83R9086 SMH-D
By: Ritter, Price, Johnson, Miller of Comal, H.B. No. 4
Lucio III, et al.
Substitute the following for H.B. No. 4:
By: Miller of Comal C.S.H.B. No. 4
A BILL TO BE ENTITLED
AN ACT
relating to the funding of certain water-related projects by the
Texas Water Development Board; authorizing the issuance of revenue
bonds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. (a) The legislature recognizes the importance
of providing for this state's future water supply needs. The
purpose of this Act is to ensure that proper funding in the form of
meaningful and adequate financial assistance is available to
provide an adequate water supply for the future of this state.
(b) To accomplish that purpose, this Act creates the state
water implementation fund for Texas. The fund is intended to serve
as a water infrastructure bank in order to enhance the financing
capabilities of the Texas Water Development Board under
constitutionally created programs and revenue bond programs. The
fund provides a source of revenue or security for those programs and
provides a revolving cash flow mechanism that recycles money used
in board programs back to the fund to provide protection for the
fund's corpus. Money in the fund will be available immediately to
provide support for low-interest loans, longer repayment terms for
loans, incremental repurchase terms for projects in which the state
owns an interest, and deferral of loan payments. In addition, this
Act creates the state water implementation revenue fund for Texas
for use in managing revenue bonds issued by the board that are
supported by the state water implementation fund for Texas.
SECTION 2. Chapter 15, Water Code, is amended by adding
Subchapters G and H to read as follows:
SUBCHAPTER G. STATE WATER IMPLEMENTATION FUND FOR TEXAS
Sec. 15.431. DEFINITIONS. In this subchapter:
(1) "Advisory committee" means the State Water
Implementation Fund for Texas Advisory Committee.
(2) "Fund" means the state water implementation fund
for Texas.
(3) "Trust company" means the Texas Treasury
Safekeeping Trust Company.
Sec. 15.432. FUND. (a) The state water implementation fund
for Texas is a special fund outside the state treasury to be used by
the board, without further legislative appropriation, for the
purpose of implementing the state water plan as provided by this
subchapter. The board may establish separate accounts in the fund.
The fund and the fund's accounts are kept and held by the trust
company in escrow and in trust for and in the name of the board. The
board has legal title to money and investments in the fund until
money is disbursed from the fund as provided by this subchapter and
board rules.
(b) Money deposited to the credit of the fund may be used
only as provided by this subchapter.
(c) The fund consists of:
(1) money transferred or deposited to the credit of
the fund by law, including money from any source transferred or
deposited to the credit of the fund at the board's discretion as
authorized by law;
(2) the proceeds of any fee or tax imposed by this
state that by statute is dedicated for deposit to the credit of the
fund;
(3) any other revenue that the legislature by statute
dedicates for deposit to the credit of the fund;
(4) investment earnings and interest earned on amounts
credited to the fund; and
(5) money transferred to the fund under a bond
enhancement agreement from another fund or account to which money
from the fund was transferred under a bond enhancement agreement,
as authorized by Section 15.435.
Sec. 15.433. MANAGEMENT AND INVESTMENT OF FUND. (a) The
trust company shall hold and invest the fund, and any accounts
established in the fund, for and in the name of the board, taking
into account the purposes for which money in the fund may be used.
The fund may be co-invested with the state treasury pool.
(b) The overall objective for the investment of the fund is
to maintain sufficient liquidity to meet the needs of the fund while
striving to preserve the purchasing power of the fund.
(c) The trust company has any power necessary to accomplish
the purposes of managing and investing the assets of the fund. In
managing the assets of the fund, through procedures and subject to
restrictions the trust company considers appropriate, the trust
company may acquire, exchange, sell, supervise, manage, or retain
any kind of investment that a prudent investor, exercising
reasonable care, skill, and caution, would acquire or retain in
light of the purposes, terms, distribution requirements, and other
circumstances of the fund then prevailing, taking into
consideration the investment of all the assets of the fund rather
than a single investment.
(d) The trust company may recover the costs incurred in
managing and investing the fund only from the earnings of the fund.
(e) The trust company annually shall report to the board and
to the advisory committee with respect to the investment of the
fund. The trust company shall contract with a certified public
accountant to conduct an independent audit of the fund annually and
shall present the results of each annual audit to the board and to
the advisory committee. This subsection does not affect the state
auditor's authority to conduct an audit of the fund under Chapter
321, Government Code.
