SRC-SLL C.S.S.B. 1 75(R)    BILL ANALYSIS


Senate Research CenterC.S.S.B. 1
By: Brown
Natural Resources
3-25-97
Committee Report (Substituted)


DIGEST 

Currently, water, more than any other natural resource, challenges Texas'
future. Scarcity and competition for water, heightened environmental
concerns, and the costliness of new water supply development make sound
water management increasingly difficult to achieve; however, with Texas'
population projected to double in the next 50 years and the water needs of
its cities and industries increasing correspondingly, additional water
development becomes essential. 

This bill addresses Texas water policy in six general areas:  drought
response management; water management, marketing, and transfers; surface
water and groundwater supplies; financial assistance to local governments;
small communities assistance, and water data collection and dissemination. 

Article 1 - Water Planning: Drought, Conservation, Development, and
Management 

Requires the Texas Water Development Board (TWDB) to adopt a comprehensive
state water plan to provide for the orderly development, management, and
conservation of water resources and preparation for and response to
drought conditions. 

Provides for the development of regional water plans, a drought response
plan, and projections for water availability during times of drought. 

Provides that all surface water right holders having an annual
appropriation of 1,000 acre-feet/year or more, or who have been found in
violation of rules prohibiting the waste of water, must implement a water
conservation plan.   

Sets forth procedures for funding the cost of developing or revising
regional water plans. 

Article 2 - Water Management, Marketing, and Transfers

Requires a TNRCC permit to convey developed groundwater in a state
watercourse or stream, and requires water discharged in such a manner to
meet quality standards while causing no adverse environmental impacts.   

Allows TNRCC to issue a consolidated permit for water quality and bed and
banks conveyance, and includes provisions for return of surplus water as
conditions for granting a water right.  Specifies that once surface water
has been diverted under a water right and returned to a water course or
stream, it is considered surplus water and subject to other appropriation. 

Confirms the continued authority of TNRCC to issue multipurpose surface
water rights. 

Lessens liability concerns of water sellers regarding intended temporary
water sales. 

Removes the limit (50 percent of a water right) on deposits in the State
Water Bank. 

Maintains notification and hearing requirements in the cancellation of a
water right. 

Outlines the criteria to be used in determining whether an application for
an interbasin transfer should be granted and specifies the administrative
aspects of a surface water rights application for an interbasin transfer.
 
Directs TNRCC to develop a regulatory process to evaluate transfers and
consider ways of mitigating significant adverse impacts of transfers. 

Article 3 - Emergency Authorizations; Enforcement

Authorizes the Texas Natural Resource Conservation Commission (TNRCC) to
assess certain penalties for violations of surface water rights, dam
safety, and levee construction provisions.  

Allows TNRCC to issue emergency permits or temporarily suspend or amend
permit conditions without notice or hearing to address emergency drought
conditions for not more than 120 days.   

Consolidates all TNRCC emergency order and permitting provisions for
water, and allows TNRCC to authorize emergency rate increases for a
utility in emergency drought conditions. 

Allows TNRCC to mandate without notice or hearing,  for not more than 120
days, and only in emergency drought conditions, the transfer of surface
water from a permittee holding a permit for other than domestic or
municipal use to a city or utility for domestic or municipal use.   

Article 4 - Surface Water and Groundwater Supplies

Allows TWDB to make loans for improving water efficiency use in irrigation
systems and promoting dryland farming. 

Allows for locations in Texas where aquifer storage and recovery projects
proved feasible to petition and acquire permanent permits from TNRCC prior
to June 1, 1999. 

Streamlines the Priority Groundwater Management Areas process by removing
statutory requirements that delay or discourage the creation of districts. 

Requires completion of TWDB and TNRCC Priority Groundwater Management Area
studies by a certain date and mandates TNRCC to report biannually to the
legislature on their findings.  

Establishes that groundwater conservation districts are the state's
preferred governmental entity for the management of groundwater resources
in Texas; strengthens the districts' authority; and aids districts through
TWDB loans and technical assistance. 

Provides accountability for the groundwater management system by setting
statutory criteria and timelines for management plan development;
requiring TNRCC approval of the plans; authorizing TNRCC to dissolve
inactive districts; and requiring legislative audit review of operational
districts.  
Article 5 - Financial Assistance to Local Governments

Pursuant to the passage of a constitutional amendment, provides for the
consolidation of existing voter-approved bond authorizations, including
water quality, water supply, flood control, and state participation, to
fully maximize funds available to local governments in developing water
projects.  
Creates the Texas Water Development Fund II in the state treasury and
stipulates that all water financial assistance bond proceeds be deposited
into this fund.   

Authorizes TWDB to enter into bond enhancement agreements with commercial
bonds in order to mitigate the risk of failure to recover the debt service
cost of bond funds until the funds can be loaned. 

Article 6 - Small Communities Assistance

Authorizes TWDB to administer the Safe Drinking Water Revolving Fund and
provide low-interest loans to small communities. 

Provides TNRCC rate-setting flexibility for small public water systems.
 
Allows TNRCC to facilitate the merging of non-viable systems; to order
other retail utilities; and to avoid future problems through a stronger
impetus toward regionalization and increased financial and planning
requirements. 
 
Article 7 - Water Data Collection and Dissemination

Improves coordination and reduces duplication between agencies using the
Texas Natural Resources Information System (TNRIS) and merges the TNRIS
Task Force and the GIS Planning Council into a single entity, the Texas
Geographical Information Council. 

PURPOSE

As proposed, C.S.S.B. 1 sets forth provisions and provides penalties for
misuse of the development and management of the water resources of the
state.   

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Texas Natural Resource Conservation
Commission in SECTIONS 1.03, 2.07, 3.02, and 4.25 (Sections 11.1271(c),
11.1272, 11.085(f), 11.0843(b), and 36.0161(b)(2), Water Code) and to the
Texas Water Development Board in SECTIONS 1.01, 1.02, 1.06, 1.07, 2.14,
4.35, 5.03, 5.10, and 6.16 (Sections 16.051(c) and (d), 16.053(f),
15.406(f), 15.4061(f), 15.7031(b), 36.372(b) and (c), 17.960(b), 17.952,
and 15.6041(a), Water Code, and Section 44.010(b), Agriculture Code) of
this bill.  

SECTION BY SECTION ANALYSIS

ARTICLE 1.  WATER PLANNING: DROUGHT, CONSERVATION, DEVELOPMENT, AND
MANAGEMENT 

SECTION 1.01. Amends Section 16.051, Water Code, as follows:

Sec. 16.051.  New heading: STATE WATER PLAN: DROUGHT, CONSERVATION,
DEVELOPMENT, AND MANAGEMENT; EFFECT OF PLAN.  Requires the Texas Water
Development Board (TWDB), rather than the executive administrator of TWDB,
no later than September 1, 2001, and every five years thereafter, to
adopt, rather than prepare, develop, and formulate, a comprehensive state
water plan that incorporates the regional water plans approved under
Section 16.053 of this code.  Requires the state water plan to provide for
the meeting of certain goals.  Requires the state water plan, as formally
adopted by TWDB, to be a guide to state water policy.  Requires the Texas
Natural Resource Conservation Commission (TNRCC) to take the plan into
consideration in matters coming before it.  Provides that nothing in the
state water plan or any amendment or modification of the plan affects any
vested right existing before August 30, 1965.  Requires TWDB, by rule, to
define and designate river basins and watersheds.  Requires TWDB, in
coordination  with TNRCC and the Parks and Wildlife Department (TPWD), to
adopt, by rule, guidance principles for the state water plan which reflect
the public interest of the entire state. Requires due consideration to be
given to the construction and improvement of surface water resources and
the application of principles that result in voluntary redistribution of
water resources when adopting guidance principles.  Requires TWDB, on
adoption, to deliver the state water plan to certain individuals.
Requires the plan to include legislative recommendations that TWDB
believes are needed and desirable to facilitate more voluntary water
transfers.  Deletes existing text regarding development of the state water
plan by the executive administrator of TWDB. 
 
SECTION 1.02. Amends Sections 16.053-16.057, Water Code, as follows:

Sec.  16.053.  New heading: REGIONAL WATER PLANS.  Sets forth procedures
for the development of regional water plans by the regional water planning
group in each regional water planning area.  Deletes existing text
regarding a hearing on the preliminary plan of the executive administrator
of TWDB. 
 

Sec.  16.054.  New heading: OTHER WATER PLANNING.  Provides that it is the
policy of the state that water resource management, water conservation,
and drought planning should occur on an ongoing basis.  Requires TWDB,
TNRCC, and TPWD to make available where appropriate technical and
financial assistance for such planning.  Provides that certain persons and
entities should ensure, when preparing individual water plans, that the
plan is consistent with the applicable approved regional water plan.
Deletes existing text regarding a hearing on the completed state water
plan of the executive administrator of TWDB. 

Sec.  16.055.  New heading: DROUGHT RESPONSE PLAN.  Requires the Division
of Emergency Management of the Office of the Governor to be responsible
for coordinating the drought response component of the state water plan.
Provides that the drought response and monitoring committee is created and
requires the committee to meet as necessary to carry out the provisions of
this section.  Sets forth composition of the drought response and
monitoring committee.  Sets forth responsibilities of the drought response
and management committee. Sets forth criteria for determining if a drought
exists.  Deletes existing text regarding the effect of the state water
plan of the executive administrator of TWDB. 

Sec.  16.056.  New heading: FEDERAL ASSISTANCE IN FINANCING REGIONAL WATER
PLANS.  Authorizes the executive administrator of TWDB to take all
necessary action to qualify for federal assistance in financing the
development and improvement of the regional water plans.  Deletes existing
text regarding amendment of plan. 

