Amends TCA Title 7; Title 43 and Title 67.

This bill provides for the creation of urban agricultural areas and provides certain tax and other benefits for such areas, as discussed below. This bill authorizes a qualified farmer or nonprofit partner organization to apply to the municipal clerk for the establishment of an urban agricultural area, which this bill defines as an area within which one or more qualifying farmers are processing, growing, raising, or otherwise producing locally grown agricultural products. This bill sets out in detail the requirements for the application; requires the legislative body of a municipality that seeks to establish an urban agricultural area to first establish an urban agricultural area committee (discussed below); and requires the committee to conduct a public hearing prior to the adoption of an ordinance designating an urban agricultural area. For purposes of property tax assessments, real property located within an approved urban agricultural area that is used by a qualifying farmer for processing, growing, raising, or otherwise producing agriculture products will be assessed as farm property (instead of commercial property). Also, under this bill a municipality may authorize an entity that provides water, electricity, or other utilities to an urban agricultural area to allow qualified farmers and partner organizations to: (1) Pay wholesale or otherwise reduced rates for service to property within the area that is used to process, grow, raise, or otherwise produce agricultural products; or (2) Pay reduced or waived connection charges for service to property within the area that is used to process, grow, raise, or otherwise produce agricultural products. This bill also prohibits: (1) A unit of local government that provides public services, such as sewer, water, lights, or non-farm drainage, from imposing benefit assessments or special ad valorem taxes on land within an urban agricultural area on the basis of frontage, acreage, or value unless the benefit assessments or special ad valorem taxes were imposed prior to the formation of the area or unless the service is provided to the landowner on the same basis as others having the service; and (2) A municipality from exercising any of its power to enact ordinances within an urban agricultural area in a manner that would unreasonably restrict or regulate farming practices in contravention of the purposes of this bill unless the restrictions or regulations have a direct relationship to public health and safety. This bill requires the legislative body of a municipality that seeks to create an urban agricultural area to first establish, after it receives an application as described above, a five-member urban agricultural area committee. One member of the committee must be a member of the municipality's legislative body, appointed by the legislative body. The chief executive of the municipality will appoint the remaining four members. Those four members must all be residents of the municipality in which the urban agricultural area is to be located, and at least one of the four must have experience in or represent an organization associated with sustainable agriculture, urban farming, or any of the activities or products authorized by this bill. This bill states that the role of the committee is to conduct the activities necessary to advise the legislative body on the designation or termination, as applicable, of an urban agricultural area and, after the designation of an area, to review and assess an area's activities. The legislative body will set the length of terms for committee members. For purposes of this bill, a "qualifying farmer" is an individual or entity that meets the criteria for at least one of the following categories: (1) Small or medium-sized farmer: a farmer who has received a Direct Farm Ownership Microloan, or a Direct Farm Operating Microloan, through the United States department of agriculture; (2) Beginning farmer: a farmer that has not operated a farm, or who has not operated a farm for more than 10 consecutive years, including all members of an entity that operates as a farmer, and that will materially and substantially participate in the operation of the farm; (3) Limited resource farmer: a farmer that has direct or indirect gross farm sales that are less than the current indexed value in each of the previous two years and a total household income at or below the national poverty level for a family of four, or less than 50 percent of the county median household income in each of the previous two years, and includes an entity or joint all operation if all individual members qualify; (4) Socially disadvantaged farmer: a farmer that is a member of a socially disadvantaged group. This designation includes an entity if at least 50 percent ownership in the farm business is held by socially disadvantaged individuals. Socially disadvantaged groups, which are groups whose members have been subject to racial or ethnic prejudice because of their identity as members of the group, without accounting individual qualities, include American Indians, Asians, and African Americans. Also, a "partner organization" is defined as a 501(c)(3) nonprofit organization whose mission includes supporting small, beginning, limited resource, or socially disadvantaged farmers in municipalities.