The model is based on Cradle Mountain Water's rebate scheme, which it adopted after the legislative requirement to provide concessions expired last year.

A local government working group is nutting out the details for how the system would work under the council-owned company, which set to start on July 1.

"The intention would be by July 1 to have in place a set of arrangements for not-for-profits where they would be able to demonstrate they meet the requirements and they would be then give the concession," Local Government Association of Tasmania chief executive Allan Garcia said.

"The big whammy is what's the cost of that."

The group is considering whether the cost should be borne by the company or come from the councils' yearly dividends, however, these payments are not guaranteed.

The water reform process, which started in 2009 with the formation of the three regional water companies, brought with it concerns over how not-for- profits are charged.

Many organisations are just getting water and sewerage bills for the very first time having previously received exemptions from councils.

It's unlikely that not-for- profits would get any assistance from the incoming water corporation if they didn't own the land they operated from.

In many cases not-for- profits operate on council- owned properties such as sports grounds and community halls.

"So if the councils determined that in some way, shape or form they wanted to give concessions ... to particular sporting clubs that would be their choice," Mr Garcia said.

A local government selection committee is expected to announce a chairman for the new company, likely to be called Taswater, in the next fortnight.