Texas 2025 - 89th Regular

Texas House Bill HB16 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R17900 TYPED
2	2	By: Harris H.B. No. 16
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the oversight and financing of certain water
10	10	infrastructure matters under the jurisdiction of the Texas Water
11	11	Development Board.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	ARTICLE 1. WATER INFRASTRUCTURE DEVELOPMENT
14	14	SECTION 1.1. Section 15.153(b), Water Code, is amended to
15	15	read as follows:
16	16	(b) The fund may be used to:
17	17	(1) provide financial assistance to political
18	18	subdivisions to develop water supply projects that create new water
19	19	sources for the state, including:
20	20	(A) desalination projects, including marine and
21	21	brackish water desalination;
22	22	(B) produced water treatment projects, other
23	23	than projects that are only for purposes of oil and gas exploration;
24	24	(C) aquifer storage and recovery projects; [and]
25	25	(D) reservoir projects for which:
26	26	(i) a permit for the discharge of dredged or
27	27	fill material has been issued by the United States secretary of the
28	28	army under Section 404, Federal Water Pollution Control Act (33
29	29	U.S.C. Section 1344); and
30	30	(ii) a permit for the storage, taking, or
31	31	diversion of state water has been issued by the commission under
32	32	Section 11.121; and
33	33	(E) the development of infrastructure to
34	34	transport or integrate into a water supply system water that is made
35	35	available by a project described by this subdivision; and
36	36	(F) potable water reuse projects;
37	37	(2) make transfers from the fund:
38	38	(A) to the state water implementation fund for
39	39	Texas established under Subchapter G or the Texas Water Development
40	40	Fund II established under Subchapter L, Chapter 17; and
41	41	(B) for a purpose described by Subdivision (1);
42	42	[and]
43	43	(3) make transfers from the fund to the water bank
44	44	account established under Section 15.707; and
45	45	(4) make transfers from the fund:
46	46	(A) to the Texas Water Development Fund II state
47	47	participation account established under Section 17.957; and
48	48	(B) for a purpose described by Subdivision (1).
49	49	SECTION 1.2. Section 15.502(b), Water Code, is amended to
50	50	read as follows:
51	51	(b) The board may use the fund only to transfer money to:
52	52	(1) the water assistance fund established under
53	53	Subchapter B;
54	54	(2) the new water supply for Texas fund established
55	55	under Subchapter C-1;
56	56	(3) the state water implementation fund for Texas
57	57	established under Subchapter G;
58	58	(4) the state water implementation revenue fund for
59	59	Texas established under Subchapter H;
60	60	(4-a) the flood infrastructure fund established under
61	61	Subchapter I;
62	62	(5) a revolving fund established under Subchapter J;
63	63	(6) the rural water assistance fund established under
64	64	Subchapter R;
65	65	(7) the statewide water public awareness account
66	66	established under Section 16.027;
67	67	(8) the Texas Water Development Fund II water
68	68	financial assistance account established under Section 17.959;
69	69	[and]
70	70	(9) the Texas Water Development Fund II state
71	71	participation account established under Section 17.957;
72	72	(10) the water access assessment account established
73	73	under Section 16.028;
74	74	(11) the agricultural water conservation fund; and
75	75	(12) the economically distressed areas program
76	76	account.
77	77	SECTION 1.3. Section 15.502(e), Water Code, is amended to
78	78	read as follows:
79	79	(e) The fund consists of:
80	80	(1) money transferred or deposited to the credit of
81	81	the fund by law, including:
82	82	(A) money transferred or deposited to the fund as
83	83	provided by Section 7-e, Article VIII, Texas Constitution;
84	84	(B) money appropriated by the legislature
85	85	directly to the fund; and
86	86	(C) money from any source transferred or
87	87	deposited to the credit of the fund as authorized by law;
88	88	(2) any other revenue that the legislature by statute
89	89	dedicates for deposit to the credit of the fund;
90	90	(3) investment earnings and interest earned on amounts
91	91	credited to the fund;
92	92	(4) money from gifts, grants, or donations to the
93	93	fund; and
94	94	(5) money returned from any authorized transfer.
