Did the 2014 Tennessee law that bars local officials from waiving back property taxes apply to property tax bills that were already overdue before the law took effect?

Subject

Opinion No. 15-45, Application of Tenn. Code Ann. § 67-5-2803 to Existing Tax Liabilities, May 15, 2015

Plain-English summary

In 2014, the General Assembly added Tenn. Code Ann. § 67-5-2803 to the property tax code. The new section, effective July 1, 2014, told public officials and courts that they have no authority to waive, compromise, remit, prorate, apportion, or release property taxes, penalty, interest, or court costs (or the lien securing them), except in three narrow situations: when the property tax bankruptcy provision in part 28 applies, when the relief-for-mistake provision in § 67-5-1806 applies, or when the county is the tax-sale purchaser under § 67-5-2507.

Senator Kyle asked whether this rule reached tax bills that had already piled up before July 1, 2014. The AG said yes. Nothing in the statute limited it to post-July-2014 liabilities. Applying it to existing tax debts was not a "retroactive" application because the statute did not impose any new obligation on the taxpayers themselves. It only blocked future waivers by officials. Even if the statute were viewed as having some retroactive effect, it would still survive Tennessee's constitutional bar on retrospective laws because it was a remedial statute that did not impair any vested rights. The opinion observed that the statute essentially restated what was already the law: no statute had authorized officials to write off properly assessed property taxes in the first place.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What was the practical effect of the new statute?

Before July 2014, some local officials had been treating property tax obligations as negotiable, sometimes writing off back taxes or penalties as part of settlements or under political pressure. The new section made clear that officials lacked that authority unless one of the three statutory carve-outs applied. The AG opinion confirmed the rule covered tax bills that had been sitting on the books before the statute even passed.

Why isn't this a retroactive law?

Tennessee's Constitution (Article 1, § 20) prohibits retrospective laws and laws impairing contract obligations. But not every law that touches past facts is "retrospective" in the constitutional sense. The AG distinguished between imposing new obligations on past events (which is restricted) and limiting future official action with respect to existing facts (which is not). The statute did not require taxpayers to do anything new. It only limited what officials could do going forward.

What's a "remedial statute" and why does it matter?

A remedial statute is one passed to correct, clarify, or modify existing law, without affecting vested rights or liabilities. Tennessee courts have long allowed remedial statutes to be applied retroactively. The AG treated § 67-5-2803 as remedial because it essentially restated existing law: no Tennessee statute had ever given officials a general power to waive property taxes.

What about the three exceptions?

The statute itself preserves three exceptions: (1) other provisions of part 28 of chapter 5 (the delinquent tax sale and bankruptcy framework), (2) Tenn. Code Ann. § 67-5-1806 (the relief-for-mistake provision), and (3) Tenn. Code Ann. § 67-5-2507 (which addresses tax-sale property held by the county). Outside those carve-outs, officials cannot waive.

Background and statutory framework

Public Chapter 883, enacted in 2014, restructured Tennessee's delinquent property tax framework and added Tenn. Code Ann. § 67-5-2803:

In order to promote equality and uniformity of taxation, except as provided in this part 28, § 67-5-1806 or § 67-5-2507, no person, public official, governmental entity or court shall have the power or authority to waive, compromise, remit, prorate, apportion or release property taxes, penalty, interest or court costs nor the first lien securing the same.

Tenn. Pub. Acts ch. 883, § 19. The act took effect July 1, 2014. Tenn. Pub. Acts ch. 883, § 20.

The Tennessee Constitution's prohibition on retrospective laws (Article 1, § 20) is not absolute. Procedural and remedial statutes can apply retroactively. A remedial statute is one that does not affect vested rights or liabilities and is passed to correct, clarify, or modify existing law. In re D.A.H., 142 S.W.3d 267, 273 (Tenn. 2004); Medical Educ. Assistance Corp. v. State, 19 S.W.3d 803, 813 (Tenn. Ct. App. 1999); Tenn. Att'y Gen. Op. 08-50 (Mar. 11, 2008). The AG also relied on the absence of any prior statute giving officials general authority to waive properly assessed property taxes, treating § 67-5-2803 as a codification rather than a new restriction.

