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TVA In Lieu of Tax Payments

Authority.  16 U.S.C. § 831 et seq., T.C.A. §§ 67-9-101 through 67-9-103.

Description.  TVA in lieu of tax payments are payments made by the Tennessee Valley Authority to the state for the purpose of replacing tax revenue that TVA would otherwise pay if it were not a tax-exempt federal agency. The amount of the payments is determined by federal law. 16 U.S.C. § 831(L), the TVA Act.

Distribution.  First $55.2 million to the state general fund.  Any amounts above $55.2 million are distributed as follows:

  1. 48.5 % - State
  2. 48.5 % - Counties and municipalities to be allocated as follows:
    a. 30 percent of the 48.5 percent to counties on the basis of their percentage of the state's total population.
    b. 30 percent of the 48.5 percent to counties on the basis of the percentage that the total acreage of each county bears to the total acreage of the state.
    c. 10 percent of the 48.5 percent to counties on the basis of the percentage of their land owned by TVA compared to all land owned by TVA in Tennessee.
    d. 30 percent of the 48.5 percent to municipalities on the basis of the population that the municipality bears to the population of all municipalities in the state.
  3. Three percent (3%) to local governments impacted by TVA construction activity on facilities to produce electric power.  The impacted areas are designated by TVA and payments are made during the period of construction activity and for one full fiscal year after completion of such activity.  The comptroller of the treasury allocates the impact funds among the counties and municipalities according to a weighted population formula.  If, in any fiscal year, there are remaining impact funds after allocation, or if there are no impacted areas, CTAS may receive an amount not greater than 30 percent of the funds, with up to 20 percent of any remaining funds allocated to the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) for an annual inventory of statewide public infrastructure needs, and additional 20 percent, if available, to TACIR for study purposes.  The remainder shall be allocated to any regional development authorities that have acquired a former nuclear site from the Tennessee Valley Authority.  The funds shall be used to construct roads, install water and wastewater facilities and provide other public infrastructure needs to assist in the development of the sites and other land as regional industrial, business and job incubator facilities consistent with regional development plans.  T.C.A. § 67-9-102.