SB2204

Regular Session

Relating to the applicability of uniform grant and contract management standards to certain Texas Water Development Board programs.

LowStandard timeline

Low Cost

Effective:2025-09-01

Enforcing Agencies

Texas Water Development Board (TWDB)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: September 1, 2025
Compliance Deadline: September 1, 2025. (Applies strictly to contracts entered into on or after this date. Contracts executed prior to this date remain subject to Chapter 783).
Agency Rulemaking: While no specific rulemaking deadline is mandated, TWDB must update program guidance documents before September 2025 to clarify administrative requirements in the absence of Chapter 783. Expect interim guidance between May and August 2025.

Immediate Action Plan

Audit Your Pipeline: Identify all pending TWDB applications falling under Subchapters B, C, F, H, I, K, P, or R.
Update Legal Templates: Create a "Post-Sept 2025" contract addendum for water projects that removes UGCMS citations.
Monitor Texas Register: Watch for TWDB proposed rule changes in Summer 2025 that will define the new administrative standards for these exempted programs.

Operational Changes Required

Contracts

Template Revision: For prime contracts and subcontracts funded under the affected subchapters (specifically the new Subchapter R and modified Subchapter C), you must strike references to "Texas Government Code Chapter 783" or "UGCMS" in the Governing Law or Compliance sections.
Negotiation Strategy: If you are negotiating a funding agreement scheduled for execution in late August 2025, delay execution until September 1, 2025, to benefit from the exemption, provided funding availability is not jeopardized.

Hiring/Training

Grant Administration: Retrain grant administrators and compliance officers to stop applying the "Yellow Book" (UGCMS) standards automatically to TWDB water infrastructure projects. They must now look to the specific program rules for audit and reporting thresholds.

Reporting & Record-Keeping

Audit Thresholds: Do not assume the standard state single audit threshold applies. You must verify the specific audit requirements defined in the individual TWDB financial assistance agreement.
Documentation: Shift from standardized state compliance forms to TWDB-specific program forms.

Fees & Costs

No Direct Fee Changes: The bill does not introduce new fees.
Administrative Savings: Potential reduction in administrative costs due to the removal of uniform state reporting burdens, though this depends on the complexity of the replacement contract terms.

Strategic Ambiguities & Considerations

The Regulatory Vacuum: The law states that the Uniform Standards *do not* apply, but it does not explicitly state what replaces them. There is a risk that TWDB may adopt internal rules that mirror Chapter 783, effectively negating the deregulation.
Indemnification & Insurance: Without the Chapter 783 baseline, TWDB may introduce custom indemnification or insurance clauses in the contracts. Legal counsel must review new agreements closely, as standard "state flow-down" assumptions no longer apply.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsPurchasing Purchasing--state Water Water--development Water--general Water Development Board, Texas

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 2204
89R4095 ANG-F	By: Birdwell
	Water, Agriculture and Rural Affairs
	4/2/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Texas Grant Management Standards (TGMS) are guidelines established under Chapter 783 of the Texas Government Code to provide uniform requirements for managing state-administered grant programs. They replaced the earlier Universal Grant Management Standards (UGMS) on January 1, 2022, and align with federal regulations. The TGMS are designed to ensure consistency, accountability, and transparency across state agencies in the administration of grant funds. These standards set requirements for processes such as application, reporting, financial oversight, auditing, and compliance with state and federal laws. However, some state agencies, such as the Texas Water Development Board (TWDB), operate under statutory frameworks that require more specialized standards.

S.B. 2204 exempts grants under the Water Assistance Fund, Water Loan Assistance Fund, and Rural Water Assistance Fund from TGMS. TWDB's standards exceed those outlined in TGMS and are tailored to the agency's statutory authority and the unique requirements of its financial assistance programs.

The bill codifies the exemption to ensure these programs operate under TWDB's more comprehensive, program-specific grant standards.

As proposed, S.B. 2204 amends current law relating to the applicability of uniform grant and contract management standards to certain Texas Water Development Board programs.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 15.008, Water Code, as follows:

Sec. 15.008. GRANT STANDARDS. Provides that the law regarding uniform grant and contract management, Chapter 783 (Uniform Grant and Contract Management), Government Code, does not apply to a contract under certain subchapters, including Subchapter B (Water Assistance Fund), C (Water Loan Assistance Program), or R (Rural Water Assistance Fund). Deletes existing text providing that the law regarding uniform grant and contract management, Chapter 783, Government Code, does not apply to a contract under certain subchapters or to a contract relating to an economically distressed area or nonborder colonia under Subchapter C.

SECTION 2. Makes application of this Act prospective.

SECTION 3. Effective date: September 1, 2025.

Senate Authors

Sen. Brian BirdwellRepublican · Primary Author

House Sponsor

Rep. Caroline FairlyRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 2204

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the applicability of uniform grant and contract
	management standards to certain Texas Water Development Board
	programs.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 15.008, Water Code, is amended to read as
	follows:
	Sec. 15.008. GRANT STANDARDS. The law regarding uniform
	grant and contract management, Chapter 783, Government Code, does
	not apply to a contract under Subchapter B, C, F, H, I, K, [or] P, or
	R [~~to a contract relating to an economically distressed area or~~
	~~nonborder colonia under Subchapter C~~].
	SECTION 2. The changes in law made by this Act apply only to
	a contract entered into on or after the effective date of this Act.
	A contract entered into before the effective date of this Act is
	governed by the law in effect immediately before the effective date
	of this Act, and that law is continued in effect for that purpose.
	SECTION 3. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 3, 2025

TO:	Honorable Charles Perry, Chair, Senate Committee on Water, Agriculture and Rural Affairs

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB2204 by Birdwell (Relating to the applicability of uniform grant and contract management standards to certain Texas Water Development Board programs.), As Introduced

No significant fiscal implication to the State is anticipated.

It is assumed that any costs associated with the bill could be absorbed using existing resources.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

580 Water Development Board

LBB Staff:

JMc, FV, AJL

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Frequently Asked Questions

Common questions about SB2204

What does Texas SB2204 do?

SB 2204 deregulates specific Texas Water Development Board (TWDB) financial assistance programs by exempting them from the Uniform Grant and Contract Management Standards (UGCMS/Chapter 783, Government Code). This change removes the default state-wide compliance overlay for projects under Water Code Subchapters B, C, F, H, I, K, P, and the newly added Subchapter R, forcing reliance on strict contract terms rather than statutory defaults. Implementation Timeline Effective Date: September 1, 2025 Compliance Deadline: September 1, 2025.

Who authored SB2204?

SB2204 was authored by Texas Senator Brian Birdwell during the Regular Session.

When was SB2204 signed into law?

SB2204 was signed into law by Governor Greg Abbott on May 19, 2025.

Which agencies enforce SB2204?

SB2204 is enforced by Texas Water Development Board (TWDB).

How urgent is compliance with SB2204?

The compliance urgency for SB2204 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB2204?

The cost impact of SB2204 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB2204 address?

SB2204 addresses topics including purchasing, purchasing--state, water, water--development and water--general.

Legislative data provided by LegiScanLast updated: November 25, 2025

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