2026 Legislative Recap – 114th Tennessee General Assembly, Second Session

Firm Publication

The 114th General Assembly adjourned sine die on Thursday, April 23, after a dynamic and spirited legislative session. The session kicked off with a devastating ice storm in Middle Tennessee, resulting in an extended but condensed bill-filing period, and ended with an unprecedented number of conference committees, spurring lively debates on the House and Senate floors.

Budget Overview

As the only constitutionally mandated action of the General Assembly, the budget was, once again, front and center. Notably, the House paused other standing committee meetings early in the session to allow members to focus all attention on budget hearings from the various state departments and agencies. The $58.3 billion budget was tighter than in previous years, leading to unique approaches to generating revenue, including the institution of a $10 fee on all money transferred by a licensed money transmitter from the state to a location outside of the United States or its territories and a 2% fee on all such transactions over $500 (SB2166/HB2502). Other measures, such as a proposed tax on corporate advertising services, did not advance.

Highlights from the budget include:

  • $400 million to the Tennessee Department of Transportation (TDOT) for infrastructure needs
  • $339 million for public education
  • $350 million for the construction of a new College of Medicine Interdisciplinary Building at the University of Tennessee Health Science Center in Memphis
  • $205 million to support healthcare initiatives
  • $165 million to renovate and replace rest areas
  • $155 million to expand Education Freedom Scholarships by 15,000
  • $86.6 million for state parks
  • $81.2 million for commercial and general aviation
  • $50 million to enhance crime prevention and public safety in Memphis
  • $44.2 million to the Governor’s Response and Recovery Fund
  • $43 million to accelerate Tennessee’s quantum computing industry
  • $40 million for a bridge construction project in Montgomery County to support Korea Zinc’s $6.6 billion manufacturing investment
  • $38.5 million in artificial intelligence (AI) technology for the state government
  • $25 million for further investment in the Nuclear Energy Fund
  • $20 million for a new affordable workforce housing pilot program
  • $20 million to the rainy-day fund

Healthcare Policy Shifts – CON Reduction & PBM Changes

The General Assembly took additional steps this year to reduce the number of healthcare services that require prior state approval before opening or expanding. Specifically, SB1369/HB0819 removes Certificate of Need (CON) requirements for several key services, including acute care hospitals, satellite emergency departments, and cardiac catheterization services. Instead of requiring a “need-based” approval from the state, these facilities will be allowed to develop more freely, subject to standard licensure and regulatory oversight.

The legislation phases in these changes over time, with the sections related to satellite emergency departments and cardiac catheterization facilities taking effect July 1, 2028, and the sections related to acute care hospitals taking effect July 1, 2030. In certain cases, new acute care hospitals could be subject to participation in TennCare medical assistance programs and the provision of charity care comparable to existing hospitals.

By scaling back CON requirements, the state is opening the door for increased competition and potential expansion of services, particularly in growing or underserved areas. At the same time, the added licensure requirements signal an effort to ensure that new providers still contribute to the broader healthcare system, especially for TennCare and charity care patients.

In one of the more closely watched bills this year, the legislature took aim at the growing consolidation between health insurers, pharmacy benefit managers (PBMs), and pharmacies by limiting how those entities can be structured and operated in Tennessee. SB2040/HB1959, dubbed the “Freedom, Access, and Integrity in Registered Pharmacy (FAIR Rx) Act,” prohibits a single entity from owning or controlling a pharmacy while also owning or controlling a health insurer or PBM. In practice, this is designed to prevent vertically integrated models where the same company controls pricing, reimbursement, and dispensing of prescription drugs. The law includes a transition period, giving affected entities time to unwind ownership structures, with most provisions taking effect July 1, 2028. It also includes targeted exceptions, such as allowing hospitals and employers to operate pharmacies for their own employees.

Unfinished Business: Health Insurance Reform

A coalition of healthcare providers and hospitals came together this year on high-profile efforts to reform health insurance practices. While multiple pieces of legislation were introduced, none ultimately advanced far enough to be enacted. Taken together, these proposals focused on a few key areas of concern related to current health insurance practices, namely fair claims processing, transparency, and accountability.

