By: Isaac, Rodriguez of Travis H.B. No. 3405

(Senate Sponsor - Campbell)

(In the Senate - Received from the House May 11, 2015; May 15, 2015, read first time and referred to Committee on Agriculture, Water, and Rural Affairs; May 20, 2015, reported adversely, with favorable Committee Substitute by the following vote: Yeas 6, Nays 0; May 20, 2015, sent to printer.) Click here to see the committee vote

COMMITTEE SUBSTITUTE FOR H.B. No. 3405 By: Perry

A BILL TO BE ENTITLED

AN ACT

relating to the territory, jurisdiction, board composition, elections, and powers of the Barton Springs-Edwards Aquifer Conservation District, including its authority to regulate certain wells for the production of groundwater; imposing a cap on certain fees.

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

SECTION 1. Section 8802.003, Special District Local Laws Code, is amended to read as follows:

Sec. 8802.003. DISTRICT TERRITORY. (a) The district is composed of:

(1) the territory described by the Texas Water Commission's August 15, 1986, order, as that territory may have been modified:

(A) by actions of the board through resolutions dated August 8, 1987, August 13, 1987, January 24, 2002, May 10, 2002, and June 23, 2011; or

(B) under:

(i) [(1)] Subchapter J, Chapter 36, Water Code; or

(ii) [(2)] other law;

(2) the shared territory described by Section 8802.0035(a); and

(3) the territory described as follows: beginning at a point at the intersection of the northeastern district boundary as it existed on January 1, 2015, and the Colorado River, running east along the southern bank of the Colorado River to a point where the Colorado River intersects U.S. Highway 183, then south along U.S. Highway 183 to a point where U.S. Highway 183 intersects the current eastern boundary of the district, then generally west and north following along the district boundary as it existed on January 1, 2015, to the place of beginning.

(b) Any boundary reference under Subsection (a)(3) to a highway, street, road, avenue, boulevard, or lane shall mean the centerline of the boundary.

SECTION 2. Subchapter A, Chapter 8802, Special District Local Laws Code, is amended by adding Section 8802.0035 to read as follows:

Sec. 8802.0035. SHARED TERRITORY; JURISDICTION. (a) The territory of the district includes any territory that is:

(1) inside the boundaries of the Edwards Aquifer Authority;

(2) in Hays County; and

(3) not within the boundaries existing as of January 1, 1989, of any other district with the authority to regulate groundwater under Chapter 36, Water Code, or prior laws.

(b) The Edwards Aquifer Authority has jurisdiction over any well that is drilled to produce water from the Edwards Aquifer in the shared territory described by Subsection (a).

(c) The district has jurisdiction over groundwater and any well that is drilled to produce water from any aquifer other than the Edwards Aquifer in the shared territory described by Subsection (a).

(d) The district has jurisdiction over groundwater and any well that is drilled to produce water from the Edwards Aquifer or any other aquifer in the territory described by Section 8802.003(a)(1) or (3). For territory annexed in accordance with board resolutions dated January 24, 2002, the district shall share jurisdiction with the Plum Creek Conservation District, which also includes that territory. Jurisdiction shall be shared under the terms of an agreement authorized by Chapter 791, Government Code, in a manner that ensures that the districts do not exercise their jurisdiction in the shared territory at the same time and for the same purpose.

(e) The district's jurisdiction over any well that is drilled to produce water in the territory described in Section 8802.003(a)(1), including a well that is used to recover water that has been injected as part of an aquifer storage and recovery project, applies to the territory described by Section 8802.003(a)(3) and all wells for which the district has jurisdiction in the shared territory described by this section.

SECTION 3. Sections 8802.051 and 8802.052, Special District Local Laws Code, are amended to read as follows:

Sec. 8802.051. DIRECTORS; TERMS. (a) The district is governed by a board of seven [five] directors who serve staggered four-year terms.

(b) Three [At least two] directors must be elected by voters residing in the territory composed of:

(1) director districts four and five as adopted by the district on November 17, 2011; and

(2) the territory described by Section 8802.003(a)(3) [city of Austin].

(c) Four directors must be elected by voters residing outside the territory described by Subsection (b) and two of the four directors must reside in Hays County.

Sec. 8802.052. ELECTION DATE. An election shall be held to elect the appropriate number of directors on the [spring] uniform election date in November of each even-numbered year.

SECTION 4. Section 8802.053, Special District Local Laws Code, is amended by amending Subsections (a), (c), and (d) and adding Subsection (f) to read as follows:

(a) The district is divided into seven [five] numbered, single-member districts for electing directors.

