Would dividing Tennessee's property tax relief program into separate programs for the elderly/disabled and for disabled veterans/surviving spouses violate the state constitution?

Plain-English summary

The Comptroller asked a structural question about how Tennessee delivers property-tax relief to its three protected categories of homeowners: elderly low-income, totally and permanently disabled, and disabled veterans (along with their surviving spouses). Could the program be administratively split into two tracks (one for elderly/disabled, one for disabled veterans/surviving spouses) without running afoul of Article II, Section 28 of the Tennessee Constitution?

The AG said yes, an administrative split is constitutional as long as the substantive constitutional rules are observed. Those rules are:

• Relief to elderly low-income homeowners and disabled homeowners must come through "payments by the State to reimburse all or part of the taxes paid." The state writes a check to the taxpayer (or applies a state-funded credit), but cannot shift the cost to the county or municipality.
• Local governments cannot be made to bear the cost, directly or indirectly. The Tenn. Att'y Gen. Op. 96-044 and 99-216 opinions confirm this point.
• A 2006 amendment to Article II, Section 28 created a separate, "unusually restrictive" tax-freeze framework for the elderly. The General Assembly can authorize local governments to adopt the tax freeze program (now codified as the Property Tax Freeze Act, Tenn. Code Ann. § 67-5-705), but the specifics must match what the constitutional amendment laid out. Disabled homeowners can be included in a tax freeze, but the program must be identical to the elderly version.

The substance of the relief, not the administrative architecture, is what the constitution polices. Splitting the program into two operational tracks does not, by itself, breach Article II, Section 28.

Currency note

This opinion was issued in 2017. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Tennessee's property-tax relief framework has been updated more than once. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule mentioned here.

Background and statutory framework

Article II, Section 28 of the Tennessee Constitution gives the General Assembly authority over property classification and tax-relief programs. The provision has both an original clause set and a 2006 amendment.

The original tax-relief clauses. The legislature is authorized to provide tax relief "in such manner as it deems appropriate" to elderly low-income homeowners through "payments by the State to reimburse all or part of the taxes paid by such persons on owner-occupied residential property." The same authority extends to homeowners "totally and permanently disabled, irrespective of age," using the same mechanism. The key constraint is the "payments by the State" requirement: the financial burden cannot fall on counties, cities, or towns, directly or indirectly. The AG cited prior opinions (96-044 and 99-216) for the proposition that the legislature cannot empower a municipality to provide relief by reducing what a taxpayer owes, because that shifts the cost to the local taxing jurisdiction.

The 2006 amendment: tax freeze. The amendment, sitting between the elderly clause and the disabled clause, authorizes a specific tax-freeze program for elderly homeowners (65 and older) that local governments may adopt by resolution or ordinance. The frozen amount is the tax in the year the ordinance was adopted, or in the year the taxpayer turned 65 if later, or in the year of purchase if the taxpayer was 65 or older at acquisition. Improvements that increase market value get reassessed. The general assembly sets income or wealth limits. The General Assembly has codified the program in the Property Tax Freeze Act, Tenn. Code Ann. § 67-5-705.

Tenn. Att'y Gen. Op. 07-156 (Nov. 21, 2007) addressed the placement of the 2006 amendment between the elderly and disabled clauses. The conclusion: the amendment is silent about whether a tax freeze can be offered to disabled homeowners, but the original "as provided herein for the elderly" language in the disabled clause means the General Assembly can authorize an identical tax freeze for disabled homeowners. The freeze program for the disabled must mirror the elderly version exactly.

Why an administrative split is constitutional. The constitutional provision is about substance, not administrative form. Section 28 says relief must come through state payments and cannot shift cost to local governments. It does not prescribe how the state must organize the program internally. Splitting administration into two operational components, one handling elderly low-income and disabled homeowner relief, one handling disabled veterans and surviving spouses, does not change the substantive rules. Both components must still observe the state-reimbursement and no-local-burden requirements.

The disabled veteran/surviving spouse leg. The question implied this category is currently administered alongside the elderly/disabled category but could be split off. The AG did not unpack the specific statutory grounding for the disabled-veteran component, but the analysis applies the same way. As long as the relief is delivered through state payments and the local-cost rule is honored, the administrative architecture is up to the legislature.

Common questions

Q: Can Tennessee split its tax relief program into separate elderly/disabled and disabled-veteran tracks?
A: According to this opinion, yes. The administrative split, by itself, does not violate Article II, Section 28.

