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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB1566

Regular Session

Relating to connection of utilities by certain entities in certain subdivisions formerly located in a municipality's extraterritorial jurisdiction.

Government Affairs & Regulatory Compliance Analysis

SB1566: Government Affairs Overview

SB1566 mandates that utilities holding a Certificate of Convenience and Necessity (CCN) must connect service to land removed from a municipality's extraterritorial jurisdiction (ETJ) without waiting for municipal platting certification. This legislation eliminates municipal planning bottlenecks for developers and utilities in "released" zones, effectively bypassing city approval for connections in these specific areas.

Sen. Paul Bettencourt·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01

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SB1566
Moderate
Relating to connection of utilities by certain entities in certain subdivisions formerly located in a municipality's extraterritorial jurisdiction.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
Municipal Planning DepartmentsPUCTCEQ
Primary Author: Sen. Paul Bettencourt
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025 (Intake protocols must be updated by this date to avoid delaying valid service requests).
  • Agency Rulemaking: No specific agency rulemaking is mandated by the bill; however, utilities must monitor PUC and TCEQ dockets for complaints regarding service denial in disputed ETJ areas, which will set the precedent for enforcement.

Immediate Action Plan

  • Immediate: General Counsel to draft a "Certification of ETJ Status" affidavit for developers to sign prior to connection.
  • By August 1, 2025: Update GIS maps to reflect recent ETJ removals (Chapter 42 petitions) to ensure intake teams have accurate data.
  • By August 15, 2025: Revise "New Service" checklists to include the "Verification of Release" step for non-municipal tracts.
  • Ongoing: Establish a protocol to check county court dockets for litigation regarding specific ETJ releases before energizing large developments.

Operational Changes Required

Contracts

  • Service Agreements: You must amend Standard Terms of Service and Line Extension Agreements. Remove "Municipal Platting Approval" as a Condition Precedent for service in released ETJ areas.
  • Indemnification: Insert a "Warranty of ETJ Status" clause requiring the developer to indemnify the utility if the ETJ removal is legally challenged or overturned by a court.

Hiring/Training

  • Intake Staff Training: "New Service" teams must be retrained to stop requesting Local Government Code Section 212.0115 certificates for these specific parcels.
  • Geospatial Verification: Staff must be trained to verify that a specific parcel falls *both* within the utility’s CCN and within the boundaries of the ETJ release order.

Reporting & Record-Keeping

  • Verification File: Replace the municipal certificate with an internal "Verification of Release" file. This must contain:
  • 1. A copy of the petition for release and the municipal acceptance (or evidence of deemed approval).
  • 2. A map overlay confirming the parcel is within your CCN.
  • Audit Trail: Maintain these records indefinitely to defend against potential municipal claims of illegal connection under Section 212.012.

Fees & Costs

  • Operational Costs: Minimal direct cost impact.
  • Risk Costs: Potential increase in legal spend if a municipality sues the utility for connecting a property where the ETJ release is actively being litigated.

Strategic Ambiguities & Considerations

The statute is silent on "Disputed Releases." Many ETJ removals are currently subject to litigation between developers and municipalities.

  • The Risk: If a utility connects a property based on a developer's claim of release, but a court later rules the release was void, the utility may be liable for violating platting statutes.
  • The Gap: There is no statutory "safe harbor" explicitly defined for utilities connecting during the pendency of such litigation.
  • Watch For: Future PUC decisions or Attorney General opinions clarifying the utility's duty to serve when the status of the land is legally contested.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 24, 2025
Passed Senate
Apr 10, 2025
Passed House
May 22, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsCity GovernmentCity Government--annexationCity Government--utilitiesUtilitiesUtilities--general
03

Senate Authors

Sen. Paul BettencourtRepublican · Primary Author

House Sponsor

Rep. Drew DarbyRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB1566

Q

What does Texas SB1566 do?

SB1566 mandates that utilities holding a Certificate of Convenience and Necessity (CCN) must connect service to land removed from a municipality's extraterritorial jurisdiction (ETJ) without waiting for municipal platting certification. This legislation eliminates municipal planning bottlenecks for developers and utilities in "released" zones, effectively bypassing city approval for connections in these specific areas.

Q

Who authored SB1566?

SB1566 was authored by Texas Senator Paul Bettencourt during the Regular Session.

Q

When was SB1566 signed into law?

SB1566 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB1566?

SB1566 is enforced by Municipal Planning Departments, Public Utility Commission of Texas (PUC) and Texas Commission on Environmental Quality (TCEQ).

Q

How significant are the changes in SB1566?

The regulatory priority for SB1566 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB1566?

The cost impact of SB1566 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB1566 address?

SB1566 addresses topics including city government, city government--annexation, city government--utilities, utilities and utilities--general.

Q

What are the key dates for SB1566?

Key dates for SB1566: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB1566?

SB1566 primarily affects utility companies and energy providers. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026