77R16952 E                          
         By Brown                                                 S.B. No. 2
         Substitute the following for S.B. No. 2:
         By Lewis of Orange                                   C.S.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.  DEFINITIONS.  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
1-21     consists 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
 2-1     chairman, of the commission;
 2-2                 (3)  the chairman, or a commissioner designated by the
 2-3     chairman, of the Parks and Wildlife Commission;
 2-4                 (4)  the commissioner of agriculture;
 2-5                 (5)  the commissioner of the General Land Office;
 2-6                 (6)  three members of the house of representatives
 2-7     appointed by the speaker of the house of representatives;
 2-8                 (7)  two members of the senate appointed by the
 2-9     lieutenant governor; and
2-10                 (8)  three members of the general public appointed by
2-11     the governor, one representing groundwater management, one
2-12     representing surface water management, and one representing the
2-13     environmental community.
2-14           (b)  Council members may not delegate participation or
2-15     council duties to staff.
2-16           Sec. 9.003.  TERMS.  (a)  Except for the commissioner of the
2-17     General Land Office and the commissioner of agriculture, council
2-18     members who are officials of state agencies serve terms as
2-19     determined by the chairman of each agency.
2-20           (b)  Council members who are members of the general public
2-21     serve staggered six-year terms with the term of one member expiring
2-22     August 31 of each odd-numbered year.
2-23           (c)  Council members may be reappointed to serve additional
2-24     terms.
2-25           (d)  A vacancy on the council shall be filled by appointment
2-26     by the original appointing authority for the unexpired term.
2-27           Sec. 9.004.  OFFICERS OF THE COUNCIL.  (a)  The governor
 3-1     shall appoint a council member as the chair of the council for a
 3-2     two-year term expiring May 31 of each even-numbered year.
 3-3           (b)  The council shall have a secretary of the council who
 3-4     serves at the pleasure of the council and is accountable only to
 3-5     the council.
 3-6           Sec. 9.005.  COUNCIL STAFF.  On request by the council, the
 3-7     commission, the Parks and Wildlife Department, the Department of
 3-8     Agriculture, and the Texas Water Development Board shall provide
 3-9     any staff other than the secretary of the council necessary to
3-10     assist the council in the performance of its duties.
3-11           Sec. 9.006.  MEETINGS.  (a)  The council shall meet at least
3-12     once in each calendar quarter.  Six members constitute a quorum.
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 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)  Reimbursement under Subsection (a) is subject to the
3-20     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 recommendations on state water policy
3-26     initiatives, including:
3-27                       (A)  promoting flexibility and incentives for
 4-1     water desalination, brush control, regionalization, weather
 4-2     modification projects, and public-private partnerships relating to
 4-3     water projects;
 4-4                       (B)  promoting adequate financing for surface
 4-5     water and groundwater projects;
 4-6                       (C)  development of water conservation and
 4-7     drought management projects;
 4-8                       (D)  implementation of approved regional and
 4-9     state water plans;
4-10                       (E)  encouraging commonality of technical data
4-11     and information such as joint agency studies, freshwater inflow
4-12     recommendations, surface water and groundwater availability models,
4-13     and bay and estuary and instream flow recommendations developed by
4-14     the Parks and Wildlife Department, the commission, and the Texas
4-15     Water Development Board; and
4-16                       (F)  encouraging the use of supplemental
4-17     environmental projects for water infrastructure needs and enhancing
4-18     the aquatic environment and habitat in enforcement proceedings at a
4-19     state agency or political subdivision;
4-20                 (2)  encourage the enhancement and coordination of
4-21     state, interstate, and international efforts to improve
4-22     environmental quality and living conditions along the Texas-Mexico
4-23     border;
4-24                 (3)  coordinate a unified state position on federal and
4-25     international water issues; and
4-26                 (4)  advise the Texas Water Development Board on
4-27     developing criteria for prioritizing the funding of projects in the
 5-1     state water plan.
 5-2           (b)  The council may not:
 5-3                 (1)  adopt rules;
 5-4                 (2)  regulate water use, water quality, or any other
 5-5     aspect of water resource management;
 5-6                 (3)  plan or construct water resource projects or have
 5-7     such projects planned or constructed;
 5-8                 (4)  grant or lend money for the construction of water
 5-9     resource projects;
5-10                 (5)  establish water resource management standards or
5-11     otherwise usurp the authority of or infringe upon the duties,
5-12     responsibilities, or powers of local, regional, or state water
5-13     management entities, including groundwater districts, river
5-14     authorities and compacts, regional water planning groups, or member
5-15     agencies of the council; or
5-16                 (6)  consider or discuss a specific permit or project
5-17     or recommendation for a project until the water permit has been
5-18     issued by the state and all motions for rehearing have been
5-19     overruled.
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 must include findings of the council made in
5-26     the periodic reviews of authorities during the preceding two-year
5-27     period and any other findings and recommendations the council
 6-1     considers necessary.
 6-2           Sec. 9.010.  ANALYSIS OF AUTHORITIES.  (a)  On a five-year
 6-3     cycle, each authority shall provide the council with the
 6-4     information required by Sections 9.011 and 9.012.  The information
 6-5     shall be provided to the council in the order of groups described
 6-6     in Subsection (b), with the information submitted by group 1 by the
 6-7     council's first quarterly meeting of the five-year period and group
 6-8     2 submitted by the council's third quarterly meeting of the period.
 6-9     The council shall continue in numerical order to receive the
6-10     information by each group at every other quarterly meeting until
6-11     all 10 groups have been completed and then shall recommence the
6-12     cycle.
6-13           (b)  Authorities shall provide the information under
6-14     Subsection (a) in the following groups:
6-15                 (1)  in group 1, Northeast Texas Municipal Water
6-16     District;
6-17                 (2)  in group 2, Angelina and Neches River Authority,
6-18     Lower Neches Valley Authority, Sabine River Authority, and Upper
6-19     Neches River Municipal Water Authority;
6-20                 (3)  in group 3, Red River Authority of Texas, Sulphur
6-21     River Municipal Water District, and Sulphur River Basin Authority;
6-22                 (4)  in group 4, San Jacinto River Authority, Gulf
6-23     Coast Water Authority, and North Harris County Regional Water
6-24     Authority;
6-25                 (5)  in group 5, North Texas Municipal Water District,
6-26     Tarrant Regional Water District, Trinity River Authority of Texas,
6-27     and Dallas County Utility and Reclamation District;
 7-1                 (6)  in group 6, Brazos River Authority, West Central
 7-2     Texas Municipal Water District, and North Central Texas Municipal
 7-3     Water Authority;
 7-4                 (7)  in group 7, Guadalupe-Blanco River Authority,
 7-5     Lavaca-Navidad River Authority, Lower Colorado River Authority, and
 7-6     Upper Guadalupe River Authority;
 7-7                 (8)  in group 8, Nueces River Authority, San Antonio
 7-8     River Authority, and Bexar-Medina-Atascosa Counties Water Control
 7-9     and Improvement District No. 1;
7-10                 (9)  in group 9, Colorado River Municipal Water
7-11     District, Central Colorado River Authority, and Upper Colorado
7-12     River Authority; and
7-13                 (10)  in group 10, Canadian River Municipal Water
7-14     Authority and Mackenzie Municipal Water Authority.
7-15           (c)  The council may not require an authority under this
7-16     section to submit the information required under Section 9.012 more
7-17     than once every five years.  The council may, however, request an
7-18     authority that has submitted information to provide follow-up
7-19     information on any specific item or issue raised during the initial
7-20     council analysis.
7-21           (d)  The council, on a request by an authority, may modify
7-22     the schedule in order to have the flexibility in scheduling the
7-23     information submittal and council analysis, if needed, to be more
7-24     responsive to particular circumstances, changing conditions, or
7-25     time-sensitive conflicts.
7-26           Sec. 9.011.  PERFORMANCE STANDARDS.  (a)    Before its
7-27     five-year analysis under Section 9.010, an authority shall report
 8-1     to the council a self-assessment of:
 8-2                 (1)  how the authority is achieving its stated mission
 8-3     and goals, including an identification of any barriers to achieving
 8-4     the mission and goals;
 8-5                 (2)  how the authority is providing service to its
 8-6     customers, including mechanisms the authority provides to encourage
 8-7     input from the public and its customers;
 8-8                 (3)  how the authority is addressing issues raised by
 8-9     its most recent management audit, if the audit is required by
8-10     commission rule to be performed, including its administrative
8-11     policies; and
8-12                 (4)  the authority's role in the regional water
8-13     planning process.
8-14           (b)  The authority's report to the council under this section
8-15     must include recommendations related to:
8-16                 (1)  any interregional issues the authority has
8-17     identified as problematic and any potential solutions to those
8-18     issues; and
8-19                 (2)  solutions to any barriers the authority determines
8-20     are interfering with the successful implementation of the approved
8-21     regional water plan or state water plan.
8-22           Sec. 9.012.  ADMINISTRATIVE POLICIES FOR AUTHORITIES.  The
8-23     commission shall expand the applicability of its rules under 30
8-24     T.A.C. Chapter 292 to include all the authorities subject to this
8-25     chapter.  The commission shall provide the council with copies of
8-26     the most recent information provided by each authority in
8-27     accordance with its administrative rules.
 9-1           Sec. 9.013.  GIFTS AND GRANTS.  The council may accept gifts
 9-2     and grants from any source to carry out the purposes of this
 9-3     chapter.  The use of gifts and grants other than legislative
 9-4     appropriations is subject only to limitations contained in the gift
 9-5     or grant.
 9-6           Sec. 9.014.  FUNDING.  (a)  The interagency water advisory
 9-7     account is a special account in the general revenue fund.
 9-8           (b)  The interagency water advisory account consists of
 9-9     legislative appropriations, gifts and grants received under Section
9-10     9.013, and other money required by law to be deposited in the
9-11     account.
9-12           (c)  Money in the interagency water advisory account may be
9-13     used only as provided by this chapter.
9-14           Sec. 9.015.  CONTINUING RIGHT OF SUPERVISION.  Nothing in
9-15     this chapter affects the continuing right of supervision over
9-16     authorities by the commission as provided by Section 12.081.
9-17           Sec. 9.016.  PUBLIC PARTICIPATION.  The council shall
9-18     encourage public input regarding the exercise of its powers and
9-19     duties under Section 9.008, its preparation of the report described
9-20     in Section 9.009, and its analysis of authorities under Sections
9-21     9.010 and 9.011.
9-22           Sec. 9.017.  DISSOLUTION OF COUNCIL AND ACCOUNT. Unless
9-23     extended by the 78th Texas Legislature, this chapter and the
9-24     interagency water advisory account expire on September 1, 2003.
9-25                  ARTICLE 2.  SURFACE WATER AND GROUNDWATER
9-26                CONJUNCTIVE MANAGEMENT; REGULATORY INCENTIVES
9-27           SECTION 2.01.  Section 11.002, Water Code, is amended by
 10-1    adding Subdivisions (11), (12), (13), and (14) to read as follows:
 10-2                (11)  "River basin" means a river or coastal basin
 10-3    designated by the board as a river basin under Section 16.051.  The
 10-4    term does not include the bays or arms of the Gulf of Mexico.
 10-5                (12)  "Agriculture" means any of the following
 10-6    activities:
 10-7                      (A)  cultivating the soil to produce crops for
 10-8    human food, animal feed, or planting seed or for the production of
 10-9    fibers;
10-10                      (B)  the practice of floriculture, viticulture,
10-11    silviculture, and horticulture, including the cultivation of plants
10-12    in containers or nonsoil media, by a nursery grower;
10-13                      (C)  raising, feeding, or keeping animals for
10-14    breeding purposes or for the production of food or fiber, leather,
10-15    pelts, or other tangible products having a commercial value;
10-16                      (D)  planting cover crops, including cover crops
10-17    cultivated for transplantation, or leaving land idle for the
10-18    purpose of participating in a governmental program or normal crop
10-19    or livestock rotation procedure; and
10-20                      (E)  raising or keeping equine animals.
10-21                (13)  "Agricultural use" means any use or activity
10-22    involving agriculture, including irrigation.
10-23                (14)  "Nursery grower" means a person who grows more
10-24    than 50 percent of the products that the person sells or leases,
10-25    regardless of the variety sold, leased, or grown.  For the purpose
10-26    of this definition, "grow" means the actual cultivation or
10-27    propagation of the product beyond the mere holding or maintaining
 11-1    of the item prior to sale or lease and typically includes
 11-2    activities associated with the production or multiplying of stock
 11-3    such as the development of new plants from cuttings, grafts, plugs,
 11-4    or seedlings.
 11-5          SECTION 2.02.  Section 11.023(a), Water Code, is amended to
 11-6    read as follows:
 11-7          (a)  State water may be appropriated, stored, or diverted
 11-8    for:
 11-9                (1)  domestic and municipal uses, including water for
11-10    sustaining human life and the life of domestic animals;
11-11                (2)  agricultural uses and industrial uses, meaning
11-12    processes designed to convert materials of a lower order of value
11-13    into forms having greater usability and commercial value, including
11-14    the development of power by means other than hydroelectric;
11-15                (3)  [irrigation;]
11-16                [(4)]  mining and recovery of minerals;
11-17                (4) [(5)]  hydroelectric power;
11-18                (5) [(6)]  navigation;
11-19                (6) [(7)]  recreation and pleasure;
11-20                (7) [(8)  stock raising;]
11-21                [(9)]  public parks; and
11-22                (8) [(10)]  game preserves.
11-23          SECTION 2.03.  Section 11.024, Water Code, is amended to read
11-24    as follows:
11-25          Sec. 11.024.  APPROPRIATION:  PREFERENCES.  In order to
11-26    conserve and properly utilize state water, the public welfare
11-27    requires not only recognition of beneficial uses but also a
 12-1    constructive public policy regarding the preferences between these
 12-2    uses, and it is therefore declared to be the public policy of this
 12-3    state that in appropriating state water preference shall be given
 12-4    to the following uses in the order named:
 12-5                (1)  domestic and municipal uses, including water for
 12-6    sustaining human life and the life of domestic animals, it being
 12-7    the public policy of the state and for the benefit of the greatest
 12-8    number of people that in the appropriation of water as herein
 12-9    defined, the appropriation of water for domestic and municipal uses
12-10    shall be and remain superior to the rights of the state to
12-11    appropriate the same for all other purposes;
12-12                (2)  agricultural uses and industrial uses, which means
12-13    [meaning] processes designed to convert materials of a lower order
12-14    of value into forms having greater usability and commercial value,
12-15    including the development of power by means other than
12-16    hydroelectric;
12-17                (3)  [irrigation;]
12-18                [(4)]  mining and recovery of minerals;
12-19                (4) [(5)]  hydroelectric power;
12-20                (5) [(6)]  navigation;
12-21                (6) [(7)]  recreation and pleasure; and
12-22                (7) [(8)]  other beneficial uses.
12-23          SECTION 2.04.  Section 11.038, Water Code, is amended to read
12-24    as follows:
12-25          Sec. 11.038.  RIGHTS OF OWNERS OF LAND ADJOINING CANAL, ETC.
12-26    (a)  A person who owns or holds a possessory interest in land
12-27    adjoining or contiguous to a canal, ditch, flume, lateral, dam,
 13-1    reservoir, or lake constructed and maintained under the provisions
 13-2    of this chapter and who has secured a right to the use of water in
 13-3    the canal, ditch, flume, lateral, dam, reservoir, or lake is
 13-4    entitled to be supplied from the canal, ditch, flume, lateral, dam,
 13-5    reservoir, or lake with water [for irrigation of the land and] for
 13-6    agricultural uses, mining, milling, manufacturing, development of
 13-7    power, and stock raising, in accordance with the terms of the
 13-8    person's [his] contract.
 13-9          (b)  If the person, association of persons, or corporation
13-10    owning or controlling the water and the person who owns or holds a
13-11    possessory interest in the adjoining land cannot agree on a price
13-12    for a permanent water right or for the use of enough water for
13-13    irrigation of the person's land or for agricultural uses, mining,
13-14    milling, manufacturing, development of power, or stock raising,
13-15    then the party owning or controlling the water, if the person [he]
13-16    has any water not contracted to others, shall furnish the water
13-17    necessary for these purposes at reasonable and nondiscriminatory
13-18    prices.
13-19          SECTION 2.05.  Section 11.085(p), Water Code, is amended to
13-20    read as follows:
13-21          (p)  [For the purposes of this section, a basin is designated
13-22    as provided in accordance with Section 16.051 of this code.]  A
13-23    river basin may not be redesignated in order to allow a transfer or
13-24    diversion of water otherwise in violation of this section.
13-25          SECTION 2.06.  Section 11.088, Water Code, is amended to read
13-26    as follows:
13-27          Sec. 11.088.  DESTRUCTION OF WATERWORKS.  No person may
 14-1    wilfully cut, dig, break down, destroy, or injure or open a gate,
 14-2    bank, embankment, or side of any ditch, canal, reservoir, flume,
 14-3    tunnel or feeder, pump or machinery, building, structure, or other
 14-4    work which is the property of another, or in which another owns an
 14-5    interest, or which is lawfully possessed or being used by another,
 14-6    and which is used for [irrigation,] milling, mining, manufacturing,
 14-7    the development of power, domestic purposes, agricultural uses, or
 14-8    stock raising, with intent to:
 14-9                (1)  maliciously injure a person, association,
14-10    corporation, water improvement or irrigation district;
14-11                (2)  gain advantage for himself; or
14-12                (3)  take or steal water or cause water to run out or
14-13    waste out of the ditch, canal, or reservoir, feeder, or flume for
14-14    his own advantage or to the injury of a person lawfully entitled to
14-15    the use of the water or the use or management of the ditch, canal,
14-16    tunnel, reservoir, feeder, flume, machine, structure, or other
14-17    irrigation work.
14-18          SECTION 2.07.  Section 11.122(a), Water Code, is amended to
14-19    read as follows:
14-20          (a)  All holders of permits, certified filings, and
14-21    certificates of adjudication issued under Section 11.323 of this
14-22    code shall obtain from the commission authority to change the place
14-23    of use, purpose of use, point of diversion, rate of diversion,
14-24    acreage to be irrigated, or otherwise alter a water right.  Without
14-25    obtaining an amendment, the holder of a permit, certified filing,
14-26    or certificate of adjudication that includes industrial or
14-27    irrigation use may use or supply water for an agricultural use that
 15-1    was classified as industrial or irrigation before September 1,
 15-2    2001.
 15-3          SECTION 2.08.  Section 11.134(b), Water Code, is amended to
 15-4    read as follows:
 15-5          (b)  The commission shall grant the application only if:
 15-6                (1)  the application conforms to the requirements
 15-7    prescribed by this chapter and is accompanied by the prescribed
 15-8    fee;
 15-9                (2)  unappropriated water is available in the source of
15-10    supply;
15-11                (3)  the proposed appropriation:
15-12                      (A)  is intended for a beneficial use;
15-13                      (B)  does not impair existing water rights or
15-14    vested riparian rights;
15-15                      (C)  is not detrimental to the public welfare;
15-16                      (D)  considers the assessments performed under
15-17    Sections 11.147(d) and (e) and Sections 11.150, 11.151, and 11.152
15-18    [effects of any hydrological connection between surface water and
15-19    groundwater]; and
15-20                      (E)  addresses a water supply need in a manner
15-21    that is consistent with the state water plan and the relevant [an
15-22    approved] regional water plan for any area in which the proposed
15-23    appropriation is located, unless the commission determines that
15-24    conditions warrant waiver of this requirement; and
15-25                (4)  the applicant has provided evidence that
15-26    reasonable diligence will be used to avoid waste and achieve water
15-27    conservation as defined by Subdivision (8)(B), Section 11.002[, of
 16-1    this code].
 16-2          SECTION 2.09.  Section 11.142, Water Code, is amended to read
 16-3    as follows:
 16-4          Sec. 11.142.  PERMIT EXEMPTIONS.  (a)  Without obtaining a
 16-5    permit, a person may construct on the person's [his] own property a
 16-6    dam or reservoir with normal storage of not more than 200 acre-feet
 16-7    of water for domestic and livestock purposes.
 16-8          (b)  Without obtaining a permit, a person may construct on
 16-9    the person's property a dam or reservoir with normal storage of not
16-10    more than 100 acre-feet of water for commercial and noncommercial
16-11    fish and wildlife purposes, other than aquaculture, if the property
16-12    on which the dam or reservoir will be constructed is qualified
16-13    open-space land, as defined by Section 23.51, Tax Code, on the
16-14    basis of its use for wildlife management.  In this subsection,
16-15    "aquaculture" has the meaning assigned by Section 134.001,
16-16    Agriculture Code.
16-17          (c)  Without obtaining a permit, a person who is drilling and
16-18    producing petroleum and conducting operations associated with
16-19    drilling and producing petroleum may take for those purposes state
16-20    water from the Gulf of Mexico and adjacent bays and arms of the
16-21    Gulf of Mexico in an amount not to exceed one acre-foot during each
16-22    24-hour period.
16-23          (d) [(c)]  Without obtaining a permit, a person may construct
16-24    or maintain a reservoir for the sole purpose of sediment control as
16-25    part of a surface coal mining operation under the Texas Surface
16-26    Coal Mining and Reclamation Act (Chapter 134, Natural Resources
16-27    Code [Article 5920-11, Vernon's Texas Civil Statutes]).
 17-1          SECTION 2.10.  Section 11.146, Water Code, is amended by
 17-2    adding Subsection (g) to read as follows:
 17-3          (g)  This section does not apply to a permit for construction
 17-4    of a reservoir designed for the storage of more than 50,000
 17-5    acre-feet of water.
 17-6          SECTION 2.11.  Section 11.147(b), Water Code, is amended to
 17-7    read as follows:
 17-8          (b)  In its consideration of an application for a permit to
 17-9    store, take, or divert water, the commission shall assess the
17-10    effects, if any, of the issuance of the permit on the bays and
17-11    estuaries of Texas.  For permits issued within an area that is 200
17-12    river miles of the coast, to commence from the mouth of the river
17-13    thence inland, the commission shall include in the permit, to the
17-14    extent practicable when considering all public interests and the
17-15    studies mandated by Section 16.058 as evaluated under Section
17-16    11.1491, those conditions considered necessary to maintain
17-17    beneficial inflows to any affected bay and estuary system.
17-18          SECTION 2.12.  Section 11.173(b), Water Code, is amended to
17-19    read as follows:
17-20          (b)  A permit, certified filing, or certificate of
17-21    adjudication or a portion of a permit, certified filing, or
17-22    certificate of adjudication is exempt from cancellation under
17-23    Subsection (a) [of this section]:
17-24                (1)  to the extent of the owner's participation in the
17-25    Conservation Reserve Program authorized by the Food Security Act,
17-26    Pub.L. No. 99-198, Secs. 1231-1236, 99 Stat. 1354, 1509-1514 (1985)
17-27    or a similar governmental program; [or]
 18-1                (2)  if a significant [any] portion of the water
 18-2    authorized to be used pursuant to a permit, certified filing, or
 18-3    certificate of adjudication has been used in accordance with a
 18-4    specific recommendation for meeting a water need included in the
 18-5    regional water plan approved pursuant to Section 16.053;
 18-6                (3)  if the permit, certified filing, or certificate of
 18-7    adjudication:
 18-8                      (A)  was obtained to meet demonstrated long-term
 18-9    public water supply or electric generation needs as evidenced by a
18-10    water management plan developed by the holder; and
18-11                      (B)  is consistent with projections of future
18-12    water needs contained in the state water plan; or
18-13                (4)  if the permit, certified filing, or certificate of
18-14    adjudication was obtained as the result of the construction of a
18-15    reservoir funded, in whole or in part, by the holder of the permit,
18-16    certified filing, or certificate of adjudication as part of the
18-17    holder's long-term water planning [of this code].
18-18          SECTION 2.13.  Section 11.177(b), Water Code, is amended to
18-19    read as follows:
18-20          (b)  In determining what constitutes reasonable diligence or
18-21    a justified nonuse as used in Subsection (a)(2) [of this section],
18-22    the commission shall give consideration to:
18-23                (1)  whether sufficient water is available in the
18-24    source of supply to meet all or part of the appropriation during
18-25    the 10-year period of nonuse;
18-26                (2)  whether the nonuse is justified by the holder's
18-27    participation in the federal Conservation Reserve Program or a
 19-1    similar governmental program as provided by Section 11.173(b)(1)
 19-2    [of this code];
 19-3                (3)  [whether the permit, certified filing, or
 19-4    certificate of adjudication was obtained to meet demonstrated
 19-5    long-term public water supply or electric generation needs as
 19-6    evidenced by a water management plan developed by the holder and
 19-7    consistent with projections of future water needs contained in the
 19-8    state water plan;]
 19-9                [(4)  whether the permit, certified filing, or
19-10    certificate of adjudication was obtained as the result of the
19-11    construction of a reservoir funded, in whole or in part, by the
19-12    holder of the permit, certified filing, or certificate of
19-13    adjudication as part of the holder's long-term water planning;]
19-14                [(5)]  whether the existing or proposed authorized
19-15    purpose and place of use are consistent with an approved regional
19-16    water plan as provided by Section 16.053 [of this code];
19-17                (4) [(6)]  whether the permit, certified filing, or
19-18    certificate of adjudication has been deposited into the Texas Water
19-19    Bank as provided by Sections 15.7031 and 15.704 [of this code] or
19-20    whether it can be shown that the water right or water available
19-21    under the right is currently being made available for purchase
19-22    through private marketing efforts; or
19-23                (5) [(7)]  whether the permit, certified filing, or
19-24    certificate of adjudication has been reserved to provide for
19-25    instream flows or bay and estuary inflows.
19-26          SECTION 2.14.  Section 15.701(2), Water Code, is amended to
19-27    read as follows:
 20-1                (2)  "Depositor" means a person who deposits or has on
 20-2    deposit a water right in the water bank or trust.
 20-3          SECTION 2.15.  Section 16.012, Water Code, is amended by
 20-4    adding Subsections (l) and (m) to read as follows:
 20-5          (l)  The executive administrator shall obtain or develop
 20-6    groundwater availability models for major and minor aquifers in
 20-7    coordination with groundwater conservation districts and regional
 20-8    water planning groups created under Section 16.053 that overlie the
 20-9    aquifers.  Modeling of major aquifers shall be completed not later
20-10    than October 1, 2004.  On completing a groundwater availability
20-11    model for an aquifer, the executive administrator shall provide the
20-12    model to each groundwater conservation district and each regional
20-13    water planning group created under Section 16.053 overlying that
20-14    aquifer.
20-15          (m)  The executive administrator may conduct surveys of
20-16    entities using groundwater and surface water at intervals
20-17    determined appropriate by the executive administrator to gather
20-18    data to be used for long-term water supply planning.  Recipients of
20-19    the survey shall complete and return the survey to the executive
20-20    administrator.  A person who fails to timely complete and return
20-21    the survey is not eligible for funding from the board for board
20-22    programs and is ineligible to obtain permits, permit amendments, or
20-23    permit renewals from the commission under Chapter 11.  A person who
20-24    fails to complete and return the survey commits an offense that is
20-25    punishable as a Class C misdemeanor.  Surveys obtained by the board
20-26    from nongovernmental entities are excepted from the requirements of
20-27    Section 552.021, Government Code, unless otherwise directed in
 21-1    writing by the person completing the survey.  This subsection does
 21-2    not apply to survey information regarding windmills used for
 21-3    domestic and livestock use.
 21-4          SECTION 2.16.  Sections 16.051(a), (d), (f), (g), and (h),
 21-5    Water Code, are amended to read as follows:
 21-6          (a)  Not [No] later than January 5, 2002, and before the end
 21-7    of each successive five-year period after that date [every five
 21-8    years thereafter], the board shall adopt a comprehensive state
 21-9    water plan that incorporates the regional water plans approved
21-10    under Section 16.053.  The state water plan shall provide for the
21-11    orderly development, management, and conservation of water
21-12    resources and preparation for and response to drought conditions,
21-13    in order that sufficient water will be available at a reasonable
21-14    cost to ensure public health, safety, and welfare; further economic
21-15    development; and protect the agricultural and natural resources of
21-16    the entire state.
21-17          (d)  The board, in coordination with the commission, the
21-18    Department of Agriculture, and the Parks and Wildlife Department,
21-19    shall adopt by rule guidance principles for the state water plan
21-20    which reflect the public interest of the entire state.  When
21-21    adopting guidance principles, due consideration shall be given to
21-22    the protection of agriculture and the natural resources of the
21-23    state, the construction and improvement of surface water resources,
21-24    and the application of principles that result in voluntary
21-25    redistribution of water resources.  The board shall review and
21-26    update the guidance principles, with input from the commission, the
21-27    Department of Agriculture, and the Parks and Wildlife Department,
 22-1    as necessary but at least every five years to coincide with the
 22-2    five-year cycle for adoption of a new water plan as described in
 22-3    Subsection (a).
 22-4          (f)  The legislature may designate a[:]
 22-5                [(1)]  river or stream segment of unique ecological
 22-6    value.  This designation solely means that a state agency or
 22-7    political subdivision of the state may not finance the actual
 22-8    construction of a reservoir in a specific river or stream segment
 22-9    designated by the legislature under this subsection.
22-10          (g)  The legislature may designate a[; or]
22-11                [(2)]  site of unique value for the construction of a
22-12    reservoir.
22-13          [(g)]  A state agency or political subdivision of the state
22-14    may not obtain a fee title or an easement that would[:]
22-15                [(1)  destroy the unique ecological value of a river or
22-16    stream segment designated by the legislature under Subsection (f)
22-17    of this section; or]
22-18                [(2)]  significantly prevent the construction of a
22-19    reservoir on a site designated by the legislature under [Subsection
22-20    (f) of] this subsection [section].
22-21          (h)  The board, the commission, or the Parks and Wildlife
22-22    Department or a political subdivision affected by an action taken
22-23    in violation of Subsection (f) or (g) [of this section] may bring a
22-24    cause of action to remedy or prevent the violation.  A cause of
22-25    action brought under this subsection must be filed in a district
22-26    court in Travis County or in the county in which the action is
22-27    proposed or occurring.
 23-1          SECTION 2.17.  Sections 16.053(d) and (e), Water Code, are
 23-2    amended to read as follows:
 23-3          (d)  The board shall provide guidelines for the consideration
 23-4    of existing regional planning efforts by regional water planning
 23-5    groups.  The board shall provide guidelines for the format in which
 23-6    information shall be presented in the regional water plans.  The
 23-7    board by rule shall require a holder of a surface water permit, a
 23-8    certified filing, or a certificate of adjudication for surface
 23-9    water, a holder of a permit for the export of groundwater from a
23-10    groundwater conservation district, a retail public water supplier,
23-11    a wholesale water provider, an irrigation district, and any other
23-12    person who is transporting groundwater or surface water 20 miles or
23-13    more to report to the board information on certain water pipelines
23-14    and other facilities that can be used for water conveyance.
23-15    Nothing in the initial planning effort shall prevent development of
23-16    a management plan or project where local or regional needs require
23-17    action prior to completion of the initial regional water plan under
23-18    this section.
23-19          (e)  Each regional water planning group shall submit to the
23-20    board a regional water plan that:
23-21                (1)  is consistent with the guidance principles for the
23-22    state water plan adopted by the board under Section 16.051(d);
23-23                (2)  provides information based on data provided or
23-24    approved by the board in a format consistent with the guidelines
23-25    provided by the board under Subsection (d);
23-26                (3)  identifies:
23-27                      (A)  each source of water supply in the regional
 24-1    water planning area in accordance with the guidelines provided by
 24-2    the board under Subsections (d) and (f);
 24-3                      (B)  factors specific to each source of water
 24-4    supply to be considered in determining whether to initiate a
 24-5    drought response; [and]
 24-6                      (C)  actions to be taken as part of the response;
 24-7    and
 24-8                      (D)  information on water pipelines and other
 24-9    facilities that can be used for water conveyance, including, but
24-10    not limited to, currently used and abandoned oil, gas, and water
24-11    pipelines, as provided by board rules and guidelines;
24-12                (4)  has specific provisions for water management
24-13    strategies to be used during a drought of record;
24-14                (5)  includes but is not limited to consideration of
24-15    the following:
24-16                      (A)  any existing water or drought planning
24-17    efforts addressing all or a portion of the region;
24-18                      (B)  certified groundwater conservation district
24-19    management plans and other plans submitted under Section 16.054;
24-20                      (C)  all potentially feasible water management
24-21    strategies, including but not limited to improved conservation,
24-22    reuse, and management of existing water supplies, acquisition of
24-23    available existing water supplies, and development of new water
24-24    supplies;
24-25                      (D)  protection of existing water rights in the
24-26    region;
24-27                      (E)  opportunities for and the benefits of
 25-1    developing regional water supply facilities or providing regional
 25-2    management of water supply facilities;
 25-3                      (F)  appropriate provision for environmental
 25-4    water needs and for the effect of upstream development on the bays,
 25-5    estuaries, and arms of the Gulf of Mexico and the effect of plans
 25-6    on navigation;
 25-7                      (G)  provisions in Section 11.085(k)(1) if
 25-8    interbasin transfers are contemplated;
 25-9                      (H)  voluntary transfer of water within the
25-10    region using, but not limited to, regional water banks, sales,
25-11    leases, options, subordination agreements, and financing
25-12    agreements; and
25-13                      (I)  emergency transfer of water under Section
25-14    11.139, including information on the part of each permit, certified
25-15    filing, or certificate of adjudication for nonmunicipal use in the
25-16    region that may be transferred without causing unreasonable damage
25-17    to the property of the nonmunicipal water rights holder; [and]
25-18                (6)  identifies river and stream segments of unique
25-19    ecological value and sites of unique value for the construction of
25-20    reservoirs that the regional water planning group recommends for
25-21    protection under Section 16.051;
25-22                (7)  assesses the impact of the plan on unique river
25-23    and stream segments identified in Subdivision (6) if the regional
25-24    water planning group determines that a site of unique ecological
25-25    value exists; and
25-26                (8)  describes the impact of proposed water projects on
25-27    water quality.
 26-1          SECTION 2.18.  Section 16.053(h)(7), Water Code, is amended
 26-2    to read as follows:
 26-3                (7)  The board may approve a regional water plan only
 26-4    after it has determined that:
 26-5                      (A)  [that] all interregional conflicts involving
 26-6    that regional water planning area have been resolved;
 26-7                      (B)  the plan includes water conservation
 26-8    practices and drought management measures incorporating, at a
 26-9    minimum, the provisions of Sections 11.1271 and 11.1272; and
26-10                      (C)  the plan is consistent with long-term
26-11    protection of the state's water resources, agricultural resources,
26-12    and natural resources as embodied in the guidance principles
26-13    adopted under Section 16.051(d).
26-14          SECTION 2.19.  Section 16.053, Water Code, is amended by
26-15    amending Subsection (j) and adding Subsections (p) and (q) to read
26-16    as follows:
26-17          (j)  The board may provide financial assistance to political
26-18    subdivisions under Subchapters E and F of this chapter, Subchapters
26-19    C, D, E, F, [and] J, O, and P, Chapter 15, and Subchapters D, I, K,
26-20    and L, Chapter 17, for water supply projects only if:
26-21                (1)  the board determines that the needs to be
26-22    addressed by the project will be addressed in a manner that is
26-23    consistent with the state water plan; and
26-24                (2)  beginning January 5, 2002, the board:
26-25                      (A)  has approved a regional water plan as
26-26    provided by Subsection (i), and any required updates of the plan,
26-27    for the region of the state that includes the area benefiting from
 27-1    the proposed project; and
 27-2                      (B)  determines that the needs to be addressed by
 27-3    the project will be addressed in a manner that is consistent with
 27-4    that regional water plan.
 27-5          (p)  If a groundwater conservation district files a petition
 27-6    with the board stating that a conflict requiring resolution may
 27-7    exist between the district's certified groundwater conservation
 27-8    district management plan developed under Section 36.1071 and the
 27-9    approved regional water plan, the board shall facilitate
27-10    coordination between the district and the involved region to
27-11    resolve the conflict.  If conflict remains, the board shall resolve
27-12    the conflict.  If the board determines that resolution of conflict
27-13    requires a revision of an approved regional water plan, the board
27-14    shall suspend the approval of that plan and provide information to
27-15    the regional water planning group.  The regional water planning
27-16    group shall prepare any revisions to its plan specified by the
27-17    board and shall hold, after notice, at least one public hearing at
27-18    some central location within the regional water planning area.  The
27-19    regional water planning group shall consider all public and board
27-20    comments, prepare, revise, and adopt its plan, and submit the
27-21    revised plan to the board for approval and inclusion in the state
27-22    water plan.  If the board determines that resolution of conflict
27-23    requires a revision of the district's certified groundwater
27-24    conservation district management plan, the board shall suspend the
27-25    certification of that plan and provide information to the district.
27-26    The groundwater district shall prepare any revisions to its plan
27-27    specified by the board and shall hold, after notice, at least one
 28-1    public hearing at some central location within the district.  The
 28-2    groundwater district shall consider all public and board comments,
 28-3    prepare, revise, and adopt its plan, and submit the revised plan to
 28-4    the board for certification.  On the request of the involved region
 28-5    or groundwater conservation district, the board shall include
 28-6    discussion of the conflict and its resolution in the state water
 28-7    plan that the board provides to the governor, the lieutenant
 28-8    governor, and the speaker of the house of representatives under
 28-9    Section 16.051(e).
28-10          (q)  Each regional planning group shall examine the financing
28-11    needed to implement the water management strategies and projects
28-12    identified in the group's most recent approved regional plan and,
28-13    not later than June 1, 2002, shall report to the board regarding:
28-14                (1)  how local governments, regional authorities, and
28-15    other political subdivisions in the region propose to pay for water
28-16    infrastructure projects identified in the plan; and
28-17                (2)  what role the regional planning group proposes for
28-18    the state in financing projects identified in the plan, giving
28-19    particular attention to proposed increases in the level of state
28-20    participation in funding for regional projects to meet needs beyond
28-21    the reasonable financing capability of local governments, regional
28-22    authorities, and other political subdivisions involved in building
28-23    water infrastructure.
28-24          SECTION 2.20.  Sections 16.054(a), (c), and (d), Water Code,
28-25    are amended to read as follows:
28-26          (a)  Notwithstanding the provisions of this subsection,
28-27    groundwater districts are the state's preferred method of managing
 29-1    groundwater resources.  It is the policy of the state that water
 29-2    resource management, water conservation, and drought planning
 29-3    should occur on an ongoing basis.  The board, commission, and Parks
 29-4    and Wildlife Department shall make available where appropriate
 29-5    technical and financial assistance for such planning.  In addition,
 29-6    the Department of Agriculture may provide input and assistance, as
 29-7    appropriate, for local water [such] planning.
 29-8          (c)  When preparing a plan to be submitted under this
 29-9    section, a person shall consider the implementation of a
29-10    desalination program if practicable.
29-11          (d)  The regional water planning group shall consider any
29-12    plan submitted under this section when preparing the regional water
29-13    plan under Section 16.053 of this code.  A political subdivision,
29-14    including a groundwater conservation district, in the regional
29-15    water planning area may request a regional water planning group to
29-16    consider specific changes to a regional water plan based on changed
29-17    conditions or new information.  The regional water planning group
29-18    shall consider the request and shall amend its regional water plan
29-19    if it determines that an amendment is warranted.  If the entity
29-20    requesting the change is dissatisfied with the decision of the
29-21    regional planning group, the entity may request that the board
29-22    review the decision and consider changing the state-approved
29-23    regional plan.
29-24          (e)  After January 5, 2002, when [(d)  When] preparing
29-25    individual water plans that address drought or the development,
29-26    management, or conservation of water resources from the holders of
29-27    existing permits, certified filings, or certificates of
 30-1    adjudication, the water suppliers, [groundwater districts,] special
 30-2    districts, irrigation districts, and other water users should
 30-3    ensure that the plan is not in conflict with the applicable
 30-4    approved regional water plan for their region.
 30-5          SECTION 2.21.  Section 35.002(11), Water Code, is amended to
 30-6    read as follows:
 30-7                (11)  "Management area" means an area designated and
 30-8    delineated by the Texas Water Development Board [commission] as an
 30-9    area suitable for management of groundwater resources.
30-10          SECTION 2.22.  Section 35.004, Water Code, is amended to read
30-11    as follows:
30-12          Sec. 35.004.  DESIGNATION OF GROUNDWATER MANAGEMENT AREAS.
30-13    (a)  The Texas Water Development Board, with assistance and
30-14    cooperation from the commission, shall designate groundwater
30-15    management areas covering all major and minor aquifers in the
30-16    state.  The initial designation of groundwater management areas
30-17    shall be completed not later than September 1, 2003 [On its own
30-18    motion from time to time, or on receiving a petition, the
30-19    commission may designate groundwater management areas].  Each
30-20    groundwater management area shall be designated with the objective
30-21    of providing the most suitable area for the management of the
30-22    groundwater resources.  To the extent feasible, the groundwater
30-23    management area shall coincide with the boundaries of a groundwater
30-24    reservoir or a subdivision of a groundwater reservoir.  The Texas
30-25    Water Development Board [commission] also may consider other
30-26    factors, including the boundaries of political subdivisions.
30-27          (b)  The commission may designate a groundwater management
 31-1    area after September 1, 2001, for a petition filed and accepted by
 31-2    the commission according to its rules in effect before September 1,
 31-3    2001.  The commission shall act on the designation in accordance
 31-4    with this section [On the request of any person interested in the
 31-5    petition, or on the request of the commission, the executive
 31-6    director shall prepare available evidence relating to the
 31-7    configuration of a groundwater management area.  Before making the
 31-8    designation, the commission shall consider the evidence prepared by
 31-9    the executive director and other evidence submitted at the
31-10    hearing].
31-11          (c)  The Texas Water Development Board [commission] may alter
31-12    the boundaries of designated management areas as required by future
31-13    conditions and as justified by factual data.  An alteration of
31-14    boundaries does not invalidate the previous creation of any
31-15    district.
31-16          (d)  The Texas Water Development Board [commission] shall
31-17    designate groundwater management areas using the procedures
31-18    applicable to rulemaking under [the Administrative Procedure Act,
31-19    Subchapter B,] Chapter 2001, Government Code.
31-20          SECTION 2.23.  Sections 35.007(a) and (f), Water Code, are
31-21    amended to read as follows:
31-22          (a)  The executive director and the executive administrator
31-23    shall meet periodically [at least once a year] to identify, based
31-24    on information gathered by the commission and the Texas Water
31-25    Development Board, those areas of the state that are experiencing
31-26    or that are expected to experience, within the immediately
31-27    following 25-year period, critical groundwater problems, including
 32-1    shortages of surface water or groundwater, land subsidence
 32-2    resulting from groundwater withdrawal, and contamination of
 32-3    groundwater supplies. Not later than September 1, 2005, the
 32-4    commission, with assistance and cooperation from the Texas Water
 32-5    Development Board, shall complete the initial designation of
 32-6    priority groundwater management areas across all major and minor
 32-7    aquifers of the state for all areas that meet the criteria for that
 32-8    designation.  The studies may be prioritized considering
 32-9    information from the regional planning process, information from
32-10    the Texas Water Development Board groundwater management areas and
32-11    from groundwater conservation districts, and any other information
32-12    available.  After the initial designation of priority groundwater
32-13    management areas, the commission and the Texas Water Development
32-14    Board shall annually review the need for additional designations as
32-15    provided by this subsection.
32-16          (f)  The report shall include:
32-17                (1)  the recommended delineation of the boundaries of
32-18    any proposed priority groundwater management area in the form of an
32-19    order to be considered for adoption by the commission;
32-20                (2)  the reasons and supporting information for or
32-21    against designating the area as a priority groundwater management
32-22    area;
32-23                (3)  a recommendation regarding whether one or more
32-24    districts [a district] should be created in the priority
32-25    groundwater management area, [or] whether the priority groundwater
32-26    management area should be added to an existing district, or whether
32-27    a combination of those actions should be taken;
 33-1                (4)  a recommendation as to actions that should be
 33-2    considered to conserve natural resources;
 33-3                (5)  an evaluation of information or studies submitted
 33-4    to the executive director under Subsection (c); and
 33-5                (6)  any other information that the executive director
 33-6    considers helpful to the commission.
 33-7          SECTION 2.24.  Section 35.008, Water Code, is amended to read
 33-8    as follows:
 33-9          Sec. 35.008.  PROCEDURES FOR DESIGNATION OF PRIORITY
33-10    GROUNDWATER MANAGEMENT AREA; CONSIDERATION OF CREATION OF NEW
33-11    DISTRICT OR ADDITION OF LAND IN PRIORITY GROUNDWATER MANAGEMENT
33-12    AREA TO EXISTING DISTRICT; COMMISSION ORDER.  (a)  The commission
33-13    shall designate priority groundwater management areas using the
33-14    procedures provided by this chapter in lieu of those provided by
33-15    Subchapter B, Chapter 2001, Government Code.
33-16          (b)  The commission shall call an evidentiary hearing to
33-17    consider:
33-18                (1)  the designation of a priority groundwater
33-19    management area; and
33-20                (2)  whether one or more districts [a district] should
33-21    be created over all or part of a priority groundwater management
33-22    area,[; or]
33-23                [(3)]  whether all or part of the land in the priority
33-24    groundwater management area should be added to an existing
33-25    district, or whether a combination of those actions should be
33-26    taken.
33-27          (c)  Evidentiary hearings shall be held at a location in one
 34-1    of the counties in which the priority groundwater management area
 34-2    is located, or proposed to be located, or in the nearest convenient
 34-3    location if adequate facilities are not available in those
 34-4    counties.
 34-5          (d)  At the hearing, the commission shall hear testimony and
 34-6    receive evidence from affected persons.  Affected persons include
 34-7    landowners and well owners in the proposed priority groundwater
 34-8    management area.  The commission shall consider the executive
 34-9    director's report and supporting information and the testimony and
34-10    evidence received at the hearing.  If the commission considers
34-11    further information necessary, the commission may request such
34-12    information from any source.
34-13          (e)  An evidentiary hearing shall be concluded not later than
34-14    the 75th day after the date notice of the hearing is published.
34-15          (f)  At the conclusion of the hearing and the commission's
34-16    considerations, the commission shall issue an order stating its
34-17    findings and conclusions, including whether a priority groundwater
34-18    management area should be designated in the area and
34-19    recommendations regarding district creation required by Subsection
34-20    (g).
34-21          (g)  The commission's order designating a priority
34-22    groundwater management area must recommend that the area be covered
34-23    by a district in one of the following ways, according to which
34-24    action is most feasible and practicable:
34-25                (1)  creation of one or more new districts;
34-26                (2)  addition of the land in the priority groundwater
34-27    management area to one or more existing districts; or
 35-1                (3)  a combination of actions under Subdivisions (1)
 35-2    and (2).
 35-3          (h)  In recommending the boundaries of a district or
 35-4    districts under Subsection (g), the commission shall give
 35-5    preference to boundaries that are coterminous with those of the
 35-6    priority groundwater management area, but may recommend district
 35-7    boundaries along existing political subdivision boundaries at the
 35-8    discretion of the commission to facilitate district creation and
 35-9    confirmation.
35-10          (i) [(e)]  The designation of a priority groundwater
35-11    management area may not be appealed nor may it be challenged under
35-12    Section 5.351 of this code or [the Administrative Procedure Act,]
35-13    Section 2001.038, Government Code.
35-14          SECTION 2.25.  Sections 35.009(a) and (b), Water Code, are
35-15    amended to read as follows:
35-16          (a)  The commission shall have notice of the hearing
35-17    published in at least one newspaper with general circulation in the
35-18    county or counties in which the area proposed for designation as a
35-19    priority groundwater management area [or the area within a priority
35-20    groundwater management area being considered for district creation
35-21    or for addition to an existing district] is located.  Notice must
35-22    be published not later than the 30th day before the date set for
35-23    the hearing [commission to consider the designation of the priority
35-24    groundwater management area, the creation of a district in a
35-25    priority groundwater management area, or the addition of land in a
35-26    priority groundwater management area to an existing district].
35-27          (b)  The notice must include:
 36-1                (1)  if applicable, a statement of the general purpose
 36-2    and effect of designating the proposed priority groundwater
 36-3    management area;
 36-4                (2)  if applicable, a statement of the general purpose
 36-5    and effect of creating a new district in the priority groundwater
 36-6    management area;
 36-7                (3)  if applicable, a statement of the general purpose
 36-8    and effect of adding all or part of the land in the priority
 36-9    groundwater management area to an existing district;
36-10                (4)  a map generally outlining the boundaries of the
36-11    area being considered for priority groundwater management area
36-12    designation [or the priority groundwater management area being
36-13    considered for district creation or for addition to an existing
36-14    district,] or notice of the location at which a copy of the map may
36-15    be examined or obtained;
36-16                (5)  a statement that the executive director's report
36-17    concerning the priority groundwater management area or proposed
36-18    area is available at the commission's main office in Austin, Texas,
36-19    and at regional offices of the commission for regions which include
36-20    territory within the priority groundwater management area or
36-21    proposed priority groundwater management area and that the report
36-22    is available for inspection during regular business hours;
36-23                (6)  a description or the name of the locations in the
36-24    affected area at which the commission has provided copies of the
36-25    executive director's report to be made available for public
36-26    inspection;
36-27                (7)  the name and address of each public library, each
 37-1    county clerk's office, and each district to which the commission
 37-2    has provided copies of the executive director's report; and
 37-3                (8)  the date, time, and place of the hearing.
 37-4          SECTION 2.26.  Section 35.012, Water Code, is amended to read
 37-5    as follows:
 37-6          Sec. 35.012.  CREATION OF DISTRICT IN PRIORITY GROUNDWATER
 37-7    MANAGEMENT AREA [COMMISSIONER ORDER].  (a)  [At the conclusion of
 37-8    its hearing and considerations, the commission shall issue an order
 37-9    stating its findings and conclusions.]
37-10          [(b)  If the commission finds that the land and other
37-11    property in the priority groundwater management area would benefit
37-12    from the creation of one or more districts, that there is a public
37-13    need for one or more districts, and that the creation of one or
37-14    more districts would further the public welfare, the commission
37-15    shall issue an order stating that the creation of one or more
37-16    districts is needed.]
37-17          [(c)]  Following the issuance of a commission order under
37-18    Section 35.008 designating a priority groundwater management area
37-19    and recommending the creation of one or more districts, or the
37-20    addition of land to an existing district [Subsection (b)], the
37-21    landowners in the priority groundwater management area may:
37-22                (1)  create one or more districts under Subchapter B,
37-23    Chapter 36;
37-24                (2)  have the area annexed to a district that adjoins
37-25    the area; or
37-26                (3)  create one or more districts through the
37-27    legislative process.
 38-1          (b)  Within two years, but not sooner than the 120th day
 38-2    after the date on which the commission issues an order under
 38-3    Section 35.008 designating a priority groundwater management area,
 38-4    for those areas that are not within a district the commission
 38-5    shall:
 38-6                (1)  create one or more new districts under Section
 38-7    36.0151;
 38-8                (2)  recommend that the areas, or a portion of the
 38-9    areas, be added to an existing district under Section 35.013; or
38-10                (3)  take any combination of the actions under
38-11    Subdivisions (1) and (2).
38-12          (c)  Following the issuance of a commission order under
38-13    Section 35.008 [(d)  The commission shall identify the areas
38-14    subject to the order of the commission issued under Subsection (b)
38-15    that have not been incorporated into a district and shall delineate
38-16    proposed boundaries of a district to include those areas.  If the
38-17    commission proposes the creation of one or more districts], the
38-18    Texas Agricultural Extension Service shall begin an educational
38-19    program within such areas with the assistance and cooperation of
38-20    the Texas Water Development Board, the commission, the Department
38-21    of Agriculture, other state agencies, and existing districts to
38-22    inform the residents of the status of the area's water resources
38-23    and management options including possible formation of a district[,
38-24    before beginning the procedures for creation of a district provided
38-25    in Subchapter B, Chapter 36].  The county commissioners court of
38-26    each county in the priority groundwater management area shall form
38-27    a steering committee to provide assistance to the Texas
 39-1    Agricultural Extension Service in accomplishing the goals of the
 39-2    education program within the area.
 39-3          [(e)  If the commission fails to find that the district would
 39-4    be a benefit to the land and other property within the priority
 39-5    groundwater management area, that there is a public need for the
 39-6    district, or that creation of the district will further the public
 39-7    welfare, the commission shall issue an order stating that a
 39-8    district should not be created within the boundaries of the
 39-9    priority groundwater management area.]
39-10          [(f)  An order of the commission issued under this section
39-11    may not be appealed.]
39-12          SECTION 2.27.  Section 35.013, Water Code, is amended to read
39-13    as follows:
39-14          Sec. 35.013.  ADDING PRIORITY GROUNDWATER MANAGEMENT AREA TO
39-15    EXISTING DISTRICT.  (a)  [If land in a priority groundwater
39-16    management area is located adjacent to one or more existing
39-17    districts, the commission, instead of issuing an order under
39-18    Section 35.012, may issue an order recommending that the priority
39-19    groundwater management area be added to the existing district
39-20    designated by the commission.  In its order, the commission must
39-21    find that the land and other property in the priority groundwater
39-22    management area and the land in the existing district will benefit
39-23    from the addition of the area, that there is a public need to add
39-24    the priority groundwater management area to the existing district,
39-25    and that the addition of the land to the existing district would
39-26    further the public welfare.]
39-27          [(b)]  If the commission in its order under Section 35.008
 40-1    [executive director] recommends that the priority groundwater
 40-2    management area or a portion of the priority groundwater management
 40-3    area be added to an existing district [or if the commission
 40-4    considers it possible to add the priority groundwater management
 40-5    area to an adjacent existing district], the commission shall give
 40-6    notice to the board of the existing district recommended in its
 40-7    order [by the executive director or considered by the commission to
 40-8    possibly serve the area] and to any other existing districts
 40-9    adjacent to the priority groundwater management area.
40-10          (b) [(c)]  The commission shall submit a copy of the order to
40-11    the board of the district to which it is recommending the priority
40-12    groundwater management area be added.  The board shall vote on the
40-13    addition of the priority groundwater management area to the
40-14    district and shall advise the commission of the outcome.
40-15          (c) [(d)]  If the board votes to accept the addition of the
40-16    priority groundwater management area to the district, the board:
40-17                (1)  may request the Texas Agricultural Extension
40-18    Service, the commission, and the Texas Water Development Board,
40-19    with the cooperation and assistance of the Department of
40-20    Agriculture and other state agencies, to administer an educational
40-21    program to inform the residents of the status of the area's water
40-22    resources and management options including possible annexation into
40-23    a district;
40-24                (2)  shall call an election within the priority
40-25    groundwater management area, or portion of the priority groundwater
40-26    management area, as delineated by the commission to determine if
40-27    the priority groundwater management area will be added to the
 41-1    district; and
 41-2                (3)  shall designate election precincts and polling
 41-3    places for the elections in the order calling an election under
 41-4    this subsection.
 41-5          (d) [(e)]  The board shall give notice of the election and
 41-6    the proposition to be voted on.  The board shall publish notice of
 41-7    the election at least one time in one or more newspapers with
 41-8    general circulation within the boundaries of the priority
 41-9    groundwater management area.  The notice must be published before
41-10    the 30th day preceding the date set for the election.
41-11          (e) [(f)]  The ballots for the election shall be printed to
41-12    provide for voting for or against the proposition:  "The inclusion
41-13    of _________________________ (briefly describe priority groundwater
41-14    management area) in the ______________ District."  If the district
41-15    has outstanding debts or taxes, the proposition shall include the
41-16    following language:  "and assumption by the described area of a
41-17    proportional share of the debts or taxes of the district."
41-18          (f) [(g)]  Immediately after the election, the presiding
41-19    judge of each polling place shall deliver the returns of the
41-20    election to the board, and the board shall canvass the returns for
41-21    the election within the priority groundwater management area and
41-22    declare the results.  If a majority of the voters in the priority
41-23    groundwater management area voting on the proposition vote in favor
41-24    of the proposition, the board shall declare that the priority
41-25    groundwater management area is added to the district.  If a
41-26    majority of the voters in the priority groundwater management area
41-27    voting on the proposition vote against adding the priority
 42-1    groundwater management area to the district, the board shall
 42-2    declare that the priority groundwater management area is not added
 42-3    to the district.  The board shall file a copy of the election
 42-4    results with the commission.
 42-5          (g) [(h)]  If the voters approve adding the priority
 42-6    groundwater management area to the district, the board of the
 42-7    district to which the priority groundwater management area is added
 42-8    shall provide reasonable representation on that board compatible
 42-9    with the district's existing scheme of representation.  Not later
42-10    than the 30th day after the date on which the board declares that
42-11    the priority groundwater management area is added to the district,
42-12    the board of the existing district shall appoint a person or
42-13    persons to represent the area until the next regularly scheduled
42-14    election or appointment of directors.
42-15          (h) [(i)]  If the proposition is defeated, or if the board of
42-16    the existing district votes not to accept the addition of the area
42-17    to the district, then the commission shall, except as provided
42-18    under Subsection (i), create under Section 36.0151 one or more
42-19    districts covering the priority groundwater management area not
42-20    later than the first anniversary of the date on which the
42-21    proposition is defeated or the board votes not to accept the area.
42-22          (i)  For an area that is not feasible for the creation of one
42-23    or more districts as determined in the commission's findings under
42-24    Section 35.008, the commission shall include in its report under
42-25    Section 35.018 recommendations for the future management of the
42-26    priority groundwater management area.
42-27          (j)  Another [another] election to add the priority
 43-1    groundwater management area to an existing district may not be
 43-2    called before the first anniversary of the date on which the
 43-3    election on the proposition was held.
 43-4          SECTION 2.28.  Section 35.018(c), Water Code, is amended to
 43-5    read as follows:
 43-6          (c)  If the commission determines that a district created
 43-7    under Chapter 36 is not appropriate for, or capable of, the
 43-8    protection of the groundwater resources for a particular management
 43-9    area or priority groundwater management area, the commission may
43-10    recommend in its report to the legislature the creation of a
43-11    special district or amendment of an existing district.  [(1)  If
43-12    voters fail to create a groundwater district in a priority
43-13    groundwater management area or if voters fail to add the priority
43-14    groundwater management area to an existing groundwater district,
43-15    the report shall include recommendations for the future management
43-16    of the priority groundwater management area.  The recommendations
43-17    may include but are not limited to the following:]
43-18                      [(A)  creation of a groundwater district by the
43-19    legislature;]
43-20                      [(B)  annexation of a priority groundwater
43-21    management area into an existing district by the legislature; or]
43-22                      [(C)  management of the priority groundwater
43-23    management area by the nearest regional office of the commission.
43-24    The commission may be authorized to:]
43-25                            [(i)  adopt spacing and annual per acre
43-26    pumping restrictions;]
43-27                            [(ii)  issue well permits in accordance
 44-1    with Sections 36.113 and 36.1131;]
 44-2                            [(iii)  prevent waste and protect the
 44-3    quality of groundwater in accordance with Sections
 44-4    36.001(8)(A)-(G);]
 44-5                            [(iv)  levy administrative penalties for
 44-6    violations; and]
 44-7                            [(v)  collect fees in accordance with
 44-8    Sections 36.206(a) and (b).]
 44-9                [(2)  If the commission is required by the legislature
44-10    to manage the priority groundwater management area, a new election
44-11    may not be called for three years from the date of the last
44-12    election.]
44-13          SECTION 2.29.  Section 36.001, Water Code, is amended by
44-14    amending Subdivision (13) and adding Subdivisions (18) through (22)
44-15    to read as follows:
44-16                (13)  "Management area" means an area designated and
44-17    delineated by the Texas Water Development Board [commission] under
44-18    Chapter 35 as an area suitable for management of groundwater
44-19    resources.
44-20                (18)  "River basin" means a river or coastal basin
44-21    designated as a river basin by the board under Section 16.051.  The
44-22    term does not include waters of the bays or arms originating in the
44-23    Gulf of Mexico.
44-24                (19)  "Agriculture" means any of the following
44-25    activities:
44-26                      (A)  cultivating the soil to produce crops for
44-27    human food, animal feed, or planting seed or for the production of
 45-1    fibers;
 45-2                      (B)  the practice of floriculture, viticulture,
 45-3    silviculture, and horticulture, including the cultivation of plants
 45-4    in containers or nonsoil media, by a nursery grower;
 45-5                      (C)  raising, feeding, or keeping animals for
 45-6    breeding purposes or for the production of food or fiber, leather,
 45-7    pelts, or other tangible products having a commercial value;
 45-8                      (D)  planting cover crops, including cover crops
 45-9    cultivated for transplantation, or leaving land idle for the
45-10    purpose of participating in any governmental program or normal crop
45-11    or livestock rotation procedure;
45-12                      (E)  wildlife management; and
45-13                      (F)  raising or keeping equine animals.
45-14                (20)  "Agricultural use" means any use or activity
45-15    involving agriculture, including irrigation.
45-16                (21)  "Conjunctive use" means the combined use of
45-17    groundwater and surface water sources that optimizes the beneficial
45-18    characteristics of each source.
45-19                (22)  "Nursery grower" means a person who grows more
45-20    than 50 percent of the products that the person either sells or
45-21    leases, regardless of the variety sold, leased, or grown.  For the
45-22    purpose of this definition, "grow" means the actual cultivation or
45-23    propagation of the product beyond the mere holding or maintaining
45-24    of the item prior to sale or lease and typically includes
45-25    activities associated with the production or multiplying of stock
45-26    such as the development of new plants from cuttings, grafts, plugs,
45-27    or seedlings.
 46-1          SECTION 2.30. Section 36.0015, Water Code, is amended to read
 46-2    as follows:
 46-3          Sec. 36.0015.  PURPOSE. In order to provide for the
 46-4    conservation, preservation, protection, recharging, and prevention
 46-5    of waste of groundwater, and of groundwater reservoirs or their
 46-6    subdivisions, and to control subsidence caused by withdrawal of
 46-7    water from those groundwater reservoirs or their subdivisions,
 46-8    consistent with the objectives of Section 59, Article XVI, Texas
 46-9    Constitution, groundwater conservation districts may be created as
46-10    provided by this chapter.  Groundwater conservation districts
46-11    created as provided by this chapter are the state's preferred
46-12    method of groundwater management through rules developed, adopted,
46-13    and promulgated by a district in accordance with the provisions of
46-14    this chapter.
46-15          SECTION 2.31.  Section 36.002, Water Code, is amended to read
46-16    as follows:
46-17          Sec. 36.002.  OWNERSHIP OF GROUNDWATER.  The ownership and
46-18    rights of the owners of the land and their lessees and assigns in
46-19    groundwater are hereby recognized, and nothing in this code shall
46-20    be construed as depriving or divesting the owners or their lessees
46-21    and assigns of the ownership or rights, except as those rights may
46-22    be limited or altered by [subject to] rules promulgated by a
46-23    district.
46-24          SECTION 2.32.  Section 36.011(b), Water Code, is amended to
46-25    read as follows:
46-26          (b)  The commission has exclusive jurisdiction over the
46-27    [delineation of management areas and the] creation of districts.
 47-1          SECTION 2.33.  Section 36.012, Water Code, is amended by
 47-2    adding Subsection (f) to read as follows:
 47-3          (f)  This section does not apply to districts created under
 47-4    Section 36.0151.
 47-5          SECTION 2.34.  Section 36.013, Water Code, is amended to read
 47-6    as follows:
 47-7          Sec. 36.013.  PETITION TO CREATE DISTRICT.  (a)  A petition
 47-8    requesting creation of a district must be filed with the commission
 47-9    [executive director] for review and certification under Section
47-10    36.015 [submission to the commission].
47-11          (b)  The petition filed pursuant to this section must be
47-12    signed by:
47-13                (1)  a majority of the landowners within the proposed
47-14    district, as indicated by the county tax rolls; or
47-15                (2)  if there are more than 50 landowners in the
47-16    proposed district, at least 50 of those landowners.
47-17          (c)  The petition must include:
47-18                (1)  the name of the proposed district;
47-19                (2)  the area and boundaries of the proposed district,
47-20    including a map generally outlining the boundaries of the proposed
47-21    district;
47-22                (3)  the purpose or purposes of the district;
47-23                (4)  a statement of the general nature of any projects
47-24    proposed to be undertaken by the district, the necessity and
47-25    feasibility of the work, and the estimated costs of those projects
47-26    according to the persons filing the projects if the projects are to
47-27    be funded by the sale of bonds or notes; [and]
 48-1                (5)  the names of at least five individuals qualified
 48-2    to serve as temporary directors; and
 48-3                (6)  financial information, including the projected
 48-4    maintenance tax or production fee rate and a proposed budget of
 48-5    revenues and expenses for the district [any additional terms or
 48-6    conditions that restrict the powers of the district from those
 48-7    provided in this chapter].
 48-8          [(d)  If a part of the proposed district is not included
 48-9    within either a management area or a priority groundwater
48-10    management area, the petition to create a district may also contain
48-11    a request to create a management area.  A request to create a
48-12    management area must comply with the requirements for a petition in
48-13    Section 35.005, and may be acted on by the commission separately
48-14    from the petition to create the district.]
48-15          SECTION 2.35.  Section 36.014, Water Code, is amended to read
48-16    as follows:
48-17          Sec. 36.014.  NOTICE AND PUBLIC MEETING [HEARING] ON DISTRICT
48-18    CREATION.  (a)  If a petition is filed under Section 36.013, the
48-19    commission shall give notice of the [an] application [as required
48-20    by Section 49.011(a)] and shall [may] conduct a public meeting in a
48-21    central location within the area of the proposed district [hearing]
48-22    on the application not later than the 60th day after the date the
48-23    commission issues notice [if the commission determines that a
48-24    hearing is necessary under Section 49.011].  The notice must
48-25    contain the date, time, and location of the public meeting and must
48-26    be published in one or more newspapers of general circulation in
48-27    the area of the proposed district.
 49-1          (b)  At the public meeting, the commission shall receive
 49-2    comments from interested persons. [If the petition contains a
 49-3    request to create a management area in all or part of the proposed
 49-4    district, the notice must also be given in accordance with the
 49-5    requirements in Section 35.006 for the designation of management
 49-6    areas.]
 49-7          SECTION 2.36.  Section 36.015, Water Code, is amended to read
 49-8    as follows:
 49-9          Sec. 36.015.  COMMISSION CERTIFICATION AND ORDER.  (a)  Not
49-10    later than the 90th day after the date the commission holds a
49-11    public meeting on a petition under Section 36.014, the commission
49-12    shall certify the petition if the petition is administratively
49-13    complete.  A petition is administratively complete if it complies
49-14    with the requirements of Sections 36.013(b) and (c).
49-15          (b)  The commission may not certify a petition if the
49-16    commission finds that the boundaries of the proposed district may
49-17    not allow for effective management of the groundwater resources.
49-18    The commission shall give preference to boundary lines that are
49-19    coterminous with those of a groundwater management area but may
49-20    also consider boundaries along existing political subdivision
49-21    boundaries if those boundaries would facilitate district creation
49-22    and confirmation.
49-23          (c)  If a petition proposes the creation of a district in an
49-24    area, in whole or in part, that has not been designated as a
49-25    management area, the commission shall provide notice to the Texas
49-26    Water Development Board.  On the receipt of notice from the
49-27    commission, the Texas Water Development Board shall initiate the
 50-1    process of designating a management area for the area of the
 50-2    proposed district not included in a management area.  The
 50-3    commission may not certify the petition until the Texas Water
 50-4    Development Board has adopted a rule whereby the boundaries of the
 50-5    proposed district are coterminous with or inside the boundaries of
 50-6    a management area.
 50-7          (d)  If the commission does not certify the petition, the
 50-8    commission shall provide to the petitioners, in writing, the
 50-9    reasons for not certifying the petition.  The petitioners may
50-10    resubmit the petition, without paying an additional fee, if the
50-11    petition is resubmitted within 90 days after the date the
50-12    commission sends the notice required by this subsection.
50-13          (e)  If the commission certifies the petition as
50-14    administratively complete, the commission shall issue an order,
50-15    notify the petitioners, and appoint temporary directors as provided
50-16    by Section 36.016.
50-17          (f)  Refusal by the commission to certify a petition to
50-18    create a district does not invalidate or affect the designation of
50-19    any management area.  [FINDINGS.  (a)  If the commission finds that
50-20    a district is feasible and practicable, that it would be a benefit
50-21    to the land in the district, and that it would be a public benefit
50-22    or utility, the commission shall issue an order containing these
50-23    findings granting the petition.]
50-24          [(b)  If the commission finds that a district is not feasible
50-25    and practicable, that it would not be a benefit to the land in the
50-26    district, that it would not be a public benefit or utility, or that
50-27    it is not needed, the commission by order shall deny the petition.]
 51-1          [(c)  The commission may adjust the boundaries of the
 51-2    proposed district to exclude any land that would not be benefited
 51-3    by inclusion in the district and is not necessary to the district
 51-4    for proper regulation of the groundwater reservoir.]
 51-5          [(d)  If the commission grants the petition to create the
 51-6    district, it shall direct in its order creating the district that
 51-7    an election be called by the temporary directors to confirm the
 51-8    creation of the district and to elect permanent directors.]
 51-9          [(e)  The refusal to grant a petition to create a district
51-10    does not invalidate or affect the designation of any management
51-11    area requested in the same petition.]
51-12          [(f)  The commission shall act on the petition within a
51-13    reasonable amount of time.]
51-14          SECTION 2.37.  Section 36.0151(a), Water Code, is amended to
51-15    read as follows:
51-16          (a)  If the commission is required to create [proposes that]
51-17    a district [be created] under Section 35.012(b) [35.012(d)], it
51-18    shall, without an evidentiary hearing, issue an order creating the
51-19    district and shall provide in its order [creating the district
51-20    provide] that temporary directors be appointed under Section 36.016
51-21    and that an election be called by the temporary directors to
51-22    authorize the district to assess taxes [confirm the creation of the
51-23    district] and to elect permanent directors.
51-24          SECTION 2.38.  Section 36.016(a), Water Code, is amended to
51-25    read as follows:
51-26          (a)  If the commission certifies [grants] a petition to
51-27    create a district under Section 36.015, the commission shall
 52-1    appoint the temporary directors named in the petition.  If [or
 52-2    after] the commission dissolves a district's board under Section
 52-3    36.303, it shall appoint five temporary directors.
 52-4          SECTION 2.39.  Section 36.017, Water Code, is amended by
 52-5    amending the section heading and Subsections (a), (d), and (g) and
 52-6    adding Subsection (i) to read as follows:
 52-7          Sec. 36.017.  CONFIRMATION AND DIRECTORS' ELECTION FOR
 52-8    DISTRICT IN A MANAGEMENT AREA.  (a)  For a district created under
 52-9    Section 36.015, not [Not] later than the 120th [60th] day after the
52-10    date all temporary directors have been appointed and have
52-11    qualified, the temporary directors shall meet and order an election
52-12    to be held within the boundaries of the proposed district to
52-13    approve the creation of the district and to elect permanent
52-14    directors.
52-15          (d)  The ballot for the election must be printed to provide
52-16    for voting for or against the proposition:  "The creation of the
52-17    _________________ Groundwater Conservation District."  If the
52-18    district levies a maintenance tax for payment of its expenses, then
52-19    an additional [the] proposition shall be included with [include]
52-20    the following language:  "The [and the] levy of a maintenance tax
52-21    at a rate not to exceed ______ cents for each $100 of assessed
52-22    valuation."  The same ballot or another ballot must provide for the
52-23    election of permanent directors, in accordance with Section 36.059.
52-24          (g)  If a majority of the votes cast at the election are
52-25    against the creation of the district, the temporary board shall
52-26    declare the district defeated and shall enter the result in its
52-27    minutes.  The temporary board shall continue operations in
 53-1    accordance with Subsection (h).
 53-2          (i)  If a majority of the votes cast at the election are
 53-3    against the levy of a maintenance tax, the district shall set
 53-4    production fees to pay for the district's regulation of groundwater
 53-5    in the district, including fees based on the amount of water to be
 53-6    withdrawn from a well.
 53-7          SECTION 2.40.  Subchapter B, Chapter 36, Water Code, is
 53-8    amended by adding Section 36.0171 to read as follows:
 53-9          Sec. 36.0171.  TAX AUTHORITY AND DIRECTORS' ELECTION FOR
53-10    DISTRICT IN A PRIORITY GROUNDWATER MANAGEMENT AREA.  (a)  For a
53-11    district created under Section 36.0151, not later than the 120th
53-12    day after the date all temporary directors have been appointed and
53-13    have qualified, the temporary directors shall meet and order an
53-14    election to be held within the boundaries of the proposed district
53-15    to authorize the district to assess taxes and to elect permanent
53-16    directors.
53-17          (b)  In the order calling the election, the temporary
53-18    directors shall designate election precincts and polling places for
53-19    the election.  In designating the polling places, the temporary
53-20    directors shall consider the needs of all voters for conveniently
53-21    located polling places.
53-22          (c)  The temporary directors shall publish notice of the
53-23    election at least once in at least one newspaper with general
53-24    circulation within the boundaries of the proposed district.  The
53-25    notice must be published before the 30th day preceding the date of
53-26    the election.
53-27          (d)  The ballot for the election must be printed to provide
 54-1    for voting for or against the proposition:  "The levy of a
 54-2    maintenance tax by the ___________________ Groundwater Conservation
 54-3    District at a rate not to exceed ______ cents for each $100 of
 54-4    assessed valuation."  The same ballot or another ballot must
 54-5    provide for the election of permanent directors, in accordance with
 54-6    Section 36.059.
 54-7          (e)  Immediately after the election, the presiding judge of
 54-8    each polling place shall deliver the returns of the election to the
 54-9    temporary board, and the board shall canvass the returns, declare
54-10    the result, and turn over the operations of the district to the
54-11    elected permanent directors.  The board shall file a copy of the
54-12    election result with the commission.
54-13          (f)  If a majority of the votes cast at the election favor
54-14    the levy of a maintenance tax, the temporary board shall declare
54-15    the levy approved and shall enter the result in its minutes.
54-16          (g)  If a majority of the votes cast at the election are
54-17    against the levy of a maintenance tax, the temporary board shall
54-18    declare the levy defeated and shall enter the result in its
54-19    minutes.
54-20          (h)  If the majority of the votes cast at the election are
54-21    against the levy of a maintenance tax, the district shall set
54-22    permit fees to pay for the district's regulation of groundwater in
54-23    the district, including fees based on the amount of water to be
54-24    withdrawn from a well.
54-25          SECTION 2.41.  Section 36.019, Water Code, is amended to read
54-26    as follows:
54-27          Sec. 36.019.  CONFIRMATION ELECTION IN DISTRICT INCLUDING
 55-1    LAND IN MORE THAN ONE COUNTY.  (a)  A district, the major portion
 55-2    of which is located in one county, may not be organized to include
 55-3    land in another county unless the election held in the other county
 55-4    to confirm and ratify the creation of the district is approved by a
 55-5    majority of the voters of the other county voting in an election
 55-6    called for that purpose.
 55-7          (b)  This section does not apply to districts created under
 55-8    Section 36.0151.
 55-9          SECTION 2.42. Section 36.060(a), Water Code, is amended to
55-10    read as follows:
55-11          (a)  A director is entitled to receive fees of office of not
55-12    more than $150 [$100] a day for each day the director actually
55-13    spends performing the duties of a director.  The fees of office may
55-14    not exceed $9,000 [$6,000] a year.
55-15          SECTION 2.43.  Section 36.066(g), Water Code, is amended to
55-16    read as follows:
55-17          (g)  If the district prevails in any suit other than a suit
55-18    in which it voluntarily intervenes, the district may seek and the
55-19    court shall grant [it may], in the same action, recovery [recover
55-20    reasonable fees] for attorney's fees [attorneys], costs for expert
55-21    witnesses, and other costs incurred by the district before the
55-22    court.  The amount of the attorney's fees shall be fixed by the
55-23    court.
55-24          SECTION 2.44.  Section 36.101(a), Water Code, is amended to
55-25    read as follows:
55-26          (a)  A district may make and enforce rules to provide for
55-27    conserving, preserving, protecting, and recharging of the
 56-1    groundwater or of a groundwater reservoir or its subdivisions in
 56-2    order to control subsidence, prevent degradation of water quality,
 56-3    or prevent waste of groundwater and to carry out the powers and
 56-4    duties provided by this chapter.
 56-5          SECTION 2.45.  Sections 36.102(b) and (d), Water Code, are
 56-6    amended to read as follows:
 56-7          (b)  The board by rule may set reasonable civil penalties for
 56-8    breach of any rule of the district [that shall] not to exceed
 56-9    $5,000 per day per violation, and each day of a continuing
56-10    violation constitutes a separate violation [the jurisdiction of a
56-11    justice court as provided by Section 27.031, Government Code].  In
56-12    addition to this penalty or any other penalty provided by law, the
56-13    district may seek and the court shall grant a penalty equal to 115
56-14    percent of the economic benefit gained from the violation.
56-15          (d)  If the district prevails in any suit to enforce its
56-16    rules, the district may seek and the court shall grant [it may], in
56-17    the same action, recovery [recover reasonable fees] for attorney's
56-18    fees [attorneys], costs for expert witnesses, and other costs
56-19    incurred by the district before the court.  The amount of the
56-20    attorney's fees shall be fixed by the court.
56-21          SECTION 2.46.  Section 36.1071, Water Code, is amended by
56-22    amending Subsections (a) and (b) and adding Subsection (h) to read
56-23    as follows:
56-24          (a)  Following notice and hearing, the district shall, in
56-25    coordination with surface water management entities on a regional
56-26    basis, develop a comprehensive management plan which addresses the
56-27    following management goals, as applicable:
 57-1                (1)  providing the most efficient use of groundwater;
 57-2                (2)  controlling and preventing waste of groundwater;
 57-3                (3)  controlling and preventing subsidence;
 57-4                (4)  addressing conjunctive surface water management
 57-5    issues; [and]
 57-6                (5)  addressing natural resource issues;
 57-7                (6)  addressing drought conditions; and
 57-8                (7)  addressing conservation.
 57-9          (b)  After January 5, 2002, a [A] district management plan,
57-10    or any amendments to a district management plan, shall be developed
57-11    by the district using the district's best available data and
57-12    forwarded to the regional water planning group for consideration in
57-13    their planning process [adopted after the Texas Water Development
57-14    Board approval of a regional water plan for the region in which the
57-15    district is located shall be consistent with the regional water
57-16    plan].
57-17          (h)  In developing its management plan, the district shall
57-18    use the groundwater availability modeling information provided by
57-19    the executive administrator in conjunction with any available
57-20    site-specific information provided by the district and acceptable
57-21    to the executive administrator.
57-22          SECTION 2.47.  Section 36.1072, Water Code, is amended by
57-23    adding Subsection (g) to read as follows:
57-24          (g)  In this subsection, "board" means the Texas Water
57-25    Development Board.  A person with a legally defined interest in
57-26    groundwater in a district or the regional water planning group may
57-27    file a petition with the board stating that a conflict requiring
 58-1    resolution may exist between the district's certified groundwater
 58-2    conservation district management plan developed under Section
 58-3    36.1071 and the state water plan.  If a conflict exists, the board
 58-4    shall facilitate coordination between the involved person or
 58-5    regional water planning group and the district to resolve the
 58-6    conflict.  If conflict remains, the board shall resolve the
 58-7    conflict.  The board action under this provision may be
 58-8    consolidated, at the option of the board, with related action under
 58-9    Section 16.053(p).  If the board determines that resolution of the
58-10    conflict requires a revision of the certified groundwater
58-11    conservation district management plan, the board shall suspend the
58-12    certification of the plan and provide information to the district.
58-13    The district shall prepare any revisions to the plan specified by
58-14    the board and shall hold, after notice, at least one public hearing
58-15    at some central location within the district.  The district shall
58-16    consider all public and board comments, prepare, revise, and adopt
58-17    its plan, and submit the revised plan to the board for
58-18    certification.  On the request of the district or the regional
58-19    water planning group, the board shall include discussion of the
58-20    conflict and its resolution in the state water plan that the board
58-21    provides to the governor, the lieutenant governor, and the speaker
58-22    of the house of representatives under Section 16.051(e).
58-23          SECTION 2.48.  Section 36.108, Water Code, is amended to read
58-24    as follows:
58-25          Sec. 36.108.  JOINT PLANNING IN MANAGEMENT AREA.  (a)  If two
58-26    or more districts are located within the boundaries of the same
58-27    management area, each district shall prepare a comprehensive
 59-1    management plan as required by Section 36.1071 covering that
 59-2    district's respective territory.  On completion and certification
 59-3    of the plan as required by Section 36.1072, each district shall
 59-4    forward a copy of the new or revised management plan to the other
 59-5    districts in the management area.  The boards of the districts
 59-6    shall consider the plans individually and shall compare them to
 59-7    other management plans then in force in the management area.
 59-8          (b)  The board of directors of each district in the
 59-9    management area may, by resolution, call for [a] joint planning
59-10    [meeting] with [the boards of directors of] the other districts in
59-11    the management area to review the management plans and
59-12    accomplishments for the management area.  [The boards shall meet to
59-13    consider the plans individually and shall compare them to other
59-14    management plans then in force in the management area.]  In
59-15    reviewing the management plans, the boards shall consider:
59-16                (1)  the goals of each management plan and its impact
59-17    on planning throughout the management area;
59-18                (2)  the effectiveness of the measures established by
59-19    each management plan for conserving and protecting groundwater and
59-20    preventing waste, and the effectiveness of these measures in the
59-21    management area generally; and
59-22                (3)  any other matters that the boards consider
59-23    relevant to the protection and conservation of groundwater and the
59-24    prevention of waste in the management area.
59-25          (c)  If a [A] joint meeting of the boards of directors is
59-26    called, the meeting must be held in accordance with [the Open
59-27    Meetings Act,] Chapter 551, Government Code.  Notice of the meeting
 60-1    shall be given in accordance with the requirements for notice of
 60-2    district board of directors meetings under that Act.  In addition,
 60-3    notice of the meeting shall be published not later than the 30th
 60-4    day before the date of the scheduled meeting in a newspaper with
 60-5    general circulation in each county in the management area.
 60-6          (d)  A district in the management area may file with good
 60-7    cause a petition with the commission requesting an inquiry if the
 60-8    petitioner district adopted a resolution calling for joint planning
 60-9    and the other district or districts refused to join in the planning
60-10    process or the process failed to result in adequate planning, and
60-11    the petition provides evidence [believes] that:
60-12                (1)  another district in the management area has failed
60-13    to adopt rules;
60-14                (2)  the groundwater in the management area is not
60-15    adequately protected by the rules adopted by another district; or
60-16                (3)  the groundwater in the management area is not
60-17    adequately protected due to the failure of another district to
60-18    enforce substantial compliance with its rules.
60-19          (e)  Not later than the 90th day after the date the petition
60-20    is filed, the commission shall review the petition and either:
60-21                (1)  dismiss it if it finds that the evidence is not
60-22    adequate to show that any of the conditions alleged in the petition
60-23    exist; or
60-24                (2)  select a review panel as provided in Subsection
60-25    (f).
60-26          (f)  If the petition is not dismissed under Subsection (e),
60-27    the [The] commission shall [may] appoint a review panel consisting
 61-1    of a chairman and four other members.  A director or general
 61-2    manager of a district located outside the management area that is
 61-3    the subject of the petition may be appointed to the review panel.
 61-4    The commission may not appoint more than two members of the review
 61-5    panel from any one district.  The commission also shall appoint a
 61-6    disinterested person to serve as a nonvoting recording secretary
 61-7    for the review panel.  The recording secretary may be an employee
 61-8    of the commission.  The recording secretary shall record and
 61-9    document the proceedings of the panel.
61-10          (g)  Not later than the 120th day after appointment, the
61-11    review panel shall review the petition and any evidence relevant to
61-12    the petition and, in a public meeting, consider and adopt [prepare]
61-13    a report to be submitted to the commission.  The commission may
61-14    direct the review panel to conduct public hearings at a location in
61-15    the management area to take evidence on the petition.  The review
61-16    panel may attempt to negotiate a settlement or resolve the dispute
61-17    by any lawful means.
61-18          (h)  In its report, the review panel shall include:
61-19                (1)  a summary of all evidence taken in any hearing on
61-20    the petition;
61-21                (2)  a list of findings and recommended actions
61-22    appropriate for the commission to take and the reasons it finds
61-23    those actions appropriate; and
61-24                (3)  any other information the panel considers
61-25    appropriate.
61-26          (i)  The review panel shall submit its report to the
61-27    commission.
 62-1          (j)  Districts located within the same management areas or in
 62-2    adjacent management areas may contract to jointly conduct studies
 62-3    or research, or to construct projects, under terms and conditions
 62-4    that the districts consider beneficial.  These joint efforts may
 62-5    include studies of groundwater availability and quality, aquifer
 62-6    modeling, and the interaction of groundwater and surface water;
 62-7    educational programs; the purchase and sharing of equipment; and
 62-8    the implementation of projects to make groundwater available,
 62-9    including aquifer recharge, brush control, weather modification,
62-10    desalination, regionalization, and treatment or conveyance
62-11    facilities.  The districts may contract under their existing
62-12    authorizations including those of Chapter 791, Government Code, if
62-13    their contracting authority is not limited by Sections
62-14    791.011(c)(2) and (d)(3) and Section 791.014, Government Code.
62-15          SECTION 2.49.  Section 36.113, Water Code, is amended by
62-16    amending Subsection (d), adding a new Subsection (e), and
62-17    relettering existing Subsections (e) and (f) as Subsections (f) and
62-18    (g) to read as follows:
62-19          (d)  Before granting or denying a permit, the district shall
62-20    consider whether:
62-21                (1)  the application conforms to the requirements
62-22    prescribed by this chapter and is accompanied by the prescribed
62-23    fees;
62-24                (2)  the proposed use of water unreasonably affects
62-25    existing groundwater and surface water resources or existing permit
62-26    holders;
62-27                (3)  the proposed use of water is dedicated to any
 63-1    beneficial use;
 63-2                (4)  the proposed use of water is consistent with the
 63-3    district's certified water management plan;
 63-4                (5)  the applicant has agreed to avoid waste and
 63-5    achieve water conservation; and
 63-6                (6)  the applicant has agreed that reasonable diligence
 63-7    will be used to protect groundwater quality and that the applicant
 63-8    will follow well plugging guidelines at the time of well closure.
 63-9          (e)  The district may impose more restrictive permit
63-10    conditions on new permit applications and increased use by historic
63-11    users if the limitations:
63-12                (1)  apply to all subsequent new permit applications
63-13    and increased use by historic users, regardless of type or location
63-14    of use;
63-15                (2)  bear a reasonable relationship to the existing
63-16    district management plan; and
63-17                (3)  are reasonably necessary to protect existing use.
63-18          (f)  Permits may be issued subject to the rules promulgated
63-19    by the district and subject to terms and provisions with reference
63-20    to the drilling, equipping, completion, or alteration of wells or
63-21    pumps that may be necessary to prevent waste and achieve water
63-22    conservation, minimize as far as practicable the drawdown of the
63-23    water table or the reduction of artesian pressure, lessen
63-24    interference between wells, or control and prevent subsidence.
63-25          (g) [(f)]  A district may require that changes in the
63-26    withdrawal and use of groundwater under a permit not be made
63-27    without the prior approval of a permit amendment issued by the
 64-1    district.
 64-2          SECTION 2.50.  Section 36.116, Water Code, is amended to read
 64-3    as follows:
 64-4          Sec. 36.116.  REGULATION OF SPACING AND PRODUCTION.  (a)  In
 64-5    order to minimize as far as practicable the drawdown of the water
 64-6    table or the reduction of artesian pressure, to control subsidence,
 64-7    to prevent interference between wells, to prevent degradation of
 64-8    water quality, or to prevent waste, provided that agriculture,
 64-9    municipal and the natural resources are protected, a district by
64-10    rule may regulate:
64-11                (1)  [provide for] the spacing of water wells by:
64-12                      (A)  requiring all water wells to be spaced a
64-13    certain distance from property lines or adjoining wells;
64-14                      (B)  requiring wells with a certain production
64-15    capacity, pump size, or other characteristic related to the
64-16    construction or operation of and production from a well to be
64-17    spaced a certain distance from property lines or adjoining wells;
64-18    or
64-19                      (C)  imposing spacing requirements adopted by the
64-20    board; and
64-21                (2)  the production of groundwater by:
64-22                      (A)  setting production limits on wells;
64-23                      (B)  limiting the amount of water produced based
64-24    on acreage or tract size;
64-25                      (C)  limiting the amount of water that may be
64-26    produced from a defined number of acres assigned to an authorized
64-27    well site;
 65-1                      (D)  limiting the maximum amount of water that
 65-2    may be produced on the basis of acre-feet per acre or gallons per
 65-3    minute per well site; or
 65-4                      (E)  any combination of the above [and may
 65-5    regulate the production of wells].
 65-6          (b)  In promulgating any rules limiting groundwater
 65-7    production, the district may preserve historic use before the
 65-8    effective date of the rules to the maximum extent practicable
 65-9    consistent with the district's comprehensive management plan under
65-10    Section 36.1071.
65-11          (c)  In regulating the production of groundwater based on
65-12    tract size or acreage, a district may consider the service area or
65-13    service needs of a retail water utility.  For purposes of this
65-14    subsection, "retail water utility" shall have the meaning provided
65-15    at Section 13.002.
65-16          SECTION 2.51.  Section 36.117, Water Code, is amended to read
65-17    as follows:
65-18          Sec. 36.117.  EXEMPTIONS; EXCEPTION; LIMITATIONS.  (a)  A
65-19    district may exempt wells from the requirement of obtaining
65-20    [requirements to obtain] a drilling permit, an operating permit, or
65-21    any other permit required by this chapter or the district's rules.
65-22          (b)  A district may not require any [a] permit issued by the
65-23    district for:
65-24                (1)  [drilling or producing from] a well used solely
65-25    for domestic use or for providing water for livestock or poultry on
65-26    a tract of land larger than 10 acres that is either drilled,
65-27    completed, or equipped so that it is incapable of producing more
 66-1    than 25,000 gallons of groundwater a day;
 66-2                (2)  the drilling of a water well used solely to supply
 66-3    water for a rig that is actively engaged in drilling or exploration
 66-4    operations for an oil or gas well permitted by the Railroad
 66-5    Commission of Texas provided that the person holding the permit is
 66-6    responsible for drilling and operating the water well and the well
 66-7    is located on the same lease or field associated with the drilling
 66-8    rig; or [alteration of the size of a well or to restrict the
 66-9    production of a well if the water produced or to be produced from
66-10    the well is used or to be used to supply the domestic needs of 10
66-11    or fewer households and a person who is a member of each household
66-12    is either the owner of the well, a person related to the owner or a
66-13    member of the owner's household within the second degree by
66-14    consanguinity, or an employee of the owner;]
66-15                (3)  the drilling of a water well authorized under a
66-16    permit issued by the Railroad Commission of Texas under Chapter
66-17    134, Natural Resources Code, or for production from such a well to
66-18    the extent the withdrawals are required for mining activities
66-19    regardless of any subsequent use of the water.  [or alteration of
66-20    the size of a well or to restrict the production from the well if
66-21    the water produced or to be produced from the well is used or to be
66-22    used to provide water for feeding livestock and poultry connected
66-23    with farming, ranching, or dairy enterprises; or]
66-24                [(4)  water wells to supply water for hydrocarbon
66-25    production activities, regardless of whether those wells are
66-26    producing, that are associated with any well permitted by the
66-27    Railroad Commission of Texas drilled before September 1, 1985.]
 67-1          [(b)  The board shall adopt rules determining the
 67-2    applicability of Subsection (a)(3) to facilities used primarily for
 67-3    feeding livestock.]
 67-4          (c)  [The district shall not deny the owner of a tract of
 67-5    land, or his lessee, who has no well equipped to produce more than
 67-6    25,000 gallons a day on the tract, either a permit to drill a well
 67-7    on his land or the privilege to produce groundwater from his land,
 67-8    subject to the rules of the district.]
 67-9          [(d)]  A district may not restrict the production of any well
67-10    that is exempt from permitting under Subsection (b)(1) [equipped to
67-11    produce 25,000 gallons or less a day].
67-12          (d)  Notwithstanding Subsection (b), a district may require a
67-13    well to be permitted by the district and to comply with all
67-14    district rules if:
67-15                (1)  the purpose of a well exempted under Subsection
67-16    (b)(2) is no longer solely to supply water for a rig that is
67-17    actively engaged in drilling or exploration operations for an oil
67-18    or gas well permitted by the Railroad Commission of Texas; or
67-19                (2)  the withdrawals from a well exempted under
67-20    Subsection (b)(3) are no longer necessary for mining activities or
67-21    are greater than the amount necessary for mining activities
67-22    specified in the permit issued by the Railroad Commission of Texas
67-23    under Chapter 134, Natural Resources Code.
67-24          (e)  An entity holding a permit issued by the Railroad
67-25    Commission of Texas under Chapter 134, Natural Resources Code, that
67-26    authorizes the drilling of a water well shall report monthly to the
67-27    district:
 68-1                (1)  the total amount of water withdrawn during the
 68-2    month;
 68-3                (2)  the quantity of water necessary for mining
 68-4    activities; and
 68-5                (3)  the quantity of water withdrawn for other
 68-6    purposes.  [Nothing in this chapter applies to wells drilled for
 68-7    oil, gas, sulphur, uranium, or brine, or for core tests, or for
 68-8    injection of gas, saltwater, or other fluid, or for any other
 68-9    purpose, under permits issued by the Railroad Commission of Texas.
68-10    A district may not require a drilling permit for a well to supply
68-11    water for drilling any wells permitted by the Railroad Commission
68-12    of Texas.  Any well that ceases to be used for these purposes and
68-13    is then used as an ordinary water well is subject to the rules of
68-14    the district.  Water wells drilled after September 1, 1997, to
68-15    supply water for hydrocarbon production activities must meet the
68-16    spacing requirements of the district unless no space is available
68-17    within 300 feet of the production well or the central injection
68-18    station.]
68-19          (f)  Notwithstanding Subsection (d), a district may not
68-20    require a well exempted under Subsection (b)(3) to comply with the
68-21    spacing requirements of the district. [Water wells exempted under
68-22    this section shall be equipped and maintained so as to conform to
68-23    the district's rules requiring installation of casing, pipe, and
68-24    fittings to prevent the escape of groundwater from a groundwater
68-25    reservoir to any reservoir not containing groundwater and to
68-26    prevent the pollution or harmful alteration of the character of the
68-27    water in any groundwater reservoir.]
 69-1          (g)  A district may not deny an application for a permit to
 69-2    drill and produce water for hydrocarbon production activities if
 69-3    the application meets all applicable rules as promulgated by the
 69-4    district.
 69-5          (h)  A [shall require] water well [wells] exempted under
 69-6    Subsection (a) or (b) shall:
 69-7                (1)  [this section to] be registered in accordance with
 69-8    rules promulgated by the district; and
 69-9                (2)  [before drilling.  All exempt water wells shall]
69-10    be equipped and maintained so as to conform to the district's rules
69-11    requiring installation of casing, pipe, and fittings to prevent the
69-12    escape of groundwater from a groundwater reservoir to any reservoir
69-13    not containing groundwater and to prevent the pollution or harmful
69-14    alteration of the character of the water in any groundwater
69-15    reservoir.
69-16          (i)  The driller of a well exempted under Subsection (a) or
69-17    (b) shall file the drilling log with the district.
69-18          (j) [(h)]  A well to supply water for a subdivision of land
69-19    for which a plat approval is required by Chapter 232, Local
69-20    Government Code, [law] is not exempted under Subsection (b) [this
69-21    section].
69-22          (k)  Groundwater withdrawn from a well exempt from permitting
69-23    or regulation under this section and subsequently transported
69-24    outside the boundaries of the district is subject to any applicable
69-25    production and export fees under Sections 36.122 and 36.205.
69-26          (l)  This section applies to water wells, including water
69-27    wells used to supply water for activities related to the
 70-1    exploration or production of hydrocarbons or minerals.  This
 70-2    section does not apply to production or injection wells drilled for
 70-3    oil, gas, sulphur, uranium, or brine, or for core tests, or for
 70-4    injection of gas, saltwater, or other fluids, under permits issued
 70-5    by the Railroad Commission of Texas.
 70-6          SECTION 2.52.  Section 36.122, Water Code, is amended to read
 70-7    as follows:
 70-8          Sec. 36.122.  TRANSFER OF GROUNDWATER OUT OF DISTRICT.
