The Legislative Budget Board in cooperation with the Water Development Board (TWDB) and Texas Commission on Environmental Quality (TCEQ), has determined the following:

Subject to a confirmation election, the Act would authorize the existing Upton County Water District (District) in Upton County with the powers and duties of a Groundwater Conservation District (GCD) in accordance with Water Code, Chapter 36, Subchapter D.

1) Population- The Upton County population projections to be used in the 2006

Region F Water Plan indicate slight growth from 3,404 in 2000 to 3,757 in 2010.

2) Location & Size- The District includes all of Upton County and contains approximately 799,954 acres.  Subsequently, the Upton County Water District is located in Upton County (Region F) and is a wholesale water provider for several systems in the county.

3) Powers- The District currently has the powers and duties granted to a general law water conservation and reclamation district under Texas Water Code, Chapters 49, 50, and 51, and primarily serves as a raw water supplier. The District owns municipal water wells in Upton County. If approved by the voters, the District would also have the powers and duties granted to a general law GCD under Texas Water Code, Chapter 36. If approved by the voters, the District, as a water supply entity utilizing wells to produce groundwater, would be in the position of permitting and regulating its own wells.

4) District Finances- The District’s current finance authority is not changed. If approved by the voters, the Act would authorize the District to assess groundwater export fees the same as general law GCDs under Texas Water Code, Chapter 36. However, unlike general law GCDs, the District would not be authorized to assess the well production fees provided under Chapter 36, Subchapter G.

5) Board of Directors- The District’s current board of directors is not changed.

6) Eminent Domain- The District’s current authority to exercise the power of eminent domain is not changed. If approved by the voters, the District would also have the rights and powers of eminent domain under Texas Water Code, Chapter 36.

7) Ability to Tax- The District’s current tax  authority is not changed.

8) Overlapping Services- There are no other GCDs in Upton County. The primary functions of GCDs are conservation and management of groundwater resources through data collection, rules and well permitting within their boundaries. These functions do not conflict with the services provided by the other water utilities or districts in the same area. The other known water supply or sewer-service corporations, investor-owned utilities, or local water districts or authorities in the District are the Upton County Water Conservation and Improvement District 1 McCamey, Reg. No. P0723, and the Upton County Water Control and Improvement District 1 Rankin, Reg. No. P0779.

9) Ability to Exclude Property- The District’s ability to exclude property is not changed.

10) Adequacy of Boundary Description- The District’s boundaries are the same as the boundaries of Upton County and form a closure. The District is in Groundwater Management Area 7 designated by the Texas Water Development Board primarily for the Edwards-Trinity (Plateau) aquifer. The northern part of Upton County, along with the southern part of Midland County and the northern part of Reagan County are located within a Priority Groundwater Management Area designated by the TCEQ.

11) Comments on Powers /Duties Different from Similar Types of Districts- Unlike general law GCDs under Texas Water Code, Chapter 36, the bill provides that the election to authorize the District with the authority of Texas Water Code, Chapter 36, Subchapter D, be held on the uniform election date in November 2005 if U.S. Justice Department preclearance has been obtained, or at the next uniform election date following preclearance. The District is required to contract with the county clerk of Upton County to conduct the election. If the election is successful and the District is so authorized, it must adopt well permitting rules by March 1 of the year following the election, implement the well permitting rules by April 1 of this same year, and act on well permitting rule violations by June 1 of this same year. General law GCD directors under Texas Water Code, Chapter 36, are authorized to make district-specific decisions about the scheduling, timing, and holding of elections, and about the need and timing for the adoption, implementation, and enforcement of groundwater management rules. Under Texas Water Code, Chapter 36, a general law GCD’s management plan and rules to implement the management plan must be adopted within two years of the date that creation of the district is confirmed by the voters.

If the election to authorize the District with the authority of Texas Water Code, Chapter 36, Subchapter D, is defeated by the voters, the Act provides that subsequent elections on the proposition may be held after a one-year period. If the District has not been so authorized by September 1, 2010, this added section of the Act would expire on that date. General law GCDs under Texas Water Code, Chapter 36, may only have one similar confirmation election.

The District is currently a water service provider that owns municipal water wells within Upton County. If empowered with Texas Water Code, Chapter 36, Subchapter D authority, the District would become a resource conservation agency with a mandate to manage groundwater, and may be required to permit and regulate its own wells. This probable scenario may constitute a conflict of interest.

12) TCEQ’s Supervision- As with general law districts, the TCEQ would have general supervision authority, including bond review authority and review of financial reports. Similar to general law GCDs under Texas Water Code, Chapter 36, the District would be required to adopt a groundwater management plan and have the plan certified by the Texas Water Development Board. However, unlike general law GCDs, the District’s groundwater management plan would not be subject to the State Auditor’s Office or TCEQ performance review provisions of Chapter 36, Subchapter I.

13) State Water Plan Objectives-Water Use:  Within Upton County, 99 percent of the total water use was groundwater in the year 2000. Only five percent of the groundwater use was for municipal purposes, while irrigated agriculture and mining operations used the vast majority. The proposed district would be located over the Edwards-Trinity Plateau Aquifer. The county's total water use, to be included in the 2006 Region F Water Plan is projected to grow from 16,138 acre-feet in 2000 to 20,575 acre-feet in 2010.

Board staff finds that the addition of groundwater conservation district powers to the existing 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.