HB 4657

relating to establishing the Local Government Water Redevelopment
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 15, Water Code, is amended by adding
Subchapter C-2 to read as follows:
SUBCHAPTER C-2.  LOCAL GOVERNMENT WATER REDEVELOPMENT FUND
Sec. 15.161.  DEFINITIONS.  In this subchapter:
(1)  "Applicant" means a political subdivision that
imposes a sales tax or a use tax under Subtitle C, Title 3, Tax Code,
and applies to the Board for a disbursement of money from fund.
(2)  "Fund" means the Local Government Water
Sec. 15.162.  FUND.  (a)  The fund is a special fund in the
state treasury administered by the board.  The fund consists of:
(1)  money appropriated for transfer or deposit to the
(2)  depository interest allocable to the fund;
(3)  money from gifts, grants, or donations to the
(4)  any other fees or sources of revenue that the
legislature may dedicate for deposit to the fund.
(b)  The fund is exempt from the application of Section
(c)  Money in the fund may be used only as provided by this
subchapter.  The fund and any accounts established in the fund shall
be kept and maintained by or at the direction of the board.
(d)  The board may use revenues from the fund to administer
Sec. 15.163.  USE OF FUND.  (a)  The board shall disburse
funds for the repair and redevelopment of existing water
infrastructure located within the boundaries of an applicant.
(b)  The board may approve disbursement of funds for the
repair and redevelopment of existing water structure to multiple
applicants for the same project.
(c)  The board shall develop a procedure for applicants to
apply for funding and for the administration of the fund.
(d)  The board may not disburse money to an applicant until
an application made to the board for a disbursement of funds from
the fund has been approved by the board.
(e)  The board shall adopt rules necessary to administer the
Sec. 15.164.  APPLICATIONS FOR DISBURSEMENT.  (a)  The
application period for funding opens after the comptroller's
disposition of sales tax proceeds under Section 151.801, Tax Code.
(b)  In each fiscal year, an applicant is eligible to receive
an amount equal to up to the amount most recently deposited to the
fund under Section 151.801(g) multiplied by the quotient of:
(1)  the applicant's share of the taxes collected by the
comptroller under Subtitle C, Title 3, Tax Code, in the
twelve-month period preceding the comptroller's most recent
deposit to the fund under Section 151.801(g); and
(2)  the total amount of taxes collected the by
comptroller under Subtitle C, Title 3, Tax Code, in the
twelve-month period preceding the comptroller's most recent
deposit to the fund under Section 151.801(g).
(c)  The board shall publish the amounts that each applicant
is eligible to receive from the fund under Subsection (b).
(d)  The comptroller shall assist the board in publishing the
amounts required under Subsection (c).
SECTION 2.  Section 151.801, Tax Code, is amended by
amending Subsection (a) and adding Subsection (g) to read as
(a)  Except for the amounts allocated under Subsections (b),
(c), (c-2), (c-3), [and] (f), and (g), all proceeds from the
collection of the taxes imposed by this chapter shall be deposited
to the credit of the general revenue fund.
(g)  After deposits under subsections (b), (c), (c-2),
(c-3), and (f), but before a deposit of taxes collected under this
chapter to the general revenue fund under Subsection (a), four
percent of all proceeds from the collection of the taxes imposed by
this chapter shall be deposited to the credit of the Local
Government Water Redevelopment Fund under Subchapter C-2, Chapter
SECTION 3.  Not later than January 1, 2026, the Texas Water
Development Board shall adopt rules as required by this Act.
SECTION 4.  This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, to create the Local Government Water
Redevelopment Fund to assist in financing the repair and
redevelopment of water infrastructure projects in this state is
approved by voters.  If that amendment is not approved by voters,