Relating to the financing of water supply projects included in the state water plan; authorizing the issuance of obligations.

Contracts

• Duration Matching: Legal departments must amend Master Service Agreements (MSAs) and Water Supply Contracts. The law mandates that the term of the contract providing revenue security must equal or exceed the maturity of the bond. If you seek 50-year financing, you require 50-year "take-or-pay" customer contracts.
• Security Pledges: Contracts must explicitly pledge revenues to the payment of Chapter 1373 obligations. Standard "general revenue" pledges may be insufficient; specific assignment clauses are required.

Hiring/Training

• Engineering Certification: Engineering firms must establish a standardized methodology for calculating the "weighted average useful life" of complex assets. This calculation is statutory and dictates the maximum loan term. Errors here create direct liability.
• Financial Staffing: Issuers must train finance staff to segregate these project revenue streams entirely from ad valorem tax accounts to avoid commingling, which could invalidate the bond issuance.

Reporting & Record-Keeping

• Transcript of Proceedings: You must compile a comprehensive evidentiary record, including the "Obligation Authorization" and all underlying revenue contracts, for submission to the Attorney General.
• Engineer’s Certificate: A formal certification of the project's useful life must be filed with the governing body prior to authorization. This document becomes part of the incontestable record.

Fees & Costs

• Professional Fees: Budget for increased legal and engineering costs. The "incontestability" provision requires higher due diligence standards from bond counsel and certifying engineers, which will be reflected in their fee structures.
• Refinancing Costs: Entities planning to refund existing debt into this new structure must account for call premiums and transaction costs in their Q4 2025 budgets.