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).