The Impact of New Texas Laws, Part 1: Water

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Travis Kelly

Government Affairs

Water won big at the Texas capital this year, with lawmakers devoting more than $1 billion to needs across the state for water supply projects, infrastructure upgrades, flood resilience, water project funding and public education about water issues. This means major new resources for water utilities and communities.

The money will flow through programs administered by the Texas Water Development Board – some existing and some brand new.

What To Expect

Together, Senate Bill 28 and Senate Joint Resolution 75 create the Texas Water Fund and the New Water Supply Fund. If Texas voters approve a constitutional amendment on Nov. 7, the state will put a one-time transfer of $1 billion into the Texas Water Fund for new water projects and infrastructure upgrades/repairs, particularly in rural communities. Separate legislation clarifies that rural areas generally are not located near urban areas with more than 50,000 residents.

TWDB will also have the authority to use this money for developing new water sources, providing financial assistance and promoting public awareness about water statewide. The Board can transfer Texas Water Fund resources to other funds it manages, including the State Water Implementation Fund For Texas, which helps communities with projects contained in the state water plan.

Multiple types of projects could be eligible for funding as new water sources:

  • Desalination, including marine and brackish water
  • Produced water treatment, except projects strictly for oil and gas exploration
  • Aquifer storage and recovery
  • Infrastructure to transport water from these new sources

The Board is preparing rules for allocating these new funds to be ready in anticipation that voters will approve the amendment.

Boosts For Existing Programs

Flood Relief: SB 30, the supplemental appropriations bill, provided $625 million for the Flood Infrastructure Fund (FIF), which helps communities with flood control, flood mitigation and drainage projects in conjunction with the state flood planning process. Separately, the Legislature approved additional staff positions to help the Board review and process applications. HB 1, the main appropriations bill, also included almost $19.5 million for flood-related programs.

Federal Funds: SB 30 also provided $125 million as the local match to bring in an estimated $757 million in federal funds for TWDB’s most popular loan programs, the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund.

Rural Assistance

Two separate but related new laws that take effect in September aim to help rural communities’ access to funding for water-related improvements.

SB 469 updates the Texas Water Code to provide a uniform definition of a “rural political subdivision.” This will help ensure that funds intended for rural areas actually end up in rural areas and that small towns (less than 10,000 population) located near urban areas are eligible for these funds. Rural areas generally are defined as not located near urban areas with more than 50,000 residents. A town partly within an urban service area can qualify as “rural” if the population is 10,000 or less.

HB 3582 revises the Water Code so that rural political subdivisions located within urban regions qualify for FIF funds. This legislation also clarifies that only those projects included in the state flood plan will be eligible for FIF funds once the plan is adopted.

How Freese and Nichols Can Help You

As a full-service engineering/planning/architecture firm, we are dedicated to helping our clients plan and provide for their communities’ infrastructure needs. In addition to offering wide-ranging technical expertise, we monitor state and federal legislation from conception to law so we can understand available resources and match projects with potential funding sources. Our holistic approach can guide you with these and other funding options to successfully complete any size project.

Learn more about our services:

For questions, contact Travis Kelly,, 214.709.8417, or your Freese and Nichols project manager.

More to come: Look for future articles in this series that discuss legislative changes affecting transportation, local authority and major regulatory agencies.

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Travis Kelly helps municipalities and other public entities navigate legislative and regulatory processes affecting their projects. He is based in Fort Worth.