HBA-GUM C.S.S.B. 1862 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 1862 By: Ratliff Ways & Means 5/14/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, the Texas Water Development Board (board) lacks the authority to charge an administrative cost recovery fee to borrowers of the State Participation Program, which authorizes the state to purchase an interest, not to exceed 50 percent, in certain projects to accommodate future growth. In other infrastructure financing programs, such as the board's State Revolving Fund programs, administrative cost recovery fees are charged to participants in order to fully recover the state's administrative costs. C.S.S.B. 1862 authorizes the board to recover administrative costs incurred in making and administering certain agreements and projects. 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 16.142, Water Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter E, Chapter 16, Water Code, by adding Section 16.142, as follows: Sec. 16.142. RECOVERY OF ADMINISTRATIVE COSTS. (a) Authorizes the Texas Water Development Board (board) to charge an administrative fee to a political subdivision with which the board agrees to participate in a project under this subchapter (Acquisition and Development of Facilities). (b) Requires the board, by rule, to set the fee at an amount necessary to recover all costs incurred or to be incurred in administering the project over its life. Requires the state auditor to review fees charged by the board to determine whether the fees are set consistent with this subsection. (c) Authorizes the board to require the payment of the fee to be in one or more payments. (d) Requires the fees to be deposited as directed by the board for use in administering the program. SECTION 2. Effective date: September 1, 1999. SECTION 3. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute modifies proposed Section 16.142(b) in SECTION 1 by requiring the state auditor to review fees charged by the board to determine whether the fees are set consistent with that section.