1-1                                   AN ACT
 1-2     relating to the development and management of the water resources
 1-3     of the state, including the ratification of the creation of certain
 1-4     groundwater conservation districts; providing penalties.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6                  ARTICLE 1.  TEXAS WATER ADVISORY COUNCIL
 1-7           SECTION 1.01.  Subtitle A, Title 2, Water Code, is amended by
 1-8     adding Chapter 9 to read as follows:
 1-9                  CHAPTER 9.  TEXAS WATER ADVISORY COUNCIL
1-10           Sec. 9.001.  DEFINITIONS.  In this chapter:
1-11                 (1)  "Authority" means an entity listed in Section
1-12     9.010(b).
1-13                 (2)  "Board" means the governing body of an authority.
1-14                 (3)  "Commission" means the Texas Natural Resource
1-15     Conservation Commission.
1-16                 (4)  "Conjunctive use" means the combined use of
1-17     groundwater and surface water sources that optimizes the beneficial
1-18     characteristics of each source.
1-19                 (5)  "Council" means the Texas Water Advisory Council.
1-20           Sec. 9.002.  CREATION AND MEMBERSHIP.  (a)  The council
1-21     consists of 13 members as follows:
1-22                 (1)  the chairman, or a board member designated by the
1-23     chairman, of the Texas Water Development Board;
1-24                 (2)  the chairman, or a commissioner designated by the
1-25     chairman, of the commission;
 2-1                 (3)  the chairman, or a commissioner designated by the
 2-2     chairman, of the Parks and Wildlife Commission;
 2-3                 (4)  the commissioner of agriculture;
 2-4                 (5)  the commissioner of the General Land Office;
 2-5                 (6)  three members of the house of representatives
 2-6     appointed by the speaker of the house of representatives;
 2-7                 (7)  two members of the senate appointed by the
 2-8     lieutenant governor; and
 2-9                 (8)  three members of the general public appointed by
2-10     the governor, one representing groundwater management, one
2-11     representing surface water management, and one representing the
2-12     environmental community.
2-13           (b)  Council members may not delegate participation or
2-14     council duties to staff.
2-15           Sec. 9.003.  TERMS.  (a)  Except for the commissioner of the
2-16     General Land Office and the commissioner of agriculture, council
2-17     members who are officials of state agencies serve terms as
2-18     determined by the chairman of each agency.
2-19           (b)  Council members who are members of the general public
2-20     serve staggered six-year terms with the term of one member expiring
2-21     August 31 of each odd-numbered year.
2-22           (c)  Council members may be reappointed to serve additional
2-23     terms.
2-24           (d)  A vacancy on the council shall be filled by appointment
2-25     by the original appointing authority for the unexpired term.
2-26           Sec. 9.004.  OFFICERS OF THE COUNCIL.  (a)  The governor
 3-1     shall appoint a council member as the chair of the council for a
 3-2     two-year term expiring May 31 of each even-numbered year.
 3-3           (b)  The council shall have a secretary of the council who
 3-4     serves at the pleasure of the council and is accountable only to
 3-5     the council.
 3-6           Sec. 9.005.  COUNCIL STAFF.  On request by the council, the
 3-7     commission, the Parks and Wildlife Department, the Department of
 3-8     Agriculture, and the Texas Water Development Board shall provide
 3-9     any staff other than the secretary of the council necessary to
3-10     assist the council in the performance of its duties.
3-11           Sec. 9.006.  MEETINGS.  (a)  The council shall meet at least
3-12     once in each calendar quarter.  Six members constitute a quorum.
3-13           (b)  The council is subject to Chapters 551 and 2001,
3-14     Government Code.
3-15           Sec. 9.007.  COMPENSATION OF MEMBERS.  (a)  Members of the
3-16     council serve without compensation but may be reimbursed by
3-17     legislative appropriation for actual and necessary expenses related
3-18     to the performance of council duties.
3-19           (b)  Reimbursement under Subsection (a) is subject to the
3-20     approval of the chair.
3-21           Sec. 9.008.  POWERS AND DUTIES OF COUNCIL.  (a)  The council
3-22     shall:
3-23                 (1)  heighten the level of dialogue on significant
3-24     water policy issues and, in an advisory role only, strive to
3-25     provide focus and recommendations on state water policy
3-26     initiatives, including:
 4-1                       (A)  promoting flexibility and incentives for
 4-2     water desalination, brush control, regionalization, weather
 4-3     modification projects, and public-private partnerships relating to
 4-4     water projects;
 4-5                       (B)  promoting adequate financing for surface
 4-6     water and groundwater projects;
 4-7                       (C)  development of water conservation and
 4-8     drought management projects;
 4-9                       (D)  implementation of approved regional and
4-10     state water plans;
4-11                       (E)  encouraging commonality of technical data
4-12     and information such as joint agency studies, freshwater inflow
4-13     recommendations, surface water and groundwater availability models,
4-14     and bay and estuary and instream flow recommendations developed by
4-15     the Parks and Wildlife Department, the commission, and the Texas
4-16     Water Development Board; and
4-17                       (F)  encouraging the use of supplemental
4-18     environmental projects for water infrastructure needs and enhancing
4-19     the aquatic environment and habitat in enforcement proceedings at a
4-20     state agency or political subdivision;
4-21                 (2)  encourage the enhancement and coordination of
4-22     state, interstate, and international efforts to improve
4-23     environmental quality and living conditions along the Texas-Mexico
4-24     border;
4-25                 (3)  coordinate a unified state position on federal and
4-26     international water issues; and
 5-1                 (4)  advise the Texas Water Development Board on
 5-2     developing criteria for prioritizing the funding of projects in the
 5-3     state water plan.
 5-4           (b)  The council may not:
 5-5                 (1)  adopt rules;
 5-6                 (2)  regulate water use, water quality, or any other
 5-7     aspect of water resource management;
 5-8                 (3)  plan or construct water resource projects or have
 5-9     such projects planned or constructed;
5-10                 (4)  grant or lend money for the construction of water
5-11     resource projects;
5-12                 (5)  establish water resource management standards or
5-13     otherwise usurp the authority of or infringe upon the duties,
5-14     responsibilities, or powers of local, regional, or state water
5-15     management entities, including groundwater districts, river
5-16     authorities and compacts, regional water planning groups, or member
5-17     agencies of the council; or
5-18                 (6)  consider or discuss a specific permit or project
5-19     or recommendation for a project until the water permit has been
5-20     issued by the state and all motions for rehearing have been
5-21     overruled.
5-22           Sec. 9.009.  REPORT.  Not later than December 1 of each
5-23     even-numbered year, the council shall submit a report to the
5-24     governor, lieutenant governor, and speaker of the house of
5-25     representatives and to the senate and house standing committees
5-26     with primary responsibility over water resource management and
 6-1     financing.  The report must include findings of the council made in
 6-2     the periodic reviews of authorities during the preceding two-year
 6-3     period and any other findings and recommendations the council
 6-4     considers necessary.
 6-5           Sec. 9.010.  ANALYSIS OF AUTHORITIES.  (a)  On a five-year
 6-6     cycle, each authority shall provide the council with the
 6-7     information required by Sections 9.011 and 9.012.  The information
 6-8     shall be provided to the council in the order of groups described
 6-9     in Subsection (b), with the information submitted by group 1 by the
6-10     council's first quarterly meeting of the five-year period and group
6-11     2 submitted by the council's third quarterly meeting of the period.
6-12     The council shall continue in numerical order to receive the
6-13     information by each group at every other quarterly meeting until
6-14     all 10 groups have been completed and then shall recommence the
6-15     cycle.
6-16           (b)  Authorities shall provide the information under
6-17     Subsection (a) in the following groups:
6-18                 (1)  in group 1, Northeast Texas Municipal Water
6-19     District;
6-20                 (2)  in group 2, Angelina and Neches River Authority,
6-21     Lower Neches Valley Authority, Sabine River Authority, and Upper
6-22     Neches River Municipal Water Authority;
6-23                 (3)  in group 3, Red River Authority of Texas, Sulphur
6-24     River Municipal Water District, and Sulphur River Basin Authority;
6-25                 (4)  in group 4, San Jacinto River Authority, Gulf
6-26     Coast Water Authority, and North Harris County Regional Water
 7-1     Authority;
 7-2                 (5)  in group 5, North Texas Municipal Water District,
 7-3     Tarrant Regional Water District, Trinity River Authority of Texas,
 7-4     and Dallas County Utility and Reclamation District;
 7-5                 (6)  in group 6, Brazos River Authority, West Central
 7-6     Texas Municipal Water District, and North Central Texas Municipal
 7-7     Water Authority;
 7-8                 (7)  in group 7, Guadalupe-Blanco River Authority,
 7-9     Lavaca-Navidad River Authority, Lower Colorado River Authority, and
7-10     Upper Guadalupe River Authority;
7-11                 (8)  in group 8, Nueces River Authority, San Antonio
7-12     River Authority, and Bexar-Medina-Atascosa Counties Water Control
7-13     and Improvement District No. 1;
7-14                 (9)  in group 9, Colorado River Municipal Water
7-15     District, Central Colorado River Authority, and Upper Colorado
7-16     River Authority; and
7-17                 (10)  in group 10, Canadian River Municipal Water
7-18     Authority and Mackenzie Municipal Water Authority.
7-19           (c)  The council may not require an authority under this
7-20     section to submit the information required under Section 9.012 more
7-21     than once every five years.  The council may, however, request an
7-22     authority that has submitted information to provide follow-up
7-23     information on any specific item or issue raised during the initial
7-24     council analysis.
7-25           (d)  The council, on a request by an authority, may modify
7-26     the schedule in order to have the flexibility in scheduling the
 8-1     information submittal and council analysis, if needed, to be more
 8-2     responsive to particular circumstances, changing conditions, or
 8-3     time-sensitive conflicts.
 8-4           Sec. 9.011.  PERFORMANCE STANDARDS.  (a)    Before its
 8-5     five-year analysis under Section 9.010, an authority shall report
 8-6     to the council a self-assessment of:
 8-7                 (1)  how the authority is achieving its stated mission
 8-8     and goals, including an identification of any barriers to achieving
 8-9     the mission and goals;
8-10                 (2)  how the authority is providing service to its
8-11     customers, including mechanisms the authority provides to encourage
8-12     input from the public and its customers;
8-13                 (3)  how the authority is addressing issues raised by
8-14     its most recent management audit, if the audit is required by
8-15     commission rule to be performed, including its administrative
8-16     policies; and
8-17                 (4)  the authority's role in the regional water
8-18     planning process.
8-19           (b)  The authority's report to the council under this section
8-20     must include recommendations related to:
8-21                 (1)  any interregional issues the authority has
8-22     identified as problematic and any potential solutions to those
8-23     issues; and
8-24                 (2)  solutions to any barriers the authority determines
8-25     are interfering with the successful implementation of the approved
8-26     regional water plan or state water plan.
 9-1           Sec. 9.012.  ADMINISTRATIVE POLICIES FOR AUTHORITIES.  The
 9-2     commission shall expand the applicability of its rules under 30
 9-3     T.A.C. Chapter 292 to include all the authorities subject to this
 9-4     chapter.  The commission shall provide the council with copies of
 9-5     the most recent information provided by each authority in
 9-6     accordance with its administrative rules.
 9-7           Sec. 9.013.  GIFTS AND GRANTS.  The council may accept gifts
 9-8     and grants from any source to carry out the purposes of this
 9-9     chapter.  The use of gifts and grants other than legislative
9-10     appropriations is subject only to limitations contained in the gift
9-11     or grant.
9-12           Sec. 9.014.  FUNDING.  (a)  The interagency water advisory
9-13     account is a special account in the general revenue fund.
9-14           (b)  The interagency water advisory account consists of
9-15     legislative appropriations, gifts and grants received under Section
9-16     9.013, and other money required by law to be deposited in the
9-17     account.
9-18           (c)  Money in the interagency water advisory account may be
9-19     used only as provided by this chapter.
9-20           Sec. 9.015.  CONTINUING RIGHT OF SUPERVISION.  Nothing in
9-21     this chapter affects the continuing right of supervision over
9-22     authorities by the commission as provided by Section 12.081.
9-23           Sec. 9.016.  PUBLIC PARTICIPATION.  The council shall
9-24     encourage public input regarding the exercise of its powers and
9-25     duties under Section 9.008, its preparation of the report described
9-26     in Section 9.009, and its analysis of authorities under Sections
 10-1    9.010 and 9.011.
 10-2          Sec. 9.017.  DISSOLUTION OF COUNCIL AND ACCOUNT.  Unless
 10-3    extended by the 78th Texas Legislature, this chapter and the
 10-4    interagency water advisory account expire on September 1, 2005.
 10-5                 ARTICLE 2.  SURFACE WATER AND GROUNDWATER
 10-6               CONJUNCTIVE MANAGEMENT; REGULATORY INCENTIVES
 10-7          SECTION 2.01.  Section 11.002, Water Code, is amended by
 10-8    adding Subdivisions (11), (12), (13), and (14) to read as follows:
 10-9                (11)  "River basin" means a river or coastal basin
10-10    designated by the board as a river basin under Section 16.051.  The
10-11    term does not include waters originating in bays or arms of the
10-12    Gulf of Mexico.
10-13                (12)  "Agriculture" means any of the following
10-14    activities:
10-15                      (A)  cultivating the soil to produce crops for
10-16    human food, animal feed, or planting seed or for the production of
10-17    fibers;
10-18                      (B)  the practice of floriculture, viticulture,
10-19    silviculture, and horticulture, including the cultivation of plants
10-20    in containers or nonsoil media, by a nursery grower;
10-21                      (C)  raising, feeding, or keeping animals for
10-22    breeding purposes or for the production of food or fiber, leather,
10-23    pelts, or other tangible products having a commercial value;
10-24                      (D)  raising or keeping equine animals;
10-25                      (E)  wildlife management; and
10-26                      (F)  planting cover crops, including cover crops
 11-1    cultivated for transplantation, or leaving land idle for the
 11-2    purpose of participating in any governmental program or normal crop
 11-3    or livestock rotation procedure.
 11-4                (13)  "Agricultural use" means any use or activity
 11-5    involving agriculture, including irrigation.
 11-6                (14)  "Nursery grower" means a person who grows more
 11-7    than 50 percent of the products that the person either sells or
 11-8    leases, regardless of the variety sold, leased, or grown.  For the
 11-9    purpose of this definition, "grow" means the actual cultivation or
11-10    propagation of the product beyond the mere holding or maintaining
11-11    of the item prior to sale or lease and typically includes
11-12    activities associated with the production or multiplying of stock
11-13    such as the development of new plants from cuttings, grafts, plugs,
11-14    or seedlings.
11-15          SECTION 2.02.  Subsection (a), Section 11.023, Water Code, is
11-16    amended to read as follows:
11-17          (a)  State water may be appropriated, stored, or diverted
11-18    for:
11-19                (1)  domestic and municipal uses, including water for
11-20    sustaining human life and the life of domestic animals;
11-21                (2)  agricultural uses and industrial uses, meaning
11-22    processes designed to convert materials of a lower order of value
11-23    into forms having greater usability and commercial value, including
11-24    the development of power by means other than hydroelectric;
11-25                (3)  [irrigation;]
11-26                [(4)]  mining and recovery of minerals;
 12-1                (4) [(5)]  hydroelectric power;
 12-2                (5) [(6)]  navigation;
 12-3                (6) [(7)]  recreation and pleasure;
 12-4                (7) [(8)  stock raising;]
 12-5                [(9)]  public parks; and
 12-6                (8) [(10)]  game preserves.
 12-7          SECTION 2.03.  Section 11.024, Water Code, is amended to read
 12-8    as follows:
 12-9          Sec. 11.024.  APPROPRIATION:  PREFERENCES.  In order to
12-10    conserve and properly utilize state water, the public welfare
12-11    requires not only recognition of beneficial uses but also a
12-12    constructive public policy regarding the preferences between these
12-13    uses, and it is therefore declared to be the public policy of this
12-14    state that in appropriating state water preference shall be given
12-15    to the following uses in the order named:
12-16                (1)  domestic and municipal uses, including water for
12-17    sustaining human life and the life of domestic animals, it being
12-18    the public policy of the state and for the benefit of the greatest
12-19    number of people that in the appropriation of water as herein
12-20    defined, the appropriation of water for domestic and municipal uses
12-21    shall be and remain superior to the rights of the state to
12-22    appropriate the same for all other purposes;
12-23                (2)  agricultural uses and industrial uses, which means
12-24    [meaning] processes designed to convert materials of a lower order
12-25    of value into forms having greater usability and commercial value,
12-26    including the development of power by means other than
 13-1    hydroelectric;
 13-2                (3)  [irrigation;]
 13-3                [(4)]  mining and recovery of minerals;
 13-4                (4) [(5)]  hydroelectric power;
 13-5                (5) [(6)]  navigation;
 13-6                (6) [(7)]  recreation and pleasure; and
 13-7                (7) [(8)]  other beneficial uses.
 13-8          SECTION 2.04.  Section 11.038, Water Code, is amended to read
 13-9    as follows:
13-10          Sec. 11.038.  RIGHTS OF OWNERS OF LAND ADJOINING CANAL, ETC.
13-11    (a)  A person who owns or holds a possessory interest in land
13-12    adjoining or contiguous to a canal, ditch, flume, lateral, dam,
13-13    reservoir, or lake constructed and maintained under the provisions
13-14    of this chapter and who has secured a right to the use of water in
13-15    the canal, ditch, flume, lateral, dam, reservoir, or lake is
13-16    entitled to be supplied from the canal, ditch, flume, lateral, dam,
13-17    reservoir, or lake with water [for irrigation of the land and] for
13-18    agricultural uses, mining, milling, manufacturing, development of
13-19    power, and stock raising, in accordance with the terms of the
13-20    person's [his] contract.
13-21          (b)  If the person, association of persons, or corporation
13-22    owning or controlling the water and the person who owns or holds a
13-23    possessory interest in the adjoining land cannot agree on a price
13-24    for a permanent water right or for the use of enough water for
13-25    irrigation of the person's land or for agricultural uses, mining,
13-26    milling, manufacturing, development of power, or stock raising,
 14-1    then the party owning or controlling the water, if the person [he]
 14-2    has any water not contracted to others, shall furnish the water
 14-3    necessary for these purposes at reasonable and nondiscriminatory
 14-4    prices.
 14-5          SECTION 2.05.  Subsection (p), Section 11.085, Water Code, is
 14-6    amended to read as follows:
 14-7          (p)  [For the purposes of this section, a basin is designated
 14-8    as provided in accordance with Section 16.051 of this code.]  A
 14-9    river basin may not be redesignated in order to allow a transfer or
14-10    diversion of water otherwise in violation of this section.
14-11          SECTION 2.06.  Section 11.088, Water Code, is amended to read
14-12    as follows:
14-13          Sec. 11.088.  DESTRUCTION OF WATERWORKS.  No person may
14-14    wilfully cut, dig, break down, destroy, or injure or open a gate,
14-15    bank, embankment, or side of any ditch, canal, reservoir, flume,
14-16    tunnel or feeder, pump or machinery, building, structure, or other
14-17    work which is the property of another, or in which another owns an
14-18    interest, or which is lawfully possessed or being used by another,
14-19    and which is used for [irrigation,] milling, mining, manufacturing,
14-20    the development of power, domestic purposes, agricultural uses, or
14-21    stock raising, with intent to:
14-22                (1)  maliciously injure a person, association,
14-23    corporation, water improvement or irrigation district;
14-24                (2)  gain advantage for himself; or
14-25                (3)  take or steal water or cause water to run out or
14-26    waste out of the ditch, canal, or reservoir, feeder, or flume for
 15-1    his own advantage or to the injury of a person lawfully entitled to
 15-2    the use of the water or the use or management of the ditch, canal,
 15-3    tunnel, reservoir, feeder, flume, machine, structure, or other
 15-4    irrigation work.
 15-5          SECTION 2.07.  Subsection (a), Section 11.122, Water Code, is
 15-6    amended to read as follows:
 15-7          (a)  All holders of permits, certified filings, and
 15-8    certificates of adjudication issued under Section 11.323 of this
 15-9    code shall obtain from the commission authority to change the place
15-10    of use, purpose of use, point of diversion, rate of diversion,
15-11    acreage to be irrigated, or otherwise alter a water right.  Without
15-12    obtaining an amendment, the holder of a permit, certified filing,
15-13    or certificate of adjudication that includes industrial or
15-14    irrigation use may use or supply water for an agricultural use that
15-15    was classified as industrial or irrigation before September 1,
15-16    2001.
15-17          SECTION 2.08.  Subsection (b), Section 11.134, Water Code, is
15-18    amended to read as follows:
15-19          (b)  The commission shall grant the application only if:
15-20                (1)  the application conforms to the requirements
15-21    prescribed by this chapter and is accompanied by the prescribed
15-22    fee;
15-23                (2)  unappropriated water is available in the source of
15-24    supply;
15-25                (3)  the proposed appropriation:
15-26                      (A)  is intended for a beneficial use;
 16-1                      (B)  does not impair existing water rights or
 16-2    vested riparian rights;
 16-3                      (C)  is not detrimental to the public welfare;
 16-4                      (D)  considers the assessments performed under
 16-5    Sections 11.147(d) and (e) and Sections 11.150, 11.151, and 11.152
 16-6    [effects of any hydrological connection between surface water and
 16-7    groundwater]; and
 16-8                      (E)  addresses a water supply need in a manner
 16-9    that is consistent with the state water plan and the relevant [an]
16-10    approved regional water plan for any area in which the proposed
16-11    appropriation is located, unless the commission determines that
16-12    conditions warrant waiver of this requirement; and
16-13                (4)  the applicant has provided evidence that
16-14    reasonable diligence will be used to avoid waste and achieve water
16-15    conservation as defined by Subdivision (8)(B), Section 11.002[, of
16-16    this code].
16-17          SECTION 2.09.  Section 11.142, Water Code, is amended to read
16-18    as follows:
16-19          Sec. 11.142.  PERMIT EXEMPTIONS.  (a)  Without obtaining a
16-20    permit, a person may construct on the person's [his] own property a
16-21    dam or reservoir with normal storage of not more than 200 acre-feet
16-22    of water for domestic and livestock purposes.  A person who
16-23    temporarily stores more than 200 acre-feet of water in a dam or
16-24    reservoir described by this subsection is not required to obtain a
16-25    permit for the dam or reservoir if the person can demonstrate that
16-26    the person has not stored in the dam or reservoir more than 200
 17-1    acre-feet of water on average in any 12-month period.  This
 17-2    exemption does not apply to a commercial operation.
 17-3          (b)  Without obtaining a permit, a person may construct on
 17-4    the person's property a dam or reservoir with normal storage of not
 17-5    more than 200 acre-feet of water for fish and wildlife purposes if
 17-6    the property on which the dam or reservoir will be constructed is
 17-7    qualified open-space land, as defined by Section 23.51, Tax Code.
 17-8    This exemption does not apply to a commercial operation.
 17-9          (c)  Without obtaining a permit, a person who is drilling and
17-10    producing petroleum and conducting operations associated with
17-11    drilling and producing petroleum may take for those purposes state
17-12    water from the Gulf of Mexico and adjacent bays and arms of the
17-13    Gulf of Mexico in an amount not to exceed one acre-foot during each
17-14    24-hour period.
17-15          (d) [(c)]  Without obtaining a permit, a person may construct
17-16    or maintain a reservoir for the sole purpose of sediment control as
17-17    part of a surface coal mining operation under the Texas Surface
17-18    Coal Mining and Reclamation Act (Article 5920-11, Vernon's Texas
17-19    Civil Statutes).
17-20          SECTION 2.10.  Section 11.146, Water Code, is amended by
17-21    adding Subsection (g) to read as follows:
17-22          (g)  This section does not apply to a permit for construction
17-23    of a reservoir designed for the storage of more than 50,000
17-24    acre-feet of water.
17-25          SECTION 2.11.  Subsection (b), Section 11.147, Water Code, is
17-26    amended to read as follows:
 18-1          (b)  In its consideration of an application for a permit to
 18-2    store, take, or divert water, the commission shall assess the
 18-3    effects, if any, of the issuance of the permit on the bays and
 18-4    estuaries of Texas.  For permits issued within an area that is 200
 18-5    river miles of the coast, to commence from the mouth of the river
 18-6    thence inland, the commission shall include in the permit, to the
 18-7    extent practicable when considering all public interests and the
 18-8    studies mandated by Section 16.058 as evaluated under Section
 18-9    11.1491, those conditions considered necessary to maintain
18-10    beneficial inflows to any affected bay and estuary system.
18-11          SECTION 2.12.  Subsection (b), Section 11.173, Water Code, is
18-12    amended to read as follows:
18-13          (b)  A permit, certified filing, or certificate of
18-14    adjudication or a portion of a permit, certified filing, or
18-15    certificate of adjudication is exempt from cancellation under
18-16    Subsection (a) [of this section]:
18-17                (1)  to the extent of the owner's participation in the
18-18    Conservation Reserve Program authorized by the Food Security Act,
18-19    Pub.L. No. 99-198, Secs. 1231-1236, 99 Stat. 1354, 1509-1514 (1985)
18-20    or a similar governmental program; [or]
18-21                (2)  if a significant [any] portion of the water
18-22    authorized to be used pursuant to a permit, certified filing, or
18-23    certificate of adjudication has been used in accordance with a
18-24    specific recommendation for meeting a water need included in the
18-25    regional water plan approved pursuant to Section 16.053;
18-26                (3)  if the permit, certified filing, or certificate of
 19-1    adjudication:
 19-2                      (A)  was obtained to meet demonstrated long-term
 19-3    public water supply or electric generation needs as evidenced by a
 19-4    water management plan developed by the holder; and
 19-5                      (B)  is consistent with projections of future
 19-6    water needs contained in the state water plan; or
 19-7                (4)  if the permit, certified filing, or certificate of
 19-8    adjudication was obtained as the result of the construction of a
 19-9    reservoir funded, in whole or in part, by the holder of the permit,
19-10    certified filing, or certificate of adjudication as part of the
19-11    holder's long-term water planning [of this code].
19-12          SECTION 2.13.  Subsection (b), Section 11.177, Water Code, is
19-13    amended to read as follows:
19-14          (b)  In determining what constitutes reasonable diligence or
19-15    a justified nonuse as used in Subsection (a)(2) [of this section],
19-16    the commission shall give consideration to:
19-17                (1)  whether sufficient water is available in the
19-18    source of supply to meet all or part of the appropriation during
19-19    the 10-year period of nonuse;
19-20                (2)  whether the nonuse is justified by the holder's
19-21    participation in the federal Conservation Reserve Program or a
19-22    similar governmental program as provided by Section 11.173(b)(1)
19-23    [of this code];
19-24                (3)  [whether the permit, certified filing, or
19-25    certificate of adjudication was obtained to meet demonstrated
19-26    long-term public water supply or electric generation needs as
 20-1    evidenced by a water management plan developed by the holder and
 20-2    consistent with projections of future water needs contained in the
 20-3    state water plan;]
 20-4                [(4)  whether the permit, certified filing, or
 20-5    certificate of adjudication was obtained as the result of the
 20-6    construction of a reservoir funded, in whole or in part, by the
 20-7    holder of the permit, certified filing, or certificate of
 20-8    adjudication as part of the holder's long-term water planning;]
 20-9                [(5)]  whether the existing or proposed authorized
20-10    purpose and place of use are consistent with an approved regional
20-11    water plan as provided by Section 16.053 [of this code];
20-12                (4) [(6)]  whether the permit, certified filing, or
20-13    certificate of adjudication has been deposited into the Texas Water
20-14    Bank as provided by Sections 15.7031 and 15.704 [of this code] or
20-15    whether it can be shown that the water right or water available
20-16    under the right is currently being made available for purchase
20-17    through private marketing efforts; or
20-18                (5) [(7)]  whether the permit, certified filing, or
20-19    certificate of adjudication has been reserved to provide for
20-20    instream flows or bay and estuary inflows.
20-21          SECTION 2.14.  Subdivision (2), Section 15.701, Water Code,
20-22    is amended to read as follows:
20-23                (2)  "Depositor" means a person who deposits or has on
20-24    deposit a water right in the water bank or trust.
20-25          SECTION 2.15.  Section 16.012, Water Code, is amended by
20-26    adding Subsections (l) and (m) to read as follows:
 21-1          (l)  The executive administrator shall obtain or develop
 21-2    groundwater availability models for major and minor aquifers in
 21-3    coordination with groundwater conservation districts and regional
 21-4    water planning groups created under Section 16.053 that overlie the
 21-5    aquifers.  Modeling of major aquifers shall be completed not later
 21-6    than October 1, 2004.  On completing a groundwater availability
 21-7    model for an aquifer, the executive administrator shall provide the
 21-8    model to each groundwater conservation district and each regional
 21-9    water planning group created under Section 16.053 overlying that
21-10    aquifer.
21-11          (m)  The executive administrator may conduct surveys of
21-12    entities using groundwater and surface water at intervals
21-13    determined appropriate by the executive administrator to gather
21-14    data to be used for long-term water supply planning.  Recipients of
21-15    the survey shall complete and return the survey to the executive
21-16    administrator.  A person who fails to timely complete and return
21-17    the survey is not eligible for funding from the board for board
21-18    programs and is ineligible to obtain permits, permit amendments, or
21-19    permit renewals from the commission under Chapter 11.  A person who
21-20    fails to complete and return the survey commits an offense that is
21-21    punishable as a Class C misdemeanor.  Surveys obtained by the board
21-22    from nongovernmental entities are excepted from the requirements of
21-23    Section 552.021, Government Code, unless otherwise directed in
21-24    writing by the person completing the survey.  This subsection does
21-25    not apply to survey information regarding windmills used for
21-26    domestic and livestock use.
 22-1          SECTION 2.16.  Subsections (a), (f), (g), and (h), Section
 22-2    16.051, Water Code, are amended to read as follows:
 22-3          (a)  Not [No] later than January 5, 2002, and before the end
 22-4    of each successive five-year period after that date [every five
 22-5    years thereafter], the board shall prepare, develop, formulate, and
 22-6    adopt a comprehensive state water plan that incorporates the
 22-7    regional water plans approved under Section 16.053.  The state
 22-8    water plan shall provide for the orderly development, management,
 22-9    and conservation of water resources and preparation for and
22-10    response to drought conditions, in order that sufficient water will
22-11    be available at a reasonable cost to ensure public health, safety,
22-12    and welfare; further economic development; and protect the
22-13    agricultural and natural resources of the entire state.
22-14          (f)  The legislature may designate a[:]
22-15                [(1)]  river or stream segment of unique ecological
22-16    value.  This designation solely means that a state agency or
22-17    political subdivision of the state may not finance the actual
22-18    construction of a reservoir in a specific river or stream segment
22-19    designated by the legislature under this subsection.
22-20          (g)  The legislature may designate a[; or]
22-21                [(2)]  site of unique value for the construction of a
22-22    reservoir.
22-23          [(g)]  A state agency or political subdivision of the state
22-24    may not obtain a fee title or an easement that would[:]
22-25                [(1)  destroy the unique ecological value of a river or
22-26    stream segment designated by the legislature under Subsection (f)
 23-1    of this section; or]
 23-2                [(2)]  significantly prevent the construction of a
 23-3    reservoir on a site designated by the legislature under [Subsection
 23-4    (f) of] this subsection [section].
 23-5          (h)  The board, the commission, or the Parks and Wildlife
 23-6    Department or a political subdivision affected by an action taken
 23-7    in violation of Subsection (f) or (g) [of this section] may bring a
 23-8    cause of action to remedy or prevent the violation.  A cause of
 23-9    action brought under this subsection must be filed in a district
23-10    court in Travis County or in the county in which the action is
23-11    proposed or occurring.
23-12          SECTION 2.17.  Subsections (d) and (e), Section 16.053, Water
23-13    Code, are amended to read as follows:
23-14          (d)  The board shall provide guidelines for the consideration
23-15    of existing regional planning efforts by regional water planning
23-16    groups.  The board shall provide guidelines for the format in which
23-17    information shall be presented in the regional water plans.  The
23-18    board by rule shall require a holder of a surface water permit, a
23-19    certified filing, or a certificate of adjudication for surface
23-20    water, a holder of a permit for the export of groundwater from a
23-21    groundwater conservation district, a retail public water supplier,
23-22    a wholesale water provider, an irrigation district, and any other
23-23    person who is transporting groundwater or surface water 20 miles or
23-24    more to report to the board information on certain water pipelines
23-25    and other facilities that can be used for water conveyance.
23-26    Nothing in the initial planning effort shall prevent development of
 24-1    a management plan or project where local or regional needs require
 24-2    action prior to completion of the initial regional water plan under
 24-3    this section.
 24-4          (e)  Each regional water planning group shall submit to the
 24-5    board a regional water plan that:
 24-6                (1)  is consistent with the guidance principles for the
 24-7    state water plan adopted by the board under Section 16.051(d);
 24-8                (2)  provides information based on data provided or
 24-9    approved by the board in a format consistent with the guidelines
24-10    provided by the board under Subsection (d);
24-11                (3)  identifies:
24-12                      (A)  each source of water supply in the regional
24-13    water planning area in accordance with the guidelines provided by
24-14    the board under Subsections (d) and (f);
24-15                      (B)  factors specific to each source of water
24-16    supply to be considered in determining whether to initiate a
24-17    drought response; [and]
24-18                      (C)  actions to be taken as part of the response;
24-19    and
24-20                      (D)  information on water pipelines and other
24-21    facilities that can be used for water conveyance, including, but
24-22    not limited to, currently used and abandoned oil, gas, and water
24-23    pipelines, as provided by board rules and guidelines;
24-24                (4)  has specific provisions for water management
24-25    strategies to be used during a drought of record;
24-26                (5)  includes but is not limited to consideration of
 25-1    the following:
 25-2                      (A)  any existing water or drought planning
 25-3    efforts addressing all or a portion of the region;
 25-4                      (B)  certified groundwater conservation district
 25-5    management plans and other plans submitted under Section 16.054;
 25-6                      (C)  all potentially feasible water management
 25-7    strategies, including but not limited to improved conservation,
 25-8    reuse, and management of existing water supplies, acquisition of
 25-9    available existing water supplies, and development of new water
25-10    supplies;
25-11                      (D)  protection of existing water rights in the
25-12    region;
25-13                      (E)  opportunities for and the benefits of
25-14    developing regional water supply facilities or providing regional
25-15    management of water supply facilities;
25-16                      (F)  appropriate provision for environmental
25-17    water needs and for the effect of upstream development on the bays,
25-18    estuaries, and arms of the Gulf of Mexico and the effect of plans
25-19    on navigation;
25-20                      (G)  provisions in Section 11.085(k)(1) if
25-21    interbasin transfers are contemplated;
25-22                      (H)  voluntary transfer of water within the
25-23    region using, but not limited to, regional water banks, sales,
25-24    leases, options, subordination agreements, and financing
25-25    agreements; and
25-26                      (I)  emergency transfer of water under Section
 26-1    11.139, including information on the part of each permit, certified
 26-2    filing, or certificate of adjudication for nonmunicipal use in the
 26-3    region that may be transferred without causing unreasonable damage
 26-4    to the property of the nonmunicipal water rights holder; [and]
 26-5                (6)  identifies river and stream segments of unique
 26-6    ecological value and sites of unique value for the construction of
 26-7    reservoirs that the regional water planning group recommends for
 26-8    protection under Section 16.051;
 26-9                (7)  assesses the impact of the plan on unique river
26-10    and stream segments identified in Subdivision (6) if the regional
26-11    water planning group or the legislature determines that a site of
26-12    unique ecological value exists; and
26-13                (8)  describes the impact of proposed water projects on
26-14    water quality.
26-15          SECTION 2.18.  Subdivision (7), Subsection (h), Section
26-16    16.053, Water Code, is amended to read as follows:
26-17                (7)  The board may approve a regional water plan only
26-18    after it has determined that:
26-19                      (A)  all interregional conflicts involving that
26-20    regional water planning area have been resolved;
26-21                      (B)  the plan includes water conservation
26-22    practices and drought management measures incorporating, at a
26-23    minimum, the provisions of Sections 11.1271 and 11.1272; and
26-24                      (C)  the plan is consistent with long-term
26-25    protection of the state's water resources, agricultural resources,
26-26    and natural resources as embodied in the guidance principles
 27-1    adopted under Section 16.051(d).
 27-2          SECTION 2.19.  Section 16.053, Water Code, is amended by
 27-3    amending Subsection (j) and adding Subsections (p) and (q) to read
 27-4    as follows:
 27-5          (j)  The board may provide financial assistance to political
 27-6    subdivisions under Subchapters E and F of this chapter, Subchapters
 27-7    C, D, E, F, [and] J, O, and P, Chapter 15, and Subchapters D, I, K,
 27-8    and L, Chapter 17, for water supply projects only if:
 27-9                (1)  the board determines that the needs to be
27-10    addressed by the project will be addressed in a manner that is
27-11    consistent with the state water plan; and
27-12                (2)  beginning January 5, 2002, the board:
27-13                      (A)  has approved a regional water plan as
27-14    provided by Subsection (i), and any required updates of the plan,
27-15    for the region of the state that includes the area benefiting from
27-16    the proposed project; and
27-17                      (B)  determines that the needs to be addressed by
27-18    the project will be addressed in a manner that is consistent with
27-19    that regional water plan.
27-20          (p)  If a groundwater conservation district files a petition
27-21    with the board stating that a conflict requiring resolution may
27-22    exist between the district's certified groundwater conservation
27-23    district management plan developed under Section 36.1071 and the
27-24    approved regional water plan, the board shall facilitate
27-25    coordination between the district and the involved region to
27-26    resolve the conflict.  If conflict remains, the board shall resolve
 28-1    the conflict.  If the board determines that resolution of conflict
 28-2    requires a revision of an approved regional water plan, the board
 28-3    shall suspend the approval of that plan and provide information to
 28-4    the regional water planning group.  The regional water planning
 28-5    group shall prepare any revisions to its plan specified by the
 28-6    board and shall hold, after notice, at least one public hearing at
 28-7    some central location within the regional water planning area.  The
 28-8    regional water planning group shall consider all public and board
 28-9    comments, prepare, revise, and adopt its plan, and submit the
28-10    revised plan to the board for approval and inclusion in the state
28-11    water plan.  If the board determines that resolution of conflict
28-12    requires a revision of the district's certified groundwater
28-13    conservation district management plan, the board shall suspend the
28-14    certification of that plan and provide information to the district.
28-15    The groundwater district shall prepare any revisions to its plan
28-16    specified by the board and shall hold, after notice, at least one
28-17    public hearing at some central location within the district.  The
28-18    groundwater district shall consider all public and board comments,
28-19    prepare, revise, and adopt its plan, and submit the revised plan to
28-20    the board for certification.  On the request of the involved region
28-21    or groundwater conservation district, the board shall include
28-22    discussion of the conflict and its resolution in the state water
28-23    plan that the board provides to the governor, the lieutenant
28-24    governor, and the speaker of the house of representatives under
28-25    Section 16.051(e).
28-26          (q)  Each regional planning group shall examine the financing
 29-1    needed to implement the water management strategies and projects
 29-2    identified in the group's most recent approved regional plan and,
 29-3    not later than June 1, 2002, shall report to the board regarding:
 29-4                (1)  how local governments, regional authorities, and
 29-5    other political subdivisions in the region propose to pay for water
 29-6    infrastructure projects identified in the plan; and
 29-7                (2)  what role the regional planning group proposes for
 29-8    the state in financing projects identified in the plan, giving
 29-9    particular attention to proposed increases in the level of state
29-10    participation in funding for regional projects to meet needs beyond
29-11    the reasonable financing capability of local governments, regional
29-12    authorities, and other political subdivisions involved in building
29-13    water infrastructure.
29-14          SECTION 2.20.  Subsections (a), (c), and (d), Section 16.054,
29-15    Water Code, are amended to read as follows:
29-16          (a)  Notwithstanding the provisions of this subsection,
29-17    groundwater districts are the state's preferred method of managing
29-18    groundwater resources.  It is the policy of the state that water
29-19    resource management, water conservation, and drought planning
29-20    should occur on an ongoing basis.  The board, commission, and Parks
29-21    and Wildlife Department shall make available where appropriate
29-22    technical and financial assistance for such planning.  In addition,
29-23    the Department of Agriculture may provide input and assistance, as
29-24    appropriate, for local water [such] planning.
29-25          (c)  When preparing a plan to be submitted under this
29-26    section, a person shall consider the implementation of a
 30-1    desalination program if practicable.
 30-2          (d)  The regional water planning group shall consider any
 30-3    plan submitted under this section when preparing the regional water
 30-4    plan under Section 16.053 of this code.  A political subdivision,
 30-5    including a groundwater conservation district, in the regional
 30-6    water planning area may request a regional water planning group to
 30-7    consider specific changes to a regional water plan based on changed
 30-8    conditions or new information.  The regional water planning group
 30-9    shall consider the request and shall amend its regional water plan
30-10    if it determines that an amendment is warranted.  If the entity
30-11    requesting the change is dissatisfied with the decision of the
30-12    regional planning group, the entity may request that the board
30-13    review the decision and consider changing the state-approved
30-14    regional plan.
30-15          (e)  After January 5, 2002, when [(d)  When] preparing
30-16    individual water plans that address drought or the development,
30-17    management, or conservation of water resources from the holders of
30-18    existing permits, certified filings, or certificates of
30-19    adjudication, the water suppliers, [groundwater districts,] special
30-20    districts, irrigation districts, and other water users should
30-21    ensure that the plan is not in conflict with the applicable
30-22    approved regional water plan for their region.
30-23          SECTION 2.21.  Subdivision (11), Section 35.002, Water Code,
30-24    is amended to read as follows:
30-25                (11)  "Management area" means an area designated and
30-26    delineated by the Texas Water Development Board [commission] as an
 31-1    area suitable for management of groundwater resources.
 31-2          SECTION 2.22.  Section 35.004, Water Code, is amended to read
 31-3    as follows:
 31-4          Sec. 35.004.  DESIGNATION OF GROUNDWATER MANAGEMENT AREAS.
 31-5    (a)  The Texas Water Development Board, with assistance and
 31-6    cooperation from the commission, shall designate groundwater
 31-7    management areas covering all major and minor aquifers in the
 31-8    state.  The initial designation of groundwater management areas
 31-9    shall be completed not later than September 1, 2003 [On its own
31-10    motion from time to time, or on receiving a petition, the
31-11    commission may designate groundwater management areas].  Each
31-12    groundwater management area shall be designated with the objective
31-13    of providing the most suitable area for the management of the
31-14    groundwater resources.  To the extent feasible, the groundwater
31-15    management area shall coincide with the boundaries of a groundwater
31-16    reservoir or a subdivision of a groundwater reservoir.  The Texas
31-17    Water Development Board [commission] also may consider other
31-18    factors, including the boundaries of political subdivisions.
