ORDINANCE NO. BL2017-983

ORDINANCE BL2017-983

An ordinance amending Chapter 2.210 of the Metropolitan Code of Laws to require certain information for the assessment of economic and community development incentives.

WHEREAS, the Metropolitan Government of Nashville is authorized and empowered by the laws of the State of Tennessee to provide certain financial incentives to qualified private entities in furtherance of the goals of economic and community development; and

WHEREAS, the General Assembly of the State of Tennessee authorized the incorporation of public corporations known as “industrial development boards” in municipalities in the state of Tennessee pursuant to the Industrial Development Corporations Act (“Act”), currently codified at Tenn. Code Ann. §§ 7-53-101 through -316, to provide certain of these financial incentives; and

WHEREAS, the Act, at Tenn. Code Ann. § 7-53-305, specifically authorizes payments in lieu of taxes, or PILOT incentives, as one type of incentive within the discretion and authority of these duly authorized industrial development boards to be awarded to qualified projects in furtherance of the General Assembly’s stated development goals; and

WHEREAS, an industrial development board (IDB) has been duly organized and incorporated in Nashville and Davidson County, Tennessee in compliance with the Act, and Chapter 2.210 of the Metropolitan Code of Laws authorizes the metropolitan government to make economic and community development incentive grants to the IDB for qualified projects in order to encourage economic and community development within the boundaries of the metropolitan government; and

WHEREAS, the Industrial Development Corporations Act, at Chapter 209 of the Public Acts of 1955, states that the declared purpose of the Act is to do that which the state welfare demands and the state public policy requires to alleviate the problems of unemployment, to raise family income, to provide a means by which the citizens of the community may promote and develop industry in their area so as to obtain a balanced economic development highly essential to the welfare of the state, and to promote the development of commercial, industrial, agricultural and manufacturing enterprises by the several municipalities so as to be given local benefits peculiar to each and general benefits to the entire state; and

WHEREAS, the Tennessee General Assembly also has declared that the purposes of the Act include maintaining and increasing employment opportunities by promoting industry, trade and commerce by inducing manufacturing, industrial, financial, service and commercial enterprises to locate or remain in the state; and

WHEREAS, the Tennessee General Assembly has further declared that industrial development boards perform a public function on behalf of the municipalities they serve, and that such boards are a public instrumentality thereof. The Supreme Court of Tennessee has found that the Industrial Development Board of the Metropolitan Government of Nashville and Davidson County IDB is an agency or instrumentality of the Metropolitan Government. (West v. Industrial Development Board, 332 S.W.2d 201 (1960); and

WHEREAS, it is fitting and proper that the Metropolitan Government adopt policies ensuring that local incentives disseminated by the IDB, upon approval of the Metropolitan Council, are distributed consistent with the declared purposes of industrial development boards.
NOW, THEREFORE, BE IT ENACTED BY THE COUNCIL FOR THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY, TENNESSEE:

SECTION 1: Section 2.210.030 of Metropolitan Code is hereby amended by deleting it in its entirety and substituting in lieu thereof the following:

2.210.030 - Approval of economic and community development incentive grant agreements and PILOT agreements.

A. This Section applies to two types of financial incentives provided through the Board: (1) economic and community incentive grants authorized by Section 2.210.020 and (2) payments in lieu of taxes, or PILOT incentives, authorized by Tenn. Code Ann. § 7-53-305. Any such grant or payment in lieu of taxes must be memorialized by a written agreement. The proposed grant or payment in lieu of taxes and the related agreement shall be submitted to the metropolitan county council for approval by resolution. Any such resolution must receive the affirmative votes of at least twenty-one members of the metropolitan county council in order for it to be approved. All such agreements that are to be funded by the metropolitan government shall provide that the metropolitan government's financial obligations thereunder are subject to the annual appropriation of funds by the metropolitan council.

B. To enable the metropolitan council’s assessment of qualified projects, and to determine whether the public interest is served by the incentive under consideration, the ECD shall solicit from qualified companies seeking a grant or payment in lieu of taxes a project proposal that addresses each of the following:

1. The type and number of jobs that will be created -- both during and after construction, if any -- by the qualified company on the project, including whether those jobs will be temporary or permanent, and the number of identified jobs that will be filled by Davidson County residents;
2. Establishment of a workforce plan disclosing: (a) whether the qualified project will involve use of temporary or staffing agencies, the Nashville Career Advancement Center, or other third parties for identifying, recruiting or referring job applicants (b) whether the individuals hired for the jobs identified will be employed by the company or by subcontractors or other third parties; and (c) the wages and benefits offered for the identified jobs, and a comparison of those wages to the average wage levels in Davidson County for comparable positions;
3. Whether the qualified project will involve the use of apprentices from programs certified by the U.S. Department of Labor; and
4. The number and type, within the preceding ten (10) years, of (a) violations assessed by the U.S. Department of Labor – Occupational Safety and Health Administration and/or by the Tennessee Occupational Safety and Health Administration against the qualified company, or any contractor or subcontractor of the company; or (b) employment or wage-related legal actions filed within federal or state courts against the qualified company, or any contractor or subcontractor of the company.
The ECD shall present this project proposal to the metropolitan council prior to the council’s vote on the incentive and related agreement. The qualified company’s project proposal shall be incorporated into the agreement upon approval by the metropolitan council.

