Economic and Community Development, Dept. of

Plain English Breakdown

The bill does not specify how much money will be in the fund and what specific rules the Department of Economic and Community Development will create for implementation.

Small Business Recovery Grant Fund Act

This bill creates a fund within the state treasury to assist eligible small businesses with costs incurred due to extenuating circumstances.

What This Bill Does

• Creates a Small Business Recovery Grant Fund within the state treasury to be administered by the Department of Economic and Community Development.
• Specifies that grants from this fund can cover costs like payroll, rent, insurance, and repairs for up to six months during an extenuating circumstance period.
• Defines 'eligible small business' as independent, for-profit entities with specific criteria including revenue limits and employee numbers.
• Requires applications for the grant program to be submitted in a form prescribed by the Department of Economic and Community Development.
• Establishes reporting requirements for the department to submit annual reports on fund usage.

Who It Names or Affects

• Small businesses that meet specific eligibility criteria
• The Department of Economic and Community Development

Terms To Know

Eligible small business

An independent, for-profit entity that engages in business with the public, is primarily owned by two or more natural persons, maintains a single physical location in Tennessee, has total gross receipts of not more than $1 million averaged over three years, employs no more than 15 full-time employees, and demonstrates substantial decline in revenue due to extenuating circumstances.

Extenuating circumstances

Unforeseeable events outside the control of a business that are not emergencies or disasters, such as violent acts by third parties or construction disruptions.

Limits and Unknowns

• The bill does not specify how much money will be in the fund.
• It is unclear what specific rules the Department of Economic and Community Development will create to implement this act.
• The exact impact on small businesses that do not meet eligibility criteria remains unknown.

Official Summary Text

SMALL BUSINESS RECOVERY GRANT FUND

This bill creates
a fund within the state treasury to be known as the small business recovery grant fund, to be administered by the department of economic and community development
and to
consist of
f
un
ds appropriated by the general assembly and
g
ifts, grants, and other donations received by the department for the fund.

Moneys in the fund must be used to assist eligible small businesses with eligible costs incurred in responding to, or recovering from,
extenuating circumstances.
Eligible costs means
costs incurred by an eligible small business that are attributable to extenuating circumstances, including payroll costs, costs of commercial rent or mortgage, insurance costs, utility costs, and costs to re
pair or replace landscaping, parking spaces, or other real property or improvements to real property owned by the eligible small business
. However, extenuating circumstances d
o not include an event for which the president or the governor declares a state
of emergency or disaster declaration pursuant to federal or state law, or the COVID-19 pandemic.

Grants made from the fund must cover eligible costs incurred during any one period of three consecutive months but no more than six consecutive months.

GRANT
S

This bill requires g
rants to assist eligible businesses
to
be made only to nonprofit organizations, local governments or to their economic development organizations, or other political subdivisions of the state.
An
"
e
ligible small business" means an i
ndependent, for-profit entity that

(
i
)
e
ngages in business with the public;

(
ii
)
i
s primarily owned and operated by two or more natural persons;

(
iii
)
m
aintains a single physical business location in this state;

(
iv
)
i
s not owned as a corporation or sole p
roprietorship or by an independent contractor;

(
v
)
d
emonstrates, as determined by the department, that it has sustained a substantial decline in gross revenue, substantial business modifications, or a substantial disruption to its operations due to extenua
ting circumstances;

(
vi
)
h
as total gross receipts of not more than
$1
million averaged over a three-year period; and

(
vii
)
e
mploys no more than 15 persons on a full-time basis
.

This bill authorizes g
rants from the fund
to
be made in all counties where the commissioner of economic and community development determines that the grants will have a direct impact on assisting eligible small businesses that operate as independent arts or cultural organizations or in the hospital
i
ty industry.

APPLICATION PROCEDURE

This bill requires an
eligible small business
to
submit a complete application in a form and manner prescribed by the department. The department
must
establish the procedures and time period for eligible small busines
ses to submit applications to the program.

