Texas 2025 - 89th Regular

Texas Senate Bill SB1261 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Perry, Flores S.B. No. 1261
2		-	West
3		-
4		-
	1	+	By: Perry S.B. No. 1261
	2	+	(In the Senate - Filed February 13, 2025;
	3	+	February 28, 2025, read first time and referred to Committee on
	4	+	Water, Agriculture and Rural Affairs; April 9, 2025, reported
	5	+	adversely, with favorable Committee Substitute by the following
	6	+	vote: Yeas 9, Nays 0; April 9, 2025, sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 1261 By: Perry
5	9
6	10
7	11		A BILL TO BE ENTITLED
8	12		AN ACT
9	13		relating to the financing of water supply projects included in the
10	14		state water plan; authorizing the issuance of obligations.
11	15		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	16		SECTION 1. Subtitle F, Title 9, Government Code, is amended
13	17		by adding Chapter 1373 to read as follows:
14	18		CHAPTER 1373. OBLIGATIONS FOR WATER PROJECTS
15	19		Sec. 1373.001. DEFINITIONS. In this chapter:
16	20		(1) "Eligible project" means one or more related water
17	21		supply projects:
18	22		(A) that are identified as recommended water
19	23		management strategies in the state water plan; and
20	24		(B) the cumulative capital costs of which are not
21	25		less than $750 million.
22	26		(2) "Indebtedness" means a bond, note, or other
23	27		obligation of an issuer issued or incurred pursuant to any
24	28		statutory authority other than this chapter.
25	29		(3) "Issuer" means an agency, authority, board, body
26	30		politic, department, district, instrumentality, municipal
27	31		corporation, political subdivision, public corporation, or
28	32		subdivision of this state.
29	33		(4) "Obligation" means a bond, note, or other
30	34		obligation, whether payable or secured by taxes other than ad
31	35		valorem taxes, revenues, or a combination thereof.
32	36		(5) "Obligation authorization" means the order,
33	37		ordinance, or resolution of the issuer authorizing the obligation.
34	38		(6) "State water plan" means the comprehensive water
35	39		plan for the state adopted under Section 16.051, Water Code.
36	40		Sec. 1373.002. APPLICABILITY. This chapter does not apply
37	41		to financial assistance provided by the Texas Water Development
38	42		Board.
39	43		Sec. 1373.003. CONSTRUCTION. This chapter shall be
40	44		liberally construed to achieve the legislative intent and purposes
41	45		of this chapter. A power granted by this chapter shall be broadly
42	46		interpreted to achieve the intent and purposes.
43	47		Sec. 1373.004. RELATIONSHIP TO OTHER LAW. (a) To the
44	48		extent of any conflict or inconsistency between this chapter and
45	49		another law or a municipal charter, this chapter controls.
46	50		(b) An issuer may use any provision of another law that does
47	51		not conflict with this chapter to the extent convenient or
48	52		necessary as determined by the issuer to carry out any power or
49	53		authority, express or implied, granted by this chapter, without
50	54		reference to any other laws or any restrictions or limitations
51	55		contained in those laws.
52	56		(c) Chapter 1207 applies to the refunding of obligations
53	57		issued or incurred under this chapter.
54	58		Sec. 1373.005. AUTHORITY TO ISSUE OBLIGATIONS.
55	59		Notwithstanding any other law, as authorized and approved by the
56	60		governing body of an issuer, obligations may be issued, sold,
57	61		incurred, and delivered to:
58	62		(1) finance or refinance an eligible project;
59	63		(2) refund obligations, other indebtedness, or
60	64		contractual obligations of the issuer issued or incurred in
61	65		connection with an eligible project; and
62	66		(3) pay the costs of issuance or delivery of the
63	67		obligations.
64	68		Sec. 1373.006. SECURITY FOR OBLIGATION. (a) An obligation
65	69		may be secured by:
66	70		(1) the proceeds from the sale of other obligations or
67	71		indebtedness of the issuer, including proceeds from the sale of
68	72		revenue bonds payable from the revenue to be received from an
69	73		eligible project or a specified user of an eligible project;
70	74		(2) subject to Subsection (d), any revenue that the
71	75		issuer is authorized by the constitution, a statute, or the charter
72	76		of a home-rule municipality to pledge or pay any kind of general or
73	77		special indebtedness by or from those revenues;
74	78		(3) water supply contracts or water treatment
75	79		contracts or other similar contracts or the revenue received from
76	80		those contracts; or
77	81		(4) any combination of the sources described by this
78	82		subsection.
79	83		(b) The governing body of an issuer may secure an obligation
80	84		and pay the cost of a contract or other agreement executed and
81	85		delivered in connection with the financing of an eligible project
82	86		with a pledge of the sources permitted by this chapter.
83	87		(c) Notwithstanding any other law, if an issuer secures an
84	88		obligation with contracts or the revenue from those contracts, the
85	89		term of the contracts may not be less than the final maturity or
86	90		term of such obligations pursuant to Section 1373.008.
87	91		(d) An obligation may not be secured wholly or partly by a
88	92		pledge of ad valorem taxes.
89	93		Sec. 1373.007. USE OF PROCEEDS. An issuer may use the
90	94		proceeds from the issuance or incurrence of an obligation to
91	95		finance and refinance an eligible project, including costs
92	96		authorized by Section 1201.042(a).
93	97		Sec. 1373.008. MATURITY OR TERM OF OBLIGATIONS. (a) The
94	98		maximum maturity or term of an obligation issued or incurred
95	99		pursuant to this chapter may not exceed the lesser of:
96	100		(1) the reasonably expected weighted average useful
97	101		life of the eligible project as certified by a licensed
98	102		professional engineer selected by the issuer; or
99	103		(2) 50 years from the date of issuance or incurrence of
100	104		the obligation.
101	105		(b) The determination of reasonably expected weighted
102	106		average useful life of an eligible project made under Subsection
103	107		(a) may not be contested for any reason.
104	108		Sec. 1373.009. OBLIGATION AUTHORIZATION. (a) The
105	109		governing body of an issuer must adopt or approve an obligation
106	110		authorization before an obligation may be issued or incurred.
107	111		(b) The obligation authorization must establish:
108	112		(1) the maximum amount of the obligation to be issued
109	113		or incurred or, if applicable, the maximum principal amount that
110	114		may be outstanding at any time;
111	115		(2) subject to Section 1373.008, the maximum term for
112	116		which the obligation issued or incurred under the authorization may
113	117		be outstanding;
114	118		(3) the maximum interest rate the obligation may bear;
115	119		(4) subject to Subsection (c)(2), the manner of sale
116	120		of the obligation, which may be by public or private sale, the price
117	121		of the obligation, the form of the obligation, and the terms,
118	122		representations, and covenants of the issuer made in connection
119	123		with the issuance or incurrence of the obligation, if applicable;
120	124		and
121	125		(5) each source pledged or to be pledged to the payment
122	126		of the obligation.
123	127		(c) The obligation authorization may:
124	128		(1) provide for the designation of a paying agent and
125	129		registrar for the obligation; and
126	130		(2) authorize one or more designated officers or
127	131		employees of the issuer to act on behalf of the issuer from time to
128	132		time in selling, incurring, and delivering obligations and setting
129	133		the dates, price, interest rates, interest payment periods,
130	134		redemption features, and other procedures relating to the issuance,
131	135		sale, incurrence, and delivery of obligations, as specified in the
132	136		obligation authorization.
133	137		Sec. 1373.010. EFFECT OF FINDING OR DETERMINATION UNDER
134	138		DELEGATION OF AUTHORITY. A finding or determination made by an
135	139		officer or employee acting under the authority delegated to the
136	140		officer or employee by an obligation authorization adopted or
137	141		approved under this chapter has the same force and effect as a
138	142		finding or determination made by the governing body.
139	143		Sec. 1373.011. REVIEW AND APPROVAL OF OBLIGATION AND
140	144		CONTRACT BY ATTORNEY GENERAL. (a) Before an obligation may be
141	145		issued or incurred, a record of the proceedings of the issuer
142	146		authorizing the issuance, execution, incurrence, and delivery of
143	147		the obligation and any contract providing revenue or security
144	148		pledged to the payment of the obligation must be submitted to the
145	149		attorney general for review.
146	150		(b) If the attorney general finds that the proceedings
147	151		authorizing an obligation conform to the requirements of the Texas
148	152		Constitution and this chapter, the attorney general shall approve
149	153		it and deliver to the comptroller a copy of the attorney general's
150	154		legal opinion stating that approval and the record of proceedings.
151	155		After approval, the obligation may be executed and delivered,
152	156		exchanged, or refinanced from time to time in accordance with those
153	157		authorizing proceedings.
154	158		Sec. 1373.012. REGISTRATION. On receipt of the documents
155	159		required by Section 1373.011(b), the comptroller shall register the
156	160		record of the proceedings relating to the issuance of an
157	161		obligation.
