Tennessee Senate Bill SB1307

Tennessee 2025-2026 Regular Session

• Introduced: 2/6/25

Caption

AN ACT to amend Tennessee Code Annotated, Section 67-3-901 and Title 67, Chapter 4, Part 32, relative to local tax surcharges.

Summary

SB1307 revises Tennessee law governing local tax surcharges used for transportation-related projects. The bill renames the existing “transit improvement” surcharge framework to “transportation improvement” and broadens the statutory definitions so that the program can cover a wider range of transportation system projects and services, including public transit, highways, and bridges. It also updates related terminology throughout the code to reflect this broader scope. The bill further changes how local governments qualify to collect and administer surcharge revenues. Beginning July 1, 2025, a county or municipality must appropriate and allocate from local revenue sources an amount for road purposes that is at least equal to the average of the prior five fiscal years, excluding bond issues, federal revenue sharing, and the surcharge revenues themselves. If a local government falls below that benchmark, the amount otherwise available to it under the surcharge program is reduced by the shortfall, and the withheld amount is redirected to the state highway fund for Tennessee Department of Transportation improvements within that local jurisdiction.

Impact

SB1307 amends Tennessee Code Annotated Section 67-3-901 and Title 67, Chapter 4, Part 32 to expand and reframe the local surcharge authority from a transit-focused program to a broader transportation improvement program. It changes statutory definitions for implementing agencies, local governments, surcharges, and transportation improvement programs, and it updates references from “public transit system” to “transportation.” The bill also creates a new fiscal maintenance requirement tied to local road spending, with a penalty mechanism that diverts reduced local surcharge proceeds to the state highway fund if the local government does not maintain its historical level of road funding.

Sentiment

Based on the bill text and the absence of recorded committee debate or votes in the provided materials, the measure appears to be framed as a policy and funding accountability bill rather than a controversial social issue. Its structure suggests support for transportation investment and a desire to ensure local governments continue contributing meaningful local funds before receiving surcharge proceeds. Because no transcripts or vote history are provided, there is no documented public sentiment in the record here, but the bill’s design indicates an emphasis on infrastructure funding discipline and state oversight.

Contention

The main point of potential contention is the new maintenance-of-effort requirement for local governments. Counties and cities that rely on surcharge revenues may object to losing access to those funds if they do not maintain road spending at the five-year average, especially because the withheld amount is redirected to state highway projects in their jurisdiction rather than remaining under local control. Another possible point of dispute is the bill’s broader redefinition of the program from “transit improvement” to “transportation improvement,” which expands the scope of eligible projects and may affect how local governments and transportation agencies prioritize funding.