(c) As soon as practicable after the publication of each federal decennial census, the board shall revise the single-member districts as the board considers appropriate to reflect population changes. When the board revises the single-member districts under this subsection, the board shall place three [two] of the districts entirely inside and four of the districts entirely outside the territory described by Section 8802.051(b) [:

[(1) entirely within the boundaries of the city of Austin, as those boundaries exist at that time; or

[(2) within the boundaries of the city of Austin, as those boundaries exist at that time, but also including unincorporated areas or other municipalities that are surrounded wholly or partly by the boundaries of the city of Austin if the areas or municipalities are noncontiguous to the territory of any other single-member district].

(d) If the district is required to create single-member districts that do not comply with Sections 8802.051(b) and (c) to satisfy standards under federal law, the board shall revise the single-member districts as the board considers appropriate under the federal law standards [Changes in the boundaries of the city of Austin between revisions of the single-member districts under Subsection (c) do not affect the boundaries of the single-member districts].

(f) At the first regularly scheduled election of directors after the board is expanded from five to seven directors, directors elected to fill any vacant positions shall cast lots to determine which of those directors shall serve a two-year term and which shall serve a four-year term. Lots must be determined so that not more than four directors' terms expire in any even-numbered year.

SECTION 5. Section 8802.1045, Special District Local Laws Code, is amended by adding Subsection (g) to read as follows:

(g) Notwithstanding Subsection (b), before January 1, 2017, the board may not charge an annual production fee higher than the rates set forth under Subsection (a) for a well located in the territory described by Section 8802.003(a)(3) or 8802.0035(a). The district may increase the annual production fee under this subsection by not more than 10 cents per thousand gallons per year beginning January 1, 2018, for water permitted for nonagricultural purposes, until the annual production fee is equal to the maximum amount set forth in Subsection (b).

SECTION 6. Section 8802.105, Special District Local Laws Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) In this section, "Consumer Price Index" means the annual revised Consumer Price Index for All Urban Consumers, as published by the Bureau of Labor Statistics of the United States Department of Labor or a similar index if that index is unavailable. For calculation purposes, the beginning base month is December 2014.

(a-1) Each year the board may assess against the City of Austin a water use fee in an amount not to exceed the lesser of $1 million as adjusted to reflect the percentage change during the preceding year in the Consumer Price Index or 60 percent of the total funding the district expects to receive for the next fiscal year from water use fees assessed against Austin and other nonexempt users in that year as computed [, subject to the computation] under Subsection (b).

SECTION 7. Subchapter C, Chapter 8802, Special District Local Laws Code, is amended by adding Sections 8802.111 and 8802.112 to read as follows:

Sec. 8802.111. AUTHORITY TO CONSIDER MITIGATION PLAN. (a) If an applicant for a permit or permit amendment submits to the district with the permit application or permit amendment application a plan for mitigating any negative impacts to groundwater resources or to other wells that may arise from the production of groundwater by the well or wells for which the permit or permit amendment is sought, the district may:

(1) consider the plan for mitigation in deciding whether to grant or deny the application; and

(2) include special terms and conditions requiring mitigation in a permit or permit amendment that is approved by the board for the applicant.

(b) Regardless of whether an applicant for a permit or permit amendment submits to the district a plan for mitigation, the district and an applicant may negotiate a plan to mitigate any negative impacts to groundwater resources or to other wells that may arise from the production of groundwater by the well or wells for which the permit or permit amendment is sought, and the district may include the negotiated mitigation plan as a special term or condition of the permit or permit amendment. The district may not require an applicant to agree to a mitigation plan that was not submitted by the applicant.

(c) A mitigation plan described by Subsection (a) or (b) may include payment of a fee by the applicant for a permit or permit amendment to the district in an amount sufficient to mitigate the effects of reduced artesian pressure or the drawdown of the water table on other wells in the district. If the mitigation plan is approved by the district as a special term or condition of the permit as submitted by, or as negotiated with, the applicant, the district shall establish written procedures for the use of revenue derived from fees paid by the applicant as part of the mitigation plan and shall include the written procedures as a special term or condition of the permit or permit amendment. The written procedures may include use of the mitigation plan fee revenue to deepen water wells or to lower pumps, to drill and equip new wells, or to take other measures to mitigate impacts on water wells that are negatively impacted by the production of groundwater by the well or wells for which the permit or permit amendment is approved by the district.

(d) Nothing in this section shall be construed to limit the authority of the district to include as a special term or condition of a permit a requirement that the permit holder reduce or cease groundwater production during certain hydrological conditions.

Sec. 8802.112. CERTAIN PERMITS; REDUCTION ORDERS; CONTESTED CASE HEARINGS. (a) In this section, "maximum production capacity" means the maximum production capacity of a well, which may be based on a 36-hour pump test conducted at the time the well was initially constructed or placed into service.

