48-101-312 - Exemption from taxation Payments in lieu of taxes Reporting. - Tennessee Statutes

48-101-312. Exemption from taxation Payments in lieu of taxes Reporting.

(a)  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 therefrom and all bonds issued by it and the income therefrom shall be exempt from all taxation in the state of Tennessee. Also, for purposes of the Securities Act of 1980, compiled in chapter 2, part 1 of this title, and any amendment thereto or substitution therefor, 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.

(b)  (1)  The municipality may delegate to a corporation the authority to negotiate and enter into with a corporation's lessees, payments in lieu of ad valorem taxes; provided, that such authorization shall be granted only upon a finding that such payments are deemed to be in furtherance of the corporation's public purposes as defined in this subsection. The legislative body of the municipality making such delegation may, in its sole discretion, require the corporation to submit any such agreement to the legislative body for its approval.

     (2)  If the project is located within the corporate limits of a municipality, the payments shall be apportioned between the municipality and the county in the same manner as ad valorem taxes are apportioned on the date of execution of the agreement for payments in lieu of taxes.

     (3)  The trustee shall bill and collect all in lieu of tax payments based on the agreement and the apportioned taxes.

(c)  An agreement for payment in lieu of taxes shall contain such terms and conditions as the corporation may determine, which may include, but shall not be limited to, provisions to:

     (1)  Defer and/or subordinate payment of all or a portion of the payment in lieu of taxes to such future time as the corporation may determine;

     (2)  Require interest to accrue on such deferred amount;

     (3)  Require that payments in lieu of taxes, including any interest, expenses or costs of collection of same, shall be secured by a deed of trust upon the project; or

     (4)  Provide that such deed of trust may be subordinate to other liens or indebtedness of the project.

(d)  On or before October 1 each year, the corporation lessee or sublessee shall file with the state board of equalization a report listing leased properties and details of the lease and payment in lieu of tax (PILOT) agreements in the format provided in § 7-53-305. A copy of the report shall be filed with the assessor of property on or before October 15. The assessor may audit or review the report and conduct comparative analysis to ensure that all agreements and reports are filed. Failure to timely complete and file the report with the board shall subject the lessee or sublessee to a late filing fee of fifty dollars ($50.00) payable to the board. In addition, failure to file the report with the board or assessor within thirty (30) days after written demand for the report shall subject the lessee or sublessee to an additional payment in lieu of tax in the amount of five hundred dollars ($500).

[Acts 1969, ch. 333, § 11; 1976, ch. 514, § 6; T.C.A., §§ 48-1911, 48-3-312; Acts 1998, ch. 804, § 1; 2000, ch. 914, § 2; 2002, ch. 605, § 2; 2008, ch. 1013, § 6.]