(f) The trust company shall adopt an investment policy that
is appropriate for the fund. The trust company shall present the
investment policy to the investment advisory board established
under Section 404.028, Government Code. The investment advisory
board shall submit to the trust company recommendations regarding
the policy.
(g) The board annually shall provide to the trust company a
forecast of the cash flows into and out of the fund. The board shall
provide updates to the forecasts as appropriate to ensure that the
trust company is able to achieve the objective specified by
Subsection (b).
(h) The trust company shall disburse money from the fund as
directed by the board. The board shall direct disbursements from
the fund on a semiannual schedule specified by the board and not
more frequently than twice in any state fiscal year.
(i) An investment-related contract entered into under this
section is not subject to Chapter 2260, Government Code.
Sec. 15.434. USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
OR ACCOUNTS. (a) At the direction of the board, the trust company
shall make disbursements from the fund to another fund or account
pursuant to a bond enhancement agreement authorized by Section
15.435 in the amounts the board determines are needed for debt
service payments on or security provisions of the board's general
obligation bonds or revenue bonds, after considering all other
sources available for those purposes in the respective fund or
account.
(b) Of the money disbursed from the fund during the
five-year period between the adoption of a state water plan and the
adoption of a new plan, the board shall undertake to apply not less
than:
(1) 10 percent to support projects described by
Section 15.435 that are designed to serve rural areas; and
(2) 20 percent to support projects described by
Section 15.435 that are for water conservation or reuse.
Sec. 15.435. BOND ENHANCEMENT AGREEMENTS. (a) A bond
enhancement agreement entered into under this section is an
agreement for professional services and the agreement, including
the period covered by the agreement and all other terms and
conditions of the agreement, must be approved by the board.
(b) The board may direct the trust company to enter into
bond enhancement agreements to provide a source of revenue or
security for the payment of the principal of and interest on general
obligation bonds or revenue bonds issued by the board to finance or
refinance projects included in the state water plan if the proceeds
of the sale of the bonds have been or will be deposited to the credit
of:
(1) the state water implementation revenue fund for
Texas to be used to provide financing for projects included in the
state water plan that are authorized under Subchapter Q or R of this
chapter, Subchapter E or F, Chapter 16, or Subchapter J, Chapter 17,
as authorized under Subchapter H of this chapter;
(2) the water infrastructure fund to be used to
provide financing for projects included in the state water plan as
authorized under Subchapter Q;
(3) the rural water assistance fund to be used to
provide financing for projects included in the state water plan as
authorized under Subchapter R;
(4) the Texas Water Development Fund II state
participation account to be used to provide financing for projects
included in the state water plan as authorized under Subchapter E,
Chapter 16; or
(5) the agricultural water conservation fund to be
used to provide financing for projects included in the state water
plan as authorized under Subchapter J, Chapter 17.
(c) The board may direct the trust company to enter into a
bond enhancement agreement obligating disbursements from the fund
to another fund or account as provided by Subsection (b) for the
support of:
(1) a loan bearing an interest rate of not less than 50
percent of the then-current market rate of interest available to
the board;
(2) a loan to finance a facility under repayment terms
similar to the terms of debt customarily issued by the entity
requesting assistance but not to exceed the lesser of:
(A) the expected useful life of the facility; or
(B) 30 years;
(3) a deferral of loan repayment, including deferral
of the repayment of:
(A) principal and interest; or
(B) accrued interest;
(4) incremental repurchase terms for an acquired
facility, including terms for no initial repurchase payment
followed by progressively increasing incremental levels of
interest payment, repurchase of principal and interest, and
ultimate repurchase of the entire state interest in the facility
using simple interest calculations; or
(5) a combination of the methods of financing
described by Subdivisions (1)-(4).
(d) The board may direct the trust company to enter into
bond enhancement agreements with respect to bonds issued by the
board before September 1, 2013, only if:
(1) those bonds otherwise satisfy the requirements of
Subsections (b) and (c);
(2) the proceeds of those bonds were or are required to
be used only for the implementation of water projects recommended
through the state and regional water planning processes under
Sections 16.051 and 16.053; and
(3) general revenue has been appropriated for the
payment of debt service on those bonds.
(e) The board may direct the trust company to enter into
bond enhancement agreements with respect to refunding bonds issued
by the board to refund bonds issued by the board the proceeds of
which have been or are to be used for projects included in the state
water plan and which otherwise satisfied the requirements of
Subsections (b) and (c).
(f) The board may not direct the trust company to enter into
a bond enhancement agreement with respect to bonds issued by the
board the proceeds of which have been or are to be used to make
grants.
