By Corrie MacLaggan
AUSTIN, Texas (Reuters) - Texas Governor Rick Perry on Tuesday signed into law a bill creating a fund to finance water infrastructure projects in a state suffering from two years of widespread drought.
The measure, which was overwhelmingly approved by the Legislature, sets up a system for Texas to provide loans for projects such as reservoirs, wells and conservation efforts. Lawmakers passed a separate proposal to draw $2 billion from the state's rainy-day fund to help finance the loans.
Texas voters will be asked this fall to approve the creation of the water fund.
"This is making history," Perry told reporters at a ceremonial bill-signing event at the state Capitol. "We're securing the future of our great state by making sure that Texas has the water it needs for decades to come."
The fund will pay for up to $30 billion in water projects over 50 years, Perry said. In that time, the fast-growing state's population is projected to grow from 26 million to more than 50 million people, Lieutenant Governor David Dewhurst said.
For the past two years, at least half of Texas has been in drought, said state climatologist John Nielsen-Gammon. In 2011, the state experienced its driest year on record, according to the National Weather Service. Cities such as San Angelo in West Texas have imposed emergency restrictions on water use.
"We have all seen the devastating effects that severe drought can have on our farms, on our communities and really on our entire economy," said House Speaker Joe Straus, who said the measure was a priority for the chamber.
The governor, who has traveled to states such as Illinois and California to recruit businesses, said that business leaders tell him they love Texas' tax structure.
"Then they ask: 'What are you going to do about water?'" he said. This legislation, he said, "soundly answers that question."
Texas' biennial legislative session, which began in January, ended on Monday, but the governor called lawmakers back for a special session to address redistricting.
A number of lawmakers and advocacy groups are asking the governor to expand the special-session agenda to include bills that failed during the regular session, such as a Perry-backed measure to ban late-term abortions.
Asked at the press conference about his future political plans, Perry, who was a candidate for the 2012 Republican nomination for president, said: "I will let you know in the future."
(Reporting by Corrie MacLaggan; Editing by Dan Grebler)