The bill, H.B. No. 2867, introduces new regulations regarding late payment fees charged by municipally owned water utilities in Texas. It establishes a structured fee schedule based on the duration of the late payment. Specifically, it prohibits utilities from charging a late payment fee that exceeds $5 or a percentage of the past due amount, which varies depending on the number of days the payment is overdue: two percent for payments overdue by 32 days, five percent for those overdue by 41 days, and ten percent for those overdue by 51 days. Additionally, the bill stipulates that the late payment penalty period cannot commence until at least 21 days after the utility has mailed or electronically transmitted the customer's bill, and it must conclude when the customer pays all past due amounts.

The bill also clarifies that the new regulations will only apply to fees charged on or after the effective date of the Act, with any fees charged prior to that date being governed by the existing law. 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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