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

Texas Lawmakers Continue Reforming Small Colleges to Add More ‘Credentials of Value’

6/23/25
Houston is one of the nation’s biggest hubs for young professionals, thanks to strong job growth and an affordable cost of living. Between 2020 and 2024, the region added an estimated 240,000 new jobs, part of a broader economic boom across Texas. Now, a new law aims to build on that momentum by expanding access to workforce training and education programs. Senate Bill 1786 (SB 1786) was signed into law on May 27 and takes immediate effect to remove barriers for Texans seeking to enroll in local community and junior college programs. Additional provisions, including regional job demand studies and data analysis, will take effect on September 1. Free Courses for Disadvantaged StudentsSB 1786 expands free dual credit courses for economically disadvantaged students in grades 9–12, helping more Texans earn college credit before graduation. The law also addresses delays in the Texas Higher Education Coordinating Board’s rulemaking for financial aid, speeding up access to grants and loans. It improves coordination across state and federal programs, including Jobs and Education for Texans (JET), P-TECH early college high schools, and TRUE reskilling programs. These changes will begin with the 2025–26 school year. Aligning Funding with Workforce Needs SB 1786 builds on the 2023 overhaul of the state’s community college finance system by tying funding to student outcomes, specifically: Earning degrees or industry-recognized credentials that lead to well-paying jobs Successfully transferring to four-year universities Completing targeted dual credit coursework Supporting  Business Growth and Regional Competitiveness By strengthening access to high-value credentials and aligning education funding with workforce outcomes, SB 1786 reinforces the region’s position as a destination for business investment and expansion. These reforms help ensure Houston has a pipeline of skilled talent ready to meet the needs of employers in high-growth sectors such as energy, life sciences, advanced manufacturing, and technology. As the Partnership works to attract companies and jobs to the region, these policies send a strong signal that Houston is preparing its people for the careers of tomorrow. The law also strengthens the definition of a “credential of value” as one that helps a student earn more than a high school graduate and justifies the cost of their education. Credentials in high-demand sectors, such as healthcare and education, may also qualify. These updates will take effect in the 2027–28 school year. Workforce-Driven Reform The goal of SB 1786 is to reduce redundancy, maximize impact, and ensure postsecondary programs are aligned with the needs of Texas employers. By supporting this legislation, Houston’s business community is helping to sustain a robust talent pipeline for years to come.  
Read More
Education

Texas Lawmakers Expand Focus on High-Growth, High-Wage Job Training for High Schoolers

6/23/25
This week, the Partnership highlighted the Texas Legislature’s work to deliver a new pathway for college, career, and military readiness in public schools. House Bill 120 expands programs that enable high school students to focus on career-oriented education. Building on that foundation is House Bill 20 (HB 20), which prescribes the types of high-growth, high-wage jobs for which Texas students can now earn high school credit. The goal of the bill is to improve outcomes for high school juniors and seniors by allowing them to focus their classwork on industry-aligned skills rather than solely traditional courses. Prescribed Career Programs HB 20 specifies 20 targeted high-wage, high-growth occupations. Here’s the list of eligible career fields: Automotive technology  Aviation maintenance Carpentry Construction management and inspection Diesel and heavy equipment Electrical Electronics technology Heating, ventilation, and air conditioning Industrial maintenance and processes Information technology and cybersecurity Manufacturing and industrial technology Masonry Mechanical and aerospace engineering Oil and gas exploration and production Plumbing & pipe fitting Refining and chemical processes Robotics and automation Sheet metal Transportation, distribution, and logistics Welding Partnering with Local Colleges and Universities The bill requires public school districts to partner with local colleges and universities to offer these courses. This builds on the Legislature’s work from the 2023 session to expand the ability of community colleges to provide credentials of value. One key change is that students participating in these courses will receive high school credit, and the classes will be factored into the per-student funding formula for school districts. Students may also earn a Level 1 or Level 2 certification, credentials that can make them immediately hirable for in-demand job opportunities after graduation.  Prepared to Extend the Program HB 20 limits the program to a five-year pilot period ending in 2031. However, lawmakers have the authority to extend the program based on the outcome. The Texas Education Commissioner is also authorized to adjust the prescribed industries every five years to match job market needs.   Ready to Explore High-Growth Careers? Start Here. Do you have a Texas high school student or recent graduate exploring their career path? The Kinder Institute offers a Workforce Demand Dashboard that highlights high-demand jobs and career clusters, with a focus on specific industries. This tool helps students make informed decisions using real-time data on skills, wages, and opportunities. 
Read More

Related Events

Membership

Future of Texas | Texas Lawmakers Reflect on the 89th Texas Legislature

The Partnership invites Houston-area lawmakers for a panel discussion on the 89th Texas Legislature. Join us as we explore the topics tackled during the most recent legislative session in Austin. Water, workforce,…

Learn More
Learn More
Executive Partners