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SENATE BILL 2002
By Hensley
HOUSE BILL 2607
By Hulsey
HB2607
011276
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AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 5, relative to property taxes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-5-102(c), is amended by adding
the language "; provided, however, that limitations and restrictions provided in § 67-5-510(b)
relative to the amount of any county, municipality, metropolitan government, or other tax entity's
ad valorem tax levy must remain in full force and effect in accordance with such laws"
immediately after the language "1973".
SECTION 2. Tennessee Code Annotated, Section 67-5-103(b), is amended by adding
the language "; provided, however, that limitations and restrictions provided in § 67-5-510(b)
relative to the amount of any county, municipality, metropolitan government, or other tax entity's
ad valorem tax levy must remain in full force and effect in accordance with such laws"
immediately after the language "1973".
SECTION 3. Tennessee Code Annotated, Section 67-5-510, is amended by deleting the
section and substituting instead the following:
(a)
(1) It is the duty of the governing body of each county, municipality, and
metropolitan government and any other taxing entity, on the first Monday in July,
or as soon thereafter as practicable, to fix the tax rates for the fiscal year on all
properties within their respective jurisdictions for all purposes.
(2) Notwithstanding subdivision (a)(1), a county having a population in
excess of seven hundred thousand (700,000), according to the 1980 federal
census or any subsequent federal census, that establishes tax due dates other
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than the first Monday in October each year, in accordance with § 67-1-701(a), is
authorized to fix tax rates for all county purposes at dates prior to the first
Monday in July.
(b)
(1) With respect to ad valorem taxes levied for each fiscal year, the tax
rate must be set so that the governing body of a county, municipality, or
metropolitan government or other taxing entity shall not levy ad valorem taxes in
any fiscal year that would render in total receipts from all levies an amount more
than the receipts from that source from the immediately preceding fiscal year for
such county, municipality, metropolitan government, or other taxing jurisdiction,
plus an additional two percent (2%).
(2) Any additional revenue from the ad valorem tax on any newly
constructed properties or any existing properties added to the tax rolls, including
any properties previously exempt, that were not assessed in the immediately
preceding fiscal year is to be excluded from the amount from which the two-
percent-increase described in subdivision (b)(1) is to be calculated. Taxes levied
for payment of principal of, and interest on, general obligation bonds issued prior
to July 1, 2026, are also to be excluded from the amount from which the two-
percent-increase described in subdivision (b)(1) is to be calculated.
(3) The rate and levy limitation described in subdivision (b)(1) may be
increased above two percent (2%) only when a tax entity's governing body:
(A) Has determined the need for additional revenues;
(B) Adopts a resolution or ordinance declaring its intention to
adopt a rate that provides for an increase in ad valorum tax receipts
greater than the authorized two-percent-increase; and
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(C) Has held a referendum on the question of raising the
limitation prescribed by subdivision (b)(1).
(4) The notice calling for a referendum must state:
(A) The purposes for which the additional revenues are to be
used;
(B) The amount of the tax levy to be imposed for such purposes;
and
(C) The period of time for which the increased rate is to remain in
effect.
(5) A tax rate increase and corresponding levy above the limitation
described in subdivision (b)(1) is limited to a period of not more than four (4)
successive years.
(6) The limitation may be increased under this subsection only if the
proposed increase is approved by sixty percent (60%) of those voting in the
referendum. Subject to this subsection (b), the publication of notice and manner
of holding the referendum must be as otherwise prescribed by law; provided, that
such referendum must be held during a regular November election as set forth in
§ 2-3-203.
SECTION 4. Tennessee Code Annotated, Section 67-5-1702, is amended by deleting
the section and substituting instead the following:
No tax rate in excess of the certified tax rate as provided for in § 67-5-1701 shall
be levied by the governing body of any county, municipality, metropolitan government, or
other tax entity until a resolution or ordinance has been approved by the governing body;
provided, that the governing body shall comply with the rate and levy limitation
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provisions of § 67-5-510(b) in establishing a tax rate that is in excess of the certified tax
rate, and shall further comply with the following procedures:
(1) The governing body shall advertise its intent to exceed the certified
tax rate on the website of the governing body and in a newspaper of general
circulation in the county, and the chief executive officer of the governmental
entity, shall within thirty (30) days after publication furnish the state board of
equalization an affidavit of publication; and
(2) The governing body, after public hearing, may adopt a resolution or
ordinance levying a tax rate in excess of the certified tax rate, provided that such
increase complies with § 67-5-510(b).
SECTION 5. This act takes effect July 1, 2026, the public welfare requiring it, and
applies to all tax years beginning on or after that date.