1-1     By:  Brown                                               S.B. No. 2
 1-2           (In the Senate - Filed March 8, 2001; March 12, 2001, read
 1-3     first time and referred to Committee on Natural Resources;
 1-4     April 11, 2001, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 5, Nays 0; April 11, 2001,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 2                      By:  Brown
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to the development and management of the water resources
1-11     of the state, including the ratification of the creation of certain
1-12     groundwater conservation districts; providing penalties.
1-13           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14                  ARTICLE 1.  TEXAS WATER ADVISORY COUNCIL
1-15           SECTION 1.01.  Subtitle A, Title 2, Water Code, is amended by
1-16     adding Chapter 9 to read as follows:
1-17                  CHAPTER 9.  TEXAS WATER ADVISORY COUNCIL
1-18           Sec. 9.001.  DEFINITION.  In this chapter:
1-19                 (1)  "Authority" means an entity listed in Section
1-20     9.010(b).
1-21                 (2)  "Board" means the governing body of an authority.
1-22                 (3)  "Commission" means the Texas Natural Resource
1-23     Conservation Commission.
1-24                 (4)  "Conjunctive use" means the combined use of
1-25     groundwater and surface water sources that optimizes the beneficial
1-26     characteristics of each source.
1-27                 (5)  "Council" means the Texas Water Advisory Council.
1-28           Sec. 9.002.  CREATION AND MEMBERSHIP.  (a)  The council is
1-29     composed of 11 members as follows:
1-30                 (1)  the chairman, or a board member designated by the
1-31     chairman, of the Texas Water Development Board;
1-32                 (2)  the chairman, or a commissioner designated by the
1-33     chairman, of the commission;
1-34                 (3)  the chairman, or a commissioner designated by the
1-35     chairman, of the Parks and Wildlife Commission;
1-36                 (4)  the commissioner of agriculture;
1-37                 (5)  the Commissioner of the General Land Office;
1-38                 (6)  two members of the house of representatives
1-39     appointed by the speaker of the house of representatives;
1-40                 (7)  one member of the senate appointed by the
1-41     lieutenant governor; and
1-42                 (8)  three members of the general public appointed by
1-43     the governor.
1-44           (b)  Council members may not delegate participation or
1-45     council duties to staff.
1-46           Sec. 9.003.  TERMS.  (a)  Except for the commissioner of
1-47     agriculture, council members who are officials of state agencies
1-48     serve terms as determined by the chairman of each agency.
1-49           (b)  Council members who are members of the general public
1-50     serve staggered six-year terms with the term of one member expiring
1-51     August 31 of each odd-numbered year.
1-52           (c)  Council members may be reappointed to serve additional
1-53     terms.
1-54           (d)  A vacancy on the council shall be filled by appointment
1-55     by the original appointing authority for the unexpired term.
1-56           Sec. 9.004.  OFFICERS OF THE COUNCIL.  (a)  The governor
1-57     shall appoint a council member as the chair of the council for a
1-58     two-year term expiring May 31 of each even-numbered year.
1-59           (b)  The council shall have a secretary of the council who
1-60     shall serve at the pleasure of the council and be accountable only
1-61     to the council.
1-62           Sec. 9.005.  COUNCIL STAFF.  On request by the council, the
1-63     commission, the Parks and Wildlife Department, the Department of
1-64     Agriculture, and the Texas Water Development Board shall provide
 2-1     any staff other than the secretary of the council necessary to
 2-2     assist the council in the performance of its duties.
 2-3           Sec. 9.006.  MEETINGS.  (a)  The council shall meet at least
 2-4     once in each calendar quarter.  Six members shall constitute a
 2-5     quorum sufficient to conduct meetings and the business of the
 2-6     council.
 2-7           (b)  The council is subject to Chapters 551 and 2001,
 2-8     Government Code.
 2-9           Sec. 9.007.  COMPENSATION OF MEMBERS.  (a)  Members of the
2-10     council shall serve without compensation but may be reimbursed by
2-11     legislative appropriation for actual and necessary expenses related
2-12     to the performance of council duties.
2-13           (b)  Reimbursements under Subsection (a) shall be subject to
2-14     the approval of the chair.
2-15           Sec. 9.008.  POWERS AND DUTIES OF COUNCIL.  (a)  The council
2-16     shall:
2-17                 (1)  heighten the level of dialogue on significant
2-18     water policy issues and, in an advisory role only, strive to
2-19     provide focus and guidance on state water policy initiatives,
2-20     including:
2-21                       (A)  promoting flexibility and incentives for
2-22     water desalination, brush control, regionalization, weather
2-23     modification projects, and public-private partnerships relating to
2-24     water projects;
2-25                       (B)  promoting adequate financing for surface
2-26     water and groundwater projects;
2-27                       (C)  development of water conservation and
2-28     drought management projects;
2-29                       (D)  implementation of approved regional and
2-30     state water plans;
2-31                       (E)  encouraging commonality of technical data
2-32     and information such as joint agency studies, freshwater inflow
2-33     recommendations, surface water and groundwater availability models,
2-34     and instream flow recommendations developed by the Parks and
2-35     Wildlife Department, the commission, and the Texas Water
2-36     Development Board; and
2-37                       (F)  encouraging the use of supplemental
2-38     environmental projects for water infrastructure needs and enhancing
2-39     the aquatic environment and habitat in enforcement proceedings at a
2-40     state agency or political subdivision;
2-41                 (2)  encourage the enhancement and coordination of
2-42     state, interstate, and international efforts to improve
2-43     environmental quality and living conditions along the Texas-Mexico
2-44     border;
2-45                 (3)  coordinate a unified state position on federal and
2-46     international water issues; and
2-47                 (4)  advise the Texas Water Development Board on
2-48     developing criteria for prioritizing the funding of projects in the
2-49     state water plan.
2-50           (b)  The council may not:
2-51                 (1)  promulgate rules;
2-52                 (2)  regulate water use, water quality, or any other
2-53     aspect of water resource management;
2-54                 (3)  plan or construct water resource projects, or have
2-55     such projects planned or constructed;
2-56                 (4)  grant or loan any funds for the construction of
2-57     water resource projects;
2-58                 (5)  establish water resource management standards or
2-59     otherwise usurp the authority of or infringe upon the duties,
2-60     responsibilities, or powers of local, regional, or state water
2-61     management entities, including groundwater districts, river
2-62     authorities and compacts, regional water planning groups, or member
2-63     agencies of the council; or
2-64                 (6)  consider or discuss any specific permit or project
2-65     or recommendation for a project.
2-66           Sec. 9.009.  REPORT.  Not later than December 1 of each
2-67     even-numbered year, the council shall submit a report to the
2-68     governor, lieutenant governor, and speaker of the house of
2-69     representatives and to the senate and house standing committees
 3-1     with primary responsibility over water resource management and
 3-2     financing.  The report shall include findings of the council made
 3-3     in the periodic reviews of authorities during the preceding
 3-4     two-year period and any other findings and recommendations the
 3-5     council considers necessary.
 3-6           Sec. 9.010.  REVIEW OF AUTHORITIES.  (a)  On a five-year
 3-7     cycle, the council shall review authorities based on the
 3-8     administrative policies provided by Section 9.012 and performance
 3-9     standards described in Section 9.011.  The reviews shall be
3-10     conducted of groups described in Subsection (b), with group 1 being
3-11     reviewed at the council's first quarterly meeting of the five-year
3-12     period and group 2 being reviewed at the council's third quarterly
3-13     meeting of the period.  The council shall continue in numerical
3-14     order to review one group at every other quarterly meeting until
3-15     all ten groups have been reviewed and then shall recommence the
3-16     cycle.
3-17           (b)  Authorities shall be reviewed under Subsection (a) in
3-18     the following groups:
3-19                 (1)  in group 1, Northeast Texas Municipal Water
3-20     District, Titus County Fresh Water Supply District No. 1, and
3-21     Franklin County Water District;
3-22                 (2)  in group 2, Angelina and Neches River Authority,
3-23     Lower Neches Valley Authority, Sabine River Authority, and Upper
3-24     Neches River Municipal Water Authority;
3-25                 (3)  in group 3, Red River Authority of Texas, Sulphur
3-26     River Municipal Water District, and Sulphur River Basin Authority;
3-27                 (4)  in group 4, San Jacinto River Authority, Gulf
3-28     Coast Water Authority, and North Harris County Regional Water
3-29     Authority;
3-30                 (5)  in group 5, North Texas Municipal Water District,
3-31     Tarrant Regional Water District, Trinity River Authority of Texas,
3-32     and Dallas County Utility and Reclamation District;
3-33                 (6)  in group 6, Brazos River Authority, West Central
3-34     Texas Municipal Water District, and North Central Texas Municipal
3-35     Water Authority;
3-36                 (7)  in group 7, Guadalupe-Blanco River Authority,
3-37     Lavaca-Navidad River Authority, Lower Colorado River Authority, and
3-38     Upper Guadalupe River Authority;
3-39                 (8)  in group 8, Nueces River Authority, San Antonio
3-40     River Authority, and Bexar-Medina-Atascosa Counties Water Control
3-41     and Improvement District No. 1;
3-42                 (9)  in group 9, Colorado River Municipal Water
3-43     District, Central Colorado River Authority, and Upper Colorado
3-44     River Authority; and
3-45                 (10)  in group 10, Canadian River Municipal Water
3-46     Authority, Mackenzie Municipal Water Authority, and White River
3-47     Municipal Water District.
3-48           (c)  The council may not review an authority under this
3-49     section more than once every five years.  The council may, however,
3-50     request an authority that has been reviewed to provide follow-up
3-51     information on any specific item or issue raised during the initial
3-52     review.
3-53           (d)  The council, on a request by an authority, may modify
3-54     the schedule in order to have the flexibility in scheduling the
3-55     review, if needed, to be more responsive to particular
3-56     circumstances, changing conditions, or time-sensitive conflicts.
3-57           Sec. 9.011.  PERFORMANCE STANDARDS.  (a)    Before its
3-58     five-year review under Section 9.010, an authority shall report to
3-59     the council a self-assessment of:
3-60                 (1)  how the authority is achieving its stated mission
3-61     and goals, including an identification of any barriers that exist
3-62     in achieving the mission and goals;
3-63                 (2)  how the authority is providing service to its
3-64     customers, including mechanisms the authority provides to encourage
3-65     input from the public and its customers;
3-66                 (3)  how the authority is addressing issues raised by
3-67     its most recent management audit, including its administrative
3-68     policies; and
3-69                 (4)  the authority's role in the regional water
 4-1     planning process.
 4-2           (b)  The authority's report to the council under this section
 4-3     shall include recommendations related to:
 4-4                 (1)  any interregional issues the authority has
 4-5     identified as problematic and any potential solutions to those
 4-6     issues; and
 4-7                 (2)  solutions to any barriers the authority determines
 4-8     are interfering with the successful implementation of the approved
 4-9     regional water plan or state water plan.
4-10           Sec. 9.012.  ADMINISTRATIVE POLICIES FOR AUTHORITIES.  The
4-11     commission shall expand the applicability of its rules under 30
4-12     T.A.C. Chapter 292 to include all the authorities subject to this
4-13     title.  The commission shall provide the council with copies of the
4-14     most recent information provided by each authority in accordance
4-15     with its administrative rules.
4-16           Sec. 9.013.  GIFTS AND GRANTS.  The council may accept gifts
4-17     and grants from any source to carry out the purposes of this
4-18     chapter.  The use of gifts and grants other than legislative
4-19     appropriations is subject only to limitations contained in the gift
4-20     or grant.
4-21           Sec. 9.014.  FUNDING.  (a)  The interagency water policy
4-22     account is a special account in the general revenue fund.
4-23           (b)  The interagency water policy account consists of
4-24     legislative appropriations, gifts and grants received under Section
4-25     9.013, and other money required by law to be deposited in the
4-26     account.
4-27           (c)  Funds in the interagency water policy account may be
4-28     used only as provided by this chapter.
4-29           Sec. 9.015.  CONTINUING RIGHT OF SUPERVISION.  Nothing in
4-30     this chapter shall affect the continuing right of supervision over
4-31     authorities by the commission as provided by Section 12.081.
4-32           Sec. 9.016.  PUBLIC PARTICIPATION.  The council shall
4-33     encourage public input regarding the exercise of its powers and
4-34     duties under Section 9.008, its preparation of the report described
4-35     in Section 9.009, and its review of authorities under Sections
4-36     9.010 and 9.011.
4-37                  ARTICLE 2.  SURFACE WATER AND GROUNDWATER
4-38                CONJUNCTIVE MANAGEMENT; REGULATORY INCENTIVES
4-39           SECTION 2.01.  Section 11.002, Water Code, is amended by
4-40     adding Subdivisions (7), (11), (12), (13), and (14) to read as
4-41     follows:
4-42                 (7)  "Instream use" means the use of state water for
4-43     fisheries, water quality protection, aquatic and riparian wildlife
4-44     habitat, freshwater inflows for bays and estuaries, and any other
4-45     similar use recognized by law.  An instream use is a beneficial use
4-46     of water.
4-47                 (11)  "River basin" means a river or coastal basin
4-48     designated by the board as a river basin under Section 16.051.  The
4-49     term does not include waters of the bays or arms of the Gulf of
4-50     Mexico.
4-51                 (12)  "Agriculture" means any of the following
4-52     activities:
4-53                       (A)  cultivating the soil to produce crops for
4-54     human food, animal feed, or planting seed or for the production of
4-55     fibers;
4-56                       (B)  the practice of floriculture, viticulture,
4-57     silviculture, and horticulture, including the cultivation of plants
4-58     in containers or nonsoil media, by a nursery grower;
4-59                       (C)  raising, feeding, or keeping animals for the
4-60     production of food or fiber, leather, pelts, or other tangible
4-61     products having a commercial value;
4-62                       (D)  wildlife management; and
4-63                       (E)  planting cover crops, including cover crops
4-64     cultivated for transplantation, or leaving land idle for the
4-65     purpose of participating in any governmental program or normal crop
4-66     or livestock rotation procedure.
4-67                 (13)  "Agricultural use" means any use or activity
4-68     involving agriculture, including irrigation.
4-69                 (14)  "Nursery grower" means a person who grows more
 5-1     than 50 percent of the products that the person either sells or
 5-2     leases, regardless of the variety sold, leased, or grown.  For the
 5-3     purpose of this definition, "grow" means the actual cultivation or
 5-4     propagation of the product beyond the mere holding or maintaining
 5-5     of the item prior to sale or lease and typically includes
 5-6     activities associated with the production or multiplying of stock
 5-7     such as the development of new plants from cuttings, grafts, plugs,
 5-8     or seedlings.
 5-9           SECTION 2.02.  Subsection (a), Section 11.023, Water Code, is
5-10     amended to read as follows:
5-11           (a)  State water may be appropriated, stored, or diverted
5-12     for:
5-13                 (1)  domestic and municipal uses, including water for
5-14     sustaining human life and the life of domestic animals;
5-15                 (2)  industrial uses, meaning processes designed to
5-16     convert materials of a lower order of value into forms having
5-17     greater usability and commercial value, including the development
5-18     of power by means other than hydroelectric;
5-19                 (3)  agricultural uses [irrigation];
5-20                 (4)  mining and recovery of minerals;
5-21                 (5)  hydroelectric power;
5-22                 (6)  navigation;
5-23                 (7)  recreation and pleasure;
5-24                 (8)  [stock raising;]
5-25                 [(9)]  public parks; and
5-26                 (9) [(10)]  game preserves.
5-27           SECTION 2.03.  Section 11.024, Water Code, is amended to read
5-28     as follows:
5-29           Sec. 11.024.  APPROPRIATION:  PREFERENCES.  In order to
5-30     conserve and properly utilize state water, the public welfare
5-31     requires not only recognition of beneficial uses but also a
5-32     constructive public policy regarding the preferences between these
5-33     uses, and it is therefore declared to be the public policy of this
5-34     state that in appropriating state water preference shall be given
5-35     to the following uses in the order named:
5-36                 (1)  domestic and municipal uses, including water for
5-37     sustaining human life and the life of domestic animals, it being
5-38     the public policy of the state and for the benefit of the greatest
5-39     number of people that in the appropriation of water as herein
5-40     defined, the appropriation of water for domestic and municipal uses
5-41     shall be and remain superior to the rights of the state to
5-42     appropriate the same for all other purposes;
5-43                 (2)  industrial uses, meaning processes designed to
5-44     convert materials of a lower order of value into forms having
5-45     greater usability and commercial value, including the development
5-46     of power by means other than hydroelectric;
5-47                 (3)  agricultural uses [irrigation];
5-48                 (4)  mining and recovery of minerals;
5-49                 (5)  hydroelectric power;
5-50                 (6)  navigation;
5-51                 (7)  recreation and pleasure; and
5-52                 (8)  other beneficial uses.
5-53           SECTION 2.04.  Section 11.038, Water Code, is amended to read
5-54     as follows:
5-55           Sec. 11.038.  RIGHTS OF OWNERS OF LAND ADJOINING CANAL, ETC.
5-56     (a)  A person who owns or holds a possessory interest in land
5-57     adjoining or contiguous to a canal, ditch, flume, lateral, dam,
5-58     reservoir, or lake constructed and maintained under the provisions
5-59     of this chapter and who has secured a right to the use of water in
5-60     the canal, ditch, flume, lateral, dam, reservoir, or lake is
5-61     entitled to be supplied from the canal, ditch, flume, lateral, dam,
5-62     reservoir, or lake with water [for irrigation of the land and] for
5-63     agricultural uses, mining, milling, manufacturing, development of
5-64     power, and stock raising, in accordance with the terms of his
5-65     contract.
5-66           (b)  If the person, association of persons, or corporation
5-67     owning or controlling the water and the person who owns or holds a
5-68     possessory interest in the adjoining land cannot agree on a price
5-69     for a permanent water right or for the use of enough water for
 6-1     irrigation of the person's land or for agricultural uses, mining,
 6-2     milling, manufacturing, development of power, or stock raising,
 6-3     then the party owning or controlling the water, if he has any water
 6-4     not contracted to others, shall furnish the water necessary for
 6-5     these purposes at reasonable and nondiscriminatory prices.
 6-6           SECTION 2.05.  Subsection (p), Section 11.085, Water Code, is
 6-7     amended to read as follows:
 6-8           (p)  [For the purposes of this section, a basin is designated
 6-9     as provided in accordance with Section 16.051 of this code.]  A
6-10     river basin may not be redesignated in order to allow a transfer or
6-11     diversion of water otherwise in violation of this section.
6-12           SECTION 2.06.  Section 11.088, Water Code, is amended to read
6-13     as follows:
6-14           Sec. 11.088.  DESTRUCTION OF WATERWORKS.  No person may
6-15     wilfully cut, dig, break down, destroy, or injure or open a gate,
6-16     bank, embankment, or side of any ditch, canal, reservoir, flume,
6-17     tunnel or feeder, pump or machinery, building, structure, or other
6-18     work which is the property of another, or in which another owns an
6-19     interest, or which is lawfully possessed or being used by another,
6-20     and which is used for irrigation, milling, mining, manufacturing,
6-21     the development of power, domestic purposes, agricultural uses, or
6-22     stock raising, with intent to:
6-23                 (1)  maliciously injure a person, association,
6-24     corporation, water improvement or irrigation district;
6-25                 (2)  gain advantage for himself; or
6-26                 (3)  take or steal water or cause water to run out or
6-27     waste out of the ditch, canal, or reservoir, feeder, or flume for
6-28     his own advantage or to the injury of a person lawfully entitled to
6-29     the use of the water or the use or management of the ditch, canal,
6-30     tunnel, reservoir, feeder, flume, machine, structure, or other
6-31     irrigation work.
6-32           SECTION 2.07.  Subsection (a), Section 11.122, Water Code, is
6-33     amended to read as follows:
6-34           (a)  All holders of permits, certified filings, and
6-35     certificates of adjudication issued under Section 11.323 of this
6-36     code shall obtain from the commission authority to change the place
6-37     of use, purpose of use, point of diversion, rate of diversion,
6-38     acreage to be irrigated, or otherwise alter a water right.  Without
6-39     obtaining an amendment, the holder of a permit, certified filing,
6-40     or certificate of adjudication that includes industrial use may use
6-41     or supply water for an agricultural use that was classified as
6-42     industrial before September 1, 2001.  An amendment changing the
6-43     purpose of use from irrigation to agricultural uses shall be
6-44     authorized without notice or hearing under Section 11.132 if the
6-45     application requests no other change.
6-46           SECTION 2.08.  Subsection (b), Section 11.1271, Water Code,
6-47     is amended to read as follows:
6-48           (b)  The commission shall require the holder of an existing
6-49     permit, certified filing, or certificate of adjudication for the
6-50     appropriation of surface water in the amount of 1,000 acre-feet a
6-51     year or more for municipal, industrial, and other uses, and 10,000
6-52     acre-feet a year or more for irrigation uses, to develop, submit,
6-53     and implement a water conservation plan, consistent with the state
6-54     [appropriate approved regional] water plan, that adopts reasonable
6-55     water conservation measures as defined by Subdivision (8)(B),
6-56     Section 11.002[, of this code].  The requirement for a water
6-57     conservation plan under this section shall not result in the need
6-58     for an amendment to an existing permit, certified filing, or
6-59     certificate of adjudication.
6-60           SECTION 2.09.  Subsection (a), Section 11.1272, Water Code,
6-61     is amended to read as follows:
6-62           (a)  The commission shall by rule require wholesale and
6-63     retail public water suppliers and irrigation districts to develop
6-64     drought contingency plans consistent with the state [appropriate
6-65     approved regional] water plan to be implemented during periods of
6-66     water shortages and drought.
6-67           SECTION 2.10.  Subsection (b), Section 11.134, Water Code, is
6-68     amended to read as follows:
6-69           (b)  The commission shall grant the application only if:
 7-1                 (1)  the application conforms to the requirements
 7-2     prescribed by this chapter and is accompanied by the prescribed
 7-3     fee;
 7-4                 (2)  unappropriated water is available in the source of
 7-5     supply;
 7-6                 (3)  the proposed appropriation:
 7-7                       (A)  is intended for a beneficial use;
 7-8                       (B)  does not impair existing water rights or
 7-9     vested riparian rights;
7-10                       (C)  is not detrimental to the public welfare;
7-11                       (D)  considers the assessments performed under
7-12     Sections 11.147(d) and (e) and Sections 11.150, 11.151, and 11.152
7-13     [effects of any hydrological connection between surface water and
7-14     groundwater]; and
7-15                       (E)  addresses a water supply need in a manner
7-16     that is consistent with the state water plan and an approved
7-17     regional water plan [for any area in which the proposed
7-18     appropriation is located], unless the commission determines that
7-19     conditions warrant waiver of this requirement; and
7-20                 (4)  the applicant has provided evidence that
7-21     reasonable diligence will be used to avoid waste and achieve water
7-22     conservation as defined by Subdivision (8)(B), Section 11.002[, of
7-23     this code].
7-24           SECTION 2.11.  Subsection (a), Section 11.138, Water Code, is
7-25     amended to read as follows:
7-26           (a)  The commission may issue temporary permits for
7-27     beneficial purposes to the extent that they do not interfere with
7-28     or adversely affect prior appropriations or vested rights on the
7-29     stream from which water is to be diverted under such temporary
7-30     permit.  The commission may, by appropriate order, authorize any
7-31     member of the commission to approve and issue temporary permits
7-32     without notice and hearing if it appears to such issuing party that
7-33     sufficient water is available at the proposed point of diversion to
7-34     satisfy the requirements of the temporary permit as well as all
7-35     existing rights.  No temporary permit issued without notice and
7-36     hearing shall authorize more than 10 acre-feet of water, nor may it
7-37     be for a term in excess of one year.  The commission by rule may
7-38     authorize the beneficial use, without a permit, of not more than 25
7-39     acre-feet of water, for a term not to exceed one year, if the
7-40     diversion of water will not affect existing water right holders and
7-41     the user of the water registers the use with the commission in the
7-42     manner required by the commission.
7-43           SECTION 2.12.  Section 11.142, Water Code, is amended to read
7-44     as follows:
7-45           Sec. 11.142.  PERMIT EXEMPTIONS.  (a)  Without obtaining a
7-46     permit, a person may construct on the person's [his] own property a
7-47     dam or reservoir with normal storage of not more than 200 acre-feet
7-48     of water for domestic and livestock purposes.  A person who
7-49     temporarily stores more than 200 acre-feet of water in a dam or
7-50     reservoir described by this subsection is not required to obtain a
7-51     permit for the dam or reservoir if the person can demonstrate that
7-52     the person has not stored in the dam or reservoir more than 200
7-53     acre-feet of water on average in any 12-month period.
7-54           (b)  Without obtaining a permit, a person may construct on
7-55     the person's property a dam or reservoir with normal storage of not
7-56     more than 200 acre-feet of water for fish and wildlife purposes if
7-57     the property on which the dam or reservoir will be constructed is
7-58     qualified open-space land, as defined by Section 23.51, Tax Code.
7-59           (c)  Without obtaining a permit, a person who is drilling and
7-60     producing petroleum and conducting operations associated with
7-61     drilling and producing petroleum may take for those purposes state
7-62     water from the Gulf of Mexico and adjacent bays and arms of the
7-63     Gulf of Mexico in an amount not to exceed one acre-foot during each
7-64     24-hour period.
7-65           (d) [(c)]  Without obtaining a permit, a person may construct
7-66     or maintain a reservoir for the sole purpose of sediment control as
7-67     part of a surface coal mining operation under the Texas Surface
7-68     Coal Mining and Reclamation Act (Article 5920-11, Vernon's Texas
7-69     Civil Statutes).
 8-1           SECTION 2.13.  Section 11.146, Water Code, is amended by
 8-2     adding Subsection (g) to read as follows:
 8-3           (g)  This section does not apply to a permit for construction
 8-4     of a reservoir designed for the storage of more than 75,000
 8-5     acre-feet of water.
 8-6           SECTION 2.14.  Subsections (b), (d), and (e), Section 11.147,
 8-7     Water Code, are amended to read as follows:
 8-8           (b)  In its consideration of an application for a permit to
 8-9     store, take, or divert water, the commission shall assess the
8-10     effects, if any, of the issuance of the permit on the bays and
8-11     estuaries of Texas.  For permits issued within an area that is 200
8-12     river miles of the coast, to commence from the mouth of the river
8-13     thence inland, the commission shall include in the permit, to the
8-14     extent practicable when considering all public interests and the
8-15     studies mandated by Section 16.058 as evaluated under Section
8-16     11.1491, those conditions considered necessary to maintain
8-17     beneficial inflows to any affected bay and estuary system.
8-18           (d)  In its consideration of an application to store, take or
8-19     divert water, the commission shall include in the permit, to the
8-20     extent practicable when considering all public interests, those
8-21     conditions considered necessary to maintain [consider the effect,
8-22     if any, of the issuance of the permit on] existing instream uses
8-23     and water quality of the stream or river to which the application
8-24     applies.
8-25           (e)  The commission shall include in the permit, to the
8-26     extent practicable when considering all public interests, those
8-27     conditions considered necessary to maintain [also consider the
8-28     effect, if any, of the issuance of the permit on] fish and wildlife
8-29     habitats.
8-30           SECTION 2.15.  Subsection (b), Section 11.173, Water Code, is
8-31     amended to read as follows:
8-32           (b)  A permit, certified filing, or certificate of
8-33     adjudication or a portion of a permit, certified filing, or
8-34     certificate of adjudication is exempt from cancellation under
8-35     Subsection (a) of this section:
8-36                 (1)  to the extent of the owner's participation in the
8-37     Conservation Reserve Program authorized by the Food Security Act,
8-38     Pub.L. No. 99-198, Secs. 1231-1236, 99 Stat. 1354, 1509-1514 (1985)
8-39     or a similar governmental program; [or]
8-40                 (2)  if a significant [any] portion of the water
8-41     authorized to be used pursuant to a permit, certified filing, or
8-42     certificate of adjudication has been used in accordance with a
8-43     specific recommendation for meeting a water need included in the
8-44     state [regional] water plan approved pursuant to Section 16.053;
8-45                 (3)  if the permit, certified filing, or certificate of
8-46     adjudication was obtained to meet demonstrated long-term public
8-47     water supply or electric generation needs as evidenced by a water
8-48     management plan developed by the holder and is consistent with
8-49     projections of future water needs contained in the state water
8-50     plan; or
8-51                 (4)  if the permit, certified filing, or certificate of
8-52     adjudication was obtained as the result of the construction of a
8-53     reservoir funded, in whole or in part, by the holder of the permit,
8-54     certified filing, or certificate of adjudication as part of the
8-55     holder's long-term water planning [of this code].
8-56           SECTION 2.16.  Subsection (b), Section 11.177, Water Code, is
8-57     amended to read as follows:
8-58           (b)  In determining what constitutes reasonable diligence or
8-59     a justified nonuse as used in Subsection (a)(2) [of this section],
8-60     the commission shall give consideration to:
8-61                 (1)  whether sufficient water is available in the
8-62     source of supply to meet all or part of the appropriation during
8-63     the 10-year period of nonuse;
8-64                 (2)  whether the nonuse is justified by the holder's
8-65     participation in the federal Conservation Reserve Program or a
8-66     similar governmental program as provided by Section 11.173(b)(1)
8-67     [of this code];
8-68                 (3)  [whether the permit, certified filing, or
8-69     certificate of adjudication was obtained to meet demonstrated
 9-1     long-term public water supply or electric generation needs as
 9-2     evidenced by a water management plan developed by the holder and
 9-3     consistent with projections of future water needs contained in the
 9-4     state water plan;]
 9-5                 [(4)  whether the permit, certified filing, or
 9-6     certificate of adjudication was obtained as the result of the
 9-7     construction of a reservoir funded, in whole or in part, by the
 9-8     holder of the permit, certified filing, or certificate of
 9-9     adjudication as part of the holder's long-term water planning;]
9-10                 [(5)]  whether the existing or proposed authorized
9-11     purpose and place of use are consistent with an approved regional
9-12     water plan as provided by Section 16.053 [of this code];
9-13                 (4) [(6)]  whether the permit, certified filing, or
9-14     certificate of adjudication has been deposited into the Texas Water
9-15     Bank as provided by Sections 15.7031 and 15.704 of this code or
9-16     whether it can be shown that the water right or water available
9-17     under the right is currently being made available for purchase
9-18     through private marketing efforts; or
9-19                 (5) [(7)]  whether the permit, certified filing, or
9-20     certificate of adjudication has been reserved to provide for
9-21     instream flows or bay and estuary inflows.
9-22           SECTION 2.17.  Subdivisions (1) and (2), Section 15.701,
9-23     Water Code, are amended to read as follows:
9-24                 (1)  "Deposit" means the placement of a water right or
9-25     the right to use water in the water bank for transfer or the
9-26     placement of a water right in the trust for instream uses.
9-27                 (2)  "Depositor" means a person who deposits or has on
9-28     deposit a water right in the water bank or trust.
9-29           SECTION 2.18.  Subsection (a), Section 15.703, Water Code, is
9-30     amended to read as follows:
9-31           (a)  The board may take all actions necessary to operate the
9-32     water bank and to facilitate the transfer of water rights from the
9-33     water bank for future beneficial use including but not limited to:
9-34                 (1)  negotiating a sale price and terms acceptable to
9-35     the depositor and purchaser;
9-36                 (2)  maintaining a registry of water bank deposits and
9-37     those water users in need of additional supplies;
9-38                 (3)  informing water users in need of additional supply
9-39     of water rights available in the bank;
9-40                 (4)  encouraging water right holders to implement water
9-41     conservation practices and deposit the right to use the conserved
9-42     water into the bank;
9-43                 (5)  establishing requirements for deposit of a water
9-44     right into the water bank including minimum terms for deposit;
9-45                 (6)  purchasing, holding, and transferring water or
9-46     water rights in its own name;
9-47                 (7)  establishing regional water banks;
9-48                 (8)  acting as a clearinghouse for water marketing
9-49     information including water availability, pricing of water
9-50     transactions, environmental considerations, and potential buyers
9-51     and sellers of water rights;
9-52                 (9)  preparing and publishing a manual on structuring
9-53     water transactions;
9-54                 (10)  [accepting and holding donations of water rights
9-55     to meet instream, water quality, fish and wildlife habitat, or bay
9-56     and estuary inflow needs;]
9-57                 [(11)]  entering into contracts with persons to pay for
9-58     feasibility studies or the preparation of plans and specifications
9-59     relating to water conservation efforts or to estimate the amount of
9-60     water that would be saved through conservation efforts; and
9-61                 (11) [(12)]  other actions to facilitate water
9-62     transactions.
