88R28713 JAM-F
 
  By: Perry, et al. S.B. No. 28
 
  (King of Uvalde, Troxclair, et al.)
 
  Substitute the following for S.B. No. 28:  No.
 
 
 
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.  Section 10.010, Water Code, is amended to read as
  follows:
         Sec. 10.010.  POWERS AND DUTIES OF COUNCIL.  The council
  shall:
               (1)  monitor trends in water conservation
  implementation;
               (2)  monitor new technologies for possible inclusion by
  the board as best management practices in the best management
  practices guide developed by the water conservation implementation
  task force under Chapter 109, Acts of the 78th Legislature, Regular
  Session, 2003;
               (3)  monitor the effectiveness of the statewide water
  [conservation] public awareness program developed under Section
  16.026 [16.401] and associated local involvement in implementation
  of the program;
               (4)  develop and implement a state water management
  resource library;
               (5)  develop and implement a public recognition program
  for water conservation;
               (6)  monitor the implementation of water conservation
  strategies by water users included in regional water plans; and
               (7)  monitor target and goal guidelines for water
  conservation to be considered by the board and commission.
         SECTION 2.  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. (a)  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 any
  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.
         (b)  The fund is exempt from the application of Section
  403.095, Government Code.
         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 of new water
  supplies by December 31, 2033.
         (b)  The fund may be used to:
               (1)  provide 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)  desalination projects, including marine and
  brackish water desalination;
                     (C)  produced water treatment projects, other
  than projects that are only for purposes of oil and gas exploration;
                     (D)  aquifer storage and recovery projects;
                     (E)  potable water reuse projects; and
                     (F)  the development of infrastructure to
  transport water that is made available by a project described by
  this subdivision;
               (2)  make transfers from the fund:
                     (A)  to the state water implementation fund for
  Texas established under Subchapter G or the Texas Water Development
  Fund II established under Subchapter L, Chapter 17; and
                     (B)  for a purpose described by Subdivision (1);
  and
               (3)  make transfers from the fund to the water bank
  account established under Section 15.707 only for the acquisition
  or transfer of water originating outside this state.
         (c)  The fund may be used for any purpose described by
  Subsection (b) under criteria developed by the board. A loan made
  from the fund under this subchapter may provide for repayment terms
  of up to 30 years, in the board's discretion.
         (d)  Financial assistance for a purpose described by
  Subsection (b)(1):
               (1)  may be provided for a qualifying project under
  Chapter 2267, Government Code, only if the project complies with
  that chapter; and
               (2)  may not be provided for expenses associated with
  the maintenance or operation of a water supply project described by
  Subsection (b)(1).
         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
  financial assistance, the distribution of financial assistance,
  the investment of funds, and the administration of financial
  assistance 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 supply 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 money or revenue to the
  political subdivision 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)  for an application for financial assistance in the
  form of a loan, the money or revenue pledged by the political
  subdivision will be sufficient to meet all the obligations assumed
  by the political subdivision during the term of the loan.
         (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.  This subsection does not apply to a loan made under
  other law with money transferred under Section 15.153(b)(2).
         (e)  An application from a political subdivision 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 3.  Section 15.438(a), Water Code, is amended to
  read as follows:
         (a)  The State Water Implementation Fund for Texas Advisory
  Committee is composed of the following seven members:
               (1)  the comptroller, or a person designated by the
  comptroller;
               (2)  three members of the senate appointed by the
  lieutenant governor, including:
                     (A)  a member of the committee of the senate
  having primary jurisdiction over matters relating to finance; and
                     (B)  the chair [a member] of the committee of the
  senate having primary jurisdiction over water [natural] resources;
  and
               (3)  three members of the house of representatives
  appointed by the speaker of the house of representatives,
  including:
                     (A)  a member of the committee of the house of
  representatives having primary jurisdiction over appropriations;
  and
                     (B)  the chair [a member] of the committee of the
  house of representatives having primary jurisdiction over water 
  [natural] resources.
         SECTION 4.  Section 15.472(a), Water Code, is amended to
  read as follows:
         (a)  The state water implementation revenue fund for Texas is
  a special fund in the state treasury outside the general revenue
  fund to be used by the board, without further legislative
  appropriation, only for the purpose of providing financing for
  projects included in the state water plan that are authorized under
  Subchapter C-1, Q, or R of this chapter, Subchapter E or F, Chapter
  16, or Subchapter J or L, Chapter 17.  The board may establish
  separate accounts in the fund.  The board has legal title to money
