Part 10.
TEXAS WATER DEVELOPMENT BOARD
Chapter 367.
AGRICULTURAL WATER CONSERVATION PROGRAM
The Texas Water Development Board (the board) adopts the repeal of
31 TAC Chapter 367, Subchapter A, §§367.1 - 367.3 and §§367.21
- 367.30, Subchapter B, §§367.40 - 367.51, Subchapter C, §§367.71
- 367.77, concerning the Agricultural Water Conservation Program (AWCP). The
board also adopts new Chapter 367, §§367.1 - 367.14, concerning
Agricultural Water Conservation Program (AWCP) without changes to the proposed
text as published in the January 2, 2004 issue of the
Texas Register
(29 TexReg 54) and will not be republished. The repeal
and new sections reflect changes to the Texas Water Code enacted by the 78th
Legislature which consolidate three existing agricultural water conservation
programs into one program.
The current AWCP is composed of three subchapters that were created at
different times and provide different types of financial assistance from different
funding sources. Current Chapter 367, Subchapter A, §§367.1 - 367.3
and §§367.21 - 367.30, provides grants to political subdivisions
for the purchase of equipment used in agricultural production that conserves
water. Pursuant to former Water Code Chapter 15, Subchapters G and H, the
primary source of funds for this program was the agricultural soil and water
conservation fund from transfers from the agricultural trust fund. Current
Chapter 367, Subchapter B, §§367.40 - 367.51 provides loans to political
subdivisions for the political subdivision to purchase and install equipment
used in agricultural production that conserves water. This subchapter also
provides loans to political subdivisions so that the political subdivision
can provide loans to individuals to purchase and install equipment used in
agricultural production that conserves water. Pursuant to the applicable statutes
and board rule, in the event of the default on a loan by an individual made
by a political subdivision under this program, the board will share in 50%
of the loss from the default. Pursuant to Water Code Chapter 17, Subchapter
J, the source of funds for this program was the agricultural water conservation
fund, which was primarily funded through the sale of bonds by the board. Current
Chapter 367, Subchapter C, §§367.71 - 367.77 provides grants to
state agencies for purposes specified in legislative appropriations and is
funded through the sale of bonds as authorized in Water Code Chapter 17, Subchapter
J. Senate Bill 1053 of the 78th legislative sessions consolidated all the
money in the agricultural soil and water conservation fund and the agricultural
trust fund into the agricultural water conservation fund. Senate Bill 1053
repealed Water Code Chapter 15 Subchapters G, H, and I as well as amending
Water Code Chapter 17, Subchapter J. As amended, Water Code Chapter 17, Subchapter
J now identifies conservation programs and projects and authorizes the board
to provide grants to state agencies for such programs and projects. Newly
amended Water Code Chapter 17, Subchapter J also authorizes the board to provide
grants and loans to political subdivisions for such programs and projects.
The authority to make loans to political subdivisions includes the authority
to loan funds to political subdivisions which may, in turn, make loans to
individuals for conservation projects as was authorized before Senate Bill
1053. The statute, however, does not authorize the board to share any of the
loss that may result in a default by an individual to the political subdivision
as was authorized before Senate Bill 1053. With the consolidation of all the
accounts into one fund, the board repeals 31 TAC Chapter 367 and adopts new
31 TAC Chapter 367 to eliminate its subchapters, consolidate all the activities
previously performed in the separate subchapters into one chapter, and fund
these activities from the agricultural water conservation fund.
The board adopts new §367.1 to add the board authority to provide
loans and to change the reference from Water Code Chapter 15, Subchapter H
to Chapter 17, Subchapter J. The new section is intended to reflect that statutory
policy for the AWCP is derived from Water Code Chapter 17, Subchapter J and
that this policy includes providing loans in addition to grants. This reflects
authority found in current rules in Chapter 367 Subchapter B which is adopted
for repeal.
