SECTION 13. Tennessee Code Annotated, Section 67-2-102, is amended by deleting the language "in the amount of five percent (5%) per annum shall be levied and collected" and substituting instead the language "shall be levied and collected annually". and is further amended by adding the following language as a new sentence at the end of the section: The rate of the tax imposed by this chapter shall be 3

HB 534

(1) For any tax year that begins on or after January 1, 2017, and prior to January 1 , 2018, four percent (4o/o);

(2) For any tax year that begins on or after January 1, 2018, and prior to January 1,2019, three percent (3%);

(3) For any tax year that begins on or after January 1,2019, and prior to January 1, 2020, two percent (2%);

(4) For any tax year that begins on or after January 1, 2020, and prior to January 1, 2021, one percent (1%); and

(5) For any tax year that begins on or after January 1,2021, and for subsequent tax years, zero percent (0%). SECTION 14. Tennessee Code Annotated, Section 67-2-119, is amended by deleting the language "at the rate of five percent (5%)" and substituting instead the language "at the rate provided in $ 67-2-102". SECTION 15. Tennessee Code Annotated, Section 67-2-124(c), is amended by deleting the language "January 1,2022" wherever it appears and substituting instead the language "January 1,2021". SECTION 16. Tennessee Code Annotated, Section 67-3-201(a), is amended by deleting the language "of twenty cents (201) per gallon", and is further amended by adding the following language as a new sentence at the end of subsection (a): The rate of the tax imposed by this section shall be:

(1) On or after July 1 ,2017, through June 30, 2018, twenty-four cents (24f) per gallon;

(2) On or after July 1 , 2018, through June 30, 2019, twenty-five cents (25$) per gallon; and

(3) On or after July 1 , 2019, twenty-six cents (26þ) per gallon. SECTION 17. Tennessee Code Annotated, Section 67-3-202(a), is amended by deleting the language "a use tax of seventeen cents (17þ) per gallon" and substituting instead the language "and except as provided in subsection (c), a use tax"; and is further amended by adding the following language as a new sentence at the end of subsection (a): The rate of the tax imposed by this section shall be:

(1) On or after July 1 ,2017, through June 30, 2018, twenty-one cents (21þ) per gallon;

(2) On or after July 1 , 2018, through June 30, 2019, twenty-four cents (24$) per gallon; and

(3) On or after July 1 ,2019, twenty-seven cents (27þ) per gallon. SECTION 18. Tennessee Code Annotated, Section 67-3-202(c), is amended by deleting the subsection in its entirety and substituting instead the following language:

(c) Notwithstanding subsection (a), dieselfuelthat is indelibly dyed in accordance with internal revenue service regulations and is legal for exempt use only shall not be considered subject to the diesel tax imposed under this section, except when used by a commercial carrier to produce power for a means of transportation, as defined in the Transportation Fuel Equity Act, compiled in part 14 of this chapter, in which case a use tax of seventeen cents (17f) per gallon is imposed on such fuel. 4