Tennessee Code Title 7. Consolidated Governments and Local Governmental Functions and Entities § 7-56-101

(a) Any municipality or county incorporated or existing under the laws of Tennessee, or any combination of any municipality or county incorporated or existing under the laws of Tennessee, intrastate or interstate, has authority to establish, acquire, purchase, construct, extend, improve, maintain, operate or franchise a public transportation system, including the acquisition of any type of vehicles necessary, car barns, terminals, garages, repair shops, buildings, lands, accessory apparatus, rights-of-way and easements, and all other appurtenances necessary, usual or proper to such a public transportation system for hire of passengers in the municipalities, counties, and the metropolitan area of the municipalities and counties, including the right to extend such service beyond county lines in the state, and upon compliance with the laws of other states, into foreign states. Such a system for the transportation of passengers may be under the direct jurisdiction, control and management of such municipality, county, or combination of municipality and county, or any such municipality, county, or combination of municipality and county, is hereby authorized to create a transit authority or other operating or management entity by ordinance or resolution, for the purpose of managing such a public transportation system, and to prescribe the qualifications and eligibility of members of such a transit authority, their terms of office, powers and duties.

(b) Regardless of any private acts to the contrary, the municipality, county, or combination of municipality and county, may dissolve any existing transit authority under such private act, and establish by ordinance a transit authority as authorized in this part with the right of the legislative body of the municipality or county to approve the budget and set the rates of fare. The municipality, county, or combination of municipality and county, shall have the right pursuant to the approval of the governing body of the municipality, county, or combination of municipality and county, to contract with a private management firm to operate the transit authority, or to employ its own personnel for the purpose of operating the transit authority.