77R11805 QS-D                           
         By Chisum, Counts, Bosse, Gallego, McCall             H.B. No. 3017
         Substitute the following for H.B. No. 3017:
         By Counts                                         C.S.H.B. No. 3017
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the review and functions of the Texas Water Development
 1-3     Board.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 6.013, Water Code, is amended to read as
 1-6     follows:
 1-7           Sec. 6.013.  SUNSET PROVISION. The Texas Water Development
 1-8     Board is subject to review under Chapter 325, Government Code
 1-9     (Texas Sunset Act), but is not abolished under that chapter.  The
1-10     board shall be reviewed during the period in which state agencies
1-11     abolished in 2013 [2001] and every 12th year after 2013 [2001] are
1-12     reviewed.
1-13           SECTION 2. Section 6.052(c), Water Code, is amended to read
1-14     as follows:
1-15           (c)  Appointments to the board shall be made without regard
1-16     to the race, color, disability [handicap], sex, religion, age, or
1-17     national origin of the appointees.
1-18           SECTION 3. Sections 6.054, 6.057, and 6.058, Water Code, are
1-19     amended to read as follows:
1-20           Sec. 6.054.  REMOVAL OF BOARD MEMBERS. (a)  It is a ground
1-21     for removal from the board that [if] a member:
1-22                 (1)  does not have at the time of taking office
1-23     [appointment] the qualifications required for appointment to the
1-24     board;
 2-1                 (2)  does not maintain during [the] service on the
 2-2     board the qualifications required for appointment to the board;
 2-3                 (3)  is ineligible for membership under [violates a
 2-4     prohibition established by] Sections 6.053, 6.057, and 6.058 [of
 2-5     this code];
 2-6                 (4)  cannot, because of illness or disability, [is
 2-7     unable to] discharge the member's [his] duties for a substantial
 2-8     part [portion] of the member's term [for which he was appointed
 2-9     because of illness or disability]; or
2-10                 (5)  is absent from more than half [one-half] of the
2-11     regularly scheduled board meetings that the member is eligible to
2-12     attend during a [each] calendar year without an excuse approved[,
2-13     except when the absence is excused] by a majority vote of the
2-14     board.
2-15           (b)  The validity of an action of the board is not affected
2-16     by the fact that it is [was] taken when a ground for removal of a
2-17     board member exists [of the board existed].
2-18           (c)  If the executive administrator [a board member] has
2-19     knowledge that a potential ground for removal exists, the executive
2-20     administrator [he] shall notify the chairman of the board of the
2-21     potential [that] ground.  The chairman of the board shall then
2-22     notify the governor and the attorney general that a potential
2-23     ground for removal exists.  If the potential ground for removal
2-24     includes the chairman of the board, the executive administrator
2-25     shall notify the next highest ranking officer of the board, who
2-26     shall then notify the governor and the attorney general that a
2-27     potential ground for removal exists.
 3-1           Sec. 6.057.  CONFLICT OF INTEREST. (a) In this section,
 3-2     "Texas trade association" means a cooperative and voluntarily
 3-3     joined association of business or professional competitors in this
 3-4     state designed to assist its members and its industry or profession
 3-5     in dealing with mutual business or professional problems and in
 3-6     promoting their common interest.
 3-7           (b)  A person may not be a member of the board and may not be
 3-8     a board employee employed in a "bona fide executive,
 3-9     administrative, or professional capacity," as that phrase is used
3-10     for purposes of establishing an exemption to the overtime
3-11     provisions of the federal Fair Labor Standards Act of 1938 (29
3-12     U.S.C. Section 201 et seq.), and its subsequent amendments, if:
3-13                 (1)  the person is an officer, employee, or paid
3-14     consultant of a Texas trade association in the field of water
3-15     planning or water financing; or
3-16                 (2)  the person's spouse is an officer, employee, or
3-17     paid consultant of a Texas trade association in the field of water
3-18     planning or water financing.  [An officer, employee, or paid
3-19     consultant of a trade association in an industry regulated by the
3-20     board may not be a member or employee of the board, nor may a
3-21     person who cohabits with or is the spouse of an officer, managerial
3-22     employee, or paid consultant of a trade association in an industry
3-23     regulated by the board be a member of the board or an employee of
3-24     the board grade 17 or over, including exempt employees, according
3-25     to the position classification schedule under the General
3-26     Appropriations Act.]
3-27           Sec. 6.058.  LOBBYIST PROHIBITION. A person may not be a
 4-1     member of the board or act as the general counsel to the board if
 4-2     the person [who] is required to register as a lobbyist under
 4-3     Chapter 305, Government Code, because of the person's [by virtue of
 4-4     his] activities for compensation [in or] on behalf of a profession
 4-5     related to the operation of the board [may not serve as a member of
 4-6     the board or act as the general counsel to the board].
 4-7           SECTION 4. Section 6.060, Water Code, is amended by adding
 4-8     Subsection (d) to read as follows:
 4-9           (d)  The board shall meet annually with the board of the
4-10     Texas Department of Housing and Community Affairs to address the
4-11     agencies' progress in meeting the needs of colonia residents and to
4-12     receive an update and recommendations from the Colonia Water and
4-13     Wastewater Infrastructure Advisory Committee, as provided by
4-14     Section 2306.5851, Government Code.  For purposes of this
4-15     subsection, "colonia" has the meaning assigned by Section 2306.581,
4-16     Government Code.
4-17           SECTION 5. Subchapter C, Chapter 6, Water Code, is amended by
4-18     adding Section 6.062 to read as follows:
4-19           Sec. 6.062.  REQUIRED TRAINING FOR BOARD MEMBERS. (a)  A
4-20     person who is appointed to and qualifies for office as a member of
4-21     the board may not vote, deliberate, or be counted as a member in
4-22     attendance at a meeting of the board until the person completes a
4-23     training program that complies with this section.