31-19          (b)  The commission may designate a groundwater management
31-20    area after September 1, 2001, for a petition filed and accepted by
31-21    the commission according to its rules in effect before September 1,
31-22    2001.  The commission shall act on the designation in accordance
31-23    with this section [On the request of any person interested in the
31-24    petition, or on the request of the commission, the executive
31-25    director shall prepare available evidence relating to the
31-26    configuration of a groundwater management area.  Before making the
 32-1    designation, the commission shall consider the evidence prepared by
 32-2    the executive director and other evidence submitted at the
 32-3    hearing].
 32-4          (c)  The Texas Water Development Board [commission] may alter
 32-5    the boundaries of designated management areas as required by future
 32-6    conditions and as justified by factual data.  An alteration of
 32-7    boundaries does not invalidate the previous creation of any
 32-8    district.
 32-9          (d)  The Texas Water Development Board [commission] shall
32-10    designate groundwater management areas using the procedures
32-11    applicable to rulemaking under [the Administrative Procedure Act,
32-12    Subchapter B,] Chapter 2001, Government Code.
32-13          SECTION 2.23.  Subsections (a) and (f), Section 35.007, Water
32-14    Code, are amended to read as follows:
32-15          (a)  The executive director and the executive administrator
32-16    shall meet periodically [at least once a year] to identify, based
32-17    on information gathered by the commission and the Texas Water
32-18    Development Board, those areas of the state that are experiencing
32-19    or that are expected to experience, within the immediately
32-20    following 25-year period, critical groundwater problems, including
32-21    shortages of surface water or groundwater, land subsidence
32-22    resulting from groundwater withdrawal, and contamination of
32-23    groundwater supplies.  Not later than September 1, 2005, the
32-24    commission, with assistance and cooperation from the Texas Water
32-25    Development Board, shall complete the initial designation of
32-26    priority groundwater management areas across all major and minor
 33-1    aquifers of the state for all areas that meet the criteria for that
 33-2    designation.  The studies may be prioritized considering
 33-3    information from the regional planning process, information from
 33-4    the Texas Water Development Board groundwater management areas and
 33-5    from groundwater conservation districts, and any other information
 33-6    available.  After the initial designation of priority groundwater
 33-7    management areas, the commission and the Texas Water Development
 33-8    Board shall annually review the need for additional designations as
 33-9    provided by this subsection.
33-10          (f)  The report shall include:
33-11                (1)  the recommended delineation of the boundaries of
33-12    any proposed priority groundwater management area in the form of an
33-13    order to be considered for adoption by the commission;
33-14                (2)  the reasons and supporting information for or
33-15    against designating the area as a priority groundwater management
33-16    area;
33-17                (3)  a recommendation regarding whether one or more
33-18    districts [a district] should be created in the priority
33-19    groundwater management area, [or] whether the priority groundwater
33-20    management area should be added to an existing district, or whether
33-21    a combination of those actions should be taken;
33-22                (4)  a recommendation as to actions that should be
33-23    considered to conserve natural resources;
33-24                (5)  an evaluation of information or studies submitted
33-25    to the executive director under Subsection (c); and
33-26                (6)  any other information that the executive director
 34-1    considers helpful to the commission.
 34-2          SECTION 2.24.  Section 35.008, Water Code, is amended to read
 34-3    as follows:
 34-4          Sec. 35.008.  PROCEDURES FOR DESIGNATION OF PRIORITY
 34-5    GROUNDWATER MANAGEMENT AREA; CONSIDERATION OF CREATION OF NEW
 34-6    DISTRICT OR ADDITION OF LAND IN PRIORITY GROUNDWATER MANAGEMENT
 34-7    AREA TO EXISTING DISTRICT; COMMISSION ORDER.  (a)  The commission
 34-8    shall designate priority groundwater management areas using the
 34-9    procedures provided by this chapter in lieu of those provided by
34-10    Subchapter B, Chapter 2001, Government Code.
34-11          (b)  The commission shall call an evidentiary hearing to
34-12    consider:
34-13                (1)  the designation of a priority groundwater
34-14    management area; and
34-15                (2)  whether one or more districts [a district] should
34-16    be created over all or part of a priority groundwater management
34-17    area,[; or]
34-18                [(3)  whether] all or part of the land in the priority
34-19    groundwater management area should be added to an existing
34-20    district, or a combination of those actions should be taken.
34-21    Consideration of this issue shall include a determination of
34-22    whether a district is feasible and practicable.
34-23          (c)  Evidentiary hearings shall be held at a location in one
34-24    of the counties in which the priority groundwater management area
34-25    is located, or proposed to be located, or in the nearest convenient
34-26    location if adequate facilities are not available in those
 35-1    counties.
 35-2          (d)  At the hearing, the commission shall hear testimony and
 35-3    receive evidence from affected persons.  Affected persons shall
 35-4    include landowners, well owners, and other users of groundwater in
 35-5    the proposed priority groundwater management area.  The commission
 35-6    shall consider the executive director's report and supporting
 35-7    information and the testimony and evidence received at the hearing.
 35-8    If the commission considers further information necessary, the
 35-9    commission may request such information from any source.
35-10          (e)  Any evidentiary hearing shall be concluded not later
35-11    than the 75th day after the date notice of the hearing is
35-12    published.
35-13          (f)  At the conclusion of the hearing and the commission's
35-14    considerations, the commission shall issue an order stating its
35-15    findings and conclusions, including whether a priority groundwater
35-16    management area should be designated in the area and
35-17    recommendations regarding district creation as set forth in
35-18    Subsection (g).
35-19          (g)  The commission's order designating a priority
35-20    groundwater management area must recommend that the area be covered
35-21    by a district in any of the following ways:
35-22                (1)  creation of one or more new districts;
35-23                (2)  addition of the land in the priority groundwater
35-24    management area to one or more existing districts; or
35-25                (3)  a combination of actions under Subdivisions (1)
35-26    and (2).
 36-1          (h)  In recommending the boundaries of a district or
 36-2    districts under Subsection (g), the commission shall give
 36-3    preference to boundaries that are coterminous with those of the
 36-4    priority groundwater management area, but may recommend district
 36-5    boundaries along existing political subdivision boundaries at the
 36-6    discretion of the commission to facilitate district creation and
 36-7    confirmation.
 36-8          (i)  The designation of a priority groundwater management
 36-9    area may not be appealed nor may it be challenged under Section
36-10    5.351 of this code or [the Administrative Procedure Act,] Section
36-11    2001.038, Government Code.
36-12          SECTION 2.25.  Subsections (a) and (b), Section 35.009, Water
36-13    Code, are amended to read as follows:
36-14          (a)  The commission shall have notice of the hearing
36-15    published in at least one newspaper with general circulation in the
36-16    county or counties in which the area proposed for designation as a
36-17    priority groundwater management area [or the area within a priority
36-18    groundwater management area being considered for district creation
36-19    or for addition to an existing district] is located.  Notice must
36-20    be published not later than the 30th day before the date set for
36-21    the hearing [commission to consider the designation of the priority
36-22    groundwater management area, the creation of a district in a
36-23    priority groundwater management area, or the addition of land in a
36-24    priority groundwater management area to an existing district].
36-25          (b)  The notice must include:
36-26                (1)  if applicable, a statement of the general purpose
 37-1    and effect of designating the proposed priority groundwater
 37-2    management area;
 37-3                (2)  if applicable, a statement of the general purpose
 37-4    and effect of creating a new district in the priority groundwater
 37-5    management area;
 37-6                (3)  if applicable, a statement of the general purpose
 37-7    and effect of adding all or part of the land in the priority
 37-8    groundwater management area to an existing district;
 37-9                (4)  a map generally outlining the boundaries of the
37-10    area being considered for priority groundwater management area
37-11    designation [or the priority groundwater management area being
37-12    considered for district creation or for addition to an existing
37-13    district,] or notice of the location at which a copy of the map may
37-14    be examined or obtained;
37-15                (5)  a statement that the executive director's report
37-16    concerning the priority groundwater management area or proposed
37-17    area is available at the commission's main office in Austin, Texas,
37-18    and at regional offices of the commission for regions which include
37-19    territory within the priority groundwater management area or
37-20    proposed priority groundwater management area and that the report
37-21    is available for inspection during regular business hours;
37-22                (6)  a description or the name of the locations in the
37-23    affected area at which the commission has provided copies of the
37-24    executive director's report to be made available for public
37-25    inspection;
37-26                (7)  the name and address of each public library, each
 38-1    county clerk's office, and each district to which the commission
 38-2    has provided copies of the executive director's report; and
 38-3                (8)  the date, time, and place of the hearing.
 38-4          SECTION 2.26.  Section 35.012, Water Code, is amended to read
 38-5    as follows:
 38-6          Sec. 35.012.  CREATION OF DISTRICT IN PRIORITY GROUNDWATER
 38-7    MANAGEMENT AREA [COMMISSIONER ORDER].  (a)  [At the conclusion of
 38-8    its hearing and considerations, the commission shall issue an] [order
 38-9    stating its findings and conclusions.]
38-10          [(b)  If the commission finds that the land and other
38-11    property in the priority groundwater management area would benefit
38-12    from the creation of one or more districts, that there is a public
38-13    need for one or more districts, and that the creation of one or
38-14    more districts would further the public welfare, the commission
38-15    shall issue an order stating that the creation of one or more
38-16    districts is needed.]
38-17          [(c)]  Following the issuance of a commission order under
38-18    Section 35.008 designating a priority groundwater management area
38-19    and recommending the creation of one or more districts, or the
38-20    addition of land to an existing district [Subsection (b)], the
38-21    landowners in the priority groundwater management area may:
38-22                (1)  create one or more districts under Subchapter B,
38-23    Chapter 36;
38-24                (2)  have the area annexed to a district that adjoins
38-25    the area; or
38-26                (3)  create one or more districts through the
 39-1    legislative process.
 39-2          (b)  Within two years, but no sooner than 120 days, from the
 39-3    date on which the commission issues an order under Section 35.008
 39-4    designating a priority groundwater management area, for those areas
 39-5    that are not within a district, the commission shall:
 39-6                (1)  create one or more new districts under Section
 39-7    36.0151;
 39-8                (2)  recommend that the areas, or a portion of the
 39-9    areas, be added to an existing district under Section 35.013; or
39-10                (3)  take any combination of the actions under
39-11    Subdivisions (1) and (2).
39-12          (c)  Following the issuance of a commission order under
39-13    Section 35.008 [(d)  The commission shall identify the areas
39-14    subject to the order of the commission issued under Subsection (b)
39-15    that have not been incorporated into a district and shall delineate
39-16    proposed boundaries of a district to include those areas.  If the
39-17    commission proposes the creation of one or more districts], the
39-18    Texas Agricultural Extension Service shall begin an educational
39-19    program within such areas with the assistance and cooperation of
39-20    the Texas Water Development Board, the commission, the Department
39-21    of Agriculture, other state agencies, and existing districts to
39-22    inform the residents of the status of the area's water resources
39-23    and management options including possible formation of a district[,
39-24    before beginning the procedures for creation of a district provided
39-25    in Subchapter B, Chapter 36].  The county commissioners court of
39-26    each county in the priority groundwater management area shall form
 40-1    a steering committee to provide assistance to the Texas
 40-2    Agricultural Extension Service in accomplishing the goals of the
 40-3    education program within the area.
 40-4          [(e)  If the commission fails to find that the district would
 40-5    be a benefit to the land and other property within the priority
 40-6    groundwater management area, that there is a public need for the
 40-7    district, or that creation of the district will further the public
 40-8    welfare, the commission shall issue an order stating that a
 40-9    district should not be created within the boundaries of the
40-10    priority groundwater management area.]
40-11          [(f)  An order of the commission issued under this section
40-12    may not be appealed.]
40-13          SECTION 2.27.  Section 35.013, Water Code, is amended to read
40-14    as follows:
40-15          Sec. 35.013.  ADDING PRIORITY GROUNDWATER MANAGEMENT AREA TO
40-16    EXISTING DISTRICT.  (a)  [If land in a priority groundwater
40-17    management area is located adjacent to one or more existing
40-18    districts, the commission, instead of issuing an order under
40-19    Section 35.012, may issue an order recommending that the priority
40-20    groundwater management area be added to the existing district
40-21    designated by the commission.  In its order, the commission must
40-22    find that the land and other property in the priority groundwater
40-23    management area and the land in the existing district will benefit
40-24    from the addition of the area, that there is a public need to add
40-25    the priority groundwater management area to the existing district,
40-26    and that the addition of the land to the existing district would
 41-1    further the public welfare.]
 41-2          [(b)]  If the commission in its order under Section 35.008
 41-3    [executive director] recommends that the priority groundwater
 41-4    management area or a portion of the priority groundwater management
 41-5    area be added to an existing district [or if the commission
 41-6    considers it possible to add the priority groundwater management
 41-7    area to an adjacent existing district], the commission shall give
 41-8    notice to the board of the existing district recommended in its
 41-9    order [by the executive director or considered by the commission to
41-10    possibly serve the area] and to any other existing districts
41-11    adjacent to the priority groundwater management area.
41-12          (b) [(c)]  The commission shall submit a copy of the order to
41-13    the board of the district to which it is recommending the priority
41-14    groundwater management area be added.  The board shall vote on the
41-15    addition of the priority groundwater management area to the
41-16    district and shall advise the commission of the outcome.
41-17          (c) [(d)]  If the board votes to accept the addition of the
41-18    priority groundwater management area to the district, the board:
41-19                (1)  may request the Texas Agricultural Extension
41-20    Service, the commission, and the Texas Water Development Board,
41-21    with the cooperation and assistance of the Department of
41-22    Agriculture and other state agencies, to administer an educational
41-23    program to inform the residents of the status of the area's water
41-24    resources and management options including possible annexation into
41-25    a district;
41-26                (2)  shall call an election within the priority
 42-1    groundwater management area, or portion of the priority groundwater
 42-2    management area, as delineated by the commission to determine if
 42-3    the priority groundwater management area will be added to the
 42-4    district; and
 42-5                (3)  shall designate election precincts and polling
 42-6    places for the elections in the order calling an election under
 42-7    this subsection.
 42-8          (d) [(e)]  The board shall give notice of the election and
 42-9    the proposition to be voted on.  The board shall publish notice of
42-10    the election at least one time in one or more newspapers with
42-11    general circulation within the boundaries of the priority
42-12    groundwater management area.  The notice must be published before
42-13    the 30th day preceding the date set for the election.
42-14          (e) [(f)]  The ballots for the election shall be printed to
42-15    provide for voting for or against the proposition:  "The inclusion
42-16    of _________________________ (briefly describe priority groundwater
42-17    management area) in the ______________ District."  If the district
42-18    has outstanding debts or taxes, the proposition shall include the
42-19    following language:  "and assumption by the described area of a
42-20    proportional share of the debts or taxes of the district."
42-21          (f) [(g)]  Immediately after the election, the presiding
42-22    judge of each polling place shall deliver the returns of the
42-23    election to the board, and the board shall canvass the returns for
42-24    the election within the priority groundwater management area and
42-25    declare the results.  If a majority of the voters in the priority
42-26    groundwater management area voting on the proposition vote in favor
 43-1    of the proposition, the board shall declare that the priority
 43-2    groundwater management area is added to the district.  If a
 43-3    majority of the voters in the priority groundwater management area
 43-4    voting on the proposition vote against adding the priority
 43-5    groundwater management area to the district, the board shall
 43-6    declare that the priority groundwater management area is not added
 43-7    to the district.  The board shall file a copy of the election
 43-8    results with the commission.
 43-9          (g) [(h)]  If the voters approve adding the priority
43-10    groundwater management area to the district, the board of the
43-11    district to which the priority groundwater management area is added
43-12    shall provide reasonable representation on that board compatible
43-13    with the district's existing scheme of representation.  Not later
43-14    than the 30th day after the date on which the board declares that
43-15    the priority groundwater management area is added to the district,
43-16    the board of the existing district shall appoint a person or
43-17    persons to represent the area until the next regularly scheduled
43-18    election or appointment of directors.
43-19          (h) [(i)]  If the proposition is defeated, or if the board of
43-20    the existing district votes not to accept the addition of the area
43-21    to the district, then the commission shall, except as provided
43-22    under Subsection (i), create under Section 36.0151 one or more
43-23    districts covering the priority groundwater management area not
43-24    later than the first anniversary of the date on which the
43-25    proposition is defeated or the board votes not to accept the area.
43-26          (i)  For an area that is not feasible for the creation of one
 44-1    or more districts as determined in the commission's findings under
 44-2    Section 35.008, the commission shall include in its report under
 44-3    Section 35.018 recommendations for the future management of the
 44-4    priority groundwater management area.
 44-5          (j)  Another [another] election to add the priority
 44-6    groundwater management area to an existing district may not be
 44-7    called before the first anniversary of the date on which the
 44-8    election on the proposition was held.
 44-9          SECTION 2.28.  Subsection (c), Section 35.018, Water Code, is
44-10    amended to read as follows:
44-11          (c)  If the commission determines that a district created
44-12    under Chapter 36 is not appropriate for, or capable of, the
44-13    protection of the groundwater resources for a particular management
44-14    area or priority groundwater management area, the commission may
44-15    recommend in its report to the legislature the creation of a
44-16    special district or amendment of an existing district.  [(1)  If
44-17    voters fail to create a groundwater district in a priority
44-18    groundwater management area or if voters fail to add the priority
44-19    groundwater management area to an existing groundwater district,
44-20    the report shall include recommendations for the future management
44-21    of the priority groundwater management area.  The recommendations
44-22    may include but are not limited to the following:]
44-23                      [(A)  creation of a groundwater district by the
44-24    legislature;]
44-25                      [(B)  annexation of a priority groundwater
44-26    management area into an existing district by the legislature; or]
 45-1                      [(C)  management of the priority groundwater
 45-2    management area by the nearest regional office of the commission.
 45-3    The commission may be authorized to:]
 45-4                            [(i)  adopt spacing and annual per acre
 45-5    pumping restrictions;]
 45-6                            [(ii)  issue well permits in accordance
 45-7    with Sections 36.113 and 36.1131;]
 45-8                            [(iii)  prevent waste and protect the
 45-9    quality of groundwater in accordance with Sections
45-10    36.001(8)(A)-(G);]
45-11                            [(iv)  levy administrative penalties for
45-12    violations; and]
45-13                            [(v)  collect fees in accordance with
45-14    Sections 36.206(a) and (b).]
45-15                [(2)  If the commission is required by the legislature
45-16    to manage the priority groundwater management area, a new election
45-17    may not be called for three years from the date of the last
45-18    election.]
45-19          SECTION 2.29.  Section 36.001, Water Code, is amended by
45-20    amending Subdivision (13) and adding Subdivisions (18) through (22)
45-21    to read as follows:
45-22                (13)  "Management area" means an area designated and
45-23    delineated by the Texas Water Development Board [commission] under
45-24    Chapter 35 as an area suitable for management of groundwater
45-25    resources.
45-26                (18)  "River basin" means a river or coastal basin
 46-1    designated as a river basin by the board under Section 16.051.  The
 46-2    term does not include waters of the bays or arms originating in the
 46-3    Gulf of Mexico.
 46-4                (19)  "Agriculture" means any of the following
 46-5    activities:
 46-6                      (A)  cultivating the soil to produce crops for
 46-7    human food, animal feed, or planting seed or for the production of
 46-8    fibers;
 46-9                      (B)  the practice of floriculture, viticulture,
46-10    silviculture, and horticulture, including the cultivation of plants
46-11    in containers or nonsoil media, by a nursery grower;
46-12                      (C)  raising, feeding, or keeping animals for
46-13    breeding purposes or for the production of food or fiber, leather,
46-14    pelts, or other tangible products having a commercial value;
46-15                      (D)  planting cover crops, including cover crops
46-16    cultivated for transplantation, or leaving land idle for the
46-17    purpose of participating in any governmental program or normal crop
46-18    or livestock rotation procedure;
46-19                      (E)  wildlife management; and
46-20                      (F)  raising or keeping equine animals.
46-21                (20)  "Agricultural use" means any use or activity
46-22    involving agriculture, including irrigation.
46-23                (21)  "Conjunctive use" means the combined use of
46-24    groundwater and surface water sources that optimizes the beneficial
46-25    characteristics of each source.
46-26                (22)  "Nursery grower" means a person who grows more
 47-1    than 50 percent of the products that the person either sells or
 47-2    leases, regardless of the variety sold, leased, or grown.  For the
 47-3    purpose of this definition, "grow" means the actual cultivation or
 47-4    propagation of the product beyond the mere holding or maintaining
 47-5    of the item prior to sale or lease and typically includes
 47-6    activities associated with the production or multiplying of stock
 47-7    such as the development of new plants from cuttings, grafts, plugs,
 47-8    or seedlings.
 47-9          SECTION 2.30.  Section 36.0015, Water Code, is amended to
47-10    read as follows:
47-11          Sec. 36.0015.  PURPOSE.  In order to provide for the
47-12    conservation, preservation, protection, recharging, and prevention
47-13    of waste of groundwater, and of groundwater reservoirs or their
47-14    subdivisions, and to control subsidence caused by withdrawal of
47-15    water from those groundwater reservoirs or their subdivisions,
47-16    consistent with the objectives of Section 59, Article XVI, Texas
47-17    Constitution, groundwater conservation districts may be created as
47-18    provided by this chapter.  Groundwater conservation districts
47-19    created as provided by this chapter are the state's preferred
47-20    method of groundwater management through rules developed, adopted,
47-21    and promulgated by a district in accordance with the provisions of
47-22    this chapter.
47-23          SECTION 2.31.  Section 36.002, Water Code, is amended to read
47-24    as follows:
47-25          Sec. 36.002.  OWNERSHIP OF GROUNDWATER.  The ownership and
47-26    rights of the owners of the land and their lessees and assigns in
 48-1    groundwater are hereby recognized, and nothing in this code shall
 48-2    be construed as depriving or divesting the owners or their lessees
 48-3    and assigns of the ownership or rights, except as those rights may
 48-4    be limited or altered by [subject to] rules promulgated by a
 48-5    district.
 48-6          SECTION 2.32.  Subsection (b), Section 36.011, Water Code, is
 48-7    amended to read as follows:
 48-8          (b)  The commission has exclusive jurisdiction over the
 48-9    [delineation of management areas and the] creation of districts.
48-10          SECTION 2.33.  Section 36.012, Water Code, is amended by
48-11    adding Subsection (f) to read as follows:
48-12          (f)  This section does not apply to districts created under
48-13    Section 36.0151.
48-14          SECTION 2.34.  Section 36.013, Water Code, is amended to read
48-15    as follows:
48-16          Sec. 36.013.  PETITION TO CREATE DISTRICT.  (a)  A petition
48-17    requesting creation of a district must be filed with the commission
48-18    [executive director] for review and certification under Section
48-19    36.015 [submission to the commission].
48-20          (b)  The petition filed pursuant to this section must be
48-21    signed by:
48-22                (1)  a majority of the landowners within the proposed
48-23    district, as indicated by the county tax rolls; or
48-24                (2)  if there are more than 50 landowners in the
48-25    proposed district, at least 50 of those landowners.
48-26          (c)  The petition must include:
 49-1                (1)  the name of the proposed district;
 49-2                (2)  the area and boundaries of the proposed district,
 49-3    including a map generally outlining the boundaries of the proposed
 49-4    district;
 49-5                (3)  the purpose or purposes of the district;
 49-6                (4)  a statement of the general nature of any projects
 49-7    proposed to be undertaken by the district, the necessity and
 49-8    feasibility of the work, and the estimated costs of those projects
 49-9    according to the persons filing the projects if the projects are to
49-10    be funded by the sale of bonds or notes; [and]
49-11                (5)  the names of at least five individuals qualified
49-12    to serve as temporary directors; and
49-13                (6)  financial information, including the projected
49-14    maintenance tax or production fee rate and a proposed budget of
49-15    revenues and expenses for the district [any additional terms or
49-16    conditions that restrict the powers of the district from those
49-17    provided in this chapter].
49-18          [(d)  If a part of the proposed district is not included
49-19    within either a management area or a priority groundwater
49-20    management area, the petition to create a district may also contain
49-21    a request to create a management area.  A request to create a
49-22    management area must comply with the requirements for a petition in
49-23    Section 35.005, and may be acted on by the commission separately
49-24    from the petition to create the district.]
49-25          SECTION 2.35.  Section 36.014, Water Code, is amended to read
49-26    as follows:
 50-1          Sec. 36.014.  NOTICE AND PUBLIC MEETING [HEARING] ON DISTRICT
 50-2    CREATION.  (a)  If a petition is filed under Section 36.013, the
 50-3    commission shall give notice of the [an] application [as required
 50-4    by Section 49.011(a)] and shall [may] conduct a public meeting in a
 50-5    central location within the area of the proposed district [hearing]
 50-6    on the application not later than the 60th day after the date the
 50-7    commission issues notice [if the commission determines that a
 50-8    hearing is necessary under Section 49.011].  The notice must
 50-9    contain the date, time, and location of the public meeting and must
50-10    be published in one or more newspapers of general circulation in
50-11    the area of the proposed district.
50-12          (b)  If the petition contains a request to create a
50-13    management area in all or part of the proposed district, the notice
50-14    must also be given in accordance with the requirements in Section
50-15    35.006 for the designation of management areas.
50-16          SECTION 2.36.  Section 36.015, Water Code, is amended to read
50-17    as follows: 
50-18          Sec. 36.015.  COMMISSION CERTIFICATION AND ORDER.  (a)  Not
50-19    later than the 90th day after the date the commission holds a
50-20    public meeting on a petition under Section 36.014, the commission
50-21    shall certify the petition if the petition is administratively
50-22    complete.  A petition is administratively complete if it complies
50-23    with the requirements of Sections 36.013(b) and (c).
50-24          (b)  The commission may not certify a petition if the
50-25    commission finds that the proposed district cannot be adequately
50-26    funded to carry out its purposes based on the financial information
 51-1    provided in the petition under Section 36.013(c)(6) or that the
 51-2    boundaries of the proposed district do not provide for the
 51-3    effective management of the groundwater resources.  The commission
 51-4    shall give preference to boundary lines that are coterminous with
 51-5    those of a groundwater management area but may also consider
 51-6    boundaries along existing political subdivision boundaries if such
 51-7    boundaries would facilitate district creation and confirmation.
 51-8          (c)  If a petition proposes the creation of a district in an
 51-9    area, in whole or in part, that has not been designated as a
51-10    management area, the commission shall provide notice to the Texas
51-11    Water Development Board.  On the receipt of notice from the
51-12    commission, the Texas Water Development Board shall initiate the
51-13    process of designating a management area for the area of the
51-14    proposed district not included in a management area.  The
51-15    commission may not certify the petition until the Texas Water
51-16    Development Board has adopted a rule whereby the boundaries of the
51-17    proposed district are coterminous with or inside the boundaries of
51-18    a management area.
51-19          (d)  If the commission does not certify the petition, the
51-20    commission shall provide to the petitioners, in writing, the
51-21    reasons for not certifying the petition.  The petitioners may
51-22    resubmit the petition, without paying an additional fee, if the
51-23    petition is resubmitted within 90 days after the date the
51-24    commission sends the notice required by this subsection.
51-25          (e)  If the commission certifies the petition as
51-26    administratively complete, the commission shall issue an order,
 52-1    notify the petitioners, and appoint temporary directors as provided
 52-2    by Section 36.016.
 52-3          (f)  Refusal by the commission to certify a petition to
 52-4    create a district does not invalidate or affect the designation of
 52-5    any management area.  [FINDINGS.  (a)  If the commission finds that
 52-6    a district is feasible and practicable, that it would be a benefit
 52-7    to the land in the district, and that it would be a public benefit
 52-8    or utility, the commission shall issue an order containing these
 52-9    findings granting the petition.]
52-10          [(b)  If the commission finds that a district is not feasible
52-11    and practicable, that it would not be a benefit to the land in the
52-12    district, that it would not be a public benefit or utility, or that
52-13    it is not needed, the commission by order shall deny the petition.]
52-14          [(c)  The commission may adjust the boundaries of the
52-15    proposed district to exclude any land that would not be benefited
52-16    by inclusion in the district and is not necessary to the district
52-17    for proper regulation of the groundwater reservoir.]
52-18          [(d)  If the commission grants the petition to create the
52-19    district, it shall direct in its order creating the district that
52-20    an election be called by the temporary directors to confirm the
52-21    creation of the district and to elect permanent directors.]
52-22          [(e)  The refusal to grant a petition to create a district
52-23    does not invalidate or affect the designation of any management
52-24    area requested in the same petition.]
52-25          [(f)  The commission shall act on the petition within a
52-26    reasonable amount of time.]
 53-1          SECTION 2.37.  Subsection (a), Section 36.0151, Water Code,
 53-2    is amended to read as follows:
 53-3          (a)  If the commission is required to create [proposes that]
 53-4    a district [be created] under Section 35.012(b) [35.012(d)], it
 53-5    shall, without an evidentiary hearing, issue an order creating the
 53-6    district and shall provide in its order [creating the district
 53-7    provide] that temporary directors be appointed under Section 36.016
 53-8    and that an election be called by the temporary directors to
 53-9    authorize the district to assess taxes [confirm the creation of the
53-10    district] and to elect permanent directors.
53-11          SECTION 2.38.  Subsection (a), Section 36.016, Water Code, is
53-12    amended to read as follows:
53-13          (a)  If the commission certifies [grants] a petition to
53-14    create a district under Section 36.015, the commission shall
53-15    appoint the temporary directors named in the petition.  If [or
53-16    after] the commission dissolves a district's board under Section
53-17    36.303, it shall appoint five temporary directors.
53-18          SECTION 2.39.  Section 36.017, Water Code, is amended by
53-19    amending the section heading and Subsections (a), (d), and (g) and
53-20    adding Subsection (i) to read as follows:
53-21          Sec. 36.017.  CONFIRMATION AND DIRECTORS' ELECTION FOR
53-22    DISTRICT IN A MANAGEMENT AREA.  (a)  For a district created under
53-23    Section 36.015, not [Not] later than the 120th [60th] day after the
53-24    date all temporary directors have been appointed and have
53-25    qualified, the temporary directors shall meet and order an election
53-26    to be held within the boundaries of the proposed district to
 54-1    approve the creation of the district and to elect permanent
 54-2    directors.
 54-3          (d)  The ballot for the election must be printed to provide
 54-4    for voting for or against the proposition:  "The creation of the
 54-5    _________________ Groundwater Conservation District."  If the
 54-6    district levies a maintenance tax for payment of its expenses, then
 54-7    an additional [the] proposition shall be included with [include]
 54-8    the following language:  "The [and the] levy of a maintenance tax
 54-9    at a rate not to exceed ______ cents for each $100 of assessed
54-10    valuation."  The same ballot or another ballot must provide for the
54-11    election of permanent directors, in accordance with Section 36.059.
54-12          (g)  If a majority of the votes cast at the election are
54-13    against the creation of the district, the temporary board shall
54-14    declare the district defeated and shall enter the result in its
54-15    minutes.  The temporary board shall continue operations in
54-16    accordance with Subsection (h).
54-17          (i)  If a majority of the votes cast at the election are
54-18    against the levy of a maintenance tax, the district shall set
54-19    production fees to pay for the district's regulation of groundwater
54-20    in the district, including fees based on the amount of water to be
54-21    withdrawn from a well.
54-22          SECTION 2.40.  Subchapter B, Chapter 36, Water Code, is
54-23    amended by adding Section 36.0171 to read as follows:
54-24          Sec. 36.0171.  TAX AUTHORITY AND DIRECTORS' ELECTION FOR
54-25    DISTRICT IN A PRIORITY GROUNDWATER MANAGEMENT AREA.  (a)  For a
54-26    district created under Section 36.0151, not later than the 120th
 55-1    day after the date all temporary directors have been appointed and
 55-2    have qualified, the temporary directors shall meet and order an
 55-3    election to be held within the boundaries of the proposed district
 55-4    to authorize the district to assess taxes and to elect permanent
 55-5    directors.
 55-6          (b)  In the order calling the election, the temporary
 55-7    directors shall designate election precincts and polling places for
 55-8    the election.  In designating the polling places, the temporary
 55-9    directors shall consider the needs of all voters for conveniently
55-10    located polling places.
55-11          (c)  The temporary directors shall publish notice of the
55-12    election at least once in at least one newspaper with general
55-13    circulation within the boundaries of the proposed district.  The
55-14    notice must be published before the 30th day preceding the date of
55-15    the election.
55-16          (d)  The ballot for the election must be printed to provide
55-17    for voting for or against the proposition:  "The levy of a
55-18    maintenance tax by the ___________________ Groundwater Conservation
55-19    District at a rate not to exceed ______ cents for each $100 of
55-20    assessed valuation."  The same ballot or another ballot must
55-21    provide for the election of permanent directors, in accordance with
55-22    Section 36.059.
55-23          (e)  Immediately after the election, the presiding judge of
55-24    each polling place shall deliver the returns of the election to the
55-25    temporary board, and the board shall canvass the returns, declare
55-26    the result, and turn over the operations of the district to the
 56-1    elected permanent directors.  The board shall file a copy of the
 56-2    election result with the commission.
 56-3          (f)  If a majority of the votes cast at the election favor
 56-4    the levy of a maintenance tax, the temporary board shall declare
 56-5    the levy approved and shall enter the result in its minutes.
 56-6          (g)  If a majority of the votes cast at the election are
 56-7    against the levy of a maintenance tax, the temporary board shall
 56-8    declare the levy defeated and shall enter the result in its
 56-9    minutes.
56-10          (h)  If the majority of the votes cast at the election are
56-11    against the levy of a maintenance tax, the district shall set
56-12    permit fees to pay for the district's regulation of groundwater in
56-13    the district, including fees based on the amount of water to be
56-14    withdrawn from a well.
56-15          SECTION 2.41.  Section 36.019, Water Code, is amended to read
56-16    as follows:
56-17          Sec. 36.019.  CONFIRMATION ELECTION IN DISTRICT INCLUDING
56-18    LAND IN MORE THAN ONE COUNTY.  (a)  A district, the major portion
56-19    of which is located in one county, may not be organized to include
56-20    land in another county unless the election held in the other county
56-21    to confirm and ratify the creation of the district is approved by a
56-22    majority of the voters of the other county voting in an election
56-23    called for that purpose.
56-24          (b)  This section does not apply to districts created under
56-25    Section 36.0151.
56-26          SECTION 2.42.  Subsection (a), Section 36.060, Water Code, is
 57-1    amended to read as follows:
 57-2          (a)  A director is entitled to receive fees of office of not
 57-3    more than $150 [$100] a day for each day the director actually
 57-4    spends performing the duties of a director.  The fees of office may
 57-5    not exceed $9,000 [$6,000] a year.
 57-6          SECTION 2.43.  Subsection (g), Section 36.066, Water Code, is
 57-7    amended to read as follows:
 57-8          (g)  If the district prevails in any suit other than a suit
 57-9    in which it voluntarily intervenes, the district may seek and the
57-10    court shall grant [it may], in the same action, recovery [recover
57-11    reasonable fees] for attorney's fees [attorneys], costs for expert
57-12    witnesses, and other costs incurred by the district before the
57-13    court.  The amount of the attorney's fees shall be fixed by the
57-14    court.
57-15          SECTION 2.44.  Subsection (a), Section 36.101, Water Code, is
57-16    amended to read as follows:
57-17          (a)  A district may make and enforce rules, including rules
57-18    limiting groundwater production based on tract size or the spacing
57-19    of wells, to provide for conserving, preserving, protecting, and
57-20    recharging of the groundwater or of a groundwater reservoir or its
57-21    subdivisions in order to control subsidence, prevent degradation of
57-22    water quality, or prevent waste of groundwater and to carry out the
57-23    powers and duties provided by this chapter.  During the rulemaking
57-24    process the board shall consider all groundwater uses and needs and
57-25    shall develop rules which are fair and impartial.
57-26          SECTION 2.45.  Subsection (b), Section 36.102, Water Code, is
 58-1    amended to read as follows:
 58-2          (b)  The board by rule may set reasonable civil penalties for
 58-3    breach of any rule of the district [that shall] not to exceed
 58-4    $10,000 per day per violation, and each day of a continuing
 58-5    violation constitutes a separate violation [the jurisdiction of a
 58-6    justice court as provided by Section 27.031, Government Code].
 58-7          SECTION 2.46.  Section 36.1071, Water Code, is amended by
 58-8    amending Subsections (a) and (b) and adding Subsection (h) to read
 58-9    as follows:
58-10          (a)  Following notice and hearing, the district shall, in
58-11    coordination with surface water management entities on a regional
58-12    basis, develop a comprehensive management plan which addresses the
58-13    following management goals, as applicable:
58-14                (1)  providing the most efficient use of groundwater;
58-15                (2)  controlling and preventing waste of groundwater;
58-16                (3)  controlling and preventing subsidence;
58-17                (4)  addressing conjunctive surface water management
58-18    issues; [and]
58-19                (5)  addressing natural resource issues;
58-20                (6)  addressing drought conditions; and
58-21                (7)  addressing conservation.
58-22          (b)  After January 5, 2002, a [A] district management plan,
58-23    or any amendments to a district management plan, shall be developed
58-24    by the district using the district's best available data and
58-25    forwarded to the regional water planning group for consideration in
58-26    their planning process [adopted after the Texas Water Development
 59-1    Board approval of a regional water plan for the region in which the
 59-2    district is located shall be consistent with the regional water
 59-3    plan].
 59-4          (h)  In developing its management plan, the district shall
 59-5    use the groundwater availability modeling information provided by
 59-6    the executive administrator in conjunction with any available
 59-7    site-specific information provided by the district and acceptable
 59-8    to the executive administrator.
 59-9          SECTION 2.47.  Section 36.1072, Water Code, is amended by
59-10    adding Subsection (g) to read as follows:
59-11          (g)  In this subsection, "board" means the Texas Water
59-12    Development Board.  A person with a legally defined interest in
59-13    groundwater in a district or the regional water planning group may
59-14    file a petition with the board stating that a conflict requiring
59-15    resolution may exist between the district's certified groundwater
59-16    conservation district management plan developed under Section
59-17    36.1071 and the state water plan.  If a conflict exists, the board
59-18    shall facilitate coordination between the involved person or
59-19    regional water planning group and the district to resolve the
59-20    conflict.  If conflict remains, the board shall resolve the
59-21    conflict.  The board action under this provision may be
59-22    consolidated, at the option of the board, with related action under
59-23    Section 16.053(p).  If the board determines that resolution of the
59-24    conflict requires a revision of the certified groundwater
59-25    conservation district management plan, the board shall suspend the
59-26    certification of the plan and provide information to the district.
 60-1    The district shall prepare any revisions to the plan specified by
 60-2    the board and shall hold, after notice, at least one public hearing
 60-3    at some central location within the district.  The district shall
 60-4    consider all public and board comments, prepare, revise, and adopt
 60-5    its plan, and submit the revised plan to the board for
 60-6    certification.  On the request of the district or the regional
 60-7    water planning group, the board shall include discussion of the
 60-8    conflict and its resolution in the state water plan that the board
 60-9    provides to the governor, the lieutenant governor, and the speaker
60-10    of the house of representatives under Section 16.051(e).
60-11          SECTION 2.48.  Section 36.108, Water Code, is amended to read
60-12    as follows:
60-13          Sec. 36.108.  JOINT PLANNING IN MANAGEMENT AREA.  (a)  If two
60-14    or more districts are located within the boundaries of the same
60-15    management area, each district shall prepare a comprehensive
60-16    management plan as required by Section 36.1071 covering that
60-17    district's respective territory.  On completion and certification
60-18    of the plan as required by Section 36.1072, each district shall
60-19    forward a copy of the new or revised management plan to the other
60-20    districts in the management area.  The boards of the districts
60-21    shall consider the plans individually and shall compare them to
60-22    other management plans then in force in the management area.
60-23          (b)  The board of directors of each district in the
60-24    management area may, by resolution, call for [a] joint planning
60-25    [meeting] with [the boards of directors of] the other districts in
60-26    the management area to review the management plans and
 61-1    accomplishments for the management area.  [The boards shall meet to
 61-2    consider the plans individually and shall compare them to other
 61-3    management plans then in force in the management area.]  In
 61-4    reviewing the management plans, the boards shall consider:
 61-5                (1)  the goals of each management plan and its impact
 61-6    on planning throughout the management area;
 61-7                (2)  the effectiveness of the measures established by
 61-8    each management plan for conserving and protecting groundwater and
 61-9    preventing waste, and the effectiveness of these measures in the
61-10    management area generally; and
61-11                (3)  any other matters that the boards consider
61-12    relevant to the protection and conservation of groundwater and the
61-13    prevention of waste in the management area.
61-14          (c)  If a [A] joint meeting of the boards of directors is
61-15    called, the meeting must be held in accordance with [the Open
61-16    Meetings Act,] Chapter 551, Government Code.  Notice of the meeting
61-17    shall be given in accordance with the requirements for notice of
61-18    district board of directors meetings under that Act.  In addition,
61-19    notice of the meeting shall be published not later than the 30th
61-20    day before the date of the scheduled meeting in a newspaper with
61-21    general circulation in each county in the management area.
61-22          (d)  A district in the management area may file with good
61-23    cause a petition with the commission requesting an inquiry if the
61-24    petitioner district adopted a resolution calling for joint planning
61-25    and the other district or districts refused to join in the planning
61-26    process or the process failed to result in adequate planning, and
 62-1    the petition provides evidence [believes] that:
 62-2                (1)  another district in the management area has failed
 62-3    to adopt rules;
 62-4                (2)  the groundwater in the management area is not
 62-5    adequately protected by the rules adopted by another district; or
 62-6                (3)  the groundwater in the management area is not
 62-7    adequately protected due to the failure of another district to
 62-8    enforce substantial compliance with its rules.
 62-9          (e)  Not later than the 90th day after the date the petition
62-10    is filed, the commission shall review the petition and either:
62-11                (1)  dismiss it if it finds that the evidence is not
62-12    adequate to show that any of the conditions alleged in the petition
62-13    exist; or
62-14                (2)  select a review panel as provided in Subsection
62-15    (f).
62-16          (f)  If the petition is not dismissed under Subsection (e),
62-17    the [The] commission shall [may] appoint a review panel consisting
62-18    of a chairman and four other members.  A director or general
62-19    manager of a district located outside the management area that is
62-20    the subject of the petition may be appointed to the review panel.
62-21    The commission may not appoint more than two members of the review
62-22    panel from any one district.  The commission also shall appoint a
62-23    disinterested person to serve as a nonvoting recording secretary
62-24    for the review panel.  The recording secretary may be an employee
62-25    of the commission.  The recording secretary shall record and
62-26    document the proceedings of the panel.
 63-1          (g)  Not later than the 120th day after appointment, the
 63-2    review panel shall review the petition and any evidence relevant to
 63-3    the petition and, in a public meeting, consider and adopt [prepare]
 63-4    a report to be submitted to the commission.  The commission may
 63-5    direct the review panel to conduct public hearings at a location in
 63-6    the management area to take evidence on the petition.  The review
 63-7    panel may attempt to negotiate a settlement or resolve the dispute
 63-8    by any lawful means.