The board adopts new §367.2 to include new definitions for the terms
conservation program, conservation project, construction, eligible cost, fund,
and person. New Water Code §17.897 sets out the activities that are associated
with conservation programs and identifies the costs associated with those
activities which will be eligible for payment under the AWCP. The board adopts
new §367.2(2) to define conservation program using the same language
as Water Code §17.897 so that the board utilizes all the specific statutory
authority available to fund conservation program activities. Additionally,
new Water Code §17.899 authorizes grants to state agencies for a conservation
program that provides funding to a political subdivision or person for conservation
projects. Since this authority further defines the scope of conservation programs,
the board includes the language in new §367.2(2). New §367.2(2)(E)
identifies a program that is administered by a political subdivision to provide
a loan to a person for a conservation project to the definition of conservation
program. This subsection is included pursuant to the board's authority under
new Water Code §17.897(a)(4) and is intended to clearly include the continuation
of the current loan program to conservation districts program that provide
loans to individuals. The board adopts new §367.2(3) to define conservation
project with the same language used in new Water Code §17.898 that identifies
activities that are associated with conservation projects. The board uses
a definition of conservation project using the same language as Water Code §17.898
so that the board uses the statutory authority available in funding conservation
project activities. The board adopts new §367.2(4) to define construction.
Board funding may include paying the costs of construction of conservation
projects. When eligible costs of construction are included in an application
for a grant or loan, additional information to evaluate the application is
appropriate because construction costs typically represent a substantial part
of a project budget and therefore consume a greater share of the financial
assistance available from the board. In order to identify the circumstances
in which the additional information is appropriate, the board defines construction
to be actual construction, alteration or repair of a fixed improvement on
real property that requires plans or designs prepared by a licensed professional
engineer. The board defines construction in the instances which require the
involvement of a engineer licensed by the state because it is these instances
in which the construction activity is identifiably significant. By defining
construction in relation to the involvement of a licensed engineer, the construction
activity for the project achieves a level that additional information and
review by the board is appropriate. The board adopts new §367.2(5) to
define eligible cost. The new section will define eligible cost the same as
Water Code §17.897 and §17.898 as amended, which include subsections
that identify costs elements which the board may finance when making grants
or loans for conservation programs or projects, respectively. This will allow
the board to provide the fullest extent of the financial assistance that is
authorized by statute. The board adopts new §367.2(7) to define fund
as the agricultural water conservation fund authorized by the Texas Constitution
so that the source of funds can be readily identified in this chapter. The
board repeals current §367.2(4), which defines political subdivision,
to be new §367.2(9) and to include changes to the definition so it corresponds
to the definition of political subdivision in new Water Code §17.871(6).
In doing so, these rules will identify the entities to which the board may
provide financial assistance consistent with its statutory authority.
The board repeals the current §367.3 due to the repeal Water Code §15.435.
In its place, the board adopts new §367.3 that identifies the eligible
uses of money in the fund that is available to state agencies and political
subdivisions. The language of this provision is the same as the language in
new Water Code §17.899 in regard to the uses of the fund which involve
providing assistance to state agencies and political subdivisions.
The board adopts new §367.4 to establish a procedure that will identify
the money that the board determines is appropriately made available for grants
and loans each year. New §367.4(a) requires the executive administrator
to report to the board the amount of money available in the fund and to recommend
an amount from the available funds to be used as grants and loans. The subsection
will allow the board to be informed of the management of the fund at least
annually or more frequently at the discretion of the board. New §367.4(b)
provides for the board to approve the final allocations of money from the
fund for different purposes. New §367.4(c) sets out the method for the
executive administrator, with board approval, to solicit grant applications
based on the money that the board in its discretion might make available from
the fund. The new subsection specifies that the notice will identify the amount
of funds that are available, the types of programs or projects that are being
solicited, any additional application requirements not already identified
elsewhere in the chapter, the methodology by which the board will select between
competing applications, any requirements that will be a part of the grant
award, and the due date for the applications. This procedure allows the board
the flexibility to propose potential programs and projects annually to address
the state's needs that have become apparent at the time of consideration.
New §367.4(d) provides that state agencies and political subdivisions
can submit requests for grant funds even if there is not a request for grant
applications pending. Under this new subsection, the board can periodically
review unsolicited grants proposals and may provide funds for those programs
or projects. This new subsection allows the board to act on programs and projects
that it had not considered but that the board determines require immediate
or special attention.
