2025 · Regular session · Senate bill
SB7
SB7 expands Texas water-project financing and directs the Texas Water Development Board to coordinate water-transport infrastructure.
Official caption: Relating to the oversight and financing of certain water infrastructure matters under the jurisdiction of the Texas Water Development Board.
Official report lists Senate author(s): Perry, Alvarado, Bettencourt, Blanco, Campbell, et al.. This does not identify sponsors or amendment drafters.
Bill explanation published · Version and amendment review scope is stated below · Individual amendment records may not be separately annotated.
Bill highlights
Selected points from the published explanation. Follow each point to its source-linked context; conditions and limits may matter.
- SB7 expands Texas water-project financing and directs the Texas Water Development Board to coordinate water-transport infrastructure.
- The New Water Supply for Texas Fund can support water and wastewater reuse, acquisition of out-of-state water or water rights, and reservoirs whose required land has been acquired and whose federal dredge/fill and state water permits have been issued.
- The board can purchase, hold and transfer out-of-state water or rights through the water bank.
- The Texas Water Fund can transfer money to additional destinations, including flood infrastructure, economically distressed areas, agricultural water conservation and its new administrative fund.
- For the Economically Distressed Areas Program, the annual bond-issuance ceiling becomes $100 million.
- Subject to legislative appropriation, the board must coordinate transport projects, encourage use of existing easements to reduce the need for eminent domain, and develop compatible infrastructure standards.
What does it do?
What SB7 does
SB7 expands Texas water-project financing and directs the Texas Water Development Board to coordinate water-transport infrastructure. It creates an administrative fund, changes funding priorities, consolidates legislative oversight, and requires a public progress tool. It is a financing and oversight framework—not itself a construction appropriation or a promise of lower water bills. Final law; official history.
Projects and financing
The New Water Supply for Texas Fund can support water and wastewater reuse, acquisition of out-of-state water or water rights, and reservoirs whose required land has been acquired and whose federal dredge/fill and state water permits have been issued. Existing desalination, produced-water treatment (not projects solely for oil and gas exploration), and aquifer storage and recovery categories remain. Transport/integration projects are eligible, but the statute excludes Texas-well groundwater that is not part of a qualifying project. Acquiring another person’s right to impound, divert or use state water through this fund must be by water-supply contract or lease, not an outright purchase of that right. Sections 1.02–1.05 and 1.12–1.13.
The board can purchase, hold and transfer out-of-state water or rights through the water bank. Those out-of-state transfers are exempted from Water Code 11.036’s supply-contract rules; this is not an exemption from all water law. State-participation financing is broadened to new-water projects. SB7 removes the requirement that at least 50% of annual state-participation-account spending go to interregional projects and removes a restriction barring further state-participation-account-II assistance if none had been provided before September 1, 2024. Other eligibility requirements remain. Sections 1.02 and 1.12–1.16.
The Texas Water Fund can transfer money to additional destinations, including flood infrastructure, economically distressed areas, agricultural water conservation and its new administrative fund. A portion must support the listed priorities, including rural communities and municipalities below 150,000 people, deficient water/wastewater infrastructure, conservation, water-loss reduction and applicant technical assistance. Except for administrative transfers and transfers to the State Water Implementation Fund for Texas (SWIFT), project applications must be approved before transfers. Transferred money may not be restored to the Texas Water Fund. Sections 1.05 and 1.07–1.10.
For the Economically Distressed Areas Program, the annual bond-issuance ceiling becomes $100 million. The ceiling for assistance not requiring repayment rises from 70% to 90% of the specified total authorized bond principal plus outstanding interest. This is a program-wide ceiling, not a guarantee that any project receives a 90% grant. Sections 1.14–1.15.
Administration and accountability
Subject to legislative appropriation, the board must coordinate transport projects, encourage use of existing easements to reduce the need for eminent domain, and develop compatible infrastructure standards. It must recommend spare capacity where practicable. This does not prohibit eminent domain. Each fiscal year, the board may transfer up to 2% of that year’s Texas Water Fund deposits to the separate administrative fund. An agreement may cover up to $2 million of environmental-agency staffing expenses incurred through August 31, 2027, for reviewing funded water-project permits; that authority expires September 1, 2028. Sections 1.01 and 1.07–1.10.
An eight-member Texas Water Fund Advisory Committee replaces the earlier arrangements. It includes the comptroller, emergency-management director, the two legislative water-committee chairs and four appointed legislators. It reviews the water, SWIFT, flood-infrastructure and infrastructure-resiliency funds at least twice yearly; it is exempt from Sunset abolition review. It must evaluate the feasibility of state ownership/construction/operation of water projects. Access to records does not remove existing confidentiality protections. Annual reporting on historically underutilized businesses remains in the specified SWIFT-related projects. The board must maintain a public online tool covering water needs, project commitments, projected supply gains, transfers and funding gaps. Articles 2–3.
Using existing resources, the board’s executive administrator must study adding wastewater planning to the state water-planning process beginning with the five-year period ending January 5, 2032. Findings are due December 1, 2026; the study provision expires May 31, 2027. It orders a study, not automatic adoption of a new planning system. Section 1.11.
Dates and the separate constitutional amendment
SB7 was signed June 20, 2025 and generally took effect September 1, 2025. Sections 1.04, 1.06 and 1.09 take effect September 1, 2027, contingent on voter approval of HJR7. The governor’s November 19, 2025 certification records adoption of Proposition 4 (HJR7), satisfying that condition. The 2027 provisions are not yet effective as of this November 1, 2026 review. Article 4.
Separately, HJR7 dedicates the first $1 billion of annual net state sales/use-tax revenue above $46.5 billion to the water fund, subject to the constitutional qualifications, beginning September 1, 2027 and ending August 31, 2047. It requires legislative appropriations for transfers from this revenue account and permits suspension of allocations during a declared disaster through the specified budget or legislative process. SB7 reserves at least 50% of these constitutional deposits for the new-water fund, SWIFT, or both; that allocation provision expires August 31, 2047. It is not an allocation of half of every existing water-fund dollar. Sections 1.04, 1.06 and 1.09.
HJR7 forbids using its dedicated revenue through the new-water fund to finance infrastructure transporting nonbrackish groundwater produced from Texas wells. Its aquifer-storage/recovery restriction applies only when the injected water was that groundwater. For this rule, SB7 defines brackish water as having at least 3,000 milligrams per liter of total dissolved solids when produced. The restriction is on the described financing, not a universal groundwater-transport ban. HJR7, Article VIII Section 7-e(c); SB7 Section 1.04.
What changed along the way?
How the bill changed
The version index contains introduced, Senate-substitute, engrossed, House-substitute and enrolled texts. The Senate substitute replaced the introduced separate coordination office with duties assigned to the board, added the temporary permitting-staff agreement and refined eligible reservoirs and transport projects. The House substitute added reuse and out-of-state acquisition categories, distressed-area and agricultural-fund destinations, the bond/grant ceilings, and the public online tool; it made coordination subject to appropriation. These were committee substitutions, not floor amendments. The Senate concurred in the House changes May 30; no conference version is listed. History.
All eight indexed amendments were reviewed against their target versions and the final law. The five Senate amendments offered by Perry were adopted April 2: F1 created an administrative account and required a 2% transfer, but the final law instead uses a separate fund and a discretionary annual ceiling of 2%; F2 added transport eligibility for imported water, whose eligibility remains in the final law’s recast categories; F3 refined the nonbrackish-groundwater restriction for aquifer storage/recovery, but that exact statutory clause was removed by the House substitute—the final SB7 definition works with the separate HJR7 financing restriction; F4 added confidentiality protections that survive; F5 changed the constitutional trigger from SJR66 to HJR7, which survives. Final comparison.
The adopted Harris House amendment (H21) restored explicit administrative-fund transfer authority and eligible expenses, clarified the annual 2% limit, added the brackish definition and 50% allocation, prohibited restoration of transferred money, added the wastewater study and aligned conditional dates with September 1, 2027. These provisions appear in the enrolled law. The Martinez Fischer/Lujan amendment to H21 (H22) would also have treated groundwater in designated brackish-production zones as brackish; it was tabled and that alternative is absent. The Morales Shaw third-reading amendment (H31) would have prioritized certain offshore/non-bay marine-desalination projects in both new-water and rural-water assistance; it was withdrawn and those priorities were not enacted in SB7. Recorded dispositions.
For the full amendment record, open the official amendment index.
Official bill versions
Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.
Who could benefit—and who could bear the costs?
Who could benefit—and who bears costs
Eligible local water providers and the people they serve could benefit from broader financing choices, infrastructure rehabilitation and technical help. Distressed-area applicants may benefit from greater bond and grant capacity. Project sponsors may benefit from coordinated infrastructure standards. These are opportunities subject to funding, applications and eligibility—not guaranteed awards, new water volumes or household savings. Landowners may benefit if coordination reduces new easements, but SB7 does not eliminate property-acquisition disputes. Final financing and coordination provisions.
The May 28 final fiscal note estimates no net impact on General Revenue-related funds in fiscal years 2026–27, but not zero public cost. It estimates administrative-fund costs of $6,834,884 in FY2026 and $5,872,784 in FY2027, with 43 additional full-time-equivalent employees. For FY2028–30 it estimates administrative-fund costs of $18,048,584, $17,208,583 and $17,220,583 respectively, plus $1,077,167 annually from the dedicated Water Resource Management Account, and a staffing level 143 full-time-equivalent positions above FY2025 in each of those years—not 143 new hires every year. These are estimates, not spending already incurred or jobs already filled.
The estimate assumes sufficient legislative appropriations to capitalize and spend from the administrative fund, and future constitutional revenue. It explains that the annual 2% authority cannot simply be applied to the original FY2024 deposit or its remaining balance. SB7 makes no appropriation. Local financial assistance’s amount and timing were undetermined. The fiscal methodology’s FY2026–27 environmental-agency staffing costs total about $2.23 million, while the statutory agreement ceiling is $2 million; the estimate does not authorize exceeding that ceiling. Fiscal methodology; Section 1.07.
Earlier fiscal notes reflected different designs and funding assumptions: the House-substitute note projected $10,476,834 in General Revenue costs for FY2026–27 because administrative-fund transfer authority and eligible expenses were incomplete. H21 addressed those issues; the final note assigns costs to the administrative fund under appropriation assumptions. The final note’s narrative also describes the groundwater restriction in the wrong direction (it says “not less than 3,000” is prohibited). This explanation follows HJR7’s nonbrackish restriction and SB7’s definition, not that narrative sentence.
Review boundary: full final text, all listed versions, all eight amendment texts/dispositions, all six fiscal-note postings, the companion constitutional text and official adoption certification were checked. Repeals were compared with August 31, 2025 statutory text. This explains enacted authority and fiscal estimates; it does not independently audit actual construction, current grant awards, agency hiring or household bills.
Official sources
- Bill history and latest recorded action
- Bill versions, analyses and fiscal notes
- Action history and votes
- Amendment index
Catalog report retrieved 2026-10-25. Check the official record for corrections or later changes.
