Tennessee § 7-88-106 - Apportionment and distribution of incremental increases due to public use facility.

§ 7-88-106. Apportionment and distribution of incremental increases due to public use facility.

If a municipality or public authority has financed, constructed, leased, equipped, renovated or acquired a qualified public use facility within a tourism development zone, then state and local sales and use taxes shall be apportioned and distributed to the municipality in an amount equal to the incremental increase in state and local sales and use tax revenue derived from the sale of goods, products and services within the tourism development zone in excess of base tax revenues, excluding any increase in the state rate for sales and use tax; provided, however, that, with respect to any facility that elects to qualify as a qualified public use facility under § 7-88-103(7)(A)(ii) or (7)(A)(iii), only the portion of the incremental increase in the local sales and use tax revenue as is designated by resolution of the municipality shall be so apportioned and distributed under this section, unless the municipality designates by resolution a lesser time period for the apportionment and distribution of the revenues; and in the event one (1) or more other local taxes are authorized for use within the tourist development zone, then the portion of the additional taxes as are designated by resolution of the municipality shall be similarly apportioned and distributed. For any facility that elects to qualify as a qualified public use facility under § 7-88-103(7)(A)(ii) or (7)(A)(iii), the portion of the incremental increase in the local sales and use tax revenue that is statutorily designated for local schools may not be apportioned and distributed for such a qualified public use facility. For any facility that elects to qualify as a qualified public use facility and is located in any county having a population of not less than seventy-one thousand one hundred (71,100) nor more than seventy-one thousand two hundred (71,200), according to the 2000 federal census or any subsequent federal census, any revenue derived from an increase in the local sales and use tax rate occurring on or after January 1, 2009, may not be apportioned and distributed for such a qualified public use facility and instead shall be apportioned and distributed exclusively as provided in § 67-6-712(a); provided, however, that this sentence shall not apply to any increase in the local sales and use tax enacted after July 1, 2010. Apportionment and distribution of such taxes shall continue, until the earlier of: The date on which the cumulative amount apportioned and distributed to the municipality equals the cost of the qualified public use facility, plus any interest on indebtedness of the municipality or public authority related to such cost; The date on which the qualified public use facility ceases to be a qualified public use facility; or Thirty (30) years from the date it is reasonably anticipated that the facility will commence operations as a public use facility. After the apportionment and distribution of state sales and use taxes pursuant to subdivision (a)(1) has ceased with respect to one (1) qualified public use facility that consisted of a hotel with at least five hundred (500) rooms and related retail, parking, and commercial uses, that was approved by the state building commission, on recommendation of the comptroller prior to December 31, 2018, or as such approval shall thereafter be amended by the state building commission, and that was placed in service no later than December 31, 2024, the apportionment and distribution of the incremental increase in the local sales and use tax revenue with respect to such qualified public use facility must continue until the earlier of: Thirty (30) years from the date it is reasonably anticipated that the facility will commence operations as a public use facility; or The date the cumulative amount apportioned and distributed to the municipality under this subdivision (a)(2) with respect to such facility equals the indebtedness of the municipality or public authority, plus interest thereon, related to the cost of the public use facility payable from such amount. This subdivision (a)(2) does not affect the apportionment and distribution pursuant to subdivision (a)(1) of any state sales and use taxes generated by such qualified public use facility hotel and related retail parking and commercial uses as described in subdivision (a)(2)(A). This subdivision (a)(2) does not affect the apportionment and distribution pursuant to subdivision (a)(1) of any local sales and use taxes generated by such qualified public use facility hotel and related retail parking and commercial uses as described in subdivision (a)(2)(A). After the apportionment and distribution of state sales and use taxes pursuant to subdivision (a)(1) has ceased with respect to one (1) or more qualified public use facilities located in a center city area located in a municipality in a county having a population of not less than nine hundred thousand (900,000), according to the 2010 federal census or any subsequent federal census, the apportionment and distribution of the incremental increase in the local sales and use tax revenue with respect to such qualified public use facility shall continue until the earlier of: Thirty (30) years from the date it is reasonably anticipated that the facility will commence operations as a public use facility; or The date the cumulative amount apportioned and distributed to the municipality under this subdivision (a)(3) with respect to such facility equals the indebtedness of the municipality or public authority, plus interest thereon, related to the cost of the public use facility payable from such amount. This subdivision (a)(3) does not affect the apportionment and distribution pursuant to subdivision (a)(1) of any state sales and use taxes generated by