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Terms Used In Tennessee Code 7-53-305

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Applicable ad valorem taxes: means any ad valorem taxes that, but for ownership of a project by a corporation, would have been due and payable pursuant to §. See Tennessee Code 7-53-101
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Bonds: means bonds, notes, interim certificates or other obligations of a corporation issued pursuant to this chapter. See Tennessee Code 7-53-101
  • Code: includes the Tennessee Code and all amendments and revisions to the code and all additions and supplements to the code. See Tennessee Code 1-3-105
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: means any corporation organized pursuant to this chapter. See Tennessee Code 7-53-101
  • County mayor: means and includes "county executive" unless the context clearly indicates otherwise. See Tennessee Code 1-3-105
  • Eligible headquarters facility: means a facility, located in a county with a population in excess of eight hundred thousand (800,000), according to the 2000 federal census or any subsequent federal census, that houses an international, national or regional headquarters facility of an entity that agrees, at a minimum, to make payments to the municipality in lieu of any special assessments or other fees or charges that would be levied on the project pursuant to chapter 84 of this title if the project were privately owned. See Tennessee Code 7-53-101
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • Governing body: means the board or body in which the general legislative powers of the municipality are vested. See Tennessee Code 7-53-101
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lease: includes a lease containing an option to purchase the project for a nominal sum upon payment in full, or provision for payment in full, of all bonds issued in connection with the project and all interest on the bonds and all other expenses in connection with the project, and a lease containing an option to purchase the project at any time, as provided in the lease, upon payment of the purchase price, which shall be sufficient to pay all bonds issued in connection with the project and all interest on the bonds and all other expenses incurred in connection with the project, but which payment may be made in the form of one (1) or more notes, debentures, bonds or other secured or unsecured debt obligations of the lessee providing for timely payments, including, without limitation, interest on the obligations sufficient for such purposes and delivered to the corporation or to the trustee under the indenture pursuant to which the bonds were issued. See Tennessee Code 7-53-101
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Municipality: means any county or incorporated city or town in this state with respect to which a corporation may be organized and in which it is contemplated the corporation will function. See Tennessee Code 7-53-101
  • Payments in lieu of taxes: means any amount negotiated separately from rent in lieu of applicable ad valorem taxes. See Tennessee Code 7-53-101
  • Project: means all or any part of, or any interest in:
    (A) Any land and building, including office building, any facility or other improvement on the land, and all real and personal properties deemed necessary in connection therewith, whether or not now in existence, that shall be suitable for the following or by any combination of two (2) or more thereof:
    (i) Any industry for the manufacturing, processing or assembling of any agricultural, mining, or manufactured products. See Tennessee Code 7-53-101
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • real property: include lands, tenements and hereditaments, and all rights thereto and interests therein, equitable as well as legal. See Tennessee Code 1-3-105
  • Retail business: means a retail establishment providing general retail sales or services to consumers. See Tennessee Code 7-53-101
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Trustee: A person or institution holding and administering property in trust.
  • Waiver: means an agreement that does not require the payment of any payments in lieu of taxes for a period of time. See Tennessee Code 7-53-101
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) The corporation is hereby declared to be performing a public function in behalf of the municipality with respect to which the corporation is organized and to be a public instrumentality of such municipality. Accordingly, the corporation and all properties at any time owned by it, and the income and revenues from the properties, and all bonds issued by it, and the income from the bonds, shall be exempt from all taxation in the state of Tennessee. Also for purposes of the Securities Act of 1980, compiled as title 48, chapter 1, part 1, bonds issued by the corporation shall be deemed to be securities issued by a public instrumentality or a political subdivision of the state of Tennessee.
(2)

(A) Notwithstanding this section to the contrary, and unless the municipality adopts an ordinance or resolution requiring that any agreement with respect to the payments in lieu of taxes entered into pursuant to this subdivision (a)(2) be approved by the municipality, a corporation may negotiate and receive from any lessee of the corporation, without any delegation from the municipality, payments in lieu of taxes with respect to a tax-credit housing project; provided, that:

