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  S.B. No. 360
  relating to the composition and use of money in the rural water
  assistance fund.
         SECTION 1.  Section 15.992, Water Code, is amended by
  amending Subdivision (2) and adding Subdivision (3-a) to read as
               (2)  "Federal agency" means an agency or other entity
  of the United States, including the United States Department of
  Agriculture or an agency or entity that is acting through or on
  behalf of that department.
               (3-a)  "Nonprofit water supply or sewer service
  corporation" means a corporation operating under Chapter 67.
         SECTION 2.  Section 15.993, Water Code, is amended to read as
         Sec. 15.993.  FUND. The rural water assistance fund is a
  special fund in the state treasury.  The fund consists of:
               (1)  money directly appropriated to the board for a
  purpose of the fund;
               (2)  repayment of principal and interest from loans
  made from the fund not otherwise needed as a source of revenue
  pursuant to Section 17.9615(b);
               (3)  money transferred by the board from any sources
  available; [and]
               (4)  interest earned on the investment of money in the
  fund and depository interest allocable to the fund;
               (5)  money transferred to the fund from the water
  assistance fund in accordance with Section 15.011(b), including
  proceeds from the sale of political subdivision bonds by the board
  to the Texas Water Resources Finance Authority that are deposited
  in the water assistance fund as provided by Section 17.0871;
               (6)  money from gifts, grants, or donations to the
  fund; and
               (7)  any other fees or sources of revenue that the
  legislature may dedicate for deposit to the fund.
         SECTION 3.  Section 15.994, Water Code, is amended by
  amending Subsections (a), (b), (c), and (e) and adding Subsection
  (h) to read as follows:
         (a)  The fund may be used to provide low-interest loans to
  rural political subdivisions for:
               (1)  water or water-related projects and for water
  quality enhancement projects, including:
                     (A)  the construction of infrastructure
  facilities for wholesale or retail water or sewer service;
                     (B)  desalination projects;
                     (C)  the purchase or lease of water well fields;
                     (D)  property necessary for water well fields;
                     (E)  [,] the purchase or lease of rights to
  produce groundwater;
                     (F)  [,] onsite or wetland wastewater treatment
  facilities;[,] and
                     (G)  the interim financing of construction
               (2)  water projects included in the state water plan or
  a regional water plan;
               (3)  development of groundwater sources and
  acquisition of water rights, including groundwater and surface
  water rights;
               (4)  the acquisition of retail public utilities as
  defined by Section 13.002;
               (5)  the acquisition of water supply or sewer service
  facilities or systems owned by municipalities or other political
               (6)  construction, acquisition, or improvement of
  water and wastewater projects to provide service to an economically
  distressed area;
               (7)  planning and design costs, permitting costs, and
  other costs associated with state or federal regulatory activities
  with respect to a project; and
               (8)  obtaining[.
         [(b)     The fund may be used to enable a rural political
  subdivision to obtain] water or wastewater service supplied by
  other [larger] political subdivisions or financing [to finance] the
  consolidation or regionalizing of neighboring political
  subdivisions, or both.
         (b)  The fund may be used to provide zero interest loans,
  negative interest loans, loan forgiveness, or grants for any
  purpose described by Subsection (a) under criteria developed by the
         (c)  The board may use money in the [The] fund to contract for
  [may be used to finance an] outreach, financial, and technical
  assistance [program] to assist rural political subdivisions in
  obtaining and using financing from [assistance through] the fund.
  [The board may use money in the fund to contract for such outreach
  and technical assistance.]
         (e)  A rural political subdivision may enter into an
  agreement with a federal agency, [or] a state agency, or another
  rural political subdivision to submit a joint application for
  financial assistance under this subchapter.
         (h)  The board may coordinate its review of an application
  submitted under this subchapter with a federal agency to avoid
  duplication of efforts and costs.
         SECTION 4.  The heading to Section 15.995, Water Code, is
  amended to read as follows:
         SECTION 5.  Subchapter R, Chapter 15, Water Code, is amended
  by adding Section 15.996 to read as follows:
  SERVICE CORPORATIONS. (a)  In addition to any other method of
  providing financial assistance authorized by this subchapter, the
  board may make financial assistance available to an applicant that
  is a nonprofit water supply or sewer service corporation by
  entering into a loan agreement with the applicant.
         (b)  To be eligible to receive financial assistance under
  this section, the applicant must:
               (1)  execute a promissory note for the full amount of
  the loan; and
               (2)  provide to the board an attorney's opinion stating
  that the applicant has the authority to incur the debt.
         (c)  An applicant for financial assistance under this
  section is not required to appoint or employ:
               (1)  a bond counsel; or
               (2)  a financial advisor.
         SECTION 6.  This Act takes effect September 1, 2011.
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
         I hereby certify that S.B. No. 360 passed the Senate on
  March 24, 2011, by the following vote:  Yeas 31, Nays 0.
  Secretary of the Senate    
         I hereby certify that S.B. No. 360 passed the House on
  May 4, 2011, by the following vote:  Yeas 142, Nays 0, two present
  not voting.
  Chief Clerk of the House