HBA-NMO C.S.H.B. 2237 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2237 By: Cook Natural Resources 3/29/99 Committee Report (Substituted) BACKGROUND AND PURPOSE Current law provides for the creation of groundwater conservation districts to plan, develop, and regulate the use of water resources. The people of Bastrop and Lee Counties depend on the CarrizoWilcox aquifer as their principal source of water. However, the aquifer is threatened by over-use and potential pollution. C.S.H.B. 2237 creates the Lost Pines Groundwater Conservation District, subject to approval at a confirmation election. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Creates the Lost Pines Groundwater Conservation District, subject to a confirmation election as provided by Section 8 of this Act. Provides that the district is created under and is essential to accomplish the purposes of Section 59, Article XVI, Texas Constitution (Conservation and Development of Natural Resources; Conservation and Reclamation Districts). SECTION 2. DEFINITION. Defines "district" as the Lost Pines Groundwater Conservation District. SECTION 3. Provides that the boundaries of the district are coextensive with the boundaries of Bastrop and Lee counties, subject to Section 8(d) of this Act. SECTION 4. FINDING OF BENEFIT. Sets forth finding of benefit. SECTION 5. POWERS. (a) Provides that the district, with exception, has all the rights, powers, privileges, authority, functions, and duties provided by the general law of this state, including Chapter 36 (Groundwater Conservation Districts), Water Code, applicable to groundwater conservation districts created under Section 59, Article XVI, Texas Constitution. Provides that Chapter 49 (Provisions Applicable to All Districts), Water Code, does not apply to the district. Provides that this Act prevails over any provision of general law that is in conflict or inconsistent with this Act. Prohibits the district from levying or collecting taxes. Provides that certain sections of the Water Code prevail over a conflicting or inconsistent provision in this Act. SECTION 6. BOARD OF DIRECTORS. Provides that the district is governed by a board of 12 directors. Sets forth the appointment procedures for and terms of directors. Requires the governing body of the entity that appointed a director, if that director vacates the board, to appoint a director to serve the remainder of the term. SECTION 7. ORGANIZATIONAL MEETING. Requires the directors, as soon as practicable after the initial directors are appointed and have qualified as provided by this Act, to hold the organizational meeting of the board. Requires the directors to hold the meeting at a location within the district agreeable to a majority of the directors or at the Bastrop County Courthouse if the directors cannot agree on a location. SECTION 8. CONFIRMATION ELECTION. Requires the initial board of directors to call and hold an election in each of the two counties, individually, to confirm the establishment of the district. Provides that Section 41.001(a) (Uniform Election Dates), Election Code, does not apply to this confirmation election. Sets forth confirmation election procedures. SECTION 9. PERMIT EXEMPTIONS. Provides that Section 36.117 (Exemptions; Exception; Limitations), Water Code, except as provided by Subsections (b) and (c) of this section and Sections 10-12 of this Act, applies to the district and all wells within the district. (b) Prohibits the district from requiring a permit for, imposing a fee on, or restricting production of a well that is not capable of producing more than 50,000 gallons of groundwater a day, or exempt under Section 36.117(e), as a well permitted for mining purposes by the Railroad Commission of Texas (railroad commission), to the extent that the well does not produce a greater volume of groundwater than that produced for mining purposes. (c) Authorizes the district to require a permit for, impose a fee on, or restrict production and withdrawals from a well described by Subsection (b)(2) of this section for the volume of groundwater produced that exceeds the volume produced for mining purposes. SECTION 10. TRANSFER PERMITS FOR CERTAIN EXEMPT WELLS; TRANSPORTATION FEE. (a) Requires the district, without notice and hearing, to issue to a person who desires to transfer water from the district from a well exempt under Section 9(b)(2) of this Act an unconditional permit for the volume of groundwater produced from that well for mining purposes. Authorizes the district to require a permit and charge fees to authorize the transfer from the district of any volume of groundwater produced from a well under Section 9(b)(2) of this Act that exceeds the volume produced for mining purposes. (b) Prohibits the district from charging a pumping fee under Section 13(a) of this Act for a well exempt under Section 9(b)(2) of this Act but authorizes the district to charge a water transportation fee for all mining water transported from the district to compensate the district for the conservation, preservation, protection, recharging, and prevention of waste of groundwater and of groundwater reservoirs or their subdivisions and for controlling subsidence caused by withdrawal of water from those groundwater reservoirs or their subdivisions. Prohibits the water transportation fee from exceeding the fee charged to other persons who transport water from the district or a fee charged for withdrawing water