Taxes, Exemption and Credits

Plain English Breakdown

The bill does not specify the exact process for renewing exemptions beyond seven years or provide detailed financial impacts on state and local governments.

Tennessee Tree Canopy Property Tax Exemption Act

This bill allows property owners in Tennessee counties that choose to participate to apply for tax exemptions on parts of their land covered by tree canopies, provided the county government approves it.

What This Bill Does

• Allows property owners to request a tax exemption for areas of their real estate that have tree cover.
• Requires local agencies like the planning commission or assessor's office to measure and confirm how much of the property is covered by trees using scientific methods.
• Sets rules for applying, reviewing, and approving these tax exemptions, including deadlines and fees.
• Limits the exemption period to seven years unless renewed by a review process.
• Requires local governments to decide if they want this law to apply in their area.

Who It Names or Affects

• Property owners who have trees on their land
• Local government agencies responsible for property taxes and assessments

Terms To Know

Tree canopy

The layer of leaves, branches, and stems from trees that cover the ground when viewed from above.

Implementing agency

A local government body chosen to manage the process of measuring tree coverage and approving tax exemptions.

Limits and Unknowns

• The bill only applies if a county's governing body votes to adopt it.
• The exact financial impact on state and local governments is not clear until counties decide to participate.
• Property owners must follow specific application procedures, including potential filing fees.

Official Summary Text

This bill authorizes a property
owner to apply for a property tax exemption for those portions of real property that provide tree canopy, as determined by the county planning commission, assessor of property, or county board of equalization, operating individually or in conjunction with

each other under this bill ("implementing agency"). The implementing agency must determine the portion of real property that provides tree canopy using reliable, objective means of quantitative assessment, including an urban tree canopy study, high-resol
u
tion aerial imagery, or field-based visual assessment. Such property tax exemption only applies to the portion of real property that provides tree canopy. If only a portion of real property is located under tree canopy, then such real property is exempt

from taxation only to the extent of the value of that portion, and the remaining portion of such property is subject to taxation.

LOCAL APPROVAL REQUIRED

This bill clarifies that this bill only applies when the county governing body elects, by a 2/3 maj
ority vote, to come under its provisions.

IMPLEMENTING AGENCY

Subject to approval by majority vote of the county governing body, this bill requires the chief administrative officer of the county to select the implementing agency responsible for determin
ing tree canopy coverage. The implementing agency must be reviewed annually to determine whether a new implementing agency should be selected and approved. The implementing agency must determine the portion of tree canopy sheltering real properties upon

the submission of an application for a tree canopy property tax exemption as prescribed under this bill.

This bill requires the implementing agency to formulate application formats and application requirements for the property tax exemption. The impleme
nting agency may develop additional criteria for the property tax exemption, subject to the review and approval of the state board of equalization ("board") and subsequent approval by the county governing body by resolution. The implementing agency must
s
et the value of the exemption granted under this bill.

TYPES OF REAL PROPERTY TO WHICH TAX EXEMPTION IS APPLIED

This bill authorizes the county government to determine whether to apply the property tax exemption authorized under this bill to either resi
dential properties, commercial properties, or both types of properties.

APPLICATION FOR TAX EXEMPTION

This bill requires an owner of real property claiming a tree canopy property tax exemption under this bill to file an application for the exemption wit
h the state board of equalization on a form prescribed by the board and provide all information required by the board to determine whether the property qualifies for the exemption. An application is deemed filed on the date it is received by the board or,
if mailed, on the postmark date. The owner must provide a copy of the application with any supporting materials to the assessor of property of the county in which the property is located.

This bill requires the board to make an initial determination gr
anting or denying an exemption through its staff designee, who shall send written notice of the initial determination to the applicant and to the assessor of property. Written notice includes notification by electronic means and such notice may be preser
v
ed in digital or electronic format.

This bill provides that a property that is subject to the application requirements is not exempt from being taxed unless the application has been approved in writing by the board. Additionally, the exemption is not
transferable or assignable upon its approval, and the applicant must promptly report to the assessor any change in the use or ownership of the property or removal of tree canopy that could affect the property's tax exempt status.

APPEAL

This bill provid
es that an application for an exemption under this bill or another law referring to these procedures is considered an appeal. Either the applicant or the assessor of property may appeal the initial determination to the board and is entitled to a hearing
p
rior to any final determination of exemption under this section.

FILING FEE

This bill authorizes the board to, by rule, impose a filing fee for processing applications for the exemption. The implementing agency may also, by rule, impose a filing fee fo
r processing applications for the exemptions. In each instance, the filing fee must not exceed $120 and must be proportionate to the value of the property at issue.

EFFECTIVE PERIOD FOR TAX EXEMPTION

This bill requires all real property granted an exem
ption from taxation under this bill to be certified in accordance with the criteria adopted pursuant to this bill. The tax exemption certified in accordance with this bill continues in effect throughout the property value assessment period applied by the

county assessor of property, but the exemption must not continue in effect for more than seven years from the date the exemption was first granted unless the implementing agency determines that it is reasonable to continue the exemption an additional seve
n
years, whereupon the implementing agency must recertify the real property granted the exemption previously pursuant to this bill.

At the end of the approved exemption period, this bill requires the assessor of property to reassess the value of the real
property, which is then taxed on the basis of its full market value. If, during the period the tax exemption is in effect, the real property is determined by the implementing agency to have tree canopy coverage in an amount less than previously determine
d
, the exemption is void and of no effect, and the owner is liable for any difference between the tax paid and the tax that would have been due on such property.

