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Tennessee General Assembly· SB 26Signed by Governor.

Regional Authorities and Special Districts - As enacted, enacts the "Real Estate Infrastructure Development Act of 2025." - Amends TCA Title 7; Title 9; Title 12; Title 13; Title 66; Title 67 and Title 68. SB0026 has bee, the official text

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        Slate ef J ennesse,e

                            PUBLIC CHAPTER NO. 357

                                                      SENATE BILL NO. 26

                                                  By Pody, Johnson, Yarbro

                                             Substituted for: House Bill No. 636

              By Burkhart, McCalmon, Moon, Butler, Garringer, Reeves, Hardaway, Hemmer

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.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Title 7, Chapter 84, is amended by adding the
following as a new part:

          7-84-801. Short title.

                    This part is known and may be cited as the "Real Estate Infrastructure Development
          Act of 2025."

          7-84-802. Part definitions.

                    As used in this part, unless the context otherwise requires:

                              (1) "Assessed value" means value as assessed for municipal property tax
                    purposes;

                              (2) "Developer" means one (1) or more persons or entities identified as the
                    developer in the establishment resolution and as being responsible for the development
                    of a district, together with the successors and assignees of the person or entity;

                              (3) "Establishment resolution" means the resolution of the governing body,
                    adopted pursuant to this part, establishing a district;

                              (4) "Governing body" means the council, commission, board, or other body
                    exercising general legislative power in a host municipality;

                              (5) "Host municipality" means:

                                        (A) For a district the boundaries of which are not located entirely within
                              a single incorporated town or city that:

                                                   (i) Levies and directly administers the billing of ad valorem real
                                        property taxes, each county within which the· boundaries of the district
                                        are located; or •

                                                   (ii) Has authorized and entered into contracts, agreements, or
                                        other arrangements directing the billing, collection, and enforcement of
                                        the payment of special assessments levied under this part by an
                                        incorporated town or city as contemplated by this part and in the same
                                        manner in which such city or town is authorized to bill, collect, and
                                        enforce the payment of ad valorem property taxes under the applicable
                                        provisions of title 6 and any municipal charter, each county within which
                                        the boundaries of the district are located; and
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                                       (8) For districts the boundaries of which are located entirely within a
                             single incorporated town or city that:

                                                 (i) Levies and directly administers the billing of ad valorem real
                                       property taxes, such town or city; or

                                                 (ii) Has authorized and entered into contracts, agreements, or
                                       other arrangements directing the billing, collection, and enforcement of
                                       the payment of special assessments levied under this part by such
                                       town or city as contemplated by this part and in the same manner in
                                       which such city or town is authorized to bill, collect, and enforce the
                                       payment of ad valorem property taxes under the applicable provisions
                                       of title 6 and any municipal charter, such town or city;

                             (6) "Infrastructure" means:

                                       (A) The streets, roads, bridges, and sidewalks, and the water,
                             wastewater, natural gas, electric, telecommunications, parking, and storm
                             water facilities, required for the development of a district, and benefitting the
                              properties within the district, as identified in the establishment resolution,
                             whether within or without the boundaries of the district; and

                                       (8) The land within the boundaries of the district required to be
                              donated, dedicated, or otherwise made available to a governmental entity for
                              public purposes;

                              (7) "Infrastructure costs" means:

                                        (A) All costs that may be capitalized under generally accepted
                              accounting principles for purchasing, constructing, installing, and equipping
                              infrastructure;

                                        (8) The fees or costs imposed by a municipality or utility service
                              provider:

                                                 (i) Related to the construction or installation of infrastructure; or

                                                  (ii) As a condition to the delivery of utility services to properties
                                        within the district; and

                                        (C) The cost of any land required to be donated, dedicated, or
                              otherwise made available to a governmental entity for public purposes, which
                              land must be valued at either the developer's demonstrated cost or, if the
                              value of the land has subsequently been appraised, its appraised value,
                              whichever is higher;

                              (8) "Infrastructure development district" or "district":

                                        (A) Means the infrastructure development district created by an
                              establishment resolution; and

                                        (8) Does not include a development district created pursuant to the
                              Development District Act of 1965, compiled in title 13, chapter 14;

                              (9) "Municipality" means a county, incorporated city or town, or a metropolitan
                    government of this state; and

                              (10) "Owner" means the record owner in fee of a parcel within a district or the
                    owner's duly authorized representative.

