By: Perry S.B. No. 1392

(In the Senate - Filed March 7, 2017; March 16, 2017, read first time and referred to Committee on Agriculture, Water & Rural Affairs; May 10, 2017, reported adversely, with favorable Committee Substitute by the following vote: Yeas 5, Nays 2; May 10, 2017, sent to printer.) Click here to see the committee vote

COMMITTEE SUBSTITUTE FOR S.B. No. 1392 By: Hinojosa

A BILL TO BE ENTITLED

AN ACT

relating to groundwater conservation districts.

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

SECTION 1. Sections 36.001(2) and (7), Water Code, are amended to read as follows:

(2) "Commission" means the Texas [Natural Resource Conservation] Commission on Environmental Quality or its successor.

(7) "Subdivision of a groundwater reservoir" means a definable part of a groundwater reservoir in which the groundwater supply will not be appreciably affected by withdrawing water from any other part of the reservoir, as indicated by known geological and hydrological conditions and relationships [and on foreseeable economic development] at the time the subdivision is designated or altered.

SECTION 2. Section 36.0015(b), Water Code, is amended to read as follows:

(b) In order to provide for the conservation, preservation, protection, recharging, and prevention of waste of groundwater, and of groundwater reservoirs or their subdivisions, and to control subsidence caused by withdrawal of water from those groundwater reservoirs or their subdivisions, consistent with the objectives of Section 59, Article XVI, Texas Constitution, groundwater conservation districts may be created as provided by this chapter. Groundwater conservation districts created as provided by this chapter are the state's preferred method of groundwater management in order to:

(1) protect property rights;

(2) [,] balance the conservation and development of groundwater to meet the needs of this state;

(3) [, and] use the best available science; and

(4) treat each groundwater owner fairly [in the conservation and development of groundwater through rules developed, adopted, and promulgated by a district in accordance with the provisions of this chapter].

SECTION 3. Sections 36.002(a) and (b), Water Code, are amended to read as follows:

(a) A [The legislature recognizes that a] landowner owns the groundwater below the surface of the landowner's land as real property.

(b) The groundwater ownership and rights described by this section entitle the landowner, including a landowner's lessees, heirs, or assigns, to:

(1) drill for and produce the groundwater below the surface of real property, subject to Subsection (d), without causing waste or malicious drainage of other property or negligently causing subsidence; [and]

(2) the right to use groundwater for a beneficial use without causing waste; and

(3) [have] any other right recognized under common law.

SECTION 4. Section 36.020(a), Water Code, is amended to read as follows:

(a) At an election to create a district, the temporary directors may include a proposition for the issuance of bonds or notes, the levy of taxes to retire all or part of the bonds or notes, and the levy of a maintenance tax. The maintenance tax rate may not exceed 37.5 [50] cents on each $100 of assessed valuation.

SECTION 5. Section 36.062, Water Code, is amended to read as follows:

Sec. 36.062. OFFICES AND MEETING PLACES. (a) The board shall designate from time to time and maintain one or more regular offices for conducting the business of the district and maintaining the records of the district. Such offices must be reasonably accessible to members of the public who reside in the district and may be located either inside or outside the district's boundaries as determined in the discretion of the board.

(b) The board shall designate one or more places reasonably accessible to members of the public who reside in the district inside or outside the district for conducting the meetings of the board.

SECTION 6. Section 36.101(c), Water Code, is amended to read as follows:

(c) The board shall compile its rules and make them available for use and inspection at each of the district's offices [principal office].

SECTION 7. Sections 36.1071(e) and (f), Water Code, are amended to read as follows:

(e) In the management plan described under Subsection (a), the district shall:

(1) identify the performance standards and management objectives under which the district will operate to achieve the management goals identified under Subsection (a);

(2) specify, in as much detail as possible, the actions, procedures, performance, and avoidance that are or may be necessary to effect the plan, including specifications and proposed rules; and

(3) include estimates of the following:

(A) modeled available groundwater in the district based on the desired future condition established under Section 36.108;

(B) the amount of groundwater being used within the district on an annual basis;

(C) the annual amount of recharge from precipitation, if any, to the groundwater resources within the district;

(D) for each aquifer, the estimated annual volume of water that discharges:

(i) from the aquifer to springs and any surface water bodies, including lakes, streams, and rivers; and

(ii) through evaporation or transpiration; and

(E) the annual volume of lateral and vertical flow into and out of the district within each aquifer and between aquifers in the district[, if a groundwater availability model is available;

[(F) the projected surface water supply in the district according to the most recently adopted state water plan; and

[(G) the projected total demand for water in the district according to the most recently adopted state water plan; and

[(4) consider the water supply needs and water management strategies included in the adopted state water plan].