REPORT

O
n or before January 1 of each year,
this bill requires
the department
to
submit to the chair of the finance, ways and means committee of the senate and the chair of the committee in the house of represe
ntatives having jurisdiction over matters related to public funds a report stating the amount expended from the fund in the past year, the purposes for which the money was expended, and the amount remaining in the fund.

RULEMAKING

This bill authorizes t
he commissioner of economic and community development
to
promulgate rules to implement this
bill.

Current Bill Text

SENATE BILL 1009
By Oliver

HOUSE BILL 1364
By Chism

HB1364
002831
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4;
Title 9; Title 50 and Title 67, relative to relief for
small businesses.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 4, Chapter 3, Part 7, is amended by
adding the following as a new section:
4-3-722.
(a) There is created a fund within the state treasury to be known as the small
business recovery grant fund, to be administered by the department of economic and
community development.
(b) The fund consists of:
(1) Funds appropriated by the general assembly; and
(2) Gifts, grants, and other donations received by the department for the
fund.
(c) Moneys deposited in the fund must be invested for the benefit of the fund
pursuant to § 9-4-603.
(d) Moneys in the fund must not revert to the general fund but must remain
available to be used by the department exclusively for the purposes specified in
subsection (f).
(e) The commissioner of economic and community development may
promulgate rules in accordance with the Uniform Administrative Procedures Act,
compiled in chapter 5 of this title, to implement this section.

- 2 - 002831

(f) Moneys in the fund must be used to assist eligible small businesses with
eligible costs incurred in responding to, or recovering from, extenuating circumstances.
Grants made from the fund must cover eligible costs incurred during any one (1) period
of three (3) consecutive months, but no more than six (6) consecutive months.
(g) Grants to assist eligible businesses must be made only to nonprofit
organizations, local governments or to their economic development organizations, or
other political subdivisions of the state. Grants from the 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 assisting eligible small businesses that
operate as independent arts or cultural organizations or in the hospitality industry.
(h) An eligible small business shall submit a complete application in a form and
manner prescribed by the department. The department shall establish the procedures
and time period for eligible small businesses to submit applications to the program.
(i) Beginning January 1, 2026, and on or before January 1 of each year, the
department shall submit to the chair of the finance, ways and means committee of the
senate and the chair of the committee in the house of representatives having jurisdiction
over matters related to public funds a report stating the amount expended from the fund
in the past year, the purposes for which the money was expended, and the amount
remaining in the fund.
(j) As used in this section:
(1) "Eligible costs" means costs incurred by an eligible small business
that are attributable to extenuating circumstances, including payroll costs, costs
of commercial rent or mortgage, insurance costs, utility costs, and costs to repair
or replace landscaping, parking spaces, or other real property or improvements
to real property owned by the eligible small business;

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(2) "Eligible small business" means an independent, for-profit entity that:
(A) Engages in business with the public;
(B) Is primarily owned and operated by two (2) or more natural
persons;
(C) Maintains a single physical business location in this state;
(D) Is not owned as a corporation or sole proprietorship or by an
independent contractor;
(E) Demonstrates, as determined by the department, that it has
sustained a substantial decline in gross revenue, substantial business
modifications, or a substantial disruption to its operations due to
extenuating circumstances;
(F) Has total gross receipts of not more than one million dollars
($1,000,000) averaged over a three-year period; and
(G) Employs no more than fifteen (15) persons on a full-time
basis; and
(3) "Extenuating circumstance":
(A) Means an unforeseeable event that is outside the control of
the eligible small business;
(B) Includes:
(i) An unforeseeable violent act by a third party or patron,
such as a shooting occurring at the business; and
(ii) Construction activities at or near an adjacent or
adjoining property that disrupts or causes a decline in foot traffic to
the business, including blocked roads, parking lots, and other
encroachments attributable to such construction activities; and

- 4 - 002831

(C) Does not include an event for which the president or the
governor declares a state of emergency or disaster declaration pursuant
to federal or state law, or the COVID-19 pandemic.
SECTION 2. For purposes of promulgating forms or rules, this act takes effect upon
becoming a law, the public welfare requiring it. For all other purposes, this act takes effect July
1, 2025, the public welfare requiring it.