On May 9, Gov. Bill Lee signed Senate Bill No. 670 into law (see Public Chapter No. 437), which amends several sections of the Tennessee Code related to wetlands and introduces new requirements and exemptions for property owners and developers. Effective July 1, the legislation eliminates development regulations for up to 80% of Tennessee's isolated wetlands — those lacking surface connections to navigable rivers and lakes — to provide greater flexibility for development. This change comes after a 2023 Supreme Court ruling removed isolated wetlands from federal control, leaving their regulation entirely to states.

Key Provisions and Regulatory Changes
The new law brings significant updates to wetland management in Tennessee, including:

Wetland Determinations
A critical aspect of the legislation streamlines the process for identifying wetlands on a property. Property owners and developers can request a determination from the commissioner of the Tennessee Department of Environment and Conservation (TDEC) by submitting a wetland resource inventory report prepared by a third-party professional. If the report meets TDEC standards, its findings are generally accepted unless the TDEC commissioner raises concerns within 30 days. This provision offers a clearer path for assessing land before development, with an option to appeal decisions if disputes arise.

New Classification System and Regulatory Thresholds
The law establishes new rules for altering isolated wetlands by classifying them as artificial, low-quality, moderate-quality or high-quality, based on ecological value.

• Artificial wetlands (a new category for wetlands created purposefully or inadvertently by humans or beavers within the past five years) can be altered with no regulatory oversight, provided they do not discharge toxic pollutants or impact water quality.
• Low and moderate-quality wetlands will now receive significantly reduced oversight. Property owners may alter low-quality wetlands up to one acre or moderate-quality wetlands up to 0.25 acres without needing notice, approval or mitigation, provided pollution and sediment controls are in place. For larger alterations — between one and two acres for low-quality or 0.25 and two acres for moderate-quality wetlands — only a general Aquatic Resource Alteration Permit (ARAP) is required without additional burdens such as riparian buffers, antidegradation analysis or cumulative impact assessments.
• High-quality wetlands and larger alterations (beyond two acres for any quality level) continue to require individual ARAPs, signaling stricter oversight for significant environmental impacts.

Importantly, the legislation prevents TDEC from considering isolated wetlands of any quality when determining a project's cumulative impact, even if the project encompasses other federally regulated wetlands, a provision that environmental groups warn could accelerate wetlands destruction.

Regional Impact and Development Implications
The changes particularly affect western Tennessee, where recent modeling commissioned by TDEC indicates most of the state's isolated wetlands are located. This region expects intense development around Ford's new BlueOval City manufacturing campus in Haywood County, with more than 30,000 acres of isolated wetlands in the northwest corner of the state. According to the Southern Environmental Law Center, about 80% of Tennessee's isolated wetlands are smaller than one acre, and around 94% are smaller than two acres, meaning the vast majority fall under the new exemptions.

Implications for Property Owners and Developers
For property owners, developers and businesses involved in land use or construction in Tennessee, this new law offers both opportunities and challenges. The exemptions for smaller or lower-quality isolated wetlands may simplify development by reducing permitting and mitigation hurdles, potentially lowering costs and accelerating project timelines for smaller-scale developments. However, given the flood control benefits of wetlands, these changes add a new layer of consideration for developers, property owners and businesses in flood-prone areas. 

Developers should evaluate projects against these new size limits and permitting requirements to prevent delays or unexpected regulatory obstacles, while remaining aware that the regulatory landscape may continue evolving as implementation proceeds and opposition groups monitor enforcement.

Early consultation with environmental professionals to classify wetlands and navigate permitting thresholds will be crucial, especially for projects that are near or exceed the specified acreage limits. Given the contentious nature of this legislation and ongoing environmental and flooding concerns, developers should also consider potential reputational and community relations impacts when planning projects affecting wetland areas.

Courtney Keehan is a senior associate at Chambliss Bahner & Stophel and advises on business matters related to mergers and acquisitions, the formation of private investment funds, environmental compliance, health care, and general business operations. She works with clients of all sizes, including startups, nonprofits, and tax-exempt entities on entity formation, contract review and preparation, employment-related matters, and raising capital. Keehan's genuine interest in her clients' success, combined with her personal approach, has allowed her to develop strong relationships while consistently delivering high-quality results.

Chambliss, Bahner & Stophel is closely monitoring the implementation of this wetlands legislation and is ready to assist clients in navigating the new permitting and delineation processes, as well as ensuring compliance with the updated regulations.