The bill, H.B. No. 2605, introduces new requirements for municipally owned utilities in Texas that provide potable water through more than 150,000 service connections. It mandates that these utilities complete a validation of their annual water audits if their reported real water loss meets or exceeds a specified threshold. This validation must be conducted within 180 days of filing the audit, and a water loss mitigation plan must be developed and submitted to the Texas Water Development Board within one year. Additionally, if a utility reports excessive water loss for three consecutive years, it must conduct a more detailed validation and update its mitigation plan accordingly.

The bill also stipulates that each validation must be performed by a certified individual, ensuring that the process adheres to board guidelines and is not conducted by board staff or the person who submitted the audit. Furthermore, the bill authorizes the Texas Commission to impose an administrative penalty of $25,000 for each violation of these new requirements. The act is set to take effect immediately upon receiving a two-thirds vote from both houses of the legislature or on September 1, 2025, if such a vote is not achieved.

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