Real Property - As enacted, authorizes a tax increment agency to enter into a taxpayer agreement relative to a plan area after obtaining a written statement executed by each holder of an existing, previously recorded mor, the official text

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                     ~tate of \ltennessee

                          PUBLIC CHAPTER NO. 915

                                                  HOUSE BILL NO. 1892

                              By Representatives Williams, Parkinson, Bricken

                                       Substituted for: Senate Bill No. 1760

                                             By Senators Briggs, Bowling

          AN ACT to amend Tennessee Code Annotated, Title 9, Chapter 23 and Title 67, Chapter
5, relative to taxpayer agreements.

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

          SECTION 1. Tennessee Code Annotated, Section 9-23-102, is amended by adding the
following language as new, appropriately designated subdivisions:

                    ( ) "Taxpayer agreement" means a contract under which a record owner or
          owners of property in the plan area agree to guarantee, enhance, or otherwise further
          secure bonds or lease obligations of a tax increment agency;

                    () "Taxpayer agreement lien" means a lien that is treated in the same manner as
          property taxes for purposes of § 67-5-2101 after filing and recording the taxpayer
          agreement in the real property records of the county in which the property in the plan
          area is located;

                    ( ) "Taxpayer direct payment" means an amount equal to the positive difference,
          if any, between:

                              (A) The amount of the next-due debt service payment on tax increment
                    agency bonds or other obligations that financed improvements in the plan area;
                    and

                              (8) The tax increment revenues actually generated within the plan area
                    for the applicable period available to pay such debt service.

          SECTION 2. Tennessee Code Annotated, Title 9, Chapter 23, is amended by adding the
following as a new section:

                    (a) A tax increment agency may enter into a taxpayer agreement relative to a
          plan area after obtaining a written statement executed by each holder of an existing,
          previously recorded mortgage or deed of trust on the property securing indebtedness
          and in which each holder consents to the taxpayer agreement and indicates that the
          assessment does not constitute an event of default under the existing mortgage or deed
          of trust. The obligation to make payments under a taxpayer agreement that guarantee,
          enhance, or otherwise further secure bonds or lease obligations of the tax increment
          agency under this section, including taxpayer direct payments, must be treated in the
          same manner as property taxes for purposes of § 67-5-2101. Notwithstanding this
          section to the contrary, a tax increment agency shall not condition approval of a plan on
          the execution of a taxpayer agreement.

                    (b) A taxpayer agreement lien:

                              (1) Is a first and prior lien against the property on which it is imposed,
                    from the date on which the taxpayer agreement is recorded until the lien,
                    including any interest, penalties, or other required costs are paid;

                              (2) Has parity with real estate tax liens, taking priority over any existing or
                    subsequent mortgage, other lien, or other encumbrance; and

                              (3) May be enforced and collected in all respects as real property taxes.
HB1892

                    (c)
                             (1) Notwithstanding this section to the contrary, a taxpayer agreement

                   may include specific requirements related to:
                                       (A) Interest, penalties, and collection and enforcement

                             responsibilities applicable to delinquent taxpayer direct payments; and
                                       (8) Taxpayer agreement lien enforcement proceedings to ensure

                             the fullest protection of bondholders' interests.
                             (2) On or before the date of filing and recording the taxpayer agreement,
                   the tax increment agency shall send written notification to the county trustee for
                   the county in which the plan area is located of requirements described in
                   subdivision (c)(1), including certification that the requirements will be
                   administered by a third-party bond trustee. Upon an event of nonpayment, the
                   third-party bond trustee must coordinate with the county trustee to ensure
                   compliance with the requirements in a taxpayer agreement in connection with
                   any lien enforcement proceedings under a taxpayer agreement, to the extent not
                   prohibited by applicable law.
                   (d) The taxpayer agreement lien runs with the land, and any taxpayer direct
         payments not yet due under the terms of the taxpayer agreement must not be
         accelerated or eliminated by foreclosure of a property tax lien.
                   (e) A provision of a deed of trust, mortgage, or other agreement between a
         lienholder and a property owner providing for the acceleration of any payment under the
         deed of trust, mortgage, or agreement solely as the result of entering into taxpayer
         agreement is unenforceable.
                   (f) The tax increment agency that is a party to a taxpayer agreement shall file and
         record each taxpayer agreement with the register of deeds of the county in which the
         property is located. The recording must contain:
                             (1) The legal description of the property in the plan area;
                             (2) The name of each property owner;
                             (3) The term of the lien; and
                             (4) The executed taxpayer agreement.
         SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it,
and applies to contracts and other agreements entered into, amended, or renewed on or after
such date.

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         HOUSE BILL NO. 1892

PASSED:  April 14, 2026

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                                                         CAMERONSEXTON,SPEAKER

                                                         HOUSE OF REPRESENTATIVES

                                                                    RANDY MCNAl.LY
                                                         PEAKER OF THE SENATE

"6' APPROVED this J-St day of r:Y'.kA                    2026

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BILL LEE, GOVERNOR