Disaster Debt Bill Lets Water Districts Borrow Before Any Disaster

The text as introduced · 1,100 words

By: Lopez of Cameron
H.B. No. 4820

A BILL TO BE ENTITLED

AN ACT

relating to the issuance of obligations by certain water districts

bordering the Gulf of America and an international border during a

disaster declaration.

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

SECTION 1. Section 49.153, Water Code, is amended by

amending Subsections (c) and (e), and adding subsections (f), (g)

and (h) to read as follows:

(c) Except as provided by Subsection (e) and (f) , a district

may not execute a note for a term longer than three years unless the

commission issues an order approving the note.

(d) This section does not apply to special water

authorities.

(e) Subsection (c) does not apply to:

(1) a note issued to and approved by:

(A) the Farmers Home Administration;

(B) the United States Department of Agriculture;

(C) the Texas Water Development Board;

(D) the North American Development Bank; or

(E) a federally chartered instrumentality of the

United States authorized under 12 U.S.C. Section 2128(f) to provide

financing for water and waste disposal facilities, provided that

the district that executes the note is located wholly in a county

that:

(i) does not contain a municipality that

has a population of more than 750,000; and

(ii) is not adjacent to a county described

by Subparagraph (i); or

(2) a district described by Section 49.181(h) . ; or

(3) a district entirely within a county bordering both

the Gulf of America and an international border subject to the

requirements of subsection (f).

(f) Notwithstanding any other law or limitations provided

in this Section, a district described in subsection (e)(3) may

issue notes during or prior to a disaster pursuant to the terms of a

note authorization provided that a certified copy of the note

authorization and all proceedings related to the issuance of notes

have been sent to the attorney general for approval in accordance

with Section 49.184. If a disaster declaration is made, a district

described in subsection (e)(3) may issue notes pursuant to this

Section beginning on the date of the disaster declaration and

continuing for the duration specified in the note authorization or

until the disaster declaration expires, whichever is later. Any

notes issued pursuant to this Section shall be incontestable in any

court or other forum, for any reason, and shall be valid and binding

obligations in accordance with their terms for all purposes.

(g) For purposes of this Section, the term note shall

include commercial paper notes if the terms of such notes meet the

requirements of Section 2256.013(1), Government Code.

(h) For purposes of this Section "disaster declaration"

means declaration of a state of disaster or emergency made by the

president of the United States for the state or any portion of the

district's territory, or a declaration of a state of disaster is

made pursuant to Chapter 418, Government Code, for the entire state

or any portion of the district's territory, and any amendment,

modification, or extension of the declaration.

SECTION 3. Section 49.154, Water Code, is amended by

amending Subsection (d) to read as follows:

(d) Except for instances in which a disaster declaration as

described by 49.153(h) is in effect, D districts required to seek

commission approval of bonds must have an application for such

approval on file with the commission prior to the issuance of bond

anticipation notes or tax anticipation notes. If a disaster

declaration is made, a district described in 49.153(e)(3) may issue

bond anticipation notes or tax anticipation notes as described by

subsection (b) beginning on the date of the disaster declaration

and continuing for the duration of the disaster declaration.

SECTION 4. Section 49.181, Water Code, is amended by

amending Subsection (h) to read as follows:

(h) This section does not apply to:

(1) a district if:

(A) the district's boundaries include one entire

county;

(B) the district was created by a special Act of

the legislature and:

(i) the district is located entirely within

one county;

(ii) the district is located entirely

within one or more home-rule municipalities;

(iii) the total taxable value of the real

property and improvements to the real property zoned by one or more

home-rule municipalities for residential purposes and located

within the district does not exceed 25 percent of the total taxable

value of all taxable property in the district, as shown by the most

recent certified appraisal tax roll prepared by the appraisal

district for the county; and

(iv) the district was not required by law to

obtain commission approval of its bonds before the effective date

of this section;

(C) the district is a special water authority;

(D) the district is governed by a board of

directors appointed in whole or in part by the governor, a state

agency, or the governing body or chief elected official of a

municipality or county and does not provide, or propose to provide,

water, sewer, drainage, reclamation, or flood control services to

residential retail or commercial customers as its principal

function;

(E) the district on September 1, 2003:

(i) is a municipal utility district that

includes territory in only two counties;

(ii) has outstanding long-term

indebtedness that is rated BBB or better by a nationally recognized

rating agency for municipal securities; and

(iii) has at least 5,000 active water

connections; or

(F) the district:

(i) is a conservation and reclamation

district created under Section 59, Article XVI, Texas Constitution,

that includes territory in at least three counties; and

(ii) has the rights, powers, privileges,

and functions applicable to a river authority under Chapter 30; or

(G) the district is a district described by

49.153(e)(3) if:

(i) a declaration of a state of disaster or

emergency, and any amendment, modification, or extension of said

declaration, made by the president of the United States for the

state or any portion of the district's territory, is in effect; or

(ii) a declaration of a state of disaster,

and any amendment, modification, or extension of said declaration,

made pursuant to Chapter 418, Government Code, for the entire state

or any portion of the district's territory, is in effect.

(2) a public utility agency created under Chapter 572,

Local Government Code, any of the public entities participating in

which are districts if at least one of those districts is a district

described by Subdivision (1)(E).

SECTION 5. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the necessary vote, this Act takes effect

September 1, 2025.