HB 1424

relating to the structuring of water rates by retail public
utilities to promote water conservation; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter Z, Chapter 552, Local Government
Code, is amended by adding Section 552.9065 to read as follows:
Sec. 552.9065.  WATER CONSERVATION RATE AND FEE.  The
governing body of a municipality may by ordinance:
(1)  structure the municipality's rates for water
service in a manner that promotes water conservation by all of the
municipality's water customers so that customers in a class who
consume greater amounts of water pay a higher rate per unit volume
than customers in a class who consume lesser amounts of water; and
(2)  establish an excessive use fee for water customers
whose water usage is greater than the water usage of a percentage of
the municipality's other customers.
SECTION 2.  The heading to Section 13.182, Water Code, is
Sec. 13.182.  JUST AND REASONABLE RATES; WATER CONSERVATION
SECTION 3.  Section 13.182, Water Code, is amended by adding
Subsection (b-2) to read as follows:
(b-2)  In establishing a utility's rates, the regulatory
authority by rule or ordinance may authorize a utility to:
(1)  structure the utility's rates in a manner that
promotes water conservation by all of the utility's customer
classes so that customers in a class who consume greater amounts of
water pay a higher rate per unit volume than customers in a class
who consume lesser amounts of water; and
(2)  establish an excessive use fee for customers whose
water usage is greater than the water usage of a percentage of the
SECTION 4.  Chapter 13, Water Code, is amended by adding
Subchapter O to read as follows:
SUBCHAPTER O.  WATER CONSERVATION RATE AND FEE
Sec. 13.551.  APPLICABILITY.  This subchapter applies to a
retail public utility that is not subject to Subchapter F or Section
552.9065, Local Government Code.
Sec. 13.552.  TIERED CONSERVATION RATE STRUCTURE.  A retail
public utility may establish a water conservation rate that
promotes water conservation by all of the utility's customer
classes so that customers in a class who consume greater amounts of
water pay a higher rate per unit volume than customers in a class
who consume lesser amounts of water.
Sec. 13.553.  EXCESSIVE USE FEE.  A retail public utility may
establish an excessive use fee for the utility's customers whose
water usage is greater than the water usage of a percentage of the
SECTION 5.  This Act takes effect September 1, 2025.