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H.B. No. 3029
AN ACT
relating to eligibility of certain rural areas for certain state
assistance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Subchapter O, Chapter 15, Water
Code, is amended to read as follows:
SUBCHAPTER O. [PILOT] PROGRAM FOR WATER AND WASTEWATER FINANCIAL
ASSISTANCE [LOANS] FOR DISADVANTAGED RURAL COMMUNITIES
SECTION 2. Section 15.901, Water Code, is amended by
amending Subdivisions (1) and (3) and adding Subdivision (4) to
read as follows:
(1) "Fund" means the disadvantaged rural community
water and wastewater financial assistance [loan] fund.
(3) "Rural community" means:
(A) a municipality or county with a population of
less than 5,000; [or]
(B) any portion of a political subdivision
[district or authority created under Section 52, Article III, or
Section 59, Article XVI, Texas Constitution,] with a service
population of less than 5,000 that is located outside the
boundaries or extraterritorial jurisdiction of a municipality; or
(C) a predominately residential area with a
population of less than 5,000 that is located outside the corporate
boundaries of a municipality.
(4) "Disadvantaged rural community" means a rural
community with a median household income that is not greater than 75
percent of the median state household income for the most recent
year for which the applicable statistics are available.
SECTION 3. The heading to Section 15.902, Water Code, is
amended to read as follows:
Sec. 15.902. DISADVANTAGED RURAL COMMUNITY WATER AND
WASTEWATER FINANCIAL ASSISTANCE [LOAN] FUND.
SECTION 4. Section 15.902(a), Water Code, is amended to
read as follows:
(a) The disadvantaged rural community water and wastewater
financial assistance [loan] fund is an account in the water
assistance fund.
SECTION 5. Sections 15.903(a), (b), and (d), Water Code,
are amended to read as follows:
(a) The fund may be used by the board to provide grants or
loans of financial assistance to political subdivisions or water
supply corporations [rural communities] for the construction,
acquisition, or improvement of water and wastewater projects to
provide service to disadvantaged rural communities.
(b) The board may make financial assistance available to a
political subdivision or water supply corporation [rural
community] by entering into a grant agreement or a loan agreement
and promissory note with the subdivision or corporation [rural
community], as provided by this subchapter. A political
subdivision or water supply corporation [rural community] may apply
for and accept the financial assistance.
(d) The loan agreement must provide for the issuance of a
promissory note payable to the board to evidence the obligation of
the political subdivision or water supply corporation [rural
community] to repay the loan made in accordance with the terms of
the loan agreement.
SECTION 6. Section 15.904(a), Water Code, is amended to
read as follows:
(a) A political subdivision or water supply corporation may
pledge a percentage of its revenue to the payment of debt incurred
under a loan agreement entered into with the board under this
subchapter. A [rural community that is a] municipality or county
may pledge a percentage of the sales and use tax revenue received
under Chapter 321 or 323, Tax Code, as applicable, to the payment of
debt incurred under a loan agreement entered into with the board
under this subchapter if a majority of the voters voting at an
election called and held for that purpose authorize the
municipality or county to pledge a portion of that revenue for that
purpose.
SECTION 7. Section 15.905, Water Code, is amended to read as
follows:
Sec. 15.905. REVIEW AND APPROVAL OF LOAN AGREEMENT BY
ATTORNEY GENERAL. (a) Before a loan agreement may become
effective, a record of the proceedings of the board and the
political subdivision or water supply corporation [rural
community] authorizing the execution of the loan agreement, the
loan agreement, the promissory note, and any contract providing
revenue or security to pay the promissory note must be submitted to
the attorney general for review and approval.
(b) If the attorney general finds that the loan agreement
and the promissory note are valid and binding obligations of the
political subdivision or water supply corporation [rural
community], the attorney general shall approve the documents and
deliver them to the comptroller, the board, and the subdivision or
corporation [rural community], together with a copy of the attorney
general's legal opinion stating that approval.
SECTION 8. Section 15.909, Water Code, is amended to read as
follows:
Sec. 15.909. RULES. The board shall adopt necessary rules
to administer this subchapter, including rules establishing
procedures for application for and award of loans or grants.
SECTION 9. Section 15.910, Water Code, is amended to read as
follows:
Sec. 15.910. APPLICATION FOR ASSISTANCE. (a) In an
application to the board for financial assistance from the fund, a
political subdivision or water supply corporation [the rural
community] must include:
(1) its [the] name [of the rural community] and its
principal officers;
(2) a citation of the law under which the subdivision
or corporation [the rural community] operates and was created;
(3) a description of the water or wastewater project
for which the financial assistance will be used;
(4) the total cost of the project;
(5) the amount of state financial assistance
requested;
(6) the plan for repaying any loan provided by the
board for [the total cost of] the project; and
(7) any other information the board requires in order
to perform its duties and to protect the public interest.
(b) The board may not accept an application for a loan or
grant of financial assistance from the fund unless it is submitted
in affidavit form by the officials of the political subdivision or
water supply corporation [rural community]. The board shall
prescribe the affidavit form in its rules.
(c) If a political subdivision or water supply corporation
[rural community] has a program of water conservation, the
subdivision or corporation [rural community] shall state in the
application that the subdivision or corporation [rural community]
has such a program.
(d) In an application to the board for financial assistance
from the fund, a political subdivision or water supply corporation
shall include household surveys for the disadvantaged rural
community to be served by the project that are acceptable to the
board and contain information adequate to establish:
(1) the median household income of the disadvantaged
rural community; and
(2) the level of community support for the project.
