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 Duval County Groundwater Conservation District (District) providing for the powers, duties, administration, operations and financing of the District. The bill authorizes the District with specific powers and duties and with those of Texas Water Code, Chapter 36, related to the general law for Groundwater Conservation Districts (GCDs).

1) Population- The Duval County population projections to be used in the 2007 State Water Plan show very little growth from a 2000 population of 13,120 to 13,881 in 2010.

2) Location & Size- The District’s boundaries would be coextensive with the boundaries of Duval County.

3) Powers- Same as general law GCDs under Texas Water Code, Chapter 36; however, the bill authorizes the District to assume and exercise the authorities of a MUD or to merge with a WCID without specific provisions or authority of other laws applicable to water districts and utilities.

4) District Finances- Same as general law GCDs under Texas Water Code, Chapter 36, including issuance of bonds and notes; levying of maintenance tax; and, assessing of production fees, export fees, and administrative fees.

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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, directors would be elected according to the commissioners precinct method with one director elected from each county commissioners precinct and one director elected at-large. Temporary directors are appointed and are responsible for scheduling and conducting the District's confirmation election. Within 45 days of the effective date of the Act, four temporary directors are to be appointed by the Commissioners Court of Duval County to represent commissioners’ precincts and one temporary director is to be appointed by the County Judge of Duval County to represent the county at-large. 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. In some general law GCD creation cases, commissioners courts are provided 90 days to appoint temporary directors.

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 Services- There are no other GCDs in Duval 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 District's boundaries include the service areas of other water utilities and districts with Certificates of Convenience and Necessity (CCN). The other known water supply or sewer-service corporations, investor-owned utilities, or local water districts or authorities in the District are the Duval County Conservation & Reclamation District (Reg. No. P0527), the Freer WCID (Reg. No. P0138), and the San Diego MUD 1 (CCN Nos. 13048 and 20957).

There is, however a potential for a conflict of interest should the District assume the functions of a MUD or merge with a WCID if either of these entities relies on groundwater sources in Duval County. In this situation, the District would be responsible for permitting and regulating its own wells.

10) Adequacy of Boundary Description- The District’s boundaries would be the same as the county boundaries of Duval County and 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. Duval 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- Unlike general law and most special purpose GCDs, the bill authorizes the District to assume and exercise the functions of a MUD and to merge with a WCID.

District directors are entitled to receive fees of office of not more that $50 a day for each day spent performing duties as a director. The fees of office may not exceed $3,000 per year. 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.

The bill provides the Act would take effect immediately if passed by a two-thirds majority in each house. If passed otherwise, the Act would take effect September 1, 2005. The District would be dissolved on September 1, 2007, if it is not confirmed by the voters by this date, and Special District Local Law Code, Chapter 8808 would likewise expire on September 1, 2010.

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 GCD 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. The bill requires that before a merger agreement with a WCID can be put to the voters, the TCEQ must determine that the District is capable of rendering adequate and continuous service.

13) State Water Plan Objectives- Water Plan:  Within Duval County, 94 percent of the total water use was groundwater in the year 2000. Nineteen percent of the groundwater use was for municipal purposes. The proposed district would be located over the Gulf Coast Aquifer. The county’s total water use to be included in the 2007 State Water Plan is projected to grow very little, from a year 2000 total of 12,264 acre feet of use to 13,577 acre feet of use in 2050.

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.