9-63           SECTION 2.19.  Section 15.7031, Water Code, is amended to
9-64     read as follows:[]
9-65           Sec. 15.7031.  CREATION OF THE TEXAS WATER TRUST.  (a)  The
9-66     Parks and Wildlife Department shall establish the Texas Water
9-67     Trust.  The Parks and Wildlife Department shall administer the
9-68     trust to facilitate deposits in the trust of [Texas Water Trust is
9-69     established within the water bank to hold] water rights dedicated
 10-1    to instream uses [environmental needs], including instream flows,
 10-2    water quality, fish and wildlife habitat, or bay and estuary
 10-3    inflows.
 10-4          (b)  A water right which has been used in accordance with a
 10-5    certificate of adjudication or permit or any portion of a water
 10-6    right which has been used in accordance with a certificate of
 10-7    adjudication or permit may be deposited into the trust.  A water
 10-8    right which has not been used in accordance with a certificate of
 10-9    adjudication or permit or any portion of a right which has not been
10-10    used in accordance with a certificate of adjudication or permit
10-11    shall not be deposited into the trust.
10-12          (c)  The Parks and Wildlife Department [board], in
10-13    consultation with the board [Parks and Wildlife Department] and the
10-14    commission, shall adopt rules governing the process for holding and
10-15    transferring water rights.
10-16          (d) [(c)]  The deposit [dedication] of any water rights
10-17    [placed] in the trust must be reviewed and approved by the
10-18    commission, in consultation with the board and the Parks and
10-19    Wildlife Department.  In addition, the Department of Agriculture
10-20    may provide input to the commission, as appropriate, during the
10-21    review and approval process for depositing [dedication of] water
10-22    rights.
10-23          (e) [(d)]  Water rights may be held in the trust for a term
10-24    specified by contractual agreement or in perpetuity.  A water right
10-25    may be deposited in the trust for an initial term of up to 10 years
10-26    or may be deposited in perpetuity.  During its deposit in the
10-27    trust, the water right is exempt from cancellation by the
10-28    commission under the terms of Subchapter E, Chapter 11.
10-29          SECTION 2.20.  Subchapter K, Chapter 15, Water Code, is
10-30    amended by adding Section 15.7032 to read as follows:
10-31          Sec. 15.7032.  OPERATION OF THE TEXAS WATER TRUST.  (a)  The
10-32    Parks and Wildlife Department may take all actions necessary to
10-33    operate the trust and to facilitate the donation of water rights to
10-34    the trust including:
10-35                (1)  encouraging water right holders to deposit water
10-36    rights in the trust, especially in high-priority water bodies;
10-37                (2)  negotiating trust acquisitions acceptable to
10-38    depositors;
10-39                (3)  maintaining a registry of trust deposits;
10-40                (4)  informing water rights holders and the public of
10-41    the need for instream flows and freshwater inflows;
10-42                (5)  purchasing, holding, and transferring water or
10-43    water rights in its own name;
10-44                (6)  acting as a clearinghouse for information on
10-45    instream use water needs including water availability, water
10-46    quality, instream flows, freshwater inflows, fish and wildlife
10-47    habitat, and recreation;
10-48                (7)  preparing and publishing a guidance document on
10-49    the trust; and
10-50                (8)  other action to facilitate trust transactions.
10-51          (b)  The Parks and Wildlife Department may adopt rules
10-52    necessary for implementation of the trust.
10-53          (c)  The Parks and Wildlife Department may contract with any
10-54    person to achieve the purposes of this subchapter.
10-55          SECTION 2.21.  Subsection (a), Section 15.704, Water Code, is
10-56    amended to read as follows:
10-57          (a)  A water right may be deposited in the water bank for an
10-58    initial term of up to 10 years, [unless otherwise held in the Texas
10-59    Water Trust as established under Section 15.7031 of this code,]
10-60    during which time the water right is exempt from cancellation by
10-61    the commission under the terms of Subchapter E of Chapter 11 of
10-62    this code.  A water right is exempt from cancellation under this
10-63    subsection only once even if it has been transferred or
10-64    redeposited.
10-65          SECTION 2.22.  Subchapter K, Chapter 15, Water Code, is
10-66    amended by adding Section 15.7071 to read as follows:
10-67          Sec. 15.7071.  WATER TRUST ACCOUNT.  (a)  The water trust
10-68    account is created as a special account in the general revenue fund
10-69    and is composed of:
 11-1                (1)  money appropriated to the Parks and Wildlife
 11-2    Department for the program; and
 11-3                (2)  grants, contracts, gifts, or other funds that the
 11-4    Parks and Wildlife Department may receive relating to this
 11-5    subchapter.
 11-6          (b)  The money in the water trust account may be used only
 11-7    for the administration and operation of the trust by the Parks and
 11-8    Wildlife Department under this subchapter.
 11-9          SECTION 2.23.  Section 16.012, Water Code, is amended by
11-10    adding Subsections (l) and (m) to read as follows:
11-11          (l)  The executive administrator shall obtain or develop
11-12    groundwater availability models for major and minor aquifers in
11-13    coordination with regional water planning groups created under
11-14    Section 16.053 that overlie the aquifers.  Modeling of major
11-15    aquifers shall be completed not later than October 1, 2004.  On
11-16    completing a groundwater availability model for an aquifer, the
11-17    executive administrator shall provide the model to each groundwater
11-18    conservation district and each regional water planning group
11-19    created under Section 16.053 overlying that aquifer.
11-20          (m)  The executive administrator may conduct surveys of
11-21    persons using groundwater and surface water at intervals determined
11-22    appropriate by the executive administrator to gather data to be
11-23    used for long-term water supply planning.  Recipients of the survey
11-24    shall complete and return the survey to the executive
11-25    administrator.  Persons who fail to timely complete and return the
11-26    survey shall not be eligible for funding from the board for board
11-27    programs and shall be ineligible to obtain permits, permit
11-28    amendments, or permit renewals from the commission under Chapter
11-29    11.  Surveys obtained by the board from nongovernmental entities
11-30    shall be excepted from the requirements of Section 552.021,
11-31    Government Code, if so requested in writing by the person
11-32    completing the survey.  This subsection does not apply to survey
11-33    information regarding windmills used for domestic and livestock
11-34    use.
11-35          SECTION 2.24.  Section 16.051, Water Code, is amended by
11-36    amending Subsections (a), (d), (f), (g), and (h) and adding
11-37    Subsection (i) to read as follows:
11-38          (a)  Not [No] later than January 5, 2002, and before the end
11-39    of each successive five-year period after that date [every five
11-40    years thereafter], the board shall prepare, develop, formulate, and
11-41    adopt a comprehensive state water plan that incorporates the
11-42    regional water plans approved under Section 16.053 to the extent
11-43    the board determines that such plans provide efficient strategies
11-44    and recommendations regarding groundwater and surface water use.
11-45    The state water plan shall provide for the orderly development,
11-46    management, and conservation of water resources and preparation for
11-47    and response to drought conditions, in order that sufficient water
11-48    will be available at a reasonable cost to ensure public health,
11-49    safety, and welfare; further economic development; and protect the
11-50    agricultural and natural resources of the entire state.
11-51          (d)  The board, in coordination with the commission, the
11-52    Department of Agriculture, and the Parks and Wildlife Department,
11-53    shall adopt by rule guidance principles for the state water plan
11-54    which reflect the public interest of the entire state.  When
11-55    adopting guidance principles, due consideration shall be given to
11-56    the construction and improvement of surface water resources and the
11-57    application of principles that result in voluntary redistribution
11-58    of water resources.  The guidance principles shall include
11-59    standards for economic analysis to be used in regional and state
11-60    water planning.  The board shall review and update the guidance
11-61    principles, with input from the commission, the Department of
11-62    Agriculture, and the Parks and Wildlife Department, as necessary
11-63    but at least every five years to coincide with the five-year cycle
11-64    for adoption of a new water plan as described in Subsection (a).
11-65          (f)  The legislature may designate a[:]
11-66                [(1)]  river or stream segment of unique ecological
11-67    value.  This designation solely means that a state agency or
11-68    political subdivision of the state may not finance the actual
11-69    construction of a reservoir in a specific river or stream segment
 12-1    designated by the legislature under this subsection.
 12-2          (g)  The legislature may designate a[; or]
 12-3                [(2)]  site of unique value for the construction of a
 12-4    reservoir.
 12-5          [(g)]  A state agency or political subdivision of the state
 12-6    may not obtain a fee title or an easement that would[:]
 12-7                [(1)  destroy the unique ecological value of a river or
 12-8    stream segment designated by the legislature under Subsection (f)
 12-9    of this section; or]
12-10                [(2)]  significantly prevent the construction of a
12-11    reservoir on a site designated by the legislature under [Subsection
12-12    (f) of] this subsection [section].
12-13          (h)  The board, the commission, or the Parks and Wildlife
12-14    Department or a political subdivision affected by an action taken
12-15    in violation of Subsections (f) and [Subsection] (g) [of this
12-16    section] may bring a cause of action to remedy or prevent the
12-17    violation.  A cause of action brought under this subsection must be
12-18    filed in a district court in Travis County or in the county in
12-19    which the action is proposed or occurring.
12-20          (i)  If the board determines that a conflict requiring
12-21    resolution exists between the state water plan and a regional water
12-22    plan developed under Section 16.053, the board shall coordinate
12-23    with the involved region to resolve the conflict.  If conflict
12-24    remains, the board shall resolve the conflict.  If the board
12-25    determines that the resolution requires a revision of an approved
12-26    regional water plan, the board shall suspend the approval of that
12-27    plan and provide information to the regional water planning group.
12-28    The regional water planning group shall prepare any revisions to
12-29    its plan specified by the board and shall hold, after notice, at
12-30    least one public hearing at some central location within the
12-31    regional water planning area.  The regional water planning group
12-32    shall consider all public and board comments; prepare, revise, and
12-33    adopt its plan; and submit the revised plan to the board for
12-34    approval.  On the request of the involved region, the board shall
12-35    include discussion of the conflict and its resolution in the state
12-36    water plan that the board provides to the governor, the lieutenant
12-37    governor, and speaker of the house of representatives under
12-38    Subsection (e).
12-39          SECTION 2.25.  Subsections (d) and (e), Section 16.053, Water
12-40    Code, are amended to read as follows:
12-41          (d)  The board shall provide guidelines for the consideration
12-42    of existing regional planning efforts by regional water planning
12-43    groups.  The board shall provide guidelines for the format in which
12-44    information shall be presented in the regional water plans.  The
12-45    board by rule shall require a holder of a surface water permit, a
12-46    certified filing, or a certificate of adjudication for surface
12-47    water, a holder of a permit for the export of groundwater from a
12-48    groundwater conservation district, a retail public water supplier,
12-49    a wholesale water provider, an irrigation district, and any other
12-50    person who is transporting groundwater or surface water 20 miles or
12-51    more to report to the board information on certain water pipelines
12-52    and other facilities that can be used for water conveyance.
12-53    Nothing in the initial planning effort shall prevent development of
12-54    a management plan or project where local or regional needs require
12-55    action prior to completion of the initial regional water plan under
12-56    this section.
12-57          (e)  Each regional water planning group shall submit to the
12-58    board a regional water plan that:
12-59                (1)  is consistent with the guidance principles for the
12-60    state water plan adopted by the board under Section 16.051(d);
12-61                (2)  provides information based on data provided or
12-62    approved by the board in a format consistent with the guidelines
12-63    provided by the board under Subsection (d);
12-64                (3)  identifies:
12-65                      (A)  each source of water supply in the regional
12-66    water planning area in accordance with the guidelines provided by
12-67    the board under Subsections (d) and (f);
12-68                      (B)  factors specific to each source of water
12-69    supply to be considered in determining whether to initiate a
 13-1    drought response; [and]
 13-2                      (C)  actions to be taken as part of the response;
 13-3    and
 13-4                      (D)  information on water pipelines and other
 13-5    facilities that can be used for water conveyance as provided by
 13-6    board rules and guidelines;
 13-7                (4)  has specific provisions for water management
 13-8    strategies to be used during a drought of record;
 13-9                (5)  includes but is not limited to consideration of
13-10    the following:
13-11                      (A)  any existing water or drought planning
13-12    efforts addressing all or a portion of the region;
13-13                      (B)  certified groundwater conservation district
13-14    management plans and other plans submitted under Section 16.054;
13-15                      (C)  all potentially feasible water management
13-16    strategies, including but not limited to improved conservation,
13-17    reuse, and management of existing water supplies, acquisition of
13-18    available existing water supplies, and development of new water
13-19    supplies;
13-20                      (D)  protection of existing water rights in the
13-21    region;
13-22                      (E)  opportunities for and the benefits of
13-23    developing regional water supply facilities or providing regional
13-24    management of water supply facilities;
13-25                      (F)  appropriate provision for environmental
13-26    water needs and for the effect of upstream development on the bays,
13-27    estuaries, and arms of the Gulf of Mexico and the effect of plans
13-28    on navigation;
13-29                      (G)  provisions in Section 11.085(k)(1) if
13-30    interbasin transfers are contemplated;
13-31                      (H)  voluntary transfer of water within the
13-32    region using, but not limited to, regional water banks, sales,
13-33    leases, options, subordination agreements, and financing
13-34    agreements; and
13-35                      (I)  emergency transfer of water under Section
13-36    11.139, including information on the part of each permit, certified
13-37    filing, or certificate of adjudication for nonmunicipal use in the
13-38    region that may be transferred without causing unreasonable damage
13-39    to the property of the nonmunicipal water rights holder; [and]
13-40                (6)  identifies river and stream segments of unique
13-41    ecological value and sites of unique value for the construction of
13-42    reservoirs that the regional water planning group recommends for
13-43    protection under Section 16.051;
13-44                (7)  assesses the impact of the plan on unique river
13-45    and stream segments identified in Subdivision (6); and
13-46                (8)  describes the impact of proposed water management
13-47    strategies on water quality.
13-48          SECTION 2.26.  Subdivision (7), Subsection (h), Section
13-49    16.053, Water Code, is amended to read as follows:
13-50                (7)  The board may approve a regional water plan only
13-51    after it has determined that:
13-52                      (A)  [that] all interregional conflicts involving
13-53    that regional water planning area have been resolved;
13-54                      (B)  the plan includes advanced water
13-55    conservation practices and drought management measures
13-56    incorporating, at a minimum, the provisions of Sections 11.1271 and
13-57    11.1272; and
13-58                      (C)  the plan is consistent with long-term
13-59    protection of the state's water resources, agricultural resources,
13-60    and natural resources as embodied in the guidance principles
13-61    adopted under Section 16.051(d).
13-62          SECTION 2.27.  Section 16.053, Water Code, is amended by
13-63    amending Subsection (j) and adding Subsection (p) to read as
13-64    follows:
13-65          (j)  The board may provide financial assistance to political
13-66    subdivisions under Subchapters E and F of this chapter, Subchapters
13-67    C, D, E, F, [and] J, O, and P, Chapter 15, and Subchapters D, I, K,
13-68    and L, Chapter 17, for water supply projects only if:
13-69                (1)  the board determines that the needs to be
 14-1    addressed by the project will be addressed in a manner that is
 14-2    consistent with the state water plan; and
 14-3                (2)  beginning January 5, 2002, the board:
 14-4                      (A)  has approved a regional water plan as
 14-5    provided by Subsection (i), and any required updates of the plan,
 14-6    for the region of the state that includes the area benefiting from
 14-7    the proposed project; and
 14-8                      (B)  determines that the needs to be addressed by
 14-9    the project will be addressed in a manner that is consistent with
14-10    that regional water plan.
14-11          (p)  If a groundwater conservation district files a petition
14-12    with the board stating that a conflict requiring resolution may
14-13    exist between the district's certified groundwater conservation
14-14    district management plan developed under Section 36.1071 and the
14-15    approved regional water plan, the board shall facilitate
14-16    coordination between the district and the involved region to
14-17    resolve the conflict.  If conflict remains, the board shall resolve
14-18    the conflict.  If the board determines that resolution of conflict
14-19    requires a revision of an approved regional water plan, the board
14-20    shall suspend the approval of that plan and provide information to
14-21    the regional water planning group.  The regional water planning
14-22    group shall prepare any revisions to its plan specified by the
14-23    board and shall hold, after notice, at least one public hearing at
14-24    some central location within the regional water planning area.  The
14-25    regional water planning group shall consider all public and board
14-26    comments; prepare, revise, and adopt its plan; and submit the
14-27    revised plan to the board for approval and inclusion in the state
14-28    water plan.  If the board determines that resolution of conflict
14-29    requires a revision of the district's certified groundwater
14-30    conservation district management plan, the board shall suspend the
14-31    certification of that plan and provide information to the district.
14-32    The groundwater district shall prepare any revisions to its plan
14-33    specified by the board and shall hold, after notice, at least one
14-34    public hearing at some central location within the district.  The
14-35    groundwater district shall consider all public and board comments;
14-36    prepare, revise, and adopt its plan; and submit the revised plan to
14-37    the board for certification.  On the request of the involved region
14-38    or groundwater conservation district, the board shall include
14-39    discussion of the conflict and its resolution in the state water
14-40    plan that the board provides to the governor, the lieutenant
14-41    governor, and the speaker of the house of representatives under
14-42    Section 16.051(e).
14-43          SECTION 2.28.  Subsections (a), (c), and (d), Section 16.054,
14-44    Water Code, are amended to read as follows:
14-45          (a)  Notwithstanding the provisions of this subsection,
14-46    groundwater districts are the state's preferred method of managing
14-47    groundwater resources.  It is the policy of the state that water
14-48    resource management, water conservation, and drought planning
14-49    should occur on an ongoing basis.  The board, commission, and Parks
14-50    and Wildlife Department shall make available where appropriate
14-51    technical and financial assistance for such planning.  In addition,
14-52    the Department of Agriculture may provide input and assistance, as
14-53    appropriate, for local water [such] planning.
14-54          (c)  When preparing a plan to be submitted under this
14-55    section, a person shall consider the implementation of a
14-56    desalination program if practicable.
14-57          (d)  The regional water planning group shall consider any
14-58    plan submitted under this section when preparing the regional water
14-59    plan under Section 16.053 of this code.  A political subdivision,
14-60    including a groundwater conservation district, in the regional
14-61    water planning area may request a regional water planning group to
14-62    consider specific changes to a regional water plan based on changed
14-63    conditions or new information.  The regional water planning group
14-64    shall consider the request and shall amend its regional water plan
14-65    if it determines that an amendment is warranted.
14-66          (e)  After January 5, 2002, when [(d)  When] preparing
14-67    individual water plans that address drought or the development,
14-68    management, or conservation of water resources from the holders of
14-69    existing permits, certified filings, or certificates of
 15-1    adjudication, the water suppliers, [groundwater districts,] special
 15-2    districts, irrigation districts, and other water users should
 15-3    ensure that the plan is not in conflict with the applicable
 15-4    approved regional water plan for their region.
 15-5          SECTION 2.29.  Subdivision (11), Section 35.002, Water Code,
 15-6    is amended to read as follows:
 15-7                (11)  "Management area" means an area designated and
 15-8    delineated by the Texas Water Development Board [commission] as an
 15-9    area suitable for management of groundwater resources.
15-10          SECTION 2.30.  Section 35.004, Water Code, is amended to read
15-11    as follows:
15-12          Sec. 35.004.  DESIGNATION OF MANAGEMENT AREAS.  (a)  The
15-13    Texas Water Development Board, with assistance and cooperation from
15-14    the commission, shall designate groundwater management areas
15-15    covering all major and minor aquifers in the state.  The initial
15-16    designation of management areas shall be completed by September 1,
15-17    2003 [On its own motion from time to time, or on receiving a
15-18    petition, the commission may designate groundwater management
15-19    areas].  Each management area shall be designated with the
15-20    objective of providing the most suitable area for the management of
15-21    the groundwater resources.  To the extent feasible, the management
15-22    area shall coincide with the boundaries of a groundwater reservoir
15-23    or a subdivision of a groundwater reservoir.  The Texas Water
15-24    Development Board [commission] also may consider other factors,
15-25    including the boundaries of political subdivisions.
15-26          (b)  The commission may designate a management area after
15-27    September 1, 2001, for a petition filed and accepted by the
15-28    commission according to its rules in effect before September 1,
15-29    2001.  The commission shall act on the designation in accordance
15-30    with this section and Section 35.005 [On the request of any person
15-31    interested in the petition, or on the request of the commission,
15-32    the executive director shall prepare available evidence relating to
15-33    the configuration of a groundwater management area.  Before making
15-34    the designation, the commission shall consider the evidence
15-35    prepared by the executive director and other evidence submitted at
15-36    the hearing].
15-37          (c)  The Texas Water Development Board [commission] may alter
15-38    the boundaries of designated management areas as required by future
15-39    conditions and as justified by factual data.  An alteration of
15-40    boundaries does not invalidate the previous creation of any
15-41    district.
15-42          (d)  The Texas Water Development Board [commission] shall
15-43    designate groundwater management areas using the procedures
15-44    applicable to rulemaking under [the Administrative Procedure Act,
15-45    Subchapter B,] Chapter 2001, Government Code.
15-46          SECTION 2.31.  Subsections (a) and (f), Section 35.007, Water
15-47    Code, are amended to read as follows:
15-48          (a)  The executive director and the executive administrator
15-49    shall meet periodically [at least once a year] to identify, based
15-50    on information gathered by the commission and the Texas Water
15-51    Development Board, those areas of the state that are experiencing
15-52    or that are expected to experience, within the immediately
15-53    following 25-year period, critical groundwater problems, including
15-54    shortages of surface water or groundwater, land subsidence
15-55    resulting from groundwater withdrawal, and contamination of
15-56    groundwater supplies.  By September 1, 2005, the commission, with
15-57    assistance and cooperation from the Texas Water Development Board,
15-58    shall complete the initial designation of priority groundwater
15-59    management areas across all major and minor aquifers of the state
15-60    for all areas that meet the criteria for such designation.  The
15-61    studies may be prioritized considering information from the
15-62    regional planning process, information from the Texas Water
15-63    Development Board groundwater management areas and groundwater
15-64    conservation districts, and any other information available.  After
15-65    the initial designation of priority groundwater management areas,
15-66    the commission and the Texas Water Development Board shall annually
15-67    review the need for additional designations as provided by this
15-68    subsection.
15-69          (f)  The report shall include:
 16-1                (1)  the recommended delineation of the boundaries of
 16-2    any proposed priority groundwater management area in the form of an
 16-3    order to be considered for adoption by the commission;
 16-4                (2)  the reasons and supporting information for or
 16-5    against designating the area as a priority groundwater management
 16-6    area;
 16-7                (3)  a recommendation regarding whether one or more
 16-8    districts [a district] should be created in the priority
 16-9    groundwater management area, [or whether] the priority groundwater
16-10    management area should be added to an existing district, or a
16-11    combination of those actions should be taken;
16-12                (4)  a recommendation as to actions that should be
16-13    considered to conserve natural resources;
16-14                (5)  an evaluation of information or studies submitted
16-15    to the executive director under Subsection (c); and
16-16                (6)  any other information that the executive director
16-17    considers helpful to the commission.
16-18          SECTION 2.32.  Section 35.008, Water Code, is amended to read
16-19    as follows:
16-20          Sec. 35.008.  PROCEDURES FOR DESIGNATION OF PRIORITY
16-21    GROUNDWATER MANAGEMENT AREA; CONSIDERATION OF CREATION OF NEW
16-22    DISTRICT OR ADDITION OF LAND IN PRIORITY GROUNDWATER MANAGEMENT
16-23    AREA TO EXISTING DISTRICT; COMMISSION ORDER.  (a)  The commission
16-24    shall designate priority groundwater management areas using the
16-25    procedures provided by this chapter in lieu of those provided by
16-26    Subchapter B, Chapter 2001, Government Code.
16-27          (b)  The commission shall call an evidentiary hearing to
16-28    consider:
16-29                (1)  the designation of a priority groundwater
16-30    management area; and
16-31                (2)  whether one or more districts [a district] should
16-32    be created over all or part of a priority groundwater management
16-33    area,[; or]
16-34                [(3)  whether] all or part of the land in the priority
16-35    groundwater management area should be added to an existing
16-36    district, or a combination of those actions should be taken.
16-37    Consideration of this issue shall include a determination of
16-38    whether a district is feasible and practicable.
16-39          (c)  Evidentiary hearings shall be held at a location in one
16-40    of the counties in which the priority groundwater management area
16-41    is located, or proposed to be located, or in the nearest convenient
16-42    location if adequate facilities are not available in those
16-43    counties.
16-44          (d)  At the hearing, the commission shall hear testimony and
16-45    receive evidence from affected persons.  Affected persons shall
16-46    include landowners, well owners, and other users of groundwater in
16-47    the proposed priority groundwater management area.  The commission
16-48    shall consider the executive director's report and supporting
16-49    information and the testimony and evidence received at the hearing.
16-50    If the commission considers further information necessary, the
16-51    commission may request such information from any source.
16-52          (e)  Any evidentiary hearing shall be concluded not later
16-53    than the 75th day after the date notice of the hearing is
16-54    published.
16-55          (f)  At the conclusion of the hearing and the commission's
16-56    considerations, the commission shall issue an order stating its
16-57    findings and conclusions, including whether a priority groundwater
16-58    management area should be designated in the area and
16-59    recommendations regarding district creation as set forth in
16-60    Subsection (g).
16-61          (g)  The commission's order designating a priority
16-62    groundwater management area must recommend that the area be covered
16-63    by a district in any of the following ways:
16-64                (1)  creation of one or more new districts;
16-65                (2)  addition of the land in the priority groundwater
16-66    management area to one or more existing districts; or
16-67                (3)  a combination of actions under Subdivisions (1)
16-68    and (2).
16-69          (h)  In recommending the boundaries of a district or
 17-1    districts under Subsection (g), the commission shall give
 17-2    preference to boundaries that are coterminous with those of the
 17-3    priority groundwater management area, but may recommend district
 17-4    boundaries along existing political subdivision boundaries at the
 17-5    discretion of the commission to facilitate district creation and
 17-6    confirmation.
 17-7          (i)  The designation of a priority groundwater management
 17-8    area may not be appealed nor may it be challenged under Section
 17-9    5.351 of this code or [the Administrative Procedure Act,] Section
17-10    2001.038, Government Code.
17-11          SECTION 2.33.  Subsections (a) and (b), Section 35.009, Water
17-12    Code, are amended to read as follows:
17-13          (a)  The commission shall have notice of the hearing
17-14    published in at least one newspaper with general circulation in the
17-15    county or counties in which the area proposed for designation as a
17-16    priority groundwater management area [or the area within a priority
17-17    groundwater management area being considered for district creation
17-18    or for addition to an existing district] is located.  Notice must
17-19    be published not later than the 30th day before the date set for
17-20    the hearing [commission to consider the designation of the priority
17-21    groundwater management area, the creation of a district in a
17-22    priority groundwater management area, or the addition of land in a
17-23    priority groundwater management area to an existing district].
17-24          (b)  The notice must include:
17-25                (1)  if applicable, a statement of the general purpose
17-26    and effect of designating the proposed priority groundwater
17-27    management area;
17-28                (2)  if applicable, a statement of the general purpose
17-29    and effect of creating a new district in the priority groundwater
17-30    management area;
17-31                (3)  if applicable, a statement of the general purpose
17-32    and effect of adding all or part of the land in the priority
17-33    groundwater management area to an existing district;
17-34                (4)  a map generally outlining the boundaries of the
17-35    area being considered for priority groundwater management area
17-36    designation [or the priority groundwater management area being
17-37    considered for district creation or for addition to an existing
17-38    district,] or notice of the location at which a copy of the map may
17-39    be examined or obtained;
17-40                (5)  a statement that the executive director's report
17-41    concerning the priority groundwater management area or proposed
17-42    area is available at the commission's main office in Austin, Texas,
17-43    and at regional offices of the commission for regions which include
17-44    territory within the priority groundwater management area or
17-45    proposed priority groundwater management area and that the report
17-46    is available for inspection during regular business hours;
17-47                (6)  a description or the name of the locations in the
17-48    affected area at which the commission has provided copies of the
17-49    executive director's report to be made available for public
17-50    inspection;
17-51                (7)  the name and address of each public library, each
17-52    county clerk's office, and each district to which the commission
17-53    has provided copies of the executive director's report; and
17-54                (8)  the date, time, and place of the hearing.
17-55          SECTION 2.34.  Section 35.012, Water Code, is amended to read
17-56    as follows:
17-57          Sec. 35.012.  CREATION OF DISTRICT IN PRIORITY GROUNDWATER
17-58    MANAGEMENT AREA [COMMISSIONER ORDER].  (a)  [At the conclusion of
17-59    its hearing and considerations, the commission shall issue an] [order
17-60    stating its findings and conclusions.]
17-61          [(b)  If the commission finds that the land and other
17-62    property in the priority groundwater management area would benefit
17-63    from the creation of one or more districts, that there is a public
17-64    need for one or more districts, and that the creation of one or
17-65    more districts would further the public welfare, the commission
17-66    shall issue an order stating that the creation of one or more
17-67    districts is needed.]
17-68          [(c)]  Following the issuance of a commission order under
17-69    Section 35.008 designating a priority groundwater management area
 18-1    and recommending the creation of one or more districts, or the
 18-2    addition of land to an existing district [Subsection (b)], the
 18-3    landowners in the priority groundwater management area may:
 18-4                (1)  create one or more districts under Subchapter B,
 18-5    Chapter 36;
 18-6                (2)  have the area annexed to a district that adjoins
 18-7    the area; or
 18-8                (3)  create one or more districts through the
 18-9    legislative process.
18-10          (b)  Within two years, but no sooner than 120 days, from the
18-11    date on which the commission issues an order under Section 35.008
18-12    designating a priority groundwater management area, for those areas
18-13    that are not within a district, the commission shall:
18-14                (1)  create one or more new districts under Section
18-15    36.0151;
18-16                (2)  recommend that the areas, or a portion of the
18-17    areas, be added to an existing district under Section 35.013; or
18-18                (3)  take any combination of the actions under
18-19    Subdivisions (1) and (2).
18-20          (c)  Following the issuance of a commission order under
18-21    Section 35.008 [(d)  The commission shall identify the areas
18-22    subject to the order of the commission issued under Subsection (b)
18-23    that have not been incorporated into a district and shall delineate
18-24    proposed boundaries of a district to include those areas.  If the
18-25    commission proposes the creation of one or more districts], the
18-26    Texas Agricultural Extension Service shall begin an educational
18-27    program within such areas with the assistance and cooperation of
18-28    the Texas Water Development Board, the commission, the Department
18-29    of Agriculture, other state agencies, and existing districts to
18-30    inform the residents of the status of the area's water resources
18-31    and management options including possible formation of a district[,
18-32    before beginning the procedures for creation of a district provided
18-33    in Subchapter B, Chapter 36].  The county commissioners court of
18-34    each county in the priority groundwater management area shall form
18-35    a steering committee to provide assistance to the Texas
18-36    Agricultural Extension Service in accomplishing the goals of the
18-37    education program within the area.
