By: Perry, et al. S.B. No. 28
A BILL TO BE ENTITLED
AN ACT
relating to financial assistance provided and programs
administered by the Texas Water Development Board.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 15, Water Code, is amended by adding
Subchapter C-1 to read as follows:
SUBCHAPTER C-1. NEW WATER SUPPLY FOR TEXAS FUND
Sec. 15.151. DEFINITION. In this subchapter, "fund" means
the new water supply for Texas fund.
Sec. 15.152. FUND. The new water supply for Texas fund is a
special fund in the state treasury. The fund consists of:
(1) money appropriated for transfer or deposit to the
credit of the fund;
(2) money the board transfers to the fund from an
available source;
(3) depository interest allocable to the fund and
other investment returns on money in the fund;
(4) money from gifts, grants, or donations to the
fund; and
(5) any other fees or sources of revenue that the
legislature may dedicate for deposit to the fund.
Sec. 15.153. USE OF FUND. (a) The board by rule shall
undertake to finance projects through the fund that will lead to the
acquisition or creation of seven million acre-feet per year of new
water supplies by December 31, 2033.
(b) The fund may be used only to provide:
(1) financial assistance to political subdivisions to
develop water supply projects that create new water sources for the
state, including:
(A) the acquisition of water from other states;
(B) the development of infrastructure to
transport water from other states;
(C) desalination projects, including marine and
brackish water desalination; and
(D) produced water treatment projects, other
than projects that are only for purposes of oil and gas exploration;
or
(2) grants to institutions of higher education or
qualified research entities, as determined by the board, to conduct
research into new technology that may lead to the development of
significant new water supply sources, as determined by the board
based on the amount of water the technology may produce.
(c) The fund may be used to provide financial assistance for
any purpose described by Subsection (b) under criteria developed by
the board. A loan made under this subchapter may provide for
repayment terms of up to 30 years, in the board's discretion.
(d) Financial assistance described by Subsection (c) for a
purpose described by Subsection (b)(1):
(1) may be provided for a qualifying project under
Chapter 2267, Government Code; and
(2) may not be provided for expenses associated with
the maintenance or operation of a water supply project described by
Subsection (b)(1).
(e) The board may not provide financial assistance from the
fund if the balance of the fund is less than $50 million.
Sec. 15.154. FINANCIAL ASSISTANCE. (a) The board shall
adopt rules necessary to administer this subchapter, including
rules establishing procedures for the application for and award of
loans, the distribution of loans, the investment of funds, and the
administration of loans and the fund.
(b) When evaluating an application for financial assistance
from a political subdivision, the board shall consider:
(1) the intended end users of the water supply, the
needs of the area to be served by the project, the expected benefit
of the project to the area, the relationship of the project to the
water needs of this state overall, and the relationship of the
project to the state water plan;
(2) the amount of water expected to be produced by the
project; and
(3) the availability of revenue to the political
subdivision or wholesale water provider from all sources for the
ultimate repayment of the cost of the project, including all
interest.
(c) The board by resolution may approve an application if,
after considering the factors listed in Subsection (b) and other
relevant factors, the board finds that:
(1) the public interest is served by state assistance
for the project; and
(2) the revenue or taxes pledged by the political
subdivision or wholesale water provider will be sufficient to meet
all the obligations assumed by the political subdivision or
wholesale water provider during the succeeding period of not more
than 30 years.
(d) The repayment of principal or interest on a loan made
under this subchapter must be deposited to the credit of the Texas
water fund.
(e) An application from a political subdivision or
wholesale water provider for financial assistance under this
subchapter must comply with the requirements of Section 16.4021.
(f) Sections 17.183-17.187 apply to the construction of
projects funded under this subchapter.
SECTION 2. Chapter 15, Water Code, is amended by adding
Subchapter H-1 to read as follows:
SUBCHAPTER H-1. TEXAS WATER FUND
Sec. 15.501. DEFINITION. In this subchapter, "fund" means
the Texas water fund.
Sec. 15.502. FUND. (a) The Texas water fund is a special
fund in the state treasury outside the general revenue fund. The
fund is administered by the board.
(b) The board may use the fund only to transfer money to:
(1) the water assistance fund established under
Subchapter B;
(2) the new water supply for Texas fund established
under Subchapter C-1;
(3) the state water implementation fund for Texas
established under Subchapter G;
(4) the state water implementation revenue fund for
Texas established under Subchapter H;
(5) a revolving fund established under Subchapter J;
(6) the rural water assistance fund established under
Subchapter R;
(7) the Texas Water Development Fund established under
Subchapter C, Chapter 17; and
(8) the Texas Water Development Fund II state
participation account established under Section 17.957.
(c) Money and investments in the fund shall be kept and held
for and in the name of the board.
(d) The comptroller may not use the fund for certification
under Section 49a, Article III, Texas Constitution.
(e) Money in the fund may be used only as provided by this
subchapter.
(f) The fund consists of:
(1) money transferred or deposited to the credit of
the fund by law, including money from any source transferred or
deposited to the credit of the fund as authorized by law;
(2) any other revenue that the legislature by statute
dedicates for deposit to the credit of the fund;
(3) investment earnings and interest earned on amounts
credited to the fund;
(4) money from gifts, grants, or donations to the
fund; and
(5) money returned from any authorized transfer.
