Q
What does Texas SB1055 do?
SB1055 authorizes the Southeast Texas Groundwater Conservation District (SETGCD) to increase groundwater withdrawal fees by up to 700%, raising the statutory cap from $0. 01 to $0. 07 per 1,000 gallons.
SB1055
Regular Session
Relating to permit fees for groundwater wells imposed by the Southeast Texas Groundwater Conservation District.
ModeratePlan for compliance
High Cost
Effective:2025-09-01
Enforcing Agencies
Southeast Texas Groundwater Conservation District
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
- Effective Date: September 1, 2025
- Compliance Deadline: Contingent on District Board action; anticipate new rates appearing on billing cycles as early as October or November 2025.
- Agency Rulemaking: The District Board must formally vote to amend the fee schedule to utilize the new statutory cap. This will occur in open meetings post-September 1, creating a short window for industry advocacy regarding phase-in schedules.
Immediate Action Plan
- Budgeting: Adjust Q3/Q4 2025 and FY 2026 financial models to assume the maximum $0.07 rate to ensure liquidity.
- Legal Review: Audit downstream contracts to confirm you can legally pass this fee increase to customers or tenants.
- Maintenance: Calibrate all groundwater meters immediately to ensure you are not paying premium rates for phantom usage or calibration errors.
- Engagement: Subscribe to SETGCD Board meeting notifications and prepare to advocate for a phased implementation rather than an immediate jump to the cap.
Operational Changes Required
Contracts
Review Master Service Agreements (MSAs) and commercial leases immediately. If you are a water supplier or landlord, ensure "change in law" or "pass-through" clauses explicitly cover regulatory fee hikes. Without these clauses, your entity will be forced to absorb the cost difference between the old $0.01 rate and the new potential $0.07 rate.
Hiring/Training
Direct facilities and maintenance teams to prioritize meter calibration and leak detection. With the cost of water potentially rising sevenfold, the ROI on leak repair has shifted dramatically. "Lost water" is now a significant financial liability.
Reporting & Record-Keeping
Prepare for increased audit frequency. While no new forms are mandated, the District will likely scrutinize usage reports more aggressively to maximize revenue under the new cap. Ensure withdrawal logs match meter readings precisely to defend against billing disputes.
Fees & Costs
Revise FY 2026 budget forecasts immediately. A facility currently paying $10,000 annually in pumpage fees now faces a statutory exposure of up to $70,000. The cap is set at $0.07 per 1,000 gallons withdrawn.
Strategic Ambiguities & Considerations
The statute establishes a ceiling ($0.07), not a mandate. It is currently unclear whether the SETGCD Board will implement the full increase immediately or opt for a tiered phase-in (e.g., increasing to $0.03 first). Businesses cannot predict the exact rate until the Board publishes its agenda for the first post-effective date meeting.
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02
Legislative Timeline
This bill's path through the Texas Legislature
03
Official Analysis
BILL ANALYSIS
| Senate Research Center | S.B. 1055 |
| 89R5944 SCR-D | By: Nichols |
| Water, Agriculture and Rural Affairs | |
| 4/11/2025 | |
| As Filed |
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
The Southeast Texas Groundwater Conservation District (district) was created, authorized, and enacted by the passage of S.B. 1888 during the 78th Legislature, Regular Session, 2003. The district consists of four counties�Jasper, Newton, Hardin, and Tyler�and covers approximately 3,685 square miles. It is estimated to be the 11th largest groundwater district in Texas.
Since the district began collecting production fees, which is the source of revenue, it has maintained a rate of $0.07 per thousand gallons. Only recently has the district increased the production fee rate, which will begin in the fourth quarter 2022. The new rate will be 1 cent per 1,000 gallons the maximum it can charge. It cannot levy a tax. The district has only one full�-time employee and no part-time employees.
S.B. 1055 would allow the Southeast Texas Groundwater Conservation District to raise the production fee rate from 1 cent per 1,000 gallons to 7 cents per 1,000 gallons.
