D-Memphis, rose in opposition: “This is another one of our preemption bills. I would just point out to the Senate that if you think a community is smart enough to decide whether they should have wine in grocery stores, then I think you ought to be able to think that they’re smart enough on how to set their wage and contracts.”

Every Democrat in the Senate voted against the bill while every Republican, except one, voted in favor of it. Republican Rep. Steven Dickerson of Nashville cast his vote as present, not voting.

Passage by the Senate moves the legislation one step closer to ending a four-year battle to prohibit local governments from setting wages, family leave and insurance benefits that private businesses must offer employees. It also blocks local regulations that address wage theft.

Having passed both chambers, the legislation now goes to Gov. Bill Haslam’s desk, where there is no certainty that he will sign it.

“I’m not a fan of the living wage,” Haslam has said. But local “governments should be able to decide for themselves if they want to do that.”

The House sponsor of the legislation, GOP Caucus Chairman Glen Casada of Franklin, told TNReport earlier this month he’s confident the governor will sign the bill.

If the bill becomes law it’ll nullify bills passed in Nashville and Shelby County that require businesses that contract with those governments to offer a certain level of wages and benefits to employees.

Amelia Morrison Hipps may be reached at amhipps@capitolnewstn.com, on Twitter @CapitolNews_TN or at 615-442-8667. 

Senate Approves ‘Repealer’ to Root Out Bad Laws, Regs

Legislation to create a state Office of the Repealer passed the Senate 30-1-1 Thursday, while the House version still has a couple of committee hurdles to clear next week.

The Repealer’s job would be to go through Tennessee code and make recommendations to the Legislature on laws, rules and regulations that need to be repealed or modified because they are no longer relevant, overly burdensome or outdated.

Democratic Sen. Jim Kyle of Memphis cast the only no vote and was the only one to speak out against the legislation. Fellow Democrat, Sen. Douglas Henry of Nashville, abstained.

“Simply to explain my vote, it is somewhat ironic that we’re creating an office to try to find duplicitous government agencies and rules when its creation duplicates the work of the Government Operations Committee,” Kyle said.

“To create another branch of government to do exactly what we’re already doing is doubling up and spending money that doesn’t need to be spent,” he continued.

According to Sen. Jack Johnson, sponsor of SB595, there is no fiscal note attached to the legislation, as the position will fill an existing vacant position within the Secretary of State’s office.

Responding to Kyle’s argument, the Franklin Republican said,“There is no single individual in all of state government whose sole responsibility is to try and shrink the green books.” Johnson was referring to the bound issues of the Tennessee Code Annotated.

Johnson said he thinks it “entirely reasonable that we dedicate a single position to meet with our business owners, to meet with citizens across the state, who have to interact with state government day in and day out, and identify things that we don’t need anymore.”

Answering to the Secretary of State, the Repealer would be required to set up an online system to receive recommendations from the public, which he or she would be required to take into consideration. 

The bill sets up the post for four years, “at which time such position will cease to exist.”

Sen. Mike Bell, a Republican from Riceville who chairs the Senate Government Operations Committee, offered a single amendment that passed on a voice vote. The amendment adds both chambers’ government operations committees to the list of those receiving recommendations from the Repealer, as well as quarterly updates of his or her actions.

HB 500 is on the House Finance, Ways & Means Subcommittee’s calendar for Wed., April 3.

Amelia Morrison Hipps may be reached at amhipps@capitolnewstn.com, on Twitter @CapitolNews_TN or at 615-442-8667.

Haslam Rejects Federal Dollars This Year, Offers ‘Third Option’ on Medicaid

Gov. Bill Haslam announced the state will not expand TennCare this year as called for by the federal health care law. The governor instead outlined what he called “a third option” for helping Tennesseans get coverage.

Haslam said neither a flat-out refusal to enlarge TennCare based on problems with the law nor an open-armed embrace – “expanding a broken system” – was the right path for Tennessee.

Under Haslam’s proposal, which he says the federal government will not agree to, payments to health care providers would be based on quality of care rather than just volume of services provided, and patients would have co-pays “so the user has some skin in the game when it comes to health care incentives.”

The state could also backtrack if the expansion of TennCare, the state’s version of Medicaid, wasn’t working.

“Our plan would have a definitive circuit-breaker or sunset that could only be renewed with the General Assembly’s approval based on when the amount of the federal funding decreases,” Haslam said Wednesday, speaking before the General Assembly.

Haslam also offered a critique of the law (Patient Protection and Affordable Care Act of 2010).

“To me, the scandal of the Affordable Care Act is that it doesn’t significantly address cost or alignment reform,” Haslam said. “And that’s what Washington does – it looks at a complex problem, realizes that some people aren’t going to like the changes, and as a solution, decides to spend more money.”

Read the full speech here.

 

Property Disclosure Requirement for Lawmakers Hits Snag

An ethics bill requiring Tennessee policymakers to disclose all real property they own other than their primary home has hit a snag this year, and the bill sponsor said she doesn’t expect it to pass.

Rep. Susan Lynn said she would still like to get the bill back in committee this year as a thermometer test.

Susan Lynn

“I perceive that a lot of members think that it’s a good idea, but I perceive also that a lot of members strongly oppose it,” the Mt. Juliet Republican said. “So it may need a little bit more time to become more apparent to the members as to why it’s important.”

Originally assigned to the House Local Government Committee, HB1063 was moved back to the speaker’s desk after Lynn failed to appear on two separate occasions to present her bill. However, Chairman Matthew Hill made a procedural error by invoking Rule 13, meant to kick in after the sponsor fails to appear for a third time.

To get the bill back on track, the House clerk’s office told Lynn she will have to see Rep. Joe Carr, chairman of the Local Government subcommittee.

“I need to call the clerk’s office to find out why I need to talk to the subcommittee chair, “ Lynn told TNReport.com. “I think it was a mistake we’re going to try and get worked out.”

HB 1063 would require all elected and certain appointed public officials, such as those on local and regional planning commissions or state boards, to disclose any real property owned by them, their spouses or any minor children living at home.

Earlier in March, Lynn told TNReport.com that she would entertain an amendment excepting state legislators from the new disclosure requirement if that’s the only way to make it a requirement for local government officials.

“I think it’s very important for local government to make this disclosure, especially the planning commission members,” she said. “I think property holdings that one has, especially holdings that they hold for some future opportunity, should be disclosed, [because] maybe they’re in a position to vote on things that will make the opportunity better.”

Kent Flanagan, executive director of the Tennessee Coalition for Open Government, agrees that the bill “offers a lot for citizens who don’t have the advantage of public office.”

“I think it’s critical for this legislation, or anything similar to it, to be enacted, simply to level the playing field because of economics,” said Flanagan, the former state bureau chief for The Associated Press.

During public discussion of a proposed development, if “everyone knows who owns property and where that property is located, then everyone knows where everyone stands. When people own property and don’t disclose it, I think that’s a clear conflict of interest.”

Still, the former newspaper editor doesn’t hold out high hopes for the bill’s passage.

“I think in terms of this legislation, the chances of it passing are probably slim with the legislator exemption,” Flanagan said. “If they’re not exempt, I don’t think it has a chance of passing.”

Amelia Morrison Hipps may be reached at amhipps@capitolnewstn.com, on Twitter @CapitolNews_TN or at 615-442-8667.