Committee approves ban on community benefit agreements for companies receiving state economic incentives

The House Commerce Committee on Monday approved House Bill 10,096, a measure that prohibits companies that receive economic-development incentives from the Tennessee Department of Economic and Community Development (ECD) from entering into community benefit agreements with local organizations or jurisdictions. The committee passed the bill, as amended, by a 17-5 vote.

Committee chairman Kevin Vaughn, presenting the bill for Speaker Sexton, described community benefit agreements as “benefits that are supplemental to awards that ECD may make to a company” and said the bill was intended to prevent potentially open-ended conditions that could affect relocation decisions. “What we're saying is is that if you receive ECD benefits, then it you are not allowed to enter into a community benefit agreement,” Vaughn said during his presentation.

Proponents, including Leader Cochran during floor discussion, said the bill protects the state’s investment of taxpayer dollars by preventing additional conditions that could affect a company’s performance of agreed job and investment targets. The committee attached an amendment giving the measure an effective date of July 1, 2025; Chairman Vaughn told members he would encourage ongoing negotiations to be concluded by June 30 if parties wished to preserve agreements already in progress.

Opponents said the bill would chill voluntary agreements that provide local benefits such as affordable housing, daycare, workforce training and public amenities. Representative Clemons argued community benefit agreements are “sometimes voluntary” and frequently deliver services, internships and housing that “benefit the community,” and said the measure would prevent companies from offering those voluntary benefits. Representative Hemmer described a recent local negotiating process that produced daycare, workforce housing, green space and other amenities and said the bill would “put a chill into that effect.” Representative Hardaway emphasized that residents and local governments should retain avenues to express local priorities.

Committee members also discussed transition rules. Leader Camper asked whether in-progress negotiations would be affected; the chair pointed to the bill amendment setting the July 1, 2025 effective date and urged concluding pending negotiations before that date. The committee recorded the motion to attach amendment 3718 and voted to approve the bill as amended. The committee clerk reported 17 ayes and 5 nos on the final vote.

The bill will now advance to calendar and rules. The committee record includes a fiscal note absence noted on the floor during the vote.

Ending: The committee’s vote formalizes limits on community benefit agreements tied to state incentives, while leaving for later resolution how local and state economic-governance interests will coordinate on projects already under negotiation.