Water Wins and Losses at the 89th Texas Legislature

Texas Living Waters’ organizations worked collaboratively during the 89th Legislative session to support and put forth policy that would protect our water resources and ensure healthy, safe, reliable water supply and infrastructure for all Texans. 

Prior to the 89th session, our team developed a set of policy priorities that focused on building upon the positive outcomes from prior sessions while considering the potential for new legislation and investments of state resources. From water supply to flooding, new supply to leaky pipes, our state’s water-related needs are as substantial and complex as one would expect in such a large state. We want to ensure that Texas is equipped to meet these challenges in a manner that maximizes positive outcomes for its people and ecosystems. 

We released research reports on seawater and brackish desalination, oil and gas produced water in Texas, and 10-year water conservation and water loss potential for Texas utilities. Desal, Produced Water and Conservation were all important parts of the water supply discussion and will continue to be in the future. As Texas substantially increases its investment in diverse water supply strategies in the coming years, we need to ensure that we have considered the risks and opportunities attached to each strategy and developed responsible guardrails for each.

During the legislative session, our team met with key legislators, got priority bills introduced, testified at committee hearings, and organized and coordinated with partner organizations – all in hopes of securing a better water future for Texas. 

Here are the key highlights from our work at the 89th Legislative Session:

Historic Funding Opportunities for Water Infrastructure and Supply

The 88th Legislature created the Texas Water Fund (TWF), and voters approved a $1 billion appropriation in November of 2023. As we entered the 89th legislative session, Senator Charles Perry – Chairman of the Senate Water, Agriculture, and Rural Affairs Committee – signaled his intent to push for another large one-time appropriation as well as an annual dedication of tax revenue to the TWF.

Throughout the 89th legislative session, Texas Living Waters partner organizations and other Texas water advocates worked collaboratively and engaged with decision makers to work out the fine details on bills that were finally passed, HJR 7 (Representative Cody Harris) and SB 7 (Senator Charles Perry). 

So what do these bills do? HJR 7 establishes dedicated funding of $1 billion per year for the next 20 years for water supply and water infrastructure. This is a first for Texas. It is a historic – and much needed – investment. These funds will be allocated among the financial programs that the Texas Water Development Board (TWDB) administers. 

HJR 7 allocates 50% of the funding to programs that are focused on developing new water supplies (the New Water Supply for Texas Fund and the State Water Implementation Fund for Texas). The other 50% is allocated to the other, well-established and much utilized, financial programs at TWDB. These programs can be used for agricultural water conservation, wastewater facilities, flood mitigation, developing new supplies, repairing failing infrastructure, planning for future growth and everything that our communities need to provide water now and in the future. 

SB 7 lays out additional details for the administration of water supply and water infrastructure funding. Notable additions are the inclusion of water reuse projects under the allowable projects for the New Water Supply for Texas Fund. Wastewater infrastructure projects have also been included under priority projects for the Texas Water Fund (the umbrella fund for all the programs at TWDB). This is important because wastewater is often overlooked in discussions about water infrastructure, but of course wastewater facilities also age and deteriorate over time. This simple change will greatly expand the state’s ability to mitigate the health and safety risks associated with infrastructure failure. The bill also directs TWDB to conduct a study of the incorporation of wastewater planning into the state water planning process, establishes an 8-member advisory committee that will submit comments on and review operation, structure and function of the financial programs administered by TWDB, and increases transparency by directing TWDB to make a wide variety of information associated with the administration of the Texas Water Fund available on the agencies website. The full text of SB 7 is available online. 

…but we can’t celebrate just yet, because the new dedicated funding must still be approved by voters this November. Stay tuned for information on this as it becomes available. 

In addition to the $1 billion annual funding destined for the November ballot, the Texas Legislature is also making a substantial one-time appropriation to the TWF. The House’s supplemental appropriations bill includes approximately $2.5 billion for water infrastructure. The funds break down as follows, $881 million of this is being transferred to the TWDB from the TWF funds appropriated last session and is therefore not additional funding, $581 million is set aside for earmarked projects (see SB 1, pages IX-88-IX-89 for list of projects), and $1.03 billion will be appropriated for new projects selected through TWDB project solicitations.

Vetoed: Improvements to the Texas Water Trust

The Texas Water Trust is an important tool to ensure that Texas rivers, streams and springs keep flowing. Unused water rights can be held in the Trust to meet environmental or conservation needs, but the statute previously focused on authority over surface water donations. HB 4530 by Rep. Ramon Romero, Jr., which enhanced the Trust and its support for environmental flows by making a small but important clarification to the process to help facilitate the donation of groundwater rights, was vetoed by Governor Abbott. In his veto proclamation, the Governor states that HB 4530 “fails to explain how groundwater percolating below the surface of the Earth is to be transferred to a surface water trust.”

