By: Calligari (Senate Sponsor - Averitt) H.B. No. 3335

(In the Senate - Received from the House May 18, 2009; May 19, 2009, read first time and referred to Committee on Natural Resources; May 23, 2009, reported adversely, with favorable Committee Substitute by the following vote: Yeas 9, Nays 0; May 23, 2009, sent to printer.)

COMMITTEE SUBSTITUTE FOR H.B. No. 3335 By: Averitt

A BILL TO BE ENTITLED

AN ACT

relating to the creation and powers of certain groundwater and surface water districts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. GENERAL LAW PROVISIONS

SECTION 1.01. Section 35.012, Water Code, is amended by amending Subsections (b) and (c) and adding Subsections (d) through (f) to read as follows:

(b) Except as provided under Section 35.013, within [Within] two years, but no sooner than 120 days, from the date on which the commission issues an order under Section 35.008 designating a priority groundwater management area, for those areas that are not within a district, the commission shall[:

[(1)] create one or more new districts under Section 36.0151[;

[(2) recommend that the areas, or a portion of the areas, be added to an existing district under Section 35.013; or

[(3) take any combination of the actions under Subdivisions (1) and (2)].

(c) Except as provided by Subsection (d), a district created under Section 36.0151 must be composed of territory within two or more contiguous counties, unless the commission determines that a district composed of territory within noncontiguous counties will result in more effective or efficient groundwater management than other legal options available to the commission.

(d) A district created under Section 36.0151 may be composed of territory that exists within the boundaries of a single county only if:

(1) the territory within the single county is the only area within the designated priority groundwater management area that is not within a district; or

(2) there are other areas within the designated priority groundwater management area, but:

(A) the other areas are not contiguous to the territory; and

(B) the commission determines that creating a single district composed of two or more of the noncontiguous areas, including the territory, would result in less effective or less efficient management of groundwater resources in the territory than creating a district composed of the territory within the single county.

(e) For purposes of this section, the commission may consider territory in two separately designated priority groundwater management areas to be within the same designated priority groundwater management area if:

(1) the priority groundwater management areas share a common boundary and one or more common aquifers; and

(2) the commission determines that a district composed of territory within the two areas will result in more effective or efficient groundwater management than other legal options available to the commission.

(f) Following the issuance of a commission order under Section 35.008, the Texas Agricultural Extension Service shall begin an educational program within such areas with the assistance and cooperation of the Texas Water Development Board, the commission, the Department of Agriculture, other state agencies, and existing districts to inform the residents of the status of the area's water resources and management options including possible formation of a district. The county commissioners court of each county in the priority groundwater management area shall form a steering committee to provide assistance to the Texas Agricultural Extension Service in accomplishing the goals of the education program within the area.

SECTION 1.02. Subsections (b), (c), (h), and (i), Section 35.013, Water Code, are amended to read as follows:

(b) The commission shall submit a copy of the order to the board of the district to which it is recommending the priority groundwater management area be added. The board shall vote not later than the 120th day after receiving the copy of the order from the commission on the addition of the priority groundwater management area to the district and shall advise the commission of the outcome.

(c) If the board votes to accept the addition of the priority groundwater management area to the district, the board:

(1) may request the Texas Agricultural Extension Service, the commission, and the Texas Water Development Board, with the cooperation and assistance of the Department of Agriculture and other state agencies, to administer an educational program to inform the residents of the status of the area's water resources and management options including possible annexation into a district;

(2) shall call an election to be held not later than the 270th day after the date of the board's vote under Subsection (b) within the priority groundwater management area, or portion of the priority groundwater management area, as delineated by the commission to determine whether [if] the priority groundwater management area will be added to the district; and

(3) shall designate election precincts and polling places for the elections in the order calling an election under this subsection.

(h) If the proposition is defeated, or if the board of the existing district votes not to accept the addition of the area to the district, then the commission shall, except as provided under Subsection (i), create under Section 36.0151 one or more districts covering the priority groundwater management area not later than the later of:

(1) the second anniversary of the date on which the commission issued its order under Section 35.008 designating a priority groundwater management area; or

(2) the 180th day after the date described under Subdivision (1) if the legislature is in session on the date described under Subdivision (1) and a bill has been filed and is pending before the legislature to create a district in all or part of the area or to add all or part of the area to an existing district [the first anniversary of the date on which the proposition is defeated or the board votes not to accept the area].