(f) The district shall adopt rules necessary to implement the management plan. Prior to the development of the management plan and its approval under Section 36.1072, the district may not adopt rules other than rules pertaining to the registration and interim permitting of new and existing wells and rules governing spacing and procedure before the district's board; however, the district may not adopt any rules limiting the production of wells, except rules requiring that groundwater produced from a well be put to a nonwasteful, beneficial use. A newly created [The] district may accept applications for permits under Section 36.113, provided the district does not act on any such application until the district's initial management plan is approved as provided in Section 36.1072.

SECTION 8. Section 36.108, Water Code, is amended by amending Subsections (c), (d), (d-3), and (d-4) and adding Subsections (c-1) and (c-2) to read as follows:

(c) The district representatives shall meet at least annually to conduct joint planning with the other districts in the management area and to review the management plans, the accomplishments of the management area, and proposals to adopt new or amend existing desired future conditions. In reviewing the management plans, the districts shall consider:

(1) the goals of each management plan and its impact on planning throughout the management area;

(2) the effectiveness of the measures established by each district's management plan for conserving and protecting groundwater and preventing waste, and the effectiveness of these measures in the management area generally;

(3) any other matters that the boards consider relevant to the protection and conservation of groundwater and the prevention of waste in the management area; and

(4) the degree to which [each management plan achieves] the desired future conditions in the management area are being achieved [established during the joint planning process].

(c-1) Districts in a management area jointly shall delineate the boundaries of each subdivision of a groundwater reservoir in the management area, using the best available science. On request by a district, the development board shall provide technical assistance with the development of the initial boundaries and any subsequent updates to the boundaries of a subdivision. The delineated boundaries of each subdivision must be updated as necessary to accurately reflect the actual boundaries.

(c-2) Under Subsection (c-1), a district:

(1) may take into consideration conditions that differ substantially from one geographic area to another in delineating boundaries of a subdivision of a groundwater reservoir;

(2) shall report to the development board the surface level boundaries of a subdivision of a groundwater reservoir using metes and bounds; and

(3) shall maintain in each office of the districts in the management area copies of the delineations of the subdivisions of groundwater reservoirs and the report made under Subdivision (2).

(d) Not later than September 1, 2010, and every five years thereafter, the districts shall consider groundwater monitoring data, groundwater availability models, and other data or information for the management area and shall propose for adoption desired future conditions for the relevant aquifers within the management area. Before voting on the proposed desired future conditions of the aquifers under Subsection (d-2), the districts shall consider:

(1) aquifer uses or conditions within the management area, including conditions that differ substantially from one geographic area to another;

(2) the water supply needs and water management strategies included in the state water plan;

(3) hydrological conditions, including for each aquifer in the management area the total estimated recoverable storage as provided by the executive administrator, and the average annual recharge, inflows, and discharge;

(4) other environmental impacts, including impacts on spring flow and other interactions between groundwater and surface water;

(5) the impact on subsidence;

(6) socioeconomic impacts reasonably expected to occur;

(7) the impact on the interests and rights in private property, including ownership and the rights of management area landowners and their lessees and assigns in groundwater as recognized under Section 36.002;

(8) the feasibility of achieving the desired future condition and the degree to which any previously adopted desired future condition is being achieved; and

(9) any other information relevant to the specific desired future conditions.

(d-3) After the earlier of the date on which all the districts have submitted their district summaries or the expiration of the public comment period under Subsection (d-2), the district representatives shall reconvene to review the reports, consider any district's suggested revisions to the proposed desired future conditions, and finally adopt the desired future conditions for the management area. The desired future conditions must be approved by [adopted as] a resolution adopted by a two-thirds vote of all the district representatives not later than the 90th day after the date the public comment period expires. Not later than the 180th day after the expiration of the public comment period, the [The] district representatives shall produce a desired future conditions explanatory report for the management area and submit to the development board and each district in the management area proof that notice was posted for the joint planning meeting, a copy of the resolution, and a copy of the explanatory report. The report must:

(1) identify each desired future condition;

(2) provide the policy and technical justifications for each desired future condition;

(3) include documentation that the factors under Subsection (d) were considered by the districts and a discussion of how the adopted desired future conditions impact each factor;

(4) list other desired future condition options considered, if any, and the reasons why those options were not adopted; and

(5) discuss reasons why recommendations made by advisory committees and relevant public comments received by the districts were or were not incorporated into the desired future conditions.

(d-4) Not later than the 180th day after the date the public comment period expires, the district shall submit the explanatory report under Subsection (d-3) to the development board and [As soon as possible after a district receives the desired future conditions resolution and explanatory report under Subsection (d-3), the district shall] adopt the desired future conditions in the resolution required by Subsection (d-3) and the explanatory report that apply to the district.