SECTION 1.03.  Amends Chapter 11D, Water Code, by amending Section 11.1271
and adding Section 11.1272, as follows: 

Sec.  11.1271.  ADDITIONAL REQUIREMENT: WATER CONSERVATION PLANS.
Requires, rather than authorizes, TNRCC to require the formulation and
submission of a water conservation plan and the adoption of reasonable
water conservation measures, as defined by Subdivision (8)(B), Section
11.002, of this code.  Requires TNRCC to require the holder of an existing
permit, certified filing, or certificate of adjudication for the
appropriation of surface water in the amount of 1,000 acre-feet a year or
more to develop, submit, and implement a water conservation plan,
consistent with the appropriate regional water plan, that adopts
reasonable water conservation measures, as defined by Section
11.002(8)(B), of this code. Prohibits the requirement for a water
conservation plan under this section from resulting in the need for an
amendment to an existing permit, certified filing, or certificate of
adjudication. 

Sec.  11.1272.  ADDITIONAL REQUIREMENTS: DROUGHT CONTINGENCY PLANS FOR
CERTAIN APPLICANTS AND WATER RIGHT HOLDERS.  Requires TNRCC, by rule, to
require wholesale and retail public water suppliers and irrigation
districts to develop drought contingency plans consistent with the
appropriate approved regional water plan to be implemented during periods
of water shortages and drought. 

SECTION 1.04.   Amends Section 15.401, Water Code, to provide that the
research and planning program (program) is created to provide money for
research into the state's water resources for regional planning by
political subdivisions. Authorizes the program to provide money for
research and planning by Texas political subdivisions related to the
proper conservation, management, and development of water resources of
areas outside Texas if such research or planning will result in water
being available for use in or for the benefit of Texas or will maintain
and enhance the quality of water in Texas. 

SECTION 1.05. Amends Section 15.404(a), Water Code, to authorize the TWDB
to enter into a contract with any person for research by Texas political
subdivisions related to the proper conservation and development of water
resources of areas outside Texas if such research will result in water
being available for use in or for the benefit of Texas or will help
maintain and enhance the quality of water in Texas. 

SECTION 1.06.   Amends Section 15.406(f), Water Code, to require the TWDB
to adopt rules  establishing criteria of eligibility for regional facility
planning money that considers the degree to which the regional facility
planning by the political subdivision is consistent with an approved
regional water plan for the area in which the political subdivision is
located. 

SECTION 1.07. Amends Chapter 15F, Water Code, by adding Section 15.4061,
as follows: 

Sec.  15.4061.  FUNDING FOR REGIONAL WATER PLANS.  Sets forth procedures
for funding the cost of developing or revising regional water plans.
Requires the board to adopt rules establishing criteria for eligibility
for regional water planning money that includes certain items. 

SECTION 1.08. Requires the state water plan in effect on the effective
date of this Act to remain in effect until a new state water plan is
adopted pursuant to Subsection (a), Section 16.051, Water Code, as amended
by Section 1.01 of this Act. 

ARTICLE 2. WATER MANAGEMENT, MARKETING AND TRANSFERS

SECTION 2.01.   Amends Section 791.026, Government Code, to authorize
contracts to require the purchaser to develop replacement supplies prior
to the expiration of the contract and authorizes the contract to provide
for the enforcement of such terms by court order.  Provides that where a
contract sets forth explicit expiration provisions, no continuation of
service obligation is implied.  Makes conforming changes. 

SECTION 2.02.   Amends Section 11.002, Water Code,  to redefine
"beneficial use," and to define "livestock," "conserved water," and
"surplus water." 

SECTION 2.03.   Amends Section 11.023(e), Water Code, to provide that
TNRCC  may authorize an appropriation of a single amount or volume of
water for more than one purpose.  Prohibits water actually diverted for
all purposes from exceeding total water appropriated, if a single amount
of water is appropriated for more than one purpose of use. 

SECTION 2.04.   Amends Section 11.036, Water Code, to provide that if a
contract sets expiration provisions, no continuation of service is
implied. Authorizes the terms of a contract  to provide that the person
using stored or conserved water is required to develop alternative or
replacement supplies prior to the expiration of the contract and may
enforce such terms by court order.  Makes a conforming changes. 

SECTION 2.05.   Amends Section 11.042, Water Code,  to authorize a water
control and improvement district supplying stored or conserved water to
use the bank and bed of any flowing natural stream in the state to convey
the water.  Deletes a provision requiring TNRCC to prescribe rules for
this purpose.  Requires a person who wishes to convey and subsequently
divert water in a watercourse or stream to obtain prior approval, except
as provided by Subsection (a) of this section. Requires the authorization
to allow to be diverted only a certain amount of water subject to certain
special conditions.  Prohibits water discharged into a watercourse or
stream under this chapter from causing a degradation of water quality to
the extent that the stream segment's classification would be lowered.
Authorizes authorizations under this section and water quality
authorizations to be approved in a consolidated permit proceeding.
Provides that nothing in this section shall be construed to affect an
existing project for which water rights and reuse authorizations have been
granted by TNRCC before September 1, 1997. 

SECTION 2.06.   Amends Section 11.046, Water Code, as follows:

Sec.  11.046.  New heading: RETURN SURPLUS WATER.  Requires a person who
takes or diverts water from a watercourse or stream to conduct surplus
water back to the watercourse or stream from which it was taken under
certain circumstances.  Authorizes TNRCC to include conditions in the
water right providing for the return of surplus water and the return
point, in granting an application for a water right.  Authorizes water
appropriated under a permit, certified filing, or certificate of
adjudication to be beneficially used and reused by a water right holder.
Provides that water diverted under a water right and returned  to a
watercourse and stream is considered surplus water and is subject to
reservation for instream uses or beneficial inflows or appropriation.
Prohibits water appropriated under a permit, certified filing, or
certificate of adjudication which is recirculated within a reservoir for
cooling purposes from being considered to be surplus for purposes of this
chapter. 

SECTION 2.07. Amends Section 11.085, Water Code, as follows:

Sec.  11.085. New heading: INTERBASIN TRANSFERS.  Provides that no person
may take or divert any state water from a river basin in this state and
transfer such water into any other river basin without first applying for
and receiving a water right or an amendment to a permit, certified filing,
or certificate of adjudication for the commission authorizing the
transfer.  Deletes existing text regarding interwatershed transfers.
Requires TNRCC to conduct one public meeting in both the basin of origin
and the basin receiving water for the proposed transfer, prior to any
action on an application for an interbasin transfer.  Requires notice to
be provided pursuant to Subsection (e).  Authorizes any person to present
relevant information at the meeting.  Requires TNRCC to give notice and
hold an evidentiary hearing, if the application is contested.  Sets forth
persons to receive notice of an application for an interbasin transfer,
and provides the manner in which notice is to be given.   Requires the
applicant to pay the cost of notice.  Authorizes TNRCC, by rule, to
establish procedures for payment of those costs.  Requires TNRCC to take
certain actions, in addition to other requirements of this code relating
to the review of and action on an application for a new water right or
amended permit, certified filing, or certificate of adjudication.
Authorizes TNRCC to grant the application, wholly or in part, only to the
extent that the detriments to the basin of origin during the proposed
transfer period are less than the benefits to the receiving basin during
the proposed transfer period.  Provides that this section does not apply
to certain transfers.  Requires the new water right or amended permit,
certified filing, or certificate of adjudication authorizing the transfer
to contain a condition for a period not greater than the contract term,
if the transfer is based on a contractual sale of water. Authorizes the
parties to a contract for interbasin transfer to include provisions for
compensation and mitigation.  Authorizes each county judge of a county
located in whole or in part in the basin of origin, if the party from the
basin of origin is a governmental entity, to provide input on the
appropriate compensation and mitigation for the interbasin transfer.
Provides that a basin is designated as provided in accordance with Section
16.051 of this code.  Prohibits a basin from being redesignated in order
to allow a transfer or diversion of water otherwise in violation of this
section.  Provides that a person who diverts water in violation of this
section is subject to a fine of not more than $10,000, rather than not
less than $100 nor more than $500.  Makes conforming and nonsubstantive
changes. 

SECTION 2.08. Amends Section 11.124(a), Water Code,  to make conforming
and nonsubstantive changes. 

SECTION 2.09. Amends Section 11.135(b), Water Code,  to require a permit
to include,  among other information, a special condition limiting the
total amount of water to be diverted for all purposes to the amount of
water appropriated, if the appropriated water is authorized for multiple
purposes. 

SECTION 2.10. Amends Section 11.142(a), Water code, to authorize a person
to construct on the person's own property a dam or reservoir with a normal
conservation storage capacity of, rather than a dam or reservoir to
impound or contain, not more than 200 acre-feet of water for domestic and
livestock purposes, without obtaining a permit. 

SECTION 2.11. Amends Sections 11.176 and 11.177, Water Code, as follows:

Sec.  11.176. HEARING.  Provides that a hearing on the cancellation of a
permit, certified filing, or certificate of adjudication as provided by
this chapter is unnecessary if such hearing is waived by the affected
holder of a permit, certified filing, or certificate of adjudication.
Provides that a permit, certified filing, or certificate of adjudication
for a term does not vest in the holder of a permit, certified filing, or
certificate of adjudication any right to the diversion, impoundment, or
use of water for longer than the term of the permit, certified  filing, or
certificate of adjudication and shall expire and be cancelled in
accordance with its terms without further need for notice or hearing.
Makes conforming changes. 

Sec.  11.177.  COMMISSION FINDING; ACTION.  Requires TNRCC at the
conclusion of the hearing, to cancel the permit, certified filing, or
certificate of adjudication if TNRCC makes certain findings.  Sets forth
the conditions TNRCC is required to consider in determining what
constitutes reasonable diligence or a justified nonuse.  Makes conforming
and nonsubstantive changes.   

SECTION 2.12. Amends Section 15.701, Water Code, to define "trust."

SECTION 2.13. Amends Section 15.702, Water Code, to require TWDB to
administer the Texas Water Bank (water bank) to facilitate water
transactions, rather than facilitate the transfer of water from all
sources as necessary, to provide sources of adequate water supplies for
use within the State of Texas. 

