2010 Tennessee Code
Title 67 - Taxes And Licenses
Chapter 5 - Property Taxes
Part 25 - Tax LienSale of Property
67-5-2509 - Exemption from taxation Land purchased, resold or rented by state or political subdivision.

67-5-2509. Exemption from taxation Land purchased, resold or rented by state or political subdivision.

(a)  Whenever land is purchased at a tax sale by the state, by a county, or by a municipality of the state or by a county and a municipality, as tenants in common, and the state, a county or municipality, or a county and municipality, goes into or takes actual possession of such land, the land shall, after the expiration of the two (2) year period of redemption, be exempt from taxation, as property held for a public, county or municipal purpose, and no taxes shall be collected thereon, and no assessment shall be made thereon, so long as the property is held for the purpose of realizing therefrom the taxes and assessments that have been lost by the several tax funds entitled thereto as result of the failure of the former owner of the property to pay the taxes for which the sale was held.

(b)  (1)  It shall be the duty of the proper officers of the state, the county and the municipality, or any or all of the officers who have an interest in the property, promptly, upon its acquisition, to offer the property for sale to private purchasers by appropriate means and to make diligent effort to sell the property at its reasonable market value.

     (2)  In case the property is owned by a county, or a municipality, or by a county and a municipality as tenants in common, such property may be sold upon credit with the land as security for any deferred purchase money by authority of an appropriate resolution of the governing body of the county or municipality, or both, if both have an interest in the property.

(c)  When the state, a county or a municipality, or any or all of them, has recovered from the sale or rental of any property purchased by them, or any one, or any combination of them, moneys sufficient to pay the taxes for which the property was sold, it shall be the duty of the officers of the state, the county and/or municipality, charged with the handling of the property, to report the recovery to the assessors of the county and municipality for assessment, it being the declared intention of the general assembly that such property is not held for a public, county and municipal purpose after the taxes, for which the sale was held, and subsequently accruing taxes through the period of redemption have been realized from the collection of net income therefrom or from the net sale price thereof, unless in the meantime the property shall have become devoted by the state, or by a county or a municipality, to a use otherwise recognized by law as a state or municipal purpose.

(d)  (1)  In lieu of the sale to private purchasers as provided in subsection (b), the proper officers of the state, the county, and the municipality, or any or all of the officers who have an interest in the property, may convey the property to any other governmental entity meeting the conditions specified below, at any terms deemed appropriate to such officers. In order to receive property under this subsection (d), a governmental entity must certify to such officers that the property is to be used for purposes that would make the property subject to condemnation by the governmental entity under its powers of eminent domain.

     (2)  In lieu of the sale to private purchasers as provided in subsection (b), the proper officers of the municipality or county may convey property permitted to be used for residential purposes to a private nonprofit entity that meets all conditions specified in this subdivision (d)(2), on any terms deemed appropriate to the officers:

          (A)  The entity is certified as a tax exempt entity under § 501(c)(3) of the Internal Revenue Code; and

          (B)  The entity is chartered to construct or to restore residential dwellings for the purpose of creating affordable and habitable housing for the disadvantaged and needy, and the property conveyed to the entity is used for that purpose; and

          (C)  The property, once constructed or restored, is conveyed to an individual or family for use as an owner-occupied residence.

     (3)  In any county having a population in excess of eight hundred thousand (800,000), according to the 1990 federal census or any subsequent federal census, in lieu of the sale to private purchasers as provided in subsection (b), the proper officers of the municipality or county may convey property purchased at a tax sale as provided in subsection (a) to the agency or commission of such municipality or county for redevelopment of properties certified under the provisions of title 13, chapter 21, part 2, for those uses authorized by § 13-21-202(4), as amended by Chapter 948 of the Public Acts of 1998, commonly referred to as the Community Redevelopment Act of 1998.

     (4)  In any county having a population in excess of eight hundred thousand (800,000), according to the 2000 federal census or any subsequent federal census, in lieu of the sale to private purchasers as provided in subsection (b), the proper officers of the municipality or county may convey property permitted to be used for residential purposes to a nonprofit community development corporation for the purpose of constructing or restoring residential dwellings and thereby creating affordable and habitable housing for the disadvantaged and needy. Property so conveyed shall be used for such purpose and shall, upon construction or restoration of the residential dwelling, be conveyed to an individual or family for use as an owner-occupied residence. The property may be conveyed on terms deemed appropriate to the proper officers of the municipality or county, except that under no circumstances shall the nonprofit community development corporation be required to pay the taxes, penalties or interest for which the property was sold.

     (5)  In any county having a population in excess of eight hundred thousand (800,000), according to the 2000 federal census or any subsequent federal census, in lieu of the sale to private purchasers as provided in subsection (b), the proper officers of the municipality or county may convey properties with road frontage no greater than twenty-four feet (24¢) acquired in tax sales to adjoining property owners upon establishing a fair market value (FMV), based upon both value enhancing and value decreasing factors, after the adjoining property owner has made sufficient in-kind payments, including, but not limited to, cutting, cleaning or improving the property, and accepting general liability for the premises. These actual or in-kind payments shall be equal to the FMV established for the property.

[Acts 1943, ch. 18, § 1; C. Supp. 1950, § 1592.3; T.C.A. (orig. ed.), § 67-2038; Acts 1984, ch. 661, § 3; 1998, ch. 647, § 1; 1999, ch. 420, § 1; 2008, ch. 1127, § 1; 2009, ch. 380, § 1.]