1-1                                   AN ACT
 1-2     relating to the creation, administration, powers, duties,
 1-3     operation, and financing of the Bluebonnet Groundwater Conservation
 1-4     District.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  CREATION.  (a)  A groundwater conservation
 1-7     district, to be known as the Bluebonnet Groundwater Conservation
 1-8     District, is created in Grimes, Washington, Waller, Austin, and
 1-9     Walker counties, subject to approval at a confirmation election
1-10     under Section 15 of this Act.  The district is a governmental
1-11     agency and a body politic and corporate.
1-12           (b)  The district is created under and is essential to
1-13     accomplish the purposes of Section 59, Article XVI, Texas
1-14     Constitution.
1-15           (c)  The purpose of this Act is to create a locally
1-16     controlled groundwater district in order to protect and recharge
1-17     groundwater, to prevent pollution or waste of groundwater, to
1-18     control subsidence caused by withdrawal of water from the
1-19     groundwater reservoirs in the area, and to regulate the transport
1-20     of water out of the boundaries of the district.
1-21           SECTION 2.  DEFINITION.  In this Act, "district" means the
1-22     Bluebonnet Groundwater Conservation District.
1-23           SECTION 3.  BOUNDARIES.  The boundaries of the district are
1-24     coextensive with the boundaries of Grimes, Washington, Waller,
 2-1     Austin, and Walker counties.
 2-2           SECTION 4.  FINDING OF BENEFIT.  All of the land and other
 2-3     property included within the boundaries of the district will be
 2-4     benefited by the works and projects that are to be accomplished by
 2-5     the district under powers conferred by Section 59, Article XVI,
 2-6     Texas Constitution.  The district is created to serve a public use
 2-7     and benefit.
 2-8           SECTION 5.  GENERAL POWERS.  (a)  Except as otherwise
 2-9     provided by this Act, the district has all the rights, powers,
2-10     privileges, authority, functions, and duties provided by the
2-11     general law of this state, including Chapter 36, Water Code,
2-12     applicable to groundwater conservation districts created under
2-13     Section 59, Article XVI, Texas Constitution.  This Act prevails
2-14     over any provision of general law, including Chapter 36, Water
2-15     Code, that is in conflict or is inconsistent with this Act.
2-16           (b)  The district does not have the authority granted by the
2-17     following provisions of Chapter 36, Water Code:
2-18                 (1)  Section 36.105, relating to eminent domain; and
2-19                 (2)  Sections 36.020 and 36.201-36.204, relating to
2-20     taxes.
2-21           SECTION 6.  FEES.  (a)  The board of directors of the
2-22     district by rule may impose reasonable fees on each well for which
2-23     a permit is issued by the district and which is not exempt from
2-24     regulation by the district.  A fee may be based on the size of
2-25     column pipe used by the well or on the actual, authorized, or
2-26     anticipated amount of water to be withdrawn from the well.
2-27           (b)  Fees may not exceed:
 3-1                 (1)  $1 per acre-foot payable annually for water used
 3-2     for agricultural use; or
 3-3                 (2)  17 cents per thousand gallons for water used for
 3-4     any other purpose.
 3-5           (c)  In addition to the fee authorized under Subsection (a)
 3-6     of this section, the district may impose a reasonable fee or
 3-7     surcharge for an export fee using one of the following methods:
 3-8                 (1)  a fee negotiated between the district and the
 3-9     transporter; or
3-10                 (2)  a combined production and export fee not to exceed
3-11     17 cents per thousand gallons for water used.
3-12           (d)  Fees authorized by this section may be assessed annually
3-13     and may be used to fund the cost of district operations.
3-14           SECTION 7.  EXEMPTIONS. (a)  The district may exempt wells
3-15     under Section 36.117, Water Code, from the requirements to obtain a
3-16     drilling permit, an operating permit, or any other permit required
3-17     by Chapter 36, Water Code, or the district's rules.
