Senate Bill 2237, also known as House Bill 2552, amends Tennessee Code Annotated 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 for submitted development applications within thirty business days. If they fail to do so, the application is automatically deemed approved. Additionally, local governments are limited to issuing only two written reports of deficiencies before a denial must occur, which requires them to return fifty percent of the fees paid by the developer if the application is denied.

The bill also introduces a new chapter, 7-70, which outlines definitions and prohibited conduct related to contracts between local governments and developers. It specifies that local governments cannot amend contracts without mutual written agreement and must release developers from required bonds within thirty days if an independent inspection confirms that all work has been completed. Furthermore, local governments are prohibited from requiring developers to fund infrastructure not included in their contracts, although they can still enter into agreements for such developments. The act is set to take effect on January 1, 2027.