SECTION 9. Section 36.1083(e), Water Code, is amended to read as follows:

(e) Not later than the 10th day after receiving a petition described by Subsection (b), the district shall submit a copy of the petition to the development board and to each district in the management area. On receipt of the petition, the development board shall conduct:

(1) an administrative review to determine whether the desired future condition established by the district meets the criteria in Section 36.108(d); and

(2) a study containing scientific and technical analysis of the desired future condition, including consideration of:

(A) the hydrogeology of the aquifer;

(B) the explanatory report provided to the development board under Section 36.108(d-3);

(C) the factors described under Section 36.108(d); and

(D) any relevant:

(i) groundwater availability models;

(ii) published studies;

(iii) estimates of total recoverable storage capacity;

(iv) average annual amounts of recharge, inflows, and discharge of groundwater; or

(v) information provided in the petition or available to the development board.

SECTION 10. Section 36.113(d), Water Code, is amended 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) for each water well, the proposed spacing of the wells conforms to the district's rules regulating the spacing of wells under Section 36.116;

(3) the proposed use of water unreasonably affects existing groundwater and surface water resources or existing permit holders;

(4) the proposed annual production conforms to the district's rules regulating the groundwater production of wells under Section 36.116;

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

(6) [(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;

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

(8) [(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 11. Section 36.1131(b), Water Code, is amended to read as follows:

(b) The permit may include:

(1) the name and address of the person to whom the permit is issued;

(2) the location of the well;

(3) the date the permit is to expire if no well is drilled;

(4) a statement of the purpose for which the well is to be used;

(5) a requirement that the water withdrawn under the permit be put to beneficial use at all times;

(6) the location of the use of the water from the well;

(7) a water well closure plan or a declaration that the applicant will comply with well plugging guidelines and report closure to the commission;

(8) the conditions and restrictions[, if any,] placed by district rules adopted under Section 36.116 on the rate and amount of withdrawal;

(9) any conservation-oriented methods of drilling and operating prescribed by the district;

(10) a drought contingency plan prescribed by the district; and

(11) other terms and conditions as provided by Section 36.113.

SECTION 12. The heading to Section 36.1132, Water Code, is amended to read as follows:

Sec. 36.1132. DISTRICT MANAGEMENT TO ACHIEVE DESIRED FUTURE CONDITIONS [PERMITS BASED ON MODELED AVAILABLE GROUNDWATER].

SECTION 13. Section 36.1132, Water Code, is amended by amending Subsection (b) and adding Subsections (b-1) and (b-2) to read as follows:

(b) In issuing permits, the district shall manage total groundwater production on a long-term basis to achieve an applicable desired future condition and consider:

(1) the modeled available groundwater determined by the executive administrator;

(2) preparing a report on the degree to which the desired future conditions are being achieved in the one-year period after the collection of monitoring data from an aquifer and the relevant desired future conditions; and

(3) participating in a joint groundwater management hearing if the report prepared under Subdivision (2) indicates the desired future conditions are not being achieved.

(b-1) Not later than the second anniversary of the date of the final adoption of a desired future condition under Section 36.108, and every five years thereafter, district representatives in a management area shall develop a report as described by this subsection. The districts shall maintain a copy of the report at each district office. The report must:

(1) identify and compare the rules adopted under Section 36.116 by each district in the management area; and

(2) identify differences in rules based on factors considered in the establishment of desired future conditions provided by Section 36.108 and the justification for those differences in the rules.

(b-2) The joint groundwater management hearing held under Subsection (b)(3) must include a public comment period on the desired future conditions. During the joint groundwater management hearing, the districts shall consider:

(1) [(2)] the executive administrator's estimate of the current and projected amount of groundwater produced under exemptions granted by district rules and Section 36.117;

(2) [(3)] the amount of groundwater authorized under permits previously issued by the district;

(3) [(4)] a reasonable estimate of the amount of groundwater that is actually produced under permits issued by the district; and

(4) [(5)] yearly precipitation and production patterns.

SECTION 14. Section 36.116(a), Water Code, is amended to read as follows:

(a) In order to minimize as far as practicable the drawdown of the water table or the reduction of artesian pressure, to control subsidence, to prevent interference between wells, to prevent degradation of water quality, or to prevent waste, a district by rule may regulate:

(1) the spacing of water wells by:

(A) requiring all water wells to be spaced a certain distance from property lines or adjoining wells; or

(B) requiring wells with a certain production capacity, pump size, or other characteristic related to the construction or operation of and production from a well to be spaced a certain distance from property lines or adjoining wells; [or

[(C) imposing spacing requirements adopted by the board;] and

(2) the production of groundwater by:

(A) setting production limits on wells;

(B) limiting the amount of water produced based on acreage or tract size;

(C) limiting the amount of water that may be produced from a defined number of acres assigned to an authorized well site;

(D) limiting the maximum amount of water that may be produced on the basis of acre-feet per acre or gallons per minute per well site per acre;

(E) managed depletion; or

(F) any combination of the methods listed above in Paragraphs (A) through (E).

