Tennessee Code 4-3-731 – Execution of a separate agreement when grant or loan contract reserves right of recovery if person or entity fails to fulfill commitments – Execution of separate agreement in conjunction with capital grant contract – Reports
(a) Notwithstanding any law to the contrary, the department of economic and community development shall execute a separate agreement in conjunction with any grant or loan contract awarded pursuant to § 4-3-717(d)(1) that reserves the right of the department to recover the amount of money, grants, funds, or other incentives disbursed by the department, in whole or in part, if the person or entity benefitting from such money, grants, funds, or other incentives fails to fulfill the commitments made by such person or entity to the department.
Terms Used In Tennessee Code 4-3-731
Baseline: Projection of the receipts, outlays, and other budget amounts that would ensue in the future without any change in existing policy. Baseline projections are used to gauge the extent to which proposed legislation, if enacted into law, would alter current spending and revenue levels.
Contract: A legal written agreement that becomes binding when signed.
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
(b) For any grant or loan contract awarded pursuant to § 4-3-717(d)(1) on or after July 1, 2014, the department shall publish all baseline reports or annual reports filed with the department pursuant to this section on its website within ninety (90) days of receipt. For any grant or loan contract awarded pursuant to § 4-3-717(d)(1) between May 27, 2005, and January 1, 2011, the recipient shall be required to file a one-time report by February 1, 2015. The department shall provide a form for the reports that shall request, at a minimum:
(1) The name of the development authority which administers the grant;(2) The name of the eligible business;(3) For baseline reports, the number of existing employees of the eligible business;(4) For annual reports, the number of net new jobs for the reporting period, as well as the number of cumulative net new jobs of the eligible business, and the total amount of the grant; and(5) Any other information that may be required by the department.(c) As used in this section:
(1) “Annual report” means a report which is delivered to the department by an eligible business after execution of a grant or loan contract awarded pursuant to § 4-3-717(d)(1) on an annual basis which details the number of net new jobs for the reporting period as well as the number of cumulative net new jobs; and(2) “Baseline report” means a report which is delivered to the department by an eligible business upon execution of a grant or loan contract awarded pursuant to § 4-3-717(d)(1) which details the number of existing employees of an eligible business.(d) Notwithstanding any law to the contrary, the department shall execute a separate agreement in conjunction with any capital grant contract awarded pursuant to chapter 15 of this title, for economic development purposes. The separate agreement must reserve the right of the department to recover the amount of grants, funds, or other incentives disbursed by the department of finance and administration pursuant to the grant contract, in whole or in part, if the person or entity benefitting from the grants, funds, or other incentives fails to fulfill the commitments made by the person or entity to the department of economic and community development.(e)(1) At least once each year, the department shall report to the fiscal review committee on any new clawback rights being executed by the department during the current year, as well as any clawback rights from previous years that are still being collected by the department during the current year.(2) As used in this subsection (e), “clawback” means a provision in an agreement or a separate agreement that reserves the right of the department to recover the amount of money, grants, funds, or other incentives disbursed by the department, in whole or in part, if the person or entity benefitting from such money, grants, funds, or other incentives fails to fulfill the commitments made by such person or entity to the department.(f)(1) Notwithstanding another law to the contrary, prior to contracting to award an economic development incentive, as defined in § 4-3-739, the department of economic and community development must execute a separate agreement with the recipient of the incentive that reserves the right of the department to recover the amount of money, grants, funds, or other incentives disbursed by the department, in whole or in part, if the recipient benefitting from such money, grants, funds, or other incentives fails to comply with § 4-3-739.(2) The separate agreement required by subdivision (f)(1) must have a term of not less than:
(A) The term the department would require for an agreement executed pursuant to § 4-3-731(d), for an economic development incentive of less than twenty-five million dollars ($25,000,000); or(B) Ten (10) years, for an economic development incentive of twenty-five million dollars ($25,000,000) or more.
