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.