Texas 2019 - 86th Regular

Texas Senate Bill SB2437 Compare Versions

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1	1	By: Miles S.B. No. 2437
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to the authority of the Texas Water Development Board to
7	7	establish, operate, and, through the issuance of general obligation
8	8	bonds, finance a grant program to provide financial assistance to
9	9	political subdivisions and the state for projects related to
10	10	disaster recovery; disaster mitigation; or construct, repair,
11	11	rehabilitate, or reconstruct state or local infrastructure.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Chapter 70, Water Code, is amended by adding
14	14	Subchapter A to read as follows:
15	15	SUBCHAPTER A. TEXAS DISASTER MITIGATION, RECOVERY, RESPONSE AND
16	16	INFRASTRUCTURE GRANT PROGRAM
17	17	Sec. 70.001. DEFINITIONS. In this subchapter:
18	18	(1) "Advisory committee" means the Texas Disaster
19	19	Mitigation, Recovery, Response and Infrastructure Advisory
20	20	Committee.
21	21	(2) "Board" means the Texas Water Development Board.
22	22	(3) "Bonds" means bonds, notes, and other public
23	23	securities.
24	24	(4) "Credit agreement" has the meaning assigned by
25	25	Section 1371.001, Government Code.
26	26	(5) "Fund" means the Texas Disaster Mitigation,
27	27	Recovery, Response and Infrastructure.
28	28	(6) "Historically underutilized business" has the
29	29	meaning assigned by Section 2161.001, Government Code.
30	30	(7) "Qualifying political subdivision" means a
31	31	county, municipality, independent school district, or other
32	32	special district.
33	33	(8) "Qualifying project" means any of the following,
34	34	if undertaken by a qualifying political subdivision or the state in
35	35	order to provide:
36	36	(A) a project for disaster mitigation
37	37	(B) a project for disaster recovery;
38	38	(C) a project for disaster response; or
39	39	(D) a project to construct, repair,
40	40	rehabilitate, or reconstruct state or local infrastructure.
41	41	(9) "Trust company" means the Texas Treasury
42	42	Safekeeping Trust Company.
43	43	Sec. 70.002. TEXAS DISASTER MITIGATION, RECOVERY, RESPONSE
44	44	AND INFRASTRUCTURE GRANT PROGRAM. The Board by rule shall
45	45	establish a grant program to use the proceeds from the sale of bonds
46	46	issued under Section 70.004 and the interest earned on those bonds
47	47	to provide financial assistance to qualifying political
48	48	subdivisions and the state to finance qualifying projects in the
49	49	political subdivision and the state.
50	50	Sec. 70.003. APPLICATION FOR GRANT. The Board shall
51	51	develop and implement an application process for a grant under this
52	52	subchapter. At a minimum, the application must include:
53	53	(1) a description of the qualifying project for which
54	54	the applicant is requesting the grant;
55	55	(2) an estimate of the total cost of the project; and
56	56	(3) evidence that the applicant has staff, policies,
57	57	and procedures in place adequate to complete the project.
58	58	Sec. 70.004. TEXAS DISASTER MITIGATION, RECOVERY, RESPONSE
59	59	AND INFRASTRUCTURE BONDS. (a) The Board may issue general
60	60	obligation bonds for the purposes provided in this subchapter. The
61	61	aggregate principal amount of the bonds that are issued may not
62	62	exceed the amount specified by Section 2, Article XIV, Texas
63	63	Constitution.
64	64	(b) The Board may enter into credit agreements relating to
65	65	the bonds. A credit agreement entered into under this subchapter
66	66	may be secured by and payable from the same sources as the bonds.
67	67	(c) The bonds shall be executed in the form, on the terms,
68	68	and in the denominations, bear interest, and be issued as
69	69	prescribed by the Board. The bonds may be issued in multiple
70	70	series and issues and may have the provisions the Board determines
71	71	appropriate and in the interest of the state.
72	72	(d) The Board has all powers necessary or appropriate to
73	73	carry out this subchapter and to implement Section 2, Article XIV,
74	74	Texas Constitution, including the powers granted to other
75	75	bond-issuing governmental agencies and units and to nonprofit
76	76	corporations by Chapters 1201, 1207, and 1371, Government Code.
