Can Tennessee outsource its water and wastewater operator licensing exams to a third-party testing company without violating state law? And could a proposed law banning that practice run into constitutional problems?

Subject

Water and Wastewater Operator Certification Act and Proposed Prohibition on Third-Party Testing Services for Operator Certification Examinations

Plain-English summary

Anyone who runs a public water or wastewater treatment plant in Tennessee has to pass a state certification exam. The Board of Water and Wastewater Operators Certification administers it, and since 2011 the Board has used a third-party testing company. A state representative asked whether the Board's use of an off-the-shelf exam (without Tennessee-specific questions) is legal under current law, and whether a proposed bill banning third-party testing would be constitutional or jeopardize Tennessee's primacy under the federal Safe Drinking Water Act.

The AG's answers track four strands. First, the existing Water and Wastewater Operator Certification Act gives the Board the duty to "prepare" examinations but does not specify what the exam must cover, so contracting with a third party for a standardized exam is "preparing" the exam. Second, a future statute banning third-party contracts would be constitutional if it operated only prospectively, but if it tried to break existing third-party contracts, it would face serious challenge under the Contract Clauses of the Tennessee Constitution (Article I, Section 20) and the U.S. Constitution. Third, the federal Safe Drinking Water Act does not require states to use third-party contractors, so banning them does not by itself violate federal law. Fourth, federal law is "agnostic" about whether the exam comes from the state or a third party as long as it meets federal standards, so primacy is not at risk from the prohibition itself, although a footnote warns that if the state could not actually develop a working exam, the resulting failure could risk federal funds.

What this means for you

For Tennessee's certification board and the third-party testing company

You have a defensible legal basis for keeping the current arrangement. The Act does not prescribe exam content, and the Board's regulations expressly contemplate third-party involvement (Tenn. Comp. R. & Regs. 0400-49-01-.02(7)). If a bill banning the practice passes, push hard for a prospective-only effective date and a phase-out window so existing contracts can run their course. A retroactive cancellation would likely fail under the Contract Clause analysis the AG sketches.

For state legislators considering a ban

The constitutional safe path is a forward-looking statute that takes effect after current contracts expire. Avoid abrogation of existing agreements unless you can show a "significant and legitimate public purpose" and a tailored response. Watch the practical risk too: if Tennessee returns to building its own exam and cannot do so adequately, the state's federal Safe Drinking Water Act primacy and federal funding could be jeopardized under 42 U.S.C. § 300g-8(b). The Tennessee Department of Environment and Conservation has documented a prior failed in-house attempt, so this is a live concern.

For water and wastewater operators sitting for the exam

This opinion does not change your day-to-day. The Board can lawfully use a standardized national exam, and a passing score on whatever exam the Board administers continues to give you Tennessee certification (subject to reciprocity rules in § 68-221-910(e) and Tenn. Comp. R. & Regs. 0400-49-01-.01).

For municipal water utilities and managers

Operator certification continuity is a regulatory compliance issue. If the legislature changes the testing regime, plan for a possible transition period when scheduling new hires and renewals. A botched transition could leave you understaffed with certified operators.

For ratepayers and citizens worried about water quality

Federal Safe Drinking Water Act standards remain in place no matter who writes the exam. The opinion confirms federal law is "agnostic" on the source of the exam, as long as the exam meets federal certification standards.

Common questions

Why does Tennessee require a certification exam at all?

The federal Safe Drinking Water Act, enacted in 1974, requires public water systems to be operated by qualified personnel. Tennessee's parallel statute, the Water and Wastewater Operator Certification Act (Tenn. Code Ann. § 68-221-901 et seq.), creates the Board and the certification program to satisfy that federal obligation.

Who is on the Board?

The Board of Water and Wastewater Operators Certification, created by Tenn. Code Ann. § 68-221-905. Its duties under § 68-221-906(a) include preparing examinations.

What does it mean to "prepare" an exam?

The AG reads "prepare" by its ordinary meaning at the time of enactment: "to make ready beforehand for some purpose, use, or activity" (Webster's 1984). Contracting for a third-party exam fits that definition because the Board's act of contracting is what makes the exam ready.

Does the exam have to ask Tennessee-specific questions?

The Act and regulations do not require Tennessee-specific content. The regulations dictate format (multiple choice, true-false) but not substance. Tenn. Comp. R. & Regs. 0400-49-01-.01(3); 0400-49-01-.02(1).

What is the Contract Clause?

Both the U.S. Constitution and the Tennessee Constitution (Article I, Section 20) forbid laws that "impair the obligations of contracts." A new statute that retroactively voided the Board's existing third-party testing contract would face this challenge. Tennessee courts have applied the principle in Doe v. Sundquist and the Sixth Circuit applied it in Toledo Area AFL-CIO Council v. Pizza.

What is "primacy" and why does it matter?

Primacy is a state's federal authorization to enforce the Safe Drinking Water Act in place of EPA. To keep primacy, a state must adopt requirements at least as stringent as federal ones. A state that loses primacy loses access to certain federal funds (see 42 U.S.C. § 300g-8(b) on operator-certification funding).

Could banning third-party testing cause Tennessee to lose primacy?

Not on its own. Federal law does not require third-party testing. But the AG's footnote warns that if the state cannot actually produce a working exam in-house, and a prohibition on third-party contracts blocks any backup, the failure to administer an adequate exam could risk federal funds. Tennessee's prior in-house attempt failed, per testimony cited in the opinion.

Does the Safe Drinking Water Act require a specific exam format?

It requires that the exam meet the EPA's "Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems" (1999). Within those guidelines, federal law is agnostic on whether the exam comes from the state or a third party.

Background and statutory framework

The federal Safe Drinking Water Act, Pub. L. No. 93-523, 88 Stat. 1660 (1974), sets national drinking water standards and authorizes federal-state cooperation through state primacy. NRDC v. Regan, 67 F.4th 397 (D.C. Cir. 2023); Manufactured Hous. Inst. v. EPA, 467 F.3d 391 (4th Cir. 2006).

Tennessee's parallel statute, the Water and Wastewater Operator Certification Act, Tenn. Code Ann. § 68-221-901 et seq., creates a "system of certification of operators" to "prevent inadequate operation" of water systems. § 68-221-902. The Act creates the Board (§ 68-221-905) and tasks it with administering the certification examination (§ 68-221-906(a)). Operators must achieve a satisfactory score, unless they have reciprocity from another state. § 68-221-910(e); Tenn. Comp. R. & Regs. 0400-49-01-.01.

Tennessee classifies water and wastewater facilities into fourteen categories (§ 68-221-907; Tenn. Comp. R. & Regs. 0400-49-01-.06, 0400-49-01-.08), and operators must have grade-appropriate certifications.

The AG's three-part analysis:

1. The Board "prepares" the exam even when it contracts with a third party. The contracting act is what makes the exam ready. The Board's regulations expressly contemplate third-party involvement (Tenn. Comp. R. & Regs. 0400-49-01-.02(7)), and neither the statute nor the regulations require Tennessee-specific or "customized" questions.

2. A new statute banning third-party contracts is constitutional if it operates prospectively. If it abrogates existing contracts, the Contract Clauses of the Tennessee Constitution (Article I, Section 20) and the U.S. Constitution would create serious problems. Edwards v. Kearzey, 96 U.S. 595 (1877); Doe v. Sundquist, 2 S.W.3d 919 (Tenn. 1999); Toledo Area AFL-CIO Council v. Pizza, 154 F.3d 307 (6th Cir. 1998).

3. The proposed prohibition does not violate the federal Safe Drinking Water Act or Supremacy Clause. EPA guidance allows third-party contractors but does not require them. Tennessee did not begin using a third-party contractor until 2011. As long as the exam meets EPA's 1999 final guidelines, federal law is agnostic on its source.

Citations

• Tenn. Code Ann. § 68-221-901 et seq. (Water and Wastewater Operator Certification Act)
• Tenn. Code Ann. § 68-221-906(a)(7) (Board's duty to prepare examinations)
• Tenn. Code Ann. § 68-221-907 (facility classification)
• Tenn. Code Ann. § 68-221-910(e) (reciprocity)
• Tenn. Const. art. I, § 20 (Contract Clause)
• 42 U.S.C. § 300g-8(b) (federal funding for operator certification)
• Pub. L. No. 93-523, 88 Stat. 1660 (1974) (Safe Drinking Water Act)
• Tenn. Comp. R. & Regs. 0400-49-01-.01 (regulations)
• Edwards v. Kearzey, 96 U.S. 595 (1877)
• Doe v. Sundquist, 2 S.W.3d 919 (Tenn. 1999)
• Toledo Area AFL-CIO Council v. Pizza, 154 F.3d 307 (6th Cir. 1998)
• Lawson v. Hawkins County, 661 S.W.3d 54 (Tenn. 2023)
• NRDC v. Regan, 67 F.4th 397 (D.C. Cir. 2023)
• Manufactured Hous. Inst. v. EPA, 467 F.3d 391 (4th Cir. 2006)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2024/op24-018.pdf

Original opinion text

STATE OF TENNESSEE
OFFICE OF THE ATTORNEY GENERAL
December 19, 2024
Opinion No. 24-018

Water and Wastewater Operator Certification Act and Proposed Prohibition on Third-Party Testing Services for Operator Certification Examinations

Question 1
Under current law, would the Board of Water and Wastewater Operators Certification (the "Board") violate Tenn. Code Ann. §§ 68-221-901, et seq. and its regulations, or any other law, if it contracts with a third-party testing service provider to use a standardized operator examination that does not contain any customized or state-specific regulatory questions, or that does not otherwise align with the classification system established in Tenn. Code Ann. § 68-221-907?

Opinion 1
Likely not. The Water and Wastewater Operator Certification Act and its regulations provide the Board with broad authority over operator examinations and do not specify what content must be covered by those examinations.

Question 2
Would a proposed amendment to Tenn. Code Ann. § 68-221-906 that prohibits the Board from entering into a contract, agreement, or other arrangement with a third-party regarding testing services for its operator certification program, including exam validation services performed by psychometricians, be constitutionally suspect under Contract Clause of the Tennessee Constitution, the Supremacy Clause of the United States Constitution, or other constitutional provisions?

Opinion 2
It depends. An amendment that operates prospectively likely would not raise constitutional concerns, but an amendment that operates retrospectively to abrogate existing contracts likely would raise constitutional concerns.

Question 3
Would such a state prohibition on third-party testing services pose a risk of violating the Safe Drinking Water Act and applicable regulations?

Opinion 3
Likely not.

Question 4
If the answer to Question 3 is yes, what is the likely effect of such a violation on funds allocated to the State from the Drinking Water State Revolving Fund Loan Program?

Opinion 4
In light of Opinion 3, this question is moot.

ANALYSIS

Several decades ago, Congress enacted the Safe Drinking Water Act, Pub. L. No. 93-523, 88 Stat. 1660 (1974). That law and its implementing regulations instruct the U.S. Environmental Protection Agency to set national drinking water standards, see NRDC v. Regan, 67 F.4th 397, 398–99 (D.C. Cir. 2023), and empower both the federal government and the States to enforce those standards, see Manufactured Hous. Inst. v. EPA, 467 F.3d 391, 395 (4th Cir. 2006). Against that federal backdrop, the General Assembly approved the Tennessee Safe Drinking Water Act of 1983 to ensure an adequate quantity and quality of safe drinking water to all Tennesseans. See 1983 Tenn. Pub. Acts, ch. 324; Tenn. Code Ann. § 68-221-701.

Recognizing the State could not supply that water without collection, treatment, and distribution systems managed by qualified personnel, the General Assembly created a "system of certification of operators" designed "to prevent inadequate operation" of water systems. 1984 Tenn. Pub. Acts, ch. 812, § 2; Tenn. Code Ann. § 68-221-902. The Water and Wastewater Operator Certification Act establishes and regulates that certification program. See Tenn. Code Ann. § 68-221-901. To manage the program, the legislature created the Board of Certification, which administers an important component of the operator certification program: the examination. Tenn. Code Ann. § 68-221-906(a). Operators must achieve a satisfactory score on the examination to obtain certification, unless they are certified in another State with which Tennessee shares reciprocity. See id. § 68-221-910(e); Tenn. Comp. R. & Regs. 0400-49-01-.01.

Tennessee classifies its facilities into fourteen categories based on various criteria. See Tenn. Code Ann. § 68-221-907 (requiring classification); Tenn. Comp. R. & Regs. 0400-49-01-.06, .08 (making classifications). Operators must obtain different certifications depending on what water or wastewater treatment facilities they manage.

1. The Board likely does not violate the Water and Wastewater Operator Certification Act by using a standardized examination developed by a third party.

To begin, the Act entrusts the Board with the responsibility to "[p]repare . . . examinations." Tenn. Code Ann. § 68-221-906(a)(7). Because the law does not define what it means to "prepare" an examination, that word conveys its ordinary meaning. Lawson v. Hawkins County, 661 S.W.3d 54, 59 (Tenn. 2023). At the time of enactment, "prepare" generally meant "to make ready beforehand for some purpose, use, or activity." Webster's Ninth New Collegiate Dictionary 929 (1984).

The Board "prepare[s]" the examination even if it chooses to administer a standardized examination drafted by a third-party contractor. The Board's act of contracting with a third party to develop an examination is what "make[s]" that examination "ready beforehand" for use. After all, the Board's action—that is, the decision to contract with a third party and the consideration offered to enter that contract—causes the examination to be produced. Cf. State v. Moses, 92 Wash. App. 1022 (Wash. Ct. App. 1998) (unpublished); Ind. State Bd. of Registration for Prof'l Eng'rs & Land Surveyors v. Nord, 600 N.E.2d 124 (Ind. Ct. App. 1992). Indeed, the regulations expressly contemplate third-party involvement in the examination process. See Tenn. Comp. R. & Regs. 0400-49-01-.02(7).

Nor does the Water and Wastewater Operator Certification Act require the examination to include specific substantive content. Although the Board's regulations specify what form the examination questions may take, see Tenn. Comp. R. & Regs. 0400-49-01-.01(3) (allowing "multiple choice" and "true-false" questions), neither the statute nor the regulations dictate what substance those questions must cover. On the contrary, the law leaves details about the examination to the Board's discretion. See Tenn. Comp. R. & Regs. 0400-49-01-.02(1) ("All examinations shall be taken in a manner provided by the board.").

2.–4. The legality of the proposed amendment depends on whether it operates prospectively or retrospectively. An amendment that operates prospectively to prohibit the Board from executing contracts with third parties in the future after the amendment's enactment would not violate the State or federal Contract Clauses. See Edwards v. Kearzey, 96 U.S. 595, 603 (1877); Tenn. Const. art. I, § 20 (forbidding "retrospective law[s]" that "impai[r] the obligations of contracts"). But if the proposed amendment operated retrospectively to abrogate contracts the Board has already entered, that would raise serious questions under the State and federal Contract Clauses. See Doe v. Sundquist, 2 S.W.3d 919, 923–25 (Tenn. 1999); Toledo Area AFL-CIO Council v. Pizza, 154 F.3d 307, 322–27 (6th Cir. 1998).

In addition, the proposed amendment likely would not violate the Safe Drinking Water Act and applicable regulations or the Supremacy Clause. Although EPA guidance permits States to use third-party contractors in the examination process, federal law does not require States to use third-party contractors. Indeed, Tennessee did not begin using third-party contractors in the examination process until recently. See Jenny Dodd, Tenn. Dep't of Env't & Conservation, Operator Exams 3 (Mar. 6, 2024) (noting that Tennessee started using a third-party contractor in 2011). So long as the Board administers an examination that meets federal standards, see Env't Protection Agency, Final Guidelines for the Certification and Recertification of the Operators of Community and Nontransient Noncommunity Public Water Systems, 64 Fed. Reg. 5,916, 5,919–20 (Feb. 5, 1999), federal law appears to be agnostic about whether the examination comes from the State or a third party.

Footnote: Prohibiting the Board from using a standardized exam developed by a third party would likely mean that the Board must develop its own examination that meets federal standards. If the State could not develop and administer an adequate examination, see Dodd, supra at 3–4 (discussing failed attempt to develop exam), and it could not otherwise rely on third-party exams, that would risk violating federal law and jeopardize the State's access to federal funds, see 42 U.S.C. § 300g-8(b). But the mere act of prohibiting the use of third-party contracts itself would not violate federal law.

JONATHAN SKRMETTI
Attorney General and Reporter

J. MATTHEW RICE
Solicitor General

PHILIP HAMMERSLEY
Senior Assistant Solicitor General

BENNETT HEIDELBERGER
Assistant Attorney General

Requested by:
The Honorable Kelly Keisling
State Representative
425 Rep. John Lewis Way N.
Suite 566 Cordell Hull Building
Nashville, Tennessee 37243