2023 Tennessee Code › Title 67 - TAXES AND LICENSES (§§ 67-1-101 — 67-10-107) › Chapter 3 - PETROLEUM PRODUCTS AND ALTERNATIVE FUELS TAX LAW (§§ 67-3-101 — 67-3-1407) › Part 9 - GENERAL ADMINISTRATIVE PROVISIONS (§§ 67-3-901 — 67-3-912) › Section 67-3-901 - Gasoline tax - Distribution of receipts - Expenses of administration - Utility relocation loan program

(a)
The commissioner shall apportion for distribution all of the taxes collected pursuant to §
67-3-201
, and shall inform the department of finance and administration as to the proper amounts of all distributions to be made from the taxes.
(b)
Revenues from the tax imposed by §
67-3-201
shall be apportioned for distribution in the following order:
(1)
Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9;
(2)
Of the amounts designated in subdivisions (b)(2)-(5) for distribution to the counties, cities and highway fund, one percent (1%) shall be subtracted from the amount designated for cities, one percent (1%) shall be subtracted from the amount designated for counties, and two percent (2%) shall be subtracted from the amount designated for the highway fund for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities, counties or highway fund;
(3)
Twenty-eight and sixty-eight hundredths percent (28.68%) of total taxes collected to the various counties of the state on the basis set out in §
54-4-103
;
(4)
Fourteen and thirty-eight hundredths percent (14.38%) of total taxes collected to the various municipalities, as defined by §
54-4-201
, on the basis set out at §
54-4-203
; and
(5)
Any funds remaining after the distributions set out in subdivisions (b)(1)-(4) to the highway fund. There shall be accumulated and set apart within the fund such amounts as required, not to exceed one million five hundred thousand dollars ($1,500,000) during each of four (4) succeeding fiscal years, which shall be available for carrying out the utility relocation loan program, established in subsection (j).
(c)
Revenues from the increases in taxes imposed by chapter 49 of the Acts of 1985, and chapter 454 of the Public Acts of 1985, effective 1985, shall be distributed in accordance with the following formula:
(1)
Two cents (2¢) of such revenues shall be apportioned pursuant to subsection (b); and
(2)
One cent (1¢) of such revenues shall be apportioned as follows:
(A)
Of such amount designated in subdivisions (c)(2)(B) and (C) for distribution to the counties and cities, one percent (1%) shall be subtracted from the amount designated for cities and one percent (1%) shall be subtracted from the amount designated for counties for distribution to the general fund for expenses of administration prior to the distribution of the funds to the cities or counties;
(B)
Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in §
54-4-103
; and
(C)
Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by §
54-4-201
, on the basis set out in §
54-4-203
.
(d)
Notwithstanding any law to the contrary, a county shall be eligible to receive those revenues to be distributed directly to it from the tax increases imposed by chapter 419 of the Public Acts of 1985, and chapter 454 of the Acts of 1985, effective 1985, 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 bond issues and federal revenue sharing proceeds shall be excluded from the five (5) year average computation. If a county fails after July 1, 1985, 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 county from the revenues derived by former §§
67-3-603
and
67-3-604
as those statutes existed on July 1, 1985, shall be reduced by the amount of the decrease below such average. The amount of such funds not allocated to such county because of such decrease shall be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in such county, and such state funds shall be in addition to the funds otherwise allocated for improvements in such county in that fiscal year.
(e)
Funds apportioned to counties under chapter 419 of the Public Acts of 1985 shall be used for resurfacing and upgrading county roads, including the paving of gravel roads. Any expenditure for equipment shall be approved by a two-thirds (
2
/
3
) vote of the county legislative body, prior to purchase.
