By: Isaac, Rodriguez of Travis	H.B. No. 3405
	(Senate Sponsor - Campbell)
	(In the Senate - Received from the House May 11, 2015;
	May 15, 2015, read first time and referred to Committee on
	Agriculture, Water, and Rural Affairs; May 20, 2015, reported
	adversely, with favorable Committee Substitute by the following
	vote:  Yeas 6, Nays 0; May 20, 2015, sent to printer.)
Click here to see the committee vote
	COMMITTEE SUBSTITUTE FOR H.B. No. 3405	By:  Perry

	A BILL TO BE ENTITLED
	AN ACT
	relating to the territory, jurisdiction, board composition,
	elections, and powers of the Barton Springs-Edwards Aquifer
	Conservation District, including its authority to regulate certain
	wells for the production of groundwater; imposing a cap on certain
	fees.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 8802.003, Special District Local Laws
	Code, is amended to read as follows:
	Sec. 8802.003.  DISTRICT TERRITORY. (a) The district is
	composed of:
	(1)  the territory described by the Texas Water
	Commission's August 15, 1986, order, as that territory may have
	been modified:
	(A)  by actions of the board through resolutions
	dated August 8, 1987, August 13, 1987, January 24, 2002, May 10,
	2002, and June 23, 2011; or
	(B)  under:
	(i) [(1)]  Subchapter J, Chapter 36, Water
	Code; or
	(ii) [(2)]  other law;
	(2)  the shared territory described by Section
	8802.0035(a); and
	(3)  the territory described as follows: beginning at a
	point at the intersection of the northeastern district boundary as
	it existed on January 1, 2015, and the Colorado River, running east
	along the southern bank of the Colorado River to a point where the
	Colorado River intersects U.S. Highway 183, then south along U.S.
	Highway 183 to a point where U.S. Highway 183 intersects the current
	eastern boundary of the district, then generally west and north
	following along the district boundary as it existed on January 1,
	2015, to the place of beginning.
	(b)  Any boundary reference under Subsection (a)(3) to a
	highway, street, road, avenue, boulevard, or lane shall mean the
	centerline of the boundary.
	SECTION 2.  Subchapter A, Chapter 8802, Special District
	Local Laws Code, is amended by adding Section 8802.0035 to read as
	follows:
	Sec. 8802.0035.  SHARED TERRITORY; JURISDICTION. (a)  The
	territory of the district includes any territory that is:
	(1)  inside the boundaries of the Edwards Aquifer
	Authority;
	(2)  in Hays County; and
	(3)  not within the boundaries existing as of January
	1, 1989, of any other district with the authority to regulate
	groundwater under Chapter 36, Water Code, or prior laws.
	(b)  The Edwards Aquifer Authority has jurisdiction over any
	well that is drilled to produce water from the Edwards Aquifer in
	the shared territory described by Subsection (a).
	(c)  The district has jurisdiction over groundwater and any
	well that is drilled to produce water from any aquifer other than
	the Edwards Aquifer in the shared territory described by Subsection
	(a).
	(d)  The district has jurisdiction over groundwater and any
	well that is drilled to produce water from the Edwards Aquifer or
	any other aquifer in the territory described by Section
	8802.003(a)(1) or (3).  For territory annexed in accordance with
	board resolutions dated January 24, 2002, the district shall share
	jurisdiction with the Plum Creek Conservation District, which also
	includes that territory. Jurisdiction shall be shared under the
	terms of an agreement authorized by Chapter 791, Government Code,
	in a manner that ensures that the districts do not exercise their
	jurisdiction in the shared territory at the same time and for the
	same purpose.
	(e)  The district's jurisdiction over any well that is
	drilled to produce water in the territory described in Section
	8802.003(a)(1), including a well that is used to recover water that
	has been injected as part of an aquifer storage and recovery
	project, applies to the territory described by Section
	8802.003(a)(3) and all wells for which the district has
	jurisdiction in the shared territory described by this section.