77	77	(e) The bonds and the record of proceedings authorizing the
78	78	bonds and any related credit agreements shall be submitted to the
79	79	attorney general for approval. If the attorney general finds that
80	80	they will be issued in accordance with this subchapter and other
81	81	applicable law, the attorney general shall approve them and deliver
82	82	them to the comptroller for registration. After approval by the
83	83	attorney general, registration by the comptroller, and payment by
84	84	the purchasers of the bonds in accordance with the terms of sale and
85	85	after execution and delivery of the related credit agreements, the
86	86	bonds and related credit agreements are incontestable for any
87	87	cause.
88	88	(f) The proceeds from the sale of the bonds must be used to
89	89	provide funding for the grant program established under Section
90	90	70.002. The Board may use a portion of the proceeds from the sale of
91	91	the bonds to pay the cost of the issuance of the bonds.
92	92	(g) The comptroller shall pay the principal of the bonds as
93	93	they mature and the interest as it becomes payable and shall pay any
94	94	cost related to the bonds that becomes due, including payments
95	95	under credit agreements.
96	96	Sec. 70.005 FEDERAL MATCHING FUNDS. (a) Bond proceeds
97	97	described in this subchapter can go towards federal matching funds
98	98	including those offered by the Federal Emergency Management Agency,
99	99	and United States Army Corps of Engineers; and
100	100	(b) bond proceeds described in this subchapter can be used
101	101	to reimburse matching payments made to the federal including those
102	102	offered by the Federal Emergency Management Agency, and United
103	103	States Army Corps of Engineers.
104	104	SECTION 2 Chapter 70, Water Code, is amended by adding
105	105	Subchapter B to read as follows:
106	106	Sec. 70.432. FUND. (a) The Texas Disaster Mitigation,
107	107	Recovery, Response and Infrastructure fund is a special fund in the
108	108	state treasury outside the general revenue fund to be used by the
109	109	board, without further legislative appropriation, for the purpose
110	110	of implementing the Texas Disaster Mitigation, Recovery, Response
111	111	and Infrastructure Bonds as provided by this subchapter. The board
112	112	may establish separate accounts in the fund. The fund and the
113	113	fund's accounts are kept and held by the trust company for and in
114	114	the name of the board. The board has legal title to money and
115	115	investments in the fund until money is disbursed from the fund as
116	116	provided by this subchapter and board rules. It is the intent of
117	117	the legislature that the fund will never be used:
118	118	(1) for a purpose other than the support of
119	119	projects in the Texas Disaster Mitigation, Recovery, Response and
120	120	Infrastructure Bonds; or
121	121	(2) to certify that appropriations from the
122	122	treasury are within the amount estimated to be available in a fund
123	123	of the treasury affected by the appropriation.
124	124	(b) Money deposited to the credit of the fund may be used
125	125	only as provided by this subchapter.
126	126	(c) The fund consists of:
127	127	(1) money transferred or deposited to the credit
128	128	of the fund by law, including money from any source transferred or
129	129	deposited to the credit of the fund at the board's discretion as
130	130	authorized by law;
131	131	(2) the proceeds of any fee or tax imposed by this
132	132	state that by statute is dedicated for deposit to the credit of the
133	133	fund;
134	134	(3) any other revenue that the legislature by
135	135	statute dedicates for deposit to the credit of the fund;
136	136	(4) investment earnings and interest earned on
137	137	amounts credited to the fund; and
138	138	(5) money transferred to the fund under a bond
139	139	enhancement agreement from another fund or account to which money
140	140	from the fund was transferred under a bond enhancement agreement,
141	141	as authorized by Section 70.435.
142	142	Sec. 70.433. MANAGEMENT AND INVESTMENT OF FUND. (a) The
143	143	trust company shall hold and invest the fund, and any accounts
144	144	established in the fund, for and in the name of the board, taking
145	145	into account the purposes for which money in the fund may be used.
146	146	The fund may be invested with the state treasury pool.
147	147	(b) The overall objective for the investment of the fund is
148	148	to maintain sufficient liquidity to meet the needs of the fund while
149	149	striving to preserve the purchasing power of the fund.
150	150	(c) The trust company has any power necessary to accomplish
151	151	the purposes of managing and investing the assets of the fund. In
152	152	managing the assets of the fund, through procedures and subject to
153	153	restrictions the trust company considers appropriate, the trust
154	154	company may acquire, exchange, sell, supervise, manage, or retain
155	155	any kind of investment that a prudent investor, exercising
156	156	reasonable care, skill, and caution, would acquire or retain in
157	157	light of the purposes, terms, distribution requirements, and other
158	158	circumstances of the fund then prevailing, taking into
159	159	consideration the investment of all the assets of the fund rather
160	160	than a single investment.
