SB 1265 - HB 1302
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 11, 2025
Fiscal Analyst: Rebecca Chandler | Email: rebecca.chandler@capitol.tn.gov | Phone: 615-741-2564
SB 1265 - HB 1302
SUMMARY OF BILL: Renames the Tennessee Meat and Poultry Inspection Act as the Tennessee
Meat Inspection Act. Grants the Department of Agriculture (DOA) exclusive authority over meat
inspection and compliance of slaughterhouses, livestock carcasses, meat, and meat food products of
livestock for intrastate commerce, and custom slaughterers. Mandates inspection and sanitation
requirements at least equal to federal law. Eliminates all references to poultry and poultry products
from meat inspection statutes.
Authorizes the Commissioner to hire or appoint qualified personnel sufficient to carry out the duties
required for a state meat inspection program. Authorizes the Commissioner to provide voluntary
inspection for non-livestock animals used in intrastate meat production, with the discretion to refuse
service for valid reasons, such as limited staff or expertise. Prioritizes federally mandated livestock
inspections.
Effective immediately upon passage for the purposes promulgating rules, hiring of personnel, and
taking other administrative actions necessary for implementation. Effective for all other purposes
upon 30 days following receipt from the federal Food Safety and Inspection Service (FSIS) of the
United States Department of Agriculture (USDA) that Tennessee has met the requirements under
the federal Meat Inspection Act (MIA) to enter into a cooperative agreement with FSIS for a state meat
inspection program.
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FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY25-26 NET $774,000
FY26-27 & Subsequent Years NET $614,700
Total Positions Required: 12
FEDERAL GOVERNMENT
EXPENDITURES
FY25-26 $678,900
FY26-27 & Subsequent Years $572,700
OTHER FISCAL IMPACT
The extent to which such fee revenue will offset additional expenditures incurred by this legislation
cannot be quantified with reasonable certainty.
The Governor’s proposed FY25-26 budget (pages B-354 – B-355) includes a one-time
appropriation of $335,300 and a recurring appropriation of $1,531,000 to the Animal Health Fund
within the DOA and includes a recurring decrease in revenue of $1,531,000 from the Agricultural
Regulatory Fund.
Assumptions:
• The proposed legislation re-designates the Tennessee Meat and Poultry Inspection Act as the
Tennessee Meat Inspection Act.
• The Tennessee Meat and Poultry Inspection Act was originally enacted during the 113
th
General
Assembly and became Public Chapter 380 (P.C. 380).
• P.C. 380 was to become effective 30 days immediately following the receipt from FSIS that
the state had met the requirements under MIA to enter a cooperative agreement with FSIS
for a state meat inspection program.
• Currently, the state has not entered into a cooperative agreement with FSIS and a state meat
inspection program has not been implemented. Consequently, the USDA currently inspects
all meat facilities in the state except custom slaughterhouses.
• Based on information provided by the DOA, three positions have already been established
and budgeted for P.C. 380. The total recurring increase in state expenditures associated with
such positions, beginning in FY-23-24, is as follows:
SB 1265 - HB 1302 3
Title Salary Benefits
Annual
Supplies
#
Positions Total
Meat
Inspection
Director $76,596 $20,735 $10,600 1 $107,931
Animal Health
Technician $42,504 $15,079 $10,600 1 $68,183
Administrative
Assistant $42,504 $15,079 $10,600 1 $68,183
Total: $244,298
• The Department will require the 13 additional positions in order to carry out the provisions
of this legislation. The total recurring increase in state expenditures for such positions is as
follows:
Title Salary Benefits
Annual
Supplies
#
Positions
Total
Food &
Dairy
Inspector-1
$57,648 $17,592 $10,600 8 $686,720
Veterinarian $100,440 $7,832 $10,600 3 $356,616
Animal
Health
Technician
$53,856 $7,540 $10,600 2 $143,992
Total: $1,187,328
• The one-time cost for computers and related equipment for the new 13 positions is
estimated to be $15,600. Additionally, there is a one-time cost of $250,000 for lab
equipment.
• The total increase in new expenditures in FY25-26 will be $1,452,928 ($1,187,328 new
personnel + $15,600 computers + $250,000 lab equipment).
• States operate under cooperative agreements with FSIS. Based on a review of multiple state
reports, the state is to appropriate funds commensurate with those provided by FSIS as
specified in the state’s cooperative agreement. According to FSIS, FSIS provides up to 50
percent of the state’s operating funds, as well as training and other assistance.
• According to the FSIS’ Fiscal Year 2023 Summary Report, in FY22-23, FSIS signed
cooperative agreements with 29 states authorizing them to operate meat inspection
programs. FSIS dispersed more than $67,000,000 to the states to administer such programs,
for an average of approximately $2,310,000 per program. Federal payments are contingent
upon the administration of the state program in full compliance with the signed cooperative
agreement between the state and FSIS.
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• The report further provides that all 29 states had developed and maintained necessary laws,
administrative rules, regulations, program policies, and related operational procedures and
records to administer programs “at least equal to” the federal program. It is assumed DOA
will be similarly successful in establishing and operating a program that meets federal
requirements and will qualify for federal payments.
• For the purpose of this analysis, it is assumed that the state’s program will be approved in
FY25-26 and will receive a cost-share of 40 percent from the federal government.
• Therefore, the increase in state expenditures in FY25-26 will be $871,757 ($1,452,928 x
60%).
• Additionally, there will be a recurring decrease in state expenditures, as the federal
government will now cover 40 percent of the previously budget three positions, resulting in
a decrease of $97,719 ($244,298 x 40%).
• The net increase in state expenditures in FY25-26 is estimated to be $774,038 ($871,757 -
$97,719).
• The net increase in state expenditures in FY26-27 and subsequent years is estimated to be
$614,678 [($1,187,328 x 60%) - $97,719)].
• The increase in federal expenditures in FY25-26 is estimated to be $678,890 ($1,452,928 +
$244,298) x 40%).
• The increase in federal expenditures in FY26-27 and subsequent years is estimated to be
$572,650 [($1,187,328 + $244,298) x 40%].
• Pursuant to P.C. 380, the DOA will set fees in an amount to fully reimburse the program.
No fees have been rendered or collected. The proposed legislation requires fees, but does
not specify that the totality of the fees must be so, as to cover the entirety of the program
cost.
• It is unknown the amount that facilities will be charged for such licenses, permits, and
inspection fees, therefore, it is unknown the extent of which such fee revenue will offset
additional expenditures incurred by this legislation. It is assumed that if fees are deemed too
costly to facilities, that the meat inspection program will have low participation.
• The Governor’s proposed FY25-26 budget (pages B-354 – B-355) includes a one-time
appropriation of $335,300 and a recurring appropriation of $1,531,000 to the Animal
Health Fund within the DOA and includes a recurring decrease in revenue of $1,531,000
from the Agricultural Regulatory Fund.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director