85R9799 AAF-F By: Burns H.B. No. 3028 A BILL TO BE ENTITLED AN ACT relating to groundwater ownership and rights. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 36.001, Water Code, is amended by adding Subdivision (32) to read as follows: (32) "Fair share" means a reasonable quantification, based on the best available science, of the amount of groundwater in place beneath each tract of land overlying an aquifer, subdivision of an aquifer, or geologic formation that may be produced: (A) under the applicable desired future conditions adopted under Section 36.108; (B) under the operating and hydrogeological conditions of the area; and (C) without resulting in the confiscation by uncompensated drainage of the fair share of groundwater in place under other tracts of land. SECTION 2. Sections 36.002(b), (b-1), (c), and (d), Water Code, are amended to read as follows: (b) The groundwater ownership and rights recognized [described] by this section entitle the landowner, including a landowner's lessees, heirs, or assigns, to: (1) drill for and produce the groundwater below the surface of real property, subject to Subsection (d), without causing waste or malicious drainage of other property or negligently causing subsidence; [and] (2) be afforded a fair share of groundwater when the right to drill a well and produce groundwater is regulated under this chapter; and (3) have any other right recognized under common law. (b-1) The groundwater ownership and rights recognized [described] by this section do not: (1) entitle a landowner, including a landowner's lessees, heirs, or assigns, to the [right to capture a] specific amount of groundwater below the surface of that landowner's land; or (2) affect the existence of common law defenses or other defenses to liability under the rule of capture. (c) Nothing in this code shall be construed as granting the authority to deprive or divest a landowner, including a landowner's lessees, heirs, or assigns, of the groundwater ownership and rights recognized [described] by this section. (d) This section does not: (1) prohibit a district from adopting or enforcing rules authorized under this chapter for a public purpose consistent with Section 59, Article XVI, Texas Constitution [limiting or prohibiting the drilling of a well by a landowner for failure or inability to comply with minimum well spacing or tract size requirements adopted by the district]; or (2) [affect the ability of a district to regulate groundwater production as authorized under Section 36.113, 36.116, or 36.122 or otherwise under this chapter or a special law governing a district; or [(3)] require that a rule adopted by a district allocate to each landowner a proportionate share of available groundwater for production from the aquifer based on the number of acres owned by the landowner. SECTION 3. Section 36.066(g), Water Code, is amended to read as follows: (g) If the district prevails in any suit other than a suit in which it voluntarily intervenes or in which it challenges the validity of a law, rule, or order under the Texas Constitution, the district may seek and the court may [shall] grant, in the interests of justice and as provided by Subsection (h), in the same action, recovery for attorney's fees, costs for expert witnesses, and other costs incurred by the district before the court. The amount of the attorney's fees shall be fixed by the court. SECTION 4. Section 36.101(a), Water Code, is amended to read as follows: (a) A district may make and enforce rules, including rules limiting groundwater production based on tract size or the spacing of wells, to provide for conserving, preserving, protecting, and recharging of the groundwater or of a groundwater reservoir or its subdivisions in order to control subsidence, prevent degradation of water quality, or prevent waste of groundwater and to carry out the powers and duties provided by this chapter. In adopting a rule under this chapter, a district [shall]: (1) shall consider all groundwater uses and needs; (2) shall develop rules that are fair and impartial; (3) shall protect [consider] the groundwater ownership and rights recognized [described] by Section 36.002; (4) may not restrict the exercise of a person's groundwater ownership and rights unless it is necessary for [consider] the public interest in conservation, preservation, protection, recharging, and prevention of waste of groundwater, and of groundwater reservoirs or their subdivisions, and in controlling subsidence caused by withdrawal of groundwater from those groundwater reservoirs or their subdivisions, consistent with the objectives of Section 59, Article XVI, Texas Constitution; (5) shall consider the goals developed as part of the district's management plan under Section 36.1071; and (6) may not discriminate between land that is irrigated for production and land that was irrigated for production and enrolled or participating in a federal conservation program. SECTION 5. Section 36.1071(a), Water Code, is amended to read as follows: (a) Following notice and hearing, the district shall, in coordination with surface water management entities on a regional basis, develop a management plan that addresses the following management goals, as applicable: (1) providing the most efficient use of groundwater; (2) controlling and preventing waste of groundwater; (3) controlling and