BILL ANALYSIS C.S.H.B. 3096 By: Van de Putte / Corte 5-3-95 Committee Report (Substituted) BACKGROUND The Edwards Underground Water District (EUWD) was created by special act of the Legislature in 1959. The district originally served a five-county area encompassing Uvalde, Medina, Bexar, Comal and Hays counties. In 1989, Uvalde and Medina counties separately withdrew from the Edwards and formed their own Chapter 52 districts. The EUWD is not a Chapter 52 district. Senate Bill 1477 in 1993 created an Edwards Aquifer Authority with overall responsibility for water management in the region. The bill also abolished the Edwards Underground Water District while validating the Uvalde County Underground Water Conservation District and continuing the Medina County Underground Water Conservation District. Senate Bill 1477 also provided that, while the Authority retained jurisdiction over regional water management, its specific powers and responsibilities could be delegated to the local underground water conservation districts under conditions set forth in the bill. In late 1993, the United States Department of Justice refused pre-clearance for Senate Bill 1477 on the grounds that it violated the Voting Rights Act. Implementation of Senate Bill 1477 has been delayed since that time. PURPOSE This bill will reinstate the Edwards Underground Water District and expand the ability of the district to perform the water management functions necessary for an effective regional water management strategy to work. RULEMAKING AUTHORITY Section 5 of the bill clarifies the rulemaking authority of the Edwards Underground Water District. SECTION BY SECTION ANALYSIS SECTION 1. This section permits the Edwards Aquifer Authority to contract with the Edwards Underground Water District for payment of administrative expenses of the Authority from tax revenues of the EUWD, as is presently allowed for Chapter 52 water districts. SECTION 2. (a) This repeals Section 1.41 of Chapter 626, Acts of the 73rd Legislature, which abolished the Edwards Underground Water District. The effect of this repealer is to reinstate the District. (b) Eliminates the repeal of Chapter 99, Acts of the 56th Legislature, Regular Session, (Article 8280-219 VTCS) by Section 1.41 of Chapter 626, Acts of the 73rd Legislature and provides that the Edwards Underground Water District exists as if Senate Bill 1477 had never passed. SECTION 3. Amends Section 1.42 of Chapter 626, Acts of the 73rd Legislature by incorporating "or underground water district" into the language concerning underground water conservation districts, providing the Edwards Aquifer Authority with the authority to delegate its powers and duties to the Edwards Underground Water District, as is currently authorized for Chapter 52 water districts pursuant to Senate Bill 1477 of the 73rd Legislature. SECTION 4. Amends Section 3(a) of Chapter 99, Acts of the 73rd Legislature (Article 8280-219, VTCS) by adding a new Subsection (17) and making conforming changes where necessary referencing the Texas Natural Resource Conservation Commission in place of Texas Water Commission. (17) Directs the Edwards Underground Water District to require permits for drilling, equipping or completing wells, and outlines the process by which a permit is granted, including requirements and time limits for action on the permits. SECTION 5. Section 3(b) through 3(f) of Chapter 99, Acts of the 73rd Legislature (Article 8280-219, VTCS) is amended by amending (b) to allow the Board of Directors of the Edwards Underground Water District to adopt reasonable rules to carry out its powers and responsibilities, and so that its rulemaking authority is not limited to its drought management and well registration powers. (c) Requires that the district take public input at hearings and through public process in the development of rules adopted under Subsection (b). (d) Provides an appeal for the rules adopted under this Section and makes a reference change from TWC to TNRCC. (e) Provides venue in Bexar County for cases filed challenging rules adopted under this section. (f) Makes reference changes from Texas Water Commission to Texas Natural Resource Conservation Commission and clarifies legal terms relating to suits filed under this section. (g) Directs the Edwards Underground Water District to assume responsibility for well registration upon promulgation of rules adopted under this Section. SECTION 6. Chapter 99, of Section 1.41 of Chapter 626, Acts of the 73rd Legislature (Article 8280-219, VTCS) is amended by adding Section 3D and Section 3E. Sec. 3D. LOANS AND GRANTS. This gives the Edwards Underground Water District, under authority granted by Section 52-a, Article III, Texas Constitution, authority to make loans or grants for water conservation, reuse or development equipment, technology, or projects. It is intended to support economic development, particularly in the agricultural sector, and education about water conservation and reuse. Sec. 3E. ADMINISTRATIVE PENALTY. (a) This section gives the Edwards Underground Water District authority to investigate