Given these messages from state leadership, the stage was set for a big policy discussion on the state’s financial strategy for addressing water infrastructure needs. By the time the 89th Legislature adjourned on June 2, three bills were passed responsive to that call for a “Texas-sized” investment in water infrastructure. They were HJR 7 (Proposition 4), SB 7 and HB 500. Combined, these bills initiated the largest investment in state water infrastructure in Texas history, potentially inaugurating a new era of water infrastructure development on a scale not seen since the widescale development of new reservoirs across the state in the mid-20th century. PROPOSITION 4 (HJR 7) Proposition 4, which was approved as HJR 7 by Harris, R-Palestine, during the regular legislative session, represents the cornerstone of the 89th Legislature’s efforts. On Nov. 4, 2025, just over 2 million Texans voted to approve Proposition 4. This historic measure amended the Texas Constitution to authorize the dedication of $1 billion in sales tax revenues to the Texas Water Fund for a period of 20 years starting in state fiscal year 2028. Assuming that the Legislature does not suspend this revenue dedication due to a disaster declaration, up to $20 billion will be used to pay for the water infrastructure Texas needs, including water supplies, infrastructure upgrades, and flood protection projects. SENATE BILL 7 SB 7 by Perry, R-Lubbock, made changes to general law in anticipation of final approval of Proposition 4 in November's election. Where Proposition 4 provides the framework for providing dedicated funding to the Texas Water Fund, SB 7 makes several policy changes with regard to how those funds will be
allocated and for legislative oversight and performance accountability of the Texas Water Development Board’s (TWDB) administration of the Texas Water Fund. Perhaps the most salient provision in SB 7 is the requirement that at least 50% of the $1 billion in annual dedicated revenues be allocated to water supply projects. This means that at least half, and possibly more, of the dedicated revenues from Proposition 4 will be used for water conservation, reuse, desalination, aquifer storage, permitted reservoirs, and infrastructure capacity expansion projects, among others. The remaining amount may be used for fixing aging infrastructure and developing flood protection projects. In addition, SB 7 expanded the Legislature’s oversight of TWDB’s administration of the Texas Water Fund and introduced new performance measures to begin tracking Texas’ achievement and success with regard to addressing its long-term water infrastructure challenges. SB 7 created a permanent legislative committee, the Texas Water Fund Advisory Committee, that will review the overall operation, function and structure of TWDB’s administration of the Texas Water Fund. SB 7 also requires that the TWDB report on the state’s progress toward measures will provide the Legislature and the public with better data on how the dedicated revenue stream is helping address the state’s long-term water infrastructure challenges. Moreover, these data are essential for informing both the Legislature and taxpayers of their return on investment from dedicating state revenues toward water infrastructure needs. HOUSE BILL 500 While Proposition 4 and SB 7 establish a framework for a long-term, generational dedicated funding stream addressing water infrastructure challenges. These performance
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