HOUSE BILL 127
By Lamberth
SENATE BILL 1307
By Johnson
SB1307
001206
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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
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(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.