Q: What does the constitution actually require?
A: Relief to elderly low-income and disabled homeowners must come through state payments to reimburse taxes paid by the homeowner. The cost cannot be shifted, directly or indirectly, to counties, cities, or towns.

Q: Can a county reduce an elderly homeowner's tax bill instead of having the state cut a check?
A: According to AG Op. 96-044 and 99-216 (both cited here), no. A reduction at the local level shifts the financial burden to the local taxing jurisdiction, which Article II, Section 28 forbids.

Q: What's the "tax freeze" added in 2006?
A: It's a separate constitutional authorization for local governments, if the General Assembly authorizes it, to "freeze" the property tax for elderly homeowners at the level in place when the ordinance was adopted or when the homeowner turned 65 or bought the property. The Property Tax Freeze Act (Tenn. Code Ann. § 67-5-705) implements it.

Q: Can disabled homeowners get a tax freeze too?
A: Tenn. Att'y Gen. Op. 07-156 (Nov. 21, 2007), cited here, concluded yes, as long as the disabled tax-freeze program is identical to the elderly tax-freeze program.

Q: Does this opinion change anything about how relief is calculated?
A: No. It addresses only the constitutional question of administrative splitting. The substantive eligibility rules and reimbursement amounts come from statute and regulation.

Citations and references

Statutes and constitution:

• Tenn. Const. art. II, § 28
• Tenn. Code Ann. § 67-5-705 (Property Tax Freeze Act)
• 2007 Pub. Acts ch. 581

Prior AG opinions:

• Tenn. Att'y Gen. Op. 96-044 (Mar. 13, 1996)
• Tenn. Att'y Gen. Op. 99-216 (Oct. 27, 1999)
• Tenn. Att'y Gen. Op. 07-33 (Mar. 23, 2007)
• Tenn. Att'y Gen. Op. 07-156 (Nov. 21, 2007)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2017/op17-027.pdf

Original opinion text

Opinion No. 17-27
Tennessee's Property Tax Relief Program

Question
Would the division of Tennessee's property tax relief program into two separate programs — one for elderly low-income persons and disabled persons and another for disabled veterans and their surviving spouses — violate article II, section 28 of the Tennessee Constitution?

Opinion
No. An administrative division of Tennessee's tax relief program into two separate components, in and of itself, would not violate article II, section 28 of the Tennessee Constitution.

ANALYSIS

Article II, section 28 of the Tennessee Constitution authorizes the General Assembly to provide tax relief to "elderly low-income taxpayers" and to those "home owners totally and permanently disabled, irrespective of age." While article II, section 28 restricts the General Assembly in several respects as to the types of tax relief that it may offer elderly low-income taxpayers and disabled taxpayers, this constitutional provision does not prevent an administrative division of Tennessee's tax relief program into two separate programs — one for elderly low-income persons and disabled persons and another for disabled veterans and their surviving spouses. As long as the substantive requirements of the types and methods of tax relief authorized by article II, section 28 are observed, the proposed administrative division would be constitutionally permissible.

Since its inception, article II, section 28 of the Tennessee Constitution has authorized the General Assembly to provide tax relief to "elderly low-income taxpayers" and to those "home owners totally and permanently disabled, irrespective of age" through "payments by the State." While article II, section 28 was amended in 2006 to allow local governments to provide tax relief to the elderly on a limited basis, the original tax relief clauses of article II, section 28 have remained substantively the same. These clauses currently provide:

The Legislature shall provide, in such manner as it deems appropriate, tax relief to elderly low-income taxpayers through payments by the State to reimburse all or part of the taxes paid by such persons on owner-occupied residential property, but such reimbursement shall not be an obligation imposed, directly or indirectly, upon Counties, Cities, or Towns.

The Legislature may provide tax relief to home owners totally and permanently disabled, irrespective of age, as provided herein for the elderly.

Tenn. Const. art. II, § 28.

The first clause, by its express terms, gives the General Assembly considerable latitude to provide tax relief to elderly low-income taxpayers "in such manner as it deems appropriate." That same latitude extends to the provision of tax relief for the disabled because the second clause authorizes the General Assembly to provide relief to the disabled "as provided herein for the elderly." The only constraint is that relief afforded under these clauses must be provided "through payments by the State to reimburse all or part of the taxes paid" and "such reimbursement shall not be an obligation imposed, directly or indirectly, upon Counties, Cities, or Towns." Accordingly, the General Assembly may not provide tax relief under these clauses by reducing the amount that a taxpayer owes because such a reduction would impose the financial burden of the relief upon the local taxing jurisdiction. See Tenn. Att'y Gen. Op. 96-044 (Mar. 13, 1996). The relief under these clauses must be through "payments by the State" that reimburse the taxpayer for all or part of the taxes that the taxpayer paid. Id. See Tenn. Att'y Gen. Op. 99-216 (Oct. 27, 1999) (General Assembly cannot empower a municipality to provide for property tax relief to elderly homeowners, disabled homeowners or disabled veterans under these clauses because the relief must be provided by "State" reimbursements to taxpayers).

