2023 Legislative Report
The Tennessee Bankers Association is pleased to present this review of 2023 Tennessee legislation affecting the banking industry or that may be of general interest to Tennessee bankers. Each entry includes a public chapter summary, link to the full text, and effective date.
Please contact Amy Heaslet if you would like more information about any of these new laws and the impact they may have on your bank.
Updates to Banking and Trust Laws
Public Chapter 28
SB 676 / HB 489
**Legislation from TBA
Effective Date: March 10, 2023
This makes three changes relative to financial institutions:
- clarifies that notice must only be given to the Department of Revenue upon the death of the last surviving lessee of a safe deposit box for lessees who died prior to 2016; for lessees who die after 2016, notice is no longer required;
- provides that trust companies opening new offices are not required to provide public notice of the change; and
- clarifies that financial institutions can seek reimbursement or payment upfront from borrowers for the fee to release a deed of trust.
Safe Deposit Box Reports to State Treasurer
SB 682 / HB 512
Effective Date: March 21, 2023
This provides uniformity in reporting dates by conforming the banking statute to the Unclaimed Property by extending, from May 1 to November 1, the due date of the report delivered by a lessor of a safe deposit box to the state treasurer containing the name and address of the lessee and an inventory of the contents of the box; and extending, from May 1 to November 1, the deadline by which contents of an abandoned safe deposit box may be claimed before the lessor is required to sell the contents.
Deauthorizes Promissory Notes as Collateral for Public Funds
SB 146 / HB 129
Effective Date: July 1,2023
Applies to federal savings banks and deauthorizes the use of promissory notes secured by a first mortgage or a first deed of trust upon residential real property as collateral by banks in which public funds are invested or deposited by a governmental entity for investments or deposits above the insurance limitations provided by the FDIC.
Financial Exploitation – Expanded Definitions
SB 979 / HB 944
Effective Date: April 28, 2021
Revises present law definition of domestic abuse to include financial abuse and expands the scope of investitive authority of Adult Protective Services from exploitation by a caregiver of governmental funds to exploitation of a caregiver of non-governmental funds.
Assumed Names for Business Transactions
SB 759 / HB 964
Effective Date: July 1, 2023
Establishes a procedure by which a domestic or foreign limited partnership may elect and register to use an assumed name for transacting business in this state.
Regulation of Financial Services
SB 238 / HB 54
Effective Dates: April 4, 2023; January 1, 2024
Permits the commissioner of commerce and insurance to require submission of a set of fingerprints by an investment adviser representative applicant; updates when registration as an issuer-dealer becomes effective after submission of an application; and makes other various changes regarding the regulation of financial services.
Money Transmission Modernization Act
SB 268 / HB 316
**Legislation from the TN Department of Financial Institutions
Effective Date: January 1, 2024
This replaces the TN Money Transmitter Act of 1994 to modernize regulatory standards for the money transmitter industry in the state and incorporates licensing and regulatory standards from a model act drafted by the Conference of State Bank Supervisors, in consultation with state regulators and industry representatives. This law:
1 – promotes coordination among the states in all areas of regulation, licensing, and supervision to reduce regulatory burden and more effectively utilize TDFI resources;
2 – better protects the public from financial crime;
3 – standardizes the types of activities subject to licensing or otherwise exempt from licensing; and
4 – establishes standards for safety and soundness that protect customer funds while supporting business innovation and economic progress in the state.
Consumer Protection – Solicitations via Text Message
SB 868 / HB 805
Effective Date: July 1, 2023
Extends the prohibitions, requirements, and penalties that apply to telephone solicitations to text message solicitations.
Real Property Records Integrity Act
SB 368 / HB 1182
Effective Date: April 17, 2023
Enacts the “Real Property Integrity Act”, which is designed to prevent companies from taking advantage of homeowners by paying them a nominal fee in exchange for their agreement to list their property with the company for 40 years (one company was committing such acts) and filing a memorandum with the county that looked like a lien and was creating issues with the title. The law, among other things:
1 – defines “service agreement” to encompass a contract pursuant to which a person agrees to provide services in connection with the sale of residential real estate or the sale of any product or the performance of any personal service on or for the maintenance of residential real estate;
2 – provides that a recorded service agreement is void and unenforceable under this bill if the agreement:
A – purports to run with the land or to be binding on future owners of interests in the real property;
B – allows for assignment of the right to provide services without notice to and the consent of the owner of residential real estate; or
C – purports to create a lien, encumbrance, or other real property security interest;
3 – clarifies that this law does not impair:
A – the furnishing of a loan or other thing of value to be secured by real property as otherwise provided by law;
B – an agreement entered into by a nonprofit, mandatory membership organization comprised of owners of homes, condominiums, cooperatives, or manufactured homes; or
C – any interest in real property created pursuant to a declaration, covenant, or other applicable law, pertaining to the oversight or management of real property; and
4 – prohibits a service provider from recording or causing to be recorded a service agreement or notice or memorandum of the agreement in this state.
