Amendment No. 19 (H.J.R. No. 81)

Wording of Ballot Proposition:

The constitutional amendment providing for the issuance of additional general obligation bonds by the Texas Water Development Board in an amount not to exceed $2 billion.

Analysis of Proposed Amendment:

The proposed amendment would add Section 49-d-9 to Article III of the Texas Constitution to allow the Texas Water Development Board to issue additional general obligation bonds for one or more accounts of the Texas Water Development Fund II in an amount not to exceed $2 billion. Of the bonds issued under Section 49-d-9, $50 million would be used for the water infrastructure fund. Section 49-d-8, Article III, Texas Constitution, would apply to the bonds authorized by Section 49-d-9, except that the limitation in Section 49-d-8 on the amount of bonds that may be issued for one or more accounts of the Texas Water Development Fund II would not apply to the bonds authorized by Section 49-d-9. A limitation on the percentage of state participation in any single project imposed by Article III of the Texas Constitution would not apply to a project funded with the proceeds of bonds issued under Section 49-d-9.

Background

Water has played a crucial historical role in the economic development of Texas. The state’s ability to meet increasing demands for water while continuing to protect water quality, preserve the environment, and provide recreational opportunities will determine the state’s economic well-being. The Texas Water Development Board funds new water management strategies and projects through the Texas Water Development Fund II. This fund authorizes the board to issue bonds for a number of different types of water projects, including water supply projects, water quality enhancement projects, flood control projects, state participation in water and wastewater facilities, and economically distressed areas projects. However, the board has exercised most of its bonding authority under current law. This constitutional amendment would authorize the board to issue additional general obligation bonds in an amount not to exceed $2 billion for the Texas Water Development Fund II. The Texas Water Development Fund II is governed by Subchapter L, Chapter 17, Water Code. The water infrastructure fund was created under Subchapter O, Chapter 15, Water Code, which was added by Senate Bill No. 2, Acts of the 77th Legislature, Regular Session, 2001.

Arguments For:

1. An adequate, clean, and controlled water supply has been a key ingredient in making Texas a good place to live and work and in providing a growing and varied economy. The authorization of additional funding is needed to allow the state and local governments to continue to provide an adequate, clean, and controlled water supply to benefit the state’s people and economy.

2. Although the Texas Water Development Board still has approximately $490 million remaining in its bond authorization, it soon will need additional bonding authority. Waiting two more years to seek voter approval for additional authorization would jeopardize the board’s ability to finance projects to help meet Texas’ future water needs.

3. The proposed bonding authority of $2 billion is not excessive in comparison to the state’s total water needs. The regional water planning groups created under Senate Bill No. 1, Acts of the 75th Legislature, Regular Session, 1997, have proposed construction of $17 billion in water supply projects alone, not counting money needed for water treatment and storage projects, and some studies project that in the next 50 years the state will need to spend $180 billion on water and sewer projects.

Arguments Against:

1. At a time when the state is facing increasing needs for services in all areas and state revenues are being strained to meet all of these needs, the approval of an additional amount of bonds for financing water projects does not appear to be practical or necessary.

2. The authorization of an additional amount of bonds is premature. The Texas Water Development Board still has $490 million remaining in its bond authorization. That amount should be sufficient through the next biennium. If additional authorization is needed at that time, the 78th Legislature, which will meet in 2003, can propose an amendment to increase the board’s bonding authority.

3. The proposed amendment assumes that all projects proposed by local communities and regional water planning groups are needed. Many proposed projects may not be cost-effective or may present potential environmental problems. The projects should be studied further before additional bonds are authorized.



Text of H.J.R. 81: HOUSE AUTHOR: David Counts
SENATE SPONSOR: J. E. "Buster" Brown
                                 HOUSE JOINT RESOLUTION
 1-1     proposing a constitutional amendment providing for the issuance of
 1-2     additional general obligation bonds by the Texas Water Development
 1-3     Board.
 1-4           BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Article III, Texas Constitution, is amended by
 1-6     adding Section 49-d-9 to read as follows:
 1-7           Sec. 49-d-9. (a)  The Texas Water Development Board may issue
 1-8     additional general obligation bonds, at its determination, for one
 1-9     or more accounts of the Texas Water Development Fund II, in an
1-10     amount not to exceed $2 billion.  Of the additional general
1-11     obligation bonds authorized to be issued, $50 million of those
1-12     bonds shall be used for the water infrastructure fund as provided
1-13     by law.
1-14           (b)  Section 49-d-8 of this article applies to the bonds
1-15     authorized by this section.  The limitation in Section 49-d-8 of
1-16     this article that the Texas Water Development Board may not issue
1-17     bonds in excess of the aggregate principal amount of previously
1-18     authorized bonds does not apply to the bonds authorized by and
1-19     issued under this section.
1-20           (c)  A limitation on the percentage of state participation in
1-21     any single project imposed by this article does not apply to a
1-22     project funded with the proceeds of bonds issued under the
1-23     authority of Section 49-d-8 of this article or this section.
1-24           SECTION 2. This proposed constitutional amendment shall be
 2-1     submitted to the voters at an election to be held November 6, 2001.
 2-2     The ballot shall be printed to provide for voting for or against
 2-3     the proposition: "The constitutional amendment providing for the
 2-4     issuance of additional general obligation bonds by the Texas Water
 2-5     Development Board in an amount not to exceed $2 billion."

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