By:  Zaffirini                                         S.B. No. 312
                                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.  The legislature finds that:
 1-6                 (1)  economically distressed subdivisions commonly
 1-7     called colonias are found throughout those counties located within
 1-8     50 miles of the international border of this state;
 1-9                 (2)  a substantial number of homes in the economically
1-10     distressed subdivisions lack an adequate potable water supply and
1-11     sewer services, creating a serious and unacceptable health hazard
1-12     from contagious and other serious illnesses and posing a clear and
1-13     substantial threat not only to the environment of the border region
1-14     but also to the environment of the entire state;
1-15                 (3)  although significant improvement has been made by
1-16     this state and the political subdivisions of the border area in
1-17     addressing the public health hazard created in those economically
1-18     distressed subdivisions, many of those economically distressed
1-19     subdivisions are located in isolated rural areas far from water or
1-20     wastewater providers or are otherwise situated so as to make the
1-21     provision of water or wastewater services by political subdivisions
1-22     to those areas difficult or impossible using conventional capital
1-23     improvement strategies;
1-24                 (4)  the lack of an adequate potable water supply and
1-25     wastewater services, coupled with the location of those
 2-1     subdivisions, erodes the economic stability of the counties that
 2-2     contain those subdivisions and that depend on a healthy and safe
 2-3     environment for the residents of the subdivisions and counties;
 2-4                 (5)  the economic stability of those counties is
 2-5     necessary for the mutual development of trade, transportation, and
 2-6     commerce in the border region and affects not only the border
 2-7     region, but all regions of the state involved in those reciprocal
 2-8     economic activities;
 2-9                 (6)  alternative capital improvement mechanisms are
2-10     necessary to ensure that the maximum number of economically
2-11     distressed subdivisions obtain adequate water or wastewater
2-12     services to eliminate public health problems and encourage the
2-13     development and diversification of the economy in those counties
2-14     and the entire state;
2-15                 (7)  nonprofit organizations have succeeded in
2-16     planning, platting, engineering, designing, and constructing water
2-17     and wastewater projects to serve those inaccessible, economically
2-18     distressed subdivisions using assistance from the residents
2-19     immediately benefiting from the water or wastewater services, thus
2-20     creating an alternative capital improvement mechanism with a proven
2-21     record of success that deserves state support;
2-22                 (8)  many residents of colonias are motivated to
2-23     improve their situation and have worked with nonprofit
2-24     organizations on self-help projects to build their own
2-25     infrastructure, ultimately saving on the total cost of water and
2-26     wastewater projects; and
 3-1                 (9)  creating a program to provide public funds to
 3-2     those nonprofit organizations for self-help projects will assist in
 3-3     the reduction of the public health problems created by the lack of
 3-4     adequate water and wastewater services and will encourage the
 3-5     development and diversification of the economy of the counties in
 3-6     which those subdivisions are located as well as throughout the
 3-7     entire state.
 3-8           SECTION 2.  Section 6.013, Water Code, is amended to read as
 3-9     follows:
3-10           Sec. 6.013.  SUNSET PROVISION.  The Texas Water Development
3-11     Board is subject to review under Chapter 325, Government Code
3-12     (Texas Sunset Act), but is not abolished under that chapter.  The
3-13     board shall be reviewed during the period in which state agencies
3-14     abolished in 2013 [2001] and every 12th year after 2013 [2001] are
3-15     reviewed.
3-16           SECTION 3.  Subsection (c), Section 6.052, Water Code, is
3-17     amended to read as follows:
3-18           (c)  Appointments to the board shall be made without regard
3-19     to the race, color, disability [handicap], sex, religion, age, or
3-20     national origin of the appointees.
3-21           SECTION 4.  Sections 6.054, 6.057, and 6.058, Water Code, are
3-22     amended to read as follows:
3-23           Sec. 6.054.  REMOVAL OF BOARD MEMBERS.  (a)  It is a ground
3-24     for removal from the board that [if] a member:
3-25                 (1)  does not have at the time of taking office
3-26     [appointment] the qualifications required for appointment to the
 4-1     board;
 4-2                 (2)  does not maintain during [the] service on the
 4-3     board the qualifications required for appointment to the board;
 4-4                 (3)  is ineligible for membership under [violates a
 4-5     prohibition established by] Sections 6.053, 6.057, and 6.058 [of
 4-6     this code];
 4-7                 (4)  cannot, because of illness or disability, [is
 4-8     unable to] discharge the member's [his] duties for a substantial
 4-9     part [portion] of the member's term [for which he was appointed
4-10     because of illness or disability]; or
4-11                 (5)  is absent from more than half [one-half] of the
4-12     regularly scheduled board meetings that the member is eligible to
4-13     attend during a [each] calendar year without an excuse approved[,
4-14     except when the absence is excused] by a majority vote of the
4-15     board.
4-16           (b)  The validity of an action of the board is not affected
4-17     by the fact that it is [was] taken when a ground for removal of a
4-18     board member exists [of the board existed].
4-19           (c)  If the executive administrator [a board member] has
4-20     knowledge that a potential ground for removal exists, the executive
4-21     administrator [he] shall notify the chairman of the board of the
4-22     potential [that] ground.  The chairman of the board shall then
4-23     notify the governor and the attorney general that a potential
4-24     ground for removal exists.  If the potential ground for removal
4-25     includes the chairman of the board, the executive administrator
4-26     shall notify the next highest ranking officer of the board, who
 5-1     shall then notify the governor and the attorney general that a
 5-2     potential ground for removal exists.
 5-3           Sec. 6.057.  CONFLICT OF INTEREST.  (a) In this section,
 5-4     "Texas trade association" means a cooperative and voluntarily
 5-5     joined association of business or professional competitors in this
 5-6     state designed to assist its members and its industry or profession
 5-7     in dealing with mutual business or professional problems and in
 5-8     promoting their common interest.
 5-9           (b)  A person may not be a member of the board and may not be
5-10     a board employee employed in a "bona fide executive,
5-11     administrative, or professional capacity," as that phrase is used
5-12     for purposes of establishing an exemption to the overtime
5-13     provisions of the federal Fair Labor Standards Act of 1938 (29
5-14     U.S.C. Section 201 et seq.), and its subsequent amendments, if:
5-15                 (1)  the person is an officer, employee, or paid
5-16     consultant of a Texas trade association in the field of water
5-17     planning or water financing; or
5-18                 (2)  the person's spouse is an officer, employee, or
5-19     paid consultant of a Texas trade association in the field of water
5-20     planning or water financing.  [An officer, employee, or paid
5-21     consultant of a trade association in an industry regulated by the
5-22     board may not be a member or employee of the board, nor may a
5-23     person who cohabits with or is the spouse of an officer, managerial
5-24     employee, or paid consultant of a trade association in an industry
5-25     regulated by the board be a member of the board or an employee of
5-26     the board grade 17 or over, including exempt employees, according
 6-1     to the position classification schedule under the General
 6-2     Appropriations Act.]
