1-1     By:  Cook, Puente, Turner of Coleman                  H.B. No. 1629
 1-2          (Senate Sponsor - Armbrister)
 1-3           (In the Senate - Received from the House March 19, 2001;
 1-4     March 20, 2001, read first time and referred to Committee on
 1-5     Natural Resources; April 23, 2001, reported adversely, with
 1-6     favorable Committee Substitute by the following vote:  Yeas 6, Nays
 1-7     0; April 23, 2001, sent to printer.)
 1-8     COMMITTEE SUBSTITUTE FOR H.B. No. 1629                  By:  Bivins
 1-9                            A BILL TO BE ENTITLED
1-10                                   AN ACT
1-11     relating to the provision of water by the Lower Colorado River
1-12     Authority to a municipality outside the Colorado River basin.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14           SECTION 1.  Chapter 7, Acts of the 43rd Legislature, 4th
1-15     Called Session, 1934 (Article 8280-107, Vernon's Texas Civil
1-16     Statutes), is amended by adding Section 28 to read as follows:
1-17           Sec. 28.  Notwithstanding any other provision of this Act or
1-18     other law:
1-19           (a)  In this section:
1-20                 (1)  "Municipality" includes a municipally owned
1-21     utility.
1-22                 (2)  "Water service area" means the area in which the
1-23     district is authorized to use, distribute, and sell water on
1-24     January 1, 2001.
1-25           (b)  Subject to the limitations and restrictions in this
1-26     section, the district may enter into a written contract with a
1-27     municipality located outside the water service area to distribute
1-28     and sell water to the municipality.
1-29           (c)  In addition to the district's applicable water rate, the
1-30     district shall charge a municipality a surcharge determined by the
1-31     board of directors according to the terms of the contract to enable
1-32     the district to develop and manage water resources sufficient to
1-33     address the projected needs of the district's water service area
1-34     and the needs of the municipality to the extent agreed in the
1-35     contract.  The contract must provide that the surcharge be
1-36     sufficient to allow the district to recover all capital
1-37     construction costs incurred by the district under this section. The
1-38     board of directors' determination of the surcharge is not subject
1-39     to review or modification by any regulatory agency or
1-40     administrative authority.
1-41           (d)  The use or reservation of water under a contract
1-42     authorized by this section may extend for a base period of not more
1-43     than 50 years.  A contract may provide an option to renew for not
1-44     more than an additional 30 years.  An option to renew must require
1-45     that the municipality progressively reduce the amount of water
1-46     reserved or used by the municipality during the last 10 years of
1-47     the renewal term and require that the rate paid by the municipality
1-48     immediately increase by a factor of five if the municipality does
1-49     not make the required reduction.  A contract must provide that the
1-50     municipality is not entitled to further reservation, use, or
1-51     delivery of water from the district at the conclusion of the
1-52     contract.
1-53           (e)  A contract authorized by this section must require that
1-54     the then current rate paid by the municipality immediately increase
1-55     by a factor of five if:
1-56                 (1)  the municipality initiates legal proceedings in a
1-57     court or regulatory agency to obtain:
1-58                       (A)  an increase in the amount of surface water
1-59     taken by the municipality under this section; or
1-60                       (B)  an extension of either the base or renewal
1-61     periods under Subsection (d); or
1-62                 (2)  the district is compelled by any authority to
1-63     reserve, sell, or make available to the municipality more than
1-64     150,000 acre-feet of water per year or to reserve, sell, or make
 2-1     available to the municipality water beyond the base and renewal
 2-2     periods under Subsection (d).
 2-3           (f)  The contract must provide that within the water service
 2-4     area, the district must own any personal property, fixtures, or
 2-5     appurtenances that are used for making available, diverting, or
 2-6     delivering water to a municipality under a contract authorized by
 2-7     this section.
 2-8           (g)  Water to be provided under a contract authorized by this
 2-9     section may not be diverted from the Colorado River at diversion
2-10     points located on the reservoirs that, on the effective date of
2-11     this section, are owned and operated by the district upstream of
2-12     Mansfield Dam.  Water to be provided under a contract authorized by
2-13     this section may be diverted only from off-channel reservoirs built
2-14     downstream of Mansfield Dam after the effective date of this
2-15     section.
