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By:  Puente                                                       H.B. No. 3586


A BILL TO BE ENTITLED
AN ACT
relating to powers and duties of the Edwards Aquifer Authority to manage and protect the Edwards Aquifer including groundwater withdrawals, permitting, aquifer management fees, recharge projects, demand management and transfers, the board of directors of the Edwards Aquifer Authority and revenue bonding authority. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 1.03, Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, and Chapter 966, Acts of the 77th Legislature, Regular Session, 2001, is amended by adding Subsection (28) to read as follows: (28) "Water supply facility" means a dam, reservoir, treatment facility, or recharge project. SECTION 2. Section 1.09, Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, as amended by Chapter 261, Acts of the 74th Legislature, Regular Session, 1995, is amended by adding Subsections (i) and (j) as follows: (i) To be eligible to be elected or appointed as a voting member of the board, a person must have resided continuously in the authority single-member election district from which the office is elected for six months immediately preceding the following date: (1) for a candidate for election, the 60th day prior to the general election date; (1) for an appointee to office, the date the appointment is made. (j) A person who files with the authority an application to be a candidate for or appointed to the office of director of the board for a single-member election district may request from the authority a written certification of the district in which the residence address identified in the application is located. The certification request shall be in writing on a form provided by the authority. (1) Upon receipt of a certification request, within 10 days, the authority shall consult with appropriate county election officials and review public records to determine in which single-member election district the residence address is located. Upon making the determination, the general manager, or designated representative, shall issue a written certification stating: (a) the county and authority district in which the residence address on the candidacy or appointment application is located; and (b) the date of issuance of the certification. (2) In the event the authority is unable to reasonably determine the location of a residence address within a district, or otherwise provide the requested information, the authority shall so advise the requestor. (3) All certification requests must be filed with the authority no later than the close of business of the authority on the 10th day preceding the following date: (a) for a candidate for election, the last day to file with the authority an application for a place on the ballot; or (b) for an appointee to office, the last day to file with the authority an application to be appointed to fill a vacancy. (4) The authority shall not process any certification request filed with the authority after the time periods set out in Subsection (j)(3). (5) In the event a candidate for election or appointment receives a certification from the authority which was incorrect at the time it was made, and the candidate desires to assume the office, having otherwise qualified for election or appointment as an authority director, the candidate must, no later than 60 days from the date the candidate was made aware of such error in certification, establish and maintain residency in the district from which the candidate was elected or appointed. In the event the candidate fails to establish residency within 60 days as required, the candidate shall be considered ineligible, the office shall be declared vacant, and the resulting vacancy shall be filled in the manner prescribed to fill vacancies in the office. SECTION 3. Section 1.094(c), Chapter 163, Acts of the 76th Legislature, Regular Session, 1999, is repealed. SECTION 4. Section 1.11(f), Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993 and Chapter 966, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: (f) The authority may contract with a person who uses water from the aquifer for the authority or that person to own, finance, design, construct, operate, or [own, finance, and] maintain water supply facilities. [Management fees or special fees may not be used for purchasing or operating these facilities. For the purpose of this subsection, "water supply facility" includes a dam, reservoir, treatment facility, transmission facility, or recharge project.] SECTION 5. Section 1.14(b)-(h), Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: (b) Except as provided by Subsections (c), [(d)], (e) [(f)], and (g) [(h)] of this section and Section 1.26 of this article, beginning January 1, 2005 [for the period ending December 31, 2007], the amount of permitted withdrawals from the aquifer may not exceed 550,000 [450,000] acre-feet of water for each calendar year. [(c) Except as provided by Subsections (d), (f), and (h) of this section and Section 1.26 of this article, for the period beginning January 1, 2008, the amount of permitted withdrawals from the aquifer may not exceed 400,000 acre-feet of water for each calendar year.] (c) [(d)] If, through studies