The Edwards Aquifer Authority ("Authority") proposes the adoption of §§707.1, 707.101-707.106, 707.201-707.208, 707.301-707.315, 707.401-707.417, 707.422, 707.424, 707.426, 707.428, 707.501-707.519, 707.601-707.626, to be codified at Title 31, Texas Administrative Code.

Proposed §707.1 provides uniform definitions for certain terms to be used throughout Chapter 707, Title 31, TAC. The purpose of this rule is to reduce the amount of cumbersome regulatory language and thus streamline the rules in Chapter 707.

Proposed §707.101 states the purpose of the rules to be codified at Chapter 707, Title 31, TAC. This section explains that Chapter 707 provides the procedures to be followed in Authority proceedings.

Proposed §707.102 provides general rules regarding the computation of time when a period of time is prescribed or allowed under the Authority's rules or by applicable statute.

Proposed §707.103 sets forth general rules to be followed by persons when filing documents with the Authority. It requires that all such documents be submitted to the docket clerk of the Authority, that any docket or application number appear on the first page, and that such documents be filed by mail or by hand delivery. It also states the circumstances under which documents may be filed by facsimile.

Proposed §707.104 sets forth general rules to be followed by persons when serving documents under Chapter 707. It requires service either in person, by courier, United States mail, or facsimile. Proposed §707.014 includes general rules concerning when service by mail and by facsimile shall be considered complete and includes additional rules regarding service by facsimile. It also provides for an extra three days when a person has a right or is required to do some act within a prescribed period after a document is served on that person by mail or facsimile. It also a certificate of service requirement.

Proposed §707.105 states requirements for applicants, registrants and permittees regarding changes to addresses or telephone numbers.

Proposed §707.106 sets forth general requirements regarding the use of forms provided by the general manager.

Proposed §707.201 relates to meetings of the Board of Directors of the Authority. It states requirements regarding the frequency, scheduling, notice and conduct of such meetings.

Proposed §707.202 relates to the conduct and decorum at Board meetings, and provides some general rules regarding the conduct of persons at such meetings. It also pertains to instances in which persons attending Board meetings have special requests.

Proposed §707.203 pertains to deadlines to file comments on matters set for discussion at a Board meeting and it states some general rules regarding such deadlines.

Proposed §707.204 pertains to the continuance of matters set for discussion at a Board meeting and it states some general rules regarding such continuances.

Proposed §707.205 pertains to the signing of orders or resolutions showing actions taken at Board meetings. It specifies that any such orders or resolutions may be signed by the chair or by any Board member if he or she did not vote against the action taken.

Proposed §707.206 relates to audio recording of Board meetings. It specifies that the assistant to the secretary of the Board shall make audio recordings of meetings of the Board that are open to the public under the Texas Open Meetings Act. It also states that audio recordings will be made of closed sessions, except that no recordings will be made of private consultations with an attorney.

Proposed §707.207 concerns minutes taken in meetings of the Board and states some requirements concerning such minutes.

Proposed §707.208 pertains to instances in which an evidentiary hearing is held before the Board. It specifies that in such cases, the procedures of subchapter G of Chapter 707, title 31, TAC, shall apply.

Proposed §707.301 states that Subchapter D of Chapter 707, Title 31, TAC, applies to any application or registration filed with the Authority.

Proposed §707.302 states the basic requirement that any person who wishes to obtain a permit, authorization, or other approval from the Authority must submit a written application to the Authority on a form provided by the general manager.

Proposed §707.303 relates to who the Authority considers to be the proper applicant, registrant, or declarant in situations where a well has one owner or where there is more than one owner. It also specifies that where a well has more than one owner, the owners shall select one among them to act for and represent the others in the filing the application, registration or declaration.

Proposed §707.304 states the general rule that any person seeking to withdraw groundwater from the Edwards Aquifer must file an application for a groundwater withdrawal permit with the Authority. It also makes clear that no such application must be filed , if the well is exempted from the permit requirement by §§ 1.16(c) and 1.33 of the Edwards Aquifer Authority Act and §711.20 of Title 31, TAC.

Proposed §707.305 pertains to the requirement to file an application for a well construction permit and provides that a person seeking to perform one of the activities mentioned in §711.12(2)-(5) of Title 31, TAC, must file such an application.

Proposed §707.306 pertains to the requirement to register a well and provides that an owner of an existing well or an exempt well must register the well. It also states that well registrations must be filed no later than 180 days from the effective date of the Chapter 707 rules.

Proposed §707.307 concerns the effect of registrations filed before the effective date of the Chapter 707 rules. It provides that owners of wells that were registered with the Authority prior to the effective date of this subchapter D, Chapter 707, Title 31, TAC, need not file another well registration.

Proposed §707.308 pertains to the requirement to file an application for exempt well status. It states that an owner of an existing or proposed well that the owner believes is exempt from the requirements to obtain a permit, and who wishes to withdraw groundwater from that well, must file such an application. It also provides that an owner of a permitted well who wishes to convert that well to one with exempt well status must file such an application.

Proposed §707.309 pertains to the requirement to file an application for a permit to install or modify a meter. It states that a person seeking to install a new meter or modify an existing meter must file such an application with the Authority. It also provides that a person seeking to employ an alternative measuring method or modify an existing alternative measuring method must file such an application.

Proposed §707.310 pertains to the requirement to register a meter. It states that an owner of an existing well equipped with a meter or alternative measuring method must register the meter or alternative measuring method. It also requires that meter registrations be filed with the Authority no later than 180 days from the effective date of the Chapter 707 rules.

Proposed §707.311 concerns the requirement to file a declaration of historical use. It states that for each well from which groundwater from the aquifer has been withdrawn and placed to beneficial use during the historical period, a declaration of historical use must have been filed by December 30, 1996. It also states that an owner of a well that is exempt from the requirement to obtain a groundwater withdrawal permit is not under a requirement to file a declaration of historical use.

Proposed §707.312 pertains to declarations of historical use received before the effective date of Chapter 707 and provides that such declarations need not be resubmitted.

Proposed §707.313 pertains to the requirement to file an application for a monitoring well permit and provides that a person seeking to perform one of the activities mentioned in §711.12(3) of Title 31, TAC, must file such an application.

Proposed §707.314 pertains to the requirement to file an application for an aquifer recharge and storage permit and provides that a person seeking to perform one of the activities mentioned in §711.12(7) of Title 31, TAC, must file such an application.

Proposed §707.315 pertains to the requirement to file an application for a recharge recovery permit and provides that any person seeking to perform one of the activities mentioned in §711.12(8) of Title 31, TAC, must file such an application.

Proposed §707.401 provides general requirements concerning the contents of and requirements for all applications and registrations filed with the Authority. It requires that all applications and registrations be typewritten or printed legibly in ink. It also states that each application and registration shall include: the full name, post office address, and telephone number of applicant or registrant; the signature of the applicant or registrant; and an attestation. The section also states additional requirements pertaining to the name and signature of the applicant or registrant, depending upon the type of entity.

Proposed §707.402 states that applicants and registrants are encouraged to confer with the Authority staff on any questions concerning the preparation of an application or registration.

Proposed §707.403 pertains to application fees to be charged by the Authority and requires that a non-refundable application fee of $25 accompany all applications other than an application for an agricultural conservation loan. It also requires that a non-refundable application fee of $250 accompany an application for an agricultural conservation loan.

Proposed §707.404 concerns registration fees to be charged by the Authority and requires that a $10 registration fee accompany all registrations filed with the Authority.

Proposed §707.405 concerns applications for initial regular permits. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; the source of groundwater supply; the amount and purpose of withdrawal and use; the rate of withdrawal; the method of withdrawal; and a declaration of historical use. This section also specifies the required contents of a declaration of historical use.

Proposed §707.406 concerns applications for additional regular permits. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; the source of groundwater supply; the proposed amount of withdrawal; the proposed purpose of use; the proposed maximum rate of withdrawal; the proposed method of withdrawal; the proposed place of use; a legal description of the location of each well; a map showing the location of each well; a water conservation plan; a water reuse plan; a description of the meter to be used; a list of all other permits applied for or issued by the Authority to the applicant; and any other information as may be required by the general manager.

Proposed §707.407 concerns applications for term permits. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; the source of groundwater supply; the proposed amount of withdrawal; the proposed purpose of use; the proposed maximum rate of withdrawal; the proposed method of withdrawal; the proposed place of use; a legal description of the location of each well; a map showing the location of each well; a water conservation plan; a water reuse plan; a description of the meter; a list of all other permits applied for or issued by the Authority to the applicant; and any other information as may be required by the general manager.

Proposed §707.408 concerns applications for emergency permits. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; the source of groundwater supply; the proposed amount of withdrawal; the proposed purpose of use; the proposed maximum rate of withdrawal; the proposed method of withdrawal; the proposed place of use; a reasonably clear description of the location of each well; a list of all other permits applied for or issued by the Authority to the applicant; the basis for the issuance of an emergency permit; and any other information as may be required by the general manager.

Proposed §707.409 concerns applications to renew emergency permits. It states that such an application must contain the information specified in §707.408. It also states that such an application must be filed before the existing emergency permit has expired.

Proposed §707.410 concerns well registrations. It lists the required contents for such registrations (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; a legal description of the location of the well; a map showing the location of the well, the three nearest wells within a quarter mile of the well, and any possible sources of contamination; the purpose of use; the amount of withdrawal; the maximum rate of withdrawal; the depth of the well; the size of the pump and pumping method; the date of construction; a list of all other permits applied for or issued by the Authority to the applicant; and any other information as may be required by the general manager.

Proposed §707.411 concerns applications for well construction permits. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the owner of the proposed well; a legal description of the location of the proposed well; a map showing the location of the proposed well, the three nearest wells within a quarter mile of the proposed well, and any possible sources of contamination; the proposed purpose of use; the amount proposed to be withdrawn; the proposed maximum rate of withdrawal; the proposed depth of the well; the size of the pump and pumping method; the approximate date that construction will begin; the identity of the well drilling contractor; a list of all other permits applied for or issued by the Authority to the applicant; the claimed legal basis under which groundwater will be withdrawn; and any other information as may be required by the general manager.

Proposed §707.412 concerns meter registrations. It lists the required contents for such registrations (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; a legal description of the location of the well on which the meter is located; a map showing the location of the well; whether or not the well is an exempt well or a permitted well; the purpose of use of the water withdrawn from the well; a description of the meter; the date that the meter was installed; and any other information as may be required by the general manager. In addition, the rule lists the specific elements to be included in the description of the meter.

Proposed §707.413 concerns applications for permits to install or modify a meter to perform one of the activities mentioned in §711.12(a)(6) of Title 31, TAC. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the owner of the well on which the meter is proposed to be installed; a legal description of the location of the well; a map showing the location of the well; whether or not the well is an exempt well or a permitted well; the purpose of use of the water withdrawn from the well; a description of the meter; and any other information as may be required by the general manager. In addition, the rule lists the specific elements to be included in the description of the meter.

Proposed §707.414 concerns applications to transfer interim authorization status and to amend an application for an initial regular permit. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the names and addresses of the person who seeks to transfer his or her interim status and of the person to whom that status is proposed to be transferred; legal descriptions of the locations of the two wells; the purpose of use for the well that has current interim authorization status and the proposed purpose of use for the well to which the transfer is proposed; the amount of groundwater proposed to be withdrawn at the well to which the transfer is proposed; the place of use of the water withdrawn from the well under interim status and the proposed place of use for the water withdrawn from the well to which the transfer is proposed; the period of time for which the transfer is proposed; a copy of the transfer agreement; the price per acre-foot; and any other information as may be required by the general manager.

Proposed §707.415 concerns applications to transfer and amend a permit. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the names and addresses of the person who seeks to transfer his or her permitted rights and person to whom those rights are proposed to be transferred; legal descriptions of the locations of the two wells; the purpose of use for the currently permitted well and the proposed purpose of use for the well to which the transfer is proposed; the amount of groundwater proposed to be withdrawn at the well to which the transfer is proposed; the place of use of the water withdrawn from the permitted well and the proposed place of use for the water withdrawn from the well to which the transfer is proposed; the period of time for which the transfer is proposed; a copy of the transfer agreement; the price per acre-foot; and any other information as may be required by the general manager.

Proposed §707.416 concerns applications for exempt well status. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the owner of the well (or proposed well); a legal description of the location of the well; a map showing the location of each well; the purpose of use; the maximum amount of withdrawal per day; the maximum rate of withdrawal; the depth of the well; the size of the pump and pumping method; the approximate date of well construction; a list of all other permits applied for or issued by the Authority to the applicant; a statement as to whether the well is within a subdivision requiring platting; a statement as to whether the well serves a subdivision requiring platting; and any other information as may be required by the general manager.

Proposed §707.417 pertains to applications for well monitoring permits to perform one of the activities mentioned in §711.12(a)(3) of Title 31, TAC. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; a legal description of the location of the well; a map showing the location of the well; a statement of the purpose of the monitoring well; a description of the method to be used to measure water depth or quality; the amount of water to be withdrawn per annum; the depth of the well; and any other information as may be required by the general manager.

Proposed §707.422 pertains to applications for agricultural conservation loans. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; the tax identification or social security number of the applicant; a description of the intended use of the loan proceeds; a description of any item to be purchased; a legal description of the real property to be affected; any Authority permit application number; credit references; any invoice of items to be purchased with loan proceeds; if, for refinancing, a statement of the date that the equipment was purchased; a statement the applicant's consent and compliance meeting certain requirements; certain specified financial records; documents verifying the organization, existence and authority of the applicant; and any other information that may be required by the general manager.

Proposed §707.424 pertains to applications for declarations of abandonment of a groundwater withdrawal permit. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; a description of the facts demonstrating non-use; a description of facts showing an intent to abandon; and any other information that may be required by the general manager.

Proposed §707.426 pertains to applications to cancel a groundwater withdrawal permit. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; a description of the facts demonstrating non-use; and any other information that may be required by the general manager.

Proposed §707.428 pertains to applications to convert base irrigation groundwater. It lists the required contents for such applications (that are in addition to the information specified in §707.401). Those required contents are: the name and address of the well owner; and, if the application is based in physical impossibility, a description of all facts demonstrating physical impossibility. If the application is based on conservation, a list of other required contents is required.

Proposed §707.501 concerns the Authority's initial action on applications and registrations and provides that all applications and registrations shall be stamped or marked "Received" by the docket clerk with the date of receipt clearly indicated.

Proposed §707.502 concerns the Authority's initial review of applications and registrations for administrative completeness. It provides that such review shall generally be conducted within 45 business days of the receipt of the application or registration and payment of applicable fees. For applications for emergency permits, such review shall be conducted within ten business days. It also states the basic criteria that shall be used in conducting such a review. The proposed rule also provides that upon completion of this review, the general manager shall notify the applicant and forward the registration or application to the docket clerk with a request that it be filed.

Proposed §707.503 concerns the general manager's return of applications and registrations that are deemed to be not administratively complete. It provides procedures to be followed by the general manager in such circumstances and provides procedures to be followed to allow an applicant to correct deficiencies.

Proposed §707.504 concerns the technical review of applications by the Authority. It provides procedures to be followed by Authority staff in conducting such review. In particular, it generally directs Authority staff to complete such review within 90 business days of the determination that an application is administratively complete. It also provides procedural requirements regarding the providing of additional material that may be necessary for technical review. It also provides that the general manager or his designee may enter public or private property for the purpose of inspecting, investigating or verifying conditions or information submitted in connection with an application or a registration.

Proposed §707.505 governs changes to applications and registrations. It provides procedures governing when and how non-substantive and substantive changes may be made to applications and registrations.

Proposed §707.506 pertains to extensions of time to process applications. It provides procedures to be followed where Authority staff determines that technical review of an application cannot be completed within the normal time period.

Proposed §707.507 applies to all applications for groundwater withdrawal permits and provides procedures regarding the proposed permit and technical summary to be prepared by the general manager, including the providing of notice to the applicant. It directs the general manager to prepare a proposed permit unless the general manager recommends to deny the application. It provides procedures regarding the filing of a proposed permit with the docket clerk and its presentation to the Board. The section also provides procedures applicable where the general manager recommends to deny an application. It also provides procedures regarding the technical summary and lists the appropriate contents of the technical summary. If the application is for an initial regular permit, the proposed rule specifies that the general manager shall issue the proposed permit or denial and technical summary within 90 days of the effective date of these rules.

Proposed §707.508 applies to all applications other than applications for groundwater withdrawal permits and provides procedures regarding the proposed approval and technical summary to be prepared by the general manager, including the providing of notice to the applicant. It directs the general manager to prepare a proposed permit unless the general manager recommends to deny the application. It provides procedures regarding the filing of a proposed approval with the docket clerk and its presentation to the Board. This section also provides procedures applicable where the general manager recommends to deny an approval. It also provides procedures regarding the technical summary and lists the contents of the technical summary.

