By: Puente, Hilderbran H.B. No. 3
 
 
A BILL TO BE ENTITLED
AN ACT
relating to the management of the water resources of the state,
including the protection of instream flows and freshwater inflows.
       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
       SECTION 1.  The heading to Section 5.506, Water Code, is
amended to read as follows:
       Sec. 5.506.  EMERGENCY SUSPENSION OF PERMIT CONDITION
RELATING TO, AND EMERGENCY AUTHORITY TO MAKE AVAILABLE WATER SET
ASIDE FOR, BENEFICIAL INFLOWS TO AFFECTED BAYS AND ESTUARIES AND
INSTREAM USES.
       SECTION 2.  Section 5.506, Water Code, is amended by adding
Subsection (a-1) and amending Subsections (b) and (c) to read as
follows:
       (a-1)  State water that is set aside by the commission to
meet the needs for freshwater inflows to affected bays and
estuaries and instream uses under Section 11.1471(a)(2) may be made
available temporarily for other essential beneficial uses if the
commission finds that an emergency exists that cannot practically
be resolved in another way.
       (b)  The commission must give written notice of the proposed
action [suspension] to the Parks and Wildlife Department before the
commission suspends a permit condition under Subsection (a) or
makes water available temporarily under Subsection (a-1) [this
section]. The commission shall give the Parks and Wildlife
Department an opportunity to submit comments on the proposed action
[suspension] for a period of 72 hours from receipt of the notice and
must consider those comments before issuing an order implementing
the proposed action [imposing the suspension].
       (c)  The commission may suspend a permit condition under
Subsection (a) or make water available temporarily under Subsection
(a-1) [this section] without notice except as required by
Subsection (b).
       SECTION 3.  Section 5.701(j), Water Code, is amended to read
as follows:
       (j)  The fee for other uses of water not specifically named
in this section is $1 per acre-foot, except that no political
subdivision may be required to pay fees to use water for recharge of
underground freshwater-bearing sands and aquifers or for abatement
of natural pollution. A fee is not required for a water right that
is [This fee is waived for applications for instream-use water
rights] deposited into the Texas Water Trust.
       SECTION 4.  Section 11.002, Water Code, is amended by adding
Subdivisions (15), (16), (17), (18), and (19) to read as follows:
             (15)  "Environmental flow analysis" means the
application of a scientifically derived process for predicting the
response of an ecosystem to changes in instream flows or freshwater
inflows.
             (16)  "Environmental flow regime" means a schedule of
flow quantities that reflects seasonal and yearly fluctuations that
typically would vary geographically, by specific location in a
watershed, and that are shown to be adequate to support a sound
ecological environment and to maintain the productivity, extent,
and persistence of key aquatic habitats in and along the affected
water bodies.
             (17)  "Environmental flow standards" means those
requirements adopted by the commission under Section 11.1471.
             (18)  "Advisory group" means the environmental flows
advisory group.
             (19)  "Science advisory committee" means the Texas
environmental flows science advisory committee.
       SECTION 5.  Section 11.023(a), Water Code, is amended to
read as follows:
       (a)  To the extent that state water has not been set aside by
the commission under Section 11.1471(a)(2) to meet downstream
instream flow needs or freshwater inflow needs, state [State] water
may be appropriated, stored, or diverted for:
             (1)  domestic and municipal uses, including water for
sustaining human life and the life of domestic animals;
             (2)  agricultural uses and industrial uses, meaning
processes designed to convert materials of a lower order of value
into forms having greater usability and commercial value, including
the development of power by means other than hydroelectric;
             (3)  mining and recovery of minerals;
             (4)  hydroelectric power;
             (5)  navigation;
             (6)  recreation and pleasure;
             (7)  public parks; and
             (8)  game preserves.
       SECTION 6.  Section 11.0235, Water Code, is amended by
amending Subsections (c) and (e) and adding Subsections (d-1)
through (d-6) and (f) to read as follows:
       (c)  The legislature has expressly required the commission
while balancing all other public interests to consider and, to the
extent practicable, provide for the freshwater inflows and instream
flows necessary to maintain the viability of the state's streams,
rivers, and bay and estuary systems in the commission's regular
granting of permits for the use of state waters. As an essential
part of the state's environmental flows policy, all permit
conditions relating to freshwater inflows to affected bays and
estuaries and instream flow needs must be subject to temporary
suspension if necessary for water to be applied to essential
beneficial uses during emergencies.
       (d-1) The legislature has determined that existing water
rights that are converted to water rights for environmental
purposes should be enforced in a manner consistent with the
enforcement of water rights for other purposes as provided by the
laws of this state governing the appropriation of state water.
       (d-2)  The legislature finds that to provide certainty in
water management and development and to provide adequate protection
of the state's streams, rivers, and bays and estuaries, the state
must have a process with specific timelines for prompt action to
address environmental flow issues in the state's major basin and
bay systems, especially those systems in which unappropriated water
is still available.
       (d-3)  The legislature finds that:
             (1)  in those basins in which water is available for
appropriation, the commission should establish an environmental
set-aside below which water should not be available for
appropriation; and
             (2)  in those basins in which the unappropriated water
that will be set aside for instream flow and freshwater inflow
protection is not sufficient to fully satisfy the environmental
flow standards established by the commission, a variety of market
approaches, both public and private, for filling the gap must be
explored and pursued.
       (d-4)  The legislature finds that while the state has
pioneered tools to address freshwater inflow needs for bays and
estuaries, there are limitations to those tools in light of both
scientific and public policy evolution. To fully address bay and
estuary environmental flow issues, the foundation of work
accomplished by the state should be improved. While the state's
instream flow studies program appears to encompass a comprehensive
and scientific approach for establishing a process to assess
instream flow needs for rivers and streams across the state, more
extensive review and examination of the details of the program,
which may not be fully developed until the program is under way, are
needed to ensure an effective tool for evaluating riverine
environmental flow conditions.
