News Release
For Immediate Release: 3.27.26
Contact: John Manning, media@firstliberty.org
Direct: 972-941-4453
Appeals Court Agrees: Church Can Challenge Texas Utility District’s Levying Excessive Fees During Construction Project
The case returns to trial court to consider claims under the First Amendment and the Texas Religious Freedom Restoration Act.
The Woodlands, TX— The Court of Appeals of the Ninth District of Texas at Beaumont issued an opinion determining that Grace Community Church of Woodlands, TX has valid religious liberty claims that the Southern Montgomery County Municipal Utility District charged excessive water connection fees during the construction of its new facility. Attorneys from First Liberty Institute represent the church.
You can read the court’s decision here.
“This decision sends a message to all municipalities in Texas and beyond that the U.S. Constitution and Texas law give protection to houses of worship and religious institutions against taxes masquerading as fees because of the enormous benefit religious institutions provide to the communities they serve,” said Jeremy Dys, Senior Counsel for First Liberty Institute. “In this case, government overreach against houses of worship has been checked and we look forward to making our case at the trial court.”
In 2022, to meet the needs of Grace Community Church’s growing congregation and mission, Grace purchased property in Montgomery County to construct a new church building and related facilities. The church contacted the utility district about the connection to the city’s water system and were initially told the actual cost to connect to the water line would be $24,900 for labor and materials. When the church requested that the District install the water tap, they followed with a fee of $61,500 which amounted to 150% of the actual installation cost. When the church challenged the amount based on its tax-exempt status, the District countered with a tap fee of $147,938—more than doubling the prior fee—followed by yet another counter of $83,780. To complete, occupy, and use the new church facility for its intended religious purposes, Grace Community had no choice but to accede to the District’s demands under protest and pay the fees.
In the opinion judges concluded, “Construing the pleadings in a light most favorable to the Church, we conclude the Petition adequately alleged that the religious freedom of the Church’s members has been ‘substantially burdened’ by the charges or fees. In the Petition, the Church alleged that it was a tax exempt religious organization, the tap fee cost was approximately $24,900 but the District charged the Church $83,780, and the Church’s new building, a sanctuary, could not be used by the congregation until the water tap was completed and the District would not provide the water tap unless the Church paid the charge.”
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About First Liberty Institute
First Liberty Institute is a non-profit public interest law firm and the largest legal organization in the nation dedicated exclusively to defending religious freedom for all Americans.
To arrange an interview, contact John Manning at media@firstliberty.org or by calling 972-941-4453.
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