1-1                                   AN ACT
 1-2     relating to the creation, administration, powers, duties,
 1-3     operation, and financing of the Lone Star Groundwater Conservation
 1-4     District.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1. CREATION.  (a)  A groundwater conservation
 1-7     district to be known as the Lone Star Groundwater Conservation
 1-8     District is created in Montgomery County, subject to approval at a
 1-9     confirmation election under Section 10 of this Act.  The district
1-10     is a governmental agency and a body politic and corporate.
1-11           (b)  The district is created under and is essential to
1-12     accomplish the purposes of Section 59, Article XVI, Texas
1-13     Constitution.
1-14           SECTION 2.  DEFINITIONS.  In this Act:
1-15                 (1)  "Board" means the board of directors of the
1-16     district.
1-17                 (2)  "District" means the Lone Star Groundwater
1-18     Conservation District.
1-19           SECTION 3.  BOUNDARIES.  The boundaries of the district are
1-20     coextensive with the boundaries of Montgomery County.
1-21           SECTION 4.  FINDING OF BENEFIT.  All of the land and other
1-22     property included within the boundaries of the district will be
1-23     benefited by the works and projects that are to be accomplished by
1-24     the district under powers conferred by Section 59, Article XVI,
 2-1     Texas Constitution.  The district is created to serve a public use
 2-2     and benefit.
 2-3           SECTION 5.  GENERAL POWERS.  (a)  The district has all of the
 2-4     rights, powers, privileges, authority, functions, and duties
 2-5     provided by the general law of this state, including Chapter 36,
 2-6     Water Code, applicable to groundwater conservation districts
 2-7     created under Section 59, Article XVI, Texas Constitution, except
 2-8     as provided by this Act.  This Act prevails over any provision of
 2-9     general law that is in conflict or inconsistent with this Act.
2-10           (b)  Notwithstanding Subsection (a) of this section, the
2-11     following provisions prevail over a conflicting or inconsistent
2-12     provision of this Act:
2-13                 (1)  Sections 36.1071-36.108, Water Code;
2-14                 (2)  Sections 36.159-36.161, Water Code; and
2-15                 (3)  Subchapter I, Chapter 36, Water Code.
2-16           (c)  The rights, powers, privileges, authority, functions,
2-17     and duties of the district are subject to the continuing right of
2-18     supervision of the state to be exercised by and through the Texas
2-19     Natural Resource Conservation Commission.
2-20           SECTION 6.  BOARD OF DIRECTORS.  (a)  The district is
2-21     governed by a board of nine directors.
2-22           (b)  Initial directors serve until permanent directors are
2-23     appointed under Section 7 of this Act.
2-24           (c)  Permanent directors serve staggered four-year terms.
2-25           (d)  A person must be at least 18 years of age and a resident
2-26     of the district to be qualified to serve as director.
2-27           (e)  Each director must qualify to serve as a director in the
 3-1     manner provided by Section 36.055, Water Code.
 3-2           (f)  A director serves until the director's successor has
 3-3     qualified.
 3-4           (g)  A position on the board shall not be construed to be a
 3-5     civil office of emolument for any purpose, including a purpose
 3-6     described in Section 40, Article XVI, Texas Constitution.
 3-7           (h)  A person who qualifies to serve on the board shall be
 3-8     qualified to serve as a director and participate in all votes
 3-9     relating to the business of the district regardless of any common
3-10     law doctrine or any statutory conflicts of interest,
3-11     incompatibility, or similar provision to the contrary.  Section
3-12     36.058, Water Code, relating to conflicts of interest, does not
3-13     apply to the district.
3-14           SECTION 7.  APPOINTMENT OF DIRECTORS.  (a)  The members of
3-15     the board are appointed as follows:
3-16                 (1)  the Commissioners Court of Montgomery County shall
3-17     appoint two directors;
3-18                 (2)  the board of directors of the Montgomery County
3-19     Soil and Water Conservation District shall appoint one director;
3-20                 (3)  the board of directors of the San Jacinto River
3-21     Authority shall appoint one director;
3-22                 (4)  the mayor of the City of Conroe shall appoint one
3-23     director;
3-24                 (5)  the mayors of all of the incorporated
3-25     municipalities, other than the City of Conroe, located in whole or
3-26     in part in Montgomery County, jointly shall appoint one director;
3-27                 (6)  the board of trustees of the Woodlands Joint
 4-1     Powers Agency shall appoint one director;
 4-2                 (7)  the boards of directors of all of the municipal
 4-3     utility districts located in whole or in part in Montgomery County
 4-4     that are not members of the Woodlands Joint Powers Agency and the
 4-5     district boundaries of which are located primarily to the east of
 4-6     Interstate Highway 45 jointly shall appoint one director; and
 4-7                 (8)  the boards of directors of all of the municipal
 4-8     utility districts located in whole or in part in Montgomery County
 4-9     that are not members of the Woodlands Joint Powers Agency and the
4-10     district boundaries of which are located primarily to the west of
4-11     Interstate Highway 45 jointly shall appoint one director.