 6-3           Sec. 6.058.  LOBBYIST PROHIBITION.  A person may not be a
 6-4     member of the board or act as the general counsel to the board if
 6-5     the person [who] is required to register as a lobbyist under
 6-6     Chapter 305, Government Code, because of the person's [by virtue of
 6-7     his] activities for compensation [in or] on behalf of a profession
 6-8     related to the operation of the board [may not serve as a member of
 6-9     the board or act as the general counsel to the board].
6-10           SECTION 5.  Section 6.060, Water Code, is amended by adding
6-11     Subsection (d) to read as follows:
6-12           (d)  The board shall meet annually with the board of the
6-13     Texas Department of Housing and Community Affairs or the successor
6-14     agency that administers the portion of the federal community
6-15     development block grant nonentitlement program that addresses the
6-16     infrastructure needs of colonias to assess the agencies' progress
6-17     in meeting the needs of colonia residents.  For purposes of this
6-18     subsection, "colonia" has the meaning assigned by Section 2306.581,
6-19     Government Code.
6-20           SECTION 6.  Subchapter C, Chapter 6, Water Code, is amended
6-21     by adding Section 6.062 to read as follows:
6-22           Sec. 6.062.  REQUIRED TRAINING FOR BOARD MEMBERS.  (a)  A
6-23     person who is appointed to and qualifies for office as a member of
6-24     the board may not vote, deliberate, or be counted as a member in
6-25     attendance at a meeting of the board until the person completes a
6-26     training program that complies with this section.
 7-1           (b)  The training program must provide the person with
 7-2     information regarding:
 7-3                 (1)  the legislation that created the board;
 7-4                 (2)  the programs operated by the board;
 7-5                 (3)  the role and functions of the board;
 7-6                 (4)  the rules of the board, with an emphasis on the
 7-7     rules that relate to disciplinary and investigatory authority;
 7-8                 (5)  the current budget for the board;
 7-9                 (6)  the results of the most recent formal audit of the
7-10     board;
7-11                 (7)  the requirements of:
7-12                       (A)  the open meetings law, Chapter 551,
7-13     Government Code;
7-14                       (B)  the public information law, Chapter 552,
7-15     Government Code;
7-16                       (C)  the administrative procedure law, Chapter
7-17     2001, Government Code; and
7-18                       (D)  other laws relating to public officials,
7-19     including conflict of interest laws; and
7-20                 (8)  any applicable ethics policies adopted by the
7-21     board or the Texas Ethics Commission.
7-22           (c)  A person appointed to the board is entitled to
7-23     reimbursement, as provided by the General Appropriations Act, for
7-24     the travel expenses incurred in attending the training program
7-25     regardless of whether the attendance at the program occurs before
7-26     or after the person qualifies for office.
 8-1           SECTION 7.  Section 6.106, Water Code, is amended to read as
 8-2     follows:
 8-3           Sec. 6.106.  STANDARDS OF CONDUCT.  The executive
 8-4     administrator or the executive administrator's designee [board]
 8-5     shall provide to [its] members of the board and to agency[,
 8-6     appointees, and] employees, as often as is necessary, information
 8-7     regarding the requirements for office or employment [their
 8-8     qualifications] under this code, including information regarding a
 8-9     person's [and their] responsibilities under applicable laws
8-10     relating to standards of conduct for state officers or [and]
8-11     employees.
8-12           SECTION 8.  Subchapter D, Chapter 6, Water Code, is amended
8-13     by adding Sections 6.110 and 6.111 to read as follows:
8-14           Sec. 6.110.  CAPITAL SPENDING PLAN.  (a)  Each biennium, the
8-15     executive administrator shall develop and submit to the board for
8-16     its approval a capital spending plan for state-funded programs,
8-17     including the Texas Water Development Fund II, the agricultural
8-18     water conservation fund, and the water assistance fund.
8-19           (b)  The plan must:
8-20                 (1)  identify water funding needs in the state and set
8-21     forth a basis for allocating state-supported funding to address
8-22     those needs; and
8-23                 (2)  if applicable, provide details about:
8-24                       (A)  the reasons  state-supported funding was not
8-25     allocated according to the methodologies identified in prior plans;
8-26     and
 9-1                       (B)  any adjustments to the plan from prior plans
 9-2     in response to changing water priorities.
 9-3           (c)  In developing the plan, the executive administrator
 9-4     shall consider:
 9-5                 (1)  any commission compliance issues;
 9-6                 (2)  information derived from facility needs
 9-7     assessments or other water and wastewater needs assessments;
 9-8                 (3)  regional planning group plans required under
 9-9     Section 16.053; and
9-10                 (4)  any other appropriate information.
9-11           (d)  The board shall consider the plan at a regularly
9-12     scheduled meeting and, on approval, submit it to the legislature
9-13     and the Legislative Budget Board before January 1 of each
9-14     odd-numbered year.  The board may include the plan as part of its
9-15     legislative appropriations request.
9-16           Sec. 6.111.  SEPARATION OF RESPONSIBILITIES.  The board shall
9-17     develop and implement policies that clearly separate the
9-18     policymaking responsibilities of the board and the management
9-19     responsibilities of the executive administrator and the staff of
9-20     the board.
9-21           SECTION 9.  Sections 6.154, 6.155, and 6.188, Water Code, are
9-22     amended to read as follows:
9-23           Sec. 6.154.  COMPLAINT FILE.  (a)  The board shall maintain a
9-24     file on each written complaint filed with the board.  The file must
9-25     include:
9-26                 (1)  the name of the person who filed the complaint;
 10-1                (2)  the date the complaint is received by the board;
 10-2                (3)  the subject matter of the complaint;
 10-3                (4)  the name of each person contacted in relation to
 10-4    the complaint;
 10-5                (5)  a summary of the results of the review or
 10-6    investigation of the complaint; and
 10-7                (6)  an explanation of the reason the file was closed,
 10-8    if the agency closed the file without taking action other than to
 10-9    investigate the complaint.