violations of the statute or of rules and regulations adopted thereunder and to assess administrative penalties. Such penalties are limited to $10,000 per day per violation, with each day considered a separate violation. (b) Provides guidelines for the determination of penalty, including the seriousness and impact of the violation, the economic and environmental damage caused by the violation, criteria involving the violator, and any other matters that justice may require. (c) Directs the general manager to perform an initial investigation and issue a preliminary report on whether a violation has occurred and including a recommendation as to a penalty. (d) Requires the general manager to give written notice of the violation to the alleged violator within 14 days of the issuance of the report. (e) Gives the alleged violator 20 days to respond. (f) Provides that if the alleged violator does not respond, the district shall assess a penalty or order a hearing on the report. (g) Provides that, if a hearing is set on an alleged violation, it will be conducted by the State Office of Administrative Hearings and subject to the provisions of Chapter 2001 of the Government Code. The hearing officer shall submit a proposal for decision to the board of directors of the District. The board of directors shall act on the proposal for decision. (h) Requires the district to give notice of its decision and any penalty assessed. (i) Requires that the alleged violator shall, within 30 days of the issuance of the order, either pay the penalty, seek judicial review, or seek judicial review without paying the penalty. (j) Provides that, if the alleged violator seeks judicial review without paying the penalty, the violator must either pay the penalty into escrow, file a supersedeas bond, or file an affidavit of financial inability to pay. (k) Provides a process by which the general manager may contest an affidavit of inability to pay. (l) Permits the general manager to refer the case of any violator who has not paid his or her penalty to the attorney general for collection. (m) Declares that judicial review of a board order is instituted by filing a petition as provided by Subchapter G, Chapter 2001, Government Code, and is under the substantial evidence rule. (n) Permits a court to uphold the violation and penalty, uphold the violation and reduce the penalty, or not sustain the violation. (o) Provides rules under which the court will collect a penalty assessed under this section. (p) Provides that all proceedings under this section are governed by Chapter 2001, Government Code. (q) Provides that penalties collected under this section must be deposited with the District. (r) Provides that, unless prohibited by other law, the District may compromise, modify, or remit and administrative penalty under this section. (s) Requires that administrative penalties, when paid in full, provide full and complete satisfaction of the obligations of the violator. (t) Provides that issuance of permits does not limit administrative liability. SECTION 7. Amends Chapter 99, Acts of the 73rd Legislature (Article 8280-219, VTCS) by adding Section 2A. Sec. 2A. SUNSET. Subjects this article to Chapter 325 of the Government Code and provides that the Edwards Underground Water District shall be reviewed in 1997. SECTION 8. Subsection (a) provides that the effective date of this legislation is September 1, 1995. Subsection (b) provides that the sunset provision takes effect on the later of September 1, 1995, or when Senate Bill 1477 of the 73rd Legislature takes effect. If Senate Bill 1477 takes effect after September 1, 1997, the sunset provision shall take effect on the first sunset review period that follows its effective date. SECTION 9. EMERGENCY CLAUSE. COMPARISON OF ORIGINAL TO SUBSTITUTE The original bill provided the Edwards Underground Water District with nine new powers. This substitute bill provides the District with four new powers. Those powers are to make loans and grants, to require well permits, additional rulemaking authority, and the authority to assess administrative penalties. The substitute bill also provides clarifying language in Senate Bill 1477 of the 73rd Legislature, to give the Edwards Underground Water District equivalent stature to Chapter 52 water conservation districts thereunder. Lastly, the substitute bill provides a sunset provision for the Edwards Underground Water District enabling statute. SUMMARY OF COMMITTEE ACTION H.B.3096 was considered by the committee in a formal meeting on May 2, 1995. No testimony was received. The committee considered a complete substitute for the bill. The substitute was withdrawn. The bill was left pending. H.B.3096 was considered by the committee in a formal meeting on May 3, 1995. No testimony was received. The committee considered a complete substitute for the bill. The substitute was adopted by a record vote of 5 ayes, 3 nays, 0 pnv, 1 absent. The bill was reported favorably as substituted, with the recommendation that it do pass and be printed, by a record vote of 6 ayes, 1 nays, 1 pnv, 1 absent.