Amends TCA Title 67, Chapter 6.

Under present law, revenue from state sales and use tax collections is earmarked and allocated as follows:<br /> <br /> (1) 29.0141 percent to the general fund;<br /> (2) 65.0970 percent to educational purposes; <br /> (3) 4.6030 percent to the several incorporated municipalities, in the proportion as the population of each municipality bears to the aggregate population of all municipalities within the state. Present law provides several alternative provisions to this allocation for certain municipalities and circumstances;<br /> (4) 0.3674 percent, or so much thereof as may be required, to the department of revenue in addition to its regular appropriation to be expended by it in the administration and enforcement of the sales and use tax laws; and<br /> (5) 0.9185 percent to the sinking fund account to be used by the state funding board for the payment of principal and interest becoming due on state bonds issued by the state.<br /> <br /> Under this bill, a county with an LEA with an average daily membership (ADM) growth of 250 students per year, for each of the five school years during the period of the 2014-2015 school year through the 2018-2019 school year, may elect to be a "Tennessee rapid growth school district." A municipality that has an LEA that meets such ADM growth criteria may also elect to be a "Tennessee rapid growth school district." As an alternative to and in lieu of the allocation prescribed above in (3), a Tennessee rapid growth school system district will receive 2 percent of the tax actually collected and remitted by dealers within the boundaries of such district. The total annual amount distributed to each district will be capped at $7 million. Any distribution made to a Tennessee rapid growth school district pursuant to such election will be earmarked and paid from the general fund. If, however, any such payment is made to a Tennessee rapid growth school district pursuant to the election, the amount that would have been received by such district had the district not exercised the election will be earmarked and allocated to the general fund.<br /> <br /> An eligible county or municipality may elect Tennessee rapid growth school district status by adopting a resolution or ordinance approved by a two-thirds vote of the legislative body of the jurisdiction. Its approval or nonapproval must be proclaimed by the presiding officer of the jurisdiction. Within 30 days of adopting such resolution or ordinance, the presiding officer of the jurisdiction must send a certified copy of the ordinance or resolution to the secretary of state and the commissioner of revenue. Tennessee rapid growth school system district status may be elected by both a county and a municipality within the county if both the county and municipal school systems meet the ADM growth criteria. If both the county and municipal legislative bodies adopt the status, then any additional state-shared revenue required to be distributed to the county and municipality under this bill will be prorated between the county and municipality based on the ADA sharing formula for local option sales tax for education purposes.<br /> <br /> Of the revenue retained pursuant to an election under this bill, less the amount that would have been received by such district had the district not exercised the election, 100 percent must be used exclusively for either public school related debt service or public school related capital improvements.<br /> <br /> Prior to adoption of Tennessee rapid growth school system district status, a county or municipality, or both, as applicable, must have a formal multiyear school capital improvement plan adopted by its legislative body specifying the manner by which any additional state-shared revenue is to be incorporated into the funding of the capital improvement plan.<br /> <br />