18-38          [(e)  If the commission fails to find that the district would
18-39    be a benefit to the land and other property within the priority
18-40    groundwater management area, that there is a public need for the
18-41    district, or that creation of the district will further the public
18-42    welfare, the commission shall issue an order stating that a
18-43    district should not be created within the boundaries of the
18-44    priority groundwater management area.]
18-45          [(f)  An order of the commission issued under this section
18-46    may not be appealed.]
18-47          SECTION 2.35.  Section 35.013, Water Code, is amended to read
18-48    as follows:
18-49          Sec. 35.013.  ADDING PRIORITY GROUNDWATER MANAGEMENT AREA TO
18-50    EXISTING DISTRICT.  (a)  [If land in a priority groundwater
18-51    management area is located adjacent to one or more existing
18-52    districts, the commission, instead of issuing an order under
18-53    Section 35.012, may issue an order recommending that the priority
18-54    groundwater management area be added to the existing district
18-55    designated by the commission.  In its order, the commission must
18-56    find that the land and other property in the priority groundwater
18-57    management area and the land in the existing district will benefit
18-58    from the addition of the area, that there is a public need to add
18-59    the priority groundwater management area to the existing district,
18-60    and that the addition of the land to the existing district would
18-61    further the public welfare.]
18-62          [(b)]  If the commission in its order under Section 35.008
18-63    [executive director] recommends that the priority groundwater
18-64    management area, or a portion of the priority groundwater
18-65    management area, be added to an existing district [or if the
18-66    commission considers it possible to add the priority groundwater
18-67    management area to an adjacent existing district], the commission
18-68    shall give notice to the board of the existing district recommended
18-69    in its order [by the executive director or considered by the
 19-1    commission to possibly serve the area] and to any other existing
 19-2    districts adjacent to the priority groundwater management area.
 19-3          (b) [(c)]  The commission shall submit a copy of the order to
 19-4    the board of the district to which it is recommending the priority
 19-5    groundwater management area be added.  The board shall vote on the
 19-6    addition of the priority groundwater management area to the
 19-7    district and shall advise the commission of the outcome.
 19-8          (c) [(d)]  If the board votes to accept the addition of the
 19-9    priority groundwater management area to the district, the board:
19-10                (1)  may request the Texas Agricultural Extension
19-11    Service, the commission, and the Texas Water Development Board,
19-12    with the cooperation and assistance of the Department of
19-13    Agriculture and other state agencies, to administer an educational
19-14    program to inform the residents of the status of the area's water
19-15    resources and management options including possible annexation into
19-16    a district;
19-17                (2)  shall call an election within the priority
19-18    groundwater management area, or portion of the priority groundwater
19-19    management area, as delineated by the commission to determine if
19-20    the priority groundwater management area will be added to the
19-21    district; and
19-22                (3)  shall designate election precincts and polling
19-23    places for the elections in the order calling an election under
19-24    this subsection.
19-25          (d) [(e)]  The board shall give notice of the election and
19-26    the proposition to be voted on.  The board shall publish notice of
19-27    the election at least one time in one or more newspapers with
19-28    general circulation within the boundaries of the priority
19-29    groundwater management area.  The notice must be published before
19-30    the 30th day preceding the date set for the election.
19-31          (e) [(f)]  The ballots for the election shall be printed to
19-32    provide for voting for or against the proposition:  "The inclusion
19-33    of _________________________ (briefly describe priority groundwater
19-34    management area) in the ______________ District."  If the district
19-35    has outstanding debts or taxes, the proposition shall include the
19-36    following language:  "and assumption by the described area of a
19-37    proportional share of the debts or taxes of the district."
19-38          (f) [(g)]  Immediately after the election, the presiding
19-39    judge of each polling place shall deliver the returns of the
19-40    election to the board, and the board shall canvass the returns for
19-41    the election within the priority groundwater management area and
19-42    declare the results.  If a majority of the voters in the priority
19-43    groundwater management area voting on the proposition vote in favor
19-44    of the proposition, the board shall declare that the priority
19-45    groundwater management area is added to the district.  If a
19-46    majority of the voters in the priority groundwater management area
19-47    voting on the proposition vote against adding the priority
19-48    groundwater management area to the district, the board shall
19-49    declare that the priority groundwater management area is not added
19-50    to the district.  The board shall file a copy of the election
19-51    results with the commission.
19-52          (g) [(h)]  If the voters approve adding the priority
19-53    groundwater management area to the district, the board of the
19-54    district to which the priority groundwater management area is added
19-55    shall provide reasonable representation on that board compatible
19-56    with the district's existing scheme of representation.
19-57          (h) [(i)]  If the proposition is defeated, or if the board of
19-58    the existing district votes not to accept the addition of the area
19-59    to the district, then the commission shall, except as provided
19-60    under Subsection (i), create under Section 36.0151 one or more
19-61    districts covering the priority groundwater management area within
19-62    one year of the date on which the proposition is defeated or the
19-63    board votes not to accept the area.
19-64          (i)  For an area which is not feasible for the creation of
19-65    one or more districts as determined in the commission's findings
19-66    under Section 35.008, the commission shall include in its report
19-67    under Section 35.018 recommendations for the future management of
19-68    the priority groundwater management area.
19-69          (j)  Another [another] election to add the priority
 20-1    groundwater management area to an existing district may not be
 20-2    called before the first anniversary of the date on which the
 20-3    election on the proposition was held.
 20-4          SECTION 2.36.  Subsection (c), Section 35.018, Water Code, is
 20-5    amended to read as follows:
 20-6          (c)  If the commission determines that a district created
 20-7    under Chapter 36 is not appropriate for, or capable of, the
 20-8    protection of the groundwater resources for a particular management
 20-9    area or priority groundwater management area, the commission may
20-10    recommend in its report to the legislature the creation of a
20-11    special district or amendment of an existing district.  [(1)  If
20-12    voters fail to create a groundwater district in a priority
20-13    groundwater management area or if voters fail to add the priority
20-14    groundwater management area to an existing groundwater district,
20-15    the report shall include recommendations for the future management
20-16    of the priority groundwater management area.  The recommendations
20-17    may include but are not limited to the following:]
20-18                      [(A)  creation of a groundwater district by the
20-19    legislature;]
20-20                      [(B)  annexation of a priority groundwater
20-21    management area into an existing district by the legislature; or]
20-22                      [(C)  management of the priority groundwater
20-23    management area by the nearest regional office of the commission.
20-24    The commission may be authorized to:]
20-25                            [(i)  adopt spacing and annual per acre
20-26    pumping restrictions;]
20-27                            [(ii)  issue well permits in accordance
20-28    with Sections 36.113 and 36.1131;]
20-29                            [(iii)  prevent waste and protect the
20-30    quality of groundwater in accordance with Sections
20-31    36.001(8)(A)-(G);]
20-32                            [(iv)  levy administrative penalties for
20-33    violations; and]
20-34                            [(v)  collect fees in accordance with
20-35    Sections 36.206(a) and (b).]
20-36                [(2)  If the commission is required by the legislature
20-37    to manage the priority groundwater management area, a new election
20-38    may not be called for three years from the date of the last
20-39    election.]
20-40          SECTION 2.37.  Section 36.001, Water Code, is amended by
20-41    amending Subdivision (13) and adding Subdivisions (18) through (22)
20-42    to read as follows:
20-43                (13)  "Management area" means an area designated and
20-44    delineated by the Texas Water Development Board [commission] under
20-45    Chapter 35 as an area suitable for management of groundwater
20-46    resources.
20-47                (18)  "River basin" means a river or coastal basin as
20-48    designated as a river basin by the board under Section 16.051.  The
20-49    term does not include waters of the bays or arms of the Gulf of
20-50    Mexico.
20-51                (19)  "Agriculture" means any of the following
20-52    activities:
20-53                      (A)  cultivating the soil to produce crops for
20-54    human food, animal feed, or planting seed or for the production of
20-55    fibers;
20-56                      (B)  the practice of floriculture, viticulture,
20-57    silviculture, and horticulture, including the cultivation of plants
20-58    in containers or nonsoil media, by a nursery grower;
20-59                      (C)  raising, feeding, or keeping animals for the
20-60    production of food or fiber, leather, pelts, or other tangible
20-61    products having a commercial value;
20-62                      (D)  wildlife management; and
20-63                      (E)  planting cover crops, including cover crops
20-64    cultivated for transplantation, or leaving land idle for the
20-65    purpose of participating in any governmental program or normal crop
20-66    or livestock rotation procedure.
20-67                (20)  "Agricultural use" means any use or activity
20-68    involving agriculture, including irrigation.
20-69                (21)  "Conjunctive use" means the combined use of
 21-1    groundwater and surface water sources that optimizes the beneficial
 21-2    characteristics of each source.
 21-3                (22)  "Nursery grower" means a person who grows more
 21-4    than 50 percent of the products that the person either sells or
 21-5    leases, regardless of the variety sold, leased, or grown.  For the
 21-6    purpose of this definition, "grow" means the actual cultivation or
 21-7    propagation of the product beyond the mere holding or maintaining
 21-8    of the item prior to sale or lease and typically includes
 21-9    activities associated with the production or multiplying of stock
21-10    such as the development of new plants from cuttings, grafts, plugs,
21-11    or seedlings.
21-12          SECTION 2.38.  Section 36.002, Water Code, is amended to read
21-13    as follows:
21-14          Sec. 36.002.  OWNERSHIP OF GROUNDWATER.  The ownership and
21-15    rights of the owners of the land and their lessees and assigns in
21-16    groundwater are hereby recognized, and nothing in this code shall
21-17    be construed as depriving or divesting the owners or their lessees
21-18    and assigns of the ownership or rights, except as such rights may
21-19    be limited or altered by [subject to] rules promulgated by a
21-20    district.
21-21          SECTION 2.39.  Subsection (b), Section 36.011, Water Code, is
21-22    amended to read as follows:
21-23          (b)  The commission has exclusive jurisdiction over the
21-24    [delineation of management areas and the] creation of districts.
21-25          SECTION 2.40.  Section 36.012, Water Code, is amended by
21-26    adding Subsection (f) to read as follows:
21-27          (f)  This section does not apply to districts created under
21-28    Section 36.0151.
21-29          SECTION 2.41.  Section 36.013, Water Code, is amended to read
21-30    as follows:
21-31          Sec. 36.013.  PETITION TO CREATE DISTRICT.  (a)  A petition
21-32    requesting creation of a district must be filed with the commission
21-33    [executive director] for review and certification under Section
21-34    36.015 [submission to the commission].
21-35          (b)  The petition filed pursuant to this section must be
21-36    signed by:
21-37                (1)  a majority of the landowners within the proposed
21-38    district, as indicated by the county tax rolls; or
21-39                (2)  if there are more than 50 landowners in the
21-40    proposed district, at least 50 of those landowners.
21-41          (c)  The petition must include:
21-42                (1)  the name of the proposed district;
21-43                (2)  the area and boundaries of the proposed district,
21-44    including a map generally outlining the boundaries of the proposed
21-45    district;
21-46                (3)  the purpose or purposes of the district;
21-47                (4)  a statement of the general nature of any projects
21-48    proposed to be undertaken by the district, the necessity and
21-49    feasibility of the work, and the estimated costs of those projects
21-50    according to the persons filing the projects if the projects are to
21-51    be funded by the sale of bonds or notes; [and]
21-52                (5)  the names of at least five individuals qualified
21-53    to serve as temporary directors; and
21-54                (6)  financial information, including the projected
21-55    maintenance tax or production fee rate and a proposed budget of
21-56    revenues and expenses for the district [any additional terms or
21-57    conditions that restrict the powers of the district from those
21-58    provided in this chapter].
21-59          [(d)  If a part of the proposed district is not included
21-60    within either a management area or a priority groundwater
21-61    management area, the petition to create a district may also contain
21-62    a request to create a management area.  A request to create a
21-63    management area must comply with the requirements for a petition in
21-64    Section 35.005, and may be acted on by the commission separately
21-65    from the petition to create the district.]
21-66          SECTION 2.42.  Section 36.014, Water Code, is amended to read
21-67    as follows:
21-68          Sec. 36.014.  NOTICE AND PUBLIC MEETING [HEARING] ON DISTRICT
21-69    CREATION.  (a)  If a petition is filed under Section 36.013, the
 22-1    commission shall give notice of an application as required by
 22-2    Section 49.011(a) and shall [may] conduct a public meeting in a
 22-3    central location within the area of the proposed district [hearing]
 22-4    on the application not later than the 60th day after the date the
 22-5    commission issues notice [if the commission determines that a
 22-6    hearing is necessary] under Section 49.011(a).
 22-7          (b)  At the public meeting, the commission shall receive
 22-8    comments from interested persons [If the petition contains a
 22-9    request to create a management area in all or part of the proposed
22-10    district, the notice must also be given in accordance with the
22-11    requirements in Section 35.006 for the designation of management
22-12    areas].
22-13          SECTION 2.43.  Section 36.015, Water Code, is amended to read
22-14    as follows: 
22-15          Sec. 36.015.  COMMISSION CERTIFICATION AND ORDER.  (a)  Not
22-16    later than the 90th day after the date the commission holds a
22-17    public meeting on a petition under Section 36.014, the commission
22-18    shall certify the petition if the petition is administratively
22-19    complete.  A petition is administratively complete if it complies
22-20    with the requirements of Sections 36.013(b) and (c).
22-21          (b)  The commission may not certify a petition if the
22-22    commission finds that the proposed district cannot be adequately
22-23    funded to carry out its purposes based on the financial information
22-24    provided in the petition under Section 36.013(c)(6) or that the
22-25    boundaries of the proposed district do not provide for the proper
22-26    regulation of the groundwater resources.  The commission shall give
22-27    preference to boundary lines that are coterminous with those of a
22-28    groundwater management area but may also consider boundaries along
22-29    existing political subdivision boundaries if such boundaries would
22-30    facilitate district creation and confirmation.
22-31          (c)  If a petition proposes the creation of a district in an
22-32    area, in whole or in part, that has not been designated as a
22-33    management area, the commission shall provide notice to the Texas
22-34    Water Development Board.  On the receipt of notice from the
22-35    commission, the Texas Water Development Board shall initiate the
22-36    process of designating a management area for the area of the
22-37    proposed district not included in a management area.  The
22-38    commission may not certify the petition until the Texas Water
22-39    Development Board has adopted a rule whereby the boundaries of the
22-40    proposed district are coterminous with or inside the boundaries of
22-41    a management area.
22-42          (d)  If the commission does not certify the petition, the
22-43    commission shall provide to the petitioners, in writing, the
22-44    reasons for not certifying the petition.  The petitioners may
22-45    resubmit the petition, without paying an additional fee, if the
22-46    petition is resubmitted within 90 days after the date the
22-47    commission sends the notice required by this subsection.
22-48          (e)  If the commission certifies the petition as
22-49    administratively complete, the commission shall issue an order,
22-50    notify the petitioners, and appoint temporary directors as provided
22-51    by Section 36.016.
22-52          (f)  Refusal by the commission to certify a petition to
22-53    create a district does not invalidate or affect the designation of
22-54    any management area.  [FINDINGS.  (a)  If the commission finds that
22-55    a district is feasible and practicable, that it would be a benefit
22-56    to the land in the district, and that it would be a public benefit
22-57    or utility, the commission shall issue an order containing these
22-58    findings granting the petition.]
22-59          [(b)  If the commission finds that a district is not feasible
22-60    and practicable, that it would not be a benefit to the land in the
22-61    district, that it would not be a public benefit or utility, or that
22-62    it is not needed, the commission by order shall deny the petition.]
22-63          [(c)  The commission may adjust the boundaries of the
22-64    proposed district to exclude any land that would not be benefited
22-65    by inclusion in the district and is not necessary to the district
22-66    for proper regulation of the groundwater reservoir.]
22-67          [(d)  If the commission grants the petition to create the
22-68    district, it shall direct in its order creating the district that
22-69    an election be called by the temporary directors to confirm the
 23-1    creation of the district and to elect permanent directors.]
 23-2          [(e)  The refusal to grant a petition to create a district
 23-3    does not invalidate or affect the designation of any management
 23-4    area requested in the same petition.]
 23-5          [(f)  The commission shall act on the petition within a
 23-6    reasonable amount of time.]
 23-7          SECTION 2.44.  Subsection (a), Section 36.0151, Water Code,
 23-8    is amended to read as follows:
 23-9          (a)  If the commission is required to create [proposes that]
23-10    a district [be created] under Section 35.012(b) [35.012(d)], it
23-11    shall, without an evidentiary hearing, issue an order creating the
23-12    district and shall provide in its order [creating the district
23-13    provide] that temporary directors be appointed under Section 36.016
23-14    and that an election be called by the temporary directors to
23-15    authorize the district to assess taxes [confirm the creation of the
23-16    district] and to elect permanent directors.
23-17          SECTION 2.45.  Subsection (a), Section 36.016, Water Code, is
23-18    amended to read as follows:
23-19          (a)  If the commission certifies [grants] a petition to
23-20    create a district under Section 36.015, the commission shall
23-21    appoint the temporary directors named in the petition.  If [or
23-22    after] the commission dissolves a district's board under Section
23-23    36.303, it shall appoint five temporary directors.
23-24          SECTION 2.46.  Section 36.017, Water Code, is amended by
23-25    amending the section heading and Subsections (a) and (d) and adding
23-26    Subsection (i) to read as follows:
23-27          Sec. 36.017.  CONFIRMATION AND DIRECTORS' ELECTION FOR
23-28    DISTRICT IN A MANAGEMENT AREA.  (a)  For a district created under
23-29    Section 36.015, not [Not] later than the 120th [60th] day after the
23-30    date all temporary directors have been appointed and have
23-31    qualified, the temporary directors shall meet and order an election
23-32    to be held within the boundaries of the proposed district to
23-33    approve the creation of the district and to elect permanent
23-34    directors.
23-35          (d)  The ballot for the election must be printed to provide
23-36    for voting for or against the proposition:  "The creation of the
23-37    _________________ Groundwater Conservation District."  If the
23-38    district levies a maintenance tax for payment of its expenses, then
23-39    an additional [the] proposition shall be included with [include]
23-40    the following language:  "The [and the] levy of a maintenance tax
23-41    at a rate not to exceed ______ cents for each $100 of assessed
23-42    valuation."
23-43          (i)  If a majority of the votes cast at the election are
23-44    against the levy of a maintenance tax, the district shall set
23-45    production fees to pay for the district's regulation of groundwater
23-46    in the district, including fees based on the amount of water to be
23-47    withdrawn from a well.
23-48          SECTION 2.47.  Subchapter B, Chapter 36, Water Code, is
23-49    amended by adding Section 36.0171 to read as follows:
23-50          Sec. 36.0171.  TAX AUTHORITY AND DIRECTORS' ELECTION FOR
23-51    DISTRICT IN A PRIORITY GROUNDWATER MANAGEMENT AREA.  (a)  For a
23-52    district created under Section 36.0151, not later than the 120th
23-53    day after the date all temporary directors have been appointed and
23-54    have qualified, the temporary directors shall meet and order an
23-55    election to be held within the boundaries of the proposed district
23-56    to authorize the district to assess taxes and to elect permanent
23-57    directors.
23-58          (b)  In the order calling the election, the temporary
23-59    directors shall designate election precincts and polling places for
23-60    the election.  In designating the polling places, the temporary
23-61    directors shall consider the needs of all voters for conveniently
23-62    located polling places.
23-63          (c)  The temporary directors shall publish notice of the
23-64    election at least once in at least one newspaper with general
23-65    circulation within the boundaries of the proposed district.  The
23-66    notice must be published before the 30th day preceding the date of
23-67    the election.
23-68          (d)  The ballot for the election must be printed to provide
23-69    for voting for or against the proposition:  "The levy of a
 24-1    maintenance tax by the ___________________ Groundwater Conservation
 24-2    District at a rate not to exceed ______ cents for each $100 of
 24-3    assessed valuation."
 24-4          (e)  Immediately after the election, the presiding judge of
 24-5    each polling place shall deliver the returns of the election to the
 24-6    temporary board, and the board shall canvass the returns and
 24-7    declare the result.  The board shall file a copy of the election
 24-8    result with the commission.
 24-9          (f)  If a majority of the votes cast at the election favor
24-10    the levy of a maintenance tax, the temporary board shall declare
24-11    the levy approved and shall enter the result in its minutes.
24-12          (g)  If a majority of the votes cast at the election are
24-13    against the levy of a maintenance tax, the temporary board shall
24-14    declare the levy defeated and shall enter the result in its
24-15    minutes.
24-16          (h)  If the majority of the votes cast at the election are
24-17    against the levy of a maintenance tax, the district shall set
24-18    permit fees to pay for the district's regulation of groundwater in
24-19    the district, including fees based on the amount of water to be
24-20    withdrawn from a well.
24-21          SECTION 2.48.  Section 36.019, Water Code, is amended to read
24-22    as follows:
24-23          Sec. 36.019.  CONFIRMATION ELECTION IN DISTRICT INCLUDING
24-24    LAND IN MORE THAN ONE COUNTY.  (a)  A district, the major portion
24-25    of which is located in one county, may not be organized to include
24-26    land in another county unless the election held in the other county
24-27    to confirm and ratify the creation of the district is approved by a
24-28    majority of the voters of the other county voting in an election
24-29    called for that purpose.
24-30          (b)  This section does not apply to districts created under
24-31    Section 36.0151.
24-32          SECTION 2.49.  Subsection (g), Section 36.066, Water Code, is
24-33    amended to read as follows:
24-34          (g)  If the district prevails in any suit other than a suit
24-35    in which it voluntarily intervenes, the district may seek and the
24-36    court shall grant [it may], in the same action, recovery [recover
24-37    reasonable fees] for attorney's fees [attorneys], costs for expert
24-38    witnesses, and other costs incurred by the district before the
24-39    court.  The amount of the attorney's fees shall be fixed by the
24-40    court.
24-41          SECTION 2.50.  Subsection (a), Section 36.101, Water Code, is
24-42    amended to read as follows:
24-43          (a)  A district may make and enforce rules, including rules
24-44    limiting groundwater production based on tract size or the spacing
24-45    of wells, to provide for conserving, preserving, protecting, and
24-46    recharging of the groundwater or of a groundwater reservoir or its
24-47    subdivisions in order to control subsidence, prevent degradation of
24-48    water quality, or prevent waste of groundwater and to carry out the
24-49    powers and duties provided by this chapter.
24-50          SECTION 2.51.  Subsections (b) and (d), Section 36.102, Water
24-51    Code, are amended to read as follows:
24-52          (b)  The board by rule may set reasonable civil penalties for
24-53    breach of any rule of the district [that shall] not to exceed
24-54    $10,000 per day per violation, and each day of a continuing
24-55    violation constitutes a separate violation [the jurisdiction of a
24-56    justice court as provided by Section 27.031, Government Code].
24-57          (d)  If the district prevails in any suit to enforce its
24-58    rules, the district may seek and the court shall grant [it may], in
24-59    the same action, recovery [recover reasonable fees] for attorney's
24-60    fees [attorneys], costs for expert witnesses, and other costs
24-61    incurred by the district before the court.  The amount of the
24-62    attorney's fees shall be fixed by the court.
24-63          SECTION 2.52.  Section 36.1071, Water Code, is amended by
24-64    amending Subsections (a), (b), and (e) and adding Subsection (h) to
24-65    read as follows:
24-66          (a)  Following notice and hearing, the district shall, in
24-67    coordination with surface water management entities on a regional
24-68    basis, develop a comprehensive management plan which addresses the
24-69    following management goals, as applicable:
 25-1                (1)  providing the most efficient use of groundwater;
 25-2                (2)  controlling and preventing waste of groundwater;
 25-3                (3)  controlling and preventing subsidence;
 25-4                (4)  addressing conjunctive surface water management
 25-5    issues; [and]
 25-6                (5)  addressing natural resource issues;
 25-7                (6)  addressing drought conditions; and
 25-8                (7)  addressing conservation.
 25-9          (b)  After January 5, 2002, a [A] district management plan,
25-10    or any amendments to a district management plan, shall be developed
25-11    by the district using the district's best available data and
25-12    forwarded to the regional water planning group for consideration in
25-13    their planning process [adopted after the Texas Water Development
25-14    Board approval of a regional water plan for the region in which the
25-15    district is located shall be consistent with the regional water
25-16    plan].
25-17          (e)  In the management plan described under Subsection (a),
25-18    the district shall:
25-19                (1)  identify the performance standards and management
25-20    objectives under which the district will operate to achieve the
25-21    management goals identified under Subsection (a);
25-22                (2)  establish a groundwater management standard
25-23    describing the desired condition of the groundwater source as
25-24    indicated by indices of quantity of water in the source, quality of
25-25    water produced from the source, springflows, or subsidence of the
25-26    land surface, and the groundwater management standard shall
25-27    describe this condition for various time periods;
25-28                (3)  specify, in as much detail as possible, the
25-29    actions, procedures, performance, and avoidance that are or may be
25-30    necessary to effect the plan, including specifications and proposed
25-31    rules;
25-32                (4) [(3)]  include estimates of the following:
25-33                      (A)  the existing total usable amount of
25-34    groundwater in the district;
25-35                      (B)  the amount of groundwater being used within
25-36    the district on an annual basis;
25-37                      (C)  the annual amount of recharge, if any, to
25-38    the groundwater resources within the district and how natural or
25-39    artificial recharge may be increased; [and]
25-40                      (D)  the projected surface water supply and
25-41    demand for water within the district; and
25-42                      (E)  the groundwater withdrawal rates based on
25-43    groundwater management standards adopted under Subdivision (2)
25-44    using groundwater availability modeling information as provided by
25-45    the executive administrator in conjunction with any available
25-46    site-specific information provided by the district and acceptable
25-47    to the executive administrator; and
25-48                (5) [(4)]  address water supply needs in a manner that
25-49    is not in conflict with the appropriate approved regional water
25-50    plan if a regional water plan has been approved under Section
25-51    16.053.
25-52          (h)  In developing its management plan and groundwater
25-53    management standards, the district shall use the groundwater
25-54    availability modeling information provided by the executive
25-55    administrator in conjunction with any available site-specific
25-56    information provided by the district and acceptable to the
25-57    executive administrator.
25-58          SECTION 2.53.  Section 36.1072, Water Code, is amended by
25-59    adding Subsection (g) to read as follows:
25-60          (g)  In this subsection, "board" means the Texas Water
25-61    Development Board.  A person with a legally defined interest in
25-62    groundwater in a district or the regional water planning group may
25-63    file a petition with the board stating that a conflict requiring
25-64    resolution may exist between the district's certified groundwater
25-65    conservation district management plan developed under Section
25-66    36.1071 and the state water plan.  If a conflict exists, the board
25-67    shall facilitate coordination between the involved person or
25-68    regional water planning group and the district to resolve the
25-69    conflict.  If conflict remains, the board shall resolve the
 26-1    conflict.  The board action under this provision may be
 26-2    consolidated, at the option of the board, with related action under
 26-3    Section 16.053(p).  If the board determines that resolution of the
 26-4    conflict requires a revision of the certified groundwater
 26-5    conservation district management plan, the board shall suspend the
 26-6    certification of the plan and provide information to the district.
 26-7    The district shall prepare any revisions to the plan specified by
 26-8    the board and shall hold, after notice, at least one public hearing
 26-9    at some central location within the district.  The district shall
26-10    consider all public and board comments; prepare, revise, and adopt
26-11    its plan; and submit the revised plan to the board for
26-12    certification.  On the request of the district or the regional
26-13    water planning group, the board shall include discussion of the
26-14    conflict and its resolution in the state water plan that the board
26-15    provides to the governor, the lieutenant governor, and the speaker
26-16    of the house of representatives under Section 16.051(e).
26-17          SECTION 2.54.  Section 36.108, Water Code, is amended to read
26-18    as follows:
26-19          Sec. 36.108.  JOINT PLANNING IN MANAGEMENT AREA.  (a)  If two
26-20    or more districts are located within the boundaries of the same
26-21    management area, each district shall prepare a comprehensive
26-22    management plan as required by Section 36.1071 covering that
26-23    district's respective territory.  On completion and certification
26-24    of the plan as required by Section 36.1072, each district shall
26-25    forward a copy of the new or revised management plan to the other
26-26    districts in the management area.  The boards of the districts
26-27    shall consider the plans individually and shall compare them to
26-28    other management plans then in force in the management area.
26-29          (b)  The board of directors of each district in the
26-30    management area may, by resolution, call for [a] joint planning
26-31    [meeting] with [the boards of directors of] the other districts in
26-32    the management area to review the management plans and
26-33    accomplishments for the management area.  [The boards shall meet to
26-34    consider the plans individually and shall compare them to other
26-35    management plans then in force in the management area.]  In
26-36    reviewing the management plans, the boards shall consider:
26-37                (1)  the goals of each management plan and its impact
26-38    on planning throughout the management area;
26-39                (2)  the groundwater management standards of each
26-40    district describing the desired condition of the groundwater source
26-41    over time as indicated by indices of quantity of water in the
26-42    source, quality of water produced from the source, springflows, or
26-43    subsidence of the land surface;
26-44                (3)  the groundwater withdrawal rates adopted by each
26-45    district and its effectiveness in achieving the groundwater
26-46    management standard of the district;
26-47                (4)  the effectiveness of the measures established by
26-48    each management plan for conserving and protecting groundwater and
26-49    preventing waste, and the effectiveness of these measures in the
26-50    management area generally; and
26-51                (5) [(3)]  any other matters that the boards consider
26-52    relevant to the protection and conservation of groundwater and the
26-53    prevention of waste in the management area.
26-54          (c)  Each district participating in the joint planning
26-55    process initiated under Subsection (b) shall ensure that the
26-56    groundwater management standards adopted by the district are
26-57    adequate to protect the groundwater in the management area and are
26-58    not incompatible with the groundwater management standards adopted
26-59    by the other districts in the management area.
26-60          (d)  If a [A] joint meeting of the boards of directors is
26-61    called, the meeting must be held in accordance with [the Open
26-62    Meetings Act,] Chapter 551, Government Code.  Notice of the meeting
26-63    shall be given in accordance with the requirements for notice of
26-64    district board of directors meetings under that Act.  In addition,
26-65    notice of the meeting shall be published not later than the 30th
26-66    day before the date of the scheduled meeting in a newspaper with
26-67    general circulation in each county in the management area.
26-68          (e) [(d)]  A district in the management area may file with
26-69    good cause a petition with the commission requesting an inquiry if
 27-1    the petitioner district adopted a resolution calling for joint
 27-2    planning, and the other district or districts either refused to
 27-3    join in the planning process or failed to adopt an adequate
 27-4    management standard or the process failed to result in adequate
 27-5    planning, and the petition provides evidence [believes] that:
 27-6                (1)  another district in the management area has failed
 27-7    to adopt rules;
 27-8                (2)  the groundwater in the management area is not
 27-9    adequately protected by the rules adopted by another district; [or]
27-10                (3)  the groundwater in the management area is not
27-11    adequately protected due to the failure of another district to
27-12    enforce substantial compliance with its rules; or
27-13                (4)  another district in the management area has failed
27-14    to adopt groundwater management standards that are adequate to
27-15    protect the groundwater in the management area.
27-16          (f) [(e)]  Not later than the 90th day after the date the
27-17    petition is filed, the commission shall review the petition and
27-18    either:
27-19                (1)  dismiss it if it finds that the evidence is not
27-20    adequate to show that any of the conditions alleged in the petition
27-21    exist; or
27-22                (2)  select a review panel as provided in Subsection
27-23    (g) [(f)].
27-24          (g) [(f)]  If the petition is not dismissed under Subsection
27-25    (f), the [The] commission shall [may] appoint a review panel
27-26    consisting of a chairman and four other members.  A director or
27-27    general manager of a district located outside the management area
27-28    that is the subject of the petition may be appointed to the review
27-29    panel.  The commission may not appoint more than two members of the
27-30    review panel from any one district.  The commission also shall
27-31    appoint a disinterested person to serve as a nonvoting recording
27-32    secretary for the review panel.  The recording secretary may be an
27-33    employee of the commission.  The recording secretary shall record
27-34    and document the proceedings of the panel.
