The bill amends the Local Government Code to enhance the capabilities of public entities in Texas concerning water and sewer services. It expands the definition of "public entity" to include water supply and sewer service corporations, allowing these entities to operate jointly. The bill grants these public entities the authority to issue bonds, impose assessments, and acquire public utilities, while also detailing processes for adding or withdrawing entities from a public utility agency. It introduces provisions for managing utilities in distress and establishes a framework for creating public utility agencies, which are defined as separate political subdivisions with specific powers related to utility operations. Notably, these agencies do not have the power of eminent domain and are subject to oversight by the Public Utility Commission of Texas regarding rates and charges.

Additionally, the bill amends various sections of the Water Code to enhance the regulatory framework for public utility agencies. Key insertions include the definition of "public utility agency" and provisions for ratepayer appeals to the utility commission regarding water, drainage, or sewer rates. It mandates that public utility agencies provide written notice to ratepayers about rate changes, similar to municipally owned utilities, and allows certain public utility agencies to provide retail services without a certificate of public convenience and necessity. The bill also makes deletions, such as removing references to political subdivisions in the definition of "water and sewer utility," to clarify the roles of public utility agencies and ensure adequate recourse for ratepayers. The bill is set to take effect immediately upon a two-thirds vote from both houses or on September 1, 2025, if that threshold is not met.

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 (Water Code 13, Local Government Code 572)
House Committee Report: 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 (Water Code 13, Local Government Code 572)