AN ACT to amend Tennessee Code Annotated, Title 5; Title 6; Title 7; Title 13; Title 65 and Title 68, relative to infrastructure development.
HB2386 creates a new part in Tennessee law governing when local governments may require developers to help pay for offsite public infrastructure needed to serve a private development. The bill defines key terms such as developer, development, political subdivision, offsite public infrastructure improvement, and public infrastructure, with the latter including roads, sidewalks, lighting, stormwater systems, utilities, and broadband that will be dedicated to public entities.
Under the bill, if a county, municipality, or metropolitan government determines that offsite public infrastructure is necessary for a development project to support future development, it may require the developer to construct or pay for those improvements. Any cost-sharing arrangement must be based on the proportionate impact or utilization of the development on the infrastructure. The political subdivision must make its determination within 60 days of the developer’s request for approval, and its share of the costs may come from impact fees, bond proceeds, or unencumbered tax revenues.
The bill adds a new statutory framework in Title 7, Chapter 51, for allocating the cost of offsite public infrastructure improvements tied to private development. It gives local governments express authority to condition development approval on developer participation in infrastructure costs, while also requiring a proportionality standard and a 60-day decision deadline. The measure affects developers, counties, municipalities, metropolitan governments, and public infrastructure financing practices, including the use of impact fees, bonds, and general tax revenues.
The bill appears to have received generally favorable support as it moved through the legislative process, passing multiple committees and floor votes with comfortable margins. The final House vote was 77-4, and earlier committee votes were also strongly positive, though several stages were marked “pass if amended,” suggesting lawmakers wanted refinements rather than rejecting the concept. Overall, the sentiment suggests broad agreement on the need to clarify local authority over infrastructure cost-sharing in development projects.
The main point of contention appears to be the balance between local government authority and developer burden. Supporters likely viewed the bill as a practical way to ensure infrastructure needed for growth is funded fairly, while critics may have been concerned about requiring private developers to pay for public improvements beyond their property boundaries. The repeated “pass if amended” recommendations indicate that some members wanted to adjust the bill’s details, likely around proportionality, timing, or the scope of infrastructure costs that can be shifted to developers.