  and investments in the fund until the money is disbursed as provided
  by this subchapter and board rules.  It is the intent of the
  legislature that the fund will never be used:
               (1)  for a purpose other than the support of projects in
  the state water plan; or
               (2)  to certify that appropriations from the treasury
  are within the amount estimated to be available in a fund of the
  treasury affected by the appropriation.
         SECTION 5.  Section 15.474(a), Water Code, is amended to
  read as follows:  
         (a)  Except as provided by Subsection (c), money in the fund
  may be used by the board only to provide financing or refinancing,
  under terms specified by the board, for projects included in the
  state water plan that are authorized under Subchapter C-1, Q, or R
  of this chapter, Subchapter E or F, Chapter 16, or Subchapter J or
  L, Chapter 17, including water conservation or reuse projects
  designed to reduce the need for this state or political
  subdivisions of this state to develop additional water resources.
         SECTION 6.  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 statewide water public awareness account
  established under Section 16.027;
               (8)  the Texas Water Development Fund II water
  financial assistance account established under Section 17.959; and
               (9)  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 appropriated by the legislature
  directly to the fund and 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 board, 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) The board by resolution 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 or wastewater infrastructure projects,
  prioritized by risk or need, for:
                     (A)  rural political subdivisions; and
                     (B)  municipalities with a population of less than
  150,000;
               (2)  projects for which all required state or federal
  permitting has been substantially completed, as determined by the
  board;
               (3)  the statewide water public awareness program
  established under Section 16.026; and
               (4)  water conservation strategies.
         (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 financial
  assistance for any purpose described by Subsection (c) under
  criteria developed by the board and in accordance with law.
         (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).
         (f)  The board may use the fund to pay the necessary and
  reasonable expenses of the board in administering the fund.
         Sec. 15.505.  TRANSFER OF MONEY.  Notwithstanding any other
  law:
               (1)  the board may:
                     (A)  transfer money from the fund into any other
  fund or account described by Section 15.502(b); and
                     (B)  restore to the fund money transferred from
  the fund and deposited to the credit of a fund or account described
  by Section 15.502(b); and 
               (2)  a fund or account described by Section 15.502(b)
  may accept a transfer of money made under this subchapter.
         Sec. 15.506.  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 15.507;
               (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. 15.507.  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 7.  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 8.  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 9.  Section 16.401, Water Code, is transferred to
  Subchapter B, Chapter 16, Water Code, redesignated as Section
  16.026, Water Code, and amended to read as follows:
         Sec. 16.026  [16.401].  STATEWIDE WATER [CONSERVATION]
  PUBLIC AWARENESS PROGRAM.  (a)  The executive administrator shall
  develop and implement a statewide water [conservation] public
  awareness program to educate residents of this state about water
  [conservation].  The program shall take into account the
  differences in water [conservation] needs of various geographic
  regions of the state and shall be designed to complement and support
  existing local and regional water education or awareness
  [conservation] programs.
         (b)  The executive administrator is required to develop and
  implement the program required by Subsection (a) in a state fiscal
  biennium only if the legislature appropriates sufficient money in
  that biennium specifically for that purpose.
         SECTION 10.  Subchapter B, Chapter 16, Water Code, is
  amended by adding Section 16.027 to read as follows:
         Sec. 16.027.  STATEWIDE WATER PUBLIC AWARENESS ACCOUNT. (a)
  The statewide water public awareness account is an account in the
  general revenue fund. The account consists of:
               (1)  money appropriated to the board for deposit to the
  credit of the account;
               (2)  money transferred by the board to the credit of the
  account from other funds available to the board;
               (3)  money from gifts or grants to the account from any
  source, including the federal government, an educational
  institution, or a private donor;
               (4)  proceeds from the sale of educational or public
  awareness materials, publications, and other items deposited to the
  credit of the account; and
               (5)  interest earned on the investment of money in the
  account and depository interest allocable to the account. 
         (b)  The account may be used by the board to develop,
  administer, and implement the statewide water public awareness
  program established by Section 16.026. 
         (c)  The board may invest, reinvest, and direct the
  investment of available money in the account as provided by law for
  the investment of money under Section 404.024, Government Code.
         (d)  The account is exempt from the application of Section
  403.095, Government Code.
         SECTION 11.  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 12.  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 13.  (a) Except as otherwise provided by this Act,
  this Act takes effect September 1, 2023.
         (b)  Section 6 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 6 of this Act has no effect.