By:  Brown                                      S.B. No. 1

         97S0149/2                            

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the development and management of the water resources

 1-2     of the state; providing penalties.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4                   ARTICLE 1.  DROUGHT RESPONSE MANAGEMENT

 1-5           SECTION 1.01.  Subchapter C, Chapter 16, Water Code, is

 1-6     amended by adding Section 16.060 to read as follows:

 1-7           Sec. 16.060.  STATE DROUGHT PLANNING.  (a)  The executive

 1-8     administrator shall prepare, coordinate, and oversee the

 1-9     development and implementation of a comprehensive state drought

1-10     plan.  The board is the state agency primarily responsible for

1-11     ongoing drought and water supply monitoring, technical and

1-12     financial assistance for drought planning, and administrative

1-13     support of committee functions.

1-14           (b)  The state drought plan shall provide for the initial

1-15     development and updating of effective regional and local drought

1-16     response plans.

1-17           (c)  The board may provide cost-sharing financial assistance

1-18     from the research and planning fund to assist local governments in

1-19     the development of regional and local drought response plans.

1-20           (d)  The drought planning and monitoring committee is

1-21     created.  The committee is composed of one representative from each

1-22     of the following entities, appointed by the administrative head of

1-23     that entity:

 2-1                 (1)  the board;

 2-2                 (2)  the commission;

 2-3                 (3)  the Parks and Wildlife Department;

 2-4                 (4)  the division of emergency management in the office

 2-5     of the governor;

 2-6                 (5)  the Department of Agriculture; and

 2-7                 (6)  any other entity designated by the governor.

 2-8           (e)  The representative of the board shall serve as chair of

 2-9     the committee.

2-10           (f)  The committee shall be responsible for:

2-11                 (1)  the assessment and public reporting of drought

2-12     monitoring and water supply information;

2-13                 (2)  advising the office of the governor on significant

2-14     drought concerns;

2-15                 (3)  recommending specific provisions for a defined

2-16     state response to drought-related disasters for inclusion in the

2-17     state emergency management plan;

2-18                 (4)  recommending specific provisions for water

2-19     management strategies to be used during droughts and included in

2-20     approved regional water management plans under Section 16.059;

2-21                 (5)  advising the board on preparation of the state

2-22     drought plan;

2-23                 (6)  ensuring effective coordination among state,

2-24     local, and federal agencies in drought-response planning; and

2-25                 (7)  establishing guidelines for the development of

97S0149/2                                                          

 3-1     effective regional and local drought response plans, taking into

 3-2     account the provisions of water conservation plans developed under

 3-3     Section 11.1271 and drought contingency plans developed under

 3-4     Section 11.1272.

 3-5           (g)  In performing its duties under this section, the drought

 3-6     planning and monitoring committee shall consider the following

 3-7     factors when determining whether a drought exists for the purposes

 3-8     of this section:

 3-9                 (1)  meteorological conditions and forecasts;

3-10                 (2)  hydrological conditions and forecasts;

3-11                 (3)  water use and demand forecasts;

3-12                 (4)  water supply conditions and forecasts;

3-13                 (5)  the potential impacts of the water shortage on the

3-14     public health, safety, and welfare and on economic and

3-15     environmental resources; and

3-16                 (6)  other factors deemed appropriate by the committee.

3-17           SECTION 1.02.  Subchapter D, Chapter 11, Water Code, is

3-18     amended by amending Section 11.1271 and adding Section 11.1272 to

3-19     read as follows:

3-20           Sec. 11.1271.  ADDITIONAL REQUIREMENTS:  WATER CONSERVATION

3-21     PLANS.  (a)  The commission may require the formulation and

3-22     submission of a water conservation plan and the adoption of

3-23     reasonable water conservation measures, as defined by Subdivision

3-24     (8)(B), Section 11.002, of this code.

3-25           (b)  The commission may require the holder of an existing

97S0149/2                                                          

 4-1     permit, certified filing, or certificate of adjudication for the

 4-2     appropriation of surface water in the amount of 200 acre-feet a

 4-3     year or more to develop and implement a water conservation plan

 4-4     that adopts reasonable water conservation measures, as defined by

 4-5     Subdivision (8)(B), Section 11.002, of this code.

 4-6           Sec. 11.1272.  ADDITIONAL REQUIREMENTS:  DROUGHT CONTINGENCY

 4-7     PLANS FOR CERTAIN APPLICANTS AND WATER RIGHT HOLDERS.  The

 4-8     commission shall by rule require wholesale and retail public water

 4-9     suppliers to develop drought contingency plans to be implemented

4-10     during periods of water shortages caused by drought.

4-11           SECTION 1.03.  Subchapter C, Chapter 11, Water Code, is

4-12     amended by adding Sections 11.0841, 11.0842, and 11.0843 to read as

4-13     follows:

4-14           Sec. 11.0841.  PRIVATE CIVIL REMEDY.  Nothing in this chapter

4-15     affects the right of any private corporation or individual to

4-16     pursue any available common-law remedy to enforce a right or to

4-17     prevent or seek redress or compensation for the violation of a

4-18     right or otherwise redress an injury.

4-19           Sec. 11.0842.  ADMINISTRATIVE PENALTY.  (a)  If a person

4-20     violates this chapter or a rule or order adopted or a water right

4-21     issued under this chapter, the commission may assess an

4-22     administrative penalty against that person as provided by this

4-23     section.

4-24           (b)  The penalty may be in an amount not to exceed $10,000

4-25     for each day the person is in violation of this chapter or the

97S0149/2                                                          

 5-1     rule, order, or water right.  Each day a violation continues may be

 5-2     considered a separate violation for purposes of penalty assessment.

 5-3           (c)  In determining the amount of the penalty, the commission

 5-4     shall consider:

 5-5                 (1)  the nature, circumstances, extent, duration, and

 5-6     gravity of the prohibited acts, with special emphasis on the

 5-7     impairment of existing water rights or the hazard or potential

 5-8     hazard created to the health, safety, or welfare of the public;

 5-9                 (2)  the impact of the violation on the instream uses,

5-10     water quality, aquatic and wildlife habitat, or beneficial

5-11     freshwater inflows to bays and estuaries;

5-12                 (3)  with respect to the alleged violator:

5-13                       (A)  the history and extent of previous

5-14     violations;

5-15                       (B)  the degree of culpability, including whether

5-16     the violation was attributable to mechanical or electrical failures

5-17     and whether the violation could have been reasonably anticipated

5-18     and avoided;

5-19                       (C)  demonstrated good faith, including actions

5-20     taken by the alleged violator to rectify the cause of the violation

5-21     and to compensate affected persons;

5-22                       (D)  any economic benefit gained through the

5-23     violation; and

5-24                       (E)  the amount necessary to deter future

5-25     violations; and

97S0149/2                                                          

 6-1                 (4)  any other matters that justice may require.

 6-2           (d)  If, after examination of a possible violation and the

 6-3     facts surrounding that possible violation, the executive director

 6-4     concludes that a violation has occurred, the executive director may

 6-5     issue a preliminary report stating the facts on which that

 6-6     conclusion was based, recommending that an administrative penalty

 6-7     under this section be imposed on the person charged, and

 6-8     recommending the amount of the penalty.  The executive director

 6-9     shall base the recommended amount of the proposed penalty on the

6-10     factors provided by Subsection (c) of this section and shall

6-11     analyze each factor for the benefit of the commission.

6-12           (e)  Not later than the 10th day after the date on which the

6-13     report is issued, the executive director shall give written notice

6-14     of the report to the person charged with the violation.  The notice

6-15     shall include a brief summary of the charges, a statement of the

6-16     amount of the penalty recommended, and a statement of the right of

6-17     the person charged to a hearing on the occurrence of the violation,

6-18     the amount of the penalty, or both the occurrence of the violation

6-19     and the amount of the penalty.

6-20           (f)  Not later than the 20th day after the date on which

6-21     notice is received, the person charged may either give to the

6-22     commission written consent to the executive director's report,

6-23     including the recommended penalty, or make a written request for a

6-24     hearing.

6-25           (g)  If the person charged with the violation consents to the

97S0149/2                                                          

 7-1     penalty recommended by the executive director or fails to timely

 7-2     respond to the notice, the commission by order shall either assess

 7-3     the penalty or order a hearing to be held on the findings and

 7-4     recommendations in the executive director's report.  If the

 7-5     commission assesses the penalty recommended by the report, the

 7-6     commission shall give written notice of its decision to the person

 7-7     charged.

 7-8           (h)  If the person charged requests or the commission orders

 7-9     a hearing, the commission shall call a hearing and give notice of

7-10     the hearing.  As a result of the hearing, the commission by order

7-11     either may find that a violation has occurred and may assess a

7-12     penalty, may find that a violation has occurred but that no penalty

7-13     should be assessed, or may find that no violation has occurred.

7-14     All proceedings under this subsection are subject to Chapter 2001,

7-15     Government Code.  In making any penalty decision, the commission

7-16     shall analyze each of the factors provided by Subsection (c) of

7-17     this section.

7-18           (i)  The commission shall give notice of its decision to the

7-19     person charged, and if the commission finds that a violation has

7-20     occurred and assesses an administrative penalty, the commission

7-21     shall give written notice to the person charged of its findings, of

7-22     the amount of the penalty, and of the person's right to judicial

7-23     review of the commission's order.  If the commission is required to

7-24     give notice of a penalty under this subsection or Subsection (g) of

7-25     this section, the commission shall file notice of its decision in

97S0149/2                                                          

 8-1     the Texas Register not later than the 10th day after the date on

 8-2     which the decision is adopted.

 8-3           (j)  Within the 30-day period immediately following the day

 8-4     on which the commission's order is final, as provided by Subchapter

 8-5     F, Chapter 2001, Government Code, the person charged with the

 8-6     penalty shall:

 8-7                 (1)  pay the penalty in full; or

 8-8                 (2)  pay the amount of the penalty and file a petition

 8-9     for judicial review contesting the occurrence of the violation, the

8-10     amount of the penalty, or both the occurrence of the violation and

8-11     the amount of the penalty; or

8-12                 (3)  without paying the amount of the penalty, file a

8-13     petition for judicial review contesting the occurrence of the

8-14     violation, the amount of the penalty, or both the occurrence of the

8-15     violation and the amount of the penalty.

8-16           (k)  Within the 30-day period, a person who acts under

8-17     Subsection (j)(3) of this section may:

8-18                 (1)  stay enforcement of the penalty by:

8-19                       (A)  paying the amount of the penalty to the

8-20     court for placement in an escrow account; or

8-21                       (B)  giving to the court a supersedeas bond that

8-22     is approved by the court for the amount of the penalty and that is

8-23     effective until all judicial review of the commission's order is

8-24     final; or

8-25                 (2)  request the court to stay enforcement of the

97S0149/2                                                          

 9-1     penalty by:

 9-2                       (A)  filing with the court a sworn affidavit of

 9-3     the person stating that the person is financially unable to pay the

 9-4     amount of the penalty and is financially unable to give the

 9-5     supersedeas bond; and

 9-6                       (B)  giving a copy of the affidavit to the

 9-7     commission by certified mail.

 9-8           (l)  If the commission receives a copy of an affidavit under

 9-9     Subsection (k)(2) of this section, it may file with the court

9-10     within five days after the date the copy is received a contest to

9-11     the affidavit.  The court shall hold a hearing on the facts alleged

9-12     in the affidavit as soon as practicable and shall stay the

9-13     enforcement of the penalty on finding that the alleged facts are

9-14     true.  The person who files an affidavit has the burden of proving

9-15     that the person is financially unable to pay the amount of the

9-16     penalty and to give a supersedeas bond.

9-17           (m)  If the person does not pay the amount of the penalty and

9-18     the enforcement of the penalty is not stayed, the commission may

9-19     refer the matter to the attorney general for collection of the

9-20     amount of the penalty.

9-21           (n)  Judicial review of the order or decision of the

9-22     commission assessing the penalty shall be under the substantial

9-23     evidence rule and shall be instituted by filing a petition with a

9-24     district court in Travis County, as provided by Subchapter G,

9-25     Chapter 2001, Government Code.

97S0149/2                                                          

 10-1          (o)  A penalty collected under this section shall be

 10-2    deposited in the state treasury to the credit of the general

 10-3    revenue fund.

 10-4          (p)  Notwithstanding any other provision to the contrary, the

 10-5    commission may compromise, modify, or remit, with or without

 10-6    condition, any penalty imposed under this section.

 10-7          (q)  Payment of an administrative penalty under this section

 10-8    shall be full and complete satisfaction of the violation for which

 10-9    the administrative penalty is assessed and shall preclude any other

10-10    civil or criminal penalty for the same violation.

10-11          Sec. 11.0843.  FIELD CITATION.  (a)  Upon witnessing or

10-12    receiving competent evidence of a violation of this chapter or a

10-13    rule or order adopted or a water right issued under this chapter,

10-14    the executive director or a watermaster may issue the alleged

10-15    violator a field citation alleging that a violation has occurred

10-16    and providing the alleged violator the option of either:

10-17                (1)  without admitting to or denying the alleged

10-18    violation, paying an administrative penalty in accordance with a

10-19    predetermined penalty amount corresponding to the type of violation

10-20    and taking remedial action as provided in the citation; or

10-21                (2)  requesting a hearing on the alleged violation in

10-22    accordance with Section 11.0842 of this code.

10-23          (b)  A penalty collected by a watermaster under this section

10-24    shall be remitted to the commission to pay the necessary expenses

10-25    and compensation of the watermaster who issued the citation.  At

97S0149/2                                                          

 11-1    the end of the fiscal year any unspent money remitted to the

 11-2    commission by a watermaster under this subsection shall be

 11-3    deposited in the state treasury to the credit of the general

 11-4    revenue fund.  A penalty collected by the executive director under

 11-5    this section shall be deposited in the state treasury to the credit

 11-6    of the general revenue fund.

 11-7          SECTION 1.04.  Section 11.139, Water Code, is amended to read

 11-8    as follows:

 11-9          Sec. 11.139.  EMERGENCY AUTHORIZATIONS [PERMITS].

11-10    (a)  Except as provided by Section 11.148 of this code, the [The]

11-11    commission may grant an emergency permit, order, or amendment to an

11-12    existing water right [for the diversion and use of water] for an

11-13    initial [a] period of not more than 120 [30] days if it finds that

11-14    emergency conditions exist which present an imminent threat to

11-15    [threaten] the public health, safety, and welfare or the

11-16    environment and which override the necessity to comply with

11-17    established statutory procedures and there are no feasible

11-18    practicable alternatives to the emergency authorization.  Such

11-19    emergency action may be renewed once for not longer than 60 days.

11-20          (b)  A person desiring to obtain an emergency authorization

11-21    under this section shall submit to the commission a sworn

11-22    application containing the following information:

11-23                (1)  a description of the condition of emergency

11-24    justifying the granting of the emergency authorization;

11-25                (2)  a statement setting forth facts which support the

97S0149/2                                                          

 12-1    findings required under this section;

 12-2                (3)  an estimate of the dates on which the proposed

 12-3    authorization should begin and end;

 12-4                (4)  a description of the action sought and the

 12-5    activity proposed to be allowed, mandated, or prohibited; and

 12-6                (5)  any other statements or information required by

 12-7    the commission.

 12-8          (c)  If the commission finds the applicant's statement made

 12-9    under Subsection (b) of this section to be correct, the commission

12-10    may grant emergency authorizations under this section without

12-11    notice and hearing or with such notice and hearing as the

12-12    commission considers practicable under the circumstances.

12-13          (d)  If the commission grants an emergency authorization

12-14    under this section without a hearing, the authorization shall fix a

12-15    time and place for a hearing to be held before the commission.  The

12-16    hearing shall be held as soon after the emergency authorization is

12-17    granted as is practicable.

12-18          (e)  At the hearing, the commission shall affirm, modify, or

12-19    set aside the emergency authorization.  Any hearing on an emergency

12-20    authorization shall be conducted in accordance with Chapter 2001,

12-21    Government Code, and rules of the commission.  Any set of

12-22    commission rules concerning a hearing or an emergency authorization

12-23    must include provisions for the presentation of evidence by the

12-24    applicant under oath, the presentation of rebuttal evidence, and

12-25    the cross-examination of witnesses.

97S0149/2                                                          

 13-1          (f)  If an imminent threat to the public health, safety, and

 13-2    welfare or the environment exists which requires emergency action

 13-3    before the commission can take action as provided by Subsections

 13-4    (a) through (c) of this section and there are no feasible

 13-5    alternatives, the executive director may grant an emergency

 13-6    authorization.  If the executive director issues an emergency

 13-7    authorization under this subsection, the commission shall hold a

 13-8    hearing as provided for in Subsection (d) of this section as soon

 13-9    as practicable but in no event later than 10 days after issuance of

13-10    the authorization to affirm, modify, or set aside the

13-11    authorization.  The requirements of Subsection (b) of this section

13-12    shall be satisfied by the applicant on or before such hearing date.

13-13          (g)  The requirements of Section 11.132 of this code relating

13-14    to the time for notice, newspaper notice, and method of giving a

13-15    person notice do not apply to a hearing held on an application for

13-16    an emergency authorization under this section, but such general

13-17    notice of the hearing shall be given as the commission, under

13-18    Subsections (c) and (e) of this section, considers practicable

13-19    under the circumstances.

13-20          (h)  The commission may grant an emergency authorization

13-21    under this section for the temporary transfer and use of all or

13-22    part of a surface water right for other than domestic or municipal

13-23    use to a retail or wholesale water supplier for domestic or

13-24    municipal use.  In addition to the requirements contained in

13-25    Subsection (b) of this section, the commission may direct that the

97S0149/2                                                          

 14-1    applicant will timely pay the amounts for which the applicant may

 14-2    be potentially liable under this subsection and will fully

 14-3    indemnify and hold harmless the state, the executive director, and

 14-4    the commission from any and all liability for the authorization

 14-5    sought.  The commission may order bond or other surety in a form

 14-6    acceptable to the commission as a condition for such emergency

 14-7    authorization.

 14-8          (i)  The person granted an emergency authorization under

 14-9    Subsection (h) of this section is liable to the owner from whom the

14-10    use is transferred for the fair market value of the water

14-11    transferred as well as for any damages proximately caused by the

14-12    transfer of use.  If, within 60 days of the termination of the

14-13    authorization, the parties do not agree on the amount due, or if

14-14    full payment is not made, either party may file a complaint with

14-15    the commission to determine the amount due.  The commission shall

14-16    adopt rules establishing a dispute resolution procedure for a

14-17    complaint filed under this subsection.  After exhausting all

14-18    administrative remedies under this subsection, an aggrieved party

14-19    may file suit to recover or determine the amount due in a district

14-20    court in the county where the diversion point or points of the

14-21    surface water right which use is being transferred is located.  The

14-22    prevailing party in a suit filed under this subsection is entitled

14-23    to recover court costs and reasonable attorney's fees.

14-24          (j)  [An emergency permit may be granted for a period of not

14-25    more than 30 days, and no extension or additional emergency permit

97S0149/2                                                          

 15-1    may be granted at the expiration of the original permit.]

 15-2          [(c)  An emergency permit may be granted under this section

 15-3    without the necessity to comply with statutory and other procedures

 15-4    required for granting other permits issued by the commission.]

 15-5          [(d)]  The commission may prescribe rules and adopt fees

 15-6    which are necessary to carry out the provisions of this section.

 15-7          (k) [(e)]  An emergency authorization [permit] does not vest

 15-8    in the grantee [permittee] any right to the diversion, impoundment,

 15-9    or [and] use of water and shall expire and be cancelled in

15-10    accordance with its terms.

15-11          SECTION 1.05.  Subsection (c), Section 12.052, Water Code, is

15-12    amended to read as follows:

15-13          (c)  If the owner of a dam that is required to be

15-14    constructed, reconstructed, repaired, or removed in order to comply

15-15    with the rules and orders promulgated under Subsection (a) of this

15-16    section wilfully fails or refuses to comply within the 30-day

15-17    period following the date of the commission's order to do so or if

15-18    a person wilfully fails to comply with any rule or other order

15-19    issued by the commission under this section within the 30-day

15-20    period following the effective date of the order, he is liable to a

15-21    penalty of not more than $25,000 [$1,000] a day for each day he

15-22    continues to violate this section.  The state may recover the

15-23    penalty by suit brought for that purpose in the district court of

15-24    Travis County.

15-25          SECTION 1.06.  Subchapter C, Chapter 12, Water Code, is

97S0149/2                                                          

 16-1    amended by adding Sections 12.053 and 12.054 to read as follows:

 16-2          Sec. 12.053.  ADMINISTRATIVE PENALTY.  (a)  If a person

 16-3    violates a rule or order adopted under Section 12.052 of this code,

 16-4    the commission may assess an administrative penalty against that

 16-5    person as provided by this section.

 16-6          (b)  The penalty may be in an amount not to exceed $25,000

 16-7    for each day the person is in violation of the rule or order.  Each

 16-8    day a violation continues may be considered a separate violation

 16-9    for purposes of penalty assessment.

16-10          (c)  In determining the amount of the penalty, the commission

16-11    shall consider:

16-12                (1)  the nature, circumstances, extent, duration, and

16-13    gravity of the prohibited acts, with special emphasis on the hazard

16-14    or potential hazard created to the health, safety, or welfare of

16-15    the public;

16-16                (2)  with respect to the alleged violator:

16-17                      (A)  the history and extent of previous

16-18    violations;

16-19                      (B)  the degree of culpability, including whether

16-20    the violation was attributable to mechanical or electrical failures

16-21    and whether the violation could have been reasonably anticipated

16-22    and avoided;

16-23                      (C)  demonstrated good faith, including actions

16-24    taken by the alleged violator to rectify the cause of the violation

16-25    and to compensate affected persons;

97S0149/2                                                          

 17-1                      (D)  any economic benefit gained through the

 17-2    violation; and

 17-3                      (E)  the amount necessary to deter future

 17-4    violations; and

 17-5                (3)  any other matters that justice may require.

 17-6          (d)  If, after examination of a possible violation and the

 17-7    facts surrounding that possible violation, the executive director

 17-8    concludes that a violation has occurred, the executive director may

 17-9    issue a preliminary report stating the facts on which that

17-10    conclusion was based, recommending that an administrative penalty

17-11    under this section be imposed on the person charged, and

17-12    recommending the amount of the penalty.  The executive director

17-13    shall base the recommended amount of the proposed penalty on the

17-14    factors provided by Subsection (c) of this section and shall

17-15    analyze each factor for the benefit of the commission.

17-16          (e)  Not later than the 10th day after the date on which the

17-17    report is issued, the executive director shall give written notice

17-18    of the report to the person charged with the violation.  The notice

17-19    shall include a brief summary of the charges, a statement of the

17-20    amount of the penalty recommended, and a statement of the right of

17-21    the person charged to a hearing on the occurrence of the violation,

17-22    the amount of the penalty, or both the occurrence of the violation

17-23    and the amount of the penalty.

17-24          (f)  Not later than the 20th day after the date on which

17-25    notice is received, the person charged may either give to the

97S0149/2                                                          

 18-1    commission written consent to the executive director's report,

 18-2    including the recommended penalty, or make a written request for a

 18-3    hearing.

 18-4          (g)  If the person charged with the violation consents to the

 18-5    penalty recommended by the executive director or fails to timely

 18-6    respond to the notice, the commission by order shall either assess

 18-7    the penalty or order a hearing to be held on the findings and

 18-8    recommendations in the executive director's report.  If the

 18-9    commission assesses the penalty recommended by the report, the

18-10    commission shall give written notice of its decision to the person

18-11    charged.

18-12          (h)  If the person charged requests or the commission orders

18-13    a hearing, the commission shall call a hearing and give notice of

18-14    the hearing.  As a result of the hearing, the commission by order

18-15    either may find that a violation has occurred and may assess a

18-16    penalty, may find that a violation has occurred but that no penalty

18-17    should be assessed, or may find that no violation has occurred.

18-18    All proceedings under this subsection are subject to Chapter 2001,

18-19    Government Code.  In making any penalty decision, the commission

18-20    shall analyze each of the factors provided by Subsection (c) of

18-21    this section.

18-22          (i)  The commission shall give notice of its decision to the

18-23    person charged, and if the commission finds that a violation has

18-24    occurred and assesses a penalty, the commission shall give written

18-25    notice to the person charged of its findings, of the amount of the

97S0149/2                                                          

 19-1    penalty, and of the person's right to judicial review of the

 19-2    commission's order.  If the commission is required to give notice

 19-3    of a penalty under this subsection or Subsection (g) of this

 19-4    section, the commission shall file notice of its decision in the

 19-5    Texas Register not later than the 10th day after the date on which

 19-6    the decision is adopted.

 19-7          (j)  Within the 30-day period immediately following the day

 19-8    on which the commission's order is final, as provided by Subchapter

 19-9    F, Chapter 2001, Government Code, the person charged with the

19-10    penalty shall:

19-11                (1)  pay the penalty in full; or

19-12                (2)  pay the amount of the penalty and file a petition

19-13    for judicial review contesting the occurrence of the violation, the

19-14    amount of the penalty, or both the occurrence of the violation and

19-15    the amount of the penalty; or

19-16                (3)  without paying the amount of the penalty, file a

19-17    petition for judicial review contesting the occurrence of the

19-18    violation, the amount of the penalty, or both the occurrence of the

19-19    violation and the amount of the penalty.

19-20          (k)  Within the 30-day period, a person who acts under

19-21    Subsection (j)(3) of this section may:

19-22                (1)  stay enforcement of the penalty by:

19-23                      (A)  paying the amount of the penalty to the

19-24    court for placement in an escrow account; or

19-25                      (B)  giving to the court a supersedeas bond that

97S0149/2                                                          

 20-1    is approved by the court for the amount of the penalty and that is

 20-2    effective until all judicial review of the commission's order is

 20-3    final; or

 20-4                (2)  request the court to stay enforcement of the

 20-5    penalty by:

 20-6                      (A)  filing with the court a sworn affidavit of

 20-7    the person stating that the person is financially unable to pay the

 20-8    amount of the penalty and is financially unable to give the

 20-9    supersedeas bond; and

20-10                      (B)  giving a copy of the affidavit to the

20-11    commission by certified mail.

20-12          (l)  If the commission receives a copy of an affidavit under

20-13    Subsection (k)(2) of this section, it may file with the court

20-14    within five days after the date the copy is received a contest to

20-15    the affidavit.  The court shall hold a hearing on the facts alleged

20-16    in the affidavit as soon as practicable and shall stay the

20-17    enforcement of the penalty on finding that the alleged facts are

20-18    true.  The person who files an affidavit has the burden of proving

20-19    that the person is financially unable to pay the amount of the

20-20    penalty and to give a supersedeas bond.

20-21          (m)  If the person does not pay the amount of the penalty and

20-22    the enforcement of the penalty is not stayed, the commission may

20-23    refer the matter to the attorney general for collection of the

20-24    amount of the penalty.

20-25          (n)  Judicial review of the order or decision of the

97S0149/2                                                          

 21-1    commission assessing the penalty shall be under the substantial

 21-2    evidence rule and shall be instituted by filing a petition with a

 21-3    district court in Travis County, as provided by Subchapter G,

 21-4    Chapter 2001, Government Code.

 21-5          (o)  A penalty collected under this section shall be

 21-6    deposited in the state treasury to the credit of the general

 21-7    revenue fund.

 21-8          (p)  Notwithstanding any other provision to the contrary, the

 21-9    commission may compromise, modify, or remit, with or without

21-10    condition, any penalty imposed under this section.

21-11          (q)  Payment of an administrative penalty under this section

21-12    shall be full and complete satisfaction of the violation for which

21-13    the administrative penalty is assessed and shall preclude any other

21-14    civil or criminal penalty for the same violation.

21-15          Sec. 12.054.  PRIVATE CIVIL REMEDY.  Nothing in this chapter

21-16    affects the right of any private corporation or individual to

21-17    pursue any available common-law remedy to enforce a right or to

21-18    prevent or seek redress or compensation for the violation of a

21-19    right or otherwise redress an injury.

21-20          SECTION 1.07.  Section 16.236, Water Code, is amended to read

21-21    as follows:

21-22          Sec. 16.236.  CONSTRUCTION OF LEVEE WITHOUT APPROVAL OF

21-23    PLANS; LEVEE SAFETY.  (a)  No person may construct, attempt to

21-24    construct, cause to be constructed, maintain, or cause to be

21-25    maintained any levee or other such improvement on, along, or near

97S0149/2                                                          

 22-1    any stream of this state that is subject to floods, freshets, or

 22-2    overflows so as to control, regulate, or otherwise change the

 22-3    floodwater of the stream without first obtaining approval of the

 22-4    plans by the commission.