In short, the original tax relief clauses permit the General Assembly to provide tax relief to elderly low-income taxpayers and the disabled "in such manner as it deems appropriate" as long as it observes the overall constraint that relief must be through State payments that reimburse the taxpayers.

In contrast to the original tax relief clauses, the aforementioned 2006 amendment to article II, section 28 "is written in an unusually restrictive manner." See Tenn. Att'y Gen. Op. 07-33 (March 23, 2007). The amendment sets forth a precise tax relief program for the elderly — a "tax freeze" — that the General Assembly may authorize local governments to adopt. The amendment, which was inserted between the two tax relief clauses set forth above, causes the tax relief portion of article II, section 28 to currently read:

The Legislature shall provide, in such manner as it deems appropriate, tax relief to elderly low-income taxpayers through payments by the State to reimburse all or part of the taxes paid by such persons on owner-occupied residential property, but such reimbursement shall not be an obligation imposed, directly or indirectly, upon Counties, Cities, or Towns.

By general law, the Legislature may authorize the following program of tax relief:

(a) The legislative body of any county or municipality may provide by resolution or ordinance that:

(1) Any taxpayer who is sixty-five (65) years of age or older and who owns residential property as the taxpayer's principal place of residence shall pay taxes on such property in an amount not to exceed the maximum amount of tax on such property imposed at the time the ordinance or resolution is adopted;

(2) Any taxpayer who reaches the age of sixty-five (65) after the time the ordinance or resolution is adopted, who owns residential property as the taxpayer's principal place of residence shall thereafter pay taxes on such property in an amount not to exceed the maximum amount of tax on such property imposed in the tax year in which such taxpayer reaches age sixty-five (65); and

(3) Any taxpayer who is sixty-five (65) years of age or older who purchases residential property as the taxpayer's principal place of residence after the taxpayer's sixty-fifth birthday shall pay taxes in an amount not to exceed the maximum amount of tax imposed on such property in the tax year in which such property is purchased.

(b) Whenever the full market value of such property is increased as a result of improvements to such property after the time the ordinance or resolution is adopted, then the assessed value of such property shall be adjusted to include such increased value and the taxes shall also be increased proportionally with the value.

(c) Any taxpayer or taxpayers who own residential property as their principal place of residence, whose total or combined annual income or wealth exceeds an amount to be determined by the general assembly shall not be eligible to receive the tax relief provided in subsection (a) or (b).

The Legislature may provide tax relief to home owners totally and permanently disabled, irrespective of age, as provided herein for the elderly.

Tenn. Const. art. II, § 28.

The amendment sets out a specific program of tax relief for the elderly that the General Assembly may authorize, as well as the provisions of the resolution or ordinance that a county or municipality may adopt if the General Assembly authorizes the program. See Tenn. Att'y Gen. Op. 07-33 (March 23, 2007). [Footnote: While the amendment sets forth a tax relief program for the "elderly" in the form of a tax freeze, this Office has previously opined that the placement of the amendment before the original tax relief clause addressing the disabled does not preclude the General Assembly from authorizing a tax freeze program for disabled homeowners because article II, section 28 authorizes the General Assembly to provide tax relief to the disabled "as provided herein for the elderly." See Tenn. Att'y Gen. Op. 07-156 (Nov. 21, 2007). But any tax freeze program authorized for disabled homeowners must be the same as the tax freeze program provided for the elderly. Id.] Consistent with the amendment, the General Assembly enacted the Property Tax Freeze Act, which allows the legislative body of any county or municipality to adopt the "tax freeze" program described in the Act. See 2007 Pub. Acts ch. 581 (codified at Tenn. Code Ann. § 67-5-705).

In sum, as long as the constraints and substantive provisions are observed, an administrative division of Tennessee's tax relief program into two separate components, in and of itself, would not violate article II, section 28 of the Tennessee Constitution.

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

LAURA T. KIDWELL
Senior Counsel

Requested by:
Honorable Justin P. Wilson
Comptroller of the Treasury
State Capitol
Nashville, Tennessee 37243-9034