Official Summary Text
This bill authorizes a tax increment agency to enter into a taxpayer agreement relative to a plan area. The obligation to make payments under such an agreement that guarantees, enhances, or otherwise furthers secure bonds or lease obligations of the tax
increment agency, including taxpayer direct payments, must be treated in the same manner as property taxes. However, a tax increment agency must not condition approval of a plan on the execution of a taxpayer agreement.
TAXPAYER AGREEMENT AS A SECURITY DEVICE
This bill provides that a taxpayer agreement lien 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. A taxpayer agreement lien takes priority over any existing or subsequent mortgage, other lien, or other encumbrance, and may be enforced and collected in all respects as real property taxes.
This bill authorizes a taxpayer agreement to include specific requirements related to interest, penalties, and collection and enforcement responsibilities applicable to delinquent taxpayer direct payments, and taxpayer agreement lien enforcement proceedi
ngs to ensure the fullest protection of bondholders' interests.
This bill also authorizes the taxpayer agreement lien to run with the land. However, 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. A provi
sion 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 unenf
or
ceable.
TAX INCREMENT AGENCIES PERFECTING A TAXPAYER AGREEMENT
This bill requires the tax increment agency to send written notification to the county trustee for the county in which the plan area is located on or before the date of filing and recording the taxpayer agreement. The county trustee must comply with the
requirements in such an agreement in connection with any lien enforcement proceedings under the agreement, to the extent not prohibited by applicable law.
This bill requires a tax increment agency that is a party to a taxpayer agreement to file and record each taxpayer agreement with the register of deeds of the county in which the property is located. The recording must contain all of the following infor
mation:
The legal description of the property in the plan area.
The name of each property owner.
The term of the lien.
The executed taxpayer agreement.
ON APRIL 2, 2026 THE HOUSE ADOPTED AMENDMENT #1 AND
PASSED HOUSE BILL 1892, AS AMENDED.
AMENDMENT #1 makes the following changes:
Changes when a tax increment agency is authorized to enter into a taxpayer agreement relative to a plan area to 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.
Revises a taxpayer agreement lien from taking priority over any existing or subsequent mortgage, other lien, or other encumbrance to
, instead,
having parity with real estate tax liens, taking priority over any existing or subsequent mortgage, other lien, or other encumbrance.
Revises the required written notification for the tax increment agency
provision
to
, instead,
on or before the date of filing and recording the taxpayer agreement,
require
the tax increment agency
to
send written notification to the county trustee for the county in which the plan area is located of requirements described in the bill, 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.
Current Bill Text
Read the full stored bill text
HOUSE BILL 1892
By Williams
SENATE BILL 1760
By Briggs
SB1760
011183
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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
(B) 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:
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(a) A tax increment agency may enter into a taxpayer agreement relative to a
plan area, and 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) Takes 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.
(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
(B) Taxpayer agreement lien enforcement proceedings to ensure
the fullest protection of bondholders' interests.
(2) 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) on or before the date of filing and recording the taxpayer
agreement. The county trustee shall comply with the requirements in a taxpayer
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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.