S.B. No. 7
AN ACT
relating to flood planning, mitigation, and infrastructure
projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. FLOOD CONTROL PLANNING
SECTION 1.01. The heading to Section 15.405, Water Code, is
amended to read as follows:
Sec. 15.405. FLOOD CONTROL PLANNING CONTRACTS.
SECTION 1.02. Section 15.405, Water Code, is amended by
amending Subsections (a), (f), and (g) and adding Subsection (a-1)
to read as follows:
(a) In this section, "flood control planning" means any work
related to:
(1) planning for flood protection;
(2) preparing applications for and obtaining
regulatory approvals at the local, state, or federal level;
(3) activities associated with administrative or
legal proceedings by regulatory agencies; and
(4) preparing engineering plans and specifications to
provide structural or nonstructural flood mitigation and drainage.
(a-1) The board may enter into contracts with political
subdivisions to pay from the research and planning fund all or part
of the cost of [developing] flood control planning [plans] for the
political subdivision.
(f) The board shall adopt rules establishing criteria of
eligibility for flood control planning money that considers:
(1) the relative need of the political subdivision for
the money, giving greater importance to a county that has a median
household income that is not greater than 85 percent of the median
state household income;
(2) the legal authority of the political subdivision
to plan for and control flooding; and
(3) the effect of flood control planning by the
political subdivision on overall flood control in the state and
within the area in which the political subdivision is located.
(g) The board shall require that flood control planning
documents [plans] developed under contracts entered into under this
section be made available to the commission.
ARTICLE 2. FLOOD INFRASTRUCTURE FUND
SECTION 2.01. Chapter 15, Water Code, is amended by adding
Subchapter I to read as follows:
SUBCHAPTER I. FLOOD INFRASTRUCTURE FUND
Sec. 15.531. DEFINITIONS. In this subchapter:
(1) "Eligible political subdivision" means a district
or authority created under Section 52, Article III, or Section 59,
Article XVI, Texas Constitution, a municipality, or a county.
(2) "Flood project" means a drainage, flood
mitigation, or flood control project, including:
(A) planning and design activities;
(B) work to obtain regulatory approval to provide
nonstructural and structural flood mitigation and drainage;
(C) construction of structural flood mitigation
and drainage infrastructure; and
(D) construction and implementation of
nonstructural projects, including projects that use nature-based
features to protect, mitigate, or reduce flood risk.
(3) "Infrastructure fund" means the flood
infrastructure fund.
(4) "Metropolitan statistical area" means an area so
designated by the United States Office of Management and Budget.
Sec. 15.532. FINDINGS. The legislature finds that:
(1) the creation of the infrastructure fund and the
administration of the fund by the board will encourage the
development of nonstructural and structural flood mitigation in the
state;
(2) the use of the infrastructure fund is in
furtherance of the public purpose of mitigating the effects of
flooding in the state; and
(3) the use of the infrastructure fund for the
purposes provided by this subchapter is for the benefit of both the
state and the political subdivisions to which the board makes
financial assistance available in accordance with this subchapter
and constitutes a program under Sections 49-d-3 and 52-a, Article
III, Texas Constitution.
Sec. 15.533. FLOOD INFRASTRUCTURE FUND. (a) The flood
infrastructure fund is a special fund in the state treasury outside
the general revenue fund.
(b) The infrastructure fund may be used by the board,
without further legislative appropriation, only as provided by this
subchapter.
(c) The infrastructure fund consists of:
(1) appropriations from the legislature for a purpose
of the infrastructure fund;
(2) proceeds of general obligation bonds issued for a
purpose of the infrastructure fund;
(3) any fees or other sources of revenue that the
legislature dedicates for deposit to the infrastructure fund;
(4) repayments of loans made from the infrastructure
fund;
(5) interest earned on money credited to the
infrastructure fund;
(6) depository interest allocable to the
infrastructure fund;
(7) money from gifts, grants, or donations to the
infrastructure fund; and
(8) money from revenue bonds or other sources
designated by the board for deposit to the infrastructure fund.
Sec. 15.534. USE OF INFRASTRUCTURE FUND. (a) The board
may use the infrastructure fund only:
(1) to make a loan to an eligible political
subdivision at or below market interest rates for a flood project;
(2) to make a grant or loan at or below market interest
rates to an eligible political subdivision for a flood project to
serve an area outside of a metropolitan statistical area in order to
ensure that the flood project is implemented;
(3) to make a loan at or below market interest rates
for planning and design costs, permitting costs, and other costs
associated with state or federal regulatory activities with respect
to a flood project;
(4) to make a grant to an eligible political
subdivision to provide matching funds to enable the eligible
political subdivision to participate in a federal program for a
flood project;
(5) to make a grant to an eligible political
subdivision for a flood project if the board determines that the
eligible political subdivision does not have the ability to repay a
loan;
(6) as a source of revenue or security for the payment
of principal and interest on bonds issued by the board if the
proceeds of the sale of the bonds will be deposited in the
infrastructure fund;
(7) to pay the necessary and reasonable expenses of
the board in administering the infrastructure fund; and
(8) to make transfers to the research and planning
fund created under Section 15.402 of this chapter.
(b) Principal and interest payments on loans made under
Subsection (a)(3) may be deferred for not more than 10 years or
until construction of the flood project is completed, whichever is
earlier.
Sec. 15.535. APPLICATION REQUIREMENTS. (a) Except as
provided by Subsection (c), an eligible political subdivision
applying for financial assistance under this subchapter for a
proposed flood project must demonstrate in the application that:
(1) the eligible political subdivision has acted
cooperatively with other political subdivisions to address flood
control needs in the area in which the eligible political
subdivisions are located;
(2) all eligible political subdivisions substantially
affected by the proposed flood project have participated in the
process of developing the proposed flood project;
(3) the eligible political subdivisions, separately
or in cooperation, have held public meetings to accept comment on
proposed flood projects from interested parties; and
(4) the technical requirements for the proposed flood
project have been completed and compared against any other
potential flood projects in the same area.
(b) The application must include an analysis of whether the
proposed flood project could use floodwater capture techniques for
water supply purposes, including floodwater harvesting, detention
or retention basins, or other methods of capturing storm flow or
unappropriated flood flow.
(c) An eligible political subdivision applying for
assistance under Section 15.534(a)(3) is not required to make the
demonstration described by Subsection (a)(4) of this section.
Sec. 15.536. APPROVAL OF APPLICATIONS. On review and
recommendation by the executive administrator, the board may
approve an application only if the board finds that:
(1) the application and the assistance applied for
meet the requirements of this subchapter and board rules;
(2) the application demonstrates a sufficient level of
cooperation among eligible political subdivisions and includes all
of the eligible political subdivisions substantially affected by
the flood project; and
(3) the taxes or other revenue, or both the taxes and
other revenue, pledged by the applicant will be sufficient to meet
all the obligations assumed by the eligible political subdivision.
Sec. 15.537. RULES. The board shall adopt rules necessary
to carry out this subchapter, including rules:
(1) that establish procedures for an application for
and for the award of financial assistance;
(2) for the investment of money; and
(3) for the administration of the infrastructure fund.
Sec. 15.538. INFORMATION CLEARINGHOUSE. The board shall
act as a clearinghouse for information about state and federal
flood planning, mitigation, and control programs that may serve as
a source of funding for flood projects.
Sec. 15.539. LIABILITY. Participation in cooperative flood
planning to obtain money under this subchapter does not subject the
state or an eligible political subdivision to civil liability in
regard to a flood project.
Sec. 15.540. ADVISORY COMMITTEE. (a) In this section,
"advisory committee" means the State Water Implementation Fund for
Texas Advisory Committee described by Section 15.438.
(b) The advisory committee shall:
(1) review the overall operation, function, and
structure of the infrastructure fund at least semiannually and may
provide comments and recommendations to the board on any matter;
and
(2) make recommendations to the board regarding
information on the infrastructure fund to be posted on the board's
Internet website.
(c) The advisory committee may:
(1) submit comments and recommendations to the board
regarding the use of money in the infrastructure fund and for use by
the board in adopting rules; and
(2) adopt rules, procedures, and policies as needed to
administer this section and implement its responsibilities.
SECTION 2.02. Subchapter H, Chapter 49, Water Code, is
amended by adding Section 49.239 to read as follows:
Sec. 49.239. COOPERATIVE FLOOD CONTROL. A district,
including a river authority, may participate in cooperative flood
control planning for the purpose of obtaining financial assistance
as an eligible political subdivision for a flood control project
under Subchapter I, Chapter 15.
SECTION 2.03. Contingent on legislation of the 86th
Legislature, Regular Session, 2019, that requires the creation of a
state flood plan passing and becoming law, on the date that the
Texas Water Development Board adopts the initial state flood plan
in accordance with that law:
(1) Section 15.534, Water Code, as added by this Act,
expires; and
(2) Subchapter I, Chapter 15, Water Code, is amended
by adding Section 15.5341 to read as follows:
Sec. 15.5341. USE OF INFRASTRUCTURE FUND. (a) The board
may use the infrastructure fund only to provide financing for flood
projects included in the state flood plan.
(b) Money from the infrastructure fund may be awarded to
several eligible political subdivisions for a single flood project.
ARTICLE 3. TEXAS INFRASTRUCTURE RESILIENCY FUND
SECTION 3.01. Chapter 16, Water Code, is amended by adding
Subchapter L to read as follows:
SUBCHAPTER L. FLOOD PROJECT FUNDING
Sec. 16.451. DEFINITIONS. In this subchapter:
(1) "Advisory committee" means the Texas
Infrastructure Resiliency Fund Advisory Committee.
(2) "Eligible political subdivision" means a district
or authority created under Section 52, Article III, or Section 59,
Article XVI, Texas Constitution, a municipality, or a county.
(3) "Flood project" means a drainage, flood
mitigation, or flood control project, including:
(A) planning and design activities;
(B) work to obtain regulatory approval to provide
structural and nonstructural flood mitigation and drainage;
(C) construction of structural flood mitigation
and drainage infrastructure;
(D) nonstructural or natural flood control
strategies; and
(E) a federally authorized project to deepen a
ship channel affected by a flooding event.
(4) "Resiliency fund" means the Texas infrastructure
resiliency fund.
Sec. 16.452. TEXAS INFRASTRUCTURE RESILIENCY FUND.
(a) The Texas infrastructure resiliency fund is a special fund in
the state treasury outside the general revenue fund.
(b) The resiliency fund shall be administered by the board
in accordance with this subchapter.
(c) The board may invest, reinvest, and direct the
investment of any available money in the resiliency fund as
provided by law for the investment of public funds.
(d) Investment earnings, interest earned on amounts
credited to the resiliency fund, and interest earned on loans made
from the fund shall be deposited to the credit of the fund.
Sec. 16.453. FLOODPLAIN MANAGEMENT ACCOUNT. (a) The
floodplain management account is an account of the resiliency fund.
(b) The account consists of:
(1) money deposited to the credit of the account under
Section 251.004, Insurance Code;
(2) money directly appropriated to the board; and
(3) money from gifts or grants from the United States
government, local or regional governments, private sources, or
other sources.
(c) The board may use the account to provide financing for
activities related to:
(1) the collection and analysis of flood-related
information;
(2) flood planning, protection, mitigation, or
adaptation;
(3) the provision of flood-related information to the
public through educational or outreach programs; or
(4) evaluating the response to and mitigation of flood
incidents affecting residential property, including multifamily
units, located in floodplains.
Sec. 16.454. HURRICANE HARVEY ACCOUNT. (a) The Hurricane
Harvey account is an account in the resiliency fund.
(b) The board may use the account only to provide moneys to
the Texas Division of Emergency Management for the division to
provide financing for projects related to Hurricane Harvey.
Financing under this section includes making a:
(1) grant to an eligible political subdivision to
provide nonfederal matching funds to enable the subdivision to
participate in a federal program for the participation in or
development of:
(A) a hazard mitigation project, under
guidelines issued by the Federal Emergency Management Agency or the
Texas Division of Emergency Management or the successor in function
to those entities;
(B) a public assistance project, under
guidelines issued by the Federal Emergency Management Agency or the
Texas Division of Emergency Management or the successor in function
to those entities; or
(C) assistance under guidelines issued by the
Natural Resources Conservation Service, the United States Economic
Development Administration, or the United States Department of
Housing and Urban Development, or the successor in function to
those entities; and
(2) loan to an eligible political subdivision at or
below market interest rates for the political subdivision's
planning or design costs, permitting costs, construction costs, or
other costs associated with state or federal regulatory activities
with respect to a flood project.
(c) A grant or loan awarded under this section may not
provide more than 75 percent of the portion of the cost of the
project that is paid with money other than money from a federal
program.
(d) In collaboration with the Texas Division of Emergency
Management, the board shall establish a point system for
prioritizing flood projects other than public assistance grants for
which money from the Hurricane Harvey account is sought. The system
must include a standard for the board to apply in determining
whether a flood project qualifies for funding at the time the
application for funding is filed with the board.
(e) The Texas Division of Emergency Management shall give
the highest consideration in awarding points to a flood project
that will have a substantial effect, including a flood project
that:
(1) is recommended or approved by the director of the
Texas Division of Emergency Management or the successor in function
to that entity; and
(2) meets an emergency need in a county where the
governor has declared a state of disaster.
(f) After review and recommendation by the executive
administrator and with input from the director of the Texas
Division of Emergency Management or the successor in function to
that entity, the Texas Division of Emergency Management may approve
an application for financial assistance under this section only if
the Texas Division of Emergency Management finds that:
(1) the application and assistance applied for meet
the requirements of this subchapter and Texas Division of Emergency
Management rules;
(2) the application demonstrates a sufficient level of
cooperation among applicable political subdivisions and includes
all of the political subdivisions substantially affected by the
flood project; and
(3) the taxes or other revenue, or both the taxes and
other revenue, pledged by the applicant, if applicable, will be
sufficient to meet all the obligations assumed by the applicant.
(g) Principal and interest payments on loans made under
Subsection (b)(2) may be deferred for not more than 10 years or
until construction of the flood project is completed, whichever is
the shorter period.
(h) Money from the account may be awarded to several
eligible political subdivisions for a single flood project.
(i) An eligible political subdivision that receives a grant
for a flood project also may receive a loan from the account.
(j) This section expires September 1, 2031. The remaining
balance of the account on that date is transferred to the flood plan
implementation account.
Sec. 16.455. FEDERAL MATCHING ACCOUNT. (a) The federal
matching account is an account in the resiliency fund.
(b) The board may use the account only to meet matching
requirements for projects funded partially by federal money,
including projects funded by the United States Army Corps of
Engineers.
(c) The board may use the account to make a loan to an
eligible political subdivision below market interest rates and
under flexible repayment terms, including a line of credit or loan
obligation with early prepayment terms, to provide financing for
the local share of a federally authorized ship channel improvement
project.
Sec. 16.456. TEXAS INFRASTRUCTURE RESILIENCY FUND ADVISORY
COMMITTEE. (a) The Texas Infrastructure Resiliency Fund Advisory
Committee is composed of the seven members that serve on the State
Water Implementation Fund for Texas Advisory Committee described by
Section 15.438, with the co-presiding officers of that committee
serving as presiding officers of the advisory committee. The
director of the Texas Division of Emergency Management or the
successor in function to that entity serves as a nonvoting member of
the advisory committee, as an additional duty of the director's
office.
(b) The advisory committee may hold public hearings, formal
meetings, or work sessions. Either co-presiding officer of the
advisory committee may call a public hearing, formal meeting, or
work session of the advisory committee at any time. The advisory
committee may not take formal action at a public hearing, formal
meeting, or work session unless a quorum of the committee is
present.