3-18           (b)  The district may not require a permit for:
3-19                 (1)  a well used solely for domestic use or for
3-20     providing water for livestock or poultry on a tract of land larger
3-21     than 10 acres that is either drilled, completed, or equipped so
3-22     that it is incapable of producing more than 25,000 gallons of
3-23     groundwater a day;
3-24                 (2)  the drilling of a water well used solely to supply
3-25     water for a rig that is actively engaged in drilling or exploration
3-26     operations for an oil or gas well permitted by the Railroad
3-27     Commission of Texas, provided that the person holding the permit is
 4-1     responsible for drilling and operating the water well and the well
 4-2     is located on the same lease or field associated with the drilling
 4-3     rig; or
 4-4                 (3)  the drilling of a water well authorized under a
 4-5     permit issued by the Railroad Commission of Texas under Chapter
 4-6     134, Natural Resources Code, or for production from any such well
 4-7     to the extent the withdrawals are required for mining activities
 4-8     regardless of any subsequent use of the water.
 4-9           (c)  The district may not deny the owner of a tract of land,
4-10     or the owner's lessee, who does not have a well equipped to produce
4-11     more than 25,000 gallons a day on the tract, either a permit to
4-12     drill a well on the owner's land or the privilege to produce
4-13     groundwater from the owner's land, subject to the rules of the
4-14     district.
4-15           (d)  The district may not restrict the production of any well
4-16     that is exempt from permitting under Subsection (b)(1) of this
4-17     section.
4-18           (e)  Notwithstanding Subsection (b) of this section, the
4-19     district may require a well to be permitted by the district and to
4-20     comply with all district rules if:
4-21                 (1)  the purpose of a well exempted under Subsection
4-22     (b)(2) of this section is no longer solely to supply water for a
4-23     rig that is actively engaged in drilling or exploration operations
4-24     for an oil or gas well permitted by the Railroad Commission of
4-25     Texas; or
4-26                 (2)  the withdrawals from a well exempted under
4-27     Subsection (b)(3) of this section are no longer necessary for
 5-1     mining activities or are greater than the amount necessary for
 5-2     mining activities specified in the permit issued by the Railroad
 5-3     Commission of Texas under Chapter 134, Natural Resources Code.
 5-4           (f)  An entity holding a permit issued by the Railroad
 5-5     Commission of Texas under Chapter 134, Natural Resources Code, that
 5-6     authorizes the drilling of a water well shall report monthly to the
 5-7     district:
 5-8                 (1)  the total amount of water withdrawn during the
 5-9     month;
5-10                 (2)  the quantity of water necessary for mining
5-11     activities; and
5-12                 (3)  the quantity of water withdrawn for other
5-13     purposes.
5-14           (g)  Notwithstanding Subsection (e) of this section, the
5-15     district may not require a well exempted under Subsection (b)(3) of
5-16     this section to comply with the spacing requirements of the
5-17     district.
5-18           (h)  The district may not deny an application for a permit to
5-19     drill and produce water for hydrocarbon production activities if
5-20     the application meets the spacing, density, and production rules
5-21     applicable to all permitted water wells in the district.
5-22           (i)  A water well exempted under Subsection (a) or (b) of
5-23     this section may:
5-24                 (1)  be registered in accordance with rules adopted by
5-25     the district; and
5-26                 (2)  be equipped and maintained so as to conform to the
5-27     district's rules requiring installation of casing, pipe, and
 6-1     fittings to prevent the escape of groundwater from a groundwater
 6-2     reservoir to any reservoir not containing groundwater and to
 6-3     prevent the pollution or harmful alteration of the character of the
 6-4     water in any groundwater reservoir.
 6-5           (j)  The district may require the driller of a well exempted
 6-6     under Subsection (a) or (b) of this section to file the drilling
 6-7     log with the district.
 6-8           (k)  A well to supply water for a subdivision of land for
 6-9     which a plat approval is required by Chapter 232, Local Government
6-10     Code, is not exempted under Subsection (b) of this section.
6-11           (l)  Groundwater withdrawn from a well exempt from permitting
6-12     or regulation under this section and subsequently transported
6-13     outside the boundaries of the district is subject to any applicable
6-14     production and export fees under Section 6 of this Act.