4-24           (b)  The training program must provide the person with
4-25     information regarding:
4-26                 (1)  the legislation that created the board;
4-27                 (2)  the programs operated by the board;
 5-1                 (3)  the role and functions of the board;
 5-2                 (4)  the rules of the board, with an emphasis on the
 5-3     rules that relate to disciplinary and investigatory authority;
 5-4                 (5)  the current budget for the board;
 5-5                 (6)  the results of the most recent formal audit of the
 5-6     board;
 5-7                 (7)  the requirements of:
 5-8                       (A)  the open meetings law, Chapter 551,
 5-9     Government Code;
5-10                       (B)  the public information law, Chapter 552,
5-11     Government Code;
5-12                       (C)  the administrative procedure law, Chapter
5-13     2001, Government Code; and
5-14                       (D)  other laws relating to public officials,
5-15     including conflict of interest laws; and
5-16                 (8)  any applicable ethics policies adopted by the
5-17     board or the Texas Ethics Commission.
5-18           (c)  A person appointed to the board is entitled to
5-19     reimbursement, as provided by the General Appropriations Act, for
5-20     the travel expenses incurred in attending the training program
5-21     regardless of whether the attendance at the program occurs before
5-22     or after the person qualifies for office.
5-23           SECTION 6. Section 6.106, Water Code, is amended to read as
5-24     follows:
5-25           Sec. 6.106.  STANDARDS OF CONDUCT. The executive
5-26     administrator or the executive administrator's designee [board]
5-27     shall provide to [its] members of the board and to agency[,
 6-1     appointees, and] employees, as often as is necessary, information
 6-2     regarding the requirements for office or employment [their
 6-3     qualifications] under this code, including information regarding a
 6-4     person's [and their] responsibilities under applicable laws
 6-5     relating to standards of conduct for state officers or [and]
 6-6     employees.
 6-7           SECTION 7. Subchapter D, Chapter 6, Water Code, is amended by
 6-8     adding Sections 6.110 and 6.111 to read as follows:
 6-9           Sec. 6.110.  CAPITAL SPENDING PLAN. (a)  Each biennium, the
6-10     executive administrator shall develop and submit to the board for
6-11     its approval a capital spending plan for state-funded programs,
6-12     including the Texas water development  fund II, the agricultural
6-13     water conservation fund, and the water assistance fund.
6-14           (b)  The plan must:
6-15                 (1)  identify water funding needs in the state and set
6-16     forth a basis for allocating state-supported funding to address
6-17     those needs; and
6-18                 (2)  if applicable, provide details about:
6-19                       (A)  the reasons  state-supported funding was not
6-20     allocated according to the methodologies identified in prior plans;
6-21     and
6-22                       (B)  any adjustments to the plan from prior plans
6-23     in response to changing water priorities.
6-24           (c)  In developing the plan, the executive administrator
6-25     shall consider:
6-26                 (1)  any commission compliance issues;
6-27                 (2)  information derived from facility needs
 7-1     assessments or other water and wastewater needs assessments;
 7-2                 (3)  regional planning group plans required under
 7-3     Section 16.053; and
 7-4                 (4)  any other appropriate information.
 7-5           (d)  The board shall consider the plan at a regularly
 7-6     scheduled meeting and, on approval, submit it to the legislature
 7-7     and the Legislative Budget Board before January 1 of each
 7-8     odd-numbered year.  The board may include the plan as part of its
 7-9     legislative appropriations request.
7-10           Sec. 6.111.  SEPARATION OF RESPONSIBILITIES. The board shall
7-11     develop and implement policies that clearly separate the
7-12     policy-making responsibilities of the board and the management
7-13     responsibilities of the executive administrator and the staff of
7-14     the board.
7-15           SECTION 8. Sections 6.154, 6.155, and 6.188, Water Code, are
7-16     amended to read as follows:
7-17           Sec. 6.154.  COMPLAINT FILE. (a)  The board shall maintain a
7-18     file on each written complaint filed with the board.  The file must
7-19     include:
7-20                 (1)  the name of the person who filed the complaint;
7-21                 (2)  the date the complaint is received by the board;
7-22                 (3)  the subject matter of the complaint;
7-23                 (4)  the name of each person contacted in relation to
7-24     the complaint;
7-25                 (5)  a summary of the results of the review or
7-26     investigation of the complaint; and
7-27                 (6)  an explanation of the reason the file was closed,
 8-1     if the agency closed the file without taking action other than to
 8-2     investigate the complaint.
 8-3           (b)  The board shall provide to the person filing the
 8-4     complaint and to each person who is a subject of the complaint a
 8-5     copy of the board's policies and procedures relating to complaint
 8-6     investigation and resolution [keep an information file about each
 8-7     complaint filed with the board relating to an entity regulated by
 8-8     the board].
 8-9           Sec. 6.155.  NOTICE OF COMPLAINT. The [If a written complaint
8-10     is filed with the board relating to an entity regulated by the
8-11     board, the] board, at least [as frequently as] quarterly [and]
8-12     until final disposition of the complaint, shall notify the person
8-13     filing the complaint and each person who is a subject of [parties
8-14     to] the complaint of the status of the investigation [complaint]
8-15     unless the notice would jeopardize an undercover investigation.
8-16           Sec. 6.188.  EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a)  The
8-17     executive administrator or the executive administrator's [his]
8-18     designee shall prepare and maintain a written policy statement that
8-19     implements [to assure implementation of] a program of equal
8-20     employment opportunity to ensure that all personnel decisions
8-21     [whereby all personnel transactions] are made without regard to
8-22     race, color, disability [handicap], sex, religion, age, or national
8-23     origin.
