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~tate of ~ennessee
PUBLIC CHAPTER NO. 876
HOUSE BILL NO. 803
By Representatives Grills, White, Tim Hicks, Greg Martin, Williams, Warner, Davis
Substituted for: Senate Bill No. 564
By Senators Pody, Gardenhire, Johnson, Hensley, Bowling
AN ACT to amend Tennessee Code Annotated, Title 7; Title 8; Title 9; Title 62, Chapter
2; Title 65; Title 68, Chapter 221 and Title 69, relative to utilities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 68, Chapter 221, Part 1, is amended by
adding the following as new sections:
68-221-109. Expiration of approved engineering plans - Extensions.
(a) This section applies to engineering reports, design documents, plans, and
specifications approved for:
(1) Sewage works construction projects under title 68, chapter 221, part
2; and
(2) Wastewater facilities requiring plan approvals associated with permits
under title 69, chapter 3, for decentralized systems using land application.
(b) Approval of engineering plans and specifications by the commissioner expires
twelve (12) months from the date of issuance unless:
(1) Construction has commenced; or
(2) The owner obtained an extension under subsection (c).
(c) Upon receipt of a written request prior to expiration of an existing approval,
the department may grant extensions in increments not exceeding twelve (12) months,
up to a cumulative maximum of sixty (60) months from the original approval date. The
department may condition extensions on confirmation that no material revisions, as
determined by the department by rule, were made to the original submittal.
(d) If material changes in design, capacity, treatment process, or site conditions
occur, the owner shall submit revised plans, engineering reports, and specifications to
the department for review and approval.
(e) The department shall maintain an electronic tracking system for plan
approvals and extensions.
(f) Construction of a decentralized wastewater system using land application
shall be completed within sixty (60) months of the initial engineering plan approval. If
construction is not completed within sixty (60) months, the owner shall submit new plans,
engineering reports, and specifications for review and approval. No decentralized
wastewater system using land application may commence operation until construction
has been completed in accordance with approved plans.
68-221-110. Design and construction criteria for decentralized wastewater
treatment systems using land application.
No later than July 31, 2027, the commissioner shall promulgate rules applicable
to the design and construction of decentralized wastewater treatment systems using
land application. These rules apply to permits issued pursuant to § 69-3-108(b)(2) and
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(c) and plan approvals issued pursuant to § 68-221-102 for decentralized wastewater
treatment systems using land application. At a minimum, the rules must define material
revisions for purposes of§ 68-221-109(c), address proper siting, soil characterization,
soil mapping, hydraulic loading, redundancy and reserve area requirements, and long-
term performance standards to ensure adequate protection of surface waters,
groundwater, and public health.
SECTION 2. Tennessee Code Annotated, Title 68, Chapter 221, is amended by adding
the following as a new part:
68-221-1401.
As used in this part:
(1) "Department" means the department of environment and
conservation;
(2) "Treatment works" means any devices and systems used in the
storage, treatment, recycling, and reclamation of sewage or industrial wastes of a
liquid nature to restore and maintain the chemical, physical, and biological
integrity of the state's waters, or any devices and systems used in the treatment,
collection, and land application of wastewater, including intercepting sewers,
sewage collection systems, wastewater facilities, wastewater transmission lines,
pumping, power, and other equipment, and their appurtenances, extensions,
improvements, remodeling, additions, and alterations thereof; elements essential
to provide a reliable recycled supply, such as standby treatment units and clear
well facilities; or other such works; and
(3) "Utility" means:
(A) The wastewater system of a county, metropolitan government,
or municipality;
(B) A treatment authority created pursuant to:
(i) The Water and Wastewater Treatment Authority Act,
compiled in part 6 of this chapter;
(ii) The Regional Water and Wastewater Treatment
Authority Act, compiled in part 13 of this chapter; or
(iii) Another public or private act of the general assembly
that operates a wastewater facility; or
(C) The wastewater service system of an energy or utility authority
created pursuant to the Municipal Energy Authority Act, compiled in title
7, chapter 36, or a private act of the general assembly.
68-221-1402.
(a) If the developer of a subdivision or other neighborhood proposes to construct
a treatment works for use by the subdivision or neighborhood, and the design and
construction of the treatment works has been approved by the department, then the
developer shall submit an application to the utility serving the area in which the system is
located requesting that the utility:
(1) Agree to assume operational responsibility and ownership of the
treatment works in writing within thirty (30) days of the receipt of the application
by the utility and approve the engineered plans for the treatment works within
ninety (90) days; or
(2)
(A) Refuse to own and operate the treatment works. If the utility
refuses to own and operate the treatment works pursuant to this
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subdivision (a)(2), then the utility shall provide written notice of the refusal
to:
(i) The developer within thirty (30) days of receipt of the
application. A utility's failure to respond to the application within
thirty (30) days of receipt is a refusal to own or operate the
treatment works; and
(ii) The Tennessee board of utility regulation, created by §
7-82-701, within seven (7) business days of the refusal. Upon
providing notice pursuant to this subdivision (a)(2)(A)(ii), the utility
is released from any future operational responsibility and
ownership rights for the treatment works, unless the utility
subsequently chooses to assume operational responsibilities and
ownership rights pursuant to subsection (c).
(B) A utility that refuses to own and operate a treatment works
pursuant to this subdivision (a)(2) shall not restrict the availability of
services provided by the utility based on the utility's refusal to own or
operate the treatment works.
(b) If a developer receives written notice of the utility's refusal to own and operate
the treatment works under subdivision (a)(2)(A)(i), or if the utility fails to respond to the
application within thirty (30) days of receipt, then the developer may contract with
another utility for ownership and operation of the treatment works.
(c) Notwithstanding subsection (b), or any contract entered into between the
developer and another utility, the utility to which the initial application for approval was
submitted may negotiate with the current owner and operator of the treatment works to
allow the utility to assume operational responsibilities and ownership rights to the
treatment works for up to two (2) years after the date that the utility received the
application under subsection (a).
68-221-1403.
Upon at least fifty percent (50%) of the units within a development being issued a
certificate of use and occupancy:
(1) The local government for the jurisdiction where the treatment works is
or will be installed shall require the developer to obtain and file a reasonable
performance bond for the first two (2) years that the treatment works is in
operation, in an amount to be determined by such local government when the
developer submits an application under § 68-221-1402(a). The amount of the
bond required under this subdivision (1) must be one hundred percent (100%) of
the total replacement cost; and
(2) The local government for the jurisdiction where the treatment works is
installed shall require the operator of the treatment works to obtain and file a
reasonable performance bond for the third through tenth years that the treatment
works is in operation. The amount of the bond required under this subdivision (2)
must be fifty percent (50%) of the total replacement cost.
68-221-1404.
(a) All treatment works constructed under this part must:
(1) Comply with applicable federal and state laws, rules, and regulations;
and
(2) Be systems approved by the department and installed in accordance
with approved design and construction plans.
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(b) Prior to the transfer of ownership or operation of a treatment works, a utility
and developers must provide the department with documentation of regulatory
compliance and operational readiness, as specified by the department.
(c) In addition to the requirements of subsections (a) and (b), prior to the transfer
of ownership or operation of a treatment works, a utility must, as determined by the
department:
(1) Comply with all state and federal regulatory licenses and certificates in
order to perform the function of the utility;
(2) Be current on all required filings, fees, and bonds related to the
treatment works; and
(3) Demonstrate compliance with environmental and operational
standards related to the function of the utility.
(d) A developer shall demonstrate that the treatment works have the ability to
meet or exceed the greater of the following at the time of permit approval:
(1) The department's published minimum treatment limit standards; or
(2) The actual treatment limits being delivered by a similarly situated
system in the same operating utility.
68-221-1405.
This part does not apply in counties having a population of not less than three
hundred sixty-six thousand two hundred (366,200) nor more than three hundred sixty-six
thousand three hundred (366,300), according to the 2020 federal census or any
subsequent federal census.
SECTION 3. Tennessee Code Annotated, Section 69-3-108, is amended by adding the
following as a new, appropriately designated subsection:
(1) The commissioner shall not issue a new permit, or modify an existing permit,
to expand capacity or scope of decentralized wastewater systems using land application,
if the commissioner determines the applicant is not substantially in compliance with an
order issued under§ 69-3-109, § 69-3-115, or§ 69-3-116.
(2) The commissioner may determine an applicant is not in compliance with an
order, for purposes of subdivision ( )(1 ), if:
(A) An order has been issued, but is not yet final, including by reason of
appeal;
(8) A deadline for corrective action in a final order passed without
documented completion;
(C) Civil penalties or damages assessed in a final order have become
due and have not been paid; or
(D) The applicant has not completed requirements of a final order other
than those described in subdivisions ( )(2)(A) and (8).
SECTION 4. The headings in this act are for reference purposes only and do not
constitute a part of the law enacted by this act. However, the Tennessee Code Commission is
requested to include the headings in any compilation or publication containing this act.
SECTION 5. This act takes effect July 1, 2026, the public welfare requiring it, and
applies to conduct or construction occurring on or after that date.
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HOUSE BILL NO. 803
PASSED: April 8, 2026
CAMS"Qtl ,IEXTON, SPEAKER
HOUSE OF REPRESENTATIVES
RANDY MCNAL\Y
PEAKER OF THE SENA
APPROVED this ,c~ day of Apr; \ 2026
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