HB 79 - SB 754
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 13, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
HB 79 - SB 754
SUMMARY OF BILL: Extends indefinitely, rather than until June 30, 2028, the time period
where eligible municipalities continue to receive an allocation of state sales tax revenue pursuant to
the now now-repealed Courthouse Square Revitalization Pilot Project of 2005. Authorizes up to six
additional courthouse square revitalization projects to be created upon application approval by the
Department of Finance and Administration (F&A) and the Comptroller of the Treasury (COT).
FISCAL IMPACT:
STATE GOVERNMENT
REVENUE General Fund
FY25-26 & Subsequent Years > ($3,500,000)
FY28-29 & Subsequent Years Foregone > $3,500,000
LOCAL GOVERNMENT
REVENUE Permissive
FY25-26 & Subsequent Years > $3,500,000
OTHER FISCAL IMPACT
Local revenue loss avoidance exceeding $3,500,000 in FY28-29 and subsequent years.
Assumptions:
• Pursuant to Tenn. Code Ann. § 67-6-103(h)(2), any municipality with a Courthouse Square
Revitalization Zone that is receiving allocations of state sales tax revenue as a result of the
now-repealed Courthouse Square Revitalization Pilot Project Act of 2005 will stop receiving state
sales tax revenue allocations following the conclusion of FY27-28.
• The proposed legislation would extend these allocations indefinitely.
• According to information provided by the Department of Revenue (DOR), there are six
different courthouse revitalization projects. DOR makes one courthouse square allocation
annually, covering all six projects.
• The FY23-24 allocations were approximately $3,200,000. Fiscal Review Committee staff’s
current estimates for total sales tax collection growth rates are 4.81 percent in FY24-25 and
HB 79 - SB 754 2
3.25 percent in FY25-26. The exact amount of such revenue growth in future years is
unknown but is assumed to increase over time.
• The proposed legislation will continue an allocation of state sales tax revenue to the six
courthouse revitalization projects, in an amount estimated to exceed $3,500,000 in FY28-29
and subsequent years.
• Current budgetary levels will not be impacted from the indefinite extension as the majority
of this revenue has not been retained by the state in many years. Therefore, the indefinite
extension will result in foregone state revenue exceeding $3,500,000 in FY28-29 and
subsequent years.
• In addition to the indefinite extension, the proposed legislation authorizes up to six
additional courthouse square revitalization projects. For the purposes of this analysis, it is
assumed six projects will be approved.
• Therefore, the estimated decrease in state revenue and subsequent permissive increase in
local revenue is estimated to exceed $3,500,000 in FY25-26 and subsequent years.
• It is assumed that F&A and the COT will absorb any additional duties resulting from this
legislation with existing staff and resources, without an increase in state expenditures.
IMPACT TO COMMERCE:
NOT SIGNIFICANT
Assumptions:
• Additional allocations of revenue will be used exclusively for maintaining and improving the
viability of the courthouse square through any means deemed appropriate by the governing
body of the municipality, including, but not limited to, making loans or grants to the county
governing body or any other public or private person, entity, or association for use on
infrastructure, marketing, and other purposes related to revitalization.
• However, overall impact on commerce and jobs in the state is assumed to be not
significant.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director