HB 122 – SB 1301
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 8, 2025
Fiscal Analyst: Natalie Dusek | Email: natalie.dusek@capitol.tn.gov | Phone: 615-741-2564
HB 122 – SB 1301
SUMMARY OF BILL: Clarifies that the Tennessee Advanced Communications Network
(TACN) is the division of the Department of Safety (DOS) that operates, maintains, and oversees
the statewide P25 interoperable communications system (system). Authorizes DOS to collect fees
for the maintenance, use, and improvement of the system.
FISCAL IMPACT:
OTHER FISCAL IMPACT
The proposed legislation may result in a significant increase in revenue to the DOS related to fees
charged to third parties for use of the P25 interoperable communications system. Due to multiple
unknown variables, the extent and timing of any such revenue increase cannot be reasonably
determined at this time.
Assumptions:
• TACN is a statewide radio system that provides communication connectivity infrastructure
for local, state, and federal first responders. It is comprised of mobile and fixed radio
transmission sites to ensure the first responders have consistent communication coverage,
even in the event that a location becomes inoperable due to a disaster.
• Pursuant to Tenn. Code Ann. § 4-3-2018, the DOS has the authority to promulgate rules
and regulations regarding access to the statewide P25 interoperable communications system,
as well as to collect assessments for the maintenance and use of the system.
• The proposed legislation clarifies that TACN is the division of the DOS that operates,
maintains, and oversees the system. It also authorizes DOS to collect fees and expend them
for the maintenance, use, and improvement of the system.
• The DOS ceased collecting assessments for usage of the system from local government
entities in FY21-22. The DOS is not currently receiving any revenue related to use of the
TACN system.
• In FY22-23 and FY23-24, the DOS received non-recurring appropriations of $178,904,400
and $357,000,000, respectively, for improvements to and expansion of the system.
Additionally, recurring funding of $500,000 in FY22-23 and $1,257,100 in FY23-24 was
provided for the annual maintenance fees in the Motorola contract to expand the TACN
system.
• Based on information provided by the DOS, the department intends to generate a new
stream of revenue by leasing usage of the P25 towers to third parties in exchange for fees.
HB 122 – SB 1301 2
• There are currently no contractual agreements in place for such usage between the DOS
and any third parties, nor are there any negotiations for such currently in advanced stages.
• It is assumed, however, that the proposed legislation authorizes the department to pursue
such arrangements.
• It is assumed that, upon passage of this legislation, the DOS will seek to enter into
contractual agreement with third parties for the use of the system in exchange for usage
fees. However, it is not known how much revenue any such arrangement might generate
for the department.
• According to the DOS, the market rate for tower usage is generally dependent on the
geographic location of the tower, the local population, the amount of data used, and the
critical nature of the data usage.
• It is assumed that if the department is successful in securing such arrangements, they will
serve as a source of significant revenue for the department to expend on the maintenance,
use, and improvement of the system.
• However, due to multiple unknown variables regarding whether or when DOS will secure
any such usage agreements, the nature of those agreements, the potential data usage
involved, and how much revenue they may generate for the department, a precise estimate
of any such revenue increase cannot be reasonably determined at this time.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director