By:  Brown                                               S.B. No. 2
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the development and management of the water resources
 1-3     of the state, including the ratification of the creation of certain
 1-4     groundwater conservation districts; providing penalties.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6                  ARTICLE 1.  TEXAS WATER ADVISORY COUNCIL
 1-7           SECTION 1.01.  Subtitle A, Title 2, Water Code, is amended by
 1-8     adding Chapter 9 to read as follows:
 1-9                  CHAPTER 9.  TEXAS WATER ADVISORY COUNCIL
1-10           Sec. 9.001.  DEFINITION.  In this chapter:
1-11                 (1)  "Authority" means an entity listed in Section
1-12     9.010(b).
1-13                 (2)  "Board" means the governing body of an authority.
1-14                 (3)  "Commission" means the Texas Natural Resource
1-15     Conservation Commission.
1-16                 (4)  "Conjunctive use" means the combined use of
1-17     groundwater and surface water sources that optimizes the beneficial
1-18     characteristics of each source.
1-19                 (5)  "Council" means the Texas Water Advisory Council.
1-20           Sec. 9.002.  CREATION AND MEMBERSHIP.  (a)  The council is
1-21     composed of 13 members as follows:
1-22                 (1)  the chairman, or a board member designated by the
1-23     chairman, of the Texas Water Development Board;
1-24                 (2)  the chairman, or a commissioner designated by the
1-25     chairman, of the commission;
 2-1                 (3)  the chairman, or a commissioner designated by the
 2-2     chairman, of the Parks and Wildlife Commission;
 2-3                 (4)  the commissioner of agriculture;
 2-4                 (5)  the Commissioner of the General Land Office;
 2-5                 (6)  three members of the house of representatives
 2-6     appointed by the speaker of the house of representatives;
 2-7                 (7)  two members of the senate appointed by the
 2-8     lieutenant governor; and
 2-9                 (8)  three members of the general public appointed by
2-10     the governor.
2-11           (b)  Council members may not delegate participation or
2-12     council duties to staff.
2-13           Sec. 9.003.  TERMS.  (a)  Except for the Commissioner of the
2-14     General Land Office and the commissioner of agriculture, council
2-15     members who are officials of state agencies serve terms as
2-16     determined by the chairman of each agency.
2-17           (b)  Council members who are members of the general public
2-18     serve staggered six-year terms with the term of one member expiring
2-19     August 31 of each odd-numbered year.
2-20           (c)  Council members may be reappointed to serve additional
2-21     terms.
2-22           (d)  A vacancy on the council shall be filled by appointment
2-23     by the original appointing authority for the unexpired term.
2-24           Sec. 9.004.  OFFICERS OF THE COUNCIL.  (a)  The governor
2-25     shall appoint a council member as the chair of the council for a
2-26     two-year term expiring May 31 of each even-numbered year.
 3-1           (b)  The council shall have a secretary of the council who
 3-2     shall serve at the pleasure of the council and be accountable only
 3-3     to the council.
 3-4           Sec. 9.005.  COUNCIL STAFF.  On request by the council, the
 3-5     commission, the Parks and Wildlife Department, the Department of
 3-6     Agriculture, and the Texas Water Development Board shall provide
 3-7     any staff other than the secretary of the council necessary to
 3-8     assist the council in the performance of its duties.
 3-9           Sec. 9.006.  MEETINGS.  (a)  The council shall meet at least
3-10     once in each calendar quarter.  Six members shall constitute a
3-11     quorum sufficient to conduct meetings and the business of the
3-12     council.
3-13           (b)  The council is subject to Chapters 551 and 2001,
3-14     Government Code.
3-15           Sec. 9.007.  COMPENSATION OF MEMBERS.  (a)  Members of the
3-16     council shall serve without compensation but may be reimbursed by
3-17     legislative appropriation for actual and necessary expenses related
3-18     to the performance of council duties.
3-19           (b)  Reimbursements under Subsection (a) shall be subject to
3-20     the approval of the chair.
3-21           Sec. 9.008.  POWERS AND DUTIES OF COUNCIL.  (a)  The council
3-22     shall:
3-23                 (1)  heighten the level of dialogue on significant
3-24     water policy issues and, in an advisory role only, strive to
3-25     provide focus and guidance on state water policy initiatives,
3-26     including:
 4-1                       (A)  promoting flexibility and incentives for
 4-2     water desalination, brush control, regionalization, weather
 4-3     modification projects, and public-private partnerships relating to
 4-4     water projects;
 4-5                       (B)  promoting adequate financing for surface
 4-6     water and groundwater projects;
 4-7                       (C)  development of water conservation and
 4-8     drought management projects;
 4-9                       (D)  implementation of approved regional and
4-10     state water plans;
4-11                       (E)  encouraging commonality of technical data
4-12     and information such as joint agency studies, freshwater inflow
4-13     recommendations, surface water and groundwater availability models,
4-14     and instream flow recommendations developed by the Parks and
4-15     Wildlife Department, the commission, and the Texas Water
4-16     Development Board; and
4-17                       (F)  encouraging the use of supplemental
4-18     environmental projects for water infrastructure needs and enhancing
4-19     the aquatic environment and habitat in enforcement proceedings at a
4-20     state agency or political subdivision;
4-21                 (2)  encourage the enhancement and coordination of
4-22     state, interstate, and international efforts to improve
4-23     environmental quality and living conditions along the Texas-Mexico
4-24     border;
4-25                 (3)  coordinate a unified state position on federal and
4-26     international water issues; and
 5-1                 (4)  advise the Texas Water Development Board on
 5-2     developing criteria for prioritizing the funding of projects in the
 5-3     state water plan.
 5-4           (b)  The council may not:
 5-5                 (1)  promulgate rules;
 5-6                 (2)  regulate water use, water quality, or any other
 5-7     aspect of water resource management;
 5-8                 (3)  plan or construct water resource projects, or have
 5-9     such projects planned or constructed;
5-10                 (4)  grant or loan any funds for the construction of
5-11     water resource projects;
5-12                 (5)  establish water resource management standards or
5-13     otherwise usurp the authority of or infringe upon the duties,
5-14     responsibilities, or powers of local, regional, or state water
5-15     management entities, including groundwater districts, river
5-16     authorities and compacts, regional water planning groups, or member
5-17     agencies of the council; or
5-18                 (6)  consider or discuss any specific permit or project
5-19     or recommendation for a project.
5-20           Sec. 9.009.  REPORT.  Not later than December 1 of each
5-21     even-numbered year, the council shall submit a report to the
5-22     governor, lieutenant governor, and speaker of the house of
5-23     representatives and to the senate and house standing committees
5-24     with primary responsibility over water resource management and
5-25     financing.  The report shall include findings of the council made
5-26     in the periodic reviews of authorities during the preceding
 6-1     two-year period and any other findings and recommendations the
 6-2     council considers necessary.
 6-3           Sec. 9.010.  REVIEW OF AUTHORITIES.  (a)  On a five-year
 6-4     cycle, the council shall review authorities based on the
 6-5     administrative policies provided by Section 9.012 and performance
 6-6     standards described in Section 9.011.  The reviews shall be
 6-7     conducted of groups described in Subsection (b), with group 1 being
 6-8     reviewed at the council's first quarterly meeting of the five-year
 6-9     period and group 2 being reviewed at the council's third quarterly
6-10     meeting of the period.  The council shall continue in numerical
6-11     order to review one group at every other quarterly meeting until
6-12     all ten groups have been reviewed and then shall recommence the
6-13     cycle.
6-14           (b)  Authorities shall be reviewed under Subsection (a) in
6-15     the following groups:
6-16                 (1)  in group 1, Northeast Texas Municipal Water
6-17     District, Titus County Fresh Water Supply District No. 1, and
6-18     Franklin County Water District;
6-19                 (2)  in group 2, Angelina and Neches River Authority,
6-20     Lower Neches Valley Authority, Sabine River Authority, and Upper
6-21     Neches River Municipal Water Authority;
6-22                 (3)  in group 3, Red River Authority of Texas, Sulphur
6-23     River Municipal Water District, and Sulphur River Basin Authority;
6-24                 (4)  in group 4, San Jacinto River Authority, Gulf
6-25     Coast Water Authority, and North Harris County Regional Water
6-26     Authority;
 7-1                 (5)  in group 5, North Texas Municipal Water District,
 7-2     Tarrant Regional Water District, Trinity River Authority of Texas,
 7-3     and Dallas County Utility and Reclamation District;
 7-4                 (6)  in group 6, Brazos River Authority, West Central
 7-5     Texas Municipal Water District, and North Central Texas Municipal
 7-6     Water Authority;
 7-7                 (7)  in group 7, Guadalupe-Blanco River Authority,
 7-8     Lavaca-Navidad River Authority, Lower Colorado River Authority, and
 7-9     Upper Guadalupe River Authority;
7-10                 (8)  in group 8, Nueces River Authority, San Antonio
7-11     River Authority, and Bexar-Medina-Atascosa Counties Water Control
7-12     and Improvement District No. 1;
7-13                 (9)  in group 9, Colorado River Municipal Water
7-14     District, Central Colorado River Authority, and Upper Colorado
7-15     River Authority; and
7-16                 (10)  in group 10, Canadian River Municipal Water
7-17     Authority, Mackenzie Municipal Water Authority, and White River
7-18     Municipal Water District.
7-19           (c)  The council may not review an authority under this
7-20     section more than once every five years.  The council may, however,
7-21     request an authority that has been reviewed to provide follow-up
7-22     information on any specific item or issue raised during the initial
7-23     review.
7-24           (d)  The council, on a request by an authority, may modify
7-25     the schedule in order to have the flexibility in scheduling the
7-26     review, if needed, to be more responsive to particular
 8-1     circumstances, changing conditions, or time-sensitive conflicts.
 8-2           Sec. 9.011.  PERFORMANCE STANDARDS.  (a)    Before its
 8-3     five-year review under Section 9.010, an authority shall report to
 8-4     the council a self-assessment of:
 8-5                 (1)  how the authority is achieving its stated mission
 8-6     and goals, including an identification of any barriers that exist
 8-7     in achieving the mission and goals;
 8-8                 (2)  how the authority is providing service to its
 8-9     customers, including mechanisms the authority provides to encourage
8-10     input from the public and its customers;
8-11                 (3)  how the authority is addressing issues raised by
8-12     its most recent management audit, including its administrative
8-13     policies; and
8-14                 (4)  the authority's role in the regional water
8-15     planning process.
8-16           (b)  The authority's report to the council under this section
8-17     shall include recommendations related to:
8-18                 (1)  any interregional issues the authority has
8-19     identified as problematic and any potential solutions to those
8-20     issues; and
8-21                 (2)  solutions to any barriers the authority determines
8-22     are interfering with the successful implementation of the approved
8-23     regional water plan or state water plan.
8-24           Sec. 9.012.  ADMINISTRATIVE POLICIES FOR AUTHORITIES.  The
8-25     commission shall expand the applicability of its rules under 30
8-26     T.A.C. Chapter 292 to include all the authorities subject to this
 9-1     title.  The commission shall provide the council with copies of the
 9-2     most recent information provided by each authority in accordance
 9-3     with its administrative rules.
 9-4           Sec. 9.013.  GIFTS AND GRANTS.  The council may accept gifts
 9-5     and grants from any source to carry out the purposes of this
 9-6     chapter.  The use of gifts and grants other than legislative
 9-7     appropriations is subject only to limitations contained in the gift
 9-8     or grant.
 9-9           Sec. 9.014.  FUNDING.  (a)  The interagency water policy
9-10     account is a special account in the general revenue fund.
9-11           (b)  The interagency water policy account consists of
9-12     legislative appropriations, gifts and grants received under Section
9-13     9.013, and other money required by law to be deposited in the
9-14     account.
9-15           (c)  Funds in the interagency water policy account may be
9-16     used only as provided by this chapter.
9-17           Sec. 9.015.  CONTINUING RIGHT OF SUPERVISION.  Nothing in
9-18     this chapter shall affect the continuing right of supervision over
9-19     authorities by the commission as provided by Section 12.081.
9-20           Sec. 9.016.  PUBLIC PARTICIPATION.  The council shall
9-21     encourage public input regarding the exercise of its powers and
9-22     duties under Section 9.008, its preparation of the report described
9-23     in Section 9.009, and its review of authorities under Sections
9-24     9.010 and 9.011.
 10-1                 ARTICLE 2.  SURFACE WATER AND GROUNDWATER
 10-2               CONJUNCTIVE MANAGEMENT; REGULATORY INCENTIVES
 10-3          SECTION 2.01.  Section 11.002, Water Code, is amended by
 10-4    adding Subdivisions (7), (11), (12), (13), and (14) to read as
 10-5    follows:
 10-6                (7)  "Instream use" means the use of state water for
 10-7    fisheries, water quality protection, aquatic and riparian wildlife
 10-8    habitat, freshwater inflows for bays and estuaries, and any other
 10-9    similar use recognized by law.
10-10                (11)  "River basin" means a river or coastal basin
10-11    designated by the board as a river basin under Section 16.051.  The
10-12    term does not include waters of the bays or arms originating in the
10-13    Gulf of Mexico.
10-14                (12)  "Agriculture" means any of the following
10-15    activities:
10-16                      (A)  cultivating the soil to produce crops for
10-17    human food, animal feed, or planting seed or for the production of
10-18    fibers;
10-19                      (B)  the practice of floriculture, viticulture,
10-20    silviculture, and horticulture, including the cultivation of plants
10-21    in containers or nonsoil media, by a nursery grower;
10-22                      (C)  raising, feeding, or keeping animals for the
10-23    production of food or fiber, leather, pelts, or other tangible
10-24    products having a commercial value;
10-25                      (D)  wildlife management; and
10-26                      (E)  planting cover crops, including cover crops
 11-1    cultivated for transplantation, or leaving land idle for the
 11-2    purpose of participating in any governmental program or normal crop
 11-3    or livestock rotation procedure.
 11-4                (13)  "Agricultural use" means any use or activity
 11-5    involving agriculture, including irrigation.
 11-6                (14)  "Nursery grower" means a person who grows more
 11-7    than 50 percent of the products that the person either sells or
 11-8    leases, regardless of the variety sold, leased, or grown.  For the
 11-9    purpose of this definition, "grow" means the actual cultivation or
11-10    propagation of the product beyond the mere holding or maintaining
11-11    of the item prior to sale or lease and typically includes
11-12    activities associated with the production or multiplying of stock
11-13    such as the development of new plants from cuttings, grafts, plugs,
11-14    or seedlings.
11-15          SECTION 2.02.  Subsection (a), Section 11.023, Water Code, is
11-16    amended to read as follows:
11-17          (a)  State water may be appropriated, stored, or diverted
11-18    for:
11-19                (1)  domestic and municipal uses, including water for
11-20    sustaining human life and the life of domestic animals;
11-21                (2)  industrial uses, meaning processes designed to
11-22    convert materials of a lower order of value into forms having
11-23    greater usability and commercial value, including the development
11-24    of power by means other than hydroelectric;
11-25                (3)  agricultural uses [irrigation];
11-26                (4)  mining and recovery of minerals;
 12-1                (5)  hydroelectric power;
 12-2                (6)  navigation;
 12-3                (7)  recreation and pleasure;
 12-4                (8)  [stock raising;]
 12-5                [(9)]  public parks; and
 12-6                (9) [(10)]  game preserves.
 12-7          SECTION 2.03.  Section 11.024, Water Code, is amended to read
 12-8    as follows:
 12-9          Sec. 11.024.  APPROPRIATION:  PREFERENCES.  In order to
12-10    conserve and properly utilize state water, the public welfare
12-11    requires not only recognition of beneficial uses but also a
12-12    constructive public policy regarding the preferences between these
12-13    uses, and it is therefore declared to be the public policy of this
12-14    state that in appropriating state water preference shall be given
12-15    to the following uses in the order named:
12-16                (1)  domestic and municipal uses, including water for
12-17    sustaining human life and the life of domestic animals, it being
12-18    the public policy of the state and for the benefit of the greatest
12-19    number of people that in the appropriation of water as herein
12-20    defined, the appropriation of water for domestic and municipal uses
12-21    shall be and remain superior to the rights of the state to
12-22    appropriate the same for all other purposes;
12-23                (2)  agricultural uses and industrial uses, meaning
12-24    processes designed to convert materials of a lower order of value
12-25    into forms having greater usability and commercial value, including
12-26    the development of power by means other than hydroelectric;
 13-1                (3)  [irrigation;]
 13-2                [(4)]  mining and recovery of minerals;
 13-3                (4) [(5)]  hydroelectric power;
 13-4                (5) [(6)]  navigation;
 13-5                (6) [(7)]  recreation and pleasure; and
 13-6                (7) [(8)]  other beneficial uses.
 13-7          SECTION 2.04.  Section 11.038, Water Code, is amended to read
 13-8    as follows:
 13-9          Sec. 11.038.  RIGHTS OF OWNERS OF LAND ADJOINING CANAL, ETC.
13-10    (a)  A person who owns or holds a possessory interest in land
13-11    adjoining or contiguous to a canal, ditch, flume, lateral, dam,
13-12    reservoir, or lake constructed and maintained under the provisions
13-13    of this chapter and who has secured a right to the use of water in
13-14    the canal, ditch, flume, lateral, dam, reservoir, or lake is
13-15    entitled to be supplied from the canal, ditch, flume, lateral, dam,
13-16    reservoir, or lake with water [for irrigation of the land and] for
13-17    agricultural uses, mining, milling, manufacturing, development of
13-18    power, and stock raising, in accordance with the terms of a
13-19    person's [his] contract.
13-20          (b)  If the person, association of persons, or corporation
13-21    owning or controlling the water and the person who owns or holds a
13-22    possessory interest in the adjoining land cannot agree on a price
13-23    for a permanent water right or for the use of enough water for
13-24    irrigation of the person's land or for agricultural uses, mining,
13-25    milling, manufacturing, development of power, or stock raising,
13-26    then the party owning or controlling the water, if the person [he]
 14-1    has any water not contracted to others, shall furnish the water
 14-2    necessary for these purposes at reasonable and nondiscriminatory
 14-3    prices.
 14-4          SECTION 2.05.  Subsection (p), Section 11.085, Water Code, is
 14-5    amended to read as follows:
 14-6          (p)  [For the purposes of this section, a basin is designated
 14-7    as provided in accordance with Section 16.051 of this code.]  A
 14-8    river basin may not be redesignated in order to allow a transfer or
 14-9    diversion of water otherwise in violation of this section.
14-10          SECTION 2.06.  Section 11.088, Water Code, is amended to read
14-11    as follows:
14-12          Sec. 11.088.  DESTRUCTION OF WATERWORKS.  No person may
14-13    wilfully cut, dig, break down, destroy, or injure or open a gate,
14-14    bank, embankment, or side of any ditch, canal, reservoir, flume,
14-15    tunnel or feeder, pump or machinery, building, structure, or other
14-16    work which is the property of another, or in which another owns an
14-17    interest, or which is lawfully possessed or being used by another,
14-18    and which is used for [irrigation,] milling, mining, manufacturing,
14-19    the development of power, domestic purposes, agricultural uses, or
14-20    stock raising, with intent to:
14-21                (1)  maliciously injure a person, association,
14-22    corporation, water improvement or irrigation district;
14-23                (2)  gain advantage for himself; or
14-24                (3)  take or steal water or cause water to run out or
14-25    waste out of the ditch, canal, or reservoir, feeder, or flume for
14-26    his own advantage or to the injury of a person lawfully entitled to
 15-1    the use of the water or the use or management of the ditch, canal,
 15-2    tunnel, reservoir, feeder, flume, machine, structure, or other
 15-3    irrigation work.
 15-4          SECTION 2.07.  Subsection (a), Section 11.122, Water Code, is
 15-5    amended to read as follows:
 15-6          (a)  All holders of permits, certified filings, and
 15-7    certificates of adjudication issued under Section 11.323 of this
 15-8    code shall obtain from the commission authority to change the place
 15-9    of use, purpose of use, point of diversion, rate of diversion,
15-10    acreage to be irrigated, or otherwise alter a water right.  Without
15-11    obtaining an amendment, the holder of a permit, certified filing,
15-12    or certificate of adjudication that includes industrial use may use
15-13    or supply water for an agricultural use that was classified as
15-14    industrial before September 1, 2001.  An amendment changing the
15-15    purpose of use from irrigation to agricultural uses shall be
15-16    authorized without notice or hearing under Section 11.132 if the
15-17    application requests no other change.
15-18          SECTION 2.08.  Subsection (b), Section 11.1271, Water Code,
15-19    is amended to read as follows:
15-20          (b)  The commission shall require the holder of an existing
15-21    permit, certified filing, or certificate of adjudication for the
15-22    appropriation of surface water in the amount of 1,000 acre-feet a
15-23    year or more for municipal, industrial, and other uses, and 10,000
15-24    acre-feet a year or more for irrigation uses, to develop, submit,
15-25    and implement a water conservation plan, consistent with the state
15-26    [appropriate approved regional] water plan, that adopts reasonable
 16-1    water conservation measures as defined by Subdivision (8)(B),
 16-2    Section 11.002[, of this code].  The requirement for a water
 16-3    conservation plan under this section shall not result in the need
 16-4    for an amendment to an existing permit, certified filing, or
 16-5    certificate of adjudication.
 16-6          SECTION 2.09.  Subsection (a), Section 11.1272, Water Code,
 16-7    is amended to read as follows:
 16-8          (a)  The commission shall by rule require wholesale and
 16-9    retail public water suppliers and irrigation districts to develop
16-10    drought contingency plans consistent with the state [appropriate
16-11    approved regional] water plan to be implemented during periods of
16-12    water shortages and drought.
16-13          SECTION 2.10.  Subsection (b), Section 11.134, Water Code, is
16-14    amended to read as follows:
16-15          (b)  The commission shall grant the application only if:
16-16                (1)  the application conforms to the requirements
16-17    prescribed by this chapter and is accompanied by the prescribed
16-18    fee;
16-19                (2)  unappropriated water is available in the source of
16-20    supply;
16-21                (3)  the proposed appropriation:
16-22                      (A)  is intended for a beneficial use;
16-23                      (B)  does not impair existing water rights or
16-24    vested riparian rights;
16-25                      (C)  is not detrimental to the public welfare;
16-26                      (D)  considers the assessments performed under
 17-1    Sections 11.147(d) and (e) and Sections 11.150, 11.151, and 11.152
 17-2    [effects of any hydrological connection between surface water and
 17-3    groundwater]; and
 17-4                      (E)  addresses a water supply need in a manner
 17-5    that is consistent with the state water plan and relevant [an
 17-6    approved] regional water plans [plan for any area in which the
 17-7    proposed appropriation is located], unless the commission
 17-8    determines that conditions warrant waiver of this requirement; and
 17-9                (4)  the applicant has provided evidence that
17-10    reasonable diligence will be used to avoid waste and achieve water
17-11    conservation as defined by Subdivision (8)(B), Section 11.002[, of
17-12    this code].
17-13          SECTION 2.11.  Subsection (a), Section 11.138, Water Code, is
17-14    amended to read as follows:
17-15          (a)  The commission may issue temporary permits for
17-16    beneficial purposes to the extent that they do not interfere with
17-17    or adversely affect prior appropriations or vested rights on the
17-18    stream from which water is to be diverted under such temporary
17-19    permit.  The commission may, by appropriate order, authorize any
17-20    member of the commission to approve and issue temporary permits
17-21    without notice and hearing if it appears to such issuing party that
17-22    sufficient water is available at the proposed point of diversion to
17-23    satisfy the requirements of the temporary permit as well as all
17-24    existing rights.  No temporary permit issued without notice and
17-25    hearing shall authorize more than 10 acre-feet of water, nor may it
17-26    be for a term in excess of one year.  The commission by rule may
 18-1    authorize the beneficial use, without a permit, of not more than 25
 18-2    acre-feet of water, for a term not to exceed one year, if the
 18-3    diversion of water will not affect existing water right holders and
 18-4    the user of the water registers the use with the commission in the
 18-5    manner required by the commission.
 18-6          SECTION 2.12.  Section 11.142, Water Code, is amended to read
 18-7    as follows:
 18-8          Sec. 11.142.  PERMIT EXEMPTIONS.  (a)  Without obtaining a
 18-9    permit, a person may construct on the person's [his] own property a
18-10    dam or reservoir with normal storage of not more than 200 acre-feet
18-11    of water for domestic and livestock purposes.  A person who
18-12    temporarily stores more than 200 acre-feet of water in a dam or
18-13    reservoir described by this subsection is not required to obtain a
18-14    permit for the dam or reservoir if the person can demonstrate that
18-15    the person has not stored in the dam or reservoir more than 200
18-16    acre-feet of water on average in any 12-month period.
18-17          (b)  Without obtaining a permit, a person may construct on
18-18    the person's property a dam or reservoir with normal storage of not
18-19    more than 200 acre-feet of water for fish and wildlife purposes if
18-20    the property on which the dam or reservoir will be constructed is
18-21    qualified open-space land, as defined by Section 23.51, Tax Code.
18-22          (c)  Without obtaining a permit, a person who is drilling and
18-23    producing petroleum and conducting operations associated with
18-24    drilling and producing petroleum may take for those purposes state
18-25    water from the Gulf of Mexico and adjacent bays and arms of the
18-26    Gulf of Mexico in an amount not to exceed one acre-foot during each
 19-1    24-hour period.
 19-2          (d) [(c)]  Without obtaining a permit, a person may construct
 19-3    or maintain a reservoir for the sole purpose of sediment control as
 19-4    part of a surface coal mining operation under the Texas Surface
 19-5    Coal Mining and Reclamation Act (Article 5920-11, Vernon's Texas
 19-6    Civil Statutes).
 19-7          SECTION 2.13.  Section 11.146, Water Code, is amended by
 19-8    adding Subsection (g) to read as follows:
 19-9          (g)  This section does not apply to a permit for construction
19-10    of a reservoir designed for the storage of more than 75,000
19-11    acre-feet of water.
19-12          SECTION 2.14.  Subsections (b), (d), and (e), Section 11.147,
19-13    Water Code, are amended to read as follows:
19-14          (b)  In its consideration of an application for a permit to
19-15    store, take, or divert water, the commission shall assess the
19-16    effects, if any, of the issuance of the permit on the bays and
19-17    estuaries of Texas.  For permits issued within an area that is 200
19-18    river miles of the coast, to commence from the mouth of the river
19-19    thence inland, the commission shall include in the permit, to the
19-20    extent practicable when considering all public interests and the
19-21    studies mandated by Section 16.058 as evaluated under Section
19-22    11.1491, those conditions considered necessary to maintain
19-23    beneficial inflows to any affected bay and estuary system.
19-24          (d)  In its consideration of an application to store, take or
19-25    divert water, the commission shall include in the permit, to the
19-26    extent practicable when considering all public interests, those
 20-1    conditions considered necessary to maintain [consider the effect,
 20-2    if any, of the issuance of the permit on] existing instream uses
 20-3    and water quality of the stream or river to which the application
 20-4    applies.
 20-5          (e)  The commission shall include in the permit, to the
 20-6    extent practicable when considering all public interests, those
 20-7    conditions considered necessary to maintain [also consider the
 20-8    effect, if any, of the issuance of the permit on] fish and wildlife
 20-9    habitats.
20-10          SECTION 2.15.  Subsection (b), Section 11.173, Water Code, is
20-11    amended to read as follows:
20-12          (b)  A permit, certified filing, or certificate of
20-13    adjudication or a portion of a permit, certified filing, or
20-14    certificate of adjudication is exempt from cancellation under
20-15    Subsection (a) of this section:
20-16                (1)  to the extent of the owner's participation in the
20-17    Conservation Reserve Program authorized by the Food Security Act,
20-18    Pub.L. No. 99-198, Secs. 1231-1236, 99 Stat. 1354, 1509-1514 (1985)
20-19    or a similar governmental program; [or]
20-20                (2)  if a significant [any] portion of the water
20-21    authorized to be used pursuant to a permit, certified filing, or
20-22    certificate of adjudication has been used in accordance with a
20-23    specific recommendation for meeting a water need included in the
20-24    state [regional] water plan approved pursuant to Section 16.053;
20-25                (3)  if the permit, certified filing, or certificate of
20-26    adjudication was obtained to meet demonstrated long-term public
 21-1    water supply or electric generation needs as evidenced by a water
 21-2    management plan developed by the holder and is consistent with
 21-3    projections of future water needs contained in the state water
 21-4    plan; or
 21-5                (4)  if the permit, certified filing, or certificate of
 21-6    adjudication was obtained as the result of the construction of a
 21-7    reservoir funded, in whole or in part, by the holder of the permit,
 21-8    certified filing, or certificate of adjudication as part of the
 21-9    holder's long-term water planning [of this code].
21-10          SECTION 2.16.  Subsection (b), Section 11.177, Water Code, is
21-11    amended to read as follows:
21-12          (b)  In determining what constitutes reasonable diligence or
21-13    a justified nonuse as used in Subsection (a)(2) [of this section],
21-14    the commission shall give consideration to:
21-15                (1)  whether sufficient water is available in the
21-16    source of supply to meet all or part of the appropriation during
21-17    the 10-year period of nonuse;
21-18                (2)  whether the nonuse is justified by the holder's
21-19    participation in the federal Conservation Reserve Program or a
21-20    similar governmental program as provided by Section 11.173(b)(1)
21-21    [of this code];
21-22                (3)  [whether the permit, certified filing, or
21-23    certificate of adjudication was obtained to meet demonstrated
21-24    long-term public water supply or electric generation needs as
21-25    evidenced by a water management plan developed by the holder and
21-26    consistent with projections of future water needs contained in the
 22-1    state water plan;]
 22-2                [(4)  whether the permit, certified filing, or
 22-3    certificate of adjudication was obtained as the result of the
 22-4    construction of a reservoir funded, in whole or in part, by the
 22-5    holder of the permit, certified filing, or certificate of
 22-6    adjudication as part of the holder's long-term water planning;]
 22-7                [(5)]  whether the existing or proposed authorized
 22-8    purpose and place of use are consistent with an approved regional
 22-9    water plan as provided by Section 16.053 [of this code];
22-10                (4) [(6)]  whether the permit, certified filing, or
22-11    certificate of adjudication has been deposited into the Texas Water
22-12    Bank as provided by Sections 15.7031 and 15.704 of this code or
22-13    whether it can be shown that the water right or water available
22-14    under the right is currently being made available for purchase
22-15    through private marketing efforts; or
22-16                (5) [(7)]  whether the permit, certified filing, or
22-17    certificate of adjudication has been reserved to provide for
22-18    instream flows or bay and estuary inflows.
22-19          SECTION 2.17.  Subdivisions (1) and (2), Section 15.701,
22-20    Water Code, are amended to read as follows:
22-21                (1)  "Deposit" means the placement of a water right or
22-22    the right to use water in the water bank for transfer or the
22-23    placement of a water right in the trust for instream uses.
22-24                (2)  "Depositor" means a person who deposits or has on
22-25    deposit a water right in the water bank or trust.
22-26          SECTION 2.18.  Subsection (a), Section 15.703, Water Code, is
 23-1    amended to read as follows:
 23-2          (a)  The board may take all actions necessary to operate the
 23-3    water bank and to facilitate the transfer of water rights from the
 23-4    water bank for future beneficial use including but not limited to:
 23-5                (1)  negotiating a sale price and terms acceptable to
 23-6    the depositor and purchaser;
 23-7                (2)  maintaining a registry of water bank deposits and
 23-8    those water users in need of additional supplies;
 23-9                (3)  informing water users in need of additional supply
23-10    of water rights available in the bank;
23-11                (4)  encouraging water right holders to implement water
23-12    conservation practices and deposit the right to use the conserved
23-13    water into the bank;
23-14                (5)  establishing requirements for deposit of a water
23-15    right into the water bank including minimum terms for deposit;
23-16                (6)  purchasing, holding, and transferring water or
23-17    water rights in its own name;
23-18                (7)  establishing regional water banks;
23-19                (8)  acting as a clearinghouse for water marketing
23-20    information including water availability, pricing of water
23-21    transactions, environmental considerations, and potential buyers
23-22    and sellers of water rights;
23-23                (9)  preparing and publishing a manual on structuring
23-24    water transactions;
23-25                (10)  [accepting and holding donations of water rights
23-26    to meet instream, water quality, fish and wildlife habitat, or bay
 24-1    and estuary inflow needs;]
 24-2                [(11)]  entering into contracts with persons to pay for
 24-3    feasibility studies or the preparation of plans and specifications
 24-4    relating to water conservation efforts or to estimate the amount of
 24-5    water that would be saved through conservation efforts; and
 24-6                (11) [(12)]  other actions to facilitate water
 24-7    transactions.
 24-8          SECTION 2.19.  Section 15.7031, Water Code, is amended to
 24-9    read as follows:[]
24-10          Sec. 15.7031.  CREATION OF THE TEXAS WATER TRUST.  (a)  The
24-11    Parks and Wildlife Department shall establish the Texas Water
24-12    Trust.  The Parks and Wildlife Department shall administer the
24-13    trust to facilitate deposits in the trust of [Texas Water Trust is
24-14    established within the water bank to hold] water rights dedicated
24-15    to instream uses [environmental needs], including instream flows,
24-16    water quality, fish and wildlife habitat, or bay and estuary
24-17    inflows.
