HB 981 - SB 923
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 1, 2025
Fiscal Analyst: Arielle Woodmore | Email: arielle.woodmore@capitol.tn.gov | Phone: 615-741-2564
HB 981 - SB 923
SUMMARY OF BILL: Decriminalizes the possession of less than one ounce of marijuana
or less than five marijuana plants. Establishes that it is not an offense for a person to casually
exchange a small amount of marijuana not in excess of one-tenth of one ounce.
Authorizes a municipality to establish by ordinance or a county to establish by resolution, a civil
penalty not to exceed $25 per one-tenth of an ounce or $50 per plant, if a person publicly possesses
or casually exchanges less than one ounce of marijuana.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES Incarceration
FY25-26 ($149,800)
FY26-27 ($151,600)
FY27-28 ($153,400)
LOCAL GOVERNMENT
EXPENDITURES Mandatory
FY25-26 & Subsequent Years ($3,486,600)
Assumptions:
• Pursuant to Tenn. Code Ann. § 39-17-418(b)-(c), it is a Class A misdemeanor offense for a
person to distribute a small amount of marijuana not in excess of one-half ounce (14.175
grams).
• The proposed legislation will decrease admissions for possession up to one ounce of
marijuana and casual exchange of less than one-tenth of one ounce of marijuana.
Based on information provided by the Administrative Office of the Courts and the
Department of Correction Jail Summary Reports, there have been an average of 3,749.67
Class A misdemeanor convictions for simple possession and casual exchange and
distributing a small amount of marijuana not in excess of one-half ounce under Tenn. Code
Ann. § 39-17-418 in each of the last five years.
• It is assumed that an individual convicted of a Class A misdemeanor offense will spend an
average of 15 days in a local jail.
HB 981 - SB 923 2
• Based on cost estimates provided by local government entities throughout the state and
reported bed capacity within such facilities, the weighted average cost per day to house an
inmate in a local jail facility is $61.99.
• The proposed legislation will lead to a recurring mandatory decrease in local incarceration
expenditures estimated to be $3,486,631 [($61.99 x 3,749.67 admissions) x 15 days].
• Pursuant to Tenn. Code Ann. § 39-17-417(g)(1), the sale, manufacture, delivery of, and
possession with intent to sell, manufacture, or deliver a Schedule VI controlled substance
classified as marijuana containing not less than one half ounce nor more than ten pounds,
or a Schedule VI controlled substance defined as a non-leafy, resinous material containing
tetrahydrocannabinol (hashish), containing not more than two pounds of hashish is a Class
E felony offense.
• Based on information provided by DOC, there has been an average of 114.20 admissions in
each of the last 10 years for the Class E felony offense under Tenn. Code Ann. § 39-17-
417(g).
• However, these admissions include a Schedule VI controlled substance classified as
marijuana containing up to ten pounds and a Schedule VI controlled substance classified as
hashish containing up to two pounds.
• It is assumed that 15 percent, or 17.13 (114.20 x 15%) of these admissions involved
between one half ounce and one ounce of a Schedule VI controlled substance classified as
marijuana.
• After adjusting for pre-trial jail credits, the average time served for a Class E felony offense
under Tenn. Code Ann. § 39-17-417(g) is 0.40 years.
• Based on population data from the U.S. Census Bureau, population growth in Tennessee
averaged 1.24 percent per year (from 2021 to 2024).
• The proposed legislation will result in 17.13 admissions annually serving 0.56 less years
incarcerated.
• The weighted average operational costs per inmate per day are estimated to be $62.02 for
inmates housed at state facilities and $50.51 for inmates housed at local facilities.
• Pursuant to Public Chapter 1007 of 2022, cost decreases are to be estimated on the actual
estimated costs to be reduced over the next three-year period; therefore, the decrease in
incarceration costs is estimated to be the following over the next three-year period:
Decrease in State Expenditures
Amount Fiscal Year
($149,800) FY25-26
($151,600) FY26-27
($153,400) FY27-28
• Based on Fiscal Review Committee’s 2008 study and the Administrative Office of the
Courts’ 2012 study on the collection of court costs, fees, and fines, collections in criminal
cases is insignificant; therefore, any decrease in local revenue related to fines from the
reduced convictions and any increase in local revenue related to the new $25 or $50 fine for
possession are estimated to be not significant.
• The estimated fiscal impact of the proposed legislation does not consider the availability of
beds in state and local facilities, but is based solely on the current operating costs of state
HB 981 - SB 923 3
facilities and the reimbursement rates for local facilities as is required by Tenn. Code Ann. §
9-4-210.
• All calculations used in completion of this fiscal note are available upon request.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director