Senate Bill 2200, also known as House Bill 2182, amends various sections of the Tennessee Code Annotated to provide a structured approach for managing funding allocations to counties and municipalities in response to changes in population. The bill introduces a phased reduction strategy for any county or municipality that experiences a decrease in population-based funding. Specifically, it mandates that the Department of Revenue implement reductions incrementally, limiting the first year's reduction to 20% of the total projected loss, with subsequent years increasing the reduction by an additional 20% until the allocation aligns with the certified population.

Additionally, the bill establishes a transition period for local governments facing funding decreases due to annual population certifications, ensuring that reductions are capped at 20% in the first year and 40% in the second year, with further reductions phased in over time. A mitigation factor is also introduced to prevent any county or municipality from experiencing more than 20% of its total annual population-based revenue loss in the first year, with the remaining loss spread over the following four years. This legislation aims to provide fiscal stability for local governments while adjusting to demographic changes. The act is set to take effect on July 1, 2026.

Statutes affected:
Introduced: 67-6-103(a)(3)(G), 67-6-103, 4-3-710, 67-1-119