Senate Bill 2653, also known as the "Tennessee Data Center Impact Review Act," establishes a regulatory framework for the operation of data centers in Tennessee. Effective January 1, 2027, the bill mandates that any person seeking to operate a data center must first obtain a permit from the water and wastewater operator board of certification. The application process requires detailed information, including the data center's physical address, power capacity, water usage projections, and potential impacts on local water supplies. The board is tasked with evaluating the application, considering factors such as wastewater discharge and its compatibility with municipal treatment systems, and prioritizing residential water access over industrial uses.

Additionally, the bill outlines the board's responsibilities for oversight, including conducting biennial evaluations of water systems and ensuring that data centers do not externalize costs onto public utilities. It also establishes reporting requirements for water utilities serving data centers and allows for civil penalties for violations of the act. The board is empowered to promulgate rules to implement the provisions of the act, which will take effect on July 1, 2026.