C. To enable the continued assessment of qualified projects, and to confirm that the public interest is being served by the award of the incentive, each qualified company receiving a grant or payment in lieu of taxes shall submit to the ECD quarterly certificates of compliance with the agreement. On an annual basis, the ECD shall submit a report, approved by the Board, to the metropolitan council relaying compliance data, consistent with Section 2.190.010 of the Metropolitan Code. In the event such report shows that the qualified company failed to comply with its incentive agreement, the metropolitan council shall, in its discretion upon the affirmative votes of at least twenty-one members, suspend the incentive prospectively or terminate the incentive agreement prospectively.

SECTION 2: Section 2. That this Ordinance shall take effect from and after its passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.

Sponsored by: Anthony Davis, Fabian Bedne, Erica Gilmore, Kathleen Murphy, Freddie O'Connell, Russ Pulley, Dave Rosenberg, Brett Withers, Antoinette Lee, DeCosta Hastings, Jeremy Elrod, Burkley Allen, Colby Sledge, Tanaka Vercher, Jason Potts, Karen Johnson, Kevin Rhoten, Jeff Syracuse, Nancy VanReece, Nick Leonardo, Brenda Haywood, Mina Johnson

AMENDMENT NO. 1
TO
ORDINANCE NO. BL2017-983

Mr. President –

I move to amend Ordinance No. BL2017-983 as follows:

I. By amending Section 1 by deleting it in its entirety and substituting therefore the following:

SECTION 1: Section 2.210.030 of Metropolitan Code is hereby amended by deleting it in its entirety and substituting in lieu thereof the following:

2.210.030 - Approval of economic and community development incentive grant agreements and PILOT agreements.

A. This Section applies to two types of financial incentives provided through the Board: (1) economic and community incentive grants authorized by Section 2.210.020 and (2) payment-in-lieu-of-taxes (PILOT) incentives, authorized by Tenn. Code Ann. § 7-53-305. Any such grant or PILOT incentive must be memorialized by a written agreement. The proposed grant or PILOT incentive and the related agreement shall be submitted to the metropolitan county council for approval by resolution. Any such resolution must receive the affirmative votes of at least twenty-one members of the metropolitan county council in order for it to be approved. All such grant agreements authorized under section 2.210.020 that are to be funded by the metropolitan government shall provide that the metropolitan government's financial obligations thereunder are subject to the annual appropriation of funds by the metropolitan council.

B. To enable the metropolitan council’s assessment of qualified projects, and to determine whether the public interest is served by the incentive under consideration, and to promote a transparent process, the mayor’s office of economic and community development (ECD) shall solicit from qualified companies seeking a grant or PILOT incentive for a project, a project proposal that addresses each of the following:

1. The type and number of jobs that will be created -- both during and after construction, if any -- by the qualified company on the project, including whether those jobs will be temporary or permanent, and the number of identified jobs that will be filled by Davidson County residents;
2. Establishment of a workforce plan disclosing: (a) whether the qualified project will involve use of temporary or staffing agencies, the Nashville Career Advancement Center, or other third parties for identifying, recruiting or referring job applicants; (b) whether the individuals hired for the jobs identified will be employed by the company or by subcontractors or other third parties; and (c) the wages and benefits offered for the identified jobs, and a comparison of those wages to the average wage levels in Davidson County for comparable positions;
3. Whether the qualified project will involve the use of apprentices from programs certified by the U.S. Department of Labor; and
4. The number and type, within the preceding seven (7) years, of (a) violations assessed by the U.S. Department of Labor – Occupational Safety and Health Administration and/or by the Tennessee Occupational Safety and Health Administration against the qualified company, or any contractor or subcontractor of the company retained on the qualified project; or (b) employment or wage-related legal actions filed within federal or state courts against the qualified company, or any contractor or subcontractor of the company retained on the qualified project.

The ECD shall present this project proposal to the metropolitan council prior to the council’s vote on the incentive and related agreement. The qualified company’s project proposal shall be incorporated into the agreement upon approval by the metropolitan council. The ECD shall further present the information required under this section B in any report required to be submitted to the metropolitan council under its workforce development program developed under section 2.211.

C. To enable the continued assessment of qualified projects, and to confirm that the public interest is being served by the award of the incentive, each qualified company receiving a grant or payment in lieu of taxes shall submit to the ECD quarterly reports demonstrating compliance with the agreement. With respect to grants awarded under section 2.210.020, the ECD shall submit an annual report to the metropolitan council relaying compliance data, consistent with Section 2.190.010 of the Metropolitan Code. In the event such report shows that the qualified company failed to comply with its incentive agreement, the metropolitan council may, in its discretion upon the affirmative votes of at least twenty-one members, suspend the incentive prospectively or terminate the incentive agreement prospectively.

LEGISLATIVE HISTORY
Introduced:	November 21, 2017
Passed First Reading:	November 21, 2017
Referred to:	Budget & Finance Committee
Deferred:	December 5, 2017
Amended:	December 19, 2017
Passed Second Reading:	December 19, 2017 - Roll Call Vote
Passed Third Reading:	January 2, 2018
Approved:	January 3, 2018
By: