SB 997 - HB 1176
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
April 4, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
SB 997 - HB 1176
SUMMARY OF BILL: Specifies that a referendum is not required to effectuate municipal
annexation of territory under certain circumstances.
FISCAL IMPACT:
OTHER FISCAL IMPACT
Other Fiscal Impact – A precise impact to local government revenue and expenditures
cannot be reasonably quantified. Municipalities may also experience permissive cost
avoidances associated with referendums.
Assumptions:
• Any action taken by a municipality to annex property by resolution is permissive.
• Pursuant to Tenn. Code Ann. § 6-51-104(a)(2)(A), a referendum is required to effectuate
municipal annexation of territory unless all property owners within the territory consent in
writing.
• The proposed legislation would also permit annexation without a referendum if:
o Two-thirds of the property owners within the territory proposed for annexation
consent in writing;
o The total area of the property owned by the owners consenting to annexation is
more than one-half of the territory proposed for annexation; and
o The proposed annexation consists of nine or fewer parcels.
• Reducing the number of consenting property owners required to avoid a municipal
referendum for annexation may lead to avoiding the local costs associated with such
referendums. The extent and timing of such cost avoidances cannot be reasonably
quantified.
• If the proposed legislation does result in a municipality annexing territory, there will be a
shift in the provision of certain services from the county to the municipality, and a
corresponding shift in revenue to the municipality for those services, as well as an increase
in revenue for zoning regulations and property taxes.
• Any changes or shifts would result from permissive actions of municipalities, which cannot
be predicted; therefore, a precise impact to local government revenue and expenditures
cannot be reasonably quantified.
SB 997 - HB 1176 2
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director