 70-9    (a)  If an application for a permit or an amendment to a permit
70-10    under Section 36.113 proposes the transfer of groundwater outside
70-11    of a district's boundaries, the district may also consider the
70-12    provisions of this section in determining whether to grant or deny
70-13    the permit or permit amendment.
70-14          (b)  A district may promulgate rules requiring a person to
70-15    obtain a permit or an amendment to a permit under Section 36.113
70-16    from the district for the transfer of groundwater out of the
70-17    district to:
70-18                (1)  increase, on or after March 2, 1997, the amount of
70-19    groundwater to be transferred under a continuing arrangement in
70-20    effect before that date; or
70-21                (2)  transfer groundwater out of the district on or
70-22    after March 2, 1997, under a new arrangement.
70-23          (c)  Except as provided in Section 36.113(e), the district
70-24    may not impose more restrictive permit conditions on transporters
70-25    than the district imposes on existing in-district users.
70-26          (d) [(b)]  The district may impose a reasonable fee for
70-27    processing an application [for a permit] under this section.  The
 71-1    fee may not exceed fees that the district imposes for processing
 71-2    other applications under Section 36.113.  An application filed to
 71-3    comply with this section shall be considered and processed under
 71-4    the same procedures as other applications for permits under Section
 71-5    36.113 and shall be combined with applications filed to obtain a
 71-6    permit for in-district water use under Section 36.113 from the same
 71-7    applicant.
 71-8          (e)  The district may impose a reasonable fee or surcharge
 71-9    for an export fee using one of the following methods:
71-10                (1)  a fee negotiated between the district and the
71-11    transporter;
71-12                (2)  a rate not to exceed the equivalent of the
71-13    district's tax rate per hundred dollars of valuation for each
71-14    thousand gallons of water transferred out of the district or 2.5
71-15    cents per thousand gallons of water, if the district assesses a tax
71-16    rate of less than 2.5 cents per hundred dollars of valuation; or
71-17                (3)  for a fee-based district, a 50 percent export
71-18    surcharge, in addition to the district's production fee, for water
71-19    transferred out of the district.
71-20          (f) [(c)  Before issuing a permit under this section, the
71-21    district must give notice of the application and hold a public
71-22    hearing.]
71-23          [(d)]  In reviewing a proposed transfer of groundwater out of
71-24    the district [determining whether to issue a permit under this
71-25    section], the district shall consider:
71-26                (1)  the availability of water in the district and in
71-27    the proposed receiving area during the period for which the water
 72-1    supply is requested;
 72-2                (2)  [the availability of feasible and practicable
 72-3    alternative supplies to the applicant;]
 72-4                [(3)  the amount and purposes of use in the proposed
 72-5    receiving area for which water is needed;]
 72-6                [(4)]  the projected effect of the proposed transfer on
 72-7    aquifer conditions, depletion, subsidence, or effects on existing
 72-8    permit holders or other groundwater users within the district; and
 72-9                (3) [(5)]  the approved regional water plan and
72-10    certified district management plan.
72-11          (g) [(e)]  The district may not deny a permit based on the
72-12    fact that the applicant seeks to transfer groundwater outside of
72-13    the district but may limit a permit issued under this section if
72-14    conditions in Subsection (f) [(d)] warrant the limitation, subject
72-15    to Subsection (c).
72-16          (h) [(f)]  In addition to conditions provided by Section
72-17    36.1131, the permit shall specify:
72-18                (1)  the amount of water that may be transferred out of
72-19    the district; and
72-20                (2)  the period for which the water may be transferred.
72-21          (i)  The period specified by Subsection (h)(2) shall be:
72-22                (1)  at least three years if construction of a
72-23    conveyance system has not been initiated prior to the issuance of
72-24    the permit; or
72-25                (2)  at least 30 years if construction of a conveyance
72-26    system has been initiated prior to the issuance of the permit.
72-27          (j)  A term of five years under Subsection (i) shall
 73-1    automatically be extended to 30 years if construction of a
 73-2    conveyance system is begun before the expiration of the initial
 73-3    five-year term.
 73-4          (k)  Notwithstanding the period specified in Subsections (i)
 73-5    and (j) during which water may be transferred under a permit, a
 73-6    district may periodically review the amount of water that may be
 73-7    transferred under the permit and may limit the amount if additional
 73-8    factors considered in Subsection (f) warrant the limitation,
 73-9    subject to Subsection (c).  The review described by this subsection
73-10    may take place not more frequently than the period provided for the
73-11    review or renewal of regular permits issued by the district.  In
73-12    its determination of whether to renew a permit issued under this
73-13    section, the district shall consider relevant and current data for
73-14    the conservation of groundwater resources and shall consider the
73-15    permit in the same manner it would consider any other permit in the
73-16    district.
73-17          (l)  A district is prohibited from using revenues obtained
73-18    under Subsection (e) to prohibit the transfer of groundwater
73-19    outside of a district.  A district is not prohibited from using
73-20    revenues obtained under Subsection (e) for paying expenses related
73-21    to enforcement of this chapter or district rules.
73-22          (m) [(g)]  A district may not prohibit the export of
73-23    groundwater if the purchase was in effect on or before June 1,
73-24    1997.
73-25          (n) [(h)]  This section applies only to a transfer of water
73-26    that is initiated or increased after September 1, 1997 [the
73-27    effective date of this section].
 74-1          (o) [(i)]  A district shall adopt rules as necessary to
 74-2    implement this section but may not adopt rules expressly
 74-3    prohibiting the export of groundwater.
 74-4          (p)  Subsection (e) does not apply to a district that is
 74-5    collecting an export fee or surcharge on March 1, 2001.
 74-6          (q)  For the purposes of this subsection, "retail public
 74-7    utility" and "retail public utilities" are defined by Section
 74-8    13.002.  A district may determine that a transfer of groundwater
 74-9    produced within the district's boundaries for use outside the
74-10    district's boundaries will not be considered a transfer outside of
74-11    district if:
74-12                (1)  the transfer is for agricultural use on a tract
74-13    located in a county contiguous to the district's boundaries;
74-14                (2)  the transfer is for use as a potable water supply
74-15    by a retail public utility and is within an authorized service area
74-16    of which an appropriate portion, as determined by the district, is
74-17    located inside the district's boundaries;
74-18                (3)  the transfer involves an emergency potable water
74-19    interconnect between retail public utilities; or
74-20                (4)  the transfer is for use on a contiguous oil and
74-21    gas field or unit.
74-22          SECTION 2.53.  Section 36.205, Water Code, is amended to read
74-23    as follows:
74-24          Sec. 36.205.  AUTHORITY TO SET FEES.  (a)  A district may set
74-25    fees for administrative acts of the district, such as filing
74-26    applications.  Fees set by a district may not unreasonably exceed
74-27    the cost to the district of performing the administrative function
 75-1    for which the fee is charged.
 75-2          (b)  A district shall set and collect fees for all services
 75-3    provided outside the boundaries of the district.  The fees may not
 75-4    unreasonably exceed the cost to the district of providing the
 75-5    services outside the district.
 75-6          (c)  A district may assess production fees based on the
 75-7    amount of water authorized by permit to be withdrawn from a well or
 75-8    the amount actually withdrawn.  A district may assess the fees in
 75-9    lieu of, or in conjunction with, any taxes otherwise levied by the
75-10    district.  A district may use revenues generated by the fees for
75-11    any lawful purpose.  Production fees [Fees based on the amount of
75-12    water to be withdrawn from a well] shall not exceed:
75-13                (1)  $1 [one dollar] per acre-foot payable annually
75-14    [acre foot] for water used for agricultural use [the purpose of
75-15    irrigating agricultural crops]; or
75-16                (2)  $10 per acre-foot payable annually [17 cents per
75-17    thousand gallons] for water used for any other purpose.
75-18          (d)  The Barton Springs-Edwards Aquifer Conservation District
75-19    and the Guadalupe County Groundwater Conservation District may not
75-20    charge production fees for an annual period greater than $1 per
75-21    acre-foot for water used for agricultural use or 17 cents per
75-22    thousand gallons for water used for any other purpose.  The Barton
75-23    Springs-Edwards Aquifer Conservation District [A district affected
75-24    by Subsection (c)(2) that also] may assess a water use fee against
75-25    a specific municipality in [shall assess] an amount not to exceed
75-26    60 percent of the total funding of the district received from water
75-27    use fees assessed against that municipality and other nonexempt
 76-1    users in the district.  This subsection shall take precedence over
 76-2    all prior enactments.
 76-3          (e)  Subsection (c) does not apply to the following
 76-4    districts:
 76-5                (1)  the Edwards Aquifer Authority;
 76-6                (2)  the Fort Bend Subsidence District; [or]
 76-7                (3)  the Harris-Galveston Coastal Subsidence District;
 76-8                (4)  the Barton Springs-Edwards Aquifer Conservation
 76-9    District; or
76-10                (5)  any district that collects a property tax and that
76-11    was created before September 1, 1999, unless otherwise authorized
76-12    by special law.
76-13          (f)  A district, including a district described under
76-14    Subsection (d), may assess a production fee under Subsection (c)
76-15    for any water produced under an exemption under Section 36.117 if
76-16    that water is subsequently sold to another person.
76-17          (g)  A district may assess a transportation fee under Section
76-18    36.122.
76-19          SECTION 2.54.  Section 36.206, Water Code, is amended by
76-20    amending Subsection (b) and adding Subsection (c) to read as
76-21    follows:
76-22          (b)  The rate of fees set for [crop or livestock production
76-23    or other] agricultural uses shall be no more than 20 percent of the
76-24    rate applied to municipal uses.
76-25          (c)  District fees may be used to purchase groundwater rights
76-26    if the purchased rights are acquired for conservation purposes.
76-27          SECTION 2.55.  Subchapter I, Chapter 36, Water Code, is
 77-1    amended by adding Section 36.3011 to read as follows:
 77-2          Sec. 36.3011.  FAILURE OF A DISTRICT TO CONDUCT JOINT
 77-3    PLANNING.  (a)  If the board of a district within a common
 77-4    management area fails to forward a copy of its new or revised
 77-5    certified management plan under Section 36.108, the commission
 77-6    shall take appropriate action under Section 36.303.
 77-7          (b)  Not later than the 45th day after receiving the review
 77-8    panel's report under Section 36.108, the executive director or the
 77-9    commission shall take action to implement any or all of the panel's
77-10    recommendations.  If the commission finds that a district in the
77-11    joint planning area has failed to adopt rules, the groundwater in
77-12    the management area is not adequately protected by the rules
77-13    adopted by the district, or the groundwater in the management area
77-14    is not adequately protected because of the district's failure to
77-15    enforce substantial compliance with its rules, the commission may
77-16    take any action it considers necessary in accordance with Section
77-17    36.303.
77-18          SECTION 2.56.  Section 36.303(a), Water Code, is amended to
77-19    read as follows:
77-20          (a)  If Section 36.108, 36.301, or 36.302(f) applies, the
77-21    commission, after notice and hearing in accordance with Chapter
77-22    2001, Government Code, shall take action the commission considers
77-23    appropriate, including:
77-24                (1)  issuing an order requiring the district to take
77-25    certain actions or to refrain from taking certain actions;
77-26                (2)  dissolving the board in accordance with Sections
77-27    36.305 and 36.307 and calling an election for the purpose of
 78-1    electing a new board;
 78-2                (3)  requesting the attorney general to bring suit for
 78-3    the appointment of a receiver to collect the assets and carry on
 78-4    the business of the groundwater conservation district [removing the
 78-5    district's taxing authority]; or
 78-6                (4)  dissolving the district in accordance with
 78-7    Sections 36.304, 36.305, and 36.308.
 78-8          SECTION 2.57.  Subchapter I, Chapter 36, Water Code, is
 78-9    amended by adding Section 36.3035 to read as follows:
78-10          Sec. 36.3035.  APPOINTMENT OF A RECEIVER.  (a)  If the
78-11    attorney general brings a suit for the appointment of a receiver
78-12    for a district, a district court shall appoint a receiver if an
78-13    appointment is necessary to protect the assets of the district.
78-14          (b)  The receiver shall execute a bond in an amount to be set
78-15    by the court to ensure the proper performance of the receiver's
78-16    duties.
78-17          (c)  After appointment and execution of bond, the receiver
78-18    shall take possession of the assets of the district specified by
78-19    the court.
78-20          (d)  Until discharged by the court, the receiver shall
78-21    perform the duties that the court directs to preserve the assets
78-22    and carry on the business of the district and shall strictly
78-23    observe the final order involved.
78-24          (e)  On a showing of good cause by the district, the court
78-25    may dissolve the receivership and order the assets and control of
78-26    the business returned to the district.
78-27          SECTION 2.58.  Section 51.149, Water Code, is amended to read
 79-1    as follows:
 79-2          Sec. 51.149.  CONTRACTS.  (a)  No approvals other than those
 79-3    specified in Subsection (c) and in Section 1, Chapter 778, Acts of
 79-4    the 74th Legislature, Regular Session, 1995, need be obtained in
 79-5    order for a contract between a district and a municipality to be
 79-6    valid, binding, and enforceable against all parties to the
 79-7    contract.  After approval by a majority of the electors voting at
 79-8    an election conducted in the manner of a bond election, a district
 79-9    may make payments under a contract from taxes for debt that does
79-10    not exceed 30 years.
79-11          (b) [(d)]  A contract may provide that the district will make
79-12    payments under the contract from proceeds from the sale of notes or
79-13    bonds, from taxes, from any other income of the district, or from
79-14    any combination of these.
79-15          (c) [(e)]  A district may make payments under a contract from
79-16    taxes, other than maintenance taxes, after the provisions of the
79-17    contract have been approved by a majority of the electors voting at
79-18    an election held for that purpose.
79-19          (d) [(f)]  Any contract election may be held at the same time
79-20    as and in conjunction with an election to issue bonds, and the
79-21    procedure for calling the election, giving notice, conducting the
79-22    election, and canvassing the returns shall be the same as the
79-23    procedure for a bond election.
79-24          (e)  A district created pursuant to Chapter 628, Acts of the
79-25    68th Legislature, Regular Session, 1983, is defined as a municipal
79-26    corporation and political subdivision pursuant to Chapter 405, Acts
79-27    of the 76th Legislature, Regular Session, 1999, and is authorized
 80-1    to take action accordingly.
 80-2          SECTION 2.59. Section 1.03, Chapter 626, Acts of the 73rd
 80-3    Legislature, Regular Session, 1993, is amended by adding
 80-4    Subdivisions (26) and (27) to read as follows:
 80-5                (26)  "Agricultural use" means any use or activity
 80-6    involving any of the following activities:
 80-7                      (A)  cultivating the soil to produce crops for
 80-8    human food, animal feed, or planting seed or for the production of
 80-9    fibers;
80-10                      (B)  the practice of floriculture, viticulture,
80-11    silviculture, and horticulture, including the cultivation of plants
80-12    in containers or nonsoil media, by a nursery grower;
80-13                      (C)  raising, feeding, or keeping animals for
80-14    breeding purposes or for the production of food or fiber, leather,
80-15    pelts, or other tangible products having a commercial value;
80-16                      (D)  wildlife management;
80-17                      (E)  raising or keeping equine animals; and
80-18                      (F)  planting cover crops, including cover crops
80-19    cultivated for transplantation, or leaving land idle for the
80-20    purpose of participating in any governmental program or normal crop
80-21    or livestock rotation procedure.
80-22                (27)  "Nursery grower" means a person who grows more
80-23    than 50 percent of the products that the person either sells or
80-24    leases, regardless of the variety sold, leased, or grown.  For the
80-25    purpose of this definition, "grow" means the actual cultivation or
80-26    propagation of the product beyond the mere holding or maintaining
80-27    of the item before sale or lease and typically includes activities
 81-1    associated with the production or multiplying of stock, such as the
 81-2    development of new plants from cuttings, grafts, plugs, or
 81-3    seedlings.
 81-4          SECTION 2.60. Section 1.29(e), Chapter 626, Acts of the 73rd
 81-5    Legislature, Regular Session, 1993, is amended to read as follows:
 81-6          (e)  In developing an equitable fee structure under this
 81-7    section, the authority may establish different fee rates on a per
 81-8    acre-foot basis for different types of use.  The fees must be
 81-9    equitable between types of uses.  The fee rate for agricultural use
81-10    shall be based on the volume of water withdrawn and may not be more
81-11    than $2 per acre-foot [20 percent of the fee rate for municipal
81-12    use].  The authority shall assess the fees on the amount of water a
81-13    permit holder is authorized to withdraw under the permit.
81-14          SECTION 2.61. Sections 4.03(a) and (b), Chapter 1029, Acts of
81-15    the 76th Legislature, Regular Session, 1999, are amended to read as
81-16    follows:
81-17          (a)  The authority may establish fees, rates, and charges,
81-18    and classifications of fee payers and ratepayers, as necessary to
81-19    enable the authority to fulfill the authority's purposes and
81-20    regulatory obligations provided by this Act.
81-21          (b)  The authority may charge against the owner of a well
81-22    located in the authority's boundaries a fee on the amount of water
81-23    pumped from the well.  The board shall establish the rate of a fee
81-24    under this subsection only after a special meeting on the fee.  The
81-25    board shall by rule exempt from the fee under this subsection those
81-26    classes of wells that are not subject to groundwater reduction
81-27    requirements imposed by the subsidence district, except that if any
 82-1    of those classes of wells become subject at a future date to a
 82-2    groundwater reduction requirement imposed by the subsidence
 82-3    district, then the authority may after that date charge the fee
 82-4    under this subsection to those affected classes of wells.  The
 82-5    board by rule may exempt any other classes of wells from the fee
 82-6    under this subsection.  The board may not apply the fee to a well:
 82-7                (1)  with a casing diameter of less than five inches
 82-8    that serves a single-family dwelling;
 82-9                (2)  regulated under Chapter 27, Water Code;
82-10                (3)  used for irrigation of agricultural crops; or
82-11                (4)  [that produces 10 million gallons or less
82-12    annually; or]
82-13                [(5)]  used solely for electric generation.
82-14          SECTION 2.62.  Notwithstanding Section 26.028(c), Water Code,
82-15    a public hearing on an application by a political subdivision for a
82-16    commission permit under Section 26.027, Water Code, for effluent
82-17    composed of sewage or municipal waste proposing secondary or
82-18    greater treatment and no discharge of pollutants into any water in
82-19    the state shall be in the same manner as provided by Section
82-20    382.0561, Health and Safety Code.
82-21                    ARTICLE 3.  DISTRICT RATIFICATIONS
82-22           PART 1.  COW CREEK GROUNDWATER CONSERVATION DISTRICT
82-23          SECTION 3.0101.  RATIFICATION OF CREATION. (a)  The creation
82-24    of the Cow Creek Groundwater Conservation District in Kendall
82-25    County by Chapter 1331, Acts of the 76th Legislature, Regular
82-26    Session, 1999, is ratified as required by Section 15(a) of that
82-27    chapter, subject to approval at a confirmation election under
 83-1    Section 3.0108 of this part.  The district is a governmental agency
 83-2    and a body politic and corporate.
 83-3          (b)  The district may develop and implement regulatory,
 83-4    conservation, and recharge programs that preserve and protect
 83-5    groundwater resources located in the district.
 83-6          SECTION 3.0102.  DEFINITIONS.  In this part:
 83-7                (1)  "District" means the Cow Creek Groundwater
 83-8    Conservation District.
 83-9                (2)  "Retail public utility" means a retail public
83-10    utility as defined by Section 13.002, Water Code, that is providing
83-11    service in the district on September 1, 2001.
83-12                (3)  "Well" means any excavation drilled or dug into
83-13    the ground that may intercept or penetrate a water-bearing stratum
83-14    or formation.
83-15          SECTION 3.0103.  BOUNDARIES.  The boundaries of the district
83-16    are coextensive with the boundaries of Kendall County.
83-17          SECTION 3.0104.  POWERS.  Except as otherwise provided by
83-18    this part, the district has all of the rights, powers, privileges,
83-19    authority, functions, and duties provided by the general law of the
83-20    state, including Chapter 36, Water Code, applicable to groundwater
83-21    conservation districts created under Section 59, Article XVI, Texas
83-22    Constitution.  This part prevails over any provision of general
83-23    law, including Chapter 36, Water Code, or Chapter 1331, Acts of the
83-24    76th Legislature, Regular Session, 1999, that is in conflict or
83-25    inconsistent with this part.
83-26          SECTION 3.0105.  BOARD OF DIRECTORS.  (a)  The district is
83-27    governed by a board of five directors.
 84-1          (b)  Temporary directors serve until initial directors are
 84-2    elected under Sections 3.0108 and 3.0109 of this part or until this
 84-3    part expires under Section 3.0108 of this part, whichever occurs
 84-4    first.
 84-5          (c)  Initial directors serve until permanent directors are
 84-6    elected under Section 3.0110 of this part.
 84-7          (d)  Permanent directors serve staggered four-year terms.
 84-8          (e)  A director serves until the director's successor has
 84-9    qualified.
84-10          (f)  Each director must qualify to serve as director in the
84-11    manner provided by Section 36.055, Water Code.
84-12          (g)  A vacancy in the office of director is filled by
84-13    appointment of the board until the next election for directors.  At
84-14    the next election for directors, a person shall be elected to fill
84-15    the position.  If the position is not scheduled to be filled at the
84-16    election, the person elected to fill the position shall serve only
84-17    for the remainder of the unexpired term.
84-18          SECTION 3.0106.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
84-19    PRECINCTS. (a)  The directors of the district shall be elected
84-20    according to the commissioners precinct method as provided by this
84-21    part.
84-22          (b)  One director shall be elected by the qualified voters of
84-23    the entire district and one director shall be elected from each
84-24    county commissioners precinct by the qualified voters of that
84-25    precinct.
84-26          (c)  A person shall indicate on the application for a place
84-27    on the ballot the precinct that the person seeks to represent or
 85-1    that the person seeks to represent the district at large.
 85-2          (d)  When the boundaries of the commissioners precincts are
 85-3    changed, each director in office on the effective date of the
 85-4    change or elected to a term of office beginning on or after the
 85-5    effective date of the change serves in the precinct to which the
 85-6    director was elected for the entire term to which the director was
 85-7    elected, even though the change in boundaries places the person's
 85-8    residence outside the precinct for which the person was elected.
 85-9          (e)  To be eligible to be a candidate for or to serve as
85-10    director from a county commissioners precinct, a person must be a
85-11    registered voter in the precinct from which the person is elected
85-12    or appointed.  To be eligible to be a candidate for or to serve as
85-13    director at large, a person must be a registered voter in the
85-14    district.
85-15          SECTION 3.0107.  TEMPORARY DIRECTORS.  (a)  The temporary
85-16    board of directors shall be appointed by the county commissioners
85-17    court.  One temporary director shall be appointed from each
85-18    commissioners precinct, and one temporary director shall be a
85-19    director at large.
85-20          (b)  If a temporary director fails to qualify for office, the
85-21    temporary directors who have qualified shall appoint a person to
85-22    fill the vacancy.  If at any time there are fewer than three
85-23    qualified temporary directors, the Texas Natural Resource
85-24    Conservation Commission shall appoint the necessary number of
85-25    persons to fill all vacancies on the board.
85-26          SECTION 3.0108.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
85-27    (a)  The temporary board of directors shall call and hold an
 86-1    election to confirm establishment of the district and to elect five
 86-2    initial directors.
 86-3          (b)  A person who wishes to be a candidate for the office of
 86-4    initial director may file an application with the temporary board
 86-5    of directors to have the candidate's name printed on the ballot as
 86-6    provided by Section 3.0106 of this part.
 86-7          (c)  At the confirmation and initial directors election, the
 86-8    temporary board of directors shall have the names of the five
 86-9    persons serving as temporary directors placed on the ballot by
86-10    commissioners precinct and as at-large director, together with the
86-11    name of any candidate filing for the office of director as provided
86-12    by this section.
86-13          (d)  If a majority of the votes cast at the election favor
86-14    the creation of the district, the temporary directors shall declare
86-15    the district created.  If a majority of the votes cast at the
86-16    election are against the creation of the district, the temporary
86-17    directors shall declare the district defeated.  The temporary
86-18    directors shall file a copy of the election results with the Texas
86-19    Natural Resource Conservation Commission.
86-20          (e)  If a majority of the votes cast at the election are
86-21    against the creation of the district, the temporary directors may
86-22    call and hold subsequent elections to confirm establishment of the
86-23    district and to elect initial directors.  A subsequent election may
86-24    not be held earlier than the first anniversary of the date on which
86-25    the previous election was held.  If the district is not created
86-26    before September 1, 2006, this part expires on that date.
86-27          (f)  Section 41.001(a), Election Code, does not apply to a
 87-1    confirmation and initial directors election held under this
 87-2    section.
 87-3          (g)  Section 36.017(a), Water Code, does not apply to the
 87-4    district.
 87-5          (h)  Except as provided by this section, a confirmation and
 87-6    directors election must be conducted as provided by Sections
 87-7    36.017(b)-(h), Water Code, and the Election Code.
 87-8          SECTION 3.0109.  INITIAL DIRECTORS.  (a)  If the district is
 87-9    created at the election, the temporary directors, at the time the
87-10    vote is canvassed, shall declare the candidate receiving the most
87-11    votes for each commissioners precinct or for the at-large director
87-12    to be elected as the initial directors.
87-13          (b)  The initial directors for Precincts 2 and 3 serve until
87-14    the first regular meeting of the board of directors held after the
87-15    first permanent directors election under Section 3.0110 of this
87-16    part.  The initial directors for Precincts 1 and 4 and the initial
87-17    director representing the district at large serve until the first
87-18    regular meeting of the board of directors held after the second
87-19    permanent directors election under Section 3.0110 of this part.
87-20          SECTION 3.0110.  ELECTION OF PERMANENT DIRECTORS.  Beginning
87-21    in the second year after the year in which the district is
87-22    authorized to be created at a confirmation election, an election
87-23    shall be held in the district on the first Saturday in May every
87-24    two years to elect the appropriate number of directors to the
87-25    board.
87-26          SECTION 3.0111.  ADDITIONAL AUTHORITY.  (a)  The district may
87-27    contract with one or more state agencies or other governmental
 88-1    bodies, including a county, a river authority, or another district,
 88-2    to carry out any function of the district.
 88-3          (b)  The district may require a drilling permit before a new
 88-4    well is drilled or an existing well is substantially altered.
 88-5    Notwithstanding an exemption for a well under Section 36.117, Water
 88-6    Code, written authorization granted by the district must be
 88-7    received before a new well is drilled or an existing well is
 88-8    substantially altered.
 88-9          (c)  The district may participate in the construction,
88-10    implementation, and maintenance of best management practices for
88-11    water resource management in the district and may engage in and
88-12    promote the acceptance of best management practices through
88-13    education efforts sponsored by the district.  Construction,
88-14    implementation, and maintenance of best management practices must
88-15    address water quantity and quality practices such as brush
88-16    management, prescribed grazing, recharge structures, water and silt
88-17    detention and retention structures, plugging of abandoned wells,
88-18    rainwater harvesting, and other treatment measures for the
88-19    conservation of water resources.
88-20          (d)  Reasonable fees, as determined by the district, may be
88-21    imposed on an annual basis on each nonexempt well.  The district
88-22    shall adopt any rules necessary for the assessment and collection
88-23    of fees under this subsection.
88-24          (e)  The district may use money collected from fees:
88-25                (1)  in any manner necessary for the management and
88-26    operation of the district;
88-27                (2)  to pay all or part of the principal of and
 89-1    interest on district bonds or notes; and
 89-2                (3)  for any purpose consistent with the district's
 89-3    certified water management plan.
 89-4          (f)  The district shall grant an exemption or other relief
 89-5    from ad valorem taxes on property on which a water conservation
 89-6    initiative has been implemented.  The district shall adopt rules to
 89-7    implement this subsection.  A retail public utility shall receive
 89-8    the same exemption or relief from ad valorem taxes on property as
 89-9    any other customer of the district would receive.
89-10          (g)  As a water conservation initiative to encourage retail
89-11    public utilities to obtain water supplies from sources other than
89-12    groundwater, the district shall grant an exemption or other relief
89-13    from ad valorem taxes on property served by a retail public utility
89-14    based on:
89-15                (1)  the percentage of potable water supplied within
89-16    the district by the retail public utility from sources other than
89-17    groundwater compared to the total water supplied by the retail
89-18    public utility for the preceding year; and
89-19                (2)  the percentage of wastewater effluent produced by
89-20    the retail public utility that is used as reclaimed water within
89-21    the district compared to the total wastewater effluent produced by
89-22    the retail public utility for the preceding year.  The  district
89-23    may consider the impact of floods and equipment breakage on the
89-24    retail public utility's ability to supply water from sources other
89-25    than groundwater.
89-26          (h)  The total amount of the exemption or other relief from
89-27    ad valorem taxes may not exceed one-half of the tax levied by the
 90-1    district.
 90-2          SECTION 3.0112.  PROHIBITED ACTS.  The district may not:
 90-3                (1)  impose an ad valorem property tax for
 90-4    administrative, operation, or maintenance expenses that exceeds the
 90-5    lesser of the rate approved by the majority of the qualified voters
 90-6    voting in the election authorizing the tax, or three cents per $100
 90-7    valuation;
 90-8                (2)  require the owner of a well used solely for
 90-9    domestic or livestock purposes to install a meter or measuring
90-10    device on the well;
90-11                (3)  enter into any contract or engage in any action to
90-12    supply water to any person in the service area of any municipality
90-13    or retail public utility located in the district, except with the
90-14    consent of the municipality or retail public utility; or
90-15                (4)  issue any bonds secured by ad valorem taxes before
90-16    September 1, 2004.
90-17           PART 2.  CROSSROADS GROUNDWATER CONSERVATION DISTRICT
90-18          SECTION 3.0201.  RATIFICATION OF CREATION.  The creation of
90-19    the Crossroads Groundwater Conservation District in Victoria County
90-20    by Chapter 1331, Acts of the 76th Legislature, Regular Session,
90-21    1999, is ratified as required by Section 15(a) of that chapter,
90-22    subject to approval at a confirmation election under Section 3.0210
90-23    of this part.
90-24          SECTION 3.0202.  DEFINITIONS.  In this part:
90-25                (1)  "Board" means the district's board of directors.
90-26                (2)  "Commissioners court" means the Victoria County
90-27    Commissioners Court.
 91-1                (3)  "District" means the Crossroads Groundwater
 91-2    Conservation District.
 91-3          SECTION 3.0203.  LEGISLATIVE FINDINGS.  The legislature finds
 91-4    that:
 91-5                (1)  the organization of the district is feasible and
 91-6    practicable;
 91-7                (2)  all of the land to be included in, and the
 91-8    residents of, the district will benefit from the creation of the
 91-9    district;
91-10                (3)  there is a public necessity for the district; and
91-11                (4)  the creation of the district will provide a
91-12    benefit and utility to the public.
91-13          SECTION 3.0204.  BOUNDARIES.  The boundaries of the district
91-14    are coextensive with the boundaries of Victoria County.
91-15          SECTION 3.0205.  APPLICATION OF CHAPTER 36, WATER CODE;
91-16    GENERAL POWERS AND DUTIES.  (a)  Except to the extent of any
91-17    conflict with this part or as specifically limited by this part,
91-18    the district is governed by and subject to Chapter 36, Water Code,
91-19    and may exercise all of the powers contained in that chapter,
91-20    including the power to issue bonds and levy and collect taxes and
91-21    the power of eminent domain.  The district may exercise all of the
91-22    duties provided by Chapter 36, Water Code.
91-23          (b)  This part prevails over any conflicting or inconsistent
91-24    provision of Chapter 1331, Acts of the 76th Legislature, Regular
91-25    Session, 1999.
91-26          SECTION 3.0206.  BOARD OF DIRECTORS.  (a)  The district is
91-27    governed by a board of seven directors.
 92-1          (b)  The directors for Places 1-4 are appointed by the
 92-2    commissioners court.  The directors for Places 5-7 are appointed by
 92-3    the city council of the City of Victoria.
 92-4          (c)  The directors shall select from their members persons to
 92-5    serve as chairman, vice chairman, and secretary.
 92-6          SECTION 3.0207.  QUALIFICATIONS OF BOARD MEMBERS.  To be
 92-7    qualified for appointment as a director, a person must be a
 92-8    resident of the district and must be at least 18 years of age.
 92-9          SECTION 3.0208.  TERM OF OFFICE.  (a)  Except for the
92-10    temporary and initial directors of the district, directors serve
92-11    staggered four-year terms.
92-12          (b)  A vacancy in the office of director is filled for the
92-13    remainder of the term by appointment by the commissioners court or
92-14    the city council of the City of Victoria, as appropriate.
92-15          SECTION 3.0209.  TEMPORARY DIRECTORS.  (a)  On September 1,
92-16    2001, the following persons are designated as temporary directors
92-17    of the district:
92-18                (1)  Place 1:  Mark Dierlam
92-19                (2)  Place 2:  Rocky Sanders
92-20                (3)  Place 3:  S. F. Ruschhaupt III
92-21                (4)  Place 4:  Joseph Dial
92-22                (5)  Place 5:  Stephen Diebel
92-23                (6)  Place 6:  Jerry James
92-24                (7)  Place 7:  Denise McCue
92-25          (b)  If a temporary director fails to qualify for office or
92-26    if a vacancy occurs in the office of temporary director for any
92-27    reason, the commissioners court shall appoint a person to fill a
 93-1    vacancy in Place 1, 2, 3, or 4, and the city council of the City of
 93-2    Victoria shall appoint a person to fill a vacancy in Place 5, 6, or
 93-3    7.
 93-4          (c)  The temporary directors shall select from their members
 93-5    persons to serve as chairman, vice chairman, and secretary.
 93-6          (d)  The temporary directors serve until they declare the
 93-7    district created, at which time they become the initial directors
 93-8    of the district under Section 3.0211 of this part.
 93-9          (e)  To be qualified to serve as a temporary director, a
93-10    person must be a resident of Victoria County and at least 18 years
93-11    of age.
93-12          SECTION 3.0210.  CONFIRMATION ELECTION.  (a)  Not later than
93-13    October 1, 2001, and without the necessity of having a petition
93-14    presented, the temporary directors shall meet and call an election
93-15    to be held not later than January 1, 2002, within the boundaries of
93-16    the proposed district to confirm the creation of the district.
93-17          (b)  Section 41.001(a), Election Code, does not apply to an
93-18    election called under this section.
93-19          (c)  The ballot for the election shall be printed to provide
93-20    for a vote for or against the following propositions:
93-21                (1)  the creation of the Crossroads Groundwater
93-22    Conservation District in Victoria County; and
93-23                (2)  the levy and collection of a property tax in the
93-24    district.
93-25          (d)  The temporary board may include other propositions on
93-26    the ballot that it considers necessary.
93-27          (e)  If a majority of votes cast at the election favor the
 94-1    creation of the district, the temporary directors shall declare the
 94-2    district created.  If a majority of the votes cast at the election
 94-3    are against the creation of the district, the temporary directors
 94-4    shall declare the district defeated.  The temporary directors shall
 94-5    file a copy of the election results with the Texas Natural Resource
 94-6    Conservation Commission.
 94-7          (f)  If the creation of the district is defeated, further
 94-8    elections may be called and held after the first anniversary of the
 94-9    most recent confirmation election.  If the district is not created
94-10    by September 1, 2006, this part expires.
94-11          SECTION 3.0211.  INITIAL DIRECTORS.  (a)  On confirmation of
94-12    the creation of the district under Section 3.0210 of this part, the
94-13    temporary directors become the initial directors of the district
94-14    and serve terms as provided by Subsection (b) of this section,
94-15    except that not later than the 60th day after the date on which the
94-16    temporary directors declare the district created, the commissioners
94-17    court may replace any director in Places 1-4 and the city council
94-18    of the City of Victoria may replace any director in Places 5-7.
94-19          (b)  The initial directors for Places 1, 3, 5, and 7 serve
94-20    for four years following the confirmation of the district.  The
94-21    initial directors for Places 2, 4, and 6 serve for two years
94-22    following the confirmation of the district.
94-23          (c)  If, for any reason, an appointed director is not
94-24    qualified to take office at the first regular meeting of the board
94-25    following the director's appointment, the director for that place
94-26    shall continue to serve until a successor has qualified.
94-27          SECTION 3.0212.  LIMITATION ON TAXATION.  The district may
 95-1    not impose an ad valorem tax at a rate that exceeds two cents on
 95-2    the $100 valuation of taxable property in the district.
 95-3          PART 3.  HAYS TRINITY GROUNDWATER CONSERVATION DISTRICT
 95-4          SECTION 3.0301.  RATIFICATION OF CREATION. The creation of
 95-5    the Hays Trinity Groundwater Conservation District in a portion of
 95-6    Hays County by Chapter 1331, Acts of the 76th Legislature, Regular
 95-7    Session, 1999, is ratified as required by Section 15(a) of that
 95-8    chapter, subject to approval at a confirmation election under
 95-9    Section 3.0309 of this part.
95-10          SECTION 3.0302.  DEFINITIONS.  In this part:
95-11                (1)  "Commissioners court" means the Hays County
95-12    Commissioners Court.
95-13                (2)  "District" means the Hays Trinity Groundwater
95-14    Conservation District.
95-15          SECTION 3.0303.  BOUNDARIES.  The boundaries of the district
95-16    are coextensive with the boundaries of Hays County, Texas,
95-17    excluding any area in Hays County that on the effective date of
95-18    this part is within another groundwater conservation district and
95-19    that has authority to require a permit for the drilling or
95-20    alteration of wells for the withdrawal of groundwater.  Within 30
95-21    days of its initial meeting and prior to holding any confirmation
95-22    election, the board of directors of the district shall prepare a
95-23    description of the district boundaries  and shall file the
95-24    description with the county clerk of Hays County and the Texas
95-25    Natural Resource Conservation Commission.
95-26          SECTION 3.0304.  POWERS.  (a)  Except as provided by this
95-27    part, the district has all the rights, powers, privileges,
 96-1    authority, functions, and duties provided by the general law of
 96-2    this state, including Chapter 36, Water Code, applicable to
 96-3    groundwater conservation districts created under Section 59,
 96-4    Article XVI, Texas Constitution. This part prevails over any
 96-5    provision of general law, including Chapter 36, Water Code, or
 96-6    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 96-7    that is in conflict or inconsistent with this part.
 96-8          (b)  The rights, powers, privileges, authority, functions,
 96-9    and duties of the district are subject to the continuing right of
96-10    supervision of the state to be exercised by and through the Texas
96-11    Natural Resource Conservation Commission.
96-12          (c)  The district may not enter property to inspect an exempt
96-13    well without the property owner's permission.
96-14          (d)  The commissioners court, by resolution, may require an
96-15    election to be conducted within six months to affirm or reverse a
96-16    decision of the board of directors of the district.
96-17          (e)  The district may not require well construction standards
96-18    for residential wells more stringent than state standards for those
96-19    wells.
96-20          SECTION 3.0305.  EXEMPTIONS.  (a)  The following wells are
96-21    exempt from Chapter 36, Water Code, rules and may not be regulated,
96-22    permitted, or metered by the district:
96-23                (1)  a well used to satisfy the domestic needs of a
96-24    single private residential household and producing less than 25,000
96-25    gallons per day;
96-26                (2)  a well used for conventional farming and ranching
96-27    activities, excluding intensive operations such as aquaculture,
 97-1    livestock feedlots, and poultry operations.
 97-2          (b)  A well used for conventional farming and ranching
 97-3    activities, excluding intensive operations such as aquaculture,
 97-4    livestock feedlots, and poultry operations, is not required to
 97-5    obtain construction authorization.
 97-6          SECTION 3.0306.  FISCAL RESPONSIBILITIES.  (a)  The district
 97-7    each year shall prepare a budget showing the proposed expenditures
 97-8    and disbursements and the estimated receipts and collections for
 97-9    the following fiscal year and shall hold a public hearing on the
97-10    proposed budget after publication of a notice of hearing in a
97-11    newspaper of general circulation in the county at least once not
97-12    less than 10 days prior to the date set for the hearing.  A person
97-13    who is a taxpayer of the district has the right to appear at the
97-14    time and place designated in the notice and be heard with reference
97-15    to any item shown in the proposed budget.  The proposed budget must
97-16    also show the amount of revenues expected to be collected during
97-17    such fiscal year.
97-18          (b)  At the written request of the commissioners court, the
97-19    county auditor shall audit the performance of the district.  The
97-20    commissioners court may request a general audit of the performance
97-21    of the district or may request an audit of only one or more
97-22    particular duties, practices, functions, or other district matters.
97-23          SECTION 3.0307.  BOARD OF DIRECTORS.  (a)  The district is
97-24    governed by a board of five directors appointed by the
97-25    commissioners court.
97-26          (b)  A director must reside in the district.
97-27          (c)  Each director must qualify to serve as director in the
 98-1    manner provided by Section 36.055, Water Code.
 98-2          (d)  Directors serve staggered two-year terms.
 98-3          (e)  A director serves until the director's successor has
 98-4    qualified.
 98-5          (f)  If there is a vacancy on the board, the commissioners
 98-6    court shall appoint a director to serve the remainder of the term.
 98-7          (g)  The commissioners court shall appoint a director to
 98-8    succeed a director on or before the date the director's term
 98-9    expires.
98-10          (h)  A director may not receive a salary or other
98-11    compensation for service as a director but may be reimbursed for
98-12    actual expenses of attending meetings at the rate in effect for
98-13    employees of Hays County.
98-14          SECTION 3.0308.  APPOINTMENT AND TERMS OF INITIAL DIRECTORS.
98-15    Not later than the 31st day after the effective date of this part,
98-16    the commissioners court shall appoint:
98-17                (1)  two directors to serve terms expiring February 1,
98-18    2003; and
98-19                (2)  three directors to serve terms expiring February
98-20    1, 2004.
98-21          SECTION 3.0309.  CONFIRMATION ELECTION.  (a)  The initial
98-22    directors shall call and hold an election to confirm establishment
98-23    of the district not later than the second Saturday in May 2002.
98-24          (b)  Section 41.001(a), Election Code, does not apply to a
98-25    confirmation election held as provided by this section.
98-26          (c)  Except as provided by this section, a confirmation
98-27    election must be conducted as provided by Sections 36.017(b)-(h),
 99-1    Water Code, and the Election Code.
 99-2          (d)  If the establishment of the district has not been
 99-3    confirmed at an election held under this section before the second
 99-4    anniversary of the effective date of this part, this part expires
 99-5    on that date.
 99-6          SECTION 3.0310.  FUNDING AUTHORITY.  (a)  The district may
 99-7    levy or collect a fee not to exceed $300 for construction
 99-8    authorization for new wells completed after the effective date of
 99-9    this part, except as prohibited by Section 3.0305(b) of this part.
99-10          (b)  The district may levy or collect a water utility service
99-11    connection fee not to exceed $300 for all new water service
99-12    connections made after the effective date of this part.  The fee
99-13    may not be charged on connection fees to a water utility that has
99-14    surface water as its sole source of water.
99-15           PART 4.  LONE WOLF GROUNDWATER CONSERVATION DISTRICT
99-16          SECTION 3.0401.  RATIFICATION OF CREATION.  The creation of
99-17    the Lone Wolf Groundwater Conservation District in Mitchell County
99-18    by Chapter 1331, Acts of the 76th Legislature, Regular Session,
99-19    1999, is ratified as required by Section 15(a) of that chapter,
99-20    subject to approval at a confirmation election under Section 3.0407
99-21    of this part.
99-22          SECTION 3.0402.  DEFINITION.  In this part, "district" means
99-23    the Lone Wolf Groundwater Conservation District.
99-24          SECTION 3.0403.  GENERAL POWERS.  The district has all of the
99-25    rights, powers, privileges, authority, functions, and duties
99-26    provided by the general law of the state, including Chapter 36,
99-27    Water Code, applicable to groundwater conservation districts
 100-1   created under Section 59, Article XVI, Texas Constitution.  This
 100-2   part prevails over any provision of general law, including Chapter
 100-3   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
 100-4   Regular Session, 1999, that is in conflict or inconsistent with
 100-5   this part.
 100-6         SECTION 3.0404.  BOARD OF DIRECTORS.  (a)  The district is
 100-7   governed by a board of five directors.
 100-8         (b)  Temporary directors serve until initial directors are
 100-9   elected under Section 3.0407 of this part.
100-10         (c)  Initial directors serve until permanent directors are
100-11   elected under Section 3.0408 of this part.
100-12         (d)  Permanent directors serve staggered four-year terms.
100-13         (e)  Each director must qualify to serve as director in the
100-14   manner provided by Section 36.055, Water Code.
100-15         (f)  A director serves until the director's successor has
100-16   qualified.
100-17         SECTION 3.0405.  COMPENSATION OF DIRECTORS.  A director is
100-18   not entitled to fees of office but is entitled to reimbursement of
100-19   actual expenses reasonably and necessarily incurred while engaging
100-20   in activities on behalf of the district.
100-21         SECTION 3.0406.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
100-22   PRECINCTS.  (a)  The directors of the district shall be elected
100-23   according to the commissioners precinct method as provided by this
100-24   section.
100-25         (b)  One director shall be elected by the voters of the
100-26   entire district, and one director shall be elected from each county
100-27   commissioners precinct by the voters of that precinct.
 101-1         (c)  To be eligible to be a candidate for or to serve as
 101-2   director at large, a person must be a registered voter in the
 101-3   district.  To be eligible to be a candidate for or to serve as
 101-4   director from a county commissioners precinct, a person must be a
 101-5   registered voter of that precinct.
 101-6         (d)  A person shall indicate on the application for a place
 101-7   on the ballot:
 101-8               (1)  the precinct that the person seeks to represent;
 101-9   or
101-10               (2)  that the person seeks to represent the district at
101-11   large.
101-12         (e)  When the boundaries of the commissioners precincts are
101-13   changed, each director in office on the effective date of the
101-14   change or elected to a term of office beginning on or after the
101-15   effective date of the change serves in the precinct to which the
101-16   director was elected for the entire term to which the director was
101-17   elected, even though the change in boundaries places the person's
101-18   residence outside the precinct for which the person was elected.
101-19         SECTION 3.0407.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
101-20   (a)  The temporary board of directors shall call and hold an
101-21   election to confirm establishment of the district and to elect
101-22   initial directors.
101-23         (b)  At the confirmation and initial directors election, the
101-24   temporary board of directors shall have placed on the ballot the
101-25   name of any candidate filing for an initial director position and
101-26   blank spaces to write in the names of other persons.  A temporary
101-27   director who is eligible to be a candidate under Section 3.0406 of
 102-1   this part may file for an initial director position.
 102-2         (c)  Section 41.001(a), Election Code, does not apply to a
 102-3   confirmation and initial directors election held as provided by
 102-4   this section.
 102-5         (d)  Except as provided by this section, a confirmation and
 102-6   initial directors election must be conducted as provided by
 102-7   Sections 36.017(b)-(h), Water Code, and the Election Code.
 102-8         SECTION 3.0408.  ELECTION OF DIRECTORS.  (a)  On the first
 102-9   Saturday in May of the first even-numbered year after the year in
102-10   which the district is authorized to be created at a confirmation
102-11   election, an election shall be held in the district for the
102-12   election of three directors to serve four-year terms and two
102-13   directors to serve two-year terms.
102-14         (b)  On the first Saturday in May of each subsequent second
102-15   year following the election, the appropriate number of directors
102-16   shall be elected.
102-17         SECTION 3.0409.  LIMITATION ON TAXATION.  The district may
102-18   levy property taxes at a rate not to exceed 20 cents on each $100
102-19   of assessed valuation to pay any part of the bonds or notes issued
102-20   by the district if the authority to impose property taxes under
102-21   this part is approved by a majority of the voters voting at a
102-22   confirmation election under Section 3.0407 of this part or at a
102-23   separate election called for that purpose by the board of
102-24   directors.
102-25         SECTION 3.0410.  EXPIRATION.  If the creation of the district
102-26   is not confirmed at a confirmation election held under Section
102-27   3.0407 of this part before September 1, 2003, the district is
 103-1   dissolved and this part expires on that date.
 103-2          PART 5.  LOST PINES GROUNDWATER CONSERVATION DISTRICT
 103-3         SECTION 3.0501.  RATIFICATION OF CREATION.  The creation of
 103-4   the Lost Pines Groundwater Conservation District in Bastrop and Lee
 103-5   counties by Chapter 1331, Acts of the 76th Legislature, Regular
 103-6   Session, 1999, is ratified as required by Section 15(a) of that
 103-7   chapter, subject to approval at a confirmation election under
 103-8   Section 3.0507 of this part.
 103-9         SECTION 3.0502.  DEFINITIONS.  In this part:
103-10               (1)  "District" means the Lost Pines Groundwater
103-11   Conservation District.
103-12               (2)  "Public utility" means any person, corporation,
103-13   public utility, water supply or sewer service corporation,
103-14   municipality, political subdivision, or agency operating,
103-15   maintaining, or controlling facilities in the state for providing
103-16   potable water service for compensation.
103-17         SECTION 3.0503.  BOUNDARIES.  The boundaries of the district
103-18   are coextensive with the boundaries of Bastrop and Lee counties,
103-19   Texas.
103-20         SECTION 3.0504.  POWERS.  (a)  The district has all of the
103-21   rights, powers, privileges, authority, functions, and duties
103-22   provided by the general law of the state, including Chapter 36,
103-23   Water Code, applicable to groundwater conservation districts
103-24   created under Section 59, Article XVI, Texas Constitution.  This
103-25   part prevails over any provision of general law, including Chapter
103-26   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
103-27   Regular Session, 1999, that is in conflict or inconsistent with
 104-1   this part.
 104-2         (b)  The district may not impose a tax.  The district may
 104-3   assess  regulatory pumping fees for water produced in or exported
 104-4   from the district.  The regulatory pumping fees the district
 104-5   assesses for water for crop or livestock production or other
 104-6   agricultural uses may not exceed 20 percent of the rate applied to
 104-7   water for municipal uses.  Regulatory pumping fees based on the
 104-8   amount of water withdrawn from a well may not exceed:
 104-9               (1)  $1 per acre-foot for water used for the purpose of
104-10   irrigating agricultural crops; or
104-11               (2)  17 cents per thousand gallons for water used for
104-12   any other purpose.
104-13         (c)  The district may adopt a rule exempting a well that is
104-14   not capable of producing more than 50,000 gallons of groundwater a
104-15   day from a permit requirement, a fee, or a restriction on
104-16   production.
104-17         SECTION 3.0505.  GROUNDWATER WELLS UNDER JURISDICTION OF
104-18   RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
104-19   within the district under permits issued by the Railroad Commission
104-20   of Texas are under the exclusive jurisdiction of the railroad
104-21   commission and are exempt from regulation by the district.
104-22         (b)  Groundwater produced in an amount authorized by a
104-23   railroad commission permit may be used within or exported from the
104-24   district without obtaining a permit from the district.
104-25         (c)  To the extent groundwater production exceeds railroad
104-26   commission authorization, the holder of the railroad commission
104-27   permit must apply to the district for appropriate permits for the
 105-1   excess production and is subject to the applicable regulatory fees.
 105-2         (d)  Groundwater produced from wells under the jurisdiction
 105-3   of the railroad commission is generally exempt from water district
 105-4   fees.  However, the district may impose either a pumping fee or an
 105-5   export fee on groundwater produced from an otherwise exempt mine
 105-6   well that is used for municipal purposes or by a public utility.
 105-7   Any fee imposed by the district under this subsection may not
 105-8   exceed the fee imposed on other groundwater producers in the
 105-9   district.
105-10         SECTION 3.0506.  BOARD OF DIRECTORS.  (a)  The district is
105-11   governed by a board of 10 directors.
105-12         (b)  Five directors shall be appointed from Bastrop County by
105-13   the county judge of Bastrop County and five directors shall be
105-14   appointed from Lee County by the county judge of Lee County.
105-15         (c)  Temporary directors serve until their successors are
105-16   appointed and have qualified.
105-17         (d)  The temporary directors shall draw lots to determine:
105-18               (1)  which three directors from each county will serve
105-19   four-year terms that expire December 31, 2005; and
105-20               (2)  which two directors from each county will serve
105-21   two-year terms that expire December 31, 2003.
105-22         (e)  In each subsequent second year following the initial
105-23   appointment of directors, the appropriate number of directors shall
105-24   be appointed.
105-25         (f)  Except as provided by Subsection (d) of this section,
105-26   directors serve staggered four-year terms.
105-27         (g)  Directors may serve consecutive terms.
 106-1         (h)  Each director must qualify to serve as director in the
 106-2   manner provided by Section 36.055, Water Code.
 106-3         (i)  A director serves until the director's successor has
 106-4   qualified.
 106-5         (j)  If a vacancy occurs on the board of directors, the board
 106-6   may appoint a director to serve the remainder of the term.
 106-7         (k)  A director may receive fees of office as provided by
 106-8   Section 36.060, Water Code, and is entitled to reimbursement for
 106-9   reasonable actual expenses incurred in performing duties as a
106-10   director.
106-11         SECTION 3.0507.  INITIAL MEETING AND CONFIRMATION ELECTION.
106-12   (a)  As soon as practicable after September 1, 2001, the temporary
106-13   directors shall meet to set the date for and call the confirmation
106-14   election.  The directors shall hold the meeting in conjunction with
106-15   the regularly scheduled meeting of the directors.
106-16         (b)  The election shall be held on the authorized election
106-17   date in November if the United States Department of Justice has
106-18   precleared this part by that time.  If this part has not been
106-19   precleared by the November election date, the confirmation election
106-20   shall be held at the next authorized election date.  The district
106-21   shall contract with the county clerks of Bastrop and Lee counties
106-22   to conduct the election.
106-23         (c)  Except as provided by this section, the confirmation
106-24   election must be conducted as provided by Sections 36.017 and
106-25   36.018, Water Code, and the Election Code.
106-26         (d)  If a majority of the votes cast at an election held
106-27   under this section is against the confirmation of the district, the
 107-1   temporary directors may not call another election under this
 107-2   section before the first anniversary of that election.
 107-3         SECTION 3.0508.  REGIONAL COOPERATION.  The district shall:
 107-4               (1)  adopt a management plan detailing proposed efforts
 107-5   of the district to cooperate with other groundwater conservation
 107-6   districts;
 107-7               (2)  participate as needed in coordination meetings
 107-8   with adjacent groundwater conservation districts that share one or
 107-9   more aquifers with the district;
107-10               (3)  coordinate the collection of data with adjacent
107-11   groundwater conservation districts in such a way as to achieve
107-12   relative uniformity of data type and quality;
107-13               (4)  provide groundwater level information to adjacent
107-14   groundwater conservation districts;
107-15               (5)  investigate any groundwater pollution to identify
107-16   the pollution's source;
107-17               (6)  notify adjacent groundwater conservation districts
107-18   and all appropriate agencies of any groundwater pollution detected
107-19   and the source of pollution identified;
107-20               (7)  provide to adjacent groundwater conservation
107-21   districts annually an inventory of water wells in the district and
107-22   an estimate of groundwater production within the district; and
107-23               (8)  include adjacent groundwater conservation
107-24   districts on mailing lists for district newsletters and information
107-25   regarding seminars, public education events, news articles, and
107-26   field days.
107-27         SECTION 3.0509.  EXPIRATION.  If the creation of this
 108-1   district is not confirmed at a confirmation election held under
 108-2   Section 3.0507 of this part before September 1, 2005, this part
 108-3   expires on that date.
 108-4           PART 6.  MCMULLEN GROUNDWATER CONSERVATION DISTRICT
 108-5         SECTION 3.0601.  RATIFICATION OF CREATION.  The creation of
 108-6   the McMullen Groundwater Conservation District in McMullen County
 108-7   by Chapter 1331, Acts of the 76th Legislature, Regular Session,
 108-8   1999, is ratified as required by Section 15(a) of that chapter,
 108-9   subject to approval at a confirmation election under Section 3.0607
108-10   of this part.
108-11         SECTION 3.0602.  DEFINITION.  In this part, "district" means
108-12   the McMullen Groundwater Conservation District.
108-13         SECTION 3.0603.  BOUNDARIES.  The boundaries of the district
108-14   are coextensive with the boundaries of McMullen County.
108-15         SECTION 3.0604.  GENERAL POWERS.  (a)  The district has all
108-16   of the rights, powers, privileges, authority, functions, and duties
108-17   provided by the general law of the state, including Chapter 36,
108-18   Water Code, applicable to groundwater conservation districts
108-19   created under Section 59, Article XVI, Texas Constitution.  This
108-20   part prevails over any provision of general law, including Chapter
108-21   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
108-22   Regular Session, 1999, that is in conflict or inconsistent with
108-23   this part.
108-24         (b)  The rights, powers, privileges, authority, functions,
108-25   and duties of the district are subject to the continuing right of
108-26   supervision of the state to be exercised by and through the Texas
108-27   Natural Resource Conservation Commission.
 109-1         SECTION 3.0605.  BOARD OF DIRECTORS.  (a)  The district is
 109-2   governed by a board of five directors.
 109-3         (b)  Temporary directors serve until initial directors are
 109-4   elected under Section 3.0607 of this part.
 109-5         (c)  Initial directors serve until permanent directors are
 109-6   elected under Section 3.0608 of this part.
 109-7         (d)  Permanent directors serve staggered four-year terms.
 109-8         (e)  Each director must qualify to serve as director in the
 109-9   manner provided by Section 36.055, Water Code.
109-10         (f)  A director serves until the director's successor has
109-11   qualified.
109-12         (g)  If there is a vacancy on the board, the remaining
109-13   directors shall appoint a director to serve the remainder of the
109-14   term.
109-15         SECTION 3.0606.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
109-16   PRECINCTS.  (a)  The directors of the district shall be elected
109-17   according to the commissioners precinct method as provided by this
109-18   section.
109-19         (b)  One director shall be elected by the voters of the
109-20   entire district and one director shall be elected from each county
109-21   commissioners precinct by the voters of that precinct.
109-22         (c)  To be qualified as a candidate for or to serve as
109-23   director at large, a person must be a registered voter in the
109-24   district.  To be a candidate for or to serve as director from a
109-25   county commissioners precinct, a person must be a registered voter
109-26   of that precinct.
109-27         (d)  A person shall indicate on the application for a place
 110-1   on the ballot:
 110-2               (1)  the precinct that the person seeks to represent;
 110-3   or
 110-4               (2)  that the person seeks to represent the district at
 110-5   large.
 110-6         (e)  When the boundaries of the commissioners precincts are
 110-7   changed, each director in office on the effective date of the
 110-8   change or elected to a term of office beginning on or after the
 110-9   effective date of the change serves in the precinct to which the
110-10   director was elected for the entire term to which the director was
110-11   elected, even though the change in boundaries places the person's
110-12   residence outside the precinct for which the person was elected.
110-13         SECTION 3.0607.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
110-14   (a)  The temporary board of directors shall call and hold an
110-15   election to confirm establishment of the district and to elect
110-16   initial directors.
110-17         (b)  At the confirmation and initial directors election, the
110-18   temporary board of directors shall have placed on the ballot the
110-19   names of the persons serving as temporary directors who intend to
110-20   run for an initial director position and are qualified to be a
110-21   candidate under Section 3.0606 of this part together with the name
110-22   of any candidate filing for an initial director position and blank
110-23   spaces to write in the names of other persons.
110-24         (c)  If the district is created at the election, the
110-25   temporary board of directors, at the time the vote is canvassed,
110-26   shall:
110-27               (1)  declare the qualified person who receives the most
 111-1   votes for each position to be elected as the initial director for
 111-2   that position; and
 111-3               (2)  include the results of the initial directors
 111-4   election in the district's election report to the Texas Natural
 111-5   Resource Conservation Commission.
 111-6         (d)  Section 41.001(a), Election Code, does not apply to a
 111-7   confirmation and initial directors election held as provided by
 111-8   this section.
 111-9         (e)  Except as provided by this section, a confirmation and
111-10   initial directors election must be conducted as provided by
111-11   Sections 36.017(b)-(h), Water Code, and the Election Code.
111-12         (f)  If a majority of the votes cast at an election held
111-13   under this section is against the confirmation of the district, the
111-14   temporary directors may not call another election under this
111-15   section before the first anniversary of that election.
111-16         SECTION 3.0608.  ELECTION OF PERMANENT DIRECTORS.  (a)  On
111-17   the first Saturday in October of the second year after the year in
111-18   which the district is authorized to be created at a confirmation
111-19   election, an election shall be held in the district for the
111-20   election of directors from county commissioners precincts one and
111-21   three, each of whom serves a two-year term, and directors from
111-22   county commissioners precincts two and four and the director at
111-23   large, each of whom serves a four-year term.
111-24         (b)  On the first Saturday in October of each subsequent
111-25   second year following the election, the appropriate number of
111-26   directors shall be elected to the board, each of whom serves a
111-27   four-year term.
 112-1         SECTION 3.0609.  LIMITATION ON TAXATION.  The district may
 112-2   not impose an ad valorem tax at a rate that exceeds five cents on
 112-3   the $100 valuation of taxable property in the district.
 112-4         SECTION 3.0610.  EXPIRATION.  If the creation of the district
 112-5   is not confirmed at a confirmation election held under Section
 112-6   3.0607 of this part before September 1, 2003, this part expires on
 112-7   that date.
 112-8         PART 7.  MIDDLE PECOS GROUNDWATER CONSERVATION DISTRICT
 112-9         SECTION 3.0701.  RATIFICATION OF CREATION.  The creation of
112-10   the Middle Pecos Groundwater Conservation District in Pecos County
112-11   by Chapter 1331, Acts of the 76th Legislature, Regular Session,
112-12   1999, is ratified as required by Section 15(a) of that chapter,
112-13   subject to approval at a confirmation election under Section 3.0707
112-14   of this part.
112-15         SECTION 3.0702.  DEFINITION.  In this part, "district" means
112-16   the Middle Pecos Groundwater Conservation District.
112-17         SECTION 3.0703.  BOUNDARIES.  The boundaries of the district
112-18   are coextensive with the boundaries of Pecos County.
112-19         SECTION 3.0704.  GENERAL POWERS.  (a)  The district has all
112-20   of the rights, powers, privileges, authority, functions, and duties
112-21   provided by the general law of this state, including Chapter 36,
112-22   Water Code, applicable to groundwater conservation districts
112-23   created under Section 59, Article XVI, Texas Constitution.  This
112-24   part prevails over any provision of general law, including Chapter
112-25   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
112-26   Regular Session, 1999, that is in conflict or inconsistent with
112-27   this part.
 113-1         (b)  The rights, powers, privileges, authority, functions,
 113-2   and duties of the district are not subject to the continuing right
 113-3   of supervision of the state through the Texas Natural Resource
 113-4   Conservation Commission.
 113-5         SECTION 3.0705.  BOARD OF DIRECTORS.  (a)  The district is
 113-6   governed by a board of 11 directors.
 113-7         (b)  Temporary directors serve until initial directors are
 113-8   elected under Section 3.0707 of this part.
 113-9         (c)  Initial directors serve until permanent directors are
113-10   elected under Section 3.0708 of this part.
113-11         (d)  Permanent directors serve staggered four-year terms.
113-12         (e)  Each director must qualify to serve as director in the
113-13   manner provided by Section 36.055, Water Code.
113-14         (f)  A director serves until the director's successor has
113-15   qualified.
113-16         (g)  If there is a vacancy on the board, the remaining
113-17   directors shall appoint a director to serve the remainder of the
113-18   term.  If at any time there are fewer than three qualified
113-19   directors, the Pecos County Commissioners Court shall appoint the
113-20   necessary number of persons to fill all the vacancies on the board.
113-21         (h)  A director may not receive a salary or other
113-22   compensation for service as a director but may be reimbursed for
113-23   actual expenses of attending meetings at the rate in effect for
113-24   employees of Pecos County.
113-25         SECTION 3.0706.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
113-26   PRECINCTS.  (a)  The directors of the district shall be elected
113-27   according to the method provided by this section.
 114-1         (b)  One director shall be elected by the qualified voters of
 114-2   the entire district, two directors shall be elected from each
 114-3   county commissioners precinct by the qualified voters of that
 114-4   precinct, one director shall be elected from the city of Iraan by
 114-5   the qualified voters of that city, and one director shall be
 114-6   elected from the city of Fort Stockton by the qualified voters of
 114-7   that city.
 114-8         (c)  To be qualified to be a candidate for or to serve as a
 114-9   director at large, a person must be a registered voter in the
114-10   district.  To be a candidate for or to serve as director from a
114-11   county commissioners precinct or a city, a person must be a
114-12   registered voter of that precinct or city, as applicable.