Proposed §707.509 concerns the referral to docket clerk of a proposed permit, approval, authorization or denial, and technical summary. It provides that when administrative and technical review is complete, the completed appropriate documents shall be forwarded to the docket clerk for presentation to the Authority for action and publication, if appropriate.

Proposed §707.510 concerns the publication of a notice of the proposed permit and technical summary in the Texas Register and in local newspapers. It applies to applications for initial regular permits, additional regular permits, term permits, aquifer recharge and storage permits, and recharge recovery permits. It also applies to applications to transfer interim authorization status and amend application for initial regular permit where the location of the point of withdrawal to which the transfer is proposed is East of Cibolo Creek and applications to transfer and amend permit where the location of the point of withdrawal to which the transfer is proposed is East of Cibolo Creek. This section provides procedures for the publication of a proposed permit, approval, authorization or denial, and technical summary in the Texas Register and in local newspapers. It requires that such notice be published no later than 30 days following the referral of the proposed permit, approval, authorization or denial to the docket clerk. It also states the required contents of such notice.

Proposed §707.511 concerns the supplementation of an application required by a change in any of the Authority's rules. It provides that if any pending application is affected by a change in rules before final action on the application is taken, the applicant shall have a right to submit information as necessary to comply with such change.

Proposed §707.512 governs the withdrawal of an application by an applicant and provides procedures pertaining to the withdrawal of an application both with and without prejudice.

Proposed §707.513 governs action by the Board on applications where there is no right to a contested case hearing. It applies to an application for an agricultural conservation loan and for a variance from the comprehensive management plan. It also applies to a decision of the Board regarding loss of exempt well status. It also applies to the denial (but not the granting) of applications: for a new well construction permit, for exempt well status, for a permit to install or modify meter or alternative measuring method, to transfer interim authorization status and amend application for initial regular permit where the location of the point of withdrawal to which the transfer is proposed to occur is West of Cibolo Creek, to transfer and amend permit where the location of the point of withdrawal to which the transfer is proposed to occur is West of Cibolo Creek, for operation of monitoring well, for conservation plan approval, and for reuse plan approval. It provides procedures for: the scheduling of a Board meeting following technical review and the referral of the proposed permit, approval, authorization or denial to the docket clerk; notice of such a Board meeting; the consolidation or severance of matters by the Board; oral presentations before the Board; public comment; and Board action.

Proposed §707.514 governs action by the Board on applications where there is a right to a contested case hearing but none were requested or requests were withdrawn. It applies to applications for initial regular permits, additional regular permits, term permits, aquifer recharge and storage permits, and recharge recovery permits, where, after the time for the filing of a hearing request has passed, no timely hearing request has been received, all timely hearing requests have been withdrawn, or the judge has remanded the application because of settlement. It also applies to applications to transfer interim authorization status and amend application for initial regular permit where the location of the point of withdrawal to which the transfer is proposed is East of Cibolo Creek and to applications to transfer and amend permit where the location of the point of withdrawal to which the transfer is proposed is East of Cibolo Creek, where, after the time for the filing of a hearing request has passed, no timely hearing request has been received, all timely hearing requests have been withdrawn, or the judge has remanded the application because of settlement. It provides procedures for: the scheduling of a Board meeting following technical review and the referral of the proposed permit, approval, authorization or denial to the docket clerk; notice of such a Board meeting; the consolidation or severance of matters by the Board; oral presentations before the Board; public comment; and Board action.

Proposed §707.515 concerns actions on applications by the general manager. Its purpose is to delegate authority to the general manager to take action on behalf of the Board for certain listed actions. Under this section, the general manager may, under certain circumstances, grant: applications for new well construction permits; applications for exempt well status; applications for permit to install or modify meter or alternative measuring method; applications to transfer interim authorization status and amend application for initial regular permit where the location of the point of withdrawal to which the transfer is proposed to occur is West of Cibolo Creek; applications to transfer and amend permit where the location of the point of withdrawal to which the transfer is proposed to occur is West of Cibolo Creek; applications for operation of a monitoring well; applications for conservation plan approval; and applications for reuse plan approval. It also provides procedures applicable in such instances.

Proposed §707.516 concerns corrections to permits by the general manager. It provides procedures regarding when and how the general manager may make non-substantive corrections to permits.

Proposed §707.517 provides special procedures regarding the loss of exempt well status. It covers situations were the Authority receives information from a person other than the well owner indicating that the well no longer qualifies as an exempt well. It provides for notice and an opportunity for the well owner to provide information demonstrating why exempt well status should not be cancelled.

Proposed §707.518 provides special procedures regarding applications for emergency permits. It provides that where the general manager finds that the issuance of an emergency permit is warranted, the general manager shall issue that permit for a term not exceeding 30 days. This section provides for notice to the applicant and public comment and directs the general manager to submit the permit to the Board following public comment for ratification, recission, granting, renewal or modification.

Proposed §707.519 establishes a moratorium on the processing of applications for additional regular permits until a final determination has been made on all applications for initial regular permits.

Proposed §707.601 defines the applicability of subchapter G, which concerns contested case hearings on Authority applications. Under this section, contested case hearings may be requested and granted in connection with applications for initial regular permits, additional regular permits, term permits, aquifer recharge and storage permits, and recharge recovery permits. Contested case hearings may also be requested and granted in connection with applications to transfer interim authorization status and amend application for initial regular permit where the location of the point of withdrawal to which the transfer is proposed is east of Cibolo Creek and applications to transfer and amend permit where the location of the point of withdrawal to which the transfer is proposed is east of Cibolo Creek.

Proposed §707.602 states the persons that are entitled to request a contested case hearing. Those persons are the applicant for that permit or approval, an applicant for another groundwater withdrawal permit issued by the Authority, and any permittee holding a groundwater withdrawal permit issued by the Authority.

Proposed §707.603 concerns the required form and contents of a request for a contested case hearing. It provides that a request for a contested case hearing must be in writing and be filed by United States mail, facsimile, or hand-delivery with the docket clerk within the time specified in §707.604 of these rules.

Proposed §707.604 concerns the time for the filing of a request for a contested case hearing. It provides that, unless a different time limit is specified in the notice of the proposed permit and technical summary, a hearing request must be filed with the docket clerk within 30 days of the date of publication of that notice in the Texas Register.

Proposed §707.605 provides the procedures applicable to the processing of a request for a contested case hearing by the Authority. It states that hearing requests not filed within the time period specified in §707.604 shall not be processed and shall be returned by the docket clerk to the person filing the request. This section directs the docket clerk to provide notice to the applicant, general manager and any persons making a timely hearing request at least 20 days prior to the first meeting at which the Board considers the request. It also provides that persons may submit written responses to the hearing request no later than 20 days before a Board meeting at which the board will evaluate the hearing request. It also provides for the opportunity to file replies to those responses.

Proposed §707.606 governs action by the Board on a request for a contested case hearing. It specifies that the determination of whether a hearing request should be granted is not, in itself, a contested case subject to the APA. It provides procedures applicable to the Board's consideration of the hearing request and states that the board may: (1) determine that the hearing request does not meet the requirements of this subchapter and deny the hearing request; (2) determine that the hearing request does not meet the requirements of this subchapter, deny the hearing request, and refer the application to a public meeting to develop public comment before acting on the application; or (3) determine that a hearing request meets the requirements of this subchapter and direct the docket clerk to refer the application to SOAH for a contested case hearing. It also provides that a request for a contested case hearing shall be granted if the request: (A) is supported by competent evidence; (B) is submitted by a person entitled to request under § 707.602 of these rules; (C) complies with the requirements set forth in §707.603 of these rules; and (D) is timely filed with the docket clerk.

Proposed §707.607 concerns the service of documents filed in a contested case. It specifies that a person filing the document must serve a copy on all parties to the contested case including the general manager at or before the time that the request is filed. It also requires the inclusion of a certificate of service.

In proposed §707.608, the Board delegates the authority to conduct contested case hearings to SOAH. It also specifies that as supplemented by subchapter G of Chapter 707, the applicable rules of practice and procedure of SOAH govern any contested case hearing of the Authority conducted by SOAH.

Proposed §707.609 provides procedures to be followed when the Board refers a contested case to SOAH. It specifies that the Authority shall provide to the judge a list of issues to be addressed. It also states the Board may identify additional issues to be addressed, or may limit issues or areas to be addressed, at any time.

Proposed §707.610 concerns the designation of parties at contested case hearings. It specifies that the general manager is a party in all contested case hearings. It also states that the applicant is a party in a contested case hearing on its application as is the person who requested the contested case hearing. In addition, this section allows an applicant for an initial regular permit who files a notice of party status pursuant to §707.626 to be a party in all contested case hearings for which notice is given.

Proposed §707.611 concerns the burden of proof at contested case hearings and provides that the burden of proof is on the applicant to establish by convincing evidence that he is entitled to an application for a groundwater withdrawal permit.

Proposed §707.612 concerns subpoenas at contested case hearings. It provides procedures concerning such subpoenas and specifies that requests for such subpoenas shall be in writing and directed to the Authority.

Proposed §707.613 concerns remands of contested case hearings to the Board. It provides that at the request of the applicant, a judge may remand an application to the Board if all timely hearing requests have been withdrawn or denied or, if parties have been named, all parties to a contested case reach a settlement so that no facts or issues remain controverted. It also states procedures regarding such a remand.

Proposed §707.614 concerns certified questions in contested case hearings. It provides that a judge may certify a question to the Authority at any time during a contested case hearing. It lists types of issues that are appropriate for certification. It also provides procedures to be followed where a question is certified.

Proposed §707.615 concerns proposals for decision in contested case hearings. It specifies a proposal for decision submitted to the Authority by a judge shall, where appropriate, include any recommended changes to the permit originally proposed by the general manager.

Proposed §707.616 allows a party to waive the right to review and comment upon the judge's proposal for decision. It requires such waiver to be either in writing or stated on the record at the hearing.

Proposed §707.617 concerns pleadings following the submittal of a proposal for decision. It provides that exceptions or briefs may be filed within 20 days after the date of the judge's submittal of the proposal for decision. It also specifies that replies to such exceptions or briefs, if any, must be filed within 30 days after the date of the judge's submittal of the proposal for decision.

Proposed §707.618 governs the scheduling of a meeting of the Board in connection with a proposal for decision. It provides procedure applicable to such scheduling, including notice to parties of the date of the meeting and deadlines for the filings of exceptions and replies. It allows the Board to consolidate related matters or sever issues in a proceeding under certain circumstances.

Proposed §707.619 concerns oral presentations to the Board regarding contested case. It provides that any party to the contested case hearing may make an oral presentation at the Board meeting in which the proposal for decision in that case is presented to the Board. It limits such presentations to 15 minutes each, excluding time for answering questions, unless the chair or the general counsel establishes other limitations.

Proposed §707.620 concerns the reopening of the record in connection with a contested case hearing. It states that the Board may order the judge to reopen the record for further proceedings on specific issues and provides procedure applicable to such an order.

Proposed §707.621 concerns the decision rendered by the Board in connection with a contested case hearing. It specifies that the Board shall render its decision upon the expiration of 30 days or later following service of the judge's proposal for decision, unless the parties have waived review. This section also specifies the Board's decision will be rendered no more than 90 days after the date the proposal for decision is presented to the Board, unless the Board determines that there is good cause for continuing the proceeding. It also provides that the decision, if adverse to any party, shall include findings of fact and conclusions of law separately stated.

Proposed §707.622 concerns motion for rehearing on decisions in contested case hearings. It provides that only a party to the contested case may file a motion for rehearing. It also specifies that a motion for rehearing is a prerequisite to appeal. The rule also provides procedures applicable to the filing of, response to, and the ruling on such a motion for rehearing.

Proposed §707.623 declares that in the absence of a timely motion for rehearing, a decision or order of the board is final on the expiration of the period for filing a motion for rehearing. It also provides that if a party files a motion for rehearing, a decision or order of the board is final and appealable on the date of the order overruling the motion for rehearing or on the date the motion is overruled by operation of law.

Proposed §707.624 concerns that right to appeal a final decision in a decision in a contested case hearing. It provides that a person who was a party to a contested case before the Authority and is affected by a final decision or order of the Authority in that case may file a petition for judicial review within 30 days after the decision or order is final and appealable. It provides that procedures for appealing an order of the Board in contested cases are governed by provisions of the APA governing judicial review of contested case decisions. For the purposes of such an appeal, this section also defines the items to be included in the record in a contested case.

Proposed §707.625 concerns the payment of costs for preparing the record on appeal. It provides that a party who appeals a final decision in a contested case shall pay all costs of preparation of the record and that such a charge is considered to be a court cost and may be assessed by the court in accordance with the Texas Rules of Civil Procedure.

Proposed §707.626 relates to notice of party status. This section states that any applicant for an initial regular permit may obtain party status in any or all contested cases by filing the requisite notice. The section provides that the notice must be in writing and filed with the docket clerk within the time provided by §707.604. In addition, the section lists the information that must be contained in the notice.

Section 2001.0225 of the Texas Government Code requires an agency to perform, under certain circumstances, a regulatory analysis of "major environmental rules." The Authority has determined that none of the proposed rules are "major environmental rules" as that term defined by §1.0225(g)(3) of the Texas Government Code. The basis for this determination is that the proposed rules do not have the specific intent to "protect the environment" or "reduce risks to human health from environmental exposure." The proposed rules would establish procedures to be followed in Authority proceedings. Specifically, these proposed rules would set forth procedures: (1) regarding the computation of time and the filing of documents; (2) governing meetings before the Board; (3) pertaining to the filing of applications and registrations with the Authority; (4) to be followed by the Authority with respect to the processing and review of such applications and registrations; and (5) regarding contested case hearings on applications. The specific intent of these procedural rules is to allow the Authority to efficiently implement its powers and duties. For this reason, we find that these proposed rules do not have a specific intent to "protect the environment" or "reduce risks to human health from environmental exposure." Accordingly, we find that none of the proposed rules are "major environmental rules" and that, therefore, no further analysis is required by §2001.0225 of the Texas Government Code.

Chapter 2007 of the Texas Government Code, also known as the "Texas Private Real Property Rights Preservation Act," requires governmental entities, under certain circumstances, to prepare a takings impact assessment ("TIA") in connection with certain covered categories of proposed governmental actions. Based on the following reasons, the Authority has determined that it need not prepare a TIA in connection with the proposal of these rules. First, the Authority has made a "categorical determination" that rules of practice and procedure do not affect private real property. These proposed rules establish and describe the procedures to be followed in Authority proceedings and before the Board of Directors of the Authority. More specifically, these provisions would set forth procedures: (1) regarding the computation of time and the filing of documents; (2) governing meetings before the board; (3) pertaining to the filing of applications and registrations with the Authority; (4) to be followed by the Authority in connection with the processing and review of such applications and registrations; and (5) regarding contested case hearings on applications. As such, they have no direct affect on private real property and may not result in a taking. Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(4) of the Texas Government Code. See Act §§ 1.08(a), 1.11(a), 1.11(b), 1.11(d)(1), 1.11(h), 1.15(a), 1.15(b), 1.15(c), 1.16(a), 1.16(b). 1.16(c), 1.16(d), 1.17(a), 1.17(b), 1.18, 1.19(a), 1.20, 1.24(c), 1.29(f), 1.29(g), 1.33(a), 1.33(b), and 1.34; Texas Government Code Annotated § 2001.004(1). It was held, in Edwards Aquifer Authority v. Bragg, ___ S.W.2d. ___, No. 04-99-00059-CV, 2000 WL 35582 (Tex. App. San Antonio 2000, no history), that the Edwards Aquifer Act expressly mandates the adoption of substantive and procedural permitting rules and that such actions are therefore excepted from the Texas Private Real Property Rights Preservation Act. The holding of in that case controls here. Third, it is the position of the Authority that all valid actions of the Authority are excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(11)(C) of the Texas Government Code as actions of a political subdivision taken under its statutory authority to prevent waste or protect the rights of owners of interest in groundwater. Accordingly, a TIA need not be prepared in connection with the proposal of these rules.

Gregory M. Ellis, General Manager of the Authority, is responsible for approving the fiscal note that was prepared in connection with these proposed rules.

A Programmatic Assessment of the Authority's proposed rules, which addresses the combined effects of Chapter 707 (relating to procedure before the Authority), 709 (relating to fees) and 711 (relating to groundwater withdrawal permits) has been prepared on behalf of the Authority. The information presented below pertains particularly to the proposed Chapter 707 rules and, by itself, satisfies the requirements stated in §2001.024(a)(4) of the Texas Government Code with respect to those rules. Some of the information presented below is derived from the Programmatic Assessment. Persons interested in viewing the Programmatic Assessment may arrange to do so by contacting the Authority at the telephone number shown below.

