Press Releases

TN Home Builders Association 2012 Legislative Policy Agenda

Excerpted from the Home Builders Association of Tennessee‘s “Legislative Briefing,” Jan. 26, 2012:

2012 Legislative Agenda

The Home Builders Association of Tennessee Board of Directors approved the 2012 Legislative Agenda during the membership’s recent Fall Annual Meeting. We have worked diligently to craft the proper language of the proposed legislation and to secure outstanding sponsors who will carry the bills in both the Senate and the House…

Tennessee Home Construction Jobs Development Act

The legislation (SB1296-Johnson /HB0730 Casada) is more commonly referred to as the Building Homes – Building Jobs Act.

This legislation is a carry-over from 2011. Construction, especially homebuilding, is one of the state’s weakest sectors. From the employment peak in 2007 to the fall 2010, construction employment estimates indicate a loss of 36,300 jobs. The loss of 36,300 jobs resulted in a loss of $9.08 billion in output, $2.69 billion in earnings, 72,600 total jobs, and $168 million in state taxes. A substantial share of the shortfall of state taxes was associated with the decline in this industry. The positive effect of this proposal on the creation of approximately 4,900 new jobs across the state is borne out in a recent study by the Sparks Bureau of Business and Economic Research at the University of Memphis. This economic development legislation, which would grant $6,000 to approximately 1,666 new home buyers, would have a positive impact on every county and every community in Tennessee.

Legislation to Prevent Single Family Residential Fire Sprinkler Mandates

Simply put, proposed legislation (SB2492 Tracy/HB2639 Watson) would mimic several other states’ legislation that prevents any county, municipality, city or town from requiring the installation of fire sprinklers in single-family residential construction. Legislation would NOT prevent nor dissuade any home buyer or homebuilder from installing fire sprinklers. It just would prevent any mandates to require them. It is our belief that current building codes offer significant fire safety features, including the installation of hard-wired smoke detectors, in new construction. A recent University of Tennessee study underscores the fact that the majority of fire safety issues are in those homes built using pre-1998 building code construction.

Tennessee Public Improvement District Act

This legislation (SB1865 -Overbey / HB1643-Dennis) is also a carry-over from 2011. The legislation, based on similar current laws in Alabama, Mississippi, Arkansas, Florida, Georgia, Texas and Louisiana, would provide an alternative financing mechanism for municipalities and developers to pay for infrastructure needs. With the current state of the financial markets, which limit borrowing for these type projects, we see this as an option that will serve as an economic development tool for cities, counties and developers that will help stimulate new housing construction opportunities.

Property Tax Relief Legislation

As proposed, this would be enabling legislation that would allow counties to delay the reassessment of improved land until a time at which the property is sold to the first owner. Currently, the land is reassessed once a plat has been recorded to subdivide the land into lots and again when the builder improves the lot with constructing a new home. This legislation would defer the reassessment until the lot is sold to a builder and the lot would not be reassessed until a new home is sold to a homeowner. This deferral would significantly help our members during recessions to carry their real estate for longer periods of time by significantly reducing their annual carry costs.

Tax Assessor Legislation

Proposed legislation would require that the Tax Assessor’s office establish new parcel ID numbers immediately upon recording a subdivision plat after January 1 in a given year. As it stands now, the Assessor establishes a parcel ID number for each parcel of real estate on January 1 of each year. No matter what happens to that property throughout the year, even if it is subdivided and homes are constructed on it, when the tax bill comes out, it is billed under one number.

If a closing occurs prior to January 1 of the following year, then taxes must be paid on the entire property. But if it is still under the original parcel number, then the seller has to pay the entire tax bill, even on land that the seller doesn’t own. A closing cannot take place without the entire tax bill being paid.

The proposed legislation requires the Assessor to establish parcel identification numbers for subdivided lots effective at the time subdivision plat is recorded rather than waiting for the following January. The Assessor shall prorate the assessment on such real property for the year for the parent parcel from January 1 to the date of subdivision. And for resulting parcels, the assessment would cover the period from the date of the subdivision to the year-end. Any supplemental tax resulting from added value, shall be assigned exclusively to such resulting parcel to which the value was added.

As always, your assistance in helping educate your legislators on the importance of these issues will be most important in securing successful passage of these matters. As you look at the emphasis of our proposed legislation this year, you will see the one overriding powerful belief, and that is:


Press Releases

Kelsey Aims To Slow Down Property Tax Increases

Press Release from Sen. Brian Kelsey, R-Germantown; Nov. 9, 2011: 

12 for ’12  #6: Keeping Property Taxes Low

(NASHVILLE, TN) November 9, 2011 –State Senator Brian Kelsey (R-Germantown) today announced the introduction of a bill designed to slow the rate of growth of municipal and county property taxes. Senate Bill 2150 provides that no local government may impose an increase of more than one percent in the property tax rate without prior voter approval.

The legislation is the sixth in a series of announcements by Kelsey in his “12 for ’12” initiative for the next legislative session, which is set to reconvene January 10, 2012.

“This bill will help keep property taxes low,” said Senator Kelsey.  “Residents deserve a voice in the decision to raise excessive taxes.  Every increase in the property tax equals less money for families to buy groceries or pay off a credit card bill.  Voters need a voice if politicians propose really excessive tax increases.”

Under the bill, property tax rate increases of one percent or less of the property value would continue to require only a simple majority of the local county commission or city council.  However, property tax increases of more than one percent per year would require a referendum and approval from a majority of those voting in the referendum to take effect.

Voter approval of property taxes is not a new idea to Tennessee.  In 2006, Nashville voters approved a ballot initiative to put all future property tax increases to a vote, regardless of the size of the increase.  In the current fiscal year, approximately 50 percent of funding for the operating budget in Metro Nashville Davidson County comes from property taxes.

Other states have had property tax increase caps for years. California caps tax increases at 1 percent; New Jersey and New York limit annual increases to 2 percent; and Massachusetts maintains a 2.5 percent cap. In contrast to these rigid caps, Senate Bill 2150 conditions excessive property tax increases on voter approval.

Kelsey explained, “This bill will encourage greater fiscal responsibility on the part of local governments and will ultimately help cities and counties balance their budgets through saving and intelligent budget planning.  If an emergency arises, local governments still have options under this bill, but raising the tax rate above 1 percent is not a decision that should not be taken lightly.”