HBA-MPM, JLV S.B. 1821 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 1821 By: Staples Natural Resources 5/18/2001 Committee Report (Amended) 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. Senate Bill 1821 creates the Neches and Trinity Valleys Groundwater Conservation District, subject to approval at a confirmation election, to manage the groundwater resources of Anderson, Cherokee, and Henderson counties. 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, or institution. ANALYSIS Senate Bill 1821 creates the Neches and Trinity Valleys Groundwater Conservation District (district) in Anderson, Cherokee, and Henderson counties subject to voter approval at a confirmation election and sets forth the boundaries of the district (SECTIONS 1 and 3). The bill authorizes the district, by rule, to require a person to obtain a permit from the district for the transfer of groundwater out of the district and to regulate the terms under which the permit holder is authorized to conduct such a transfer. The bill provides that a retail public utility is not required to obtain a permit to transfer groundwater out of the district if certain conditions are met. The bill prohibits the district from levying or collecting taxes in the district. The bill authorizes the board of directors of the district, by rule, to impose reasonable fees on each well for which a permit is issued by the district and which is not exempt from regulation by the district. The fees may not exceed $0.25 per acre-foot for water used for irrigating agricultural crops or operating existing steam electric stations or $0.0425 per thousand gallons for water used for any other purpose. The bill prohibits the district from exercising the power of eminent domain, issuing and selling bonds or notes in the name of the district, or purchasing groundwater rights unless the purchased rights are acquired for conservation purposes and are permanently held in trust not to be produced (SECTION 5). The bill provides that the district is governed by a board of directors and sets forth provisions regarding the appointment, terms of the directors, meeting, and election of the board (SECTIONS 6-9). The bill provides that if the majority of qualified voters in a county who vote in the election vote to confirm the creation of the district, that county is included in the district. The bill provides that if the majority of qualified voters in a county who vote in the election vote not to confirm the creation of the district, that county is excluded from the district. If the creation of the district is not confirmed by an election held under these provisions before the second anniversary of the effective date of this Act, the district is dissolved and this Act expires on that date (SECTION 9). The bill requires an adjacent county or an underground water conservation district whose boundaries lie wholly within the boundaries of the Neches and Trinity Valleys Groundwater Conservation District that wish to join the district to petition the district by resolution of the commissioners court of the county or the board of directors of the underground water conservation district. The bill authorizes the board by resolution to approve the addition of the county or underground water conservation district to the district if the board finds after a hearing on the resolution that the addition of the county would benefit the district and the county or underground water conservation district (SECTION 10). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 authorizes the Neches and Trinity Valleys Groundwater Conservation District (district) to determine that a transfer of groundwater produced within the district's boundaries for use outside of the district's boundaries will not be considered a transfer outside of the district if the transfer is for use as a potable water supply by a retail public utility and is within an authorized service area of which an appropriate portion, as determined by the district, is located inside district boundaries, or if the transfer involves an emergency potable water interconnect between retail public utilities. Committee Amendment No. 2 authorizes the board of directors (board) of the district to assess production fees based on the amount of water authorized by permit to be withdrawn from a well or the amount actually withdrawn. Production fees are required to not exceed $1 per acre-foot payable annually for water used for agricultural use or $10 per acre-foot payable annually for water used for any other purpose. The amendment also authorizes the board to assess a production fee for any water produced under an exemption from the requirements to obtain a drilling permit, an operating permit, or any other permit if that water is subsequently sold to another person. The amendment requires the board to set and collect fees for all services provided outside of district boundaries. The amendment authorizes the district to set fees for administrative acts of the district. Such fees may not unreasonably exceed the cost to the district of providing the services outside of the district.