(c) Except as otherwise provided by this subsection, a
member of the advisory committee is not entitled to receive
compensation for service on the committee or reimbursement for
expenses incurred in the performance of official duties as a member
of the committee. Service on the advisory committee by a member of
the senate or house of representatives is considered legislative
service for which the member is entitled to reimbursement and other
benefits in the same manner and to the same extent as for other
legislative service.
(d) The advisory committee may submit comments and
recommendations to the board regarding the use of money in the
resiliency fund and for use by the board in adopting rules.
(e) The advisory committee shall review the overall
operation, function, and structure of the resiliency fund at least
semiannually and may provide comments and recommendations to the
board on any matter.
(f) The advisory committee may adopt rules, procedures, and
policies as needed to administer this section and implement its
responsibilities.
(g) The advisory committee shall make recommendations to
the board regarding information on the resiliency fund to be posted
on the board's Internet website.
(h) The advisory committee may evaluate and may provide
comments or recommendations on the feasibility of the state owning,
constructing, operating, and maintaining flood projects, including
reservoirs and coastal barriers.
(i) The board shall provide an annual report to the advisory
committee on:
(1) the board's compliance with statewide annual goals
relating to historically underutilized businesses; and
(2) the participation level of historically
underutilized businesses in flood projects that receive money from
the resiliency fund.
(j) If the aggregate level of participation by historically
underutilized businesses in flood projects that receive money from
the resiliency fund does not meet statewide annual goals adopted
under Chapter 2161, Government Code, the advisory committee shall
make recommendations to the board to improve the participation
level.
(k) The board shall supply staff support to the advisory
committee.
(l) Chapter 2110, Government Code, does not apply to the
size, composition, or duration of the advisory committee.
Sec. 16.457. REPORT REQUIRED. (a) In this section, "state
agency" means:
(1) a department, commission, board, office, or other
agency in the executive branch of state government created by the
state constitution or a state statute; and
(2) a general academic teaching institution as defined
by Section 61.003, Education Code.
(b) A state agency that uses or disburses federal money for
flood research, planning, or mitigation projects shall submit a
report to the board on a quarterly basis.
(c) The report must include the following information about
federal money used or disbursed for flood research, planning, or
mitigation projects:
(1) the original total of federal money received;
(2) the amount of the federal money spent or disbursed
to date; and
(3) the eligibility requirements for receiving the
federal money.
Sec. 16.458. APPLICABLE LAW. Subchapter E, Chapter 17,
applies to financial assistance made available from the resiliency
fund, except that the board may execute contracts as necessary to
evidence grant agreements.
Sec. 16.459. TRANSPARENCY REQUIREMENTS. The board shall
post the following information on the board's Internet website
regarding the use of the resiliency fund and regularly update the
information posted:
(1) the progress made in developing flood projects
statewide;
(2) a description of each flood project that receives
money from the resiliency fund, including:
(A) the expected date of completion of the flood
project;
(B) the current status of the flood project;
(C) the proposed benefit of the flood project;
(D) the initial total cost estimate of the flood
project and variances to the initial cost estimate exceeding five
percent;
(E) a listing of the eligible political
subdivisions receiving money from the resiliency fund;
(F) a listing of each political subdivision
served by each flood project;
(G) an estimate of matching funds that will be
available for the flood project resulting from the use of the
resiliency fund; and
(H) the status of repayment of each loan provided
in connection with a flood project, including an assessment of the
risk of default based on a standard risk rating system;
(3) a description of the point system for prioritizing
flood projects and the number of points awarded by the board for
each flood project;
(4) any nonconfidential information submitted to the
board as part of an application for funding under this subchapter
that is approved by the board;
(5) the administrative and operating expenses
incurred by the board in administering the resiliency fund; and
(6) any other information required by board rule.
Sec. 16.460. RULES. The board shall adopt rules necessary
to carry out this subchapter, including rules:
(1) that establish procedures for an application for
and for the award of financial assistance;
(2) that establish the prioritization system for flood
projects that receive money from the resiliency fund;
(3) for the repayment of a loan from the resiliency
fund; and
(4) for the administration of the resiliency fund.
