Texas 2013 - 83rd Regular

Texas Senate Bill SB4 Compare Versions

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1	1	By: Fraser, Estes, Schwertner S.B. No. 4
2	2	(In the Senate - Filed January 23, 2013; January 29, 2013,
3	3	read first time and referred to Committee on Natural Resources;
4	4	April 22, 2013, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 11, Nays 0; April 22, 2013,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 4 By: Fraser
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to the administration and functions of the Texas Water
13	13	Development Board; authorizing the issuance of revenue bonds.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	ARTICLE 1. ADMINISTRATION OF THE TEXAS WATER DEVELOPMENT BOARD
16	16	SECTION 1.01. Subsections (a) and (b), Section 6.052, Water
17	17	Code, are amended to read as follows:
18	18	(a) The board is composed of three [six] members who are
19	19	appointed by the governor with the advice and consent of the senate.
20	20	One member must have experience in the field of engineering, one
21	21	member must have experience in the field of public or private
22	22	finance, and one member must have experience in the field of law or
23	23	business.
24	24	(b) The governor shall make the appointments in such a
25	25	manner that the members reflect the diverse geographic regions and
26	26	population groups of this state and do not have any conflicts [each
27	27	member is from a different section of the state and has no conflict]
28	28	of interest prohibited by state or federal law.
29	29	SECTION 1.02. Section 6.053, Water Code, is amended by
30	30	adding Subsection (d) to read as follows:
31	31	(d) A person is not eligible for appointment to the board if
32	32	the person served on the board on or before January 1, 2013.
33	33	SECTION 1.03. Section 6.054, Water Code, is amended by
34	34	amending Subsection (c) and adding Subsection (d) to read as
35	35	follows:
36	36	(c) If the executive administrator or a member has knowledge
37	37	that a potential ground for removal exists, the executive
38	38	administrator shall notify the chairman of the board of the
39	39	potential ground. The chairman of the board shall then notify the
40	40	governor and the attorney general that a potential ground for
41	41	removal exists. If the potential ground for removal includes the
42	42	chairman of the board, the executive administrator or another
43	43	member of the board shall notify the member [next highest ranking
44	44	officer] of the board with the most seniority, who shall then notify
45	45	the governor and the attorney general that a potential ground for
46	46	removal exists.
47	47	(d) The governor, with the advice and consent of the senate,
48	48	may remove a board member from office as provided by Section 9,
49	49	Article XV, Texas Constitution.
50	50	SECTION 1.04. Section 6.056, Water Code, is amended to read
51	51	as follows:
52	52	Sec. 6.056. TERMS OF OFFICE. (a) The members of the board
53	53	hold office for staggered terms of six years, with the term [terms]
54	54	of one member [two members] expiring February 1 of each
55	55	odd-numbered year [every two years]. Each member holds office
56	56	until a [his] successor is appointed and has qualified.
57	57	(b) A person appointed to the board may not serve for more
58	58	than two six-year terms.
59	59	SECTION 1.05. Section 6.059, Water Code, is amended to read
60	60	as follows:
61	61	Sec. 6.059. CHAIRMAN OF THE BOARD [OFFICERS]. [(a)] The
62	62	governor shall designate one member as chairman of the board to
63	63	serve at the will of the governor.
64	64	[(b) The members of the board shall elect a vice-chairman
65	65	every two years. The board shall fill a vacancy in the office of
66	66	vice-chairman for the remainder of the unexpired term.]
67	67	SECTION 1.06. Subsections (a) and (b), Section 6.060, Water
68	68	Code, are amended to read as follows:
69	69	(a) The board shall hold regular meetings and all hearings
70	70	at times specified by a board order and entered in its minutes [meet
71	71	at least once every other month on a day and at a place within the
72	72	state selected by it, subject to recesses at the discretion of the
73	73	board]. The [chairman or two] board [members] may hold special
74	74	meetings at the times and places in this state that the board
75	75	decides are appropriate for the performance of its duties. The
76	76	chairman of the board or the board member acting for the chairman
77	77	shall give the other members reasonable notice before holding a
78	78	special meeting [call a special meeting at any time by giving notice
79	79	to the other members].
80	80	(b) The chairman [or in his absence the vice-chairman] shall
81	81	preside at all meetings of the board. The chairman may designate
82	82	another board member to act for the chairman in the chairman's
83	83	absence.
84	84	SECTION 1.07. Section 6.061, Water Code, is amended to read
85	85	as follows:
86	86	Sec. 6.061. FULL-TIME SERVICE. Each member of the board
87	87	shall serve on a full-time basis. [COMPENSATION; EXPENSES. A
88	88	member is entitled to receive an amount as provided by the General
89	89	Appropriations Act for each day he serves in the performance of his
90	90	duties, together with travel and other necessary expenses.]
91	91	SECTION 1.08. Section 6.103, Water Code, is amended to read
92	92	as follows:
93	93	Sec. 6.103. EXECUTIVE ADMINISTRATOR. The board shall
94	94	appoint a person to be the executive administrator to serve at the
95	95	will of the board. A person is not eligible for appointment as the
96	96	executive administrator if the person served in that capacity on
97	97	January 1, 2013.
98	98	SECTION 1.09. (a) Not later than September 1, 2013, the
99	99	governor shall appoint the initial members of the Texas Water
100	100	Development Board under Section 6.052, Water Code, as amended by
101	101	this Act. In appointing the initial members of the board, the
102	102	governor shall appoint one person to a term expiring February 1,
103	103	2015, one to a term expiring February 1, 2017, and one to a term
104	104	expiring February 1, 2019.
105	105	(b) The terms of the current members of the board expire
106	106	September 1, 2013.
107	107	SECTION 1.10. (a) Not later than October 1, 2013, the
108	108	Texas Water Development Board shall appoint the executive
109	109	administrator of the board under Section 6.103, Water Code, as
110	110	amended by this Act.
111	111	(b) The person currently serving as the executive
112	112	administrator of the board ceases to serve in that capacity on the
113	113	date a new executive administrator is appointed under Subsection
114	114	(a) of this section.
115	115	ARTICLE 2. FUNDING OF WATER PROJECTS
116	116	SECTION 2.01. (a) The legislature recognizes the
117	117	importance of providing for this state's future water supply needs.
118	118	The purpose of this article is to ensure that proper funding in the
119	119	form of meaningful and adequate financial assistance is available
120	120	to provide an adequate water supply for the future of this state.
121	121	(b) To accomplish that purpose, this article creates the
122	122	state water implementation fund for Texas. The fund is intended to
123	123	serve as a water infrastructure bank in order to enhance the
124	124	financing capabilities of the Texas Water Development Board under
125	125	constitutionally created programs and revenue bond programs. The
126	126	fund provides a source of revenue or security for those programs and
127	127	provides a cash flow mechanism under which money used in board
128	128	programs flows back to the fund to provide protection for the fund's
129	129	corpus. Money in the fund will be available immediately to provide
130	130	support for low-interest loans, longer repayment terms for loans,
131	131	incremental repurchase terms for projects in which the state owns
132	132	an interest, and deferral of loan payments. Money in the fund may
133	133	not be used to make grants. In addition, this article creates the
134	134	state water implementation revenue fund for Texas for use in
135	135	managing revenue bonds issued by the board that are supported by the
136	136	state water implementation fund for Texas.