6-15           (m)  This section applies to water wells, including water
6-16     wells used to supply water for activities related to the
6-17     exploration or production of hydrocarbons or minerals.  This
6-18     section does not apply to production or injection wells drilled for
6-19     oil, gas, sulphur, uranium, or brine, for core tests, or for
6-20     injection of gas, saltwater, or other fluids, under permits issued
6-21     by the Railroad Commission of Texas.
6-22           SECTION 8.  MITIGATION ASSISTANCE. In addition to the
6-23     authority granted under Chapter 36, Water Code, the district may
6-24     assist in the mediation between landowners regarding the mitigation
6-25     of the loss of existing groundwater supply of exempt domestic and
6-26     livestock users due to the groundwater pumping of others.
6-27           SECTION 9.  MANAGEMENT PLAN.  The district shall develop or
 7-1     contract to develop its own management plan under Section 36.1071,
 7-2     Water Code.
 7-3           SECTION 10.  PERMITTING.  The district shall issue permits
 7-4     for wells based on the consideration of whether:
 7-5                 (1)  the application conforms to the requirements
 7-6     prescribed by Chapter 36, Water Code, and is accompanied by the
 7-7     prescribed fees;
 7-8                 (2)  the proposed use of water unreasonably affects
 7-9     existing groundwater and surface water resources or existing permit
7-10     holders;
7-11                 (3)  the proposed use of water is dedicated to any
7-12     beneficial use;
7-13                 (4)  the proposed use of water is consistent with the
7-14     district's certified water management plan;
7-15                 (5)  the applicant has agreed to avoid waste and
7-16     achieve water conservation; and
7-17                 (6)  the applicant has agreed that reasonable diligence
7-18     will be used to protect groundwater quality and that the applicant
7-19     will follow well plugging guidelines at the time of well closure.
7-20           SECTION 11.  COORDINATION OF ACTIVITIES WITH OTHER ENTITIES.
7-21     (a)  The district may coordinate activities with the Central
7-22     Carrizo-Wilcox Coordinating Council and may appoint a nonvoting
7-23     representative to the Central Carrizo-Wilcox Coordinating Council.
7-24           (b)  The district may coordinate activities with the
7-25     Harris-Galveston Coastal Subsidence District or with other
7-26     groundwater conservation districts to manage portions of the Gulf
7-27     Coast Aquifer.
 8-1           SECTION 12.  BOARD OF DIRECTORS.  (a)  The district is
 8-2     governed by a board of directors of not fewer than 8 or more than
 8-3     20 directors, appointed as provided by Section 13 of this Act.
 8-4           (b)  Initial directors serve until permanent directors are
 8-5     appointed under Section 13 of this Act and qualified as required by
 8-6     Subsection (d) of this section.
 8-7           (c)  Permanent directors serve four-year staggered terms.
 8-8           (d)  Each director must qualify to serve as a director in the
 8-9     manner provided by Section 36.055, Water Code.
8-10           (e)  A director serves until the director's successor has
8-11     qualified.
8-12           (f)  A director may serve consecutive terms.
8-13           (g)  If there is a vacancy on the board, the governing body
8-14     of the entity that appointed the director who vacated the office
8-15     shall appoint a director to serve the remainder of the term.  In
8-16     making this appointment, the governing body shall appoint a
8-17     director to represent the interest of the director who has vacated
8-18     the office.
8-19           (h)  Directors are not entitled to receive compensation for
8-20     serving as a director but may be reimbursed for actual, reasonable
8-21     expenses incurred in the discharge of official duties.
8-22           (i)  A majority vote of a quorum is required for board
8-23     action.  If there is a tie vote, the proposed action fails.
8-24           SECTION 13.  APPOINTMENT OF DIRECTORS. (a)  The commissioners
8-25     courts of the counties within the district, if the district has two
8-26     to five counties, shall each appoint four directors, of whom:
8-27                 (1)  one must represent municipal interests;
 9-1                 (2)  one must represent agricultural interests;
 9-2                 (3)  one must represent industrial interests; and
 9-3                 (4)  one must represent rural water suppliers'
 9-4     interests.
 9-5           (b)  If the district consists of one county, the
 9-6     commissioners court of that county shall appoint eight directors,
 9-7     of whom:
 9-8                 (1)  two must represent municipal interests;
 9-9                 (2)  two must represent agricultural interests;
9-10                 (3)  two must represent industrial interests; and
9-11                 (4)  two must represent rural water suppliers'
9-12     interests.
9-13           (c)  The commissioners courts of the counties within the
9-14     district shall each appoint the appropriate number of initial
9-15     directors as soon as practicable following the effective date of
9-16     this Act, but not later than the 90th day after the effective date
9-17     of this Act.
9-18           (d)  The initial directors shall draw lots to determine their
9-19     terms.  Half of the initial directors serve terms that expire on
9-20     the second anniversary of the date on which all initial directors
9-21     have qualified as required by Section 12 of this Act, and half of
9-22     the initial directors serve terms that expire on the fourth
9-23     anniversary of the date on which all initial directors have
9-24     qualified as required by Section 12 of this Act.  On the second
9-25     anniversary of the date on which all initial directors have
9-26     qualified as required by Section 12 of this Act and every two years
9-27     after that date, the appropriate commissioners courts shall appoint
 10-1    the appropriate number of permanent directors.
 10-2          SECTION 14.  ORGANIZATIONAL MEETING.  As soon as practicable
 10-3    after all the initial directors have been appointed and have
 10-4    qualified as provided in this Act, a majority of the directors
 10-5    shall convene the organizational meeting of the district at a
 10-6    location within the district agreeable to a majority of the
 10-7    directors.  If no location can be agreed on, the organizational
 10-8    meeting of the directors shall be at the Washington County
 10-9    Courthouse.
10-10          SECTION 15.  CONFIRMATION ELECTION.  (a)  The initial board
10-11    of directors shall call and hold, on the same date in each county
10-12    to be included in the district, an election to confirm the creation
10-13    of the district.
10-14          (b)  Except as provided by this section, a confirmation
10-15    election must be conducted as provided by Sections 36.017, 36.018,
10-16    and 36.019, Water Code, and Section 41.001, Election Code.
10-17          (c)  If the majority of qualified voters in a county who vote
10-18    in the election vote to confirm the creation of the district, that
10-19    county is included in the district. If the majority of qualified
10-20    voters in a county who vote in the election vote not to confirm the
10-21    creation of the district, that county is excluded from the
10-22    district.
10-23          (d)  If the creation of the district is not confirmed by an
10-24    election held under this section before the second anniversary of
10-25    the effective date of this Act, the district is dissolved and this
10-26    Act expires on that date.
10-27          SECTION 16.  FINDINGS RELATED TO PROCEDURAL REQUIREMENTS.
 11-1    (a)  The proper and legal notice of the intention to introduce this
 11-2    Act, setting forth the general substance of this Act, has been
 11-3    published as provided by law, and the notice and a copy of this Act
 11-4    have been furnished to all persons, agencies, officials, or
 11-5    entities to which they are required to be furnished by the
 11-6    constitution and other laws of this state, including the governor,
 11-7    who has submitted the notice and Act to the Texas Natural Resource
 11-8    Conservation Commission.
 11-9          (b)  The Texas Natural Resource Conservation Commission has
11-10    filed its recommendations relating to this Act with the governor,
11-11    the lieutenant governor, and the speaker of the house of
11-12    representatives within the required time.
11-13          (c)  All requirements of the constitution and laws of this
11-14    state and the rules and procedures of the legislature with respect
11-15    to the notice, introduction, and passage of this Act are fulfilled
11-16    and accomplished.
11-17          SECTION 17.  EFFECTIVE DATE.  This Act takes effect September
11-18    1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I certify that H.B. No. 3655 was passed by the House on
         April 27, 2001, by a non-record vote; and that the House concurred
         in Senate amendments to H.B. No. 3655 on May 25, 2001, by a
         non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
               I certify that H.B. No. 3655 was passed by the Senate, with
         amendments, on May 22, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
         APPROVED:  __________________________
                              Date
                    __________________________
                            Governor