24-18          (b)  A water right which has been used in accordance with a
24-19    certificate of adjudication or permit or any portion of a water
24-20    right which has been used in accordance with a certificate of
24-21    adjudication or permit may be deposited into the trust.  A water
24-22    right which has not been used in accordance with a certificate of
24-23    adjudication or permit or any portion of a right which has not been
24-24    used in accordance with a certificate of adjudication or permit
24-25    shall not be deposited into the trust.
24-26          (c)  The Parks and Wildlife Department [board], in
 25-1    consultation with the board [Parks and Wildlife Department] and the
 25-2    commission, shall adopt rules governing the process for holding and
 25-3    transferring water rights.
 25-4          (d) [(c)]  The deposit [dedication] of any water rights
 25-5    [placed] in the trust must be reviewed and approved by the
 25-6    commission, in consultation with the board and the Parks and
 25-7    Wildlife Department.  In addition, the Department of Agriculture
 25-8    may provide input to the commission, as appropriate, during the
 25-9    review and approval process for depositing [dedication of] water
25-10    rights.
25-11          (e) [(d)]  Water rights may be held in the trust for a term
25-12    specified by contractual agreement or in perpetuity.  A water right
25-13    may be deposited in the trust for an initial term of up to 10 years
25-14    or may be deposited in perpetuity.  During its deposit in the
25-15    trust, the water right is exempt from cancellation by the
25-16    commission under the terms of Subchapter E, Chapter 11.
25-17          SECTION 2.20.  Subchapter K, Chapter 15, Water Code, is
25-18    amended by adding Section 15.7032 to read as follows:
25-19          Sec. 15.7032.  OPERATION OF THE TEXAS WATER TRUST.  (a)  The
25-20    Parks and Wildlife Department may take all actions necessary to
25-21    operate the trust and to facilitate the donation of water rights to
25-22    the trust including:
25-23                (1)  encouraging water right holders to deposit water
25-24    rights in the trust, especially in high-priority water bodies;
25-25                (2)  negotiating trust acquisitions acceptable to
25-26    depositors;
 26-1                (3)  maintaining a registry of trust deposits;
 26-2                (4)  informing water rights holders and the public of
 26-3    the need for instream flows and freshwater inflows;
 26-4                (5)  purchasing, holding, and transferring water or
 26-5    water rights in its own name;
 26-6                (6)  acting as a clearinghouse for information on
 26-7    instream use water needs including water availability, water
 26-8    quality, instream flows, freshwater inflows, fish and wildlife
 26-9    habitat, and recreation;
26-10                (7)  preparing and publishing a guidance document on
26-11    the trust; and
26-12                (8)  other action to facilitate trust transactions.
26-13          (b)  The Parks and Wildlife Department may adopt rules
26-14    necessary for implementation of the trust.
26-15          (c)  The Parks and Wildlife Department may contract with any
26-16    person to achieve the purposes of this subchapter.
26-17          SECTION 2.21.  Subsection (a), Section 15.704, Water Code, is
26-18    amended to read as follows:
26-19          (a)  A water right may be deposited in the water bank for an
26-20    initial term of up to 10 years, [unless otherwise held in the Texas
26-21    Water Trust as established under Section 15.7031 of this code,]
26-22    during which time the water right is exempt from cancellation by
26-23    the commission under the terms of Subchapter E of Chapter 11 of
26-24    this code.  A water right is exempt from cancellation under this
26-25    subsection only once even if it has been transferred or
26-26    redeposited.
 27-1          SECTION 2.22.  Subchapter K, Chapter 15, Water Code, is
 27-2    amended by adding Section 15.7071 to read as follows:
 27-3          Sec. 15.7071.  WATER TRUST ACCOUNT.  (a)  The water trust
 27-4    account is created as a special account in the general revenue fund
 27-5    and is composed of:
 27-6                (1)  money appropriated to the Parks and Wildlife
 27-7    Department for the program; and
 27-8                (2)  grants, contracts, gifts, or other funds that the
 27-9    Parks and Wildlife Department may receive relating to this
27-10    subchapter.
27-11          (b)  The money in the water trust account may be used only
27-12    for the administration and operation of the trust by the Parks and
27-13    Wildlife Department under this subchapter.
27-14          SECTION 2.23.  Section 16.012, Water Code, is amended by
27-15    adding Subsections (l) and (m) to read as follows:
27-16          (l)  The executive administrator shall obtain or develop
27-17    groundwater availability models for major and minor aquifers in
27-18    coordination with regional water planning groups created under
27-19    Section 16.053 that overlie the aquifers.  Modeling of major
27-20    aquifers shall be completed not later than October 1, 2004.  On
27-21    completing a groundwater availability model for an aquifer, the
27-22    executive administrator shall provide the model to each groundwater
27-23    conservation district and each regional water planning group
27-24    created under Section 16.053 overlying that aquifer.
27-25          (m)  The executive administrator may conduct surveys of
27-26    persons using groundwater and surface water at intervals determined
 28-1    appropriate by the executive administrator to gather data to be
 28-2    used for long-term water supply planning.  Recipients of the survey
 28-3    shall complete and return the survey to the executive
 28-4    administrator.  Persons who fail to timely complete and return the
 28-5    survey shall not be eligible for funding from the board for board
 28-6    programs and shall be ineligible to obtain permits, permit
 28-7    amendments, or permit renewals from the commission under Chapter
 28-8    11.  Surveys obtained by the board from nongovernmental entities
 28-9    shall be excepted from the requirements of Section 552.021,
28-10    Government Code, if so requested in writing by the person
28-11    completing the survey.  This subsection does not apply to survey
28-12    information regarding windmills used for domestic and livestock
28-13    use.
28-14          SECTION 2.24.  Section 16.051, Water Code, is amended by
28-15    amending Subsections (a), (d), (f), (g), and (h) and adding
28-16    Subsection (i) to read as follows:
28-17          (a)  Not [No] later than January 5, 2002, and before the end
28-18    of each successive five-year period after that date [every five
28-19    years thereafter], the board shall prepare, develop, formulate, and
28-20    adopt a comprehensive state water plan that incorporates the
28-21    regional water plans approved under Section 16.053 to the extent
28-22    the board determines that such plans provide efficient strategies
28-23    and recommendations regarding groundwater and surface water use.
28-24    The state water plan shall provide for the orderly development,
28-25    management, and conservation of water resources and preparation for
28-26    and response to drought conditions, in order that sufficient water
 29-1    will be available at a reasonable cost to ensure public health,
 29-2    safety, and welfare; further economic development; and protect the
 29-3    agricultural and natural resources of the entire state.
 29-4          (d)  The board, in coordination with the commission, the
 29-5    Department of Agriculture, and the Parks and Wildlife Department,
 29-6    shall adopt by rule guidance principles for the state water plan
 29-7    which reflect the public interest of the entire state.  When
 29-8    adopting guidance principles, due consideration shall be given to
 29-9    the construction and improvement of surface water resources and the
29-10    application of principles that result in voluntary redistribution
29-11    of water resources.  The guidance principles shall include
29-12    standards for economic analysis to be used in regional and state
29-13    water planning.  The board shall review and update the guidance
29-14    principles, with input from the commission, the Department of
29-15    Agriculture, and the Parks and Wildlife Department, as necessary
29-16    but at least every five years to coincide with the five-year cycle
29-17    for adoption of a new water plan as described in Subsection (a).
29-18          (f)  The legislature may designate a[:]
29-19                [(1)]  river or stream segment of unique ecological
29-20    value.  This designation solely means that a state agency or
29-21    political subdivision of the state may not finance the actual
29-22    construction of a reservoir in a specific river or stream segment
29-23    designated by the legislature under this subsection.
29-24          (g)  The legislature may designate a[; or]
29-25                [(2)]  site of unique value for the construction of a
29-26    reservoir.
 30-1          [(g)]  A state agency or political subdivision of the state
 30-2    may not obtain a fee title or an easement that would[:]
 30-3                [(1)  destroy the unique ecological value of a river or
 30-4    stream segment designated by the legislature under Subsection (f)
 30-5    of this section; or]
 30-6                [(2)]  significantly prevent the construction of a
 30-7    reservoir on a site designated by the legislature under [Subsection
 30-8    (f) of] this subsection [section].
 30-9          (h)  The board, the commission, or the Parks and Wildlife
30-10    Department or a political subdivision affected by an action taken
30-11    in violation of Subsections (f) and [Subsection] (g) [of this
30-12    section] may bring a cause of action to remedy or prevent the
30-13    violation.  A cause of action brought under this subsection must be
30-14    filed in a district court in Travis County or in the county in
30-15    which the action is proposed or occurring.
30-16          (i)  If the board determines that a conflict requiring
30-17    resolution exists between the state water plan and a regional water
30-18    plan developed under Section 16.053, the board shall coordinate
30-19    with the involved region to resolve the conflict.  If conflict
30-20    remains, the board shall resolve the conflict.  If the board
30-21    determines that the resolution requires a revision of an approved
30-22    regional water plan, the board shall suspend the approval of that
30-23    plan and provide information to the regional water planning group.
30-24    The regional water planning group shall prepare any revisions to
30-25    its plan specified by the board and shall hold, after notice, at
30-26    least one public hearing at some central location within the
 31-1    regional water planning area.  The regional water planning group
 31-2    shall consider all public and board comments; prepare, revise, and
 31-3    adopt its plan; and submit the revised plan to the board for
 31-4    approval.  On the request of the involved region, the board shall
 31-5    include discussion of the conflict and its resolution in the state
 31-6    water plan that the board provides to the governor, the lieutenant
 31-7    governor, and the speaker of the house of representatives under
 31-8    Subsection (e).
 31-9          SECTION 2.25.  Subsections (d) and (e), Section 16.053, Water
31-10    Code, are amended to read as follows:
31-11          (d)  The board shall provide guidelines for the consideration
31-12    of existing regional planning efforts by regional water planning
31-13    groups.  The board shall provide guidelines for the format in which
31-14    information shall be presented in the regional water plans.  The
31-15    board by rule shall require a holder of a surface water permit, a
31-16    certified filing, or a certificate of adjudication for surface
31-17    water, a holder of a permit for the export of groundwater from a
31-18    groundwater conservation district, a retail public water supplier,
31-19    a wholesale water provider, an irrigation district, and any other
31-20    person who is transporting groundwater or surface water 20 miles or
31-21    more to report to the board information on certain water pipelines
31-22    and other facilities that can be used for water conveyance.
31-23    Nothing in the initial planning effort shall prevent development of
31-24    a management plan or project where local or regional needs require
31-25    action prior to completion of the initial regional water plan under
31-26    this section.
 32-1          (e)  Each regional water planning group shall submit to the
 32-2    board a regional water plan that:
 32-3                (1)  is consistent with the guidance principles for the
 32-4    state water plan adopted by the board under Section 16.051(d);
 32-5                (2)  provides information based on data provided or
 32-6    approved by the board in a format consistent with the guidelines
 32-7    provided by the board under Subsection (d);
 32-8                (3)  identifies:
 32-9                      (A)  each source of water supply in the regional
32-10    water planning area in accordance with the guidelines provided by
32-11    the board under Subsections (d) and (f);
32-12                      (B)  factors specific to each source of water
32-13    supply to be considered in determining whether to initiate a
32-14    drought response; [and]
32-15                      (C)  actions to be taken as part of the response;
32-16    and
32-17                      (D)  information on water pipelines and other
32-18    facilities that can be used for water conveyance as provided by
32-19    board rules and guidelines;
32-20                (4)  has specific provisions for water management
32-21    strategies to be used during a drought of record;
32-22                (5)  includes but is not limited to consideration of
32-23    the following:
32-24                      (A)  any existing water or drought planning
32-25    efforts addressing all or a portion of the region;
32-26                      (B)  certified groundwater conservation district
 33-1    management plans and other plans submitted under Section 16.054;
 33-2                      (C)  all potentially feasible water management
 33-3    strategies, including but not limited to improved conservation,
 33-4    reuse, and management of existing water supplies, acquisition of
 33-5    available existing water supplies, and development of new water
 33-6    supplies;
 33-7                      (D)  protection of existing water rights in the
 33-8    region;
 33-9                      (E)  opportunities for and the benefits of
33-10    developing regional water supply facilities or providing regional
33-11    management of water supply facilities;
33-12                      (F)  appropriate provision for environmental
33-13    water needs and for the effect of upstream development on the bays,
33-14    estuaries, and arms of the Gulf of Mexico and the effect of plans
33-15    on navigation;
33-16                      (G)  provisions in Section 11.085(k)(1) if
33-17    interbasin transfers are contemplated;
33-18                      (H)  voluntary transfer of water within the
33-19    region using, but not limited to, regional water banks, sales,
33-20    leases, options, subordination agreements, and financing
33-21    agreements; and
33-22                      (I)  emergency transfer of water under Section
33-23    11.139, including information on the part of each permit, certified
33-24    filing, or certificate of adjudication for nonmunicipal use in the
33-25    region that may be transferred without causing unreasonable damage
33-26    to the property of the nonmunicipal water rights holder; [and]
 34-1                (6)  identifies river and stream segments of unique
 34-2    ecological value and sites of unique value for the construction of
 34-3    reservoirs that the regional water planning group recommends for
 34-4    protection under Section 16.051;
 34-5                (7)  assesses the impact of the plan on unique river
 34-6    and stream segments identified in Subdivision (6); and
 34-7                (8)  describes the impact of proposed water management
 34-8    strategies on water quality.
 34-9          SECTION 2.26.  Subdivision (7), Subsection (h), Section
34-10    16.053, Water Code, is amended to read as follows:
34-11                (7)  The board may approve a regional water plan only
34-12    after it has determined that:
34-13                      (A)  [that] all interregional conflicts involving
34-14    that regional water planning area have been resolved;
34-15                      (B)  the plan includes reasonable water
34-16    conservation practices and drought management measures
34-17    incorporating, at a minimum, the provisions of Sections 11.1271 and
34-18    11.1272; and
34-19                      (C)  the plan is consistent with long-term
34-20    protection of the state's water resources, agricultural resources,
34-21    and natural resources as embodied in the guidance principles
34-22    adopted under Section 16.051(d).
34-23          SECTION 2.27.  Section 16.053, Water Code, is amended by
34-24    amending Subsection (j) and adding Subsection (p) to read as
34-25    follows:
34-26          (j)  The board may provide financial assistance to political
 35-1    subdivisions under Subchapters E and F of this chapter, Subchapters
 35-2    C, D, E, F, [and] J, O, and P, Chapter 15, and Subchapters D, I, K,
 35-3    and L, Chapter 17, for water supply projects only if:
 35-4                (1)  the board determines that the needs to be
 35-5    addressed by the project will be addressed in a manner that is
 35-6    consistent with the state water plan; and
 35-7                (2)  beginning January 5, 2002, the board:
 35-8                      (A)  has approved a regional water plan as
 35-9    provided by Subsection (i), and any required updates of the plan,
35-10    for the region of the state that includes the area benefiting from
35-11    the proposed project; and
35-12                      (B)  determines that the needs to be addressed by
35-13    the project will be addressed in a manner that is consistent with
35-14    that regional water plan.
35-15          (p)  If a groundwater conservation district files a petition
35-16    with the board stating that a conflict requiring resolution may
35-17    exist between the district's certified groundwater conservation
35-18    district management plan developed under Section 36.1071 and the
35-19    approved regional water plan, the board shall facilitate
35-20    coordination between the district and the involved region to
35-21    resolve the conflict.  If conflict remains, the board shall resolve
35-22    the conflict.  If the board determines that resolution of conflict
35-23    requires a revision of an approved regional water plan, the board
35-24    shall suspend the approval of that plan and provide information to
35-25    the regional water planning group.  The regional water planning
35-26    group shall prepare any revisions to its plan specified by the
 36-1    board and shall hold, after notice, at least one public hearing at
 36-2    some central location within the regional water planning area.  The
 36-3    regional water planning group shall consider all public and board
 36-4    comments; prepare, revise, and adopt its plan; and submit the
 36-5    revised plan to the board for approval and inclusion in the state
 36-6    water plan.  If the board determines that resolution of conflict
 36-7    requires a revision of the district's certified groundwater
 36-8    conservation district management plan, the board shall suspend the
 36-9    certification of that plan and provide information to the district.
36-10    The groundwater district shall prepare any revisions to its plan
36-11    specified by the board and shall hold, after notice, at least one
36-12    public hearing at some central location within the district.  The
36-13    groundwater district shall consider all public and board comments;
36-14    prepare, revise, and adopt its plan; and submit the revised plan to
36-15    the board for certification.  On the request of the involved region
36-16    or groundwater conservation district, the board shall include
36-17    discussion of the conflict and its resolution in the state water
36-18    plan that the board provides to the governor, the lieutenant
36-19    governor, and the speaker of the house of representatives under
36-20    Section 16.051(e).
36-21          SECTION 2.28.  Subsections (a), (c), and (d), Section 16.054,
36-22    Water Code, are amended to read as follows:
36-23          (a)  Notwithstanding the provisions of this subsection,
36-24    groundwater districts are the state's preferred method of managing
36-25    groundwater resources.  It is the policy of the state that water
36-26    resource management, water conservation, and drought planning
 37-1    should occur on an ongoing basis.  The board, commission, and Parks
 37-2    and Wildlife Department shall make available where appropriate
 37-3    technical and financial assistance for such planning.  In addition,
 37-4    the Department of Agriculture may provide input and assistance, as
 37-5    appropriate, for local water [such] planning.
 37-6          (c)  When preparing a plan to be submitted under this
 37-7    section, a person shall consider the implementation of a
 37-8    desalination program if practicable.
 37-9          (d)  The regional water planning group shall consider any
37-10    plan submitted under this section when preparing the regional water
37-11    plan under Section 16.053 of this code.  A political subdivision,
37-12    including a groundwater conservation district, in the regional
37-13    water planning area may request a regional water planning group to
37-14    consider specific changes to a regional water plan based on changed
37-15    conditions or new information.  The regional water planning group
37-16    shall consider the request and shall amend its regional water plan
37-17    if it determines that an amendment is warranted.
37-18          (e)  After January 5, 2002, when [(d)  When] preparing
37-19    individual water plans that address drought or the development,
37-20    management, or conservation of water resources from the holders of
37-21    existing permits, certified filings, or certificates of
37-22    adjudication, the water suppliers, [groundwater districts,] special
37-23    districts, irrigation districts, and other water users should
37-24    ensure that the plan is not in conflict with the applicable
37-25    approved regional water plan for their region.
37-26          SECTION 2.29.  Subdivision (11), Section 35.002, Water Code,
 38-1    is amended to read as follows:
 38-2                (11)  "Management area" means an area designated and
 38-3    delineated by the Texas Water Development Board [commission] as an
 38-4    area suitable for management of groundwater resources.
 38-5          SECTION 2.30.  Section 35.004, Water Code, is amended to read
 38-6    as follows:
 38-7          Sec. 35.004.  DESIGNATION OF GROUNDWATER MANAGEMENT AREAS.
 38-8    (a)  The Texas Water Development Board, with assistance and
 38-9    cooperation from the commission, shall designate groundwater
38-10    management areas covering all major and minor aquifers in the
38-11    state.  The initial designation of groundwater management areas
38-12    shall be completed by September 1, 2003 [On its own motion from
38-13    time to time, or on receiving a petition, the commission may
38-14    designate groundwater management areas].  Each groundwater
38-15    management area shall be designated with the objective of providing
38-16    the most suitable area for the management of the groundwater
38-17    resources.  To the extent feasible, the groundwater management area
38-18    shall coincide with the boundaries of a groundwater reservoir or a
38-19    subdivision of a groundwater reservoir.  The Texas Water
38-20    Development Board [commission] also may consider other factors,
38-21    including the boundaries of political subdivisions.
38-22          (b)  The commission may designate a groundwater management
38-23    area after September 1, 2001, for a petition filed and accepted by
38-24    the commission according to its rules in effect before September 1,
38-25    2001.  The commission shall act on the designation in accordance
38-26    with this section and Section 35.005 [On the request of any person
 39-1    interested in the petition, or on the request of the commission,
 39-2    the executive director shall prepare available evidence relating to
 39-3    the configuration of a groundwater management area.  Before making
 39-4    the designation, the commission shall consider the evidence
 39-5    prepared by the executive director and other evidence submitted at
 39-6    the hearing].
 39-7          (c)  The Texas Water Development Board [commission] may alter
 39-8    the boundaries of designated management areas as required by future
 39-9    conditions and as justified by factual data.  An alteration of
39-10    boundaries does not invalidate the previous creation of any
39-11    district.
39-12          (d)  The Texas Water Development Board [commission] shall
39-13    designate groundwater management areas using the procedures
39-14    applicable to rulemaking under [the Administrative Procedure Act,
39-15    Subchapter B,] Chapter 2001, Government Code.
39-16          SECTION 2.31.  Subsections (a) and (f), Section 35.007, Water
39-17    Code, are amended to read as follows:
39-18          (a)  The executive director and the executive administrator
39-19    shall meet periodically [at least once a year] to identify, based
39-20    on information gathered by the commission and the Texas Water
39-21    Development Board, those areas of the state that are experiencing
39-22    or that are expected to experience, within the immediately
39-23    following 25-year period, critical groundwater problems, including
39-24    shortages of surface water or groundwater, land subsidence
39-25    resulting from groundwater withdrawal, and contamination of
39-26    groundwater supplies.  By September 1, 2005, the commission, with
 40-1    assistance and cooperation from the Texas Water Development Board,
 40-2    shall complete the initial designation of priority groundwater
 40-3    management areas across all major and minor aquifers of the state
 40-4    for all areas that meet the criteria for such designation.  The
 40-5    studies may be prioritized considering information from the
 40-6    regional planning process, information from the Texas Water
 40-7    Development Board groundwater management areas and groundwater
 40-8    conservation districts, and any other information available.  After
 40-9    the initial designation of priority groundwater management areas,
40-10    the commission and the Texas Water Development Board shall annually
40-11    review the need for additional designations as provided by this
40-12    subsection.
40-13          (f)  The report shall include:
40-14                (1)  the recommended delineation of the boundaries of
40-15    any proposed priority groundwater management area in the form of an
40-16    order to be considered for adoption by the commission;
40-17                (2)  the reasons and supporting information for or
40-18    against designating the area as a priority groundwater management
40-19    area;
40-20                (3)  a recommendation regarding whether one or more
40-21    districts [a district] should be created in the priority
40-22    groundwater management area, [or whether] the priority groundwater
40-23    management area should be added to an existing district, or a
40-24    combination of those actions should be taken;
40-25                (4)  a recommendation as to actions that should be
40-26    considered to conserve natural resources;
 41-1                (5)  an evaluation of information or studies submitted
 41-2    to the executive director under Subsection (c); and
 41-3                (6)  any other information that the executive director
 41-4    considers helpful to the commission.
 41-5          SECTION 2.32.  Section 35.008, Water Code, is amended to read
 41-6    as follows:
 41-7          Sec. 35.008.  PROCEDURES FOR DESIGNATION OF PRIORITY
 41-8    GROUNDWATER MANAGEMENT AREA; CONSIDERATION OF CREATION OF NEW
 41-9    DISTRICT OR ADDITION OF LAND IN PRIORITY GROUNDWATER MANAGEMENT
41-10    AREA TO EXISTING DISTRICT; COMMISSION ORDER.  (a)  The commission
41-11    shall designate priority groundwater management areas using the
41-12    procedures provided by this chapter in lieu of those provided by
41-13    Subchapter B, Chapter 2001, Government Code.
41-14          (b)  The commission shall call an evidentiary hearing to
41-15    consider:
41-16                (1)  the designation of a priority groundwater
41-17    management area; and
41-18                (2)  whether one or more districts [a district] should
41-19    be created over all or part of a priority groundwater management
41-20    area,[; or]
41-21                [(3)  whether] all or part of the land in the priority
41-22    groundwater management area should be added to an existing
41-23    district, or a combination of those actions should be taken.
41-24    Consideration of this issue shall include a determination of
41-25    whether a district is feasible and practicable.
41-26          (c)  Evidentiary hearings shall be held at a location in one
 42-1    of the counties in which the priority groundwater management area
 42-2    is located, or proposed to be located, or in the nearest convenient
 42-3    location if adequate facilities are not available in those
 42-4    counties.
 42-5          (d)  At the hearing, the commission shall hear testimony and
 42-6    receive evidence from affected persons.  Affected persons shall
 42-7    include landowners, well owners, and other users of groundwater in
 42-8    the proposed priority groundwater management area.  The commission
 42-9    shall consider the executive director's report and supporting
42-10    information and the testimony and evidence received at the hearing.
42-11    If the commission considers further information necessary, the
42-12    commission may request such information from any source.
42-13          (e)  Any evidentiary hearing shall be concluded not later
42-14    than the 75th day after the date notice of the hearing is
42-15    published.
42-16          (f)  At the conclusion of the hearing and the commission's
42-17    considerations, the commission shall issue an order stating its
42-18    findings and conclusions, including whether a priority groundwater
42-19    management area should be designated in the area and
42-20    recommendations regarding district creation as set forth in
42-21    Subsection (g).
42-22          (g)  The commission's order designating a priority
42-23    groundwater management area must recommend that the area be covered
42-24    by a district in any of the following ways:
42-25                (1)  creation of one or more new districts;
42-26                (2)  addition of the land in the priority groundwater
 43-1    management area to one or more existing districts; or
 43-2                (3)  a combination of actions under Subdivisions (1)
 43-3    and (2).
 43-4          (h)  In recommending the boundaries of a district or
 43-5    districts under Subsection (g), the commission shall give
 43-6    preference to boundaries that are coterminous with those of the
 43-7    priority groundwater management area, but may recommend district
 43-8    boundaries along existing political subdivision boundaries at the
 43-9    discretion of the commission to facilitate district creation and
43-10    confirmation.
43-11          (i)  The designation of a priority groundwater management
43-12    area may not be appealed nor may it be challenged under Section
43-13    5.351 of this code or [the Administrative Procedure Act,] Section
43-14    2001.038, Government Code.
43-15          SECTION 2.33.  Subsections (a) and (b), Section 35.009, Water
43-16    Code, are amended to read as follows:
43-17          (a)  The commission shall have notice of the hearing
43-18    published in at least one newspaper with general circulation in the
43-19    county or counties in which the area proposed for designation as a
43-20    priority groundwater management area [or the area within a priority
43-21    groundwater management area being considered for district creation
43-22    or for addition to an existing district] is located.  Notice must
43-23    be published not later than the 30th day before the date set for
43-24    the hearing [commission to consider the designation of the priority
43-25    groundwater management area, the creation of a district in a
43-26    priority groundwater management area, or the addition of land in a
 44-1    priority groundwater management area to an existing district].
 44-2          (b)  The notice must include:
 44-3                (1)  if applicable, a statement of the general purpose
 44-4    and effect of designating the proposed priority groundwater
 44-5    management area;
 44-6                (2)  if applicable, a statement of the general purpose
 44-7    and effect of creating a new district in the priority groundwater
 44-8    management area;
 44-9                (3)  if applicable, a statement of the general purpose
44-10    and effect of adding all or part of the land in the priority
44-11    groundwater management area to an existing district;
44-12                (4)  a map generally outlining the boundaries of the
44-13    area being considered for priority groundwater management area
44-14    designation [or the priority groundwater management area being
44-15    considered for district creation or for addition to an existing
44-16    district,] or notice of the location at which a copy of the map may
44-17    be examined or obtained;
44-18                (5)  a statement that the executive director's report
44-19    concerning the priority groundwater management area or proposed
44-20    area is available at the commission's main office in Austin, Texas,
44-21    and at regional offices of the commission for regions which include
44-22    territory within the priority groundwater management area or
44-23    proposed priority groundwater management area and that the report
44-24    is available for inspection during regular business hours;
44-25                (6)  a description or the name of the locations in the
44-26    affected area at which the commission has provided copies of the
 45-1    executive director's report to be made available for public
 45-2    inspection;
 45-3                (7)  the name and address of each public library, each
 45-4    county clerk's office, and each district to which the commission
 45-5    has provided copies of the executive director's report; and
 45-6                (8)  the date, time, and place of the hearing.
 45-7          SECTION 2.34.  Section 35.012, Water Code, is amended to read
 45-8    as follows:
 45-9          Sec. 35.012.  CREATION OF DISTRICT IN PRIORITY GROUNDWATER
45-10    MANAGEMENT AREA [COMMISSIONER ORDER].  (a)  [At the conclusion of
45-11    its hearing and considerations, the commission shall issue an] [order
45-12    stating its findings and conclusions.]
45-13          [(b)  If the commission finds that the land and other
45-14    property in the priority groundwater management area would benefit
45-15    from the creation of one or more districts, that there is a public
45-16    need for one or more districts, and that the creation of one or
45-17    more districts would further the public welfare, the commission
45-18    shall issue an order stating that the creation of one or more
45-19    districts is needed.]
45-20          [(c)]  Following the issuance of a commission order under
45-21    Section 35.008 designating a priority groundwater management area
45-22    and recommending the creation of one or more districts, or the
45-23    addition of land to an existing district [Subsection (b)], the
45-24    landowners in the priority groundwater management area may:
45-25                (1)  create one or more districts under Subchapter B,
45-26    Chapter 36;
 46-1                (2)  have the area annexed to a district that adjoins
 46-2    the area; or
 46-3                (3)  create one or more districts through the
 46-4    legislative process.
 46-5          (b)  Within two years, but no sooner than 120 days, from the
 46-6    date on which the commission issues an order under Section 35.008
 46-7    designating a priority groundwater management area, for those areas
 46-8    that are not within a district, the commission shall:
 46-9                (1)  create one or more new districts under Section
46-10    36.0151;
46-11                (2)  recommend that the areas, or a portion of the
46-12    areas, be added to an existing district under Section 35.013; or
46-13                (3)  take any combination of the actions under
46-14    Subdivisions (1) and (2).
46-15          (c)  Following the issuance of a commission order under
46-16    Section 35.008 [(d)  The commission shall identify the areas
46-17    subject to the order of the commission issued under Subsection (b)
46-18    that have not been incorporated into a district and shall delineate
46-19    proposed boundaries of a district to include those areas.  If the
46-20    commission proposes the creation of one or more districts], the
46-21    Texas Agricultural Extension Service shall begin an educational
46-22    program within such areas with the assistance and cooperation of
46-23    the Texas Water Development Board, the commission, the Department
46-24    of Agriculture, other state agencies, and existing districts to
46-25    inform the residents of the status of the area's water resources
46-26    and management options including possible formation of a district[,
 47-1    before beginning the procedures for creation of a district provided
 47-2    in Subchapter B, Chapter 36].  The county commissioners court of
 47-3    each county in the priority groundwater management area shall form
 47-4    a steering committee to provide assistance to the Texas
 47-5    Agricultural Extension Service in accomplishing the goals of the
 47-6    education program within the area.
 47-7          [(e)  If the commission fails to find that the district would
 47-8    be a benefit to the land and other property within the priority
 47-9    groundwater management area, that there is a public need for the
47-10    district, or that creation of the district will further the public
47-11    welfare, the commission shall issue an order stating that a
47-12    district should not be created within the boundaries of the
47-13    priority groundwater management area.]
47-14          [(f)  An order of the commission issued under this section
47-15    may not be appealed.]
47-16          SECTION 2.35.  Section 35.013, Water Code, is amended to read
47-17    as follows:
47-18          Sec. 35.013.  ADDING PRIORITY GROUNDWATER MANAGEMENT AREA TO
47-19    EXISTING DISTRICT.  (a)  [If land in a priority groundwater
47-20    management area is located adjacent to one or more existing
47-21    districts, the commission, instead of issuing an order under
47-22    Section 35.012, may issue an order recommending that the priority
47-23    groundwater management area be added to the existing district
47-24    designated by the commission.  In its order, the commission must
47-25    find that the land and other property in the priority groundwater
47-26    management area and the land in the existing district will benefit
 48-1    from the addition of the area, that there is a public need to add
 48-2    the priority groundwater management area to the existing district,
 48-3    and that the addition of the land to the existing district would
 48-4    further the public welfare.]
 48-5          [(b)]  If the commission in its order under Section 35.008
 48-6    [executive director] recommends that the priority groundwater
 48-7    management area, or a portion of the priority groundwater
 48-8    management area, be added to an existing district [or if the
 48-9    commission considers it possible to add the priority groundwater
48-10    management area to an adjacent existing district], the commission
48-11    shall give notice to the board of the existing district recommended
48-12    in its order [by the executive director or considered by the
48-13    commission to possibly serve the area] and to any other existing
48-14    districts adjacent to the priority groundwater management area.
48-15          (b) [(c)]  The commission shall submit a copy of the order to
48-16    the board of the district to which it is recommending the priority
48-17    groundwater management area be added.  The board shall vote on the
48-18    addition of the priority groundwater management area to the
48-19    district and shall advise the commission of the outcome.
