By: Perry  S.B. No. 1392          (In the Senate - Filed March 7, 2017; March 16, 2017, read   first time and referred to Committee on Agriculture, Water & Rural   Affairs; May 10, 2017, reported adversely, with favorable   Committee Substitute by the following vote:  Yeas 5, Nays 2;   May 10, 2017, sent to printer.)Click here to see the committee vote    COMMITTEE SUBSTITUTE FOR S.B. No. 1392 By:  Hinojosa     A BILL TO BE ENTITLED   AN ACT     relating to groundwater conservation districts.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Sections 36.001(2) and (7), Water Code, are   amended to read as follows:                (2)  "Commission" means the Texas [Natural Resource   Conservation] Commission on Environmental Quality or its   successor.                (7)  "Subdivision of a groundwater reservoir" means a   definable part of a groundwater reservoir in which the groundwater   supply will not be appreciably affected by withdrawing water from   any other part of the reservoir, as indicated by known geological   and hydrological conditions and relationships [and on foreseeable   economic development] at the time the subdivision is designated or   altered.          SECTION 2.  Section 36.0015(b), Water Code, is amended to   read as follows:          (b)  In order to provide for the conservation, preservation,   protection, recharging, and prevention of waste of groundwater, and   of groundwater reservoirs or their subdivisions, and to control   subsidence caused by withdrawal of water from those groundwater   reservoirs or their subdivisions, consistent with the objectives of   Section 59, Article XVI, Texas Constitution, groundwater   conservation districts may be created as provided by this chapter.   Groundwater conservation districts created as provided by this   chapter are the state's preferred method of groundwater management   in order to:                (1)  protect property rights;                (2)  [,] balance the conservation and development of   groundwater to meet the needs of this state;                (3)  [, and] use the best available science; and                (4)  treat each groundwater owner fairly [in the   conservation and development of groundwater through rules   developed, adopted, and promulgated by a district in accordance   with the provisions of this chapter].          SECTION 3.  Sections 36.002(a) and (b), Water Code, are   amended to read as follows:          (a)  A [The legislature recognizes that a] landowner owns the   groundwater below the surface of the landowner's land as real   property.          (b)  The groundwater ownership and rights 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)  the right to use groundwater for a beneficial use   without causing waste; and                (3)  [have] any other right recognized under common   law.          SECTION 4.  Section 36.020(a), Water Code, is amended to   read as follows:          (a)  At an election to create a district, the temporary   directors may include a proposition for the issuance of bonds or   notes, the levy of taxes to retire all or part of the bonds or notes,   and the levy of a maintenance tax. The maintenance tax rate may not   exceed 37.5 [50] cents on each $100 of assessed valuation.          SECTION 5.  Section 36.062, Water Code, is amended to read as   follows:          Sec. 36.062.  OFFICES AND MEETING PLACES.  (a)  The board   shall designate from time to time and maintain one or more regular   offices for conducting the business of the district and maintaining   the records of the district. Such offices must be reasonably   accessible to members of the public who reside in the district and   may be located either inside or outside the district's boundaries   as determined in the discretion of the board.          (b)  The board shall designate one or more places reasonably   accessible to members of the public who reside in the district   inside or outside the district for conducting the meetings of the   board.          SECTION 6.  Section 36.101(c), Water Code, is amended to   read as follows:          (c)  The board shall compile its rules and make them   available for use and inspection at each of the district's offices   [principal office].          SECTION 7.  Sections 36.1071(e) and (f), Water Code, are   amended to read as follows:          (e)  In the management plan described under Subsection (a),   the district shall:                (1)  identify the performance standards and management   objectives under which the district will operate to achieve the   management goals identified under Subsection (a);                (2)  specify, in as much detail as possible, the   actions, procedures, performance, and avoidance that are or may be   necessary to effect the plan, including specifications and proposed   rules; and                (3)  include estimates of the following:                      (A)  modeled available groundwater in the   district based on the desired future condition established under   Section 36.108;                      (B)  the amount of groundwater being used within   the district on an annual basis;                      (C)  the annual amount of recharge from   precipitation, if any, to the groundwater resources within the   district;                      (D)  for each aquifer, the estimated annual volume   of water that discharges:                            (i)  from the aquifer to springs and any   surface water bodies, including lakes, streams, and rivers; and                            (ii)  through evaporation or transpiration;   and                      (E)  the annual volume of lateral and vertical    flow into and out of the district within each aquifer and between   aquifers in the district[, if a groundwater availability model is   available;                      [(F)     the projected surface water supply in the   district according to the most recently adopted state water plan;   and                      [(G)     the projected total demand for water in the   district according to the most recently adopted state water plan;   and                [(4)     consider the water supply needs and water   management strategies included in the adopted state water plan].          (f)  The district shall adopt rules necessary to implement   the management plan.  Prior to the development of the management   plan and its approval under Section 36.1072, the district may not   adopt rules other than rules pertaining to the registration and   interim permitting of new and existing wells and rules governing   spacing and procedure before the district's board; however, the   district may not adopt any rules limiting the production of wells,   except rules requiring that groundwater produced from a well be put   to a nonwasteful, beneficial use.  A newly created [The] district   may accept applications for permits under Section 36.113, provided   the district does not act on any such application until the   district's initial management plan is approved as provided in   Section 36.1072.          SECTION 8.  Section 36.108, Water Code, is amended by   amending Subsections (c), (d), (d-3), and (d-4) and adding   Subsections (c-1) and (c-2) 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 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 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 in the management area are   being achieved [established during the joint planning process].          (c-1)  Districts in a management area jointly shall   delineate the boundaries of each subdivision of a groundwater   reservoir in the management area, using the best available science.   On request by a district, the development board shall provide   technical assistance with the development of the initial boundaries   and any subsequent updates to the boundaries of a subdivision. The   delineated boundaries of each subdivision must be updated as   necessary to accurately reflect the actual boundaries.          (c-2)  Under Subsection (c-1), a district:                (1)  may take into consideration conditions that differ   substantially from one geographic area to another in delineating   boundaries of a subdivision of a groundwater reservoir;                (2)  shall report to the development board the surface   level boundaries of a subdivision of a groundwater reservoir using   metes and bounds; and                (3)  shall maintain in each office of the districts in   the management area copies of the delineations of the subdivisions   of groundwater reservoirs and the report made under Subdivision   (2).          (d)  Not later than September 1, 2010, and every five years   thereafter, the districts shall consider groundwater monitoring   data, 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 under Section 36.002;                (8)  the feasibility of achieving the desired future   condition and the degree to which any previously adopted desired   future condition is being achieved; and                (9)  any other information relevant to the specific   desired future conditions.          (d-3)  After the earlier of the date on which all the   districts have submitted their district summaries or the expiration   of the public comment period under Subsection (d-2), the district   representatives shall reconvene to review the reports, consider any   district's suggested revisions to the proposed desired future   conditions, and finally adopt the desired future conditions for the   management area. The desired future conditions must be approved by    [adopted as] a resolution adopted by a two-thirds vote of all the   district representatives not later than the 90th day after the date   the public comment period expires. Not later than the 180th day   after the expiration of the public comment period, the [The]   district representatives shall produce a desired future conditions   explanatory report for the management area and submit to the   development board and each district in the management area proof   that notice was posted for the joint planning meeting, a copy of the   resolution, and a copy of the explanatory report. The report must:                (1)  identify each desired future condition;                (2)  provide the policy and technical justifications   for each desired future condition;                (3)  include documentation that the factors under   Subsection (d) were considered by the districts and a discussion of   how the adopted desired future conditions impact each factor;                (4)  list other desired future condition options   considered, if any, and the reasons why those options were not   adopted; and                (5)  discuss reasons why recommendations made by   advisory committees and relevant public comments received by the   districts were or were not incorporated into the desired future   conditions.          (d-4)  Not later than the 180th day after the date the public   comment period expires, the district shall submit the explanatory   report under Subsection (d-3) to the development board and [As soon   as possible after a district receives the desired future conditions   resolution and explanatory report under Subsection (d-3), the   district shall] adopt the desired future conditions in the   resolution required by Subsection (d-3) and the explanatory report   that apply to the district.          SECTION 9.  Section 36.1083(e), Water Code, is amended to   read as follows:          (e)  Not later than the 10th day after receiving a petition   described by Subsection (b), the district shall submit a copy of the   petition to the development board and to each district in the   management area. On receipt of the petition, the development board   shall conduct:                (1)  an administrative review to determine whether the   desired future condition established by the district meets the   criteria in Section 36.108(d); and                (2)  a study containing scientific and technical   analysis of the desired future condition, including consideration   of:                      (A)  the hydrogeology of the aquifer;                      (B)  the explanatory report provided to the   development board under Section 36.108(d-3);                      (C)  the factors described under Section   36.108(d); and                      (D)  any relevant:                            (i)  groundwater availability models;                            (ii)  published studies;                            (iii)  estimates of total recoverable   storage capacity;                            (iv)  average annual amounts of recharge,   inflows, and discharge of groundwater; or                            (v)  information provided in the petition or   available to the development board.          SECTION 10.  Section 36.113(d), Water Code, is amended to   read as follows:          (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)  for each water well, the proposed spacing of the   wells conforms to the district's rules regulating the spacing of   wells under Section 36.116;                (3)  the proposed use of water unreasonably affects   existing groundwater and surface water resources or existing permit   holders;                (4)  the proposed annual production conforms to the   district's rules regulating the groundwater production of wells   under Section 36.116;                (5) [(3)]  the proposed use of water is dedicated to   any beneficial use;                (6) [(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;                (7) [(6)]  the applicant has agreed to avoid waste and   achieve water conservation; and                (8) [(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.          SECTION 11.  Section 36.1131(b), Water Code, is amended to   read as follows:          (b)  The permit may include:                (1)  the name and address of the person to whom the   permit is issued;                (2)  the location of the well;                (3)  the date the permit is to expire if no well is   drilled;                (4)  a statement of the purpose for which the well is to   be used;                (5)  a requirement that the water withdrawn under the   permit be put to beneficial use at all times;                (6)  the location of the use of the water from the well;                (7)  a water well closure plan or a declaration that the   applicant will comply with well plugging guidelines and report   closure to the commission;                (8)  the conditions and restrictions[, if any,] placed   by district rules adopted under Section 36.116 on the rate and   amount of withdrawal;                (9)  any conservation-oriented methods of drilling and   operating prescribed by the district;                (10)  a drought contingency plan prescribed by the   district; and                (11)  other terms and conditions as provided by Section   36.113.          SECTION 12.  The heading to Section 36.1132, Water Code, is   amended to read as follows:          Sec. 36.1132.  DISTRICT MANAGEMENT TO ACHIEVE DESIRED FUTURE   CONDITIONS [PERMITS BASED ON MODELED AVAILABLE GROUNDWATER].          SECTION 13.  Section 36.1132, Water Code, is amended by   amending Subsection (b) and adding Subsections (b-1) and (b-2) to   read as follows:          (b)  In issuing permits, the district shall manage total   groundwater production on a long-term basis to achieve an   applicable desired future condition and consider:                (1)  the modeled available groundwater determined by   the executive administrator;                (2)  preparing a report on the degree to which the   desired future conditions are being achieved in the one-year period   after the collection of monitoring data from an aquifer and the   relevant desired future conditions; and                (3)  participating in a joint groundwater management   hearing if the report prepared under Subdivision (2) indicates the   desired future conditions are not being achieved.          (b-1)  Not later than the second anniversary of the date of   the final adoption of a desired future condition under Section   36.108, and every five years thereafter, district representatives   in a management area shall develop a report as described by this   subsection.  The districts shall maintain a copy of the report at   each district office.  The report must:                (1)  identify and compare the rules adopted under   Section 36.116 by each district in the management area; and                (2)  identify differences in rules based on factors   considered in the establishment of desired future conditions   provided by Section 36.108 and the justification for those   differences in the rules.          (b-2)  The joint groundwater management hearing held under   Subsection (b)(3) must include a public comment period on the   desired future conditions. During the joint groundwater management   hearing, the districts shall consider:                (1) [(2)]  the executive administrator's estimate of   the current and projected amount of groundwater produced under   exemptions granted by district rules and Section 36.117;                (2) [(3)]  the amount of groundwater authorized under   permits previously issued by the district;                (3) [(4)]  a reasonable estimate of the amount of   groundwater that is actually produced under permits issued by the   district; and                (4) [(5)]  yearly precipitation and production   patterns.          SECTION 14.  Section 36.116(a), Water Code, is amended to   read as follows:          (a)  In order 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; or                      (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).          SECTION 15.  Sections 36.122(h) and (q), Water Code, are   amended to read as follows:          (h)  In addition to conditions provided by Section 36.1131,   the permit shall specify:                (1)  the maximum amount of water that may be   transferred out of the district; and                (2)  the period for which the water may be transferred.          (q)  In applying this section, a district must be fair,   impartial, and nondiscriminatory between the transfer of   groundwater outside of the district's boundaries and the use of   groundwater in the district.          SECTION 16.  Section 36.201(b), Water Code, is amended to   read as follows:          (b)  The board may annually levy taxes to pay the maintenance   and operating expenses of the district at a rate not to exceed 37.5   [50] cents on each $100 of assessed valuation.          SECTION 17.  Section 36.205(f), Water Code, is amended to   read as follows:          (f)  A district[, including a district described under   Subsection (d),] may assess a production fee under Subsection (c)   and an export fee under Subsection (g), if applicable, for any water   produced under an exemption under Section 36.117 if that water is   subsequently sold to another person.          SECTION 18.  Section 36.207, Water Code, is amended to read   as follows:          Sec. 36.207.  USE OF FEES.  (a)  A district may use funds   obtained from administrative or[,] production[, or export] fees   collected under a special law governing the district or this   chapter for any purpose consistent with the district's approved   management plan, including, without limitation, making grants,   loans, or contractual payments to achieve, facilitate, or expedite   reductions in groundwater pumping or the development or   distribution of alternative water supplies.          (b)  A district may use funds obtained from export fees   collected under a special law governing the district or this   chapter only to enhance:                (1)  monitoring, modeling, and data collection   regarding aquifers managed by the district; and                (2)  research on the advancement of the scientific   understanding of a district's groundwater resources.          SECTION 19.  Sections 36.4051(a) and (d), Water Code, are   amended to read as follows:          (a)  The board may take action on any uncontested application   at a properly noticed public meeting held at any time after the   public hearing at which the application is scheduled to be heard.     The board may issue a written order to:                (1)  grant the application;                (2)  grant the application with special conditions   provided that the applicant agrees to the conditions before the   issuance of the order; or                (3)  deny the application.          (d)  An applicant may, not later than the 20th day after the   date the board issues an order granting or denying the application,   demand a contested case hearing [if the order:                [(1)     includes special conditions that were not part of   the application as finally submitted; or                [(2)     grants a maximum amount of groundwater production   that is less than the amount requested in the application].          SECTION 20.  Section 8824.101, Special District Local Laws   Code, is amended to read as follows:          Sec. 8824.101.  RESTRICTIONS ON GENERAL POWERS. Section   [Sections] 36.103 [and 36.104], Water Code, does [do] not apply to   the district.          SECTION 21.  Section 8833.102, Special District Local Laws   Code, is amended to read as follows:          Sec. 8833.102.  LIMITATIONS ON DISTRICT POWERS.  The   district may not impose:                (1)  a tax; [or]                (2)  a fee on a well used exclusively for domestic or   livestock watering purposes; or                (3)  production fees for an annual period greater than   $1 per acre-foot for water used for agricultural use or 17 cents per   thousand gallons for water used for any other purpose.          SECTION 22.  Section 11, Chapter 1321, Acts of the 77th   Legislature, Regular Session, 2001, is amended by adding Subsection   (b-1) to read as follows:          (b-1)  The district may not assess production fees for an   annual period greater than $1 per acre-foot for water used for   agricultural use or 17 cents per thousand gallons for water used for   any other purpose.          SECTION 23.  The following provisions of the Water Code are   repealed:                (1)  Section 36.001(31), as added by Chapter 415 (H.B.   2767), Acts of the 84th Legislature, Regular Session, 2015;                (2)  Section 36.104;                (3)  Section 36.1072(g);                (4)  Section 36.108(d-5);                (5)  Sections 36.122(m) and (n); and                (6)  Section 36.205(d).          SECTION 24.  Not later than September 1, 2019, a groundwater   conservation district in a management area under Section 36.108,   Water Code, as amended by this Act, shall meet and delineate the   initial boundaries of each subdivision of a groundwater reservoir   in the management area as required by Section 36.108(c-1), Water   Code, as added by this Act.          SECTION 25.  As soon as practicable after the effective date   of this Act, each groundwater conservation district shall adopt   rules as necessary to implement the changes in law made by this Act.          SECTION 26.  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 27.  The changes in law made by this Act apply only   to a suit involving a groundwater conservation district that is   filed on or after the effective date of this Act. A suit filed   before the effective date of this Act is subject to the law in   effect on the date the suit is filed, and that law is continued in   effect for that purpose.          SECTION 28.  This Act takes effect September 1, 2017.     * * * * *