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2006 Legislative Summaries

The following are brief summaries of the 2006 legislative changes to statutes administered by or affecting the Tennessee Department of Revenue. The language used is not quoted from the law and should not be used as a substitute for the formal text. For a complete copy of a particular public chapter, please visit the Secretary of State's Web site at www.state.tn.us/sos. For upcoming notices and other information regarding these changes, please visit the department's Web site at www.Tennessee.gov/revenue.

These summaries are organized by subject matter. Some public chapters cover more than one subject and, therefore, appear in more than one section of the summary. Only the portions of a public chapter that are relevant to a particular section of the summary are included in that section.

Franchise and Excise Taxes

Hall Income Tax

Sales and Use Tax

Business Tax

Miscellaneous Tax

State Shared Taxes

Consumption of Alcoholic Beverages

Title and Registration

 

Industrial Machinery Credit
Public Chapter 602, Section 1, revises Tennessee's economic development tax incentives by providing tiered levels of industrial machinery credit based on the level of Tennessee investment. The act establishes tiered criteria and benefits for the credit. If the taxpayer makes a required capital investment in excess of one billion dollars ($1,000,000,000) during the investment period, the credit allowed equals ten percent (10%) of the purchase price of industrial machinery located in Tennessee and purchased in the process of making the required capital investment. If the taxpayer makes a required capital investment in excess of five hundred million dollars ($500,000,000) during the investment period, the credit allowed equals seven percent (7%). If the taxpayer makes a required capital investment in excess of two hundred fifty million dollars ($250,000,000) during the investment period, the credit allowed equals five percent (5%). If the taxpayer makes a capital investment in excess of one hundred million dollars ($100,000,000) during the investment period, the credit allowed equals three percent (3%). The investment period cannot to exceed three (3) years from the filing of the business plan related to the required capital investment, during which the required capital investment must be made. The three-year period for making the required capital investment may be extended by the commissioner of economic and community development for a reasonable period, not to exceed two (2) years, for good cause shown.

Effective date: Tax periods beginning on or after January 1, 2006.
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Job Tax Credit
Public Chapter 1019 modifies the job tax credit by establishing tiered criteria and benefits. A taxpayer that makes a capital investment in excess of $500 million and that creates at least 500 net new industrial wage jobs during the investment period is allowed a credit of $5,000 per job per year for a period of twelve years. An "industrial wage job" is defined as a full-time employee job with wages equal to or greater than Tennessee's average industrial wage for the month of January of the year during which the job was created. A taxpayer that makes a capital investment in excess of $250 million and that creates at least 250 net new industrial wage jobs during the investment period is allowed a credit of $5,000 per job per year for a period of six years. A taxpayer that makes a capital investment in excess of $100 million and that creates at least 100 net new industrial wage jobs during the investment period is allowed a credit of $5,000 per job per year for a period of three years.

Effective date: Tax periods beginning on or after January 1, 2006.

Public Chapter 1019 allows a taxpayer that has established its international, national or regional headquarters in Tennessee, or a taxpayer that has established an international, national or regional warehousing or distribution hub in Tennessee, to offset up to 100 percent of its franchise and/or excise tax liability by its job tax credits earned and not expended as of June 1, 2006, or by any carryforward of such credits. The increased amount of credit available for offset must be determined by the commissioner of revenue and the commissioner of economic and community development to be in the best interests of the state.

Effective date: Tax periods beginning on or after January 1, 2006. Top

 

Job Tax Credit; Federally Designated Empowerment Zone
Public Chapter 779 amends Tenn. Code Ann. Section 67-4-2109(c) to provide that a job tax credit of $4,500 for each net new full-time employee job shall be allowed if the qualified business enterprise is located in a federally designated empowerment zone, invests a minimum of $20 million, and creates a minimum of 1,000 new jobs.

Effective date: May 24, 2006.
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Conversion of Net Operating Loss to Franchise Tax Credit
Public Chapter 1019 allows a taxpayer that has established its international, national or regional headquarters in Tennessee, or a taxpayer that has established an international, national or regional warehousing or distribution hub in Tennessee, to convert unused net operating losses to a credit against its franchise tax liability. The credit is available only if the taxpayer is unable to use the net operating loss or loss carryover to offset net income during the current tax year. If a net operating loss is converted to a credit against the franchise tax, it is no longer available as a deduction for excise tax purposes. The credit is available only if it is determined by the commissioner of revenue and the commissioner of economic and community development to be in the best interests of the state.