161	161	(d) The trust company may charge fees to cover its costs
162	162	incurred in managing and investing the fund. The fees must be
163	163	consistent with the fees the trust company charges other state and
164	164	local governmental entities for which it provides investment
165	165	management services. The trust company may recover fees it charges
166	166	under this subsection only from the earnings of the fund.
167	167	(e) The trust company annually shall provide a written
168	168	report to the board and to the advisory committee with respect to
169	169	the investment of the fund. The trust company shall contract with a
170	170	certified public accountant to conduct an independent audit of the
171	171	fund annually and shall present the results of each annual audit to
172	172	the board and to the advisory committee. This subsection does not
173	173	affect the state auditor's authority to conduct an audit of the fund
174	174	under Chapter 321, Government Code.
175	175	(f) The trust company shall adopt a written investment
176	176	policy that is appropriate for the fund. The trust company shall
177	177	present the investment policy to the investment advisory board
178	178	established under Section 404.028, Government Code. The investment
179	179	advisory board shall submit to the trust company recommendations
180	180	regarding the policy.
181	181	(g) The board annually shall provide to the trust company a
182	182	forecast of the cash flows into and out of the fund. The board shall
183	183	provide updates to the forecasts as appropriate to ensure that the
184	184	trust company is able to achieve the objective specified by
185	185	Subsection (b).
186	186	(h) The trust company shall disburse money from the fund as
187	187	directed by the board. The board shall direct disbursements from
188	188	the fund on a semiannual schedule specified by the board and not
189	189	more frequently than twice in any state fiscal year.
190	190	(i) An investment-related contract entered into under this
191	191	section is not subject to Chapter 2260, Government Code.
192	192	Sec. 70.434. USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
193	193	OR ACCOUNTS. (a) At the direction of the board, the trust company
194	194	shall make disbursements from the fund to another fund or account
195	195	pursuant to a bond enhancement agreement authorized by Section
196	196	70.435 in the amounts the board determines are needed for debt
197	197	service payments on or security provisions of the board's general
198	198	obligation bonds or revenue bonds, shall be paid out of the economic
199	199	stabilization fund.
200	200	Sec. 70.435. BOND ENHANCEMENT AGREEMENTS. (a) A bond
201	201	enhancement agreement entered into under this section is an
202	202	agreement for professional services. A bond enhancement agreement
203	203	must contain terms that are consistent with Section 70.433(h), and
204	204	the agreement, including the period covered by the agreement and
205	205	all other terms and conditions of the agreement, must be approved by
206	206	the board. An obligation to disburse money from the fund, or from a
207	207	special account established by the board, in accordance with a bond
208	208	enhancement agreement is a special obligation of the board payable
209	209	solely from designated income and receipts of the fund or of the
210	210	account, as determined by the board. An obligation to disburse
211	211	money from the fund, or from a special account established by the
212	212	board, in accordance with a bond enhancement agreement does not
213	213	constitute indebtedness of the state.
214	214	(b) To facilitate the use of the fund for the purposes of
215	215	this subchapter, the board may direct the trust company to enter
216	216	into bond enhancement agreements to provide a source of revenue or
217	217	security for the payment of the principal of and interest on general
218	218	obligation bonds, including bonds issued under Section 2, Article
219	219	XIV, Texas Constitution, or revenue bonds issued by the board to
220	220	finance or refinance projects included in the state water plan if
221	221	the proceeds of the sale of the bonds have been or will be deposited
222	222	to the credit of the Texas Disaster Mitigation, Recovery, Response
223	223	and Infrastructure revenue fund.
224	224	(c) If the trust company enters into a bond enhancement
225	225	agreement under Subsection (b), the board may direct the trust
226	226	company to make disbursements from the fund to another fund or
227	227	account for the support of bonds the proceeds of which are used to
228	228	provide financial assistance in the form of:
229	229	(1) a loan bearing an interest rate of not less than 50
230	230	percent of the then-current market rate of interest available to
231	231	the board;
232	232	(2) a loan to finance a facility under repayment terms
233	233	similar to the terms of debt customarily issued by the entity
234	234	requesting assistance but not to exceed the lesser of:
235	235	(A) the expected useful life of the facility; or
236	236	(B) 30 years;
237	237	(3) a deferral of loan repayment, including deferral
238	238	of the repayment of:
239	239	(A) principal and interest; or
240	240	(B) accrued interest;
241	241	(4) incremental repurchase terms for an acquired
242	242	facility, including terms for no initial repurchase payment
243	243	followed by progressively increasing incremental levels of
244	244	interest payment, repurchase of principal and interest, and
245	245	ultimate repurchase of the entire state interest in the facility
246	246	using simple interest calculations; or
247	247	(5) a combination of the methods of financing
248	248	described by Subdivisions (1)-(4).
