HBA-TYH C.S.H.B. 1260 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1260 By: Hill Urban Affairs 4/19/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, state programs associated with colonias are applicable only in the border region of Texas. Meetings held throughout Texas during the interim between the 75th and 76th legislatures revealed that there are colonias all over the state, not just near the border. Specifically, there are a limited number of colonias located in Harris and Dallas counties. C.S.H.B. 1260 sets forth provisions and procedures for financial assistance to be provided to disadvantaged communities through the financial assistance account of the Texas Water Development Fund II. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Water Development Board in SECTION 1 (Section 17.999, Water Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 17, Water Code, by adding Subchapter M, as follows: SUBCHAPTER M. ASSISTANCE TO DISADVANTAGED COMMUNITIES Sec. 17.991. DEFINITIONS. Defines "disadvantaged community" and "sewer service facilities." Sec. 17.992. APPLICATION FOR FINANCIAL ASSISTANCE. Authorizes a political subdivision to apply to the Texas Water Development Board (board) for financial assistance for the construction, acquisition, or improvement of water supply projects and sewer service facilities to serve disadvantaged communities by submitting to the board an application on a form adopted by the board and a plan for providing water supply or sewer services to a disadvantaged community under rules adopted by the board. Sec. 17.993. CONSIDERATION OF APPLICATION. Requires the board, in reviewing an application, to consider the need of the disadvantaged community for the water supply project or sewer service facilities, the availability of revenue to the political subdivision from all sources for the ultimate repayment of the cost of the water supply project or sewer service facilities, and the need for a low-interest or zero interest loan to finance the water supply project or sewer service facilities. Sec. 17.994. APPROVAL OF APPLICATION. Authorizes the board to approve an application if, after considering the factors listed in Section 17.993 and any other relevant factors, the board determines that the public interest requires state assistance in the project, the applicant cannot reasonably finance the water supply project or sewer service facilities without state assistance, and in the board's opinion the revenue or taxes pledged by the applicant will be sufficient to meet all the obligations assumed by the applicant during the succeeding period of not more than 50 years. Provides that before the board grants an application or provides any funds under an application, an applicant must meet the requirements of Section 17.125 (Approval of Application). Sec. 17.995. METHOD OF FINANCIAL ASSISTANCE. Authorizes the board, to the extent provided by legislative appropriation, to make loans available from funds in the financial assistance account of the Texas Water Development Fund II at low-interest or zerointerest loan rates to political subdivisions for the construction, acquisition, or improvement of water supply projects and sewer service facilities to serve disadvantaged communities. Authorizes the board to purchase political subdivision bonds in the financial assistance account of the Texas Water Development Fund II as a means of providing financial assistance. Authorizes the board to provide financial assistance in any other manner that it considers feasible including through specified contracts. Sec. 17.996. FINDINGS REGARDING PERMITS. Prohibits the board from delivering funds under an application for financial assistance until the board makes the findings described in Sections 17.123 (Findings Regarding Permits) and 17.278 (Findings Regarding Permits). Sec. 17.997. CONTRACT MANAGEMENT STANDARDS. Provides that the Uniform Grant and Contract Management Act of 1981 (Chapter 783, Government Code) does not apply to financial assistance provided under this subchapter. Sec. 17.998. AUTHORITY TO PARTICIPATE IN PROGRAM. (a) Authorizes a political subdivision to exercise any authority necessary to participate in a program and carry out the terms and conditions under which the funds or the financial assistance is provided. (b) Authorizes a political subdivision other than a nonprofit water supply corporation eligible for financial assistance, in addition to any other authority to issue bonds or other obligations or incur any debt, to issue bonds payable from and secured by a pledge of the revenues derived or to be derived from the operation of water supply or sewer service systems for the purpose of acquiring, constructing, improving, extending, or repairing water supply projects or sewer service facilities. Requires the bonds to be issued in accordance with, and authorizes a political subdivision to exercise the powers granted by the specified statutes and by other laws of the state. Sec. 17.999. RULEMAKING AUTHORITY. Requires the board to adopt necessary rules to accomplish the purposes of this subchapter. SECTION 2. Amends Section 17.172, Water Code, as follows: Sec. 17.172. APPLICABILITY. Provides that this subchapter applies to financial assistance made available under Subchapters D (Assistance to Political Subdivisions for Water Supply Projects), F (Financial Assistance for Water Quality Enhancement Purposes), G (Financial Assistance for Flood Control), K (Assistance to Economically Distressed Areas for Water Supply and Sewer Service Projects), L (Water Financial Assistance Bond Program), and M of this chapter, rather than Subchapters D, F, G, and K of this chapter, from: _the water supply account, the water quality enhancement account, the flood control account, and the economically distressed areas account of the Texas Water Development Fund, or _the economically distressed areas program account and the financial assistance account of the Texas Water Development Fund II. SECTION 3.Effective date: September 1, 1999. SECTION 4.Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies the original bill by replacing the proposed text of SECTION 1 (redefining "colonia.") with new text, adding new SECTION 2, and redesignating SECTIONS 2 (effective date) and 3 (emergency clause) of the original to SECTIONS 3 and 4. The substitute further modifies the original bill, as follows: SECTION 1. Amends Chapter 17, Water Code, by adding new Subchapter M (Assistance to Disadvantaged Communities). Chapter 17 concerns public funding for water development and supply projects. New Subchapter M sets forth provisions and procedures for financial assistance to be provided to disadvantaged communities through the financial assistance account of the Texas Water Development Fund II. For a complete analysis of new Subchapter M, please see the Sectionby-Section portion of this document. SECTION 2. Amends Section 17.172, Water Code, as follows: Sec. 17.172. APPLICABILITY. Provides that this subchapter applies to financial assistance made available under Subchapters D (Assistance to Political Subdivisions for Water Supply Projects), F (Financial Assistance for Water Quality Enhancement Purposes), G (Financial Assistance for Flood Control), K (Assistance to Economically Distressed Areas for Water Supply and Sewer Service Projects), L (Water Financial Assistance Bond Program), and M of this chapter, rather than Subchapters D, F, G, and K of this chapter, from: _the water supply account, the water quality enhancement account, the flood control account, and the economically distressed areas account of the Texas Water Development Fund, or _the economically distressed areas program account and the financial assistance account of the Texas Water Development Fund II.