(a) Transfers of Realty.

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Terms Used In Tennessee Code 67-4-409

  • Affiliate: means any entity:
    (i) In which the taxpayer, directly or indirectly, has more than fifty percent (50%) ownership interest. See Tennessee Code 67-4-2004
  • Agriculture: means :
    (i) The land, buildings and machinery used in the commercial production of farm products and nursery stock. See Tennessee Code 1-3-105
  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Code: includes the Tennessee Code and all amendments and revisions to the code and all additions and supplements to the code. See Tennessee Code 1-3-105
  • Commissioner: means the commissioner of revenue. See Tennessee Code 67-4-2004
  • Compensation: means wages, salaries, commissions and any other form of remuneration paid to employees for personal services. See Tennessee Code 67-4-2004
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Department: means the department of revenue. See Tennessee Code 67-4-2004
  • Devise: To gift property by will.
  • Dismissal: The dropping of a case by the judge without further consideration or hearing. Source:
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • Grantor: The person who establishes a trust and places property into it.
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Lands: includes lands, tenements and hereditaments, and all rights thereto and interests therein, equitable as well as legal. See Tennessee Code 1-3-105
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Life estate: A property interest limited in duration to the life of the individual holding the interest (life tenant).
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
  • Not-for-profit: means any person described in §. See Tennessee Code 67-4-2004
  • Oath: A promise to tell the truth.
  • Oath: includes affirmation. See Tennessee Code 1-3-105
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Personal property: All property that is not real property.
  • Personal property: includes money, goods, chattels, things in action, and evidences of debt. See Tennessee Code 1-3-105
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • real property: include lands, tenements and hereditaments, and all rights thereto and interests therein, equitable as well as legal. See Tennessee Code 1-3-105
  • Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form. See Tennessee Code 1-3-105
  • Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
  • Right of survivorship: The ownership rights that result in the acquisition of title to property by reason of having survived other co-owners.
  • Road: includes public bridges and may be held equivalent to the words "county way" "county road" or "state road". See Tennessee Code 1-3-105
  • Sales: means all gross receipts of the taxpayer not allocated under this part. See Tennessee Code 67-4-2004
  • Securities: means United States treasury securities, obligations of United States government agencies and corporations, obligations of state and political subdivisions, corporate stock and other securities, participations in securities backed by mortgages held by the United States or state government agencies, loan-backed securities and similar investments. See Tennessee Code 67-4-2004
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision thereof. See Tennessee Code 67-4-2004
  • taxpayer: means every corporation, subchapter S corporation, limited liability company, professional limited liability company, registered limited liability partnership, professional registered limited liability partnership, limited partnership, cooperative, joint-stock association, business trust, regulated investment company, REIT, state-chartered or national bank, or state-chartered or federally chartered savings and loan association. See Tennessee Code 67-4-2004
  • Tenancy by the entirety: A type of joint tenancy between husband and wife that is recognized in some States. Neither party can sever the joint tenancy relationship; when a spouse dies, the survivor acquires full title to the property.
  • Trustee: A person or institution holding and administering property in trust.
  • Trustor: The person who makes or creates a trust. Also known as the grantor or settlor.
  • Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) On all transfers of realty, whether by deed, court deed, decree, partition deed, or other instrument evidencing transfer of any interest in real estate, there shall be paid for the privilege of having the same recorded a tax, for state purposes only, of thirty-seven cents (37¢) per one hundred dollars ($100), as follows:

(A) On the transfer of a freehold estate, the tax shall be based on the consideration for the transfer, or the value of the property, whichever is greater. “Value of the property,” as used in this section, means the amount that the property transferred would command at a fair and voluntary sale, and no other value;
(B) No transfer tax shall be due or paid on the transfer of a leasehold estate;
(C) No such tax shall be levied on the transfer of any real estate where such:

(i) Is creation or dissolution of a tenancy by the entirety:

