The payments received by the board of supervisors direct from Tennessee Valley Authority shall be deposited to a special fund and the said board of supervisors shall ascertain at the end of each fiscal year what portion of said payments received by it during the preceding twelve (12) months is due or should be credited to the various taxing funds, districts or units of the county; and, when so ascertained, the said board of supervisors shall cause transfer of such sums from the special funds to the general funds of such taxing districts or units of the county, to be expended or applied as the governing authority of each such taxing unit might determine by proper order, for current operating expenses or to the payment of bonds and interest.

The said payments received by the board of supervisors and the municipal governing authorities from the state, under the provisions of subsection (1) or (4) of Section 27-37-301 and Section 27-37-303 hereof, shall be paid by the said board of supervisors and governing authorities into their respective general funds.

The board of supervisors of any county and the governing authorities of any municipality are hereby authorized and empowered to distribute out of their general funds to school districts of the county or municipality, as the case may be, all or any portion of amounts received by them as Tennessee Valley Authority payments in lieu of taxes.

Payments received pursuant to this article by the counties, school districts and municipalities shall not be included or considered as proceeds of ad valorem taxes for the purpose of the statutory growth limitations on ad valorem taxes.