By: Davis of Harris, Howard, Wu H.B. No. 274
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of the disaster reinvestment and
infrastructure planning board and the creation of the disaster
reinvestment and infrastructure planning revolving fund; making an
appropriation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 17, Water Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H. DISASTER REINVESTMENT AND INFRASTRUCTURE PLANNING
BOARD; REVOLVING FUND
Sec. 17.801. DEFINITIONS. In this subchapter:
(1) "Board" means, notwithstanding Section 17.001,
the disaster reinvestment and infrastructure planning board.
(2) "Fund" means the disaster reinvestment and
infrastructure planning revolving fund.
(3) "Trust company" means the Texas Treasury
Safekeeping Trust Company.
Sec. 17.802. ESTABLISHMENT; PURPOSE. The disaster
reinvestment and infrastructure planning board is established to:
(1) administer the disaster reinvestment and
infrastructure planning revolving fund; and
(2) determine the eligibility of applicants for
financial assistance from the fund and award grants and loans from
the fund.
Sec. 17.803. COMPOSITION. (a) The board is composed of:
(1) the following ex officio members:
(A) a member of the Texas Water Development Board
designated by the presiding officer of that board;
(B) a member of the governing board of the Texas
Department of Housing and Community Affairs designated by the
presiding officer of that board;
(C) the commissioner of insurance or the
commissioner's designee;
(D) a member of the Texas Transportation
Commission designated by the presiding officer of the commission;
(E) a member of the Public Safety Commission
designated by the presiding officer of the commission;
(F) the executive commissioner of the Health and
Human Services Commission or the executive commissioner's
designee;
(G) the commissioner of agriculture or the
commissioner's designee;
(H) the land commissioner or the land
commissioner's designee;
(I) a member of the Texas Commission on
Environmental Quality designated by the presiding officer of the
commission; and
(J) the comptroller or the comptroller's
designee; and
(2) three public members, one appointed by the
governor, one appointed by the lieutenant governor, and one
appointed by the speaker of the house of representatives.
(b) Appointed board members serve staggered six-year terms
with one member's term expiring February 1 of each odd-numbered
year.
(c) The governor shall designate one member of the board to
serve as presiding officer of the board.
Sec. 17.804. ADMINISTRATIVE ATTACHMENT. (a) The board is
administratively attached to the Texas Water Development Board.
(b) The Texas Water Development Board shall provide office
space and administrative support services, including human
resources, budgetary, accounting, purchasing, payroll, information
technology, and legal support services, to the board as necessary
to carry out the purposes of this subchapter.
Sec. 17.805. FUND. (a) The disaster reinvestment and
infrastructure planning revolving fund is a special fund outside
the state treasury to be used by the board, without further
legislative appropriation, for the purpose of providing financial
assistance to political subdivisions in response to a disaster 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) the proceeds of bonds issued as authorized by
Section 49-q, Article III, Texas Constitution; and
(5) investment earnings and interest earned on amounts
credited to the fund.
Sec. 17.806. 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. It is the
intent of the legislature that the fund remain available in
perpetuity for the purposes of this subchapter.
(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
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. 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.
Sec. 17.807. USE OF MONEY IN FUND. (a) The board by rule
shall establish a revolving loan and grant program to use money from
the fund to provide financial assistance for a public
infrastructure project to:
(1) rebuild infrastructure damaged or destroyed in a
disaster in a manner that protects against future loss; or
(2) construct new infrastructure to mitigate against
damage from a future disaster.
(b) The board may provide financial assistance from the
fund:
(1) only in the form of:
(A) a loan to a political subdivision that is
located wholly or partly in an area declared by the governor to be a
disaster area and that the Federal Emergency Management Agency has
determined is eligible to receive financial assistance from the
agency in response to the disaster; or
(B) a loan or grant to:
(i) a political subdivision that is located
wholly or partly in an area declared by the governor to be a
disaster area and that the Federal Emergency Management Agency has
determined is not eligible to receive financial assistance from the
agency in response to the disaster, including a political
subdivision determined to be ineligible based solely on a failure
to meet minimum population requirements; or
(ii) a public or private hospital, other
than an ambulatory surgical center:
(a) located wholly or partly in an
area declared by the governor to be a disaster area;
(b) determined by federal agencies
not to be eligible for assistance;
(c) not eligible for private
insurance assistance that is sufficient to restore the hospital to
pre-disaster operating function; and
(d) the closure of which would cause
an imminent threat to public health in the surrounding area, as
determined by the Department of State Health Services; and
(2) only during the period for which the governor's
disaster declaration is in effect or for a longer period determined
by the board if the application for financial assistance is for a
public infrastructure project described by Subsection (a)(1).
(c) The board shall allocate money in the fund so that:
(1) 50 percent of the money in the fund is available to
provide loans under Subsection (b)(1)(A); and
(2) the remainder of the money in the fund is available
to provide loans or grants under Subsection (b)(1)(B).
(d) The board may not use more than 25 percent of the money
in the fund allocated for the purposes of Subsection (c)(2) to award
grants to political subdivisions to:
(1) assist in the payment of the political
subdivision's costs associated with an infrastructure project; or
(2) pay or defer the payment of the principal of and
interest on a loan received from the fund by the political
subdivision or extend the amount of time the political subdivision
has to repay the loan.
(e) The board may not provide financial assistance to
rebuild or construct a privately owned structure, except as
provided by Subsection (b)(1)(B)(ii).
Sec. 17.808. LOANS FROM FUND. (a) A loan made from the fund
must be subject to the following conditions:
(1) the loan must be made at or below market interest
rates for a term not to exceed 20 years;
(2) principal and interest payments on the loan must
begin not later than 18 months after the loan is originated; and
(3) the loan proceeds must be expended solely on an
infrastructure project described by Section 17.807(a).
(b) The board shall credit to the fund all principal and
interest payments on a loan from the fund.
(c) The board by rule shall provide for interest rates on
loans offered to political subdivisions to vary according to a risk
analysis so that a political subdivision must pay a significantly
higher interest rate than other political subdivisions if the
political subdivision is, as determined by the board, likely to
suffer significant additional damage in subsequent disasters.
Sec. 17.809. GRANTS FROM FUND. (a) The board may not make a
grant to a political subdivision that, based on information
available to the board, has experienced repeated damage from
disasters.
(b) The board shall suspend the award of grants from the
fund for the duration of a period during which the balance of the
fund is less than a minimum fund balance established by board rule.
Sec. 17.810. APPLICATION FOR LOAN OR GRANT. (a) The board
shall develop and implement an application process for a loan or
grant under this subchapter. At a minimum, the application must
include:
(1) a description of the infrastructure project for
which the applicant is requesting the loan or grant, including
information on the design life of the project;
(2) an estimate of the total cost of the project;
(3) an estimate of the amount of federal money the
applicant expects to receive for the project, if any;
(4) an estimate of the amount of money the applicant
has available to finance the project, if any;
(5) evidence that the applicant has staff, policies,
and procedures in place adequate to complete the project;
(6) information on the percentage of properties
located within the political subdivision's jurisdiction that are
covered by flood insurance, if the application is from a political
subdivision; and
(7) information regarding the protections from future
disasters that have been incorporated into the siting or design of
the project.
(b) The board by rule shall adopt a point system to allow the
board to prioritize certain applicants based on:
(1) the type of infrastructure project for which the
applicant is requesting the loan or grant and the stage of
development of the project;
(2) information provided by the applicants, or other
information that is available to the board, including information
regarding the applicants' ability to repay a loan from the fund;
(3) the availability of other money, including state
or federal matching funds, for the infrastructure project for which
the applicant is requesting the loan or grant;
(4) the existence of an emergency or an imminent
threat to public health;
(5) criteria that indicates the project incorporates
natural features, nature-based engineering approaches, or
characteristics that:
(A) make positive impacts on the environment;
(B) preserve or make efficient use of energy and
associated resources; or
(C) reduce negative impacts on the natural
environment;
(6) the percentage of properties located within the
political subdivision's jurisdiction that are covered by flood
insurance, if the applicant is a political subdivision;
(7) the applicant's past history of and future risk for
repeated damage from disasters, if the applicant is a political
subdivision; and
(8) other criteria developed by the board.
(c) The board by rule shall provide an expedited proce
dure
for acting on an application for financial assistance from the fund
for an infrastructure project. The expedited procedure must not
affect an applicant's receipt of federal money to which the
applicant may be eligible as a result of the disaster.
Sec. 17.811. REPORT. Not later than December 1 of each
even-numbered year, the board shall prepare and submit to the
governor, the lieutenant governor, and each member of the
legislature a report that includes:
(1) the balance of the fund as of that date;
(2) the total dollar amount of disbursements from the
fund during the two-year period preceding that date; and
(3) a general description of each public
infrastructure project for which an applicant was awarded a grant
or loan from the fund during the two-year period preceding that date
and the approximate cost of each of those projects.
SECTION 2. As soon as practicable after the effective date
of this Act, the governor, lieutenant governor, and speaker of the
house of representatives shall appoint members to the disaster
reinvestment and infrastructure planning board, as required by
Section 17.803, Water Code, as added by this Act. The governor
shall appoint one member to a term expiring February 1, 2025. The
lieutenant governor shall appoint one member to a term expiring
February 1, 2023. The speaker of the house of representatives shall
appoint one member to a term expiring February 1, 2021.
SECTION 3. (a) The amount of $1 billion is appropriated
from the economic stabilization fund to the comptroller for the
purpose of transferring that amount immediately to the credit of
the disaster reinvestment and infrastructure planning revolving
fund as created by this Act.
(b) This section takes effect only if this Act is approved
by a vote of two-thirds of the members present in each house of the
legislature, as provided by Section 49-g(m), Article III, Texas
Constitution.
SECTION 4. Except as otherwise provided by this Act, this
Act takes effect September 1, 2019.