1-1                                   AN ACT
 1-2     relating to the review and functions of the Texas Water Development
 1-3     Board and the improvement of certain water delivery infrastructure.
 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 and to receive an update
6-18     and recommendations from the Colonia Initiatives Advisory
6-19     Committee, as provided by Section 2306.590, Government Code.  For
6-20     purposes of this subsection, "colonia" has the meaning assigned by
6-21     Section 2306.581, Government Code.
6-22           SECTION 6.  Subchapter C, Chapter 6, Water Code, is amended
6-23     by adding Section 6.062 to read as follows:
6-24           Sec. 6.062.  REQUIRED TRAINING FOR BOARD MEMBERS.  (a)  A
6-25     person who is appointed to and qualifies for office as a member of
6-26     the board may not vote, deliberate, or be counted as a member in
 7-1     attendance at a meeting of the board until the person completes a
 7-2     training program that complies with this section.
 7-3           (b)  The training program must provide the person with
 7-4     information regarding:
 7-5                 (1)  the legislation that created the board;
 7-6                 (2)  the programs operated by the board;
 7-7                 (3)  the role and functions of the board;
 7-8                 (4)  the rules of the board, with an emphasis on the
 7-9     rules that relate to disciplinary and investigatory authority;
7-10                 (5)  the current budget for the board;
7-11                 (6)  the results of the most recent formal audit of the
7-12     board;
7-13                 (7)  the requirements of:
7-14                       (A)  the open meetings law, Chapter 551,
7-15     Government Code;
7-16                       (B)  the public information law, Chapter 552,
7-17     Government Code;
7-18                       (C)  the administrative procedure law, Chapter
7-19     2001, Government Code; and
7-20                       (D)  other laws relating to public officials,
7-21     including conflict of interest laws; and
7-22                 (8)  any applicable ethics policies adopted by the
7-23     board or the Texas Ethics Commission.
7-24           (c)  A person appointed to the board is entitled to
7-25     reimbursement, as provided by the General Appropriations Act, for
7-26     the travel expenses incurred in attending the training program
 8-1     regardless of whether the attendance at the program occurs before
 8-2     or after the person qualifies for office.
 8-3           SECTION 7.  Section 6.106, Water Code, is amended to read as
 8-4     follows:
 8-5           Sec. 6.106.  STANDARDS OF CONDUCT.  The executive
 8-6     administrator or the executive administrator's designee [board]
 8-7     shall provide to [its] members of the board and to agency[,
 8-8     appointees, and] employees, as often as is necessary, information
 8-9     regarding the requirements for office or employment [their
8-10     qualifications] under this code, including information regarding a
8-11     person's [and their] responsibilities under applicable laws
8-12     relating to standards of conduct for state officers or [and]
8-13     employees.
8-14           SECTION 8.  Subchapter D, Chapter 6, Water Code, is amended
8-15     by adding Sections 6.110 and 6.111 to read as follows:
8-16           Sec. 6.110.  CAPITAL SPENDING PLAN.  (a)  Each biennium, the
8-17     executive administrator shall develop and submit to the board for
8-18     its approval a capital spending plan for state-funded programs,
8-19     including the Texas water development fund II, the agricultural
8-20     water conservation fund, and the water assistance fund.
8-21           (b)  The plan must:
8-22                 (1)  identify water funding needs in the state and set
8-23     forth a basis for allocating state-supported funding to address
8-24     those needs; and
8-25                 (2)  if applicable, provide details about:
8-26                       (A)  the reasons state-supported funding was not
 9-1     allocated according to the methodologies identified in prior plans;
 9-2     and
 9-3                       (B)  any adjustments to the plan from prior plans
 9-4     in response to changing water priorities.
 9-5           (c)  In developing the plan, the executive administrator
 9-6     shall consider:
 9-7                 (1)  any commission compliance issues;
 9-8                 (2)  information derived from facility needs
 9-9     assessments or other water and wastewater needs assessments;
9-10                 (3)  regional planning group plans required under
9-11     Section 16.053; and
9-12                 (4)  any other appropriate information.
9-13           (d)  The board shall consider the plan at a regularly
9-14     scheduled meeting and, on approval, submit it to the legislature
9-15     and the Legislative Budget Board before January 1 of each
9-16     odd-numbered year.  The board may include the plan as part of its
9-17     legislative appropriations request.
9-18           Sec. 6.111.  SEPARATION OF RESPONSIBILITIES.  The board shall
9-19     develop and implement policies that clearly separate the
9-20     policy-making responsibilities of the board and the management
9-21     responsibilities of the executive administrator and the staff of
9-22     the board.
9-23           SECTION 9.  Sections 6.154, 6.155, and 6.188, Water Code, are
9-24     amended to read as follows:
9-25           Sec. 6.154.  COMPLAINT FILE.  (a)  The board shall maintain a
9-26     file on each written complaint filed with the board.  The file must
 10-1    include:
 10-2                (1)  the name of the person who filed the complaint;
 10-3                (2)  the date the complaint is received by the board;
 10-4                (3)  the subject matter of the complaint;
 10-5                (4)  the name of each person contacted in relation to
 10-6    the complaint;
 10-7                (5)  a summary of the results of the review or
 10-8    investigation of the complaint; and
 10-9                (6)  an explanation of the reason the file was closed,
10-10    if the agency closed the file without taking action other than to
10-11    investigate the complaint.
10-12          (b)  The board shall provide to the person filing the
10-13    complaint and to each person who is a subject of the complaint a
10-14    copy of the board's policies and procedures relating to complaint
10-15    investigation and resolution [keep an information file about each
10-16    complaint filed with the board relating to an entity regulated by
10-17    the board].
10-18          Sec. 6.155.  NOTICE OF COMPLAINT.  The [If a written
10-19    complaint is filed with the board relating to an entity regulated
10-20    by the board, the] board, at least [as frequently as] quarterly
10-21    [and] until final disposition of the complaint, shall notify the
10-22    person filing the complaint and each person who is a subject of
10-23    [parties to] the complaint of the status of the investigation
10-24    [complaint] unless the notice would jeopardize an undercover
10-25    investigation.
10-26          Sec. 6.188.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  The
 11-1    executive administrator or the executive administrator's [his]
 11-2    designee shall prepare and maintain a written policy statement that
 11-3    implements [to assure implementation of] a program of equal
 11-4    employment opportunity to ensure that all personnel decisions
 11-5    [whereby all personnel transactions] are made without regard to
 11-6    race, color, disability [handicap], sex, religion, age, or national
 11-7    origin.
 11-8          (b)  The policy statement must include:
 11-9                (1)  personnel policies, including policies relating to
11-10    recruitment, evaluation, selection, [appointment,] training, and
11-11    promotion of personnel, that show the intent of the board to avoid
11-12    the unlawful employment practices described by Chapter 21, Labor
11-13    Code; and
11-14                (2)  an [a comprehensive] analysis of the extent to
11-15    which the composition of the board's personnel is in accordance
11-16    with state and federal law and a description of reasonable methods
11-17    to achieve compliance with state and federal law.
