HBA-NMO H.B. 1437 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1437 By: Krusee Natural Resources 3/23/99 Committee Report (Amended) BACKGROUND AND PURPOSE The 75th Texas Legislature enacted legislation authorizing the Lower Colorado River Authority (LCRA) to increase sales of surface water to existing customers in Williamson County. As Williamson County continues to experience significant growth, future water supplies are an increasing concern. According to the 1998 Trans-Texas Water Program Study an economical way to supply water to Williamson County in the future is for the Brazos River Authority to provide surface water from Lake Stillhouse Hollow and LCRA to provide surface water from the Highland Lakes. However, because Williamson County lies in the Brazos River watershed, supplying surface water from the Highland Lakes would negatively impact Colorado River downstream irrigation needs. H.B. 1437 authorizes LCRA, subject to existing statutory requirements, to transfer surface water to a person or entity in Williamson County that pays the cost of transfer and an additional charge in an amount determined by LCRA board of directors; and further authorizes LCRA to use money from this additional charge only for the development of water resources or other water use strategies to replace or offset the amount of surface water transferred to Williamson County. 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. Amends Section 27, Chapter 7, Acts of the 43rd Legislature, 4th Called Session, 1934 (Article 8280-107, V.T.C.S.), as follows: Sec. 27. (a) Authorizes the Lower Colorado River Authority (LCRA) to transfer surface water from LCRA to a place in Williamson County that is outside the watershed of the Colorado River if the transfer is made to a person or entity that pays for the surface water in an amount sufficient to pay both LCRA's cost of service and an additional charge to mitigate any adverse effects of the transfer of surface water to Williamson County from the Colorado River watershed, as determined by LCRA's board of directors. Makes conforming and nonsubstantive changes. (b) Requires LCRA to determine the amount of the additional charge under Subsection (a). Authorizes LCRA to use money from the additional charge only for the development of water resources or other water use strategies to replace or offset the amount of surface water transferred to Williamson County. Provides that the board of directors' determination of the additional charge is not subject to review or modification by any regulatory agency or authority. Authorizes water resources developed or conserved through the additional charge to be acquired from any source, in or outside the boundaries of LCRA, and requires that they be used to benefit the water service area of LCRA described in Sections 2(a) and 26 of this Act. Sections 2(a) and 26 provide the boundaries of LCRA. SECTION 2.Emergency clause. Effective date: upon passage. EXPLANATION OF AMENDMENTS Committee Amendment #1 SECTION 1. Amends proposed changes to Subsection (a) to provide that a person or entity in the Brazos River watershed must pay the Lower Colorado River Authority's (district's) applicable water rate, rather than cost of service, and a charge to pay the costs of mitigating, rather than a charge to mitigate, the transfer, in order to be eligible for a certain water transfer. Creates a new subsection (b) to prohibit LCRA from making certain transfers of water under Subsection (a) if the transfer will result in a net loss of water to the Colorado River watershed. Redesignates proposed subsection (b) to Subsection (c). Prohibits the additional charge under Subsection (a) from being less than 10 percent of LCRA's applicable rate for surface water to be transferred. Requires LCRA to deposit any money LCRA receives from the additional charge, and authorizes the deposit of any other money as the board of directors of LCRA determines, into a separate fund designated as the agricultural water conservation fund. Authorizes use of the money from the agricultural water conservation fund to include the development and implementation of methods, programs, and strategies relating to groundwater resources, reuse, conservation, and other opportunities to reduce the reliance on surface water for agricultural irrigation. Requires that water resources conserved or developed through the additional charge be used to benefit the water service areas of LCRA's irrigation operations, rather than the area of the whole district. Makes conforming and nonsubstantive changes.