4-12           (b)  Except as provided by Section 8 of this Act, directors
4-13     shall be appointed not later than the second Monday in January of
4-14     odd-numbered years.  Not later than the 60th day before that date,
4-15     the general manager of the district shall mail to each person who
4-16     is designated in Subsection (a) of this section to make
4-17     appointments in that particular year written notice that the
4-18     appointments are due.
4-19           (c)  The persons designated in Subsections (a)(1)-(4) and (6)
4-20     of this section shall make their appointments and submit in writing
4-21     the names of their appointments to the Commissioners Court of
4-22     Montgomery County.
4-23           (d)  Except as provided by Section 8 of this Act, the board
4-24     shall by rule adopt an appointment process providing for the
4-25     written submission of votes to the Commissioners Court of
4-26     Montgomery County and the district by those persons designated in
4-27     Subsections (a)(5) and (7)-(8) of this section.  The process
 5-1     adopted by the district shall preserve the one vote per mayor and
 5-2     per municipal utility district concept for the appointment of
 5-3     initial directors established by Section 8 of this Act.
 5-4           (e)  If there is a vacancy on the board, the appropriate
 5-5     person designated under Subsection (a) of this section shall
 5-6     appoint a director to serve the remainder of the term.
 5-7           SECTION 8.  APPOINTMENT OF INITIAL DIRECTORS.  (a)  Not later
 5-8     than the 30th day after the effective date of this Act, the persons
 5-9     designated in Sections 7(a)(1)-(4) and (6) of this Act shall make
5-10     their appointments and submit in writing the names of their
5-11     appointments to the Commissioners Court of Montgomery County.
5-12           (b)  Not later than the 30th day after the effective date of
5-13     this Act, the county judge of Montgomery County shall set a date,
5-14     time, and place for a meeting of those persons designated in
5-15     Sections 7(a)(5) and (7)-(8) of this Act, or their representatives,
5-16     to appoint members for the board.  Not later than the 20th day
5-17     before the date of the meeting, the county judge shall give notice
5-18     of the meeting by mail.
5-19           (c)  The board of directors of each municipal utility
5-20     district designated to make appointments under Sections 7(a)(7)-(8)
5-21     of this Act shall designate a person to represent that municipal
5-22     utility district at the meeting called by the county judge under
5-23     Subsection (b) of this section.  Each representative of a municipal
5-24     utility district present at the meeting is entitled to one vote.
5-25           (d)  Each mayor designated  under Section 7(a)(5) of this Act
5-26     and present at the meeting called by the county judge is entitled
5-27     to one vote.
 6-1           (e)  The county judge shall preside at the meeting and shall
 6-2     provide to the commissioners court the names of those persons
 6-3     appointed as directors at the meeting.
 6-4           (f)  As soon as practicable after all of the directors have
 6-5     been appointed, a majority of directors shall convene an
 6-6     organizational meeting of the district at a location within the
 6-7     district agreeable to a majority of the directors.  If no location
 6-8     can be agreed on, the organizational meeting of the directors shall
 6-9     be at the Montgomery County Courthouse.
6-10           SECTION 9.  TERMS OF OFFICE FOR INITIAL DIRECTORS.  (a)  The
6-11     following initial directors shall serve from the date of
6-12     appointment until January 31, 2003:
6-13                 (1)  one director appointed by the Commissioners Court
6-14     of Montgomery County;
6-15                 (2)  the director appointed by the board of directors
6-16     of the Montgomery County Soil and Water Conservation District;
6-17                 (3)  the director appointed by the Woodlands Joint
6-18     Powers Agency;
6-19                 (4)  the director jointly appointed by the boards of
6-20     directors of all of the municipal utility districts located in
6-21     whole or in part in Montgomery County that are not members of the
6-22     Woodlands Joint Powers Agency and the district boundaries of which
6-23     are located primarily to the east of Interstate Highway 45; and
6-24                 (5)  the director jointly appointed by the boards of
6-25     directors of all of the municipal utility districts located in
6-26     whole or in part in Montgomery County that are not members of the
6-27     Woodlands Joint Powers Agency and the district boundaries of which
 7-1     are located primarily to the west of Interstate Highway 45.
