By: Rosson S.B. No. 1120 A BILL TO BE ENTITLED AN ACT 1-1 relating to establishing a wastewater reclamation fund and 1-2 providing financing to political subdivisions for wastewater 1-3 reclamation projects to be administered by the Texas Water 1-4 Development Board. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. Chapter 15 of the Water Code is hereby amended by 1-7 adding new Sections 15.701 through 15.709, to be entitled 1-8 "Financial Assistance for Water Reclamation Projects" to read as 1-9 follows: 1-10 Section 15.701. Creation of Wastewater Reclamation Fund. 1-11 The Wastewater Reclamation Fund is created which is to be 1-12 administered by the Board under this subchapter and in accordance 1-13 with rules adopted by the Board. The sum of twenty-five Million 1-14 Dollars ($25,000,000) is transferred from various accounts 1-15 containing available funds as identified by the Board to the 1-16 Wastewater Reclamation Fund, subject to the funds being available 1-17 for such purposes. The Wastewater Reclamation Fund shall be used 1-18 to provide financial assistance through low-interest loans and 1-19 grants to political subdivisions for the construction of wastewater 1-20 reclamation projects in accordance with the requirements of this 1-21 subchapter and the requirements for the use of the Texas 1-22 Administrative Code, Sections 310.1 through 310.18, and the rules 1-23 of the Texas Water Commission. 2-1 Section 15.702. Purpose. The purpose of this subchapter is 2-2 to promote conservation of the potable water supply and beneficial 2-3 uses of reclaimed wastewater by providing incentive financing 2-4 through low-interest loans and grants to political subdivisions for 2-5 the development of wastewater reclamation projects. 2-6 Section 15.703. Definitions. In this Act: 2-7 (1) "reclaimed wastewater" means domestic wastewater 2-8 or effluent that is under the direct control of a publicly owned 2-9 treatment works owner or operator which has been treated to a 2-10 quality suitable for beneficial use. 2-11 (2) "wastewater reclamation project" means the 2-12 construction, acquisition, improvement, extension or addition to 2-13 any wastewater reclamation and reclaimed water treatment, 2-14 transmission, storage, discharge, recharge, disposal or 2-15 distribution facility, or any similar or related wastewater 2-16 reclamation or reuse project or facility. 2-17 (3) Board means the Texas Water Development Board. 2-18 Section 15.704. Creation and Administration of Program. The 2-19 Wastewater Reclamation Fund shall be held separately from other 2-20 Funds by the Board outside the State Treasury to provide financial 2-21 assistance to political subdivisions for construction or 2-22 acquisition of wastewater reclamation projects. The Board shall 2-23 administer the Wastewater Reclamation Fund in the manner provided 2-24 by federal and state law and under the rules adopted by the Board. 2-25 Section 15.705. Financial Assistance From the Wastewater 3-1 Reclamation Fund. (a) The Board may use the Wastewater 3-2 Reclamation Fund to provide financial assistance to political 3-3 subdivisions for wastewater reclamation projects which shall 3-4 include, but not be limited to, the following: 3-5 (1) irrigation of restricted landscape areas as that 3-6 term is defined in Section 310.1 of the Texas Administrative Code, 3-7 including golf courses, cemeteries, roadway right-of-ways and 3-8 median dividers; 3-9 (2) irrigation of unrestricted landscape areas as that 3-10 term is defined in Section 310.1 of the Texas Administrative Code, 3-11 including parks, school yards, greenbelts and large multi-family 3-12 turf areas; 3-13 (3) use for commercial and industrial purposes, 3-14 including substitution for potable water for refineries, garment 3-15 finishers, commercial laundries and other industrial and commercial 3-16 complexes using more than twelve million gallons of potable water 3-17 per year; 3-18 (4) recharge into groundwater aquifers or basins; or 3-19 (5) any other water or wastewater project which the 3-20 Board determines constitutes beneficial wastewater reuse or results 3-21 in potable water conservation and which tends to preserve the 3-22 potable water supply available to the political subdivision. 3-23 (b) Two or more political subdivisions may jointly make an 3-24 application, or a regional authority may contract with one or more 3-25 political subdivisions as a joint venture for financial assistance. 4-1 (c) The Board may use the Wastewater Reclamation Fund to 4-2 provide financial assistance to political subdivisions as follows: 4-3 (1) to make loans from the Wastewater Reclamation Fund 4-4 which shall be set at a rate not more than a rate equal to fifty 4-5 percent of the interest rate paid by the State on the most recent 4-6 sale of State general obligation bonds for the Texas Water 4-7 Development Fund, with the rate to be computed according to the 4-8 true interest cost method and including interest free loans, at 4-9 terms not to exceed twenty years. Principal and interest payments 4-10 will begin not later than one year after completion of construction 4-11 or acquisition of any wastewater reclamation project and all loans 4-12 shall be fully amortized not later than twenty years after 4-13 completion of construction or acquisition of the wastewater 4-14 reclamation project; 4-15 (2) to buy or refinance the debt of political 4-16 subdivisions at or below market rates if necessary to facilitate 4-17 financing of a wastewater reclamation project; 4-18 (3) to guarantee or purchase insurance for the 4-19 obligations of political subdivisions if the guaranty or insurance 4-20 were to improve access to financial markets or reduce interest 4-21 rates on the obligations; 4-22 (4) as a source of revenue or security for the payment 4-23 of principal of or interest on bonds issued by the Board if the 4-24 proceeds of the sale of those bonds will be deposited in the 4-25 Wastewater Reclamation Fund; 5-1 (5) to provide loan guarantees to political 5-2 subdivisions to Accounts established by municipalities, 5-3 inter-municipal agencies or the federal government; 5-4 (6) to earn interest on the Wastewater Reclamation 5-5 Fund; and 5-6 (7) to pay the reasonable cost of administering the 5-7 Wastewater Reclamation Fund and conducting activities providing for 5-8 by any applicable law. 5-9 Section 15.706. Grants. (a) The Board may use the 5-10 Wastewater Reclamation Fund to make grants if the political 5-11 subdivision applying for the grant meets one or more of the 5-12 following conditions: 5-13 (1) The political subdivision is within a critical 5-14 groundwater area or has established, by a study which has been 5-15 approved by the Board, that it depends primarily on groundwater for 5-16 its water supply and the demand for groundwater resources will 5-17 exceed the available groundwater supply within fifty years from the 5-18 date of the grant application; 5-19 (2) The political subdivision's wastewater reclamation 5-20 project will directly benefit an economically distressed area as 5-21 that term is defined in Section 17.921(1) of this code; 5-22 (3) The political subdivision is located on an 5-23 international border, shares one or more common groundwater 5-24 aquifers or basins with a city located in Mexico and is 5-25 experiencing increased demands on its water supply due to 6-1 population and economic growth caused by the North American Free 6-2 Trade Agreement or other factors; and 6-3 (4) The Board determines that the wastewater 6-4 reclamation project will provide an alternate supply of water which 6-5 will significantly reduce potable water demands and the Board 6-6 determines that the revenue available to the political subdivision, 6-7 from all sources, is not sufficient for the repayment of a 6-8 low-interest loan. 6-9 (b) The Board may adopt rules to enable it to determine a 6-10 political subdivision's applicability for a grant under this 6-11 subchapter. 6-12 Section 15.707. Rules. The Board shall adopt necessary 6-13 rules to carry out this subchapter. 6-14 Section 15.708. Approval of Application. The Board may, by 6-15 resolution, approve an application for a low-interest loan if it 6-16 finds that in its opinion the revenue or taxes or both pledged by 6-17 the applicant will be sufficient to meet all the obligations 6-18 assumed by the political subdivision. The Board may approve a 6-19 grant, by resolution, if it finds that the applicant meets one or 6-20 more of the conditions for a grant under Section 15.706 above. A 6-21 program of water conservation for the more effective use of water 6-22 and a certification that the applicant's wastewater reclamation 6-23 project and the applicant meet all the requirements of applicable 6-24 law shall be required in the same manner as required for approval 6-25 of an application for financial assistance under Section 15.706 of 7-1 this code. 7-2 Section 15.709. Approval and Registration. The Board may 7-3 not buy or refinance any obligations or guarantee or purchase 7-4 insurance for obligations of a political subdivision that have not 7-5 been approved by the Attorney General and registered by the 7-6 Comptroller. 7-7 SECTION 2. The importance of this legislation and the 7-8 crowded condition of the calendars in both houses create an 7-9 emergency and an imperative public necessity that the 7-10 constitutional rule requiring bills to be read on three several 7-11 days in each house be suspended, and this rule is hereby suspended, 7-12 and that this Act take effect and be in force according to its 7-13 terms from and after its passage, and it is so enacted.