11-18          (c)  The policy statement must:
11-19                (1)  be updated annually;
11-20                (2)  be reviewed by the state Commission on Human
11-21    Rights for compliance with Subsection (b)(1); and
11-22                (3)  be filed with the governor's office [work force
11-23    that meets federal and state guidelines;]
11-24                [(3)  procedures by which a determination can be made
11-25    of significant underutilization in the board's work force of all
11-26    persons for whom federal or state guidelines encourage a more
 12-1    equitable balance; and]
 12-2                [(4)  reasonable methods to address appropriately areas
 12-3    of significant underutilization in the board's work force of all
 12-4    persons for whom federal or state guidelines encourage a more
 12-5    equitable balance.]
 12-6          [(b)  The policy statement shall be filed with the governor's
 12-7    office before November 1, 1985, cover an annual period, and be
 12-8    updated at least annually.  The governor's office shall develop a
 12-9    biennial report to the legislature based on the information
12-10    submitted.  This report may be made individually or as a part of
12-11    other biennial reports made to the legislature].
12-12          SECTION 10.  Subchapter F, Chapter 6, Water Code, is amended
12-13    by adding Section 6.196 to read as follows:
12-14          Sec. 6.196.  TRAINING ON STATE EMPLOYEE INCENTIVE PROGRAM.
12-15    The executive administrator or the executive administrator's
12-16    designee shall provide to agency employees information and training
12-17    on the benefits and methods of participation in the state employee
12-18    incentive program under Subchapter B, Chapter 2108, Government
12-19    Code.
12-20          SECTION 11.  Section 11.002, Water Code, is amended by adding
12-21    Subdivision (11) to read as follows:
12-22                (11)  "River basin" means a river or coastal basin
12-23    designated by the board as a river basin under Section 16.051.  The
12-24    term does not include waters originating in the bays or arms of the
12-25    Gulf of Mexico.
12-26          SECTION 12.  Subsection (p), Section 11.085, Water Code, is
 13-1    amended to read as follows:
 13-2          (p)  [For the purposes of this section, a basin is designated
 13-3    as provided in accordance with Section 16.051 of this code.]  A
 13-4    river basin may not be redesignated in order to allow a transfer or
 13-5    diversion of water otherwise in violation of this section.
 13-6          SECTION 13.  Section 15.008, Water Code, is amended to read
 13-7    as follows:
 13-8          Sec. 15.008.  GRANT STANDARDS.  The law regarding uniform
 13-9    grants and contract management, Chapter 783, Government Code,
13-10    [Uniform Grant and Contract Management Act of 1981 (Article
13-11    4413(32g), Vernon's Texas Civil Statutes)] does not apply to a
13-12    contract under Subchapter F, H, [or] K, or P [of this chapter].
13-13          SECTION 14.  Subsection (b), Section 15.011, Water Code, is
13-14    amended to read as follows:
13-15          (b)  After notice and hearing and subject to any limitations
13-16    established by the General Appropriations Act, the board may
13-17    transfer money from the fund to the loan fund created under
13-18    Subchapter C of this chapter, the storage acquisition fund created
13-19    under Subchapter E of this chapter, the research and planning fund
13-20    created under Subchapter F of this chapter, the hydrographic survey
13-21    account created under Subchapter M of this chapter, provided the
13-22    hydrographic survey account transfer does not exceed $425,000,
13-23    [and] the aquatic vegetation management fund created under
13-24    Subchapter N of this chapter, the rural community water and
13-25    wastewater loan fund created under Subchapter O of this chapter,
13-26    and the colonia self-help account created under Subchapter P of
 14-1    this chapter.
 14-2          SECTION 15.  Subsection (c), Section 15.012, Water Code, is
 14-3    amended to read as follows:
 14-4          (c)  Money appropriated to the fund by the legislature for a
 14-5    specific purpose stated in Subchapter C, E, F, M, [or] N, O, or P
 14-6    of this chapter shall be placed in the appropriate fund or account
 14-7    created by that subchapter.
 14-8          SECTION 16.  Subsection (b), Section 15.102, Water Code, is
 14-9    amended to read as follows:
14-10          (b)  The loan fund may also be used by the board to provide
14-11    grants for:
14-12                (1)  projects that include supplying water and
14-13    wastewater services in economically distressed areas, including
14-14    projects involving retail distribution of those services;
14-15                (2)  projects for which federal grant funds are placed
14-16    in the loan fund;
14-17                (3)  projects, on specific legislative appropriation
14-18    for those projects; or
14-19                (4)  desalination, brush control, weather modification,
14-20    regionalization, and projects providing regional water quality
14-21    enhancement services as defined by board rule, including regional
14-22    conveyance systems.
14-23          SECTION 17.  Section 15.104, Water Code, is amended to read
14-24    as follows:
14-25          Sec. 15.104.  FINDINGS REGARDING PERMITS.  (a)  The board
14-26    shall not release funds for the construction of that portion of a
 15-1    project that proposes surface water or groundwater development
 15-2    [deliver funds pursuant to an application for financial assistance
 15-3    from the loan fund] until the executive administrator makes a
 15-4    written finding:
 15-5                (1)  that an applicant proposing surface-water
 15-6    development has the necessary water right authorizing it to
 15-7    appropriate and use the water that the project will provide; or
 15-8                (2)  that an applicant proposing groundwater
 15-9    [underground water] development has the right to use water that the
15-10    project will provide.
15-11          (b)  The board may release funds for the costs of planning,
15-12    engineering, architectural, legal, title, fiscal, or economic
15-13    investigation, studies, surveys, or designs before making the
15-14    finding required under Subsection (a) if the executive
15-15    administrator determines that a reasonable expectation exists that
15-16    the finding will be made before the release of funds for
15-17    construction.
15-18          (c)  If an applicant includes a proposal for a waste water
15-19    treatment plant, the board may not deliver funds for the waste
15-20    water treatment plant until the applicant has received a permit for
15-21    construction and operation of the waste water treatment plant and
15-22    approval of the plans and specifications from the commission.  If
15-23    the applicant proposes a waste water treatment plant that is
15-24    located outside of the jurisdiction of this state and that is not
15-25    subject to the permitting authority of the commission, the board
15-26    must review the plans and specifications in coordination with the
 16-1    commission and find that the waste water treatment plant is capable
 16-2    of producing effluent that will meet federal and state-approved
 16-3    water quality standards.
 16-4          SECTION 18.  Section 15.434, Water Code, is amended to read
 16-5    as follows:
 16-6          Sec. 15.434.  USE OF MONEY IN FUND.  Money deposited to the
 16-7    credit of the agricultural soil and water conservation fund, on
 16-8    appropriation by the legislature to the board, the Department of
 16-9    Agriculture, the State Soil and Water Conservation Board, the Texas
16-10    Agricultural Experiment Station, the Texas Agricultural Extension
16-11    Service, public colleges and universities, and other state agencies
16-12    shall be used for the following purposes:
16-13                (1)  agricultural water conservation technical
16-14    assistance programs;
16-15                (2)  agricultural water conservation, education, and
16-16    demonstration programs;
16-17                (3)  purchase of equipment, including demonstration and
16-18    educational equipment;
16-19                (4)  grants made to groundwater [underground water]
16-20    conservation districts and political subdivisions for the purchase
16-21    of equipment under programs established by Subchapter H of this
16-22    chapter;
16-23                (5)  research in water utilization and conservation
16-24    including artificial recharge and secondary recovery of groundwater
16-25    [underground water];
16-26                (6)  desalination [desalinization];
 17-1                (7)  weather modification;
 17-2                (8)  technical assistance programs for developing
 17-3    on-farm soil and water conservation plans developed jointly by
 17-4    landowners and operators and local soil and water conservation
 17-5    districts, as provided by Subchapter H, Chapter 201, Agriculture
 17-6    Code;
 17-7                (9)  research and demonstration relating to the
 17-8    production of native and low-water-use plants and water-efficient
 17-9    crops;
17-10                (10)  a pilot program for low-interest loans for the
17-11    purchase of agricultural water conservation systems established by
17-12    Subchapter I of this chapter; and
17-13                (11)  research, demonstration, and education relating
17-14    to brush control.
17-15          SECTION 19.  Subsection (a), Section 15.601, Water Code, is
17-16    amended to read as follows:
17-17          (a)  The state water pollution control revolving fund shall
17-18    be administered by the board under this subchapter and rules
17-19    adopted by the board.  The fund shall be used to provide financial
17-20    assistance to political subdivisions for construction of treatment
17-21    works and to persons for nonpoint source pollution control and
17-22    abatement projects under Section 15.603(h), in accordance with the
17-23    capitalization grant program established under the Federal Water
17-24    Pollution Control Act (33 U.S.C. 1251 et seq.).
17-25          SECTION 20.  Section 15.603, Water Code, is amended by
17-26    amending Subsection (a) and adding Subsection (h) to read as
 18-1    follows:
 18-2          (a)  The revolving fund is held separately from other funds
 18-3    by the board outside the State Treasury to provide financial
 18-4    assistance to political subdivisions for construction of treatment
 18-5    works and to persons for nonpoint source pollution control and
 18-6    abatement projects under Subsection (h).
 18-7          (h)  The board may establish a separate account in the
 18-8    revolving fund to be used solely for providing financial assistance
 18-9    to persons for nonpoint source pollution control and abatement
18-10    projects.  The account shall be composed solely of funds
18-11    appropriated by the legislature, funds provided as gifts or grants
18-12    by the United States, interest earnings on amounts credited to the
18-13    account, and repayments of loans made from the account.  The board
18-14    shall adopt rules establishing the criteria for eligibility and the
18-15    terms of assistance for persons that receive financial assistance
18-16    from the account.
18-17          SECTION 21.  Subsection (a), Section 15.804, Water Code, is
18-18    amended to read as follows:
18-19          (a)  On the request of a political subdivision or agency of
18-20    this state or a neighboring state or a federal agency, the board
18-21    may perform [for the political subdivision] a hydrographic survey
18-22    in this state or outside of this state if the information collected
18-23    will benefit this state.  The board may perform a survey under this
18-24    section:
18-25                (1)  to determine:
18-26                      (A)  reservoir storage capacity;
 19-1                      (B)  sedimentation levels;
 19-2                      (C)  rates of sedimentation;
 19-3                      (D)  projected water supply availability; or
 19-4    [and]
 19-5                      (E)  potential mitigative measures; [and]
 19-6                (2)  to conduct [for] other bathymetric studies; or
 19-7                (3)  to collect information relating to water-bearing
 19-8    formations.
 19-9          SECTION 22.  Chapter 15, Water Code, is amended by adding
19-10    Subchapter O to read as follows:
19-11           SUBCHAPTER O.  PILOT PROGRAM FOR WATER AND WASTEWATER
19-12                        LOANS FOR RURAL COMMUNITIES
19-13          Sec. 15.901.  DEFINITIONS.  In this subchapter:
19-14                (1)  "Fund" means the rural community water and
19-15    wastewater loan fund.
19-16                (2)  "Political subdivision" means a municipality, a
19-17    county, or a district or authority created under Section 52,
19-18    Article III, or Section 59, Article XVI, Texas Constitution.
19-19                (3)  "Rural community" means:
19-20                      (A)  a municipality or county with a population
19-21    of less than 5,000; or
19-22                      (B)  a district or authority created under
19-23    Section 52, Article III, or Section 59, Article XVI, Texas
19-24    Constitution, with a population of less than 5,000 that is located
19-25    outside the boundaries or extraterritorial jurisdiction of a
19-26    municipality.
 20-1          Sec. 15.902.  RURAL COMMUNITY WATER AND WASTEWATER LOAN FUND.
 20-2    (a)  The rural community water and wastewater loan fund is an
 20-3    account in the water assistance fund.
 20-4          (b)  The fund consists of:
 20-5                (1)  money transferred to the fund from the water
 20-6    assistance fund under Section 15.011(b);
 20-7                (2)  proceeds from the sale of political subdivision
 20-8    bonds by the board to the Texas Water Resources Finance Authority
 20-9    as provided by Section 17.0871; and
20-10                (3)  repayments of loans made from the fund.
20-11          Sec. 15.903.  FINANCIAL ASSISTANCE.  (a)  The fund may be
20-12    used by the board to provide loans of financial assistance to rural
20-13    communities for the construction, acquisition, or improvement of
20-14    water and wastewater projects.
20-15          (b)  The board may make financial assistance available to a
20-16    rural community by entering into a loan agreement and promissory
20-17    note with the rural community, as provided by this subchapter.  A
20-18    rural community may apply for and accept the financial assistance.
20-19          (c)  The loan agreement must provide for the payment of
20-20    principal and interest on the debt incurred for the project at a
20-21    rate to be determined by the board.
20-22          (d)  The loan agreement must provide for the issuance of a
20-23    promissory note payable to the board to evidence the obligation of
20-24    the rural community to repay the loan made in accordance with the
20-25    terms of the loan agreement.
20-26          (e)  A loan provided under this subchapter may not exceed
 21-1    $250,000 for each project, and the term of a loan may not exceed 20
 21-2    years.
 21-3          Sec. 15.904.  USE OF SALES TAX AS LOAN SECURITY.  (a)  A
 21-4    rural community that is a municipality or county may pledge a
 21-5    percentage of the sales and use tax revenue received under Chapter
 21-6    321 or 323, Tax Code, as applicable, to the payment of debt
 21-7    incurred under a loan agreement entered into with the board under
 21-8    this subchapter if a majority of the voters voting at an election
 21-9    called and held for that purpose authorize the municipality or
21-10    county to pledge a portion of that revenue for that purpose.
21-11          (b)  Sections 321.506, 321.507, and 323.505, Tax Code, do not
21-12    apply to taxes pledged under this subchapter.
21-13          Sec. 15.905.  REVIEW AND APPROVAL OF LOAN AGREEMENT BY
21-14    ATTORNEY GENERAL.  (a)  Before a loan agreement may become
21-15    effective, a record of the proceedings of the board and the rural
21-16    community authorizing the execution of the loan agreement, the loan
21-17    agreement, the promissory note, and any contract providing revenue
21-18    or security to pay the promissory note must be submitted to the
21-19    attorney general for review and approval.
21-20          (b)  If the attorney general finds that the loan agreement
21-21    and the promissory note are valid and binding obligations of the
21-22    rural community, the attorney general shall approve the documents
21-23    and deliver them to the comptroller, the board, and the rural
21-24    community, together with a copy of the attorney general's legal
21-25    opinion stating that approval.
21-26          Sec. 15.906.  REGISTRATION.  On receipt of the documents
 22-1    required by Section 15.905(b), the comptroller shall register the
 22-2    record of the proceedings relating to the execution of a loan
 22-3    agreement.