 22-5          (b)  The commission shall make and enforce rules and orders

 22-6    and shall perform all other acts necessary to provide for the safe

 22-7    construction, maintenance, repair, and removal of levees located in

 22-8    this state.

 22-9          (c)  Rules and orders of the commission shall be adopted or

22-10    issued only after proper notice and hearing as provided in the

22-11    rules of the commission.

22-12          (d)  If the owner of a levee that is required to be

22-13    constructed, reconstructed, repaired, or removed to comply with the

22-14    rules and orders promulgated under this section wilfully fails or

22-15    refuses to comply within the 30-day period following the date of an

22-16    order of the commission requiring such action or compliance or if a

22-17    person wilfully fails to comply with any rule or order issued by

22-18    the commission under this section within the 30-day period

22-19    following the effective date of the order, the person is liable for

22-20    a penalty of not more than $25,000 a day for each day the person

22-21    continues to violate this section.  The state may recover the

22-22    penalty by suit brought for that purpose in a district court of

22-23    Travis County.

22-24          (e)  If the commission determines that the existing condition

22-25    of a levee is creating or will cause extensive or severe property

97S0149/2                                                          

 23-1    damage or economic loss to others or is posing an immediate and

 23-2    serious threat to human life or health and that other procedures

 23-3    available to the commission to remedy or prevent such property

 23-4    damage or economic loss will result in unreasonable delay, the

 23-5    commission may issue an emergency order, either mandatory or

 23-6    prohibitory in nature, directing the owner of the levee to repair,

 23-7    modify, maintain, dewater, or remove the levee which the commission

 23-8    determines is unsafe.  The emergency order may be issued without

 23-9    notice to the levee owner or with notice the commission considers

23-10    practicable under the circumstances.  The notice does not have to

23-11    comply with Chapter 2001, Government Code.

23-12          (f)  If the commission issues an emergency order under

23-13    authority of this section without notice to the levee owner, the

23-14    commission shall fix a time and place for a hearing, to be held as

23-15    soon as practicable, to affirm, modify, or set aside the emergency

23-16    order.  The notice does not have to comply with Chapter 2001,

23-17    Government Code.  If the nature of the commission's action requires

23-18    further proceedings, those proceedings shall be conducted, as

23-19    appropriate, under Chapter 2001, Government Code.

23-20          (g)  Nothing in this section or in rules or orders adopted by

23-21    the commission shall be construed to relieve an owner or operator

23-22    of a levee of the legal duties, obligations, or liabilities

23-23    incident to ownership or operation.

23-24          (h)  Any person who violates any provision of Subsection (a)

23-25    of this section is guilty of a Class C misdemeanor [and upon

97S0149/2                                                          

 24-1    conviction is punishable by a fine of not more than $100].  A

 24-2    separate offense is committed each day a structure constructed in

 24-3    violation of this section is maintained.

 24-4          (i)  Subsection (a) of this [(c)  At the request of the

 24-5    executive director, the attorney general shall file suit in a

 24-6    district court of Travis County to enjoin any violation or

 24-7    threatened violation of this section.  In the suit, the attorney

 24-8    general may seek to have the illegal levee or other improvement

 24-9    removed and the preexisting conditions restored and may also

24-10    collect civil penalties of up to $100 a day for each day a

24-11    violation occurs.]

24-12          [(d)  This] section does not apply to:

24-13                (1)  dams permitted by the commission or recognized as

24-14    valid by final decree in any proceeding begun under Subchapter G,

24-15    Chapter 11, of this code;

24-16                (2)  dams authorized by Section 11.142 of this code;

24-17                (3)  a levee or other improvement within the corporate

24-18    limits of a city or town provided:  (a) plans for the construction

24-19    or maintenance or both must be approved by the city or town as a

24-20    condition precedent to starting the project and (b) the city or

24-21    town requires that such plans be in substantial compliance with

24-22    rules and standards adopted by the commission; or

24-23                (4)  a levee or other improvement within the boundaries

24-24    of any political subdivision which has qualified for the National

24-25    Flood Insurance Program as authorized by the National Flood

97S0149/2                                                          

 25-1    Insurance Act of 1968 (Title 42, U.S.C., Sections 4001-4127)

 25-2    provided:  (a) plans for the construction or maintenance or both

 25-3    must be approved by the political subdivision which is

 25-4    participating in the national flood insurance program as a

 25-5    condition precedent to starting the project and (b) the political

 25-6    subdivision requires that such plans be in substantial compliance

 25-7    with rules and standards adopted by the commission;

 25-8                (5)  projects implementing soil and water conservation

 25-9    practices set forth in a conservation plan with a landowner or

25-10    operator and approved by the governing board of a soil and water

25-11    conservation district organized under the State Soil Conservation

25-12    Law, as amended (Article 165a-4, Vernon's Texas Civil Statutes),

25-13    provided that the governing board finds the practices do not

25-14    significantly affect stream flooding conditions on, along, or near

25-15    a state stream.

25-16          (j) [(e)]  On projects located within the corporate limits of

25-17    a city or town or within the boundaries of any political

25-18    subdivision which are exempt from the provisions of Subsection (a)

25-19    of this section by Subdivision (3) or (4) of Subsection (i) of this

25-20    section [(d) above], any person whose property is located outside

25-21    of the corporate limits of such city or town or of the boundaries

25-22    of such a political subdivision and whose property is affected or

25-23    potentially affected by the effect of the project on the

25-24    floodwaters of the stream may appeal the decision of such political

25-25    subdivision.  The appeal shall be in writing and shall specify the

97S0149/2                                                          

 26-1    grounds therefor and a copy shall be sent by certified mail to the

 26-2    project applicant and to the city or town or such political

 26-3    subdivision.  The timely filing of such an appeal with the

 26-4    executive director suspends the decision of the city or town or

 26-5    political subdivision until a final decision is rendered by the

 26-6    commission.  The executive director shall review the complaint and

 26-7    investigate the facts surrounding the nature of the complaint.  If

 26-8    the executive director finds that the complaint is frivolous or

 26-9    nonmeritorious or made solely for purposes of harassment or delay,

26-10    then he shall dismiss the appeal.  Otherwise, the executive

26-11    director shall refer the appeal to the commission which shall after

26-12    due notice hold a hearing to determine whether the project should

26-13    be approved using the standards established by the commission and

26-14    shall hear such appeal de novo under the procedural rules

26-15    established by the commission for other reclamation projects.

26-16          SECTION 1.08.  Subchapter G, Chapter 16, Water Code, is

26-17    amended by adding Sections 16.237 and 16.238 to read as follows:

26-18          Sec. 16.237.  ADMINISTRATIVE PENALTY.  (a)  If a person

26-19    violates a commission rule or order adopted under Section 16.236 of

26-20    this code, the commission may assess an administrative penalty

26-21    against that person as provided by this section.

26-22          (b)  The penalty may be in an amount not to exceed $25,000

26-23    for each day the person is in violation of the rule or order.  Each

26-24    day a violation continues may be considered a separate violation

26-25    for purposes of penalty assessment.

97S0149/2                                                          

 27-1          (c)  In determining the amount of the penalty, the commission

 27-2    shall consider:

 27-3                (1)  the nature, circumstances, extent, duration, and

 27-4    gravity of the prohibited acts, with special emphasis on the hazard

 27-5    or potential hazard created to the health, safety, or welfare of

 27-6    the public;

 27-7                (2)  with respect to the alleged violator:

 27-8                      (A)  the history and extent of previous

 27-9    violations;

27-10                      (B)  the degree of culpability, including whether

27-11    the violation was attributable to mechanical or electrical failures

27-12    and whether the violation could have been reasonably anticipated

27-13    and avoided;

27-14                      (C)  demonstrated good faith, including actions

27-15    taken by the alleged violator to rectify the cause of the violation

27-16    and to compensate affected persons;

27-17                      (D)  any economic benefit gained through the

27-18    violation; and

27-19                      (E)  the amount necessary to deter future

27-20    violations; and

27-21                (3)  any other matters that justice may require.

27-22          (d)  If, after examination of a possible violation and the

27-23    facts surrounding that possible violation, the executive director

27-24    concludes that a violation has occurred, the executive director may

27-25    issue a preliminary report stating the facts on which that

97S0149/2                                                          

 28-1    conclusion was based, recommending that an administrative penalty

 28-2    under this section be imposed on the person charged, and

 28-3    recommending the amount of the penalty.  The executive director

 28-4    shall base the recommended amount of the proposed penalty on the

 28-5    factors provided by Subsection (c) of this section and shall

 28-6    analyze each factor for the benefit of the commission.

 28-7          (e)  Not later than the 10th day after the date on which the

 28-8    report is issued, the executive director shall give written notice

 28-9    of the report to the person charged with the violation.  The notice

28-10    shall include a brief summary of the charges, a statement of the

28-11    amount of the penalty recommended, and a statement of the right of

28-12    the person charged to a hearing on the occurrence of the violation,

28-13    the amount of the penalty, or both the occurrence of the violation

28-14    and the amount of the penalty.

28-15          (f)  Not later than the 20th day after the date on which

28-16    notice is received, the person charged may either give to the

28-17    commission written consent to the executive director's report,

28-18    including the recommended penalty, or make a written request for a

28-19    hearing.

28-20          (g)  If the person charged with the violation consents to the

28-21    penalty recommended by the executive director or fails to timely

28-22    respond to the notice, the commission by order shall either assess

28-23    that penalty or order a hearing to be held on the findings and

28-24    recommendations in the executive director's report.  If the

28-25    commission assesses the penalty recommended by the report, the

97S0149/2                                                          

 29-1    commission shall give written notice of its decision to the person

 29-2    charged.

 29-3          (h)  If the person charged requests or the commission orders

 29-4    a hearing, the commission shall call a hearing and give notice of

 29-5    the hearing.  As a result of the hearing, the commission by order

 29-6    either may find that a violation has occurred and may assess a

 29-7    penalty, may find that a violation has occurred but that no penalty

 29-8    should be assessed, or may find that no violation has occurred.

 29-9    All proceedings under this subsection are subject to Chapter 2001,

29-10    Government Code.  In making any penalty decision, the commission

29-11    shall analyze each of the factors provided by Subsection (c) of

29-12    this section.

29-13          (i)  The commission shall give notice of its decision to the

29-14    person charged, and if the commission finds that a violation has

29-15    occurred and assesses an administrative penalty, the commission

29-16    shall give written notice to the person charged of its findings, of

29-17    the amount of the penalty, and of the person's right to judicial

29-18    review of the commission's order.  If the commission is required to

29-19    give notice of a penalty under this subsection or Subsection (g) of

29-20    this section, the commission shall file notice of its decision in

29-21    the Texas Register not later than the 10th day after the date on

29-22    which the decision is adopted.

29-23          (j)  Within the 30-day period immediately following the day

29-24    on which the commission's order is final, as provided by Subchapter

29-25    F, Chapter 2001, Government Code, the person charged with the

97S0149/2                                                          

 30-1    penalty shall:

 30-2                (1)  pay the penalty in full; or

 30-3                (2)  pay the amount of the penalty and file a petition

 30-4    for judicial review contesting the occurrence of the violation, the

 30-5    amount of the penalty, or both the occurrence of the violation and

 30-6    the amount of the penalty; or

 30-7                (3)  without paying the amount of the penalty, file a

 30-8    petition for judicial review contesting the occurrence of the

 30-9    violation, the amount of the penalty, or both the occurrence of the

30-10    violation and the amount of the penalty.

30-11          (k)  Within the 30-day period, a person who acts under

30-12    Subsection (j)(3) of this section may:

30-13                (1)  stay enforcement of the penalty by:

30-14                      (A)  paying the amount of the penalty to the

30-15    court for placement in an escrow account; or

30-16                      (B)  giving to the court a supersedeas bond that

30-17    is approved by the court for the amount of the penalty and that is

30-18    effective until all judicial review of the commission's order is

30-19    final; or

30-20                (2)  request the court to stay enforcement of the

30-21    penalty by:

30-22                      (A)  filing with the court a sworn affidavit of

30-23    the person stating that the person is financially unable to pay the

30-24    amount of the penalty and is financially unable to give the

30-25    supersedeas bond; and

97S0149/2                                                          

 31-1                      (B)  giving a copy of the affidavit to the

 31-2    commission by certified mail.

 31-3          (l)  If the commission receives a copy of an affidavit under

 31-4    Subsection (k)(2) of this section, it may file with the court

 31-5    within five days after the date the copy is received a contest to

 31-6    the affidavit.  The court shall hold a hearing on the facts alleged

 31-7    in the affidavit as soon as practicable and shall stay the

 31-8    enforcement of the penalty on finding that the alleged facts are

 31-9    true.  The person who files an affidavit has the burden of proving

31-10    that the person is financially unable to pay the amount of the

31-11    penalty and to give a supersedeas bond.

31-12          (m)  If the person does not pay the amount of the penalty and

31-13    the enforcement of the penalty is not stayed, the commission may

31-14    refer the matter to the attorney general for collection of the

31-15    amount of the penalty.

31-16          (n)  Judicial review of the order or decision of the

31-17    commission assessing the penalty shall be under the substantial

31-18    evidence rule and shall be instituted by filing a petition with a

31-19    district court in Travis County, as provided by Subchapter G,

31-20    Chapter 2001, Government Code.

31-21          (o)  A penalty collected under this section shall be

31-22    deposited in the state treasury to the credit of the general

31-23    revenue fund.

31-24          (p)  Notwithstanding any other provision to the contrary, the

31-25    commission may compromise, modify, or remit, with or without

97S0149/2                                                          

 32-1    condition, any penalty imposed under this section.

 32-2          (q)  Payment of an administrative penalty under this section

 32-3    shall be full and complete satisfaction of the violation for which

 32-4    the administrative penalty is assessed and shall preclude any other

 32-5    civil or criminal penalty for the same violation.

 32-6          Sec. 16.238.  PRIVATE CIVIL REMEDY.  Nothing in this chapter

 32-7    affects the right of any private corporation or individual to

 32-8    pursue any available common-law remedy to enforce a right or to

 32-9    prevent or seek redress or compensation for the violation of a

32-10    right or otherwise redress an injury.

32-11          ARTICLE 2.  WATER MANAGEMENT, MARKETING, AND TRANSFERS

32-12          SECTION 2.01.  Section 791.026, Government Code, is amended

32-13    to read as follows:

32-14          Sec. 791.026.  CONTRACTS FOR WATER SUPPLY AND WASTEWATER

32-15    TREATMENT FACILITIES.  (a)  A municipality, district, or river

32-16    authority of this state may contract with another municipality,

32-17    district, or river authority of this state to obtain or provide

32-18    part or all of:

32-19                (1)  water supply or wastewater treatment facilities;

32-20    or

32-21                (2)  a lease or operation of water supply facilities or

32-22    wastewater treatment facilities.

32-23          (b)  The contract may provide that the municipality,

32-24    district, or river authority obtaining one of the services may not

32-25    obtain those services from a source other than a contracting party,

97S0149/2                                                          

 33-1    except as provided by the contract.

 33-2          (c)  If a contract includes a term described by Subsection

 33-3    (b), payments made under the contract are the paying party's

 33-4    operating expenses for its water supply system, wastewater

 33-5    treatment facilities, or both.

 33-6          (d)  The contract may:

 33-7                (1)  contain terms and extend for any period on which

 33-8    the parties agree; [and]

 33-9                (2)  require the purchaser to develop alternative or

33-10    replacement supplies prior to the expiration date of the contract

33-11    and may provide for enforcement of such terms by court order; and

33-12                (3)  provide that it will continue in effect until

33-13    bonds specified by the contract and any refunding bonds issued to

33-14    pay those bonds are paid.

33-15          (e)  Where a contract sets forth explicit expiration

33-16    provisions, no continuation of the service obligation will be

33-17    implied.

33-18          (f)  Tax revenue may not be pledged to the payment of amounts

33-19    agreed to be paid under the contract.

33-20          (g) [(f)]  The powers granted by this section prevail over a

33-21    limitation contained in another law.

33-22          SECTION 2.02.  Section 11.002, Water Code, is amended by

33-23    adding Subdivisions (9) and (10) to read as follows:

33-24                (9)  "Developed water" means:

33-25                      (A)  groundwater that is in a watercourse or

97S0149/2                                                          

 34-1    stream, that would not be in the watercourse or stream but for the

 34-2    efforts of the developer, and that is intended for subsequent

 34-3    diversion and use by the developer; and

 34-4                      (B)  surface water obtained through an approved

 34-5    interbasin transfer of water that is in a watercourse or stream,

 34-6    that would not be in the watercourse or stream but for the efforts

 34-7    of the developer, and that is intended for subsequent diversion and

 34-8    use by the developer.

 34-9                (10)  "Surplus water" means water in excess of the

34-10    initial or continued beneficial use of the appropriator and not

34-11    consumed or used beneficially for the purpose authorized by law.

34-12          SECTION 2.03.  Subsection (e), Section 11.023, Water Code, is

34-13    amended to read as follows:

34-14          (e)  The amount of water appropriated for each purpose

34-15    mentioned in this section shall be specifically appropriated for

34-16    that purpose, subject to the preferences prescribed in Section

34-17    11.024 of this code.  The commission may authorize appropriation of

34-18    a single amount or volume of water for more than one purpose of

34-19    use.  In the event that a single amount or volume of water is

34-20    appropriated for more than one purpose of use, the total amount of

34-21    water actually diverted for all of the authorized purposes may not

34-22    exceed the total amount of water appropriated.

34-23          SECTION 2.04.  Section 11.036, Water Code, is amended to read

34-24    as follows:

34-25          Sec. 11.036.  CONSERVED OR STORED WATER:  SUPPLY CONTRACT.

97S0149/2                                                          

 35-1    (a)  A person, association of persons, corporation, or water

 35-2    improvement or irrigation district having in possession and control

 35-3    any storm water, floodwater, or rainwater that is conserved or

 35-4    stored as authorized by this chapter may contract to supply the

 35-5    water to any person, association of persons, corporation, or water

 35-6    improvement or irrigation district having the right to acquire use

 35-7    of the water.

 35-8          (b)  The price and terms of the contract shall be just and

 35-9    reasonable and without discrimination, and the contract is subject

35-10    to the same revision and control as provided in this code for other

35-11    water rates and charges.  If the contract sets forth explicit

35-12    expiration provisions, no continuation of the service obligation

35-13    will be implied.

35-14          (c)  The terms of a contract may expressly provide that the

35-15    person using the stored or conserved water is required to develop

35-16    alternative or replacement supplies prior to the expiration of the

35-17    contract and may further provide for enforcement of such terms by

35-18    court order.

35-19          (d)  If any person uses the stored or conserved water without

35-20    first entering into a contract with the party that conserved or

35-21    stored it, the user shall pay for the use at a rate determined by

35-22    the commission to be just and reasonable, subject to court review

35-23    as in other cases.

35-24          SECTION 2.05.  Subsection (a), Section 11.041, Water Code, is

35-25    amended to read as follows:

97S0149/2                                                          

 36-1          (a)  Any person entitled to receive or use water from any

 36-2    canal, ditch, flume, lateral, dam, reservoir, or lake or from any

 36-3    conserved or stored supply may present to the commission a written

 36-4    petition showing:

 36-5                (1)  that he is entitled to receive or use the water;

 36-6                (2)  that he is willing to comply with all reasonable

 36-7    contractual provisions;

 36-8                (3)  that he is willing and able to pay a just and

 36-9    reasonable price for the water;

36-10                (4) [(3)]  that the party owning or controlling the

36-11    water supply has water not contracted to others and available for

36-12    the petitioner's use; and

36-13                (5) [(4)]  that the party owning or controlling the

36-14    water supply fails or refuses to supply the available water to the

36-15    petitioner, or that the price or rental demanded for the available

36-16    water is not reasonable and just or is discriminatory.

36-17          SECTION 2.06.  Section 11.042, Water Code, is amended to read

36-18    as follows:

36-19          Sec. 11.042.  DELIVERING WATER DOWN BANKS AND BEDS.

36-20    (a)  Under rules prescribed by the commission, a person,

36-21    association of persons, corporation, or water improvement or

36-22    irrigation district supplying stored or conserved water under

36-23    contract as provided in this chapter may use the bank and bed of

36-24    any flowing natural stream in the state to convey the water from

36-25    the place of storage to the place of use or to the diversion plant

97S0149/2                                                          

 37-1    of the appropriator.  The commission shall prescribe rules for this

 37-2    purpose.

 37-3          (b)  A person who wishes to convey developed water in a

 37-4    watercourse or stream must obtain the prior approval of the

 37-5    commission through a bed  and banks authorization.  Such

 37-6    authorization shall ensure that an unlawful appropriation of water

 37-7    does not occur by allowing only the amount of developed water put

 37-8    into the watercourse or stream to be diverted, less carriage

 37-9    losses.  Developed water discharged into a watercourse or stream

37-10    must also meet all applicable water quality standards, and the

37-11    water and its discharge and conveyance including diversion rates

37-12    and location point may not otherwise cause adverse environmental

37-13    impacts.  Authorizations under this section and water quality

37-14    authorizations may be approved in a consolidated permit proceeding.

37-15          (c)  A person who has discharged groundwater into a

37-16    watercourse or stream and who subsequently wishes to divert and use

37-17    such water must first obtain authorization for the diversion and

37-18    use from the commission subject to special conditions as necessary

37-19    to protect existing water rights, instream uses, and freshwater

37-20    inflows to bays and estuaries.

37-21          SECTION 2.07.  Section 11.046, Water Code, is amended to read

37-22    as follows:

37-23          Sec. 11.046.  RETURN UNUSED WATER.  (a)  A person who takes

37-24    or diverts water from a watercourse or [running] stream for the

37-25    purposes authorized by this code shall conduct surplus water back

97S0149/2                                                          

 38-1    to the watercourse or stream from which it was taken if the water

 38-2    can be returned by gravity flow or mechanical means and it is

 38-3    reasonably practicable to do so.

 38-4          (b)  In granting an application for a water right, the

 38-5    commission may include conditions in the water right providing for

 38-6    the return of surplus water, in a specific amount or percentage of

 38-7    water diverted, and the return point on the watercourse or stream

 38-8    as necessary to protect senior downstream water rights or provide

 38-9    flows for instream uses or bays and estuaries.

38-10          (c)  Except as specifically provided otherwise in the water

38-11    right, water appropriated under a water right may, prior to its

38-12    release into a watercourse or stream, be beneficially used and

38-13    reused by the water right holder for the purposes and locations of

38-14    use provided in the water right.  Once water has been diverted

38-15    under a water right and then returned to a watercourse or stream,

38-16    however, it is considered surplus water and therefore subject to

38-17    appropriation by others unless expressly provided otherwise in the

38-18    water right.

38-19          SECTION 2.08.  Section 11.085, Water Code, is amended to read

38-20    as follows:

38-21          Sec. 11.085.  INTERBASIN [INTERWATERSHED] TRANSFERS.  (a)  No

38-22    person may take or divert any state [of the] water from a river

38-23    basin [of the ordinary flow, underflow, or storm flow of any

38-24    stream, watercourse, or watershed] in this state and transfer such

38-25    water to [into] any other river basin [natural stream, watercourse,

97S0149/2                                                          

 39-1    or watershed to the prejudice of any person or property situated

 39-2    within the watershed from which the water is proposed to be taken

 39-3    or diverted.]

 39-4          [(b)  No person may transfer water from one watershed to

 39-5    another] without first applying for and receiving a water right or

 39-6    an amendment to a water right [permit] from the commission [to do

 39-7    so.  Before issuing such a permit, the commission shall hold a

 39-8    hearing to determine the rights that might be affected by the

 39-9    transfer.  The commission shall give notice and hold the hearing in

39-10    the manner prescribed by its procedural rules].

39-11          (b)  Prior to taking action on an application for an

39-12    interbasin transfer, at least one public meeting to receive

39-13    comments shall be held in both the basin of origin of the water

39-14    proposed for transfer and the basin receiving water from the

39-15    proposed transfer.  Any person may present relevant information and

39-16    data at the meeting on the criteria which the commission is to

39-17    consider related to the interbasin transfer.

39-18          (c)  In addition to the public meetings required by

39-19    Subsection (b) of this section, the commission shall hold an

39-20    evidentiary hearing, in accordance with commission rules and

39-21    applicable state law, if the application is contested and an

39-22    evidentiary hearing is required.  The commission shall give notice

39-23    and hold the evidentiary hearing in the manner prescribed by its

39-24    procedural rules.

39-25          (d)  Notice of an application for an interbasin transfer

97S0149/2                                                          

 40-1    shall be mailed to the following:

 40-2                (1)  all water right holders in the basin of origin;

 40-3                (2)  each county judge of a county located in whole or

 40-4    in part in the basin of origin; and

 40-5                (3)  each mayor of a city with a population of 1,000 or

 40-6    more located in whole or in part in the basin of origin.

 40-7          (e)  The applicant shall cause the notice of application for

 40-8    an interbasin transfer to be published once a week for two

 40-9    consecutive weeks in one or more newspapers having general

40-10    circulation in each county located in whole or in part in the basin

40-11    of origin.  The published notice may not be smaller than 96.8

40-12    square centimeters or 15 square inches with the shortest dimension

40-13    at least 7.6 centimeters or three inches.  The notice of

40-14    application and public meetings shall be combined in the mailed and

40-15    published notices.

40-16          (f)  The applicant shall pay the cost of notice required to

40-17    be provided under this section.  The commission by rule may

40-18    establish procedures for payment of those costs.

40-19          (g)  In addition to other requirements of this code relating

40-20    to the review of and action on an application for a new or amended

40-21    water right, the commission shall weigh the effects of the proposed

40-22    transfer on the basin of origin and the receiving basin by

40-23    considering:

40-24                (1)  the need for the water in the basin of origin and

40-25    in the proposed receiving basin based on the period for which the

97S0149/2                                                          

 41-1    water supply is requested, but not more than 50 years, and

 41-2    identified in a needs assessment or a regional water management

 41-3    plan which addresses the following for each basin:

 41-4                      (A)  the availability of feasible and practicable

 41-5    alternative supplies to the water proposed for transfer and their

 41-6    related economic and environmental impacts as compared to the

 41-7    potential economic and environmental impacts of the transfer;

 41-8                      (B)  the amount and purposes of use for which

 41-9    water is needed;

41-10                      (C)  evidence that reasonable diligence is and

41-11    will be used to avoid waste, achieve water conservation, and

41-12    implement drought contingency measures;

41-13                      (D)  evidence of reasonable diligence to put the

41-14    water proposed for transfer to beneficial use; and

41-15                      (E)  the projected economic impact that is

41-16    reasonably expected to occur if the water proposed for transfer is

41-17    used in each basin;

41-18                (2)  the intended use by both basins of the water

41-19    proposed for transfer against the preferences for use set forth in

41-20    Section 11.024 of this code;

41-21                (3)  the actual impacts of the proposed transfer on

41-22    existing instream uses, water quality, aquatic and riparian

41-23    habitat, and bays and estuaries that must be assessed under

41-24    Sections 11.147, 11.150, and 11.152 of this code in the basin of

41-25    origin and the receiving basin, and if the water sought to be

97S0149/2                                                          

 42-1    transferred is currently authorized to be used under an existing

 42-2    water right, such impacts shall only be considered in relation to

 42-3    that portion of the water right proposed for transfer and shall be

 42-4    based on historical uses of the water right for which amendment is

 42-5    sought;

 42-6                (4)  proposed mitigation or compensation, if any, to

 42-7    the basin of origin by the applicant;

 42-8                (5)  the applicant's or intended water user's diligence

 42-9    in pursuing feasible and practicable alternative water supplies

42-10    within the receiving basin and the sufficiency of the applicant's

42-11    or intended water user's water conservation efforts; and

42-12                (6)  for an amendment to an existing water right, the

42-13    continued need to use the water for the original purposes that were

42-14    identified as requiring such water under the application for the

42-15    original water right.

