By: Hinojosa S.B. No. 1738

(In the Senate - Filed March 13, 2015; March 24, 2015, read first time and referred to Committee on Agriculture, Water, and Rural Affairs; April 22, 2015, reported adversely, with favorable Committee Substitute by the following vote: Yeas 7, Nays 0; April 22, 2015, sent to printer.) Click here to see the committee vote

COMMITTEE SUBSTITUTE FOR S.B. No. 1738 By: Hinojosa

A BILL TO BE ENTITLED

AN ACT

relating to the diversion and use of marine seawater, including the development of marine seawater desalination projects, integrated marine seawater desalination and power projects, and facilities for the storage, conveyance, and delivery of desalinated marine seawater.

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

SECTION 1. (a) With this state facing an ongoing drought, continuing population growth, and the need to remain economically competitive, every effort must be made to secure and develop plentiful and cost-effective water supplies to meet the ever-increasing demand for water. The purpose of this Act is to expedite the development of marine seawater from the Gulf of Mexico and add this new source of water to this state's existing surface water and groundwater resources in order to bring into balance the supply of and demand for water in this state.

(b) Currently, the projected long-term water needs of this state far exceed the firm supplies that are available and that can reasonably be made available from freshwater sources within this state. The legislature recognizes the importance of providing for this state's current and future water needs at all times, including during severe droughts.

(c) In this state, marine seawater is a potential new source of public drinking water. This state has access to over 600 quadrillion gallons of marine seawater from the Gulf of Mexico. The purpose of this Act is to streamline the process for and reduce the cost and regulation of marine seawater desalination.

(d) The legislature finds that marine seawater desalination projects should be cost-effectively and timely developed, concurrently with other water planning solutions, to help this state meet its current and future firm water needs.

(e) The legislature finds that it is necessary and appropriate to grant certain rights or authority and provide for expedited and streamlined permitting for marine seawater desalination projects and integrated marine seawater desalination and power projects in order to avoid unnecessary costs, delays, and uncertainty and thereby help justify the investment of significant resources of this state in the development of such projects.

SECTION 2. Section 11.002, Water Code, is amended by adding Subdivision (22) to read as follows:

(22) "Marine seawater" has the meaning assigned by Section 18.001.

SECTION 3. Section 11.121, Water Code, is amended to read as follows:

Sec. 11.121. PERMIT REQUIRED. Except as provided in Sections 11.142, 11.1421, [and] 11.1422, and 11.1423 [of this code], no person may appropriate any state water or begin construction of any work designed for the storage, taking, or diversion of water without first obtaining a permit from the commission to make the appropriation.

SECTION 4. Subchapter D, Chapter 11, Water Code, is amended by adding Section 11.1423 to read as follows:

Sec. 11.1423. PERMIT EXEMPTION FOR USE BY WATER SUPPLY ENTITY OF MARINE SEAWATER. (a) In this section, "water supply entity" includes:

(1) a retail public utility as defined by Section 13.002;

(2) a wholesale water supplier; or

(3) an irrigation district operating under Chapter 58.

(b) Without obtaining a permit, a water supply entity may divert marine seawater from the Gulf of Mexico at one or more points of diversion located at least three miles from the coast of this state and use the seawater diverted for any beneficial purpose.

(c) Before a water supply entity first diverts marine seawater under Subsection (b), the entity must give notice to the commission of the proposed diversion.

(d) A water supply entity must treat marine seawater so that it meets the water quality level of the receiving stream before the entity may put the water into a stream under an authorization granted under Section 11.042.

(e) This section does not prohibit a water supply entity from conveying water under this section in any other manner authorized by law, including through the use of facilities owned or operated by the state if authorized by the state.

SECTION 5. Section 16.053(e), Water Code, is amended to read as follows:

(e) Each regional water planning group shall submit to the development board a regional water plan that:

(1) is consistent with the guidance principles for the state water plan adopted by the development board under Section 16.051(d);

(2) provides information based on data provided or approved by the development board in a format consistent with the guidelines provided by the development board under Subsection (d);

(2-a) is consistent with the desired future conditions adopted under Section 36.108 for the relevant aquifers located in the regional water planning area as of the date the board most recently adopted a state water plan under Section 16.051 or, at the option of the regional water planning group, established subsequent to the adoption of the most recent plan;

(3) identifies:

(A) each source of water supply in the regional water planning area, including information supplied by the executive administrator on the amount of modeled available groundwater in accordance with the guidelines provided by the development board under Subsections (d) and (f);