(i) In creating a district under Section 36.0151, the commission may modify the recommendation issued in its order for district creation under Section 35.008 to reflect the failure of an area to be added to an existing district or to account for the creation of any new districts or the addition of any other territory in the priority groundwater management area to an existing district during the intervening period, provided, however, that such modification does not affect the deadlines for district creation under Section 35.012 or this section. For an area that is not feasible for the creation of one or more districts as determined in the commission's findings under Section 35.008, the commission shall include in its report under Section 35.018 recommendations for the future management of the priority groundwater management area.

SECTION 1.03. Section 49.101, Water Code, is amended to read as follows:

Sec. 49.101. GENERAL. (a) All elections shall be generally conducted in accordance with the Election Code except as otherwise provided for by this code.

(b) Write-in candidacies for any district office shall be governed by Subchapter C, Chapter 146, Election Code.

(c) The board may contract with a person to serve as the district's agent in the same manner as another officer or employee of the district under Section 31.123, Election Code.

(d) Sections 32.009 and 42.002, Election Code, do not apply to an election held by a district.

(e) Notwithstanding the requirements of Section 32.051, Election Code, to serve as an election judge in an election held by a district, a person must be a registered voter of the county in which the district is located.

(f) Notwithstanding Sections 61.012 and 61.013, Election Code, a district is exempt from the acquisition, lease, or use of an electronic voting system for an election if:

(1) the election is a confirmation election or an election held jointly with a confirmation election on the same date and in conjunction with the confirmation election, except for an election in which a federal office appears on the ballot;

(2) the most recently scheduled district directors election was not held, as provided by Section 2.053(b), Election Code; or

(3) fewer than 250 voters voted at the most recently held district directors election.

(g) A district eligible for the exemption under Subsection (f) must publish notice in a periodical of general circulation in an area that includes the district and mail notice to each voter in the district regarding the district's intention to hold an election without providing a voting station that meets the requirements for accessibility under 42 U.S.C. Section 15481(a)(3) on election day and during the period for early voting by personal appearance. The notice must provide that any voter in the district may request the use of a voting station that meets those requirements to accommodate voting by a person with a disability and provide information on how to submit such a request. On receiving such a request, the district shall comply with the request.

SECTION 1.04. Subchapter D, Chapter 49, Water Code, is amended by adding Section 49.1045 to read as follows:

Sec. 49.1045. JOINT ELECTIONS WITH COUNTIES. (a) This section applies only to a district with 10 or fewer registered voters.

(b) A district that holds an election jointly with a county in which the district is wholly or partly located may provide for a certification of the voting results if the election results indicate that there were more votes cast in the election than the number of registered voters in the district. To certify the district votes, the district may have each person whose signature is on the sign-in sheet for the joint election certify the manner in which the person voted in the election and that the person was a qualified voter on the day of the election, and the certified votes shall be used as the official election results.

SECTION 1.05. Section 49.107, Water Code, is amended by adding Subsection (i) to read as follows:

(i) Section 375.161, Local Government Code, does not apply to an impact fee, tax, or other requirement for payment for water, sewer, drainage, reclamation, flood control, road, or park and recreational services or improvements of a district that provides, or proposes to provide, those services or improvements.

SECTION 1.06. Section 49.108, Water Code, is amended by adding Subsections (g), (h), (i), and (j) to read as follows:

(g) Not later than the 10th day before the date an election is held to authorize a contract, a substantially final form of the contract must be filed in the office of the district and must be open to inspection by the public. The contract is not required to be attached as an exhibit to the order calling the election to authorize the contract.

(h) A single contract may contain multiple purposes or facilities authorized by one or more constitutional provisions. A contract described by this subsection may be submitted for approval in a single proposition at an election.

(i) A contract between districts for the provision of facilities or services is not required to specify the maximum amount of bonds or expenditures authorized under the contract if the contract provides that the service area cannot be enlarged without the consent of at least two-thirds of the districts that are included in the service area or served by the facilities or services provided for in the contract.

(j) A contract may generally describe the facilities to be acquired or financed by the district without reference to specific constitutional provisions.

SECTION 1.07. Section 49.151(c), Water Code, is amended to read as follows:

(c) The board may allow disbursements of district money to be transferred by federal reserve wire system or by electronic means. The board by resolution may allow the wire or electronic transfers to accounts in the name of the district or accounts not in the name of the district.

SECTION 1.08. Section 49.194, Water Code, is amended by amending Subsections (a) and (b) and adding Subsection (h) to read as follows:

(a) Except as provided by Subsection (h), after [After] the board has approved the audit, it shall submit a copy of the report to the executive director for filing within 135 days after the close of the district's fiscal year.

(b) Except as provided by Subsection (h), if [If] the board refuses to approve the annual audit report, the board shall submit a copy of the report to the executive director for filing within 135 days after the close of the district's fiscal year, accompanied by a statement from the board explaining the reasons for its failure to approve the report.

