1-1                                   AN ACT
 1-2     relating to the creation, administration, powers, duties,
 1-3     operations, and financing of the Neches and Trinity Valleys
 1-4     Groundwater Conservation District.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  CREATION.  (a)  A groundwater conservation
 1-7     district, to be known as the Neches and Trinity Valleys Groundwater
 1-8     Conservation District, is created in Anderson, Cherokee, and
 1-9     Henderson counties subject to approval at a confirmation election
1-10     held under Section 9 of this Act.  The district is a governmental
1-11     agency and body politic and corporate.
1-12           (b)  The district is created under and is essential to
1-13     accomplish the purposes of Section 59, Article XVI, Texas
1-14     Constitution.
1-15           SECTION 2.  DEFINITION.  In this Act, "district" means the
1-16     Neches and Trinity Valleys Groundwater Conservation District.
1-17           SECTION 3.  BOUNDARIES.  The boundaries of the district are
1-18     coextensive with the boundaries of:
1-19                 (1)  Anderson County, save and except all of that
1-20     portion of Anderson County included within the Anderson County
1-21     Underground Water Conservation District as defined in particular in
1-22     Section 4, Chapter 992, Acts of the 70th Legislature, Regular
1-23     Session, 1987;
1-24                 (2)  Cherokee County; and
1-25                 (3)  Henderson County.
 2-1           SECTION 4.  FINDING OF BENEFIT.  All of the land and other
 2-2     property included within the boundaries of the district will be
 2-3     benefitted by the works and projects that are to be accomplished by
 2-4     the district under powers conferred by Section 59, Article XVI,
 2-5     Texas Constitution.  The district is created to serve a public use
 2-6     and benefit.
 2-7           SECTION 5.  POWERS.  (a)  Except as provided by this section,
 2-8     the district has all of the rights, powers, privileges, authority,
 2-9     functions, and duties provided by the general law of this state,
2-10     including Chapter 36, Water Code, applicable to groundwater
2-11     conservation districts created under Section 59, Article XVI, Texas
2-12     Constitution.  Chapter 49, Water Code, does not apply to the
2-13     district.  This Act prevails over any provision of general law that
2-14     is in conflict or inconsistent with this Act.
2-15           (b)  The district by rule may require a person to obtain a
2-16     permit from the district for the transfer of groundwater out of the
2-17     district consistent with Section 36.122, Water Code.  The district
2-18     may determine that a transfer of groundwater produced within the
2-19     district's boundaries for use outside the district's boundaries
2-20     will not be considered a transfer outside the district if:
2-21                 (1)  the transfer is for use as a potable water supply
2-22     by a retail public utility as defined by Section 13.002, Water
2-23     Code, and is within an authorized service area of which an
2-24     appropriate portion, as determined by the district, is located
2-25     inside the district's boundaries; or
2-26                 (2)  the transfer involves an emergency potable water
 3-1     interconnect between retail public utilities, as defined by Section
 3-2     13.002, Water Code.
 3-3           (c)  The district may not levy or collect taxes in the
 3-4     district.
 3-5           (d)  The board of directors of the district:
 3-6                 (1)  May set fees for administrative acts of the
 3-7     district, such as filing applications.  Fees set by a district may
 3-8     not unreasonably exceed the cost to the district of performing the
 3-9     administrative function for which the fee is charged.
3-10                 (2)  Shall set and collect fees for all services
3-11     provided outside the boundaries of the district.  The fees may not
3-12     unreasonably exceed the cost to the district of providing the
3-13     services outside the district.
3-14                 (3)  May assess production fees based on the amount of
3-15     water authorized by permit to be withdrawn from a well or the
3-16     amount actually withdrawn.  A district may assess the fees in lieu
3-17     of, or in conjunction with, any taxes otherwise levied by the
3-18     district.  A district may use revenues generated by the fees for
3-19     any lawful purpose.  Production fees shall not exceed:
3-20                       (A)  $1 per acre-foot payable annually for water
3-21     used for agricultural use; or
3-22                       (B)  $10 per acre-foot payable annually for water
3-23     used for any other purpose.