 22-4          Sec. 15.907.  VALIDITY AND INCONTESTABILITY.  On approval by
 22-5    the attorney general and registration by the comptroller, the loan
 22-6    agreement, the promissory note, a contract providing revenue or
 22-7    security, and any other obligation evidencing the debt are
 22-8    incontestable in a court and are valid, binding, and enforceable
 22-9    according to their terms.
22-10          Sec. 15.908.  ENFORCEMENT BY MANDAMUS.  Payment of
22-11    obligations incurred under a loan agreement and other requirements
22-12    of this subchapter may be enforced in a court by mandamus or other
22-13    appropriate proceedings.
22-14          Sec. 15.909.  RULES.  The board shall adopt necessary rules
22-15    to administer this subchapter, including rules establishing
22-16    procedures for application for and award of loans.
22-17          Sec. 15.910.  APPLICATION FOR ASSISTANCE.  (a)  In an
22-18    application to the board for financial assistance from the fund,
22-19    the rural community must include:
22-20                (1)  the name of the rural community and its principal
22-21    officers;
22-22                (2)  a citation of the law under which the rural
22-23    community operates and was created;
22-24                (3)  a description of the water or wastewater project
22-25    for which the financial assistance will be used;
22-26                (4)  the total cost of the project;
 23-1                (5)  the amount of state financial assistance
 23-2    requested;
 23-3                (6)  the plan for repaying the total cost of the
 23-4    project; and
 23-5                (7)  any other information the board requires in order
 23-6    to perform its duties and to protect the public interest.
 23-7          (b)  The board may not accept an application for a loan of
 23-8    financial assistance from the fund unless it is submitted in
 23-9    affidavit form by the officials of the rural community.  The board
23-10    shall prescribe the affidavit form in its rules.
23-11          (c)  If a rural community has a program of water
23-12    conservation, the rural community shall state in the application
23-13    that the rural community has such a program.
23-14          Sec. 15.911.  FINDINGS REGARDING PERMITS.  (a)  The board may
23-15    not release funds for the construction phase of that portion of a
23-16    project that proposes surface water or groundwater development
23-17    until the executive administrator makes a written finding:
23-18                (1)  that a rural community proposing surface water
23-19    development has the necessary water right authorizing it to
23-20    appropriate and use the water that the project will provide; or
23-21                (2)  that a rural community proposing groundwater
23-22    development has the right to use water that the project will
23-23    provide.
23-24          (b)  If a rural community includes a proposal for a
23-25    wastewater treatment project, the board may not release funds for
23-26    the project construction until the rural community has received a
 24-1    permit for the construction and operation of the project and
 24-2    approval of the plans and specifications for the project in a
 24-3    manner that will satisfy commission requirements for design
 24-4    criteria and permit conditions that apply to construction
 24-5    activities.
 24-6          Sec. 15.912.  CONSIDERATIONS IN ACTING ON APPLICATION.  In
 24-7    acting on an application for financial assistance, the board shall
 24-8    consider:
 24-9                (1)  the needs of the area to be served by the project
24-10    and the benefit of the project to the area in relation to the needs
24-11    of other areas requiring state assistance in any manner and the
24-12    benefits of those projects to the other areas;
24-13                (2)  the availability of revenue to the rural community
24-14    from all sources for the ultimate repayment of the cost of the
24-15    project, including all interest;
24-16                (3)  the relationship of the project to overall
24-17    statewide needs; and
24-18                (4)  any other factors that the board considers
24-19    relevant.
24-20          Sec. 15.913.  APPROVAL OF APPLICATION.  The board by
24-21    resolution may approve an application for a loan if, after
24-22    considering the factors listed in Section 15.912 and any other
24-23    relevant factors, the board finds that:
24-24                (1)  the public interest requires state participation
24-25    in the project; and
24-26                (2)  the revenue or taxes pledged by the rural
 25-1    community will be sufficient to meet all the obligations assumed by
 25-2    the rural community during the succeeding period of not more than
 25-3    20 years.
 25-4          Sec. 15.914.  CONSTRUCTION CONTRACT REQUIREMENTS.  The
 25-5    governing body of each rural community receiving financial
 25-6    assistance from the board under this subchapter shall require in
 25-7    all contracts for the construction of a project that:
 25-8                (1)  each bidder furnish a bid guarantee equivalent to
 25-9    five percent of the bid price;
25-10                (2)  each contractor awarded a construction contract
25-11    furnish performance and payment bonds as follows:
25-12                      (A)  the performance bond must include guarantees
25-13    that work done under the contract will be completed and performed
25-14    according to approved plans and specifications and in accordance
25-15    with sound construction principles and practices; and
25-16                      (B)  the performance and payment bonds must be in
25-17    a penal sum of not less than 100 percent of the contract price and
25-18    remain in effect for one year after the date of approval by the
25-19    engineer of the political subdivision;
25-20                (3)  payment be made in partial payments as the work
25-21    progresses;
25-22                (4)  each partial payment not exceed 95 percent of the
25-23    amount due at the time of the payment as shown by the engineer of
25-24    the project, but, if the project is substantially complete, a
25-25    partial release of the five percent retainage may be made by the
25-26    rural community with approval of the executive administrator;
 26-1                (5)  payment of the retainage remaining due on
 26-2    completion of the contract be made only after:
 26-3                      (A)  approval by the engineer for the rural
 26-4    community as required under the bond proceedings;
 26-5                      (B)  approval by the governing body of the rural
 26-6    community by a resolution or other formal action; and
 26-7                      (C)  certification by the executive administrator
 26-8    in accordance with the rules of the board that the work to be done
 26-9    under the contract has been completed and performed in a
26-10    satisfactory manner and in accordance with sound engineering
26-11    principles and practices;
26-12                (6)  no valid approval be granted unless the work done
26-13    under the contract has been completed and performed in a
26-14    satisfactory manner according to approved plans and specifications;
26-15    and
26-16                (7)  labor from inside the rural community be used to
26-17    the extent possible.
26-18          Sec. 15.915.  FILING CONSTRUCTION CONTRACT.  The rural
26-19    community shall file with the board a certified copy of each
26-20    construction contract it enters into for the construction of all or
26-21    part of a project.  Each contract must contain or have attached to
26-22    it the specifications, plans, and details of all work included in
26-23    the contract.
26-24          Sec. 15.916.  INSPECTION OF PROJECTS.  (a)  The board may
26-25    inspect the construction of a project at any time to assure that:
26-26                (1)  the contractor is substantially complying with the
 27-1    approved engineering plans of the project; and
 27-2                (2)  the contractor is constructing the project in
 27-3    accordance with sound engineering principles.
 27-4          (b)  Inspection of a project by the board does not subject
 27-5    the state to any civil liability.
 27-6          Sec. 15.917.  ALTERATION OF PLANS.  After the executive
 27-7    administrator approves the engineering plans, a rural community may
 27-8    not make any substantial or material alteration in the plans unless
 27-9    the executive administrator authorizes the alteration.  The board
27-10    shall review and approve or disapprove plans and specifications for
27-11    all sewage collection, treatment, and disposal systems for which
27-12    financial assistance is provided from the fund in a manner that
27-13    will satisfy commission requirements for design criteria and permit
27-14    conditions that apply to construction activities.
