Specifically, Rule 1260-2-.33(2) of the Tennessee Real Estate Commission states that “[n]o cash rebates, cash gifts, or cash prizes may be paid to any person who does not hold a real estate license.” Yet the Commission was on the verge of repealing the rule. See page 2 of this Notice of Rulemaking Hearing pertaining to a May 2007 meeting of the Commission (“Rule 12602.33 Gifts and Prizes is amended by deleting paragraph (2).”). Thus with little if any meaningful debate before passing the bill (at the Tennessee Association of Realtors' urging), the legislature recently sent SB1160 as amended to the governor, who has made the bill law in Tennessee.
Not wanting to come across as opponents of price competition, it sounds like proponents of the bill, incredulously, are boasting of its purported pro-consumer justifications, none of which are cited in the law or, apparently, were meaningfully considered by either legislative body before passing the bill. Furthermore, both the state legislature and the governor chose to ignore the advice of the United States Department of Justice to reject the bill, the DOJ being one of the chief enforcers of the nation's antitrust laws that, along with the FTC, has no doubt heard similar "pro-consumer" justifications for such a prohibition from legislators and governors in other states.
Interestingly, I have come across an Arizona broker/blogger - apparently a traditional one mind you - that seems to acknowledge in a post that TAR's motives were anticompetitive and protectionist.
For what it is worth, I note that the law is limited to cash rebates, etc. I imagine that innovative Tennessee brokers will continue to find ways to effectively compete on price, much to the chagrin of those who fear to their core the idea of price competition.