HBA-CBW C.S.H.B. 2776 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2776 By: Wise Natural Resources 4/10/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE In Texas, nonprofit organizations (organizations) have helped colonia residents build their own water and wastewater projects. The legislature had endorsed the concept of self-help work in colonias by funding the bootstrap loan program at the Texas Department of Housing and Community Affairs and by adopting legislation to allow self-help plumbing projects in colonias administered through the Texas Natural Resource Conservation Commission. By building their own water or wastewater projects, colonia residents may save up to 40 percent of the cost of a traditional project. Moreover, organizations may leverage state funds to bring funding sources into the colonia. C.S.H.B. 2776 creates a colonia self-help program and creates the colonia self-help account to fund various projects to improve the condition in colonias. 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 4 (Section 15.908, Water Code) of this bill. ANALYSIS C.S.H.B. 2776 amends the Water Code to create the colonia self-help program (program) and colonia self-help account (account). The bill provides that the account consists of money transferred by the legislature directly to the account, money transferred at the Texas Water Development Board's (board) discretion from the fund, gifts, grants, or donations to the account, and interest earned on money credited to the account (Secs. 15.901 and 15.902). The bill authorizes the board to use funds in the account only to reimburse eligible nonprofit organizations (organization) for expenses incurred in a self-help project that results in the provision of adequate water or wastewater services to a colonia. The bill authorizes the board to award grants under the program directly to a nonprofit organization to reimburse the organization for expenses incurred in a self-help project, sets forth the eligibility requirements for such an organization, and establishes the grant application process (Secs. 15.903 - 15.905). The bill provides that an eligible nonprofit organization must apply to the board for a grant under the program before incurring any expense associated with a self-help project (Sec. 15.905). The bill requires the board in evaluating an application for a grant, to consider the number, quality, and character of projects previously completed by the applicant and the capability of the retail public utility to provide water or wastewater services to the colonia on completion of the project, and sets forth provisions regarding the board's action on a grant application (Secs. 15.906 - 15.907). The bill requires the board to adopt rules necessary to administer the program and requires the program to be co-administered by the office of the secretary of state until the second anniversary of the date on which the program begins operations (Secs. 15.908 - 15.909). The bill prohibits an applicant from receiving funds unless the applicable political subdivision adopts and enforces the model rules (Sec. 16.343). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2776 differs from the original bill by adding legislative findings and an exemption for the colonia self-help program (program) from the Uniform Grant and Contract Management Act (Sec. 15.008 and SECTION 1). The substitute provides that after notice and hearing and subject to any limitations established by the General Appropriations Act, the Texas Water Development Board (board) may transfer money from the water assistance fund to the colonia self-help account (account) (Sec. 15.011). The substitute differs from the original bill by providing that the account also consists of gifts, grants, and donations. The substitute modifies the provisions regarding the use of the account (Sec. 15.903). The substitute adds new application requirements and identifies criteria for board consideration of a grant applicant and specifies the information that a grant application must include (Secs. 15.905 and 15.906). The substitute sets forth provisions regarding board action on a grant application (Sec. 15.907). The substitute also sets forth provisions regarding adoption of model political subdivision rules by a political subdivision (Sec. 16.343).