and implementation of water management strategies, including conservation, springflow augmentation, diversions downstream of the springs, reuse, supplemental recharge, conjunctive management of surface and subsurface water, and drought management plans, programs, practices, procedures, or methods, of any kind, the authority determines that the amount of water available for permitting under Subsection (b) of this section should be changed to more effectively accomplish the purposes of this article [additional supplies are available from the aquifer], the authority, in consultation with appropriate state and federal agencies, may review and, by order, change the amount of water available for permitting under Subsection (b) of this section [may increase the maximum amount of withdrawals provided by this section and set a different maximum amount of withdrawals]. Beginning September 1, 2006, and every four years thereafter, the Authority shall determine whether the amount of water available for permitting under Subsection (b) of this section should be changed pursuant to this subsection. If the requirements of Subsection (a) have not all been met, the authority shall by March 1 of the succeeding year implement new requirements to assure compliance with Subsection (a). (d) [(e)] Unless made pursuant to the transfer of a regular, term, emergency, monitoring, or recharge recovery permit, the transfer of interim authorization, or an exempt well, the [The] authority may not allow withdrawals from the aquifer through wells drilled after June 1, 1993 [,except additional water as provided by Subsection (d) and then on an interruptible basis]. (e) [(f)] If the level of the aquifer is equal to or greater than 650 feet above mean sea level as measured at Well J-17, the authority shall [may] authorize withdrawals pursuant to initial regular permits [withdrawals] from the San Antonio pool, on an uninterruptible basis [, of permitted amounts]. If the level of the aquifer is equal to or greater than 845 feet at Well J-27, the authority shall [may] authorize withdrawals pursuant to initial regular permits [withdrawals] from the Uvalde pool, on an uninterrupitible basis[, of permitted amounts]. If the level of the aquifer is less than 650 feet above mean sea level as measured at Well J-17, the authority may, pursuant to Section 1.26 of this article, interrupt withdrawals pursuant to initial regular permits from the San Antonio pool. If the level of the aquifer is less than 845 feet at Well J-27, the authority may, pursuant to Section 1.26 of this article, interrupt withdrawals pursuant to initial regular permits from the Uvalde pool. Pursuant to Section 1.26 of this article, the [The] authority shall require interruptions in [limit the additional] withdrawals, or require implementation of programs, practices, procedures, or methods, pursuant to Subsection (g) of this section, to protect [to ensure that] springflows at the Comal Springs and San Marcos Springs [are not affected] during demand management and critical period management [drought] conditions. (f) [(g)] The authority by rule may define other pools within the aquifer, in accordance with hydrogeologic research, and may establish index wells for any pool to monitor the level of the aquifer to aid the regulation of withdrawals from the pools. (g) [(h)] By [To accomplish the purposes of this article, by] June 1, 2005 [1994], the authority [, through a program,] shall implement and enforce water management programs, practices, procedures, or [and] methods to ensure that, not later than December 31, 2012, the continuous minimum springflows of the Comal Springs and the San Marcos Springs are maintained to protect endangered and threatened species to the extent required by federal law. The authority from time to time as appropriate may revise the programs, practices, procedures, or [and] methods. To meet this requirement, the authority shall require: (1) pursuant to Section 1.26 of this article, phased reductions in the amount of water that may be used or withdrawn by existing users or categories of other users; or (2) implementation of alternative management programs, practices, procedures, or [and] methods. SECTION 6. Section 1.15(b), Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: (b) Except as provided by Sections 1.17, [and] 1.33, and 1.331 of this article, a person may not withdraw water from the aquifer or begin construction of a well or other works designed for the withdrawal of water from the aquifer without obtaining a permit from the authority. SECTION 7. Section 1.16(e)-(h), Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: (e) To the extent water is available for permitting, the board shall issue an [the] existing user a regular permit for withdrawal of an amount of water equal to the user's maximum beneficial use of water without waste during any one calendar year of the historical period. If an existing [a water] user does not have historical use for a full year, then the authority shall set the user's maximum beneficial use of water without waste as the [issue a permit for withdrawal based on an] amount of water that would normally be beneficially used without waste for the intended purpose for a calendar year. (f) If the total amount of water determined to have been