Tennessee law permits development corporations to merge and negotiate tax payments

A corporation’s board may start a merger with another corporation. This applies to a corporation organized under this law and a merger with another corporation. The board may start a merger only when it is necessary or convenient to carry out the law’s purposes. The merger must follow the rules for public benefit corporations in Title 48, Chapter 61.

A corporation may negotiate and receive payments in place of taxes for a tax-credit housing project without municipal delegation. This applies to payments from a corporation’s lessee for a tax-credit housing project. A municipality may require its approval of these agreements by ordinance or resolution. Payments must go to all affected taxing jurisdictions. If payments are at least as much as the prior tax-year amount, the municipal chief executive must file a support letter. If they are lower, each affected jurisdiction’s chief executive must file a support letter. The payment comparison uses the tax year before the project became a tax-credit housing project.

A corporation may negotiate, accept, or waive lessee payments only with formal authority delegated by the municipality or municipalities that formed it. This covers payments from a corporation’s lessees, including agreements that would reduce payments to a taxing jurisdiction. The forming municipality or municipalities must find that the payments or waiver further the corporation’s public purposes. Their legislative body may require approval of an agreement. For an agreement that would reduce payments to a taxing jurisdiction, the corporation must give that jurisdiction’s chief executive written notice before entering it. The official may require the jurisdiction’s legislative body to approve the agreement or may say there is no objection. If the official gives no response within 10 days after receiving notice, the corporation may proceed. If approval is required, the legislative body must approve the agreement before the corporation enters it. For a proposed agreement that would reduce payments, the corporation must give written notice before entering it. The jurisdiction’s chief executive has 10 days after receiving notice to respond.

A corporation must receive written approval from the county mayor and county legislative body for payments in place of county property taxes. This applies to payments in place of county property taxes. The corporation must receive approval before those payments are made.