AN ACT to amend Tennessee Code Annotated, Title 7; Title 9; Title 12; Title 13; Title 66; Title 67 and Title 68, relative to infrastructure development districts.
HB0636 creates the “Real Estate Infrastructure Development Act of 2025,” authorizing Tennessee municipalities to establish infrastructure development districts by resolution. The bill sets out a detailed process for creating a district, beginning with a petition signed by the developer and all owners of property proposed for inclusion, followed by public notice, a public hearing, and final approval by the governing body or bodies of the host municipality or municipalities. The district may cover one or more separate property areas and may include infrastructure such as roads, sidewalks, water, wastewater, natural gas, electric, telecommunications, parking, stormwater facilities, and land dedicated for public purposes.
The act gives host municipalities broad authority to finance district infrastructure through special assessments and to issue bonds, notes, or other obligations backed by those assessment revenues. It also allows municipalities to delegate bond issuance to industrial development corporations or public building authorities, and it establishes rules for assessment rolls, collection, delinquency, interest and penalties, prepayment, liens, audits, and dissolution of the district. The bill also amends existing law to allow a host municipality to contract with an outside professional administrator and include that cost in the assessment.
The bill adds a new part to Tennessee Code Annotated Title 7 governing infrastructure development districts and amends related provisions in Title 7 to support administration of special assessments. It creates an alternative, independent legal framework for municipalities to finance public infrastructure improvements, while preserving other existing municipal powers and overlapping improvement-district authorities, except that a central business improvement district may not overlap an infrastructure development district created under this act. The bill also ties assessment collection to property-tax collection procedures, creates liens superior to most other encumbrances, and authorizes long-term financing with a maximum debt term of 30 years.
The bill appears to have broad support in committee, advancing unanimously at each recorded House committee stage with no dissenting votes. The committee history suggests a generally favorable view of the measure as a municipal finance and development tool, with the bill moving forward on repeated recommendations for passage as amended. No committee transcript is available here, so the record reflects procedural support rather than detailed debate.
The main policy issues implied by the bill are the scope of municipal authority, the use of mandatory special assessments on private property, and the potential for districts to span multiple municipalities or include property that may not ultimately receive equal benefit. The bill addresses some of these concerns by requiring petitions from affected owners, public hearings, notice, and a benefit-based assessment methodology, but it also limits objections by deeming failures to protest a waiver and by making the act controlling in the event of conflict with other state law. Another likely point of concern is the lien priority and enforcement structure, since assessments become a superior lien and delinquent amounts are collected similarly to property taxes.