Water Fund Takes 4% Of Sales Tax Before General Revenue

The text as introduced · 720 words

By: Barry
H.B. No. 4657

A BILL TO BE ENTITLED

AN ACT

relating to establishing the Local Government Water Redevelopment

Fund.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 15, Water Code, is amended by adding

Subchapter C-2 to read as follows:

SUBCHAPTER C-2. LOCAL GOVERNMENT WATER REDEVELOPMENT FUND

Sec. 15.161. DEFINITIONS. In this subchapter:

(1) "Applicant" means a political subdivision that

imposes a sales tax or a use tax under Subtitle C, Title 3, Tax Code,

and applies to the Board for a disbursement of money from fund.

(2) "Fund" means the Local Government Water

Redevelopment Fund.

Sec. 15.162. FUND. (a) The fund is a special fund in the

state treasury administered by the board. The fund consists of:

(1) money appropriated for transfer or deposit to the

credit of the fund;

(2) depository interest allocable to the fund;

(3) money from gifts, grants, or donations to the

fund; and

(4) any other fees or sources of revenue that the

legislature may dedicate for deposit to the fund.

(b) The fund is exempt from the application of Section

403.095, Government Code.

(c) Money in the fund may be used only as provided by this

subchapter. The fund and any accounts established in the fund shall

be kept and maintained by or at the direction of the board.

(d) The board may use revenues from the fund to administer

the program.

Sec. 15.163. USE OF FUND. (a) The board shall disburse

funds for the repair and redevelopment of existing water

infrastructure located within the boundaries of an applicant.

(b) The board may approve disbursement of funds for the

repair and redevelopment of existing water structure to multiple

applicants for the same project.

(c) The board shall develop a procedure for applicants to

apply for funding and for the administration of the fund.

(d) The board may not disburse money to an applicant until

an application made to the board for a disbursement of funds from

the fund has been approved by the board.

(e) The board shall adopt rules necessary to administer the

fund.

Sec. 15.164. APPLICATIONS FOR DISBURSEMENT. (a) The

application period for funding opens after the comptroller's

disposition of sales tax proceeds under Section 151.801, Tax Code.

(b) In each fiscal year, an applicant is eligible to receive

an amount equal to up to the amount most recently deposited to the

fund under Section 151.801(g) multiplied by the quotient of:

(1) the applicant's share of the taxes collected by the

comptroller under Subtitle C, Title 3, Tax Code, in the

twelve-month period preceding the comptroller's most recent

deposit to the fund under Section 151.801(g); and

(2) the total amount of taxes collected the by

comptroller under Subtitle C, Title 3, Tax Code, in the

twelve-month period preceding the comptroller's most recent

deposit to the fund under Section 151.801(g).

(c) The board shall publish the amounts that each applicant

is eligible to receive from the fund under Subsection (b).

(d) The comptroller shall assist the board in publishing the

amounts required under Subsection (c).

SECTION 2. Section 151.801, Tax Code, is amended by

amending Subsection (a) and adding Subsection (g) to read as

follows:

(a) Except for the amounts allocated under Subsections (b),

(c), (c-2), (c-3), [ and ] (f), and (g), all proceeds from the

collection of the taxes imposed by this chapter shall be deposited

to the credit of the general revenue fund.

(g) After deposits under subsections (b), (c), (c-2),

(c-3), and (f), but before a deposit of taxes collected under this

chapter to the general revenue fund under Subsection (a), four

percent of all proceeds from the collection of the taxes imposed by

this chapter shall be deposited to the credit of the Local

Government Water Redevelopment Fund under Subchapter C-2, Chapter

15, Water Code.

SECTION 3. Not later than January 1, 2026, the Texas Water

Development Board shall adopt rules as required by this Act.

SECTION 4. This Act takes effect January 1, 2026, but only

if the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, to create the Local Government Water

Redevelopment Fund to assist in financing the repair and

redevelopment of water infrastructure projects in this state is

approved by voters. If that amendment is not approved by voters,

this Act has no effect.