95	95	SECTION 1.4. Section 15.504(c), Water Code, is amended to
96	96	read as follows:
97	97	(c) The board shall ensure that a portion of the money
98	98	transferred from the fund is used for:
99	99	(1) water and wastewater infrastructure projects,
100	100	prioritized by risk or need as described by the water access
101	101	assessment required under Section 6.116, for:
102	102	(A) rural political subdivisions; and
103	103	(B) municipalities with a population of less than
104	104	150,000;
105	105	(2) projects for which all required state or federal
106	106	permitting has been substantially completed, as determined by the
107	107	board;
108	108	(3) the statewide water public awareness program
109	109	established under Section 16.026;
110	110	(4) water conservation strategies; and
111	111	(5) water loss mitigation projects.
112	112	SECTION 1.5. Section 15.703(a), Water Code, is amended to
113	113	read as follows:
114	114	(a) The board may take all actions necessary to operate the
115	115	water bank and to facilitate the transfer of water rights from the
116	116	water bank for future beneficial use, including but not limited to:
117	117	(1) negotiating a sale price and terms acceptable to
118	118	the depositor and purchaser;
119	119	(2) maintaining a registry of water bank deposits and
120	120	those water users in need of additional supplies;
121	121	(3) informing water users in need of additional supply
122	122	of water rights available in the bank;
123	123	(4) encouraging water right holders to implement water
124	124	conservation practices and deposit the right to use the conserved
125	125	water into the bank;
126	126	(5) establishing requirements for deposit of a water
127	127	right into the water bank, including minimum terms for deposit;
128	128	(6) purchasing, holding, and transferring water or
129	129	water rights in its own name, including purchasing, holding, and
130	130	transferring water or water rights originating outside this state
131	131	for the purpose of providing water for the use or benefit of this
132	132	state;
133	133	(7) establishing regional water banks;
134	134	(8) acting as a clearinghouse for water marketing
135	135	information including water availability, pricing of water
136	136	transactions, environmental considerations, and potential buyers
137	137	and sellers of water rights;
138	138	(9) preparing and publishing a manual on structuring
139	139	water transactions;
140	140	(10) accepting and holding donations of water rights
141	141	to meet instream, water quality, fish and wildlife habitat, or bay
142	142	and estuary inflow needs;
143	143	(11) entering into contracts with persons to pay for
144	144	feasibility studies or the preparation of plans and specifications
145	145	relating to water conservation efforts or to estimate the amount of
146	146	water that would be saved through conservation efforts; and
147	147	(12) other actions to facilitate water transactions.
148	148	SECTION 1.6. Section 16.131(a), Water Code, is amended to
149	149	read as follows:
150	150	(a) The board may use the state participation account of the
151	151	development fund to encourage optimum regional and interregional
152	152	development of projects, including the design, acquisition, lease,
153	153	construction, reconstruction, development, or enlargement in whole
154	154	or part of:
155	155	(1) reservoirs and storm water retention basins for
156	156	water supply, flood protection, and groundwater recharge;
157	157	(2) facilities for the transmission and treatment of
158	158	water;
159	159	(3) treatment works as defined by Section 17.001;
160	160	[and]
161	161	(4) interregional water supply projects selected
162	162	under Section 16.145; and
163	163	(5) projects described by Section 15.153(b)(1).
164	164	SECTION 1.7. The following provisions of the Water Code are
165	165	repealed:
166	166	(1) Section 16.131(c); and
167	167	(2) Section 16.146(h).
168	168	ARTICLE 2. LEGISLATIVE OVERSIGHT
169	169	SECTION 2.1. Section 15.431(a)(1), Water Code, is amended
170	170	to read as follows:
171	171	(1) "Advisory committee" means the [State Water
172	172	Implementation Fund for] Texas Water Fund Advisory Committee.
173	173	SECTION 2.2. Section 15.438, Water Code, is transferred to
174	174	Subchapter A, Chapter 15, Water Code, redesignated as Section
175	175	15.009, Water Code, and amended to read as follows:
176	176	Sec. 15.009 [15.438]. TEXAS WATER FUND ADVISORY COMMITTEE.