Sec. 15.503. MANAGEMENT AND INVESTMENT OF FUND. (a) Money
in the fund shall be invested as determined by the board. If
managed by the comptroller, the fund may be invested with the state
treasury pool.
(b) The fund and any accounts established in the fund shall
be kept and maintained by or at the direction of the board.
(c) The money in the fund may be managed by the comptroller
or a corporate trustee that is a trust company or a bank that has the
powers of a trust company for and on behalf of the board and pending
the money's use for the purposes provided by this subchapter, if
managed by a corporate trustee, may be invested as provided by an
order, resolution, or rule of the board.
(d) If directed by the board to manage the fund under
Subsection (c), a corporate trustee shall manage the fund in strict
accordance with this subchapter and the orders, resolutions, and
rules of the board. In managing the assets of the fund, the board,
comptroller, or corporate trustee may acquire, exchange, sell,
supervise, manage, or retain any kind of investment that a prudent
investor, exercising reasonable care, skill, and caution, would
acquire or retain in light of the purposes, terms, distribution
requirements, and other circumstances of the fund then prevailing,
taking into consideration the investment of all the assets of the
fund rather than a single investment. The reasonable expenses of
managing the fund's assets shall be paid from the fund.
Sec. 15.504. USE OF FUND. (a) Subject to legislative
appropriation, the board may make transfers from the fund to a fund
or account described by Section 15.502(b) for an authorized purpose
of the receiving fund or account.
(b) The board may not transfer money to a fund or account
described by Section 15.502(b) until the application for the
project for which the money is to be used has been approved.
(c) The board shall ensure that a portion of the money
transferred from the fund is used for:
(1) water infrastructure projects to prevent or repair
water main failure, prioritized by risk or need, for:
(A) rural political subdivisions, as defined by
Section 15.992; and
(B) municipalities with a population of less than
150,000;
(2) projects for which all required state or federal
permitting has been completed;
(3) the statewide water conservation public awareness
program established under Section 16.401; and
(4) water conservation strategies for new residential
construction.
(d) Money transferred from the fund for the purposes
described by Subsection (c) may be transferred to funds or accounts
described by Section 15.502(b) to be used to provide low interest
loans, zero interest loans, negative interest loans, loan
forgiveness, or grants for any purpose described by Subsection (c)
under criteria developed by the board.
(e) Money deposited to the credit of the fund as provided by
Section 15.154(d) may be used only for the purposes described by
Section 15.153(b).
Sec. 15.505. ADVISORY COMMITTEE. (a) The State Water
Implementation Fund for Texas Advisory Committee established under
Section 15.438:
(1) shall submit comments and recommendations to the
board regarding the use of money in the fund for use by the board in
adopting rules under Section 15.506;
(2) shall review the overall operation, function, and
structure of the fund at least annually and may provide comments and
recommendations to the board on any matter; and
(3) may adopt rules, procedures, and policies as
needed to administer this section and implement its
responsibilities.
(b) The advisory committee may not recommend specific
projects for consideration for receipt of financial assistance from
the fund.
Sec. 15.506. RULES. (a) The board may adopt rules
providing for the use of money in the fund that are consistent with
this subchapter.
(b) Rules adopted under this section must require each
recipient of financial assistance administered through the fund to
submit to the board a water conservation plan consistent with the
requirements of Section 16.4021.
SECTION 3. Section 15.994(c), Water Code, is amended to
read as follows:
(c) The board may use money in the fund to contract for
outreach, financial, planning, and technical assistance to assist
rural political subdivisions [in obtaining and using financing from
any source] for a purpose described by this section, including in
obtaining and using financing from funds and accounts administered
by the board.
SECTION 4. Section 16.0121, Water Code, is amended by
adding Subsections (k) and (l) to read as follows:
(k) The board by rule shall establish a program to provide
technical assistance to retail public utilities in conducting water
audits required under Subsections (b) and (b-1) and in applying for
financial assistance from the board to mitigate the utility
system's water loss. The board may provide for the implementation
of the program established under this subsection by contracting or
partnering with other entities. Rules adopted under this section
must provide for the prioritization of technical assistance to
retail public utilities based on:
(1) water loss audits submitted to the board;
(2) the population served by the utility; and
(3) the integrity of the utility's system.
(l) The board shall post on the board's Internet website
information that:
(1) summarizes the information compiled under
Subsection (f);
(2) summarizes the measures taken by retail public
utilities to reduce water loss; and
(3) identifies the retail public utilities
participating in the program established under Subsection (k) and
details the use of financial assistance provided under that
subsection.
SECTION 5. Section 16.4021(b), Water Code, is amended to
read as follows:
(b) This section applies to an application for financial
assistance under:
(1) Subchapters C, C-1, D, E, G, H, J, O, Q, and R,
Chapter 15;
(2) Subchapters E and F of this chapter; and
(3) Subchapters D, F, I, K, and L, Chapter 17.
SECTION 6. Not later than January 1, 2024, the Texas Water
Development Board shall adopt rules as required by Section
16.0121(k), Water Code, as added by this Act.
SECTION 7. (a) Except as otherwise provided by this Act,
this Act takes effect September 1, 2023.
(b) Section 2 of this Act takes effect January 1, 2024, but
only if the constitutional amendment proposed by the 88th
Legislature, Regular Session, 2023, creating the Texas water fund
to assist in financing water projects in this state is approved by
the voters. If that constitutional amendment is not approved by
the voters, Section 2 of this Act has no effect.