The proposed Chapter 707 rules, by themselves and in conjunction with the proposed Chapters 709 and 711 rules, will have fiscal impacts on local governments including the Authority. These rules will affect the budgets of municipalities and other local governments within the Authority's boundaries and those that rely on the Edwards Aquifer for water supplies. Cities close to, but outside, the Authority's boundaries may experience secondary effects from changes in economic activity within the boundaries caused by these rules.

The proposed Chapter 707 rules are not expected to have forseeable material implications relating to the costs or revenues of state government. This conclusion is based on the fact that no state agency is an applicant or is expected to be an applicant for a groundwater withdrawal permit.

This Chapter, together with the proposed Chapters 709 and 711 rules, generate the administrative costs associated with the Authority's permit program. These rules therefore determine, in part, the Authority's annual expense budget, estimated to average approximately $9,500,000 per year for each of the first five years that the rule is in effect. This sum includes the Authority's costs involved in processing applications and in conducting contested case hearings, which are discussed in more detail below.

Although Chapter 707 taken as a whole will have fiscal impacts, the enforcement or administration of many of the individual sections and subchapters within Chapter 707 will have no forseeable implications relating to costs or revenues of state or local governments during the first five years that the rules will be in effect. In particular, subchapter A sets forth definitions to be used throughout the rest of the Chapter. Subchapter B states the purpose of Chapter 707 and provides general rules regarding the computation of time and the filing and service of documents. These two subchapters will have no foreseeable material implications relating to costs or revenues of state or local governments. Subchapter C establishes general rules regarding the conduct of meeting of the Board of Directors of the Authority. Its purpose is to facilitate the efficient conduct of meetings. Since the Board is required to conduct its business through open meetings regardless of these rules, these rules do not have foreseeable material implications relating to costs or revenues of state or local governments. Moreover, the costs of holding board meetings are considered as part of the Authority's overall costs of operations, which are discussed in the fiscal note for Chapter 709.

Subchapter D states the requirements to file various applications and registrations with the Authority. Subchapter E sets forth the required contents of various applications and registrations to be filed with the Authority. The Authority will incur costs in to produce, copy and distribute forms that comply with the provisions of subchapters D and E. The Authority expects roughly $1600 in such costs over the next five years. Local governments, including those that function as water utilities, will spend a certain amount of money and personnel time in complying with these rules by completing forms. Table 707-A, which is included in the Public Benefits and Costs Note for this chapter, provides an estimate of the administrative burdens expected to be incurred by those persons who will be completing registrations and applications. These burdens are not expected to differ significantly for local governments as compared to other persons required to comply.

Subchapter F sets forth the procedures to be used by the Authority when processing and taking actions on various applications and registrations filed with the Authority. The Authority will incur costs in processing and approving (or denying) these applications and registrations. Such costs are almost exclusively a function of staff time and are equivalent to roughly $1,180,000 over the next five years. Since the Authority expects to process most Initial Regular Permits soon after the effective date of these rules and expects that more well registrations will be filed in those first few years, the Authority expects that a greater percentage of these costs will be concentrated in the first two years after the effective date of these rules.

Subchapter G establishes procedures to be used by the Authority in connection with contested case hearings. Contested case hearings may be requested and granted in connection with certain types of permit applications. Although the costs associated with a contested case hearing are expected to vary widely depending on complexity of the application and the underlying facts, the Authority has estimated that the total costs of a typical contested case will be around $26,000. Of this amount, the Authority has estimated that the applicant will incur roughly 1/2 (or about $13,000), while the party asserting the contest will incur roughly 1/4 of those costs (or about $6,500). (The remaining estimated 1/4 will be incurred by the Authority.) The lower percentage for parties bringing the contest reflects the assumption that, generally speaking, parties bringing contests will bring many contests and will achieve economies of scale compared to applicants who will generally be involved only in their own individual cases. Local governments are expected to be involved in contested cases as both the applicant and as the party contesting the application and their costs are not expected to differ significantly from other, non-governmental parties.

Based on the assumption that 250 contested case hearings will be held, the Authority estimates that its costs over the next five years to participate in contested case hearings will be roughly $1.625 million. Uncertainty about the pace of the contested case hearings process makes it difficult to estimate the timing of these costs, other than to say that most are expected to occur in the first two years the rules are in effect.

The total cost of obtaining a permit (including the costs associated with participating in a contested case hearings) to each of the 35 municipal utilities potentially affected by these proposed rules will vary considerably. The cost to the City of San Antonio to obtain the SAWS permit may be as much as $2,000,000. The next two largest governmental utilities, Bexar Metropolitan Water District and New Braunfels Utilities, may each incur costs in the $100,000 to $500,000 range. The two next largest, Uvalde and Alamo Heights, may each incur costs in the range of $50,000 to $100,000. Smaller municipal or other governmental utilities may each incur costs of $50,000 or less.

There are no estimated reductions in costs to state and local governments expected as a result of enforcing or administering the Chapter 707 rules over the course of the first five years that those rules will be in effect. There is no estimated loss or increase in revenue to state and local governments as a result of enforcing or administering the Chapter 707 rules over the course of the first five years that those rules will be in effect.

Gregory M. Ellis, General Manager of the Authority, is responsible for approving the public benefits and costs note that was prepared in connection with these proposed rules.

As noted in the Fiscal Note set forth above, a Programmatic Assessment of the Authority's proposed rules, which addresses the combined effects of Chapter 707 (relating to procedure before the Authority), Chapter 709 (relating to fees) and Chapter 711 (relating to groundwater withdrawal permits) has been prepared on behalf of the Authority. The information presented below pertains particularly to the proposed Chapter 707 rules and, by itself, satisfies the requirements stated in §2001.024(a)(5) of the Texas Government Code with respect to those rules. Some of the information presented below is derived from the Programmatic Assessment. Persons interested in viewing the Programmatic Assessment may arrange to do so by contacting the Authority at the telephone number shown below.

The proposed Chapter 707 rules, by themselves and in conjunction with the proposed Chapters 709 and 711 rules, will produce public benefits and result in economic costs for those persons (including business and governmental entities) that are required to comply with Chapter 707.

Subchapter A sets forth uniform definitions of terms to be used throughout the rest of Chapter 707. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by clarifying the meaning of certain terms used in Chapter 707, providing useful "short-hand" to reduce the amount of cumbersome regulatory language, and to generally allow for a more efficient understanding and operation Chapter 707.

Subchapter B states the purpose of Chapter 707 and provides general rules regarding the computation of time and the filing and service of documents under this Chapter. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by clearly stating the requirements related to filing and service that the public must follow in doing business with the Authority.

Subchapter C establishes general rules regarding the conduct of meeting of the Board of Directors of the Authority. The purpose of subchapter C is to facilitate the more efficient conduct of meetings. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by helping create an environment at Board meetings that is conducive to decision-making and to orderly public input. In addition, these rules help impart predictability and transparency to the decision-making process.

Subchapter D sets forth requirements for persons to file various applications and registration with the Authority to conduct certain activities related to the withdrawal of water from the Aquifer. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by making it clear which activities require a permit or registration.

Subchapter E states with particularity, the required contents for various applications and registrations to be filed with the Authority. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by putting the regulated community on notice as to the Authority's information requirements.

Subchapter F establishes and defines the procedures to be used by the Authority when processing and taking actions on various applications and registrations filed with the Authority. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by providing well-defined procedures and time frames regarding the processing of applications and registrations. These procedures are intended to help ensure that permit decisions are reached through an unbiased method. They also work to ensure that the Authority's decisions are legally and technically sound and well-explained to the public. Some of the provisions in this subchapter also help to promote administrative efficiency.

Subchapter G establishes procedures to be used by the Authority in connection with contested case hearings. The adoption of this subchapter is expected to benefit the public over the course of the first five years that this rule is in effect by establishing an efficient mechanism by which certain persons may challenge the claims to permitted withdrawal rights of other persons and for those rights to be determined in a quasi-judicial setting. To the extent that this process results in legitimate denials of applications or reductions in permitted amount from that which had been applied for, users of the aquifer receive a benefit by reduced costs of "buying down" water rights that exceed the cap on total permitted withdrawals.

As a whole, Chapter 707 is expected to result in economic costs to persons required to comply with Chapter 707. However, many individual sections and subchapters within Chapter 707, by themselves, will not result in economic costs. In particular, subchapter A (which sets forth the definitions to be used throughout the rest of Chapter 707) and Subchapter B (which states the purpose of Chapter 707 and provides general rules regarding the computation of time and the filing and service of documents under this Chapter) will not result in economic costs on persons required to comply with Chapter 707. The basis for this conclusion is that these subchapters will have no implications for regulation or compliance obligations on persons required to comply with the rule. Also, subchapter C will not result in economic costs. Subchapter C establishes general rules regarding the conduct of meeting of the Board of Directors of the Authority. The purpose of subchapter C is to facilitate the more efficient conduct of meetings. Since the Board is required to hold meetings regardless of the substance of subchapter C, subchapter C will not result in economic costs on persons required to comply with Chapter 707.

Subchapter D states the requirements to file various applications and registrations with the Authority. Subchapter E sets forth the required contents of those applications and registrations. These subchapters impose administrative burdens on applicants and permittees. Although particular application and registration forms are not incorporated into these rules, the rules are sufficiently specific to make the forms presently used by the Authority representative of other forms that might be subsequently employed. The total administrative burdens associated with completing and filing applications will vary from one or two person-days per year for a small user to several person-months for the largest user. Forms required to be filed, and an estimate of the time and expenses for an average user to complete them, are detailed below in Table 707-A.

Figure: 31 TAC Part 20, Chapter 707, Preamble

Subchapter F concerns the procedures to be used by the Authority in processing and taking actions on various applications and registrations filed with the Authority. As such, it generally imposes requirements on the Authority and is not expected to impose material economic costs on applicants and registrants.

Subchapter G sets forth the procedures to be used for contested case hearings. Where a contested case is requested and granted, significant economic costs will be expended by the applicant as well as the party bringing the contest. Such costs will likely include costs for attorneys and experts. The costs involved in contested case hearings may have an even more serious effect on small users for whom such costs may be significant relative to the value of their permit.

As noted in the fiscal note set forth above, the costs associated with participation in contested case hearings are expected to vary widely. The Authority has nevertheless estimated the cost of a typical contested case hearing to be around $26,000. Of this amount, the Authority has estimated that the applicant will incur roughly 1/2 of those costs (or around $13,000) while the party asserting the contest will incur roughly 1/4 of those costs (or about $6,500). Uncertainty about the pace of the contested case hearings process makes it difficult to estimate the timing of these costs, other than to say that most are expected to occur in the first two years the rules are in effect.

Section 2001.022 of the Texas Government Code requires agencies to request that the Texas Workforce Commission prepare a Local Employment Impact Statement in connection with certain proposed rules. Under the appropriate circumstances, the Commission is then to prepare, within 25 days, an impact statement which includes a description of the probable effects of the rule on employment in each geographic area affected by the rules for each year of the first five years that the rules will be in effect. On April 21, 2000, after having determined that the proposed Chapter 707 rules may affect a local economy, the Authority submitted to the Commission a copy of the proposed Chapter 707 rules and other supporting and initial information, including information that the Commission requires on a form prescribed by the Commission. On April 28, 2000, the Authority provided to the Commission certain supplemental information relating to these rules.

In a letter to Gregory M. Ellis, dated May 19, 2000, the Commission stated, in regard to these proposed rules as follows: After reviewing the information provided to our Department, there is no apparent basis to refute the proposed employment impacts outlined in the information submitted on behalf of the Authority. Our data will not confirm nor deny the potential lost jobs nor the newly created jobs based upon the impact of these proposed rules.

This letter does not constitute a Local Employment Impact Statement because it does not meet the criteria identified in §2001.022(a) of the Texas Government Code. Because the Commission did not prepare and deliver to the Authority a Local Employment Impact Statement within 25 days after the date on which the Commission received the proposed rules, the proposed rules are presumed not to affect local employment pursuant to §2001.022(e) of the Texas Government Code. Accordingly, there is no Local Employment Impact Statement required by §2001.024(a)(6) of the APA to be included in this Notice of Proposed Rule.

Interested persons may submit written comments on the proposed rules. Comments must be submitted in writing to Brenda Davis, Docket Clerk, Edwards Aquifer Authority, P.O. Box 15830, 1615 N. St. Mary's St., San Antonio, Texas 78212-9030, within 30 days of the publication of this notice in the Texas Register . The written comments should be filed on 8 1/2 x 11 inch paper and be typed or legibly written. Written comments must indicate whether the comments are generally directed at all of the proposed rules, or whether they are directed at specific proposed rules. If directed at specific proposed rules, the number of the proposed rule must be identified and followed by the comments thereon.

The Authority has scheduled the following public hearings on this proposed rule: Wednesday, August 9, 2000, 6:00 p.m., Conference Center Edwards Aquifer Authority, 1615 N. St. Mary's San Antonio, Texas 78215, (210) 222-2204; Tuesday, August 15, 2000, 6:00 p.m., New Braunfels Civic Center, 380 S. Seguin Avenue New Braunfels, Texas 78130, (830) 625-2385; Thursday, August 17, 2000, 6:00 p.m., St. Paul's Lutheran Church, 1303 Avenue M Hondo, Texas 78861,(830) 426-3222; Tuesday, August 22, 2000, 6:00 p.m., Sgt. Willie DeLeon Civic Center, 300 E. Main Street Uvalde, Texas 78801, (830) 278-9922; Thursday, August 24, 2000, 6:00 p.m., San Marcos Activity Center, 501 E. Hopkins San Marcos, Texas 78666, (512) 393-8280.

The new sections are proposed pursuant to §§1.08(a), 1.11(a), 1.11(b), 1.11(d)(1), 1.11(h), 1.15(a), 1.15(b), 1.15(c), 1.16(a), 1.16(b). 1.16(c), 1.16(d), 1.17(a), 1.17(b), 1.18, 1.19(a), 1.20, 1.24(c), 1.29(f), 1.29(g), 1.33(a), 1.33(b), and 1.34(c) of the Edwards Aquifer Authority Act (Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 Texas General Laws 2350, 2358-59, as amended by Act of May 29, 1995, 74th Legislature, Regular Session, Chapter 261, 1995 Texas General Laws 2505, Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 524, 1995 Texas General Laws 3280, and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 Texas General Laws 634 ("Act"); and §2001.004(1) of the Texas Administrative Procedure Act (TEXAS GOVERNMENT CODE ANNOTATED §§ 2001.001-.902 (Vernon 2000)) ("APA").

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." This section provides the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under Article 1 of the Act, including rule governing procedures of the board and the authority." This section requires the Board to adopt rules as necessary to implement the various substantive programs set forth in the Act related to the Edwards Aquifer, including, in particular, administrative procedures to be used before the board and the Authority.

Section 1.11(b) of the Act requires the Authority to "ensure compliance with permitting, metering, and reporting requirements and shall regulate permits." This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to establish procedures related to the filing and processing of various applications and registrations with and by the Authority.

Section 1.11(d)(1) of the Act empowers the Authority to issue and administer grants, loans, or other financial assistance to water users for water conservation and water reuse. Section 1.24(c) of the Act allows the Authority to issue grants or make loans to finance the purchase or installation of equipment or facilities for water conservation. These sections, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, empower the Authority to establish procedures related to the filing and processing of applications for agricultural conservation loans with and by the Authority.

Section 1.11(h) of the Act provides, among other things, that the Authority is "subject to" the APA. Pursuant to this section, the Authority is required to comply with the APA in connection with its rulemaking, even though the Authority is not a state agency and would therefore otherwise not generally be subject to APA requirements. Section 2001.004(1) of the APA requires agencies subject to the APA to "adopt rules of practice stating the nature and requirements of all available formal and informal procedures."

Section 1.15(a) of the Act directs the Authority to manage withdrawals from the aquifer and manage all withdrawal points from the aquifer as provided by this Act. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that would allow the Authority to fulfill these mandates.

Section 1.15(b) of the Act states that "except as provided by §§ 1.17 and 1.33 of this article, a person may not withdraw water from the aquifer or begin construction of a well or other works designed for the withdrawal of water from the aquifer without obtaining a permit from the authority." This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will implement this limitation.

Section 1.15(c) of the Act allows the Authority to issue regular permits, term permits, and emergency permits. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, empowers the Authority to establish procedures related to the filing and processing of applications for initial and additional regular permits, term permits and emergency permits.

Section 1.16(a) of the Act allows an existing user to apply for an initial regular permit by filing a declaration of historical use. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules governing the filing and processing of such applications or declarations.

