By: Phillips H.B. No. 4736

A BILL TO BE ENTITLED

AN ACT

relating to the creation of the Red River Groundwater Conservation District; providing authority to issue bonds.

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

SECTION 1. Subtitle H, Title 6, Special District Local Laws Code, is amended by adding Chapter XXXX to read as follows:

CHAPTER XXXX. RED RIVER GROUNDWATER CONSERVATION DISTRICT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. XXXX.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 Red River Groundwater Conservation District.

(4) "Special district" means a district created under the authority of Section 59, Article XVI, or Section 52, Article III, Texas Constitution, with the authority to provide retail water service in the district.

(5) "Water supply corporation" means a corporation as defined under Section 67.001, Water Code.

Sec. XXXX.002. NATURE OF DISTRICT; FINDINGS. (a) The district is a groundwater conservation district comprised of all of the territory within Grayson and Fannin 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. XXXX.003. DISTRICT TERRITORY. The territory of the district shall encompass all of the territory within Grayson County and Fannin County.

Sec. XXXX.004. APPLICABILITY OF OTHER GROUNDWATER CONSERVATION DISTRICT LAW. Except as otherwise provided by this chapter, Chapter 36, Water Code, applies to the district. Subchapter B, Chapter 36, Water Code, does not apply to the district.

Sec. XXXX.005. CONSTRUCTION OF CHAPTER. This chapter shall be liberally construed to achieve the purposes expressed herein, and the purposes of Chapter 36, Water Code. A power granted by Chapter 36, Water Code, or this chapter shall be broadly interpreted to achieve that intent and those purposes.

[Sections XXXX.006-XXXX.020 reserved for expansion]

SUBCHAPTER B. ADMINISTRATION

Sec. XXXX.021. BOARD OF DIRECTORS. (a) The district is governed by a board of seven directors.

(b) Initial directors serve until permanent directors are appointed pursuant to Section XXXX.022.

(c) Permanent directors each serve a term that expires on August 31 at the conclusion of four years. New terms shall begin on September 1 following the expiration of the preceding term.

(d) Each director must qualify to serve as a director in accordance with Section 36.055, Water Code.

(e) A director serves until the director's successor has qualified to serve.

(f) To be eligible for appointment as a director, a person must be registered to vote in the appointing county.

(g) A position on the board shall not be construed to be a civil office of emolument for any purpose, including a purpose described in Section 40, Article XVI, Texas Constitution. A person who qualifies to serve on the board shall be qualified to serve as a director and participate in all votes relating to the business of the district regardless of any common law doctrine or any statutory conflicts of interest, incompatibility, or similar provision to the contrary. Section 36.058, Water Code, does not apply to the district.

Sec. XXXX.022. APPOINTMENT OF DIRECTORS. (a) The permanent directors shall be appointed as follows:

(1) the Commissioners Court of Fannin County shall select and appoint one director at its sole discretion;

(2) the Commissioners Court of Fannin County shall appoint one director selected from among nominees made to the Commissioners Court prior to the date of the appointment by the governing bodies of the municipalities in Fannin County;

(3) the Commissioners Court of Fannin County shall appoint one director selected from among nominees made to the Commissioners Court prior to the date of the appointment by the special districts and water supply corporations that provide retail water service to customers in Fannin County;

(4) the governing body of the municipality in Grayson County with the largest annual production of groundwater by volume for the preceding four years shall appoint two directors;

(5) the governing bodies of the municipalities in Grayson County, other than the governing body of the municipality described in Subsection (a)(4), shall jointly appoint one director; and

(6) the governing boards of all special districts and water supply corporations that provide retail water service to customers in Grayson County shall jointly appoint one director.

(b) Permanent directors shall be appointed not later than the second Monday in each August prior to the beginning of a new term under Section XXXX.021(c).

(c) Not later than the 60th day before the deadline for appointments provided in Subsection (b), the district shall mail written notice to each person required to make an appointment pursuant to Subsection (a) that the appointment is due.

(d) The board shall by rule adopt an appointment process for permanent directors providing for the written submission of appointments to the district by those persons designated in Subsection (a) to appoint permanent directors.

(e) If there is a vacancy on the board, the appropriate person designated under Subsection (a) shall appoint a director to serve the remainder of the unexpired term.

(f) The persons responsible for providing nominations under Subsections (a)(2) and (3) shall have until 30 days before the director appointments are due under the applicable provisions of this chapter to submit their nominations to the Commissioners Court of Fannin County.

