By: Bailey, et al. (Senate Sponsor - Gallegos) H.B. No. 467
(In the Senate - Received from the House April 21, 2005;
April 22, 2005, read first time and referred to Committee on
Natural Resources; May 17, 2005, reported adversely, with
favorable Committee Substitute by the following vote: Yeas 10,
Nays 0; May 17, 2005, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 467 By: Staples
A BILL TO BE ENTITLED
AN ACT
relating to the financing of water and sewer programs in
disadvantaged areas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 17, Water Code, is amended by adding
Subchapter K-1 to read as follows:
SUBCHAPTER K-1. STATEWIDE ASSISTANCE TO ECONOMICALLY DISTRESSED
AREAS FOR WATER SUPPLY AND SEWER SERVICE PROJECTS
Sec. 17.941. DEFINITIONS. In this subchapter:
(1) "Economically distressed area" means an area in
this state in which:
(A) water supply or sewer services are inadequate
to meet minimal needs of residential users as defined by board rule;
(B) financial resources are inadequate to
provide water supply and sewer services that will satisfy those
needs; and
(C) an established residential subdivision was
located on June 1, 2005, as determined by the board.
(2) "Financial assistance" means the funds provided by
the board to political subdivisions for water supply or sewer
services under this subchapter.
(3) "Political subdivision" means a county, a
municipality, a nonprofit water supply corporation created and
operating under Chapter 67, or a district or authority created
under Section 52, Article III, or Section 59, Article XVI, Texas
Constitution.
(4) "Sewer services" and "sewer facilities" mean
treatment works or individual, on-site, or cluster treatment
systems such as septic tanks and include drainage facilities and
other improvements for proper functioning of the sewer services and
other facilities.
Sec. 17.942. FINANCIAL ASSISTANCE. The economically
distressed areas program account may be used by the board to provide
financial assistance to political subdivisions for the
construction, acquisition, or improvement of water supply and sewer
services, including providing money from the account for the
state's participation in federal programs that provide assistance
to political subdivisions. Money from the proceeds of bonds issued
under the authority of Section 49-d-7(b) or 49-d-8, Article III,
Texas Constitution, may not be used to provide financial assistance
under this subchapter.
Sec. 17.943. APPLICATION FOR FINANCIAL ASSISTANCE. (a) A
political subdivision may apply to the board for financial
assistance under this subchapter by submitting an application
together with a plan for providing water supply or sewer services to
an economically distressed area.
(b) The application and plan must include:
(1) the name of the political subdivision and its
principal officers;
(2) a citation of the law under which the political
subdivision was created and operates;
(3) a description of the existing water supply and
sewer facilities located in the area to be served by the proposed
project and, along with the description, a statement prepared and
certified by an engineer registered to practice in this state that
the facilities do not meet minimum state standards;
(4) information identifying the median household
income for the area to be served by the proposed project;
(5) a project plan prepared and certified by an
engineer registered to practice in this state that:
(A) describes the proposed planning, design, and
construction activities necessary for providing water supply and
sewer services that meet minimum state standards; and
(B) identifies the households to which the
services will be provided;
(6) a budget that estimates the total cost of
providing water supply and sewer services to the economically
distressed area and a proposed schedule and method for repayment of
financial assistance consistent with board rules and guidelines;
and
(7) the total amount of assistance requested from the
economically distressed areas program account.
(c) A program of water conservation for the more effective
use of water is required for the approval of an application for
financial assistance under this section in the same manner as such a
program is required for the approval of an application for
financial assistance under Section 17.125.
(d) Before considering the application, the board may
require the applicant to:
(1) participate with the board in reviewing the
applicant's managerial, financial, or technical capabilities to
operate the system for which assistance is being requested;
(2) provide a written determination by the commission
of the applicant's managerial, financial, and technical
capabilities to operate the system for which assistance is being
requested;
(3) request that the comptroller perform a financial
management review of the applicant's current operations and, if the
comptroller is available to perform the review, provide the board
with the results of the review; or
(4) provide any other information required by the
board or the executive administrator.
Sec. 17.944. CONSIDERATIONS IN REVIEWING APPLICATION.
(a) In reviewing an application for financial assistance, the
board shall consider:
(1) the need of the economically distressed area to be
served by the water supply or sewer services in relation to the need
of other political subdivisions requiring financial assistance
under this subchapter and the relative costs and benefits of all
applications;
(2) the availability of revenue or alternative
financial assistance for the area served by the project, from all
sources, for the payment of the cost of the proposed project;
(3) the financing of the proposed water supply or
sewer project, including consideration of:
(A) the budget and repayment schedule submitted
under Section 17.943(b)(6);
(B) other items included in the application
relating to financing; and
(C) other financial information and data
available to the board; and
(4) the feasibility of achieving cost savings by
providing a regional facility for water supply or wastewater
service and the feasibility of financing the project by using money
from the economically distressed areas program account or any other
available financial assistance.
