How SB 7 Is Rebuilding Texas’s Water Systems for 2050
When Texas Governor Greg Abbott signed Senate Bill 7 (SB 7) and House Joint Resolution 7 (HJR 7) into law on June 18, 2025, the move signaled a long-term commitment to protecting one of the state’s most critical economic resources: water reliability.
Texas is one of the fastest-growing states in the country, with the population projected to approach 40 million residents by 2050, according to the Texas Demographic Center. As communities expand and industries continue investing across the state, demand for water will grow alongside the population.
Together, SB 7 and HJR 7 establish a major investment in Texas water infrastructure, dedicating up to $20 billion through 2047. For executives evaluating site selection, expansion planning, and long-term capital investments, this signals that Texas is investing ahead of demand to support sustained economic growth.
By treating water supply as a strategic economic asset rather than a short-term policy issue, Texas is planning for industrial scalability, population growth, and economic resilience well into 2050.
What Problems is SB 7 Trying to Solve?
Texas’s economic and population expansion, combined with its frequent droughts, creates a critical need to expand and diversify the water supply portfolio. Insufficient water supplies during a prolonged drought could result in up to
Statewide water demand will increase by approximately 9% by 2050. Water available during drought conditions could decline by roughly 18%, further widening the supply-demand gap.
The risk is not limited to future supply. Aging drinking water and wastewater systems represent a parallel infrastructure challenge. If left unaddressed, deteriorating systems could contribute to nearly $320 billion in economic damages over the next 15 years.
What SB 7 Changes Structurally (Not Just Politically)
SB 7 restructures how Texas plans and delivers water infrastructure by:
- Strengthening statewide coordination around water supply conveyance, so water can be moved reliably from source to growth regions
- Connecting long-term planning to a sustained funding structure as part of a broader package that provides up to $20 billion over 20 years
In short, it shifts the state from drafting water plans to financing and sequencing infrastructure, strengthening long-run reliability for business and reinforcing the Texas infrastructure advantage.
How SB7 Financing Works
In coordination with HJR 7, SB7 creates a Texas water supply funding commitment that dedicates $1 billion annually for water infrastructure statewide. The money flows through the Texas Water Fund, administered by the TWDB, leveraging established financing programs alongside newer, supply-focused mechanisms.
For executives, this structure offers critical benefits. Sustained funding, defined program lanes, and institutional oversight improve project bankability, timeline confidence, and long-term operational risk modeling, particularly for water-intensive industries like semiconductors, advanced manufacturing, data centers, and energy.
What SB 7 Means for Business Operations
By improving water reliability, reducing uncertainty around supply delivery, and supporting long-range industrial scalability, SB 7 will de-risk operations and protect uptime—a structural shift that carries direct implications for how companies evaluate location, growth, and capital allocation decisions.
For site selection, SB 7:
- Reduces long-term water supply risk in site evaluation
- Signals infrastructure discipline at the state level
- Improves predictability for water-intensive operations
- Aligns supply planning with major growth corridors
For expansion planning, SB 7:
- Supports scalable, multi-phase facility growth
- Enhances confidence in future capacity
- Reduces fragmentation across regions
- Matches infrastructure timelines to 20–40-year asset lifecycles
For capital deployment, SB 7:
- De-risks long-duration industrial assets
- Strengthens underwriting confidence through structured funding
- Demonstrates sustained public investment commitment
- Protects uptime for high-value operations
Why Water Reliability Is Now a Competitive Advantage
The Texas Economic Development Corporation (TxEDC) promotes Texas as a premier destination for business investment and helps companies understand the state’s competitive advantages across regions and industries. TxEDC can connect organizations with the Office of the Governor’s Texas Economic Development & Tourism Office and other appropriate partners to support informed decision-making.
Organizations seeking additional information about infrastructure, incentives, and regional opportunities can contact TxEDC to begin the connection process and access the appropriate resources.