27-15          Sec. 15.918.  CERTIFICATE OF APPROVAL.  The executive
27-16    administrator may consider the following as grounds for refusal to
27-17    give a certificate of approval for any construction contract:
27-18                (1)  failure to construct the project according to the
27-19    approved plans;
27-20                (2)  failure to construct the works in accordance with
27-21    sound engineering principles; or
27-22                (3)  failure to comply with any term of the contract.
27-23          Sec. 15.919.  REPORT TO LEGISLATURE.  (a)  Not later than
27-24    January 1, 2005, the board shall report to the legislature on the
27-25    program established under this subchapter.
27-26          (b)  The report must include:
 28-1                (1)  the number of applications received;
 28-2                (2)  the number of loans funded;
 28-3                (3)  the types of projects funded;
 28-4                (4)  the total funds allocated;
 28-5                (5)  available performance measures; and
 28-6                (6)  the expected feasibility of and demand for an
 28-7    expanded rural community water and wastewater loan program.
 28-8          Sec. 15.920.  AUTHORITY OF RURAL COMMUNITIES.  Rural
 28-9    communities that receive financial assistance from the fund are
28-10    granted all necessary authority to enter into loan agreements and
28-11    issue promissory notes in connection with the financial assistance
28-12    granted under this subchapter.
28-13          SECTION 23.  Chapter 15, Water Code, is amended by adding
28-14    Subchapter P to read as follows:
28-15                 SUBCHAPTER P.  COLONIA SELF-HELP PROGRAM
28-16          Sec. 15.951.  DEFINITIONS.  In this subchapter:
28-17                (1)  "Account" means the colonia self-help account.
28-18                (2)  "Colonia" means a geographic area that:
28-19                      (A)  is an economically distressed area as
28-20    defined by Section 17.921; and
28-21                      (B)  is located in a county any part of which is
28-22    within 50 miles of an international border.
28-23                (3)  "Program" means the colonia self-help program
28-24    established under this subchapter.
28-25                (4)  "Retail public utility" has the meaning assigned
28-26    by Section 13.002.
 29-1                (5)  "Self-help project" means a project in which the
 29-2    people who will benefit from the project actively participate.
 29-3          Sec. 15.952.  CREATION OF ACCOUNT.  (a)  The colonia
 29-4    self-help account is an account in the general revenue fund that
 29-5    may be appropriated only for the purposes of this subchapter.
 29-6          (b)  The account consists of:
 29-7                (1)  money transferred by the legislature directly to
 29-8    the account;
 29-9                (2)  money transferred at the board's discretion from
29-10    the fund;
29-11                (3)  gifts, grants, or donations to the account; and
29-12                (4)  interest earned on money credited to the account.
29-13          (c)  Sections 403.095 and 404.071, Government Code, do not
29-14    apply to the account.
29-15          Sec. 15.953.  USE OF ACCOUNT.  (a)  The board may use funds
29-16    in the account only to reimburse nonprofit organizations eligible
29-17    under Section 15.954 for expenses incurred in a self-help project
29-18    that results in the provision of adequate water or wastewater
29-19    services to a colonia.  Expenses that may be reimbursed include:
29-20                (1)  construction expenses;
29-21                (2)  facility planning expenses;
29-22                (3)  platting expenses;
29-23                (4)  surveying expenses;
29-24                (5)  engineering expenses;
29-25                (6)  equipment expenses; and
29-26                (7)  other expenses necessary to provide water or
 30-1    wastewater services to the colonia, as determined appropriate by
 30-2    the board.
 30-3          (b)  The board may award a grant under the program directly
 30-4    to a nonprofit organization to reimburse the organization for
 30-5    expenses incurred in a self-help project described by Subsection
 30-6    (a).
 30-7          Sec. 15.954.  ELIGIBLE NONPROFIT ORGANIZATIONS.  To be
 30-8    eligible to receive a grant under the program, an organization
 30-9    must:
30-10                (1)  apply for the grant;
30-11                (2)  qualify for an exemption from federal income taxes
30-12    under Section 501(c)(3), Internal Revenue Code of 1986, as amended;
30-13    and
30-14                (3)  as of January 1, 2001, have a demonstrated record
30-15    of completing in coordination with a retail public utility
30-16    construction of self-help projects described by Section 15.953(a).
30-17          Sec. 15.955.  GRANT APPLICATION.  An eligible nonprofit
30-18    organization must apply to the board for a grant under the program
30-19    before incurring any expense associated with a self-help project
30-20    described by Section 15.953(a).  The application must include:
30-21                (1)  the name of the nonprofit organization, the names
30-22    of the organization's principal officers, and verification of the
30-23    organization's 501(c)(3) status;
30-24                (2)  a description of the project area, the anticipated
30-25    number of water and wastewater connections to be made, and the
30-26    anticipated number of colonia residents to be served;
 31-1                (3)  a description of the existing water and wastewater
 31-2    facilities in the colonia;
 31-3                (4)  a description of the project and the aspect of the
 31-4    project for which the grant will be used;
 31-5                (5)  a description of the anticipated participation in
 31-6    the project by residents of the colonia;
 31-7                (6)  the estimated total cost of both the project and
 31-8    the aspect of the project for which the grant will be used;
 31-9                (7)  the amount of the grant that is requested from the
31-10    account and the sources of funding for the entire project;
31-11                (8)  from a retail public utility authorized to provide
31-12    water or wastewater services to the colonia, a resolution in which
31-13    the retail public utility:
31-14                      (A)  agrees to inspect the project during and
31-15    after construction to ensure the adequacy of the project; and
31-16                      (B)  commits to provide the water or wastewater
31-17    services that the project intends to use; and
31-18                (9)  any other information required by the board.
31-19          Sec. 15.956.  BOARD CONSIDERATIONS IN EVALUATING GRANT
31-20    APPLICATION.  In evaluating an application for a grant under the
31-21    program, the board shall consider:
31-22                (1)  the number, quality, and character of projects
31-23    previously completed by the applicant; and
31-24                (2)  the capability of the retail public utility to
31-25    provide water or wastewater services to the colonia on completion
31-26    of the project.
 32-1          Sec. 15.957.  ACTION ON GRANT APPLICATION.  (a)  Not later
 32-2    than the 60th day after the date the board receives a complete
 32-3    application for a grant under the program, the board by written
 32-4    resolution shall:
 32-5                (1)  approve the application; or
 32-6                (2)  disapprove the application.
 32-7          (b)  On approval of an application, the board shall authorize
 32-8    the executive administrator of the board to execute a contract with
 32-9    the applicant for a grant to reimburse eligible expenses.  The
32-10    contract may provide a budget, schedule, terms for payment of
32-11    funds, and any other terms the board or its executive administrator
32-12    considers appropriate.
32-13          Sec. 15.958.  RULES.  The board shall adopt rules necessary
32-14    to administer the program established under this subchapter.
32-15          Sec. 15.959.  CO-ADMINISTRATION.  The program shall be
32-16    co-administered by the office of the secretary of state until the
32-17    second anniversary of the date on which the program begins
32-18    operations under this subchapter.
32-19          SECTION 24.  Subchapter B, Chapter 16, Water Code, is amended
32-20    by amending Section 16.021 and adding Section 16.022 to read as
32-21    follows:
32-22          Sec. 16.021.  TEXAS NATURAL RESOURCES INFORMATION SYSTEM.
