S.B. No. 2452
 
 
 
 
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.  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 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 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 service to any area that is not an economically
  distressed area.
         SECTION 2.  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 may:
               (1)  maximize the effectiveness of the additional
  general obligation bonds authorized by Section 49-d-14, 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 and sewer services; and
               (2)  use the additional general obligation bonds
  authorized by Section 49-d-14, 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 and sewer services; and
                     (C)  will reduce reliance on the issuance of bonds
  supported with general revenue.
         SECTION 3.  Sections 17.927(b) and (c), Water Code, are
  amended to read as follows:
         (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
  services that meet minimum state standards provided by board rules;
  and
                     (B)  identify the households to which the water
  supply and sewer services will be provided;
               (4)  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;
               (5)  a description of the existing water supply and
  sewer 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 4.  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:
               (1)  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; or
               (2)  for which the applicant:
                     (A)  is subject to an enforcement action,
  including a final order, judgment, or consent decree, by the
  commission, the state, or the United States Environmental
  Protection Agency, related to public health and safety issues
  resulting from water supply or sewer services; and
                     (B)  did not cause or allow the violations that
  are the subject of the enforcement action.
         (d)  The board by rule may provide for the consideration of
  additional criteria.
         SECTION 5.  Section 17.928(c), Water Code, is amended to
  read as follows:
         (c)  If an applicant includes a proposal for treatment
  works[,] the board may not deliver funds for the treatment works
  until the applicant has received:
               (1)  a permit for construction and operation of the
  treatment 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 6.  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 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 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
  service and the feasibility of financing the facility by using
  funds from the economically distressed areas account or any other
  financial assistance; and
               (6)  the ability of the applicant to repay the
  financial assistance.
         SECTION 7.  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 8.  Sections 17.933(a), (b), (c), 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) and the political subdivision's
  ability to repay the financial assistance.
         (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.
         (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 70 [90] percent of the total principal amount of
  issued and unissued bonds authorized under Article III of the Texas
  Constitution, for purposes of this subchapter plus outstanding
  interest on those bonds.
         (d)  In determining the amount and form of financial
  assistance and the amount and form of repayment, if any, the board
  shall establish repayment based on the political subdivision's
  ability to repay the financial assistance and 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 service as provided in this code; and
               (5)  the ability of the board to maximize the portion of
  financial assistance for which repayment is required based on the
  political subdivision's ability to repay the assistance, as
  provided by board rule.
         SECTION 9.  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 10.  Section 17.933(b-1), Water Code, is repealed.
         SECTION 11.  The Texas Water Development Board is required
  to implement a provision of this Act only if the legislature
  appropriates money specifically for that purpose. If the
  legislature does not appropriate money specifically for that
  purpose, the board may, but is not required to, implement a
  provision of this Act using other appropriations available for that
  purpose.
         SECTION 12.  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 $200 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.
 
 
 
 
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
         I hereby certify that S.B. No. 2452 passed the Senate on
  May 8, 2019, by the following vote: Yeas 21, Nays 10; and that the
  Senate concurred in House amendment on May 25, 2019, by the
  following vote: Yeas 22, Nays 8.
 
 
  ______________________________
  Secretary of the Senate    
 
         I hereby certify that S.B. No. 2452 passed the House, with
  amendment, on May 22, 2019, by the following vote: Yeas 103,
  Nays 41, two present not voting.
 
 
  ______________________________
  Chief Clerk of the House   
 
 
 
  Approved:
 
  ______________________________ 
              Date
 
 
  ______________________________ 
            Governor