H2O4 Texas, at a recent meeting, circulated information listing the five fees of potential revenue sources to fund Texas water programs that have been contemplated by the Legislature in the past. Those fees were:
- Sales Tax on Retail Sales of Utility Water and Sewer
- Description: Applies the state sales tax to retail sales of water and sewer service (6.25% for the state sales tax and 180% fur local sales taxes). Exempts the First 5,000 gallons of monthly residential water use, and exempts all industrial, governmental, and institutional water use.
- Revenues*: Estimated revenues to the state range from $245 million in 2012 to $270 million in 2015. Estimated revenues to local governments range from $71 million in 2012 to $78 million in 2015.
- Water Conservation and Development Fee
- Description: Applies to the volume of water sold as opposed to taxing sales revenues. As structured, he fee would apply a rate of 13 cents per 1,000 gallons of water sold. Exempts the first 5,000 gallons of monthly residential water use, and exempts all industrial, governmental, and institutional water use.
- Revenues*: Estimated revenues to the state range from approximately $75 million in 2012 to $77 million in 2015. As structured, this option would not generate revenues for local governments.
- Water Rights Fee
- Description: Would place a $1.50 surcharge per acre-foot on currently authorized and future surface water rights permits issued to municipal, industrial, irrigation and mining water rights holders. Water rights for in-stream uses (i.e recreation and hydroelectric) would be exempt as would rights for water storage.
- Revenues*: Estimated revenues to the state are approximately $49 million per annum from 2012 to 2015. As structured, this option would not generate revenues for local governments.
- Tap Fee on Public Water Supply Connections
- Description: Places a $1.00 fee on public water supply connections; government and institutional water connections would be exempt.
- Revenues*: Estimated revenues to the state range from $104 million in 2012 to $107 million in 2015. As structured, this option would not generate revenues for local governments.
- Sales Tax on Bottled Water
- Description: Extends the state sales tax to retail sales of bottled water (6.25% for the state sales tax and 1.80% for local sales taxes). Would not include non-packaged bulk water delivered by tanker truck and dispensed into residential cisterns or wells, nor would it include water sold at community dispensers.
- Revenues*: Estimated revenues to the state range from $71 million in 2012 to $74 million in 2015. Estimated revenues to local governments total about $21 million per annum over the same period.
The revenue estimations above are from 2010 and, as a result, rely on older data to arrive at estimations.