HBA-CBW H.B. 1629 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1629 By: Cook Natural Resources 03/1/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, the Lower Colorado River Authority (LCRA) is prohibited from selling water outside of its water service area, unless it is 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. C.S.H.B 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 C.S.H.B 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. 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 does not authorize the LCRA 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 LCRA's water service area; _is consistent with regional water management plans filed with the Texas Water Development Board; and _will benefit stored water levels in the LCRA's existing reservoirs. 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 On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute differs from the original bill by adding the definition of "water service area." "Water service area" means the area in which the Lower Colorado River Authority (LCRA) is authorized to use, distribute, and sell water on January 1, 2001. The substitute replaces "Colorado River watershed" with "water service area" throughout the bill. The substitute removes from the original bill the provision that prohibits LCRA from amending a contract to increase the volume of water to be sold to a municipality unless specified voting and consultation occur. The substitute clarifies the original by adding the words 'then current' to require municipalities to pay the then current rate under a contract if certain actions are taken.