137	137	SECTION 2.02. Chapter 15, Water Code, is amended by adding
138	138	Subchapters G and H to read as follows:
139	139	SUBCHAPTER G. STATE WATER IMPLEMENTATION FUND FOR TEXAS
140	140	Sec. 15.431. DEFINITIONS. In this subchapter:
141	141	(1) "Advisory committee" means the State Water
142	142	Implementation Fund for Texas Advisory Committee.
143	143	(2) "Fund" means the state water implementation fund
144	144	for Texas.
145	145	(3) "Trust company" means the Texas Treasury
146	146	Safekeeping Trust Company.
147	147	Sec. 15.432. FUND. (a) The state water implementation
148	148	fund for Texas is a special fund outside the state treasury to be
149	149	used by the board, without further legislative appropriation, for
150	150	the purpose of implementing the state water plan as provided by this
151	151	subchapter. The board may establish separate accounts in the fund.
152	152	The fund and the fund's accounts are kept and held by the trust
153	153	company for and in the name of the board. The board has legal title
154	154	to money and investments in the fund until money is disbursed from
155	155	the fund as provided by this subchapter and board rules.
156	156	(b) Money deposited to the credit of the fund may be used
157	157	only as provided by this subchapter.
158	158	(c) The fund consists of:
159	159	(1) money transferred or deposited to the credit of
160	160	the fund by law, including money from any source transferred or
161	161	deposited to the credit of the fund at the board's discretion as
162	162	authorized by law;
163	163	(2) the proceeds of any fee or tax imposed by this
164	164	state that by statute is dedicated for deposit to the credit of the
165	165	fund;
166	166	(3) any other revenue that the legislature by statute
167	167	dedicates for deposit to the credit of the fund;
168	168	(4) investment earnings and interest earned on amounts
169	169	credited to the fund; and
170	170	(5) money transferred to the fund under a bond
171	171	enhancement agreement from another fund or account to which money
172	172	from the fund was transferred under a bond enhancement agreement,
173	173	as authorized by Section 15.435.
174	174	Sec. 15.433. MANAGEMENT AND INVESTMENT OF FUND. (a) The
175	175	trust company shall hold and invest the fund, and any accounts
176	176	established in the fund, for and in the name of the board, taking
177	177	into account the purposes for which money in the fund may be used.
178	178	The fund may be invested with the state treasury pool.
179	179	(b) The overall objective for the investment of the fund is
180	180	to maintain sufficient liquidity to meet the needs of the fund while
181	181	striving to preserve the purchasing power of the fund.
182	182	(c) The trust company has any power necessary to accomplish
183	183	the purposes of managing and investing the assets of the fund. In
184	184	managing the assets of the fund, through procedures and subject to
185	185	restrictions the trust company considers appropriate, the trust
186	186	company may acquire, exchange, sell, supervise, manage, or retain
187	187	any kind of investment that a prudent investor, exercising
188	188	reasonable care, skill, and caution, would acquire or retain in
189	189	light of the purposes, terms, distribution requirements, and other
190	190	circumstances of the fund then prevailing, taking into
191	191	consideration the investment of all the assets of the fund rather
192	192	than a single investment.
193	193	(d) The trust company may charge fees to cover its costs
194	194	incurred in managing and investing the fund. The fees must be
195	195	consistent with the fees the trust company charges other state and
196	196	local governmental entities for which it provides investment
197	197	management services. The trust company may recover fees it charges
198	198	under this subsection only from the earnings of the fund.
199	199	(e) The trust company annually shall provide a written
200	200	report to the board and to the advisory committee with respect to
201	201	the investment of the fund. The trust company shall contract with a
202	202	certified public accountant to conduct an independent audit of the
203	203	fund annually and shall present the results of each annual audit to
204	204	the board and to the advisory committee. This subsection does not
205	205	affect the state auditor's authority to conduct an audit of the fund
206	206	under Chapter 321, Government Code.
207	207	(f) The trust company shall adopt a written investment
208	208	policy that is appropriate for the fund. The trust company shall
209	209	present the investment policy to the investment advisory board
210	210	established under Section 404.028, Government Code. The investment
211	211	advisory board shall submit to the trust company recommendations
212	212	regarding the policy.
213	213	(g) The board annually shall provide to the trust company a
214	214	forecast of the cash flows into and out of the fund. The board shall
215	215	provide updates to the forecasts as appropriate to ensure that the
216	216	trust company is able to achieve the objective specified by
217	217	Subsection (b).
218	218	(h) The trust company shall disburse money from the fund as
219	219	directed by the board. The board shall direct disbursements from
220	220	the fund on a semiannual schedule specified by the board and not
221	221	more frequently than twice in any state fiscal year.
222	222	(i) An investment-related contract entered into under this
223	223	section is not subject to Chapter 2260, Government Code.
224	224	Sec. 15.434. USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
225	225	OR ACCOUNTS. (a) At the direction of the board, the trust company
226	226	shall make disbursements from the fund to another fund or account
227	227	pursuant to a bond enhancement agreement authorized by Section
228	228	15.435 in the amounts the board determines are needed for debt
229	229	service payments on or security provisions of the board's general
230	230	obligation bonds or revenue bonds, after considering all other
231	231	sources available for those purposes in the respective fund or
232	232	account.
233	233	(b) Of the money disbursed from the fund during the
234	234	five-year period between the adoption of a state water plan and the
235	235	adoption of a new plan, the board shall undertake to apply not less
236	236	than:
237	237	(1) 10 percent to support projects described by
238	238	Section 15.435 that are for:
239	239	(A) rural political subdivisions as defined by
240	240	Section 15.992; or
241	241	(B) agricultural water conservation; and
242	242	(2) 20 percent to support projects described by
243	243	Section 15.435 that are designed for water conservation or reuse,
244	244	including agricultural water conservation in:
245	245	(A) metropolitan statistical areas with a
246	246	population of 325,000 or less; or
247	247	(B) counties that are outside the boundaries of
248	248	any metropolitan statistical area.
249	249	Sec. 15.435. BOND ENHANCEMENT AGREEMENTS. (a) A bond
250	250	enhancement agreement entered into under this section is an
251	251	agreement for professional services. A bond enhancement agreement
252	252	must contain terms that are consistent with Section 15.433(h), and
253	253	the agreement, including the period covered by the agreement and
254	254	all other terms and conditions of the agreement, must be approved by
255	255	the board. An obligation to disburse money from the fund in
256	256	accordance with a bond enhancement agreement is a special
257	257	obligation of the board payable solely from designated income and
258	258	receipts of the fund or an account in the fund established by the
259	259	board, as determined by the board. An obligation to disburse money
260	260	from the fund in accordance with a bond enhancement agreement does
261	261	not constitute indebtedness of the state.