42-16          (h)  The commission may grant, in whole or in part, an

42-17    application for an interbasin transfer only to the extent that the

42-18    detriments to the basin of origin during the proposed transfer

42-19    period are less than the benefits to the receiving basin during the

42-20    proposed transfer period.  The commission may grant new or amended

42-21    water rights under this section with or without specific terms or

42-22    periods of use and with specific conditions under which a transfer

42-23    of water may occur.

42-24          (i)  This section does not apply to:

42-25                (1)  a proposed transfer or cumulative transfers of

97S0149/2                                                          

 43-1    less than 5,000 acre-feet of water per annum from the same water

 43-2    right; or

 43-3                (2)  a request for an emergency transfer of water; or

 43-4                (3)  a proposed transfer from a basin to its adjoining

 43-5    coastal basin.

 43-6          (j)  If the transfer of water is based on a contractual sale

 43-7    of water, the new or amended water right authorizing the transfer

 43-8    shall contain a condition for a term or period not greater than the

 43-9    contract term.

43-10          (k)  The parties to a contract for an interbasin transfer may

43-11    include provisions for compensation and mitigation.

43-12          (l)  For the purposes of this section, a basin is delineated

43-13    as provided in the state water plan in accordance with Section

43-14    16.051 of this code.

43-15          (m) [(c)]  A person who takes or diverts water in violation

43-16    of this section is guilty of a misdemeanor and upon conviction is

43-17    punishable by a fine of not [less than $100 nor] more than $10,000

43-18    [$500] or by confinement in the county jail for not more than six

43-19    months.

43-20          (n) [(d)]  A person commits a separate offense each day he

43-21    continues to take or divert water in violation of this section.

43-22          SECTION 2.09.  Subsection (a), Section 11.124, Water Code, is

43-23    amended to read as follows:

43-24          (a)  An application to appropriate unappropriated state water

43-25    must:

97S0149/2                                                          

 44-1                (1)  be in writing and sworn to;

 44-2                (2)  contain the name and post-office address of the

 44-3    applicant;

 44-4                (3)  identify the source of water supply;

 44-5                (4)  state the nature and purposes of the proposed use

 44-6    or uses and the amount of water to be used for each purpose;

 44-7                (5)  state the location and describe the proposed

 44-8    facilities;

 44-9                (6)  state the time within which the proposed

44-10    construction is to begin; and

44-11                (7)  state the time required for the application of

44-12    water to the proposed use or uses.

44-13          SECTION 2.10.  Subsection (b), Section 11.135, Water Code, is

44-14    amended to read as follows:

44-15          (b)  The permit shall be in writing and attested by the seal

44-16    of the commission, and it shall contain substantially the following

44-17    information:

44-18                (1)  the name of the person to whom the permit is

44-19    issued;

44-20                (2)  the date the permit is issued;

44-21                (3)  the date the original application was filed;

44-22                (4)  the use or purpose for which the appropriation is

44-23    to be made;

44-24                (5)  the amount or volume of water authorized to be

44-25    appropriated for each purpose; if use of the appropriated water is

97S0149/2                                                          

 45-1    authorized for multiple purposes, the permit shall contain a

 45-2    special condition limiting the total amount of water that may

 45-3    actually be diverted for all of the purposes to the amount of water

 45-4    appropriated;

 45-5                (6)  a general description of the source of supply from

 45-6    which the appropriation is proposed to be made;

 45-7                (7)  the time within which construction or work must

 45-8    begin and the time within which it must be completed; and

 45-9                (8)  any other information the commission prescribes.

45-10          SECTION 2.11.  Sections 11.176 and 11.177, Water Code, are

45-11    amended to read as follows:

45-12          Sec. 11.176.  HEARING.  (a)  Except as provided by Subsection

45-13    (b) of this section, the [The] commission shall hold a hearing and

45-14    shall give the holder of the permit, certified filing, or

45-15    certificate of adjudication and other interested persons an

45-16    opportunity to be heard and to present evidence on any matter

45-17    pertinent to the questions at issue.

45-18          (b)  A hearing on the cancellation of a water right as

45-19    provided by this chapter is unnecessary if the right to such

45-20    hearing is expressly waived by the affected water right holder.

45-21          (c)  A water right for a term does not vest in the water

45-22    right holder any right to the diversion, impoundment, or use of

45-23    water for longer than the term of the water right and shall expire

45-24    and be cancelled in accordance with its terms without further need

45-25    for notice or hearing.

97S0149/2                                                          

 46-1          Sec. 11.177.  COMMISSION FINDING; ACTION.  (a)  At the

 46-2    conclusion of the hearing, the commission shall cancel the permit,

 46-3    certified filing, or certificate of adjudication in whole or in

 46-4    part to the extent that it finds that:

 46-5                (1)  the water or any portion of the water appropriated

 46-6    under the permit, certified filing, or certificate of adjudication

 46-7    has not been put to an authorized beneficial use during the 10-year

 46-8    period; and

 46-9                (2)  the holder has not used reasonable diligence in

46-10    applying the water or the unused portion of the water to an

46-11    authorized beneficial use or is otherwise unjustified in the

46-12    nonuse[; and]

46-13                [(3)  the holder has not been justified in the nonuse

46-14    or does not then have a bona fide intention of putting the water or

46-15    the unused portion of the water to an authorized beneficial use

46-16    within a reasonable time after the hearing].

46-17          (b)  In determining what constitutes reasonable diligence or

46-18    a justified nonuse [and a reasonable time] as used in Subsection

46-19    (a)(2) [(a)(3)] of this section, the commission shall give

46-20    consideration to:

46-21                (1)  whether sufficient water is available in the

46-22    source of supply to meet all or part of the appropriation during

46-23    the 10-year period of nonuse;

46-24                (2)  whether the nonuse is justified by the holder's

46-25    participation in the federal Conservation Reserve Program or a

97S0149/2                                                          

 47-1    similar governmental program as provided by Section 11.173(b)(1) of

 47-2    this code;

 47-3                (3)  whether the water right was obtained to meet

 47-4    demonstrated long-term public water supply needs as evidenced by a

 47-5    water management plan developed by the holder or consistent with

 47-6    projections of future water needs contained in the state water

 47-7    plan;

 47-8                (4)  whether the holder has complied with an approved

 47-9    water management plan as provided by Section 11.173(b)(2) of this

47-10    code; or

47-11                (5)  whether the water right has been deposited into

47-12    the Texas Water Bank as provided by Section 15.704 of this code

47-13    [the expenditures made or obligations incurred by the holder in

47-14    connection with the permit, certified filing, or certificate of

47-15    adjudication;]

47-16                [(2)  the purpose to which the water is to be applied;]

47-17                [(3)  the priority of the purpose;]

47-18                [(4)  the amount of time usually necessary to put water

47-19    to a beneficial use for the same purpose when diligently developed;

47-20    and]

47-21                [(5)  whether at all times during the 10-year period

47-22    there was rainfall adequate to enable the use of all or part of the

47-23    water authorized to be appropriated under the permit, certified

47-24    filing, or certificate of adjudication].

47-25          SECTION 2.12.  Subsection (a), Section 15.704, Water Code, is

97S0149/2                                                          

 48-1    amended to read as follows:

 48-2          (a)  A [Up to 50 percent of a] water right may be deposited

 48-3    in the water bank for an initial term of up to 10 years, during

 48-4    which time the water right is exempt from cancellation by the

 48-5    commission under the terms of Subchapter E of Chapter 11 of this

 48-6    code.  A water right is exempt from cancellation under this

 48-7    subsection only once even if it has been transferred or

 48-8    redeposited.

 48-9          SECTION 2.13.  All permits approved by the Texas Natural

48-10    Resource Conservation Commission before the effective date of this

48-11    Act that allow the multiple use of the appropriation of a specific

48-12    amount of water and which are no longer subject to appeal are

48-13    validated in all respects as if they originally had been legally

48-14    authorized or accomplished.

48-15            ARTICLE 3.  SURFACE WATER AND GROUNDWATER SUPPLIES

48-16          SECTION 3.01.  Subsection (b), Section 11.134, Water Code, is

48-17    amended to read as follows:

48-18          (b)  The commission shall grant the application only if:

48-19                (1)  the application conforms to the requirements

48-20    prescribed by this chapter and is accompanied by the prescribed

48-21    fee;

48-22                (2)  unappropriated water is available in the source of

48-23    supply;

48-24                (3)  the proposed appropriation:

48-25                      (A)  contemplates the application of water to any

97S0149/2                                                          

 49-1    beneficial use;

 49-2                      (B)  does not impair existing water rights or

 49-3    vested riparian rights; [and]

 49-4                      (C)  is not detrimental to the public welfare;

 49-5    and

 49-6                      (D)  addresses a water supply need in a manner

 49-7    that is consistent with the state water plan or an approved

 49-8    regional water management plan for the area in which the proposed

 49-9    appropriation is located, unless the commission determines that

49-10    conditions warrant waiver of this requirement; and

49-11                (4)  the applicant has provided evidence that

49-12    reasonable diligence will be used to avoid waste and achieve water

49-13    conservation as defined by Subdivision (8)(B), Section 11.002, of

49-14    this code.

49-15          SECTION 3.02.  Subchapter D, Chapter 11, Water Code, is

49-16    amended by adding Section 11.151 to read as follows:

49-17          Sec. 11.151.  EFFECTS OF PERMITS ON GROUNDWATER.  In

49-18    considering an application for a permit to store, take, or divert

49-19    surface water, the commission may assess the effects, if any, on

49-20    groundwater.

49-21          SECTION 3.03.  Section 11.153, Water Code, is amended by

49-22    amending the section heading and Subsection (d) to read as follows:

49-23          Sec. 11.153.  [PILOT] PROJECTS FOR STORAGE OF APPROPRIATED

49-24    WATER IN AQUIFERS.

49-25          (d)  The commission shall only issue a [A] final order

97S0149/2                                                          

 50-1    granting a permit or amendment to a permit authorizing the storage

 50-2    of appropriated water in aquifers for subsequent beneficial use

 50-3    where completed pilot projects or historically demonstrated

 50-4    projects have been shown to be feasible under the criteria provided

 50-5    in Section 11.154(c) and (d)[, other than for the pilot projects

 50-6    authorized by this section, may not be issued before June 1, 1999].

 50-7          SECTION 3.04.  Subsections (a), (b), (c), and (e), Section

 50-8    11.154, Water Code, are amended to read as follows:

 50-9          (a)  An application filed with the commission to undertake a

50-10    [pilot] project under Section 11.153 must include:

50-11                (1)  the information required for an application for a

50-12    permit or permit amendment to appropriate state water;

50-13                (2)  all information required for an application for a

50-14    permit for a Class V injection well without requiring a separate

50-15    hearing or notice; and

50-16                (3)  a map or plat showing the injection facility and

50-17    the aquifer in which the water will be stored.

50-18          (b)  If the application is for a permit or permit amendment

50-19    to store appropriated water in a groundwater [an underground water]

50-20    reservoir or a subdivision of a groundwater [an underground water]

50-21    reservoir, as defined by Chapter 36 [52], that is under the

50-22    jurisdiction of a groundwater [an underground water] conservation

50-23    district:

50-24                (1)  the applicant shall:

50-25                      (A)  provide a copy of the application to each

97S0149/2                                                          

 51-1    groundwater [underground water] conservation district that has

 51-2    jurisdiction over the reservoir or subdivision;

 51-3                      (B)  cooperate with each district [the districts]

 51-4    that has [have] jurisdiction over the reservoir or subdivision to

 51-5    ensure compliance with the rules of each district;

 51-6                      (C)  cooperate with each district that has

 51-7    jurisdiction over the reservoir or subdivision to develop rules

 51-8    regarding the injection, storage, and withdrawal of appropriated

 51-9    water stored in the aquifer; and

51-10                      (D)  comply with the rules governing the

51-11    injection, storage, and [or] withdrawal of appropriated water

51-12    stored in the reservoir or subdivision that are adopted by each [a]

51-13    district that has jurisdiction over the reservoir or subdivision;

51-14    and

51-15                (2)  the commission shall require that any agreement

51-16    the applicant reaches with a district that has jurisdiction over

51-17    the reservoir or subdivision regarding the terms for the injection,

51-18    storage, and withdrawal of appropriated water be included as a

51-19    condition of the permit or permit amendment.

51-20          (c)  On [completion of a pilot project and] receipt of an

51-21    appropriate application for a permit or an amendment to an existing

51-22    permit from an applicant with a completed pilot or historically

51-23    demonstrated project, the commission shall evaluate the success of

51-24    the pilot or historically demonstrated project for purposes of

51-25    issuing a final order granting a permit or permit amendment

97S0149/2                                                          

 52-1    authorizing the storage of appropriated water incident to a

 52-2    beneficial use.  The commission shall consider whether:

 52-3                (1)  the introduction of water into the aquifer will

 52-4    alter the physical, chemical, or biological quality of native

 52-5    groundwater to a degree that the introduction would:

 52-6                      (A)  render groundwater produced from the aquifer

 52-7    harmful or detrimental to people, animals, vegetation, or property;

 52-8    or

 52-9                      (B)  require treatment of the groundwater to a

52-10    greater extent than the native groundwater requires before being

52-11    applied to that beneficial use;

52-12                (2)  the water stored in the receiving aquifer can be

52-13    successfully harvested from the aquifer for beneficial use; and

52-14                (3)  the permit holder has provided evidence that

52-15    reasonable diligence will be used to protect the water stored in

52-16    the receiving aquifer from unauthorized withdrawals to the extent

52-17    necessary to maximize the permit holder's ability to retrieve and

52-18    beneficially use the stored water without experiencing unreasonable

52-19    loss of appropriated water.

52-20          (e)  A permit to store appropriated water in a groundwater

52-21    [an underground water] reservoir or subdivision, as defined by

52-22    Chapter 36 [52], shall provide as a condition to the permit that

52-23    the permit holder shall:

52-24                (1)  register the permit holder's injection and

52-25    recovery wells with a groundwater [an underground water]

97S0149/2                                                          

 53-1    conservation district that has jurisdiction over the reservoir or

 53-2    subdivision, if any; and

 53-3                (2)  each calendar month, provide the district, if any,

 53-4    with a written report showing for the previous calendar month:

 53-5                      (A)  the amount of water injected for storage;

 53-6    and

 53-7                      (B)  the amount of water recaptured for use.

 53-8          SECTION 3.05.  Subsection (b), Section 11.155, Water Code, is

 53-9    amended to read as follows:

53-10          (b)  The board shall make other studies, investigations, and

53-11    surveys of the aquifers in the state as it considers necessary to

53-12    determine the occurrence, quantity, quality, and availability of

53-13    other aquifers in which water may be stored and subsequently

53-14    retrieved for beneficial use.  The board shall undertake the

53-15    studies, investigations, and surveys in the following order of

53-16    priority:

53-17                (1)  the aquifers identified in Section 11.153(a);

53-18                (2)  areas designated by the commission as "priority

53-19    groundwater management [critical] areas" under Section 35.008

53-20    [52.053]; and

53-21                (3)  other areas of the state in a priority to be

53-22    determined by the board's ranking of where the greatest need

53-23    exists.

53-24          SECTION 3.06.  Subsection (b), Section 11.173, Water Code, is

53-25    amended to read as follows:

97S0149/2                                                          

 54-1          (b)  A permit, certified filing, or certificate of

 54-2    adjudication or a portion of a permit, certified filing, or

 54-3    certificate of adjudication is exempt from cancellation under

 54-4    Subsection (a) of this section:

 54-5                (1)  to the extent of the owner's participation in the

 54-6    Conservation Reserve Program authorized by the Food Security Act,

 54-7    Pub.L. No. 99-198, Secs. 1231-1236, 99 Stat. 1354, 1509-1514 (1985)

 54-8    or a similar governmental program; or

 54-9                (2)  if any portion of the water authorized to be used

54-10    pursuant to a permit, certified filing, or certificate of

54-11    adjudication has been used in accordance with a water management

54-12    plan approved by the commission or a regional water management plan

54-13    approved pursuant to Section 16.059 of this code.

54-14          SECTION 3.07.  Subdivision (6), Section 15.001, Water Code,

54-15    is amended to read as follows:

54-16                (6)  "Project" means:

54-17                      (A)  any undertaking or work to conserve, convey,

54-18    and develop surface or subsurface water resources in the state, to

54-19    provide for the maintenance and enhancement of the quality of the

54-20    water of the state, to provide nonstructural and structural flood

54-21    control, drainage, subsidence control, recharge, chloride control,

54-22    and desalinization, and to carry out other purposes defined by

54-23    board rules; [or]

54-24                      (B)  any undertaking or work outside the state to

54-25    provide for the maintenance and enhancement of the quality of water

97S0149/2                                                          

 55-1    by eliminating saline inflow through well pumping and deep well

 55-2    injection of brine; or

 55-3                      (C)  any undertaking or work by Texas political

 55-4    subdivisions to conserve, convey, and develop surface or subsurface

 55-5    water resources in areas outside Texas or to provide for the

 55-6    maintenance and enhancement of the quality of the water in areas

 55-7    adjoining Texas, if such undertaking or work will result in water

 55-8    being available for use in or for the benefit of Texas or will

 55-9    maintain and enhance the quality of water in Texas.

55-10          SECTION 3.08.  Subsection (b), Section 15.002, Water Code, is

55-11    amended to read as follows:

55-12          (b)  The legislature finds that the conventional means of

55-13    financing projects are inadequate to meet current and anticipated

55-14    needs of the state.  Therefore, it is the further intent of the

55-15    legislature to provide a means of coordinating the development of

55-16    projects [throughout the state] through the board and to provide

55-17    political subdivisions the maximum opportunity to finance projects

55-18    through programs provided by this chapter.  Projects may be in the

55-19    state or outside the state, provided that out-of-state projects

55-20    must be funded through a Texas political subdivision and must

55-21    result in water being available for use in or for the benefit of

55-22    Texas or maintain and enhance the quality of water in Texas.

55-23          SECTION 3.09.  Section 15.401, Water Code, is amended to read

55-24    as follows:

55-25          Sec. 15.401.  PROGRAM CREATION.  The research and planning

97S0149/2                                                          

 56-1    program is created to provide money for research into and planning

 56-2    of the proper conservation and development of the state's water

 56-3    resources, for regional planning by political subdivisions, for

 56-4    facility engineering in economically distressed areas, and for

 56-5    flood control planning by political subdivisions.  The program may

 56-6    also provide money for research and planning by Texas political

 56-7    subdivisions related to the proper conservation and development of

 56-8    water resources of areas outside Texas if such research or planning

 56-9    will result in water being available for use in or for the benefit

56-10    of Texas or will maintain and enhance the quality of water in

56-11    Texas.

56-12          SECTION 3.10.  Subsection (a), Section 15.404, Water Code, is

56-13    amended to read as follows:

56-14          (a)  The board may enter into a contract with any person for

56-15    research into any matter relating to the conservation and

56-16    development of the state's water resources or for research by Texas

56-17    political subdivisions related to the proper conservation and

56-18    development of water resources of areas outside Texas if such

56-19    research will result in water being available for use in or for the

56-20    benefit of Texas or will help maintain and enhance the quality of

56-21    water in Texas.

56-22          SECTION 3.11.  Subsection (f), Section 15.406, Water Code, is

56-23    amended to read as follows:

56-24          (f)  The board shall adopt rules establishing criteria of

56-25    eligibility for regional facility planning money that considers:

97S0149/2                                                          

 57-1                (1)  the relative need of the political subdivision for

 57-2    the money;

 57-3                (2)  the legal authority of the political subdivision

 57-4    to plan, develop, and operate regional facilities; [and]

 57-5                (3)  the effect of regional facility planning by the

 57-6    political subdivision on overall regional facility planning,

 57-7    development, and operation in the state and within the area in

 57-8    which the political subdivision is located; and

 57-9                (4)  the degree to which the regional facility planning

57-10    by the political subdivision is consistent with an approved

57-11    regional water management plan for the area in which the political

57-12    subdivision is located.

57-13          SECTION 3.12.  Subchapter F, Chapter 15, Water Code, is

57-14    amended by adding a new Section 15.407 and renumbering existing

57-15    Section 15.407 as Section 15.408 to read as follows:

57-16          Sec. 15.407.  REGIONAL WATER MANAGEMENT PLANNING.  (a)  The

57-17    board may enter into contracts with political subdivisions to pay

57-18    from the research and planning fund all or part of the cost of

57-19    developing or revising comprehensive regional water management

57-20    plans as defined in Section 16.059 of this code.

57-21          (b)  A political subdivision or political subdivisions that

57-22    desire money from the research and planning fund for regional water

57-23    management planning shall submit a written application to the board

57-24    in the manner and form required by board rules.

57-25          (c)  The application shall include:

97S0149/2                                                          

 58-1                (1)  the name of the political subdivision or political

 58-2    subdivisions;

 58-3                (2)  a citation to the laws under which the political

 58-4    subdivision was created and is operating, including specific

 58-5    citation of all laws providing authority to develop and implement a

 58-6    regional water management plan;

 58-7                (3)  the amount requested from the board for regional

 58-8    water management planning; and

 58-9                (4)  any other relevant information required by the

58-10    board in its rules or specifically requested by the board.

58-11          (d)  After notice and hearing, the board may award the

58-12    applicant all or part of the requested funds that the board

58-13    considers necessary for the political subdivision to carry out

58-14    regional water management planning.

58-15          (e)  If the board grants an application under this section

58-16    and awards funds for regional water management planning, the board

58-17    shall enter into a contract with the political subdivision or

58-18    political subdivisions that includes:

58-19                (1)  a detailed statement of the purpose for which the

58-20    money is to be used;

58-21                (2)  the total amount of money to be paid by the board

58-22    from the research and planning fund under the contract; and

58-23                (3)  any other terms and conditions required by the

58-24    board's rules or agreed to by the contracting parties.

58-25          (f)  The board shall adopt rules establishing criteria for

97S0149/2                                                          

 59-1    eligibility for regional water management planning money that

 59-2    include:

 59-3                (1)  the relative need of the political subdivision for

 59-4    the money;

 59-5                (2)  the legal authority of the political subdivision

 59-6    to develop and implement a regional water management plan; and

 59-7                (3)  the degree to which regional water management

 59-8    planning by the political subdivision or political subdivisions

 59-9    will address the water supply needs of all communities and public

59-10    water systems in the designated planning area.

59-11          (g)  The board shall require that regional water management

59-12    plans developed or revised under contracts entered into under this

59-13    section be made available to the commission.

59-14          Sec. 15.408.  FACILITY ENGINEERING IN ECONOMICALLY DISTRESSED

59-15    AREAS.  (a)  In this section, "economically distressed area" and

59-16    "political subdivision" have the meanings assigned by Section

59-17    16.341 of this code.

59-18          (b)  The board may enter into contracts with a political

59-19    subdivision to pay from the research and planning fund all or part

59-20    of the cost of facility engineering in economically distressed

59-21    areas, including preparation of plans and specifications.

59-22          (c)  A political subdivision that desires money from the

59-23    research and planning fund for facility engineering in an

59-24    economically distressed area shall submit a written application to

59-25    the board in the manner and form required by board rules.

97S0149/2                                                          

 60-1          (d)  The application shall include:

 60-2                (1)  the name of the political subdivision;

 60-3                (2)  a citation to the laws under which the political

 60-4    subdivision was created and is operating;

 60-5                (3)  the amount requested from the board for facility

 60-6    engineering in an economically distressed area; and

 60-7                (4)  any other information required by the board in its

 60-8    rules or specifically requested by the board.

 60-9          (e)  After notice and hearing, the board may award the

60-10    applicant all or part of the requested funds that are considered

60-11    necessary by the board for the political subdivision to carry out

60-12    adequate facility engineering in an economically distressed area.

60-13          (f)  If the board grants an application under this section

60-14    and awards funds for facility engineering in an economically

60-15    distressed area, the board shall enter into a contract with the

60-16    political subdivision that includes:

60-17                (1)  a detailed statement of the purpose for which the

60-18    money is to be used;

60-19                (2)  the total amount of money to be paid from the

60-20    research and planning fund under the contract; and

60-21                (3)  any other terms and conditions required by board

60-22    rules or agreed to by the contracting parties.

60-23          (g)  If, after submission of an application under this

60-24    section, a county has an increase in average per capita income or a

60-25    decrease in unemployment rate average so that the county no longer

97S0149/2                                                          

 61-1    meets the definition of an affected county in Section 16.341, the

 61-2    political subdivision that submits the application continues to be

 61-3    eligible for the funds under this section, and the board shall

 61-4    process the application for facility engineering and, if the

 61-5    application is approved, shall provide funds for the facility

 61-6    engineering plan to the political subdivision.

 61-7          SECTION 3.13.  Subchapter C, Chapter 16, Water Code, is

 61-8    amended by adding Section 16.059 to read as follows:

 61-9          Sec. 16.059.  REGIONAL WATER MANAGEMENT PLANS.  (a)  The

61-10    executive administrator shall encourage the development and

61-11    periodic revision, as necessary, of regional water management plans

61-12    and may provide technical assistance with the development or

61-13    revision of such plans.

61-14          (b)  Regional water management plans shall be prepared by

61-15    political subdivisions under this section to assure an adequate,

61-16    reliable, and affordable long-term water supply for all of the

61-17    communities and public water supply systems within a designated

61-18    regional water management planning area.  Regional water management

61-19    plans shall be developed and revised with the substantive

61-20    participation of all communities, public water systems, and water

61-21    suppliers within a designated regional planning area and shall

61-22    include but are not limited to:

61-23                (1)  consideration and inclusion, as appropriate, of

61-24    all potentially feasible water management strategies including, but

61-25    not limited to, improved management of existing water supplies,

97S0149/2                                                          

 62-1    improved water use efficiency, water reuse and recycling, water

 62-2    supply and water demand management during water shortage,

 62-3    conjunctive use of surface water and groundwater supplies,

 62-4    acquisition of available existing water supplies, and development

 62-5    of new water supplies;

 62-6                (2)  consideration and inclusion, as appropriate, of

 62-7    water management strategy provisions contained in regional or local

 62-8    drought response plans;

 62-9                (3)  consideration of opportunities for and the

62-10    benefits of developing regional water supply facilities or

62-11    providing regional management of water supply facilities; and

62-12                (4)  consideration of and appropriate provision for

62-13    environmental water needs, including adequate water to maintain

62-14    instream uses and freshwater inflows to the state's bays and

62-15    estuaries.

62-16          (c)  The board shall, in coordination with the Parks and

62-17    Wildlife Department and the commission, develop guidance consistent

62-18    with the state water plan for the development and revision of

62-19    regional water management plans.

62-20          (d)  The executive administrator shall designate the areas

62-21    for which regional water management plans shall be developed,

62-22    taking into consideration such factors as river basin and aquifer

62-23    delineations, water utility development patterns, socioeconomic

62-24    characteristics, and other factors the executive administrator

62-25    deems relevant.  The executive administrator may also designate a

97S0149/2                                                          

 63-1    political subdivision or group of political subdivisions within

 63-2    each designated regional water management planning area to serve as

 63-3    the coordinating body for planning.  The board shall adopt rules to

 63-4    provide for the procedures for approval of regional water

 63-5    management plans and to govern the procedures to be followed by the

 63-6    executive administrator in carrying out the responsibilities of

 63-7    this subsection.

 63-8          (e)  In preparing, developing, and formulating the state

 63-9    water plan, the executive administrator shall give consideration to

63-10    and incorporate, as appropriate, regional water management plans

63-11    approved by the board.

63-12          (f)  The board may provide financial assistance to political

63-13    subdivisions under Subchapters E and F of this chapter and

63-14    Subchapters C, D, E, F, and J, Chapter 15, and Subchapters D, I, K,

63-15    and L, Chapter 17 of this code for water projects only if the board

63-16    determines that the needs to be addressed by the project will be

63-17    addressed in a manner consistent with an approved regional water

63-18    management plan for the area in which the facility is to be

63-19    located, unless the board determines that conditions warrant waiver

63-20    of this requirement.

63-21          SECTION 3.14.  Subdivision (3), Section 16.341, Water Code,

63-22    is amended to read as follows:

63-23                (3)  "Political subdivision" means an affected county,

63-24    a municipality located in an affected county, a district or

63-25    authority created under Article III, Section 52, or Article XVI,

97S0149/2                                                          

 64-1    Section 59, of the Texas Constitution, located in an affected

 64-2    county, or a nonprofit water supply corporation created and

 64-3    operating under Chapter 76, Acts of the 43rd Legislature, 1st

 64-4    Called Session, 1933 (Article 1434a, Vernon's Texas Civil

 64-5    Statutes), located in an affected county, that receives funds for

 64-6    facility engineering under Section 15.408 [15.407] of this code or

 64-7    financial assistance under Subchapter K, Chapter 17, of this code

 64-8    or an economically distressed area in an affected county for which

 64-9    financial assistance is received under Subchapter C, Chapter 15, of

64-10    this code.

