1. (1) A grant request must be made in a manner approved by the Board. Board staff will make the process to request a grant available online.

2. (2) Before the Board will consider a grant request, the grant request must be complete. A grant request is deemed complete when it includes the following:

   1. (a) The names of all utility systems involved in the plan to merge. If only a portion of a utility system is involved in the plan to merge, a description of the area to be merged must be included. The grant request must designate an individual from the requesting utility that Board staff may work with regarding the grant application and grant payments, and provide contact information for the designated individual.

   2. (b) A summary of the plan to merge and the need for a grant. This includes:

      1. 1. A summary of what grant payments will be used for and why existing funds or customer revenue is insufficient to cover these expenses; and,
      2. 2. A summary of the plan to merge, including which utility will survive the merger or what the name of the merged utility will be, an anticipated timeline for infrastructure changes or upgrades that are necessary.
   3. (c) The most recent audit of all utilities involved in the merger, or written explanation why such audit cannot be provided; and,
   4. (d) When the merger occurs pursuant to T.C.A. § 7-82-704, a feasibility study performed by a qualified professional examining the feasibility of a merger between any utilities involved in the merger. This feasibility study must examine the impact of the merger on the customers of all utilities involved, such that the Board can determine whether the merger is in the best interest of at least one utility and is not detrimental to other involved utilities.
3. (3) The Board may deny a grant if any of the requirements are not met or are insufficient, in the Board’s discretion.
4. (4) A grant request may include any supplementary information the applying utility system wishes to include.
5. (5) The Board or Board staff may request any additional information necessary to determine whether the utility qualifies for a grant, how or when payments should be made, and the amount of the grant.
6. (6) Grant requests will only be approved upon showing that all eligibility requirements are met. This includes the requirements set forth above, in addition to statutory and other requirements. The applicant has the burden to establish eligibility for grant payments.
7. (7) Grants are presumed to take the form of reimbursement for expenses incurred. Grant payments may take other forms upon Board approval.

8. (8) Quarterly Reports

   1. (a) Any utility that receives grant payments under this section must submit a quarterly report to the Board on a form approved by the Board.
   2. (b) Reports must be submitted within 90 days from the date of the first disbursement of funds to a party to the merger, and every 90 days thereafter.
   3. (c) Two quarterly reports must be submitted after the date of the last grant payment.

Authority: T.C.A. §§ 4-5-201, et seq., 7-82-702, 7-82-704, and 7-82-708. Administrative History: New rules filed May 5, 2025; effective August 3, 2025.