Amend CSHB 4 (house committee report) as follows:

On page 31, between lines 15 and 16, add the following appropriately numbered SECTION to the bill:

SECTION ____. (a) Section 49.181, Water Code, is amended to read as follows:

Sec. 49.181. AUTHORITY OF COMMISSION OVER ISSUANCE OF DISTRICT BONDS. (a)  A district may not issue bonds unless the commission determines that the project to be financed by the bonds is feasible and issues an order approving the issuance of the bonds. This section does not apply to:

(1)  refunding bonds if the commission issued an order approving the issuance of the bonds or notes that originally financed the project;

(2)  refunding bonds that are issued by a district under an agreement between the district and a municipality allowing the issuance of the district's bonds to refund bonds issued by the municipality to pay the cost of financing facilities;

(3)  bonds issued to and approved by the Farmers Home Administration, the United States Department of Agriculture, the North American Development Bank, [or] the Texas Water Development Board[;], or a federally chartered instrumentality of the United States authorized under 12 U.S.C. 2128(f) to finance such projects;

(4)  refunding bonds issued to refund bonds described by Subdivision (3); or

(5)  bonds issued by a public utility agency created under Chapter 572, Local Government Code, any of the public entities participating in which are districts if at least one of those districts is a district described by Subsection (h)(1)(E).

(b)  A district may submit to the commission a written application for investigation of feasibility. An engineer's report describing the project, including the data, profiles, maps, plans, and specifications prepared in connection with the report, must be submitted with the application.

(c)  The executive director shall examine the application and the report and shall inspect the project area. The district shall, on request, supply the executive director with additional data and information necessary for an investigation of the application, the engineer's report, and the project.

(d)  The executive director shall prepare a written report on the project and include suggestions, if any, for changes or improvements in the project. The executive director shall retain a copy of the report and send a copy of the report to both the commission and the district.

(e)  The commission shall consider the application, the engineer's report, the executive director's report, and any other evidence allowed by commission rule to be considered in determining the feasibility of the project.

(f)  The commission shall determine whether the project to be financed by the bonds is feasible and issue an order either approving or disapproving, as appropriate, the issuance of the bonds. The commission shall retain a copy of the order and send a copy of the order to the district.

(g)  Notwithstanding any provision of this code to the contrary, the commission may approve the issuance of bonds of a district without the submission of plans and specifications of the improvements to be financed with the bonds. The commission may condition the approval on any terms or conditions considered appropriate by the commission.

SECTION ____. (a) Section 49.153, Water Code, is amended to read as follows:

Sec. 49.153. REVENUE NOTES. (a)  The board, without the necessity of an election, may borrow money on negotiable or nonnegotiable notes of the district to be paid solely from the revenues derived from the ownership of all or any designated part of the district's works, plants, improvements, facilities, or equipment after deduction of the reasonable cost of maintaining and operating the facilities.

(b)  The notes may be first or subordinate lien notes within the discretion of the board, but no obligation may ever be a charge on the property of the district or on taxes levied or collected by the district but shall be solely a charge on the revenues pledged for the payment of the obligation. No part of the obligation may ever be paid from taxes levied or collected by the district.

(c)  Except as provided by Subsection (e), a district may not execute a note for a term longer than three years unless the commission issues an order approving the note.

(d)  This section does not apply to special water authorities.

(e)  Subsection (c) does not apply to:

(1)  a note issued to and approved by the:

(A)  Farmers Home Administration;

(B)  United States Department of Agriculture;

(C)  Texas Water Development Board; or

(D)  North American Development Bank; or

(2)  a district described by Section 49.181(h).