Section 1.16(b) of the Act sets forth certain requirements concerning an existing user's declaration of historical use and an applicant's payment of application fees required by the Board. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will implement these requirements.

Section 1.16(c) of the Act provides that an owner of a well from which the water will be used exclusively for domestic use or watering livestock and that is exempt under §1.33 of the Act is not required to file a declaration of historical use. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will implement this exemption.

Section 1.16(d) of the Act requires the Board to grant an initial regular permit to an existing user who: (1) files a declaration and pays fees as required by this section; and (2) establishes by convincing evidence beneficial use of underground water from the aquifer. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to fulfill this mandate.

Section 1.17(a) of the Act provides that a person who, on the effective date of this article, owns a producing well that withdraws water from the aquifer may continue to withdraw and beneficially use water without waste until final action on permits by the Authority, if: (1) the well is in compliance with all statutes and rules relating to well construction, approval, location, spacing, and operation; and (2) by March 1, 1994, the person files a declaration of historical use on a form as required by the Authority. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to determine who may continue to withdraw water under such authority.

Section 1.17(b) of the Act specifies that use under "interim authorization" may not exceed on an annual basis the historical, maximum, beneficial use of water without waste during any one calendar year as evidenced by the person's declaration of historical use, unless otherwise determined by the Authority. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to implement this condition.

Section 1.18 of the Act allows the Authority, in certain circumstances, to issue additional regular permits. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, empowers the Authority to establish procedures related to the filing and processing of applications for such permits.

Section 1.19 of the Act allows the Authority to issue term permits and places certain limitations and conditions on the right to withdraw water under such a permit. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to issue term permits and to implement the limitations and conditions stated in §1.19.

Section 1.20 of the Act allows the Authority to issue emergency permits under certain circumstances and subject to certain conditions. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to issue emergency permits when appropriate and to implement the conditions stated in §1.20.

Section 1.29(f) of the Act requires the Authority to impose a permit application fee of not more than $25. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to fulfill this mandate.

Section 1.29(g) of the Act empowers the Authority to impose a registration application fee of not more than $10. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, allows the Authority to adopt procedural rules that will allow the Authority to collect such a fee.

Section 1.33(a) of the Act provides that a well that produces 25,000 gallons of water a day or less for domestic or livestock use is exempt from metering requirements. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to determine who may qualify for such an exemption.

Section 1.33(b) of the Act requires that exempt wells be registered with the Authority or with an underground water conservation district in which the well is located. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to implement this requirement.

Section 1.34(a) of the Act provides that a place of use for Edwards Aquifer groundwater may not be outside the boundaries of the Authority. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to implement these requirements.

Section 1.34(c) of the Act provides that a holder of a permit for irrigation use may not lease more than 50 percent of the irrigation rights initially permitted and that the user's remaining irrigation water rights must be used in accordance with the original permit and must pass with transfer of the irrigated land. This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt procedural rules that will allow the Authority to implement these requirements.

Subchapter A. DEFINITIONS

The Edwards Aquifer Authority ("Authority") proposes the adoption of §§709.1, 709.3, 709.5, 709.7, 709.9, 709.11, 709.13, 709.15, 709.17, 709.19, 709.21, 709.23, 709.25, 709.27, 709.29, 709.31, 709.33, and 709.35, 31 TAC, which will consist of provisions relating to the fee structure of the Authority.

Proposed §709.1 would set forth definitions that will apply to all the Authority rules issued for chapter 709. This rule has been written to provide uniform definitions for words and phrases that are expected to be used consistently throughout Chapter 709. Collectively, every definition contained in proposed §709.1 falls into one of the following three categories: (1) new definitions constructed directly from language used in the Act; and (2) new definitions for factually accurate elaboration of a short-form word that is necessary to further fully the develop the relevant rules for this chapter. The definitions are not intended to create substantive meanings separate and apart from what is otherwise intended by the Act. The definitions are designed to provide useful "short-hand" to reduce the amount of cumbersome regulatory language necessary on other Authority rules. Additionally, a purpose of the definitions is to benefit any interested person's understanding of Authority actions by providing direction to the sections in the Act which effectively define a given term.

Definitions for the following new terms simply consist of a reference to language contained in the Act, where such language introduces or makes self-evident a term that is associated with potential future actions by the Authority:

Agricultural use(term established through the effect of §1.29(e) of the Act);

Aquifer use (term established through the effect of §§1.29(b) and (e) of the Act);

Downstream water right holder (term established through the effect of §1.29(c) and (d) of the Act); and

Permit retirement special fee (term established through the effect of §1.29(c) and (d) of the Act).

Definitions for the following terms simply provide factually accurate elaboration of a short-form word for convenience: Annual operating revenue requirements; Cash needs approach; Costs of aquifer management; Fiscal year; Non-agricultural use; Permit retirement revenue requirement; and Unit cost basis.

Proposed §709.3 states that the purpose of subchapter B providing for registration fees is to establish registration fees consistent with § 1.29(g) of the Act.

Proposed §709.5 states the general manager shall assess a $10 fee to file any registration application with the Authority, to be paid at the time the registration is filed.

Proposed §709.7 provides enforcement provisions for failure to pay the registration fee or any other fee that is due and owing from the registrant to the Authority. The section states that the general manager may refuse to accept for filing, or otherwise process, a registration application, or may commence with any other action to enforce the subchapter as authorized by law.

Proposed §709.9 states that the purpose of subchapter C providing for permit application fees is to establish permit application fees consistent with §1.29(f) of the Act.

Proposed §709.11 states the general manager shall impose a $25 fee to file with the Authority an application for a regular, term, or an emergency groundwater withdrawal permit, a well construction permit, monitoring well permit, aquifer recharge and storage permit, and recharge recovery permits. The section further states the fee must be paid at the time the application is filed.

Proposed §709.13 provides enforcement provisions for failure to pay the permit application fee or any other fee that is due and owing from the applicant to the Authority. The section allows the general manager to refuse to accept for filing, or otherwise process, a permit application.

Proposed §709.15 states the purpose of subchapter D providing for aquifer management fees is to establish the formula and procedures for the calculation, assessment, billing and collection of aquifer management fees consistent with §§1.11(f) and 1.29(b) and (e) of the Act.

Proposed §709.17 provides for the applicability of aquifer management fees and states that aquifer management fees shall be assessed by the Authority for all aquifer use except for withdrawals of groundwater from the aquifer made from an exempt well pursuant to §§1.16(c) and 1.33 of the Act.

Proposed §709.19 provides detailed procedures for the adoption and assessment of an aquifer management fee for the succeeding year, which is based on aquifer use. This section provides that the aquifer management fee shall be based on two user blocks: non-agricultural users and agricultural users, and is to be uniform such that the average unit cost of groundwater, regardless of quantity withdrawn, remains constant and is applicable to all the aquifer users within the same user block. The unit cost for the aquifer management fees shall be expressed in dollars per acre-foot per annum.

Proposed §709.21 provides procedures for the billing and collection of aquifer management fees for all persons authorized for aquifer use under interim authorization status pursuant to §1.17 of the Act and the rules of the Authority, or under a final groundwater withdrawal permit issued by the Board. This section further provides that the general manager shall bill to and collect from all aquifer users an aquifer management fee for the fiscal year as calculated and assessed by the general manager pursuant to this subchapter, unless subject to a user contract under §709.25 of the Act.

Proposed §709.23 states the Authority may not collect a total amount of aquifer management fees that is more than is reasonably necessary for the annual operating revenue requirements for the administration of the Authority, as reflected in the adopted annual fiscal year budget.

Proposed §709.25 provides for user contracts and states that no later than September 30th of the year preceding the calendar year for which a user contract will be effective, the general manager may contract with any non-agricultural user for the user to commit to aquifer use less than an amount to which the user would otherwise be authorized. This section further states that the Authority shall assess aquifer management fees for the reduced amount of contracted aquifer use.

Proposed §709.27 states the aquifer management fee calculated and assessed by the general manager shall be effective on a calendar year basis beginning January 1st through December 31st.

Proposed §709.29 states the Authority may not expend aquifer management fee revenues for purchasing or operating water supply facilities.

Proposed §709.31 provides for the waiver of fees by the Authority and states if the Authority is a creditor of a person required to pay aquifer management fees pursuant to §709.17 (Applicability) and §709.21(a) (Billing and Collection), the general manager may enter into a contract that authorizes a credit against the payment of the fees that may be owed by the person as an offset to all or part of the amount owed to the person by the Authority.

Proposed §709.33 provides for enforcement for nonpayment of delinquent aquifer management fees by the general manager who may suspend the processing of any application pending before the Authority or commence any action to enforce payment and collection as may be authorized by law.

Proposed §709.35 relates to prohibitions and states no person may withdraw groundwater from the aquifer if the person, or his predecessor in interest, is delinquent in the payment of an aquifer management fee that is due and payable to the Authority.

Section 2001.0225 of the Texas Government Code requires an agency to perform, under certain circumstances, a regulatory analysis of "major environmental rules." The Authority has determined that none of the proposed rules are "major environmental rules" as that term is defined by §2001.0225(g)(3) of the Texas Government Code. The basis for this determination is that the proposed rules do not have the specific intent to "protect the environment" or "reduce risks to human health from environmental exposure." The specific intent of these rules is to provide an outline of procedures for implementing and collecting fees by the Authority, resulting in the development of a uniform fee system that generates revenue for the Authority. This revenue is used by the Authority to regulate the use of the aquifer. For this reason, the Authority finds that none of the proposed rules are "major environmental rules" and that, therefore, no further analysis is required by §2001.0225 of the Texas Government Code.

Chapter 2007 of the Texas Government Code, also known as the "Texas Private Real Property Rights Preservation Act," requires governmental entities, under certain circumstances, to prepare a takings impact assessment ("TIA") in connection with certain covered categories of proposed governmental actions. Based on the following reasons, the Authority has determined that it need not prepare a TIA in connection with the proposal of these rules. First, the Authority has made a "categorical determination" that rules establishing procedures for implementing and collecting fees do not affect private real property. The proposed rules set forth the various types of fees imposed by the Authority and provide procedures for the adoption and assessment, as well as the billing and collection, of those fees. They have no direct affect on private real property and may not result in a taking. Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(4) of the Texas Government Code. See Act §1.11(a); TEXAS GOVERNMENT CODE ANNOTATED §2001.004(1). It was held in Edwards Aquifer Authority v. Bragg, S.W.3d., No. 04-99-00059-CV, 2000 WL 35582 (Tex. App. San Antonio 2000, no history), that the Edwards Aquifer Act expressly mandates the adoption of substantive and procedural permitting rules and that such actions are therefore excepted from the Texas Private Real Property Rights Preservation Act. Third, it is the position of the Authority that all valid actions of the Authority are excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(11)(C) of the Texas Government Code as actions of a political subdivision taken under its statutory authority to prevent waste or protect the rights of owners of interest in groundwater. Accordingly, a TIA need not be prepared in connection with the proposal of these rules.

Texas Government Code, §2001.024(a)(4) requires that a fiscal note be prepared which discusses, for each year of the first five years that the proposed rules, if adopted, would be in effect: (1) the additional estimated costs to state and local governments expected as a result of enforcing or administering the rules; (2) the estimated reductions in costs to state and local governments expected as a result of enforcing or administering the rules; (3) the estimated loss or increase in revenues to state or local governments expected as a result of enforcing or administering the rules; and (4) if applicable, that enforcing or administering the proposed rules would have no foreseeable implications relating to costs or revenues of state or local governments.

Gregory M. Ellis, General Manager of the Authority, is responsible for preparing or approving this fiscal note that was prepared in connection with these proposed rules.

A Programmatic Assessment of the Authority's proposed rules, which addresses the combined effects of Chapters 707 (relating to Procedure before the Authority), 709 (relating to Fees), and 711 (relating to Groundwater Withdrawal Permits) has been prepared on behalf of the Authority. The information presented below pertains particularly to the proposed Chapter 709 rules and, by itself, satisfies the requirements of §2001.024(a)(4) of the Texas Government Code. Some of the information presented below is derived from the Programmatic Assessment. Persons interested in viewing the Programmatic Assessment prepared on behalf of the Authority may arrange to do so by contacting the Authority at the telephone number shown below.

In general, as will be discussed in detail below, proposed Chapter 709, both by itself and in conjunction with proposed Chapters 707 (relating to Procedure Before the Authority) and 711 (relating to Groundwater Withdrawal Permits) which are considered for adoption concurrent with this proposed chapter, will have fiscal impacts on local governments, as well as on the Authority.

These proposed rules will directly affect the budgets of local governments within the Authority's boundaries and other jurisdictions that rely on the Edwards Aquifer for water supplies. Local governments close to, but outside, the Authority's boundaries may experience secondary effects from changes in economic activity within the boundaries caused by these proposed rules. Such secondary effects are unlikely to be material to those political subdivisions. The total affected region consists of those counties wholly or partially lying within the Edwards Aquifer Authority's boundaries. The fiscal effects of these proposed rules fall primarily into two categories: (1) increased water supply costs for local governments; and (2) changes in tax revenues resulting from decreased irrigated farming.

The Authority anticipates, on the other hand, that the proposed rules will not have material fiscal impacts upon state government. The most notable impact may be oversight costs incurred by the state. The Act creates an Edwards Aquifer Legislative Oversight Committee which oversees and reviews the Authority's actions. In addition, the Texas Natural Resource Conservation Commission is likewise charged with certain responsibilities to monitor the Authority's activities. The proposed rules may lead to additional oversight expenses incurred by either of these two entities.

A detailed discussion of the fiscal impacts of these proposed rules on state and local governments is included below.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter A will be in effect, there will be no estimated (1) additional costs to state or local governments, (2) reductions in costs to state or local governments, or (3) loss or increase in revenues to state or local governments expected as a result of enforcing or administering the proposed rules in subchapter A. In addition, enforcing or administering the proposed rules in subchapter A does not have foreseeable implications relating to cost or revenues of state or local governments. The basis for this determination is that the adoption of the proposed rules would impose no regulatory requirement or compliance obligations on actions of state or local government that might result in an impact on costs or revenues. The definitions, standing alone, do not impose regulatory requirements. Instead, the definitions are applied through other rules within the chapter. Because the definitions, standing alone, do not impose regulatory requirements but, instead, the definitions are applied through other rules within the chapter which impose regulatory requirements, there are no direct costs expected as a result of adoption of this subchapter for state or local governments. The direct cost would be expected to derive from the substantive rule in which the definition may have been incorporated and will be considered at the appropriate subchapter below in this fiscal note.

Proposed §709.3 merely states the purpose of the proposed subchapter B rules. This section imposes no specific regulatory requirement or compliance obligation that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will be no estimated additional costs to state or local governments.

Proposed §709.5 imposes a $10 registration fee for registration of exempt wells and meters. The registration fee is applicable per well or meter. Most, if not all, persons claiming exempt well status or registering a pre-existing meter that the Authority is aware of would do so for only one such well or meter. Thus the $10 fee would be multiplied only by one time. The Authority is not aware of any state or local government that claims exempt well status. The Authority is not aware of any state agency that owns a well that has an existing meter that would be required to be registered. Nor is it likely that in the next five years a state agency will own wells that may have exempt well status or have existing meters. Moreover, it is not likely that in the next five years a local government own a well for which they may claim exempt well status. Some local governments, however, may own wells that have an existing meter that would be required to be registered. Even if a state or local government sought exempt well status or registered an existing meter, the $10 registration fee (even if multiplied by the few individual wells or meters to which the fee may apply) is so immaterial to the overall costs associated with the ownership and operation of the well or meter that any increase in cost would be essentially negligible. In addition, the administrative steps that would be required by a state or local government to pay the $10 registration fee are very minimal one-time staff actions that would be easily absorbed by the current staffing levels of any state or local government. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no materially significant estimated additional costs to state or local governments.

Proposed §709.7 authorizes the Authority to bring enforcement actions for the failure to pay a registration fee that is due and owing. Enforcement would be brought by the Authority only for the volitional conduct of a state or local government that results in non-compliance. As noted above, the administrative steps required to comply with this subchapter are minimal. Additionally, the Authority is not aware of any state or local government that claims exempt well status or owns a well that has an existing meter that would be required to be registered. Nor is it likely that in the next five years a state agency will own wells that may have exempt well status or have existing meters. However, if a state or local government failed to comply with this registration fee, any additional costs would have resulted from their own conduct rather than the operation of this proposed rule. The costs which would be incurred by a state or local government that sought to defend itself against such an enforcement action would so far exceed the cost of compliance that it is difficult to imagine a credible scenario when this might occur. However, if a state or local government did seek to defend itself from having to pay the $10 registration fee, the defense cost could range from many hundreds of dollars to several thousands of dollars depending on the vigor of the defensive efforts, as improbable as this might be. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no estimated additional costs to state or local governments.

