Summary of HB 1108 (Session 114) – Tennessee
Title: Ola Mae Ransom Reintegration Act
Purpose
- Enacts the Ola Mae Ransom Reintegration Act.
- Its central aim is to exempt honorably discharged veterans of the United States military (including the National Guard and Reserves) from paying the annual business license fee in Tennessee.
Key Provisions
- Exemption from Business License Fee:
- Veterans who are honorably discharged are exempt from the $15 one-time business license fee for a new business and the $15 annual renewal fee for existing businesses, effectively removing the cost of the local business license for eligible veterans.
- This exemption applies to both minimal activity licenses (for $3,000 to $100,000 in annual gross receipts) and standard licenses (for $100,000 or more in annual gross receipts).
- The Department of Revenue (DOR) handles license renewals by notifying the county clerk when the licensee has filed their business tax return and remitted due amounts; the exemption shifts the financial obligation away from the veteran, not removing state oversight.
- Verification and Administration:
- Local governments are expected to develop and implement a verification process to determine eligibility for the exemption.
- Governmental entities can implement the change using existing resources; no net increase in local expenditures is assumed.
- Covered Veterans:
- Includes veterans who are honorably discharged, as well as those who served in the National Guard and Reserves.
- Documentation:
- It is assumed veterans will present a Certificate of Release or Discharge from Active Duty or other documentary proof of discharge status to qualify for the exemption.
Fiscal Impact
- Local Government Revenue (Mandatory):
- The bill would reduce local revenue from $76,000 (FY 2026-27 and onward) under the amended version (based on updated assumptions in the fiscal note). The earlier version projected higher impacts, but the amended figures show ongoing annual reductions in local license fee revenue.
- The fiscal analysis assumes a portion of veteran licensees pay $15, another portion pays $30 (combined county and city fees), and a small portion pays a one-time $15. The split provided in the memo estimates impacts across these categories.
- An additional potential revenue decrease is estimated for multi-location licensees (about 5%), increasing the total to the stated figure.
- General Assumptions:
- Tennessee Code Annotated § 67-4-723 governs the licensing structure (minimal activity and standard licenses) and fee mechanics.
- The local government structure (county and city) retains 100% of license fee revenue, so exemptions directly reduce local revenue.
- Fiscal Note Timeline:
- The fiscal notes reflect different points in the legislative process (initial note for FY 2025-26; amended note for FY 2026-27 onward). The latest amended analysis estimates the ongoing local revenue impact at $76,000 per year starting in FY 2026-27.
Impact on Commerce and People
- Beneficiaries:
- Honorably discharged U.S. military veterans, including those in the National Guard and Reserves, who start or operate a business in Tennessee.
- Administrative Impact:
- Local governments will need to set up verification processes.
- No mandatory increase in local expenditures is assumed; the changes are designed to fit within existing administrative capacity.
Legislative and Procedural Notes
- Amendment History:
- Amendment 1 to HB 1108 modifies the bill by inserting “honorably discharged” in the relevant subsection and extending the effective date from July 1, 2025 to July 1, 2026.
- Sponsors:
- Primary sponsor: (House) Vaughan
- Co-sponsor: Karen Camper
- Related Actions:
- The bill has undergone committee consideration and scheduling as part of the normal legislative process (various subcommittee and committee actions listed in the action history).
Overall Effect
- The bill provides a targeted financial relief measure for veteran entrepreneurs by eliminating the business license fee for eligible veterans, while outlining administrative steps for verification and maintaining existing licensing frameworks. The trade-off is a predictable recurring reduction in local license fee revenue, starting in fiscal years beginning 2026-27.
