Tennessee 2025-2026 Regular Session

Tennessee Senate Bill SB0220 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2		-	HOUSE BILL 544
3		-	By Vaughan
	2	+	<BillNo> <Sponsor>
4	3
5	4		SENATE BILL 220
6	5		By Taylor
7	6
8	7
9	8		SB0220
10	9		000647
11	10		- 1 -
12	11
13	12		AN ACT to amend Tennessee Code Annotated, Title 4;
14	13		Title 5; Title 6; Title 7; Title 9; Title 13; Title 48 and
15	14		Title 67, relative to property tax incentives to
16	15		encourage economic and community
17	16		development.
18	17
19	18		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
20	19		SECTION 1. Tennessee Code Annotated, Section 4-29-248(a), is amended by adding
21	20		the following as a new subdivision:
22	21		( ) Commercial development board, created by § 67-5-2902;
23	22		SECTION 2. Tennessee Code Annotated, Title 67, Chapter 5, is amended by adding
24	23		the following as a new part:
25	24		67-5-2901.
26	25		(a) The general assembly finds that authorizing payment in lieu of ad valorem
27	26		tax agreements and leases with private commercial developers who lease publicly
28	27		owned property for a specified period of time will encourage economic growth and
29	28		community development, including:
30	29		(1) Revenue gains from expanded economic activity attributable to the
31	30		tax incentives;
32	31		(2) Increases in property tax collections after expiration of the incentives;
33	32		(3) Enhancements in fiscal health and urban revitalization in local
34	33		communities; and
35	34		(4) Positive changes in community character.
36	35		(b) As used in this section:
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38	37
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41	40		(1) "Board" means the commercial development board created by § 67-5-
42	41		2902;
43	42		(2) "Developer-lessee" means one (1) or more private persons or entities
44	43		identified as the developer in a PILOT and lease agreement entered into
45	44		pursuant to this section that leases a new commercial property and develops,
46	45		and places in service, the new commercial property on or after the effective date
47	46		of this act, and prior to the expiration of the PILOT agreement;
48	47		(3) "New commercial property" means a real property that:
49	48		(A) Is located within a county in which the combined property tax
50	49		rate imposed by all affected taxing jurisdictions within that county exceeds
51	50		five dollars and fifty cents ($5.50) per one hundred dollars ($100) of
52	51		assessed value;
53	52		(B) Is solely developed for commercial use by a developer-
54	53		lessee; and
55	54		(C) Is owned by the commercial development board; and
56	55		(4) "PILOT" means payments in lieu of ad valorem taxes that are equal to
57	56		the taxes that would have been paid to the affected taxing jurisdictions if, for the
58	57		tax year prior to the year the property becomes a new commercial property, the
59	58		property was assessed at ten percent (10%) of its appraised value.
60	59		(c) Notwithstanding this chapter or other law to the contrary, upon written
61	60		requests submitted by developer-lessees to the commercial development board to enter
62	61		into agreements with respect to PILOTs and leases, and upon submission of a
63	62		reasonable fee in an amount determined by the board to offset the costs of administering
64	63		this part, the board shall approve the requests and receive from the developer-lessees
65	64		PILOTs with respect to new commercial property.
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70	69		(d) The board shall remit the PILOTs to each affected taxing jurisdiction. The
71	70		commercial development board shall attach to the PILOT agreements an analysis of the
72	71		costs and benefits of entering into such agreements. The analysis must contain a
73	72		finding by the board that the PILOTs are in furtherance of the board's public purposes. A
74	73		PILOT agreement entered into by the board must contain the following terms and
75	74		conditions:
76	75		(1) The PILOTs are payable to all affected taxing jurisdictions in which
77	76		the new commercial property is located; and
78	77		(2) The chair of the board has executed a letter supporting the lease of
79	78		new commercial property to developer-lessees.
80	79		(e) The board is serving a public purpose by negotiating and receiving from
81	80		developer-lessees PILOTs with respect to new commercial property.
82	81		(f) The board may acquire and lease a new commercial property in furtherance
83	82		of the public purpose of promoting economic and community development in the state.
84	83		(g) An agreement providing for the acceptance of PILOTs, including any renewal
85	84		or extension of such agreement, entered into by the board must not result in a
86	85		developer-lessee making PILOTs for a period that is greater than ten (10) years.
87	86		(h) PILOTs and any lease payments payable to the board are and remain a first
88	87		lien upon the fee interest in the leased property from January 1 of the year in which such
89	88		PILOTs or lease payments are due. The board may enforce such lien, and also obtain
90	89		interest at ten percent (10%) per annum from the date due and reasonable attorneys'
91	90		fees, by suit filed in the circuit or chancery court.
