Economic and Community Development

Plain English Breakdown

The bill summary does not provide specific details on the initial funding amount for the automotive tariff relief fund.

Automotive Supply Chain Resilience and Expansion Act

This bill establishes a fund to provide grants and tax credits to automotive companies in Tennessee facing tariff-related disruptions.

What This Bill Does

• Creates an automotive tariff relief fund administered by the department of economic and community development to issue grants for cost mitigation, inventory diversification, workforce retention, or capital investment to eligible entities facing tariff-related disruptions.
• Provides refundable tax credits and low-interest loans up to 30% of qualifying investment expenditures to eligible entities that relocate critical supply operations, expand domestic sourcing within Tennessee, or invest in technology to reduce reliance on imports affected by tariffs.
• Expands export support services for eligible entities seeking new international markets, including financing assistance, trade mission subsidies, foreign regulatory compliance, and market entry consulting.
• Establishes an automotive resilience task force to monitor federal trade actions, assess economic impacts on the automotive sector, and recommend policy changes.

Who It Names or Affects

• Automotive manufacturers and suppliers in Tennessee
• State procurement agencies

Terms To Know

Eligible entity

Any automotive manufacturer or supplier operating in Tennessee

Tariff-related disruption

Increased costs, reduced revenues, or supply interruptions caused by federal tariffs or foreign retaliatory measures

Limits and Unknowns

• The bill does not specify the initial funding amount for the automotive tariff relief fund.
• It is unclear when the task force's first report will be submitted.

Official Summary Text

This bill establishes the
automotive tariff relief fund, to be administered by the department
of economic and community development ("department").
The purpose of the fund is to issue grants to eligible entities that demonstrate hardship due to increased costs, reduced revenues, or supply interruptions resulting directly or indirectly from federal tariffs or foreign retaliatory measures.

Grants may be used for cost mitigation, inventory diversification, workforce retention, or capital investment.

The department
must
promulgate rules to create grant application procedures and documentation requir
ements.

This bill requires the department to
provide refundable tax credits and low-interest loans to eligible entities that
(i) r
elocate critical supply operations
, (ii) e
xpand domestic sourcing within this state
,
or

(
iii
)
i
nvest in technology or equipment that mitigates reliance on tariff-affected imports.

The amount of any
such
credits must not exceed 30% of qualifying investment expenditures.

This bill requires the department to
expand export support services to eligible entities seeking new international markets.

Services may include export financing assistance, trade mission subsidies, foreign regulatory compliance, and market entry consulting.

The department
must
prioritize businesses impacted by foreign retaliatory tariffs.

This bill authorizes s
tate procurement agencies
to (i) a
djust bid scoring to reflect cost increases from tariffs
, (ii) gr
ant temporary preference to domestic suppliers impacted by trade measures
,
and

(
iii
)
m
odify contract requirements to allow use of alternative materials.

The department of finance and administration
must
promulgate rules to effectuate this
paragraph.

AUTOMOTIVE RESILIENCE TASK FORCE

This bill establishes the
automotive resilience task force, composed of five members appointed by the governor. The task force must consist of representatives from industry, labor, academia, and state and local government.

The task force
must (i) m
onitor federal trade actions and foreign retaliatory measures
,
(
ii
)
a
ssess economic impact on the automotive sector
,
and

(
iii
)
r
ecommend policy responses and industry adaptations.

The task force
must
submit a biennial report of its findings and recommendations to the speaker of the senate and the speaker of the house of representatives no later than December 31 of each year the report is due.

Current Bill Text

<BillNo> <Sponsor>

SENATE BILL 2673
By Akbari
SB2673
011732
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 4,
Chapter 3, Part 7; Title 9; Title 12 and Title 67,
relative to the Automotive Supply Chain Resilience
and Expansion Act.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 4, Chapter 3, Part 7, is amended by
adding the following as a new section:
(a)
(1) This section is known and may be cited as the "Automotive Supply
Chain Resilience and Expansion Act."
(2) The purpose of this section is to provide strategic support to the
automotive manufacturing sector in response to disruptions caused by federal
tariffs and global trade instability.
(3) As used in this section:
(A) "Department" means the department of economic and
community development;
(B) "Eligible entity" means any automotive manufacturer or
supplier operating in this state; and
(C) "Tariff-related disruption" means increased costs, reduced
revenues, or supply interruptions resulting directly or indirectly from
federal tariffs or foreign retaliatory measures.
(b)
(1) There is established the automotive tariff relief fund, to be
administered by the department.

- 2 - 011732

(2) The purpose of the fund is to issue grants to eligible entities that
demonstrate hardship due to tariff-related disruptions.
(3) Grants may be used for cost mitigation, inventory diversification,
workforce retention, or capital investment.
(4) The department shall promulgate rules to create grant application
procedures and documentation requirements.
(c)
(1) The department shall provide refundable tax credits and low-interest
loans to eligible entities that:
(A) Relocate critical supply operations;
(B) Expand domestic sourcing within this state; or
(C) Invest in technology or equipment that mitigates reliance on
tariff-affected imports.
(2) The amount of any credits provided under subdivision (c)(1) must not
exceed thirty percent (30%) of qualifying investment expenditures.
(d)
(1) The department shall expand export support services to eligible
entities seeking new international markets.
(2) Services may include export financing assistance, trade mission
subsidies, foreign regulatory compliance, and market entry consulting.
(3) The department shall prioritize businesses impacted by foreign
retaliatory tariffs.
(e)
(1) State procurement agencies may:
(A) Adjust bid scoring to reflect cost increases from tariffs;

- 3 - 011732

(B) Grant temporary preference to domestic suppliers impacted
by trade measures; and
(C) Modify contract requirements to allow use of alternative
materials.
(2) The department of finance and administration shall promulgate rules
to effectuate the purposes of this subsection (e).
(f)
(1) There is created the automotive resilience task force, composed of
five (5) members and appointed by the governor. The task force must consist of
representatives from industry, labor, academia, and state and local government.
(2) The task force shall:
(A) Monitor federal trade actions and foreign retaliatory
measures;
(B) Assess economic impact on the automotive sector; and
(C) Recommend policy responses and industry adaptations.
(3) The task force shall submit a biennial report of its findings and
recommendations to the speaker of the senate and the speaker of the house of
representatives no later than December 31 of each year the report is due.
SECTION 2. If a provision of this act or its application to a person or circumstance is
held invalid, then the invalidity does not affect other provisions or applications of the act that can
be given effect without the invalid provision or application, and to that end, the provisions of this
act are severable.
SECTION 3. This act takes effect July 1, 2026, the public welfare requiring it.