According to the Legislative Budget Board (LBB), SB 2660 is not anticipated to have any fiscal impact on the state budget. The bill's provisions, which enable the Hays Trinity Groundwater Conservation District (HTGCD) to assess production fees on groundwater withdrawals, do not affect state expenditures or revenue streams.

However, the bill may have significant implications at the local level. If the HTGCD exercises its new authority to levy production fees—up to $0.38 per 1,000 gallons or equivalent to the cost of raw surface water from other wholesale providers—it could result in a new revenue stream for the district. These revenues could be used to support the district’s operational and regulatory functions, such as monitoring groundwater usage, enforcing compliance, funding conservation initiatives, or administrative costs.

The exact fiscal benefit would depend on the volume of groundwater withdrawn within the district's jurisdiction and the rate at which the fee is assessed. While this represents a potential financial gain for the district, the bill does not mandate fee collection, leaving the decision and implementation to the discretion of the HTGCD board. Thus, while the fiscal implications are neutral at the state level, they may result in positive financial effects for the local governing entity, contingent on local policy choices and groundwater use patterns.

SB 2660 proposes to amend the enabling legislation for the Hays Trinity Groundwater Conservation District (HTGCD), granting it authority to assess production fees on groundwater withdrawals. This change aims to bring HTGCD in line with the standard powers held by other groundwater conservation districts under Chapter 36 of the Texas Water Code. The bill responds to growing pressures on the Trinity Aquifer in Hays County, one of the fastest-growing regions in Texas, and seeks to provide the district with sustainable funding to perform essential water management functions such as monitoring, permitting, and conservation enforcement.

While the bill’s intent is valid and consistent with practices in other parts of the state, it raises significant liberty concerns. Specifically, the bill increases the size and regulatory scope of local government by granting HTGCD broad new fee-assessment powers without embedding sufficient safeguards to protect private property rights and ensure transparent use of public resources. It does not include clear limitations on how the collected fees can be spent, lacks built-in transparency requirements like annual reporting or independent audits, and offers no mechanisms for stakeholder oversight or input before fee structures are modified.

Additionally, although the bill exempts domestic and agricultural wells, the new fee burden placed on permitted wells, typically used by public water systems, businesses, and industrial users, could result in indirect costs passed on to consumers and higher operating costs for commercial entities, effectively functioning as a quasi-tax. This undermines the principle of limited government and may lead to mission creep or unchecked administrative expansion without corresponding accountability.

Examples from other districts highlight how these concerns can be addressed without hindering conservation efforts. The Barton Springs Edwards Aquifer Conservation District, which covers the eastern half of Hays County, operates under a similar fee structure but has adopted internal policies and public-facing transparency practices, including:

• Detailed annual financial reporting;
• Publicly accessible budgets and meeting minutes;
• Clear statements on allowable uses of fee revenue (e.g., monitoring, enforcement, education).

Likewise, districts like the Post Oak Savannah Groundwater Conservation District and the Evergreen Underground Water Conservation District have implemented financial audits, public reporting mechanisms, and limited fee applications to core groundwater management functions. These practices demonstrate that effective groundwater regulation and fiscal responsibility can coexist when paired with clear statutory or policy-based checks.

To align SB 2660 with these best practices and core liberty principles, the following amendments should be adopted before the bill can be supported:

• Restrict use of production fee revenue to defined purposes such as aquifer monitoring, permitting, conservation, and enforcement;
• Mandate annual public reporting on revenues collected and how funds are spent;
• Require periodic independent audits of the district’s finances;
• Include a stakeholder input process for fee-setting or major policy changes.

Until these or comparable accountability measures are adopted, Texas Policy Research recommends that lawmakers vote NO on SB 2660.

• Individual Liberty: The bill introduces a new regulatory framework for groundwater users by authorizing the Hays Trinity Groundwater Conservation District (HTGCD) to assess production fees on certain wells. While it does not impact the day-to-day lives of most individual residents, particularly those using domestic or agricultural wells, it does impose new obligations on individuals who operate high-capacity, permitted wells. This could be seen as a reduction in individual liberty for landowners who previously enjoyed unrestricted access to groundwater beneath their property.
• Personal Responsibility: The bill supports the principle of personal responsibility by encouraging large groundwater users to be more mindful of their consumption. The production fee creates a financial incentive for conservation and responsible use of a shared natural resource, especially in an area experiencing rapid growth and increasing water demands. Those who extract more groundwater bear a larger cost, reflecting their greater impact on the aquifer.
• Free Enterprise: From a business standpoint, the bill introduces a new cost and compliance layer for commercial and industrial water users. Businesses that rely heavily on groundwater may face increased operational costs, which could deter investment or expansion in the district. While the fee is capped and mirrors those used in other Texas districts, it still introduces uncertainty and a heavier regulatory burden, especially for small or mid-sized enterprises. This could inhibit the freedom of businesses to operate without undue government interference.
• Private Property Rights: Groundwater rights in Texas have historically followed the "rule of capture," allowing landowners to pump groundwater from beneath their property with minimal restriction. By granting HTGCD the authority to assess production fees and enforce usage policies, this bill limits traditional property rights, even though it exempts domestic and agricultural wells. For many landowners, especially those with commercial interests, the new structure marks a clear shift from self-determined use toward regulated access, eroding a long-standing principle of Texas property law.
• Limited Government: The bill increases the scope and authority of a local governmental entity, allowing HTGCD to impose fees and expand its regulatory reach. While this brings HTGCD into alignment with other Texas groundwater districts, it also reverses the unique restrictions that were originally placed on it by the Legislature to constrain its power. Without accompanying amendments to increase transparency, place limits on spending, or introduce checks on new rulemaking, the bill represents a clear growth of local government authority without sufficient oversight mechanisms.