           7-84-803. Construction with other laws.

                    This part is intended to afford an alternative method for the making of improvements
           by municipalities, the creation of special improvement districts for infrastructure development
           districts of the various municipalities, the levy of assessments and the issuance of bonds by
           municipalities, and does not deprive any municipality of the right to make improvements,
           create special improvement districts, levy assessments or other special taxes, or issue bonds
           under authority of any other law of this state, including chapters 32 and 33 of this title and
           parts 1-7 of this chapter; provided, that this part constitutes full authority for the making of
           improvements, creation of infrastructure development districts, levy of assessments, and

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         issuance of bonds under the Local Government Public Obligations Act of 1986, compiled in
         title 9, chapter 21, to the extent applicable, by such municipalities who choose to act under
         this part.

          7-84-804. Authority to establish and govern infrastructure development districts.

                   This part provides independent authority, separate and apart from chapters 32 and 33
         of this title, and parts 1-7 of this chapter, for the establishment and governance of an
          infrastructure development district, and constitutes an alternative method of establishing and
         governing such a district. This part does not affect the operation and effect of chapters 32
          and 33 of this title, and parts 1-7 of this chapter, which continue in full force and effect as
          separate and independent authority for the establishment and governance of a central
          business improvement or infrastructure development district; provided, however, that
          notwithstanding another law to the contrary, a central business improvement must not
          overlap any area within an infrastructure development district created by a municipality
          pursuant to this part.

          7-84-805. Municipal powers.

                   This part does not affect or impair the control and jurisdiction that a municipality has
          over all property within its boundaries. The powers and authority granted by this part are in
          addition to all other powers and authority now residing with, or later granted to, municipalities
          in this state, and all powers granted by this part are subject to the general control and
          jurisdiction of such municipalities.

          7-84-806. Liberal construction.

                    This part, being necessary to secure and preserve the public health, safety,
          convenience, and welfare, must be liberally construed to effectuate its purposes.

          7-84-807. Conflicts of laws.

                    In the event of conflict between this part and another law of this state, this part
          governs.

          7-84-808. Authority of municipality to create infrastructure development districts.

                    The governing body of a host municipality of the state may create, by resolution, one
          (1) or more infrastructure development districts located in whole or part within the boundaries
          of such mun.icipality in the manner provided in this part. An infrastructure development district
          must be approved by the governing body of each host municipality.

          7-84-809. initiation of process to establish district.

                    (a) The establishment of a district may be initiated by a petition filed in the office of
          the clerk or other officers responsible for keeping the records of the governing body of each
          host municipality required to approve the establish~ent of such district, signed by:

                              (1) The developer; and

                              (2) The owners of each parcel of property proposed to be included in the
                    district.

                    (b) After the filing of the petition, a petitioning owner is not permitted to withdraw the
          petitioner's name from the petition. A petition with the requisite signatures is not void on
          account of formal or insubstan\ial defects. The governing body of each host municipality, at
          any time, may permit the petition to be amended to correct any errors in the description of
          the territory, or in any other particular. Similar petitions for the organization of the same
          district may· be filed, and together must be regarded as one (1) petition with the original. All
          such petitions filed prior to the hearing on the first petition filed must be considered by the
          governing body of each of the host municipalities in the same manner as if filed with the first
          petition placed on file.

                    (c) The initiating petition must set forth:

                              (1) The name of the proposed district, which must include the words
                    "Infrastructure Development District";

                              (2) An identification of each host municipality;

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                            . (3) A description of the boundaries of the district or the territory to be included
                    in the district, identified with sufficient certainty to enable owners to determine
                    whether their property lies within the district; provided, that the boundaries must not
                    overlap with the boundaries of another district established pursuant to this part;

                              (4) A list of each parcel in the district, identified by parcel identification number
                    of the county assessor, with the owner of 'each parcel and the address of such owner
                    as shown on the property records of the county assessor;

                              (5) The name and address of the developer;

                              (6) A description of the infrastructure required to develop the district;

                              (7) A description of the estimated infrastructure costs and an estimate of the
                    cost of the entire development in the district upon completion;

                            , (8) The proposed amount of levy of the special assessment to be imposed;

                              (9) A statement that the petition is filed pursuant to the terms of this part; and

                              (10) A request that a district be established pursuant to this part and that the
                    administration of the district be governed by this part.