8-24           (b)  The policy statement must include:
8-25                 (1)  personnel policies, including policies relating to
8-26     recruitment, evaluation, selection, [appointment,] training, and
8-27     promotion of personnel, that show the intent of the board to avoid
 9-1     the unlawful employment practices described by Chapter 21, Labor
 9-2     Code; and
 9-3                 (2)  an [a comprehensive] analysis of the extent to
 9-4     which the composition of the board's personnel is in accordance
 9-5     with state and federal law and a description of reasonable methods
 9-6     to achieve compliance with state and federal law.
 9-7           (c)  The policy statement must:
 9-8                 (1)  be updated annually;
 9-9                 (2)  be reviewed by the state Commission on Human
9-10     Rights for compliance with Subsection (b)(1); and
9-11                 (3)  be filed with the governor's office [work force
9-12     that meets federal and state guidelines;]
9-13                 [(3)  procedures by which a determination can be made
9-14     of significant underutilization in the board's work force of all
9-15     persons for whom federal or state guidelines encourage a more
9-16     equitable balance; and]
9-17                 [(4)  reasonable methods to address appropriately areas
9-18     of significant underutilization in the board's work force of all
9-19     persons for whom federal or state guidelines encourage a more
9-20     equitable balance.]
9-21           [(b)  The policy statement shall be filed with the governor's
9-22     office before November 1, 1985, cover an annual period, and be
9-23     updated at least annually.  The governor's office shall develop a
9-24     biennial report to the legislature based on the information
9-25     submitted.  This report may be made individually or as a part of
9-26     other biennial reports made to the legislature].
9-27           SECTION 9. Subchapter F, Chapter 6, Water Code, is amended by
 10-1    adding Section 6.196 to read as follows:
 10-2          Sec. 6.196.  TRAINING ON STATE EMPLOYEE INCENTIVE PROGRAM.
 10-3    The executive administrator or the executive administrator's
 10-4    designee shall provide to agency employees information and training
 10-5    on the benefits and methods of participation in the state employee
 10-6    incentive program under Subchapter B, Chapter 2108, Government
 10-7    Code.
 10-8          SECTION 10. Section 15.011(b), Water Code, is amended to read
 10-9    as follows:
10-10          (b)  After notice and hearing and subject to any limitations
10-11    established by the General Appropriations Act, the board may
10-12    transfer money from the fund to the loan fund created under
10-13    Subchapter C of this chapter, the storage acquisition fund created
10-14    under Subchapter E of this chapter, the research and planning fund
10-15    created under Subchapter F of this chapter, the hydrographic survey
10-16    account created under Subchapter M of this chapter, provided the
10-17    hydrographic survey account transfer does not exceed $425,000,
10-18    [and] the aquatic vegetation management fund created under
10-19    Subchapter N of this chapter, and the rural community water and
10-20    wastewater loan fund created under Subchapter O of this chapter.
10-21          SECTION 11. Section 15.012(c), Water Code, is amended to read
10-22    as follows:
10-23          (c)  Money appropriated to the fund by the legislature for a
10-24    specific purpose stated in Subchapter C, E, F, M, [or] N, or O of
10-25    this chapter shall be placed in the appropriate fund created by
10-26    that subchapter.
10-27          SECTION 12. Section 15.102(b), Water Code, is amended to read
 11-1    as follows:
 11-2          (b)  The loan fund may also be used by the board to provide
 11-3    grants for projects:
 11-4                (1)  that include supplying water and wastewater
 11-5    services in economically distressed areas, including projects
 11-6    involving retail distribution of those services;
 11-7                (2)  for which federal grant funds are placed in the
 11-8    loan fund; or
 11-9                (3)  on specific legislative appropriation for those
11-10    projects.
11-11          SECTION 13. Section 15.104, Water Code, is amended to read as
11-12    follows:
11-13          Sec. 15.104.  FINDINGS REGARDING PERMITS. (a)  The board
11-14    shall not release funds for the construction of that portion of a
11-15    project that proposes surface water or groundwater development
11-16    [deliver funds pursuant to an application for financial assistance
11-17    from the loan fund] until the executive administrator makes a
11-18    written finding:
11-19                (1)  that an applicant proposing surface-water
11-20    development has the necessary water right authorizing it to
11-21    appropriate and use the water that the project will provide; or
11-22                (2)  that an applicant proposing underground water
11-23    development has the right to use water that the project will
11-24    provide.
11-25          (b)  The board may release funds for the costs of planning,
11-26    engineering, architectural, legal, title, fiscal, or economic
11-27    investigation, studies, surveys, or designs before making the
 12-1    finding required under Subsection (a) if the executive
 12-2    administrator determines that a reasonable expectation exists that
 12-3    the finding will be made before the release of funds for
 12-4    construction.
 12-5          (c)  If an applicant includes a proposal for a waste water
 12-6    treatment plant, the board may not deliver funds for the waste
 12-7    water treatment plant until the applicant has received a permit for
 12-8    construction and operation of the waste water treatment plant and
 12-9    approval of the plans and specifications from the commission. If
12-10    the applicant proposes a waste water treatment plant that is
12-11    located outside of the jurisdiction of this state and that is not
12-12    subject to the permitting authority of the commission, the board
12-13    must review the plans and specifications in coordination with the
12-14    commission and find that the waste water treatment plant is capable
12-15    of producing effluent that will meet federal and state-approved
12-16    water quality standards.
