Industrial Development - As enacted, revises law relative to industrial development corporations. - Amends TCA Title 7 and Title 48. Companion bill has been assigned Public Chapter Number 987 by the Secretary of State, the official text

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                              PUBLIC CHAPTER NO. 987

                                                    SENATE BILL NO. 2646

                                                             By Roberts

                                           Substituted for: House Bill No. 1878

                                                           By Littleton

AN ACT to amend Tennessee Code Annotated, Title 7 and Title 48, relative to industrial
         development corporations.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

         SECTION 1. Tennessee Code Annotated, Section 7-53-103, is amended by designating the
existing section as subsection (b) and adding the following new subsection (a):

                   (a) If necessary or convenient to carry out the purposes and provisions of this
         chapter, the board of directors of the corporation may initiate a merger with another
          corporation in the manner provided for public benefit corporations pursuant to title 48,
          chapter 61.

          SECTION 2. Tennessee Code Annotated, Section 7-53-305, is amended by deleting
subdivision (a)(2)(A) and substituting instead:

                   (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, if the payments are payable to all applicable taxing jurisdictions and:

                             (i)(a) 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

                                       (b) The chief executive officer of the municipality has executed a letter
                             supporting the project that is filed with the corporation; or

                             (ii)(a) Are 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

                                       (b) The chief executive officer of each affected taxing jurisdiction has
                             executed a letter supporting the project that is filed with the corporation.

          SECTION 3. Tennessee Code Annotated, Section 7-53-305, is amended by deleting
subdivision (b)(1 )(A) and substituting instead:

                    (A)(i) 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 must only be granted 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
SB 2646
                    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.
                              (ii) Further, if the proposed agreement would result in payments in lieu of
                    taxes being made to any taxing jurisdiction that are less than the taxes that otherwise
                    would be payable to such jurisdiction, the corporation shall not enter into any such
                    agreement until the corporation has given written notice of such agreement to the
                    chief executive officer of each such taxing jurisdiction. Upon receipt of such notice,
                    the chief executive officer may either:
                                        (a) Notify the corporation that the agreement must be submitted to the
                              legislative body of that taxing jurisdiction for approval or disapproval; or
                                        (b) Notify the corporation that the chief executive officer does not
                              object to the proposed agreement.
                              (iii) If the chief executive officer does not provide any notification to the
                    corporation within ten (10) days of receipt of the notice from the corporation, then the
                    corporation may proceed to enter into the proposed agreement.
                              (iv) If the chief executive officer requires that the agreement be submitted to
                    the legislative body of the taxing jurisdiction, the corporation shall not enter into the
                    agreement unless it is approved by such legislative body.

          SECTION 4. Tennessee Code Annotated, Section 7-53-305, is amended by deleting
subdivision (g)(1 )(C) and substituting instead:

                    (C) The corporation has received prior, written approval from the county mayor and
          the legislative body of the county regarding payments in lieu of ad valorem taxes.
          SECTION 5. This act takes effect upon becoming a law, the public welfare requiring it.

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         SENATE BILL NO. 2646

PASSED:  April 21, 2026

                         ~ ..... ~ ~'-"'''-'
                         '               RANDY ~cNALLY

                                         SPEAKER OF THE SENATE

                         C'~-z:

                         CAMERONSEXTON,SPEAKER
                         HOUSE OF REPRESENTATIVES

·-o /V7b APPROVED this (q-f.e... day of  2026

         ~l.u,
                     BILL LEE, GOVERNOR