Amend HB 2377 (senate committee printing) by adding the following appropriately numbered SECTIONS to the bill and renumbering subsequent SECTIONS of the bill accordingly:

SECTION ____.  Section 35.018(b), Water Code, is amended to read as follows:

(b)  The report must include:

(1)  the names and locations of all priority groundwater management areas and districts created or attempted to be created on or after November 5, 1985, the effective date of Chapter 133 (H.B. No. 2), Acts of the 69th Legislature, Regular Session, 1985;

(2)  the authority under which each priority groundwater management area and district was proposed for creation;

(3)  a detailed analysis of each election held to confirm the creation of a district, including analysis of election results, possible reasons for the success or failure to confirm the creation of a district, and the possibility for future voter approval of districts in areas in which attempts to create districts failed;

(4)  a detailed analysis of the activities of each district created, including those districts which are implementing management plans certified under Section 36.1072;

(5)  a report on [audits performed on districts under Section 36.302 and] remedial actions taken under Section 36.303;

(6)  recommendations for changes in this chapter and Chapter 36 that will facilitate the creation of priority groundwater management areas and the creation and operation of districts;

(7)  a report on educational efforts in newly designated priority groundwater management areas; and

(8)  any other information and recommendations that the commission considers relevant.

SECTION ____.  Section 36.061(b), Water Code, is amended to read as follows:

(b)  The state auditor may conduct a financial audit [the records] of any district if the state auditor determines that the audit is necessary.

SECTION ____.  Section 36.1072(f), Water Code, is amended to read as follows:

(f)  If the executive administrator does not approve the district's management plan, the executive administrator shall provide to the district, in writing, the reasons for the action.  Not later than the 180th day after the date a district receives notice that its management plan has not been approved, the district may submit a revised management plan for review and approval.  The executive administrator's decision may be appealed to the development board.  If the development board decides not to approve the district's management plan on appeal, the district may request that the conflict be mediated.  The district and the board may seek the assistance of the Center for Public Policy Dispute Resolution at The University of Texas School of Law or an alternative dispute resolution system established under Chapter 152, Civil Practice and Remedies Code, in obtaining a qualified impartial third party to mediate the conflict.  The cost of the mediation services must be specified in the agreement between the parties and the Center for Public Policy Dispute Resolution or the alternative dispute resolution system.  If the parties do not resolve the conflict through mediation, the decision of the development board not to approve the district's management plan may be appealed to a district court in Travis County.  Costs for the appeal shall be set by the court hearing the appeal.  An appeal under this subsection is by trial de novo.  The commission shall not take enforcement action against a district under Subchapter I until the latest of the expiration of the 180-day period, the date the development board has taken final action withholding approval of a revised management plan, the date the mediation is completed, or the date a final judgment upholding the board's decision is entered by a district court.  An enforcement action may not be taken against a district by the commission [or the state auditor] under Subchapter I because the district's management plan and the approved regional water plan are in conflict while the parties are attempting to resolve the conflict before the development board, in mediation, or in court.  Rules of the district continue in full force and effect until all appeals under this subsection have been exhausted and the final judgment is adverse to the district.

SECTION ____.  Section 36.113, Water Code, is amended by amending Subsection (d) and adding Subsection (d-1) to read as follows:

(d)  This subsection does not apply to the renewal of an operating permit issued under Section 36.1145. Before granting or denying a permit, or a permit amendment issued in accordance with Section 36.1146, the district shall consider whether:

(1)  the application conforms to the requirements prescribed by this chapter and is accompanied by the prescribed fees;

(2)  the proposed use of water unreasonably affects:

(A)  existing groundwater and surface water resources; [or]

(B)  existing permit holders; or

(C)  registered wells that are exempt from the requirement to obtain a permit under this chapter or district rules;

(3)  the proposed use of water is dedicated to any beneficial use;

(4)  the proposed use of water is consistent with the district's approved management plan;

(5)  if the well will be located in the Hill Country Priority Groundwater Management Area, the proposed use of water from the well is wholly or partly to provide water to a pond, lake, or reservoir to enhance the appearance of the landscape;

(6)  the applicant has agreed to avoid waste and achieve water conservation; and

(7)  the applicant has agreed that reasonable diligence will be used to protect groundwater quality and that the applicant will follow well plugging guidelines at the time of well closure.

SECTION ____.  Section 36.303(a), Water Code, is amended to read as follows:

(a)  If Section 36.301 or [,] 36.3011[, or 36.302(f)] applies, the commission, after notice and hearing in accordance with Chapter 2001, Government Code, shall take action the commission considers appropriate, including:

(1)  issuing an order requiring the district to take certain actions or to refrain from taking certain actions;

(2)  dissolving the board in accordance with Sections 36.305 and 36.307 and calling an election for the purpose of electing a new board;

(3)  requesting the attorney general to bring suit for the appointment of a receiver to collect the assets and carry on the business of the groundwater conservation district; or

(4)  dissolving the district in accordance with Sections 36.304, 36.305, and 36.308.

SECTION ____.  Section 36.302, Water Code, is repealed.