Mr. Ellis has determined that for each year of the first five years that the proposed section rules in subchapter B will be in effect, there will be no estimated reductions in costs to state or local governments expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter B have the effect of eliminating or minimizing a regulatory requirement or compliance obligation applicable to state or local governments.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter B will be in effect, there will be no estimated increase in revenues to state and local governments expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter B contain any mechanism for the raising of revenues by state or local governments. In addition, there are no secondary effects due to the operation of any of the proposed rules in subchapter B that affect any known current revenue streams of state or local government be they by taxation, assessments, fees, or otherwise.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter B will be in effect, there will be no estimated loss in revenues to state or local government expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter B contain any mechanism for the diversion of or reduction in current revenue sources of state or local government. In addition, there are no secondary effects due to the operation of any of the proposed rules in subchapter B that affect any known current revenue streams of state or local governments be they by taxation, assessments, fees, or otherwise.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter B will be in effect, that enforcing or administering these proposed rules does not have foreseeable implications relating to cost or revenues of state or local governments.

Proposed §709.9 merely states the purpose of the proposed subchapter C rules. This section imposes no specific regulatory requirement or compliance obligation that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will be no estimated additional costs to state or local governments.

Proposed §709.11 imposes a $25 permit application fee for certain applications. The application fee is applicable per application filed with the Authority. Some state or local governments may in the next five years, file an application to which subchapter C applies. Thus, the $25 fee would be multiplied by the number of applications a state or local government may file. The Authority is not aware of any state government that has or intends to file with the Authority an application for a groundwater withdrawal permit within the next five years. Relative to groundwater withdrawal permits, any local government that is an applicant for an initial regular permit will have already filed the application and will have already paid the $25 application fee. Thus, this proposed section would not apply to applications that would have already been filed. As for term or emergency permits, local governments are not likely to apply for such permits because they are generally unsuitable (except for possible aquifer storage and recovery projects to which term permits may be appropriate) to satisfy the municipal demand requirement these governments would have. Some state or local governments may apply for well construction permits in the next five years. However, for any state or local government that is constructing wells, the Authority would expect the number of applications for well construction by a state or local government to range from zero to ten. Some state or local governments may apply for monitoring well permits in the next five years. However, for any state or local government that seeks a monitoring well permit, the Authority would expect the number of applications for monitoring wells by a state or local government to range from zero to thirty. Relative to aquifer recharge or storage permits, or recharge recovery permits, the Authority does not expect any state agencies to file such applications in the next five years. Although, none are pending, there may be local governments that file applications for aquifer recharge and storage permits, or recharge recovery permits within the next five years. The number of applications per local government interested in such projects is estimated to be from one to two. If a state or local government files the above-mentioned applications for groundwater withdrawal permits, well construction, monitoring well, aquifer recharge and storage, or recharge recovery permits, the number of applications for typical state or local government is expected to range from zero to forty. Therefore, the $25 permit application fee (even if multiplied by the few individual permit applications any particular government may file) is so immaterial to the overall costs associated with cost of the preparing and obtaining the application, and implementing the permit, that any increase in cost would be essentially negligible. In addition, the administrative steps that would be required by a state or local government to pay the $25 permit application fee are very minimal one-time staff actions that would be easily absorbed by the current staffing levels of any state or local government. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no materially significant estimated additional costs to state or local governments.

Proposed §709.13 authorizes the Authority to bring enforcement actions for the failure to pay permit application fees by refusing to process the application. The Authority's refusal to process the application would be only for the volitional conduct of a state or local government that fails to pay the fee. As noted above, the administrative steps required to comply with this subchapter are minimal. If a state or local government failed to comply with this application fee requirement, any additional costs due to the delays associated with the refusal to process the application would have resulted from the government's own conduct rather than the operation of this proposed rule. The costs which would be incurred by a state or local government that sought to defend itself against such refusal to process would so far exceed the cost of compliance that it is difficult to imagine a credible scenario when this might occur. However, if a state or local government did seek to defend itself from having to pay the $25 permit application fee, the defense cost could range from many hundreds of dollars to several thousands of dollars depending on the vigor of the defensive efforts, as improbable as this might be. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no estimated additional costs to state or local governments.

Mr. Ellis has determined that for each year of the first five years that the proposed section rules in subchapter C will be in effect, there will be no estimated reductions in costs to state or local governments expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter C have the effect of eliminating or minimizing a regulatory requirement or compliance obligation applicable to state or local governments.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter C will be in effect, there will be no estimated increase in revenues to state and local governments expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter C contain any mechanism for the raising of revenues by state or local governments. In addition, there are no secondary effects due to the operation of any of the proposed rules in subchapter C that affect any known current revenue streams of state or local government be they by taxation, assessments, fees, or otherwise.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter C will be in effect, there will be no estimated loss in revenues to state or local government expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter C contain any mechanism for the diversion of or reduction in current revenue sources of state or local government. In addition, there are no secondary effects due to the operation of any of the proposed rules in subchapter C that affect any known current revenue streams of state or local governments be they by taxation, assessments, fees, or otherwise.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter C will be in effect, that enforcing or administering these proposed rules does not have foreseeable implications relating to cost or revenues of state or local governments.

Proposed §709.15 merely states the purpose of the proposed subchapter D rules. This section imposes no specific regulatory requirement or compliance obligation that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will be no estimated additional costs to state or local governments.

Proposed §709.17 by creating an exemption from the duty to pay aquifer management fees cannot impose an additional cost. However, as discussed above, no state or local government currently claims exempt well status, nor are any likely to do so in the next five years. Accordingly, no state or local government will likely be able to take advantage of this exemption. However, if they do claim exempt well status, they then will be able to claim the exemption and will not have additional costs associated with the operation of this aspect of proposed §709.17. Therefore, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed §709.17 will be in effect, there will be no estimated additional costs to state or local governments.

Proposed §709.17 also provides that aquifer management fees must be assessed for all aquifer use. The only entities that are eligible to make use of the aquifer are those entities with interim authorization status, or who hold a groundwater withdrawal permit. No state agency currently claims interim authorization status, or is likely to do so in the next five years. Moreover, no state agency is an applicant for an initial regular permit, or likely to become such an applicant in the next five years. State governments may utilize non-Edwards Aquifer water resources, or receive water service based on being a customer of a water utility that does not withdraw groundwater from the Edwards Aquifer. Under this circumstance, proposed §709.17 would have no fiscal impact on the state agency. Therefore, based on the above, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed §709.17 will be in effect, there will be no estimated additional costs to state government fitting into these factual scenarios.

If a state agency did make withdrawals from the aquifer based on obtaining a groundwater withdrawal permit or interim authorization status due to a transfer of an application for an initial regular permit, then the additional costs to the state agency are not expected to be any different than those for local government users of the aquifer as will be discussed below. Moreover, there is the potential for secondary additional costs to state government based on being a customer of a water utility that withdraws groundwater from the Edwards Aquifer to supply its customers. Such utilities will likely pass through the aquifer management fee costs to its customer base as increases in water service rates. The additional costs to the state agency under this circumstance are not expected to be any different than those for local government users of the aquifer as will be discussed below.

Local governments may utilize non-Edwards Aquifer water resources, or receive water service based on being a customer of a water utility that does not withdraw groundwater from the Edwards Aquifer. Under this circumstance, proposed § 709.17 would have no fiscal impact on the local government. Therefore, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed §709.17 rule will be in effect, there will be no estimated additional costs to local government fitting into these factual scenarios.

There are many local governments that make withdrawals from the aquifer currently based on either interim authorization status, and once permits are issued, based on a groundwater withdrawal permit (and more specifically an initial regular permit). There is the potential for secondary additional costs to those local governments who are wholesale customers of a water utility that withdraws groundwater from the Edwards Aquifer to supply its customers. Such utilities will likely pass through the aquifer management fee costs to its customer base as increases in water service rates. The fiscal effects of this aspect of proposed §709.17 may result in increased water supply costs for local governments.

The proposed rules in subchapter D in general, establish the procedures to levy and collect aquifer management fees. Proposed Chapters 707 (relating to Procedure Before the Authority) and 711 (relating to Groundwater Withdrawal Permits) determine a large part of the revenue requirements for which these fees will satisfy the implementation of the Authority's permit program. The revenue requirements for aquifer management fees will depend on the administrative and program budgets adopted by the Authority, and by the market price of voluntary withdrawal reductions based on the abandonment of permit applications and paid for by aquifer management fees.

The estimated aquifer management fees contained in this fiscal note are based on detailed assumptions and a mathematical model. The assumptions include: Estimates of the Authority's operating budget for each of the next five years. The division of withdrawal rights between irrigators (i.e. agricultural users) and other nonagricultural aquifer users. The costs of the contested case hearings process described in the discussion of the fiscal note for proposed Chapter 707. Estimates of the amounts needed to abandon initial regular permit applications for withdrawal reductions in voluntary transactions so that the Authority only issues initial regular permits for 450,000 acre-feet.

Table 709-C shows the results of the model runs. Assuming an average cost of $700 per acre-foot to achieve such withdrawal reductions, the aquifer management fee that would be assessed under proposed §709.17, and developed pursuant to the procedures in proposed §§709.19 and 709.21 will cost each local government about $29 to $38 per year per acre-foot of permitted withdrawals. The cost will likely be at the lower end of the cost range in the early years of the five-year period, rise to the high end of the range by the middle of the five-year period, and fall to the middle of the range thereafter. The first-year estimate assumes that virtually no permits have been issued and that the budget requirement is divided among a relatively large number of existing users with interim authorization status under the rules to be proposed in subchapter D of Chapter 711 (relating to Interim Authorization) and the proposed rules for subchapter G of Chapter 711 (relating to Groundwater Withdrawal Permits). The sharp increase in the second year assumes interim authorizations in excess of initial regular permit amounts and full compensation costs, but minimal water marketing. The final year reflects all necessary water marketing, 450,000 acre-feet of initial regular permits, and a larger share of initial regular permits held by the nonirrigation sector. Assuming that an acre-foot of water supplies 2.4 households for a year, the additional revenue per household collected by a local government to pay the aquifer management fees is also shown. Local governments of any given size may estimate the impacts of the aquifer management fee rules using the appropriate multiplication.

Figure: 31 TAC, Part 20, Chapter 709, Preamble-1

Proposed §§709.19, 709.21, and 709.27 are basically procedural rules that regulate the internal processes of the Authority in how it calculates, assesses and collects an aquifer management fee. For these purely procedural features of these proposed sections, no specific regulatory requirements or compliance obligations are created that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that the procedural aspects of these rules will be in effect, there will be no estimated additional costs to state or local governments.

Proposed §709.19 also contains a provision that limits the aquifer management fees assessed against agricultural users to not to exceed 20 percent of that assessed against non-agricultural users. This 20 percent limitation has the effect of adding significant additional costs to what local governments would pay if all aquifer users were assessed on an equal unit basis. Therefore, Mr. Ellis has determined that for each year of the first five years that the 20 percent limitation this rule will be in effect, there will be estimated additional costs to local governments.

Proposed §§709.23 and 709.29 place limitations on the amount of the aquifer management fees the Authority may collect. These sections need to be read in conjunction with proposed §§709.19 and 709.21 to establish the amount of the annual budget that the Authority may adopt each fiscal year at its discretion providing the starting point for the calculation and assessment of the aquifer management fee pursuant to §§709.19 and 709.21. It is this calculated aquifer management fee that is assessed pursuant to proposed §709.17. Based on the above discussion, Mr. Ellis has determined that for each year of the first five years that proposed §§ 709.17, 709.19, 709.21 and 709.23 will be in effect, there will be estimated additional costs to state or local governments as indicated above.

Proposed §§709.25 and 709.31 provide for certain of aquifer management fee reduction contracts and fee waiver agreements that may be entered into. Such contracts could only occur based on the voluntary conduct of the state or local government who may have aquifer management fees due and owning. While state or local governments may chose to reduce or waive all of the duty to pay an aquifer management fee and may incur transaction costs, these costs would have been voluntarily incurred. Therefore, Mr. Ellis has determined that for each year of the first five years that these proposed rules will be in effect, there will be no estimated additional costs to state or local governments.

Proposed §709.33 authorizes the Authority to bring enforcement actions for the failure to pay an aquifer management fee that is due and owing. Enforcement would be brought by the Authority only for the volitional conduct of a state or local government that results in non-compliance by failure to pay an aquifer management fee. Proposed §709.35 prohibits withdrawals by persons who are delinquent in the payment of aquifer management fees. Section 709.35 works in concert with §709.33 as an enforcement tool. Additionally, the Authority is not aware of any state government that currently pays aquifer management fees under interim authorization, or is likely to pay aquifer management fees in the next five years by virtue of holding a groundwater withdrawal permit. On the other hand, many local governments currently pay aquifer management fees under interim authorization, and will pay aquifer management fees in the next five years by virtue of holding a groundwater withdrawal permit. However, if a state or local government failed to pay its aquifer management fees any additional costs to defend itself, other enforcement costs, delay costs resulting from the Authority's refusal to process a pending application, or the inability to make withdrawals would have resulted from their own conduct rather than the operation of this proposed rule. However, if a state or local government did seek to defend itself from having to pay aquifer management fees, the defense costs could range from many hundreds of dollars to many tens of thousands of dollars depending on the vigor of the defensive efforts. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no estimated additional costs to state or local governments.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter D will be in effect, there will be no estimated reductions in costs to state or local governments expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter D have the effect of eliminating or minimizing a regulatory requirement or compliance obligation applicable to state or local governments.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter D will be in effect, there will be no estimated increase in revenues to state and local governments expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter D contain any mechanism for the raising of revenues by state or local governments. In addition, there are no secondary effects to state government due to the operation of any of the proposed rules in subchapter D that affect any known current revenue streams of state government be they by taxation, assessments, fees, or otherwise. However, with respect to local government, a secondary effect of the operation of the proposed rules will be to provide a rational basis for the increase of retail or wholesale water rates by local governments in order to recover the costs of assessment of the aquifer management fees by the Authority. These secondary effects on revenues are estimated to result in no net increase in the revenues of local governments for each year of the first five years that the proposed rules are in effect.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter D will be in effect, there will be no estimated loss in revenues to state or local government expected as a result of enforcing or administering these proposed rules. The basis for this determination is that none of the proposed sections in subchapter D contain any mechanism for the diversion of or reduction in current revenue sources of state or local government. In addition, there are no secondary effects due to the operation of any of the proposed rules in subchapter C that affect any known current revenue streams of state or local governments be they by taxation, assessments, fees, or otherwise.

As discussed above in this subchapter, Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter D will be in effect, that enforcing or administering these proposed rules may have foreseeable implications relating to cost or revenues of state or local governments.

Section 2001.024(a)(5) of the Texas Government Code requires the Authority to prepare a "public benefit and cost note" assessing the (1) public benefits expected as a result of adoption of the proposed rules, (2) and the probable economic costs to persons required to comply with a rule for each year of the first five years that the rules will be in effect.

Gregory M. Ellis, General Manager of the Authority, is responsible for preparing or approving this public benefit and cost note that was prepared in connection with these proposed rules. Mr. Ellis has approved the following determinations for the first five years that the proposed rules will be in effect.

A Programmatic Assessment of the Authority's proposed rules, which addresses the combined effects of Chapters 707 (relating to Procedure before the Authority), 709 (relating to Fees), and 711 (relating to Groundwater Withdrawal Permits) has been prepared on behalf of the Authority. The information presented below pertains particularly to the proposed Chapter 709 rules and, by itself, satisfies the requirements of §2001.024(a)(5) of the Texas Government Code. Some of the information presented below is derived from the Programmatic Assessment. Persons interested in viewing the Programmatic Assessment prepared on behalf of the Authority may arrange to do so by contacting the Authority at the telephone number shown below.

Generally, a person is required to comply with these proposed rules if he or she (1) owns an pre-existing exempt well or non-irrigation water meter; (2) files and application for a regular, term, or an emergency groundwater withdrawal permit, well construction permit, monitoring well permit, aquifer recharge and storage permit, or recharge recovery permit; (3) for an agricultural user, withdraws groundwater from the Edwards Aquifer pursuant to interim authorization status, or a groundwater withdrawal permit; or (4) for a non-agricultural user, is authorized to withdraw groundwater from the Edwards Aquifer pursuant to interim authorization status, or a groundwater withdrawal permit, irrespective of whether the person actually withdraws groundwater from the aquifer.