Effective date: June 27, 2006.
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Net Operating Loss Carryforward Limitation
Public Chapter 1019 removes the 15-year limitation on the carryforward of net operating losses for a taxpayer that qualifies for the job tax credit in connection with a capital investment in excess of $1 billion. The removal of the limitation is permitted only if it is determined by the commissioner of revenue and the commissioner of economic and community development to be in the best interests of the state.

Effective date: Tax periods ending on or after December 31, 2006.
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Qualified Production Company Refund
Public Chapter 1019 entitles a qualified production company that incurs at least $1 million in qualified expenses to a refund equal to 15 percent of its qualified expenses, provided that the company has established a headquarters facility in Tennessee. If the qualified production company does not have a headquarters facility in Tennessee, then any qualified investor that has a headquarters facility in Tennessee is allowed a refund equal to the amount to which the qualified production company would have been entitled, multiplied by the qualified investor's percentage ownership in the company. "Qualified expenses" are expenses incurred in Tennessee that are determined to be necessary for the production of a movie in Tennessee.

Effective date: Tax periods ending on or after December 31, 2006.
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Entities Owned by Real Estate Investment Trusts; Franchise Tax
Public Chapter 1019 removes the franchise tax exemption for an entity that is treated as a partnership for federal income tax purposes and that is wholly owned, directly or indirectly, by a real estate investment trust. Public Chapter 1019 extends the minimum franchise tax measure based on the actual value of real or tangible property owned or used in Tennessee to an entity treated as a partnership for federal tax purposes and in which a real estate investment trust directly or indirectly owns a majority interest.

Effective date: June 27, 2006.
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Entities Owned by Publicly Traded Real Estate Investment Trusts; Excise Tax
Public Chapter 1019 eliminates the provisions relating to the computation of the net earnings or net loss of pass-through entity that is directly or indirectly owned by a real estate investment trust. Public Chapter 1019 exempts from the excise tax an entity treated as a partnership for federal tax purposes that directly or indirectly distributes 100 percent of its net earnings or net losses to a publicly traded real estate investment trust. A "publicly traded real estate investment trust" is defined as an entity that has an election in effect under Section 856 of the Internal Revenue Code, and that files with the Securities and Exchange Commission and whose shares are traded on a national stock exchange. For an entity that does not directly or indirectly distribute 100 percent of its net earnings or net losses to a publicly traded real estate investment trust, the entity is exempt only to the extent of the distribution to the publicly traded real estate investment trust.

Effective date: June 27, 2006.
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Allocation and Apportionment; Excise Tax
Public Chapter 1019 provides that a taxpayer may apportion its net earnings or net losses if it has business activities that are taxable both inside and outside Tennessee. A taxpayer is considered taxable in another state only if the taxpayer is conducting activities in that state that, if conducted in Tennessee, would constitute doing business in Tennessee and would subject the taxpayer to the franchise or excise tax.

Effective date: Tax periods beginning on or after January 1, 2006.
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Allocation and Apportionment; Franchise Tax
Public Chapter 1019 provides that a taxpayer may apportion its net worth if it has business activities that are taxable both inside and outside Tennessee. A taxpayer is considered taxable in another state only if the taxpayer is conducting activities in that state that, if conducted in Tennessee, would constitute doing business in Tennessee and would subject the taxpayer to the franchise or excise tax.

Effective date: Tax periods beginning on or after January 1, 2006.
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Financial Institutions; Affordable Housing Credit
Public Chapter 1019 modifies the franchise and excise tax credit available to financial institutions for low-rate loans made to non-profit entities that provide affordable housing. The credit may be calculated based either on 5 percent of the original amount of the loan or 3 percent of the unpaid balance at the end of each year for 15 years.

Effective date: June 27, 2006.
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Financial Institutions; Community Development Credit
Public Chapter 1019 modifies the franchise and excise tax credit available to financial institutions for low-rate loans made to community development financial institutions. The credit may be calculated based either on 5 percent of the original amount of the loan or 3 percent of the unpaid balance at the end of each year for 15 years.