64-11          SECTION 3.15.  Subsection (g), Section 16.343, Water Code, is

64-12    amended to read as follows:

64-13          (g)  Before filing an application for funds for facility

64-14    engineering under Section 15.408 [15.407] of this code or financial

64-15    assistance under Subchapter K, Chapter 17, of this code, a

64-16    political subdivision must adopt the model rules pursuant to this

64-17    section or, in the case of a district or nonprofit water supply

64-18    corporation, must be located in a city or county that has adopted

64-19    such rules.  An affected county may not receive funds under either

64-20    Section 15.408 [15.407] of this code or Subchapter K, Chapter 17,

64-21    of this code unless the county adopts and enforces the model rules.

64-22          SECTION 3.16.  Subsection (a), Section 16.345, Water Code, is

64-23    amended to read as follows:

64-24          (a)  A political subdivision may exercise any authority

64-25    necessary to participate in a program under Section 15.408 [15.407]

97S0149/2                                                          

 65-1    of this code or Subchapter K, Chapter 17, of this code and carry

 65-2    out the terms and conditions under which the funds or the financial

 65-3    assistance is provided.

 65-4          SECTION 3.17.  Subsections (a) and (d), Section 16.350, Water

 65-5    Code, are amended to read as follows:

 65-6          (a)  A county or municipality that applies for or receives

 65-7    funds or financial assistance under Section 15.408 [15.407] of this

 65-8    code or Subchapter K, Chapter 17, of this code  must adopt and

 65-9    enforce the model rules developed under Section 16.343 of this code

65-10    to be eligible to participate in this program.  The county or

65-11    municipality by order or ordinance shall adopt and enter the model

65-12    rules in the minutes of a meeting of its governing body and shall

65-13    publish notice of that action in a newspaper with general

65-14    circulation in the county or municipality.  A municipality is

65-15    eligible to participate in this program only if the county in which

65-16    the project is located adopts and enforces the model rules.

65-17          (d)  A county or municipality that receives funds or

65-18    financial assistance under Section 15.408 [15.407] of this code or

65-19    Subchapter K, Chapter 17, of this code may grant an exemption for a

65-20    subdivision from the requirements of the model rules only if the

65-21    county or municipality supplies the subdivision with water supply

65-22    and sewer services that meet the standards of the model rules.

65-23          SECTION 3.18.  Section 17.895, Water Code, is amended by

65-24    adding Subsection (c) to read as follows:

65-25          (c)  The board may make conservation loans to borrower

97S0149/2                                                          

 66-1    districts for the cost of purchasing and installing devices, on

 66-2    public or private property, designed to indicate the amount of

 66-3    water withdrawn for irrigation purposes.

 66-4          SECTION 3.19.  Section 17.926, Water Code, is amended to read

 66-5    as follows:

 66-6          Sec. 17.926.  APPLICANTS' CONTINUED ELIGIBILITY.  If, after

 66-7    submission of a financial assistance application under this

 66-8    subchapter or an application for funds under Section 15.408

 66-9    [15.407], a county has an increase in average per capita income or

66-10    decrease in unemployment rate average so that the county no longer

66-11    meets the criteria in this subchapter, the political subdivision

66-12    that submits the application continues to be eligible for the

66-13    financial assistance under this subchapter, and the board shall

66-14    process the application and, if the application is approved, shall

66-15    provide financial assistance to the political subdivision to

66-16    complete the project.

66-17          SECTION 3.20.  Section 27.0511, Water Code, is amended by

66-18    adding Subsection (h) to read as follows:

66-19          (h)  If the railroad commission receives an application for

66-20    an injection well using fresh water for enhanced recovery purposes

66-21    and the well is to be located in a groundwater conservation

66-22    district, the railroad commission shall give notice to the district

66-23    in which the well is to be located that the application has been

66-24    received and is being considered.  The railroad commission shall

66-25    determine whether the permit application is consistent with the

97S0149/2                                                          

 67-1    district's management plan.

 67-2          SECTION 3.21.  Subdivision (12), Section 35.002, Water Code,

 67-3    is amended to read as follows:

 67-4                (12)  "Priority groundwater management [Critical] area"

 67-5    means an area designated and delineated by the commission as an

 67-6    area that is experiencing or is expected to experience critical

 67-7    groundwater problems.

 67-8          SECTION 3.22.  Section 35.007, Water Code, is amended to read

 67-9    as follows:

67-10          Sec. 35.007.  IDENTIFYING, DESIGNATING, AND DELINEATING

67-11    PRIORITY GROUNDWATER MANAGEMENT [CRITICAL] AREAS.  (a)  The

67-12    executive director and the executive administrator shall meet at

67-13    least once a year to identify, based on information available to

67-14    the commission and the Texas Water Development Board, those areas

67-15    of the state that are experiencing or that are expected to

67-16    experience, [based on information available to the commission and

67-17    the Texas Water Development Board,] within the immediately

67-18    following 50-year [20-year] period, critical groundwater problems,

67-19    including shortages of surface water or groundwater, land

67-20    subsidence resulting from groundwater withdrawal, and contamination

67-21    of groundwater supplies.

67-22          (b)  If the executive director concludes that an area of the

67-23    state should be considered for designation as a priority

67-24    groundwater management [critical] area, the executive director

67-25    shall prepare a report to the commission.

97S0149/2                                                          

 68-1          (c)  The executive director shall begin preparation of a

 68-2    priority groundwater management [critical] area report by

 68-3    requesting a study from the executive administrator.  The study

 68-4    must:

 68-5                (1)  include an appraisal of the hydrogeology of the

 68-6    area and matters within the Texas Water Development Board's

 68-7    planning expertise relevant to the area;

 68-8                (2)  assess the area's immediate, short-term, and

 68-9    long-term water supply and needs; and

68-10                (3)  [.  The study must] be completed and delivered to

68-11    the executive director on or before the 180th [90th] day following

68-12    the date of the request.  If the study is not delivered within this

68-13    180-day [90-day] period, the executive director may proceed with

68-14    the preparation of the report.

68-15          (d)  The executive director shall request a study from the

68-16    executive director of the Parks and Wildlife Department for the

68-17    purpose of preparing the report required by this section.  The

68-18    study must:

68-19                (1)  evaluate the potential effects of the designation

68-20    of a priority groundwater management area on an area's fish and

68-21    wildlife resources; and

68-22                (2)  be completed and delivered to the executive

68-23    director on or before the 180th day following the date of the

68-24    request.  If the study is not delivered within this 180-day period,

68-25    the executive director may proceed with the preparation of the

97S0149/2                                                          

 69-1    report.

 69-2          (e)  The report shall include:

 69-3                (1)  the recommended delineation of the boundaries of

 69-4    any proposed priority groundwater management [critical] area in the

 69-5    form of an order [a rule] to be considered for adoption by the

 69-6    commission;

 69-7                (2)  the reasons and supporting information for or

 69-8    against designating the area as a priority groundwater management

 69-9    [critical] area;

69-10                (3)  a recommendation regarding whether a district

69-11    should be created in the priority groundwater management [critical]

69-12    area or whether the priority groundwater management [critical] area

69-13    should be added to an existing district;

69-14                (4)  a recommendation as to actions that should be

69-15    considered to conserve fish and wildlife resources; and

69-16                (5)  any other information that the executive director

69-17    considers helpful to the commission.

69-18          (f) [(e)]  The executive director must complete the report

69-19    and file it with the commission on or before the 240th [210th] day

69-20    following the date on which the executive administrator was

69-21    requested  to produce a study.  The executive director shall make

69-22    the report available for public inspection by providing a copy of

69-23    the report to at least one library in each county in which the

69-24    proposed priority groundwater management [critical] area is

69-25    located.

97S0149/2                                                          

 70-1          (g) [(f)]  To carry out this section, the executive director

 70-2    may make necessary studies, hold hearings, solicit and collect

 70-3    information, and use information already prepared by the executive

 70-4    director or the executive administrator for other purposes.

 70-5          SECTION 3.23.  Section 35.008, Water Code, is amended to read

 70-6    as follows:

 70-7          Sec. 35.008.  PROCEDURES FOR DESIGNATION OF PRIORITY

 70-8    GROUNDWATER MANAGEMENT AREA; CONSIDERATION OF CREATION OF DISTRICT

 70-9    OR ADDITION OF LAND IN PRIORITY GROUNDWATER MANAGEMENT AREA TO

70-10    EXISTING DISTRICT [CRITICAL AREAS].  (a)  The commission shall

70-11    designate priority groundwater management [critical] areas using

70-12    the procedures provided by this chapter in lieu of those provided

70-13    by [applicable to rulemaking under the Administrative Procedure

70-14    Act,] Subchapter B, Chapter 2001, Government Code[, but if

70-15    procedures required by this chapter are in conflict with that Act,

70-16    this chapter controls].

70-17          (b)  The commission shall call an evidentiary hearing to

70-18    consider:

70-19                (1)  the designation of a priority groundwater

70-20    management area;

70-21                (2)  whether a district should be created over all or

70-22    part of a priority groundwater management area; or

70-23                (3) whether all or part of the land in the priority

70-24    groundwater management area should be added to an existing

70-25    district.

97S0149/2                                                          

 71-1          (c)  Evidentiary hearings shall be held at a location in one

 71-2    of the counties in which the priority groundwater management area

 71-3    is located, or proposed to be located, or in the nearest convenient

 71-4    location if adequate facilities are not available in those

 71-5    counties.

 71-6          (d)  At the hearing, the commission shall hear testimony and

 71-7    receive evidence from affected persons.  The commission shall

 71-8    consider the executive director's report and supporting information

 71-9    and the testimony and evidence received at the hearing.  If the

71-10    commission considers further information necessary, the commission

71-11    may request such information from any source.

71-12          (e)  The designation of a priority groundwater management

71-13    [critical] area may not be appealed nor may it be challenged under

71-14    the Administrative Procedure Act, Section 2001.038, Government

71-15    Code.

71-16          SECTION 3.24.  Section 35.009, Water Code, is amended to read

71-17    as follows:

71-18          Sec. 35.009.  NOTICE AND HEARING.  (a)  The [In addition to

71-19    the notice required for rulemaking under the Administrative

71-20    Procedure Act, Section 2001.023, Government Code, the] commission

71-21    shall have notice of the hearing published in at least one

71-22    newspaper with general circulation in the county or counties in

71-23    which the area being designated a proposed priority groundwater

71-24    management [critical] area or the area within a priority

71-25    groundwater management area being considered for district creation

97S0149/2                                                          

 72-1    or for addition to an existing district is [to be] located.  Notice

 72-2    must be published not later than the 30th day before the date set

 72-3    for the commission to consider the designation of the priority

 72-4    groundwater management [critical] area, the creation of a district

 72-5    in a priority groundwater management area, or the addition of land

 72-6    in a priority groundwater management area to an existing district.

 72-7          (b)  The notice must include:

 72-8                (1)  if applicable, a statement of the general purpose

 72-9    and effect of designating the proposed priority groundwater

72-10    management area [critical areas];

72-11                (2)  if applicable, a statement of the general purpose

72-12    and effect of creating a district in the priority groundwater

72-13    management area;

72-14                (3)  if applicable, a statement that all or part of the

72-15    land in the priority groundwater management area could be added to

72-16    an existing district;

72-17                (4)  a map generally outlining the boundaries of the

72-18    area being considered for priority groundwater management [proposed

72-19    critical] area designation or the priority groundwater management

72-20    area being considered for district creation or for addition to an

72-21    existing district, or notice of the location at which a copy of the

72-22    map may be examined or obtained;

72-23                (5)  a statement that the full executive director's

72-24    report concerning the priority groundwater management area or

72-25    proposed area is available at the commission's main office in

97S0149/2                                                          

 73-1    Austin, Texas, and at regional offices of the commission for

 73-2    regions which include territory within the priority groundwater

 73-3    management area or proposed priority groundwater management area

 73-4    and that the report is available for inspection during regular

 73-5    business hours;

 73-6                (6) [(3)]  a description or the name of the locations

 73-7    in the affected area at which the commission has provided copies of

 73-8    the executive director's report to be made available for public

 73-9    inspection;

73-10                (7)  the name and address of each library in the

73-11    proposed priority groundwater management area to which the

73-12    commission has provided copies of the executive director's report;

73-13    and

73-14                (8) [(4)]  the date, time, and place of the hearing [at

73-15    which the commission will consider the designation of the critical

73-16    areas].

73-17          (c)  The commission shall also give written notice of the

73-18    date, time, place, and purpose of the hearing to the governing body

73-19    of each county, municipality, river authority, water district, or

73-20    other entity which supplies public drinking water located either

73-21    partially or entirely in the priority groundwater management area

73-22    or proposed priority groundwater management area.  The notice must

73-23    be given before the 30th day preceding the date set for the

73-24    hearing.

73-25          SECTION 3.25.  Subsections (b), (c), (d), and (e), Section

97S0149/2                                                          

 74-1    35.012, Water Code, are amended to read as follows:

 74-2          (b)  If the commission finds that the land and other property

 74-3    in the priority groundwater management [critical] area would

 74-4    benefit from the creation of one or more districts, that there is a

 74-5    public need for one or more districts, and that the creation of one

 74-6    or more districts would further the public welfare, the commission

 74-7    shall issue an order stating that the creation of one or more

 74-8    districts is needed.

 74-9          (c)  Following [During the period between] the [date of]

74-10    issuance of a commission order under Subsection (b) [and one year

74-11    after the close of the next regular session of the legislature

74-12    following the issuance of the order], the landowners in the

74-13    priority groundwater management [critical] area may:

74-14                (1)  create one or more districts under Subchapter B,

74-15    Chapter 36;

74-16                (2)  have the area annexed to a district that adjoins

74-17    the area; or

74-18                (3)  create one or more districts through the

74-19    legislative process.

74-20          (d)  The commission shall identify the areas subject to the

74-21    order of the commission issued under Subsection (b) that have not[,

74-22    in the period provided by Subsection (c),] been incorporated into a

74-23    district[,] and shall delineate proposed boundaries of a district

74-24    to include those areas.  If the commission proposes the creation of

74-25    one or more districts, the commission shall begin the procedures

97S0149/2                                                          

 75-1    for creation of a district provided in Subchapter B, Chapter 36.

 75-2          (e)  If the commission fails to find that the district would

 75-3    be a benefit to the land and other property within the priority

 75-4    groundwater management [critical] area, that there is a public need

 75-5    for the district, or that creation of the district will further the

 75-6    public welfare, the commission shall issue an order stating that a

 75-7    district should not be created within the boundaries of the

 75-8    priority groundwater management [critical] area.

 75-9          SECTION 3.26.  Section 35.013, Water Code, is amended to read

75-10    as follows:

75-11          Sec. 35.013.  ADDING PRIORITY GROUNDWATER MANAGEMENT

75-12    [CRITICAL] AREA TO EXISTING DISTRICT.  (a)  If land in a priority

75-13    groundwater management [critical] area is located adjacent to one

75-14    or more existing districts, the commission, instead of issuing an

75-15    order under Section 35.012, may issue an order recommending that

75-16    the priority groundwater management [critical] area be added to the

75-17    existing district designated by the commission.  In its order, the

75-18    commission must find that the land and other property in the

75-19    priority groundwater management [critical] area and the land in the

75-20    existing district will benefit from the addition of the area, that

75-21    there is a public need to add the priority groundwater management

75-22    [critical] area to the existing district, and that the addition of

75-23    the land to the existing district would further the public welfare.

75-24          (b)  If the executive director recommends that the priority

75-25    groundwater management [critical] area be added to an existing

97S0149/2                                                          

 76-1    district or if the commission considers it possible to add the

 76-2    priority groundwater management [critical] area to an adjacent

 76-3    existing district, the commission shall give notice to the board of

 76-4    the existing district recommended by the executive director or

 76-5    considered by the commission to possibly serve the area and to any

 76-6    other existing districts adjacent to the priority groundwater

 76-7    management [critical] area.

 76-8          (c)  The commission shall submit a copy of the order to the

 76-9    board of the district to which it is recommending the priority

76-10    groundwater management [critical] area be added.  The board shall

76-11    vote on the addition of the priority groundwater management

76-12    [critical] area to the district and shall advise the commission of

76-13    the outcome.

76-14          (d)  If the board votes to accept the addition of the

76-15    priority groundwater management [critical] area to the district,

76-16    the board shall call an election within the priority groundwater

76-17    management [critical] area as delineated by the commission to

76-18    determine if the priority groundwater management [critical] area

76-19    will be added to the district.  In the order calling the election,

76-20    the board shall designate election precincts and polling places for

76-21    the elections.

76-22          (e)  The board shall give notice of the election and the

76-23    proposition to be voted on.  The board shall publish notice of the

76-24    election at least one time in one or more newspapers with general

76-25    circulation within the boundaries of the priority groundwater

97S0149/2                                                          

 77-1    management [critical] area.  The notice must be published before

 77-2    the 30th day preceding the date set for the election.

 77-3          (f)  The ballots for the election shall be printed to provide

 77-4    for voting for or against the proposition:  "The inclusion of

 77-5    __________ (briefly describe priority groundwater management

 77-6    [critical] area) in the __________ District."  If the district has

 77-7    issued bonds, the proposition shall include the following language:

 77-8    "and assumption by the described area of a proportional share of

 77-9    the outstanding indebtedness of the district."

77-10          (g)  Immediately after the election, the presiding judge of

77-11    each polling place shall deliver the returns of the election to the

77-12    board, and the board shall canvass the returns for the election

77-13    within the priority groundwater management [critical] area and

77-14    declare the results.  If a majority of the voters in the priority

77-15    groundwater management [critical] area voting on the proposition

77-16    vote in favor of the proposition, the board shall declare that the

77-17    priority groundwater management [critical] area is added to the

77-18    district.  If a majority of the voters in the priority groundwater

77-19    management [critical] area voting on the proposition vote against

77-20    adding the priority groundwater management [critical] area to the

77-21    district, the board shall declare that the priority groundwater

77-22    management [critical] area is not added to the district.  The board

77-23    shall file a copy of the election results with the commission.

77-24          (h)  If the voters approve adding the priority groundwater

77-25    management [critical] area to the district, the board of the

97S0149/2                                                          

 78-1    district to which the priority groundwater management [critical]

 78-2    area is added shall provide reasonable representation on that board

 78-3    compatible with the district's existing scheme of representation.

 78-4          (i)  If the proposition is defeated, another election to add

 78-5    the priority groundwater management [critical] area to an existing

 78-6    district may not be called before the first anniversary of the date

 78-7    on which the election on the proposition was held.

 78-8          SECTION 3.27.  Subsections (b) and (c), Section 35.014, Water

 78-9    Code, are amended to read as follows:

78-10          (b)  The costs of an election to add a priority groundwater

78-11    management [critical] area to an existing district at which the

78-12    voters approve adding the priority groundwater management

78-13    [critical] area to the district shall be paid by the existing

78-14    district.

78-15          (c)  The costs of an election to create a district or add a

78-16    priority groundwater management [critical] area to an existing

78-17    district at which the proposition fails shall be paid by the

78-18    commission.

78-19          SECTION 3.28.  Section 35.015, Water Code, is amended to read

78-20    as follows:

78-21          Sec. 35.015.  STATE ASSISTANCE.  [(a)  A political

78-22    subdivision located in or that has within its boundaries an area or

78-23    part of an area delineated as a critical area, and in which the

78-24    qualified voters fail to approve the creation of a district or to

78-25    join an existing district, shall not be eligible to receive any

97S0149/2                                                          

 79-1    financial assistance from the state under Chapter 15, 16, or 17 for

 79-2    use within that portion of the critical area not covered by a

 79-3    district.]

 79-4          [(b)]  A political subdivision located in an area delineated

 79-5    as a priority groundwater management [critical] area, and in which

 79-6    qualified voters approve the creation of a district or annexation

 79-7    into an existing district, shall be given consideration to receive

 79-8    financial assistance from the state under Chapter 17 for funds to

 79-9    be used in addressing issues identified in the priority groundwater

79-10    management [critical] area report in the manner provided by

79-11    Sections 17.124 and 17.125[, except that the board is not required

79-12    to make the finding set out in Section 17.125(a)(2)].

79-13          SECTION 3.29.  Subsection (b), Section 35.016, Water Code, is

79-14    amended to read as follows:

79-15          (b)  A district is considered active unless the commission

79-16    has determined under Section 36.302 that the district is not

79-17    operational [if it meets the requirements in Section 36.301(c)].

79-18          SECTION 3.30.  Section 35.017, Water Code, is amended to read

79-19    as follows:

79-20          Sec. 35.017.  STATE-OWNED LAND.  If state-owned land or a

79-21    portion of state-owned land is located in a priority groundwater

79-22    management [critical] area, the state agency that has management

79-23    and control over that land under the constitution or by statute may

79-24    elect by written agreement with the commission and the district to

79-25    include the state-owned land in the district.  The agreement shall

97S0149/2                                                          

 80-1    be entered into as provided by the Texas Intergovernmental

 80-2    Cooperation Act, Chapter 741, Government Code, and may include

 80-3    provisions for the payment by the state agency of reasonable fees

 80-4    to the district.  If the state does not elect to enter into the

 80-5    agreement to include the state-owned land in the district, the

 80-6    state agency must establish a groundwater management plan that will

 80-7    conserve, protect, and prevent the waste of groundwater on that

 80-8    state-owned land.

 80-9          SECTION 3.31.  Chapter 35, Water Code, is amended by adding

80-10    Section 35.018 to read as follows:

80-11          Sec. 35.018.  REPORTS.  (a)  Not later than January 31 of

80-12    each odd-numbered year, the commission in conjunction with the

80-13    Texas Water Development Board shall prepare and deliver to the

80-14    governor, the lieutenant governor, and the speaker of the house of

80-15    representatives a comprehensive report concerning activities during

80-16    the preceding two years relating to the designation of priority

80-17    groundwater management areas by the commission, the creation of

80-18    districts, and the operation of districts.

80-19          (b)  The report must include:

80-20                (1)  the names and locations of all priority

80-21    groundwater management areas and districts created or attempted to

80-22    be created on or after November 5, 1985, the effective date of

80-23    Chapter 133 (H.B. No. 2), Acts of the 69th Legislature, Regular

80-24    Session, 1985;

80-25                (2)  the authority under which each priority

97S0149/2                                                          

 81-1    groundwater management area and district was proposed for creation;

 81-2                (3)  a detailed analysis of each election held to

 81-3    confirm the creation of a district, including analysis of election

 81-4    results, possible reasons for the success or failure to confirm the

 81-5    creation of a district, and the possibility for future voter

 81-6    approval of districts in areas in which attempts to create

 81-7    districts failed;

 81-8                (4)  a detailed analysis of the activities of each

 81-9    district created, including those districts which are implementing

81-10    management plans approved under Section 36.1072;

81-11                (5)  a report on audits performed on districts under

81-12    Section 36.302 and remedial actions taken under Section 36.303;

81-13                (6)  recommendations for changes in this chapter and

81-14    Chapter 36 that will facilitate the creation of priority

81-15    groundwater management areas and the creation and operation of

81-16    districts; and

81-17                (7)  any other information and recommendations that the

81-18    commission considers relevant.

81-19          SECTION 3.32.  Section 36.001, Water Code, is amended by

81-20    amending Subdivision (14) and adding Subdivisions (16) and (17) to

81-21    read as follows:

81-22                (14)  "Priority groundwater management [Critical] area"

81-23    means an area designated and delineated by the commission under

81-24    Chapter 35 as an area experiencing or expected to experience

81-25    critical groundwater problems.

97S0149/2                                                          

 82-1                (16)  "Loan fund" means the groundwater district loan

 82-2    assistance fund created under Section 36.371.

 82-3                (17)  "Applicant" means a newly confirmed district

 82-4    applying for a loan from the loan fund.

 82-5          SECTION 3.33.  Subsection (c), Section 36.012, Water Code, is

 82-6    amended to read as follows:

 82-7          (c)  The boundaries of a district must be coterminous with or

 82-8    inside the boundaries of a management area or a priority

 82-9    groundwater management [critical] area.

82-10          SECTION 3.34.  Subsection (d), Section 36.013, Water Code, is

82-11    amended to read as follows:

82-12          (d)  If a part of the proposed district is not included

82-13    within either a management area or a priority groundwater

82-14    management [critical] area, the petition to create a district may

82-15    also contain a request to create a management area.  A request to

82-16    create a management area must comply with the requirements for a

82-17    petition in Section 35.005, and may be acted on by the commission

82-18    separately from the petition to create the district.

82-19          SECTION 3.35.  Subchapter B, Chapter 36, Water Code, is

82-20    amended by adding Section 36.0151 to read as follows:

82-21          Sec. 36.0151.  CREATION OF DISTRICT FOR PRIORITY GROUNDWATER

82-22    MANAGEMENT AREA.  (a)  If the commission proposes that a district

82-23    be created under Section 35.012(d), it shall in its order creating

82-24    the district provide that temporary directors be appointed under

82-25    Section 36.016 and that an election be called by the temporary

97S0149/2                                                          

 83-1    directors to confirm the creation of the district and to elect

 83-2    permanent directors.

 83-3          (b)  The commission shall notify the county commissioners

 83-4    court of each county with territory in the district of the

 83-5    district's creation as soon as practicable after issuing the order

 83-6    creating the district.

 83-7          SECTION 3.36.  Section 36.016, Water Code, is amended to read

 83-8    as follows:

 83-9          Sec. 36.016.  APPOINTMENT OF TEMPORARY DIRECTORS.  (a)  If

83-10    the commission grants a petition to create a district under Section

83-11    36.015 or after the commission dissolves a district's board under

83-12    Section 36.303, it shall appoint five temporary directors.

83-13          (b)  If the commission creates a district under Section

83-14    36.0151, the county commissioners court or courts of the county or

83-15    counties that contain the area of the district shall, within 90

83-16    days after receiving notification by the commission under Section

83-17    36.0151(b), appoint five temporary directors, or more if the

83-18    district contains the territory of more than five counties, for the

83-19    district's board using the method provided by Section 36.0161.  A

83-20    county commissioners court shall not make any appointments after

83-21    the expiration of the 90-day period.  If fewer than five temporary

83-22    directors have been appointed at the expiration of the period, the

83-23    commission shall appoint additional directors so that the board has

83-24    at least five members.

83-25          (c)  Temporary directors appointed under this section [who]

97S0149/2                                                          

 84-1    shall serve until the initial directors are elected and have

 84-2    qualified for office or until the voters fail to approve the

 84-3    creation of the district.

 84-4          (d) [(b)]  If an appointee of the commission or of a county

 84-5    commissioners court or county commissioners courts fails to qualify

 84-6    or if a vacancy occurs in the office of temporary director, the

 84-7    commission or the county commissioners court or courts, as

 84-8    appropriate, shall appoint an individual to fill the vacancy.

 84-9          (e) [(c)]  As soon as all temporary directors have qualified,

84-10    the directors shall meet, take the oath of office, and elect a

84-11    chairman and vice chairman from among their membership.  The

84-12    chairman shall preside at all meetings of the board and, in the

84-13    chairman's absence, the vice chairman shall preside.

84-14          SECTION 3.37.  Subchapter B, Chapter 36, Water Code, is

84-15    amended by adding Section 36.0161 to read as follows:

84-16          Sec. 36.0161.  METHOD FOR APPOINTING TEMPORARY DIRECTORS FOR

84-17    DISTRICT IN PRIORITY GROUNDWATER MANAGEMENT AREA.  (a)  If a

84-18    district in a priority groundwater management area is:

84-19                (1)  contained within one county, the county

84-20    commissioners court of that county shall appoint five temporary

84-21    directors for the district;

84-22                (2)  contained within two counties, the county

84-23    commissioners court of each county shall appoint at least one

84-24    temporary director, with the appointments of the three remaining

84-25    directors to be apportioned as provided by Subsection (b);

97S0149/2                                                          

 85-1                (3)  contained within three counties, the county

 85-2    commissioners court of each county shall appoint at least one

 85-3    temporary director, with the appointments of the two remaining

 85-4    directors to be apportioned as provided by Subsection (b);

 85-5                (4)  contained within four counties, the county

 85-6    commissioners court of each county shall appoint at least one

 85-7    temporary director, with the appointment of the remaining director

 85-8    to be apportioned as provided by Subsection (b); or

 85-9                (5)  contained within five or more counties, the county

85-10    commissioners court of each county shall appoint one temporary

85-11    director.

85-12          (b)(1)  In this subsection, "estimated groundwater use" means

85-13    the estimate of groundwater use in acre-feet developed by the

85-14    commission under Subsection (c) for the area of a county that is

85-15    within the district.

85-16                (2)  The apportionment of appointments under Subsection

85-17    (a) shall be made by the commission so as to reflect, as closely as

85-18    possible, the proportion each county's estimated groundwater use

85-19    bears to the sum of the estimated groundwater use for the district

85-20    as determined under Subsection (c).  The commission shall by rule

85-21    determine the method it will use to implement this subdivision.

85-22          (c)  If a district is contained within two, three, or four

85-23    counties, the commission shall develop an estimate of annual

85-24    groundwater use in acre-feet for each county area within the

85-25    district.

97S0149/2                                                          

 86-1          SECTION 3.38.  Section 36.102, Water Code, is amended to read

 86-2    as follows:

 86-3          Sec. 36.102.  ENFORCEMENT OF RULES.  (a)  A district may

 86-4    enforce this chapter and its rules by injunction, mandatory

 86-5    injunction, or other appropriate remedy in a court of competent

 86-6    jurisdiction.

 86-7          (b)  [The board may set reasonable civil penalties for breach

 86-8    of any rule of the district that shall not exceed the jurisdiction

 86-9    of a justice court as provided by Section 27.031, Government Code.]

86-10          [(c)  A penalty under this section is in addition to any

86-11    other penalty provided by the law of this state and may be enforced

86-12    by complaints filed in the appropriate court of jurisdiction in the

86-13    county in which the district's principal office or meeting place is

86-14    located.]

86-15          [(d)]  If the district prevails in any suit to enforce its

86-16    rules, it may, in the same action, recover reasonable fees for

86-17    attorneys, expert witnesses, and other costs incurred by the

86-18    district before the court.  The amount of the attorney's fees shall

86-19    be fixed by the court.

86-20          (c)  The district may issue orders in accordance with Chapter

86-21    2001, Government Code, to enforce the terms and conditions of

86-22    permits, orders, or rules issued or adopted under this chapter.

86-23          SECTION 3.39.  Subchapter D, Chapter 36, Water Code, is

86-24    amended by adding Section 36.1021 to read as follows:

86-25          Sec. 36.1021.  ADMINISTRATIVE PENALTY.  (a)  A district may

97S0149/2                                                          

 87-1    assess an administrative penalty against a person who violates this

 87-2    chapter or a rule adopted or order issued under this chapter in an

 87-3    amount not to exceed $10,000 a day for each violation and for each

 87-4    day of a continuing violation.

 87-5          (b)  In determining the amount of the penalty, the district

 87-6    shall consider:

 87-7                (1)  the nature, circumstances, extent, duration, and

 87-8    gravity of the prohibited acts, with special emphasis on the

 87-9    impairment of existing water rights or the hazard or potential

87-10    hazard created to the health, safety, or welfare of the public;

87-11                (2)  the impact of the violation on the instream uses,

87-12    water quality, aquatic and wildlife habitat, or beneficial

87-13    freshwater inflows to bays and estuaries;

87-14                (3)  with respect to the alleged violator:

87-15                      (A)  the history and extent of previous

87-16    violations;

87-17                      (B)  the degree of culpability, including whether

87-18    the violation was attributable to mechanical or electrical failures

87-19    and whether the violation could have been reasonably anticipated

87-20    and avoided;

87-21                      (C)  demonstrated good faith, including actions

87-22    taken by the alleged violator to rectify the cause of the violation

87-23    and to compensate affected persons;

87-24                      (D)  any economic benefit gained through the

87-25    violation; and

97S0149/2                                                          

 88-1                      (E)  the amount necessary to deter future

 88-2    violations; and

 88-3                (4)  any other matters that justice may require.

 88-4          (c)  If after an examination of the facts the district

 88-5    concludes that the person did commit a violation, the district may

 88-6    issue a preliminary report stating the facts on which it based its

 88-7    conclusion, recommending that an administrative penalty under this

 88-8    section be imposed, and recommending the amount of the proposed

 88-9    penalty.

88-10          (d)  The district shall give written notice of the report to

88-11    the person charged with committing the violation.  The notice must

88-12    include a brief summary of the facts, a statement of the amount of

88-13    the recommended penalty, and a statement of the person's right to

88-14    an informal review of the occurrence of the violation, the amount

88-15    of the penalty, or both the occurrence of the violation and the

88-16    amount of the penalty.

88-17          (e) Not later than the 10th day after the date on which the

88-18    person charged with committing the violation receives the notice,

88-19    the person may either give the district written consent to the

88-20    report, including the recommended penalty, or make a written

88-21    request for an informal review or a formal hearing by the district.

88-22          (f)  If the person charged with committing the violation

88-23    consents to the penalty recommended by the district or fails timely

88-24    to request an informal review or a formal hearing, the district

88-25    shall assess the penalty.  The district shall give the person

97S0149/2                                                          

 89-1    written notice of its action.  The person shall pay the penalty not

 89-2    later than the 30th day after the date on which the person receives

 89-3    the notice.

 89-4          (g)  If the person charged with committing a violation

 89-5    requests an informal review as provided by Subsection (e), the

 89-6    district shall conduct the review.  The district shall give the

 89-7    person written notice of the results of the review not later than

 89-8    60 days from the date of the request.

 89-9          (h)  Not later than the 10th day after the date on which the

89-10    person charged with committing the violation receives the notice

89-11    prescribed by Subsection (g), the person may make to the district a

89-12    written request for a formal hearing.

89-13          (i)  If, after informal review, a person who has been ordered

89-14    to pay a penalty fails to request a formal hearing in a timely

89-15    manner, the district shall assess the penalty.  The district shall

89-16    give the person written notice of its action.  The person shall pay

89-17    the penalty not later than the 30th day after the date on which the

89-18    person receives the notice.

89-19          (j)  Within 30 days after the date the district's order

89-20    becomes final as provided by Section 2001.144, Government Code, the

89-21    person shall:

89-22                (1)  pay the amount of the penalty;

89-23                (2)  pay the amount of the penalty and file a petition

89-24    for judicial review contesting the occurrence of the violation, the

89-25    amount of the penalty, or both the occurrence of the violation and

97S0149/2                                                          

 90-1    the amount of the penalty; or

 90-2                (3)  without paying the amount of the penalty, file a

 90-3    petition for judicial review contesting the occurrence of the

 90-4    violation, the amount of the penalty, or both the occurrence of the

 90-5    violation and the amount of the penalty.

 90-6          (k)  Within the 30-day period, a person who acts under

 90-7    Subsection (j)(3) of this section may:

 90-8                (1)  stay enforcement of the penalty by:

 90-9                      (A)  paying the amount of the penalty to the

90-10    court for placement in an escrow account; or

90-11                      (B)  giving to the court a supersedeas bond that

90-12    is approved by the court for the amount of the penalty and that is

90-13    effective until all judicial review of the district's order is

90-14    final; or

90-15                (2)  request the court to stay enforcement of the

90-16    penalty by:

90-17                      (A)  filing with the court a sworn affidavit of

90-18    the person stating that the person is financially unable to pay the

90-19    amount of the penalty and is financially unable to give the

90-20    supersedeas bond; and

90-21                      (B)  giving a copy of the affidavit to the

90-22    district by certified mail.

90-23          (l)  If the district receives a copy of an affidavit under

90-24    Subsection (k)(2), it may file with the court within five days

90-25    after the date the copy is received a contest to the affidavit.

97S0149/2                                                          

 91-1    The court shall hold a hearing on the facts alleged in the

 91-2    affidavit as soon as practicable and shall stay the enforcement of

 91-3    the penalty on finding that the alleged facts are true.  The person

 91-4    who files an affidavit has the burden of proving that the person is

 91-5    financially unable to pay the amount of the penalty and to give a

 91-6    supersedeas bond.

 91-7          (m)  If the person does not pay the amount of the penalty and

 91-8    the enforcement of the penalty is not stayed, the district may

 91-9    refer the matter to the attorney general for collection of the

91-10    amount of the penalty.

91-11          (n)  Judicial review of the order of the district:

91-12                (1)  is instituted by filing a petition as provided by

91-13    Subchapter G, Chapter 2001, Government Code; and

91-14                (2)  is under the substantial evidence rule.

91-15          (o)  If the court sustains the occurrence of the violation,

91-16    the court may uphold or reduce the amount of the penalty and order

91-17    the person to pay the full or reduced amount of the penalty.  If

91-18    the court does not sustain the occurrence of the violation, the

91-19    court shall order that no penalty is owed.

91-20          (p)  When the judgment of the court becomes final, the court

91-21    shall proceed under this subsection.  If the person paid the amount

91-22    of the penalty and if that amount is reduced or is not upheld by

91-23    the court, the court shall order that the appropriate amount plus

91-24    accrued interest be remitted to the person.  The rate of interest

91-25    is the rate charged on loans to depository institutions by the New

97S0149/2                                                          

 92-1    York Federal Reserve Bank, and the interest shall be paid for the

 92-2    period beginning on the date the penalty was paid and ending on the

 92-3    date the penalty is remitted.  If the person gave a supersedeas

 92-4    bond and if the amount of the penalty is not upheld by the court,

 92-5    the court shall order the release of the bond.  If the person gave

 92-6    a supersedeas bond and if the amount of the penalty is reduced, the

 92-7    court shall order the release of the bond after the person pays the

 92-8    reduced amount.

 92-9          (q)  A penalty collected under this section shall be remitted

92-10    to the district.

92-11          (r)  All proceedings under this section are subject to

92-12    Chapter 2001, Government Code.

92-13          SECTION 3.40.  Section 36.104, Water Code, is amended to read

92-14    as follows:

92-15          Sec. 36.104.  PURCHASE, SALE, TRANSPORTATION, AND

92-16    DISTRIBUTION OF WATER.  (a)  A district may purchase, sell,

92-17    transport, and distribute surface water or groundwater for any

92-18    purpose.

92-19          (b)  An export of groundwater may be limited if there is an

92-20    existing and foreseeable need for the water that is identified in

92-21    the district's management plan and there is no alternative within

92-22    the district.

92-23          SECTION 3.41.  Subchapter D, Chapter 36, Water Code, is

92-24    amended by amending Section 36.107 and adding Sections 36.1071,

92-25    36.1072, and 36.1073 to read as follows:

97S0149/2                                                          

 93-1          Sec. 36.107.  RESEARCH [AND PLANNING].  [(a)]  A district may

 93-2    carry out any research projects deemed necessary by the board.

 93-3          Sec. 36.1071.  MANAGEMENT PLAN.  (a)[(b)]  Following notice

 93-4    and hearing, the district shall, in coordination with surface water

 93-5    management entities on a regional basis, develop a comprehensive

 93-6    management plan which addresses the following management goals:

 93-7                (1)  providing the most efficient use of groundwater;

 93-8                (2)  controlling and preventing waste of groundwater;

 93-9                (3)  controlling and preventing subsidence;

93-10                (4)  addressing conjunctive surface water management

93-11    issues; and

93-12                (5)  addressing fish and wildlife resource issues,

93-13    especially those associated with springs.

93-14          (b)  In the management plan described under Subsection (a),

93-15    the district shall:

93-16                (1)  identify the performance standards and management

93-17    objectives under which the district will operate to achieve the

93-18    management goals identified under Subsection (a);

93-19                (2)  specify, in as much detail as possible, the

93-20    actions, procedures, performance, and avoidance that are or may be

93-21    necessary to effect the plan, including specifications, proposed

93-22    rules, and exemptions from permit requirements the district will

93-23    allow under Sections 36.117 and 36.121;

93-24                (3)  identify the time periods and corresponding

93-25    timelines by which the district will seek to provide an amount of

97S0149/2                                                          

 94-1    water sufficient to meet the existing and future water needs within

 94-2    the district from existing groundwater resources;

 94-3                (4)  include calculations of the following:

 94-4                      (A)  the existing total usable amount of

 94-5    groundwater in the district;

 94-6                      (B)  the amount of groundwater being used within

 94-7    the district on an annual basis;

 94-8                      (C)  the estimated annual amount of recharge, if

 94-9    any, to the groundwater resources within the district; and

94-10                      (D)  the projected future water supply and demand

94-11    for water within the district; and

94-12                (5)  address water supply needs in a manner that is

94-13    consistent with the state water plan [for the most efficient use of

94-14    the groundwater, for controlling and preventing waste of

94-15    groundwater, and for controlling and preventing subsidence.  The

94-16    plan may be reviewed annually but must be reviewed by the board at

94-17    least once every five years].

94-18          (c)  [The district shall specify in the management plan, in

94-19    as much detail as possible, the acts, procedures, performance, and

94-20    avoidance that are or may be necessary to effect the plan,

94-21    including specifications and proposed rules.]  The district shall

94-22    adopt rules necessary to implement the management plan.

94-23          (d)  The board shall adopt amendments to the management plan

94-24    as necessary.  Amendments to the management plan shall be adopted

94-25    after notice and hearing and shall otherwise comply with the

97S0149/2                                                          

 95-1    requirements of this section.

 95-2          Sec. 36.1072.  COMMISSION REVIEW AND APPROVAL OF MANAGEMENT

 95-3    PLAN.  (a)  The district shall, not later than one year after the

 95-4    creation of the district or, if the district required confirmation,

 95-5    after the election confirming the district's creation, submit [file

 95-6    a copy of] the management plan required under Section 36.1071 to

 95-7    [and the rules with] the commission for review and approval.

 95-8          (b)  If a management plan complies with the requirements of

 95-9    Section 36.1071, the commission, in consultation with the Texas

95-10    Water Development Board, shall grant approval of the plan.  The

95-11    commission may determine that conditions justify waiver of the

95-12    requirements under Section 36.1071(b)(5).  A management plan

95-13    developed under Section 36.1071 takes effect on approval by the

95-14    commission.

95-15          (c)  The board may review the plan annually and must review

95-16    and readopt the plan with or without revisions at least once every

95-17    five years.

95-18          (d)  If the commission does not approve the management plan

95-19    after notice and hearing, the commission shall provide to the

95-20    district, in writing, the reasons for its action.  Not later than

95-21    the 180th day after the date a district receives notice that its

95-22    management plan has not been approved, the district may submit a

95-23    revised management plan for review and approval.  The commission

95-24    shall not take enforcement action against a district under

95-25    Subchapter I until the later of the expiration of the 180-day

97S0149/2                                                          

 96-1    period or the date the commission has taken final action

 96-2    disapproving a revised management plan.

 96-3          Sec. 36.1073.  AMENDMENT TO MANAGEMENT PLAN.  Any amendment

 96-4    to the management plan shall be submitted to the commission within

 96-5    60 days following adoption of the amendment by the board.  The

 96-6    commission shall review and approve any amendment which

 96-7    substantially affects the management plan in accordance with the

 96-8    procedures established under Section 36.1072.

 96-9          SECTION 3.42.  Subsection (a), Section 36.108, Water Code, is

96-10    amended to read as follows:

96-11          (a)  If two or more districts are located within the

96-12    boundaries of the same management area, each district shall prepare

96-13    a comprehensive management plan as required by Section 36.1071

96-14    [36.107] covering that district's respective territory.  On

96-15    completion of the plan, each district shall forward a copy of the

96-16    new revised management plan to the other districts in the

96-17    management area.

96-18          SECTION 3.43.  Section 36.113, Water Code, is amended to read

96-19    as follows:

96-20          Sec. 36.113.  PERMITS FOR WELLS.  (a)  A district shall

96-21    require permits for the drilling, equipping, or completing of

96-22    wells[,] or for substantially altering the size of wells or well

96-23    pumps.

96-24          (b)  A district shall require that an application for a

96-25    permit be in writing and sworn to.

97S0149/2                                                          

 97-1          (c)  A district may require that the following be included in

 97-2    the permit application:

 97-3                (1)  the name and mailing address of the applicant and

 97-4    the owner of the land on which the well will be located;

 97-5                (2)  if the applicant is other than the owner of the

 97-6    property, documentation establishing the applicable authority to

 97-7    construct and operate a well for the proposed use;

 97-8                (3)  a statement of the nature and purpose of the

 97-9    proposed use and the amount of water to be used for each purpose;

97-10                (4)  a water conservation plan or a declaration that

97-11    the applicant will comply with the district's conservation plan;

97-12                (5)  the location of each well and the estimated rate

97-13    at which water will be withdrawn; and

97-14                (6)  if the proposed use is irrigation:

97-15                      (A)  a description of the land to be irrigated;

97-16                      (B)  a description of the crops for which

97-17    irrigation is proposed; and

97-18                      (C)  an estimate of the total land to be

97-19    irrigated on an annual basis.

97-20          (d)  In granting a permit, the district shall consider

97-21    whether:

97-22                (1)  the application conforms to the requirements

97-23    prescribed by this chapter and is accompanied by the prescribed

97-24    fees;

97-25                (2)  the proposed use of water unreasonably affects

97S0149/2                                                          

 98-1    existing groundwater and surface water resources;

 98-2                (3)  the proposed use of water contemplates the

 98-3    dedication of water to any beneficial use;

 98-4                (4)  the proposed use of water is consistent with the

 98-5    district's approved water management plan; and

 98-6                (5)  the applicant has provided evidence that

 98-7    reasonable diligence will be used to avoid waste and achieve water

 98-8    conservation.

 98-9          (e)  Permits may be issued subject to the rules promulgated

98-10    by the district and subject to terms and provisions with reference

98-11    to the drilling, equipping, completion, or alteration of wells or

98-12    pumps that may be necessary to [conserve the groundwater,] prevent

98-13    waste and achieve water conservation, minimize as far as

98-14    practicable the drawdown of the water table or the reduction of

98-15    artesian pressure, lessen interference between wells, or control

98-16    and prevent subsidence.

98-17          (f)  A district may require that changes in the withdrawal

98-18    and use of groundwater under a permit may not be made without the

98-19    prior approval of a permit amendment issued by the district.

98-20          SECTION 3.44.  Subchapter D, Chapter 36, Water Code, is

98-21    amended by adding Section 36.1131 to read as follows:

98-22          Sec. 36.1131.  REQUIRED ELEMENTS OF PERMIT.  (a)  A permit

98-23    issued by the district to the applicant under Section 36.113 shall

98-24    state the terms and provisions prescribed by the district.

98-25          (b)  The permit may include:

97S0149/2                                                          

 99-1                (1)  the name and address of the person to whom the

 99-2    permit is issued;

 99-3                (2)  the location of the well;

 99-4                (3)  the date the permit is to expire if no well is

 99-5    drilled;

 99-6                (4)  a statement of the purpose for which the well is

 99-7    to be used;

 99-8                (5)  a requirement that the water withdrawn under the

 99-9    permit be put to beneficial use at all times;

99-10                (6)  the location of the use of the water  from the 

99-11    well;

99-12                (7)  the conditions and restrictions, if any, placed on

99-13    the rate and amount of withdrawal;

99-14                (8)  any conservation-oriented methods of drilling and

99-15    operating prescribed by the district;

99-16                (9)  a drought contingency plan prescribed by the

99-17    district; and

99-18                (10)  other terms and conditions as provided by Section

99-19    36.113.

99-20          SECTION 3.45.  Subsections (a), (c), (d), and (e), Section

99-21    36.117, Water Code, are amended to read as follows:

99-22          (a)  Unless otherwise specified in a district's management

99-23    plan, a [A] district may not require a permit for:

99-24                (1)  drilling or producing from a well either drilled,

99-25    completed, or equipped so that it is incapable of producing more

97S0149/2                                                          

 100-1   than 25,000 gallons of groundwater a day;

 100-2               (2)  the drilling or alteration of the size of a well

 100-3   or to restrict the production of a well if the water produced or to

 100-4   be produced from the well is used or to be used to supply the

 100-5   domestic needs of 10 or fewer households and a person who is a

 100-6   member of each household is either the owner of the well, a person

 100-7   related to the owner or a member of the owner's household within

 100-8   the second degree by consanguinity, or an employee of the owner;

 100-9               (3)  the drilling or alteration of the size of a well

100-10   or to restrict the production from the well if the water produced

100-11   or to be produced from the well is used or to be used to provide

100-12   water for feeding livestock and poultry connected with farming,

100-13   ranching, or dairy enterprises;

100-14               (4)  water wells to supply water for hydrocarbon

100-15   production activities, regardless of whether those wells are

100-16   producing, that are associated with any well permitted by the

100-17   Railroad Commission of Texas drilled before September 1, 1985; or

100-18               (5)  jet wells used for domestic needs.

100-19         (c)  Unless otherwise specified in a district's management

100-20   plan, a [The] district shall not deny the owner of a tract of land,

100-21   or his lessee, who has no well equipped to produce more than 25,000

100-22   gallons a day on the tract, either a permit to drill a well on his

100-23   land or the privilege to produce groundwater from his land, subject

100-24   to the rules of the district.

100-25         (d)  Unless otherwise specified in a district's management

97S0149/2                                                          

 101-1   plan, a [A] district may not restrict the production of any well

 101-2   equipped to produce 25,000 gallons or less a day.

 101-3         (e)  Nothing in this chapter applies to wells drilled for

 101-4   oil, gas, sulphur, uranium, or brine, or for core tests, or for

 101-5   injection of gas, saltwater, or other fluid, except fresh water, or

 101-6   for any other purpose, under permits issued by the Railroad

 101-7   Commission of Texas.  Permits issued by the Railroad Commission of

 101-8   Texas for an injection well using fresh water for enhanced recovery

 101-9   purposes shall comply with the district's management plan.  Unless

101-10   otherwise specified in a district's management plan, a [A] district

101-11   may not require a permit to drill a well to supply water for

101-12   drilling any of these wells permitted by the Railroad Commission of

101-13   Texas.  Any well that ceases to be used for these purposes and is

101-14   then used as an ordinary water well is subject to the rules of the

101-15   district.

101-16         SECTION 3.46.  Section 36.121, Water Code, is amended to read

101-17   as follows:

101-18         Sec. 36.121.  LIMITATION ON RULEMAKING POWER OF DISTRICTS

101-19   OVER WELLS IN CERTAIN COUNTIES.  Except as provided by Section

101-20   36.117, unless otherwise specified in a district's management plan,

101-21   a district that is created under this chapter on or after September

101-22   1, 1991, shall exempt from regulation under this chapter a well and

101-23   any water produced or to be produced by a well that is located in a

101-24   county that has a population of 14,000 or less if the water is to

101-25   be used solely to supply a municipality that has a population of

97S0149/2                                                          

 102-1   115,000 or less and the rights to the water produced from the well

 102-2   are owned by a political subdivision that is not a municipality, or

 102-3   by a municipality that has a population of 93,000 or less, and that

 102-4   purchased, owned, or held rights to the water before the date on

 102-5   which the district was created, regardless of the date the well is

 102-6   drilled or the water is produced.  The district may not prohibit

 102-7   the political subdivision or municipality from transporting

 102-8   produced water inside or outside the district's boundaries unless

 102-9   otherwise specified in the district's management plan.

102-10         SECTION 3.47.  Subchapter D, Chapter 36, Water Code, is

102-11   amended by adding Sections 36.122 and 36.123 to read as follows:

102-12         Sec. 36.122.  PREFERENCE IN USE OF WATER.  For new wells, a

102-13   district may by rule establish and apply a preference-of-use

102-14   listing for the  district's groundwater, provided that domestic and

102-15   livestock uses and, among municipal uses, public health and safety

102-16   uses receive the highest priority.

102-17         Sec. 36.123.  TECHNICAL ASSISTANCE.  The commission is

102-18   authorized to provide technical assistance to districts during

102-19   their initial operational phase.  Such assistance may include but

102-20   is not limited to demonstrations of how to adopt rules, how to set

102-21   up permitting programs, and how to initiate enforcement actions.

102-22         SECTION 3.48.  Subchapter E, Chapter 36, Water Code, is

102-23   amended by adding Sections 36.159, 36.160, and 36.161 to read as

102-24   follows:

102-25         Sec. 36.159.  MANAGEMENT PLAN FUNDS.  The Texas Water

97S0149/2                                                          

 103-1   Development Board may allocate funds from the research and planning

 103-2   fund created under Subchapter F, Chapter 15, to a district to

 103-3   conduct initial data collections under this chapter, to develop and

 103-4   implement a long-term management plan under Section 36.1071, and to

 103-5   participate in regional plans that provide for the conjunctive

 103-6   management of surface water and groundwater.

 103-7         Sec. 36.160.  FUNDS.  The Texas Water Development Board, the

 103-8   commission, and the Parks and Wildlife Department may allocate

 103-9   funds to carry out the objectives of this chapter and Chapter 35,

103-10   which include but are not limited to:

103-11               (1)  conducting initial and subsequent studies and

103-12   surveys under Sections 36.106, 36.107, and 36.109;

103-13               (2)  providing appropriate education in affected areas

103-14   identified in Section 35.007 relating to the problems and issues

103-15   concerning water management that may arise;

103-16               (3)  processing priority groundwater management area

103-17   evaluations under this chapter and Chapter 35;

103-18               (4)  providing technical and administrative assistance

103-19   to newly created districts under this chapter and Chapter 35;

103-20               (5)  covering the costs of newspaper notices required

103-21   under Sections 35.009 and 36.014 and failed elections in accordance

103-22   with Sections 35.014(c), 36.017(h), and 36.019; and

103-23               (6)  providing for assistance from the Parks and

103-24   Wildlife Department to the Texas Water Development Board or a

103-25   district for the purpose of assessing fish and wildlife resource

97S0149/2                                                          

 104-1   habitat that would be affected by a springflow reduction.

 104-2         Sec. 36.161.  ELIGIBILITY FOR FUNDING. (a)  Only those

 104-3   districts in substantial compliance with the requirements of this

 104-4   chapter shall be eligible for state funds authorized by Sections

 104-5   36.159 and 36.160 and Subchapter L and for funds available from the

 104-6   Texas Water Development Board under Chapters 15, 16, and 17.

 104-7         (b)  The Texas Water Development Board may, after notice and

 104-8   hearing, discontinue funding described in Subsection (a) if the

 104-9   district is found not to be in substantial compliance with the

104-10   provisions of this chapter.

104-11         (c)  The Texas Water Development Board, when considering a

104-12   discontinuance under Subsection (b), shall give written notice of

104-13   the hearing to the district at least 20 days before the date set

104-14   for the hearing.  The hearing shall be conducted in accordance with

104-15   Chapter 2001, Government Code, or the rules of the respective

104-16   agency.  General notice of the hearing shall be given in accordance

104-17   with the rules of the agency.

104-18         SECTION 3.49.  Subchapter G, Chapter 36, Water Code, is

104-19   amended by adding Section 36.206 to read as follows:

104-20         Sec. 36.206.  DISTRICT FEES.  (a)  A board may annually set

104-21   user and standby fees.  Such fees shall be set as necessary to

104-22   cover the maintenance and operating expenses of the district and

104-23   the principal of and interest on bonds issued by the district,

104-24   provided that funds received from the collection of penalties under

104-25   Section 36.1021 shall be taken into account.

97S0149/2                                                          

 105-1         (b)  The rate of fees set for agricultural uses shall be no

 105-2   more than 20 percent of the rate applied to municipal uses.

 105-3         (c)  A temporary board may set user fees to pay for the

 105-4   creation and initial operation of a district.

 105-5         SECTION 3.50.  Subchapter I, Chapter 36, Water Code, is

 105-6   amended to read as follows:

 105-7     SUBCHAPTER I.  PERFORMANCE REVIEW AND DISSOLUTION [OF DISTRICT]

 105-8         Sec. 36.301.  FAILURE TO SUBMIT A MANAGEMENT PLAN.  If a

 105-9   board fails to submit a management plan or to receive approval of

105-10   its management plan under Section 36.1072 or fails to submit or

105-11   receive approval of an amendment to the management plan under

105-12   Section 36.1073, the commission shall take appropriate action under

105-13   Section 36.303.

105-14         Sec. 36.302.  DETERMINATION OF WHETHER DISTRICT IS

105-15   OPERATIONAL.  (a)  The commission shall make a determination of

105-16   whether a district is actively engaged in achieving the objectives

105-17   of the district's management plan based on an audit of the

105-18   district's performance under the plan.  The commission shall

105-19   conduct such audits following the first anniversary of the initial

105-20   approval of the plan by the commission under Section 36.1072.  The

105-21   commission by rule shall establish a schedule for the audit of

105-22   districts under this section.

105-23         (b)  If the commission finds under Subsection (a) that the

105-24   district is not operational, the commission shall take appropriate

105-25   action under Section 36.303.

97S0149/2                                                          

 106-1         Sec. 36.303.  ACTION BY COMMISSION.  (a)  After notice and

 106-2   hearing, the commission may take any action the commission deems

 106-3   appropriate to enforce compliance with any rule or order of the

 106-4   commission or any provisions of this chapter, including:

 106-5               (1)  issuing an order requiring the district to take

 106-6   certain actions or to refrain from taking certain actions;

 106-7               (2)  dissolving the board in accordance with Sections

 106-8   36.305 and 36.307;

 106-9               (3)  removing the district's taxing authority; or

106-10               (4)  dissolving the district in accordance with

106-11   Sections 36.304, 36.305, and 36.308.

106-12         (b)  In addition to actions identified under Subsection (a),

106-13   the commission may recommend to the legislature actions the

106-14   commission deems necessary to accomplish comprehensive management

106-15   in the district.

106-16         Sec. 36.304 [36.301].  DISSOLUTION OF DISTRICT.  (a)  The

106-17   [After notice and hearing, the] commission may dissolve a district

106-18   that:

106-19               (1)  is not operational, as determined under Section

106-20   36.302 [has been inactive for a period of three consecutive years];

106-21   and

106-22               (2)  has no outstanding bonded indebtedness.

106-23         (b)  A district composed of territory entirely within one

106-24   county may be dissolved even if the district [it] has outstanding

106-25   indebtedness that matures after the year in which the district is

97S0149/2                                                          

 107-1   dissolved, whereupon the commissioners court shall levy and collect

 107-2   taxes on all taxable property in the district in an amount

 107-3   sufficient to pay the principal of and interest on the indebtedness

 107-4   when due.  The taxes shall be levied and collected in the same

 107-5   manner as county taxes.

 107-6         [(c)  A district is considered active if:]

 107-7               [(1)  the district has a board as required by

 107-8   Subchapter D;]

 107-9               [(2)  the board holds regularly scheduled meetings and

107-10   has on file minutes of its meetings;]

107-11               [(3)  the district has developed and filed with the

107-12   commission a management plan for the district;]

107-13               [(4)  the district has copies of drillers' logs on

107-14   file;]

107-15               [(5)  the district has on file well permits issued by

107-16   the district; and]

107-17               [(6)  the district has on file annual district audits.]

107-18         Sec. 36.305 [36.302].  NOTICE OF HEARING FOR DISSOLUTION OF

107-19   BOARD OR DISTRICT.  (a)  The commission shall give notice of the

107-20   [dissolution] hearing for dissolution of a district or of a board

107-21   which briefly describes the reasons for the proceeding.

107-22         (b)  The notice shall be published once each week for two

107-23   consecutive weeks before the day of hearing in a [some] newspaper

107-24   having general circulation in the county or counties in which the

107-25   district is located.  The first publication shall be 30 days before

97S0149/2                                                          

 108-1   the day of the hearing.

 108-2         (c)  The commission shall give notice of the hearing by first

 108-3   class mail addressed to the directors of the district according to

 108-4   the last record on file with the executive director.

 108-5         Sec. 36.306 [36.303].  INVESTIGATION.  The executive director

 108-6   shall investigate the facts and circumstances of any violations of

 108-7   any rule or order of the commission or any provisions of this

 108-8   chapter and shall prepare and file a written report with the

 108-9   commission and district and include any actions the executive

108-10   director believes the commission should take under Section 36.303.

108-11         Sec. 36.307.  ORDER OF DISSOLUTION OF BOARD.  If the

108-12   commission enters an order to dissolve the board, the commission

108-13   shall notify the county commissioners court of each county which

108-14   contains territory in the district and the commission shall provide

108-15   that temporary directors be appointed under Section 36.016 to serve

108-16   until an election for a new board can be held under Section 36.017,

108-17   provided, however, that district confirmation shall not be required

108-18   for continued existence of the district and shall not be an issue

108-19   in the election  [the district to be dissolved and the result of

108-20   the investigation shall be included in a written report].

108-21         [Sec. 36.304.  ORDER OF DISSOLUTION.  The commission may

108-22   enter an order dissolving the district at the conclusion of the

108-23   hearing if it finds that the district has performed none of the

108-24   functions for which it was created for a period of three

108-25   consecutive years before the day of the proceeding and that the

97S0149/2                                                          

 109-1   district has no outstanding bonded indebtedness.]

 109-2         Sec. 36.308 [36.305].  CERTIFIED COPY OF ORDER.  The

 109-3   commission shall file a certified copy of the order of dissolution

 109-4   of the district in the deed records of the county or counties in

 109-5   which the district is located.  If the district was created by a

 109-6   special Act of the legislature, the commission shall file a

 109-7   certified copy of the order of dissolution with the secretary of

 109-8   state.

 109-9         Sec. 36.309 [36.306].  APPEALS.  [(a)]  Appeals from any [a]

109-10   commission order [dissolving a district] shall be filed and heard

109-11   in the district court of Travis County in accordance with Chapter

109-12   2001, Government Code [any of the counties in which the land is

109-13   located].

109-14         [(b)  The trial on appeal shall be de novo and the

109-15   substantial evidence rule shall not apply.]

109-16         Sec. 36.310 [36.307].  ASSETS ESCHEAT TO STATE.  Upon the

109-17   dissolution of a district by the commission, all assets of the

109-18   district shall escheat to the State of Texas.  The assets shall be

109-19   administered by the comptroller [state treasurer] and shall be

109-20   disposed of in the manner provided by Chapter 72, Property Code.

109-21         SECTION 3.51.  Subsection (b), Section 36.325, Water Code, is

109-22   amended to read as follows:

109-23         (b)  The petition must be signed by:

109-24               (1)  a majority of the landowners in the territory;

109-25               (2)  at least 50 landowners if the number of landowners

97S0149/2                                                          

 110-1   is more than 50; or

 110-2               (3)  the commissioners court of the county in which the

 110-3   area is located if the area is identified as a priority groundwater

 110-4   management [critical] area or includes the entire county.  The

 110-5   petition must describe the land by legal description or by metes

 110-6   and bounds or by lot and block number if there is a recorded plat

 110-7   of the area to be included in the district.

 110-8         SECTION 3.52.  Section 36.331, Water Code, is amended to read

 110-9   as follows:

110-10         Sec. 36.331.  ANNEXATION OF NONCONTIGUOUS TERRITORY.  Land

110-11   not contiguous to the existing boundaries of a district may not be

110-12   added to or annexed to a district unless the land is located either

110-13   within the same management area, priority groundwater management

110-14   [critical] area, or a groundwater subdivision designated by the

110-15   commission or its predecessors.

110-16         SECTION 3.53.  Chapter 36, Water Code, is amended by adding

110-17   Subchapter L to read as follows:

110-18        SUBCHAPTER L.  GROUNDWATER DISTRICT LOAN ASSISTANCE FUND

110-19         Sec. 36.371.  GROUNDWATER DISTRICT LOAN ASSISTANCE FUND.

110-20   (a)  The groundwater district loan assistance fund is created, to

110-21   be funded by direct appropriation and by the Texas Water

110-22   Development Board, at its discretion, from the water assistance

110-23   fund.

110-24         (b)  Repayments of loans shall be deposited in the water

110-25   assistance fund.

97S0149/2                                                          

 111-1         Sec. 36.372.  FINANCIAL ASSISTANCE.  (a)  The loan fund may

 111-2   be used by the Texas Water Development Board to provide loans to

 111-3   newly confirmed districts to pay for their creation and initial

 111-4   operations.

 111-5         (b)  The Texas Water Development Board shall establish rules

 111-6   for the use and administration of the loan fund.

 111-7         Sec. 36.373.  APPLICATION FOR ASSISTANCE.  (a)  In an

 111-8   application to the Texas Water Development Board for financial

 111-9   assistance from the loan fund, the applicant shall include:

111-10               (1)  the name of the district and its board members;

111-11               (2)  a citation of the law under which the district

111-12   operates and was created;

111-13               (3)  a description of the initial operations;

111-14               (4)  the total start-up cost of the initial operations;

111-15               (5)  the amount of state financial assistance

111-16   requested;

111-17               (6)  the plan for repaying the total cost of the loan;

111-18   and

111-19               (7)  any other information the Texas Water Development

111-20   Board may require to perform its duties and protect the public

111-21   interest.

111-22         (b)  The Texas Water Development Board may not accept an

111-23   application for a loan from the loan fund unless it is submitted in

111-24   affidavit form by the applicant's board.  The Texas Water

111-25   Development Board shall prescribe the affidavit form in its rules.

97S0149/2                                                          

 112-1         (c)  The rules shall not restrict or prohibit the Texas Water

 112-2   Development Board from requiring additional factual material from

 112-3   an applicant.

 112-4         Sec. 36.374.  APPROVAL OF APPLICATION.  The Texas Water

 112-5   Development Board, by resolution, may approve an application if it

 112-6   finds that:

 112-7               (1)  granting financial assistance to the applicant

 112-8   will serve the public interest; and

 112-9               (2)  the revenue pledged by the applicant from district

112-10   taxes and fees and other sources will be sufficient to meet all the

112-11   obligations assumed by the applicant.

112-12         SECTION 3.54.  Subsection (g), Section 151.318, Tax Code, is

112-13   amended to read as follows:

112-14         (g)  Each person engaged in manufacturing, processing,

112-15   fabricating, or repairing tangible personal property for ultimate

112-16   sale is entitled to a refund or a reduction in the amount of tax

112-17   imposed by this chapter as provided by Subsection (h) for the

112-18   purchase of machinery, equipment, and replacement parts or

112-19   accessories with a useful life in excess of six months if the

112-20   equipment is:

112-21               (1)  used or consumed in or during the actual

112-22   manufacturing, processing, fabrication, or repair of tangible

112-23   personal property for ultimate sale, and the use or consumption of

112-24   the property is necessary or essential to the manufacturing,

112-25   processing, fabrication, or repair operation, or to a pollution

97S0149/2                                                          

 113-1   control process; or

 113-2               (2)  specifically installed to:

 113-3                     (A)  reduce water use and wastewater flow volumes

 113-4   from the manufacturing, processing, fabrication, or repair

 113-5   operation;

 113-6                     (B)  reuse and recycle wastewater streams

 113-7   generated within the manufacturing, processing, fabrication, or

 113-8   repair operation; or

 113-9                     (C)  treat wastewater from another industrial or

113-10   municipal source for the purpose of replacing existing freshwater

113-11   sources in the manufacturing, processing, fabrication, or repair

113-12   operation.

113-13         SECTION 3.55.  (a)  Sections 35.010 and 35.011, Water Code,

113-14   are repealed.

113-15         (b)  Section 5.02, Chapter 133, Acts of the 69th Legislature,

113-16   Regular Session, 1985, is repealed.

113-17         SECTION 3.56.  (a)  In this section, "district" means a

113-18   groundwater conservation district created under Section 52, Article

113-19   III, or Section 59, Article XVI, Texas Constitution, that has the

113-20   authority to regulate the spacing of water wells, the production

113-21   from water wells, or both.

113-22         (b)  Notwithstanding the time limitation under Subsection

113-23   (a), Section 36.1072, Water Code, as added by this Act, and

113-24   notwithstanding any provision to the contrary in prior law, a

113-25   district which was created or, if the district required a

97S0149/2                                                          

 114-1   confirmation election, a district whose creation was confirmed

 114-2   before the effective date of this Act shall submit a management

 114-3   plan for approval under Section 36.1072, Water Code, as added by

 114-4   this Act, to the Texas Natural Resource Conservation Commission not

 114-5   later than one year after the effective date of this Act.

 114-6         SECTION 3.57.  An area designated as a critical area under

 114-7   Chapter 35, Water Code, as it existed before the effective date of

 114-8   this Act, or under other prior law, shall be known and referred to

 114-9   as a priority groundwater management area on or after the effective

114-10   date of this Act.

114-11         SECTION 3.58.  Not later than September 1, 1998, the Texas

114-12   Natural Resource Conservation Commission must, under Chapter 35,

114-13   Water Code, as amended by this Act, make all designations of

114-14   priority groundwater management areas for which critical area

114-15   reports were required to have been completed before the effective

114-16   date of this Act under Section 35.007, Water Code, as that section

114-17   existed immediately before the effective date of this Act.

114-18          ARTICLE 4.  FINANCIAL ASSISTANCE TO LOCAL GOVERNMENTS

114-19         SECTION 4.01.  Section 15.431, Water Code, is amended by

114-20   amending Subsection (d) and adding Subsection (g) to read as

114-21   follows:

114-22         (d)  Money appropriated by the legislature to be maintained

114-23   as principal in the fund, $10 million of the money transferred to

114-24   that fund by H.B. No. 2, Acts of the 69th Legislature, Regular

114-25   Session, 1985, and half of the money earned as interest on the

97S0149/2                                                          

 115-1   money held as principal in the agricultural trust fund shall be

 115-2   maintained as principal.  Money maintained as principal in the

 115-3   agricultural trust fund may [not] be used by the board to make

 115-4   conservation loans to borrower districts and loans to lender

 115-5   districts for the purposes listed in Section 17.895 of this code.

 115-6   Loans and conservation loans made under this subchapter are subject

 115-7   to the provisions of Sections 17.896 through 17.903 of this code.

 115-8   Repayments of principal and interest on loans and conservation

 115-9   loans made under this subchapter shall be deposited in the

115-10   agricultural trust fund [spent for any purpose].

115-11         (g)  In this section, "borrower district," "conservation

115-12   loan," "individual borrower," "lender district," and "loan" have

115-13   the meanings assigned those terms by Section 17.871 of this code.

115-14         SECTION 4.02.  Section 16.189, Water Code, is amended to read

115-15   as follows:

115-16         Sec. 16.189.  LEASE PAYMENTS.  In leasing a state facility

115-17   for a term of years, the board shall require [annual] payments that

115-18   will recover over the lease period not less than the total of:

115-19               (1)  all [the annual] principal and interest

115-20   requirements applicable to the debt incurred by the state in

115-21   acquiring the facility; and

115-22               (2)  the state's [annual] cost for operation,

115-23   maintenance, and rehabilitation of the facility.

115-24         SECTION 4.03.  Chapter 17, Water Code, is amended by adding

115-25   Subchapter L to read as follows:

97S0149/2                                                          

 116-1         SUBCHAPTER L.  WATER FINANCIAL ASSISTANCE BOND PROGRAM

 116-2         Sec. 17.951.  DEFINITIONS.  In this subchapter:

 116-3               (1)  "Fund" means the Texas Water Development Fund II.

 116-4               (2)  "Resolution" means any resolution or order

 116-5   approved by the board authorizing the issuance of water financial

 116-6   assistance bonds.

 116-7         Sec. 17.952.  ISSUANCE OF WATER FINANCIAL ASSISTANCE BONDS.

 116-8   The board by resolution may provide for the issuance of water

 116-9   financial assistance bonds, which shall be general obligation bonds

116-10   of the state, in an aggregate principal amount not to exceed the

116-11   principal amount authorized to be issued by Section 49-d-8, Article

116-12   III, Texas Constitution.

116-13         Sec. 17.953.  CONDITIONS FOR ISSUANCE OF WATER FINANCIAL

116-14   ASSISTANCE BONDS.  (a)  Water financial assistance bonds may be

116-15   issued as various series and issues.

116-16         (b)  Water financial assistance bonds may mature, serially or

116-17   otherwise, not later than 50 years after the date on which they are

116-18   issued.

116-19         (c)  Water financial assistance bonds may be issued as bonds,

116-20   notes, or other obligations as permitted by law and may be in the

116-21   form and denominations and be issued in the manner and under the

116-22   terms, conditions, and details as provided by resolution.

116-23         (d)  Water financial assistance bonds may be sold at public

116-24   or private sale at a price or prices and on terms determined by the

116-25   board.

97S0149/2                                                          

 117-1         (e)  Water financial assistance bonds shall be signed and

 117-2   executed as provided by resolution.

 117-3         (f)  Water financial assistance bonds may bear no interest or

 117-4   bear interest at a rate or rates determined in accordance with law.

 117-5         (g)  Rates of interest on water financial assistance bonds

 117-6   may be fixed, variable, floating, adjustable, or otherwise, as

 117-7   determined by the board or determined pursuant to any contractual

 117-8   arrangements approved by the board.  The resolution may provide for

 117-9   the payment of interest at any time or the periodic determination

117-10   of interest rates or interest rate periods.

117-11         Sec. 17.954.  BOND ENHANCEMENT AGREEMENTS; PAYMENT OF

117-12   EXPENSES.  (a)  The board at any time and from time to time may

117-13   enter into one or more bond enhancement agreements that the board

117-14   determines to be necessary or appropriate to place the obligation

117-15   of the board, as represented by the water financial assistance

117-16   bonds, in whole or in part, on the interest rate, currency, cash

117-17   flow, or other basis desired by the board.  A bond enhancement

117-18   agreement is an agreement for professional services and shall

117-19   contain the terms and conditions and be for the period that the

117-20   board approves.

117-21         (b)  The fees and expenses of the board in connection with

117-22   the issuance of water financial assistance bonds and the providing

117-23   of financial assistance to political subdivisions may be paid from

117-24   money in the fund, provided that any payments due from the board

117-25   under a bond enhancement agreement, other than fees and expenses,

97S0149/2                                                          

 118-1   that relate to the payment of debt service on water financial

 118-2   assistance bonds constitute payments of principal of and interest

 118-3   on the water financial assistance bonds.

 118-4         (c)  Bond enhancement agreements may include, on terms and

 118-5   conditions approved by the board, interest rate swap agreements;

 118-6   currency swap agreements; forward payment conversion agreements;

 118-7   agreements providing for payments based on levels of or changes in

 118-8   interest rates or currency exchange rates; agreements to exchange

 118-9   cash flows or a series of payments; agreements, including options,

118-10   puts, or calls, to hedge payment, currency, rate, spread, or other

118-11   exposure; or any other agreement that the board determines to be

118-12   necessary to further enhance the marketability, security, or

118-13   creditworthiness of water financial assistance bonds.

118-14         Sec. 17.955.  PERSONS DESIGNATED TO ACT AS AGENTS OF BOARD.

118-15   (a)  In the resolution the board may delegate authority to one or

118-16   more officers, employees, or agents designated by the board to act

118-17   on behalf of the board during the time any series of water

118-18   financial assistance bonds are outstanding to:

118-19               (1)  fix dates, prices, interest rates, amortization

118-20   schedules, redemption features, and interest payment periods;

118-21               (2)  perform any duties and obligations of the board

118-22   under a bond enhancement agreement; and

118-23               (3)  perform other procedures specified in the

118-24   resolution.

118-25         (b)  The person designated by the board may adjust the

97S0149/2                                                          

 119-1   interest on water financial assistance bonds and perform all duties

 119-2   described in a bond enhancement agreement as necessary to permit

 119-3   the water financial assistance bonds to be sold or resold at par in

 119-4   conjunction with secondary market transactions.

 119-5         Sec. 17.956.  TEXAS WATER DEVELOPMENT FUND II.  The fund is a

 119-6   special fund in the state treasury, and all water financial

 119-7   assistance bond proceeds shall be deposited in the state treasury

 119-8   to the credit of the fund.  The fund shall contain a "state

 119-9   participation account," an "economically distressed areas program

119-10   account," and a "financial assistance account," and proceeds from

119-11   the sale of water financial assistance bonds issued for the purpose

119-12   of providing financial assistance to political subdivisions shall

119-13   be credited to such accounts as provided by resolution by the

119-14   board.  By resolution, the board may create additional accounts

119-15   within the fund as the board determines are necessary or convenient

119-16   for the administration of the fund.

119-17         Sec. 17.957.  STATE PARTICIPATION ACCOUNT.  (a)  The Texas

119-18   Water Development Fund II state participation account, referred to

119-19   as the "state participation account," is an account established

119-20   within the fund in the state treasury.  Transfers shall be made

119-21   from this account as provided by this subchapter.

119-22         (b)  The state participation account is composed of:

119-23               (1)  money and assets attributable to water financial

119-24   assistance bonds designated by the board as issued for projects

119-25   described in Section 16.131;

97S0149/2                                                          

 120-1               (2)  money from the sale, transfer, or lease of a

 120-2   project described in Subdivision (1) that was acquired,

 120-3   constructed, reconstructed, developed, or enlarged with money from

 120-4   the state participation account;

 120-5               (3)  payments received under a bond enhancement

 120-6   agreement with respect to water financial assistance bonds

 120-7   designated by the board as issued for projects described in Section

 120-8   16.131;

 120-9               (4)  investment income earned on money on deposit in

120-10   the state participation account; and

120-11               (5)  any other funds, regardless of their source, that

120-12   the board directs be deposited to the credit of the state

120-13   participation account.

120-14         (c)  Money on deposit in the state participation account may

120-15   be used by the board for projects described in Section 16.131 in

120-16   the manner that the board determines necessary or convenient for

120-17   the administration of the fund.

120-18         Sec. 17.958.  ECONOMICALLY DISTRESSED AREAS PROGRAM ACCOUNT.

120-19   (a)  The Texas Water Development Fund II economically distressed

120-20   areas program account, referred to as the "economically distressed

120-21   areas program account," is an account established within the fund

120-22   in the state treasury.  Transfers shall be made from this account

120-23   as provided by this subchapter.

120-24         (b)   The economically distressed areas program account is

120-25   composed of:

97S0149/2                                                          

 121-1               (1)  money and assets attributable to water financial

 121-2   assistance bonds designated by the board as issued for projects

 121-3   described in Subchapter K;

 121-4               (2)  money provided by the federal government, the

 121-5   state, political subdivisions, and private entities for the purpose

 121-6   of paying debt service on water financial assistance bonds issued

 121-7   for purposes provided by Subchapter K;

 121-8               (3)  payments received under a bond enhancement

 121-9   agreement with respect to water financial assistance bonds

121-10   designated by the board as issued for purposes provided by

121-11   Subchapter K;

121-12               (4)  investment income earned on money on deposit in

121-13   the economically distressed areas program account; and

121-14               (5)  any other funds, regardless of their source, that

121-15   the board directs be deposited to the credit of the economically

121-16   distressed areas program account.

121-17         (c)  Money on deposit in the economically distressed areas

121-18   program account may be used by the board for purposes provided by

121-19   Subchapter K in the manner that the board determines necessary or

121-20   convenient for the administration of the fund.

121-21         Sec. 17.959.  FINANCIAL ASSISTANCE ACCOUNT.  (a)  The Texas

121-22   Water Development Fund II water financial assistance account,

121-23   referred to as the "financial assistance account," is an account

121-24   established within the fund in the state treasury.  Transfers shall

121-25   be made from this account as provided by this subchapter.

97S0149/2                                                          

 122-1         (b)  The financial assistance account is composed of:

 122-2               (1)  money and assets attributable to water financial

 122-3   assistance bonds designated by the board as issued for purposes

 122-4   described in Section 49-d-8, Article III, Texas Constitution, other

 122-5   than for purposes described in Sections 17.957 and 17.958;

 122-6               (2)  payments received under a bond enhancement

 122-7   agreement with respect to water financial assistance bonds

 122-8   designated by the board as issued for purposes described in Section

 122-9   49-d-8, Article III, Texas Constitution, other than for purposes

122-10   described in Sections 17.957 and 17.958;

122-11               (3)  investment income earned on money on deposit in

122-12   the financial assistance account; and

122-13               (4)  any other funds, regardless of their source, that

122-14   the board directs be deposited to the credit of the financial

122-15   assistance account.

122-16         (c)  Money on deposit in the financial assistance account may

122-17   be used by the board for any one or more of the purposes described

122-18   in Section 49-d-8, Article III, Texas Constitution, other than for

122-19   purposes described in Sections 17.957 and 17.958, in the manner

122-20   that the board determines necessary or convenient for the

122-21   administration of the fund.

122-22         Sec. 17.960.  BOND RESOLUTIONS.  (a)  In the resolution, the

122-23   board may make additional covenants with respect to water financial

122-24   assistance bonds and may provide for:

122-25               (1)  the flow of funds;

97S0149/2                                                          

 123-1               (2)  the establishment of accounts and subaccounts

 123-2   within the fund that the board determines are necessary or

 123-3   convenient for the administration of the fund;

 123-4               (3)  at the discretion of the board, the payment of

 123-5   fees and expenses of the board in connection with providing

 123-6   financial assistance to political subdivisions as the board

 123-7   determines are necessary or convenient for the administration of

 123-8   the fund;

 123-9               (4)  the maintenance, investment, and management of

123-10   money within the fund and any accounts established by resolution by

123-11   the board; and

123-12               (5)  any other provisions and covenants that the board

123-13   determines are necessary or convenient for the administration of

123-14   the fund.

123-15         (b)  The board may invest and reinvest money in the fund and

123-16   any account therein in any obligations or securities as provided by

123-17   the resolution or by rule adopted by the board.

123-18         (c)  The board may adopt and have executed any other

123-19   proceedings, agreements, or trust agreements or instruments

123-20   necessary and convenient in the issuance of water financial

123-21   assistance bonds, including, without limitation, bond enhancement

123-22   agreements.

123-23         Sec. 17.961.  TRANSFERS TO REVOLVING FUNDS.  (a)  In order to

123-24   implement and administer a revolving loan program established under

123-25   Title VI of the Federal Water Pollution Control Act (33 U.S.C.

97S0149/2                                                          

 124-1   Section 1381 et seq.), the board may direct the comptroller to

 124-2   transfer amounts from the financial assistance account to the state

 124-3   water pollution control revolving fund created by Section 15.601 to

 124-4   provide financial assistance pursuant to this subchapter.

 124-5         (b)  In order to implement and administer a revolving loan

 124-6   program established by any other federal legislation, including,

 124-7   without limitation, Title XIV of the federal Public Health Service

 124-8   Act, or any federal agency program under which an additional state

 124-9   revolving fund, as defined in Section 15.602, has been established,

124-10   the board may direct the comptroller to transfer amounts from the

124-11   financial assistance account to such additional state revolving

124-12   fund to provide financial assistance pursuant to this subchapter.

124-13         (c)  The board shall use the state water pollution control

124-14   revolving fund in accordance with Section 15.604(a)(4) and Section

124-15   603(d)(4), Federal Water Pollution Control Act (33 U.S.C. Section

124-16   1383), as a source of revenue to be deposited in accordance with

124-17   this subchapter for the payment of principal and interest on water

124-18   financial assistance bonds issued by the board, the proceeds of

124-19   which are deposited into the state water pollution control

124-20   revolving fund, and to make payments under a bond enhancement

124-21   agreement with respect to principal or interest on the water

124-22   financial assistance bonds.

124-23         (d)  In the event amounts are transferred to any additional

124-24   state revolving fund, as defined in Section 15.602, pursuant to

124-25   Subsection (b), the board shall, to the extent permitted by the

97S0149/2                                                          

 125-1   federal legislation or federal agency program under which such

 125-2   additional state revolving fund was established, use the additional

 125-3   state revolving fund as a source of revenue to be deposited in

 125-4   accordance with this subchapter for the payment of principal and

 125-5   interest on water financial assistance bonds issued by the board,

 125-6   the proceeds of which are deposited into the additional state

 125-7   revolving fund, and to make payments under a bond enhancement

 125-8   agreement with respect to principal or interest on the water

 125-9   financial assistance bonds.

125-10         Sec. 17.962.  STATE APPROVALS.  (a)  Water financial

125-11   assistance bonds may not be issued under this subchapter unless

125-12   such issuance has been reviewed and approved by the bond review

125-13   board.

125-14         (b)  The proceedings relating to the water financial

125-15   assistance bonds issued under this subchapter are subject to review

125-16   and approval by the attorney general in the same manner and with

125-17   the same effect as provided by Chapter 656, Acts of the 68th

125-18   Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas

125-19   Civil Statutes).

125-20         (c)  After approval by the attorney general of the

125-21   proceedings relating to water financial assistance bonds issued

125-22   under this subchapter, registration of the proceedings by the

125-23   comptroller, and delivery of the water financial assistance bonds

125-24   to the purchasers, the water financial assistance bonds are

125-25   incontestable and constitute general obligations of the state.

97S0149/2                                                          

 126-1         Sec. 17.963.  PAYMENT OF BOARD OBLIGATIONS.  (a)  The board

 126-2   shall cooperate with the comptroller to develop procedures for the

 126-3   payment of principal and interest on water financial assistance

 126-4   bonds and any obligation under a bond enhancement agreement, as the

 126-5   same become due and owing.

 126-6         (b)  If there is not enough money in any account of the fund

 126-7   available to pay the principal and interest on water financial

 126-8   assistance bonds issued for such account, including money to make

 126-9   payments by the board under a bond enhancement agreement with

126-10   respect to principal or interest on such water financial assistance

126-11   bonds, the board shall notify the comptroller of such occurrence,

126-12   and the comptroller shall transfer out of the first money coming

126-13   into the state treasury not otherwise appropriated by the

126-14   constitution the amount required to pay the obligations of the

126-15   board that are due and owing.  The comptroller shall make the

126-16   transfers required by Section 49-d-8, Article III, Texas

126-17   Constitution, and this subchapter in the manner specified in the

126-18   resolution.

126-19         Sec. 17.964.  ELIGIBLE SECURITY.  Water financial assistance

126-20   bonds are eligible to secure deposits of public funds of the state

126-21   and political subdivisions of the state.  Water financial

126-22   assistance bonds are lawful and sufficient security for deposits to

126-23   the extent of their face value.

126-24         Sec. 17.965.  LEGAL INVESTMENTS.  Water financial assistance

126-25   bonds are legal and authorized investments for:

97S0149/2                                                          

 127-1               (1)  banks;

 127-2               (2)  savings banks;

 127-3               (3)  trust companies;

 127-4               (4)  savings and loan associations;

 127-5               (5)  insurance companies;

 127-6               (6)  fiduciaries;

 127-7               (7)  trustees;

 127-8               (8)  guardians; and

 127-9               (9)  sinking funds and other public funds of the state

127-10   and its agencies and of political subdivisions of the state.

127-11         Sec. 17.966.  MUTILATED, LOST, OR DESTROYED BONDS.  The board

127-12   may provide for the replacement of mutilated, lost, or destroyed

127-13   water financial assistance bonds.

127-14         Sec. 17.967.  REFUNDING BONDS.  (a)  The board by resolution

127-15   may provide for the issuance of water financial assistance bonds to

127-16   refund outstanding bonds and water financial assistance bonds

127-17   issued under this chapter and federal contractual obligations

127-18   incurred under Section 49-d, Article III, Texas Constitution.

127-19         (b)  The board may sell the refunding water financial

127-20   assistance bonds and use the proceeds to retire any of the

127-21   outstanding obligations described in Subsection (a), exchange the

127-22   refunding water financial assistance bonds for the outstanding

127-23   bonds or water financial assistance bonds, or refund any of the

127-24   outstanding obligations described in Subsection (a) in the manner

127-25   provided by any other applicable statute, including Chapter 503,

97S0149/2                                                          

 128-1   Acts of the 54th Legislature, 1955 (Article 717k, Vernon's Texas

 128-2   Civil Statutes), and Chapter 784, Acts of the 61st Legislature,

 128-3   Regular Session, 1969 (Article 717k-3, Vernon's Texas Civil

 128-4   Statutes).

 128-5         Sec. 17.968.  SALE OF POLITICAL SUBDIVISION BONDS BY THE

 128-6   BOARD; USE OF PROCEEDS.  (a)  The board may sell or dispose of

 128-7   political subdivision bonds purchased with money in the fund to any

 128-8   person, including, without limitation, the Texas Water Resources

 128-9   Finance Authority, and the board, in such manner as it shall

128-10   determine, may apply the proceeds of the sale of political

128-11   subdivision bonds held by the board to:

128-12               (1)  pay debt service on water financial assistance

128-13   bonds issued under this subchapter; or

128-14               (2)  provide financial assistance to political

128-15   subdivisions for any one or more of the purposes authorized by

128-16   Section 49-d-8, Article III, Texas Constitution.

128-17         (b)  The board shall sell the political subdivision bonds at

128-18   the price and under the terms that it determines to be reasonable.

128-19         Sec.  17.969.  TAX EXEMPT BONDS.  Since the board is

128-20   performing an essential governmental function in the exercise of

128-21   the powers conferred on it by this chapter, water financial

128-22   assistance bonds issued under this subchapter and the interest and

128-23   income from the water financial assistance bonds, including any

128-24   profit made on the sale of water financial assistance bonds, and

128-25   all fees, charges, gifts, grants, revenues, receipts, and other

97S0149/2                                                          

 129-1   money received or pledged to pay or secure the payment of water

 129-2   financial assistance bonds are free from taxation and assessments

 129-3   of every kind by this state and any city, county, district,

 129-4   authority, or other political subdivision of this state.

 129-5         Sec. 17.970.  ENFORCEMENT BY MANDAMUS.  Payment of water

 129-6   financial assistance bonds and obligations incurred under bond

 129-7   enhancement agreements and performance of official duties

 129-8   prescribed by Section 49-d-8, Article III, Texas Constitution, and

 129-9   this subchapter may be enforced in a court of competent

129-10   jurisdiction by mandamus or other appropriate proceedings.

129-11         Sec. 17.971.  SUBCHAPTER CUMULATIVE OF OTHER LAWS.  (a)  This

129-12   subchapter is cumulative of other laws on the subject, and the

129-13   board may use provisions of other applicable laws in the issuance

129-14   of water financial assistance bonds and the execution of bond

129-15   enhancement agreements, but this subchapter is wholly sufficient

129-16   authority for the issuance of water financial assistance bonds, the

129-17   execution of bond enhancement agreements, and the performance of

129-18   all other acts and procedures authorized by this subchapter.

129-19         (b)  In addition to other authority granted by this

129-20   subchapter, the board may exercise the authority granted to the

129-21   governing body of an issuer with regard to the issuance of

129-22   obligations under Chapter 656, Acts of the 68th Legislature,

129-23   Regular Session, 1983 (Article 717q, Vernon's Texas Civil

129-24   Statutes).

129-25         (c)  In exercising the powers granted to the board under this

97S0149/2                                                          

 130-1   subchapter, the board may exercise any powers granted to it under

 130-2   this chapter and Chapter 16 including, without limitation, the

 130-3   powers described in Subchapters D, E, F, G, and K, notwithstanding

 130-4   any provision in this chapter or Chapter 16 that may be

 130-5   inconsistent with or in conflict with the provisions of this

 130-6   subchapter as a result of the establishment of the fund as a fund

 130-7   separate and distinct from the existing Texas Water Development

 130-8   Fund, it being the intent of the legislature that the financial

 130-9   assistance made available to political subdivisions under this

130-10   subchapter, in pursuance of the authority granted by Section

130-11   49-d-8, Article III, Texas Constitution, be provided by the board

130-12   in the manner the board deems necessary and convenient to achieve

130-13   the purposes of Section 49-d-8, Article III, Texas Constitution,

130-14   and notwithstanding any other existing provisions in this chapter

130-15   or Chapter 16, the provisions of this chapter and Chapter 16 shall

130-16   be inclusive of the provisions of this subchapter and Section

130-17   49-d-8, Article III, Texas Constitution.

130-18         SECTION 4.04.  Subdivision (7), Section 17.001, Water Code,

130-19   is amended to read as follows:

130-20               (7)  "Water supply project" means:

130-21                     (A)  any engineering undertaking or work to

130-22   conserve and develop surface or subsurface water resources of the

130-23   state, including the control, storage, and preservation of its

130-24   storm water and floodwater and the water of its rivers and streams

130-25   for all useful and lawful purposes by the acquisition, improvement,

97S0149/2                                                          

 131-1   extension, or construction of dams, reservoirs, and other water

 131-2   storage projects, which may include flood storage, including

 131-3   underground storage projects, filtration and water treatment

 131-4   plants, including any system necessary to transport water from

 131-5   storage to points of distribution or from storage to filtration and

 131-6   treatment plants, including facilities for transporting water

 131-7   therefrom to wholesale purchasers or to retail purchasers as

 131-8   authorized by Section 17.072(c) of this code, by the acquisition,

 131-9   by purchase of rights in [underground] water, by the drilling of

131-10   wells, or for any one or more of these purposes or methods; [or]

131-11                     (B)  any engineering undertaking or work outside

131-12   the state to provide for the maintenance and enhancement of the

131-13   quality of water by eliminating saline inflow through well pumping

131-14   and deep well injection of brine; or

131-15                     (C)  any undertaking or work by Texas political

131-16   subdivisions to conserve, convey, or develop surface or subsurface

131-17   water resources in areas outside Texas if such undertaking or work

131-18   results in water being available for use in or for the benefit of

131-19   Texas.

131-20         SECTION 4.05.  Section 17.001, Water Code, is amended by

131-21   amending Subdivision (17) and adding Subdivision (25) to read as

131-22   follows:

131-23               (17)  "Financial assistance" means any loan of funds

131-24   from the water supply account, the water quality enhancement

131-25   account, or the flood control account to a political subdivision

97S0149/2                                                          

 132-1   for construction of a water supply project, treatment works, or

 132-2   flood control measures through the purchase of bonds or other

 132-3   obligations of the political subdivision, and any loan of funds the

 132-4   source of which is the proceeds from water financial assistance

 132-5   bonds.

 132-6               (25)  "Water financial assistance bonds" means the

 132-7   Texas Water Development Bonds authorized to be issued by Section

 132-8   49-d-8, Article III, Texas Constitution, and dedicated to use for

 132-9   the purposes described in that section.

132-10         SECTION 4.06.  Section 17.011, Water Code, is amended by

132-11   adding Subsection (c) to read as follows:

132-12         (c)  Notwithstanding any other provision of this section, the

132-13   board by resolution may issue water financial assistance bonds for

132-14   any one or more of the purposes described in Section 49-d-8,

132-15   Article III, Texas Constitution, in an aggregate principal amount

132-16   not to exceed the amount of bonds authorized by Section 49-d-8,

132-17   Article III, Texas Constitution, in accordance with the provisions

132-18   of Subchapter L.

132-19         SECTION 4.07.  Section 17.0111, Water Code, is amended to

132-20   read as follows:

132-21         Sec. 17.0111.  DEDICATION OF CERTAIN BONDS.  No more than

132-22   $250,000,000 in principal [Fifty percent of the] amount of bonds

132-23   authorized by Article III, Section 49-d-7, of the Texas

132-24   Constitution, and issued under either that section or Article III,

132-25   Section 49-d-8, of the Texas Constitution, may be [is] dedicated to

97S0149/2                                                          

 133-1   the purposes provided by Subchapter K [of this chapter].

 133-2         SECTION 4.08.  Section 17.182, Water Code, is amended to read

 133-3   as follows:

 133-4         Sec. 17.182.  PROCEEDS FROM SALE.  Unless used to pay debt

 133-5   service on bonds issued under this chapter, the proceeds from the

 133-6   sale of political subdivision bonds held by the board either shall

 133-7   be credited to the account from which financial assistance was made

 133-8   to the political subdivision, except that accrued interest shall be

 133-9   credited to the interest and sinking fund, or shall be deposited to

133-10   the credit of the Texas Water Development Fund II, established

133-11   within the state treasury pursuant to Section 49-d-8, Article III,

133-12   Texas Constitution.  However, no such proceeds shall be deposited

133-13   to the credit of the Texas Water Development Fund II unless the

133-14   executive administrator certifies to the board that the transfer of

133-15   such proceeds into the Texas Water Development Fund II will not

133-16   cause the board, in the fiscal year the transfer is made, to direct

133-17   the comptroller to transfer out of the first money coming into the

133-18   state treasury during that fiscal year funds sufficient for the

133-19   payment of principal of or interest on water development bonds,

133-20   other than water development bonds issued for the purposes

133-21   described in Subsection (e), Section 49-d-7, Article III, Texas

133-22   Constitution, coming due in that fiscal year.

133-23         SECTION 4.09.  Section 17.278, Water Code, is amended to read

133-24   as follows:

133-25         Sec. 17.278.  FINDINGS REGARDING PERMITS.  If an application

97S0149/2                                                          

 134-1   includes a proposal for a wastewater treatment plant, the board may

 134-2   not deliver funds for the wastewater treatment plant until the

 134-3   applicant has obtained a permit for the construction and operation

 134-4   of the plant and approval of the plans and specifications for the

 134-5   plant from the commission.  If an application includes a proposal

 134-6   for a wastewater treatment plant that is located outside the

 134-7   jurisdiction of this state and that is not subject to the

 134-8   permitting authority of the commission, the board may not deliver

 134-9   funds for the wastewater treatment plant until after the board

134-10   reviews the plans and specifications in coordination with the

134-11   commission and finds that the wastewater treatment plant is capable

134-12   of producing effluent that will meet federal and Texas-approved

134-13   water quality standards.

134-14                ARTICLE 5.  SMALL COMMUNITIES ASSISTANCE

134-15         SECTION 5.01.  Section 5.311, Water Code, is amended to read

134-16   as follows:

134-17         Sec. 5.311.  DELEGATION OF RESPONSIBILITY.  (a)  The

134-18   commission may delegate to an administrative law judge of the State

134-19   Office of Administrative Hearings the responsibility to hear any

134-20   matter before the commission and the authority to issue orders

134-21   related to interim rates under Chapter 13.

134-22         (b)  Except for a hearing related to interim rates as

134-23   provided in Subsection (a), the [The] administrative law judge

134-24   shall report to the commission on a [the] hearing in the manner

134-25   provided by law.

97S0149/2                                                          

 135-1         SECTION 5.02.  Subdivisions (11), (21), and (24), Section

 135-2   13.002, Water Code, are amended to read as follows:

 135-3               (11)  "Member" means a person who holds a membership in

 135-4   a water supply or sewer service corporation and [who either

 135-5   receives water or sewer utility service from the corporation or] is

 135-6   a record owner of a fee simple title to property in an area served

 135-7   by a water supply or sewer service corporation or a person who is

 135-8   granted a membership and who either currently receives or will be

 135-9   eligible to receive water or sewer utility service from the

135-10   corporation.  In determining member control of a water supply or

135-11   sewer service corporation, a person is entitled to only one vote

135-12   regardless of the number of memberships the person owns.

135-13               (21)  "Service" means any act [done, rendered, or]

135-14   performed, anything furnished or supplied, and any facilities or

135-15   lines dedicated or [facility] used[, furnished, or supplied] by a

135-16   retail public utility in the performance of its duties under this

135-17   chapter to its patrons, its employees, other retail public

135-18   utilities, and the public, as well as the interchange of facilities

135-19   between two or more retail public utilities.

135-20               (24)  "Water supply or sewer service corporation" means

135-21   a nonprofit[, member-owned, member-controlled] corporation

135-22   organized and operating under Chapter 76, Acts of the 43rd

135-23   Legislature, 1st Called Session, 1933 (Article 1434a, Vernon's

135-24   Texas Civil Statutes) that provides potable water service or sewer

135-25   service for compensation and that has  adopted and is operating in

97S0149/2                                                          

 136-1   accordance with bylaws or articles of incorporation which ensure

 136-2   that it is member-owned and member-controlled.  The term does not

 136-3   include a corporation that provides retail water or sewer service

 136-4   to a person who is not a member, except that the corporation may

 136-5   provide retail water or sewer service to a person who is not a

 136-6   member if the person only builds on or develops property to sell to

 136-7   another and the service is provided on an interim basis before the

 136-8   property is sold.

 136-9         SECTION 5.03.  Section 13.181, Water Code, is amended to read

136-10   as follows:

136-11         Sec. 13.181.  POWER TO ENSURE COMPLIANCE; RATE REGULATION.

136-12   (a)  Except for the provisions of Section 13.192, this subchapter

136-13   shall apply only to a utility and shall not be applied to

136-14   municipalities, counties, districts, or water supply or sewer

136-15   service corporations.

136-16         (b)  Subject to this chapter, the commission has all

136-17   authority and power of the state to ensure compliance with the

136-18   obligations of utilities under this chapter.  For this purpose the

136-19   regulatory authority may fix and regulate rates of utilities,

136-20   including rules and regulations for  determining the classification

136-21   of customers and services and for determining the applicability of

136-22   rates.  A rule or order of the regulatory authority may not

136-23   conflict with the rulings of any federal  regulatory body.  [Except

136-24   Section 13.192, this subchapter shall apply only to a utility and

136-25   shall not be applied to municipalities, counties, districts, or

97S0149/2                                                          

 137-1   water supply or sewer service corporations.]  The commission may

 137-2   adopt rules which authorize a utility which is permitted under

 137-3   Section 13.242(c) to provide service without a certificate of

 137-4   public convenience and necessity to request or implement a rate

 137-5   increase and operate according to rules, regulations, and standards

 137-6   of service other than those otherwise required under this chapter

 137-7   provided that rates are just and reasonable for customers and the

 137-8   utility and that service is safe, adequate, efficient, and

 137-9   reasonable.

137-10         SECTION 5.04.  Section 13.183, Water Code, is amended by

137-11   adding Subsection (c) to read as follows:

137-12         (c)  To ensure that retail customers receive a higher quality

137-13   or more reliable water or sewer service, to encourage

137-14   regionalization, or to maintain financially stable and technically

137-15   sound utilities, the regulatory authority may develop methodologies

137-16   for water or wastewater rates based on factors other than rate of

137-17   return and those specified in Section 13.185.  Overall revenues

137-18   determined pursuant to a methodology developed under this section

137-19   must provide revenues to the utility that satisfy the requirements

137-20   of Subsection (a) but must also be reasonable for the customers in

137-21   consideration of the enhanced quality or reliability of the

137-22   services provided.

137-23         SECTION 5.05.  Subsection (a), Section 13.184, Water Code, is

137-24   amended to read as follows:

137-25         (a)  Unless the regulatory authority adopts rules to further

97S0149/2                                                          

 138-1   the purposes stated in Section 13.183(c), the [The] regulatory

 138-2   authority may not prescribe any rate that will yield more than a

 138-3   fair return on the invested capital used and useful in rendering

 138-4   service to the public.

 138-5         SECTION 5.06.  Subsection (a), Section 13.185, Water Code, is

 138-6   amended to read as follows:

 138-7         (a)  Except as provided in Sections 13.183(c) and 13.184(a),

 138-8   the [The] components of invested capital and net income shall be

 138-9   determined according to the rules stated in this section.

138-10         SECTION 5.07.  Subchapter G, Chapter 13, Water Code, is

138-11   amended by adding Section 13.241 to read as follows:

138-12         Sec. 13.241.  GRANTING OR AMENDING CERTIFICATES.  In

138-13   determining whether to grant or amend a certificate of public

138-14   convenience and necessity, the commission shall ensure that the

138-15   groundwater and surface water resources in Texas are adequately

138-16   protected and efficiently used and shall consider regionalization

138-17   or consolidation of systems whenever it is economically feasible or

138-18   otherwise in the public interest.  A retail public utility

138-19   requesting a certificate of public convenience and necessity to

138-20   provide water or sewer service must satisfy the commission that a

138-21   safe, continuous, and adequate supply of drinking water meeting the

138-22   requirements of Chapter 341, Health and Safety Code, or this code

138-23   or continuous and adequate sewer service meeting permit, water

138-24   quality, and other requirements of this code will be provided to

138-25   the public and that the retail public utility will maintain the

97S0149/2                                                          

 139-1   necessary financial resources and managerial expertise to provide

 139-2   continuous and adequate service to the public.

 139-3         SECTION 5.08.  Section 13.246, Water Code, is amended by

 139-4   amending Subsection (c) and adding Subsections (d) and (e) to read

 139-5   as follows:

 139-6         (c)  Certificates of convenience and necessity shall be

 139-7   granted or amended on a nondiscriminatory basis  after

 139-8   consideration by the commission of the adequacy of service

 139-9   currently provided to the requested area, the need for additional

139-10   service in the requested area, the effect of the granting of a

139-11   certificate on the recipient of the certificate and on any retail

139-12   public utility of the same kind already serving the proximate area,

139-13   the ability of the applicant to provide adequate service, the

139-14   efforts of the applicant to extend service to any economically

139-15   distressed areas located within the service areas certificated to

139-16   the applicant, the feasibility of obtaining service from an

139-17   adjacent retail public utility, the financial stability of the

139-18   applicant, including, if applicable, the adequacy of the

139-19   applicant's debt-equity ratio, environmental integrity, and the

139-20   probable improvement of service or lowering of cost to consumers in

139-21   that area resulting from the granting of the certificate.  In this

139-22   subsection, "economically distressed areas" are those areas as

139-23   defined in Chapter 15.

139-24         (d)  The commission may require that an applicant submit a

139-25   business plan demonstrating adequate financial, managerial, and

97S0149/2                                                          

 140-1   technical capability for providing continuous and adequate service

 140-2   to the requested area and any areas currently certificated to the

 140-3   applicant.  The commission may include conditions in the

 140-4   certificate of public convenience and necessity to ensure that the

 140-5   certificate holder complies with the business plan.

 140-6         (e)  The commission may require an applicant to provide

 140-7   financial assurance in a form acceptable to the commission to

 140-8   ensure that continuous and adequate service is provided.

 140-9         SECTION 5.09.  Section 13.253, Water Code, is amended to read

140-10   as follows:

140-11         Sec. 13.253.  IMPROVEMENTS IN SERVICE; INTERCONNECTING

140-12   SERVICE.  After notice and hearing, the commission may:

140-13               (1)  order any retail public utility that possesses or

140-14   is required by law to possess a certificate of public convenience

140-15   and necessity to provide specified improvements in its service in a

140-16   defined area if service in that area is inadequate or is

140-17   substantially inferior to service in a comparable area and it is

140-18   reasonable to require the retail public utility to provide the

140-19   improved service;

140-20               (2)  order two or more retail public utilities that

140-21   hold or are required by this code to hold a certificate of public

140-22   convenience and necessity [or water supply or sewer service

140-23   corporations] to establish specified facilities for the

140-24   interconnecting service; or

140-25               (3)  issue an emergency order, with or without a

97S0149/2                                                          

 141-1   hearing, under Section 13.041 of this code.

 141-2         SECTION 5.10.  Section 13.254, Water Code, is amended to read

 141-3   as follows:

 141-4         Sec. 13.254.  REVOCATION OR AMENDMENT OF CERTIFICATE.

 141-5   (a)  The commission at any time after notice and hearing may revoke

 141-6   or amend any certificate of public convenience and necessity with

 141-7   the written consent of the certificate holder or if it finds that:

 141-8               (1)  the certificate holder  has never provided, is no

 141-9   longer providing, or has failed to provide continuous and adequate

141-10   service in the area, or part of the area, covered by the

141-11   certificate including economically distressed areas as defined in

141-12   Chapter 15;

141-13               (2)  the cost of providing service makes the service

141-14   offered by the certificate holder so prohibitively expensive as to

141-15   constitute denial of service, or for commercial developments or

141-16   residential developments with lot sizes of less than two acres, the

141-17   cost of obtaining service from the currently certificated retail

141-18   public utility makes the development economically infeasible but

141-19   not necessarily prohibitively expensive;

141-20               (3)  the certificate holder has agreed to allow another

141-21   retail public utility to provide service within its service area

141-22   without amending its certificate; or

141-23               (4)  the certificate holder has failed to file a cease

141-24   and desist action pursuant to Section 13.252 within 90 days of the

141-25   date that it became aware that another retail public utility was

97S0149/2                                                          

 142-1   providing service within the certificate holder's service area,

 142-2   unless the certificate holder is able to demonstrate good cause for

 142-3   its failure to file such action within the 90-day period.

 142-4         (b)  Upon written request from the certificate holder, the

 142-5   executive director may cancel the certificate of a utility or water

 142-6   supply corporation authorized by rule to operate without a

 142-7   certificate of public convenience and necessity under Section

 142-8   13.242(c).

 142-9         (c)  If the certificate of any retail public utility is

142-10   revoked or amended, the commission may require one or more retail

142-11   public utilities,  with their consent, or one or more public

142-12   utilities to provide service in the area in question.

142-13         (d)  A retail public utility may not in any way render retail

142-14   water or sewer service directly or indirectly to the public in an

142-15   area which has been decertified under this section without the

142-16   consent of the retail public utility which previously held the

142-17   certificate of public convenience and necessity unless it has first

142-18   obtained from the commission a certificate of public convenience

142-19   and necessity.  If the commission decertifies a retail public

142-20   utility without its consent under this section, the commission

142-21   shall determine the extent to which any utility facilities

142-22   currently used and useful for providing service or utility

142-23   facilities constructed for the purpose of serving the area being

142-24   decertified will be rendered useless as a result of this commission

142-25   action.  The commission shall also determine the impact on the

97S0149/2                                                          

 143-1   retail public utility's ability to repay any debts owed for

 143-2   facilities or services dedicated to serve the area being

 143-3   decertified.  As a condition of granting a certificate of public

 143-4   convenience and necessity to another retail public utility to serve

 143-5   the area, the commission shall require the new utility service

 143-6   provider to compensate the decertified retail public utility.  In

 143-7   determining the amount of compensation, the commission shall

 143-8   consider:

 143-9               (1)  any revenues which would have been generated by

143-10   existing or potential customers in the area decertified to the

143-11   extent that those revenues would have been used to repay debts owed

143-12   to the state or federal government for facilities constructed for

143-13   the purpose of providing service to the area decertified;

143-14               (2)  any revenues which would have been generated by

143-15   existing or potential customers in the area decertified to the

143-16   extent that those revenues would have been used to repay debts to

143-17   persons other than affiliated interests for the construction of

143-18   facilities to provide service to the area decertified; and

143-19               (3)  the retail public utility's actual unrecovered

143-20   investment in any facilities no longer useful or expected to be

143-21   needed by the retail public utility for serving its remaining

143-22   service area within a future time period that would allow recovery

143-23   of the retail public utility's actual unrecovered investment,

143-24   unless the commission's action is for a reason other than the

143-25   certificated retail public utility's failure to extend service to

97S0149/2                                                          

 144-1   qualified applicants in the area within a reasonable time period or

 144-2   because service to qualified service applicants is deemed

 144-3   prohibitively expensive.

 144-4         (e)  The commission may require payment of the compensation

 144-5   to a decertified retail public utility in a lump sum or may allow

 144-6   payment to be made by the newly certificated retail public utility

 144-7   on a per-customer basis as new customers are added in the

 144-8   decertified area, after considering the financial impact on the

 144-9   decertified retail public utility.

144-10         SECTION 5.11.  Subsection (a), Section 13.301, Water Code, is

144-11   amended to read as follows:

144-12         (a)  A utility or a water supply or sewer service corporation

144-13   shall notify the commission by filing a written application and

144-14   shall give public notice unless public notice is waived by the

144-15   executive director for good cause shown at least 120 days before

144-16   the effective date  of any sale, acquisition, lease, or rental of

144-17   any water or sewer system required by law to possess a certificate

144-18   of public convenience and necessity or of any merger or

144-19   consolidation with such a utility or water supply or sewer service

144-20   corporation.  The application shall include a business plan

144-21   demonstrating adequate financial, managerial, and technical

144-22   capability of the person purchasing or acquiring the water or sewer

144-23   system for providing continuous and adequate service to the

144-24   requested area and any areas currently certificated to the person

144-25   purchasing or acquiring the water or sewer system.

97S0149/2                                                          

 145-1         SECTION 5.12.  Subsection (a), Section 13.302, Water Code, is

 145-2   amended to read as follows:

 145-3         (a)  A utility may not purchase voting stock in another

 145-4   utility doing business in this state and a person may not acquire a

 145-5   controlling interest in a utility doing business in this state

 145-6   unless the person or utility notifies the commission by filing a

 145-7   written application of the proposed purchase or acquisition not

 145-8   later than the 61st day before the date on which the transaction is

 145-9   to occur.  If a person is acquiring a controlling interest, the

145-10   application must also include a business plan demonstrating

145-11   adequate financial, managerial, and technical capability of the

145-12   person acquiring controlling interest in the utility for providing

145-13   continuous and adequate service.