In general, as will be discussed in more detail below, Chapter 709, both by itself and in conjunction with proposed Chapters 707 and 711 which are considered for adoption concurrent with this proposed chapter, will have public benefits and economic costs to the regulated community. The benefits and costs of proposed Chapter 709 by itself are presented here. Proposed Chapters 707 and 711 create effects that would not be possible without Chapter 709 and to that extent they are also effects of Chapter 709. The proposed rules for Chapter 707 (relating to Procedure Before the Authority) and Chapter 711 (relating to Groundwater Withdrawal Permits) create demands for funds that are satisfied by these rules. The public benefit and cost notes for those chapters are prepared as part of the concurrent proposal of those chapters.

Most of the public benefits and costs from the proposed rules for Chapters 707, 711, and 709 are the result of Chapter 711. Minor effects result from the proposed rules for Chapter 707, which specifies the Authority's administrative procedures for its permitting program. More significant effects result from the proposed rules for Chapter 709, which specify the procedures for establishing the Authority's fees. These effects are identified in separate assessments of the proposed rules for Chapters 707 and 711.

Chapter 709 contains proposed rules establishing fees to be charged by the Authority. Registration and application fees (subchapters B and C) are extremely small (typically $10 to $25 per instrument filed) and do not have significant effects. The principal effects of the proposed rules for Chapter 709 arise from Subchapter D, which establishes aquifer-management fees that will be the principal source of revenue supporting the Authority's aquifer-management programs. The revenue requirements to be satisfied by these fees are determined by the proposed rules for Chapters 707 and 711. Revenue requirements will depend on the budgets adopted by the Authority's Board and by the costs to compensate for voluntary withdrawal reductions.

Management of the Edwards Aquifer will require ongoing actions by the Authority, with a consequent cost in financial resources for staffing, operations, support services, and implementation of specific provisions required by the Act. The Authority's fees assessment, billing, collecting, and expenditures will provide the following public benefits: 1. The raising of funds in an equitable manner for the Authority to implement its aquifer management and regulatory programs; 2. The equitable and efficient balancing of the needs and interests of existing users and affected stakeholders in the region; 3. The accomplishment of the transition away from near-total reliance on the aquifer as a water supply in a way that minimizes economic and social disruption; 4. The facilitation of the development of a regional water market to efficiently allocate water from the aquifer to its highest and best use; 5. Ensuring effective local management of the aquifer.

The public costs of the proposed rules for Chapter 709 are principally economic costs to persons required to comply with these proposed rules. Applicants for an initial regular permit have already paid an application fee and are also currently paying aquifer management fees. Aquifer management fees levied on permit holders are expected to increase. Currently, non-irrigation fees are charged based on interim authorizations. The proposed rules will charge aquifer management fees based on the groundwater withdrawal amount authorized in an initial regular permit, a quantity smaller than the interim authorization amount. When the total quantity of acre-feet being charged fees decreases, the charge per acre-foot authorization unit of withdrawal will increase.

The Authority's budget will increase because of costs for contested cases and to pay compensation to reduce withdrawals in accordance with the proposed rules for Subchapter G of Chapter 711, and the procedural rules in proposed Chapter 707.

The estimates summarized below represent those primary costs to persons required to comply with these rules: 1. For non-irrigators, annual aquifer management fees are projected to increase from the current $18.50 per acre-foot of authorized withdrawals to between $28.90 and $33.32 per year for each acre-foot permitted; 2. For agricultural users (i.e. irrigators), the proposed § 709.19 specifies aquifer management fees will be 20% of the rate for non-agricultural users (i.e. non-irrigators). Under the same assumptions used above, the agricultural fee would increase from $3.40 to between $5.20 and $6.00. These costs are the unavoidable consequences of implementing the Act.

There is a complex relationship between the aquifer management fees that will be charged to permit holders to pay for the withdrawal reductions (i.e. abandonment of all or part of an application for an initial regular permit) and the compensation those accepting reductions will receive. The relationship reflects several factors: All applicants with interim authorization status and holders of initial regular permits will be charged aquifer management fees. Only those applicants who chose to be compensated will receive compensation. Compensation for those who partially or totally agree to withdrawal reduction by abandoning all or part of an application for an initial regular permit will probably be financed with revenue bonds or through structured settlements to be paid out over a period of up to 30 years. Agricultural users (i.e. irrigators) will pay lower fees than other non-agricultural users. This will encourage municipal and industrial users who acquire rights for future growth requirements to lease those rights to irrigators. Thus, municipal and industrial users will benefit both by avoiding aquifer management fees and by receiving lease payments. Irrigators with the highest marginal productivity of water will be able to afford the lease payments and will benefit from the additional farm income.

The public benefits and costs of these proposed rules are considered from the standpoint of the potentially affected parties who fall into three broad categories. This note will consider the effects of the rules on each of the following groups: Irrigators; and Municipal and industrial users.

The public benefits and costs for the proposed rules in chapter 709 are discussed in greater detail below.

Mr. Ellis has determined that for each year of the first five years that the proposed rules in subchapter A will be in effect, the expected public benefits of the definitions are as follows: 1. Definitions are provided for terms used in the Act that are not defined, but for which definitions would be useful; 2. The use of definitions promotes consistency among the various substantive sections in the rules of the Authority in which they may be employed; 3. The use of definitions allows for "short-hand" to reduce the amount of cumbersome regulatory language necessary in other Authority rules; and 4. The definitions add clarity and fill in necessary gaps in the Act in order to properly implement the Act.

The Authority anticipates there will be no probable economic costs to persons required to comply with the proposed rules in subchapter A. The basis for this determination is that the adoption of the proposed rule would impose no regulatory requirement or compliance obligations on actions of persons required to comply with proposed subchapter A. The definitions, standing alone, do not impose regulatory requirements. Instead, the definitions are applied through other rules within the chapter. Because the definitions, standing alone, do not impose regulatory requirements but, instead, the definitions are applied through other rules within the chapter which impose regulatory requirements, there are no direct costs expected as a result of adoption of this subchapter. Any direct costs would be expected to derive from the substantive rule in which the definition may have been incorporated and will be considered at the appropriate subchapter below in this public benefit and note. Therefore, Mr. Ellis has determined that for each year of the first five years that this proposed rule will be in effect, there will be no estimated economic costs to persons required to comply with this proposed rule.

Mr. Ellis has determined that for each year of the first five years that proposed §709.3 will be in effect, the expected public benefits are that the public will have notice of the section of the Act that subchapter B implements.

Mr. Ellis has determined that for each year of the first five years that proposed §709.5 will be in effect, the expected public benefits are: (1) that the Authority will receive revenue from the user group that is most affected by the Authority's well registration program to offset a part, albeit by a very small amount, of the costs of its well registration program; and (2) the amount is small enough so as not to discourage persons from registering their exempt wells thereby improving the data base of the Authority for these wells.

Mr. Ellis has determined that for each year of the first five years that proposed §709.7 will be in effect, the expected public benefit is that compliance with the registration fee program of the Authority is encouraged.

Proposed §709.3 merely states the purpose of the proposed subchapter B rules. This section imposes no specific regulatory requirement or compliance obligation that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will be no probable economic costs to person required to comply with these rules.

Proposed §709.5 imposes a $10 registration fee for registration of exempt wells and meters. The registration fee is applicable per well or meter. Most, if not all, persons claiming exempt well status or registering a pre-existing meter that the Authority is aware of would do so for only one such well or meter. Thus the $10 fee would be multiplied only by one time. There are many persons who claim exempt well status or that own a well that has an existing meter that would be required to be registered. However, the $10 registration fee (even if multiplied by the few individual wells or meters to which the fee may apply) is so immaterial to the overall costs associated with the ownership and operation of the well or meter that any increase in cost would be essentially negligible. In addition, the administrative steps that would be required by a person to pay the $10 registration fee are very minimal one-time actions that would be easily absorbed by the persons owning such wells or meters. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there are materially insignificant probable economic costs to persons required to comply with these rules.

Proposed §709.7 authorizes the Authority to bring enforcement actions for the failure to pay a registration fee that is due and owing. Enforcement would be brought by the Authority only for the volitional conduct of a person that results in non-compliance. As noted above, the administrative steps required to comply with this subchapter are minimal. However, if a person failed to comply with this registration fee, any additional costs would have resulted from their own conduct rather than the operation of this proposed rule. The costs which would be incurred by a person that sought to defend itself against such an enforcement action would so far exceed the cost of compliance that it is difficult to imagine a credible scenario when this might occur. However, if a person did seek to defend itself from having to pay the $10 registration fee, the defense cost could range from many hundreds of dollars to several thousands of dollars depending on the vigor of the defensive efforts, as improbable as this might be. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there are no probable economic costs to person required to comply with these rules.

Mr. Ellis has determined that for each year of the first five years that proposed §709.9 will be in effect, the expected public benefits are that the public will have notice of the section of the Act that subchapter C implements.

Mr. Ellis has determined that for each year of the first five years that proposed §709.11 will be in effect, the expected public benefits are: (1) that the Authority will receive revenue from the user group that is most affected by the Authority's permit application program to offset a part, albeit by a very small amount, of the costs of this program; and (2) the amount is small enough so as not to discourage persons from filing permit applications thereby improving the data base of the Authority.

Mr. Ellis has determined that for each year of the first five years that proposed §709.13 will be in effect, the expected public benefit is that compliance with the application fee program of the Authority is encouraged.

Proposed §709.9 merely states the purpose of the proposed subchapter C rules. This section imposes no specific regulatory requirement or compliance obligation that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will be no probable economic costs to person required to comply with these rules.

Proposed §709.11 imposes a $25 permit application fee for certain applications. The application fee is applicable per application filed with the Authority. Many persons in the next five years may file applications to which subchapter C applies. Thus, the $25 fee would be multiplied by the number of applications a person may file. Persons may file an application for a groundwater withdrawal permit within the next five years. Relative to groundwater withdrawal permits, any person that is an applicant for an initial regular permit will have already filed the application and will have already paid the $25 application fee. Thus, this proposed section would not apply to applications that would have already been filed. As for term or emergency permits, persons are not likely to apply for such permits because they are generally unsuitable (except for possible aquifer storage and recovery projects to which term permits may be appropriate) to satisfy the demand requirements these person may have. Some persons may apply for well construction permits in the next five years. However, for any person that is constructing wells, the Authority would expect the number of applications for well construction by a person to range from zero to two. Some persons may apply for monitoring well permits in the next five years. However, for any person that seeks a monitoring well permit, the Authority would expect the number of applications for monitoring wells by a person to range from zero to three. Relative to aquifer recharge or storage permits, or recharge recovery permits, there may be persons that file applications for aquifer recharge and storage permits, or recharge recovery permits within the next five years. The number of applications per person interested in such projects is estimated to be from one to two. If a person files the above-mentioned applications for groundwater withdrawal permits, well construction, monitoring well, aquifer recharge and storage, or recharge recovery permits, the number of applications for a typical person is expected to range from zero to forty. Therefore, the $25 permit application fee (even if multiplied by the few individual permit applications any particular person may file) is so immaterial to the overall costs associated with cost of the preparing and obtaining the application, and implementing the permit, that any increase in cost would be essentially negligible. In addition, the administrative steps that would be required by a person to pay the $25 permit application fee are very minimal one-time actions that would be easily absorbed by the person proposing the project. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no materially significant probable economic costs to persons required to comply with these rules.

Proposed §709.13 authorizes the Authority to bring enforcement actions for the failure to pay permit application fees by refusing to process the application. The Authority's refusal to process the application would be only for the volitional conduct of a person that fails to pay the fee. As noted above, the administrative steps required to comply with this subchapter are minimal. If a person failed to comply with this application fee requirement, any additional costs due to the delays associated with the refusal to process the application would have resulted from the person's own conduct rather than the operation of this proposed rule. The costs which would be incurred by a person that sought to defend itself against such refusal to process would so far exceed the cost of compliance that it is difficult to imagine a credible scenario when this might occur. However, if a person did seek to defend itself from having to pay the $25 permit application fee, the defense cost could range from many hundreds of dollars to several thousands of dollars depending on the vigor of the defensive efforts, as improbable as this might be. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no probable economic costs to person required to comply with these rules.

Mr. Ellis has determined that for each year of the first five years that proposed §709.15 will be in effect, the expected public benefits are that the public will have notice of the section of the Act that subchapter D implements.

Mr. Ellis has determined that for each year of the first five years that proposed §709.17 will be in effect, the expected public benefits are as follows: 1. the Authority will receive revenue from the user group that is most affected by the Authority's permit aquifer management program to offset of the costs of managing and regulatory the aquifer; 2. the public benefits identified in the public benefit and cost note for chapter 711 (relating to Groundwater Withdrawal Permits) may be fostered and achieved because the Authority will have revenue to implement the substantive provisions of chapter 711; and 3. the public benefits identified in the public benefit and cost note for chapter 707 (relating to Procedure before the Authority) may be fostered and achieved because the Authority will have revenue to implement the procedural provisions Chapter 707.

Mr. Ellis has determined that for each year of the first five years that proposed §709.19 will be in effect, the expected public benefits are as follows: 1. the public will have notice of the aquifer management fee adoption and assessment procedures that will be used by the Authority; 2. the board of directors of the Authority retains the discretion as elected officials to establish a budget to provide fees to implement the Authority's aquifer management and regulatory programs; and 3. the aquifer management fee is equitably established by providing for a differential fee between agricultural users and non-agricultural users by helping to keep irrigation affordable at a very small unit cost to municipal and industrial users, who for the most part have much less economic sensitivity to the price of water.

Mr. Ellis has determined that for each year of the first five years that proposed §709.21 will be in effect, the expected public benefits are as follows: 1. the public will have notice of the aquifer management fee billing and collecting procedures that will be used by the Authority; 2. installment payment of aquifer management fees is permitted; and 3. agricultural users are billed the aquifer management fee based on actual withdrawals.

Mr. Ellis has determined that for each year of the first five years that proposed §709.23 will be in effect, the expected public benefit is that aquifer management fees will be reasonable and used only for the Authority's aquifer management and regulatory programs.

Mr. Ellis has determined that for each year of the first five years that proposed §709.25 will be in effect, the expected public benefit is to (1) encourage conservation of the use of groundwater from the aquifer; (2) maintain or increase spring flows at Comal and San Marcos Springs; (3) maintain or increase downstream uses; (4) increase protection for federally listed threatened or endangered species; (5) maintain higher water levels in the aquifer; (6) reduce frequency of initial regular permits being interrupted; and (7) create incentive for more efficient water use and management.

Mr. Ellis has determined that for each year of the first five years that proposed §709.27 will be in effect, the expected public benefit is to coincide payment cycles with the calendar year to foster economic planning on an annual basis.

Mr. Ellis has determined that for each year of the first five years that proposed §709.29 will be in effect, the expected public benefit is to (1) recognize the traditional role of water utilities in owning, financing, constructing, operating, and maintaining water supply facilities, and (2) assess the costs of the project to the customers of the project sponsor that will primarily benefit from the construction of the project.

Mr. Ellis has determined that for each year of the first five years that proposed §709.31 will be in effect, the expected public benefit is to reduce administrative paperwork associated with claims offsets.

Mr. Ellis has determined that for each year of the first five years that proposed §§709.33 and 709.35 will be in effect, the expected public benefit is that compliance with the aquifer management fee program of the Authority will be encouraged.

Proposed §709.15 merely states the purpose of the proposed subchapter D rules. This section imposes no specific regulatory requirement or compliance obligation that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will be no probable economic costs to persons required to comply with these rules.

Proposed §709.17, by creating an exemption from the duty to pay aquifer management fees on exempt wells, cannot impose an additional cost on owners of such wells. Many persons currently claim exempt well status and others are likely to do so in the next five years. Therefore, persons whose wells qualify for exempt well status will be able to claim the exemption and will not have additional costs associated with the operation of this aspect of proposed §709.17. By exempting owners of exempt wells from the payment of aquifer management fees, the Authority estimates it would not reduce its revenues for the next five years because any fees not assessed against owners of exempt wells would be made up by assessing the fee against owners of non-exempt wells. This would result in the amount of the aquifer management fee that would be required to be paid by owners of non-exempt wells in the estimated range of $250,000 to $500,000 over the next five years. These amounts are estimated to represent between 2 and 4 percent of the potential budget of the Authority over the next five years. Therefore, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed § 709.17 will be in effect, there will be no probable economic costs to persons owning exempt wells required to comply with these rules. In addition, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed §709.17 will be in effect, there will be probable economic costs to persons owning non-exempt wells required to comply with these rules in the range of 2 to 4 percent below the aquifer management fees estimated below.

Proposed §709.17 also provides that aquifer management fees must be assessed for all aquifer use. The only entities that are eligible to make use of the aquifer are those entities with interim authorization status, or who hold a groundwater withdrawal permit. Many persons currently claim interim authorization status, or are likely to do so in the next five years. Moreover, no state agency is an applicant for an additional regular permit, or likely to become such an applicant in the next five years. Persons may utilize non-Edwards Aquifer water resources, or receive water service based on being a customer of a water utility that does not withdraw groundwater from the Edwards Aquifer. Under this circumstance, proposed §709.17 would have no fiscal impact on the persons. Therefore, based on the above, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed § 709.17 rule will be in effect, there will be no probable economic costs to persons required to comply with these rules.

