86R3576 JAM-F
 
  By: Lucio, Hinojosa, Perry S.B. No. 2452
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the provision by the Texas Water Development Board of
  financial assistance for the development of certain projects in
  economically distressed areas.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Subchapter K, Chapter 17, Water
  Code, is amended to read as follows:
  SUBCHAPTER K. ASSISTANCE TO ECONOMICALLY DISTRESSED AREAS FOR WATER
  SUPPLY, [AND] SEWER SERVICE, AND RESIDENTIAL DRAINAGE PROJECTS
         SECTION 2.  Sections 17.921(1) and (2), Water Code, are
  amended to read as follows:
               (1)  "Economically distressed area" means an area in
  which:
                     (A)  water supply, [or] sewer, or residential
  drainage services are inadequate to meet minimal needs of
  residential users as defined by board rules;
                     (B)  financial resources are inadequate to
  provide water supply, [or] sewer, or residential drainage 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, [and] sewer,
  and residential drainage services under this subchapter.
         SECTION 3.  Section 17.922, Water Code, is amended to read as
  follows:
         Sec. 17.922.  FINANCIAL ASSISTANCE. (a) The board shall use
  the economically distressed areas 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, and residential drainage services, including
  providing funds from the account for the state's participation in
  federal programs that provide assistance solely for projects
  intended to serve economically distressed areas [to political
  subdivisions].
         (b)  To the extent practicable, the board shall use money
  [the funds] in the economically distressed areas account in
  conjunction with the other financial assistance available through
  the board to encourage the use of cost-effective water supply,
  [and] wastewater, and residential drainage systems, including
  regional systems, to maximize the long-term economic development of
  political subdivisions [counties] eligible for financial
  assistance under the economically distressed areas program. Any
  savings derived from the construction of a regional system that
  includes or serves an economically distressed area project shall be
  factored into the board's determination of financial assistance for
  the economically distressed area in a manner that assures the
  economically distressed area receives appropriate benefits from
  the savings. In no event shall financial assistance provided from
  the economically distressed areas account be used to provide water
  supply, [or] wastewater, or residential drainage service to any
  area that is not an economically distressed area.
         SECTION 4.  Subchapter K, Chapter 17, Water Code, is amended
  by adding Section 17.9226 to read as follows:
         Sec. 17.9226.  USE OF CERTAIN GENERAL OBLIGATION BONDS. The
  board shall:
               (1)  work to maximize the effectiveness of the
  additional general obligation bonds authorized by Section
  49-d-10(a-1), Article III, Texas Constitution, by using the
  additional bonds in conjunction with other sources of financial
  assistance, including nonpublic funds, to provide financial
  assistance to political subdivisions for the construction,
  acquisition, or improvement of water supply, sewer, and residential
  drainage services; and
               (2)  use the additional general obligation bonds
  authorized by Section 49-d-10(a-1), Article III, Texas
  Constitution, to promote and support public-private partnerships
  that the board determines:
                     (A)  are financially viable;
                     (B)  will diversify the methods of financing
  available for water supply, sewer, and residential drainage
  services; and
                     (C)  will reduce reliance on the issuance of bonds
  supported with general revenue.
         SECTION 5.  Sections 17.927(a), (b), and (c), Water Code,
  are amended to read as follows:
         (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, [and]
  sewer, or residential drainage services to an economically
  distressed area for which the financial assistance is to be used.
         (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 project plan, prepared and certified by an
  engineer registered to practice in this state, that must:
                     (A)  describe the proposed planning, design, and
  construction activities necessary to provide water supply, [and]
  sewer, or residential drainage services that meet minimum state
  standards provided by board rules; and
                     (B)  identify the households to which the water
  supply, [and] sewer, or residential drainage services will be
  provided;
               (4)  a budget that estimates the total cost of
  providing water supply, [and] sewer, or residential drainage
  services to the economically distressed area and a proposed
  schedule and method for repayment of financial assistance
  consistent with board rules and guidelines;
               (5)  a description of the existing water supply, [and]
  sewer, or residential drainage facilities located in the area to be
  served by the proposed project, including a statement prepared and
  certified by an engineer registered to practice in this state that
  the facilities do not meet minimum state standards;
               (6)  documentation that the appropriate political
  subdivision has adopted and enforces the model rules developed
  under Section 16.343;
               (7)  information identifying the median household
  income for the area to be served by the proposed project; and
               (8)  the total amount of assistance requested from the
  economically distressed areas account.
         (c)  Before the board approves the application or provides
  any funds under an application, it shall require an applicant to
  adopt a program of water conservation for the more effective use of
  water that meets the criteria established under Section 17.125 for
  water supply projects or under Section 17.277 for water quality
  enhancement projects.
         SECTION 6.  Subchapter K, Chapter 17, Water Code, is amended
  by adding Section 17.9275 to read as follows:
         Sec. 17.9275.  PRIORITIZATION OF PROJECTS BY BOARD. (a)  The
  board shall prioritize projects for the purpose of providing
  financial assistance under this subchapter.
         (b)  The board shall establish a system for prioritizing
  projects for which financial assistance is sought from the board.  
  The system must include a standard for the board to apply in
  determining whether a project qualifies for financial assistance at
  the time the application for financial assistance is filed with the
  board.
         (c)  The board shall give the highest consideration to
  projects that will have a substantial effect, including projects
  that will serve an area for which the board or the Department of
  State Health Services has determined that a nuisance dangerous to
  the public health and safety exists resulting from water supply and
  sanitation problems.
