Texas House Bill HB 365

Texas 2025 - 89th Regular

• Filed: 11/12/24
• Out of House Committee: 3/25/25
• Voted on by House: 4/10/25

Caption

Relating to the authority of the Texas Water Development Board to provide financial assistance from the economically distressed areas account that is not required to be repaid.

Summary

HB 365 would amend the Water Code to increase the cap on the Texas Water Development Board’s use of the economically distressed areas account for financial assistance that does not have to be repaid. Under current law, the board may provide this nonrepayable assistance up to 70 percent of the total principal amount of certain state-issued bonds; the bill raises that ceiling to 90 percent. The change applies to assistance provided to political subdivisions under the economically distressed areas program. The bill is narrowly focused on financing for water and wastewater infrastructure in economically distressed areas. By expanding the amount of nonreimbursable assistance the board can provide, it would give the Texas Water Development Board more flexibility to support local governments that lack the resources to fund eligible projects on their own. The act would take effect September 1, 2025.

Impact

HB 365 would directly amend Section 17.933(c) of the Water Code by changing the statutory limit on nonrepayable financial assistance from 70 percent to 90 percent of the principal amount of issued and unissued bonds authorized under Article III of the Texas Constitution, plus outstanding interest. The practical effect is to expand the Texas Water Development Board’s authority to allocate more grant-like funding from the economically distressed areas account to political subdivisions, potentially reducing local repayment obligations for water and wastewater projects in qualifying communities.

Sentiment

The bill appears to have generally favorable legislative support, as reflected by strong House floor votes of 101-44 on second reading and 101-46 on third reading. The available record does not include committee testimony or detailed debate, but the vote margins suggest the measure advanced with clear support while still drawing a meaningful minority of opposition. The bill’s movement from the House to the Senate indicates it was treated as a substantive but not highly controversial infrastructure financing measure.

Contention

The main point of contention is likely the policy choice to increase the share of state bond-backed assistance that need not be repaid. Supporters would view the higher cap as a way to better assist economically distressed communities with essential water infrastructure, while opponents may be concerned about increasing the state’s exposure, reducing repayment expectations, or expanding the use of limited bond capacity for nonreimbursable aid. Because no committee transcripts are available, the specific arguments of individual members or stakeholder groups are not documented in the provided record.