Legislation aimed at instituting more guardrails around the fair processing of claims largely focused on establishing clearer timelines for payments and limiting practices like downcoding without sufficient clinical review. There was also a strong emphasis on prior authorization, including efforts to require longer-lasting approvals for chronic conditions.

Transparency and accountability in payor decision-making were also central themes, with proposals aimed at requiring greater disclosure around reimbursement decisions and ensuring that downcoding determinations, including those supported by AI, involve appropriate human oversight. Additional proposals addressed insurer-provider relationships, including limits on unilateral contract changes and the creation of new avenues for oversight and dispute resolution. Finally, several efforts targeted network adequacy, seeking to ensure insurers maintain sufficient provider networks and increasing state involvement when networks fall short or materially change.

While these bills did not pass, they highlight a continued and growing focus on payor practices at the legislature. Many of these concepts – particularly around prior authorization, reimbursement, and network adequacy – are likely to return in future sessions.

Expanded State Oversight of Local & Regional Entities

The arrival of winter storm Fern in late January and the recovery response by impacted utilities spurred multiple bills aimed at shifting the power dynamics between municipal electric companies and their rural electric cooperative counterparts, as well as the boards that govern them. Culminating in the last conference committee of the session, deliberations ultimately resulted in the passage of SB2102/HB2592, which creates a one-year moratorium on non-consensual transfers of property or service rights between municipal systems and cooperatives starting September 1, 2026. The bill also requires additional board seats when a municipal utility reaches certain customer thresholds outside its city limits or in other counties. The governance part of the legislation only applies to Nashville (NES) and Memphis (MLGW) and sets parameters around who appoints the additional members, eligibility, and terms.

Not unlike recent years, the General Assembly again passed legislation giving the state oversight of programs seen as not performing satisfactorily. SB0714/HB0662 creates an educational oversight board for local education agencies (LEA) that are deemed to be underperforming and requires the oversight board to operate in and oversee the LEA with broad authority for four years, with a two-year renewal option. Only the Memphis school system would currently meet the criteria.

Similarly, the body also passed legislation authorizing state oversight if a local district attorney does not prosecute alleged crimes. Aimed at Shelby County District Attorney Steve Mulroy, the bill allows the Attorney General to conduct a study of a district attorney general’s disposition of charges and other matters within the 30th judicial district and to petition the state Supreme Court to appoint a pro tem attorney to handle cases.

Citing a matter of statewide concern, the legislature passed two bills authorizing the state greater influence in matters of significant transportation infrastructure. SB2473/HB2507 vacates and reconstitutes boards of commissioners for metropolitan and regional airport authorities, adding seats for appointees of the governor and the speakers of the House and Senate.

Similarly, SB2202/HB2450 enacts the Subterranean Transportation Infrastructure Coordination Act, which creates an authority of the same name and establishes an 11-member board to govern the authority. The bill also established the Governor’s Infrastructure Coordination Council to provide coordinated review of large-scale subterranean transportation infrastructure projects among state agencies and local government entities associated with multi-jurisdictional permitting. The bill outlines the powers of the authority and outlines that the state has exclusive jurisdiction over subsurface construction. The bill was brought in response to the Boring Company’s Music City Loop, which is currently under construction and will allow Tesla vehicles to travel between the Nashville International Airport and downtown Nashville via a subterranean tunnel.

School Choice Expansion & Testing Changes

This year’s education initiatives included a significant expansion of the state’s school voucher program, paired with limited new oversight measures.

SB2247/HB2532 increases the number of available “education freedom scholarships,” authorizing up to 35,000 scholarships for the 2026–2027 school year and expanding eligibility over time. The legislation also attempts to address concerns from local school districts by providing temporary financial backfill when students leave traditional public schools for voucher-supported options, though that support changes over time and is tied to student disenrollment and TISA funding formulas.

On the accountability side, SB1585/HB1881 alters testing and reporting requirements for participating students and schools. Scholarship recipients were previously required to take the state’s TCAP test, but the new law allows participating schools to administer either a nationally standardized test or TCAP. Aggregate results will still be reported to the state for analysis; however, opponents argue this change weakens the state’s ability to measure program effectiveness because it limits direct comparisons between public and private school student performance.

