HBA-LJP H.B. 3544 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3544 By: Hilderbran Natural Resources 3/26/2001 Introduced BACKGROUND AND PURPOSE Texas faces a difficult challenge to develop water policies that serve both state and regional interests. The Texas Constitution authorizes the creation of groundwater conservation districts to plan, develop, and regulate the use of water. House Bill 3544 ratifies the creation of the Cow Creek Groundwater Conservation District, subject to voter 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. ANALYSIS House Bill 3544 ratifies the creation of the Cow Creek Groundwater Conservation District (district), subject to voter approval at a confirmation election before September 1, 2003 (SECTIONS 1 and 15). The bill provides that the district is governed by a board of directors and sets forth provisions regarding the election, vacancy, qualifications, and terms of the directors. The bill provides that the board is composed of five members, one from each of the county commissioners precincts and one member from the entire district. The bill sets forth provisions regarding an election to confirm the establishment of the district (SECTIONS 5 - 10, and 15). The bill authorizes the district to contract with one or more state agencies or other governmental bodies, including a county, a river authority, or another district to carry out any functions of the district. The bill authorizes the district to require a drilling permit before a new well is drilled or an existing well is substantially altered. The bill also provides that notwithstanding any applicable exemptions, written authorization from the district must be received before a new well is drilled or an existing well is substantially altered. The bill authorizes the district to participate in and to promote the acceptance of the construction, implementation, and maintenance of best management practices (practices) for water resource management in the district and sets forth the issues that must be addressed in the practices. The bill requires the district to adopt any rules necessary for the assessment and collection of fees and authorizes the district to impose reasonable fees on an annual basis on each nonexempt well in the district. The bill authorizes the district to use money collected from fees in any manner necessary for the management and operation of the district, to pay all or part of the principal and interest on districts bonds or notes, and for any purpose consistent with the district's certified water management plan. The bill requires the district to adopt rules which are consistent with certain rules adopted by the comptroller to provide for granting exemptions from ad valorem taxes on property on which a water conservation initiative has been implemented. The rules must provide that a retail public utility is eligible to receive an exemption from ad valorem taxes on property on the same grounds as for any other district customer. To encourage retail public utilities to obtain water supplies from sources other than groundwater, the bill provides that the rules must include an exemption from ad valorem taxes on property served by a retail public utility based on certain percentages. The bill authorizes the district to consider the impact of floods and equipment breakage upon the retail public utility's ability to supply water from sources other than groundwater (SECTION 11). The bill prohibits the district from: _imposing an ad valorem tax for administrative, operation, or maintenance expenses that exceed a certain amount; _requiring the owner of a well used solely for domestic or livestock purposes to install a meter or measuring device; _selling, transporting, or exporting groundwater outside of the district; or _entering into a contract or engaging in an action to supply water to a person in the service area of a municipality or retail public utility located in the district without the express permission of the municipality or the retail public utility (SECTION 12). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.