Legislative Updates

12/21/2020

Republicans and Democrats have reached a deal on COVID-19 relief legislation and an omnibus federal funding bill, which include several items of interest to the apartment industry. The text of the bill has not yet been released, but I understand that everyone is very anxious to know the details and others in the housing community are sharing details on social media. Everything that follows is what we believe to be in the legislation but is subject to change pending release of the legislative language.

First, the legislation extends the CDC eviction order through January 31, 2021. This one-month extension is not ideal but is shorter than what many initially sought.

The agreement also creates a $25 billion emergency rental assistance program administered by the Department of the Treasury. Note that this is not via the Emergency Solutions Grants (ESG) program proposed in earlier, Democratic legislation. The real estate community broadly had significant concerns about ESG as the channel for rental assistance and we think the option taken here is a better way. Here are the highlights of the program:

• Funds are distributed to states and directly to cities with 200k+ population (those localities of less than 200K population would have to secure an allocation from their states).
• Funds are eligible for current or unpaid rent and utility payments (9 months of rent arrears, 3 months going forward) and other directly or indirectly-incurred housing expenses because of the pandemic. 
• Eligible households are those (1) with a household income below 80 percent of area median income (AMI); (2) with a demonstrable risk of experiencing homelessness or housing instability; and (3) have one or more household members who qualify for unemployment benefits or experienced financial hardship due, directly or indirectly, to the pandemic.
• Assistance would be prioritized for renter households that do not exceed 50 percent of AMI as well as renter households who are currently unemployed and have been unemployed for 90 days. Income Eligibility is based on time of application and must be recertified every three months.
• Renters apply for assistance from their administrative agency managing the program. Payments are sent directly to the housing provider. Residents may receive payment directly from the administrative agency and pay their provider if that provider does not want to participate in the program. Housing providers can also apply for rental assistance on behalf of the resident, but must inform them and secure their consent.

Other provisions in this agreement include:

• An extension of the deadline in the CARES Act for states and localities to spend Coronavirus Relief Funds for one year. This is important since many existing rental assistance programs were funded via these dollars and there are significant unspent dollars that would have gone unused.
• An additional $300 per week in federal unemployment insurance and individual stimulus checks of $600 ($1,200 per couple and $600 per child). Together with the emergency rental assistance, these resources will be critical in helping renters meet their financial obligations. Reportedly, the first stimulus checks will be sent as early as next week.
• Extension of the employee retention tax credit.
• Setting at 4 percent the new construction/substantial rehab credit in the Low Income Housing Tax Credit program.
• Deductibility of expenses associated with Paycheck Protection Program loans (there are reportedly some guardrails on this. TBD).

In other COVID developments, the Advisory Committee on Immunization Practices (ACIP) met yesterday to discuss recommendations for allocating initial supplies of the COVID-19 vaccine.

On Sunday, news outlets reported that as we anticipated, the CDC’s Advisory Committee on Immunization Practices approved its recommendations for the next phases of the COVID-19 vaccination program by a vote of 13 to 1.

• In phase 1b, the ACIP recommends that “frontline essential workers” and persons 75 years and older be prioritized. The list of “frontline essential workers” includes, but is not limited to, firefighters, police, other first responders, teachers, support staff, daycare employees, correctional workers, and grocery store workers.
• In phase 1c, the ACIP recommends prioritization of the remainder of workers in industries deemed essential per CISA guidance, including rental housing industry professionals and adults 65 to 74 and adults 16 to 64 with high risk medical conditions be prioritized under phase 1c.

11/09/2020

With record setting statewide voter turnout, Tennessee election results reveal decisive victories for state Republicans in the General Assembly, U.S. Senate, and U.S. House. Initial reports indicate that approximately 3,049,371 Tennessee ballots were cast in the November 3 general election, which represents an increase of over 540,000 votes from the 2016 general election.  

Congressional Races:

U.S. Senate: Hagerty Wins by Substantial Margin Over Bradshaw

Republican candidate Bill Hagerty achieved 62.3% of the total vote, posting a significant win over Democratic challenger Marquita Bradshaw. While Hagerty faced a heated primary race against Nashville physician Manny Sethi, his path to victory in the general election proved to be void of major obstacles. Following an upset victory in the Democratic primary race against candidate James Mackler, Bradshaw failed to maintain the momentum necessary to prevail over Hagerty.

U.S. House: Republican Delegation Maintains 7-2 Majority in Tennessee, Harshbarger Wins Open Seat

Congressman Phil Roe’s announcement that he would not seek reelection to House District 1 left a single congressional seat open to fill in the general election. Republican candidate, and Kingsport native, Diana Harshbarger will replace Roe, receiving 74.8% of the total vote for House District 1. Harshbarger prevailed in a stacked primary race over fifteen Republican challengers, and will be the first female elected to represent the district in U.S. Congress. Incumbents in the remaining eight Tennessee congressional districts won reelection by the following margins:

• House District 02: Tim Burchett (R-Knoxville) 68%
• House District 03: Chuck Fleischmann (R-Chattanooga) 67%
• House District 04: Scott DesJarlais (R-Murfreesboro) 67%
• House District 05: Jim Cooper (D-Nashville) 100% (unopposed)
• House District 06: John Rose (R- Cookeville) 74%
• House District 07: Mark Green (R-Clarksville) 70%
• House District 08: David Kustoff (R- Memphis) 68%
• House District 09: Steve Cohen (D- Memphis) 77%

Tennessee General Assembly Races:

State House: Republicans Preserve Supermajority, Current House Makeup Remains Unchanged  

State Republicans upheld their existing supermajority in the Tennessee House of Representatives, leaving the composition of the chamber unchanged. The Tennessee House will be comprised of 73 Republican members, and 26 Democratic members. Following upset losses in state primaries and fulfillment of open seats, the 112^th General Assembly will welcome eight new Republican House members and two new Democratic House members. Incumbent representatives defeated in the August primary election include Rep. Micah Van Huss, Rep. Matthew Hill, Rep. Rick Tillis, and Rep. Rick Staples.

Serving as the only incumbent defeat of the night, Rep. John DeBerry of Memphis lost his race by a wide margin to Democratic challenger Torrey Harris, at 23% to 77% respectively. DeBerry was forced to run as an Independent candidate after the Tennessee Democratic Party’s executive committee voted to disqualify him from the ballot.

Republican John Gillespie prevailed over Democrat Gabby Salinas in an open race to succeed retiring Rep. Jim Coley (R-Bartlett) by 485 votes. In Knox County, Republican businessman Eddie Mannis defeated Democrat Virginia Couch by 10 percentage points to maintain the Republican seat following the retirement of Rep. Martin Daniel (R-Knoxville). Knoxville Democrat Gloria Johnson prevailed over Republican challenger Elaine Davis by 6 percentage points.

New Tennessee House members include the following:  

• District 03: Scotty Campbell (R)
• District 06: Tim Hicks (R)
• District 07: Rebecca Alexander (R)
• District 15: Sam McKenzie (D)
• District 16: Michelle Carringer (R)
• District 18: Eddie Mannis (R)
• District 76: Tandy Darby (R)
• District 90: Torrey Harris (D)
• District 92: Todd Warner (R)
• District 97: John Gillespie (R)

State Senate: Republican Incumbent Senator Steve Dickerson Loses Race to Democrat Heidi Campbell, Remaining Incumbent Candidates Win Reelection

Of the 33 State Senate districts, 17 districts were up for reelection in 2020. Most notably, Republican incumbent Senator Steve Dickerson lost his bid for reelection to Democratic challenger Heidi Campbell, by a margin of 48.3% to 51.7%. Campbell’s win follows a heated election campaign to flip the Nashville suburban district. The fight to retain District 10 in the Chattanooga area saw incumbent Senator Todd Gardenhire defeat Democratic opponent Glenn Scruggs by a margin of 53.2% to 46.8%. The remaining incumbents won their respective district races by substantial margins, while three districts remained uncontested, including District 2 (Senator Art Swann), District 8 (Senator Frank Niceley), and District 12 (Senator Ken Yager).

The retirement of veteran West Tennessee Senator Dolores Gresham resulted in an open seat for District 26. Republican candidate Page Walley won the seat comfortably, receiving 75.9% of the vote. Despite the loss of Dickerson’s seat, Senate Republicans continue to maintain their supermajority of 27 Republican seats to 6 Democratic seats.

To view a complete list of Tennessee election results on the state and federal level, please click here.

9/30/2020

Governor Bill Lee recently announced that he has extended the state of emergency through October 30, but all COVID-19 related restrictions on businesses and gatherings in 89 of Tennessee’s 95 counties will be repealed, effective October 1. Health departments in Davidson, Hamilton, Knox, Madison, Shelby and Sullivan counties will retain the discretion to implement local restrictions, including mask requirements and capacity limitations.

Governor Lee encouraged all Tennesseans to continue wearing masks, and confirmed that Executive Order 63 extends the authority of county mayors in 89 counties to impose mask mandates in their respective localities. In recent weeks, county mayors in Rutherford County and Wilson County announced their intention to allow local mask mandates to expire on September 30.

Executive Order No. 63  also extends certain, targeted provisions of previous executive orders through October 30, including directives that:

• Provide that persons with COVID-19 or COVID-19 symptoms are required to stay at home, and that employers may not require or allow employees with COVID-19 to work;
• Provide a framework for safe visitation for nursing home and long-term-care facilities;
• Allow for the reopening of senior centers, while providing that capacity must be limited to the extent necessary to accommodate adequate social distancing;
• Provide that employers, businesses, and venues are expected to comply with the Tennessee Pledge for operating safely (the 6 counties with locally run county health departments continue to have existing statutory authority to issue additional directives on businesses/venues);
• Continue access to take-out alcohol sales to encourage carryout and delivery orders;
• Allow broad access to telehealth services;
• Increase opportunities for people to easily join the healthcare workforce;
• Facilitate increased testing and health care capacity;
• Extend deadlines and suspend certain in-person continuing education, gathering, or inspection requirements to avoid unnecessary person-to-person contact; and
• Increase opportunities to work remotely where appropriate.

In addition, Governor Lee signed Executive Order No. 64 , which extends provisions that allow for remote notarization and witnessing of documents, and extends a previous order that allows government meetings to take place electronically, subject to certain transparency safeguards.

In regard to the status of school openings, Education Commissioner Penny Schwinn confirmed that 127 school districts are operating on a hybrid schedule of in person or remote learning based on parent choice, ten districts are operating fully in person, and three districts are operating remote only. Metro Nashville public schools will begin a staggered transition to in person learning this week, which will span throughout October and into next semester.  

8/13/2020

After convening for a special session at the request of Governor Lee, the Tennessee General Assembly passed a suite of legislation on Thursday which enacts broad based liability protection from COVID-19 related legal claims and expands telehealth coverage.

COVID-19 Liability Protection

The Tennessee COVID-19 Recovery Act implements comprehensive liability protection against legal claims stemming from loss, damage, injury or death arising from COVID-19. The Act specifies that an individual or legal entity (a “person”) will not be liable for loss, damage, injury, or death (collectively referred to hereinafter as an “injury”) that arises from COVID-19 unless the claimant proves by clear and convincing evidence that the person proximately caused the injury by an act or omission constituting gross negligence or willful misconduct.

“Person” is defined to comprise a wide array of covered entities including individuals, healthcare providers, sole proprietorships, corporations, limited liability companies, partnerships, trusts, religious organizations, associations, nonprofit organizations, and any other legal entity whether formed as a for-profit or not-for-profit entity.

This legislation creates a heightened pleading standard which requires a claimant in any action alleging injury arising from COVID-19 to:

1) File a verified complaint pleading specific facts with particularity from which a finder of fact could reasonably conclude that the injury was caused by the defendant’s gross negligence or willful misconduct; and

2) File a certificate of good faith stating that the claimant or claimant’s counsel has obtained a signed, written statement from a physician duly licensed to practice in the state or a contiguous bordering state and competent to express an opinion on exposure to or contraction of COVID-19, which confirms the physician’s belief that the alleged injury was caused by an alleged act or omission of the defendant or defendants.

A claimant’s failure to comply with the above described pleading requirements will, upon motion, make the claim subject to dismissal with prejudice.

In addition, the Act provides specific civil liability protection for governmental entities and public colleges and universities for any injury arising from COVID-19, unless the claimant successfully proves and complies with the pleading standards described above. 

The Act will apply to all prospectively filed claims arising from COVID-19 and take effect upon forthcoming signature by Governor Lee. In response to concerns raised about pending COVID-19 related lawsuits, legislators negotiated the addition of a “grandfather clause” that excludes claims occurring before August 3, 2020 in which:

1) A complaint or civil warrant was filed;

2) A notice of claim was filed with the Tennessee Claims Commission; or

3) Notice was satisfied under state law pertaining to healthcare liability claims.

For additional information on the Tennessee COVID-19 Recovery Act, please click here.

Expanded Telehealth Coverage

SB8003/HB8002 enacts various changes to laws governing electronic delivery of health care and its coverage under insurance policies.

Most notably, this legislation removes the present law provision whereby a health insurance entity is not required to pay total reimbursement for a telehealth encounter, including the use of telehealth equipment, in an amount that exceeds the amount that would be paid for the same service provided by a healthcare services provider in an in-person encounter. This bill instead provides that a health insurance entity must reimburse an originating site hosting a patient as part of a telehealth encounter an originating site fee in accordance with CMS telehealth services and at an amount established prior to the effective date of this bill by CMS.

In addition, this legislation enacts specific measures relative to provider based telemedicine, which mandate that a health insurance entity:

• Must provide coverage under a health insurance policy or contract for covered healthcare services delivered through provider-based telemedicine;
• Must reimburse a healthcare services provider for a healthcare service covered under an insured patient’s health insurance policy or contract that is provided through provider-based telemedicine without any distinction or consideration of the geographic location where the patient is located;
• Is prohibited from excluding from coverage a healthcare service solely because it is provided through provider-based telemedicine and is not provided through an in-person encounter between a healthcare services provider and a patient; and
• Must reimburse healthcare services providers who are out-of-network for provider-based telemedicine care services under the same reimbursement policies applicable to other out-of-network healthcare services providers; and
• Must provide coverage for healthcare services provided during a provider-based telemedicine encounter in a manner that is consistent with what the health insurance policy or contract provides for in-person encounters for the same service, and must reimburse for healthcare services provided during a provider-based telemedicine encounter without distinction or consideration of the geographic location where the patient is located.

Further, this legislation authorizes a health insurance entity to consider any remote patient monitoring service a covered medical service if the same service is covered by Medicare. For more information on SB8003/HB8002, please click here.

The adjournment of the Second Extraordinary Session marks the conclusion of the legislature’s agenda for the year. Members elected and incumbents reelected during the November general election will convene in January 2021 to begin a new legislative term as the 112th General Assembly.