Legislative Update

During the 2025 legislative session, Public Entity Partners (PEP) actively engaged in two bills with the potential to significantly affect Tennessee’s cities and towns.

Through close collaboration with our legislative partners and municipal advocates, neither bill passed — a positive outcome for our members and the members of other local government pools in Tennessee.

HB0004/SB0418: Proposed Increase to Liability Limits in the Tennessee Governmental Tort Liability Act

Several versions of HB0004/SB0418 were proposed during the legislative session. As originally filed, the bill sought to increase the liability limits in the Tennessee Governmental Tort Liability Act to:

• $750,000 for bodily injury or death of one person
• $1,500,000 for bodily injury or death of all persons in an occurrence
• $250,000 for property damage in an occurrence

The original bill would have significantly increased the financial exposure and insurance costs for Tennessee’s local governments. PEP worked closely with municipal stakeholders to ensure lawmakers understood how these increases would affect local budgets, insurance costs and public services.

An amendment to the bill was filed in the Senate and can be read here. While the proposed limits were slightly lowered, the impact of the proposed increases would have been the same for local governments. The bill failed to pass out of the Judiciary Committee in each respective chamber. 

HB0476/SB1383: Restructuring of Pooling in Tennessee and Bidding Requirements

House Bill 0476, paired with Senate Bill 1383, began in the session as a caption bill that did not meaningfully affect insurance pooling. However, amendments circulated during the session would have dramatically changed that. If adopted, these amendments would have dismantled the business model that has supported Tennessee pooling for 45 years and would have created substantial financial and operational burdens for both PEP and its members.

Some versions of the proposed amendments would have required PEP to operate like a commercial insurance carrier. This shift was estimated to increase member premiums by more than $31 million each year and require more than $10 million in system and operational changes. These added costs would ultimately reduce member benefits such as grants, scholarships and training, and could jeopardize the future of pooling altogether.

Other amendments raised concerns about annual bidding requirements for coverage. Although members may already bid their coverage if they choose to do so, mandating annual bidding would be financially and administratively unrealistic for both local governments and PEP, and would undermine the stability that pooling was created to provide.

Because pooling ensures that local governments have consistent, affordable coverage even when the commercial market contracts, these proposed changes would have introduced significant instability for Tennessee communities.

The bill was ultimately deferred to the first calendar of the Insurance Subcommittee in the Tennessee House of Representatives in 2026.

Continuing the Fight for Local Governments

It is anticipated that both bills referenced above will return when lawmakers reconvene in January, though they may have new bill numbers.

Public Entity Partners will remain vigilant in protecting the interests of our members. Our advocacy work ensures that the voices of Tennessee’s cities, towns and local government agencies are heard at every stage of the legislative process.

We will continue to provide timely updates throughout the upcoming session. If needed, we may call on you to help communicate the direct impacts of these proposals.

Together, we remain stronger by working together to preserve the financial stability of Tennessee’s local governments.