(g) The board may not direct the trust company to enter into
a bond enhancement agreement with respect to bonds issued by the
board the proceeds of which may be used to provide financial
assistance to an applicant unless at the time of the request:
(1) the applicant has submitted and implemented a
water conservation plan in accordance with Section 11.1271; and
(2) the applicable regional water planning group has
complied with Subsection (h).
(h) Each regional water planning group shall provide the
information described by Section 16.053(q) to the board at the time
it submits its adopted regional water plan to the board.
(i) The board may not approve a bond enhancement agreement
with respect to bonds issued by the board unless the agreement
contains a provision to the effect that if the trust company makes a
disbursement under the bond enhancement agreement from the fund to
the credit of another fund or account as provided by Section
15.434(a), the board shall direct the comptroller to transfer an
amount not to exceed that amount from the fund or account receiving
the payment back to the fund if:
(1) money is available in the surplus balance in the
fund or account for that purpose; and
(2) the money transferred back to the fund will not
cause general obligation bonds that are payable from the fund or
account receiving the payment to no longer be self-supporting for
purposes of Section 49-j(b), Article III, Texas Constitution.
(j) For purposes of Subsection (i)(1), the surplus balance
of a fund or account that receives a disbursement from the fund
under a bond enhancement agreement is the amount of money on deposit
in the fund or account, as determined by the board, that is
attributable to the general obligation bonds or revenue bonds that
are the subject of the bond enhancement agreement, including money
received from the sale or other disposition of the board's rights to
receive repayment of financial assistance, money received from the
sale, transfer, or lease of acquired facilities, money received
from the sale of water associated with the acquired facilities, and
related investment earnings, that exceeds the amount required to
pay current debt service on the bonds.
(k) The board may submit a bond enhancement agreement and
the record relating to the agreement to the attorney general for
examination as to the validity of the agreement. If the attorney
general finds that the agreement has been made in accordance with
the constitution and other laws of this state, the attorney general
shall approve the agreement and the comptroller shall register the
agreement.
(l) After a bond enhancement agreement has been approved and
registered as provided by Subsection (k), the agreement is valid
and is incontestable for any cause.
Sec. 15.436. ADDITIONAL BONDING AUTHORITY. In addition to
issuing revenue bonds under Subchapter H of this chapter for the
purposes of this subchapter, the board may issue revenue bonds
under Subchapter I, Chapter 17, for those purposes.
Sec. 15.437. PRIORITIZATION OF PROJECTS BY REGIONAL WATER
PLANNING GROUPS. (a) Each regional water planning group shall
prioritize projects in its respective regional water planning area
for the purposes of Section 15.435. At a minimum, a regional water
planning group must consider the following criteria in prioritizing
each project:
(1) the decade in which the project will be needed;
(2) the feasibility of the project, including the
availability of water rights for purposes of the project and the
hydrological and scientific practicability of the project;
(3) the viability of the project, including whether
the project is a comprehensive solution with a measurable outcome;
(4) the sustainability of the project, taking into
consideration the life of the project; and
(5) the cost-effectiveness of the project, taking into
consideration the expected unit cost of the water to be supplied by
the project.
(b) In prioritizing projects, each regional water planning
group shall include projects that meet long-term needs as well as
projects that meet short-term needs.
(c) The board shall create a stakeholders committee
composed of the presiding officer or a person designated by the
presiding officer of each regional water planning group to
establish uniform standards to be used by the regional water
planning groups in prioritizing projects under this section.
Uniform standards established under this subsection must be
approved by the board. The board shall consult the stakeholders
committee from time to time regarding regional prioritization of
projects.
(d) Each regional water planning group shall submit the
prioritization developed by the group under this section together
with the group's respective regional water plan developed and
submitted under Section 16.053.
Sec. 15.438. PRIORITIZATION OF PROJECTS BY BOARD. (a) The
board shall prioritize projects included in the state water plan
for the purpose of providing financial assistance under this
subchapter.
(b) The board shall establish a point system for
prioritizing projects for which financial assistance is sought from
the board. The system must include a standard for the board to
apply in determining whether a project qualifies for financial
assistance at the time the application for financial assistance is
filed with the board.
(c) The board shall give the highest consideration in
awarding points to projects that will have a substantial effect,
including projects that will:
(1) serve a large population;
(2) provide assistance to a diverse urban and rural
population; or
(3) provide regionalization.