114-13         (d)  A person shall indicate on the application for a place
114-14   on the ballot:
114-15               (1)  the precinct or city that the person seeks to
114-16   represent; or
114-17               (2)  that the person seeks to represent the district at
114-18   large.
114-19         (e)  When the boundaries of the commissioners precincts are
114-20   changed, each director in office on the effective date of the
114-21   change or elected to a term of office beginning on or after the
114-22   effective date of the change serves in the precinct to which the
114-23   director was elected for the entire term to which the director was
114-24   elected, even though the change in boundaries places the person's
114-25   residence outside the precinct for which the person was elected.
114-26         SECTION 3.0707.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
114-27   (a)  The temporary board of directors shall call and hold an
 115-1   election to confirm establishment of the district and to elect
 115-2   initial directors.
 115-3         (b)  At the confirmation and initial directors election, the
 115-4   temporary board of directors shall have placed on the ballot the
 115-5   name of any candidate filing for an initial director position and
 115-6   blank spaces to write in the names of other persons.  A temporary
 115-7   director who is qualified to be a candidate under Sections 3.0705
 115-8   and 3.0706 of this part may file for an initial director position.
 115-9         (c)  Section 41.001(a), Election Code, does not apply to a
115-10   confirmation and initial directors election held as provided by
115-11   this section.
115-12         (d)  Except as provided by this section, a confirmation and
115-13   initial directors election must be conducted as provided by
115-14   Sections 36.017(b)-(h), Water Code, and the Election Code.
115-15         (e)  The elected initial directors shall draw lots to
115-16   determine their terms.  One director from each county commissioners
115-17   precinct and the director from the district at large serve terms
115-18   that expire on the date of the first election held under Section
115-19   3.0708 of this part.  The remaining directors serve terms that
115-20   expire on the date of the second election held under Section 3.0708
115-21   of this part.
115-22         (f)  If the majority of the votes cast at an election held
115-23   under this section is against the confirmation of the district, the
115-24   temporary directors may call another election under this section to
115-25   be held not later than August 31, 2003.
115-26         SECTION 3.0708.  ELECTION OF DIRECTORS.  On the first
115-27   Saturday in May of the first even-numbered year after the year in
 116-1   which the district is authorized to be created at a confirmation
 116-2   election and on the first Saturday in May of each subsequent second
 116-3   year, an election shall be held in the district to elect the
 116-4   appropriate number of directors.
 116-5         SECTION 3.0709.  EXPIRATION.  If the creation of the district
 116-6   is not confirmed at a confirmation election held under Section
 116-7   3.0707 of this part before September 1, 2003, the district is
 116-8   dissolved and this part expires on that date.
 116-9          PART 8.  RED SANDS GROUNDWATER CONSERVATION DISTRICT
116-10         SECTION 3.0801.  RATIFICATION OF CREATION.  The creation of
116-11   the Red Sands Groundwater Conservation District in Hidalgo County
116-12   by Chapter 1331, Acts of the 76th Legislature, Regular Session,
116-13   1999, is ratified as required by Section 15(a) of that chapter,
116-14   subject to approval at a confirmation election under Section 3.0808
116-15   of this part.
116-16         SECTION 3.0802.  DEFINITION.  In this part, "district" means
116-17   the Red Sands Groundwater Conservation District.
116-18         SECTION 3.0803.  BOUNDARIES.  The district includes all of
116-19   the territory contained in the following described area:
116-20   A 19,232 acre tract more or less out of San Salvador Del Tule Grant
116-21   as recorded in Volume 10, Page 58 of the Hidalgo County, Texas map
116-22   records and out of the Santa Anita Grant as recorded in Volume 7,
116-23   Page 38 of the Hidalgo County, Texas map records.
116-24   Commencing at the Southeast Corner of this here in described
116-25   boundary tract, said point being the intersection of the centerline
116-26   of U.S. Highway 281 and the centerline of Farm to Market Road
116-27   number 490 (F.M. 490) (West Hargill Road) as shown in the map of
 117-1   San Salvador Del Tule Grant as recorded in Volume 10, Page 58 of
 117-2   the Hidalgo County map records.  Said point is also the point of
 117-3   beginning.
 117-4   Thence, Westerly along the center line of the F.M. 490, an
 117-5   approximate distance of 18,400 feet to a point on the West line of
 117-6   San Salvador Del Tule Grant, said point also being the intersection
 117-7   of the centerline of F.M. 490 and the West line of the San Salvador
 117-8   Del Tule Grant,
 117-9   Thence, Northerly along the West line of the San Salvador Del Tule
117-10   Grant and the East line of the Santa Anita Grant at an approximate
117-11   distance of 21,300 feet to a point, said point being an inside
117-12   corner of this herein described tract, and also being the Southeast
117-13   corner of Redland Vineyards Subdivision as recorded in Volume 4,
117-14   Page 51 of the Hidalgo County map records,
117-15   Thence, Westerly along the South line of the Redland Vineyards
117-16   Subdivision, an approximate distance of 4,238 feet to a point, said
117-17   point being an outside corner of this herein described tract, said
117-18   point also being the Southwest corner of the Redland Vineyard
117-19   Subdivision,
117-20   Thence, Northerly with the West line of Redland Vineyards
117-21   Subdivision, at approximately 4,590.50 feet past a point, said
117-22   point being the Northwest corner of Redland Vineyard Subdivision,
117-23   and the Southwest corner of Delbridge Subdivision as recorded in
117-24   Volume 5, Page 11, Hidalgo County map records, and continuing
117-25   Northerly along the West line of Delbridge Subdivision for an
117-26   approximate total distance of 6,646 feet to a point, said point
117-27   being an inside corner of this herein described tract, and also
 118-1   being the Northwest corner of Delbridge Subdivision,
 118-2   Thence, Westerly along the South line of a 196.37 acres tract,
 118-3   known as the A.B. De Kock Tract, an approximate distance of 3,500
 118-4   feet past the Southeast corner of share 4, out of the 8,374.70 acre
 118-5   tract partition out of the Santa Anita Grant as recorded in Volume
 118-6   7, Page 38, in the Hidalgo County map records and continuing
 118-7   Westerly for an approximate total distance of 6,500 feet to a
 118-8   point, said point being an outside corner of this herein described
 118-9   tract and also being the Southwest corner of share 4,
118-10   Thence, Northerly along the West line of share 4, an approximate
118-11   total distance of 19,143 feet to a point, said point being the
118-12   Northwest corner of this herein described tracts and, the
118-13   intersection of the West line of share 4 and the centerline of Farm
118-14   to Market Road number 1017, (F.M. 1017)
118-15   Thence, in a Southeasterly direction, with the Right-of-Way
118-16   centerline of Farm to Market Road number 1017 (F.M. 1017) an
118-17   approximate total distance of 27,800 feet to a point, said point
118-18   being the Northeast corner of this herein described tract, and also
118-19   being the intersection of the centerline of F.M. 1017 Right-of-Way
118-20   and the center line of the U.S. Highway 281 Right-Of-Way,
118-21   Thence, in a Southerly direction, with the centerline of U.S.
118-22   Highway 281 Right-Of-Way, an approximate distance of 7,500 feet
118-23   past Floral Road, and at approximate 21,700 feet past Red Gate Road
118-24   and at approximate 29,700 feet past Laguna Seca Road and for an
118-25   approximate total distance of 39,300 feet to the point of beginning
118-26   of this here in described tract, said tract contains 19,232 Acres,
118-27   More or Less.
 119-1         SECTION 3.0804.  FINDINGS RELATIVE TO BOUNDARIES.  The
 119-2   legislature finds that the boundaries and field notes of the
 119-3   district form a closure.  A mistake in the field notes or in the
 119-4   copying of the field notes in the legislative process does not
 119-5   affect the organization, existence, or validity of the district,
 119-6   the right of the district to levy and collect taxes, or the
 119-7   legality or operation of the district or its governing body.
 119-8         SECTION 3.0805.  GENERAL POWERS.  (a)  Except as provided by
 119-9   this part, the district has all of the rights, powers, privileges,
119-10   authority, functions, and duties provided by the general law of the
119-11   state, including Chapter 36, Water Code, applicable to groundwater
119-12   conservation districts created under Section 59, Article XVI, Texas
119-13   Constitution.  This part prevails over any provision of general
119-14   law, including Chapter 36, Water Code, or Chapter 1331, Acts of the
119-15   76th Legislature, Regular Session, 1999, that is in conflict or
119-16   inconsistent with this part.
119-17         (b)  The rights, powers, privileges, authority, functions,
119-18   and duties of the district are subject to the continuing right of
119-19   supervision of the state, to be exercised by and through the Texas
119-20   Natural Resource Conservation Commission.
119-21         SECTION 3.0806.  BOARD OF DIRECTORS.  (a)  The district is
119-22   governed by a board of five directors, each elected at large to one
119-23   of five numbered places.
119-24         (b)  To be eligible to serve as a director, an individual
119-25   must reside in the district.
119-26         (c)  Each director must qualify to serve as director in the
119-27   manner provided by Section 36.055, Water Code.
 120-1         (d)  Permanent directors serve staggered three-year terms.
 120-2         (e)  A director serves until the director's successor has
 120-3   qualified.
 120-4         (f)  A vacancy in the office of director shall be filled by
 120-5   appointment of the board of directors until the next election of
 120-6   directors, at which election a person shall be elected to fill the
 120-7   position.  If the position is not scheduled to be filled at the
 120-8   election, the person elected to fill the position serves only the
 120-9   remainder of the unexpired term.
120-10         (g)  An appointed director who is qualified to serve as a
120-11   director under Subsection (b) of this section is eligible to run
120-12   for election to the board of directors.
120-13         SECTION 3.0807.  TEMPORARY DIRECTORS.  (a)  The temporary
120-14   board of directors is composed of:
120-15               (1)  Lucas Hinojosa;
120-16               (2)  Becky Guerra;
120-17               (3)  Arcadio Guerra;
120-18               (4)  Elizabeth Ann Sweet; and
120-19               (5)  John Cozad.
120-20         (b)  The temporary directors are not required to meet the
120-21   eligibility requirements of permanent directors.
120-22         (c)  Temporary directors serve until permanent directors are
120-23   elected at the confirmation election under Section 3.0808 of this
120-24   part.
120-25         SECTION 3.0808.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
120-26   (a)  The temporary board of directors shall call and hold an
120-27   election to confirm establishment of the district and to elect
 121-1   initial directors.
 121-2         (b)  At the confirmation and initial directors election, the
 121-3   temporary board of directors shall have placed on the ballot the
 121-4   names of the candidates for each of the five numbered positions and
 121-5   blank spaces to write in the names of other persons.  Names on the
 121-6   ballot may include persons serving as temporary directors who
 121-7   intend to run for an initial director position together with the
 121-8   name of any candidate filing for an initial director position.
 121-9         (c)  If a majority of the votes cast at the election are in
121-10   favor of the creation of the district, the temporary board of
121-11   directors shall declare the district created.  If a majority of the
121-12   votes cast at the election are against the creation of the
121-13   district, the temporary board of directors shall declare the
121-14   district defeated.  The temporary board of directors shall file a
121-15   copy of the election results with the Texas Natural Resource
121-16   Conservation Commission.
121-17         (d)  If a majority of the votes cast at the election are
121-18   against the creation of the district, the temporary board of
121-19   directors may not call another election under this section before
121-20   the first anniversary of the date of the election.
121-21         (e)  If the creation of the district is confirmed at the
121-22   election, the temporary board of directors, at the time the vote is
121-23   canvassed, shall:
121-24               (1)  declare the qualified person who receives the most
121-25   votes for each position to be elected as the initial director for
121-26   that position; and
121-27               (2)  include the results of the initial directors
 122-1   election in the district's election report to the Texas Natural
 122-2   Resource Conservation Commission.
 122-3         (f)  The initial directors shall draw lots to determine their
 122-4   terms so that:
 122-5               (1)  one director serves a one-year term that expires
 122-6   on the anniversary of the date the initial directors were elected;
 122-7               (2)  two directors serve two-year terms that expire on
 122-8   the anniversary of the date the initial directors were elected; and
 122-9               (3)  two directors serve three-year terms that expire
122-10   on the anniversary of the date the initial directors were elected.
122-11         (g)  Section 41.001(a), Election Code, does not apply to a
122-12   confirmation and initial directors election held as provided by
122-13   this section.
122-14         (h)  Except as provided by this section, a confirmation
122-15   election must be conducted as provided by Sections 36.017(b)-(h),
122-16   Water Code, and the Election Code.
122-17         SECTION 3.0809.  ELECTION OF PERMANENT DIRECTORS.  Beginning
122-18   in the first year after the year in which the district is
122-19   authorized to be created at a confirmation election, the board of
122-20   directors shall call an election to be held in the district on the
122-21   first Saturday of the month in which the initial directors were
122-22   elected under Section 3.0808 of this part and every year after that
122-23   date to elect the appropriate number of directors to the board.
122-24         SECTION 3.0810.  ELIGIBLE DISTRICT VOTERS.  Any person
122-25   qualified to vote under the Election Code who resides in the
122-26   district is eligible to vote in district elections.
122-27         SECTION 3.0811.  TAXATION AUTHORITY.  (a)  The board of
 123-1   directors shall impose taxes in accordance with Subchapter G,
 123-2   Chapter 36, Water Code.
 123-3         (b)  Notwithstanding Section 36.201, Water Code, the board of
 123-4   directors may annually impose an ad valorem tax at a rate not to
 123-5   exceed two cents on each $100 of assessed valuation unless a higher
 123-6   rate is approved by a majority of the voters of the district voting
 123-7   at an election called and held for that purpose.
 123-8         SECTION 3.0812.  TRANSPORTATION OF GROUNDWATER.  (a)  The
 123-9   board of directors may adopt rules under Section 36.122, Water
123-10   Code, requiring a permit to transport district groundwater outside
123-11   the district.  The board of directors shall authorize the
123-12   transportation of groundwater for use outside the district if the
123-13   board determines that the use is in the public interest.  The board
123-14   of directors may:
123-15               (1)  designate uses of water that are in the public
123-16   interest; and
123-17               (2)  establish criteria for permits issued under the
123-18   rules.
123-19         (b)  Transportation projects for the use of groundwater
123-20   outside the district that began before September 1, 2001, may
123-21   continue without a permit if the use of groundwater is on land
123-22   contiguous to the district's boundaries and is for domestic or
123-23   livestock purposes.
123-24         SECTION 3.0813.  EXPIRATION.  If the creation of the district
123-25   is not confirmed at a confirmation election held under Section
123-26   3.0808 of this part before September 1, 2003, this part expires on
123-27   that date.
 124-1           PART 9.  REFUGIO GROUNDWATER CONSERVATION DISTRICT
 124-2         SECTION 3.0901.  RATIFICATION OF CREATION.  The creation of
 124-3   the Refugio Groundwater Conservation District in Refugio County by
 124-4   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 124-5   is ratified as required by Section 15(a) of that chapter, subject
 124-6   to approval at a confirmation election under Section 3.0907 of this
 124-7   part.
 124-8         SECTION 3.0902.  DEFINITION.  In this part, "district" means
 124-9   the Refugio Groundwater Conservation District.
124-10         SECTION 3.0903.  BOUNDARIES.  The boundaries of the district
124-11   are coextensive with the boundaries of Refugio County.
124-12         SECTION 3.0904.  GENERAL POWERS.  The district has all of the
124-13   rights, powers, privileges, authority, functions, and duties
124-14   provided by the general law of this state, including Chapter 36,
124-15   Water Code, applicable to groundwater conservation districts
124-16   created under Section 59, Article XVI, Texas Constitution.  This
124-17   part prevails over any provision of general law, including Chapter
124-18   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
124-19   Regular Session, 1999, that is in conflict or inconsistent with
124-20   this part.
124-21         SECTION 3.0905.  BOARD OF DIRECTORS.  (a)  The district is
124-22   governed by a board of five directors.
124-23         (b)  Temporary directors serve until initial directors are
124-24   elected under Section 3.0907 of this part.
124-25         (c)  Initial directors serve until permanent directors are
124-26   elected under Section 3.0908 of this part.
124-27         (d)  Permanent directors serve staggered four-year terms.
 125-1         (e)  Each director must qualify to serve as director in the
 125-2   manner provided by Section 36.055, Water Code.
 125-3         (f)  A director serves until the director's successor has
 125-4   qualified.
 125-5         (g)  If a director fails to qualify for office or if there is
 125-6   at any time a vacancy on the temporary board of directors, the
 125-7   commissioners court shall appoint a person to fill the vacancy.
 125-8         SECTION 3.0906.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
 125-9   PRECINCTS.  (a)  The directors of the district shall be elected
125-10   according to the commissioners precinct method as provided by this
125-11   section.
125-12         (b)  One director shall be elected by the qualified voters of
125-13   the entire district, and one director shall be elected from each
125-14   county commissioners precinct by the qualified voters of that
125-15   precinct.
125-16         (c)  To be qualified to be a candidate for or to serve as
125-17   director at large, a person must be a registered voter in the
125-18   district.  To be a candidate for or to serve as director from a
125-19   county commissioners precinct, a person must be a registered voter
125-20   of that precinct.
125-21         (d)  A person shall indicate on the application for a place
125-22   on the ballot:
125-23               (1)  the precinct that the person seeks to represent;
125-24   or
125-25               (2)  that the person seeks to represent the district at
125-26   large.
125-27         (e)  When the boundaries of the commissioners precincts are
 126-1   changed, each director in office on the effective date of the
 126-2   change or elected to a term of office beginning on or after the
 126-3   effective date of the change serves in the precinct to which the
 126-4   director was elected for the entire term to which the director was
 126-5   elected, even though the change in boundaries places the person's
 126-6   residence outside the precinct for which the person was elected.
 126-7         SECTION 3.0907.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
 126-8   (a)  The temporary board of directors shall call and hold an
 126-9   election to confirm establishment of the district and to elect
126-10   initial directors.
126-11         (b)  At the confirmation and initial directors election, the
126-12   temporary board of directors shall have placed on the ballot the
126-13   name of any candidate filing for an initial director position and
126-14   blank spaces to write in the names of other persons.  A temporary
126-15   director who is qualified to be a candidate under Sections 3.0905
126-16   and 3.0906 of this part may file for an initial director position.
126-17         (c)  Section 41.001(a), Election Code, does not apply to a
126-18   confirmation and initial directors election held as provided by
126-19   this section.
126-20         (d)  Except as provided by this section, a confirmation and
126-21   initial directors election must be conducted as provided by
126-22   Sections 36.017(b)-(h), Water Code, and the Election Code.
126-23         SECTION 3.0908.  ELECTION OF DIRECTORS.  (a)  On the first
126-24   Saturday in May of the first even-numbered year after the year in
126-25   which the district is authorized to be created at a confirmation
126-26   election, an election shall be held in the district for the
126-27   election of three directors to serve four-year terms and two
 127-1   directors to serve two-year terms.
 127-2         (b)  On the first Saturday in May of each subsequent second
 127-3   year following the election, the appropriate number of directors
 127-4   shall be elected.
 127-5         SECTION 3.0909.  EXPIRATION.  If the creation of the district
 127-6   is not confirmed at a confirmation election held under Section
 127-7   3.0907 of this part before September 1, 2003, the district is
 127-8   dissolved and this part expires on that date.
 127-9      PART 10.  SOUTHEAST TRINITY GROUNDWATER CONSERVATION DISTRICT
127-10         SECTION 3.1001.  PURPOSE.  The purpose of this part is to
127-11   ratify the Southeast Trinity Groundwater Conservation District, a
127-12   locally controlled groundwater district, to protect, recharge, and
127-13   prevent the waste of groundwater and to control subsidence of water
127-14   from the groundwater reservoirs.
127-15         SECTION 3.1002.  RATIFICATION OF CREATION. The creation of
127-16   the Southeast Trinity Groundwater Conservation District by Chapter
127-17   1331, Acts of the 76th Legislature, Regular Session, 1999, is
127-18   ratified as required by Section 15(a) of that Act, subject to a
127-19   confirmation election under Section 3.1008 of this part.
127-20         SECTION 3.1003.  DEFINITIONS.  In this part:
127-21               (1)  "Board" means the board of directors of the
127-22   district.
127-23               (2)  "Commission" means the Texas Natural Resource
127-24   Conservation Commission.
127-25               (3)  "District" means the Southeast Trinity Groundwater
127-26   Conservation District.
127-27         SECTION 3.1004.  BOUNDARIES.  The boundaries of the district
 128-1   are as follows:
 128-2         BEGINNING at the point of intersection of the Bexar County -
 128-3   Comal County - Kendall County line:
 128-4         THENCE following the meanders of the Cibolo Creek, the Bexar
 128-5   County - Comal County line in an Easterly direction to the point of
 128-6   intersection with latitude 29  40':
 128-7         THENCE along 29  40' in a Southeasterly direction to the
 128-8   point of intersection with Farm to Market Road 3009:
 128-9         THENCE with the centerline of Farm to Market Road 3009 in a
128-10   Southerly direction to the point of intersection with the
128-11   centerline of Schoenthal Road:
128-12         THENCE with the centerline of Schoenthal Road in a
128-13   Northeasterly direction to the point of intersection with the
128-14   centerline of Farm to Market Road 1863:
128-15         THENCE with the centerline of Farm to Market Road 1863 in an
128-16   Easterly direction to the point of intersection with the centerline
128-17   of Mission Valley Road:
128-18         THENCE with the centerline of Mission Valley Road in a
128-19   Northeasterly direction to the point of intersection with the
128-20   centerline of State Highway 46;
128-21         THENCE with the centerline of State Highway 46 in a
128-22   Northwesterly direction to the point of intersection with the
128-23   centerline of Hueco Springs Loop Road:
128-24         THENCE with the centerline of Hueco Springs Loop Road in a
128-25   Northeasterly then Easterly direction to the point of intersection
128-26   with the centerline of River Road:
128-27         THENCE with the centerline of River Road in a Northeasterly
 129-1   direction to the point of intersection with the Guadalupe River at
 129-2   the First Crossing:
 129-3         THENCE following the meanders of the Guadalupe River in a
 129-4   Northerly direction to the point of intersection of the centerlines
 129-5   of the Guadalupe River and Deep Creek:
 129-6         (Note:  the next four paragraphs coincide with the Southern
 129-7   boundary of Comal County Voters Precinct 18)
 129-8         THENCE along the meanders of Deep Creek in a Northeasterly
 129-9   direction to the point of intersection of the centerline of Deep
129-10   Creek and the South line of the G. F. Lawrence Survey No. 33,
129-11   Abstract No. 358:
129-12         THENCE with the South line of the G. F. Lawrence Survey No.
129-13   33, Abstract No. 358 in a Northeasterly, Southeasterly, and
129-14   Northeasterly direction to the point of intersection of the South
129-15   centerline of Farm to Market Road 306 being at approximately
129-16   Engineers Station 397+98.3:
129-17         THENCE with the centerline of Farm to Market Road 306 in a
129-18   Southeasterly direction to the point of intersection of the
129-19   centerlines of Farm to Market Road 306 and the William Pfeuffer
129-20   private ranch road:
129-21         THENCE with the approximate bearing N 69  E and approximate
129-22   distance 5,000 feet to an angle point in the Comal County - Hays
129-23   County Line:
129-24         THENCE with the Comal County - Hays County line in a
129-25   Northwesterly direction to the point of intersection of the Comal
129-26   County - Hays County line with the Comal County - Blanco County
129-27   line:
 130-1         THENCE with the Comal County - Blanco County line in a
 130-2   Southwesterly direction to the point of intersection of the Comal
 130-3   County - Blanco County - Kendall County line, continuing with the
 130-4   Comal County - Kendall County line in a Southwesterly direction to
 130-5   point of intersection of the Kendall County - Comal County - Bexar
 130-6   County line being the Point of Beginning.
 130-7         SECTION 3.1005.  FINDINGS RELATIVE TO BOUNDARIES.  The
 130-8   legislature finds that the boundaries and field notes of the
 130-9   district form a closure.  A mistake in the field notes or in
130-10   copying the field notes in the legislative process does not affect
130-11   the organization, existence, or validity of the district, the right
130-12   of the district to levy and collect taxes, or the legality or
130-13   operation of the district or its governing body.
130-14         SECTION 3.1006.  AUTHORITY OF DISTRICT.  (a)  Except as
130-15   provided by this section or otherwise by this part, the district
130-16   has the same permitting and general management powers as those
130-17   granted under Chapter 36, Water Code.
130-18         (b)  The district has no regulatory jurisdiction over the
130-19   Edwards Aquifer or any surface water supply.
130-20         (c)  The board by rule may impose reasonable fees, including
130-21   fees for groundwater transported out of the district, on each
130-22   groundwater well in the district that is not exempt from regulation
130-23   by the district, based on the amount of water withdrawn from the
130-24   well.  The fees may be assessed annually, based on the size of
130-25   column pipe used in the wells, pump capacity, or actual,
130-26   authorized, or anticipated pumpage, to pay the maintenance and
130-27   operating expenses of the district's regulation of groundwater.
 131-1         (d)  Section 36.205(c), Water Code, does not apply to the
 131-2   district.
 131-3         (e)  The district may assess an ad valorem property tax not
 131-4   to exceed seven cents per $100 valuation for administrative,
 131-5   operation, and maintenance expenses if approved by a majority of
 131-6   the qualified voters voting in an election authorizing the tax.
 131-7         (f)  Any district conservation fee paid by a retail public
 131-8   utility to the district shall be:
 131-9               (1)  collected by the retail public utility directly as
131-10   a regulatory fee from the customers of the utility and paid to the
131-11   district; and
131-12               (2)  shown as a separate line item on the customer's
131-13   bill.
131-14         (g)  Fees may not be assessed for groundwater withdrawn from
131-15   the Edwards Aquifer.
131-16         (h)  The district shall determine which classes of wells are
131-17   exempt from permitting requirements.
131-18         (i)  The district may not require a permit for:
131-19               (1)  the drilling of or producing from a well either
131-20   drilled, completed, or equipped so that it is capable of producing
131-21   less than 10,000 gallons of water per day; or
131-22               (2)  the drilling of or alteration of the size of a
131-23   well or to restrict the production of a well if the water produced
131-24   or to be produced from the well is or will be used to supply the
131-25   domestic needs of five or fewer households in which a person who is
131-26   a member of each household is either the owner of the well, a
131-27   person related to the owner or to a member of the owner's household
 132-1   within the second degree by consanguinity, or an employee of the
 132-2   owner.
 132-3         (j)  The district may construct according to, implement, and
 132-4   maintain best management practices in the district and may engage
 132-5   in and promote acceptance of best management practices through
 132-6   education efforts sponsored by the district for the purposes of
 132-7   water quality and water availability practices such as brush
 132-8   management, recharge enhancement, water and silt detention and
 132-9   retention structures, plugging of abandoned wells, and other
132-10   treatment measures for the conservation of groundwater resources.
132-11         SECTION 3.1007.  BOARD OF DIRECTORS.  (a)  The district is
132-12   governed by a board of five directors.
132-13         (b)  Temporary directors have been appointed by Comal County
132-14   Commissioners Court and shall serve until initial directors are
132-15   elected under Section 3.1008 of this part.
132-16         (c)  The temporary directors are:
132-17               (1)  Cal Perrine;
132-18               (2)  Ernest T. Lee;
132-19               (3)  Jill Sondeen;
132-20               (4)  Larry Hull; and
132-21               (5)  Stovy Bowlin.
132-22         (d)  Initial directors shall be elected at a confirmation
132-23   election and serve until permanent directors are elected under
132-24   Section 3.1009 of this part.
132-25         (e)  Permanent directors serve staggered four-year terms.
132-26         (f)  The directors shall be elected from four precincts, and
132-27   one director will represent the district at large.  No more than
 133-1   two precincts may be in a single municipality.
 133-2         (g)  A member of the board must reside in and be a registered
 133-3   voter in the precinct from which the person is elected or appointed
 133-4   if representing a precinct or must reside and be registered to vote
 133-5   in the district if representing the district at large.
 133-6         (h)  Directors may serve consecutive terms.
 133-7         (i)  In an election for board members, a write-in vote may
 133-8   not be counted unless the name written in appears on the list of
 133-9   write-in candidates.  A declaration of write-in candidacy must be
133-10   filed not later than 5 p.m. of the 45th day before election day.
133-11         (j)  Vacancies in the office of director are filled by
133-12   appointment of the board.  If the vacant office is not scheduled
133-13   for election within the next two years at the time of the
133-14   appointment, the board shall order an election for the unexpired
133-15   term to be held as part of the next regularly scheduled directors
133-16   election.  The appointed director's term ends on qualification of
133-17   the director elected at that election.
133-18         (k)  The district may not issue bonds before September 1,
133-19   2004.
133-20         SECTION 3.1008.  CONFIRMATION ELECTION AND ELECTION OF
133-21   INITIAL DIRECTORS.  (a)  As soon as practicable after September 1,
133-22   2001, the temporary board of directors may set the date for, call,
133-23   and hold an election:
133-24               (1)  to confirm establishment of the district;
133-25               (2)  to elect five initial directors; and
133-26               (3)  to authorize the district to impose a tax.
133-27         (b)  The election may be held on the first authorized
 134-1   election date after the United States Department of Justice has
 134-2   precleared this part.  The district shall contract with the county
 134-3   clerk of Comal County to conduct the election.
 134-4         (c)  The elected initial directors shall draw lots to
 134-5   determine their terms so that:
 134-6               (1)  two of the initial directors serve two-year terms
 134-7   that expire on the uniform election date in November of the second
 134-8   year after the date the initial directors were elected; and
 134-9               (2)  the remaining three initial directors serve
134-10   four-year terms that expire on the uniform election date in
134-11   November of the fourth year after the year in which the initial
134-12   directors were elected.
134-13         (d)  Section 41.001(a), Election Code, does not apply to a
134-14   confirmation and directors election held as provided by this
134-15   section.
134-16         (e)  Except as provided by this section, a confirmation and
134-17   directors election must be conducted as provided by Sections
134-18   36.017(b)-(h), Water Code, and the Election Code.
134-19         (f)  The Comal County Commissioners Court shall pay the
134-20   expenses of conducting the confirmation and initial directors
134-21   election, subject to reimbursement from the district if the
134-22   establishment of the district is confirmed or from available
134-23   revenues, including funds allocated under Section 36.160, Water
134-24   Code, if the establishment of the district is defeated.
134-25         (g)  If the district is defeated, the temporary directors may
134-26   call and hold subsequent elections to confirm establishment of the
134-27   district.  A subsequent election may not be held earlier than the
 135-1   first anniversary of the date on which the previous election was
 135-2   held.  If the district has not been confirmed at an election held
 135-3   under this section before the fourth anniversary of the effective
 135-4   date of this part, the district is dissolved on that date, except
 135-5   that any debts incurred shall be paid and the organization of the
 135-6   district shall be maintained until all debts are paid.
 135-7         SECTION 3.1009.  ELECTION OF PERMANENT DIRECTORS.  (a)  On
 135-8   the uniform election date in November of the second year after the
 135-9   year in which initial directors are elected, an election shall be
135-10   held in the district to elect two permanent directors for the
135-11   positions of the two initial directors serving two-year terms.
135-12         (b)  On the uniform election date in November of each
135-13   subsequent second year following the election held under Subsection
135-14   (a) of this section, an election shall be held to elect the
135-15   appropriate number of permanent directors to the board.
135-16         SECTION 3.1010.  COORDINATION WITH OTHER DISTRICTS.  The
135-17   district may coordinate activities with other groundwater districts
135-18   that regulate the Trinity Aquifer for the purposes of conjunctively
135-19   managing the common resource.
135-20         SECTION 3.1011.  MODIFICATION OF DISTRICT.  The district may
135-21   be modified only under Subchapter J, Chapter 36, Water Code, and by
135-22   subsequent acts of the legislature.
135-23         SECTION 3.1012.  STATUTORY INTERPRETATION.  Except as
135-24   otherwise provided by this part, if there is a conflict between
135-25   this part and Chapter 36, Water Code, or Chapter 1331, Acts of the
135-26   76th Legislature, Regular Session, 1999, this part controls.
