HOUSE BILL 952
By Brooks
SENATE BILL 1185
By Akbari
SB1185
001149
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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."
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Small Business Growth and
Empowerment Act."
SECTION 2. Tennessee Code Annotated, Title 4, Chapter 3, Part 7, is amended by
adding the following as a new section:
4-3-722. Small business growth and empowerment fund – grants.
(a) The small business growth and empowerment fund is established as a
separate account in the general fund.
(b) The small business growth and empowerment fund is to be composed of:
(1) Funds appropriated by the general assembly for the fund; and
(2) Gifts, grants, and other donations received by the department of
economic and community development for the fund.
(c) Moneys in the small business growth and empowerment fund may be used
by the department of economic and community development for program administration,
marketing expenses, and program evaluation; provided, however, such expenses must
not exceed five percent (5%) of the total amount appropriated for the program in any
fiscal year.
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(d) Subject to the availability of revenue at the end of each fiscal year, the
commissioner of finance and administration is authorized to carry forward any amounts
remaining in the small business growth and empowerment fund.
(e) Moneys in the small business growth and empowerment fund must be
invested by the state treasurer pursuant to title 9, chapter 4, part 6, for the sole benefit of
the fund, and interest accruing on investments and deposits of the fund must be returned
to and remain part of the fund.
(f) To the extent practicable, moneys from the small business growth and
empowerment fund must be spent in all three (3) grand divisions of the state.
(g) New commitments made by the commissioner of economic and community
development for grants from the small business growth and empowerment fund must not
exceed the appropriations made for the purposes of the program. In each fiscal year,
the fund must be managed so that actual expenditures and obligations to be recognized
at the end of the fiscal year do not exceed any available reserves and appropriations of
the programs.
(h)
(1) At least quarterly, the commissioner of economic and community
development shall report to the commissioner of finance and administration the
status of the commitments from the small business growth and empowerment
fund. The report must include at least the following information:
(A) The amount of each commitment accepted since the previous
report;
(B) The applicant receiving the benefit of each commitment;
(C) The total outstanding commitments; and
(D) The total unobligated balance.
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(2) A copy of the report must be transmitted to the chief clerks of the
senate and the house of representatives, the state treasurer, the state
comptroller, the office of legislative budget analysis, and the secretary of state.
(i) Grants from the small business growth and empowerment fund may be made
in all counties where the commissioner of economic and community development
determines that the grants will have a direct impact on employment and investment
opportunities for minority-owned and women-owned businesses in underserved areas.
(j) Grants from the small business growth and empowerment fund may be made
only to local governments or their economic development organizations, other political
subdivisions of the state, any subdivision of state government, or to not-for-profit
organizations.
(k) Grants from the small business growth and empowerment fund must be used
to facilitate economic development activities for minority-owned and women-owned
businesses in underserved areas or in a manner that directly impacts minority-owned
and women-owned businesses in underserved areas. These activities include:
(1) Site development activities;
(2) Infrastructure activities;
(3) Tourism-related activities;
(4) Planning activities;
(5) Training and mentoring activities;
(6) Entrepreneurship activities;
(7) Significant technological improvements; or
(8) Other economic development activities determined by the
commissioner of economic and community development to have a beneficial
impact on the economy of this state.
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(l) Notwithstanding another law to the contrary, the department shall post the
following information on its website at least quarterly:
(1) The name of each small business growth and empowerment fund
grant recipient;
(2) The amount of each fund grant; and
(3) A description of the project to be funded by each fund grant.
(m) For purposes of this section:
(1) "Minority-owned business" means a business that is a continuing,
independent, for-profit business that performs a commercially useful function,
and is at least fifty-one percent (51%) owned and controlled by one (1) or more
minority individuals who are impeded from normal entry into the economic
mainstream because of past practices of discrimination based on race or ethnic
background;
(2) "Underserved area" includes communities that have difficulty
accessing resources to start and grow businesses, including inner-city areas,
rural areas, and communities with historically high barriers to capital and credit;
and
(3) "Woman-owned business" means a business that is a continuing,
independent, for-profit business that performs a commercially useful function,
and is at least fifty-one percent (51%) owned and controlled by one (1) or more
women; or, in the case of any publicly owned business, at least fifty-one percent
(51%) of the stock of which is owned and controlled by one (1) or more women
and whose management and daily business operations are under the control of
one (1) or more women.
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SECTION 3. Tennessee Code Annotated, Section 67-4-713, is amended by adding the
following as a new subsection (c):
(1) A qualifying small business that files and pays the tax imposed by this part
may take a credit equal to fifty percent (50%) of the taxpayer's liability as calculated in §
67-4-709.
(2) A small business qualifies for the credit described in subdivision (c)(1) if:
(A) The business:
(i) Complies with a local and targeted hiring policy that the
business develops and implements in which at least fifty percent (50%) of
the persons employed reside in the community, municipality, or county in
which the business operates; or
(ii) Provides workforce training approved by the department of
economic and community development to its employees;
(B) The business applies for and receives certification from the
department of economic and community development that the business meets
the qualifications under this subdivision (c)(2) for each year in which the credit is
sought. The department shall review applications submitted by small businesses
and issue certifications as appropriate; and
(C) The business submits proof of its certification from the department of
economic and community development to the department of revenue when it files
and pays the tax imposed by this part.
(3) For purposes of this subsection (c), "small business" means a business that
is a continuing, independent, for-profit business that performs a commercially useful
function with residence in this state and has total gross receipts of not more than one
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million five hundred thousand dollars ($1,500,000) averaged over a three-year period or
employs no more than fifteen (15) persons on a full-time basis.
SECTION 4. The heading in this act is for reference purposes only and does not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the heading in any compilation or publication containing this act.
SECTION 5. For purposes of promulgating forms or rules, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, Sections 2 and 4 of this
act take effect July 1, 2025, the public welfare requiring it. For all other purposes, Section 3 of
this act takes effect January 1, 2026, the public welfare requiring it, and applies to tax years
beginning on or after that date.