32-23    (a)  The executive administrator shall establish the Texas Natural
32-24    Resources Information System (TNRIS) to serve Texas agencies and
32-25    citizens as a centralized clearinghouse and referral center for
32-26    natural resource, census, and other socioeconomic data.
 33-1          (b)  The executive administrator may, on behalf of TNRIS,
 33-2    enter into partnerships with private entities to provide additional
 33-3    funding for improved access to TNRIS information.  The board shall
 33-4    adopt administrative rules to describe the process of establishing
 33-5    partnerships, define the types of partnerships that may be formed,
 33-6    establish the fee collection process, and define the
 33-7    nondiscriminatory methods used to determine which private entities
 33-8    may enter into partnerships.  Any process developed by the board
 33-9    must comply with all applicable laws regarding ethics, purchasing,
33-10    and contracts.
33-11          (c)  The Texas Geographic Information Council (TGIC) is
33-12    created to provide strategic planning and coordination in the
33-13    acquisition and use of geo-spatial data and related technologies in
33-14    the State of Texas.  The executive administrator and the executive
33-15    director of the Department of Information Resources shall designate
33-16    entities to be members of the TGIC.  The chief administrative
33-17    officer of each member entity shall select one representative to
33-18    serve on the TGIC.  The duties of the TGIC shall include providing
33-19    guidance to the executive administrator in carrying out the
33-20    executive administrator's [his] duties under this section and
33-21    guidance to the Department of Information Resources for development
33-22    of rules related to statewide geo-spatial data and technology
33-23    standards.
33-24          (d)  Member entities of the TGIC that are state agencies
33-25    shall, and member entities that are not state agencies may, provide
33-26    information to the TGIC about their investments in geographic
 34-1    information and plans for its use.  Not later than September 1 of
 34-2    each even-numbered year, the TGIC shall prepare and provide to the
 34-3    board, the Department of Information Resources, the governor, and
 34-4    the legislature a plan that inventories known state agency
 34-5    geographic information systems projects and recommends initiatives
 34-6    to improve the state's geographic information systems programs.
 34-7          (e) [(c)]  Under the guidance of the TGIC, the executive
 34-8    administrator shall:
 34-9                (1)  further develop the Texas Natural Resources
34-10    Information System by promoting and providing for effective
34-11    acquisition, archiving, documentation, indexing, and dissemination
34-12    of natural resource and related digital and nondigital data and
34-13    information;
34-14                (2)  obtain information in response to disagreements
34-15    regarding names and name spellings for natural and cultural
34-16    features in the state and provide this information to the Board on
34-17    Geographic Names of the United States Department of the Interior;
34-18                (3)  make recommendations to the Board on Geographic
34-19    Names of the United States Department of the Interior for naming
34-20    any natural or cultural feature subject to the limitations provided
34-21    by Subsection (f) [(d) of this section];
34-22                (4)  make recommendations to the Department of
34-23    Information Resources to adopt and promote standards that
34-24    facilitate sharing of digital natural resource data and related
34-25    socioeconomic data among federal, state, and local governments and
34-26    other interested parties;
 35-1                (5)  acquire and disseminate natural resource and
 35-2    related socioeconomic data describing the Texas-Mexico border
 35-3    region; and
 35-4                (6)  coordinate, conduct, and facilitate the
 35-5    development, maintenance, and use of mutually compatible statewide
 35-6    digital base maps depicting natural resources and man-made
 35-7    features.
 35-8          (f) [(d)]  A recommendation may not be made under
 35-9    [Subdivision (3) of] Subsection (e)(3) [(c) of this section] for:
35-10                (1)  a feature previously named under statutory
35-11    authority or recognized by an agency of the federal government, the
35-12    state, or a political subdivision of the state;
35-13                (2)  a feature located on private property for which
35-14    consent of the property owner cannot be obtained; or
35-15                (3)  naming a natural or cultural feature for a living
35-16    person.
35-17          Sec. 16.022.  WATER CONSERVATION STUDY.  (a)  The board and
35-18    the State Soil and Water Conservation Board shall jointly conduct a
35-19    study of the ways to improve or expand water conservation efforts
35-20    and report to the legislature.
35-21          (b)  The report must include:
35-22                (1)  an assessment of both agricultural and municipal
35-23    water conservation issues;
35-24                (2)  information on existing conservation efforts by
35-25    the board and the State Soil and Water Conservation Board;
35-26                (3)  information on existing conservation efforts by
 36-1    municipalities receiving funding from the board, as specified in
 36-2    water conservation plans submitted by the municipalities as part of
 36-3    their applications for assistance;
 36-4                (4)  a discussion of future conservation needs;
 36-5                (5)  an analysis of programmatic approaches and funding
 36-6    for additional conservation efforts;
 36-7                (6)  an assessment of existing statutory authority and
 36-8    whether changes are needed to more effectively promote and fund
 36-9    conservation projects; and
36-10                (7)  an assessment of the board's agricultural water
36-11    conservation program.
36-12          (c)  The report shall be issued as part of, or as a
36-13    supplement to, the state water plan.
36-14          SECTION 25.  Subsection (j), Section 16.053, Water Code, is
36-15    amended to read as follows:
36-16          (j)  The board may provide financial assistance to political
36-17    subdivisions under Subchapters E and F of this chapter, Subchapters
36-18    C, D, E, F, [and] J, and O, Chapter 15, and Subchapters D, I, K,
36-19    and L, Chapter 17, for water supply projects only if:
36-20                (1)  the board determines that the needs to be
36-21    addressed by the project will be addressed in a manner that is
36-22    consistent with the state water plan; and
36-23                (2)  beginning January 5, 2002, the board:
36-24                      (A)  has approved a regional water plan as
36-25    provided by Subsection (i), and any required updates of the plan,
36-26    for the region of the state that includes the area benefiting from
 37-1    the proposed project; and
 37-2                      (B)  determines that the needs to be addressed by
 37-3    the project will be addressed in a manner that is consistent with
 37-4    that regional water plan.
 37-5          SECTION 26.  Section 16.136, Water Code, is amended to read
 37-6    as follows:
 37-7          Sec. 16.136.  FACILITIES WANTED BY POLITICAL SUBDIVISION.
 37-8    The board may acquire all or part [up to 50 percent] of any
 37-9    authorized facility to the extent that the board finds that the
37-10    political subdivision:
37-11                (1)  is willing and reasonably able to finance that
37-12    portion [at least 50 percent] of the cost of the facility that the
37-13    board does not acquire;
37-14                (2)  has obtained all necessary permits;
37-15                (3)  has proposals that are consistent with the
37-16    objectives of the state water plan; and
37-17                (4)  has a program of water conservation for the more
37-18    efficient use of water as required by Section 15.106 of this code.
37-19          SECTION 27.  Subsection (g), Section 16.343, Water Code, is
37-20    amended to read as follows:
37-21          (g)  Before [filing] an application for funds [for facility
37-22    engineering] under Section 15.407 or Subchapter P, Chapter 15, [of
37-23    this code] or [financial assistance under] Subchapter K, Chapter
37-24    17, may be considered by the board [of this code], a political
37-25    subdivision must adopt the model rules pursuant to this section.
