Energy

SENATE BILL 2560
By Reeves

HOUSE BILL 2070
By Todd
HB2070
012007
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4;
Title 60 and Title 68, relative to the "Tennessee
Energy Freedom Act."

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Tennessee Energy Freedom
Act."
SECTION 2. Tennessee Code Annotated, Title 68, is amended by adding the following
as a new chapter:
68-206-101. Definitions.
As used in this chapter, unless the context otherwise requires:
(1) "Annual emissions baseline" means the highest total carbon dioxide
emissions in the People's Republic of China and India combined for at least one
(1) calendar year or twelve-month period in the preceding five (5) years, with the
computation to be based on generally available data regarding actual or
estimated country-level emissions;
(2)
(A) "Company" means a corporation, limited liability company,
partnership, trust, estate, or other entity formed under the laws of this
state, another state or the District of Columbia, the federal government, or
another country, and includes the direct and indirect subsidiaries the
company owns; and
(B) "Company" includes an organization, association, or joint
venture, either incorporated or unincorporated;

- 2 - 012007

(3) "Covered activities" means:
(A) The exploration, production, transportation, sale,
manufacturing, refining, combustion, or other use of coal, oil, and natural
gas in this state by a person; and
(B) Statements or omissions in this state relating to covered
emissions;
(4) "Covered emissions" means the emission of carbon dioxide,
methane, or nitrous oxide into the atmosphere resulting, directly or indirectly,
from the exploration, production, transportation, sale, manufacturing, refining,
combustion, or other use of coal, oil, and natural gas;
(5) "Covered government" means another state, a government agency of
another state, or a local government in this state or another state;
(6) "In-jurisdiction products" means:
(A) For a covered government, only the specific fossil fuel
products that were actually shipped, or incorporated into products that
were actually shipped, into the territorial boundaries of the state where
the covered government is located; and
(B) For a private party, only the specific fossil fuel products that
were actually shipped, or incorporated into products that were actually
shipped, into the territorial boundaries of the state in which the private
party resided at the time of the events at issue;
(7) "Liability" means any legally enforceable obligation to pay money or
another thing of value, including, but not limited to, monetary damages, fines,
penalties, disgorgement, restitution, remediation or abatement costs, equitable

- 3 - 012007

relief that requires the expenditure of money, attorneys' fees, taxes, excises,
levies, imposts, duties, or surcharges; and
(8) "Person" means a natural person, company, government, or
governmental subdivision or agency.
68-206-102. Right to engage in activities related to coal, oil, and natural gas.
(a) The purpose of this chapter is to protect the substantive right to engage in
covered activities and to prevent discrimination against the exercise of such right.
Courts and covered governments that fail to give full faith and credit to this chapter, or to
records or judicial proceedings pursuant to this chapter, violate protections in the
constitution of the United States and federal law, engage in unlawful discrimination, and
inflict sovereign injury on this state and its citizens. It is the intent of the general
assembly that this chapter applies retroactively and extraterritorially.
(b) It is the public policy of this state that persons have the right to engage in and
invest in companies that engage in covered activities. No injunctive relief may be
granted and no liability may be assigned for covered emissions resulting directly or
indirectly from covered activities, occurring at any time, unless such covered activities
are proven to be in violation of the federal Clean Air Act, 42 U.S.C. § 7401 et seq., as
amended, another federal environmental law, or a state law provision necessary to
comply with a federal environmental law, in which case liability and remedies shall be
determined based solely on federal law.
(c) Except where required by federal law, no covered government or private
party may bring an action in any forum, or otherwise to impose or seek to impose any
liability in connection with, covered emissions from covered activities, unless the liability
is calculated and based solely on in-jurisdiction products. This chapter does not

- 4 - 012007

authorize a person to bring an action or make a claim against another person where the
person is not otherwise authorized to do so.
(d) A natural person or company who is aggrieved by a violation of this chapter
and the attorney general and reporter may each commence an action, intervene, or
otherwise assert a claim for declaratory and injunctive relief, nominal damages, and any
other appropriate relief.
68-206-103. Process for determining the amount of covered emissions.
(a) A natural person or company required by a law to file reports with this state
or a covered government may seek declaratory relief to conclusively determine and
establish a definitive record of the person's covered emissions in this state from one (1)
or more of the following:
(1) All direct emissions that stem from sources the natural person or
company owns or directly controls, regardless of location, including, but not
limited to, fuel combustion activities;
(2) All indirect emissions from consumed electricity, steam, heating, or
cooling purchased or acquired by the natural person or company, regardless of
location; and
(3) All indirect upstream and downstream emissions, other than those
emissions described in subdivision (a)(2), from sources that the natural person or
company does not own or directly control and may include, but are not limited to,
purchased goods and services, travel, and processing and use of sold products.
(b) In determining the amount of emissions for an identified time period under
subsection (a), the court shall, at the election of the natural person or company whose
emissions are being determined, apply the formula set forth in subsection (e) or accept a
calculation offered by the person that is supported by substantial evidence. If the

- 5 - 012007

calculation has been verified by a third-party independent verifier, an independent third-
party assurance provider, or both, the court's declaration shall so find.
(c) In an action under subsection (a), the department of environment and
conservation shall be named as the defendant, and after being served, the department
shall publish notice of the action on its website, which constitutes service by publication
to all interested parties. The court shall advance and hear the action as expeditiously as
possible and render its decision no later than sixty (60) days after the action is
commenced. The court shall not award costs or fees to any party. Only the natural
person or company who seeks a declaration under subsection (a) may appeal a
determination made in an action under subsection (a).
(d) A declaration under this section is a permanent and definitive record of a
natural person or company's emissions over a given time period, and it is final and valid
for all purposes and as to all persons, except in those instances where the federal Clean
Air Act, 42 U.S.C. § 7401 et seq., as amended, another federal environmental law, or a
state law that is necessary to comply with a federal environmental law, requires reporting
using a different methodology, in which case a declaration under this subsection (d) is
final and valid for all other purposes.
(e) To ensure a uniform calculation process for emissions in this state, a natural
person or company may elect to defer to a court-determined calculation of its emissions
in an action brought under subsection (a). If such election is made, the irrebuttable
presumption to be applied is that covered emissions in this state for each of the
categories in subsection (a) is zero (0) kilograms of carbon dioxide equivalent over an
identified time period if the natural person or company provides a declaration that, based
on a reasonable inquiry, its covered emissions for that time period are less than ten

- 6 - 012007

percent (10%) of the annual emissions baseline times the number of years, including
fractions of a year, equal to the length of the identified time period.
(f) A natural person or company that is subject to a disclosure requirement and
the attorney general and reporter may each enforce this section by commencing an
action, intervening, or otherwise asserting a claim against any state or local government,
or officer thereof, that fails or refuses to give full faith and credit to a record made and
judgment obtained under this section, and such person or company may obtain
declaratory and injunctive relief, nominal damages, and any other appropriate relief.
SECTION 3. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
SECTION 4. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
SECTION 5. This act takes effect July 1, 2026, the public welfare requiring it.