Persons may utilize non-Edwards Aquifer water resources, or receive water service based on being a customer of a water utility that does not withdraw groundwater from the Edwards Aquifer. Under this circumstance, proposed § 709.17 would have no fiscal impact on the person. Therefore, Mr. Ellis has determined that for each year of the first five years that this aspect of proposed §709.17 rule will be in effect, there will be no probable economic costs to persons required to comply with these rules.

There are many persons that make withdrawals from the aquifer currently based on either interim authorization status, and once permits are issued, based on a groundwater withdrawal permit (and more specifically an initial regular permit). There is also the potential for secondary additional costs to those persons who are wholesale or retail customers of a water utility that withdraws groundwater from the Edwards Aquifer to supply its customers. Such utilities will likely pass through the aquifer management fee costs to its customer base as increases in water service rates. However, these persons who are wholesale or retail customers of a water utility would not be persons required to comply with these rules and, therefore, the Authority has not assessed the secondary impacts of these customers.

The proposed rules in subchapter D in general, establish the procedures to levy and collect aquifer management fees. Proposed Chapters 707 (relating to Procedure Before the Authority) and 711 (relating to Groundwater Withdrawal Permits) determine a large part of the revenue requirements for which these fees will satisfy the implementation of the Authority's permit program. The revenue requirements for aquifer management fees will depend on the administrative and program budgets adopted by the Authority, and by the market price of voluntary withdrawal reductions based on the abandonment of permit applications paid for by aquifer management fees.

The estimates summarized below represent those primary costs to persons required to comply with these rules: 1. For non-irrigators, annual aquifer management fees are projected to increase from the current $18.50 per acre-foot of authorized withdrawals to between $28.90 and $33.32 per year for each acre-foot permitted; 2. For agricultural users (i.e. irrigators), the proposed § 709.19 specifies that aquifer management fees will be 20% of the rate for non-agricultural users (i.e. non-irrigators). Under the same assumptions used above, the agricultural fee would increase from $3.40 to between $5.20 and $6.00.

These costs are the unavoidable consequences of implementing the Act.

There is a complex relationship between the aquifer management fees that will be charged to permit holders to pay for the withdrawal reductions (i.e. abandonment of all or part of an application for an initial regular permit) and the compensation those accepting reductions will receive. The relationship reflects several factors: All applicants with interim authorization status and holders of initial regular permits will be charged aquifer management fees. Only those applicants who chose to be compensated will receive compensation. Compensation for those who partially or totally agree to withdrawal reduction by abandoning all or part of an application for an initial regular permit will probably be financed with revenue bonds or through structured settlements to be paid out over a period of up to 30 years. Agricultural users (i.e. irrigators) will pay lower fees than other non-agricultural users. This will encourage municipal and industrial users who acquire rights for future growth requirements to lease those rights to irrigators. Thus, municipal and industrial users will benefit both by avoiding aquifer management fees and by receiving lease payments. Irrigators with the highest marginal productivity of water will be able to afford the lease payments and will benefit from the additional farm income.

The public benefits and costs of these proposed rules are considered from the standpoint of the potentially affected parties who fall into three broad categories. This note considers the effects of the rules on each of the following groups: Irrigators; and Municipal and industrial users. The estimated aquifer management fees contained in this public benefit and cost note are based on detailed assumptions and a mathematical model. The assumptions include: Estimates of the Authority's operating budget for each of the next five years. The division of withdrawal rights between irrigators (i.e. agricultural users) and other nonagricultural aquifer users. The costs of the contested case hearings process described in the discussion of the fiscal note for proposed Chapter 707. Estimates of the amounts needed to abandon initial regular permit applications for withdrawal reductions in voluntary transactions so that the Authority only issues initial regular permits for 450,000 acre-feet.

Table 709-C shows the results of the model runs. Assuming an average cost of $700 per acre-foot to achieve such withdrawal reductions, the aquifer management fee that would be assessed under propose §709.17, and developed pursuant to the procedures in proposed §§709.19 and 709.21 will cost each person about $29.00 to $38.00 per year per acre-foot of permitted withdrawals. The cost will likely be at the lower end of the cost range in the early years of the five-year period, rise to the high end of the range by the middle of the five-year period, and fall to the middle of the range thereafter. The first-year estimate assumes that virtually no permits have been issued and that the budget requirement is divided among a relatively large number of existing users with interim authorization status under the rules to be proposed in subchapter D of Chapter 711 (relating to Interim Authorization) and the proposed rules for subchapter G of Chapter 711 (relating to Groundwater Withdrawal Permits). The sharp increase in the second year assumes interim authorizations in excess of initial regular permit amounts and full compensation costs, but minimal water marketing. The final year reflects all necessary water marketing, 450,000 acre-feet of initial regular permits, and a larger share of initial regular permits held by the nonirrigation sector. Assuming that an acre-foot of water supplies 2.4 households for a year, the additional revenue per household collected by a person to pay the aquifer management fees is also shown. Persons with water supply requirements of any given size may estimate the impacts of the aquifer management fee rules using the appropriate multiplication.

Figure: 31 TAC, Part 20, Chapter 709, preamble-2

Proposed §§709.19, 709.21, and 709.27 are basically procedural rules that regulate the internal processes of the Authority in how it calculates, assesses and collects an aquifer management fee. For these purely procedural features of these proposed sections, no specific regulatory requirements or compliance obligations are created that might have a fiscal impact. Therefore, Mr. Ellis has determined that for each year of the first five years that the procedural aspects of these rules will be in effect, there will be no probable economic costs to persons required to comply with these rules.

Proposed §709.19 also contains a provision that limits the aquifer management fees assessed against agricultural users to not to exceed 20 percent of that assessed against non-agricultural users. This 20 percent limitation has the effect of adding significant additional costs to what non-agricultural persons would pay if all aquifer users were assessed on an equal unit basis. Because §129(e) of the Act does not authorize the Authority to assess aquifer management fees equally to all users and requires the imposition of the 20 percent maximum rule, the Authority has not assessed this scenario to determine the fiscal effects on all agricultural and non-agricultural users in light of the 20 percent rule. The Authority may not assess the aquifer management fees in a rate in excess of the 20 percent limit and, therefore, the Authority has not analyzed the fiscal effects of this scenario. The Authority may assess the aquifer management fee against agricultural users at a percentage below the 20 percent limit, however, the Authority has not exercised its discretion to do so. The aquifer management fee revenues associated with agricultural users currently represents an estimated range of 4 to 6 percent of the total aquifer management fee revenues generated during any particular fiscal year. Because this percentage is such a minor component of the overall revenue base of the Authority, any setting of the aquifer management fee percentage for agricultural users below the 20 percent maximum rate will increase in an insignificant amount the aquifer management fee that would be assessed against non-agricultural users. Therefore, Mr. Ellis has determined that for each year of the first five years that the 20 percent limitation will be in effect, there will be probable economic costs to persons as discussed above.

The proposed rules define "agricultural use" to mean "irrigation use" only as defined in proposed §709.1, instead of also including nurseries, aquaculture, feedlot operations, and other users that may qualify as agricultural users under other laws. As a result, these other categories of users would not benefit from the 20 percent limitation. The aggregate annual groundwater withdrawals from these other categories of users is estimated to be 0 to 53,000 acre feet per year. As such, the potential aquifer management fee cost for users in these categories if assessed as non-agricultural users is estimated to be up to $2,000,000. If these users are assessed based on the 20 percent agricultural use fee rate then the aquifer management fee revenues are estimated to be up to $385,000. Therefore, Mr. Ellis has determined that for each year of the first five years that the 20 percent limitation will be in effect, the probable economic costs to these categories of users that are not classified as agricultural users is estimated to be $385,000 to $1,615,000.

Proposed §§709.23 and 709.29 place limitations on the amount of the aquifer management fees the Authority may collect. These sections need to be read in conjunction with proposed §§709.19 and 709.21 to establish the amount of the annual budget that the Authority may adopt each fiscal year at its discretion providing the starting point for the calculation and assessment of the aquifer management fee pursuant to §§709.19 and 709.21. It is this calculated aquifer management fee that is assessed pursuant to proposed §709.17.

Based on the above discussion, Mr. Ellis has determined that for each year of the first five years that proposed §§709.17, 709.19, 709.21 and 709.23 will be in effect, there will be probable economic costs to persons required to comply with these rules as indicated above.

Proposed §§709.25 and 709.31 provide for certain of aquifer management fee reduction contracts and fee waiver agreements that may be entered into. Such contracts could only occur based on the voluntary conduct of persons who may have aquifer management fees due and owing. While persons may choose to reduce or waive all of the duty to pay an aquifer management fee and may incur transaction costs, these costs would have been voluntarily incurred. Therefore, Mr. Ellis has determined that for each year of the first five years that these proposed rules will be in effect, there will be no probable economic costs to persons.

Proposed §709.33 authorizes the Authority to bring enforcement actions for the failure to pay an aquifer management fee that is due and owing. Enforcement would be brought by the Authority only for the volitional conduct of a person that results in non-compliance by failure to pay an aquifer management fee. Proposed §709.35 prohibits withdrawals by persons who are delinquent in the payment of aquifer management fees. §709.35 works in concert with §709.33 as an enforcement tool. If a person failed to pay its aquifer management fees, any additional costs to defend itself, other enforcement costs, delay costs resulting the Authority's refusal to process a pending application, or the inability to make withdrawals would have resulted from their own conduct rather than the operation of this proposed rule. However, if a person did seek to defend itself from having to pay aquifer management fees, the defense costs could range from many hundreds of dollars to many tens of thousands of dollars depending on the vigor of the defensive efforts. Therefore, Mr. Ellis has determined that for each year of the first five years that this rule will be in effect, there will effectively be no probable economic costs to persons required to comply with these rules.

Section 2001.022 of the Texas Government Code requires agencies to request that the Texas Workforce Commission prepare a Local Employment Impact Statement in connection with certain proposed rules. Under the appropriate circumstances, the Commission is then to prepare, within 25 days, an impact statement which includes a description of the probable effects of the rule on employment in each geographic area affected by the rules for each year of the first five years that the rules will be in effect. On April 21, 2000, after having determined that the proposed Chapter 709 rules may affect a local economy, the Authority submitted to the Commission a copy of the proposed Chapter 709 rules and other supporting and initial information, including information that the Commission requires on a form prescribed by the Commission. On April 28, 2000, the Authority provided to the Commission certain supplemental information relating to these rules.

In a letter to Gregory M. Ellis, dated May 19, 2000, the Commission stated, in regard to the "Authority's Draft Proposed Rules 31 TAC 709 . . . concerning Fees as follows: After reviewing the information provided to our Department, there is no apparent basis to refute the proposed employment impacts outlined in the information submitted on behalf of the Authority. Our data will not confirm nor deny the potential lost jobs nor the newly created jobs based upon the impact of these proposed rules.

This letter does not constitute a Local Employment Impact Statement because it does not meet the criteria identified in §2001.022(a) of the Texas Government Code. Because the Commission did not prepare and deliver to the Authority a Local Employment Impact Statement within 25 days after the date on which the Commission received the proposed rules, the proposed rules are presumed not to affect local employment pursuant to §2001.022(e) of the Texas Government Code. Accordingly, there is no Local Employment Impact Statement required by §2001.024(a)(6) of the APA to be included in this Notice of Proposed Rule.

Interested persons may submit written comments on the proposed rules. Comments must be submitted in writing to Brenda Davis, Docket Clerk, Edwards Aquifer Authority, P.O. Box 15830, 1615 N. St. Mary's St., San Antonio, Texas 78212-9030, within 30 days of the publication of this notice in the Texas Register . The written comments should be filed on 8 1/2 x 11 inch paper and be typed or legibly written. Written comments must indicate whether the comments are generally directed at all of the proposed rules, or whether they are directed at specific proposed rules. If directed at specific proposed rules, the number of the proposed rule must be identified and followed by the comments thereon.

The Authority has scheduled the following public hearings on this proposed rule: Wednesday, August 9, 2000, 6:00 p.m., Conference Center Edwards Aquifer Authority, 1615 N. St. Mary's San Antonio, Texas 78215, (210) 222-2204; Tuesday, August 15, 2000, 6:00 p.m., New Braunfels Civic Center, 380 S. Seguin Avenue New Braunfels, Texas 78130, (830) 625-2385; Thursday, August 17, 2000, 6:00 p.m., St. Paul's Lutheran Church, 1303 Avenue M Hondo, Texas 78861,(830) 426-3222; Tuesday, August 22, 2000, 6:00 p.m., Sgt. Willie DeLeon Civic Center, 300 E. Main Street Uvalde, Texas 78801, (830) 278-9922; Thursday, August 24, 2000, 6:00 p.m., San Marcos Activity Center, 501 E. Hopkins San Marcos, Texas 78666, (512) 393-8280.

The new sections are proposed pursuant to §§1.08(a), 1.11(a), (b), (d)(2), (f), and (h), 1.15(a), 1.16(b) and (d)(1), 1.29(a), (b), (c), (d), (e), (f), (g), and (h), 1.36(b), 1.44(c)(2) of the Edwards Aquifer Authority Act (Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 Texas General Laws 2350, 2358-59, as amended by Act of May 29, 1995, 74th Legislature, Regular Session, Chapter 261, 1995 Texas General Laws 2505, Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 524, 1995 Texas General Laws 3280, and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 Texas General Laws 634 ("Act"); §2001.004(1) of the Texas Administrative Procedure Act (TEXAS GOVERNMENT CODE ANNOTATED §§ 2001.001-.902 (Vernon 2000)) ("APA"); and §36.205 of the Texas Water Code (TEXAS GOVERNMENT CODE ANNOTATED §36.205 (Vernon 2000)).

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." This section provides the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under Article 1 of the Act, including rules governing procedures of the Board and the authority." This section directs the Board to adopt rules as necessary to implement the various substantive programs set forth in the Act related to the Edwards Aquifer, which includes applications, rules and registration, aquifer management, and regular permit special retirement fees, and in particular, administrative procedures to be used before the Board and the Authority.

Section 1.11(b) of the Act requires the Authority "ensure compliance with permitting, metering, and reporting requirements and shall regulate permits." This section, in conjunction with §1.11(a) and (h) of the Act, and § 2001.004(1) of the APA, empowers the Authority to establish procedures related to the filing and processing of various applications and registrations with and by the Authority.

Section 1.11(d)(2) of the Act provides, among other things, that the Authority may enter into contracts.

Section 1.11(f) of the Act provides the Authority may contract with a person who uses water from the aquifer for the Authority or that person to construct, operate, own, finance, and maintain water supply facilities which include a dam, reservoir, treatment facility, transmission facility, or recharge project. This section further provides management fees or special fees may not be used for purchasing or operating these facilities.

Section 1.11(h) of the Act provides, among other things, that the Authority is "subject to" the APA. Pursuant to this section, the Authority is required to comply with the APA in connection with its rulemaking, even though the Authority is not a state agency and would therefore otherwise not generally be subject to APA requirements. Section 2001.004(1) of the APA requires agencies subject to the APA to "adopt rules of practice stating the nature and requirements of all available formal and informal procedures."

Section 1.15(a) of the Act directs the Authority to manage withdrawals from the aquifer and manage all withdrawal points from the aquifer as provided by this Act.

Section 1.16(b) of the Act sets forth certain requirements concerning an existing user's declaration of historical use and an applicant's payment of application fees required by the Board.

Section 1.16(d)(1) of the Act requires the Board to grant an initial regular permit to an existing user who files a declaration and pays fees as required by this section.

Section 1.29(a) of the Act relates to fees. This section provides that the allocation of the cost of reducing withdrawals or permit retirements must be borne: solely by users of the aquifer for reducing withdrawals from the level on the effective date of this article to 450,000 acre-feet a year, or the adjusted amount determined under §1.14(b) for the period ending December 31, 2007; and equally by downstream water rights holders for permit retirements from 450,000 acre-feet a year, or the adjusted amount determined under §1.14(d) for the period ending December 31, 2007, to 400,000 acre-feet a year, or the adjusted amount determined under 1.14(d) for the period beginning January 1, 2008.

Section 1.29(b) of the Act provides for the assessment of aquifer management fees based on aquifer use under the water management plan to finance the Authority's authorized administrative expenses and programs. This section also allows water districts governed by Chapter 52 of the Texas Water Code and within the Authority's boundaries, to contract with the Authority to pay the Authority's expenses through taxes in lieu of user fees, to be paid by water users in the district. This section provides the Authority with the power to assess fees in order to generate revenue to finance the operation of the Authority, however, the Authority may not collect a total amount of fees and taxes that is more than is reasonably necessary for the administration of the Authority.

