Tennessee Code Title 4. State Government § 4-49-104

Current as of January 02, 2024 | Updated by Findlaw Staff

(a) It is a taxable privilege to offer sports wagering in this state under a license issued in accordance with this part. Notwithstanding another state law to the contrary, a licensee shall only pay a privilege tax on its gross handle in accordance with this section.

(b) There is imposed upon the gross handle of a licensee a privilege tax of one and eighty-five one hundredths percent (1.85%).

(c) The tax imposed under this section must be paid monthly by a licensee based on its gross handle for the immediately preceding calendar month, in accordance with rules promulgated by the council. A licensee may deduct from its gross handle the amount of federal excise tax paid each month, in accordance with rules promulgated by the council. A licensee shall not deduct from the gross handle winning payouts to bettors or promotional wagers or payouts. The council shall promulgate rules to specify the method by which a licensee must account for adjustments to the gross handle for wagers that are cancelled or voided and repeal all rules related to the privilege tax on adjusted gross income.

(d) For the purpose of enforcing this part and ascertaining the amount of tax due under this section, the council may competitively procure the services of an outside contractor to provide a central accounting and reporting system, to ascertain all bets wagered minus the total amount paid out to winning bettors daily, and such other information as the council may require. All licensees shall utilize such central accounting and reporting system.

(e)(1)(A) Except as provided in subsection (f), eighty percent (80%) of the privilege tax collected under this section must be distributed by the council to the state treasurer for deposit into an account, to be known as the disbursement account, which is administered by the state treasurer for use by local education agencies (LEAs), as defined in § 49-1-103, for the construction and maintenance of public school buildings.

(B) Subject to the availability of funds in the disbursement account, and upon the LEA's submission of a completed application:

(i) The state treasurer shall disburse, in the order in which the state treasurer receives completed applications, funds to an LEA in an amount equal to twenty-five dollars ($25.00) for each student enrolled in the LEA, if the LEA is:

(a) Located in a county that is designated as an economically distressed or at-risk county by the department of economic and community development;

(b) An LEA in which fifty percent (50%) or more of the public schools operated or authorized by the LEA received an “A” letter grade pursuant to § 49-1-228 for the 2023-2024 school year or any subsequent school year; or

(ii) To the extent any funds remain in the disbursement account after the state treasurer makes the disbursements required in subdivision (e)(1)(B)(i), if one (1) or more LEAs have sustained significant damage to an existing public school building or facility due to the occurrence of an emergency or natural disaster, then the state treasurer shall disburse, in the order in which the state treasurer receives completed applications, funds to such LEAs. The state treasurer shall disburse no less than fifteen percent (15%) of any funds remaining in the disbursement account after disbursements have been made pursuant to subdivision (e)(1)(B)(i), to qualifying LEAs pursuant to this subdivision (e)(1)(B)(ii), if applicable; and

(iii) To the extent any funds remain in the disbursement account after the state treasurer disburses funds pursuant to subdivision (e)(1)(B)(ii), the state treasurer may disburse funds, in the order in which the state treasurer receives completed applications, to an LEA that identifies a demonstrated need for funds for the construction and maintenance of public school buildings that differs from the criteria in subdivisions (e)(1)(B)(i) and (ii).

(C) The state treasurer shall establish the application period within which an LEA must apply for a disbursement of funds pursuant to this subdivision (e)(1). The state treasurer may establish more than one (1) application period in a fiscal year.

(D) Within each application period established by the state treasurer, an LEA that meets one (1) or more of the criteria described in subdivision (e)(1)(B) may apply for a disbursement of funds for the construction and maintenance of public school buildings by submitting a completed application, as prescribed by the state treasurer. Each application submitted to the state treasurer must include, at a minimum, the following:

(i) A plan detailing how the LEA will expend the funds, including, but not limited to:

(a) A description of the construction and maintenance project the LEA will implement using the funds;

(b) The timeline for completion of the project, including project milestones;

(d) The LEA's ability to monitor the usage of the funds for the intended purpose of the disbursed funds, as provided in, or pursuant to, this subdivision (e)(1); and

(e) Any other information or documentation requested by the state treasurer; and

(ii) A budget and financial statement for the LEA, which must include, but is not limited to, each of the LEA's funding sources.

(E)(i) Except as provided in, and subject to, subdivision (e)(1)(B), the state treasurer shall determine the maximum amount of funds that may be allocated to an LEA pursuant to subdivision (e)(1)(B)(ii) or (e)(1)(B)(iii) from the disbursement account for purposes of this subdivision (e)(1). When determining the maximum amount of funds that may be allocated to an LEA pursuant to subdivision (e)(1)(B)(ii) or (e)(1)(B)(iii), the state treasurer may consider one (1) or more of the following:

(a) The severity of the damage caused by an emergency or natural disaster;

(b) The severity or criticality of the demonstrated need identified by the LEA pursuant to subdivision (e)(1)(B)(i);

(d) The amount of funds requested by the LEA, as compared to the funds available for disbursement.

(ii) Notwithstanding title 4, chapter 5, or another law the contrary, the state treasurer is not required to promulgate rules to effectuate the requirements of this subdivision (e)(1)(E).

(F) The state treasurer may disburse funds to LEAs in whole or in part, based on project milestones. If the state treasurer elects to disburse funds in whole or in part, and the receiving LEA does not complete a project milestone or abandons the project altogether, then the LEA shall return any unused funds disbursed to the LEA from the disbursement account to the state treasurer.

(G) The state treasurer may request periodic reports from each LEA that receives a disbursement of funds pursuant to this subdivision (e)(1) regarding the use of such funds and the completion of the LEA's construction and maintenance project. If an LEA fails to comply with the state treasurer's request for periodic reporting regarding an ongoing construction and maintenance project, then the state treasurer may withhold the LEA's next disbursement.

(H) The state treasurer may facilitate procurements and enter into contracts or agreements to effectuate a disbursement of funds pursuant to this subdivision (e)(1) for financial consultants; auditors, accountants, and attorneys; third-party administrators; and other contractors, as the state treasurer deems necessary to carry out the duties and responsibilities for establishing, implementing, and administering disbursements pursuant to this subdivision (e)(1). Payment for such services must come from the disbursement account established under this subdivision (e)(1).

(I) The disbursement account administered by the state treasurer must be invested by the state treasurer pursuant to title 9, chapter 4, part 6. The state treasurer shall account for such funds in one (1) or more separate accounts in accordance with this section or other applicable law. Interest accruing on investments and deposits of the account must be returned to the account and remain part of the account. Any unencumbered moneys and any unexpended balance remaining in the account at the end of a fiscal year must not revert to the general fund, but must be carried forward until expended in accordance with this subdivision (e)(1). The money deposited in the account pursuant to subdivision (e)(1)(A) and the interest accruing on the deposited money must be used by the state treasurer to disburse funds to LEAs in accordance with this subdivision (e)(1).

(J) In addition to the charge deducted from an account established pursuant to title 9, chapter 4, part 6 to defray the costs of administering the fund, the state treasurer may charge and deduct from the disbursement account an administrative fee to effectuate the purposes of this subdivision (e)(1) and to pay all reasonable expenses for legal services, accounting services, auditing services, consulting services, and other necessary services as determined by the state treasurer.

(K) The state treasurer may promulgate rules to effectuate the purposes of this subdivision (e)(1). The rules must be promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

(2) Fifteen percent (15%) of the privilege tax collected under this section must be distributed by the council quarterly to the state treasurer for deposit into the general fund, to be remitted quarterly to each local government in this state on a per capita basis, as determined by population based on the last federal census. For purposes of calculating the allocation, the population of counties excludes the population of each municipality within the boundaries of the county. Funds remitted to a local government under this subdivision (e)(2) must be allocated to the county or city general fund, as applicable, to be used for emergency services or local infrastructure projects, including, without limitation, transportation and road projects and public buildings. Notwithstanding another law to the contrary, the allocation and distribution of moneys to counties and municipalities under this subdivision (e)(2) must be made according to the revised populations certified by the department of economic and community development under § 4-3-710, except in instances where a jurisdiction's population is revised as a result of a special census or in a year in which populations are revised as a result of the regular decennial federal census.

(3) Five percent (5%) of the privilege tax collected under this section must be distributed by the council to the state treasurer and allocated to the department of mental health and substance abuse services to use in the manner prescribed by § 4-49-119.

(f) In any year, if the net lottery proceeds deposited into the lottery for education account established by § 4-51-111(b), exclusive of the amount in the general shortfall reserve subaccount created pursuant to § 4-51-111(b)(3), are not sufficient to meet the amount appropriated for educational programs and purposes pursuant to § 4-51-111(c), then the funds allocated pursuant to subdivision (e)(1) must be reduced by the amount of the deficiency and such amount must be deposited into the lottery for education account.

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Cite this article: FindLaw.com - Tennessee Code Title 4. State Government § 4-49-104 - last updated January 02, 2024 | https://codes.findlaw.com/tn/title-4-state-government/tn-code-sect-4-49-104/

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