(i) The payments in lieu of taxes are payable to all applicable taxing jurisdictions in which the project is located and are not less than the taxes that would have been paid to each such taxing jurisdiction for the tax year prior to the year the project became a tax-credit housing project; and
(ii) The chief executive officer of the municipality has executed a letter supporting the project that is filed with the corporation.
(B) The corporation is declared to be serving a public purpose by negotiating and receiving from any lessee of the corporation payments in lieu of taxes with respect to a tax-credit housing project.
(C) As used in this subdivision (a)(2), “tax-credit housing project” or “project” means a project that has received an allocation of low-income housing tax credits under Section 42 of the Internal Revenue Code of 1986 ( 26 U.S.C. § 42 ), or any successor provision, from the Tennessee housing development agency or is otherwise eligible for the tax credits as the result of the issuance of bonds, the interest on which is not subject to federal income taxation.
(D) The corporation may acquire and lease a tax-credit housing project as authorized in this chapter, notwithstanding any limitations in this chapter on the power of the corporation to purchase or otherwise acquire apartments.
(b)

(1)

(A) The corporation has the authority to negotiate, accept, or waive from any of the corporation’s lessees payments in lieu of taxes only upon receipt of a formal delegation of such authority from the municipality or municipalities that formed the corporation. Any such authorization shall be granted only upon a finding by the municipality or municipalities that the payments or waiver of the payments are deemed to be in furtherance of the corporation’s public purposes. The legislative body of the municipality or municipalities making the delegation may require the corporation to submit for approval any agreement with any of the corporation’s lessees providing for the acceptance or waiver of payments in lieu of taxes.
(B) No agreement providing for the acceptance or waiver of payments in lieu of taxes, including any renewal or extension of such agreement, entered into by a municipality or corporation to which such authority has been delegated shall result in a corporation’s lessee making payments in lieu of taxes in an amount less than the applicable ad valorem taxes for a period that is greater than twenty (20) years plus a reasonable construction or installation period not to exceed three (3) years, unless both the commissioner of economic and community development and the comptroller of the treasury have made a written determination that the agreement is in the best interest of the state.
(C) The corporation shall attach to each agreement an analysis of the costs and benefits of the agreement, in such manner and under such conditions as shall be prescribed by the commissioner of economic and community development or the commissioner’s designee.
(2) With regard to any project located within an area designated as the center-city area by a municipality in which there has been created a central business improvement district pursuant to the Central Business Improvement District Act of 1971, compiled in chapter 84 of this title, the amount of such payments shall not be fixed below the lesser of:

(A) Ad valorem taxes otherwise due and payable by a tax-paying entity upon the current fair market value of the leased properties; or
(B) Ad valorem taxes that were or would have been due and payable on the leased properties for the period immediately preceding the date of their acquisition by the corporation.
(3) The minimum payments in subdivisions (b)(2)(A) and (B) shall not be applicable to an eligible headquarters facility.
(c) This section shall apply, from the date of their issuance, to all bonds heretofore or hereafter issued under this chapter and the income from such bonds whether heretofore or hereafter received.
(d)

(1) Payments in lieu of taxes and any lease payments payable to a corporation, to the extent such payments in lieu of taxes and lease payments in the aggregate do not exceed ad valorem taxes otherwise due and payable where the leased property is owned by an entity subject to taxation, shall become and remain a first lien upon the fee interest in the leased property from January 1 of the year in which such payment in lieu of taxes on lease payments is due. The corporation 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.
(2) Subdivision (d)(1) shall apply with equal force to all such subleases and their sublessees.
(3) To the extent lease payments or payments in lieu of taxes exceed the amount necessary to defray debt service on project bonds or other financing, any payments not timely made as agreed may be collected by or on behalf of the city or county in the same manner as delinquent property taxes.
(e)

(1) On or before October 1 of each year, the corporation lessee shall submit to the comptroller of the treasury an annual report containing:

