S.B. No. 2452
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. 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 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 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 service to any area that is not an economically
distressed area.
SECTION 2. 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 may:
(1) maximize the effectiveness of the additional
general obligation bonds authorized by Section 49-d-14, 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 and sewer services; and
(2) use the additional general obligation bonds
authorized by Section 49-d-14, 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 and sewer services; and
(C) will reduce reliance on the issuance of bonds
supported with general revenue.
SECTION 3. Sections 17.927(b) and (c), Water Code, are
amended to read as follows:
(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
services that meet minimum state standards provided by board rules;
and
(B) identify the households to which the water
supply and sewer services will be provided;
(4) a budget that estimates the total cost of
providing water supply and sewer 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 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 4. 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:
(1) 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; or
(2) for which the applicant:
(A) is subject to an enforcement action,
including a final order, judgment, or consent decree, by the
commission, the state, or the United States Environmental
Protection Agency, related to public health and safety issues
resulting from water supply or sewer services; and
(B) did not cause or allow the violations that
are the subject of the enforcement action.
(d) The board by rule may provide for the consideration of
additional criteria.
SECTION 5. Section 17.928(c), Water Code, is amended to
read as follows:
(c) If an applicant includes a proposal for treatment
works[,] the board may not deliver funds for the treatment works
until the applicant has received:
(1) a permit for construction and operation of the
treatment 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 6. 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 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 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
service and the feasibility of financing the facility by using
funds from the economically distressed areas account or any other
financial assistance; and
(6) the ability of the applicant to repay the
financial assistance.
SECTION 7. 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 8. Sections 17.933(a), (b), (c), 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) and the political subdivision's
ability to repay the financial assistance.
(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.
(c) The total amount of financial assistance provided by the
board to political subdivisions under this subchapter from
state-issued bonds for which repayment is not required may not
exceed at any time 70 [90] percent of the total principal amount of
issued and unissued bonds authorized under Article III of the Texas
Constitution, for purposes of this subchapter plus outstanding
interest on those bonds.
(d) In determining the amount and form of financial
assistance and the amount and form of repayment, if any, the board
shall establish repayment based on the political subdivision's
ability to repay the financial assistance and 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 service as provided in this code; and
(5) the ability of the board to maximize the portion of
financial assistance for which repayment is required based on the
political subdivision's ability to repay the assistance, as
provided by board rule.
SECTION 9. 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 10. Section 17.933(b-1), Water Code, is repealed.
SECTION 11. The Texas Water Development Board is required
to implement a provision of this Act only if the legislature
appropriates money specifically for that purpose. If the
legislature does not appropriate money specifically for that
purpose, the board may, but is not required to, implement a
provision of this Act using other appropriations available for that
purpose.
SECTION 12. 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 $200 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.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 2452 passed the Senate on
May 8, 2019, by the following vote: Yeas 21, Nays 10; and that the
Senate concurred in House amendment on May 25, 2019, by the
following vote: Yeas 22, Nays 8.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 2452 passed the House, with
amendment, on May 22, 2019, by the following vote: Yeas 103,
Nays 41, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor