Skip to main content

Deep Dive: Texas Lawmakers' Plans for Water Infrastructure Funding

Published Mar 14, 2025 by Jordan Overturf

Texas State Capitol in Austin

Texas lawmakers are moving forward with securing the state's long-term water future with sweeping new legislation aimed at increasing water availability and funding critical infrastructure improvements. Senate Bill 7 (SB 7) lays out a comprehensive framework to address these challenges, reinforcing the state’s commitment to sustainable water solutions.

The Partnership joins Texas 2036, a leading voice in the statewide coalition, in supporting this critical initiative. Filed by Sen. Charles Perry in early March, SB 7 represents one of the most anticipated policy measures of the legislative session.

Here's a look at the proposed legislation in both chambers.

What’s in the Bill?

Sen. Perry was emphatic about the need for Texas to deliver a solution. “Water scarcity is no longer a distant threat,” the senator said in his Thursday press release announcing the bill's filing. “It’s here, and it’s already disrupting the lives of Texans across the state. From West and South Texas, where agriculture is being strangled, to communities struggling to keep up with economic and industrial growth, the lack of water has become the biggest limiting factor for our state’s future.”

For decades, Sen. Perry has been a leading voice on this issue. SB 7 is the culmination of decades of work that saw its first taste of victory in 2023 with the creation of the Texas Water Fund. In SB 7, the plan includes three key components: expanded authority for the Texas Water Development Board to deliver funding for water projects, enhanced legislative oversight through the restructured Texas Water Fund Advisory Committee, and improved reporting and accountability measures.

What are ‘Sweeping Changes’?

SB 7 is targeting the following initiatives to bring new water resources across the Lone Star State:

  • Creates the Texas Water Fund Advisory Committee to provide oversight of all Texas Water Fund activities
  • Requires the Texas Water Development Board (TWBD) to submit a biennial progress report to the Legislature regarding projects financed with Texas Water Fund money
  • Creates the Office of Water Supply Conveyance Coordination to optimize water supply infrastructure construction for regional and statewide interconnection and interoperability
  • Protects non-saline groundwater reserves in the state’s rapidly depleting freshwater aquifers
  • Preserves local control over surface water rights
  • Authorizes TWDB’s state water bank program to purchase out-of-state water for importation to meet the needs of Texans across the state
  • Expands both project eligibility for financing from the New Water Supply for Texas Fund and the available methods of financing
  • Prioritizes wastewater treatment projects in rural communities and small cities for financial assistance
  • Adds the Flood Infrastructure Fund to the Texas Water Fund structure, allowing flood projects to be financed using the funding stream constitutionally dedicated by Senate Joint Resolution 66.

Click here to download the one-pager outlining the goals for SB 7 and Senate Joint Resolution 66.

What is in the House Bill?

There are many similarities between SB 7 and House Bill 16 (HB 16) by Representative Cody Harris. The latter is broader in scope, with differences in approach to water infrastructure development, financial allocations, legislative oversight, and reporting measures. Here are several highlights from HB 16:

  • Expands funding for produced water treatment projects, excluding those identified for oil and gas exploration
  • Emphasizes prioritization of rural populations (less than 150,000) and projects with significant progress on state/federal permitting
  • Allows funding transfers for the economically distressed areas program account and ensures funding for public water awareness, water conservation, and water loss mitigation
  • Slightly modifies the makeup of Texas Water Fund Advisory Committee—including a seat for Texas Department of Emergency Management
  • Expands the duties of the committee to conduct regular reviews of historically underutilized businesses participation, annual reports on statewide supply expansion, and direct oversight of state water project funding
  • Requires regular reports to the legislature with updates on project delivery, completed infrastructure repairs and economic benefits of funded projects

What’s Next?

HB 16 has already been referred to the House Committee on Natural Resources. SB 7 will likely be referred to the Senate Committee on Water, Agriculture, and Rural Affairs, which Sen. Perry chairs.

One version of the bill must pass the legislative process. If the House or Senate makes significant modifications after the first chamber's approval, a Conference Committee may be convened to reconcile the differences and finalize a unified version. The Partnership will continue to provide updates as the bill advances.

 

Related News

Education

New Report Highlights 'Substantial Improvements' at HISD Schools

4/22/25
A new report and podcast are casting a national spotlight on one of the most important education stories in the state – the dramatic turnaround at Houston ISD under Superintendent Mike Miles. The Manhattan Institute's City Journal's 10 Blocks podcast, which features public policy conversations, recently interviewed education analyst Neetu Arnold about her report on the reforms at HISD. Arnold discusses the New Education System, which has raised teacher pay at underperforming schools, expanded instructional time, and created a more structured learning environment. These changes have already shown promising results, including improved student outcomes and fewer disciplinary actions. In January, the 2024 National Assessment of Educational Progress (NAEP) results also showed the progress the district has made. Here are a few of the highlights: Fourth-grade reading proficiency saw a 4% rise compared to flat or declining trends nationwide.  In Fourth-grade reading, Black students reversed a long-standing decline, achieving an 8-point increase in their scale scores. Economically disadvantaged students, who make up 78% of HISD’s population, outpaced growth rates in comparable districts. For fourth-graders, the proficiency rate is approaching HISD’s historic high of 24% from 2011. In middle school, the 21% proficiency rate represents the highest reading performance in the past two decades. “The 2024 NAEP results speak for themselves and continue to validate the tremendous achievement gains we saw throughout last school year. This is a testament to our students and especially the teachers and staff who work every day in the classroom, providing high-quality instruction to every student.” - Greater Houston Partnership President and CEO Steve Kean said in January. The Partnership recognizes that a strong public education system is essential to creating economic opportunity, strengthening families, and securing Houston’s long-term competitiveness. Arnold acknowledges the initial resistance to these reforms, but points to the data-driven improvements as evidence of why bold action was needed. Her podcast interview makes the case that Houston ISD’s turnaround can serve as a model for other large urban districts across the country.    
Read More
Education

Texas School Accountability Back in Focus After Court Ruling

4/10/25
Texas policymakers, educational leaders, and parents all have a vested interest in ensuring public schools meet high standards—and that starts with a transparent, reliable school accountability system. Recent court rulings and legislative developments are shaping how performance is measured and how school districts are held accountable across the state. On April 3, the Texas 15th Court of Appeals overturned a lower court injunction, clearing the way for the Texas Education Agency (TEA) to release its 2023 school accountability ratings. The A-F Accountability ratings system, established in 2017, is designed to help parents, communities, and lawmakers better understand school quality and student outcomes. While the 2023 ratings are now set for release on April 24, the 2024 ratings remain under legal seal pending a separate ruling. In a concurring opinion, Chief Justice Scott Brister called on the Texas Legislature to prevent future lawsuits from stalling the accountability process, suggesting that these disputes should be addressed through an internal agency process rather than judicial means.  Lawmakers are actively considering legislation to strengthen the accountability framework. Senate Bill 1962 (SB 1962), authored by Senator Paul Bettencourt, recently advanced through the Senate Education K-16 Committee. This bill would prohibit school districts from using taxpayer dollars to sue the state over accountability ratings and would enhance the TEA Commissioner’s authority to enforce performance standards. A similar proposal, House Bill 4 by Chairman Brad Buckley, is under consideration in the House. The Greater Houston Partnership testified in support of SB 1962, reinforcing our belief that a rigorous, transparent accountability system is essential for Texas’ economic competitiveness and long-term workforce readiness.  For more updates and alerts on the Texas Legislature, click here to sign up for our weekly newsletter.
Read More

Related Events

Digital Technology

Houston’s AI-Driven Data Center Boom: Investment, Innovation, and Policy

As Houston rapidly evolves into a hub for AI, cloud computing, and data infrastructure, the city is experiencing a surge in data center investments driven by its unique position at the intersection of energy,…

Learn More
Learn More
Executive Partners