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Texas Law Creates Water Savings Credits for Builders and Developers
Starting January 2026, Texas cities can give builders money discounts for water-saving building projects.
By Texas Legislature -- Apr 12, 2026
Overview
Texas passed Senate Bill 14 to help builders and developers save money when they use water-smart building projects. The law lets cities and towns give discounts on impact fees to builders who install or build systems that save water, reuse water, or reduce the need for wastewater treatment.
Eligible projects include any facility, system, or product that reduces water use per unit of service. This includes systems that cut down on the need for water supply and treatment infrastructure, decrease wastewater collection needs, reduce stormwater and drainage demands, or use practices that go beyond standard water efficiency rules. The goal is to reward builders for going beyond basic standards and choosing water-saving solutions.
Each city or town that offers these credits must set up clear and fair rules for calculating and applying the discounts. The rules must be consistent so that every builder knows how much credit they can earn for their water-saving project. Cities also need procedures to review and approve credits when builders apply for them.
This new law takes effect on January 1, 2026. The Senate passed it unanimously with 30 yes votes and zero no votes on August 18, 2025. The House passed it on August 26, 2025, with 133 yes votes, 6 no votes, and one member not voting. Water conservation and reuse benefit our communities by protecting this precious resource while making building projects more affordable.
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About the source
The Texas Legislature is the state legislature of Texas, consisting of the House of Representatives with 150 members and the Senate with 31 members. Meeting in regular session every two years, the legislature passes state laws, sets the budget, and shapes policies affecting all 30 million Texans.
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