House Bill 127 amends various sections of the Tennessee Code Annotated to update the terminology and conditions related to local tax surcharges for transportation improvements. Notably, the bill replaces the term "transit improvement" with "transportation improvement" throughout Title 67, Chapter 4, Part 32. Additionally, it clarifies the definition of "implementing agency" and "local government," and introduces a new definition for "surcharge" and "transportation improvement program." The bill also specifies that local governments can only collect and administer surcharge proceeds if they allocate funds for road purposes from local revenue sources, maintaining an average amount based on the previous five fiscal years.

Furthermore, the bill stipulates that if a local government fails to meet the funding requirement after July 1, 2025, their revenue allocation will be reduced accordingly, with the unallocated funds redirected to the state highway fund for improvements in the local jurisdiction. This ensures that local governments remain accountable for their transportation funding commitments while allowing for state-level support for highway improvements. The act is set to take effect on July 1, 2025.

Statutes affected:
Introduced: 67-3-901, 67-4-3201, 67-4-3205, 67-4-3206