Community development fees are about to change in The Volunteer State.
Legislation passed and signed into law last year, HB 375/SB 988, will go into effect on July 1 — and local governments need to act fast to get ready for these widespread new requirements.
Towns and cities now have a matter of months to prepare for the new documentation, improved transparency, and annual audits at the heart of these rules.
But getting ready for compliance can present a big problem: Many municipalities simply aren’t set up for this level of proof.
Fortunately, the right municipal government software can help towns and cities of all sizes more easily follow these new laws for Tennessee development fees.
What the New Law Requires
HB 375 mandates that local governments must maintain documentation for all development-related fees over $250. That means, starting this summer, every permit, inspection, or other related government service that exceeds that dollar amount will need to be accounted for.
Specifically, communities are required to document a justification for why this fee exceeds $250 — and to prove the “cost basis” showing the fee is in line with the actual cost of providing this service.
The documentation will need to be:
- Maintained on file
- Publicly accessible
- Subject to an annual audit by the Comptroller
Why This Law Matters for Municipal Operations
Tennessee development fees are now under a new level of scrutiny from auditors, developers, and citizens. Towns of all sizes are tasked with boosting transparency and public trust as the changes take effect.
The risks of noncompliance are serious:
- Audit findings
- Legal challenges
- Public trust issues
Outdated processes and legacy software can make compliance harder than it needs to be — and all too often, that means municipalities will need to add more manual reporting to their busy workloads.
Community development workflows that are stuck in the past can make it difficult to tie fees to real staff time and effort, especially if records are scattered across departments.
Inconsistent workflows between building, planning, and inspections can also make it hard to follow the new state laws.
Added up, these problems can leave a municipality exposed, with no centralized audit trail and little proof of a justifiable “cost basis” for these fees.
How Cloudpermit Helps Municipalities Prepare
Tennessee development fees are changing soon, and municipalities only have a matter of months to get ready.
Fortunately, the right software can make it easy to adapt to the new law — without requiring more staff time spent on manual reporting.
Cloudpermit’s inspections and permit tracking software offers the features and tools that communities will need to streamline compliance, including:
- Centralized Digital Records: All permits, inspections, and fees are tied to a single property records database, with clear, searchable documentation for audits.
- Standardized, Configurable Workflows: Consistent processes across departments make it easier to demonstrate how fees relate to the work performed.
- Time-Stamped Audit Trails: Every action is logged automatically, giving municipalities defensible records for justification and cost basis.
- Built-In Reporting: Generate documentation and summaries in minutes, and support audit requests without scrambling.
Compliance Is Easier with the Right Tools
The new rules for Tennessee development fees reward preparedness and transparency.
The way communities provide and keep up with development-related services, such as permits, planning reviews, and inspections, will make or break their transition to this new era of documentation and audits.
If your current way of getting things done is outdated, it’s time to make a change — and you only have a matter of months to get it done.
Fortunately, Cloudpermit’s modern software can make all the difference, giving municipalities powerful tools and simplified reporting to more easily document fees.
The right software doesn’t just help with compliance — it protects revenue and staff time. Modernizing now avoids rushed fixes later, after it’s too late.
Find out how Cloudpermit can help your municipality get ready for Tennessee’s new rules by booking a demo with us today.
