By: Lucio, et al. S.B. No. 2140
A BILL TO BE ENTITLED
AN ACT
relating to the provision by the Texas Water Development Board of
financial assistance for the development of certain projects in
economically distressed areas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Subchapter K, Chapter 17, Water
Code, is amended to read as follows:
SUBCHAPTER K. ASSISTANCE TO ECONOMICALLY DISTRESSED AREAS FOR
WATER SUPPLY, [AND] SEWER SERVICE, AND RESIDENTIAL DRAINAGE
PROJECTS
SECTION 2. Sections 17.921(1) and (2), Water Code, are
amended to read as follows:
(1) "Economically distressed area" means an area in
which:
(A) water supply, [or] sewer, or residential
drainage services are inadequate to meet minimal needs of
residential users as defined by board rules;
(B) financial resources are inadequate to
provide water supply, [or] sewer, or residential drainage services
that will satisfy those needs; and
(C) an established residential subdivision was
located on June 1, 2005, as determined by the board.
(2) "Financial assistance" means the funds provided by
the board to political subdivisions for water supply, [and] sewer,
and residential drainage services under this subchapter.
SECTION 3. Section 17.922, Water Code, is amended to read as
follows:
Sec. 17.922. FINANCIAL ASSISTANCE. (a) The economically
distressed areas account may be used by the board to provide
financial assistance to political subdivisions for the
construction, acquisition, or improvement of water supply, [and]
sewer, and residential drainage services, including providing
funds from the account for the state's participation in federal
programs that provide assistance to political subdivisions.
(b) To the extent practicable, the board shall use the funds
in the economically distressed areas account in conjunction with
the other financial assistance available through the board to
encourage the use of cost-effective water supply, [and] wastewater,
and residential drainage systems, including regional systems, to
maximize the long-term economic development of counties eligible
for financial assistance under the economically distressed areas
program. Any savings derived from the construction of a regional
system that includes or serves an economically distressed area
project shall be factored into the board's determination of
financial assistance for the economically distressed area in a
manner that assures the economically distressed area receives
appropriate benefits from the savings. In no event shall financial
assistance provided from the economically distressed areas account
be used to provide water supply, [or] wastewater, or residential
drainage service to any area that is not an economically distressed
area.
SECTION 4. Subchapter K, Chapter 17, Water Code, is amended
by adding Section 17.9226 to read as follows:
Sec. 17.9226. USE OF CERTAIN GENERAL OBLIGATION BONDS. The
board shall:
(1) work to maximize the effectiveness of the
additional general obligation bonds authorized by Section
49-d-10(a-1), Article III, Texas Constitution, by using the
additional bonds in conjunction with other sources of financial
assistance, including nonpublic funds, to provide financial
assistance to political subdivisions for the construction,
acquisition, or improvement of water supply, sewer, and residential
drainage services; and
(2) use the additional general obligation bonds
authorized by Section 49-d-10(a-1), Article III, Texas
Constitution, to promote and support public-private partnerships
that the board determines:
(A) are financially viable;
(B) will diversify the methods of financing
available for water supply, sewer, and residential drainage
services; and
(C) will reduce reliance on the issuance of bonds
supported with general revenue.
SECTION 5. Sections 17.927(a) and (b), Water Code, are
amended to read as follows:
(a) A political subdivision may apply to the board for
financial assistance under this subchapter by submitting an
application together with a plan for providing water supply, [and]
sewer, or residential drainage services to an economically
distressed area for which the financial assistance is to be used.
(b) The application and plan must include:
(1) the name of the political subdivision and its
principal officers;
(2) a citation of the law under which the political
subdivision was created and operates;
(3) a project plan, prepared and certified by an
engineer registered to practice in this state, that must:
(A) describe the proposed planning, design, and
construction activities necessary to provide water supply, [and]
sewer, or residential drainage services that meet minimum state
standards; and
(B) identify the households to which the water
supply, [and] sewer, or residential drainage services will be
provided;
(4) a budget that estimates the total cost of
providing water supply, [and] sewer, or residential drainage
services to the economically distressed area and a proposed
schedule and method for repayment of financial assistance
consistent with board rules and guidelines;
(5) a description of the existing water supply, [and]
sewer, or residential drainage facilities located in the area to be
served by the proposed project, including a statement prepared and
certified by an engineer registered to practice in this state that
the facilities do not meet minimum state standards;
(6) documentation that the appropriate political
subdivision has adopted the model rules developed under Section
16.343;
(7) information identifying the median household
income for the area to be served by the proposed project; and
(8) the total amount of assistance requested from the
economically distressed areas account.
