Amends GS 130A-335 to direct the Public Health Commission to adopt rules establishing standards for discharge to surface waters and for spray irrigation of highly treated wastewater, defined as liquids discharged from a system designed to treat septage through natural or mechanical processes to meet standards for carbonaceous biochemical oxygen demand, total suspended solids, ammonia, total nitrogen, and fecal coliform as will be protective of human health and the environment. 

Directs the Department of Environmental Quality (DEQ) to establish the Innovative Highly Treated Wastewater Pilot Program (Program). Charges DEQ to (1) identify areas that feature either a failure rate of septic tank systems that is significantly higher than the State average or a wastewater system that is a distressed unit (as defined by state law); and (2) work with the units of local government with jurisdiction over the identified area to design, permit, and install four wastewater treatment systems using wastewater treatment technologies that produce highly treated wastewater to discharge or reuse. Requires a performance bond or other surety as described as part of the permitting process. Appropriates $20 million from the General Fund to DEQ for 2021-22 to be allocated to the Program. Authorizes DEQ to use up to $150,000 of the funds for administrative costs. Effective July 1, 2021.

Directs the Commission for Health Services (appears to intend Commission for Public Health) and the Department of Health and Human Services to adopt rules to streamline the approval process for wastewater treatment system technologies under Article 11 of the Chapter. Enumerates six components the rules must contain, including (1) providing for application for approval as an innovative wastewater system for a system with certification from a nationally recognized body that demonstrates compliance with the applicable treatment standard for at least two years with an approved verification program from the body or from field testing; (2) providing for application for provisional approval of a wastewater treatment system without certification from a nationally recognized body and field testing for a two-year period to demonstrate compliance with treatment standards in order to qualify for approval; and (3) standards for operator training and for tracking of system operation and maintenance. Directs the Commission for Health Services (appears to intend Commission for Public Health) and DHHS to quarterly report beginning May 1, 2022, and continue until required rulemaking is complete.