77R7426 QS-F By Cook, Puente, Turner of Coleman H.B. No. 1629 Substitute the following for H.B. No. 1629: By Cook C.S.H.B. No. 1629 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the provision of water by the Lower Colorado River 1-3 Authority to a municipality outside the Colorado River basin. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 7, Acts of the 43rd Legislature, 4th 1-6 Called Session, 1934 (Article 8280-107, Vernon's Texas Civil 1-7 Statutes), is amended by adding Section 28 to read as follows: 1-8 Sec. 28. Notwithstanding any other provision of this Act or 1-9 other law: 1-10 (a) In this section: 1-11 (1) "Municipality" includes a municipally owned 1-12 utility. 1-13 (2) "Water service area" means the area in which the 1-14 district is authorized to use, distribute, and sell water on 1-15 January 1, 2001. 1-16 (b) Subject to the limitations and restrictions in this 1-17 section, the district may enter into a written contract with a 1-18 municipality located outside the water service area to distribute 1-19 and sell water to the municipality. 1-20 (c) In addition to the district's applicable water rate, the 1-21 district shall charge a municipality a surcharge determined by the 1-22 board of directors according to the terms of the contract to enable 1-23 the district to develop and manage water resources sufficient to 1-24 address the projected needs of the district's water service area 2-1 and the needs of the municipality to the extent agreed in the 2-2 contract. The board of directors' determination of the surcharge 2-3 is not subject to review or modification by any regulatory agency 2-4 or administrative authority. 2-5 (d) The use or reservation of water under a contract 2-6 authorized by this section may extend for a base period of not more 2-7 than 50 years. A contract may provide an option to renew for not 2-8 more than an additional 30 years. An option to renew must require 2-9 that the municipality progressively reduce the amount of water 2-10 reserved or used by the municipality during the last 10 years of 2-11 the renewal term and require that the rate paid by the municipality 2-12 immediately increase by a factor of five if the municipality does 2-13 not make the required reduction. The municipality is not entitled 2-14 to further reservation, use, or delivery of water from the district 2-15 at the conclusion of the contract. 2-16 (e) A contract authorized by this section must require that 2-17 the then current rate paid by the municipality immediately increase 2-18 by a factor of five if: 2-19 (1) the municipality initiates legal proceedings in a 2-20 court or regulatory agency to obtain, or obtains, other than 2-21 through direct negotiations with the district or other than with 2-22 the express written consent of the district: 2-23 (A) an increase in the amount of surface water 2-24 taken by the municipality under this section; or 2-25 (B) an extension of either the base or renewal 2-26 periods under Subsection (d); or 2-27 (2) the district is compelled by any authority to 3-1 reserve, sell, or make available to the municipality more than 3-2 150,000 acre-feet of water per year or to reserve, sell, or make 3-3 available to the municipality water beyond the base and renewal 3-4 periods under Subsection (d). 3-5 (f) Within the water service area, the district must own any 3-6 personal property, fixtures, or appurtenances that are used for 3-7 making available, diverting, or delivering water to a municipality 3-8 under a contract authorized by this section. 3-9 (g) Water to be provided under a contract authorized by this 3-10 section may not be diverted from the Colorado River at diversion 3-11 points located on the reservoirs that, on the effective date of 3-12 this section, are owned and operated by the district upstream of 3-13 Mansfield Dam. 3-14 (h) The district may sell no more than a total of 150,000 3-15 acre-feet of water in any year under contracts authorized by this 3-16 section. 3-17 (i) This section does not authorize: 3-18 (1) the district to sell its surface water rights to 3-19 any person or entity for use outside the water service area; or 3-20 (2) a sale or lease of water other than as 3-21 specifically authorized by this section. 3-22 (j) The district may not sell groundwater to a municipality 3-23 under this section. 3-24 (k) The district may not contract to distribute or sell 3-25 water under this section unless the district's board of directors 3-26 finds that the contract: 3-27 (1) will protect and benefit the district's water 4-1 service area, including municipal, industrial, agricultural, 4-2 recreational, and environmental interests; 4-3 (2) is consistent with regional water management plans 4-4 filed with the Texas Water Development Board; and 4-5 (3) will benefit stored water levels in the district's 4-6 existing reservoirs. 4-7 SECTION 2. This Act constitutes full authority for a 4-8 municipality or municipally owned utility to enter into a contract 4-9 with the district under Section 28, Chapter 7, Acts of the 43rd 4-10 Legislature, 4th Called Session, 1934 (Article 8280-107, Vernon's 4-11 Texas Civil Statutes), as added by this Act. The payments made 4-12 under a contract authorized by that section are operation and 4-13 maintenance expenses of the municipality's utility system. A 4-14 municipality or municipally owned utility that enters into a 4-15 contract under that section may use proceeds from the sale of its 4-16 revenue bonds to make any such payments. 4-17 SECTION 3. This Act takes effect immediately if it receives 4-18 a vote of two-thirds of all the members elected to each house, as 4-19 provided by Section 39, Article III, Texas Constitution. If this 4-20 Act does not receive the vote necessary for immediate effect, this 4-21 Act takes effect September 1, 2001.