preventing subsidence; (4) addressing conjunctive surface water management issues; (5) addressing natural resource issues; (6) addressing drought conditions; (7) addressing conservation, recharge enhancement, rainwater harvesting, precipitation enhancement, or brush control, where appropriate and cost-effective; [and] (8) addressing the desired future conditions adopted by the district under Section 36.108; and (9) protecting the groundwater ownership and rights recognized by Section 36.002. SECTION 6. The heading to Section 36.108, Water Code, is amended to read as follows: Sec. 36.108. ESTABLISHING DESIRED FUTURE CONDITIONS [JOINT PLANNING] IN MANAGEMENT AREA. SECTION 7. Sections 36.108(c), (d), and (d-2), Water Code, are amended to read as follows: (c) The district representatives shall meet at least annually to [conduct joint planning with the other districts in the management area and to] review the management plans, the accomplishments of the management area, and proposals to adopt new or amend existing desired future conditions. In reviewing the management plans, the districts shall consider: (1) the goals of each management plan and its impact on planning throughout the management area; (2) the effectiveness of the measures established by each district's management plan for protecting private property rights, conserving and protecting groundwater, and preventing waste, and the effectiveness of these measures in the management area generally; (3) any other matters that the boards consider relevant to the protection of private property rights, protection and conservation of groundwater, and the prevention of waste in the management area; and (4) the degree to which each management plan achieves the desired future conditions adopted under Subsection (d-4) [established during the joint planning process]. (d) Not later than September 1, 2010, and every five years thereafter, the districts shall consider groundwater availability models and other data or information for the management area and shall propose for adoption desired future conditions for the relevant aquifers within the management area. Before voting on the proposed desired future conditions of the aquifers under Subsection (d-2), the districts shall consider: (1) aquifer uses or conditions within the management area, including conditions that differ substantially from one geographic area to another; (2) the water supply needs and water management strategies included in the state water plan; (3) hydrological conditions, including for each aquifer in the management area the total estimated recoverable storage as provided by the executive administrator, and the average annual recharge, inflows, and discharge; (4) other environmental impacts, including impacts on spring flow and other interactions between groundwater and surface water; (5) the impact on subsidence; (6) socioeconomic impacts reasonably expected to occur; (7) the impact on the interests and rights in private property, including ownership and the rights of management area landowners and their lessees and assigns in groundwater as recognized by [under] Section 36.002; (8) the feasibility of achieving the desired future condition; and (9) any other information relevant to the specific desired future conditions. (d-2) The desired future conditions proposed and approved under this section [Subsection (d)] must allow [provide a balance between] the highest practicable level of groundwater production of the total estimated recoverable storage that is consistent with the groundwater ownership and rights recognized by Section 36.002, [and] the reasonable conservation, preservation, protection, recharging, and prevention of waste of groundwater, and control of subsidence in the management area. This subsection does not prohibit the establishment of desired future conditions that provide for the reasonable long-term management of groundwater resources consistent with the management goals under Section 36.1071(a). The desired future conditions proposed under Subsection (d) must be approved by a two-thirds vote of all the district representatives for distribution to the districts in the management area. A period of not less than 90 days for public comments begins on the day the proposed desired future conditions are mailed to the districts. During the public comment period and after posting notice as required by Section 36.063, each district shall hold a public hearing on any proposed desired future conditions relevant to that district. During the public comment period, the district shall make available in its office a copy of the proposed desired future conditions and any supporting materials, such as the documentation of factors considered under Subsection (d) and groundwater availability model run results. After the public hearing, the district shall compile for consideration at the next joint planning meeting a summary of relevant comments received, any suggested revisions to the proposed desired future conditions, and the basis for the revisions. SECTION 8. Sections 36.113(c), (d), (e), (f), and (h), Water Code, are amended to read as follows: (c) A district may require that the following be included in the permit or permit amendment application: (1) the name and mailing address of the applicant and the owner of the land on which the well will be located; (2) if the applicant is other than the owner of the property, documentation establishing the applicable authority to construct and operate a well for the proposed use; (3) a statement of the nature and purpose of the proposed use and the amount of water to be used for each purpose; (4) a water conservation plan or a declaration that the applicant will comply with the district's management plan; (5) the location of each well and the estimated rate at which water will be withdrawn; (6) a water well closure plan or a declaration that the applicant will comply with well plugging guidelines and report closure to the commission; [and] (7) a drought contingency plan; and (8) documentation of the applicant's ownership interest in the proposed groundwater production that demonstrates: (A) the application is consistent with the applicant's fair share; and (B) the applicant's production of groundwater will not result in the confiscation by uncompensated drainage of another person's fair share. (d) This subsection does not apply to the renewal of an operating permit issued under Section 36.1145. Before granting or denying a permit, or a permit amendment issued in accordance with Section 36.1146, the district shall consider whether: (1) the application conforms to the requirements prescribed by this chapter and is accompanied by the prescribed fees; (2) the proposed use of water unreasonably affects the groundwater ownership and rights recognized by Section 36.002 or existing groundwater and surface water resources [or existing permit holders]; (3) the proposed use of water is dedicated to any beneficial use; (4) the proposed use of water is consistent with the district's approved management plan; (5) if the well will be located in the Hill Country Priority Groundwater Management Area, the proposed use of water from the well is wholly or partly to provide water to a pond, lake, or reservoir to enhance the appearance of the landscape; (6) the applicant has agreed to avoid waste and achieve water conservation; and (7) the applicant has agreed that reasonable diligence will be used to protect groundwater quality and that the applicant will follow well plugging guidelines at the time of well closure. (e) The district may impose more restrictive permit conditions on new permit applications and permit amendment applications to increase use by historic users if the limitations: (1) apply to all subsequent new permit applications and permit amendment applications to increase use by historic users, regardless of type or location of use; (2) bear a reasonable relationship to the existing district management plan; [and] (3) are reasonably necessary to protect existing use; and (4) are consistent with the groundwater ownership and rights recognized by Section 36.002 and with Section 59, Article XVI, Texas Constitution. (f) This subsection does not apply to the renewal of an operating permit issued under Section 36.1145. Permits, and permit amendments issued in accordance with Section 36.1146, may be issued subject to the rules promulgated by the district and subject to terms and provisions with reference to the drilling, equipping, completion, alteration, or operation of, or production of groundwater from, wells or pumps that may be necessary to: (1) protect the groundwater ownership and rights recognized by Section 36.002; (2) prevent waste and achieve water conservation; (3) [,] minimize as far as practicable the drawdown of the water table or the reduction of artesian pressure; (4) [,] lessen interference between wells; [,] or (5) control and prevent subsidence. (h) In issuing a permit for an existing or historic use, a district may not: (1) discriminate between land that is irrigated for production and land or wells on land that was irrigated for production and enrolled or participating in a federal conservation program; or (2) issue a permit that will result in the confiscation by uncompensated drainage of another person's fair share. SECTION 9. Section 36.116, Water Code, is amended to read as follows: Sec. 36.116. REGULATION OF SPACING AND PRODUCTION. (a) In order to protect the groundwater ownership and rights recognized by Section 36.002, to minimize as far as practicable the drawdown of the water table or the reduction of artesian pressure, to control subsidence, to prevent interference between wells, to prevent degradation of water quality, or to prevent waste, a district by rule may regulate: (1) the spacing of water wells by: (A) requiring all water wells to be spaced a certain distance from property lines or adjoining wells; (B) requiring wells with a certain production capacity, pump size, or other characteristic related to the construction or operation of and production from a well to be spaced a certain distance from property lines or adjoining wells; or (C) imposing spacing requirements adopted by the board; and (2) the production of groundwater by: (A) setting production limits on wells; (B) limiting the amount of water produced based on acreage or tract size; (C) limiting the amount of water that may be produced from a defined number of acres assigned to an authorized well site; (D) limiting the maximum amount of water that may be produced on the basis of acre-feet per acre or gallons per minute per well site per acre; (E) managed depletion; or (F) any combination of the methods listed above in Paragraphs (A) through (E). (b) In promulgating any rules limiting groundwater production, the district: (1) may preserve historic or existing use before the effective date of the rules to the maximum extent practicable consistent with the groundwater ownership and rights recognized by Section 36.002, Section 59, Article XVI, Texas Constitution, and the district's management plan under Section 36.1071 and as provided by Section 36.113; and (2) may adopt a rule only if the district finds that the rule is consistent with the public interest. (c) In regulating the production of groundwater based on tract size or acreage, a district may consider the service needs or service area of a retail public utility in a manner consistent with and without resulting in the confiscation by uncompensated drainage of the groundwater ownership and rights recognized by Section 36.002. For the purposes of this subsection, "retail public utility" has [shall have] the meaning provided by Section 13.002. (d) For the protection of the groundwater ownership and rights recognized by Section 36.002 and better management of the groundwater resources located in a district or if a district determines that conditions in or use of an aquifer differ substantially from one geographic area of the district to another, the district may adopt different rules for: (1) each aquifer, subdivision of an aquifer, or geologic strata located in whole or in part within the boundaries of the district; or (2) each geographic area overlying an aquifer or subdivision of an aquifer located in whole or in part within the boundaries of the district. (e) In regulating the production of groundwater under Subsection (a)(2), a district: (1) shall select a method that is appropriate based on the protection of the groundwater ownership and rights recognized by Section 36.002 and hydrogeological conditions of the aquifer or aquifers in the district; and (2) may limit the amount of water produced based on contiguous surface acreage. (f) A rule adopted under this section must afford each person who has an ownership interest in the groundwater within the boundaries of the district a fair share of the groundwater as recognized by Section 36.002. SECTION 10. Subchapter D, Chapter 36, Water Code, is amended by adding Section 36.1161 to read as follows: Sec. 36.1161. PETITION FOR RULEMAKING. (a) A person who has an ownership interest in groundwater may petition a district with authority to regulate the groundwater to adopt rules under Section 36.116(d). (b) The petitioner has the burden of proof that the rules are necessary to protect the groundwater ownership and rights recognized by Section 36.002 or to achieve a purpose of this chapter because conditions in or use of an aquifer, subdivision of an aquifer, or geologic strata differ substantially from: (1) another aquifer, subdivision of an aquifer, or geologic strata; (2) any aquifer, subdivision of an aquifer, or geologic strata not currently included in an established desired future condition, as of January 1, 2013; or (3) one geographic area of the district to another. (c) A district shall require the petitioner to provide written notice to each person with an ownership interest in groundwater that would be affected by the rules requested in the petition. (d) A district may request technical assistance regarding the technical merits of the petition from the Texas Water Development Board. The Texas Water Development Board shall provide a written technical response not later than the 60th day after the date the Texas Water Development Board receives a written request for assistance by the district under this subsection. (e) A district shall hold a hearing to consider a petition submitted under this section in the manner provided by Section 36.101. A district is not required to provide notice required by Sections 36.101(d)(1) through (4). (f) A board may grant, modify, or deny a petition by written order. The order must include the findings of the board relevant to the evidence provided by the petitioner under Subsection (b). (g) A person affected by and dissatisfied with a rule adopted under this section is entitled to file a suit against the district or its directors under Section 36.251. SECTION 11. Section 36.117(a), Water Code, is amended to read as follows: (a) A district by rule may provide an exemption from the district's requirement to obtain any permit required by this chapter or the district's rules if the exemption is consistent with the groundwater ownership and rights recognized by Section 36.002. SECTION 12. The changes in law made by this Act apply only to an application for a permit or a permit amendment that is received by a groundwater conservation district on or after the effective date of this Act. An application for a permit or permit amendment that is received before the effective date of this Act is governed by the law in effect on the date the application is received, and that law is continued in effect for that purpose. SECTION 13. The changes in law made by this Act apply only to a rule of a groundwater conservation district that is adopted on or after the effective date of this Act. A rule adopted before the effective date of this Act is subject to the law in effect on the date the rule took effect, and that law is continued in effect for that purpose. SECTION 14. This Act takes effect September 1, 2017.