12-17          SECTION 14. Section 15.601(a), Water Code, is amended to read
12-18    as follows:
12-19          (a)  The state water pollution control revolving fund shall
12-20    be administered by the board under this subchapter and rules
12-21    adopted by the board.  The fund shall be used to provide financial
12-22    assistance to political subdivisions for construction of treatment
12-23    works and to persons for nonpoint source pollution control and
12-24    abatement projects under Section 15.603(h), in accordance with the
12-25    capitalization grant program established under the Federal Water
12-26    Pollution Control Act (33 U.S.C. 1251 et seq.).
12-27          SECTION 15. Section 15.603, Water Code, is amended by
 13-1    amending Subsection (a) and adding Subsection (h) to read as
 13-2    follows:
 13-3          (a)  The revolving fund is held separately from other funds
 13-4    by the board outside the State Treasury to provide financial
 13-5    assistance to political subdivisions for construction of treatment
 13-6    works and to persons for nonpoint source pollution control and
 13-7    abatement projects under Subsection (h).
 13-8          (h)  The board may establish a separate account in the
 13-9    revolving fund, to be used solely for providing financial
13-10    assistance to persons for nonpoint source pollution control and
13-11    abatement projects.  The account shall be composed solely of funds
13-12    appropriated by the legislature, funds provided as gifts or grants
13-13    by the United States, interest earnings on amounts credited to the
13-14    account, and repayments of loans made from the account.  The board
13-15    shall adopt rules establishing the criteria for eligibility  and
13-16    the terms of assistance for persons that receive financial
13-17    assistance from the account.
13-18          SECTION 16. Section 15.804(a), Water Code, is amended to read
13-19    as follows:
13-20          (a)  On the request of a political subdivision or agency of
13-21    this state or a neighboring state or a federal agency, the board
13-22    may perform [for the political subdivision] a hydrographic survey
13-23    in this state or outside of this state if the information collected
13-24    will benefit this state.  The board may perform a survey under this
13-25    section:
13-26                (1)  to determine:
13-27                      (A)  reservoir storage capacity;
 14-1                      (B)  sedimentation levels;
 14-2                      (C)  rates of sedimentation;
 14-3                      (D)  projected water supply availability; or
 14-4    [and]
 14-5                      (E)  potential mitigative measures;  [and]
 14-6                (2)  to conduct [for] other bathymetric studies; or
 14-7                (3)  to collect information relating to water-bearing
 14-8    formations.
 14-9          SECTION 17. Chapter 15, Water Code, is amended by adding
14-10    Subchapter O to read as follows:
14-11           SUBCHAPTER O.  PILOT PROGRAM FOR WATER AND WASTEWATER
14-12                        LOANS FOR RURAL COMMUNITIES
14-13          Sec. 15.901.  DEFINITIONS. In this subchapter:
14-14                (1)  "Fund" means the rural community water and
14-15    wastewater loan fund.
14-16                (2)  "Political subdivision" means a municipality, a
14-17    county, or a district or authority created under Section 52,
14-18    Article III, or Section 59, Article XVI, Texas Constitution.
14-19                (3)  "Rural community" means:
14-20                      (A)  a municipality or county with a population
14-21    of less than 5,000; or
14-22                      (B)  a district or authority created under
14-23    Section 52, Article III, or Section 59, Article XVI, Texas
14-24    Constitution, with a population of less than 5,000 that is located
14-25    outside the boundaries or extraterritorial jurisdiction of a
14-26    municipality.
14-27          Sec. 15.902.  RURAL COMMUNITY WATER AND WASTEWATER LOAN FUND.
 15-1    (a)  The rural community water and wastewater loan fund is an
 15-2    account in the water assistance fund.
 15-3          (b)  The fund consists of:
 15-4                (1)  money transferred to the fund from the water
 15-5    assistance fund under Section 15.011(b);
 15-6                (2)  proceeds from the sale of political subdivision
 15-7    bonds by the board to the Texas Water Resources Finance Authority
 15-8    as provided by Section 17.0871; and
 15-9                (3)  repayments of loans made from the fund.
15-10          Sec. 15.903.  FINANCIAL ASSISTANCE. (a)  The fund may be used
15-11    by the board to provide loans of financial assistance to rural
15-12    communities for the construction, acquisition, or improvement of
15-13    water and wastewater projects.
15-14          (b)  The board may make financial assistance available to a
15-15    rural community by entering into a loan agreement and promissory
15-16    note with the rural community, as provided by this subchapter.  A
15-17    rural community may apply for and accept the financial assistance.
15-18          (c)  The loan agreement must provide for the payment of
15-19    principal and interest on the debt incurred for the project at a
15-20    rate to be determined by the board.
15-21          (d)  The loan agreement must provide for the issuance of a
15-22    promissory note payable to the board to evidence the obligation of
15-23    the rural community to repay the loan made in accordance with the
15-24    terms of the loan agreement.
15-25          (e)  A loan provided under this subchapter may not exceed
15-26    $250,000 for each project, and the term of a loan may not exceed 20
15-27    years.
 16-1          Sec. 15.904.  USE OF SALES TAX AS LOAN SECURITY. (a)  A rural
 16-2    community that is a municipality or county may pledge a percentage
 16-3    of the sales and use tax revenue received under Chapter 321 or 323,
 16-4    Tax Code, as applicable, to the payment of debt incurred under a
 16-5    loan agreement entered into with the board under this subchapter if
 16-6    a majority of the voters voting at an election called and held for
 16-7    that purpose authorize the municipality or county to pledge a
 16-8    portion of that revenue for that purpose.
 16-9          (b)  Sections 321.506, 321.507, and 323.505, Tax Code, do not
16-10    apply to taxes pledged under this subchapter.