 63-9          (h)  In its report, the review panel shall include:
63-10                (1)  a summary of all evidence taken in any hearing on
63-11    the petition;
63-12                (2)  a list of findings and recommended actions
63-13    appropriate for the commission to take and the reasons it finds
63-14    those actions appropriate; and
63-15                (3)  any other information the panel considers
63-16    appropriate.
63-17          (i)  The review panel shall submit its report to the
63-18    commission.
63-19          (j)  Districts located within the same management areas or in
63-20    adjacent management areas may contract to jointly conduct studies
63-21    or research, or to construct projects, under terms and conditions
63-22    that the districts consider beneficial.  These joint efforts may
63-23    include studies of groundwater availability and quality, aquifer
63-24    modeling, and the interaction of groundwater and surface water;
63-25    educational programs; the purchase and sharing of equipment; and
63-26    the implementation of projects to make groundwater available,
 64-1    including aquifer recharge, brush control, weather modification,
 64-2    desalination, regionalization, and treatment or conveyance
 64-3    facilities.  The districts may contract under their existing
 64-4    authorizations including those of Chapter 791, Government Code, if
 64-5    their contracting authority is not limited by Sections
 64-6    791.011(c)(2) and (d)(3) and Section 791.014, Government Code.
 64-7          SECTION 2.49.  Section 36.113, Water Code, is amended by
 64-8    amending Subsection (d), adding a new Subsection (e), and
 64-9    relettering existing Subsections (e) and (f) as Subsections (f) and
64-10    (g) to read as follows:
64-11          (d)  Before granting or denying a permit, the district shall
64-12    consider whether:
64-13                (1)  the application conforms to the requirements
64-14    prescribed by this chapter and is accompanied by the prescribed
64-15    fees;
64-16                (2)  the proposed use of water unreasonably affects
64-17    existing groundwater and surface water resources or existing permit
64-18    holders;
64-19                (3)  the proposed use of water is dedicated to any
64-20    beneficial use;
64-21                (4)  the proposed use of water is consistent with the
64-22    district's certified water management plan;
64-23                (5)  the applicant has agreed to avoid waste and
64-24    achieve water conservation; and
64-25                (6)  the applicant has agreed that reasonable diligence
64-26    will be used to protect groundwater quality and that the applicant
 65-1    will follow well plugging guidelines at the time of well closure.
 65-2          (e)  The district may impose more restrictive permit
 65-3    conditions on new permit applications and increased use by historic
 65-4    users if the limitations:
 65-5                (1)  apply to all subsequent new permit applications
 65-6    and increased use by historic users, regardless of type or location
 65-7    of use;
 65-8                (2)  bear a reasonable relationship to the existing
 65-9    district management plan; and
65-10                (3)  are reasonably necessary to protect existing use.
65-11          (f)  Permits may be issued subject to the rules promulgated
65-12    by the district and subject to terms and provisions with reference
65-13    to the drilling, equipping, completion, or alteration of wells or
65-14    pumps that may be necessary to prevent waste and achieve water
65-15    conservation, minimize as far as practicable the drawdown of the
65-16    water   table   or   the   reduction   of   artesian   pressure,
65-17    lessen interference between wells, or control and prevent
65-18    subsidence.
65-19          (g) [(f)]  A district may require that changes in the
65-20    withdrawal and use of groundwater under a permit not be made
65-21    without the prior approval of a permit amendment issued by the
65-22    district.
65-23          SECTION 2.50.  Section 36.116, Water Code, is amended to read
65-24    as follows:
65-25          Sec. 36.116.  REGULATION OF SPACING AND PRODUCTION.  (a)  In
65-26    order to minimize as far as practicable the drawdown of the water
 66-1    table or the reduction of artesian pressure, to control subsidence,
 66-2    to prevent interference between wells, to prevent degradation of
 66-3    water quality, or to prevent waste, a district by rule may
 66-4    regulate:
 66-5                (1)  [provide for] the spacing of water wells by:
 66-6                      (A)  requiring all water wells to be spaced a
 66-7    certain distance from property lines or adjoining wells;
 66-8                      (B)  requiring wells with a certain production
 66-9    capacity, pump size, or other characteristic related to the
66-10    construction or operation of and production from a well to be
66-11    spaced a certain distance from property lines or adjoining wells;
66-12    or
66-13                      (C)  imposing spacing requirements adopted by the
66-14    board; and
66-15                (2)  the production of groundwater by:
66-16                      (A)  setting production limits on wells;
66-17                      (B)  limiting the amount of water produced based
66-18    on acreage or tract size;
66-19                      (C)  limiting the amount of water that may be
66-20    produced from a defined number of acres assigned to an authorized
66-21    well site;
66-22                      (D)  limiting the maximum amount of water that
66-23    may be produced on the basis of acre-feet per acre or gallons per
66-24    minute per well site per acre; or
66-25                      (E)  any combination of the above [and may
66-26    regulate the production of wells].
 67-1          (b)  In promulgating any rules limiting groundwater
 67-2    production, the district may preserve historic use before the
 67-3    effective date of the rules to the maximum extent practicable
 67-4    consistent with the district's comprehensive management plan under
 67-5    Section 36.1071.
 67-6          (c)  In regulating the production of groundwater based on
 67-7    tract size or acreage, a district may consider the service needs of
 67-8    a retail water utility.  For purposes of this subsection, "retail
 67-9    water utility" shall have the meaning provided at Section 13.002.
67-10          SECTION 2.51.  Section 36.117, Water Code, is amended to read
67-11    as follows:
67-12          Sec. 36.117.  EXEMPTIONS; EXCEPTION; LIMITATIONS.  (a)  A
67-13    district may exempt wells from the requirement of obtaining
67-14    [requirements to obtain] a drilling permit, an operating permit, or
67-15    any other permit required by this chapter or the district's rules.
67-16          (b)  A district may not require any [a] permit issued by the
67-17    district for:
67-18                (1)  [drilling or producing from] a well used solely
67-19    for domestic use or for providing water for livestock or poultry on
67-20    a tract of land larger than 10 acres that is either drilled,
67-21    completed, or equipped so that it is incapable of producing more
67-22    than 25,000 gallons of groundwater a day;
67-23                (2)  the drilling of a water well used solely to supply
67-24    water for a rig that is actively engaged in drilling or exploration
67-25    operations for an oil or gas well permitted by the Railroad
67-26    Commission of Texas provided that the person holding the permit is
 68-1    responsible for drilling and operating the water well and the well
 68-2    is located on the same lease or field associated with the drilling
 68-3    rig; or [alteration of the size of a well or to restrict the
 68-4    production of a well if the water produced or to be produced from
 68-5    the well is used or to be used to supply the domestic needs of 10
 68-6    or fewer households and a person who is a member of each household
 68-7    is either the owner of the well, a person related to the owner or a
 68-8    member of the owner's household within the second degree by
 68-9    consanguinity, or an employee of the owner;]
68-10                (3)  the drilling of a water well authorized under a
68-11    permit issued by the Railroad Commission of Texas under Chapter
68-12    134, Natural Resources Code, or for production from such a well to
68-13    the extent the withdrawals are required for mining activities
68-14    regardless of any subsequent use of the water.  [or alteration of
68-15    the size of a well or to restrict the production from the well if
68-16    the water produced or to be produced from the well is used or to be
68-17    used to provide water for feeding livestock and poultry connected
68-18    with farming, ranching, or dairy enterprises; or]
68-19                [(4)  water wells to supply water for hydrocarbon
68-20    production activities, regardless of whether those wells are
68-21    producing, that are associated with any well permitted by the
68-22    Railroad Commission of Texas drilled before September 1, 1985.]
68-23          [(b)  The board shall adopt rules determining the
68-24    applicability of Subsection (a)(3) to facilities used primarily for
68-25    feeding livestock.]
68-26          (c)  [The district shall not deny the owner of a tract of
 69-1    land, or his lessee, who has no well equipped to produce more than
 69-2    25,000 gallons a day on the tract, either a permit to drill a well
 69-3    on his land or the privilege to produce groundwater from his land,
 69-4    subject to the rules of the district.]
 69-5          [(d)]  A district may not restrict the production of any well
 69-6    that is exempt from permitting under Subsection (b)(1) [equipped to
 69-7    produce 25,000 gallons or less a day].
 69-8          (d)  Notwithstanding Subsection (b), a district may require a
 69-9    well to be permitted by the district and to comply with all
69-10    district rules if:
69-11                (1)  the purpose of a well exempted under Subsection
69-12    (b)(2) is no longer solely to supply water for a rig that is
69-13    actively engaged in drilling or exploration operations for an oil
69-14    or gas well permitted by the Railroad Commission of Texas; or
69-15                (2)  the withdrawals from a well exempted under
69-16    Subsection (b)(3) are no longer necessary for mining activities or
69-17    are greater than the amount necessary for mining activities
69-18    specified in the permit issued by the Railroad Commission of Texas
69-19    under Chapter 134, Natural Resources Code.
69-20          (e)  An entity holding a permit issued by the Railroad
69-21    Commission of Texas under Chapter 134, Natural Resources Code, that
69-22    authorizes the drilling of a water well shall report monthly to the
69-23    district:
69-24                (1)  the total amount of water withdrawn during the
69-25    month;
69-26                (2)  the quantity of water necessary for mining
 70-1    activities; and
 70-2                (3)  the quantity of water withdrawn for other
 70-3    purposes.  [Nothing in this chapter applies to wells drilled for
 70-4    oil, gas, sulphur, uranium, or brine, or for core tests, or for
 70-5    injection of gas, saltwater, or other fluid, or for any other
 70-6    purpose, under permits issued by the Railroad Commission of Texas.
 70-7    A district may not require a drilling permit for a well to supply
 70-8    water for drilling any wells permitted by the Railroad Commission
 70-9    of Texas.  Any well that ceases to be used for these purposes and
70-10    is then used as an ordinary water well is subject to the rules of
70-11    the district.  Water wells drilled after September 1, 1997, to
70-12    supply water for hydrocarbon production activities must meet the
70-13    spacing requirements of the district unless no space is available
70-14    within 300 feet of the production well or the central injection
70-15    station.]
70-16          (f)  Notwithstanding Subsection (d), a district may not
70-17    require a well exempted under Subsection (b)(3) to comply with the
70-18    spacing requirements of the district. [Water wells exempted under
70-19    this section shall be equipped and maintained so as to conform to
70-20    the district's rules requiring installation of casing, pipe, and
70-21    fittings to prevent the escape of groundwater from a groundwater
70-22    reservoir to any reservoir not containing groundwater and to
70-23    prevent the pollution or harmful alteration of the character of the
70-24    water in any groundwater reservoir.]
70-25          (g)  A district may not deny an application for a permit to
70-26    drill and produce water for hydrocarbon production activities if
 71-1    the application meets all applicable rules as promulgated by the
 71-2    district.
 71-3          (h)  A [shall require] water well [wells] exempted under
 71-4    Subsection (a) or (b) shall:
 71-5                (1)  [this section to] be registered in accordance with
 71-6    rules promulgated by the district; and
 71-7                (2)  [before drilling.  All exempt water wells shall]
 71-8    be equipped and maintained so as to conform to the district's rules
 71-9    requiring installation of casing, pipe, and fittings to prevent the
71-10    escape of groundwater from a groundwater reservoir to any reservoir
71-11    not containing groundwater and to prevent the pollution or harmful
71-12    alteration of the character of the water in any groundwater
71-13    reservoir.
71-14          (i)  The driller of a well exempted under Subsection (a) or
71-15    (b) shall file the drilling log with the district.
71-16          (j) [(h)]  A well to supply water for a subdivision of land
71-17    for which a plat approval is required by Chapter 232, Local
71-18    Government Code, [law] is not exempted under Subsection (b) [this
71-19    section].
71-20          (k)  Groundwater withdrawn from a well exempt from permitting
71-21    or regulation under this section and subsequently transported
71-22    outside the boundaries of the district is subject to any applicable
71-23    production and export fees under Sections 36.122 and 36.205.
71-24          (l)  This chapter applies to water wells, including water
71-25    wells used to supply water for activities related to the
71-26    exploration or production of hydrocarbons or minerals.  This
 72-1    chapter does not apply to production or injection wells drilled for
 72-2    oil, gas, sulphur, uranium, or brine, or for core tests, or for
 72-3    injection of gas, saltwater, or other fluids, under permits issued
 72-4    by the Railroad Commission of Texas.
 72-5          SECTION 2.52.  Section 36.122, Water Code, is amended to read
 72-6    as follows:
 72-7          Sec. 36.122.  TRANSFER OF GROUNDWATER OUT OF DISTRICT.
 72-8    (a)  If an application for a permit or an amendment to a permit
 72-9    under Section 36.113 proposes the transfer of groundwater outside
72-10    of a district's boundaries, the district may also consider the
72-11    provisions of this section in determining whether to grant or deny
72-12    the permit or permit amendment.
72-13          (b)  A district may promulgate rules requiring a person to
72-14    obtain a permit or an amendment to a permit under Section 36.113
72-15    from the district for the transfer of groundwater out of the
72-16    district to:
72-17                (1)  increase, on or after March 2, 1997, the amount of
72-18    groundwater to be transferred under a continuing arrangement in
72-19    effect before that date; or
72-20                (2)  transfer groundwater out of the district on or
72-21    after March 2, 1997, under a new arrangement.
72-22          (c)  Except as provided in Section 36.113(e), the district
72-23    may not impose more restrictive permit conditions on transporters
72-24    than the district imposes on existing in-district users.
72-25          (d) [(b)]  The district may impose a reasonable fee for
72-26    processing an application [for a permit] under this section.  The
 73-1    fee may not exceed fees that the district imposes for processing
 73-2    other applications under Section 36.113.  An application filed to
 73-3    comply with this section shall be considered and processed under
 73-4    the same procedures as other applications for permits under Section
 73-5    36.113 and shall be combined with applications filed to obtain a
 73-6    permit for in-district water use under Section 36.113 from the same
 73-7    applicant.
 73-8          (e)  The district may impose a reasonable fee or surcharge
 73-9    for an export fee using one of the following methods:
73-10                (1)  a fee negotiated between the district and the
73-11    transporter;
73-12                (2)  a rate not to exceed the equivalent of the
73-13    district's tax rate per hundred dollars of valuation for each
73-14    thousand gallons of water transferred out of the district or 2.5
73-15    cents per thousand gallons of water, if the district assesses a tax
73-16    rate of less than 2.5 cents per hundred dollars of valuation; or
73-17                (3)  for a fee-based district, a 50 percent export
73-18    surcharge, in addition to the district's production fee, for water
73-19    transferred out of the district.
73-20          (f) [(c)  Before issuing a permit under this section, the
73-21    district must give notice of the application and hold a public
73-22    hearing.]
73-23          [(d)]  In reviewing a proposed transfer of groundwater out of
73-24    the district [determining whether to issue a permit under this
73-25    section], the district shall consider:
73-26                (1)  the availability of water in the district and in
 74-1    the proposed receiving area during the period for which the water
 74-2    supply is requested;
 74-3                (2)  [the availability of feasible and practicable
 74-4    alternative supplies to the applicant;]
 74-5                [(3)  the amount and purposes of use in the proposed
 74-6    receiving area for which water is needed;]
 74-7                [(4)]  the projected effect of the proposed transfer on
 74-8    aquifer conditions, depletion, subsidence, or effects on existing
 74-9    permit holders or other groundwater users within the district; and
74-10                (3) [(5)]  the approved regional water plan and
74-11    certified district management plan.
74-12          (g) [(e)]  The district may not deny a permit based on the
74-13    fact that the applicant seeks to transfer groundwater outside of
74-14    the district but may limit a permit issued under this section if
74-15    conditions in Subsection (f) [(d)] warrant the limitation, subject
74-16    to Subsection (c).
74-17          (h) [(f)]  In addition to conditions provided by Section
74-18    36.1131, the permit shall specify:
74-19                (1)  the amount of water that may be transferred out of
74-20    the district; and
74-21                (2)  the period for which the water may be transferred.
74-22          (i)  The period specified by Subsection (h)(2) shall be:
74-23                (1)  at least three years if construction of a
74-24    conveyance system has not been initiated prior to the issuance of
74-25    the permit; or
74-26                (2)  at least 30 years if construction of a conveyance
 75-1    system has been initiated prior to the issuance of the permit.
 75-2          (j)  A term under Subsection (i)(1) shall automatically be
 75-3    extended to the terms agreed to under Subsection (i)(2) if
 75-4    construction of a conveyance system is begun before the expiration
 75-5    of the initial term.
 75-6          (k)  Notwithstanding the period specified in Subsections (i)
 75-7    and (j) during which water may be transferred under a permit, a
 75-8    district may periodically review the amount of water that may be
 75-9    transferred under the permit and may limit the amount if additional
75-10    factors considered in Subsection (f) warrant the limitation,
75-11    subject to Subsection (c).  The review described by this subsection
75-12    may take place not more frequently than the period provided for the
75-13    review or renewal of regular permits issued by the district.  In
75-14    its determination of whether to renew a permit issued under this
75-15    section, the district shall consider relevant and current data for
75-16    the conservation of groundwater resources and shall consider the
75-17    permit in the same manner it would consider any other permit in the
75-18    district.
75-19          (l)  A district is prohibited from using revenues obtained
75-20    under Subsection (e) to prohibit the transfer of groundwater
75-21    outside of a district.  A district is not prohibited from using
75-22    revenues obtained under Subsection (e) for paying expenses related
75-23    to enforcement of this chapter or district rules.
75-24          (m) [(g)]  A district may not prohibit the export of
75-25    groundwater if the purchase was in effect on or before June 1,
75-26    1997.
 76-1          (n) [(h)]  This section applies only to a transfer of water
 76-2    that is permitted [initiated or increased] after September 1, 1997
 76-3    [the effective date of this section].
 76-4          (o) [(i)]  A district shall adopt rules as necessary to
 76-5    implement this section but may not adopt rules expressly
 76-6    prohibiting the export of groundwater.
 76-7          (p)  Subsection (e) does not apply to a district that is
 76-8    collecting an export fee or surcharge on March 1, 2001.
 76-9          (q)  In applying this section, a district must be fair,
76-10    impartial, and nondiscriminatory.
76-11          SECTION 2.53.  Section 36.205, Water Code, is amended to read
76-12    as follows:
76-13          Sec. 36.205.  AUTHORITY TO SET FEES.  (a)  A district may set
76-14    fees for administrative acts of the district, such as filing
76-15    applications.  Fees set by a district may not unreasonably exceed
76-16    the cost to the district of performing the administrative function
76-17    for which the fee is charged.
76-18          (b)  A district shall set and collect fees for all services
76-19    provided outside the boundaries of the district.  The fees may not
76-20    unreasonably exceed the cost to the district of providing the
76-21    services outside the district.
76-22          (c)  A district may assess production fees based on the
76-23    amount of water authorized by permit to be withdrawn from a well or
76-24    the amount actually withdrawn.  A district may assess the fees in
76-25    lieu of, or in conjunction with, any taxes otherwise levied by the
76-26    district.  A district may use revenues generated by the fees for
 77-1    any lawful purpose.  Production fees [Fees based on the amount of
 77-2    water to be withdrawn from a well] shall not exceed:
 77-3                (1)  $1 [one dollar] per acre-foot payable annually
 77-4    [acre foot] for water used for agricultural use [the purpose of
 77-5    irrigating agricultural crops]; or
 77-6                (2)  $10 per acre-foot payable annually [17 cents per
 77-7    thousand gallons] for water used for any other purpose.
 77-8          (d)  The Barton Springs-Edwards Aquifer Conservation
 77-9    District, the Lone Star Groundwater Conservation District, and the
77-10    Guadalupe County Groundwater Conservation District may not charge
77-11    production fees for an annual period greater than $1 per acre-foot
77-12    for water used for agricultural use or 17 cents per thousand
77-13    gallons for water used for any other purpose.  The Barton
77-14    Springs-Edwards Aquifer Conservation District [A district affected
77-15    by Subsection (c)(2) that also] may assess a water use fee against
77-16    a specific municipality in [shall assess] an amount not to exceed
77-17    60 percent of the total funding of the district received from water
77-18    use fees assessed against that municipality and other nonexempt
77-19    users in the district.  This subsection shall take precedence over
77-20    all prior enactments.
77-21          (e)  Subsection (c) does not apply to the following
77-22    districts:
77-23                (1)  the Edwards Aquifer Authority;
77-24                (2)  the Fort Bend Subsidence District; [or]
77-25                (3)  the Harris-Galveston Coastal Subsidence District;
77-26                (4)  the Barton Springs-Edwards Aquifer Conservation
 78-1    District; or
 78-2                (5)  any district that collects a property tax and that
 78-3    was created before September 1, 1999, unless otherwise authorized
 78-4    by special law.
 78-5          (f)  A district, including a district described under
 78-6    Subsection (d), may assess a production fee under Subsection (c)
 78-7    for any water produced under an exemption under Section 36.117 if
 78-8    that water is subsequently sold to another person.
 78-9          (g)  A district may assess a transportation fee under Section
78-10    36.122.
78-11          SECTION 2.54.  Section 36.206, Water Code, is amended by
78-12    amending Subsection (b) and adding Subsection (c) to read as
78-13    follows:
78-14          (b)  The rate of fees set for [crop or livestock production
78-15    or other] agricultural uses shall be no more than 20 percent of the
78-16    rate applied to municipal uses.
78-17          (c)  District fees may not be used to purchase groundwater
78-18    rights unless the purchased rights are acquired for conservation
78-19    purposes and are permanently held in trust not to be produced.
78-20          SECTION 2.55.  Subchapter I, Chapter 36, Water Code, is
78-21    amended by adding Section 36.3011 to read as follows:
78-22          Sec. 36.3011.  FAILURE OF A DISTRICT TO CONDUCT JOINT
78-23    PLANNING.  (a)  If the board of a district within a common
78-24    management area fails to forward a copy of its new or revised
78-25    certified management plan under Section 36.108, the commission
78-26    shall take appropriate action under Section 36.303.
 79-1          (b)  Not later than the 45th day after receiving the review
 79-2    panel's report under Section 36.108, the executive director or the
 79-3    commission shall take action to implement any or all of the panel's
 79-4    recommendations.  If the commission finds that a district in the
 79-5    joint planning area has failed to adopt rules, the groundwater in
 79-6    the management area is not adequately protected by the rules
 79-7    adopted by the district, or the groundwater in the management area
 79-8    is not adequately protected because of the district's failure to
 79-9    enforce substantial compliance with its rules, the commission may
79-10    take any action it considers necessary in accordance with Section
79-11    36.303.
79-12          SECTION 2.56.  Subsection (a), Section 36.303, Water Code, is
79-13    amended to read as follows:
79-14          (a)  If Section 36.108, 36.301, or 36.302(f) applies, the
79-15    commission, after notice and hearing in accordance with Chapter
79-16    2001, Government Code, shall take action the commission considers
79-17    appropriate, including:
79-18                (1)  issuing an order requiring the district to take
79-19    certain actions or to refrain from taking certain actions;
79-20                (2)  dissolving the board in accordance with Sections
79-21    36.305 and 36.307 and calling an election for the purpose of
79-22    electing a new board;
79-23                (3)  requesting the attorney general to bring suit for
79-24    the appointment of a receiver to collect the assets and carry on
79-25    the business of the groundwater conservation district [removing the
79-26    district's taxing authority]; or
 80-1                (4)  dissolving the district in accordance with
 80-2    Sections 36.304, 36.305, and 36.308.
 80-3          SECTION 2.57.  Subchapter I, Chapter 36, Water Code, is
 80-4    amended by adding Section 36.3035 to read as follows:
 80-5          Sec. 36.3035.  APPOINTMENT OF A RECEIVER.  (a)  If the
 80-6    attorney general brings a suit for the appointment of a receiver
 80-7    for a district, a district court shall appoint a receiver if an
 80-8    appointment is necessary to protect the assets of the district.
 80-9          (b)  The receiver shall execute a bond in an amount to be set
80-10    by the court to ensure the proper performance of the receiver's
80-11    duties.
80-12          (c)  After appointment and execution of bond, the receiver
80-13    shall take possession of the assets of the district specified by
80-14    the court.
80-15          (d)  Until discharged by the court, the receiver shall
80-16    perform the duties that the court directs to preserve the assets
80-17    and carry on the business of the district and shall strictly
80-18    observe the final order involved.
80-19          (e)  On a showing of good cause by the district, the court
80-20    may dissolve the receivership and order the assets and control of
80-21    the business returned to the district.
80-22          SECTION 2.58.  Section 51.149, Water Code, is amended to read
80-23    as follows:
80-24          Sec. 51.149.  CONTRACTS.  (a)  No approvals other than those
80-25    specified in Subsection (c) and in Section 1, Chapter 778, Acts of
80-26    the 74th Legislature, Regular Session, 1995, need be obtained in
 81-1    order for a contract between a district and a municipality to be
 81-2    valid, binding, and enforceable against all parties to the
 81-3    contract.  After approval by a majority of the electors voting at
 81-4    an election conducted in the manner of a bond election, a district
 81-5    may make payments under a contract from taxes for debt that does
 81-6    not exceed 30 years.
 81-7          (b) [(d)]  A contract may provide that the district will make
 81-8    payments under the contract from proceeds from the sale of notes or
 81-9    bonds, from taxes, from any other income of the district, or from
81-10    any combination of these.
81-11          (c) [(e)]  A district may make payments under a contract from
81-12    taxes, other than maintenance taxes, after the provisions of the
81-13    contract have been approved by a majority of the electors voting at
81-14    an election held for that purpose.
81-15          (d) [(f)]  Any contract election may be held at the same time
81-16    as and in conjunction with an election to issue bonds, and the
81-17    procedure for calling the election, giving notice, conducting the
81-18    election, and canvassing the returns shall be the same as the
81-19    procedure for a bond election.
81-20          (e)  A district created pursuant to Chapter 628, Acts of the
81-21    68th Legislature, Regular Session, 1983, is defined as a municipal
81-22    corporation and political subdivision pursuant to Chapter 405, Acts
81-23    of the 76th Legislature, Regular Session, 1999, and is authorized
81-24    to take action accordingly.
81-25          SECTION 2.59.  Subsection (a), Section 182.052, Utilities
81-26    Code, is amended to read as follows:
 82-1          (a)  Except as provided by Section 182.054, a
 82-2    government-operated utility may not disclose personal information
 82-3    in a customer's account record, or any information relating to the
 82-4    volume or units of utility usage or the amounts billed to or
 82-5    collected from the individual for utility usage, if the customer
 82-6    requests that the government-operated utility keep the information
 82-7    confidential.  However, a government-operated utility may disclose
 82-8    information related to the customer's volume or units of utility
 82-9    usage or amounts billed to or collected from the individual for
82-10    utility usage if the primary source of water for such utility was a
82-11    sole-source designated aquifer.
82-12          SECTION 2.60.  Section 1.03, Chapter 626, Acts of the 73rd
82-13    Legislature, Regular Session, 1993, is amended by adding
82-14    Subdivisions (26) and (27) to read as follows:
82-15                (26)  "Agricultural use" means any use or activity
82-16    involving any of the following activities:
82-17                      (A)  cultivating the soil to produce crops for
82-18    human food, animal feed, or planting seed or for the production of
82-19    fibers;
82-20                      (B)  the practice of floriculture, viticulture,
82-21    silviculture, and horticulture, including the cultivation of plants
82-22    in containers or nonsoil media, by a nursery grower;
82-23                      (C)  raising, feeding, or keeping animals for
82-24    breeding purposes or for the production of food or fiber, leather,
82-25    pelts, or other tangible products having a commercial value;
82-26                      (D)  wildlife management;
 83-1                      (E)  raising or keeping equine animals; and
 83-2                      (F)  planting cover crops, including cover crops
 83-3    cultivated for transplantation, or leaving land idle for the
 83-4    purpose of participating in any governmental program or normal crop
 83-5    or livestock rotation procedure.
 83-6                (27)  "Nursery grower" means a person who grows more
 83-7    than 50 percent of the products that the person either sells or
 83-8    leases, regardless of the variety sold, leased, or grown.  For the
 83-9    purpose of this definition, "grow" means the actual cultivation or
83-10    propagation of the product beyond the mere holding or maintaining
83-11    of the item before sale or lease and typically includes activities
83-12    associated with the production or multiplying of stock, such as the
83-13    development of new plants from cuttings, grafts, plugs, or
83-14    seedlings.
83-15          SECTION 2.61.  Subsection (e), Section 1.29, Chapter 626,
83-16    Acts of the 73rd Legislature, Regular Session, 1993, is amended to
83-17    read as follows:
83-18          (e)  In developing an equitable fee structure under this
83-19    section, the authority may establish different fee rates on a per
83-20    acre-foot basis for different types of use.  The fees must be
83-21    equitable between types of uses.  The fee rate for agricultural use
83-22    shall be based on the volume of water withdrawn and may not be more
83-23    than $2 per acre-foot [20 percent of the fee rate for municipal
83-24    use].  The authority shall assess the fees on the amount of water a
83-25    permit holder is authorized to withdraw under the permit.
83-26          SECTION 2.62.  Section 1.44, Chapter 626, Acts of the 73rd
 84-1    Legislature, Regular Session, 1993, is amended by adding Subsection
 84-2    (e) to read as follows:
 84-3          (e)  The authority may contract for injection or artificial
 84-4    recharge under this section only if provision is made for
 84-5    protecting and maintaining the quality of groundwater in the
 84-6    receiving part of the aquifer, and:
 84-7                (1)  the water used for artificial recharge is
 84-8    groundwater withdrawn from the aquifer; or
 84-9                (2)  the water is recharged through a natural recharge
84-10    feature.
84-11          SECTION 2.63.  Subsections (a) and (b), Section 4.03, Chapter
84-12    1029, Acts of the 76th Legislature, Regular Session, 1999, are
84-13    amended to read as follows:
84-14          (a)  The authority may establish fees, rates, and charges,
84-15    and classifications of fee payers and ratepayers, as necessary to
84-16    enable the authority to fulfill the authority's purposes and
84-17    regulatory obligations provided by this Act.
84-18          (b)  The authority may charge against the owner of a well
84-19    located in the authority's boundaries a fee on the amount of water
84-20    pumped from the well.  The board shall establish the rate of a fee
84-21    under this subsection only after a special meeting on the fee.  The
84-22    board shall by rule exempt from the fee under this subsection those
84-23    classes of wells that are not subject to groundwater reduction
84-24    requirements imposed by the subsidence district, except that if any
84-25    of those classes of wells become subject at a future date to a
84-26    groundwater reduction requirement imposed by the subsidence
 85-1    district, then the authority may after that date charge the fee
 85-2    under this subsection to those affected classes of wells.  The
 85-3    board by rule may exempt any other classes of wells from the fee
 85-4    under this subsection.  The board may not apply the fee to a well:
 85-5                (1)  with a casing diameter of less than five inches
 85-6    that serves a single-family dwelling;
 85-7                (2)  regulated under Chapter 27, Water Code;
 85-8                (3)  used for irrigation of agricultural crops; or
 85-9                (4)  [that produces 10 million gallons or less
85-10    annually; or]
85-11                [(5)]  used solely for electric generation.
85-12             ARTICLE 3.  DISTRICT RATIFICATIONS AND CREATIONS
85-13           PART 1.  COW CREEK GROUNDWATER CONSERVATION DISTRICT
85-14          SECTION 3.0101.  RATIFICATION OF CREATION.  (a)  The creation
85-15    of the Cow Creek Groundwater Conservation District in Kendall
85-16    County by Chapter 1331, Acts of the 76th Legislature, Regular
85-17    Session, 1999, is ratified as required by Section 15(a) of that
85-18    chapter, subject to approval at a confirmation election under
85-19    Section 3.0108 of this part.  The district is a governmental agency
85-20    and a body politic and corporate.
85-21          (b)  The district may develop and implement regulatory,
85-22    conservation, and recharge programs that preserve and protect
85-23    groundwater resources located in the district.
85-24          SECTION 3.0102.  DEFINITIONS.  In this part:
85-25                (1)  "District" means the Cow Creek Groundwater
85-26    Conservation District.
 86-1                (2)  "Retail public utility" means a retail public
 86-2    utility as defined by Section 13.002, Water Code, that is providing
 86-3    service in the district on September 1, 2001.
 86-4                (3)  "Well" means any excavation drilled or dug into
 86-5    the ground that may intercept or penetrate a water-bearing stratum
 86-6    or formation.
 86-7          SECTION 3.0103.  BOUNDARIES.  The boundaries of the district
 86-8    are coextensive with the boundaries of Kendall County.
 86-9          SECTION 3.0104.  POWERS.  Except as otherwise provided by
86-10    this part, the district has all of the rights, powers, privileges,
86-11    authority, functions, and duties provided by the general law of the
86-12    state, including Chapter 36, Water Code, applicable to groundwater
86-13    conservation districts created under Section 59, Article XVI, Texas
86-14    Constitution.  This part prevails over any provision of general
86-15    law, including Chapter 36, Water Code, or Chapter 1331, Acts of the
86-16    76th Legislature, Regular Session, 1999, that is in conflict or
86-17    inconsistent with this part.
86-18          SECTION 3.0105.  BOARD OF DIRECTORS.  (a)  The district is
86-19    governed by a board of five directors.
86-20          (b)  Temporary directors serve until initial directors are
86-21    elected under Sections 3.0108 and 3.0109 of this part or until this
86-22    part expires under Section 3.0108 of this part, whichever occurs
86-23    first.
86-24          (c)  Initial directors serve until permanent directors are
86-25    elected under Section 3.0110 of this part.
86-26          (d)  Permanent directors serve staggered four-year terms.
 87-1          (e)  A director serves until the director's successor has
 87-2    qualified.
 87-3          (f)  Each director must qualify to serve as director in the
 87-4    manner provided by Section 36.055, Water Code.
 87-5          (g)  A vacancy in the office of director is filled by
 87-6    appointment of the board until the next election for directors.  At
 87-7    the next election for directors, a person shall be elected to fill
 87-8    the position.  If the position is not scheduled to be filled at the
 87-9    election, the person elected to fill the position shall serve only
87-10    for the remainder of the unexpired term.
87-11          SECTION 3.0106.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
87-12    PRECINCTS.  (a)  The directors of the district shall be elected
87-13    according to the commissioners precinct method as provided by this
87-14    part.
87-15          (b)  One director shall be elected by the qualified voters of
87-16    the entire district and one director shall be elected from each
87-17    county commissioners precinct by the qualified voters of that
87-18    precinct.
87-19          (c)  A person shall indicate on the application for a place
87-20    on the ballot the precinct that the person seeks to represent or
87-21    that the person seeks to represent the district at large.
87-22          (d)  When the boundaries of the commissioners precincts are
87-23    changed, each director in office on the effective date of the
87-24    change or elected to a term of office beginning on or after the
87-25    effective date of the change serves in the precinct to which the
87-26    director was elected for the entire term to which the director was
 88-1    elected, even though the change in boundaries places the person's
 88-2    residence outside the precinct for which the person was elected.
 88-3          (e)  To be eligible to be a candidate for or to serve as
 88-4    director from a county commissioners precinct, a person must be a
 88-5    registered voter in the precinct from which the person is elected
 88-6    or appointed.  To be eligible to be a candidate for or to serve as
 88-7    director at large, a person must be a registered voter in the
 88-8    district.
 88-9          SECTION 3.0107.  TEMPORARY DIRECTORS.  (a)  The temporary
88-10    board of directors shall be appointed by the county commissioners
88-11    court.  One temporary director shall be appointed from each
88-12    commissioners precinct, and one temporary director shall be a
88-13    director at large.
88-14          (b)  If a temporary director fails to qualify for office, the
88-15    temporary directors who have qualified shall appoint a person to
88-16    fill the vacancy.  If at any time there are fewer than three
88-17    qualified temporary directors, the Texas Natural Resource
88-18    Conservation Commission shall appoint the necessary number of
88-19    persons to fill all vacancies on the board.
88-20          SECTION 3.0108.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
88-21    (a)  The temporary board of directors shall call and hold an
88-22    election to confirm establishment of the district and to elect five
88-23    initial directors.
88-24          (b)  A person who wishes to be a candidate for the office of
88-25    initial director may file an application with the temporary board
88-26    of directors to have the candidate's name printed on the ballot as
 89-1    provided by Section 3.0106 of this part.
 89-2          (c)  At the confirmation and initial directors election, the
 89-3    temporary board of directors shall have the names of the five
 89-4    persons serving as temporary directors placed on the ballot by
 89-5    commissioners precinct and as at-large director, together with the
 89-6    name of any candidate filing for the office of director as provided
 89-7    by this section.
 89-8          (d)  If a majority of the votes cast at the election favor
 89-9    the creation of the district, the temporary directors shall declare
89-10    the district created.  If a majority of the votes cast at the
89-11    election are against the creation of the district, the temporary
89-12    directors shall declare the district defeated.  The temporary
89-13    directors shall file a copy of the election results with the Texas
89-14    Natural Resource Conservation Commission.
89-15          (e)  If a majority of the votes cast at the election are
89-16    against the creation of the district, the temporary directors may
89-17    call and hold subsequent elections to confirm establishment of the
89-18    district and to elect initial directors.  A subsequent election may
89-19    not be held earlier than the first anniversary of the date on which
89-20    the previous election was held.  If the district is not created
89-21    before September 1, 2006, this part expires on that date.
89-22          (f)  Section 41.001(a), Election Code, does not apply to a
89-23    confirmation and initial directors election held under this
89-24    section.
89-25          (g)  Section 36.017(a), Water Code, does not apply to the
89-26    district.
 90-1          (h)  Except as provided by this section, a confirmation and
 90-2    directors election must be conducted as provided by Sections
 90-3    36.017(b)-(h), Water Code, and the Election Code.
 90-4          SECTION 3.0109.  INITIAL DIRECTORS.  (a)  If the district is
 90-5    created at the election, the temporary directors, at the time the
 90-6    vote is canvassed, shall declare the candidate receiving the most
 90-7    votes for each commissioners precinct or for the at-large director
 90-8    to be elected as the initial directors.
 90-9          (b)  The initial directors for Precincts 2 and 3 serve until
90-10    the first regular meeting of the board of directors held after the
90-11    first permanent directors election under Section 3.0110 of this
90-12    part.  The initial directors for Precincts 1 and 4 and the initial
90-13    director representing the district at large serve until the first
90-14    regular meeting of the board of directors held after the second
90-15    permanent directors election under Section 3.0110 of this part.
90-16          SECTION 3.0110.  ELECTION OF PERMANENT DIRECTORS.  Beginning
90-17    in the second year after the year in which the district is
90-18    authorized to be created at a confirmation election, an election
90-19    shall be held in the district on the first Saturday in May every
90-20    two years to elect the appropriate number of directors to the
90-21    board.
90-22          SECTION 3.0111.  ADDITIONAL AUTHORITY.  (a)  The district may
90-23    contract with one or more state agencies or other governmental
90-24    bodies, including a county, a river authority, or another district,
90-25    to carry out any function of the district.
90-26          (b)  The district may require a drilling permit before a new
 91-1    well is drilled or an existing well is substantially altered.
 91-2    Notwithstanding an exemption for a well under Section 36.117, Water
 91-3    Code, written authorization granted by the district must be
 91-4    received before a new well is drilled or an existing well is
 91-5    substantially altered.
 91-6          (c)  The district may participate in the construction,
 91-7    implementation, and maintenance of best management practices for
 91-8    water resource management in the district and may engage in and
 91-9    promote the acceptance of best management practices through
91-10    education efforts sponsored by the district.  Construction,
91-11    implementation, and maintenance of best management practices must
91-12    address water quantity and quality practices such as brush
91-13    management, prescribed grazing, recharge structures, water and silt
91-14    detention and retention structures, plugging of abandoned wells,
91-15    rainwater harvesting, and other treatment measures for the
91-16    conservation of water resources.
91-17          (d)  Reasonable fees, as determined by the district, may be
91-18    imposed on an annual basis on each nonexempt well.  The district
91-19    shall adopt any rules necessary for the assessment and collection
91-20    of fees under this subsection.
91-21          (e)  The district may use money collected from fees:
91-22                (1)  in any manner necessary for the management and
91-23    operation of the district;
91-24                (2)  to pay all or part of the principal of and
91-25    interest on district bonds or notes; and
91-26                (3)  for any purpose consistent with the district's
 92-1    certified water management plan.
 92-2          (f)  The district shall grant an exemption or other relief
 92-3    from ad valorem taxes on property on which a water conservation
 92-4    initiative has been implemented.  The district shall adopt rules to
 92-5    implement this subsection.  A retail public utility shall receive
 92-6    the same exemption or relief from ad valorem taxes on property as
 92-7    any other customer of the district would receive.
 92-8          (g)  As a water conservation initiative to encourage retail
 92-9    public utilities to obtain water supplies from sources other than
92-10    groundwater, the district shall grant an exemption or other relief
92-11    from ad valorem taxes on property served by a retail public utility
92-12    based on:
92-13                (1)  the percentage of potable water supplied within
92-14    the district by the retail public utility from sources other than
92-15    groundwater compared to the total water supplied by the retail
92-16    public utility for the preceding year; and
92-17                (2)  the percentage of wastewater effluent produced by
92-18    the retail public utility that is used as reclaimed water within
92-19    the district compared to the total wastewater effluent produced by
92-20    the retail public utility for the preceding year.  The  district
92-21    may consider the impact of floods and equipment breakage on the
92-22    retail public utility's ability to supply water from sources other
92-23    than groundwater.
92-24          (h)  The total amount of the exemption or other relief from
92-25    ad valorem taxes may not exceed one-half of the tax levied by the
92-26    district.
 93-1          SECTION 3.0112.  PROHIBITED ACTS.  The district may not:
 93-2                (1)  impose an ad valorem property tax for
 93-3    administrative, operation, or maintenance expenses that exceeds the
 93-4    lesser of the rate approved by the majority of the qualified voters
 93-5    voting in the election authorizing the tax, or three cents per $100
 93-6    valuation;
 93-7                (2)  require the owner of a well used solely for
 93-8    domestic or livestock purposes to install a meter or measuring
 93-9    device on the well;
93-10                (3)  enter into any contract or engage in any action to
93-11    supply water to any person in the service area of any municipality
93-12    or retail public utility located in the district, except with the
93-13    consent of the municipality or retail public utility; or
93-14                (4)  issue any bonds secured by ad valorem taxes before
93-15    September 1, 2004.
93-16           PART 2.  CROSSROADS GROUNDWATER CONSERVATION DISTRICT
93-17          SECTION 3.0201.  RATIFICATION OF CREATION.  The creation of
93-18    the Crossroads Groundwater Conservation District in Victoria County
93-19    by Chapter 1331, Acts of the 76th Legislature, Regular Session,
93-20    1999, is ratified as required by Section 15(a) of that chapter,
93-21    subject to approval at a confirmation election under Section 3.0210
93-22    of this part.
93-23          SECTION 3.0202.  DEFINITIONS.  In this part:
93-24                (1)  "Board" means the district's board of directors.
93-25                (2)  "Commissioners court" means the Victoria County
93-26    Commissioners Court.
 94-1                (3)  "District" means the Crossroads Groundwater
 94-2    Conservation District.
 94-3          SECTION 3.0203.  LEGISLATIVE FINDINGS.  The legislature finds
 94-4    that:
 94-5                (1)  the organization of the district is feasible and
 94-6    practicable;
 94-7                (2)  all of the land to be included in, and the
 94-8    residents of, the district will benefit from the creation of the
 94-9    district;
94-10                (3)  there is a public necessity for the district; and
94-11                (4)  the creation of the district will provide a
94-12    benefit and utility to the public.
94-13          SECTION 3.0204.  BOUNDARIES.  The boundaries of the district
94-14    are coextensive with the boundaries of Victoria County.
94-15          SECTION 3.0205.  APPLICATION OF CHAPTER 36, WATER CODE;
94-16    GENERAL POWERS AND DUTIES.  (a)  Except to the extent of any
94-17    conflict with this part or as specifically limited by this part,
94-18    the district is governed by and subject to Chapter 36, Water Code,
94-19    and may exercise all of the powers contained in that chapter,
94-20    including the power to issue bonds and levy and collect taxes and
94-21    the power of eminent domain.  The district may exercise all of the
94-22    duties provided by Chapter 36, Water Code.
94-23          (b)  This part prevails over any conflicting or inconsistent
94-24    provision of Chapter 1331, Acts of the 76th Legislature, Regular
94-25    Session, 1999.
94-26          SECTION 3.0206.  BOARD OF DIRECTORS.  (a)  The district is
 95-1    governed by a board of seven directors.
 95-2          (b)  The directors for Places 1-4 are appointed by the
 95-3    commissioners court.  The directors for Places 5-7 are appointed by
 95-4    the city council of the City of Victoria.
 95-5          (c)  The directors shall select from their members persons to
 95-6    serve as chairman, vice chairman, and secretary.
 95-7          SECTION 3.0207.  QUALIFICATIONS OF BOARD MEMBERS.  To be
 95-8    qualified for appointment as a director, a person must be a
 95-9    resident of the district and must be at least 18 years of age.
95-10          SECTION 3.0208.  TERM OF OFFICE.  (a)  Except for the
95-11    temporary and initial directors of the district, directors serve
95-12    staggered four-year terms.
95-13          (b)  A vacancy in the office of director is filled for the
95-14    remainder of the term by appointment by the commissioners court or
95-15    the city council of the City of Victoria, as appropriate.
95-16          SECTION 3.0209.  TEMPORARY DIRECTORS.  (a)  On September 1,
95-17    2001, the following persons are designated as temporary directors
95-18    of the district:
95-19                (1)  Place 1:  Mark Dierlam
95-20                (2)  Place 2:  Rocky Sanders
95-21                (3)  Place 3:  S. F. Ruschhaupt III
95-22                (4)  Place 4:  Joseph Dial
95-23                (5)  Place 5:  Stephen Diebel
95-24                (6)  Place 6:  Jerry James
95-25                (7)  Place 7:  Denise McCue
95-26          (b)  If a temporary director fails to qualify for office or
 96-1    if a vacancy occurs in the office of temporary director for any
 96-2    reason, the commissioners court shall appoint a person to fill a
 96-3    vacancy in Place 1, 2, 3, or 4, and the city council of the City of
 96-4    Victoria shall appoint a person to fill a vacancy in Place 5, 6, or
 96-5    7.
 96-6          (c)  The temporary directors shall select from their members
 96-7    persons to serve as chairman, vice chairman, and secretary.
 96-8          (d)  The temporary directors serve until they declare the
 96-9    district created, at which time they become the initial directors
96-10    of the district under Section 3.0211 of this part.
96-11          (e)  To be qualified to serve as a temporary director, a
96-12    person must be a resident of Victoria County and at least 18 years
96-13    of age.
96-14          SECTION 3.0210.  CONFIRMATION ELECTION.  (a)  Not later than
96-15    October 1, 2001, and without the necessity of having a petition
96-16    presented, the temporary directors shall meet and call an election
96-17    to be held not later than January 1, 2002, within the boundaries of
96-18    the proposed district to confirm the creation of the district.
96-19          (b)  Section 41.001(a), Election Code, does not apply to an
96-20    election called under this section.
96-21          (c)  The ballot for the election shall be printed to provide
96-22    for a vote for or against the following propositions:
96-23                (1)  the creation of the Crossroads Groundwater
96-24    Conservation District in Victoria County; and
96-25                (2)  the levy and collection of a property tax in the
96-26    district.
 97-1          (d)  The temporary board may include other propositions on
 97-2    the ballot that it considers necessary.
 97-3          (e)  If a majority of votes cast at the election favor the
 97-4    creation of the district, the temporary directors shall declare the
 97-5    district created.  If a majority of the votes cast at the election
 97-6    are against the creation of the district, the temporary directors
 97-7    shall declare the district defeated.  The temporary directors shall
 97-8    file a copy of the election results with the Texas Natural Resource
 97-9    Conservation Commission.
97-10          (f)  If the creation of the district is defeated, further
97-11    elections may be called and held after the first anniversary of the
97-12    most recent confirmation election.  If the district is not created
97-13    by September 1, 2006, this part expires.
97-14          SECTION 3.0211.  INITIAL DIRECTORS.  (a)  On confirmation of
97-15    the creation of the district under Section 3.0210 of this part, the
97-16    temporary directors become the initial directors of the district
97-17    and serve terms as provided by Subsection (b) of this section,
97-18    except that not later than the 60th day after the date on which the
97-19    temporary directors declare the district created, the commissioners
97-20    court may replace any director in Places 1-4 and the city council
97-21    of the City of Victoria may replace any director in Places 5-7.
97-22          (b)  The initial directors for Places 1, 3, 5, and 7 serve
97-23    for four years following the confirmation of the district.  The
97-24    initial directors for Places 2, 4, and 6 serve for two years
97-25    following the confirmation of the district.
97-26          (c)  If, for any reason, an appointed director is not
 98-1    qualified to take office at the first regular meeting of the board
 98-2    following the director's appointment, the director for that place
 98-3    shall continue to serve until a successor has qualified.
 98-4          SECTION 3.0212.  LIMITATION ON TAXATION.  The district may
 98-5    not impose an ad valorem tax at a rate that exceeds two cents on
 98-6    the $100 valuation of taxable property in the district.
 98-7          PART 3.  HAYS TRINITY GROUNDWATER CONSERVATION DISTRICT
 98-8          SECTION 3.0301.  RATIFICATION OF CREATION.  The creation by
 98-9    Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
98-10    of the Hays Trinity Groundwater Conservation District in Hays
98-11    County is ratified as required by Section 15(a) of that Act,
98-12    subject to approval at a confirmation election under Section 3.0309
98-13    of this part.
98-14          SECTION 3.0302.  DEFINITION.  In this part, "district" means
98-15    the Hays Trinity Groundwater Conservation District.
98-16          SECTION 3.0303.  BOUNDARIES.  The boundaries of the district
98-17    are coextensive with the boundaries of Hays County, Texas,
98-18    excluding any area in Hays County that is, on the effective date of
98-19    this Act, within another groundwater conservation district with
98-20    authority to require a permit to drill or alter a well for the
98-21    withdrawal of groundwater.  Not later than the 30th day after the
98-22    date of the first meeting of the board of directors of the
98-23    district, and before a confirmation election is held, the board
98-24    shall prepare and file a description of district boundaries with
98-25    the Hays County clerk and the Texas Natural Resource Conservation
98-26    Commission.
 99-1          SECTION 3.0304.  GENERAL POWERS.  (a)  The district has all
 99-2    of the rights, powers, privileges, authority, functions, and duties
 99-3    provided by the general law of this state, including Chapter 36,
 99-4    Water Code, applicable to groundwater conservation districts
 99-5    created under Section 59, Article XVI, Texas Constitution.  This
 99-6    part prevails over any provision of general law that is in conflict
 99-7    or inconsistent with this part, including any provision of Chapter
 99-8    1331, Acts of the 76th Legislature, Regular Session, 1999.
 99-9          (b)  Notwithstanding Subsection (a) of this section, the
99-10    following provisions prevail over a conflicting or inconsistent
99-11    provision of this part:
99-12                (1)  Sections 36.1071-36.108, Water Code;
99-13                (2)  Sections 36.159-36.161, Water Code; and
99-14                (3)  Subchapter I, Chapter 36, Water Code.
99-15          (c)  The district may not enter property to inspect an exempt
99-16    well without the property owner's permission.
99-17          (d)  The Hays County Commissioners Court by resolution may
99-18    require an election to affirm or reverse a decision of the board of
99-19    directors of the district not later than six months after the date
99-20    of the decision.
99-21          (e)  The district may not adopt standards for the
99-22    construction of a residential well that are more stringent than
99-23    state standards for a residential well.
99-24          SECTION 3.0305.  EXEMPT WELLS.  (a)  The following wells are
99-25    exempt from the requirements of Chapter 36, Water Code, and may not
99-26    be regulated, permitted, or metered by the district:
 100-1               (1)  a well used for domestic use by a single private
 100-2   residential household and producing less than 25,000 gallons per
 100-3   day; and
 100-4               (2)  a well used for conventional farming and ranching
 100-5   activities, including such intensive operations as aquaculture,
 100-6   livestock feedlots, or poultry operations.
 100-7         (b)  The district may not require a permit to construct a
 100-8   well described by Subsection (a)(2) of this section.
 100-9         (c)  A well used for dewatering and monitoring in the
100-10   production of coal or lignite is exempt from permit requirements,
100-11   regulations, and fees imposed by the district.
100-12         SECTION 3.0306.  FISCAL RESPONSIBILITIES.  (a)  The district
100-13   annually shall prepare a budget showing proposed expenditures and
100-14   disbursements and estimated receipts and collections for the next
100-15   fiscal year and shall hold a public hearing on the proposed budget.
100-16   The district must publish notice of the hearing at least once in a
100-17   newspaper of general circulation in the county not later than the
100-18   10th day before the date of the hearing.  A taxpayer of the
100-19   district is entitled to appear at the hearing to be heard regarding
100-20   any item in the proposed budget.
100-21         (b)  At the written request of the Hays County Commissioners
100-22   Court, the county auditor shall audit the performance of the
100-23   district.  The court may request a general audit of the performance
100-24   of the district or may request an audit of only one or more
100-25   district matters.
100-26         SECTION 3.0307.  BOARD OF DIRECTORS.  (a)  The district is
 101-1   governed by a board of five directors.
 101-2         (b)  Temporary directors serve until initial directors are
 101-3   elected under Section 3.0309 of this part.
 101-4         (c)  Initial directors serve until permanent directors are
 101-5   elected under Section 3.0310 of this part.
 101-6         (d)  Permanent directors serve staggered two-year terms.
 101-7         (e)  Each director must qualify to serve as director in the
 101-8   manner provided by Section 36.055, Water Code.
 101-9         (f)  A director serves until the director's successor has
101-10   qualified.
101-11         (g)  If there is a vacancy on the board, the Hays County
101-12   Commissioners Court shall appoint a director to serve the remainder
101-13   of the term.
101-14         (h)  A director may not receive a salary or other
101-15   compensation for service as a director but may be reimbursed for
101-16   actual expenses of attending meetings at the rate in effect for
101-17   employees of Hays County.
101-18         SECTION 3.0308.  METHOD OF ELECTING DIRECTORS: SINGLE-MEMBER
101-19   DISTRICTS.  (a)  The temporary directors shall draw five numbered,
101-20   single-member districts for electing directors.
101-21         (b)  For the conduct of an election under Section 3.0309 or
101-22   Section 3.0310 of this part, the board shall provide for one
101-23   director to be elected from each of the single-member districts.  A
101-24   director elected from a single-member district represents the
101-25   residents of that single-member district.
101-26         (c)  To be qualified to be a candidate for or to serve as
 102-1   director, a person must be a registered voter in the single-member
 102-2   district that the person represents or seeks to represent.
 102-3         (d)  The initial or permanent directors may revise the
 102-4   districts as necessary or appropriate.  The board of directors
 102-5   shall revise each single-member district after each federal
 102-6   decennial census to reflect population changes.  At the first
 102-7   election after the single-member districts are revised, a new
 102-8   director shall be elected from each district.  The directors shall
 102-9   draw lots to determine which two directors serve one-year terms and
102-10   which three directors serve two-year terms.
102-11         SECTION 3.0309.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
102-12   (a)  The temporary board of directors shall call and hold an
102-13   election to confirm establishment of the district and to elect
102-14   initial directors.
102-15         (b)  At the confirmation and initial directors election, the
102-16   temporary board of directors shall have placed on the ballot the
102-17   name of any candidate filing for an initial director's position and
102-18   blank spaces to write in the names of other persons.  A temporary
102-19   director who is qualified to be a candidate under Section 3.0308 of
102-20   this part may file for an initial director's position.
102-21         (c)  Section 41.001(a), Election Code, does not apply to a
102-22   confirmation and initial directors election held as provided by
102-23   this section.
102-24         (d)  Except as provided by this section, a confirmation and
102-25   initial directors election must be conducted as provided by
102-26   Sections 36.017(b)-(h), Water Code, and the Election Code.
 103-1         SECTION 3.0310.  ELECTION OF DIRECTORS.  (a)  On the first
 103-2   Saturday in May or the first Tuesday after the first Monday in
 103-3   November of the first even-numbered year after the year in which
 103-4   the district is authorized to be created at a confirmation
 103-5   election, an election shall be held in the district for the
 103-6   election of three directors to serve two-year terms and two
 103-7   directors to serve one-year terms.
 103-8         (b)  On the first Saturday in May or the first Tuesday after
 103-9   the first Monday in November, as applicable, of each subsequent
103-10   second year following the election held under Subsection (a) of
103-11   this section, the appropriate number of directors shall be elected.
103-12         SECTION 3.0311.  OTHER ELECTIONS.  An election held by the
103-13   district, other than an election under Section 3.0309 or 3.0310 of
103-14   this part, must be scheduled to coincide with a general election in
103-15   May or November.
103-16         SECTION 3.0312.  FUNDING AUTHORITY.  (a)  Except as provided
103-17   by Sections 3.0305(b) and (c) of this part, the district may
103-18   require a permit for the construction of a new well completed after
103-19   the effective date of this Act and may charge and collect a
103-20   construction permit fee not to exceed $300.
103-21         (b)  The district may levy and collect a water utility
103-22   service connection fee not to exceed $300 for each new water
103-23   service connection made after the effective date of this Act.  This
103-24   subsection does not apply to a water utility that has surface water
103-25   as its sole source of water.
103-26         (c)  Notwithstanding Section 3.0304(a) of this part or
 104-1   Subchapter G, Chapter 36, Water Code, the district may not impose a
 104-2   tax or assess or collect any fees except as authorized by
 104-3   Subsection (a) or (b) of this section.
 104-4         SECTION 3.0313.  EXPIRATION DATE.  If the creation of the
 104-5   district is not confirmed at a confirmation election held under
 104-6   Section 3.0309 of this part before September 1, 2003, this part
 104-7   expires on that date.
 104-8          PART 4.  LONE WOLF GROUNDWATER CONSERVATION DISTRICT
 104-9         SECTION 3.0401.  RATIFICATION OF CREATION.  The creation of
104-10   the Lone Wolf Groundwater Conservation District in Mitchell County
104-11   by Chapter 1331, Acts of the 76th Legislature, Regular Session,
104-12   1999, is ratified as required by Section 15(a) of that chapter,
104-13   subject to approval at a confirmation election under Section 3.0407
104-14   of this part.
104-15         SECTION 3.0402.  DEFINITION.  In this part, "district" means
104-16   the Lone Wolf Groundwater Conservation District.
104-17         SECTION 3.0403.  GENERAL POWERS.  The district has all of the
104-18   rights, powers, privileges, authority, functions, and duties
104-19   provided by the general law of the state, including Chapter 36,
104-20   Water Code, applicable to groundwater conservation districts
104-21   created under Section 59, Article XVI, Texas Constitution.  This
104-22   part prevails over any provision of general law, including Chapter
104-23   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
104-24   Regular Session, 1999, that is in conflict or inconsistent with
104-25   this part.
104-26         SECTION 3.0404.  BOARD OF DIRECTORS.  (a)  The district is
 105-1   governed by a board of five directors.
 105-2         (b)  Temporary directors serve until initial directors are
 105-3   elected under Section 3.0407 of this part.
 105-4         (c)  Initial directors serve until permanent directors are
 105-5   elected under Section 3.0408 of this part.
 105-6         (d)  Permanent directors serve staggered four-year terms.
 105-7         (e)  Each director must qualify to serve as director in the
 105-8   manner provided by Section 36.055, Water Code.
 105-9         (f)  A director serves until the director's successor has
105-10   qualified.
105-11         SECTION 3.0405.  COMPENSATION OF DIRECTORS.  A director is
105-12   not entitled to fees of office but is entitled to reimbursement of
105-13   actual expenses reasonably and necessarily incurred while engaging
105-14   in activities on behalf of the district.
105-15         SECTION 3.0406.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
105-16   PRECINCTS.  (a)  The directors of the district shall be elected
105-17   according to the commissioners precinct method as provided by this
105-18   section.
105-19         (b)  One director shall be elected by the voters of the
105-20   entire district, and one director shall be elected from each county
105-21   commissioners precinct by the voters of that precinct.
105-22         (c)  To be eligible to be a candidate for or to serve as
105-23   director at large, a person must be a registered voter in the
105-24   district.  To be eligible to be a candidate for or to serve as
105-25   director from a county commissioners precinct, a person must be a
105-26   registered voter of that precinct.
 106-1         (d)  A person shall indicate on the application for a place
 106-2   on the ballot:
 106-3               (1)  the precinct that the person seeks to represent;
 106-4   or
 106-5               (2)  that the person seeks to represent the district at
 106-6   large.
 106-7         (e)  When the boundaries of the commissioners precincts are
 106-8   changed, each director in office on the effective date of the
 106-9   change or elected to a term of office beginning on or after the
106-10   effective date of the change serves in the precinct to which the
106-11   director was elected for the entire term to which the director was
106-12   elected, even though the change in boundaries places the person's
106-13   residence outside the precinct for which the person was elected.
106-14         SECTION 3.0407.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
106-15   (a)  The temporary board of directors shall call and hold an
106-16   election to confirm establishment of the district and to elect
106-17   initial directors.
106-18         (b)  At the confirmation and initial directors election, the
106-19   temporary board of directors shall have placed on the ballot the
106-20   name of any candidate filing for an initial director position and
106-21   blank spaces to write in the names of other persons.  A temporary
106-22   director who is eligible to be a candidate under Section 3.0406 of
106-23   this part may file for an initial director position.
106-24         (c)  Section 41.001(a), Election Code, does not apply to a
106-25   confirmation and initial directors election held as provided by
106-26   this section.
 107-1         (d)  Except as provided by this section, a confirmation and
 107-2   initial directors election must be conducted as provided by
 107-3   Sections 36.017(b)-(h), Water Code, and the Election Code.
 107-4         SECTION 3.0408.  ELECTION OF DIRECTORS.  (a)  On the first
 107-5   Saturday in May of the first even-numbered year after the year in
 107-6   which the district is authorized to be created at a confirmation
 107-7   election, an election shall be held in the district for the
 107-8   election of three directors to serve four-year terms and two
 107-9   directors to serve two-year terms.
107-10         (b)  On the first Saturday in May of each subsequent second
107-11   year following the election, the appropriate number of directors
107-12   shall be elected.
107-13         SECTION 3.0409.  LIMITATION ON TAXATION.  The district may
107-14   levy property taxes at a rate not to exceed 20 cents on each $100
107-15   of assessed valuation to pay any part of the bonds or notes issued
107-16   by the district if the authority to impose property taxes under
107-17   this part is approved by a majority of the voters voting at a
107-18   confirmation election under Section 3.0407 of this part or at a
107-19   separate election called for that purpose by the board of
107-20   directors.
107-21         SECTION 3.0410.  EXPIRATION.  If the creation of the district
107-22   is not confirmed at a confirmation election held under Section
107-23   3.0407 of this part before September 1, 2003, the district is
107-24   dissolved and this part expires on that date.
107-25          PART 5.  LOST PINES GROUNDWATER CONSERVATION DISTRICT
107-26         SECTION 3.0501.  RATIFICATION OF CREATION.  The creation of
 108-1   the Lost Pines Groundwater Conservation District in Bastrop and Lee
 108-2   counties by Chapter 1331, Acts of the 76th Legislature, Regular
 108-3   Session, 1999, is ratified as required by Section 15(a) of that
 108-4   chapter, subject to approval at a confirmation election under
 108-5   Section 3.0507 of this part.
 108-6         SECTION 3.0502.  DEFINITIONS.  In this part:
 108-7               (1)  "District" means the Lost Pines Groundwater
 108-8   Conservation District.
 108-9               (2)  "Public utility" means any person, corporation,
108-10   public utility, water supply or sewer service corporation,
108-11   municipality, political subdivision, or agency operating,
108-12   maintaining, or controlling facilities in the state for providing
108-13   potable water service for compensation.
108-14         SECTION 3.0503.  BOUNDARIES.  The boundaries of the district
108-15   are coextensive with the boundaries of Bastrop and Lee counties,
108-16   Texas.
108-17         SECTION 3.0504.  POWERS.  (a)  The district has all of the
108-18   rights, powers, privileges, authority, functions, and duties
108-19   provided by the general law of the state, including Chapter 36,
108-20   Water Code, applicable to groundwater conservation districts
108-21   created under Section 59, Article XVI, Texas Constitution.  This
108-22   part prevails over any provision of general law, including Chapter
108-23   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
108-24   Regular Session, 1999, that is in conflict or inconsistent with
108-25   this part.
108-26         (b)  The district may not impose a tax.  The district may
 109-1   assess  regulatory pumping fees for water produced in or exported
 109-2   from the district.  The regulatory pumping fees the district
 109-3   assesses for water for crop or livestock production or other
 109-4   agricultural uses may not exceed 20 percent of the rate applied to
 109-5   water for municipal uses.  Regulatory pumping fees based on the
 109-6   amount of water withdrawn from a well may not exceed:
 109-7               (1)  $1 per acre-foot for water used for the purpose of
 109-8   irrigating agricultural crops; or
 109-9               (2)  17 cents per thousand gallons for water used for
109-10   any other purpose.
109-11         (c)  The district may adopt a rule exempting a well that is
109-12   not capable of producing more than 50,000 gallons of groundwater a
109-13   day from a permit requirement, a fee, or a restriction on
109-14   production.
109-15         SECTION 3.0505.  GROUNDWATER WELLS UNDER JURISDICTION OF
109-16   RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
109-17   within the district under permits issued by the Railroad Commission
109-18   of Texas are under the exclusive jurisdiction of the railroad
109-19   commission and are exempt from regulation by the district.
109-20         (b)  Groundwater produced in an amount authorized by a
109-21   railroad commission permit may be used within or exported from the
109-22   district without obtaining a permit from the district.
109-23         (c)  To the extent groundwater production exceeds railroad
109-24   commission authorization, the holder of the railroad commission
109-25   permit must apply to the district for appropriate permits for the
109-26   excess production and is subject to the applicable regulatory fees.
 110-1         (d)  Groundwater produced from wells under the jurisdiction
 110-2   of the railroad commission is generally exempt from water district
 110-3   fees.  However, the district may impose either a pumping fee or an
 110-4   export fee on groundwater produced from an otherwise exempt mine
 110-5   well that is used for municipal purposes or by a public utility.
 110-6   Any fee imposed by the district under this subsection may not
 110-7   exceed the fee imposed on other groundwater producers in the
 110-8   district.
 110-9         SECTION 3.0506.  BOARD OF DIRECTORS.  (a)  The district is
110-10   governed by a board of 10 directors.
110-11         (b)  Five directors shall be appointed from Bastrop County by
110-12   the county judge of Bastrop County and five directors shall be
110-13   appointed from Lee County by the county judge of Lee County.
110-14         (c)  Temporary directors serve until their successors are
110-15   appointed and have qualified.
110-16         (d)  The temporary directors shall draw lots to determine:
110-17               (1)  which three directors from each county will serve
110-18   four-year terms that expire December 31, 2005; and
110-19               (2)  which two directors from each county will serve
110-20   two-year terms that expire December 31, 2003.
110-21         (e)  In each subsequent second year following the initial
110-22   appointment of directors, the appropriate number of directors shall
110-23   be appointed.
110-24         (f)  Except as provided by Subsection (d) of this section,
110-25   directors serve staggered four-year terms.
110-26         (g)  Directors may serve consecutive terms.
 111-1         (h)  Each director must qualify to serve as director in the
 111-2   manner provided by Section 36.055, Water Code.
 111-3         (i)  A director serves until the director's successor has
 111-4   qualified.
 111-5         (j)  If a vacancy occurs on the board of directors, the board
 111-6   may appoint a director to serve the remainder of the term.
 111-7         (k)  A director may receive fees of office as provided by
 111-8   Section 36.060, Water Code, and is entitled to reimbursement for
 111-9   reasonable actual expenses incurred in performing duties as a
111-10   director.
111-11         SECTION 3.0507.  INITIAL MEETING AND CONFIRMATION ELECTION.
111-12   (a)  As soon as practicable after September 1, 2001, the temporary
111-13   directors shall meet to set the date for and call the confirmation
111-14   election.  The directors shall hold the meeting in conjunction with
111-15   the regularly scheduled meeting of the directors.
111-16         (b)  The election shall be held on the authorized election
111-17   date in November if the United States Department of Justice has
111-18   precleared this part by that time.  If this part has not been
111-19   precleared by the November election date, the confirmation election
111-20   shall be held at the next authorized election date.  The district
111-21   shall contract with the county clerks of Bastrop and Lee counties
111-22   to conduct the election.
111-23         (c)  Except as provided by this section, the confirmation
111-24   election must be conducted as provided by Sections 36.017 and
111-25   36.018, Water Code, and the Election Code.
111-26         (d)  If a majority of the votes cast at an election held
 112-1   under this section is against the confirmation of the district, the
 112-2   temporary directors may not call another election under this
 112-3   section before the first anniversary of that election.
 112-4         SECTION 3.0508.  REGIONAL COOPERATION.  The district shall:
 112-5               (1)  adopt a management plan detailing proposed efforts
 112-6   of the district to cooperate with other groundwater conservation
 112-7   districts;
 112-8               (2)  participate as needed in coordination meetings
 112-9   with adjacent groundwater conservation districts that share one or
112-10   more aquifers with the district;
112-11               (3)  coordinate the collection of data with adjacent
112-12   groundwater conservation districts in such a way as to achieve
112-13   relative uniformity of data type and quality;
112-14               (4)  provide groundwater level information to adjacent
112-15   groundwater conservation districts;
112-16               (5)  investigate any groundwater pollution to identify
112-17   the pollution's source;
112-18               (6)  notify adjacent groundwater conservation districts
112-19   and all appropriate agencies of any groundwater pollution detected
112-20   and the source of pollution identified;
112-21               (7)  provide to adjacent groundwater conservation
112-22   districts annually an inventory of water wells in the district and
112-23   an estimate of groundwater production within the district; and
112-24               (8)  include adjacent groundwater conservation
112-25   districts on mailing lists for district newsletters and information
112-26   regarding seminars, public education events, news articles, and
 113-1   field days.
 113-2         SECTION 3.0509.  EXPIRATION.  If the creation of this
 113-3   district is not confirmed at a confirmation election held under
 113-4   Section 3.0507 of this part before September 1, 2005, this part
 113-5   expires on that date.
 113-6         SECTION 3.0510.  CONFLICTS.  If another bill relating to the
 113-7   Lost Pines Groundwater Conservation District is enacted by the 77th
 113-8   Legislature, Regular Session, 2001, and becomes law, then, to the
 113-9   extent of any conflict between that Act and this part, the
113-10   provisions of that Act shall prevail.
113-11           PART 6.  MCMULLEN GROUNDWATER CONSERVATION DISTRICT
113-12         SECTION 3.0601.  RATIFICATION OF CREATION.  The creation of
113-13   the McMullen Groundwater Conservation District in McMullen County
113-14   by Chapter 1331, Acts of the 76th Legislature, Regular Session,
113-15   1999, is ratified as required by Section 15(a) of that chapter,
113-16   subject to approval at a confirmation election under Section 3.0607
113-17   of this part.
113-18         SECTION 3.0602.  DEFINITION.  In this part, "district" means
113-19   the McMullen Groundwater Conservation District.
113-20         SECTION 3.0603.  BOUNDARIES.  The boundaries of the district
113-21   are coextensive with the boundaries of McMullen County.
113-22         SECTION 3.0604.  GENERAL POWERS.  (a)  The district has all
113-23   of the rights, powers, privileges, authority, functions, and duties
113-24   provided by the general law of the state, including Chapter 36,
113-25   Water Code, applicable to groundwater conservation districts
113-26   created under Section 59, Article XVI, Texas Constitution.  This
 114-1   part prevails over any provision of general law, including Chapter
 114-2   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
 114-3   Regular Session, 1999, that is in conflict or inconsistent with
 114-4   this part.
 114-5         (b)  The rights, powers, privileges, authority, functions,
 114-6   and duties of the district are subject to the continuing right of
 114-7   supervision of the state to be exercised by and through the Texas
 114-8   Natural Resource Conservation Commission.
 114-9         SECTION 3.0605.  BOARD OF DIRECTORS.  (a)  The district is
114-10   governed by a board of five directors.
114-11         (b)  Temporary directors serve until initial directors are
114-12   elected under Section 3.0607 of this part.
114-13         (c)  Initial directors serve until permanent directors are
114-14   elected under Section 3.0608 of this part.
114-15         (d)  Permanent directors serve staggered four-year terms.
114-16         (e)  Each director must qualify to serve as director in the
114-17   manner provided by Section 36.055, Water Code.
114-18         (f)  A director serves until the director's successor has
114-19   qualified.
114-20         (g)  If there is a vacancy on the board, the remaining
114-21   directors shall appoint a director to serve the remainder of the
114-22   term.
114-23         SECTION 3.0606.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
114-24   PRECINCTS.  (a)  The directors of the district shall be elected
114-25   according to the commissioners precinct method as provided by this
114-26   section.
 115-1         (b)  One director shall be elected by the voters of the
 115-2   entire district and one director shall be elected from each county
 115-3   commissioners precinct by the voters of that precinct.
 115-4         (c)  To be qualified as a candidate for or to serve as
 115-5   director at large, a person must be a registered voter in the
 115-6   district.  To be a candidate for or to serve as director from a
 115-7   county commissioners precinct, a person must be a registered voter
 115-8   of that precinct.
 115-9         (d)  A person shall indicate on the application for a place
115-10   on the ballot:
115-11               (1)  the precinct that the person seeks to represent;
115-12   or
115-13               (2)  that the person seeks to represent the district at
115-14   large.
115-15         (e)  When the boundaries of the commissioners precincts are
115-16   changed, each director in office on the effective date of the
115-17   change or elected to a term of office beginning on or after the
115-18   effective date of the change serves in the precinct to which the
115-19   director was elected for the entire term to which the director was
115-20   elected, even though the change in boundaries places the person's
115-21   residence outside the precinct for which the person was elected.
115-22         SECTION 3.0607.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
115-23   (a)  The temporary board of directors shall call and hold an
115-24   election to confirm establishment of the district and to elect
115-25   initial directors.
115-26         (b)  At the confirmation and initial directors election, the
 116-1   temporary board of directors shall have placed on the ballot the
 116-2   names of the persons serving as temporary directors who intend to
 116-3   run for an initial director position and are qualified to be a
 116-4   candidate under Section 3.0606 of this part together with the name
 116-5   of any candidate filing for an initial director position and blank
 116-6   spaces to write in the names of other persons.
 116-7         (c)  If the district is created at the election, the
 116-8   temporary board of directors, at the time the vote is canvassed,
 116-9   shall:
116-10               (1)  declare the qualified person who receives the most
116-11   votes for each position to be elected as the initial director for
116-12   that position; and
116-13               (2)  include the results of the initial directors
116-14   election in the district's election report to the Texas Natural
116-15   Resource Conservation Commission.
116-16         (d)  Section 41.001(a), Election Code, does not apply to a
116-17   confirmation and initial directors election held as provided by
116-18   this section.
116-19         (e)  Except as provided by this section, a confirmation and
116-20   initial directors election must be conducted as provided by
116-21   Sections 36.017(b)-(h), Water Code, and the Election Code.
116-22         (f)  If a majority of the votes cast at an election held
116-23   under this section is against the confirmation of the district, the
116-24   temporary directors may not call another election under this
116-25   section before the first anniversary of that election.
116-26         SECTION 3.0608.  ELECTION OF PERMANENT DIRECTORS.  (a)  On
 117-1   the first Saturday in October of the second year after the year in
 117-2   which the district is authorized to be created at a confirmation
 117-3   election, an election shall be held in the district for the
 117-4   election of directors from county commissioners precincts one and
 117-5   three, each of whom serves a two-year term, and directors from
 117-6   county commissioners precincts two and four and the director at
 117-7   large, each of whom serves a four-year term.
 117-8         (b)  On the first Saturday in October of each subsequent
 117-9   second year following the election, the appropriate number of
117-10   directors shall be elected to the board, each of whom serves a
117-11   four-year term.
117-12         SECTION 3.0609.  LIMITATION ON TAXATION.  The district may
117-13   not impose an ad valorem tax at a rate that exceeds five cents on
117-14   the $100 valuation of taxable property in the district.
117-15         SECTION 3.0610.  EXPIRATION.  If the creation of the district
117-16   is not confirmed at a confirmation election held under Section
117-17   3.0607 of this part before September 1, 2003, this part expires on
117-18   that date.
117-19        PART 7.  KIMBLE COUNTY GROUNDWATER CONSERVATION DISTRICT
117-20         SECTION 3.0701.  CREATION.  (a)  A groundwater conservation
117-21   district, to be known as the Kimble County Groundwater Conservation
117-22   District, is created in Kimble County, subject to approval at a
117-23   confirmation election under this part.  The district is a
117-24   governmental agency and a body politic and corporate.
117-25         (b)  The district is created under and is essential to
117-26   accomplish the purposes of Section 59, Article XVI, Texas
 118-1   Constitution.
 118-2         SECTION 3.0702.  DEFINITION.  In this part, "district" means
 118-3   the Kimble County Groundwater Conservation District.
 118-4         SECTION 3.0703.  BOUNDARIES.  The boundaries of the district
 118-5   are coextensive with the boundaries of Kimble County, Texas,
 118-6   excluding that part of Kimble County that lies within the
 118-7   boundaries of the Hickory Underground Water District.
 118-8         SECTION 3.0704.  FINDING OF BENEFIT.  All of the land and
 118-9   other property included within the boundaries of the district will
118-10   be benefited by the works and projects that are to be accomplished
118-11   by the district under powers conferred by Section 59, Article XVI,
118-12   Texas Constitution.  The district is created to serve a public use
118-13   and benefit.
118-14         SECTION 3.0705.  GENERAL POWERS.  (a)  The district has all
118-15   of the rights, powers, privileges, authority, functions, and duties
118-16   provided by the general law of this state, including Chapter 36,
118-17   Water Code, applicable to groundwater conservation districts
118-18   created under Section 59, Article XVI, Texas Constitution.  This
118-19   part prevails over any provision of general law that is in conflict
118-20   or is inconsistent with this part.
118-21         (b)  Notwithstanding Subsection (a) of this section, the
118-22   following provisions prevail over a conflicting or inconsistent
118-23   provision of this part:
118-24               (1)  Sections 36.1071-36.108, Water Code;
118-25               (2)  Sections 36.159-36.161, Water Code; and
118-26               (3)  Subchapter I, Chapter 36, Water Code.
 119-1         (c)  Chapter 49, Water Code, does not apply to the district.
 119-2         SECTION 3.0706.  BOARD OF DIRECTORS.  (a)  The district is
 119-3   governed by a board of five directors.
 119-4         (b)  Temporary directors serve until initial directors are
 119-5   elected under this part.
 119-6         (c)  Initial directors serve until permanent directors are
 119-7   elected under this part.
 119-8         (d)  Permanent directors serve staggered four-year terms.
 119-9         (e)  Each director must qualify to serve as director in the
119-10   manner provided by Section 36.055, Water Code.
119-11         (f)  A director serves until the director's successor has
119-12   qualified.
119-13         SECTION 3.0707.  COMPENSATION OF DIRECTORS.  A director is
119-14   not entitled to fees of office but is entitled to reimbursement of
119-15   actual expenses reasonably and necessarily incurred while engaging
119-16   in activities on behalf of the district.
119-17         SECTION 3.0708.  TEMPORARY DIRECTORS.  (a)  The temporary
119-18   board of directors consists of five members appointed by the
119-19   Commissioners Court of Kimble County.
119-20         (b)  If a temporary director fails to qualify for office, the
119-21   Commissioners Court of Kimble County shall appoint a person to fill
119-22   the vacancy.
119-23         SECTION 3.0709.  METHOD OF ELECTING DIRECTORS: SINGLE-MEMBER
119-24   DISTRICTS.  (a)  The temporary directors shall draw five numbered,
119-25   single-member districts for electing directors.
119-26         (b)  For the conduct of an election under the following two
 120-1   sections of this part, the board shall provide for one director to
 120-2   be elected from each of the single-member districts.  A director
 120-3   elected from a single-member district represents the residents of
 120-4   that single-member district.
 120-5         (c)  To be qualified to be a candidate for or to serve as
 120-6   director, a person must be a registered voter in the single-member
 120-7   district that the person represents or seeks to represent.
 120-8         (d)  The initial or permanent directors may revise the
 120-9   districts as necessary or appropriate.  The board of directors
120-10   shall revise each single-member district after each federal
120-11   decennial census to reflect population changes.  At the first
120-12   election after the single-member districts are revised, a new
120-13   director shall be elected from each district.  The directors shall
120-14   draw lots to determine which two directors serve two-year terms and
120-15   which three directors serve four-year terms.
120-16         SECTION 3.0710.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
120-17   (a)  The temporary board of directors shall call and hold an
120-18   election to confirm establishment of the district and to elect
120-19   initial directors.
120-20         (b)  At the confirmation and initial directors election, the
120-21   temporary board of directors shall have placed on the ballot the
120-22   name of any candidate filing for an initial director's position and
120-23   blank spaces to write in the names of other persons.  A temporary
120-24   director who is qualified to be a candidate under the preceding
120-25   section of this part may file for an initial director's position.
120-26         (c)  Section 41.001(a), Election Code, does not apply to a
 121-1   confirmation and initial directors election held as provided by
 121-2   this section.
 121-3         (d)  Except as provided by this section, a confirmation and
 121-4   initial directors election must be conducted as provided by
 121-5   Sections 36.017(b)-(h), Water Code, and the Election Code.
 121-6         SECTION 3.0711.  ELECTION OF DIRECTORS.  (a)  On the first
 121-7   Saturday in May of the first even-numbered year after the year in
 121-8   which the district is authorized to be created at a confirmation
 121-9   election, an election shall be held in the district for the
121-10   election of three directors to serve four-year terms and two
121-11   directors to serve two-year terms.
121-12         (b)  On the first Saturday in May of each subsequent second
121-13   year following the election, the appropriate number of directors
121-14   shall be elected.
121-15         SECTION 3.0712.  TAX RATE.  The district may not levy a tax
121-16   to pay any part of bonds or notes issued by the district that
121-17   exceeds 20 cents on each $100 of assessed valuation.
121-18         SECTION 3.0713.  EFFECTIVE DATE; EXPIRATION DATE.  (a)  This
121-19   part takes effect September 1, 2001.
121-20         (b)  If the creation of the district is not confirmed at a
121-21   confirmation election held under this part before September 1,
121-22   2003, this part expires on that date.
121-23          PART 8.  RED SANDS GROUNDWATER CONSERVATION DISTRICT
121-24         SECTION 3.0801.  RATIFICATION OF CREATION.  The creation of
121-25   the Red Sands Groundwater Conservation District in Hidalgo County
121-26   by Chapter 1331, Acts of the 76th Legislature, Regular Session,
 122-1   1999, is ratified as required by Section 15(a) of that chapter,
 122-2   subject to approval at a confirmation election under Section 3.0808
 122-3   of this part.
 122-4         SECTION 3.0802.  DEFINITION.  In this part, "district" means
 122-5   the Red Sands Groundwater Conservation District.
 122-6         SECTION 3.0803.  BOUNDARIES.  The district includes all of
 122-7   the territory contained in the following described area:
 122-8   A 19,232 acre tract more or less out of San Salvador Del Tule Grant
 122-9   as recorded in Volume 10, Page 58 of the Hidalgo County, Texas map
122-10   records and out of the Santa Anita Grant as recorded in Volume 7,
122-11   Page 38 of the Hidalgo County, Texas map records.
122-12   Commencing at the Southeast Corner of this here in described
122-13   boundary tract, said point being the intersection of the centerline
122-14   of U.S. Highway 281 and the centerline of Farm to Market Road
122-15   number 490 (F.M. 490) (West Hargill Road) as shown in the map of
122-16   San Salvador Del Tule Grant as recorded in Volume 10, Page 58 of
122-17   the Hidalgo County map records.  Said point is also the point of
122-18   beginning.
122-19   Thence, Westerly along the center line of the F.M. 490, an
122-20   approximate distance of 18,400 feet to a point on the West line of
122-21   San Salvador Del Tule Grant, said point also being the intersection
122-22   of the centerline of F.M. 490 and the West line of the San Salvador
122-23   Del Tule Grant,
122-24   Thence, Northerly along the West line of the San Salvador Del Tule
122-25   Grant and the East line of the Santa Anita Grant at an approximate
122-26   distance of 21,300 feet to a point, said point being an inside
 123-1   corner of this herein described tract, and also being the Southeast
 123-2   corner of Redland Vineyards Subdivision as recorded in Volume 4,
 123-3   Page 51 of the Hidalgo County map records,
 123-4   Thence, Westerly along the South line of the Redland Vineyards
 123-5   Subdivision, an approximate distance of 4,238 feet to a point, said
 123-6   point being an outside corner of this herein described tract, said
 123-7   point also being the Southwest corner of the Redland Vineyard
 123-8   Subdivision,
 123-9   Thence, Northerly with the West line of Redland Vineyards
123-10   Subdivision, at approximately 4,590.50 feet past a point, said
123-11   point being the Northwest corner of Redland Vineyard Subdivision,
123-12   and the Southwest corner of Delbridge Subdivision as recorded in
123-13   Volume 5, Page 11, Hidalgo County map records, and continuing
123-14   Northerly along the West line of Delbridge Subdivision for an
123-15   approximate total distance of 6,646 feet to a point, said point
123-16   being an inside corner of this herein described tract, and also
123-17   being the Northwest corner of Delbridge Subdivision,
123-18   Thence, Westerly along the South line of a 196.37 acres tract,
123-19   known as the A.B. De Kock Tract, an approximate distance of 3,500
123-20   feet past the Southeast corner of share 4, out of the 8,374.70 acre
123-21   tract partition out of the Santa Anita Grant as recorded in Volume
123-22   7, Page 38, in the Hidalgo County map records and continuing
123-23   Westerly for an approximate total distance of 6,500 feet to a
123-24   point, said point being an outside corner of this herein described
123-25   tract and also being the Southwest corner of share 4,
123-26   Thence, Northerly along the West line of share 4, an approximate
 124-1   total distance of 19,143 feet to a point, said point being the
 124-2   Northwest corner of this herein described tracts and, the
 124-3   intersection of the West line of share 4 and the centerline of Farm
 124-4   to Market Road number 1017, (F.M. 1017)
 124-5   Thence, in a Southeasterly direction, with the Right-of-Way
 124-6   centerline of Farm to Market Road number 1017 (F.M. 1017) an
 124-7   approximate total distance of 27,800 feet to a point, said point
 124-8   being the Northeast corner of this herein described tract, and also
 124-9   being the intersection of the centerline of F.M. 1017 Right-of-Way
124-10   and the center line of the U.S. Highway 281 Right-Of-Way,
124-11   Thence, in a Southerly direction, with the centerline of U.S.
124-12   Highway 281 Right-Of-Way, an approximate distance of 7,500 feet
124-13   past Floral Road, and at approximate 21,700 feet past Red Gate Road
124-14   and at approximate 29,700 feet past Laguna Seca Road and for an
124-15   approximate total distance of 39,300 feet to the point of beginning
124-16   of this here in described tract, said tract contains 19,232 Acres,
124-17   More or Less.
124-18         SECTION 3.0804.  FINDINGS RELATIVE TO BOUNDARIES.  The
124-19   legislature finds that the boundaries and field notes of the
124-20   district form a closure.  A mistake in the field notes or in the
124-21   copying of the field notes in the legislative process does not
124-22   affect the organization, existence, or validity of the district,
124-23   the right of the district to levy and collect taxes, or the
124-24   legality or operation of the district or its governing body.
124-25         SECTION 3.0805.  GENERAL POWERS.  (a)  Except as provided by
124-26   this part, the district has all of the rights, powers, privileges,
 125-1   authority, functions, and duties provided by the general law of the
 125-2   state, including Chapter 36, Water Code, applicable to groundwater
 125-3   conservation districts created under Section 59, Article XVI, Texas
 125-4   Constitution.  This part prevails over any provision of general
 125-5   law, including Chapter 36, Water Code, or Chapter 1331, Acts of the
 125-6   76th Legislature, Regular Session, 1999, that is in conflict or
 125-7   inconsistent with this part.
 125-8         (b)  The rights, powers, privileges, authority, functions,
 125-9   and duties of the district are subject to the continuing right of
125-10   supervision of the state, to be exercised by and through the Texas
125-11   Natural Resource Conservation Commission.
125-12         SECTION 3.0806.  BOARD OF DIRECTORS.  (a)  The district is
125-13   governed by a board of five directors, each elected at large to one
125-14   of five numbered places.
125-15         (b)  To be eligible to serve as a director, an individual
125-16   must reside in the district.
125-17         (c)  Each director must qualify to serve as director in the
125-18   manner provided by Section 36.055, Water Code.
125-19         (d)  Permanent directors serve staggered three-year terms.
125-20         (e)  A director serves until the director's successor has
125-21   qualified.
125-22         (f)  A vacancy in the office of director shall be filled by
125-23   appointment of the board of directors until the next election of
125-24   directors, at which election a person shall be elected to fill the
125-25   position.  If the position is not scheduled to be filled at the
125-26   election, the person elected to fill the position serves only the
 126-1   remainder of the unexpired term.
 126-2         (g)  An appointed director who is qualified to serve as a
 126-3   director under Subsection (b) of this section is eligible to run
 126-4   for election to the board of directors.
 126-5         SECTION 3.0807.  TEMPORARY DIRECTORS.  (a)  The temporary
 126-6   board of directors is composed of:
 126-7               (1)  Lucas Hinojosa;
 126-8               (2)  Becky Guerra;
 126-9               (3)  Arcadio Guerra;
126-10               (4)  Elizabeth Ann Sweet; and
126-11               (5)  John Cozad.
126-12         (b)  The temporary directors are not required to meet the
126-13   eligibility requirements of permanent directors.
126-14         (c)  Temporary directors serve until permanent directors are
126-15   elected at the confirmation election under Section 3.0808 of this
126-16   part.
126-17         SECTION 3.0808.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
126-18   (a)  The temporary board of directors shall call and hold an
126-19   election to confirm establishment of the district and to elect
126-20   initial directors.
126-21         (b)  At the confirmation and initial directors election, the
126-22   temporary board of directors shall have placed on the ballot the
126-23   names of the candidates for each of the five numbered positions and
126-24   blank spaces to write in the names of other persons.  Names on the
126-25   ballot may include persons serving as temporary directors who
126-26   intend to run for an initial director position together with the
 127-1   name of any candidate filing for an initial director position.
 127-2         (c)  If a majority of the votes cast at the election are in
 127-3   favor of the creation of the district, the temporary board of
 127-4   directors shall declare the district created.  If a majority of the
 127-5   votes cast at the election are against the creation of the
 127-6   district, the temporary board of directors shall declare the
 127-7   district defeated.  The temporary board of directors shall file a
 127-8   copy of the election results with the Texas Natural Resource
 127-9   Conservation Commission.
127-10         (d)  If a majority of the votes cast at the election are
127-11   against the creation of the district, the temporary board of
127-12   directors may not call another election under this section before
127-13   the first anniversary of the date of the election.
127-14         (e)  If the creation of the district is confirmed at the
127-15   election, the temporary board of directors, at the time the vote is
127-16   canvassed, shall:
127-17               (1)  declare the qualified person who receives the most
127-18   votes for each position to be elected as the initial director for
127-19   that position; and
127-20               (2)  include the results of the initial directors
127-21   election in the district's election report to the Texas Natural
127-22   Resource Conservation Commission.
127-23         (f)  The initial directors shall draw lots to determine their
127-24   terms so that:
127-25               (1)  one director serves a one-year term that expires
127-26   on the anniversary of the date the initial directors were elected;
 128-1               (2)  two directors serve two-year terms that expire on
 128-2   the anniversary of the date the initial directors were elected; and
 128-3               (3)  two directors serve three-year terms that expire
 128-4   on the anniversary of the date the initial directors were elected.
 128-5         (g)  Section 41.001(a), Election Code, does not apply to a
 128-6   confirmation and initial directors election held as provided by
 128-7   this section.
 128-8         (h)  Except as provided by this section, a confirmation
 128-9   election must be conducted as provided by Sections 36.017(b)-(h),
128-10   Water Code, and the Election Code.
128-11         SECTION 3.0809.  ELECTION OF PERMANENT DIRECTORS.  Beginning
128-12   in the first year after the year in which the district is
128-13   authorized to be created at a confirmation election, the board of
128-14   directors shall call an election to be held in the district on the
128-15   first Saturday of the month in which the initial directors were
128-16   elected under Section 3.0808 of this part and every year after that
128-17   date to elect the appropriate number of directors to the board.
128-18         SECTION 3.0810.  ELIGIBLE DISTRICT VOTERS.  Any person
128-19   qualified to vote under the Election Code who resides in the
128-20   district is eligible to vote in district elections.
128-21         SECTION 3.0811.  TAXATION AUTHORITY.  (a)  The board of
128-22   directors shall impose taxes in accordance with Subchapter G,
128-23   Chapter 36, Water Code.
128-24         (b)  Notwithstanding Section 36.201, Water Code, the board of
128-25   directors may annually impose an ad valorem tax at a rate not to
128-26   exceed two cents on each $100 of assessed valuation unless a higher
 129-1   rate is approved by a majority of the voters of the district voting
 129-2   at an election called and held for that purpose.
 129-3         SECTION 3.0812.  TRANSPORTATION OF GROUNDWATER.  (a)  The
 129-4   board of directors may adopt rules under Section 36.122, Water
 129-5   Code, requiring a permit to transport district groundwater outside
 129-6   the district.  The board of directors shall authorize the
 129-7   transportation of groundwater for use outside the district if the
 129-8   board determines that the use is in the public interest.  The board
 129-9   of directors may:
129-10               (1)  designate uses of water that are in the public
129-11   interest; and
129-12               (2)  establish criteria for permits issued under the
129-13   rules.
129-14         (b)  Transportation projects for the use of groundwater
129-15   outside the district that began before September 1, 2001, may
129-16   continue without a permit if the use of groundwater is on land
129-17   contiguous to the district's boundaries and is for domestic or
129-18   livestock purposes.
129-19         SECTION 3.0813.  EXPIRATION.  If the creation of the district
129-20   is not confirmed at a confirmation election held under Section
129-21   3.0808 of this part before September 1, 2003, this part expires on
129-22   that date.
129-23           PART 9.  REFUGIO GROUNDWATER CONSERVATION DISTRICT
129-24         SECTION 3.0901.  RATIFICATION OF CREATION.  The creation of
129-25   the Refugio Groundwater Conservation District in Refugio County by
129-26   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
 130-1   is ratified as required by Section 15(a) of that chapter, subject
 130-2   to approval at a confirmation election under Section 3.0907 of this
 130-3   part.
 130-4         SECTION 3.0902.  DEFINITION.  In this part, "district" means
 130-5   the Refugio Groundwater Conservation District.
 130-6         SECTION 3.0903.  BOUNDARIES.  The boundaries of the district
 130-7   are coextensive with the boundaries of Refugio County.
 130-8         SECTION 3.0904.  GENERAL POWERS.  The district has all of the
 130-9   rights, powers, privileges, authority, functions, and duties
130-10   provided by the general law of this state, including Chapter 36,
130-11   Water Code, applicable to groundwater conservation districts
130-12   created under Section 59, Article XVI, Texas Constitution.  This
130-13   part prevails over any provision of general law, including Chapter
130-14   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
130-15   Regular Session, 1999, that is in conflict or inconsistent with
130-16   this part.
130-17         SECTION 3.0905.  BOARD OF DIRECTORS.  (a)  The district is
130-18   governed by a board of five directors.
130-19         (b)  Temporary directors serve until initial directors are
130-20   elected under Section 3.0907 of this part.
130-21         (c)  Initial directors serve until permanent directors are
130-22   elected under Section 3.0908 of this part.
130-23         (d)  Permanent directors serve staggered four-year terms.
130-24         (e)  Each director must qualify to serve as director in the
130-25   manner provided by Section 36.055, Water Code.
130-26         (f)  A director serves until the director's successor has
 131-1   qualified.
 131-2         (g)  If a director fails to qualify for office or if there is
 131-3   at any time a vacancy on the temporary board of directors, the
 131-4   commissioners court shall appoint a person to fill the vacancy.
 131-5         SECTION 3.0906.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
 131-6   PRECINCTS.  (a)  The directors of the district shall be elected
 131-7   according to the commissioners precinct method as provided by this
 131-8   section.
 131-9         (b)  One director shall be elected by the qualified voters of
131-10   the entire district, and one director shall be elected from each
131-11   county commissioners precinct by the qualified voters of that
131-12   precinct.
131-13         (c)  To be qualified to be a candidate for or to serve as
131-14   director at large, a person must be a registered voter in the
131-15   district.  To be a candidate for or to serve as director from a
131-16   county commissioners precinct, a person must be a registered voter
131-17   of that precinct.
131-18         (d)  A person shall indicate on the application for a place
131-19   on the ballot:
131-20               (1)  the precinct that the person seeks to represent;
131-21   or
131-22               (2)  that the person seeks to represent the district at
131-23   large.
131-24         (e)  When the boundaries of the commissioners precincts are
131-25   changed, each director in office on the effective date of the
131-26   change or elected to a term of office beginning on or after the
 132-1   effective date of the change serves in the precinct to which the
 132-2   director was elected for the entire term to which the director was
 132-3   elected, even though the change in boundaries places the person's
 132-4   residence outside the precinct for which the person was elected.
 132-5         SECTION 3.0907.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
 132-6   (a)  The temporary board of directors shall call and hold an
 132-7   election to confirm establishment of the district and to elect
 132-8   initial directors.
 132-9         (b)  At the confirmation and initial directors election, the
132-10   temporary board of directors shall have placed on the ballot the
132-11   name of any candidate filing for an initial director position and
132-12   blank spaces to write in the names of other persons.  A temporary
132-13   director who is qualified to be a candidate under Sections 3.0905
132-14   and 3.0906 of this part may file for an initial director position.
132-15         (c)  Section 41.001(a), Election Code, does not apply to a
132-16   confirmation and initial directors election held as provided by
132-17   this section.
132-18         (d)  Except as provided by this section, a confirmation and
132-19   initial directors election must be conducted as provided by
132-20   Sections 36.017(b)-(h), Water Code, and the Election Code.
132-21         SECTION 3.0908.  ELECTION OF DIRECTORS.  (a)  On the first
132-22   Saturday in May of the first even-numbered year after the year in
132-23   which the district is authorized to be created at a confirmation
132-24   election, an election shall be held in the district for the
132-25   election of three directors to serve four-year terms and two
132-26   directors to serve two-year terms.
 133-1         (b)  On the first Saturday in May of each subsequent second
 133-2   year following the election, the appropriate number of directors
 133-3   shall be elected.
 133-4         SECTION 3.0909.  EXPIRATION.  If the creation of the district
 133-5   is not confirmed at a confirmation election held under Section
 133-6   3.0907 of this part before September 1, 2003, the district is
 133-7   dissolved and this part expires on that date.
 133-8      PART 10.  SOUTHEAST TRINITY GROUNDWATER CONSERVATION DISTRICT
 133-9         SECTION 3.1001.  PURPOSE.  The purpose of this part is to
133-10   ratify the Southeast Trinity Groundwater Conservation District, a
133-11   locally controlled groundwater district, to protect, recharge, and
133-12   prevent the waste of groundwater and to control subsidence of water
133-13   from the groundwater reservoirs.
133-14         SECTION 3.1002.  RATIFICATION OF CREATION.  The creation of
133-15   the Southeast Trinity Groundwater Conservation District by Chapter
133-16   1331, Acts of the 76th Legislature, Regular Session, 1999, is
133-17   ratified as required by Section 15(a) of that Act, subject to a
133-18   confirmation election under Section 3.1008 of this part.
133-19         SECTION 3.1003.  DEFINITIONS.  In this part:
133-20               (1)  "Board" means the board of directors of the
133-21   district.
133-22               (2)  "Commission" means the Texas Natural Resource
133-23   Conservation Commission.
133-24               (3)  "District" means the Southeast Trinity Groundwater
133-25   Conservation District.
133-26         SECTION 3.1004.  BOUNDARIES.  The boundaries of the district
 134-1   are as follows:
 134-2         BEGINNING at the point of intersection of the Bexar County -
 134-3   Comal County - Kendall County line:
 134-4         THENCE following the meanders of the Cibolo Creek, the Bexar
 134-5   County - Comal County line in an Easterly direction to the point of
 134-6   intersection with latitude 29  40':
 134-7         THENCE along 29  40' in a Southeasterly direction to the
 134-8   point of intersection with Farm to Market Road 3009:
 134-9         THENCE with the centerline of Farm to Market Road 3009 in a
134-10   Southerly direction to the point of intersection with the
134-11   centerline of Schoenthal Road:
134-12         THENCE with the centerline of Schoenthal Road in a
134-13   Northeasterly direction to the point of intersection with the
134-14   centerline of Farm to Market Road 1863:
134-15         THENCE with the centerline of Farm to Market Road 1863 in an
134-16   Easterly direction to the point of intersection with the centerline
134-17   of Mission Valley Road:
134-18         THENCE with the centerline of Mission Valley Road in a
134-19   Northeasterly direction to the point of intersection with the
134-20   centerline of State Highway 46;
134-21         THENCE with the centerline of State Highway 46 in a
134-22   Northwesterly direction to the point of intersection with the
134-23   centerline of Hueco Springs Loop Road:
134-24         THENCE with the centerline of Hueco Springs Loop Road in a
134-25   Northeasterly then Easterly direction to the point of intersection
134-26   with the centerline of River Road:
 135-1         THENCE with the centerline of River Road in a Northeasterly
 135-2   direction to the point of intersection with the Guadalupe River at
 135-3   the First Crossing:
 135-4         THENCE following the meanders of the Guadalupe River in a
 135-5   Northerly direction to the point of intersection of the centerlines
 135-6   of the Guadalupe River and Deep Creek:
 135-7         (Note:  the next four paragraphs coincide with the Southern
 135-8   boundary of Comal County Voters Precinct 18)
 135-9         THENCE along the meanders of Deep Creek in a Northeasterly
135-10   direction to the point of intersection of the centerline of Deep
135-11   Creek and the South line of the G. F. Lawrence Survey No. 33,
135-12   Abstract No. 358:
135-13         THENCE with the South line of the G. F. Lawrence Survey No.
135-14   33, Abstract No. 358 in a Northeasterly, Southeasterly, and
135-15   Northeasterly direction to the point of intersection of the South
135-16   centerline of Farm to Market Road 306 being at approximately
135-17   Engineers Station 397+98.3:
135-18         THENCE with the centerline of Farm to Market Road 306 in a
135-19   Southeasterly direction to the point of intersection of the
135-20   centerlines of Farm to Market Road 306 and the William Pfeuffer
135-21   private ranch road:
135-22         THENCE with the approximate bearing N 69  E and approximate
135-23   distance 5,000 feet to an angle point in the Comal County - Hays
135-24   County Line:
135-25         THENCE with the Comal County - Hays County line in a
135-26   Northwesterly direction to the point of intersection of the Comal
 136-1   County - Hays County line with the Comal County - Blanco County
 136-2   line:
 136-3         THENCE with the Comal County - Blanco County line in a
 136-4   Southwesterly direction to the point of intersection of the Comal
 136-5   County - Blanco County - Kendall County line, continuing with the
 136-6   Comal County - Kendall County line in a Southwesterly direction to
 136-7   point of intersection of the Kendall County - Comal County - Bexar
 136-8   County line being the Point of Beginning.
 136-9         SECTION 3.1005.  FINDINGS RELATIVE TO BOUNDARIES.  The
136-10   legislature finds that the boundaries and field notes of the
136-11   district form a closure.  A mistake in the field notes or in
136-12   copying the field notes in the legislative process does not affect
136-13   the organization, existence, or validity of the district, the right
136-14   of the district to levy and collect taxes, or the legality or
136-15   operation of the district or its governing body.
136-16         SECTION 3.1006.  AUTHORITY OF DISTRICT.  (a)  Except as
136-17   provided by this section or otherwise by this part, the district
136-18   has the same permitting and general management powers as those
136-19   granted under Chapter 36, Water Code.
136-20         (b)  The district has no regulatory jurisdiction over the
136-21   Edwards Aquifer or any surface water supply.
136-22         (c)  The board by rule may impose reasonable fees, including
136-23   fees for groundwater transported out of the district, on each
136-24   groundwater well in the district that is not exempt from regulation
136-25   by the district, based on the amount of water withdrawn from the
136-26   well.  The fees may be assessed annually, based on the size of
 137-1   column pipe used in the wells, pump capacity, or actual,
 137-2   authorized, or anticipated pumpage, to pay the maintenance and
 137-3   operating expenses of the district's regulation of groundwater.
 137-4         (d)  Section 36.205(c), Water Code, does not apply to the
 137-5   district.
 137-6         (e)  The district may assess an ad valorem property tax not
 137-7   to exceed seven cents per $100 valuation for administrative,
 137-8   operation, and maintenance expenses if approved by a majority of
 137-9   the qualified voters voting in an election authorizing the tax.
137-10         (f)  Any district conservation fee paid by a retail public
137-11   utility to the district shall be:
137-12               (1)  collected by the retail public utility directly as
137-13   a regulatory fee from the customers of the utility and paid to the
137-14   district; and
137-15               (2)  shown as a separate line item on the customer's
137-16   bill.
137-17         (g)  Fees may not be assessed for groundwater withdrawn from
137-18   the Edwards Aquifer.
137-19         (h)  The district shall determine which classes of wells are
137-20   exempt from permitting requirements.
137-21         (i)  The district may not require a permit for:
137-22               (1)  the drilling of or producing from a well either
137-23   drilled, completed, or equipped so that it is capable of producing
137-24   less than 10,000 gallons of water per day; or
137-25               (2)  the drilling of or alteration of the size of a
137-26   well or to restrict the production of a well if the water produced
 138-1   or to be produced from the well is or will be used to supply the
 138-2   domestic needs of five or fewer households in which a person who is
 138-3   a member of each household is either the owner of the well, a
 138-4   person related to the owner or to a member of the owner's household
 138-5   within the second degree by consanguinity, or an employee of the
 138-6   owner.
 138-7         (j)  The district may construct according to, implement, and
 138-8   maintain best management practices in the district and may engage
 138-9   in and promote acceptance of best management practices through
138-10   education efforts sponsored by the district for the purposes of
138-11   water quality and water availability practices such as brush
138-12   management, recharge enhancement, water and silt detention and
138-13   retention structures, plugging of abandoned wells, and other
138-14   treatment measures for the conservation of groundwater resources.
138-15         SECTION 3.1007.  BOARD OF DIRECTORS.  (a)  The district is
138-16   governed by a board of five directors.
138-17         (b)  Temporary directors have been appointed by Comal County
138-18   Commissioners Court and shall serve until initial directors are
138-19   elected under Section 3.1008 of this part.
138-20         (c)  The temporary directors are:
138-21               (1)  Cal Perrine;
138-22               (2)  Ernest T. Lee;
138-23               (3)  Jill Sondeen;
138-24               (4)  Larry Hull; and
138-25               (5)  Stovy Bowlin.
138-26         (d)  Initial directors shall be elected at a confirmation
 139-1   election and serve until permanent directors are elected under
 139-2   Section 3.1009 of this part.
 139-3         (e)  Permanent directors serve staggered four-year terms.
 139-4         (f)  The directors shall be elected from four precincts, and
 139-5   one director will represent the district at large.  No more than
 139-6   two precincts may be in a single municipality.
 139-7         (g)  A member of the board must reside in and be a registered
 139-8   voter in the precinct from which the person is elected or appointed
 139-9   if representing a precinct or must reside and be registered to vote
139-10   in the district if representing the district at large.
139-11         (h)  Directors may serve consecutive terms.
139-12         (i)  In an election for board members, a write-in vote may
139-13   not be counted unless the name written in appears on the list of
139-14   write-in candidates.  A declaration of write-in candidacy must be
139-15   filed not later than 5 p.m. of the 45th day before election day.
139-16         (j)  Vacancies in the office of director are filled by
139-17   appointment of the board.  If the vacant office is not scheduled
139-18   for election within the next two years at the time of the
139-19   appointment, the board shall order an election for the unexpired
139-20   term to be held as part of the next regularly scheduled directors
139-21   election.  The appointed director's term ends on qualification of
139-22   the director elected at that election.
139-23         (k)  The district may not issue bonds before September 1,
139-24   2004.
139-25         SECTION 3.1008.  CONFIRMATION ELECTION AND ELECTION OF
139-26   INITIAL DIRECTORS.  (a)  As soon as practicable after September 1,
 140-1   2001, the temporary board of directors may set the date for, call,
 140-2   and hold an election:
 140-3               (1)  to confirm establishment of the district;
 140-4               (2)  to elect five initial directors; and
 140-5               (3)  to authorize the district to impose a tax.
 140-6         (b)  The election may be held on the first authorized
 140-7   election date after the United States Department of Justice has
 140-8   precleared this part.  The district shall contract with the county
 140-9   clerk of Comal County to conduct the election.
140-10         (c)  The elected initial directors shall draw lots to
140-11   determine their terms so that:
140-12               (1)  two of the initial directors serve two-year terms
140-13   that expire on the uniform election date in November of the second
140-14   year after the date the initial directors were elected; and
140-15               (2)  the remaining three initial directors serve
140-16   four-year terms that expire on the uniform election date in
140-17   November of the fourth year after the year in which the initial
140-18   directors were elected.
140-19         (d)  Section 41.001(a), Election Code, does not apply to a
140-20   confirmation and directors election held as provided by this
140-21   section.
140-22         (e)  Except as provided by this section, a confirmation and
140-23   directors election must be conducted as provided by Sections
140-24   36.017(b)-(h), Water Code, and the Election Code.
140-25         (f)  The Comal County Commissioners Court shall pay the
140-26   expenses of conducting the confirmation and initial directors
 141-1   election, subject to reimbursement from the district if the
 141-2   establishment of the district is confirmed or from available
 141-3   revenues, including funds allocated under Section 36.160, Water
 141-4   Code, if the establishment of the district is defeated.
 141-5         (g)  If the district is defeated, the temporary directors may
 141-6   call and hold subsequent elections to confirm establishment of the
 141-7   district.  A subsequent election may not be held earlier than the
 141-8   first anniversary of the date on which the previous election was
 141-9   held.  If the district has not been confirmed at an election held
141-10   under this section before the fourth anniversary of the effective
141-11   date of this part, the district is dissolved on that date, except
141-12   that any debts incurred shall be paid and the organization of the
141-13   district shall be maintained until all debts are paid.
141-14         SECTION 3.1009.  ELECTION OF PERMANENT DIRECTORS.  (a)  On
141-15   the uniform election date in November of the second year after the
141-16   year in which initial directors are elected, an election shall be
141-17   held in the district to elect two permanent directors for the
141-18   positions of the two initial directors serving two-year terms.
141-19         (b)  On the uniform election date in November of each
141-20   subsequent second year following the election held under Subsection
141-21   (a) of this section, an election shall be held to elect the
141-22   appropriate number of permanent directors to the board.
141-23         SECTION 3.1010.  COORDINATION WITH OTHER DISTRICTS.  The
141-24   district may coordinate activities with other groundwater districts
141-25   that regulate the Trinity Aquifer for the purposes of conjunctively
141-26   managing the common resource.
 142-1         SECTION 3.1011.  MODIFICATION OF DISTRICT.  The district may
 142-2   be modified only under Subchapter J, Chapter 36, Water Code, and by
 142-3   subsequent acts of the legislature.
 142-4         SECTION 3.1012.  STATUTORY INTERPRETATION.  Except as
 142-5   otherwise provided by this part, if there is a conflict between
 142-6   this part and Chapter 36, Water Code, or Chapter 1331, Acts of the
 142-7   76th Legislature, Regular Session, 1999, this part controls.
 142-8           PART 11.  TEXANA GROUNDWATER CONSERVATION DISTRICT
 142-9         SECTION 3.1101.  RATIFICATION OF CREATION.  The creation of
142-10   the Texana Groundwater Conservation District in Jackson County by
142-11   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
142-12   is ratified as required by Section 15(a) of that chapter, subject
142-13   to approval at a confirmation election under Section 3.1107 of this
142-14   part.
142-15         SECTION 3.1102.  DEFINITION.  In this part, "district" means
142-16   the Texana Groundwater Conservation District.
142-17         SECTION 3.1103.  BOUNDARIES.  The boundaries of the district
142-18   are coextensive with the boundaries of Jackson County.
142-19         SECTION 3.1104.  GENERAL POWERS.  The district has all of the
142-20   rights, powers, privileges, authority, functions, and duties
142-21   provided by the general law of the state, including Chapter 36,
142-22   Water Code, applicable to groundwater conservation districts
142-23   created under Section 59, Article XVI, Texas Constitution.  This
142-24   part prevails over any provision of general law, including Chapter
142-25   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
142-26   Regular Session, 1999, that is in conflict or inconsistent with
 143-1   this part.
 143-2         SECTION 3.1105.  BOARD OF DIRECTORS.  (a)  The district is
 143-3   governed by a board of seven directors.
 143-4         (b)  Temporary directors serve until initial directors are
 143-5   elected under Section 3.1107 of this part.
 143-6         (c)  Initial directors serve until permanent directors are
 143-7   elected under Section 3.1108 of this part.
 143-8         (d)  Permanent directors serve staggered four-year terms.
 143-9         (e)  Each director must qualify to serve as director in the
143-10   manner provided by Section 36.055, Water Code.
143-11         (f)  A director serves until the director's successor has
143-12   qualified.
143-13         (g)  If there is a vacancy on the board, the remaining
143-14   directors shall appoint a director to serve the remainder of the
143-15   term.
143-16         (h)  A director may not receive a salary or other
143-17   compensation for service as a director but may be reimbursed for
143-18   actual expenses of attending meetings at the rate in effect for
143-19   employees of Jackson County.
143-20         SECTION 3.1106.  METHOD OF ELECTING DIRECTORS:  COMMISSIONERS
143-21   PRECINCTS.  (a)  The directors of the district shall be elected
143-22   according to the commissioners precinct method as provided by this
143-23   section.
143-24         (b)  Three directors shall be elected by the qualified voters
143-25   of the entire district, and one director shall be elected from each
143-26   county commissioners precinct by the qualified voters of that
 144-1   precinct.
 144-2         (c)  To be qualified to be a candidate for or to serve as a
 144-3   director at large, a person must be a registered voter in the
 144-4   district.  To be a candidate for or to serve as director from a
 144-5   county commissioners precinct, a person must be a registered voter
 144-6   of that precinct.
 144-7         (d)  A person shall indicate on the application for a place
 144-8   on the ballot:
 144-9               (1)  the precinct that the person seeks to represent;
144-10   or
144-11               (2)  that the person seeks to represent the district at
144-12   large.
144-13         (e)  When the boundaries of the commissioners precincts are
144-14   changed, each director in office on the effective date of the
144-15   change or elected to a term of office beginning on or after the
144-16   effective date of the change serves in the precinct to which the
144-17   director was elected for the entire term to which the director was
144-18   elected, even though the change in boundaries places the person's
144-19   residence outside the precinct for which the person was elected.
144-20         SECTION 3.1107.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
144-21   (a)  The temporary board of directors shall call and hold an
144-22   election to confirm establishment of the district and to elect
144-23   initial directors.
144-24         (b)  At the confirmation and initial directors election, the
144-25   temporary board of directors shall have placed on the ballot the
144-26   name of any candidate filing for an initial director position and
 145-1   blank spaces to write in the names of other persons.  A temporary
 145-2   director who is qualified to be a candidate under Sections 3.1105
 145-3   and 3.1106 of this part may file for an initial director position.
 145-4         (c)  Section 41.001(a), Election Code, does not apply to a
 145-5   confirmation and initial directors election held as provided by
 145-6   this section.
 145-7         (d)  Except as provided by this section, a confirmation and
 145-8   initial directors election must be conducted as provided by
 145-9   Sections 36.017(b)-(h), Water Code, and the Election Code.
145-10         (e)  If the majority of the votes cast at an election held
145-11   under this section is against the confirmation of the district, the
145-12   temporary directors may not call another election under this
145-13   section before the first anniversary of that election.
145-14         SECTION 3.1108.  ELECTION OF DIRECTORS.  (a)  On the first
145-15   Saturday in May of the first even-numbered year after the year in
145-16   which the district is authorized to be created at a confirmation
145-17   election, an election shall be held in the district for the
145-18   election of two directors at large and two directors representing
145-19   precincts to serve four-year terms and one director at large and
145-20   two directors representing precincts to serve two-year terms.
145-21         (b)  On the first Saturday in May of each subsequent second
145-22   year following the election, the appropriate number of directors
145-23   shall be elected.
145-24         SECTION 3.1109.  LIMITATION ON TAXATION.  The district may
145-25   not levy or collect an ad valorem tax at a rate that exceeds two
145-26   cents on each $100 valuation of taxable property in the district.
 146-1         SECTION 3.1110.  CONTRACTS WITH GOVERNMENT ENTITIES.
 146-2   (a)  The district may contract with other government entities.
 146-3         (b)  The district may contract with other governmental
 146-4   entities, including river authorities located in the district, for
 146-5   the performance of any or all district functions.  A river
 146-6   authority with which the district contracts under this section may
 146-7   perform district functions as provided by the contract.
 146-8         PART 12.  TRI-COUNTY GROUNDWATER CONSERVATION DISTRICT
 146-9         SECTION 3.1201.  RATIFICATION OF CREATION.  The creation of
146-10   the Tri-County Groundwater Conservation District in Foard,
146-11   Hardeman, and Wilbarger counties by Chapter 1331, Acts of the 76th
146-12   Legislature, Regular Session, 1999, is ratified as required by
146-13   Section 15(a) of that chapter, subject to approval at a
146-14   confirmation election under Section 3.1207 of this part.
146-15         SECTION 3.1202.  DEFINITION.  In this part, "district" means
146-16   the Tri-County Groundwater Conservation District.
146-17         SECTION 3.1203.  BOUNDARIES.  The boundaries of the district
146-18   are coextensive with the boundaries of Foard, Hardeman, and
146-19   Wilbarger counties.
146-20         SECTION 3.1204.  GENERAL POWERS.  The district has all of the
146-21   rights, powers, privileges, authority, functions, and duties
146-22   provided by the general law of the state, including Chapter 36,
146-23   Water Code, applicable to groundwater conservation districts
146-24   created under Section 59, Article XVI, Texas Constitution.  This
146-25   part prevails over any provision of general law, including Chapter
146-26   36, Water Code, or Chapter 1331, Acts of the 76th Legislature,
 147-1   Regular Session, 1999, that is in conflict or inconsistent with
 147-2   this part.
 147-3         SECTION 3.1205.  BOARD OF DIRECTORS.  (a)  The district is
 147-4   governed by a board of six directors.  Two directors are appointed
 147-5   by the commissioners court of each county in the district.
 147-6         (b)  Each director must qualify to serve as director in the
 147-7   manner provided by Section 36.055, Water Code.
 147-8         (c)  Directors other than initial directors serve staggered
 147-9   four-year terms.
147-10         (d)  A director serves until the director's successor has
147-11   qualified.
147-12         (e)  If there is a vacancy on the board, the appropriate
147-13   commissioners court shall appoint a director to serve the remainder
147-14   of the term.
147-15         (f)  The appropriate commissioners court shall appoint a
147-16   director to succeed a director on or before the date the director's
147-17   term expires.
147-18         (g)  A director may not receive a salary or other
147-19   compensation for service as a director but may be reimbursed for
147-20   actual expenses of attending meetings.
147-21         SECTION 3.1206.  APPOINTMENT AND TERMS OF INITIAL DIRECTORS.
147-22   (a)  As soon as practicable after September 1, 2001, the
147-23   commissioners courts of Foard, Hardeman, and Wilbarger counties
147-24   shall each appoint two initial directors.
147-25         (b)  The initial directors serve terms as follows:
147-26               (1)  the two initial directors appointed by the Foard
 148-1   County Commissioners Court serve terms expiring February 1, 2002;
 148-2               (2)  the two initial directors appointed by the
 148-3   Hardeman County Commissioners Court serve terms expiring February
 148-4   1, 2004; and
 148-5               (3)  the two initial directors appointed by the
 148-6   Wilbarger County Commissioners Court serve terms expiring February
 148-7   1, 2006.
 148-8         SECTION 3.1207.  CONFIRMATION ELECTION.  (a)  The board of
 148-9   directors shall call and hold an election to confirm the
148-10   establishment of the district.
148-11         (b)  Section 41.001(a), Election Code, does not apply to a
148-12   confirmation election held as provided by this section.
148-13         (c)  Except as provided by this section, a confirmation
148-14   election must be conducted as provided by Sections 36.017(b)-(h),
148-15   Water Code, and the Election Code.
148-16         SECTION 3.1208.  TAXING AUTHORITY.  The district may levy and
148-17   collect an ad valorem tax in the district at a rate not to exceed
148-18   one cent on each $100 of assessed valuation.
148-19         SECTION 3.1209.  EXPIRATION.  If the creation of the district
148-20   is not confirmed at a confirmation election held under Section
148-21   3.1207 of this part before September 1, 2003, the district is
148-22   dissolved and this part expires on that date.
148-23        PART 13.  BRAZOS VALLEY GROUNDWATER CONSERVATION DISTRICT
148-24         SECTION 3.1301.  RATIFICATION OF CREATION.  The creation by
148-25   Chapter 1331, Acts of the 76th Legislature, Regular Session, 1999,
148-26   of the Brazos Valley Groundwater Conservation District in Robertson
 149-1   and Brazos counties is ratified as required by Section 15(a) of
 149-2   that Act, subject to approval at a confirmation election under
 149-3   Section 3.1312 of this part.
 149-4         SECTION 3.1302.  DEFINITION.  In this part, "district" means
 149-5   the Brazos Valley Groundwater Conservation District.
 149-6         SECTION 3.1303.  BOUNDARIES.  The boundaries of the district
 149-7   are coextensive with the boundaries of Robertson and Brazos
 149-8   counties, Texas.
 149-9         SECTION 3.1304.  GENERAL POWERS.  (a)  Except as otherwise
149-10   provided by this part, the district has all of the rights, powers,
149-11   privileges, authority, functions, and duties provided by the
149-12   general law of this state, including Chapter 36, Water Code,
149-13   applicable to groundwater conservation districts created under
149-14   Section 59, Article XVI, Texas Constitution.  This part prevails
149-15   over any provision of general law that is in conflict or
149-16   inconsistent with this part, including any provision of Chapter 36,
149-17   Water Code, or Chapter 1331, Acts of the 76th Legislature, Regular
149-18   Session, 1999.
149-19         (b)  The district does not have the authority granted by the
149-20   following provisions of Chapter 36, Water Code:
149-21               (1)  Section 36.105, relating to eminent domain; and
149-22               (2)  Sections 36.020 and 36.201-36.204, relating to
149-23   taxes.
149-24         SECTION 3.1305.  BONDS.  The district may issue bonds and
149-25   notes under Sections 36.171-36.181, Water Code, not to exceed
149-26   $500,000 of total indebtedness at any time.
 150-1         SECTION 3.1306.  FEES.  (a)  The board of directors of the
 150-2   district by rule may impose reasonable fees on each well for which
 150-3   a permit is issued by the district and which is not exempt from
 150-4   regulation by the district.  A fee may be based on the size of
 150-5   column pipe used by the well or on the actual, authorized, or
 150-6   anticipated amount of water to be withdrawn from the well.
 150-7         (b)  The initial fee shall be based on the amount of water to
 150-8   be withdrawn from the well.  The initial fee:
 150-9               (1)  may not exceed:
150-10                     (A)  $0.25 per acre-foot for water used for
150-11   irrigating agricultural crops or operating existing steam electric
150-12   stations; or
150-13                     (B)  $0.0425 per thousand gallons for water used
150-14   for any other purpose; and
150-15               (2)  may be increased at a cumulative rate not to
150-16   exceed three percent per year.
150-17         (c)  In addition to the fee authorized under Subsection (b)
150-18   of this section, the district may impose a reasonable fee or
150-19   surcharge for an export fee using one of the following methods:
150-20               (1)  a fee negotiated between the district and the
150-21   transporter; or
150-22               (2)  a combined production and export fee not to exceed
150-23   17 cents per thousand gallons for water used.
150-24         SECTION 3.1307.  GROUNDWATER WELLS UNDER JURISDICTION OF
150-25   RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
150-26   within the district under permits issued by the Railroad Commission
 151-1   of Texas are under the exclusive jurisdiction of the railroad
 151-2   commission and are exempt from regulation by the district.
 151-3         (b)  Groundwater produced in an amount authorized by a
 151-4   railroad commission permit may be used within or exported from the
 151-5   district without obtaining a permit from the district.
 151-6         (c)  To the extent groundwater production exceeds railroad
 151-7   commission authorization, the holder of the railroad commission
 151-8   permit must apply to the district for appropriate permits for the
 151-9   excess production and is subject to the applicable regulatory fees.
151-10         (d)  Groundwater produced from wells under the jurisdiction
151-11   of the railroad commission is generally exempt from water district
151-12   fees.  However, the district may impose either a pumping fee or an
151-13   export fee on groundwater produced from an otherwise exempt mine
151-14   well that is used for municipal purposes or by a public utility.
151-15   Any fee imposed by the district under this subsection may not
151-16   exceed the fee imposed on other groundwater producers in the
151-17   district.
151-18         SECTION 3.1308.  REGIONAL COOPERATION.  (a)  To provide for
151-19   regional continuity, the district shall:
151-20               (1)  participate in a regular annual coordination
151-21   meeting with other groundwater districts in its designated
151-22   management area and may hold coordination meetings at other times
151-23   as needed;
151-24               (2)  coordinate the collection of data with other
151-25   groundwater districts in its designated management area in such a
151-26   way as to achieve relative uniformity of data type and quality;
 152-1               (3)  coordinate efforts to monitor water quality with
 152-2   other groundwater districts in its designated management area,
 152-3   local governments, and state agencies;
 152-4               (4)  provide groundwater level data to other
 152-5   groundwater districts in its designated management area;
 152-6               (5)  investigate any groundwater and aquifer pollution
 152-7   with the intention of locating its source;
 152-8               (6)  notify other groundwater districts in its
 152-9   designated management area and all appropriate agencies of any
152-10   detected groundwater pollution;
152-11               (7)  annually provide to other groundwater districts in
152-12   its designated management area an inventory of water wells and an
152-13   estimate of groundwater production within the district; and
152-14               (8)  include other groundwater districts in its
152-15   designated management area on the mailing lists for district
152-16   newsletters, seminars, public education events, news articles, and
152-17   field days.
152-18         (b)  The district shall prepare a comprehensive management
152-19   plan as required by Section 36.1071, Water Code, covering that
152-20   district's respective territory.  On completion and certification
152-21   of the plan as required by Section 36.1072, Water Code, the
152-22   district shall forward a copy of the new or revised management plan
152-23   to the other districts in its designated management area.  The
152-24   district shall consider the management plans individually and shall
152-25   compare them to other management plans in the designated management
152-26   area.
 153-1               (1)  The district shall, by resolution, call for joint
 153-2   planning with the other districts in the designated management area
 153-3   to review and coordinate the management plans and accomplishments
 153-4   for the designated management area.  In reviewing and coordinating
 153-5   the management plans, the boards shall consider:
 153-6                     (A)  the goals of each management plan and its
 153-7   impact on planning throughout the management area;
 153-8                     (B)  the groundwater management standards of each
 153-9   district describing the desired condition of the groundwater source
153-10   over time as indicated by indices of quantity of water in the
153-11   source, quality of water produced from the source, springflows, or
153-12   subsidence of the land surface;
153-13                     (C)  the groundwater withdrawal rates adopted by
153-14   each district and the effectiveness of those rates in achieving the
153-15   groundwater management standard of the district;
153-16                     (D)  the effectiveness of the measures
153-17   established by each management plan for conserving and protecting
153-18   groundwater and preventing waste, and the effectiveness of these
153-19   measures in the management area generally; and
153-20                     (E)  any other matters that the boards consider
153-21   relevant to the protection and conservation of groundwater and the
153-22   prevention of waste in the management area.
153-23               (2)  In the management plan the district may establish
153-24   and coordinate with the other districts within the designated
153-25   management area an annual total groundwater withdrawal limit and
153-26   equitable allocation as determined from an evaluation of the
 154-1   overall scientific data of the groundwater resources in the region,
 154-2   including the Texas Water Development Board's groundwater
 154-3   availability model.  The determination of sustainable groundwater
 154-4   withdrawal shall be reviewed at least every five years.
 154-5               (3)  Each district participating in the joint planning
 154-6   process initiated under this subsection shall ensure that the
 154-7   groundwater management standards adopted by the district are
 154-8   adequate to protect the groundwater within the area of each
 154-9   district and are not incompatible with the groundwater management
154-10   standards adopted by the other districts in the management area.
154-11               (4)  If a joint meeting of the boards of directors is
154-12   called, the meeting must be held in accordance with Chapter 551,
154-13   Government Code.  Notice of the meeting shall be given in
154-14   accordance with the requirements for notice of district board of
154-15   directors meetings under that chapter.  In addition, notice of the
154-16   meeting shall be published not later than the 30th day before the
154-17   date of the scheduled meeting in a newspaper with general
154-18   circulation in each county in the management area.
154-19               (5)  A district in the management area may file with
154-20   good cause a petition with the Texas Natural Resource Conservation
154-21   Commission requesting an inquiry if the petitioner district adopted
154-22   a resolution calling for joint planning and the other district or
154-23   districts refused to join in the planning process or the process
154-24   failed to result in adequate planning, and the petition provides
154-25   evidence that:
154-26                     (A)  another district in the management area has
 155-1   failed to adopt rules;
 155-2                     (B)  the groundwater in the management area is
 155-3   not adequately protected by the rules adopted by another district;
 155-4   or
 155-5                     (C)  the groundwater in the management area is
 155-6   not adequately protected due to the failure of another district to
 155-7   enforce substantial compliance with its rules.
 155-8               (6)  The district may contract to jointly conduct
 155-9   studies or research, or to construct projects, under terms and
155-10   conditions that the districts consider beneficial with districts
155-11   located within the same management area or in adjacent management
155-12   areas.  These joint efforts may include studies of groundwater
155-13   availability and quality, aquifer modeling, and the interaction of
155-14   groundwater and surface water; educational programs; the purchase
155-15   and sharing of equipment; and the implementation of projects to
155-16   make groundwater available, including aquifer recharge, brush
155-17   control, weather modification, desalination, regionalization, and
155-18   treatment or conveyance facilities.  The districts may contract
155-19   under their existing authorizations including those of Chapter 791,
155-20   Government Code, if their contracting authority is not limited by
155-21   Sections 791.011(c)(2) and (d)(3) and Section 791.014, Government
155-22   Code.
155-23         (c)  The district shall determine biennially, using the
155-24   overall available scientific data of groundwater resources in the
155-25   Central Carrizo-Wilcox area, whether pumping within the district or
155-26   an adjacent district is unreasonably affecting groundwater wells.
 156-1   The district, in agreement with other districts within the
 156-2   designated management area, may adopt mitigation measures in
 156-3   response to such unreasonable adverse effects only if the measures
 156-4   are based on a scientific determination made.
 156-5         (d)  The district may assist in the mediation between
 156-6   landowners regarding the mitigation of the loss of existing
 156-7   groundwater supply of exempt domestic and livestock users due to
 156-8   the groundwater pumping of others in adjoining districts.
 156-9         SECTION 3.1309.  BOARD OF DIRECTORS.  (a)  The district is
156-10   governed by a board of eight directors.
156-11         (b)  Initial directors serve until permanent directors are
156-12   appointed under Section 3.1310 of this part and qualified as
156-13   required by Subsection (d) of this section.
156-14         (c)  Permanent directors serve four-year staggered terms.
156-15         (d)  Each director must qualify to serve as a director in the
156-16   manner provided by Section 36.055, Water Code.
156-17         (e)  A director serves until the director's successor has
156-18   qualified.
156-19         (f)  A director may serve consecutive terms.
156-20         (g)  If there is a vacancy on the board, the governing body
156-21   of the entity that appointed the director who vacated the office
156-22   shall appoint a director to serve the remainder of the term.
156-23         (h)  Directors are not entitled to receive compensation for
156-24   serving as a director but may be reimbursed for actual, reasonable
156-25   expenses incurred in the discharge of official duties.
156-26         (i)  A majority vote of a quorum is required for board
 157-1   action.  If there is a tie vote, the proposed action fails.
 157-2         SECTION 3.1310.  APPOINTMENT OF DIRECTORS.  (a)  The
 157-3   Robertson County Commissioners Court shall appoint four directors,
 157-4   of whom:
 157-5               (1)  one must represent municipal interests in the
 157-6   county;
 157-7               (2)  one must represent agricultural interests in the
 157-8   county;
 157-9               (3)  one must represent rural water suppliers'
157-10   interests in the county; and
157-11               (4)  one must represent industrial interests in the
157-12   county.
157-13         (b)  The Brazos County Commissioners Court shall appoint two
157-14   directors, of whom:
157-15               (1)  one must represent rural water suppliers'
157-16   interests in the county; and
157-17               (2)  one must represent agricultural interests in the
157-18   county.
157-19         (c)  The governing body of the City of Bryan, with the
157-20   approval of the Brazos County Commissioners Court, shall appoint
157-21   one director.
157-22         (d)  The governing body of the City of College Station, with
157-23   the approval of the Brazos County Commissioners Court, shall
157-24   appoint one director.
157-25         (e)  Each of the governing bodies authorized by this section
157-26   to make an appointment shall appoint the appropriate number of
 158-1   initial directors as soon as practicable following the effective
 158-2   date of this Act, but not later than the 45th day after the
 158-3   effective date of this Act.
 158-4         (f)  The four initial directors from Robertson County shall
 158-5   draw lots to determine their terms.  Two initial directors from
 158-6   Robertson County and the two initial directors from Brazos County
 158-7   serve terms that expire on January 1 of the second year following
 158-8   the confirmation of the district at an election held under Section
 158-9   3.1312 of this part.  The remaining four initial directors serve
158-10   terms that expire on January 1 of the fourth year following the
158-11   confirmation of the district.  On January 1 of the second year
158-12   following confirmation of the district and every two years after
158-13   that date, the appropriate governing body shall appoint the
158-14   appropriate number of permanent directors.
158-15         SECTION 3.1311.  ORGANIZATIONAL MEETING.  As soon as
158-16   practicable after all the initial directors have been appointed and
158-17   have qualified as provided in this part, a majority of the
158-18   directors shall convene the organizational meeting of the district
158-19   at a location within the district agreeable to a majority of the
158-20   directors.  If no location can be agreed on, the organizational
158-21   meeting of the directors shall be at the Robertson County
158-22   Courthouse.
158-23         SECTION 3.1312.  CONFIRMATION ELECTION.  (a)  The initial
158-24   board of directors shall call and hold an election on the same date
158-25   in each county within the district to confirm the creation of the
158-26   district.
 159-1         (b)  Except as provided by this section, a confirmation
 159-2   election must be conducted as provided by Sections 36.017, 36.018,
 159-3   and 36.019, Water Code, and Section 41.001, Election Code.
 159-4         (c)  Confirmation of the district requires a vote in favor of
 159-5   confirmation by a majority of the qualified voters voting in the
 159-6   election.
 159-7         (d)  The district is dissolved and this part expires on
 159-8   August 31, 2003, unless the voters confirm the creation of the
 159-9   district before that date.
159-10      PART 14.  POST OAK SAVANNAH GROUNDWATER CONSERVATION DISTRICT
159-11         SECTION 3.1401.  CREATION.  (a)  A groundwater conservation
159-12   district, to be known as the Post Oak Savannah Groundwater
159-13   Conservation District, is created in Milam and Burleson counties,
159-14   subject to approval at a confirmation election under Section 3.1412
159-15   of this part.  The district is a governmental agency and a body
159-16   politic and corporate.
159-17         (b)  The district is created under and is essential to
159-18   accomplish the purposes of Section 59, Article XVI, Texas
159-19   Constitution.
159-20         SECTION 3.1402.  DEFINITION.  In this part, "district" means
159-21   the Post Oak Savannah Groundwater Conservation District.
159-22         SECTION 3.1403.  BOUNDARIES.  The boundaries of the district
159-23   are coextensive with the boundaries of Milam and Burleson counties.
159-24         SECTION 3.1404.  FINDING OF BENEFIT.  All of the land and
159-25   other property included within the boundaries of the district will
159-26   be benefited by the works and projects that are to be accomplished
 160-1   by the district under powers conferred by Section 59, Article XVI,
 160-2   Texas Constitution.  The district is created to serve a public use
 160-3   and benefit.
 160-4         SECTION 3.1405.  GENERAL POWERS.  (a)  Except as otherwise
 160-5   provided by this part, the district has all of the rights, powers,
 160-6   privileges, authority, functions, and duties provided by the
 160-7   general law of this state, including Chapter 36, Water Code,
 160-8   applicable to groundwater conservation districts created under
 160-9   Section 59, Article XVI, Texas Constitution.  This part prevails
160-10   over any provision of general law that is in conflict or
160-11   inconsistent with this part, including any provision of Chapter 36,
160-12   Water Code.
160-13         (b)  The district does not have the authority granted by the
160-14   following provisions of Chapter 36, Water Code:
160-15               (1)  Section 36.105, relating to eminent domain; and
160-16               (2)  Sections 36.020 and 36.201-36.204, relating to
160-17   taxes.
160-18         SECTION 3.1406.  FEES.  (a)  The board of directors of the
160-19   district by rule may impose reasonable fees on each well for which
160-20   a permit is issued by the district and which is not exempt from
160-21   regulation by the district.  A fee may be based on the size of
160-22   column pipe used by the well or on the actual, authorized, or
160-23   anticipated amount of water to be withdrawn from the well.
160-24         (b)  Fees may not exceed:
160-25               (1)  one dollar per acre-foot for water used for
160-26   irrigating agricultural crops; or
 161-1               (2)  17 cents per thousand gallons for water used for
 161-2   any other purpose.
 161-3         (c)  In addition to the fee authorized under Subsection (b)
 161-4   of this section, the district may impose a reasonable fee or
 161-5   surcharge for an export fee using one of the following methods:
 161-6               (1)  a fee negotiated between the district and the
 161-7   transporter; or
 161-8               (2)  a combined production and export fee not to exceed
 161-9   17 cents per thousand gallons for water used.
161-10         SECTION 3.1407.  GROUNDWATER WELLS UNDER JURISDICTION OF
161-11   RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
161-12   within the district under permits issued by the Railroad Commission
161-13   of Texas are under the exclusive jurisdiction of the railroad
161-14   commission and are exempt from regulation by the district.
161-15         (b)  Groundwater produced in an amount authorized by a
161-16   Railroad Commission of Texas permit may be used within or exported
161-17   from the district without obtaining a permit from the district.
161-18         (c)  To the extent groundwater production exceeds Railroad
161-19   Commission of Texas authorization, the holder of the railroad
161-20   commission permit must apply to the district for appropriate
161-21   permits for the excess production and is subject to the applicable
161-22   regulatory fees.
161-23         (d)  Groundwater produced from wells under the jurisdiction
161-24   of the Railroad Commission of Texas is generally exempt from water
161-25   district fees.  However, the district may impose either a pumping
161-26   fee or an export fee on groundwater produced from an otherwise
 162-1   exempt mine well that is used for municipal purposes or by a public
 162-2   utility.  Any fee imposed by the district under this subsection may
 162-3   not exceed the fee imposed on other groundwater producers in the
 162-4   district.
 162-5         SECTION 3.1408.  REGIONAL COOPERATION.  (a)  To provide for
 162-6   regional continuity, the district shall:
 162-7               (1)  participate in a regular annual coordination
 162-8   meeting with other groundwater districts in its designated
 162-9   management area and may hold coordination meetings at other times
162-10   as needed;
162-11               (2)  coordinate the collection of data with other
162-12   groundwater districts in its designated management area in such a
162-13   way as to achieve relative uniformity of data type and quality;
162-14               (3)  coordinate efforts to monitor water quality with
162-15   other groundwater districts in its designated management area,
162-16   local governments, and state agencies;
162-17               (4)  provide groundwater level data to other
162-18   groundwater districts in its designated management area;
162-19               (5)  investigate any groundwater and aquifer pollution
162-20   with the intention of locating its source;
162-21               (6)  notify other groundwater districts in its
162-22   designated management area and all appropriate agencies of any
162-23   detected groundwater pollution;
162-24               (7)  annually provide to other groundwater districts in
162-25   its designated management area an inventory of water wells and an
162-26   estimate of groundwater production within the district; and
 163-1               (8)  include other groundwater districts in its
 163-2   designated management area on the mailing lists for district
 163-3   newsletters, seminars, public education events, news articles, and
 163-4   field days.
 163-5         (b)  The district shall prepare a comprehensive management
 163-6   plan as required by Section 36.1071, Water Code, covering that
 163-7   district's respective territory.  On completion and certification
 163-8   of the plan as required by Section 36.1072, Water Code, the
 163-9   district shall forward a copy of the new or revised management plan
163-10   to the other districts in its designated management area.  The
163-11   district shall consider the management plans individually and shall
163-12   compare them to other management plans in the designated management
163-13   area.
163-14               (1)  The district shall, by resolution, call for joint
163-15   planning with the other districts in the designated management area
163-16   to review and coordinate the management plans and accomplishments
163-17   for the designated management area.  In reviewing and coordinating
163-18   the management plans, the boards shall consider:
163-19                     (A)  the goals of each management plan and its
163-20   impact on planning throughout the management area;
163-21                     (B)  the groundwater management standards of each
163-22   district describing the desired condition of the groundwater source
163-23   over time as indicated by indices of quantity of water in the
163-24   source, quality of water produced from the source, springflows, or
163-25   subsidence of the land surface;
163-26                     (C)  the groundwater withdrawal rates adopted by
 164-1   each district and the effectiveness of those rates in achieving the
 164-2   groundwater management standard of the district;
 164-3                     (D)  the effectiveness of the measures
 164-4   established by each management plan for conserving and protecting
 164-5   groundwater and preventing waste, and the effectiveness of these
 164-6   measures in the management area generally; and
 164-7                     (E)  any other matters that the boards consider
 164-8   relevant to the protection and conservation of groundwater and the
 164-9   prevention of waste in the management area.
164-10               (2)  In the management plan the district may establish
164-11   and coordinate with the other districts within the designated
164-12   management area an annual total groundwater withdrawal limit and
164-13   equitable allocation as determined from an evaluation of the
164-14   overall scientific data of the groundwater resources in the region,
164-15   including the Texas Water Development Board's groundwater
164-16   availability model.  The determination of sustainable groundwater
164-17   withdrawal shall be reviewed at least every five years.
164-18               (3)  Each district participating in the joint planning
164-19   process initiated under this subsection shall ensure that the
164-20   groundwater management standards adopted by the district are
164-21   adequate to protect the groundwater within the area of each
164-22   district and are not incompatible with the groundwater management
164-23   standards adopted by the other districts in the management area.
164-24               (4)  If a joint meeting of the boards of directors is
164-25   called, the meeting must be held in accordance with Chapter 551,
164-26   Government Code.  Notice of the meeting shall be given in
 165-1   accordance with the requirements for notice of district board of
 165-2   directors meetings under that chapter.  In addition, notice of the
 165-3   meeting shall be published not later than the 30th day before the
 165-4   date of the scheduled meeting in a newspaper with general
 165-5   circulation in each county in the management area.
 165-6               (5)  A district in the management area may file with
 165-7   good cause a petition with the Texas Natural Resource Conservation
 165-8   Commission requesting an inquiry if the petitioner district adopted
 165-9   a resolution calling for joint planning and the other district or
165-10   districts refused to join in the planning process or the process
165-11   failed to result in adequate planning, and the petition provides
165-12   evidence that:
165-13                     (A)  another district in the management area has
165-14   failed to adopt rules;
165-15                     (B)  the groundwater in the management area is
165-16   not adequately protected by the rules adopted by another district;
165-17   or
165-18                     (C)  the groundwater in the management area is
165-19   not adequately protected due to the failure of another district to
165-20   enforce substantial compliance with its rules.
165-21               (6)  The district may contract to jointly conduct
165-22   studies or research, or to construct projects, under terms and
165-23   conditions that the districts consider beneficial with districts
165-24   located within the same management area or in adjacent management
165-25   areas.  These joint efforts may include studies of groundwater
165-26   availability and quality, aquifer modeling, and the interaction of
 166-1   groundwater and surface water; educational programs; the purchase
 166-2   and sharing of equipment; and the implementation of projects to
 166-3   make groundwater available, including aquifer recharge, brush
 166-4   control, weather modification, desalination, regionalization, and
 166-5   treatment or conveyance facilities.  The districts may contract
 166-6   under their existing authorizations including those of Chapter 791,
 166-7   Government Code, if their contracting authority is not limited by
 166-8   Sections 791.011(c)(2) and (d)(3) and Section 791.014, Government
 166-9   Code.
166-10         (c)  The district shall determine biennially, using the
166-11   overall available scientific data of groundwater resources in the
166-12   Central Carrizo-Wilcox area, whether pumping within the district or
166-13   an adjacent district is unreasonably affecting groundwater wells.
166-14   The district, in agreement with other districts within the
166-15   designated management area, may adopt mitigation measures in
166-16   response to such unreasonable adverse effects only if the measures
166-17   are based on a scientific determination made.
166-18         (d)  The district may assist in the mediation between
166-19   landowners regarding the mitigation of the loss of existing
166-20   groundwater supply of exempt domestic and livestock users due to
166-21   the groundwater pumping of others in adjoining districts.
166-22         SECTION 3.1409.  BOARD OF DIRECTORS.  (a)  The district is
166-23   governed by a board of 10 directors.
166-24         (b)  Initial directors serve until permanent directors are
166-25   appointed under Section 3.1410 of this part and qualified as
166-26   required by Subsection (d) of this section.
 167-1         (c)  Permanent directors serve four-year staggered terms.
 167-2         (d)  Each director must qualify to serve as a director in the
 167-3   manner provided by Section 36.055, Water Code.
 167-4         (e)  A director serves until the director's successor has
 167-5   qualified.
 167-6         (f)  A director may serve consecutive terms.
 167-7         (g)  If there is a vacancy on the board, the governing body
 167-8   of the entity that appointed the director who vacated the office
 167-9   shall appoint a director to serve the remainder of the term.
167-10         (h)  Directors are not entitled to receive compensation for
167-11   serving as a director but may be reimbursed for actual, reasonable
167-12   expenses incurred in the discharge of official duties.
167-13         (i)  A quorum exists when at least two-thirds of the board
167-14   members are present.  A majority vote of a quorum is required for
167-15   board action.  If there is a tie vote, the proposed action fails.
167-16         SECTION 3.1410.  APPOINTMENT OF DIRECTORS.  (a)  The Milam
167-17   County Commissioners Court shall appoint five directors, of whom:
167-18               (1)  one must represent municipal interests in the
167-19   county;
167-20               (2)  one must represent agricultural interests in the
167-21   county;
167-22               (3)  one must represent rural water suppliers'
167-23   interests in the county;
167-24               (4)  one must represent industrial interests in the
167-25   county; and
167-26               (5)  one must represent the interests of the county at
 168-1   large.
 168-2         (b)  The Burleson County Commissioners Court shall appoint
 168-3   five directors, of whom:
 168-4               (1)  one must represent municipal interests in the
 168-5   county;
 168-6               (2)  one must represent agricultural interests in the
 168-7   county;
 168-8               (3)  one must represent rural water suppliers'
 168-9   interests in the county;
168-10               (4)  one must represent industrial interests in the
168-11   county; and
168-12               (5)  one must represent the interests of the county at
168-13   large.
168-14         (c)  Each of the governing bodies authorized by this section
168-15   to make an appointment shall appoint the appropriate number of
168-16   initial directors as soon as practicable following the effective
168-17   date of this Act, but not later than the 45th day after the
168-18   effective date of this Act.
168-19         (d)  The initial directors shall draw lots to determine their
168-20   terms.  Two initial directors from Milam County and two initial
168-21   directors from Burleson County serve terms that expire on January 1
168-22   of the second year following the confirmation of the district at an
168-23   election held under Section 3.1412 of this part.  The remaining six
168-24   initial directors serve terms that expire on January 1 of the
168-25   fourth year following the confirmation of the district.  On January
168-26   1 of the second year following confirmation of the district and
 169-1   every two years after that date, the appropriate commissioners
 169-2   court shall appoint the appropriate number of permanent directors.
 169-3         SECTION 3.1411.  ORGANIZATIONAL MEETING.  As soon as
 169-4   practicable after all the initial directors have been appointed and
 169-5   have qualified as provided in this part, a majority of the
 169-6   directors shall convene the organizational meeting of the district
 169-7   at a location within the district agreeable to a majority of the
 169-8   directors.  If no location can be agreed on, the organizational
 169-9   meeting of the directors shall be at the Milam County Courthouse.
169-10         SECTION 3.1412.  CONFIRMATION ELECTION.  (a)  The initial
169-11   board of directors shall call and hold an election on the same date
169-12   in each county within the district to confirm the creation of the
169-13   district.
169-14         (b)  Except as provided by this section, a confirmation
169-15   election must be conducted as provided by Sections 36.017, 36.018,
169-16   and 36.019, Water Code, and Section 41.001, Election Code.
169-17         (c)  If the majority of qualified voters in a county who vote
169-18   in the election vote to confirm the creation of the district, that
169-19   county is included in the district.
169-20         (d)  The district is dissolved and this part expires on
169-21   August 31, 2003, unless the voters confirm the creation of the
169-22   district before that date.
169-23       PART 15.  MID-EAST TEXAS GROUNDWATER CONSERVATION DISTRICT
169-24         SECTION 3.1501.  CREATION.  (a)  A groundwater conservation
169-25   district, to be known as the Mid-East Texas Groundwater
169-26   Conservation District, is created in Leon, Madison, and Freestone
 170-1   counties, subject to approval at a confirmation election under
 170-2   Section 3.1512 of this part.  The district is a governmental agency
 170-3   and a body politic and corporate.
 170-4         (b)  The district is created under and is essential to
 170-5   accomplish the purposes of Section 59, Article XVI, Texas
 170-6   Constitution.
 170-7         SECTION 3.1502.  DEFINITION.  In this part, "district" means
 170-8   the Mid-East Texas Groundwater Conservation District.
 170-9         SECTION 3.1503.  BOUNDARIES.  The boundaries of the district
170-10   are coextensive with the boundaries of Leon, Madison, and Freestone
170-11   counties.
170-12         SECTION 3.1504.  FINDING OF BENEFIT.  All of the land and
170-13   other property included within the boundaries of the district will
170-14   be benefited by the works and projects that are to be accomplished
170-15   by the district under powers conferred by Section 59, Article XVI,
170-16   Texas Constitution.  The district is created to serve a public use
170-17   and benefit.
170-18         SECTION 3.1505.  GENERAL POWERS.  (a)  Except as otherwise
170-19   provided by this part, the district has all of the rights, powers,
170-20   privileges, authority, functions, and duties provided by the
170-21   general law of this state, including Chapter 36, Water Code,
170-22   applicable to groundwater conservation districts created under
170-23   Section 59, Article XVI, Texas Constitution.  This part prevails
170-24   over any provision of general law that is in conflict or
170-25   inconsistent with this part, including any provision of Chapter 36,
170-26   Water Code.
 171-1         (b)  The district does not have the authority granted by the
 171-2   following provisions of Chapter 36, Water Code:
 171-3               (1)  Section 36.105, relating to eminent domain; and
 171-4               (2)  Sections 36.020 and 36.201-36.204, relating to
 171-5   taxes.
 171-6         SECTION 3.1506.  FEES.  (a)  The board of directors of the
 171-7   district by rule may impose reasonable fees on each well for which
 171-8   a permit is issued by the district and which is not exempt from
 171-9   regulation by the district.  A fee may be based on the size of
171-10   column pipe used by the well or on the actual, authorized, or
171-11   anticipated amount of water to be withdrawn from the well.
171-12         (b)  Fees may not exceed:
171-13               (1)  one dollar per acre-foot for water used for
171-14   irrigating agricultural crops; or
171-15               (2)  17 cents per thousand gallons for water used for
171-16   any other purpose.
171-17         (c)  In addition to the fee authorized under Subsection (b)
171-18   of this section, the district may impose a reasonable fee or
171-19   surcharge for an export fee using one of the following methods:
171-20               (1)  a fee negotiated between the district and the
171-21   transporter; or
171-22               (2)  a combined production and export fee not to exceed
171-23   17 cents per thousand gallons for water used.
171-24         SECTION 3.1507.  GROUNDWATER WELLS UNDER JURISDICTION OF
171-25   RAILROAD COMMISSION.  (a)  Groundwater wells drilled or operated
171-26   within the district under permits issued by the Railroad Commission
 172-1   of Texas are under the exclusive jurisdiction of the railroad
 172-2   commission and are exempt from regulation by the district.
 172-3         (b)  Groundwater produced in an amount authorized by a
 172-4   Railroad Commission of Texas permit may be used within or exported
 172-5   from the district without obtaining a permit from the district.
 172-6         (c)  To the extent groundwater production exceeds Railroad
 172-7   Commission of Texas authorization, the holder of the railroad
 172-8   commission permit must apply to the district for appropriate
 172-9   permits for the excess production and is subject to the applicable
172-10   regulatory fees.
172-11         (d)  Groundwater produced from wells under the jurisdiction
172-12   of the Railroad Commission of Texas is generally exempt from water
172-13   district fees.  However, the district may impose either a pumping
172-14   fee or an export fee on groundwater produced from an otherwise
172-15   exempt mine well that is used for municipal purposes or by a public
172-16   utility.  Any fee imposed by the district under this subsection may
172-17   not exceed the fee imposed on other groundwater producers in the
172-18   district.
172-19         SECTION 3.1508.  REGIONAL COOPERATION.  (a)  To provide for
172-20   regional continuity, the district shall:
172-21               (1)  participate in a regular annual coordination
172-22   meeting with other groundwater districts in its designated
172-23   management area and may hold coordination meetings at other times
172-24   as needed;
172-25               (2)  coordinate the collection of data with other
172-26   groundwater districts in its designated management area in such a
 173-1   way as to achieve relative uniformity of data type and quality;
 173-2               (3)  coordinate efforts to monitor water quality with
 173-3   other groundwater districts in its designated management area,
 173-4   local governments, and state agencies;
 173-5               (4)  provide groundwater level data to other
 173-6   groundwater districts in its designated management area;
 173-7               (5)  investigate any groundwater and aquifer pollution
 173-8   with the intention of locating its source;
 173-9               (6)  notify other groundwater districts in its
173-10   designated management area and all appropriate agencies of any
173-11   detected groundwater pollution;
173-12               (7)  annually provide to other groundwater districts in
173-13   its designated management area an inventory of water wells and an
173-14   estimate of groundwater production within the district; and
173-15               (8)  include other groundwater districts in its
173-16   designated management area on the mailing lists for district
173-17   newsletters, seminars, public education events, news articles, and
173-18   field days.
173-19         (b)  The district shall prepare a comprehensive management
173-20   plan as required by Section 36.1071, Water Code, covering that
173-21   district's respective territory.  On completion and certification
173-22   of the plan as required by Section 36.1072, Water Code, the
173-23   district shall forward a copy of the new or revised management plan
173-24   to the other districts in its designated management area.  The
173-25   district shall consider the management plans individually and shall
173-26   compare them to other management plans in the designated management
 174-1   area.
 174-2               (1)  The district shall, by resolution, call for joint
 174-3   planning with the other districts in the designated management area
 174-4   to review and coordinate the management plans and accomplishments
 174-5   for the designated management area.  In reviewing and coordinating
 174-6   the management plans, the boards shall consider:
 174-7                     (A)  the goals of each management plan and its
 174-8   impact on planning throughout the management area;
 174-9                     (B)  the groundwater management standards of each
174-10   district describing the desired condition of the groundwater source
174-11   over time as indicated by indices of quantity of water in the
174-12   source, quality of water produced from the source, springflows, or
174-13   subsidence of the land surface;
174-14                     (C)  the groundwater withdrawal rates adopted by
174-15   each district and the effectiveness of those rates in achieving the
174-16   groundwater management standard of the district;
174-17                     (D)  the effectiveness of the measures
174-18   established by each management plan for conserving and protecting
174-19   groundwater and preventing waste, and the effectiveness of these
174-20   measures in the management area generally; and
174-21                     (E)  any other matters that the boards consider
174-22   relevant to the protection and conservation of groundwater and the
174-23   prevention of waste in the management area.
174-24               (2)  In the management plan the district may establish
174-25   and coordinate with the other districts within the designated
174-26   management area an annual total groundwater withdrawal limit and
 175-1   equitable allocation as determined from an evaluation of the
 175-2   overall scientific data of the groundwater resources in the region,
 175-3   including the Texas Water Development Board's groundwater
 175-4   availability model.  The determination of sustainable groundwater
 175-5   withdrawal shall be reviewed at least every five years.
 175-6               (3)  Each district participating in the joint planning
 175-7   process initiated under this subsection shall ensure that the
 175-8   groundwater management standards adopted by the district are
 175-9   adequate to protect the groundwater within the area of each
175-10   district and are not incompatible with the groundwater management
175-11   standards adopted by the other districts in the management area.
175-12               (4)  If a joint meeting of the boards of directors is
175-13   called, the meeting must be held in accordance with Chapter 551,
175-14   Government Code.  Notice of the meeting shall be given in
175-15   accordance with the requirements for notice of district board of
175-16   directors meetings under that chapter.  In addition, notice of the
175-17   meeting shall be published not later than the 30th day before the
175-18   date of the scheduled meeting in a newspaper with general
175-19   circulation in each county in the management area.
175-20               (5)  A district in the management area may file with
175-21   good cause a petition with the Texas Natural Resource Conservation
175-22   Commission requesting an inquiry if the petitioner district adopted
175-23   a resolution calling for joint planning and the other district or
175-24   districts refused to join in the planning process or the process
175-25   failed to result in adequate planning, and the petition provides
175-26   evidence that:
 176-1                     (A)  another district in the management area has
 176-2   failed to adopt rules;
 176-3                     (B)  the groundwater in the management area is
 176-4   not adequately protected by the rules adopted by another district;
 176-5   or
 176-6                     (C)  the groundwater in the management area is
 176-7   not adequately protected due to the failure of another district to
 176-8   enforce substantial compliance with its rules.
 176-9               (6)  The district may contract to jointly conduct
176-10   studies or research, or to construct projects, under terms and
176-11   conditions that the districts consider beneficial with districts
176-12   located within the same management area or in adjacent management
176-13   areas.  These joint efforts may include studies of groundwater
176-14   availability and quality, aquifer modeling, and the interaction of
176-15   groundwater and surface water; educational programs; the purchase
176-16   and sharing of equipment; and the implementation of projects to
176-17   make groundwater available, including aquifer recharge, brush
176-18   control, weather modification, desalination, regionalization, and
176-19   treatment or conveyance facilities.  The districts may contract
176-20   under their existing authorizations including those of Chapter 791,
176-21   Government Code, if their contracting authority is not limited by
176-22   Sections 791.011(c)(2) and (d)(3) and Section 791.014, Government
176-23   Code.
176-24         (c)  The district shall determine biennially, using the
176-25   overall available scientific data of groundwater resources in the
176-26   Central Carrizo-Wilcox area, whether pumping within the district or
 177-1   an adjacent district is unreasonably affecting groundwater wells.
 177-2   The district, in agreement with other districts within the
 177-3   designated management area, may adopt mitigation measures in
 177-4   response to such unreasonable adverse effects only if the measures
 177-5   are based on a scientific determination made.
 177-6         (d)  The district may assist in the mediation between
 177-7   landowners regarding the mitigation of the loss of existing
 177-8   groundwater supply of exempt domestic and livestock users due to
 177-9   the groundwater pumping of others in adjoining districts.
177-10         SECTION 3.1509.  BOARD OF DIRECTORS.  (a)  The district is
177-11   governed by a board of nine directors.
177-12         (b)  Initial directors serve until permanent directors are
177-13   appointed under Section 3.1510 of this part and qualified as
177-14   required by Subsection (d) of this section.
177-15         (c)  Permanent directors serve four-year staggered terms.
177-16         (d)  Each director must qualify to serve as a director in the
177-17   manner provided by Section 36.055, Water Code.
177-18         (e)  A director serves until the director's successor has
177-19   qualified.
177-20         (f)  A director may serve consecutive terms.
177-21         (g)  If there is a vacancy on the board, the governing body
177-22   of the entity that appointed the director who vacated the office
177-23   shall appoint a director to serve the remainder of the term.
177-24         (h)  Directors are not entitled to receive compensation for
177-25   serving as a director but may be reimbursed for actual, reasonable
177-26   expenses incurred in the discharge of official duties.
 178-1         (i)  A majority vote of a quorum is required for board
 178-2   action.  If there is a tie vote, the proposed action fails.
 178-3         SECTION 3.1510.  APPOINTMENT OF DIRECTORS.  (a)  The Leon
 178-4   County Commissioners Court shall appoint three directors, of whom:
 178-5               (1)  one must represent the interests of rural water
 178-6   suppliers or municipalities in the county, or both;
 178-7               (2)  one must represent agricultural interests in the
 178-8   county; and
 178-9               (3)  one must represent industrial interests in the
178-10   county.
178-11         (b)  The Madison County Commissioners Court shall appoint
178-12   three directors, of whom:
178-13               (1)  one must represent the interests of rural water
178-14   suppliers or municipalities in the county, or both;
178-15               (2)  one must represent agricultural interests in the
178-16   county; and
178-17               (3)  one must represent industrial interests in the
178-18   county.
178-19         (c)  The Freestone County Commissioners Court shall appoint
178-20   three directors, of whom:
178-21               (1)  one must represent the interests of rural water
178-22   suppliers or municipalities in the county, or both;
178-23               (2)  one must represent agricultural interests in the
178-24   county; and
178-25               (3)  one must represent industrial interests in the
178-26   county.
 179-1         (d)  Each of the governing bodies authorized by this section
 179-2   to make an appointment shall appoint the appropriate number of
 179-3   initial directors as soon as practicable following the effective
 179-4   date of this Act, but not later than the 45th day after the
 179-5   effective date of this Act.
 179-6         (e)  The initial directors shall draw lots to determine their
 179-7   terms.  A simple majority of the initial directors, if an odd
 179-8   number of initial directors are appointed, or half the initial
 179-9   directors, if an even number of initial directors are appointed,
179-10   serve terms that expire on January 1 of the fourth year following
179-11   the confirmation of the district at an election held under Section
179-12   3.1512 of this part.  The remaining initial directors serve terms
179-13   that expire on January 1 of the second year following the
179-14   confirmation of the district.  On January 1 of the second year
179-15   following confirmation of the district and every two years after
179-16   that date, the appropriate commissioners courts shall appoint the
179-17   appropriate number of permanent directors.
179-18         SECTION 3.1511.  ORGANIZATIONAL MEETING.  As soon as
179-19   practicable after all the initial directors have been appointed and
179-20   have qualified as provided by this part, a majority of the
179-21   directors shall convene the organizational meeting of the district
179-22   at a location within the district agreeable to a majority of the
179-23   directors.  If no location can be agreed on, the organizational
179-24   meeting of the directors shall be at the Leon County Courthouse.
179-25         SECTION 3.1512.  CONFIRMATION ELECTION.  (a)  The initial
179-26   board of directors shall call and hold an election on the same date
 180-1   in each county within the district to confirm the creation of the
 180-2   district.
 180-3         (b)  Except as provided by this section, a confirmation
 180-4   election must be conducted as provided by Sections 36.017, 36.018,
 180-5   and 36.019, Water Code, and Section 41.001, Election Code.
 180-6         (c)  If the majority of qualified voters in a county who vote
 180-7   in the election vote to confirm the creation of the district, that
 180-8   county is included in the district.  If the majority of qualified
 180-9   voters in a county who vote in the election vote not to confirm the
180-10   creation of the district, that county is excluded from the
180-11   district.
180-12         (d)  The district is dissolved and this part expires on
180-13   August 31, 2003, unless the voters confirm the creation of the
180-14   district before that date.
180-15           PART 16.  NORTHEAST TRAVIS COUNTY UTILITY DISTRICT
180-16         SECTION 3.1601.  CREATION.  (a)  A conservation and
180-17   reclamation district, to be known as the Northeast Travis County
180-18   Utility District, is created in Travis County, subject to approval
180-19   at a confirmation election under Section 3.1611 of this part.  The
180-20   district is a governmental agency and a body politic and corporate.
180-21         (b)  The district is created under and is essential to
180-22   accomplish the purposes of Section 59, Article XVI, Texas
180-23   Constitution.
180-24         SECTION 3.1602.  DEFINITION.  In this part, "district" means
180-25   the Northeast Travis County Utility District.
180-26         SECTION 3.1603.  BOUNDARIES.  The district includes the
 181-1   territory contained within the following areas:
 181-2         Tract No. 1, approximately 146.50 acres of land out of the E.
 181-3   Kirkland Survey No. 7, in Travis County, Texas, being all of that
 181-4   certain tract conveyed to Kathleen Marie England and Jay Lawrence
 181-5   Johnson by Deeds recorded in Volume 11403, Page 374, Volume 11618,
 181-6   Page 104, Volume 11861, Page 120 and Volume 12118, Page 195, Real
 181-7   Property Records of Travis County, Texas;
 181-8         Tract No. 2, approximately 70.31 acres of land out of the E.
 181-9   Kirkland Survey No. 7 in Travis County, Texas, being all of that
181-10   certain tract of land conveyed to Charles E. Baker, et ux, by Deed
181-11   recorded in Volume 7188, Page 1756, Deed Records of Travis County,
181-12   Texas;
181-13         Tract No. 3, approximately 104.34 acres of land out of the
181-14   G. M. Martin Survey No. 9, Abstract 529, Travis County, Texas,
181-15   being all of that certain tract called 103.984 acres conveyed to
181-16   Bernice Becker Zreet, Freida Becker Woodland, Edline Becker
181-17   McMains, Adolf Becker, Jr., Wilbert Becker and Edwin F. Zreet and
181-18   Bernice Zreet, Trustees of The Edwin F. and Bernice Zreet Trust
181-19   dated August 27, 1997, by Deeds recorded in Volume 10215, Page 610,
181-20   Volume 10537, Page 939, and Volume 13171, Page 102, Real Property
181-21   Records of Travis County, Texas, and all of that certain tract
181-22   called 0.356 of one acre conveyed by Muniment of Title recorded in
181-23   Document No. 71552 of the Travis County Probate Records;
181-24         Tract No. 4, approximately 103.266 acres of land out of the
181-25   George M. Martin Survey No. 9, Abstract 529, Travis County, Texas,
181-26   being all of that certain tract conveyed to Kermit Hees and wife,
 182-1   Lydia Hees by Partition Deed recorded in Volume 11552, Page 475,
 182-2   Real Property Records of Travis County, Texas, said 103.266 acre
 182-3   tract being the remainder of that tract called 106-1/2 acres
 182-4   conveyed to W. A. Randig by Deed recorded in Volume 498, Page 219,
 182-5   SAVE AND EXCEPT, that portion deeded to Travis County, Texas for
 182-6   highway purposes by Deed recorded in Volume 2268, Page 195, Deed
 182-7   Records of Travis County, Texas;
 182-8         Tract No. 5, approximately 177.301 acres of land out of the
 182-9   G. M. Martin Survey in Travis County, Texas, being all of that
182-10   certain tract of land conveyed to Karolyn P. Graf and Robert L.
182-11   Pfluger, Trustees of the Lawrence and Willie Mae Pfluger Family
182-12   Trust by Deeds recorded in Volume 10431, Page 422, Volume 10555,
182-13   Page 214, and Volume 11091, Page 691, Real Property Records of
182-14   Travis County, Texas;
182-15         Tract No. 6, approximately 107.4 acres of land out of the
182-16   George M. Martin Survey, Abstract No. 9, and being all of that
182-17   certain tract of land conveyed to Robert L. Pfluger and Karolyn P.
182-18   Graf by Deed recorded in Volume 12947, Page 560 and to Robert L.
182-19   Pfluger, Trustee for Miranda Kimbro and Weston N. Kimbro and Wayne
182-20   Pfluger, Trustee for Jospeh L. Pfluger and Lydia Pfluger, by Deed
182-21   recorded in Volume 12947, Page 562, Real Property Records of Travis
182-22   County, Texas;
182-23         Tract No. 7, approximately 9.198 acres of land out of the
182-24   G. M. Martin Survey, Abstract No. 9, in Travis County, Texas, and
182-25   being all of that certain tract of land conveyed to Peggy Pfluger
182-26   and Robert L. Pfluger by Deed recorded in Volume 13049, Page 1353,
 183-1   Real Property Records of Travis County, Texas.
 183-2         SECTION 3.1604.  FINDINGS RELATIVE TO BOUNDARIES.  The
 183-3   legislature finds that the boundaries and field notes of the
 183-4   district form a closure.  A mistake in the field notes or in
 183-5   copying the field notes in the legislative process does not affect
 183-6   the organization, existence, or validity of the district, the right
 183-7   of the district to impose taxes, or the legality or operation of
 183-8   the district or its governing body.
 183-9         SECTION 3.1605.  FINDING OF BENEFIT.  All of the land and
183-10   other property included within the boundaries of the district will
183-11   be benefited by the works and projects that are to be accomplished
183-12   by the district under powers conferred by Section 59, Article XVI,
183-13   Texas Constitution.  The district is created to serve a public use
183-14   and benefit.
183-15         SECTION 3.1606.  GENERAL POWERS.  (a)  The district has all
183-16   of the rights, powers, privileges, authority, functions, and duties
183-17   provided by the general law of this state, including Chapters 30,
183-18   49, and 54, Water Code, applicable to municipal utility districts
183-19   created under Section 59, Article XVI, Texas Constitution.
183-20         (b)  The rights, powers, privileges, authority, functions,
183-21   and duties of the district are subject to the continuing right of
183-22   supervision of the state to be exercised by and through the Texas
183-23   Natural Resource Conservation Commission.
183-24         SECTION 3.1607.  DIVISION OF DISTRICT.  (a)  The district may
183-25   divide into two or more districts as provided by Sections
183-26   51.748-51.753, Water Code, and this section.  The proposed district
 184-1   may divide into two or more proposed districts before the
 184-2   establishment of the district is confirmed at the confirmation
 184-3   election held under Section 3.1611 of this part.
 184-4         (b)  A district created by division under this section may
 184-5   divide into two or more districts after the establishment of the
 184-6   district is confirmed at a confirmation election.  A proposed
 184-7   district created by division under this section may divide into two
 184-8   or more proposed districts before the establishment of the district
 184-9   is confirmed at a confirmation election.
184-10         (c)  The district or any district resulting from a division
184-11   of the district may exercise powers under Chapters 49 and 54, Water
184-12   Code, to annex or exclude property after a confirmation election.
184-13   The temporary board of the proposed district or of any proposed
184-14   district resulting from a division of the proposed district may,
184-15   after a hearing, alter the proposed boundaries of the proposed
184-16   district before the temporary board orders a confirmation election.
184-17         (d)  The order creating a district by division under this
184-18   section and Sections 51.748-51.753, Water Code, must give the
184-19   district an appropriate name that does not conflict with the name
184-20   of any other district.  The provisions of Section 51.749(c), Water
184-21   Code, relating to naming a district, do not apply.
184-22         SECTION 3.1608.  ANNEXATION BY MUNICIPALITY.  (a)  The
184-23   district is a water or sewer district as defined by Section 43.071,
184-24   Local Government Code, for purposes of that section.
184-25         (b)  On annexation of the district by a municipality, the
184-26   district is dissolved and the municipality shall assume the powers,
 185-1   authority, functions, duties, and outstanding bonded indebtedness
 185-2   of the district.
 185-3         (c)  A municipality that annexes the district must provide
 185-4   full municipal services, as defined by Section 43.056(c), Local
 185-5   Government Code, in the district before the expiration of two and
 185-6   one-half years after the effective date of the annexation, unless
 185-7   certain services cannot reasonably be provided within that period
 185-8   and the municipality proposes a schedule for providing those
 185-9   services.  If the municipality proposes a schedule to extend the
185-10   period for providing certain services, the schedule must provide
185-11   for the provision of full municipal services before the expiration
185-12   of four and one-half years after the effective date of the
185-13   annexation.
185-14         SECTION 3.1609.  BOARD OF DIRECTORS.  (a)  The district is
185-15   governed by a board of five directors.
185-16         (b)  Temporary directors serve until initial directors are
185-17   elected under Section 3.1611 of this part.
185-18         (c)  Initial directors serve until permanent directors are
185-19   elected under Section 3.1612 of this part.
185-20         (d)  Permanent directors serve staggered four-year terms.
185-21         (e)  Each director must qualify to serve as a director in the
185-22   manner provided by Section 49.055, Water Code.
185-23         (f)  A director serves until the director's successor has
185-24   qualified.
185-25         SECTION 3.1610.  TEMPORARY DIRECTORS.  (a)  The temporary
185-26   board of directors consists of:
 186-1               (1)  Chris Fields;
 186-2               (2)  Nate Nickerson;
 186-3               (3)  Seth Spiker;
 186-4               (4)  John Pfluger; and
 186-5               (5)  Steven Thomas.
 186-6         (b)  The temporary directors are not required to own land or
 186-7   reside in the district.
 186-8         (c)  The temporary directors shall take the oath of office
 186-9   and execute bonds to qualify for holding their offices as soon as
186-10   possible after the effective date of this Act.
186-11         (d)  If a temporary director fails to qualify for office, the
186-12   temporary directors who have qualified shall appoint a person to
186-13   fill the vacancy.  If at any time there are fewer than three
186-14   qualified temporary directors, the Texas Natural Resource
186-15   Conservation Commission shall appoint the necessary number of
186-16   persons to fill all vacancies on the board.
186-17         SECTION 3.1611.  CONFIRMATION AND INITIAL DIRECTORS ELECTION.
186-18   (a)  The temporary board of directors shall call and hold an
186-19   election to confirm establishment of the district and to elect five
186-20   initial directors as provided by Section 49.102, Water Code.  The
186-21   board may submit to the voters propositions to authorize the
186-22   issuance of bonds, a maintenance tax, and a tax to make payments
186-23   under a contract.
186-24         (b)  Section 41.001(a), Election Code, does not apply to an
186-25   election held under this section.
186-26         SECTION 3.1612.  ELECTION OF DIRECTORS.  (a)  On the first
 187-1   Saturday in May of the first even-numbered year after the year in
 187-2   which the district is authorized to be created at a confirmation
 187-3   election, a general election shall be held in the district for the
 187-4   election of three directors to serve four-year terms and two
 187-5   directors to serve two-year terms.
 187-6         (b)  On the first Saturday in May of each subsequent second
 187-7   year following the election, the appropriate number of directors
 187-8   shall be elected.
 187-9         SECTION 3.1613.  FINDINGS RELATING TO PROCEDURAL
187-10   REQUIREMENTS.  (a)  The proper and legal notice of the intention to
187-11   introduce this Act, setting forth the general substance of this
187-12   Act, has been published as provided by law, and the notice and a
187-13   copy of this Act have been furnished to all persons, agencies,
187-14   officials, or entities to which they are required to be furnished
187-15   by the constitution and other laws of this state, including the
187-16   governor, who has submitted the notice and Act to the Texas Natural
187-17   Resource Conservation Commission.
187-18         (b)  The Texas Natural Resource Conservation Commission has
187-19   filed its recommendations relating to this Act with the governor,
187-20   lieutenant governor, and speaker of the house of representatives
187-21   within the required time.
187-22         (c)  All requirements of the constitution and laws of this
187-23   state and the rules and procedures of the legislature with respect
187-24   to the notice, introduction, and passage of this Act are fulfilled
187-25   and accomplished.
187-26         SECTION 3.1614.  EFFECTIVE DATE OF THIS PART.  This part
 188-1   takes effect immediately if this Act receives a vote of two-thirds
 188-2   of all the members elected to each house, as provided by Section
 188-3   39, Article III, Texas Constitution.  If this Act does not receive
 188-4   the vote necessary for immediate effect, this part takes effect
 188-5   September 1, 2001.
 188-6               ARTICLE 4.  WATER INFRASTRUCTURE FINANCING
 188-7         SECTION 4.01.  Chapter 15, Water Code, is amended by adding
 188-8   Subchapter O to read as follows:
 188-9                SUBCHAPTER O.  WATER INFRASTRUCTURE FUND
188-10         Sec. 15.901.  DEFINITIONS.  In this subchapter:
188-11               (1)  "Eligible political subdivision" means:
188-12                     (A)  a municipality;
188-13                     (B)  a county;
188-14                     (C)  a river authority or special law district
188-15   that is listed in Section 9.010(b);
188-16                     (D)  a water improvement district;
188-17                     (E)  an irrigation district;
188-18                     (F)  a water control and improvement district;
188-19   and
188-20                     (G)  a groundwater district with a groundwater
188-21   management plan certified by the board under Section 36.1072.
188-22               (2)  "Fund" means the water infrastructure fund.
188-23               (3)  "Metropolitan statistical area" means an area so
188-24   designated by the United States Office of Management and Budget.
188-25               (4)  "Political subdivision bonds" means bonds or other
188-26   obligations issued by a political subdivision to fund a project and
 189-1   purchased by the board from money in the fund.
 189-2               (5)  "Project" means any undertaking or work, including
 189-3   planning and design activities and work to obtain regulatory
 189-4   authority, to conserve, mitigate, convey, and develop water
 189-5   resources of the state, including any undertaking or work done
 189-6   outside the state that the board determines will result in water
 189-7   being available for use in or for the benefit of the state.
 189-8         Sec. 15.902.  FINDINGS.  The legislature finds that:
 189-9               (1)  the creation of the fund and the administration of
189-10   the fund by the board will encourage the conservation and
189-11   development of the water resources of the state;
189-12               (2)  the use of the fund is in furtherance of the
189-13   public purpose of conserving and developing the water resources of
189-14   the state; and
189-15               (3)  the use of the fund for the purposes provided by
189-16   this subchapter is for the benefit of both the state and the
189-17   political subdivisions to which the board makes financial
189-18   assistance available in accordance with this subchapter and
189-19   constitutes a program under, and is in furtherance of the public
189-20   purposes set forth in, Section 52-a, Article III, Texas
189-21   Constitution.
189-22         Sec. 15.903.  WATER INFRASTRUCTURE FUND.  (a)  The water
189-23   infrastructure fund is a special account in the general revenue
189-24   fund to be administered by the board under this subchapter and
189-25   rules adopted by the board under this subchapter.  Money in the
189-26   fund may be used to pay for the implementation of water projects
 190-1   recommended through the state and regional water planning processes
 190-2   under Sections 16.051 and 16.053.
 190-3         (b)  The fund consists of:
 190-4               (1)  appropriations from the legislature;
 190-5               (2)  any other fees or sources of revenue that the
 190-6   legislature may dedicate for deposit to the fund;
 190-7               (3)  repayments of loans made from the fund;
 190-8               (4)  interest earned on money credited to the fund;
 190-9               (5)  depository interest allocable to the fund in the
190-10   general revenue fund;
190-11               (6)  money from gifts, grants, or donations to the
190-12   fund;
190-13               (7)  money from revenue bonds or other sources
190-14   designated by the board; and
190-15               (8)  proceeds from the sale of political subdivision
190-16   bonds or obligations held in the fund and not otherwise pledged to
190-17   the discharge, repayment, or redemption of revenue bonds or other
190-18   bonds, the proceeds of which were placed in the fund.
190-19         Sec. 15.904.  USE OF WATER INFRASTRUCTURE FUND.  (a)  The
190-20   board may use the fund:
190-21               (1)  to make loans to political subdivisions at or
190-22   below market interest rates for projects;
190-23               (2)  to make grants, low-interest loans, or zero
190-24   interest loans to political subdivisions for projects to serve
190-25   areas outside metropolitan statistical areas in order to ensure
190-26   that the projects are implemented, or for projects to serve
 191-1   economically distressed areas;
 191-2               (3)  to make loans at or below market interest rates
 191-3   for planning and design costs, permitting costs, and other costs
 191-4   associated with state or federal regulatory activities with respect
 191-5   to a project;
 191-6               (4)  as a source of revenue or security for the payment
 191-7   of principal and interest on bonds issued by the board if the
 191-8   proceeds of the sale of the bonds will be deposited in the fund;
 191-9   and
191-10               (5)  to pay the necessary and reasonable expenses of
191-11   the board in administering the fund.
191-12         (b)  Funding under Subsection (a)(2) or under Subsection
191-13   (a)(3) may not exceed 10 percent of the amount of financial
191-14   assistance budgeted by the board to be made available from the fund
191-15   in a fiscal year.
191-16         (c)  Principal and interest payments on loans made under
191-17   Subsection (a)(3) may be deferred for a maximum of 10 years or
191-18   until construction of the project is completed, whichever is
191-19   earlier.
191-20         Sec. 15.905.  APPROVAL OF APPLICATIONS.  (a)  On review and
191-21   recommendation by the executive administrator, the board by
191-22   resolution may approve an application if the board finds that:
191-23               (1)  the application and the assistance applied for
191-24   meet the requirements of this subchapter and board rules;
191-25               (2)  the revenue or taxes, or both the revenue and
191-26   taxes, pledged by the applicant will be sufficient to meet all the
 192-1   obligations assumed by the political subdivision; and
 192-2               (3)  the project will meet water needs in a manner
 192-3   consistent with the state and regional water plans as required by
 192-4   Section 16.053(j), unless otherwise specified by an act of the
 192-5   legislature.
 192-6         (b)  For an application under this subchapter, a program of
 192-7   water conservation through a more effective use of water shall be
 192-8   required in the same manner as for approval of an application for
 192-9   financial assistance under Section 15.106.
192-10         (c)  The board may deliver funds for the part of a loan or
192-11   grant for a project relating to surface water development, other
192-12   than for planning and design costs, permitting costs, and other
192-13   costs associated with federal and state regulatory activities with
192-14   respect to a project, only if the executive administrator makes a
192-15   written finding that the applicant:
192-16               (1)  has the necessary water rights authorizing the
192-17   applicant to appropriate and use the water that the project will
192-18   provide, if the applicant is proposing surface water development;
192-19   or
192-20               (2)  has the right to use water that the project will
192-21   provide, if the applicant is proposing groundwater development.
192-22         Sec. 15.906.  APPLICABLE LAW.  Subchapter E, Chapter 17,
192-23   applies to financial assistance made available from the fund,
192-24   except that the board may also execute contracts as necessary to
192-25   evidence grant agreements.
192-26         Sec. 15.907.  RULES.  The board shall adopt rules necessary
 193-1   to carry out this subchapter, including rules establishing
 193-2   procedures for application for and for the award of financial
 193-3   assistance, for the investment of funds, and for the administration
 193-4   of the fund.
 193-5         Sec. 15.908.  SALE OF POLITICAL SUBDIVISION BONDS.  (a)  The
 193-6   board may sell or dispose of political subdivision bonds at the
 193-7   price and under the terms that the board determines to be
 193-8   reasonable.
 193-9         (b)  The board may sell political subdivision bonds without
193-10   making a previous offer to the political subdivision that issued
193-11   the bonds and without advertising, soliciting, or receiving bids
193-12   for sale.
193-13         (c)  Notwithstanding other provisions of this chapter, the
193-14   board may sell to the Texas Water Resources Finance Authority any
193-15   political subdivision bonds purchased with money in the fund and
193-16   may apply the proceeds of a sale in the manner provided by this
193-17   section.
193-18         (d)  Proceeds from the sale of political subdivision bonds
193-19   under this section shall be deposited in the fund for use as
193-20   provided by Section 15.904.
193-21         (e)  As part of a sales agreement with the Texas Water
193-22   Resources Finance Authority, the board by contract may agree to
193-23   perform the functions required to ensure that the political
193-24   subdivision pays the debt service on political subdivision bonds
193-25   sold and observes the conditions and requirements stated in those
193-26   bonds.
 194-1         (f)  The board may exercise any powers necessary to carry out
 194-2   the authority granted by this section, including the authority to
 194-3   contract with any person to accomplish the purposes of this
 194-4   section.
 194-5         Sec. 15.909.  FUNDING FOR LOCAL ECONOMIC DEVELOPMENT.
 194-6   (a)  The board may use the fund to provide financial assistance to
 194-7   an eligible political subdivision to enable the political
 194-8   subdivision to fund loans and grants for projects that conserve and
 194-9   develop the water resources of the political subdivision for the
194-10   ultimate benefit of the public, and that develop and diversify its
194-11   local economy, consistent with the terms and conditions set forth
194-12   in a program adopted by the governing body of the political
194-13   subdivision under authority granted by Section 15.910.
194-14         (b)  The board may not purchase political subdivision bonds
194-15   issued for the purposes described by Subsection (a) that are
194-16   secured in whole or in part by a pledge of ad valorem taxes unless
194-17   the political subdivision submits evidence satisfactory to the
194-18   board that the issuance of the bonds has been approved by the
194-19   citizens of the political subdivision voting at an election held
194-20   for the purposes described in Section 15.910.
194-21         Sec. 15.910.  AUTHORITY TO ESTABLISH ECONOMIC DEVELOPMENT
194-22   PROGRAMS.  (a)  An eligible political subdivision may establish
194-23   economic development programs and make loans and grants of public
194-24   funds to assist in providing projects within the political
194-25   subdivision that conserve and develop the water resources of the
194-26   political subdivision for the ultimate benefit of the public.  The
 195-1   authority granted to a political subdivision to make loans and
 195-2   grants in accordance with this section constitutes a program in
 195-3   furtherance of the public purposes provided by Section 52-a,
 195-4   Article III, Texas Constitution.
 195-5         (b)  Financial assistance received from the fund may be used
 195-6   by an eligible political subdivision to make loans or grants to
 195-7   persons for projects that the political subdivision finds will
 195-8   conserve and develop the water resources of the political
 195-9   subdivision for the ultimate benefit of the public and assist in
195-10   diversifying and developing the economy of the political
195-11   subdivision and the state.
195-12         (c)  In exercising the authority granted by this section, the
195-13   governing body of an eligible political subdivision may determine
195-14   the terms and conditions governing the loan or grant of money and
195-15   determine whether to approve an agreement with a person who
195-16   receives a loan or grant.
195-17         Sec. 15.911.  An eligible political subdivision may not sell
195-18   or incur obligations to fund an economic development program
195-19   established under authority granted by Section 15.910 that are
195-20   payable in whole or in part from ad valorem taxes unless the
195-21   residents of the political subdivision, voting at an election held
195-22   for the purpose, approve the issuance of obligations to fund an
195-23   economic development program for the provision of loans or grants
195-24   to persons to construct projects that will conserve and develop the
195-25   water resources of the political subdivision for the ultimate
195-26   benefit of the public and assist in developing and diversifying the
 196-1   local economy.
 196-2         SECTION 4.02.  Chapter 15, Water Code, is amended by adding
 196-3   Subchapter P to read as follows:
 196-4               SUBCHAPTER P.  RURAL WATER ASSISTANCE FUND
 196-5         Sec. 15.951.  PURPOSE.  The legislature finds that the rural
 196-6   areas of the state, characterized by small populations extended
 196-7   over disproportionately large service areas, require a means of
 196-8   financing water projects in addition to those established by other
 196-9   provisions of this chapter.
196-10         Sec. 15.952.  DEFINITIONS.  In this subchapter:
196-11               (1)  "District" means a conservation or reclamation
196-12   district created under Section 52, Article III, or Section 59,
196-13   Article XVI, Texas Constitution.
196-14               (2)  "Federal agency" means an agency or other entity
196-15   of the United States Department of Agriculture or an agency or
196-16   entity that is acting through or on behalf of that department.
196-17               (3)  "Fund" means the rural water assistance fund.
196-18               (4)  "Rural political subdivision" means:
196-19                     (A)  a nonprofit water supply or sewer service
196-20   corporation, district, or municipality with a service area of
196-21   10,000 or less in population or that otherwise qualifies for
196-22   financing from a federal agency; or
196-23                     (B)  a county in which no urban area exceeds
196-24   50,000 in population.
196-25               (5)  "State agency" means an agency or other entity of
196-26   the state, including the Department of Agriculture and the Texas
 197-1   Department of Housing and Community Affairs and any agency or
 197-2   authority that is acting through or on behalf of the Department of
 197-3   Agriculture or the Texas Department of Housing and Community
 197-4   Affairs.
 197-5         Sec. 15.953.  FUND.  The rural water assistance fund is a
 197-6   special account in the general revenue fund.  The fund consists of:
 197-7               (1)  money directly appropriated to the board;
 197-8               (2)  repayment of principal and interest from loans
 197-9   made from the fund not otherwise needed as a source of revenue
197-10   pursuant to Section 17.9615(b);
197-11               (3)  money transferred by the board from any sources
197-12   available; and
197-13               (4)  interest earned on the investment of money in the
197-14   fund and depository interest allocable to the fund in the general
197-15   revenue fund.
197-16         Sec. 15.954.  USE OF FUND.  (a)  The fund may be used to
197-17   provide low-interest loans to rural political subdivisions for
197-18   water or water-related projects, including the purchase of well
197-19   fields, the purchase or lease of rights to produce groundwater, and
197-20   interim financing of construction projects.
197-21         (b)  The fund may be used to enable a rural political
197-22   subdivision to obtain water supplied by larger political
197-23   subdivisions or to finance the consolidation or regionalizing of
197-24   neighboring political subdivisions, or both.
197-25         (c)  The fund may be used to finance an outreach and
197-26   technical assistance program to assist rural political subdivisions
 198-1   in obtaining assistance through the fund.  The board may use money
 198-2   in the fund to contract for such outreach and technical assistance.
 198-3         (d)  The fund may be used to buy down interest rates on
 198-4   loans.
 198-5         (e)  A rural political subdivision may enter into an
 198-6   agreement with a federal agency or a state agency to submit a joint
 198-7   application for financial assistance under this subchapter.
 198-8         (f)  A nonprofit water supply or sewer service corporation is
 198-9   exempt from payment of any sales tax that may be incurred under
198-10   other law or ordinance for any project financed by the fund.
198-11         (g)  The fund may be used as a source of revenue for the
198-12   payment of principal and interest on water financial assistance
198-13   bonds issued by the board if the proceeds of the sale of these
198-14   bonds will be deposited into the rural water assistance fund.
198-15         Sec. 15.955.  FINANCIAL ASSISTANCE.  (a)  The board shall
198-16   adopt rules necessary to administer this subchapter, including
198-17   rules establishing procedures for the application for and award of
198-18   loans, the distribution of loans, the investment of funds, and the
198-19   administration of loans and the fund.
198-20         (b)  The board may not release from the fund money for the
198-21   construction phase of parts of projects proposing surface water or
198-22   groundwater development until the executive administrator makes a
198-23   written finding that a rural political subdivision:
198-24               (1)  has the necessary water right authorizing it to
198-25   appropriate and use the water that the project will provide, if the
198-26   rural political subdivision is proposing surface water development;
 199-1   or
 199-2               (2)  has the right to use water that the project will
 199-3   provide, if the rural political subdivision is proposing
 199-4   groundwater development.
 199-5         (c)  In passing on an application from a rural political
 199-6   subdivision for financial assistance, the board shall consider:
 199-7               (1)  the needs of the area to be served by the project,
 199-8   the benefit of the project to the area, the relationship of the
 199-9   project to the overall state water needs, and the relationship of
199-10   the project to the state water plan; and
199-11               (2)  the availability of revenue to the rural political
199-12   subdivision from all sources for the ultimate repayment of the cost
199-13   of the water supply project, including all interest.
199-14         (d)  The board by resolution may approve an application if,
199-15   after considering the factors listed in Subsection (c) and other
199-16   relevant factors, the board finds that:
199-17               (1)  the public interest is served by state assistance
199-18   for the project; and
199-19               (2)  the revenue or taxes pledged by the rural
199-20   political subdivision will be sufficient to meet all the
199-21   obligations assumed by the rural political subdivision during the
199-22   succeeding period of not more than 50 years.
199-23         (e)  A program of water conservation for the more efficient
199-24   use of water shall be required in the same manner as is required
199-25   for approval of an application for financial assistance under
199-26   Section 15.106.
 200-1         (f)  Sections 17.183-17.187 apply to the construction of
 200-2   projects funded pursuant to this subchapter.
 200-3         SECTION 4.03.  Subsection (j), Section 5.235, Water Code, is
 200-4   amended to read as follows:
 200-5         (j)  The fee for other uses of water not specifically named
 200-6   in this section is $1 per acre-foot, except that no political
 200-7   subdivision may be required to pay fees to use water for recharge
 200-8   of underground freshwater-bearing sands and aquifers or for
 200-9   abatement of natural pollution.  This fee is waived for
200-10   applications for instream-use water rights deposited into the Texas
200-11   Water Trust.
200-12         SECTION 4.04.  Section 15.001, Water Code, is amended by
200-13   adding Subdivision (12) to read as follows:
200-14               (12)  "Regionalization" means development of a water
200-15   supply or wastewater collection and treatment system that
200-16   incorporates multiple service areas into an areawide service
200-17   facility or any such system that serves an area that includes more
200-18   than a single county, city, special district, or other political
200-19   subdivision of the state.
200-20         SECTION 4.05.  Subsection (a), Section 15.002, Water Code, is
200-21   amended to read as follows:
200-22         (a)  The legislature finds that it is in the public interest
200-23   and to the benefit of the general public of the state to encourage
200-24   and to assist in the planning and construction of projects to
200-25   develop and conserve the storm water and floodwater as well as the
200-26   ordinary flows of the rivers and streams of the state, to maintain
 201-1   and enhance the quality of the water of the state, to provide
 201-2   protection to the state's citizens from the floodwater of the
 201-3   rivers and streams of the state, to provide drainage, subsidence
 201-4   control, public beach nourishment, recharge, chloride control,
 201-5   brush control, weather modification, regionalization, and
 201-6   desalination [desalinization], to provide for the management of
 201-7   aquatic vegetation, and other purposes as provided by law or board
 201-8   rule.
 201-9         SECTION 4.06.  Subsection (b), Section 15.011, Water Code, is
201-10   amended to read as follows:
201-11         (b)  After notice and hearing and subject to any limitations
201-12   established by the General Appropriations Act, the board may
201-13   transfer money from the fund to the loan fund created under
201-14   Subchapter C [of this chapter], the storage acquisition fund
201-15   created under Subchapter E [of this chapter], the research and
201-16   planning fund created under Subchapter F [of this chapter], the
201-17   hydrographic survey account created under Subchapter M [of this
201-18   chapter], provided the hydrographic survey account transfer does
201-19   not exceed $425,000, [and] the aquatic vegetation management fund
201-20   created under Subchapter N, and the rural water assistance fund
201-21   created under Subchapter P [of this chapter].
201-22         SECTION 4.07.  Subsections (a) and (b), Section 15.102, Water
201-23   Code, are amended to read as follows:
201-24         (a)  The loan fund may be used by the board to provide loans
201-25   of financial assistance to political subdivisions, federal
201-26   agencies, or both political subdivisions and federal agencies
 202-1   acting jointly for the construction, acquisition, improvement, or
 202-2   enlargement of projects involving water conservation, water
 202-3   development, or water quality enhancement, providing nonstructural
 202-4   and structural flood control, or drainage, project recreation lands
 202-5   and revenue-generating recreational improvements within any
 202-6   watershed, or providing recharge, chloride control, subsidence
 202-7   control, brush control, weather modification, regionalization, or
 202-8   desalination [desalinization] as provided by legislative
 202-9   appropriations, this chapter, and the board rules.
202-10         (b)  The loan fund may also be used by the board to provide
202-11   grants for:
202-12               (1)  projects that include supplying water and
202-13   wastewater services in economically distressed areas, including
202-14   projects involving retail distribution of those services; and
202-15               (2)  desalination, brush control, weather modification,
202-16   regionalization, and projects providing regional water quality
202-17   enhancement services as defined by board rule, including regional
202-18   conveyance systems.
202-19         SECTION 4.08.  Section 15.105, Water Code, is amended to read
202-20   as follows:
202-21         Sec. 15.105.  CONSIDERATIONS IN PASSING ON APPLICATION.
202-22   (a)  In passing on an application for financial assistance from the
202-23   loan fund, the board shall consider but is not limited to:
202-24               (1)  the needs of the area to be served by the project
202-25   and the benefit of the project to the area in relation to the needs
202-26   of other areas requiring state assistance in any manner and the
 203-1   benefits of those projects to the other areas;
 203-2               (2)  the availability of revenue to the applicant from
 203-3   all sources for the ultimate repayment of the cost of the project,
 203-4   including all interest;
 203-5               (3)  the relationship of the project to overall
 203-6   statewide needs;
 203-7               (4)  the ability of the applicant to finance the
 203-8   project without state assistance; [and]
 203-9               (5)  for applications for grants for economically
203-10   distressed areas, the regulatory efforts by the county in which the
203-11   project is located to control the construction of subdivisions that
203-12   lack basic utility services; and
203-13               (6)  for applications for grants under Section
203-14   15.102(b)(2), the ability of the applicant to construct the project
203-15   without the grant and the benefits of the project to water and
203-16   wastewater needs of the state.
203-17         (b)  The board by rule shall further define eligibility for
203-18   grants under this subchapter.
203-19         SECTION 4.09.  Subsection (a), Section 15.106, Water Code, is
203-20   amended to read as follows:
203-21         (a)  The board, by resolution, may approve an application for
203-22   financial assistance [a loan] if after considering the factors
203-23   listed in Section 15.105 of this code and any other relevant
203-24   factors, the board finds:
203-25               (1)  that the public interest requires state
203-26   participation in the project; and
 204-1               (2)  that in its opinion the revenue or taxes pledged
 204-2   by the political subdivision will be sufficient to meet all the
 204-3   obligations assumed by the political subdivision.
 204-4         SECTION 4.10.  Section 15.107, Water Code, is amended to read
 204-5   as follows:
 204-6         Sec. 15.107.  METHOD OF MAKING [LOANS OF] FINANCIAL
 204-7   ASSISTANCE AVAILABLE.  (a)  The board may make financial assistance
 204-8   available to successful applicants in any manner that it considers
 204-9   economically feasible including:
204-10               (1)  contracts or agreements with a political
204-11   subdivision for the payment of the principal of or interest on or
204-12   both the principal of and interest on bonds or other obligations
204-13   issued or to be issued by the political subdivision;
204-14               (2)  contracts or agreements with a political
204-15   subdivision for the purpose of providing the political
204-16   subdivision's share of any cost-sharing required as a participant
204-17   in or local sponsor of any federal project; [or]
204-18               (3)  purchase of the bonds or other obligations of a
204-19   political subdivision for the purpose of completely or partially
204-20   financing the project for which the application is being submitted;
204-21   or
204-22               (4)  contracts or agreements for the receipt of funds
204-23   and performance of obligations in relation to any grant of funds
204-24   provided by the board.
204-25         (b)  Contracts or agreements entered into under Subdivision
204-26   (1) of Subsection (a) of this section may cover all or any part of
 205-1   the debt service requirements in a given year and may cover debt
 205-2   service requirements in as many years of an issue as the board
 205-3   considers appropriate.
 205-4         (c)  In a determination on a loan for financial assistance,
 205-5   the board may approve interest deferral or the capitalization of
 205-6   interest costs and may approve periods of repayment for the loans
 205-7   of up to 50 years.
 205-8         SECTION 4.11.  Section 15.434, Water Code, is amended to read
 205-9   as follows:
205-10         Sec. 15.434.  USE OF MONEY IN FUND.  Money deposited to the
205-11   credit of the agricultural soil and water conservation fund, on
205-12   appropriation by the legislature to the board, the Department of
205-13   Agriculture, the State Soil and Water Conservation Board, the Texas
205-14   Agricultural Experiment Station, the Texas Agricultural Extension
205-15   Service, public colleges and universities, and other state agencies
205-16   shall be used for the following purposes:
205-17               (1)  agricultural water conservation technical
205-18   assistance programs;
205-19               (2)  agricultural water conservation, education, and
205-20   demonstration programs;
205-21               (3)  purchase of equipment, including demonstration and
205-22   educational equipment;
205-23               (4)  grants made to groundwater [underground water]
205-24   conservation districts and political subdivisions for the purchase
205-25   of equipment under programs established by Subchapter H of this
205-26   chapter;
 206-1               (5)  research in water utilization and conservation
 206-2   including artificial recharge and secondary recovery of groundwater
 206-3   [underground water];
 206-4               (6)  desalination [desalinization];
 206-5               (7)  weather modification;
 206-6               (8)  technical assistance programs for developing
 206-7   on-farm soil and water conservation plans developed jointly by
 206-8   landowners and operators and local soil and water conservation
 206-9   districts, as provided by Subchapter H, Chapter 201, Agriculture
206-10   Code;
206-11               (9)  research and demonstration relating to the
206-12   production of native and low-water-use plants and water-efficient
206-13   crops;
206-14               (10)  a pilot program for low-interest loans for the
206-15   purchase of agricultural water conservation systems established by
206-16   Subchapter I of this chapter; [and]
206-17               (11)  research, demonstration, and education relating
206-18   to brush control; and
206-19               (12)  regionalization designed to promote agricultural
206-20   water conservation.
206-21         SECTION 4.12.  Section 15.471, Water Code, is amended to read
206-22   as follows:
206-23         Sec. 15.471.  GRANTS; PURPOSES.  The board may make grants of
206-24   money to groundwater [underground water] conservation districts, to
206-25   political subdivisions, and to other districts created under
206-26   Article III, Sections 52(b)(1) and (2), or Article XVI, Section 59,
 207-1   of the Texas Constitution for purchasing equipment required for:
 207-2               (1)  measurement and evaluation of irrigation systems
 207-3   and agricultural water conservation practices on irrigated land,
 207-4   dryland, and rangeland;
 207-5               (2)  demonstration of efficient irrigation systems and
 207-6   agricultural water conservation practices on irrigated land,
 207-7   dryland, and rangeland;
 207-8               (3)  testing and evaluation of water quality and the
 207-9   suitability of water from groundwater or surface water resources
207-10   for irrigation, rural domestic use, livestock, or agricultural
207-11   industry use;
207-12               (4)  demonstration of efficient or sound chemical
207-13   application and evaluation or demonstration of systems which will
207-14   prevent contamination of groundwater and surface water from
207-15   chemicals and other substances used in agriculture; or
207-16               (5)  measurement and data collection related to the
207-17   conservation of groundwater resources.
207-18         SECTION 4.13.  Section 15.602, Water Code, is amended by
207-19   adding a new Subdivision (8) and redesignating existing
207-20   Subdivisions (8) through (14) as Subdivisions (9) through (15) to
207-21   read as follows:
207-22               (8)  "Person" means an individual, corporation,
207-23   partnership, association, state, municipality, commission, or
207-24   political subdivision of a state or any interstate body, as defined
207-25   by Section 502 of the federal act, including a political
207-26   subdivision as defined by this subchapter, if the person is
 208-1   eligible for financial assistance under federal law establishing
 208-2   the revolving fund.
 208-3               (9)  "Political subdivision" means a municipality,
 208-4   intermunicipal, interstate, or state agency, any other public
 208-5   entity eligible for assistance under this subchapter, or a
 208-6   nonprofit water supply corporation created and operating under
 208-7   Chapter 67, if such entity is eligible for financial assistance
 208-8   under federal law establishing the state revolving fund or an
 208-9   additional state revolving fund.
208-10               (10) [(9)]  "Public water system" means a system that
208-11   is owned by any person and that meets the definition of public
208-12   water system in the Safe Drinking Water Act.
208-13               (11) [(10)]  "Public works" means any project to
208-14   acquire, construct, improve, repair, or otherwise provide any
208-15   buildings, structures, facilities, equipment, or other real or
208-16   personal property or improvements designed for public use,
208-17   protection, or enjoyment undertaken by a political subdivision and
208-18   paid for, in whole or in part, out of public funds.
208-19               (12) [(11)]  "Revolving fund" means the state water
208-20   pollution control revolving fund.
208-21               (13) [(12)]  "Safe Drinking Water Act" means Title XIV
208-22   of the federal Public Health Service Act, commonly known as the
208-23   Safe Drinking Water Act, as amended (42 U.S.C. Section 300f et
208-24   seq.).
208-25               (14) [(13)]  "Safe drinking water revolving fund" means
208-26   the fund established by the board as an additional state revolving
 209-1   fund to provide financial assistance in accordance with the federal
 209-2   program established pursuant to the provisions of the Safe Drinking
 209-3   Water Act.
 209-4               (15) [(14)]  "Treatment works" has the meaning
 209-5   established by the federal act and the eligible components of the
 209-6   management programs established by Sections 319 and 320 of the
 209-7   federal act.
 209-8         SECTION 4.14.  Subsection (a), Section 15.603, Water Code, is
 209-9   amended to read as follows:
209-10         (a)  The revolving fund is held separately from other funds
209-11   by the board outside the State Treasury to provide financial
209-12   assistance to political subdivisions for construction of treatment
209-13   works and to persons for nonpoint source pollution control and
209-14   estuary management projects.
209-15         SECTION 4.15.  Subsection (a), Section 15.604, Water Code, is
209-16   amended to read as follows:
209-17         (a)  The board may use the revolving fund for financial
209-18   assistance only as provided by the federal act:
209-19               (1)  to make loans, on the conditions that:
209-20                     (A)  those loans are made at or below market
209-21   interest rates, including interest-free loans, at terms not to
209-22   exceed 20 years;
209-23                     (B)  principal and interest payments will begin
209-24   not later than one year after completion of any treatment works and
209-25   all loans will be fully amortized not later than 20 years after
209-26   completion of the treatment works;
 210-1                     (C)  the recipient of a loan will establish a
 210-2   dedicated source of revenue for repayment of loans; and
 210-3                     (D)  the revolving fund will be credited with all
 210-4   payments of principal of and interest on all loans;
 210-5               (2)  to buy or refinance the debt obligation of
 210-6   political subdivisions at or below market rates if the debt
 210-7   obligations were incurred after March 7, 1985;
 210-8               (3)  to guarantee or purchase insurance for political
 210-9   subdivisions if the guarantee or insurance would improve access to
210-10   market credit or reduce interest rates;
210-11               (4)  as a source of revenue or security for the payment
210-12   of principal and interest on bonds issued by the state if the
210-13   proceeds of the sale of those bonds will be deposited in the
210-14   revolving fund;
210-15               (5)  to provide loan guarantees to similar revolving
210-16   funds established by municipalities or intermunicipal agencies;
210-17               (6)  to earn interest on revolving fund accounts;
210-18               (7)  for the reasonable costs of administering the
210-19   revolving fund and conducting activities provided for by Title VI
210-20   of the federal act, except that those amounts may not exceed the
210-21   amount authorized under Title VI of the federal act; [and]
210-22               (8)  to provide financial assistance to persons for a
210-23   nonpoint source pollution control project under Section 319 of the
210-24   federal act or for an estuary management project under Section 320
210-25   of the federal act; and
210-26               (9)  for other purposes as provided by the federal act.
 211-1         SECTION 4.16.  Section 15.607, Water Code, is amended to read
 211-2   as follows:
 211-3         Sec. 15.607.  APPROVAL OF APPLICATION.  On review of
 211-4   recommendations by the executive administrator, the board by
 211-5   resolution may approve an application if the board finds that in
 211-6   its opinion the revenue or taxes or both revenue and taxes pledged
 211-7   by the applicant will be sufficient to meet all the obligations
 211-8   assumed by the applicant [political subdivision] and that the
 211-9   application and assistance applied for meet the requirements of the
211-10   federal act and state law.  A program of water conservation for the
211-11   more effective use of water shall be required in the same manner as
211-12   required for approval of an application for financial assistance
211-13   under Section 15.106 of this code.
211-14         SECTION 4.17.  Subchapter C, Chapter 16, Water Code, is
211-15   amended by adding Section 16.059 to read as follows:
211-16         Sec. 16.059.  COLLECTION OF INSTREAM FLOW DATA; CONDUCT OF
211-17   STUDIES.  (a)  The Parks and Wildlife Department, the commission,
211-18   and the board, in cooperation with other appropriate governmental
211-19   agencies, shall jointly establish and continuously maintain an
211-20   instream flow data collection and evaluation program and shall
211-21   conduct studies and analyses to determine appropriate methodologies
211-22   for determining flow conditions in the state's rivers and streams
211-23   necessary to support a sound ecological environment.  Any stream
211-24   that consists only of floodwaters and is dry more than 75 percent
211-25   of the year is exempt from this section.
211-26         (b)  The Parks and Wildlife Department, the commission, and
 212-1   the board shall each designate an employee to share equally in the
 212-2   oversight of the program studies.  Other responsibilities shall be
 212-3   divided between the Parks and Wildlife Department, the commission,
 212-4   and the board to maximize present in-house capabilities of
 212-5   personnel and equipment and to minimize costs to the state.
 212-6         (c)  The Parks and Wildlife Department, the commission, and
 212-7   the board shall each have reasonable access to all data, studies,
 212-8   analyses, information, and reports produced by the other agencies.
 212-9         (d)  The priority studies shall be completed not later than
212-10   December 31, 2010.  The Parks and Wildlife Department, the
212-11   commission, and the board shall establish a work plan that
212-12   prioritizes the studies and that sets interim deadlines providing
212-13   for publication of flow determinations for individual rivers and
212-14   streams on a reasonably consistent basis throughout the prescribed
212-15   study period.  Before publication, completed studies shall be
212-16   submitted for comment to the commission, the board, and the Parks
212-17   and Wildlife Department.
212-18         (e)  Results of studies completed under this section shall be
212-19   considered by the commission in its review of any management plan,
212-20   water right, or interbasin transfer.
212-21         (f)  The board may authorize the use of money from the
212-22   research and planning fund established under Chapter 15 to
212-23   accomplish the purposes of this section.  The money shall be used
212-24   by the board in cooperation with the commission and the Parks and
212-25   Wildlife Department for interagency contracts with cooperating
212-26   agencies and universities and contracts with private sector
 213-1   establishments, as necessary, to accomplish the purposes of this
 213-2   section.
 213-3         SECTION 4.18.  Subsection (c), Section 17.853, Water Code, is
 213-4   amended to read as follows:
 213-5         (c)  The board may use the fund only:
 213-6               (1)  to provide state matching funds for federal funds
 213-7   provided to the state water pollution control revolving fund or to
 213-8   any additional state revolving fund created under Subchapter J,
 213-9   Chapter 15;
213-10               (2)  to provide financial assistance from the proceeds
213-11   of taxable bond issues to water supply corporations organized under
213-12   Chapter 67, and other participants;
213-13               (3)  to provide financial assistance to participants
213-14   for the construction of water supply projects and treatment works;
213-15               (4)  to provide financial assistance for an interim
213-16   construction period to participants for projects for which the
213-17   board will provide long-term financing through the water
213-18   development fund; [and]
213-19               (5)  to provide financial assistance for water supply
213-20   and sewer service projects in economically distressed areas as
213-21   provided by Subchapter K, Chapter 17, to the extent the board can
213-22   make that assistance without adversely affecting the current or
213-23   future integrity of the fund or of any other financial assistance
213-24   program of the board; and
213-25               (6)  to provide funds to the water infrastructure fund
213-26   created under Section 15.903.
 214-1         SECTION 4.19.  Subdivisions (2) and (6), Section 17.871,
 214-2   Water Code, are amended to read as follows:
 214-3               (2)  "Borrower district" means a political subdivision,
 214-4   including a district or authority created under Article III,
 214-5   Sections 52(b)(1) and (2), or Article XVI, Section 59, of the Texas
 214-6   Constitution, that receives or is eligible to receive a
 214-7   conservation loan from the board for a purpose described by Section
 214-8   17.895 or 17.8955 [improvement to district facilities].
 214-9               (6)  "Lender district" means a political subdivision,
214-10   including a soil and water conservation district under Chapter 201,
214-11   Agriculture Code, a groundwater [an underground water] conservation
214-12   district created under Article XVI, Section 59, of the Texas
214-13   Constitution, or a district or authority created under Article III,
214-14   Section 52(b)(1), or Article XVI, Section 59, of the Texas
214-15   Constitution authorized to supply water for irrigation purposes,
214-16   that is eligible to receive or that receives a loan from the board
214-17   for the purpose of making conservation loans to individual
214-18   borrowers.
214-19         SECTION 4.20.  Section 17.895, Water Code, is amended to read
214-20   as follows:
214-21         Sec. 17.895.  CONSERVATION LOANS.  (a)  This section applies
214-22   only to a conservation loan from a lender district that is:
214-23               (1)  a soil and water conservation district under
214-24   Chapter 201, Agriculture Code;
214-25               (2)  a groundwater conservation district created under
214-26   Section 59, Article XVI, Texas Constitution; or
 215-1               (3)  a district or authority created under Section
 215-2   52(b)(1), Article III, or Section 59, Article XVI, Texas
 215-3   Constitution.
 215-4         (b)  The board or a lender district [districts] may make
 215-5   conservation loans for capital equipment or materials, labor,
 215-6   preparation costs, and installation costs:
 215-7               (1)  to improve water use efficiency of water delivery
 215-8   and application on existing irrigation systems;
 215-9               (2)  for preparing irrigated land to be converted to
215-10   dryland conditions; and
215-11               (3)  for preparing dryland for more efficient use of
215-12   natural precipitation[;]
215-13               [(4)  for preparing and maintaining land to be used for
215-14   brush control activities, including but not limited to activities
215-15   conducted pursuant to Chapter 203, Agriculture Code; or]
215-16               [(5)  for implementing precipitation enhancement
215-17   activities in areas of the state where such activities would be, in
215-18   the board's judgment, most effective].
215-19         (c) [(b)]  Conservation loans for the purposes listed in
215-20   Subsection (b) [(a)] may be made by lender districts to individual
215-21   borrowers for use on private property or by the board to borrower
215-22   districts [for use on district facilities].
215-23         (d) [(c)]  The board may make conservation loans to borrower
215-24   districts for the cost of purchasing and installing devices, on
215-25   public or private property, designed to indicate the amount of
215-26   water withdrawn for irrigation purposes.
 216-1         (e) [(d)]  For purposes of this section, the board or lender
 216-2   districts may seek the advice of the Department of Agriculture
 216-3   regarding the feasibility of a project for which a conservation
 216-4   loan is sought.
 216-5         SECTION 4.21.  Subchapter J, Chapter 17, Water Code, is
 216-6   amended by adding Section 17.8955 to read as follows:
 216-7         Sec. 17.8955.  CONSERVATION LOANS FOR BRUSH CONTROL AND
 216-8   PRECIPITATION ENHANCEMENT.  (a)  The board or a lender district may
 216-9   make a conservation loan for capital equipment or materials, labor,
216-10   preparation costs, and installation costs for:
216-11               (1)  preparing and maintaining land to be used for
216-12   brush control activities, including activities conducted under
216-13   Chapter 203, Agriculture Code; or
216-14               (2)  implementing precipitation enhancement activities
216-15   in areas of the state where those activities would be, in the
216-16   board's judgment, most effective.
216-17         (b)  A conservation loan for a purpose listed in Subsection
216-18   (a) may be made by a lender district to an individual borrower for
216-19   use on private property or by the board to a borrower district.
216-20         SECTION 4.22.  Subchapter L, Chapter 17, Water Code, is
216-21   amended by adding Section 17.9615 to read as follows:
216-22         Sec. 17.9615.  TRANSFERS TO RURAL WATER ASSISTANCE FUND.
216-23   (a)  The board may direct the comptroller to transfer amounts from
216-24   the financial assistance account to the rural water assistance fund
216-25   to provide financial assistance under this subchapter for the
216-26   purposes provided in Section 15.954.
 217-1         (b)  The board shall use the rural water assistance fund as a
 217-2   source of revenue to be deposited in accordance with this
 217-3   subchapter for the payment of principal and interest on water
 217-4   financial assistance bonds issued by the board, the proceeds of
 217-5   which are to be deposited into the rural water assistance fund and
 217-6   to be used to make payments under a bond enhancement agreement with
 217-7   respect to principal or interest on the water financial assistance
 217-8   bonds.
 217-9         SECTION 4.23.  Subchapter L, Chapter 17, Water Code, is
217-10   amended by adding Section 17.9616 to read as follows:
217-11         Sec. 17.9616.  TRANSFER TO WATER INFRASTRUCTURE FUND.
217-12   (a)  The board may direct the comptroller to transfer amounts from
217-13   the financial assistance account to the water infrastructure fund
217-14   to provide financial assistance under this subchapter for the
217-15   purposes provided in Section 15.904.
217-16         (b)  The board shall use the water infrastructure fund as a
217-17   source of revenue to be deposited in accordance with this
217-18   subchapter for the payment of principal and interest on water
217-19   financial assistance bonds issued by the board, the proceeds of
217-20   which are to be deposited into the water infrastructure fund and to
217-21   be used to make payments under a bond enhancement agreement with
217-22   respect to principal or interest on the water financial assistance
217-23   bonds.
217-24         SECTION 4.24.  Section 11.32, Tax Code, is amended to read as
217-25   follows:
217-26         Sec. 11.32.  CERTAIN WATER CONSERVATION INITIATIVES.  The
 218-1   governing body of a taxing unit by official action of the governing
 218-2   body adopted in the manner required by law for official actions may
 218-3   exempt from taxation part or all of the assessed value of property
 218-4   on which approved water conservation initiatives, desalination
 218-5   projects, or brush control initiatives have been implemented.  For
 218-6   purposes of this section, approved water conservation,
 218-7   desalination, and brush control initiatives shall be designated
 218-8   pursuant to an ordinance or other law adopted by the governing
 218-9   unit.
218-10         SECTION 4.25.  Subchapter H, Chapter 151, Tax Code, is
218-11   amended by adding Section 151.355 to read as follows:
218-12         Sec. 151.355.  WATER-RELATED EXEMPTIONS.  The following are
218-13   exempted from taxes imposed by this chapter:
218-14               (1)  rainwater harvesting equipment or supplies, water
218-15   recycling and reuse equipment or supplies, or other equipment,
218-16   services, or supplies used to reduce or eliminate water use;
218-17               (2)  equipment, services, or supplies used for
218-18   desalination of surface water or groundwater;
218-19               (3)  equipment, services, or supplies used for brush
218-20   control designed to enhance the availability of water;
218-21               (4)  equipment, services, or supplies used for
218-22   precipitation enhancement;
218-23               (5)  equipment, services, or supplies used to construct
218-24   or operate a water or wastewater system or component of a system
218-25   sponsored by a political subdivision, as defined by Section 15.001,
218-26   Water Code, which is certified by the Texas Natural Resource
 219-1   Conservation Commission as providing regional water or wastewater
 219-2   service; and
 219-3               (6)  equipment, services, or supplies used to construct
 219-4   or operate a water supply or wastewater system by a private entity
 219-5   as a public-private partnership, as certified by the political
 219-6   subdivision, as defined by Section 15.001, Water Code, that is a
 219-7   party to the project.
 219-8             ARTICLE 5.  JOINT COMMITTEE ON WATER RESOURCES
 219-9         SECTION 5.01.  In this article, "committee" means the joint
219-10   committee on water resources.
219-11         SECTION 5.02.  The committee shall conduct an interim study
219-12   and make recommendations regarding:
219-13               (1)  increasing the efficient use of existing water
219-14   resources;
219-15               (2)  developing sufficient long-term water financing
219-16   strategies;
219-17               (3)  improving existing water conveyance systems;
219-18               (4)  water marketing;
219-19               (5)  determining the appropriate role of environmental
219-20   and wildlife concerns in water permitting and water development;
219-21   and
219-22               (6)  protection of the natural condition of beds and
219-23   banks of the state-owned watercourses.
219-24         SECTION 5.03.  The committee is composed of six members as
219-25   follows:
219-26               (1)  the chair of the Senate Committee on Natural
 220-1   Resources and the chair of the House Committee on Natural
 220-2   Resources;
 220-3               (2)  two members of the senate appointed by the
 220-4   lieutenant governor; and
 220-5               (3)  two members of the house of representatives
 220-6   appointed by the speaker of the house of representatives.
 220-7         SECTION 5.04.  The committee shall:
 220-8               (1)  meet at least annually with the Texas Natural
 220-9   Resource Conservation Commission and the Texas Water Development
220-10   Board; and
220-11               (2)  receive information relating to:
220-12                     (A)  encouraging the effective development of
220-13   water marketing and water movement;
220-14                     (B)  prioritizing the use of state funds for
220-15   financing the development and conservation of water resources; and
220-16                     (C)  identifying reasonable mechanisms, including
220-17   measures for encouraging donation of water rights, for protecting
220-18   instream uses.
220-19         SECTION 5.05.  Not later than November 1, 2002, the committee
220-20   shall make a final report to the lieutenant governor, the speaker
220-21   of the house of representatives, and the 78th Legislature
220-22   evaluating the issues described in Section 5.02 of this article.
220-23         SECTION 5.06.  The committee has the authority necessary to
220-24   perform its duties and, in connection with those duties, may call
220-25   and hold hearings.
220-26         SECTION 5.07.  The committee may request the assistance of
 221-1   state agencies, departments, or offices to carry out its duties.
 221-2         SECTION 5.08.  The Senate Committee on Natural Resources and
 221-3   the House Committee on Natural Resources shall provide staff to the
 221-4   committee.
 221-5         SECTION 5.09.  The committee shall submit a proposed budget
 221-6   to the appropriate committee on administration in each house of the
 221-7   legislature.  The administration committees shall jointly approve
 221-8   the committee budget in an amount appropriate for the committee to
 221-9   accomplish its duties under this article.
221-10         SECTION 5.10.  The committee may travel around the state and
221-11   hold hearings or public meetings as needed to fulfill its duties
221-12   under this article.
221-13         SECTION 5.11.  This article expires and the committee is
221-14   abolished on January 1, 2003.
221-15            ARTICLE 6.  RULEMAKING PROCEDURES FOR THE EDWARDS
221-16                            AQUIFER AUTHORITY
221-17         SECTION 6.01.  Chapter 626, Acts of the 73rd Legislature,
221-18   Regular Session, 1993, is amended by adding Section 1.115 to read
221-19   as follows:
221-20         Sec. 1.115.  RULEMAKING PROCEDURES.  (a)  The authority shall
221-21   comply with the procedures provided by this section in adopting
221-22   rules.
221-23         (b)  The authority shall provide, by using the United States
221-24   mail, notice of a proposed rule to all applicants and permit
221-25   holders.  The authority shall publish in a newspaper of general
221-26   circulation within the boundaries of the authority notice of a
 222-1   public hearing on a proposed rule at least 14 days before the date
 222-2   of the public hearing on the rule.  The notice must include:
 222-3               (1)  the date, time, and place of the public hearing;
 222-4               (2)  a statement of the general subject matter of the
 222-5   proposed rule;
 222-6               (3)  the procedures for obtaining copies of the
 222-7   proposed rule and for submitting comments; and
 222-8               (4)  the deadline for submitting comments.
 222-9         (c)  The board shall allow at least 45 days for comment on a
222-10   proposed rule, other than an emergency rule, before the board
222-11   adopts the rule.  The board shall consider all written comments and
222-12   shall, in the order adopting the rule, state the reasons and
222-13   justification for the rule and the authority's responses to the
222-14   written comments.
222-15         (d)  The meeting at which a proposed rule is adopted as a
222-16   final rule must be an open meeting, and the public must be allowed
222-17   to make comments on the proposed rule and the agency responses.  A
222-18   proposed rule becomes final and effective on the 10th day after the
222-19   date the rule is adopted by the board.
222-20         (e)  Notwithstanding Subsections (b)-(d) of this section, the
222-21   board may adopt emergency rules in anticipation of imminent harm to
222-22   human health, safety, or welfare, or if compliance with the
222-23   procedures provided in Subsections (b)-(d) of this section would
222-24   prevent an effective response to emergency aquifer or springflow
222-25   conditions.  The board may adopt emergency rules five days after
222-26   providing public notice.  Emergency rules are effective immediately
 223-1   on adoption for a period of 120 days and may be renewed once for
 223-2   not more than 60 days.
 223-3         (f)  Subsections (b)-(d) of this section do not apply to the
 223-4   adoption of bylaws or internal procedures of the board and
 223-5   authority.
 223-6         SECTION 6.02.  Section 1.15, Chapter 626, Acts of the 73rd
 223-7   Legislature, Regular Session, 1993, is amended by adding
 223-8   Subsections (e) and (f) to read as follows:
 223-9         (e)  The authority shall conduct a contested case hearing on
223-10   a permit application if a person with a personal justiciable
223-11   interest related to the application requests a hearing on the
223-12   application.
223-13         (f)  The authority shall adopt rules establishing procedures
223-14   for contested case hearings consistent with Subchapters C, D, and
223-15   F, Chapter 2001, Government Code.
223-16         SECTION 6.03.  Subsection (h), Section 1.11, and Subsection
223-17   (e), Section 1.41, Chapter 626, Acts of the 73rd Legislature,
223-18   Regular Session, 1993, are repealed.
223-19         SECTION 6.04.  A rule adopted by the Edwards Aquifer
223-20   Authority before the effective date of this Act remains in effect
223-21   until repealed, amended, or readopted.  Nothing contained in this
223-22   article shall be construed as repealing the applicability of the
223-23   open meetings law, Chapter 551, Government Code, or the public
223-24   information law, Chapter 552, Government Code, to the Edwards
223-25   Aquifer Authority.
223-26         SECTION 6.05.  The rules in 31 T.A.C. Part 20 shall continue
 224-1   in effect until replaced by rules adopted pursuant to this article.
 224-2   The secretary of state shall delete 31 T.A.C. Part 20.
 224-3     ARTICLE 7.  LIMITED LIABILITY FOR AQUATIC HERBICIDE APPLICATION
 224-4         SECTION 7.01.  Subchapter B, Chapter 26, Water Code, is
 224-5   amended by adding Section 26.050 to read as follows:
 224-6         Sec. 26.050.  LIMITED LIABILITY FOR AQUATIC HERBICIDE
 224-7   APPLICATION.  (a)  In this section, "commercially licensed aquatic
 224-8   herbicide applicator" means a person who holds a commercial
 224-9   applicator license issued by the Department of Agriculture under
224-10   Chapter 76, Agriculture Code, to apply aquatic herbicides.
224-11         (b)  Except as provided by Chapter 12, Parks and Wildlife
224-12   Code, a commercially licensed aquatic herbicide applicator working
224-13   under contract with a river authority organized pursuant to Section
224-14   59, Article XVI, Texas Constitution, is not liable for damages in
224-15   excess of $2 million for each occurrence of personal injury,
224-16   property damage, or death resulting directly or indirectly from the
224-17   application of aquatic herbicide in compliance with such contract,
224-18   applicable law, and the license terms or permit.
224-19         (c)  The control and elimination of noxious weeds, grasses,
224-20   and vegetation in the rivers, tributaries, impoundments, and
224-21   reservoirs of the state through the application by river
224-22   authorities or their agents, employees, or contractors, in
224-23   compliance with applicable law, licenses, and permits, of aquatic
224-24   herbicides are essential governmental functions, and except to the
224-25   extent provided in Chapter 101, Civil Practice and Remedies Code,
224-26   nothing herein shall be deemed or construed to waive, limit, or
 225-1   restrict the governmental immunity of river authorities in the
 225-2   performance of such governmental functions.
 225-3         (d)  The limited liability provided by this section does not
 225-4   apply to a commercially licensed aquatic herbicide applicator if
 225-5   the applicator uses the wrong aquatic herbicide, fails to follow
 225-6   manufacturers' warnings, instructions, and directions for the
 225-7   application of the aquatic herbicide, fails to follow the
 225-8   directions of the river authority concerning the application of the
 225-9   aquatic herbicide, or applies the aquatic herbicide in a manner
225-10   that violates federal or state law, rules, or regulations.
225-11           ARTICLE 8.  CONCENTRATED ANIMAL FEEDING OPERATIONS
225-12         SECTION 8.01.  Section 26.0286, Water Code, is amended to
225-13   read as follows:
225-14         Sec. 26.0286.  PROCEDURES APPLICABLE TO PERMITS FOR CERTAIN
225-15   CONCENTRATED ANIMAL FEEDING OPERATIONS.  (a)  In this section:
225-16               (1)  "Sole-source[, "sole-source] surface drinking
225-17   water supply" means a body of surface water that[:]
225-18               [(1)]  is designated as a sole-source surface drinking
225-19   [public] water supply in rules adopted by the commission [under
225-20   Section 26.023; and]
225-21               [(2)  is the single source of supply of a public water
225-22   supply system, exclusive of emergency water interconnections].
225-23               (2)  "Protection zone" means an area so designated by
225-24   commission rule under Subsection (c).
225-25         (b)  The commission shall process an application for
225-26   authorization to construct or operate a concentrated animal feeding
 226-1   operation as a specific permit under Section 26.028 subject to the
 226-2   procedures provided by Subchapter M, Chapter 5, if, on the date the
 226-3   commission determines that the application is administratively
 226-4   complete, any part of a pen, lot, pond, or other type of control or
 226-5   retention facility or structure of the concentrated animal feeding
 226-6   operation is located or proposed to be located within the
 226-7   protection zone of a sole-source surface drinking water supply.
 226-8   For the purposes of this subsection, a land application area is not
 226-9   considered a control or retention facility[:]
226-10               [(1)  in the watershed of a sole-source surface
226-11   drinking water supply; and]
226-12               [(2)  sufficiently close, as determined by the
226-13   commission by rule, to an intake of a public water supply system in
226-14   the sole-source surface drinking water supply that contaminants
226-15   discharged from the concentrated animal feeding operation could
226-16   potentially affect the public drinking water supply].
226-17         (c)  For the purposes of this section only, the commission by
226-18   rule shall designate a surface water body as a sole-source surface
226-19   drinking water supply if that surface water body is identified as a
226-20   public water supply in rules adopted by the commission under
226-21   Section 26.023 and is the sole source of supply of a public water
226-22   supply system, exclusive of emergency water connections.  At the
226-23   same time, the commission shall designate as a protection zone any
226-24   area within the watershed of a sole-source surface drinking water
226-25   supply that is:
226-26               (1)  within two miles of the normal pool elevation of a
 227-1   body of surface water that is a sole-source surface drinking water
 227-2   supply;
 227-3               (2)  within two miles of that part of a perennial
 227-4   stream that is:
 227-5                     (A)  a tributary of a sole-source surface
 227-6   drinking water supply; and
 227-7                     (B)  within three linear miles upstream of the
 227-8   normal pool elevation of a sole-source surface drinking water
 227-9   supply; or
227-10               (3)  within two miles of that part of a stream that is
227-11   a sole-source surface drinking water supply, extending three linear
227-12   miles upstream from the water supply intake.
227-13         SECTION 8.02.  Not later than the 45th day after the
227-14   effective date of this Act, the Texas Natural Resource Conservation
227-15   Commission by order shall identify surface water bodies that are
227-16   considered "sole-source surface drinking water supplies" for
227-17   purposes of Subsection (b), Section 26.0286, Water Code, as amended
227-18   by this Act, and shall designate the protection zones for those
227-19   identified water bodies.  The order expires on the date on which
227-20   the commission adopts final rules under Subsection (c), Section
227-21   26.0286, Water Code, as added by this Act.
227-22         ARTICLE 9.  REVOCATION OF CERTIFICATE OF PUBLIC UTILITY
227-23         SECTION 9.01.  Subchapter G, Chapter 13, Water Code, is
227-24   amended by adding Section 13.2541 to read as follows:
227-25         Sec. 13.2541.  REVOCATION OF CERTIFICATE WHEN SERVICE
227-26   PROVIDED TO A MUNICIPALITY.  (a)  This section applies only to a
 228-1   municipality with a population of more than 1.3 million.
 228-2         (b)  On request of a municipality served by a public utility,
 228-3   the commission at any time after notice and hearing may revoke the
 228-4   public utility's certificate of public convenience and necessity if
 228-5   it finds that the public utility:
 228-6               (1)  has never provided, is no longer providing, or has
 228-7   failed to provide continuous and adequate service in the
 228-8   municipality requesting the revocation; or
 228-9               (2)  has been grossly or continuously mismanaged or has
228-10   grossly or continuously not complied with this chapter, commission
228-11   rules, or commission orders.
228-12         (c)  If the certificate of a public utility is revoked under
228-13   Subsection (b), the municipality that requested the revocation
228-14   shall operate the decertified public utility for an interim period
228-15   prescribed by commission rule and shall request commission approval
228-16   to acquire the decertified public utility's facilities and to
228-17   transfer the decertified public utility's certificate of
228-18   convenience and necessity to the municipality.  The municipality
228-19   must apply in accordance with Subchapter H.
228-20         (d)  The compensation paid to the decertified public utility
228-21   for its facilities shall be determined by a qualified individual or
228-22   firm serving as independent appraiser agreed upon by the
228-23   decertified public utility and the municipality.  The determination
228-24   of compensation by the independent appraiser shall be binding on
228-25   the commission.  The municipality shall pay the costs of the
228-26   independent appraiser.  For the purpose of implementing this
 229-1   section, the value of real property shall be determined according
 229-2   to the standards prescribed by Chapter 21, Property Code, governing
 229-3   actions in eminent domain.
 229-4         (e)  The commission shall determine whether the municipality
 229-5   shall pay the compensation in a lump sum or over a specified
 229-6   period.
 229-7                   ARTICLE 10.  WATER UTILITY SYSTEMS
 229-8         SECTION 10.01.  Section 13.137, Water Code, is amended to
 229-9   read as follows:
229-10         Sec. 13.137.  OFFICE AND OTHER BUSINESS LOCATIONS OF UTILITY;
229-11   RECORDS; REMOVAL FROM STATE.  (a)  Every utility shall:
229-12               (1)  make available and notify its customers of a
229-13   business location where its customers may make payments to prevent
229-14   disconnection of or to restore service:
229-15                     (A)  in each county in which the utility provides
229-16   service; or
229-17                     (B)  not more than 20 miles from the residence of
229-18   any residential customer if there is no location to receive
229-19   payments in the county; and
229-20               (2)  have an office in a county of this state or in the
229-21   immediate area in which its property or some part of its property
229-22   is located in which it shall keep all books, accounts, records, and
229-23   memoranda required by the commission to be kept in this state.
229-24         (b)  The commission by rule may provide for waiving the
229-25   requirements of Subsection (a)(1) for a utility for which meeting
229-26   those requirements would cause a rate increase or otherwise harm or
 230-1   inconvenience customers.  The rules must provide for an additional
 230-2   14 days to be given for a customer to pay before a utility that is
 230-3   granted a waiver may disconnect service for late payment.
 230-4         (c)  Books, accounts, records, or memoranda required by the
 230-5   regulatory authority to be kept in the state may not be removed
 230-6   from the state, except on conditions prescribed by the commission.
 230-7         SECTION 10.02.  Section 13.144, Water Code, is amended to
 230-8   read as follows:
 230-9         Sec. 13.144.  NOTICE OF WHOLESALE WATER SUPPLY CONTRACT.  A
230-10   district or authority created under Section 52, Article III, or
230-11   Section 59, Article XVI, Texas Constitution, a retail public
230-12   utility, a wholesale water service, or other person providing a
230-13   retail public utility with a wholesale water supply shall provide
230-14   the commission with a certified copy of any wholesale water supply
230-15   contract with a retail public utility within 30 days after the date
230-16   of the execution of the contract.  The submission must include the
230-17   amount of water being supplied, term of the contract, consideration
230-18   being given for the water, purpose of use, location of use, source
230-19   of supply, point of delivery, limitations on the reuse of water, a
230-20   disclosure of any affiliated interest between the parties to the
230-21   contract, and any other condition or agreement relating to the
230-22   contract.
230-23         SECTION 10.03.  Subchapter E, Chapter 13, Water Code, is
230-24   amended by adding Section 13.145 to read as follows:
230-25         Sec. 13.145.  MULTIPLE SYSTEMS CONSOLIDATED UNDER TARIFF.  A
230-26   utility may consolidate more than one system under a single tariff
 231-1   only if:
 231-2               (1)  the systems under the tariff are substantially
 231-3   similar in terms of facilities, quality of service, and cost of
 231-4   service; and
 231-5               (2)  the tariff provides for rates that promote water
 231-6   conservation for single-family residences and landscape irrigation.
 231-7         SECTION 10.04.  Section 13.182, Water Code, is amended to
 231-8   read as follows:
 231-9         Sec. 13.182.  JUST AND REASONABLE RATES.  (a)  The regulatory
231-10   authority shall ensure that every rate made, demanded, or received
231-11   by any utility or by any two or more utilities jointly shall be
231-12   just and reasonable.
231-13         (b)  Rates shall not be unreasonably preferential,
231-14   prejudicial, or discriminatory but shall be sufficient, equitable,
231-15   and consistent in application to each class of consumers.
231-16         (c)  For ratemaking purposes, the commission may treat two or
231-17   more municipalities served by a utility as a single class wherever
231-18   the commission considers that treatment to be appropriate.
231-19         (d)  The commission by rule shall establish a preference that
231-20   rates under a consolidated  tariff  be consolidated by region.  The
231-21   regions under consolidated tariffs must be determined on a
231-22   case-by-case basis.
231-23         SECTION 10.05.  Section 13.183, Water Code, is amended by
231-24   amending Subsection (c) and adding Subsections (d) and (e) to read
231-25   as follows:
231-26         (c)  To ensure that retail customers receive a higher
 232-1   quality, more affordable, or more reliable water or sewer service,
 232-2   to encourage regionalization, or to maintain financially stable and
 232-3   technically sound utilities, the regulatory authority, by rule or
 232-4   ordinance, as appropriate, may adopt specific alternative
 232-5   ratemaking [may develop] methodologies for water or sewer rates
 232-6   based on factors other than rate of return and those specified in
 232-7   Section 13.185.  Overall revenues determined according [pursuant]
 232-8   to an alternative ratemaking [alternate] methodology adopted
 232-9   [developed] under this section must provide revenues to the utility
232-10   that satisfy the requirements of Subsection (a).  The regulatory
232-11   authority may not approve rates under an alternative ratemaking
232-12   methodology unless the regulatory authority adopts the methodology
232-13   before the date the rate application was administratively complete.
232-14         (d)  A regulatory authority other than the commission may not
232-15   approve an acquisition adjustment for a system purchased before the
232-16   effective date of an ordinance authorizing acquisition adjustments.
232-17         (e)  In determining to use an alternative ratemaking
232-18   methodology [alternate ratemaking methodologies], the regulatory
232-19   authority shall assure that rates, operations, and services are
232-20   just and reasonable to the consumers and to the utilities.
232-21         SECTION 10.06.  Section 13.187, Water Code, is amended to
232-22   read as follows:
232-23         Sec. 13.187.  STATEMENT OF INTENT TO CHANGE RATES; HEARING;
232-24   DETERMINATION OF RATE LEVEL.  (a)  A utility may not make changes
232-25   in its rates except by delivering a statement of intent to each
232-26   ratepayer and with the regulatory authority having original
 233-1   jurisdiction at least 60 [30] days before the effective date of the
 233-2   proposed change.  The effective date of the new rates must be the
 233-3   first day of a billing period, and the new rates may not apply to
 233-4   service received before the effective date of the new rates.  The
 233-5   statement of intent must include:
 233-6               (1)  the information required by the regulatory
 233-7   authority's rules;
 233-8               (2)  a billing comparison regarding the existing water
 233-9   rate and the new water rate computed for the use of:
233-10                     (A)  10,000 gallons of water; and
233-11                     (B)  30,000 gallons of water; and
233-12               (3)  a billing comparison regarding the existing sewer
233-13   rate and the new sewer rate computed for the use of 10,000 gallons,
233-14   unless the utility proposes a flat rate for sewer services.
233-15         (b)  A copy of the statement of intent shall be mailed or
233-16   delivered to the appropriate offices of each affected municipality,
233-17   and to any other affected persons as required by the regulatory
233-18   authority's rules.
233-19         (c)  When the statement of intent is delivered, the utility
233-20   shall file with the regulatory authority an application to change
233-21   rates.  The application must include information the regulatory
233-22   authority requires by rule.  If the utility fails to provide within
233-23   a reasonable time after the application is filed the necessary
233-24   documentation or other evidence that supports the costs and
233-25   expenses that are shown in the application, the regulatory
233-26   authority may disallow the nonsupported expenses.
 234-1         (d)  If the application or the statement of intent is not
 234-2   substantially complete or does not comply with the regulatory
 234-3   authority's rules, it may be rejected and the effective date of the
 234-4   rate change may be suspended until a properly completed application
 234-5   is accepted by the regulatory authority and a proper statement of
 234-6   intent is provided.  The commission may also suspend the effective
 234-7   date of any rate change if the utility does not have a certificate
 234-8   of public convenience and necessity or a completed application for
 234-9   a certificate or to transfer a certificate pending before the
234-10   commission or if the utility is delinquent in paying the assessment
234-11   and any applicable penalties or interest required by Section
234-12   5.235(n) of this code.
234-13         (e) [(b)]  If, before the 91st day [within 60 days] after the
234-14   effective date of the rate change, the regulatory authority
234-15   receives a complaint from any affected municipality, or from the
234-16   lesser of 1,000 or 10 percent of the ratepayers of the utility over
234-17   whose rates the regulatory authority has original jurisdiction, the
234-18   regulatory authority shall set the matter for hearing.
234-19         (f)  The regulatory authority may set the matter for hearing
234-20   on its own motion at any time within 120 days after the effective
234-21   date of the rate change.  If more than half of the ratepayers of
234-22   the utility receive service in a county with a population of more
234-23   than 2.5 million, the hearing must be held at a location in that
234-24   county.
234-25         (g)  The hearing may be informal.
234-26         (h)  If, after hearing, the regulatory authority finds the
 235-1   rates currently being charged or those proposed to be charged are
 235-2   unreasonable or in violation of law, the regulatory authority shall
 235-3   determine the rates to be charged by the utility and shall fix the
 235-4   rates by order served on the utility.
 235-5         (i) [(c)]  The regulatory authority, pending final action in
 235-6   a rate proceeding, may order the utility to deposit all or part of
 235-7   the rate increase received or to be received into an escrow account
 235-8   with a financial institution approved by the regulatory authority.
 235-9   Unless otherwise agreed to by the parties to the rate proceeding,
235-10   the utility shall refund or credit against future bills all sums
235-11   collected during the pendency of the rate proceeding in excess of
235-12   the rate finally ordered plus interest as determined by the
235-13   regulatory authority.
235-14         (j)  For good cause shown, the regulatory authority may
235-15   authorize the release of funds to the utility from the escrow
235-16   account during the pendency of the proceeding.
235-17         (k)  If the regulatory authority receives at least the number
235-18   of complaints from ratepayers required for the regulatory authority
235-19   to set a hearing under Subsection (e), the regulatory authority
235-20   may, pending the hearing and a decision, suspend the date the rate
235-21   change would otherwise be effective.  The proposed rate may not be
235-22   suspended for longer than:
235-23               (1)  90 days by a local regulatory authority; or
235-24               (2)  150 days by the commission.
235-25         (l)  At any time during the pendency of the rate proceeding
235-26   the regulatory authority may fix interim rates to remain in effect
 236-1   until a final determination is made on the proposed rate.
 236-2         (m)  If the regulatory authority sets a final rate that is
 236-3   higher than the interim rate, the utility shall be allowed to
 236-4   collect the difference between the interim rate and final rate
 236-5   unless otherwise agreed to by the parties to the rate proceeding.
 236-6         (n)  For good cause shown, the regulatory authority may at
 236-7   any time during the proceeding require the utility to refund money
 236-8   collected under a proposed rate before the rate was suspended or an
 236-9   interim rate was established to the extent the proposed rate
236-10   exceeds the existing rate or the interim rate.
236-11         (o)  If a [the] regulatory authority other than the
236-12   commission establishes interim rates or an escrow account, the
236-13   regulatory authority must make a final determination on the rates
236-14   not later than the first anniversary of [within 335 days after] the
236-15   effective date of the interim rates or escrowed rates or the rates
236-16   are automatically approved as requested by the utility.
236-17         (p) [(d)]  Except to implement a rate adjustment provision
236-18   approved by the regulatory authority by rule or ordinance, as
236-19   applicable, or to adjust the rates of a newly acquired utility
236-20   system, a utility or two or more utilities under common control and
236-21   ownership may not file a statement of intent to increase its rates
236-22   more than once in a 12-month period, unless the regulatory
236-23   authority determines that a financial hardship exists.  If the
236-24   regulatory authority requires the utility to deliver a corrected
236-25   statement of intent, the utility is not considered to be in
236-26   violation of the 12-month filing requirement.
 237-1         SECTION 10.07.  Subchapter I, Chapter 13, Water Code, is
 237-2   amended by adding Section 13.343 to read as follows:
 237-3         Sec. 13.343.  WHOLESALE WATER CONTRACTS BETWEEN CERTAIN
 237-4   AFFILIATES.  (a)  The owner of a utility that supplies retail water
 237-5   service may not contract to purchase from an affiliated supplier
 237-6   wholesale water service for any of that owner's systems unless:
 237-7               (1)  the wholesale service is provided for not more
 237-8   than 90 days to remedy an emergency condition, as defined by
 237-9   commission rule; or
237-10               (2)  the executive director determines that the utility
237-11   cannot obtain wholesale water service from another source at a
237-12   lower cost than from the affiliate.
237-13         (b)  The utility may not purchase groundwater from any
237-14   provider if:
237-15               (1)  the source of the groundwater is located in a
237-16   priority groundwater management area; and
237-17               (2)  a wholesale supply of surface water is available.
237-18         SECTION 10.08.  (a)  The changes in law made by this article
237-19   to Chapter 13, Water Code, apply to a proceeding in which the Texas
237-20   Natural Resource Conservation Commission has not issued a final
237-21   order before the effective date of this article; provided, however,
237-22   that this article does not apply to a retail public utility for
237-23   which a final order in any rate proceeding has been issued by the
237-24   Texas Natural Resource Conservation Commission prior to January 1,
237-25   2001, as long as that retail public utility is the same as,
237-26   controlled by, or an affiliate of the retail public utility for
 238-1   which a final order was issued prior to January 1, 2001.  This
 238-2   subsection shall not be construed to permit a public utility to
 238-3   increase rates without obtaining the approval of the Texas Natural
 238-4   Resource Conservation Commission.
 238-5         (b)  Section 13.343, Water Code, as added by this article,
 238-6   does not apply to a contract executed before the effective date of
 238-7   this article.  A contract executed before the effective date of
 238-8   this article is governed by the law in effect on the date it was
 238-9   executed, and that law is continued in effect for that purpose.
238-10                  ARTICLE 11.  MISCELLANEOUS PROVISIONS
238-11         SECTION 11.01.  Section 26.177, Water Code, is amended by
238-12   adding Subsection (h) to read as follows:
238-13         (h)  Property subject to a permit or plat in the
238-14   extraterritorial jurisdiction of a municipality may not be
238-15   subjected to new or additional water pollution regulations if the
238-16   property is transferred to another municipality's extraterritorial
238-17   jurisdiction, and all provisions of Chapter 245, Local Government
238-18   Code, shall apply to the property.  If the release of
238-19   extraterritorial jurisdiction for the purpose of transferring it to
238-20   another municipality results in property not being subject to any
238-21   municipality's water pollution regulations on the date of release,
238-22   the releasing municipality retains its jurisdiction to enforce its
238-23   water pollution regulations until the property is included in the
238-24   extraterritorial jurisdiction of the receiving municipality.
238-25         SECTION 11.02.  Section 26.359, Water Code, is amended to
238-26   read as follows:
 239-1         Sec. 26.359.  LOCAL REGULATION OR ORDINANCE.  (a)  In this
 239-2   section, "local government" means a school district, county,
 239-3   municipality, junior college district, river authority, water
 239-4   district or other special district, or other political subdivision
 239-5   created under the constitution or a statute of this state.
 239-6         (b)  A [This subchapter establishes a unified statewide
 239-7   program for underground and surface water protection, and any
 239-8   local] regulation or ordinance adopted by a local government that
 239-9   imposes standards [is effective only to the extent the regulation
239-10   or ordinance does not conflict with the standards adopted] for the
239-11   design, construction, installation, or operation of underground
239-12   storage tanks is not valid [under this subchapter].
239-13         (c)  This section does not apply to a rule adopted by the
239-14   Edwards Aquifer Authority, or to a regulation or ordinance in
239-15   effect as of January 1, 2001, or thereafter amended.
239-16         SECTION 11.03.  (a)  Section 27.051, Water Code, is amended
239-17   by adding Subsection (h) to read as follows:
239-18         (h)  The commission may not authorize by rule or permit an
239-19   injection well that transects or terminates in the Edwards Aquifer.
239-20   The commission by rule may authorize injection of groundwater
239-21   withdrawn from the Edwards Aquifer, or injections of storm water,
239-22   flood water, or groundwater through improved sinkholes or caves
239-23   located in karst topographic areas.  For purposes of this
239-24   subsection, "Edwards Aquifer" has the meaning assigned by Section
239-25   26.046(a).
239-26         (b)  The change in law made by Subsection (h), Section
 240-1   27.051, Water Code, as added by this section, applies only to an
 240-2   application for a permit that is filed with the Texas Natural
 240-3   Resource Conservation Commission on or after September 1, 2001.
 240-4         SECTION 11.04.  Section 36.121, Water Code, is amended to
 240-5   read as follows:
 240-6         Sec. 36.121.  LIMITATION ON RULEMAKING POWER OF DISTRICTS
 240-7   OVER WELLS IN CERTAIN COUNTIES.  Except as provided by Section
 240-8   36.117, a district that is created under this chapter on or after
 240-9   September 1, 1991, shall exempt from regulation under this chapter
240-10   a well and any water produced or to be produced by a well that is
240-11   located in a county that has a population of 14,000 or less if the
240-12   water is to be used solely to supply a municipality that has a
240-13   population of 121,000 [115,000] or less and the rights to the water
240-14   produced from the well are owned by a political subdivision that is
240-15   not a municipality, or by a municipality that has a population of
240-16   100,000 [93,000] or less, and that purchased, owned, or held rights
240-17   to the water before the date on which the district was created,
240-18   regardless of the date the well is drilled or the water is
240-19   produced.  The district may not prohibit the political subdivision
240-20   or municipality from transporting produced water inside or outside
240-21   the district's boundaries.
240-22        ARTICLE 12.  NORTH HARRIS COUNTY REGIONAL WATER AUTHORITY
240-23         SECTION 12.01.  Subsection (a), Section 4.06, Chapter 1029,
240-24   Acts of the 76th Legislature, Regular Session, 1999, is amended to
240-25   read as follows:
240-26         (a)  The authority may:
 241-1               (1)  acquire and provide by purchase, gift, [or] lease,
 241-2   contract, or any other legal means, a water treatment or supply
 241-3   system, or any other works, plants, improvements, or facilities
 241-4   necessary or convenient to accomplish the purposes of the
 241-5   authority, or any interest in those assets, inside of or outside of
 241-6   the authority's boundaries;
 241-7               (2)  design, finance, or construct a water treatment or
 241-8   supply system, or any other supply systems, or any other works,
 241-9   plants, improvements, or facilities necessary or convenient to
241-10   accomplish the purposes of the authority, and provide water
241-11   services inside of or outside of the authority's boundaries;
241-12               (3)  maintain, operate, lease, or sell a water
241-13   treatment or supply system, or any other works, plants,
241-14   improvements, or facilities necessary or convenient to accomplish
241-15   the purposes of the authority, that the authority constructs or
241-16   acquires inside of or outside of the authority's boundaries; and
241-17               (4)  contract with any person to operate or maintain a
241-18   water treatment or supply system the person owns.
241-19         ARTICLE 13.  REPORTS; REPEALER; TRANSITION; VALIDATION;
241-20                             EFFECTIVE DATE
241-21         SECTION 13.01.  BOARD STUDY AND REPORT ON FINANCING WATER
241-22   INFRASTRUCTURE PROJECTS.  The Texas Water Development Board shall
241-23   consider the reports submitted by the regional planning groups
241-24   under Subsection (q), Section 16.053, Water Code, as added by this
241-25   Act, relating to financing water infrastructure projects and shall
241-26   consult with potentially impacted groups and other interested
 242-1   persons regarding the information reported and the recommendations
 242-2   made by the regional planning groups.  Not later than October 1,
 242-3   2002, the board shall submit to the legislature a report consisting
 242-4   of the regional planning groups' reports and the board's analysis
 242-5   of and recommendations regarding those reports.
 242-6         SECTION 13.02.  REPEALER.  Sections 35.005 and 35.006, Water
 242-7   Code, are repealed.
 242-8         SECTION 13.03.  TRANSITIONS.  (a)  The changes in law made by
 242-9   this Act by amending Section 17.895, Water Code, and adding Section
242-10   17.8955, Water Code, apply only to a conservation loan for which an
242-11   application is filed on or after the effective date of this Act.  A
242-12   conservation loan for which an application was filed before the
242-13   effective date of this Act is governed by the law in effect
242-14   immediately before that date, and that law is continued in effect
242-15   for that purpose.
242-16         (b)  Not later than January 1, 2002, the Texas Water
242-17   Development Board shall adopt rules to administer Subchapter O,
242-18   Chapter 15, Water Code, as added by this Act, including rules
242-19   establishing procedures for applications for and the award of
242-20   financial assistance for water projects, for the investment of
242-21   funds, and for the administration of the water infrastructure fund,
242-22   as created by this Act.
242-23         (c)  Not later than January 1, 2002, the Texas Water
242-24   Development Board shall adopt rules to administer Subchapter P,
242-25   Chapter 15, Water Code, as added by this Act, including
242-26   establishing procedures for the application for and award of loans,
 243-1   the distribution of loans, the investment of funds, and the
 243-2   administration of loans and the rural water assistance fund, as
 243-3   created by this Act.
 243-4         (d)  Not later than January 1, 2002, the Texas Water
 243-5   Development Board shall adopt rules requiring a holder of a surface
 243-6   water permit, certified filing, or certificate of adjudication for
 243-7   surface water, a holder of a permit for the export of groundwater
 243-8   from a groundwater conservation district, a retail public water
 243-9   supplier, a wholesale water provider, and an irrigation district to
243-10   report to the board information on certain water pipelines and
243-11   other facilities that can be used for water conveyance.
243-12         (e)  The changes in law made by this Act by amending Sections
243-13   11.023 and 11.122, Water Code, shall not change the existing
243-14   priority of any industrial water right holder on the mainstem of
243-15   the Rio Grande below Amistad Reservoir who uses or supplies water
243-16   to a nursery grower.
243-17         (f)  If any changes made by this Act to Chapter 36, Water
243-18   Code, conflict with changes made to Chapter 36, Water Code, by any
243-19   other Act passed by the 77th Legislature, Regular Session, 2001,
243-20   this Act shall prevail.
243-21         SECTION 13.04.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
243-22   (a)  The proper and legal notice of the intention to introduce this
243-23   Act, setting forth the general substance of this Act, has been
243-24   published as provided by law, and the notice and a copy of this Act
243-25   have been furnished to all persons, agencies, officials, or
243-26   entities to which they are required to be furnished by the
 244-1   constitution and other laws of this state, including the governor,
 244-2   who has submitted the notice and Act to the Texas Natural Resource
 244-3   Conservation Commission.
 244-4         (b)  The Texas Natural Resource Conservation Commission has
 244-5   filed its recommendations relating to this Act with the governor,
 244-6   lieutenant governor, and speaker of the house of representatives
 244-7   within the required time.
 244-8         (c)  All requirements of the constitution and laws of the
 244-9   state and the rules and procedures of the legislature with respect
244-10   to the notice, introduction, and passage of this Act are fulfilled
244-11   and accomplished.
244-12         SECTION 13.05.  SEVERABILITY.  If any provision of this Act
244-13   or its application to any person or circumstance is held invalid,
244-14   the invalidity does not affect other provisions or applications of
244-15   this Act that can be given effect without the invalid provision or
244-16   application, and to this end the provisions of this Act are
244-17   declared to be severable.
244-18         SECTION 13.06.  EFFECTIVE DATE.  This Act takes effect
244-19   September 1, 2001.
                                                                  S.B. No. 2
            _______________________________     _______________________________
                President of the Senate              Speaker of the House
                  I hereby certify that S.B. No. 2 passed the Senate on
            April 19, 2001, by a viva-voce vote; May 23, 2001, Senate refused
            to concur in House amendments and requested appointment of
            Conference Committee; May 24, 2001, House granted request of the
            Senate; May 27, 2001, Senate adopted Conference Committee Report by
            a viva-voce vote.
                                                _______________________________
                                                    Secretary of the Senate
                  I hereby certify that S.B. No. 2 passed the House, with
            amendments, on May 22, 2001, by a non-record vote; May 24, 2001,
            House granted request of the Senate for appointment of Conference
            Committee; May 27, 2001, House adopted Conference Committee Report
            by a non-record vote.
                                                _______________________________
                                                    Chief Clerk of the House
            Approved:
            _______________________________
                         Date
            _______________________________
                       Governor