SECTION 2.14. Amends Section 15.703(a), to authorize TWDB to take all
actions necessary to operate the water bank and to facilitate the transfer
of water rights from the water bank for future beneficial use including,
but not limited to, certain actions. 

SECTION 2.15. Amends Chapter 15K, Water Code, by adding Section 15.7031,
as follows: 

Sec.  15.7031.  TEXAS WATER TRUST.  Provides that the Texas Water Trust is
established within the water bank to hold water rights dedicated to
environmental needs, including instream flows, water quality, fish and
wildlife habitats, or bay and estuary inflows. Requires TWDB, in
consultation with TPWD and TNRCC, to adopt rules governing the process for
holding and transferring water rights.  Requires the dedication of any
water rights placed in trust to be reviewed and approved by TNRCC, in
consultation with TWDB and TPWD.  Authorizes water rights to be held in
the trust for a term specified by contractual agreement or in perpetuity.  

SECTION 2.16. Amends Section 15.704, Water Code,  by amending Subsection
(a) and adding Subsection (c), to authorize a water right, rather than up
to 50 percent of a water right, to be deposited in the water bank for an
initial term of up to 10 years, unless otherwise held in the Texas Water
Trust.  Authorizes a contract or option contract to allow use of a water
right to include a requirement that the purchaser show diligence in
pursuing feasible and practicable alternative water supplies; and does not
vest any right in the purchaser beyond the stated terms and conditions of
the contract or option contract. 

SECTION 2.17. Provides that all permits approved by TNRCC before the
effective date of this Act that allow the multiple use of the
appropriation of a specific amount of water and which are no longer
subject to appeal are validated in all respects as if they originally had
been legally authorized or accomplished.  Provides that this article does
not apply to an application for an interbasin transfer filed and pending
before March 2, 1997.  Requires any subsequent renewals of such
applications to be subject to the provisions of this Act.  Provides that
nothing is this Act shall affect the validity of any interbasin transfer
permitted or authorized before the effective date of this Act. 

ARTICLE 3.  EMERGENCY AUTHORIZATIONS; ENFORCEMENT

SECTION 3.01. Amends Section 11.082(a), Water Code, to provide that a
person who wilfully takes, diverts, or appropriates state water without
complying with the applicable requirements of this chapter is liable to a
civil penalty of not more than $10,000, rather than $1,000, for each day
the person continues the taking, diversion, or appropriation. 

SECTION 3.02. Amends Chapter 11C, Water Code, by adding Sections
11.0841-11.0843, as follows: 

Sec.  11.0841.  CIVIL REMEDY.  Provides that this chapter does not
restrict the right of any private corporation, individual, or political
subdivision that has a justiciable interest in  pursuing any available
common-law remedy.  Authorizes a district court to award the costs of
litigation, including reasonable attorney fees and expert costs, to any
political subdivision of the state, private corporation, or individual
that is a water right holder and that prevails in a suit for injunctive
relief to redress an unauthorized diversion, impoundment, or use of
surface water in violation of this chapter or a rule adopted pursuant to
this chapter.  

Sec.  11.0842.  ADMINISTRATIVE PENALTY.  Sets forth the guidelines and
determination of sanctions TNRCC is authorized to impose for violations of
this chapter, a rule or order adopted under this chapter or Section 16.236
of this code, or a permit, certified filing, or certificate of
adjudication issued under this chapter.  Provides that this section and
Section 12.052 of this code are not applicable to any violation resulting
from the failure to obtain a permit for the construction of a dam or
reservoir for domestic and livestock purposes initiated prior to March 2,
1997, unless modifications other than repairs are made to the dam or
reservoir after  March 2, 1997.  Provides that all proceedings under this
subsection are subject to Section 2001, Government Code.  Sets forth the
required actions regarding payments received from a person who has been
charged with violation of this chapter.  Sets forth the guidelines for
appeal from the imposition of such penalties.  Sets forth the legal
consequences for noncompliance with TNRCC-imposed penalties.   

Sec.  11.0843.  FIELD CITATION.  Sets forth the guidelines authorizing a
watermaster or the watermaster's deputy, as defined by TNRCC rule, to
issue field citations for violations of this chapter or a water right
issued under this chapter.  Requires TNRCC, by rule, to establish penalty
amounts corresponding to types of violations of this chapter or rules or
orders adopted or water rights issued under this chapter.   Requires a
penalty collected under this section to be deposited in the state treasury
to the credit of the general revenue fund. 

SECTION 3.03. Amends Section 11.139, Water Code, as follows:

Sec.  11.139. New heading: EMERGENCY AUTHORIZATIONS.  Sets forth
procedures by which TNRCC is authorized to grant an emergency permit,
order, or amendment to an existing permit, certified filing, or
certificate of adjudication.  Authorizes TNRCC to grant emergency
authorizations for the temporary transfer and use of all or part of a
permit, certified filing, or certificate of adjudication for other than
domestic or municipal use to a retail or wholesale water supplier for
public health and safety reasons.  Provides that the person granted an
authorization under Subsection (h) of this section is liable to the owner
and the owner's agent or lessee from whom the use is transferred for the
fair market value of the water transferred as well as for any damages
caused by the transfer of use.  Provides that an emergency authorization
does not vest in the grantee any right to the diversion, impoundment, or
use of water and shall expire and be cancelled in accordance with its
terms. 

SECTION 3.04. Amends Section 12.052(c), Water Code, to provide that an
owner of a dam who wilfully fails or refuses to follow a final,
nonappealable order of TNRCC relating to  the construction,
reconstruction, repair, or removal of the dam is liable for up to $10,000,
rather than $1,000, a day for each day of the violation.  Makes a
conforming change.     

SECTION 3.05.   Amends Section 16.236, Water Code, as follows:

Sec. 16.236.  New heading: CONSTRUCTION OF LEVEE WITHOUT APPROVAL OF
PLANS; LEVEE SAFETY.  Requires TNRCC to make and enforce rules and orders
and perform all other acts necessary to provide for the safe construction,
maintenance, repair, and removal of levees located in this state.   Sets
forth penalties to be assessed for wilful failure or refusal to comply
with the rules and orders promulgated under Subsection (a) of this
section.  Sets forth guidelines for TNRCC to issue an emergency order,
either mandatory or prohibitory in nature, directing the owner of a levee
to repair, modify, maintain, dewater, or remove a levee which is unsafe.
Provides that nothing in this section or in rules or orders adopted by the
commission shall be construed to relieve an owner or operator of a levee
of the legal duties, obligations, or liabilities incident to ownership or
operation.  Provides that a person commits a Class C misdemeanor and upon
conviction is punishable by a fine of not more than $4,000, rather than
$100, if the person violates any provision of Subsection (a) of  this
section.  Makes conforming and nonsubstantive changes. 

SECTION 3.06. Amends Chapter 16G,  Water Code, by adding Section 16.237,
as follows: 

Sec.  16.237.  ADMINISTRATIVE PENALTY; CIVIL REMEDY.  Authorizes TNRCC to
assess an administrative penalty against a person as provided by Section
11.0842 of this code if the person violates a TNRCC rule or order adopted
under Section 16.236 of this code. Provides that nothing in this chapter
affects the right of any private corporation, individual, or political
subdivision that has a justiciable interest in pursuing a common-law
remedy. 

ARTICLE 4.  SURFACE WATER AND GROUNDWATER SUPPLIES

SECTION 4.01. Amends Section 11.134(b), Water Code,  to require TNRCC to
grant an application only if the proposed appropriation is intended for a
beneficial use, considers the effects of any hydrological connection
between surface water and groundwater, and addresses a water supply need
in a manner that is consistent with the state water plan or an approved
regional water plan for any area in which the proposed appropriation is
located, unless TNRCC determines that conditions warrant waiver of this
requirement.  Makes a conforming change. 

SECTION 4.02.   Amends Chapter 11D, Water Code, by adding Sections 11.1501
and 11.151, as follows:   

Sec.  11.1501.  CONSIDERATION AND REVISION OF PLANS.  Requires TNRCC in
considering certain applications to consider the state water plan and any
approved regional water plan for the area or areas in which the water is
proposed to be stored, diverted or used. 

Sec. 11.151.  EFFECTS OF PERMITS ON GROUNDWATER. Requires TNRCC, in
considering an application for a permit to store, take, or divert surface
water, to consider the effects on groundwater or groundwater recharge. 

SECTION 4.03. Amends Section 11.153, Water Code, by amending the section
heading and Subsections (a) and (d), as follows: 

Sec. 11.153.  New heading:  PROJECTS FOR STORAGE OF APPROPRIATED WATER IN
AQUIFERS.    Deletes the references to specific aquifers in a provision
requiring TNRCC to investigate  the feasibility of storing appropriated
water in various types of aquifers. Requires TNRCC to only issue a final
order granting a permit or amendment to a permit authorizing the storage
of appropriated water in aquifers for subsequent beneficial use only where
completed pilot projects or historically demonstrated projects have been
shown to be feasible under the criteria provided in Sections 11.154(c) and
(d). Makes a conforming change. 

SECTION 4.04. Amends Sections 11.154(a)-(c), and (e), to make conforming
and nonsubstantive changes. 

SECTION 4.05. Amends Section 11.155(b), Water Code, to make conforming
changes. 

SECTION 4.06. Amends Section 11.173(b), Water Code, to make conforming
changes. 

SECTION 4.07. Amends Section 15.001(6), Water Code, to redefine "project."

SECTION 4.08. Amends Section 15.002(b), Water Code, to authorize projects
to be in the state or outside the state.  Requires out-of-state projects
to be funded through a Texas political subdivision or an institution of
higher education and result in water being available for use in or for the
benefit of Texas or maintain and enhance the quality of water in Texas. 

