2023 Tennessee Code › Title 7 - CONSOLIDATED GOVERNMENTS AND LOCAL GOVERNMENTAL FUNCTIONS AND ENTITIES (§§ 7-1-101 — 7-91-104) › LOCAL GOVERNMENT FUNCTIONS (§§ 7-51-201 — 7-69-116) › Chapter 52 - MUNICIPAL ELECTRIC PLANTS (§§ 7-52-101 — 7-52-611) › Part 3 - MUNICIPAL ELECTRIC SYSTEM TAX EQUIVALENT LAW OF 1987 (§§ 7-52-301 — 7-52-310) › Section 7-52-303 - Part definitions

(a)
As used in this part, unless the context otherwise requires:
(1)
"Assessment ratio in effect" means that assessment ratio being applied by the comptroller of the treasury in assessing electric system property of electric cooperatives and electric membership corporations for ad valorem taxation or, if such assessment function ceases to be performed by the comptroller of the treasury, that assessment ratio applied by any authorized department, agency, comptroller of the treasury, or official of the state empowered to so apply such an assessment ratio in assessing electric system property of electric cooperatives and electric membership corporations;
(2)
(A)
"Average of revenue less power cost from electric operations for the preceding three (3) fiscal years" means an amount derived by:
(i)
Determining for each of the three (3) fiscal years immediately preceding the beginning of the current fiscal year the electric system's total operating revenues for the year less any operating revenue amounts deemed uncollectible and written off for the year, net of any such amounts reinstated during the year that had been written off in any prior fiscal year, and accounting for any extraordinary items attributable to any prior fiscal year's total operating revenue or uncollectible amounts, and totaling the three (3) yearly amounts so determined;
(ii)
Determining for each of the same three (3) fiscal years described in subdivision (a)(2)(A)(i) the total costs of purchased power excluding any charges for facilities' rental and accounting for any extraordinary items attributable to any prior fiscal year's purchased power costs and totaling the three (3) yearly amounts so determined; and
(iii)
Subtracting the total in subdivision (a)(2)(A)(ii) from the total in subdivision (a)(2)(A)(i) and dividing the resulting remainder by three (3);
(B)
For purposes of subdivision (a)(2)(A), "any prior fiscal year" means any fiscal year beginning on or after July 1, 1984. Also, for purposes of subdivision (a)(2)(A), all amounts described are those attributable only to electric system operations within Tennessee;
(3)
"Electric operations" means all activities associated with the establishment, development, and administration of an electric system and the business of supplying electricity and associated services to the public, including, but not limited to, the generation, purchase, and sale of electric energy and the purchase, use and consumption of electric energy by ultimate consumers;
(4)
"Electric system" means all tangible and intangible property and resources of every kind and description used or held for use in the purchase, generation, transmission, distribution, and sale of electric energy;
(5)
"Equalized property tax rate" of any taxing jurisdiction means the actual ad valorem property tax rate in effect for the calendar year in which the fiscal year begins multiplied by the applicable state, county, or municipal appraisal ratio for such taxing jurisdiction as determined, adopted, or applied by the state board of equalization, referred to in this part as "state board", or, in the absence of such action by the state board, by any authorized department, agency, commission, or official of the state empowered to determine, adopt, or apply an appraisal ratio for such taxing jurisdiction;
(A)
"Appraisal ratio" means the ratio of appraised values of record to one hundred percent (100%) of current values that are to be derived in accordance with applicable state law for use in ad valorem property tax determinations each tax year. However, if no appraisal ratio is determined, adopted, applied, as provided in this subdivision (a)(5)(A), "appraisal ratio" shall, for purposes of this part, have the numerical value of one (1);
(B)
For purposes of this part, the equalized property tax rate that is in effect for any taxing jurisdiction as of the beginning of any electric system fiscal year shall be the same as an equalized property tax rate calculated for such taxing jurisdiction for that tax year, which is the calendar year, in which the fiscal year begins, using the actual property tax rate in effect for, and the appraisal ratio applicable for, such taxing jurisdiction for such tax year;
(6)
"Fiscal year" means the year beginning July 1 of each calendar year;
(7)
"Municipality" means any incorporated city or town, metropolitan government, or county that now or hereafter owns and operates an electric system and buys all or part of its power requirements for resale and distribution from the Tennessee Valley authority;
(8)
(A)
"Net plant value of the electric plant" means the depreciated original cost of the electric plant, in service and held for future use, and the book value of construction work in progress, all as shown on the books of the electric system and all of which are for use in the generation, transmission, and distribution of electricity;
(B)
For purposes of subdivision (a)(8)(A):
(i)
"Electric plant" does not include that portion of any electric system properties that a municipality owns, operates, and maintains to perform contractual obligations, under agreements with the Tennessee Valley authority, requiring the municipality to:
(a)
Take the net output of a specified electric generating facility of the Tennessee Valley authority into the municipality's electric system; and
(b)
Deliver all or portions of such net output to the transmission system of the Tennessee Valley authority or to other electric facilities as specified by the Tennessee Valley authority; and
(ii)
The account, "electric plant purchased or sold," as prescribed by the federal energy regulatory commission's uniform system of accounts, shall be excluded;
(9)
"Private act" includes, without limitation, the charter and any amendments to the charter of any home rule municipality or any metropolitan government;
(10)
"Supervisory body" means any board or other agency of a municipality established to supervise the management and operation of its electric system and electric operations, or, in the absence of a board or other agency, the governing body of the municipality; and
(11)
"Taxing jurisdiction" means any county, incorporated city or town, or metropolitan government in Tennessee having the power to levy taxes, or any special taxing district in Tennessee on behalf of which ad valorem property taxes may be levied, for the support of governmental and related activities and services.
(b)
Terms appearing in this part, except where specifically defined, have the meanings defined or ascribed to them in the federal energy regulatory commission's uniform system of accounts applicable to electric system operations.
Acts 1987, ch. 84, § 4; 1995, ch. 305, § 80.