(b) At the time an application for financial assistance is
considered, the board must also find that the area to be served by a
proposed project has a median household income of not more than 75
percent of the median state household income for the most recent
year for which statistics are available.
Sec. 17.945. APPROVAL OR DISAPPROVAL OF APPLICATION. After
considering the matters described by Section 17.944, the board by
resolution shall:
(1) approve the plan and application as submitted;
(2) approve the plan and application subject to the
requirements identified by the board or commission for the
applicant to obtain the managerial, financial, and technical
capabilities to operate the system and any other requirements,
including training under Subchapter M, the board considers
appropriate;
(3) deny the application and identify the requirements
or remedial steps the applicant must complete before the applicant
may be reconsidered for financial assistance;
(4) if the board finds that the applicant will be
unable to obtain the managerial, financial, or technical
capabilities to build and operate a system, deny the application
and issue a determination that a service provider other than the
applicant is necessary or appropriate to undertake the proposed
project; or
(5) deny the application.
Sec. 17.946. FINDINGS REGARDING PERMITS. (a) The board
may not release money for the construction of that portion of a
project that proposes surface water or groundwater development
until the executive administrator makes a written finding:
(1) that an applicant proposing surface water
development has the necessary water right authorizing it to
appropriate and use the water that the water supply project will
provide; or
(2) that an applicant proposing groundwater
development has the right to use water that the water supply project
will provide.
(b) The board may release money for the costs of planning,
engineering, architectural, legal, title, fiscal, or economic
investigation, studies, surveys, or designs before making the
finding required under Subsection (a) if the executive
administrator determines that a reasonable expectation exists that
the finding will be made before the release of funds for
construction.
(c) If an applicant includes a proposal for treatment works,
the board may not deliver money for the treatment works until the
applicant has received a permit for construction and operation of
the treatment works and approval of the plans and specifications
from the commission, unless such a permit is not required by the
commission.
Sec. 17.947. METHOD OF FINANCIAL ASSISTANCE. (a) The
board may provide financial assistance to political subdivisions
under this subchapter by using money in the economically distressed
areas program account to purchase political subdivision bonds.
(b) The board may make financial assistance available to
political subdivisions in any other manner that it considers
feasible, including:
(1) contracts or agreements with a political
subdivision for acceptance of financial assistance that establish
any repayment based on the political subdivision's ability to repay
the assistance and that establish requirements for acceptance of
the assistance; or
(2) contracts or agreements for providing financial
assistance in any federal or federally assisted project or program.
Sec. 17.948. TERMS OF FINANCIAL ASSISTANCE. (a) The board
may use money in the economically distressed areas program account
to provide financial assistance under this subchapter to a
political subdivision to be repaid in the form, manner, and time
provided by board rules and in the agreement between the board and
the political subdivision, taking into consideration the
information provided under Section 17.943.
(b) In providing financial assistance to an applicant under
this subchapter, the board may not provide to the applicant
financial assistance for which repayment is not required in an
amount that exceeds 50 percent of the total amount of the financial
assistance plus interest on any amount that must be repaid, unless
the Department of State Health Services issues a finding that a
nuisance dangerous to the public health and safety exists resulting
from water supply and sanitation problems in the area to be served
by the proposed project. The board and the applicant shall provide
to the department information necessary to make a determination,
and the board and the department may enter into memoranda of
understanding necessary to carry out this subsection.
(c) The total amount of financial assistance provided by the
board to political subdivisions under this subchapter from
state-issued bonds for which repayment is not required may not
exceed at any time 90 percent of the total principal amount of
issued and unissued bonds authorized for purposes of this
subchapter.
(d) In determining the amount and form of financial
assistance and the amount and form of repayment, if any, the board
shall consider:
(1) rates, fees, and charges that the average customer
to be served by the project will be able to pay based on a comparison
of what other families of similar income who are similarly situated
pay for comparable services;
(2) sources of funding available to the political
subdivision from federal and private money and from other state
money;
(3) any local money of the political subdivision to be
served by the project if the economically distressed area to be
served by the board's financial assistance is within the boundary
of the political subdivision; and
(4) the just, fair, and reasonable charges for water
and wastewater service as provided by this code.
(e) In making its determination under Subsection (d)(1),
the board may consider any study, survey, data, criteria, or
standard developed or prepared by any federal, state, or local
agency, private foundation, banking or financial institution, or
other reliable source of statistical or financial data or
information.
(f) The board may provide financial assistance money under
this subchapter for treatment works only if the board determines
that it is not feasible in the area covered by the application to
use septic tanks as the method for providing sewer services under
the applicant's plan.
SECTION 2. Subsection (c), Section 17.958, Water Code, is
amended to read as follows:
(c) Money on deposit in the economically distressed areas
program account may be used by the board for purposes provided by
Subchapter K or K-1 in the manner that the board determines
necessary for the administration of the fund.
SECTION 3. Subsection (i), Section 15.407, and Subsection
(b), Section 15.974, Water Code, are repealed.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.
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