          7-84-810. District area.

                    (a) An infrastructure development district established pursuant to this part created by
          one (1) or more host municipalities may embrace two (2) or more separate property areas.
          The jurisdiction of a host municipality to make and provide, finance, and levy assessments
          for infrastructure costs within a district is not impaired by a lack of commonness, unity, or
          singleness of the location, purpose, or character of the infrastructure, or by the fact that any
          one (1) or more of the properties included in the district are subsequently determined not to
          be benefited by such infrastructure, or by a particular portion of the infrastructure, and is not
          assessed for such infrastructure costs.

                    (b) The creation or existence of a district is not subject to challenge if any of the
          projections of capital costs or other matters contained in the petition are not achieved.

          7-84-811. Public hearing requirement.

                    (a) Upon the filing of an initiating petition purporting to contain the requisite number of
          signatures, each governing body of a host municipality required to receive filing of such
          petition must order a public hearing to determine whether the infrastructure development
          district will be established.

                    (b) Notwithstanding subsection (a), when a district must be approved by two (2) or
          more host municipalities, the governing bodies may hold one (1) or more joint public
          hearings.

                    (c) A hearing held pursuant to this section must be held not less than thirty (30) days,
          nor more than forty-five (45) days, following the filing of the initiating petition with the clerk or
          secretary of the applicable governing body or bodies.

           7-84-812. Notice.

                    (a) Notice of the public hearing must be provided to the public by posting the notice in
          a location where a member of the community may become aware of such notice as well as
          on a website maintained by the host municipality, if the host municipality has a website. The
          notice must provide a summary detailing those facts required to be included in the initiating
          petition, but is not required to set out in full the proposed establishment resolution.

                    (b) The, notice must be posted not less than fourteen (14) days before the governing
          body convenes for the public hearing. The notice must also be provided by mail to each
          owner of real property within the proposed district at the address of each such owner as
          shown in the records of the county assessor or county trustee for providing tax notices.

           7~84-813. Public hearing procedure.

                     (a)(1) All persons whose property may be affected by such improvement may appear
                    at the public hearing in person, by attorney, or by petition and protest against the
                    creation of the infrastructure development district. The governing body shall consider

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                   the objections and protests, if any, and may change the district boundaries or modify
                   the proposal in such manner as may be deemed advisable by the governing body.

                             (2) At the conclusion of the public hearing, each applicable governing body
                   shall adopt, adopt as amended, or reject the organization of the proposed
                   infrastructure development district by the adoption or rejection of a resolution setting
                   out the district. In host municipalities requiring two (2) or more readings before
                   passage of a resolution due to local charter or ordinance requirements, all required
                   readings must be held prior to the public hearing, except the final reading, so that the
                   adoption may take place at the conclusion of the public hearing.

                   (b) A person who fails to protest, who fails to appear at the public hearing to protest,
         or, having filed a protest, who withdraws the protest, is deemed to have waived any objection
         to the creation of the district, the making of the improvements, and the inclusion of the
          person's property in the district.

                   (c) An infrastructure development district may only be established by resolution
          passed by a majority vote of the members of the governing body present and voting upon
          conclusion of the public hearing procedure as set forth in this section.

                   (d) In th~ event two (2) or more host municipalities are required to approve the
          establishment of an infrastructure development district, and the establishment resolutions
          adopted by the governing bodies of such municipalities vary in any material respect, then the
          establishment resolutions do not go into effect until one (1) or more of the governing bodies
          adopts amendatory resolutions sufficient to cause the establishment resolutions to be
          consistent in all material respects.

          7-84-814. Establishment resolutions.

                   The establishment resolution adopted by the governing body of the municipality must
          include:

                             (1) The name of the district as set forth in the original or amended initiating
                    petition;

                             (2) An identification of each host municipality;

                             (3) A description of the boundaries of the district as set out in the original or
                    amended initiating petition;

                             (4) A statement that the properties in the area established by the resolution
                    must be subject to the special assessment; •

                             (5) The name and address of the developer;

                             (6) A statement of the infrastructure and infrastructure costs authorized to be
                   funded with special assessment revenues within the district;

                             (7) The rate of levy of the special assessment to be imposed;

                             (8) The time and manner in which special assessments authorized by the
                    resolution must be paid;

                             (9) The portion of special assessments to be retained by the host municipality
                  • for the payment of administrative expenses, as described in § 7-84-817; and

                              (10) A statement that the district is established pursuant to this part and that
                  ' the administration of such district is governed by this part.

          7-84-815. Bonds, notes, and other obligations.

                    {a) A host municipality has the authority and power to borrow money and issue
          bonds, notes, or other obligations for the purpose of paying infrastructure costs identified in
          the establishment resolution, reimbursing the developer for the prior payment of
          infrastructure costs, or refunding or refinancing such bonds, notes, or obligations, under and
          pursuant to all the procedures and requirements set forth in the Local Government Public
          Obligations Act of 1986, compiled in title 9, chapter 21.

                    (b) A host municipality is further authorized to:

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               (1) Pledge to the payment of the principal, premium, and interest on the
      bonds, notes, or other obligations, and use for the payment of the bonds, notes, or
      other obligations the special assessment revenues authorized to be collected by the
      host municipality pursuant to this part in the same manner as revenues may be
      pledged pursuant to the Local Government Public Obligations Act of 1986. For
      purposes of this subdivision (b)(1), "revenues" has the same meaning as defined in §
      9-21-105, and includes the special assessment revenues described in this part;

               (2) Delegate to an industrial development corporation incorporated by the host
      municipality or another host municipality for the district the authority to issue the
      revenue bonds, in which case such host municipality must enter into an agreement
      with the industrial development corporation pursuant to which the host municipality
      agrees to promptly pay to the industrial development corporation the assessments,
      including any interest on the assessments, as collected. The assessments must be
      held in trust by the host municipality for the benefit of the industrial development
      corporation when received. The host municipality may direct any property owner that
      is required to pay assessments to make the payments directly to an industrial
      development corporation or its assignee. If an industrial development corporation
      issues such bonds, then the assessments, and any interest collected on the
      assessments, constitutes "revenues" as defined in § 7-53-101, and the infrastructure
      financed thereby, whether transferred to the industrial development corporation on
      behalf of the host municipality, to the host municipality itself, or to another
      governmental entity or provider of public utilities, constitutes a project, as that term is
      defined in§ 7-53-101; and

               (3) Delegate to a public building authority the authority to issue the revenue
      bonds, in which case the host municipality must enter into an agreement with the
      public building authority pursuant to which the host municipality agrees to promptly
      pay to the public building authority the assessments, including any interest on the
      assessments, collected. The assessments must be held in trust by the host
      municipality for the benefit of the public building authority when received. The host
      municipality may direct a property owner that is required to pay an assessment to
      make the payment directly to a public building authority or its assignee. If a public
      building authority issues such bonds, then the assessments, and any interest
      collected on the assessments, constitute "revenues" as defined in § 12-10-103, and
      public facilities and related expenses described in this part, whether transferred to the
      public building authority on behalf of the host municipality, to the host municipality
      itself, or to another governmental entity or provider of public utilities constitutes a
      project, as that term is defined in§ 12-10-103.