(a) By the conveyance from one (1) spouse to the other;
(b) By the conveyance from one (1) spouse or both spouses to the original grantor or grantors in the instrument and the original grantor’s spouse; or
(c) By the conveyance from one (1) spouse or both spouses to a trustee and immediate reconveyance by the trustee in the same instrument as tenants in common, tenants in common with right of survivorship, joint tenants or joint tenants with right of survivorship;
(ii) Are deeds of division in kind of realty formerly held by tenants in common;
(iii) Is release of a life estate to the beneficiaries of the remainder interest;
(iv) Are deeds executed by an executor to implement a testamentary devise;
(v) Are domestic settlement decrees and/or domestic decrees and/or deeds that are an adjustment of property rights between divorcing parties;
(vi) Are transfers by a transferor of real estate to a revocable living trust created by the same transferor or by a spouse of the transferor, or transfers by the trustee of a revocable living trust back to the same transferor or to the transferor’s spouse;
(vii) Are deeds executed by the trustee of a revocable living trust to implement a testamentary devise by the trustor of the trust; or
(viii) Are deeds executed by the trustee of a testamentary trust or revocable living trust to implement the distribution of the real property to a trust beneficiary or beneficiaries;
(D) In the case of quitclaim deeds, the tax must be based only on the actual consideration given for that conveyance. A deed is treated as a quitclaim deed for taxation purposes under this section if the deed contains language substantially similar to the form for quitclaim deeds as provided for in § 66-5-103(2), and only conveys the grantor’s interest, whatever that may be, to the grantee. A deed that contains language evidencing an intent to convey a deed in fee with general warranty substantially similar to the form provided for in § 66-5-103(1)(A) must be taxed as provided in subdivision (a)(1)(A);
(E) No oath of value shall be required in any transaction that is exempt from tax;
(F) This tax shall be paid by the grantee or transferee of the interest in real estate, as shown on the instrument evidencing the transfer of such interest; and it shall be collected by the register of the county in which the instrument is offered for recordation;

(i) The grantee, the grantee’s agent, or a trustee acting for the grantee shall be required to state under oath upon the face of the instrument offered for record in the presence of the register, or before an officer authorized to administer oaths, the actual consideration or value, whichever is greater, for the transfer of a freehold estate;
(ii) The making under oath of any false statement known to be false respecting the consideration or value of property transferred shall be punishable as perjury;
(iii) A person who obtains several deeds or other instruments of conveyance for the same transfer of one and the same tract or parcel of real estate shall pay only one (1) state tax with respect to such transfer;
(iv) The register is forbidden to record the transfer until this tax has been paid; and
(G) No tax is due under this subsection (a) until the title to the property is transferred by deed.
(2) Nothing in this subsection (a) affects the validity of the underlying transfer or conveyance.
(b)

(1)Mortgages, Deeds of Trust and Other Instruments. Prior to the public recordation of any instrument evidencing an indebtedness, including, but not limited to, mortgages, deeds of trust, conditional sales contracts, financing statements contemplated by the Uniform Commercial Code, compiled in title 47, and liens on personalty, other than on motor vehicles, there shall be paid a tax, for state purposes only, of eleven and one-half cents (11.5¢) on each one hundred dollars ($100) of the indebtedness so evidenced.
(2) The tax shall not be required for the recordation of judgment liens, contractors’ liens, subcontractors’ liens, furnishers’ liens, laborers’ liens, mechanics’ and materialmen’s liens, financing statements filed pursuant to the Uniform Commercial Code, compiled in title 47, that secure an interest solely in investment property, as defined in § 47-9-102(a), as amended by chapter 846, § 1 of the Public Acts of 2000, and mortgages or deeds of trust issued under the Home Equity Conversion Mortgage Act, as compiled in title 47, chapter 30, and that are labeled on the face under such chapter.
(3) In any case where the consideration or stipulation of indebtedness does not appear on the face of the instrument being offered for record, the recording official shall require a separate statement, to be made under oath, indicating the amount of the indebtedness so secured.
(4) This tax shall be paid to and collected by county registers, the secretary of state, and any other official who may receive any instrument other than for liens on motor vehicles in accordance with the motor vehicle title law of this state, for recordation in accordance with the laws of this state, and registration is forbidden until such tax has been paid.
(5) The incidence of the tax provided by this section is declared to be upon the mortgagor, grantor or debtor, evidenced by the instrument offered for recordation. It shall not, however, apply with respect to the first two thousand dollars ($2,000) of the indebtedness.
(6)