SECTION 10. Section 15.911, Water Code, is amended to read
as follows:
Sec. 15.911. FINDINGS REGARDING PERMITS. (a) The board may
not release funds for the construction phase of that portion of a
project that proposes surface water or groundwater development
until the executive administrator makes a written finding:
(1) that the political subdivision or water supply
corporation [a rural community] proposing surface water
development has the necessary water right authorizing it to
appropriate and use the water that the project will provide; or
(2) that the subdivision or corporation [a rural
community] proposing groundwater development has the right to use
water that the project will provide.
(b) If the political subdivision or water supply
corporation [a rural community] includes a proposal for a
wastewater treatment project, the board may not release funds for
the project construction until the subdivision or corporation
[rural community] has received a permit for the construction and
operation of the project and approval of the plans and
specifications for the project in a manner that will satisfy
commission requirements for design criteria and permit conditions
that apply to construction activities.
SECTION 11. Section 15.912, Water Code, is amended to read
as follows:
Sec. 15.912. CONSIDERATIONS IN ACTING ON APPLICATION. In
acting on an application for financial assistance, the board shall
consider:
(1) the needs of the area to be served by the project
and the benefit of the project to the area in relation to the needs
of other areas requiring state assistance in any manner and the
benefits of those projects to the other areas;
(2) the availability of revenue to the political
subdivision or water supply corporation [rural community] from all
sources for any necessary [the ultimate] repayment of the cost of
the project, including all interest;
(3) the relationship of the project to overall
statewide needs; and
(4) any other factors that the board considers
relevant.
SECTION 12. Section 15.913, Water Code, is amended to read
as follows:
Sec. 15.913. APPROVAL OF APPLICATION. The board by
resolution may approve an application for a loan or grant if, after
considering the factors listed in Section 15.912 and any other
relevant factors, the board finds that:
(1) the public interest requires state participation
in the project; and
(2) the revenue or taxes pledged by the political
subdivision or water supply corporation [rural community] will be
sufficient to meet all the obligations assumed by the subdivision
or corporation [rural community] during the [succeeding] period of
any loan provided by the board [not more than 20 years].
SECTION 13. Section 15.914, Water Code, is amended to read
as follows:
Sec. 15.914. CONSTRUCTION CONTRACT REQUIREMENTS. A
political subdivision or water supply corporation [The governing
body of each rural community] receiving financial assistance [from
the board] under this subchapter shall require in all contracts for
the construction of a project that:
(1) each bidder furnish a bid guarantee equivalent to
five percent of the bid price;
(2) each contractor awarded a construction contract
furnish performance and payment bonds as follows:
(A) the performance bond must include guarantees
that work done under the contract will be completed and performed
according to approved plans and specifications and in accordance
with sound construction principles and practices; and
(B) the performance and payment bonds must be in
a penal sum of not less than 100 percent of the contract price and
remain in effect for one year after the date of approval by the
engineer of the [political] subdivision or corporation;
(3) payment be made in partial payments as the work
progresses;
(4) each partial payment not exceed 95 percent of the
amount due at the time of the payment as shown by the engineer of the
project, but, if the project is substantially complete, a partial
release of the five percent retainage may be made by the subdivision
or corporation [rural community] with approval of the executive
administrator;
(5) payment of the retainage remaining due on
completion of the contract be made only after:
(A) approval by the engineer for the subdivision
or corporation [rural community] as required under the bond
proceedings;
(B) approval by the subdivision or corporation
[governing body of the rural community] by a resolution or other
formal action; and
(C) certification by the executive administrator
in accordance with the rules of the board that the work to be done
under the contract has been completed and performed in a
satisfactory manner and in accordance with sound engineering
principles and practices;
(6) no valid approval be granted unless the work done
under the contract has been completed and performed in a
satisfactory manner according to approved plans and
specifications; and
(7) labor from inside the disadvantaged rural
community be used to the extent possible.
SECTION 14. Section 15.915, Water Code, is amended to read
as follows:
Sec. 15.915. FILING CONSTRUCTION CONTRACT. The political
subdivision or water supply corporation [rural community] shall
file with the board a certified copy of each construction contract
it enters into for the construction of all or part of a project.
Each contract must contain or have attached to it the
specifications, plans, and details of all work included in the
contract.
SECTION 15. Section 15.917, Water Code, is amended to read
as follows:
Sec. 15.917. ALTERATION OF PLANS. After the executive
administrator approves the engineering plans, a political
subdivision or water supply corporation [rural community] may not
make any substantial or material alteration in the plans unless the
executive administrator authorizes the alteration. The executive
administrator [board] shall review and approve or disapprove plans
and specifications for all sewage collection, treatment, and
disposal systems for which financial assistance is provided from
the fund in a manner that will satisfy commission requirements for
design criteria and permit conditions that apply to construction
activities.
SECTION 16. Section 15.920, Water Code, is amended to read
as follows:
Sec. 15.920. AUTHORITY OF POLITICAL SUBDIVISIONS OR WATER
SUPPLY CORPORATIONS [RURAL COMMUNITIES]. Political subdivisions
or water supply corporations [Rural communities] that receive
financial assistance from the fund are granted all necessary
authority to enter into grant agreements or loan agreements and
issue promissory notes in connection with the financial assistance
granted under this subchapter.
SECTION 17. The following sections are repealed:
(1) Section 15.901(2), Water Code;
(2) Section 15.903(e), Water Code; and
(3) Section 15.919, Water Code.
SECTION 18. The changes in law made by this Act apply only
to an application for financial assistance made on or after the
effective date of this Act. An application for financial
assistance made before the effective date of this Act is governed by
the law in effect on the date the application was made, and the
former law is continued in effect for that purpose.
SECTION 19. 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.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3029 was passed by the House on May
10, 2005, by the following vote: Yeas 147, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 3029 was passed by the Senate on May
25, 2005, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor