Business and Economy Tax and Budget Transparency and Elections

Amazon Announces Tennessee ‘Fulfillment Center’ 3.0

Upping the stakes and adding drama to the tax-collection dilemma in Tennessee, the company announced plans Thursday for a 500,000-square-foot distribution center in Lebanon.

The company said the facility will create hundreds of full-time jobs and that it plans to open the site this fall.

There was no immediate announcement on whether Amazon would have the same arrangement with the state on sales tax collections with the addition of the Lebanon site as the company currently enjoys with sites in Hamilton and Bradley counties.

Amazon does not have to collect taxes on sales in the state, which has been an ongoing issue in the Legislature. Some prominent GOP lawmakers favor requiring the company to collect the tax. Several states face a similar quandary in dealing with the online sales giant.

The trade-off, begun with the administration of former Gov. Phil Bredesen, has been the number of jobs Amazon brings to the state at a time Tennessee is desperate for employment.

Gov. Bill Haslam has publicly backed the arrangements of the previous administration with Amazon, and he has said he believes Congress ultimately will have to settle the tax issue for states. Haslam told reporters Thursday his administration is interested in “jobs, period” and that Amazon had been working on the Lebanon site “for some time.” Amazon released a formal announcement about the site Thursday afternoon.

When asked Thursday afternoon for comment about Amazon, Yvette Martinez, a spokeswoman for the governor, replied by e-mail, “Hundreds of jobs for Middle Tennessee is great news.”

Rep. Linda Elam, R-Mt. Juliet, said the deal was a “wonderful” coup for Lebanon, but she said she did not know specifics about the sales tax arrangement.

“I would imagine it’s all under the same framework they agreed to previously,” Elam said. “I wasn’t involved in those talks.

“There are two ways to look at that. Are they all covered under the same deal, or do they have to be treated as they would have absent that agreement with the prior governor? On the other hand, you look at it and say because of that agreement with the prior governor they’re bringing thousands of jobs to three locations in Tennessee.”

Rep. Charles Sargent, R-Franklin, chairman of the House Finance Ways and Means Committee, the House sponsor of the legislation calling for Amazon to collect from customers, said Thursday he had been unaware that the announcement about Lebanon was coming.

“I’m glad to see companies want to locate here in Tennessee,” Sargent said. “I think it’s a great opportunity for people in Tennessee, anywhere in the state.”

When asked if he still planned to pursue efforts to force the company to collect the sales tax, Sargent reiterated his previous position.

“I’m going to get with the governor, Speaker (Beth) Harwell, Leader (Gerald) McCormick and see how they want to proceed on the bill, if they want to proceed, and where we’re going to head on that,” Sargent said.

“I don’t know what the incentive was to bring them to Wilson County, nor do I know what contract was signed on getting them there.”

Sargent said he knew Amazon was looking at one or two more locations in Tennessee, which has been broadly discussed for several weeks, but that he had not spoken with the governor or with legislators representing the Lebanon area on the issue.

State Attorney General Robert Cooper has issued an opinion that distribution centers like those in Amazon’s plans create nexus, meaning they represent enough physical presence in the state to warrant legislation forcing a company to collect the tax. Cooper’s opinion said the legislation by Sargent and Sen. Randy McNally, R-Oak Ridge, would be constitutionally defensible.

McNally, reached Thursday night, said it’s hard to comment on the specifics of the deal on the Lebanon site when Tennesseans still don’t know exactly what the original agreement was.

“Unfortunately, I nor the people of Tennessee know what the ‘deal’ is,” McNally said. “I guess it would depend on how it was written.

“It could be written that it just applies to the facilities in Bradley and Hamilton county, or it could be written generally that they would not consider the distribution center nexus, and that brings up some issues.”

McNally voiced concern about the erosion of the sales tax base and the issue of secrecy on the original deal.

“I think everybody’s glad to see the jobs come to Tennessee, but I think we need to certainly answer the questions about what the deal is and the fairness of the deal,” McNally said. “And are we treating one business one way and treating businesses that are in a similar situation differently?”

