By:  Staples                                                      S.B. No. 1741
	(In the Senate - Filed March 11, 2005; March 30, 2005, read 
first time and referred to Committee on Natural Resources; 
April 22, 2005, reported adversely, with favorable Committee 
Substitute by the following vote:  Yeas 11, Nays 0; April 22, 2005, 
sent to printer.)


COMMITTEE SUBSTITUTE FOR S.B. No. 1741                                   By:  Staples


A BILL TO BE ENTITLED

AN ACT


relating to an exemption for certain interbasin transfers of water 
from certain priority requirements.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 11.002, Water Code, is amended by adding 
Subdivision (15) to read as follows:
		(15)  "On-channel reservoir" means an open body of 
water that is created by a dam or other barrier that obstructs the 
flow of water in a stream and whose primary source of water is 
runoff from that stream.
	SECTION 2.  Section 11.085, Water Code, is amended by 
amending Subsection (s) and adding Subsections (w) and (x) to read 
as follows:
	(s)  Except as provided by Subsections (w) and (x), any [Any] 
proposed transfer of all or a portion of a water right under this 
section is junior in priority to water rights granted before the 
time application for transfer is accepted for filing.
	(w)  A proposed transfer that is based on a contractual sale 
of water is not subject to Subsection (s) if:
		(1)  the contract term is 50 years or less; and                        
		(2)  the transfer is from an on-channel reservoir that:                
			(A)  is located in a basin that has an annual yield 
of surface water that is equal to or greater than 125 percent of the 
amount determined by the board to be necessary to supply the 
projected demand for surface water in the basin of origin, 
including the amount allocated by any contract entered into before 
the contract on which the proposed transfer is based, for the next 
50 years; and
			(B)  has sufficient storage capacity to yield the 
supply authorized by the water right in the event of a drought equal 
in severity and duration to the drought of record.
	(x)  The term of a contract under Subsection (w) may be 
extended after the expiration of the contract if the conditions in 
Subsection (w)(2) continue to be satisfied.
	SECTION 3.  Section 11.085, Water Code, as amended by this 
Act, applies only to an application for a water right or an 
amendment to a permit, certified filing, or certificate of 
adjudication authorizing an interbasin transfer of water that is 
accepted for filing on or after the effective date of this Act.  An 
application for a water right or an amendment to a permit, certified 
filing, or certificate of adjudication authorizing an interbasin 
transfer of water that is accepted for filing before the effective 
date of this Act is governed by the law in effect at the time the 
application is accepted for filing, and the former law is continued 
in effect for that purpose.
	SECTION 4.  This Act takes effect September 1, 2005.                           



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