177	177	(a) The [State Water Implementation Fund for] Texas Water Fund
178	178	Advisory Committee is composed of the following eight [seven]
179	179	members:
180	180	(1) the comptroller, or a person designated by the
181	181	comptroller;
182	182	(2) the chair of the committee of the senate having
183	183	primary jurisdiction over water resources;
184	184	(3) the chair of the committee of the house of
185	185	representatives having primary jurisdiction over water resources;
186	186	(4) two [three] members of the senate appointed by the
187	187	lieutenant governor, including at least one[:
188	188	[(A) a] member of the committee of the senate
189	189	having primary jurisdiction over matters relating to finance;
190	190	(5) two [and
191	191	[(B) the chair of the committee of the senate
192	192	having primary jurisdiction over water resources; and
193	193	[(3) three] members of the house of representatives
194	194	appointed by the speaker of the house of representatives, including
195	195	at least one[:
196	196	[(A) a] member of the committee of the house of
197	197	representatives having primary jurisdiction over appropriations;
198	198	and
199	199	(6) the director of the Texas Division of Emergency
200	200	Management or the successor in function to that entity, or a person
201	201	designated by that person, who serves as a nonvoting member
202	202	[(B) the chair of the committee of the house of
203	203	representatives having primary jurisdiction over water resources].
204	204	(b) The board [following persons] shall designate agency
205	205	personnel to serve as staff support for the advisory committee[:
206	206	(1) the deputy executive administrator of the board
207	207	who is responsible for water science and conservation or a person
208	208	who holds an equivalent position at the agency, or a person
209	209	designated by that person;
210	210	(2) the deputy executive administrator of the board
211	211	who is responsible for water resources planning and information or
212	212	a person who holds an equivalent position at the agency, or a person
213	213	designated by that person; and
214	214	(3) the chief financial officer of the board, or a
215	215	person who holds an equivalent position at the agency].
216	216	(c) A [An appointed] member of the advisory committee
217	217	designated under Subsection (a)(1) or (6) or appointed under
218	218	Subsection (a)(4) or (5) serves at the will of the person who
219	219	designated or appointed the member.
220	220	(d) The members of the advisory committee described by
221	221	Subsections (a)(2) and (3) serve as [lieutenant governor shall
222	222	appoint a] co-presiding officers [officer] of the [advisory]
223	223	committee [from among the members appointed by the lieutenant
224	224	governor, and the speaker of the house of representatives shall
225	225	appoint a co-presiding officer of the committee from among the
226	226	members appointed by the speaker].
227	227	(e) The advisory committee may hold public hearings, formal
228	228	meetings, or work sessions. Either co-presiding officer of the
229	229	advisory committee may call a public hearing, formal meeting, or
230	230	work session of the advisory committee at any time. The advisory
231	231	committee may not take formal action at a public hearing, formal
232	232	meeting, or work session unless a quorum of the committee is
233	233	present.
234	234	(f) Except as otherwise provided by this subsection, a
235	235	member of the advisory committee is not entitled to receive
236	236	compensation for service on the committee or reimbursement for
237	237	expenses incurred in the performance of official duties as a member
238	238	of the committee. Service on the advisory committee by a member of
239	239	the senate or house of representatives is considered legislative
240	240	service for which the member is entitled to reimbursement and other
241	241	benefits in the same manner and to the same extent as for other
242	242	legislative service.
