HBA-BSM H.B. 622 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 622
By: Lewis, Ron
Natural Resources
3/19/2001
Introduced



BACKGROUND AND PURPOSE 

Currently, more than 4,500 community water systems deliver drinking water
to the citizens of Texas.  The great majority of these serve rural
populations of 10,000 or fewer.  Districts and cities currently secure
financing by issuing tax-exempt bonds or securing loans through the Texas
Water Development Board (TWDB).  However, these funding resources do not
adequately address the demand or special needs of rural utility providers
with small rural populations.  In addition, nonprofit rural water
corporations do not qualify for the lower cost of financing by the sale of
tax exempt bonds.  Also, these small water systems may not have the
manpower or technical resources that are available to larger entities.  The
Sunset Advisory Commission report  on the TWBD notes that the smaller rural
water systems, including small cities and districts, cannot take advantage
of financial assistance easily, and that these areas need technical
assistance and outreach to take advantage of the funding. 

House Bill 622 establishes the Rural Water Assistance Fund.

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly granted to the Texas Water Development Board in
Section 1 (Section 15.905, Water Code) of this bill. 

ANALYSIS

House Bill 622 amends the Water Code to create the Rural Water Assistance
Fund (fund).  The bill sets forth provisions concerning the creation of the
fund. The bill requires the Texas Water Development Board to adopt the
necessary rules to administer the fund, including rules establishing
procedures for application for and award of loans, and distribution of
loans, investment of funds, and the administration of loans. 

The fund may be used to provide low interest loans to any nonprofit water
supply or sewer service corporation, district or municipality with a
service of 10,000 or less in population or which otherwise qualifies for
financing from a federal agency, or any county in which no urban area
exceeds 50,000 in population.  The fund may be used for the purchase of
well fields, the purchase or lease of  rights to produce groundwater,
interim financing of construction projects, and to buy down interest notes
on loans. The fund may also be used to enable political subdivisions to
obtain water from larger political subdivisions, to finance the
consolidation or regionalization of neighboring political subdivisions and
an outreach and technical assistance program. 

EFFECTIVE DATE

September 1, 2001.