HB 1306

INDUSTRIAL DEVELOPMENT CORPORATION PROJECTS Pertaining to industrial development corporations, present law defines a "project"" as an y land and building, including office building, any facility or other improvement on the land, and all real and personal properties deemed necessary in connection to such, whether or not now in existence, that is suitable for any two of certain outlined u s es. One such outlined use is multifamily housing facilities to be occupied by persons of low or moderate income, elderly, or handicapped persons as may be determined by the board of directors. This bill adds that a multifamily housing facility includes a ffordable and workforce housing occupied in whole or in part. Present law defines ""affordable housing"" as housing that costs 30% or less than the estimated median household income for households earning 60% or less of the area median income for the Nashv i lle-Davidson County metropolitan statistical area as determined by the federal department of housing and urban development, adjusted for family size. ""Workforce housing"" is housing that costs 30% or less than the estimated median household income for hou s eholds earning 60% to 120% of the area median income for the Nashville-Davidson County metropolitan statistical area as determined by the federal department of housing and urban development, adjusted for family size. This bill also adds to the definition of multifamily facilities that any reference to ""apartment"" or ""apartments"" pertaining to industrial development corporations means multifamily housing facilities that are available for rent. This bill also adds two new uses to the list of what a proje ct may be for industrial development corporations, of which a project would need to include two. These two new options are:  Any single family, condominium, or townhome housing development, including, but not limited to, affordable and workforce housing, as those terms are defined above, to be occupied, in whole or in part, by persons of low to moderate income, elderly, or handicapped persons as may be determined by the board of directors.  Any public infrastructure located within the municipality that created the corporation. CORPORATE POWERS Present law grants certain powers to industrial development corporations, including the power to acquire and improve, maintain, equip and furnish one or more projects, including all real and personal properties the board of directors of the corporation may deem necessary in connection with the projects and regardless of whether or not any such projects are at the time in existence. No hotel, motel or apartment building may be purchased or otherwise acquired by a c o rporation after July 1, 1988, unless the project is located in a center city area or in a central business improvement district and that involves an apartment or residential building, hotel, motel or of any project acquired prior to July 1, 1988, regardle s s of when such project is completed. However, the power to acquire and improve projects does not apply to any of the following:  The contractual rights and obligations that any such corporation assumes with the issuance of any bonds, notes or other forms of indebtedness or any other contract.  A hotel listed in the National Register of Historic Places acquired by the corporation prior to December 31, 1989.  A hotel that contains conference or convention center facilities containing at least 75, 000 sq. ft.  A hotel or hotels, and related conference, mixed use or convention center facilities, if any, constructed in connection with a project or series of related projects involving an aggregate investment of public and private funds in excess of $200 million.  A project located in Shelby County.  A project that is a tourism attraction involving an aggregate investment of public and private funds in excess of $75 million that is designed to attract tourists to the state. This bill adds to this list that the pro vision does not apply to any apartment building or buildings, including, but not limited to, affordable and workforce housing, as those terms are defined above, to be occupied, in whole or in part, by persons of low to moderate income, elderly, or handica p ped persons as may be determined by the board of directors. ECONOMIC IMPACT PLANS Present law authorizes an industrial development corporation to prepare and submit to its municipality an economic impact plan (""plan"") for such body's approval. However, before the corporation submits a plan, it must hold a public hearing after publishing a notice in a newspaper for at least two weeks. The governing body of a municipality may approve a plan by resolution, regardless of a local charter provision or other provision to the contrary. If the plan's area is located within the corporate limits of a city or town, the taxes that would otherwise be payable to the city, town or county that is not the municipality that created the corporation must not be paid to th e corporation unless such city, town or county has also approved the plan. For any plan approved by the corporation before or after the effective date of this bill, this bill authorizes the governing body of the municipality, or any city, town, or county r equired to approve a plan, to approve amendments to the plan in connection with its approval, and the amended plan becomes effective upon approval by the corporation of such amendment. The corporation is not required to conduct an additional public heari n g prior to the approval of any minor amendments to the plan. This bill also clarifies that minor amendments to clarify terms or correct errors in the wording of an economic impact plan that has been previously approved become effective upon approval by t h e corporation. In Nashville, present law requires that prior to a plan's approval by the governing body of the municipality, the plan must be submitted to the mayor. This bill adds for Nashville the same changes as above: For any plans approved by th e corporation before or after the effective date of this bill, the governing body of the municipality, or any city, town, or county required to approve a plan, may approve amendments and the amended plan becomes effective upon approval by the corporation. The corporation is also not required to conduct an additional public hearing prior to the approval of any amended plan. However, while corporations in other counties are not required to conduct an additional public hearing for minor amendments to the pl a n, corporations in Nashville are required to conduct an additional public hearing for any amendments to the plan. BROWNFIELD SITE REDEVELOPMENT Present law provides that it is the intent of the general assembly to encourage the redevelopment of brownfie ld sites in this state. A ""brownfield site"" is real property that is currently, or at any time since January 1, 2000, has been, the subject of an investigation, remediation, or mitigation as a brownfield project under a voluntary agreement or consent. A ""brownfield project"" is the screening, investigation, monitoring, control and/or remediation of any abandoned, idled, under-utilized, or other property whose re-use, growth, enhancement or redevelopment is complicated by real or perceived adverse environm e ntal conditions. Brownfield projects may address sites contaminated by hazardous substances, solid waste, or any other pollutant. Such redevelopment may include a solar power facility. This bill removes the provision that authorizes a redevelopment to i nclude a solar facility. In addition to the authorization provided above, present law authorizes a corporation located in a municipality in which a brownfield redevelopment project is located to prepare and submit to the municipality for approval an ec onomic impact plan with respect to the brownfield redevelopment project. This bill adds that such a plan must include the brownfield redevelopment project site, but it may also include area beyond the brownfield site. Property Taxes Present law requ ires such a plan submitted for approval to provide that the property taxes imposed on the property, including the personal property located within the area subject to the plan, will be distributable and used in a certain manner outlined by present law. T h is bill clarifies that the property taxes may include either real property or personal property, or both, located within the area subject to the plan. BALLOON INDEBTEDNESS Present law provides that balloon indebtedness does not include several character ized debts. This bill adds to the list of debts that are not balloon-indebtedness any debt that is secured or payable only from tax increment revenues, except for guaranties or security provided by private parties. Present law defines ""tax increment rev e nues"" as incremental property tax revenues to be allocated by a taxing agency to a tax increment agency, which is a housing authority, industrial development corporation and/or community redevelopment agency, pursuant to the tax increment statute. DIVISION OF PROPERTY TAXES For any multifamily, single family, condominium, or townhome housing development, including, but not limited to, affordable and workforce housing, to be occupied, in whole or in part, by persons of low to moderate income, elder ly, or handicapped persons as may be determined by the board of directors, this bill authorizes a plan to provide that all taxes levied by a participating tax agency must be allocated and paid to the tax increment agency, which is a housing authority, ind u strial development corporation and/or community redevelopment agency. This bill further authorizes a plan to provide that the amount of the dedicated taxes may be fixed for the term of the plan as of the date of the plan approval by the tax increment age n cy or the date of the first allocation of taxes to the tax increment agency. ON APRIL 14, 2025, THE HOUSE ADOPTED AMENDMENTS #1, #2, AND #3 AND PASSED HOUSE BILL 1306, AS AMENDED. AMENDMENT #1 schedules the provisions of this bill to be repealed on Jul y 1, 2030. AMENDMENT #2 removes the repealing provision added by House Amendment #1. AMENDMENT #3 specifies that a brownfield site for which this bill encourages redevelopment may include a solar power facility."