86R3576 JAM-F
By: Lucio, Hinojosa, Perry S.B. No. 2452
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 board shall use
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 solely for projects
intended to serve economically distressed areas [to political
subdivisions].
(b) To the extent practicable, the board shall use money
[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
political subdivisions [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), (b), and (c), 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 provided by board rules; 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 and enforces 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.
(c) Before the board approves the application or provides
any funds under an application, it shall require an applicant to
adopt a program of water conservation for the more effective use of
water that meets the criteria established under Section 17.125 for
water supply projects or under Section 17.277 for water quality
enhancement projects.
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 board or the Department of
State Health Services has determined 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
as determined by the board;
(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.
(e) The board by rule may provide for the consideration of
additional criteria.
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:
(1) a permit for construction and operation of the
treatment or residential drainage works from the commission or
other applicable permitting authority unless such a permit is not
required; and
(2) approval of the plans and specifications from the
commission, the executive administrator, or other applicable
authority [or unless such a permit is not required by the
commission].
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. Section 17.931, Water Code, is amended to read as
follows:
Sec. 17.931. APPLICATION AMENDMENT. (a) A political
subdivision may request the executive administrator [board] in
writing to approve a change to or a modification of the budget or
project plan included in its application if the change or
modification does not increase the budget or change the project
scope.
(b) A change or modification requested under Subsection (a)
may not be implemented unless the executive administrator [board]
provides [its] written approval.
SECTION 10. Sections 17.933(a), (b), and (d), Water Code,
are amended to read as follows:
(a) The board may use money in the economically distressed
areas account to provide financial assistance to a political
subdivision in the form of a loan, [including] a loan with zero
interest, a grant, or other type of financial assistance to be
determined by the board taking into consideration the information
provided by Section 17.927(b)(7).
(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 board or the [Texas] Department of State Health Services
determines [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 may provide the repayable portion of financial
assistance from any financial assistance program for which the
applicant is eligible. The [board and the] applicant shall provide
to the board or 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 11. 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 12. 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)
Annually, the board shall 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;
(5) a statement of whether each project has been
completed and, if not, the expected completion date;
(6) the date on which each appropriate political
subdivision adopted the model rules developed under Section 16.343;
and
(7) the date on which each appropriate political
subdivision certified that it enforces the applicable model rules
developed under Section 16.343 or a description of measures taken
to mitigate any deficiencies in compliance.
SECTION 13. Section 17.933(b-1), Water Code, is repealed.
SECTION 14. This Act takes effect on the date on which the
constitutional amendment proposed by the 86th Legislature, Regular
Session, 2019, providing for the issuance of additional general
obligation bonds by the Texas Water Development Board in an amount
not to exceed $400 million 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.