Tennessee House Bill HB2426

Tennessee 2023-2024 Regular Session

• Introduced: 1/30/24
• Refer: 2/13/24
• Refer: 3/6/24
• Refer: 3/12/24
• Refer: 3/27/24
• Refer: 4/2/24
• Engrossed: 4/11/24
• Enrolled: 4/24/24
• Passed: 5/21/24
• Chaptered: 5/29/24

Caption

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, Part 29, relative to the County Powers Relief Act.

Impact

The changes proposed in HB 2426 will directly impact how counties manage and finance new development projects. By tying tax levies to population growth metrics, the legislation aims to prevent counties from overextending their financial capabilities. The bill also allows for periodic verification of growth every four years, ensuring ongoing compliance with the stipulated conditions. These provisions encourage counties to assess their growth carefully and adaptively manage taxation and resources, thereby promoting judicious local governance.

Summary

House Bill 2426, known as the County Powers Relief Act, seeks to amend various sections of the Tennessee Code Annotated by introducing criteria under which counties may levy taxes based on population growth and new development. The bill stipulates that a governing body can only impose a tax if the county experiences a significant increase in population, specifically a minimum of 20% between federal censuses or 9% in any four-year period. This requirement ensures that counties capable of growth are the ones entitled to levy development taxes, promoting fiscal responsibility and accountability in expanding local government revenues.

Sentiment

The sentiment surrounding HB 2426 appears to be polarized among lawmakers and stakeholders in local governance. Supporters argue that the bill provides a structured and fair method for counties to evaluate their capacity to levy taxes, effectively ensuring that only those experiencing real growth can increase their financial burden on residents. However, critics may view these limitations as too restrictive, potentially hindering necessary funding for development in growing but not yet populous areas, which could stifle local economic development efforts.

Contention

One notable point of contention stems from the bill's stipulation that a county must meet specific population thresholds before being allowed to levy taxes. Opponents may argue that this approach could disproportionately affect rural or less populated counties, limiting their ability to generate revenue for crucial services and infrastructure. Furthermore, the emphasis on population growth might lead to debates over how growth is defined and verified, raising concerns about bureaucratic limitations on local governance and the financial independence of counties.