158	162		Sec. 1373.013. VALIDITY AND INCONTESTABILITY. (a) If
159	163		proceedings to authorize an obligation are approved by the attorney
160	164		general and registered by the comptroller, each obligation and any
161	165		contract that provides revenue or security included in or executed
162	166		and delivered according to the authorizing proceedings and pledged
163	167		to the payment of the obligation is incontestable in a court or
164	168		other forum and is valid, binding, and enforceable according to its
165	169		terms.
166	170		(b) Notwithstanding Subsection (a) and except as provided
167	171		by this subsection, an obligation authorized by this chapter is not
168	172		valid, binding, or enforceable unless the obligation is approved by
169	173		the attorney general and registered by the comptroller in
170	174		accordance with Chapter 1202.
171		-	SECTION 2. Section 15.435(c), Water Code, is amended to
	175	+	SECTION 2. Section 15.432(b), Water Code, is amended to
	176	+	read as follows:
	177	+	(b) Money deposited to the credit of the fund may be used:
	178	+	(1) only as provided by this subchapter; and
	179	+	(2) for eligible projects, as defined by Section
	180	+	1373.001, Government Code.
	181	+	SECTION 3. Section 15.435(c), Water Code, is amended to
172	182		read as follows:
173	183		(c) If the trust company enters into a bond enhancement
174	184		agreement under Subsection (b), the board may direct the trust
175	185		company to make disbursements from the fund to another fund or
176	186		account for the support of bonds the proceeds of which are used to
177	187		provide financial assistance in the form of:
178	188		(1) a loan bearing an interest rate of not less than 50
179	189		percent of the then-current market rate of interest available to
180	190		the board;
181	191		(2) a loan to finance a facility under repayment terms
182	192		similar to the terms of debt customarily issued by the entity
183	193		requesting assistance but not to exceed the lesser of:
184	194		(A) the expected useful life of the facility; or
185	195		(B) 30 years or, for an eligible project, as
186	196		defined by Section 1373.001, Government Code, 40 years;
187	197		(3) a deferral of loan repayment, including deferral
188	198		of the repayment of:
189	199		(A) principal and interest; or
190	200		(B) accrued interest;
191	201		(4) incremental repurchase terms for an acquired
192	202		facility, including terms for no initial repurchase payment
193	203		followed by progressively increasing incremental levels of
194	204		interest payment, repurchase of principal and interest, and
195	205		ultimate repurchase of the entire state interest in the facility
196	206		using simple interest calculations; or
197	207		(5) a combination of the methods of financing
198	208		described by Subdivisions (1)-(4).
199		-	SECTION 3. Section 15.474(a), Water Code, is amended to
	209	+	SECTION 4. Section 15.474(a), Water Code, is amended to
200	210		read as follows:
201	211		(a) Except as provided by Subsection (c), money in the fund
202	212		may be used by the board only to provide financing or refinancing,
203	213		under terms specified by the board, for an eligible project, as
204	214		defined by Section 1373.001, Government Code, or for projects
205	215		included in the state water plan that are authorized under
206	216		Subchapter C-1, Q, or R of this chapter, Subchapter E or F, Chapter
207	217		16, or Subchapter J or L, Chapter 17, including water conservation
208	218		or reuse projects designed to reduce the need for this state or
209	219		political subdivisions of this state to develop additional water
210	220		resources.
211		-	SECTION 4. Section 17.852(5), Water Code, is amended to
	221	+	SECTION 5. Section 17.852(5), Water Code, is amended to
212	222		read as follows:
213	223		(5) "Project" includes water supply projects,
214	224		treatment works, [and] flood projects, as defined by Section 15.531
215	225		or 16.451, and eligible projects as defined by Section 1373.001,
216	226		Government Code.
217		-	SECTION 5. Section 17.957(c), Water Code, is amended to
	227	+	SECTION 6. Section 17.957(c), Water Code, is amended to
218	228		read as follows:
219	229		(c) Money on deposit in the state participation account may
220	230		be used by the board, in the manner that the board determines
221	231		necessary for the administration of the fund, for:
222	232		(1) eligible projects, as defined by Section 1373.001,
223	233		Government Code; and
224	234		(2) projects described in Sections 16.131 and 16.146
225	235		[in the manner that the board determines necessary for the
226	236		administration of the fund].
227		-	SECTION 6. This Act takes effect September 1, 2025.
	237	+	SECTION 7. This Act takes effect September 1, 2025.
	238	+	* * * * *