According to the Legislative Budget Board (LBB), SB 13 is not expected to have a fiscal implication for the state. This means there would be no direct impact on state revenue or expenditures from implementing the bill’s provisions. The requirements placed on political subdivisions to grant credits against water and wastewater impact fees for qualifying conservation and reuse projects do not trigger any state-level appropriations or changes to state agency operations.

However, there could be fiscal implications for local governments. Political subdivisions that assess impact fees may see a reduction in those fee collections when credits are applied for eligible projects. The size of this impact would depend on the number and scale of developments qualifying for the credits, the value of the infrastructure provided by the developer, and the structure of the political subdivision’s current impact fee program. While such credits could reduce fee revenues in the short term, they might also reduce long-term infrastructure costs for the political subdivision by lessening demand on water, wastewater, and stormwater systems through conservation and reuse measures.

Overall, the bill shifts some of the financial benefit of water efficiency projects directly to developers, with the potential for local governments to experience near-term fee revenue reductions, partially offset by long-term savings in infrastructure capacity needs. The fiscal effect on any given political subdivision would vary based on local development patterns and the uptake of eligible conservation projects.

SB 13 delivers a focused, incentive-driven strategy for promoting water conservation and reuse in new developments while steering clear of the property rights concerns that led to the veto of similar legislation (SB 1253) in the regular session. The bill amends Subchapter B, Chapter 395 of the Local Government Code to require political subdivisions to grant credits against water and wastewater impact fees when builders or developers install eligible facilities, systems, or products that produce measurable water savings. Eligible improvements include those that reduce per-unit water consumption, decrease wastewater treatment needs, improve stormwater management, or exceed standard water efficiency compliance thresholds. By rewarding voluntary private investment in water efficiency infrastructure, the bill fosters conservation without imposing new regulatory mandates.

From a fiscal perspective, the Legislative Budget Board projects no cost to the state. While local governments could experience reductions in impact fee revenues, these near-term losses may be offset by long-term savings from reduced demand on public water, wastewater, and stormwater infrastructure. Political subdivisions would also benefit from greater resilience in their utility systems, potentially avoiding or deferring costly capacity expansions. The bill mandates that local governments establish transparent, fair, and consistent procedures for calculating, applying, reviewing, and approving these credits, ensuring predictability for developers and accountability to the public.

Importantly, SB 13 is a cleaner, more narrowly tailored version of the policy previously considered in SB 1253. Governor Abbott’s veto of SB 1253 was prompted not by its conservation incentives but by unrelated provisions added on third reading in the House that applied only to a single groundwater conservation district, imposed new fees that escalated annually, and allowed government entry onto private property without owner consent. SB 13 avoids these late-stage amendments entirely, focusing solely on the conservation credit mechanism and leaving property rights intact. This change directly addresses the governor’s stated objections and makes the bill a stronger, more defensible piece of legislation.

Finally, SB 13 could help improve housing affordability. Impact fees are often passed on to buyers in the form of higher home prices; by reducing those fees for developments with water-efficient systems, the bill can modestly lower upfront costs and encourage builders to incorporate conservation measures as a standard practice. This combination of resource sustainability, property rights protection, and pro-growth economic policy makes SB 13 a prudent and practical reform. For these reasons, Texas Policy Research recommends that lawmakers vote YES on SB 13.

• Individual Liberty: The bill allows builders and developers to decide voluntarily whether to implement water conservation and reuse technologies in their projects, without imposing mandates or restricting their ability to develop property. By offering credits against impact fees as an incentive, it preserves freedom of choice while making it financially advantageous to adopt sustainable practices.
• Personal Responsibility: The bill rewards developers who take proactive steps to reduce the strain their projects place on public infrastructure. Those who invest in water-efficient systems bear the initial cost of conservation measures but receive a direct financial benefit through fee credits. This reinforces the principle that individuals and private actors should take responsibility for their impact on shared resources.
• Free Enterprise: The measure uses a market-based approach to drive water conservation, encouraging competition among developers to innovate and incorporate cost-effective water-saving solutions. Reducing impact fees for qualifying projects enhances the business case for investing in efficiency technologies and fosters growth in the conservation products and services sector.
• Private Property Rights: Unlike the regular session version (SB 1253), the bill does not impose new burdens, special fees, or government access requirements on property owners. Instead, it respects property rights by focusing solely on voluntary improvements and ensuring that the decision to participate remains with the property owner or developer.
• Limited Government: Rather than expanding regulation or creating costly new programs, the bill works within existing impact fee structures to incentivize beneficial behavior. It potentially reduces the need for public infrastructure expansion by decreasing water and wastewater demand, leading to long-term cost savings for taxpayers and avoiding unnecessary growth in government responsibilities.

• HB 33 (Same As)