               (c) A host municipality, industrial development corporation, or public building
      authority, as the case may be, may:

               (1) Refund or refinance or otherwise cause the refunding or refinancing of any
      bonds or other obligations issued pursuant to this section in the manner provided in
      the Local Government Public Obligations Act of 1986, compiled in title 9, chapter 21,
      the Public Building Authorities Act of 1971, compiled in title 12, chapter 10, or chapter
      53 of this title, as applicable. Without limiting this subdivision (c)(1 ), a host
      municipality may refund or refinance any bonds or loan agreements secured by the
      full faith and credit of the municipality and revenues received from assessments with
      bonds or a loan agreement secured only by such revenues. Upon any such
      refunding, the amount of assessment payments may be adjusted pursuant to policies
      approved by the host municipality; provided, that the assessment rate must not
      exceed that set forth in the establishment resolution; and

               (2) Make the proceeds of bonds issued pursuant to this section, except any
      bonds secured by the full faith and credit and taxing power of a municipality, available
      to a developer pursuant to one (1) or more loan agreements, and to assign or pledge
      the host municipality's rights under the loan agreement to the holders of the bonds.

               (d) The maximum term of any bonds, notes, or other debt obligations issued pursuant
      to this section to fund the costs of infrastructure, including any refinancing bonds, must not
      exceed thirty (30) years from the first issuance of bonds, notes, or other debt obligations for
      the purpose of funding infrastructure.

      .  •  :  '

      7-84-816. No limitation on municipal powers.

               This part does not limit the powers and authority of the host municipality, this state, or
      a political 'subdivision of this state.

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          7-84-817. Special assessments.

                   (a) Upon the filing of a petition in the manner required by§ 7-84-809 and the adoption
         of an establishment resolution that satisfies§ 7-84-814, each host municipality is authorized
         to levy special assessments against all properties located within that portion of the
          infrastructure development district lying within the boundaries of such host municipality.
         When a portion of an infrastructure development district lies within the boundaries of more
         than one (1) host municipality, only one (1) of the host municipalities may levy special
          assessments in the area, and the identification of the host municipality responsible for
          levying assessments for the area must be identified in the establishing resolution. The
          proceeds of the special assessments must be applied to the cost of all infrastructure costs
          and expenses of making public improvements within the district. Such costs and expenses
          may include:

                             (1) Infrastructure costs;

                             (2) Impact fees;

                             (3) Administration expenses required in order to comply with the terms of this
                    part, including costs incurred to establish the district, abstracts and other title costs,
                    costs incurred by the host municipality in order to provide for the billing, collection,
                    and enforcement of special assessments, and the reimbursement of the developer or
                    host municipalities for the prior payment of such costs; and

                              (4) The payment of the principal, premium, and interest on any bonds, notes,
                    or other debt obligations issued pursuant to this part, and the funding of necessary
                    reserves for debt service, capitalized interest, and costs of issuance related to any
                    such bonds, notes, or other debt obligations issued.

                  • (b) Any special assessment proceeds in excess of the amounts needed under
          subsection (a) must be applied to the defeasance or prepayment of any bonds, notes, or
          other obligations issued as provided in this part.

                    (c)(1) Special assessments must be levied on the basis of and in the amount set forth
                    in the establishment resolution. The governing body shall determine the total costs
                    and expenses to be paid from the special assessments, and apportion such costs
                    and expenses upon the various properties located within the district in accordance
                    with the benefits conferred upon the various properties.

                              (2) Special assessments must fairly reflect the benefit received by a lot or
                    parcel. In determining the benefits to each lot or parcel of property within the district,
                    the governing body may consider any of the following factors:

                                        (A) Frontage;

                                        (B) Area;

                                        (C) Acreage;

                                        (D) The proportion that the assessed value of each lot or parcel bears
                              to the whole assessed value of all properties within the district; or

                                        (E) A combination of such factors.

                              (3) The fact that assessments may be spread uniformly over a large area
                    within the district is not conclusive that such assessment was arbitrarily made.

                    (d) Special assessments must be imposed and.collected annually.

                    (e) If special assessment revenue bonds are issued, the minimum ratio of the
          appraised value of the property as developed assessed to the amount of the bond issue is
          two to one (2: 1).

                    (f) Notwithstanding this part to the contrary, an establishment resolution may provide
          that a total of up to five percent (5%) of special assessments be set aside for administrative
          expenses, including expenses incurr~d by the host municipality and the officers of the
          municipality, including the assessor of property, trustee, or other tax collecting official, in
          administering the collection and allocation of special assessments, including a reasonable
          allocation of overhead expenses.