249	249	(d) The board may direct the trust company to enter into
250	250	bond enhancement agreements with respect to bonds issued by the
251	251	board before September 1, 2019, only if:
252	252	(1) those bonds otherwise satisfy the requirements of
253	253	Subsections (b) and (c);
254	254	(2) the proceeds of those bonds were or are required to
255	255	be used only for the implementation of Texas Disaster Mitigation,
256	256	Recovery, Response and Infrastructure; and
257	257	(3) economic stabilization funds of the state was
258	258	appropriated before September 1, 2013, for the payment of debt
259	259	service on those bonds.
260	260	(e) The board may direct the trust company to enter into
261	261	bond enhancement agreements with respect to refunding bonds issued
262	262	by the board to refund bonds issued by the board the proceeds of
263	263	which have been or are to be used for projects included in the state
264	264	water plan and which otherwise satisfied the requirements of
265	265	Subsections (b) and (c).
266	266	(f) The board may not direct the trust company to enter into
267	267	a bond enhancement agreement with respect to bonds issued by the
268	268	board the proceeds of which have been or are to be used to make
269	269	grants.
270	270	(g) The board may not direct the trust company to enter into
271	271	a bond enhancement agreement with respect to bonds issued by the
272	272	board the proceeds of which may be used to provide financial
273	273	assistance to an applicant if at the time of the request the
274	274	applicant has failed to (2) satisfactorily complete a request by
275	275	the Texas Disaster Mitigation, Recovery, Response and
276	276	Infrastructure Advisory Committee for information relevant to the
277	277	project for which the financial assistance is sought.
278	278	(h) The board may not direct the trust company to enter into
279	279	a bond enhancement agreement with respect to bonds issued by the
280	280	board the proceeds of which may be used to provide financial
281	281	assistance to an applicant unless at the time of the request the
282	282	applicant has acknowledged its legal obligation to comply with any
283	283	applicable requirements of:
284	284	(1) federal law relating to contracting with
285	285	disadvantaged business enterprises; and
286	286	(2) state law relating to contracting with
287	287	historically underutilized businesses.
288	288	(i) The board may not approve a bond enhancement agreement
289	289	with respect to bonds issued by the board unless the agreement
290	290	contains a provision to the effect that if the trust company makes a
291	291	disbursement under the bond enhancement agreement from the fund to
292	292	the credit of another fund or account as provided by Section
293	293	70.434(a), the board shall direct the comptroller to transfer an
294	294	amount not to exceed that amount from the fund or account receiving
295	295	the payment back to the fund if:
296	296	(1) money is available in the surplus balance in the
297	297	fund or account for that purpose; and
298	298	(2) the money transferred back to the fund will not
299	299	cause general obligation bonds that are payable from the fund or
300	300	account receiving the payment to no longer be self-supporting for
301	301	purposes of Section 2, Article XIV, Texas Constitution.
302	302	(j) For purposes of Subsection (i)(1), the surplus balance
303	303	of a fund or account that receives a disbursement from the fund
304	304	under a bond enhancement agreement is the amount of money on deposit
305	305	in the fund or account, as determined by the board, that is
306	306	attributable to the general obligation bonds or revenue bonds that
307	307	are the subject of the bond enhancement agreement, including money
308	308	received from the sale or other disposition of the board's rights to
309	309	receive repayment of financial assistance, money received from the
310	310	sale, transfer, or lease of an acquired facility, money received
311	311	from the sale of water associated with an acquired facility, and
312	312	related investment earnings, that exceeds the amount required to
313	313	pay annual debt service on the bonds and any other amounts specified
314	314	in the resolution or other proceedings authorizing the bonds and
315	315	any related obligations.
