SB 1261 Texas Senate · 89th Legislature (2025)

Relating to the financing of water supply projects included in the state water plan; authorizing the issuance of obligations.

SB 1261 authorizes Texas water agencies and districts to issue bonds or other debt instruments to finance large-scale water supply projects. It specifically applies to projects included in the state water plan that have cumulative capital costs of at least $750 million. The law creates new Chapter 1373 in the Government Code, allowing issuers to finance or refinance these qualifying projects without conflicting with other state laws. It explicitly excludes projects funded through the Texas Water Development Board’s existing programs. This legislation provides a new financing mechanism for major water infrastructure, directly affecting local water authorities and districts planning large-scale projects aligned with the state water plan.

Bill status signed all 5 stages cleared

Introduction

Feb 2025

Committee Review

May 2025

Senate Passage

May 2025

House Passage

May 2025

Signed into Law

Jun 2025

Introduced Feb 13, 2025 Signed Jun 20, 2025

Maddy AI version diff · 2 comparisons

What changed between versions

Engrossed → Enrolled · 6 edits · Jun 20, 2025

MODERATE

This bill enacts new provisions for financing water supply projects included in the state water plan by adding Chapter 1373 to the Government Code. It establishes rules for issuing obligations (bonds) to fund eligible projects, including security requirements, maturity terms, and attorney general approval processes. The bill also amends existing Water Code sections to reference the new chapter and expand financing options for water projects.

Scope change

The bill adds a new chapter (Chapter 1373) to the Government Code specifically for financing water supply projects in the state water plan, while also modifying existing Water Code sections to incorporate references to this new chapter.

SCOPE

Added Chapter 1373 to the Government Code to create a new framework for issuing obligations to finance water supply projects included in the state water plan.

ELIGIBILITY

Defined 'eligible project' as one or more related water supply projects identified as recommended water management strategies in the state water plan with cumulative capital costs of at least $750 million.

REQUIREMENT

Established requirements for obligation authorization, including maximum amounts, terms, interest rates, and mandatory attorney general review and comptroller registration before obligations can be issued.

Amended Water Code sections 15.435(c), 15.474(a), 17.852(5), and 17.957(c) to include references to the new Chapter 1373 and eligible projects defined therein.

FISCAL

Specified that obligations can be secured by proceeds from other obligations, revenue bonds, water supply contracts, or combinations thereof, but not by ad valorem taxes.

TIMELINE

Set the effective date of the Act as September 1, 2025.

Introduced → Engrossed · 10 edits · Apr 22, 2025

MAJOR

This bill amends the Texas Government Code to create a new chapter (1373) that allows political subdivisions to issue bonds for water supply projects included in the state water plan, with a minimum cumulative cost threshold of $750 million. It also modifies existing Water Code sections to align with the new chapter's definitions and expand financing options for eligible water projects.

Scope change

The bill adds a new chapter (1373) to the Government Code specifically for issuing obligations for water projects, while modifying existing Water Code sections to reference this new chapter.

SCOPE

Added a new Chapter 1373 to the Government Code establishing procedures for issuing bonds and obligations for water supply projects included in the state water plan.

ELIGIBILITY

Changed the minimum cumulative cost threshold for eligible projects from $750 million to $750 million (no change in amount, but clarified as 'capital costs').

Modified the definition of 'Eligible project' to specify that projects must be identified as recommended water management strategies in the state water plan.

REQUIREMENT

Added new requirements for attorney general review and comptroller registration before obligations can be issued or incurred.

Added a new section requiring obligation authorizations to establish maximum amounts, terms, interest rates, sale methods, and pledged sources before obligations can be issued.

DEFINITION

Modified the definition of 'Issuer' to include a broader range of entities including agencies, authorities, boards, bodies politic, departments, districts, instrumentalities, municipal corporations, political subdivisions, public corporations, or subdivisions of the state.

FISCAL

Modified the maximum term for obligations from 40 years to 50 years for eligible projects, and updated loan repayment terms in the Water Code to allow up to 40 years for eligible projects.

Modified the Water Code to allow the Texas Water Development Board to provide financial assistance for eligible projects with repayment terms up to 40 years.

ENFORCEMENT

Added provisions stating that obligations approved by the attorney general and registered by the comptroller are incontestable in court and valid, binding, and enforceable.

TIMELINE

Added an effective date of September 1, 2025 for the Act.

Floor votes · House May 20, 2025

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Jun 20, 2025

Signed into law

Signed by the Governor

executive

May 22, 2025

Lower · Passed

Signed in the House

lower

May 22, 2025

Upper · Passed

Signed in the Senate

upper

May 21, 2025

Upper · Passed

House passage reported

upper

May 21, 2025

Lower · Passed

Passed

lower

May 20, 2025

Amended

Amendment fails of adoption

lower

May 20, 2025

Introduced

Amendment(s) offered

lower

May 20, 2025

House · Passed

House Vote: pass (123-14-6)

house

May 5, 2025

Lower · Passed

Committee report sent to Calendars

lower

May 5, 2025

Lower · Passed

Committee report distributed

lower

Apr 29, 2025

Lower · Passed

Reported favorably w/o amendment(s)

lower

Apr 24, 2025

Committee

Referred to Natural Resources

lower

Apr 24, 2025

Introduced

Read first time

lower

Apr 23, 2025

Introduced

Received from the Senate

lower

Apr 22, 2025

Upper · Passed

Passed

upper

Apr 22, 2025

Upper · Passed

Passed to engrossment as amended

upper

Apr 22, 2025

Upper · Passed

Amended

upper

Apr 22, 2025

Introduced

Amendment(s) offered

upper

Apr 9, 2025

Upper · Passed

Committee report printed and distributed

upper

Apr 9, 2025

Upper · Passed

Reported favorably as substituted

upper

Apr 7, 2025

Upper · Passed

Vote taken in committee

upper

Apr 7, 2025

Upper · Passed

Testimony taken in committee

upper

Feb 28, 2025

Committee

Referred to Water, Agriculture, & Rural Affairs

upper

Feb 28, 2025

Introduced

Read first time

upper

2 primary · 1 co-sponsor