TITLE 31. NATURAL RESOURCES AND CONSERVATION

PART 10. TEXAS WATER DEVELOPMENT BOARD

CHAPTER 354. MEMORANDA OF UNDERSTANDING

31 TAC §354.16, §354.17

The Texas Water Development Board (TWDB) proposes new 31 TAC §354.16 and 31 TAC §354.17 to incorporate into rule two Memoranda of Understanding (MOUs) between the Texas Division of Emergency Management (TDEM) and the TWDB.

BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULE.

§354.16. Memorandum of Understanding Between the Texas Division of Emergency Management (TDEM) and the TWDB related to the Federal Public Assistance Grant Program.

Senate Bill 7 of the 86th Legislature, R.S., established the Hurricane Harvey Account as part of the Texas Infrastructure Resiliency Fund under Texas Water Code §16.454. Texas Water Code §16.454 requires the TWDB to provide funding to TDEM to provide financial assistance for projects related to Hurricane Harvey in accordance with the Federal Hazard Mitigation Grant Program and the Federal Public Assistance Grant Program.

The MOU implements the statutory requirements of Texas Water Code §16.454, related to the Federal Public Assistance Grant Program, and requires that TDEM administer the funds in accordance with all applicable federal programs and regulations.

The MOU also requires TDEM to provide regular reports that will enable the TWDB to meet the transparency requirements of Texas Water Code §16.459.

§354.17. Memorandum of Understanding Between the Texas Division of Emergency Management (TDEM) and the TWDB related to the Federal Hazard Mitigation Grant Program.

Senate Bill 7 of the 86th Legislature, R.S., established the Hurricane Harvey Account as part of the Texas Infrastructure Resiliency Fund under Texas Water Code §16.454. Texas Water Code §16.454 requires the TWDB to provide funding to TDEM to provide financial assistance for projects related to Hurricane Harvey in accordance with the Federal Hazard Mitigation Grant Program and the Federal Public Assistance Grant Program.

The MOU implements the statutory requirements of Texas Water Code §16.454, related to the Federal Hazard Mitigation Grant Program, and requires that TDEM administer the funds in accordance with all applicable federal programs and regulations.

The MOU also requires TDEM to provide regular reports that will enable the TWDB to meet the transparency requirements of Texas Water Code §16.459.

FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENTS

Ms. Rebecca Trevino, Chief Financial Officer, has determined that there will be positive fiscal implications for state or local governments as a result of the proposed rulemaking. For the first five years these rules are in effect, there is no expected additional cost to state or local governments resulting from their administration.

These rules are expected to result in reductions in costs to either state or local governments, as they will provide funds to local governments. There is no increase in costs because there are no direct costs associated with the proposed rules. These rules are expected to have a positive impact on state or local revenues as funds will be made available as a local match to federal programs. The rules will not require any increase in expenditures for state or local governments as a result of administering these rules. Additionally, there are foreseeable implications relating to state or local governments' increase in funding resulting from these rules.

Because these rules will not impose a cost on regulated persons, the requirement included in Texas Government Code §2001.0045 to repeal a rule does not apply. Furthermore, the requirement in §2001.0045 does not apply because these rules are necessary to implement legislation.

The board invites public comment regarding this fiscal note. Written comments on the fiscal note may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble.

PUBLIC BENEFITS AND COSTS

Ms. Rebecca Trevino also has determined that for each year of the first five years the proposed rulemaking is in effect, the public will benefit from the rulemaking as it will provide funding for local governments.

LOCAL EMPLOYMENT IMPACT STATEMENT

The board has determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect because they will impose no new requirements on local economies. The board also has determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of enforcing this rulemaking. The board also has determined that there is no anticipated economic cost to persons who are required to comply with the rulemaking as proposed. Therefore, no regulatory flexibility analysis is necessary.

DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION

The board reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code §2001.0225, and determined that the rulemaking is not subject to Texas Government Code, §2001.0225, because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to adopt by rule the MOUs as required by Texas Water Code §6.104.

