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 bill would create the Kleberg 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 central portion of Kleberg County, which is not part of the Kenedy County GCD, contains approximately 98 percent of the county’s population.  The county is expected to grow modestly from a 2000 population of 31,549 to 36,959 in 2010.

2) Location & Size- The bill provides that the District includes parts of ten parcels of land in Kleberg County. The proposed district’s initial boundaries are described in terms of land grants, surveys, and oil and gas leases.  Consequently, staff was not able to determine the location of the proposed district.  However, because much of the western and eastern part of the county are within the Kenedy County Groundwater Conservation District (GCD), the proposed district must be located in the central portion of the county: south of the City of Kingsville and generally east of U.S. Highway 77.

3) Powers- Same as general law GCDs under Texas Water Code, Chapter 36.

4) District Finances- Same as general law GCDs under Texas Water Code, Chapter 36. District finances under Chapter 36 include issuance of bonds and notes; levying of taxes for maintenance and operation expenses and for the repayment of bonds and notes; and, assessment of production fees, export fees, and administrative fees.

5) Board of Directors- The District would be governed by a board of five elected permanent directors serving staggered four-year terms. Unlike general law GCDs, four directors would be elected from single-member districts and one director would be elected at-large. Temporary directors are to be named in the bill. The temporary directors are responsible for scheduling and conducting the District's confirmation election. The temporary directors become the initial directors if the District is confirmed by the voters. Two initial directors would serve until the first permanent directors election in May of the first even-numbered year after the year in which the District is confirmed by election, and the other three initial directors would serve until the second permanent directors election in May of the second even-numbered year. 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- Same as general law GCDs under Texas Water Code, Chapter 36, the District is authorized to exercise the power of eminent domain.

7) Ability to Tax- Same as general law GCDs under Texas Water Code, Chapter 36, the District is authorized to levy a maintenance tax and to levy a tax for the repayment of bonds or notes. Both types of taxes are subject to voter authorization. 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) Ability to Exclude Property- As with general law for GCDs, there are no provisions to exclude property.

9) Overlapping Service-As described under the heading Adequacy of Boundary Description, the bill alone does not provide adequate information to determine proposed District boundaries, and a map was not provided for the proposed District. Therefore, an overlap check could not be performed. The proposed District's boundary relationship to the existing Kenedy County Groundwater Conservation District is unclear. The Kenedy County GCD, as created by Chapter 1152, Acts of the 78th Legislature, Regular Session, 2003 (HB3374), includes all of Kenedy County and described territory in Brooks, Jim Wells, Kleburg, and Nueces counties. Creation of the Kenedy County GCD was confirmed by voters of Kenedy and Kleberg counties on November 2, 2004.

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.

10) Adequacy of Boundary Description- The boundary descriptions of the ten parcels of land, and the area to be excluded from eight of these parcels, are not described in the bill but are provided only by reference to filed property deed and oil and gas leases. The bill itself does not provide sufficient information to determine District boundaries or if the District boundaries form a closure. The District is located in Groundwater Management Area 16 designated by the Texas Water Development Board for the southern part of the Gulf Coast aquifer. Kleberg County is not located within a Priority Groundwater Management Area designated by the TCEQ.

11) Comments on Powers /Duties Different from Similar Types of Districts- If the District is not confirmed by September 1, 2007, the District is dissolved on this date and Chapter 8816 will expire on September 1, 2010. The Act, if passed, would take effect on September 1, 2005.

12) TCEQ’s 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 groundwater 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-Water Use:  Within Kleberg County, 76 percent of the total water use was groundwater (Gulf Coast Aquifer) in the year 2000.  Sixty percent of the groundwater use was for municipal purposes.  The county’s total water use to be included in the 2007 State Water Plan is projected to grow from a year 2000 total of 10,444 acre feet of use to 10,997 acre feet of use in 2010.

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.