SECTION 4.09.   Amends Section 17.895, Water Code, by amending Subsection
(a) and adding Subsection (c), to authorize TWDB or lender districts to
make conservation loans for capital equipment or materials, labor,
preparation costs, and installation costs for certain activities.
Authorizes TWDB to make conservation loans to borrower districts for the
cost of purchasing and installing devices, on public or private property,
designed to indicate the amount of water withdrawn for irrigation
purposes. 

SECTION 4.10. Amends Section 35.002(12), Water Code, to define "priority
groundwater management area" rather than "critical area." 

SECTION 4.11. Amends Section 35.007, Water Code, as follows:

Sec.  35.007. New heading:  IDENTIFYING, DESIGNATING, AND DELINEATING
PRIORITY GROUNDWATER MANAGEMENT AREAS.  Requires the executive director
and the executive administrator to meet at least once a year to identify,
based on the information gathered by TNRCC and TWDB, those areas of the
state that are experiencing or that are expecting to experience, within
the immediately following 25-year period, critical groundwater problems,
including shortages of surface water.  Requires the executive director to
prepare a report to TNRCC if the executive director concludes that an area
of the state should be considered for designation as a priority
groundwater management area (area). Requires the executive director to
begin preparation of a priority groundwater management area report
(report) by requesting a study from the executive administrator, which
must assess the area's immediate, short-term, and long-term water supply
and needs; and be completed and delivered to the director on or before the
180th day following the date of request.  Requires the executive director
to request a study from the director of the Parks and Wildlife Department
for the purpose of preparing the report required by this section.  Sets
forth the requirements of the study.  Requires the report to include
certain items.  Requires the executive director to complete the  report
and file it with TNRCC on or before the 240th day following the date on
which the executive administrator was requested to produce a study.
Requires the executive director to make the report available to the public
by providing a copy of the report to at least one public library and the
county clerk's office in each county in which the proposed priority
groundwater management area is located and to all districts adjacent to
the area of the proposed priority groundwater management area.  Makes
conforming changes. 

SECTION 4.12. Amends Section 35.008, Water Code, as follows:

Sec.  35.008.  New heading:  PROCEDURES FOR DESIGNATION OF PRIORITY
GROUNDWATER MANAGEMENT AREA; CONSIDERATION OF CREATION OF DISTRICT OR
ADDITION OF LAND IN PRIORITY GROUNDWATER MANAGEMENT AREA TO EXISTING
DISTRICT.  Requires TNRCC to designate areas using the procedures provided
by this chapter in lieu of those provided by Chapter 2001B, Government
Code.  Requires TNRCC to call an evidentiary hearing (hearing) to consider
the designation and physical dimensions of an area. Requires the hearing
to be held at a location in one of the counties in which the area is
located, or proposed to be located, or in the nearest convenient location
if adequate facilities are not available in those counties.  Requires
TNRCC to hear testimony and receive evidence from all affected persons and
consider the director's report, supporting information, the testimony and
evidence received at the hearing. Authorizes TNRCC to request such
information from any source, if TNRCC considers further information
necessary.  Makes conforming changes. 

SECTION 4.13. Amends Section 35.009, Water Code, to require TNRCC to
publish notice of the hearing in at least one newspaper with general
circulation in the county or counties in which the area being designated a
priority groundwater management area or the area within a priority
groundwater management area being considered for district creation or for
addition to an existing district is located.  Sets forth the provisions of
the notice. Requires TNRCC to give written notice of the date, time,
place, and purpose of the hearing to the governing body of certain
entities which supply public drinking water located either partially or
entirely in the area or proposed area before the 30th day preceding the
date set for the hearing.  Makes conforming and nonsubstantive changes. 

SECTION 4.14. Amends Sections 35.012(b)-(e), Water Code, to authorize the
landowners in the area, following the issuance of a TNRCC order under
Subsection (b), to set forth certain provisions  relating to the creation
and maintenance of priority groundwater management areas.  Requires the
Texas Agricultural Extension Service, if TNRCC proposes the creation of
one or more districts, to begin an education program within such areas
with the assistance of certain entities to inform the residents of the
status of the area's water resources and management options before
beginning the procedures for creation of a district.  Makes conforming and
nonsubstantive changes. 

SECTION 4.15. Amends Section 35.013, Water Code, as follows: 

Sec.  35.013.  New heading:  ADDING PRIORITY GROUNDWATER MANAGEMENT AREA
TO EXISTING DISTRICT.   Requires a proposition to add a priority
groundwater management area to a district, if the district has outstanding
debts or taxes, rather than issued bonds, to include the following
language in the ballot: "and assumption by the described area of a
proportional share of the debts or taxes of the district."  Makes
conforming changes. 

SECTION 4.16. Amends Sections 35.014(b) and (c), Water Code, to make
conforming changes. 

SECTION 4.17. Amends Section 35.015, Water Code, to delete text
prohibiting a political subdivision from being eligible to receive any
financial assistance from the state. Makes conforming and nonsubstantive
changes. 

SECTION 4.18. Amends Section 35.017, Water Code, to make a conforming
change. 

SECTION 4.19. Amends Chapter 35, Water Code, by adding Section 35.018, as
follows: 

Sec.  35.018.  REPORTS.  Requires TNRCC in conjunction with TWDB to
prepare and deliver to the governor, the lieutenant governor, and the
speaker of the house of representatives a comprehensive report concerning
activities during the preceding two years relating to the designation of
areas by TNRCC and the creation and operation of districts under Chapter
36, Water Code,  no later than January 31 of each odd-numbered year. Sets
forth the required contents of the report. 

SECTION 4.20. Amends Section 36.001, Water Code, by amending Subdivision
(14) and adding Subdivisions (16)-(19), to define "priority groundwater
management area," "loan fund," "applicant," and "livestock."  

SECTION 4.21. Amends Section 36.012(c), Water Code, to make a conforming
change. 

SECTION 4.22. Amends Section 36.013(d), Water Code, to make a conforming
change.  

SECTION 4.23. Amends Chapter 36B, Water Code, by adding Section 36.0151,
as follows: 

Sec.  36.0151.  CREATION OF DISTRICT FOR PRIORITY GROUNDWATER MANAGEMENT
AREA.  Requires TNRCC to provide that temporary directors be appointed
under Section 36.016 and that an election be called by the temporary
directors to confirm the creation of the district and to elect permanent
directors, if TNRCC proposes that a district be created under Section
35.012(d).  Requires TNRCC to notify the county commissioners court of
each county with territory in the district of the district's creation as
soon as practicable after issuing the order creating the district. 

SECTION 4.24. Amends Section 36.016, Water Code, to set forth requirements
for the appointment of temporary directors. Makes conforming and
nonsubstantive changes. 

SECTION 4.25. Amends Chapter 36B, Water Code, by adding Section 36.0161,
as follows: 

Sec.  36.0161.  METHOD FOR APPOINTING TEMPORARY DIRECTORS FOR DISTRICT IN
PRIORITY GROUNDWATER MANAGEMENT AREA.  Sets forth the apportionments for
appointment of temporary directors for a district in an area that is
contained within a certain amount of counties.  Defines "estimated
groundwater use." Requires the apportionment of appointments under
Subsection (a) to be made by TNRCC  so as to reflect the proportion each
county's estimated groundwater use bears to the sum of the estimated
groundwater use for the district as determined under Subsection (c).
Requires TNRCC, by rule, to determine the method it will use to implement
this subdivision. Requires TNRCC to develop an estimate of annual
groundwater use in acre-feet for each county area within the district if
the district for which temporary directors are to be appointed is
contained within two, three, or four counties. 

SECTION 4.26. Amends Chapter 36D, Water Code, by amending Section 36.107
and adding Sections 36.1071-36.1073 as follows: 

Sec.  36.107.  New heading: RESEARCH.  Makes a nonsubstantive change.

Sec.  36.1071.  MANAGEMENT PLAN. Sets forth the procedures for development
of a comprehensive management plan by a "district" defined as any district
or authority created under Section 52, Article III, or Section 59, Article
XVI, Texas Constitution, that has the authority to regulate the spacing of
water well, the production from water wells, or both. Requires the board
of directors of a district (board) to adopt amendments to the management
plan as necessary after notice and hearing.  Requires amendments to comply
with the requirements of this section.  Makes conforming changes. 

Sec.  36.1072.  TEXAS WATER DEVELOPMENT BOARD REVIEW AND CERTIFICATION OF
MANAGEMENT PLAN.  Sets forth procedures for review and certification of
the management plan by TWDB.   Requires the board to readopt the plan with
or without revisions at least once every five years.  Prohibits TNRCC from
taking enforcement action against a district until a certain date. 

Sec.  36.1073.  AMENDMENT TO MANAGEMENT PLAN.  Requires any amendment to
the management plan to be submitted to TWDB within 60 days following
adoption of the amendment by the district's board.  Requires TWDB to
review and certify any amendment which substantially affects the
management plan in accordance with the procedures established under
Section 36.1072.   

SECTION 4.27. Amends Section 36.108(a), Water Code, to make a conforming
change. 

SECTION 4.28. Amends Section 36.113, Water Code, to require a district to
require an application for a permit be in writing and sworn to.
Authorizes the district to set forth the required contents of the permit
application.  Requires the district to make certain considerations before
granting or denying a permit.  Authorizes a district to prohibit changes
in the withdrawal and use of groundwater under a permit from being made
without prior approval of a permit amendment issued by the district. Makes
conforming and nonsubstantive changes. 

SECTION  4.29. Amends Chapter 36D, Water Code, by adding Section 36.1131,
as follows: 

Sec.  36.1131.  ELEMENTS OF PERMIT.  Requires a permit issued by the
district to the applicant under Section 36.113 to state the terms and
provisions prescribed by the district. Sets forth the authorized contents
of the permit. 

SECTION 4.30. Amends Chapter 36E, Water Code, by adding Sections
36.159-36.161, as follows: 

Sec.  36.159.  GROUNDWATER DISTRICT MANAGEMENT PLAN FUNDS.  Authorizes
TWDB to allocate funds from the research and planning fund created under
Chapter 15F, to a district to conduct initial data collections under this
chapter, to develop and implement a long-term management plan under
Section 36.1071, and to participate in regional water plans. 

Sec.  36.160.  FUNDS.  Sets forth certain activities to which TWDB, TNRCC,
Texas Parks and Wildlife Department (TPWD), the Texas Agricultural
Extension Service, and institutions of higher education are authorized to
allocate funds to carry out the objectives of this chapter and Chapter 35. 
 
Sec.  36.161.  ELIGIBILITY FOR FUNDING.  Sets forth requirements for
eligibility to receive funding and procedures for denying funding to a
district.  Authorizes TWDB to delegate to the State Office of
Administrative Hearings the responsibility to conduct a hearing under this
section. 

SECTION 4.31. Amends Chapter 36G, Water Code, by adding Section 36.206, as
follows: 

Sec.  36.206.  DISTRICT FEES.  Sets forth procedures for fees to be
charged by the district. 
 
SECTION 4.32. Amends Chapter 36I, Water Code, as follows:

SUBCHAPTER I.  New heading: PERFORMANCE REVIEW AND DISSOLUTION

Sec.  36.301.  FAILURE TO SUBMIT A MANAGEMENT PLAN.  Requires TNRCC to
take appropriate action under Section 36.303, if a board fails to submit a
management plan or to receive certification of its management plan under
Section 36.1072 or fails to submit or receive certification of an
amendment to the management plan under Section 36.1073. 

Sec.  36.302.  DETERMINATION OF WHETHER DISTRICT IS OPERATIONAL. Requires
TNRCC to make a determination of whether a district is actively engaged in
achieving the objectives of the district's management plan based on an
audit of the district's performance under the plan.  Requires TNRCC to
conduct such audits following the first anniversary of the initial
certification of the plan by TWDB and following the end of every five-year
period thereafter.  Requires TNRCC to take appropriate action under
Section 36.303, if TNRCC finds under Subsection (a) that the district is
not operational.   

Sec.  36.303.  ACTION BY COMMISSION.  Authorizes TNRCC, after notice and
hearing, to take actions TNRCC deems appropriate to enforce compliance
with rules or orders of TNRCC or any provisions of this chapter, including
certain actions.  Authorizes TNRCC to recommend to the legislature, based
upon the report required by Section 35.018 of this code, actions TNRCC
deems necessary to accomplish comprehensive management in the district, in
addition to the actions identified under Subsection (a). 

Sec.  36.304.  New heading: DISSOLUTION OF DISTRICT.  Authorizes TNRCC to
dissolve certain districts.  Makes conforming changes. 

Sec.  36.305.  New heading: NOTICE OF HEARING FOR DISSOLUTION OF BOARD OR
DISTRICT.  Makes conforming changes. 

Sec.  36.306.  INVESTIGATION.  Requires the executive director to
investigate the facts and circumstances of any violations.  Requires the
executive director to prepare and file a written report with TNRCC and the
district and include any actions the executive director believes TNRCC
should take under Section 36.303. 

Sec.  36.307.  ORDER OF DISSOLUTION OF BOARD.  Sets forth procedures to be
followed if TNRCC enters an order to dissolve the board.  Makes conforming
changes. 

Sec.  36.308.  CERTIFIED COPY OF ORDER.  Created from existing Section
36.305. 

Sec.  36.309.  APPEALS.  Requires appeals from any TNRCC order to be filed
and heard in the district court of any of the counties in which the land
is located.  Deletes a requirement that trial appeal be de novo and that
the substantial evidence rule does not apply. Redesignated from Section
36.306. 

Sec.  36.310.  ASSETS ESCHEAT TO STATE.  Requires all assets of a
district, upon dissolution of the district by TNRCC, to be sold at public
auction and the proceeds given to the county if it is a single-county
district.  Requires the proceeds, if it is a multicounty district, to be
divided with the counties in proportion to the surface land area in each
county  served by the district.  Deletes existing text regarding Chapter
72, Property Code. Redesignated from Section 36.307. 

SECTION 4.33. Amends Section 36.325(b), Water Code, to require a petition
for inclusion in a district to be signed by the commissioners court of the
county in which the area is located if the area is identified as a
priority groundwater management area, rather than critical area. 

SECTION 4.34. Amends Section 36.331,  Water Code,  to make a conforming
change. 

SECTION 4.35. Amends Chapter 36, Water Code, by adding Subchapter L, as
follows: 

SUBCHAPTER L.  GROUNDWATER DISTRICT LOAN ASSISTANCE FUND

Sec.  36.371.  GROUNDWATER DISTRICT LOAN ASSISTANCE FUND.  Creates the
groundwater district loan assistance fund, to be funded by direct
appropriation and by TWDB, at its discretion, from the water assistance
fund.  Requires repayments of loans to be deposited in the water
assistance fund. 

Sec.  36.372.  FINANCIAL ASSISTANCE.  Authorizes the loan fund to be used
by TWDB to provide loans to newly confirmed districts and legislatively
created districts that do not require a confirmation election to pay for
their creation and initial operations.  Requires TWDB to establish rules
for the use and administration of the loan fund. 

Sec. 36.373. APPLICATION FOR ASSISTANCE.  Sets forth information required
to be included in an application to TWDB for financial assistance from the
loan fund.  Prohibits TWDB from accepting a loan application from the loan
fund unless it is submitted in affidavit form by the applicant's board.
Requires TWDB to prescribe the affidavit form in its rules.  Prohibits the
rules implementing this section from restricting or prohibiting TWDB from
requiring additional factual material from an applicant. 

Sec. 36.374. APPROVAL OF APPLICATION.  Authorizes TWDB, by resolution, to
approve an application if it finds that granting financial assistance to
the applicant will serve the public interest and that the revenue pledged
by the applicant will be sufficient to meet obligations assumed by the
applicant.        

SECTION 4.36.  Amends Section 151.318(g), Tax Code, to provide that each
person engaged in manufacturing, processing, fabricating, or repairing
personal property for sale is entitled to a refund or reduction of tax
imposed by this chapter for the purchase of machinery if the machinery has
certain criteria. 

SECTION 4.37.  (a)  Repealer: Sections 35.010 and 35.011, Water Code
(Consideration of Creation of District or Addition of Land in Critical
Area to Existing District, and Notice of Hearing to Create District or Add
Critical Area to Existing District). 

(b) Repealer: Section 5.02, Chapter 133, Acts of the 69th Legislature,
Regular Session, 1985 (Critical Areas Groundwater Districts).   

SECTION 4.38.   Defines "district."  Requires a district which was created
or, if the district required a confirmation election, a district whose
creation was confirmed before the effective date of this Act, to submit a
management plan for certification to TWDB not later than September 1,
1998. 

SECTION 4.39. Requires an area designated as a critical area under Chapter
35, Water Code, as it existed before the effective date of this Act, or
under other prior law, to be known and referred to as a priority
groundwater management area on or after the effective date of this Act. 

SECTION 4.40.  Requires TNRCC to make all designations of priority
groundwater management areas for which critical area reports were required
to have been  completed, under Chapter 35, Water Code, before the
effective date of this Act under Section 35.007, Water Code, as that
section existed immediately before the effective date of this Act, not
later than September 1, 1998. 
 
ARTICLE 5.  FINANCIAL ASSISTANCE TO LOCAL GOVERNMENTS

SECTION 5.01.  Amends Section 15.431, Water Code, by amending Subsection
(d) and adding Subsection (g), to authorize TWDB to use money maintained
as principal in the agricultural trust fund to make conservation loans to
borrower districts and loans to lender districts for the purposes listed
in Section 17.895 of this code.  Provides that loans and conservation
loans are subject to the provisions of Sections 17.896 through 17.903 of
this code.  Requires repayments of principal and interest on loans and
conservation loans made under this subchapter to be deposited in the
agricultural trust fund.  Defines "borrower district," "conservation
loan," "individual borrower," "lender district," and "loan."  Deletes text
prohibiting money in the agricultural trust fund from being spent for any
purpose. 

SECTION 5.02.  Amends Section 16.189, Water Code, to require TWDB to
require payments that will recover over the lease period not less than the
total of all principal and interest requirements applicable to the debt
incurred by the state in leasing a state facility.  Makes conforming
changes. 

SECTION 5.03.  Amends Chapter 17, Water Code, by adding Subchapter L, as
follows: 

SUBCHAPTER L. WATER FINANCIAL ASSISTANCE BOND PROGRAM

Sec. 17.951.  DEFINITIONS.  Defines "fund" and "resolution."

Sec. 17.952. ISSUANCE OF WATER FINANCIAL ASSISTANCE BONDS.  Authorizes
TWDB by resolution to provide for the issuance of water financial
assistance bonds, which are required to be general obligation bonds of the
state, in an aggregate principal amount not to exceed the principal amount
authorized to be issued by Section 49-d-8, Article III, Texas
Constitution. 

Sec. 17.953. CONDITIONS FOR ISSUANCE OF WATER FINANCIAL ASSISTANCE BONDS.
Sets forth terms by which water financial assistance bonds are issued. 

Sec. 17.954. BOND ENHANCEMENT AGREEMENTS; PAYMENT OF EXPENSES. Sets forth
provisions by which TWDB is authorized to enter into one or more bond
enhancement agreements and pay expenses in connection with the issuance of
water financial assistance bonds and to provide financial assistance to
political subdivisions.  Sets forth items that bond enhancement agreements
are authorized to include. 

Sec. 17.955. PERSONS DESIGNATED TO ACT AS AGENTS OF THE BOARD.  Sets forth
the duties of certain persons authorized to act as agents of TWDB. 

Sec. 17.956. TEXAS WATER DEVELOPMENT FUND II.  Provides that the fund is a
special assistance fund in the state treasury, and all water financial
assistance bond proceeds are required to be deposited in the state
treasury to the credit of the fund.  Sets forth accounts required to be
included in the fund and requires proceeds from the sale of water
financial assistance bonds issued to provide financial assistance to
political subdivisions to be credited to such accounts as provided by
resolution by TWDB.  Authorizes TWDB to create additional accounts within
the fund as TWDB determines are necessary or convenient for the
administration of the fund. 