Expansion of Deadly Force Protections for Property

SB1847/HB1802 expands the circumstances under which individuals may use deadly force under Tennessee law by broadening the state’s self-defense statutes to allow the use of deadly force to protect property in certain situations. Specifically, the bill permits deadly force when a person reasonably believes it is necessary to prevent serious crimes such as arson, burglary, robbery, or aggravated robbery, and when there is no other reasonable means to protect the person’s property. The law also requires that the individual not be engaged in criminal activity and that the threat involves an imminent risk of death, serious bodily injury, or similar harm if lesser force is used.

This is a notable expansion of Tennessee’s use-of-force laws, particularly by extending deadly force justification beyond traditional self-defense scenarios. Supporters argue it strengthens individuals’ ability to protect their property and personal safety, while critics have raised concerns about how broadly these provisions may be interpreted in practice.

Prohibitions on Kratom & Nitrous Oxide

In a continuing effort to crack down on emerging and commonly misused substances, the legislature took a particular focus on kratom and nitrous oxide. SB1656/HB1649 establishes new criminal offenses related to kratom, making it illegal to possess, manufacture, deliver, or sell the substance, with penalties ranging from misdemeanors to felonies depending on the conduct. The bill also adds kratom to required toxicology testing in certain overdose and medical situations, signaling increased concern from lawmakers about its role in substance abuse and public health outcomes.

Separately, SB1843/HB1644 prohibits the retail sale of nitrous oxide and imposes civil penalties and potential license revocation for repeat violations. The legislation also creates a felony offense for knowingly distributing nitrous oxide when there is reason to believe it will be used for intoxication, while preserving exceptions for legitimate medical, dental, and commercial uses.

Reducing Regulatory Burdens & Cutting Red Tape

The “Regulatory Freedom Act of 2026” (SB2199/HB1913) is a comprehensive effort to reduce regulatory burdens and increase oversight of the state’s rulemaking process. At a high level, the legislation imposes new requirements on state agencies when adopting rules that affect the regulated community. State departments and agencies must provide advance notice to impacted industries, actively solicit feedback, and develop fiscal impact statements that estimate the real cost of compliance for businesses and trade groups. These changes are intended to ensure that affected stakeholders have a more meaningful role in shaping new regulations before they are finalized.

The legislation also increases legislative involvement in the rulemaking process. If a proposed rule is expected to have a negative economic impact exceeding $1 million over a five-year period, the rule must receive approval by both chambers of the General Assembly before taking effect. Additional reporting requirements will track the cumulative impact of regulations across state agencies, providing a broader view of how regulatory actions affect the business community over time.

Expanded Immigration Enforcement Efforts

The General Assembly advanced several measures this year aimed at strengthening immigration enforcement and limiting the ability of individuals without lawful status to remain in or access certain systems in Tennessee. These measures reflect a broader effort by the state to increase its role in immigration-related enforcement and to align state systems more closely with federal immigration status requirements.

SB2223/HB2219 requires local law enforcement to play a more active role in federal immigration enforcement. Specifically, sheriffs are directed to enter into agreements with federal authorities under an available federal 287(g) program to assist in the enforcement of federal immigration law. There are currently four available 287(g) programs: (1) a jail enforcement model identifying deportable individuals in custody of local law enforcement; (2) a warrant service officer model allowing jail staff to serve administrative warrants; (3) a task force model involving street-level, community-based immigration policing; and (4) a tribal task force model allowing tribal police to enforce immigration laws. Failure to enter into an available 287(g) program could result in the state withholding all funds allotted to the sheriff’s office, including state-shared taxes.

SB1779/HB1704 creates new state-level criminal offenses for individuals who remain in Tennessee or re-enter the state after being subject to a federal order of removal, with violations generally classified as Class A misdemeanors. However, the legislation includes provisions that delay the enforcement of certain sections unless federal law changes.

SB1889/HB1708 requires applicants to pass the driver’s license exam in English to obtain an unrestricted license. Applicants who are unable to read or speak English may take the written exam in another language, but any license issued under those circumstances is non-renewable and valid for only 36 months. Upon expiration, the applicant must retake the written exam in English without the use of dictionaries, interpreters, or other assistance.