SECTION 15. Sections 36.122(h) and (q), Water Code, are amended to read as follows:

(h) In addition to conditions provided by Section 36.1131, the permit shall specify:

(1) the maximum amount of water that may be transferred out of the district; and

(2) the period for which the water may be transferred.

(q) In applying this section, a district must be fair, impartial, and nondiscriminatory between the transfer of groundwater outside of the district's boundaries and the use of groundwater in the district.

SECTION 16. Section 36.201(b), Water Code, is amended to read as follows:

(b) The board may annually levy taxes to pay the maintenance and operating expenses of the district at a rate not to exceed 37.5 [50] cents on each $100 of assessed valuation.

SECTION 17. Section 36.205(f), Water Code, is amended to read as follows:

(f) A district[, including a district described under Subsection (d),] may assess a production fee under Subsection (c) and an export fee under Subsection (g), if applicable, for any water produced under an exemption under Section 36.117 if that water is subsequently sold to another person.

SECTION 18. Section 36.207, Water Code, is amended to read as follows:

Sec. 36.207. USE OF FEES. (a) A district may use funds obtained from administrative or[,] production[, or export] fees collected under a special law governing the district or this chapter for any purpose consistent with the district's approved management plan, including, without limitation, making grants, loans, or contractual payments to achieve, facilitate, or expedite reductions in groundwater pumping or the development or distribution of alternative water supplies.

(b) A district may use funds obtained from export fees collected under a special law governing the district or this chapter only to enhance:

(1) monitoring, modeling, and data collection regarding aquifers managed by the district; and

(2) research on the advancement of the scientific understanding of a district's groundwater resources.

SECTION 19. Sections 36.4051(a) and (d), Water Code, are amended to read as follows:

(a) The board may take action on any uncontested application at a properly noticed public meeting held at any time after the public hearing at which the application is scheduled to be heard. The board may issue a written order to:

(1) grant the application;

(2) grant the application with special conditions provided that the applicant agrees to the conditions before the issuance of the order; or

(3) deny the application.

(d) An applicant may, not later than the 20th day after the date the board issues an order granting or denying the application, demand a contested case hearing [if the order:

[(1) includes special conditions that were not part of the application as finally submitted; or

[(2) grants a maximum amount of groundwater production that is less than the amount requested in the application].

SECTION 20. Section 8824.101, Special District Local Laws Code, is amended to read as follows:

Sec. 8824.101. RESTRICTIONS ON GENERAL POWERS. Section [Sections] 36.103 [and 36.104], Water Code, does [do] not apply to the district.

SECTION 21. Section 8833.102, Special District Local Laws Code, is amended to read as follows:

Sec. 8833.102. LIMITATIONS ON DISTRICT POWERS. The district may not impose:

(1) a tax; [or]

(2) a fee on a well used exclusively for domestic or livestock watering purposes; or

(3) production fees for an annual period greater than $1 per acre-foot for water used for agricultural use or 17 cents per thousand gallons for water used for any other purpose.

SECTION 22. Section 11, Chapter 1321, Acts of the 77th Legislature, Regular Session, 2001, is amended by adding Subsection (b-1) to read as follows:

(b-1) The district may not assess production fees for an annual period greater than $1 per acre-foot for water used for agricultural use or 17 cents per thousand gallons for water used for any other purpose.

SECTION 23. The following provisions of the Water Code are repealed:

(1) Section 36.001(31), as added by Chapter 415 (H.B. 2767), Acts of the 84th Legislature, Regular Session, 2015;

(2) Section 36.104;

(3) Section 36.1072(g);

(4) Section 36.108(d-5);

(5) Sections 36.122(m) and (n); and

(6) Section 36.205(d).

SECTION 24. Not later than September 1, 2019, a groundwater conservation district in a management area under Section 36.108, Water Code, as amended by this Act, shall meet and delineate the initial boundaries of each subdivision of a groundwater reservoir in the management area as required by Section 36.108(c-1), Water Code, as added by this Act.

SECTION 25. As soon as practicable after the effective date of this Act, each groundwater conservation district shall adopt rules as necessary to implement the changes in law made by this Act.

SECTION 26. The changes in law made by this Act apply only to an application for a permit or a permit amendment that is received by a groundwater conservation district on or after the effective date of this Act. An application for a permit or permit amendment that is received before the effective date of this Act is governed by the law in effect on the date the application is received, and that law is continued in effect for that purpose.

SECTION 27. The changes in law made by this Act apply only to a suit involving a groundwater conservation district that is filed on or after the effective date of this Act. A suit filed before the effective date of this Act is subject to the law in effect on the date the suit is filed, and that law is continued in effect for that purpose.

SECTION 28. This Act takes effect September 1, 2017.

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