135-27           PART 11.  TEXANA GROUNDWATER CONSERVATION DISTRICT
 136-1         SECTION 3.1101.  RATIFICATION OF CREATION.  The creation of
 136-2   the Texana Groundwater Conservation District in Jackson County by
 136-3   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 136-4   is ratified as required by Section 15(a) of that chapter, subject
 136-5   to approval at a confirmation election under Section 3.1107 of this
 136-6   part.
 136-7         SECTION 3.1102.  DEFINITION.  In this part, "district" means
 136-8   the Texana Groundwater Conservation District.
 136-9         SECTION 3.1103.  BOUNDARIES.  The boundaries of the district
136-10   are coextensive with the boundaries of Jackson County.
136-11         SECTION 3.1104.  GENERAL POWERS.  The district has all of the
136-12   rights, powers, privileges, authority, functions, and duties
136-13   provided by the general law of the state, including Chapter 36,
136-14   Water Code, applicable to groundwater conservation districts
136-15   created under Section 59, Article XVI, Texas Constitution.  This
136-16   part prevails over any provision of general law, including Chapter
136-17   36, Water Code,  or Chapter 1331, Acts of the 76th Legislature,
136-18   Regular Session, 1999, that is in conflict or inconsistent with
136-19   this part.
136-20         SECTION 3.1105.  BOARD OF DIRECTORS.  (a)  The district is
136-21   governed by a board of seven directors.
136-22         (b)  Temporary directors serve until initial directors are
136-23   elected under Section 3.1107 of this part.
136-24         (c)  Initial directors serve until permanent directors are
136-25   elected under Section 3.1108 of this part.
136-26         (d)  Permanent directors serve staggered four-year terms.
136-27         (e)  Each director must qualify to serve as director in the
 137-1   manner provided by Section 36.055, Water Code.
 137-2         (f)  A director serves until the director's successor has
 137-3   qualified.
 137-4         (g)  If there is a vacancy on the board, the remaining
 137-5   directors shall appoint a director to serve the remainder of the
 137-6   term.
 137-7         (h)  A director may not receive a salary or other
 137-8   compensation for service as a director but may be reimbursed for
 137-9   actual expenses of attending meetings at the rate in effect for
137-10   employees of Jackson County.
137-11         SECTION 3.1106.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
137-12   PRECINCTS.  (a)  The directors of the district shall be elected
137-13   according to the commissioners precinct method as provided by this
137-14   section.
137-15         (b)  Three directors shall be elected by the qualified voters
137-16   of the entire district, and one director shall be elected from each
137-17   county commissioners precinct by the qualified voters of that
137-18   precinct.
137-19         (c)  To be qualified to be a candidate for or to serve as a
137-20   director at large, a person must be a registered voter in the
137-21   district.  To be a candidate for or to serve as director from a
137-22   county commissioners precinct, a person must be a registered voter
137-23   of that precinct.
137-24         (d)  A person shall indicate on the application for a place
137-25   on the ballot:
137-26               (1)  the precinct that the person seeks to represent;
137-27   or
 138-1               (2)  that the person seeks to represent the district at
 138-2   large.
 138-3         (e)  When the boundaries of the commissioners precincts are
 138-4   changed, each director in office on the effective date of the
 138-5   change or elected to a term of office beginning on or after the
 138-6   effective date of the change serves in the precinct to which the
 138-7   director was elected for the entire term to which the director was
 138-8   elected, even though the change in boundaries places the person's
 138-9   residence outside the precinct for which the person was elected.
138-10         SECTION 3.1107.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
138-11   (a)  The temporary board of directors shall call and hold an
138-12   election to confirm establishment of the district and to elect
138-13   initial directors.
138-14         (b)  At the confirmation and initial directors election, the
138-15   temporary board of directors shall have placed on the ballot the
138-16   name of any candidate filing for an initial director position and
138-17   blank spaces to write in the names of other persons.  A temporary
138-18   director who is qualified to be a candidate under Sections 3.1105
138-19   and 3.1106 of this part may file for an initial director position.
138-20         (c)  Section 41.001(a), Election Code, does not apply to a
138-21   confirmation and initial directors election held as provided by
138-22   this section.
138-23         (d)  Except as provided by this section, a confirmation and
138-24   initial directors election must be conducted as provided by
138-25   Sections 36.017(b)-(h), Water Code, and the Election Code.
138-26         (e)  If the majority of the votes cast at an election held
138-27   under this section is against the confirmation of the district, the
 139-1   temporary directors may not call another election under this
 139-2   section before the first anniversary of that election.
 139-3         SECTION 3.1108.  ELECTION OF DIRECTORS.  (a)  On the first
 139-4   Saturday in May of the first even-numbered year after the year in
 139-5   which the district is authorized to be created at a confirmation
 139-6   election, an election shall be held in the district for the
 139-7   election of two directors at large and two directors representing
 139-8   precincts to serve four-year terms and one director at large and
 139-9   two directors representing precincts to serve two-year terms.
139-10         (b)  On the first Saturday in May of each subsequent second
139-11   year following the election, the appropriate number of directors
139-12   shall be elected.
139-13         SECTION 3.1109.  LIMITATION ON TAXATION.  The district may
139-14   not levy or collect an ad valorem tax at a rate that exceeds two
139-15   cents on each $100 valuation of taxable property in the district.
139-16         SECTION 3.1110.  CONTRACTS WITH GOVERNMENT ENTITIES.
139-17   (a)  The district may contract with other government entities.
139-18         (b)  The district may contract with other governmental
139-19   entities, including river authorities located in the district, for
139-20   the performance of any or all district functions.  A river
139-21   authority with which the district contracts under this section may
139-22   perform district functions as provided by the contract.
139-23         PART 12.  TRI-COUNTY GROUNDWATER CONSERVATION DISTRICT
139-24         SECTION 3.1201.  RATIFICATION OF CREATION.  The creation of
139-25   the Tri-County Groundwater Conservation District in Foard,
139-26   Hardeman, and Wilbarger counties by Chapter 1331, Acts of the 76th
139-27   Legislature, Regular Session, 1999, is ratified as required by
 140-1   Section 15(a) of that chapter, subject to approval at a
 140-2   confirmation election under Section 3.1207 of this part.
 140-3         SECTION 3.1202.  DEFINITION.  In this part, "district" means
 140-4   the Tri-County Groundwater Conservation District.
 140-5         SECTION 3.1203.  BOUNDARIES.  The boundaries of the district
 140-6   are coextensive with the boundaries of Foard, Hardeman, and
 140-7   Wilbarger counties.
 140-8         SECTION 3.1204.  GENERAL POWERS.  The district has all of the
 140-9   rights, powers, privileges, authority, functions, and duties
140-10   provided by the general law of the state, including Chapter 36,
140-11   Water Code, applicable to groundwater conservation districts
140-12   created under Section 59, Article XVI, Texas Constitution.  This
140-13   part prevails over any provision of general law, including Chapter
140-14   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
140-15   Regular Session, 1999, that is in conflict or inconsistent with
140-16   this part.
140-17         SECTION 3.1205.  BOARD OF DIRECTORS.  (a)  The district is
140-18   governed by a board of six directors.  Two directors are appointed
140-19   by the commissioners court of each county in the district.
140-20         (b)  Each director must qualify to serve as director in the
140-21   manner provided by Section 36.055, Water Code.
140-22         (c)  Directors other than initial directors serve staggered
140-23   four-year terms.
140-24         (d)  A director serves until the director's successor has
140-25   qualified.
140-26         (e)  If there is a vacancy on the board, the appropriate
140-27   commissioners court shall appoint a director to serve the remainder
 141-1   of the term.
 141-2         (f)  The appropriate commissioners court shall appoint a
 141-3   director to succeed a director on or before the date the director's
 141-4   term expires.
 141-5         (g)  A director may not receive a salary or other
 141-6   compensation for service as a director but may be reimbursed for
 141-7   actual expenses of attending meetings.
 141-8         SECTION 3.1206.  APPOINTMENT AND TERMS OF INITIAL DIRECTORS.
 141-9   (a)  As soon as practicable after September 1, 2001, the
141-10   commissioners courts of Foard, Hardeman, and Wilbarger counties
141-11   shall each appoint two initial directors.
141-12         (b)  The initial directors serve terms as follows:
141-13               (1)  the two initial directors appointed by the Foard
141-14   County Commissioners Court serve terms expiring February 1, 2002;
141-15               (2)  the two initial directors appointed by the
141-16   Hardeman County Commissioners Court serve terms expiring February
141-17   1, 2004; and
141-18               (3)  the two initial directors appointed by the
141-19   Wilbarger County Commissioners Court serve terms expiring February
141-20   1, 2006.
141-21         SECTION 3.1207.  CONFIRMATION ELECTION.  (a)  The board of
141-22   directors shall call and hold an election to confirm the
141-23   establishment of the district.
141-24         (b)  Section 41.001(a), Election Code, does not apply to a
141-25   confirmation election held as provided by this section.
141-26         (c)  Except as provided by this section, a confirmation
141-27   election must be conducted as provided by Sections 36.017(b)-(h),
 142-1   Water Code, and the Election Code.
 142-2         SECTION 3.1208.  TAXING AUTHORITY.  The district may levy and
 142-3   collect an ad valorem tax in the district at a rate not to exceed
 142-4   one cent on each $100 of assessed valuation.
 142-5         SECTION 3.1209.  EXPIRATION.  If the creation of the district
 142-6   is not confirmed at a confirmation election held under Section
 142-7   3.1207 of this part before September 1, 2003, the district is
 142-8   dissolved and this part expires on that date.
 142-9               ARTICLE 4.  WATER INFRASTRUCTURE FINANCING
142-10         SECTION 4.01.  Chapter 15, Water Code, is amended by adding
142-11   Subchapter O to read as follows:
142-12                SUBCHAPTER O.  WATER INFRASTRUCTURE FUND
142-13         Sec. 15.901.  DEFINITIONS.  In this subchapter:
142-14               (1)  "Eligible political subdivision" means:
142-15                     (A)  a municipality;
142-16                     (B)  a county; or
142-17                     (C)  an entity created under the authority of
142-18   Sections 52(b)(1) and (2), Article III, or Section 59, Article XVI,
142-19   Texas Constitution.
142-20               (2)  "Fund" means the water infrastructure fund.
142-21               (3)  "Metropolitan statistical area" means an area so
142-22   designated by the United States Office of Management and Budget.
142-23               (4)  "Political subdivision bonds" means bonds or other
142-24   obligations issued by a political subdivision to fund a project and
142-25   purchased by the board from money in the fund.
142-26               (5)  "Project" means any undertaking or work, including
142-27   planning and design activities and work to obtain regulatory
 143-1   authority, to conserve, mitigate, convey, and develop water
 143-2   resources of the state, including any undertaking or work done
 143-3   outside the state that the board determines will result in water
 143-4   being available for use in or for the benefit of the state.
 143-5         Sec. 15.902.  FINDINGS.  The legislature finds that:
 143-6               (1)  the creation of the fund and the administration of
 143-7   the fund by the board will encourage the conservation and
 143-8   development of the water resources of the state;
 143-9               (2)  the use of the fund is in furtherance of the
143-10   public purpose of conserving and developing the water resources of
143-11   the state; and
143-12               (3)  the use of the fund for the purposes provided by
143-13   this subchapter is for the benefit of both the state and the
143-14   political subdivisions to which the board makes financial
143-15   assistance available in accordance with this subchapter and
143-16   constitutes a program under, and is in furtherance of the public
143-17   purposes set forth in, Section 52-a, Article III, Texas
143-18   Constitution.
143-19         Sec. 15.903.  WATER INFRASTRUCTURE FUND.  (a)  The water
143-20   infrastructure fund is a special account in the general revenue
143-21   fund to be administered by the board under this subchapter and
143-22   rules adopted by the board under this subchapter.  Money in the
143-23   fund may be used to pay for the implementation of water projects
143-24   recommended through the state and regional water planning processes
143-25   under Sections 16.051 and 16.053.
143-26         (b)  The fund consists of:
143-27               (1)  appropriations from the legislature;
 144-1               (2)  any other fees or sources of revenue that the
 144-2   legislature may dedicate for deposit to the fund;
 144-3               (3)  repayments of loans made from the fund;
 144-4               (4)  interest earned on money credited to the fund;
 144-5               (5)  depository interest allocable to the fund in the
 144-6   general revenue fund;
 144-7               (6)  money from gifts, grants, or donations to the
 144-8   fund;
 144-9               (7)  money from revenue bonds or other sources
144-10   designated by the board; and
144-11               (8)  proceeds from the sale of political subdivision
144-12   bonds or obligations held in the fund and not otherwise pledged to
144-13   the discharge, repayment, or redemption of revenue bonds or other
144-14   bonds, the proceeds of which were placed in the fund.
144-15         Sec. 15.904.  USE OF WATER INFRASTRUCTURE FUND.  (a)  The
144-16   board may use the fund:
144-17               (1)  to make loans to political subdivisions at or
144-18   below market interest rates for projects;
144-19               (2)  to make grants, low-interest loans, or zero
144-20   interest loans to political subdivisions for projects to serve
144-21   areas outside metropolitan statistical areas in order to ensure
144-22   that the projects are implemented, or for projects to serve
144-23   economically distressed areas;
144-24               (3)  to make loans at or below market interest rates
144-25   for planning and design costs, permitting costs, and other costs
144-26   associated with state or federal regulatory activities with respect
144-27   to a project;
 145-1               (4)  as a source of revenue or security for the payment
 145-2   of principal and interest on bonds issued by the board if the
 145-3   proceeds of the sale of the bonds will be deposited in the fund;
 145-4   and
 145-5               (5)  to pay the necessary and reasonable expenses of
 145-6   the board in administering the fund.
 145-7         (b)  Funding under Subsection (a)(2) or under Subsection
 145-8   (a)(3) may not exceed 10 percent of the amount of financial
 145-9   assistance budgeted by the board to be made available from the fund
145-10   in a fiscal year.
145-11         (c)  Principal and interest payments on loans made under
145-12   Subsection (a)(3) may be deferred for a maximum of 10 years or
145-13   until construction of the project is completed, whichever is
145-14   earlier.
145-15         Sec. 15.905.  APPROVAL OF APPLICATIONS.  (a)  On review and
145-16   recommendation by the executive administrator, the board by
145-17   resolution may approve an application if the board finds that:
145-18               (1)  the application and the assistance applied for
145-19   meet the requirements of this subchapter and board rules;
145-20               (2)  the revenue or taxes, or both the revenue and
145-21   taxes, pledged by the applicant will be sufficient to meet all the
145-22   obligations assumed by the political subdivision; and
145-23               (3)  the project will meet water needs in a manner
145-24   consistent with the state and regional water plans as required by
145-25   Section 16.053(j), unless otherwise specified by an act of the
145-26   legislature.
145-27         (b)  For an application under this subchapter, a program of
 146-1   water conservation through a more effective use of water shall be
 146-2   required in the same manner as for approval of an application for
 146-3   financial assistance under Section 15.106.
 146-4         (c)  The board may deliver funds for the part of a loan or
 146-5   grant for a project relating to surface water development, other
 146-6   than for planning and design costs, permitting costs, and other
 146-7   costs associated with federal and state regulatory activities with
 146-8   respect to a project, only if the executive administrator makes a
 146-9   written finding that the applicant:
146-10               (1)  has the necessary water rights authorizing the
146-11   applicant to appropriate and use the water that the project will
146-12   provide, if the applicant is proposing surface water development;
146-13   or
146-14               (2)  has the right to use water that the project will
146-15   provide, if the applicant is proposing groundwater development.
146-16         Sec. 15.906.  APPLICABLE LAW.  Subchapter E, Chapter 17,
146-17   applies to financial assistance made available from the fund,
146-18   except that the board may also execute contracts as necessary to
146-19   evidence grant agreements.
146-20         Sec. 15.907.  RULES.  The board shall adopt rules necessary
146-21   to carry out this subchapter, including rules establishing
146-22   procedures for application for and for the award of financial
146-23   assistance, for the investment of funds, and for the administration
146-24   of the fund.
146-25         Sec. 15.908.  SALE OF POLITICAL SUBDIVISION BONDS.  (a)  The
146-26   board may sell or dispose of political subdivision bonds at the
146-27   price and under the terms that the board determines to be
 147-1   reasonable.
 147-2         (b)  The board may sell political subdivision bonds without
 147-3   making a previous offer to the political subdivision that issued
 147-4   the bonds and without advertising, soliciting, or receiving bids
 147-5   for sale.
 147-6         (c)  Notwithstanding other provisions of this chapter, the
 147-7   board may sell to the Texas Water Resources Finance Authority any
 147-8   political subdivision bonds purchased with money in the fund and
 147-9   may apply the proceeds of a sale in the manner provided by this
147-10   section.
147-11         (d)  Proceeds from the sale of political subdivision bonds
147-12   under this section shall be deposited in the fund for use as
147-13   provided by Section 15.904.
147-14         (e)  As part of a sales agreement with the Texas Water
147-15   Resources Finance Authority, the board by contract may agree to
147-16   perform the functions required to ensure that the political
147-17   subdivision pays the debt service on political subdivision bonds
147-18   sold and observes the conditions and requirements stated in those
147-19   bonds.
147-20         (f)  The board may exercise any powers necessary to carry out
147-21   the authority granted by this section, including the authority to
147-22   contract with any person to accomplish the purposes of this
147-23   section.
147-24         SECTION 4.02.  Chapter 15, Water Code, is amended by adding
147-25   Subchapter P to read as follows:
147-26               SUBCHAPTER P.  RURAL WATER ASSISTANCE FUND
147-27         Sec. 15.951.  PURPOSE.  The legislature finds that the rural
 148-1   areas of the state, characterized by small populations extended
 148-2   over disproportionately large service areas, require a means of
 148-3   financing water projects in addition to those established by other
 148-4   provisions of this chapter.
 148-5         Sec. 15.952.  DEFINITIONS.  In this subchapter:
 148-6               (1)  "District" means a conservation or reclamation
 148-7   district created under Section 52, Article III, or Section 59,
 148-8   Article XVI, Texas Constitution.
 148-9               (2)  "Federal agency" means an agency or other entity
148-10   of the United States Department of Agriculture or an agency or
148-11   entity that is acting through or on behalf of that department.
148-12               (3)  "Fund" means the rural water assistance fund.
148-13               (4)  "Rural political subdivision" means:
148-14                     (A)  a nonprofit water supply or sewer service
148-15   corporation, district, or municipality with a service area of
148-16   10,000 or less in population or that otherwise qualifies for
148-17   financing from a federal agency; or
148-18                     (B)  a county in which no urban area exceeds
148-19   50,000 in population.
148-20               (5)  "State agency" means an agency or other entity of
148-21   the state, including the Department of Agriculture and the Texas
148-22   Department of Housing and Community Affairs and any agency or
148-23   authority that is acting through or on behalf of the Department of
148-24   Agriculture or the Texas Department of Housing and Community
148-25   Affairs.
148-26         Sec. 15.953.  FUND. The rural water assistance fund is a
148-27   special account in the general revenue fund.  The fund consists of:
 149-1               (1)  money directly appropriated to the board;
 149-2               (2)  repayment of principal and interest from loans
 149-3   made from the fund not otherwise needed as a source of revenue
 149-4   pursuant to Section 17.9615(b);
 149-5               (3)  money transferred by the board from any sources
 149-6   available; and
 149-7               (4)  interest earned on the investment of money in the
 149-8   fund and depository interest allocable to the fund in the general
 149-9   revenue fund.
149-10         Sec. 15.954.  USE OF FUND.  The fund may be used:
149-11               (1)  to provide low-interest loans to rural political
149-12   subdivisions for water or water-related projects, including the
149-13   purchase of well fields, the purchase or lease of rights to produce
149-14   groundwater, and interim financing of construction projects;
149-15               (2)  to enable a rural political subdivision to obtain
149-16   water supplied by larger political subdivisions or to finance the
149-17   consolidation or regionalizing of neighboring political
149-18   subdivisions, or both;
149-19               (3)  to contract for an outreach and technical
149-20   assistance program to assist rural political subdivisions in
149-21   obtaining assistance through the fund;
149-22               (4)  to buy down interest rates on loans; or
149-23               (5)  to be used as a source of revenue for the payment
149-24   of principal and interest on water financial assistance bonds
149-25   issued by the board if the proceeds of the sale of these bonds will
149-26   be deposited into the rural water assistance fund.
149-27         Sec. 15.955.  FINANCIAL ASSISTANCE.  (a)  The board shall
 150-1   adopt rules necessary to administer this subchapter, including
 150-2   rules establishing procedures for the application for and award of
 150-3   loans, the distribution of loans, the investment of funds, and the
 150-4   administration of loans and the fund.
 150-5         (b)  A rural political subdivision may enter into an
 150-6   agreement with a federal agency or a state agency to submit a joint
 150-7   application for financial assistance under this subchapter.
 150-8         (c)  The board may not release from the fund money for the
 150-9   construction phase of parts of projects proposing surface water or
150-10   groundwater development until the executive administrator makes a
150-11   written finding that a rural political subdivision:
150-12               (1)  has the necessary water right authorizing it to
150-13   appropriate and use the water that the project will provide, if the
150-14   rural political subdivision is proposing surface water development;
150-15   or
150-16               (2)  has the right to use water that the project will
150-17   provide, if the rural political subdivision is proposing
150-18   groundwater development.
150-19         (d)  In passing on an application from a rural political
150-20   subdivision for financial assistance, the board shall consider:
150-21               (1)  the needs of the area to be served by the project,
150-22   the benefit of the project to the area, the relationship of the
150-23   project to the overall state water needs, and the relationship of
150-24   the project to the state water plan; and
150-25               (2)  the availability of revenue to the rural political
150-26   subdivision from all sources for the ultimate repayment of the cost
150-27   of the water supply project, including all interest.
 151-1         (e)  The board by resolution may approve an application if,
 151-2   after considering the factors listed in Subsection (d) and other
 151-3   relevant factors, the board finds that:
 151-4               (1)  the public interest is served by state assistance
 151-5   for the project; and
 151-6               (2)  the revenue or taxes pledged by the rural
 151-7   political subdivision will be sufficient to meet all the
 151-8   obligations assumed by the rural political subdivision during the
 151-9   succeeding period of not more than 50 years.
151-10         (f)  A program of water conservation for the more efficient
151-11   use of water shall be required in the same manner as is required
151-12   for approval of an application for financial assistance under
151-13   Section 15.106.
151-14         (g)  Sections 17.183-17.187 apply to the construction of
151-15   projects funded pursuant to this subchapter.
151-16         (h)  A nonprofit water supply or sewer service corporation is
151-17   exempt from payment of any sales tax that may be incurred under
151-18   other law or ordinance for any project financed by the fund.
151-19         SECTION 4.03.  Section 5.235(j), Water Code, is amended to
151-20   read as follows:
151-21         (j)  The fee for other uses of water not specifically named
151-22   in this section is $1 per acre-foot, except that no political
151-23   subdivision may be required to pay fees to use water for recharge
151-24   of underground freshwater-bearing sands and aquifers or for
151-25   abatement of natural pollution.  This fee is waived for
151-26   applications for instream-use water rights deposited into the Texas
151-27   Water Trust.
 152-1         SECTION 4.04.  Section 15.001, Water Code, is amended by
 152-2   adding Subdivision (12) to read as follows:
 152-3               (12)  "Regionalization" means development of a water
 152-4   supply or wastewater collection and treatment system that
 152-5   incorporates multiple service areas into an areawide service
 152-6   facility or any such system that serves an area that includes more
 152-7   than a single county, city, special district, or other political
 152-8   subdivision of the state.
 152-9         SECTION 4.05.  Section 15.002(a), Water Code, is amended to
152-10   read as follows:
152-11         (a)  The legislature finds that it is in the public interest
152-12   and to the benefit of the general public of the state to encourage
152-13   and to assist in the planning and construction of projects to
152-14   develop and conserve the storm water and floodwater as well as the
152-15   ordinary flows of the rivers and streams of the state, to maintain
152-16   and enhance the quality of the water of the state, to provide
152-17   protection to the state's citizens from the floodwater of the
152-18   rivers and streams of the state, to provide drainage, subsidence
152-19   control, public beach nourishment, recharge, chloride control,
152-20   brush control, weather modification, regionalization, and
152-21   desalination [desalinization], to provide for the management of
152-22   aquatic vegetation, and other purposes as provided by law or board
152-23   rule.
152-24         SECTION 4.06.  Section 15.011(b), Water Code, is amended to
152-25   read as follows:
152-26         (b)  After notice and hearing and subject to any limitations
152-27   established by the General Appropriations Act, the board may
 153-1   transfer money from the fund to the loan fund created under
 153-2   Subchapter C [of this chapter], the storage acquisition fund
 153-3   created under Subchapter E [of this chapter], the research and
 153-4   planning fund created under Subchapter F [of this chapter], the
 153-5   hydrographic survey account created under Subchapter M [of this
 153-6   chapter], provided the hydrographic survey account transfer does
 153-7   not exceed $425,000, [and] the aquatic vegetation management fund
 153-8   created under Subchapter N, and the rural water assistance fund
 153-9   created under Subchapter P [of this chapter].
153-10         SECTION 4.07.  Sections 15.102(a) and (b), Water Code, are
153-11   amended to read as follows:
153-12         (a)  The loan fund may be used by the board to provide loans
153-13   of financial assistance to political subdivisions, federal
153-14   agencies, or both political subdivisions and federal agencies
153-15   acting jointly for the construction, acquisition, improvement, or
153-16   enlargement of projects involving water conservation, water
153-17   development, or water quality enhancement, providing nonstructural
153-18   and structural flood control, or drainage, project recreation lands
153-19   and revenue-generating recreational improvements within any
153-20   watershed, or providing recharge, chloride control, subsidence
153-21   control, brush control, weather modification, regionalization, or
153-22   desalination [desalinization] as provided by legislative
153-23   appropriations, this chapter, and the board rules.
153-24         (b)  The loan fund may also be used by the board to provide
153-25   grants for:
153-26               (1)  projects that include supplying water and
153-27   wastewater services in economically distressed areas, including
 154-1   projects involving retail distribution of those services; and
 154-2               (2)  desalination, brush control, weather modification,
 154-3   regionalization, and projects providing regional water quality
 154-4   enhancement services as defined by board rule, including regional
 154-5   conveyance systems.
 154-6         SECTION 4.08.  Section 15.105, Water Code, is amended to read
 154-7   as follows:
 154-8         Sec. 15.105.  CONSIDERATIONS IN PASSING ON APPLICATION. (a)
 154-9   In passing on an application for financial assistance from the loan
154-10   fund, the board shall consider but is not limited to:
154-11               (1)  the needs of the area to be served by the project
154-12   and the benefit of the project to the area in relation to the needs
154-13   of other areas requiring state assistance in any manner and the
154-14   benefits of those projects to the other areas;
154-15               (2)  the availability of revenue to the applicant from
154-16   all sources for the ultimate repayment of the cost of the project,
154-17   including all interest;
154-18               (3)  the relationship of the project to overall
154-19   statewide needs;
154-20               (4)  the ability of the applicant to finance the
154-21   project without state assistance; [and]
154-22               (5)  for applications for grants for economically
154-23   distressed areas, the regulatory efforts by the county in which the
154-24   project is located to control the construction of subdivisions that
154-25   lack basic utility services; and
154-26               (6)  for applications for grants under Section
154-27   15.102(b)(2), the ability of the applicant to construct the project
 155-1   without the grant and the benefits of the project to water and
 155-2   wastewater needs of the state.
 155-3         (b)  The board by rule shall further define eligibility for
 155-4   grants under this subchapter.
 155-5         SECTION 4.09.  Section 15.106(a), Water Code, is amended to
 155-6   read as follows:
 155-7         (a)  The board, by resolution, may approve an application for
 155-8   financial assistance [a loan] if after considering the factors
 155-9   listed in Section 15.105 of this code and any other relevant
155-10   factors, the board finds:
155-11               (1)  that the public interest requires state
155-12   participation in the project; and
155-13               (2)  that in its opinion the revenue or taxes pledged
155-14   by the political subdivision will be sufficient to meet all the
155-15   obligations assumed by the political subdivision.
155-16         SECTION 4.10.  Section 15.107, Water Code, is amended to read
155-17   as follows:
155-18         Sec. 15.107.  METHOD OF MAKING [LOANS OF] FINANCIAL
155-19   ASSISTANCE AVAILABLE.  (a)  The board may make financial assistance
155-20   available to successful applicants in any manner that it considers
155-21   economically feasible including:
155-22               (1)  contracts or agreements with a political
155-23   subdivision for the payment of the principal of or interest on or
155-24   both the principal of and interest on bonds or other obligations
155-25   issued or to be issued by the political subdivision;
155-26               (2)  contracts or agreements with a political
155-27   subdivision for the purpose of providing the political
 156-1   subdivision's share of any cost-sharing required as a participant
 156-2   in or local sponsor of any federal project; [or]
 156-3               (3)  purchase of the bonds or other obligations of a
 156-4   political subdivision for the purpose of completely or partially
 156-5   financing the project for which the application is being submitted;
 156-6   or
 156-7               (4)  contracts or agreements for the receipt of funds
 156-8   and performance of obligations in relation to any grant of funds
 156-9   provided by the board.
156-10         (b)  Contracts or agreements entered into under Subdivision
156-11   (1) of Subsection (a) of this section may cover all or any part of
156-12   the debt service requirements in a given year and may cover debt
156-13   service requirements in as many years of an issue as the board
156-14   considers appropriate.
156-15         (c)  In a determination on a loan for financial assistance,
156-16   the board may approve interest deferral or the capitalization of
156-17   interest costs and may approve periods of repayment for the loans
156-18   of up to 50 years.
156-19         SECTION 4.11.  Section 15.434, Water Code, is amended to read
156-20   as follows:
156-21         Sec. 15.434.  USE OF MONEY IN FUND.  Money deposited to the
156-22   credit of the agricultural soil and water conservation fund, on
156-23   appropriation by the legislature to the board, the Department of
156-24   Agriculture, the State Soil and Water Conservation Board, the Texas
156-25   Agricultural Experiment Station, the Texas Agricultural Extension
156-26   Service, public colleges and universities, and other state agencies
156-27   shall be used for the following purposes:
 157-1               (1)  agricultural water conservation technical
 157-2   assistance programs;
 157-3               (2)  agricultural water conservation, education, and
 157-4   demonstration programs;
 157-5               (3)  purchase of equipment, including demonstration and
 157-6   educational equipment;
 157-7               (4)  grants made to groundwater [underground water]
 157-8   conservation districts and political subdivisions for the purchase
 157-9   of equipment under programs established by Subchapter H of this
157-10   chapter;
157-11               (5)  research in water utilization and conservation
157-12   including artificial recharge and secondary recovery of groundwater
157-13   [underground water];
157-14               (6)  desalination [desalinization];
157-15               (7)  weather modification;
157-16               (8)  technical assistance programs for developing
157-17   on-farm soil and water conservation plans developed jointly by
157-18   landowners and operators and local soil and water conservation
157-19   districts, as provided by Subchapter H, Chapter 201, Agriculture
157-20   Code;
157-21               (9)  research and demonstration relating to the
157-22   production of native and low-water-use plants and water-efficient
157-23   crops;
157-24               (10)  a pilot program for low-interest loans for the
157-25   purchase of agricultural water conservation systems established by
157-26   Subchapter I of this chapter; [and]
157-27               (11)  research, demonstration, and education relating
 158-1   to brush control; and
 158-2               (12)  regionalization designed to promote agricultural
 158-3   water conservation.
 158-4         SECTION 4.12.  Section 15.471, Water Code, is amended to read
 158-5   as follows:
 158-6         Sec. 15.471.  GRANTS; PURPOSES.  The board may make grants of
 158-7   money to groundwater [underground water] conservation districts, to
 158-8   political subdivisions, and to other districts created under
 158-9   Article III, Sections 52(b)(1) and (2), or Article XVI, Section 59,
158-10   of the Texas Constitution for purchasing equipment required for:
158-11               (1)  measurement and evaluation of irrigation systems
158-12   and agricultural water conservation practices on irrigated land,
158-13   dryland, and rangeland;
158-14               (2)  demonstration of efficient irrigation systems and
158-15   agricultural water conservation practices on irrigated land,
158-16   dryland, and rangeland;
158-17               (3)  testing and evaluation of water quality and the
158-18   suitability of water from groundwater or surface water resources
158-19   for irrigation, rural domestic use, livestock, or agricultural
158-20   industry use;
158-21               (4)  demonstration of efficient or sound chemical
158-22   application and evaluation or demonstration of systems which will
158-23   prevent contamination of groundwater and surface water from
158-24   chemicals and other substances used in agriculture; or
158-25               (5)  measurement and data collection related to the
158-26   conservation of groundwater resources.
