HBA-EDN, CBW H.B. 1629 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1629 By: Cook Natural Resources 77/26/2001 Enrolled BACKGROUND AND PURPOSE Prior to the 77th Legislature, state law prohibited the Lower Colorado River Authority (LCRA) from selling water outside of its water service area, unless it was specifically authorized to do so by the legislature. The 75th Texas Legislature enacted legislation that established a framework for state water planning based on local input and regional planning efforts. Currently, there are water needs in San Antonio and irrigation needs in the Colorado Basin, which would be alleviated through water contracts with the LCRA. House Bill 1629 authorizes the LCRA to sell water to a municipality located outside of its water service area, pursuant to certain limitations and restrictions and provided that such a sale is consistent with regional water plans. 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 1629 amends law to authorize the Lower Colorado River Authority (LCRA) to enter into a written contract with a municipality located outside the LCRA's water service area to distribute and sell water to the municipality and sets forth provisions relating to charging a surcharge to such a municipality for the development and management of water resources. The bill provides that the surcharge determined by the board of directors is not subject to review or modification by any regulatory agency or administrative authority. The bill sets forth provisions regarding a contract between the LCRA and a municipality located outside of LCRA's water service area and establishes that within the LCRA's water service area the LCRA must own any personal property, fixtures, or appurtenances that are used for making available, diverting, or delivering water to a municipality under a contract. The bill prohibits water to be provided under a contract from being diverted from the Colorado River at diversion points located on the reservoirs that, on the effective date of the Act, are owned and operated by the LCRA upstream of Mansfield Dam and authorizes such water to be diverted only from off-channel reservoirs built downstream of Mansfield Dam after the effective date of the Act. The bill also prohibits water from being provided to a municipality unless the district demonstrates, through its water management plan, to TNRCC that the LCRA will operate its water supply system in conjunction with the water resources management efforts contemplated by the contract to increase the average lake levels of Lake Buchanan and Lake Travis. The bill requires the LCRA to submit annually to TNRCC a report demonstrating compliance with these provisions. The bill authorizes the LCRA to sell no more than a total of 150,000 acre-feet of water in any year under contracts authorized by the Act. The bill provides that the LCRA is not authorized to pump water to the municipality directly from the Colorado River, to sell its surface water rights to any person or entity for use outside LCRA's water service area or a sale or lease of water other than as specifically authorized. The bill prohibits the LCRA from selling groundwater to a municipality. The bill also prohibits the LCRA from contracting to distribute or sell water unless the LCRA's board of directors finds that the contract: _will protect and benefit the lower Colorado River watershed and the LCRA's water service area; _is consistent with regional water management plans filed with the Texas Water Development Board on or before January 5, 2001; _will ensure that the beneficial inflows remaining after any water diversions will be adequate to maintain the ecological health and productivity of the Matagorda Bay system; _will provide for instream flows no less protective than those included in the LCRA's water management plan as approved by TNRCC; _will ensure that, before any water is delivered under the contract, the municipality has prepared a drought contingency plan and has developed and implemented a water conservation plan that will result in the highest practicable levels of water conservation and efficiency achievable within the municipality's jurisdiction; _provides for a broad public and scientific review process designed to ensure that all information that can be practicably developed is considered in establishing beneficial inflow and instream flow provisions; and _will benefit stored water levels in the LCRA's existing reservoirs. The bill prohibits a municipality from reselling that water outside the boundaries of the regional water planning area in which the municipality is located, as such boundaries are designated by the Texas Water Development Board as of January 5, 2001. The bill sets forth provisions relating to the authority of a municipality or municipally owned utility to enter into and make payments under such a contract. EFFECTIVE DATE May 16, 2001.