(A) As used in this section, “indebtedness” means the principal debt or obligation which is reasonably contemplated by the parties to be included within the terms of the agreement. “Indebtedness” does not include any amount of interest, collection expense including, but not limited to, attorney’s fees and expenses incurred in preserving, protecting, improving, or insuring property which serves as collateral for the indebtedness, or any other amount, other than the principal debt or obligation, for which a debtor becomes liable unless such amount is added to the principal debt or obligation, and is used to calculate additional interest pursuant to refinancing, reamortization, amendment or similar transaction or occurrence.
(B) If the instrument is given to secure the performance by the mortgagor, grantor, debtor or any other person of an obligation other than the payment of a specific sum of money, and a maximum amount secured is not expressed in the instrument, such instrument shall be taxable upon the value of the property covered by the instrument, which value shall be deemed to be the indebtedness secured by such instrument for such purposes. Such instrument shall not be recorded, unless, at the time of presenting the instrument, there is filed a sworn statement by the owner of the property covered thereby of the value of the property. Such amount shall be the basis of assessing the tax imposed under this subsection (b). No subsequent change in the value of the property shall result in the imposition of additional tax.
(C)

(i) Every recorded instrument evidencing an indebtedness must contain, either on the face of the instrument or in an attached sworn statement, the following language: “Maximum principal indebtedness for Tennessee recording tax purposes is $____________________.” The holder of the indebtedness shall state the amount of the indebtedness, and that amount shall be the basis of assessing the tax imposed by this subsection (b). Such statement may be relied upon only by the department of revenue and by the receiving official charged with the duty of recordation and collection of tax, and such statement shall not constitute notice of any kind to any other party of the amount of indebtedness secured by the instrument.
(ii) Notwithstanding subdivision (b)(6)(C)(i), an instrument described in subdivision (b)(6)(B) shall instead contain, either on the face of the instrument or in an attached sworn statement, the following language: “Secures obligation other than payment of specific sum – valuation statement submitted herewith.”
(iii) Notwithstanding any other law to the contrary, an official charged with the collection of the tax imposed by this subsection (b) shall not record any instrument evidencing an indebtedness, unless it contains the statement required by this subdivision (b)(6)(C) and tax is properly paid, based upon the amount contained in that statement or in the valuation statement, as appropriate.
(D) When the instrument being offered for registration, recording, or filing secures, or evidences the securing of, a line of credit or other indebtedness arising from more than one (1) advance or extension of credit, the amount of which will, or may, vary from time to time, the tax shall be computed and paid on the maximum amount of the indebtedness as stated in the instrument or the accompanying sworn statement, and the reduction or subsequent increasing of the amount of the indebtedness within such limits shall not result in additional tax.
(7) Imposition of a transfer tax as levied under subsection (a) with respect to an instrument evidencing an indebtedness shall not operate to exonerate such instrument from the tax levied under this subsection (b), if such tax would otherwise be appropriate. Furthermore, an instrument evidencing transfer of any interest in real estate that is subject to the transfer tax shall, nevertheless, be subject to the tax levied under this subsection (b) also, when such instrument evidences an indebtedness either by showing in the instrument that a vendor’s lien is retained, or by referring in the instrument to such a lien being evidenced by another instrument not being offered for public recordation.
(8)

(A)

(i) If some of the property securing the payment of the indebtedness is located in Tennessee and some is located outside of Tennessee, as an optional method of computing the tax, the tax may be apportioned and paid on the basis of the ratio of the value of the Tennessee collateral to the value of all collateral, by applying the following mathematical formula:

value of Tennessee collateral / value of total collateral = ____________________ % x

indebtedness = taxable Tennessee indebtedness

(ii) If the tax is apportioned pursuant to this subdivision (b)(8), no evidence of the calculation or statement of tax shall be required in addition to the statement required by subdivision (b)(6)(C), which shall be completed with the amount resulting from the calculation made pursuant to subdivision (b)(8)(A)(i).
(B) For purposes of the apportionment calculation allowed in subdivision (b)(8)(A)(i):

(i) “Collateral” means any real property or personal property securing the indebtedness evidenced by the instrument to be filed or recorded;
(ii) “Mobile goods” means goods that are mobile and that are of a type normally used in more than one (1) jurisdiction, such as trailers, rolling stock, airplanes, shipping containers, road building and construction machinery, commercial harvesting machinery and the like;
(iii) “Taxable Tennessee indebtedness” means the amount of indebtedness on which tax is to be calculated as provided in subdivision (b)(5), with the two-thousand-dollar exemption to be applied to the taxable Tennessee indebtedness;
(iv) “Tennessee collateral” means all collateral in which a security interest, deed of trust, mortgage lien or other consensual lien is perfected by filing or recording one or more instruments in the state of Tennessee or by other methods where the laws of the state of Tennessee govern perfection; provided, however, that the Tennessee collateral of a debtor that is located in Tennessee, as determined pursuant to § 47-9-307, does not include such debtor’s interests in:

(a) Any personal property physically located outside the state of Tennessee, including goods, other than mobile goods, and any property that is of a type in which a security interest could be perfected by possession under Tennessee law if such property were located in Tennessee, such as certificated securities, chattel paper, documents, instruments and money; or
(b) Any intangible property and mobile goods, unless such debtor’s chief executive office is also located in the state of Tennessee. Any subsequent change in the location of the debtor or any collateral, in the facts supporting the categorization of any particular collateral, or in the relative quantities or values of collateral shall not in itself result in the imposition of additional tax;
(v) “Total collateral” means all collateral, including the Tennessee collateral; and
(vi) “Value” of collateral means the value that the collateral would command at a fair and voluntary sale.
(9) In the event of an increase in the indebtedness beyond the amount stated subsequent to the filing or recordation of the instrument, the holder of the indebtedness shall pay the tax on the amount of the increase. Such a payment shall be due on the date the increase occurs, but may be made without penalty if made within sixty (60) days after the increase occurs. Thereafter, such payment may be made only upon payment of the penalty provided in subdivision (b)(13) based on the amount of the increase in the indebtedness.
(10) Sections 67-4-206 and 67-4-217 shall not apply to the tax imposed by this subsection (b).
(11)

(A) Nonpayment or underpayment of tax on an indebtedness, or failure timely to pay tax on an increase in indebtedness, shall not affect or impair the effectiveness, validity, priority, or enforceability of the security interest or lien created or evidenced by the instrument, it being declared the legislative intent that the effectiveness, validity, priority, and enforceability of security interest and liens are governed solely by law applicable to security interests and liens, and not by this title.
(B) Such nonpayment, underpayment, or failure to pay, until cured, shall result in the imposition of a tax lien, in the amount of any tax and penalties unpaid and owing under this subsection (b), in favor of the department of revenue as described in subdivision (b)(12), shall subject the holder of the indebtedness to a penalty as described in subdivision (b)(13), and shall subject the holder of the indebtedness to the disability described in subdivision (b)(14).
(12) The tax lien described in subdivision (b)(11) shall arise at the time the tax is due and shall at that time attach to any property, either real or personal, tangible or intangible, subject to the instrument until:

(A) The lien or security interest of the instrument is released with respect to any property; or
(B) Any property is transferred in settlement or realization of the lien or security interest, whereupon the tax lien shall automatically be released from such property and attach to any proceeds thereof. The department may not levy upon or sell any property subject to the tax lien until notice of the tax lien has been recorded pursuant to § 67-1-1403, but notwithstanding such section, the department otherwise shall not be required to record any notice of the tax lien. The tax lien shall be superior to all liens and security interest under Tennessee law, except:

(i) Those enumerated in § 67-1-1403(c)(2)-(4) that were recorded, filed or perfected, respectively, prior to attachment of the tax lien; and
(ii) County and municipal ad valorem taxes.
(13) It is the duty of every holder of an indebtedness, including an individual, business entity of any organizational structure, or governmental entity, to collect the tax imposed by this subsection (b) from the debtor and to remit the tax as required by this subsection (b). Except as provided in subdivision (b)(9), if the holder of the indebtedness fails to pay or underpays the tax imposed by this subsection (b), the holder of the indebtedness shall be liable for a penalty, in addition to the tax, in the amount of two hundred fifty dollars ($250) or double the unpaid tax due, whichever is greater.
(14) The holder of an indebtedness evidenced or secured by an instrument upon the recording or filing of which tax is owing under this section may not maintain an action on such indebtedness, other than an action limited to the enforcement of the holder’s security interest or lien, against the debtor until such nonpayment is cured. If such an action is commenced and a cure is not effected within a time limit set by the court, the debtor may obtain a dismissal of such action, without prejudice to refiling in the event of a subsequent cure of nonpayment. Notwithstanding the terms of the instrument, if a cure is not effected until after the filing of a motion or pleading in which the holder’s noncompliance with this subsection (b) is raised, the holder may not thereafter charge the debtor with the costs of curing such noncompliance.
(c) Any oath required in subsections (a) and (b) shall not be introduced as evidence in any proceeding conducted in connection with any condemnation action for the purpose of indicating the value of such real property.
(d) Reports and Payment of Tax to the Commissioner.

