Nashville, Tenn.–Two new bills (HB0020 and HB0045) designed to boost rural economic development have been filed by Representative Bruce Griffey (R-Paris) to be heard in the upcoming legislative session, which begins on January 12. As introduced, TN House Bill 20 lowers, from $500,000 to $250,000, the amount of the required capital investment within a 5 year period to be made by a business in a Tier 3 or Tier 4 enhancement county with a population less than 50,000 to qualify for a job tax credit. Additionally, the bill proposes to increase from $4,500 to $9,000, the amount of the job tax credit provided to the business.
“The vast majority of rural counties in Tennessee have been designated Tier 3 or 4 counties for purposes of TN job tax credit. Henry and Stewart Counties are Tier 3 counties along with Weakley, Decatur, Hardin, Gibson, Dyer, Henderson, Chester, Crockett, Humphreys and Lawrence Counties. Benton County is a Tier 4 county along with Carroll, Obion, Lake, Houston, McNairy, Perry, Wayne, Lewis, Hardeman, Haywood and Lauderdale Counties,” Griffey said. “A standard job tax credit is available to businesses that invest in Tennessee and create jobs as a result of the investment, and the job tax credit may offset up to 50% of the taxpayer’s franchise and excise taxes with any unused credit carried forward up to 15 years. My bill will give twice as much incentive for a business to invest in a rural county as opposed to a metropolitan area such as Nashville, Memphis, Knoxville, Chattanooga, Clarksville, Dickson, or Murfreesboro, by way of example, that are already booming with business and development.”
The second bill that Griffey filed, House Bill 45, would create a rural relocation tax credit for certain out-of-state businesses that relocate to tier 3 and tier 4 enhancement counties with a population less than 50,000. “There are many businesses seeking to flee high tax states with burdensome government regulations such as Illinois, New York and California just to name a few. They are looking for a place to relocate and I want to give them as much incentive as possible to relocate to rural Tennessee where we are in desperate need of jobs for our community. One of my campaign platforms on which I ran for office was rural economic development and I intend to remain focused on that,” said Griffey.
This is not the first rural economic development legislation Griffey has proposed in Tennessee. Earlier this year, Griffey pursued two (2) other bills to fuel economic development and job creation in rural counties. One was House Bill 2703, which called for the establishment of a TN Rural Economic Development Fund into which 10% of any excess state tax revenues collected over budget would be placed. The money, which would have amounted to $63.6 Million annually based on 2018-2019 fiscal year numbers, would then be distributed to counties designated as “rural” by the Tennessee Department of Economic & Community Development.
Griffey’s second bill this past legislative session was House Bill 1586, under which the Department of Economic and Community Development would be required to develop a written plan by February 1, 2021 to ensure that two-thirds (2/3s) of all money they distribute are used for economic development in TN rural counties as measured on a per county basis for a 4 year period beginning July 1, 2021 and continuing until July 1, 2025.
“On average, urban counties in TN receive 3 times the amount of economic and community development dollars from the state as rural counties on a per county basis. For example, over roughly the last 4 years, urban counties received $15.75 million on average per county and rural counties only received $5.59 million on average per county. I want to flip the allocation of ECD dollars so more businesses are encouraged and motivated to move to rural areas in Tennessee,” he said.
“To illustrate the importance of my legislation, District 75 – my district consisting of the 3 rural counties of Benton, Henry and Stewart – collectively received from the state $7.7 million over the last 4 years for economic and community development while Shelby County (a single urban county) received over $70 million dollars. Another example is that Stewart County as an individual rural county only received $564,397 over the last 4 years while, by comparison, Davidson County as an individual urban county received over $64 million – over 113 times the amount of money Stewart County received. This allocation by the state is simply unfair and has resulted in metro areas such as Nashville booming and rural areas declining and hurting. The infrastructure of Nashville cannot handle continued exponential growth and a solution to the issue that benefits TN as a whole is to redirect economic and industrial development away from the metro areas to the rural areas, and, start by doing so through a reallocation of ECD dollars,” said Griffey.
“For far too long, the rural counties have been overlooked by businesses interested in relocating or expanding that naturally tend to gravitate towards urban developed areas. I intend to change this. Rural Tennessee and rural America has suffered tremendous damage as a result of NAFTA and the transfer of American manufacturing jobs to China for cheap and reported slave labor. These were horrible policies promoted by politicians in both parties. President Trump’s America First policies and leadership have demonstrated just how disastrous it has been for America and American workers to allow the wholesale relocation of good paying American jobs to foreign countries. We need to work with American businesses and manufacturing with regulation and tax relief so they can compete against unfair trade and labor practices. To these ends, I formed the Rural Caucus at the legislature for this very purpose, and if every legislator whose district includes a rural county supported and voted in favor of these bills, they would have a chance of passing. However, it will require legislators in rural areas of TN to stick together,” Griffey concluded.