Laying the Groundwork for AI Policy

SB1493/HB1455 takes an initial step toward addressing AI by focusing on a study rather than immediate regulation. The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) will conduct a comprehensive review of AI and its potential risks and must submit its findings and recommendations to state leadership by January 31, 2027, providing a foundation for potential future legislative action. The study will examine issues such as threats to public safety, risks of bodily harm or property damage, and concerns related to AI systems providing inappropriate or harmful guidance, especially to minors. It will also explore best practices, existing national and international standards, and potential approaches to regulating or restricting certain high-risk uses of AI, including chatbot interactions that mimic human behavior in sensitive contexts like mental health.

While the General Assembly opted to study the issue this year, a separate bill provided a preview of the types of policies that may emerge from that process. SB2171/HB1898 would have established a regulatory framework for large AI chatbot providers, including requirements to develop and publish child safety plans, assess and mitigate risks to minors, disclose certain safety-related information, and report incidents involving harm to users. The bill also contemplated enforcement by the Attorney General and civil penalties for noncompliance, reflecting a more comprehensive approach to AI oversight.

Data Center Development & Infrastructure

SB2128/HB1847 addresses the rapid growth of data centers and the significant infrastructure demands that come with them by establishing new rules governing how the costs of electrical infrastructure are allocated for large-scale projects. The bill prohibits municipalities and electric utilities from subsidizing the cost of infrastructure needed to serve data centers, instead requiring developers to bear the costs with limited exceptions for broader system improvements.

The legislation also creates a framework allowing data centers to obtain power from independent power producers, including through direct connections or agreements with utilities, subject to applicable federal law. This reflects an effort to provide flexibility in meeting the substantial energy demands associated with these facilities while protecting existing ratepayers from increased costs. As demand for data centers continues to grow, particularly with the expansion of AI, this legislation positions Tennessee to accommodate the growth while attempting to limit financial impacts on utilities and existing customers.

Solid Waste & Recycling Policy Updates

Solid waste and recycling continue to be front and center in the environmental space, with several bills filed attempting to address different facets of the complex subject matter. SB2547/HB2516 requires solid waste regions to submit updated region plans to the Tennessee Department of Environment and Conservation (TDEC) by July 1, 2028, and every ten years thereafter, and directs TDEC to promulgate rules to provide more guidance on what should be included in the plans. This timeline corresponds to the new 2025-2035 state solid waste plan that is set to be finalized in the upcoming months.

Two separate bills were filed to designate river segments as Class II pastoral river areas under the Scenic Rivers Act. This classification automatically prohibits a landfill within two miles of either side of the designated segment and puts certain land use restrictions on the designated segments if boundaries are set by the commissioner. HB1510/SB1590 expands the designation of the Duck and Buffalo rivers to the entirety of both rivers, as well as certain tributaries. An amendment was added on the House floor to exempt any landfill with a valid permit on the effective date of the act; however, the amendment was stripped off due to concerns from the Attorney General, and the bill was passed in its original form. SB2172/HB2202 would have designated the Big South Fork of the Cumberland River in Scott County and prohibited any new landfill in the entire county. The sponsor brought the bill to stop a landfill project that was well into the permit recertification process, and the bill ultimately failed to pass the House Agriculture and Natural Resources Committee.

Once again, the Tennessee Waste to Jobs Act, a version of extended producer responsibility (EPR) for packaging, was presented and discussed. This came after several presentations, both for and against the concept, to the Solid Waste Advisory Task Force, as well as the House and Senate committees. At the eleventh  hour, Republican Senator Steve Southerland took over as sponsor in an attempt to make the legislation more palatable to opponents; however, he removed the bill from consideration after expressing intent to continue to work with stakeholders over the summer.

SB1793/HB2518 establishes the Recycling Market Development and Diversion Advisory Council and expands the existing Office of Cooperative Marketing for Recyclables. The Council will be comprised of representatives from various aspects of the recycling supply chain and, along with the Office of Cooperative Marketing for Recyclables, seeks to develop and enhance the recycling market in Tennessee by recommending best practices, identifying opportunities, and researching market needs.

Conclusion

While the General Assembly has adjourned, many of the issues outlined above will continue to develop in the months ahead. We welcome the opportunity to assist with any questions, strategic planning, or advocacy efforts related to these or other emerging matters as we begin preparing for the next session.