Paul Misener, vice president for Amazon Global Public Policy, who appeared before Tennessee legislators this year, referred to Haslam and legislators in an official press release from Amazon on Thursday.

“We’re grateful to Governor Haslam, Senator Beavers, Representative Elam, Mayor Craighhead, Mayor Hutto and other officials who have demonstrated their commitment to Amazon jobs and investment,” Misener said.

Those other officials are Sen. Mae Beavers, R-Mt. Juliet, Lebanon Mayor Philip Craighead and Wilson County Mayor Randall Hutto.

An attempt to reach Beavers on the announcement Thursday was unsuccessful, but during the legislative session this year, Beavers expressed concern about the tax policy on Amazon.

“I think we’ve got to be very cautious on giving all of these tax breaks to companies because ultimately the taxpayers in Tennessee end up paying for it,” Beavers said in May. “I’m not sure how many jobs we’re talking about, and that would have an impact on some things I think. We just keep giving company after company tax breaks. How long can we afford to do that?”

Craighead, the Lebanon mayor, expressed his gratitude to state officials for their role in landing the Amazon site and gave special credit to the Joint Economic Community Development Board of Wilson County and its executive director, G.C. Hixson, for work on the plan.

“They don’t get a lot of the credit, but they do 95 percent of the work,” Craighead said of the board.

Craighead said he was unaware of any of the terms discussed on sales tax collections.

Health Care Liberty and Justice News

Fight to Finish Over Federal Health Care Reform

The state-level war over the national health-care package is going down to the wire in the 2010 Tennessee Legislature.

The House on Tuesday passed the “Health Care Freedom Act” — not to be confused with the “Health Freedom Act” the Senate approved earlier this session. However, there’s talk the two might in some way be merged or their language reconciled with one another before the Legislature adjourns for the year.

Both pieces of legislation state generally that government can’t require citizens to purchase health insurance. But the Senate’s version is broader in scope — for example, directing the state attorney general to defend Tennesseans who choose to ignore the federal mandate.

The Senate is scheduled to take up the acts and issues surrounding them again today, on what leaders in both chambers have said is likely to be the last day of the session.

“We’re going to have discussion on the bill in the Senate on the floor, and we’ll just have to see what comes out of that,” said Sen. Diane Black, R-Gallatin, whose SB2560 is the companion bill to HB2622 passed by the House.

Last week the Senate voted to pull SB2560 out of a closed committee to ready it for floor action, including possible alteration and amendment. That move was precipitated by the House killing the original “Health Freedom Act” in the Budget Subcommittee, which is controlled by Democrats and House Speaker Kent Williams.

Further complicating the issue is that Tennessee Attorney General Robert Cooper has stated that the “Health Freedom Act” is unconstitutional. On the other hand, the “Health Care Freedom Act,” wrote Cooper, probably does not run afoul of  either the United States or Tennessee constitutions.

The “Health Care Freedom Act,” sponsored by Rep. Susan Lynn, R-Mt. Juliet, states: “The people of Tennessee have a right to enter into private contracts with health care providers for health care services and to purchase private health care coverage. The legislature shall not require any person to participate in any health care system or plan, nor shall it impose a penalty or fine, of any type, for choosing to obtain or decline health care coverage or for participation in any particular health care system or plan.”

Black wouldn’t say what she anticipates happening or exactly what she’ll be proposing as far as amendment or adoption of SB2560. Adding to the uncertainty is the ongoing political feud in the GOP between Rep. Susan Lynn and Sen. Mae Beavers, two Mt. Juliet Republicans who are running for the same Senate seat this year. Beavers was the sponsor of the “Health Freedom Act,” Lynn of the language passed by the House Tuesday.

“The only thing that I can say is the Senate will be the Senate, and they will give the bill debate just like they do on any other bill,” Black said.

Debate in the House on Tuesday over Lynn’s bill was mostly a rehashing of well-worn positions staked out by conservatives and progressives in the Legislature. The measure ultimately passed, 53-32.

Republicans generally argued the federal government has no legitimate power to demand that individuals purchase health insurance or any other product. Democrats maintain that the states have no constitutional authority to resist the demands of the federal government.

Andrea Zelinski contributed video interviews for this story.


Senate Advances Attorney General Election Amendment

After putting the issue on hold earlier this week, Sen. Mae Beavers managed today to convince a slim Senate majority to embrace changing the Tennessee Constitution to give voters the power to determine who should become the state’s chief prosecutor.

But if the narrow margin by which the measure passed today is any indication, the odds appear steep against the state electorate ever even getting a chance to weigh in on the constitutional amendment question itself — let alone ever actually getting to cast ballots for an attorney general.

Nineteen state senators voted for the resolution, 14 against it.

It now must pass the House of Representatives before this session ends. After that, it’ll have to be passed again in both chambers next session — but by two-thirds majorities in both, not just a simple majority.

The measure first came up for a vote on Monday, but faltered after several lawmakers wondered why Beavers, a Mt. Juliet Republican, would want to fix a system they said wasn’t “broken.” They also asked why she was only pushing for attorney general elections, and not voter-selection of other constitutional officers as well.

Said Sen. Roy Herron, D-Dresden, “Perhaps the most important thing that what we can look to is not what has been said but what has not been said. What you have not heard is that for the last 140 years the attorney generals have been too political. What you have not heard is that in the last 140 years the attorney generals have failed to serve this state well.”

Beavers said she actually has supported pushes in the past to elect other constitutional officers. However, she said, the secretary of state, the comptroller of the treasury, and the treasurer are themselves appointed by elected officials. Tennessee Supreme Court justices aren’t elected by the people — making the attorney general, whom they appoint, “twice removed” from any direct democratic accountability, she argued.

Rep. Mike Bell, R-Riceville, will be carrying the bill in the House.

Liberty and Justice

Legislators Move Toward Rewriting DUI Law

A bill that advanced in the state Senate this week would give some DUI offenders more driving options after a conviction.

Under an amendment to SB2965 brought by sponsor Mae Beavers, R-Mt. Juliet, some first-time, non-aggravated offenders would be given a choice of whether to get a restricted license or have an interlock device installed on their vehicle in order to legally drive.

Right now, such offenders can only get a restricted license, which places geographic restrictions on a where a person can drive, like just to and from work, school, and church. But if a person convicted of a DUI offense chooses to get an interlock rather than a restricted license, the offender would no longer face such driving restrictions.

The amendment would also require that the interlock be installed on only one vehicle operated by an offender, rather than on all vehicles owned or operated by an offender, as current law stipulates.

One goal of the bill, according to proponents, is to encourage more offenders to use interlock devices. In addition to making the streets safer, they say, funds from the increased use of breath-activated ignition devices would go to offset their costs to those whom the court has deemed indigent.

Offenders with multiple DUI violations, or first-time offenders who are considered “aggravated” — which includes getting caught with a blood-alcohol content of at least .15, driving drunk with a child in the vehicle, driving drunk and being involved in an accident, or violating the implied consent law — would still be required to have an interlock device.

In 2008, there were 21,033 DUI convictions in Tennessee, according to Roger Hutto, a representative from the Department of Safety. He said 13,000 were first-time offenders, and 3,877 of those eligible for a restricted license obtained one.

Some lawmakers on the committee indicated that the low number of people getting restricted licenses shows the current law is already hard to enforce and that there may not be much of an increase in the number of interlock users.

“The cost of a DUI is very, very high,” said Sen. Doug Jackson, D-Dickson. “A lot of these people are just working people who haven’t got two nickels to rub together. The cost and consequence of a DUI are beyond their means.”

“You know what they are doing?” he continued. “They’re getting a restricted license – they’re driving anyway. People are going to do what they are going to do. Some of these people…it’s just an unfortunate circumstance they find themselves in and they’ve got kids to feed and a mortgage to pay.”

“It’s all on the honor system, anyway,” he added.

Beavers countered that people would choose to have the interlock device rather than a restricted license because of the fewer restrictions of having an interlock device under her amendment.

“I think that’s going to be an incentive for people to get the interlock, and we’re going to be safer on our streets,” she said. “The Department of Safety has told us this (legislation) will save 200-300 lives a year, and I think we have to ask ourselves, ‘What are those lives worth?’”

Beavers also downplayed the cost DUI offenders face after conviction.

“How much are these people spending on alcohol (already)?” she asked rhetorically. “What are they taking away from their families right now with the amount they have to drink every day to get up to a .15 (blood alcohol content)?”

Jackson said while that might be true for some people, “some just get caught coming home from the family reunion.”

Sen. Jim Kyle, D-Memphis, said the fees for the devices vary greatly because of the lack of a competitive market in the state, allowing some vendors to charge “what they want to charge.”

“There isn’t competition…until there’s a market presence by more than one vendor, and we’ve not been shown any proof to that effect,” he said. “While there are people who are in the business, there are people in the business with 20 locations, and there are people in the business with just one or two locations.”

Since current law requires that vendors charge a “reasonable” fee, Kyle suggested a cap or a fee structure.

In response, the committee adopted an amendment by Sen. Doug Overbey, R-Maryville, that would limit installation fees at $70 and monthly fees at $100.

That may be revisited by the Senate Finance Committee, where the bill is headed next, after Sen. Brian Kelsey, R-Germantown, suggested the Legislature give the Department of Safety the authority to set the fees so the Legislature does not need to revisit the fees every year.

Action on the companion bill in the House was deferred by a subcommittee Wednesday morning.

Press Releases

Beavers: ‘My Work Here Is Not Done’

Press Release from Sen. Mae Beavers, R-Mt. Juliet, March 11, 2010:

NASHVILLE, TN – Senator Mae Beavers, surrounded by her Senate colleagues, announced today that she is running for another term for the State Senate seat representing Wilson, Cannon, Clay, DeKalb, Macon, Smith, Sumner, and Trousdale counties. The decision came after much deliberation and prayerful consideration. There had been discussion that Senator Beavers could possibly be running for the Wilson County Mayor position; however, at the insistence of many colleagues and a multitude of constituents, Beavers has declared her desire to continue her work in serving the people of the 17th District.

“This decision is based upon my desire to serve the state,” Beavers stated. “I’m proud of what we have been able to accomplish in the state legislature in the past eight years, and I’m looking forward to what we can accomplish in the next four years, especially if we have a Republican Governor and Republican majorities in both the House and Senate. My work here is not done.”

Senator Beavers has a Bachelor of Science degree from Trevecca Nazarene University. She has worked as a court reporter and paralegal before being elected to the county commission, and more recently worked as a financial advisor. In the Tennessee Legislature she was a leader in the fight to stop the passage of a state income tax. Since being elected to State Senate, she has taken a leadership role, serving the past two sessions as the Chair of the Senate Judiciary Committee.

Beavers began her public service as a Wilson County Commissioner from 1990-1994 and represented West Wilson County in the Tennessee State House of Representatives from 1994-2002. She was elected to the Tennessee State Senate in 2002 and re-elected in 2006.


Beavers Wants to Retain Senate Seat

Sen. Mae Beavers announced Thursday that she was dropping out of the Wilson County mayor’s race and would run for reelection to her senate seat — a spot her hometown rival, Rep. Susan Lynn, has already been campaigning for.

Beavers and Lynn have a lot in common. The two are both Republicans from Mt. Juliet, share similar views on state sovereignty and word around the Capitol is that the two aren’t particularly fond of one other.

Beavers said she decided to run for reelection because she was “pumped up” about the possibility that Republicans could control the legislature and the governor’s office. She added that she felt that her work in the Senate and on the Judiciary Committee wasn’t finished.

Lynn began campaigning for the Senate seat nine months ago, shortly after Beavers said she was pursuing the the job of Wilson County mayor. Lynn said she would have run for reelection to her own House seat if Beavers had said in the beginning she wanted to stay in the senate.

Lynn wouldn’t confirm whether she would stay in the race or drop out, only saying “I filed to run” for the seat.

Lynn, and any other candidate contemplating a run for office, have until the April 1 filing deadline.

Andrea Zelinski can be reached at