Here is the commentary. This should answer your question (bold is mine);
Relief valves are emergency devices that are not intended to operate continuously. Any discharge must not go unnoticed, because discharge from a relief valve indicates that something is wrong with the system. The termination of a relief valve discharge must be visible for observation so that corrective measures can be taken as necessary.
If a relief valve discharges to a drainage system, the discharge must be an indirect connection through an air gap to prevent backflow from potentially contaminating the potable water system.
The diameter of the discharge pipe must not be reduced or be less than the diameter of the relief valve outlet. Relief valve discharge piping must not be exposed to freezing temperatures, since freezing water could block the pipe and disable the relief valve. The relief valve must first discharge through an air gap into an indirect waste receptor located in a heated space, which, in turn, terminates outside. The discharge pipe must terminate close to the floor level to prevent harm to building occupants. See Commentary Figure P2803.6.1. Water must not be allowed to discharge where it can cause structural decay. Discharge piping must drain by gravity and must not be trapped within the relief piping system. Standing water in the discharge linemay become contaminated. To discourage any obstruction in the discharge pipe, the code prohibits the installation of a valve or threads on the outlet end of such pipe
The whole point to remember is that if the valve discharges, someone needs to be able to see / know it, along with the other requirements that Jeff provided (which are pretty much to ensure that someone sees/knows about it).
I have found many of these that, per the code, are installed correctly. However, when they are tested the water splatters all over the wall and floor due to poor design. The inspectors are overlooking this because they believe that most valves may leak but rarely will they release water at full pressure. I catch hell every time I write one of these up.
I don’t operate any valves or circuit breakers. Rather, I advise my Clients to have all valves tested if the sellers cannot prove (through a service contract, receipt, etc.) that the valves have been tested within the past 12 months. I’ve even had some Clients request such proof or testing before close of escrow. Imagine that. Clients who read, understand, and act. Must be margarita time!