Phone Number Required on Customer Statements
SB 130 / HB 406
Effective Date: July 1, 2023
Requires a financing company doing business in this state (but exempts all institutions subject to Reg E) to provide on its mailed or emailed statements to a consumer a conspicuously displayed telephone number that a consumer may contact for service, and specifies that failure to provide a conspicuously displayed telephone number as required is an unfair or deceptive act or practice under the Tennessee Consumer Protection Act.
Consumer Data Privacy Law
SB 73 / HB 1181
Effective Date: July 1, 2025
Enacts the “Tennessee Information Protection Act” which establishes personal information rights for consumers and responsibilities for businesses that are data controllers. Applies to a company that exceeds $25,000,000 in revenue and that controls or processes personal information of at least 25,000 consumers and derives more than 50 percent of gross revenue from the sale of personal information or controls or processes personal information of at least 175,000 consumers during a calendar year. Provides exemptions to various organizations, agencies, institutions, and entities, including a “financial institution, an affiliate of a financial institution, or data subject to” the Gramm-Leach Bliley Act. Establishes that the Attorney General and Reporter has exclusive authority to bring actions for an alleged violation, and authorizes the court to impose a civil penalty up to $7,500 per violation as well as other relief the court determines appropriate.
Card Check for Unions Prohibited if Economic Incentives Received
SB 650 / HB 1342
Effective Date: July 1, 2023
Prohibits any employer who accepts economic development incentives from this state from agreeing with a labor organization to grant recognition rights for employers’ employees, or subcontractors, solely and exclusively on the basis of signed authorization cards if the selection of a bargaining representative may instead be conducted through a secret ballot election conducted by the National Labor Relations Board; and voluntarily disclosing an employee’s, or subcontractor’s, personal contact information to a labor organization, or a third party acting on behalf of a labor organization, without the employee’s prior written consent unless required by state or federal law.
Regulation of Production and Sale of Hemp-Derived Cannabinoids
SB 378 / HB 403
Effective Dates: May 11, 2023; July 1, 2023; and July 1, 2024
Regulates the production and sale of hemp-derived cannabinoids, including products known as delta-8 and delta-10, by, among other things: clarifying that hemp does not include a substance that is categorized as a Schedule I controlled substance on or after July 1, 2023; establishing that it is an offense for a person or entity to engage in the business of manufacturing, producing, or selling products containing a hemp-derived cannabinoid in this state without a valid license; establishing that it is an offense for a person to knowingly sell or distribute a product containing a hemp-derived cannabinoid without having first obtained proof of age from the purchaser or recipient; revising the provisions pertaining to the department of agriculture to provide that the department is responsible for: (A) issuing licenses to suppliers and retailers; (B) overseeing the manufacture and distribution of hemp-derived cannabinoid products by licensed suppliers, including ensuring compliance with labeling, product testing, and transportation requirements and conducting necessary inspections, prior to a product’s delivery or sale to a retailer; and (C) conducting random, unannounced inspections at locations where hemp-derived cannabinoids and products containing hemp-derived cannabinoids are manufactured, distributed, or sold to ensure compliance.
Trust Law Updates
SB 492 / HB 1185
**Legislation from TBA
Effective Date: April 17, 2023
This makes various updates to the trust code, including but not limited to, allowing for nonjudicial settlement agreements in probate; revising to the Community Property Trust Act; allowing for modification of noncharitable irrevocable trusts by consent; clarifying directed trusts may have two co-trustees; and streamlining the statutory provisions for trustees to be released.
Enacts the “Small Estate Probate Act”
SB 489 / HB 337
Effective Date: April 28, 2023
Enacts “The Small Estate Probate Act,” makes various changes to “The Small Estate Affidavit Limited Letter of Authority Act” and replaces that act.
Copies of Wills May be Sent by Email
SB 478 / HB 338
Effective Date: July 1, 2023
Allows a copy of a will, portions of a will, or letters of administration to be sent to beneficiaries and residuary distributees by electronic mail in addition to first class mail or personal delivery.
Recovery of Costs on Appeal
SB 486 / HB 39
Effective Date: March 23, 2023
Specifies that recoverable costs on appeal include the cost of preparing and transmitting the record, the cost of a transcript of the evidence or proceedings, the cost of producing necessary copies of briefs and the record, premiums paid for bonds to preserve rights pending appeal and costs incurred to obtain the bonds such as the cost of letters of credit or other costs incurred to provide security for the bonds pending appeal, litigation taxes, and any other fees of the appellate court or clerk.
