(a) There is hereby created a special agency account in the state general fund to be known as the conservation compensation fund. Expenditures from such fund shall only be made to implement and effectuate the purposes of this chapter. 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 shall be returned to and made a part of the fund.

(b) On or before January 1 of each year, the commissioner of finance and administration shall certify to the comptroller of the treasury such information as is necessary to identify the parcels of property that have been rendered tax exempt through acquisition by the state pursuant to this chapter. The comptroller of the treasury shall determine the appropriate tax rate and assessed value of each such parcel of property, and on or before March 1 of each year, shall certify to the commissioner of finance and administration the amount of property tax revenue lost by each affected city or county the prior calendar year. The assessed value shall be based on the use value provided for in title 67, chapter 5, part 10, if the property is of sufficient size to have been classified under that part. Acquisition by the state, pursuant to this chapter, of property classified under title 67, chapter 5, part 10, 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. If the property is not of sufficient size to have been classified under title 67, chapter 5, part 10, the assessed value shall be determined according to the same basis as other like property within the jurisdiction. Each subsequent yearly reimbursement amount shall be based on the same assessed value, tax rate and use in effect on the date of purchase. The commissioner of finance and administration shall reimburse each affected city and county the amount so determined, from funds available in the conservation compensation fund. In any year in which funds available in the conservation compensation fund are insufficient to fully reimburse such cities and counties, the commissioner of finance and administration shall effect a transfer of funds from the Tennessee heritage conservation trust fund to the conservation compensation fund, in an amount sufficient to fully reimburse the affected cities and counties. Funds transferred from the Tennessee heritage conservation trust fund to the conservation compensation fund, along with interest, if any, accruing on such funds after their transfer to the conservation compensation fund, shall be expended to reimburse affected cities and counties only for lands acquired by the state under this chapter.