H.B. No. 685 amends the Local Government Code by adding a new section, 552.916, which prohibits municipalities from establishing discriminatory rates for water or sewer utility services. Specifically, the bill states that municipalities cannot set a rate for these services that is higher for entities qualifying for a sales tax or ad valorem tax exemption compared to the rates established for entities receiving comparable utility services. This aims to ensure equitable treatment of all entities regarding utility rates.

The bill is set to take effect on September 1, 2025, following its passage in both the House and Senate with unanimous support. This legislative change is intended to promote fairness in municipal utility pricing and prevent potential financial burdens on exempt entities.

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