37-26    If the applicant is [or, in the case of] a district, [or] nonprofit
 38-1    water supply corporation, or colonia, the applicant must be located
 38-2    in a city or county that has adopted such rules.  Applicants for
 38-3    funds under Section 15.407 or Subchapter P, Chapter 15, or
 38-4    Subchapter K, Chapter 17, may not receive funds under those
 38-5    provisions unless the applicable political subdivision [An affected
 38-6    county may not receive funds under either Section 15.407 of this
 38-7    code or Subchapter K, Chapter 17, of this code unless the county]
 38-8    adopts and enforces the model rules.
 38-9          SECTION 28.  Subsection (g), Section 17.0871, Water Code, is
38-10    amended to read as follows:
38-11          (g)  The accrued interest portion of proceeds from the sale
38-12    of political subdivision bonds shall be disposed of as otherwise
38-13    provided by this chapter.  Money not applied to discharges,
38-14    payments, or redemptions shall be deposited in the development
38-15    fund, the administrative fund, the water assistance fund, or the
38-16    agricultural water conservation fund, as appropriate, to be used
38-17    for the purposes provided by law.
38-18          SECTION 29.  Section 17.123, Water Code, is amended to read
38-19    as follows:
38-20          Sec. 17.123.  FINDINGS REGARDING PERMITS.  (a) The board
38-21    shall not release funds for the construction of that portion of a
38-22    project that proposes surface water or groundwater development
38-23    [deliver funds pursuant to an application for financial assistance]
38-24    until the executive administrator makes a written finding:
38-25                (1)  that an applicant proposing surface-water
38-26    development has the necessary water right authorizing it to
 39-1    appropriate and use the water which the water supply project will
 39-2    provide; or
 39-3                (2)  that an applicant proposing groundwater
 39-4    [underground water] development has the right to use water that the
 39-5    water supply project will provide.
 39-6          (b)  The board may release funds for the costs of planning,
 39-7    engineering, architectural, legal, title, fiscal, or economic
 39-8    investigation, studies, surveys, or designs before making the
 39-9    finding required under Subsection (a) if the executive
39-10    administrator determines that a reasonable expectation exists that
39-11    the finding will be made before the release of funds for
39-12    construction.
39-13          SECTION 30.  Subdivision (7), Section 17.871, Water Code, is
39-14    amended to read as follows:
39-15                (7)  "Loan" means a loan from the board to a lender
39-16    district under this subchapter, except as provided by Section
39-17    17.894(b).
39-18          SECTION 31.  Section 17.894, Water Code, is amended to read
39-19    as follows:
39-20          Sec. 17.894.  USE OF FUND.  (a)  The board may use money in
39-21    the fund to make conservation loans directly to borrower districts,
39-22    to make loans to lender districts, and to pay the cost of bond
39-23    issuance.
39-24          (b)  The board may use money in the fund:
39-25                (1)  to make loans to political subdivisions other than
39-26    lender districts for agricultural water conservation projects;
 40-1                (2)  to make grants to political subdivisions for
 40-2    agricultural water conservation projects as provided by legislative
 40-3    appropriation; or
 40-4                (3)  to make grants to a state agency for the funding
 40-5    of any agricultural water conservation program of that agency,
 40-6    including a program in which the state agency provides funding to a
 40-7    political subdivision or a person for agricultural water
 40-8    conservation, as provided by legislative appropriation.
 40-9          SECTION 32.  Section 17.903, Water Code, is amended by
40-10    amending Subsection (b) and adding Subsection (c) to read as
40-11    follows:
40-12          (b)  The board by rule may establish:
40-13                (1)  procedures for applying for a loan or grant under
40-14    Section 17.894(b);
40-15                (2)  procedures for considering and approving
40-16    applications and for making loans or grants under Section
40-17    17.894(b); and
40-18                (3)  the rate of interest the board charges, if any,
40-19    for loans under Section 17.894(b).
40-20          (c)  The board shall have the power to enter into any
40-21    contracts to carry out the provisions of this subchapter.
40-22          SECTION 33.  Section 17.928, Water Code, is amended to read
40-23    as follows:
40-24          Sec. 17.928.  FINDINGS REGARDING PERMITS.  (a)  The board
40-25    shall [may] not release funds for the construction of that portion
40-26    of a project that proposes surface water or groundwater development
 41-1    [deliver funds pursuant to an application for financial assistance]
 41-2    until the executive administrator makes a written finding:
 41-3                (1)  that an applicant proposing surface-water
 41-4    development has the necessary water right authorizing it to
 41-5    appropriate and use the water that the water supply project will
 41-6    provide; or
 41-7                (2)  that an applicant proposing groundwater
 41-8    [underground water] development has the right to use water that the
 41-9    water supply project will provide.
41-10          (b)  The board may release funds for the costs of planning,
41-11    engineering, architectural, legal, title, fiscal, or economic
41-12    investigation, studies, surveys, or designs before making the
41-13    finding required under Subsection (a) if the executive
41-14    administrator determines that a reasonable expectation exists that
41-15    the finding will be made before the release of funds for
41-16    construction.
41-17          (c)  If an applicant includes a proposal for treatment works,
41-18    the board may not deliver funds for the treatment works until the
41-19    applicant has received a permit for construction and operation of
41-20    the treatment works and approval of the plans and specifications
41-21    from the commission or unless such a permit is not required by the
41-22    commission.
41-23          SECTION 34.  Section 36.001, Water Code, is amended by adding
41-24    Subdivision (18) to read as follows:
41-25                (18)  "Public water supply well" means, for purposes of
41-26    a district governed by this chapter, a well that produces the
 42-1    majority of its water for use by a public water system.
 42-2          SECTION 35.  The heading to Subchapter Z, Chapter 2306,
 42-3    Government Code, is amended to read as follows:
 42-4            SUBCHAPTER Z.  COLONIAS [COLONIA SELF-HELP CENTERS]
 42-5          SECTION 36.  Sections 2306.584 and 2306.585, Government Code,
 42-6    are amended to read as follows:
 42-7          Sec. 2306.584.  COLONIA RESIDENT ADVISORY COMMITTEE.
 42-8    (a)  The department shall appoint not fewer than five persons who
 42-9    are residents of colonias to serve on the Colonia Resident Advisory
42-10    Committee [an advisory committee].  The members of the advisory
42-11    committee shall be selected from lists of candidates submitted to
42-12    the department by local nonprofit organizations and the
42-13    commissioners court of a county in which a self-help center is
42-14    located.
42-15          (b)  The department shall appoint one committee member to
42-16    represent each of the counties in which self-help centers are
42-17    located.  Each committee member:
42-18                (1)  must be a resident of a colonia in the county the
42-19    member represents; and
42-20                (2)  may not be a board member, contractor, or employee
42-21    of or have any ownership interest in an entity that is awarded a
42-22    contract under this subchapter.
42-23          Sec. 2306.585.  DUTIES OF COLONIA RESIDENT ADVISORY
42-24    COMMITTEE.  (a)  The Colonia Resident Advisory Committee
42-25    [committee] shall advise the department regarding:
42-26                (1)  the needs of colonia residents;
 43-1                (2)  appropriate and effective programs that are
 43-2    proposed or are operated through the self-help centers; and
 43-3                (3)  activities that may be undertaken through the
 43-4    self-help centers to better serve the needs of colonia residents.
