By Bernsen                                            S.B. No. 1641
         77R6831 MI-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to financial assistance for water development projects to
 1-3     offset the effects of interbasin transfers.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Subchapter C, Chapter 11, Water Code, is amended
 1-6     by adding Section 11.0855 to read as follows:
 1-7           Sec. 11.0855.  INTERBASIN TRANSFER OFFSET FEE. (a)  As a
 1-8     condition of any authorization for an interbasin transfer of
 1-9     surface water, the parties to the contract for the interbasin
1-10     transfer must pay, in addition to any other fees prescribed by law,
1-11     an annual interbasin transfer offset fee.
1-12           (b)  The amount of the interbasin transfer offset fee is an
1-13     amount equal to $2 per acre-foot of surface water transferred
1-14     annually out of the basin of origin under the contract for the
1-15     interbasin transfer.  If either the basin of origin or the
1-16     receiving basin undertakes a water conservation or water
1-17     development project approved by the board, the board may reduce the
1-18     fee to $1 per acre-foot of water transferred annually.
1-19           (c)  The contract for the interbasin transfer must:
1-20                 (1)  specify whether the fee imposed by this section
1-21     will be paid by:
1-22                       (A)  the party from the receiving basin;
1-23                       (B)  the party from the basin of origin; or
1-24                       (C)  both parties, in individual amounts
 2-1     specified in the contract;
 2-2                 (2)  provide that:
 2-3                       (A)  no loss will occur in the basin of origin;
 2-4     or
 2-5                       (B)  an impact statement must be prepared to
 2-6     examine the basin of origin's ability to meet the demands of the
 2-7     next 100 years; and
 2-8                 (3)  if an impact statement prepared under Subdivision
 2-9     (2)(B) shows that the basin of origin cannot meet its projected
2-10     future needs, provide that:
2-11                       (A)  the basin of origin set aside a quantity of
2-12     water sufficient to meet projected future needs; or
2-13                       (B)  the receiving basin make available to the
2-14     basin of origin a quantity of water sufficient to meet that basin's
2-15     projected future needs.
2-16           (d)  The interbasin transfer offset fee shall be paid
2-17     annually to the board in a manner and at the time prescribed by the
2-18     board.  Fees collected under this section shall be deposited to the
2-19     credit of the interbasin transfer offset fund.
2-20           (e)  The board by rule may:
2-21                 (1)  establish due dates, schedules, and procedures for
2-22     the assessment and collection of the fees; and
2-23                 (2)  provide for the assessment of penalties for late
2-24     payment of fees and the assessment of interest for the late payment
2-25     of fees or penalties in amounts not to exceed rates established for
2-26     delinquent taxes under Sections 111.060 and 111.061, Tax Code.
2-27           SECTION 2. Chapter 17, Water Code, is amended by adding
 3-1     Subchapter M to read as follows:
 3-2               SUBCHAPTER M.  INTERBASIN TRANSFER OFFSET FUND
 3-3           Sec. 17.1001.  DEFINITION.  In this subchapter, "fund" means
 3-4     the interbasin transfer offset fund.
 3-5           Sec. 17.1002.  INTERBASIN TRANSFER OFFSET FUND. (a)  The
 3-6     interbasin transfer offset fund is a special account in the state
 3-7     treasury.
 3-8           (b)  The fund consists of:
 3-9                 (1)  fees collected and deposited to the fund under
3-10     Section 11.0855; and
3-11                 (2)  penalties collected for unpaid fees due under
3-12     Section 11.0855 and interest accrued on the unpaid fees or
3-13     penalties.
3-14           Sec. 17.1003.  USE OF FUND.  Money in the fund may be used
3-15     only by the board to provide financial assistance under this
3-16     subchapter.
3-17           Sec. 17.1004.  FINANCIAL ASSISTANCE. (a)  The board may
3-18     provide financial assistance to a river authority, political
3-19     subdivision, or other water supplier to pay for the construction of
3-20     a water development project, including a reservoir, desalination
3-21     plant, or major conservation project, to offset the loss of surface
3-22     water from a basin of origin in an interbasin transfer.  Financial
3-23     assistance under this section may include the award of grants.
3-24           (b)  The board by rule shall establish eligibility standards
3-25     and procedures for awarding and administering the financial
3-26     assistance authorized by this section and may establish priorities
3-27     among types of projects eligible for assistance.
 4-1           (c)  An applicant for financial assistance under this
 4-2     subchapter must submit a preliminary proposal for the proposed
 4-3     water development project to the board at the time and in the
 4-4     manner prescribed by board rule.
 4-5           (d)  In considering applications, the board shall consider
 4-6     the perceived need for the proposed project in the basin of origin,
 4-7     the contribution of the project to the public good, and the
 4-8     demonstrated experience and competence of the applicant in carrying
 4-9     out projects of the type proposed.
4-10           Sec. 17.1005.  ADVISORY COMMITTEE. (a)  The Interbasin
4-11     Transfer Offset Fund Advisory Committee consists of:
4-12                 (1)  the presiding officer of the standing committee of
4-13     the house of representatives having primary jurisdiction over
4-14     matters relating to natural resources;
4-15                 (2)  the presiding officer of the standing committee of
4-16     the senate having primary jurisdiction over matters relating to
4-17     natural resources; and
4-18                 (3)  two members of each house to be appointed by the
4-19     presiding officer of the appropriate committee.
4-20           (b)  The advisory committee shall recommend to the board when
4-21     and for what projects money in the fund may be spent.
4-22           (c)  The board may not spend money in the fund without first
4-23     consulting the advisory committee.
4-24           SECTION 3. (a)  This Act takes effect September 1, 2001.
4-25           (b)  The change in law made by Section 11.0855, Water Code,
4-26     as added by this Act, applies only to parties to a contract for an
4-27     interbasin transfer that is entered into on or after September 1,
 5-1     2001.