The board adopts new §367.5 to identify the minimum application requirements
applicable to requests for funding from the AWCP. Most of these requirements
are identical to or similar to provisions currently in place for applications
for loans and grants from the board's various agricultural water conservation
programs. New §367.5(a) requires that all applications include the name
of the applying entity, the legal authority that created the entity and under
which it currently operates, and the names of the people that are authorized
to act for the entity. This new subsection as adopted requires that the person
or people authorized to act for the entity submit a sworn affidavit, a certified
resolution, or certified minutes from such person or persons stating the amount
of the request, authorizing the submission of the application, and designating
an individual to be the contact person for the grant application and to be
responsible for the completion of the terms of the grant. This new subsection
also requires that the application include a map or description of the area
in which the applicant is authorized to act and a description of the proposed
program or project to include where and when the activity will occur. The
new subsection also requires that the application include a budget identifying
the total cost of the program or project, a cost for each significant element,
and identification of other sources of funds. This new subsection also requires
that the application identify the proposed benefits from the project, a description
of the applicant's water conservation efforts, and a water conservation water
management strategy from the approved regional water plan of the area of the
state of the project or state water plan that will be implemented by the use
of the grant. An application meeting these requirements will provide the board
with the minimum information necessary for the board to consider the information
required by statute, making the findings required by statute, and to meet
its fiduciary responsibilities with respect to the allocation of state resources.
New §367.5(a)(12) adds an additional application requirement to include
any other information that may be specifically requested by the executive
administrator or the board. In those instances that the general application
materials do not provide sufficient information for the board to perform its
obligations for the fund under the statutes, this paragraph provides the board
a method to solicit additional information for the application. New §367.5(b)
provides that applications for conservation program or project loans must
include fiscal information identifying the applicant's proposed repayment
methods in addition to the requirements included in new §367.5(a). New §367.5(b)
also provides that if the political subdivision intends to use the board's
loan to provide loans to persons, then the application from the political
subdivision shall include a description of the conservation projects which
will be funded by the loans provided to the political subdivision's applicants,
the standards for and procedures applied to loan applications, and a sample
or adequate description of the agreement pursuant to which the funds will
be provided. This information is consistent with the information that is currently
requested for such loans and insures that the board fulfills its fiduciary
duties with respect to the use of state funds.
The board adopts new §367.6, which is substantially similar to current §367.48(1),
to require applications that request financial assistance for projects which
will result in construction, as defined, to include an engineering feasibility
report signed and sealed by a professional engineer licensed in the State
of Texas. This new section requires that the feasibility report include a
project description and estimated cost, an alternatives analysis, sufficient
information for the board to evaluate the engineering feasibility of the project
together with the maps and drawings to locate and describe the project area,
a statement regarding whether there will be surface or subsurface disturbance
of soil, and other information as may be reasonably required by the executive
administrator. This report allows the board to insure the feasibility of a
proposed construction project. Additionally, identification of surface or
subsurface soil disturbance triggers the necessity of an environmental assessment
under new §367.7.
The board adopts new §367.7, which is substantially the same as current §367.49
for agricultural water conservation loans, to provide that applications for
funds which will be used for construction that results in surface or subsurface
soil disturbance or alteration of existing vegetation will include environmental
assessments. This section specifically allows an applicant to submit an environmental
assessment performed for any other state or federal agency in satisfaction
of the requirements of this section. To prepare an assessment under this section,
the applicant will submit preliminary information sufficient for the executive
administrator to determine if any environmental regulations, as defined in
the section, are affected. If no such regulations are affected, the executive
administrator will notify the regulatory agencies, as defined, that the project
will be categorically excluded and so inform the board upon application consideration.
If the preliminary project information indicates that some but not all environmental
regulations are affected, the executive administrator will notify the applicant
and the regulatory agencies that some environmental regulations are unaffected
and on which further review will not occur while some environmental regulations
are affected requiring further review. For this mid-level review, either the
applicant or the executive administrator, at the election of the applicant,
will develop further information or an action plan to coordinate adequate
compliance for the affected environmental regulations. If the preliminary
project information indicates that all environmental regulations are affected,
the executive administrator will notify the applicant and the regulatory agencies
that a full review is required. Either the applicant or the executive administrator,
at the election of the applicant, will develop all the required information
or an action plan to coordinate adequate compliance with all the affected
environmental regulations. At the completion of either the mid-level or full
review, the completed environmental assessment will be a part of a complete
application. This section insures that the board receives the minimum information
necessary to insure that money provided from the fund for construction will
not result in the violation of existing environmental regulations. This new
section contains the same requirements for an environmental assessment required
for the board's other state funded financial assistance programs as set out
in 31 TAC §363.14.
The board adopts new §367.8 to identify the standards by which the
board will review a grant application from a state agency. New §367.8(a)
provides that the board will consider the commitment of the state agency to
water conservation and the benefits that will be derived from the grant. These
considerations are included because they are the considerations required by
new Water Code §17.900. New §367.8(b) identifies the findings that
must be made by the board in order to approve a grant application of a state
agency. The findings, as adopted, are that the grant funds will supplement
rather than replace funds available to the state agency from other sources
and the grant will further water conservation in the state. These two findings
are included because they are the statutory findings required in Water Code §17.900.
