HB 293 - SB 360
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 8, 2025
Fiscal Analyst: Justin Billingsley | Email: justin.billingsley@capitol.tn.gov | Phone: 615-741-2564
HB 293 - SB 360
SUMMARY OF BILL: Prohibits the construction of any correctional facility, hospital, or
nursing home in an area designated as a 100-year flood plain. Prohibits any existing facility or
portion of an existing facility located in a 100-year flood plain that was previously licensed as a
correctional facility, hospital, or nursing home but has been vacated or used for other purposes from
subsequently being licensed as such facility. Requires all access and required functional facility
components to be constructed above the designated 100-year flood plain in a new addition to an
existing facility located in such flood plain. Specifies that these requirements apply to all permits for
construction submitted on or after July 1, 2025.
FISCAL IMPACT:
NOT SIGNIFICANT
Assumptions:
Construction Permits & Property Tax Revenue
• Prohibiting the issuance of a construction permit for a planned correctional facility,
hospital, or nursing home in a 100-year flood plain will require the public or private entity
building such facility to find an alternative building site.
• Any decrease in construction permits issued by local governments will be netted out by
construction permits issued for identical facilities on land not falling within a 100-year flood
plain. The impact to local revenue for permits is estimated to be not significant. However,
local governments may incur an increase in property tax revenue for facilities built on
different sites.
• This legislation does not prohibit all construction in the flood plain. Other types of
structures may still be built, which would generate property tax revenue for those
properties.
• Any alternative developments of a flood plain area that may occur as a direct result of this
legislation cannot be predicted. However, the proposed legislation is not anticipated to
impact the overall economic activity and development. Therefore, any impact on the
number of construction permits issued or future property tax revenue generated by such
properties is estimated to be not significant.
Land Acquisition & Other Costs
• Property located in a 100-year flood plain generally holds less value than other, similar tracts
of land not located in a 100-year flood plain.
HB 293 - SB 360 2
• Prohibiting construction of a correctional facility, hospital, or nursing home in a 100-year
flood plain will likely result in land acquisition costs incurred for such facilities being higher
than they would have been if such facilities were to be built on a 100-year flood plain.
• Prohibiting an existing structure or portion of a structure, which was previously licensed as
a correctional facility, hospital, or nursing home, but has been vacated or used for other
purposes from once again being licensed as a correctional facility, hospital, or nursing
home, will have no significant impact on the number of such licensed facilities, as
alternative property could be identified elsewhere; however, this would likely result in
additional land acquisition costs.
• In the absence of this legislation, if a governmental agency planned to build a facility in a
100-year flood plain, there would likely be additional costs that will be avoided as a result
this legislation, including, but not limited to: (1) increased building costs for facilities to
withstand severe weather events; (2) costs of surveying to determine level of flood risk on
any such property; (3) and costs related to flood insurance. Therefore, this legislation could
result in a decrease in construction costs to such agency.
• Due to multiple unknown variables, a precise impact on state or local government
expenditures due to construction of a correctional facility, hospital, or nursing home cannot
be determined.
• However, it is reasonably estimated that any increase in state or local expenditures due to
land acquisition will be offset by cost avoidances in the construction of these facilities
outside the flood plain area. Any impact to state or local government is estimated to be not
significant.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director