(h) A special water authority shall submit a copy of the report to the executive director for filing within 160 days after the close of the special water authority's fiscal year.

SECTION 1.09. Section 49.213, Water Code, is amended by amending Subsection (c) and adding Subsection (d) to read as follows:

(c) A district may enter into contracts, which may be of unlimited duration, with persons or any public or private entities on the terms and conditions the board may consider desirable, fair, and advantageous for:

(1) the purchase or sale of water;

(2) the collection, transportation, treatment, and disposal of its domestic, industrial, and communal wastes or the collection, transportation, treatment, and disposal of domestic, industrial, and communal wastes of other persons;

(3) the gathering, diverting, and control of local storm water, or other local harmful excesses of water;

(4) the continuing and orderly development of the land and property within the district through the purchase, construction, or installation of works, improvements, facilities, plants, equipment, and appliances that the district may otherwise be empowered and authorized to do or perform so that, to the greatest extent reasonably possible, considering sound engineering and economic practices, all of the land and property may be placed in a position to ultimately receive the services of the works, improvements, plants, facilities, equipment, and appliances;

(5) the maintenance and operation of any works, improvements, facilities, plants, equipment, and appliances of the district or of another person or public or private entity;

(6) the collection, treatment, and disposal of municipal solid wastes; [and]

(7) the establishment, administration, and enforcement of a groundwater reduction plan to comply with regulatory requirements of a political subdivision whose main office is located in a county with a population of more than 3.3 million or in a county adjacent to such a county; and

(8) the exercise of any other rights, powers, and duties granted to a district.

(d) A written contract between a district and any person, including any public or private entity, for the provision of goods or services to the district, including a contract entered into with a governmental entity, other than a county, under Subsection (c)(7), is a contract subject to Subchapter I, Chapter 271, Local Government Code. The district and any person, including any public or private entity, waive sovereign immunity to suit for the purpose of adjudicating a claim for a breach of the contract, subject to the terms and conditions of Subchapter I, Chapter 271, Local Government Code.

SECTION 1.10. Section 49.216, Water Code, is amended by amending Subsection (e) and adding Subsection (f) to read as follows:

(e) Any peace officer who is directly employed by a district, before beginning to perform any duties and at the time of appointment, must take an oath and execute a bond conditioned on faithful performance of such officer's duties in the amount of $1,000 payable to the district. The oath and the bond shall be filed in the district office.

(f) A peace officer contracted for by the district, individually or through a county, sheriff, constable, or municipality, is an independent contractor, and the district is responsible for the acts or omissions of the peace officer only to the extent provided by law for other independent contractors.

SECTION 1.11. Section 49.273(d), Water Code, is amended to read as follows:

(d) For contracts over $50,000, the board shall advertise the letting of the contract, including the general conditions, time, and place of opening of sealed bids. The notice must [shall] be published in one or more newspapers circulated in each county in which part of the district is located. If one newspaper meets both of these requirements, publication in such newspaper is sufficient. If there are more than four counties in the district, notice may be published in any newspaper with general circulation in the district. The notice must [shall] be published once a week for two consecutive weeks before the date that the bids are opened, and the first publication must [shall] be not later than the 14th [21st] day before the date of the opening of the sealed bids.

SECTION 1.12. Section 49.351, Water Code, is amended by amending Subsections (a), (b), (c), (f), (i), and (l) and adding Subsection (m) to read as follows:

(a) A district providing potable water or sewer service to household users may establish, operate, and maintain, finance with ad valorem taxes, mandatory fees, or voluntary contributions, and issue bonds for a fire department to perform all fire-fighting services within the district as provided in this subchapter and may provide for [issue bonds or impose a mandatory fee, with voter approval, for financing a plan approved in accordance with this section, including] the construction and purchase of necessary buildings, facilities, land, and equipment and the provision of an adequate water supply.

(b) After complying with the requirements of this section [approval of the district electors of a plan to operate, jointly operate, or jointly fund the operation of a fire department, and after complying with Subsections (g), (h), and (i)], the district or districts shall provide an adequate system and water supply for fire-fighting purposes, may purchase necessary land, may construct and purchase necessary buildings, facilities, and equipment, and may employ or contract with a fire department to employ all necessary personnel including supervisory personnel to operate the fire department.

(c) Bonds shall be authorized and may be issued and ad valorem taxes shall be authorized and may be imposed for financing a plan approved in accordance with this section [shall be authorized and may be issued, and a district shall be authorized to levy a tax to pay the principal of and interest on such bonds,] as provided by law for authorization and issuance of other bonds and authorization and imposition of other ad valorem taxes of the district.

(f) Before a district imposes an ad valorem tax or issues bonds payable wholly or partly from ad valorem taxes to finance the establishment of [establishes] a fire department, a contract [contracts] to operate a joint fire department, or a contract [contracts] with another person to perform fire-fighting services within the district, the district must comply with the provisions of Subsections (g), (h), and (i). A district that funds fire-fighting services with revenue, including mandatory fees or voluntary contributions, is not required to comply with the provisions of Subsection (g), (h), or (i).

(i) After approval of a plan by the commission, the district shall submit to the electors of the district at the election to approve bonds payable wholly or partly from ad valorem taxes or to impose ad valorem taxes [to impose a mandatory fee] for financing the plan, [or if no bonds or fees are to be approved, at an election called for approval of the plan,] which may be held in conjunction with an election required by Section 49.102, the proposition of whether or not the plan should be implemented or entered into by the district. [The ballots at the election shall be printed, as applicable, to provide for voting for or against the proposition: "The implementation of the plan for (operation/joint operation) of a fire department"; or "The plan and contract to provide fire-fighting services for the district."]

(l) A [Notwithstanding the requirements of Subsections (a)-(j), a] district providing potable water or sewer service to household users may as part of its billing process collect from its customers a voluntary contribution on behalf of organizations providing fire-fighting services to the district. A district that chooses to collect a voluntary contribution under this subsection must give reasonable notice to its customers that the contribution is voluntary. Water and sewer service may not be terminated as a result of failure to pay the voluntary contribution.

(m) Notwithstanding Subsection (l), if a customer makes a partial payment of a district bill for water or sewer service and includes with the payment a voluntary contribution for fire-fighting services, the district shall apply the voluntary contribution first to the bill for water or sewer service, including any interest or penalties imposed. Any amount remaining shall be used for fire-fighting services.

SECTION 1.13. Section 49.4645(a), Water Code, is amended to read as follows:

(a) A district all or part of which is located in Bastrop County, Bexar County, Waller County, Travis County, Williamson County, Harris County, Galveston County, Brazoria County, Montgomery County, or Fort Bend County may issue bonds supported by ad valorem taxes to pay for the development and maintenance of recreational facilities only if the bonds are authorized by a majority vote of the qualified voters of the district voting in an election held for that purpose. The outstanding principal amount of bonds, notes, and other obligations issued to finance parks and recreational facilities supported by ad valorem taxes [payable from any source] may not exceed an amount equal to one percent of the value of the taxable property in the district as shown by the tax rolls of the central appraisal district at the time of the issuance of the bonds, notes, and other obligations or an amount greater than the estimated cost provided in the park plan under Subsection (b), whichever is smaller. The district may not issue bonds supported by ad valorem taxes to pay for the development and maintenance of:

(1) indoor or outdoor swimming pools; or

(2) golf courses.

SECTION 1.14. Section 51.523, Water Code, is amended to read as follows:

Sec. 51.523. BALLOTS. The ballot for an election under this subchapter shall be printed to provide for voting for or against defining the area to be taxed or designating the property to be served, affected, and taxed and, if applicable, issuing bonds and imposing a tax to retire the bonds or imposing a maintenance tax not to exceed the rate, which must be specified in the ballot proposition, provided by the proposed plan of taxation. [substantially the proposition: "Designation of the area, issuance of bonds, and levy of a tax to retire the bonds."]

SECTION 1.15. Section 51.527, Water Code, is amended by adding Subsection (c) to read as follows:

(c) Unless a maintenance tax is imposed in the defined area or on the designated property, once bonds issued for the defined area or designated property are paid off or defeased, the board may declare the defined area dissolved or may repeal the designation of the designated property, at which time the board shall cease imposing taxes on the property located in the defined area or on the designated property.

SECTION 1.16. Section 54.236, Water Code, is amended to read as follows:

Sec. 54.236. STREET OR SECURITY LIGHTING. Subject to the provisions of this section, a district may purchase, install, operate, and maintain street lighting or security lighting within public utility easements or public rights-of-way or property owned by the district [within the boundaries of the district]. A district, other than a district exercising powers under Section 54.234 or Subchapter N, Chapter 49, may not issue bonds supported by ad valorem taxes to pay for the purchase, installation, and maintenance of street or security lighting.

