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~tate of utennessee
PUBLIC CHAPTER NO. 490
HOUSE BILL NO. 542
By Representatives Vaughan, Hardaway, Todd
Substituted for: Senate Bill No. 1139
By Senators Taylor, Stevens
AN ACT to amend Tennessee Code Annotated, Title 7; Title 13, Chapter 7; Title 65 and
Title 68, relative to utilities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 7, Chapter 51, is amended by adding the
following as a new part:
7-51-2601. Part definitions.
As used in this part:
(1) "Approved contractor" means a contractor that:
(A) Is an appropriately licensed contractor in the state, with
demonstrated experience in the construction or installation of the utility
infrastructure that will be constructed or installed;
(8) Agrees to comply with the utility's standard work rules and
operational standards that apply to contractors that perform work for the
utility;
(C) Provides an agreement from the customer to convey utility
infrastructure installed pursuant to this part to the utility at no cost to the
utility and free and clear of all liens, claims, and encumbrances;
(D) Provides a performance bond, warranties, and other
assurances of performance that the utility requires of contractors that
perform work for the utility;
(E) Has liability insurance with limits of liability and other terms of
coverage that the utility requires of contractors that perform work for the
utility;
(F) Provides indemnification to the utility on terms that the utility
requires of contractors that perform work for the utility; and
(G) Is a current contractor for the utility that is in. good standing, is
listed on a utility's list of contractors that are approved for the construction
or installation of utility infrastructure, or is otherwise approved by the utility
in writing for construction or installation of the proposed utility
infrastructure;
(2) "Customer", in the case of a cooperative, means a member of the
cooperative and, in the case of any other utility, means a customer of the utility;
{3) ''Third-party plans examiner" means an engineer who:
(A) Is registered as a professional engineer in accordance with
title 62, chapter 2, with expertise in the design and construction of the
utility infrastructure that will be constructed or installed; and
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(B) Has appropriate liability insurance with limits of liability and
other terms of coverage that the utility requires of its own third-party
engineers;
(4) "Utility" means:
(A) An entity subject to the jurisdiction of the Tennessee board of
utility regulation in accordance with§ 7-82-701;
(B) A cooperative, as defined in § 65-25-102; or
(C) A county-owned, metropolitan government-owned, or
municipal-owned utility that provides water, wastewater, electric, natural
gas, or stormwater management and drainage to the public; and
(5) "Utility infrastructure" means the water, wastewater, electric, natural
gas, or storm water management and drainage facilities, as applicable, that are
included in the proposed construction or installation plan and are necessary to
provide the applicable utility service or services to customers within the proposed
plan of development.
7-51-2602. Installation of utility infrastructure by private contractors.
(a) A utility in this state shall allow a customer of the utility or person submitting a
plan of development to the utility the option to use an approved contractor or approved
contractors of the customer's choosing for the installation of such utility infrastructure.
Utilities shall produce a publicly available list of approved contractors and the process for
becoming an approved contractor.
(b) If a customer or customer representative engages an approved contractor
pursuant to subsection (a), then, prior to the commencement of work, the customer or
customer representative shall provide:
(1) The name, intended address, and local jurisdiction of the planned
development;
(2) The approved contractor's name;
(3) Evidence of the contractor's eligibility to operate as an approved
contractor in accordance with the requirements under§ 7-51-2601 (1); and
(4) Other information as the utility may reasonably require.
(c) No later than ten (10) business days after submission of the documents
required under subsection (b), the utility shall:
(1) Confirm the contractor's status as an approved contractor and allow
the contractor to proceed as an approved contractor in accordance with the
requirements for an approved contractor under this part, if the customer or
customer representative complies with the requirements of subsection (b);
(2) Provide to the customer, or the customer's representative, a report of
deficiencies; or
(3) Request additional information necessary to determine the eligibility of
the contractor's status as an approved contractor.
(d) If ten (10) business days pass and the utility fails to take an action as required
by subsection (c), then the contractor may proceed as an approved contractor and shall
comply with the requirements for an approved contractor under this part.
(e) The utility shall perform inspections of the installation and construction of the
utility infrastructure installed by the approved contractor in the development, and the
utility may also inspect materials and test the utility infrastructure as part of such
inspections. The approved contractor is responsible for correcting any deficiencies
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associated with its installation or construction, and the utility is not required to accept or
commission the utility infrastructure until it determines that the installation and
construction complies with all applicable requirements under this part. The utility may
charge a reasonable fee for such inspections and testing in accordance with a schedule
of fees or charges adopted by the utility and made publicly available.
(f) Notwithstanding subsection (a), a utility may require the direct installation or
construction of specific utility infrastructure by the utility or by an approved contractor
under the direct supervision of the utility where the requirement is necessary to ensure
public safety or service reliability of the utility.
7-51-2603. Utility infrastructure specifications.
