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SB 889

Taxes - As enacted, increases, by 15 cents over a 10-year period, and subject to a two-thirds vote of the county legislative body, the maximum mineral severance tax rate that may be levied by a county on all sand, gravel, sandstone, chert, and limestone severed from the ground within its jurisdiction; removes the authorization for Smith County to allocate its mineral severance tax to the county general fund or a fund other than its county road fund. - Amends TCA Title 67, Chapter 7, Part 2.

114th Regular Session (2025-2026)

Tennessee law increases county mineral severance tax by 15 cents over 10 years and forces Smith County to dedicate revenue to roads rather than general fund allocation.

Comp. became Pub. Ch. 285
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Bill Summary · SB 889

Legislative bill overview

SB 889 increases Tennessee counties' maximum mineral severance tax on sand, gravel, sandstone, chert, and limestone by 15 cents over 10 years, subject to a two-thirds county legislative vote. It also restricts Smith County from allocating its mineral severance tax revenue to the general fund, requiring it to go to the county road fund instead.

Why is this important

This bill affects funding mechanisms for county infrastructure, particularly roads, by tying mineral extraction tax revenue to specific uses rather than allowing flexible allocation. The gradual tax increase gives counties modest new revenue options for road maintenance, which is often underfunded in rural areas with active quarrying operations.

Potential points of contention

  • Revenue flexibility vs. dedicated funding: Smith County loses discretion over how to spend its severance tax revenue, which may conflict with that county's budgeting priorities and needs
  • Impact on mining operations: The 15-cent increase over a decade may affect quarrying companies' operational costs and competitiveness, potentially impacting employment in extraction industries
  • Inequitable application: The bill applies general rules to all counties but includes a specific restriction only on Smith County, raising fairness questions about why that county is singled out

Compiled from official sources — confirm details with the bill’s official record.

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