Tennessee law lets highly rated local governments provide worker housing

The law allows eligible local governments to acquire, develop, lease, and operate housing for essential employees. A local government must be a county, municipality, or metropolitan government with the highest rating category for its long-term general debt when the law takes effect. Essential employees are local government or public school workers whom the governing body finds critical to public services. Each development must have at least 100 homes and be identified as suitable for those workers. A local government may act through its housing authority and may hire private organizations or people to operate or maintain the housing. It may set rents and rental terms. It may secure lease payments with local funds, housing revenue, or an annual funding decision; leases under these payment arrangements may last no more than 55 years. Units may be rented to people who are not essential employees when essential employees do not need them. The law took effect when it became law.

Before acquiring, leasing, or developing essential housing, a local government must submit a plan to the state comptroller and receive a written finding that the plan is in the state's best interest. This applies when a local government acts directly or through its housing authority. The plan must describe the project's feasibility, any private partnership, risks to the local government, ways to reduce those risks, and why the plan is in the state's best interest. If the comptroller does not issue a written finding within 60 days after receiving a complete plan, the plan is treated as approved. The comptroller may request more information, and the 60-day period does not start until the plan is complete. The 60-day period starts when the comptroller receives a complete plan.

Local governments already allowed to issue bonds and notes may use them to buy or improve essential housing. The borrowing authority applies only to local governments already authorized by state law to issue bonds and notes. They must follow the applicable borrowing procedures, including submitting a plan to the comptroller. The law does not allow a local government, industrial development board, or housing authority to take private property through eminent domain for these projects. Counties, cities, and towns must meet state constitutional requirements before lending their credit to a private person or organization.

A regional retail tourism development district may include parcels in a county with at least 100,000 people that borders a county with two certified border region retail tourism development districts. The population threshold may be met under the 2010 federal census or any later federal census. The district must be within one-half mile of an interstate exit, within 20 miles of the state borders of two neighboring states, and no larger than 950 acres. A municipal ordinance must designate the district, and the commissioner must certify it.