	SECTION 3.  Sections 8802.051 and 8802.052, Special District
	Local Laws Code, are amended to read as follows:
	Sec. 8802.051.  DIRECTORS; TERMS. (a) The district is
	governed by a board of seven [five] directors who serve staggered
	four-year terms.
	(b)  Three [At least two] directors must be elected by voters
	residing in the territory composed of:
	(1)  director districts four and five as adopted by the
	district on November 17, 2011; and
	(2)  the territory described by Section 8802.003(a)(3)
	[city of Austin].
	(c)  Four directors must be elected by voters residing
	outside the territory described by Subsection (b) and two of the
	four directors must reside in Hays County.
	Sec. 8802.052.  ELECTION DATE. An election shall be held to
	elect the appropriate number of directors on the [spring] uniform
	election date in November of each even-numbered year.
	SECTION 4.  Section 8802.053, Special District Local Laws
	Code, is amended by amending Subsections (a), (c), and (d) and
	adding Subsection (f) to read as follows:
	(a)  The district is divided into seven [five] numbered,
	single-member districts for electing directors.
	(c)  As soon as practicable after the publication of each
	federal decennial census, the board shall revise the single-member
	districts as the board considers appropriate to reflect population
	changes.  When the board revises the single-member districts under
	this subsection, the board shall place three [two] of the districts
	entirely inside and four of the districts entirely outside the
	territory described by Section 8802.051(b) [:
	[(1)     entirely within the boundaries of the city of
	Austin, as those boundaries exist at that time; or
	[(2)     within the boundaries of the city of Austin, as
	those boundaries exist at that time, but also including
	unincorporated areas or other municipalities that are surrounded
	wholly or partly by the boundaries of the city of Austin if the
	areas or municipalities are noncontiguous to the territory of any
	other single-member district].
	(d)  If the district is required to create single-member
	districts that do not comply with Sections 8802.051(b) and (c) to
	satisfy standards under federal law, the board shall revise the
	single-member districts as the board considers appropriate under
	the federal law standards [Changes in the boundaries of the city of
	Austin between revisions of the single-member districts under
	Subsection (c) do not affect the boundaries of the single-member
	districts].
	(f)  At the first regularly scheduled election of directors
	after the board is expanded from five to seven directors, directors
	elected to fill any vacant positions shall cast lots to determine
	which of those directors shall serve a two-year term and which shall
	serve a four-year term. Lots must be determined so that not more
	than four directors' terms expire in any even-numbered year.
	SECTION 5.  Section 8802.1045, Special District Local Laws
	Code, is amended by adding Subsection (g) to read as follows:
	(g)  Notwithstanding Subsection (b), before January 1, 2017,
	the board may not charge an annual production fee higher than the
	rates set forth under Subsection (a) for a well located in the
	territory described by Section 8802.003(a)(3) or 8802.0035(a). The
	district may increase the annual production fee under this
	subsection by not more than 10 cents per thousand gallons per year
	beginning January 1, 2018, for water permitted for nonagricultural
	purposes, until the annual production fee is equal to the maximum
	amount set forth in Subsection (b).
	SECTION 6.  Section 8802.105, Special District Local Laws
	Code, is amended by amending Subsection (a) and adding Subsection
	(a-1) to read as follows:
	(a)  In this section, "Consumer Price Index" means the annual
	revised Consumer Price Index for All Urban Consumers, as published
	by the Bureau of Labor Statistics of the United States Department of
	Labor or a similar index if that index is unavailable. For
	calculation purposes, the beginning base month is December 2014.
	(a-1)  Each year the board may assess against the City of
	Austin a water use fee in an amount not to exceed the lesser of $1
	million as adjusted to reflect the percentage change during the
	preceding year in the Consumer Price Index or 60 percent of the
	total funding the district expects to receive for the next fiscal
	year from water use fees assessed against Austin and other
	nonexempt users in that year as computed [, subject to the
	computation] under Subsection (b).