(B) factors specific to each source of water supply to be considered in determining whether to initiate a drought response;

(C) actions to be taken as part of the response; and

(D) existing major water infrastructure facilities that may be used for interconnections in the event of an emergency shortage of water;

(4) has specific provisions for water management strategies to be used during a drought of record;

(5) includes but is not limited to consideration of the following:

(A) any existing water or drought planning efforts addressing all or a portion of the region;

(B) approved groundwater conservation district management plans and other plans submitted under Section 16.054;

(C) all potentially feasible water management strategies, including but not limited to improved conservation, reuse, and management of existing water supplies, conjunctive use, acquisition of available existing water supplies, and development of new water supplies;

(D) protection of existing water rights in the region;

(E) opportunities for and the benefits of developing regional water supply facilities or providing regional management of water supply facilities;

(F) appropriate provision for environmental water needs and for the effect of upstream development on the bays, estuaries, and arms of the Gulf of Mexico and the effect of plans on navigation;

(G) provisions in Section 11.085(k)(1) if interbasin transfers are contemplated;

(H) voluntary transfer of water within the region using, but not limited to, regional water banks, sales, leases, options, subordination agreements, and financing agreements; [and]

(I) emergency transfer of water under Section 11.139, including information on the part of each permit, certified filing, or certificate of adjudication for nonmunicipal use in the region that may be transferred without causing unreasonable damage to the property of the nonmunicipal water rights holder; and

(J) opportunities for and the benefits of developing large-scale desalination facilities for marine seawater, as defined by Section 18.001, that serve local or regional entities;

(6) identifies river and stream segments of unique ecological value and sites of unique value for the construction of reservoirs that the regional water planning group recommends for protection under Section 16.051;

(7) assesses the impact of the plan on unique river and stream segments identified in Subdivision (6) if the regional water planning group or the legislature determines that a site of unique ecological value exists;

(8) describes the impact of proposed water projects on water quality; and

(9) includes information on:

(A) projected water use and conservation in the regional water planning area; and

(B) the implementation of state and regional water plan projects, including water conservation strategies, necessary to meet the state's projected water demands.

SECTION 6. Subtitle C, Title 2, Water Code, is amended by adding Chapter 18 to read as follows:

CHAPTER 18. MARINE SEAWATER DESALINATION PROJECTS AND INTEGRATED

MARINE SEAWATER DESALINATION AND POWER PROJECTS

Sec. 18.001. DEFINITIONS. In this chapter:

(1) "Board" means the Texas Water Development Board.

(2) "Commission" means the Texas Commission on Environmental Quality.

(3) "Land office" means the General Land Office.

(4) "Marine seawater" means water that is derived from the Gulf of Mexico.

(5) "Political subdivision" means a municipality, county, or other body politic or corporate of this state, including a district or authority created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution.

(6) "Project" means:

(A) a marine seawater desalination project;

(B) an integrated marine seawater desalination and power project; or

(C) a facility for the storage, conveyance, and delivery of desalinated marine seawater.

Sec. 18.002. POWERS AND DUTIES OF BOARD. (a) The board has general jurisdiction over the provision of state financial assistance for projects.

(b) The board may provide financial assistance for all or part of a project from any source of funding that may be available to the board for that purpose, including:

(1) the state water implementation fund for Texas, in accordance with Subchapter G, Chapter 15; and

(2) the state water implementation revenue fund for Texas, in accordance with Subchapter H, Chapter 15.

(c) If the board determines that a project for which financial assistance from the board is sought should be developed, the board shall pursue all available alternatives in order to provide the necessary financial assistance.

Sec. 18.003. POWERS AND DUTIES OF COMMISSION. (a) The commission has general jurisdiction over the permitting of projects.

(b) The commission shall consult with the land office, School Land Board, board, Parks and Wildlife Department, Public Utility Commission of Texas, or Electric Reliability Council of Texas over any aspect of a project that also falls within the general jurisdiction of that agency or entity.

(c) The commission shall provide notice and an opportunity for the submission of written comment, but is not required to provide an opportunity for a contested case hearing, regarding commission actions relating to a permit for a project.

Sec. 18.004. POWERS AND DUTIES OF POLITICAL SUBDIVISIONS. (a) A political subdivision may:

(1) own all or any interest in a project; and

(2) sell water produced or power generated by a project.

