A hot water dispensing system comprises a one-piece plastic tank having a main heating chamber, an expansion chamber, and an air collection chamber. The air collection chamber is disposed generally below the expansion chamber and alongside the main heating chamber. The main heating chamber is in fluid communication with the expansion chamber and the air collection chamber. The hot water dispensing system also includes a temperature control system having a heating element, a metal temperature sensing bracket, and a thermostat. The heating element is disposed within the plastic tank and connected to a metal temperature sensing bracket disposed outside the tank. The excellent conductive properties of a metal sheath that connects the metal temperature sensing bracket to the heating element allow the metal temperature sensing bracket to simulate changes in the temperature of water in the tank. The thermostat is mounted to the metal temperature sensing bracket and measures a temperature of the metal temperature sensing bracket and activates or deactivates a heating element in response to the measured temperature of the metal temperature sensing bracket.