BELTON — Members of the Texas Water Development Board spent Thursday morning providing Central Texas elected officials with an inside look into how two new water development funds will work.

The funds, the State Water Implementation Fund for Texas and the State Water Implementation Recovery Fund for Texas, are the funding vehicles that were created with the passage of Proposition 6 last November.

Proposition 6 amended the Texas Constitution to allow $2 billion to be taken from the Rainy Day Fund to start a low-interest loan program for water development projects throughout the state.

State Sen. Troy Fraser, R-Horseshoe Bend, told the assembled county judges and commissioners that the new water funds were a labor of love for him.

He said when he first came to the Capitol, in 1997, he authored a plan to update Texas’ water infrastructure.

“It just stayed on the shelf because we never could find a revenue stream for it,” Fraser said. Fraser authored House Bill 4, the legislation setting up the State Water Implementation Fund.

The bill restructured the Texas Water Development Board to a three-member, full-time board and set out the oversight and management of the water implementation fund.

Fraser’s legislation, which was signed by Gov. Rick Perry in May 2013, also directed the local regions and the water development board to prioritize projects.

He also said the bill creates a 10 percent “carve out” for rural areas.

“I wanted to make sure that all the money didn’t go to Dallas, Houston or San Antonio,” Fraser said.

He added that, even though the bill dedicates funds for projects in rural areas, what exactly constitutes a rural area isn’t defined in the language of the bill.

“What is considered rural is something that we’ll have to sort out,” Fraser said. “I think those of us who live outside Austin, Dallas, Houston and San Antonio consider ourselves ‘rural.’”

Fraser commented that even fairly large cities such as Abilene, which has a population greater than both Round Rock and Georgetown, consider themselves rural.

He then turned the proceedings over to water development board staff members.

Darrell Nichols, director of regional water planning and development for the water development board, said the new water implementation fund will function as an infrastructure bank and that will offer counties and municipalities much more favorable terms than they had been able to get in the past.

Communities will be able to borrow from the fund at “50 percent of the interest rate that is available to the Texas Water Development Board,” he said.

The loan terms have been extended to 30 years, which is something that communities throughout Texas had been asking for.

Nichols told the crowd that even though the fund will be able to provide capital for water projects, the projects have to be an approved part of the state water plan.

Doug Shaw, the water development board’s agriculture and rural ombudsman, said that since the water implementation fund can only pay for projects that are in the water plan, it’s imperative that “rural Texas get involved in the process.”

Over the next year, the development board will meet with stakeholder groups, such as councils of government and groundwater conservation districts, to work out the modeled available groundwater for the various aquifers throughout Texas, Shaw said.

“This round of planning will be the first time that modeled available groundwater is set as a cap,” Shaw said. “One of the unintended consequences could be that there are reductions in available water.”

He also reminded the elected officials that any new rules regarding groundwater use will not be adopted until March 2015.

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