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            |  | A BILL TO BE ENTITLED | 
         
            |  | AN ACT | 
         
            |  | relating to water losses reported by certain municipally owned | 
         
            |  | utilities to the Texas Water Development Board; authorizing | 
         
            |  | administrative penalties. | 
         
            |  | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | 
         
            |  | SECTION 1.  Subchapter B, Chapter 16, Water Code, is amended | 
         
            |  | by adding Section 16.0122 to read as follows: | 
         
            |  | Sec. 16.0122.  WATER AUDIT VALIDATION BY CERTAIN MUNICIPALLY | 
         
            |  | OWNED UTILITIES.  (a) In this section, "municipally owned utility" | 
         
            |  | has the meaning assigned by Section 13.002. | 
         
            |  | (b)  This section applies only to a municipally owned utility | 
         
            |  | that provides potable water through more than 150,000 service | 
         
            |  | connections. | 
         
            |  | (c)  A municipally owned utility that has filed an annual | 
         
            |  | water audit under Section 16.0121 with the board indicating that | 
         
            |  | the utility's real water loss meets or exceeds the threshold | 
         
            |  | established by rule under Section 16.0121 shall: | 
         
            |  | (1)  not later than the 180th day after the date the | 
         
            |  | audit was filed, complete a validation of the audit to ensure the | 
         
            |  | utility accurately assessed potential inaccuracies in data used in | 
         
            |  | the audit; and | 
         
            |  | (2)  not later than the first anniversary of the date | 
         
            |  | the audit was filed, develop and submit to the board a water loss | 
         
            |  | mitigation plan. | 
         
            |  | (d)  A municipally owned utility that has filed an annual | 
         
            |  | water audit under Section 16.0121 with the board indicating that | 
         
            |  | the utility's real water loss meets or exceeds the threshold | 
         
            |  | established by rule under Section 16.0121 for three consecutive | 
         
            |  | audit years shall: | 
         
            |  | (1)  complete a more detailed validation of the | 
         
            |  | utility's most current water audit to: | 
         
            |  | (A)  determine whether the implementation of | 
         
            |  | water leakage reduction strategies is appropriate; and | 
         
            |  | (B)  investigate the accuracy of the utility's | 
         
            |  | billing data; and | 
         
            |  | (2)  update the water loss mitigation plan developed by | 
         
            |  | the utility under Subsection (c)(2) accordingly. | 
         
            |  | (e)  Each validation required under Subsection (c)(1) must | 
         
            |  | be performed by a person who has completed water audit validation | 
         
            |  | training and is certified to conduct the validation. The | 
         
            |  | validation: | 
         
            |  | (1)  must follow board validation guidelines; and | 
         
            |  | (2)  may not be conducted by a board staff member or the | 
         
            |  | person who submitted the water audit. | 
         
            |  | (f)  Each water loss mitigation plan developed under | 
         
            |  | Subsection (c)(2), as updated under Subsection (d)(2), if | 
         
            |  | applicable, must be incorporated into the utility's most recent | 
         
            |  | water conservation plan required under Section 13.146 not later | 
         
            |  | than the first anniversary of the date the mitigation plan is | 
         
            |  | completed. As part of the utility's annual water conservation | 
         
            |  | report under Section 16.402(b), the utility shall report the | 
         
            |  | utility's progress in implementing the mitigation plan. The | 
         
            |  | mitigation plan must include: | 
         
            |  | (1)  one-year, three-year, five-year, and ten-year | 
         
            |  | goals for water loss mitigation; | 
         
            |  | (2)  descriptions of water loss mitigation projects or | 
         
            |  | programs designed to meet those goals; | 
         
            |  | (3)  estimated financial savings from the | 
         
            |  | implementation of the projects or programs under Subdivision (2); | 
         
            |  | (4)  estimated water savings from the implementation of | 
         
            |  | the projects or programs under Subdivision (2); and | 
         
            |  | (5)  cost estimates for implementing each project or | 
         
            |  | program under Subdivision (2). | 
         
            |  | (g)  If the utility must complete a validation under | 
         
            |  | Subsection (d)(1), the utility shall update the water loss | 
         
            |  | mitigation plan developed by the utility under Subsection (c)(2) to | 
         
            |  | revise the utility's one-year, three-year, five-year, and ten-year | 
         
            |  | goals. | 
         
            |  | (h)  Each validation required under Subsection (d)(1) must | 
         
            |  | be performed by a person who is experienced in performing required | 
         
            |  | validation activities. The validation: | 
         
            |  | (1)  must be based on the recommendations from the | 
         
            |  | utility's validation performed under Subsection (c)(1); | 
         
            |  | (2)  must be completed in consultation with the person | 
         
            |  | who completed the validation under Subsection (c)(1); | 
         
            |  | (3)  must be conducted in accordance with industry | 
         
            |  | standards; and | 
         
            |  | (4)  may not be conducted by a board staff member or the | 
         
            |  | person who submitted the water audit. | 
         
            |  | (i)  The commission shall assess against a municipally owned | 
         
            |  | utility an administrative penalty of $25,000 for each violation of | 
         
            |  | this section. | 
         
            |  | SECTION 2.  This Act takes effect immediately if it receives | 
         
            |  | a vote of two-thirds of all the members elected to each house, as | 
         
            |  | provided by Section 39, Article III, Texas Constitution.  If this | 
         
            |  | Act does not receive the vote necessary for immediate effect, this | 
         
            |  | Act takes effect September 1, 2025. |