Even if the proposed rules were major environmental rules, Texas Government Code, §2001.0225 still would not apply to this rulemaking because Texas Government Code, §2001.0225 only applies to a major environmental rule, the result of which is to: (1) exceed a standard set by federal law, unless the rule is specifically required by state law; (2) exceed an express requirement of state law, unless the rule is specifically required by federal law; (3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or (4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: (1) does not exceed any standard set by federal law; (2) does not exceed an express requirement of state law; (3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and (4) is not proposed solely under the general powers of the agency, but rather but rather is also proposed under authority of Texas Water Code §6.101 and §6.104. Therefore, these proposed rules do not fall under any of the applicability criteria in Texas Government Code, §2001.0225.

The board invites public comment regarding this draft regulatory impact analysis determination. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble.

TAKINGS IMPACT ASSESSMENT

The board evaluated these proposed rules and performed an analysis of whether they constitute a taking under Texas Government Code, Chapter 2007. The specific purpose of these rules is to adopt by rule the MOUs between the Texas Water Development Board and the Texas Division of Emergency Management.

The board's analysis indicates that Texas Government Code, Chapter 2007 does not apply to this proposed rulemaking because this is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code, §2007.003(b)(4).

Nevertheless, the board further evaluated these proposed rules and performed an assessment of whether they constitute a taking under Texas Government Code, Chapter 2007. Promulgation and enforcement of these proposed rules would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject proposed regulation does not affect a landowner's rights in private real property because this rulemaking does not burden nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. Therefore, the proposed rules do not constitute a taking under Texas Government Code, Chapter 2007.

GOVERNMENT GROWTH IMPACT STATEMENT

The board reviewed the proposed rulemaking in light of the government growth impact statement requirements of Texas Government Code §2001.0221 and has determined, for the first five years the proposed rules would be in effect, the proposed rules will not: (1) create or eliminate a government program; (2) require the creation of new employee positions or the elimination of existing employee positions; (3) require an increase or decrease in future legislative appropriations to the agency; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation; or (7) increase or decrease the number of individuals subject to the rule's applicability. However, the proposed rules will positively affect the state's economy. These rules are expected to have a positive impact on state or local revenues as funds will be made available as a local match to federal programs. The funds will enable local governments to access federal funds and make improvements in their jurisdictions in accordance with the federal programs.

SUBMISSION OF COMMENTS

Written comments on the proposed rulemaking may be submitted by mail to Office of General Counsel, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231, by email to rulescomments@twdb.texas.gov, or by fax to (512) 475-2053. COMMENTS MUST INCLUDE REFERENCE TO CHAPTER 364 IN THE SUBJECT LINE. Comments will be accepted until 5:00 p.m. on the 31st day following publication in the Texas Register.

STATUTORY AUTHORITY

This rulemaking is proposed under the authority of the Texas Water Code §6.104 and §16.454, which require the TWDB to adopt by rule any memorandum of understanding between the TWDB and any other state agency.

Cross reference to statute: Texas Water Code §6.104, §16.454.

§354.16.Memorandum of Understanding Between the Texas Division of Emergency Management (TDEM) and the TWDB related to the Federal Public Assistance Grant Program.

(a) This Memorandum of Understanding ("Agreement") is between the Texas Division of Emergency Management ("TDEM") and the Texas Water Development Board ("TWDB"), each an agency of the State of Texas.

(b) Whereas, the 86th Legislature, R.S. passed Senate Bill 7 relevant portions of which were effective immediately;

(c) Whereas, the governor signed Senate Bill 7 on June 13, 2019;

(d) Whereas, Senate Bill 7 establishes the Hurricane Harvey Account ("Account") as a part of the Texas Infrastructure Resiliency Fund ("Fund") under Texas Water Code §16.454;

(e) Whereas, pursuant to Texas Water Code §16.454, the Texas Water Development Board (TWDB) may only use the Account to provide money to the Texas Division of Emergency Management (TDEM) to provide financing for projects related to Hurricane Harvey;

(f) Whereas, the TDEM manages the Federal Hazard Mitigation Grant Program and the Federal Public Assistance Grant Program;

(g) Whereas, the TWDB is a State agency with a mission to provide leadership, information, education, and support for planning, financial assistance, and outreach for the conservation and responsible development of water for Texas;

(h) Whereas, the TDEM is charged with carrying out a comprehensive all-hazard emergency management program for the state and for assisting cities, counties, and state agencies in planning and implementing their emergency management programs;

(i) Now Therefore, in consideration of the benefits to the State of Texas, the parties hereby agree as follows:

(1) Services to be Performed:

(A) TDEM responsibilities:

(i) It shall be the sole responsibility of TDEM to administer funds received from the TWDB from the Account in accordance with Texas Water Code §16.454, and any federal program, including applicable federal regulations, as permitted by Texas Water Code §16.454(b), under which the funds will be spent.