under Section 13(a) of this Act. (c) Prohibits groundwater produced for mining that is discharged and not sold from being considered to have been transferred from the district. SECTION 11. PERMITS AND OTHER REQUIREMENTS FOR CERTAIN WATER UNDER CONTRACT. (a) Requires the district to issue permits for the transfer production or withdrawal of groundwater to a person who before March 4, 1999, contracted in writing to supply to another person groundwater withdrawn from one or more existing or proposed wells within the district. Requires that the permits, except as provided by Subsection (b), authorize the production or withdrawal annually of a total volume of groundwater not to exceed the smallest of the total volume of groundwater in the district annually available for permitting as determined by the district, or a volume equal to 40,000 acre-feet annually from within the district, less the total volume of water the supplier produces annually within the district for mining purposes (b) Prohibits a permit or a group of permits issued to the same person under Subsection (a) of this section from authorizing that person to produce or withdraw annually in any county in the district a volume of groundwater that exceeds a volume equal to 30,000 acre-feet, less the total volume of groundwater the supplier produces annually or withdraws annually in the county for mining purposes. (c) Requires the railroad commission to ensure that all requirements imposed by that agency on a supplier to mitigate impacts caused by withdrawals of groundwater for mining purposes in any county that are required to be permitted by the district under Subsection (a) of this section. (d) Authorizes the district, under Section 36.116, Water Code, to provide for the spacing of nonexempt wells proposed by a supplier, and the construction of those wells is subject to rules adopted by the district. SECTION 12. EMERGENCY TRANSFER BY RETAIL UTILITY. Authorizes a retail public utility that owns wells located in and permitted by the district to transport water outside the district for emergency purposes for a period not to exceed 90 days. Authorizes that transportation of water outside the district under this section be voluntary or be directed by the Texas Natural Resource Conservation Commission. SECTION 13. FEES. Authorizes the board, by rule, to impose reasonable fees on the owner, operator, or both of each well in the district, regardless of the date on which the well was drilled or began producing, if a permit is issued for the well by the district and the well is not exempt from regulation by the district. Authorizes the district to use all fees collected for the purposes necessary to carry out the purposes of this Act and the powers granted by Chapter 36, Water Code, as the district considers necessary for the district's protection, conservation, and regulation of groundwater, including administrative and operating expenses. Prohibits a fee that is based on the amount of water to be withdrawn from a well from exceeding the limits set by Section 36.205(c), Water Code (one dollar per acre foot for water used for agricultural crop irrigation or 17 cents per thousand gallons for water used for any other purpose). SECTION 14. FINDINGS RELATED TO PROCEDURAL REQUIREMENTS. Sets forth findings related to procedural requirements. SECTION 15.Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute differs from the original in SECTION 1, by creating the Lost Pines, rather than the Bastrop-Lee Counties, Groundwater Conservation District (district), subject to a confirmation election held as provided by Section 8 of this Act, rather than Section 9, as originally proposed. The substitute differs from the original in SECTION 2, by making conforming changes. The substitute differs from the original in SECTION 5, by deleting Subsection (b), relating to the right of the state to supervise the powers of the district and the exercise thereof through the Texas Natural Resource Conservation Commission. Redesignates Subsection (d) as Subsection (b)(1) of SECTION 9. Makes conforming changes. The substitute deletes proposed SECTION 6 (Water Export Rules), and redesignates the proposed SECTION 8 to SECTION 6. Provides that the district is governed by a board of 12, rather than 10, directors. Requires the Bastrop County Commissioners Court and the Lee County Commissioners Court to appoint two directors each, providing that each county must appoint at least one representative of business and industry. Requires each appointing entity, rather than governing body, to appoint initial directors. Deletes proposed Subsection (i), which prohibits a director from receiving compensation for serving on the board but entitles the director to reimbursement for actual expenses incurred in performing duties as a director. Makes conforming changes. SECTION 7 of the substitute is redesignated from the proposed SECTION 9. SECTION 8 of the substitute is redesignated from the proposed SECTION 10. Adds Subsections (c)-(f) to set forth confirmation election procedures. The substitute provides a new SECTION 9 (Permit Exemptions), SECTION 10 (Transfer Permits for Certain Exempt Wells; Transportation Fee), SECTION 11 (Permits and Other Requirements for Certain Water Under Contract), and SECTION 12 (Emergency Transfer by Retail Public Utility). SECTIONS 13, 14, and 15 of the substitute are redesignated from the proposed SECTIONS 7, 11, and 12, respectively.