316	316	(k) The board shall submit each bond enhancement agreement
317	317	and the record relating to the agreement to the attorney general for
318	318	examination as to the validity of the agreement. If the attorney
319	319	general finds that the agreement has been made in accordance with
320	320	the constitution and other laws of this state, the attorney general
321	321	shall approve the agreement and the comptroller shall register the
322	322	agreement. If the agreement is not submitted at the same time that
323	323	the bonds to which it relates are submitted, the agreement shall be
324	324	treated as a public security solely for the purposes of Section
325	325	1202.004, Government Code.
326	326	(l) After a bond enhancement agreement has been approved and
327	327	registered as provided by Subsection (k), the agreement is valid
328	328	and is incontestable for any cause.
329	329	(m) At the direction of the board, the trust company shall
330	330	make disbursements from the fund, or from a special account
331	331	established by the board, in accordance with a bond enhancement
332	332	agreement in the amounts the board determines are needed for debt
333	333	service payments on, or for security provisions of, general
334	334	obligation bonds or revenue bonds issued by the board the proceeds
335	335	of the sale of which have been deposited in another fund
336	336	administered by the board, or in an account in that other fund, for
337	337	use in accordance with this subchapter, after the board considers
338	338	all other sources available for those purposes in that other fund or
339	339	account. Money transferred under this subsection may be deposited
340	340	into that other fund or into a special account established by the
341	341	trust company or a corporate trustee that is a trust company or a
342	342	bank that has the powers of a trust company, as determined by the
343	343	board.
344	344	Sec. 70.437. PRIORITIZATION OF PROJECTS BY BOARD. (a) The
345	345	board shall prioritize projects for the purpose of providing
346	346	financial assistance under this subchapter.
347	347	(b) The board shall establish a point system for
348	348	prioritizing projects for which financial assistance is sought from
349	349	the board. The system must include a standard for the board to
350	350	apply in determining whether a project qualifies for financial
351	351	assistance at the time the application for financial assistance is
352	352	filed with the board.
353	353	(c) The board shall give the highest consideration in
354	354	awarding points to projects that will have a substantial effect,
355	355	including projects that will:
356	356	(1) provide assistance to a diverse rural and urban
357	357	population.
358	358	(d) In addition to the criteria provided by Subsection (c),
359	359	the board must also consider at least the following criteria in
360	360	prioritizing projects:
361	361	(1) if the applicant is applying for financial
362	362	assistance for the project, whether the applicant is ready to
363	363	proceed with the project at the time of the application, including
364	364	whether:
365	365	(A) all preliminary planning and design work
366	366	associated with the project has been completed; and
367	367	(B) the applicant has acquired the property
368	368	rights associated with the project; and
369	369	Sec. 15.438. ADVISORY COMMITTEE. (a) The Texas Disaster
370	370	Mitigation, Recovery, Response and Infrastructure Advisory
371	371	Committee is composed of the following seven members:
372	372	(1) the comptroller, or a person designated by the
373	373	comptroller;
374	374	(2) four members of the senate appointed by the
375	375	lieutenant governor, including:
376	376	(A) a member of the committee of the senate
377	377	having primary jurisdiction over matters relating to finance; and
378	378	(B) a member of the committee of the senate
379	379	having primary jurisdiction over intergovernmental relations; and
380	380	(3) four members of the house of representatives
381	381	appointed by the speaker of the house of representatives,
382	382	including:
383	383	(A) a member of the committee of the house of
384	384	representatives having primary jurisdiction over appropriations;
385	385	and
386	386	(B) a member of the committee of the house of
387	387	representatives having primary jurisdiction over county affairs.
388	388	(b) The following persons shall serve as staff support for
389	389	the advisory committee:
390	390	(1) the deputy executive administrator of the board
391	391	who is responsible for water science and conservation or a person
392	392	who holds an equivalent position at the agency, or a person
393	393	designated by that person;
394	394	(2) the deputy executive administrator of the board
395	395	who is responsible for water resources planning and information or
396	396	a person who holds an equivalent position at the agency, or a person
397	397	designated by that person; and
398	398	(3) the chief financial officer of the board, or a
399	399	person who holds an equivalent position at the agency.
400	400	(c) An appointed member of the advisory committee serves at
401	401	the will of the person who appointed the member.
402	402	(d) The lieutenant governor shall appoint a co-presiding
403	403	officer of the advisory committee from among the members appointed
404	404	by the lieutenant governor, and the speaker of the house of
405	405	representatives shall appoint a co-presiding officer of the
406	406	committee from among the members appointed by the speaker.
