A bit more on HB 4: How will the state fund its water plan?

That seem to me to be all this bill is about. The state long authorized the establishment of wate development projects, they have yet to figure out how these will be funded. The amount this will cost will be steep, so the controversy is not surprising. Nevertheless the bill passed by a 144-3 vote, so the issue seems mostly worked out, with a couple exceptions described in theis Quorum Report piece:

The Texas House today took a first step toward enacting the funding structures to finance the state’s 50-year water plan. On a 144-3 vote, they gave preliminary approval to HB 4, which sets up the revolving investment bank that would support the state’s $27 billion share of fulfilling the plan.

The actual funding would come via a transfer from the Rainy Day Fund. That will be taken up later in HB 11.

The first long term water plan dates from 1997 but the Legislature has taken its time about establishing a funding source for the projects called for in the plan.

According to the House Research Organization, demand for water in the state will increase by 8.3 million acre-feet by 2060. The most recent iteration of the state’s water plan would develop 9 million acre-feet through 562 water projects and calls for spending a total of $53 billion.

HB 4 sets up the State Water Implementation Fund (SWIFT), which would be established outside of the state treasury and would be overseen by the Texas Treasury Safekeeping Trust Company.

The Texas Water Development Board would come up with a system to prioritize water projects based on how much local money is being put up, how quickly a project is needed and how ready the project is to begin among other criteria.

The bill includes some safeguards to make sure that the funding isn’t too concentrated geographically. It would require at least 10 percent of the funding for water projects to go to rural areas of the state and would require another 20 percent of the funding go toward water conservation and reuse projects.

The first key vote came early in the debate when state Rep. Phil King (R-Weatherford) submitted an amendment that would make the conservation and reuse requirement optional.

The 20 percent standard actually understates what the 2012 water plan calls for. The long term planning document envisions about 34 percent of the 9 million acre-feet that would be developed by 2060 would come from conservation and reuse.

The standard, though, came under fire from conservatives. Arlene Wohlgemuth of the Texas Public Policy Foundation called the 20 percent standard “problematic” in a statement this morning. She added that neither conservation nor reuse “is guaranteed to expand the available supply of water in Texas.”

State Rep. Doug Miller (R-New Braunfels) spoke against the King amendment. Drawing on his tenure serving on his regional water planning group, he said his experience was that conservation projects represent “the cheapest form of water” and should be pursued in the water plan.

King’s amendment died on a 104-41 vote.

That was soon followed by state Rep. Van Taylor (R-Plano) who sought to insert language cutting off the Rainy Day Fund as a source of funding for the water plan. Taylor said he was motivated by the desire to keep the balance in the economic stabilization fund healthy enough to keep the state’s bond ratings as high as possible.

If successful, it would have thrown a serious roadblock into the funding structure behind HB 4, which relies on a $2 billion transfer from the RDF.

Echoing what Gov. Rick Perry laid out in his budget, Taylor said the RDF needs to keep a balance of about 7.5 percent of GR funds. That’s about $7.2 billion, he said. Taylor’s position was also backed by Wohlgemuth who said this morning that funding for the water plan shouldn’t come from the RDF and should be within the state’s spending cap.

The Taylor amendment died on 129-15 vote.

When Taylor then followed with another amendment that he said would preserve the purchasing power of the fund, he was challenged by state Rep. Lyle Larson (R-San Antonio) who asked if Taylor intended to vote yes on HB 4.

Taylor said no, leading Larson to accuse Taylor of being “disingenuous” in offering his amendments for “political purposes.” Taylor later said he would have been in favor of the bill if his amendment removing the RDF as a funding vehicle was successful.

His second amendment also failed on a 127-18 vote.

Taylor later tried to take the bill down on a procedural point, saying that the bill wasn’t filed according to the 5-day posting requirement. His point of order was denied, allowing debate to continue.