House advances bill that could provide billions of dollars for new water projects and fixing aging infrastructure

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A new fund to jumpstart massive water supply projects and fix aging water infrastructure across the state would be created under legislation that received approval from the Texas House on Wednesday, in a vote of 136-8.

The fund could get between $1 billion and $3 billion to start, early draft budgets from the House and the Senate indicate.

Senate Bill 28, which passed the Senate in early April, would create a special Texas Water Fund that the Texas Water Development Board, the state water agency that often acts as a large bank for financing water projects, could use for water supply projects and upgrades to existing water infrastructure.

It would also create the New Water Supply for Texas Fund with a mission to create 7 million acre-feet of water in Texas over the next 10 years — an amount that’s more than four times what Lake Livingston, one of the state’s largest reservoirs, can hold.

“At some point, what gets the needle moving on big projects and what brings people to the table with solutions is real cash,” Sen. Charles Perry, R-Lubbock, said in an interview with The Texas Tribune. “The state has a role to lead, to push and to provide a clear direction that we’re serious.”

Climate change has brought higher temperatures that accelerate evaporation rates from reservoirs and dry soil more quickly, meaning less water flows into rivers and streams. At the same time, rising temperatures and warmer oceans — which increase the amount of water in the air — increase the risk of extreme rainfall events in Texas: The state could see 30% to 50% more extreme rain events by 2036 compared with 1950-99, the state climatologist found. Significant flooding and extreme rain events are more frequently following droughts, according to the Fourth National Climate Assessment.

The bill, authored by Perry, would limit money from the New Water Supply for Texas Fund to a handful of ideas, including funding marine and brackish water desalination plants and acquiring water from other states. The House added aquifer storage, potable reuse projects, or treating wastewater for drinking water, and water loss mitigation projects to that list, one of the differences between the two chambers’ versions of the bill that will have to be resolved before it can be finalized and sent to the governor.

But those projects would not need to be included in Texas’ statewide water supply plan, which anticipates and plans for the state’s water needs over a 50-year time horizon, in order to access the new water supply money — a major departure from previous water planning.

Typically, water supply projects are financed through the State Water Implementation Fund for Texas, or SWIFT, which issues bonds to provide low-cost loans. Projects must be included in the state’s water plan in order to receive funding.

Some groups have raised concerns that the new fund would operate outside of Texas’ typical process, potentially leading to less oversight and planning.

“I just don’t think it makes sense to exempt investments in water supplies from strategies in the state water plan,” said Jennifer Walker, director of the Texas Coast and Water Program at the National Wildlife Federation.

She argued that it will require time, money and resources from the agency to create a new process rather than working within an existing one that is already functioning quite well.

But Perry countered that while SWIFT is a good program, it hasn’t delivered the kind of massive billion-dollar projects he thinks the state needs to pursue more aggressively.

Texas’ existing water supply plan relies heavily on building new reservoirs — an idea Perry has criticized in the past for moving too slowly or being unrealistic. Perry’s vision is that the money would be used to help kick off a handful of ambitious, billion-dollar water projects that could provide water for multiple regions of the state.

“I’m not looking for plans,” Perry said. “I’m looking for action.”

While Perry in the Senate is bullish on large water supply projects, state Rep. Tracy King, D-Batesville, who sponsored the bill in the House, is concerned about deteriorating water infrastructure across the state, particularly in small and rural communities.

King said that while SWIFT works well, many communities — especially small and low-income communities — aren’t able to navigate the complex application processes that require significant money and resources to compete for the low-cost loans. As a result, rural areas receive only a fraction of a percent of the bonds for state water supply projects, a state report showed last year.

Meanwhile, their old infrastructure leaks water, which hurts the state’s overall water supply. Texas lost about 136 billion gallons of water in 2020 and 132 billion gallons of water in 2021 — roughly the capacity of Lake Conroe — according to data submitted by public water suppliers to the TWDB.

“It’s my hope that’s what most of the funds will be for,” King said. “That’s my focus.”

Flexibility is a key goal for water conservation groups and water industry professionals alike.

Sarah Kirkle, the director of policy and legislative affairs for the Texas Water Conservation Association, which represents water professionals including water districts and authorities and groundwater conservation districts, said that the group is supportive of the potentially large state investment, but has advocated for giving the Water Development Board “the largest amount of flexibility” possible to address the many problems across the state.

Alex Ortiz, a water resources specialist at the Lone Star Chapter of the Sierra Club, said that he expects the Texas Water Fund will function as a sort of umbrella from which the agency could have broad discretion to distribute money — although the House version appears to give more of that discretion to the agency than the Senate’s version.

The state’s water needs are going to be much more expensive than what Senate Bill 28 and its companion legislation are proposing to spend: Texas likely needs more than $60 billion to fix its water infrastructure over the next two decades, according to a national survey by the Environmental Protection Agency.

As demand for water continues to increase with population growth and supplies dwindle as climate change worsens, Texas could be short between 5 million and 7 million acre-feet of water during a statewide drought of record by 2070.

“No matter where it lands, all of it is just a drop in the bucket compared to what the state’s need is,” Kirkle said.

The House first gave initial approval to Senate Bill 28 and its companion Senate Joint Resolution 75 to create the new funds on Tuesday. If the proposals become law, the measure will go before Texas voters in the November election.

“We are in dire need of significant financial investment in water infrastructure and water supply, without which, Texas will not continue to prosper,” King said on the floor of the House Tuesday. “The immediate need addressed by this bill cannot be overstated.”

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