(d) In addition to the criteria provided by Subsection (c),
the board must also consider at least the following criteria in
prioritizing projects:
(1) the local contribution to be made to finance the
project, including the up-front capital to be provided by the
applicant;
(2) the financial capacity of the applicant to repay
the financial assistance provided;
(3) the ability of the board and the applicant to
timely leverage state financing with local and federal funding;
(4) whether there is an emergency need for the
project, taking into consideration whether:
(A) the applicant is included at the time of the
application on the list maintained by the commission of local
public water systems that have a water supply that will last less
than 180 days without additional rainfall; and
(B) federal funding for which the project is
eligible has been used or sought;
(5) if the applicant is applying for financial
assistance for the project under Subchapter Q, whether the
applicant is ready to proceed with the project at the time of the
application, including whether:
(A) all preliminary planning and design work
associated with the project has been completed;
(B) the applicant has acquired the water rights
associated with the project;
(C) the applicant has secured funding for the
project from other sources; and
(D) the applicant is able to begin implementing
or constructing the project;
(6) the demonstrated or projected effect of the
project on water conservation, including preventing the loss of
water, taking into consideration, if applicable, whether the
applicant has filed a water audit with the board under Section
16.0121 that demonstrates that the applicant is accountable with
regard to reducing water loss and increasing efficiency in the
distribution of water; and
(7) the priority given the project by the applicable
regional water planning group under Section 15.437.
Sec. 15.439. ADVISORY COMMITTEE. (a) The State Water
Implementation Fund for Texas Advisory Committee is composed of the
following seven members:
(1) the comptroller, or a person designated by the
comptroller;
(2) three members of the senate appointed by the
lieutenant governor, including:
(A) a member of the committee of the senate
having primary jurisdiction over matters relating to finance; and
(B) a member of the committee of the senate
having primary jurisdiction over natural resources; and
(3) three members of the house of representatives
appointed by the speaker of the house of representatives,
including:
(A) a member of the committee of the house of
representatives having primary jurisdiction over appropriations;
and
(B) a member of the committee of the house of
representatives having primary jurisdiction over natural
resources.
(b) The following persons shall serve as staff support for
the advisory committee:
(1) the deputy executive administrator of the board
who is responsible for water science and conservation, or a person
designated by that deputy executive administrator;
(2) the deputy executive administrator of the board
who is responsible for water resources planning and information, or
a person designated by that deputy executive administrator; and
(3) the chief financial officer of the board.
(c) An appointed member of the advisory committee serves at
the will of the person who appointed the member.
(d) The lieutenant governor shall appoint a co-presiding
officer of the advisory committee from among the members appointed
by the lieutenant governor, and the speaker of the house of
representatives shall appoint a co-presiding officer of the
committee from among the members appointed by the speaker.
(e) The advisory committee may hold public hearings, formal
meetings, or work sessions. Either co-presiding officer of the
advisory committee may call a public hearing, formal meeting, or
work session of the advisory committee at any time. The advisory
committee may not take formal action at a public hearing, formal
meeting, or work session unless a quorum of the committee is
present.
(f) A member of the advisory committee is not entitled to
receive compensation for service on the committee or reimbursement
for expenses incurred in the performance of official duties as a
member of the committee.
(g) The advisory committee shall submit comments and
recommendations to the board regarding the use of money in the fund
for use by the board in adopting rules under Section 15.440. The
submission must include:
(1) comments and recommendations on rulemaking
related to the prioritization of projects in regional water plans
and the state water plan in accordance with Sections 15.437 and
15.438;
(2) comments and recommendations on rulemaking
related to establishing standards for determining whether projects
meet the criteria provided by Section 15.434(b);
(3) an evaluation of the available programs for
providing financing for projects included in the state water plan
and guidelines for implementing those programs, including
guidelines for providing financing for projects included in the
state water plan that are authorized under Subchapter Q or R of this
chapter, Subchapter E or F, Chapter 16, or Subchapter J, Chapter 17;
(4) an evaluation of the lending practices of the
board and guidelines for lending standards;
(5) an evaluation of the use of funds by the board to
provide support for financial assistance for water projects,
including support for the purposes described by Section 15.435(c);
(6) an evaluation of whether premium financing
programs should be established within the funds described by
Section 15.435 to serve the purposes of this subchapter, especially
in connection with projects described by Section 15.434(b);
(7) an evaluation of methods of awarding contracts
that may be more effective than competitive bidding in promoting
competitive procurements and encouraging participation in the
procurement process by companies domiciled in this state; and
(8) an evaluation of the overall operation, function,
and structure of the fund.
