AN ACT to amend Tennessee Code Annotated, Title 5; Title 6; Title 7; Title 13; Title 54 and Title 66, relative to real property development.
SB1045 creates a new chapter in Tennessee law governing certain real property development projects. It defines “development property” to include residential subdivisions of fewer than 300 single-family homes and multifamily projects under 500 units, and it defines “infrastructure” broadly to include roads, utilities, internet cabling, entrances, and related improvements. The bill then limits when state, county, and municipal governments may require a landowner, developer, or builder to fund, build, or contribute to infrastructure tied to a development.
Under the bill, governments could not require developers to pay for or construct nonessential infrastructure that is not contiguous or adjacent to the development, or infrastructure beyond what was anticipated as needed at the start of development. The bill states that development begins at the initial planning stage and continues through completion. It also specifies that it does not repeal or modify existing tax, property, zoning, permitting, or other applicable laws, and it would apply only to contracts entered into, renewed, or amended on or after July 1, 2025.
The bill would add a new statutory framework in Title 13 limiting local and state exactions or infrastructure contribution requirements for qualifying residential and multifamily developments. In practice, it would constrain government authority to require developers to finance off-site or nonessential infrastructure improvements, especially where those improvements are not adjacent to the project or exceed the infrastructure anticipated at the outset of development. The bill expressly preserves existing tax, zoning, permitting, and other laws, so its effect is targeted to development-related infrastructure obligations rather than broader land-use regulation.
The available voting history suggests the bill faced some support but also notable hesitation. In the Senate State & Local Government Committee, it received 8 yeas and 1 nay but was deferred to summer study, indicating interest in the proposal without immediate advancement. No committee transcript is available, so the record does not show detailed debate, but the deferment suggests members wanted more time to evaluate the bill’s scope and consequences.
The main point of contention is the balance between limiting developer obligations and preserving local government flexibility to require infrastructure improvements tied to growth. Supporters would likely view the bill as protecting developers from being asked to fund unrelated or excessive off-site infrastructure costs, while opponents may worry it could reduce local governments’ ability to ensure that new development pays for needed roads, utilities, and other public improvements. The bill’s definitions of “nonessential infrastructure” and the restriction on requirements beyond what was anticipated at the start of development are likely to be the most debated provisions.