27-35          (h) [(g)]  Not later than the 120th day after appointment,
27-36    the review panel shall review the petition and any evidence
27-37    relevant to the petition and, in a public meeting, consider and
27-38    adopt [prepare] a report to be submitted to the commission.  The
27-39    commission may direct the review panel to conduct public hearings
27-40    at a location in the management area to take evidence on the
27-41    petition.  The review panel may attempt to negotiate a settlement
27-42    or resolve the dispute by any lawful means.
27-43          (i) [(h)]  In its report, the review panel shall include:
27-44                (1)  a summary of all evidence taken in any hearing on
27-45    the petition;
27-46                (2)  a list of findings and recommended actions
27-47    appropriate for the commission to take and the reasons it finds
27-48    those actions appropriate; and
27-49                (3)  any other information the panel considers
27-50    appropriate.
27-51          (j)  The review panel shall submit its report to the
27-52    commission.
27-53          (k)  Districts located within the same management areas or in
27-54    adjacent management areas may contract to jointly conduct studies
27-55    or research, or to construct projects, under terms and conditions
27-56    that the districts consider beneficial.  Such joint efforts may
27-57    include studies of groundwater availability and quality, aquifer
27-58    modeling, and the interaction of groundwater and surface water;
27-59    educational programs; the purchase and sharing of equipment; and
27-60    the implementation of projects to make groundwater available,
27-61    including aquifer recharge, brush control, weather modification,
27-62    desalination, regionalization, and treatment or conveyance
27-63    facilities.  The districts may contract under their existing
27-64    authorizations including those of Chapter 791, Government Code,
27-65    provided, however, that their contracting authority is not limited
27-66    by Sections 791.011(c)(2) and 791.011(d)(3) and Section 791.014,
27-67    Government Code.
27-68          SECTION 2.55.  Subsection (d), Section 36.113, Water Code, is
27-69    amended to read as follows:
 28-1          (d)  Before granting or denying a permit, the district shall
 28-2    consider whether:
 28-3                (1)  the application conforms to the requirements
 28-4    prescribed by this chapter and is accompanied by the prescribed
 28-5    fees;
 28-6                (2)  the proposed use of water unreasonably affects
 28-7    existing groundwater and surface water resources or existing permit
 28-8    holders;
 28-9                (3)  the proposed use of water is dedicated to any
28-10    beneficial use;
28-11                (4)  the proposed use of water is consistent with the
28-12    district's certified water management plan;
28-13                (5)  the applicant has agreed to avoid waste and
28-14    achieve water conservation; and
28-15                (6)  the applicant has agreed that reasonable diligence
28-16    will be used to protect groundwater quality and that the applicant
28-17    will follow well plugging guidelines at the time of well closure.
28-18          SECTION 2.56.  Section 36.116, Water Code, is amended to read
28-19    as follows:
28-20          Sec. 36.116.  REGULATION OF SPACING AND PRODUCTION.  In order
28-21    to minimize as far as practicable the drawdown of the water table
28-22    or the reduction of artesian pressure, to control subsidence, to
28-23    prevent interference between wells, to prevent degradation of water
28-24    quality, or to prevent waste, a district by rule may regulate:
28-25                (1)  [provide for] the spacing of water wells by:
28-26                      (A)  requiring all water wells to be spaced a
28-27    certain distance from property lines or adjoining wells;
28-28                      (B)  requiring wells with a certain production
28-29    capacity, pump size, or other characteristic related to the
28-30    construction or operation of a well to be spaced a certain distance
28-31    from property lines or adjoining wells; or
28-32                      (C)  imposing spacing requirements adopted by the
28-33    board; and
28-34                (2)  the production of groundwater by:
28-35                      (A)  limiting total annual production;
28-36                      (B)  limiting the amount of water produced based
28-37    on acreage or tract size;
28-38                      (C)  limiting the amount of water that may be
28-39    produced from a maximum number of acres assigned by the district to
28-40    an authorized well site;
28-41                      (D)  limiting the maximum amount of water that
28-42    may be produced from a number of acres assigned by a district on
28-43    the basis of acre-feet per acre or gallons per minute per acre for
28-44    an authorized well site; or
28-45                      (E)  setting other production limits adopted by
28-46    the district [and may regulate the production of wells].
28-47          SECTION 2.57.  Section 36.117, Water Code, is amended to read
28-48    as follows:
28-49          Sec. 36.117.  EXEMPTIONS; EXCEPTION; LIMITATIONS.  (a)  A
28-50    district may exempt wells from the requirement of obtaining
28-51    [requirements to obtain] a drilling permit, an operating permit, or
28-52    any other permit required by this chapter or the district's rules.
28-53          (b)  A district may not require any [a] permit issued by the
28-54    district [for]:
28-55                (1)  for [drilling or producing from] a well used
28-56    solely for domestic use or for providing water for livestock or
28-57    poultry on a tract of land larger than 10 acres that is either
28-58    drilled, completed, or equipped so that it is incapable of
28-59    producing more than 25,000 gallons of groundwater a day;
28-60                (2)  for the drilling of a water well used solely to
28-61    supply water for a rig that is actively engaged in drilling or
28-62    exploration operations for an oil or gas well permitted by the
28-63    Railroad Commission of Texas provided that the person holding the
28-64    permit is responsible for drilling and operating the water well and
28-65    the well is located on the same lease or field associated with the
28-66    drilling rig; or [alteration of the size of a well or to restrict
28-67    the production of a well if the water produced or to be produced
28-68    from the well is used or to be used to supply the domestic needs of
28-69    10 or fewer households and a person who is a member of each
 29-1    household is either the owner of the well, a person related to the
 29-2    owner or a member of the owner's household within the second degree
 29-3    by consanguinity, or an employee of the owner;]
 29-4                (3)  for the drilling of a water well authorized under
 29-5    a permit issued by the Railroad Commission of Texas under Chapter
 29-6    134, Natural Resources Code, or for production from any such well
 29-7    to the extent the withdrawals are required for mining activities
 29-8    regardless of any subsequent use of the water.  [or alteration of
 29-9    the size of a well or to restrict the production from the well if
29-10    the water produced or to be produced from the well is used or to be
29-11    used to provide water for feeding livestock and poultry connected
29-12    with farming, ranching, or dairy enterprises; or]
29-13                [(4)  water wells to supply water for hydrocarbon
29-14    production activities, regardless of whether those wells are
29-15    producing, that are associated with any well permitted by the
29-16    Railroad Commission of Texas drilled before September 1, 1985.]
29-17          [(b)  The board shall adopt rules determining the
29-18    applicability of Subsection (a)(3) to facilities used primarily for
29-19    feeding livestock.]
29-20          (c) [The district shall not deny the owner of a tract of
29-21    land, or his lessee, who has no well equipped to produce more than
29-22    25,000 gallons a day on the tract, either a permit to drill a well
29-23    on his land or the privilege to produce groundwater from his land,
29-24    subject to the rules of the district.]
29-25          [(d)] A district may not restrict the production of any well
29-26    that is exempt from permitting under Subsection (b)(1) [equipped to
29-27    produce 25,000 gallons or less a day].
29-28          (d)  Notwithstanding Subsection (b), a district may require a
29-29    well to be permitted by the district and to comply with all
29-30    district rules if:
29-31                (1)  the purpose of a well exempted under Subsection
29-32    (b)(2) is no longer solely to supply water for a rig that is
29-33    actively engaged in drilling or exploration operations for an oil
29-34    or gas well permitted by the Railroad Commission of Texas; or
29-35                (2)  the withdrawals from a well exempted under
29-36    Subsection (b)(3) are no longer necessary for mining activities or
29-37    are greater than the amount necessary for mining activities
29-38    specified in the permit issued by the Railroad Commission of Texas
29-39    under Chapter 134, Natural Resources Code.
29-40          (e)  An entity holding a permit issued by the Railroad
29-41    Commission of Texas under Chapter 134, Natural Resources Code, that
29-42    authorizes the drilling of a water well shall report monthly to the
29-43    district:
29-44                (1)  the total amount of water withdrawn during the
29-45    month;
29-46                (2)  the quantity of water necessary for mining
29-47    activities; and
29-48                (3)  the quantity of water withdrawn for other
29-49    purposes.  [Nothing in this chapter applies to wells drilled for
29-50    oil, gas, sulphur, uranium, or brine, or for core tests, or for
29-51    injection of gas, saltwater, or other fluid, or for any other
29-52    purpose, under permits issued by the Railroad Commission of Texas.
29-53    A district may not require a drilling permit for a well to supply
29-54    water for drilling any wells permitted by the Railroad Commission
29-55    of Texas.  Any well that ceases to be used for these purposes and
29-56    is then used as an ordinary water well is subject to the rules of
29-57    the district.  Water wells drilled after September 1, 1997, to
29-58    supply water for hydrocarbon production activities must meet the
29-59    spacing requirements of the district unless no space is available
29-60    within 300 feet of the production well or the central injection
29-61    station.]
29-62          (f)  Notwithstanding Subsection (d), a district may not
29-63    require a well exempted under Subsection (b)(3) to comply with the
29-64    spacing requirements of the district. [Water wells exempted under
29-65    this section shall be equipped and maintained so as to conform to
29-66    the district's rules requiring installation of casing, pipe, and
29-67    fittings to prevent the escape of groundwater from a groundwater
29-68    reservoir to any reservoir not containing groundwater and to
29-69    prevent the pollution or harmful alteration of the character of the
 30-1    water in any groundwater reservoir.]
 30-2          (g)  A district shall not deny an application for a permit to
 30-3    drill and produce water for hydrocarbon production activities if
 30-4    the application meets the spacing, density, and production rules
 30-5    applicable to all permitted water wells in the district.
 30-6          (h)  A [require] water well [wells] exempted under Subsection
 30-7    (a) or (b) shall:
 30-8                (1)  [this section to] be registered in accordance with
 30-9    rules promulgated by the district; and
30-10                (2)  [before drilling.  All exempt water wells shall]
30-11    be equipped and maintained so as to conform to the district's rules
30-12    requiring installation of casing, pipe, and fittings to prevent the
30-13    escape of groundwater from a groundwater reservoir to any reservoir
30-14    not containing groundwater and to prevent the pollution or harmful
30-15    alteration of the character of the water in any groundwater
30-16    reservoir.
30-17          (i)  The driller of a well exempted under Subsection (a) or
30-18    (b) shall file the drilling log with the district.
30-19          (j) [(h)]  A well to supply water for a subdivision of land
30-20    for which a plat approval is required by Chapter 232, Local
30-21    Government Code, [law] is not exempted under Subsection (b) [this
30-22    section].
30-23          (k)  Groundwater withdrawn from a well exempt from permitting
30-24    or regulation under this section and subsequently transported
30-25    outside the boundaries of the district shall be subject to any
30-26    applicable production and export fees under Sections 36.122 and
30-27    36.205.
30-28          (l)  This section applies to water wells, including water
30-29    wells used to supply water for activities related to the
30-30    exploration or production of hydrocarbons or minerals.  This
30-31    section does not apply to production or injection wells drilled for
30-32    oil, gas, sulphur, uranium, or brine, or for core tests, or for
30-33    injection of gas, saltwater, or other fluids, under permits issued
30-34    by the Railroad Commission of Texas.
30-35          SECTION 2.58.  Section 36.122, Water Code, is amended to read
30-36    as follows:
30-37          Sec. 36.122.  TRANSFER OF GROUNDWATER OUT OF DISTRICT.
30-38    (a)  If a permit or an amendment to a permit under Section 36.113
30-39    proposes to transfer groundwater outside of a district's
30-40    boundaries, the district may also consider the provisions of this
30-41    section in determining whether to grant or deny the permit.
30-42          (b)  A district may promulgate rules requiring a person to
30-43    obtain a permit or an amendment to a permit under Section 36.113
30-44    from the district for the transfer of groundwater out of the
30-45    district to:
30-46                (1)  increase, on or after March 2, 1997, the amount of
30-47    groundwater to be transferred under a continuing arrangement in
30-48    effect before that date; or
30-49                (2)  transfer groundwater out of the district on or
30-50    after March 2, 1997, under a new arrangement.
30-51          (c)  The district may not impose more restrictive permit
30-52    conditions on transporters than the district imposes on existing
30-53    in-district use unless the restrictions are reasonably necessary to
30-54    protect existing use.  Any such limitations must bear a reasonable
30-55    relationship to the existing district management plan and must
30-56    thereafter apply to increased use by historic users or new permit
30-57    applications regardless of type or location of use.
30-58          (d) [(b)]  The district may impose a reasonable fee for
30-59    processing an application [for a permit] under this section.  The
30-60    fee may not exceed fees that the district imposes for processing
30-61    other applications under Section 36.113.  An application filed to
30-62    comply with this section shall be considered and processed under
30-63    the same procedures as other applications for permits under Section
30-64    36.113 and shall be combined with applications filed to obtain a
30-65    permit for in-district water use under Section 36.113 from the same
30-66    applicant.
30-67          (e)  The district may impose a reasonable fee or surcharge
30-68    for an export fee not to exceed:
30-69                (1)  a fee negotiated between the district and the
 31-1    transporter;
 31-2                (2)  the equivalent of the district's tax rate per
 31-3    hundred dollars of valuation for each thousand gallons of water
 31-4    transferred out of the district or 2.5 cents per thousand gallons
 31-5    of water, if the district assesses a tax rate of less than 2.5
 31-6    cents per hundred dollars of valuation; or
 31-7                (3)  for a fee-based district, an additional 50 percent
 31-8    export surcharge, in addition to the district's production fee, for
 31-9    water transferred out of the district.
31-10          (f)  A district may not impose a fee under Subsection (e) on
31-11    withdrawal of water from land owned prior to March 1, 2001, by a
31-12    political subdivision if the political subdivision pays a tax
31-13    mitigation fee under Section 36.205(g).
31-14          (g) [(c)  Before issuing a permit under this section, the
31-15    district must give notice of the application and hold a public
31-16    hearing.]
31-17          [(d)]  In reviewing a proposed transfer of groundwater out of
31-18    the district [determining whether to issue a permit under this
31-19    section], the district shall consider:
31-20                (1)  the availability of water in the district and in
31-21    the proposed receiving area during the period for which the water
31-22    supply is requested;
31-23                (2)  [the availability of feasible and practicable
31-24    alternative supplies to the applicant;]
31-25                [(3)  the amount and purposes of use in the proposed
31-26    receiving area for which water is needed;]
31-27                [(4)]  the projected effect of the proposed transfer on
31-28    aquifer conditions, depletion, subsidence, or effects on existing
31-29    permit holders or other groundwater users within the district; and
31-30                (3) [(5)]  the state [approved regional] water plan and
31-31    certified district management plan.
31-32          (h) [(e)]  The district may not deny a permit based on the
31-33    fact that the applicant seeks to transfer groundwater outside of
31-34    the district but may limit a permit issued under this section if
31-35    conditions in Subsection (g) [(d)] warrant the limitation, subject
31-36    to the provisions of Subsection (c).
31-37          (i) [(f)]  In addition to conditions provided by Section
31-38    36.1131, the permit shall specify:
31-39                (1)  the amount of water that may be transferred out of
31-40    the district; and
31-41                (2)  the period for which the water may be transferred.
31-42          (j)  The period specified by Subsection (i)(2) shall be:
31-43                (1)  five years if construction of a conveyance system
31-44    has not been initiated prior to the issuance of the permit; or
31-45                (2)  30 years if construction of a conveyance system
31-46    has been initiated prior to the issuance of the permit.
31-47          (k)  A term of five years under Subsection (j) shall
31-48    automatically be extended to 30 years if construction of a
31-49    conveyance system is begun before the expiration of the initial
31-50    five-year term.
31-51          (l)  Notwithstanding the period of time specified in
31-52    Subsections (j) and (k) during which water may be transferred under
31-53    a permit, a district may periodically review the amount of water
31-54    that may be transferred under the permit and may limit the amount
31-55    if conditions considered in Subsection (g) warrant the limitation,
31-56    subject to the provisions of Subsection (c).  The review described
31-57    by this subsection may take place not more frequently than the
31-58    period of time provided for the review or renewal of regular
31-59    permits issued by the district.  In its determination of whether to
31-60    renew a permit issued under this section, the district shall
31-61    consider relevant and current data for the conservation of
31-62    groundwater resources and shall consider the permit in the same
31-63    manner it would consider any other permit in the district.
31-64          (m)  A district is prohibited from using revenues obtained
31-65    under Subsection (e) to prohibit the transfer of groundwater
31-66    outside of a district.  A district is not prohibited from using
31-67    revenues obtained under Subsection (e) for paying expenses related
31-68    to enforcement of this chapter or district rules.
31-69          (n)  Subsections (b), (e), and (f) apply [(g)  A district may
 32-1    not prohibit the export of groundwater if the purchase was in
 32-2    effect on or before June 1, 1997.]
 32-3          [(h)  This section applies] only to a transfer of water that
 32-4    is initiated or increased after March 1, 2001.  Subsection (e) does
 32-5    not apply to a district that is collecting an export fee or
 32-6    surcharge on March 1, 2001 [the effective date of this section].
 32-7          (o) [(i)]  A district shall adopt rules as necessary to
 32-8    implement this section but shall not adopt rules expressly
 32-9    prohibiting the export of groundwater.
32-10          SECTION 2.59.  Section 36.205, Water Code, is amended to read
32-11    as follows:
32-12          Sec. 36.205.  AUTHORITY TO SET FEES.  (a)  A district may set
32-13    fees for administrative acts of the district, such as filing
32-14    applications.  Fees set by a district may not unreasonably exceed
32-15    the cost to the district of performing the administrative function
32-16    for which the fee is charged.
32-17          (b)  A district shall set and collect fees for all services
32-18    provided outside the boundaries of the district.  Such fees may not
32-19    unreasonably exceed the cost to the district of providing the
32-20    services outside the district.
32-21          (c)  A district may assess production fees based on the
32-22    amount of water authorized by permit to be withdrawn from a well or
32-23    the amount actually withdrawn.  A district may assess the fees in
32-24    lieu of, or in conjunction with, any taxes otherwise levied by the
32-25    district.  A district may use revenues generated by the fees for
32-26    any lawful purpose.  Production fees [Fees based on the amount of
32-27    water to be withdrawn from a well] shall not exceed:
32-28                (1)  $1 [one dollar] per acre-foot payable annually
32-29    [acre foot] for water used for agricultural use [the purpose of
32-30    irrigating agricultural crops]; or
32-31                (2)  $10 per acre-foot payable annually [17 cents per
32-32    thousand gallons] for water used for any other purpose.
32-33          (d)  The Barton Springs-Edwards Aquifer Conservation District
32-34    and the Guadalupe County Underground Water Conservation District
32-35    may not charge production fees for an annual period greater than $1
32-36    per acre-foot for water used for agricultural use or 17 cents per
32-37    thousand gallons for water used for any other purpose.  The Barton
32-38    Springs-Edwards Aquifer Conservation District [A district affected
32-39    by Subsection (c)(2) that also] may assess a water use fee against
32-40    a specific municipality in [shall assess] an amount not to exceed
32-41    60 percent of the total funding of the district received from water
32-42    use fees assessed against that municipality and other nonexempt
32-43    users in the district.  This subsection shall take precedence over
32-44    all prior enactments.
32-45          (e)  Subsection (c) does not apply to the following
32-46    districts:
32-47                (1)  the Edwards Aquifer Authority;
32-48                (2)  the Fort Bend Subsidence District; [or]
32-49                (3)  the Harris-Galveston Coastal Subsidence District;
32-50                (4)  the Barton Springs-Edwards Aquifer Conservation
32-51    District; or
32-52                (5)  any district that collects a property tax and that
32-53    was created before September 1, 1999, unless otherwise authorized
32-54    by special law.
32-55          (f)  A district, including a district described under
32-56    Subsection (d), may assess a production fee under Subsection (c)
32-57    for any water produced pursuant to an exemption under Section
32-58    36.117 if that water is subsequently sold to another person.
32-59          (g)  Until groundwater production is initiated, political
32-60    subdivisions that own property that is suitable for groundwater
32-61    development or on which a groundwater well field has been
32-62    constructed shall annually pay the district in which the property
32-63    is located a fee that is equal to the taxes that would be paid to
32-64    the district if the land were not owned by a political subdivision.
32-65    This provision applies only to a political subdivision, other than
32-66    a state agency, that is located outside the district where the
32-67    property is located.
32-68          (h)  A district may assess a transportation fee under Section
32-69    36.122.
 33-1          SECTION 2.60.  Section 36.206, Water Code, is amended by
 33-2    amending Subsection (b) and adding Subsection (c) to read as
 33-3    follows:
 33-4          (b)  The rate of fees set for [crop or livestock production
 33-5    or other] agricultural uses shall be no more than 20 percent of the
 33-6    rate applied to municipal uses.
 33-7          (c)  District revenues may not be used to purchase, sell, or
 33-8    lease groundwater resources.
 33-9          SECTION 2.61.  Subchapter I, Chapter 36, Water Code, is
33-10    amended by adding Section 36.3011 to read as follows:
33-11          Sec. 36.3011.  FAILURE OF A DISTRICT TO CONDUCT JOINT
33-12    PLANNING.  (a)  If the board of a district within a common
33-13    management area fails to forward a copy of its new or revised
33-14    certified management plan under Section 36.108, the commission
33-15    shall take appropriate action under Section 36.303.
33-16          (b)  Within 45 days after receiving the review panel's report
33-17    under Section 36.108, the executive director or the commission
33-18    shall take action to implement any or all of the panel's
33-19    recommendations.  If the commission finds that a district in the
33-20    joint planning area has failed to adopt rules, the groundwater in
33-21    the management area is not adequately protected by the rules
33-22    adopted by the district, or the groundwater in the management area
33-23    is not adequately protected because of the district's failure to
33-24    enforce substantial compliance with its rules, the commission may
33-25    take any action it considers necessary in accordance with Section
33-26    36.303.
33-27          SECTION 2.62.  Subsection (a), Section 36.303, Water Code, is
33-28    amended to read as follows:
33-29          (a)  If Section 36.108, 36.301, or 36.302(f) applies, the
33-30    commission, after notice and hearing in accordance with Chapter
33-31    2001, Government Code, shall take action the commission considers
33-32    appropriate, including:
33-33                (1)  issuing an order requiring the district to take
33-34    certain actions or to refrain from taking certain actions;
33-35                (2)  dissolving the board in accordance with Sections
33-36    36.305 and 36.307 and calling an election for the purpose of
33-37    electing a new board;
33-38                (3)  requesting the attorney general to bring suit for
33-39    the appointment of a receiver to collect the assets and carry on
33-40    the business of the groundwater conservation district [removing the
33-41    district's taxing authority]; or
33-42                (4)  dissolving the district in accordance with
33-43    Sections 36.304, 36.305, and 36.308.
33-44          SECTION 2.63.  Subchapter I, Chapter 36, Water Code, is
33-45    amended by adding Section 36.3035 to read as follows:
33-46          Sec. 36.3035.  APPOINTMENT OF A RECEIVER.  (a)  If the
33-47    attorney general brings a suit for the appointment of a receiver
33-48    for a district, a district court shall appoint a receiver if an
33-49    appointment is necessary to protect the assets of the district.
33-50          (b)  The receiver shall execute a bond in an amount to be set
33-51    by the court to ensure the proper performance of the receiver's
33-52    duties.
33-53          (c)  After appointment and execution of bond, the receiver
33-54    shall take possession of the assets of the district specified by
33-55    the court.
33-56          (d)  Until discharged by the court, the receiver shall
33-57    perform the duties that the court directs to preserve the assets
33-58    and carry on the business of the district and shall strictly
33-59    observe the final order involved.
33-60          (e)  On a showing of good cause by the district, the court
33-61    may dissolve the receivership and order the assets and control of
33-62    the business returned to the district.
33-63          SECTION 2.64.  Section 51.149, Water Code, is amended to read
33-64    as follows:
33-65          Sec. 51.149.  CONTRACTS.  (a)  No approvals other than those
33-66    specified in Subsection (c) and in Section 1, Chapter 778, Acts of
33-67    the 74th Legislature, Regular Session, 1995, need be obtained in
33-68    order for a contract between a district and a municipality to be
33-69    valid, binding, and enforceable against all parties to the
 34-1    contract.  After approval by a majority of the electors voting at
 34-2    an election conducted in the manner of a bond election, a district
 34-3    may make payments under a contract from taxes for debt that does
 34-4    not exceed 30 years.
 34-5          (b) [(d)]  A contract may provide that the district will make
 34-6    payments under the contract from proceeds from the sale of notes or
 34-7    bonds, from taxes, from any other income of the district, or from
 34-8    any combination of these.
 34-9          (c) [(e)]  A district may make payments under a contract from
34-10    taxes, other than maintenance taxes, after the provisions of the
34-11    contract have been approved by a majority of the electors voting at
34-12    an election held for that purpose.
34-13          (d) [(f)]  Any contract election may be held at the same time
34-14    as and in conjunction with an election to issue bonds, and the
34-15    procedure for calling the election, giving notice, conducting the
34-16    election, and canvassing the returns shall be the same as the
34-17    procedure for a bond election.
34-18          SECTION 2.65.  Subsection (a), Section 182.052, Utilities
34-19    Code, is amended to read as follows:
34-20          (a)  Except as provided by Section 182.054, a
34-21    government-operated utility may not disclose personal information
34-22    in a customer's account record, or any information relating to the
34-23    volume or units of utility usage or the amounts billed to or
34-24    collected from the individual for utility usage, if the customer
34-25    requests that the government-operated utility keep the information
34-26    confidential.
34-27                    ARTICLE 3.  DISTRICT RATIFICATIONS
34-28           PART 1.  COW CREEK GROUNDWATER CONSERVATION DISTRICT
34-29          SECTION 3.0101.  CREATION.  (a)  A groundwater conservation
34-30    district to be known as the Cow Creek Groundwater Conservation
34-31    District is created in Kendall County, subject to approval at a
34-32    confirmation election under Section 3.0109 of this part.  The
34-33    district is a governmental agency and a body politic and corporate.
34-34          (b)  The district is created under and is essential to
34-35    accomplish the purposes of Section 59, Article XVI, Texas
34-36    Constitution.
34-37          (c)  The district may develop and implement regulatory,
34-38    conservation, and recharge programs that preserve and protect
34-39    groundwater resources located in the district.
34-40          SECTION 3.0102.  DEFINITIONS.  In this part:
34-41                (1)  "District" means the Cow Creek Groundwater
34-42    Conservation District.
34-43                (2)  "Retail public utility" means a retail public
34-44    utility as defined by Section 13.002, Water Code, that is providing
34-45    service in the district on September 1, 2001.
34-46                (3)  "Well" means any excavation drilled or dug into
34-47    the ground that may intercept or penetrate a water-bearing stratum
34-48    or formation.
34-49          SECTION 3.0103.  BOUNDARIES.  The boundaries of the district
34-50    are coextensive with the boundaries of Kendall County.
34-51          SECTION 3.0104.  FINDING OF BENEFIT.  All of the land and
34-52    other property included within the boundaries of the district will
34-53    benefit from the works and projects that are to be accomplished by
34-54    the district under powers conferred by Section 59, Article XVI,
34-55    Texas Constitution.  The district is created to serve a public use
34-56    and benefit.
34-57          SECTION 3.0105.  POWERS.  Except as otherwise provided by
34-58    this part, the district has all of the rights, powers, privileges,
34-59    authority, functions, and duties provided by the general law of the
34-60    state, including Chapter 36, Water Code, applicable to groundwater
34-61    conservation districts created under Section 59, Article XVI, Texas
34-62    Constitution.  This part prevails over any provision of general law
34-63    that is in conflict or inconsistent with this part.
34-64          SECTION 3.0106.  ELECTION OF DIRECTORS.  (a)  The directors
34-65    of the district shall be elected according to the commissioners
34-66    precinct method as provided by this part.
34-67          (b)  One director shall be elected by the qualified voters of
34-68    the entire district and one director shall be elected from each
34-69    county commissioners precinct by the qualified voters of that
 35-1    precinct.
 35-2          (c)  A person shall indicate on the application for a place
 35-3    on the ballot the precinct that the person seeks to represent or
 35-4    that the person seeks to represent the district at large.
 35-5          SECTION 3.0107.  BOARD OF DIRECTORS.  (a)  The district is
 35-6    governed by a board of five directors.
 35-7          (b)  A vacancy in the office of director shall be filled by
 35-8    appointment of the board until the next election for directors.  At
 35-9    the next election for directors, a person shall be elected to fill
35-10    the position.  If the position is not scheduled to be filled at the
35-11    election, the person elected to fill the position shall serve only
35-12    for the remainder of the unexpired term.
35-13          (c)  To be eligible to serve as director from a county
35-14    commissioners precinct, a person must be a registered voter in the
35-15    precinct from which the person is elected or appointed.  To be
35-16    eligible to serve as director at large, a person must be a
35-17    registered voter in the district.
35-18          SECTION 3.0108.  TEMPORARY DIRECTORS.  (a)  The temporary
35-19    board of directors shall be appointed by the county commissioners
35-20    court.  A temporary director will be appointed from each
35-21    commissioners precinct, and one temporary director will be a
35-22    director at large.
35-23          (b)  If a temporary director fails to qualify for office, the
35-24    temporary directors who have qualified shall appoint a person to
35-25    fill the vacancy.  If at any time there are fewer than three
35-26    qualified temporary directors, the Texas Natural Resource
35-27    Conservation Commission shall appoint the necessary number of
35-28    persons to fill all vacancies on the board.
35-29          SECTION 3.0109.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
35-30    (a)  The temporary board of directors shall call and hold an
35-31    election to confirm establishment of the district and to elect five
35-32    initial directors.
35-33          (b)  Section 41.001(a), Election Code, does not apply to a
35-34    confirmation and initial directors election held as provided by
35-35    this section.
35-36          (c)  If a majority of the votes cast at the election favor
35-37    the creation of the district, the temporary directors shall declare
35-38    the district created.  If a majority of the votes cast at the
35-39    election are against the creation of the district, the temporary
35-40    directors shall declare the district defeated.  The temporary
35-41    directors shall file a copy of the election results with the Texas
35-42    Natural Resource Conservation Commission.
35-43          (d)  If a majority of the votes cast at the election are
35-44    against the creation of the district, the temporary directors may
35-45    call and hold subsequent elections to confirm establishment of the
35-46    district and to elect initial directors.  A subsequent election may
35-47    not be held earlier than the first anniversary of the date on which
35-48    the previous election was held.  If the district is not created
35-49    before September 1, 2006, this part expires on that date.
35-50          (e)  Section 36.017(a), Water Code, does not apply to the
35-51    district.
35-52          (f)  Except as provided by this section, a confirmation and
35-53    directors election must be conducted as provided by Sections
35-54    36.017(b)-(h), Water Code, and the Election Code.
35-55          SECTION 3.0110.  INITIAL DIRECTORS.  (a)  A person who wishes
35-56    to be a candidate for the office of initial director may file an
35-57    application with the temporary board of directors to have the
35-58    candidate's name printed on the ballot as provided by Section
35-59    3.0106 of this part.
35-60          (b)  At the confirmation and initial directors election, the
35-61    temporary board of directors shall have the names of the five
35-62    persons serving as temporary directors placed on the ballot by
35-63    commissioners precinct and as at-large director, together with the
35-64    name of any candidate filing for the office of director as provided
35-65    by this section.
35-66          (c)  If the district is created at the election, the
35-67    temporary directors, at the time the vote is canvassed, shall
35-68    declare the candidate receiving the most votes for each
35-69    commissioners precinct or for the at-large director to be elected
 36-1    as the initial directors.
 36-2          (d)  The initial directors for Precincts 2 and 3 shall serve
 36-3    as initial directors until the first regular meeting of the board
 36-4    of directors held after the first permanent directors election
 36-5    under Section 3.0112 of this part.  The initial directors for
 36-6    Precincts 1 and 4 and the initial director representing the
 36-7    district at large shall serve as initial directors until the first
 36-8    regular meeting of the board of directors held after the second
 36-9    permanent directors election under Section 3.0112 of this part.
36-10          SECTION 3.0111.  SERVICE OF DIRECTORS.  (a)  Temporary
36-11    directors serve until the temporary directors become initial
36-12    directors under Section 3.0110 of this part or until this part
36-13    expires under Section 3.0109 of this part, whichever occurs
36-14    earlier.
36-15          (b)  Initial directors serve until permanent directors are
36-16    elected under Section 3.0112 of this part.
36-17          (c)  Permanent directors serve staggered four-year terms.
36-18          (d)  A director serves until the director's successor has
36-19    qualified.
36-20          (e)  Each director must qualify to serve as director in the
36-21    manner provided by Section 36.055, Water Code.
36-22          SECTION 3.0112.  ELECTION OF PERMANENT DIRECTORS.  Beginning
36-23    in the second year after the year in which the district is
36-24    authorized to be created at a confirmation election, an election
36-25    shall be held in the district on the first Saturday in May every
36-26    two years to elect the appropriate number of directors to the
36-27    board.
36-28          SECTION 3.0113.  ADDITIONAL AUTHORITY.  (a)  The district may
36-29    contract with one or more state agencies or other governmental
36-30    bodies, including a county, a river authority, or another district,
36-31    to carry out any function of the district.
36-32          (b)  The district may require a drilling permit before a new
36-33    well is drilled or an existing well is substantially altered.
36-34    Notwithstanding an exemption for a well under Section 36.117, Water
36-35    Code, written authorization granted by the district must be
36-36    received before a new well is drilled or an existing well is
36-37    substantially altered.
36-38          (c)  The district may participate in the construction,
36-39    implementation, and maintenance of best management practices for
36-40    water resource management in the district and may engage in and
36-41    promote the acceptance of best management practices through
36-42    education efforts sponsored by the district.  Construction,
36-43    implementation, and maintenance of best management practices must
36-44    address water quantity and quality practices such as brush
36-45    management, prescribed grazing, recharge structures, water and silt
36-46    detention and retention structures, plugging of abandoned wells,
36-47    rainwater harvesting, and other treatment measures for the
36-48    conservation of water resources.
36-49          (d)  Reasonable fees, as determined by the district, may be
36-50    imposed on an annual basis on each nonexempt well.  The district
36-51    shall adopt any rules necessary for the assessment and collection
36-52    of fees under this subsection.
36-53          (e)  The district may use money collected from fees:
36-54                (1)  in any manner necessary for the management and
36-55    operation of the district;
36-56                (2)  to pay all or part of the principal of and
36-57    interest on district bonds or notes; and
36-58                (3)  for any purpose consistent with the district's
36-59    certified water management plan.
36-60          (f)  The district shall grant an exemption or other relief
36-61    from ad valorem taxes on property on which a water conservation
36-62    initiative has been implemented.  The district shall adopt rules to
36-63    implement this subsection.  A retail public utility shall receive
36-64    the same exemption or relief from ad valorem taxes on property as
36-65    any other customer of the district would receive.
36-66          (g)  As a water conservation initiative to encourage retail
36-67    public utilities to obtain water supplies from sources other than
36-68    groundwater, the district shall grant an exemption or other relief
36-69    from ad valorem taxes on property served by a retail public utility
 37-1    based on (i) the percentage of potable water supplied within the
 37-2    district by the retail public utility from sources other than
 37-3    groundwater compared to the total water supplied by the retail
 37-4    public utility for the preceding year and (ii) the percentage of
 37-5    wastewater effluent produced by the retail public utility that is
 37-6    used as reclaimed water within the district compared to the total
 37-7    wastewater effluent produced by the retail public utility for the
 37-8    preceding year.  The  district may consider the impact of floods
 37-9    and equipment breakage on the retail public utility's ability to
37-10    supply water from sources other than groundwater.  The total amount
37-11    of the exemption or other relief from ad valorem taxes shall not
37-12    exceed one-half of the tax levied by the district.
37-13          SECTION 3.0114.  PROHIBITED ACTS.  The district may not:
37-14                (1)  impose an ad valorem property tax for
37-15    administrative, operation, or maintenance expenses that exceeds the
37-16    lesser of the rate approved by the majority of the qualified voters
37-17    voting in the election authorizing the tax, or three cents per $100
37-18    valuation;
37-19                (2)  require the owner of a well used solely for
37-20    domestic or livestock purposes to install a meter or measuring
37-21    device on the well; or
37-22                (3)  enter into any contract or engage in any action to
37-23    supply water to any person in the service area of any municipality
37-24    or retail public utility located in the district, except with the
37-25    consent of the municipality or retail public utility.
37-26          SECTION 3.0115.  VALIDATION.  An act or proceeding heretofore
37-27    taken by or on behalf of the district, as created and organized
37-28    under Chapter 1331, Acts of the 76th Legislature, Regular Session,
37-29    1999, is conclusively presumed, as of the date it occurred, to be
37-30    valid and to have occurred in accordance with all applicable laws,
37-31    and all actions are in all things validated, ratified, and
37-32    confirmed in all respects by this part.
37-33           PART 2.  CROSSROADS GROUNDWATER CONSERVATION DISTRICT
37-34          SECTION 3.0201.  RATIFICATION OF CREATION.  The creation by
37-35    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
37-36    of the Crossroads Groundwater Conservation District in Victoria
37-37    County is ratified as required by Section 15(a) of that chapter,
37-38    subject to approval at a confirmation election under Section 3.0207
37-39    of this part.  The district is a governmental agency and a body
37-40    politic and corporate.
37-41          SECTION 3.0202.  DEFINITIONS.  In this part:
37-42                (1)  "District" means the Crossroads Groundwater
37-43    Conservation District.
37-44                (2)  "Board" means the district's board of directors.
37-45          SECTION 3.0203.  LEGISLATIVE FINDINGS.  The legislature finds
37-46    that:
37-47                (1)  the organization of the district is feasible and
37-48    practicable;
37-49                (2)  all of the land to be included in, and the
37-50    residents of, the district will benefit from the creation of the
37-51    district;
37-52                (3)  there is a public necessity for the district; and
37-53                (4)  the creation of the district will provide a
37-54    benefit and utility to the public.
37-55          SECTION 3.0204.  BOUNDARIES.  The district is composed of all
37-56    the territory located within Victoria County.
37-57          SECTION 3.0205.  APPLICATION OF CHAPTER 36, WATER CODE;
37-58    GENERAL POWERS AND DUTIES.  Except to the extent of any conflict
37-59    with this part or as specifically limited by this part, the
37-60    district is governed by and subject to Chapter 36, Water Code, and
37-61    may exercise all of the powers contained in that chapter, including
37-62    the power to issue bonds and levy and collect taxes and the power
37-63    of eminent domain.  The district may exercise all of the duties
37-64    provided by Chapter 36, Water Code.
37-65          SECTION 3.0206.  TEMPORARY DIRECTORS.  (a)  On September 1,
37-66    2001, the following persons are designated as temporary directors
37-67    of the district:
37-68                (1)  Place 1:  Mark Dierlam
37-69                (2)  Place 2:  Rocky Sanders
 38-1                (3)  Place 3:  S. F. Ruschhaupt III
 38-2                (4)  Place 4:  Joseph Dial
 38-3                (5)  Place 5:  Stephen Diebel
 38-4                (6)  Place 6:  Jerry James
 38-5                (7)  Place 7:  Denise McCue
 38-6          (b)  If a temporary director fails to qualify for office or
 38-7    if a vacancy occurs in the office of temporary director for any
 38-8    reason, the Victoria County Commissioners Court shall appoint
 38-9    persons to fill vacancies in Places 1-4 and the city council of the
38-10    City of Victoria shall appoint persons to fill vacancies in Places
38-11    5-7.
38-12          (c)  The temporary directors shall select from their members
38-13    persons to serve as chairman, vice chairman, and secretary.
38-14          (d)  The temporary directors shall serve until they shall
38-15    have declared the district created, at which time they become the
38-16    initial directors of the district under Section 3.0208 of this
38-17    part.
38-18          (e)  To be qualified to serve as a temporary director, a
38-19    person must be a resident of Victoria County and at least 18 years
38-20    of age.
38-21          SECTION 3.0207.  CREATION ELECTION.  (a)  Not later than
38-22    October 1, 2001, and without the necessity of having a petition
38-23    presented, the temporary directors shall meet and call an election
38-24    to be held not later than January 1, 2002, within the boundaries of
38-25    the proposed district to approve the creation of the district.
38-26          (b)  Section 41.001(a), Election Code, does not apply to an
38-27    election called under this section.
38-28          (c)  The ballot for the election shall be printed to provide
38-29    for or against the following propositions:
38-30                (1)  the creation of the Crossroads Groundwater
38-31    Conservation District in Victoria County; and
38-32                (2)  the levy and collection of a property tax in the
38-33    district.
38-34          (d)  The temporary board may include other propositions on
38-35    the ballot that it considers necessary.
38-36          (e)  If a majority of votes cast at the election favor the
38-37    creation of the district, the temporary directors shall declare the
38-38    district created.  If a majority of the votes cast at the election
38-39    are against the creation of the district, the temporary directors
38-40    shall declare the district defeated.  The temporary directors shall
38-41    file a copy of the election results with the Texas Natural Resource
38-42    Conservation Commission.
38-43          (f)  If the creation of the district is defeated, further
38-44    elections may be called and held after the first anniversary of the
38-45    most recent creation election.  If the district is not created by
38-46    September 1, 2006, this part expires.
38-47          SECTION 3.0208.  INITIAL DIRECTORS.  (a)  On approval of the
38-48    creation of the district under Section 3.0207 of this part, the
38-49    temporary directors become the initial directors of the district
38-50    and serve on the board for terms as provided by Subsection (b) of
38-51    this section; provided that within 60 days after the creation of
38-52    the district, the Victoria County Commissioners Court may replace
38-53    any director in Places 1-4 and the city council of the City of
38-54    Victoria may replace any director in Places 5-7.
38-55          (b)  The persons serving as directors for Places 1, 3, 5, and
38-56    7 shall serve as directors for four years following the creation of
38-57    the district.  The persons serving as directors for Places 2, 4,
38-58    and 6 shall serve as directors for two years following the creation
38-59    of the district.
38-60          (c)  If, for any reason, an appointed director is not
38-61    qualified to take office at the first regular meeting of the board
38-62    following his or her appointment, the director for that place shall
38-63    continue to serve until a successor has qualified.
38-64          SECTION 3.0209.  BOARD OF DIRECTORS.  (a)  The board of
38-65    directors of the district is composed of seven members.
38-66          (b)  The directors shall select from their members persons to
38-67    serve as chairman, vice chairman, and secretary.
38-68          SECTION 3.0210.  QUALIFICATIONS OF BOARD MEMBERS.  To be
38-69    qualified for appointment as a director, a person must be a
 39-1    resident of the district and must be at least 18 years of age.
 39-2          SECTION 3.0211.  TERM OF OFFICE.  (a)  Except for the
 39-3    temporary and initial directors of the district, directors shall
 39-4    serve for terms of four years.
 39-5          (b)  Upon the expiration of the terms of directors or any
 39-6    vacancy during a term, the Victoria County Commissioners Court
 39-7    shall appoint persons to serve in Places 1-4 and the city council
 39-8    of the City of Victoria shall appoint persons to serve in Places
 39-9    5-7.
39-10          (c)  A vacancy in the office of director shall be filled by
39-11    appointment for the remainder of the term.
39-12          SECTION 3.0212.  LIMITATION ON TAXATION.  The district may
39-13    not impose an ad valorem tax at a rate that exceeds two cents on
39-14    the $100 valuation of taxable property in the district.
39-15           PART 3.  LONE WOLF GROUNDWATER CONSERVATION DISTRICT
39-16          SECTION 3.0301.  RATIFICATION OF CREATION.  The creation by
39-17    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
39-18    of the Lone Wolf Groundwater Conservation District in Mitchell
39-19    County is ratified as required by Section 15(a) of that chapter,
39-20    subject to approval at a confirmation election under Section 3.0307
39-21    of this part.
39-22          SECTION 3.0302.  DEFINITION.  In this part, "district" means
39-23    the Lone Wolf Groundwater Conservation District.
39-24          SECTION 3.0303.  GENERAL POWERS.  (a)  The district has all
39-25    of the rights, powers, privileges, authority, functions, and duties
39-26    provided by the general law of the state, including Chapter 36,
39-27    Water Code, applicable to groundwater conservation districts
39-28    created under Section 59, Article XVI, Texas Constitution.  This
39-29    part prevails over any provision of general law that is in conflict
39-30    or inconsistent with this part, including any provision of Chapter
39-31    1331, Acts of the 76th Legislature, Regular Session, 1999.
39-32          (b)  Notwithstanding Subsection (a) of this section, the
39-33    following provisions prevail over a conflicting or inconsistent
39-34    provision of this part:
39-35                (1)  Sections 36.1071-36.108, Water Code;
39-36                (2)  Sections 36.159-36.161, Water Code; and
39-37                (3)  Subchapter I, Chapter 36, Water Code.
39-38          SECTION 3.0304.  BOARD OF DIRECTORS.  (a)  The district is
39-39    governed by a board of five directors.
39-40          (b)  Temporary directors serve until initial directors are
39-41    elected under Section 3.0307 of this part.
39-42          (c)  Initial directors serve until permanent directors are
39-43    elected under Section 3.0308 of this part.
39-44          (d)  Permanent directors serve staggered four-year terms.
39-45          (e)  Each director must qualify to serve as director in the
39-46    manner provided by Section 36.055, Water Code.
39-47          (f)  A director serves until the director's successor has
39-48    qualified.
39-49          SECTION 3.0305.  COMPENSATION OF DIRECTORS.  A director is
39-50    not entitled to fees of office but is entitled to reimbursement of
39-51    actual expenses reasonably and necessarily incurred while engaging
39-52    in activities on behalf of the district.
39-53          SECTION 3.0306.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
39-54    PRECINCTS.  (a)  The directors of the district shall be elected
39-55    according to the commissioners precinct method as provided by this
39-56    section.
39-57          (b)  One director shall be elected by the voters of the
39-58    entire district, and one director shall be elected from each county
39-59    commissioners precinct by the voters of that precinct.
39-60          (c)  To be eligible to be a candidate for or to serve as
39-61    director at large, a person must be a registered voter in the
39-62    district.  To be eligible to be a candidate for or to serve as
39-63    director from a county commissioners precinct, a person must be a
39-64    registered voter of that precinct.
39-65          (d)  A person shall indicate on the application for a place
39-66    on the ballot:
39-67                (1)  the precinct that the person seeks to represent;
39-68    or
39-69                (2)  that the person seeks to represent the district at
 40-1    large.
 40-2          (e)  At the first election after the county commissioners
 40-3    precincts are redrawn under Section 18, Article V, Texas
 40-4    Constitution, four new directors shall be elected to represent the
 40-5    precincts.  The directors elected shall draw lots to determine
 40-6    which two directors serve two-year terms and which two directors
 40-7    serve four-year terms.
 40-8          SECTION 3.0307.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
 40-9    (a)  The temporary board of directors shall call and hold an
40-10    election to confirm establishment of the district and to elect
40-11    initial directors.
40-12          (b)  At the confirmation and initial directors election, the
40-13    temporary board of directors shall have placed on the ballot the
40-14    name of any candidate filing for an initial director position and
40-15    blank spaces to write in the names of other persons.  A temporary
40-16    director who is eligible to be a candidate under Section 3.0306 of
40-17    this part may file for an initial director position.
40-18          (c)  Section 41.001(a), Election Code, does not apply to a
40-19    confirmation and initial directors election held as provided by
40-20    this section.
40-21          (d)  Except as provided by this section, a confirmation and
40-22    initial directors election must be conducted as provided by Section
40-23    36.017(b)-(h), Water Code, and the Election Code.
40-24          SECTION 3.0308.  ELECTION OF DIRECTORS.  (a)  On the first
40-25    Saturday in May of the first even-numbered year after the year in
40-26    which the district is authorized to be created at a confirmation
40-27    election, an election shall be held in the district for the
40-28    election of three directors to serve four-year terms and two
40-29    directors to serve two-year terms.
40-30          (b)  On the first Saturday in May of each subsequent second
40-31    year following the election, the appropriate number of directors
40-32    shall be elected.
40-33          SECTION 3.0309.  LIMITATION ON TAXATION.  The district may
40-34    levy property taxes at a rate not to exceed 20 cents on each $100
40-35    of assessed valuation to pay any part of the bonds or notes issued
40-36    by the district if the authority to impose property taxes under
40-37    this part is approved by a majority of the voters voting at a
40-38    confirmation election under Section 3.0307 of this part or at a
40-39    separate election called for that purpose by the board of
40-40    directors.
40-41          SECTION 3.0310.  VALIDATION.  All past acts of the district
40-42    are validated and confirmed.
40-43          SECTION 3.0311.  APPLICABILITY.  Section 3.0310 of this part
40-44    does not apply to any matter that is the subject of litigation on
40-45    the effective date of this part.
40-46          SECTION 3.0312.  EXPIRATION.  If the creation of the district
40-47    is not confirmed at a confirmation election held under Section
40-48    3.0307 of this part before September 1, 2003, the district is
40-49    dissolved and this part expires on that date.
40-50           PART 4.  LOST PINES GROUNDWATER CONSERVATION DISTRICT
40-51          SECTION 3.0401.  RATIFICATION OF CREATION.  The creation by
40-52    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
40-53    of the Lost Pines Groundwater Conservation District in Bastrop and
40-54    Lee counties is ratified as required by Section 15(a) of that
40-55    chapter, subject to approval at a confirmation election under
40-56    Section 3.0407 of this part.
40-57          SECTION 3.0402.  DEFINITIONS.  In this part:
40-58                (1)  "District" means the Lost Pines Groundwater
40-59    Conservation District.
40-60                (2)  "Public utility" means any person, corporation,
40-61    public utility, water supply or sewer service corporation,
40-62    municipality, political subdivision, or agency operating,
40-63    maintaining, or controlling facilities in the state for providing
40-64    potable water service for compensation.
40-65          SECTION 3.0403.  BOUNDARIES.  The boundaries of the district
40-66    are coextensive with the boundaries of Bastrop and Lee counties,
40-67    Texas.
40-68          SECTION 3.0404.  POWERS.  (a)  The district has all of the
40-69    rights, powers, privileges, authority, functions, and duties
 41-1    provided by the general law of the state, including Chapter 36,
 41-2    Water Code, applicable to groundwater conservation districts
 41-3    created under Section 59, Article XVI, Texas Constitution.  This
 41-4    part prevails over any provision of general law that is in conflict
 41-5    or inconsistent with this part, including any provision of Chapter
 41-6    1331, Acts of the 76th Legislature, Regular Session, 1999.
 41-7          (b)  Notwithstanding Subsection (a) of this section, the
 41-8    following provisions prevail over a conflicting or inconsistent
 41-9    provision of this part:
41-10                (1)  Sections 36.1071-36.108, Water Code;
41-11                (2)  Sections 36.159-36.161, Water Code; and
41-12                (3)  Subchapter I, Chapter 36, Water Code.
41-13          (c)  The district may not impose a tax.  The district may
41-14    assess  regulatory pumping fees for water produced in or exported
41-15    from the district.  The regulatory pumping fees the district
41-16    assesses for water for crop or livestock production or other
41-17    agricultural uses may not exceed 20 percent of the rate applied to
41-18    water for municipal uses.  Regulatory pumping fees based on the
41-19    amount of water withdrawn from a well may not exceed:
41-20                (1)  $1 per acre-foot for water used for the purpose of
41-21    irrigating agricultural crops; or
41-22                (2)  17 cents per thousand gallons for water used for
41-23    any other purpose.
41-24          (d)  The district may adopt a rule exempting a well that is
41-25    not capable of producing more than 50,000 gallons of groundwater a
41-26    day from a permit requirement, a fee, or a restriction on
41-27    production.
41-28          SECTION 3.0405.  GROUNDWATER WELLS UNDER JURISDICTION OF
41-29    RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
41-30    within the district under permits issued by the Railroad Commission
41-31    of Texas are under the exclusive jurisdiction of the commission and
41-32    are exempt from regulation by the district.
41-33          (b)  Groundwater produced in an amount authorized by a
41-34    railroad commission permit may be used within or exported from the
41-35    district without obtaining a permit from the district.
41-36          (c)  To the extent groundwater production exceeds railroad
41-37    commission authorization, the holder of the commission permit shall
41-38    apply to the district for appropriate permits for the excess
41-39    production and shall be subject to the applicable regulatory fees.
41-40          (d)  Groundwater produced from wells under the jurisdiction
41-41    of the railroad commission is generally exempt from water district
41-42    fees.  However, the district may impose either a pumping fee or an
41-43    export fee on groundwater produced from an otherwise exempt mine
41-44    well that is used for municipal purposes or by a public utility.
41-45    Any fee imposed by the district under this subsection may not
41-46    exceed the fee imposed on other groundwater producers in the
41-47    district.
41-48          SECTION 3.0406.  BOARD OF DIRECTORS.  (a)  The district is
41-49    governed by a board of 10 directors.
41-50          (b)  Five directors shall be appointed from Bastrop County by
41-51    the county judge of Bastrop County and five directors shall be
41-52    appointed from Lee County by the county judge of Lee County.
41-53          (c)  Temporary directors serve until their successors are
41-54    appointed and have qualified.
41-55          (d)  The temporary directors shall draw lots to determine:
41-56                (1)  which three directors from each county will serve
41-57    four-year terms that expire December 31, 2005; and
41-58                (2)  which two directors from each county will serve
41-59    two-year terms that expire December 31, 2003.
41-60          (e)  In each subsequent second year following the initial
41-61    appointment of directors, the appropriate number of directors shall
41-62    be appointed.
41-63          (f)  Except as provided by Subsection (d) of this section,
41-64    directors serve staggered four-year terms.
41-65          (g)  Directors may serve consecutive terms.
41-66          (h)  Each director must qualify to serve as director in the
41-67    manner provided by Section 36.055, Water Code.
41-68          (i)  A director serves until the director's successor has
41-69    qualified.
 42-1          (j)  If a vacancy occurs on the board of directors, the board
 42-2    may appoint a director to serve the remainder of the term.
 42-3          (k)  A director may receive fees of office as provided by
 42-4    Section 36.060, Water Code, and is entitled to reimbursement for
 42-5    reasonable actual expenses incurred in performing duties as a
 42-6    director.
 42-7          SECTION 3.0407.  INITIAL MEETING AND CONFIRMATION ELECTION.
 42-8    (a)  As soon as practicable after September 1, 2001, the temporary
 42-9    board of directors shall meet to set the date for and call the
42-10    confirmation election.  The directors shall hold the meeting in
42-11    conjunction with the regularly scheduled meeting of the directors.
42-12          (b)  The election shall be held on the authorized election
42-13    date in November if the United States Department of Justice has
42-14    precleared this part by that time.  If this part has not been
42-15    precleared by the November election date, the confirmation election
42-16    shall be held at the next authorized election date.  The district
42-17    shall contract with the county clerks of Bastrop and Lee counties
42-18    to conduct the election.
42-19          (c)  Except as provided by this section, the confirmation
42-20    election must be conducted as provided by Sections 36.017 and
42-21    36.018, Water Code, and the Election Code.
42-22          (d)  If a majority of the votes cast at an election held
42-23    under this section is against the confirmation of the district, the
42-24    temporary directors may not call another election under this
42-25    section before the first anniversary of that election.
42-26          SECTION 3.0408.  STATUTORY INTERPRETATION.  Except as
42-27    otherwise provided by this part, if there is a conflict between
42-28    this part and Chapter 36, Water Code, this part controls.
42-29          SECTION 3.0409.  REGIONAL COOPERATION.  The district shall:
42-30                (1)  adopt a management plan detailing proposed efforts
42-31    of the district to cooperate with other groundwater conservation
42-32    districts;
42-33                (2)  participate as needed in coordination meetings
42-34    with adjacent groundwater conservation districts that share one or
42-35    more aquifers with the district;
42-36                (3)  coordinate the collection of data with adjacent
42-37    groundwater conservation districts in such a way as to achieve
42-38    relative uniformity of data type and quality;
42-39                (4)  provide groundwater level information to adjacent
42-40    groundwater conservation districts;
42-41                (5)  investigate any groundwater pollution to identify
42-42    the pollution's source;
42-43                (6)  notify adjacent groundwater conservation districts
42-44    and all appropriate agencies of any groundwater pollution detected
42-45    and the source of pollution identified;
42-46                (7)  provide to adjacent groundwater conservation
42-47    districts annually an inventory of water wells in the district and
42-48    an estimate of groundwater production within the district; and
42-49                (8)  include adjacent groundwater conservation
42-50    districts on mailing lists for district newsletters and information
42-51    regarding seminars, public education events, news articles, and
42-52    field days.
42-53          SECTION 3.0410.  EXPIRATION.  If the creation of this
42-54    district is not confirmed at a confirmation election held under
42-55    Section 3.0407 of this part before September 1, 2005, this part
42-56    expires on that date.
42-57            PART 5.  MCMULLEN GROUNDWATER CONSERVATION DISTRICT
42-58          SECTION 3.0501.  RATIFICATION OF CREATION.  The creation by
42-59    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
42-60    of the McMullen Groundwater Conservation District in McMullen
42-61    County is ratified as required by Section 15(a) of that chapter,
42-62    subject to approval at a confirmation election under Section 3.0507
42-63    of this part.
42-64          SECTION 3.0502.  DEFINITION.  In this part, "district" means
42-65    the McMullen Groundwater Conservation District.
42-66          SECTION 3.0503.  BOUNDARIES.  The boundaries of the district
42-67    are coextensive with the boundaries of McMullen County.
42-68          SECTION 3.0504.  GENERAL POWERS.  (a)  The district has all
42-69    of the rights, powers, privileges, authority, functions, and duties
 43-1    provided by the general law of the state, including Chapter 36,
 43-2    Water Code, applicable to groundwater conservation districts
 43-3    created under Section 59, Article XVI, Texas Constitution.  This
 43-4    part prevails over any provision of general law that is in conflict
 43-5    or inconsistent with this part, including any provision of Chapter
 43-6    1331, Acts of the 76th Legislature, Regular Session, 1999.
 43-7          (b)  The rights, powers, privileges, authority, functions,
 43-8    and duties of the district are subject to the continuing right of
 43-9    supervision of the state to be exercised by and through the Texas
43-10    Natural Resource Conservation Commission.
43-11          (c)  Notwithstanding Subsection (a) of this section, the
43-12    following provisions prevail over a conflicting or inconsistent
43-13    provision in this part:
43-14                (1)  Sections 36.1071-36.108, Water Code;
43-15                (2)  Sections 36.159-36.161, Water Code; and
43-16                (3)  Subchapter I, Chapter 36, Water Code.
43-17          SECTION 3.0505.  BOARD OF DIRECTORS.  (a)  The district is
43-18    governed by a board of five directors.
43-19          (b)  Temporary directors serve until initial directors are
43-20    elected under Section 3.0507 of this part.
43-21          (c)  Initial directors serve until permanent directors are
43-22    elected under Section 3.0508 of this part.
43-23          (d)  Permanent directors serve staggered four-year terms.
43-24          (e)  Each director must qualify to serve as director in the
43-25    manner provided by Section 36.055, Water Code.
43-26          (f)  A person is not eligible to serve as an initial or
43-27    permanent director unless the person owns land in the district.
43-28          (g)  A director serves until the director's successor has
43-29    qualified.
43-30          (h)  If there is a vacancy on the board, the remaining
43-31    directors shall appoint a director to serve the remainder of the
43-32    term.
43-33          SECTION 3.0506.  METHOD OF ELECTING DIRECTORS.  (a)  The
43-34    directors of the district shall be elected according to the
43-35    commissioners precinct method as provided by this section.
43-36          (b)  One director shall be elected by the voters of the
43-37    entire district and one director shall be elected from each county
43-38    commissioners precinct by the voters of that precinct.
43-39          (c)  To be qualified as a candidate for or to serve as
43-40    director at large, a person must be a registered voter in the
43-41    district.  To be a candidate for or to serve as director from a
43-42    county commissioners precinct, a person must be a registered voter
43-43    of that precinct.
43-44          (d)  A person shall indicate on the application for a place
43-45    on the ballot:
43-46                (1)  the precinct that the person seeks to represent;
43-47    or
43-48                (2)  that the person seeks to represent the district at
43-49    large.
43-50          (e)  At the first election after the county commissioners
43-51    precincts are redrawn under Section 18, Article V, Texas
43-52    Constitution, four new directors shall be elected to represent the
43-53    newly redrawn precincts.  The directors elected shall draw lots to
43-54    determine which two newly elected directors serve two-year terms
43-55    and which two directors serve four-year terms.
43-56          SECTION 3.0507.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
43-57    (a)  The temporary board of directors shall call and hold an
43-58    election to confirm establishment of the district and to elect
43-59    initial directors.
43-60          (b)  At the confirmation and initial directors election, the
43-61    temporary board of directors shall have placed on the ballot the
43-62    names of the persons serving as temporary directors who intend to
43-63    run for an initial director position and are qualified to be a
43-64    candidate under Section 3.0506 of this part together with the name
43-65    of any candidate filing for an initial director position and blank
43-66    spaces to write in the names of other persons.
43-67          (c)  If the district is created at the election, the
43-68    temporary board of directors, at the time the vote is canvassed,
43-69    shall:
 44-1                (1)  declare the qualified person who receives the most
 44-2    votes for each position to be elected as the initial director for
 44-3    that position; and
 44-4                (2)  include the results of the initial directors
 44-5    election in the district's election report to the Texas Natural
 44-6    Resource Conservation Commission.
 44-7          (d)  Section 41.001(a), Election Code, does not apply to a
 44-8    confirmation and initial directors election held as provided by
 44-9    this section.
44-10          (e)  Except as provided by this section, a confirmation and
44-11    initial directors election must be conducted as provided by
44-12    Sections 36.017(b)-(h), Water Code, and the Election Code.
44-13          (f)  If a majority of the votes cast at an election held
44-14    under this section is against the confirmation of the district, the
44-15    temporary directors may not call another election under this
44-16    section before the first anniversary of that election.
44-17          SECTION 3.0508.  ELECTION OF PERMANENT DIRECTORS.  (a)  On
44-18    the first Saturday in October of the second year after the year in
44-19    which the district is authorized to be created at a confirmation
44-20    election, an election shall be held in the district for the
44-21    election of directors from county commissioners precincts one and
44-22    three, each of whom serves a two-year term, and directors from
44-23    county commissioners precincts two and four and the director at
44-24    large, each of whom serves a four-year term.
44-25          (b)  On the first Saturday in October of each subsequent
44-26    second year following the election, the appropriate number of
44-27    directors shall be elected to the board, each of whom serves a
44-28    four-year term.
44-29          SECTION 3.0509.  LIMITATION ON TAXATION.  The district may
44-30    not impose an ad valorem tax at a rate that exceeds five cents on
44-31    the $100 valuation of taxable property in the district.
44-32          SECTION 3.0510.  STATUTORY INTERPRETATION.  Except as
44-33    otherwise provided by this part, if there is a conflict between
44-34    this part and Chapter 36, Water Code, this part controls.
44-35          SECTION 3.0511.  EXPIRATION.  If the creation of the district
44-36    is not confirmed at a confirmation election held under Section
44-37    3.0507 of this part before September 1, 2003, this part expires on
44-38    that date.
