S.B. No. 1261 introduces a new chapter, Chapter 1373, to the Government Code, which establishes a framework for the issuance of obligations to finance water supply projects identified in the state water plan. The bill defines "eligible projects" as those with cumulative capital costs of at least $750 million that are recommended water management strategies. It allows issuers, such as municipal corporations and political subdivisions, to issue obligations to finance or refinance these projects, refund existing debts, and cover issuance costs. The chapter emphasizes that obligations cannot be secured by ad valorem taxes and must adhere to specific guidelines regarding their maturity and authorization.

Additionally, the bill amends various sections of the Water Code to align with the new provisions. It extends the maximum repayment term for loans related to eligible projects to 40 years and clarifies that funds can be used for projects included in the state water plan. The bill also updates definitions to include "eligible projects" and ensures that the Texas Water Development Board can provide financing for these projects. The act is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Water Code 15.432, Water Code 15.435, Water Code 15.474, Water Code 17.852, Water Code 17.957 (Water Code 15, Water Code 17)
Senate Committee Report: Water Code 15.432, Water Code 15.435, Water Code 15.474, Water Code 17.852, Water Code 17.957 (Water Code 15, Water Code 17)
Engrossed: Water Code 15.435, Water Code 15.474, Water Code 17.852, Water Code 17.957 (Water Code 15, Water Code 17)
House Committee Report: Water Code 15.435, Water Code 15.474, Water Code 17.852, Water Code 17.957 (Water Code 15, Water Code 17)
Enrolled: Water Code 15.435, Water Code 15.474, Water Code 17.852, Water Code 17.957 (Water Code 15, Water Code 17)