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The Tennessee Pro-Entrepreneurship & AI Workforce Act (TN-AI-Workforce)

Tennessee state companion to the AI Workforce Act. Extends Tennessee Secretary of State business-formation services, the Tennessee Department of Economic and Community Development (FastTrack), and the Tenn. Code Ann. Sec. 67-4-2109 franchise and excise tax R&D-style credits.

THE TENNESSEE PRO-ENTREPRENEURSHIP & AI WORKFORCE ACT (TN-AI-WORKFORCE)

Vehicle: State passage. Tennessee General Assembly, regular session. Primary referral to House Commerce and Senate Commerce & Labor; tax provisions to House / Senate Finance, Ways and Means; education provisions to House / Senate Education.

SECTION 1. SHORT TITLE

This Act may be cited as the “Tennessee Pro-Entrepreneurship & AI Workforce Act (TN-AI-Workforce).”

SECTION 2. LEGISLATIVE FINDINGS AND INTENT

The General Assembly finds that Tennessee operates efficient business-formation services through the Secretary of State under Tenn. Code Ann. Title 48 (business entities); that the Tennessee Department of Economic and Community Development administers the FastTrack economic-development program under Tenn. Code Ann. Sec. 4-3-713; that the Tennessee Smart Start Small Business Guide and related entity-formation resources support new-entity formation; that Tenn. Code Ann. Sec. 67-4-2109 provides jobs-tax and other credits against franchise and excise taxes; that TDLWD administers Individual Training Accounts through 9 Local Workforce Development Areas; and that the Tennessee Information Protection Act (2023) under Tenn. Code Ann. Title 47 Ch. 18 Part 33 governs consumer data handling. This Act extends these frameworks.

TITLE I — DEFINITIONS & COORDINATION WITH TENNESSEE LAW

Sec. 101. Definitions

  1. (a) “Qualified AI startup” means a Tennessee-formed business entity under Tenn. Code Ann. Title 48 whose principal business is AI-related software or services and that has fewer than 50 full-time-equivalent employees at the time of claiming an incentive under Title IV.
  2. (b) “AI-displaced worker” means a Tennessee-domiciled worker whose separation is documented, by the former employer, as attributable in whole or substantial part to AI-driven process change.
  3. (c) “TDLWD provider” means a training provider on the Tennessee Eligible Training Provider List under 29 U.S.C. Sec. 3152 and Tenn. Code Ann. Title 50 Ch. 7.

Sec. 102. Coordination with Existing Tennessee Law

  1. (a) This Act shall be construed consistently with:
  • Tenn. Code Ann. Title 48 (business entities: Ch. 11-27 LLCs; Ch. 101-306 for-profit corporations).
  • Tenn. Code Ann. Title 67 Ch. 4 Parts 20-21 (franchise and excise taxes) and Sec. 67-4-2109 (credits).
  • Tenn. Code Ann. Sec. 4-3-713 (FastTrack).
  • Tenn. Code Ann. Title 50 Ch. 7 (TDLWD; workforce services).
  • Tenn. Code Ann. Title 49 Ch. 1 and Ch. 6 (K-12) and Title 49 Ch. 7 (postsecondary).
  • Tenn. Code Ann. Title 47 Ch. 18 Part 33 (Tennessee Information Protection Act).

TITLE II — STATE BUSINESS-FORMATION REFORM

Sec. 201. Secretary of State Business-Formation Streamlining

  1. (a) The Secretary of State shall operate a same-business-day formation pathway for domestic limited liability companies under Tenn. Code Ann. Title 48 Ch. 249 (Revised LLC Act) and for-profit corporations under Ch. 101 et seq.
  2. (b) The Secretary of State shall publish, not later than 12 months after the effective date of this Act, a machine-readable API for formation filings.

Sec. 202. One-Stop Tennessee Business Portal

  1. (a) The Department of Economic and Community Development, in coordination with the Secretary of State, Department of Revenue, and TDLWD, shall operate a One-Stop Tennessee Business Portal integrating:
  • Business-entity formation under Title 48.
  • Tennessee franchise and excise tax registration under Title 67 Ch. 4.
  • Tennessee unemployment-insurance tax registration under Title 50 Ch. 7.
  • TDLWD Employer of Record registration.

TITLE III — TENNESSEE AI WORKFORCE TRANSITION

Sec. 301. AI Workforce Transition Accounts

  1. (a) An AI-displaced worker may establish an AI Workforce Transition Account at a Local Workforce Development Area to pay tuition to a TDLWD provider for reskilling to an occupation covered by a TNRMC under TN-ACSA Sec. 201 or a Federal FRAC.
  2. (b) Funding shall be provided through state appropriations and Tennessee’s allocation of Federal workforce funds under 29 U.S.C. Sec. 3161 et seq.

Sec. 302. TDLWD Integration

  1. (a) TDLWD shall administer Accounts through the existing Local Workforce Development Area framework under Tenn. Code Ann. Title 50 Ch. 7.
  2. (b) Administrative overhead shall not exceed 10 percent of the amount appropriated under Sec. 301.

TITLE IV — TENNESSEE AI ENTREPRENEURSHIP INCENTIVES

Sec. 401. Tennessee AI-Startup Franchise and Excise Tax Incentive

  1. (a) A qualified AI startup may claim an incentive equal to a percentage of qualified in-State research and development expenditures, subject to an annual aggregate program cap set in the General Appropriations Act.
  2. (b) The incentive shall be administered by the Commissioner of Revenue consistent with existing Tenn. Code Ann. Sec. 67-4-2109 credit mechanics.

Sec. 402. Capital Access via FastTrack

  1. (a) The Department of Economic and Community Development is authorized to prioritize applications from qualified AI startups under FastTrack (Tenn. Code Ann. Sec. 4-3-713) consistent with its existing statutory mandate.
  2. (b) Nothing in this Section authorizes expansion of FastTrack’s aggregate authority beyond amounts appropriated.

TITLE V — K-12 & POSTSECONDARY AI FLUENCY

Sec. 501. K-12 AI-Fluency Curriculum Option

  1. (a) The State Board of Education, consistent with Tenn. Code Ann. Title 49 Ch. 1 Part 3 (academic standards), shall approve optional AI-fluency curriculum packages for use by school districts, public charter schools, and EFS participating schools under Title 49 Ch. 6 Part 26.
  2. (b) Curriculum packages shall be optional.

Sec. 502. Community-College & University AI-Fluency Programs

  1. (a) Institutions within the Tennessee Board of Regents System (community colleges and colleges of applied technology) and the University of Tennessee System may offer AI-fluency certificate programs aligning with the TNRMC Registry under TN-ACSA Sec. 201.
  2. (b) AI-fluency certificates aligned with a TNRMC shall be treated consistently with other workforce-certificate programs for purposes of THEC outcomes-based funding under Tenn. Code Ann. Sec. 49-7-202.

TITLE VI — IMPLEMENTATION & GENERAL PROVISIONS

Sec. 601. Severability

If any provision of this Act is held invalid, the invalidity shall not affect the remainder.

Sec. 602. Effective Date

This Act shall take effect July 1 of the year following enactment.

Canonical federal version: AI Workforce. Other Tennessee bills: TN-ACSA, TN-MEWRA, TN-GT&P.