(ii) In accordance with Texas Water Code §16.454(f), TDEM will periodically provide an Application to the Executive Administrator of the TWDB ("EA") for project funding requests that both TDEM and the EA find meet the requirements of Texas Water Code §§16.454(c), 16.454(f)(1) through (3), and 16.454(g). The TDEM Application will include supporting documentation that demonstrates how the project for each entity that will receive funding meets any applicable criteria in Texas Water Code §16.454.

(iii) TDEM will provide the TWDB regular quarterly reports that include all information necessary for the TWDB to meet the transparency requirements of Texas Water Code §16.459. The report must include, but not be limited to, the following for each project:

(I) the expected completion date;

(II) the current status of the project;

(III) proposed benefit of the project;

(IV) initial cost estimate and variances to the initial cost estimate, if the variances are over 5%;

(V) a list of the eligible political subdivisions receiving money from the Fund;

(VI) a list of each political subdivision served by each project; and

(VII) an estimate of matching funds for the project; and

(VIII) status of repayment, if there was a loan made for the project.

(iv) TDEM will provide any additional supporting information as may be requested by the TWDB.

(v) TDEM will maintain sufficient records and receipts as may be required by the Texas Comptroller of Public Accounts to ensure the funds are distributed in accordance with Texas Water Code §16.454 and to satisfy the State Auditor's Office review.

(vi) On or before August 1, 2031, TDEM will return any remaining funds to the TWDB.

(B) TWDB responsibilities:

(i) After receipt of each TDEM Application (and supporting documentation), TWDB will promptly transfer funds in an amount equal to the requested funding amount that meets the statutory criteria of Texas Water Code §§16.454(c), 16.454(f)(1) through (3), and 16.454(g).

(ii) The EA of the TWDB will have the right to request additional supporting information as necessary to comply with the requirements of Texas Water Code §16.459.

(2) Basis for Calculating Reimbursable Costs: Not applicable as services and resources under this Agreement are provided for disaster relief.

(3) Agreement Amount: The total amount of this Agreement may not exceed $0.00.

(4) Term: This Agreement is effective upon signature of both parties. This Agreement may be terminated at the request of either party. The Agreement will otherwise terminate at the earlier of either when the account is exhausted, or September 1, 2031. If the Account contains funding on September 1, 2031, the remaining balance shall be transferred to the TWDB Flood Plan Implementation Account.

(5) Certifications:

(A) Each party certifies that:

(i) The services specified above are necessary and authorized for activities that are properly within the statutory functions and programs of the parties; and

(ii) The services, materials, or equipment contracted for are not required by Section 21 of Article XVI of the Constitution of Texas to be supplied under contract given to the lowest responsible bidder.

(B) TWDB certifies that it has the authority to agree to the above services.

(C) TDEM certifies that it has the authority to agree to the above services.

§354.17.Memorandum of Understanding Between the Texas Division of Emergency Management (TDEM) and the TWDB related to the Federal Hazard Mitigation Grant Program.

(a) This Memorandum of Understanding ("Agreement") is between the Texas Division of Emergency Management ("TDEM") and the Texas Water Development Board ("TWDB"), each an agency of the State of Texas.

(b) Whereas, the 86th Legislature, R.S. passed Senate Bill 7 relevant portions of which were effective immediately;

(c) Whereas, the governor signed Senate Bill 7 on June 13, 2019;

(d) Whereas, Senate Bill 7 establishes the Hurricane Harvey Account ("Account") as a part of the Texas Infrastructure Resiliency Fund ("Fund") under Texas Water Code §16.454;

(e) Whereas, pursuant to Texas Water Code §16.454, the Texas Water Development Board ("TWDB") may only use the Account to provide money to the Texas Division of Emergency Management ("TDEM") to provide financing for projects related to Hurricane Harvey;

(f) Whereas, the TDEM manages the Federal Hazard Mitigation Grant Program and the Federal Public Assistance Grant Program;

(g) Whereas, the TDEM has previously reviewed hazard mitigation project funding requests;

(h) Whereas, the TWDB is a State agency with a mission to provide leadership, information, education, and support for planning, financial assistance, and outreach for the conservation and responsible development of water for Texas;

(i) Whereas, the TDEM is charged with carrying out a comprehensive all-hazard emergency management program for the state and for assisting cities, counties, and state agencies in planning and implementing their emergency management programs;

(j) Now Therefore, in consideration of the benefits to the State of Texas, the parties hereby agree as follows:

(1) Services to be Performed:

(A) TDEM responsibilities:

(i) It shall be the sole responsibility of TDEM to administer funds received from the TWDB from the Hurricane Harvey Account in accordance with Texas Water Code §16.454, and any federal program, including applicable federal regulations, as permitted by Texas Water Code §16.454(b), under which the funds will be spent.

(ii) In accordance with Texas Water Code §16.454(f), TDEM will periodically provide an Application to the Executive Administrator of the TWDB ("EA") for the project funding requests that both TDEM and the EA find meet the requirements of Texas Water Code §§16.454(c), 16.454(f)(1) through (3), and 16.454(g). The TDEM Application will include supporting documentation that demonstrates how the application for each entity that will receive funding meets any applicable prioritization and the criteria in Texas Water Code §16.454.

(iii) TDEM will accept and prioritize eligible flood project, other than public assistance grants, requests for funding from the Hurricane Harvey Account.

(iv) In prioritizing the projects for the Hazard Mitigation Program, TDEM used a prioritization system, which the TWDB has reviewed and is acceptable to the TWDB.

(v) TDEM will provide the TWDB regular quarterly reports that include all information necessary for the TWDB to meet the transparency requirements of Texas Water Code §16.459.

(I) The report must include the following for each project:

(-a-) the expected completion date;

(-b-) the current status of the project;

(-c-) proposed benefit of the project;

(-d-) initial cost estimate and variances to the initial cost estimate, if the variances are over 5%;

(-e-) a list of the eligible political subdivisions receiving money from the Fund;

(-f-) a list of each political subdivision served by each project;

(-g-) an estimate of matching funds for the project; and

(-h-) status of repayment, if there was a loan made for the project.

(II) if applicable, the prioritization system for prioritizing flood projects and the number of points awarded by TDEM.

(vi) TDEM will provide any additional supporting information as may be requested by the TWDB.

(vii) TDEM will maintain sufficient records and receipts as may be required by the Texas Comptroller of Public Accounts to ensure the funds are distributed in accordance with Texas Water Code §16.454 and to satisfy the State Auditor's Office review.

(viii) On or before August 1, 2031, TDEM will return any remaining funds to the TWDB.

(B) TWDB responsibilities:

(i) After receipt of each TDEM Application (and supporting documentation), TWDB will promptly transfer funds in an amount equal to the requested funding amount that meets the prioritization criteria and the statutory criteria of Texas Water Code §§16.454(c), 16.454(f)(1) through (3), and 16.454(g).

(ii) The EA of the TWDB will have the right to request additional supporting information as necessary to comply with the requirements of Texas Water Code §16.459.

(2) Basis for Calculating Reimbursable Costs: Not applicable as services and resources under this Agreement are provided for disaster relief.

(3) Agreement Amount: The total amount of this Agreement may not exceed $0.00.

(4) Term: This Agreement is effective upon signature of both parties. This Agreement may be terminated at the request of either party. The Agreement will otherwise terminate at the earlier of either when the account is exhausted, or September 1, 2031. If the Account contains funding on September 1, 2031, the remaining balance shall be transferred to the TWDB Flood Plan Implementation Account.

(5) Certifications:

(A) Each party certifies that:

(i) The services specified above are necessary and authorized for activities that are properly within the statutory functions and programs of the parties; and

(ii) The services, materials, or equipment contracted for are not required by Section 21 of Article XVI of the Constitution of Texas to be supplied under contract given to the lowest responsible bidder.

(B) TWDB certifies that it has the authority to agree to the above services.

(C) TDEM certifies that it has the authority to agree to the above services.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on October 7, 2019.

TRD-201903588

Todd Chenoweth

General Counsel

Texas Water Development Board

Earliest possible date of adoption: November 17, 2019

For further information, please call: (512) 463-7686