3-24                 (4)  May assess a production fee under Subdivision (3)
3-25     of this subsection for any water produced under an exemption under
3-26     Section 36.117, Water Code, if that water is subsequently sold to
 4-1     another person.
 4-2           (e)  A well meeting the criteria established under Section
 4-3     36.117, Water Code, including a well used for dewatering and
 4-4     monitoring in the production of coal and lignite, is exempt from
 4-5     permit requirements, regulations, and fees imposed by the district.
 4-6           (f)  The district may not:
 4-7                 (1)  exercise the power of eminent domain;
 4-8                 (2)  issue and sell bonds or notes in the name of the
 4-9     district; or
4-10                 (3)  purchase groundwater rights unless the purchased
4-11     rights are acquired for conservation purposes and are permanently
4-12     held in trust not to be produced.
4-13           SECTION 6.  BOARD OF DIRECTORS.  (a)  The district is
4-14     governed by a board of directors appointed as provided by Section 7
4-15     of this Act.
4-16           (b)  Except for the initial term, all directors appointed by
4-17     the county commissioners court in each county in the district serve
4-18     four-year terms.  The director appointed jointly under Subsection
4-19     (b), Section 7 of this Act, serves a two-year term.  The terms of
4-20     four initial directors will expire at the end of the calendar year
4-21     two years after the effective date of this Act and the terms of
4-22     three initial directors will expire at the end of the calendar year
4-23     four years after the effective date of this Act.
4-24           (c)  Subject to Subsection (b) of this section, the initial
4-25     directors appointed by the county commissioners court in each
4-26     county shall draw lots to determine one initial director from each
 5-1     county who shall serve a two-year term.  The other initial
 5-2     directors shall serve terms of four years.
 5-3           (d)  Each director must qualify to serve as a director in the
 5-4     manner provided by Section 36.055, Water Code.
 5-5           (e)  A director serves until the director's successor has
 5-6     qualified.
 5-7           (f)  Directors may serve consecutive terms.
 5-8           (g)  If there is a vacancy on the board of directors, the
 5-9     governing body of the entity that appointed the director who
5-10     vacated the office shall appoint a director to serve the remainder
5-11     of the term.
5-12           (h)  Directors are not entitled to receive compensation for
5-13     serving as a director but may be reimbursed for actual, reasonable
5-14     expenses incurred in the discharge of official duties.
5-15           (i)  A majority vote of a quorum is required for board
5-16     action.  If there is a tie vote, the proposed action fails.
5-17           SECTION 7.  APPOINTMENT OF DIRECTORS.  (a)  The commissioners
5-18     court of each county in the district shall appoint one director to
5-19     represent the rural water and utilities and small municipal water
5-20     supply interests of the county and one director to represent the
5-21     agriculture, industry, or landowner groundwater supply interests of
5-22     the county.
5-23           (b)  The governing body of the most populous municipality in
5-24     each county in the district, acting jointly with the governing body
5-25     of the most populous municipality in each other county in the
5-26     district, shall appoint one director representing those
 6-1     municipalities.  The governing bodies shall appoint residents of
 6-2     the district on a rotating basis so that a resident of each county
 6-3     is appointed every sixth year.
 6-4           (c)  The governing bodies authorized by this section to make
 6-5     an appointment shall appoint the appropriate number of directors as
 6-6     soon as practicable after the effective date of this Act, but not
 6-7     later than the 45th day after the effective date of this Act.
 6-8           SECTION 8.  ORGANIZATIONAL MEETING.  As soon as practicable
 6-9     after all the initial directors are appointed as provided in this
6-10     Act, a majority of the directors shall convene the organizational
6-11     meeting of the district at a location within the district agreeable
6-12     to a majority of the directors at which time the directors will
6-13     take office.  If no location can be agreed upon, the organizational
6-14     meeting of the directors shall be at the Anderson County
6-15     Courthouse.
6-16           SECTION 9.  CONFIRMATION ELECTION.  (a)  The initial board of
6-17     directors shall call and hold an election on the same date in each
6-18     county within the district to confirm the creation of the district.