beneficially used without waste under Subsection (e) of this section [this subsection] exceeds the amount of water available for permitting under Subsection (b) of Section 1.14 of this article, the authority shall proportionately adjust the amount of water authorized for withdrawal under regular [the] permits [proportionately] to meet the amount available for permitting. Except as provided by Subsection (b) of Section 1.21 of this article, no existing user may be proportionately adjusted below the following amounts: (1) for an [An] existing irrigation user, [shall receive a permit for not less than] two acre-feet a year for each acre of land the user actually irrigated in any one calendar year during the historical period; or[.] (2) for an [An] existing user who has operated a well for three or more years during the historical period, [shall receive a permit for at least] the average amount of water withdrawn annually during the historical period. (g) Except as provided by Subsection (b) of Section 1.21 of this article, in the event a proportional adjustment results in an amount of water authorized for withdrawal under a regular permit that is less than an applicable minimum regular permit amount specified in Subsection (f) of this section, then the Authority shall restore the amount to be equal to the minimum regular permit amount. (h) [(f)] The board by rule shall consider the equitable treatment of a person whose historic use has been affected by a requirement of or participation in a federal program. (i) [(g)] The authority shall issue an initial regular permit without a term, and an initial permit remains in effect until the permit is abandoned, cancelled, or retired. (j) [(h)] The board shall notify each permit holder that the permit is subject to limitations as provided by this article. SECTION 8. Section 1.21, Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: SECTION 1.21 [PERMIT] RETIREMENT OF PERMITS OR APPLICATIONS. (a) The authority shall prepare and implement a plan for reducing, by January 1, 2005 [2008], the maximum annual volume of water authorized to be withdrawn from the aquifer under regular permits to 550,000 [400,000] acre-feet a year or the adjusted amount determined under Subsection (c) [(d)] of Section 1.14 of this article. The plan must be enforceable and must include measures to retire all or part of regular permits or applications for initial regular permits, or other water management measures designed to achieve the required reductions. [(b) The plan must be enforceable and must include water conservation and reuse measures, measures to retire water rights, and other water management measures designed to achieve the reduction levels or appropriate management of the resource.] (b) [(c)] If, on or after January 1, 2005 [2008], the overall volume of water authorized to be withdrawn from the aquifer under regular permits is greater than 550,000 [400,000] acre-feet a year or greater than the adjusted amount determined under Subsection (c) [(d)] of Section 1.14 of this article, the Authority shall immediately proportionately adjust the maximum authorized withdrawal amount of each regular permit as determined under Subsection (e) of Section 1.16 of this article [shall be immediately reduced by an equal percentage] as is necessary to reduce aggregate [overall] maximum authorized withdrawals under regular permits [demand] to 550,000 [400,000] acre-feet a year or the adjusted amount, as appropriate. In the event a proportional adjustment results in an amount of water authorized for withdrawal under a regular permit that is less than an applicable minimum regular permit amount specified in Subsection (f) of Section 1.16 of this article, then the Authority shall, in accordance with Section 1.29 of this article, compensate the permittee for the amount of the authorized withdrawal below the minimum regular permit amount that was proportionately adjusted in order to meet 550,000 acre-feet a year, or as that amount may be adjusted under Subsection (c) of Section 1.14 of this article. The amount reduced may be restored, in whole or in part, as other appropriate measures are implemented that maintain overall demand at or below the appropriate amount. SECTION 9. Section 1.26, Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: SECTION 1.26 DEMAND MANAGEMENT AND CRITICAL PERIOD MANAGEMENT PLAN. (a) The authority shall prepare and coordinate implementation of a plan for demand management and critical period management [on or before September 1, 1995]. The mechanisms must: (1) distinguish between discretionary use and nondiscretionary use; (2) require reductions of all discretionary use to the maximum extent feasible; (3) require utility pricing, to the maximum extent feasible, to limit discretionary use by the customers of water utilities; and (4) require reduction of nondiscretionary use by permitted or contractual users, to the extent further reductions are necessary, in the reverse order of the following water use preferences: (A) municipal, domestic, and livestock; (B) industrial and crop irrigation; (C) residential landscape irrigation; (D) recreational and pleasure; and (E) other uses that are authorized by law. (b) The board shall adopt measures to ensure that authorized withdrawals from non-exempt wells are reduced to 350,000 acre-feet, annualized, if the following conditions are met: (1) for the San Antonio Pool, the level of the aquifer is less than 627 feet above mean sea level as measured at Well J-17; or (2) for the Uvalde Pool, the level of the aquifer is less than 842 feet above mean sea level as measured at Well J-27. (c) The demand management and critical period plan required to be prepared and implemented by this section shall be adopted by the board no later than September 1, 2004. In the event this deadline is not met, irrespective of whether a demand management or critical period is in effect, the board shall issue an order temporarily interrupting 20 percent of the amount of water authorized for withdrawal under each regular permit until the board has adopted the plan. SECTION 10. Section 1.28(b), Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: (b) The authority may issue revenue bonds for the following purposes: (1) to finance the purchase of land; (2) for [or] the purchase, construction, or installation of facilities or equipment, including, but not limited to, recharge dams, and associated facilities, structures, or works; or (3) for the purposes set out in Sections 1.21, 1.22(a), and 1.29(a) of this article to retire permits or applications for initial regular permits by compensating permittees or applicants to ensure that the amount of withdrawals from the aquifer pursuant to regular permits does not exceed the amount set out in Subsection (b) of Section 1.14 of this article. The Authority may not allow for any person to construct, acquire, or own facilities for transporting groundwater out of Uvalde County or Medina County. SECTION 11. Section 1.29, Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993 and Chapter 966, Acts of the 77th Legislature, Regular Session, 2001, is amended to read as follows: (a) The cost of [reducing withdrawals or] permit or application retirements under Section 1.21 of this article or the adjusted amount under Subsection (c) of Section 1.14 of this article for the period ending December 31, 2004, must be borne solely by users of the aquifer and shall be paid for by aquifer management fees assessed under Subsections (b) and (c) of this section.[:] [(1) solely by users of the aquifer for reducing withdrawals from the level on the effective date of this article to 450,000 acre-feet a year, or the adjusted amount determined under Subsection (d) of Section 1.14 of this article for the period ending December 31, 2007; and (2) equally by aquifer users and downstream water rights holders for permit retirements from 450,000 acre-feet a year, or the adjusted amount determined under Subsection (d) of Section 1.14 of this article for the period ending December 31, 2007, to 400,000 acre-feet a year, or the adjusted amount determined under Subsection (d) of Section 1.14 of this article, for the period beginning January 1, 2008.] (b) The authority shall assess equitable aquifer management fees based on aquifer use under the water management plan to finance its administrative expenses and programs authorized under this article. Aquifer management fees may additionally be used for the repayment of revenue bonds issued by the authority pursuant to Section 1.28 of this article. Each water district governed by Chapter 52, Water Code, that is within the authority's boundaries may contract with the authority to pay expenses of the authority through taxes in lieu of user fees to be paid by water users in the district. The contract must provide that the district will pay an amount equal to the amount that the water users in the district would have paid through user fees. The authority may not collect a total amount of fees and taxes that is more than is reasonably necessary for the administration of the authority. [(c) The authority shall also assess an equitable special fee based on permitted aquifer water rights to be used only to finance the retirement of rights necessary to meet the goals provided by Section 1.21 of this article. The authority shall set the equitable special fees on permitted aquifer users at a level sufficient to match the funds raised from the assessment of equitable special fees on downstream water rights holders. (d) The commission shall assess equitable special fees on all downstream water rights holders in the Guadalupe River Basin to be used solely to finance the retirement of aquifer rights necessary to meet the goals provided by Section 1.21 of this article. Fees assessed under this subsection may not exceed one-half of the cost of permit retirements from 450,000 acre-feet a year, or the adjusted amount determined under Subsection (d) of Section 1.14 of this article, for the period ending December 31, 2007, to 400,000 acre-feet a year for the period beginning January 1, 2008. The authority shall report to the commission the estimated costs of the retirements. The amount of fees assessed under this subsection shall be determined in accordance with rules adopted by the commission for fees under the South Texas watermaster program with adjustments as necessary to ensure that fees are equitable between users, including priority and nonpriority hydroelectric users. A downstream water rights holder shall pay fees assessed under this subsection to the authority. A fee may not