(a) A utility may provide reasonable construction and manufacturer's
specifications for utility infrastructure to ensure that the infrastructure is constructed
properly and with appropriate materials. A utility that chooses to provide such
specifications shall provide persons with a schedule of all approved materials for utility
infrastructure with specifications for such materials.
(b) Notwithstanding subsection (a), a utility shall not require that materials or
services for the construction of the utility infrastructure be provided by a specific vendor
or manufacturer unless using the materials or services by a specific vendor or
manufacturer is deemed necessary by the utility for the quality and integrity of the utility's
system.
7-51-2604. Utility infrastructure plans and designs.
(a) Where a utility does not customarily prepare plans and designs for utility
infrastructure within a plan of development and requires a customer or customer
representative to prepare and submit such plans and designs, the utility shall:
(1) Not charge a fee of more than the fee established in a schedule of
fees and charges adopted by the utility for review of the plans and designs; and
(2) Complete the review of the plans and designs within sixty (60)
business days of the date the plans and designs are submitted to the utility and
are determined by the utility to be complete. The sixty-business-day review time
frame required under this subdivision (a)(2) does not include the time spent by a
state or federal regulatory body to provide any approvals that are required under
applicable state or federal regulatory requirements.
(b) If the utility does not complete the review in accordance with subdivision
(a)(2), then the customer or customer representative who submitted the plan or design
may hire a third-party plans examiner to review the plans and designs for compliance
with all applicable state and federal regulatory requirements, codes, and local
requirements.
(c) If a customer or customer representative engages a third-party plans
examiner pursuant to subsection (b) in lieu of review by the utility, then the customer or
customer representative shall submit the appropriate fee, if such fee was not already
submitted, and a stamped and sealed copy of all plans that were examined to the utility
and provide:
(1) The name, intended address, and local jurisdiction of the planned
development;
(2) The third-party plans examiner's name;
(3) A sworn statement under penalty of perjury by the third-party plans
examiner, declaring that the plans comply with the applicable state and federal
regulatory requirements, applicable codes, and local requirements, and that no
deficiencies remain;
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(4) A statement of the state and federal regulatory requirements used to
perform the plans examination;
(5) A statement of the applicable codes of the local jurisdiction and the
codes used to perform the plans examination;
(6) A statement of the local requirements of the utility used to perform the
plans examination;
(7) The occupancy classification of the structure;
(8) Evidence of the examiner's eligibility to serve as a third-party
examiner, including all necessary proof of insurance; and
(9) Other information as the utility may reasonably require.
(d) No later than ten (10) business days after submission of the documents
required under subsection (c), the utility shall:
(1) Approve the plans, if the plans comply with state and federal
regulatory requirements, local standards, and applicable codes;
(2) Provide to the customer or customer representative a report of
deficiencies; or
(3) Request additional information necessary to ensure compliance with
state and federal regulatory requirements, local standards, and applicable codes.
(e) If ten (10) business days pass and the utility fails to take an action as required
by subsection (d), then the utility must refund any associated plan review fees that were
collected, and the plans are deemed approved by the utility.
(f) If the plan of development is approved after review by a third-party plans
examiner and the customer engages an approved contractor to install or construct utility
infrastructure, the utility shall perform inspections of the installation and construction of
the utility infrastructure in the development. The utility may also inspect materials and
test the utility infrastructure as part of such inspections. The customer or its approved
contractor is responsible for the costs of correcting any deficiencies in the installation
and construction, and the utility is not required to accept or commission the utility
infrastructure until the utility determines that the installation and construction complies
with all applicable requirements under this part. The utility may charge a reasonable fee
for such inspections and testing in accordance with a schedule of fees or charges
adopted by the utility and made publicly available.
(g) This section does not apply to the types of plans and designs of utility
infrastructure that are customarily prepared by the utility for the customer in accordance
with a standard practice that is in effect at the utility as of July 1, 2025, or a policy that is
subsequently adopted by the utility.
7-51-2605. Regulatory compliance.
In the event that an obligation under this part conflicts with an applicable state or
federal regulatory requirement, the applicable state or federal regulatory requirement
controls and supersedes any obligation of the utility under this part to the extent
necessary to resolve the conflict.
7-51-2606. Excused delay.
In the event that an act of God, fire, flood, storm, accident, or similar event
constituting force majeure causes a utility to require more time to meet the review
requirements of this part, then the timelines set forth in this part must be suspended for
so long as the utility's operations are impacted by one (1) or more such events.
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SECTION 2. 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 3. This act takes effect July 1, 2025, the public welfare requiring it, and
applies to plans of development submitted on or after that date.
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HOUSE BILL NO. 542
PASSED: April21,2025
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CAMERON SEXTON, SPEAKER
HOUSE OF REPRESENTATIVES
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\ RANDY MCI
SPEAKER OF THE SENATE
~ APPROVED this 21 ~+ day of 2025
BILL LEE, GOVERNOREvery fact on this page links to its source, starting with the official bill record.