|County mulls tax abatement options
Loudon County Commission is considering two options to get a say in payment in lieu of tax agreements for industrial recruits.
Tennessee law provides industrial development boards, or IDBs, the authority to negotiate and receive PILOT agreements. For years commissioners were under the assumption PILOTs had to be approved by the county before continuing but learned in May that IDBs, which perform public functions on behalf of municipalities, could move forward regardless.
“We as county commissioners have been elected to represent our different parts of the county on all matters and definitely matters affecting the property tax rate and things of that nature,” Steve Harrelson, commission chairman, said. “So I think it’s important that we do have some say so and input into working out PILOT agreements with any companies and giving them tax abatements and so forth, so it definitely affects the county.”
Commissioner Van Shaver at the September workshop presented commissioners with two options. A joint IDB could be formed with all entities involved, or the county could seek legislation changes so that it would have veto power over all IDBs in the area if it impacted ad valorem taxes.
“There is a (Tennessee Code Annotated) that sets up industrial development boards (that) has a section in it that requires any industrial development board, before they can enter into any PILOT agreements pertaining to the county taxes, they have to have the permission from the county mayor and the county commission,” Shaver said. “Currently, that only applies to one county and it’s a section in the law written in by a population spread. So our other option would be for us to have a paragraph written in that said any industrial development that wanted to give away county taxes would have to have permission of the county mayor and the county commission.”
TCA 7-53-101(g)(1) states an IDB cannot negotiate a PILOT agreement for less than ad valorem taxes otherwise due unless there’s a joint corporation by the county and one or more municipalities in the county. The corporation must have an interlocal agreement with the county regarding PILOTs or the corporation has received written approval from the county mayor and county commission regarding the PILOT.
Shaver hopes commission will rework the law so that it suits Loudon County. He contacted state Rep. Jimmy Matlock, R-Lenoir City, recently to gauge how viable a legislation change could be.
“His statement to me last night was, ‘Well, that ought to be something we can handle fairly easily’,” Shaver said. “... I’ve had the first conversation with Jimmy Matlock, and I’ll be speaking to his office this week to give them the particulars. ‘Here’s the TCA that’s involved. Here’s the exact language we would like to have inserted. Can this be done?’ Jimmy, of course, says it does but you still have to get all the details worked out.”
Shaver said any action will take time. The Tennessee General Assembly won’t be back in session until January, but that should give the county “plenty of time to work on it.”
Despite possible legislation, county officials still lean toward a joint board. Four IDBs in the area are Loudon County, Lenoir City, Loudon and Tellico Reservoir Development Agency.
Loudon County Mayor Rollen “Buddy” Bradshaw and Commissioner Harold Duff both represent the county on the Economic Development Agency board. Bradshaw said there has been discussion on a joint board, but nothing has resulted from it.
“So I was sort of hoping that (EDA Executive Director) Jack Qualls would take the lead on it and from what I understood speaking to Jack Qualls ... that it’s been mentioned at the EDA board meetings but it doesn’t sound like anybody ever really picked this up (and said), ‘Here’s the details of it and here’s why it would make sense’,” Shaver said. “It doesn’t sound like Jack’s done a very good job in trying to promote or get the cities on board with this idea.”
Bradshaw believes action could take place at the next commission meeting. Ultimately, he would like to see it revert to the way the process was handled before.
“The way the resolutions were presented, whether it was Lenoir City or Loudon city, all of those were dependent on the other entity being willing to work with the PILOT as well,” Bradshaw said.
Harrelson said it may be too soon to move forward with any plan until more discussion takes place.
“Definitely the next meeting’s too early,” Harrelson said. “I think we’re still in the talking stages of IDBs, but I don’t think it’s on the forefront of us being — pushing really strongly to take some action on it because we’re nowhere near taking a vote on it, in my opinion. I think we still need some discussion and talking to the other parties involved and do our homework before we have to take it to a vote as the county commission.”