         (d)  In addition to the criteria provided by Subsection (c),
  the board must also consider at least the following criteria in
  prioritizing projects:
               (1)  the local contribution to be made to finance the
  project, including the up-front capital to be provided by the
  applicant;
               (2)  the financial capacity of the applicant to repay
  the financial assistance provided;
               (3)  the ability of the board and the applicant to
  timely leverage state financing with local and federal funding;
               (4)  whether there is an emergency need for the project
  as determined by the board;
               (5)  whether the applicant is ready to proceed with the
  project at the time of the application, including whether:
                     (A)  all preliminary planning and design work
  associated with the project has been completed; and
                     (B)  the applicant is able to begin implementing
  or constructing the project; and
               (6)  the cost per connection of the project.
         (e)  The board by rule may provide for the consideration of
  additional criteria.
         SECTION 7.  Section 17.928(c), Water Code, is amended to
  read as follows:
         (c)  If an applicant includes a proposal for treatment or
  residential drainage works, the board may not deliver funds for the
  treatment or residential drainage works until the applicant has
  received:
               (1)  a permit for construction and operation of the
  treatment or residential drainage works from the commission or
  other applicable permitting authority unless such a permit is not
  required; and
               (2)  approval of the plans and specifications from the
  commission, the executive administrator, or other applicable
  authority [or unless such a permit is not required by the
  commission].
         SECTION 8.  Section 17.929(a), Water Code, is amended to
  read as follows:
         (a)  In passing on an application for financial assistance,
  the board shall consider:
               (1)  the need of the economically distressed area to be
  served by the water supply, [and] sewer, or residential drainage
  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 to the area to be served by the
  project of revenue or financial assistance from alternative sources
  for the payment of the cost of the proposed project;
               (3)  the financing of the proposed water supply, [and]
  sewer, or residential drainage project, including consideration
  of:
                     (A)  the budget and repayment schedule submitted
  under Section 17.927(b)(4);
                     (B)  other items included in the application
  relating to financing; and
                     (C)  other financial information and data
  available to the board;
               (4)  whether the county and other appropriate political
  subdivisions have adopted model rules pursuant to Section 16.343
  and the manner of enforcement of model rules; and
               (5)  the feasibility of achieving cost savings by
  providing a regional facility for water supply, [or] wastewater, or
  residential drainage service and the feasibility of financing the
  facility by using funds from the economically distressed areas
  account or any other financial assistance.
         SECTION 9.  Section 17.931, Water Code, is amended to read as
  follows:
         Sec. 17.931.  APPLICATION AMENDMENT. (a) A political
  subdivision may request the executive administrator [board] in
  writing to approve a change to or a modification of the budget or
  project plan included in its application if the change or
  modification does not increase the budget or change the project
  scope.
         (b)  A change or modification requested under Subsection (a)
  may not be implemented unless the executive administrator [board]
  provides [its] written approval.
         SECTION 10.  Sections 17.933(a), (b), and (d), Water Code,
  are amended to read as follows:
         (a)  The board may use money in the economically distressed
  areas account to provide financial assistance to a political
  subdivision in the form of a loan, [including] a loan with zero
  interest, a grant, or other type of financial assistance to be
  determined by the board taking into consideration the information
  provided by Section 17.927(b)(7).
         (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 board or the [Texas] Department of State Health Services
  determines [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 may provide the repayable portion of financial
  assistance from any financial assistance program for which the
  applicant is eligible. The [board and the] applicant shall provide
  to the board or the [Texas] Department of State Health Services
  information necessary to make a determination, and the board and
  the [Texas] Department of State Health Services may enter into
  necessary memoranda of understanding to carry out this subsection.
         (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 funds and from other state
  funds;
               (3)  any local funds 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, and residential drainage service as provided in
  this code.
         SECTION 11.  Section 17.936(d), Water Code, is amended to
  read as follows:
         (d)  The provider of water or wastewater utility or
  residential drainage service to an economically distressed area may
  recover from a developer or owner of an undeveloped lot
  economically distressed areas program impact fees as provided by
  rules adopted by the board.
         SECTION 12.  Subchapter K, Chapter 17, Water Code, is
  amended by adding Section 17.937 to read as follows:
         Sec. 17.937.  REPORTING AND TRANSPARENCY REQUIREMENTS. (a)
  Annually, the board shall post on the board's Internet website a
  report detailing each project for which the board has provided
  financial assistance under this subchapter.
         (b)  The report must include:
               (1)  a description of each project;
               (2)  the location of each project;
               (3)  the number of residents served by each project;
               (4)  the amount of financial assistance provided or
  anticipated to be provided for each project;
               (5)  a statement of whether each project has been
  completed and, if not, the expected completion date;
               (6)  the date on which each appropriate political
  subdivision adopted the model rules developed under Section 16.343;
  and
               (7)  the date on which each appropriate political
  subdivision certified that it enforces the applicable model rules
  developed under Section 16.343 or a description of measures taken
  to mitigate any deficiencies in compliance.
         SECTION 13.  Section 17.933(b-1), Water Code, is repealed.
         SECTION 14.  This Act takes effect on the date on which the
  constitutional amendment proposed by the 86th Legislature, Regular
  Session, 2019, providing for the issuance of additional general
  obligation bonds by the Texas Water Development Board in an amount
  not to exceed $400 million to provide financial assistance for the
  development of certain projects in economically distressed areas
  takes effect. If that amendment is not approved by the voters, this
  Act has no effect.