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A BILL TO BE ENTITLED
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AN ACT
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relating to the provision by the Texas Water Development Board of |
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financial assistance for the development of certain projects in |
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economically distressed areas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Subchapter K, Chapter 17, Water |
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Code, is amended to read as follows: |
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SUBCHAPTER K. ASSISTANCE TO ECONOMICALLY DISTRESSED AREAS FOR WATER |
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SUPPLY, [AND] SEWER SERVICE, AND RESIDENTIAL DRAINAGE PROJECTS |
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SECTION 2. Sections 17.921(1) and (2), Water Code, are |
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amended to read as follows: |
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(1) "Economically distressed area" means an area in |
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which: |
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(A) water supply, [or] sewer, or residential |
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drainage services are inadequate to meet minimal needs of |
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residential users as defined by board rules; |
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(B) financial resources are inadequate to |
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provide water supply, [or] sewer, or residential drainage services |
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that will satisfy those needs; and |
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(C) an established residential subdivision was |
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located on June 1, 2005, as determined by the board. |
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(2) "Financial assistance" means the funds provided by |
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the board to political subdivisions for water supply, [and] sewer, |
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and residential drainage services under this subchapter. |
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SECTION 3. Section 17.922, Water Code, is amended to read as |
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follows: |
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Sec. 17.922. FINANCIAL ASSISTANCE. (a) The board shall use |
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the economically distressed areas account [may be used by the
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board] to provide financial assistance to political subdivisions |
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for the construction, acquisition, or improvement of water supply, |
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[and] sewer, and residential drainage services, including |
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providing funds from the account for the state's participation in |
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federal programs that provide assistance solely for projects |
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intended to serve economically distressed areas [to political
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subdivisions]. |
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(b) To the extent practicable, the board shall use money |
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[the funds] in the economically distressed areas account in |
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conjunction with the other financial assistance available through |
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the board to encourage the use of cost-effective water supply, |
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[and] wastewater, and residential drainage systems, including |
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regional systems, to maximize the long-term economic development of |
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political subdivisions [counties] eligible for financial |
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assistance under the economically distressed areas program. Any |
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savings derived from the construction of a regional system that |
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includes or serves an economically distressed area project shall be |
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factored into the board's determination of financial assistance for |
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the economically distressed area in a manner that assures the |
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economically distressed area receives appropriate benefits from |
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the savings. In no event shall financial assistance provided from |
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the economically distressed areas account be used to provide water |
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supply, [or] wastewater, or residential drainage service to any |
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area that is not an economically distressed area. |
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SECTION 4. Subchapter K, Chapter 17, Water Code, is amended |
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by adding Section 17.9226 to read as follows: |
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Sec. 17.9226. USE OF CERTAIN GENERAL OBLIGATION BONDS. The |
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board shall: |
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(1) work to maximize the effectiveness of the |
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additional general obligation bonds authorized by Section |
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49-d-10(a-1), Article III, Texas Constitution, by using the |
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additional bonds in conjunction with other sources of financial |
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assistance, including nonpublic funds, to provide financial |
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assistance to political subdivisions for the construction, |
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acquisition, or improvement of water supply, sewer, and residential |
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drainage services; and |
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(2) use the additional general obligation bonds |
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authorized by Section 49-d-10(a-1), Article III, Texas |
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Constitution, to promote and support public-private partnerships |
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that the board determines: |
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(A) are financially viable; |
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(B) will diversify the methods of financing |
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available for water supply, sewer, and residential drainage |
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services; and |
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(C) will reduce reliance on the issuance of bonds |
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supported with general revenue. |
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SECTION 5. Sections 17.927(a), (b), and (c), Water Code, |
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are amended to read as follows: |
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(a) A political subdivision may apply to the board for |
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financial assistance under this subchapter by submitting an |
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application together with a plan for providing water supply, [and] |
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sewer, or residential drainage services to an economically |
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distressed area for which the financial assistance is to be used. |
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(b) The application and plan must include: |
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(1) the name of the political subdivision and its |
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principal officers; |
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(2) a citation of the law under which the political |
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subdivision was created and operates; |
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(3) a project plan, prepared and certified by an |
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engineer registered to practice in this state, that must: |
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(A) describe the proposed planning, design, and |
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construction activities necessary to provide water supply, [and] |
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sewer, or residential drainage services that meet minimum state |
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standards provided by board rules; and |
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(B) identify the households to which the water |
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supply, [and] sewer, or residential drainage services will be |
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provided; |
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(4) a budget that estimates the total cost of |
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providing water supply, [and] sewer, or residential drainage |
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services to the economically distressed area and a proposed |
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schedule and method for repayment of financial assistance |
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consistent with board rules and guidelines; |
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(5) a description of the existing water supply, [and] |
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sewer, or residential drainage facilities located in the area to be |
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served by the proposed project, including a statement prepared and |
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certified by an engineer registered to practice in this state that |
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the facilities do not meet minimum state standards; |
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(6) documentation that the appropriate political |
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subdivision has adopted and enforces the model rules developed |
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under Section 16.343; |
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(7) information identifying the median household |
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income for the area to be served by the proposed project; and |
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(8) the total amount of assistance requested from the |
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economically distressed areas account. |
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(c) Before the board approves the application or provides |
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any funds under an application, it shall require an applicant to |
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adopt a program of water conservation for the more effective use of |
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water that meets the criteria established under Section 17.125 for |
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water supply projects or under Section 17.277 for water quality |
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enhancement projects. |
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SECTION 6. Subchapter K, Chapter 17, Water Code, is amended |
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by adding Section 17.9275 to read as follows: |
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Sec. 17.9275. PRIORITIZATION OF PROJECTS BY BOARD. (a) The |
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board shall prioritize projects for the purpose of providing |
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financial assistance under this subchapter. |
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(b) The board shall establish a system for prioritizing |
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projects for which financial assistance is sought from the board. |
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The system must include a standard for the board to apply in |
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determining whether a project qualifies for financial assistance at |
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the time the application for financial assistance is filed with the |
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board. |
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(c) The board shall give the highest consideration to |
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projects that will have a substantial effect, including projects |
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that will serve an area for which the board or the Department of |
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State Health Services has determined that a nuisance dangerous to |
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the public health and safety exists resulting from water supply and |
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sanitation problems. |
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(d) In addition to the criteria provided by Subsection (c), |
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the board must also consider at least the following criteria in |
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prioritizing projects: |
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(1) the local contribution to be made to finance the |
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project, including the up-front capital to be provided by the |
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applicant; |
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(2) the financial capacity of the applicant to repay |
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the financial assistance provided; |
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(3) the ability of the board and the applicant to |
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timely leverage state financing with local and federal funding; |
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(4) whether there is an emergency need for the project |
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as determined by the board; |
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(5) whether the applicant is ready to proceed with the |
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project at the time of the application, including whether: |
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(A) all preliminary planning and design work |
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associated with the project has been completed; and |
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(B) the applicant is able to begin implementing |
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or constructing the project; and |
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(6) the cost per connection of the project. |
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(e) The board by rule may provide for the consideration of |
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additional criteria. |
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SECTION 7. Section 17.928(c), Water Code, is amended to |
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read as follows: |
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(c) If an applicant includes a proposal for treatment or |
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residential drainage works, the board may not deliver funds for the |
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treatment or residential drainage works until the applicant has |
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received: |
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(1) a permit for construction and operation of the |
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treatment or residential drainage works from the commission or |
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other applicable permitting authority unless such a permit is not |
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required; and |
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(2) approval of the plans and specifications from the |
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commission, the executive administrator, or other applicable |
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authority [or unless such a permit is not required by the
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commission]. |
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SECTION 8. Section 17.929(a), Water Code, is amended to |
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read as follows: |
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(a) In passing on an application for financial assistance, |
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the board shall consider: |
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(1) the need of the economically distressed area to be |
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served by the water supply, [and] sewer, or residential drainage |
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services in relation to the need of other political subdivisions |
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requiring financial assistance under this subchapter and the |
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relative costs and benefits of all applications; |
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(2) the availability to the area to be served by the |
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project of revenue or financial assistance from alternative sources |
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for the payment of the cost of the proposed project; |
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(3) the financing of the proposed water supply, [and] |
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sewer, or residential drainage project, including consideration |
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of: |
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(A) the budget and repayment schedule submitted |
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under Section 17.927(b)(4); |
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(B) other items included in the application |
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relating to financing; and |
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(C) other financial information and data |
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available to the board; |
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(4) whether the county and other appropriate political |
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subdivisions have adopted model rules pursuant to Section 16.343 |
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and the manner of enforcement of model rules; and |
