By: Lucio, et al.	S.B. No. 2140

	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 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 to political subdivisions.
	(b)  To the extent practicable, the board shall use 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 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) and (b), 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; 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 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.
	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 Department of State Health
	Services has issued a finding 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, taking into consideration whether the applicant is
	included at the time of the application on the list maintained by
	the commission of local public water systems that have a water
	supply that will last less than 180 days without additional
	rainfall;
	(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.
	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 a permit for construction and operation of the treatment
	or residential drainage works and approval of the plans and
	specifications from the commission or other applicable permitting
	authority or unless such a permit is not required by the commission
	or other applicable permitting authority.
	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.  Sections 17.933(b) and (d), Water Code, are
	amended to read as follows:
	(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 [Texas] 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 [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 10.  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 11.  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)  The board shall annually 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; and
	(5)  a statement of whether each project has been
	completed and, if not, the expected completion date.
	SECTION 12.  Section 17.933(b-1), Water Code, is repealed.
	SECTION 13.  This Act takes effect on the date on which the
	constitutional amendment proposed by the 85th Legislature, Regular
	Session, 2017, providing for the issuance of additional general
	obligation bonds by the Texas Water Development Board 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.