(1) The county register and other officials charged with the collection of taxes imposed under this section shall report all collections to the department on forms prescribed by the commissioner, in the same manner and under the same conditions as county clerks collect and report revenue under parts 2-6 of this chapter.
(2)

(A) For collecting and reporting taxes levied under this section, county registers shall be entitled to retain as commission five percent (5%) of the taxes so collected.
(B) Notwithstanding subdivision (d)(2)(A) or any other law to the contrary, fifty-two percent (52%) of the five percent (5%) commission provided by subdivision (d)(2)(A) shall be remitted to the state treasurer and credited to the general fund of the state.
(3) The county registers shall also be entitled to receive as a fee for issuing each receipt for taxes imposed in this section the sum of one dollar ($1.00), to be paid when the tax receipt is issued. The fee, however, shall not be applicable nor collectible by any state officials charged with the collection of taxes imposed under this section.
(e) Instruments made pursuant to mergers, consolidations, sales or transfers of substantially all of the assets in this state of corporations, pursuant to plans of reorganization, are exempt from this section.
(f)

(1) The recording and rerecording of all transfers of realty in which a municipality is the grantee or transferee and all instruments evidencing an indebtedness in which a municipality is the holder or owner of the indebtedness shall be exempt from this section. The recording and rerecording of all instruments evidencing an indebtedness of any health and educational facility corporation formed pursuant to title 48, chapter 101, part 3 shall also be exempt from this section.
(2) For the purposes of this subsection (f), “municipality” means the state of Tennessee or any county or incorporated city or town, utility district, school district, power district, sanitary district, or other municipal, quasi-municipal, or governmental body or political subdivision in this state, and any agency, authority, branch, bureau, commission, corporation, department or instrumentality thereof now or later authorized to be created.
(3) The recording or rerecording of any transfer of realty to or from any municipality and any evidence of indebtedness of or to any municipality, as defined in subsection (a), prior to May 11, 1971, and otherwise validly made, is declared to be valid and effective, notwithstanding any failure to pay the tax formerly imposed by this section, and any such recording or rerecording is ratified, approved and confirmed, and no tax shall be imposed or collected on account of any such recording or rerecording.
(g) Wetland Acquisition Fund.

(1) Three and one-fourth cents (3.25¢) of the tax levied by subsection (a) shall be credited to a special agency account in the state general fund known as the 1986 wetland acquisition fund; provided, that such funds shall not be obligated or expended to acquire any interest in real property through condemnation or the power of eminent domain. Expenditures from such fund shall only be made to implement and effectuate the purposes of title 11, chapter 14, part 4. The fund may be expended to maintain and enhance state-owned property that is under the agency’s jurisdiction. Funds deposited in such fund shall not revert at the end of any fiscal year, and all interest accruing on investments and deposits of the fund not otherwise expended shall be returned to and made a part of the fund.
(2) Notwithstanding any provision of this section to the contrary, the commissioner of finance and administration, with the written approval of the executive director of the Tennessee wildlife resources agency, is authorized, subject to legislative appropriation, to transfer funds from the 1986 wetland acquisition fund to the Tennessee heritage conservation trust fund, created in title 11, chapter 7, part 1. For the purposes of § 11-7-103(h), “other available sources” also shall not include any funds transferred to the Tennessee heritage conservation trust fund from the 1986 wetland acquisition fund pursuant to this subdivision (g)(2).
(h) Exception for Certain Facilities.

(1) With respect to any facility as defined in subdivision (h)(2)(A):

(A) The taxes paid under subsection (a) shall not exceed one hundred thousand dollars ($100,000) in the aggregate; and
(B) The taxes paid under subsection (b) shall not exceed five hundred thousand dollars ($500,000) in the aggregate.
(2)

(A) As used in this subsection (h), “facility” means any real or personal property that is constructed, acquired or developed for the principal purpose of manufacturing, processing, fabricating or assembling any manufactured products and includes, but is not limited to, all or any part of or any interest in any land and building, including office, administration or other buildings, any improvement to the facilities and all real and personal properties, including, but is not limited to, equipment and machinery deemed necessary in connection with the facility, whether or not now in existence.
(B) As used in this subsection (h), “related indebtedness” means indebtedness relating to or incurred to finance a portion of or otherwise in connection with a facility, which shall be evidenced by instruments, including, but not limited to, mortgages, deeds of trust, conditional sales contracts, financing statements contemplated by the Uniform Commercial Code, compiled in title 47, and liens on personalty, notwithstanding the fact that portions of such indebtedness may be held by different holders, owners, trustees or other secured parties (holders) of indebtedness or portions of indebtedness relating to the facility.
(3) In order to qualify for the exception provided under this subsection (h), prior to the public recordation of any instrument evidencing a transfer of an interest in realty or of any instrument evidencing a related indebtedness under this section, the grantee or transferee of the interest in such realty or the holder of related indebtedness must submit a sworn statement declaring the amount of tax paid for recording instruments by or on behalf of the person, corporation, or other entity that owns, leases or otherwise operates the facility, referred to in this subsection (h) as the taxpayer, under both subsection (a), with respect to the transfer of realty pertaining to the facility, and subsection (b), with respect to related indebtedness, and a copy of each receipt for the taxes paid for recording such instruments or other evidence of such payments. No tax will be due, if the taxes paid by or on behalf of the taxpayer for recording such instruments pursuant to subsections (a) and (b) relating to the facility and any related indebtedness equal an aggregate amount of one hundred thousand dollars ($100,000) or five hundred thousand dollars ($500,000), as the case may be. If less than the aggregate amount of one hundred thousand dollars ($100,000) or five hundred thousand dollars ($500,000), as the case may be, in taxes for recording instruments pursuant to subsections (a) and (b) relating to the facility and any related indebtedness has been paid by or on behalf of the taxpayer prior to the proposed recordation of any instrument evidencing a transfer of an interest in realty or related indebtedness, the grantee or transferee of an interest in such realty or the holder of related indebtedness must pay or cause to be paid the amount of tax due, calculated in accordance with this section, which amount shall be no more than the difference between one hundred thousand dollars ($100,000) or five hundred thousand dollars ($500,000), and the aggregate amount of such taxes paid by or on behalf of the taxpayer for recording instruments pertaining to the facility and any related indebtedness pursuant to subsections (a) and (b). In no event, however, shall the aggregate amount of taxes paid for recording instruments relating to transfers of an interest in realty under subsection (a) and related indebtedness under subsection (b) exceed one hundred thousand dollars ($100,000) or five hundred thousand dollars ($500,000) by or on behalf of the taxpayer.
(i) Local Parks Land Acquisition Fund.

(1) One and three-fourths cents (1.75¢) of the tax levied by subsection (a) shall be credited to a special agency account in the state general fund known as the local parks land acquisition fund. The moneys in this fund shall be used only for grants to county and municipal governments to implement and carry out the purposes set forth in subdivision (i)(3); provided, that the commissioner of environment and conservation may allocate not more than three and one-half percent (3.5%) of the moneys in this fund for the administration of the fund. Funds deposited in such fund shall not revert at the end of any fiscal year, and all interest accruing on investments and deposits of the fund not otherwise expended shall be returned to and made a part of the fund.
(2)

(A) The commissioner of environment and conservation, the commissioner of agriculture and the director of the wildlife resources agency shall jointly establish priorities for the appropriate allocation of funds, deposited in the local parks land acquisition fund. No project shall receive any such funds unless each such official has approved such expenditure. Such officials shall consider applications from county and municipal governments throughout the state.
(B) At least sixty percent (60%) of the funds allocated annually shall go to municipal governments.
(3) County and municipal governments may use the funds allocated under this section for the purchase of land for parks, natural areas, greenways, and for the purchase of land for recreation facilities. Such funds may also be used for trail development and capital projects in parks, natural areas, and greenways.
(4)

(A) Any county or municipal government that receives a grant under this section must match the grant with an equal amount of money for each project. The matching money provided by the local government may be used to purchase additional land or to develop facilities on the land that is purchased with the grant. Rather than providing matching money, the local government may provide as its match a tract of land not previously used for park or recreational purposes that will be dedicated entirely for park or recreational purposes after receipt of the grant and that is independently appraised as having the same, or greater, value as the amount of the state grant.
(B) Rather than providing matching money, the local government may also provide as all or part of its match volunteer services, materials, and equipment that are donated to the local government by a third party at the time the state grant is made, that are used for trail construction or other development on the tract of land for which the state grant is sought, and that are valued in a manner specified by the department.
(5) If an application from a county or municipal government has been submitted for a grant from the local parks land acquisition fund and the county or municipal government subsequently purchases the land or constructs the trail for which the grant was sought before the grant is acted upon, the grant may still be awarded as a reimbursement; provided, that the application was submitted by the local government no more than twelve (12) months prior to the award of the grant.
(6) The commissioner of environment and conservation, the commissioner of agriculture and the director of the wildlife resources agency may promulgate regulations to implement this subsection (i).
(7) No funds deposited in the local parks land acquisition fund from the tax levied by subsection (a) shall be obligated or expended to acquire any interest in real property through condemnation or the power of eminent domain.
(j)State Lands Acquisition Fund.

(1) One and one-half cents (1.5¢) of the tax levied by subsection (a) shall be credited to a special agency account in the state general fund known as the state lands acquisition fund. Expenditures from such fund shall be made only to implement and carry out the purposes set forth in subdivision (j)(2). Funds deposited in such fund shall not revert at the end of any fiscal year, and all interest accruing on investments and deposits of the fund not otherwise expended shall be returned to and made a part of the fund.
(2)

(A) The commissioner of environment and conservation shall expend the funds which are deposited in the state lands acquisition fund only for the acquisition of land for any area designated as an historic place as evidenced by its inclusion on the National Register of Historic Places, state historic areas or sites, state parks, state forests, state natural areas, boundary areas along state scenic rivers, the state trails system, and for the acquisition of easements to protect any of the foregoing state areas. Such funds may also be used for trail development in the foregoing areas. Such funds may also be used for the redevelopment, renovation and restoration of historic theaters owned by a governmental entity or a not-for-profit corporation or its controlled affiliate and listed on the National Register of Historic Places. Such funds may also be used for capital projects, including improvements and maintenance, at state parks.
(B) No funds deposited in the state lands acquisition fund from the tax levied by subsection (a) shall be obligated or expended to acquire any interest in real property through condemnation or the power of eminent domain.
(3) The first three hundred thousand dollars ($300,000) deposited in the state lands acquisition fund shall be transferred and credited to the compensation fund created under § 11-14-406. Following the procedure set forth in that section, the commissioner of finance and administration shall annually reimburse each city and county the amount of lost property tax revenue resulting from any purchase of land by the department of environment and conservation which renders such land tax exempt. The next two hundred fifty thousand dollars ($250,000) deposited in the state lands acquisition fund in each fiscal year shall be transferred and credited to the Tennessee Civil War or War Between the States site preservation fund created under § 4-11-112. Funds allocated to the preservation fund shall be used exclusively as provided in § 4-11-112.
(4) The commissioner of environment and conservation, the commissioner of agriculture and the director of the wildlife resources agency shall jointly establish priorities for the appropriate allocation of funds deposited in the state lands acquisition fund. No project shall receive any such funds unless each such official has approved such expenditure. The commissioner of environment and conservation, the commissioner of agriculture and the director of the wildlife resources agency may promulgate regulations to implement this subsection (j).
(5) Acquisition pursuant to this subsection (j) of property classified under chapter 5, part 10 of this title, shall not constitute a change in the use of the property, and no rollback taxes shall become due solely as a result of such acquisition.
(6) Notwithstanding any provision of this section to the contrary, the commissioner of finance and administration, with the written approval of the commissioner of environment and conservation, is authorized, subject to legislative appropriation, to transfer funds from the state lands acquisition fund to the Tennessee heritage conservation trust fund, created in title 11, chapter 7, part 1. For the purposes of § 11-7-103(h), “other available sources” also shall not include any funds transferred to the Tennessee heritage conservation trust fund from the state lands acquisition fund pursuant to this subdivision (j)(6).
(k)Revenue Stream. The moneys deposited in the 1986 wetlands acquisition fund and the moneys deposited in the state lands acquisition fund may be used as the revenue stream to pay the principal of and interest on revenue bonds that are sold by the state of Tennessee to generate funds to fulfill the purposes for which the moneys deposited in each of these funds may be used.
(l)Agricultural Resources Conservation Fund.

