Merit Institute Merit

The Tennessee Merit-Based Credentialing Act (TN-ACSA)

Tennessee state companion to ACSA. Extends Tennessee's 2018 universal occupational-licensure recognition, the Tennessee Department of Labor & Workforce Development certification framework, and the Tenn. Code Ann. Title 67 Ch. 4 franchise and excise tax credit regime.

THE TENNESSEE MERIT-BASED CREDENTIALING ACT (TN-ACSA)

Vehicle: State passage. Tennessee General Assembly, regular session. Primary referral to the House Commerce Committee and Senate Commerce & Labor Committee; tax provisions additionally to House Finance, Ways and Means and Senate Finance, Ways and Means; education provisions to House Education Administration and Senate Education.

Relationship to federal ACSA: Tennessee companion to the federal Alternative Credentialing & Skills Act. Extends the Tennessee Department of Labor & Workforce Development (“TDLWD”) industry-certification infrastructure to meet federal FRAC standards.

SECTION 1. SHORT TITLE

This Act may be cited as the “Tennessee Merit-Based Credentialing Act (TN-ACSA).”

SECTION 2. LEGISLATIVE FINDINGS AND INTENT

The General Assembly finds that Tennessee enacted one of the nation’s earliest universal occupational-licensure-recognition statutes under Tenn. Code Ann. Title 62 (2018 Fresh Start Act amendments and subsequent chapters); that the Tennessee Department of Labor & Workforce Development administers Workforce Services under Tenn. Code Ann. Title 50 Ch. 7; that the Tennessee Higher Education Commission (“THEC”) operates performance-funding for postsecondary institutions under Tenn. Code Ann. Title 49 Ch. 7 Part 5; that Tennessee has no state personal income tax and imposes only the franchise and excise taxes on business entities under Tenn. Code Ann. Title 67 Ch. 4 Part 20 and Part 21; and that Tennessee operates the Tennessee Reconnect and Tennessee Promise programs for adult and recent-graduate workforce-credential attainment. This Act extends, rather than replaces, those authorities.

TITLE I — DEFINITIONS & COORDINATION WITH TENNESSEE LAW

Sec. 101. Definitions

  1. (a) “Tennessee Recognized Merit Credential” or “TNRMC” means a competency-based credential designated by the Executive Director of THEC under Sec. 201.
  2. (b) “Federal FRAC” means a Federally Recognized Alternative Credential under Section 202 of the federal ACSA.
  3. (c) “TDLWD industry-aligned credential” means a credential recognized by TDLWD for workforce-training purposes under Tenn. Code Ann. Title 50 Ch. 7.
  4. (d) “Covered State licensing authority” means an agency issuing an occupational license under Tenn. Code Ann. Title 62 or comparable Tennessee chapter, and receiving Federal workforce funds directly or indirectly.

Sec. 102. Coordination with Existing Tennessee Law

  1. (a) Nothing in this Act shall be construed to duplicate or conflict with:
  • Tenn. Code Ann. Title 62 (professions, businesses, and trades) and Ch. 76 (universal licensure recognition).
  • Tenn. Code Ann. Title 49 Ch. 7 (THEC and postsecondary performance funding).
  • Tenn. Code Ann. Title 49 Ch. 4 (Tennessee Promise) and Ch. 4 Part 9 (Tennessee Reconnect).
  • Tenn. Code Ann. Title 50 Ch. 7 (TDLWD and workforce services).
  • Tenn. Code Ann. Title 67 Ch. 4 Part 20 (franchise tax) and Part 21 (excise tax), including Sec. 67-4-2006 et seq. credits.
  • Tenn. Code Ann. Title 8 Ch. 30 (state employment; preferred service) and Title 4 Ch. 3 (state government organization).

TITLE II — TENNESSEE RECOGNIZED MERIT CREDENTIALS

Sec. 201. Designation Authority

  1. (a) The Executive Director of THEC, in coordination with the Commissioner of TDLWD, shall maintain a Tennessee Recognized Merit Credentials registry (“TNRMC Registry”).
  2. (b) A credential shall be included on the Registry if it is a TDLWD industry-aligned credential, a Federal FRAC, or satisfies standards adopted by THEC in coordination with TDLWD.
  3. (c) The Registry shall be published in machine-readable form not later than 12 months after the effective date of this Act, updated at least annually, and crosswalked to the Federal FRAC list.

Sec. 202. Degree-Optional State Employment

  1. (a) Tenn. Code Ann. Title 8 Ch. 30 (state service hiring) shall be applied so that a TNRMC-holder satisfies any position qualification stated in terms of a college degree, unless the degree is expressly required by Tennessee statute.
  2. (b) The Department of Human Resources shall publish annual reporting identifying, by agency and position series, hires satisfying Sec. 202(a).

TITLE III — FRANCHISE AND EXCISE TAX INCENTIVE FOR SKILLS-BASED HIRING

Sec. 301. Tennessee Skills-Based Hiring Franchise and Excise Tax Credit

  1. (a) A new credit is added to Tenn. Code Ann. Title 67 Ch. 4 Part 20 / Part 21 allowing an offset against the franchise and excise taxes equal to a percentage of qualified first-year wages paid to a Tennessee-domiciled employee whose qualifying pathway is a TNRMC or a Federal FRAC.
  2. (b) The credit shall be coordinated with the federal IRC Sec. 45AA credit; a taxpayer claiming the federal credit may also claim this Tennessee credit, subject to an annual aggregate program cap set in the General Appropriations Act.
  3. (c) The Commissioner of Revenue shall adopt implementing rules under the Tennessee Uniform Administrative Procedures Act (Tenn. Code Ann. Title 4 Ch. 5) consistent with existing Tenn. Code Ann. Sec. 67-4-2006 credit mechanics.

TITLE IV — OCCUPATIONAL LICENSURE PORTABILITY

Sec. 401. Licensure by Demonstrated Competency

  1. (a) A covered State licensing authority shall provide a demonstrated-competency pathway to licensure in any occupation for which no specific degree is required by Tennessee statute.
  2. (b) The pathway shall accept, without further requirement, a TNRMC in the relevant domain, a Federal FRAC in the relevant domain, or a combination of examination and supervised experience satisfying the competency standards adopted by the authority.

Sec. 402. Interstate Recognition for Federal-Fund Recipients

  1. (a) A covered State licensing authority receiving Federal workforce funds under 29 U.S.C. Sec. 3161 et seq. shall recognize an out-of-state holder of a TNRMC or a Federal FRAC as meeting the competency requirement for licensure, consistent with the requirements of Section 401 of the federal ACSA and Tenn. Code Ann. Title 62 Ch. 76 (universal recognition).

TITLE V — IMPLEMENTATION & GENERAL PROVISIONS

Sec. 501. Severability

If any provision of this Act is held invalid, the invalidity shall not affect the remainder.

Sec. 502. Effective Date

This Act shall take effect July 1 of the year following enactment, except that Sec. 301 shall apply to tax years beginning on or after January 1 of that year.

Canonical federal version: ACSA. Other Tennessee bills: TN-MEWRA, TN-GT&P, TN-AI-Workforce.