       (d-5)  The legislature finds that the management of water to
meet instream flow and freshwater inflow needs should be evaluated
on a regular basis and adapted to reflect both improvements in
science related to environmental flows and future changes in
projected human needs for water. In addition, the development of
management strategies for addressing environmental flow needs
should be an ongoing, adaptive process that considers and addresses
local issues.
       (d-6)  The legislature finds that recommendations for state
action to protect instream flows and freshwater inflows should be
developed through a consensus-based, regional approach involving
balanced representation of stakeholders and that such a process
should be encouraged throughout the state.
       (e)  The fact that greater pressures and demands are being
placed on the water resources of the state makes it of paramount
importance to ensure [reexamine the process for ensuring] that
these important priorities are effectively addressed by detailing
how environmental flow standards are to be developed using the
environmental studies that have been and are to be performed by the
state and others and specifying in clear delegations of authority
how those environmental flow standards will be integrated into the
regional water planning and water permitting process [to the
commission].
       (f)  The legislature recognizes that effective
implementation of the approach provided by this chapter for
protecting instream flows and freshwater inflows will require more
effective water rights administration and enforcement systems than
are currently available in most areas of the state.
       SECTION 7.  Subchapter B, Chapter 11, Water Code, is amended
by adding Sections 11.0236, 11.02361, 11.02362, and 11.0237 to read
as follows:
       Sec. 11.0236.  ENVIRONMENTAL FLOWS ADVISORY GROUP.  (a)  In
recognition of the importance that the ecological soundness of our
riverine, bay, and estuary systems and riparian lands has on the
economy, health, and well-being of the state there is created the
environmental flows advisory group.
       (b)  The advisory group is composed of nine members as
follows:
             (1)  three members appointed by the governor;
             (2)  three members of the senate appointed by the
lieutenant governor; and
             (3)  three members of the house of representatives
appointed by the speaker of the house of representatives.
       (c)  Of the members appointed under Subsection (b)(1):
             (1)  one member must be a member of the commission;
             (2)  one member must be a member of the board; and
             (3)  one member must be a member of the Parks and
Wildlife Commission.
       (d)  Each member of the advisory group serves at the will of
the person who appointed the member.
       (e)  The appointed senator with the most seniority and the
appointed house member with the most seniority serve together as
co-presiding officers of the advisory group.
       (f)  A member of the advisory group is not entitled to
receive compensation for service on the advisory group but is
entitled to reimbursement of the travel expenses incurred by the
member while conducting the business of the advisory group, as
provided by the General Appropriations Act.
       (g)  The advisory group may accept gifts and grants from any
source to be used to carry out a function of the advisory group.
       (h)  The commission shall provide staff support for the
advisory group.
       (i)  The advisory group shall conduct public hearings and
study public policy implications for balancing the demands on the
water resources of the state resulting from a growing population
with the requirements of the riverine, bay, and estuary systems
including granting permits for instream flows dedicated to
environmental needs or bay and estuary inflows, use of the Texas
Water Trust, and any other issues that the advisory group
determines have importance and relevance to the protection of
environmental flows. In evaluating the options for providing
adequate environmental flows, the advisory group shall take notice
of the strong public policy imperative that exists in this state
recognizing that environmental flows are important to the
biological health of our public and private lands, streams and
rivers, and bay and estuary systems and are high priorities in the
water management process. The advisory group shall specifically
address:
             (1)  ways that the ecological soundness of those
systems will be ensured in the water rights administration and
enforcement and water allocation processes; and
             (2)  appropriate methods to encourage persons
voluntarily to convert reasonable amounts of existing water rights
to use for environmental flow protection temporarily or
permanently.
       (j)  The advisory group may adopt rules, procedures, and
policies as needed to administer this section, to implement its
responsibilities, and to exercise its authority under Sections
11.02361 and 11.02362.
       (k)  Chapter 2110, Government Code, does not apply to the
size, composition, or duration of the advisory group.
       (l)  Not later than December 1, 2008, and every two years
thereafter, the advisory group shall issue and promptly deliver to
the governor, lieutenant governor, and speaker of the house of
representatives copies of a report summarizing:
             (1)  any hearings conducted by the advisory group;
             (2)  any studies conducted by the advisory group;
             (3)  any legislation proposed by the advisory group;
             (4)  progress made in implementing Sections 11.02361
and 11.02362; and
             (5)  any other findings and recommendations of the
advisory group.
       (m)  The advisory group is abolished on the date that the
commission has adopted environmental flow standards under Section
11.1471 for all of the river basin and bay systems in this state.
       Sec. 11.02361.  TEXAS ENVIRONMENTAL FLOWS SCIENCE ADVISORY
COMMITTEE.  (a)  The Texas environmental flows science advisory
committee consists of at least five but not more than nine members
appointed by the advisory group.
       (b)  The advisory group shall appoint to the science advisory
committee persons who will provide an objective perspective and
diverse technical expertise, including expertise in hydrology,
hydraulics, water resources, aquatic and terrestrial biology,
geomorphology, geology, water quality, computer modeling, and
other technical areas pertinent to the evaluation of environmental
flows.
       (c)  Members of the science advisory committee serve
five-year terms expiring March 1. A vacancy on the science advisory
committee is filled by appointment by the co-presiding officers of
the advisory group for the unexpired term.
       (d)  Chapter 2110, Government Code, does not apply to the
size, composition, or duration of the science advisory committee.
       (e)  The science advisory committee shall:
             (1)  serve as an objective scientific body to advise
and make recommendations to the advisory group on issues relating
to the science of environmental flow protection; and
             (2)  develop recommendations to help provide overall
direction, coordination, and consistency relating to:
                   (A)  environmental flow methodologies for bay and
estuary studies and instream flow studies;
                   (B)  environmental flow programs at the
commission, the Parks and Wildlife Department, and the board; and
                   (C)  the work of the basin and bay expert science
teams described in Section 11.02362.
       (f)  To assist the advisory group to assess the extent to
which the recommendations of the science advisory committee are
considered and implemented, the commission, the Parks and Wildlife
Department, and the board shall provide written reports to the
advisory group, at intervals determined by the advisory group, that
describe:
             (1)  the actions taken by each agency in response to
each recommendation; and
             (2)  for each recommendation not implemented, the
reason it was not implemented.