Current Bill Text

SENATE BILL 1101
By Hatcher

HOUSE BILL 402
By Moon
HB0402
000773
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 5;
Title 6 and Title 67, Chapter 5, relative to
canopies.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 67, Chapter 5, Part 2, is amended by
adding the following as a new section:
(a)
(1) As used in this section:
(A) "Board" means the state board of equalization;
(B) "Implementing agency" means the county planning
commission, assessor of property, or county board of equalization,
operating individually or in conjunction with each other under this section;
(C) "Tree canopy":
(i) As determined by an urban tree canopy study, means
the branches, leaves, stems, and other foliage from woody
vegetation, which cover real property when viewed from above the
canopy, measured as a percentage of shaded land area within the
tree dripline;
(ii) As determined by aerial imagery, means a contiguous
area of at least five thousand square feet (5,000 sq. ft.) that
includes the layer of leaves, branches, and stems of trees that
cover the ground when viewed from above; and

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(iii) As determined by field survey, means a contiguous
area of at least five thousand square feet (5,000 sq. ft.) that
includes the critical root zone of one (1) foot per inch of diameter
at breast height of a group of trees that are at least six inches (6")
at breast height; and
(D) "Tree dripline" means the outermost circumference of a tree
canopy from which water drips onto the ground.
(b)
(1) A property owner may apply for a property tax exemption for those
portions of real property that provide tree canopy, as determined by the
implementing agency.
(2) The implementing agency shall determine the portion of real property
that provides tree canopy using reliable, objective means of quantitative
assessment, including an urban tree canopy study, high-resolution aerial
imagery, or field-based visual assessment.
(3)
(A) The property tax exemption authorized under this section only
applies to the portion of real property that provides tree canopy.
(B) If only a portion of real property is located under tree canopy,
then such real property is exempt from taxation only to the extent of the
value of that portion, and the remaining portion of such property is subject
to taxation.
(c)
(1) The chief administrative officer of the county, subject to approval by
majority vote of the county governing body, shall select the implementing agency

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responsible for determining tree canopy coverage. The implementing agency
selected and approved under this subdivision (c)(1) must be reviewed annually to
determine whether a new implementing agency should be selected and
approved.
(2) The implementing agency shall determine the portion of tree canopy
sheltering real properties upon the submission of an application for a tree canopy
property tax exemption as prescribed under this section.
(3) The implementing agency shall formulate application formats and
application requirements for the property tax exemption. The implementing
agency may develop additional criteria for the property tax exemption, subject to
the review and approval of the state board of equalization and subsequent
approval by the county governing body by resolution.
(4) The implementing agency shall set the value of the exemption
granted under this section.
(5) The county government may determine whether to apply the property
tax exemption authorized under this section to either residential properties,
commercial properties, or both types of properties.
(d)
(1)
(A) An owner of real property claiming a tree canopy property tax
exemption under this section must file an application for the exemption
with the state board of equalization on a form prescribed by the board and
provide all information required by the board to determine whether the
property qualifies for the exemption. An application is deemed filed on
the date it is received by the board or, if mailed, on the postmark date.

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(B) The owner must provide a copy of the application with any
supporting materials to the assessor of property of the county in which the
property is located.
(2)
(A) The board shall make an initial determination granting or
denying an exemption through its staff designee, who shall send written
notice of the initial determination to the applicant and to the assessor of
property. Written notice includes notification by electronic means and
such notice may be preserved in digital or electronic format.
(B)
(i) An application for an exemption under this section or
another section referring to these procedures is considered an
appeal for purposes of § 67-5-1512.
(ii) Either the applicant or the assessor of property may
appeal the initial determination to the board and is entitled to a
hearing prior to any final determination of exemption under this
section.
(3) A property that is subject to the application requirements is not
exempt from being taxed unless the application has been approved in writing by
the board.
(4) The exemption is not transferable or assignable upon its approval,
and the applicant must promptly report to the assessor any change in the use or
ownership of the property or removal of tree canopy that could affect the
property's tax exempt status.

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(5) The board may, by rule, impose a filing fee for processing
applications for the exemption. The implementing agency may also, by rule,
impose a filing fee for processing applications for the exemptions. In each
instance, the filing fee must not exceed one hundred twenty dollars ($120) and
must be proportionate to the value of the property at issue.
(e)
(1) All real property granted an exemption from taxation under this
section must be certified in accordance with the criteria adopted pursuant to this
section. The tax exemption certified in accordance with this section continues in
effect throughout the property value assessment period applied by the county
assessor of property, but the exemption shall not continue in effect for more than
seven (7) years from the date the exemption was first granted unless the
implementing agency determines that it is reasonable to continue the exemption
an additional seven (7) years, whereupon the implementing agency shall recertify
the real property granted the exemption previously pursuant to this section.
(2) At the end of the approved exemption period, the assessor of
property shall reassess the value of the real property, which is then taxed on the
basis of its full market value.
(3) If, during the period the tax exemption is in effect, the real property is
determined by the implementing agency to have tree canopy coverage in an
amount less than previously determined, the exemption is void and of no effect,
and the owner is liable for any difference between the tax paid and the tax that
would have been due on such property.
(4) The tax exemption and restrictions under this section apply only to
the real property.

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(f) This section only applies when the county governing body elects, by a two-
thirds (2/3) majority vote, to come under its provisions.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.