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(5) the feasibility of achieving cost savings by |
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providing a regional facility for water supply, [or] wastewater, or |
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residential drainage service and the feasibility of financing the |
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facility by using funds from the economically distressed areas |
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account or any other financial assistance. |
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SECTION 9. Section 17.931, Water Code, is amended to read as |
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follows: |
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Sec. 17.931. APPLICATION AMENDMENT. (a) A political |
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subdivision may request the executive administrator [board] in |
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writing to approve a change to or a modification of the budget or |
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project plan included in its application if the change or |
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modification does not increase the budget or change the project |
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scope. |
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(b) A change or modification requested under Subsection (a) |
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may not be implemented unless the executive administrator [board] |
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provides [its] written approval. |
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SECTION 10. Sections 17.933(a), (b), and (d), Water Code, |
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are amended to read as follows: |
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(a) The board may use money in the economically distressed |
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areas account to provide financial assistance to a political |
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subdivision in the form of a loan, [including] a loan with zero |
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interest, a grant, or other type of financial assistance to be |
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determined by the board taking into consideration the information |
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provided by Section 17.927(b)(7). |
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(b) In providing financial assistance to an applicant under |
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this subchapter, the board may not provide to the applicant |
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financial assistance for which repayment is not required in an |
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amount that exceeds 50 percent of the total amount of the financial |
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assistance [plus interest on any amount that must be repaid], |
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unless the board or the [Texas] Department of State Health Services |
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determines [issues a finding] that a nuisance dangerous to the |
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public health and safety exists resulting from water supply and |
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sanitation problems in the area to be served by the proposed |
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project. The board may provide the repayable portion of financial |
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assistance from any financial assistance program for which the |
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applicant is eligible. The [board and the] applicant shall provide |
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to the board or the [Texas] Department of State Health Services |
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information necessary to make a determination, and the board and |
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the [Texas] Department of State Health Services may enter into |
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necessary memoranda of understanding to carry out this subsection. |
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(d) In determining the amount and form of financial |
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assistance and the amount and form of repayment, if any, the board |
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shall consider: |
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(1) rates, fees, and charges that the average customer |
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to be served by the project will be able to pay [based on a
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comparison of what other families of similar income who are
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similarly situated pay for comparable services]; |
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(2) sources of funding available to the political |
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subdivision from federal and private funds and from other state |
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funds; |
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(3) any local funds of the political subdivision to be |
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served by the project if the economically distressed area to be |
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served by the board's financial assistance is within the boundary |
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of the political subdivision; and |
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(4) the just, fair, and reasonable charges for water, |
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[and] wastewater, and residential drainage service as provided in |
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this code. |
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SECTION 11. Section 17.936(d), Water Code, is amended to |
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read as follows: |
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(d) The provider of water or wastewater utility or |
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residential drainage service to an economically distressed area may |
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recover from a developer or owner of an undeveloped lot |
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economically distressed areas program impact fees as provided by |
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rules adopted by the board. |
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SECTION 12. Subchapter K, Chapter 17, Water Code, is |
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amended by adding Section 17.937 to read as follows: |
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Sec. 17.937. REPORTING AND TRANSPARENCY REQUIREMENTS. (a) |
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Annually, the board shall post on the board's Internet website a |
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report detailing each project for which the board has provided |
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financial assistance under this subchapter. |
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(b) The report must include: |
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(1) a description of each project; |
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(2) the location of each project; |
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(3) the number of residents served by each project; |
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(4) the amount of financial assistance provided or |
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anticipated to be provided for each project; |
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(5) a statement of whether each project has been |
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completed and, if not, the expected completion date; |
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(6) the date on which each appropriate political |
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subdivision adopted the model rules developed under Section 16.343; |
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and |
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(7) the date on which each appropriate political |
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subdivision certified that it enforces the applicable model rules |
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developed under Section 16.343 or a description of measures taken |
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to mitigate any deficiencies in compliance. |
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SECTION 13. Section 17.933(b-1), Water Code, is repealed. |
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SECTION 14. This Act takes effect on the date on which the |
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constitutional amendment proposed by the 86th Legislature, Regular |
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Session, 2019, providing for the issuance of additional general |
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obligation bonds by the Texas Water Development Board in an amount |
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not to exceed $400 million to provide financial assistance for the |
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development of certain projects in economically distressed areas |
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takes effect. If that amendment is not approved by the voters, this |
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Act has no effect. |