House Bill 2182, also known as Senate Bill 2200, amends various sections of the Tennessee Code Annotated to provide a structured approach for counties and municipalities facing reductions in population-based funding. The bill introduces a phased reduction strategy whereby any decrease in funding due to revised population certifications will be implemented incrementally. Specifically, in the first year of population loss or stagnation, the reduction will be limited 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. If a jurisdiction's population increases during this period, the department of revenue will recalculate the base loss and adjust the phase-in accordingly.

Additionally, the bill mandates that the department of revenue apply a mitigation factor to any funding reductions, ensuring that no county or municipality experiences more than a 20% loss in its total annual population-based revenue in the first year of such loss, with the remaining loss phased in over the following four years. This legislation aims to provide fiscal stability for local governments by allowing a transition period for those affected by population decreases, thereby mitigating the immediate financial impact of such 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