48-20          (c) [(d)]  If the board votes to accept the addition of the
48-21    priority groundwater management area to the district, the board:
48-22                (1)  may request the Texas Agricultural Extension
48-23    Service, the commission, and the Texas Water Development Board,
48-24    with the cooperation and assistance of the Department of
48-25    Agriculture and other state agencies, to administer an educational
48-26    program to inform the residents of the status of the area's water
 49-1    resources and management options including possible annexation into
 49-2    a district;
 49-3                (2)  shall call an election within the priority
 49-4    groundwater management area, or portion of the priority groundwater
 49-5    management area, as delineated by the commission to determine if
 49-6    the priority groundwater management area will be added to the
 49-7    district; and
 49-8                (3)  shall designate election precincts and polling
 49-9    places for the elections in the order calling an election under
49-10    this subsection.
49-11          (d) [(e)]  The board shall give notice of the election and
49-12    the proposition to be voted on.  The board shall publish notice of
49-13    the election at least one time in one or more newspapers with
49-14    general circulation within the boundaries of the priority
49-15    groundwater management area.  The notice must be published before
49-16    the 30th day preceding the date set for the election.
49-17          (e) [(f)]  The ballots for the election shall be printed to
49-18    provide for voting for or against the proposition:  "The inclusion
49-19    of _________________________ (briefly describe priority groundwater
49-20    management area) in the ______________ District."  If the district
49-21    has outstanding debts or taxes, the proposition shall include the
49-22    following language:  "and assumption by the described area of a
49-23    proportional share of the debts or taxes of the district."
49-24          (f) [(g)]  Immediately after the election, the presiding
49-25    judge of each polling place shall deliver the returns of the
49-26    election to the board, and the board shall canvass the returns for
 50-1    the election within the priority groundwater management area and
 50-2    declare the results.  If a majority of the voters in the priority
 50-3    groundwater management area voting on the proposition vote in favor
 50-4    of the proposition, the board shall declare that the priority
 50-5    groundwater management area is added to the district.  If a
 50-6    majority of the voters in the priority groundwater management area
 50-7    voting on the proposition vote against adding the priority
 50-8    groundwater management area to the district, the board shall
 50-9    declare that the priority groundwater management area is not added
50-10    to the district.  The board shall file a copy of the election
50-11    results with the commission.
50-12          (g) [(h)]  If the voters approve adding the priority
50-13    groundwater management area to the district, the board of the
50-14    district to which the priority groundwater management area is added
50-15    shall provide reasonable representation on that board compatible
50-16    with the district's existing scheme of representation.
50-17          (h) [(i)]  If the proposition is defeated, or if the board of
50-18    the existing district votes not to accept the addition of the area
50-19    to the district, then the commission shall, except as provided
50-20    under Subsection (i), create under Section 36.0151 one or more
50-21    districts covering the priority groundwater management area within
50-22    one year of the date on which the proposition is defeated or the
50-23    board votes not to accept the area.
50-24          (i)  For an area which is not feasible for the creation of
50-25    one or more districts as determined in the commission's findings
50-26    under Section 35.008, the commission shall include in its report
 51-1    under Section 35.018 recommendations for the future management of
 51-2    the priority groundwater management area.
 51-3          (j)  Another [another] election to add the priority
 51-4    groundwater management area to an existing district may not be
 51-5    called before the first anniversary of the date on which the
 51-6    election on the proposition was held.
 51-7          SECTION 2.36.  Subsection (c), Section 35.018, Water Code, is
 51-8    amended to read as follows:
 51-9          (c)  If the commission determines that a district created
51-10    under Chapter 36 is not appropriate for, or capable of, the
51-11    protection of the groundwater resources for a particular management
51-12    area or priority groundwater management area, the commission may
51-13    recommend in its report to the legislature the creation of a
51-14    special district or amendment of an existing district.  [(1)  If
51-15    voters fail to create a groundwater district in a priority
51-16    groundwater management area or if voters fail to add the priority
51-17    groundwater management area to an existing groundwater district,
51-18    the report shall include recommendations for the future management
51-19    of the priority groundwater management area.  The recommendations
51-20    may include but are not limited to the following:]
51-21                      [(A)  creation of a groundwater district by the
51-22    legislature;]
51-23                      [(B)  annexation of a priority groundwater
51-24    management area into an existing district by the legislature; or]
51-25                      [(C)  management of the priority groundwater
51-26    management area by the nearest regional office of the commission.
 52-1    The commission may be authorized to:]
 52-2                            [(i)  adopt spacing and annual per acre
 52-3    pumping restrictions;]
 52-4                            [(ii)  issue well permits in accordance
 52-5    with Sections 36.113 and 36.1131;]
 52-6                            [(iii)  prevent waste and protect the
 52-7    quality of groundwater in accordance with Sections
 52-8    36.001(8)(A)-(G);]
 52-9                            [(iv)  levy administrative penalties for
52-10    violations; and]
52-11                            [(v)  collect fees in accordance with
52-12    Sections 36.206(a) and (b).]
52-13                [(2)  If the commission is required by the legislature
52-14    to manage the priority groundwater management area, a new election
52-15    may not be called for three years from the date of the last
52-16    election.]
52-17          SECTION 2.37.  Section 36.001, Water Code, is amended by
52-18    amending Subdivision (13) and adding Subdivisions (18) through (22)
52-19    to read as follows:
52-20                (13)  "Management area" means an area designated and
52-21    delineated by the Texas Water Development Board [commission] under
52-22    Chapter 35 as an area suitable for management of groundwater
52-23    resources.
52-24                (18)  "River basin" means a river or coastal basin as
52-25    designated as a river basin by the board under Section 16.051.  The
52-26    term does not include waters of the bays or arms originating in the
 53-1    Gulf of Mexico.
 53-2                (19)  "Agriculture" means any of the following
 53-3    activities:
 53-4                      (A)  cultivating the soil to produce crops for
 53-5    human food, animal feed, or planting seed or for the production of
 53-6    fibers;
 53-7                      (B)  the practice of floriculture, viticulture,
 53-8    silviculture, and horticulture, including the cultivation of plants
 53-9    in containers or nonsoil media, by a nursery grower;
53-10                      (C)  raising, feeding, or keeping animals for the
53-11    production of food or fiber, leather, pelts, or other tangible
53-12    products having a commercial value;
53-13                      (D)  wildlife management; and
53-14                      (E)  planting cover crops, including cover crops
53-15    cultivated for transplantation, or leaving land idle for the
53-16    purpose of participating in any governmental program or normal crop
53-17    or livestock rotation procedure.
53-18                (20)  "Agricultural use" means any use or activity
53-19    involving agriculture, including irrigation.
53-20                (21)  "Conjunctive use" means the combined use of
53-21    groundwater and surface water sources that optimizes the beneficial
53-22    characteristics of each source.
53-23                (22)  "Nursery grower" means a person who grows more
53-24    than 50 percent of the products that the person either sells or
53-25    leases, regardless of the variety sold, leased, or grown.  For the
53-26    purpose of this definition, "grow" means the actual cultivation or
 54-1    propagation of the product beyond the mere holding or maintaining
 54-2    of the item prior to sale or lease and typically includes
 54-3    activities associated with the production or multiplying of stock
 54-4    such as the development of new plants from cuttings, grafts, plugs,
 54-5    or seedlings.
 54-6          SECTION 2.38.  Section 36.002, Water Code, is amended to read
 54-7    as follows:
 54-8          Sec. 36.002.  OWNERSHIP OF GROUNDWATER.  The ownership and
 54-9    rights of the owners of the land and their lessees and assigns in
54-10    groundwater are hereby recognized, and nothing in this code shall
54-11    be construed as depriving or divesting the owners or their lessees
54-12    and assigns of the ownership or rights, except as such rights may
54-13    be limited or altered by [subject to] rules promulgated by a
54-14    district.
54-15          SECTION 2.39.  Subsection (b), Section 36.011, Water Code, is
54-16    amended to read as follows:
54-17          (b)  The commission has exclusive jurisdiction over the
54-18    [delineation of management areas and the] creation of districts.
54-19          SECTION 2.40.  Section 36.012, Water Code, is amended by
54-20    adding Subsection (f) to read as follows:
54-21          (f)  This section does not apply to districts created under
54-22    Section 36.0151.
54-23          SECTION 2.41.  Section 36.013, Water Code, is amended to read
54-24    as follows:
54-25          Sec. 36.013.  PETITION TO CREATE DISTRICT.  (a)  A petition
54-26    requesting creation of a district must be filed with the commission
 55-1    [executive director] for review and certification under Section
 55-2    36.015 [submission to the commission].
 55-3          (b)  The petition filed pursuant to this section must be
 55-4    signed by:
 55-5                (1)  a majority of the landowners within the proposed
 55-6    district, as indicated by the county tax rolls; or
 55-7                (2)  if there are more than 50 landowners in the
 55-8    proposed district, at least 50 of those landowners.
 55-9          (c)  The petition must include:
55-10                (1)  the name of the proposed district;
55-11                (2)  the area and boundaries of the proposed district,
55-12    including a map generally outlining the boundaries of the proposed
55-13    district;
55-14                (3)  the purpose or purposes of the district;
55-15                (4)  a statement of the general nature of any projects
55-16    proposed to be undertaken by the district, the necessity and
55-17    feasibility of the work, and the estimated costs of those projects
55-18    according to the persons filing the projects if the projects are to
55-19    be funded by the sale of bonds or notes; [and]
55-20                (5)  the names of at least five individuals qualified
55-21    to serve as temporary directors; and
55-22                (6)  financial information, including the projected
55-23    maintenance tax or production fee rate and a proposed budget of
55-24    revenues and expenses for the district [any additional terms or
55-25    conditions that restrict the powers of the district from those
55-26    provided in this chapter].
 56-1          [(d)  If a part of the proposed district is not included
 56-2    within either a management area or a priority groundwater
 56-3    management area, the petition to create a district may also contain
 56-4    a request to create a management area.  A request to create a
 56-5    management area must comply with the requirements for a petition in
 56-6    Section 35.005, and may be acted on by the commission separately
 56-7    from the petition to create the district.]
 56-8          SECTION 2.42.  Section 36.014, Water Code, is amended to read
 56-9    as follows:
56-10          Sec. 36.014.  NOTICE AND PUBLIC MEETING [HEARING] ON DISTRICT
56-11    CREATION.  (a)  If a petition is filed under Section 36.013, the
56-12    commission shall give notice of an application as required by
56-13    Section 49.011(a) and shall [may] conduct a public meeting in a
56-14    central location within the area of the proposed district [hearing]
56-15    on the application not later than the 60th day after the date the
56-16    commission issues notice [if the commission determines that a
56-17    hearing is necessary] under Section 49.011(a).
56-18          (b)  At the public meeting, the commission shall receive
56-19    comments from interested persons [If the petition contains a
56-20    request to create a management area in all or part of the proposed
56-21    district, the notice must also be given in accordance with the
56-22    requirements in Section 35.006 for the designation of management
56-23    areas].
56-24          SECTION 2.43.  Section 36.015, Water Code, is amended to read
56-25    as follows: 
56-26          Sec. 36.015.  COMMISSION CERTIFICATION AND ORDER.  (a)  Not
 57-1    later than the 90th day after the date the commission holds a
 57-2    public meeting on a petition under Section 36.014, the commission
 57-3    shall certify the petition if the petition is administratively
 57-4    complete.  A petition is administratively complete if it complies
 57-5    with the requirements of Sections 36.013(b) and (c).
 57-6          (b)  The commission may not certify a petition if the
 57-7    commission finds that the proposed district cannot be adequately
 57-8    funded to carry out its purposes based on the financial information
 57-9    provided in the petition under Section 36.013(c)(6) or that the
57-10    boundaries of the proposed district do not provide for the proper
57-11    regulation of the groundwater resources.  The commission shall give
57-12    preference to boundary lines that are coterminous with those of a
57-13    groundwater management area but may also consider boundaries along
57-14    existing political subdivision boundaries if such boundaries would
57-15    facilitate district creation and confirmation.
57-16          (c)  If a petition proposes the creation of a district in an
57-17    area, in whole or in part, that has not been designated as a
57-18    management area, the commission shall provide notice to the Texas
57-19    Water Development Board.  On the receipt of notice from the
57-20    commission, the Texas Water Development Board shall initiate the
57-21    process of designating a management area for the area of the
57-22    proposed district not included in a management area.  The
57-23    commission may not certify the petition until the Texas Water
57-24    Development Board has adopted a rule whereby the boundaries of the
57-25    proposed district are coterminous with or inside the boundaries of
57-26    a management area.
 58-1          (d)  If the commission does not certify the petition, the
 58-2    commission shall provide to the petitioners, in writing, the
 58-3    reasons for not certifying the petition.  The petitioners may
 58-4    resubmit the petition, without paying an additional fee, if the
 58-5    petition is resubmitted within 90 days after the date the
 58-6    commission sends the notice required by this subsection.
 58-7          (e)  If the commission certifies the petition as
 58-8    administratively complete, the commission shall issue an order,
 58-9    notify the petitioners, and appoint temporary directors as provided
58-10    by Section 36.016.
58-11          (f)  Refusal by the commission to certify a petition to
58-12    create a district does not invalidate or affect the designation of
58-13    any management area.  [FINDINGS.  (a)  If the commission finds that
58-14    a district is feasible and practicable, that it would be a benefit
58-15    to the land in the district, and that it would be a public benefit
58-16    or utility, the commission shall issue an order containing these
58-17    findings granting the petition.]
58-18          [(b)  If the commission finds that a district is not feasible
58-19    and practicable, that it would not be a benefit to the land in the
58-20    district, that it would not be a public benefit or utility, or that
58-21    it is not needed, the commission by order shall deny the petition.]
58-22          [(c)  The commission may adjust the boundaries of the
58-23    proposed district to exclude any land that would not be benefited
58-24    by inclusion in the district and is not necessary to the district
58-25    for proper regulation of the groundwater reservoir.]
58-26          [(d)  If the commission grants the petition to create the
 59-1    district, it shall direct in its order creating the district that
 59-2    an election be called by the temporary directors to confirm the
 59-3    creation of the district and to elect permanent directors.]
 59-4          [(e)  The refusal to grant a petition to create a district
 59-5    does not invalidate or affect the designation of any management
 59-6    area requested in the same petition.]
 59-7          [(f)  The commission shall act on the petition within a
 59-8    reasonable amount of time.]
 59-9          SECTION 2.44.  Subsection (a), Section 36.0151, Water Code,
59-10    is amended to read as follows:
59-11          (a)  If the commission is required to create [proposes that]
59-12    a district [be created] under Section 35.012(b) [35.012(d)], it
59-13    shall, without an evidentiary hearing, issue an order creating the
59-14    district and shall provide in its order [creating the district
59-15    provide] that temporary directors be appointed under Section 36.016
59-16    and that an election be called by the temporary directors to
59-17    authorize the district to assess taxes [confirm the creation of the
59-18    district] and to elect permanent directors.
59-19          SECTION 2.45.  Subsection (a), Section 36.016, Water Code, is
59-20    amended to read as follows:
59-21          (a)  If the commission certifies [grants] a petition to
59-22    create a district under Section 36.015, the commission shall
59-23    appoint the temporary directors named in the petition.  If [or
59-24    after] the commission dissolves a district's board under Section
59-25    36.303, it shall appoint five temporary directors.
59-26          SECTION 2.46.  Section 36.017, Water Code, is amended by
 60-1    amending the section heading and Subsections (a) and (d) and adding
 60-2    Subsection (i) to read as follows:
 60-3          Sec. 36.017.  CONFIRMATION AND DIRECTORS' ELECTION FOR
 60-4    DISTRICT IN A MANAGEMENT AREA.  (a)  For a district created under
 60-5    Section 36.015, not [Not] later than the 120th [60th] day after the
 60-6    date all temporary directors have been appointed and have
 60-7    qualified, the temporary directors shall meet and order an election
 60-8    to be held within the boundaries of the proposed district to
 60-9    approve the creation of the district and to elect permanent
60-10    directors.
60-11          (d)  The ballot for the election must be printed to provide
60-12    for voting for or against the proposition:  "The creation of the
60-13    _________________ Groundwater Conservation District."  If the
60-14    district levies a maintenance tax for payment of its expenses, then
60-15    an additional [the] proposition shall be included with [include]
60-16    the following language:  "The [and the] levy of a maintenance tax
60-17    at a rate not to exceed ______ cents for each $100 of assessed
60-18    valuation."
60-19          (i)  If a majority of the votes cast at the election are
60-20    against the levy of a maintenance tax, the district shall set
60-21    production fees to pay for the district's regulation of groundwater
60-22    in the district, including fees based on the amount of water to be
60-23    withdrawn from a well.
60-24          SECTION 2.47.  Subchapter B, Chapter 36, Water Code, is
60-25    amended by adding Section 36.0171 to read as follows:
60-26          Sec. 36.0171.  TAX AUTHORITY AND DIRECTORS' ELECTION FOR
 61-1    DISTRICT IN A PRIORITY GROUNDWATER MANAGEMENT AREA.  (a)  For a
 61-2    district created under Section 36.0151, not later than the 120th
 61-3    day after the date all temporary directors have been appointed and
 61-4    have qualified, the temporary directors shall meet and order an
 61-5    election to be held within the boundaries of the proposed district
 61-6    to authorize the district to assess taxes and to elect permanent
 61-7    directors.
 61-8          (b)  In the order calling the election, the temporary
 61-9    directors shall designate election precincts and polling places for
61-10    the election.  In designating the polling places, the temporary
61-11    directors shall consider the needs of all voters for conveniently
61-12    located polling places.
61-13          (c)  The temporary directors shall publish notice of the
61-14    election at least once in at least one newspaper with general
61-15    circulation within the boundaries of the proposed district.  The
61-16    notice must be published before the 30th day preceding the date of
61-17    the election.
61-18          (d)  The ballot for the election must be printed to provide
61-19    for voting for or against the proposition:  "The levy of a
61-20    maintenance tax by the ___________________ Groundwater Conservation
61-21    District at a rate not to exceed ______ cents for each $100 of
61-22    assessed valuation."
61-23          (e)  Immediately after the election, the presiding judge of
61-24    each polling place shall deliver the returns of the election to the
61-25    temporary board, and the board shall canvass the returns and
61-26    declare the result.  The board shall file a copy of the election
 62-1    result with the commission.
 62-2          (f)  If a majority of the votes cast at the election favor
 62-3    the levy of a maintenance tax, the temporary board shall declare
 62-4    the levy approved and shall enter the result in its minutes.
 62-5          (g)  If a majority of the votes cast at the election are
 62-6    against the levy of a maintenance tax, the temporary board shall
 62-7    declare the levy defeated and shall enter the result in its
 62-8    minutes.
 62-9          (h)  If the majority of the votes cast at the election are
62-10    against the levy of a maintenance tax, the district shall set
62-11    permit fees to pay for the district's regulation of groundwater in
62-12    the district, including fees based on the amount of water to be
62-13    withdrawn from a well.
62-14          SECTION 2.48.  Section 36.019, Water Code, is amended to read
62-15    as follows:
62-16          Sec. 36.019.  CONFIRMATION ELECTION IN DISTRICT INCLUDING
62-17    LAND IN MORE THAN ONE COUNTY.  (a)  A district, the major portion
62-18    of which is located in one county, may not be organized to include
62-19    land in another county unless the election held in the other county
62-20    to confirm and ratify the creation of the district is approved by a
62-21    majority of the voters of the other county voting in an election
62-22    called for that purpose.
62-23          (b)  This section does not apply to districts created under
62-24    Section 36.0151.
62-25          SECTION 2.49.  Subsection (g), Section 36.066, Water Code, is
62-26    amended to read as follows:
 63-1          (g)  If the district prevails in any suit other than a suit
 63-2    in which it voluntarily intervenes, the district may seek and the
 63-3    court shall grant [it may], in the same action, recovery [recover
 63-4    reasonable fees] for attorney's fees [attorneys], costs for expert
 63-5    witnesses, and other costs incurred by the district before the
 63-6    court.  The amount of the attorney's fees shall be fixed by the
 63-7    court.
 63-8          SECTION 2.50.  Subsection (a), Section 36.101, Water Code, is
 63-9    amended to read as follows:
63-10          (a)  A district may make and enforce rules, including rules
63-11    limiting groundwater production based on tract size or the spacing
63-12    of wells, to provide for conserving, preserving, protecting, and
63-13    recharging of the groundwater or of a groundwater reservoir or its
63-14    subdivisions in order to control subsidence, prevent degradation of
63-15    water quality, or prevent waste of groundwater and to carry out the
63-16    powers and duties provided by this chapter.  During the rulemaking
63-17    process the board shall consider all groundwater uses and needs and
63-18    shall develop rules which are fair, impartial, and
63-19    nondiscriminatory.
63-20          SECTION 2.51.  Subsections (b) and (d), Section 36.102, Water
63-21    Code, are amended to read as follows:
63-22          (b)  The board by rule may set reasonable civil penalties for
63-23    breach of any rule of the district [that shall] not to exceed
63-24    $10,000 per day per violation, and each day of a continuing
63-25    violation constitutes a separate violation [the jurisdiction of a
63-26    justice court as provided by Section 27.031, Government Code].
 64-1          (d)  If the district prevails in any suit to enforce its
 64-2    rules, the district may seek and the court shall grant [it may], in
 64-3    the same action, recovery [recover reasonable fees] for attorney's
 64-4    fees [attorneys], costs for expert witnesses, and other costs
 64-5    incurred by the district before the court.  The amount of the
 64-6    attorney's fees shall be fixed by the court.
 64-7          SECTION 2.52.  Section 36.1071, Water Code, is amended by
 64-8    amending Subsections (a), (b), and (e) and adding Subsection (h) to
 64-9    read as follows:
64-10          (a)  Following notice and hearing, the district shall, in
64-11    coordination with surface water management entities on a regional
64-12    basis, develop a comprehensive management plan which addresses the
64-13    following management goals, as applicable:
64-14                (1)  providing the most efficient use of groundwater;
64-15                (2)  controlling and preventing waste of groundwater;
64-16                (3)  controlling and preventing subsidence;
64-17                (4)  addressing conjunctive surface water management
64-18    issues; [and]
64-19                (5)  addressing natural resource issues;
64-20                (6)  addressing drought conditions; and
64-21                (7)  addressing conservation.
64-22          (b)  After January 5, 2002, a [A] district management plan,
64-23    or any amendments to a district management plan, shall be developed
64-24    by the district using the district's best available data and
64-25    forwarded to the regional water planning group for consideration in
64-26    their planning process [adopted after the Texas Water Development
 65-1    Board approval of a regional water plan for the region in which the
 65-2    district is located shall be consistent with the regional water
 65-3    plan].
 65-4          (e)  In the management plan described under Subsection (a),
 65-5    the district shall:
 65-6                (1)  identify the performance standards and management
 65-7    objectives under which the district will operate to achieve the
 65-8    management goals identified under Subsection (a);
 65-9                (2)  establish a groundwater management standard
65-10    describing the desired condition of the groundwater source as
65-11    indicated by indices of quantity of water in the source, quality of
65-12    water produced from the source, springflows, or subsidence of the
65-13    land surface, and the groundwater management standard shall
65-14    describe this condition for various time periods;
65-15                (3)  specify, in as much detail as possible, the
65-16    actions, procedures, performance, and avoidance that are or may be
65-17    necessary to effect the plan, including specifications and proposed
65-18    rules;
65-19                (4) [(3)]  include estimates of the following:
65-20                      (A)  the existing total usable amount of
65-21    groundwater in the district;
65-22                      (B)  the amount of groundwater being used within
65-23    the district on an annual basis;
65-24                      (C)  the annual amount of recharge, if any, to
65-25    the groundwater resources within the district and how natural or
65-26    artificial recharge may be increased; [and]
 66-1                      (D)  the projected surface water supply and
 66-2    demand for water within the district; and
 66-3                      (E)  the groundwater withdrawal rates based on
 66-4    groundwater management standards adopted under Subdivision (2)
 66-5    using groundwater availability modeling information as provided by
 66-6    the executive administrator in conjunction with any available
 66-7    site-specific information provided by the district and acceptable
 66-8    to the executive administrator; and
 66-9                (5) [(4)]  address water supply needs in a manner that
66-10    is not in conflict with the appropriate approved regional water
66-11    plan if a regional water plan has been approved under Section
66-12    16.053.
66-13          (h)  In developing its management plan and groundwater
66-14    management standards, the district shall use the groundwater
66-15    availability modeling information provided by the executive
66-16    administrator in conjunction with any available site-specific
66-17    information provided by the district and acceptable to the
66-18    executive administrator.
66-19          SECTION 2.53.  Section 36.1072, Water Code, is amended by
66-20    adding Subsection (g) to read as follows:
66-21          (g)  In this subsection, "board" means the Texas Water
66-22    Development Board.  A person with a legally defined interest in
66-23    groundwater in a district or the regional water planning group may
66-24    file a petition with the board stating that a conflict requiring
66-25    resolution may exist between the district's certified groundwater
66-26    conservation district management plan developed under Section
 67-1    36.1071 and the state water plan.  If a conflict exists, the board
 67-2    shall facilitate coordination between the involved person or
 67-3    regional water planning group and the district to resolve the
 67-4    conflict.  If conflict remains, the board shall resolve the
 67-5    conflict.  The board action under this provision may be
 67-6    consolidated, at the option of the board, with related action under
 67-7    Section 16.053(p).  If the board determines that resolution of the
 67-8    conflict requires a revision of the certified groundwater
 67-9    conservation district management plan, the board shall suspend the
67-10    certification of the plan and provide information to the district.
67-11    The district shall prepare any revisions to the plan specified by
67-12    the board and shall hold, after notice, at least one public hearing
67-13    at some central location within the district.  The district shall
67-14    consider all public and board comments; prepare, revise, and adopt
67-15    its plan; and submit the revised plan to the board for
67-16    certification.  On the request of the district or the regional
67-17    water planning group, the board shall include discussion of the
67-18    conflict and its resolution in the state water plan that the board
67-19    provides to the governor, the lieutenant governor, and the speaker
67-20    of the house of representatives under Section 16.051(e).
67-21          SECTION 2.54.  Section 36.108, Water Code, is amended to read
67-22    as follows:
67-23          Sec. 36.108.  JOINT PLANNING IN MANAGEMENT AREA.  (a)  If two
67-24    or more districts are located within the boundaries of the same
67-25    management area, each district shall prepare a comprehensive
67-26    management plan as required by Section 36.1071 covering that
 68-1    district's respective territory.  On completion and certification
 68-2    of the plan as required by Section 36.1072, each district shall
 68-3    forward a copy of the new or revised management plan to the other
 68-4    districts in the management area.  The boards of the districts
 68-5    shall consider the plans individually and shall compare them to
 68-6    other management plans then in force in the management area.
 68-7          (b)  The board of directors of each district in the
 68-8    management area may, by resolution, call for [a] joint planning
 68-9    [meeting] with [the boards of directors of] the other districts in
68-10    the management area to review the management plans and
68-11    accomplishments for the management area.  [The boards shall meet to
68-12    consider the plans individually and shall compare them to other
68-13    management plans then in force in the management area.]  In
68-14    reviewing the management plans, the boards shall consider:
68-15                (1)  the goals of each management plan and its impact
68-16    on planning throughout the management area;
68-17                (2)  the groundwater management standards of each
68-18    district describing the desired condition of the groundwater source
68-19    over time as indicated by indices of quantity of water in the
68-20    source, quality of water produced from the source, springflows, or
68-21    subsidence of the land surface;
68-22                (3)  the groundwater withdrawal rates adopted by each
68-23    district and its effectiveness in achieving the groundwater
68-24    management standard of the district;
68-25                (4)  the effectiveness of the measures established by
68-26    each management plan for conserving and protecting groundwater and
 69-1    preventing waste, and the effectiveness of these measures in the
 69-2    management area generally; and
 69-3                (5) [(3)]  any other matters that the boards consider
 69-4    relevant to the protection and conservation of groundwater and the
 69-5    prevention of waste in the management area.
 69-6          (c)  Each district participating in the joint planning
 69-7    process initiated under Subsection (b) shall ensure that the
 69-8    groundwater management standards adopted by the district are
 69-9    adequate to protect the groundwater in the management area and are
69-10    not incompatible with the groundwater management standards adopted
69-11    by the other districts in the management area.
69-12          (d)  If a [A] joint meeting of the boards of directors is
69-13    called, the meeting must be held in accordance with [the Open
69-14    Meetings Act,] Chapter 551, Government Code.  Notice of the meeting
69-15    shall be given in accordance with the requirements for notice of
69-16    district board of directors meetings under that Act.  In addition,
69-17    notice of the meeting shall be published not later than the 30th
69-18    day before the date of the scheduled meeting in a newspaper with
69-19    general circulation in each county in the management area.
69-20          (e) [(d)]  A district in the management area may file with
69-21    good cause a petition with the commission requesting an inquiry if
69-22    the petitioner district adopted a resolution calling for joint
69-23    planning, and the other district or districts either refused to
69-24    join in the planning process or failed to adopt an adequate
69-25    management standard or the process failed to result in adequate
69-26    planning, and the petition provides evidence [believes] that:
 70-1                (1)  another district in the management area has failed
 70-2    to adopt rules;
 70-3                (2)  the groundwater in the management area is not
 70-4    adequately protected by the rules adopted by another district; [or]
 70-5                (3)  the groundwater in the management area is not
 70-6    adequately protected due to the failure of another district to
 70-7    enforce substantial compliance with its rules; or
 70-8                (4)  another district in the management area has failed
 70-9    to adopt groundwater management standards that are adequate to
70-10    protect the groundwater in the management area.
70-11          (f) [(e)]  Not later than the 90th day after the date the
70-12    petition is filed, the commission shall review the petition and
70-13    either:
70-14                (1)  dismiss it if it finds that the evidence is not
70-15    adequate to show that any of the conditions alleged in the petition
70-16    exist; or
70-17                (2)  select a review panel as provided in Subsection
70-18    (g) [(f)].
70-19          (g) [(f)]  If the petition is not dismissed under Subsection
70-20    (f), the [The] commission shall [may] appoint a review panel
70-21    consisting of a chairman and four other members.  A director or
70-22    general manager of a district located outside the management area
70-23    that is the subject of the petition may be appointed to the review
70-24    panel.  The commission may not appoint more than two members of the
70-25    review panel from any one district.  The commission also shall
70-26    appoint a disinterested person to serve as a nonvoting recording
 71-1    secretary for the review panel.  The recording secretary may be an
 71-2    employee of the commission.  The recording secretary shall record
 71-3    and document the proceedings of the panel.
 71-4          (h) [(g)]  Not later than the 120th day after appointment,
 71-5    the review panel shall review the petition and any evidence
 71-6    relevant to the petition and, in a public meeting, consider and
 71-7    adopt [prepare] a report to be submitted to the commission.  The
 71-8    commission may direct the review panel to conduct public hearings
 71-9    at a location in the management area to take evidence on the
71-10    petition.  The review panel may attempt to negotiate a settlement
71-11    or resolve the dispute by any lawful means.
71-12          (i) [(h)]  In its report, the review panel shall include:
71-13                (1)  a summary of all evidence taken in any hearing on
71-14    the petition;
71-15                (2)  a list of findings and recommended actions
71-16    appropriate for the commission to take and the reasons it finds
71-17    those actions appropriate; and
71-18                (3)  any other information the panel considers
71-19    appropriate.
71-20          (j)  The review panel shall submit its report to the
71-21    commission.
71-22          (k)  Districts located within the same management areas or in
71-23    adjacent management areas may contract to jointly conduct studies
71-24    or research, or to construct projects, under terms and conditions
71-25    that the districts consider beneficial.  Such joint efforts may
71-26    include studies of groundwater availability and quality, aquifer
 72-1    modeling, and the interaction of groundwater and surface water;
 72-2    educational programs; the purchase and sharing of equipment; and
 72-3    the implementation of projects to make groundwater available,
 72-4    including aquifer recharge, brush control, weather modification,
 72-5    desalination, regionalization, and treatment or conveyance
 72-6    facilities.  The districts may contract under their existing
 72-7    authorizations including those of Chapter 791, Government Code,
 72-8    provided, however, that their contracting authority is not limited
 72-9    by Sections 791.011(c)(2) and 791.011(d)(3) and Section 791.014,
72-10    Government Code.
72-11          SECTION 2.55.  Section 36.113, Water Code, is amended by
72-12    amending Subsection (d), adding a new Subsection (e), and
72-13    relettering existing Subsections (e) and (f) as Subsections (f) and
72-14    (g) to read as follows:
72-15          (d)  Before granting or denying a permit, the district shall
72-16    consider whether:
72-17                (1)  the application conforms to the requirements
72-18    prescribed by this chapter and is accompanied by the prescribed
72-19    fees;
72-20                (2)  the proposed use of water unreasonably affects
72-21    existing groundwater and surface water resources or existing permit
72-22    holders;
72-23                (3)  the proposed use of water is dedicated to any
72-24    beneficial use;
72-25                (4)  the proposed use of water is consistent with the
72-26    district's certified water management plan;
 73-1                (5)  the applicant has agreed to avoid waste and
 73-2    achieve water conservation; and
 73-3                (6)  the applicant has agreed that reasonable diligence
 73-4    will be used to protect groundwater quality and that the applicant
 73-5    will follow well plugging guidelines at the time of well closure.
