Office of House Bill AnalysisC.S.H.B. 2776
By: Wise
Natural Resources
Committee Report (Substituted)


In Texas, nonprofit organizations (organizations)  have helped colonia
residents build their own water and wastewater projects.  The legislature
had endorsed the concept of self-help work in colonias by funding the
bootstrap loan program at the Texas Department of Housing and Community
Affairs and by adopting legislation to allow self-help plumbing projects in
colonias administered through the Texas Natural Resource Conservation
Commission. By building their own  water or wastewater projects, colonia
residents may save up to 40 percent of the cost of a traditional project.
Moreover, organizations may leverage state funds to bring funding sources
into the colonia.  C.S.H.B.  2776 creates a colonia self-help program and
creates the colonia self-help account to fund various projects to improve
the condition in colonias. 


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 4 (Section 15.908, Water Code) of this bill. 


C.S.H.B. 2776 amends the Water Code to create the colonia self-help program
(program) and colonia self-help account (account). The bill provides that
the account consists of money transferred by the legislature directly to
the account, money transferred at the Texas Water Development Board's
(board) discretion from the fund, gifts, grants, or donations to the
account, and interest earned on money credited to the account (Secs. 15.901
and 15.902).  

The bill authorizes the board to use funds in the account only  to
reimburse eligible nonprofit organizations (organization) for expenses
incurred in a self-help project that results in the provision of adequate
water or wastewater services to a colonia. The bill authorizes the board to
award grants under the program directly to a nonprofit organization to
reimburse the organization for expenses incurred in a self-help project,
sets forth the eligibility requirements for such an organization, and
establishes the grant application process (Secs. 15.903 - 15.905). The bill
provides that an eligible nonprofit organization must apply to the board
for a grant under the program before incurring any expense associated with
a self-help project (Sec. 15.905). 

The bill requires the board in evaluating an application for a grant, to
consider the number, quality, and character of projects previously
completed by the applicant and the capability of the retail public utility
to provide water or wastewater services to the colonia on completion of the
project, and sets forth provisions regarding the  board's action on a grant
application (Secs. 15.906 - 15.907).  The bill requires the board to adopt
rules necessary to administer the program and  requires the program to be
co-administered by the office of the secretary of state until the second
anniversary of the date on which the program begins operations (Secs.
15.908 - 15.909).  

The bill prohibits an applicant from receiving funds unless the applicable
political subdivision adopts and enforces the model rules (Sec. 16.343). 


On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 


C.S.H.B. 2776 differs from the original bill by adding legislative findings
and  an exemption for  the colonia self-help program (program) from the
Uniform Grant and Contract Management Act (Sec. 15.008 and SECTION 1). 

The substitute provides that after notice and hearing and subject to any
limitations established by the General Appropriations Act, the Texas Water
Development Board (board) may transfer money from the water assistance fund
to the colonia self-help account (account)  (Sec. 15.011).  The substitute
differs from the original bill by providing that the account also consists
of gifts, grants, and donations.  The substitute modifies the provisions
regarding the use of the account (Sec. 15.903).  The substitute adds new
application requirements and identifies criteria for board consideration of
a grant applicant  and specifies the information that a grant application
must include (Secs. 15.905 and 15.906). The substitute sets forth
provisions regarding board action on a grant application (Sec. 15.907). The
substitute also sets forth provisions regarding adoption of model political
subdivision rules by a political subdivision (Sec. 16.343).