S.B. No. 740 amends various sections of the Water Code to enhance the regulatory framework for water and sewer services in Texas. Key changes include redefining "political subdivision" to include municipalities, river authorities, water districts, and other special purpose districts, while removing references to "incorporated cities, towns, or villages." The bill clarifies the Public Utility Commission's jurisdiction over wholesale water services provided by municipalities to other political subdivisions, excluding other municipalities. Additionally, it introduces a new definition for "public utility agency" and establishes that municipalities' decisions regarding wholesale water or sewer services to other municipalities are exempt from certain regulatory provisions.

The bill also outlines a more efficient process for the utility commission to approve system improvement charges and acquisitions of utilities in receivership or supervision. It mandates that the commission adopt rules to expedite applications for acquiring utilities and requires that applications include specific documentation to substantiate costs. Furthermore, it allows for the appointment of various entities, including municipally owned utilities and public utility agencies, to manage utilities under certain conditions. The act is set to take effect on September 1, 2025, with specific provisions regarding the implementation of new rules by September 1, 2026.

Statutes affected:
Introduced: Water Code 13.183, Water Code 13.301, Water Code 13.412, Water Code 13.4132 (Water Code 13)
Senate Committee Report: Water Code 13.183, Water Code 13.301, Water Code 13.412, Water Code 13.4132 (Water Code 13)
Engrossed: Water Code 13.002, Water Code 13.183, Water Code 13.301, Water Code 13.412, Water Code 13.4132 (Water Code 13)
House Committee Report: Water Code 13.002, Water Code 13.183, Water Code 13.301, Water Code 13.412, Water Code 13.4132 (Water Code 13)
Enrolled: Water Code 12.013, Water Code 13.002, Water Code 13.043, Water Code 13.183, Water Code 13.301, Water Code 13.412, Water Code 13.4132 (Water Code 12, Water Code 13)