I spoke with the TPWD yesterday and here is what they said:
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Texas Clipper Ship Reef Project:
The Texas Clipper ship project is currently under review by the US Maritime Administration, Washington, D.C. I should get an official answer to the TPWD's request for transfer of the ship title by April. If the project is approved and funding terms are met, then the ship will be towed to Brownsville for cleanup. We hold the US Army Corps of Engineers reef site permit for a location in PS-1122 (South Padre OCS block) about 17nm miles out of Brazos Santiago Pass. The ship will be modified so that a dive would begin at 50ft from the surface (top of ship funnel) and the promenade deck will be at around 70ft. The plan is to have the ship sitting in an upright position off the bottom. Depending on the time frame of cleanup, the ship could possibly be reefed by fall 2006. BUT, we have a number of hurdles to jump first.
We are redesigning the Artificial Reef Website at TPWD and will have a "status update" link so the public can keep tabs on the project.
USS Texas Battleship:
There has been some scuttle butt recently in the dive community about TPWD considering the reefing of the USS Texas battleship. TPWD has NO plans or authority to do such a project. The ship is scheduled to undergo hull maintenance again and may require drydocking for that process. There has been discussions centering around the costs of continued maintenance on the ship and its drain on the parks budget. Any type of plan for using the ship as an artificial reef would require several things: grass routes efforts by the general public to raise funds (~ $4 million) and political support from the state legislature. The ship is of value as a nautical heritage site and there are some people who would not like to see her used as a reef. Again, at this time there is NO official movement by TPWD to consider reefing for the ship.