Bill > HB2409

This bill amends Tennessee law regarding property taxes, specifically concerning how mineral and other separate interests in real property are assessed. Generally, these separate interests, like mineral rights or improvements on leased land, are taxed to the owner of that specific interest, distinct from the rest of the property. However, this bill introduces exceptions to this rule. It clarifies that if a lessee's interest in real property, including any improvements they've made, is covered by a lawful agreement with a state or local government for payments instead of taxes (known as "payments in lieu of taxes" or PILOTs), and this agreement was made or updated after April 30, 2019, then that property will be assessed solely to the governmental entity. Additionally, a similar exception applies if the lessee is an entity related to a housing authority created for affordable housing purposes, and the lease was entered into or amended after April 30, 2026, with the improvements used for the housing authority's public mission. In these specific cases, the property is assessed only to the governmental entity and benefits from applicable tax exemptions.