Senate Bill 2237 amends Tennessee Code Annotated, Title 7, to establish new regulations for local governments regarding the review of development applications, plans, and site inspections. Under the new section 7-51-2204, local governments are required to approve or provide a written report of deficiencies within thirty business days of submission. If they fail to do so, the application is automatically deemed approved. Additionally, local governments are limited to issuing no more than two written reports of deficiencies before a denial must occur, which must be justified with specific evidence of noncompliance. If an application is denied, the developer is entitled to a refund of fifty percent of the fees paid during the review process.

The bill also introduces a new chapter, 7-70, which outlines definitions and prohibited conduct for local governments in relation to contracts with developers. It specifies that local governments cannot amend contracts without mutual written agreement and must release a contractor or developer from their required bond within thirty days if an independent inspection confirms that all work has been completed. Furthermore, local governments are prohibited from requiring developers to fund or contribute to infrastructure development not included in their contracts. The act is set to take effect on January 1, 2027.