262	262	(b) To facilitate the use of the fund for the purposes of
263	263	this subchapter, the board may direct the trust company to enter
264	264	into bond enhancement agreements to provide a source of revenue or
265	265	security for the payment of the principal of and interest on general
266	266	obligation bonds, including bonds issued under Section 49-d-9 or
267	267	49-d-11, Article III, Texas Constitution, or revenue bonds issued
268	268	by the board to finance or refinance projects included in the state
269	269	water plan if the proceeds of the sale of the bonds have been or will
270	270	be deposited to the credit of:
271	271	(1) the state water implementation revenue fund for
272	272	Texas;
273	273	(2) the water infrastructure fund;
274	274	(3) the rural water assistance fund;
275	275	(4) the Texas Water Development Fund II state
276	276	participation account; or
277	277	(5) the agricultural water conservation fund.
278	278	(c) If the trust company enters into a bond enhancement
279	279	agreement under Subsection (b), the board may direct the trust
280	280	company to make disbursements from the fund to another fund or
281	281	account for the support of bonds the proceeds of which are used to
282	282	provide financial assistance in the form of:
283	283	(1) a loan bearing an interest rate of not less than 50
284	284	percent of the then-current market rate of interest available to
285	285	the board;
286	286	(2) a loan to finance a facility under repayment terms
287	287	similar to the terms of debt customarily issued by the entity
288	288	requesting assistance but not to exceed the lesser of:
289	289	(A) the expected useful life of the facility; or
290	290	(B) 30 years;
291	291	(3) a deferral of loan repayment, including deferral
292	292	of the repayment of:
293	293	(A) principal and interest; or
294	294	(B) accrued interest;
295	295	(4) incremental repurchase terms for an acquired
296	296	facility, including terms for no initial repurchase payment
297	297	followed by progressively increasing incremental levels of
298	298	interest payment, repurchase of principal and interest, and
299	299	ultimate repurchase of the entire state interest in the facility
300	300	using simple interest calculations; or
301	301	(5) a combination of the methods of financing
302	302	described by Subdivisions (1)-(4).
303	303	(d) The board may direct the trust company to enter into
304	304	bond enhancement agreements with respect to bonds issued by the
305	305	board before September 1, 2013, only if:
306	306	(1) those bonds otherwise satisfy the requirements of
307	307	Subsections (b) and (c);
308	308	(2) the proceeds of those bonds were or are required to
309	309	be used only for the implementation of water projects recommended
310	310	through the state and regional water planning processes under
311	311	Sections 16.051 and 16.053; and
312	312	(3) general revenue of the state was appropriated
313	313	before September 1, 2013, for the payment of debt service on those
314	314	bonds.
315	315	(e) The board may direct the trust company to enter into
316	316	bond enhancement agreements with respect to refunding bonds issued
317	317	by the board to refund bonds issued by the board the proceeds of
318	318	which have been or are to be used for projects included in the state
319	319	water plan and which otherwise satisfied the requirements of
320	320	Subsections (b) and (c).
321	321	(f) The board may not direct the trust company to enter into
322	322	a bond enhancement agreement with respect to bonds issued by the
323	323	board the proceeds of which have been or are to be used to make
324	324	grants.
325	325	(g) The board may not direct the trust company to enter into
326	326	a bond enhancement agreement with respect to bonds issued by the
327	327	board the proceeds of which may be used to provide financial
328	328	assistance to an applicant if at the time of the request the
329	329	applicant has failed to:
330	330	(1) submit or implement a water conservation plan in
331	331	accordance with Section 11.1271; or
332	332	(2) satisfactorily complete a request by the executive
333	333	administrator or a regional water planning group for information
334	334	relevant to the project for which the financial assistance is
335	335	sought, including a water infrastructure financing survey under
336	336	Section 16.053(q).
337	337	(h) The board may not approve a bond enhancement agreement
338	338	with respect to bonds issued by the board unless the agreement
339	339	contains a provision to the effect that if the trust company makes a
340	340	disbursement under the bond enhancement agreement from the fund to
341	341	the credit of another fund or account as provided by Section
342	342	15.434(a), the board shall direct the comptroller to transfer an
343	343	amount not to exceed that amount from the fund or account receiving
344	344	the payment back to the fund if:
345	345	(1) money is available in the surplus balance in the
346	346	fund or account for that purpose; and
347	347	(2) the money transferred back to the fund will not
348	348	cause general obligation bonds that are payable from the fund or
349	349	account receiving the payment to no longer be self-supporting for
350	350	purposes of Section 49-j(b), Article III, Texas Constitution.
351	351	(i) For purposes of Subsection (h)(1), the surplus balance
352	352	of a fund or account that receives a disbursement from the fund
353	353	under a bond enhancement agreement is the amount of money on deposit
354	354	in the fund or account, as determined by the board, that is
355	355	attributable to the general obligation bonds or revenue bonds that
356	356	are the subject of the bond enhancement agreement, including money
357	357	received from the sale or other disposition of the board's rights to
358	358	receive repayment of financial assistance, money received from the
359	359	sale, transfer, or lease of an acquired facility, money received
360	360	from the sale of water associated with an acquired facility, and
361	361	related investment earnings, that exceeds the amount required to
362	362	pay annual debt service on the bonds and any other amounts specified
363	363	in the resolution or other proceedings authorizing the bonds and
364	364	any related obligations.
365	365	(j) The board shall submit each bond enhancement agreement
366	366	and the record relating to the agreement to the attorney general for
367	367	examination as to the validity of the agreement. If the attorney
368	368	general finds that the agreement has been made in accordance with
369	369	the constitution and other laws of this state, the attorney general
370	370	shall approve the agreement and the comptroller shall register the
371	371	agreement. If the agreement is not submitted at the same time that
372	372	the bonds to which it relates are submitted, the agreement shall be
373	373	treated as a public security solely for the purposes of Section
374	374	1202.004, Government Code.
375	375	(k) After a bond enhancement agreement has been approved and
376	376	registered as provided by Subsection (j), the agreement is valid
377	377	and is incontestable for any cause.
378	378	Sec. 15.436. PRIORITIZATION OF PROJECTS BY REGIONAL WATER
379	379	PLANNING GROUPS. (a) Each regional water planning group shall
380	380	prioritize projects in its respective regional water planning area
381	381	for the purposes of Section 15.435. At a minimum, a regional water
382	382	planning group must consider the following criteria in prioritizing
383	383	each project:
384	384	(1) the decade in which the project will be needed;
385	385	(2) the feasibility of the project, including the
386	386	availability of water rights for purposes of the project and the
387	387	hydrological and scientific practicability of the project;
388	388	(3) the sustainability of the project, taking into
389	389	consideration the life of the project; and
390	390	(4) the cost-effectiveness of the project, taking into
391	391	consideration the expected unit cost of the water to be supplied by
392	392	the project.
393	393	(b) In prioritizing projects, each regional water planning
394	394	group shall include projects that meet long-term needs as well as
395	395	projects that meet short-term needs.
396	396	(c) The board shall create a stakeholders committee
397	397	composed of the presiding officer or a person designated by the
398	398	presiding officer of each regional water planning group to
399	399	establish standards to be used by the regional water planning
400	400	groups in prioritizing projects under this section. The
401	401	stakeholders committee may establish different standards to be used
402	402	by different regional water planning groups as necessary to account
403	403	for different circumstances affecting each region. Standards
404	404	established under this subsection must be approved by the board.
