Tennessee Senate Bill SB1185

Tennessee 2025-2026 Regular Session

• Introduced: 2/6/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 4, Chapter 3, Part 7 and Title 67, Chapter 4, relative to the "Small Business Growth and Empowerment Act."

Summary

SB1185, titled the "Small Business Growth and Empowerment Act," creates a new state fund within Tennessee’s general fund to support grants aimed at minority-owned and women-owned businesses in underserved areas. The fund may receive legislative appropriations and private gifts or donations, and the Department of Economic and Community Development would administer grants for activities such as site development, infrastructure, planning, training and mentoring, entrepreneurship, tourism-related projects, and technology improvements. The bill also requires quarterly reporting on commitments and public posting of grant recipient information, amounts, and project descriptions. In addition to the grant program, the bill adds a new tax credit for qualifying small businesses. A business may claim a credit equal to 50% of its liability under the franchise and excise tax provisions if it meets either a local hiring requirement—at least half of employees residing in the community where the business operates—or provides department-approved workforce training. To qualify, the business must be certified annually by the Department of Economic and Community Development and provide proof of certification to the Department of Revenue. The bill defines "small business" by gross receipts or employee count, and sets effective dates for the grant provisions and the tax credit provisions in 2025 and 2026, respectively.

Impact

The bill would amend Tennessee Code Annotated Title 4 and Title 67 by establishing a new state grant fund and adding a new business tax credit. It would direct the Department of Economic and Community Development to administer grants for targeted economic development in underserved areas, require oversight and public reporting, and authorize the state treasurer to invest fund balances. It would also affect franchise and excise tax administration by creating a certification-based credit for eligible small businesses, thereby reducing tax liability for businesses that meet hiring or training criteria.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill text alone, the measure appears designed to promote economic development and small business growth, particularly for minority-owned and women-owned businesses, which suggests a generally supportive policy intent. The absence of voting history or discussion prevents a more specific assessment of legislative sentiment.

Contention

The main potential points of contention are likely to be the use of state funds for targeted grants, the focus on minority-owned and women-owned businesses, and the tax credit’s eligibility rules. Critics could question whether the program is sufficiently broad, whether the definitions of "underserved area" and qualifying businesses are too narrow or too subjective, and whether the hiring requirement or workforce-training certification could be burdensome for small businesses. Supporters would likely emphasize the bill’s targeted investment strategy, accountability measures, and efforts to expand opportunity in communities with limited access to capital and credit.