145-14         SECTION 5.13.  Section 13.412, Water Code, is amended by

145-15   adding Subsections (f) and (g) to read as follows:

145-16         (f)  Notwithstanding Section 64.021, Civil Practice and

145-17   Remedies Code, a receiver appointed under this section may seek

145-18   commission approval to acquire the water or sewer utility

145-19   facilities and transfer the certificate of public convenience and

145-20   necessity of the system in receivership.  Application shall be in

145-21   accordance with Subchapter H.

145-22         (g)  For purposes of this section and Section 13.4132 of this

145-23   code, abandonment may include but is not limited to:

145-24               (1)  failure to pay bills or other obligations to

145-25   electric or gas utilities or other retail public utilities

97S0149/2                                                          

 146-1   resulting in notices of discontinuance of necessary services;

 146-2               (2)  failure to provide appropriate water or wastewater

 146-3   treatment resulting in potential health hazards;

 146-4               (3)  failure to adequately maintain facilities

 146-5   resulting in potential health hazards, extended outages, or

 146-6   repeated service interruptions;

 146-7               (4)  failure to provide adequate notice to customers of

 146-8   existing or potential health hazards;

 146-9               (5)  failure to secure an alternative water supply when

146-10   available during outages;

146-11               (6)  displaying a pattern of hostility or repeated

146-12   failure to respond to customers or the commission;

146-13               (7)  notification by the utility owner to the

146-14   commission that the owner is abandoning the system; or

146-15               (8)  inability of the commission to contact the utility

146-16   because the utility has failed to keep the commission informed on

146-17   how to contact the utility for normal business purposes or

146-18   emergencies.

146-19         SECTION 5.14.  Subsections (a) and (c), Section 13.4132,

146-20   Water Code, are amended to read as follows:

146-21         (a)  The commission, after providing to the utility notice

146-22   and an opportunity to be heard at a commission meeting as an item

146-23   on its agenda [for a hearing], may authorize a willing person to

146-24   temporarily manage and operate a utility that has discontinued or

146-25   abandoned operations or the provision of services or is being or

97S0149/2                                                          

 147-1   has been referred to the attorney general for the appointment of a

 147-2   receiver under Section 13.412 of this code.

 147-3         (c)  A person appointed under this section has the powers and

 147-4   duties necessary to ensure the continued operation of the utility

 147-5   and the provision of continuous and adequate services to customers,

 147-6   including the power and duty to:

 147-7               (1)  read meters;

 147-8               (2)  bill for utility services;

 147-9               (3)  collect revenues;

147-10               (4)  disburse funds; [and]

147-11               (5)  access all system components; and

147-12               (6)  request rate increases.

147-13         SECTION 5.15.  Section 15.602, Water Code, is amended to read

147-14   as follows:

147-15         Sec. 15.602.  DEFINITIONS.  In this subchapter:

147-16               (1)  "Additional state revolving fund" means any state

147-17   revolving fund hereafter established by the board to provide

147-18   financial assistance to political subdivisions for public works in

147-19   accordance with a capitalization grant program hereafter

147-20   established by a federal agency or otherwise authorized by federal

147-21   law.

147-22               (2)  "Authorized investments" means any authorized

147-23   investments described in Section 404.024, Government Code.

147-24               (3)  "Community water system" means a public water

147-25   system that:

97S0149/2                                                          

 148-1                     (A)  serves at least 15 service connections used

 148-2   by year-round residents of the area served by the system; or

 148-3                     (B)  regularly serves at least 25 year-round

 148-4   residents.

 148-5               (4)  "Construction" shall have the meaning assigned by

 148-6   the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.).

 148-7               (5)  "Disadvantaged community" means an area meeting

 148-8   criteria established by board rule, which criteria shall be based

 148-9   on measures that may include single-family residential property

148-10   valuation, income levels of residents of the area, or other

148-11   similarly appropriate measures.

148-12               (6) [(4)]  "Federal Act" means the Federal Water

148-13   Pollution Control Act, as amended (33 U.S.C. 1251 et seq.).

148-14               (7)  "Nonprofit noncommunity water system" means a

148-15   public water system that is not operated for profit and that:

148-16                     (A)  is owned by a political subdivision or

148-17   nonprofit entity; and

148-18                     (B)  is not a community water system.

148-19               (8) [(5)]  "Political subdivision" means a

148-20   municipality, intermunicipal, interstate, or state agency, [or] any

148-21   other public entity eligible for assistance under this subchapter,

148-22   or a nonprofit water supply corporation created and operating under

148-23   Chapter 76, Acts of the 43rd Legislature, 1st Called Session, 1933

148-24   (Article 1434a, Vernon's Texas Civil Statutes), if such entity is

148-25   eligible for financial assistance under federal law establishing

97S0149/2                                                          

 149-1   the state revolving fund or an additional state revolving fund.

 149-2               (9)  "Public water system" means a system that is owned

 149-3   by any person and that meets the definition of public water system

 149-4   in the Safe Drinking Water Act.

 149-5               (10) [(6)]  "Public works" means any project to

 149-6   acquire, construct, improve, repair, or otherwise provide any

 149-7   buildings, structures, facilities, equipment, or other real or

 149-8   personal property or improvements designed for public use,

 149-9   protection, or enjoyment undertaken by a political subdivision and

149-10   paid for, in whole or in part, out of public funds.

149-11               (11) [(7)]  "Revolving fund" means the state water

149-12   pollution control revolving fund.

149-13               (12)  "Safe Drinking Water Act" means Title XIV of the

149-14   federal Public Health Service Act, commonly known as the Safe

149-15   Drinking Water Act, as amended (42 U.S.C. Section 300f et seq.).

149-16               (13)  "Safe drinking water revolving fund" means the

149-17   fund established by the board as an additional state revolving fund

149-18   to provide  financial assistance in accordance with the federal

149-19   program established pursuant to the provisions of the Safe Drinking

149-20   Water Act.

149-21               (14) [(8)]  "Treatment works" has the meaning

149-22   established by the federal act and the eligible components of the

149-23   management programs established by Sections 319 and 320 of the

149-24   federal act.

149-25         SECTION 5.16.  Subchapter J, Chapter 15, Water Code, is

97S0149/2                                                          

 150-1   amended by adding Section 15.6041 to read as follows:

 150-2         Sec. 15.6041.  FINANCIAL ASSISTANCE UNDER THE SAFE DRINKING

 150-3   WATER REVOLVING FUND.  (a)  The safe drinking water revolving fund

 150-4   shall be administered by the board under this subchapter and rules

 150-5   adopted by the board.  The safe drinking water revolving fund shall

 150-6   be held and administered by the board in the same manner as

 150-7   provided by Section 15.603, except that the safe drinking water

 150-8   revolving fund shall be held and administered in accordance with

 150-9   the Safe Drinking Water Act and shall be used to provide financial

150-10   assistance in accordance with that act and in the manner provided

150-11   by rules adopted by the board:

150-12               (1)  to political subdivisions for community water

150-13   systems;

150-14               (2)  to persons other than political subdivisions for

150-15   community water systems or nonprofit noncommunity water systems

150-16   from the account established by Subsection (b)(1);

150-17               (3)  to persons, including political subdivisions, for

150-18   service to disadvantaged communities from the account established

150-19   by Subsection (b)(2); and

150-20               (4)  for other purposes authorized by the Safe Drinking

150-21   Water Act.

150-22         (b)  In addition to other accounts the board may establish in

150-23   the safe drinking water revolving fund, the board shall establish

150-24   the following separate accounts:

150-25               (1)  the community/noncommmunity water system financial

97S0149/2                                                          

 151-1   assistance account, to be used solely for providing financial

 151-2   assistance to persons, other than political subdivisions, providing

 151-3   services through a community water system or a nonprofit

 151-4   noncommunity water system, which account shall be composed solely

 151-5   of funds appropriated by the legislature, funds provided as gifts

 151-6   or grants by the United States government, interest earnings on

 151-7   amounts credited to the account, and repayments of loans made from

 151-8   the account; and

 151-9               (2)  the disadvantaged community account, to be used

151-10   solely for providing financial assistance under the terms of

151-11   Subsections (c) and (d), which account shall be composed solely of

151-12   funds appropriated by the legislature, funds provided as gifts or

151-13   grants by the United States government, interest earnings on

151-14   amounts credited to the account, and repayments of loans made from

151-15   the account.

151-16         (c)  The board may provide financial assistance from the

151-17   disadvantaged community account to:

151-18               (1)  a political subdivision:

151-19                     (A)  that is a disadvantaged community; or

151-20                     (B)  for a project serving an area that:

151-21                           (i)  is located outside the boundaries of

151-22   the political subdivision; and

151-23                           (ii)  meets the definition of a

151-24   disadvantaged community; or

151-25               (2)  an owner of a community water system that is

97S0149/2                                                          

 152-1   ordered by the commission to provide service to a disadvantaged

 152-2   community, provided that the financial assistance is for the sole

 152-3   purpose of providing service to a disadvantaged community.

 152-4         (d)  In providing financial assistance from the disadvantaged

 152-5   community account, the board shall determine the amount of a loan

 152-6   which the political subdivision cannot repay based on affordability

 152-7   criteria established by the board by rule.  The board shall forgive

 152-8   repayment of that portion of the principal of the loan which the

 152-9   board determines the political subdivision cannot repay.  Financial

152-10   assistance from the disadvantaged community account may not exceed

152-11   the allowable percentage of the amount of the capitalization grant

152-12   received by the state pursuant to the Safe Drinking Water Act.

152-13         SECTION 5.17.  Subsections (c) and (g), Section 15.603, Water

152-14   Code, are amended to read as follows:

152-15         (c)  The revolving fund consists of money derived from

152-16   federal grants, direct appropriations, investment earnings on

152-17   amounts credited to the revolving fund, and, at the board's

152-18   discretion, from any and all sources available [to provide the

152-19   required state match for the purposes of this subchapter].

152-20         (g)  The revolving fund and any accounts established in the

152-21   revolving fund shall be kept and maintained by or at the direction

152-22   of the board and do not constitute and are not a part of the State

152-23   Treasury.  However, at the direction of the board, the revolving

152-24   fund or accounts in the revolving fund may be kept and held in

152-25   escrow and in trust by the comptroller [State Treasurer] for and on

97S0149/2                                                          

 153-1   behalf of the board, shall be used only as provided by this

 153-2   subchapter, and pending such use shall be invested in authorized

 153-3   investments as provided by any order, resolution, or rule of the

 153-4   board.  Legal title to money and investments in the revolving fund

 153-5   is in the board unless or until paid out as provided by this

 153-6   subchapter, the federal act, and the rules of the board.  The

 153-7   comptroller [State Treasurer], as custodian, shall administer the

 153-8   funds strictly and solely as provided by this subchapter and in the

 153-9   orders, resolutions, and rules, and the state shall take no action

153-10   with respect to the revolving fund other than that specified in

153-11   this subchapter, the federal act, and the rules of the board.

153-12         SECTION 5.18.  Section 341.031, Health and Safety Code, is

153-13   amended to read as follows:

153-14         Sec. 341.031.  PUBLIC DRINKING WATER.  (a)  In order to

153-15   preserve the health, safety, and welfare of the citizens of the

153-16   state, the commission shall ensure that public drinking water

153-17   supply systems:

153-18               (1)  provide a continuous, adequate, and safe supply of

153-19   drinking water; and

153-20               (2)  are financially stable and technically sound.

153-21         (b)  The commission shall encourage and promote the

153-22   development and use of regional and area-wide drinking water supply

153-23   systems.

153-24         (c)  Public drinking water must be free from deleterious

153-25   matter and must comply with the standards established by the

97S0149/2                                                          

 154-1   commission[, the United States Public Health Service,] or the

 154-2   United States Environmental Protection Agency.  The commission may

 154-3   adopt and enforce rules to implement the federal Safe Drinking

 154-4   Water Act (42 U.S.C. Section 300f et seq.).

 154-5         (d) [(b)]  In a public place or an establishment catering to

 154-6   the public, a common drinking cup may not be used.

 154-7         (e) [(c)]  Drinking water may not be served except in

 154-8   sanitary containers or through other sanitary mediums.

 154-9         (f) [(d)]  In this section, "common drinking cup" means a

154-10   water or other beverage receptacle used for serving more than one

154-11   person.  The term does not include a water or other beverage

154-12   receptacle that is properly washed and sterilized after each use.

154-13         SECTION 5.19.  Section 341.035, Health and Safety Code, is

154-14   amended to read as follows:

154-15         Sec. 341.035.  APPROVED PLANS REQUIRED FOR PUBLIC WATER

154-16   SUPPLIES.  (a)  Unless a person is a political subdivision or has

154-17   executed an agreement with a political subdivision to transfer the

154-18   ownership and operation of the water supply system to the political

154-19   subdivision, a [A] person [contemplating] establishing a drinking

154-20   water supply system for public use must submit a business plan to

154-21   the commission for review and approval prior to beginning

154-22   construction demonstrating adequate financial, managerial, and

154-23   technical capability of the system management and ownership.  The

154-24   commission may require an applicant to provide financial assurance

154-25   in a form acceptable to the commission to ensure a continuous and

97S0149/2                                                          

 155-1   safe supply of drinking water.

 155-2         (b)  After the business plan is approved, if one is required,

 155-3   but in any case before construction begins, completed plans and

 155-4   specifications must be submitted to the commission for review and

 155-5   approval in accordance with standards established by the commission

 155-6   [before  construction of the system].  [The commission shall

 155-7   approve plans that conform to the state's water safety laws.]  The

 155-8   water supply system may be constructed [established] only after

 155-9   [on] the commission's approval is received.

155-10         (c) [(b)]  Any agency, including a municipality, supplying a

155-11   drinking water service to the public that intends to make a

155-12   material or major change in a water supply system that may affect

155-13   the sanitary features of that utility must give written notice of

155-14   that intention to the commission before making the change.

155-15         (d) [(c)]  A water supply system owner, manager, or operator

155-16   or an agent of a water supply system owner, manager, or operator

155-17   may not advertise or announce a water supply as being of a quality

155-18   other than the quality that is disclosed by the commission's latest

155-19   rating.

155-20         (e) [(d)]  The commission shall assemble and tabulate all

155-21   necessary data relating to public drinking water supplies at least

155-22   once each year and as often during the year as conditions demand or

155-23   justify.  The data forms the basis of an official comparative

155-24   rating of public drinking water supply systems.

155-25         (f) [(e)]  A water supply system that attains an approved

97S0149/2                                                          

 156-1   rating is entitled to erect signs of a design approved by the

 156-2   commission on highways approaching the municipality in which the

 156-3   water supply system is located.  The signs shall be immediately

 156-4   removed on notice from the commission if the water supply system

 156-5   does not continue to meet the specified standards.

 156-6         SECTION 5.20.  Subchapter C, Chapter 341, Health and Safety

 156-7   Code, is amended by adding Section 341.0351 to read as follows:

 156-8         Sec. 341.0351.  CONTINUOUS AND SAFE DRINKING WATER SUPPLY

 156-9   REQUIREMENTS.  (a)  All drinking water supply systems for public

156-10   use must provide a continuous and safe supply of drinking water

156-11   which meets the requirements of Section 341.031(c).

156-12         (b)  If a public drinking water supply system has a history

156-13   of noncompliance or has been subject to enforcement action by the

156-14   commission, the owner or manager of the system may be required to

156-15   demonstrate that financial and technical resources are available to

156-16   ensure future operation of the system in compliance with all

156-17   applicable laws and rules.  The commission may require submission

156-18   of a business plan demonstrating the financial, managerial, and

156-19   technical capability of the system management and ownership.  The

156-20   commission may require the owner of the system to provide financial

156-21   assurance in a form acceptable to the commission to ensure a

156-22   continuous and safe supply of drinking water.

156-23         (c)  A public water supply system which has been constructed

156-24   without approval as required under Section 341.035 or which the

156-25   executive director of the commission determines presents an

97S0149/2                                                          

 157-1   imminent health hazard may be required to temporarily cease

 157-2   operations on receipt by either mail or hand delivery of a letter

 157-3   from the commission or the executive director ordering cessation of

 157-4   operations.  Operations may not resume until authorized by the

 157-5   commission or the executive director.  A public water system

 157-6   ordered to cease operations under this subsection is entitled to an

 157-7   expedited hearing before the commission on written request.

 157-8         SECTION 5.21.  Subsections (a) and (b), Section 341.047,

 157-9   Health and Safety Code, are amended to read as follows:

157-10         (a)  A person commits an offense if the person:

157-11               (1)  violates a provision of Section 341.031;

157-12               (2)  violates a provision of Section 341.032(a) or (b);

157-13               (3)  violates a provision of Section 341.033(a)-(f);

157-14               (4)  constructs a drinking water supply system without

157-15   submitting completed plans and specifications as required by

157-16   Section 341.035(b) [341.035(a)];

157-17               (5)  establishes a drinking water supply system without

157-18   the commission's approval as required by Section 341.035(a) or (b);

157-19               (6)  violates a provision of Section 341.035(c)

157-20   [341.035(b)] or (d) [(c)];

157-21               (7)  fails to remove a sign as required by Section

157-22   341.035(f) [341.035(e)]; or

157-23               (8)  violates a provision of Section 341.036.

157-24         (b)  An offense under Subsection (a) is a Class C misdemeanor

157-25   [punishable by a fine of not less than $100].

97S0149/2                                                          

 158-1         SECTION 5.22.  Section 341.048, Health and Safety Code, is

 158-2   amended to read as follows:

 158-3         Sec. 341.048.  CIVIL ENFORCEMENT.  (a)  A person may not

 158-4   cause, suffer, allow, or permit a violation of this subchapter or a

 158-5   rule or order adopted under this subchapter.

 158-6         (b)  A person who causes, suffers, allows, or permits a

 158-7   violation under this subchapter  shall be assessed a civil penalty

 158-8   of not less than $50 nor more than $10,000 [$500] for each

 158-9   violation.  Each day of a continuing violation is a separate

158-10   violation.

158-11         (c)  [If it is shown on a trial of the defendant that the

158-12   defendant has previously been assessed a civil penalty under this

158-13   section within a year before the date on which the violation being

158-14   tried occurred, the defendant shall be assessed a civil penalty of

158-15   not less than $50 nor more than $1,000 for each subsequent

158-16   violation under this subchapter.  Each day of a continuing

158-17   violation is a separate violation.]

158-18         [(d)]  If it appears that a person has violated, is

158-19   violating, or threatens to violate a provision under this

158-20   subchapter, the commission, a county, or a municipality may

158-21   institute a civil suit in a district court for:

158-22               (1)  injunctive relief to restrain the person from

158-23   continuing the violation or threat of violation;

158-24               (2)  the assessment and recovery of a civil penalty; or

158-25               (3)  both injunctive relief and a civil penalty.

97S0149/2                                                          

 159-1         (d) [(e)]  The commission is a necessary and indispensable

 159-2   party in a suit brought by a county or municipality under this

 159-3   section.

 159-4         (e) [(f)]  On the commission's request, the attorney general

 159-5   shall institute a suit in the name of the state for injunctive

 159-6   relief, to recover a civil penalty, or for both injunctive relief

 159-7   and civil penalty.

 159-8         (f) [(g)]  The suit may be brought in Travis County, in the

 159-9   county in which the defendant resides, or in the county in which

159-10   the violation or threat of violation occurs.

159-11         (g) [(h)]  In a suit under this section to enjoin a violation

159-12   or threat of violation of this subchapter, the court shall grant

159-13   the state, county, or municipality, without bond or other

159-14   undertaking, any injunction that the facts may warrant including

159-15   temporary restraining orders, temporary injunctions after notice

159-16   and hearing, and permanent injunctions.

159-17         (h) [(i)]  Civil penalties recovered in a suit brought under

159-18   this section by a county or municipality shall be equally divided

159-19   between:

159-20               (1)  the state; and

159-21               (2)  the county or municipality that first brought the

159-22   suit.

159-23         SECTION 5.23.  Subsection (a), Section 341.049, Health and

159-24   Safety Code, is amended to read as follows:

159-25         (a)  If a person causes, suffers, allows, or permits a

97S0149/2                                                          

 160-1   violation of this subchapter or a rule or order adopted under this

 160-2   subchapter, the commission may assess a penalty against that person

 160-3   as provided by this section.  The penalty shall not be less than

 160-4   $50 nor more than $10,000 [$500] for each violation.  Each day of a

 160-5   continuing violation may be considered a separate violation.

 160-6           ARTICLE 6.  WATER DATA COLLECTION AND DISSEMINATION

 160-7         SECTION 6.01.  Section 16.012, Water Code, is amended to read

 160-8   as follows:

 160-9         Sec. 16.012.  STUDIES, INVESTIGATIONS, SURVEYS.  (a)  The

160-10   executive administrator shall make studies, investigations, and

160-11   surveys of the occurrence, quantity, quality, and availability of

160-12   the surface water and groundwater of this state and shall, in

160-13   cooperation with other entities of the state, guide the development

160-14   of a statewide water resource data collection and dissemination

160-15   network.  For these purposes the staff shall collect, receive,

160-16   analyze, [and] process, and facilitate access to basic data and

160-17   summary information concerning [the] water resources of the state

160-18   and provide guidance regarding data formats and descriptions

160-19   required to access and understand Texas water resource data.

160-20         (b)  The executive administrator shall:

160-21               (1)  determine suitable locations for future water

160-22   facilities, including reservoir sites;

160-23               (2)  locate land best suited for irrigation;

160-24               (3)  make estimates of the cost of proposed irrigation

160-25   works and the improvement of reservoir sites;

97S0149/2                                                          

 161-1               (4)  examine and survey reservoir sites; [and]

 161-2               (5)  investigate the effects of fresh water inflows

 161-3   upon the bays and estuaries of Texas;

 161-4               (6)  investigate instream flows including groundwater

 161-5   resources hydrologically connected to ecologically sensitive areas;

 161-6               (7)  lead a statewide effort, in coordination with

 161-7   federal, state, and local governments and other interested parties,

 161-8   to develop a network for collecting and disseminating water

 161-9   resource-related information that is sufficient to support

161-10   assessment of ambient water conditions statewide;

161-11               (8)  make recommendations for optimizing the efficiency

161-12   and effectiveness of water resource data collection and

161-13   dissemination as necessary to ensure that basic water resource data

161-14   are maintained and available for Texas; and

161-15               (9)  make basic data and summary information developed

161-16   under this subsection accessible to state agencies and other

161-17   interested persons.

161-18         (c)  All entities of the state that collect or use water data

161-19   or information shall cooperate with the board in the development of

161-20   a coordinated, efficient, and effective statewide water resource

161-21   data collection and dissemination network.

161-22         (d)  The executive administrator shall keep full and proper

161-23   records of his work, observations, data, and calculations, all of

161-24   which are the property of the state.

161-25         (e) [(d)]  In performing his duties under this section, the

97S0149/2                                                          

 162-1   executive administrator shall assist the commission in carrying out

 162-2   the purposes and policies stated in Section 12.014 of this code.

 162-3         SECTION 6.02.  Section 16.021, Water Code, is amended to read

 162-4   as follows:

 162-5         Sec. 16.021.  TEXAS NATURAL RESOURCES INFORMATION SYSTEM.

 162-6   (a)  The executive administrator shall establish the Texas Natural

 162-7   Resources Information System (TNRIS) to serve Texas agencies and

 162-8   citizens as a centralized clearinghouse and referral center for

 162-9   natural resource, census, and other socioeconomic data [as a

162-10   centralized information system incorporating all Texas natural

162-11   resource data, socioeconomic data related to natural resources, or

162-12   indexes related to that data that is collected by state agencies or

162-13   other entities].

162-14         (b)  The Texas Geographic Information Council (TGIC) [Natural

162-15   Resources Information System Task Force] is created to provide

162-16   strategic planning and coordination in the acquisition and use of

162-17   geo-spatial data and related technologies in the State of Texas.

162-18   The executive administrator and the executive director of the

162-19   Department of Information Resources shall designate entities to be

162-20   members of the TGIC.  The chief administrative officer of each

162-21   member entity shall select one representative to serve on the TGIC.

162-22   The duties of the TGIC shall include providing guidance to the

162-23   executive administrator in carrying out his duties under this

162-24   section and guidance to the Department of Information Resources for

162-25   development of rules related to statewide geo-spatial data and

97S0149/2                                                          

 163-1   technology standards.  [The task force is composed of one

 163-2   representative from each state agency designated by the executive

 163-3   administrator.  The executive administrator shall designate a state

 163-4   agency as a participant in the task force if the agency collects or

 163-5   uses natural resource and related socioeconomic data.

 163-6   Representatives of each designated agency shall be selected by the

 163-7   chief administrative officer of that agency.]

 163-8         (c)  Under the guidance of the TGIC [Texas Natural Resources

 163-9   Information System Task Force], the executive administrator shall:

163-10               (1)  further develop [and implement] the Texas Natural

163-11   Resources Information System by promoting and providing for

163-12   effective acquisition, archiving, documentation, indexing, and

163-13   dissemination of natural resource and related digital and

163-14   nondigital data and information;

163-15               (2)  obtain information in response to disagreements

163-16   regarding names and name spellings for natural and cultural

163-17   features in the state and provide this information to the Board on

163-18   Geographic Names of the United States Department of the Interior;

163-19               (3)  make recommendations to the Board on Geographic

163-20   Names of the United States Department of the Interior for naming

163-21   any natural or cultural feature subject to the limitations provided

163-22   by Subsection (d) of this section;

163-23               (4)  make recommendations to the Department of

163-24   Information Resources to adopt and promote standards that

163-25   facilitate sharing of digital natural resource data and related

97S0149/2                                                          

 164-1   socioeconomic data among federal, state, and local governments and

 164-2   other interested parties;

 164-3               (5)  acquire and disseminate natural resource and

 164-4   related socioeconomic data describing the Texas-Mexico border

 164-5   region; and

 164-6               (6)  coordinate, conduct, and facilitate the

 164-7   development, maintenance, and use of mutually compatible statewide

 164-8   digital base maps depicting natural resources and man-made

 164-9   features.

164-10         (d)  A recommendation may not be made under Subdivision (3)

164-11   of Subsection (c) of this section for:

164-12               (1)  a feature previously named under statutory

164-13   authority or recognized by an agency of the federal government, the

164-14   state, or a political subdivision of the state;

164-15               (2)  a feature located on private property for which

164-16   consent of the property owner cannot be obtained; or

164-17               (3)  naming a natural or cultural feature for a living

164-18   person.

164-19         SECTION 6.03.  On September 1, 1997, the Texas Natural

164-20   Resources Information System Task Force and the Texas Geographic

164-21   Information Systems Planning Council are merged into the Texas

164-22   Geographic Information Council.  All designated member agencies of

164-23   both predecessor entities shall continue to serve as member

164-24   agencies of the Texas Geographic Information Council.

97S0149/2                                                          

 165-1                  ARTICLE 7.  EFFECTIVE DATE; EMERGENCY

 165-2         SECTION 7.01.  (a)  Except as provided by Subsections (b)

 165-3   through (e) of this section, this Act takes effect September 1,

 165-4   1997.

 165-5         (b)  This section and Sections 1.04, 2.03, 2.09, 2.10, and

 165-6   2.13 of this Act take effect immediately.

 165-7         (c)  Section 3.54 of this Act takes effect on the first day

 165-8   of the first calendar quarter beginning on or after the date that

 165-9   it may take effect under Section 39, Article III, Texas

165-10   Constitution.

165-11         (d)  The change in law made by Section 3.54 of this Act to

165-12   Section 151.318, Tax Code, does not affect taxes imposed before the

165-13   effective date of Section 3.54 of this Act, and the law in effect

165-14   before the effective date of that section is continued in effect

165-15   for purposes of liability for and collection of those taxes.

165-16         (e)  Sections 4.03 and 4.05 through 4.08 of this Act take

165-17   effect on the date on which the constitutional amendment proposed

165-18   by _.J.R. No. ___, 75th Legislature, Regular Session, 1997, takes

165-19   effect.  If that amendment is not approved by the voters, those

165-20   sections have no effect.

165-21         SECTION 7.02.  The importance of this legislation and the

165-22   crowded condition of the calendars in both houses create an

165-23   emergency and an imperative public necessity that the

165-24   constitutional rule requiring bills to be read on three several

165-25   days in each house be suspended, and this rule is hereby suspended,

97S0149/2                                                          

 166-1   and that this Act take effect and be in force according to its

 166-2   terms, and it is so enacted.

97S0149/2