SECTION 3.02. Section 251.004(b), Insurance Code, is
amended to read as follows:
(b) Each state fiscal year, the comptroller shall
reallocate to the floodplain management account established under
Section 16.453 [16.3161], Water Code, the first $3.05 million of
the maintenance taxes collected under Chapter 252 and deposited in
the general revenue fund.
SECTION 3.03. Section 16.3161, Water Code, is repealed.
SECTION 3.04. On the effective date of this Act, the
Floodplain Management Account No. 0330 is transferred to the Texas
infrastructure resiliency fund as an account of that fund and the
balance of the Floodplain Management Account No. 0330 is
transferred to the floodplain management account of the Texas
infrastructure resiliency fund.
SECTION 3.05. (a) Not later than the 90th day after the
effective date of this Act, the Texas Infrastructure Resiliency
Fund Advisory Committee shall submit recommendations to the Texas
Water Development Board on the rules to be adopted by the board
under Section 16.460, Water Code, as added by this Act.
(b) Not later than the 90th day after the date the Texas
Water Development Board receives the recommendations described by
Subsection (a) of this section, the board shall adopt rules under
Section 16.460, Water Code, as added by this Act.
SECTION 3.06. Contingent on legislation of the 86th
Legislature, Regular Session, 2019, that requires the creation of a
state flood plan passing and becoming law, on the date that the
Texas Water Development Board adopts the initial state flood plan
in accordance with that law, Subchapter L, Chapter 16, Water Code,
as added by this Act, is amended by adding Section 16.4545 to read
as follows:
Sec. 16.4545. FLOOD PLAN IMPLEMENTATION ACCOUNT. (a) The
flood plan implementation account is an account in the resiliency
fund.
(b) The board may use the account only to provide financing
for projects included in the state flood plan.
(c) Money from the account may be awarded to several
eligible political subdivisions for a single flood project.
ARTICLE 4. REVENUE BONDS
SECTION 4.01. Section 17.852(5), Water Code, is amended to
read as follows:
(5) "Project" includes water supply projects,
treatment works, and flood [control] projects, as defined by
Section 15.531 or 16.451.
SECTION 4.02. Section 17.853(c), Water Code, is amended to
read as follows:
(c) The board may use the fund only:
(1) to provide state matching funds for federal funds
provided to the state water pollution control revolving fund or to
any additional state revolving fund created under Subchapter J,
Chapter 15;
(2) to provide financial assistance from the proceeds
of taxable bond issues to water supply corporations organized under
Chapter 67, and other participants;
(3) to provide financial assistance to participants
for the construction of water supply projects and treatment works;
(4) to provide financial assistance for an interim
construction period to participants for projects for which the
board will provide long-term financing through the water
development fund;
(5) to provide financial assistance for water supply
and sewer service projects in economically distressed areas as
provided by Subchapter K, Chapter 17, to the extent the board can
make that assistance without adversely affecting the current or
future integrity of the fund or of any other financial assistance
program of the board;
(6) to provide funds to the water infrastructure fund
created under Section 15.973; [and]
(7) to provide funds to the state water implementation
revenue fund for Texas;
(8) to provide funds to the flood infrastructure fund
created under Section 15.533; and
(9) to provide funds to the Texas infrastructure
resiliency fund created under Section 16.452.
ARTICLE 5. EFFECTIVE DATE
SECTION 5.01. (a) Except as provided by Subsection (b) of
this section, this Act takes effect immediately if it receives a
vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2019.
(b) Article 2 of this Act takes effect January 1, 2020, but
only if the constitutional amendment proposed by the 86th
Legislature, Regular Session, 2019, authorizing the legislature to
provide for the creation of the flood infrastructure fund to assist
in the financing of drainage, flood mitigation, and flood control
projects is approved by the voters. If that amendment is not
approved by the voters, Article 2 has no effect.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 7 passed the Senate on
March 20, 2019, by the following vote: Yeas 31, Nays 0; and that
the Senate concurred in House amendments on May 22, 2019, by the
following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 7 passed the House, with
amendments, on May 16, 2019, by the following vote: Yeas 143,
Nays 1, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor