RUTHERFORD COUNTY, TN - Gov. Bill Lee this week signed legislation co-sponsored by Rutherford County legislators allowing high-growth counties to levy a tax supporting school capital projects.

House Bill 2426/Senate Bill 2261 gives county legislative bodies in high-growth counties the ability to increase development fees and taxes under the County Powers Relief Act (CRPA) from $1.00 to up to $1.50 per square foot for both residential and commercial development.

“This accomplishment is the first major reform in 18 years to the County Powers Relief Act,” said bill co-sponsor State Rep. Tim Rudd, R-Murfreesboro. “We spent the last eight months negotiating with developers, builders and business leaders to find ways to pay for growth. The agreement is estimated to bring in up to $16 million a year for school construction. This is what can happen when we all work together. I thank all those involved for a historic agreement to help pay for growth.”

For a county to increase this development fee, it must have 20% growth between the 2010 and 2020 censuses or 9% growth over four years, determined by a special census. The increase must be approved by a two-thirds vote of the county legislative body in two consecutive meetings. The fee would be capped at 150,000 square feet, according to the legislation.

"The successful passage of this legislation reflects the dedication of high-growth Tennessee counties to our schools' growth and development," said co-sponsor State Sen. Shane Reeves, R-Murfreesboro. "This years-long, collaborative effort was made possible by community leaders who care about their community and are committed to the future of our children. I appreciate all the work that was done to make this a success.”

The fee, which can be paid upon the government issuing a certificate of occupancy, can increase by ten percent every four years if approved by a two-thirds vote of a county commission. The legislation will directly affect Rutherford, Montgomery, Maury, Trousdale and Sumner counties.

“Rutherford County asked our legislative delegation to help address costs associated with growth,” said co-sponsor State Rep. Robert Stevens, R-Smyrna. “After working the past few months with local leaders, stakeholders and other legislators, we were able to find a compromise that will generate millions of dollars of new revenue for Rutherford County to offset education capital expenses. This was a major effort, and I want to thank everyone who played a part in getting this legislation passed.”

Rutherford County is the fastest-growing county in Tennessee, with an increase of 6,419 people from 2022 to 2023, according to the U.S. Census Bureau. This dramatic growth generates tens of millions of dollars in new revenue each year, but the county has been unable to keep up with an increase in spending and government growth.

“Working together with other members of the General Assembly, our delegation was able to get important relief for Rutherford County from the previous law that had been in place since 2006,” said bill co-sponsor State Sen. Dawn White, R-Murfreesboro. “This new legislation will provide county leaders with an additional tool to help make growth pay for itself and to reduce the burden on property taxpayers. I’m grateful to my colleagues and the various stakeholders for working collaboratively to reach a productive solution that will benefit Rutherford County and its citizens.”

The legislation will substantially increase Rutherford County’s revenue generated from growth and will be used for school construction and debt service costs.

State Rep. Tim Hicks, R-Gray, carried the bill in the House.