SECTION 1.17. Section 54.739, Water Code, is amended to read as follows:

Sec. 54.739. SUBSTITUTING PROPERTY [LAND] OF EQUAL VALUE. After the district is organized and has obtained voter approval for the issuance of, or has sold, bonds payable wholly or partly from ad valorem taxes, property [acquires facilities with which to function for the purposes for which it was organized, and votes, issues and sells bonds for such purposes, land] within the district boundaries subject to taxation that does not need or utilize the services of the district may be excluded and other property [land] not within the boundaries of the district may be included within the boundaries of the district without impairment of the security for payment of [the] bonds or invalidation of any prior bond election, as provided by this section and Sections 54.740 through 54.747.

SECTION 1.18. Section 54.744, Water Code, is amended to read as follows:

Sec. 54.744. IMPAIRMENT OF SECURITY. (a) For purposes of the board's consideration of the applications, the lands proposed for inclusion shall be deemed to be sufficient to avoid an impairment of the security for payment of obligations of the district if:

(1) according to the most recent tax roll of the district or the most recently certified estimates of taxable value from the chief appraiser of the appropriate appraisal district, the taxable value of such included lands equals or exceeds the taxable value of the excluded lands;

(2) either the estimated costs of providing district facilities and services to such included lands is equal to or less than the estimated costs of providing district facilities and services to the excluded lands or any increased estimated costs of providing district facilities and services to the included land, as determined by the district's engineer, can be amortized at prevailing bond interest rates and maturity schedules and the prevailing debt service tax rate of the district, as determined by the district's professional financial advisor, when applied to the increase in taxable value of the included land over the taxable value of the excluded land; and

(3) with respect only to a district with [the district's] outstanding bonds or contract obligations [are] payable in whole or in part by a pledge of net revenues from the ownership or operation of the district's facilities, [and] the projected net revenues to be derived from the property [lands] to be included during the succeeding 12-month period, as determined by the district's engineer, equals or exceeds the projected net revenues that would otherwise have been derived from the property [lands] to be excluded during the same period.

(b) For purposes of this section, the taxable value of included property means the market value of the property if, before or contemporaneously with the inclusion of the property in the district, the owner of the property waives the right to special appraisal of the property as to the district as authorized by Section 23.20, Tax Code.

SECTION 1.19. Section 388.005, Health and Safety Code, as amended by Chapters 262 (S.B. 12) and 939 (H.B. 3693), Acts of the 80th Legislature, Regular Session, 2007, is reenacted and amended to read as follows:

Sec. 388.005. ENERGY EFFICIENCY PROGRAMS IN INSTITUTIONS OF HIGHER EDUCATION[, STATE AGENCIES,] AND CERTAIN GOVERNMENTAL ENTITIES. (a) In this section:

(1) "Institution of higher education" includes an institution of higher education as defined by Section 61.003, Education Code, and a private institution of higher education that receives funding from the state.

(2) "Political subdivision" means:

(A) an affected county; or

(B) any political subdivision in a nonattainment area or in an affected county other than:

(i) a school district; or

(ii) a district as defined by Section 36.001 or 49.001, Water Code, that had a total annual electricity expense of less than $200,000 in the previous fiscal year of the district.

(3) "State agency" means a department, commission, board, office, council, or other agency in the executive branch of state government that is created by the constitution or a statute of this state and has authority not limited to a geographical portion of the state.

(b) Each political subdivision, institution of higher education, or state agency shall implement all energy efficiency measures that meet the standards established for a contract for energy conservation measures under Section 302.004(b), Local Government Code, in order to reduce electricity consumption by the existing facilities of the entity.

(c) Each political subdivision, institution of higher education, or state agency shall establish a goal to reduce the electric consumption by the entity by five percent each state fiscal year for six years, beginning September 1, 2007.

(d) A political subdivision, institution of higher education, or state agency that does not attain the goals under Subsection (c) must include in the report required by Subsection (e) justification that the entity has already implemented all available measures. An entity that submits a report under this subsection indicating it has already implemented all available measures is exempt from the annual reporting requirement of Subsection (e) if a subsequent report would indicate no change in status. An entity may be required to provide notice that it is exempt to the State Energy Conservation Office.

(e) A political subdivision, institution of higher education, or state agency annually shall report to the State Energy Conservation Office, on forms provided by that office, regarding the entity's efforts and progress under this section. The State Energy Conservation Office shall provide assistance and information to the entity to help the entity meet the goals set under this section.

(f) This section does not apply to a state agency or an institution of higher education that the State Energy Conservation Office determines that, before September 1, 2007, adopted a plan for conserving energy under which the agency or institution established a percentage goal for reducing the consumption of electricity. The exemption provided by this section applies only while the agency or institution has an energy conservation plan in effect and only if the agency or institution submits reports on the conservation plan each calendar quarter to the governor, the Legislative Budget Board, and the State Energy Conservation Office.