Water Conservation is a Core Water Supply Strategy

Conservation and water loss mitigation are some of our most important tools for addressing water supply issues and ensuring that we can meet water supply needs in Texas communities. According to a recent National Wildlife Federation report, Texas utilities are planning to save about 272,000 acre-feet of water annually by the year 2034, enough water to meet the annual water needs of 1.7 million Texans. This will be done through implementing water conservation measures and reducing water loss. Utilities must have the tools to meet these goals. There were a few areas of progress this session to give cities the tools they need:

Rep. Erin Zwiener’s narrowly bracketed HB 2347 would have authorized Hays County to adopt a conservation program applicable to landscaping in unincorporated areas of the county. Most land in Texas is privately held and unincorporated, and most residential water usage is attributable to landscape irrigation. Water supplies are limited for Hays County, and the ability to enforce conservation restrictions on residential water use can make a big difference as its population continues to grow. Although it passed in the House with more than 100 votes, HB 2347 never received a hearing in the Senate.

Rep. Stan Gerdes’ HB 29 requires municipally owned utilities with more than 150,000 service connections to pay special attention to their water loss through the development of validated water loss audits and water loss mitigation plans. Many of these requirements are similar to what most utilities are required to do in Texas, but this bill requires additional planning and reporting and assesses an administrative penalty of $25,000 if the utility fails to develop and submit a water conservation plan to the TWDB. This higher level of scrutiny for Texas’ largest utilities will daylight important data and planning on water loss mitigation efforts. 

Chairman Perry’s SB 1253 requires political subdivisions to provide water and wastewater impact fee credits to developments that reduce water use through conservation and reuse. While this bill sounds like a good idea – and it may be – impact fees are how many cities finance the building and maintenance of infrastructure to meet new growth so this will need to be carefully implemented to ensure that cities have resources to maintain and build infrastructure which also provides financial incentives to grow the practice of conservation and reuse in Texas. This bill was passed by the legislature, but vetoed by Governor Abbott. However, Governor Abbott has directed the legislature to consider similar legislation during its special session beginning July 21.

SB 2662, also by Chairman Perry, requires private water utilities to submit drought contingency plans to the Public Utility Commission. This expands the applicability and enforcement of drought planning and watering restrictions to cover areas served by private entities, also known as Investor-Owned Utilities (IOU’s).

Representative Harris Davila’s HB 517 has been signed by the Governor. This bill prohibits homeowners associations (HOAs) from imposing fines on residents for having brown or dormant lawns when those conditions result from complying with local water utility restrictions. The bill ensures that homeowners who follow mandatory drought-related watering limits are not penalized by their HOA, reinforcing the importance of responsible water use during times of scarcity.

More work needed to Protect Texas’ Water Quality
We saw a lot of opportunities this session to improve environmental policy and water quality in Texas, with mixed results. Several good bills were unsuccessful, and we have reservations about some bills that did pass:

HB 3728 by Rep. Penny Morales Shaw would have required the Texas Commission on Environmental Quality (TCEQ) to release long-term salinity studies and adopt both numeric and narrative standards for salinity. With no protections in place, the growing seawater desalination industry in Texas risks harm to our coastal waters and the abundant ecosystems that they support. The study called for in HB 3728 would have supported the development of objective salinity standards that could be used to address this issue. 

Another water quality bill – HB 4028  by Rep. Zwiener – focused on control of pre-production plastics pollution by proposing regulatory standards and requiring plastics manufacturers to conduct spill audits and follow cleanup protocols. Pre-production plastics pollution – plastic pellets (“nurdles”), powders, and flakes, that have been increasingly found along the Texas coast – is currently unregulated in Texas, and this bill would have facilitated long-overdue action to begin addressing the problem.

Both bills were met with strong opposition from industry stakeholders and failed to make it through the legislative process. Bills like these present opportunities for Texas to meaningfully reconcile economic development with environmental protection. We will continue supporting legislation that advances important water quality protections and demonstrates that Texas could grow its economy without sacrificing water quality and the ecosystems that depend on it. 

Meanwhile, SB 1145 by Sen. Brian Birdwell has already been signed by the Governor and will be effective later this year. This legislation allows land application of produced water (oil and gas wastewater) and transfers permitting authority from the Railroad Commission to TCEQ. More work needs to be done before we learn how to treat produced water in such a way that it’s safe for human health and the environment. SB 1145 raised red flags by passing without clear treatment standards, monitoring requirements, and enforcement mechanisms, all of which are cause for concern. 

HB 49, a bill by Darby and Perry, requires additional rulemaking for produced water application and discharge standards, but also provides broad liability protection for oil and gas producers and treatment of produced waters. While the bill did improve, it still gives broad liability protection and shields companies from ever having to pay exemplary damages even if they are found liable. 

In an exciting win for The Devils River, HB 3333 by Rep. Eddie Morales and Sen. Blanco, will prohibit the Texas Commission on Environmental Quality from issuing new permits that authorize direct discharges of wastewater or pollutants into The Devils River. The Devils River in Val Verde County is one of the last truly wild, free-flowing rivers in Texas. Its clear waters are sustained by spring-fed flows and it is almost untouched by contaminants. Even one poorly placed discharge permit could permanently alter this fragile ecosystem and this proactive legislation will help avoid degradation. HB 3333 has been sent to Governor Abbott for his signature. 

Alternatively, land conservation, which helps water quality by providing a filter for contaminants, reducing runoff, preventing erosion, and more, took a loss in the budget process. Conservation groups asked for $30m per biennium for the Texas Farm and Ranchland Conservation Program (TFRLCP), which funds conservation easements for working lands. Since 2016, the program has received $2m each biennium. The TFRLCP is badly oversubscribed, with 60% of applications unfunded. While $15m made it into the House budget, it was ultimately stripped in the Conference Committee, leaving farmers and ranchers with the status quo. Texas is losing 1,000 acres of working lands each day and conservation easements help reduce the land fragmentation that threatens our water resources. 

All in all, this wasn’t a strong session for water quality, but the momentum we managed to build during the 89th session lays an important groundwork for future water advocacy. The threats to water quality have become much more visible, and as we wrap up this session, we hope that this increased visibility will continue to draw attention to the regulatory gaps in Texas water policy, both among legislators and everyday Texans.

Opportunities Remain for Improvements to Flood Mitigation

Money in the Texas Water Fund can now be transferred to fund projects through the Flood Infrastructure Fund, but they will be competing against several other priorities and more funding will likely be needed to maintain the appropriation amounts that these projects have received over the past several years. As the state’s flood planning efforts continue, we anticipate the cumulative cost of recommended projects will increase and we plan to continue our engagement to help legislators understand the need for additional resources.

Texas’ recently adopted State Flood Plan contains policy recommendations developed by the Regional Flood Planning Group members. Consideration and adoption of these recommendations is something that should be considered in future legislative sessions.  

Modern Building Codes Could Better Protect Texas Communities

Modern building codes are an important tool to save energy, water and to create development that is more resilient to floods and extreme weather. Unfortunately, little progress was made this legislative session, but one important bill did pass. SB 783 allows the State Energy Conservation Office to move forward on adopting new statewide energy codes for all new residential and commercial construction, as well as advanced water and energy conservation codes for state-funded and university buildings. SB 783 is an important bill that should lead to more efficient and resilient development in Texas. 

Two important bills that did not make it to the finish line – HB 871 – and HB 882 by Rep Ron Reynolds – were heard in the House Committee on Land and Resource Management. HB 871 by Reynolds sought to raise the minimum residential and commercial building codes in cities from the 2012 codes to more current 2021 codes. HB 871 passed out of committee and was approved off the House floor by a vote of 73 to 55. However, despite the bipartisan support for the bill, it was never referred once received in the Senate. However, movement of this bill indicates the potential for action in future sessions. It is also important to note that while the Texas Association of Builders initially opposed the bill, due to changes made on the House floor, they began to support the bill.

HB 882 would have also raised the minimum residential and commercial building codes in unincorporated counties from the 2006 building codes to the most recent published codes, and also provided options for county enforcement and building permit fees. Unfortunately, HB 882 did not move forward. It is important to modern building codes in unincorporated areas as well as cities. Texans need safe and efficient housing and businesses. 

One bill opposed by many conservation groups and local government – SB 3016 by Senator Brandon Creighton – would have undermined local control on building code issues among many other provisions. While the bill did pass the Senate on a 20-11 vote, and did get out of the House Committee on Intergovernmental Affairs, it never got to the House floor. The bill would have decimated local action on many land use issues. This super-preemption bill runs counter to efforts to increase local action on local resource protection and better regulation of land use to protect our water resources. 

Conclusion

The 89th legislative session was packed with water action, much of it building on the important groundwork laid with the creation of the Texas Water Fund two years ago. Texas is fortunate to have legislators focused on water issues, and stands to benefit greatly from the dedicated funding if approved by voters this November. However, the 89th was also a clear illustration that money alone is not enough to solve our water issues, that science and responsible regulation are needed if we want to protect our growing population and the natural environment, and that more work lies ahead of us as we anticipate the implementation of this year’s legislation and look ahead to craft our future priorities. As the session draws to a close, we have substantial wins to celebrate but remain energized to continue working on the opportunities that remain.Imp