       (g)  The science advisory committee is abolished on the date
the advisory group is abolished under Section 11.0236(m).
       Sec. 11.02362.  DEVELOPMENT OF ENVIRONMENTAL FLOW REGIME
RECOMMENDATIONS.  (a)  For the purposes of this section, the
advisory group, not later than November 1, 2007, shall define the
geographical extent of each river basin and bay system in this state
for the sole purpose of developing environmental flow regime
recommendations under this section and adoption of environmental
flow standards under Section 11.1471.
       (b)  The advisory group shall give priority in descending
order to the following river basin and bay systems of the state for
the purpose of developing environmental flow regime
recommendations and adopting environmental flow standards:
             (1)  the river basin and bay system consisting of the
Trinity and San Jacinto Rivers and Galveston Bay and the river basin
and bay system consisting of the Sabine and Neches Rivers and Sabine
Lake Bay;
             (2)  the river basin and bay system consisting of the
Colorado and Lavaca Rivers and Matagorda and Lavaca Bays and the
river basin and bay system consisting of the Guadalupe, San
Antonio, Mission, and Aransas Rivers and Mission, Copano, Aransas,
and San Antonio Bays; and
             (3)  the river basin and bay system consisting of the
Nueces River and Corpus Christi and Baffin Bays, the river basin and
bay system consisting of the Rio Grande, the Rio Grande estuary, and
the Lower Laguna Madre, and the Brazos River and its associated bay
and estuary system.
       (c)  For the river basin and bay systems listed in Subsection
(b)(1):
             (1)  the advisory group shall appoint the basin and bay
area stakeholders committee not later than November 1, 2007;
             (2)  the basin and bay area stakeholders committee
shall establish a basin and bay expert science team not later than
March 1, 2008;
             (3)  the basin and bay expert science team shall
finalize environmental flow regime recommendations and submit them
to the basin and bay area stakeholders committee, the advisory
group, and the commission not later than March 1, 2009, except that
at the request of the basin and bay area stakeholders committee for
good cause shown, the advisory group may extend the deadline
provided by this subdivision;
             (4)  the basin and bay area stakeholders committee
shall submit to the commission its comments on and recommendations
regarding the basin and bay expert science team's recommended
environmental flow regime not later than September 1, 2009; and
             (5)  the commission shall adopt the environmental flow
standards as provided by Section 11.1471 not later than September
1, 2010.
       (d)  The advisory group shall appoint the basin and bay area
stakeholders committees for the river basin and bay systems listed
in Subsection (b)(2) not later than September 1, 2008, and shall
appoint the basin and bay area stakeholders committees for the
river basin and bay systems listed in Subsection (b)(3) not later
than September 1, 2009. The advisory group shall establish a
schedule for the performance of the tasks listed in Subsections
(c)(2) through (5) with regard to the river basin and bay systems
listed in Subsections (b)(2) and (3) that will result in the
adoption of environmental flow standards for that river basin and
bay system by the commission as soon as is reasonably possible.
Each basin and bay area stakeholders committee and basin and bay
expert science team for a river basin and bay system listed in
Subsection (b)(2) or (3) shall make recommendations to the advisory
group with regard to the schedule applicable to that river basin and
bay system. The advisory group shall consider the recommendations
of the basin and bay area stakeholders committee and basin and bay
expert science team as well as coordinate with, and give
appropriate consideration to the recommendations of, the
commission, the Parks and Wildlife Department, and the board in
establishing the schedule.
       (e)  For a river basin and bay system or a river basin that
does not have an associated bay system in this state not listed in
Subsection (b), the advisory group shall establish a schedule for
the development of environmental flow regime recommendations and
the adoption of environmental flow standards. The advisory group
shall develop the schedule in consultation with the commission, the
Parks and Wildlife Department, the board, and the pertinent basin
and bay area stakeholders committee and basin and bay expert
science team. The advisory group may, on its own initiative or on
request, modify a schedule established under this subsection to be
more responsive to particular circumstances, local desires,
changing conditions, or time-sensitive conflicts. This subsection
does not prohibit, in a river basin and bay system for which the
advisory group has not yet established a schedule for the
development of environmental flow regime recommendations and the
adoption of environmental flow standards, an effort to develop
information on environmental flow needs and ways in which those
needs can be met by a voluntary consensus-building process.
       (f)  The advisory group shall appoint a basin and bay area
stakeholders committee for each river basin and bay system in this
state for which a schedule for the development of environmental
flow regime recommendations and the adoption of environmental flow
standards is specified by or established under Subsection (c), (d),
or (e). Chapter 2110, Government Code, does not apply to the size,
composition, or duration of a basin and bay area stakeholders
committee.  Each committee must consist of at least 17 members. The
membership of each committee must:
             (1)  reflect a fair and equitable balance of interest
groups concerned with the particular river basin and bay system for
which the committee is established; and
             (2)  be representative of appropriate stakeholders,
including the following if they have a presence in the particular
river basin and bay system for which the committee is established:
                   (A)  agricultural water users;
                   (B)  recreational water users, including coastal
recreational anglers and businesses supporting water recreation;
                   (C)  municipalities;
                   (D)  soil and water conservation districts;
                   (E)  industrial water users, including
representatives of each of the following sectors:
                         (i)  refining;
                         (ii)  chemical manufacturing;
                         (iii)  electricity generation; and
                         (iv)  production of paper products or
timber;
                   (F)  commercial fishermen;
                   (G)  public interest groups;
                   (H)  regional water planning groups;
                   (I)  groundwater conservation districts;
                   (J)  river authorities and other conservation and
reclamation districts with jurisdiction over surface water; and
                   (K)  environmental interests.
       (g)  Members of a basin and bay area stakeholders committee
serve five-year terms expiring March 1. If a vacancy occurs on a
committee, the remaining members of the committee by majority vote
shall appoint a member to serve the remainder of the unexpired term.
       (h)  Meetings of a basin and bay area stakeholders committee
must be open to the public.
       (i)  Each basin and bay area stakeholders committee shall
establish a basin and bay expert science team for the river basin
and bay system for which the committee is established. The basin
and bay expert science team must be established not later than six
months after the date the basin and bay area stakeholders committee
is established. Chapter 2110, Government Code, does not apply to
the size, composition, or duration of a basin and bay expert science
team.  Each basin and bay expert science team must be composed of
technical experts with special expertise regarding the river basin
and bay system or regarding the development of environmental flow
regimes.  A person may serve as a member of more than one basin and
bay expert science team at the same time.
       (j)  The members of a basin and bay expert science team serve
five-year terms expiring April 1. A vacancy on a basin and bay
expert science team is filled by appointment by the pertinent basin
and bay area stakeholders committee to serve the remainder of the
unexpired term.
       (k)  The science advisory committee shall appoint one of its
members to serve as a liaison to each basin and bay expert science
team to facilitate coordination and consistency in environmental
flow activities throughout the state. The commission, the Parks
and Wildlife Department, and the board shall provide technical
assistance to each basin and bay expert science team, including
information about the studies conducted under Sections 16.058 and
16.059, and may serve as nonvoting members of the basin and bay
expert science team to facilitate the development of environmental
flow regime recommendations.
       (l)  Where reasonably practicable, meetings of a basin and
bay expert science team must be open to the public.
       (m)  Each basin and bay expert science team shall develop
environmental flow analyses and a recommended environmental flow
regime for the river basin and bay system for which the team is
established through a collaborative process designed to achieve a
consensus. In developing the analyses and recommendations, the
science team must consider all reasonably available science,
without regard to the need for the water for other uses, and the
science team's recommendations must be based solely on the best
science available.  For the Rio Grande below Fort Quitman, any uses
attributable to Mexican water flows must be excluded from
environmental flow regime recommendations.
       (n)  Each basin and bay expert science team shall submit its
environmental flow analyses and environmental flow regime
recommendations to the pertinent basin and bay area stakeholders
committee, the advisory group, and the commission in accordance
with the applicable schedule specified by or established under
Subsection (c), (d), or (e). The basin and bay area stakeholders
committee and the advisory group may not change the environmental
flow analyses or environmental flow regime recommendations of the
basin and bay expert science team.
       (o)  Each basin and bay area stakeholders committee shall
review the environmental flow analyses and environmental flow
regime recommendations submitted by the committee's basin and bay
expert science team and shall consider them in conjunction with
other factors, including the present and future needs for water for
other uses related to water supply planning in the pertinent river
basin and bay system. For  the Rio Grande, the basin and bay area
stakeholders committee shall also consider the water accounting
requirements for any international water sharing treaty, minutes,
and agreement applicable to the Rio Grande and the effects on
allocation of water by the Rio Grande watermaster in the middle and
lower Rio Grande.  The Rio Grande basin and bay expert science team
may not recommend any environmental flow regime that would result
in a violation of a treaty or court decision.  The basin and bay area
stakeholders committee shall develop recommendations regarding
environmental flow standards and strategies to meet the
environmental flow standards and submit those recommendations to
the commission and to the advisory group in accordance with the
applicable schedule specified by or established under Subsection
(c), (d), or (e). In developing its recommendations, the basin and
bay area stakeholders committee shall operate on a consensus basis
to the maximum extent possible.
       (p)  In recognition of the importance of adaptive
management, after submitting its recommendations regarding
environmental flow standards and strategies to meet the
environmental flow standards to the commission, each basin and bay
area stakeholders committee, with the assistance of the pertinent
basin and bay expert science team, shall prepare and submit for
approval by the advisory group a work plan.  The work plan must:
             (1)  establish a periodic review of the basin and bay
environmental flow analyses and environmental flow regime
recommendations, environmental flow standards, and strategies, to
occur at least once every 10 years;
             (2)  prescribe specific monitoring, studies, and
activities; and
             (3)  establish a schedule for continuing the validation
or refinement of the basin and bay environmental flow analyses and
environmental flow regime recommendations, the environmental flow
standards adopted by the commission, and the strategies to achieve
those standards.
       (q)  In accordance with the applicable schedule specified by
or established under Subsection (c), (d), or (e), the advisory
group, with input from the science advisory committee, shall review
the environmental flow analyses and environmental flow regime
recommendations submitted by each basin and bay expert science
team. If appropriate, the advisory group shall submit comments on
the analyses and recommendations to the commission for use by the
commission in adopting rules under Section 11.1471. Comments must
be submitted not later than six months after the date of receipt of
the analyses and recommendations.
       (r)  Notwithstanding the other provisions of this section,
in the event the commission, by permit or order, has established an
estuary advisory council with specific duties related to
implementation of permit conditions for environmental flows, that
council may continue in full force and effect and shall act as and
perform the duties of the basin and bay area stakeholders committee
under this section. The estuary advisory council shall add members
from stakeholder groups and from appropriate science and technical
groups, if necessary, to fully meet the criteria for membership
established in Subsection (f) and shall operate under the
provisions of this section.
       (s)  Each basin and bay area stakeholders committee and basin
and bay expert science team is abolished on the date the advisory
group is abolished under Section 11.0236(m).
       Sec. 11.0237.  WATER RIGHTS FOR INSTREAM FLOWS DEDICATED TO
ENVIRONMENTAL NEEDS OR BAY AND ESTUARY INFLOWS.  (a)  The commission
may not issue a new permit for instream flows dedicated to
environmental needs or bay and estuary inflows.  The commission may
approve an application to amend an existing permit or certificate
of adjudication to change the use to or add a use for instream flows
dedicated to environmental needs or bay and estuary inflows.
       (b)  This section does not alter the commission's
obligations under Section 11.042(b) or (c), 11.046(b),
11.085(k)(2)(F), 11.134(b)(3)(D), 11.147, 11.1471, 11.1491,
11.150, 11.152, 16.058, or 16.059.
