TN Constitutional Amendment To Allow State To Own Banks, Equities In Private Companies Dangerous Territory Says Critics

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The Tennessee Conservative [By Kelly M. Jackson] –

Currently, our State Constitution is explicit about the state government’s role in potential ownership of private businesses and banks: it can’t. 

The State of Tennessee ratified its constitution in 1870, and since then, there have been no amendments to this section (Article II, Section 31) which reads: “The credit of this state shall not be hereafter loaned or given to or in aid of any person, association, company, corporation or municipality; nor shall the state become the owner in whole or in part of any bank or a stockholder with others in any association, company, corporation or municipality.” 

Now, Article II Section 29 says that counties and municipalities can extend their credit, but with an extraordinary contingency having already been met. This portion of the state constitution makes an allowance, but only if it has been put on a ballot and has had 75% of the majority of qualified voters approving of the move. 

So, while the investment can be made in this instance, the standard for approving such an act is so high, historically, it has never been met. And perhaps, for very good reasons. 

The new legislation SJR0034 states:  “Proposes an amendment to Article II, Section 31 of the Constitution of Tennessee authorizing the governing body or state official charged with carrying out the purpose or objectives of a fund or trust that is administered or invested by the Treasury and that contains state funds, in whole or in part, to adopt, with approval of the Treasurer and the Comptroller of the Treasury, an investment policy to authorize all or part of such fund or trust to be invested such that the state would become an owner, in whole or in part, of any bank or a stockholder with others in any association, company, or corporation.”

In essence, the new legislation would give power to the state Treasurer and the Comptroller to take taxpayer dollars and use those to essentially purchase a portion of a company, or a bank. The argument is that if the state has the ability to invest funds in private companies, the dividends would be exponential in comparison to those we currently yield. And maybe that would be true, but at what cost? 

Critics of the legislation are issuing strident warnings against its implementation, asserting that if allowed to pass, it would be essentially parroting the economic policies and practices of countries like China, where all private businesses are inextricably entangled with their government, the CCP (Chinese Communist Party). 

What would the implications of such a thing look like here in Tennessee? Gary Humble, of local grassroots organization Tennessee Stands explained it this way:

“Think about recent happenings with the nearly $1 Billion of your tax dollars being invested into the Ford Motor Company for a West TN plant and the $500 Million bond boondoggle for a new Tennessee Titans stadium in Nashville further subsidized by a one-point increase to Davidson County’s hotel sales tax. But now, let’s take that a step further.

Imagine a constitutional amendment that would now allow Tennessee to invest funds with companies like Ford and the Titans and become legitimate shareholders where the success and failure of both the state and the corporate entities are inextricably linked. Imagine Tennessee being able to extend its credit to private companies like Facebook and Amazon. Consider a future where the state of Tennessee is now part owner in a bank that might underwrite your small business loan…. The Treasurer and Comptroller of this state (an appointed, not elected position) would now have the sole authority (with no required legislative approval or vote of the people) to invest ALL of a state fund or trust (your tax dollars) giving the state the ability to become a 100% owner of any bank or corporation.

Does that sound like Tennessee or China?” 

Humble asks the question, “In a free society, should a state government own, in whole or in part, a corporation or bank? The answer is unequivocally, NO. Yet, here we are.” 

The General Assembly website, where the legislation is tracked, indicates that the bill was filed on January 12^th, then introduced and passed on first consideration in a single day, January 20^th, 2023. There have been no other movements since then, and we will continue to track this legislation as it makes it’s way through the necessary process. 

Because this is a proposed Amendment to our state constitution, and not simply another bill, the resolution would have to pass through two consecutive legislative sessions of the general assembly, and then be placed on the ballot in the subsequent election, in this case, 2024. 

The proposed amendment already passed through the last legislative session, as SJR913, and now only faces this final hurdle before being placed on the ballot in the next general election. 

About the Author: Kelly Jackson is a recent escapee from corporate America, and a California refugee to Tennessee. Christ follower, Wife and Mom of three amazing teenagers. She has a BA in Comm from Point Loma Nazarene University, and has a background in law enforcement and human resources. Since the summer of 2020, she has spent any and all free time in the trenches with local grassroots orgs, including Mom’s for Liberty Williamson County and Tennessee Stands as a core member.  Outspoken advocate for parents rights, medical freedom, and individual liberty.