(a) This section applies to a municipally owned water and sewer utility that on January 1, 1989, required some or all of its wholesale customers to assess a surcharge for service against residential customers who reside outside the municipality's municipal boundaries.
(b) A municipality may not require a municipal utility district to assess a surcharge against users of water or sewer service prior to the annexation of the municipal utility district.
Official text of the Texas Water Code as published by the Texas Legislative Council.