44-39          PART 6.  MIDDLE PECOS GROUNDWATER CONSERVATION DISTRICT
44-40          SECTION 3.0601.  RATIFICATION OF CREATION.  The creation by
44-41    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
44-42    of the Middle Pecos Groundwater Conservation District in Pecos
44-43    County is ratified, as required by Section 15(a) of that chapter,
44-44    subject to approval at a confirmation election under Section 3.0607
44-45    of this part.
44-46          SECTION 3.0602.  DEFINITION.  In this part, "district" means
44-47    the Middle Pecos Groundwater Conservation District.
44-48          SECTION 3.0603.  BOUNDARIES.  The boundaries of the district
44-49    are coextensive with the boundaries of Pecos County.
44-50          SECTION 3.0604.  GENERAL POWERS.  (a)  The district has all
44-51    of the rights, powers, privileges, authority, functions, and duties
44-52    provided by the general law of this state, including Chapter 36,
44-53    Water Code, applicable to groundwater conservation districts
44-54    created under Section 59, Article XVI, Texas Constitution.  This
44-55    part prevails over any provision of general law that is in conflict
44-56    or inconsistent with this part, including any provision of Chapter
44-57    1331, Acts of the 76th Legislature, Regular Session, 1999.
44-58          (b)  Notwithstanding Subsection (a) of this section, the
44-59    following provisions prevail over a conflicting or inconsistent
44-60    provision of this part:
44-61                (1)  Sections 36.1071-36.108, Water Code;
44-62                (2)  Sections 36.159-36.161, Water Code; and
44-63                (3)  Subchapter I, Chapter 36, Water Code.
44-64          (c)  Section 36.121, Water Code, does not apply to the
44-65    district.
44-66          (d)  The rights, powers, privileges, authority, functions,
44-67    and duties of the district are not subject to the continuing right
44-68    of supervision of the state through the Texas Natural Resource
44-69    Conservation Commission.
 45-1          SECTION 3.0605.  BOARD OF DIRECTORS.  (a)  The district is
 45-2    governed by a board of 11 directors.
 45-3          (b)  Temporary directors serve until initial directors are
 45-4    elected under Section 3.0607 of this part.
 45-5          (c)  Initial directors serve until permanent directors are
 45-6    elected under Section 3.0608 of this part.
 45-7          (d)  Permanent directors serve staggered four-year terms.
 45-8          (e)  Each director must qualify to serve as director in the
 45-9    manner provided by Section 36.055, Water Code.
45-10          (f)  A director serves until the director's successor has
45-11    qualified.
45-12          (g)  If there is a vacancy on the board, the remaining
45-13    directors shall appoint a director to serve the remainder of the
45-14    term.  If at any time there are fewer than three qualified
45-15    directors, the Pecos County Commissioners Court shall appoint the
45-16    necessary number of persons to fill all the vacancies on the board.
45-17          (h)  A director may not receive a salary or other
45-18    compensation for service as a director but may be reimbursed for
45-19    actual expenses of attending meetings at the rate in effect for
45-20    employees of Pecos County.
45-21          SECTION 3.0606.  METHOD OF ELECTING DIRECTORS.  (a)  The
45-22    directors of the district shall be elected according to the method
45-23    provided by this section.
45-24          (b)  One director shall be elected by the qualified voters of
45-25    the entire district, two directors shall be elected from each
45-26    county commissioners precinct by the qualified voters of that
45-27    precinct, one director shall be elected from the city of Iraan by
45-28    the qualified voters of that city, and one director shall be
45-29    elected from the city of Fort Stockton by the qualified voters of
45-30    that city.
45-31          (c)  To be qualified to be a candidate for or to serve as a
45-32    director at large, a person must be a registered voter in the
45-33    district.  To be a candidate for or to serve as director from a
45-34    county commissioners precinct or a city, a person must be a
45-35    registered voter of that precinct or city, as applicable.
45-36          (d)  A person shall indicate on the application for a place
45-37    on the ballot:
45-38                (1)  the precinct or city that the person seeks to
45-39    represent; or
45-40                (2)  that the person seeks to represent the district at
45-41    large.
45-42          (e)  At the first election after the county commissioners
45-43    precincts are redrawn under Section 18, Article V, Texas
45-44    Constitution, eight new directors shall be elected to represent the
45-45    precincts.  The directors elected shall draw lots to determine
45-46    which four directors serve two-year terms and which four directors
45-47    serve four-year terms.
45-48          SECTION 3.0607.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
45-49    (a)  The temporary board of directors shall call and hold an
45-50    election to confirm establishment of the district and to elect
45-51    initial directors.
45-52          (b)  At the confirmation and initial directors election, the
45-53    temporary board of directors shall have placed on the ballot the
45-54    name of any candidate filing for an initial director position and
45-55    blank spaces to write in the names of other persons.  A temporary
45-56    director who is qualified to be a candidate under Sections 3.0605
45-57    and 3.0606 of this part may file for an initial director position.
45-58          (c)  Section 41.001(a), Election Code, does not apply to a
45-59    confirmation and initial directors election held as provided by
45-60    this section.
45-61          (d)  Except as provided by this section, a confirmation and
45-62    initial directors election must be conducted as provided by
45-63    Sections 36.017(b)-(h), Water Code, and the Election Code.
45-64          (e)  The elected initial directors shall draw lots to
45-65    determine their terms.  One director from each county commissioners
45-66    precinct and the director from the district at large serve terms
45-67    that expire on the date of the first election held under Section
45-68    3.0608 of this part.  The remaining directors serve terms that
45-69    expire on the date of the second election held under Section 3.0608
 46-1    of this part.
 46-2          (f)  If the majority of the votes cast at an election held
 46-3    under this section is against the confirmation of the district, the
 46-4    temporary directors may call another election under this section
 46-5    not later than August 31, 2003.
 46-6          SECTION 3.0608.  ELECTION OF DIRECTORS.  On the first
 46-7    Saturday in May of the first even-numbered year after the year in
 46-8    which the district is authorized to be created at a confirmation
 46-9    election and on the first Saturday in May of each subsequent second
46-10    year, an election shall be held in the district to elect the
46-11    appropriate number of directors.
46-12          SECTION 3.0609.  EXPIRATION.  If the creation of the district
46-13    is not confirmed at a confirmation election held under Section
46-14    3.0607 of this part before September 1, 2003, the district is
46-15    dissolved and this part expires on that date.
46-16           PART 7.  RED SANDS GROUNDWATER CONSERVATION DISTRICT
46-17          SECTION 3.0701.  RATIFICATION OF CREATION.  The creation by
46-18    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
46-19    of the Red Sands Groundwater Conservation District in Hidalgo
46-20    County is ratified as required by Section 15(a) of that chapter,
46-21    subject to approval at a confirmation election under Section 3.0708
46-22    of this part.
46-23          SECTION 3.0702.  DEFINITION.  In this part, "district" means
46-24    the Red Sands Groundwater Conservation District.
46-25          SECTION 3.0703.  BOUNDARIES.  The district includes all of
46-26    the territory contained in the following described area:
46-27    A 19,232 acre tract more or less out of San Salvador Del Tule Grant
46-28    as recorded in Volume 10, Page 58 of the Hidalgo County, Texas map
46-29    records and out of the Santa Anita Grant as recorded in Volume 7,
46-30    Page 38 of the Hidalgo County, Texas map records.
46-31    Commencing at the Southeast Corner of this here in described
46-32    boundary tract, said point being the intersection of the centerline
46-33    of U.S. Highway 281 and the centerline of Farm to Market Road
46-34    number 490 (F.M. 490) (West Hargill Road) as shown in the map of
46-35    San Salvador Del Tule Grant as recorded in Volume 10, Page 58 of
46-36    the Hidalgo County map records.  Said point is also the point of
46-37    beginning.
46-38    Thence, Westerly along the center line of the F.M. 490, an
46-39    approximate distance of 18,400 feet to a point on the West line of
46-40    San Salvador Del Tule Grant, said point also being the intersection
46-41    of the centerline of F.M. 490 and the West line of the San Salvador
46-42    Del Tule Grant,
46-43    Thence, Northerly along the West line of the San Salvador Del Tule
46-44    Grant and the East line of the Santa Anita Grant at an approximate
46-45    distance of 21,300 feet to a point, said point being an inside
46-46    corner of this herein described tract, and also being the Southeast
46-47    corner of Redland Vineyards Subdivision as recorded in Volume 4,
46-48    Page 51 of the Hidalgo County map records,
46-49    Thence, Westerly along the South line of the Redland Vineyards
46-50    Subdivision, an approximate distance of 4,238 feet to a point, said
46-51    point being an outside corner of this herein described tract, said
46-52    point also being the Southwest corner of the Redland Vineyard
46-53    Subdivision,
46-54    Thence, Northerly with the West line of Redland Vineyards
46-55    Subdivision, at approximately 4,590.50 feet past a point, said
46-56    point being the Northwest corner of Redland Vineyard Subdivision,
46-57    and the Southwest corner of Delbridge Subdivision as recorded in
46-58    Volume 5, Page 11, Hidalgo County map records, and continuing
46-59    Northerly along the West line of Delbridge Subdivision for an
46-60    approximate total distance of 6,646 feet to a point, said point
46-61    being an inside corner of this herein described tract, and also
46-62    being the Northwest corner of Delbridge Subdivision,
46-63    Thence, Westerly along the South line of a 196.37 acres tract,
46-64    known as the A.B. De Kock Tract, an approximate distance of 3,500
46-65    feet past the Southeast corner of share 4, out of the 8,374.70 acre
46-66    tract partition out of the Santa Anita Grant as recorded in Volume
46-67    7, Page 38, in the Hidalgo County map records and continuing
46-68    Westerly for an approximate total distance of 6,500 feet to a
46-69    point, said point being an outside corner of this herein described
 47-1    tract and also being the Southwest corner of share 4,
 47-2    Thence, Northerly along the West line of share 4, an approximate
 47-3    total distance of 19,143 feet to a point, said point being the
 47-4    Northwest corner of this herein described tracts and, the
 47-5    intersection of the West line of share 4 and the centerline of Farm
 47-6    to Market Road number 1017, (F.M. 1017)
 47-7    Thence, in a Southeasterly direction, with the Right-of-Way
 47-8    centerline of Farm to Market Road number 1017 (F.M. 1017) an
 47-9    approximate total distance of 27,800 feet to a point, said point
47-10    being the Northeast corner of this herein described tract, and also
47-11    being the intersection of the centerline of F.M. 1017 Right-of-Way
47-12    and the center line of the U.S. Highway 281 Right-Of-Way,
47-13    Thence, in a Southerly direction, with the centerline of U.S.
47-14    Highway 281 Right-Of-Way, an approximate distance of 7,500 feet
47-15    past Floral Road, and at approximate 21,700 feet past Red Gate Road
47-16    and at approximate 29,700 feet past Laguna Seca Road and for an
47-17    approximate total distance of 39,300 feet to the point of beginning
47-18    of this here in described tract, said tract contains 19,232 Acres,
47-19    More or Less.
47-20          SECTION 3.0704.  FINDINGS RELATIVE TO BOUNDARIES.  The
47-21    legislature finds that the boundaries and field notes of the
47-22    district form a closure.  A mistake in the field notes or in the
47-23    copying of the field notes in the legislative process does not
47-24    affect the organization, existence, or validity of the district,
47-25    the right of the district to levy and collect taxes, or the
47-26    legality or operation of the district or its governing body.
47-27          SECTION 3.0705.  GENERAL POWERS.  (a)  Except as provided by
47-28    this part, the district has all of the rights, powers, privileges,
47-29    authority, functions, and duties provided by the general law of the
47-30    state, including Chapter 36, Water Code, applicable to groundwater
47-31    conservation districts created under Section 59, Article XVI, Texas
47-32    Constitution.  This part prevails over any provision of general law
47-33    that is in conflict or inconsistent with this part, including any
47-34    provision of Chapter 1331, Acts of the 76th Legislature, Regular
47-35    Session, 1999.
47-36          (b)  The rights, powers, privileges, authority, functions,
47-37    and duties of the district are subject to the continuing right of
47-38    supervision of the state, to be exercised by and through the Texas
47-39    Natural Resource Conservation Commission.
47-40          (c)  Chapter 49, Water Code, does not apply to the district.
47-41          (d)  Notwithstanding Subsection (a) of this section, the
47-42    following provisions prevail over a conflicting or inconsistent
47-43    provision in this part:
47-44                (1)  Sections 36.1071-36.108, Water Code;
47-45                (2)  Sections 36.159-36.161, Water Code; and
47-46                (3)  Subchapter I, Chapter 36, Water Code.
47-47          SECTION 3.0706.  BOARD OF DIRECTORS.  (a)  The district is
47-48    governed by a board of five directors, each elected at large to one
47-49    of five numbered places.
47-50          (b)  To qualify to serve as a director for places one through
47-51    four, an individual must own real property in and reside in the
47-52    district.  An individual serving as a director for place five must
47-53    own real property in the district but is not required to reside in
47-54    the district.
47-55          (c)  Each director must qualify to serve as director in the
47-56    manner provided by Section 36.055, Water Code.
47-57          (d)  Permanent directors serve staggered three-year terms.
47-58          (e)  A director serves until the director's successor has
47-59    qualified.
47-60          (f)  A vacancy in the office of director shall be filled by
47-61    appointment of the board of directors until the next election of
47-62    directors, at which election a person shall be elected to fill the
47-63    position.  If the position is not scheduled to be filled at the
47-64    election, the person elected to fill the position shall serve only
47-65    for the remainder of the unexpired term.
47-66          (g)  An appointed director who is qualified to serve as a
47-67    director under Subsection (b) of this section is eligible to run
47-68    for election to the board of directors.
47-69          SECTION 3.0707.  TEMPORARY DIRECTORS.  (a)  The temporary
 48-1    board of directors is composed of:
 48-2                (1)  Lucas Hinojosa;
 48-3                (2)  Becky Guerra;
 48-4                (3)  Arcadio Guerra;
 48-5                (4)  Elizabeth Ann Sweet; and
 48-6                (5)  John Cozad.
 48-7          (b)  The temporary directors are not required to meet the
 48-8    eligibility requirements of permanent directors.
 48-9          (c)  Temporary directors serve until permanent directors are
48-10    elected at the confirmation election under Section 3.0708 of this
48-11    part.
48-12          SECTION 3.0708.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
48-13    (a)  The temporary board of directors shall call and hold an
48-14    election to confirm establishment of the district and to elect
48-15    initial directors.
48-16          (b)  At the confirmation and initial directors election, the
48-17    temporary board of directors shall have placed on the ballot the
48-18    names of the candidates for each of the five numbered positions and
48-19    blank spaces to write in the names of other persons.  Names on the
48-20    ballot may include persons serving as temporary directors who
48-21    intend to run for an initial director position together with the
48-22    name of any candidate filing for an initial director position.
48-23          (c)  If a majority of the votes cast at the election are in
48-24    favor of the creation of the district, the temporary board of
48-25    directors shall declare the district created.  If a majority of the
48-26    votes cast at the election are against the creation of the
48-27    district, the temporary board of directors shall declare the
48-28    district defeated.  The temporary board of directors shall file a
48-29    copy of the election results with the Texas Natural Resource
48-30    Conservation Commission.
48-31          (d)  If a majority of the votes cast at the election are
48-32    against the creation of the district, the temporary board of
48-33    directors may not call another election under this section before
48-34    the first anniversary of the date of the election.
48-35          (e)  If the creation of the district is confirmed at the
48-36    election, the temporary board of directors, at the time the vote is
48-37    canvassed, shall:
48-38                (1)  declare the qualified person who receives the most
48-39    votes for each position to be elected as the initial director for
48-40    that position; and
48-41                (2)  include the results of the initial directors
48-42    election in the district's election report to the Texas Natural
48-43    Resource Conservation Commission.
48-44          (f)  The initial directors shall draw lots to determine their
48-45    terms so that:
48-46                (1)  one director serves a one-year term that expires
48-47    on the anniversary of the date the initial directors were elected;
48-48                (2)  two directors serve two-year terms that expire on
48-49    the anniversary of the date the initial directors were elected; and
48-50                (3)  two directors serve three-year terms that expire
48-51    on the anniversary of the date the initial directors were elected.
48-52          (g)  Section 41.001(a), Election Code, does not apply to a
48-53    confirmation and initial directors election held as provided by
48-54    this section.
48-55          (h)  Except as provided by this section, a confirmation
48-56    election must be conducted as provided by Sections 36.017(b)-(h),
48-57    Water Code, and the Election Code.
48-58          SECTION 3.0709.  ELECTION OF PERMANENT DIRECTORS.  Beginning
48-59    in the first year after the year in which the district is
48-60    authorized to be created at a confirmation election, the board of
48-61    directors shall call an election to be held in the district on the
48-62    first Saturday of the month in which the initial directors were
48-63    elected under Section 3.0708 of this part and every year after that
48-64    date to elect the appropriate number of directors to the board.
48-65          SECTION 3.0710.  ELIGIBLE DISTRICT VOTERS.  (a)  Any person
48-66    qualified to vote under the Election Code who resides in the
48-67    district is eligible to vote in district elections.
48-68          (b)  Notwithstanding Subsection (a) of this section,
48-69    nonresidents of the district who own real property in the district
 49-1    are eligible to vote in district elections.
 49-2          SECTION 3.0711.  TAXATION AUTHORITY.  (a)  The board of
 49-3    directors shall impose taxes in accordance with the procedures
 49-4    under Subchapter G, Chapter 36, Water Code.
 49-5          (b)  Notwithstanding Section 36.201, Water Code, the board of
 49-6    directors may annually impose an ad valorem tax at a rate not to
 49-7    exceed two cents on each $100 of assessed valuation unless a higher
 49-8    rate is approved by a majority of the voters of the district voting
 49-9    at an election called and held for that purpose.
49-10          SECTION 3.0712.  TRANSPORTATION OF GROUNDWATER.  (a)  The
49-11    board of directors may adopt rules as provided by Section 36.122,
49-12    Water Code, requiring a permit to transport district groundwater
49-13    outside the district.  The board of directors shall authorize the
49-14    transportation of groundwater for use outside the district if the
49-15    board determines that the use is in the public interest.  The board
49-16    of directors may:
49-17                (1)  designate uses of water that are in the public
49-18    interest; and
49-19                (2)  establish criteria for permits issued under the
49-20    rules.
49-21          (b)  Transportation projects for the use of groundwater
49-22    outside the district that began before September 1, 2001, may
49-23    continue without a permit if the use of groundwater is on land
49-24    contiguous to the district's boundaries and is for domestic or
49-25    livestock purposes.
49-26          SECTION 3.0713.  EXPIRATION.  If the creation of the district
49-27    is not confirmed at a confirmation election held under Section
49-28    3.0708 of this part before September 1, 2003, this part expires on
49-29    that date.
49-30            PART 8.  REFUGIO GROUNDWATER CONSERVATION DISTRICT
49-31          SECTION 3.0801.  RATIFICATION OF CREATION.  The creation by
49-32    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
49-33    of the Refugio Groundwater Conservation District in Refugio County
49-34    is ratified, as required by Section 15(a) of that chapter, subject
49-35    to approval at a confirmation election under Section 3.0807 of this
49-36    part.
49-37          SECTION 3.0802.  DEFINITION.  In this part, "district" means
49-38    the Refugio Groundwater Conservation District.
49-39          SECTION 3.0803.  BOUNDARIES.  The boundaries of the district
49-40    are coextensive with the boundaries of Refugio County.
49-41          SECTION 3.0804.  GENERAL POWERS.  (a)  The district has all
49-42    of the rights, powers, privileges, authority, functions, and duties
49-43    provided by the general law of this state, including Chapter 36,
49-44    Water Code, applicable to groundwater conservation districts
49-45    created under Section 59, Article XVI, Texas Constitution.  This
49-46    part prevails over any provision of general law that is in conflict
49-47    or inconsistent with this part, including any provision of Chapter
49-48    1331, Acts of the 76th Legislature, Regular Session, 1999.
49-49          (b)  Notwithstanding Subsection (a) of this section, the
49-50    following provisions prevail over a conflicting or inconsistent
49-51    provision of this part:
49-52                (1)  Sections 36.1071-36.108, Water Code;
49-53                (2)  Sections 36.159-36.161, Water Code; and
49-54                (3)  Subchapter I, Chapter 36, Water Code.
49-55          SECTION 3.0805.  BOARD OF DIRECTORS.  (a)  The district is
49-56    governed by a board of five directors.
49-57          (b)  Temporary directors serve until initial directors are
49-58    elected under Section 3.0807 of this part.
49-59          (c)  Initial directors serve until permanent directors are
49-60    elected under Section 3.0808 of this part.
49-61          (d)  Permanent directors serve staggered four-year terms.
49-62          (e)  Each director must qualify to serve as director in the
49-63    manner provided by Section 36.055, Water Code.
49-64          (f)  A director serves until the director's successor has
49-65    qualified.
49-66          (g)  If a director fails to qualify for office or if there is
49-67    at any time a vacancy on the temporary board of directors, the
49-68    commissioners court shall appoint a person to fill the vacancy.
49-69          SECTION 3.0806.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
 50-1    PRECINCTS.  (a)  The directors of the district shall be elected
 50-2    according to the commissioners precinct method as provided by this
 50-3    section.
 50-4          (b)  One director shall be elected by the qualified voters of
 50-5    the entire district, and one director shall be elected from each
 50-6    county commissioners precinct by the qualified voters of that
 50-7    precinct.
 50-8          (c)  To be qualified to be a candidate for or to serve as
 50-9    director at large, a person must be a registered voter in the
50-10    district.  To be a candidate for or to serve as director from a
50-11    county commissioners precinct, a person must be a registered voter
50-12    of that precinct.
50-13          (d)  A person shall indicate on the application for a place
50-14    on the ballot:
50-15                (1)  the precinct that the person seeks to represent;
50-16    or
50-17                (2)  that the person seeks to represent the district at
50-18    large.
50-19          (e)  At the first election after the county commissioners
50-20    precincts are redrawn under Section 18, Article V, Texas
50-21    Constitution, four new directors shall be elected to represent the
50-22    precincts.  The directors elected shall draw lots to determine
50-23    which two directors serve two-year terms and which two directors
50-24    serve four-year terms.
50-25          SECTION 3.0807.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
50-26    (a)  The temporary board of directors shall call and hold an
50-27    election to confirm establishment of the district and to elect
50-28    initial directors.
50-29          (b)  At the confirmation and initial directors election, the
50-30    temporary board of directors shall have placed on the ballot the
50-31    name of any candidate filing for an initial director position and
50-32    blank spaces to write in the names of other persons.  A temporary
50-33    director who is qualified to be a candidate under Sections 3.505
50-34    and 3.506 of this part may file for an initial director position.
50-35          (c)  Section 41.001(a), Election Code, does not apply to a
50-36    confirmation and initial directors election held as provided by
50-37    this section.
50-38          (d)  Except as provided by this section, a confirmation and
50-39    initial directors election must be conducted as provided by
50-40    Sections 36.017(b)-(h), Water Code, and the Election Code.
50-41          SECTION 3.0808.  ELECTION OF DIRECTORS.  (a)  On the first
50-42    Saturday in May of the first even-numbered year after the year in
50-43    which the district is authorized to be created at a confirmation
50-44    election, an election shall be held in the district for the
50-45    election of three directors to serve four-year terms and two
50-46    directors to serve two-year terms.
50-47          (b)  On the first Saturday in May of each subsequent second
50-48    year following the election, the appropriate number of directors
50-49    shall be elected.
50-50          SECTION 3.0809.  EXPIRATION.  This part expires on
50-51    September 1, 2003, if, before that date, the establishment of the
50-52    district has not been confirmed at a confirmation election held
50-53    under Section 3.0807 of this part.
50-54       PART 9.  SOUTHEAST TRINITY GROUNDWATER CONSERVATION DISTRICT
50-55          SECTION 3.0901.  PURPOSE.  The purpose of this part is to
50-56    ratify the Southeast Trinity Groundwater Conservation District, a
50-57    locally controlled groundwater district, to protect, recharge, and
50-58    prevent the waste of groundwater and to control subsidence of water
50-59    from the groundwater reservoirs.
50-60          SECTION 3.0902.  RATIFICATION.  (a)  The Southeast Trinity
50-61    Groundwater Conservation District is ratified.
50-62          (b)  The district is a governmental agency and a body politic
50-63    and corporate.
50-64          (c)  The district is created and ratified under and is
50-65    essential to accomplish the purposes of Section 59, Article XVI,
50-66    Texas Constitution.
50-67          SECTION 3.0903.  BOUNDARIES.  The boundaries of the district
50-68    are:
50-69          BEGINNING at the point of intersection of the Bexar County -
 51-1    Comal County - Kendall County line:
 51-2          THENCE following the meanders of the Cibolo Creek, the Bexar
 51-3    County - Comal County line in an Easterly direction to the point of
 51-4    intersection with latitude 29  40':
 51-5          THENCE along 29  40' in a Southeasterly direction to the
 51-6    point of intersection with Farm to Market Road 3009:
 51-7          THENCE with the centerline of Farm to Market Road 3009 in a
 51-8    Southerly direction to the point of intersection with the
 51-9    centerline of Schoenthal Road:
51-10          THENCE with the centerline of Schoenthal Road in a
51-11    Northeasterly direction to the point of intersection with the
51-12    centerline of Farm to Market Road 1863:
51-13          THENCE with the centerline of Farm to Market Road 1863 in an
51-14    Easterly direction to the point of intersection with the centerline
51-15    of Mission Valley Road:
51-16          THENCE with the centerline of Mission Valley Road in a
51-17    Northeasterly direction to the point of intersection with the
51-18    centerline of State Highway 46;
51-19          THENCE with the centerline of State Highway 46 in a
51-20    Northwesterly direction to the point of intersection with the
51-21    centerline of Hueco Springs Loop Road:
51-22          THENCE with the centerline of Hueco Springs Loop Road in a
51-23    Northeasterly then Easterly direction to the point of intersection
51-24    with the centerline of River Road:
51-25          THENCE with the centerline of River Road in a Northeasterly
51-26    direction to the point of intersection with the Guadalupe River at
51-27    the First Crossing:
51-28          THENCE following the meanders of the Guadalupe River in a
51-29    Northerly direction to the point of intersection of the centerlines
51-30    of the Guadalupe River and Deep Creek:
51-31          (Note:  the next four paragraphs coincide with the Southern
51-32    boundary of Comal County Voters Precinct 18)
51-33          THENCE along the meanders of Deep Creek in a Northeasterly
51-34    direction to the point of intersection of the centerline of Deep
51-35    Creek and the South line of the G. F. Lawrence Survey No. 33,
51-36    Abstract No. 358:
51-37          THENCE with the South line of the G. F. Lawrence Survey No.
51-38    33, Abstract No. 358 in a Northeasterly, Southeasterly, and
51-39    Northeasterly direction to the point of intersection of the South
51-40    centerline of Farm to Market Road 306 being at approximately
51-41    Engineers Station 397+98.3:
51-42          THENCE with the centerline of Farm to Market Road 306 in a
51-43    Southeasterly direction to the point of intersection of the
51-44    centerlines of Farm to Market Road 306 and the William Pfeuffer
51-45    private ranch road:
51-46          THENCE with the approximate bearing N 69  E and approximate
51-47    distance 5,000 feet to an angle point in the Comal County - Hays
51-48    County Line:
51-49          THENCE with the Comal County - Hays County line in a
51-50    Northwesterly direction to the point of intersection of the Comal
51-51    County - Hays County line with the Comal County - Blanco County
51-52    line:
51-53          THENCE with the Comal County - Blanco County line in a
51-54    Southwesterly direction to the point of intersection of the Comal
51-55    County - Blanco County - Kendall County line, continuing with the
51-56    Comal County - Kendall County line in a Southwesterly direction to
51-57    point of intersection of the Kendall County - Comal County - Bexar
51-58    County line being the Point of Beginning.
51-59          SECTION 3.0904.  FINDINGS RELATIVE TO BOUNDARIES.  The
51-60    legislature finds that the boundaries and field notes of the
51-61    district form a closure.  A mistake in the field notes or in
51-62    copying the field notes in the legislative process does not affect
51-63    the organization, existence, or validity of the district, the right
51-64    of the district to levy and collect taxes, or the legality or
51-65    operation of the district or its governing body.
51-66          SECTION 3.0905.  DEFINITIONS.  In this part:
51-67                (1)  "District" means the Southeast Trinity Groundwater
51-68    Conservation District;
51-69                (2)  "Board" means the board of directors of the
 52-1    district; and
 52-2                (3)  "Commission" means the Texas Natural Resource
 52-3    Conservation Commission.
 52-4          SECTION 3.0906.  FINDING OF BENEFIT.  All of the land and
 52-5    other property included within the boundaries of the district will
 52-6    benefit from the works and projects that are to be accomplished by
 52-7    the district under powers conferred by Section 59, Article XVI,
 52-8    Texas Constitution.  The district is created to serve a public use
 52-9    and benefit.
52-10          SECTION 3.0907.  AUTHORITY OF DISTRICT.  (a)  Except as
52-11    provided by this section or otherwise by this part, the district
52-12    has the same permitting and general management powers as those
52-13    granted under Chapter 36, Water Code.
52-14          (b)  Chapter 49, Water Code, does not apply to the district.
52-15          (c)  The district has no regulatory jurisdiction over the
52-16    Edwards Aquifer or any surface water supply.
52-17          (d)  The board by rule may impose reasonable fees, including
52-18    fees for groundwater transported out of the district, on each
52-19    groundwater well in the district that is not exempt from regulation
52-20    by the district, based on the amount of water withdrawn from the
52-21    well.  The fees may be assessed annually, based on the size of
52-22    column pipe used in the wells, pump capacity, or actual,
52-23    authorized, or anticipated pumpage, to pay the maintenance and
52-24    operating expenses of the district's regulation of groundwater.
52-25          (e)  Section 36.205(c), Water Code, does not apply to the
52-26    district.
52-27          (f)  The district may assess an ad valorem property tax not
52-28    to exceed seven cents per $100 valuation for administrative,
52-29    operation, and maintenance expenses if approved by a majority of
52-30    the qualified voters voting in an election authorizing the tax.
52-31          (g)  Any district conservation fee paid by a retail public
52-32    utility to the district shall be:
52-33                (1)  collected by the retail public utility directly as
52-34    a regulatory fee from the customers of the utility and paid to the
52-35    district; and
52-36                (2)  shown as a separate line item on the customer's
52-37    bill.
52-38          (h)  Fees shall not be assessed for groundwater withdrawn
52-39    from the Edwards Aquifer.
52-40          (i)  The district shall determine which classes of wells are
52-41    exempt from permitting requirements.
52-42          (j)  The district may not require a permit for:
52-43                (1)  the drilling of or producing from a well either
52-44    drilled, completed, or equipped so that it is capable of producing
52-45    less than 10,000 gallons of water per day; or
52-46                (2)  the drilling of or alteration of the size of a
52-47    well or to restrict the production of a well if the water produced
52-48    or to be produced from the well is or will be used to supply the
52-49    domestic needs of five or fewer households in which a person who is
52-50    a member of each household is either the owner of the well, a
52-51    person related to the owner or to a member of the owner's household
52-52    within the second degree by consanguinity, or an employee of the
52-53    owner.
52-54          (k)  The district may construct according to, implement, and
52-55    maintain best management practices in the district and may engage
52-56    in and promote acceptance of best management practices through
52-57    education efforts sponsored by the district for the purposes of
52-58    water quality and water availability practices such as brush
52-59    management, recharge enhancement, water and silt detention and
52-60    retention structures, plugging of abandoned wells, and other
52-61    treatment measures for the conservation of groundwater resources.
52-62          SECTION 3.0908.  BOARD OF DIRECTORS.  (a)  The district is
52-63    governed by a board of five directors.
52-64          (b)  Temporary directors have been appointed by Comal County
52-65    Commissioners Court and will serve until initial directors are
52-66    elected under Section 3.0909 of this part.