16-11          Sec. 15.905.  REVIEW AND APPROVAL OF LOAN AGREEMENT BY
16-12    ATTORNEY GENERAL. (a)  Before a loan agreement may become
16-13    effective, a record of the proceedings of the board and the rural
16-14    community authorizing the execution of the loan agreement, the loan
16-15    agreement, the promissory note, and any contract providing revenue
16-16    or security to pay the promissory note must be submitted to the
16-17    attorney general for review and approval.
16-18          (b)  If the attorney general finds that the loan agreement
16-19    and the promissory note are valid and binding obligations of the
16-20    rural community, the attorney general shall approve the documents
16-21    and deliver them to the comptroller, the board, and the rural
16-22    community, together with a copy of the attorney general's legal
16-23    opinion stating that approval.
16-24          Sec. 15.906.  REGISTRATION. On receipt of the documents
16-25    required by Section 15.905(b), the comptroller shall register the
16-26    record of the proceedings relating to the execution of a loan
16-27    agreement.
 17-1          Sec. 15.907.  VALIDITY AND INCONTESTABILITY. On approval by
 17-2    the attorney general and registration by the comptroller, the loan
 17-3    agreement, the promissory note, a contract providing revenue or
 17-4    security, and any other obligation evidencing the debt are
 17-5    incontestable in a court and are valid, binding, and enforceable
 17-6    according to their terms.
 17-7          Sec. 15.908.  ENFORCEMENT BY MANDAMUS. Payment of obligations
 17-8    incurred under a loan agreement and other requirements of this
 17-9    subchapter may be enforced in a court by mandamus or other
17-10    appropriate proceedings.
17-11          Sec. 15.909.  RULES. The board shall adopt necessary rules to
17-12    administer this subchapter, including rules establishing procedures
17-13    for application for and award of loans.
17-14          Sec. 15.910.  APPLICATION FOR ASSISTANCE. (a)  In an
17-15    application to the board for financial assistance from the fund,
17-16    the rural community must include:
17-17                (1)  the name of the rural community and its principal
17-18    officers;
17-19                (2)  a citation of the law under which the rural
17-20    community operates and was created;
17-21                (3)  a description of the water or wastewater project
17-22    for which the financial assistance will be used;
17-23                (4)  the total cost of the project;
17-24                (5)  the amount of state financial assistance
17-25    requested;
17-26                (6)  the plan for repaying the total cost of the
17-27    project; and
 18-1                (7)  any other information the board requires in order
 18-2    to perform its duties and to protect the public interest.
 18-3          (b)  The board may not accept an application for a loan of
 18-4    financial assistance from the fund unless it is submitted in
 18-5    affidavit form by the officials of the rural community.  The board
 18-6    shall prescribe the affidavit form in its rules.
 18-7          (c)  If a rural community has a program of water
 18-8    conservation, the rural community shall state in the application
 18-9    that the rural community has such a program.
18-10          Sec. 15.911.  FINDINGS REGARDING PERMITS. (a)  The board may
18-11    not release funds for the construction phase of that portion of a
18-12    project that proposes surface water or groundwater development
18-13    until the executive administrator makes a written finding:
18-14                (1)  that a rural community proposing surface water
18-15    development has the necessary water right authorizing it to
18-16    appropriate and use the water that the project will provide; or
18-17                (2)  that a rural community proposing underground water
18-18    development has the right to use water that the project will
18-19    provide.
18-20          (b)  If a rural community includes a proposal for a
18-21    wastewater treatment project, the board may not release funds for
18-22    the project construction until the rural community has received a
18-23    permit for the construction and operation of the project and
18-24    approval of the plans and specifications for the project in a
18-25    manner that will satisfy commission requirements for design
18-26    criteria and permit conditions that apply to construction
18-27    activities.
 19-1          Sec. 15.912.  CONSIDERATIONS IN ACTING ON APPLICATION. In
 19-2    acting on an application for financial assistance, the board shall
 19-3    consider:
 19-4                (1)  the needs of the area to be served by the project
 19-5    and the benefit of the project to the area in relation to the needs
 19-6    of other areas requiring state assistance in any manner and the
 19-7    benefits of those projects to the other areas;
 19-8                (2)  the availability of revenue to the rural community
 19-9    from all sources for the ultimate repayment of the cost of the
19-10    project, including all interest;
19-11                (3)  the relationship of the project to overall
19-12    statewide needs; and
19-13                (4)  any other factors that the board considers
19-14    relevant.
19-15          Sec. 15.913.  APPROVAL OF APPLICATION. The board by
19-16    resolution may approve an application for a loan if, after
19-17    considering the factors listed in Section 15.912 and any other
19-18    relevant factors, the board finds that:
19-19                (1)  the public interest requires state participation
19-20    in the project; and
19-21                (2)  the revenue or taxes pledged by the rural
19-22    community will be sufficient to meet all the obligations assumed by
19-23    the rural community during the succeeding period of not more than
19-24    20 years.
