WeVote
Log In

Bill

Bill

SB 1307

Highways, Roads and Bridges - As introduced, extends the authority for local governments to levy a surcharge on local privilege taxes to fund a transportation improvement program to all cities instead of only Chattanooga, Clarksville, Knoxville, Nashville, and Memphis, and to all counties instead of only Wilson, Washington, Blount, Sullivan, Sumner, Montgomery, Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby counties; expands the use of such local surcharge revenue for highway and bridge projects, in addition to mass transit projects. - Amends TCA Section 67-3-901 and Title 67, Chapter 4, Part 32.

114th Regular Session (2025-2026)

Expands local surcharges to all cities/counties and allows funds to be used for transportation projects including highways and bridges, not just transit.

Assigned to General Subcommittee of Senate Transportation and Safety Committee
#highways #roadsandbridges
0
WeVote Research Nonpartisan
Bill Summary · SB 1307

Summary of Bill SB 1307 (Session 114) – Tennessee

Purpose and Intent

  • Expands local government authority to impose a local surcharge on local privilege taxes (local transit tax surcharge) and broadens the allowable use of the resulting revenue.
  • Extends eligibility to levy the surcharge to all cities and all counties (not just a subset previously specified).
  • Allows surcharge revenues to be used for transportation improvements, including highways and bridges, in addition to mass transit projects.

Key Provisions

  1. Broadening local eligibility (Tax Surcharge)

    • Expands authority to impose a local transit tax surcharge to all local governments in Tennessee (cities and counties).

  2. Expanded use of surcharge revenues

    • Replaces references to “public transit system” with “transportation” to permit funds to be used for highways, bridges, and related transportation improvements, in addition to transit.

  3. Definitions and program framework (Chapter 67-4-3201 and related sections)

    • Recasts definitions:
      • Implementing agency: any public transit agency, regional transportation authority, or other local government entity responsible for planning/implementing a transportation improvement program.
      • Local government: any county or incorporated city/town.
      • Surcharge: the local tax or combination of taxes levied under this part.
      • Transportation improvement program: a program of transportation projects and services, including transit, highways, and bridges.
    • Recasts references from “public transit system” to “transportation” in related statutory provisions.

  4. Budgeting and matching requirements

    • A local government may only collect and administer surcharge proceeds if it appropriates and allocates local revenue for road purposes in an amount at least the five-year average of the preceding five fiscal years.
      • Excludes bond issues, federal revenue sharing, and surcharges under this part from the five-year average calculation.
    • If a local government fails after July 1, 2025 to meet this average for road purposes, the surplus (or deficit) is redirected:
      • Revenue otherwise allocable to the local government under this part is reduced by the shortfall.
      • The reduced amount is allocated to the state highway fund for use by the Department of Transportation (TDOT) to improve state highways within the local government’s jurisdiction.
      • These state funds are in addition to other funds allocated in that year.

  5. Phase-in and implementation timeline

    • Effective date: July 1, 2025.
    • Local governments must develop and adopt a transportation improvement program (via ordinance or resolution) before imposing the surcharge.

  6. Rental car surcharge prohibition (amended text)

    • The amended version (per the bill’s amended synopsis) removes the authority of local governments to levy a local option transit surcharge on rental car services.

Who Is Affected

  • Local governments: all counties and all cities/towns in Tennessee will be eligible to impose a local transit tax surcharge.
  • Metropolitan Nashville-Davidson County (Metro): treated as a key example in fiscal notes; currently the only jurisdiction that has implemented a local option transit surcharge.
  • The Tennessee Department of Transportation (TDOT): potential increases in state highway funds if local average-based funding falls short.
  • Public transit agencies, regional transportation authorities, and other local government entities involved in planning/implementing transportation improvement programs.

Procedural and Timeline Highlights

  • Local governments must develop and adopt a transportation improvement program by ordinance or resolution before imposing the surcharge.
  • If a government fails to meet the five-year average road-purposes appropriation after July 1, 2025, the mechanism redirects funds to the state highway fund for state highway improvements within that jurisdiction.
  • The act becomes effective July 1, 2025.

Fiscal Impact (Summary)

  • The fiscal impact is difficult to quantify due to multiple unknowns:
    • Which local governments will adopt the surcharge.
    • The amount of surcharge revenues (especially given Metro’s current revenue base and recent change).
    • The effect on local budgets and potential redirection of funds to the state highway fund.
  • The analysis suggests the state Highway Fund impact is not expected to be significant, but local revenue impacts are uncertain.

Notable Provisions from Amended Version

  • Expands eligibility and scope as described above.
  • Removes rental car surcharge authority for local surcharges.
  • Maintains the five-year averaging mechanism with exclusions as described.

If you’d like, I can extract a side-by-side comparison of current law vs. SB 1307 amendments or provide a plain-language FAQ for local governments weighing adoption.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.