Tennessee lawmakers pass bill increasing mineral severance tax to support local roads

The State & Local Government Committee of the Tennessee State Legislature convened on February 26, 2025, to discuss several key pieces of legislation, including property rights protections and tax adjustments for mineral severance.

One of the most significant discussions centered around House Bill 444, which aims to enhance property rights by limiting the use of eminent domain. A committee member expressed support for the bill, highlighting personal experience with eminent domain exercised by the Tennessee Valley Authority (TVA) on their farm. The bill passed with a vote of 19 in favor and 2 against, moving on to the Finance, Ways, and Means Committee for further consideration.

Another important topic was House Bill 695, which proposes to increase the maximum mineral severance tax from 15 cents per ton to 20 cents per ton, with plans to raise it to 25 cents by July 2025 and 30 cents by February 2026. This tax applies to minerals such as sand, gravel, and limestone, and any changes would require a two-thirds vote from the county. The bill received strong backing from various industry associations and passed with 18 votes in favor and 1 against.

The committee also reviewed House Bill 824, which extends the funding for the event marketing fund established in 2008. This fund supports Nashville's hospitality sector by promoting large-scale events, including the Super Bowl and CMA Fest. The bill was approved with a vote of 17 in favor, 3 against, and 1 present but not voting.

Several other bills were discussed, including House Bill 23 and House Bill 391, which were rolled to the next week's calendar due to the absence of their sponsors. The meeting concluded with no further announcements from committee members.

Overall, the committee's discussions reflect ongoing efforts to balance property rights, support local industries, and promote tourism in Tennessee. The next steps for the approved bills will involve further scrutiny in the Finance, Ways, and Means Committee.