Official Summary Text
SMITH CO
UNTY
Present law authorizes a county legislative body, by resolution, to levy a tax on sand, gravel, sandstone, chert, and limestone severed from the ground within its jurisdiction. The tax must be levied for the use and benefit of the county only, to b
e allocated and applied to its county road fund, and all revenues collected from the tax, except deductions for administration and collection, must be allocated to the county. In Smith County, present law authorizes the county legislative body to, by res
o
lution adopted by a 2/3 vote, allocate such revenues to the county road fund, the county general fund, or any other fund of the county. This bill deletes this provision for Smith County.
MINERAL SEVERANCE TAX RATE
Present law requires the mineral sever
ance tax rate be set by the county legislative body, but it must not exceed 15¢
per ton on sand, gravel, sandstone, chert, or limestone severed from the ground in the county. This bill deletes the 15¢
per ton rate cap and, instead, provides that the rate
must not exceed the following amounts:
For a tax period before July 1, 2025, 15¢ per ton.
For a tax period between July 1, 2025 and July 1, 2030, 20¢ per ton.
For a tax period between July 1, 2030 and July 1, 2035, 25¢ per ton.
For a tax period that begins on or after July 1, 2035, and for subsequent tax periods, 30¢ per ton.
DISPOSITION OF TAXES
Present law requires all such tax revenues collected, less an amount to cover the expenses of administration and collection and any interest and penalties c
ollected by the department of revenue ("department"), to be remitted quarterly to the county trustee as soon as practical following the end of a calendar quarter. These revenues must become a part of the county road fund of the county, and must be used f
o
r the construction, maintenance, and repair of the county system.
This bill adds that, not less than 30 days after the end of a county's fiscal year, each county that receives revenue from mineral severance tax must provide an annual written report to
the comptroller of the treasury, the commissioner of transportation, and legislative committees, detailing (i) the amount of revenue deposited into the county road fund during the previous fiscal year, (ii) the amount of revenue spent by the county, and (
i
ii) how those expenditures have been designated and used for construction, maintenance, and repair of the county system.
AUTHORIZATION
This bill authorizes a county legislative body that has authorized a mineral severance tax to increase the tax rate, i
n accordance with the timeline set out above, by adopting a resolution by a 2/3 majority vote. The presiding officer of the county legislative body must deliver a certified copy of the resolution increasing the tax rate to the department. The department
must not collect the new tax rate until the first day of a month occurring at least 30 days after the receipt of a certified copy of such action by the department.
ON MARCH 17, 2025, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 695, AS AMENDED.
AMENDMENT #1 revises the provision that prohibits the department from
collect
ing
the new
mineral severance
tax rate until the first day of a month occurring at least
30 days
after the receipt of a certified copy of such action by the department
by incre
asing "30 days" to "60 days".
Current Bill Text
Read the full stored bill text
SENATE BILL 889
By Reeves
HOUSE BILL 695
By Baum
HB0695
002722
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AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 7, Part 2, relative to mineral severance
tax.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 67-7-203(a), is amended by deleting
the subsection and substituting instead:
(a) The rate of the tax must be set by the county legislative body, but must not
exceed the following amounts per ton on sand, gravel, sandstone, chert, or limestone
severed from the ground in the county:
(1) For a tax period that begins prior to July 1, 2025, fifteen cents (15¢)
per ton;
(2) For a tax period that begins on or after July 1, 2025, and prior to July
1, 2030, twenty cents (20¢) per ton;
(3) For a tax period that begins on or after July 1, 2030, and prior to July
1, 2035, twenty-five cents (25¢) per ton; and
(4) For a tax period that begins on or after July 1, 2035, and for
subsequent tax periods, thirty cents (30¢) per ton.
SECTION 2. Tennessee Code Annotated, Section 67-7-201, is amended by deleting
subsection (b) and redesignating the remaining subsection.
SECTION 3. Tennessee Code Annotated, Section 67-7-207(b), is amended by
designating the existing language as subdivision (1) and adding the following new subdivision:
(2) Not less than thirty (30) days after the end of a county's fiscal year, each
county that receives revenue from a tax levied pursuant to this part shall provide an
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annual written report to the comptroller of the treasury, the commissioner of
transportation, the chair of the transportation and safety committee of the senate, and
the chair of the committee of the house of representatives having jurisdiction over
transportation issues, detailing the amount of revenue deposited into the county road
fund during the previous fiscal year, the amount of revenue spent by the county, and
how those expenditures have been designated and used for construction, maintenance,
and repair of the county system pursuant to subdivision (b)(1).
SECTION 4. Tennessee Code Annotated, Section 67-7-212, is amended by adding the
following new subsection:
(d) A county legislative body that has authorized a tax under this part may
increase the tax rate in accordance with § 67-7-203(a) by adopting a resolution by a two-
thirds (2/3) majority vote. The presiding officer of the county legislative body shall
deliver a certified copy of the resolution increasing the tax rate to the department of
revenue. The new tax rate must not be collected by the department of revenue pursuant
to the county legislative action until the first day of a month occurring at least thirty (30)
days after the receipt of a certified copy of such action by the department.
SECTION 5. This act takes effect upon becoming a law, the public welfare requiring it.