10-10          (b)  The board shall provide to the person filing the
10-11    complaint and to each person who is a subject of the complaint a
10-12    copy of the board's policies and procedures relating to complaint
10-13    investigation and resolution [keep an information file about each
10-14    complaint filed with the board relating to an entity regulated by
10-15    the board].
10-16          Sec. 6.155.  NOTICE OF COMPLAINT.  The [If a written
10-17    complaint is filed with the board relating to an entity regulated
10-18    by the board, the] board, at least [as frequently as] quarterly
10-19    [and] until final disposition of the complaint, shall notify the
10-20    person filing the complaint and each person who is a subject of
10-21    [parties to] the complaint of the status of the investigation
10-22    [complaint] unless the notice would jeopardize an undercover
10-23    investigation.
10-24          Sec. 6.188.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  The
10-25    executive administrator or the executive administrator's [his]
10-26    designee shall prepare and maintain a written policy statement that
 11-1    implements [to assure implementation of] a program of equal
 11-2    employment opportunity to ensure that all personnel decisions
 11-3    [whereby all personnel transactions] are made without regard to
 11-4    race, color, disability [handicap], sex, religion, age, or national
 11-5    origin.
 11-6          (b)  The policy statement must include:
 11-7                (1)  personnel policies, including policies relating to
 11-8    recruitment, evaluation, selection, [appointment,] training, and
 11-9    promotion of personnel, that show the intent of the board to avoid
11-10    the unlawful employment practices described by Chapter 21, Labor
11-11    Code; and
11-12                (2)  an [a comprehensive] analysis of the extent to
11-13    which the composition of the board's personnel is in accordance
11-14    with state and federal law and a description of reasonable methods
11-15    to achieve compliance with state and federal law.
11-16          (c)  The policy statement must:
11-17                (1)  be updated annually;
11-18                (2)  be reviewed by the state Commission on Human
11-19    Rights for compliance with Subsection (b)(1); and
11-20                (3)  be filed with the governor's office [work force
11-21    that meets federal and state guidelines;]
11-22                [(3)  procedures by which a determination can be made
11-23    of significant underutilization in the board's work force of all
11-24    persons for whom federal or state guidelines encourage a more
11-25    equitable balance; and]
11-26                [(4)  reasonable methods to address appropriately areas
 12-1    of significant underutilization in the board's work force of all
 12-2    persons for whom federal or state guidelines encourage a more
 12-3    equitable balance.]
 12-4          [(b)  The policy statement shall be filed with the governor's
 12-5    office before November 1, 1985, cover an annual period, and be
 12-6    updated at least annually.  The governor's office shall develop a
 12-7    biennial report to the legislature based on the information
 12-8    submitted.  This report may be made individually or as a part of
 12-9    other biennial reports made to the legislature].
12-10          SECTION 10.  Subchapter F, Chapter 6, Water Code, is amended
12-11    by adding Section 6.196 to read as follows:
12-12          Sec. 6.196.  TRAINING ON STATE EMPLOYEE INCENTIVE PROGRAM.
12-13    The executive administrator or the executive administrator's
12-14    designee shall provide to agency employees information and training
12-15    on the benefits and methods of participation in the state employee
12-16    incentive program under Subchapter B, Chapter 2108, Government
12-17    Code.
12-18          SECTION 11.  Section 15.008, Water Code, is amended to read
12-19    as follows:
12-20          Sec. 15.008.  GRANT STANDARDS.  The law regarding uniform
12-21    grants and contract management, Chapter 783, Government Code,
12-22    [Uniform Grant and Contract Management Act of 1981 (Article
12-23    4413(32g), Vernon's Texas Civil Statutes)] does not apply to a
12-24    contract under Subchapter F, H, [or] K, or P [of this chapter].
12-25          SECTION 12.  Subsection (b), Section 15.011, Water Code, is
12-26    amended to read as follows:
 13-1          (b)  After notice and hearing and subject to any limitations
 13-2    established by the General Appropriations Act, the board may
 13-3    transfer money from the fund to the loan fund created under
 13-4    Subchapter C of this chapter, the storage acquisition fund created
 13-5    under Subchapter E of this chapter, the research and planning fund
 13-6    created under Subchapter F of this chapter, the hydrographic survey
 13-7    account created under Subchapter M of this chapter, provided the
 13-8    hydrographic survey account transfer does not exceed $425,000,
 13-9    [and] the aquatic vegetation management fund created under
13-10    Subchapter N of this chapter, the rural community water and
13-11    wastewater loan fund created under Subchapter O of this chapter,
13-12    and the colonia self-help account under Subchapter P of this
13-13    chapter.
13-14          SECTION 13.  Subsection (c), Section 15.012, Water Code, is
13-15    amended to read as follows:
13-16          (c)  Money appropriated to the fund by the legislature for a
13-17    specific purpose stated in Subchapter C, E, F, M, [or] N, or O of
13-18    this chapter shall be placed in the appropriate fund created by
13-19    that subchapter.
13-20          SECTION 14.  Subsection (b), Section 15.102, Water Code, is
13-21    amended to read as follows:
13-22          (b)  The loan fund may also be used by the board to provide
13-23    grants for projects:
13-24                (1)  that include supplying water and wastewater
13-25    services in economically distressed areas, including projects
13-26    involving retail distribution of those services;
 14-1                (2)  for which federal grant funds are placed in the
 14-2    loan fund; or
 14-3                (3)  on specific legislative appropriation for those
 14-4    projects.
 14-5          SECTION 15.  Section 15.104, Water Code, is amended to read
 14-6    as follows:
 14-7          Sec. 15.104.  FINDINGS REGARDING PERMITS.  (a)  The board
 14-8    shall not release funds for the construction of that portion of a
 14-9    project that proposes surface water or groundwater development
14-10    [deliver funds pursuant to an application for financial assistance
14-11    from the loan fund] until the executive administrator makes a
14-12    written finding:
14-13                (1)  that an applicant proposing surface-water
14-14    development has the necessary water right authorizing it to
14-15    appropriate and use the water that the project will provide; or
14-16                (2)  that an applicant proposing underground water
14-17    development has the right to use water that the project will
14-18    provide.
14-19          (b)  The board may release funds for the costs of planning,
14-20    engineering, architectural, legal, title, fiscal, or economic
14-21    investigation, studies, surveys, or designs before making the
14-22    finding required under Subsection (a) if the executive
14-23    administrator determines that a reasonable expectation exists that
14-24    the finding will be made before the release of funds for
14-25    construction.