(g) This section does not apply to the electricity consumption of a district as defined by Section 36.001 or 49.001, Water Code, that relates to the operation and maintenance of wastewater collection and treatment, water supply and distribution, or stormwater diversion, detention, or pumping facilities or improvements.

SECTION 1.20. Section 43.0751(a)(1), Local Government Code, is amended to read as follows:

(1) "District" means a conservation and reclamation [water control and improvement] district [or a municipal utility district created or] operating under Chapter 49 [51 or 54], Water Code.

SECTION 1.21. Section 43.0751, Local Government Code, is amended by adding Subsection (r) to read as follows:

(r) To be annexed for limited purposes under this section, an area must be:

(1) in the municipality's extraterritorial jurisdiction; and

(2) contiguous to the corporate or limited purpose boundaries of the municipality, unless the district consents to noncontiguous annexation pursuant to a strategic partnership agreement with the municipality.

SECTION 1.22. Notwithstanding Section 35.012, Water Code, as amended by this article, and Section 36.0151, Water Code, the Texas Commission on Environmental Quality may not create a groundwater conservation district under Section 36.0151, Water Code, before September 1, 2011, in territory that exists within the boundaries of a single county in which total surface water use is more than 50 times the total groundwater production and that is located in a priority groundwater management area.

SECTION 1.23. Notwithstanding Section 35.012, Water Code, as amended by this article, and Section 36.0151, Water Code, the Texas Commission on Environmental Quality may not create a groundwater conservation district under Section 36.0151, Water Code, before September 1, 2011, in territory that is located in an area that on or after September 1, 2008, is designated by the commission as a priority groundwater management area.

ARTICLE 2. PRAIRIELANDS GROUNDWATER CONSERVATION DISTRICT

SECTION 2.01. The purpose of Chapter 8855, Special District Local Laws Code, as added by this article, is to establish the powers and authority of a certain district to be created in a part of this state that under Chapter 35, Water Code, the Texas Commission on Environmental Quality has designated a priority groundwater management area.

SECTION 2.02. Subtitle H, Title 6, Special District Local Laws Code, is amended by adding Chapter 8855 to read as follows:

CHAPTER 8855. PRAIRIELANDS GROUNDWATER CONSERVATION DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 8855.001. DEFINITIONS. In this chapter:

(1) "Board" means the board of directors of the district.

(2) "Director" means a member of the board.

(3) "District" means the Prairielands Groundwater Conservation District.

Sec. 8855.002. NATURE OF DISTRICT; FINDINGS. (a) The district is a groundwater conservation district initially composed of Ellis, Hill, Johnson, and Somervell Counties created under and essential to accomplish the purposes of Section 59, Article XVI, Texas Constitution.

(b) The district is created to serve a public use and benefit.

(c) All of the land and other property included within the boundaries of the district will be benefited by the works and projects that are to be accomplished by the district under powers conferred by this chapter and by Chapter 36, Water Code.

(d) Any fees imposed by the district under this chapter are necessary to pay for the costs of accomplishing the purposes of the district, including the conservation and management of groundwater resources, as provided by this chapter and Section 59, Article XVI, Texas Constitution.

Sec. 8855.003. DISTRICT TERRITORY. The initial boundaries of the district are coextensive with the boundaries of Ellis, Hill, Johnson, and Somervell Counties.

Sec. 8855.004. APPLICABILITY OF OTHER GROUNDWATER CONSERVATION DISTRICT LAW. Except as otherwise provided by this chapter, Chapter 36, Water Code, applies to the district.

Sec. 8855.005. CONSTRUCTION OF CHAPTER. This chapter shall be liberally construed to achieve the purposes expressed by this chapter and Chapter 36, Water Code. A power granted by this chapter or Chapter 36, Water Code, shall be broadly interpreted to achieve that intent and those purposes.

[Sections 8855.006-8855.020 reserved for expansion]

SUBCHAPTER B. INITIAL ORGANIZATION

Sec. 8855.021. APPOINTMENT OF INITIAL DIRECTORS. (a) The district is governed by a board of eight initial directors appointed as provided by Section 8855.051(a).

(b) Initial directors shall be appointed not later than the 90th day after the effective date of the Act enacting this chapter. If after the 90th day fewer than eight initial directors have been appointed, each unfilled initial director position shall be considered a vacancy and filled by the remaining initial directors.

(c) Except as provided under Subsection (b) for failure to appoint an initial director, if a vacancy occurs on the board in a position for which an initial director has previously been appointed, the appointing county commissioners court for the vacant position shall appoint a person to fill the vacancy in a manner that meets the representational requirements of Section 8855.051.

