A Tennessee POA asked to be state-regulated. The bill died
A Tennessee POA asked to be state-regulated. The bill died
2026-09-19 · Tennessee · Legislation · Did not pass
Tennessee's 114th General Assembly was asked to let a single property owners association hand its water and wastewater utility over to state regulation, at that association's own request, and declined. HB 2164 and SB 2534 were both parked on March 11, 2026 and died when the assembly ended.1
Community association legislation ordinarily moves in the opposite direction — associations resisting oversight, or owners seeking it over their boards' objection. A governing board asking the legislature to place one of its own operations under a state regulator is unusual enough to be worth the record.
What the bill would have done
The bill amended section 7-82-701(b)(4), which governs the jurisdiction of the Tennessee Board of Utility Regulation, by adding a new category of system:
“A utility system owned and operated by a nonprofit association that: (i) Was created in 1985; (ii) Is responsible for the governance and maintenance of a community that has at least five thousand (5,000) lots or units; (iii) Provides direct funding for some emergency services for the safety and protection of members of the association; (iv) Provides water and wastewater services for the exclusive use of the members of the association; and (v) Whose governing board adopted a resolution requesting the Tennessee board of utility regulation have jurisdiction over the association.”
Five cumulative criteria, one of them a specific year of creation and another a specific lot threshold. This is a private act in the form of a general one: the class is drawn so that essentially one association can enter it.
The fifth criterion is the one that makes the bill unusual. Jurisdiction would not have attached automatically. It would have attached only where the association's own board passed a resolution asking for it — opt-in regulation, requested from below.
Which association
The General Assembly's own abstract names it. The measure “allows the Tellico Village Property Owners Association's water and wastewater utility services to be placed under the jurisdiction of the Tennessee board of utility regulation.” Tellico Village is a large lakeside community in Loudon County in East Tennessee.2
HB 2164 was filed by Representative Russell and SB 2534 by Senator Tom Hatcher. The House bill saw a sponsor change and sponsors withdrawn on the same day, February 12, 2026 — the only sign in the record of any friction over it.
Why an association would want a regulator
A community association that owns its own water and wastewater system is operating a capital-intensive utility on a volunteer governance structure. The bill does not state the board's reasons and the legislative record contains no committee testimony, so what follows is what the regulatory difference consists of rather than an account of anyone's motive.
The Board of Utility Regulation supervises the financial condition of utility systems in Tennessee. Its regime brings reporting obligations, review of financial distress, and a route to rate adjustment that runs through a state body rather than through the association's own membership.
That last point is the substantive one. Outside such a regime, the money for a treatment-plant replacement or a main-line renewal comes from the association's own assessment machinery — the budget, reserve funding, or a special assessment. Part 7 of Title 66, Chapter 27 requires a two-thirds vote for certain special assessments, and a utility capital programme financed that way depends on the membership approving it.
A regulated utility recovers capital costs through rates set under a regulatory framework. The bill would have offered a route out of association politics for one category of spending, at the price of external supervision over it.
The drafting is the legal story
Tennessee's constitution constrains legislation directed at a single locality or entity, and drafters respond by writing general-looking criteria that one subject satisfies. Population brackets keyed to a census are the familiar version; this bill used a creation year, a lot count, an emergency-services funding characteristic and a service-exclusivity requirement to achieve the same result.
The consequence is that nothing in the enacted law of Tennessee would have changed for any other association. A second association wanting the same arrangement would have needed its own bill with its own criteria, because it would not have been created in 1985.
That is a live question for Tennessee, which has a number of large lake and resort communities whose associations own utility infrastructure. The 114th General Assembly was not asked to create a general opt-in route for them, and it did not create one.
How it ended
The Senate bill was reset on a final calendar on February 25, 2026, deferred on March 4, and assigned to the General Subcommittee of Senate Energy, Agriculture and Natural Resources on March 11, 2026. The House bill was taken off notice in the Business and Utilities Subcommittee of the Commerce Committee the same day.
No member of either chamber is recorded as voting against it, and no committee took a position on the merits. The 114th General Assembly adjourned on April 23, 2026 and both bills expired.
What to watch next
The association's utility continues to operate outside the Board of Utility Regulation's jurisdiction, governed by the association's own documents and by the general law applicable to a nonprofit corporation.
Two paths exist for a refiled measure in the 115th General Assembly, which convenes in January 2027: the same narrowly drawn criteria again, or a general opt-in provision open to any association-owned system meeting stated conditions. The second is a materially larger proposal and nothing in the record indicates it has been drafted.
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