14-26          (c)  If an applicant includes a proposal for a waste water
 15-1    treatment plant, the board may not deliver funds for the waste
 15-2    water treatment plant until the applicant has received a permit for
 15-3    construction and operation of the waste water treatment plant and
 15-4    approval of the plans and specifications from the commission. If
 15-5    the applicant proposes a waste water treatment plant that is
 15-6    located outside of the jurisdiction of this state and that is not
 15-7    subject to the permitting authority of the commission, the board
 15-8    must review the plans and specifications in coordination with the
 15-9    commission and find that the waste water treatment plant is capable
15-10    of producing effluent that will meet federal and state-approved
15-11    water quality standards.
15-12          SECTION 16.  Subsection (a), Section 15.601, Water Code, is
15-13    amended to read as follows:
15-14          (a)  The state water pollution control revolving fund shall
15-15    be administered by the board under this subchapter and rules
15-16    adopted by the board.  The fund shall be used to provide financial
15-17    assistance to political subdivisions for construction of treatment
15-18    works and to persons for nonpoint source pollution control and
15-19    abatement projects under Section 15.603(h), in accordance with the
15-20    capitalization grant program established under the Federal Water
15-21    Pollution Control Act (33 U.S.C. 1251 et seq.).
15-22          SECTION 17.  Section 15.603, Water Code, is amended by
15-23    amending Subsection (a) and adding Subsection (h) to read as
15-24    follows:
15-25          (a)  The revolving fund is held separately from other funds
15-26    by the board outside the State Treasury to provide financial
 16-1    assistance to political subdivisions for construction of treatment
 16-2    works and to persons for nonpoint source pollution control and
 16-3    abatement projects under Subsection (h).
 16-4          (h)  The board may establish a separate account in the
 16-5    revolving fund, to be used solely for providing financial
 16-6    assistance to persons for nonpoint source pollution control and
 16-7    abatement projects.  The account shall be composed solely of funds
 16-8    appropriated by the legislature, funds provided as gifts or grants
 16-9    by the United States, interest earnings on amounts credited to the
16-10    account, and repayments of loans made from the account.  The board
16-11    shall adopt rules establishing the criteria for eligibility  and
16-12    the terms of assistance for persons that receive financial
16-13    assistance from the account.
16-14          SECTION 18.  Subsection (a), Section 15.804, Water Code, is
16-15    amended to read as follows:
16-16          (a)  On the request of a political subdivision or agency of
16-17    this state or a neighboring state or a federal agency, the board
16-18    may perform [for the political subdivision] a hydrographic survey
16-19    in this state or outside of this state if the information collected
16-20    will benefit this state.  The board may perform a survey under this
16-21    section:
16-22                (1)  to determine:
16-23                      (A)  reservoir storage capacity;
16-24                      (B)  sedimentation levels;
16-25                      (C)  rates of sedimentation;
16-26                      (D)  projected water supply availability; or
 17-1    [and]
 17-2                      (E)  potential mitigative measures; [and]
 17-3                (2)  to conduct [for] other bathymetric studies; or
 17-4                (3)  to collect information relating to water-bearing
 17-5    formations.
 17-6          SECTION 19.  Chapter 15, Water Code, is amended by adding
 17-7    Subchapter O to read as follows:
 17-8           SUBCHAPTER O.  PILOT PROGRAM FOR WATER AND WASTEWATER
 17-9                        LOANS FOR RURAL COMMUNITIES
17-10          Sec. 15.901.  DEFINITIONS.  In this subchapter:
17-11                (1)  "Fund" means the rural community water and
17-12    wastewater loan fund.
17-13                (2)  "Political subdivision" means a municipality, a
17-14    county, or a district or authority created under Section 52,
17-15    Article III, or Section 59, Article XVI, Texas Constitution.
17-16                (3)  "Rural community" means:
17-17                      (A)  a municipality or county with a population
17-18    of less than 5,000; or
17-19                      (B)  a district or authority created under
17-20    Section 52, Article III, or Section 59, Article XVI, Texas
17-21    Constitution, with a population of less than 5,000 that is located
17-22    outside the boundaries or extraterritorial jurisdiction of a
17-23    municipality.
17-24          Sec. 15.902.  RURAL COMMUNITY WATER AND WASTEWATER LOAN FUND.
17-25    (a)  The rural community water and wastewater loan fund is an
17-26    account in the water assistance fund.
 18-1          (b)  The fund consists of:
 18-2                (1)  money transferred to the fund from the water
 18-3    assistance fund under Section 15.011(b);
 18-4                (2)  proceeds from the sale of political subdivision
 18-5    bonds by the board to the Texas Water Resources Finance Authority
 18-6    as provided by Section 17.0871; and
 18-7                (3)  repayments of loans made from the fund.
 18-8          Sec. 15.903.  FINANCIAL ASSISTANCE.  (a)  The fund may be
 18-9    used by the board to provide loans of financial assistance to rural
18-10    communities for the construction, acquisition, or improvement of
18-11    water and wastewater projects.
18-12          (b)  The board may make financial assistance available to a
18-13    rural community by entering into a loan agreement and promissory
18-14    note with the rural community, as provided by this subchapter.  A
18-15    rural community may apply for and accept the financial assistance.
18-16          (c)  The loan agreement must provide for the payment of
18-17    principal and interest on the debt incurred for the project at a
18-18    rate to be determined by the board.
18-19          (d)  The loan agreement must provide for the issuance of a
18-20    promissory note payable to the board to evidence the obligation of
18-21    the rural community to repay the loan made in accordance with the
18-22    terms of the loan agreement.
18-23          (e)  A loan provided under this subchapter may not exceed
18-24    $250,000 for each project, and the term of a loan may not exceed 20
18-25    years.
18-26          Sec. 15.904.  USE OF SALES TAX AS LOAN SECURITY.  (a)  A
 19-1    rural community that is a municipality or county may pledge a
 19-2    percentage of the sales and use tax revenue received under Chapter
 19-3    321 or 323, Tax Code, as applicable, to the payment of debt
 19-4    incurred under a loan agreement entered into with the board under
 19-5    this subchapter if a majority of the voters voting at an election
 19-6    called and held for that purpose authorize the municipality or
 19-7    county to pledge a portion of that revenue for that purpose.
 19-8          (b)  Sections 321.506, 321.507, and 323.505, Tax Code, do not
 19-9    apply to taxes pledged under this subchapter.
19-10          Sec. 15.905.  REVIEW AND APPROVAL OF LOAN AGREEMENT BY
19-11    ATTORNEY GENERAL.  (a)  Before a loan agreement may become
19-12    effective, a record of the proceedings of the board and the rural
19-13    community authorizing the execution of the loan agreement, the loan
19-14    agreement, the promissory note, and any contract providing revenue
19-15    or security to pay the promissory note must be submitted to the
19-16    attorney general for review and approval.