(f)
Revenues from the increases in taxes imposed by former §§
67-3-603
and
67-3-604
as those statutes existed on June 1, 1986, shall be distributed and allocated as follows:
(1)
Revenue from the first three cents (3¢) per gallon of such increases in taxes shall be apportioned as follows:
(A)
Amounts required to be paid to the debt service fund pursuant to title 9, chapter 9;
(B)
Three million dollars ($3,000,000) per annum, beginning on July 1, 1986, to the highway fund for the use and benefit of certain mass transit projects; and
(C)
All other amounts to the highway fund to be used for accelerating the resurfacing of the state system of highways in order to establish a twelve-year cycle of resurfacing with implementation beginning in 1986 and being completed by 1998, and for new construction in the primary system of highways over the period from 1986 to 1999; and
(2)
Revenue from one cent (1¢) of such increases in taxes shall be apportioned as follows:
(A)
Of such amount designated hereafter for distribution to counties and cities, one percent (1%) shall be subtracted from the amount designated for counties, and one percent (1%) shall be subtracted from the amount designated for cities for distribution to the general fund for expenses of administration prior to the distribution of the funds to the counties or cities;
(B)
Sixty-six and two-thirds percent (662/3%) of such revenues collected to the various counties of the state on the basis set out in §
54-4-103
; and
(C)
Thirty-three and one-third percent (331/3%) of such revenues collected to the various municipalities, as defined by §
54-4-201
, on the basis set out in §
54-4-203
.
(g)
Prior to the apportionment set out in subsections (b), (c), (d) and (f), there shall be apportioned for distribution to the wildlife resources fund an amount equal to eighty-eight one-hundredths of one percent (0.88%) of the taxes collected under §
67-3-201
, exclusive of tax revenues resulting from the three cents (3¢) per gallon gasoline tax increase imposed by chapter 46 of the Public Acts of 1989 and all tax revenues resulting from the gasoline tax increase imposed by chapter 181 of the Public Acts of 2017. In addition to any other purposes authorized by law for which such funds may be used, the funds apportioned pursuant to this subsection (g) must also be used for public and environmental infrastructure at marinas. A grant awarded to a marina from the funds apportioned pursuant to this subsection (g) must be based on the amount of gasoline sold at that marina. The wildlife resources agency shall strive to ensure that the number of grant recipients is not less than twenty-five (25) marinas.
(h)
All revenues and investment income derived from the increase in the gasoline tax rate imposed by chapter 46 of the Public Acts of 1989, shall be placed in the state highway fund, and shall not be subject to the apportionment and distribution provisions of subsection (b).
(i)
Revenues from the one cent (1¢) increase in taxes, from nineteen cents (19¢) to twenty cents (20¢), imposed by former §§
67-3-1703
and
67-3-1704
, as those statutes existed under prior Tennessee law immediately after chapter 241 of the Acts 1989 became effective, shall be apportioned as provided in subdivision (f)(2).
(j)
(1)
From the amounts accumulated and set apart pursuant to subdivision (b)(5), there is established a "utility relocation loan program" for loan financing of all costs incurred by any county, town, city, metropolitan government, utility district, authority or not-for-profit business organizations empowered to provide utility services that provide utility services to customers related to relocating, moving or re-installing their utility facilities, without any additions to their utility facilities, when located within rights-of-way of highways on the system of state highways and required because of highway construction projects administered by the department of transportation.
(2)
The Tennessee board of utility regulation shall review applications for utility relocation loans. Only applicants that meet all of the following criteria may be recommended to the state funding board for loans:
(A)
Are obligated to relocate, move or re-install its utilities due to a state highway project;
(B)
Have been otherwise unable to obtain financing for such relocation at a reasonable cost on reasonable terms;
(C)
Have established fees and charges for services of the utility to be effective immediately or over time sufficient to provide assurance of financial stability, and to agree to adjust such fees and charges periodically to ensure timely payment of loan payments and costs of operation of the system; and
(D)
Have covenanted to take such actions necessary to be able to pay all loan payments when due.
(3)
As part of its recommendation, the Tennessee board of utility regulation shall recommend an estimated amount of the loan and an interest rate for the loan, utilizing an economic index based upon factors that include, but are not limited to, per capita incomes and property values of the applicant. Applicants falling within the lower economic scale on the index shall be eligible for lower interest rates. Loans may be recommended at no interest for terms of five (5) years or less. In determining its recommendations, the board may use any index or regulations promulgated pursuant to §
68-221-1005(b)
.
(4)
The state funding board is empowered to make and administer loans from the funds and may establish such terms as it determines to be appropriate to carry out the terms of this subsection (j), subject to the following:
(A)
Loans shall be for a term of fifteen (15) years or less, not to exceed the useful life of the relocated utilities, with no prepayment penalties;
(B)
Loans shall be subject to such other terms, not inconsistent with the foregoing, as the board determines to be appropriate; and
(C)
Prior to the start of each fiscal year, the secretary of the state funding board shall certify to the commissioner of finance and administration and the commissioner of transportation, the uncommitted balance in the loan program as of the start of the next fiscal year.
