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Lawmakers Consider Stronger Monitoring of Unemployment Recipients

After lots of talk last year about problems within the state unemployment system, Republicans in the Tennessee General Assembly are ready to push legislation requiring that people collecting benefits be more accountable for their work searches.

“When you’re on employment, you’re supposed to be looking for a job, and right now it’s more or less the honor system,” said Sen. Jack Johnson, R-Franklin. He is sponsoring a bill to make unemployment-benefits recipients keep track of where they submit applications each week and provide that information to the state online.

The proposal is meant to ensure people don’t draw unemployment any longer than necessary, he said.

“The burden should be on the applicant because that’s the condition upon receiving your benefits, is that you be looking for a job,” said Lt, Gov. Ron Ramsey. “Anecdotally, we’re pretty confident there’s a lot of folks who aren’t doing that. They’re just sitting at home collecting their benefits.”

Republicans met with Tennessee employers during a series of legislative jobs task force meetings in 2011, as well as part of Ramsey’s Red Tape Road Tour in 2011.

There are three overlapping proposals in the works, including the “Unemployment Insurance Accountability Act of 2012,” which would require people collecting benefits to submit on a weekly basis the names of three employers where he or she sought work.

Gov. Bill Haslam told reporters he’s a fan of the unemployment insurance reforms, although admitted his staff still needs to research the price tax first.

“I think the direction that Lt. Gov. Ramsey is going is 100 percent right,“ Haslam said after commemorating Andrew Jackson’s 245th birthday at the Hermitage Thursday. “I told him I would do our homework with our departments to try to understand cost to state government, impact and we’d be back to weigh in on that probably next week.”

The central piece of legislation, HB3431, would also charge the Department of Labor and Workforce Development with auditing 1,000 submissions a week and kick anyone submitting fraudulent job search reports off the rolls for at least eight weeks, redefine “misconduct” that disqualifies workers from benefits and ban people who are incarcerated from collecting unemployment while behind bars.

A yet-to-be-added amendment would further change the unemployment law to set wage standards for jobs that are deemed “suitable” for unemployed workers to accept.

The measure passed a House subcommittee Wednesday, and heads to the Consumer Affairs committee Tuesday, March 20. The bill stands now with a $122,000 price tag, but would save an extra $100,000 annually for the Unemployment Trust Fund, according to state officials.

Unemployment changes didn’t make the cut in a House Republican jobs task force that met last fall, but task force chair and bill sponsor Rep. Jimmy Matlock, R-Lenoir, said those meetings contributed to his desire to edit the system.

“We understand there are people who do need this. We’re not taking this away,” Matlock said about unemployment benefits. “We’re looking for legitimate folks who need it.”

Another bill he and Johnson are sponsoring, SB3657, would allow employers to ask the department to classify them as seasonal employers. The measure would limit how much seasonal employees can collect in unemployment benefits, saving the state an estimated $2.2 million annually — although it would cost over $1 million in one-time startup costs. The measure has collected dust in House and Senate committees for weeks but is expected to move later this month.

SB3659 would require the state to build a portal for employers to send and receive information about employees who have quit, were laid off or fired. It would also allow employers to contest former workers’ benefits online.

However, the governor flagged that bill last month based on concerns about its price tag, $115,000. House lawmakers are sending this bill to the Finance Committee, although it awaits a vote in the Senate Commerce Committee.

Business and Economy News

GOP Looks at Changes to Workers’ Comp, Regulatory Burdens

A handful of Tennessee Republicans are wrapping up their study of small businesses for the year, but they’re unsure how the fruits of their labor will turn into legislation in 2012.

At the direction of House GOP leaders, a task force of 10 representatives has spent the last four months meeting with business owners across the state to figure out what would make the Volunteer State’s business environment more attractive.

The House Republican Small Business and Economic Development Task Force, which met Monday for its final time this year, is recommending the caucus consider:

  • Enacting new tort reforms.
  • Modifying workers’ compensation to make it more competitive with neighboring states.
  • Focusing educational institutions on preparing students for in-demand jobs.
  • Reducing or eliminating business regulations.

The problem, according to Chairman Jimmy Matlock, is the suggestions are short on details.

“We’re, at this point, still in general terms,” said Matlock, R-Lenoir. “What we tried to do was listen to what business folks were asking from government. … We’re not really out there to throw a lot of legislation at this.

“I don’t think you’re going to see 50 new bills coming out. I think you’re going to see a few serious bills coming out of this.”

The task force was formed in July by House Republican Leader Gerald McCormick, who asked the lawmakers to identify regulations that impede job growth, study the best practices from other states and develop strategies to make the state’s business environment more attractive.

The task force will hand over its recommendations to McCormick in the next two weeks, said Matlock, although the panel may refine its recommendations as lawmakers head back to Nashville for the spring legislative session.

State leaders have made it their mission to probe Tennessee businesses about what they want out of state government after the dust settled from this year’s Legislative session.

Gov. Bill Haslam held a series of business roundtable discussions across the state this summer and is expected to build the recommendations into his legislative priorities next year. Lt. Gov. Ron Ramsey is tackling much of the same issues in his “TN Red Tape” tours to talk to business owners about ways the government can lighten up on regulations.

And Democrats from both chambers have toured the state asking businesses what they want out of government as they draft their own ideas for job-creating bills to pitch next year.

Changes to how the state handles its unemployment system didn’t make the cut on the House GOP task force’s list of recommendations, Matlock said.

Some members, including Matlock, had echoed concerns they heard this fall from business owners that some claimants were running out their unemployment benefits instead of taking jobs. But the panel ultimately decided to stay away from recommending unemployment reforms.

Ramsey has been the most vocal about wanting changes to how the state polices people collecting unemployment benefits long-term and suggested the state build in requirements on jobless workers to prove they’re looking for work.

Haslam has said he’s heard similar rumors about people collecting unemployment benefits turning down jobs, and a U.S. Department of Labor report indicates Tennessee has overpaid those benefits to the tune of $311 million over three years.

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House Republicans Hear Business Complaints on Workers’ Comp, Unemployment Benefits

Republican lawmakers are expected to address the state’s workers’ compensation system next year and revisit the issue of extended unemployment benefits, based on a meeting of the GOP’s House small business task force in Nashville on Wednesday.

The task force heard anecdotal evidence of people who are currently accepting unemployment benefits but are not willing to apply for jobs. Democrats lobbied hard for an extension of unemployment benefits in the waning hours of negotiations on the state’s $30.8 billion budget passed in May.

But Democrats are not members of the House group that met Wednesday. The task force is comprised entirely of Republicans, who have a 64-34-1 majority in the House. The task force heard from several small business operators from across the state.

Workers’ compensation issues have come up frequently at business roundtables held by Gov. Bill Haslam, and the governor has said the matter should be addressed. Several people spoke of the workers’ comp issue at Wednesday’s meeting of legislators.

“We’re not (going) to get in front of the governor,” Rep. Jimmy Matlock, R-Lenoir City, chairman of the task force, said after the meeting. “We’re working hand in hand with them. What you’ll see come from this committee is recommendations back to the Assembly of what we heard today, what we’ve found out through our investigations.”

When asked if Tennesseans could expect to see workers’ comp legislation surface when the General Assembly convenes in January, Matlock said, “I think we will.”

Rep. Pat Marsh, R-Shelbyville, who is in the trucking business, said workers’ compensation insurance is one of the problems his business faces. Marsh introduced Raymond Farmer, vice president of the American Insurance Association, a trade group based in Atlanta, as an expert.

Farmer told the group his organization analyzes the insurance environment in different states and that Tennessee is a business-friendly state but that it should focus on workers’ compensation. Farmer said the state should reform its adjudication process, moving from a court-based approach to an administrative format.

