TSD was formed in 1906 under the California statutes relative to the formation of a sanitary district. TSD was subsequently reorganized under the 1923 Sanitary Act. Today TSD still operates under this act and is governed by rules and laws set forth in the Health and Safety Code of the State of California.

The Truckee Sanitary District is one of the oldest sanitary districts in the State of California. Initial facilities within the community of Truckee were installed in 1908, with disposal being provided by a large septic tank located approximately one-half mile east of downtown Truckee on the bank of the Truckee River. Between 1908 and 1962 residential growth in the Truckee-Donner Lake area was substantial. Increased development coupled with a high incidence of septic tank failures lead to high coliform counts (indicator of fecal matter) in Donner Lake. These high coliform counts initiated the involvement of the County Sanitarian to address the water quality problem. In 1962, at the urging of the County Sanitarian, TSD undertook a substantial annexation proceeding which encompassed the lands between Gateway and the foot of Donner Summit. This annexation represented the initial step in providing the area with a wastewater collection system to relieve the water quality problems at Donner Lake. The annexation increased TSD's boundaries by approximately two and one-half times its original size. In 1964 a Preliminary Engineering Report for the construction of a wastewater collection system within the newly annexed area was prepared and submitted to the Board of Directors.

The Engineering Report separated the required wastewater facilities into four improvement stages corresponding to proposed Sewer Assessment Districts. Funding for the required wastewater collection system was accomplished through General Obligation Bonds, Federal Grants, State Loans, and assessment proceedings. The newly completed wastewater collection system and outfall pipelines in the four SADs were connected to the existing TSD wastewater collection system.
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