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HB 1096

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 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. - Amends TCA Title 4.

114th Regular Session (2025-2026) Introduced by Cameron Sexton

Tennessee law bars employers receiving state economic development incentives from signing community benefits agreements with unrelated employment or operational conditions.

Pub. Ch. 151
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Bill Summary · HB 1096

Legislative bill overview

HB 1096 prohibits employers receiving state economic development incentives from being required to sign community benefits agreements that impose conditions unrelated to performing their incentivized project. The law restricts what obligations states can attach to economic development deals, limiting agreements to matters directly tied to the specific incentivized work.

Why is this important

Economic development incentives are valuable but often contested. This bill shifts power by preventing states from using incentives as leverage to require broader commitments on wages, benefits, labor practices, or operations. It affects negotiations between governments and corporations seeking tax breaks, grants, or other state support for business expansion or relocation.

Potential points of contention

  • Labor and wage standards: Critics argue this prevents communities from negotiating living wages or union agreements as conditions for public subsidies, potentially allowing low-wage operations to receive state funding
  • Definition of "directly related": The phrase is subjective—disputes may arise over whether hiring local workers, workforce training, or diversity requirements relate directly enough to project performance
  • Community leverage loss: Local governments lose negotiating tools they previously used to secure affordable housing, environmental protections, or community benefits in exchange for incentives

Compiled from official sources — confirm details with the bill’s official record.

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