“Tennessee is one of only three states, the others being Alabama and Oklahoma, with a cumbersome court-based approach to adjudicating workers’ comp claims,” Farmer said. “Although administrative systems can, and do, have their own shortcomings, eliminating a court-based approach is a significant step in the right direction for a system not based on fault, as is the court system.

“Tennessee should adopt a purely administrative system.”

Farmer said Tennessee currently reimburses based on multiple conversion factors that undermine the system by politicizing physician reimbursements and increasing medical costs, including pharmaceutical expenses. Farmer also said Tennessee should modernize its funding of the compensation system.

Wyatt Owens, a contractor from Paris, Tenn., said trouble with workers’ compensation is the biggest complaint he and other contractors have.

“The really biggest problem I have with it is Owens Construction has to be the policeman,” Owens said. “Every sub we hire, we’ve got to make sure they’ve got their paperwork right. We’ve got to make sure they pay their dues, they pay their whatever. And if we don’t do that, we’re penalized.”

Owens said he believes there should be workers’ compensation but that rules and auditors keep changing.

House Majority Leader Gerald McCormick formed the task force in July, saying the state needs to identify regulations that impede job growth. McCormick sat in the audience through much of Wednesday’s meeting, as did House Majority Caucus Leader Debra Maggart, who spoke briefly to the task force.

After the meeting, Matlock said there seems to be a common theme in the group’s work, including workers’ comp, unemployment benefits and job creation.

“We’ve got to get people incentivized to get back out and want to get back in the workplace,” Matlock said.

“What these business owners are telling us is, ‘Folks, there are some barriers out here. There are some things that are causing us not to take risk, not to get out and look for employees, because there is this overwhelming data that shows us we’ve got too many pages of issues we’ve got to compile, too many things we’ve got to, as business owners, be responsible for.’

“And at the end of the day it’s all about job creation. It’s all about seeing our communities grow.”

Matlock said he opposed extension of unemployment benefits this year but emphasized that he is just one member of the Legislature. Rep. Steve McManus, R-Cordova, said he voted for it.

“There really are an awful lot of people out there that are just trying so hard to work,” McManus said. “Yet today it was so interesting that we heard that people are turning work down when they’re unemployed.”

McManus said he believes the group’s homework is just beginning. He said there is a need to distinguish between state regulations and federal regulations and then get specific with state regulations that are hurting businesses.

“We write an awful lot of legislation up here. It’s time to rescind some of this legislation, too,” McManus said.

Press Releases

McCormick’s Next Task Force to Tackle Economic Development

Press Release from Rep. Gerald McCormick, R-Chattanooga; July 14, 2011:

Representative Jimmy Matlock Named Chairman; Group Will Explore Ways to Reduce Government, Allow Private Sector to Expand

(July 14, 2011, NASHVILLE) – With the 2011 Southern Legislative Conference coming up this weekend in Memphis, giving Tennessee legislators the opportunity to learn about the best practices from other States and share our own, House Majority Leader Gerald McCormick (R—Chattanooga) announced the formation of what is expected to be the final task force of the House Majority.

The Republican Caucus Small Business and Economic Development Task Force will consist of ten Members of the House Majority. In a letter announcing the appointments to the task force, Leader McCormick outlined specific duties for the working group. They include:

  • Identifying regulations that are impeding job growth in Tennessee’s private sector and developing measures to remove those hurdles;
  • Ascertain the best practices of other States when it comes to paving the way for job creation by small businesses and companies;
  • Develop strategies and potential policy initiatives to make Tennessee’s environment better for business expansion and recruitment.