       SECTION 8.  Section 11.082(b), Water Code, is amended to
read as follows:
       (b)  The state may recover the penalties prescribed in
Subsection (a) [of this section] by suit brought for that purpose in
a court of competent jurisdiction. The state may seek those
penalties regardless of whether a watermaster has been appointed
for the water division, river basin, or segment of a river basin
where the unlawful use is alleged to have occurred.
       SECTION 9.  Section 11.0841, Water Code, is amended by
adding Subsection (c) to read as follows:
       (c)  For purposes of this section, the Parks and Wildlife
Department has:
             (1)  the rights of a holder of a water right that is
held in the Texas Water Trust, including the right to file suit in a
civil court to prevent the unlawful use of such a right;
             (2)  the right to act in the same manner that a holder
of a water right may act to protect the holder's rights in seeking
to prevent any person from appropriating water in violation of a
set-aside established by the commission under Section 11.1471 to
meet instream flow needs or freshwater inflow needs; and
             (3)  the right to file suit in a civil court to prevent
the unlawful use of a set-aside established under Section 11.1471.
       SECTION 10.  Section 11.0842(a), Water Code, is amended to
read as follows:
       (a)  If a person violates this chapter, a rule or order
adopted under this chapter or Section 16.236 [of this code], or a
permit, certified filing, or certificate of adjudication issued
under this chapter, the commission may assess an administrative
penalty against that person as provided by this section. The
commission may assess an administrative penalty for a violation
relating to a water division or a river basin or segment of a river
basin regardless of whether a watermaster has been appointed for
the water division or river basin or segment of the river basin.
       SECTION 11.  Section 11.0843(a), Water Code, is amended to
read as follows:
       (a)  Upon witnessing a violation of this chapter or a rule or
order or a water right issued under this chapter, the executive
director or a person designated by the executive director,
including a watermaster or the watermaster's deputy, [as defined by
commission rule,] may issue the alleged violator a field citation
alleging that a violation has occurred and providing the alleged
violator the option of either:
             (1)  without admitting to or denying the alleged
violation, paying an administrative penalty in accordance with the
predetermined penalty amount established under Subsection (b) [of
this section] and taking remedial action as provided in the
citation; or
             (2)  requesting a hearing on the alleged violation in
accordance with Section 11.0842 [of this code].
       SECTION 12.  Section 11.134(b), Water Code, is amended to
read as follows:
       (b)  The commission shall grant the application only if:
             (1)  the application conforms to the requirements
prescribed by this chapter and is accompanied by the prescribed
fee;
             (2)  unappropriated water is available in the source of
supply;
             (3)  the proposed appropriation:
                   (A)  is intended for a beneficial use;
                   (B)  does not impair existing water rights or
vested riparian rights;
                   (C)  is not detrimental to the public welfare;
                   (D)  considers any applicable environmental flow
standards established under Section 11.1471 and, if applicable, the
assessments performed under Sections 11.147(d) and (e) and Sections
11.150, 11.151, and 11.152; and
                   (E)  addresses a water supply need in a manner
that is consistent with the state water plan and the relevant
approved regional water plan for any area in which the proposed
appropriation is located, unless the commission determines that
conditions warrant waiver of this requirement; and
             (4)  the applicant has provided evidence that
reasonable diligence will be used to avoid waste and achieve water
conservation as defined by [Subdivision (8)(B),] Section
11.002(8)(B) [11.002].
       SECTION 13.  Section 11.147, Water Code, is amended by
amending Subsections (b), (d), and (e) and adding Subsections
(e-1), (e-2), and (e-3) to read as follows:
       (b)  In its consideration of an application for a permit to
store, take, or divert water, the commission shall assess the
effects, if any, of the issuance of the permit on the bays and
estuaries of Texas. For permits issued within an area that is 200
river miles of the coast, to commence from the mouth of the river
thence inland, the commission shall include in the permit any
conditions considered necessary to maintain beneficial inflows to
any affected bay and estuary system, to the extent practicable when
considering all public interests and the studies mandated by
Section 16.058 as evaluated under Section 11.1491[, those
conditions considered necessary to maintain beneficial inflows to
any affected bay and estuary system].
       (d)  In its consideration of an application to store, take,
or divert water, the commission shall include in the permit, to the
extent practicable when considering all public interests, those
conditions considered by the commission necessary to maintain
existing instream uses and water quality of the stream or river to
which the application applies. In determining what conditions to
include in the permit under this subsection, the commission shall
consider among other factors:
             (1)  the studies mandated by Section 16.059; and
             (2)  any water quality assessment performed under
Section 11.150.
       (e)  The commission shall include in the permit, to the
extent practicable when considering all public interests, those
conditions considered by the commission necessary to maintain fish
and wildlife habitats. In determining what conditions to include
in the permit under this subsection, the commission shall consider
any assessment performed under Section 11.152.
       (e-1)  Any permit for a new appropriation of water or an
amendment to an existing water right that increases the amount of
water authorized to be stored, taken, or diverted must include a
provision allowing the commission to adjust the conditions included
in the permit or amended water right to provide for protection of
instream flows or freshwater inflows. With respect to an amended
water right, the provision may not allow the commission to adjust a
condition of the amendment other than a condition that applies only
to the increase in the amount of water to be stored, taken, or
diverted authorized by the amendment.  This subsection does not
affect an appropriation of or an authorization to store, take, or
divert water under a permit or amendment to a water right issued
before September 1, 2007.  The commission shall adjust the
conditions if the commission determines, through an expedited
public comment process, that such an adjustment is appropriate to
achieve compliance with applicable environmental flow standards
adopted under Section 11.1471. The adjustment:
             (1)  in combination with any previous adjustments made
under this subsection may not increase the amount of the
pass-through or release requirement for the protection of instream
flows or freshwater inflows by more than 12.5 percent of the
annualized total of that requirement contained in the permit as
issued or of that requirement contained in the amended water right
and applicable only to the increase in the amount of water
authorized to be stored, taken, or diverted under the amended water
right;
             (2)  must be based on appropriate consideration of the
priority dates and diversion locations of any other water rights
granted in the same river basin that are subject to adjustment under
this subsection; and
             (3)  must be based on appropriate consideration of any
voluntary contributions to the Texas Water Trust, and of any
voluntary amendments to existing water rights to change the use of a
specified quantity of water to or add a use of a specified quantity
of water for instream flows dedicated to environmental needs or bay
and estuary inflows as authorized by Section 11.0237(a), that
actually contribute toward meeting the applicable environmental
flow standards.