(5)
This subsection (j) shall not be construed to be an appropriation of funds and no funds shall be obligated or expended pursuant to this subsection (j), unless such funds are specifically appropriated through the department of transportation or as a specific amendment by the general appropriations act.
(k)
Notwithstanding §
54-2-103
or any other law to the contrary, a percentage of funds collected and allocated to the state highway fund shall be deposited in the general fund as follows:
(1)
If the statute allocating funds to the state highway fund earmarks two percent (2%) or more of the revenue collected for the general fund, no additional allocation to the general fund shall be made;
(2)
If the statute allocating funds to the state highway fund earmarks less than two percent (2%) of the revenue collected for the general fund, an amount equal to the amount necessary when added to the statutory earmark, if any, equals two percent (2%) of the revenue collected shall be earmarked for the general fund;
(3)
If the additional revenues earmarked for the general fund as provided in subdivision (k)(2) are less than seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years, the earmark for the general fund from the gasoline tax imposed under §
67-3-201
shall be increased in an amount sufficient to provide that the total amount earmarked for the general fund as provided in subdivision (k)(2) and this subdivision (k)(3) shall be seven million dollars ($7,000,000) in the fiscal year ending June 30, 2001, and in subsequent fiscal years;
(4)
The allocation of funds as provided in this subsection (k) shall not have an impact on any scheduled or ongoing construction projects;
(5)
The department of transportation shall submit any proposal for apportionment of costs resulting from the general fund allocation in this subsection (k) to the state building commission for approval prior to implementing such proposal, including, but not limited to, the programs and projects to be affected and the amount proposed to be allocated to each such program or project;
(6)
Except as provided in subdivision (k)(4), it is the legislative intent that the effect of this subsection (k) be allocated on a pro rata basis to any affected program or project; and
(7)
This subsection (k) shall not apply to revenues generated under §
67-3-201
from the increase in the tax imposed by chapter 181 of the Public Acts of 2017.
(l)
Revenues derived under §
67-3-201
from the increase in taxes imposed by chapter 181 of the Public Acts of 2017 shall be apportioned and distributed in the following manner:
(1)
Twenty-five and four-tenths percent (25.4%) to the various counties of the state on the basis set forth in §
54-4-103
;
(2)
Twelve and seven-tenths percent (12.7%) to the various municipalities, as defined by §
54-4-201
, on the basis set forth in §
54-4-203
; and
(3)
Sixty-one and nine-tenths percent (61.9%) to the highway fund.
(m)
Notwithstanding any law to the contrary, a county shall be eligible to receive those revenues to be distributed directly to it from the increase in taxes imposed by chapter 181 of the Public Acts of 2017 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 bond issues and federal revenue sharing proceeds shall be excluded from the five-year average computation. If a county fails after July 1, 2017, 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 county under this section shall be reduced by the amount of the decrease below such average. The amount of such funds not allocated to such county because of such decrease shall be allocated to the state highway fund, to be used by the department of transportation for the improvement of state highways in such county, and such state funds shall be in addition to the funds otherwise allocated for improvements in such county in that fiscal year.
Amended by 2024 Tenn. Acts, ch. 660,s 1, eff. 7/1/2024.
Amended by 2023 Tenn. Acts, ch. 463, s 30, eff. 7/1/2023.
Amended by 2022 Tenn. Acts, ch. 1103, s 2, eff. 7/1/2022.
Amended by 2022 Tenn. Acts, ch. 1103, s 1, eff. 7/1/2022.
Amended by 2017 Tenn. Acts, ch. 478, s 2, eff. 7/1/2017.
Amended by 2017 Tenn. Acts, ch. 181, s 20, eff. 7/1/2017.
Amended by 2017 Tenn. Acts, ch. 181, s 19, eff. 7/1/2017.
Acts 1997 , ch. 316, § 1; 1999, ch. 450, § 6; 2000, ch. 654, § 1; 2000, ch. 983, § 4; 2001, ch. 448, § 2; T.C.A., § 67-3-2001.