such qualified public use facility uses as described in subdivision (a)(3)(A). This subdivision (a)(3) does not affect the apportionment and distribution pursuant to subdivision (a)(1) of any local sales and use taxes generated by such qualified public use facility hotel and related uses as described in subdivision (a)(3)(A). Except as otherwise provided in subsection (c), tax revenue distributed to the municipality shall be for the exclusive use of the municipality or the public authority formally designated by the municipality, in accordance with the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21, the Public Building Authorities Act of 1971, compiled in title 12, chapter 10, or chapter 53 of this title for payment of the cost of the public use facility, including interest and debt service on any indebtedness related to the public use facility, or the lease payments with respect to any public use facility, and shall apply to only one (1) tourism development zone per municipality. The apportionment and payment shall be made by the department of revenue to the municipality within ninety (90) days of the end of each fiscal year for which the municipality is entitled to receive an allocation and payment pursuant to this chapter. Notwithstanding this subsection (b), a county having a metropolitan form of government with a population of more than five hundred thousand (500,000), according to the 2000 federal census or any subsequent federal census, and a municipality in a county having a population of more than five hundred thousand (500,000), according to the 2000 federal census or any subsequent federal census, shall not be limited to one (1) tourism development zone eligible to receive a distribution of tax revenue, and such county and such municipality are not required to designate additional tourism development zones as a secondary tourism development zone to receive a distribution of tax revenue. If there has been designated within the municipality a secondary tourist development zone, then the incremental increase in state and local sales and use tax revenue derived from the sale of goods, products and services within the secondary tourist development zone in excess of base tax revenues, excluding any increase in the state rate for sales and use tax, shall be apportioned and distributed to the municipality for deposit in its general fund. Apportionment and distribution of the taxes shall continue until the earliest of: The first date on which the indebtedness of the municipality or public authority related to the qualified public use facility located within the secondary tourist development zone has been paid in full; The date on which the cumulative amount apportioned and distributed equals the cumulative amount of principal and interest on indebtedness of the municipality or public authority related to the qualified public use facility located within the secondary tourist development zone; The date on which the qualified public use facility ceases to be a qualified public use facility; or Thirty (30) years from the date it is reasonably anticipated that the facility will commence operations as a public use facility. Acts 1998, ch. 1055, § 7; 1999, ch. 356, § 1; 2004, ch. 909, §§ 7, 8; 2006, ch. 781, § 2; 2007, ch. 461, §§ 12, 13; 2007, ch. 524, §§ 4, 5; 2007, ch. 593, § 3; 2010, ch. 1134, § 4; 2018, ch. 1058, § 1; 2019, ch. 84, § 1; 2019, ch. 226, § 1; 2020, ch. 751, § 1. Compiler's Notes. Acts 2004, ch. 909, § 10 provided that: “It is the express intent of the General Assembly that the enactment of this act will not affect applications which as of the date of passage of this act [June 8, 2004] either have already been approved by the state or for which a letter of intent has been filed with the commissioner of finance and administration.” For tables of U.S. decennial populations of Tennessee counties, see Volume 13 and its supplement. Acts 2007, ch. 593, § 3 purported to amend this section, effective June 28, 2007, by adding subsection (c). Acts 2007, ch. 461, § 13 amended this section, effective June 19, 2007, by adding subsection (c). The provisions of subsection (c) as added by ch. 593 were the same as the provisions added by ch. 461, ch. 593 was not given effect. Amendments. The 2018 amendment added (a)(2). The 2019 amendment by ch. 84, rewrote (a)(2) which read: “(2)(A) Notwithstanding subdivision (a)(1), and subject to the recommendation of the comptroller of the treasury and approval by the state building commission no later than December 31, 2018, the portion of the incremental increase in the local sales and use tax revenue shall be apportioned and distributed for one (1) qualified public use facility if placed in service no later than December 31, 2022, and if such facility consists of a hotel with at least five hundred (500) rooms and related retail, parking, and commercial uses. No state sales and use tax revenue shall be allocated to the municipality pursuant to this subdivision (a)(2).“(B) Apportionment and distribution of local tax revenue in accordance with subdivision (a)(2)(A) shall continue until the earlier of:“(i) Thirty (30) years from the date it is reasonably anticipated that the facility will commence operations as a public use facility; or“(ii) The date the cumulative amount apportioned and distributed to the municipality under subdivision (a)(2)(A) with respect to such facility equals the indebtedness of the municipality or public authority, plus interest thereon, related to the cost of the public use facility payable from such amount.” The 2019 amendment by ch. 226, substituted “December 31, 2018, or as such approval shall thereafter be amended by the state building commission,” for “December 31, 2018,” in (a)(2). The 2020 amendment added (a)(3). Effective Dates. Acts 2018, ch. 1058. § 3. May 21, 2018. Acts 2019, ch. 84, § 2. April 3, 2019. Acts 2019, ch. 226, § 2. April 30, 2019. Acts 2020, ch. 751, § 2. June 22, 2020.