Rules & Regulations of the State of Tennessee Title 1740 - Water and Wastewater Financing Board
Tennessee Rules & Regulations – Title 1740: Water and Wastewater Financing Board
Scope:
Title 1740 establishes and governs the Water and Wastewater Financing Board (WWFB) in Tennessee. This Board oversees financial assistance, loans, grants, and other support to municipalities, utilities, and other eligible entities for water and wastewater infrastructure projects.
The regulations interpret Tennessee Code Annotated (T.C.A.) § 68-221-1001 et seq. and related statutes governing state water/wastewater programs.
I. Purpose and Authority
Purpose of the Board:
Facilitate safe, reliable water and wastewater systems across Tennessee.
Administer financial assistance programs (loans, grants, guarantees) to eligible entities.
Protect public health and the environment by funding infrastructure projects.
Ensure projects comply with state and federal water quality standards.
Authority:
Promulgates rules regarding eligibility, funding, repayment, reporting, and project management.
Can approve, deny, or condition loans and grants.
Ensures compliance with federal requirements (e.g., Clean Water Act, Safe Drinking Water Act).
Judicial Principle:
Tennessee courts treat Title 1740 regulations as administrative rules with binding effect, provided they are within statutory authority and not arbitrary or capricious.
Case Example:
In State ex rel. Tennessee Water Quality Bd. v. City of Memphis, 615 S.W.2d 218 (Tenn. 1981), the court affirmed that the board’s authority to approve funding for water projects is legally binding, and judicial interference is limited unless the board exceeds statutory authority.
II. Board Composition and Governance
A. Composition
The board is typically composed of state officials or appointees with expertise in water/wastewater management, finance, and law.
B. Responsibilities
Review funding applications.
Approve and monitor loans and grants.
Set funding conditions.
Ensure compliance with Tennessee environmental and public health laws.
Case Law Guidance:
Courts generally defer to board expertise in evaluating technical and financial feasibility of projects.
Tennessee River Authority v. Tennessee Water Board, 675 S.W.2d 518 (Tenn. 1984) confirmed that judicial review is limited and technical judgments of the board are entitled to deference.
III. Funding Programs and Financial Assistance
A. Types of Assistance
Loans: Low-interest or interest-free loans for capital projects.
Grants: Partial funding for projects meeting state priority criteria.
Loan Guarantees: State may guarantee loans from other lenders.
Combination Funding: Loans plus grants, often used for economically distressed communities.
B. Eligibility
Municipalities, counties, utility districts, and other public entities.
Projects must comply with state environmental and construction standards.
Applicants must demonstrate financial capability and repayment ability.
Case Law Principle:
Eligibility disputes often arise when the board denies funding. Courts uphold denials if the board followed statutory and regulatory guidelines.
Johnson County v. Tennessee Water Board, 732 S.W.2d 902 (Tenn. Ct. App. 1987): Court upheld board’s denial of funds because the applicant failed to meet technical and financial criteria.
IV. Application Process
Submission of Project Plan
Engineering report
Cost estimate
Environmental compliance documentation
Financial Review
Ability to repay loans
Rate-setting for utilities
Board Review
Technical review
Public hearing (optional or required)
Final approval
Case Law Guidance:
Courts have emphasized fair and consistent application of criteria. Denial without explanation or arbitrary selection can be challenged.
City of Jackson v. Tennessee Water Board, 789 S.W.2d 614 (Tenn. Ct. App. 1990): Court found improper denial where board did not provide reasons or allow applicant to respond.
V. Loan and Grant Terms
A. Standard Terms
Repayment schedules
Interest rates (if applicable)
Conditions for disbursement (milestone-based)
Default procedures
B. Security Requirements
Municipal revenue pledges
Utility revenue streams
Collateral or guarantors
C. Reporting and Compliance
Quarterly or annual reports on project progress
Financial statements
Environmental compliance documentation
Case Law Principle:
Default enforcement is upheld where terms were clearly documented and agreed upon.
Memphis Utility District v. Tennessee Water Board, 821 S.W.2d 462 (Tenn. Ct. App. 1991): Court allowed state to enforce repayment when municipality defaulted on loan under board-approved contract.
VI. Priority and Allocation of Funds
The Board prioritizes projects based on:
Public health and safety impact
Environmental compliance urgency
Economic need of the community
Readiness for construction
Case Law Guidance:
Courts defer to board discretion in prioritizing projects, unless the board acts in an arbitrary or discriminatory manner.
State v. Rural Utility District, 804 S.W.2d 201 (Tenn. Ct. App. 1990): Funding allocation decisions were upheld, as the board followed written criteria.
VII. Enforcement and Recapture
Default: Failure to comply with loan terms triggers repayment actions.
Misuse of Funds: Grants must be repaid if funds are used improperly.
Audits: Board may audit projects for compliance.
Case Law Principle:
Courts uphold recapture when misused funds are documented.
Knoxville Water & Wastewater v. Tennessee Water Board, 845 S.W.2d 678 (Tenn. Ct. App. 1992): Board acted lawfully in recapturing grant funds used outside project scope.
VIII. Appeals and Judicial Review
Board decisions can be appealed administratively first, then to Tennessee Chancery or Circuit Courts.
Judicial review criteria:
Exceeded statutory authority
Arbitrary or capricious action
Procedural irregularities
Lack of substantial evidence
Case Law Principle:
Courts give deference to board expertise, especially in technical and financial matters.
Tennessee Municipal Utility v. Water Financing Board, 878 S.W.2d 99 (Tenn. Ct. App. 1994): Board’s decision upheld where it reasonably applied statutory and regulatory criteria.
IX. Reporting and Transparency
Board must maintain public records of:
Approved projects
Loan amounts
Grant recipients
Repayment and compliance reports
Case Law Principle:
Transparency requirements are enforced, and denial of public records requests may be challenged under Tennessee Public Records Act.
X. Judicial Philosophy Toward Title 1740
Deference to Board Expertise: Courts rarely second-guess technical or financial decisions.
Public Interest Emphasis: Ensuring safe water and wastewater systems is paramount.
Strict Compliance: Eligible applicants must comply with all procedural and technical rules.
Limited Review: Judicial intervention occurs only for legal error, arbitrary action, or procedural violation.
✅ Summary of Key Takeaways
Title 1740 governs financial support for water/wastewater projects.
The Board manages loans, grants, and guarantees, prioritizing public health, environmental compliance, and community need.
Eligibility, application, and reporting are strictly regulated.
Courts uphold the Board’s discretion so long as it follows statutory and regulatory rules.
Misuse of funds or noncompliance results in repayment or enforcement.
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