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          7-84-818. Government-owned property.

                   Notwithstanding § 7-84-718, a special assessment must not be levied on
         government-owned property without the approval of the governing body of the applicable
         governmental entity.

          7-84-819. Assessment roll.

                   After all assessments have been determined, the host municipality must prepare an
         assessment roll that shows the location of the property and the owner of the property as
          shown in the records of the assessor and the amount of the assessment. The assessment
          roll must also disclose future annual payments. The assessment roll must be updated
          annually and whenever a parcel within the district is subdivided. The host municipality may
          include the projected cost of maintaining the assessment roll in the special assessment.

          7-84-820. Administration of assessments.

                   (a) The governing body of a host municipality is authorized to adopt policies and
          procedures that the governing body deems appropriate to administer assessments imposed
          under this part, including policies relating to the rate and methodology governing the
          implementation of the assessment. The policies and procedures may also address the
          reapportionment of assessments upon the request of property owners, reallocation of
          assessments upon subdivision of property, credits against assessment payments based
          upon other available funds, including earnings on reserve funds, maintenance of an
          assessment roll, and procedures for the prepayment of assessments. The host municipality
          must provide for full disclosure of an assessment and may administer penalties for failure to
          conform to the adopted policies and procedures, as well as agreed-upon standards.

                    (b) A host municipality may levy a maximum assessment under this part based upon
          the estimated costs of the infrastructure and other permitted costs being assessed, and, in
          such case, the amount of the assessment must be reduced by the host municipality once the
          actual costs are established by the host municipality. The host municipality may provide that
          such assessments may become effective at different periods of time to take into account
          when the costs being assessed will be incurred. The governing body of the host municipality
          may also provide that assessments must only be effective upon any issuance of bonds,
          notes, or other obligations imposed or incurred pursuant to this part.

                    (c) As long as a district remains in existence, the host municipality must maintain a
          record of the general description of the boundaries of such district and the rate of
          assessment for properties within such district. The record must be made publicly available in
          substantialiy the same manner as ad valorem property tax rates.

                    (d) Notwithstanding the fee payable to the host municipality, the host municipality
          may contract with outside professional administrators, and such costs may be included in the
          assessments.

          7-84-821. Prepayment of assessments.

                    (a) Unless otherwise provided, any assessment may be voluntarily prepaid by the
          owner of the land assessed. When a prepayment is made, the amount prepaid must be
          applied first to the interest until the first following date on which principal may be paid under
          the bond, and then to the principal.

                    (b) Alternatively, a municipality may require that prepayment must be applied first to
          accrued interest, and then to the difference between interest that will accrue from the date of
          prepayment until the net principal payment of the bonds, and the rate of interest at which the
          principal is paid may be invested to earn interest from the date of prepayment until the
          principal payment date, with any remaining balance to be applied to the principal.

          7-84-822. Liens.

                    (a) An assessment, any interest accruing on the assessment, and the costs of
          collection of the assessment constitutes a lien on and against the property upon which the
          assessment is levied as of the effective date of the resolution levying the assessment. The
          lien is superior to a lien of any trust deed, mortgage, mechanic's or material supplier's lien, or
          other encumbrance, except a lien of the state, county, or municipality for taxes.

                    (b) Notwithstanding this part to the contrary, amounts collected by the host
          municipality must not be allocated to the payment of a special assessment by an owner in
          the district until all taxes, penalties, and interest relating to real property taxes imposed by

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      any governmental entity with the power of taxation, including municipalities and special
      school districts, have been paid in full.

               (c) The host municipality is authorized to allocate any payment received by an owner
      that is designated to pay special assessments to the payment of taxes, penalties, and
      interest until such amounts are paid in full. Otherwise, a host municipality shall collect and
      enforce special assessments in a district in the same manner as the collection and
      enforcement of real property taxes.

      7-84-822. Delinquent assessments.

