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 included in the state water plan. The bill defines "eligible projects" as those identified in the state water plan with cumulative capital costs of at least $750 million. It outlines the authority of issuers to issue obligations for financing or refinancing these projects, refunding existing debts, and covering issuance costs. The chapter also specifies that obligations cannot be secured by ad valorem taxes and sets guidelines for the maximum maturity of obligations, which cannot exceed 50 years or the useful life of the project.

Additionally, the bill amends several sections of the Water Code to align with the new provisions. It allows for the financing of eligible projects under various terms, including extending loan repayment periods to 40 years for eligible projects. The bill also clarifies that the Texas Water Development Board can use funds for eligible projects as defined in the new chapter. 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)