The following is excerpted from the Texas Manual on Rainwater Harvesting, 3rd Edition, 2005, Austin, Texas.

 

Financial and other incentives:

 

Financial incentives and tax exemptions encourage the installation of rainwater harvesting systems.  The Texas Legislature has passed bills, and some local taxing entities have adopted rules that provide tax exemptions for rainwater harvesting systems.  A few public utilities have implemented rebate programs and rain barrel distribution events that encourage rainwater harvesting by residential, commercial, and industrial customers.  In addition to financial incentives, performance contracting provisions in state code can be used to encourage installation of rainwater harvesting systems.  In addition to financial incentives, administrative contracting rules for state and local governments encourage the use of rainwater harvesting as an alternative water source in Texas. 

 

Tax Exemptions: 

Property tax exemptions extended (State-wide):

 

Passed in 2001 by the 77th Texas Legislature, Senate Bill 2 amended Section 11.32 of the Texas Tax Code to allow taxing units of government the option to exempt from taxation all or part of the assessed value of the property on which water conservation modifications have been made.  The taxing entity designates by ordinance or law the list of eligible water conservation initiatives, which may include rainwater harvesting systems. 

 

County property tax exemptions:

 

Homeowners planning to install rainwater harvesting systems should check with their respective county appraisal districts for guidance on exemption from county property taxes.  Links to some county appraisal districts, as well as the Office of the State Comptroller’s Application for Water Conservation Initiatives Property Tax Exemption, can be found online.  Texas County Appraisal Districts ,  Office of the State Comptroller.

 

Hays County is one of the fastest-growing counties in Texas, and is also the county with the most rapidly increasing number of new rainwater harvesting installations in the state.  Hays County encourages rainwater harvesting with a $100 rebate on the development application fee.  For rainwater harvesting systems serving as the sole source of water for a residence, Hays County grants a property tax exemption from county taxes for the value of the rainwater harvesting system.  Guidelines for rainwater harvesting benefits and qualification can be found at the Hays County website.

 

Homeowners in other parts of the state should consider approaching their local government to see if such a property tax exemption could be passed in their locale.

 

Sales Tax Exemption (State-wide):

 

Senate Bill 2 exempts rainwater harvesting equipment and supplies from sales tax.  Senate Bill 2 amended Subchapter H of the Tax Code by adding Section 151.355, which states:

“Water-related exemptions.  The following are exempted from taxes imposed by this chapter: (1) rainwater harvesting equipment or supplies, water recycling and reuse equipment or supplies, or other equipment.”

 

Municipal Incentives:

 

In addition to tax exemptions, two Texas cities offer financial incentives in the form of rebates and discounts to their customers who install rainwater harvesting and condensate recovery systems.

 

Austin:  The City of Austin Water Conservation  Department promotes both residential and commercial/industrial rainwater harvesting.  The City of Austin sells 75-gallon polyethylene rain barrels to its customers below cost, at $60 each, up to four rain barrels per customer.  City of Austin customer who purchase their own rain barrels are eligible for a $30 rebate.  Customers may also receive a rebate of up to $500 on the cost of installing a pre-approved rainwater harvesting system.  The rebate application includes a formula to calculate optimum tank size and a list of area suppliers and installation contractors.  Austin Water Conservation.

 

Commercial entities may be eligible for as much as a $40,000 rebate against the cost of installing new equipment and processes to save water under the Commercial Incentive Program.  Austin Commercial Incentives Program.  New commercial or industrial sites that develop capacity to store sufficient water on-site for landscape irrigation may be able to receive an exemption from installing an irrigation meter.

 

San Antonio: San Antonio Water System (SAWS) Large-Scale retrofit. Rainwater harvesting projects are eligible for up to a 50-percent rebate under San Antonio Water System’s Large-Scale Retrofit Rebate Program.  SAWS will rebate up to 50 percent of the installed cost of new water-saving equipment, including rainwater harvesting systems, to its commercial, industrial, and institutional customers.  Rebates are calculated by multiplying acre-feet of water conserved by a set value of $200/acre-foot.  Equipment and projects must remain in service for 10 years.  The water savings project is sub-metered, and water use data before and after the retrofit are submitted to SAWS to determine if conservation goals are met.  To qualify for the rebate, an engineering proposal and the results of a professional water audit showing expected savings are submitted.  The rebate shortens the return on investment period, giving an incentive to industry to undertake water-conserving projects.