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An ordinance amending certain sections of the Metropolitan Code of Laws (i) relating to the apportionment, distribution and allocation of revenues from tourist accommodation taxes to comply with the provisions of Public Chapter No. 1079 of the 2026 Public Acts of Tennessee and (ii) to extend the levy and collection of the additional hotel occupancy privilege tax in accordance with applicable state law.
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WHEREAS, The Metropolitan Government of Nashville and Davidson County (the “Metropolitan Government”) currently levies certain tourist accommodation taxes pursuant to various provisions of the Metropolitan Code of Laws (the “Metropolitan Code”), the revenues from which tourist accommodation taxes are apportioned and distributed to pay certain convention center and tourism-related expenses in accordance with Metropolitan Code Sections 5.12.060, 5.12.130, 5.12.140, 5.16.140, 5.16.150 and 5.32.190; and
WHEREAS, Public Chapter No. 1079 of the 2026 Public Acts of Tennessee (the “New State Legislation”) was signed into state law on May 22, 2026, for the purpose of, among other things, (i) making changes to the apportionment and distribution of certain tax revenues collected by the Metropolitan Government, including, but not limited to, those revenues from taxes imposed through or for the purposes contained in the Convention Center Authorities Act of 2009, codified as Title 7, Chapter 89 of the Tennessee Code Annotated, as amended, and the Convention Center and Tourism Development Financing Act of 1998, codified as Title 7, Chapter 88 of the Tennessee Code Annotated, as amended, and (ii) establishing listed priorities for such allocations; and,
WHEREAS, Metropolitan Code Sections 5.12.060, 5.12.130, 5.12.140, 5.16.140, 5.16.150 and 5.32.190 must be amended to comply with those changes to the apportionment, distribution and allocation of tax revenues made by the New State Legislation; and,
WHEREAS, Metropolitan Code Section 5.12.140 additionally provides that the additional hotel occupancy privilege tax which exceeds two dollars ($2.00) authorized by such article shall terminate six (6) years from May 21, 2020; and,
WHEREAS, Tennessee Code Annotated Section 7-4-202(d)(2) provides that the authority to charge the amount of such additional hotel occupancy privilege tax in excess of two dollars ($2.00) shall expire six (6) years from May 21, 2026; and,
WHEREAS, Metropolitan Code Section 5.12.140 may be further amended to provide that the additional hotel occupancy privilege tax which exceeds two dollars ($2.00) shall terminate six (6) years from May 21, 2026, in accordance with corresponding state law; and,
WHEREAS, the Metropolitan Government desires to amend Metropolitan Code Sections 5.12.060, 5.12.130, 5.12.140, 5.16.140, 5.16.150 and 5.32.190 for the purposes hereinabove provided.
NOW, THEREFORE, BE IT ENACTED BY THE METROPOLITAN COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That Section 5.12.060(A) of the Metropolitan Code is hereby amended by deleting subdivisions (2) and (3) and substituting instead the following as new subdivisions (2) and (3):
(2) One-third (1/3) in its entirety must be maintained in a reserve fund to be used exclusively for the following purposes in descending order of priority:
(A) The purpose of constructing, expanding, improving, financing, and operating a convention center;
(B) The payment or funding of authorized obligations, as defined in Tennessee Code Annotated Section 7-89-112(n)(4); or
(C) The payment or funding of costs set forth in Tennessee Code Annotated Section 7-89-112(n)(1) and (3);
(3) One-sixth (1/6) in its entirety must be used for the following purposes in descending order of priority:
(A) Tourist related activities, which may include constructing, expanding, improving, financing, and operating a convention center;
(B) The payment or funding of authorized obligations, as defined in Tennessee Code Annotated Section 7-89-112(n)(4); or
(C) The payment or funding of costs set forth in Tennessee Code Annotated Section 7-89-112(n)(1) and (3);
Section 2. That Section 5.12.130 of the Metropolitan Code is hereby amended by deleting subsection A of that Section and substituting instead the following as a new subsection A:
A. Revenues up to two dollars received by the metropolitan government from the privilege tax imposed pursuant to this article shall be deposited into a metropolitan government fund entitled “The Convention Center Fund” and must be used for the following purposes in descending order of priority:
(1) Constructing, expanding, improving, financing, and operating a publicly owned convention center in excess of four hundred million dollars ($400,000,000) in costs located within the territory of the metropolitan government;
(2) The payment or funding of authorized obligations, as defined in Tennessee Code Annotated Section 7-89-112(n)(4); or
(3) The payment or funding of costs set forth in Tennessee Code Annotated Section 7-89-112(n)(1) and (3).
Section 3. That Section 5.12.140 of the Metropolitan Code is hereby amended by deleting subsection A of that Section and substituting instead the following as a new subsection A:
A. The additional hotel occupancy privilege tax up to two dollars authorized by this article shall terminate once the total bonded indebtedness incurred for any construction, expansion, modification, or improvement of the convention center facility by the metropolitan government or any instrumentality thereof is paid in full as to bond principal and interest, including expenses of bond sale or sales, and the metropolitan government repeals the provisions of this article as required by applicable state law, with the tax no longer being levied as of the conclusion of the first full month following such date; provided, however, that any funds and interest remaining in the reserve fund after all obligations imposed by applicable law have been fulfilled must be used by the governmental board or agency responsible for the operation of the convention center for operation, promotion, and advertisement of the convention center facilities.
Section 4. That Section 5.12.140 of the Metropolitan Code is further hereby amended by deleting “2020” in subsection B of that Section and substituting instead “2026”.
Section 5. That Section 5.16.140 of the Metropolitan Code is hereby amended by deleting such Section in its entirety and instead substituting the following:
All revenues received by the metropolitan government from this privilege tax must be deposited into a metropolitan government fund entitled “The Convention Center Fund” and must be used for the following purposes in descending order of priority:
(1) Constructing, expanding, improving, financing, and operating a publicly owned convention center in excess of four hundred million dollars ($400,000,000) in costs located within the territory of the metropolitan government;
(2) The payment or funding of authorized obligations, as defined in Tennessee Code Annotated Section 7-89-112(n)(4); or
(3) The payment or funding of costs set forth in Tennessee Code Annotated Section 7-89-112(n)(1) and (3).
Section 6. That Section 5.16.150 of the Metropolitan Code is hereby amended by deleting such Section in its entirety and instead substituting the following:
The privilege tax for contract vehicles leaving the airport authorized by this article shall terminate once the total bonded indebtedness incurred for any construction, expansion, modification, or improvement of the convention center facility by the metropolitan government or any instrumentality thereof is paid in full as to bond principal and interest, including expenses of bond sale or sales, and the metropolitan government repeals the provision of this article as required by applicable state law, with this tax no longer being levied as of the conclusion of the first full month following such date; provided, however, that any funds and interest remaining in the reserve fund after all obligations imposed under applicable law have been fulfilled must be used by the governmental board or agency responsible for the operation of the convention center for operation, promotion, and advertisement of the convention center facilities.
Section 7. That Section 5.32.190 of the Metropolitan Code is hereby amended by deleting subsection B of that Section and substituting instead the following as a new subsection B:
B. All revenues received by the metropolitan government from this surcharge or tax must be deposited into a metropolitan government fund entitled “The Convention Center Fund” and must be used for the following purposes in descending order of priority:
(1) Constructing, expanding, improving, financing, and operating a publicly owned convention center in excess of four hundred million dollars ($400,000,000) in costs located within the territory of the metropolitan government;
(2) The payment or funding of authorized obligations, as defined in Tennessee Code Annotated Section 7-89-112(n)(4); or
(3) The payment or funding of costs set forth in Tennessee Code Annotated Section 7-89-112(n)(1) and (3).
Section 8. That Section 5.32.190 of the Metropolitan Code is hereby amended by deleting subsection C of that Section and substituting instead the following as a new subsection C:
C. The surcharge for rental vehicles authorized pursuant to this article shall terminate once the total bonded indebtedness incurred for any construction, expansion, modification, or improvement of the convention center facility by the metropolitan government or any instrumentality thereof is paid in full as to bond principal and interest, including expenses of bond sale or sales, and the metropolitan government repeals this surcharge or tax as required by applicable state law, with this surcharge or tax no longer being levied as of the conclusion of the first full month following such date; provided, however, that any funds and interest remaining in the reserve fund after all obligations imposed under this part have been fulfilled must be used by the governmental board or agency responsible for the operation of the convention center for use by the governmental board or agency in the operation, promotion, and advertisement of the convention center facilities.
Section 9. That all other provisions of the Metropolitan Code not specifically amended above but required to be amended to comply with the provisions of the New State Legislation are hereby amended to the extent necessary for compliance with the New State Legislation, it being necessary and the intent of the Metropolitan Government that all provisions of the Metropolitan Code are consistent with the requirements of the New State Legislation.
Section 10. That upon enactment, this Ordinance shall take effect from and after the date on which all of the indebtedness of The Convention Center Authority of The Metropolitan Government of Nashville and Davidson County outstanding on the date hereof has been discharged, via prepayment, defeasance or refinancing, as contemplated by the New State Legislation.