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Firm Publication

The 114th General Assembly adjourned sine die on Thursday, April 23, after a dynamic and spirited legislative session. The session kicked off with a devastating ice storm in Middle Tennessee, resulting in an extended but condensed bill-filing period, and ended with an unprecedented number of conference committees, spurring lively debates on the House and Senate floors.

Budget Overview

As the only constitutionally mandated action of the General Assembly, the budget was, once again, front and center. Notably, the House paused other standing committee meetings early in the session to allow members to focus all attention on budget hearings from the various state departments and agencies. The $58.3 billion budget was tighter than in previous years, leading to unique approaches to generating revenue, including the institution of a $10 fee on all money transferred by a licensed money transmitter from the state to a location outside of the United States or its territories and a 2% fee on all such transactions over $500 (SB2166/HB2502). Other measures, such as a proposed tax on corporate advertising services, did not advance.

Highlights from the budget include:

  • $400 million to the Tennessee Department of Transportation (TDOT) for infrastructure needs
  • $339 million for public education
  • $350 million for the construction of a new College of Medicine Interdisciplinary Building at the University of Tennessee Health Science Center in Memphis
  • $205 million to support healthcare initiatives
  • $165 million to renovate and replace rest areas
  • $155 million to expand Education Freedom Scholarships by 15,000
  • $86.6 million for state parks
  • $81.2 million for commercial and general aviation
  • $50 million to enhance crime prevention and public safety in Memphis
  • $44.2 million to the Governor’s Response and Recovery Fund
  • $43 million to accelerate Tennessee’s quantum computing industry
  • $40 million for a bridge construction project in Montgomery County to support Korea Zinc’s $6.6 billion manufacturing investment
  • $38.5 million in artificial intelligence (AI) technology for the state government
  • $25 million for further investment in the Nuclear Energy Fund
  • $20 million for a new affordable workforce housing pilot program
  • $20 million to the rainy-day fund

Healthcare Policy Shifts – CON Reduction & PBM Changes

The General Assembly took additional steps this year to reduce the number of healthcare services that require prior state approval before opening or expanding. Specifically, SB1369/HB0819 removes Certificate of Need (CON) requirements for several key services, including acute care hospitals, satellite emergency departments, and cardiac catheterization services. Instead of requiring a “need-based” approval from the state, these facilities will be allowed to develop more freely, subject to standard licensure and regulatory oversight.

The legislation phases in these changes over time, with the sections related to satellite emergency departments and cardiac catheterization facilities taking effect July 1, 2028, and the sections related to acute care hospitals taking effect July 1, 2030. In certain cases, new acute care hospitals could be subject to participation in TennCare medical assistance programs and the provision of charity care comparable to existing hospitals.

By scaling back CON requirements, the state is opening the door for increased competition and potential expansion of services, particularly in growing or underserved areas. At the same time, the added licensure requirements signal an effort to ensure that new providers still contribute to the broader healthcare system, especially for TennCare and charity care patients.

In one of the more closely watched bills this year, the legislature took aim at the growing consolidation between health insurers, pharmacy benefit managers (PBMs), and pharmacies by limiting how those entities can be structured and operated in Tennessee. SB2040/HB1959, dubbed the “Freedom, Access, and Integrity in Registered Pharmacy (FAIR Rx) Act,” prohibits a single entity from owning or controlling a pharmacy while also owning or controlling a health insurer or PBM. In practice, this is designed to prevent vertically integrated models where the same company controls pricing, reimbursement, and dispensing of prescription drugs. The law includes a transition period, giving affected entities time to unwind ownership structures, with most provisions taking effect July 1, 2028. It also includes targeted exceptions, such as allowing hospitals and employers to operate pharmacies for their own employees.

Unfinished Business: Health Insurance Reform

A coalition of healthcare providers and hospitals came together this year on high-profile efforts to reform health insurance practices. While multiple pieces of legislation were introduced, none ultimately advanced far enough to be enacted. Taken together, these proposals focused on a few key areas of concern related to current health insurance practices, namely fair claims processing, transparency, and accountability.

Legislation aimed at instituting more guardrails around the fair processing of claims largely focused on establishing clearer timelines for payments and limiting practices like downcoding without sufficient clinical review. There was also a strong emphasis on prior authorization, including efforts to require longer-lasting approvals for chronic conditions.

Transparency and accountability in payor decision-making were also central themes, with proposals aimed at requiring greater disclosure around reimbursement decisions and ensuring that downcoding determinations, including those supported by AI, involve appropriate human oversight. Additional proposals addressed insurer-provider relationships, including limits on unilateral contract changes and the creation of new avenues for oversight and dispute resolution. Finally, several efforts targeted network adequacy, seeking to ensure insurers maintain sufficient provider networks and increasing state involvement when networks fall short or materially change.

While these bills did not pass, they highlight a continued and growing focus on payor practices at the legislature. Many of these concepts – particularly around prior authorization, reimbursement, and network adequacy – are likely to return in future sessions.

Expanded State Oversight of Local & Regional Entities

The arrival of winter storm Fern in late January and the recovery response by impacted utilities spurred multiple bills aimed at shifting the power dynamics between municipal electric companies and their rural electric cooperative counterparts, as well as the boards that govern them. Culminating in the last conference committee of the session, deliberations ultimately resulted in the passage of SB2102/HB2592, which creates a one-year moratorium on non-consensual transfers of property or service rights between municipal systems and cooperatives starting September 1, 2026. The bill also requires additional board seats when a municipal utility reaches certain customer thresholds outside its city limits or in other counties. The governance part of the legislation only applies to Nashville (NES) and Memphis (MLGW) and sets parameters around who appoints the additional members, eligibility, and terms.

Not unlike recent years, the General Assembly again passed legislation giving the state oversight of programs seen as not performing satisfactorily. SB0714/HB0662 creates an educational oversight board for local education agencies (LEA) that are deemed to be underperforming and requires the oversight board to operate in and oversee the LEA with broad authority for four years, with a two-year renewal option. Only the Memphis school system would currently meet the criteria.

Similarly, the body also passed legislation authorizing state oversight if a local district attorney does not prosecute alleged crimes. Aimed at Shelby County District Attorney Steve Mulroy, the bill allows the Attorney General to conduct a study of a district attorney general’s disposition of charges and other matters within the 30th judicial district and to petition the state Supreme Court to appoint a pro tem attorney to handle cases.

Citing a matter of statewide concern, the legislature passed two bills authorizing the state greater influence in matters of significant transportation infrastructure. SB2473/HB2507 vacates and reconstitutes boards of commissioners for metropolitan and regional airport authorities, adding seats for appointees of the governor and the speakers of the House and Senate.

Similarly, SB2202/HB2450 enacts the Subterranean Transportation Infrastructure Coordination Act, which creates an authority of the same name and establishes an 11-member board to govern the authority. The bill also established the Governor’s Infrastructure Coordination Council to provide coordinated review of large-scale subterranean transportation infrastructure projects among state agencies and local government entities associated with multi-jurisdictional permitting. The bill outlines the powers of the authority and outlines that the state has exclusive jurisdiction over subsurface construction. The bill was brought in response to the Boring Company’s Music City Loop, which is currently under construction and will allow Tesla vehicles to travel between the Nashville International Airport and downtown Nashville via a subterranean tunnel.

School Choice Expansion & Testing Changes

This year’s education initiatives included a significant expansion of the state’s school voucher program, paired with limited new oversight measures.

SB2247/HB2532 increases the number of available “education freedom scholarships,” authorizing up to 35,000 scholarships for the 2026–2027 school year and expanding eligibility over time. The legislation also attempts to address concerns from local school districts by providing temporary financial backfill when students leave traditional public schools for voucher-supported options, though that support changes over time and is tied to student disenrollment and TISA funding formulas.

On the accountability side, SB1585/HB1881 alters testing and reporting requirements for participating students and schools. Scholarship recipients were previously required to take the state’s TCAP test, but the new law allows participating schools to administer either a nationally standardized test or TCAP. Aggregate results will still be reported to the state for analysis; however, opponents argue this change weakens the state’s ability to measure program effectiveness because it limits direct comparisons between public and private school student performance.