(d) To be eligible to serve as an initial director, a person must be a registered voter in the appointing county.

(e) Each initial director must qualify to serve as a director under Section 36.055, Water Code.

Sec. 8855.022. ORGANIZATIONAL MEETING OF INITIAL DIRECTORS. As soon as practicable after all the initial directors have qualified under Section 36.055, Water Code, a majority of the initial directors shall convene the organizational meeting of the district at a location in the district agreeable to a majority of the directors. If an agreement on location cannot be reached, the organizational meeting shall be held at a suitable location on the Hill College campus in Cleburne, Johnson County, Texas.

Sec. 8855.023. INITIAL TERMS. (a) The two initial directors appointed from each county shall draw lots to determine which director serves an initial term expiring August 31, 2011, and which director serves an initial term expiring August 31, 2013.

(b) Each successor director shall be appointed and shall serve in accordance with Subchapter C.

[Sections 8855.024-8855.050 reserved for expansion]

SUBCHAPTER C. BOARD OF DIRECTORS

Sec. 8855.051. GOVERNING BODY; TERMS. (a) Except as provided by Subchapter D, the district is governed by a board of eight directors appointed as follows:

(1) two directors appointed by the Ellis County Commissioners Court;

(2) two directors appointed by the Hill County Commissioners Court;

(3) two directors appointed by the Johnson County Commissioners Court; and

(4) two directors appointed by the Somervell County Commissioners Court.

(b) Directors serve staggered four-year terms, with the term of one director from each of the four counties expiring on August 31 of each odd-numbered year.

(c) A director may serve multiple consecutive terms.

Sec. 8855.052. DIRECTOR ELIGIBILITY; QUALIFICATION. (a) To be eligible to serve as a director, a person must be a registered voter in the appointing county.

(b) Each director must qualify to serve under Section 36.055, Water Code.

Sec. 8855.053. VACANCIES. If a vacancy occurs on the board, the appointing county commissioners court for the vacant position shall appoint a person to fill the vacancy. Section 36.051(c), Water Code, does not apply to the district.

Sec. 8855.054. COMPENSATION; REIMBURSEMENT. (a) Notwithstanding Sections 36.060(a) and (d), Water Code, a director may not receive compensation for performing the duties of director.

(b) A director is entitled to reimbursement of actual expenses reasonably and necessarily incurred while engaging in activities on behalf of the district.

[Sections 8855.055-8855.070 reserved for expansion]

SUBCHAPTER D. DISTRICT EXPANSION

Sec. 8855.071. EXPANSION OF DISTRICT BOUNDARIES. (a) After the effective date of the Act enacting this chapter, the district territory described in Section 8855.003 shall be expanded to include all of the territory in Navarro County, and the governing board described by Section 8855.051(a) shall be expanded to 10 members and include two directors appointed by the Navarro County Commissioners Court, if:

(1) pursuant to Chapter 35, Water Code, the Texas Commission on Environmental Quality designates all or any portion of the territory in Navarro County as a priority groundwater management area; and

(2) following the designation described by Subdivision (1), the commissioners court of Navarro County:

(A) adopts a resolution that states, "By this action of the Navarro County Commissioners Court, all of the territory in Navarro County, Texas, shall, as of the date of this resolution, be included in the boundaries of the Prairielands Groundwater Conservation District"; and

(B) appoints two directors who are registered to vote in Navarro County to the board.

(b) A person appointed under this section must qualify to serve under Section 36.055, Water Code.

(c) At the first regular meeting of the board following the qualification of both directors, the two directors appointed under this section shall draw lots to determine which director serves a term expiring August 31 of the first odd-numbered year after the directors' appointment, and which director serves a term expiring August 31 of the next odd-numbered year.

(d) A director appointed under this section shall otherwise serve in accordance with Subchapter C.

[Sections 8855.072-8855.100 reserved for expansion]

SUBCHAPTER E. POWERS AND DUTIES

Sec. 8855.101. GROUNDWATER CONSERVATION DISTRICT POWERS AND DUTIES. Except as provided by this chapter, the district has the powers and duties provided by the general law of this state applicable to groundwater conservation districts created under Section 59, Article XVI, Texas Constitution, including Chapter 36, Water Code.

Sec. 8855.102. CONTRACTS. The district may enter into a contract with any person, public or private, for any purpose authorized by law.

Sec. 8855.103. APPLICABILITY OF DISTRICT REGULATIONS. Groundwater regulation under this chapter applies to all persons except as exempted from permitting under Section 36.117, Water Code, or this chapter.

