82R1189 ACP-F
	By: Creighton	H.B. No. 865

	A BILL TO BE ENTITLED
	AN ACT
	relating to the composition and use of money in the rural water
	assistance fund.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 15.992, Water Code, is amended by
	amending Subdivision (2) and adding Subdivision (3-a) to read as
	follows:
	(2)  "Federal agency" means an agency or other entity
	of the United States, including the United States Department of
	Agriculture or an agency or entity that is acting through or on
	behalf of that department.
	(3-a)  "Nonprofit water supply or sewer service
	corporation" means a corporation operating under Chapter 67.
	SECTION 2.  Section 15.993, Water Code, is amended to read as
	follows:
	Sec. 15.993.  FUND. The rural water assistance fund is a
	special fund in the state treasury. The fund consists of:
	(1)  money transferred [directly appropriated] to the
	fund at the direction of the legislature [board];
	(2)  repayment of principal and interest from loans
	made from the fund not otherwise needed as a source of revenue
	pursuant to Section 17.9615(b);
	(3)  money transferred by the board from any sources
	available; [and]
	(4)  interest earned on the investment of money in the
	fund and depository interest allocable to the fund;
	(5)  money transferred to the fund from the water
	assistance fund in accordance with Section 15.011(b), including
	proceeds from the sale of political subdivision bonds by the board
	to the Texas Water Resources Finance Authority that are deposited
	in the water assistance fund as provided by Section 17.0871;
	(6)  money from gifts, grants, or donations to the
	fund; and
	(7)  any other fees or sources of revenue that the
	legislature may dedicate for deposit to the fund.
	SECTION 3.  Section 15.994, Water Code, is amended by
	amending Subsections (a), (b), (c), and (e) and adding Subsection
	(h) to read as follows:
	(a)  The fund may be used to provide low-interest loans to
	rural political subdivisions for:
	(1)  water or water-related projects and for water
	quality enhancement projects, including:
	(A)  the construction of infrastructure
	facilities for wholesale or retail water or sewer service;
	(B)  desalination projects;
	(C)  the purchase or lease of water well fields;
	(D)  property necessary for water well fields;
	(E)  [,] the purchase or lease of rights to
	produce groundwater;
	(F)  [,] onsite or wetland wastewater treatment
	facilities;[,] and
	(G)  the interim financing of construction
	projects;
	(2)  water projects included in the state water plan or
	a regional water plan;
	(3)  development of groundwater sources and
	acquisition of water rights, including groundwater and surface
	water rights;
	(4)  the acquisition of retail public utilities as
	defined by Section 13.002;
	(5)  the acquisition of water supply or sewer service
	facilities or systems owned by municipalities or other political
	subdivisions;
	(6)  construction, acquisition, or improvement of
	water and wastewater projects to provide service to an economically
	distressed area;
	(7)  planning and design costs, permitting costs, and
	other costs associated with state or federal regulatory activities
	with respect to a project; and
	(8)  obtaining[.
	[(b)     The fund may be used to enable a rural political
	subdivision to obtain] water or wastewater service supplied by
	other [larger] political subdivisions or financing [to finance] the
	consolidation or regionalizing of neighboring political
	subdivisions, or both.
	(b)  The fund may be used to provide zero interest loans,
	negative interest loans, loan forgiveness, or grants for any
	purpose described by Subsection (a) under criteria developed by the
	board.
	(c)  The board may use money in the [The] fund to contract for
	[may be used to finance an] outreach, financial, and technical
	assistance [program] to assist rural political subdivisions in
	obtaining and using financing from [assistance through] the fund.
	[The board may use money in the fund to contract for such outreach
	and technical assistance.]
	(e)  A rural political subdivision may enter into an
	agreement with a federal agency, [or] a state agency, or another
	rural political subdivision to submit a joint application for
	financial assistance under this subchapter.
	(h)  The board may coordinate its review of an application
	submitted under this subchapter with a federal agency to avoid
	duplication of efforts and costs.
	SECTION 4.  The heading to Section 15.995, Water Code, is
	amended to read as follows:
	Sec. 15.995.  FINANCIAL ASSISTANCE IN GENERAL.
	SECTION 5.  Subchapter R, Chapter 15, Water Code, is amended
	by adding Section 15.996 to read as follows:
	Sec. 15.996.  LOANS TO NONPROFIT WATER SUPPLY OR SEWER
	SERVICE CORPORATIONS. (a) In addition to any other method of
	providing financial assistance authorized by this subchapter, the
	board may make financial assistance available to an applicant that
	is a nonprofit water supply or sewer service corporation by
	entering into a loan agreement with the applicant.
	(b)  To be eligible to receive financial assistance under
	this section, the applicant must:
	(1)  execute a promissory note for the full amount of
	the loan; and
	(2)  provide to the board an attorney's opinion stating
	that the applicant has the authority to incur the debt.
	(c)  An applicant for financial assistance under this
	section is not required to appoint or employ:
	(1)  a bond counsel; or
	(2)  a financial advisor.
	SECTION 6.  This Act takes effect September 1, 2011.