405	405	The board shall consult the stakeholders committee from time to
406	406	time regarding regional prioritization of projects.
407	407	(d) Each regional water planning group shall submit to the
408	408	board the prioritization developed by the group under this section
409	409	together with the group's respective regional water plan developed
410	410	and submitted under Section 16.053.
411	411	Sec. 15.437. PRIORITIZATION OF PROJECTS BY BOARD. (a) The
412	412	board shall prioritize projects included in the state water plan
413	413	for the purpose of providing financial assistance under this
414	414	subchapter.
415	415	(b) The board shall establish a system for prioritizing
416	416	projects for which financial assistance is sought from the board.
417	417	The system must provide for giving priority to projects in the
418	418	following order:
419	419	(1) projects that develop new water supplies, provide
420	420	for the conservation or reuse of existing supplies, or provide for
421	421	the conveyance of new water supplies to a water supply system;
422	422	(2) projects for new or expanded water treatment
423	423	plants to treat newly developed water supplies; and
424	424	(3) projects that meet unidentified future water
425	425	supply needs.
426	426	(c) The system established under Subsection (b) must
427	427	incorporate the following prioritization criteria:
428	428	(1) the recommendation of the state water plan
429	429	regarding timing of implementation of the project;
430	430	(2) the scope of the regional benefits of the project,
431	431	considering the number of entities and the size of the population to
432	432	be served by the project or other factors;
433	433	(3) the type of state financial assistance sought for
434	434	the project;
435	435	(4) the percentage of the water supply needs of the
436	436	region served by the project that will be met by the project;
437	437	(5) the status of implementation of the project;
438	438	(6) the amount of local funds to be used to finance the
439	439	project; and
440	440	(7) the priority given the project by the applicable
441	441	regional water planning group under Section 15.436.
442	442	Sec. 15.438. ADVISORY COMMITTEE. (a) The State Water
443	443	Implementation Fund for Texas Advisory Committee is composed of the
444	444	following seven members:
445	445	(1) the comptroller, or a person designated by the
446	446	comptroller;
447	447	(2) three members of the senate appointed by the
448	448	lieutenant governor, including:
449	449	(A) a member of the committee of the senate
450	450	having primary jurisdiction over matters relating to finance; and
451	451	(B) a member of the committee of the senate
452	452	having primary jurisdiction over natural resources; and
453	453	(3) three members of the house of representatives
454	454	appointed by the speaker of the house of representatives,
455	455	including:
456	456	(A) a member of the committee of the house of
457	457	representatives having primary jurisdiction over appropriations;
458	458	and
459	459	(B) a member of the committee of the house of
460	460	representatives having primary jurisdiction over natural
461	461	resources.
462	462	(b) The following persons shall serve as staff support for
463	463	the advisory committee:
464	464	(1) the deputy executive administrator of the board
465	465	who is responsible for water science and conservation or a person
466	466	who holds an equivalent position at the agency, or a person
467	467	designated by that person;
468	468	(2) the deputy executive administrator of the board
469	469	who is responsible for water resources planning and information or
470	470	a person who holds an equivalent position at the agency, or a person
471	471	designated by that person; and
472	472	(3) the chief financial officer of the board, or a
473	473	person who holds an equivalent position at the agency.
474	474	(c) The advisory committee shall select a nationally
475	475	recognized bond counsel and financial advisor to serve as the
476	476	advisory committee's independent legal counsel for the purpose of
477	477	advising the advisory committee in connection with the
478	478	administration of the advisory committee's duties under this
479	479	section. The board is responsible for paying the cost of retaining
480	480	a bond counsel and financial advisor and may pay the cost from the
481	481	fund.
482	482	(d) An appointed member of the advisory committee serves at
483	483	the will of the person who appointed the member.
484	484	(e) The lieutenant governor shall appoint a co-presiding
485	485	officer of the advisory committee from among the members appointed
486	486	by the lieutenant governor, and the speaker of the house of
487	487	representatives shall appoint a co-presiding officer of the
488	488	committee from among the members appointed by the speaker.
489	489	(f) The advisory committee may hold public hearings, formal
490	490	meetings, or work sessions. Either co-presiding officer of the
491	491	advisory committee may call a public hearing, formal meeting, or
492	492	work session of the advisory committee at any time. The advisory
493	493	committee may not take formal action at a public hearing, formal
494	494	meeting, or work session unless a quorum of the committee is
495	495	present.
496	496	(g) Except as otherwise provided by this subsection, a
497	497	member of the advisory committee is not entitled to receive
498	498	compensation for service on the committee or reimbursement for
499	499	expenses incurred in the performance of official duties as a member
500	500	of the committee. Service on the advisory committee by a member of
501	501	the senate or house of representatives is considered legislative
502	502	service for which the member is entitled to reimbursement and other
503	503	benefits in the same manner and to the same extent as for other
504	504	legislative service.
505	505	(h) The advisory committee shall submit comments and
506	506	recommendations to the board regarding the use of money in the fund
507	507	for use by the board in adopting rules under Section 15.439 and in
508	508	adopting policies and procedures under Section 15.441. The
509	509	submission must include:
510	510	(1) comments and recommendations on rulemaking
511	511	related to the prioritization of projects in regional water plans
512	512	and the state water plan in accordance with Sections 15.436 and
513	513	15.437;
514	514	(2) comments and recommendations on rulemaking
515	515	related to establishing standards for determining whether projects
516	516	meet the criteria provided by Section 15.434(b);
517	517	(3) an evaluation of the available programs for
518	518	providing financing for projects included in the state water plan
519	519	and guidelines for implementing those programs, including
520	520	guidelines for providing financing for projects included in the
521	521	state water plan that are authorized under Subchapter Q or R of this
522	522	chapter, Subchapter E or F, Chapter 16, or Subchapter J, Chapter 17;
523	523	(4) an evaluation of the lending practices of the
524	524	board and guidelines for lending standards;
525	525	(5) an evaluation of the use of funds by the board to
526	526	provide support for financial assistance for water projects,
527	527	including support for the purposes described by Section 15.435(c);
528	528	(6) an evaluation of whether premium financing
529	529	programs should be established within the funds described by
530	530	Section 15.435 to serve the purposes of this subchapter, especially
531	531	in connection with projects described by Section 15.434(b);
532	532	(7) an evaluation of methods for encouraging
533	533	participation in the procurement process by companies domiciled in
534	534	this state; and
535	535	(8) an evaluation of the overall operation, function,
536	536	and structure of the fund.
537	537	(i) The advisory committee shall review the overall
538	538	operation, function, and structure of the fund at least
539	539	semiannually and may provide comments and recommendations to the
540	540	board on any matter.
541	541	(j) The advisory committee may adopt rules, procedures, and
542	542	policies as needed to administer this section and implement its
543	543	responsibilities.
544	544	(k) Chapter 2110, Government Code, does not apply to the
545	545	size, composition, or duration of the advisory committee.