       (e-2) Any water right holder who makes a contribution or
amends a water right as described by Subsection (e-1)(3) is
entitled to appropriate credit for the benefits of the contribution
or amendment against the adjustment of the holder's water right
under Subsection (e-1).
       (e-3)  Notwithstanding Subsections (b)-(e), for the purpose
of determining the environmental flow conditions necessary to
maintain freshwater inflows to an affected bay and estuary system,
existing instream uses and water quality of a stream or river, or
fish and aquatic wildlife habitats, the commission shall apply any
applicable environmental flow standard, including any
environmental flow set-aside, adopted under Section 11.1471
instead of considering the factors specified by those subsections.
       SECTION 14.  Subchapter D, Chapter 11, Water Code, is
amended by adding Section 11.1471 to read as follows:
       Sec. 11.1471.  ENVIRONMENTAL FLOW STANDARDS AND SET-ASIDES.
(a)  The commission by rule shall:
             (1)  adopt appropriate environmental flow standards
for each river basin and bay system in this state that are adequate
to support a sound ecological environment, to the maximum extent
reasonable considering other public interests and other relevant
factors;
             (2)  establish an amount of unappropriated water, if
available, to be set aside to satisfy the environmental flow
standards to the maximum extent reasonable when considering human
water needs; and
             (3)  establish procedures for implementing an
adjustment of the conditions included in a permit or an amended
water right as provided by Sections 11.147(e-1) and (e-2).
       (b)  In adopting environmental flow standards for a river
basin and bay system under Subsection (a)(1), the commission shall
consider:
             (1)  the definition of the geographical extent of the
river basin and bay system adopted by the advisory group under
Section 11.02362(a) and the definition and designation of the river
basin by the board under Section 16.051(c);
             (2)  the schedule established by the advisory group
under Section 11.02362(d) or (e) for the adoption of environmental
flow standards for the river basin and bay system, if applicable;
             (3)  the environmental flow analyses and the
recommended environmental flow regime developed by the applicable
basin and bay expert science team under Section 11.02362(m);
             (4)  the recommendations developed by the applicable
basin and bay area stakeholders committee under Section 11.02362(o)
regarding environmental flow standards and strategies to meet the
flow standards;
             (5)  any comments submitted by the advisory group to
the commission under Section 11.02362(q);
             (6)  the specific characteristics of the river basin
and bay system;
             (7)  economic factors;
             (8)  the human and other competing water needs in the
river basin and bay system;
             (9)  all reasonably available scientific information,
including any scientific information provided by the science
advisory committee; and
             (10)  any other appropriate information.
       (c)  Environmental flow standards adopted under Subsection
(a)(1) must consist of a schedule of flow quantities, reflecting
seasonal and yearly fluctuations that may vary geographically by
specific location in a river basin and bay system.
       (d)  As provided by Section 11.023, the commission may not
issue a permit for a new appropriation or an amendment to an
existing water right that increases the amount of water authorized
to be stored, taken, or diverted if the issuance of the permit or
amendment would impair an environmental flow set-aside established
under Subsection (a)(2). A permit for a new appropriation or an
amendment to an existing water right that increases the amount of
water authorized to be stored, taken, or diverted that is issued
after the adoption of an applicable environmental flow set-aside
must contain appropriate conditions to ensure protection of the
environmental flow set-aside.
       (e)  An environmental flow set-aside established under
Subsection (a)(2) for a river basin and bay system other than the
middle and lower Rio Grande must be assigned a priority date
corresponding to the date the commission receives environmental
flow regime recommendations from the applicable basin and bay
expert science team and be included in the appropriate water
availability models in connection with an application for a permit
for a new appropriation or for an amendment to an existing water
right that increases the amount of water authorized to be stored,
taken, or diverted.
       (f)  An environmental flow standard or environmental flow
set-aside adopted under Subsection (a) may be altered by the
commission in a rulemaking process undertaken in accordance with a
schedule established by the commission.  In establishing a
schedule, the commission shall consider the applicable work plan
approved by the advisory group under Section 11.02362(p).  The
commission's schedule may not provide for the rulemaking process to
occur more frequently than once every 10 years unless the work plan
provides for a periodic review under Section 11.02362(p) to occur
more frequently than once every 10 years.  In that event, the
commission may provide for the rulemaking process to be undertaken
in conjunction with the periodic review if the commission
determines that schedule to be appropriate.  A rulemaking process
undertaken under this subsection must provide for the participation
of stakeholders having interests in the particular river basin and
bay system for which the process is undertaken.
       SECTION 15.  The heading to Section 11.148, Water Code, is
amended to read as follows:
       Sec. 11.148.  EMERGENCY SUSPENSION OF PERMIT CONDITIONS AND
EMERGENCY AUTHORITY TO MAKE AVAILABLE WATER SET ASIDE FOR
ENVIRONMENTAL FLOWS.
       SECTION 16.  Section 11.148, Water Code, is amended by
adding Subsection (a-1) and amending Subsections (b) and (c) to
read as follows:
       (a-1)  State water that is set aside by the commission to
meet the needs for freshwater inflows to affected bays and
estuaries and instream uses under Section 11.1471(a)(2) may be made
available temporarily for other essential beneficial uses if the
commission finds that an emergency exists that cannot practically
be resolved in another way.
       (b)  Before the commission suspends a permit condition under
Subsection (a) or makes water available temporarily under
Subsection (a-1) [of this section], it must give written notice to
the Parks and Wildlife Department of the proposed action
[suspension]. The commission shall give the Parks and Wildlife
Department an opportunity to submit comments on the proposed action
[suspension] within 72 hours from such time and the commission
shall consider those comments before issuing its order implementing
the proposed action [imposing the suspension].
