SRC-HRD S.B. 844 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 844
By: Truan
Finance
4-23-97
As Filed


DIGEST 

The International Relations, Trade & Technology Committee study on the
progress of the correction of problems in the colonias found that the
Economically Distressed Areas Program (EDAP), which builds water and sewer
service systems in the colonias, is making good progress.  However, EDAP
does not provide the connections between residences and the water or sewer
systems.  It only provides the systems.   

S.B. 844 would allocate $2 million in federal community development block
grants to be used to pay for hookups for homes in the colonias where EDAP
has provided water and wastewater systems, or where those systems will be
finished promptly.  This set-aside would last until the EDAP program is
complete, and all of the $250 million in bonds approved by the Texas
voters is depleted.  The committee also found that a low rate of hookups
could endanger the financial viability of some colonias projects.  An
average of 13 percent of the water customers and 63 percent of sewer
service customers have not yet connected to EDAP systems in their
communities.  Part of that has been corrected with a mandatory connection
requirement.  But if a family does not have the money, there is little
that can be done.  Once these homes are connected, the additional revenue
to the utility systems in the border region will be as much as $15 million
by 2002.  The colonias set-aside will work in conjunction with the Water
Development Board's Colonias Plumbing Loan Program.  The bill will also
streamline the application process by providing for a coordinated effort
between the Texas Department of Housing and Community Affairs and the
Water Development Board.   

PURPOSE

As proposed, S.B. 844 authorizes the use of federal community development
block grant funds to provide financial assistance in economically
distressed areas to pay for residential service lines, hookups, and
plumbing improvements associated with being connected to a water supply or
sewer service system financed under the economically distressed areas
program. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Texas Department of Housing and
Community Affairs under SECTION 1 (Section 2306.098(c), Government Code)
of this bill.  

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 2306.098, Government Code, by adding Subsection
(c), to require the comptroller each fiscal year to deposit $2 million of
the federal money received by the state under the community development
block grant program in an account in the general revenue fund to be
administered by the Texas Department of Housing and Community Affairs
(department) under this section.  Authorizes money in the account to be
used only to provide financial assistance in economically distressed areas
to pay for residential service lines, hookups, and plumbing improvements
associated with being connected to a water supply or sewer service system
financed under the economically distressed areas program established under
Chapter 16J, Water Code, and Chapter  17K, Water Code.  Requires the
department, by rule, to provide that an application for assistance under
the program authorized by this subsection may be submitted after
construction of the water supply or sewer service system begins.  Requires
the department to approve or disapprove a timely application before
construction of the water supply or sewer service system is completed in
order to eliminate delay in hookups once construction is completed.
Requires the department and  the Texas Water Development Board to
coordinate and combine resources to streamline the application process for
hookup funds under this subsection and under Chapter 15L, Water Code, and
to share information elicited by each agency's application procedure in
order to eliminate the need for applicants to complete different forms
with similar information.  Defines "economically distressed area." 

SECTION 2. Effective date: September 1, 1997.

SECTION 3. Emergency clause.