Representative Jimmy Matlock (R—Lenoir City) was given the responsibility of chairing the task force. The other Members include: Representative Charles Sargent (R—Franklin), Representative Curtis Johnson (R—Clarksville), Representative Steve McManus (R—Cordova), Representative Jon Lundberg (R—Bristol), Representative Pat Marsh (R—Shelbyville), Representative Sheila Butt (R—Columbia), Representative David Alexander (R—Winchester), Representative Bill Sanderson (R—Kenton), Representative Ryan Williams (R—Cookeville), and Representative Tim Wirgau (R—Buchanan). The group intends to meet when other scheduled legislative committees meet such as the Fiscal Review Committee or summer study meetings.

“With unpredictable policies that affect businesses coming out of Washington, I believe it is our responsibility to create good policies that will have a positive effect on job development for Tennesseans,” said Majority Leader McCormick. “This task force will conduct a thorough review of our Code and find places where we can eliminate burdensome government regulations that are hurting Tennessee businesses. While Democrats are the Party of income taxes and ineffective government solutions to our challenges, I believe the proper path to sustainable, long-term economic growth is by unleashing the power of entrepreneurs and our business community.”

Rep. Matlock agreed and added, “We had a successful 2011 that included a number of pro-growth reforms for Tennesseans. However, there is much work to be done. This task force will be responsible for presenting a package of recommendations to the full Majority that will form the basis of our next economic development package. I appreciate the opportunity to lead this group and look forward to getting to work.”

“Since Governor Haslam and our Republican Majority were elected last fall, we have been consistent in our efforts to reform the way government operates and to create a consistent environment for Tennessee businesses. This task force is the next logical step in that cause and I look forward to hearing how we can help Tennessee’s job creators,” said Rep. Johnson.

“Small business is the backbone of the American economy and our economy here at home,” said Rep. Wirgau. “Job development is the number one issue on the minds of Tennesseans and, as a business owner myself, I look forward to identifying ways we can get government out of the way so our job market can start growing once more.”

House Speaker Beth Harwell (R—Nashville) concluded, “This is a smart undertaking for our Majority. 2011 saw us institute a number of critical reforms that will help businesses grow. We reformed education for our children, implemented tort reforms for the business environment, and we reduced the size of government. Next session, I believe we can drill down and identify some specific policies that will have a positive impact on Tennessee’s job market. I look forward to hearing the results of this task force’s work.”

Leader McCormick announced the appointments in a letter to all Members of the House Republican Majority. The full text of the letter is below:

July 14, 2011

Fellow Caucus Members:

I sent a letter to each of you yesterday announcing the appointment of a Republican Caucus Firearms Issues Task Force. This task force, along with the Energy Task Force that was formed earlier this year, will provide a vital service to our Caucus and to our State by conducting significant research on complex issues.

The main goal of the House Republican Caucus is to implement good public policy that will benefit all of Tennessee’s citizens. Without a doubt, the greatest issue for Tennesseans is the lagging economy that our nation is currently experiencing. Since our Majority was formed, our number one concern has been economic development for Tennessee. This includes job development, business expansion, and private sector growth. Though we had a successful 2011 legislative session, we can do more. That is why I am excited to announce the formation of a final task force that will concentrate squarely on that issue.

I have asked ten of our members to form the Republican Caucus Small Business and Economic Development Task Force. This group will develop strategies and potential policy initiatives to make Tennessee’s environment better for business expansion and recruitment, as well as identify regulations that impede job growth in Tennessee’s private sector and develop measures to remove those hurdles. Another key task of this group will be to ascertain the best practices of other States when it comes to paving the way for job creation by small businesses and companies. Providing a great business climate is a process of constant improvement, and I look forward to hearing the task force’s report to the Caucus at the conclusion of their research.

The Republican Caucus Small Business and Economic Development Task Force will consist of the following members:

Rep. Jimmy Matlock, Chairman

Rep. Charles Sargent

Rep. Curtis Johnson

Rep. Pat Marsh

Rep. Tim Wirgau

Rep. Steve McManus

Rep. Jon Lundberg

Rep. David Alexander

Rep. Sheila Butt

Rep. Ryan Williams

Rep. Bill Sanderson