NASHVILLE -- Gov. Bill Haslam has signed a bill that offers more outright cash grants than tax incentives to attract companies to locate or expand in Tennessee.
The legislation aims to support economic development in rural communities and on major projects with significant impact.
Tennessee's current FastTrack program makes grants to local industrial development boards for employee job training and infrastructure improvements, such as at Volkswagen's Chattanooga plant.
Haslam's initiative expands the program to help pay costs for relocation, retrofitting, office upgrades or temporary space for companies making investments in the state.
"Tennessee is recognized as one of the best places to do business in the country," Haslam said in a statement. "This legislation gives us another tool in the toolbox to help make Tennessee the No. 1 location in the Southeast for high-quality jobs by focusing on our rural communities and recruiting and growing significant jobs."
According to a legislative analysis, Tennessee appropriated $217.5 million in FastTrack grants over the past three budget cycles. The budget that takes effect July 1 includes another $80 million.
The legislation emerged after the Department of Economic and Community Development spent a year reviewing incentive programs and taking feedback from companies, site selection consultants and others.
"We basically learned from our time in the field that companies value the grants more than they value or understand the tax credits," said Clint Brewer, the department's assistant commission of communications and creative services.
He said cash grants are immediate, tangible assistance and are more transparent than tax credits.
Haslam was forced to abandon a companion bill that would have allowed the state to seek more detailed information from companies getting taxpayer-funded grants. Critics objected to provisions that allowed such companies to keep ownership information secret.
The governor and Economic and Community Development Commissioner Bill Hagerty unsuccessfully argued the state doesn't now have such information, and having it would help the state make sounder investment decisions.