Water Pollution - As enacted, requires the division of water resources in the department of environment and conservation, in collaboration with U.S. army corps of engineers, as necessary, to annually report information concerning compensatory mitigation provisions in aquatic resource alteration permits issued during the prior fiscal year to the governor, the comptroller of the treasury, and the chairpersons of the commerce committees; and to establish four categories of isolated wetlands for regulatory purposes; makes related changes. - Amends TCA Title 4; Title 11, Chapter 14, Part 4; Title 66; Title 67, Chapter 4, Part 4 and Title 69.

HB 541, now law as Public Chapter 437, requires Tennessee's environmental agency to align state wetland regulations with federal standards. It prohibits the state from classifying or regulating property as a wetland unless it is federally classified as such, directly affecting property owners and developers seeking permits. The bill also mandates annual reports to state leaders on compensatory mitigation (replacing damaged wetlands) for permits issued the previous year. Additionally, it establishes four new categories for regulating isolated wetlands, though specific definitions aren't detailed in the provided text. The law aims to reduce regulatory overlap between state and federal wetland rules.