🔴Relating to rates established by municipalities for water or sewer service for certain entities.

HB 685

🔴 HB 685: Cities barred from charging tax-exempt users more for utilities

What it says it does:
HB 685 prohibits cities from charging higher water or sewer rates to tax-exempt organizations than they charge to other users receiving comparable service.

What it actually changes:
It eliminates a city’s ability to use utility rates to offset infrastructure costs from entities that do not pay into the property tax base. Cities can no longer apply adjusted rates based on tax status.

Who is pushing for it:
Representative Cecil Bell authored the bill. First Liberty Institute backed the original lawsuit that inspired it, involving Grace Community Church in Montgomery County. Religious liberty groups supported the change.

Who benefits:
Large, tax-exempt institutions with high utility usage benefit the most. Religious organizations and their legal advocates gain a precedent limiting local discretion over service charges.

Who gets left out or exposed:
Cities lose a long-standing budgeting tool. Local taxpayers may pay more to cover gaps. Secular nonprofits or low-revenue service providers not shielded by religious liberty arguments are not protected.

Why this matters long term:
The bill locks in a legal protection for certain tax-exempt groups while reducing municipal control over how to allocate costs for infrastructure and service. It sets up future legal challenges to local service fees.

What to watch next:
Other service fees such as trash collection, permitting, or safety inspections may be targeted next. Additional lawsuits could argue these costs violate religious liberty if applied unequally.

Bottom line:
HB 685 shifts power away from cities and toward private legal enforcement. It forces cities to treat non-taxpaying users the same as those who support local budgets, which could widen fiscal gaps over time.

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