(b) A person operating a well before the effective date of the Act enacting this section or who has entered into a contract before that date to drill or operate a well that is or will be located in the territory described by Section 8802.003(a)(3) or 8802.0035(a) that is subject to the jurisdiction of the district shall file an administratively complete permit application with the district not later than three months after the effective date of the Act enacting this section for the drilling, equipping, completion, or operation of any well if the well requires a permit under the rules or orders of the district. The person may file the permit application for an amount of groundwater production not to exceed the maximum production capacity of the well.

(c) The district shall issue a temporary permit to a person who files an application under Subsection (b) without a hearing on the application not later than the 30th day after the date of receipt of the application. The district shall issue the temporary permit for the groundwater production amount set forth in the application. The temporary permit issued under this subsection shall provide the person with retroactive and prospective authorization to drill, operate, or perform another activity related to a well for which a permit is required by the district for the period of time between the effective date of the Act enacting this section and the date that the district takes a final, appealable action on issuance of a regular permit pursuant to the permit application if:

(1) the person's drilling, operating, or other activities associated with the well are consistent with the authorization sought in the permit application;

(2) the person timely pays to the district all administrative fees and fees related to the amount of groundwater authorized to be produced pursuant to the temporary permit in the same manner as other permit holders in the district; and

(3) the person complies with other rules and orders of the district applicable to permit holders.

(d) The temporary permit issued under Subsection (c) does not confer any rights or privileges to the permit holder other than those set forth in this section. After issuing the temporary permit, the district shall process the permit application for notice, hearing, and consideration for issuance of a regular permit consistent with this section. The district, after notice and hearing, shall issue an order granting the regular permit authorizing groundwater production in the amount set forth in the temporary permit unless the district finds that authorizing groundwater production in the amount set forth in the temporary permit issued under Subsection (c) is causing a failure to achieve applicable adopted desired future conditions for the aquifer.

(e) To reduce the amount of groundwater authorized to be produced under a temporary permit issued under Subsection (c) or a regular permit issued under Subsection (d), the district must show by a preponderance of the evidence that the amount of groundwater being produced under the permit is causing a failure to achieve applicable adopted desired future conditions for the aquifer. A person who relies on the temporary permit granted by Subsection (c) to drill, operate, or engage in other activities associated with a water well assumes the risk that the district may grant or deny, wholly or partly, the permit application when the district takes final action after notice and hearing to issue a regular permit pursuant to the application.

(f) The holder of a temporary permit or a regular permit subject to a district order under this section to reduce the amount of groundwater production from the permitted well may contest any reduction in the amount of production from the permitted well by requesting a contested case hearing on the reduction order to be conducted by the State Office of Administrative Hearings in the manner provided by Sections 36.416, 36.4165, and 36.418, Water Code. The district shall contract with the State Office of Administrative Hearings to conduct the hearing as provided by those sections of the Water Code. To the extent possible, the State Office of Administrative Hearings shall expedite a hearing under this subsection.

(g) For the State Office of Administrative Hearings to uphold a district order reducing the amount of groundwater authorized to be produced under a temporary or regular permit, the district must demonstrate by a preponderance of the evidence that the reduction is necessary to prevent a failure to achieve applicable adopted desired future conditions for the aquifer.

SECTION 8. (a) The legislature validates and confirms all acts and proceedings of the board of directors of the Barton Springs-Edwards Aquifer Conservation District that were taken before the effective date of this Act.

(b) Subsection (a) of this section does not apply to any matter that on the effective date of this Act:

(1) is involved in litigation if the litigation ultimately results in the matter being held invalid by a final judgment of a court; or

(2) has been held invalid by a final judgment of a court.

SECTION 9. (a) Not later than three months after the effective date of this Act, the board of directors of the Barton Springs-Edwards Aquifer Conservation District shall appoint one temporary director to the board to represent the territory described by Section 8802.003(a)(3), Special District Local Laws Code, as added by this Act, and one temporary director to represent the territory described by Section 8802.0035(a), Special District Local Laws Code, as added by this Act.

(b) The temporary directors appointed under Subsection (a) of this section shall serve at large until the next general election of directors of the district under Section 8802.052, Special District Local Laws Code, as amended by this Act.

(c) The board of directors of the Barton Springs-Edwards Aquifer Conservation District shall adjust the board member terms of office to conform to the new election date under Section 8802.052, Special District Local Laws Code, as amended by this Act.

SECTION 10. (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, one of the required recipients, 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, the lieutenant governor, and the 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 11. This Act takes effect immediately if it 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, this Act takes effect September 1, 2015.

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