(h) The advisory committee shall review the overall
operation, function, and structure of the fund at least
semiannually and may provide comments and recommendations to the
board on any matter.
(i) The advisory committee may adopt rules, procedures, and
policies as needed to administer this section and implement its
responsibilities.
(j) Chapter 2110, Government Code, does not apply to the
size, composition, or duration of the advisory committee.
(k) The advisory committee is subject to Chapter 325,
Government Code (Texas Sunset Act). Unless continued in existence
as provided by that chapter, the advisory committee is abolished
and this section expires September 1, 2023.
Sec. 15.440. RULES. (a) The board shall adopt rules
providing for the use of money in the fund that are consistent with
this subchapter, including rules:
(1) establishing standards for determining whether
projects meet the criteria provided by Section 15.434(b); and
(2) specifying the manner for prioritizing projects
for purposes of Section 15.438.
(b) The board shall give full consideration to the
recommendations of the advisory committee before adopting rules
under this subchapter.
Sec. 15.441. REPORT. Not later than December 1 of each
even-numbered year, the board shall provide a report to the
governor, lieutenant governor, speaker of the house of
representatives, and members of the legislature regarding the use
of the fund, including the use of the fund to satisfy the
requirements of Section 15.434(b).
SUBCHAPTER H. STATE WATER IMPLEMENTATION REVENUE FUND FOR TEXAS
Sec. 15.471. DEFINITION. In this subchapter, "fund" means
the state water implementation revenue fund for Texas.
Sec. 15.472. FUND. (a) The state water implementation
revenue fund for Texas is a special fund outside the state treasury
to be used by the board, without further legislative appropriation,
for the purpose of providing financing for projects included in the
state water plan that are authorized under Subchapter Q or R of this
chapter, Subchapter E or F, Chapter 16, or Subchapter J, Chapter 17.
The board may establish separate accounts in the fund. The board
has legal title to money and investments in the fund until the money
is disbursed as provided by this subchapter and board rules.
(b) Money deposited to the credit of the fund may be used
only as provided by this subchapter.
(c) The fund consists of:
(1) money transferred or deposited to the credit of
the fund by law, including money from any source transferred or
deposited to the credit of the fund at the board's discretion as
authorized by law;
(2) the proceeds of any fee or tax imposed by this
state that by statute is dedicated for deposit to the credit of the
fund;
(3) any other revenue that the legislature by statute
dedicates for deposit to the credit of the fund;
(4) investment earnings and interest earned on amounts
credited to the fund; and
(5) the proceeds from the sale of bonds, including
revenue bonds issued by the board under this subchapter, that are
designated by the board for the purpose of providing money for the
fund.
Sec. 15.473. MANAGEMENT AND INVESTMENT OF FUND. (a) Money
deposited to the credit of the fund shall be invested as determined
by the board. The fund may be co-invested with the state treasury
pool.
(b) The fund and any accounts established in the fund shall
be kept and maintained by or at the direction of the board.
(c) At the direction of the board, the fund and any accounts
established in the fund may be kept and held in escrow and in trust
by the comptroller for and on behalf of the board and pending their
use for the purposes provided by this subchapter may be invested as
provided by an order, resolution, or rule of the board.
(d) The comptroller, as custodian, shall administer the
fund in strict accordance with this subchapter and the orders,
resolutions, and rules of the board.
Sec. 15.474. USE OF FUND. (a) Except as provided by
Subsection (c), money in the fund may be used by the board only to
provide financing or refinancing, under terms specified by the
board, for projects included in the state water plan that are
authorized under Subchapter Q or R of this chapter, Subchapter E or
F, Chapter 16, or Subchapter J, Chapter 17, including water
conservation or reuse projects designed to reduce the need for this
state or political subdivisions of this state to develop additional
water resources.
(b) Financing or refinancing of projects described by
Subsection (a) may be provided by using money in the fund to:
(1) make loans to fund participants or to purchase
bonds or other obligations of fund participants bearing interest at
a rate or rates determined by the board, including rates below
prevailing market rates; or
(2) guarantee debt service payments on obligations of
fund participants, or to purchase insurance guaranteeing such
payments, if the board determines that the guarantee or purchase
will:
(A) improve access to the credit market;
(B) reduce the interest cost of the obligations;
or
(C) enhance the value of the assets of the fund.
