June 2, 1995
Your question is, can the city set differential tax rates favoring greenbelt property? Except within the Tennessee constitutional and statutory limits described below, the answer is no.
Article 2, sec. 28 of the Tennessee Constitution establishes land classifications for property taxation purposes. Property taxes have to be equal and uniform in governmental units within those classifications. [For the most recent cases upholding the constitutionality of the classifications established by Article 2, sec. 28, see Federal Express Corp. v. Tenn. State Board of Equalization, 717 S.W.2d 873 (Tenn. 1986); Albert v. Williamson County, 798 S.W. 758 (Tenn. 1990). Those cases also speak of the necessity that such taxes be equal and uniform.] One of the classifications contained in Art. 2, sec. 28 is farm property, which is assessed at 25% of its value.
The Greenbelt Law [Tennessee Code Annotated, section 67-5-1005] permits land meeting certain qualifications to be designated agricultural or forest land, or open space, and to be classified and assessed as farm land [based on its present value under rules prescribed in the statute] by the county property tax assessor.
All property is assessed by the county property tax assessor; municipalities no longer have any control over such assessments (with certain limited exceptions that do not apply to your city), and municipalities are bound by such assessments. [See Tennessee Code Annotated, section 67-5-103.] Under the Greenbelt law a municipality has no control over the designation of land as agricultural or forest. Theoretically, it does have control over the designation of land as open space [See Tennessee Code Annotated, section 67-5-1007], but there are obvious limits to that control where a property owner is resistant to such a designation.
In support of my answer respecting the equality and uniformity of taxes within classifications here are the following cases, Tennessee Attorney General's Opinions, and other materials:
- Jones v. Memphis, 101 Tenn.117 (1898)
- Bell v. Town of Pulaski, 184 S.W.2d 384 (1945)
- Corporation of Sevierville v. King, 184 S.W.2d 381 (1939)
- American Bemburg Corp. et al. v. City of Elizabethton et al., 175 S.W.2d 535 (1943)
- Graham v. Spivey, 133 S.W.2d 460 (1939)
- City of Elizabethton v. Carter County, Civil Action No. 13701, Oct. 1, 1976 (Chancery Court for Carter County)
- OAG 92-29
- OAG 84-106
- My letter of March 4, 1992
Let me know if I can help you further in this or any other matter.
Sidney D. Hemsley
Senior Law Consultant