243	243	(g) As needed, the [The] advisory committee shall submit
244	244	comments and recommendations to the board regarding the use of
245	245	money in:
246	246	(1) the state water implementation fund for Texas
247	247	established under Subchapter G [fund] for use by the board in
248	248	adopting rules under Section 15.439 and in adopting policies and
249	249	procedures under Section 15.441;
250	250	(2) the Texas water fund established under Subchapter
251	251	H-1 for use by the board in adopting rules under Section 15.507;
252	252	(3) the flood infrastructure fund established under
253	253	Subchapter I for use by the board in adopting rules under Section
254	254	15.537; and
255	255	(4) the Texas infrastructure resiliency fund
256	256	established under Section 16.452 for use by the board in adopting
257	257	rules under Section 16.460 [The submission must include:
258	258	[(1) comments and recommendations on rulemaking
259	259	related to the prioritization of projects in regional water plans
260	260	and the state water plan in accordance with Section 15.437;
261	261	[(2) comments and recommendations on rulemaking
262	262	related to establishing standards for determining whether projects
263	263	meet the criteria provided by Section 15.434(b);
264	264	[(3) an evaluation of the available programs for
265	265	providing financing for projects included in the state water plan
266	266	and guidelines for implementing those programs, including
267	267	guidelines for providing financing for projects included in the
268	268	state water plan that are authorized under Subchapter Q or R of this
269	269	chapter, Subchapter E or F, Chapter 16, or Subchapter J, Chapter 17;
270	270	[(4) an evaluation of the lending practices of the
271	271	board and guidelines for lending standards;
272	272	[(5) an evaluation of the use of funds by the board to
273	273	provide support for financial assistance for water projects,
274	274	including support for the purposes described by Section 15.435(c);
275	275	[(6) an evaluation of whether premium financing
276	276	programs should be established within the funds described by
277	277	Section 15.435 to serve the purposes of this subchapter, especially
278	278	in connection with projects described by Section 15.434(b);
279	279	[(7) an evaluation of methods for encouraging
280	280	participation in the procurement process by companies domiciled in
281	281	this state or that employ a significant number of residents of this
282	282	state; and
283	283	[(8) an evaluation of the overall operation, function,
284	284	and structure of the fund].
285	285	(h) The advisory committee shall review the overall
286	286	operation, function, and structure of each fund listed in
287	287	Subsection (g) [the fund] at least semiannually [and may provide
288	288	comments and recommendations to the board on any matter].
289	289	(i) The advisory committee may:
290	290	(1) provide comments and recommendations to the board
291	291	on any matter;
292	292	(2) review the overall operation, function, and
293	293	structure of any fund established under this chapter or Chapter 16
294	294	that is not listed in Subsection (g); and
295	295	(3) adopt rules, procedures, and policies as needed to
296	296	administer this section and implement its responsibilities.
297	297	(j) Chapter 2110, Government Code, does not apply to the
298	298	size, composition, or duration of the advisory committee.
299	299	(k) The advisory committee is not subject to Chapter 325,
300	300	Government Code (Texas Sunset Act). [Unless continued in existence
301	301	as provided by that chapter, the advisory committee is abolished
302	302	and this section expires September 1, 2035.]
303	303	(l) As needed, the [The] advisory committee shall make
304	304	recommendations to the board regarding information to be posted on
305	305	the board's Internet website relating to the funds listed in
306	306	Subsection (g) [under Section 15.440(b)].
307	307	(m) The advisory committee shall evaluate and may provide
308	308	comments or recommendations on the feasibility of the state owning,
309	309	constructing, and operating water supply projects, including
310	310	reservoirs and major water supply conveyance infrastructure,
311	311	through existing financial assistance programs under Subchapter E
312	312	of this chapter, Subchapter E or F, Chapter 16, or other mechanisms.
313	313	(n) The executive administrator shall provide an annual
314	314	report to the advisory committee on:
315	315	(1) the board's progress towards expanding state and
316	316	regional water supply portfolios, including:
317	317	(A) the annual financial commitments by program
318	318	for water supply projects and management strategies;
319	319	(B) the net amount of water projected to be
320	320	developed, conserved, or reclaimed through those annual
321	321	commitments;
322	322	(C) the amount of water developed, conserved, or
323	323	reclaimed through the completion of state-funded water supply
324	324	projects or management strategies during the prior fiscal year; and
325	325	(D) state and regional achievement towards
326	326	completing water supply projects and management strategies that
327	327	address water shortages during a drought of record as described
328	328	within the most recent state and regional water plans;
329	329	(2) the board's progress towards providing financial
330	330	assistance for drinking water and clean water utilities that are
331	331	eligible for state financial assistance, and:
332	332	(A) endure a significant number of boil water
333	333	notices;
334	334	(B) have water losses that meet or exceed the
335	335	threshold established by rule under Section 16.0121;
336	336	(C) have significant health, safety, or
337	337	environmental protection violations according to commission data;
338	338	or
339	339	(D) identified as failing or at risk of failing
340	340	according to the water risk assessment required under 6.116;
341	341	(3) the estimated aggregate value of the savings
342	342	provided to customers through the board's financial assistance
343	343	programs;
344	344	(4) [(1)] the board's compliance with statewide annual
345	345	goals relating to historically underutilized businesses; and
346	346	(5) [(2)] the participation level of historically
347	347	underutilized businesses in projects that receive funding related
348	348	to a bond enhancement agreement under Subchapter G [this
349	349	subchapter].
