Tennessee SB 220: Taxes, Ad Valorem - As introduced, creates the commercial development board; with respect to new commercial property developed by private entities in certain taxing jurisdictions, authorizes the private entities to enter into agreements for payments in lieu of ad valorem taxes and leases with the commercial development board. - Amends TCA Title 4; Title 5; Title 6; Title 7; Title 9; Title 13; Title 48 and Title 67.

Bill Text

HOUSE BILL 544
By Vaughan

SENATE BILL 220
By Taylor

SB0220
000647
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AN ACT to amend Tennessee Code Annotated, Title 4;
Title 5; Title 6; Title 7; Title 9; Title 13; Title 48 and
Title 67, relative to property tax incentives to
encourage economic and community
development.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 4-29-248(a), is amended by adding
the following as a new subdivision:
( ) Commercial development board, created by § 67-5-2902;
SECTION 2. Tennessee Code Annotated, Title 67, Chapter 5, is amended by adding
the following as a new part:
67-5-2901.
(a) The general assembly finds that authorizing payment in lieu of ad valorem
tax agreements and leases with private commercial developers who lease publicly
owned property for a specified period of time will encourage economic growth and
community development, including:
(1) Revenue gains from expanded economic activity attributable to the
tax incentives;
(2) Increases in property tax collections after expiration of the incentives;
(3) Enhancements in fiscal health and urban revitalization in local
communities; and
(4) Positive changes in community character.
(b) As used in this section:

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(1) "Board" means the commercial development board created by § 67-5-
2902;
(2) "Developer-lessee" means one (1) or more private persons or entities
identified as the developer in a PILOT and lease agreement entered into
pursuant to this section that leases a new commercial property and develops,
and places in service, the new commercial property on or after the effective date
of this act, and prior to the expiration of the PILOT agreement;
(3) "New commercial property" means a real property that:
(A) Is located within a county in which the combined property tax
rate imposed by all affected taxing jurisdictions within that county exceeds
five dollars and fifty cents ($5.50) per one hundred dollars ($100) of
assessed value;
(B) Is solely developed for commercial use by a developer-
lessee; and
(C) Is owned by the commercial development board; and
(4) "PILOT" means payments in lieu of ad valorem taxes that are equal to
the taxes that would have been paid to the affected taxing jurisdictions if, for the
tax year prior to the year the property becomes a new commercial property, the
property was assessed at ten percent (10%) of its appraised value.
(c) Notwithstanding this chapter or other law to the contrary, upon written
requests submitted by developer-lessees to the commercial development board to enter
into agreements with respect to PILOTs and leases, and upon submission of a
reasonable fee in an amount determined by the board to offset the costs of administering
this part, the board shall approve the requests and receive from the developer-lessees
PILOTs with respect to new commercial property.

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(d) The board shall remit the PILOTs to each affected taxing jurisdiction. The
commercial development board shall attach to the PILOT agreements an analysis of the
costs and benefits of entering into such agreements. The analysis must contain a
finding by the board that the PILOTs are in furtherance of the board's public purposes. A
PILOT agreement entered into by the board must contain the following terms and
conditions:
(1) The PILOTs are payable to all affected taxing jurisdictions in which
the new commercial property is located; and
(2) The chair of the board has executed a letter supporting the lease of
new commercial property to developer-lessees.
(e) The board is serving a public purpose by negotiating and receiving from
developer-lessees PILOTs with respect to new commercial property.
(f) The board may acquire and lease a new commercial property in furtherance
of the public purpose of promoting economic and community development in the state.
(g) An agreement providing for the acceptance of PILOTs, including any renewal
or extension of such agreement, entered into by the board must not result in a
developer-lessee making PILOTs for a period that is greater than ten (10) years.
(h) PILOTs and any lease payments payable to the board are and remain a first
lien upon the fee interest in the leased property from January 1 of the year in which such
PILOTs or lease payments are due. The board may enforce such lien, and also obtain
interest at ten percent (10%) per annum from the date due and reasonable attorneys'
fees, by suit filed in the circuit or chancery court.
(i) On or before October 1, 2026, and on or before October 1 of each
subsequent year, the board shall submit to the comptroller of the treasury an annual
report containing:

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(1) A list of all new commercial property owned by the board;
(2) The value of each listed new commercial property as estimated by
the board;
(3) The date and term of the lease for each listed new commercial
property;
(4) The amount of PILOTs for each listed new commercial property;
(5) The date each listed new commercial propert