       (c)  The commission may suspend the permit condition under
Subsection (a) or make water available temporarily under Subsection
(a-1) without notice to any other interested party other than the
Parks and Wildlife Department as provided by Subsection (b) [of
this section]. However, all affected persons shall be notified
immediately by publication, and a hearing to determine whether the
suspension should be continued shall be held within 15 days of the
date on which the order to suspend is issued.
       SECTION 17.  Section 11.1491(a), Water Code, is amended to
read as follows:
       (a)  The Parks and Wildlife Department and the commission
shall have joint responsibility to review the studies prepared
under Section 16.058 [of this code], to determine inflow conditions
necessary for the bays and estuaries, and to provide information
necessary for water resources management. Each agency shall
designate an employee to share equally in the oversight of the
program. Other responsibilities shall be divided between the Parks
and Wildlife Department and the commission to maximize present
in-house capabilities of personnel and to minimize costs to the
state. Each agency shall have reasonable access to all information
produced by the other agency. Publication of reports completed
under this section shall be submitted for comment to [both] the
commission, [and] the Parks and Wildlife Department, the advisory
group, the science advisory committee, and any applicable basin and
bay area stakeholders committee and basin and bay expert science
team.
       SECTION 18.  Section 11.329(g), Water Code, is amended to
read as follows:
       (g)  The commission may not assess costs under this section
against a holder of a non-priority hydroelectric right that owns or
operates privately owned facilities that collectively have a
capacity of less than two megawatts or against a holder of a water
right placed in the Texas Water Trust for a term of at least 20
years. [This subsection is not intended to affect in any way the
fees assessed on a water right holder by the commission under
Section 1.29(d), Chapter 626, Acts of the 73rd Legislature, Regular
Session, 1993. For purposes of Section 1.29(d), Chapter 626, Acts
of the 73rd Legislature, Regular Session, 1993, a holder of a
non-priority hydroelectric right that owns or operates privately
owned facilities that collectively have a capacity of less than two
megawatts shall be assessed fees at the same rate per acre-foot
charged to a holder of a non-priority hydroelectric right that owns
or operates privately owned facilities that collectively have a
capacity of more than two megawatts.]
       SECTION 19.  Section 11.404(e), Water Code, is amended to
read as follows:
       (e)  The court may not assess costs and expenses under this
section against:
             (1)  a holder of a non-priority hydroelectric right
that owns or operates privately owned facilities that collectively
have a capacity of less than two megawatts; or
             (2)  a holder of a water right placed in the Texas Water
Trust for a term of at least 20 years.
       SECTION 20.  Subchapter I, Chapter 11, Water Code, is
amended by adding Section 11.4531 to read as follows:
       Sec. 11.4531.  WATERMASTER ADVISORY COMMITTEE. (a)  For
each river basin or segment of a river basin for which the executive
director appoints a watermaster under this subchapter, the
executive director shall appoint a watermaster advisory committee
consisting of at least nine but not more than 15 members. A member
of the advisory committee must be a holder of a water right or a
representative of a holder of a water right in the river basin or
segment of the river basin for which the watermaster is appointed.
In appointing members to the advisory committee, the executive
director shall consider:
             (1)  geographic representation;
             (2)  amount of water rights held;
             (3)  different types of holders of water rights and
users, including water districts, municipal suppliers, irrigators,
and industrial users; and
             (4)  experience and knowledge of water management
practices.
       (b)  An advisory committee member is not entitled to
reimbursement of expenses or to compensation.
       (c)  An advisory committee member serves a two-year term
expiring August 31 of each odd-numbered year and holds office until
a successor is appointed.
       (d)  The advisory committee shall meet within 30 days after
the date the initial appointments have been made and shall select a
presiding officer to serve a one-year term. The committee shall
meet regularly as necessary.
       (e)  The advisory committee shall:
             (1)  make recommendations to the executive director
regarding activities of benefit to the holders of water rights in
the administration and distribution of water to holders of water
rights in the river basin or segment of the river basin for which
the watermaster is appointed;
             (2)  review and comment to the executive director on
the annual budget of the watermaster operation; and
             (3)  perform other advisory duties as requested by the
executive director regarding the watermaster operation or as
requested by holders of water rights and considered by the
committee to benefit the administration of water rights in the
river basin or segment of the river basin for which the watermaster
is appointed.
       SECTION 21.  Sections 11.454 and 11.455, Water Code, are
amended to read as follows:
       Sec. 11.454.  DUTIES AND AUTHORITY OF THE WATERMASTER.
Section 11.327 applies to the duties and authority of a watermaster
appointed for a river basin or segment of a river basin under this
subchapter in the same manner as that section applies to the duties
and authority of a watermaster appointed for a water division under
Subchapter G [A watermaster as the agent of the commission and under
the executive director's supervision shall:
             [(1)  divide the water of the streams or other sources
of supply of his segment or basin in accordance with the authorized
water rights;
             [(2)  regulate or cause to be regulated the controlling
works of reservoirs and diversion works in time of water shortage,
as is necessary because of the rights existing in the streams of his
segment or basin, or as is necessary to prevent the waste of water
or its diversion, taking, storage, or use in excess of the
quantities to which the holders of water rights are lawfully
entitled; and
             [(3)  perform any other duties and exercise any
authority directed by the commission].
       Sec. 11.455.  COMPENSATION AND EXPENSES OF WATERMASTER 
[ASSESSMENTS]. (a)  Section 11.329 applies to the payment of the
compensation and expenses of a watermaster appointed for a river
basin or segment of a river basin under this subchapter in the same
manner as that section applies to the payment of the compensation
and expenses of a watermaster appointed for a water division under
Subchapter G.
       (b)  The executive director shall deposit the assessments
collected under this section to the credit of the watermaster fund.
       (c)  Money deposited under this section to the credit of the
watermaster fund may be used only for the purposes specified by
Section 11.3291 with regard to the watermaster operation under this
subchapter with regard to which the assessments were collected [The
commission may assess the costs of the watermaster against all
persons who hold water rights in the river basin or segment of the
river basin under the watermaster's jurisdiction in accordance with
Section 11.329 of this code].