407	407	(e) The advisory committee may hold public hearings, formal
408	408	meetings, or work sessions. Either co-presiding officer of the
409	409	advisory committee may call a public hearing, formal meeting, or
410	410	work session of the advisory committee at any time. The advisory
411	411	committee may not take formal action at a public hearing, formal
412	412	meeting, or work session unless a quorum of the committee is
413	413	present.
414	414	(f) Except as otherwise provided by this subsection, a
415	415	member of the advisory committee is not entitled to receive
416	416	compensation for service on the committee or reimbursement for
417	417	expenses incurred in the performance of official duties as a member
418	418	of the committee. Service on the advisory committee by a member of
419	419	the senate or house of representatives is considered legislative
420	420	service for which the member is entitled to reimbursement and other
421	421	benefits in the same manner and to the same extent as for other
422	422	legislative service.
423	423	(g) The advisory committee shall submit comments and
424	424	recommendations to the board regarding the use of money in the fund
425	425	for use by the board in adopting rules under Section 70.439 and in
426	426	adopting policies and procedures under Section 70.441. The
427	427	submission must include:
428	428	(1) comments and recommendations on rulemaking
429	429	related to the prioritization of projects in regional water plans
430	430	and the state water plan in accordance with Sections 70.437;
431	431	(2) comments and recommendations on rulemaking
432	432	related to establishing standards for determining whether projects
433	433	meet the criteria provided by Section 70.434(b);
434	434	(3) an evaluation of the available programs for
435	435	providing financing for projects;
436	436	(4) an evaluation of the granting practices of the
437	437	board and guidelines for granting standards;
438	438	(5) an evaluation of the use of funds by the board to
439	439	provide support for financial assistance for Disaster Mitigation,
440	440	Recovery, Response and Infrastructure projects;
441	441	(6) an evaluation of whether premium financing
442	442	programs should be established within the funds described by
443	443	Section XX.435 to serve the purposes of this subchapter, especially
444	444	in connection with projects described by Section 70.434(b);
445	445	(7) an evaluation of methods for encouraging
446	446	participation in the procurement process by companies domiciled in
447	447	this state or that employ a significant number of residents of this
448	448	state; and
449	449	(8) an evaluation of the overall operation, function,
450	450	and structure of the fund.
451	451	(h) The advisory committee shall review the overall
452	452	operation, function, and structure of the fund at least
453	453	semiannually and may provide comments and recommendations to the
454	454	board on any matter.
455	455	(i) The advisory committee may adopt rules, procedures, and
456	456	policies as needed to administer this section and implement its
457	457	responsibilities.
458	458	(j) Chapter 2110, Government Code, does not apply to the
459	459	size, composition, or duration of the advisory committee.
460	460	(k) The advisory committee is subject to Chapter 325,
461	461	Government Code (Texas Sunset Act). Unless continued in existence
462	462	as provided by that chapter, the advisory committee is abolished
463	463	and this section expires September 1, 2023.
464	464	(l) The advisory committee shall make recommendations to
465	465	the board regarding information to be posted on the board's
466	466	Internet website under Section 70.440(b).
467	467	(m) The advisory committee shall evaluate and may provide
468	468	comments or recommendations on the feasibility of the state owning,
469	469	constructing, and operating water supply projects, including
470	470	reservoirs and major water supply conveyance infrastructure,
471	471	through existing financial assistance programs under Subchapter A
472	472	of this chapter.
473	473	(n) The executive administrator shall provide an annual
474	474	report to the advisory committee on:
475	475	(1) the board's compliance with statewide annual goals
476	476	relating to historically underutilized businesses; and
477	477	(2) the participation level of historically
478	478	underutilized businesses in projects that receive funding related
479	479	to a bond enhancement agreement under this subchapter.
480	480	(o) If the aggregate level of participation by historically
481	481	underutilized businesses in projects that receive funding related
482	482	to a bond enhancement agreement under this subchapter does not meet
483	483	statewide annual goals adopted under Chapter 2161, Government Code,
484	484	the advisory committee shall make recommendations to the board to
485	485	improve the participation level.
486	486	Sec. 70.439. RULES. (a) The board shall adopt rules
487	487	providing for the use of money in the fund that are consistent with
488	488	this subchapter, including rules:
489	489	(1) establishing standards for determining whether
490	490	projects meet the criteria provided by Section 70.434(b); and
491	491	(2) specifying the manner for prioritizing projects
492	492	for purposes of Section 70.437.
493	493	(b) The board shall give full consideration to the
494	494	recommendations of the advisory committee before adopting rules
495	495	under this subchapter.
496	496	Sec. 70.440. REPORTING AND TRANSPARENCY REQUIREMENTS. (a)
497	497	Not later than December 1 of each even-numbered year, the board
498	498	shall provide a report to the governor, lieutenant governor,
499	499	speaker of the house of representatives, and members of the
500	500	legislature regarding the use of the fund.
501	501	(b) The board shall post information on the board's Internet
502	502	website regarding the use of the fund and regularly update the
503	503	information posted.
504	504	Sec. 15.441. POLICIES AND PROCEDURES TO MITIGATE OR
505	505	MINIMIZE ADVERSE EFFECTS OF CERTAIN FEDERAL LAWS. The board shall
506	506	adopt, and may amend from time to time at the board's discretion,
507	507	policies and procedures for the purpose of mitigating or minimizing
508	508	the adverse effects, if any, of federal laws and regulations
509	509	relating to income taxes, arbitrage, rebates, and related matters
510	510	that may restrict the board's ability to freely invest all or part
511	511	of the fund or to receive and retain all the earnings from the fund.
512	512	SUBCHAPTER H. TEXAS DISASTER MITIGATION, RECOVERY, RESPONSE AND
513	513	INFRASTRUCTURE FUND
514	514	Sec. 15.471. DEFINITION. In this subchapter, "fund" means
515	515	the Texas Disaster Mitigation, Recovery, Response and
516	516	Infrastructure Fund.
517	517	Sec. 15.472. FUND. (a) Texas Disaster Mitigation,
518	518	Recovery, Response and Infrastructure Fund is a special fund in the
519	519	state treasury outside the general revenue fund to be used by the
520	520	board, without further legislative appropriation, only for the
521	521	purpose of providing financing for projects under subchapter J.
522	522	The board may establish separate accounts in the fund. The board
523	523	has legal title to money and investments in the fund until the money
524	524	is disbursed as provided by this subchapter and board rules. It is
525	525	the intent of the legislature that the fund will never be used:
526	526	(1) for a purpose other than the support of projects in
527	527	subchapter A; or
528	528	(2) to certify that appropriations from the treasury
529	529	are within the amount estimated to be available in a fund of the
530	530	treasury affected by the appropriation.
531	531	(b) Money deposited to the credit of the fund may be used
532	532	only as provided by this subchapter.
533	533	(c) The fund consists of:
534	534	(1) money transferred or deposited to the credit of
535	535	the fund by law, including money from any source transferred or
536	536	deposited to the credit of the fund at the board's discretion as
537	537	authorized by law;
538	538	(2) the proceeds of any fee or tax imposed by this
539	539	state that by statute is dedicated for deposit to the credit of the
540	540	fund;
541	541	(3) any other revenue that the legislature by statute
542	542	dedicates for deposit to the credit of the fund;
543	543	(4) investment earnings and interest earned on amounts
544	544	credited to the fund;
545	545	(5) the proceeds from the sale of bonds, including
546	546	revenue bonds issued by the board under this subchapter, that are
547	547	designated by the board for the purpose of providing money for the
548	548	fund;
549	549	(6) repayments of loans made from the fund; and
550	550	(7) money from the sale, transfer, or lease of a
551	551	project acquired, constructed, reconstructed, developed, or
552	552	enlarged with money from the fund.
553	553	Sec. 15.473. MANAGEMENT AND INVESTMENT OF FUND. (a) Money
554	554	deposited to the credit of the fund shall be invested as determined
555	555	by the board. The fund may be invested with the state treasury
556	556	pool.
557	557	(b) The fund and any accounts established in the fund shall
558	558	be kept and maintained by or at the direction of the board.
559	559	(c) At the direction of the board, the fund and any accounts
560	560	established in the fund may be managed by the comptroller or a
561	561	corporate trustee that is a trust company or a bank that has the
562	562	powers of a trust company for and on behalf of the board and pending
563	563	their use for the purposes provided by this subchapter may be
564	564	invested as provided by an order, resolution, or rule of the board.
565	565	(d) The comptroller or corporate trustee shall manage the
566	566	fund in strict accordance with this subchapter and the orders,
567	567	resolutions, and rules of the board.
