HBA-LJP C.S.H.B. 3017 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 3017 By: Chisum Natural Resources 4/10/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE The Texas Water Development Board (board) was created in 1957 by the 55th Legislature to be the state's water planning and financing agency that provides leadership, technical services, and financial assistance to support planning, conservation, and responsible development of water for the State of Texas. Under current law, the board is subject to review of the Sunset Advisory Commission, but not abolishment under the Texas Sunset Act. C.S.H.B. 3017 implements the Sunset Advisory Commission's recommendations for the board from the review. 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 15 (Section 15.603, Water Code), SECTION 17 (Section 15.909 and 15.910, Water Code), SECTION 18 (Section 16.021, Water Code), and SECTION 26 of this bill. ANALYSIS C.S.H.B. 3017 amends the Water Code to provide for the continuation of the Texas Water Development Board (board) until September 1, 2013, and to set forth standard Sunset Advisory Commission recommendations for the board regarding equal employment, member removal, conflicts of interest, standards of conduct, policy implementation by the board, written complaints, development of an equal employment policy, member training, and a state employee incentive program (Secs. 6.013, 6.052, 6.054, 6.057, 6.058, 6.062, 6.106, 6.111, 6.154, 6.155, 6.188, and 6.196). The bill requires the executive administrator to develop and submit to the board for approval a capital spending plan for state-funded programs, including the Texas water development fund II, the agricultural water conservation fund, and the water assistance fund. The bill sets forth the considerations of the executive administrator in developing the plan and the contents of the plan. The bill requires the board to consider the plan at a regularly scheduled meeting and, on approval, submit the plan to the legislature and the Legislative Budget Board before January 1 of each odd numbered year. The bill authorizes the board to include the plan as part of its legislative appropriations request (Sec. 6.110). The bill authorizes the use of the water loan assistance program by the board to provide grants for projects for which federal grant funds are placed in the loan fund or on specific legislative appropriation for those projects. The bill provides that the board is prohibited from releasing funds for the construction of a portion of a project that proposes surface water or groundwater development until the executive administrator of the board completes certain findings on that portion of the project. The bill authorizes the board to release funds for preconstruction costs before completing these findings if the executive administrator determines that a reasonable expectation exists that the findings will be made before the release of funds for construction (Secs. 15.102,15.104, and 17.123). The bill authorizes the board to establish a separate account in the revolving fund, to be used solely for providing financial assistance to persons for nonpoint source pollution control and abatement projects and sets forth the financing of the fund. The bill requires the board to adopt rules to establish the criteria for eligibility and the terms of assistance for persons that receive financial assistance from the account (Sec. 15.603). On the request of an agency of this state or a neighboring state or a federal agency, the bill authorizes the board to perform a hydrographic survey in this state or outside of this state if the information collected will benefit this state and provides that the purpose of the survey may be to collect information relating to waterbearing formations (Sec. 15.804). The bill creates the rural community water and wastewater loan fund (fund) within the water assistance fund and provides for the appropriation of revenue and proceeds for the fund. The bill authorizes the board to provide loans of financial assistance, beginning no later than September 1, 2002, to rural communities for the construction, acquisition, or improvement of water and wastewater projects. The bill provides that rural communities that receive financial assistance from the fund are granted all necessary authority to enter into loan agreements and issue promissory notes in connection with the financial assistance. The bill sets forth provisions relating to a loan agreement and promissory note, including the use of a sales tax as loan security, review and approval of a loan agreement by the attorney general, registration of the record of proceedings of a loan agreement execution by the comptroller, the validity and incontestability in court of the loan agreement or promissory note, and the enforcement of payment by mandamus. The bill requires the board to adopt necessary rules no later than March 1, 2002 to administer the fund, including rules to establish procedures for application for and award of loans (Secs. 15.902-15.909, 15.920 and SECTION 26). The bill sets forth the information that an application for financial assistance from the fund must include and requires the board to adopt rules to prescribe the affidavit form the application must conform with for the board to accept the application (Sec. 15.910). The bill prohibits the board from delivering funds under an application for financial assistance from the fund until the executive administrator makes a written statement finding that a rural community proposing surface water or underground water development has the necessary water right authorizing the applicant to appropriate or use the water that the project will provide. The bill prohibits the board from delivering funds for a wastewater treatment plant until the rural community has received a permit for the construction and operation of the plant and approval of the plans and specifications for the plant from the Texas Natural Resource Conservation Commission (Sec. 15.911). The bill sets forth factors the board is required to consider in acting on or passing on an application from a rural community for financial assistance for a water project (Sec. 15.912). The bill authorizes the board to approve by resolution an application for a loan under certain conditions (Sec. 15.913). The bill sets forth content requirements regarding all contracts for the construction of a project of a governing body of each rural community receiving financial assistance from the rural community water and wastewater fund and requires the rural community to file with the board a certified copy of each contract with the specifications, plans, and details of all work included in the contract. The bill sets forth provisions for the filing of construction project contracts, certification of approval of the contracts, inspection of the projects, and the alternation of project plans (Secs.15.914-15.918). The bill requires the board to report to the legislature on the fund no later than January 1, 2005 and sets forth the required contents of the report (Sec. 15.919). The bill authorizes the executive administrator, on behalf of the Texas Natural Resources Information System (TNRIS), to enter into partnerships with private entities to provide additional funding for the improvement of accessing TNRIS information. The bill requires the board to adopt rules for the process of establishing and defining the partnerships, fee collection, and determination of which private entities may enter into partnerships. The bill requires the Texas Geographic Information Council to prepare and provide, no later than September 1 of each even-numbered year, to the board, the Department of Information Resources, the governor, and the legislature a plan that inventories state agency geographic information systems projects and recommends initiatives to improve Texas' geographic information systems programs (Sec. 16.021). The bill requires the board and the State Soil and Water Conservation Board to jointly conduct a study of the ways to improve and expand water conservation efforts and sets forth the contents of a report of the findings to the legislature. The bill also requires that the report be issued as part of, or as a supplement to, the state water plan (Sec. 16.022). The bill raises, from up to 50 percent to all or part, of any authorized facility that the board is authorized to acquire for water development purposes (Sec. 16.136). The bill amends the Government Code to rename the Colonia Advisory Committee as the Colonia SelfHelp Center Advisory Committee (Secs. 2306.584 and 2306.585). The bill also creates the Colonia Water and Wastewater Infrastructure Advisory Committee (advisory committee) and provides that the advisory committee is composed of seven members appointed by the governor, one colonia resident, one representative of a nonprofit organization that serves colonia residents, one local government representative, one person to represent private interests in banking or land development, one representative of a nonprofit utility, one representative of an engineering consultant firm involved in economically distressed areas program projects, and one public member. The bill provides that each advisory committee member, except the public member, must reside within 100 miles of the Texas-Mexico border and provides that the secretary of state is an ex officio member of the advisory committee. The bill requires the advisory committee to review the progress of water and wastewater infrastructure affecting colonias and present an update, and to make recommendations on the status of the infrastructure and the colonia projects to the board and the governing board of the Texas Department of Housing and Community Affairs (TDHCA) annually at a joint meeting (Sec. 2306.5851). The bill requires the board to meet annually with TDHCA to address progress in meeting the needs of colonia residents and to receive an update and recommendations from the advisory committee (Sec. 6.060, Water Code). EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 3017 amends the original to clarify that the capital spending plan submitted to the executive administrator of the Texas Water Development Board (board) for approval is for state-funded programs, including the Texas water development fund II, rather than the Texas water development fund. In developing the plan, the substitute replaces the consideration of the reasons projects that did not meet the goals identified in prior plans received funding with the consideration of the reasons state-supported funding was not allocated according to the methodologies identified in prior plans (Sec. 6.110). The substitute sets forth provisions regarding the use of the water loan assistance program by the board for federal grant funds and specific legislative appropriation for those projects, and the release of funds for projects before required findings by the executive administrator of the board are complete (Secs. 15.102 and 15.104). On the request of an agency of this state or a neighboring state or a federal agency, the substitute authorizes the board to perform certain hydrographic surveys in this state or outside of this state if the information collected will benefit this state (Sec. 15.804). The substitute modifies the definition of a "political subdivision" to include a municipality, rather than a city, and modifies the definition of "rural community" to include certain districts or authorities created with a population of less than 5, 000 that is located outside the boundaries or extraterritorial jurisdiction of a municipality and a municipality or county with a population of less than 5, 000 (Sec. 15.901). C.S.H.B. 3017 provides that loan agreements provide for the issuance of a promissory note payable to the board to evidence the obligation of the rural community to repay the loan from the rural community water and wastewater loan fund made in accordance with the terms of the loan agreement (Sec. 15.903). The substitute sets forth provisions regarding the authority of rural communities that receive financial assistance from the fund to enter into loan agreements and issue promissory notes in connection with the financial assistance (Sec. 15.920). The substitute removes the prohibition on the board from adopting rules that restrict or prohibit the board from requiring additional factual material from an applicant for monies from the rural community water and wastewater loan fund (Sec. 15.910). C.S.H.B. 3017 removes provisions regarding the prohibition of the board from delivering funds for a proposed wastewater treatment plant that is located outside the jurisdiction of this state and is not subject to the permitting authority of Texas Natural Resource Conservation Commission (TNRCC) until the board reviews the plans and specifications in coordination with TNRCC and makes certain findings (Sec. 15.911). C.S.H.B. 3017 removes the requirement that the board consider whether a rural community has been designated to provide a regional system and the development of the system is declared in policy of the legislature and requires the board to consider any other relevant factors (Sec. 15.912). The substitute removes provisions regarding insufficient funds for all the applications and giving preference to applications from rural communities that the board finds cannot reasonably finance the project without assistance from the state (Sec. 15.914). C.S.H.B. 3017 requires the board to review for approval or disapproval plans and specifications for all sewage, collection, treatment, and disposal system in a manner that will satisfy the requirements of TNRCC, rather than requiring TNRCC to approve the plans and specifications (Sec. 15.917). The substitute raises, from up to 50 percent to all or part, of any authorized facility that the board is authorized to acquire for water development purposes (Sec. 16.136).