How One Bill Became a Law*

Most folks know how a bill becomes a law. There are different summaries that lay out the process for Tennessee, along with some nice graphics. The best episode of School House Rock explains the process on a federal level. Beyond the charts and the difficult to follow explanations, this is how a bill actually becomes a law. To show how one bill became a law, we’d like to share how legislation passed the Tennessee General Assembly that TMEPA brought to the legislature. It deals with something that likely no one outside the Tennessee electric utility industry and Legislative Plaza even knew was being debated. Let’s go behind the scenes to see how HB1290 became a law*. 

Several Tennessee municipal electric systems had recently converted to energy authorities, entities that are nearly entirely separate from the city legally, financially and in several other ways. Four utilities (Jackson, Bolivar, Brownsville, Tullahoma) became energy authorities through private acts, or legislation the General Assembly passes that just affects one city, county or local government entity. A private act is legislation the General Assembly passes for the city or local government entity, but it still needs the local governing body to approve the changes in the legislation by a two-thirds majority. In 2016, Johnson City wanted to convert their municipal electric system to an energy authority, but it’s a home rule city isn’t subject to private acts. Therefore, a general bill was passed, which allowed just municipal electric utilities in home rule cities to become energy authorities. Under the bill, the process was very similar to a private act, including requiring the local governing body to approve creating an energy authority by a two-thirds vote. The bill also included language allowing energy authorities to offer broadband and telecommunications services, just like municipal electric systems can. The bill was codified at Title 7, Chapter 38. 

Every bill starts with an idea. Some legislators get them from constituents, personal experiences, interest groups, departments of state government, and so on. This bill came up during discussions among TMEPA member utilities and TMEPA staff. Late last year, another municipal electric utility began discussions about becoming an energy authority, but their governing structure also prevented a private act from being able to get the job done. Therefore, legislation would need to be filed to help this one utility. Discussions began that since legislation was going to be filed on energy authorities anyways, why not apply the general law to all municipal electric utilities. That way they all could take advantage of the state statute and wouldn’t need piecemeal legislation for one utility at a time. Draft legislation was put together to apply current law to all municipal electric utilities except the biggest four, and it included language for those utilities that also offer water, wastewater and gas utilities since many are offer more than just electric service.

Sometimes deciding who to ask to sponsor a bill is very strategic decision. What committee could the bill be referred to? Who on the committee would be good to sponsor the bill? Does a legislator already know a lot about the subject matter? What is the legislator’s reputation with other legislators? With TMEPA’s legislation, the representative and senator that represents the utility that needs the bill immediately were willing to sponsor the bill. Both legislators are smart and well-respected, so this decision was an easy one, and the legislators agreed to sponsor the bill. Once the bill language was finalized, they bill was put in official bill form and filed with the House and Senate.

Once a bill is filed, it’s available for the public to view it. For lobbyists during the bill filing period, all bills are examined to see if and how they would affect their clients or employers. Shortly after TMEPA’s bill was filed, representatives from private natural gas companies approached us about concerns about the bill language. They looked at the bill language and imagined municipal electric utilities would convert to energy authorities to begin offering natural gas service. They saw the bill as future competition, so they were opposed the legislation. Natural gas utility districts also opposed the bill fearing energy authorities would begin offering gas service or would begin acquiring natural gas utility districts. To attempt to ease their concerns, amendment language was proposed to limit the energy authorities that could offer natural gas service to just the eight municipal electric utilities that already offer natural gas service. On paper the language should have taken care of many of their concerns, but paranoia had already set in. Even with the proposed language, private gas companies and natural gas utility districts were still opposed to the legislation because it included language for gas utility service. So a choice had to be made: leave the language in the bill and attempt to fight through the opposition, or take the language out without losing the core reasons for the bill? The language dealing with an energy authority offering natural gas service was eventually taken out of the bill, which kept intact helping the utility that needed the bill in the first and still greatly expanded current law. With the gas provisions removed, a municipal electric system that offers gas service could not become an energy authority under this bill, but it would still be able to become one through a private act.

Many times, when legislation is examined by lobbyists, interest groups, and state departments, they won’t oppose bills, but they seek clarifications to make sure the bill does what the sponsors intend for it to do. This bill saw two of those types of clarifications. The first one was sought by cable interests to make sure an energy authority’s broadband and telecommunications services still had all the restrictions of other municipal broadband providers. Many of these safeguards were in the 2016 legislation, but a clarifying sentence was added to make sure they were comfortable with the bill. Also, the Comptroller’s staff wanted clarification for energy authorities that offers water and wastewater service would still be subject to the regular oversight and regulations other municipal water and wastewater systems face. Both of these clarifications didn’t harm the bill, so they just made the bill stronger and clearer.

Many bills at the state legislature are non-controversial, and technical legislation can be difficult for legislators to digest when they have to examine hundreds of bills. Oftentimes, unless something is well-publicized, unusual upon first examination, or a lobbyist or interest group lobbies against a bill, many legislators are willing to go along with legislation a bill sponsor wants to pass. Once natural gas utilities weren’t opposed to the bill any longer, and the cable industry and the comptroller got clarification language added, a legislator could rightly assume a bill has been examined by many parties and likely ready to being moving. This is particularly true if no one else is opposed to a bill. After several weeks of discussions and deferrals in committees, TMEPA’s bill began moving through the House and Senate. A Senate committee approved the bill, and a House subcommittee and committee approved the bill. The bill was on the Senate floor, but it saw a couple of deferrals, one of which was to make sure an influential senator was assured the bill wouldn’t affect a water utility in his district. Finally, it passed the Senate floor unanimously with an amendment. The bill was set to be scheduled for a House floor vote, but suddenly it was referred to the House Finance Subcommittee, often called the Black Hole because many bills go there to die. Luckily, TMEPA’s bill was just referred there because of some of the wording in the bills fiscal note, however it added nearly a month to how long it took to pass the bill. 

Finally, the bill was on the House floor, and it was getting late in the legislative session. The bill was likely to pass, but there was the rare possibility things could get hectic and the legislation not pass. During the debate on the House floor, a representative asked a question of the bill sponsor to clarify the bill’s intent. Unfortunately, the bill sponsor innocently answered incorrectly. The bill passed, and it included one of the clarifying amendments on the bill, but it was only included in the House version. The incorrect answer lead to the bill sponsor needing to clarify his remarks, and the bill needed to be held up in the Senate which needed to concur in the House amendment. All this happened as the legislature was looking to adjourn in a few days and in the middle of heated budget discussions.

Luckily, the incorrect answer wasn’t an issue, so the bill was ready for the Senate to concur in a singular House amendment. Even this took an extra day or two to get on the Senate calendar, but it was added for the last day of session. Waiting until the last day of session to pass a bill is not the best strategy, but the legislative process is what it. The Senate agreed the House amendment, and finally the legislature had passed the bill. 

Now that the legislature has passed the bill, now what? First, it’s not a law until the governor signs the bill, which he is likely to do within a couple weeks. Second, it’s important to get the bill language and information out to utilities that could take advantage of the bill. This information sharing could take months in many different forms, but it’s needed so utilities know this is another tool they can use to improve themselves.