 73-6          (e)  The district may impose more restrictive permit
 73-7    conditions on new permit applications and increased use by historic
 73-8    users, provided that:
 73-9                (1)  such limitations apply to all subsequent new
73-10    permit applications and increased use by historic users, regardless
73-11    of type or location of use;
73-12                (2)  such limitations bear a reasonable relationship to
73-13    the existing district management plan; and
73-14                (3)  such limitations are reasonably necessary to
73-15    protect existing use.
73-16          (f)  Permits may be issued subject to the rules promulgated
73-17    by the district and subject to terms and provisions with reference
73-18    to the drilling, equipping, completion, or alteration of wells or
73-19    pumps that may be necessary to prevent waste and achieve water
73-20    conservation, minimize as far as practicable the drawdown of the
73-21    water table or the reduction of artesian pressure, lessen
73-22    interference between wells, or control and prevent subsidence.
73-23          (g) [(f)]  A district may require that changes in the
73-24    withdrawal and use of groundwater under a permit not be made
73-25    without the prior approval of a permit amendment issued by the
73-26    district.
 74-1          SECTION 2.56.  Section 36.116, Water Code, is amended to read
 74-2    as follows:
 74-3          Sec. 36.116.  REGULATION OF SPACING AND PRODUCTION.  In order
 74-4    to minimize as far as practicable the drawdown of the water table
 74-5    or the reduction of artesian pressure, to control subsidence, to
 74-6    prevent interference between wells, to prevent degradation of water
 74-7    quality, or to prevent waste, a district by rule may regulate:
 74-8                (1)  [provide for] the spacing of water wells by:
 74-9                      (A)  requiring all water wells to be spaced a
74-10    certain distance from property lines or adjoining wells;
74-11                      (B)  requiring wells with a certain production
74-12    capacity, pump size, or other characteristic related to the
74-13    construction or operation of a well to be spaced a certain distance
74-14    from property lines or adjoining wells; or
74-15                      (C)  imposing spacing requirements adopted by the
74-16    board; and
74-17                (2)  the production of groundwater by:
74-18                      (A)  setting production limits which are
74-19    nondiscriminatory;
74-20                      (B)  limiting the amount of water produced based
74-21    on acreage or tract size;
74-22                      (C)  limiting the amount of water that may be
74-23    produced from a defined number of acres assigned to an authorized
74-24    well site; or
74-25                      (D)  limiting the maximum amount of water that
74-26    may be produced on the basis of acre-feet per acre [and may
 75-1    regulate the production of wells].
 75-2          SECTION 2.57.  Section 36.117, Water Code, is amended to read
 75-3    as follows:
 75-4          Sec. 36.117.  EXEMPTIONS; EXCEPTION; LIMITATIONS.  (a)  A
 75-5    district may exempt wells from the requirement of obtaining
 75-6    [requirements to obtain] a drilling permit, an operating permit, or
 75-7    any other permit required by this chapter or the district's rules.
 75-8          (b)  A district may not require any [a] permit issued by the
 75-9    district [for]:
75-10                (1)  for [drilling or producing from] a well used
75-11    solely for domestic use or for providing water for livestock or
75-12    poultry on a tract of land larger than 10 acres that is either
75-13    drilled, completed, or equipped so that it is incapable of
75-14    producing more than 25,000 gallons of groundwater a day;
75-15                (2)  for the drilling of a water well used solely to
75-16    supply water for a rig that is actively engaged in drilling or
75-17    exploration operations for an oil or gas well permitted by the
75-18    Railroad Commission of Texas provided that the person holding the
75-19    permit is responsible for drilling and operating the water well and
75-20    the well is located on the same lease or field associated with the
75-21    drilling rig; or [alteration of the size of a well or to restrict
75-22    the production of a well if the water produced or to be produced
75-23    from the well is used or to be used to supply the domestic needs of
75-24    10 or fewer households and a person who is a member of each
75-25    household is either the owner of the well, a person related to the
75-26    owner or a member of the owner's household within the second degree
 76-1    by consanguinity, or an employee of the owner;]
 76-2                (3)  for the drilling of a water well authorized under
 76-3    a permit issued by the Railroad Commission of Texas under Chapter
 76-4    134, Natural Resources Code, or for production from any such well
 76-5    to the extent the withdrawals are required for mining activities
 76-6    regardless of any subsequent use of the water.  [or alteration of
 76-7    the size of a well or to restrict the production from the well if
 76-8    the water produced or to be produced from the well is used or to be
 76-9    used to provide water for feeding livestock and poultry connected
76-10    with farming, ranching, or dairy enterprises; or]
76-11                [(4)  water wells to supply water for hydrocarbon
76-12    production activities, regardless of whether those wells are
76-13    producing, that are associated with any well permitted by the
76-14    Railroad Commission of Texas drilled before September 1, 1985.]
76-15          [(b)  The board shall adopt rules determining the
76-16    applicability of Subsection (a)(3) to facilities used primarily for
76-17    feeding livestock.]
76-18          (c) [The district shall not deny the owner of a tract of
76-19    land, or his lessee, who has no well equipped to produce more than
76-20    25,000 gallons a day on the tract, either a permit to drill a well
76-21    on his land or the privilege to produce groundwater from his land,
76-22    subject to the rules of the district.]
76-23          [(d)] A district may not restrict the production of any well
76-24    that is exempt from permitting under Subsection (b)(1) [equipped to
76-25    produce 25,000 gallons or less a day].
76-26          (d)  Notwithstanding Subsection (b), a district may require a
 77-1    well to be permitted by the district and to comply with all
 77-2    district rules if:
 77-3                (1)  the purpose of a well exempted under Subsection
 77-4    (b)(2) is no longer solely to supply water for a rig that is
 77-5    actively engaged in drilling or exploration operations for an oil
 77-6    or gas well permitted by the Railroad Commission of Texas; or
 77-7                (2)  the withdrawals from a well exempted under
 77-8    Subsection (b)(3) are no longer necessary for mining activities or
 77-9    are greater than the amount necessary for mining activities
77-10    specified in the permit issued by the Railroad Commission of Texas
77-11    under Chapter 134, Natural Resources Code.
77-12          (e)  An entity holding a permit issued by the Railroad
77-13    Commission of Texas under Chapter 134, Natural Resources Code, that
77-14    authorizes the drilling of a water well shall report monthly to the
77-15    district:
77-16                (1)  the total amount of water withdrawn during the
77-17    month;
77-18                (2)  the quantity of water necessary for mining
77-19    activities; and
77-20                (3)  the quantity of water withdrawn for other
77-21    purposes.  [Nothing in this chapter applies to wells drilled for
77-22    oil, gas, sulphur, uranium, or brine, or for core tests, or for
77-23    injection of gas, saltwater, or other fluid, or for any other
77-24    purpose, under permits issued by the Railroad Commission of Texas.
77-25    A district may not require a drilling permit for a well to supply
77-26    water for drilling any wells permitted by the Railroad Commission
 78-1    of Texas.  Any well that ceases to be used for these purposes and
 78-2    is then used as an ordinary water well is subject to the rules of
 78-3    the district.  Water wells drilled after September 1, 1997, to
 78-4    supply water for hydrocarbon production activities must meet the
 78-5    spacing requirements of the district unless no space is available
 78-6    within 300 feet of the production well or the central injection
 78-7    station.]
 78-8          (f)  Notwithstanding Subsection (d), a district may not
 78-9    require a well exempted under Subsection (b)(3) to comply with the
78-10    spacing requirements of the district. [Water wells exempted under
78-11    this section shall be equipped and maintained so as to conform to
78-12    the district's rules requiring installation of casing, pipe, and
78-13    fittings to prevent the escape of groundwater from a groundwater
78-14    reservoir to any reservoir not containing groundwater and to
78-15    prevent the pollution or harmful alteration of the character of the
78-16    water in any groundwater reservoir.]
78-17          (g)  A district shall not deny an application for a permit to
78-18    drill and produce water for hydrocarbon production activities if
78-19    the application meets the spacing, density, and production rules
78-20    applicable to all permitted water wells in the district.
78-21          (h)  A [require] water well [wells] exempted under Subsection
78-22    (a) or (b) shall:
78-23                (1)  [this section to] be registered in accordance with
78-24    rules promulgated by the district; and
78-25                (2)  [before drilling.  All exempt water wells shall]
78-26    be equipped and maintained so as to conform to the district's rules
 79-1    requiring installation of casing, pipe, and fittings to prevent the
 79-2    escape of groundwater from a groundwater reservoir to any reservoir
 79-3    not containing groundwater and to prevent the pollution or harmful
 79-4    alteration of the character of the water in any groundwater
 79-5    reservoir.
 79-6          (i)  The driller of a well exempted under Subsection (a) or
 79-7    (b) shall file the drilling log with the district.
 79-8          (j) [(h)]  A well to supply water for a subdivision of land
 79-9    for which a plat approval is required by Chapter 232, Local
79-10    Government Code, [law] is not exempted under Subsection (b) [this
79-11    section].
79-12          (k)  Groundwater withdrawn from a well exempt from permitting
79-13    or regulation under this section and subsequently transported
79-14    outside the boundaries of the district shall be subject to any
79-15    applicable production and export fees under Sections 36.122 and
79-16    36.205.
79-17          (l)  This section applies to water wells, including water
79-18    wells used to supply water for activities related to the
79-19    exploration or production of hydrocarbons or minerals.  This
79-20    section does not apply to production or injection wells drilled for
79-21    oil, gas, sulphur, uranium, or brine, or for core tests, or for
79-22    injection of gas, saltwater, or other fluids, under permits issued
79-23    by the Railroad Commission of Texas.
79-24          SECTION 2.58.  Section 36.122, Water Code, is amended to read
79-25    as follows:
79-26          Sec. 36.122.  TRANSFER OF GROUNDWATER OUT OF DISTRICT.
 80-1    (a)  If a permit or an amendment to a permit under Section 36.113
 80-2    proposes to transfer groundwater outside of a district's
 80-3    boundaries, the district may also consider the provisions of this
 80-4    section in determining whether to grant or deny the permit.
 80-5          (b)  A district may promulgate rules requiring a person to
 80-6    obtain a permit or an amendment to a permit under Section 36.113
 80-7    from the district for the transfer of groundwater out of the
 80-8    district to:
 80-9                (1)  increase, on or after March 2, 1997, the amount of
80-10    groundwater to be transferred under a continuing arrangement in
80-11    effect before that date; or
80-12                (2)  transfer groundwater out of the district on or
80-13    after March 2, 1997, under a new arrangement.
80-14          (c)  Except as provided in Section 36.113(e), the district
80-15    may not impose more restrictive permit conditions on transporters
80-16    than the district imposes on existing in-district users.
80-17          (d) [(b)]  The district may impose a reasonable fee for
80-18    processing an application [for a permit] under this section.  The
80-19    fee may not exceed fees that the district imposes for processing
80-20    other applications under Section 36.113.  An application filed to
80-21    comply with this section shall be considered and processed under
80-22    the same procedures as other applications for permits under Section
80-23    36.113 and shall be combined with applications filed to obtain a
80-24    permit for in-district water use under Section 36.113 from the same
80-25    applicant.
80-26          (e)  The district may impose a reasonable fee or surcharge
 81-1    for an export fee using one of the following methods:
 81-2                (1)  a fee negotiated between the district and the
 81-3    transporter; or
 81-4                (2)  a rate not to exceed the equivalent of the
 81-5    district's tax rate per hundred dollars of valuation for each
 81-6    thousand gallons of water transferred out of the district or 2.5
 81-7    cents per thousand gallons of water, if the district assesses a tax
 81-8    rate of less than 2.5 cents per hundred dollars of valuation.
 81-9          (f)  A district may not impose a fee under Subsection (e) on
81-10    withdrawal of water from land owned prior to March 1, 2001, by a
81-11    political subdivision if the political subdivision pays a tax
81-12    mitigation fee under Section 36.205(g).
81-13          (g) [(c)  Before issuing a permit under this section, the
81-14    district must give notice of the application and hold a public
81-15    hearing.]
81-16          [(d)]  In reviewing a proposed transfer of groundwater out of
81-17    the district [determining whether to issue a permit under this
81-18    section], the district shall consider:
81-19                (1)  the availability of water in the district and in
81-20    the proposed receiving area during the period for which the water
81-21    supply is requested;
81-22                (2)  [the availability of feasible and practicable
81-23    alternative supplies to the applicant;]
81-24                [(3)  the amount and purposes of use in the proposed
81-25    receiving area for which water is needed;]
81-26                [(4)]  the projected effect of the proposed transfer on
 82-1    aquifer conditions, depletion, subsidence, or effects on existing
 82-2    permit holders or other groundwater users within the district; and
 82-3                (3) [(5)]  the state [approved regional] water plan and
 82-4    certified district management plan.
 82-5          (h) [(e)]  The district may not deny a permit based on the
 82-6    fact that the applicant seeks to transfer groundwater outside of
 82-7    the district but may limit a permit issued under this section if
 82-8    conditions in Subsection (g) [(d)] warrant the limitation, subject
 82-9    to the provisions of Subsection (c).
82-10          (i) [(f)]  In addition to conditions provided by Section
82-11    36.1131, the permit shall specify:
82-12                (1)  the amount of water that may be transferred out of
82-13    the district; and
82-14                (2)  the period for which the water may be transferred.
82-15          (j)  The period specified by Subsection (i)(2) shall be:
82-16                (1)  five years if construction of a conveyance system
82-17    has not been initiated prior to the issuance of the permit; or
82-18                (2)  30 years if construction of a conveyance system
82-19    has been initiated prior to the issuance of the permit.
82-20          (k)  A term of five years under Subsection (j) shall
82-21    automatically be extended to 30 years if construction of a
82-22    conveyance system is begun before the expiration of the initial
82-23    five-year term.
82-24          (l)  Notwithstanding the period of time specified in
82-25    Subsections (j) and (k) during which water may be transferred under
82-26    a permit, a district may periodically review the amount of water
 83-1    that may be transferred under the permit and may limit the amount
 83-2    if conditions considered in Subsection (g) warrant the limitation,
 83-3    subject to the provisions of Subsection (c).  The review described
 83-4    by this subsection may take place not more frequently than the
 83-5    period of time provided for the review or renewal of regular
 83-6    permits issued by the district.  In its determination of whether to
 83-7    renew a permit issued under this section, the district shall
 83-8    consider relevant and current data for the conservation of
 83-9    groundwater resources and shall consider the permit in the same
83-10    manner it would consider any other permit in the district.
83-11          (m)  A district is prohibited from using revenues obtained
83-12    under Subsection (e) to prohibit the transfer of groundwater
83-13    outside of a district.  A district is not prohibited from using
83-14    revenues obtained under Subsection (e) for paying expenses related
83-15    to enforcement of this chapter or district rules.
83-16          (n)  Subsections (b), (e), and (f) apply [(g)  A district may
83-17    not prohibit the export of groundwater if the purchase was in
83-18    effect on or before June 1, 1997.]
83-19          [(h)  This section applies] only to a transfer of water that
83-20    the application for which is  initiated or increased after March 1,
83-21    2001.  Subsection (e) does not apply to a district that is
83-22    collecting an export fee or surcharge on March 1, 2001 [the
83-23    effective date of this section].
83-24          (o) [(i)]  A district shall adopt rules as necessary to
83-25    implement this section but shall not adopt rules expressly
83-26    prohibiting the export of groundwater.
 84-1          SECTION 2.59.  Section 36.205, Water Code, is amended to read
 84-2    as follows:
 84-3          Sec. 36.205.  AUTHORITY TO SET FEES.  (a)  A district may set
 84-4    fees for administrative acts of the district, such as filing
 84-5    applications.  Fees set by a district may not unreasonably exceed
 84-6    the cost to the district of performing the administrative function
 84-7    for which the fee is charged.
 84-8          (b)  A district shall set and collect fees for all services
 84-9    provided outside the boundaries of the district.  Such fees may not
84-10    unreasonably exceed the cost to the district of providing the
84-11    services outside the district.
84-12          (c)  A district may assess production fees based on the
84-13    amount of water authorized by permit to be withdrawn from a well or
84-14    the amount actually withdrawn.  A district may assess the fees in
84-15    lieu of, or in conjunction with, any taxes otherwise levied by the
84-16    district.  A district may use revenues generated by the fees for
84-17    any lawful purpose.  Production fees [Fees based on the amount of
84-18    water to be withdrawn from a well] shall not exceed:
84-19                (1)  $1 [one dollar] per acre-foot payable annually
84-20    [acre foot] for water used for agricultural use [the purpose of
84-21    irrigating agricultural crops]; or
84-22                (2)  $10 per acre-foot payable annually [17 cents per
84-23    thousand gallons] for water used for any other purpose.
84-24          (d)  The Barton Springs-Edwards Aquifer Conservation District
84-25    and the Guadalupe County Groundwater Conservation District may not
84-26    charge production fees for an annual period greater than $1 per
 85-1    acre-foot for water used for agricultural use or 17 cents per
 85-2    thousand gallons for water used for any other purpose.  The Barton
 85-3    Springs-Edwards Aquifer Conservation District [A district affected
 85-4    by Subsection (c)(2) that also] may assess a water use fee against
 85-5    a specific municipality in [shall assess] an amount not to exceed
 85-6    60 percent of the total funding of the district received from water
 85-7    use fees assessed against that municipality and other nonexempt
 85-8    users in the district.  This subsection shall take precedence over
 85-9    all prior enactments.
85-10          (e)  Subsection (c) does not apply to the following
85-11    districts:
85-12                (1)  the Edwards Aquifer Authority;
85-13                (2)  the Fort Bend Subsidence District; [or]
85-14                (3)  the Harris-Galveston Coastal Subsidence District;
85-15                (4)  the Barton Springs-Edwards Aquifer Conservation
85-16    District; or
85-17                (5)  any district that collects a property tax and that
85-18    was created before September 1, 1999, unless otherwise authorized
85-19    by special law.
85-20          (f)  A district, including a district described under
85-21    Subsection (d), may assess a production fee under Subsection (c)
85-22    for any water produced pursuant to an exemption under Section
85-23    36.117 if that water is subsequently sold to another person.
85-24          (g)  Until groundwater production is initiated, political
85-25    subdivisions that own property that is suitable for groundwater
85-26    development or on which a groundwater well field has been
 86-1    constructed shall annually pay the district in which the property
 86-2    is located a fee that is equal to the taxes that would be paid to
 86-3    the district if the land were not owned by a political subdivision.
 86-4    This provision applies only to a political subdivision, other than
 86-5    a state agency, that is located outside the district where the
 86-6    property is located.
 86-7          (h)  A district may assess a transportation fee under Section
 86-8    36.122.
 86-9          SECTION 2.60.  Section 36.206, Water Code, is amended by
86-10    amending Subsection (b) and adding Subsection (c) to read as
86-11    follows:
86-12          (b)  The rate of fees set for [crop or livestock production
86-13    or other] agricultural uses shall be no more than 20 percent of the
86-14    rate applied to municipal uses.
86-15          (c)  District fees may not be used to purchase groundwater
86-16    rights unless the purchased rights are acquired for conservation
86-17    purposes and are permanently held in trust not to be produced.
86-18          SECTION 2.61.  Subchapter I, Chapter 36, Water Code, is
86-19    amended by adding Section 36.3011 to read as follows:
86-20          Sec. 36.3011.  FAILURE OF A DISTRICT TO CONDUCT JOINT
86-21    PLANNING.  (a)  If the board of a district within a common
86-22    management area fails to forward a copy of its new or revised
86-23    certified management plan under Section 36.108, the commission
86-24    shall take appropriate action under Section 36.303.
86-25          (b)  Within 45 days after receiving the review panel's report
86-26    under Section 36.108, the executive director or the commission
 87-1    shall take action to implement any or all of the panel's
 87-2    recommendations.  If the commission finds that a district in the
 87-3    joint planning area has failed to adopt rules, the groundwater in
 87-4    the management area is not adequately protected by the rules
 87-5    adopted by the district, or the groundwater in the management area
 87-6    is not adequately protected because of the district's failure to
 87-7    enforce substantial compliance with its rules, the commission may
 87-8    take any action it considers necessary in accordance with Section
 87-9    36.303.
87-10          SECTION 2.62.  Subsection (a), Section 36.303, Water Code, is
87-11    amended to read as follows:
87-12          (a)  If Section 36.108, 36.301, or 36.302(f) applies, the
87-13    commission, after notice and hearing in accordance with Chapter
87-14    2001, Government Code, shall take action the commission considers
87-15    appropriate, including:
87-16                (1)  issuing an order requiring the district to take
87-17    certain actions or to refrain from taking certain actions;
87-18                (2)  dissolving the board in accordance with Sections
87-19    36.305 and 36.307 and calling an election for the purpose of
87-20    electing a new board;
87-21                (3)  requesting the attorney general to bring suit for
87-22    the appointment of a receiver to collect the assets and carry on
87-23    the business of the groundwater conservation district [removing the
87-24    district's taxing authority]; or
87-25                (4)  dissolving the district in accordance with
87-26    Sections 36.304, 36.305, and 36.308.
 88-1          SECTION 2.63.  Subchapter I, Chapter 36, Water Code, is
 88-2    amended by adding Section 36.3035 to read as follows:
 88-3          Sec. 36.3035.  APPOINTMENT OF A RECEIVER.  (a)  If the
 88-4    attorney general brings a suit for the appointment of a receiver
 88-5    for a district, a district court shall appoint a receiver if an
 88-6    appointment is necessary to protect the assets of the district.
 88-7          (b)  The receiver shall execute a bond in an amount to be set
 88-8    by the court to ensure the proper performance of the receiver's
 88-9    duties.
88-10          (c)  After appointment and execution of bond, the receiver
88-11    shall take possession of the assets of the district specified by
88-12    the court.
88-13          (d)  Until discharged by the court, the receiver shall
88-14    perform the duties that the court directs to preserve the assets
88-15    and carry on the business of the district and shall strictly
88-16    observe the final order involved.
88-17          (e)  On a showing of good cause by the district, the court
88-18    may dissolve the receivership and order the assets and control of
88-19    the business returned to the district.
88-20          SECTION 2.64.  Section 51.149, Water Code, is amended to read
88-21    as follows:
88-22          Sec. 51.149.  CONTRACTS.  (a)  No approvals other than those
88-23    specified in Subsection (c) and in Section 1, Chapter 778, Acts of
88-24    the 74th Legislature, Regular Session, 1995, need be obtained in
88-25    order for a contract between a district and a municipality to be
88-26    valid, binding, and enforceable against all parties to the
 89-1    contract.  After approval by a majority of the electors voting at
 89-2    an election conducted in the manner of a bond election, a district
 89-3    may make payments under a contract from taxes for debt that does
 89-4    not exceed 30 years.
 89-5          (b) [(d)]  A contract may provide that the district will make
 89-6    payments under the contract from proceeds from the sale of notes or
 89-7    bonds, from taxes, from any other income of the district, or from
 89-8    any combination of these.
 89-9          (c) [(e)]  A district may make payments under a contract from
89-10    taxes, other than maintenance taxes, after the provisions of the
89-11    contract have been approved by a majority of the electors voting at
89-12    an election held for that purpose.
89-13          (d) [(f)]  Any contract election may be held at the same time
89-14    as and in conjunction with an election to issue bonds, and the
89-15    procedure for calling the election, giving notice, conducting the
89-16    election, and canvassing the returns shall be the same as the
89-17    procedure for a bond election.
89-18          SECTION 2.65.  Subsection (a), Section 182.052, Utilities
89-19    Code, is amended to read as follows:
89-20          (a)  Except as provided by Section 182.054, a
89-21    government-operated utility may not disclose personal information
89-22    in a customer's account record, or any information relating to the
89-23    volume or units of utility usage or the amounts billed to or
89-24    collected from the individual for utility usage, if the customer
89-25    requests that the government-operated utility keep the information
89-26    confidential.
 90-1                    ARTICLE 3.  DISTRICT RATIFICATIONS
 90-2           PART 1.  COW CREEK GROUNDWATER CONSERVATION DISTRICT
 90-3          SECTION 3.0101.  CREATION.  (a)  A groundwater conservation
 90-4    district to be known as the Cow Creek Groundwater Conservation
 90-5    District is created in Kendall County, subject to approval at a
 90-6    confirmation election under Section 3.0109 of this part.  The
 90-7    district is a governmental agency and a body politic and corporate.
 90-8          (b)  The district is created under and is essential to
 90-9    accomplish the purposes of Section 59, Article XVI, Texas
90-10    Constitution.
90-11          (c)  The district may develop and implement regulatory,
90-12    conservation, and recharge programs that preserve and protect
90-13    groundwater resources located in the district.
90-14          SECTION 3.0102.  DEFINITIONS.  In this part:
90-15                (1)  "District" means the Cow Creek Groundwater
90-16    Conservation District.
90-17                (2)  "Retail public utility" means a retail public
90-18    utility as defined by Section 13.002, Water Code, that is providing
90-19    service in the district on September 1, 2001.
90-20                (3)  "Well" means any excavation drilled or dug into
90-21    the ground that may intercept or penetrate a water-bearing stratum
90-22    or formation.
90-23          SECTION 3.0103.  BOUNDARIES.  The boundaries of the district
90-24    are coextensive with the boundaries of Kendall County.
90-25          SECTION 3.0104.  FINDING OF BENEFIT.  All of the land and
90-26    other property included within the boundaries of the district will
 91-1    benefit from the works and projects that are to be accomplished by
 91-2    the district under powers conferred by Section 59, Article XVI,
 91-3    Texas Constitution.  The district is created to serve a public use
 91-4    and benefit.
 91-5          SECTION 3.0105.  POWERS.  Except as otherwise provided by
 91-6    this part, the district has all of the rights, powers, privileges,
 91-7    authority, functions, and duties provided by the general law of the
 91-8    state, including Chapter 36, Water Code, applicable to groundwater
 91-9    conservation districts created under Section 59, Article XVI, Texas
91-10    Constitution.  This part prevails over any provision of general law
91-11    that is in conflict or inconsistent with this part.
91-12          SECTION 3.0106.  ELECTION OF DIRECTORS.  (a)  The directors
91-13    of the district shall be elected according to the commissioners
91-14    precinct method as provided by this part.
91-15          (b)  One director shall be elected by the qualified voters of
91-16    the entire district and one director shall be elected from each
91-17    county commissioners precinct by the qualified voters of that
91-18    precinct.
91-19          (c)  A person shall indicate on the application for a place
91-20    on the ballot the precinct that the person seeks to represent or
91-21    that the person seeks to represent the district at large.
91-22          SECTION 3.0107.  BOARD OF DIRECTORS.  (a)  The district is
91-23    governed by a board of five directors.
91-24          (b)  A vacancy in the office of director shall be filled by
91-25    appointment of the board until the next election for directors.  At
91-26    the next election for directors, a person shall be elected to fill
 92-1    the position.  If the position is not scheduled to be filled at the
 92-2    election, the person elected to fill the position shall serve only
 92-3    for the remainder of the unexpired term.
 92-4          (c)  To be eligible to serve as director from a county
 92-5    commissioners precinct, a person must be a registered voter in the
 92-6    precinct from which the person is elected or appointed.  To be
 92-7    eligible to serve as director at large, a person must be a
 92-8    registered voter in the district.
 92-9          SECTION 3.0108.  TEMPORARY DIRECTORS.  (a)  The temporary
92-10    board of directors shall be appointed by the county commissioners
92-11    court.  A temporary director will be appointed from each
92-12    commissioners precinct, and one temporary director will be a
92-13    director at large.
92-14          (b)  If a temporary director fails to qualify for office, the
92-15    temporary directors who have qualified shall appoint a person to
92-16    fill the vacancy.  If at any time there are fewer than three
92-17    qualified temporary directors, the Texas Natural Resource
92-18    Conservation Commission shall appoint the necessary number of
92-19    persons to fill all vacancies on the board.
92-20          SECTION 3.0109.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
92-21    (a)  The temporary board of directors shall call and hold an
92-22    election to confirm establishment of the district and to elect five
92-23    initial directors.
92-24          (b)  Section 41.001(a), Election Code, does not apply to a
92-25    confirmation and initial directors election held as provided by
92-26    this section.
 93-1          (c)  If a majority of the votes cast at the election favor
 93-2    the creation of the district, the temporary directors shall declare
 93-3    the district created.  If a majority of the votes cast at the
 93-4    election are against the creation of the district, the temporary
 93-5    directors shall declare the district defeated.  The temporary
 93-6    directors shall file a copy of the election results with the Texas
 93-7    Natural Resource Conservation Commission.
 93-8          (d)  If a majority of the votes cast at the election are
 93-9    against the creation of the district, the temporary directors may
93-10    call and hold subsequent elections to confirm establishment of the
93-11    district and to elect initial directors.  A subsequent election may
93-12    not be held earlier than the first anniversary of the date on which
93-13    the previous election was held.  If the district is not created
93-14    before September 1, 2006, this part expires on that date.
93-15          (e)  Section 36.017(a), Water Code, does not apply to the
93-16    district.
93-17          (f)  Except as provided by this section, a confirmation and
93-18    directors election must be conducted as provided by Sections
93-19    36.017(b)-(h), Water Code, and the Election Code.
93-20          SECTION 3.0110.  INITIAL DIRECTORS.  (a)  A person who wishes
93-21    to be a candidate for the office of initial director may file an
93-22    application with the temporary board of directors to have the
93-23    candidate's name printed on the ballot as provided by Section
93-24    3.0106 of this part.
93-25          (b)  At the confirmation and initial directors election, the
93-26    temporary board of directors shall have the names of the five
 94-1    persons serving as temporary directors placed on the ballot by
 94-2    commissioners precinct and as at-large director, together with the
 94-3    name of any candidate filing for the office of director as provided
 94-4    by this section.
 94-5          (c)  If the district is created at the election, the
 94-6    temporary directors, at the time the vote is canvassed, shall
 94-7    declare the candidate receiving the most votes for each
 94-8    commissioners precinct or for the at-large director to be elected
 94-9    as the initial directors.
94-10          (d)  The initial directors for Precincts 2 and 3 shall serve
94-11    as initial directors until the first regular meeting of the board
94-12    of directors held after the first permanent directors election
94-13    under Section 3.0112 of this part.  The initial directors for
94-14    Precincts 1 and 4 and the initial director representing the
94-15    district at large shall serve as initial directors until the first
94-16    regular meeting of the board of directors held after the second
94-17    permanent directors election under Section 3.0112 of this part.
94-18          SECTION 3.0111.  SERVICE OF DIRECTORS.  (a)  Temporary
94-19    directors serve until the temporary directors become initial
94-20    directors under Section 3.0110 of this part or until this part
94-21    expires under Section 3.0109 of this part, whichever occurs
94-22    earlier.
94-23          (b)  Initial directors serve until permanent directors are
94-24    elected under Section 3.0112 of this part.
94-25          (c)  Permanent directors serve staggered four-year terms.
94-26          (d)  A director serves until the director's successor has
 95-1    qualified.
 95-2          (e)  Each director must qualify to serve as director in the
 95-3    manner provided by Section 36.055, Water Code.
 95-4          SECTION 3.0112.  ELECTION OF PERMANENT DIRECTORS.  Beginning
 95-5    in the second year after the year in which the district is
 95-6    authorized to be created at a confirmation election, an election
 95-7    shall be held in the district on the first Saturday in May every
 95-8    two years to elect the appropriate number of directors to the
 95-9    board.
95-10          SECTION 3.0113.  ADDITIONAL AUTHORITY.  (a)  The district may
95-11    contract with one or more state agencies or other governmental
95-12    bodies, including a county, a river authority, or another district,
95-13    to carry out any function of the district.
95-14          (b)  The district may require a drilling permit before a new
95-15    well is drilled or an existing well is substantially altered.
95-16    Notwithstanding an exemption for a well under Section 36.117, Water
95-17    Code, written authorization granted by the district must be
95-18    received before a new well is drilled or an existing well is
95-19    substantially altered.
95-20          (c)  The district may participate in the construction,
95-21    implementation, and maintenance of best management practices for
95-22    water resource management in the district and may engage in and
95-23    promote the acceptance of best management practices through
95-24    education efforts sponsored by the district.  Construction,
95-25    implementation, and maintenance of best management practices must
95-26    address water quantity and quality practices such as brush
 96-1    management, prescribed grazing, recharge structures, water and silt
 96-2    detention and retention structures, plugging of abandoned wells,
 96-3    rainwater harvesting, and other treatment measures for the
 96-4    conservation of water resources.
 96-5          (d)  Reasonable fees, as determined by the district, may be
 96-6    imposed on an annual basis on each nonexempt well.  The district
 96-7    shall adopt any rules necessary for the assessment and collection
 96-8    of fees under this subsection.
 96-9          (e)  The district may use money collected from fees:
96-10                (1)  in any manner necessary for the management and
96-11    operation of the district;
96-12                (2)  to pay all or part of the principal of and
96-13    interest on district bonds or notes; and
96-14                (3)  for any purpose consistent with the district's
96-15    certified water management plan.
