The bill amends Tennessee Code Annotated, Title 67, to redefine "certified green energy production facility" to include nuclear energy production facilities. This change allows nuclear facilities to qualify for pollution control tax credits, previously reserved for renewable energy sources like wind. Additionally, the legislation exempts specific machinery and equipment used in uranium enrichment, deconversion, and conversion from sales and use taxes, reducing operational costs for nuclear energy producers.
Tennessee has long been a hub for nuclear energy innovation, with four existing nuclear plants—Sequoyah 1 and 2, and Watts Bar 1 and 2. The state is also home to a growing nuclear supply chain, with over 230 nuclear-related companies operating within its borders. The passage of HB 1133 aligns with Tennessee’s broader strategy to expand its nuclear energy ecosystem, as outlined in the Tennessee Nuclear Energy Advisory Council’s 2024 report.
One of the most notable developments in Tennessee’s nuclear sector is the planned deployment of a Small Modular Reactor (SMR) at the Clinch River Nuclear Site. The Tennessee Valley Authority (TVA) has been actively exploring SMR technology, which offers a more flexible and cost-effective approach to nuclear power generation. The tax incentives introduced by HB 1133 could further encourage investment in SMR projects, positioning Tennessee as a leader in next-generation nuclear energy.
Governor Bill Lee has emphasized the importance of nuclear energy in Tennessee’s economic strategy, proposing a $92.6 million investment to boost the sector. This funding includes support for TVA’s SMR project and initiatives to strengthen the state’s nuclear workforce. The bill’s tax exemptions are expected to reduce financial barriers for nuclear energy producers, making Tennessee a more attractive destination for nuclear investments.
However, the fiscal impact of HB 1133 remains uncertain. The Tennessee Fiscal Review Committee noted that the extent and timing of foregone state and local revenue due to tax-exempt purchases for nuclear facilities cannot be quantified with certainty. While the bill aims to stimulate industry growth, policymakers will need to monitor its long-term economic effects.
The expansion of Tennessee’s nuclear energy sector comes at a time when the U.S. is seeking to triple its nuclear energy output by 2050. The bipartisan ADVANCE Act, signed into law last year, aims to accelerate the development of new nuclear reactors, including SMRs. Tennessee’s proactive approach to nuclear energy aligns with national efforts to enhance energy security and reduce reliance on foreign uranium suppliers.
The uranium enrichment and deconversion provisions in HB 1133 also reflect broader trends in nuclear fuel policy. The U.S. Department of Energy has been working to expand domestic uranium conversion capacity, reducing dependence on Russian-enriched uranium. Tennessee’s tax incentives could support this national objective by encouraging local uranium processing and fuel production.