(c) The board may use money in the fund:
(1) as a source of revenue or security for the payment
of the principal of and interest on revenue bonds issued by the
board under this subchapter or other bonds issued by the board if
the proceeds of the bonds will be deposited in the fund; or
(2) to pay the necessary and reasonable expenses of
paying agents, bond counsel, and financial advisory services and
similar costs incurred by the board in administering the fund.
Sec. 15.475. TRANSFERS TO OR FROM OTHER FUNDS OR ACCOUNTS.
(a) The board may direct the comptroller to transfer amounts, under
terms specified by the board, from the fund to the credit of:
(1) the water infrastructure fund to be used under
Subchapter Q for the purposes provided by Section 15.434 related to
projects included in the state water plan;
(2) the rural water assistance fund to be used under
Subchapter R for the purposes provided by Section 15.434 related to
projects included in the state water plan;
(3) the Texas Water Development Fund II state
participation account to be used under Subchapter E or F, Chapter
16, for the purposes provided by Section 15.434 related to projects
included in the state water plan; or
(4) the agricultural water conservation fund to be
used under Subchapter J, Chapter 17, for the purposes provided by
Section 15.434 related to projects included in the state water
plan.
(b) If the comptroller transfers an amount from the fund to
the credit of another fund or account as provided by this section,
the board may direct the comptroller to transfer an amount from the
other fund or account to the fund if money is available in the other
fund or account for that purpose.
Sec. 15.476. ISSUANCE OF REVENUE BONDS. (a) The board may
issue revenue bonds for the purpose of providing money for the fund.
(b) The board may issue revenue bonds to refund revenue
bonds or bonds and obligations issued or incurred in accordance
with other provisions of law.
(c) Revenue bonds issued under this subchapter are special
obligations of the board payable from and secured by designated
income and receipts of the fund, including principal of and
interest paid and to be paid on fund assets or income from accounts
created within the fund by the board, as determined by the board.
(d) Revenue bonds issued under this subchapter do not
constitute indebtedness of the state as prohibited by the
constitution.
(e) The board may require fund participants to make charges,
levy taxes, or otherwise provide for sufficient money to pay
acquired obligations.
(f) Revenue bonds issued under this subchapter must be
authorized by resolution of the board and must have the form and
characteristics and bear the designations as the resolution
provides.
(g) Revenue bonds issued under this subchapter may:
(1) bear interest at the rate or rates payable
annually or otherwise;
(2) be dated;
(3) mature at the time or times, serially, as term
revenue bonds, or otherwise in not more than 50 years from their
dates;
(4) be callable before stated maturity on the terms
and at the prices, be in the denominations, be in the form, either
coupon or registered, carry registration privileges as to principal
only or as to both principal and interest and as to successive
exchange of coupon for registered bonds or one denomination for
bonds of other denominations, and successive exchange of registered
revenue bonds for coupon revenue bonds, be executed in the manner,
and be payable at the place or places inside or outside the state,
as provided by the resolution;
(5) be issued in temporary or permanent form;
(6) be issued in one or more installments and from time
to time as required and sold at a price or prices and under terms
determined by the board to be the most advantageous reasonably
obtainable; and
(7) be issued on a parity with and be secured in the
manner as other revenue bonds authorized to be issued by this
subchapter or may be issued without parity and secured differently
than other revenue bonds.
(h) All proceedings relating to the issuance of revenue
bonds issued under this subchapter shall be submitted to the
attorney general for examination. If the attorney general finds
that the revenue bonds have been authorized in accordance with law,
the attorney general shall approve the revenue bonds, and the
revenue bonds shall be registered by the comptroller. After the
approval and registration, the revenue bonds are incontestable in
any court or other forum for any reason and are valid and binding
obligations in accordance with their terms for all purposes.
(i) The proceeds received from the sale of revenue bonds
issued under this subchapter may be deposited or invested in any
manner and in the obligations as may be specified in the resolution
or other proceedings authorizing those obligations. Money in the
fund or accounts created by this subchapter or created in the
resolution or other proceedings authorizing the revenue bonds may
be invested in any manner and in any obligations as may be specified
in the resolution or other proceedings.
SECTION 3. Section 15.973(b), Water Code, is amended to
read as follows:
(b) The fund consists of:
(1) appropriations from the legislature;
(2) any other fees or sources of revenue that the
legislature may dedicate for deposit to the fund;
(3) repayments of loans made from the fund;
(4) interest earned on money credited to the fund;
(5) depository interest allocable to the fund;
(6) money from gifts, grants, or donations to the
fund;
(7) money from revenue bonds or other sources
designated by the board; [and]
(8) proceeds from the sale of political subdivision
bonds or obligations held in the fund and not otherwise pledged to
the discharge, repayment, or redemption of revenue bonds or other
bonds, the proceeds of which were placed in the fund; and
(9) money disbursed to the fund from the state water
implementation fund for Texas as authorized by Section 15.434.