96-16          (f)  The district shall grant an exemption or other relief
96-17    from ad valorem taxes on property on which a water conservation
96-18    initiative has been implemented.  The district shall adopt rules to
96-19    implement this subsection.  A retail public utility shall receive
96-20    the same exemption or relief from ad valorem taxes on property as
96-21    any other customer of the district would receive.
96-22          (g)  As a water conservation initiative to encourage retail
96-23    public utilities to obtain water supplies from sources other than
96-24    groundwater, the district shall grant an exemption or other relief
96-25    from ad valorem taxes on property served by a retail public utility
96-26    based on (i) the percentage of potable water supplied within the
 97-1    district by the retail public utility from sources other than
 97-2    groundwater compared to the total water supplied by the retail
 97-3    public utility for the preceding year and (ii) the percentage of
 97-4    wastewater effluent produced by the retail public utility that is
 97-5    used as reclaimed water within the district compared to the total
 97-6    wastewater effluent produced by the retail public utility for the
 97-7    preceding year.  The  district may consider the impact of floods
 97-8    and equipment breakage on the retail public utility's ability to
 97-9    supply water from sources other than groundwater.  The total amount
97-10    of the exemption or other relief from ad valorem taxes shall not
97-11    exceed one-half of the tax levied by the district.
97-12          SECTION 3.0114.  PROHIBITED ACTS.  The district may not:
97-13                (1)  impose an ad valorem property tax for
97-14    administrative, operation, or maintenance expenses that exceeds the
97-15    lesser of the rate approved by the majority of the qualified voters
97-16    voting in the election authorizing the tax, or three cents per $100
97-17    valuation;
97-18                (2)  require the owner of a well used solely for
97-19    domestic or livestock purposes to install a meter or measuring
97-20    device on the well; or
97-21                (3)  enter into any contract or engage in any action to
97-22    supply water to any person in the service area of any municipality
97-23    or retail public utility located in the district, except with the
97-24    consent of the municipality or retail public utility.
97-25          SECTION 3.0115.  VALIDATION.  An act or proceeding heretofore
97-26    taken by or on behalf of the district, as created and organized
 98-1    under Chapter 1331, Acts of the 76th Legislature, Regular Session,
 98-2    1999, is conclusively presumed, as of the date it occurred, to be
 98-3    valid and to have occurred in accordance with all applicable laws,
 98-4    and all actions are in all things validated, ratified, and
 98-5    confirmed in all respects by this part.
 98-6           PART 2.  CROSSROADS GROUNDWATER CONSERVATION DISTRICT
 98-7          SECTION 3.0201.  RATIFICATION OF CREATION.  The creation by
 98-8    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 98-9    of the Crossroads Groundwater Conservation District in Victoria
98-10    County is ratified as required by Section 15(a) of that chapter,
98-11    subject to approval at a confirmation election under Section 3.0207
98-12    of this part.  The district is a governmental agency and a body
98-13    politic and corporate.
98-14          SECTION 3.0202.  DEFINITIONS.  In this part:
98-15                (1)  "District" means the Crossroads Groundwater
98-16    Conservation District.
98-17                (2)  "Board" means the district's board of directors.
98-18          SECTION 3.0203.  LEGISLATIVE FINDINGS.  The legislature finds
98-19    that:
98-20                (1)  the organization of the district is feasible and
98-21    practicable;
98-22                (2)  all of the land to be included in, and the
98-23    residents of, the district will benefit from the creation of the
98-24    district;
98-25                (3)  there is a public necessity for the district; and
98-26                (4)  the creation of the district will provide a
 99-1    benefit and utility to the public.
 99-2          SECTION 3.0204.  BOUNDARIES.  The district is composed of all
 99-3    the territory located within Victoria County.
 99-4          SECTION 3.0205.  APPLICATION OF CHAPTER 36, WATER CODE;
 99-5    GENERAL POWERS AND DUTIES.  Except to the extent of any conflict
 99-6    with this part or as specifically limited by this part, the
 99-7    district is governed by and subject to Chapter 36, Water Code, and
 99-8    may exercise all of the powers contained in that chapter, including
 99-9    the power to issue bonds and levy and collect taxes and the power
99-10    of eminent domain.  The district may exercise all of the duties
99-11    provided by Chapter 36, Water Code.
99-12          SECTION 3.0206.  TEMPORARY DIRECTORS.  (a)  On September 1,
99-13    2001, the following persons are designated as temporary directors
99-14    of the district:
99-15                (1)  Place 1:  Mark Dierlam
99-16                (2)  Place 2:  Rocky Sanders
99-17                (3)  Place 3:  S. F. Ruschhaupt III
99-18                (4)  Place 4:  Joseph Dial
99-19                (5)  Place 5:  Stephen Diebel
99-20                (6)  Place 6:  Jerry James
99-21                (7)  Place 7:  Denise McCue
99-22          (b)  If a temporary director fails to qualify for office or
99-23    if a vacancy occurs in the office of temporary director for any
99-24    reason, the Victoria County Commissioners Court shall appoint
99-25    persons to fill vacancies in Places 1-4 and the city council of the
99-26    City of Victoria shall appoint persons to fill vacancies in Places
 100-1   5-7.
 100-2         (c)  The temporary directors shall select from their members
 100-3   persons to serve as chairman, vice chairman, and secretary.
 100-4         (d)  The temporary directors shall serve until they shall
 100-5   have declared the district created, at which time they become the
 100-6   initial directors of the district under Section 3.0208 of this
 100-7   part.
 100-8         (e)  To be qualified to serve as a temporary director, a
 100-9   person must be a resident of Victoria County and at least 18 years
100-10   of age.
100-11         SECTION 3.0207.  CREATION ELECTION.  (a)  Not later than
100-12   October 1, 2001, and without the necessity of having a petition
100-13   presented, the temporary directors shall meet and call an election
100-14   to be held not later than January 1, 2002, within the boundaries of
100-15   the proposed district to approve the creation of the district.
100-16         (b)  Section 41.001(a), Election Code, does not apply to an
100-17   election called under this section.
100-18         (c)  The ballot for the election shall be printed to provide
100-19   for or against the following propositions:
100-20               (1)  the creation of the Crossroads Groundwater
100-21   Conservation District in Victoria County; and
100-22               (2)  the levy and collection of a property tax in the
100-23   district.
100-24         (d)  The temporary board may include other propositions on
100-25   the ballot that it considers necessary.
100-26         (e)  If a majority of votes cast at the election favor the
 101-1   creation of the district, the temporary directors shall declare the
 101-2   district created.  If a majority of the votes cast at the election
 101-3   are against the creation of the district, the temporary directors
 101-4   shall declare the district defeated.  The temporary directors shall
 101-5   file a copy of the election results with the Texas Natural Resource
 101-6   Conservation Commission.
 101-7         (f)  If the creation of the district is defeated, further
 101-8   elections may be called and held after the first anniversary of the
 101-9   most recent creation election.  If the district is not created by
101-10   September 1, 2006, this part expires.
101-11         SECTION 3.0208.  INITIAL DIRECTORS.  (a)  On approval of the
101-12   creation of the district under Section 3.0207 of this part, the
101-13   temporary directors become the initial directors of the district
101-14   and serve on the board for terms as provided by Subsection (b) of
101-15   this section; provided that within 60 days after the creation of
101-16   the district, the Victoria County Commissioners Court may replace
101-17   any director in Places 1-4 and the city council of the City of
101-18   Victoria may replace any director in Places 5-7.
101-19         (b)  The persons serving as directors for Places 1, 3, 5, and
101-20   7 shall serve as directors for four years following the creation of
101-21   the district.  The persons serving as directors for Places 2, 4,
101-22   and 6 shall serve as directors for two years following the creation
101-23   of the district.
101-24         (c)  If, for any reason, an appointed director is not
101-25   qualified to take office at the first regular meeting of the board
101-26   following his or her appointment, the director for that place shall
 102-1   continue to serve until a successor has qualified.
 102-2         SECTION 3.0209.  BOARD OF DIRECTORS.  (a)  The board of
 102-3   directors of the district is composed of seven members.
 102-4         (b)  The directors shall select from their members persons to
 102-5   serve as chairman, vice chairman, and secretary.
 102-6         SECTION 3.0210.  QUALIFICATIONS OF BOARD MEMBERS.  To be
 102-7   qualified for appointment as a director, a person must be a
 102-8   resident of the district and must be at least 18 years of age.
 102-9         SECTION 3.0211.  TERM OF OFFICE.  (a)  Except for the
102-10   temporary and initial directors of the district, directors shall
102-11   serve for terms of four years.
102-12         (b)  Upon the expiration of the terms of directors or any
102-13   vacancy during a term, the Victoria County Commissioners Court
102-14   shall appoint persons to serve in Places 1-4 and the city council
102-15   of the City of Victoria shall appoint persons to serve in Places
102-16   5-7.
102-17         (c)  A vacancy in the office of director shall be filled by
102-18   appointment for the remainder of the term.
102-19         SECTION 3.0212.  LIMITATION ON TAXATION.  The district may
102-20   not impose an ad valorem tax at a rate that exceeds two cents on
102-21   the $100 valuation of taxable property in the district.
102-22         PART 3.  HAYS TRINITY GROUNDWATER CONSERVATION DISTRICT
102-23         SECTION 3.0301.  CREATION AND RATIFICATION.  (a)  A
102-24   groundwater conservation district to be known as the Hays Trinity
102-25   Groundwater Conservation District, created by Chapter 1331, Acts of
102-26   the 76th Legislature, Regular Session, 1999, in a portion of Hays
 103-1   County, subject to approval at a confirmation election under
 103-2   Section 10 of that chapter is hereby affirmed, ratified, and
 103-3   validated by this part.  The district is a governmental agency and
 103-4   a body politic and corporate.
 103-5         (b)  The district is created under and is essential to
 103-6   accomplish the purposes of Section 59, Article XVI, Texas
 103-7   Constitution.
 103-8         SECTION 3.0302.  DEFINITION.  In this part, "district" means
 103-9   the Hays Trinity Groundwater Conservation District.
103-10         SECTION 3.0303.  BOUNDARIES.  The boundaries of the district
103-11   are coextensive with the boundaries of Hays County, Texas, save and
103-12   except any areas in Hays County which are currently within another
103-13   groundwater conservation district with the authority to require a
103-14   permit for the drilling or alteration of wells for the withdrawal
103-15   of groundwater.  Within 30 days of its initial meeting and prior to
103-16   holding any confirmation election, the district shall cause a
103-17   description of its boundaries to be prepared and filed with the
103-18   county clerk of Hays County and the Texas Natural Resource
103-19   Conservation Commission.
103-20         SECTION 3.0304.  FINDING OF BENEFIT.  All of the land and
103-21   other property included within the boundaries of the district will
103-22   be benefited by the works and projects that are to be accomplished
103-23   by the district under powers conferred by Section 59, Article XVI,
103-24   Texas Constitution.  The district is created to serve a public use
103-25   and benefit.
103-26         SECTION 3.0305.  POWERS.  (a)  Except as provided by this
 104-1   part, the district has all the rights, powers, privileges,
 104-2   authority, functions, and duties provided by the general law of
 104-3   this state, including Chapter 36, Water Code, applicable to
 104-4   groundwater conservation districts created under Section 59,
 104-5   Article XVI, Texas Constitution.  Chapter 49, Water Code, does not
 104-6   apply to the district.  This part prevails over any provision of
 104-7   general law that is in conflict or inconsistent with this part.
 104-8         (b)  The rights, powers, privileges, authority, functions,
 104-9   and duties of the district are subject to the continuing right of
104-10   supervision of the state to be exercised by and through the Texas
104-11   Natural Resource Conservation Commission.
104-12         (c)  The district has the power to limit the transfer of
104-13   groundwater out of the district, including the power to prohibit
104-14   the transfer.
104-15         (d)  The district does not have authority to enter property
104-16   to inspect an exempt well without the property owner's permission.
104-17         (e)  The Hays County Commissioners Court, by resolution, may
104-18   require an election to be conducted within six months to affirm or
104-19   reverse a decision of the board of directors of the district.
104-20         (f)  The district shall not have the power to require well
104-21   construction standards for residential wells higher than state
104-22   standards for such wells.
104-23         SECTION 3.0306.  EXEMPTIONS.  (a)  The following wells are
104-24   exempt from Chapter 36, Water Code, rules and shall not be
104-25   regulated, permitted, or metered by the district:
104-26               (1)  a well used to satisfy the domestic needs of a
 105-1   single private residential household and producing less than 25,000
 105-2   gallons per day;
 105-3               (2)  a well used for conventional farming and ranching
 105-4   activities, not to include intensive operations such as
 105-5   aquaculture, livestock feedlots, and poultry operations.
 105-6         (b)  A well used for conventional farming and ranching
 105-7   activities, not to include intensive operations such as
 105-8   aquaculture, livestock feedlots, and poultry operations, is not
 105-9   required to obtain construction authorization.
105-10         SECTION 3.0307.  FISCAL RESPONSIBILITIES.  (a)  The district
105-11   shall each year cause a budget to be prepared showing the proposed
105-12   expenditures and disbursements and the estimated receipts and
105-13   collections for the following fiscal year and shall hold a public
105-14   hearing on the proposed budget after publication of a notice of
105-15   hearing in a newspaper of general circulation in the county at
105-16   least once not less than 10 days prior to the date set for the
105-17   hearing.  Any person who is a taxpayer of the district shall have
105-18   the right to appear at the time and place designated in the notice
105-19   and be heard with reference to any item shown in the proposed
105-20   budget.  The proposed budget shall also show the amount of revenues
105-21   expected to be collected during such fiscal year.
105-22         (b)  At the written request of the Hays County Commissioners
105-23   Court, the county auditor shall audit the performance of the
105-24   district.  The commissioners court may request a general audit of
105-25   the performance of the district or may request an audit of only one
105-26   or more particular duties, practices, functions, or other district
 106-1   matters.
 106-2         SECTION 3.0308.  BOARD OF DIRECTORS.  (a)  A board of five
 106-3   appointed directors governs the district.
 106-4         (b)  Directors must reside in the district.
 106-5         (c)  Each director must qualify to serve as director in the
 106-6   manner provided by Section 36.055, Water Code.
 106-7         (d)  Directors serve staggered two-year terms.
 106-8         (e)  A director serves until the director's successor has
 106-9   qualified.
106-10         (f)  If there is a vacancy on the board, the commissioners
106-11   court shall appoint a director to serve the remainder of the term.
106-12         (g)  The commissioners court shall appoint a director to
106-13   succeed a director on or before the date the director's term
106-14   expires.
106-15         (h)  A director may not receive a salary or other
106-16   compensation for service as a director but may be reimbursed for
106-17   actual expenses of attending meetings at the rate in effect for
106-18   employees of Hays County.
106-19         SECTION 3.0309.  APPOINTMENT AND TERMS OF INITIAL DIRECTORS.
106-20   Not later than the 31st day after the effective date of this part,
106-21   the Hays County Commissioners Court shall appoint:
106-22               (1)  two directors to serve terms expiring February 1,
106-23   2003; and
106-24               (2)  three directors to serve terms expiring February
106-25   1, 2004.
106-26         SECTION 3.0310.  CONFIRMATION ELECTION.  (a)  The initial
 107-1   board of directors shall call and hold an election to confirm
 107-2   establishment of the district no later than the second Saturday in
 107-3   May 2002.
 107-4         (b)  Section 41.001(a), Election Code, does not apply to a
 107-5   confirmation election held as provided by this section.
 107-6         (c)  Except as provided by this section, a confirmation
 107-7   election must be conducted as provided by Sections 36.017(b)-(h),
 107-8   Water Code, and the Election Code.
 107-9         (d)  If the establishment of the district has not been
107-10   confirmed at an election held under this section before the second
107-11   anniversary of the effective date of this part, this part expires
107-12   on that date.
107-13         SECTION 3.0311.  FUNDING AUTHORITY.  (a)  The district may
107-14   levy or collect a fee not to exceed $300 for construction
107-15   authorization for new wells completed after the effective date of
107-16   this bill, except as prohibited by Section 3.0306(b).
107-17         (b)  The district may levy or collect a water utility service
107-18   connection fee not to exceed $300 for all new water service
107-19   connections made after the effective date of this part.  This fee
107-20   may not be charged on connection fees to a water utility which has
107-21   surface water as its sole source of water.
107-22          PART 4.  LONE WOLF GROUNDWATER CONSERVATION DISTRICT
107-23         SECTION 3.0401.  RATIFICATION OF CREATION.  The creation by
107-24   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
107-25   of the Lone Wolf Groundwater Conservation District in Mitchell
107-26   County is ratified as required by Section 15(a) of that chapter,
 108-1   subject to approval at a confirmation election under Section 3.0407
 108-2   of this part.
 108-3         SECTION 3.0402.  DEFINITION.  In this part, "district" means
 108-4   the Lone Wolf Groundwater Conservation District.
 108-5         SECTION 3.0403.  GENERAL POWERS.  (a)  The district has all
 108-6   of the rights, powers, privileges, authority, functions, and duties
 108-7   provided by the general law of the state, including Chapter 36,
 108-8   Water Code, applicable to groundwater conservation districts
 108-9   created under Section 59, Article XVI, Texas Constitution.  This
108-10   part prevails over any provision of general law that is in conflict
108-11   or inconsistent with this part, including any provision of Chapter
108-12   1331, Acts of the 76th Legislature, Regular Session, 1999.
108-13         (b)  Notwithstanding Subsection (a) of this section, the
108-14   following provisions prevail over a conflicting or inconsistent
108-15   provision of this part:
108-16               (1)  Sections 36.1071-36.108, Water Code;
108-17               (2)  Sections 36.159-36.161, Water Code; and
108-18               (3)  Subchapter I, Chapter 36, Water Code.
108-19         SECTION 3.0404.  BOARD OF DIRECTORS.  (a)  The district is
108-20   governed by a board of five directors.
108-21         (b)  Temporary directors serve until initial directors are
108-22   elected under Section 3.0407 of this part.
108-23         (c)  Initial directors serve until permanent directors are
108-24   elected under Section 3.0408 of this part.
108-25         (d)  Permanent directors serve staggered four-year terms.
108-26         (e)  Each director must qualify to serve as director in the
 109-1   manner provided by Section 36.055, Water Code.
 109-2         (f)  A director serves until the director's successor has
 109-3   qualified.
 109-4         SECTION 3.0405.  COMPENSATION OF DIRECTORS.  A director is
 109-5   not entitled to fees of office but is entitled to reimbursement of
 109-6   actual expenses reasonably and necessarily incurred while engaging
 109-7   in activities on behalf of the district.
 109-8         SECTION 3.0406.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
 109-9   PRECINCTS.  (a)  The directors of the district shall be elected
109-10   according to the commissioners precinct method as provided by this
109-11   section.
109-12         (b)  One director shall be elected by the voters of the
109-13   entire district, and one director shall be elected from each county
109-14   commissioners precinct by the voters of that precinct.
109-15         (c)  To be eligible to be a candidate for or to serve as
109-16   director at large, a person must be a registered voter in the
109-17   district.  To be eligible to be a candidate for or to serve as
109-18   director from a county commissioners precinct, a person must be a
109-19   registered voter of that precinct.
109-20         (d)  A person shall indicate on the application for a place
109-21   on the ballot:
109-22               (1)  the precinct that the person seeks to represent;
109-23   or
109-24               (2)  that the person seeks to represent the district at
109-25   large.
109-26         (e)  At the first election after the county commissioners
 110-1   precincts are redrawn under Section 18, Article V, Texas
 110-2   Constitution, four new directors shall be elected to represent the
 110-3   precincts.  The directors elected shall draw lots to determine
 110-4   which two directors serve two-year terms and which two directors
 110-5   serve four-year terms.
 110-6         SECTION 3.0407.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
 110-7   (a)  The temporary board of directors shall call and hold an
 110-8   election to confirm establishment of the district and to elect
 110-9   initial directors.
110-10         (b)  At the confirmation and initial directors election, the
110-11   temporary board of directors shall have placed on the ballot the
110-12   name of any candidate filing for an initial director position and
110-13   blank spaces to write in the names of other persons.  A temporary
110-14   director who is eligible to be a candidate under Section 3.0406 of
110-15   this part may file for an initial director position.
110-16         (c)  Section 41.001(a), Election Code, does not apply to a
110-17   confirmation and initial directors election held as provided by
110-18   this section.
110-19         (d)  Except as provided by this section, a confirmation and
110-20   initial directors election must be conducted as provided by Section
110-21   36.017(b)-(h), Water Code, and the Election Code.
110-22         SECTION 3.0408.  ELECTION OF DIRECTORS.  (a)  On the first
110-23   Saturday in May of the first even-numbered year after the year in
110-24   which the district is authorized to be created at a confirmation
110-25   election, an election shall be held in the district for the
110-26   election of three directors to serve four-year terms and two
 111-1   directors to serve two-year terms.
 111-2         (b)  On the first Saturday in May of each subsequent second
 111-3   year following the election, the appropriate number of directors
 111-4   shall be elected.
 111-5         SECTION 3.0409.  LIMITATION ON TAXATION.  The district may
 111-6   levy property taxes at a rate not to exceed 20 cents on each $100
 111-7   of assessed valuation to pay any part of the bonds or notes issued
 111-8   by the district if the authority to impose property taxes under
 111-9   this part is approved by a majority of the voters voting at a
111-10   confirmation election under Section 3.0407 of this part or at a
111-11   separate election called for that purpose by the board of
111-12   directors.
111-13         SECTION 3.0410.  VALIDATION.  All past acts of the district
111-14   are validated and confirmed.
111-15         SECTION 3.0411.  APPLICABILITY.  Section 3.0410 of this part
111-16   does not apply to any matter that is the subject of litigation on
111-17   the effective date of this part.
111-18         SECTION 3.0412.  EXPIRATION.  If the creation of the district
111-19   is not confirmed at a confirmation election held under Section
111-20   3.0407 of this part before September 1, 2003, the district is
111-21   dissolved and this part expires on that date.
111-22          PART 5.  LOST PINES GROUNDWATER CONSERVATION DISTRICT
111-23         SECTION 3.0501.  RATIFICATION OF CREATION.  The creation by
111-24   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
111-25   of the Lost Pines Groundwater Conservation District in Bastrop and
111-26   Lee counties is ratified as required by Section 15(a) of that
 112-1   chapter, subject to approval at a confirmation election under
 112-2   Section 3.0507 of this part.
 112-3         SECTION 3.0502.  DEFINITIONS.  In this part:
 112-4               (1)  "District" means the Lost Pines Groundwater
 112-5   Conservation District.
 112-6               (2)  "Public utility" means any person, corporation,
 112-7   public utility, water supply or sewer service corporation,
 112-8   municipality, political subdivision, or agency operating,
 112-9   maintaining, or controlling facilities in the state for providing
112-10   potable water service for compensation.
112-11         SECTION 3.0503.  BOUNDARIES.  The boundaries of the district
112-12   are coextensive with the boundaries of Bastrop and Lee counties,
112-13   Texas.
112-14         SECTION 3.0504.  POWERS.  (a)  The district has all of the
112-15   rights, powers, privileges, authority, functions, and duties
112-16   provided by the general law of the state, including Chapter 36,
112-17   Water Code, applicable to groundwater conservation districts
112-18   created under Section 59, Article XVI, Texas Constitution.  This
112-19   part prevails over any provision of general law that is in conflict
112-20   or inconsistent with this part, including any provision of Chapter
112-21   1331, Acts of the 76th Legislature, Regular Session, 1999.
112-22         (b)  Notwithstanding Subsection (a) of this section, the
112-23   following provisions prevail over a conflicting or inconsistent
112-24   provision of this part:
112-25               (1)  Sections 36.1071-36.108, Water Code;
112-26               (2)  Sections 36.159-36.161, Water Code; and
 113-1               (3)  Subchapter I, Chapter 36, Water Code.
 113-2         (c)  The district may not impose a tax.  The district may
 113-3   assess  regulatory pumping fees for water produced in or exported
 113-4   from the district.  The regulatory pumping fees the district
 113-5   assesses for water for crop or livestock production or other
 113-6   agricultural uses may not exceed 20 percent of the rate applied to
 113-7   water for municipal uses.  Regulatory pumping fees based on the
 113-8   amount of water withdrawn from a well may not exceed:
 113-9               (1)  $1 per acre-foot for water used for the purpose of
113-10   irrigating agricultural crops; or
113-11               (2)  17 cents per thousand gallons for water used for
113-12   any other purpose.
113-13         (d)  The district may adopt a rule exempting a well that is
113-14   not capable of producing more than 50,000 gallons of groundwater a
113-15   day from a permit requirement, a fee, or a restriction on
113-16   production.
113-17         SECTION 3.0505.  GROUNDWATER WELLS UNDER JURISDICTION OF
113-18   RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
113-19   within the district under permits issued by the Railroad Commission
113-20   of Texas are under the exclusive jurisdiction of the commission and
113-21   are exempt from regulation by the district.
113-22         (b)  Groundwater produced in an amount authorized by a
113-23   railroad commission permit may be used within or exported from the
113-24   district without obtaining a permit from the district.
113-25         (c)  To the extent groundwater production exceeds railroad
113-26   commission authorization, the holder of the commission permit shall
 114-1   apply to the district for appropriate permits for the excess
 114-2   production and shall be subject to the applicable regulatory fees.
 114-3         (d)  Groundwater produced from wells under the jurisdiction
 114-4   of the railroad commission is generally exempt from water district
 114-5   fees.  However, the district may impose either a pumping fee or an
 114-6   export fee on groundwater produced from an otherwise exempt mine
 114-7   well that is used for municipal purposes or by a public utility.
 114-8   Any fee imposed by the district under this subsection may not
 114-9   exceed the fee imposed on other groundwater producers in the
114-10   district.
114-11         SECTION 3.0506.  BOARD OF DIRECTORS.  (a)  The district is
114-12   governed by a board of 10 directors.
114-13         (b)  Five directors shall be appointed from Bastrop County by
114-14   the county judge of Bastrop County and five directors shall be
114-15   appointed from Lee County by the county judge of Lee County.
114-16         (c)  Temporary directors serve until their successors are
114-17   appointed and have qualified.
114-18         (d)  The temporary directors shall draw lots to determine:
114-19               (1)  which three directors from each county will serve
114-20   four-year terms that expire December 31, 2005; and
114-21               (2)  which two directors from each county will serve
114-22   two-year terms that expire December 31, 2003.
114-23         (e)  In each subsequent second year following the initial
114-24   appointment of directors, the appropriate number of directors shall
114-25   be appointed.
114-26         (f)  Except as provided by Subsection (d) of this section,
 115-1   directors serve staggered four-year terms.
 115-2         (g)  Directors may serve consecutive terms.
 115-3         (h)  Each director must qualify to serve as director in the
 115-4   manner provided by Section 36.055, Water Code.
 115-5         (i)  A director serves until the director's successor has
 115-6   qualified.
 115-7         (j)  If a vacancy occurs on the board of directors, the board
 115-8   may appoint a director to serve the remainder of the term.
 115-9         (k)  A director may receive fees of office as provided by
115-10   Section 36.060, Water Code, and is entitled to reimbursement for
115-11   reasonable actual expenses incurred in performing duties as a
115-12   director.
115-13         SECTION 3.0507.  INITIAL MEETING AND CONFIRMATION ELECTION.
115-14   (a)  As soon as practicable after September 1, 2001, the temporary
115-15   board of directors shall meet to set the date for and call the
115-16   confirmation election.  The directors shall hold the meeting in
115-17   conjunction with the regularly scheduled meeting of the directors.
115-18         (b)  The election shall be held on the authorized election
115-19   date in November if the United States Department of Justice has
115-20   precleared this part by that time.  If this part has not been
115-21   precleared by the November election date, the confirmation election
115-22   shall be held at the next authorized election date.  The district
115-23   shall contract with the county clerks of Bastrop and Lee counties
115-24   to conduct the election.
115-25         (c)  Except as provided by this section, the confirmation
115-26   election must be conducted as provided by Sections 36.017 and
 116-1   36.018, Water Code, and the Election Code.
 116-2         (d)  If a majority of the votes cast at an election held
 116-3   under this section is against the confirmation of the district, the
 116-4   temporary directors may not call another election under this
 116-5   section before the first anniversary of that election.
 116-6         SECTION 3.0508.  STATUTORY INTERPRETATION.  Except as
 116-7   otherwise provided by this part, if there is a conflict between
 116-8   this part and Chapter 36, Water Code, this part controls.
 116-9         SECTION 3.0509.  REGIONAL COOPERATION.  The district shall:
116-10               (1)  adopt a management plan detailing proposed efforts
116-11   of the district to cooperate with other groundwater conservation
116-12   districts;
116-13               (2)  participate as needed in coordination meetings
116-14   with adjacent groundwater conservation districts that share one or
116-15   more aquifers with the district;
116-16               (3)  coordinate the collection of data with adjacent
116-17   groundwater conservation districts in such a way as to achieve
116-18   relative uniformity of data type and quality;
116-19               (4)  provide groundwater level information to adjacent
116-20   groundwater conservation districts;
116-21               (5)  investigate any groundwater pollution to identify
116-22   the pollution's source;
116-23               (6)  notify adjacent groundwater conservation districts
116-24   and all appropriate agencies of any groundwater pollution detected
116-25   and the source of pollution identified;
116-26               (7)  provide to adjacent groundwater conservation
 117-1   districts annually an inventory of water wells in the district and
 117-2   an estimate of groundwater production within the district; and
 117-3               (8)  include adjacent groundwater conservation
 117-4   districts on mailing lists for district newsletters and information
 117-5   regarding seminars, public education events, news articles, and
 117-6   field days.
 117-7         SECTION 3.0510.  EXPIRATION.  If the creation of this
 117-8   district is not confirmed at a confirmation election held under
 117-9   Section 3.0507 of this part before September 1, 2005, this part
117-10   expires on that date.
117-11           PART 6.  MCMULLEN GROUNDWATER CONSERVATION DISTRICT
117-12         SECTION 3.0601.  RATIFICATION OF CREATION.  The creation by
117-13   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
117-14   of the McMullen Groundwater Conservation District in McMullen
117-15   County is ratified as required by Section 15(a) of that chapter,
117-16   subject to approval at a confirmation election under Section 3.0607
117-17   of this part.
117-18         SECTION 3.0602.  DEFINITION.  In this part, "district" means
117-19   the McMullen Groundwater Conservation District.
117-20         SECTION 3.0603.  BOUNDARIES.  The boundaries of the district
117-21   are coextensive with the boundaries of McMullen County.
117-22         SECTION 3.0604.  GENERAL POWERS.  (a)  The district has all
117-23   of the rights, powers, privileges, authority, functions, and duties
117-24   provided by the general law of the state, including Chapter 36,
117-25   Water Code, applicable to groundwater conservation districts
117-26   created under Section 59, Article XVI, Texas Constitution.  This
 118-1   part prevails over any provision of general law that is in conflict
 118-2   or inconsistent with this part, including any provision of Chapter
 118-3   1331, Acts of the 76th Legislature, Regular Session, 1999.
 118-4         (b)  The rights, powers, privileges, authority, functions,
 118-5   and duties of the district are subject to the continuing right of
 118-6   supervision of the state to be exercised by and through the Texas
 118-7   Natural Resource Conservation Commission.
 118-8         (c)  Notwithstanding Subsection (a) of this section, the
 118-9   following provisions prevail over a conflicting or inconsistent
118-10   provision in this part:
118-11               (1)  Sections 36.1071-36.108, Water Code;
118-12               (2)  Sections 36.159-36.161, Water Code; and
118-13               (3)  Subchapter I, Chapter 36, Water Code.
118-14         SECTION 3.0605.  BOARD OF DIRECTORS.  (a)  The district is
118-15   governed by a board of five directors.
118-16         (b)  Temporary directors serve until initial directors are
118-17   elected under Section 3.0607 of this part.
118-18         (c)  Initial directors serve until permanent directors are
118-19   elected under Section 3.0608 of this part.
118-20         (d)  Permanent directors serve staggered four-year terms.
118-21         (e)  Each director must qualify to serve as director in the
118-22   manner provided by Section 36.055, Water Code.
118-23         (f)  A person is not eligible to serve as an initial or
118-24   permanent director unless the person owns land in the district.
118-25         (g)  A director serves until the director's successor has
118-26   qualified.
 119-1         (h)  If there is a vacancy on the board, the remaining
 119-2   directors shall appoint a director to serve the remainder of the
 119-3   term.
 119-4         SECTION 3.0606.  METHOD OF ELECTING DIRECTORS.  (a)  The
 119-5   directors of the district shall be elected according to the
 119-6   commissioners precinct method as provided by this section.
 119-7         (b)  One director shall be elected by the voters of the
 119-8   entire district and one director shall be elected from each county
 119-9   commissioners precinct by the voters of that precinct.
119-10         (c)  To be qualified as a candidate for or to serve as
119-11   director at large, a person must be a registered voter in the
119-12   district.  To be a candidate for or to serve as director from a
119-13   county commissioners precinct, a person must be a registered voter
119-14   of that precinct.
119-15         (d)  A person shall indicate on the application for a place
119-16   on the ballot:
119-17               (1)  the precinct that the person seeks to represent;
119-18   or
119-19               (2)  that the person seeks to represent the district at
119-20   large.