52-67          (c)  The temporary directors are:
52-68                (1)  Cal Perrine;
52-69                (2)  Ernest T. Lee;
 53-1                (3)  Jill Sondeen;
 53-2                (4)  Larry Hull; and
 53-3                (5)  Stovy Bowlin.
 53-4          (d)  Initial directors will be elected at a confirmation
 53-5    election and will serve until permanent directors are elected under
 53-6    Section 3.0910 of this part.
 53-7          (e)  Permanent directors serve staggered four-year terms.
 53-8          (f)  The directors shall be elected from four precincts, and
 53-9    one director will represent the district at large.  No more than
53-10    two precincts may be in a single municipality.
53-11          (g)  A member of the board must reside in and be a registered
53-12    voter in the precinct from which the person is elected or appointed
53-13    if representing a precinct or must reside and be registered to vote
53-14    in the district if representing the district at large.
53-15          (h)  Directors may serve consecutive terms.
53-16          (i)  In an election for board members, a write-in vote may
53-17    not be counted unless the name written in appears on the list of
53-18    write-in candidates.  A declaration of write-in candidacy must be
53-19    filed not later than 5 p.m. of the 45th day before election day.
53-20          (j)  Vacancies in the office of director shall be filled by
53-21    appointment of the board.  If the vacant office is not scheduled
53-22    for election within the next two years at the time of the
53-23    appointment, the board shall order an election for the unexpired
53-24    term to be held as part of the next regularly scheduled directors
53-25    election.  The appointed director's term shall end on qualification
53-26    of the director elected at that election.
53-27          SECTION 3.0909.  CONFIRMATION ELECTION AND ELECTION OF
53-28    INITIAL DIRECTORS.  (a)  As soon as practicable after September 1,
53-29    2001, the temporary board of directors may set the date for, call,
53-30    and hold an election:
53-31                (1)  to confirm establishment of the district;
53-32                (2)  to elect five initial directors; and
53-33                (3)  for the authority to tax.
53-34          (b)  The election may be held on the first authorized
53-35    election date after the United States Department of Justice has
53-36    precleared this part.  The district shall contract with the county
53-37    clerk of Comal County to conduct the election.
53-38          (c)  The elected initial directors shall draw lots to
53-39    determine their terms so that:
53-40                (1)  two of the initial directors serve two-year terms
53-41    that expire on the uniform election date in November of the second
53-42    year after the date the initial directors were elected; and
53-43                (2)  the remaining three initial directors serve
53-44    four-year terms that expire on the uniform election date in
53-45    November of the fourth year after the year in which the initial
53-46    directors were elected.
53-47          (d)  Section 41.001(a), Election Code, does not apply to a
53-48    confirmation and directors election held as provided by this
53-49    section.
53-50          (e)  Except as provided by this section, a confirmation and
53-51    directors election must be conducted as provided by Sections
53-52    36.017(b)-(h), Water Code, and the Election Code.
53-53          (f)  The Comal County Commissioners Court shall pay the
53-54    expenses of conducting the confirmation and initial directors
53-55    election, subject to reimbursement from the district if the
53-56    establishment of the district is confirmed or from available
53-57    revenues, including funds allocated under Section 36.160, Water
53-58    Code, if the establishment of the district is defeated.
53-59          (g)  If the district is defeated, the temporary directors may
53-60    call and hold subsequent elections to confirm establishment of the
53-61    district.  A subsequent election may not be held earlier than the
53-62    first anniversary of the date on which the previous election was
53-63    held.  If the district has not been confirmed at an election held
53-64    under this section before the fourth anniversary of the effective
53-65    date of this part, the district is dissolved on that date, except
53-66    that any debts incurred shall be paid and the organization of the
53-67    district shall be maintained until all debts are paid.
53-68          SECTION 3.0910.  ELECTION OF REGULAR DIRECTORS.  (a)  On the
53-69    uniform election date in November of the second year after the year
 54-1    in which the initial directors were elected, an election shall be
 54-2    held in the district to elect two regular directors for the
 54-3    positions of the two initial directors serving two-year terms.
 54-4          (b)  On the uniform election date in November of each
 54-5    subsequent second year following the election held under Subsection
 54-6    (a) of this section, an election shall be held to elect the
 54-7    appropriate number of regular directors to the board.
 54-8          SECTION 3.0911.  COORDINATION.  The district may coordinate
 54-9    activities with other groundwater districts that regulate the
54-10    Trinity Aquifer for the purposes of conjunctively managing the
54-11    common resource.
54-12          SECTION 3.0912.  MODIFICATION OF DISTRICT.  The district may
54-13    be modified only under Subchapter J, Chapter 36, Water Code, and by
54-14    subsequent acts of the legislature.
54-15          SECTION 3.0913.  STATUTORY INTERPRETATION.  Except as
54-16    otherwise provided by this part, if there is a conflict between
54-17    this part and Chapter 36, Water Code, this part controls.
54-18            PART 10.  TEXANA GROUNDWATER CONSERVATION DISTRICT
54-19          SECTION 3.1001.  RATIFICATION OF CREATION.  The creation by
54-20    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
54-21    of the Texana Groundwater Conservation District in Jackson County
54-22    is ratified as required by Section 15(a) of that chapter, subject
54-23    to approval at a confirmation election under Section 3.1007 of this
54-24    part.
54-25          SECTION 3.1002.  DEFINITION.  In this part, "district" means
54-26    the Texana Groundwater Conservation District.
54-27          SECTION 3.1003.  BOUNDARIES.  The boundaries of the district
54-28    are coextensive with the boundaries of Jackson County.
54-29          SECTION 3.1004.  GENERAL POWERS.  (a)  The district has all
54-30    of the rights, powers, privileges, authority, functions, and duties
54-31    provided by the general law of the state, including Chapter 36,
54-32    Water Code, applicable to groundwater conservation districts
54-33    created under Section 59, Article XVI, Texas Constitution.  This
54-34    part prevails over any provision of general law that is in conflict
54-35    or inconsistent with this part, including any provision of Chapter
54-36    1331, Acts of the 76th Legislature, Regular Session, 1999.
54-37          (b)  Notwithstanding Subsection (a) of this section, the
54-38    following provisions prevail over a conflicting or inconsistent
54-39    provision of this part:
54-40                (1)  Sections 36.1071-36.108, Water Code;
54-41                (2)  Sections 36.159-36.161, Water Code; and
54-42                (3)  Subchapter I, Chapter 36, Water Code.
54-43          SECTION 3.1005.  BOARD OF DIRECTORS.  (a)  The district is
54-44    governed by a board of seven directors.
54-45          (b)  Temporary directors serve until initial directors are
54-46    elected under Section 3.1007 of this part.
54-47          (c)  Initial directors serve until permanent directors are
54-48    elected under Section 3.1008 of this part.
54-49          (d)  Permanent directors serve staggered four-year terms.
54-50          (e)  Each director must qualify to serve as director in the
54-51    manner provided by Section 36.055, Water Code.
54-52          (f)  A director serves until the director's successor has
54-53    qualified.
54-54          (g)  If there is a vacancy on the board, the remaining
54-55    directors shall appoint a director to serve the remainder of the
54-56    term.
54-57          (h)  A director may not receive a salary or other
54-58    compensation for service as a director but may be reimbursed for
54-59    actual expenses of attending meetings at the rate in effect for
54-60    employees of Jackson County.
54-61          SECTION 3.1006.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
54-62    PRECINCTS.  (a)  The directors of the district shall be elected
54-63    according to the commissioners precinct method as provided by this
54-64    section.
54-65          (b)  Three directors shall be elected by the electors of the
54-66    entire district, and one director shall be elected from each county
54-67    commissioners precinct by the electors of that precinct.
54-68          (c)  To be qualified to be a candidate for or to serve as a
54-69    director at large, a person must be a registered voter in the
 55-1    district.  To be a candidate for or to serve as director from a
 55-2    county commissioners precinct, a person must be a registered voter
 55-3    of that precinct.
 55-4          (d)  A person shall indicate on the application for a place
 55-5    on the ballot:
 55-6                (1)  the precinct that the person seeks to represent;
 55-7    or
 55-8                (2)  that the person seeks to represent the district at
 55-9    large.
55-10          (e)  At the first election after the county commissioners
55-11    precincts are redrawn under Section 18, Article V, Texas
55-12    Constitution, four new directors shall be elected to represent the
55-13    precincts.  The directors elected shall draw lots to determine
55-14    which two directors serve two-year terms and which two directors
55-15    serve four-year terms.
55-16          SECTION 3.1007.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
55-17    (a)  The temporary board of directors shall call and hold an
55-18    election to confirm establishment of the district and to elect
55-19    initial directors.
55-20          (b)  At the confirmation and initial directors election, the
55-21    temporary board of directors shall have placed on the ballot the
55-22    name of any candidate filing for an initial director position and
55-23    blank spaces to write in the names of other persons.  A temporary
55-24    director who is qualified to be a candidate under Sections 3.1005
55-25    and 3.1006 of this part may file for an initial director position.
55-26          (c)  Section 41.001(a), Election Code, does not apply to a
55-27    confirmation and initial directors election held as provided by
55-28    this section.
55-29          (d)  Except as provided by this section, a confirmation and
55-30    initial directors election must be conducted as provided by
55-31    Sections 36.017(b)-(h), Water Code, and the Election Code.
55-32          (e)  If the majority of the votes cast at an election held
55-33    under this section is against the confirmation of the district, the
55-34    temporary directors may not call another election under this
55-35    section before the first anniversary of that election.
55-36          SECTION 3.1008.  ELECTION OF DIRECTORS.  (a)  On the first
55-37    Saturday in May of the first even-numbered year after the year in
55-38    which the district is authorized to be created at a confirmation
55-39    election, an election shall be held in the district for the
55-40    election of two directors at large and two directors representing
55-41    precincts to serve four-year terms and one director at large and
55-42    two directors representing precincts to serve two-year terms.
55-43          (b)  On the first Saturday in May of each subsequent second
55-44    year following the election, the appropriate number of directors
55-45    shall be elected.
55-46          SECTION 3.1009.  LIMITATION ON TAXATION.  The district may
55-47    not levy or collect an ad valorem tax at a rate that exceeds two
55-48    cents on each $100 valuation of taxable property in the district.
55-49          SECTION 3.1010.  CONTRACTS WITH GOVERNMENT ENTITIES.
55-50    (a)  The district may contract with other government entities.
55-51          (b)  The district may contract with other governmental
55-52    entities, including river authorities located in the district, for
55-53    the performance of any or all district functions.  A river
55-54    authority with which the district contracts under this section may
55-55    perform district functions as provided by the contract.
55-56          PART 11.  TRI-COUNTY GROUNDWATER CONSERVATION DISTRICT
55-57          SECTION 3.1101.  RATIFICATION OF CREATION.  The creation by
55-58    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
55-59    of the Tri-County Groundwater Conservation District in Foard,
55-60    Hardeman, and Wilbarger counties is ratified as required by Section
55-61    15(a) of that chapter, subject to approval at a confirmation
55-62    election under Section 3.1107 of this part.
55-63          SECTION 3.1102.  DEFINITION.  In this part, "district" means
55-64    the Tri-County Groundwater Conservation District.
55-65          SECTION 3.1103.  BOUNDARIES.  The boundaries of the district
55-66    are coextensive with the boundaries of Foard, Hardeman, and
55-67    Wilbarger counties.
55-68          SECTION 3.1104.  GENERAL POWERS.  (a)  The district has all
55-69    of the rights, powers, privileges, authority, functions, and duties
 56-1    provided by the general law of the state, including Chapter 36,
 56-2    Water Code, applicable to groundwater conservation districts
 56-3    created under Section 59, Article XVI, Texas Constitution.  This
 56-4    part prevails over any provision of general law that is in conflict
 56-5    or inconsistent with this part, including any provision of Chapter
 56-6    1331, Acts of the 76th Legislature, Regular Session, 1999.
 56-7          (b)  Notwithstanding Subsection (a) of this section, the
 56-8    following provisions prevail over a conflicting or inconsistent
 56-9    provision of this part:
56-10                (1)  Sections 36.107-36.108, Water Code;
56-11                (2)  Sections 36.159-36.161, Water Code; and
56-12                (3)  Subchapter I, Chapter 36, Water Code.
56-13          SECTION 3.1105.  BOARD OF DIRECTORS.  (a)  The district is
56-14    governed by a board of six directors.  Two directors are appointed
56-15    by the commissioners court of each county in the district.
56-16          (b)  Each director must qualify to serve as director in the
56-17    manner provided by Section 36.055, Water Code.
56-18          (c)  Directors other than initial directors serve staggered
56-19    four-year terms.
56-20          (d)  A director serves until the director's successor has
56-21    qualified.
56-22          (e)  If there is a vacancy on the board, the appropriate
56-23    commissioners court shall appoint a director to serve the remainder
56-24    of the term.
56-25          (f)  The appropriate commissioners court shall appoint a
56-26    director to succeed a director on or before the date the director's
56-27    term expires.
56-28          (g)  A director may not receive a salary or other
56-29    compensation for service as a director but may be reimbursed for
56-30    actual expenses of attending meetings.
56-31          SECTION 3.1106.  APPOINTMENT AND TERMS OF INITIAL DIRECTORS.
56-32    (a)  As soon as practicable after September 1, 2001, the
56-33    commissioners courts of Foard, Hardeman, and Wilbarger counties
56-34    shall each appoint two initial directors.
56-35          (b)  The initial directors shall serve terms as follows:
56-36                (1)  the two initial directors appointed by the Foard
56-37    County Commissioners Court shall serve terms expiring February 1,
56-38    2002;
56-39                (2)  the two initial directors appointed by the
56-40    Hardeman County Commissioners Court shall serve terms expiring
56-41    February 1, 2004; and
56-42                (3)  the two initial directors appointed by the
56-43    Wilbarger County Commissioners Court shall serve terms expiring
56-44    February 1, 2006.
56-45          SECTION 3.1107.  CONFIRMATION ELECTION.  (a)  The board of
56-46    directors shall call and hold an election to confirm the
56-47    establishment of the district.
56-48          (b)  Section 41.001(a), Election Code, does not apply to a
56-49    confirmation election held as provided by this section.
56-50          (c)  Except as provided by this section, a confirmation
56-51    election must be conducted as provided by Sections 36.017(b)-(h),
56-52    Water Code, and the Election Code.
56-53          SECTION 3.1108.  TAXING AUTHORITY.  The district may levy and
56-54    collect an ad valorem tax in the district at a rate not to exceed
56-55    one cent on each $100 of assessed valuation.
56-56          SECTION 3.1109.  EXPIRATION.  If the creation of the district
56-57    is not confirmed at a confirmation election held under Section
56-58    3.1107 of this part before September 1, 2003, this part expires on
56-59    that date.
56-60                ARTICLE 4.  WATER INFRASTRUCTURE FINANCING
56-61          SECTION 4.01.  Chapter 15, Water Code, is amended by adding
56-62    Subchapter O to read as follows:
56-63                 SUBCHAPTER O.  WATER INFRASTRUCTURE FUND
56-64          Sec. 15.901.  DEFINITIONS.  In this subchapter:
56-65                (1)  "Eligible political subdivision" means:
56-66                      (A)  a municipality;
56-67                      (B)  a county;
56-68                      (C)  a river authority or special law district
56-69    that is listed in Section 9.010(b);
 57-1                      (D)  a water improvement district;
 57-2                      (E)  an irrigation district;
 57-3                      (F)  a water control and improvement district;
 57-4    and
 57-5                      (G)  a groundwater district with a groundwater
 57-6    management plan certified by the board under Section 36.1072.
 57-7                (2)  "Fund" means the water infrastructure fund.
 57-8                (3)  "Metropolitan statistical area" means an area so
 57-9    designated by the United States Office of Management and Budget.
57-10                (4)  "Political subdivision bonds" means bonds or other
57-11    obligations issued by a political subdivision to fund a project and
57-12    purchased by the board from money in the fund.
57-13                (5)  "Project" means any undertaking or work, including
57-14    planning and design activities and work to obtain regulatory
57-15    authority, to conserve, mitigate, convey, and develop water
57-16    resources of the state, including any undertaking or work done
57-17    outside the state that the board determines will result in water
57-18    being available for use in or for the benefit of the state.
57-19          Sec. 15.902.  FINDINGS.  The legislature finds that:
57-20                (1)  the creation of the fund and the administration of
57-21    the fund by the board will encourage the conservation and
57-22    development of the water resources of the state;
57-23                (2)  the use of the fund is in furtherance of the
57-24    public purpose of conserving and developing the water resources of
57-25    the state; and
57-26                (3)  the use of the fund for the purposes provided by
57-27    this subchapter is for the benefit of both the state and the
57-28    political subdivisions to which the board makes financial
57-29    assistance available in accordance with this subchapter and
57-30    constitutes a program under, and is in furtherance of the public
57-31    purposes set forth in, Section 52-a, Article III, Texas
57-32    Constitution.
57-33          Sec. 15.903.  WATER INFRASTRUCTURE FUND.  (a)  The water
57-34    infrastructure fund is created as a special account in the general
57-35    revenue fund to be administered by the board under this subchapter
57-36    and under rules adopted by the board.  The fund shall be available
57-37    to fund the implementation of water projects recommended through
57-38    the state and regional water planning processes under Sections
57-39    16.051 and 16.053.
57-40          (b)  The fund consists of:
57-41                (1)  appropriations from the legislature;
57-42                (2)  the water fee, as provided by Section 15.013;
57-43                (3)  any other fees or sources of revenue that the
57-44    legislature may dedicate for deposit to the fund;
57-45                (4)  repayments of loans made from the fund;
57-46                (5)  interest earned on money credited to the fund;
57-47                (6)  depository interest allocable to the fund in the
57-48    general revenue fund;
57-49                (7)  money from gifts, grants, or donations to the
57-50    fund;
57-51                (8)  money from revenue bonds or other sources
57-52    designated by the board; and
57-53                (9)  proceeds from the sale of any political
57-54    subdivision bonds or obligations held in the fund and not otherwise
57-55    pledged to the discharge, repayment, or redemption of revenue bonds
57-56    or other bonds, the proceeds of which were placed in the fund.
57-57          Sec. 15.904.  USE OF WATER INFRASTRUCTURE FUND.  (a)  The
57-58    board may use the fund:
57-59                (1)  to make loans to political subdivisions at or
57-60    below market interest rates for projects;
57-61                (2)  to make grants, low-interest loans, or zero
57-62    interest loans to political subdivisions for projects to serve
57-63    areas outside metropolitan statistical areas in order to ensure
57-64    that the projects are implemented, or for projects to serve
57-65    economically distressed areas;
57-66                (3)  to make loans at or below market interest rates
57-67    for planning and design costs, permitting costs, and other costs
57-68    associated with state or federal regulatory activities with respect
57-69    to a project;
 58-1                (4)  as a source of revenue or security for the payment
 58-2    of principal and interest on bonds issued by the board if the
 58-3    proceeds of the sale of the bonds will be deposited in the fund;
 58-4    and
 58-5                (5)  to pay the necessary and reasonable expenses of
 58-6    the board in administering the fund.
 58-7          (b)  Funding under Subsection (a)(2) or under Subsection
 58-8    (a)(3) may not exceed 10 percent of the amount of financial
 58-9    assistance budgeted by the board to be made available from the fund
58-10    in a fiscal year.
58-11          (c)  Principal and interest payments on loans made under
58-12    Subsection (a)(3) may be deferred for a maximum of 10 years or
58-13    until construction of the project is completed, whichever is
58-14    earlier.
58-15          Sec. 15.905.  APPROVAL OF APPLICATIONS.  (a)  On review and
58-16    recommendation by the executive administrator, the board by
58-17    resolution may approve an application if the board finds that:
58-18                (1)  the application and the assistance applied for
58-19    meet the requirements of this subchapter and board rules;
58-20                (2)  the revenue or taxes, or both the revenue and
58-21    taxes, pledged by the applicant will be sufficient to meet all the
58-22    obligations assumed by the political subdivision; and
58-23                (3)  the project will meet water needs in a manner
58-24    consistent with the state and regional water plans as required by
58-25    Section 16.053(j).
58-26          (b)  For an application under this subchapter, a program of
58-27    water conservation through a more effective use of water shall be
58-28    required in the same manner as for approval of an application for
58-29    financial assistance under Section 15.106.
58-30          (c)  The board may deliver funds for the portion of a loan or
58-31    grant for a project relating to surface water development, other
58-32    than for planning and design costs, permitting costs, and other
58-33    costs associated with federal and state regulatory activities with
58-34    respect to a project, only if the executive administrator makes a
58-35    written finding:
58-36                (1)  that the applicant proposing surface water
58-37    development has the necessary water rights authorizing it to
58-38    appropriate and use the water that the project will provide; or
58-39                (2)  that an applicant proposing groundwater
58-40    development has the right to use water that the project will
58-41    provide.
58-42          Sec. 15.906.  APPLICABLE PROVISIONS.  The provisions of
58-43    Subchapter E, Chapter 17, apply to financial assistance made
58-44    available from the fund; provided, however, that the board may also
58-45    execute contracts as necessary to evidence grant agreements.
58-46          Sec. 15.907.  RULES.  The board shall adopt rules necessary
58-47    to carry out this subchapter, including rules establishing
58-48    procedures for application for and for the award of financial
58-49    assistance, for the investment of funds, and for the administration
58-50    of the fund.
58-51          Sec. 15.908.  SALE OF POLITICAL SUBDIVISION BONDS.  (a)  The
58-52    board may sell or dispose of political subdivision bonds at the
58-53    price and under the terms that the board determines to be
58-54    reasonable.
58-55          (b)  The board may sell political subdivision bonds without
58-56    making a previous offer to the political subdivision that issued
58-57    the bonds and without advertising, soliciting, or receiving bids
58-58    for sale.
58-59          (c)  Notwithstanding other provisions of this chapter, the
58-60    board may sell to the Texas Water Resources Finance Authority any
58-61    political subdivision bonds purchased with money in the fund and
58-62    may apply the proceeds of a sale in the manner provided by this
58-63    section.
58-64          (d)  Proceeds from the sale of political subdivision bonds
58-65    under this section shall be deposited in the fund for use as
58-66    provided by Section 15.904.
58-67          (e)  As part of a sales agreement with the Texas Water
58-68    Resources Finance Authority, the board by contract may agree to
58-69    perform the functions required to ensure that the political
 59-1    subdivision pays the debt service on political subdivision bonds
 59-2    sold and observes the conditions and requirements stated in those
 59-3    bonds.
 59-4          (f)  The board may exercise any powers necessary to carry out
 59-5    the authority granted by this section, including the authority to
 59-6    contract with any person to accomplish the purposes of this
 59-7    section.
 59-8          Sec. 15.909.  FUNDING FOR LOCAL ECONOMIC DEVELOPMENT.
 59-9    (a)  The board may use the fund to provide financial assistance to
59-10    an eligible political subdivision to enable the political
59-11    subdivision to fund loans and grants for projects that develop and
59-12    diversify its local economy, consistent with the terms and
59-13    conditions set forth in a program adopted by the governing body of
59-14    the political subdivision under authority granted by Section
59-15    15.910.
59-16          (b)  The board may not purchase political subdivision bonds
59-17    issued for the purposes described by Subsection (a) that are
59-18    secured in whole or in part by a pledge of ad valorem taxes unless
59-19    the political subdivision submits evidence satisfactory to the
59-20    board that the issuance of the bonds has been approved by the
59-21    citizens of the political subdivision voting at an election held
59-22    for the purposes described in Section 15.910.
59-23          Sec. 15.910.  AUTHORITY TO ESTABLISH ECONOMIC DEVELOPMENT
59-24    PROGRAMS.  (a)  An eligible political subdivision may establish
59-25    economic development programs and make loans and grants of public
59-26    funds to assist in providing projects within the political
59-27    subdivision.  The authority granted to a political subdivision to
59-28    make loans and grants in accordance with this section constitutes a
59-29    program in furtherance of the public purposes provided by Section
59-30    52-a, Article III, Texas Constitution.
59-31          (b)  Financial assistance received from the fund may be used
59-32    by an eligible political subdivision to make loans or grants to
59-33    persons for projects that the political subdivision finds will
59-34    conserve and develop the water resources of the political
59-35    subdivision and assist in diversifying and developing the economy
59-36    of the political subdivision and the state.
59-37          (c)  In exercising the authority granted by this section, the
59-38    governing body of an eligible political subdivision may determine
59-39    the terms and conditions governing the loan or grant of money and
59-40    determine whether to approve an agreement with a person who
59-41    receives a loan or grant.
59-42          Sec. 15.911.  An eligible political subdivision may not sell
59-43    or incur obligations to fund an economic development program
59-44    established under authority granted by Section 15.910 that are
59-45    payable in whole or in part from ad valorem taxes unless the
59-46    residents of the political subdivision, voting at an election held
59-47    for the purpose, approve the issuance of obligations to fund an
59-48    economic development program for the provision of loans or grants
59-49    to persons to construct projects that will conserve and develop the
59-50    water resources of the political subdivision and assist in
59-51    developing and diversifying the local economy.
59-52          SECTION 4.02.  Chapter 15, Water Code, is amended by adding
59-53    Subchapter P to read as follows:
59-54                SUBCHAPTER P.  RURAL WATER ASSISTANCE FUND
59-55          Sec. 15.951.  PURPOSE.  The legislature finds that the rural
59-56    areas of the state, characterized by small populations extended
59-57    over disproportionately large service areas, require a means of
59-58    financing water projects in addition to those established by other
59-59    provisions of this chapter.
59-60          Sec. 15.952.  DEFINITIONS.  In this subchapter:
59-61                (1)  "Federal agency" means an agency or other entity
59-62    of the United States Department of Agriculture or an agency or
59-63    entity that is acting through or on behalf of that department.
59-64                (2)  "Fund" means the rural water assistance fund
59-65    established under this subchapter.
59-66                (3)  "Rural political subdivision" means:
59-67                      (A)  a nonprofit water supply or sewer service
59-68    corporation, district, or municipality with a service area of
59-69    10,000 or less in population or that otherwise qualifies for
 60-1    financing from a federal agency; or
 60-2                      (B)  a county in which no urban area exceeds
 60-3    50,000 in population.
 60-4                (4)  "State agency" means an agency or other entity of
 60-5    the state, including the Department of Agriculture and the Texas
 60-6    Department of Housing and Community Affairs and any agency or
 60-7    authority that is acting through or on behalf of the Department of
 60-8    Agriculture or the Texas Department of Housing and Community
 60-9    Affairs.
60-10          Sec. 15.953.  CREATION OF FUND.  The rural water assistance
60-11    fund is created as a special account in the general revenue fund.
60-12    The fund consists of:
60-13                (1)  money directly appropriated to the board;
60-14                (2)  repayment of principal and interest from loans
60-15    made from the fund not otherwise needed as a source of revenue
60-16    pursuant to Section 17.9615(b);
60-17                (3)  money transferred by the board from any and all
60-18    sources available; and
60-19                (4)  interest earned on the investment of money in the
60-20    fund and depository interest allocable to the fund in the general
60-21    revenue fund.
60-22          Sec. 15.954.  USE OF FUND.  (a)  The fund may be used to
60-23    provide low-interest loans to rural political subdivisions for
60-24    water or water-related projects, including the purchase of well
60-25    fields, the purchase or lease of rights to produce groundwater, and
60-26    interim financing of construction projects.
60-27          (b)  The fund may be used to enable a rural political
60-28    subdivision to obtain water supplied by larger political
60-29    subdivisions or to finance the consolidation or regionalizing of
60-30    neighboring political subdivisions, or both.
60-31          (c)  The fund may be used to finance an outreach and
60-32    technical assistance program to assist rural political subdivisions
60-33    in obtaining assistance through the fund.  The board may use money
60-34    in the fund to contract for such outreach and technical assistance.
60-35          (d)  The fund may be used to buy down interest rates on
60-36    loans.
60-37          (e)  A rural political subdivision may enter into an
60-38    agreement with a federal agency or a state agency to submit a joint
60-39    application for financial assistance under this subchapter.
60-40          (f)  A nonprofit water supply or sewer service corporation is
60-41    exempt from payment of any sales tax that may be incurred under
60-42    other law or ordinance for any project financed by the fund.
60-43          (g)  The fund may be used as a source of revenue for the
60-44    payment of principal and interest on water financial assistance
60-45    bonds issued by the board if the proceeds of the sale of these
60-46    bonds will be deposited into the rural water assistance fund.
60-47          Sec. 15.955.  FINANCIAL ASSISTANCE.  (a)  The board shall
60-48    adopt rules necessary to administer this subchapter, including
60-49    rules establishing procedures for the application for and award of
60-50    loans, the distribution of loans, the investment of funds, and the
60-51    administration of loans and the fund.
60-52          (b)  The board may not release from the fund money for the
60-53    construction phase of portions of projects proposing surface water
60-54    or groundwater development until the executive administrator makes
60-55    a written finding:
60-56                (1)  that a rural political subdivision proposing
60-57    surface water development has the necessary water right authorizing
60-58    it to appropriate and use the water that the project will provide;
60-59    or
60-60                (2)  that a rural political subdivision proposing
60-61    groundwater development has the right to use water that the project
60-62    will provide.
60-63          (c)  In passing on an application from a rural political
60-64    subdivision for financial assistance, the board shall consider:
60-65                (1)  the needs of the area to be served by the project,
60-66    the benefit of the project to the area, the relationship of the
60-67    project to the overall state water needs, and the relationship of
60-68    the project to the state water plan; and
60-69                (2)  the availability of revenue to the rural political
 61-1    subdivision from all sources for the ultimate repayment of the cost
 61-2    of the water supply project, including all interest.
 61-3          (d)  The board by resolution may approve an application if,
 61-4    after considering the factors listed in Subsection (c) and other
 61-5    relevant factors, the board finds:
 61-6                (1)  that the public interest is served by state
 61-7    assistance in the project; and
 61-8                (2)  that the revenue or taxes pledged by the rural
 61-9    political subdivision will be sufficient to meet all the
61-10    obligations assumed by the rural political subdivision during the
61-11    succeeding period of not more than 50 years.
61-12          (e)  A program of water conservation for the more efficient
61-13    use of water shall be required in the same manner as required for
61-14    approval of an application for financial assistance under Section
61-15    15.106.
61-16          (f)  Sections 17.183-17.187 apply to the construction of
61-17    projects funded pursuant to this subchapter.
61-18          SECTION 4.03.  Subchapter B, Chapter 15, Water Code, is
61-19    amended by adding Section 15.013 to read as follows:
61-20          Sec. 15.013.  WATER FEE.  (a)  Each county shall annually
61-21    remit to the comptroller for deposit to the water infrastructure
61-22    fund a water fee in an amount equal to one dollar per county
61-23    resident as determined by the most recent federal census.
61-24          (b)  A county may collect this fee from its residents in a
61-25    manner and in amounts determined by the county.
61-26          (c)  The commissioners court of a county may assess a
61-27    surcharge on the sale of bottled water in the county to recover the
61-28    fee.  The surcharge shall be collected at the point of retail sale
61-29    of bottled water and remitted to the county.  The commissioners
61-30    court may adopt regulations to collect the surcharge.  A violation
61-31    of a regulation adopted under this subsection is punishable as a
61-32    Class C misdemeanor.
61-33          SECTION 4.04.  Subsection (j), Section 5.235, Water Code, is
61-34    amended to read as follows:
61-35          (j)  The fee for other uses of water not specifically named
61-36    in this section is $1 per acre-foot, except that no political
61-37    subdivision may be required to pay fees to use water for recharge
61-38    of underground freshwater-bearing sands and aquifers or for
61-39    abatement of natural pollution.  This fee is waived for
61-40    applications for instream-use water rights deposited into the Texas
61-41    Water Trust.
