Senate Bill 2672, also known as the "Tennessee Businesses First Act," aims to enhance local economic development by prioritizing local businesses in government contracting. The bill introduces a new section to Tennessee Code Annotated, Title 12, Chapter 4, Part 8, which mandates that local governments provide a thirty-day bidding period exclusively for local businesses for contracts exceeding $25,000 or $50,000, depending on whether they have centralized purchasing. If multiple local businesses submit bids, the contract may be tentatively awarded to the lowest responsible bidder. However, if only one local business bids, the local government can open the procurement to all bidders afterward, ensuring that local businesses remain eligible for consideration.

Additionally, the bill establishes criteria for defining a "local business" and outlines the qualifications necessary for local businesses to execute contracts. It prohibits out-of-county bidders from qualifying as local businesses through temporary or superficial means, such as creating a shell office. Local governments are also required to report annually on the percentage of contracts awarded to local businesses and the economic impact of these contracts. The act is set to take effect on July 1, 2026, and applies to contracts procured on or after that date.