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Bill Haslam
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Mike Carter

NASHVILLE - A 13-month partial moratorium on property annexations by Tennessee towns and cities is now in effect after Gov. Bill Haslam signed the measure brought by two Hamilton County legislators.

The law, signed last week, halts forced annexations of residential and farm property already in progress prior to April 15 until May 15, 2014, unless a city can persuade county commissions to approve them.

New annexations of such property are banned during the same time frame unless property owners want to become part of a city.

That's intended to provide time for the Tennessee Advisory Commission on Intergovernmental Relations to study how a 1999 urban planning law, intended to bring order to annexations, has worked. TACIR serves as a forum on state and local issues.

"I very much appreciate the governor signing the bill in that it has the minimum restrictions on the cities and it does not restrict the growth of or development in commercial, industry and retail areas," Rep. Mike Carter, R-Ooltewah, the House sponsor, said Monday. "It only protects homes and farm property used primarily for agricultural process. It only protects ma and pa and ma and pa's farm."

Carter emphasized commercial, industry and retail property is "specifically exempted."

But Margaret Mahery, executive director of the Tennessee Municipal League, said towns and cities remain nervous about the moratorium's impact on cities' business recruitment efforts.

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Tennessee Senator Bo Watson

"My main concern is economic development and opportunities that might come along this year [and the moratorium] prevent a city from helping" make that happen, Mahery said.

Noting that job creation is one of Haslam's top issues, Mahery said, "There could be some damage done. Don't know where it's going to be, but the possibility lies there."

Haslam, a former Knoxville mayor, "deferred [to legislators] on the legislation, and after reviewing the bill in its final form, he was comfortable with the language," said David Smith, the governor's spokesman.

Sen. Bo Watson, R-Hixson, sponsored the bill in the upper chamber.

Collegedale Mayor John Turner said he doesn't know all the details of the final bill that passed, including what Carter characterized as safeguards to protect cities' ability to promote economic development.

"It completely stopped all residential annexations," Turner said.

Collegedale in the past year had been moving to annex areas "peripheral" to the city, the mayor said. Most of that involved "commercial boundaries" but some involved residences, he said.

One of Carter and Watson's original bills would have required that a referendum be held among voters in areas cities wanted to annex. Cities largely annex territory through ordinance, which involves two readings by a city's governing body. That leaves people with no voice because they're not yet city voters, the lawmakers say.

Carter and Watson argue that 47 states require referendums and Tennessee should too. Blocked by cities and their legislative advocates on that front, the partial moratorium and study became the fallback position.

Turner said he believes a referendum in residential areas "is the right thing to do. This is a free country."

In a letter last week to legislative colleagues, Carter says there are four ways cities can extend their boundaries in Tennessee. Three have input from residents, he said. The fourth is annexation by ordinance on the municipality's own initiative.