TO:	Honorable Charles Perry, Chair, Senate Committee on Agriculture, Water & Rural Affairs
FROM:	Ursula Parks, Director, Legislative Budget Board
IN RE:	HB922 by Workman (relating to the creation of the Southwestern Travis County Groundwater Conservation District; providing authority to issue bonds; providing authority to impose fees.), Committee Report 2nd House, Substituted

The Legislative Budget Board, in cooperation with the Texas Water Development Board (TWDB) and the Texas Commission on Environmental Quality (TCEQ), has determined that:

House Bill 922, as authored by Representative Paul Workman, would create the Southwestern Travis County Groundwater Conservation District (District) in southwestern Travis County with the powers and duties of Water Code, Chapter 36 related to the general law for groundwater conservation districts (GCDs). The District is located in the southwestern quarter of Travis County and is bound to the west by Blanco and Burnet counties, southwest by Hays County, and southeast by the northwestern boundary of the Barton Springs-Edwards Aquifer Conservation District. The northern boundary of the District is the Colorado River - Lake Travis, Lake Austin, and Lady Bird Lake. The purpose of the District is to benefit property by providing for the conservation, preservation, protection, recharging, and prevention of waste of groundwater, and to control subsidence caused by the withdrawal of groundwater under powers conferred by Article XVI, Section 59 of the Texas Constitution. Creation of the District is not subject to a confirmation election.   

Population - The very specific description of the proposed boundaries does not allow staff to develop precise population estimates. Based on the boundaries mentioned in HB 922 staff was able to estimate population based on selecting Census blocks with their centroid in the proposed district. The population estimate in 2010 is approximately 87,500.
     
Population growth in the specific area since the 2010 census is unknown. The 2010 population estimate for Travis County is 1,024,266. The Travis County population projections approved for the 2017 State Water Plan projects the population to grow to 1,273,260 in 2020, 1,508,642 in 2030 and 1,732,860 in 2040.
 
Location - The proposed district's area is approximately 210 square miles in the southwestern corner of Travis County. The district is located south of Lake Travis and the Colorado River as well as west of the Barton Springs/Edwards Aquifer Conservation District. The proposed district will encompass several cities including Bee Cave, Briarcliff, Lakeway, Lost Creek, The Hills, West Lake Hills and a portion of the City of Austin, and water utilities.
 
Comments on Powers/Duties Different from Similar Types of Districts - Unlike general law GCDs, the substitute bill provides that exempt wells include a well used for a single private residential household use incapable of producing more than 10,000 gallons of groundwater per day. Similar to general law GCDs, an exempt well also includes a well used solely for domestic use or for providing water for livestock or poultry is located on a tract of land larger than 10 acres and is drilled, completed, or equipped so the well is incapable of producing more than 25,000 gallons per day.
 
Unlike general law GCDs, the substitute bill provides that seven temporary directors will be appointed no later than 90 days of the effective date of the Act, December 1, 2017. The temporary directors are required to hold an organizational meeting within 45 days of the date the seventh temporary director is appointed. Temporary directors will be appointed as follows; the Travis County Commissioner for the precinct in which the District is principally located appointing two, the Travis County Judge one, and the State Representative and State Senator each appointing two. Temporary directors appoint temporary board member vacancies. If there are fewer than four temporary directors, the State Representative will fill all vacancies on the board.
 
Subsequent permanent directors are elected not later than the uniform election date in May 2018 with three directors elected from each corporate limits of the City of Bee Cave, City of Lakeway or Village of the Hills and City of West Lake Hills and four directors elected by voters residing inside the District and outside the corporate limits of the City of Bee Cave, City of Lakeway, Village of the Hills, and City of West Lake Hills. The Four directors must also reside inside the District and outside the corporate limits of the City of Bee Cave, City of Lakeway, Village of the Hills, and City of West Lake Hills. The initial permanent directors will draw lots for four positions with four-year terms and the three positions with two-year terms. Subsequent elected directors will serve four-year terms. Under the Water Code, general law GCD directors are elected by the single-precinct method.
 
Unlike general law GCDs, the substitute bill provides that the District may implement and develop aquifer storage and recovery projects, in accordance with Chapters 27 and 36 of the Water Code, and in accordance with TCEQ rules and guidance. The District may not levy and collect ad valorem taxes or collect a well construction fee from an owner of an exempt well. The District may charge and collect from non-exempt well owners a new well construction fee not to exceed $1,000, a renewal application fee not to exceed $400, and a water utility service connection fee not to exceed $1,000 for each new water service connection made after September 1, 2017.
 
Similar to general law GCDs, the substitute bill provides that the District may impose reasonable production fees based on the amount of groundwater actually produced by nonexempt wells. Annual District production fees on non-exempt wells may not exceed 20 cents per thousand gallons. Under the Water Code, general law GCDs may impose annual production fees that may not exceed $1 per acre-foot for groundwater used for agricultural purposes or $10 per acre-foot for groundwater used for any other purpose. The District may set a reasonable fee for administrative management on a per well basis, with a limit of $15 per year for wells used solely for domestic and livestock, and $50 per year for exempt wells used solely for domestic use or for providing water for livestock or poultry is located on a tract of land larger than 10 acres.
 
Unlike general law GCDs, the substitute bill restricts an employee or agent of the District from access to property within the boundaries of the District to inspect an exempt well without the property owner's permission. The substitute bill provides that an employee or agent of the District is refused the right to enter public or private property in the District, the District may seek a court order from a district court authorizing the District to enter the land.
 
Overlapping Services - The boundaries of the District are located in the southwestern quarter of Travis County bound to the west by Blanco and Burnet counties, southwest by Hays County, and southeast by the northwestern boundary of the Barton Springs/Edwards Aquifer Conservation District. The northern boundary of the southwestern Travis territory is the Colorado River - Lake Travis, Lake Austin, and Lady Bird Lake. GCD functions do not conflict with services provided by other types of water districts or utilities.
 
TCEQ's Supervision  - As with general law GCDs, the TCEQ will have general supervisory authority, including bond review authority and authority as it is related to the District's development and implementation of a management plan; the District would not have to comply with TCEQ financial auditing requirements.

Water Use - HB 922 specifies that "the district has the powers and duties provided by the general law of this state, including Chapter 36, Water Code, applicable to groundwater conservation districts created under Section 59,
Article XVI, Texas Constitution. "
 
Within Travis County, 91 percent of the total water use was surface and 9 percent of the total water use was groundwater (Edwards and Trinity Aquifer) in 2014, with 89 percent of groundwater use being for municipal purposes.