House Bill 1873, also known as Senate Bill 2064, amends Tennessee Code Annotated regarding real property taxes by introducing new limitations on how local governments can increase their property tax rates. The bill establishes that a local government cannot raise its real property tax rate in a manner that results in total revenue exceeding inflation plus 2% or inflation plus 6% over the preceding three years, unless approved by a referendum election. The bill defines key terms such as "inflation," "local government," "new construction," and "total revenue," and outlines the process for holding a referendum, including the requirement for a two-thirds vote from the governing body to initiate the election.

Additionally, the bill modifies existing legal language by deleting certain provisions and substituting them with new requirements that ensure compliance with the limitations set forth in the new section. Specifically, it amends sections related to the authority of county legislative bodies and the procedures for levying taxes in excess of the certified tax rate, ensuring that any such increases adhere to the new revenue limitations. The act is set to take effect on July 1, 2026, and will apply to all tax years beginning on or after that date.

Statutes affected:
Introduced: 67-5-102(a), 67-5-102, 67-5-102(c), 67-5-103, 67-5-1702