(g) If at least one nomination for each director position to be appointed under Subsections (a)(2) and (3) is not provided to the Commissioners Court of Fannin County by the deadline established in Subsection (f), the Commissioners Court of Fannin County may make the required number of appointments from nominees of the court's own choosing.

(h) Notwithstanding anything to the contrary in this chapter, a municipality, special district, or water supply corporation otherwise authorized to participate in the director appointments described under Subsection (a)(2),(3),(5), or (6), is not eligible to participate in the applicable appointment process described under those subsections unless it has actually used groundwater produced from wells located within the district to provide retail water service in the district within the calendar year of the appointment or preceding calendar year. In implementing Subsection (d), the board may require a municipality, special district, or water supply corporation to provide evidence of groundwater use as described by this subsection as a condition of eligibility to participate in the appointments process.

Sec. XXXX.023. APPOINTMENT OF INITIAL DIRECTORS. (a) Not later than the 30th day after the effective date of the Act enacting this chapter, the persons designated in Sections XXXX.022(a)(1), (2), (3) and (4) to appoint permanent directors shall appoint initial directors as prescribed by Section XXXX.022 and shall submit the names of their appointments in writing to the county judge of Fannin County. The persons responsible for providing nominations under Sections XXXX.022(a)(2) and (3) shall have until 10 days before the initial director appointments are due to submit their nominations to the Commissioners Court of Fannin County.

(b) Not later than the 30th day after the effective date of the Act enacting this chapter, the county judge of Fannin County shall set the date, time and location for a meeting of the representatives designated under Subsection (d) of this section for the appointment of initial directors by those persons authorized to appoint permanent directors under Sections XXXX.022(a)(5) and (6).

(c) The county judge of Fannin County shall give notice of the meeting required pursuant to Subsection (b) by providing notice to the county clerk of Fannin County for public posting and by mailing the notice to the Commissioners Court of Grayson County no less than 20 days before the date of the meeting.

(d) The governing body of each entity identified in Sections XXXX.022(a)(5) and (6) shall designate a representative to attend the meeting described in Subsection (b). Failure of a governing body to designate a representative shall not invalidate the appointment process for initial directors.

(e) The governing body of each entity identified in Sections XXXX.022(a)(5) and (6) is entitled to one vote for its respective appointment, which shall be cast by the representative designated pursuant to Subsection (d).

(f) The county judge of Fannin County shall preside at the meeting described under Subsection (b) and may require persons in attendance to provide evidence demonstrating their representative authority under Subsection (e) and demonstrating their qualification to participate as groundwater users under Section XXXX.022(h). The county judge of Fannin County shall certify in writing to the board and to the executive director of the Texas Commission on Environmental Quality the results of the meeting, including:

(1) the identity of each representative described under Subsection (d) of this section that was in attendance at the meeting; and

(2) the names of each appointment made pursuant to Subsection (b).

(g) The county judge of Fannin County shall also include in the certification required pursuant to Subsection (f) the names and, where appropriate, the terms, of each appointment made pursuant to Subsection (a).

(h) If the county judge of Fannin County fails to perform any of the duties set forth under section prior to the expiration of 90 days after the effective date of the Act enacting this chapter, the executive director of the Texas Commission on Environmental Quality shall perform any duties not performed by the county judge so as to accomplish the appointment of initial directors under this section.

Sec. XXXX.024. TERMS OF OFFICE FOR INITIAL DIRECTORS. (a) The following initial directors shall serve from the date of appointment until August 31, 2011:

(1) the initial director selected and appointed by the Commissioners Court of Fannin County under Section XXXX.022(a)(1);

(2) one initial director appointed by the governing body of the municipality under Section XXXX.022(a)(4); and

(3) the initial director appointed by the governing bodies of the municipalities under Section XXXX.022(a)(5).

(b) The following initial directors shall serve from the date of appointment until August 31, 2013:

(1) the initial directors appointed by the Commissioners Court of Fannin County under Sections XXXX.022(a)(2) and (3);

(3) one initial director appointed by the governing body of the municipality under Section XXXX.022(a)(4); and

(3) the initial director appointed by the governing boards of all special districts and water supply corporations that provide retail water service to customers in Grayson County under Section XXXX.022(a)(6).

(c) The person responsible for the appointment of directors under Section XXXX.022(a)(4) shall, for each initial director appointment, indicate in its submission made pursuant to Section XXXX.023(a) whether the initial director is to serve a term ending August 31, 2011, or August 31, 2013.

Sec. XXXX.025. ORGANIZATIONAL MEETING. (a) As soon as is practicable after all of the initial directors have been appointed, a majority of initial directors shall convene an organizational meeting of the district at a location within the district that is determined by a majority of the initial directors.

(b) If the majority of initial directors cannot agree upon a location for the organizational meeting required pursuant to Subsection (a), the meeting shall be held at the Grayson County Courthouse.

Sec. XXXX.026. BOARD OFFICERS. The initial directors shall, at the organizational meeting, elect officers of the board in accordance with Section 36.054(b), Water Code.

Sec. XXXX.027. QUORUM; CONCURRENCE FOR TRANSACTING BUSINESS. (a) A majority of the board membership constitutes a quorum for any meeting and a concurrence of a majority of the board shall be sufficient to transact the business of the district, except as provided by Subsection (b).

(b) Notwithstanding Section 36.053, Water Code, a concurrence of no fewer than six directors is required for transacting the following business of the district:

(1) establishing or amending any groundwater production fees assessed by the district based on the amount of groundwater authorized by permit to be withdrawn from a well or on the amount of water actually withdrawn, as set forth under Section XXXX.152;

(2) adopting the annual budget of the district; and

(3) except as provided by Subsection (c), taking action to grant or deny a permit or permit amendment application for a well to produce water within the district which will be subsequently transported for use, in whole or in part, outside of the boundaries district.

(c) A concurrence of a majority of the board membership shall be sufficient to take action to grant or deny a permit or permit amendment application by a retail public utility that provides retail water service in the district for a well to produce water within the district and inside the boundaries or certificated service area of a retail public utility and transport the water to a location of use outside of the district if the water is used within the same certificated service area or boundaries of the same retail public utility.

Sec. XXXX.028. DECENNIAL REVIEW OF DISTRICT REPRESENTATION. (a) The board shall complete a review not later than January 1, 2019, and every 10 years thereafter, of the adequacy of representation of water users on the board based on groundwater production and use within the district.

(b) The board shall submit a report to each member of the House of Representatives and each member of the Senate of the State of Texas whose legislative district includes territory in the district not later than 20 days following the completion of the report required pursuant to Subsection (a) describing the review conducted and providing any recommendations by the board regarding changes to the apportionment of directors and the representational structure of the board.

Sec. XXXX.029. 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 XXXX.030-XXXX.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. XXXX.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, including Chapter 36, Water Code, and Section 59, Article XVI, Texas Constitution, applicable to groundwater conservation districts.

Sec. XXXX.102. CONTRACTS. The district may enter into a contract with any person, public or private, for any purpose authorized by law.

Sec. XXXX.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. XXXX.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 production capacity of the well, or the well pump or related equipment, is substantially altered so that the capacity of the well or pump after the effective date of the well spacing requirements adopted by the district is materially enhanced.

(c) Except as provided by this section and notwithstanding Section XXXX.103, the district may require any 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. XXXX.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 Subsection (b)(1) of that section, to report groundwater withdrawals from the well using reasonable and appropriate reporting methods and frequency.

Sec. XXXX.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 XXXX.152 on a person producing groundwater in violation of a rule of the district, including the failure or refusal to comply with any order or rule of the district to reduce or cease groundwater usage. The purpose of a fee authorized under 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 XXXX.152.

[Sections XXXX.107-XXXX.150 reserved for expansion]

SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS

Sec. XXXX.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. XXXX.152. DISTRICT REVENUES. (a) The district by rule, resolution, or order may establish, amend, pledge, encumber, expend 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 revenues 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 for each acre-foot of groundwater produced annually and used for agricultural purposes; or

(2) 30 cents for each one thousand gallons of groundwater produced annually and used for nonagricultural purposes.

(c) Notwithstanding any provision of general law or this chapter to the contrary, 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), Water Code. 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.

(f) The district may not assess fees for transporting water that is produced within the district inside the boundaries or certificated service area of a retail public utility by a retail public utility that provides retail water service in the district to a location of use outside of the district if the water is used within the same certificated service area or boundaries of the same retail public utility.

SECTION 2. The Legislature finds that for purposes of Section XXXX.022(a)(4), Special District Local Laws Code, as added by this Act, the City of Sherman is the municipality in Grayson County with the largest annual production of groundwater by volume for the preceding fours years as of the effective date of this Act.

SECTION 3. (a) The legal notice of the intention to introduce this Act, setting forth the general substance of this Act, has been published as provided by law, and the notice and a copy of this Act 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 Act to the Texas Commission on Environmental Quality.

(c) The Texas Commission on Environmental Quality has filed its recommendations relating to this Act 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 Act are fulfilled and accomplished.

SECTION 4. This Act takes effect September 1, 2009.