19-17          (b)  If the attorney general finds that the loan agreement
19-18    and the promissory note are valid and binding obligations of the
19-19    rural community, the attorney general shall approve the documents
19-20    and deliver them to the comptroller, the board, and the rural
19-21    community, together with a copy of the attorney general's legal
19-22    opinion stating that approval.
19-23          Sec. 15.906.  REGISTRATION.  On receipt of the documents
19-24    required by Section 15.905(b), the comptroller shall register the
19-25    record of the proceedings relating to the execution of a loan
19-26    agreement.
 20-1          Sec. 15.907.  VALIDITY AND INCONTESTABILITY.  On approval by
 20-2    the attorney general and registration by the comptroller, the loan
 20-3    agreement, the promissory note, a contract providing revenue or
 20-4    security, and any other obligation evidencing the debt are
 20-5    incontestable in a court and are valid, binding, and enforceable
 20-6    according to their terms.
 20-7          Sec. 15.908.  ENFORCEMENT BY MANDAMUS.  Payment of
 20-8    obligations incurred under a loan agreement and other requirements
 20-9    of this subchapter may be enforced in a court by mandamus or other
20-10    appropriate proceedings.
20-11          Sec. 15.909.  RULES.  The board shall adopt necessary rules
20-12    to administer this subchapter, including rules establishing
20-13    procedures for application for and award of loans.
20-14          Sec. 15.910.  APPLICATION FOR ASSISTANCE.  (a)  In an
20-15    application to the board for financial assistance from the fund,
20-16    the rural community must include:
20-17                (1)  the name of the rural community and its principal
20-18    officers;
20-19                (2)  a citation of the law under which the rural
20-20    community operates and was created;
20-21                (3)  a description of the water or wastewater project
20-22    for which the financial assistance will be used;
20-23                (4)  the total cost of the project;
20-24                (5)  the amount of state financial assistance
20-25    requested;
20-26                (6)  the plan for repaying the total cost of the
 21-1    project; and
 21-2                (7)  any other information the board requires in order
 21-3    to perform its duties and to protect the public interest.
 21-4          (b)  The board may not accept an application for a loan of
 21-5    financial assistance from the fund unless it is submitted in
 21-6    affidavit form by the officials of the rural community.  The board
 21-7    shall prescribe the affidavit form in its rules.
 21-8          (c)  If a rural community has a program of water
 21-9    conservation, the rural community shall state in the application
21-10    that the rural community has such a program.
21-11          Sec. 15.911.  FINDINGS REGARDING PERMITS.  (a)  The board may
21-12    not release funds for the construction phase of that portion of a
21-13    project that proposes surface water or groundwater development
21-14    until the executive administrator makes a written finding:
21-15                (1)  that a rural community proposing surface water
21-16    development has the necessary water right authorizing it to
21-17    appropriate and use the water that the project will provide; or
21-18                (2)  that a rural community proposing underground water
21-19    development has the right to use water that the project will
21-20    provide.
21-21          (b)  If a rural community includes a proposal for a
21-22    wastewater treatment project, the board may not release funds for
21-23    the project construction until the rural community has received a
21-24    permit for the construction and operation of the project and
21-25    approval of the plans and specifications for the project in a
21-26    manner that will satisfy commission requirements for design
 22-1    criteria and permit conditions that apply to construction
 22-2    activities.
 22-3          Sec. 15.912.  CONSIDERATIONS IN ACTING ON APPLICATION.  In
 22-4    acting on an application for financial assistance, the board shall
 22-5    consider:
 22-6                (1)  the needs of the area to be served by the project
 22-7    and the benefit of the project to the area in relation to the needs
 22-8    of other areas requiring state assistance in any manner and the
 22-9    benefits of those projects to the other areas;
22-10                (2)  the availability of revenue to the rural community
22-11    from all sources for the ultimate repayment of the cost of the
22-12    project, including all interest;
22-13                (3)  the relationship of the project to overall
22-14    statewide needs; and
22-15                (4)  any other factors that the board considers
22-16    relevant.
22-17          Sec. 15.913.  APPROVAL OF APPLICATION.  The board by
22-18    resolution may approve an application for a loan if, after
22-19    considering the factors listed in Section 15.912 and any other
22-20    relevant factors, the board finds that:
22-21                (1)  the public interest requires state participation
22-22    in the project; and
22-23                (2)  the revenue or taxes pledged by the rural
22-24    community will be sufficient to meet all the obligations assumed by
22-25    the rural community during the succeeding period of not more than
22-26    20 years.
 23-1          Sec. 15.914.  CONSTRUCTION CONTRACT REQUIREMENTS.  The
 23-2    governing body of each rural community receiving financial
 23-3    assistance from the board under this subchapter shall require in
 23-4    all contracts for the construction of a project that:
 23-5                (1)  each bidder furnish a bid guarantee equivalent to
 23-6    five percent of the bid price;
 23-7                (2)  each contractor awarded a construction contract
 23-8    furnish performance and payment bonds as follows:
 23-9                      (A)  the performance bond must include guarantees
23-10    that work done under the contract will be completed and performed
23-11    according to approved plans and specifications and in accordance
23-12    with sound construction principles and practices; and
23-13                      (B)  the performance and payment bonds must be in
23-14    a penal sum of not less than 100 percent of the contract price and
23-15    remain in effect for one year after the date of approval by the
23-16    engineer of the political subdivision;
23-17                (3)  payment be made in partial payments as the work
23-18    progresses;
23-19                (4)  each partial payment not exceed 95 percent of the
23-20    amount due at the time of the payment as shown by the engineer of
23-21    the project, but, if the project is substantially complete, a
23-22    partial release of the five percent retainage may be made by the
23-23    rural community with approval of the executive administrator;
23-24                (5)  payment of the retainage remaining due on
23-25    completion of the contract be made only after:
23-26                      (A)  approval by the engineer for the rural
 24-1    community as required under the bond proceedings;
 24-2                      (B)  approval by the governing body of the rural
 24-3    community by a resolution or other formal action; and
 24-4                      (C)  certification by the executive administrator
 24-5    in accordance with the rules of the board that the work to be done
 24-6    under the contract has been completed and performed in a
 24-7    satisfactory manner and in accordance with sound engineering
 24-8    principles and practices;
 24-9                (6)  no valid approval be granted unless the work done
24-10    under the contract has been completed and performed in a
24-11    satisfactory manner according to approved plans and specifications;
24-12    and
24-13                (7)  labor from inside the rural community be used to
24-14    the extent possible.