19-25          Sec. 15.914.  CONSTRUCTION CONTRACT REQUIREMENTS. The
19-26    governing body of each rural community receiving financial
19-27    assistance from the board under this subchapter shall require in
 20-1    all contracts for the construction of a project that:
 20-2                (1)  each bidder furnish a bid guarantee equivalent to
 20-3    five percent of the bid price;
 20-4                (2)  each contractor awarded a construction contract
 20-5    furnish performance and payment bonds as follows:
 20-6                      (A)  the performance bond must include guarantees
 20-7    that work done under the contract will be completed and performed
 20-8    according to approved plans and specifications and in accordance
 20-9    with sound construction principles and practices; and
20-10                      (B)  the performance and payment bonds must be in
20-11    a penal sum of not less than 100 percent of the contract price and
20-12    remain in effect for one year after the date of approval by the
20-13    engineer of the political subdivision;
20-14                (3)  payment be made in partial payments as the work
20-15    progresses;
20-16                (4)  each partial payment not exceed 95 percent of the
20-17    amount due at the time of the payment as shown by the engineer of
20-18    the project, but, if the project is substantially complete, a
20-19    partial release of the five percent retainage may be made by the
20-20    rural community with approval of the executive administrator;
20-21                (5)  payment of the retainage remaining due on
20-22    completion of the contract be made only after:
20-23                      (A)  approval by the engineer for the rural
20-24    community as required under the bond proceedings;
20-25                      (B)  approval by the governing body of the rural
20-26    community by a resolution or other formal action; and
20-27                      (C)  certification by the executive administrator
 21-1    in accordance with the rules of the board that the work to be done
 21-2    under the contract has been completed and performed in a
 21-3    satisfactory manner and in accordance with sound engineering
 21-4    principles and practices;
 21-5                (6)  no valid approval be granted unless the work done
 21-6    under the contract has been completed and performed in a
 21-7    satisfactory manner according to approved plans and specifications;
 21-8    and
 21-9                (7)  labor from inside the rural community be used to
21-10    the extent possible.
21-11          Sec. 15.915.  FILING CONSTRUCTION CONTRACT. The rural
21-12    community shall file with the board a certified copy of each
21-13    construction contract it enters into for the construction of all or
21-14    part of a project.  Each contract must contain or have attached to
21-15    it the specifications, plans, and details of all work included in
21-16    the contract.
21-17          Sec. 15.916.  INSPECTION OF PROJECTS. (a)  The board may
21-18    inspect the construction of a project at any time to assure that:
21-19                (1)  the contractor is substantially complying with the
21-20    approved engineering plans of the project; and
21-21                (2)  the contractor is constructing the project in
21-22    accordance with sound engineering principles.
21-23          (b)  Inspection of a project by the board does not subject
21-24    the state to any civil liability.
21-25          Sec. 15.917.  ALTERATION OF PLANS. After the executive
21-26    administrator approves the engineering plans, a rural community may
21-27    not make any substantial or material alteration in the plans unless
 22-1    the executive administrator authorizes the alteration.  The board
 22-2    shall review and approve or disapprove plans and specifications for
 22-3    all sewage collection, treatment, and disposal systems for which
 22-4    financial assistance is provided from the fund in a manner that
 22-5    will satisfy commission requirements for design criteria and permit
 22-6    conditions that apply to construction activities.
 22-7          Sec. 15.918.  CERTIFICATE OF APPROVAL. The executive
 22-8    administrator may consider the following as grounds for refusal to
 22-9    give a certificate of approval for any construction contract:
22-10                (1)  failure to construct the project according to the
22-11    approved plans;
22-12                (2)  failure to construct the works in accordance with
22-13    sound engineering principles; or
22-14                (3)  failure to comply with any term of the contract.
22-15          Sec. 15.919.  REPORT TO LEGISLATURE. (a)  Not later than
22-16    January 1, 2005, the board shall report to the legislature on the
22-17    program established under this subchapter.
22-18          (b)  The report must include:
22-19                (1)  the number of applications received;
22-20                (2)  the number of loans funded;
22-21                (3)  the types of projects funded;
22-22                (4)  the total funds allocated;
22-23                (5)  available performance measures; and
22-24                (6)  the expected feasibility of and demand for an
22-25    expanded rural community water and wastewater loan program.
22-26          Sec. 15.920.  AUTHORITY OF RURAL COMMUNITIES. Rural
22-27    communities that receive financial assistance from the fund are
 23-1    granted all necessary authority to enter into loan agreements and
 23-2    issue promissory notes in connection with the financial assistance
 23-3    granted under this subchapter.
 23-4          SECTION 18.  Subchapter B, Chapter 16, Water Code, is amended
 23-5    by amending Section 16.021 and adding Section 16.022 to read as
 23-6    follows:
 23-7          Sec. 16.021.  TEXAS NATURAL RESOURCES INFORMATION SYSTEM.
 23-8    (a) The executive administrator shall establish the Texas Natural
 23-9    Resources Information System (TNRIS) to serve Texas agencies and
23-10    citizens as a centralized clearinghouse and referral center for
23-11    natural resource, census, and other socioeconomic data.
23-12          (b)  The executive administrator may, on behalf of TNRIS,
23-13    enter into partnerships with private entities to provide additional
23-14    funding for improved access to TNRIS information.  The board shall
23-15    adopt administrative rules to describe the process of establishing
23-16    partnerships, define the types of partnerships that may be formed,
23-17    establish the fee collection process, and define the
23-18    nondiscriminatory methods used to determine which private entities
23-19    may enter into partnerships.  Any process developed by the board
23-20    must comply with all applicable laws regarding ethics, purchasing,
23-21    and contracts.
23-22          (c)  The Texas Geographic Information Council (TGIC) is
23-23    created to provide strategic planning and coordination in the
23-24    acquisition and use of geo-spatial data and related technologies in
23-25    the State of Texas.  The executive administrator and the executive
23-26    director of the Department of Information Resources shall designate
23-27    entities to be members of the TGIC. The chief administrative
 24-1    officer of each member entity shall select one representative to
 24-2    serve on the TGIC. The duties of the TGIC shall include providing
 24-3    guidance to the executive administrator in carrying out the
 24-4    executive administrator's [his] duties under this section and
 24-5    guidance to the Department of Information Resources for development
 24-6    of rules related to statewide geo-spatial data and technology
 24-7    standards.
 24-8          (d)  Member entities of the TGIC that are state agencies
 24-9    shall, and member entities that are not state agencies may, provide
24-10    information to the TGIC about their investments in geographic
24-11    information and plans for its use.  Not later than September 1 of
24-12    each even-numbered year, the TGIC shall prepare and provide to the
24-13    board, the Department of Information Resources, the governor, and
24-14    the legislature a plan that inventories known state agency
24-15    geographic information systems projects and recommends initiatives
24-16    to improve the state's geographic information systems programs.
24-17          (e) [(c)]  Under the guidance of the TGIC, the executive
24-18    administrator shall:
24-19                (1)  further develop the Texas Natural Resources
24-20    Information System by promoting and providing for effective
24-21    acquisition, archiving, documentation, indexing, and dissemination
24-22    of natural resource and related digital and nondigital data and
24-23    information;
24-24                (2)  obtain information in response to disagreements
24-25    regarding names and name spellings for natural and cultural
24-26    features in the state and provide this information to the Board on
24-27    Geographic Names of the United States Department of the Interior;
 25-1                (3)  make recommendations to the Board on Geographic
 25-2    Names of the United States Department of the Interior for naming
 25-3    any natural or cultural feature subject to the limitations provided
 25-4    by Subsection (f) [(d) of this section];
 25-5                (4)  make recommendations to the Department of
 25-6    Information Resources to adopt and promote standards that
 25-7    facilitate sharing of digital natural resource data and related
 25-8    socioeconomic data among federal, state, and local governments and
 25-9    other interested parties;
25-10                (5)  acquire and disseminate natural resource and
25-11    related socioeconomic data describing the Texas-Mexico border
25-12    region; and
25-13                (6)  coordinate, conduct, and facilitate the
25-14    development, maintenance, and use of mutually compatible statewide
25-15    digital base maps depicting natural resources and man-made
25-16    features.
25-17          (f) [(d)]  A recommendation may not be made under
25-18    [Subdivision (3) of] Subsection (e)(3) [(c) of this section] for:
25-19                (1)  a feature previously named under statutory
25-20    authority or recognized by an agency of the federal government, the
25-21    state, or a political subdivision of the state;
25-22                (2)  a feature located on private property for which
25-23    consent of the property owner cannot be obtained; or
25-24                (3)  naming a natural or cultural feature for a living
25-25    person.
25-26          Sec. 16.022.  WATER CONSERVATION STUDY.  (a)  The board and
25-27    the State Soil and Water Conservation Board shall jointly conduct a
 26-1    study of the ways to improve or expand water conservation efforts
 26-2    and report to the legislature.
 26-3          (b)  The report must include:
 26-4                (1)  an assessment of both agricultural and municipal
 26-5    water conservation issues;
 26-6                (2)  information on existing conservation efforts by
 26-7    the board and the State Soil and Water Conservation Board;
 26-8                (3)  information on existing conservation efforts by
 26-9    municipalities receiving funding from the board, as specified in
26-10    water conservation plans submitted by the municipalities as part of
26-11    their applications for assistance;
26-12                (4)  a discussion of future conservation needs;
26-13                (5)  an analysis of programmatic approaches and funding
26-14    for additional conservation efforts;
26-15                (6)  an assessment of existing statutory authority and
26-16    whether changes are needed to more effectively promote and fund
26-17    conservation projects; and
26-18                (7)  an assessment of the board's agricultural water
26-19    conservation program.
26-20          (c)  The report shall be issued as part of, or as a
26-21    supplement to, the state water plan.
26-22          SECTION 19. Section 16.053(j), Water Code, is amended to read
26-23    as follows:
26-24          (j)  The board may provide financial assistance to political
26-25    subdivisions under Subchapters E and F of this chapter, Subchapters
26-26    C, D, E, F, [and] J, and O, Chapter 15, and Subchapters D, I, K,
26-27    and L, Chapter 17, for water supply projects only if:
 27-1                (1)  the board determines that the needs to be
 27-2    addressed by the project will be addressed in a manner that is
 27-3    consistent with the state water plan; and
 27-4                (2)  beginning January 5, 2002, the board:
 27-5                      (A)  has approved a regional water plan as
 27-6    provided by Subsection (i), and any required updates of the plan,
 27-7    for the region of the state that includes the area benefiting from
 27-8    the proposed project; and
 27-9                      (B)  determines that the needs to be addressed by
27-10    the project will be addressed in a manner that is consistent with
27-11    that regional water plan.
27-12          SECTION 20. Section 16.136, Water Code, is amended to read as
27-13    follows:
27-14          Sec. 16.136.  FACILITIES WANTED BY POLITICAL SUBDIVISION. The
27-15    board may acquire all or part [up to 50 percent] of any authorized
27-16    facility to the extent that the board finds that the political
27-17    subdivision:
27-18                (1)  is willing and reasonably able to finance that
27-19    portion [at least 50 percent] of the cost of the facility that the
27-20    board does not acquire;
27-21                (2)  has obtained all necessary permits;
27-22                (3)  has proposals that are consistent with the
27-23    objectives of the state water plan; and
27-24                (4)  has a program of water conservation for the more
27-25    efficient use of water as required by Section 15.106 of this code.
27-26          SECTION 21.  Section 17.0871(g), Water Code, is amended to
27-27    read as follows:
 28-1          (g)  The accrued interest portion of proceeds from the sale
 28-2    of political subdivision bonds shall be disposed of as otherwise
 28-3    provided by this chapter.  Money not applied to discharges,
 28-4    payments, or redemptions shall be deposited in the development
 28-5    fund, the administrative fund, the water assistance fund, or the
 28-6    agricultural water conservation fund, as appropriate, to be used
 28-7    for the purposes provided by law.
 28-8          SECTION 22. Section 17.123, Water Code, is amended to read as
 28-9    follows:
28-10          Sec. 17.123.  FINDINGS REGARDING PERMITS. (a) The board shall
28-11    not release funds for the construction of that portion of a project
28-12    that proposes surface water or groundwater development [deliver
28-13    funds pursuant to an application for financial assistance] until
28-14    the executive administrator makes a written finding:
28-15                (1)  that an applicant proposing surface-water
28-16    development has the necessary water right authorizing it to
28-17    appropriate and use the water which the water supply project will
28-18    provide; or
28-19                (2)  that an applicant proposing underground water
28-20    development has the right to use water that the water supply
28-21    project will provide.
28-22          (b)  The board may release funds for the costs of planning,
28-23    engineering, architectural, legal, title, fiscal, or economic
28-24    investigation, studies, surveys, or designs before making the
28-25    finding required under Subsection (a) if the executive
28-26    administrator determines that a reasonable expectation exists that
28-27    the finding will be made before the release of funds for
 29-1    construction.
 29-2          SECTION 23.  The heading to Subchapter Z, Chapter 2306,
 29-3    Government Code, is amended to read as follows:
 29-4            SUBCHAPTER Z.  COLONIAS [COLONIA SELF-HELP CENTERS]
 29-5          SECTION 24.  Sections 2306.584 and 2306.585, Government Code,
 29-6    are amended to read as follows:
 29-7          Sec. 2306.584.  COLONIA SELF-HELP CENTER ADVISORY COMMITTEE.
 29-8    (a)  The department shall appoint not fewer than five persons who
 29-9    are residents of colonias to serve on the Colonia Self-Help Center
29-10    Advisory Committee [an advisory committee].  The members of the
29-11    advisory committee shall be selected from lists of candidates
29-12    submitted to the department by local nonprofit organizations and
29-13    the commissioners court of a county in which a self-help center is
29-14    located.
29-15          (b)  The department shall appoint one committee member to
29-16    represent each of the counties in which self-help centers are
29-17    located.  Each committee member:
29-18                (1)  must be a resident of a colonia in the county the
29-19    member represents; and
29-20                (2)  may not be a board member, contractor, or employee
29-21    of or have any ownership interest in an entity that is awarded a
29-22    contract under this subchapter.
29-23          Sec. 2306.585.  DUTIES OF COLONIA SELF-HELP CENTER ADVISORY
29-24    COMMITTEE. (a)  The Colonia Self-Help Center Advisory Committee
29-25    [committee] shall advise the department regarding:
29-26                (1)  the needs of colonia residents;
29-27                (2)  appropriate and effective programs that are
 30-1    proposed or are operated through the self-help centers; and
 30-2                (3)  activities that may be undertaken through the
 30-3    self-help centers to better serve the needs of colonia residents.
 30-4          (b)  The committee shall meet before the 30th day preceding
 30-5    the date on which a contract is scheduled to be awarded for the
 30-6    operation of a self-help center and may meet at other times.
 30-7          SECTION 25. Subchapter Z, Chapter 2306, Government Code, is
 30-8    amended by adding Section 2306.5851 to read as follows:
 30-9          Sec. 2306.5851.  COLONIA WATER AND WASTEWATER INFRASTRUCTURE
30-10    ADVISORY COMMITTEE.  (a)  The Colonia Water and Wastewater
30-11    Infrastructure Advisory Committee is composed of seven members
30-12    appointed by the governor as follows:
30-13                (1)  one colonia resident;
30-14                (2)  one representative of a nonprofit organization
30-15    that serves colonia residents;
30-16                (3)  one local government representative;
30-17                (4)  one person to represent private interests in
30-18    banking or land development;
30-19                (5)  one representative of a nonprofit utility;
30-20                (6)  one representative of an engineering consultant
30-21    firm involved in economically distressed areas program projects
30-22    under Subchapter K, Chapter 17, Water Code; and
30-23                (7)  one public member.
30-24          (b)  Each committee member, except the public member, must
30-25    reside within 100 miles of the Texas-Mexico border.
30-26          (c)  The secretary of state is an ex officio member of the
30-27    committee.
 31-1          (d)  The committee shall review the progress of water and
 31-2    wastewater infrastructure projects affecting colonias.
 31-3          (e)  The committee shall present an update and make
 31-4    recommendations to the board and the Texas Water Development Board
 31-5    annually at the joint meeting required by Section 6.060(d), Water
 31-6    Code, regarding:
 31-7                (1)  efforts to ensure that colonia residents are
 31-8    connected to the infrastructure funded by state agencies;
 31-9                (2)  the financial, managerial, and technical
31-10    capabilities of project owners and operators;
31-11                (3)  the agencies' management of their colonia programs
31-12    and the effectiveness of their policies regarding underperforming
31-13    projects; and
31-14                (4)  any other issues related to the effect of
31-15    state-managed infrastructure programs on colonia residents.
31-16          SECTION 26.  (a) The Texas Water Development Board shall
31-17    adopt, not later than March 1, 2002, necessary rules to administer
31-18    the pilot program for water and wastewater loans for rural
31-19    communities created by Subchapter O, Chapter 15, Water Code, as
31-20    added by this Act.
31-21          (b)  The Texas Water Development Board shall begin, not later
31-22    than September 1, 2002, to provide loans under Subchapter O,
31-23    Chapter 15, Water Code, as added by this Act.
31-24          SECTION 27.  The changes in law made by this Act in the
31-25    prohibitions and qualifications applying to members of the Texas
31-26    Water Development Board do not affect the entitlement of a member
31-27    serving on the board immediately before September 1, 2001, to
 32-1    continue to serve and function as a member of the board for the
 32-2    remainder of the member's term.  The changes in law apply only to a
 32-3    member appointed on or after September 1, 2001.
 32-4          SECTION 28.  This Act takes effect September 1, 2001.