(A) A list of all the real and personal property owned by the corporation and its associated entities and subsidiaries;
(B) The value of each listed property as estimated by the lessee;
(C) The date and term of the lease for each listed property;
(D) The amount of payments made in lieu of property taxes for each listed property;
(E) The date each listed property is scheduled to return to the regular tax rolls;
(F) [Deleted by 2016 amendment.]
(G) The property address and parcel identification number of the property assigned by the assessor of property;
(H) The amount of rents paid;
(I) The amount of any property taxes paid on the leasehold assessment under § 67-5-502(d);
(J) Any changes in the name since the last filing;
(K) How the payments in lieu of taxes are allocated between the city and county according to the economic development agreement; and
(L) Identification of project type according to definitions provided in this chapter.
(2) A copy of the filing made pursuant to subdivision (e)(1) shall be filed with the assessor of property in the county where the property is located on or before October 15 of the year in which the filing is made with the comptroller of the treasury. The assessor of property may audit or review, or both, the data report on all payment in lieu of tax agreements and conduct comparative analysis to ensure that all agreements are reported to the assessor of property.
(3) Each lessee of the corporation shall be responsible for the timely completion and filing of the report. Failure to timely complete and file the report shall subject the lessee to a late filing fee of fifty dollars ($50.00) payable to the comptroller of the treasury. In addition, any lessee failing to file the report with the comptroller of the treasury or the assessor within thirty (30) days after written demand for the report, shall owe an additional payment in lieu of tax in the amount of five hundred dollars ($500). This payment shall be collectable by the trustee for the benefit of the county, in the same manner as property taxes, on certification from the comptroller of the treasury or the assessor.
(f) The corporation to which authority has been delegated to create pilot leaseholds and payments in lieu of ad valorem taxes shall prepare biannual reports detailing the lessee’s compliance with the terms and conditions of the pilot lease agreement or any other agreement whereby ad valorem taxes are substituted in favor of a payment in lieu of taxes. Such report shall detail the lessee’s compliance and noncompliance where applicable, and its fiscal impact on revenues generated from ad valorem taxes in each municipality affected by such payment in lieu of taxes. This subsection (f) shall apply only to counties with populations of eight hundred thousand (800,000) or more, according to the 1990 federal census or any subsequent federal census, and to municipalities within such counties.
(g)

(1) An industrial development corporation may not negotiate any payment in lieu of tax agreement for less than the county ad valorem taxes otherwise due unless:

(A) The corporation is a joint corporation organized by the county and one or more of the municipalities in the county;
(B) The corporation has entered into an interlocal agreement with the county in regard to payments in lieu of ad valorem taxes; or
(C) The corporation has received written approval from the county mayor and the legislative body of the county regarding payments in lieu of ad valorem taxes.
(2) Subdivision (g)(1) shall apply to any county having a population of not less than eight hundred ninety-seven thousand four hundred (897,400) nor more than eight hundred ninety-seven thousand five hundred (897,500) and at least five (5) industrial development corporations formed under title 7, chapter 53, according to the 2000 federal census or any subsequent federal census.
(h) Notwithstanding this section or any other law to the contrary, an industrial development corporation organized solely by a municipality that does not impose a real property tax may only enter into a payment in lieu of ad valorem tax agreement or lease if:

(1) The county in which the municipality is located has approved the entering into a payment in lieu of ad valorem tax agreement or lease with respect to the property at issue; or
(2) Either the industrial development corporation or the municipality which organized the industrial development corporation agrees to pay to the county in which the municipality is located an amount equal to the amount of real property tax that would have been assessed to the property at issue for each year in which the payment in lieu of ad valorem tax agreement or lease is effective were the property not owned by the industrial development corporation during such time period.
(i)

(1) An industrial development corporation may negotiate a payment in lieu of tax agreement for less than the ad valorem taxes otherwise due for a retail business for a period longer than ten (10) years, plus a reasonable construction or installation period not to exceed three (3) years, if:

(A) The corporation is a joint industrial development corporation with representation of all affected taxing jurisdictions within the county;
(B) The corporation has entered into an interlocal agreement with other taxing jurisdictions to establish criteria for any payment in lieu of tax agreements that might affect shared tax bases;
(C) The corporation has received written approval from each affected local governmental entity. As used in this subdivision (i)(1)(C), “affected local governmental entity” means a county or local special school district which will suffer an actual loss of tax revenue under a payment in lieu of tax agreement; or
(D) The corporation pays the other affected local governments the amount of ad valorem taxes those governments would otherwise receive for the affected property based on its assessed value after the initial ten (10) years of the agreement.
(2) The requirements under this subsection (i) shall not apply to payment in lieu of tax agreements affecting only the municipality that created the corporation and the beneficiary making the agreement.
(3) This subsection (i) does not apply in any county having a population of not less than nine hundred thousand (900,000), according to the 2010 or any subsequent federal census.
(j) Before an industrial development corporation approves a payment in lieu of tax agreement, the corporation shall hold a public meeting relating to the proposed agreement after notice is provided by the corporation or governing body, as may be required by law, at least five (5) days prior to the date of such public meeting. Such notice must include the time, place, and purpose of the public meeting.
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