AN ACT to amend Tennessee Code Annotated, Title 4; Title 9; Title 50 and Title 67, relative to relief for small businesses.
HB1364 creates a new Small Business Recovery Grant Fund in the state treasury, administered by the Tennessee Department of Economic and Community Development. The fund would be financed by legislative appropriations and outside donations, invested for the fund’s benefit, and kept from reverting to the general fund. The department would be authorized to adopt rules to run the program and would have to report annually beginning January 1, 2026 on spending and remaining balances.
The bill directs the fund to provide grants to eligible small businesses facing losses from “extenuating circumstances.” Eligible costs include payroll, rent or mortgage, insurance, utilities, and certain repair or replacement costs for real property improvements such as landscaping and parking areas. Grants would be available only through nonprofit organizations, local governments, economic development organizations, or other political subdivisions, and could be made in counties where the commissioner determines the grants will directly assist small businesses in the arts, cultural, or hospitality sectors.
To qualify, a business must be an independent for-profit entity with a single physical location in Tennessee, owned and operated by two or more natural persons, with no more than $1 million in average gross receipts over three years and no more than 15 full-time employees. The business must also show a substantial decline in revenue, substantial operational changes, or a substantial disruption caused by an unforeseeable event outside its control. The bill specifically includes violent third-party acts, such as a shooting at the business, and nearby construction that blocks access or reduces foot traffic.
The bill excludes events covered by a state or federal emergency or disaster declaration, including the COVID-19 pandemic. It takes effect immediately for rulemaking and form development, and for all other purposes on July 1, 2025. If enacted, it would add a targeted state grant program for small businesses and create new administrative duties for the Department of Economic and Community Development, while leaving the department discretion to define procedures and determine eligibility in practice.
Overall, the bill appears aimed at helping small businesses recover from localized, non-disaster disruptions, especially in sectors tied to foot traffic and tourism. There is no recorded committee debate or vote history in the provided materials, so the available context does not show formal support or opposition. The main policy choices embedded in the bill are the narrow eligibility rules, the exclusion of COVID-19 and declared disasters, and the decision to route grants through local or nonprofit intermediaries rather than directly to businesses.
The bill would add Tennessee Code Annotated § 4-3-722 and establish a dedicated state fund for small business recovery grants. It would give the Department of Economic and Community Development authority to administer the program, promulgate rules, determine eligibility, distribute grants through specified public or nonprofit entities, and submit annual reports to legislative finance committees. It would not directly change tax rates or general business regulation, but it would create a new state grant mechanism and ongoing administrative and reporting obligations.
No committee transcripts or votes were provided, so there is no recorded legislative sentiment in the materials. Based on the text alone, the bill is framed as a relief measure for small businesses and appears designed to address localized harms, suggesting a generally supportive policy intent. The absence of recorded debate means any support or opposition can only be inferred from the bill’s structure, not from actual legislative discussion.
The most notable points of contention are likely to be the bill’s narrow definition of eligible businesses and the exclusion of major disaster events, including COVID-19, from coverage. The bill also limits eligible grants to businesses with one physical location, no more than 15 employees, and no more than $1 million in average gross receipts, which may exclude many businesses that experience similar harms. Another possible point of debate is the requirement that grants be made through nonprofits, local governments, or economic development organizations rather than directly to businesses, which could raise questions about administrative efficiency and access.