       SECTION 22.  Subchapter F, Chapter 15, Water Code, is
amended by adding Section 15.4063 to read as follows:
       Sec. 15.4063.  ENVIRONMENTAL FLOWS FUNDING. The board may
authorize the use of money in the research and planning fund:
             (1)  to compensate the members of the Texas
environmental flows science advisory committee established under
Section 11.02361 for attendance and participation at meetings of
the committee and for transportation, meals, lodging, or other
travel expenses associated with attendance at those meetings as
provided by the General Appropriations Act;
             (2)  for contracts with cooperating state and federal
agencies and universities and with private entities as necessary to
provide technical assistance to enable the Texas environmental
flows science advisory committee and the basin and bay expert
science teams established under Section 11.02362 to perform their
statutory duties;
             (3)  to compensate the members of the basin and bay
expert science teams established under Section 11.02362 for
attendance and participation at meetings of the basin and bay
expert science teams and for transportation, meals, lodging, or
other travel expenses associated with attendance at those meetings
as provided by the General Appropriations Act; and
             (4)  for contracts with political subdivisions
designated as representatives of basin and bay area stakeholders
committees established under Section 11.02362 to fund all or part
of the administrative expenses incurred in conducting meetings of
the basin and bay area stakeholders committees or the pertinent
basin and bay expert science teams.
       SECTION 23.  Section 16.059(d), Water Code, is amended to
read as follows:
       (d)  The priority studies shall be completed not later than
December 31, 2016 [2010]. The Parks and Wildlife Department, the
commission, and the board shall establish a work plan that
prioritizes the studies and that sets interim deadlines providing
for publication of flow determinations for individual rivers and
streams on a reasonably consistent basis throughout the prescribed
study period. Before publication, completed studies shall be
submitted for comment to the commission, the board, and the Parks
and Wildlife Department.
       SECTION 24.  Section 26.0135(h), Water Code, as amended by
Chapters 234 and 965, Acts of the 77th Legislature, Regular
Session, 2001, is reenacted and amended to read as follows:
       (h)  The commission shall apportion, assess, and recover the
reasonable costs of administering the water quality management
programs under this section from users of water and wastewater
permit holders in the watershed according to the records of the
commission generally in proportion to their right, through permit
or contract, to use water from and discharge wastewater in the
watershed. Irrigation water rights, [and] non-priority
hydroelectric rights of a water right holder that owns or operates
privately owned facilities that collectively have a capacity of
less than two megawatts, and water rights held in the Texas Water
Trust for terms of at least 20 years will not be subject to this
assessment. The cost to river authorities and others to conduct
water quality monitoring and assessment shall be subject to prior
review and approval by the commission as to methods of allocation
and total amount to be recovered. The commission shall adopt rules
to supervise and implement the water quality monitoring,
assessment, and associated costs. The rules shall ensure that
water users and wastewater dischargers do not pay excessive
amounts, that program funds are equitably apportioned among basins,
that a river authority may recover no more than the actual costs of
administering the water quality management programs called for in
this section, and that no municipality shall be assessed cost for
any efforts that duplicate water quality management activities
described in Section 26.177 [of this chapter]. The rules
concerning the apportionment and assessment of reasonable costs
shall provide for a recovery of not more than $5,000,000 annually.
Costs recovered by the commission are to be deposited to the credit
of the water resource management account and may be used only to
accomplish the purposes of this section. The commission may apply
not more than 10 percent of the costs recovered annually toward the
commission's overhead costs for the administration of this section
and the implementation of regional water quality assessments. The
commission, with the assistance and input of each river authority,
shall file a written report accounting for the costs recovered
under this section with the governor, the lieutenant governor, and
the speaker of the house of representatives on or before December 1
of each even-numbered year.
       SECTION 25.  Section 11.1491(b), Water Code, is repealed.
       SECTION 26.  (a)  The governor, lieutenant governor, and
speaker of the house of representatives shall appoint the initial
members of the environmental flows advisory group as provided by
Section 11.0236, Water Code, as added by this Act, as soon as
practicable on or after the effective date of this Act.
       (b)  As soon as practicable after taking office, the initial
members of the environmental flows advisory group shall appoint the
initial members of the Texas environmental flows science advisory
committee as provided by Section 11.02361, Water Code, as added by
this Act. The terms of the initial members of the committee expire
March 1, 2012.
       (c)  The environmental flows advisory group shall appoint
the members of each basin and bay area stakeholders committee as
provided by Section 11.02362, Water Code, as added by this Act. The
terms of the initial members of each committee expire March 1 of the
fifth year that begins after the year in which the initial
appointments are made.
       (d)  Each basin and bay area stakeholders committee shall
appoint the members of the basin and bay expert science team for the
river basin and bay system for which the committee is established as
provided by Section 11.02362, Water Code, as added by this Act. The
terms of the initial members of each team expire April 1 of the
fifth year that begins after the year in which the initial
appointments are made.
       (e)  The executive director of the Texas Commission on
Environmental Quality shall appoint the members of the watermaster
advisory committee under Section 11.4531, Water Code, as added by
this Act, for each river basin or segment of a river basin for which
the executive director appoints a watermaster under Subchapter I,
Chapter 11, Water Code. The terms of the initial members of each
committee expire August 31 of the first odd-numbered year that
begins after the year in which the initial appointments are made.
       SECTION 27.  The changes in law made by this Act relating to
a permit for a new appropriation of water or to an amendment to an
existing water right that increases the amount of water authorized
to be stored, taken, or diverted apply only to:
             (1)  water appropriated under a permit for a new
appropriation of water the application for which is pending with
the Texas Commission on Environmental Quality on the effective date
of this Act or is filed with the commission on or after that date; or
             (2)  the increase in the amount of water authorized to
be stored, taken, or diverted under an amendment to an existing
water right that increases the amount of water authorized to be
stored, taken, or diverted and the application for which is pending
with the Texas Commission on Environmental Quality on the effective
date of this Act or is filed with the commission on or after that
date.
       SECTION 28.  This Act takes effect September 1, 2007.