546	546	(l) The advisory committee is subject to Chapter 325,
547	547	Government Code (Texas Sunset Act). Unless continued in existence
548	548	as provided by that chapter, the advisory committee is abolished
549	549	and this section expires September 1, 2023.
550	550	(m) The advisory committee shall make recommendations to
551	551	the board regarding information to be posted on the board's
552	552	Internet website under Section 15.440(b).
553	553	Sec. 15.439. RULES. (a) The board shall adopt rules
554	554	providing for the use of money in the fund that are consistent with
555	555	this subchapter, including rules:
556	556	(1) establishing standards for determining whether
557	557	projects meet the criteria provided by Section 15.434(b); and
558	558	(2) specifying the manner for prioritizing projects
559	559	for purposes of Section 15.437.
560	560	(b) The board shall give full consideration to the
561	561	recommendations of the advisory committee before adopting rules
562	562	under this subchapter.
563	563	Sec. 15.440. REPORTING AND TRANSPARENCY REQUIREMENTS.
564	564	(a) Not later than December 1 of each even-numbered year, the
565	565	board shall provide a report to the governor, lieutenant governor,
566	566	speaker of the house of representatives, and members of the
567	567	legislature regarding the use of the fund, including the use of the
568	568	fund to support projects that are for rural political subdivisions
569	569	or agricultural water conservation or that are designed for water
570	570	conservation or reuse as required by Section 15.434(b).
571	571	(b) The board shall post the following information on the
572	572	board's Internet website regarding the use of the fund and
573	573	regularly update the information posted:
574	574	(1) the progress made in developing needed water
575	575	supply statewide and for the benefit of each regional water
576	576	planning area; and
577	577	(2) for each regional water planning area, a
578	578	description of each project funded through bonds supported by a
579	579	bond enhancement agreement entered into under Section 15.435,
580	580	including:
581	581	(A) the expected date of completion of the
582	582	project; and
583	583	(B) the current status of the project.
584	584	Sec. 15.441. POLICIES AND PROCEDURES TO MITIGATE OR
585	585	MINIMIZE ADVERSE EFFECTS OF CERTAIN FEDERAL LAWS. The board shall
586	586	adopt, and may amend from time to time at the board's discretion,
587	587	policies and procedures for the purpose of mitigating or minimizing
588	588	the adverse effects, if any, of federal laws and regulations
589	589	relating to income taxes, arbitrage, rebates, and related matters
590	590	that may restrict the board's ability to freely invest all or part
591	591	of the fund or to receive and retain all the earnings from the fund.
592	592	SUBCHAPTER H. STATE WATER IMPLEMENTATION REVENUE FUND FOR TEXAS
593	593	Sec. 15.471. DEFINITION. In this subchapter, "fund" means
594	594	the state water implementation revenue fund for Texas.
595	595	Sec. 15.472. FUND. (a) The state water implementation
596	596	revenue fund for Texas is a special fund outside the state treasury
597	597	to be used by the board, without further legislative appropriation,
598	598	for the purpose of providing financing for projects included in the
599	599	state water plan that are authorized under Subchapter Q or R of this
600	600	chapter, Subchapter E or F, Chapter 16, or Subchapter J, Chapter 17.
601	601	The board may establish separate accounts in the fund. The board
602	602	has legal title to money and investments in the fund until the money
603	603	is disbursed as provided by this subchapter and board rules.
604	604	(b) Money deposited to the credit of the fund may be used
605	605	only as provided by this subchapter.
606	606	(c) The fund consists of:
607	607	(1) money transferred or deposited to the credit of
608	608	the fund by law, including money from any source transferred or
609	609	deposited to the credit of the fund at the board's discretion as
610	610	authorized by law;
611	611	(2) the proceeds of any fee or tax imposed by this
612	612	state that by statute is dedicated for deposit to the credit of the
613	613	fund;
614	614	(3) any other revenue that the legislature by statute
615	615	dedicates for deposit to the credit of the fund;
616	616	(4) investment earnings and interest earned on amounts
617	617	credited to the fund;
618	618	(5) the proceeds from the sale of bonds, including
619	619	revenue bonds issued by the board under this subchapter, that are
620	620	designated by the board for the purpose of providing money for the
621	621	fund; and
622	622	(6) money disbursed to the fund from the state water
623	623	implementation fund for Texas as authorized by Section 15.434.
624	624	Sec. 15.473. MANAGEMENT AND INVESTMENT OF FUND. (a) Money
625	625	deposited to the credit of the fund shall be invested as determined
626	626	by the board. The fund may be invested with the state treasury
627	627	pool.
628	628	(b) The fund and any accounts established in the fund shall
629	629	be kept and maintained by or at the direction of the board.
630	630	(c) At the direction of the board, the fund and any accounts
631	631	established in the fund may be kept and held in escrow and in trust
632	632	by the comptroller or a corporate trustee that is a trust company or
633	633	a bank that has the powers of a trust company for and on behalf of
634	634	the board and pending their use for the purposes provided by this
635	635	subchapter may be invested as provided by an order, resolution, or
636	636	rule of the board.
637	637	(d) The comptroller or corporate trustee, as custodian,
638	638	shall administer the fund in strict accordance with this subchapter
639	639	and the orders, resolutions, and rules of the board.
640	640	Sec. 15.474. USE OF FUND. (a) Except as provided by
641	641	Subsection (c), money in the fund may be used by the board only to
642	642	provide financing or refinancing, under terms specified by the
643	643	board, for projects included in the state water plan that are
644	644	authorized under Subchapter Q or R of this chapter, Subchapter E or
645	645	F, Chapter 16, or Subchapter J, Chapter 17.
646	646	(b) Financing or refinancing of projects described by
647	647	Subsection (a) may be provided by using money in the fund to:
648	648	(1) make loans to fund participants or to purchase
649	649	bonds or other obligations of fund participants bearing interest at
650	650	a rate or rates determined by the board, including rates below
651	651	prevailing market rates; or
652	652	(2) guarantee debt service payments on obligations of
653	653	fund participants, or to purchase insurance guaranteeing such
654	654	payments, if the board determines that the guarantee or purchase
655	655	will:
656	656	(A) improve access to the credit market;
657	657	(B) reduce the interest cost of the obligations;
658	658	or
659	659	(C) enhance the value of the assets of the fund.
660	660	(c) The board may use money in the fund:
661	661	(1) as a source of revenue or security for:
662	662	(A) the payment of the principal of and interest
663	663	on:
664	664	(i) revenue bonds issued by the board under
665	665	this subchapter; or
666	666	(ii) other bonds issued by the board if the
667	667	proceeds of the bonds will be deposited in the fund; or
668	668	(B) a bond enhancement agreement; or
669	669	(2) to pay the necessary and reasonable expenses of
670	670	paying agents, bond counsel, and financial advisory services and
671	671	similar costs incurred by the board in administering the fund.
672	672	Sec. 15.475. ISSUANCE OF REVENUE BONDS. (a) The board may
673	673	issue revenue bonds for the purpose of providing money for the fund.
674	674	(b) The board may issue revenue bonds to refund revenue
675	675	bonds or bonds and obligations issued or incurred in accordance
676	676	with other provisions of law.
