Senate committee advances bill tightening oversight of decentralized wastewater systems
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Summary
The Senate Energy, Agriculture and Natural Resources Committee advanced an amended Senate Bill 564 after debate and a 5–4 voice-recorded vote. The bill requires TDEC sign-off before decentralized land-application systems may operate and adds staged bonding requirements for developers and operators.
The Tennessee Senate Energy, Agriculture and Natural Resources Committee on Thursday advanced an amended bill aimed at tightening state oversight of decentralized wastewater systems, voting 5–4 to place Senate Bill 564 on the calendar.
Sponsor Sen. Todd Pote said the bill responds to a recent statewide inspection by the Tennessee Department of Environment and Conservation (TDEC) that found widespread installation and oversight failures. "We're saying from now on, before a system like this can go in, TDEC is gonna be the one that's gonna say that this system is gonna meet their permits," Pote said, arguing state-level rulemaking will provide consistent standards across Tennessee. He told the committee TDEC must promulgate rules no later than July 31, 2027.
Environmental attorney George Nolan of the Southern Environmental Law Center testified in favor of stronger protections but warned the bill's bonding language left vulnerable gaps. "These systems don't fail in two years," Nolan told the committee, saying many failures surface a decade or more after installation and that the bill's initial draft — which required a developer to post a 100% replacement-cost bond for two years and then drop to 10% — would not cover long-term replacement needs.
Committee members spent significant time debating bond terms and who should bear long-term responsibility if an operator later assumes maintenance. The committee adopted an amendment that keeps a 100% replacement-cost bond for the first two years and, by the committee's verbal amendment and legal staff summary, shifts responsibility in subsequent years to an operator while increasing the later-stage bond to 50% of replacement cost for a multi-year period (committee discussion referenced years three through 10). Legal staff described the amendment on the record as changing the post-two-year responsibility to an operator who contracts with the current owner and increasing the bond to 50% of replacement cost after the initial period.
Builders' representatives supported a uniform statewide framework to evaluate new technologies. Trey Lewis of Old South Properties and chair of Build Tennessee said the measure would create predictability for developers while protecting communities. Pote repeatedly emphasized homeowners remain responsible for their on-site septic systems if maintenance obligations transfer with property ownership.
The committee's recorded roll-call on the calendar motion showed the following votes: Senator Bolling — No; Senator Campbell — No; Senator Harshbarger — Aye; Senator Lowe — Aye; Senator Oliver — No; Senator Pote — Aye; Senator Seal — Aye; Senator Wally — No; Chairman Reeves — Aye. The chair announced the bill moves to the calendar with five ayes and four noes.
Next steps: SB 564 will proceed toward the calendar for further consideration. The bill's rulemaking deadline would require TDEC to draft rules by July 31, 2027 if enacted; committee members signaled willingness to revisit bond terms and other details as TDEC develops rules.