be assessed by the commission under this subsection on contractual deliveries of water stored in Canyon Lake that may be diverted downstream of the San Marcos Springs or Canyon Dam. A person or entity making a contractual sale of water stored upstream of Canyon Dam may not establish a systemwide rate that requires purchasers of upstream-stored water to pay the special fee assessed under this subsection.] (c) [(e)] In developing an equitable fee structure under this section, the authority may establish different fee rates on a per acre-foot basis for different types of use. The fees must be equitable between types of uses. The fee rate for agricultural use shall be based on the volume of water withdrawn and may not be more than $2 per acre-foot. The authority shall assess the fees on the amount of water a permit holder is authorized to withdraw under the permit. (d) [(f)] The authority shall impose a permit application fee not to exceed $25. (e) [(g)] The authority may impose a registration application fee not to exceed $10. [(h) Special fees collected under Subsection (c) or (d) of this section may not be used to finance a surface water supply reservoir project.] (f) [(i)] The authority shall provide money as necessary, but not to exceed five percent of the money collected under Subsection (b) [(d)] of this section, to finance the South Central Texas Water Advisory Committee's administrative expenses and programs authorized under this article. SECTION 12. Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993; as amended by Chapters 261 and 524, Acts of the 74th Legislature, Regular Session, 1995; Chapter 163, Acts of the 76th Legislature, Regular Session, 1999; and Chapters 966 and 1192, Acts of the 77th Legislature, Regular Session, 2001, is amended to add Section 1.331 as follows: SECTION 1.331 EXEMPTION FOR FEDERAL FACILITIES. A federal facility that has not waived sovereign immunity with respect to the permitting requirements of Section 1.15(b) of this article is exempt from the requirements of this article and any rules promulgated thereunder. SECTION 13. Sections 1.34(b) and 1.34(c), Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, are amended to read as follows: (b) The authority by rule shall [may] establish a procedure by which a person who has achieved [installs] water conservation [equipment] may transfer [sell] the [water] conserved water. (c) A permit holder may transfer a regular [lease] permit, [permitted water rights, but a holder of a permit for irrigation use may not lease more than 50 percent of the irrigation rights initially permitted. The user's remaining irrigation water rights must be used in accordance with the original permit and must pass with transfer of the irrigated land.] however, with respect to a regular permit originally issued for irrigation use, up to 50 percent of such a permit may be transferred without restrictions as to the place or purpose of use, while the remaining 50 percent may only be transferred: (1) to another place of use within the county in which the place of use under the original permit is located, for irrigation use; (2) to another place of use within the county in which the place of use under the original permit is located, for any purpose of use, but only in the event that all or a portion of the place of use under the original permit is developed such that it is no longer capable of being used for irrigation, and only for that portion of the permit attributable to the non-irrigable land; or (3) in a manner consistent with rules adopted by the authority for the transfer of conserved water pursuant to Subsection (b) of this section. SECTION 14. Section 1.45, Chapter 626, Acts of the 73rd Legislature, Regular Session, 1993, is amended to read as follows: (a) The authority may own, finance, design, construct, [build or] operate, and maintain recharge dams, and associated facilities, structures, or works, in the contributing or recharge area of the aquifer if the recharge is made to increase the yield of the aquifer and the recharge project does not impair senior water rights or vested riparian rights. SECTION 15. TRANSFER SAVINGS CLAUSE. The provisions of Section 1.34, as amended by this Act, apply only to transfers effective on or after the effective date of this Act. The change in law to Section 1.34 made by this Act does not affect the validity of transfers effective prior to the effective date of this Act and such transfers are governed by the Act and the rules of the Authority in effect at the time the transfer was effective. Transfers effective prior to the effective date of this Act approved by the Authority and which have not been rescinded or are not subject to pending litigation are hereby validated. SECTION 16. Chapter 626, Acts of the 73rd Legislature Regular Session, 1993; as amended by Chapters 261 and 524, Acts of the 74th Legislature, Regular Session, 1995; Chapter 163, Acts of the 76th Legislature, Regular Session 1999; and Chapters 966 and 1192, Acts of the 77th Legislature, Regular Session 2001, is amended to add Section 3.05 as follows: SECTION 3.05. EXEMPTION. Chapter 245, Local Government Code does not apply within the boundaries of the Edwards Aquifer Authority. SECTION 17. EFFECTIVE DATE. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2003.