I think I posted a thread about this a couple of years ago, but, frankly, I've never been completely satisfied with this subject, so here goes again.
You've got a two storey home with full basement. Second storey bathrooms and an electric water heater in a service closet on the second floor.
The heater must sit in a drip pan and the drip pan must have a 3/4" drain. The T&P valve must also have a 3/4" drain and cannot terminate in the drip pan. Both must separately go either outside or drain into another drain, like a floor drain or a fixture.
In places where it's -10F two months of the year, noone wants to terminate outside. The second floor bathrooms don't have floor drains.
This is why I personally have yet to see a second floor water heater installed with every aspect of code satisfied. Maybe I just hang out in the wrong places.
So I'm working on a place, we've got the first floor ceilings and second floor walls open, it's really the right time to bring this up to code - - but frankly it looks like the "right" way to do it is to run two 3/4" drain lines all the way down to the basement to the floor drain or the sump. Which, if you ask me, completely defeates the purpose of the drain lines being visible so people can detect T&P problems, 'cause noone's gonna be checking out this dark corner of the basement regularly to see if there's a drip from these lines.
Maybe I'm just missing somthing.