Appeal in Cases Granting Possession of Real Property
SB 391 / HB 249
Effective Date: July 1, 2023
Specifies that in general sessions court cases involving an order granting possession of real property, a writ of possession must issue by operation of law if no appeal is taken within the 10-day appellate period.
Revises the Uniform Arbitration Act
SB 775 / HB 1162
Effective Date: July 1, 2023
Rewrites the Uniform Arbitration Act and makes various changes to the statutes governing arbitration. Prohibits, in any case governed by present law provisions governing arbitration, class or collective arbitrations from being permitted, unless the agreements to arbitrate of all parties to be joined expressly permit the arbitrator or arbitrators to entertain such actions; and clarifies that an arbitrator may only award punitive damages under this bill for cases which the agreement of the parties does not exclude the seeking of punitive damages.
State Treasurer Allowed to Purchase, Sell Gold and Precious Metals
SB 519 / HB 1479
Effective Date: March 23, 2023
Allows the state treasurer to purchase and sell physical gold and precious metal, and requires the treasurer to ensure that the gold or precious metal is securely maintained and transported to a state depository, adequately insured, independently audited and physically segregated from other assets kept as the state depository.
Liquidation of Security Obtained by the State Treasurer
SB 358 / HB 572
Effective Date: April 28, 2023
Permits the state treasurer to sell or liquidate a security valued under $500 immediately after the treasurer takes custody of the security if the records of the holder do not reflect the identity of the person entitled to the security.
Enacts the “Protecting Tennessee Business and Workers Act”
SB 681 / HB 774
Effective Date: 4/28/2023
Enacts the “Protecting Tennessee Businesses and Workers Act” which prohibits a local government from adopting or enforcing an ordinance, regulation, resolution, policy, or another legal requirement that regulates or imposes a requirement upon an employer pertaining to hours worked, scheduling that an employer is required to provide employees, or employee output during work hours. Prohibits a local government from imposing a wage or employment benefit mandate unless required by state or federal law. Prohibits a local government from discriminating based on a wage or employment benefits set by a private company if that company meets state and federal employment laws.
Enacts the Tennessee Local Development Authority Public Safety Protection Act
SB 280 / HB 328
Effective Date: May 11, 2023
Enacts the Tennessee Local Development Authority Public Safety Protection Act of 2023, which authorizes the Tennessee Local Development Authority to issue its revenue bonds and make the bond proceeds or state appropriations available for loans to counties or volunteer fire departments for the purchase of equipment for public safety officers.
State Treasurer Prohibited from Taking ESG Interests into Consideration
SB 955 / HB 1286
Effective Date: May 17, 2023
Requires the department of treasury investment division staff to invest, reinvest, manage, and select investment options for program assets for financial reasons, excluding environmental, social, and governance interests that may not be material to the financial analysis of the investment, for the exclusive benefit of the beneficiaries of the programs while maximizing long-term shareholder value.
Policy Recommendations that Infringe, Restrict Private Property Rights
SB 1147 / HB 1346
Effective Date: May 17, 2023
Prohibits this state and its political subdivisions from adopting or implementing policy recommendations that deliberately or inadvertently infringe or restrict private property rights without due process, as may be required by policy recommendations originating in, or traceable to, “Agenda 21,” adopted by the United Nations in 1992 at its Conference on Environment and Development, the 2030 Agenda for Sustainable Development and the U.N.’s proposal to reach net zero emissions by 2050, or any other international law or ancillary plan of action that contravenes the constitution of the United States or the constitution of this state.
Requires Reserve Study of Unit Owners’ Association
SB 863 / HB 750
Effective Date: January 1, 2024
Requires a board of directors for a unit owners’ association to either update a reserve study or conduct a reserve study if certain conditions are met.
Cumberland County – Property Purchased by County at Tax Sale
SB 1510 / HB 1216
Effective Date: April 25, 2023
Provides that whenever Cumberland County acquires property at a tax sale, a non-governmental entity holding a vested and duly recorded contractual right to the payment of fees or assessments secured by such property retains such right, and provides that Cumberland County is liable for the payment of such fees and assessments if the county makes actual use of the property purchased at the tax sale.
Prohibits Certain Foreign Ownership of Real Property
SB 122 / HB 40
Effective Date: July 1, 2023
Prohibits sanctioned nonresidential aliens, sanctioned foreign businesses, sanctioned foreign governments, or their agents, trustees, or fiduciaries, from acquiring real property in Tennessee if their respective country is on the office of foreign assets control of the U.S. Department of the Treasury’s sanctions programs and country information list. Requires all of the prohibited parties to divest all rights, titles, and interests in property acquired by devise or descent within two years. Requires any sanctioned nonresident alien, sanctioned foreign business, sanctioned foreign government, or their agent, trustee, or fiduciary, to register their property with the Secretary of State (SOS) within 60 days after July 1, 2023 or within 60 days after acquiring the real property or the interest in real property. Requires the SOS to report to the Attorney General and Reporter (AG) if it finds any party in violation of this requirement. Requires the AG to initiate action in the circuit court for the county in which the real property is located. Exempts from liability any attorney licensed in this state or title insurance company and agent licensed in this state in the performance of the transfer of real property.
Notice of Termination of Tenancy
SB 717 / HB 988
Effective Date: July 1, 2023
Requires a landlord to provide 60 days’ notice of termination of tenancy for the purpose of eviction of a residential tenant of certain facilities for older persons if the tenant has paid the tenant’s rent due and is not in arrears on rent payments, and the termination and eviction are to allow for new property development.
Permit Application to be Judged on Law in Effect at Time of Application
SB 559 / HB 170
Effective Date: July 1, 2023
States that property owners should expect that a permit application will be judged on the law in effect at the time of application; declares that the general assembly rejects the pending ordinance doctrine, as described by the Tennessee supreme court in its May 14, 2007, opinion in the case of Harding Academy v. Metropolitan Government of Nashville and Davidson County, as contrary to the public policy interests of property owners in this state.
Land Classified as Agricultural or Forest Land
SB 711 / HB 898
Effective Date: May 17, 2023
Requires that the assessor of property, in determining whether the land is agricultural land for purposes of property taxes, consider whether: (1) the land is enrolled in a conservation program administered by the United States department of agriculture; (2) the land is in a conservation easement; or (3) the land is restricted pursuant to the Hazardous Waste Management Act of 1983, if, at the time of its enrollment, the land was classified as agricultural land by the assessor of property. Requires the assessor of property, in determining whether the land is forest land for purposes of property taxes, to consider (1)-(2) above; or whether the land is restricted by the Hazardous Waste Management Act of 1983, if, at the time of its enrollment, the land was classified as forest land by the assessor of property.
Property Tax Relief for the Elderly
SB 871 / HB 366
Effective Date: July 1, 2023
Makes changes to the Property Tax Freeze Act, including authorizing local legislative bodies to set the income limit for persons who are 65 years of age or older and otherwise eligible for property tax relief under the Property Tax Freeze Act at $60,000.
Duty to List Personal Tangible Property Used in Business
SB 384 / HB 804
Effective Date: July 1, 2024
Revises present law relative to a taxpayer’s duty to list fully such tangible personal property used, or held for use, in the taxpayer’s business or profession on such schedule, place its correct value thereon, sign the schedule, and return it to the assessor on or before March 1 of each year.
Tax Relief to Small Businesses and Families
SB 275 / HB 323
Effective Dates: May 5, 2023; January 1, April 1, and July 1, 2024; and January 1, 2025
Enacts the “Tennessee Works Tax Act” that brings more than $400 million in tax cuts to Tennessee families and businesses by, among things, having a three-month grocery tax holiday from August through October 2023 and an optional paid family leave tax credit. Provides $150 million in tax cuts to small businesses through several changes to the franchise and excise tax and business tax by exempting a company’s first $50,000 in net earnings from the excise tax. Exempts up to $500,000 of business property from franchise tax liability. Raised the threshold for filing to businesses tax to businesses with gross receipts of $100,000 or more per jurisdiction (up from $10,000). Adopts “single sales factor” apportionment for franchise and excise tax, which only takes a company’s sales into account. Allows businesses to recover capital costs more quickly, and extends the carryforward period for franchise and excise tax credits to 25 years, an increase from 15 years. Removes the business tax penalty on manufacturers for not having enough on-site storage and adopts changes to sales tax law to make it easier for sellers to do business in Tennessee.
Establishes Financial Literacy Month
SB 668 / HB 644
Effective Date: 4/28/2023
Replaces Financial Literacy Week, the first full week of April, with Financial Literacy Month, the entire month of April, and requires the financial literacy commission to study financial literacy in this state and report to the general assembly.
Financial Exploitation – Expanded Definitions
SB 979 / HB 944
Effective Date: April 28, 2021
Revises present law definition of domestic abuse to include financial abuse and expands the scope of investitive authority of Adult Protective Services from exploitation by a caregiver of governmental funds to exploitation of a caregiver of non-governmental funds.