119-21         (e)  At the first election after the county commissioners
119-22   precincts are redrawn under Section 18, Article V, Texas
119-23   Constitution, four new directors shall be elected to represent the
119-24   newly redrawn precincts.  The directors elected shall draw lots to
119-25   determine which two newly elected directors serve two-year terms
119-26   and which two directors serve four-year terms.
 120-1         SECTION 3.0607.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
 120-2   (a)  The temporary board of directors shall call and hold an
 120-3   election to confirm establishment of the district and to elect
 120-4   initial directors.
 120-5         (b)  At the confirmation and initial directors election, the
 120-6   temporary board of directors shall have placed on the ballot the
 120-7   names of the persons serving as temporary directors who intend to
 120-8   run for an initial director position and are qualified to be a
 120-9   candidate under Section 3.0606 of this part together with the name
120-10   of any candidate filing for an initial director position and blank
120-11   spaces to write in the names of other persons.
120-12         (c)  If the district is created at the election, the
120-13   temporary board of directors, at the time the vote is canvassed,
120-14   shall:
120-15               (1)  declare the qualified person who receives the most
120-16   votes for each position to be elected as the initial director for
120-17   that position; and
120-18               (2)  include the results of the initial directors
120-19   election in the district's election report to the Texas Natural
120-20   Resource Conservation Commission.
120-21         (d)  Section 41.001(a), Election Code, does not apply to a
120-22   confirmation and initial directors election held as provided by
120-23   this section.
120-24         (e)  Except as provided by this section, a confirmation and
120-25   initial directors election must be conducted as provided by
120-26   Sections 36.017(b)-(h), Water Code, and the Election Code.
 121-1         (f)  If a majority of the votes cast at an election held
 121-2   under this section is against the confirmation of the district, the
 121-3   temporary directors may not call another election under this
 121-4   section before the first anniversary of that election.
 121-5         SECTION 3.0608.  ELECTION OF PERMANENT DIRECTORS.  (a)  On
 121-6   the first Saturday in October of the second year after the year in
 121-7   which the district is authorized to be created at a confirmation
 121-8   election, an election shall be held in the district for the
 121-9   election of directors from county commissioners precincts one and
121-10   three, each of whom serves a two-year term, and directors from
121-11   county commissioners precincts two and four and the director at
121-12   large, each of whom serves a four-year term.
121-13         (b)  On the first Saturday in October of each subsequent
121-14   second year following the election, the appropriate number of
121-15   directors shall be elected to the board, each of whom serves a
121-16   four-year term.
121-17         SECTION 3.0609.  LIMITATION ON TAXATION.  The district may
121-18   not impose an ad valorem tax at a rate that exceeds five cents on
121-19   the $100 valuation of taxable property in the district.
121-20         SECTION 3.0610.  STATUTORY INTERPRETATION.  Except as
121-21   otherwise provided by this part, if there is a conflict between
121-22   this part and Chapter 36, Water Code, this part controls.
121-23         SECTION 3.0611.  EXPIRATION.  If the creation of the district
121-24   is not confirmed at a confirmation election held under Section
121-25   3.0607 of this part before September 1, 2003, this part expires on
121-26   that date.
 122-1         PART 7.  MIDDLE PECOS GROUNDWATER CONSERVATION DISTRICT
 122-2         SECTION 3.0701.  RATIFICATION OF CREATION.  The creation by
 122-3   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 122-4   of the Middle Pecos Groundwater Conservation District in Pecos
 122-5   County is ratified, as required by Section 15(a) of that chapter,
 122-6   subject to approval at a confirmation election under Section 3.0707
 122-7   of this part.
 122-8         SECTION 3.0702.  DEFINITION.  In this part, "district" means
 122-9   the Middle Pecos Groundwater Conservation District.
122-10         SECTION 3.0703.  BOUNDARIES.  The boundaries of the district
122-11   are coextensive with the boundaries of Pecos County.
122-12         SECTION 3.0704.  GENERAL POWERS.  (a)  The district has all
122-13   of the rights, powers, privileges, authority, functions, and duties
122-14   provided by the general law of this state, including Chapter 36,
122-15   Water Code, applicable to groundwater conservation districts
122-16   created under Section 59, Article XVI, Texas Constitution.  This
122-17   part prevails over any provision of general law that is in conflict
122-18   or inconsistent with this part, including any provision of Chapter
122-19   1331, Acts of the 76th Legislature, Regular Session, 1999.
122-20         (b)  Notwithstanding Subsection (a) of this section, the
122-21   following provisions prevail over a conflicting or inconsistent
122-22   provision of this part:
122-23               (1)  Sections 36.1071-36.108, Water Code;
122-24               (2)  Sections 36.159-36.161, Water Code; and
122-25               (3)  Subchapter I, Chapter 36, Water Code.
122-26         (c)  Section 36.121, Water Code, does not apply to the
 123-1   district.
 123-2         (d)  The rights, powers, privileges, authority, functions,
 123-3   and duties of the district are not subject to the continuing right
 123-4   of supervision of the state through the Texas Natural Resource
 123-5   Conservation Commission.
 123-6         SECTION 3.0705.  BOARD OF DIRECTORS.  (a)  The district is
 123-7   governed by a board of 11 directors.
 123-8         (b)  Temporary directors serve until initial directors are
 123-9   elected under Section 3.0707 of this part.
123-10         (c)  Initial directors serve until permanent directors are
123-11   elected under Section 3.0708 of this part.
123-12         (d)  Permanent directors serve staggered four-year terms.
123-13         (e)  Each director must qualify to serve as director in the
123-14   manner provided by Section 36.055, Water Code.
123-15         (f)  A director serves until the director's successor has
123-16   qualified.
123-17         (g)  If there is a vacancy on the board, the remaining
123-18   directors shall appoint a director to serve the remainder of the
123-19   term.  If at any time there are fewer than three qualified
123-20   directors, the Pecos County Commissioners Court shall appoint the
123-21   necessary number of persons to fill all the vacancies on the board.
123-22         (h)  A director may not receive a salary or other
123-23   compensation for service as a director but may be reimbursed for
123-24   actual expenses of attending meetings at the rate in effect for
123-25   employees of Pecos County.
123-26         SECTION 3.0706.  METHOD OF ELECTING DIRECTORS.  (a)  The
 124-1   directors of the district shall be elected according to the method
 124-2   provided by this section.
 124-3         (b)  One director shall be elected by the qualified voters of
 124-4   the entire district, two directors shall be elected from each
 124-5   county commissioners precinct by the qualified voters of that
 124-6   precinct, one director shall be elected from the city of Iraan by
 124-7   the qualified voters of that city, and one director shall be
 124-8   elected from the city of Fort Stockton by the qualified voters of
 124-9   that city.
124-10         (c)  To be qualified to be a candidate for or to serve as a
124-11   director at large, a person must be a registered voter in the
124-12   district.  To be a candidate for or to serve as director from a
124-13   county commissioners precinct or a city, a person must be a
124-14   registered voter of that precinct or city, as applicable.
124-15         (d)  A person shall indicate on the application for a place
124-16   on the ballot:
124-17               (1)  the precinct or city that the person seeks to
124-18   represent; or
124-19               (2)  that the person seeks to represent the district at
124-20   large.
124-21         (e)  At the first election after the county commissioners
124-22   precincts are redrawn under Section 18, Article V, Texas
124-23   Constitution, eight new directors shall be elected to represent the
124-24   precincts.  The directors elected shall draw lots to determine
124-25   which four directors serve two-year terms and which four directors
124-26   serve four-year terms.
 125-1         SECTION 3.0707.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
 125-2   (a)  The temporary board of directors shall call and hold an
 125-3   election to confirm establishment of the district and to elect
 125-4   initial directors.
 125-5         (b)  At the confirmation and initial directors election, the
 125-6   temporary board of directors shall have placed on the ballot the
 125-7   name of any candidate filing for an initial director position and
 125-8   blank spaces to write in the names of other persons.  A temporary
 125-9   director who is qualified to be a candidate under Sections 3.0705
125-10   and 3.0706 of this part may file for an initial director position.
125-11         (c)  Section 41.001(a), Election Code, does not apply to a
125-12   confirmation and initial directors election held as provided by
125-13   this section.
125-14         (d)  Except as provided by this section, a confirmation and
125-15   initial directors election must be conducted as provided by
125-16   Sections 36.017(b)-(h), Water Code, and the Election Code.
125-17         (e)  The elected initial directors shall draw lots to
125-18   determine their terms.  One director from each county commissioners
125-19   precinct and the director from the district at large serve terms
125-20   that expire on the date of the first election held under Section
125-21   3.0708 of this part.  The remaining directors serve terms that
125-22   expire on the date of the second election held under Section 3.0708
125-23   of this part.
125-24         (f)  If the majority of the votes cast at an election held
125-25   under this section is against the confirmation of the district, the
125-26   temporary directors may call another election under this section
 126-1   not later than August 31, 2003.
 126-2         SECTION 3.0708.  ELECTION OF DIRECTORS.  On the first
 126-3   Saturday in May of the first even-numbered year after the year in
 126-4   which the district is authorized to be created at a confirmation
 126-5   election and on the first Saturday in May of each subsequent second
 126-6   year, an election shall be held in the district to elect the
 126-7   appropriate number of directors.
 126-8         SECTION 3.0709.  EXPIRATION.  If the creation of the district
 126-9   is not confirmed at a confirmation election held under Section
126-10   3.0707 of this part before September 1, 2003, the district is
126-11   dissolved and this part expires on that date.
126-12          PART 8.  RED SANDS GROUNDWATER CONSERVATION DISTRICT
126-13         SECTION 3.0801.  RATIFICATION OF CREATION.  The creation by
126-14   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
126-15   of the Red Sands Groundwater Conservation District in Hidalgo
126-16   County is ratified as required by Section 15(a) of that chapter,
126-17   subject to approval at a confirmation election under Section 3.0808
126-18   of this part.
126-19         SECTION 3.0802.  DEFINITION.  In this part, "district" means
126-20   the Red Sands Groundwater Conservation District.
126-21         SECTION 3.0803.  BOUNDARIES.  The district includes all of
126-22   the territory contained in the following described area:
126-23   A 19,232 acre tract more or less out of San Salvador Del Tule Grant
126-24   as recorded in Volume 10, Page 58 of the Hidalgo County, Texas map
126-25   records and out of the Santa Anita Grant as recorded in Volume 7,
126-26   Page 38 of the Hidalgo County, Texas map records.
 127-1   Commencing at the Southeast Corner of this here in described
 127-2   boundary tract, said point being the intersection of the centerline
 127-3   of U.S. Highway 281 and the centerline of Farm to Market Road
 127-4   number 490 (F.M. 490) (West Hargill Road) as shown in the map of
 127-5   San Salvador Del Tule Grant as recorded in Volume 10, Page 58 of
 127-6   the Hidalgo County map records.  Said point is also the point of
 127-7   beginning.
 127-8   Thence, Westerly along the center line of the F.M. 490, an
 127-9   approximate distance of 18,400 feet to a point on the West line of
127-10   San Salvador Del Tule Grant, said point also being the intersection
127-11   of the centerline of F.M. 490 and the West line of the San Salvador
127-12   Del Tule Grant,
127-13   Thence, Northerly along the West line of the San Salvador Del Tule
127-14   Grant and the East line of the Santa Anita Grant at an approximate
127-15   distance of 21,300 feet to a point, said point being an inside
127-16   corner of this herein described tract, and also being the Southeast
127-17   corner of Redland Vineyards Subdivision as recorded in Volume 4,
127-18   Page 51 of the Hidalgo County map records,
127-19   Thence, Westerly along the South line of the Redland Vineyards
127-20   Subdivision, an approximate distance of 4,238 feet to a point, said
127-21   point being an outside corner of this herein described tract, said
127-22   point also being the Southwest corner of the Redland Vineyard
127-23   Subdivision,
127-24   Thence, Northerly with the West line of Redland Vineyards
127-25   Subdivision, at approximately 4,590.50 feet past a point, said
127-26   point being the Northwest corner of Redland Vineyard Subdivision,
 128-1   and the Southwest corner of Delbridge Subdivision as recorded in
 128-2   Volume 5, Page 11, Hidalgo County map records, and continuing
 128-3   Northerly along the West line of Delbridge Subdivision for an
 128-4   approximate total distance of 6,646 feet to a point, said point
 128-5   being an inside corner of this herein described tract, and also
 128-6   being the Northwest corner of Delbridge Subdivision,
 128-7   Thence, Westerly along the South line of a 196.37 acres tract,
 128-8   known as the A.B. De Kock Tract, an approximate distance of 3,500
 128-9   feet past the Southeast corner of share 4, out of the 8,374.70 acre
128-10   tract partition out of the Santa Anita Grant as recorded in Volume
128-11   7, Page 38, in the Hidalgo County map records and continuing
128-12   Westerly for an approximate total distance of 6,500 feet to a
128-13   point, said point being an outside corner of this herein described
128-14   tract and also being the Southwest corner of share 4,
128-15   Thence, Northerly along the West line of share 4, an approximate
128-16   total distance of 19,143 feet to a point, said point being the
128-17   Northwest corner of this herein described tracts and, the
128-18   intersection of the West line of share 4 and the centerline of Farm
128-19   to Market Road number 1017, (F.M. 1017)
128-20   Thence, in a Southeasterly direction, with the Right-of-Way
128-21   centerline of Farm to Market Road number 1017 (F.M. 1017) an
128-22   approximate total distance of 27,800 feet to a point, said point
128-23   being the Northeast corner of this herein described tract, and also
128-24   being the intersection of the centerline of F.M. 1017 Right-of-Way
128-25   and the center line of the U.S. Highway 281 Right-Of-Way,
128-26   Thence, in a Southerly direction, with the centerline of U.S.
 129-1   Highway 281 Right-Of-Way, an approximate distance of 7,500 feet
 129-2   past Floral Road, and at approximate 21,700 feet past Red Gate Road
 129-3   and at approximate 29,700 feet past Laguna Seca Road and for an
 129-4   approximate total distance of 39,300 feet to the point of beginning
 129-5   of this here in described tract, said tract contains 19,232 Acres,
 129-6   More or Less.
 129-7         SECTION 3.0804.  FINDINGS RELATIVE TO BOUNDARIES.  The
 129-8   legislature finds that the boundaries and field notes of the
 129-9   district form a closure.  A mistake in the field notes or in the
129-10   copying of the field notes in the legislative process does not
129-11   affect the organization, existence, or validity of the district,
129-12   the right of the district to levy and collect taxes, or the
129-13   legality or operation of the district or its governing body.
129-14         SECTION 3.0805.  GENERAL POWERS.  (a)  Except as provided by
129-15   this part, the district has all of the rights, powers, privileges,
129-16   authority, functions, and duties provided by the general law of the
129-17   state, including Chapter 36, Water Code, applicable to groundwater
129-18   conservation districts created under Section 59, Article XVI, Texas
129-19   Constitution.  This part prevails over any provision of general law
129-20   that is in conflict or inconsistent with this part, including any
129-21   provision of Chapter 1331, Acts of the 76th Legislature, Regular
129-22   Session, 1999.
129-23         (b)  The rights, powers, privileges, authority, functions,
129-24   and duties of the district are subject to the continuing right of
129-25   supervision of the state, to be exercised by and through the Texas
129-26   Natural Resource Conservation Commission.
 130-1         (c)  Chapter 49, Water Code, does not apply to the district.
 130-2         (d)  Notwithstanding Subsection (a) of this section, the
 130-3   following provisions prevail over a conflicting or inconsistent
 130-4   provision in this part:
 130-5               (1)  Sections 36.1071-36.108, Water Code;
 130-6               (2)  Sections 36.159-36.161, Water Code; and
 130-7               (3)  Subchapter I, Chapter 36, Water Code.
 130-8         SECTION 3.0806.  BOARD OF DIRECTORS.  (a)  The district is
 130-9   governed by a board of five directors, each elected at large to one
130-10   of five numbered places.
130-11         (b)  To qualify to serve as a director for places one through
130-12   four, an individual must own real property in and reside in the
130-13   district.  An individual serving as a director for place five must
130-14   own real property in the district but is not required to reside in
130-15   the district.
130-16         (c)  Each director must qualify to serve as director in the
130-17   manner provided by Section 36.055, Water Code.
130-18         (d)  Permanent directors serve staggered three-year terms.
130-19         (e)  A director serves until the director's successor has
130-20   qualified.
130-21         (f)  A vacancy in the office of director shall be filled by
130-22   appointment of the board of directors until the next election of
130-23   directors, at which election a person shall be elected to fill the
130-24   position.  If the position is not scheduled to be filled at the
130-25   election, the person elected to fill the position shall serve only
130-26   for the remainder of the unexpired term.
 131-1         (g)  An appointed director who is qualified to serve as a
 131-2   director under Subsection (b) of this section is eligible to run
 131-3   for election to the board of directors.
 131-4         SECTION 3.0807.  TEMPORARY DIRECTORS.  (a)  The temporary
 131-5   board of directors is composed of:
 131-6               (1)  Lucas Hinojosa;
 131-7               (2)  Becky Guerra;
 131-8               (3)  Arcadio Guerra;
 131-9               (4)  Elizabeth Ann Sweet; and
131-10               (5)  John Cozad.
131-11         (b)  The temporary directors are not required to meet the
131-12   eligibility requirements of permanent directors.
131-13         (c)  Temporary directors serve until permanent directors are
131-14   elected at the confirmation election under Section 3.0808 of this
131-15   part.
131-16         SECTION 3.0808.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
131-17   (a)  The temporary board of directors shall call and hold an
131-18   election to confirm establishment of the district and to elect
131-19   initial directors.
131-20         (b)  At the confirmation and initial directors election, the
131-21   temporary board of directors shall have placed on the ballot the
131-22   names of the candidates for each of the five numbered positions and
131-23   blank spaces to write in the names of other persons.  Names on the
131-24   ballot may include persons serving as temporary directors who
131-25   intend to run for an initial director position together with the
131-26   name of any candidate filing for an initial director position.
 132-1         (c)  If a majority of the votes cast at the election are in
 132-2   favor of the creation of the district, the temporary board of
 132-3   directors shall declare the district created.  If a majority of the
 132-4   votes cast at the election are against the creation of the
 132-5   district, the temporary board of directors shall declare the
 132-6   district defeated.  The temporary board of directors shall file a
 132-7   copy of the election results with the Texas Natural Resource
 132-8   Conservation Commission.
 132-9         (d)  If a majority of the votes cast at the election are
132-10   against the creation of the district, the temporary board of
132-11   directors may not call another election under this section before
132-12   the first anniversary of the date of the election.
132-13         (e)  If the creation of the district is confirmed at the
132-14   election, the temporary board of directors, at the time the vote is
132-15   canvassed, shall:
132-16               (1)  declare the qualified person who receives the most
132-17   votes for each position to be elected as the initial director for
132-18   that position; and
132-19               (2)  include the results of the initial directors
132-20   election in the district's election report to the Texas Natural
132-21   Resource Conservation Commission.
132-22         (f)  The initial directors shall draw lots to determine their
132-23   terms so that:
132-24               (1)  one director serves a one-year term that expires
132-25   on the anniversary of the date the initial directors were elected;
132-26               (2)  two directors serve two-year terms that expire on
 133-1   the anniversary of the date the initial directors were elected; and
 133-2               (3)  two directors serve three-year terms that expire
 133-3   on the anniversary of the date the initial directors were elected.
 133-4         (g)  Section 41.001(a), Election Code, does not apply to a
 133-5   confirmation and initial directors election held as provided by
 133-6   this section.
 133-7         (h)  Except as provided by this section, a confirmation
 133-8   election must be conducted as provided by Sections 36.017(b)-(h),
 133-9   Water Code, and the Election Code.
133-10         SECTION 3.0809.  ELECTION OF PERMANENT DIRECTORS.  Beginning
133-11   in the first year after the year in which the district is
133-12   authorized to be created at a confirmation election, the board of
133-13   directors shall call an election to be held in the district on the
133-14   first Saturday of the month in which the initial directors were
133-15   elected under Section 3.0808 of this part and every year after that
133-16   date to elect the appropriate number of directors to the board.
133-17         SECTION 3.0810.  ELIGIBLE DISTRICT VOTERS.  (a)  Any person
133-18   qualified to vote under the Election Code who resides in the
133-19   district is eligible to vote in district elections.
133-20         (b)  Notwithstanding Subsection (a) of this section,
133-21   nonresidents of the district who own real property in the district
133-22   are eligible to vote in district elections.
133-23         SECTION 3.0811.  TAXATION AUTHORITY.  (a)  The board of
133-24   directors shall impose taxes in accordance with the procedures
133-25   under Subchapter G, Chapter 36, Water Code.
133-26         (b)  Notwithstanding Section 36.201, Water Code, the board of
 134-1   directors may annually impose an ad valorem tax at a rate not to
 134-2   exceed two cents on each $100 of assessed valuation unless a higher
 134-3   rate is approved by a majority of the voters of the district voting
 134-4   at an election called and held for that purpose.
 134-5         SECTION 3.0812.  TRANSPORTATION OF GROUNDWATER.  (a)  The
 134-6   board of directors may adopt rules as provided by Section 36.122,
 134-7   Water Code, requiring a permit to transport district groundwater
 134-8   outside the district.  The board of directors shall authorize the
 134-9   transportation of groundwater for use outside the district if the
134-10   board determines that the use is in the public interest.  The board
134-11   of directors may:
134-12               (1)  designate uses of water that are in the public
134-13   interest; and
134-14               (2)  establish criteria for permits issued under the
134-15   rules.
134-16         (b)  Transportation projects for the use of groundwater
134-17   outside the district that began before September 1, 2001, may
134-18   continue without a permit if the use of groundwater is on land
134-19   contiguous to the district's boundaries and is for domestic or
134-20   livestock purposes.
134-21         SECTION 3.0813.  EXPIRATION.  If the creation of the district
134-22   is not confirmed at a confirmation election held under Section
134-23   3.0808 of this part before September 1, 2003, this part expires on
134-24   that date.
134-25           PART 9.  REFUGIO GROUNDWATER CONSERVATION DISTRICT
134-26         SECTION 3.0901.  RATIFICATION OF CREATION.  The creation by
 135-1   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 135-2   of the Refugio Groundwater Conservation District in Refugio County
 135-3   is ratified, as required by Section 15(a) of that chapter, subject
 135-4   to approval at a confirmation election under Section 3.0907 of this
 135-5   part.
 135-6         SECTION 3.0902.  DEFINITION.  In this part, "district" means
 135-7   the Refugio Groundwater Conservation District.
 135-8         SECTION 3.0903.  BOUNDARIES.  The boundaries of the district
 135-9   are coextensive with the boundaries of Refugio County.
135-10         SECTION 3.0904.  GENERAL POWERS.  (a)  The district has all
135-11   of the rights, powers, privileges, authority, functions, and duties
135-12   provided by the general law of this state, including Chapter 36,
135-13   Water Code, applicable to groundwater conservation districts
135-14   created under Section 59, Article XVI, Texas Constitution.  This
135-15   part prevails over any provision of general law that is in conflict
135-16   or inconsistent with this part, including any provision of Chapter
135-17   1331, Acts of the 76th Legislature, Regular Session, 1999.
135-18         (b)  Notwithstanding Subsection (a) of this section, the
135-19   following provisions prevail over a conflicting or inconsistent
135-20   provision of this part:
135-21               (1)  Sections 36.1071-36.108, Water Code;
135-22               (2)  Sections 36.159-36.161, Water Code; and
135-23               (3)  Subchapter I, Chapter 36, Water Code.
135-24         SECTION 3.0905.  BOARD OF DIRECTORS.  (a)  The district is
135-25   governed by a board of five directors.
135-26         (b)  Temporary directors serve until initial directors are
 136-1   elected under Section 3.0907 of this part.
 136-2         (c)  Initial directors serve until permanent directors are
 136-3   elected under Section 3.0908 of this part.
 136-4         (d)  Permanent directors serve staggered four-year terms.
 136-5         (e)  Each director must qualify to serve as director in the
 136-6   manner provided by Section 36.055, Water Code.
 136-7         (f)  A director serves until the director's successor has
 136-8   qualified.
 136-9         (g)  If a director fails to qualify for office or if there is
136-10   at any time a vacancy on the temporary board of directors, the
136-11   commissioners court shall appoint a person to fill the vacancy.
136-12         SECTION 3.0906.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
136-13   PRECINCTS.  (a)  The directors of the district shall be elected
136-14   according to the commissioners precinct method as provided by this
136-15   section.
136-16         (b)  One director shall be elected by the qualified voters of
136-17   the entire district, and one director shall be elected from each
136-18   county commissioners precinct by the qualified voters of that
136-19   precinct.
136-20         (c)  To be qualified to be a candidate for or to serve as
136-21   director at large, a person must be a registered voter in the
136-22   district.  To be a candidate for or to serve as director from a
136-23   county commissioners precinct, a person must be a registered voter
136-24   of that precinct.
136-25         (d)  A person shall indicate on the application for a place
136-26   on the ballot:
 137-1               (1)  the precinct that the person seeks to represent;
 137-2   or
 137-3               (2)  that the person seeks to represent the district at
 137-4   large.
 137-5         (e)  At the first election after the county commissioners
 137-6   precincts are redrawn under Section 18, Article V, Texas
 137-7   Constitution, four new directors shall be elected to represent the
 137-8   precincts.  The directors elected shall draw lots to determine
 137-9   which two directors serve two-year terms and which two directors
137-10   serve four-year terms.
137-11         SECTION 3.0907.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
137-12   (a)  The temporary board of directors shall call and hold an
137-13   election to confirm establishment of the district and to elect
137-14   initial directors.
137-15         (b)  At the confirmation and initial directors election, the
137-16   temporary board of directors shall have placed on the ballot the
137-17   name of any candidate filing for an initial director position and
137-18   blank spaces to write in the names of other persons.  A temporary
137-19   director who is qualified to be a candidate under Sections 3.0905
137-20   and 3.0906 of this part may file for an initial director position.
137-21         (c)  Section 41.001(a), Election Code, does not apply to a
137-22   confirmation and initial directors election held as provided by
137-23   this section.
137-24         (d)  Except as provided by this section, a confirmation and
137-25   initial directors election must be conducted as provided by
137-26   Sections 36.017(b)-(h), Water Code, and the Election Code.
 138-1         SECTION 3.0908.  ELECTION OF DIRECTORS.  (a)  On the first
 138-2   Saturday in May of the first even-numbered year after the year in
 138-3   which the district is authorized to be created at a confirmation
 138-4   election, an election shall be held in the district for the
 138-5   election of three directors to serve four-year terms and two
 138-6   directors to serve two-year terms.
 138-7         (b)  On the first Saturday in May of each subsequent second
 138-8   year following the election, the appropriate number of directors
 138-9   shall be elected.
138-10         SECTION 3.0909.  EXPIRATION.  This part expires on
138-11   September 1, 2003, if, before that date, the establishment of the
138-12   district has not been confirmed at a confirmation election held
138-13   under Section 3.0907 of this part.
138-14      PART 10.  SOUTHEAST TRINITY GROUNDWATER CONSERVATION DISTRICT
138-15         SECTION 3.1001.  PURPOSE.  The purpose of this part is to
138-16   ratify the Southeast Trinity Groundwater Conservation District, a
138-17   locally controlled groundwater district, to protect, recharge, and
138-18   prevent the waste of groundwater and to control subsidence of water
138-19   from the groundwater reservoirs.
138-20         SECTION 3.1002.  RATIFICATION.  (a)  The Southeast Trinity
138-21   Groundwater Conservation District is ratified.
138-22         (b)  The district is a governmental agency and a body politic
138-23   and corporate.
138-24         (c)  The district is created and ratified under and is
138-25   essential to accomplish the purposes of Section 59, Article XVI,
138-26   Texas Constitution.
 139-1         SECTION 3.1003.  BOUNDARIES.  The boundaries of the district
 139-2   are:
 139-3         BEGINNING at the point of intersection of the Bexar County -
 139-4   Comal County - Kendall County line:
 139-5         THENCE following the meanders of the Cibolo Creek, the Bexar
 139-6   County - Comal County line in an Easterly direction to the point of
 139-7   intersection with latitude 29  40':
 139-8         THENCE along 29  40' in a Southeasterly direction to the
 139-9   point of intersection with Farm to Market Road 3009:
139-10         THENCE with the centerline of Farm to Market Road 3009 in a
139-11   Southerly direction to the point of intersection with the
139-12   centerline of Schoenthal Road:
139-13         THENCE with the centerline of Schoenthal Road in a
139-14   Northeasterly direction to the point of intersection with the
139-15   centerline of Farm to Market Road 1863:
139-16         THENCE with the centerline of Farm to Market Road 1863 in an
139-17   Easterly direction to the point of intersection with the centerline
139-18   of Mission Valley Road:
139-19         THENCE with the centerline of Mission Valley Road in a
139-20   Northeasterly direction to the point of intersection with the
139-21   centerline of State Highway 46;
139-22         THENCE with the centerline of State Highway 46 in a
139-23   Northwesterly direction to the point of intersection with the
139-24   centerline of Hueco Springs Loop Road:
139-25         THENCE with the centerline of Hueco Springs Loop Road in a
139-26   Northeasterly then Easterly direction to the point of intersection
 140-1   with the centerline of River Road:
 140-2         THENCE with the centerline of River Road in a Northeasterly
 140-3   direction to the point of intersection with the Guadalupe River at
 140-4   the First Crossing:
 140-5         THENCE following the meanders of the Guadalupe River in a
 140-6   Northerly direction to the point of intersection of the centerlines
 140-7   of the Guadalupe River and Deep Creek:
 140-8         (Note:  the next four paragraphs coincide with the Southern
 140-9   boundary of Comal County Voters Precinct 18)
140-10         THENCE along the meanders of Deep Creek in a Northeasterly
140-11   direction to the point of intersection of the centerline of Deep
140-12   Creek and the South line of the G. F. Lawrence Survey No. 33,
140-13   Abstract No. 358:
140-14         THENCE with the South line of the G. F. Lawrence Survey No.
140-15   33, Abstract No. 358 in a Northeasterly, Southeasterly, and
140-16   Northeasterly direction to the point of intersection of the South
140-17   centerline of Farm to Market Road 306 being at approximately
140-18   Engineers Station 397+98.3:
140-19         THENCE with the centerline of Farm to Market Road 306 in a
140-20   Southeasterly direction to the point of intersection of the
140-21   centerlines of Farm to Market Road 306 and the William Pfeuffer
140-22   private ranch road:
140-23         THENCE with the approximate bearing N 69  E and approximate
140-24   distance 5,000 feet to an angle point in the Comal County - Hays
140-25   County Line:
140-26         THENCE with the Comal County - Hays County line in a
 141-1   Northwesterly direction to the point of intersection of the Comal
 141-2   County - Hays County line with the Comal County - Blanco County
 141-3   line:
 141-4         THENCE with the Comal County - Blanco County line in a
 141-5   Southwesterly direction to the point of intersection of the Comal
 141-6   County - Blanco County - Kendall County line, continuing with the
 141-7   Comal County - Kendall County line in a Southwesterly direction to
 141-8   point of intersection of the Kendall County - Comal County - Bexar
 141-9   County line being the Point of Beginning.
141-10         SECTION 3.1004.  FINDINGS RELATIVE TO BOUNDARIES.  The
141-11   legislature finds that the boundaries and field notes of the
141-12   district form a closure.  A mistake in the field notes or in
141-13   copying the field notes in the legislative process does not affect
141-14   the organization, existence, or validity of the district, the right
141-15   of the district to levy and collect taxes, or the legality or
141-16   operation of the district or its governing body.
141-17         SECTION 3.1005.  DEFINITIONS.  In this part:
141-18               (1)  "District" means the Southeast Trinity Groundwater
141-19   Conservation District;
141-20               (2)  "Board" means the board of directors of the
141-21   district; and
141-22               (3)  "Commission" means the Texas Natural Resource
141-23   Conservation Commission.
141-24         SECTION 3.1006.  FINDING OF BENEFIT.  All of the land and
141-25   other property included within the boundaries of the district will
141-26   benefit from the works and projects that are to be accomplished by
 142-1   the district under powers conferred by Section 59, Article XVI,
 142-2   Texas Constitution.  The district is created to serve a public use
 142-3   and benefit.
 142-4         SECTION 3.1007.  AUTHORITY OF DISTRICT.  (a)  Except as
 142-5   provided by this section or otherwise by this part, the district
 142-6   has the same permitting and general management powers as those
 142-7   granted under Chapter 36, Water Code.
 142-8         (b)  Chapter 49, Water Code, does not apply to the district.
 142-9         (c)  The district has no regulatory jurisdiction over the
142-10   Edwards Aquifer or any surface water supply.
142-11         (d)  The board by rule may impose reasonable fees, including
142-12   fees for groundwater transported out of the district, on each
142-13   groundwater well in the district that is not exempt from regulation
142-14   by the district, based on the amount of water withdrawn from the
142-15   well.  The fees may be assessed annually, based on the size of
142-16   column pipe used in the wells, pump capacity, or actual,
142-17   authorized, or anticipated pumpage, to pay the maintenance and
142-18   operating expenses of the district's regulation of groundwater.