677	677	(c) Revenue bonds issued under this subchapter are special
678	678	obligations of the board payable only from and secured by
679	679	designated income and receipts of the fund, including principal of
680	680	and interest paid and to be paid on fund assets or income from
681	681	accounts created within the fund by the board, as determined by the
682	682	board.
683	683	(d) Revenue bonds issued under this subchapter do not
684	684	constitute indebtedness of the state as prohibited by the
685	685	constitution.
686	686	(e) The board may require fund participants to make charges,
687	687	levy taxes, or otherwise provide for sufficient money to pay
688	688	acquired obligations.
689	689	(f) Revenue bonds issued under this subchapter must be
690	690	authorized by resolution of the board and must have the form and
691	691	characteristics and bear the designations as the resolution
692	692	provides.
693	693	(g) Revenue bonds issued under this subchapter may:
694	694	(1) bear interest at the rate or rates payable
695	695	annually or otherwise;
696	696	(2) be dated;
697	697	(3) mature at the time or times, serially, as term
698	698	revenue bonds, or otherwise in not more than 50 years from their
699	699	dates;
700	700	(4) be callable before stated maturity on the terms
701	701	and at the prices, be in the denominations, be in the form, either
702	702	coupon or registered, carry registration privileges as to principal
703	703	only or as to both principal and interest and as to successive
704	704	exchange of coupon for registered bonds or one denomination for
705	705	bonds of other denominations, and successive exchange of registered
706	706	revenue bonds for coupon revenue bonds, be executed in the manner,
707	707	and be payable at the place or places inside or outside the state,
708	708	as provided by the resolution;
709	709	(5) be issued in temporary or permanent form;
710	710	(6) be issued in one or more installments and from time
711	711	to time as required and sold at a price or prices and under terms
712	712	determined by the board to be the most advantageous reasonably
713	713	obtainable; and
714	714	(7) be issued on a parity with and be secured in the
715	715	manner as other revenue bonds authorized to be issued by this
716	716	subchapter or may be issued without parity and secured differently
717	717	than other revenue bonds.
718	718	(h) Section 17.955 applies to revenue bonds issued under
719	719	this subchapter in the same manner as that section applies to water
720	720	financial assistance bonds.
721	721	(i) All proceedings relating to the issuance of revenue
722	722	bonds issued under this subchapter shall be submitted to the
723	723	attorney general for examination. If the attorney general finds
724	724	that the revenue bonds have been authorized in accordance with law,
725	725	the attorney general shall approve the revenue bonds, and the
726	726	revenue bonds shall be registered by the comptroller. After the
727	727	approval and registration, the revenue bonds are incontestable in
728	728	any court or other forum for any reason and are valid and binding
729	729	obligations in accordance with their terms for all purposes.
730	730	(j) The proceeds received from the sale of revenue bonds
731	731	issued under this subchapter may be deposited or invested in any
732	732	manner and in such investments as may be specified in the resolution
733	733	or other proceedings authorizing those obligations. Money in the
734	734	fund or accounts created by this subchapter or created in the
735	735	resolution or other proceedings authorizing the revenue bonds may
736	736	be invested in any manner and in any obligations as may be specified
737	737	in the resolution or other proceedings.
738	738	Sec. 15.476. SUBCHAPTER CUMULATIVE OF OTHER LAWS.
739	739	(a) This subchapter is cumulative of other laws on the subject,
740	740	and the board may use provisions of other applicable laws in the
741	741	issuance of bonds and other obligations and the execution of bond
742	742	enhancement agreements, but this subchapter is wholly sufficient
743	743	authority for the issuance of bonds and other obligations, the
744	744	execution of bond enhancement agreements, and the performance of
745	745	all other acts and procedures authorized by this subchapter.
746	746	(b) In addition to other authority granted by this
747	747	subchapter, the board may exercise the authority granted to the
748	748	governing body of an issuer with regard to the issuance of
749	749	obligations under Chapter 1371, Government Code.
750	750	SECTION 2.03. Subsection (b), Section 15.973, Water Code,
751	751	is amended to read as follows:
752	752	(b) The fund consists of:
753	753	(1) appropriations from the legislature;
754	754	(2) any other fees or sources of revenue that the
755	755	legislature may dedicate for deposit to the fund;
756	756	(3) repayments of loans made from the fund;
757	757	(4) interest earned on money credited to the fund;
758	758	(5) depository interest allocable to the fund;
759	759	(6) money from gifts, grants, or donations to the
760	760	fund;
761	761	(7) money from revenue bonds or other sources
762	762	designated by the board; [and]
763	763	(8) proceeds from the sale of political subdivision
764	764	bonds or obligations held in the fund and not otherwise pledged to
765	765	the discharge, repayment, or redemption of revenue bonds or other
766	766	bonds, the proceeds of which were placed in the fund; and
767	767	(9) money disbursed to the fund from the state water
768	768	implementation fund for Texas as authorized by Section 15.434.
769	769	SECTION 2.04. Section 15.974, Water Code, is amended by
770	770	adding Subsection (b) to read as follows:
771	771	(b) The board shall transfer back to the state water
772	772	implementation fund for Texas any money disbursed to the fund as
773	773	described by Section 15.973(b)(9) if the requirements of Section
774	774	15.435 are satisfied.
775	775	SECTION 2.05. Section 15.993, Water Code, is amended to
776	776	read as follows:
777	777	Sec. 15.993. FUND. The rural water assistance fund is a
778	778	special fund in the state treasury. The fund consists of:
779	779	(1) money directly appropriated to the board for a
780	780	purpose of the fund;
781	781	(2) repayment of principal and interest from loans
782	782	made from the fund not otherwise needed as a source of revenue
783	783	pursuant to Section 17.9615(b);
784	784	(3) money transferred by the board from any sources
785	785	available;
786	786	(4) interest earned on the investment of money in the
787	787	fund and depository interest allocable to the fund;
788	788	(5) money transferred to the fund from the water
789	789	assistance fund in accordance with Section 15.011(b), including
790	790	proceeds from the sale of political subdivision bonds by the board
791	791	to the Texas Water Resources Finance Authority that are deposited
792	792	in the water assistance fund as provided by Section 17.0871;
793	793	(6) money from gifts, grants, or donations to the
794	794	fund;
795	795	(7) money disbursed to the fund from the state water
796	796	implementation fund for Texas as authorized by Section 15.434; and
797	797	(8) [(7)] any other fees or sources of revenue that
798	798	the legislature may dedicate for deposit to the fund.
799	799	SECTION 2.06. Section 15.994, Water Code, is amended by
800	800	adding Subsection (i) to read as follows:
801	801	(i) The board shall transfer back to the state water
802	802	implementation fund for Texas any money disbursed to the fund as
803	803	described by Section 15.993(7) if the requirements of Section
804	804	15.435 are satisfied.
805	805	SECTION 2.07. Section 17.183, Water Code, is amended to
806	806	read as follows:
807	807	Sec. 17.183. CONSTRUCTION CONTRACT REQUIREMENTS. (a) The
808	808	governing body of each political subdivision receiving financial
809	809	assistance from the board shall require in all contracts for the
810	810	construction of a project:
811	811	(1) that each bidder furnish a bid guarantee
812	812	equivalent to five percent of the bid price;
813	813	(2) that each contractor awarded a construction
814	814	contract furnish performance and payment bonds:
815	815	(A) the performance bond shall include without
816	816	limitation guarantees that work done under the contract will be
817	817	completed and performed according to approved plans and
818	818	specifications and in accordance with sound construction
819	819	principles and practices; and
820	820	(B) the performance and payment bonds shall be in
821	821	a penal sum of not less than 100 percent of the contract price and
822	822	remain in effect for one year beyond the date of approval by the
823	823	engineer of the political subdivision; [and]
824	824	(3) that payment be made in partial payments as the
825	825	work progresses;
826	826	(4) that each partial payment shall not exceed 95
827	827	percent of the amount due at the time of the payment as shown by the
828	828	engineer of the project, but, if the project is substantially
829	829	complete, a partial release of the five percent retainage may be
830	830	made by the political subdivision with approval of the executive
831	831	administrator;
832	832	(5) that payment of the retainage remaining due upon
833	833	completion of the contract shall be made only after:
834	834	(A) approval by the engineer for the political
835	835	subdivision as required under the bond proceedings;
836	836	(B) approval by the governing body of the
837	837	political subdivision by a resolution or other formal action; and
838	838	(C) certification by the executive administrator
839	839	in accordance with the rules of the board that the work to be done
840	840	under the contract has been completed and performed in a
841	841	satisfactory manner and in accordance with approved plans and
842	842	specifications [sound engineering principles and practices];
843	843	(6) that no valid approval may be granted unless the
844	844	work done under the contract has been completed and performed in a
845	845	satisfactory manner according to approved plans and
846	846	specifications; and
847	847	(7) that, if a political subdivision receiving
848	848	financial assistance under Subchapter K of this chapter, labor from
849	849	inside the political subdivision be used to the extent possible.
850	850	(b) Plans and specifications submitted to the board in
851	851	connection with an application for financial assistance must
852	852	include a seal by a licensed engineer affirming that the plans and
853	853	specifications are consistent with and conform to current industry
854	854	design and construction standards.
855	855	SECTION 2.08. Subsection (a), Section 17.185, Water Code,
856	856	is amended to read as follows:
857	857	(a) The board may inspect the construction of a project at
858	858	any time to assure that[:
859	859	[(1)] the contractor is substantially complying with
860	860	the approved engineering plans and specifications of the project[;
861	861	and
862	862	[(2) the contractor is constructing the project in
863	863	accordance with sound engineering principles].
864	864	SECTION 2.09. Section 17.187, Water Code, is amended to
865	865	read as follows:
866	866	Sec. 17.187. CERTIFICATE OF APPROVAL. The executive
867	867	administrator may consider the following as grounds for refusal to
868	868	give a certificate of approval for any construction contract:
869	869	(1) failure to construct the project according to
870	870	approved plans and specifications; or
871	871	(2) [failure to construct the works in accordance with
872	872	sound engineering principles; or
873	873	[(3)] failure to comply with any term of the contract.
874	874	SECTION 2.10. Subsection (c), Section 17.276, Water Code,
875	875	is amended to read as follows:
876	876	(c) The board has the sole responsibility and authority for
877	877	selecting the political subdivisions to whom financial assistance
878	878	may be provided for treatment works and the amount of any such
879	879	assistance. [In consultation with and pursuant to agreement with
880	880	the political subdivision, except as provided by Subsection (d) of
881	881	this section, the board shall determine the location, time, design,
882	882	scope, and all other aspects of the construction of a sewerage
883	883	system for which financial assistance is provided.]
884	884	SECTION 2.11. Subsection (c), Section 17.775, Water Code,
885	885	is amended to read as follows:
886	886	(c) The board has the sole responsibility and authority for
887	887	selecting the political subdivisions to whom financial assistance
888	888	may be provided and[,] the amount of any such assistance[, and in
889	889	consultation with and pursuant to agreement with the political
890	890	subdivision, the board shall determine the location, time, design,
891	891	scope, and all other aspects of the construction to be performed].
892	892	SECTION 2.12. Subsection (c), Section 17.853, Water Code,
893	893	is amended to read as follows:
894	894	(c) The board may use the fund only:
895	895	(1) to provide state matching funds for federal funds
896	896	provided to the state water pollution control revolving fund or to
897	897	any additional state revolving fund created under Subchapter J,
898	898	Chapter 15;
899	899	(2) to provide financial assistance from the proceeds
900	900	of taxable bond issues to water supply corporations organized under
901	901	Chapter 67, and other participants;
902	902	(3) to provide financial assistance to participants
903	903	for the construction of water supply projects and treatment works;
904	904	(4) to provide financial assistance for an interim
905	905	construction period to participants for projects for which the
906	906	board will provide long-term financing through the water
907	907	development fund;
908	908	(5) to provide financial assistance for water supply
909	909	and sewer service projects in economically distressed areas as
910	910	provided by Subchapter K, Chapter 17, to the extent the board can
911	911	make that assistance without adversely affecting the current or
912	912	future integrity of the fund or of any other financial assistance
913	913	program of the board; [and]
914	914	(6) to provide funds to the water infrastructure fund
915	915	created under Section 15.973; and
916	916	(7) to provide funds to the state water implementation
917	917	revenue fund for Texas created under Section 15.472.
918	918	SECTION 2.13. Section 17.895, Water Code, is amended to
919	919	read as follows:
920	920	Sec. 17.895. SOURCES OF ASSETS. The fund is composed of:
921	921	(1) money and assets, including bond proceeds,
922	922	attributable to the bonds;
923	923	(2) investment income earned on money on deposit in
924	924	the fund and depository interest earned on money on deposit in the
925	925	state treasury;
926	926	(3) money appropriated by the legislature;
927	927	(4) repayments of principal and interest on loans made
928	928	under this subchapter;
929	929	(5) administrative fees charged by the board under the
930	930	bond program;
931	931	(6) money disbursed to the fund from the state water
932	932	implementation fund for Texas as authorized by Section 15.434; and
933	933	(7) [(6)] any other funds, regardless of their source,
934	934	that the board directs be deposited to the credit of the fund.
935	935	SECTION 2.14. Section 17.899, Water Code, is amended by
936	936	adding Subsection (c) to read as follows:
937	937	(c) The board shall transfer back to the state water
938	938	implementation fund for Texas any money disbursed to the fund as
939	939	described by Section 17.895(6) if the requirements of Section
940	940	15.435 are satisfied.
941	941	SECTION 2.15. Section 17.957, Water Code, is amended by
942	942	amending Subsection (b) and adding Subsection (d) to read as
943	943	follows:
944	944	(b) The state participation account is composed of:
945	945	(1) money and assets attributable to water financial
946	946	assistance bonds designated by the board as issued for projects
947	947	described in Section 16.131;
948	948	(2) money from the sale, transfer, or lease of a
949	949	project described in Subdivision (1) that was acquired,
950	950	constructed, reconstructed, developed, or enlarged with money from
951	951	the state participation account;
952	952	(3) payments received under a bond enhancement
953	953	agreement with respect to water financial assistance bonds
954	954	designated by the board as issued for projects described in Section
955	955	16.131;
956	956	(4) investment income earned on money on deposit in
957	957	the state participation account;
958	958	(5) money disbursed to the fund from the state water
959	959	implementation fund for Texas as authorized by Section 15.434; and
960	960	(6) [(5)] any other funds, regardless of their source,
961	961	that the board directs be deposited to the credit of the state
962	962	participation account.