24-15          Sec. 15.915.  FILING CONSTRUCTION CONTRACT.  The rural
24-16    community shall file with the board a certified copy of each
24-17    construction contract it enters into for the construction of all or
24-18    part of a project.  Each contract must contain or have attached to
24-19    it the specifications, plans, and details of all work included in
24-20    the contract.
24-21          Sec. 15.916.  INSPECTION OF PROJECTS.  (a)  The board may
24-22    inspect the construction of a project at any time to assure that:
24-23                (1)  the contractor is substantially complying with the
24-24    approved engineering plans of the project; and
24-25                (2)  the contractor is constructing the project in
24-26    accordance with sound engineering principles.
 25-1          (b)  Inspection of a project by the board does not subject
 25-2    the state to any civil liability.
 25-3          Sec. 15.917.  ALTERATION OF PLANS.  After the executive
 25-4    administrator approves the engineering plans, a rural community may
 25-5    not make any substantial or material alteration in the plans unless
 25-6    the executive administrator authorizes the alteration.  The board
 25-7    shall review and approve or disapprove plans and specifications for
 25-8    all sewage collection, treatment, and disposal systems for which
 25-9    financial assistance is provided from the fund in a manner that
25-10    will satisfy commission requirements for design criteria and permit
25-11    conditions that apply to construction activities.
25-12          Sec. 15.918.  CERTIFICATE OF APPROVAL.  The executive
25-13    administrator may consider the following as grounds for refusal to
25-14    give a certificate of approval for any construction contract:
25-15                (1)  failure to construct the project according to the
25-16    approved plans;
25-17                (2)  failure to construct the works in accordance with
25-18    sound engineering principles; or
25-19                (3)  failure to comply with any term of the contract.
25-20          Sec. 15.919.  REPORT TO LEGISLATURE.  (a)  Not later than
25-21    January 1, 2005, the board shall report to the legislature on the
25-22    program established under this subchapter.
25-23          (b)  The report must include:
25-24                (1)  the number of applications received;
25-25                (2)  the number of loans funded;
25-26                (3)  the types of projects funded;
 26-1                (4)  the total funds allocated;
 26-2                (5)  available performance measures; and
 26-3                (6)  the expected feasibility of and demand for an
 26-4    expanded rural community water and wastewater loan program.
 26-5          Sec. 15.920.  AUTHORITY OF RURAL COMMUNITIES.  Rural
 26-6    communities that receive financial assistance from the fund are
 26-7    granted all necessary authority to enter into loan agreements and
 26-8    issue promissory notes in connection with the financial assistance
 26-9    granted under this subchapter.
26-10          SECTION 20.  Chapter 15, Water Code, is amended by adding
26-11    Subchapter P to read as follows:
26-12                 SUBCHAPTER P.  COLONIA SELF-HELP PROGRAM
26-13          Sec. 15.951.  DEFINITIONS.  In this subchapter:
26-14                (1)  "Account" means the colonia self-help account.
26-15                (2)  "Colonia" means a geographic area that:
26-16                      (A)  is an economically distressed area as
26-17    defined by Section 17.921; and
26-18                      (B)  is located in a county any part of which is
26-19    within 50 miles of an international border.
26-20                (3)  "Program" means the colonia self-help program
26-21    established under this subchapter.
26-22                (4)  "Retail public utility" has the meaning assigned
26-23    by Section 13.002.
26-24                (5)  "Self-help project" means a project in which the
26-25    people who will benefit from the project actively participate.
26-26          Sec. 15.952.  CREATION OF ACCOUNT.  (a)  The colonia
 27-1    self-help account is an account in the general revenue fund that
 27-2    may be appropriated only for the purposes of this subchapter.
 27-3          (b)  The account consists of:
 27-4                (1)  money transferred by the legislature directly to
 27-5    the account;
 27-6                (2)  money transferred at the board's discretion from
 27-7    the fund;
 27-8                (3)  gifts, grants, or donations to the account; and
 27-9                (4)  interest earned on money credited to the account.
27-10          (c)  Sections 403.095 and 404.071, Government Code, do not
27-11    apply to the account.
27-12          Sec. 15.953.  USE OF ACCOUNT.  (a)  The board may use funds
27-13    in the account only to reimburse nonprofit organizations eligible
27-14    under Section 15.954 for expenses incurred in a self-help project
27-15    that results in the provision of adequate water or wastewater
27-16    services to a colonia.  Expenses that may be reimbursed include:
27-17                (1)  construction expenses;
27-18                (2)  facility planning expenses;
27-19                (3)  platting expenses;
27-20                (4)  surveying expenses;
27-21                (5)  engineering expenses;
27-22                (6)  equipment expenses; and
27-23                (7)  other expenses necessary to provide water or
27-24    wastewater services to the colonia, as determined appropriate by
27-25    the board.
27-26          (b)  The board may award a grant under the program directly
 28-1    to a nonprofit organization to reimburse the organization for
 28-2    expenses incurred in a self-help project described by Subsection
 28-3    (a).
 28-4          Sec. 15.954.  ELIGIBLE NONPROFIT ORGANIZATIONS.  To be
 28-5    eligible to receive a grant under the program, an organization
 28-6    must:
 28-7                (1)  apply for the grant;
 28-8                (2)  qualify for an exemption from federal income taxes
 28-9    under Section 501(c)(3), Internal Revenue Code of 1986, as amended;
28-10    and
28-11                (3)  as of January 1, 2001, have a demonstrated record
28-12    of completing in coordination with a retail public utility
28-13    construction of self-help projects described by Section 15.953(a).
28-14          Sec. 15.955.  GRANT APPLICATION.  An eligible nonprofit
28-15    organization must apply to the board for a grant under the program
28-16    before incurring any expense associated with a self-help project
28-17    described by Section 15.953(a).  The application must include:
28-18                (1)  the name of the nonprofit organization, the names
28-19    of the organization's principal officers, and verification of the
28-20    organization's 501(c)(3) status;
28-21                (2)  a description of the project area, the anticipated
28-22    number of water and wastewater connections to be made, and the
28-23    anticipated number of colonia residents to be served;
28-24                (3)  a description of the existing water and wastewater
28-25    facilities in the colonia;
28-26                (4)  a description of the project and the aspect of the
 29-1    project for which the grant will be used;
 29-2                (5)  a description of the anticipated participation in
 29-3    the project by residents of the colonia;
 29-4                (6)  the estimated total cost of both the project and
 29-5    the aspect of the project for which the grant will be used;
 29-6                (7)  the amount of the grant that is requested from the
 29-7    colonia self-help account and the sources of funding for the entire
 29-8    project;
 29-9                (8)  from a retail public utility authorized to provide
29-10    water or wastewater services to the colonia, a resolution in which
29-11    the retail public utility:
29-12                      (A)  agrees to inspect the project during and
29-13    after construction to ensure the adequacy of the project; and
29-14                      (B)  commits to provide the water or wastewater
29-15    services that the project intends to use; and
29-16                (9)  any other information required by the board.
29-17          Sec. 15.956.  BOARD CONSIDERATIONS IN EVALUATING GRANT
29-18    APPLICATION.  In evaluating an application for a grant under the
29-19    program, the board shall consider:
29-20                (1)  the number, quality, and character of projects
29-21    previously completed by the applicant; and
29-22                (2)  the capability of the retail public utility to
29-23    provide water or wastewater services to the colonia on completion
29-24    of the project.
29-25          Sec. 15.957.  ACTION ON GRANT APPLICATION.  (a)  Not later
29-26    than the 60th day after the date the board receives a complete
 30-1    application for a grant under the program, the board by written
 30-2    resolution shall:
 30-3                (1)  approve the application; or
 30-4                (2)  disapprove the application.
 30-5          (b)  On approval of an application, the board shall authorize
 30-6    the executive administrator of the board to execute a contract with
 30-7    the applicant for a grant to reimburse eligible expenses.  The
 30-8    contract may provide a budget, schedule, terms for payment of
 30-9    funds, and any other terms the board or its executive administrator
30-10    considers appropriate.
30-11          Sec. 15.958.  RULES.  The board shall adopt rules necessary
30-12    to administer the program established under this subchapter.
30-13          Sec. 15.959.  CO-ADMINISTRATION.  The program shall be
30-14    co-administered by the office of the secretary of state until the
30-15    second anniversary of the date on which the program begins
30-16    operations under this subchapter.
30-17          SECTION 21.  Subchapter B, Chapter 16, Water Code, is amended
30-18    by amending Section 16.021 and adding Section 16.022 to read as
30-19    follows:
30-20          Sec. 16.021.  TEXAS NATURAL RESOURCES INFORMATION SYSTEM.
30-21    (a)  The executive administrator shall establish the Texas Natural
30-22    Resources Information System (TNRIS) to serve Texas agencies and
30-23    citizens as a centralized clearinghouse and referral center for
30-24    natural resource, census, and other socioeconomic data.
30-25          (b)  The executive administrator may, on behalf of TNRIS,
30-26    enter into partnerships with private entities to provide additional
 31-1    funding for improved access to TNRIS information.  The board shall
 31-2    adopt administrative rules to describe the process of establishing
 31-3    partnerships, define the types of partnerships that may be formed,
 31-4    establish the fee collection process, and define the
 31-5    nondiscriminatory methods used to determine which private entities
 31-6    may enter into partnerships.  Any process developed by the board
 31-7    must comply with all applicable laws regarding ethics, purchasing,
 31-8    and contracts.
 31-9          (c)  The Texas Geographic Information Council (TGIC) is
31-10    created to provide strategic planning and coordination in the
31-11    acquisition and use of geo-spatial data and related technologies in
31-12    the State of Texas.  The executive administrator and the executive
31-13    director of the Department of Information Resources shall designate
31-14    entities to be members of the TGIC. The chief administrative
31-15    officer of each member entity shall select one representative to
31-16    serve on the TGIC.  The duties of the TGIC shall include providing
31-17    guidance to the executive administrator in carrying out the
31-18    executive administrator's [his] duties under this section and
31-19    guidance to the Department of Information Resources for development
31-20    of rules related to statewide geo-spatial data and technology
31-21    standards.
31-22          (d)  Member entities of the TGIC that are state agencies
31-23    shall, and member entities that are not state agencies may, provide
31-24    information to the TGIC about their investments in geographic
31-25    information and plans for its use.  Not later than September 1 of
31-26    each even-numbered year, the TGIC shall prepare and provide to the
 32-1    board, the Department of Information Resources, the governor, and
 32-2    the legislature a plan that inventories known state agency
 32-3    geographic information systems projects and recommends initiatives
 32-4    to improve the state's geographic information systems programs.
 32-5          (e) [(c)]  Under the guidance of the TGIC, the executive
 32-6    administrator shall:
 32-7                (1)  further develop the Texas Natural Resources
 32-8    Information System by promoting and providing for effective
 32-9    acquisition, archiving, documentation, indexing, and dissemination
32-10    of natural resource and related digital and nondigital data and
32-11    information;
32-12                (2)  obtain information in response to disagreements
32-13    regarding names and name spellings for natural and cultural
32-14    features in the state and provide this information to the Board on
32-15    Geographic Names of the United States Department of the Interior;
32-16                (3)  make recommendations to the Board on Geographic
32-17    Names of the United States Department of the Interior for naming
32-18    any natural or cultural feature subject to the limitations provided
32-19    by Subsection (f) [(d) of this section];
32-20                (4)  make recommendations to the Department of
32-21    Information Resources to adopt and promote standards that
32-22    facilitate sharing of digital natural resource data and related
32-23    socioeconomic data among federal, state, and local governments and
32-24    other interested parties;
32-25                (5)  acquire and disseminate natural resource and
32-26    related socioeconomic data describing the Texas-Mexico border
 33-1    region; and
 33-2                (6)  coordinate, conduct, and facilitate the
 33-3    development, maintenance, and use of mutually compatible statewide
 33-4    digital base maps depicting natural resources and man-made
 33-5    features.
 33-6          (f) [(d)]  A recommendation may not be made under
 33-7    [Subdivision (3) of] Subsection (e)(3) [(c) of this section] for:
 33-8                (1)  a feature previously named under statutory
 33-9    authority or recognized by an agency of the federal government, the
33-10    state, or a political subdivision of the state;
33-11                (2)  a feature located on private property for which
33-12    consent of the property owner cannot be obtained; or
33-13                (3)  naming a natural or cultural feature for a living
33-14    person.
33-15          Sec. 16.022.  WATER CONSERVATION STUDY.  (a)  The board and
33-16    the State Soil and Water Conservation Board shall jointly conduct a
33-17    study of the ways to improve or expand water conservation efforts
33-18    and report to the legislature.