A third finding required by Water Code §17.900 is that the public interest
will be served by the grant. The board uses that a factor which must be included
in this finding is that the grant must serve the public interest by assisting
in the implementation of a water conservation water management strategy identified
in the most recent applicable regional water plan or state water plan. New §367.8(c)
provides that when a legislative appropriation requires additional or different
considerations or findings by the board, the board will comply with those
legislative requirements, which is also consistent with Water Code §17.900.
New §367.8(d) requires that upon approval of a grant by the board, the
executive administrator will be required to execute a grant contract with
the state agency that incorporates terms and conditions that will effectuate
the purpose and intent of the grant approved by the board. The flexibility
obtained by the board by annually proposing grants for programs and projects
necessary results in different expectations for those programs and projects.
Consequently, this section assigns the duty and obligation to the executive
administrator to negotiate the appropriate terms and conditions for each program
and project to be implemented with the state agency through written agreement
to achieve the objectives of the board.
The board adopts new §367.9 to identify the standards by which the
board will review a grant application from a political subdivision. New §367.9(a)
provides that the board will consider the political subdivision's use of other
available funding for the proposed grant activity, the willingness of the
applicant to raise its own revenues, the political subdivision's commitment
to water conservation, and the benefits that will be derived from the grant,
all of which are the considerations required by new Water Code §17.902.
New §367.9(b) identifies the findings that must be made by the board
in order to approve a grant application of a political subdivision. The findings,
as adopted, are that the grant funds will supplement rather than replace funds
available to the political subdivision from other sources and the grant will
further water conservation in the state. These two findings are verbatim to
the statutory findings required in Water Code §17.902. A third finding
required by that statutory provision is that the public interest will be served
by the grant. The board uses that a factor which must be included in this
finding is that the grant must serve the public interest by assisting in the
implementation of a water conservation water management strategy identified
in the most recent applicable regional water plan or state water plan. New §367.9(c)
requires that upon approval of a grant by the board, the executive administrator
will be required to execute a grant contract with the state agency that incorporates
terms and conditions that will effectuate the purpose and intent of the grant
approved by the board. The flexibility obtained by the board by annually proposing
grants for programs and projects necessarily results in different expectations
for those programs and projects. Consequently, this section assigns the duty
and obligation to the executive administrator to negotiate the appropriate
terms and conditions for each program and project to be implemented with the
political subdivision through written agreement to achieve the objectives
of the board.
The board adopts new §367.10 to identify the standards by which the
board will review a loan application from a political subdivision. New §367.10(a)
provides that the board will consider the political subdivision's ability
to repay the loan and whether the loan will further water conservation, which
are the considerations required by new Water Code §17.9021. New §367.10(b)
identifies the findings that must be made by the board in order to approve
a loan application of a political subdivision. The findings, as adopted, are
that the public interest will be served by providing the loan, the political
subdivision has the ability to repay the loan and that the loan will further
water conservation in the state. These findings are verbatim to the statutory
findings required by Water Code §17.9021. As authorized by new Water
Code §17.9022, new §367.10(c) provides that the board may make the
loan available in any feasible manner to include the purchase of the political
subdivision's bonds or the execution of a loan agreement.
The board adopts new §367.11 to identify the maturity and interest
rates for loans approved under this chapter. New §367.11(a) provides
that the maturity will be determined by the board which provides flexibility
so that the board can adjust the maturity based on the nature of the loan.
New §367.11(b) provides that the interest rate will be equal to the interest
rate for an U.S. Treasury note with a twelve-month maturity on the date that
rates are set, which is the same interest rate under the current program.
New §367.11(c) and (d) identifies the time schedule in which the interest
rate will be identified for the applicant which is the same as is used with
the board's other programs.
New §367.12(a) states the intention of the board that the provisions
of this section will apply specific procedures to conservation projects that
involve construction, as that term is defined in the chapter. New subsection
(b) provides that prior to release of funds for construction activities, the
executive administrator will review and provide written approval of plans
and specifications for the construction work. Additionally, if the construction
is to be performed pursuant to construction contracts, the subsection requires
certain provisions to be included in the contracts and that the contracts
will be reviewed and approved by the executive administrator prior to release
of funds for construction. New subsection (c) authorizes the closing of the
loan and release of funds for the payment of planning and design or other
non-construction costs if the construction funds are escrowed. New subsection
(d) provides that after the construction contract is awarded, the applicant
shall insure adequate project inspection, obtain assurances from the project
engineer that the project is properly constructed, allow the executive administrator
to inspect the project, and take corrective action as may be necessary to
complete the project. New subsection (e) provides that the applicant shall
notify the executive administrator of project completion, that the executive
administrator will confirm completion and authorize the release of retainage
for the construction contract. New subsection (f) specifically notes that
none of the activity described in this section for the executive administrator
shall create any liability from the construction activity for the state.
New §367.13 provides that substantial changes to a program or project,
including an increase on funds required from the board, will require board
approval and that all other changes must be approved by the executive administrator.
Due to the limited availability of funds and the fiduciary responsibility
to the funds by the board, the board is retaining control over any cost increases
impacting the use of these funds.
New §367.14 sets forth reporting requirements for loan recipients.
Current provisions of §367.51 provide that the board will share 50% of
the costs with a political subdivision of a default by an individual that
has received a loan from a political subdivision. Consistent with the changes
in the Water Code as the result of Senate Bill 1053, the provisions contained
in §367.51 have been repealed.
No comments were received on the proposed repeals and new sections.
Subchapter A. GRANTS FOR EQUIPMENT PURCHASES
31 TAC §§367.1 - 367.3, 367.21 - 367.30
The repeal is adopted under the authority of the Texas Water
Code §6.101 which provides the Texas Water Development Board with the
authority to adopt rules necessary to carry out the powers and duties in the
Texas Water Code and other laws of the State, and §17.903 which requires
the board to adopt rules necessary to carry out the provisions of Subchapter
J, Chapter 17.
The statutory provisions affected by the repeal are Texas Water Code §17.895
and §17.8955.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on February 18, 2004.
TRD-200401112
Jonathan Steinberg
Deputy Counsel
Texas Water Development Board
Effective date: March 9, 2004
Proposal publication date: January 2, 2004
For further information, please call: (512) 475-2052
31 TAC §§367.40 - 367.51
The repeal is adopted under the authority of the Texas Water
Code §6.101 which provides the Texas Water Development Board with the
authority to adopt rules necessary to carry out the powers and duties in the
Texas Water Code and other laws of the State, and §17.903 which requires
the board to adopt rules necessary to carry out the provisions of Subchapter
J, Chapter 17.
The statutory provisions affected by the repeal are Texas Water Code §17.895
and §17.8955.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on February 18, 2004.
TRD-200401113
Jonathan Steinberg
Deputy Counsel
Texas Water Development Board
Effective date: March 9, 2004
Proposal publication date: January 2, 2004
For further information, please call: (512) 475-2052
31 TAC §§367.71 - 367.77
The repeal is adopted under the authority of the Texas Water
Code §6.101 which provides the Texas Water Development Board with the
authority to adopt rules necessary to carry out the powers and duties in the
Texas Water Code and other laws of the State, and §17.903 which requires
the board to adopt rules necessary to carry out the provisions of Subchapter
J, Chapter 17.
The statutory provisions affected by the repeal are Texas Water Code §17.895
and §17.8955.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on February 18, 2004.
TRD-200401114
Jonathan Steinberg
Deputy Counsel
Texas Water Development Board
Effective date: March 9, 2004
Proposal publication date: January 2, 2004
For further information, please call: (512) 475-2052
31 TAC §§367.1 - 367.14
The new sections are adopted under the authority of the Texas
Water Code §6.101 which provides the Texas Water Development Board with
the authority to adopt rules necessary to carry out the powers and duties
in the Texas Water Code and other laws of the State, and §17.903 which
requires the board to adopt rules necessary to carry out the provisions of
Subchapter J, Chapter 17.
The statutory provisions affected by the new sections are Texas Water Code §17.895
and §17.8955.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed
with the Office of the Secretary of State on February 18, 2004.
TRD-200401115
Jonathan Steinberg
Deputy Counsel
Texas Water Development Board
Effective date: March 9, 2004
Proposal publication date: January 2, 2004
For further information, please call: (512) 475-2052
Chapter 523.
AGRICULTURAL AND SILVICULTURAL WATER QUALITY MANAGEMENT
Subchapter B. AGRICULTURAL WATER CONSERVATION LOAN PROGRAM
Subchapter C. GRANTS TO STATE AGENCIES
Part 17.
TEXAS STATE SOIL AND WATER CONSERVATION BOARD