Citations

• Tenn. Code Ann. § 67-5-2803 (no waiver of property taxes)
• Tenn. Code Ann. § 67-5-1806 (relief-for-mistake exception)
• Tenn. Code Ann. § 67-5-2507 (county as tax-sale purchaser exception)
• Tenn. Pub. Acts ch. 883, §§ 19-20 (2014)
• Tenn. Const. art. 1, § 20 (prohibition on retrospective laws)
• In re D.A.H., 142 S.W.3d 267 (Tenn. 2004)
• Medical Educ. Assistance Corp. v. State, 19 S.W.3d 803 (Tenn. Ct. App. 1999)
• Tenn. Att'y Gen. Op. 08-50 (Mar. 11, 2008)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2015/op15-45.pdf

Original opinion text

STATE OF TENNESSEE
OFFICE OF THE ATTORNEY GENERAL
May 15, 2015
Opinion No. 15-45
Application of Tenn. Code Ann. § 67-5-2803 to Existing Tax Liabilities

Question

Does Tenn. Code Ann. § 67-5-2803 apply to "property taxes, penalty, interest or court costs" or first liens securing the same that accrued or were certified before the July 1, 2014, effective date of the statute?

Opinion

Yes. The statute applies to any property tax liability that existed as of the July 1, 2014, effective date, as well as any property tax liability arising after that date.

ANALYSIS

In 2014, the General Assembly enacted Public Chapter 883, which, inter alia, created Tenn. Code Ann. § 67-5-2803:

In order to promote equality and uniformity of taxation, except as provided in this part 28, § 67-5-1806 or § 67-5-2507, no person, public official, governmental entity or court shall have the power or authority to waive, compromise, remit, prorate, apportion or release property taxes, penalty, interest or court costs nor the first lien securing the same.

Tenn. Pub. Acts ch. 883, § 19. Public Chapter 883 provided that the "act shall take effect July 1, 2014, the public welfare requiring it." Id., § 20.

You have asked whether this statute applies to taxes, penalty, interest, and court costs, and first liens securing the same, that accrued or were certified prior to the statute's July 1, 2014, effective date. The language of Tenn. Code Ann. § 67-5-2803, on its face, applies to all existing property tax liabilities. Nothing in the act limits its application to property taxes, penalty, interest, and court costs that accrue or are certified after the July 1, 2014, effective date. Although the General Assembly could have provided that the act applied only to property taxes accruing after its effective date, it did not do so. Accordingly, Tenn. Code Ann. § 67-5-2803 applies to any property tax liability that existed as of July 1, 2014, even if such liability accrued or was certified some time prior to that date.

Your request appears to question whether the provisions of Tenn. Code Ann. § 67-5-2803 can be applied retroactively. Applying Tenn. Code Ann. § 67-5-2803 to property tax liabilities in existence on the statute's effective date, however, does not constitute a retroactive or retrospective application of that statute. For example, the statute imposes no retroactively effective obligation on taxpayers of real or personal property taxes. The statute merely restricts the authority of courts, governmental entities, and public officials to waive or compromise existing property tax liabilities on a going-forward basis.

Moreover, even if the literal application of Tenn. Code Ann. § 67-5-2803 could be construed as having some retroactive effect, this would not be constitutionally impermissible. The Tennessee Constitution prohibits the General Assembly from making any "retrospective law, or law impairing the obligations of contracts." Tenn. Const. art. 1, § 20. Despite this prohibition, some statutes may be applied retroactively, including procedural and remedial statutes. A remedial statute is one that does not affect the vested rights or liabilities of the parties and that is passed to correct, clarify, or modify existing law. See In re D.A.H., 142 S.W.3d 267, 273 (Tenn. 2004); Medical Educ. Assistance Corp. v. State, 19 S.W.3d 803, 813 (Tenn. Ct. App. 1999); Tenn. Att'y Gen. Op. 08-50 (Mar. 11, 2008).

The statute under consideration is a remedial law in that it merely describes the state of the law existing prior to July 1, 2014. With the exception of the specific provisions cited in Tenn. Code Ann. § 67-5-2803, this Office is aware of no state statute that would authorize state or local officials to relieve taxpayers of their obligation to pay properly assessed property taxes, penalty, and interest. Because Tenn. Code Ann. § 67-5-2803 is a remedial statute not affecting any vested right, it applies to any property tax liability that existed as of the July 1, 2014, effective date, as well as any property tax liability arising after that date, and any associated penalty, interest, and court costs.

HERBERT H. SLATERY III
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

MARY ELLEN KNACK
Senior Counsel

Requested by:
The Honorable Sara Kyle
State Senator
305 War Memorial Building
Nashville, Tennessee 37243-0028