HBA-TYH C.S.H.B. 1260 76(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 1260
By: Hill
Urban Affairs
4/19/1999
Committee Report (Substituted)




BACKGROUND AND PURPOSE 

Currently, state programs associated with colonias are applicable only in
the border region of Texas. Meetings held throughout Texas during the
interim between the 75th and 76th legislatures revealed that there are
colonias all over the state, not just near the border.  Specifically, there
are a limited number of colonias located in Harris and Dallas counties.
C.S.H.B. 1260 sets forth provisions and procedures for financial assistance
to be provided to disadvantaged communities through the financial
assistance account of the Texas Water Development Fund II.  

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Water Development Board in
SECTION 1 (Section 17.999, Water Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 17, Water Code, by adding Subchapter M, as
follows: 

SUBCHAPTER M.   ASSISTANCE TO DISADVANTAGED COMMUNITIES

Sec. 17.991.  DEFINITIONS.  Defines "disadvantaged community" and "sewer
service facilities." 
 
Sec. 17.992.  APPLICATION  FOR FINANCIAL ASSISTANCE.  Authorizes a
political subdivision to apply to the Texas Water Development Board (board)
for financial assistance for the construction, acquisition, or improvement
of water supply projects and sewer service facilities to serve
disadvantaged communities by submitting to the board an application on a
form adopted by the board and a plan for providing water supply or sewer
services to a disadvantaged community under rules adopted by the board. 
  
Sec. 17.993.  CONSIDERATION OF APPLICATION.  Requires the board, in
reviewing an application, to consider the need of the disadvantaged
community for the water supply project or sewer service facilities, the
availability of revenue to the political subdivision from all sources for
the ultimate repayment of the cost of the water supply project or sewer
service facilities, and the need for a low-interest or zero interest loan
to finance the water supply project or sewer service facilities. 
 
Sec. 17.994. APPROVAL OF APPLICATION.  Authorizes the board to approve an
application if, after considering the factors listed in Section 17.993 and
any other relevant factors, the board determines that the public interest
requires state assistance in the project, the applicant cannot reasonably
finance the water supply project or sewer service facilities without state
assistance,  and in the board's opinion the revenue or taxes pledged by the
applicant will be sufficient to meet all the obligations assumed by the
applicant during the succeeding period of not more than 50 years.  Provides
that before the board grants an application or provides any funds under an
application, an applicant must meet the requirements of Section 17.125
(Approval of Application). 

 Sec. 17.995.  METHOD OF FINANCIAL ASSISTANCE.  Authorizes the board, to
the extent provided by legislative appropriation, to make loans available
from funds in the financial assistance account of the Texas Water
Development Fund II at low-interest or zerointerest loan rates to political
subdivisions for the construction, acquisition, or improvement of water
supply projects and sewer service facilities to serve disadvantaged
communities. Authorizes the board to purchase political subdivision bonds
in the financial assistance account of the Texas Water Development Fund II
as a means of providing financial assistance.  Authorizes the board to
provide financial assistance in any other manner that it considers feasible
including through specified contracts. 

Sec. 17.996.  FINDINGS REGARDING PERMITS.  Prohibits the board from
delivering funds under an application for financial assistance until the
board makes the findings described in Sections 17.123 (Findings Regarding
Permits) and 17.278 (Findings Regarding Permits). 
 
Sec. 17.997.  CONTRACT MANAGEMENT STANDARDS.  Provides that the Uniform
Grant and Contract Management Act of 1981 (Chapter 783, Government Code)
does not apply to financial assistance provided under this subchapter. 
 
Sec. 17.998.  AUTHORITY TO PARTICIPATE IN PROGRAM.  (a)  Authorizes a
political subdivision to exercise any authority necessary to participate in
a program and carry out the terms and conditions under which the funds or
the financial assistance is provided.   

(b)  Authorizes a political subdivision other than a nonprofit water supply
corporation eligible for financial assistance, in addition to any other
authority to issue bonds or other obligations or incur any debt, to issue
bonds payable from and secured by a pledge of the revenues derived or to be
derived from the operation of water supply or sewer service systems for the
purpose of acquiring, constructing, improving, extending, or repairing
water supply projects or sewer service facilities.  Requires the bonds to
be issued in accordance with, and authorizes a political subdivision to
exercise the powers granted by the specified statutes and by other laws of
the state. 

Sec. 17.999.  RULEMAKING AUTHORITY.  Requires the board to adopt necessary
rules to accomplish the purposes of this subchapter. 

SECTION 2.  Amends Section 17.172, Water Code, as follows:

Sec. 17.172.  APPLICABILITY.  Provides that this subchapter applies to
financial assistance made available under Subchapters D (Assistance to
Political Subdivisions for Water Supply Projects), F (Financial Assistance
for Water Quality Enhancement Purposes), G (Financial Assistance for Flood
Control), K (Assistance to Economically Distressed Areas for Water Supply
and Sewer Service Projects), L (Water Financial Assistance Bond Program),
and M of this chapter, rather than Subchapters D, F, G, and K of this
chapter, from: 

_the water supply account, the water quality enhancement account, the flood
control account, and the economically distressed areas account of the Texas
Water Development Fund, or   

_the economically distressed areas program account and  the financial
assistance account of the Texas Water Development Fund II. 

SECTION 3.Effective date: September 1, 1999.

SECTION 4.Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original bill by replacing the proposed text of
SECTION 1 (redefining "colonia.") with new text, adding new SECTION 2, and
redesignating SECTIONS 2 (effective date) and 3 (emergency clause) of the
original to SECTIONS 3 and 4. 
 
The substitute further modifies the original bill, as follows:

SECTION 1.  Amends Chapter 17, Water Code, by adding new Subchapter M
(Assistance to Disadvantaged Communities).   Chapter 17 concerns public
funding for water development and supply projects.  New Subchapter M sets
forth provisions and procedures for financial assistance to be provided to
disadvantaged communities through the financial assistance account of the
Texas Water Development Fund II.  For a complete analysis of new Subchapter
M, please see the Sectionby-Section portion of this document. 

SECTION 2.  Amends Section 17.172, Water Code, as follows:

Sec. 17.172.  APPLICABILITY.  Provides that this subchapter applies to
financial assistance made available under Subchapters D (Assistance to
Political Subdivisions for Water Supply Projects), F (Financial Assistance
for Water Quality Enhancement Purposes), G (Financial Assistance for Flood
Control), K (Assistance to Economically Distressed Areas for Water Supply
and Sewer Service Projects), L (Water Financial Assistance Bond Program),
and M of this chapter, rather than Subchapters D, F, G, and K of this
chapter, from: 

_the water supply account, the water quality enhancement account, the flood
control account, and the economically distressed areas account of the Texas
Water Development Fund, or   

_the economically distressed areas program account and  the financial
assistance account of the Texas Water Development Fund II.