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SB 1045

Real Property - As introduced, prohibits the state or a local or municipal government from requiring a builder or developer of real property to pay for the building or development of infrastructure that is nonessential to the development, maintenance, or growth of the builder's development property. - Amends TCA Title 5; Title 6; Title 7; Title 13; Title 54 and Title 66.

114th Regular Session (2025-2026)

Tennessee bill prohibits states and local governments from requiring developers to fund non-essential infrastructure, shifting costs from builders to public budgets.

Placed on Senate State and Local Government Committee calendar for 3/24/2026
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Bill Summary · SB 1045

Legislative bill overview

SB 1045 prohibits Tennessee state and local governments from requiring builders and developers to fund infrastructure improvements that aren't directly essential to their specific development project. The bill amends multiple sections of Tennessee code governing property, municipal governance, and utilities to establish this limitation on government-imposed developer fees.

Why is this important

This bill directly affects how development costs are allocated between private developers and public entities. Currently, governments often require developers to contribute to broader community infrastructure (roads, water systems, schools) as a condition of approval. This bill would shift more infrastructure costs to municipalities and the state, potentially affecting public budgets, tax rates, or service quality—while reducing development costs and potentially accelerating new construction.

Potential points of contention

  • Infrastructure funding gap: If developers aren't required to fund "nonessential" infrastructure, communities may face significant budget shortfalls for roads, utilities, and services that support new developments, raising questions about who pays and how municipalities fund growth
  • "Nonessential" definition ambiguity: The bill doesn't clearly define what constitutes infrastructure "nonessential to" a development, which could create legal disputes and inconsistent enforcement across jurisdictions
  • Affordable housing and equity concerns: Reduced developer fees might lower housing costs but could also reduce funding for affordable housing requirements and community improvements typically funded through impact fees, affecting low-income residents

Compiled from official sources — confirm details with the bill’s official record.

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