33-19          (b)  The report must include:
33-20                (1)  an assessment of both agricultural and municipal
33-21    water conservation issues;
33-22                (2)  information on existing conservation efforts by
33-23    the board and the State Soil and Water Conservation Board;
33-24                (3)  information on existing conservation efforts by
33-25    municipalities receiving funding from the board, as specified in
33-26    water conservation plans submitted by the municipalities as part of
 34-1    their applications for assistance;
 34-2                (4)  a discussion of future conservation needs;
 34-3                (5)  an analysis of programmatic approaches and funding
 34-4    for additional conservation efforts;
 34-5                (6)  an assessment of existing statutory authority and
 34-6    whether changes are needed to more effectively promote and fund
 34-7    conservation projects; and
 34-8                (7)  an assessment of the board's agricultural water
 34-9    conservation program.
34-10          (c)  The report shall be issued as part of, or as a
34-11    supplement to, the state water plan.
34-12          SECTION 22.  Subsection (j), Section 16.053, Water Code, is
34-13    amended to read as follows:
34-14          (j)  The board may provide financial assistance to political
34-15    subdivisions under Subchapters E and F of this chapter, Subchapters
34-16    C, D, E, F, [and] J, and O, Chapter 15, and Subchapters D, I, K,
34-17    and L, Chapter 17, for water supply projects only if:
34-18                (1)  the board determines that the needs to be
34-19    addressed by the project will be addressed in a manner that is
34-20    consistent with the state water plan; and
34-21                (2)  beginning January 5, 2002, the board:
34-22                      (A)  has approved a regional water plan as
34-23    provided by Subsection (i), and any required updates of the plan,
34-24    for the region of the state that includes the area benefiting from
34-25    the proposed project; and
34-26                      (B)  determines that the needs to be addressed by
 35-1    the project will be addressed in a manner that is consistent with
 35-2    that regional water plan.
 35-3          SECTION 23.  Section 16.136, Water Code, is amended to read
 35-4    as follows:
 35-5          Sec. 16.136.  FACILITIES WANTED BY POLITICAL SUBDIVISION.
 35-6    The board may acquire all or part [up to 50 percent] of any
 35-7    authorized facility to the extent that the board finds that the
 35-8    political subdivision:
 35-9                (1)  is willing and reasonably able to finance that
35-10    portion [at least 50 percent] of the cost of the facility that the
35-11    board does not acquire;
35-12                (2)  has obtained all necessary permits;
35-13                (3)  has proposals that are consistent with the
35-14    objectives of the state water plan; and
35-15                (4)  has a program of water conservation for the more
35-16    efficient use of water as required by Section 15.106 of this code.
35-17          SECTION 24.  Subsection (g), Section 16.343, Water Code, is
35-18    amended to read as follows:
35-19          (g)  Before [filing] an application for funds [for facility
35-20    engineering] under Section 15.407 or Subchapter P, Chapter 15, [of
35-21    this code] or [financial assistance under] Subchapter K, Chapter
35-22    17, may be considered by the board [of this code], a political
35-23    subdivision must adopt the model rules pursuant to this section.
35-24    If the applicant is [or, in the case of] a district, [or] nonprofit
35-25    water supply corporation, or colonia, the applicant must be located
35-26    in a city or county that has adopted such rules.  Applicants for
 36-1    funds under Section 15.407 or Subchapter P, Chapter 15, or
 36-2    Subchapter K, Chapter 17, may not receive funds under those
 36-3    provisions unless the applicable political subdivision [An affected
 36-4    county may not receive funds under either Section 15.407 of this
 36-5    code or Subchapter K, Chapter 17, of this code unless the county]
 36-6    adopts and enforces the model rules.
 36-7          SECTION 25.  Subsection (g), Section 17.0871, Water Code, is
 36-8    amended to read as follows:
 36-9          (g)  The accrued interest portion of proceeds from the sale
36-10    of political subdivision bonds shall be disposed of as otherwise
36-11    provided by this chapter.  Money not applied to discharges,
36-12    payments, or redemptions shall be deposited in the development
36-13    fund, the administrative fund, the water assistance fund, or the
36-14    agricultural water conservation fund, as appropriate, to be used
36-15    for the purposes provided by law.
36-16          SECTION 26.  Section 17.123, Water Code, is amended to read
36-17    as follows:
36-18          Sec. 17.123.  FINDINGS REGARDING PERMITS.  (a) The board
36-19    shall not release funds for the construction of that portion of a
36-20    project that proposes surface water or groundwater development
36-21    [deliver funds pursuant to an application for financial assistance]
36-22    until the executive administrator makes a written finding:
36-23                (1)  that an applicant proposing surface-water
36-24    development has the necessary water right authorizing it to
36-25    appropriate and use the water which the water supply project will
36-26    provide; or
 37-1                (2)  that an applicant proposing underground water
 37-2    development has the right to use water that the water supply
 37-3    project will provide.
 37-4          (b)  The board may release funds for the costs of planning,
 37-5    engineering, architectural, legal, title, fiscal, or economic
 37-6    investigation, studies, surveys, or designs before making the
 37-7    finding required under Subsection (a) if the executive
 37-8    administrator determines that a reasonable expectation exists that
 37-9    the finding will be made before the release of funds for
37-10    construction.
37-11          SECTION 27.  (a)  The Texas Water Development Board shall
37-12    adopt, not later than March 1, 2002, necessary rules to administer
37-13    the pilot program for water and wastewater loans for rural
37-14    communities created by Subchapter O, Chapter 15, Water Code, as
37-15    added by this Act.
37-16          (b)  The Texas Water Development Board shall begin, not later
37-17    than September 1, 2002, to provide loans under Subchapter O,
37-18    Chapter 15, Water Code, as added by this Act.
37-19          SECTION 28.  The Texas Water Development Board is required to
37-20    implement the colonia self-help program under Subchapter P, Chapter
37-21    15, Water Code, as added by this Act, only if the legislature
37-22    appropriates money specifically for that purpose.  If the
37-23    legislature does not appropriate money specifically for that
37-24    purpose, the Texas Water Development Board may, but is not required
37-25    to, implement the colonia self-help program using other
37-26    appropriations available for that purpose.
 38-1          SECTION 29.  The changes in law made by this Act in the
 38-2    prohibitions and qualifications applying to members of the Texas
 38-3    Water Development Board do not affect the entitlement of a member
 38-4    serving on the board immediately before September 1, 2001, to
 38-5    continue to serve and function as a member of the board for the
 38-6    remainder of the member's term.  The changes in law apply only to a
 38-7    member appointed on or after September 1, 2001.
 38-8          SECTION 30.  This Act takes effect September 1, 2001.