61-42          SECTION 4.05.  Section 15.001, Water Code, is amended by
61-43    adding Subdivision (12) to read as follows:
61-44                (12)  "Regionalization" means development of a water
61-45    supply or wastewater collection and treatment system that
61-46    incorporates multiple service areas into an areawide service
61-47    facility or any such system that serves an area that includes more
61-48    than a single county, city, special district, or other political
61-49    subdivision of the state.
61-50          SECTION 4.06.  Subsection (a), Section 15.002, Water Code, is
61-51    amended to read as follows:
61-52          (a)  The legislature finds that it is in the public interest
61-53    and to the benefit of the general public of the state to encourage
61-54    and to assist in the planning and construction of projects to
61-55    develop and conserve the storm water and floodwater as well as the
61-56    ordinary flows of the rivers and streams of the state, to maintain
61-57    and enhance the quality of the water of the state, to provide
61-58    protection to the state's citizens from the floodwater of the
61-59    rivers and streams of the state, to provide drainage, subsidence
61-60    control, public beach nourishment, recharge, chloride control,
61-61    brush control, weather modification, regionalization, and
61-62    desalination [desalinization], to provide for the management of
61-63    aquatic vegetation, and other purposes as provided by law or board
61-64    rule.
61-65          SECTION 4.07.  Subsection (b), Section 15.011, Water Code, is
61-66    amended to read as follows:
61-67          (b)  After notice and hearing and subject to any limitations
61-68    established by the General Appropriations Act, the board may
61-69    transfer money from the fund to the loan fund created under
 62-1    Subchapter C of this chapter, the storage acquisition fund created
 62-2    under Subchapter E of this chapter, the research and planning fund
 62-3    created under Subchapter F of this chapter, the hydrographic survey
 62-4    account created under Subchapter M of this chapter, provided the
 62-5    hydrographic survey account transfer does not exceed $425,000,
 62-6    [and] the aquatic vegetation management fund created under
 62-7    Subchapter N of this chapter, and the rural water assistance fund
 62-8    created under Subchapter P.
 62-9          SECTION 4.08.  Subsections (a) and (b), Section 15.102, Water
62-10    Code, are amended to read as follows:
62-11          (a)  The loan fund may be used by the board to provide loans
62-12    of financial assistance to political subdivisions, federal
62-13    agencies, or both political subdivisions and federal agencies
62-14    acting jointly for the construction, acquisition, improvement, or
62-15    enlargement of projects involving water conservation, water
62-16    development, or water quality enhancement, providing nonstructural
62-17    and structural flood control, or drainage, project recreation lands
62-18    and revenue-generating recreational improvements within any
62-19    watershed, or providing recharge, chloride control, subsidence
62-20    control, brush control, weather modification, regionalization, or
62-21    desalination [desalinization] as provided by legislative
62-22    appropriations, this chapter, and the board rules.
62-23          (b)  The loan fund may also be used by the board to provide
62-24    grants for:
62-25                (1)  projects that include supplying water and
62-26    wastewater services in economically distressed areas, including
62-27    projects involving retail distribution of those services; and
62-28                (2)  desalination, brush control, weather modification,
62-29    regionalization, and projects providing regional water quality
62-30    enhancement services as defined by board rule, including regional
62-31    conveyance systems.
62-32          SECTION 4.09.  Section 15.105, Water Code, is amended to read
62-33    as follows:
62-34          Sec. 15.105.  CONSIDERATIONS IN PASSING ON APPLICATION.  In
62-35    passing on an application for financial assistance from the loan
62-36    fund, the board shall consider but is not limited to:
62-37                (1)  the needs of the area to be served by the project
62-38    and the benefit of the project to the area in relation to the needs
62-39    of other areas requiring state assistance in any manner and the
62-40    benefits of those projects to the other areas;
62-41                (2)  the availability of revenue to the applicant from
62-42    all sources for the ultimate repayment of the cost of the project,
62-43    including all interest;
62-44                (3)  the relationship of the project to overall
62-45    statewide needs;
62-46                (4)  the ability of the applicant to finance the
62-47    project without state assistance; [and]
62-48                (5)  for applications for grants for economically
62-49    distressed areas, the regulatory efforts by the county in which the
62-50    project is located to control the construction of subdivisions that
62-51    lack basic utility services; and
62-52                (6)  for applications for grants under Section
62-53    15.102(b)(2), the ability of the applicant to construct the project
62-54    without the grant, and the benefits of the project to water and
62-55    wastewater needs of the state.  The board shall pass rules which
62-56    shall further define the eligibility of grants under this
62-57    subchapter.
62-58          SECTION 4.10.  Subsection (a), Section 15.106, Water Code, is
62-59    amended to read as follows:
62-60          (a)  The board, by resolution, may approve an application for
62-61    financial assistance [a loan] if after considering the factors
62-62    listed in Section 15.105 of this code and any other relevant
62-63    factors, the board finds:
62-64                (1)  that the public interest requires state
62-65    participation in the project; and
62-66                (2)  that in its opinion the revenue or taxes pledged
62-67    by the political subdivision will be sufficient to meet all the
62-68    obligations assumed by the political subdivision.
62-69          SECTION 4.11.  Section 15.107, Water Code, is amended to read
 63-1    as follows:
 63-2          Sec. 15.107.  METHOD OF MAKING [LOANS OF] FINANCIAL
 63-3    ASSISTANCE AVAILABLE.  (a)  The board may make financial assistance
 63-4    available to successful applicants in any manner that it considers
 63-5    economically feasible including:
 63-6                (1)  contracts or agreements with a political
 63-7    subdivision for the payment of the principal of or interest on or
 63-8    both the principal of and interest on bonds or other obligations
 63-9    issued or to be issued by the political subdivision;
63-10                (2)  contracts or agreements with a political
63-11    subdivision for the purpose of providing the political
63-12    subdivision's share of any cost-sharing required as a participant
63-13    in or local sponsor of any federal project; [or]
63-14                (3)  purchase of the bonds or other obligations of a
63-15    political subdivision for the purpose of completely or partially
63-16    financing the project for which the application is being submitted;
63-17    or
63-18                (4)  contracts or agreements for the receipt of funds
63-19    and performance of obligations in relation to any grant of funds
63-20    provided by the board.
63-21          (b)  Contracts or agreements entered into under Subdivision
63-22    (1) of Subsection (a) of this section may cover all or any part of
63-23    the debt service requirements in a given year and may cover debt
63-24    service requirements in as many years of an issue as the board
63-25    considers appropriate.
63-26          (c)  In a determination on a loan for financial assistance,
63-27    the board may approve interest deferral or the capitalization of
63-28    interest costs and may approve periods of repayment for the loans
63-29    of up to 50 years.
63-30          SECTION 4.12.  Section 15.434, Water Code, is amended to read
63-31    as follows:
63-32          Sec. 15.434.  USE OF MONEY IN FUND.  Money deposited to the
63-33    credit of the agricultural soil and water conservation fund, on
63-34    appropriation by the legislature to the board, the Department of
63-35    Agriculture, the State Soil and Water Conservation Board, the Texas
63-36    Agricultural Experiment Station, the Texas Agricultural Extension
63-37    Service, public colleges and universities, and other state agencies
63-38    shall be used for the following purposes:
63-39                (1)  agricultural water conservation technical
63-40    assistance programs;
63-41                (2)  agricultural water conservation, education, and
63-42    demonstration programs;
63-43                (3)  purchase of equipment, including demonstration and
63-44    educational equipment;
63-45                (4)  grants made to groundwater [underground water]
63-46    conservation districts and political subdivisions for the purchase
63-47    of equipment under programs established by Subchapter H of this
63-48    chapter;
63-49                (5)  research in water utilization and conservation
63-50    including artificial recharge and secondary recovery of groundwater
63-51    [underground water];
63-52                (6)  desalination [desalinization];
63-53                (7)  weather modification;
63-54                (8)  technical assistance programs for developing
63-55    on-farm soil and water conservation plans developed jointly by
63-56    landowners and operators and local soil and water conservation
63-57    districts, as provided by Subchapter H, Chapter 201, Agriculture
63-58    Code;
63-59                (9)  research and demonstration relating to the
63-60    production of native and low-water-use plants and water-efficient
63-61    crops;
63-62                (10)  a pilot program for low-interest loans for the
63-63    purchase of agricultural water conservation systems established by
63-64    Subchapter I of this chapter; [and]
63-65                (11)  research, demonstration, and education relating
63-66    to brush control; and
63-67                (12)  regionalization designed to promote agricultural
63-68    water conservation.
63-69          SECTION 4.13.  Section 15.471, Water Code, is amended to read
 64-1    as follows:
 64-2          Sec. 15.471.  GRANTS; PURPOSES.  The board may make grants of
 64-3    money to groundwater [underground water] conservation districts, to
 64-4    political subdivisions, and to other districts created under
 64-5    Article III, Sections 52(b)(1) and (2), or Article XVI, Section 59,
 64-6    of the Texas Constitution for purchasing equipment required for:
 64-7                (1)  measurement and evaluation of irrigation systems
 64-8    and agricultural water conservation practices on irrigated land,
 64-9    dryland, and rangeland;
64-10                (2)  demonstration of efficient irrigation systems and
64-11    agricultural water conservation practices on irrigated land,
64-12    dryland, and rangeland;
64-13                (3)  testing and evaluation of water quality and the
64-14    suitability of water from groundwater or surface water resources
64-15    for irrigation, rural domestic use, livestock, or agricultural
64-16    industry use;
64-17                (4)  demonstration of efficient or sound chemical
64-18    application and evaluation or demonstration of systems which will
64-19    prevent contamination of groundwater and surface water from
64-20    chemicals and other substances used in agriculture; or
64-21                (5)  measurement and data collection related to the
64-22    conservation of groundwater resources.
64-23          SECTION 4.14.  Section 15.602, Water Code, is amended by
64-24    adding a new Subdivision (8) and redesignating existing
64-25    Subdivisions (8) through (14) to read as follows:
64-26                (8)  "Person" means an individual, corporation,
64-27    partnership, association, state, municipality, commission, or
64-28    political subdivision of a state or any interstate body, as defined
64-29    by Section 502 of the federal act, including a political
64-30    subdivision as defined by this subchapter, if the person is
64-31    eligible for financial assistance under federal law establishing
64-32    the revolving fund.
64-33                (9)  "Political subdivision" means a municipality,
64-34    intermunicipal, interstate, or state agency, any other public
64-35    entity eligible for assistance under this subchapter, or a
64-36    nonprofit water supply corporation created and operating under
64-37    Chapter 67, if such entity is eligible for financial assistance
64-38    under federal law establishing the state revolving fund or an
64-39    additional state revolving fund.
64-40                (10) [(9)]  "Public water system" means a system that
64-41    is owned by any person and that meets the definition of public
64-42    water system in the Safe Drinking Water Act.
64-43                (11) [(10)]  "Public works" means any project to
64-44    acquire, construct, improve, repair, or otherwise provide any
64-45    buildings, structures, facilities, equipment, or other real or
64-46    personal property or improvements designed for public use,
64-47    protection, or enjoyment undertaken by a political subdivision and
64-48    paid for, in whole or in part, out of public funds.
64-49                (12) [(11)]  "Revolving fund" means the state water
64-50    pollution control revolving fund.
64-51                (13) [(12)]  "Safe Drinking Water Act" means Title XIV
64-52    of the federal Public Health Service Act, commonly known as the
64-53    Safe Drinking Water Act, as amended (42 U.S.C. Section 300f et
64-54    seq.).
64-55                (14) [(13)]  "Safe drinking water revolving fund" means
64-56    the fund established by the board as an additional state revolving
64-57    fund to provide financial assistance in accordance with the federal
64-58    program established pursuant to the provisions of the Safe Drinking
64-59    Water Act.
64-60                (15) [(14)]  "Treatment works" has the meaning
64-61    established by the federal act and the eligible components of the
64-62    management programs established by Sections 319 and 320 of the
64-63    federal act.
64-64          SECTION 4.15.  Subsection (a), Section 15.603, Water Code, is
64-65    amended to read as follows:
64-66          (a)  The revolving fund is held separately from other funds
64-67    by the board outside the State Treasury to provide financial
64-68    assistance to political subdivisions for construction of treatment
64-69    works and to persons for nonpoint source pollution control and
 65-1    estuary management projects.
 65-2          SECTION 4.16.  Subsection (a), Section 15.604, Water Code, is
 65-3    amended to read as follows:
 65-4          (a)  The board may use the revolving fund for financial
 65-5    assistance only as provided by the federal act:
 65-6                (1)  to make loans, on the conditions that:
 65-7                      (A)  those loans are made at or below market
 65-8    interest rates, including interest-free loans, at terms not to
 65-9    exceed 20 years;
65-10                      (B)  principal and interest payments will begin
65-11    not later than one year after completion of any treatment works and
65-12    all loans will be fully amortized not later than 20 years after
65-13    completion of the treatment works;
65-14                      (C)  the recipient of a loan will establish a
65-15    dedicated source of revenue for repayment of loans; and
65-16                      (D)  the revolving fund will be credited with all
65-17    payments of principal of and interest on all loans;
65-18                (2)  to buy or refinance the debt obligation of
65-19    political subdivisions at or below market rates if the debt
65-20    obligations were incurred after March 7, 1985;
65-21                (3)  to guarantee or purchase insurance for political
65-22    subdivisions if the guarantee or insurance would improve access to
65-23    market credit or reduce interest rates;
65-24                (4)  as a source of revenue or security for the payment
65-25    of principal and interest on bonds issued by the state if the
65-26    proceeds of the sale of those bonds will be deposited in the
65-27    revolving fund;
65-28                (5)  to provide loan guarantees to similar revolving
65-29    funds established by municipalities or intermunicipal agencies;
65-30                (6)  to earn interest on revolving fund accounts;
65-31                (7)  for the reasonable costs of administering the
65-32    revolving fund and conducting activities provided for by Title VI
65-33    of the federal act, except that those amounts may not exceed the
65-34    amount authorized under Title VI of the federal act; [and]
65-35                (8)  to provide financial assistance to persons for a
65-36    nonpoint source pollution control project pursuant to Section 319
65-37    of the federal act or for an estuary management project pursuant to
65-38    Section 320 of the federal act; and
65-39                (9)  for other purposes as provided by the federal act.
65-40          SECTION 4.17.  Section 15.607, Water Code, is amended to read
65-41    as follows:
65-42          Sec. 15.607.  APPROVAL OF APPLICATION.  On review of
65-43    recommendations by the executive administrator, the board by
65-44    resolution may approve an application if the board finds that in
65-45    its opinion the revenue or taxes or both revenue and taxes pledged
65-46    by the applicant will be sufficient to meet all the obligations
65-47    assumed by the applicant [political subdivision] and that the
65-48    application and assistance applied for meet the requirements of the
65-49    federal act and state law.  A program of water conservation for the
65-50    more effective use of water shall be required in the same manner as
65-51    required for approval of an application for financial assistance
65-52    under Section 15.106 of this code.
65-53          SECTION 4.18.  Subchapter C, Chapter 16, Water Code, is
65-54    amended by adding Section 16.059 to read as follows:
65-55          Sec. 16.059.  COLLECTION OF INSTREAM FLOW DATA; CONDUCT OF
65-56    STUDIES.  (a)  The Parks and Wildlife Department and the board, in
65-57    cooperation with other appropriate governmental agencies, shall
65-58    jointly establish and continuously maintain an instream flow data
65-59    collection and evaluation program and shall conduct studies and
65-60    analyses to determine flow conditions in the state's rivers and
65-61    streams necessary to support a sound ecological environment.
65-62          (b)  The Parks and Wildlife Department and the board shall
65-63    each designate an employee to share equally in the oversight of the
65-64    program studies.  Other responsibilities shall be divided between
65-65    the Parks and Wildlife Department and the board to maximize present
65-66    in-house capabilities of personnel and equipment and to minimize
65-67    costs to the state.
65-68          (c)  The Parks and Wildlife Department and the board shall
65-69    each have reasonable access to all data, studies, analyses,
 66-1    information, and reports produced by the other agency.
 66-2          (d)  The priority studies shall be completed not later than
 66-3    December 31, 2010.  The Parks and Wildlife Department and the board
 66-4    shall establish a work plan that prioritizes the studies and that
 66-5    sets interim deadlines providing for publication of flow
 66-6    determinations for individual rivers and streams on a reasonably
 66-7    consistent basis throughout the prescribed study period.  Before
 66-8    publication, completed studies shall be submitted for comment to
 66-9    both the board and the Parks and Wildlife Department.
66-10          (e)  Results of studies completed under this section shall be
66-11    considered by the commission in its review of any management plan,
66-12    water right, or interbasin transfer.
66-13          (f)  The board may authorize the use of money from the
66-14    research and planning fund established under Chapter 15 to
66-15    accomplish the purposes of this section.  The money shall be used
66-16    by the board in cooperation with the Parks and Wildlife Department
66-17    for interagency contracts with cooperating agencies and
66-18    universities and contracts with private sector establishments, as
66-19    necessary, to accomplish the purposes of this section.
66-20          SECTION 4.19.  Subsection (c), Section 17.853, Water Code, is
66-21    amended to read as follows:
66-22          (c)  The board may use the fund only:
66-23                (1)  to provide state matching funds for federal funds
66-24    provided to the state water pollution control revolving fund or to
66-25    any additional state revolving fund created under Subchapter J,
66-26    Chapter 15;
66-27                (2)  to provide financial assistance from the proceeds
66-28    of taxable bond issues to water supply corporations organized under
66-29    Chapter 67, and other participants;
66-30                (3)  to provide financial assistance to participants
66-31    for the construction of water supply projects and treatment works;
66-32                (4)  to provide financial assistance for an interim
66-33    construction period to participants for projects for which the
66-34    board will provide long-term financing through the water
66-35    development fund; [and]
66-36                (5)  to provide financial assistance for water supply
66-37    and sewer service projects in economically distressed areas as
66-38    provided by Subchapter K, Chapter 17, to the extent the board can
66-39    make that assistance without adversely affecting the current or
66-40    future integrity of the fund or of any other financial assistance
66-41    program of the board; and
66-42                (6)  to provide funds to the water infrastructure fund
66-43    created under Section 15.903.
66-44          SECTION 4.20.  Subdivisions (2) and (6), Section 17.871,
66-45    Water Code, are amended to read as follows:
66-46                (2)  "Borrower district" means a political subdivision,
66-47    including a district or authority created under Article III,
66-48    Sections 52(b)(1) and (2), or Article XVI, Section 59, of the Texas
66-49    Constitution, that receives or is eligible to receive a
66-50    conservation loan from the board for a purpose described by Section
66-51    17.895 or 17.8955 [improvement to district facilities].
66-52                (6)  "Lender district" means a political subdivision,
66-53    including a soil and water conservation district under Chapter 201,
66-54    Agriculture Code, a groundwater [an underground water] conservation
66-55    district created under Article XVI, Section 59, of the Texas
66-56    Constitution, or a district or authority created under Article III,
66-57    Section 52(b)(1), or Article XVI, Section 59, of the Texas
66-58    Constitution authorized to supply water for irrigation purposes,
66-59    that is eligible to receive or that receives a loan from the board
66-60    for the purpose of making conservation loans to individual
66-61    borrowers.
66-62          SECTION 4.21.  Section 17.895, Water Code, is amended to read
66-63    as follows:
66-64          Sec. 17.895.  CONSERVATION LOANS.  (a)  This section applies
66-65    only to a conservation loan from a lender district that is:
66-66                (1)  a soil and water conservation district under
66-67    Chapter 201, Agriculture Code;
66-68                (2)  a groundwater conservation district created under
66-69    Section 59, Article XVI, Texas Constitution; or
 67-1                (3)  a district or authority created under Section
 67-2    52(b)(1), Article III, or Section 59, Article XVI, Texas
 67-3    Constitution.
 67-4          (b)  The board or a lender district [districts] may make
 67-5    conservation loans for capital equipment or materials, labor,
 67-6    preparation costs, and installation costs:
 67-7                (1)  to improve water use efficiency of water delivery
 67-8    and application on existing irrigation systems;
 67-9                (2)  for preparing irrigated land to be converted to
67-10    dryland conditions; and
67-11                (3)  for preparing dryland for more efficient use of
67-12    natural precipitation[;]
67-13                [(4)  for preparing and maintaining land to be used for
67-14    brush control activities, including but not limited to activities
67-15    conducted pursuant to Chapter 203, Agriculture Code; or]
67-16                [(5)  for implementing precipitation enhancement
67-17    activities in areas of the state where such activities would be, in
67-18    the board's judgment, most effective].
67-19          (c) [(b)]  Conservation loans for the purposes listed in
67-20    Subsection (b) [(a)] may be made by lender districts to individual
67-21    borrowers for use on private property or by the board to borrower
67-22    districts [for use on district facilities].
67-23          (d) [(c)]  The board may make conservation loans to borrower
67-24    districts for the cost of purchasing and installing devices, on
67-25    public or private property, designed to indicate the amount of
67-26    water withdrawn for irrigation purposes.
67-27          (e) [(d)]  For purposes of this section, the board or lender
67-28    districts may seek the advice of the Department of Agriculture
67-29    regarding the feasibility of a project for which a conservation
67-30    loan is sought.
67-31          SECTION 4.22.  Subchapter J, Chapter 17, Water Code, is
67-32    amended by adding Section 17.8955 to read as follows:
67-33          Sec. 17.8955.  CONSERVATION LOANS FOR BRUSH CONTROL AND
67-34    PRECIPITATION ENHANCEMENT.  (a)  The board or a lender district may
67-35    make a conservation loan for capital equipment or materials, labor,
67-36    preparation costs, and installation costs for:
67-37                (1)  preparing and maintaining land to be used for
67-38    brush control activities, including activities conducted under
67-39    Chapter 203, Agriculture Code; or
67-40                (2)  implementing precipitation enhancement activities
67-41    in areas of the state where those activities would be, in the
67-42    board's judgment, most effective.
67-43          (b)  A conservation loan for a purpose listed in Subsection
67-44    (a) may be made by a lender district to an individual borrower for
67-45    use on private property or by the board to a borrower district.
67-46          SECTION 4.23.  Subchapter L, Chapter 17, Water Code, is
67-47    amended by adding Section 17.9615 to read as follows:
67-48          Sec. 17.9615.  TRANSFERS TO RURAL WATER ASSISTANCE FUND.
67-49    (a)  The board may direct the comptroller to transfer amounts from
67-50    the financial assistance account to the rural water assistance fund
67-51    created by Subchapter P, Chapter 15, to provide financial
67-52    assistance pursuant to this subchapter for the purposes provided in
67-53    Section 15.954.
67-54          (b)  The board shall use the rural water assistance fund as a
67-55    source of revenue to be deposited in accordance with this
67-56    subchapter for the payment of principal and interest on water
67-57    financial assistance bonds issued by the board, the proceeds of
67-58    which are to be deposited into the rural water assistance fund and
67-59    to be used to make payments under a bond enhancement agreement with
67-60    respect to principal or interest on the water financial assistance
67-61    bonds.
67-62          SECTION 4.24.  Subchapter L, Chapter 17, Water Code, is
67-63    amended by adding Section 17.9616 to read as follows:
67-64          Sec. 17.9616.  TRANSFER TO WATER INFRASTRUCTURE FUND.
67-65    (a)  The board may direct the comptroller to transfer amounts from
67-66    the financial assistance account to the water infrastructure fund
67-67    created by Subchapter O, Chapter 15, to provide financial
67-68    assistance under this subchapter for the purposes provided in
67-69    Section 15.904.
 68-1          (b)  The board shall use the water infrastructure fund as a
 68-2    source of revenue to be deposited in accordance with this
 68-3    subchapter for the payment of principal and interest on water
 68-4    financial assistance bonds issued by the board, the proceeds of
 68-5    which are to be deposited into the water infrastructure fund and to
 68-6    be used to make payments under a bond enhancement agreement with
 68-7    respect to principal or interest on the water financial assistance
 68-8    bonds.
 68-9          SECTION 4.25.  Section 11.32, Tax Code, is amended to read as
68-10    follows:
68-11          Sec. 11.32.  CERTAIN WATER CONSERVATION INITIATIVES.  The
68-12    governing body of a taxing unit by official action of the governing
68-13    body adopted in the manner required by law for official actions may
68-14    exempt from taxation part or all of the assessed value of property
68-15    on which approved water conservation initiatives, desalination
68-16    projects, or brush control initiatives have been implemented.  For
68-17    purposes of this section, approved water conservation,
68-18    desalination, and brush control initiatives shall be designated
68-19    pursuant to an ordinance or other law adopted by the governing
68-20    unit.
68-21          SECTION 4.26.  Subchapter H, Chapter 151, Tax Code, is
68-22    amended by adding Section 151.355 to read as follows:
68-23          Sec. 151.355.  WATER-RELATED EXEMPTIONS.  The following are
68-24    exempted from taxes imposed by this chapter:
68-25                (1)  rainwater harvesting equipment or supplies, water
68-26    recycling and reuse equipment or supplies, or other equipment,
68-27    services, or supplies used to reduce or eliminate water use;
68-28                (2)  equipment, services, or supplies used for
68-29    desalination of surface water or groundwater;
68-30                (3)  equipment, services, or supplies used for brush
68-31    control designed to enhance the availability of water;
68-32                (4)  equipment, services, or supplies used for
68-33    precipitation enhancement;
68-34                (5)  equipment, services, or supplies used to construct
68-35    or operate a water or wastewater system certified by the Texas
68-36    Natural Resource Conservation Commission as a regional system; and
68-37                (6)  equipment, services, or supplies used to construct
68-38    or operate a water supply or wastewater system by a private entity
68-39    as a public-private partnership, as certified by the political
68-40    subdivision that is a party to the project.
68-41            ARTICLE 5.  JOINT COMMITTEE ON WATER INFRASTRUCTURE
68-42          SECTION 5.01.  In this article, "committee" means the joint
68-43    committee on water infrastructure.
68-44          SECTION 5.02.  The committee shall conduct an interim study
68-45    and make recommendations regarding:
68-46                (1)  water marketing;
68-47                (2)  water financing; and
68-48                (3)  water conveyance systems.
68-49          SECTION 5.03.  The committee is composed of six members as
68-50    follows:
68-51                (1)  the chair of the Senate Committee on Natural
68-52    Resources and the chair of the House Committee on Natural
68-53    Resources;
68-54                (2)  two members of the senate appointed by the
68-55    lieutenant governor; and
68-56                (3)  two members of the house of representatives
68-57    appointed by the speaker of the house of representatives.
68-58          SECTION 5.04.  The committee shall:
68-59                (1)  meet at least annually with the Texas Natural
68-60    Resource Conservation Commission and the Texas Water Development
68-61    Board; and
68-62                (2)  receive information relating to:
68-63                      (A)  encouraging the effective development of
68-64    water marketing and water movement; and
68-65                      (B)  prioritizing the use of state funds for
68-66    financing the development and conservation of water resources.
68-67          SECTION 5.05.  Not later than November 1, 2002, the committee
68-68    shall make a final report to the lieutenant governor, the speaker
68-69    of the house of representatives, and the 78th Legislature
 69-1    evaluating the issues described in Section 5.02 of this article.
 69-2          SECTION 5.06.  The committee has the authority necessary to
 69-3    perform its duties and, in connection with those duties, may call
 69-4    and hold hearings.
 69-5          SECTION 5.07.  The committee may request the assistance of
 69-6    state agencies, departments, or offices to carry out its duties.
 69-7          SECTION 5.08.  The Senate Committee on Natural Resources and
 69-8    the House Committee on Natural Resources shall provide staff to the
 69-9    committee.
69-10          SECTION 5.09.  The committee shall submit a proposed budget
69-11    to the appropriate committee on administration in each house of the
69-12    legislature.  The administration committees shall jointly approve
69-13    the committee budget in an amount appropriate for the committee to
69-14    accomplish its duties under this article.
69-15          SECTION 5.10.  The committee may travel around the state and
69-16    hold hearings or public meetings as needed to fulfill its duties
69-17    under this article.
69-18          SECTION 5.11.  This article expires and the committee is
69-19    abolished on January 1, 2003.
69-20         ARTICLE 6.  REPEALER; TRANSITION; SAVING; EFFECTIVE DATE
69-21          SECTION 6.01.  Sections 35.005, 35.006, and 36.121 and
69-22    Subsection (d), Section 36.013, Water Code, are repealed.
69-23          SECTION 6.02.  (a)  The changes in law made by this Act to
69-24    Section 11.085, Water Code, apply to an application for a water
69-25    right, or an amendment to a permit, certified filing, or
69-26    certificate of adjudication authorizing an interbasin transfer of
69-27    water, that is accepted for filing on or after the effective date
69-28    of this Act.  An application for a water right, or an amendment to
69-29    a permit, certified filing, or certificate of adjudication
69-30    authorizing an interbasin transfer of water, that is accepted for
69-31    filing before the effective date of this Act is governed by the law
69-32    in effect immediately before that date, and that law is continued
69-33    in effect for that purpose.
69-34          (b)  The changes in law made by this Act by amending Section
69-35    17.895, Water Code, and adding Section 17.8955, Water Code, apply
69-36    only to a conservation loan for which an application is filed on or
69-37    after the effective date of this Act.  A conservation loan for
69-38    which an application was filed before the effective date of this
69-39    Act is governed by the law in effect immediately before that date,
69-40    and that law is continued in effect for that purpose.
69-41          (c)  The Texas Water Advisory Council shall review the first
69-42    group described under Section 9.010, Water Code, as added by this
69-43    Act, at the third quarterly meeting held by the council.
69-44          (d)  Not later than January 1, 2002, the Texas Water
69-45    Development Board shall adopt rules to administer Subchapter O,
69-46    Chapter 15, Water Code, as added by this Act, including rules
69-47    establishing procedures for applications for and for the awarding
69-48    of financial assistance for water projects, for the investment of
69-49    funds, and for the administration of the water infrastructure fund
69-50    created by this Act.
69-51          (e)  Not later than January 1, 2002, the Texas Water
69-52    Development Board shall adopt rules to administer Subchapter P,
69-53    Chapter 15, Water Code, as added by this Act, including
69-54    establishing procedures for the application for and award of loans,
69-55    the distribution of loans, the investment of funds, and the
69-56    administration of loans and the rural water assistance fund.
69-57          (f)  Not later than January 1, 2002, the Texas Water
69-58    Development Board shall adopt rules requiring a holder of a surface
69-59    water permit, certified filing, or certificate of adjudication for
69-60    surface water, a holder of a permit for the export of groundwater
69-61    from a groundwater conservation district, a retail public water
69-62    supplier, a wholesale water provider, and an irrigation district to
69-63    report to the board information on certain water pipelines and
69-64    other facilities that can be used for water conveyance.
69-65          SECTION 6.03.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
69-66    (a)  The proper and legal notice of the intention to introduce this
69-67    Act, setting forth the general substance of this Act, has been
69-68    published as provided by law, and the notice and a copy of this Act
69-69    have been furnished to all persons, agencies, officials, or
 70-1    entities to which they are required to be furnished by the
 70-2    constitution and other laws of this state, including the governor,
 70-3    who has submitted the notice and Act to the Texas Natural Resource
 70-4    Conservation Commission.
 70-5          (b)  The Texas Natural Resource Conservation Commission has
 70-6    filed its recommendations relating to this Act with the governor,
 70-7    lieutenant governor, and speaker of the house of representatives
 70-8    within the required time.
 70-9          (c)  All requirements of the constitution and laws of the
70-10    state and the rules and procedures of the legislature with respect
70-11    to the notice, introduction, and passage of this Act are fulfilled
70-12    and accomplished.
70-13          SECTION 6.04.  If any provision of this Act or its
70-14    application to any person or circumstance is held invalid, the
70-15    invalidity does not affect other provisions or applications of this
70-16    Act that can be given effect without the invalid provision or
70-17    application, and to this end the provisions of this Act are
70-18    declared to be severable.
70-19          SECTION 6.05.  This Act takes effect September 1, 2001.
70-20                                 * * * * *