350	350	(o) If the aggregate level of participation by historically
351	351	underutilized businesses in projects that receive funding related
352	352	to a bond enhancement agreement under Subchapter G [this
353	353	subchapter] does not meet statewide annual goals adopted under
354	354	Chapter 2161, Government Code, the advisory committee shall make
355	355	recommendations to the board to improve the participation level.
356	356	(p) Notwithstanding the requirements of Sec. 551.008,
357	357	Government Code, the advisory committee shall have a right of
358	358	access to all records that relate to the administration of the funds
359	359	described in this section that are maintained by any entity under
360	360	contract with the board.
361	361	SECTION 2.3. The following provisions of the Water Code are
362	362	repealed:
363	363	(1) Section 15.506;
364	364	(2) Section 15.540;
365	365	(3) Section 16.451(1); and
366	366	(4) Section 16.456.
367	367	ARTICLE 3. PERFORMANCE AND ACCOUNTABILITY
368	368	SECTION 3.1. Subchapter D, Chapter 6, Water Code, is
369	369	amended by adding Sections 6.116, 6.117, and 6.118 to read as
370	370	follows:
371	371	Sec. 6.116. WATER ACCESS ASSESSMENT. (a) In this section:
372	372	(1) "Access assessment" means the water access
373	373	assessment established under this section.
374	374	(2) "Utility" means a retail public utility, as
375	375	defined by Section 13.002.
376	376	(b) The board by rule and in consultation with the
377	377	commission, the Public Utilities Commission of Texas, and
378	378	institutions of higher education, as defined by Section 61.003,
379	379	Education Code, shall establish:
380	380	(1) a water access assessment to determine the extent
381	381	of water access needs among utilities in this state; and
382	382	(2) a schedule that ensures that an access assessment
383	383	is conducted not less than once every 10 years for each utility.
384	384	(c) The access assessment must identify utilities that are
385	385	failing or at risk of failing through a ranking system that
386	386	evaluates and assigns numerical values to factors including:
387	387	(1) the overall condition of the utility's
388	388	infrastructure, including:
389	389	(A) the utility system's age;
390	390	(B) the presence of lead service lines;
391	391	(C) the presence of cast-iron pipes more than 30
392	392	years old;
393	393	(D) the utility's rates of water loss;
394	394	(E) the number of interconnections to other
395	395	systems; and
396	396	(F) susceptibility to extreme weather;
397	397	(2) availability of water to the utility, including
398	398	the utility's:
399	399	(A) number of water sources;
400	400	(B) drought and water shortage risk;
401	401	(C) groundwater production sustainability; and
402	402	(D) reliance on bottled or hauled water;
403	403	(3) the quality of the utility's water, including
404	404	whether the utility has any drinking water quality standard
405	405	violations;
406	406	(4) affordability of services the utility provides, as
407	407	determined by:
408	408	(A) median income of households the utility
409	409	serves;
410	410	(B) the average monthly amount the utility bills
411	411	to its customers relative to the average monthly billing amounts
412	412	among similarly sized utilities;
413	413	(C) rural areas the utility serves; and
414	414	(D) disadvantaged areas the utility serves; and
415	415	(5) the financial, managerial, and technical capacity
416	416	of the utility as indicated by factors including:
417	417	(A) certification violations of the utility's
418	418	operators;
419	419	(B) the utility's monitoring and reporting
420	420	violations;
421	421	(C) the utility's absence of a qualified
422	422	workforce; and
423	423	(D) the ratio of the utility's revenues to its
424	424	operating expenses.
425	425	(d) For each utility that an access assessment identifies as
426	426	failing or at risk of failing, the board shall send notice of the
427	427	identification to:
428	428	(1) the utility;
429	429	(2) the commission;
430	430	(3) the Public Utility Commission of Texas; and
431	431	(4) each standing committee of the legislature with
432	432	primary jurisdiction over the board.
433	433	(e) The board shall make available on its Internet website
434	434	the result of an access assessment performed under this section.
