Tennessee Bill Blocking Certain Crypto Investments Takes U-Turn On Way To Governor’s Desk

A Tennessee bill that initially sought to restrict the state government’s post-employment funds from being invested in cryptocurrency was amended to remove any mention of cryptocurrency before being signed into law.

  • On Monday, Tennessee governor Bill Haslam signed into law a provision that allows local education agencies (i.e., school districts) to participate in “any other post-employment benefits investment trust” created as part of the Other Post-Employment Benefit Investment Trust Act of 2006.

    Notably missing from the signed bill is any mention of cryptocurrency, despite the fact that the initial wording of the proposed bill would have modified the Tennessee State Code to prohibit trustees from investing government employees’ retirement funds in cryptocurrencies.

    Title 8, Chapter 27 of the Tennessee State Code stipulates that retirement contributions for government employees be held in a trust fund until the employee retires. The code allows the state‘s trustees, who manage the state pension fund, “to invest any funds of the trust in any instrument, obligation, security, or property that constitutes legal investments.” As originally proposed, HB2093 would have added:

    “(b) Notwithstanding any law to the contrary, the trustees shall not invest in any cryptocurrency.”

    However, after the bill was introduced in the Senate, Senator Bo Watson sponsored an amendment that deleted any mention of cryptocurrency and instead clarified local education agencies’ role in investments. “We wanted to provide school districts with the flexibility they need when funding benefits for our retiring educators,” explained a spokesperson for Senator Bill Ketron, who introduced the Senate version of the bill, SB2508. The amended bill passed the Senate unanimously, 32-0, on March 22 of this year. The bill then passed the House of Representatives on March 26 on a 96-1 vote.

    Tennessee Representative Michael Curcio, who cosponsored HB2093, told ETHNews that “House Bill 2093 was originally filed as a caption bill just ahead of the February bill filing deadline. The bill’s caption includes wording for cryptocurrency, but it was never intended to change Tennessee law related to it.”

    Caption bills are a peculiar part of Tennessee’s legislative process. The state Constitution requires that each bill provide a short explanation, or caption, of the bill’s purpose. As others have written, the idea is to curtail amendments that have little to do with the original bill. In the case of HB2093, the caption read: “An act to amend Tennessee Code Annotated, Title 8, relative to post-employment benefits.” (The caption does not technically mention cryptocurrency; the body of the bill does.) That wording allowed legislators to propose any amendments specifically related to post-employment benefits, regardless of whether it stuck to the stated intent of the bill to curtail cryptocurrency investments.

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