158-27         SECTION 4.13.  Section 15.602, Water Code, is amended by
 159-1   adding a new Subdivision (8) and redesignating existing
 159-2   Subdivisions (8) through (14) to read as follows:
 159-3               (8)  "Person" means an individual, corporation,
 159-4   partnership, association, state, municipality, commission, or
 159-5   political subdivision of a state or any interstate body, as defined
 159-6   by Section 502 of the federal act, including a political
 159-7   subdivision as defined by this subchapter, if the person is
 159-8   eligible for financial assistance under federal law establishing
 159-9   the revolving fund.
159-10               (9)  "Political subdivision" means a municipality,
159-11   intermunicipal, interstate, or state agency, any other public
159-12   entity eligible for assistance under this subchapter, or a
159-13   nonprofit water supply corporation created and operating under
159-14   Chapter 67, if such entity is eligible for financial assistance
159-15   under federal law establishing the state revolving fund or an
159-16   additional state revolving fund.
159-17               (10) [(9)]  "Public water system" means a system that
159-18   is owned by any person and that meets the definition of public
159-19   water system in the Safe Drinking Water Act.
159-20               (11) [(10)]  "Public works" means any project to
159-21   acquire, construct, improve, repair, or otherwise provide any
159-22   buildings, structures, facilities, equipment, or other real or
159-23   personal property or improvements designed for public use,
159-24   protection, or enjoyment undertaken by a political subdivision and
159-25   paid for, in whole or in part, out of public funds.
159-26               (12) [(11)]  "Revolving fund" means the state water
159-27   pollution control revolving fund.
 160-1               (13) [(12)]  "Safe Drinking Water Act" means Title XIV
 160-2   of the federal Public Health Service Act, commonly known as the
 160-3   Safe Drinking Water Act, as amended (42 U.S.C. Section 300f et
 160-4   seq.).
 160-5               (14) [(13)]  "Safe drinking water revolving fund" means
 160-6   the fund established by the board as an additional state revolving
 160-7   fund to provide financial assistance in accordance with the federal
 160-8   program established pursuant to the provisions of the Safe Drinking
 160-9   Water Act.
160-10               (15) [(14)]  "Treatment works" has the meaning
160-11   established by the federal act and the eligible components of the
160-12   management programs established by Sections 319 and 320 of the
160-13   federal act.
160-14         SECTION 4.14.  Section 15.603(a), Water Code, is amended to
160-15   read as follows:
160-16         (a)  The revolving fund is held separately from other funds
160-17   by the board outside the State Treasury to provide financial
160-18   assistance to political subdivisions for construction of treatment
160-19   works and to persons for nonpoint source pollution control and
160-20   estuary management projects.
160-21         SECTION 4.15.  Section 15.604(a), Water Code, is amended to
160-22   read as follows:
160-23         (a)  The board may use the revolving fund for financial
160-24   assistance only as provided by the federal act:
160-25               (1)  to make loans, on the conditions that:
160-26                     (A)  those loans are made at or below market
160-27   interest rates, including interest-free loans, at terms not to
 161-1   exceed 20 years;
 161-2                     (B)  principal and interest payments will begin
 161-3   not later than one year after completion of any treatment works and
 161-4   all loans will be fully amortized not later than 20 years after
 161-5   completion of the treatment works;
 161-6                     (C)  the recipient of a loan will establish a
 161-7   dedicated source of revenue for repayment of loans; and
 161-8                     (D)  the revolving fund will be credited with all
 161-9   payments of principal of and interest on all loans;
161-10               (2)  to buy or refinance the debt obligation of
161-11   political subdivisions at or below market rates if the debt
161-12   obligations were incurred after March 7, 1985;
161-13               (3)  to guarantee or purchase insurance for political
161-14   subdivisions if the guarantee or insurance would improve access to
161-15   market credit or reduce interest rates;
161-16               (4)  as a source of revenue or security for the payment
161-17   of principal and interest on bonds issued by the state if the
161-18   proceeds of the sale of those bonds will be deposited in the
161-19   revolving fund;
161-20               (5)  to provide loan guarantees to similar revolving
161-21   funds established by municipalities or intermunicipal agencies;
161-22               (6)  to earn interest on revolving fund accounts;
161-23               (7)  for the reasonable costs of administering the
161-24   revolving fund and conducting activities provided for by Title VI
161-25   of the federal act, except that those amounts may not exceed the
161-26   amount authorized under Title VI of the federal act; [and]
161-27               (8)  to provide financial assistance to persons for a
 162-1   nonpoint source pollution control project under Section 319 of the
 162-2   federal act or for an estuary management project under Section 320
 162-3   of the federal act; and
 162-4               (9)  for other purposes as provided by the federal act.
 162-5         SECTION 4.16.  Section 15.607, Water Code, is amended to read
 162-6   as follows:
 162-7         Sec. 15.607.  APPROVAL OF APPLICATION.  On review of
 162-8   recommendations by the executive administrator, the board by
 162-9   resolution may approve an application if the board finds that in
162-10   its opinion the revenue or taxes or both revenue and taxes pledged
162-11   by the applicant will be sufficient to meet all the obligations
162-12   assumed by the applicant [political subdivision] and that the
162-13   application and assistance applied for meet the requirements of the
162-14   federal act and state law.  A program of water conservation for the
162-15   more effective use of water shall be required in the same manner as
162-16   required for approval of an application for financial assistance
162-17   under Section 15.106 of this code.
162-18         SECTION 4.17.  Subchapter C, Chapter 16, Water Code, is
162-19   amended by adding Section 16.059 to read as follows:
162-20         Sec. 16.059.  COLLECTION OF INSTREAM FLOW DATA; CONDUCT OF
162-21   STUDIES.  (a)  The Parks and Wildlife Department, the commission,
162-22   and the board, in cooperation with other appropriate governmental
162-23   agencies, shall jointly establish and continuously maintain an
162-24   instream flow data collection and evaluation program and shall
162-25   conduct studies and analyses to determine appropriate methodologies
162-26   for determining flow conditions in the state's rivers and streams
162-27   necessary to support a sound ecological environment.  Any stream
 163-1   that consists only of floodwaters and is dry more than 75 percent
 163-2   of the year is exempt from this section.
 163-3         (b)  The Parks and Wildlife Department, the commission,  and
 163-4   the board shall each designate an employee to share equally in the
 163-5   oversight of the program studies.  Other responsibilities shall be
 163-6   divided between the Parks and Wildlife Department, the commission,
 163-7   and the board to maximize present in-house capabilities of
 163-8   personnel and equipment and to minimize costs to the state.
 163-9         (c)  The Parks and Wildlife Department, the commission, and
163-10   the board shall each have reasonable access to all data, studies,
163-11   analyses, information, and reports produced by the other agencies.
163-12         (d)  The priority studies shall be completed not later than
163-13   December 31, 2010.  The Parks and Wildlife Department, the
163-14   commission, and the board shall establish a work plan that
163-15   prioritizes the studies and that sets interim deadlines providing
163-16   for publication of flow determinations for individual rivers and
163-17   streams on a reasonably consistent basis throughout the prescribed
163-18   study period.  Before publication, completed studies shall be
163-19   submitted for comment to the commission, the board, and the Parks
163-20   and Wildlife Department.
163-21         (e)  Results of studies completed under this section shall be
163-22   considered by the commission in its review of any management plan,
163-23   water right, or interbasin transfer.
163-24         (f)  The board may authorize the use of money from the
163-25   research and planning fund established under Chapter 15 to
163-26   accomplish the purposes of this section.  The money shall be used
163-27   by the board in cooperation with the commission and the Parks and
 164-1   Wildlife Department for interagency contracts with cooperating
 164-2   agencies and universities and contracts with private sector
 164-3   establishments, as necessary, to accomplish the purposes of this
 164-4   section.
 164-5         SECTION 4.18.  Section 17.853(c), Water Code, is amended to
 164-6   read as follows:
 164-7         (c)  The board may use the fund only:
 164-8               (1)  to provide state matching funds for federal funds
 164-9   provided to the state water pollution control revolving fund or to
164-10   any additional state revolving fund created under Subchapter J,
164-11   Chapter 15;
164-12               (2)  to provide financial assistance from the proceeds
164-13   of taxable bond issues to water supply corporations organized under
164-14   Chapter 67, and other participants;
164-15               (3)  to provide financial assistance to participants
164-16   for the construction of water supply projects and treatment works;
164-17               (4)  to provide financial assistance for an interim
164-18   construction period to participants for projects for which the
164-19   board will provide long-term financing through the water
164-20   development fund; [and]
164-21               (5)  to provide financial assistance for water supply
164-22   and sewer service projects in economically distressed areas as
164-23   provided by Subchapter K, Chapter 17, to the extent the board can
164-24   make that assistance without adversely affecting the current or
164-25   future integrity of the fund or of any other financial assistance
164-26   program of the board; and
164-27               (6)  to provide funds to the water infrastructure fund
 165-1   created under Section 15.903.
 165-2         SECTION 4.19.  Sections 17.871(2) and (6), Water Code, are
 165-3   amended to read as follows:
 165-4               (2)  "Borrower district" means a political subdivision,
 165-5   including a district or authority created under Article III,
 165-6   Sections 52(b)(1) and (2), or Article XVI, Section 59, of the Texas
 165-7   Constitution, that receives or is eligible to receive a
 165-8   conservation loan from the board for a purpose described by Section
 165-9   17.895 or 17.8955 [improvement to district facilities].
165-10               (6)  "Lender district" means a political subdivision,
165-11   including a soil and water conservation district under Chapter 201,
165-12   Agriculture Code, a groundwater [an underground water] conservation
165-13   district created under Article XVI, Section 59, of the Texas
165-14   Constitution, or a district or authority created under Article III,
165-15   Section 52(b)(1), or Article XVI, Section 59, of the Texas
165-16   Constitution authorized to supply water for irrigation purposes,
165-17   that is eligible to receive or that receives a loan from the board
165-18   for the purpose of making conservation loans to individual
165-19   borrowers.
165-20         SECTION 4.20.  Section 17.895, Water Code, is amended to read
165-21   as follows:
165-22         Sec. 17.895.  CONSERVATION LOANS.  (a)  This section applies
165-23   only to a conservation loan from a lender district that is:
165-24               (1)  a soil and water conservation district under
165-25   Chapter 201, Agriculture Code;
165-26               (2)  a groundwater conservation district created under
165-27   Section 59, Article XVI, Texas Constitution; or
 166-1               (3)  a district or authority created under Section
 166-2   52(b)(1), Article III, or Section 59, Article XVI, Texas
 166-3   Constitution.
 166-4         (b)  The board or a lender district [districts] may make
 166-5   conservation loans for capital equipment or materials, labor,
 166-6   preparation costs, and installation costs:
 166-7               (1)  to improve water use efficiency of water delivery
 166-8   and application on existing irrigation systems;
 166-9               (2)  for preparing irrigated land to be converted to
166-10   dryland conditions; and
166-11               (3)  for preparing dryland for more efficient use of
166-12   natural precipitation[;]
166-13               [(4)  for preparing and maintaining land to be used for
166-14   brush control activities, including but not limited to activities
166-15   conducted pursuant to Chapter 203, Agriculture Code; or]
166-16               [(5)  for implementing precipitation enhancement
166-17   activities in areas of the state where such activities would be, in
166-18   the board's judgment, most effective].
166-19         (c) [(b)]  Conservation loans for the purposes listed in
166-20   Subsection (b) [(a)] may be made by lender districts to individual
166-21   borrowers for use on private property or by the board to borrower
166-22   districts [for use on district facilities].
166-23         (d) [(c)]  The board may make conservation loans to borrower
166-24   districts for the cost of purchasing and installing devices, on
166-25   public or private property, designed to indicate the amount of
166-26   water withdrawn for irrigation purposes.
166-27         (e) [(d)]  For purposes of this section, the board or lender
 167-1   districts may seek the advice of the Department of Agriculture
 167-2   regarding the feasibility of a project for which a conservation
 167-3   loan is sought.
 167-4         SECTION 4.21.  Subchapter J, Chapter 17, Water Code, is
 167-5   amended by adding Section 17.8955 to read as follows:
 167-6         Sec. 17.8955.  CONSERVATION LOANS FOR BRUSH CONTROL AND
 167-7   PRECIPITATION ENHANCEMENT.  (a)  The board or a lender district may
 167-8   make a conservation loan for capital equipment or materials, labor,
 167-9   preparation costs, and installation costs for:
167-10               (1)  preparing and maintaining land to be used for
167-11   brush control activities, including activities conducted under
167-12   Chapter 203, Agriculture Code; or
167-13               (2)  implementing precipitation enhancement activities
167-14   in areas of the state where those activities would be, in the
167-15   board's judgment, most effective.
167-16         (b)  A conservation loan for a purpose listed in Subsection
167-17   (a) may be made by a lender district to an individual borrower for
167-18   use on private property or by the board to a borrower district.
167-19         SECTION 4.22.  Subchapter L, Chapter 17, Water Code, is
167-20   amended by adding Section 17.9615 to read as follows:
167-21         Sec. 17.9615.  TRANSFERS TO RURAL WATER ASSISTANCE FUND.
167-22   (a)  The board may direct the comptroller to transfer amounts from
167-23   the financial assistance account to the rural water assistance fund
167-24   to provide financial assistance under this subchapter for the
167-25   purposes provided in Section 15.954.
167-26         (b)  The board shall use the rural water assistance fund as a
167-27   source of revenue to be deposited in accordance with this
 168-1   subchapter for the payment of principal and interest on water
 168-2   financial assistance bonds issued by the board, the proceeds of
 168-3   which are to be deposited into the rural water assistance fund and
 168-4   to be used to make payments under a bond enhancement agreement with
 168-5   respect to principal or interest on the water financial assistance
 168-6   bonds.
 168-7         SECTION 4.23.  Subchapter L, Chapter 17, Water Code, is
 168-8   amended by adding Section 17.9616 to read as follows:
 168-9         Sec. 17.9616.  TRANSFER TO WATER INFRASTRUCTURE FUND.
168-10   (a)  The board may direct the comptroller to transfer amounts from
168-11   the financial assistance account to the water infrastructure fund
168-12   to provide financial assistance under this subchapter for the
168-13   purposes provided in Section 15.904.
168-14         (b)  The board shall use the water infrastructure fund as a
168-15   source of revenue to be deposited in accordance with this
168-16   subchapter for the payment of principal and interest on water
168-17   financial assistance bonds issued by the board, the proceeds of
168-18   which are to be deposited into the water infrastructure fund and to
168-19   be used to make payments under a bond enhancement agreement with
168-20   respect to principal or interest on the water financial assistance
168-21   bonds.
168-22         SECTION 4.24.  Section 11.32, Tax Code, is amended to read as
168-23   follows:
168-24         Sec. 11.32.  CERTAIN WATER CONSERVATION INITIATIVES.  The
168-25   governing body of a taxing unit by official action of the governing
168-26   body adopted in the manner required by law for official actions may
168-27   exempt from taxation part or all of the assessed value of property
 169-1   on which approved water conservation initiatives, desalination
 169-2   projects, or brush control initiatives have been implemented.  For
 169-3   purposes of this section, approved water conservation,
 169-4   desalination, and brush control initiatives shall be designated
 169-5   pursuant to an ordinance or other law adopted by the governing
 169-6   unit.
 169-7         SECTION 4.25.  Subchapter H, Chapter 151, Tax Code, is
 169-8   amended by adding Section 151.355 to read as follows:
 169-9         Sec. 151.355.  WATER-RELATED EXEMPTIONS.  The following are
169-10   exempted from taxes imposed by this chapter:
169-11               (1)  rainwater harvesting equipment or supplies, water
169-12   recycling and reuse equipment or supplies, or other equipment,
169-13   services, or supplies used to reduce or eliminate water use;
169-14               (2)  equipment, services, or supplies used for
169-15   desalination of surface water or groundwater;
169-16               (3)  equipment, services, or supplies used for brush
169-17   control designed to enhance the availability of water;
169-18               (4)  equipment, services, or supplies used for
169-19   precipitation enhancement;
169-20               (5)  equipment, services, or supplies used to construct
169-21   or operate a water or wastewater system or component of a system
169-22   sponsored by a political subdivision, as defined by Section 15.001,
169-23   Water Code, which is certified by the Texas Natural Resource
169-24   Conservation Commission as providing regional water or wastewater
169-25   service; and
169-26               (6)  equipment, services, or supplies used to construct
169-27   or operate a water supply or wastewater system by a private entity
 170-1   as a public-private partnership, as certified by the political
 170-2   subdivision, as defined by Section 15.001, Water Code, that is a
 170-3   party to the project.
 170-4             ARTICLE 5.  JOINT COMMITTEE ON WATER RESOURCES
 170-5         SECTION 5.01.  In this article, "committee" means the joint
 170-6   committee on water resources.
 170-7         SECTION 5.02.  The committee shall conduct an interim study
 170-8   and make recommendations regarding:
 170-9               (1)  increasing the efficient use of existing water
170-10   resources;
170-11               (2)  developing sufficient long-term water financing
170-12   strategies;
170-13               (3)  improving existing water conveyance systems;
170-14               (4)  the continuation of the Texas Water Advisory
170-15   Council;
170-16               (5)  determining the appropriate role of environmental
170-17   and wildlife concerns in water permitting and water development;
170-18   and
170-19               (6)  protection of the natural condition of beds and
170-20   banks of the state-owned watercourses.
170-21         SECTION 5.03.  The committee is composed of six members as
170-22   follows:
170-23               (1)  the chair of the Senate Committee on Natural
170-24   Resources and the chair of the House Committee on Natural
170-25   Resources;
170-26               (2)  two members of the senate appointed by the
170-27   lieutenant governor; and
 171-1               (3)  two members of the house of representatives
 171-2   appointed by the speaker of the house of representatives.
 171-3         SECTION 5.04.  The committee shall:
 171-4               (1)  meet at least annually with the Texas Natural
 171-5   Resource Conservation Commission and the Texas Water Development
 171-6   Board; and
 171-7               (2)  receive information relating to:
 171-8                     (A)  encouraging the effective development of
 171-9   water marketing and water movement;
171-10                     (B)  prioritizing the use of state funds for
171-11   financing the development and conservation of water resources; and
171-12                     (C)  identifying reasonable mechanisms, including
171-13   measures for encouraging donation of water rights, for protecting
171-14   instream uses.
171-15         SECTION 5.05.  Not later than November 1, 2002, the committee
171-16   shall make a final report to the lieutenant governor, the speaker
171-17   of the house of representatives, and the 78th Legislature
171-18   evaluating the issues described in Section 5.02 of this article.
171-19         SECTION 5.06.  The committee has the authority necessary to
171-20   perform its duties and, in connection with those duties, may call
171-21   and hold hearings.
171-22         SECTION 5.07.  The committee may request the assistance of
171-23   state agencies, departments, or offices to carry out its duties.
171-24         SECTION 5.08.  The Senate Committee on Natural Resources and
171-25   the House Committee on Natural Resources shall provide staff to the
171-26   committee.
171-27         SECTION 5.09.  The committee shall submit a proposed budget
 172-1   to the appropriate committee on administration in each house of the
 172-2   legislature.  The administration committees shall jointly approve
 172-3   the committee budget in an amount appropriate for the committee to
 172-4   accomplish its duties under this article.
 172-5         SECTION 5.10.  The committee may travel around the state and
 172-6   hold hearings or public meetings as needed to fulfill its duties
 172-7   under this article.
 172-8         SECTION 5.11.  This article expires and the committee is
 172-9   abolished on January 1, 2003.
172-10            ARTICLE 6.  RULEMAKING PROCEDURES FOR THE EDWARDS
172-11                            AQUIFER AUTHORITY
172-12         SECTION 6.01. Chapter 626, Acts of the 73rd Legislature,
172-13   Regular Session, 1993, is amended by adding Section 1.115 to read
172-14   as follows:
172-15         Sec. 1.115.  RULEMAKING PROCEDURES. (a)  The authority shall
172-16   comply with the procedures provided by this section in adopting
172-17   rules.
172-18         (b)  The authority shall provide, by using the United States
172-19   mail, notice of a proposed rule to all applicants and permit
172-20   holders.  The authority shall publish in a newspaper of general
172-21   circulation within the boundaries of the authority notice of a
172-22   public hearing on a proposed rule at least 14 days before the date
172-23   of the public hearing on the rule.  The notice must include:
172-24               (1)  the date, time, and place of the public hearing;
172-25               (2)  a statement of the general subject matter of the
172-26   proposed rule;
172-27               (3)  the procedures for obtaining copies of the
 173-1   proposed rule and for submitting comments; and
 173-2               (4)  the deadline for submitting comments.
 173-3         (c)  The board shall allow at least 45 days for comment on a
 173-4   proposed rule, other than an emergency rule, before the board
 173-5   adopts the rule.  The board shall consider all written comments and
 173-6   shall, in the order adopting the rule, state the reasons and
 173-7   justification for the rule and the authority's responses to the
 173-8   written comments.
 173-9         (d)  The meeting at which a proposed rule is adopted as a
173-10   final rule must be an open meeting, and the public must be allowed
173-11   to make comments on the proposed rule and the agency responses.  A
173-12   proposed rule becomes final and effective on the 10th day after the
173-13   date the rule is adopted by the board.
173-14         (e)  Notwithstanding Subsections (b)-(d) of this section, the
173-15   board may adopt emergency rules to prevent imminent harm to human
173-16   health, safety, or welfare, or if compliance with the procedures
173-17   provided in Subsections (b)-(d) would prevent an effective response
173-18   to emergency aquifer or springflow conditions.  The board may adopt
173-19   emergency rules at an emergency meeting called for that purpose.
173-20   Emergency rules are effective immediately on adoption for a period
173-21   of 120 days and may be renewed once for not more than 60 days.
173-22         (f)  Subsections (b)-(d) of this section do not apply to the
173-23   adoption of bylaws or internal procedures of the board and
173-24   authority.
173-25         SECTION 6.02. Section 1.15, Chapter 626, Acts of the 73rd
173-26   Legislature, Regular Session, 1993, is amended by adding
173-27   Subsections (e) and (f) to read as follows:
 174-1         (e)  The authority shall conduct a contested case hearing on
 174-2   a permit application if a person with a personal justiciable
 174-3   interest related to the application requests a hearing on the
 174-4   application.
 174-5         (f)  The authority shall adopt rules establishing procedures
 174-6   for contested case hearings consistent with Subchapters C, D, and
 174-7   F, Chapter 2001, Government Code.
 174-8         SECTION 6.03. Sections 1.11(h) and 1.41(e), Chapter 626, Acts
 174-9   of the 73rd Legislature, Regular Session, 1993, are repealed.
174-10         SECTION 6.04. A rule adopted by the Edwards Aquifer Authority
174-11   before the effective date of this Act remains in effect until
174-12   repealed, amended, or readopted.
174-13         SECTION 6.05. The rules in 31 Texas Administrative Code Part
174-14   20 have no effect.  Notwithstanding any other law, the secretary of
174-15   state shall delete 31 Texas Administrative Code Part 20 from the
174-16   Texas Administrative Code as if the rules included in that part
174-17   were repealed.
174-18     ARTICLE 7.  LIMITED LIABILITY FOR AQUATIC HERBICIDE APPLICATION
174-19         SECTION 7.01. Subchapter B,  Chapter 26, Water Code, is
174-20   amended by adding Section 26.050 to read as follows:
174-21         Sec. 26.050.  LIMITED LIABILITY FOR AQUATIC HERBICIDE
174-22   APPLICATION. (a)  In this section, "commercially licensed aquatic
174-23   herbicide applicator" means a person who holds a commercial
174-24   applicator license issued by the Department of Agriculture under
174-25   Chapter 76, Agriculture Code, to apply aquatic herbicides.
174-26         (b)  Except as provided by Chapter 12, Parks and Wildlife
174-27   Code, a commercially licensed aquatic herbicide applicator working
 175-1   under contract with a river authority organized pursuant to Article
 175-2   XVI, Section 59, Texas Constitution, is not liable for damages in
 175-3   excess of $2 million for all types for personal injury, property
 175-4   damage, or death resulting directly or indirectly from the
 175-5   application of aquatic herbicide in compliance with such contract,
 175-6   applicable law, and the license terms or permit.
 175-7         (c)  The control and elimination of noxious weeds, grasses,
 175-8   and vegetation in the rivers, tributaries, impoundments, and
 175-9   reservoirs of the state through the application by river
175-10   authorities or their agents, employees, or contractors, in
175-11   compliance with applicable law, licenses, and permits, of aquatic
175-12   herbicides are essential governmental functions, and except to the
175-13   extent provided in Chapter 101, Civil Practice and Remedies Code,
175-14   nothing herein shall be deemed or construed to waive, limit, or
175-15   restrict the governmental immunity of river authorities in the
175-16   performance of such governmental functions.
175-17           ARTICLE 8.  CONCENTRATED ANIMAL FEEDING OPERATIONS
175-18         SECTION 8.01. Section 26.0286, Water Code, is amended to read
175-19   as follows:
175-20         Sec. 26.0286.  PROCEDURES APPLICABLE TO PERMITS FOR CERTAIN
175-21   CONCENTRATED ANIMAL FEEDING OPERATIONS. (a)  In this section:
175-22               (1)  "Sole-source[, "sole-source] surface drinking
175-23   water supply" means a body of surface water that[:]
175-24               [(1)]  is designated as a sole-source surface drinking
175-25   [public] water supply in rules adopted by the commission [under
175-26   Section 26.023; and]
175-27               [(2)  is the single source of supply of a public water
 176-1   supply system, exclusive of emergency water interconnections].
 176-2               (2)  "Protection zone" means an area so designated by
 176-3   commission rule under Subsection (c).
 176-4         (b)  The commission shall process an application for
 176-5   authorization to construct or operate a concentrated animal feeding
 176-6   operation as a specific permit under Section 26.028 subject to the
 176-7   procedures provided by Subchapter M, Chapter 5, if, on the date the
 176-8   commission determines that the application is administratively
 176-9   complete, any part of a pen, lot, pond, or other type of control or
176-10   retention facility or structure of the concentrated animal feeding
176-11   operation is located or proposed to be located within the
176-12   protection zone of a sole-source surface drinking water supply.
176-13   For the purposes of this subsection, a land application area is not
176-14   considered a control or retention facility[:]
176-15               [(1)  in the watershed of a sole-source surface
176-16   drinking water supply; and]
176-17               [(2)  sufficiently close, as determined by the
176-18   commission by rule, to an intake of a public water supply system in
176-19   the sole-source surface drinking water supply that contaminants
176-20   discharged from the concentrated animal feeding operation could
176-21   potentially affect the public drinking water supply].
176-22         (c)  For the purposes of this section only, the commission by
176-23   rule shall designate a surface water body as a sole-source surface
176-24   drinking water supply if that surface water body is identified as a
176-25   public water supply in rules adopted by the commission under
176-26   Section 26.023 and is the sole source of supply of a public water
176-27   supply system, exclusive of emergency water connections.  At the
 177-1   same time, the commission shall designate as a protection zone any
 177-2   area within the watershed of a sole-source surface drinking water
 177-3   supply that is:
 177-4               (1)  within two miles of the normal pool elevation of a
 177-5   body of surface water that is a sole-source surface drinking water
 177-6   supply;
 177-7               (2)  within two miles of that part of a perennial
 177-8   stream that is:
 177-9                     (A)  a tributary of a sole-source surface
177-10   drinking water supply; and
177-11                     (B)  within three linear miles upstream of the
177-12   normal pool elevation of a sole-source surface drinking water
177-13   supply; or
177-14               (3)  within two miles of that part of a stream that is
177-15   a sole-source surface drinking water supply, extending three linear
177-16   miles  upstream from the water supply intake.
177-17         SECTION 8.02.  Not later than the 45th day after the
177-18   effective date of this Act, the Texas Natural Resource Conservation
177-19   Commission by order shall identify surface water bodies that are
177-20   considered "sole-source surface drinking water supplies" for
177-21   purposes of Section 26.0286(b), Water Code, as amended by this Act,
177-22   and shall designate the protection zones for those identified water
177-23   bodies.  The order expires on the date on which the commission
177-24   adopts final rules under Section 26.0286(c), Water Code, as added
177-25   by this Act.
177-26         ARTICLE 9.  REPORTS; REPEALER; TRANSITION; VALIDATION;
177-27                             EFFECTIVE DATE
 178-1         SECTION 9.01.  BOARD STUDY AND REPORT ON FINANCING WATER
 178-2   INFRASTRUCTURE PROJECTS. The Texas Water Development Board shall
 178-3   consider the reports submitted by the regional planning groups
 178-4   under Section 16.053(q), Water Code, as added by this Act, relating
 178-5   to financing water infrastructure projects and shall consult with
 178-6   potentially impacted groups and other interested persons regarding
 178-7   the information reported and the recommendations made by the
 178-8   regional planning groups.  Not later than October 1, 2002, the
 178-9   board shall submit to the legislature a report consisting of the
178-10   regional planning groups' reports and the board's analysis of and
178-11   recommendations regarding those reports.
178-12         SECTION 9.02.  REPEALER.  Sections 35.005, 35.006, and
178-13   36.121, Water Code, are repealed.
178-14         SECTION 9.03.  TRANSITIONS. (a)  The changes in law made by
178-15   this Act by amending Section 17.895, Water Code, and adding Section
178-16   17.8955, Water Code, apply only to a conservation loan for which an
178-17   application is filed on or after the effective date of this Act.  A
178-18   conservation loan for which an application was filed before the
178-19   effective date of this Act is governed by the law in effect
178-20   immediately before that date, and that law is continued in effect
178-21   for that purpose.
178-22         (b)  Not later than January 1, 2002, the Texas Water
178-23   Development Board shall adopt rules to administer Subchapter O,
178-24   Chapter 15, Water Code, as added by this Act, including rules
178-25   establishing procedures for applications for and the award of
178-26   financial assistance for water projects, for the investment of
178-27   funds, and for the administration of the water infrastructure fund
 179-1   created by this Act.
 179-2         (c)  Not later than January 1, 2002, the Texas Water
 179-3   Development Board shall adopt rules to administer Subchapter P,
 179-4   Chapter 15, Water Code, as added by this Act, including
 179-5   establishing procedures for the application for and award of loans,
 179-6   the distribution of loans, the investment of funds, and the
 179-7   administration of loans and the rural water assistance fund.
 179-8         (d)  Not later than January 1, 2002, the Texas Water
 179-9   Development Board shall adopt rules requiring a holder of a surface
179-10   water permit, certified filing, or certificate of adjudication for
179-11   surface water, a holder of a permit for the export of groundwater
179-12   from a groundwater conservation district, a retail public water
179-13   supplier, a wholesale water provider, and an irrigation district to
179-14   report to the board information on certain water pipelines and
179-15   other facilities that can be used for water conveyance.
179-16         (e)  The changes in law made by this Act by amending Sections
179-17   11.023 and 11.122, Water Code, shall not change the existing
179-18   priority of any industrial water right holder on the mainstem of
179-19   the Rio Grande below Amistad Reservoir who uses or supplies water
179-20   to a nursery grower.
179-21         SECTION 9.04.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
179-22   (a)  The proper and legal notice of the intention to introduce this
179-23   Act, setting forth the general substance of this Act, has been
179-24   published as provided by law, and the notice and a copy of this Act
179-25   have been furnished to all persons, agencies, officials, or
179-26   entities to which they are required to be furnished by the
179-27   constitution and other laws of this state, including the governor,
 180-1   who has submitted the notice and Act to the Texas Natural Resource
 180-2   Conservation Commission.
 180-3         (b)  The Texas Natural Resource Conservation Commission has
 180-4   filed its recommendations relating to this Act with the governor,
 180-5   lieutenant governor, and speaker of the house of representatives
 180-6   within the required time.
 180-7         (c)  All requirements of the constitution and laws of the
 180-8   state and the rules and procedures of the legislature with respect
 180-9   to the notice, introduction, and passage of this Act are fulfilled
180-10   and accomplished.
180-11         SECTION 9.05.  EFFECTIVE DATE.  This Act takes effect
180-12   September 1, 2001.