Tennessee Senate Bill SB0889

Tennessee 2025-2026 Regular Session

• Introduced: 2/5/25
• Chaptered: 4/28/25
• Passed: 4/28/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 7, Part 2, relative to mineral severance tax.

Summary

This bill revises Tennessee’s mineral severance tax law for sand, gravel, sandstone, chert, and limestone severed from the ground in a county. It keeps the tax rate under county control, but raises the maximum allowable per-ton rate on a phased schedule: 15 cents before July 1, 2025; 20 cents beginning July 1, 2025; 25 cents beginning July 1, 2030; and 30 cents beginning July 1, 2035 and thereafter. The bill also removes an existing subsection in the severance tax statute and makes related conforming changes. The bill adds a new reporting requirement for counties that receive severance tax revenue. Within 30 days after the end of each fiscal year, those counties must submit a written report to the comptroller of the treasury, the commissioner of transportation, and the transportation committee chairs in both chambers. The report must describe how much revenue was deposited into the county road fund, how much was spent, and how the money was used for construction, maintenance, and repair of the county road system. It also authorizes a county legislative body to increase the tax rate by a two-thirds vote, with the new rate taking effect no earlier than 60 days after the Department of Revenue receives a certified copy of the resolution.

Impact

The act amends Tennessee Code Annotated Title 67, Chapter 7, Part 2, affecting county mineral severance taxes and county road fund reporting. It increases the statutory ceiling on local severance tax rates over time, gives counties a clearer mechanism to raise rates by supermajority vote, and imposes annual transparency obligations on counties that collect the tax. Counties, the Department of Revenue, the comptroller, the Department of Transportation, and legislative transportation committees are the primary entities affected.

Sentiment

The bill appears to have been received favorably in committee, passing the Senate State & Local Government Committee 9-0 and the Senate Finance, Ways and Means Committee 9-0. The lack of recorded opposition in the available votes suggests broad support for the measure, likely reflecting agreement on both the revenue flexibility for counties and the added reporting accountability.

Contention

No major opposition is reflected in the available committee votes or transcripts. The main policy questions implied by the bill are whether counties should have authority to raise the severance tax above current limits and whether the new reporting requirements are sufficient to ensure that road-fund revenues are used as intended. Any concern would likely come from affected mineral producers or taxpayers who may view the phased tax increases as a higher local cost, while county governments and transportation interests would likely support the added revenue and oversight.