	SECTION 7.  Subchapter C, Chapter 8802, Special District
	Local Laws Code, is amended by adding Sections 8802.111 and
	8802.112 to read as follows:
	Sec. 8802.111.  AUTHORITY TO CONSIDER MITIGATION PLAN. (a)
	If an applicant for a permit or permit amendment submits to the
	district with the permit application or permit amendment
	application a plan for mitigating any negative impacts to
	groundwater resources or to other wells that may arise from the
	production of groundwater by the well or wells for which the permit
	or permit amendment is sought, the district may:
	(1)  consider the plan for mitigation in deciding
	whether to grant or deny the application; and
	(2)  include special terms and conditions requiring
	mitigation in a permit or permit amendment that is approved by the
	board for the applicant.
	(b)  Regardless of whether an applicant for a permit or
	permit amendment submits to the district a plan for mitigation, the
	district and an applicant may negotiate a plan to mitigate any
	negative impacts to groundwater resources or to other wells that
	may arise from the production of groundwater by the well or wells
	for which the permit or permit amendment is sought, and the district
	may include the negotiated mitigation plan as a special term or
	condition of the permit or permit amendment. The district may not
	require an applicant to agree to a mitigation plan that was not
	submitted by the applicant.
	(c)  A mitigation plan described by Subsection (a) or (b) may
	include payment of a fee by the applicant for a permit or permit
	amendment to the district in an amount sufficient to mitigate the
	effects of reduced artesian pressure or the drawdown of the water
	table on other wells in the district. If the mitigation plan is
	approved by the district as a special term or condition of the
	permit as submitted by, or as negotiated with, the applicant, the
	district shall establish written procedures for the use of revenue
	derived from fees paid by the applicant as part of the mitigation
	plan and shall include the written procedures as a special term or
	condition of the permit or permit amendment. The written
	procedures may include use of the mitigation plan fee revenue to
	deepen water wells or to lower pumps, to drill and equip new wells,
	or to take other measures to mitigate impacts on water wells that
	are negatively impacted by the production of groundwater by the
	well or wells for which the permit or permit amendment is approved
	by the district.
	(d)  Nothing in this section shall be construed to limit the
	authority of the district to include as a special term or condition
	of a permit a requirement that the permit holder reduce or cease
	groundwater production during certain hydrological conditions.
	Sec. 8802.112.  CERTAIN PERMITS; REDUCTION ORDERS;
	CONTESTED CASE HEARINGS.  (a) In this section, "maximum production
	capacity" means the maximum production capacity of a well, which
	may be based on a 36-hour pump test conducted at the time the well
	was initially constructed or placed into service.
	(b)  A person operating a well before the effective date of
	the Act enacting this section or who has entered into a contract
	before that date to drill or operate a well that is or will be
	located in the territory described by Section 8802.003(a)(3) or
	8802.0035(a) that is subject to the jurisdiction of the district
	shall file an administratively complete permit application with the
	district not later than three months after the effective date of the
	Act enacting this section for the drilling, equipping, completion,
	or operation of any well if the well requires a permit under the
	rules or orders of the district. The person may file the permit
	application for an amount of groundwater production not to exceed
	the maximum production capacity of the well.
	(c)  The district shall issue a temporary permit to a person
	who files an application under Subsection (b) without a hearing on
	the application not later than the 30th day after the date of
	receipt of the application. The district shall issue the temporary
	permit for the groundwater production amount set forth in the
	application. The temporary permit issued under this subsection
	shall provide the person with retroactive and prospective
	authorization to drill, operate, or perform another activity
	related to a well for which a permit is required by the district for
	the period of time between the effective date of the Act enacting
	this section and the date that the district takes a final,
	appealable action on issuance of a regular permit pursuant to the
	permit application if:
	(1)  the person's drilling, operating, or other
	activities associated with the well are consistent with the
	authorization sought in the permit application;
	(2)  the person timely pays to the district all
	administrative fees and fees related to the amount of groundwater
	authorized to be produced pursuant to the temporary permit in the
	same manner as other permit holders in the district; and
	(3)  the person complies with other rules and orders of
	the district applicable to permit holders.