963	963	(d) The board shall transfer back to the state water
964	964	implementation fund for Texas any money disbursed to the fund as
965	965	described by Subsection (b)(5) of this section if the requirements
966	966	of Section 15.435 are satisfied.
967	967	SECTION 2.16. Subsection (e), Section 49.153, Water Code,
968	968	is amended to read as follows:
969	969	(e) Subsection (c) does not apply to:
970	970	(1) a note issued to and approved by [the]:
971	971	(A) the Farmers Home Administration;
972	972	(B) the United States Department of Agriculture;
973	973	(C) the Texas Water Development Board; [or]
974	974	(D) the North American Development Bank; or
975	975	(E) a federally chartered instrumentality of the
976	976	United States authorized under 12 U.S.C. Section 2128(f) to provide
977	977	financing for water and waste disposal facilities; or
978	978	(2) a district described by Section 49.181(h).
979	979	SECTION 2.17. Subsection (a), Section 49.181, Water Code,
980	980	is amended to read as follows:
981	981	(a) A district may not issue bonds unless the commission
982	982	determines that the project to be financed by the bonds is feasible
983	983	and issues an order approving the issuance of the bonds. This
984	984	section does not apply to:
985	985	(1) refunding bonds if the commission issued an order
986	986	approving the issuance of the bonds or notes that originally
987	987	financed the project;
988	988	(2) refunding bonds that are issued by a district
989	989	under an agreement between the district and a municipality allowing
990	990	the issuance of the district's bonds to refund bonds issued by the
991	991	municipality to pay the cost of financing facilities;
992	992	(3) bonds issued to and approved by the Farmers Home
993	993	Administration, the United States Department of Agriculture, the
994	994	North American Development Bank, [or] the Texas Water Development
995	995	Board, or a federally chartered instrumentality of the United
996	996	States authorized under 12 U.S.C. Section 2128(f) to finance such a
997	997	project;
998	998	(4) refunding bonds issued to refund bonds described
999	999	by Subdivision (3); or
1000	1000	(5) bonds issued by a public utility agency created
1001	1001	under Chapter 572, Local Government Code, any of the public
1002	1002	entities participating in which are districts if at least one of
1003	1003	those districts is a district described by Subsection (h)(1)(E).
1004	1004	SECTION 2.18. (a) As soon as practicable after the
1005	1005	effective date of this Act, the lieutenant governor and the speaker
1006	1006	of the house of representatives shall appoint the initial
1007	1007	appointive members of the State Water Implementation Fund for Texas
1008	1008	Advisory Committee as provided by Section 15.438, Water Code, as
1009	1009	added by this Act.
1010	1010	(b) Notwithstanding Subsection (a) of this section and
1011	1011	Section 15.438, Water Code, as added by this Act, if the lieutenant
1012	1012	governor and the speaker of the house of representatives do not
1013	1013	appoint the initial appointive members of the State Water
1014	1014	Implementation Fund for Texas Advisory Committee as provided by
1015	1015	Section 15.438, Water Code, as added by this Act, by December 1,
1016	1016	2013:
1017	1017	(1) the presiding officer of the committee of the
1018	1018	senate having primary jurisdiction over natural resources and the
1019	1019	presiding officer of the committee of the house of representatives
1020	1020	having primary jurisdiction over natural resources serve as initial
1021	1021	members of the advisory committee and as the initial co-presiding
1022	1022	officers of the advisory committee;
1023	1023	(2) the presiding officer of the committee of the
1024	1024	senate having primary jurisdiction over natural resources shall
1025	1025	appoint two members of the senate to serve as initial members of the
1026	1026	advisory committee, including a member who meets the requirements
1027	1027	of Paragraph (A), Subdivision (2), Subsection (a), Section 15.438,
1028	1028	Water Code, as added by this Act; and
1029	1029	(3) the presiding officer of the committee of the
1030	1030	house of representatives having primary jurisdiction over natural
1031	1031	resources shall appoint two members of the house of representatives
1032	1032	to serve as initial members of the advisory committee, including a
1033	1033	member who meets the requirements of Paragraph (A), Subdivision
1034	1034	(3), Subsection (a), Section 15.438, Water Code, as added by this
1035	1035	Act.
1036	1036	SECTION 2.19. (a) Not later than September 1, 2014, the
1037	1037	State Water Implementation Fund for Texas Advisory Committee shall
1038	1038	submit recommendations to the Texas Water Development Board on the
1039	1039	rules to be adopted by the board under Subdivisions (1) and (2),
1040	1040	Subsection (a), Section 15.439, Water Code, as added by this Act.
1041	1041	(b) Not later than the later of the 90th day after the date
1042	1042	the Texas Water Development Board receives the recommendations
1043	1043	described by Subsection (a) of this section or March 1, 2015, the
1044	1044	board shall adopt rules under Section 15.439, Water Code, as added
1045	1045	by this Act.
1046	1046	SECTION 2.20. As soon as practicable after the effective
1047	1047	date of this Act, the Texas Water Development Board shall create a
1048	1048	stakeholders committee under Subsection (c), Section 15.436, Water
1049	1049	Code, as added by this Act.
1050	1050	SECTION 2.21. Not later than December 1, 2013, the
1051	1051	stakeholders committee created by the Texas Water Development Board
1052	1052	under Subsection (c), Section 15.436, Water Code, as added by this
1053	1053	Act, shall submit the standards established by the committee under
1054	1054	that subsection to the board.
1055	1055	SECTION 2.22. (a) Each regional water planning group shall
1056	1056	prepare a draft prioritization of the projects included in the
1057	1057	regional water plan most recently adopted by the group in
1058	1058	accordance with Section 15.436, Water Code, as added by this Act,
1059	1059	and submit the draft prioritization of the projects to the Texas
1060	1060	Water Development Board not later than June 1, 2014. The board
1061	1061	shall provide comments to each regional water planning group on the
1062	1062	draft prioritization submitted by the group. Each regional water
1063	1063	planning group shall submit a final prioritization of the projects
1064	1064	to the board not later than September 1, 2014.
1065	1065	(b) Subsection (d), Section 15.436, Water Code, as added by
1066	1066	this Act, applies to a regional water plan beginning with the plan
1067	1067	that is required to be submitted to the Texas Water Development
1068	1068	Board by January 5, 2016.
1069	1069	SECTION 2.23. The Texas Water Development Board shall post
1070	1070	the information described by Subsection (b), Section 15.440, Water
1071	1071	Code, as added by this Act, on the board's Internet website not
1072	1072	later than March 1, 2014.
1073	1073	ARTICLE 3. EFFECTIVE DATE
1074	1074	SECTION 3.01. This Act takes effect September 1, 2013.
1075	1075	* * * * *