Natalie Allison

Nashville Tennessean

A bill opposed by LGBTQ advocates that would prevent state or local government entities in Tennessee from discriminating against a business based on the company's internal policies has advanced in the House.

House Bill 563, sponsored by Rep. Jason Zachary, R-Knoxville, passed in the House on a 68-22 vote.

The legislation seeks to prohibit the state or local governments from taking "discriminatory action" against a business, including altering the tax treatment or withholding contracts from a company, based on their policies about discrimination, health insurance, family leave or minimum wage.

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Despite questions from Democrats about the bill being used to discriminate against LGBTQ-owned businesses, Zachary maintained that the legislation worked in their favor, too.

"The only opposition to this bill has been, unfortunately, from the LGBT community," Zachary said.

"If I am a part of that community, I want this legislation in place," he said. "It says no government entity, local or state, can discriminate against a business they own. If they choose to have whatever within their anti-discrimination policy, if they choose to have minimum wage, choose to have a healthcare policy tailored to them, no government entity can discriminate."

Opponents say bill 'ties the hands of local governments'

In a statement Thursday, the Tennessee Equality Project, an LGBTQ rights advocacy group, condemned the House's passage of the bill, which the organization refers to as a "Business License to Discriminate."

"This bill ties the hands of local governments in serving the needs of their residents and in using their tax dollars to attract the best jobs to their communities," the group said, adding that same-sex couples do not have federal and state protections when it comes to employment, housing and public accommodations.

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Rep. Mike Stewart, D-Nashville, who is also the House Democratic Caucus chairman, asked whether the state Department of Revenue had approved of the bill. Zachary said it had received no opposition from any state department.

"Your bill contains extremely sweeping language, and I think it's a real invitation to sow a lot of confusion with some tax policies that have been very important for our state, that are central to all of our recruiting efforts," Stewart said. "I don't think that’s what you're trying to do with this bill."

Zachary quickly corrected Rep. Bob Freeman, D-Nashville, when Freeman suggested that Zachary's "intent is to further the protections for the LGBTQ community" and thanked him for such.

"You need to be careful about putting words in the sponsor’s mouth when those words are not said," Zachary said.

The bill has stalled in the Senate, where it has not yet been taken up in a committee.

Reach Natalie Allison at nallison@tennessean.com. Follow her on Twitter at @natalie_allison.

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