Focus Report, Volume 86, Number 3, August 2019 Page: 7
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* Proposition 2: Allowing TWDB to issue
more water development project bonds
SJR 79 by Lucio (M. Gonzalez)Background
Water Code ch. 17, subch. K establishes the
Economically Distressed Areas Program (EDAP) governed
by the Texas Water Development Board (TWDB).
EDAP provides financial assistance for projects to
develop water and wastewater services in economically
distressed areas where these services or facilities are
inadequate to meet minimum state standards. An
economically distressed area is a political subdivision in
which the median household income level does not exceed
75 percent of the state's median income level.
The program is funded by proceeds from bonds sold
by TWDB. EDAP received constitutional authority in
both 1989 and 2007 to issue $250 million in bonds and
has previously received federal funds. The 85th Legislature
in 2017 authorized TWDB to issue the program's
remaining constitutionally authorized bonding authority
of about $53.5 million.
Digest
Proposition 2 would add sec. 49-d-14 to Art. 3 of the
Texas Constitution to allow the Texas Water Development
Board (TWDB) to issue additional general obligation
bonds for the Economically Distressed Areas Program
account. The bonds would be used to provide financial
assistance for developing water supply and sewer service
projects in economically distressed areas of the state.
TWDB could issue the bonds in amounts such that the
aggregate principal amount of the bonds issued under the
amended section that were outstanding at any time did
not exceed $200 million.
The bonds would be sold in forms and
denominations, on terms, at times, in the manner, at
places, and in installments as determined by TWDB. The
board also would determine the rate or rates of interest the
bonds would bear.The ballot proposal reads: "The constitutional
amendment providing for the issuance of additional
general obligation bonds by the Texas Water Development
Board in an amount not to exceed $200 million to provide
financial assistance for the development of certain projects
in economically distressed areas."
Supporters say
Proposition 2 would provide essential financing for
necessary water and wastewater infrastructure projects in
economically distressed areas of Texas. The Economically
Distressed Areas Program (EDAP) needs to be replenished
if it is to continue funding existing projects and support
future projects for communities that otherwise could not
afford access to safe water.
While the costs of water infrastructure are high, it is
critical that Texans have access to water that meets state
standards. Financing some of these costs through bond
issues would allow for greater and more reliable funding
over a longer period of time. Using general revenue to
support EDAP and water infrastructure development
would strain available resources without providing the
long-term benefits of a bond issuance, which allow
expenses to be funded in a more flexible manner.
Critics say
Proposition 2 would increase the size of the
government and state bond debt by allowing the Texas
Water Development Board (TWDB) to issue additional
bonds, which would raise expenses for taxpayers. If
TWDB needs additional funding for the Economically
Distressed Areas Program, that money should come from
general revenue during the regular budgeting process for
state agencies.House Research Organization
Page 7
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Texas. Legislature. House of Representatives. Research Organization. Focus Report, Volume 86, Number 3, August 2019, periodical, August 27, 2019; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1364417/m1/7/?rotate=90: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.