Sec. 17.957. STATE PARTICIPATION ACCOUNT. Defines "state participation
account." Requires transfers to be made from this account as provided by
this subchapter.  Sets forth items included in the state participation
account.  Authorizes moneys on deposit in the state participation account
to be used by TWDB for certain projects in the manner TWDB determines
necessary for the administration of the fund. 

Sec. 17.958. ECONOMICALLY DISTRESSED AREAS PROGRAM ACCOUNT. Defines
"economically distressed areas program account."  Sets forth items
included in the economically distressed areas program account.  Authorizes
moneys on deposit in the economically distressed areas program account to
be used by TWDB for certain purposes.  Makes conforming changes. 

Sec. 17.959. FINANCIAL ASSISTANCE ACCOUNT.  Defines "financial assistance
account."  Sets forth items included in the financial assistance account.
Authorizes moneys on deposit in the financial assistance account to be
used by TWDB for certain purposes. Makes conforming changes. 

Sec. 17.960. BOND RESOLUTIONS.  Authorizes TWDB to make additional
covenants with respect to water financial assistance bonds and sets forth
instances for which the covenants may  provide.  Authorizes TWDB to invest
money in the fund and any account therein in any obligations or securities
as provided by the resolution or by rule adopted by TWDB. Authorizes TWDB
to adopt and execute other proceedings, agreements, or instruments
necessary in the issuance of water financial assistance bonds, including
bond enhancement agreements. 

Sec. 17.961. TRANSFERS TO REVOLVING FUNDS. Authorizes TWDB to direct the
comptroller to transfer amounts from the financial assistance account to
the state water pollution control revolving fund to provide financial
assistance in order to implement a revolving loan program.  Sets forth
provisions by which TWDB is required to use the state water pollution
control revolving fund.  Requires TWDB to use the additional state
revolving fund in the event amounts are transferred to any additional
state revolving fund. 

Sec. 17.962. STATE APPROVALS.  Prohibits the issuance of water financial
assistance bonds under this subchapter unless approved by the bond review
board.  Provides that the proceedings relating to the water financial
assistance bonds are subject to review and approval by the attorney
general in the same manner as provided by Article 717q, V.T.C.S. Provides
that after approval by the attorney general of the proceedings relating to
the issuance of water financial assistance bonds, registration of the
proceedings by the comptroller, and delivery of the water financial
assistance bonds to the purchasers, water financial assistance bonds are
incontestable and constitute general obligations of the state. 

Sec. 17.963. PAYMENT OF BOARD OBLIGATIONS.  Sets forth terms by which TWDB
is required to cooperate with the comptroller to develop procedures for
the payment of principal and interest on water financial assistance bonds
and any obligation under a bond enhancement agreement. 

Sec. 17.964. ELIGIBLE SECURITY.  Provides that water financial assistance
bonds are eligible to secure deposits of public funds of the state and
political subdivisions of the state. Provides that water financial
assistance bonds are lawful and sufficient security for deposits to the
extent of their face value. 

Sec. 17.965. LEGAL INVESTMENTS.  Sets forth the entities for which water
financial assistance bonds are legal and authorized investments. 

Sec. 17.966. MUTILATED, LOST, OR DESTROYED BONDS.  Authorizes TWDB to
provide for the replacement of mutilated, lost, or destroyed water
financial assistance bonds. 

Sec. 17.967. REFUNDING BONDS. Sets forth the terms, by resolution, by
which TWDB is authorized to provide for the issuance of water financial
assistance bonds to refund outstanding bonds. 

Sec. 17.968. SALE OF POLITICAL SUBDIVISION BONDS BY THE BOARD; USE OF
PROCEEDS.  Sets forth the terms under which TWDB is authorized to sell or
dispose of political subdivision bonds purchased with money in the fund
and apply the proceeds of the sale of political subdivision bonds held by
TWDB.  Requires TWDB to sell the political subdivision bonds at the price
and under the terms that it determines to be reasonable.  

Sec. 17.969. TAX EXEMPT BONDS. Provides that water financial assistance
bonds, interest income and any profit made on the sale of water assistance
financial bonds issued under this  subchapter are free from taxation and
any assessments by this state and any other political subdivision of this
state.                
  
Sec. 17.970. ENFORCEMENT BY MANDAMUS. Authorizes payment of water
financial assistance bonds and obligations incurred under bond enhancement
agreements and performance of official duties prescribed by Section
49-d-8, Article III, Texas Constitution, to be enforced in a court of
competent jurisdiction by mandamus or other appropriate proceedings. 

Sec. 17.971. SUBCHAPTER CUMULATIVE OF OTHER LAWS.  Provides that this
subchapter is cumulative of other laws on the subject, and TWDB is
authorized to use provisions of other applicable laws in the issuance of
water financial assistance bonds and the execution of bond enhancement
agreements, but this subchapter is wholly sufficient authority for the
issuance of water financial assistance bonds, the execution of bond
enhancement agreements, and the performance of all other acts and
procedures authorized by this subchapter.  Authorizes TWDB to exercise the
authority granted to the governing body of an issuer with regard to the
issuance of obligations under Article 717q, V.T.C.S. Authorizes TWDB to
exercise any powers granted to it under this chapter and Chapter 16,
including the powers described in Subchapters D-G, and K, notwithstanding
any provision inconsistent with the provisions of this subchapter. 

SECTION 5.04. Amends Section 17.001(7), Water Code, to redefine "water
supply project." 

SECTION 5.05.   Amends Section 17.001, Water Code, by amending Subdivision
(17) and adding Subdivision (25), to redefine "financial assistance" and
define "water financial assistance bonds." 

SECTION 5.06.   Amends Section 17.011, Water Code, by adding Subsection
(c), to authorize TWDB, by resolution, to issue water financial assistance
bonds.  Sets forth purposes for the bonds to be issued. 

SECTION 5.07.   Amends Section 17.0111, Water Code, to provide that  no
more than $250,000,000 in principal, rather than 50 percent of the amount
of bonds  authorized by Article III, Section 49-d-7, of the Texas
Constitution, and issued under either that section or Article III, Section
49-d-8, of the Texas Constitution, may be dedicated to the purposes
provided by Subchapter K. Makes conforming changes. 

SECTION 5.08.   Amends Section 17.182, Water Code, to require proceeds
from the sale of political subdivision bonds held by TWDB either to be
credited to the account from which financial assistance was made or to be
deposited to the credit of the Texas Water Development Fund II.  Sets
forth requirements for the proceeds. 

SECTION 5.09. Amends Section 17.278, Water Code, to prohibit TWDB, if an
application includes a proposal for a wastewater treatment plant that is
located outside the jurisdiction of this state and that is not subject to
the permitting authority of TNRCC,  from delivering funds for the
wastewater treatment plant until after the board reviews the plans and
specifications in coordination with TNRCC and finds that the wastewater
treatment plant is capable of producing effluent that will meet federal
and Texas-approved water quality standards. 

SECTION 5.10. Amends Sections 44.007-44.010, Agriculture Code, to require
TWDB to establish a linked deposit program to encourage commercial lending
for the financing of water conservation projects.  Authorizes at any one
time, not more than $15 million, of which $10 million is authorized only
to be used to finance water conservation projects, to be placed in link
deposits under this chapter.  Authorizes a loan granted pursuant to this
chapter, when used to finance eligible water conservation projects or
equipment, to be applied to existing debt resulting from the financing of
water conservation projects or equipment for agricultural purposes as
defined by TWDB rule.  Makes conforming and nonsubstantive changes. 

SECTION 5.11. Amends Chapter 11B, Tax Code, by adding Section 11.32, as
follows: 

 Sec.  11.32.  CERTAIN WATER CONSERVATION INITIATIVES.  Authorizes the
governing body of a taxing unit by official action of the body adopted in
the manner required by law for official actions to exempt from taxation
part or all of the assessed value of property upon which approved water
conservation initiatives have been implemented. Requires approved water
conservation initiatives to be designated pursuant to an ordinance or
other law adopted by the governing unit for purposes of this section. 

SECTION 5.12.  Amends Chapter 2155.44, Government Code, by adding
Subsection (d), to require the General Services Commission and all state
agencies making purchase of vegetation for landscaping purposes, including
plants, to give preference to vegetation native to Texas if the cost to
the state and the quality are equal. 

ARTICLE 6. SMALL COMMUNITIES ASSISTANCE

SECTION 6.01.   Amends Section 5.311, Water Code, to authorize TNRCC to
delegate to an administrative law judge of the State Office of
Administrative Hearings the authority to issue interlocutory orders
related to interim rates under Chapter 13.  Requires the administrative
law judge to report to TNRCC on the hearing in the manner provided by law,
except as provided in Subsection (a).  Makes conforming changes. 

SECTION 6.02.   Amends Sections 13.002(11), (21), and (24), Water Code, to
redefine "member," "service," and "water supply or sewer service
corporation." 

SECTION 6.03.   Amends Section 13.181, Water Code, to require this
subchapter to apply only to a utility and not to municipalities, counties,
districts, or water supply or sewer service corporations, except as stated
in Section 13.192.  Deletes the requirement that this subchapter apply
only to a utility and not be applied to municipalities, counties,
districts, or water supply or sewer service corporations. 

SECTION 6.04.   Amends Section 13.183, Water Code, by adding Subsection
(c), to authorize the regulatory authority to develop methodologies for
water or sewer rates using factors other than rate of return and those
specified in Section 13.185, to ensure that retail customers receive
higher quality or more reliable water or sewer service.  Sets forth
requirements for overall revenues determined pursuant to an alternate
methodology developed under this section.  Requires the regulatory
authority, in determining to use alternate ratemaking methodologies, to
assure that rates, operations, and services are just and reasonable to the
consumers and to the utilities. 

SECTION 6.05.   Amends Section 13.184(a), Water Code, to prohibit TNRCC
from prescribing any rate that will yield more than a fair return on the
invested capital used and useful in rendering service to the public unless
TNRCC establishes alternate rate methodologies in accordance with Section
13.183(c).  Sets forth regulations for the use of alternate ratemaking
methodologies.  Makes a conforming change. 

SECTION 6.06.   Amends Section 13.185(a), Water Code, to require
components of invested capital and net income to be determined according
to the rules stated in this section, unless alternate methodologies are
adopted as provided in Sections 13.183(c) and 13.184(a).  Makes a
conforming change. 

SECTION 6.07.   Amends Chapter 13G, Water Code, by adding Section 13.241,
as follows: 

Sec. 13.241.  GRANTING OR AMENDING CERTIFICATES.  Sets forth guidelines to
ensure that the groundwater and surface water resources in Texas are
adequately protected and efficiently used and to consider regionalization
or consolidation of systems when economically feasible or in the public
interest, required to be used by TNRCC when determining whether to grant
or amend a certificate of public convenience and necessity (certificate). 

SECTION 6.08.   Amends Section 13.246, Water Code, as follows:

 Sec.  13.246.  New heading: NOTICE AND HEARING; ISSUANCE, AMENDMENT, OR
REFUSAL; FACTORS CONSIDERED. Authorizes TNRCC to impose special conditions
necessary on an application for a certificate to ensure that continuous
and adequate service is provided.  Sets forth items TNRCC is authorized to
require an applicant for a certificate to provide.  Requires TNRCC, where
applicable, in addition to other factors in this section, to consider the
efforts of the applicant to extend service to any economically distressed
areas. Defines "economically distressed area." 

SECTION 6.09.   Amends Section 13.253, Water Code, to authorize TNRCC to
order any retail public utility that is required to possess a certificate
and is located in an affected county to develop, implement, and follow
certain practices to ensure that continuous and adequate service is
provided to any areas currently certificated to the retail public utility
if the retail public utility has not provided continuous and adequate
service to any of those areas; or to order a public utility or water
supply or sewer service corporation that has not demonstrated that it can
provide continuous and adequate service from its drinking water source or
sewer treatment facility to obtain service sufficient to meet its
obligation to provide continuous and adequate service on at least a
wholesale basis from another consenting utility service provider.  Makes a
conforming change. 

SECTION 6.10.   Amends Section 13.254, Water Code, to set forth the
conditions which authorize TNRCC to revoke or amend any certificate of
public convenience and necessity.  Prohibits a retail public utility from
rendering retail water or sewer service to the public in an area that has
been decertified without proper consent from the retail public utility
previously holding the certificate without providing compensation for any
property that the commission determines is rendered useless or valueless
to the decertified retail public utility as a result of decertification.
Sets forth procedures for the determination of the monetary amount of
compensation. 

SECTION 6.11.   Amends Section 13.301(a), Water Code, to require a utility
or a water supply or sewer service corporation on or before the 120th day
before the effective date of a sale, acquisition, lease, or rental of a
water or sewer system that is required by law to possess a certificate or
the effective date of a merger or consolidation with such a utility or
water supply or sewer service corporation to file a written application
with TNRCC and give public notice of the action unless public notice is
waived by the executive director for good cause shown. Authorizes TNRCC to
require demonstration of adequate capability to provide continuous and
adequate service to the requested area and any areas currently
certificated to the person.  Authorizes TNRCC to require the person to
provide a bond or other financial service if the person purchasing or
acquiring the water or sewer system cannot demonstrate adequate financial
capability.  Makes conforming changes. 

SECTION 6.12.   Amends Section 13.302, Water Code, to set forth
requirements for an application for a person acquiring controlling
interest in a utility. 

SECTION 6.13.   Amends Section 13.412, Water Code, by amending Subsections
(a) and (b) and adding Subsections (f) and (g), to require the attorney
general to bring suit for the appointment of a receiver to collect the
assets and carry on the business of a water or sewer utility that informs
TNRCC that the owner is abandoning the system.  Requires the court to
appoint a receiver if an appointment is necessary to guarantee continuous
and adequate service to the customers of the utility.  Authorizes
abandonment to include certain actions for purposes of this section and
Section 13.4132.  Authorizes a receiver appointed under this section,
notwithstanding Section 64.021, Civil Practice and Remedies Code, to seek
TNRCC approval to acquire the water or sewer utility's facilities and
transfer the utility's certificate.  Requires the receiver to apply in
accordance with Subchapter H. 

SECTION 6.14.   Amends Sections 13.4132(a) and (c), Water Code, to
authorize TNRCC, after providing to the utility an opportunity to be heard
by the commissioners at a TNRCC meeting, to authorize a person to manage
certain facilities.  Provides that a person appointed under this section
has the power and duty to access all system components. 

SECTION 6.15.   Amends Section 15.602, Water Code, to define "community
water system," "disadvantaged community," "nonprofit noncommunity water
system,"  "public water system," "Safe Drinking Water Act," and "safe
drinking water revolving fund," and to redefine "political  subdivision."
Makes conforming changes. 

SECTION 6.16.   Amends Chapter 51J, Water Code, by adding Section 15.6041,
as follows: 

Sec. 15.6041. FINANCIAL ASSISTANCE UNDER THE SAFE DRINKING WATER REVOLVING
FUND.  Requires the safe drinking water revolving fund to be administered
by TWDB.  Requires the fund to be held and administered by TWDB, as
provided by Section 15.603, except that the fund shall be used in
accordance with the Safe Drinking Water Act (SDWA) and shall be used to
provide financial assistance for certain purposes.  Authorizes TWDB to
establish accounts in the fund and sets forth types of accounts.  Sets
forth authorization provisions for financial assistance  from the
disadvantaged community account. Requires TWDB to determine the amount of
a loan which the political subdivision cannot repay.  Requires TWDB to
forgive repayment of that portion of the principal of the loan which it
determines the political subdivision cannot repay.  Prohibits financial
assistance from the disadvantaged community account from exceeding the
allowable percentage of the amount of the capitalization grant received by
the state as stipulated in SDWA.  

SECTION 6.17. Amends Sections 15.603(c) and (g), Water Code, to make
conforming and nonsubstantive changes. 

SECTION 6.18. Amends Section 341.031(a), Health and Safety Code, to delete
a requirement that public drinking water comply with the standards
established by the United States Public Health Service. 

SECTION 6.19.   Amends Chapter 341C, Health and Safety Code, by adding
Section 341.0315, as follows: 

Sec.  341.0315.  PUBLIC DRINKING WATER SUPPLY SYSTEM.  Requires TNRCC,  to
preserve the health, safety, and welfare, to ensure that public drinking
water supply systems meet certain requirements.  Requires TNRCC to
encourage and promote the development and use of regional and areawide
drinking water supply systems.  Requires each public drinking water supply
system to provide an adequate and safe drinking water supply. Requires the
supply to meet the requirements of Section 341.031 and TNRCC rules.
Requires TNRCC to consider compliance history in determining issuance of
new permits, renewal permits, and permit amendments for a public drinking
water system. 

SECTION 6.20. Amends Chapter 341C, Health and Safety Code, by amending
Section 341.035, and adding Sections 341.0351-341.0356, as follows: 

Sec.  341.035.  APPROVED PLANS REQUIRED FOR PUBLIC WATER SUPPLIES.
Prohibits a person from beginning construction of a public drinking water
supply system unless the executive director approves certain items.
Requires the prospective owner or operator of the system to submit certain
items to the executive director.  Sets forth actions the executive
director must take.  Requires the prospective owner or operator of the
proposed system to provide to TNRCC completed plans and specifications for
review and approval in accordance with TNRCC rules.  Provides that certain
persons are not required to file a business plan under Subsection (a) or
(b).  Deletes existing text regarding approval of plans. 

Sec.  341.0351.  New heading: NOTIFICATION OF SYSTEM CHANGES.
Redesignated from existing Section 341.035(b).  Makes a nonsubstantive
change. 


Sec.  341.0352.  New heading: ADVERTISED QUALITY OF WATER SUPPLY.
Redesignated from existing Section 341.035(c). 

Sec.  341.0353.  New heading: DRINKING WATER SUPPLY COMPARATIVE RATING
INFORMATION.  Redesignated from existing Section 341.035(d).  Makes
nonsubstantive changes. 

Sec.  341.0354.  New heading: HIGHWAY SIGNS FOR APPROVED SYSTEM RATING.
Redesignated from existing Section 341.035(e). 

Sec.  341.0355.  FINANCIAL ASSURANCE FOR CERTAIN SYSTEMS.  Authorizes
TNRCC to require the owner or operator of certain public drinking water
supply systems to take certain actions.  Requires, if TNRCC relies on rate
increases or customer surcharges as the form of financial assurance, such
funds to be deposited in an escrow account and released only with the
approval of TNRCC. 

Sec.  341.0356.  ORDER TO STOP OPERATIONS.  Requires a public water supply
system to stop operations on receipt of a written notification of the
executive director of TNRCC or an order of TNRCC issued under this
section.  Authorizes the executive director or TNRCC to order a public
water supply system to stop operations if certain criteria are met.
Authorizes a notification or order  to be delivered by facsimile, by
personal service, or by mail.  Provides that a water supply system subject
to notification or an order under this section, on written request, is
entitled to an opportunity to be heard by the commissioners at a TNRCC
meeting.  Prohibits the public water supply system from resuming
operations until TNRCC, the executive director, or a court authorizes
resumption. 

SECTION 6.21.   Amends Sections 341.047(a) and (b), Health and Safety
Code, to provide that a person commits an offense if the person begins
construction of, rather than establishes, a drinking water supply system
without TNRCC's approval, violates a provision of 341.0351 or 341.0352; or
fails to remove a sign as required by Section 341.0354.  Deletes a
provision that an offense under Subsection (a) is punishable by a fine of
not less than $100.  Makes conforming changes. 

SECTION 6.22.   Amends Sections 341.048(b)-(i), Health and Safety Code, to
require a person who causes, suffers, allows, or permits a violation under
this subchapter to be assessed a civil penalty of not less than $50 nor
more than $10,000, rather than $500, for each violation.  Deletes the
provision which establishes the penalties ascribed to subsequent
violations.  Makes conforming and nonsubstantive changes. 

SECTION 6.23.   Amends Section 341.049(a), Health and Safety Code, to make
a conforming change. 

ARTICLE 7.  WATER DATA COLLECTION AND DISSEMINATION  

SECTION 7.01.   Amends Section 16.012, Water Code, to require the
executive administrator, in cooperation with other entities of the state,
to guide the development of a statewide water resource data collection and
dissemination network.  Requires the board to facilitate access to basic
data and summary information concerning state water resources and provide
guidance required to access and understand Texas water resource data.
Requires the executive administrator to determine suitable, cost-effective
water supply alternatives on a regional basis; monitor the effects of
fresh water inflows upon the bays and estuaries of Texas; monitor instream
flows; lead a statewide effort, in coordination with federal, state, and
local governments and other interested parties, to develop a network for
collecting and disseminating water resource-related information; make
recommendations for optimizing its efficiency and effectiveness; make
basic data and summary information accessible to state agencies and other
interested persons; and cooperate with the Texas Agricultural Extension
Service to facilitate development and delivery of educational programs as
appropriate for rural and urban water users.  Requires the executive
administrator to consider advice from TPWD in performing certain duties.
Requires all entities of the state that collect or use water data to
cooperate with TWDB in the development of the network.  Sets forth
regulations for the development and use of a water availability model.
Makes conforming changes. 

SECTION 7.02.  Amends Section 16.021, Water Code, to provide that the
Texas Geographical Information Council (TGIC), rather than the Natural
Resources Information System Task Force, is created to provide strategic
planning and coordination in the acquisition and use of geographical data
and related technologies in the State of Texas.  Sets forth the method by
which entities will be designated as members of TGIC and select
representatives to serve on TGIC.  Requires the duties of the TGIC to
include providing guidance to the executive administrator in carrying out
duties and guidance to the Department of Information Resources in
developing rules.  Deletes the provision  regarding the composition of the
Natural Resources Information System Task Force.  Sets forth the terms by
which, under the guidance of TGIC, the executive administrator is required
to further develop the Texas Natural Resources Information System; make
recommendations to the Department of Information Resources; acquire and
disseminate natural resource and related socioeconomic data describing the
Texas-Mexico border region; and develop mutually compatible statewide
digital base maps depicting natural resources and man-made features.
Makes conforming and nonsubstantive changes. 

SECTION 7.03.   Provides that on September 1, 1997, the Texas Natural
Resources Information System Task Force and the Texas Geographic
Information Systems Planning Council are merged into the Texas
Geographical Information Council.  Requires all designated member agencies
of both predecessor entities to continue to serve as member agencies of
the Texas Geographical Information Council. 

ARTICLE 8.  REPEALER; EFFECTIVE DATE; SAVING; EMERGENCY

SECTION 8.01. Repealer: Section 11.028, Water Code (Exception).

SECTION 8.02.   (a)  Effective date:  September 1, 1997, except as
provided by Subsections (b)-(e) of this section. 

(b)  Provides that this section and Sections 2.03, 2.09, 2.10, 2.13, and
3.03 of this Act take effect immediately. 

(c)  Provides that Section 4.36 of this Act takes effect on the first day
of the first calender quarter beginning on or after the date that it may
take effect under Section 39, Article III, Texas Constitution.   

(d)  Establishes that the change in law made by Section 4.36 of this Act
to Section 151.318, Tax Code, does not affect taxes imposed before the
effective date of Section 4.36 of this Act. 

(e)  Provides that Sections 5.03 and 5.05-5.08 of this Act take effect on
the date on which the constitutional amendment proposed by __.J.R. No. __,
75th Legislature, Regular Session, 1997, takes effect.  Provides that if
the amendment is not approved by the voters, those sections have no
effect. 

SECTION 8.03. (a) Provides that the requirement of Section 341.035, Health
and Safety Code, as amended by Section 6.20 of this Act, that certain
persons must provide the executive director of TNRCC with a business plan,
applies only to the prospective owner or operator of a public drinking
water supply system for which construction begins on or after September 1,
1997. 

(b)  Makes application of Section 341.0355, Health and Safety Code, as
added by Section 6.20 of this Act, retroactive. 

SECTION 8.04. Makes application of this Act prospective.

SECTION 8.05.   Emergency clause.  

SUMMARY OF COMMITTEE CHANGES

SECTION 1.01.

Amends Section 16.051, Water Code, to set forth regulations regarding the
adoption of guidance principles.  Provides for the inclusion of
legislative recommendations in the state water plan. 

SECTION 1.02.

Amends Section 16.053-16.057, Water Code, to provide additional
regulations for the  development of regional water plans and water
planning.  Deletes existing Section 16.056. 

SECTION 1.03.

Amends Sections 11.1271 and 11.1272, Water Code, to prohibit the
requirement for a water conservation plan from resulting in the need for
an amendment to an existing permit, certified filing, or certificate of
adjudication.  Requires the Texas Natural Resource Conservation Commission
(TNRCC) to adopt rules establishing criteria and deadlines for submission
of water conservation plans.  Makes nonsubstantive changes. 

SECTION 1.04.

Amends Section 15.401, Water Code, to make nonsubstantive changes.

SECTION 1.07.

Amends Section 15.4061, Water Code, to make a nonsubstantive change.

SECTION 2.05.

Deletes proposed SECTION 2.05 and redesignates subsequent SECTIONS.

Amends Section 11.042, Water Code, to delete the requirement that TNRCC
prescribe rules for delivering water down banks and beds.  Requires
nothing in this section be construed to affect certain existing projects. 

SECTION 2.06.

Amends Section 11.046, Water Code, to provide additional regulations
regarding recirculation of water within a reservoir. 

SECTION 2.07.

Amends Section 11.085, Water Code, to provide new regulations regarding
the review of and action on an application for a new water right or
amended permit, certified filing, or certificate of adjudication.
Provides new regulations regarding compensation and mitigation for
interbasin transfers.  Prohibits a basin from being redesignated in order
to allow a transfer or diversion of water.  Makes nonsubstantive changes. 

SECTION 2.10.

Adds Section 11.142(a), Water Code, regarding the storage of water for
domestic and livestock purposes. 

SECTION 2.11.

Amends Section 11.177, Water Code, to provide additional regulations
regarding what constitutes reasonable diligence or a justified nonuse. 

SECTION 2.15.

Amends Section 15.7031, Water Code, to provide additional regulations
regarding the Texas Water Trust. 

SECTION 2.16.

Amends Section 15.704, Water Code, to make a nonsubstantive change.

SECTION 2.17.
 
Provides that this article, rather than section, does not apply to certain
applications. 

Requires nothing in this Act to affect the validity of any interbasin
transfer permitted or authorized before the effective date of this Act. 

SECTION 3.02.

Amends Section 11.0841, Water Code, to provide for the awarding of certain
costs of litigation. 

Amends Section 11.0842, Water Code, to provide additional regulations
regarding administrative penalties. 

Amends Section 11.0843, Water Code, to make nonsubstantive changes.

SECTION 3.03.

Amends Section 11.139, Water Code, to provide new regulations regarding
emergency authorizations. 

SECTION 3.06.

Amends Section 16.237, Water Code, to make nonsubstantive changes.

SECTION 4.01.

Amends Section 11.134(b), Water Code, to provide new regulations regarding
the granting of applications. 

SECTION 4.02.

Adds Section 11.1501, Water Code, regarding consideration and revision of
plans. 

Amends Section 11.151, Water Code, to make a nonsubstantive change.

SECTION 4.11.

Amends Section 35.007, Water Code, to change time period to be used in
identifying areas expected to experience groundwater problems. 

SECTION 4.13.

Amends Section 35.009, Water Code, to make a nonsubstantive change.

SECTION 4.20.

Amends Section 36.001, Water Code, to delete the definition of "standby
fee." 

SECTION 4.26.

Amends Section 36.1071, Water Code, to provide additional regulations
regarding management plans. 

Amends Section 36.1072, Water Code, require the Texas Water Development
Board (TWDB) to certify a management plan if the plan is administratively
complete within 60 days of receipt of the plan. 

SECTION 4.28.

 Amends Section 36.113, Water Code, to provide additional regulations
regarding permits for wells. 

SECTION 4.29.

Amends Section 36.1131, Water Code, to provide additional elements the
well permit may include. 

SECTION 4.31.

Amends Section 36.206, Water Code, to provide new regulations regarding
district fees. 

SECTION 4.32.

Amends Section 36.310, Water Code, to require a public auction of the
assets of a district upon dissolution by TNRCC, rather than the assets
escheating to the estate. 

SECTION 4.38.

Amends Subsection (b), to require the management plan to be submitted to
the TWDB rather than TNRCC. 

SECTION 5.03.

Amends Section 17.954, Water Code, to make nonsubstantive changes.

SECTION 5.10.

Adds SECTION 5.10, Sections 44.007-44.010, Agriculture Code, to provide
that certain monies in linked deposits be used to finance water
conservation projects.  Provide additional regulations regarding the
financing of water conservation projects.  Makes conforming and
nonsubstantive changes. 

SECTION 5.11.

Adds SECTION 5.11, Section 11.32, Tax Code, regarding water conservation
initiatives. 

SECTION 5.12.

Adds SECTION 5.12, Section 2155.44(d), Government Code, regarding the
purchase of vegetation for landscaping purposes. 

SECTION 6.16.

Amends Section 15.6041, Water Code, to make a nonsubstantive change.

SECTION 7.01.

Amends Section 16.012, Water Code, to provide new regulations regarding
water availability models.