2-16           (h)  The district may not provide water to a municipality
2-17     under a contract authorized by this section unless the district
2-18     demonstrates, through its water management plan, to the Texas
2-19     Natural Resource Conservation Commission that the district will
2-20     operate its water supply system in conjunction with the water
2-21     resources management efforts contemplated by the contract to:
2-22                 (1)  increase the average lake levels of Lake Buchanan
2-23     and Lake Travis by at least 6 feet and 18 feet, respectively, above
2-24     the average lake levels of such lakes during times when such lakes
2-25     would have been operating at less than 90 percent of conservation
2-26     capacity without such efforts; and
2-27                 (2)  increase the average lake levels of Lake Buchanan
2-28     and Lake Travis during a repeat of the drought of record at least
2-29     10 feet and 20 feet, respectively, above the average lake levels of
2-30     such lakes during a repeat of the drought of record without such
2-31     efforts.
2-32           (i)  As a requirement of the district's water management
2-33     plan, the district shall submit annually to the Texas Natural
2-34     Resource Conservation Commission data and a report demonstrating
2-35     that the district has operated its water supply system in
2-36     accordance with the provisions of this section.  Such data shall
2-37     include a tabulation that compares actual recorded lake levels with
2-38     lake levels that would have occurred without the water resources
2-39     management efforts contemplated by a contract authorized by this
2-40     section.  The Texas Natural Resource Conservation Commission shall
2-41     review the data and report submitted by the district and shall
2-42     certify, in writing made available to the public, whether the
2-43     district has complied with the provisions of this section.
2-44           (j)  The district may sell no more than a total of 150,000
2-45     acre-feet of water in any year under contracts authorized by this
2-46     section.
2-47           (k)  This section does not authorize:
2-48                 (1)  the district to pump water to the municipality
2-49     directly from the Colorado River;
2-50                 (2)  the district to sell its surface water rights to
2-51     any person or entity for use outside the water service area; or
2-52                 (3)  a sale or lease of water other than as
2-53     specifically authorized by this section.
2-54           (l)  The district may not sell groundwater to a municipality
2-55     under this section.
2-56           (m)  The district may not contract to distribute or sell
2-57     water under this section unless the district's board of directors
2-58     finds, after providing an opportunity for public input, that the
2-59     contract:
2-60                 (1)  will protect and benefit the lower Colorado River
2-61     watershed and the district's water service area, including
2-62     municipal, industrial, agricultural, recreational, and
2-63     environmental interests;
2-64                 (2)  is consistent with regional water plans filed with
2-65     the Texas Water Development Board on or before January 5, 2001;
2-66                 (3)  will ensure that the beneficial inflows remaining
2-67     after any water diversions will be adequate to maintain the
2-68     ecological health and productivity of the Matagorda Bay system;
2-69                 (4)  will provide for instream flows no less protective
 3-1     than those included in the district's Water Management Plan for the
 3-2     Lower Colorado River Basin, as approved by the Texas Natural
 3-3     Resource Conservation Commission;
 3-4                 (5)  will ensure that, before any water is delivered
 3-5     under the contract, the municipality has prepared a drought
 3-6     contingency plan and has developed and implemented a water
 3-7     conservation plan that will result in the highest practicable
 3-8     levels of water conservation and efficiency achievable within the
 3-9     jurisdiction of the municipality;
3-10                 (6)  provides for a broad public and scientific review
3-11     process designed to ensure that all information that can be
3-12     practicably developed is considered in establishing beneficial
3-13     inflow and instream flow provisions; and
3-14                 (7)  will benefit stored water levels in the district's
3-15     existing reservoirs.
3-16           (n)  A municipality that buys water from the district under a
3-17     contract authorized by this section may not resell that water
3-18     outside the boundaries of the regional water planning area in which
3-19     the municipality is located, as such boundaries are designated by
3-20     the Texas Water Development Board as of January 5, 2001.
3-21           (o)  Nothing in this section shall exempt the district or any
3-22     municipality from the permitting requirements of state and federal
3-23     law.
3-24           SECTION 2.  This Act constitutes full authority for a
3-25     municipality or municipally owned utility  to enter into a contract
3-26     with the district under Section 28, Chapter 7, Acts of the 43rd
3-27     Legislature, 4th Called Session, 1934 (Article 8280-107, Vernon's
3-28     Texas Civil Statutes), as added by this Act.  The payments made
3-29     under a contract authorized by that section are operation and
3-30     maintenance expenses of the municipality's utility system.  A
3-31     municipality or municipally owned utility that enters into a
3-32     contract under that section may use proceeds from the sale of its
3-33     revenue bonds to make any such payments.
3-34           SECTION 3.  This Act takes effect immediately if it receives
3-35     a vote of two-thirds of all the members elected to each house, as
3-36     provided by Section 39, Article III, Texas Constitution.  If this
3-37     Act does not receive the vote necessary for immediate effect, this
3-38     Act takes effect September 1, 2001.
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