142-19         (e)  Section 36.205(c), Water Code, does not apply to the
142-20   district.
142-21         (f)  The district may assess an ad valorem property tax not
142-22   to exceed seven cents per $100 valuation for administrative,
142-23   operation, and maintenance expenses if approved by a majority of
142-24   the qualified voters voting in an election authorizing the tax.
142-25         (g)  Any district conservation fee paid by a retail public
142-26   utility to the district shall be:
 143-1               (1)  collected by the retail public utility directly as
 143-2   a regulatory fee from the customers of the utility and paid to the
 143-3   district; and
 143-4               (2)  shown as a separate line item on the customer's
 143-5   bill.
 143-6         (h)  Fees shall not be assessed for groundwater withdrawn
 143-7   from the Edwards Aquifer.
 143-8         (i)  The district shall determine which classes of wells are
 143-9   exempt from permitting requirements.
143-10         (j)  The district may not require a permit for:
143-11               (1)  the drilling of or producing from a well either
143-12   drilled, completed, or equipped so that it is capable of producing
143-13   less than 10,000 gallons of water per day; or
143-14               (2)  the drilling of or alteration of the size of a
143-15   well or to restrict the production of a well if the water produced
143-16   or to be produced from the well is or will be used to supply the
143-17   domestic needs of five or fewer households in which a person who is
143-18   a member of each household is either the owner of the well, a
143-19   person related to the owner or to a member of the owner's household
143-20   within the second degree by consanguinity, or an employee of the
143-21   owner.
143-22         (k)  The district may construct according to, implement, and
143-23   maintain best management practices in the district and may engage
143-24   in and promote acceptance of best management practices through
143-25   education efforts sponsored by the district for the purposes of
143-26   water quality and water availability practices such as brush
 144-1   management, recharge enhancement, water and silt detention and
 144-2   retention structures, plugging of abandoned wells, and other
 144-3   treatment measures for the conservation of groundwater resources.
 144-4         SECTION 3.1008.  BOARD OF DIRECTORS.  (a)  The district is
 144-5   governed by a board of five directors.
 144-6         (b)  Temporary directors have been appointed by Comal County
 144-7   Commissioners Court and will serve until initial directors are
 144-8   elected under Section 3.1009 of this part.
 144-9         (c)  The temporary directors are:
144-10               (1)  Cal Perrine;
144-11               (2)  Ernest T. Lee;
144-12               (3)  Jill Sondeen;
144-13               (4)  Larry Hull; and
144-14               (5)  Stovy Bowlin.
144-15         (d)  Initial directors will be elected at a confirmation
144-16   election and will serve until permanent directors are elected under
144-17   Section 3.1010 of this part.
144-18         (e)  Permanent directors serve staggered four-year terms.
144-19         (f)  The directors shall be elected from four precincts, and
144-20   one director will represent the district at large.  No more than
144-21   two precincts may be in a single municipality.
144-22         (g)  A member of the board must reside in and be a registered
144-23   voter in the precinct from which the person is elected or appointed
144-24   if representing a precinct or must reside and be registered to vote
144-25   in the district if representing the district at large.
144-26         (h)  Directors may serve consecutive terms.
 145-1         (i)  In an election for board members, a write-in vote may
 145-2   not be counted unless the name written in appears on the list of
 145-3   write-in candidates.  A declaration of write-in candidacy must be
 145-4   filed not later than 5 p.m. of the 45th day before election day.
 145-5         (j)  Vacancies in the office of director shall be filled by
 145-6   appointment of the board.  If the vacant office is not scheduled
 145-7   for election within the next two years at the time of the
 145-8   appointment, the board shall order an election for the unexpired
 145-9   term to be held as part of the next regularly scheduled directors
145-10   election.  The appointed director's term shall end on qualification
145-11   of the director elected at that election.
145-12         SECTION 3.1009.  CONFIRMATION ELECTION AND ELECTION OF
145-13   INITIAL DIRECTORS.  (a)  As soon as practicable after September 1,
145-14   2001, the temporary board of directors may set the date for, call,
145-15   and hold an election:
145-16               (1)  to confirm establishment of the district;
145-17               (2)  to elect five initial directors; and
145-18               (3)  for the authority to tax.
145-19         (b)  The election may be held on the first authorized
145-20   election date after the United States Department of Justice has
145-21   precleared this part.  The district shall contract with the county
145-22   clerk of Comal County to conduct the election.
145-23         (c)  The elected initial directors shall draw lots to
145-24   determine their terms so that:
145-25               (1)  two of the initial directors serve two-year terms
145-26   that expire on the uniform election date in November of the second
 146-1   year after the date the initial directors were elected; and
 146-2               (2)  the remaining three initial directors serve
 146-3   four-year terms that expire on the uniform election date in
 146-4   November of the fourth year after the year in which the initial
 146-5   directors were elected.
 146-6         (d)  Section 41.001(a), Election Code, does not apply to a
 146-7   confirmation and directors election held as provided by this
 146-8   section.
 146-9         (e)  Except as provided by this section, a confirmation and
146-10   directors election must be conducted as provided by Sections
146-11   36.017(b)-(h), Water Code, and the Election Code.
146-12         (f)  The Comal County Commissioners Court shall pay the
146-13   expenses of conducting the confirmation and initial directors
146-14   election, subject to reimbursement from the district if the
146-15   establishment of the district is confirmed or from available
146-16   revenues, including funds allocated under Section 36.160, Water
146-17   Code, if the establishment of the district is defeated.
146-18         (g)  If the district is defeated, the temporary directors may
146-19   call and hold subsequent elections to confirm establishment of the
146-20   district.  A subsequent election may not be held earlier than the
146-21   first anniversary of the date on which the previous election was
146-22   held.  If the district has not been confirmed at an election held
146-23   under this section before the fourth anniversary of the effective
146-24   date of this part, the district is dissolved on that date, except
146-25   that any debts incurred shall be paid and the organization of the
146-26   district shall be maintained until all debts are paid.
 147-1         SECTION 3.1010.  ELECTION OF REGULAR DIRECTORS.  (a)  On the
 147-2   uniform election date in November of the second year after the year
 147-3   in which the initial directors were elected, an election shall be
 147-4   held in the district to elect two regular directors for the
 147-5   positions of the two initial directors serving two-year terms.
 147-6         (b)  On the uniform election date in November of each
 147-7   subsequent second year following the election held under Subsection
 147-8   (a) of this section, an election shall be held to elect the
 147-9   appropriate number of regular directors to the board.
147-10         SECTION 3.1011.  COORDINATION.  The district may coordinate
147-11   activities with other groundwater districts that regulate the
147-12   Trinity Aquifer for the purposes of conjunctively managing the
147-13   common resource.
147-14         SECTION 3.1012.  MODIFICATION OF DISTRICT.  The district may
147-15   be modified only under Subchapter J, Chapter 36, Water Code, and by
147-16   subsequent acts of the legislature.
147-17         SECTION 3.1013.  STATUTORY INTERPRETATION.  Except as
147-18   otherwise provided by this part, if there is a conflict between
147-19   this part and Chapter 36, Water Code, this part controls.
147-20           PART 11.  TEXANA GROUNDWATER CONSERVATION DISTRICT
147-21         SECTION 3.1101.  RATIFICATION OF CREATION.  The creation by
147-22   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
147-23   of the Texana Groundwater Conservation District in Jackson County
147-24   is ratified as required by Section 15(a) of that chapter, subject
147-25   to approval at a confirmation election under Section 3.1107 of this
147-26   part.
 148-1         SECTION 3.1102.  DEFINITION.  In this part, "district" means
 148-2   the Texana Groundwater Conservation District.
 148-3         SECTION 3.1103.  BOUNDARIES.  The boundaries of the district
 148-4   are coextensive with the boundaries of Jackson County.
 148-5         SECTION 3.1104.  GENERAL POWERS.  (a)  The district has all
 148-6   of the rights, powers, privileges, authority, functions, and duties
 148-7   provided by the general law of the state, including Chapter 36,
 148-8   Water Code, applicable to groundwater conservation districts
 148-9   created under Section 59, Article XVI, Texas Constitution.  This
148-10   part prevails over any provision of general law that is in conflict
148-11   or inconsistent with this part, including any provision of Chapter
148-12   1331, Acts of the 76th Legislature, Regular Session, 1999.
148-13         (b)  Notwithstanding Subsection (a) of this section, the
148-14   following provisions prevail over a conflicting or inconsistent
148-15   provision of this part:
148-16               (1)  Sections 36.1071-36.108, Water Code;
148-17               (2)  Sections 36.159-36.161, Water Code; and
148-18               (3)  Subchapter I, Chapter 36, Water Code.
148-19         SECTION 3.1105.  BOARD OF DIRECTORS.  (a)  The district is
148-20   governed by a board of seven directors.
148-21         (b)  Temporary directors serve until initial directors are
148-22   elected under Section 3.1107 of this part.
148-23         (c)  Initial directors serve until permanent directors are
148-24   elected under Section 3.1108 of this part.
148-25         (d)  Permanent directors serve staggered four-year terms.
148-26         (e)  Each director must qualify to serve as director in the
 149-1   manner provided by Section 36.055, Water Code.
 149-2         (f)  A director serves until the director's successor has
 149-3   qualified.
 149-4         (g)  If there is a vacancy on the board, the remaining
 149-5   directors shall appoint a director to serve the remainder of the
 149-6   term.
 149-7         (h)  A director may not receive a salary or other
 149-8   compensation for service as a director but may be reimbursed for
 149-9   actual expenses of attending meetings at the rate in effect for
149-10   employees of Jackson County.
149-11         SECTION 3.1106.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
149-12   PRECINCTS.  (a)  The directors of the district shall be elected
149-13   according to the commissioners precinct method as provided by this
149-14   section.
149-15         (b)  Three directors shall be elected by the electors of the
149-16   entire district, and one director shall be elected from each county
149-17   commissioners precinct by the electors of that precinct.
149-18         (c)  To be qualified to be a candidate for or to serve as a
149-19   director at large, a person must be a registered voter in the
149-20   district.  To be a candidate for or to serve as director from a
149-21   county commissioners precinct, a person must be a registered voter
149-22   of that precinct.
149-23         (d)  A person shall indicate on the application for a place
149-24   on the ballot:
149-25               (1)  the precinct that the person seeks to represent;
149-26   or
 150-1               (2)  that the person seeks to represent the district at
 150-2   large.
 150-3         (e)  At the first election after the county commissioners
 150-4   precincts are redrawn under Section 18, Article V, Texas
 150-5   Constitution, four new directors shall be elected to represent the
 150-6   precincts.  The directors elected shall draw lots to determine
 150-7   which two directors serve two-year terms and which two directors
 150-8   serve four-year terms.
 150-9         SECTION 3.1107.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
150-10   (a)  The temporary board of directors shall call and hold an
150-11   election to confirm establishment of the district and to elect
150-12   initial directors.
150-13         (b)  At the confirmation and initial directors election, the
150-14   temporary board of directors shall have placed on the ballot the
150-15   name of any candidate filing for an initial director position and
150-16   blank spaces to write in the names of other persons.  A temporary
150-17   director who is qualified to be a candidate under Sections 3.1105
150-18   and 3.1106 of this part may file for an initial director position.
150-19         (c)  Section 41.001(a), Election Code, does not apply to a
150-20   confirmation and initial directors election held as provided by
150-21   this section.
150-22         (d)  Except as provided by this section, a confirmation and
150-23   initial directors election must be conducted as provided by
150-24   Sections 36.017(b)-(h), Water Code, and the Election Code.
150-25         (e)  If the majority of the votes cast at an election held
150-26   under this section is against the confirmation of the district, the
 151-1   temporary directors may not call another election under this
 151-2   section before the first anniversary of that election.
 151-3         SECTION 3.1108.  ELECTION OF DIRECTORS.  (a)  On the first
 151-4   Saturday in May of the first even-numbered year after the year in
 151-5   which the district is authorized to be created at a confirmation
 151-6   election, an election shall be held in the district for the
 151-7   election of two directors at large and two directors representing
 151-8   precincts to serve four-year terms and one director at large and
 151-9   two directors representing precincts to serve two-year terms.
151-10         (b)  On the first Saturday in May of each subsequent second
151-11   year following the election, the appropriate number of directors
151-12   shall be elected.
151-13         SECTION 3.1109.  LIMITATION ON TAXATION.  The district may
151-14   not levy or collect an ad valorem tax at a rate that exceeds two
151-15   cents on each $100 valuation of taxable property in the district.
151-16         SECTION 3.1110.  CONTRACTS WITH GOVERNMENT ENTITIES.
151-17   (a)  The district may contract with other government entities.
151-18         (b)  The district may contract with other governmental
151-19   entities, including river authorities located in the district, for
151-20   the performance of any or all district functions.  A river
151-21   authority with which the district contracts under this section may
151-22   perform district functions as provided by the contract.
151-23         PART 12.  TRI-COUNTY GROUNDWATER CONSERVATION DISTRICT
151-24         SECTION 3.1201.  RATIFICATION OF CREATION.  The creation by
151-25   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
151-26   of the Tri-County Groundwater Conservation District in Foard,
 152-1   Hardeman, and Wilbarger counties is ratified as required by Section
 152-2   15(a) of that chapter, subject to approval at a confirmation
 152-3   election under Section 3.1207 of this part.
 152-4         SECTION 3.1202.  DEFINITION.  In this part, "district" means
 152-5   the Tri-County Groundwater Conservation District.
 152-6         SECTION 3.1203.  BOUNDARIES.  The boundaries of the district
 152-7   are coextensive with the boundaries of Foard, Hardeman, and
 152-8   Wilbarger counties.
 152-9         SECTION 3.1204.  GENERAL POWERS.  (a)  The district has all
152-10   of the rights, powers, privileges, authority, functions, and duties
152-11   provided by the general law of the state, including Chapter 36,
152-12   Water Code, applicable to groundwater conservation districts
152-13   created under Section 59, Article XVI, Texas Constitution.  This
152-14   part prevails over any provision of general law that is in conflict
152-15   or inconsistent with this part, including any provision of Chapter
152-16   1331, Acts of the 76th Legislature, Regular Session, 1999.
152-17         (b)  Notwithstanding Subsection (a) of this section, the
152-18   following provisions prevail over a conflicting or inconsistent
152-19   provision of this part:
152-20               (1)  Sections 36.107-36.108, Water Code;
152-21               (2)  Sections 36.159-36.161, Water Code; and
152-22               (3)  Subchapter I, Chapter 36, Water Code.
152-23         SECTION 3.1205.  BOARD OF DIRECTORS.  (a)  The district is
152-24   governed by a board of six directors.  Two directors are appointed
152-25   by the commissioners court of each county in the district.
152-26         (b)  Each director must qualify to serve as director in the
 153-1   manner provided by Section 36.055, Water Code.
 153-2         (c)  Directors other than initial directors serve staggered
 153-3   four-year terms.
 153-4         (d)  A director serves until the director's successor has
 153-5   qualified.
 153-6         (e)  If there is a vacancy on the board, the appropriate
 153-7   commissioners court shall appoint a director to serve the remainder
 153-8   of the term.
 153-9         (f)  The appropriate commissioners court shall appoint a
153-10   director to succeed a director on or before the date the director's
153-11   term expires.
153-12         (g)  A director may not receive a salary or other
153-13   compensation for service as a director but may be reimbursed for
153-14   actual expenses of attending meetings.
153-15         SECTION 3.1206.  APPOINTMENT AND TERMS OF INITIAL DIRECTORS.
153-16   (a)  As soon as practicable after September 1, 2001, the
153-17   commissioners courts of Foard, Hardeman, and Wilbarger counties
153-18   shall each appoint two initial directors.
153-19         (b)  The initial directors shall serve terms as follows:
153-20               (1)  the two initial directors appointed by the Foard
153-21   County Commissioners Court shall serve terms expiring February 1,
153-22   2002;
153-23               (2)  the two initial directors appointed by the
153-24   Hardeman County Commissioners Court shall serve terms expiring
153-25   February 1, 2004; and
153-26               (3)  the two initial directors appointed by the
 154-1   Wilbarger County Commissioners Court shall serve terms expiring
 154-2   February 1, 2006.
 154-3         SECTION 3.1207.  CONFIRMATION ELECTION.  (a)  The board of
 154-4   directors shall call and hold an election to confirm the
 154-5   establishment of the district.
 154-6         (b)  Section 41.001(a), Election Code, does not apply to a
 154-7   confirmation election held as provided by this section.
 154-8         (c)  Except as provided by this section, a confirmation
 154-9   election must be conducted as provided by Sections 36.017(b)-(h),
154-10   Water Code, and the Election Code.
154-11         SECTION 3.1208.  TAXING AUTHORITY.  The district may levy and
154-12   collect an ad valorem tax in the district at a rate not to exceed
154-13   one cent on each $100 of assessed valuation.
154-14         SECTION 3.1209.  EXPIRATION.  If the creation of the district
154-15   is not confirmed at a confirmation election held under Section
154-16   3.1207 of this part before September 1, 2003, this part expires on
154-17   that date.
154-18               ARTICLE 4.  WATER INFRASTRUCTURE FINANCING
154-19         SECTION 4.01.  Chapter 15, Water Code, is amended by adding
154-20   Subchapter O to read as follows:
154-21                SUBCHAPTER O.  WATER INFRASTRUCTURE FUND
154-22         Sec. 15.901.  DEFINITIONS.  In this subchapter:
154-23               (1)  "Eligible political subdivision" means:
154-24                     (A)  a municipality;
154-25                     (B)  a county;
154-26                     (C)  a river authority or special law district
 155-1   that is listed in Section 9.010(b);
 155-2                     (D)  a water improvement district;
 155-3                     (E)  an irrigation district;
 155-4                     (F)  a water control and improvement district;
 155-5   and
 155-6                     (G)  a groundwater district with a groundwater
 155-7   management plan certified by the board under Section 36.1072.
 155-8               (2)  "Fund" means the water infrastructure fund.
 155-9               (3)  "Metropolitan statistical area" means an area so
155-10   designated by the United States Office of Management and Budget.
155-11               (4)  "Political subdivision bonds" means bonds or other
155-12   obligations issued by a political subdivision to fund a project and
155-13   purchased by the board from money in the fund.
155-14               (5)  "Project" means any undertaking or work, including
155-15   planning and design activities and work to obtain regulatory
155-16   authority, to conserve, mitigate, convey, and develop water
155-17   resources of the state, including any undertaking or work done
155-18   outside the state that the board determines will result in water
155-19   being available for use in or for the benefit of the state.
155-20         Sec. 15.902.  FINDINGS.  The legislature finds that:
155-21               (1)  the creation of the fund and the administration of
155-22   the fund by the board will encourage the conservation and
155-23   development of the water resources of the state;
155-24               (2)  the use of the fund is in furtherance of the
155-25   public purpose of conserving and developing the water resources of
155-26   the state; and
 156-1               (3)  the use of the fund for the purposes provided by
 156-2   this subchapter is for the benefit of both the state and the
 156-3   political subdivisions to which the board makes financial
 156-4   assistance available in accordance with this subchapter and
 156-5   constitutes a program under, and is in furtherance of the public
 156-6   purposes set forth in, Section 52-a, Article III, Texas
 156-7   Constitution.
 156-8         Sec. 15.903.  WATER INFRASTRUCTURE FUND.  (a)  The water
 156-9   infrastructure fund is created as a special account in the general
156-10   revenue fund to be administered by the board under this subchapter
156-11   and under rules adopted by the board.  The fund shall be available
156-12   to fund the implementation of water projects recommended through
156-13   the state and regional water planning processes under Sections
156-14   16.051 and 16.053.
156-15         (b)  The fund consists of:
156-16               (1)  appropriations from the legislature;
156-17               (2)  the bottled water surcharge, as provided by
156-18   Section 15.013;
156-19               (3)  any other fees or sources of revenue that the
156-20   legislature may dedicate for deposit to the fund;
156-21               (4)  repayments of loans made from the fund;
156-22               (5)  interest earned on money credited to the fund;
156-23               (6)  depository interest allocable to the fund in the
156-24   general revenue fund;
156-25               (7)  money from gifts, grants, or donations to the
156-26   fund;
 157-1               (8)  money from revenue bonds or other sources
 157-2   designated by the board; and
 157-3               (9)  proceeds from the sale of any political
 157-4   subdivision bonds or obligations held in the fund and not otherwise
 157-5   pledged to the discharge, repayment, or redemption of revenue bonds
 157-6   or other bonds, the proceeds of which were placed in the fund.
 157-7         Sec. 15.904.  USE OF WATER INFRASTRUCTURE FUND.  (a)  The
 157-8   board may use the fund:
 157-9               (1)  to make loans to political subdivisions at or
157-10   below market interest rates for projects;
157-11               (2)  to make grants, low-interest loans, or zero
157-12   interest loans to political subdivisions for projects to serve
157-13   areas outside metropolitan statistical areas in order to ensure
157-14   that the projects are implemented, or for projects to serve
157-15   economically distressed areas;
157-16               (3)  to make loans at or below market interest rates
157-17   for planning and design costs, permitting costs, and other costs
157-18   associated with state or federal regulatory activities with respect
157-19   to a project;
157-20               (4)  as a source of revenue or security for the payment
157-21   of principal and interest on bonds issued by the board if the
157-22   proceeds of the sale of the bonds will be deposited in the fund;
157-23   and
157-24               (5)  to pay the necessary and reasonable expenses of
157-25   the board in administering the fund.
157-26         (b)  Funding under Subsection (a)(2) or under Subsection
 158-1   (a)(3) may not exceed 10 percent of the amount of financial
 158-2   assistance budgeted by the board to be made available from the fund
 158-3   in a fiscal year.
 158-4         (c)  Principal and interest payments on loans made under
 158-5   Subsection (a)(3) may be deferred for a maximum of 10 years or
 158-6   until construction of the project is completed, whichever is
 158-7   earlier.
 158-8         Sec. 15.905.  APPROVAL OF APPLICATIONS.  (a)  On review and
 158-9   recommendation by the executive administrator, the board by
158-10   resolution may approve an application if the board finds that:
158-11               (1)  the application and the assistance applied for
158-12   meet the requirements of this subchapter and board rules;
158-13               (2)  the revenue or taxes, or both the revenue and
158-14   taxes, pledged by the applicant will be sufficient to meet all the
158-15   obligations assumed by the political subdivision; and
158-16               (3)  the project will meet water needs in a manner
158-17   consistent with the state and regional water plans as required by
158-18   Section 16.053(j).
158-19         (b)  For an application under this subchapter, a program of
158-20   water conservation through a more effective use of water shall be
158-21   required in the same manner as for approval of an application for
158-22   financial assistance under Section 15.106.
158-23         (c)  The board may deliver funds for the portion of a loan or
158-24   grant for a project relating to surface water development, other
158-25   than for planning and design costs, permitting costs, and other
158-26   costs associated with federal and state regulatory activities with
 159-1   respect to a project, only if the executive administrator makes a
 159-2   written finding:
 159-3               (1)  that the applicant proposing surface water
 159-4   development has the necessary water rights authorizing it to
 159-5   appropriate and use the water that the project will provide; or
 159-6               (2)  that an applicant proposing groundwater
 159-7   development has the right to use water that the project will
 159-8   provide.
 159-9         Sec. 15.906.  APPLICABLE PROVISIONS.  The provisions of
159-10   Subchapter E, Chapter 17, apply to financial assistance made
159-11   available from the fund; provided, however, that the board may also
159-12   execute contracts as necessary to evidence grant agreements.
159-13         Sec. 15.907.  RULES.  The board shall adopt rules necessary
159-14   to carry out this subchapter, including rules establishing
159-15   procedures for application for and for the award of financial
159-16   assistance, for the investment of funds, and for the administration
159-17   of the fund.
159-18         Sec. 15.908.  SALE OF POLITICAL SUBDIVISION BONDS.  (a)  The
159-19   board may sell or dispose of political subdivision bonds at the
159-20   price and under the terms that the board determines to be
159-21   reasonable.
159-22         (b)  The board may sell political subdivision bonds without
159-23   making a previous offer to the political subdivision that issued
159-24   the bonds and without advertising, soliciting, or receiving bids
159-25   for sale.
159-26         (c)  Notwithstanding other provisions of this chapter, the
 160-1   board may sell to the Texas Water Resources Finance Authority any
 160-2   political subdivision bonds purchased with money in the fund and
 160-3   may apply the proceeds of a sale in the manner provided by this
 160-4   section.
 160-5         (d)  Proceeds from the sale of political subdivision bonds
 160-6   under this section shall be deposited in the fund for use as
 160-7   provided by Section 15.904.
 160-8         (e)  As part of a sales agreement with the Texas Water
 160-9   Resources Finance Authority, the board by contract may agree to
160-10   perform the functions required to ensure that the political
160-11   subdivision pays the debt service on political subdivision bonds
160-12   sold and observes the conditions and requirements stated in those
160-13   bonds.
160-14         (f)  The board may exercise any powers necessary to carry out
160-15   the authority granted by this section, including the authority to
160-16   contract with any person to accomplish the purposes of this
160-17   section.
160-18         Sec. 15.909.  FUNDING FOR LOCAL ECONOMIC DEVELOPMENT.
160-19   (a)  The board may use the fund to provide financial assistance to
160-20   an eligible political subdivision to enable the political
160-21   subdivision to fund loans and grants for projects that develop and
160-22   diversify its local economy, consistent with the terms and
160-23   conditions set forth in a program adopted by the governing body of
160-24   the political subdivision under authority granted by Section
160-25   15.910.
160-26         (b)  The board may not purchase political subdivision bonds
 161-1   issued for the purposes described by Subsection (a) that are
 161-2   secured in whole or in part by a pledge of ad valorem taxes unless
 161-3   the political subdivision submits evidence satisfactory to the
 161-4   board that the issuance of the bonds has been approved by the
 161-5   citizens of the political subdivision voting at an election held
 161-6   for the purposes described in Section 15.910.
 161-7         Sec. 15.910.  AUTHORITY TO ESTABLISH ECONOMIC DEVELOPMENT
 161-8   PROGRAMS.  (a)  An eligible political subdivision may establish
 161-9   economic development programs and make loans and grants of public
161-10   funds to assist in providing projects within the political
161-11   subdivision.  The authority granted to a political subdivision to
161-12   make loans and grants in accordance with this section constitutes a
161-13   program in furtherance of the public purposes provided by Section
161-14   52-a, Article III, Texas Constitution.
161-15         (b)  Financial assistance received from the fund may be used
161-16   by an eligible political subdivision to make loans or grants to
161-17   persons for projects that the political subdivision finds will
161-18   conserve and develop the water resources of the political
161-19   subdivision and assist in diversifying and developing the economy
161-20   of the political subdivision and the state.
161-21         (c)  In exercising the authority granted by this section, the
161-22   governing body of an eligible political subdivision may determine
161-23   the terms and conditions governing the loan or grant of money and
161-24   determine whether to approve an agreement with a person who
161-25   receives a loan or grant.
161-26         Sec. 15.911.  An eligible political subdivision may not sell
 162-1   or incur obligations to fund an economic development program
 162-2   established under authority granted by Section 15.910 that are
 162-3   payable in whole or in part from ad valorem taxes unless the
 162-4   residents of the political subdivision, voting at an election held
 162-5   for the purpose, approve the issuance of obligations to fund an
 162-6   economic development program for the provision of loans or grants
 162-7   to persons to construct projects that will conserve and develop the
 162-8   water resources of the political subdivision and assist in
 162-9   developing and diversifying the local economy.
162-10         SECTION 4.02.  Chapter 15, Water Code, is amended by adding
162-11   Subchapter P to read as follows:
162-12               SUBCHAPTER P.  RURAL WATER ASSISTANCE FUND
162-13         Sec. 15.951.  PURPOSE.  The legislature finds that the rural
162-14   areas of the state, characterized by small populations extended
162-15   over disproportionately large service areas, require a means of
162-16   financing water projects in addition to those established by other
162-17   provisions of this chapter.
162-18         Sec. 15.952.  DEFINITIONS.  In this subchapter:
162-19               (1)  "Federal agency" means an agency or other entity
162-20   of the United States Department of Agriculture or an agency or
162-21   entity that is acting through or on behalf of that department.
162-22               (2)  "Fund" means the rural water assistance fund
162-23   established under this subchapter.
162-24               (3)  "Rural political subdivision" means:
162-25                     (A)  a nonprofit water supply or sewer service
162-26   corporation, district, or municipality with a service area of
 163-1   10,000 or less in population or that otherwise qualifies for
 163-2   financing from a federal agency; or
 163-3                     (B)  a county in which no urban area exceeds
 163-4   50,000 in population.
 163-5               (4)  "State agency" means an agency or other entity of
 163-6   the state, including the Department of Agriculture and the Texas
 163-7   Department of Housing and Community Affairs and any agency or
 163-8   authority that is acting through or on behalf of the Department of
 163-9   Agriculture or the Texas Department of Housing and Community
163-10   Affairs.
163-11         Sec. 15.953.  CREATION OF FUND.  The rural water assistance
163-12   fund is created as a special account in the general revenue fund.
163-13   The fund consists of:
163-14               (1)  money directly appropriated to the board;
163-15               (2)  repayment of principal and interest from loans
163-16   made from the fund not otherwise needed as a source of revenue
163-17   pursuant to Section 17.9615(b);
163-18               (3)  money transferred by the board from any and all
163-19   sources available; and
163-20               (4)  interest earned on the investment of money in the
163-21   fund and depository interest allocable to the fund in the general
163-22   revenue fund.
163-23         Sec. 15.954.  USE OF FUND.  (a)  The fund may be used to
163-24   provide low-interest loans to rural political subdivisions for
163-25   water or water-related projects, including the purchase of well
163-26   fields, the purchase or lease of rights to produce groundwater, and
 164-1   interim financing of construction projects.
 164-2         (b)  The fund may be used to enable a rural political
 164-3   subdivision to obtain water supplied by larger political
 164-4   subdivisions or to finance the consolidation or regionalizing of
 164-5   neighboring political subdivisions, or both.
 164-6         (c)  The fund may be used to finance an outreach and
 164-7   technical assistance program to assist rural political subdivisions
 164-8   in obtaining assistance through the fund.  The board may use money
 164-9   in the fund to contract for such outreach and technical assistance.
164-10         (d)  The fund may be used to buy down interest rates on
164-11   loans.
164-12         (e)  A rural political subdivision may enter into an
164-13   agreement with a federal agency or a state agency to submit a joint
164-14   application for financial assistance under this subchapter.
164-15         (f)  A nonprofit water supply or sewer service corporation is
164-16   exempt from payment of any sales tax that may be incurred under
164-17   other law or ordinance for any project financed by the fund.
164-18         (g)  The fund may be used as a source of revenue for the
164-19   payment of principal and interest on water financial assistance
164-20   bonds issued by the board if the proceeds of the sale of these
164-21   bonds will be deposited into the rural water assistance fund.
164-22         Sec. 15.955.  FINANCIAL ASSISTANCE.  (a)  The board shall
164-23   adopt rules necessary to administer this subchapter, including
164-24   rules establishing procedures for the application for and award of
164-25   loans, the distribution of loans, the investment of funds, and the
164-26   administration of loans and the fund.
 165-1         (b)  The board may not release from the fund money for the
 165-2   construction phase of portions of projects proposing surface water
 165-3   or groundwater development until the executive administrator makes
 165-4   a written finding:
 165-5               (1)  that a rural political subdivision proposing
 165-6   surface water development has the necessary water right authorizing
 165-7   it to appropriate and use the water that the project will provide;
 165-8   or
 165-9               (2)  that a rural political subdivision proposing
165-10   groundwater development has the right to use water that the project
165-11   will provide.
165-12         (c)  In passing on an application from a rural political
165-13   subdivision for financial assistance, the board shall consider:
165-14               (1)  the needs of the area to be served by the project,
165-15   the benefit of the project to the area, the relationship of the
165-16   project to the overall state water needs, and the relationship of
165-17   the project to the state water plan; and
165-18               (2)  the availability of revenue to the rural political
165-19   subdivision from all sources for the ultimate repayment of the cost
165-20   of the water supply project, including all interest.
165-21         (d)  The board by resolution may approve an application if,
165-22   after considering the factors listed in Subsection (c) and other
165-23   relevant factors, the board finds:
165-24               (1)  that the public interest is served by state
165-25   assistance in the project; and
165-26               (2)  that the revenue or taxes pledged by the rural
 166-1   political subdivision will be sufficient to meet all the
 166-2   obligations assumed by the rural political subdivision during the
 166-3   succeeding period of not more than 50 years.
 166-4         (e)  A program of water conservation for the more efficient
 166-5   use of water shall be required in the same manner as required for
 166-6   approval of an application for financial assistance under Section
 166-7   15.106.
 166-8         (f)  Sections 17.183-17.187 apply to the construction of
 166-9   projects funded pursuant to this subchapter.
166-10         SECTION 4.03.  Subchapter B, Chapter 15, Water Code, is
166-11   amended by adding Section 15.013 to read as follows:
166-12         Sec. 15.013.  BOTTLED WATER SURCHARGE.  (a)  The comptroller
166-13   shall collect from each manufacturer of bottled water in the state
166-14   a surcharge of five cents per individual container of water bottled
166-15   for retail sale.