Expansion of Deadly Force Protections for Property

SB1847/HB1802 expands the circumstances under which individuals may use deadly force under Tennessee law by broadening the state’s self-defense statutes to allow the use of deadly force to protect property in certain situations. Specifically, the bill permits deadly force when a person reasonably believes it is necessary to prevent serious crimes such as arson, burglary, robbery, or aggravated robbery, and when there is no other reasonable means to protect the person’s property. The law also requires that the individual not be engaged in criminal activity and that the threat involves an imminent risk of death, serious bodily injury, or similar harm if lesser force is used.

This is a notable expansion of Tennessee’s use-of-force laws, particularly by extending deadly force justification beyond traditional self-defense scenarios. Supporters argue it strengthens individuals’ ability to protect their property and personal safety, while critics have raised concerns about how broadly these provisions may be interpreted in practice.

Prohibitions on Kratom & Nitrous Oxide

In a continuing effort to crack down on emerging and commonly misused substances, the legislature took a particular focus on kratom and nitrous oxide. SB1656/HB1649 establishes new criminal offenses related to kratom, making it illegal to possess, manufacture, deliver, or sell the substance, with penalties ranging from misdemeanors to felonies depending on the conduct. The bill also adds kratom to required toxicology testing in certain overdose and medical situations, signaling increased concern from lawmakers about its role in substance abuse and public health outcomes.

Separately, SB1843/HB1644 prohibits the retail sale of nitrous oxide and imposes civil penalties and potential license revocation for repeat violations. The legislation also creates a felony offense for knowingly distributing nitrous oxide when there is reason to believe it will be used for intoxication, while preserving exceptions for legitimate medical, dental, and commercial uses.

Reducing Regulatory Burdens & Cutting Red Tape

The “Regulatory Freedom Act of 2026” (SB2199/HB1913) is a comprehensive effort to reduce regulatory burdens and increase oversight of the state’s rulemaking process. At a high level, the legislation imposes new requirements on state agencies when adopting rules that affect the regulated community. State departments and agencies must provide advance notice to impacted industries, actively solicit feedback, and develop fiscal impact statements that estimate the real cost of compliance for businesses and trade groups. These changes are intended to ensure that affected stakeholders have a more meaningful role in shaping new regulations before they are finalized.

The legislation also increases legislative involvement in the rulemaking process. If a proposed rule is expected to have a negative economic impact exceeding $1 million over a five-year period, the rule must receive approval by both chambers of the General Assembly before taking effect. Additional reporting requirements will track the cumulative impact of regulations across state agencies, providing a broader view of how regulatory actions affect the business community over time.

Expanded Immigration Enforcement Efforts

The General Assembly advanced several measures this year aimed at strengthening immigration enforcement and limiting the ability of individuals without lawful status to remain in or access certain systems in Tennessee. These measures reflect a broader effort by the state to increase its role in immigration-related enforcement and to align state systems more closely with federal immigration status requirements.

SB2223/HB2219 requires local law enforcement to play a more active role in federal immigration enforcement. Specifically, sheriffs are directed to enter into agreements with federal authorities under an available federal 287(g) program to assist in the enforcement of federal immigration law. There are currently four available 287(g) programs: (1) a jail enforcement model identifying deportable individuals in custody of local law enforcement; (2) a warrant service officer model allowing jail staff to serve administrative warrants; (3) a task force model involving street-level, community-based immigration policing; and (4) a tribal task force model allowing tribal police to enforce immigration laws. Failure to enter into an available 287(g) program could result in the state withholding all funds allotted to the sheriff’s office, including state-shared taxes.

SB1779/HB1704 creates new state-level criminal offenses for individuals who remain in Tennessee or re-enter the state after being subject to a federal order of removal, with violations generally classified as Class A misdemeanors. However, the legislation includes provisions that delay the enforcement of certain sections unless federal law changes.

SB1889/HB1708 requires applicants to pass the driver’s license exam in English to obtain an unrestricted license. Applicants who are unable to read or speak English may take the written exam in another language, but any license issued under those circumstances is non-renewable and valid for only 36 months. Upon expiration, the applicant must retake the written exam in English without the use of dictionaries, interpreters, or other assistance.

Laying the Groundwork for AI Policy

SB1493/HB1455 takes an initial step toward addressing AI by focusing on a study rather than immediate regulation. The Tennessee Advisory Commission on Intergovernmental Relations (TACIR) will conduct a comprehensive review of AI and its potential risks and must submit its findings and recommendations to state leadership by January 31, 2027, providing a foundation for potential future legislative action. The study will examine issues such as threats to public safety, risks of bodily harm or property damage, and concerns related to AI systems providing inappropriate or harmful guidance, especially to minors. It will also explore best practices, existing national and international standards, and potential approaches to regulating or restricting certain high-risk uses of AI, including chatbot interactions that mimic human behavior in sensitive contexts like mental health.

While the General Assembly opted to study the issue this year, a separate bill provided a preview of the types of policies that may emerge from that process. SB2171/HB1898 would have established a regulatory framework for large AI chatbot providers, including requirements to develop and publish child safety plans, assess and mitigate risks to minors, disclose certain safety-related information, and report incidents involving harm to users. The bill also contemplated enforcement by the Attorney General and civil penalties for noncompliance, reflecting a more comprehensive approach to AI oversight.

Data Center Development & Infrastructure

SB2128/HB1847 addresses the rapid growth of data centers and the significant infrastructure demands that come with them by establishing new rules governing how the costs of electrical infrastructure are allocated for large-scale projects. The bill prohibits municipalities and electric utilities from subsidizing the cost of infrastructure needed to serve data centers, instead requiring developers to bear the costs with limited exceptions for broader system improvements.

The legislation also creates a framework allowing data centers to obtain power from independent power producers, including through direct connections or agreements with utilities, subject to applicable federal law. This reflects an effort to provide flexibility in meeting the substantial energy demands associated with these facilities while protecting existing ratepayers from increased costs. As demand for data centers continues to grow, particularly with the expansion of AI, this legislation positions Tennessee to accommodate the growth while attempting to limit financial impacts on utilities and existing customers.

Solid Waste & Recycling Policy Updates

Solid waste and recycling continue to be front and center in the environmental space, with several bills filed attempting to address different facets of the complex subject matter. SB2547/HB2516 requires solid waste regions to submit updated region plans to the Tennessee Department of Environment and Conservation (TDEC) by July 1, 2028, and every ten years thereafter, and directs TDEC to promulgate rules to provide more guidance on what should be included in the plans. This timeline corresponds to the new 2025-2035 state solid waste plan that is set to be finalized in the upcoming months.

Two separate bills were filed to designate river segments as Class II pastoral river areas under the Scenic Rivers Act. This classification automatically prohibits a landfill within two miles of either side of the designated segment and puts certain land use restrictions on the designated segments if boundaries are set by the commissioner. HB1510/SB1590 expands the designation of the Duck and Buffalo rivers to the entirety of both rivers, as well as certain tributaries. An amendment was added on the House floor to exempt any landfill with a valid permit on the effective date of the act; however, the amendment was stripped off due to concerns from the Attorney General, and the bill was passed in its original form. SB2172/HB2202 would have designated the Big South Fork of the Cumberland River in Scott County and prohibited any new landfill in the entire county. The sponsor brought the bill to stop a landfill project that was well into the permit recertification process, and the bill ultimately failed to pass the House Agriculture and Natural Resources Committee.

Once again, the Tennessee Waste to Jobs Act, a version of extended producer responsibility (EPR) for packaging, was presented and discussed. This came after several presentations, both for and against the concept, to the Solid Waste Advisory Task Force, as well as the House and Senate committees. At the eleventh  hour, Republican Senator Steve Southerland took over as sponsor in an attempt to make the legislation more palatable to opponents; however, he removed the bill from consideration after expressing intent to continue to work with stakeholders over the summer.

SB1793/HB2518 establishes the Recycling Market Development and Diversion Advisory Council and expands the existing Office of Cooperative Marketing for Recyclables. The Council will be comprised of representatives from various aspects of the recycling supply chain and, along with the Office of Cooperative Marketing for Recyclables, seeks to develop and enhance the recycling market in Tennessee by recommending best practices, identifying opportunities, and researching market needs.

Conclusion

While the General Assembly has adjourned, many of the issues outlined above will continue to develop in the months ahead. We welcome the opportunity to assist with any questions, strategic planning, or advocacy efforts related to these or other emerging matters as we begin preparing for the next session.

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