(1) One and one-half cents (1.5¢) of the tax levied by subsection (a) shall be credited to a special agency account in the state general fund known as the agricultural resources conservation fund. Expenditures from such fund shall be made only to implement and carry out the purposes set forth in subdivision (l)(2). Funds deposited in such fund shall not revert at the end of any fiscal year, and all interest accruing on investments and deposits of the funds not otherwise expended shall be returned to and made a part of the fund.
(2) The commissioner of agriculture shall expend the funds that are deposited in the agricultural resources fund for purposes of landowner assistance, to address point and nonpoint source water quality issues, as well as nuisance problems, including, but not limited to, odor, noise, dust and similar concerns. The commissioner of environment and conservation, commissioner of agriculture and the director of the wildlife resources agency shall jointly establish priorities for the appropriate allocation of funds deposited in the agricultural resources conservation fund. No project shall receive any such funds unless each such official has approved such expenditure. The commissioner of agriculture may promulgate regulations to implement this subsection (l).
(3) Expenditures from the agricultural resources conservation fund shall be made for the promotion and implementation of agricultural management practices that conserve and protect natural resources associated with agricultural production, including, but not limited to, soil, water, air, plants and animals. The commissioner of agriculture may spend up to five percent (5%) of the annual appropriations from this fund on education of landowners, producers and managers concerning conservation and protection practices. No more than ten percent (10%) of the annual appropriation from this fund may be used for management costs associated with technical assistance to accomplish the purposes of the fund and/or the administration of the fund. It is the intent of the general assembly that the highest priority of the agricultural resources conservation fund is to abate and prevent nonpoint source water pollution that may be associated with agricultural production; therefore, the commissioner of agriculture may spend no more than fifteen percent (15%) of the annual appropriations from the fund for the combined purposes of preventing or remedying air, noise, dust, and odor pollution, or similar nuisance type environmental problems associated with agricultural production. The commissioner of agriculture may expend agricultural resources conservation funds as matching dollars to secure additional funding to fulfill the purposes for which the fund was established.
(4) The commissioner of agriculture shall seek advice from the commissioner of environment and conservation in determining the most effective ways to abate nonpoint pollution from agricultural activities.
(m)Transfers to Other Funds. Beginning in fiscal year 2015-2016 and in each subsequent fiscal year, fifty percent (50%) of the total growth in collections of the tax levied by subsection (a) over the previous fiscal year and deposited to the funds enumerated in subsections (g), (i), (j), and (l) shall be transferred and credited as follows:

(1) Sixty-four percent (64%) of the growth funds shall be transferred and credited to the Tennessee Civil War or War Between the States site preservation fund created by § 4-11-112, to be used exclusively as provided in § 4-11-112; and
(2) Thirty-six percent (36%) of the growth funds shall be transferred and credited to historic property land acquisition fund created by § 4-11-113, to be used exclusively as provided in § 4-11-113.
(n)Reports of Expenditures.

(1)

(A) By February 1 of every odd-numbered year, the commissioner of environment and conservation shall file with the energy, agriculture and natural resources committee of the senate and the agriculture and natural resources committee of the house of representatives a report detailing expenditures made from the state lands acquisition fund and grants made to local governments from the local parks land acquisition fund.
(B) By February 1 of every odd-numbered year, the fish and wildlife commission shall file with the energy, agriculture and natural resources committee of the senate and the agriculture and natural resources committee of the house of representatives a report detailing expenditures made from the wetlands acquisition fund.
(C) By February 1 of every odd-numbered year, the commissioner of agriculture shall file with the energy, agriculture and natural resources committee of the senate and the agriculture and natural resources committee of the house of representatives a report detailing expenditures made from the agricultural resources conservation fund.
(2)

(A) Once every five (5) years, beginning in 1996, the commissioner of environment and conservation and the fish and wildlife commission shall reevaluate their land acquisition goals and priorities and shall incorporate their findings and conclusions into a written plan. This plan shall be submitted to the energy, agriculture and natural resources committee of the senate and the agriculture and natural resources committee of the house of representatives, which shall conduct public hearings on the plan.
(B) Once every five (5) years, beginning in 2002, the commissioner of agriculture shall reevaluate the progress and accomplishments of the agricultural resources conservation fund and shall incorporate the conclusions and recommendations of such reevaluation into a written plan. This plan shall be submitted to the energy, agriculture and natural resources committee of the senate and the agriculture and natural resources committee of the house of representatives, which shall hold public hearings on the plan.
(o)Management Policies. The commissioner of environment and conservation and the fish and wildlife commission shall establish policies for the management of land acquired with funds from the state lands acquisition fund and the wetlands acquisition fund, which policies shall be designed to foster a good relationship with nearby private landowners and to prevent adverse impacts on adjoining property. These policies shall be publicized to nearby private landowners.
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