               If any assessment is or becomes delinquent and the property subject to the
      delinquency has been or is to be sold to the host municipality for the delinquency,
      redemption of such property is permitted upon payment, not later than one (1) year after the
      date of sale, of the full amount due, plus interest, any taxes paid by the host municipality, and
      accrued costs and redemption fees as may be prescribed by resolution of the host
      municipality, unless, in the judgment of the governing body of the municipality, the interest of
      the host municipality is served by accepting a lesser sum in settlement for the delinquency.

      7-84-823. Interest and penalties.

               In case of failure to pay an assessment or installment provided for under this part on
      or before the date prescribed by the governing body for such payment, there is added to the
      assessment both interest of one percent (1%) per month and a penalty of one percent (1%)
      per month of the amount of such assessment or installment.

      7-84-824. No operating authority - Compliance with laws.

               This part does not authorize, in any manner, the developer or an owner to operate
      infrastructure, and the governmental or private entities authorized tb provide any utility
      service to an area in a district to retain the right to provide such service after the creation of a
      district. A development agreement entered into pursuant to this part between a developer
      and the host municipality may require the dedication or transfer of all infrastructure by the
      developer or owner to the appropriate governmental or private entity that provides the
      applicable service, and each such governmental or private entity is authorized to be a party
      to the development agreement. All infrastructure must be constructed in a district in
      compliance with all applicable laws of the applicable governmental entity.

      7-84-825. Joint action amongst host municipalities.

               In the case of a district that has two (2) or more host municipalities, the host
      municipalities may enter into agreements between or among the host municipalities, and
      take collective or cooperative action, as may be required or appropriate to effectuate this
      part.

      7-84-826. Dissolution of districts.

               Each district established pursuant to this part must be dissolved by the governing
      bodies of the host municipality, no later than thirty (30) years from the date the district is
      established, or if earlier, immediately upon:

               (1) Written petition filed by the owners of either seventy-five percent (75%) of
      the assessed value of the property in the district, based on the most recent certified
      city property tax rolls, or fifty percent (50%) of the owners of record within the district;
      or

               (2) The payment and discharge of all outstanding bonds, notes, or other
      obligations payable solely from the special assessment revenues levied on the
      property within the district; provided, that dissolution must not occur prior to the
      payment in full and discharge of such debt obligations.

      7-84-827. Audit.

      (a) All books of accounts and financial records of the district are subject to annual

      audit by the comptroller of the treasury or the comptroller's designee. The host municipality

      shall pay for the cost of any audit.     ••

              .(b) The comptroller of the treasury shall ensure .that audits are· prepared in
      accordance with generally accepted governmental auditing standards and determine if the
      audits meet minimum audit standards prescribed by the comptroller of the treasury. An audit

                                            9
SB26
          must not be accepted as meeting the requirements of this section until approved by the
          comptroller of the treasury.
                    (c) All audits must be completed as soon as practicable after the end of the fiscal year
          of the host municipality. One (1) copy of each audit must be furnished to each member of the
          governing body and the comptroller of the treasury.
          SECTION 2. Tennessee Code Annotated, Section 7-84-720, is amended by adding the

following to the end of the section:
          Notwithstanding the fee payable to the host municipality, the host municipality may contract
          with an outside professional administrator and such cost may be included in the assessment.
          SECTION 3. The headings in this act are for reference purposes only and do not constitute a

part of the law enacted by this act. However, the Tennessee Code Commission is requested to
include the headings in any compilation or publication containing this act.

          SECTION 4. If any provision of this act or the application of any provision of this act to any
person or circumstance is held invalid, the invalidity does not affect other provisions or applications
of the act that can be given effect without the invalid provision or application, and to that end, the
provisions of this act are severable.

          SECTION 5. This act takes effect upon becoming a law, the public welfare requiring it.

                                                                 10
         SENATE BILL NO. 26

PASSED:  April 17, 2025

         n, ..... ~ I
                        I\..
                         ~~~,,..c.....,.._RA.\N\D..'_t___________ _

                         SPEAKER OF THE SENATE

                         CAMERON--SEXTON,SPEAKER

                         HOUSE OF REPRESENTATIVES

~ ~ APPROVED this                          2025
         day of

         - ~ • .

                       BILL LEE, GOVERNOR
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