92	91		(i) On or before October 1, 2026, and on or before October 1 of each
93	92		subsequent year, the board shall submit to the comptroller of the treasury an annual
94	93		report containing:
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99	98		(1) A list of all new commercial property owned by the board;
100	99		(2) The value of each listed new commercial property as estimated by
101	100		the board;
102	101		(3) The date and term of the lease for each listed new commercial
103	102		property;
104	103		(4) The amount of PILOTs for each listed new commercial property;
105	104		(5) The date each listed new commercial property is scheduled to return
106	105		to the regular tax rolls;
107	106		(6) The property address and parcel identification number of the new
108	107		commercial property assigned by the assessor of property;
109	108		(7) The amount of rents paid;
110	109		(8) The amount of any property taxes paid on any leasehold assessment
111	110		under § 67-5-502; and
112	111		(9) How the PILOTs are allocated between each affected city and county.
113	112		(j) A copy of the filing made pursuant to subsection (i) must be filed with the
114	113		assessor of property in the county where the property is located on or before October 15
115	114		of the year in which the filing is made with the comptroller of the treasury. The assessor
116	115		of property may audit or review, or both, the data report on all PILOT agreements and
117	116		conduct comparative analysis to ensure that all agreements are reported to the assessor
118	117		of property. The board shall timely complete and file the report.
119	118		(k) The board shall prepare biannual reports detailing all developer-lessees'
120	119		compliance with the terms and conditions of the PILOT agreement or any other
121	120		agreement whereby ad valorem taxes are substituted in favor of a PILOT. Such report
122	121		must detail the developer-lessees' compliance and noncompliance where applicable,
123	122
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127	126		and its fiscal impact on revenues generated from ad valorem taxes in each city and
128	127		county affected by such PILOT.
129	128		(l) All PILOT agreements must be reduced to writing and submitted to the chief
130	129		executive officer of each jurisdiction in which the property is located and to the
131	130		comptroller of the treasury, for review, but not approval. An agreement may be
132	131		submitted in advance of its execution but must be submitted within ten (10) days after its
133	132		execution. The name of individuals that are parties to the agreement may be obscured
134	133		on copies of agreements submitted in advance of their execution.
135	134		67-5-2902.
136	135		(a) There is created the commercial development board. The board consists of
137	136		eight (8) members as follows:
138	137		(1) Two (2) members to be appointed by the governor;
139	138		(2) Two (2) members to be appointed by the speaker of the house of
140	139		representatives;
141	140		(3) Two (2) members to be appointed by the speaker of the senate;
142	141		(4) The commissioner of economic and community development, or the
143	142		commissioner's designee, as an ex officio member; and
144	143		(5) The comptroller of the treasury, or the comptroller's designee, as an
145	144		ex officio, nonvoting member.
146	145		(b) The members appointed pursuant to subdivisions (a)(1)-(4) are voting
147	146		members.
148	147		(c) The terms for the initial board members who do not serve ex officio begin on
149	148		October 1, 2025, and must be staggered as follows:
150	149		(1) The members appointed pursuant to subdivision (a)(1) shall serve an
151	150		initial term of six (6) years;
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156	155		(2) The members appointed pursuant to subdivision (a)(2) shall serve an
157	156		initial term of five (5) years; and
158	157		(3) The members appointed pursuant to subdivision (a)(3) shall serve an
159	158		initial term of four (4) years.
160	159		(d) Following the terms for initial board members as provided in subsection (b),
161	160		the term for a board member who does not serve ex officio is four (4) years. A board
162	161		member who does not serve ex officio is eligible for reappointment and may serve a
163	162		maximum of two (2) full terms; provided, however, that an appointment to fill an
164	163		unexpired term as a result of a vacancy does not count toward the term limit. At the
165	164		expiration of a board member's term, the member may continue to serve until a
166	165		successor is appointed or until the member is reappointed.
167	166		(e) Five (5) board members constitute a quorum for the transaction of business.
168	167		If a quorum is present, a vacancy on the board does not prevent the board from
169	168		transacting business or otherwise taking an action authorized pursuant to this part. Any
170	169		form of board action must be passed by a majority of the voting members present.
171	170		(f) The commissioner of economic and community development serves as chair.
172	171		The board shall meet at the call of the chair. The board may elect other officers as the
173	172		board deems appropriate.
174	173		(g) The members appointed pursuant to subdivisions (a)(1)-(3) serve without
175	174		compensation, but may receive reimbursement for travel expenses in accordance with
176	175		the comprehensive travel regulations as promulgated by the department of finance and
177	176		administration and approved by the attorney general and reporter.
178	177		(h) The department of economic and community development shall provide
179	178		administrative support to the board.
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184	183		(i) The board may exercise the powers and duties necessary to implement this
185	184		part.
186	185		SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.