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Relating to the purposes for which the assets of certain revolving funds administered by the Texas Water Development Board may be used.
No significant fiscal implication to the State is anticipated.
The bill would allow the Water Development Board to approve by resolution the use of assets of the Clean Water State Revolving Fund (CWSRF), the Drinking Water Revolving Fund (DWSRF), and any additional state revolving fund created in the future, as a source of revenue or security, or both, for the payment of the principal of and interest on state revolving fund bonds.
The bill would give the Board the authority under state law to approve the cross-collateralization of the state revolving funds. The agency reports that cross-collateralization would provide enhanced security to bondholders by providing additional sources of available revenues from which to draw for debt service, thereby improving the bond ratings and reducing the cost of borrowing from the DWSRF for borrowers. The bill's passage is not expected to have a significant impact on the agency's workload.
HB 1224, if passed, would modify the Water Code (Section 1, Subchapter J, Chapter 15) by adding a new subsection regarding the cross-collateralization of funds. The bill would allow the Texas Water Development Board to approve, by resolution, the use of assets of the revolving fund, the safe drinking water revolving fund, or an additional state revolving fund, as a source of revenue, security, or both for the purpose of paying state revolving fund bonds.
HB 1224 is a useful bill in that it would give the Texas Water Development Board additional flexibility by allowing for cross-collateralization of the state revolving funds. This would provide for additional revenue sources from which to draw debt service. This in turn would improve bond ratings and reduce the cost of borrowing from the Drinking Water Revolving Fund. Still, these changes have no discernible connection to our liberty principles, therefore we are neutral on HB 1224.
The second chamber sponsor of this legislation is Senator Perry.