Effective date: June 27, 2006.
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Venture Capital Funds
Public Chapter 1019 amends the exemption provided to venture capital funds to clarify that the capital of the fund may be derived from investments by one or more affiliates, if such affiliates also qualify as venture capital funds.

Effective date: Tax periods beginning on or after January 1, 2006.
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Charitable Donations Deduction
Public Chapter 1019 eliminates the excise tax deduction for a charitable donation to an association or organization that is exempt from federal income taxation under Section 501(c)(6) of the Internal Revenue Code and that uses the donation to purchase goods for which sales or use tax has been paid.

Effective date: June 27, 2006.
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Headquarters Relocation Expense Credit
Public Chapter 1019 is amended to clarify that if the headquarters staff employee position does not remain filled in Tennessee for a period of at least five years, beginning from the date such employee position was initially filled in Tennessee, the taxpayer shall be subject to an assessment of the total amount of credit or refund taken relating to such employee position, plus interest.

Effective date: Tax periods beginning on or after January 1, 2006.
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Definition of "Affiliate"
Public Chapter 1019 corrects a subsection reference in the definition of "affiliate."

Effective date: June 27, 2006.
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Definition of "Affiliated Group"
Public Chapter 1019 makes a grammatical correction to the definition of "affiliated group."

Effective date: June 27, 2006.
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Gain From Sale of Asset
Public Chapter 1019 corrects a subsection reference in Tenn. Code Ann. Section 67-4-2007(f)(1)(C).

Effective date: June 27, 2006.
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Nonprofit Limited Liability Company
Public Chapter 620 clarifies that a nonprofit limited liability company that is wholly-owned by a nonprofit corporation will be disregarded as an entity separate from its parent for purposes of all state and local taxes, including franchise and excise tax.

Effective date: May 5, 2006.
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Publicly Traded Real Estate Investment Trusts
Public Chapter 1019 creates an exemption for the income from stock in any publicly traded real estate investment trust.

Effective date: June 27, 2006.
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Health Savings Account Exemption
Public Chapter 873 exempts from Hall income taxation funds withdrawn for medical purposes from a health savings account created by this public chapter. Funds withdrawn for non-medical purposes are not exempt from the Hall income tax. Whether such funds are subject to the Hall income tax must be evaluated under the Hall income tax provisions.

Effective date: June 5, 2006.
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Sales Tax on Accommodations Provided to Transients
Public Chapter 1019 clarifies the definition of "retail sale," "sale at retail" and "retail sales price" in regards to the sale, lease or rental of accommodations provided to transients. Charges for the use of or the value of any time-share estate and any charges for the use of or the value of the use of a perpetual interest in specified entities whose substantial purpose is the ownership or control of real property shall be excluded from the definition of "retail sale," "sale at retail" and "retail sales price." A corresponding definition of "time-share estate" was added to Tenn. Code Ann.
Section 67-6-102 and is consistent with the Tennessee Time Share Act of 1981.

Effective date: June 27, 2006.
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Industrial Machinery
Public Chapter 1019 expands the industrial machinery exemption to include natural gas used to generate heat for the production of aluminum sheet foil.

Effective date: June 27, 2006.
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Qualified Headquarters Facility Credit
Public Chapter 1019 clarifies that furniture and fixtures may be included in the calculation of "Minimum investment" and may also be included under the definition of the "Qualified tangible personal property" for purposes of qualifying for the qualified headquarters facility credit.

Effective date: June 27, 2006.
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Exemption for Vehicles Sold to Military Personnel
Public Chapter 1019 clarifies the exemption from sales tax on the sale of a vehicle to an individual called into active military service for the United States from the reserves or National Guard that is stationed outside the United States during hostilities and is entitled to receive combat compensation as determined the United States department of defense. The exemption from the sales tax will commence from the effective date of the official military orders assigning such individual to the combat zone and will expire within sixty (60) days after the effective date the individual receives military orders releasing him or her from the combat zone.