 43-5          (b)  The advisory committee shall meet before the 30th day
 43-6    preceding the date on which a contract is scheduled to be awarded
 43-7    for the operation of a self-help center and may meet at other
 43-8    times.
 43-9          SECTION 37.  Subchapter Z, Chapter 2306, Government Code, is
43-10    amended by adding Section 2306.590 to read as follows:
43-11          Sec. 2306.590.  COLONIA INITIATIVES ADVISORY COMMITTEE.
43-12    (a)  The Colonia Initiatives Advisory Committee is composed of
43-13    seven members appointed by the governor as follows:
43-14                (1)  one colonia resident;
43-15                (2)  one representative of a nonprofit organization
43-16    that serves colonia residents;
43-17                (3)  one representative of a political subdivision that
43-18    contains all or part of a colonia;
43-19                (4)  one person to represent private interests in
43-20    banking or land development;
43-21                (5)  one representative of a nonprofit utility;
43-22                (6)  one representative of an engineering consultant
43-23    firm involved in economically distressed areas program projects
43-24    under Subchapter K, Chapter 17, Water Code; and
43-25                (7)  one public member.
43-26          (b)  Each committee member, except the public member, must
 44-1    reside within 150 miles of the Texas-Mexico border.
 44-2          (c)  The secretary of state is an ex officio member of the
 44-3    committee.
 44-4          (d)  The committee shall:
 44-5                (1)  review the progress of colonia water and
 44-6    wastewater infrastructure projects managed by the Texas Water
 44-7    Development Board and the state agency responsible for
 44-8    administering the portion of the federal community development
 44-9    block grant nonentitlement program that addresses the
44-10    infrastructure needs of colonias;
44-11                (2)  present an update and make recommendations to the
44-12    board and the Texas Water Development Board annually at the joint
44-13    meeting required by Section 6.060(d), Water Code, regarding:
44-14                      (A)  efforts to ensure that colonia residents are
44-15    connected to the infrastructure funded by state agencies;
44-16                      (B)  the financial, managerial, and technical
44-17    capabilities of project owners and operators;
44-18                      (C)  the agencies' management of their colonia
44-19    programs and the effectiveness of their policies regarding
44-20    underperforming projects; and
44-21                      (D)  any other issues related to the effect of
44-22    state-managed infrastructure programs on colonia residents;
44-23                (3)  review public comments regarding the colonia needs
44-24    assessment incorporated into the state low income housing plan
44-25    under Section 2306.0721; and
44-26                (4)  based on the public comments reviewed under
 45-1    Subdivision (3), recommend to the board new colonia programs or
 45-2    improvements to existing colonia programs.
 45-3          SECTION 38.  Section 11.32, Tax Code, is amended to read as
 45-4    follows:
 45-5          Sec. 11.32.  CERTAIN WATER CONSERVATION INITIATIVES.  The
 45-6    governing body of a taxing unit by official action of the governing
 45-7    body adopted in the manner required by law for official actions may
 45-8    exempt from taxation part or all of the assessed value of property
 45-9    on which approved water conservation initiatives, desalination
45-10    projects, or brush control initiatives have been implemented.  For
45-11    purposes of this section, approved water conservation,
45-12    desalination, and brush control initiatives shall be designated
45-13    pursuant to an ordinance or other law adopted by the governing
45-14    unit.
45-15          SECTION 39.  Subchapter H, Chapter 151, Tax Code, is amended
45-16    by adding Section 151.355 to read as follows:
45-17          Sec. 151.355.  WATER-RELATED EXEMPTIONS.  The following are
45-18    exempted from taxes imposed by this chapter:
45-19                (1)  rainwater harvesting equipment or supplies, water
45-20    recycling and reuse equipment or supplies, or other equipment,
45-21    services, or supplies used to reduce or eliminate water use;
45-22                (2)  equipment, services, or supplies used for
45-23    desalination of surface water or groundwater;
45-24                (3)  equipment, services, or supplies used for brush
45-25    control designed to enhance the availability of water;
45-26                (4)  equipment, services, or supplies used for
 46-1    precipitation enhancement;
 46-2                (5)  equipment, services, or supplies used to construct
 46-3    or operate a water or wastewater system certified by the Texas
 46-4    Natural Resource Conservation Commission as a regional system; and
 46-5                (6)  equipment, services, or supplies used to construct
 46-6    or operate a water supply or wastewater system by a private entity
 46-7    as a public-private partnership as certified by the political
 46-8    subdivision that is a party to the project.
 46-9          SECTION 40.  (a)  The Texas Water Development Board shall
46-10    adopt, not later than March 1, 2002, necessary rules to administer
46-11    the pilot program for water and wastewater loans for rural
46-12    communities created by Subchapter O, Chapter 15, Water Code, as
46-13    added by this Act.
46-14          (b)  The Texas Water Development Board shall begin, not later
46-15    than September 1, 2002, to provide loans under Subchapter O,
46-16    Chapter 15, Water Code, as added by this Act.
46-17          SECTION 41.  The Texas Water Development Board is required to
46-18    implement the colonia self-help program under Subchapter P, Chapter
46-19    15, Water Code, as added by this Act, only if the legislature
46-20    appropriates money specifically for that purpose.  If the
46-21    legislature does not appropriate money specifically for that
46-22    purpose, the Texas Water Development Board may, but is not required
46-23    to, implement the colonia self-help program using other
46-24    appropriations available for that purpose.
46-25          SECTION 42.  The changes in law made by this Act in the
46-26    prohibitions and qualifications applying to members of the Texas
 47-1    Water Development Board do not affect the entitlement of a member
 47-2    serving on the board immediately before September 1, 2001, to
 47-3    continue to serve and function as a member of the board for the
 47-4    remainder of the member's term.  The changes in law apply only to a
 47-5    member appointed on or after September 1, 2001.
 47-6          SECTION 43.  If Senate Bill No. 322, 77th Legislature,
 47-7    Regular Session, 2001, becomes law and if that bill provides for
 47-8    the creation of a Colonia Resident Advisory Committee, a Colonia
 47-9    Initiatives Advisory Committee, or a committee having another name
47-10    that has functions similar to those of the Colonia Resident
47-11    Advisory Committee or the Colonia Initiatives Advisory Committee
47-12    created by this Act, it is the intent of the legislature that this
47-13    Act govern all matters relating to the committees and that the
47-14    provisions of Senate Bill No. 322 relating to the committees have
47-15    no effect.
47-16          SECTION 44.  This Act takes effect September 1, 2001.
                                                                S.B. No. 312
            _______________________________     _______________________________
                President of the Senate              Speaker of the House
                  I hereby certify that S.B. No. 312 passed the Senate on
            April 30, 2001, by a viva-voce vote; May 22, 2001, Senate refused
            to concur in House amendments and requested appointment of
            Conference Committee; May 24, 2001, House granted request of the
            Senate; May 27, 2001, Senate adopted Conference Committee Report by
            a viva-voce vote.
                                                _______________________________
                                                    Secretary of the Senate
                  I hereby certify that S.B. No. 312 passed the House, with
            amendments, on May 21, 2001, by a non-record vote; May 24, 2001,
            House granted request of the Senate for appointment of Conference
            Committee; May 27, 2001, House adopted Conference Committee Report
            by a non-record vote.
                                                _______________________________
                                                    Chief Clerk of the House
            Approved:
            _______________________________
                         Date
            _______________________________
                       Governor