435	435	(f) In implementing this section, the board may:
436	436	(1) consult with the commission and the Public Utility
437	437	Commission of Texas in the development of category risk factors,
438	438	associated rankings of factors, and the development of scoring
439	439	thresholds for identifying utilities that are failing or at risk of
440	440	failing;
441	441	(2) reevaluate the risk factors and the factors'
442	442	associated numerical values every two years;
443	443	(3) enter into a memorandum of understanding with the
444	444	commission, the Public Utility Commission of Texas, and the
445	445	Department of State Health Services for the open transfer and
446	446	sharing of utilities' data, including critical infrastructure
447	447	data; and
448	448	(4) contract or otherwise partner with an institution
449	449	of higher education for the purposes of conducting a water access
450	450	assessment.
451	451	Sec. 6.117. PUBLIC INFORMATION. (a) The board shall
452	452	develop and maintain on its Internet website a publicly available
453	453	tool by which a person may obtain information regarding:
454	454	(1) state progress towards implementing water supply
455	455	projects and water management strategies that address potential
456	456	water supply shortfalls during a repeat of a drought of record as
457	457	described within the most recent state water plan;
458	458	(2) how many water utilities are classified as either
459	459	failing or at risk of failing as determined by an assessment
460	460	conducted under Section 6.116; and
461	461	(3) the proportion of failing or at-risk utilities
462	462	that have taken steps to no longer be classified as failing or at
463	463	risk of failing.
464	464	(b) The board shall update the information required to be
465	465	maintained under Subsection (a) not less than once a year.
466	466	Sec. 6.118. ANNUAL REPORT. (a) In this section, "Texas
467	467	water fund" means the fund established under Section 49-d-16,
468	468	Article III, Texas Constitution, as proposed by S.J.R. 75, 88th
469	469	Legislature, Regular Session, 2023.
470	470	(b) Not later than December 31 of each even-numbered year,
471	471	the board shall submit to the legislature a report that describes:
472	472	(1) the allocation of money from the Texas water fund
473	473	to other eligible board-administered funds;
474	474	(2) water supply projects within the state water plan
475	475	that have received funding commitments in the preceding biennium;
476	476	(3) the provision of financial assistance in the
477	477	preceding biennium from the Texas water fund to water and
478	478	wastewater systems that have been classified as failing or at risk
479	479	of failing as determined by an assessment conducted under Section
480	480	6.116;
481	481	(4) the state's progress towards closing anticipated
482	482	water infrastructure funding gaps;
483	483	(5) the state's progress towards closing potential
484	484	water supply deficits during a repeat of a drought of record;
485	485	(6) the state's progress towards fixing aging or
486	486	deteriorating water and wastewater systems; and
487	487	(7) the positive economic impact attributable to each
488	488	project receiving financial assistance from the Texas water fund.
489	489	SECTION 3.2. Subchapter B, Chapter 16, Water Code, is
490	490	amended by adding Section 16.028 to read as follows:
491	491	Sec. 16.028. WATER ACCESS ASSESSMENT ACCOUNT. (a) The
492	492	water access assessment account is an account in the general
493	493	revenue fund. The account consists of:
494	494	(1) money appropriated to the board for deposit to the
495	495	credit of the account;
496	496	(2) money transferred by the board to the credit of the
497	497	account from other funds available to the board;
498	498	(3) money from gifts or grants to the account from any
499	499	source, including the federal government, an educational
500	500	institution, or a private donor;
501	501	(4) proceeds from the sale of educational or public
502	502	awareness materials, publications, and other items deposited to the
503	503	credit of the account; and
504	504	(5) interest earned on the investment of money in the
505	505	account and depository interest allocable to the account.
506	506	(b) The account may be used by the board to develop,
507	507	administer, and implement the water access assessment established
508	508	by Section 6.116.
509	509	ARTICLE 4. EFFECTIVE DATES
510	510	SECTION 4.1. This Act takes effect January 1, 2026, but only
511	511	if the constitutional amendment proposed by the 89th Legislature,
512	512	Regular Session, 2025, providing for the dedication of certain
513	513	sales and use tax revenue to the Texas water fund is approved by the
514	514	voters. If that constitutional amendment is not approved by the
515	515	voters, this Act has no effect.