166-16         (b)  The comptroller shall adopt any rules necessary for the
166-17   administration, payment, collection, and enforcement of the
166-18   surcharge under Subsection (a) and shall deposit all revenues
166-19   generated under this section to the water infrastructure fund.
166-20         (c)  In this section, "manufacturer" means a person who
166-21   bottles water for retail sale.
166-22         SECTION 4.04.  Subsection (j), Section 5.235, Water Code, is
166-23   amended to read as follows:
166-24         (j)  The fee for other uses of water not specifically named
166-25   in this section is $1 per acre-foot, except that no political
166-26   subdivision may be required to pay fees to use water for recharge
 167-1   of underground freshwater-bearing sands and aquifers or for
 167-2   abatement of natural pollution.  This fee is waived for
 167-3   applications for instream-use water rights deposited into the Texas
 167-4   Water Trust.
 167-5         SECTION 4.05.  Section 15.001, Water Code, is amended by
 167-6   adding Subdivision (12) to read as follows:
 167-7               (12)  "Regionalization" means development of a water
 167-8   supply or wastewater collection and treatment system that
 167-9   incorporates multiple service areas into an areawide service
167-10   facility or any such system that serves an area that includes more
167-11   than a single county, city, special district, or other political
167-12   subdivision of the state.
167-13         SECTION 4.06.  Subsection (a), Section 15.002, Water Code, is
167-14   amended to read as follows:
167-15         (a)  The legislature finds that it is in the public interest
167-16   and to the benefit of the general public of the state to encourage
167-17   and to assist in the planning and construction of projects to
167-18   develop and conserve the storm water and floodwater as well as the
167-19   ordinary flows of the rivers and streams of the state, to maintain
167-20   and enhance the quality of the water of the state, to provide
167-21   protection to the state's citizens from the floodwater of the
167-22   rivers and streams of the state, to provide drainage, subsidence
167-23   control, public beach nourishment, recharge, chloride control,
167-24   brush control, weather modification, regionalization, and
167-25   desalination [desalinization], to provide for the management of
167-26   aquatic vegetation, and other purposes as provided by law or board
 168-1   rule.
 168-2         SECTION 4.07.  Subsection (b), Section 15.011, Water Code, is
 168-3   amended to read as follows:
 168-4         (b)  After notice and hearing and subject to any limitations
 168-5   established by the General Appropriations Act, the board may
 168-6   transfer money from the fund to the loan fund created under
 168-7   Subchapter C of this chapter, the storage acquisition fund created
 168-8   under Subchapter E of this chapter, the research and planning fund
 168-9   created under Subchapter F of this chapter, the hydrographic survey
168-10   account created under Subchapter M of this chapter, provided the
168-11   hydrographic survey account transfer does not exceed $425,000,
168-12   [and] the aquatic vegetation management fund created under
168-13   Subchapter N of this chapter, and the rural water assistance fund
168-14   created under Subchapter P.
168-15         SECTION 4.08.  Subsections (a) and (b), Section 15.102, Water
168-16   Code, are amended to read as follows:
168-17         (a)  The loan fund may be used by the board to provide loans
168-18   of financial assistance to political subdivisions, federal
168-19   agencies, or both political subdivisions and federal agencies
168-20   acting jointly for the construction, acquisition, improvement, or
168-21   enlargement of projects involving water conservation, water
168-22   development, or water quality enhancement, providing nonstructural
168-23   and structural flood control, or drainage, project recreation lands
168-24   and revenue-generating recreational improvements within any
168-25   watershed, or providing recharge, chloride control, subsidence
168-26   control, brush control, weather modification, regionalization, or
 169-1   desalination [desalinization] as provided by legislative
 169-2   appropriations, this chapter, and the board rules.
 169-3         (b)  The loan fund may also be used by the board to provide
 169-4   grants for:
 169-5               (1)  projects that include supplying water and
 169-6   wastewater services in economically distressed areas, including
 169-7   projects involving retail distribution of those services; and
 169-8               (2)  desalination, brush control, weather modification,
 169-9   regionalization, and projects providing regional water quality
169-10   enhancement services as defined by board rule, including regional
169-11   conveyance systems.
169-12         SECTION 4.09.  Section 15.105, Water Code, is amended to read
169-13   as follows:
169-14         Sec. 15.105.  CONSIDERATIONS IN PASSING ON APPLICATION.  In
169-15   passing on an application for financial assistance from the loan
169-16   fund, the board shall consider but is not limited to:
169-17               (1)  the needs of the area to be served by the project
169-18   and the benefit of the project to the area in relation to the needs
169-19   of other areas requiring state assistance in any manner and the
169-20   benefits of those projects to the other areas;
169-21               (2)  the availability of revenue to the applicant from
169-22   all sources for the ultimate repayment of the cost of the project,
169-23   including all interest;
169-24               (3)  the relationship of the project to overall
169-25   statewide needs;
169-26               (4)  the ability of the applicant to finance the
 170-1   project without state assistance; [and]
 170-2               (5)  for applications for grants for economically
 170-3   distressed areas, the regulatory efforts by the county in which the
 170-4   project is located to control the construction of subdivisions that
 170-5   lack basic utility services; and
 170-6               (6)  for applications for grants under Section
 170-7   15.102(b)(2), the ability of the applicant to construct the project
 170-8   without the grant, and the benefits of the project to water and
 170-9   wastewater needs of the state.  The board shall pass rules which
170-10   shall further define the eligibility of grants under this
170-11   subchapter.
170-12         SECTION 4.10.  Subsection (a), Section 15.106, Water Code, is
170-13   amended to read as follows:
170-14         (a)  The board, by resolution, may approve an application for
170-15   financial assistance [a loan] if after considering the factors
170-16   listed in Section 15.105 of this code and any other relevant
170-17   factors, the board finds:
170-18               (1)  that the public interest requires state
170-19   participation in the project; and
170-20               (2)  that in its opinion the revenue or taxes pledged
170-21   by the political subdivision will be sufficient to meet all the
170-22   obligations assumed by the political subdivision.
170-23         SECTION 4.11.  Section 15.107, Water Code, is amended to read
170-24   as follows:
170-25         Sec. 15.107.  METHOD OF MAKING [LOANS OF] FINANCIAL
170-26   ASSISTANCE AVAILABLE.  (a)  The board may make financial assistance
 171-1   available to successful applicants in any manner that it considers
 171-2   economically feasible including:
 171-3               (1)  contracts or agreements with a political
 171-4   subdivision for the payment of the principal of or interest on or
 171-5   both the principal of and interest on bonds or other obligations
 171-6   issued or to be issued by the political subdivision;
 171-7               (2)  contracts or agreements with a political
 171-8   subdivision for the purpose of providing the political
 171-9   subdivision's share of any cost-sharing required as a participant
171-10   in or local sponsor of any federal project; [or]
171-11               (3)  purchase of the bonds or other obligations of a
171-12   political subdivision for the purpose of completely or partially
171-13   financing the project for which the application is being submitted;
171-14   or
171-15               (4)  contracts or agreements for the receipt of funds
171-16   and performance of obligations in relation to any grant of funds
171-17   provided by the board.
171-18         (b)  Contracts or agreements entered into under Subdivision
171-19   (1) of Subsection (a) of this section may cover all or any part of
171-20   the debt service requirements in a given year and may cover debt
171-21   service requirements in as many years of an issue as the board
171-22   considers appropriate.
171-23         (c)  In a determination on a loan for financial assistance,
171-24   the board may approve interest deferral or the capitalization of
171-25   interest costs and may approve periods of repayment for the loans
171-26   of up to 50 years.
 172-1         SECTION 4.12.  Section 15.434, Water Code, is amended to read
 172-2   as follows:
 172-3         Sec. 15.434.  USE OF MONEY IN FUND.  Money deposited to the
 172-4   credit of the agricultural soil and water conservation fund, on
 172-5   appropriation by the legislature to the board, the Department of
 172-6   Agriculture, the State Soil and Water Conservation Board, the Texas
 172-7   Agricultural Experiment Station, the Texas Agricultural Extension
 172-8   Service, public colleges and universities, and other state agencies
 172-9   shall be used for the following purposes:
172-10               (1)  agricultural water conservation technical
172-11   assistance programs;
172-12               (2)  agricultural water conservation, education, and
172-13   demonstration programs;
172-14               (3)  purchase of equipment, including demonstration and
172-15   educational equipment;
172-16               (4)  grants made to groundwater [underground water]
172-17   conservation districts and political subdivisions for the purchase
172-18   of equipment under programs established by Subchapter H of this
172-19   chapter;
172-20               (5)  research in water utilization and conservation
172-21   including artificial recharge and secondary recovery of groundwater
172-22   [underground water];
172-23               (6)  desalination [desalinization];
172-24               (7)  weather modification;
172-25               (8)  technical assistance programs for developing
172-26   on-farm soil and water conservation plans developed jointly by
 173-1   landowners and operators and local soil and water conservation
 173-2   districts, as provided by Subchapter H, Chapter 201, Agriculture
 173-3   Code;
 173-4               (9)  research and demonstration relating to the
 173-5   production of native and low-water-use plants and water-efficient
 173-6   crops;
 173-7               (10)  a pilot program for low-interest loans for the
 173-8   purchase of agricultural water conservation systems established by
 173-9   Subchapter I of this chapter; [and]
173-10               (11)  research, demonstration, and education relating
173-11   to brush control; and
173-12               (12)  regionalization designed to promote agricultural
173-13   water conservation.
173-14         SECTION 4.13.  Section 15.471, Water Code, is amended to read
173-15   as follows:
173-16         Sec. 15.471.  GRANTS; PURPOSES.  The board may make grants of
173-17   money to groundwater [underground water] conservation districts, to
173-18   political subdivisions, and to other districts created under
173-19   Article III, Sections 52(b)(1) and (2), or Article XVI, Section 59,
173-20   of the Texas Constitution for purchasing equipment required for:
173-21               (1)  measurement and evaluation of irrigation systems
173-22   and agricultural water conservation practices on irrigated land,
173-23   dryland, and rangeland;
173-24               (2)  demonstration of efficient irrigation systems and
173-25   agricultural water conservation practices on irrigated land,
173-26   dryland, and rangeland;
 174-1               (3)  testing and evaluation of water quality and the
 174-2   suitability of water from groundwater or surface water resources
 174-3   for irrigation, rural domestic use, livestock, or agricultural
 174-4   industry use;
 174-5               (4)  demonstration of efficient or sound chemical
 174-6   application and evaluation or demonstration of systems which will
 174-7   prevent contamination of groundwater and surface water from
 174-8   chemicals and other substances used in agriculture; or
 174-9               (5)  measurement and data collection related to the
174-10   conservation of groundwater resources.
174-11         SECTION 4.14.  Section 15.602, Water Code, is amended by
174-12   adding a new Subdivision (8) and redesignating existing
174-13   Subdivisions (8) through (14) to read as follows:
174-14               (8)  "Person" means an individual, corporation,
174-15   partnership, association, state, municipality, commission, or
174-16   political subdivision of a state or any interstate body, as defined
174-17   by Section 502 of the federal act, including a political
174-18   subdivision as defined by this subchapter, if the person is
174-19   eligible for financial assistance under federal law establishing
174-20   the revolving fund.
174-21               (9)  "Political subdivision" means a municipality,
174-22   intermunicipal, interstate, or state agency, any other public
174-23   entity eligible for assistance under this subchapter, or a
174-24   nonprofit water supply corporation created and operating under
174-25   Chapter 67, if such entity is eligible for financial assistance
174-26   under federal law establishing the state revolving fund or an
 175-1   additional state revolving fund.
 175-2               (10) [(9)]  "Public water system" means a system that
 175-3   is owned by any person and that meets the definition of public
 175-4   water system in the Safe Drinking Water Act.
 175-5               (11) [(10)]  "Public works" means any project to
 175-6   acquire, construct, improve, repair, or otherwise provide any
 175-7   buildings, structures, facilities, equipment, or other real or
 175-8   personal property or improvements designed for public use,
 175-9   protection, or enjoyment undertaken by a political subdivision and
175-10   paid for, in whole or in part, out of public funds.
175-11               (12) [(11)]  "Revolving fund" means the state water
175-12   pollution control revolving fund.
175-13               (13) [(12)]  "Safe Drinking Water Act" means Title XIV
175-14   of the federal Public Health Service Act, commonly known as the
175-15   Safe Drinking Water Act, as amended (42 U.S.C. Section 300f et
175-16   seq.).
175-17               (14) [(13)]  "Safe drinking water revolving fund" means
175-18   the fund established by the board as an additional state revolving
175-19   fund to provide financial assistance in accordance with the federal
175-20   program established pursuant to the provisions of the Safe Drinking
175-21   Water Act.
175-22               (15) [(14)]  "Treatment works" has the meaning
175-23   established by the federal act and the eligible components of the
175-24   management programs established by Sections 319 and 320 of the
175-25   federal act.
175-26         SECTION 4.15.  Subsection (a), Section 15.603, Water Code, is
 176-1   amended to read as follows:
 176-2         (a)  The revolving fund is held separately from other funds
 176-3   by the board outside the State Treasury to provide financial
 176-4   assistance to political subdivisions for construction of treatment
 176-5   works and to persons for nonpoint source pollution control and
 176-6   estuary management projects.
 176-7         SECTION 4.16.  Subsection (a), Section 15.604, Water Code, is
 176-8   amended to read as follows:
 176-9         (a)  The board may use the revolving fund for financial
176-10   assistance only as provided by the federal act:
176-11               (1)  to make loans, on the conditions that:
176-12                     (A)  those loans are made at or below market
176-13   interest rates, including interest-free loans, at terms not to
176-14   exceed 20 years;
176-15                     (B)  principal and interest payments will begin
176-16   not later than one year after completion of any treatment works and
176-17   all loans will be fully amortized not later than 20 years after
176-18   completion of the treatment works;
176-19                     (C)  the recipient of a loan will establish a
176-20   dedicated source of revenue for repayment of loans; and
176-21                     (D)  the revolving fund will be credited with all
176-22   payments of principal of and interest on all loans;
176-23               (2)  to buy or refinance the debt obligation of
176-24   political subdivisions at or below market rates if the debt
176-25   obligations were incurred after March 7, 1985;
176-26               (3)  to guarantee or purchase insurance for political
 177-1   subdivisions if the guarantee or insurance would improve access to
 177-2   market credit or reduce interest rates;
 177-3               (4)  as a source of revenue or security for the payment
 177-4   of principal and interest on bonds issued by the state if the
 177-5   proceeds of the sale of those bonds will be deposited in the
 177-6   revolving fund;
 177-7               (5)  to provide loan guarantees to similar revolving
 177-8   funds established by municipalities or intermunicipal agencies;
 177-9               (6)  to earn interest on revolving fund accounts;
177-10               (7)  for the reasonable costs of administering the
177-11   revolving fund and conducting activities provided for by Title VI
177-12   of the federal act, except that those amounts may not exceed the
177-13   amount authorized under Title VI of the federal act; [and]
177-14               (8)  to provide financial assistance to persons for a
177-15   nonpoint source pollution control project pursuant to Section 319
177-16   of the federal act or for an estuary management project pursuant to
177-17   Section 320 of the federal act; and
177-18               (9)  for other purposes as provided by the federal act.
177-19         SECTION 4.17.  Section 15.607, Water Code, is amended to read
177-20   as follows:
177-21         Sec. 15.607.  APPROVAL OF APPLICATION.  On review of
177-22   recommendations by the executive administrator, the board by
177-23   resolution may approve an application if the board finds that in
177-24   its opinion the revenue or taxes or both revenue and taxes pledged
177-25   by the applicant will be sufficient to meet all the obligations
177-26   assumed by the applicant [political subdivision] and that the
 178-1   application and assistance applied for meet the requirements of the
 178-2   federal act and state law.  A program of water conservation for the
 178-3   more effective use of water shall be required in the same manner as
 178-4   required for approval of an application for financial assistance
 178-5   under Section 15.106 of this code.
 178-6         SECTION 4.18.  Subchapter C, Chapter 16, Water Code, is
 178-7   amended by adding Section 16.059 to read as follows:
 178-8         Sec. 16.059.  COLLECTION OF INSTREAM FLOW DATA; CONDUCT OF
 178-9   STUDIES.  (a)  The Parks and Wildlife Department and the board, in
178-10   cooperation with other appropriate governmental agencies, shall
178-11   jointly establish and continuously maintain an instream flow data
178-12   collection and evaluation program and shall conduct studies and
178-13   analyses to determine flow conditions in the state's rivers and
178-14   streams necessary to support a sound ecological environment.
178-15         (b)  The Parks and Wildlife Department and the board shall
178-16   each designate an employee to share equally in the oversight of the
178-17   program studies.  Other responsibilities shall be divided between
178-18   the Parks and Wildlife Department and the board to maximize present
178-19   in-house capabilities of personnel and equipment and to minimize
178-20   costs to the state.
178-21         (c)  The Parks and Wildlife Department and the board shall
178-22   each have reasonable access to all data, studies, analyses,
178-23   information, and reports produced by the other agency.
178-24         (d)  The priority studies shall be completed not later than
178-25   December 31, 2010.  The Parks and Wildlife Department and the board
178-26   shall establish a work plan that prioritizes the studies and that
 179-1   sets interim deadlines providing for publication of flow
 179-2   determinations for individual rivers and streams on a reasonably
 179-3   consistent basis throughout the prescribed study period.  Before
 179-4   publication, completed studies shall be submitted for comment to
 179-5   both the board and the Parks and Wildlife Department.
 179-6         (e)  Results of studies completed under this section shall be
 179-7   considered by the commission in its review of any management plan,
 179-8   water right, or interbasin transfer.
 179-9         (f)  The board may authorize the use of money from the
179-10   research and planning fund established under Chapter 15 to
179-11   accomplish the purposes of this section.  The money shall be used
179-12   by the board in cooperation with the Parks and Wildlife Department
179-13   for interagency contracts with cooperating agencies and
179-14   universities and contracts with private sector establishments, as
179-15   necessary, to accomplish the purposes of this section.
179-16         SECTION 4.19.  Subsection (c), Section 17.853, Water Code, is
179-17   amended to read as follows:
179-18         (c)  The board may use the fund only:
179-19               (1)  to provide state matching funds for federal funds
179-20   provided to the state water pollution control revolving fund or to
179-21   any additional state revolving fund created under Subchapter J,
179-22   Chapter 15;
179-23               (2)  to provide financial assistance from the proceeds
179-24   of taxable bond issues to water supply corporations organized under
179-25   Chapter 67, and other participants;
179-26               (3)  to provide financial assistance to participants
 180-1   for the construction of water supply projects and treatment works;
 180-2               (4)  to provide financial assistance for an interim
 180-3   construction period to participants for projects for which the
 180-4   board will provide long-term financing through the water
 180-5   development fund; [and]
 180-6               (5)  to provide financial assistance for water supply
 180-7   and sewer service projects in economically distressed areas as
 180-8   provided by Subchapter K, Chapter 17, to the extent the board can
 180-9   make that assistance without adversely affecting the current or
180-10   future integrity of the fund or of any other financial assistance
180-11   program of the board; and
180-12               (6)  to provide funds to the water infrastructure fund
180-13   created under Section 15.903.
180-14         SECTION 4.20.  Subdivisions (2) and (6), Section 17.871,
180-15   Water Code, are amended to read as follows:
180-16               (2)  "Borrower district" means a political subdivision,
180-17   including a district or authority created under Article III,
180-18   Sections 52(b)(1) and (2), or Article XVI, Section 59, of the Texas
180-19   Constitution, that receives or is eligible to receive a
180-20   conservation loan from the board for a purpose described by Section
180-21   17.895 or 17.8955 [improvement to district facilities].
180-22               (6)  "Lender district" means a political subdivision,
180-23   including a soil and water conservation district under Chapter 201,
180-24   Agriculture Code, a groundwater [an underground water] conservation
180-25   district created under Article XVI, Section 59, of the Texas
180-26   Constitution, or a district or authority created under Article III,
 181-1   Section 52(b)(1), or Article XVI, Section 59, of the Texas
 181-2   Constitution authorized to supply water for irrigation purposes,
 181-3   that is eligible to receive or that receives a loan from the board
 181-4   for the purpose of making conservation loans to individual
 181-5   borrowers.
 181-6         SECTION 4.21.  Section 17.895, Water Code, is amended to read
 181-7   as follows:
 181-8         Sec. 17.895.  CONSERVATION LOANS.  (a)  This section applies
 181-9   only to a conservation loan from a lender district that is:
181-10               (1)  a soil and water conservation district under
181-11   Chapter 201, Agriculture Code;
181-12               (2)  a groundwater conservation district created under
181-13   Section 59, Article XVI, Texas Constitution; or
181-14               (3)  a district or authority created under Section
181-15   52(b)(1), Article III, or Section 59, Article XVI, Texas
181-16   Constitution.
181-17         (b)  The board or a lender district [districts] may make
181-18   conservation loans for capital equipment or materials, labor,
181-19   preparation costs, and installation costs:
181-20               (1)  to improve water use efficiency of water delivery
181-21   and application on existing irrigation systems;
181-22               (2)  for preparing irrigated land to be converted to
181-23   dryland conditions; and
181-24               (3)  for preparing dryland for more efficient use of
181-25   natural precipitation[;]
181-26               [(4)  for preparing and maintaining land to be used for
 182-1   brush control activities, including but not limited to activities
 182-2   conducted pursuant to Chapter 203, Agriculture Code; or]
 182-3               [(5)  for implementing precipitation enhancement
 182-4   activities in areas of the state where such activities would be, in
 182-5   the board's judgment, most effective].
 182-6         (c) [(b)]  Conservation loans for the purposes listed in
 182-7   Subsection (b) [(a)] may be made by lender districts to individual
 182-8   borrowers for use on private property or by the board to borrower
 182-9   districts [for use on district facilities].
182-10         (d) [(c)]  The board may make conservation loans to borrower
182-11   districts for the cost of purchasing and installing devices, on
182-12   public or private property, designed to indicate the amount of
182-13   water withdrawn for irrigation purposes.
182-14         (e) [(d)]  For purposes of this section, the board or lender
182-15   districts may seek the advice of the Department of Agriculture
182-16   regarding the feasibility of a project for which a conservation
182-17   loan is sought.
182-18         SECTION 4.22.  Subchapter J, Chapter 17, Water Code, is
182-19   amended by adding Section 17.8955 to read as follows:
182-20         Sec. 17.8955.  CONSERVATION LOANS FOR BRUSH CONTROL AND
182-21   PRECIPITATION ENHANCEMENT.  (a)  The board or a lender district may
182-22   make a conservation loan for capital equipment or materials, labor,
182-23   preparation costs, and installation costs for:
182-24               (1)  preparing and maintaining land to be used for
182-25   brush control activities, including activities conducted under
182-26   Chapter 203, Agriculture Code; or
 183-1               (2)  implementing precipitation enhancement activities
 183-2   in areas of the state where those activities would be, in the
 183-3   board's judgment, most effective.
 183-4         (b)  A conservation loan for a purpose listed in Subsection
 183-5   (a) may be made by a lender district to an individual borrower for
 183-6   use on private property or by the board to a borrower district.
 183-7         SECTION 4.23.  Subchapter L, Chapter 17, Water Code, is
 183-8   amended by adding Section 17.9615 to read as follows:
 183-9         Sec. 17.9615.  TRANSFERS TO RURAL WATER ASSISTANCE FUND.
183-10   (a)  The board may direct the comptroller to transfer amounts from
183-11   the financial assistance account to the rural water assistance fund
183-12   created by Subchapter P, Chapter 15, to provide financial
183-13   assistance pursuant to this subchapter for the purposes provided in
183-14   Section 15.954.
183-15         (b)  The board shall use the rural water assistance fund as a
183-16   source of revenue to be deposited in accordance with this
183-17   subchapter for the payment of principal and interest on water
183-18   financial assistance bonds issued by the board, the proceeds of
183-19   which are to be deposited into the rural water assistance fund and
183-20   to be used to make payments under a bond enhancement agreement with
183-21   respect to principal or interest on the water financial assistance
183-22   bonds.
183-23         SECTION 4.24.  Subchapter L, Chapter 17, Water Code, is
183-24   amended by adding Section 17.9616 to read as follows:
183-25         Sec. 17.9616.  TRANSFER TO WATER INFRASTRUCTURE FUND.
183-26   (a)  The board may direct the comptroller to transfer amounts from
 184-1   the financial assistance account to the water infrastructure fund
 184-2   created by Subchapter O, Chapter 15, to provide financial
 184-3   assistance under this subchapter for the purposes provided in
 184-4   Section 15.904.
 184-5         (b)  The board shall use the water infrastructure fund as a
 184-6   source of revenue to be deposited in accordance with this
 184-7   subchapter for the payment of principal and interest on water
 184-8   financial assistance bonds issued by the board, the proceeds of
 184-9   which are to be deposited into the water infrastructure fund and to
184-10   be used to make payments under a bond enhancement agreement with
184-11   respect to principal or interest on the water financial assistance
184-12   bonds.
184-13         SECTION 4.25.  Section 11.32, Tax Code, is amended to read as
184-14   follows:
184-15         Sec. 11.32.  CERTAIN WATER CONSERVATION INITIATIVES.  The
184-16   governing body of a taxing unit by official action of the governing
184-17   body adopted in the manner required by law for official actions may
184-18   exempt from taxation part or all of the assessed value of property
184-19   on which approved water conservation initiatives, desalination
184-20   projects, or brush control initiatives have been implemented.  For
184-21   purposes of this section, approved water conservation,
184-22   desalination, and brush control initiatives shall be designated
184-23   pursuant to an ordinance or other law adopted by the governing
184-24   unit.
184-25         SECTION 4.26.  Subchapter H, Chapter 151, Tax Code, is
184-26   amended by adding Section 151.355 to read as follows:
 185-1         Sec. 151.355.  WATER-RELATED EXEMPTIONS.  The following are
 185-2   exempted from taxes imposed by this chapter:
 185-3               (1)  rainwater harvesting equipment or supplies, water
 185-4   recycling and reuse equipment or supplies, or other equipment,
 185-5   services, or supplies used to reduce or eliminate water use;
 185-6               (2)  equipment, services, or supplies used for
 185-7   desalination of surface water or groundwater;
 185-8               (3)  equipment, services, or supplies used for brush
 185-9   control designed to enhance the availability of water;
185-10               (4)  equipment, services, or supplies used for
185-11   precipitation enhancement;
185-12               (5)  equipment, services, or supplies used to construct
185-13   or operate a water or wastewater system certified by the Texas
185-14   Natural Resource Conservation Commission as a regional system; and
185-15               (6)  equipment, services, or supplies used to construct
185-16   or operate a water supply or wastewater system by a private entity
185-17   as a public-private partnership, as certified by the political
185-18   subdivision that is a party to the project.
185-19           ARTICLE 5.  JOINT COMMITTEE ON WATER INFRASTRUCTURE
185-20         SECTION 5.01.  In this article, "committee" means the joint
185-21   committee on water infrastructure.
185-22         SECTION 5.02.  The committee shall conduct an interim study
185-23   and make recommendations regarding:
185-24               (1)  water marketing;
185-25               (2)  water financing; and
185-26               (3)  water conveyance systems.
 186-1         SECTION 5.03.  The committee is composed of six members as
 186-2   follows:
 186-3               (1)  the chair of the Senate Committee on Natural
 186-4   Resources and the chair of the House Committee on Natural
 186-5   Resources;
 186-6               (2)  two members of the senate appointed by the
 186-7   lieutenant governor; and
 186-8               (3)  two members of the house of representatives
 186-9   appointed by the speaker of the house of representatives.
186-10         SECTION 5.04.  The committee shall:
186-11               (1)  meet at least annually with the Texas Natural
186-12   Resource Conservation Commission and the Texas Water Development
186-13   Board; and
186-14               (2)  receive information relating to:
186-15                     (A)  encouraging the effective development of
186-16   water marketing and water movement; and
186-17                     (B)  prioritizing the use of state funds for
186-18   financing the development and conservation of water resources.
186-19         SECTION 5.05.  Not later than November 1, 2002, the committee
186-20   shall make a final report to the lieutenant governor, the speaker
186-21   of the house of representatives, and the 78th Legislature
186-22   evaluating the issues described in Section 5.02 of this article.
186-23         SECTION 5.06.  The committee has the authority necessary to
186-24   perform its duties and, in connection with those duties, may call
186-25   and hold hearings.
186-26         SECTION 5.07.  The committee may request the assistance of
 187-1   state agencies, departments, or offices to carry out its duties.
 187-2         SECTION 5.08.  The Senate Committee on Natural Resources and
 187-3   the House Committee on Natural Resources shall provide staff to the
 187-4   committee.
 187-5         SECTION 5.09.  The committee shall submit a proposed budget
 187-6   to the appropriate committee on administration in each house of the
 187-7   legislature.  The administration committees shall jointly approve
 187-8   the committee budget in an amount appropriate for the committee to
 187-9   accomplish its duties under this article.
187-10         SECTION 5.10.  The committee may travel around the state and
187-11   hold hearings or public meetings as needed to fulfill its duties
187-12   under this article.
187-13         SECTION 5.11.  This article expires and the committee is
187-14   abolished on January 1, 2003.
187-15        ARTICLE 6.  REPEALER; TRANSITION; SAVING; EFFECTIVE DATE
187-16         SECTION 6.01.  Sections 35.005, 35.006, and 36.121 and
187-17   Subsection (d), Section 36.013, Water Code, are repealed.
187-18         SECTION 6.02.  (a)  The changes in law made by this Act to
187-19   Section 11.085, Water Code, apply to an application for a water
187-20   right, or an amendment to a permit, certified filing, or
187-21   certificate of adjudication authorizing an interbasin transfer of
187-22   water, that is accepted for filing on or after the effective date
187-23   of this Act.  An application for a water right, or an amendment to
187-24   a permit, certified filing, or certificate of adjudication
187-25   authorizing an interbasin transfer of water, that is accepted for
187-26   filing before the effective date of this Act is governed by the law
 188-1   in effect immediately before that date, and that law is continued
 188-2   in effect for that purpose.
 188-3         (b)  The changes in law made by this Act by amending Section
 188-4   17.895, Water Code, and adding Section 17.8955, Water Code, apply
 188-5   only to a conservation loan for which an application is filed on or
 188-6   after the effective date of this Act.  A conservation loan for
 188-7   which an application was filed before the effective date of this
 188-8   Act is governed by the law in effect immediately before that date,
 188-9   and that law is continued in effect for that purpose.
188-10         (c)  The Texas Water Advisory Council shall review the first
188-11   group described under Section 9.010, Water Code, as added by this
188-12   Act, at the third quarterly meeting held by the council.
188-13         (d)  Not later than January 1, 2002, the Texas Water
188-14   Development Board shall adopt rules to administer Subchapter O,
188-15   Chapter 15, Water Code, as added by this Act, including rules
188-16   establishing procedures for applications for and for the awarding
188-17   of financial assistance for water projects, for the investment of
188-18   funds, and for the administration of the water infrastructure fund
188-19   created by this Act.
188-20         (e)  Not later than January 1, 2002, the Texas Water
188-21   Development Board shall adopt rules to administer Subchapter P,
188-22   Chapter 15, Water Code, as added by this Act, including
188-23   establishing procedures for the application for and award of loans,
188-24   the distribution of loans, the investment of funds, and the
188-25   administration of loans and the rural water assistance fund.
188-26         (f)  Not later than January 1, 2002, the Texas Water
 189-1   Development Board shall adopt rules requiring a holder of a surface
 189-2   water permit, certified filing, or certificate of adjudication for
 189-3   surface water, a holder of a permit for the export of groundwater
 189-4   from a groundwater conservation district, a retail public water
 189-5   supplier, a wholesale water provider, and an irrigation district to
 189-6   report to the board information on certain water pipelines and
 189-7   other facilities that can be used for water conveyance.
 189-8         SECTION 6.03.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
 189-9   (a)  The proper and legal notice of the intention to introduce this
189-10   Act, setting forth the general substance of this Act, has been
189-11   published as provided by law, and the notice and a copy of this Act
189-12   have been furnished to all persons, agencies, officials, or
189-13   entities to which they are required to be furnished by the
189-14   constitution and other laws of this state, including the governor,
189-15   who has submitted the notice and Act to the Texas Natural Resource
189-16   Conservation Commission.
189-17         (b)  The Texas Natural Resource Conservation Commission has
189-18   filed its recommendations relating to this Act with the governor,
189-19   lieutenant governor, and speaker of the house of representatives
189-20   within the required time.
189-21         (c)  All requirements of the constitution and laws of the
189-22   state and the rules and procedures of the legislature with respect
189-23   to the notice, introduction, and passage of this Act are fulfilled
189-24   and accomplished.
189-25         SECTION 6.04.  If any provision of this Act or its
189-26   application to any person or circumstance is held invalid, the
 190-1   invalidity does not affect other provisions or applications of this
 190-2   Act that can be given effect without the invalid provision or
 190-3   application, and to this end the provisions of this Act are
 190-4   declared to be severable.
 190-5         SECTION 6.05.  This Act takes effect September 1, 2001.