(b) Without obtaining a water right from the commission, a political subdivision may:

(1) divert marine seawater from the Gulf of Mexico at one or more points of diversion located at least three miles from the coast of this state;

(2) desalinate marine seawater;

(3) use diverted marine seawater for power plant cooling or any other beneficial use before desalinating the marine seawater;

(4) use desalinated marine seawater in this state for any beneficial purpose; and

(5) return unconsumed marine seawater or concentrated saline water resulting from the process for desalinating marine seawater to the Gulf of Mexico at one or more points of return.

(c) This subsection applies only to a project to which Subsection (b) applies. The commission may not limit:

(1) the number of points of diversion or the rate of diversion of marine seawater; or

(2) the number of points of return or the rate of return of unconsumed marine seawater or concentrated saline water resulting from the process for desalinating marine seawater.

(d) Before beginning construction of an intake or return facility for a project, a political subdivision must obtain the approval of the land office of the location of the point of intake or return and the plans and specifications for the facility if the facility will be located on state land. The process for obtaining the approval of the land office is not subject to the requirements relating to a contested case hearing under any statute or rule, including this chapter, another chapter of this code, Chapter 33, Natural Resources Code, or Subchapters C-G, Chapter 2001, Government Code.

(e) Before a political subdivision first diverts marine seawater under Subsection (b), the political subdivision must give notice to the commission of the proposed diversion.

(f) A political subdivision may assign the rights granted by this section to the owner or operator of a project.

Sec. 18.005. EXPEDITED PROCESSING OF AND ACTION ON APPLICATIONS. (a) This section applies to each application or request for a permit or other authorization, contract, lease, easement, or grant of an interest in property submitted to a state or local governmental entity for a project, including an application submitted to:

(1) the commission for a permit or authorization under Chapter 26 of this code or Chapter 382, Health and Safety Code; or

(2) the School Land Board to acquire rights in coastal public land under Chapter 33, Natural Resources Code.

(b) A governmental entity to which an application or request is submitted shall expedite and streamline to the extent possible the processing of and action on the application or request.

(c) A governmental entity's processing of and action on an application or request submitted to the governmental entity is not subject to the requirements relating to a contested case hearing under any statute or rule, including this chapter, another chapter of this code, Chapter 33, Natural Resources Code, or Subchapters C-G, Chapter 2001, Government Code.

SECTION 7. Section 341.001, Health and Safety Code, is amended by adding Subdivisions (2-a) and (4-a) to read as follows:

(2-a) "Desalination facility" means a facility used for the treatment of marine seawater to remove dissolved mineral salts and other dissolved solids.

(4-a) "Marine seawater" has the meaning assigned by Section 18.001, Water Code.

SECTION 8. Subchapter C, Chapter 341, Health and Safety Code, is amended by adding Section 341.03595 to read as follows:

Sec. 341.03595. DESALINATION OF WATER FOR DRINKING WATER. (a) This section applies only to a desalination facility that is intended to produce water for the public drinking water supply. This section does not apply to a desalination facility used to produce nonpotable water.

(b) The commission shall adopt rules to:

(1) allow water treated by a desalination facility to be used as public drinking water; and

(2) ensure that water treated by a desalination facility meets the requirements of Section 341.031 and rules adopted under that section.

(c) A person may not begin construction of a desalination facility unless the commission approves in writing the plans and specifications for the facility.

(d) A person may not begin construction of a desalination facility that treats marine seawater for the purpose of removing primary or secondary drinking water contaminants unless the commission approves in writing a report containing one or more of the following:

(1) a computer model acceptable to the commission;

(2) a pilot study with a minimum 40-day run duration without treatment intervention to meet federal and state safe drinking water standards;

(3) information from a similar system installed at another desalination facility that treats source water of a similar or lower quality; or

(4) a full-scale verification protocol with a minimum 40-day run duration without treatment intervention to meet federal and state safe drinking water standards.

(e) If a full-scale verification protocol report is approved, a person may not send water to a public water distribution system without a full-scale verification study:

(1) completed after construction; and

(2) approved by the commission.

(f) Not later than the 100th day after the date the commission receives the report for a proposed desalination facility, the commission shall review the report and issue an exception response letter that may contain conditions for approval.

(g) Not later than the 60th day after the date the commission receives the plans and specifications for a proposed desalination facility, the commission shall review the plans and specifications and issue a response letter that may contain conditions for approval.

(h) A person violates this section if the person fails to meet a condition for approval in a letter issued to the person under Subsection (f) or (g).

SECTION 9. Section 16.060, Water Code, is repealed.

SECTION 10. 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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