Tennessee legislation · 114th General Assembly
Tennessee HB794: AN ACT to amend Tennessee Code Annotated, Title 4; Title 5; Title 6; Title 7; Title 8; Title 12; Title 13; Title 29; Title 54; Title 64; Title 65; Title 68 and Title 69, relative to municipal utilities.
Status: Chaptered, May 27, 2026
Fiscal Summary NOT SIGNIFICANT Bill Summary ON MARCH 19, 2026, THE SENATE ADOPTED AMENDMENT #2 AND PASSED SENATE BILL 855, AS AMENDED. AMENDMENT #2 rewrites this bill to establish a process for a municipality that operates a sewerage system outside of its corporate boundaries and has imposed a moratorium on new sewer connections outside of its corporate boundaries for a period of five or more consecutive years (a "participating municipality") to extend sanitary sewer service or allow sewer connection only to property located within an adjacency area if the property owner or developer agrees to pay, or the municipality assesses, a housing surcharge. For purposes of the amendment, an "adjacency area" is the area outside the corporate limits of a participating municipality but contiguous to or adjacent to those limits and situated such that the participating municipality's provision of sewer service to that area could be reasonably construed under present law authorizing the Tennessee board of utility regulation to hear complaints based on a utility's failure to offer or extend service. Property outside the adjacency area is ineligible for sewerage service under this amendment. The housing surcharge is a fee or assessment for affordable housing within the corporate limits of the participating municipality as authorized by this amendment for sewer connection of properties located within the adjacency area. This amendment provides four methods of collecting the surcharge: collection from the property owner or developer; assessment against the property and permit payment over a period not to exceed five years, plus interest; allocation of increased property tax revenue based on the increased value of the property due to the development, pursuant to an interlocal agreement, and for a period not to exceed five years; and a hybrid-metho
What the bill says
From the amended text:
House Commerce 1 Amendment No. 2 to HB0794 Vaughan Signature of Sponsor AMEND S e n ate Bill No. 855 House Bill No. 794* by deleting all language after the enacting clause and substituting: SECTION 1. Tennessee Code Annotated, Title 7, Chapter 35, Part 4, is amended by adding the following as a new section: (a) Definitions. As used in this section, unless the context otherwise requires: (1) "Adjacency area" means the area outside the corporate limits of a participating municipality but contiguous to or adjacent to those limits and situated such that the participating municipality's provision of sewer service to that area could be reasonably construed pursuant to § 7-82-702(b)(1)(E)(i); provided, capacity to serve new customers is available; (2) "Affordable housing trust fund" means a separate fund established by a participating municipality into which surcharge proceeds are deposited and expended solely for affordable housing purposes within the participating municipality's corporate limits; (3) "Commercial development" means any multifamily residential structure that is part of a mixed-use or planned commercial development, or nonresidential building, site, or structure to be served by the participating municipality's sewerage system; (4) "Housing surcharge" means a fee or assessment collected for affordable housing within the corporate limits of the participating municipality as authorized by this section for sewer connection of properties located within the adjacency area; …