Other groundwater conservation districts throughout the state have production fees as high as 22 cents per 1,000 gallons. Nearby groundwater conservation districts have higher production fees (actual current fees - not maximum allowed by legislation):
| Southeast Texas GCD | currently 0.7 cents per 1,000 gallons | maximum | 1 cent |
| Pinewoods GCD | currently 2.5 cents per 1,000 gallons | maximum | 2.5 cents |
| Lower Trinity GCD | currently 4.0 cents per 1,000 gallons | maximum | 5 cents |
| Lone Star GCD | currently 8.5 cents per 1,000 gallons | maximum | no max limit |
| Bluebonnet GCD | currently 4.5 cents per 1,000 gallons | maximum | 17 cents |
| Brazoria County GCD | currently 3.0 cents per 1,000 gallon | maximum | 17 cents |
| Prairielands GCD | currently 20 cents per 1,000 gallons | maximum | 30 cents |
| Upper Trinity GCD | currently 22 cents per 1,000 gallons | maximum | 30 cents |
As proposed, S.B. 1055 amends current law relating to permit fees for groundwater wells imposed by the Southeast Texas Groundwater Conservation District.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 8868.153(c), Special District Local Laws Code, to prohibit the fee on a well in the Southeast Texas Groundwater Conservation District from exceeding seven cents, rather than one cent, per thousand gallons of groundwater withdrawn for any purpose.
SECTION 2. Effective date: upon passage or September 1, 2025.
Senate Authors
House Sponsor
Bill Text(with markup)
| S.B. No. 1055 | ||
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| relating to permit fees for groundwater wells imposed by the | ||
| Southeast Texas Groundwater Conservation District. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 8868.153(c), Special District Local Laws | ||
| Code, is amended to read as follows: | ||
| (c) The fee may not exceed seven cents [ |
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| thousand gallons of groundwater withdrawn for any purpose. | ||
| 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. | ||
| TO: | Honorable Charles Perry, Chair, Senate Committee on Water, Agriculture and Rural Affairs |
| FROM: | Jerry McGinty, Director, Legislative Budget Board |
| IN RE: | SB1055 by Nichols (Relating to permit fees for groundwater wells imposed by the Southeast Texas Groundwater Conservation District.), As Introduced |
No fiscal implication to the State is anticipated.
Local Government Impact
Increasing the permit fee for groundwater wells would result in a revenue gain to the Southeast Texas Groundwater Conservation District.
| Source Agencies: |
| LBB Staff: | JMc, FV, BC, CWi |
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Related by Topic
- HB1689Relating to the use of certain groundwater export fees collected by a groundwater conservation district.
- HB2078Relating to the joint planning of desired future conditions in groundwater management areas.
- HB2080Relating to the review of the duties of a groundwater conservation district by the Texas Commission on Environmental Quality.
- HB4158Relating to the compensation of the directors of the Texana Groundwater Conservation District.
- HB5560Relating to penalties in certain suits involving a groundwater conservation district; increasing a penalty.
Quick Reference
Frequently Asked Questions
Common questions about SB1055
Q
Who authored SB1055?
SB1055 was authored by Texas Senator Robert Nichols during the Regular Session.
Q
When was SB1055 signed into law?
SB1055 was signed into law by Governor Greg Abbott on June 20, 2025.
Q
Which agencies enforce SB1055?
SB1055 is enforced by Southeast Texas Groundwater Conservation District.
Q
How urgent is compliance with SB1055?
The compliance urgency for SB1055 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of SB1055?
The cost impact of SB1055 is estimated as "high". This may vary based on industry and implementation requirements.
Q
What topics does SB1055 address?
SB1055 addresses topics including southeast texas groundwater conservation district, special districts & authorities, special districts & authorities--groundwater conserve dist., special districts & authorities--water & utility and water.
Legislative data provided by LegiScanLast updated: November 25, 2025
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