 7-2           (b)  The following initial directors shall serve from the
 7-3     date of appointment until January 31, 2005:
 7-4                 (1)  one director appointed by the Commissioners Court
 7-5     of Montgomery County;
 7-6                 (2)  the director appointed by the board of directors
 7-7     of the San Jacinto River Authority;
 7-8                 (3)  the director appointed by the mayor of the City of
 7-9     Conroe; and
7-10                 (4)  the director appointed by the mayors of all of the
7-11     incorporated municipalities, other than the City of Conroe, located
7-12     in whole or in part in Montgomery County.
7-13           (c)  The Commissioners Court of Montgomery County shall
7-14     designate which of the directors it appoints shall serve until
7-15     January 31, 2003, and which of the directors shall serve until
7-16     January 31, 2005.
7-17           SECTION 10.  CONFIRMATION ELECTION.  (a)  The initial board
7-18     shall call and hold an election to confirm the establishment of the
7-19     district.
7-20           (b)  Section 41.001(a), Election Code, does not apply to a
7-21     confirmation election held as provided by this section.
7-22           (c)  Except as provided by this Act, the initial board shall
7-23     conduct a confirmation election in the manner set forth for
7-24     confirmation elections held by temporary directors under Sections
7-25     36.017(b), (c), and (e)-(h), Water Code, and the Election Code.
7-26           (d)  Notwithstanding Section 36.017(d), Water Code, the
7-27     ballot for the election must be printed to provide for voting for
 8-1     or against the proposition: "The creation of a nontaxing
 8-2     groundwater conservation district in Montgomery County to be known
 8-3     as the Lone Star Groundwater Conservation District."
 8-4           SECTION 11.  DISTRICT REVENUES.  (a)  The district does not
 8-5     have the authority granted by Sections 36.020 and 36.201-36.204,
 8-6     Water Code.
 8-7           (b)  The district may assess production fees based on the
 8-8     amount of water authorized by permit to be withdrawn from a well or
 8-9     the amount actually withdrawn.  Notwithstanding Section 36.205(a),
8-10     Water Code, the district may use revenues generated by production
8-11     fees for any district purpose.
8-12           (c)  The district may not, in a manner inconsistent with
8-13     rules and fees applied to production and use occurring wholly
8-14     within the boundaries of the district, regulate production of water
8-15     or assess fees against the transfer of water:
8-16                 (1)  produced in an area of a municipal utility
8-17     district that is located inside the district boundaries; and
8-18                 (2)  transferred to an area within the same municipal
8-19     utility district but that is located outside the district
8-20     boundaries.
8-21           (d)  The district shall assess production fees for
8-22     horticultural uses at the same rate as fees assessed for other
8-23     agricultural uses.
8-24           (e)  The district may assess other fees as authorized by
8-25     Chapter 36, Water Code.
8-26           SECTION 12.  CONTRACTS.  The district may enter into
8-27     contracts with any person or any public or private entity for any
 9-1     purpose otherwise authorized by law.
 9-2           SECTION 13.  COORDINATION WITH OTHER DISTRICTS.  The district
 9-3     shall coordinate with all adjacent groundwater conservation
 9-4     districts in the development of its management plan under Section
 9-5     36.1071, Water Code, and as otherwise provided by general law.  On
 9-6     the district's completion of its management plan or the district's
 9-7     adoption of any revisions to the plan, the district shall forward a
 9-8     copy of the plan to all adjacent groundwater conservation
 9-9     districts.
9-10           SECTION 14.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. (a)
9-11     The proper and legal notice of the intention to introduce this Act,
9-12     setting forth the general substance of this Act, has been published
9-13     as provided by law, and the notice and a copy of this Act have been
9-14     furnished to all persons, agencies, officials, or entities to which
9-15     they are required to be furnished by the constitution and other
9-16     laws of this state, including the governor, who has submitted the
9-17     notice and the Act to the Texas Natural Resource Conservation
9-18     Commission.
9-19           (b)  The Texas Natural Resource Conservation Commission has
9-20     filed its recommendations relating to this Act with the governor,
9-21     lieutenant governor, and speaker of the house of representatives
9-22     within the required time.
9-23           (c)  All requirements of the constitution and laws of this
9-24     state and of the rules and procedures of the legislature with
9-25     respect to the notice, introduction, and passage of this Act are
9-26     fulfilled and accomplished.
9-27           SECTION 15.  EFFECTIVE DATE.  This Act takes effect September
 10-1    1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 2362 was passed by the House on April
         20, 2001, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 2362 was passed by the Senate on May
         17, 2001, by the following vote:  Yeas 30, Nays 0, 1 present, not
         voting.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor