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Signed Into Law
Signed June 20, 2025Effective 2025-09-01
SB7

Regular Session

Relating to the oversight and financing of certain water infrastructure matters under the jurisdiction of the Texas Water Development Board.

Government Affairs & Regulatory Compliance Analysis

SB7: Government Affairs Overview

SB7 fundamentally restructures Texas water infrastructure planning by mandating regional interconnectivity and material standardization as conditions for state funding. Water utilities, developers, and engineering firms must immediately pivot from standalone project designs to integrated, "excess capacity" models to remain eligible for the Texas Water Fund and SWIFT. The legislation creates a new regulatory office within the TWDB with the power to dictate technical specifications for pipes and pumps to ensure a statewide water grid.

Sen. Charles Perry·Senate Bill·Regular Session

Moderate
Low Cost
Effective:2025-09-01
Enforcing Agencies

Texas Commission on Environmental Quality (TCEQ) • Texas Water Development Board (TWDB) • Texas Water Fund Advisory Committee

Business Impact

Who SB7 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: moderate

Notable regulatory updates (effective 2025-09-01). Consider how these changes may affect your operations.

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Water

Affected business types:

  • Water utilities
  • Wastewater treatment facilities
  • Municipal water districts
  • Agricultural water users
View all water legislation

Key Operational Considerations

  • 1Engineering Teams: Staff must be trained on "interoperability" design—ensuring hydraulic and chemical compatibility with neighboring systems.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB7
Moderate
Relating to the oversight and financing of certain water infrastructure matters under the jurisdiction of the Texas Water Development Board.
Moderate Compliance Urgency
Requires near-term attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
TCEQTWDBTexas Water Fund Advisory Committee
Primary Author: Sen. Charles Perry
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025 (Base Act); Funding provisions contingent on voter approval of H.J.R. 7 (November 2025 ballot).
  • Compliance Deadline: Immediate for pre-application planning. If you intend to apply for funding in the 2026–2028 cycles, your current engineering designs must already account for the new interconnectivity and easement requirements.
  • Agency Rulemaking: Q4 2025 – Q4 2026 (Regulatory Gray Zone). The TWDB will establish the "Office of Water Supply Conveyance Coordination" (OWSCC). This office will draft the specific standards for materials and interoperability. Participation in *ad hoc* committees during this period is critical to influence these standards.

Immediate Action Plan

  • 1. Audit Active Designs: Instruct engineering leads to review all projects currently in the design phase for regional interconnectivity capability.
  • 2. Update Easement Strategy: Revise land acquisition protocols to prioritize and document the investigation of existing utility corridors to protect against eminent domain challenges.
  • 3. Engage in Rulemaking: Appoint a technical representative to monitor TWDB/OWSCC announcements and apply for seats on the *ad hoc* advisory committees (Sec. 6.304).
  • 4. Review Liability Coverage: Contact your insurance broker to ensure your policy covers damages to *connected* infrastructure not owned by you.

Operational Changes Required

Contracts

  • Joint Venture/Interlocal Agreements: You must amend master agreements to define cost-sharing for "excess capacity." If the state requires a 30-inch pipe where you only need 20 inches, your contract must specify who funds the delta.
  • Easement Agreements: Update standard easement templates immediately. You must secure rights for "co-location" or "joint use" to comply with the mandate to utilize existing corridors before seeking new ones.
  • Supply Chain Contracts: Insert "Regulatory Compliance" clauses in long-term procurement contracts for pipes, valves, and pumps. Ensure you can void or alter orders if the TWDB's new material standards render your specified hardware non-compliant.

Hiring/Training

  • Engineering Teams: Staff must be trained on "interoperability" design—ensuring hydraulic and chemical compatibility with neighboring systems.
  • Land Acquisition Agents: Retrain agents on the new eminent domain prerequisite. They must document and prove that using an existing easement was "impracticable" before filing for condemnation, or the suit risks dismissal.

Reporting & Record-Keeping

  • Interconnectivity Feasibility: Maintain a permanent technical file proving your project is capable of physical connection to regional systems.
  • Water Quality Compatibility: Document that mixing your water source with potential regional partners will not cause chemical precipitation or regulatory violations.
  • Public Dashboard Data: Prepare for public scrutiny. You will be required to report water loss, project progress, and net water developed to a new public-facing TWDB dashboard.

Fees & Costs

  • Capital Expenditure Increases: Anticipate higher upfront capital costs due to the "excess capacity" mandate (Sec. 6.302(b)). While state funding may offset this, the initial design budget will increase.
  • Insurance Premiums: Review Pollution Legal Liability (PLL) policies. Mandatory interconnectivity increases liability for cross-contamination of third-party systems.

Strategic Ambiguities & Considerations

  • "Practicable" Excess Capacity: The statute requires designing for excess capacity "if practicable." The TWDB has not yet defined the economic or engineering threshold for "practicable." This will be the primary friction point between applicants and the agency.
  • Material Standardization: The OWSCC will standardize "specifications, materials, and components." It is unclear if this will be performance-based (e.g., pressure ratings) or prescriptive (e.g., specific alloys or polymers). Prescriptive rules could exclude proprietary technologies or specific vendors.
  • Produced Water Exemption: Funding is available for produced water treatment unless it is "only for purposes of oil and gas exploration." The agency must define the percentage of water that must be diverted to non-oil-field use to qualify for funding.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 13, 2025
Passed Senate
Apr 2, 2025
Passed House
May 28, 2025
Signed
Jun 20, 2025
Effective
Sep 1, 2025
TopicsDisaster Preparedness & ReliefEnvironmentEnvironment--waterProperty InterestsProperty Interests--eminent DomainState Agencies, Boards & CommissionsState FinancesState Finances--management & ControlUtilitiesUtilities--water & SewerWaterWater--conservationWater--developmentWater--generalWater--rightsFloodsEmergency Management, Texas Division ofWater Development Board, TexasInterim Studies
03

Senate Authors

Sen. Charles PerryRepublican · Primary Author
Joint Authors
Coauthors (2)

House Sponsors

Rep. Phil KingRepublican · Primary Sponsor
Joint Sponsors

Bill Text(with markup)

Showing first 50k characters.

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB7

Q

What does Texas SB7 do?

SB7 fundamentally restructures Texas water infrastructure planning by mandating regional interconnectivity and material standardization as conditions for state funding. Water utilities, developers, and engineering firms must immediately pivot from standalone project designs to integrated, "excess capacity" models to remain eligible for the Texas Water Fund and SWIFT. The legislation creates a new regulatory office within the TWDB with the power to dictate technical specifications for pipes and pumps to ensure a statewide water grid.

Q

Who authored SB7?

SB7 was authored by Texas Senator Charles Perry during the Regular Session.

Q

When was SB7 signed into law?

SB7 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB7?

SB7 is enforced by Texas Commission on Environmental Quality (TCEQ), Texas Water Development Board (TWDB) and Texas Water Fund Advisory Committee.

Q

How significant are the changes in SB7?

The regulatory priority for SB7 is rated as "moderate". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB7?

The cost impact of SB7 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB7 address?

SB7 addresses topics including disaster preparedness & relief, environment, environment--water, property interests and property interests--eminent domain.

Q

What are the key dates for SB7?

Key dates for SB7: Effective date is 2025-09-01. Rulemaking: Develop guidance and best practices for standardization of specifications, materials, and components for water transport infrastructure (Sec. 6.302(a)(2)). (No statutory deadline (Immediate implementation implied)); Establish standards to ensure interconnectivity and interoperability between different water transport systems (Sec. 6.302(

Q

Which Texas businesses are affected by SB7?

SB7 primarily affects property owners and real estate professionals, utility companies and energy providers. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026