Tenn. Code Ann. § 7-56-105

Any municipality, county, or combination of municipality and county, or a transit authority created by it, has the power to enter into such agreements with other municipalities and counties within the state for the joint establishment, purchase and operation of public transportation systems in a metropolitan area. Such municipality, county, or combination of municipality and county, or a transit authority created by it, or a combination of municipalities, counties, or other political subdivisions, likewise has the authority to enter into agreements with other states and the counties and municipalities of other states, by interstate compact, or by agreement under the Interlocal Cooperation Act, compiled in title 12, chapter 9.