Subject to a confirmation election, the bill creates the Houston County Groundwater Conservation District (District) providing for the powers, duties, administration, operations and financing of the District. The bill authorizes the District with the powers and duties of Texas Water Code, Chapter 36, related to the general law for Groundwater Conservation Districts (GCDs).

1) Population - The boundaries of the proposed district are coextensive with the boundary of Houston County. The population of the proposed district in the Year 2000 Census was 23,185 residents. Population projections developed by the Texas Water Development Board indicate the population of the proposed district should increase to approximately 23,491 by the year 2020.

2) Location & Size - The District’s boundaries would be coextensive with the boundaries of Houston County. Houston County is not located within a Priority Groundwater Management Area designated by the TCEQ.

3) Powers - Same as general law GCDs under Texas Water Code, Chapter 36 with some limitations as noted below.

4) District Finances - Same as general law GCDs under Texas Water Code, Chapter 36, including issuance of bonds and notes, levying of maintenance tax, assessing of production fees, export fees, and administrative fees. The total indebtedness of the district as created by the issuance of bonds or notes under Chapter 36 is limited to $500,000, different from general law in Chapter 36 which does not provide a cap on indebtedness. Similar to general law GCDs, the District would be authorized to assess annual production fees on each well for which a permit is issued by the District. District production fees would be based on the size of the column pipe, the amount of water actually withdrawn from wells or the amount authorized to be withdrawn. The fees may not exceed $0.25 per acre-foot for water used for agricultural purposes and $0.0425 per 1000 gallons of water for any purpose. Production fees may be increased at a cumulative rate not to exceed 3 percent per year. Under general law, annual production fees may not exceed $1 per acre-foot for water used for agricultural purposes or $10 per acre-foot for water used for any other purpose. Similar to general law GCDs, the District may assess an export fee for groundwater produced from a well for transport out of the district in addition to the production fee. Export fees may be assessed annually and used to pay the cost of district operations. The District may not assess a fee, except during a drought or other district emergency, on a well drilled by a nonprofit water supply corporation, water district, or other political subdivision if the well’s production is for use within the District.

5) Board of Directors - The District would be governed by a board of nine elected directors serving staggered four-year terms. Unlike general law GCDs, directors would be elected according to the commissioners precinct method with two directors elected from each commissioners precinct and one director elected at-large. The temporary directors are responsible for scheduling and conducting the District’s confirmation and initial directors election. Eight temporary directors are appointed by the Commissioners Court of Houston County and one temporary director is appointed by the County Judge for Houston County. The appointments are to include one representative of rural water supply interests and one representative of agricultural interests in the District. Initial directors would be elected at the confirmation election if the District is confirmed by the voters. Four initial directors would serve until the first permanent directors election and the other five initial directors would serve until the second permanent directors election. The initial directors in each precinct would draw lots to determine which one would serve until the first permanent directors election and which one would serve until the second permanent directors election. In May of the first even-numbered year after the year in which the District is confirmed by election, four permanent directors would be elected. The appropriate number of directors would then be elected in May of each subsequent second year. General law GCDs under Texas Water Code, Chapter 36, have 5 to 11 directors elected by the general precinct method.

6) Eminent Domain - Unlike general law GCDs under Texas Water Code, Chapter 36, the District is not authorized to exercise the power of eminent domain.

7) Ability to Tax - Similar to general law GCDs under Texas Water Code, Chapter 36, including the levy of taxes for the repayment of bonds or notes and the levy of a maintenance tax. Both types of taxes are subject to voter authorization. The District may not may not levy a tax that exceeds $0.03 per $100 of assessed valuation. Under Texas Water Code, Chapter 36, the maintenance tax for general law GCDs may not exceed $0.50 per $100 assessed valuation and the tax rate for the repayment of bonds or notes is not limited.

8) Overlapping Services - There are no other GCDs in Houston County.

9) Exclusion and Addition of Territory - As with general law for GCDs, there are no provisions to exclude territory.

10) Adequacy of Boundary Description - The District’s boundaries would be the same as the county boundaries of Houston County and form a closure.

11) Comments on Powers /Duties Different from Similar Types of Districts - District directors are entitled to receive fees of office of not more that $50 a day for each day spends performing duties as a director. The fees of office may not exceed $3,000. These fees of office are less than those authorized under the general law which provide for $150 per day and a limit of $9,000 per year. Similar to general law GCDs, water wells drilled or operated under Railroad Commission of Texas permits are exempted from District regulation except where water production exceeds the Commission’s permit. Unlike general law GCDs, the District may assess production or export fees for water produced from mining activities otherwise exempted from regulation if the water is used for municipal purposes or by a public utility. Unlike general law GCDs which are not required to grandfather existing wells, the District may not require a permit for a well completed prior to the confirmation of the District. Alteration of a well may be permitted after the confirmation date if the production is increased. Unlike general law GCDs, the District may not purchase, sell, transport or distribute surface water or groundwater for any purpose. Differing from the requirements of general law, the District is subject to more stringent requirements for cooperation with other groundwater districts within the same designated groundwater management area. These requirements include coordinating data collection, monitoring, and investigations; sharing data; and notification of detections of pollution. If passed, the Act would become effective on September 1, 2001. The Act would expire if the District has not been confirmed at an election held before on September 1, 2005.

12) TCEQ Supervision - Same as for general law GCDs, including bond review authority. The TCEQ’s supervision authority as it is related to the District’s development and implementation of a management plan would be the same as for general law GCDs. As with general law GCDs, the District would not have to comply with TCEQ financial auditing requirements.

13) State Water Plan Objectives - Local groundwater resources provided approximately 43 percent of the district’s water use in the year 2000. Municipal water use accounted for 59 percent of the annual groundwater use. The remaining groundwater use was split roughly between irrigated agriculture and livestock raising. Board staff finds that creation of the proposed district is not in conflict with the State Water Plan objectives of promoting the efficient use of local groundwater resources and the implementation of practices and programs to effectively manage local groundwater resources.