SECTION 4. Section 15.974, Water Code, is amended by adding
Subsection (b) to read as follows:
(b) The board shall transfer back to the state water
implementation fund for Texas any money disbursed to the fund as
described by Section 15.973(b)(9) if the requirements of Section
15.435 are satisfied.
SECTION 5. Section 15.993, Water Code, is amended to read as
follows:
Sec. 15.993. FUND. The rural water assistance fund is a
special fund in the state treasury. The fund consists of:
(1) money directly appropriated to the board for a
purpose of the fund;
(2) repayment of principal and interest from loans
made from the fund not otherwise needed as a source of revenue
pursuant to Section 17.9615(b);
(3) money transferred by the board from any sources
available;
(4) interest earned on the investment of money in the
fund and depository interest allocable to the fund;
(5) money transferred to the fund from the water
assistance fund in accordance with Section 15.011(b), including
proceeds from the sale of political subdivision bonds by the board
to the Texas Water Resources Finance Authority that are deposited
in the water assistance fund as provided by Section 17.0871;
(6) money from gifts, grants, or donations to the
fund;
(7) money disbursed to the fund from the state water
implementation fund for Texas as authorized by Section 15.434; and
(8) [(7)] any other fees or sources of revenue that
the legislature may dedicate for deposit to the fund.
SECTION 6. Section 15.994, Water Code, is amended by adding
Subsection (i) to read as follows:
(i) The board shall transfer back to the state water
implementation fund for Texas any money disbursed to the fund as
described by Section 15.993(7) if the requirements of Section
15.435 are satisfied.
SECTION 7. Section 17.183, Water Code, is amended to read as
follows:
Sec. 17.183. CONSTRUCTION CONTRACT REQUIREMENTS. (a) The
governing body of each political subdivision receiving financial
assistance from the board shall require in all contracts for the
construction of a project:
(1) that each bidder furnish a bid guarantee
equivalent to five percent of the bid price;
(2) that each contractor awarded a construction
contract furnish performance and payment bonds:
(A) the performance bond shall include without
limitation guarantees that work done under the contract will be
completed and performed according to approved plans and
specifications and in accordance with sound construction
principles and practices; and
(B) the performance and payment bonds shall be in
a penal sum of not less than 100 percent of the contract price and
remain in effect for one year beyond the date of approval by the
engineer of the political subdivision; and
(3) that payment be made in partial payments as the
work progresses;
(4) that each partial payment shall not exceed 95
percent of the amount due at the time of the payment as shown by the
engineer of the project, but, if the project is substantially
complete, a partial release of the five percent retainage may be
made by the political subdivision with approval of the executive
administrator;
(5) that payment of the retainage remaining due upon
completion of the contract shall be made only after:
(A) approval by the engineer for the political
subdivision as required under the bond proceedings;
(B) approval by the governing body of the
political subdivision by a resolution or other formal action; and
(C) certification by the executive administrator
in accordance with the rules of the board that the work to be done
under the contract has been completed and performed in a
satisfactory manner and in accordance with approved plans and
specifications [sound engineering principles and practices];
(6) that no valid approval may be granted unless the
work done under the contract has been completed and performed in a
satisfactory manner according to approved plans and
specifications; and
(7) that, if a political subdivision receiving
financial assistance under Subchapter K of this chapter, labor from
inside the political subdivision be used to the extent possible.
(b) Plans and specifications submitted to the board in
connection with an application for financial assistance must
include a seal by a licensed engineer affirming that the plans and
specifications are consistent with and conform to current industry
design and construction standards.
SECTION 8. Section 17.185(a), Water Code, is amended to
read as follows:
(a) The board may inspect the construction of a project at
any time to assure that[:
[(1)] the contractor is substantially complying with
the approved engineering plans and specifications of the project[;
and
[(2) the contractor is constructing the project in
accordance with sound engineering principles].
SECTION 9. Section 17.187, Water Code, is amended to read as
follows:
Sec. 17.187. CERTIFICATE OF APPROVAL. The executive
administrator may consider the following as grounds for refusal to
give a certificate of approval for any construction contract:
(1) failure to construct the project according to
approved plans and specifications; or
(2) [failure to construct the works in accordance with
sound engineering principles; or
[(3)] failure to comply with any term of the contract.
SECTION 10. Section 17.276(c), Water Code, is amended to
read as follows:
(c) The board has the sole responsibility and authority for
selecting the political subdivisions to whom financial assistance
may be provided for treatment works and the amount of any such
assistance. [In consultation with and pursuant to agreement with
the political subdivision, except as provided by Subsection (d) of
this section, the board shall determine the location, time, design,
scope, and all other aspects of the construction of a sewerage
system for which financial assistance is provided.]
SECTION 11. Section 17.775(c), Water Code, is amended to
read as follows:
(c) The board has the sole responsibility and authority for
selecting the political subdivisions to whom financial assistance
may be provided and [,] the amount of any such assistance[, and in
consultation with and pursuant to agreement with the political
subdivision, the board shall determine the location, time, design,
scope, and all other aspects of the construction to be performed].
SECTION 12. Section 17.895, Water Code, is amended to read
as follows:
Sec. 17.895. SOURCES OF ASSETS. The fund is composed of:
(1) money and assets, including bond proceeds,
attributable to the bonds;
(2) investment income earned on money on deposit in
the fund and depository interest earned on money on deposit in the
state treasury;
(3) money appropriated by the legislature;
(4) repayments of principal and interest on loans made
under this subchapter;
(5) administrative fees charged by the board under the
bond program;
(6) money disbursed to the fund from the state water
implementation fund for Texas as authorized by Section 15.434; and
(7) [(6)] any other funds, regardless of their source,
that the board directs be deposited to the credit of the fund.
SECTION 13. Section 17.899, Water Code, is amended by
adding Subsection (c) to read as follows:
(c) The board shall transfer back to the state water
implementation fund for Texas any money disbursed to the fund as
described by Section 17.895(6) if the requirements of Section
15.435 are satisfied.
SECTION 14. Section 17.957, Water Code, is amended by
amending Subsection (b) and adding Subsection (d) to read as
follows:
(b) The state participation account is composed of:
(1) money and assets attributable to water financial
assistance bonds designated by the board as issued for projects
described in Section 16.131;
(2) money from the sale, transfer, or lease of a
project described in Subdivision (1) that was acquired,
constructed, reconstructed, developed, or enlarged with money from
the state participation account;
(3) payments received under a bond enhancement
agreement with respect to water financial assistance bonds
designated by the board as issued for projects described in Section
16.131;
(4) investment income earned on money on deposit in
the state participation account;
(5) money transferred from the state water
implementation fund for Texas as authorized by Section 15.434; and
(6) [(5)] any other funds, regardless of their source,
that the board directs be deposited to the credit of the state
participation account.
(d) The board shall transfer back to the state water
implementation fund for Texas any money disbursed to the fund as
described by Subsection (b)(5) of this section if the requirements
of Section 15.435 are satisfied.
SECTION 15. As soon as practicable after the effective date
of this Act, the lieutenant governor and the speaker of the house of
representatives shall appoint the initial appointive members of the
State Water Implementation Fund for Texas Advisory Committee as
provided by Section 15.439, Water Code, as added by this Act.
SECTION 16. (a) Not later than September 1, 2014, the State
Water Implementation Fund for Texas Advisory Committee shall submit
recommendations to the Texas Water Development Board on the rules
to be adopted by the board under Sections 15.440(a)(1) and (2),
Water Code, as added by this Act.
(b) Not later than the later of the 90th day after the date
the Texas Water Development Board receives the recommendations
described by Subsection (a) of this section or March 1, 2015, the
board shall adopt rules under Section 15.440, Water Code, as added
by this Act.
SECTION 17. (a) Each regional water planning group that has
not previously provided the information to the Texas Water
Development Board described by Section 16.053(q), Water Code, shall
provide the information not later than September 1, 2014.
(b) Section 15.435(h), Water Code, as added by this Act,
applies to a regional water plan beginning with the plan that is
required to be submitted to the Texas Water Development Board by
January 5, 2016.
SECTION 18. (a) Each regional water planning group shall
prioritize the projects included in the regional water plan most
recently adopted by the group in accordance with Section 15.437,
Water Code, as added by this Act, and submit the prioritization of
the projects to the Texas Water Development Board not later than
September 1, 2014.
(b) Section 15.437(d), Water Code, as added by this Act,
applies to a regional water plan beginning with the plan that is
required to be submitted to the Texas Water Development Board by
January 5, 2016.
SECTION 19. This Act takes effect September 1, 2013.