Tennessee Gov. Bill Lee signed legislation last week enacting a State LIHTC subject to allocation by the state Legislature. H.B. 1046 creates the Tennessee Rural and Workforce Housing tax credit, which may be awarded to recipients of the Federal LIHTC. The statewide credit cap is subject to authorization by the Legislature and at least 50 percent of the credits will be allocated to projects in rural areas. Tax credits must be authorized by a joint resolution of the Tennessee General Assembly and must be allocated in the year they are authorized. The credit may be carried forward for up to 25 years. The legislation is effective July 1, 2024.