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HB 402

Taxes, Exemption and Credits - As introduced, creates tax exemption for portions of property that provide tree canopy cover in counties whose local governing bodies elect to create the exemption. - Amends TCA Title 5; Title 6 and Title 67, Chapter 5.

114th Regular Session (2025-2026) Introduced by Jerome Moon

HB 402 lets Tennessee counties optionally exempt tree canopy properties from part of their property taxes to incentivize environmental conservation.

P2C, ref. to State & Local Government Committee
#exemptionandcredits #taxes
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Bill Summary · HB 402

Legislative bill overview

HB 402 creates an optional property tax exemption for portions of real property that maintain tree canopy cover, available only in counties whose local governments choose to implement it. The bill modifies Tennessee's tax code to allow this exemption and gives individual counties discretion over whether to adopt the program.

Why is this important

Tree canopy provides documented public benefits including stormwater management, air quality improvement, and urban heat reduction. This bill uses tax policy as an incentive mechanism to encourage property owners to preserve or maintain trees, potentially affecting local tax bases and environmental outcomes depending on adoption rates and exemption scope.

Potential points of contention

  • Local revenue impact: Counties adopting this exemption will experience reduced property tax revenue; the bill doesn't specify exemption percentages or cap total potential revenue loss
  • Equity concerns: Tax exemptions typically benefit property owners disproportionately, raising questions about whether incentives should target specific communities or apply uniformly
  • Implementation clarity: The bill language doesn't define what qualifies as "tree canopy cover," how it will be measured, verified, or updated over time, creating potential administrative burden and inconsistency
  • Participation disparities: Wealthier counties more likely to adopt and benefit from exemptions, while poorer counties may skip the program due to revenue concerns

Compiled from official sources — confirm details with the bill’s official record.

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