HB 366 - SB 431
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 15, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
HB 366 - SB 431
SUMMARY OF BILL: If, between September 1 and December 31 of any year, a building
or improvement is moved, demolished, or destroyed, or substantially damaged by fire, flood, wind,
or any other disaster, and is not restored and no other improvement is constructed in its place
before January 1 of the next year, an assessor of property is required to make or correct assessment
of such property, on the basis of the value of the property after the move, destruction, or
substantial damage of the improvements, notwithstanding the status of the property as of the
assessment date of January 1; provided that for the year in which such improvement is moved,
demolished, destroyed, or so damaged, the assessor of property is required to prorate the
assessment of the improvement for that portion of the year and apply it to the subsequent year.
For any damage occurring as a result of a disaster declared by the President of the United States,
the annual assessment of an affected building or improvement in a county included in such
declaration must be prorated, as aforementioned, for the actual time the building or improvement is
destroyed and not replaced, or the actual time the building or improvement is substantially
damaged, regardless of whether the building or improvement is restored or replaced by January 1 of
the next year; provided, the total time the building or improvement is destroyed or damaged and
not replaced or restored, exceeds 30 days. Requires the owner of any such property to apply for this
relief to the assessor of property by January 1 of the next year, provided, for tax year 2024, the
owner must apply by June 30, 2025. Specifies that this provision only applies in any county or
municipality that has approved such, by two-thirds vote of their respective governing body
following the disaster being declared by the President.
Such corrections and prorating of assessments, as established or authorized by this legislation, are
effective retroactively to January 1, 2024.
FISCAL IMPACT:
OTHER FISCAL IMPACT
Due to multiple unknown variables, any decrease in local revenue cannot be reasonably determined,
but is considered significant. Any such impacts to local governments are assumed to occur in FY25-
26 and subsequent years.
Assumptions:
• This legislation requires certain assessments to property be corrected or prorated, if such
property was moved, demolished, or destroyed, or substantially damaged by fire, flood,
HB 366 - SB 431 2
wind, or any other disaster between September 1 and December 31 of any year, occurring
after January 1, 2024.
• This legislation authorizes local governments, upon passage of a resolution by their local
governing body, to prorate assessments to property that was damaged as a result of a
disaster, occurring on or after January 1, 2024, as declared by the President of the United
States.
• The number of local governments which will pass a resolution to effectively prorate
assessments of properties damaged pursuant to a disaster declaration is unknown.
• This legislation will apply, in addition to all properties moved, damaged, demolished, or
destroyed, or substantially damaged pursuant to future disaster declarations, to properties
affected by Hurricane Helene.
• On October 2, 2024, FEMA declared the damage in certain areas of Tennessee resulting
from Hurricane Helene beginning on September 26, 2024, a disaster.
• The following counties were included in the disaster declaration for either Public Assistance
or Individual Assistance: Carter, Claiborne, Cocke, Grainger, Greene, Hamblen, Hancock,
Hawkins, Jefferson, Johnson, Sevier, Sullivan, Unicoi, and Washington.
• Based on information provided by the COT, as of January 28, 2025, assessors of property
in the following counties identified 3,230 properties as being destroyed or damaged by
Hurricane Helene: Carter, Cocke, Greene, Hamblen, Hancock, Hawkins, Johnson, Unicoi,
and Washington.
• According to information provided by the Comptroller of the Treasury (COT), any
decrease in local property tax revenue to the aforementioned counties cannot be reasonably
determined.
• This legislation will apply to property damaged or destroyed by future natural disasters,
which cannot be predicted.
• Due to multiple unknown variables, any decrease in local revenue cannot be reasonably
determined, but is considered significant.
• Any such impacts to local governments are assumed to occur in FY25-26 and subsequent
years.
• This legislation could result in an increase in local expenditures to modify computer
software to account for these new requirements and authorizations; however, it is assumed
that any such increase will be not significant.
• The State Division of Property Assessment (Division) is staffed by the COT.
• Based on information provided by the COT, the Division can create any form necessary, as
a result of this legislation, utilizing existing resources.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director