Sec. 8855.104. WELL SPACING RULES; EXEMPTIONS. (a) Except as provided by Subsection (b), the district shall exempt from the well spacing requirements adopted by the district any well that is completed on or before the effective date of those requirements.

(b) The district may provide by rule that a well may lose its exemption under this section if the well is modified in a manner that substantially increases the capacity of the well after the effective date of the well spacing requirements adopted by the district.

(c) Except as provided by this section and notwithstanding Section 8855.103, the district may require a well or class of wells exempt from permitting under Chapter 36, Water Code, to comply with the well spacing requirements adopted by the district. The district shall apply well spacing requirements uniformly to any well or class of wells based on the size or capacity of the well and without regard to the type of use of the groundwater produced by the well.

Sec. 8855.105. REGISTRATION AND REPORTING REQUIREMENTS FOR CERTAIN EXEMPT WELLS. The district may adopt rules that require the owner or operator of a well or class of wells exempt from permitting under Section 36.117, Water Code, to register the well with the district and, except for a well exempt from permitting under Section 36.117(b)(1), to report groundwater withdrawals from the well using reasonable and appropriate reporting methods and frequency.

Sec. 8855.106. ENFORCEMENT. (a) The district may enforce this chapter against any person in the manner provided by Chapter 36, Water Code. In lieu of a remedy available to the district under Section 36.102, Water Code, or in addition to those remedies, the district may impose a fee in addition to a fee assessed under Section 8855.152 on a person producing groundwater in violation of a district order or rule, including the failure or refusal to comply with any district order or rule relating to reducing or ceasing groundwater use. The purpose of a fee authorized by this subsection is to serve as a disincentive to producing groundwater except as authorized by the district.

(b) A fee imposed under Subsection (a) may not exceed an amount equal to 10 times the amount of a fee assessed under Section 8855.152.

[Sections 8855.107-8855.150 reserved for expansion]

SUBCHAPTER F. GENERAL FINANCIAL PROVISIONS

Sec. 8855.151. TAXES PROHIBITED. The district may not impose a tax. Sections 36.020(a) and 36.201-36.204, Water Code, do not apply to the district.

Sec. 8855.152. DISTRICT REVENUES. (a) The district by rule, resolution, or order may establish, amend, pledge, encumber, spend the proceeds from, and assess to any person production fees, based on the amount of groundwater authorized by permit to be withdrawn from a well or on the amount of water actually withdrawn, to enable the district to fulfill its purposes and regulatory functions as provided by this chapter. The district may use revenue generated by fees it assesses for any lawful purpose.

(b) Notwithstanding any provision of general law to the contrary, a fee authorized by Subsection (a) may not exceed:

(1) $1 per acre-foot annually for groundwater used for agricultural purposes; or

(2) 30 cents per thousand gallons annually for groundwater used for nonagricultural purposes.

(c) Notwithstanding any provision of general law or this chapter to the contrary, if any, the district may assess a production fee under this section for groundwater produced from a well or class of wells exempt from permitting under Section 36.117, Water Code, except for a well exempt from permitting under Section 36.117(b)(1). A production fee assessed by the district under this subsection must be based on the amount of groundwater actually withdrawn from the well and may not exceed the amount established by the district for permitted uses under Subsection (b)(2) of this section.

(d) Notwithstanding Section 36.1071(f), Water Code, the district by rule, resolution, or order before the adoption of its management plan may:

(1) establish, assess, and enforce the collection of production fees under this section; and

(2) establish and enforce metering and reporting requirements, except for a well exempt from permitting under Section 36.117(b)(1), Water Code.

(e) The district by rule may establish a temporary or permanent discounted fee rate for persons who prepay production fees to the district under this section on or before the dates established by district rule.

SECTION 2.03. (a) The legal notice of the intention to introduce this article of this Act, setting forth the general substance of this article, has been published as provided by law, and the notice and a copy of this article have been furnished to all persons, agencies, officials, or entities to which they are required to be furnished under Section 59, Article XVI, Texas Constitution, and Chapter 313, Government Code.

(b) The governor has submitted the notice and this article to the Texas Commission on Environmental Quality.

(c) The Texas Commission on Environmental Quality has filed its recommendations relating to this article with the governor, lieutenant governor, and speaker of the house of representatives within the required time.

(d) All requirements of the constitution and laws of this state and the rules and procedures of the legislature with respect to the notice, introduction, and passage of this article are fulfilled and accomplished.

ARTICLE 3. EFFECTIVE DATES

SECTION 3.01. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2009.

(b) Sections 1.01 and 1.02 of this Act take effect immediately if this Act receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, Sections 1.01 and 1.02 of this Act take effect September 1, 2009.

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