Effective date: June 27, 2006.
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Computer Software
Public Chapter 1019 adds a new statute to the Retailers Sales Tax Act which exempts from the sales and use tax the use of computer software that is developed or fabricated by an affiliated company, or the repair of computer software if the repair is performed by an affiliated company. For these purposes the term affiliated company requires 100% ownership between the two companies or a 100% ownership by a common parent.

Effective date: June 27, 2006.
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Transaction Accommodation Fees
Public Chapter 1019 deletes the requirement that a sales tax credit on a "transaction accommodation fee" will only be available if it is separately stated on the invoice. All records documenting such transaction accommodation fee, however, must be maintained by the dealer in accordance with Tenn. Code Ann. Section 67-6-523.

Effective date: June 27, 2006.
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Monetary Allowances under the Streamlined Sales and Use Tax Agreement
Public Chapter 1019 clarifies the commissioner's authority to provide monetary allowances pursuant to Article VI of the Streamlined Sales and Use Tax Agreement to include certified service providers as well as voluntary sellers. Additionally, a certified service provider will be subject to all of the rights, liabilities, duties and responsibilities of the Model 1 seller for whom the certified service provider provides services. For purposes of clarity, a definition for "certified service provider" and "Model 1 seller" has been added to Tenn. Code Ann. Section 67-6-102(a).

Effective date: June 27, 2006.
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Motion Picture Companies
Public Chapter 1019 repeals Tenn. Code Ann. Section 67-6-530 entirely, which provided a refund of sales and use tax to motion picture companies classified under Major Group 78, Industry No. 7812 of the Standard Industrial Classification Manual of 1978.

Effective date: June 27, 2006.
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New Sales Tax Holiday
Public Chapter 1019 adds a new sales tax holiday commencing at 12:01 a.m. on April 27, 2007 and ending at 11:59 p.m. on April 29, 2007. This new sales tax holiday applies to the same items that are exempt during the sales tax holiday occurring on the first weekend of August. For example, (1) clothing with a sales price of one hundred dollars ($100) or less; (2) school supplies with a sales price of one hundred dollars ($100) or less; (3) computers with a sales price of one thousand five hundred dollars ($1,500) or less, etc.

Effective date: June 27, 2006.
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Definition of "Business"
Public Chapter 975 revises the definition of "business" to exclude the sales of tangible personal property to consumers if such sales are made only four times per year, provided such sales are made by a volunteer fire department.

Effective date: July 1, 2006.
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Reimbursement to Counties for Tax Loss Resulting from a Sales Tax
Public Chapter 1019 revises the method for reimbursing local governments for any loss in local sales tax as result of a sales tax holiday. Generally, the reimbursement will be paid to the particular situs of the local tax loss. Only if the particular situs cannot be determined will the reimbursement be paid to the counties based upon the relative amount of other sales tax collections in the county or city. For purposes of clarity, subsection (h) of Tenn. Code Ann. Section 67-6-710 was reorganized into paragraphs.

Effective date: July 2, 2006.
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Courthouse Square Revitalization Pilot Project
Public Chapter 1019 increases the number of projects that may be selected for the courthouse square revitalization pilot project from three to six, provided that no more than two projects may be selected from each grand division. It also provides that state sales tax only will be allocated under the project. The revitalization project allocations will not apply to the local option sales tax.

Effective date: June 27, 2006.
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Convention Centers
Public Chapter 781 adds a new subdivision (E) to Tenn. Code Ann. Section 67-6-103(d)(1). Under this new subdivision, if a new convention center which qualifies as a public use facility is constructed in a county with a metropolitan form of government and which has a population of five hundred thousand (500,000) or more, then a portion of the sales tax revenue generated by the sale admission, parking, food, drink or any other services subject to tax shall be apportioned to the entity responsible for the retirement of the debt on the facility until the earlier of (1) the debt is retired or (2) for a period of thirty (30) years. This new subdivision (E) also creates a similar provision for one or two hotels that are constructed in connection with the convention center if certain certification standards are met.

