By Armbrister, et al. S.B. No. 699 77R4859 QS-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the provision of water by the Lower Colorado River 1-3 Authority to a municipality outside the Colorado River basin. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 7, Acts of the 43rd Legislature, 4th 1-6 Called Session, 1934 (Article 8280-107, Vernon's Texas Civil 1-7 Statutes), is amended by adding Section 28 to read as follows: 1-8 Sec. 28. Notwithstanding any other provision of this Act, 1-9 except Section 27 of this Act, or other law: 1-10 (a) In this section, "municipality" includes a municipally 1-11 owned utility. 1-12 (b) Subject to the limitations and restrictions in this 1-13 section, the district may enter into a written contract with a 1-14 municipality located outside the Colorado River watershed to 1-15 distribute and sell water to the municipality. 1-16 (c) In addition to the district's applicable water rate, the 1-17 district shall charge a municipality a surcharge determined by the 1-18 board of directors according to the terms of the contract to enable 1-19 the district to develop and manage water resources sufficient to 1-20 address the projected needs of the district's water service area 1-21 and the needs of the municipality to the extent agreed in the 1-22 contract. The board of directors' determination of the surcharge 1-23 is not subject to review or modification by any regulatory agency 1-24 or administrative authority. 2-1 (d) The use or reservation of water under a contract 2-2 authorized by this section may extend for a base period of not more 2-3 than 50 years. A contract may provide an option to renew for not 2-4 more than an additional 30 years. An option to renew must require 2-5 that the municipality progressively reduce the amount of water 2-6 reserved or used by the municipality during the last 10 years of 2-7 the renewal term and require that the rate paid by the municipality 2-8 immediately increase by a factor of five if the municipality does 2-9 not make the required reduction. The municipality is not entitled 2-10 to further reservation, use, or delivery of water from the district 2-11 at the conclusion of the contract. 2-12 (e) The district may not amend a contract to increase the 2-13 volume of water to be sold to a municipality under this section 2-14 unless at least 12 directors vote to approve the amendment after 2-15 having consulted with the county judges of San Saba, Lampasas, 2-16 Burnet, Llano, Blanco, Travis, Bastrop, Fayette, Colorado, Wharton, 2-17 and Matagorda counties. The directors shall encourage the county 2-18 judges with whom they consult to form a committee to address the 2-19 protection of Colorado River water resources. 2-20 (f) A contract authorized by this section must require that 2-21 the rate paid by the municipality immediately increase by a factor 2-22 of five if: 2-23 (1) the municipality obtains, other than through 2-24 direct negotiations with the district or other than with the 2-25 express written consent of the district or initiates legal 2-26 proceedings in a court or regulatory agency to obtain: 2-27 (A) an increase in the amount of surface water 3-1 taken by the municipality under the terms of the contract; or 3-2 (B) an extension of either the base or renewal 3-3 periods under Subsection (d); or 3-4 (2) the district is compelled by any authority to 3-5 reserve, sell, or make available to the municipality more than 3-6 150,000 acre-feet of water per year or to reserve, sell, or make 3-7 available to the municipality water beyond the base and renewal 3-8 periods under Subsection (d). 3-9 (g) Within the district's water service area as it existed 3-10 on January 1, 2001, the district must own any personal property, 3-11 fixtures, or appurtenances that are used for making available, 3-12 diverting, or delivering water to a municipality under a contract 3-13 authorized by this section. 3-14 (h) Water to be provided under a contract authorized by this 3-15 section may not be diverted from the Colorado River at diversion 3-16 points located on the reservoirs that, on the effective date of 3-17 this section, are owned and operated by the district upstream of 3-18 Mansfield Dam. 3-19 (i) The district may sell no more than a total of 150,000 3-20 acre-feet of water in any year under contracts authorized by this 3-21 section. 3-22 (j) This section does not authorize: 3-23 (1) the district to sell its surface water rights to 3-24 any person or entity for use outside the Colorado River watershed; 3-25 or 3-26 (2) a sale or lease of water other than as 3-27 specifically authorized by this section. 4-1 (k) The district may not sell groundwater to a municipality 4-2 under this section. 4-3 (l) The district may not contract to distribute or sell 4-4 water under this section unless the district's board of directors 4-5 finds that the contract: 4-6 (1) will protect and benefit the lower Colorado River 4-7 watershed and the district's water service area, including 4-8 municipal, industrial, agricultural, recreational, and 4-9 environmental interests; 4-10 (2) is consistent with regional water management plans 4-11 filed with the Texas Water Development Board; and 4-12 (3) will benefit stored water levels in the district's 4-13 existing reservoirs. 4-14 SECTION 2. This Act constitutes full authority for a 4-15 municipality or municipally owned utility that enters into a 4-16 contract under that section to enter into a contract with the 4-17 district under Section 28, Chapter 7, Acts of the 43rd Legislature, 4-18 4th Called Session, 1934 (Article 8280-107, Vernon's Texas Civil 4-19 Statutes), as added by this Act. The payments made under a 4-20 contract authorized by that section must meet the operation and 4-21 maintenance expenses of the municipality's utility system. A 4-22 municipality or municipally owned utility that enters into a 4-23 contract under that section may use proceeds from the sale of its 4-24 revenue bonds to make any such payments. 4-25 SECTION 3. This Act takes effect immediately if it receives 4-26 a vote of two-thirds of all the members elected to each house, as 4-27 provided by Section 39, Article III, Texas Constitution. If this 5-1 Act does not receive the vote necessary for immediate effect, this 5-2 Act takes effect September 1, 2001.