568	568	Sec. 15.474. USE OF FUND. (a) Except as provided by
569	569	Subsection (c), money in the fund may be used by the board only to
570	570	provide financing or refinancing, under terms specified by the
571	571	board, for projects included in Subchapter A.
572	572	(b) Financing or refinancing of projects described by
573	573	Subsection (a) may be provided by using money in the fund to make
574	574	loans to eligible political subdivisions and the state or to
575	575	purchase bonds or other obligations of eligible political
576	576	subdivisions and the state bearing interest at a rate or rates
577	577	determined by the board, including a rate or rates below prevailing
578	578	market rates.
579	579	(c) The board may use money in the fund:
580	580	(1) as a source of revenue or security for:
581	581	(A) the payment of the principal of and interest
582	582	on:
583	583	(i) revenue bonds issued by the board under
584	584	this subchapter; or
585	585	(ii) other bonds issued by the board if the
586	586	proceeds of the bonds will be deposited in the fund; or
587	587	(B) a bond enhancement agreement;
588	588	(2) to acquire loans or other assets from another fund
589	589	or account administered by the board.
590	590	(3) to pay the necessary and reasonable expenses of
591	591	paying agents, bond counsel, and financial advisory services and
592	592	similar costs incurred by the board in administering the fund.
593	593	(d) The board, or comptroller or corporate trustee managing
594	594	the fund at the direction of the board as provided by Section
595	595	70.473(c), shall withdraw from the fund and forward to another
596	596	person any amounts, as determined by the board, for timely payment
597	597	of:
598	598	(1) the principal of and interest on bonds described
599	599	by Subsection (c) (1)(A) of this section that mature or become due;
600	600	and
601	601	(2) any cost related to bonds described by Subsection
602	602	(c)(1)(A) of this section that become due, including payments under
603	603	related credit agreements or bond enhancement agreements.
604	604	Sec. 70.476. SUBCHAPTER CUMULATIVE OF OTHER LAWS. (a) This
605	605	subchapter is cumulative of other laws on the subject, and the board
606	606	may use provisions of other applicable laws in the issuance of bonds
607	607	and other obligations and the execution of bond enhancement
608	608	agreements, but this subchapter is wholly sufficient authority for
609	609	the issuance of bonds and other obligations, the execution of bond
610	610	enhancement agreements, and the performance of all other acts and
611	611	procedures authorized by this subchapter.
612	612	(b) In addition to other authority granted by this
613	613	subchapter, the board may exercise the authority granted to the
614	614	governing body of an issuer with regard to the issuance of
615	615	obligations under Chapter 1371, Government Code.
616	616	SECTION 3. As soon as practicable after the effective date
617	617	of this Act, the lieutenant governor and the speaker of the house of
618	618	representatives shall appoint the initial appointive members of the
619	619	Texas Disaster Mitigation, Recovery, Response and Infrastructure
620	620	Advisory Committee as provided by Section 70.438, Water Code, as
621	621	added by this Act.
622	622	SECTION 4. (a) Not later than September 1, 2014, the Texas
623	623	Disaster Mitigation, Recovery, Response and Infrastructure
624	624	Advisory Committee shall submit recommendations to the Texas Water
625	625	Development Board on the rules to be adopted by the board under
626	626	Sections 70.439(a)(1) and (2), Water Code, as added by this Act.
627	627	(b) Not later than the later of the 90th day after the date
628	628	the Texas Water Development Board receives the recommendations
629	629	described by Subsection (a) of this section or March 1, 2021, the
630	630	board shall adopt rules under Section 70.439, Water Code, as added
631	631	by this Act.
632	632	SECTION 5. The Texas Water Development Board shall post the
633	633	information described by Section 70.440(b), Water Code, as added by
634	634	this Act, on the board's Internet website not later than March 1,
635	635	2020.
636	636	SECTION 6. Sections 1 and 2 of this article take effect on
637	637	the date on which the constitutional amendment proposed by the 86th
638	638	Legislature, Regular Session, 2019, adding Sections 2, Article XIV,
639	639	Texas Constitution, creating the Texas Disaster Mitigation,
640	640	Recovery, Response and Infrastructure Fund. If that amendment is
641	641	not approved by the voters, those sections of this article have no
642	642	effect.
643	643	SECTION 7. Except as otherwise provided by this Act, this
644	644	Act takes effect September 1, 2019.