Official Summary Text
Present law authorizes
local government
s
to
levy a
l
ocal option transit surcharge
for use in accordance with
certain requirements.
A surcharge
must
be a separate c
harge in addition to local taxes
. S
ubject to the maximum rates or amounts
,
a surcharge levied
must
be limited to
l
ocal option sales and use tax
, b
usiness tax
, m
otor vehicle tax
, l
ocal rental car tax
, t
ourist accommodation tax
, and r
esidential development
tax
.
This bill provides that
a local government is eligible to collect, receive, and administer proceeds of a
local tax
surcharge only if it appropriates and allocates funds for road purposes from local revenue sources in an amount not less than the aver
age of the five preceding fiscal years; except, that bond issues, federal revenue sharing proceeds, and
local tax
surcharges must be excluded from the five-year average computation.
If
,
after July 1, 2025
,
a local government fails
to so appropriate and a
llocate at least such average amount for road purposes,
this bill requires the
amount of revenues that would otherwise be allocable to such local government
to
be reduced by the amount of the decrease below such average. The amount of the funds not alloca
ted to the local government because of the decrease must be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in the local government's jurisdiction, and the state funds are in additi
o
n to the funds otherwise allocated for improvements in the local government's jurisdiction in that fiscal year.
ELIGIBLE
LOCAL GOVERNMENTS
Present law provides that a "l
ocal government
"
for purposes of local surcharge taxes
means
Blount, Davidson, Hamil
ton, Knox, Montgomery, Rutherford, Shelby, Sullivan, Sumner, Washington, Williamson,
and
Wilson
counties. It also includes Chattanooga, Clarksville, Knoxville, Memphis, and Nashville.
A city that meets the definition of local government
must
not adopt a surcharge if
its
county has adopted and is collecting a surcharge.
This bill changes "local government" to mean a
ny county in this state, including any county having a metropolitan or consolidated form of government
, and a
ny incorporated city
or town in this state
.
USE OF SURCHARGE REVENUE
Present law requires the r
evenue from a surcharge
to
be used for costs associated with the planning, engineering, development, construction, implementation, administration, management, operation, and main
tenance of public transit system projects that are part of a transit improvement program.
This bill changes "
transit improvement program
" to "tr
ansportation improvement program
," which means a
program consisting of specified transportation system projects
and services, including, but not limited to, public transit system, highway, and bridge projects.
IMPLEMENTING AGENCY
Present law authorizes r
evenue from the surcharge
to
be
d
irected or transferred to implementing agencies to carry out a transit improv
ement program.
An i
mplementing agency
is a
public transit agency,
state-authorized
regional transportation authority, or other local government department, agency, or designated entity that is responsible for planning or implementing a transit improvement
program
. This bill changes an implementing agency to be
responsible for planning or implementing a transportation improvement program
.
BONDS
Present law prohibits th
e proceeds of any bonds issued for the purposes of financing a transit improvement
program
to
be used for operations of any public transit system projects or services that are part of the program
. This bill revises this provision so that proceeds must not be used for operations of any transportation projects.
ADOPTION OF TRANSIT IMPROV
EMENT PROGRAMS
Before a surcharge may be imposed,
present law requires
a transit improvement program
to
be developed and adopted in accordance with
certain requirements. This bill revises this provision so the requirements pertain to the adoption of tr
ansportation projects and transportation improvements, instead of public transit systems and transit improvements.
GAS TAX ALLOCATION
Subject to certain exemptions, present law requires
a privilege tax
be
imposed upon all gasoline
or such substitutes
imported into th
is
state
and levied when the product first comes to rest in the state.
The rate of the tax imposed
is
26¢
pe
r gallon.
The commissioner of revenue or the commissioner's designated subordinate official
must
apportion for distribution all of
the taxes collected
in a certain order, including to counties to fund roads. A
county
is
eligible to receive revenues from
certain specified
tax increases if it appropriates and allocates funds for road purposes from local revenue sources in an amount no
t less than the average of the five preceding fiscal years, except bond issues and federal revenue sharing proceeds shall be excluded from the five-year average computation
. This bill adds to the list of amounts to be excluded in the five-year average any
local tax surcharges levied by a local government for transportation projects.
Current Bill Text
Read the full stored bill text
SENATE BILL 1307
By Johnson
HOUSE BILL 127
By Lamberth
HB0127
001206
- 1 -
AN ACT to amend Tennessee Code Annotated, Section
67-3-901 and Title 67, Chapter 4, Part 32, relative
to local tax surcharges.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-3-901, is amended by inserting
the language ", surcharges levied pursuant to chapter 4, part 32 of this title," immediately after
the language "except bond issues" in subsections (d) and (m).
SECTION 2. Tennessee Code Annotated, Title 67, Chapter 4, Part 32, is amended by
deleting the language "transit improvement" wherever it appears and substituting instead
"transportation improvement".
SECTION 3. Tennessee Code Annotated, Section 67-4-3201, is amended by deleting
the section and substituting instead:
(1) "Implementing agency" means any public transit agency, regional
transportation authority created under title 64, chapter 8, or other local government
department, agency, or designated entity that is responsible for planning or
implementing a transportation improvement program;
(2) "Local government" means:
(A) Any county in this state, including any county having a metropolitan
or consolidated form of government; or
(B) Any incorporated city or town in this state;
(3) "Surcharge" means a tax, or combination of taxes, levied by a local
government pursuant to this part; and
- 2 - 001206
(4) "Transportation improvement program" means a program consisting of
specified transportation system projects and services, including, but not limited to, public
transit system, highway, and bridge projects.
SECTION 4. Tennessee Code Annotated, Section 67-4-3205, is amended by deleting
the language "public transit system" wherever it appears and substituting instead
"transportation".
SECTION 5. Tennessee Code Annotated, Section 67-4-3206, is amended by deleting
the language "public transit system" wherever it appears and substituting "transportation".
SECTION 6. Tennessee Code Annotated, Title 67, Chapter 4, Part 32, is amended by
adding the following as a new, appropriately designated section:
Notwithstanding another law to the contrary, a local government is eligible to collect,
receive, and administer proceeds of a surcharge levied under this part only if it appropriates
and allocates funds for road purposes from local revenue sources in an amount not less than
the average of the five (5) preceding fiscal years; except, that bond issues, federal revenue
sharing proceeds, and surcharges levied pursuant to this part must be excluded from the five-
year average computation. If a local government fails after July 1, 2025, to so appropriate and
allocate at least such average amount for road purposes, then the amount of revenues that
would otherwise be allocable to such local government under this part must be reduced by the
amount of the decrease below such average. The amount of the funds not allocated to the
local government because of the decrease must be allocated to the state highway fund, to be
used by the department of transportation for the improvement of state highways in the local
government's jurisdiction, and the state funds are in addition to the funds otherwise allocated
for improvements in the local government's jurisdiction in that fiscal year.
SECTION 7. This act takes effect July 1, 2025, the public welfare requiring it.