Economic and Community Development - As enacted, prohibits an employer seeking to receive an economic development incentive from the state from entering into a community benefits agreement or similar legal contract if th, the official text

... .·•  ...

:"c,:;/

!~!,-         E)H):
! llj\ ;.-;!:~'::::. }/:;J :

         ~

~tate of mennessee

PUBLIC CHAPTER NO. 151

                                                  HOUSE BILL NO. 1096

By Mr. Speaker Sexton and Representatives Vaughan, Lamberth, Renea Jones, Burkhart,
                                                        Todd, Howell

                                       Substituted for: Senate Bill No. 1074

                                            By Senators Johnson, Powers

         AN ACT to amend Tennessee Code Annotated, Title 4, relative to community benefits
agreements.

          WHEREAS, Tennessee, as part of its economic development policy, has the right to set
terms and conditions in connection with the awarding of economic development incentives; and

          WHEREAS, Tennessee, as part of its economic development policy, seeks to play an
integral role in the formulation of economic opportunities, conditions of grants, and general
management of compliance with such awards of money; and

          WHEREAS, Tennessee will oftentimes, as part of awarding economic development
incentives, oversee compliance with land use regulations, including management of a
subdivision of property; offer and provide water and wastewater services; require fire protection
systems and mechanical systems for buildings and structures; approve capital grants; and
ensure such is approved by the State Building Commission; and

          WHEREAS, Tennessee will oftentimes, as part of awarding economic development
incentives, also require a private business to hire a certain number of new full-time employees,
require a specific amount of company investment, and ensure workers obtain certain skills and
knowledge; and

          WHEREAS, Tennessee, as part of its economic development policy, has a vested
interest in seeking to advance and preserve its own interest in projects receiving economic
development incentives as a financer of projects contributing to the state's overall economic
health; now, therefore,

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Section 4-3-739(a), is amended by adding the
following new, appropriately designated subdivisions:

                    ( ) "Community benefits agreement" means an agreement or understanding of
          any type between an employer and a community group, organization, or other third-
          party, other than the state, that:

                               (A) Contractually binds the employer to fund or provide specific attributes,
                     services or amenities, mitigations, or anything of value to a community or
                     organization;

                               (B) Establishes employment criteria of any type or form, including wage
                     and hour criteria; or

                               (C) Provides for or requires the employer to utilize a trade union or other
                     unionized workforce where the employees collectively bargain with employers for
                     wages, hours, or working conditions;

                     ( ) "Community group" means an organized collective of people with similar
           interests or aims;

                     ( ) "Organization" means a nongovernmental entity of any type, including, but not
           limited to, a nonprofit corporation, an organization, a club, an association, or a group;
HB1096
          SECTION 2. Tennessee Code Annotated, Section 4-3-739(b)(1), is amended by adding

the following new subdivision:
                    (D) Enter into a community benefits agreement or any similar legal contract if the

          agreement or contract imposes obligations or conditions on the employer regarding
          employment practices, benefits, or operations that are not directly related to the
          performance of the employer's duties under the economic development incentive;
          SECTION 3. Tennessee Code Annotated, Section 4-3-739(d), is amended by adding the
following new subdivision:

                    (3) Subdivision (b)(1 )(D) applies to contracts, agreements, and understandings
          executed, renewed, or otherwise modified on or after July 1, 2025.
          SECTION 4. This act takes effect July 1, 2025, the public welfare requiring it.

                                                                 2
                    HOUSE BILL NO. 1096

PASSED:  March 24. 2025

                                c-7~

                                 CAMERON SEXTON, SPEAKER
                                HOUSE OF REPRESENTATIVES

                         n- 2'~~~~-
                                                         RAND~f MC,ALLY
                                            SPEAKER OF THE SENATE

r APPROVED this     ftp day of  IY(      2025

                    l~

BILL LEE, GOVERNOR