(a) The commission by rule shall adopt and implement minimum standards for the indoor and outdoor use and reuse of treated graywater and alternative onsite water for:
(1) irrigation and other agricultural purposes;
(2) domestic use, to the extent consistent with Subsection (c);
(3) commercial purposes; and
(4) industrial purposes.
(a-1) The standards adopted by the commission under Subsection (a)(2) must allow the use of graywater and alternative onsite water for toilet and urinal flushing.

(b) The standards adopted by the commission under Subsection (a) must assure that the use of graywater or alternative onsite water is not a nuisance and does not threaten human health or damage the quality of surface water and groundwater in this state.
(b-1) The commission by rule may adopt and implement rules providing for the inspection and annual testing of a graywater or alternative onsite water system by the commission.
(b-2) The commission shall develop and make available to the public a regulatory guidance manual to explain the rules adopted under this section.
(c) The commission may not require a permit for the domestic use of less than 400 gallons of graywater or alternative onsite water each day if the water:
(1) originates from a private residence;
(2) is used by the occupants of that residence for gardening, composting, landscaping, or indoor use as allowed by rule, including toilet or urinal flushing, at the residence;
(3) is collected using a system that may be diverted into a sewage collection or on-site wastewater treatment and disposal system;
(4) is, if required by rule, stored in surge tanks that:
(A) are clearly labeled as nonpotable water;
(B) restrict access, especially to children; and
(C) eliminate habitat for mosquitoes and other vectors;
(5) uses piping clearly identified as a nonpotable water conduit, including identification through the use of purple pipe, purple tape, or similar markings;
(6) is generated without the formation of ponds or pools of graywater or alternative onsite water;
(7) does not create runoff across the property lines or onto any paved surface; and
(8) is distributed by a surface or subsurface system that does not spray into the air.
(d) Each builder is encouraged to:
(1) install plumbing in new housing in a manner that provides the capacity to collect graywater or alternative onsite water from all allowable sources; and
(2) design and install a subsurface graywater or alternative onsite water system around the foundation of new housing in a way that minimizes foundation movement or cracking.
(e) In this section:
(1) “Alternative onsite water” means rainwater, air-conditioner condensate, foundation drain water, storm water, cooling tower blowdown, swimming pool backwash and drain water, reverse osmosis reject water, or any other source of water considered appropriate by the commission.
(2) “Graywater” means wastewater from clothes-washing machines, showers, bathtubs, hand-washing lavatories, and sinks that are not used for disposal of hazardous or toxic ingredients. The term does not include wastewater:
(A) that has come in contact with toilet waste;
(B) from the washing of material, including diapers, soiled with human excreta; or
(C) from sinks used for food preparation or disposal.