6-19           (b)  Except as provided by this section, a confirmation
6-20     election must be conducted as provided by Sections 36.017, 36.018,
6-21     and 36.019, Water Code, and Section 41.001, Election Code.
6-22           (c)  If the majority of qualified voters in a county who vote
6-23     in the election vote to confirm the creation of the district, that
6-24     county is included in the district.  If the majority of qualified
6-25     voters in a county who vote in the election vote not to confirm the
6-26     creation of the district, that county is excluded from the
 7-1     district.
 7-2           (d)  If the creation of the district is not confirmed by an
 7-3     election held under this section before the second anniversary of
 7-4     the effective date of this Act, the district is dissolved and this
 7-5     Act expires on that date.
 7-6           SECTION 10.  ADDITION OF OTHER COUNTIES OR CERTAIN
 7-7     UNDERGROUND WATER DISTRICTS TO DISTRICT.  (a)  An adjacent county
 7-8     or an underground water conservation district whose boundaries lie
 7-9     wholly within the boundaries of the Neches and Trinity Valleys
7-10     Groundwater Conservation District that wishes to join the district
7-11     shall petition the district by resolution of the commissioners
7-12     court of the county or the board of directors of the underground
7-13     water conservation district.
7-14           (b)  If the board of directors finds after a hearing on the
7-15     resolution that the addition of the county or underground water
7-16     conservation district would benefit the district and the county or
7-17     underground water conservation district to be added, the board by
7-18     resolution may approve the addition of the county or underground
7-19     water conservation district to the district.
7-20           (c)  The addition of a county or underground water
7-21     conservation district to the district under this section is not
7-22     final until ratified by a majority vote of the qualified voters in
7-23     the county or within the boundaries of the underground water
7-24     conservation district to be added voting in an election held for
7-25     that purpose.
7-26           (d)  The ballots for the election shall be printed to provide
 8-1     for voting for or against the proposition:  "The inclusion of
 8-2     _______ County in the Neches and Trinity Valleys Groundwater
 8-3     Conservation District." or "The inclusion of ________ Underground
 8-4     Water Conservation District in the Neches and Trinity Valleys
 8-5     Groundwater Conservation District."
 8-6           (e)  The notice of the election, the manner and the time of
 8-7     giving the notice, the manner of holding the election, and the
 8-8     qualifications of the voters are governed by the Election Code.
 8-9           SECTION 11.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
8-10     (a)  The proper and legal notice of the intention to introduce this
8-11     Act, setting forth the general substance of this Act, has been
8-12     published as provided by law, and the notice and a copy of this Act
8-13     have been furnished to all persons, agencies, officials, or
8-14     entities to which they are required to be furnished by the
8-15     constitution and the laws of this state, including the governor,
8-16     who has submitted the notice and this Act to the Texas Natural
8-17     Resource Conservation Commission.
8-18           (b)  The Texas Natural Resource Conservation Commission has
8-19     filed its recommendations relating to this Act with the governor,
8-20     lieutenant governor, and speaker of the house of representatives
8-21     within the required time.
8-22           (c)  All the requirements of the constitution and the laws of
8-23     this state and rules and procedures of the legislature with respect
8-24     to the notice, introduction, and passage of this Act are fulfilled
8-25     and accomplished.
8-26           SECTION 12.  EFFECTIVE DATE.  This Act takes effect
 9-1     immediately if it receives a vote of two-thirds of all the members
 9-2     elected to each house, as provided by Section 39, Article III,
 9-3     Texas Constitution.  If this Act does not receive the vote
 9-4     necessary for immediate effect, this Act takes effect September 1,
 9-5     2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1821 passed the Senate on
         May 14, 2001, by the following vote:  Yeas 30, Nays 0, one present
         not voting; and that the Senate concurred in House amendments on
         May 25, 2001, by the following vote:  Yeas 30, Nays 0, one present
         not voting.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1821 passed the House, with
         amendments, on May 23, 2001, by the following vote:  Yeas 145,
         Nays 0, two present not voting.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor