Tennessee State Capitol

If you talk to business owners today, many will tell you that costly and complex regulations are just as much of a problem for them, if not more so, than high taxes. The Competitive Enterprise Institute has released a report documenting how the federal regulatory costs are now greater than federal personal and corporate income tax collections combined. Burdensome state regulations are also a major problem. Some smart, forward thinking state legislators are looking for ways to address the problem.

Tennessee are currently looking to implement an important safeguard against rising regulatory costs. House Bill 1739, a bill introduced by Tennessee Rep. Martin Daniel (R-Knoxville), would dramatically reduce the ability of unelected state bureaucrats to enact costly new regulations that harm consumers and businesses in the Volunteer State. If enacted, HB 1739 would require that any proposed regulation with an economic impact of more than one million dollars over three years would need legislative approval in order to take effect.

Rep. Daniel’s bill is sponsored by 48 of the 98 members of the Tennessee House of Representatives. If HB 1739 if approved, Tennessee would be only the second state in the country to pass such a law at the state level, following Wisconsin, which passed a similar law last year. Like Rep. Daniel’s bill now pending in Tennessee, that Wisconsin bill, which was introduced by Senator Devin LeMahieu (R-Oostburg) and Representative Adam Neylon (R-Pewaukee), takes the same approach to tackling regulatory overreach as the federal REINS Act (which has passed the House but stalled in the Senate, since Republicans don’t have the 60 votes necessary for passage in that chamber). Rep. Daniel’s bill, however, institutes a lower economic impact threshold beyond which legislative approval is needed. The recently-enacted Wisconsin REINS Act requires legislative approval regulations with an economic impact greater than $10 million, which is ten times the threshold set by Rep. Daniel’s bill.

Americans for Tax Reform will continue to urge Tennessee lawmakers to support and pass HB 1739. If lawmakers in other states are looking for a ways to protect their constituents from costly, growth-reducing regulations, the state-level versions of the REINS Act that passed in Wisconsin and is now pending in Tennessee is a great model to adopt.