SB1261

The issuer’s governing body must approve an authorization setting debt amount, term, maximum interest rate, sale terms and pledged sources. It may delegate specified sale decisions to officers or employees. The attorney general reviews the authorizing proceedings and pledged contracts for constitutional and statutory compliance; the comptroller registers the proceedings. Approved and registered obligations and pledged contracts receive the act’s binding, enforceable and incontestable status. Chapter 1373 also controls conflicting statutes or municipal charters, calls for broad construction, and applies existing chapter 1207 to debt refinancing. These are substantial financing and legal-finality powers, not permission to ignore the Constitution. Final law, sections 1373.003–.004 and .009–.013.

Separately, the act lets qualifying large projects use a 40-year rather than 30-year ceiling for the specified state bond-enhancement-supported facility loans, still limited by the facility’s expected useful life. It adds eligible projects to the State Water Implementation Revenue Fund’s financing provision, the Texas Water Resources Fund’s project definition and the state participation account’s permitted projects. These Water Code changes are distinct from the new chapter’s 50-year borrowing authority. Final law, sections 2–5; Prior loan limit; Prior revenue-fund uses; Prior resources-fund definition; Prior participation-account uses.

The Senate substitute made the project grouping “related” and the threshold “capital” costs; replaced the political-subdivision-only issuer definition with a broader public-issuer list; replaced enumerated debt instruments with bonds, notes or other obligations; banned property-tax pledges instead of allowing them after an election; and raised the new borrowing ceiling from 40 to 50 years. It also excluded board financial assistance from the new chapter and removed the introduced requirement for the board to make requested multiyear commitments for projects taking over four years. The original property-tax-election option and mandatory multiyear commitment are not enacted law. Introduced bill; Senate substitute.

Perry’s Senate floor amendment passed and removed the proposed amendment to section 15.432(b), which would have separately added eligible projects to the State Water Implementation Fund’s general use provision. The other Water Code changes above survived. House amendment 1 failed: it would have limited this chapter’s financing of projects requiring eminent domain to before the 50th anniversary of their first inclusion in a state water plan, with an exception for projects having a water right issued by the Texas Commission on Environmental Quality on or before September 1, 2025. That restriction did not become law; its rejection does not itself create a new power to take land. The Senate-passed, House committee and final texts otherwise match. Adopted Senate amendment; Failed House amendment; Amendment index; Five versions; Dispositions.

Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.

Public project sponsors gain financing options and potentially longer repayment schedules; water customers and other pledged-revenue sources may carry repayment commitments for decades. Legal finality can help financing certainty but limits later challenges to approved obligations and the engineer’s useful-life finding. The property-tax ban is limited to this new borrowing authority, not a promise that all water projects are free of property-tax financing or that customer bills will fall. Final law, chapter 1373.

The April 29 engrossed fiscal note says total state and local impacts cannot be determined, because project applications and timing are unknown. It estimates three additional board staff positions costing $446,268 in fiscal 2026 and $421,068 in fiscal 2027, and warns that faster fund use could reduce interest income. These are estimates, not appropriated amounts or the total price of water projects. The April 6 and April 9 earlier notes were also read. Some fiscal-note descriptive language retains earlier financing assumptions; the enacted text controls the limits and exclusions stated above. Latest fiscal note; Introduced fiscal note; Substitute fiscal note.