SECTION 6. Subchapter K, Chapter 17, Water Code, is amended
by adding Section 17.9275 to read as follows:
Sec. 17.9275. PRIORITIZATION OF PROJECTS BY BOARD.
(a) The board shall prioritize projects for the purpose of
providing financial assistance under this subchapter.
(b) The board shall establish a 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 to
projects that will have a substantial effect, including projects
that will serve an area for which the Department of State Health
Services has issued a finding that a nuisance dangerous to the
public health and safety exists resulting from water supply and
sanitation problems.
(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 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;
(5) 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; and
(B) the applicant is able to begin implementing
or constructing the project; and
(6) the cost per connection of the project.
SECTION 7. Section 17.928(c), Water Code, is amended to
read as follows:
(c) If an applicant includes a proposal for treatment or
residential drainage works, the board may not deliver funds for the
treatment or residential drainage works until the applicant has
received a permit for construction and operation of the treatment
or residential drainage works and approval of the plans and
specifications from the commission or other applicable permitting
authority or unless such a permit is not required by the commission
or other applicable permitting authority.
SECTION 8. Section 17.929(a), Water Code, is amended to
read as follows:
(a) In passing on an application for financial assistance,
the board shall consider:
(1) the need of the economically distressed area to be
served by the water supply, [and] sewer, or residential drainage
services in relation to the need of other political subdivisions
requiring financial assistance under this subchapter and the
relative costs and benefits of all applications;
(2) the availability to the area to be served by the
project of revenue or financial assistance from alternative sources
for the payment of the cost of the proposed project;
(3) the financing of the proposed water supply, [and]
sewer, or residential drainage project, including consideration
of:
(A) the budget and repayment schedule submitted
under Section 17.927(b)(4);
(B) other items included in the application
relating to financing; and
(C) other financial information and data
available to the board;
(4) whether the county and other appropriate political
subdivisions have adopted model rules pursuant to Section 16.343
and the manner of enforcement of model rules; and
(5) the feasibility of achieving cost savings by
providing a regional facility for water supply, [or] wastewater, or
residential drainage service and the feasibility of financing the
facility by using funds from the economically distressed areas
account or any other financial assistance.
SECTION 9. Sections 17.933(b) and (d), Water Code, are
amended to read as follows:
(b) In providing financial assistance to an applicant under
this subchapter, the board may not provide to the applicant
financial assistance for which repayment is not required in an
amount that exceeds 50 percent of the total amount of the financial
assistance plus interest on any amount that must be repaid, unless
the [Texas] Department of State Health Services issues a finding
that a nuisance dangerous to the public health and safety exists
resulting from water supply and sanitation problems in the area to
be served by the proposed project. The board and the applicant
shall provide to the [Texas] Department of State Health Services
information necessary to make a determination, and the board and
the [Texas] Department of State Health Services may enter into
necessary memoranda of understanding to carry out this subsection.
(d) In determining the amount and form of financial
assistance and the amount and form of repayment, if any, the board
shall consider:
(1) rates, fees, and charges that the average customer
to be served by the project will be able to pay [based on a
comparison of what other families of similar income who are
similarly situated pay for comparable services];
(2) sources of funding available to the political
subdivision from federal and private funds and from other state
funds;
(3) any local funds of the political subdivision to be
served by the project if the economically distressed area to be
served by the board's financial assistance is within the boundary
of the political subdivision; and
(4) the just, fair, and reasonable charges for water,
[and] wastewater, and residential drainage service as provided in
this code.
SECTION 10. Section 17.936(d), Water Code, is amended to
read as follows:
(d) The provider of water or wastewater utility or
residential drainage service to an economically distressed area may
recover from a developer or owner of an undeveloped lot
economically distressed areas program impact fees as provided by
rules adopted by the board.
SECTION 11. Subchapter K, Chapter 17, Water Code, is
amended by adding Section 17.937 to read as follows:
Sec. 17.937. REPORTING AND TRANSPARENCY REQUIREMENTS.
(a) The board shall annually post on the board's Internet website
a report detailing each project for which the board has provided
financial assistance under this subchapter.
(b) The report must include:
(1) a description of each project;
(2) the location of each project;
(3) the number of residents served by each project;
(4) the amount of financial assistance provided or
anticipated to be provided for each project; and
(5) a statement of whether each project has been
completed and, if not, the expected completion date.
SECTION 12. Section 17.933(b-1), Water Code, is repealed.
SECTION 13. This Act takes effect on the date on which the
constitutional amendment proposed by the 85th Legislature, Regular
Session, 2017, providing for the issuance of additional general
obligation bonds by the Texas Water Development Board to provide
financial assistance for the development of certain projects in
economically distressed areas takes effect. If that amendment is
not approved by the voters, this Act has no effect.