	(d)  The temporary permit issued under Subsection (c) does
	not confer any rights or privileges to the permit holder other than
	those set forth in this section. After issuing the temporary
	permit, the district shall process the permit application for
	notice, hearing, and consideration for issuance of a regular permit
	consistent with this section. The district, after notice and
	hearing, shall issue an order granting the regular permit
	authorizing groundwater production in the amount set forth in the
	temporary permit unless the district finds that authorizing
	groundwater production in the amount set forth in the temporary
	permit issued under Subsection (c) is causing a failure to achieve
	applicable adopted desired future conditions for the aquifer.
	(e)  To reduce the amount of groundwater authorized to be
	produced under a temporary permit issued under Subsection (c) or a
	regular permit issued under Subsection (d), the district must show
	by a preponderance of the evidence that the amount of groundwater
	being produced under the permit is causing a failure to achieve
	applicable adopted desired future conditions for the aquifer. A
	person who relies on the temporary permit granted by Subsection (c)
	to drill, operate, or engage in other activities associated with a
	water well assumes the risk that the district may grant or deny,
	wholly or partly, the permit application when the district takes
	final action after notice and hearing to issue a regular permit
	pursuant to the application.
	(f)  The holder of a temporary permit or a regular permit
	subject to a district order under this section to reduce the amount
	of groundwater production from the permitted well may contest any
	reduction in the amount of production from the permitted well by
	requesting a contested case hearing on the reduction order to be
	conducted by the State Office of Administrative Hearings in the
	manner provided by Sections 36.416, 36.4165, and 36.418, Water
	Code. The district shall contract with the State Office of
	Administrative Hearings to conduct the hearing as provided by those
	sections of the Water Code. To the extent possible, the State Office
	of Administrative Hearings shall expedite a hearing under this
	subsection.
	(g)  For the State Office of Administrative Hearings to
	uphold a district order reducing the amount of groundwater
	authorized to be produced under a temporary or regular permit, the
	district must demonstrate by a preponderance of the evidence that
	the reduction is necessary to prevent a failure to achieve
	applicable adopted desired future conditions for the aquifer.
	SECTION 8.  (a)  The legislature validates and confirms all
	acts and proceedings of the board of directors of the Barton
	Springs-Edwards Aquifer Conservation District that were taken
	before the effective date of this Act.
	(b)  Subsection (a) of this section does not apply to any
	matter that on the effective date of this Act:
	(1)  is involved in litigation if the litigation
	ultimately results in the matter being held invalid by a final
	judgment of a court; or
	(2)  has been held invalid by a final judgment of a
	court.
	SECTION 9.  (a)  Not later than three months after the
	effective date of this Act, the board of directors of the Barton
	Springs-Edwards Aquifer Conservation District shall appoint one
	temporary director to the board to represent the territory
	described by Section 8802.003(a)(3), Special District Local Laws
	Code, as added by this Act, and one temporary director to represent
	the territory described by Section 8802.0035(a), Special District
	Local Laws Code, as added by this Act.
	(b)  The temporary directors appointed under Subsection (a)
	of this section shall serve at large until the next general election
	of directors of the district under Section 8802.052, Special
	District Local Laws Code, as amended by this Act.
	(c)  The board of directors of the Barton Springs-Edwards
	Aquifer Conservation District shall adjust the board member terms
	of office to conform to the new election date under Section
	8802.052, Special District Local Laws Code, as amended by this Act.
	SECTION 10.  (a) The legal notice of the intention to
	introduce this Act, setting forth the general substance of this
	Act, has been published as provided by law, and the notice and a
	copy of this Act have been furnished to all persons, agencies,
	officials, or entities to which they are required to be furnished
	under Section 59, Article XVI, Texas Constitution, and Chapter 313,
	Government Code.
	(b)  The governor, one of the required recipients, has
	submitted the notice and Act to the Texas Commission on
	Environmental Quality.
	(c)  The Texas Commission on Environmental Quality has filed
	its recommendations relating to this Act with the governor, the
	lieutenant governor, and the speaker of the house of
	representatives within the required time.
	(d)  All requirements of the constitution and laws of this
	state and the rules and procedures of the legislature with respect
	to the notice, introduction, and passage of this Act are fulfilled
	and accomplished.
	SECTION 11.  This Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect September 1, 2015.
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