H.B. No. 1407 amends the Local Government Code and the Water Code to enhance the authority and operational framework of public utility agencies in Texas. The bill expands the definition of "public entity" to include water supply and sewer service corporations, and it grants public utility agencies the power to issue bonds, impose assessments, and acquire public utilities. Additionally, it clarifies that these agencies can enter into contracts for the management and operation of facilities and establishes a process for public entities to join or withdraw from participation in a public utility agency.

The legislation also specifies that public utility agencies cannot impose taxes but can exercise powers similar to municipalities regarding facilities. It introduces provisions for liability transfer upon ownership of facilities and allows for the creation of funding mechanisms for water infrastructure investments. Furthermore, the bill mandates that public utility agencies notify ratepayers of rate changes and ensures that the Public Utility Commission of Texas retains jurisdiction over the rates and charges of these agencies. The bill will take effect immediately if it receives a two-thirds vote from both houses; otherwise, it will take effect on September 1, 2025.

Statutes affected:
Introduced: Local Government Code 572.001, Local Government Code 572.012, Local Government Code 572.051, Local Government Code 572.052, Local Government Code 572.053, Local Government Code 572.058, Local Government Code 572.061, Local Government Code 572.062, Water Code 13.002, Water Code 13.043, Water Code 13.242 (Local Government Code 572, Water Code 13)