Effective date: June 27, 2006.
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Convention Centers
Public Chapter 781 adds a new subdivision (E) to Tenn. Code Ann. Section 67-6-103(d)(1). Under this new subdivision, if a new convention center which qualifies as a public use facility is constructed in a county with a metropolitan form of government and which has a population of five hundred thousand (500,000) or more, then a portion of the sales tax revenue generated by the sale admission, parking, food, drink or any other services subject to tax shall be apportioned to the entity responsible for the retirement of the debt on the facility until the earlier of (1) the debt is retired or (2) for a period of thirty (30) years. This new subdivision (E) also creates a similar provision for one or two hotels that are constructed in connection with the convention center if certain certification standards are met.

Effective date: May 25, 2006.
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Tennessee River Resort District
Public Chapter 892 adds language to the end of Tenn. Code Ann. Section 67-6103(a)(3)(F)(i) which permits any county which has a population of less than ten thousand (10,000), and which borders the Tennessee River and a county included within the Tennessee River resort district, to elect to be a "Tennessee River resort district."

Effective date: June 20, 2006.
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Revision to Classification 3
Public Chapter 583 adds a new subdivision to Classification 3 to cover farmers providing services to other farmers for planting or harvesting agriculture products or for the preparation, improvement, or maintenance of land used for the production of agricultural products. As a housekeeping matter, Public Chapter 583 revises Tenn. Code Ann. Section 67-4-708(3)(C) to delete any references to "3(C)(i)-(xv)" and replace with the reference "herein below."

Effective date: May 4, 2006.
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Gasoline Tax
Public Chapter 1019 provides that the automatic increase in the state gasoline tax rate as a result of any reduction in the federal gasoline tax rate will cease to be effective until July 1, 2008.

Effective date: June 27, 2006.
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Litigation Tax
Public Chapter 1019 clarifies that the existing twenty-three dollars and seventy-five cents ($23.75) tax on litigation includes probate court and any other court that exercises state court jurisdiction in a civil case, excluding the court of appeals and the Tennessee supreme court. Civil cases in the court of appeals and the Tennessee supreme court are subject to a privilege tax of thirteen dollars and seventy-five cents ($13.75).

Effective date: June 27, 2006.
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Tobacco Tax; Eligible Bad Debt Credit
Public Chapter 1019 creates a new statute to provide a credit to a tobacco manufacturing distributor or wholesale dealer and jobber equal to any eligible bad debt. In order to receive the credit a tobacco manufacturing distributor or wholesale dealer and jobber must apply for a refund and produce evidence (1) of the original invoice; (2) that the tobacco product was delivered to the customer; (3) the customer did not pay the tobacco manufacturing distributor or wholesale dealer and jobber and reasonable collection efforts were used to collect such payment and (4) the debt was written off for federal tax purposes.

Effective date: July 1, 2006, and applying to bad debts arising from invoices dated on or after July 1, 2006.
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Professional Privilege Tax; Relief for Military Personnel
Public Chapter 1019 clarifies that military personnel are exempt from the professional privilege tax provided such persons are in active military service for more then one hundred eighty (180) days during three hundred sixty-five (365) days prior to the due date of such privilege tax.

Effective date: June 27, 2006.
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Unauthorized Substances Tax
Public Chapter 1019 revises the tax on unauthorized substances to be based on a set amount of tax per marijuana plant. One or more marijuana plants will be subject to the unauthorized substance tax and must be stamped accordingly.

Effective date: June 27, 2006.
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Severance Taxes; Disclosure to Local Governmental Unit
Public Chapter 553 amends Tenn. Code Ann. Section 67-1-1704(d) to provide that, upon written request, returns and tax information may be disclosed to duly authorized officials of a unit of local government for the purpose of ascertaining whether proper local taxes are being paid. For purposes of ascertaining whether proper local severance taxes are being paid, the term "authorized officials of a unit of local government" means the county mayor or a member of the county governing body. No unit of local government nor any official or employee of a unit of local government may disclose such information to any person other than the person to whom it relates.

Effective date: April 24, 2006.
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County Powers Relief Act
Public Chapter 953 authorizes counties to levy a privilege tax on persons and entities engaged in the residential development of property in order to provide a county with an additional source of funding to defray the cost of providing school facilities to meet the needs of the citizens of the county as a result of population growth. A county is permitted to levy the tax only if it meets one or more of the following criteria: (1) the county experienced a growth rate of 20 percent or more in total population from the 1990 federal census to the 2000 federal census, or the county experiences growth of 20 percent or more between any subsequent federal decennial censuses; or (2) the county experienced a 9 percent or more increase in population over the period from the year 2000 to 2004, or over a subsequent 4 year period according to U.S. Census Bureau population estimates. No county shall be authorized to enact an impact fee on development or a local real estate transfer tax by private or public act. No county may levy a privilege tax under the County Powers Relief Act while a similar development tax or impact fee granted by private act is in effect.

Effective date: June 20, 2006.
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State Shared Taxes
Public Chapter 989 restores to local governments the remaining one-half of the state-shared taxes that were allocated to the general fund pursuant to Chapter 355 of the Public Acts of 2003. One-half was previously restored by Chapter 500 of the Public Acts of 2005.

Effective date: August 1, 2006.
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Alcoholic Beverages at Historic Mansions
Public Chapter 602 revises Tenn. Code Ann. Section 57-4-101 to permit the sale of alcoholic beverages on the grounds of historic mansions without limitation.

Effective date: May 4, 2006.
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Definition of Convention Center
Public Chapter 612 revises the definition of "Convention Center" in Tenn. Code Ann. Section 57-4-102(13) to include a charitable organization that operates a symphony orchestra. Public Chapter 612 also permits a convention center to grant a franchise to provide food and beverage on the convention center premises and such franchise will also be classified as a convention center.

Effective date: May 4, 2006.
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Community Theater
Public Chapter 865 adds the definition of "Community Theater" in Tenn. Code Ann. Section 57-4-102(12) to include a facility which is (1) eighty (80) years old; (2) seats approximately two hundred fifty (250) persons; (3) is operated by a non-profit corporation, subject to certain limitations; (4) sells alcoholic beverages only before and after performances or during intermission; and (5) is within a municipality authorizing the sale or alcoholic beverages that is located in a county with a population of not less than thirty-three thousand five hundred twenty-five (33,525) nor more than thirty-three thousand six hundred (33,600).

Effective date: May 4, 2006.
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Manufacturer's License
Public Chapter 616 adds a new subsection to Tenn. Code Ann. Section 57-3-202 which provides that a manufacturer's license may be issued for the purpose of blending alcoholic and non-alcoholic beverages on the premises.

Effective date: May 4, 2006.
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Salvaged Titles, Flood Titles, and Non-repairable Vehicle Certificates
Public Chapter 517 amends the current law relative to the issuance of salvaged titles, flood titles or non-repairable vehicle certificates and the inspection of rebuilt motor vehicles. It deletes old language that refers to "permits to dismantle" and inserts the correct language referencing "salvage titles, flood titles, or non-repairable vehicle certificates." It also increases the penalty from a Class C misdemeanor to a Class A misdemeanor and the requirement for dealers and junk dealers to maintain records for three years of vehicles bought for dismantling. The act also amends the current law relative to persons of submitting a rebuilt vehicle for an anti-theft inspection. It requires the owner to submit the application "under the penalty of perjury." Currently, the law only requires that the applicant to "affirm" that the information is complete. The act also increases the penalty if a person fails to provide the correct information on the disclosure of a motor vehicle's previous titling and salvage from a Class C misdemeanor to a Class A misdemeanor.

Effective date: July 1, 2006.
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Van Accessible Handicap Parking Spaces
Public Chapter 562 requires businesses to provide van-accessible parking spaces with an access isle that is no less than ninety-six inches (96") to accommodate a wheelchair lift, have vertical clearance to accommodate van height at the van parking space and adjacent access aisle, and to also have an additional sign or marking identifying the parking space as "van accessible." The act only applies to businesses that operate from a permanent location and provide the specially marked parking spaces after the effective date of this act.

The act also requires that any person who starts new construction or makes alterations to the parking area of the person's business after the effective date of the act comply with all the applicable regulations promulgated by the United States Department of Justice and the United States Department of Transportation based on the ADA Accessibility Guidelines (ADAAG).

Effective date: April 24, 2006.
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Commemorative Plates
Public Chapter 586 encourages the Department of Tourist Development to conduct a study to determine the feasibility of designing, manufacturing, distributing, and selling commemorative Tennessee license plates to display on the front of vehicles to generate revenue for Tennessee.

Effective date: May 4, 2006.
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Hybrid and Alternative Fuel Using Vehicles
Public Chapter 636 urges the Department of Transportation to study the implementation of a policy exempting low emission and energy efficient vehicles from the requirements of the HOV lane. The Department of Transportation is urged to report its findings of study to the Transportation Committees of the House and Senate.

Effective date: May 12, 2006.
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Specialty Plates
Public Chapter 964 creates several new specialty license plates:
  • Support our Troops
  • Sons of the American Revolution
  • Daughters of the American Revolution
  • Tennessee Emergency Medical Services Education Association (TEMSA)
  • Rotary International
  • Tennessee Wildflowers
  • Youth Villages
  • Memphis Zoo
  • Gold Star Mothers
This Public Chapter also creates two cultural military license plates:
  • Operation Iraqi Freedom
  • Operation Enduring Freedom
It also makes technical changes to existing language for the distribution of military plates and extends the time period for compliance for the Tennessee Food Bank and the Regional Medical Center at Memphis (The MED).

Effective date: July 1, 2006.
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Specialty Plates
Public Chapter 911 changes the cultural "Masons" plates from a cultural plate to a "new specialty earmarked" plate. The act simply changes the distribution of revenue from eighty percent (80%) to the Arts and twenty percent (20%) to the highway fund to fifty percent (50%) to the Masonic Widows and Orphans Home, forty percent (40%) to the Arts and ten percent (10%) to the highway fund.

Effective date: July 1, 2006.
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Emissions Testing
Public Chapter 844 amends the current law relative to obtaining emissions approval when registering a vehicle. The act authorizes the issuance of a 90 day certificate of compliance for a light duty motor vehicle that is offered for sale by a motor vehicle dealer. Such certificate shall be extendable at the option of the dealer for an additional ninety (90) days upon a payment of one dollar and fifty cents ($1.50). The act does not otherwise change the current statutory and regulatory requirements for emissions testing.

Effective date: May 17, 2006.
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Antique Automobile License Plates
Public Chapter 910 removes the prohibition of the use of antique motor vehicles on the highways for general transportation on Saturday and Sunday.

Effective date: June 20, 2006.
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Certification of Ownership
Public Chapter 952 permits a person to apply for certificate of title to a vehicle without proper documentation if the vehicle has a fair market value of $3,000 or less and the person submits a certificate of ownership under penalty of perjury accompanied by the following:
  1. Return receipts from certified letters sent to all known parties with a legal interest in the vehicle requesting an assigned certificate of title or, in the event the previous owner is unknown, evidence of notification in a publication of general circulation in the county in which the application is being made of the applicant's intent to apply for title on the vehicle. The notification must contain a description of the vehicle including make, model, year and vehicle identification number and a request to any party holding an interest in the vehicle to contact the person in possession of the vehicle by certified mail, return receipt requested, within ten (10) business days of the date of publication.
  2. Verification of the vehicle identification number (VIN) by a law enforcement officer or licensed dealer.
  3. A notarized bill of sale from the last registered owner or a notarized statement from the seller stating why the vehicle was not titled or registered in the seller's name; or, in the absence of such documentation, a licensed motor vehicle dealer appraisal of the value of the vehicle.
  4. Photographs of the vehicle in pre-repaired state; if unavailable, then post repair photographs submitted with a notarized statement from the applicant that no pre-repaired photographs are available and that the person was unaware such would be required before the repairs were made; if no repairs were made the statement should likewise state.
  5. A complete copy of the original manufacturer's statement of origin certified as true and exact is required in the event a vehicle was purchased new and never titled and the manufacturer's statement of origin has been lost and a duplicate cannot be obtained from the manufacturer.
If the certificate of ownership and supporting documentation are submitted with the appropriate fee, a certificate of title would be issued except where there is clear evidence of fraud or circumstances that make the vehicle eligible for titling with the proper transfer documents.

The certificate of title issued pursuant to this bill would not relieve the registrant of liability resulting from possession of the vehicle as otherwise provided by law.

Effective date: June 20, 2006.
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