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SENATE BILL 731
By Pody
HOUSE BILL 795
By Vaughan
HB0795
002606
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AN ACT to amend Tennessee Code Annotated, Title 5;
Title 6; Title 7; Title 9; Title 12; Title 13 and Title
66, relative to development contracts.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 7, is amended by adding the following
as a new chapter 70:
7-70-101.
As used in this chapter, unless context otherwise requires:
(1) "Contract" means a bona fide agreement that is legal, valid, and subsisting,
involving the mutual exchange of consideration between a local government and a
nongovernmental contractor or developer and entered into for the purpose of the
contractor or developer to create or develop a development property in a physical
location under the jurisdiction of the local government;
(2) "Contractor" means a person or nongovernmental entity that is a party to a
contract with a local government or developer and is hired to oversee, manage, or
perform labor to assist a developer in the creation or development of a development
property in a physical location under the jurisdiction of a local government, and includes
subcontractors that are a party to a contract;
(3) "Developer" means a person or nongovernmental entity that is a party to a
contract with a local government or developer and executed a contract with the local
government or developer for the purpose of creating or developing a development
property in a physical location under the jurisdiction of a local government;
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(4) "Development property" means real property that is built, improved upon, or
developed by a developer for the purpose of creating or developing a property under the
jurisdiction of a local government;
(5) "Local government" means a county, municipality, or local governing body in
this state responsible for reviewing a development application, development plan, or a
site inspection submitted by a developer for the purpose of creating or developing real
property in a physical location in this state under the jurisdiction of the respective county,
municipality, or local governing body;
(6) "Nonessential infrastructure":
(A) Means any infrastructure that is not necessary for the creation,
ongoing maintenance, and growth of a development property; and
(B) Includes public roads, bridges, highways, traffic lights, toll roads, road
signage, barricades, turn lanes, utility poles, electrical lines, internet cabling,
public entrances that are not part of a development property, and property that is
not contiguous or adjacent to the development property; and
(7) "Required bond" means a bond issued by a local government, as authorized
under this title or otherwise by state law, for the purpose of financing the creation or
development of a development property.
7-70-102.
(a) Notwithstanding another law:
(1) Upon execution of a contract between a local government and a
developer or contractor, a local government shall not make changes or additions
to the terms of the contract unless the parties agree to the modification of one (1)
or more specific terms; and
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(2) Upon inspection by an independent party, if it is determined that a
developer or contractor has completed all work required under the contract with
the local government, then the local government must release the developer or
contractor from its required bond no later than thirty (30) days after such finding
of completion by the independent inspection.
(b) A local government shall not, in connection to a development property,
require a developer or contractor to fund, build, or contribute to the development of:
(1) Nonessential infrastructure, unless such funding, building, or
contribution by the developer or contractor is a term of the original contract or the
parties agree to a modification of one (1) or more specific terms of the contract
requiring the developer or contractor to undertake such funding, building, or
contribution;
(2) Nonessential infrastructure beyond the anticipated infrastructure
needed for the development property as estimated at the start of the
development of the development property. For purposes of this subdivision
(b)(2), development of a property constitutes any point from the initial planning
stage through to the completion of the development property; and
(3) Nonessential infrastructure beyond the original terms of a contract,
either in duration of the contract or scope of work required under the original
terms of the contract, entered into between a developer or contractor and a local
government, unless the parties agree to a modification of one (1) or more specific
terms providing otherwise.
(c) A local government and developer or contractor may enter into a contract for
the funding, building, or development of nonessential infrastructure; provided, however,
that a local government must:
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(1) Not make changes or additions to the terms of the contract
unless the parties agree to the modification of one (1) or more specific
terms, as provided in subdivisions (a)(1), (b)(1), and (b)(3); and
(2) Upon inspection by an independent party, if it is determined
that a developer or contractor has completed all work required under the
contract with the local government, then the local government must
release the developer or contractor from its required bond no later than
thirty (30) days after such finding of completion by an independent
inspection, as provided in subdivision (a)(2).
SECTION 2. Tennessee Code Annotated, Title 7, Chapter 51, Part 9, is amended by
adding the following as a new section:
7-51-912.
(a) As used in this section, unless context otherwise requires, "local
government" means a county, municipality, or local governing body responsible for
reviewing a development application, development plan, or a site inspection submitted
by a developer for the purpose of creating or developing real property in a physical
location in this state under the jurisdiction of the respective county, municipality, or local
governing body.
(b) A local government shall accept an application for the review of a
development plan or a site inspection and issue an approval or a written report of
deficiencies no later than thirty (30) business days from the date the application is
received by the local government. A local government shall make all efforts to
consolidate all change requests pertaining to a single application into a single
deliverable document or set of documents when sending change requests to an
applicant.
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(c) If a local government issues a written report of deficiencies, then the local
government shall issue the requested permit in the initial application upon receipt of
documentation evidencing that each deficiency in such report has been satisfactorily
cured.
(d)
(1) A local government reviewing an application for the review of a
development plan or a site inspection shall not issue more than two (2) written
reports of deficiencies after receipt of an application. The local government shall
provide written justification of the denial of an application based upon specific
evidence of noncompliance with one (1) or more statutory or regulatory
requirements.
(2) Upon the issuance of a third or subsequent written report of
deficiencies, the local government shall remand to the applicant fifty percent
(50%) of the total amount of aggregate fees the applicant paid to the local
government during the application process.
SECTION 3. This act does not repeal or modify any contract, employment, property,
zoning, or permitting laws or ordinance, nor any administrative authority granted to an
administrative agency, nor any other applicable state, local, or federal laws.
SECTION 4. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to contracts entered into, renewed, or amended on or after that date.