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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB863

Regular Session

Relating to water withdrawn from the Edwards Aquifer and to the use of certain reclaimed water in an aquifer storage and recovery project.

Government Affairs & Regulatory Compliance Analysis

SB863: Government Affairs Overview

SB863 fundamentally expands the permissible service territory for Edwards Aquifer water and legally authorizes the injection of reclaimed water into Aquifer Storage and Recovery (ASR) projects for the first time. This legislation immediately benefits Retail Public Utilities with historical footprints in the Edwards Aquifer Authority (EAA) by removing artificial boundary restrictions, while simultaneously opening new water sourcing channels for developers through forthcoming TCEQ rulemaking.

Sen. Charles Perry·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Enforcing Agencies

Edwards Aquifer Authority (EAA) • Texas Commission on Environmental Quality (TCEQ)

Business Impact

Who SB863 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

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Water

Affected business types:

  • Water utilities
  • Wastewater treatment facilities
  • Municipal water districts
  • Agricultural water users
View all water legislation

Key Operational Considerations

  • 1Engineering & Planning: Direct engineering teams to update hydraulic models. You may now integrate Edwards water into broader distribution zones previously restricted to non-Edwards sources.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB863
Moderate
Relating to water withdrawn from the Edwards Aquifer and to the use of certain reclaimed water in an aquifer storage and recovery project.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
EAATCEQ
Primary Author: Sen. Charles Perry
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 is the critical "snapshot" date. Your Certificate of Convenience and Necessity (CCN) boundaries *on this specific day* define your permanent maximum service area for Edwards water.
  • Agency Rulemaking: The Texas Commission on Environmental Quality (TCEQ) must adopt water quality standards and permitting procedures for reclaimed water injection. Regulatory Gray Zone: While the law permits reclaimed water ASR as of September 1, 2025, actual permits cannot be issued until TCEQ finalizes these standards (anticipated Q4 2026 or Q1 2027).

Immediate Action Plan

  • 1. Freeze Your Map: Ensure any pending CCN expansion applications are finalized and approved by the PUC *before* September 1, 2025, to maximize your eligible service area.
  • 2. Secure Evidence: Locate 1996 historical service area records immediately; without them, the geographic expansion in Section 1 does not apply to you.
  • 3. Update Master Plans: Instruct utility engineers to re-evaluate water distribution plans assuming the removal of the EAA boundary barrier within your CCN.
  • 4. Monitor Dockets: Assign counsel to monitor TCEQ rulemaking regarding "reclaimed water injection standards" to advocate for commercially viable treatment levels.

Operational Changes Required

Contracts

  • Water Supply Agreements (WSAs): Review all WSAs utilizing Edwards Aquifer water. Amend "Place of Use" clauses to align with the expanded statutory definition (the full CCN area as of Sept 1, 2025) rather than the previous EAA boundary restrictions.
  • Reclaimed Water Offtake: If pursuing ASR, draft supply agreements with wastewater providers that include strict "quality refusal" clauses. You must have the contractual right to reject water that fails to meet the forthcoming TCEQ injection standards.

Hiring/Training

  • Engineering & Planning: Direct engineering teams to update hydraulic models. You may now integrate Edwards water into broader distribution zones previously restricted to non-Edwards sources.
  • ASR Operations: Operators will require advanced training on wastewater effluent quality monitoring, as the testing protocols for injecting reclaimed water will be significantly more rigorous than standard raw water injection.

Reporting & Record-Keeping

  • CCN Boundary Archival: You must secure and archive a certified map and legal description of your CCN boundaries exactly as they exist on September 1, 2025. Any territory added to your CCN *after* this date is statutorily ineligible for Edwards water transport under this bill.
  • Historical Verification: Locate and digitize records proving your utility had a service area footprint within the EAA boundaries on June 28, 1996. This is a prerequisite for utilizing the expansion rights.

Fees & Costs

  • Insurance Premiums: Review Environmental Impairment Liability (EIL) policies. Injecting reclaimed water carries higher liability risks than potable water. Ensure your policy covers "injection of reclaimed water" and contains no specific exclusions for ASR operations.
  • Permitting Costs: Anticipate higher engineering costs for ASR permits involving reclaimed water due to the complex treatment studies TCEQ will require.

Strategic Ambiguities & Considerations

  • "Standards Adopted by the Commission": The bill allows injection of reclaimed water treated to standards set by TCEQ, but does not define those standards. There is a risk TCEQ could set these at "Drinking Water" levels rather than "River Discharge" levels, drastically altering the economic feasibility of ASR projects.
  • Permitting Pathway: It is unclear if TCEQ will utilize General Permits (streamlined) or Individual Permits (requires public hearings) for these projects. Prepare for the Individual Permit track, which is slower and more vulnerable to public opposition.

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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.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Jan 22, 2025
Passed Senate
Apr 16, 2025
Passed House
May 28, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsSpecial Districts & AuthoritiesSpecial Districts & Authorities--water & UtilityEdwards AquiferUtilitiesUtilities--general
03

Senate Authors

Sen. Charles PerryRepublican · Primary Author

House Sponsor

Rep. Carrie IsaacRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Charles Perry

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about SB863

Q

What does Texas SB863 do?

SB863 fundamentally expands the permissible service territory for Edwards Aquifer water and legally authorizes the injection of reclaimed water into Aquifer Storage and Recovery (ASR) projects for the first time. This legislation immediately benefits Retail Public Utilities with historical footprints in the Edwards Aquifer Authority (EAA) by removing artificial boundary restrictions, while simultaneously opening new water sourcing channels for developers through forthcoming TCEQ rulemaking.

Q

Who authored SB863?

SB863 was authored by Texas Senator Charles Perry during the Regular Session.

Q

When was SB863 signed into law?

SB863 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB863?

SB863 is enforced by Edwards Aquifer Authority (EAA) and Texas Commission on Environmental Quality (TCEQ).

Q

How significant are the changes in SB863?

The regulatory priority for SB863 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB863?

The cost impact of SB863 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB863 address?

SB863 addresses topics including special districts & authorities, special districts & authorities--water & utility, edwards aquifer, utilities and utilities--general.

Q

What are the key dates for SB863?

Key dates for SB863: Effective date is 2025-09-01. Rulemaking: Must adopt standards and issue rules or permits (individual or general) to authorize the injection of reclaimed water into aquifer storage and recovery projects. (Not specified (contingent on implementation)). Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB863?

SB863 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