Section 1.29(c) of the Act provides that the Authority shall assess an equitable special fee based on permitted aquifer water rights to be used only to finance the retirement of rights necessary to meet the goals of the Authority for reducing the maximum annual volume of water withdrawals from the aquifer. The section further provides the Authority shall set the fees on permitted aquifer users at a level sufficient to match the funds raised from the assessment of equitable special fees on downstream water rights holders.

Section 1.29(d) of the Act provides for the assessment of equitable special fees by the Commission on all downstream water rights holders in the Guadalupe River Basin to be used to finance the retirement of aquifer rights necessary to meet the goals of the Authority for reducing the maximum annual volume of water withdrawals from the aquifer. This section further provides that downstream water rights holders shall pay the assessed fees to the Authority. This section prohibits the assessment of fees by the Commission on contractual deliveries of water stored in Canyon Lake that may be diverted downstream of the San Marcos Springs or Canyon Dam.

Section 1.29(e) of the Act provides for the development of an equitable fee structure under §1.29 and authorizes the Authority to establish different fee rates on a per acre-foot basis for different types of use. The fees must be equitable between types of uses and shall be assessed on the amount of water a permit holder is authorized to withdraw under the permit. Certain fee rates for agricultural use shall be based on the volume of water withdrawn and may not be more than 20 percent of the fee rate for municipal use.

Section 1.29(f) of the Act requires the Authority to impose a permit application fee of not more than $25.

Section 1.29(g) of the Act empowers the Authority to impose a registration application fee of not more than $10.

Section 1.29(h) of the Act states that special fees collected under subsection (c) or (d) of §1.29 may not be used to finance a surface water supply reservoir project.

Section 1.36(b) of the Act provides the Authority with enforcement power and states that Authority shall provide for the suspension of a permit of any class for failure to pay a required fee or for a violation of a permit condition, order of the Authority, or rule adopted by the Authority.

Section 1.44(c)(2) of the Act relates to cooperative contracts for artificial recharge and states the political subdivision causing artificial recharge of the aquifer is entitled to withdraw during any 12-month period the measured amount of water actually injected or artificially recharged during the preceding 12-month period, as demonstrated and established by expert testimony, less an amount determined by the Authority to account for that part of the artificially recharged water discharged through springs, and to compensate the Authority in lieu of users' fees.

Section 2001.004(1) of the APA requires agencies subject to the APA to "adopt rules of practice stating the nature and requirements of all available formal and informal procedures." This proposed rulemaking is in furtherance of this legislative mandate. These proposed rules are rules of practice that state the procedures applicable to the fee setting process of the Authority.

Section 36.205 of the Texas Water Code authorizes groundwater conservation districts to set fees for administrative acts of the districts. Such fees may not unreasonably exceed the cost to the district of performing the administrative function for which the fee is charged.

Subchapter A. DEFINITIONS

The Edwards Aquifer Authority (the "Authority") proposes the adoption of §§711.1, 711.10, 711.12, 711.14, 711.90, 711.92, 711.94, 711.96, 711.98, 711.100, 711.102, 711.104, 711.108, 711.110, 711.112, 711.116, 711.118, 711.130, 711.132, 711.134, 711.160, 711.162, 711.164, 711.166, 711.168, 711.170, 711.172, 711.174, 711.176, 711.178, 711.180, 711.220, 711.222, 711.224, 711.226, 711.228, 711.230, 711.232, and 711.234, to be codified at Title 31, TEXAS ADMINISTRATIVE CODE (the "proposed Chapter 711 rules"), relating to the Authority's implementation of a groundwater withdrawal permitting program.

The Edwards Aquifer Authority Act (the "Act") requires the Authority to implement a permitting system whereby "existing users" of groundwater from the Edwards Aquifer and other potential users of aquifer water may apply for and receive initial regular permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. Other types of permits are also required by the Act for well construction and related work. Certain other withdrawals are exempted by the Act from permitting requirements. The Act also specifies an "interim authorization" period prior to the issuance by the Authority of final initial regular permits during which certain existing users of the aquifer may continue to make withdrawals. The Act imposes a number of restrictions upon the use of the aquifer during the interim authorization period as well as after permits are issued. It also places limits on the ability to transfer permits or interim authorization status. The proposed rules in this Chapter 711 are intended to effectuate these various components of the Act.

Proposed §711.1, Subchapter A of the proposed Chapter 711 rules, sets forth the definitions that will apply to all rules issued by the Authority in Chapter 711. These rules have been written to provide uniform definitions for words and phrases that are expected to be used consistently throughout Chapter 711. They are intended to provide useful "short-hand" to reduce the amount of cumbersome regulatory language necessary in other Authority rules, thus allowing for a more efficient understanding and operation of other rules of the Authority.

The Act requires the Authority to implement a permitting system whereby certain "existing users" of groundwater from the aquifer and other potential users of aquifer water may apply for and receive initial regular permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. Other types of permits are also required by the Act for well construction and related work. Sections 711.10 - 711.14, Subchapter B of the proposed Chapter 711 rules, set forth the activities for which a permit from the Authority is required.

Section 711.10 sets out the purposes of the proposed Chapter 711 rules, which relate to managing the aquifer to protect the various entities and other interests utilizing the aquifer.

Section 711.12 identifies the types of activities for which a permit is required from the Authority. This section provides that a permit is generally required before one may withdraw aquifer water; construct, alter or operate an aquifer well, including a monitoring well, a well pump, or a well meter or alternative measuring method; recharge water into the aquifer; construct or alter a well designed to withdraw non-Edwards groundwater if the well intersects the Edwards Aquifer; or store water within the aquifer. The section also creates an exception to the permit requirement for well construction if the work to be done is routine operation and maintenance and specified requirements are met.

Section 711.14 identifies the types of groundwater withdrawals for which a withdrawal permit is not required from the Authority -- withdrawals from wells qualifying for interim authorization status, or from exempt wells.

The Act requires the Authority to implement a permitting system whereby "existing users" of groundwater from the aquifer and other potential users of aquifer water may apply for and receive initial regular permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. The Act also requires the Authority to issue permits for the construction of Edwards Aquifer wells. Sections 711.90-711.118, Subchapter E of the proposed Chapter 711 rules, fulfill these requirements by setting forth the types of permits issued by the Authority, the conditions governing how and when such permits could be issued, the quantity of and conditions under which water could be withdrawn or wells constructed pursuant to such permits, the duration of such permits, the required contents of permit applications, and the rights and limitations associated with being the holder of such permits.

Section 711.90 identifies the types of permits which may be issued by the Authority.

Section 711.92 provides that, as designated in a groundwater withdrawal permit, aquifer water may be beneficially used only for irrigation use, municipal use or industrial use.

Section 711.94 requires that groundwater withdrawn from the aquifer must be placed to beneficial use without waste. The section also provides that the beneficial use of water by a "contract user" (one who withdrew or purchased and put to beneficial use aquifer water during the statutory historical period pursuant to a contract or other legal right from a prior or existing user from an existing well) may be claimed by the prior or existing user in support of a permit application. The section also describes various irrigation practices which are presumed to constitute beneficial use without waste. The section also provides a mechanism whereby prior or existing users whose historic use has been affected by a requirement of or participation in a federal program shall be given a credit in their permit applications for the amount of water they would have withdrawn and beneficially used were it not for the federal program. Finally, the section provides a mechanism whereby beneficial use of aquifer water during the historical period on the same place of use by multiple existing users each owning different wells will be shared on a pro rata basis.

Section 711.96 clarifies that the Authority's permitting program is limited to withdrawals from the Edwards Aquifer. Therefore, the section states that the Authority cannot issue a permit for the withdrawal of water from non-Edwards aquifers. Similarly, the section provides a mechanism whereby applications for wells withdrawing water from multiple aquifers including the Edwards Aquifer will be granted by the Authority only for a quantity generally corresponding to the amount the well withdraws from the Edwards Aquifer.

Section 711.98 identifies those who may apply for an initial regular permit and describes the attributes of such permits by stating that they are transferrable, have a perpetual term, may be proportionally adjusted in accordance with the Authority's rules, may be retired in accordance with the Authority's rules, may be suspended in accordance with the Authority's rules, may be interrupted in accordance with the Authority's rules, may be abandoned in accordance with the Authority's rules, and may be canceled in accordance with the Authority's rules. The section also lists the elements which an initial regular permit applicant must prove in order to be granted such a permit.

Section 711.100 identifies those who may apply for an additional regular permit and when such applications can be made. The section also describes the attributes of such permits by stating that they are transferrable, have a perpetual term, may be retired in accordance with the Authority's rules, may be suspended in accordance with the Authority's rules, may be interrupted in accordance with the Authority's rules, may be abandoned in accordance with the Authority's rules, and may be canceled in accordance with the Authority's rules. The section also lists the elements which an additional regular permit applicant must prove in order to be granted such a permit.

Section 711.102 identifies those who may apply for a term permit and when such applications can be made. The section also describes the attributes of such permits by stating that they are transferrable, explaining when they may be interrupted in accordance with the Authority's rules, and explaining that they may have a term of up to ten years. The section also lists the elements which a term permit applicant must prove in order to be granted such a permit and provides that the Authority Board shall annually determine that total quantity of water which may be withdrawn pursuant to term permits.

Section 711.104 identifies those who may apply for an emergency permit. The section also describes the attributes of such permits by stating that they are not transferrable or interruptible, and explaining that they may have a term of up to 30 days but are renewable. The section also lists the elements which an emergency permit applicant must prove in order to be granted such a permit.

Section 711.108 identifies those who may apply for a well construction permit. The section also describes the attributes of such permits by stating that they are not transferrable and explaining that they have a term of 180 days. The section also lists the elements which a well construction permit applicant must prove in order to be granted such a permit.

Section 711.110 identifies those who may apply for a monitoring well permit. The section also describes the attributes of such permits by stating that they are transferrable, have a perpetual term, and are not interruptible. The section also lists the elements which a well construction permit applicant must prove in order to be granted such a permit.

Section 711.112 identifies the many provisions that shall be included in any groundwater withdrawal permit issued by the Authority.

Section 711.116 identifies the many provisions that shall be included in any well construction permit issued by the Authority.

Section 711.118 identifies the many provisions that shall be included in any monitoring well permit issued by the Authority.

While the Act requires the Authority to implement a permitting system, it also imposes a number of restrictions, limitations and other requirements upon the withdrawal of water from the Edwards Aquifer. Sections 711.130-711.134, Subchapter F of the proposed Chapter 711 rules, harmonize these provisions of the Act by clarifying that holders of groundwater withdrawal permits must comply with a number of conditions, including: avoiding actions that adversely affect water quality or threatened or endangered aquifer-dependent species; complying with other Authority rules, including rules designed to protect water quality, conserve water, maximize beneficial use of water, protect aquatic and wildlife habitat and threatened or endangered species, and protect instream uses, bays and estuaries; and complying with the Act.

Section 711.130 states that the purpose of Subchapter F is to establish the standard conditions required in a groundwater withdrawal permit.

Section 711.132 states that Subchapter F applies to all groundwater withdrawal permits issued by the Authority.

Section 711.134 lists the conditions to which any groundwater withdrawal permit issued by the Authority is subject.

The Act requires the Authority to implement a permitting system. The Act also imposes two "caps" which limit the aggregate amount of certain permitted withdrawals which may be issued by the Authority. Specifically, the Act mandates that, initially, total permitted withdrawals for initial and additional regular permits may not exceed 450,000 acre-feet per year and, after January 1, 2008, total permitted withdrawals may not exceed 400,000 acre-feet per year. In the absence of these "caps," total permitted withdrawals might exceed the cap amounts. Therefore, the Act requires the Authority to "proportionally adjust" initial regular permit amounts to reach the 450,000 acre-feet cap, and implement "equal percentage reductions" in order to reach the 400,000 acre-feet cap. The Act also imposes several permit "minimums" applicable to certain initial regular permit holders. Sections 711.160-711.182, Subchapter G of the proposed Chapter 711 rules, would implement these provisions of the Act by establishing the amount of groundwater available for permitting, explaining which types of permits are subject to the caps, implementing a method of calculating the permit minimums, and setting out the procedures for carrying out "proportional adjustment" and "equal percentage reductions."

Section 711.160 explains that the purpose of the subchapter is to establish the amount of groundwater available for permitting, and to set forth the procedures to be used to proportionally adjust permit amounts and implement equal percentage reductions to permit amounts.

Section 711.162 provides that Subchapter G only applies to certain categories of groundwater permits.

Section 711.164 provides that, the aggregate withdrawal "caps" for initial and additional regular permits will be 450,000 acre-feet from the effective date of these rules through December 31, 2007 and 400,000 acre-feet thereafter, unless either of the caps is increased by the Authority pursuant to §1.14(d) of the Act.

Section 711.166 states that the amount of groundwater which may be withdrawn pursuant to term permits is not subject to the withdrawal caps. Instead, the aggregate amount of term permits which can be issued by the Board will be governed by the amount specified in the Board's annual order authorizing the issuance of term permits. Further, term permit withdrawals will only be authorized when the key index well levels are greater than as specified as follows: 1) for wells within the San Antonio pool and within a county other than Atascosa or Medina, when well J-17 is greater than 665 feet above mean sea level; 2) for wells within the San Antonio pool and within Atascosa County or Medina County, when well TD 69-47-306 is greater than 685 feet above mean sea level; and 3) for wells within the Uvalde Pool, when well J-27 is greater than 865 feet above mean sea level.

Section 711.168 provides that the amount of groundwater which may be withdrawn pursuant to emergency permits is not subject to the withdrawal caps. Instead, the amount of emergency permits the board may issue shall not exceed the amount necessary to prevent the loss of life or to prevent severe, imminent threats to public health or safety.

Section 711.170 provides that the amount of groundwater which may be withdrawn pursuant to monitoring well permits is not subject to the withdrawal caps. Instead, the amount of monitoring well permits may not exceed the amount reasonably necessary to property collect water quality samples from the aquifer.

Section 711.172 sets forth the mechanism by which initial regular permits will be proportionately adjusted, if necessary, in order to reach the 450,000 acre-feet withdrawal cap or other applicable cap. Under this section, if the total aggregate maximum historical use of all initial regular permits exceeds the withdrawal cap of 450,000 acre-feet, or other applicable cap, then the board shall proportionately adjust the permit amounts as follows: 1) The board shall determine each user's maximum historical use (MHU) during the historical period. 2) The board shall determine and assign an "irrigator minimum" to each entitled existing user which will be equal to two acre-feet times each acre of land the user irrigated in any one year of the historical period. 3) Each existing user with more three or more years' use during the historical period will have a "historical average minimum" calculated by dividing the user's total aggregate withdrawals during the historical period by the number of years during the historical period inclusive of and after the date of initial well installation. 4) A Phase-1 proportional adjustment factor (PA-1 Factor) will be calculated by subtracting 450,000 from the total of all maximum historical uses (MHUs) and dividing the result by the total of all MHUs. 5) The board will then calculate a Phase-1 proportionally adjusted amount (PA-1 Amount) for each applicant by multiplying the applicant's MHU times the PA-1 Factor and subtracting the product from the applicant's MHU. 6) Each applicant assigned an irrigator minimum or an historical average minimum and whose PA-1 Amount is less than the minimum will then be assigned a step-up amount (SUA) equal to the difference between the minimum and the PA-1 Amount. 7) Section 711.180, discussed more fully below, allows the Authority to further reduce withdrawals by entering into agreed orders whereby initial regular permit applicants may waive (possible by selling to the Authority) all or part of their applications for initial regular permits. If, despite these waivers, the total of all PA-1 amounts plus all SUAs still exceeds the 450,000 acre-feet cap, then the board shall calculate a Phase-2 proportional adjustment factor (PA-2 Factor) by: (a) adding the totals of all remaining PA-1 amounts and SUAs; (b) subtracting 450,000 from the sum; and (c) dividing the result by the totals of all remaining PA-1 amounts and SUAs. 8) The board will then calculate a Phase-2 proportionately adjusted amount (PA-2 amount) for each applicant as follows: (a) for applicants eligible for an SUA, their PA-2 amount will be calculated by multiplying the PA-2 factor by their PA-1 and SUA, and subtracting the result from the total of their PA-1 amount and SUA; (b) for those ineligible for an SUA, their PA-2 amount will be calculated by multiplying the PA-2 factor by their PA-1 amount and subtracting the result from their PA-1 amount. The section goes on to provide that if the "cap" is raised, then the proportionately adjusted amounts will be restored through the inverse application of this section.

Section 711.174 explains that initial regular permits will be retired by equal percentage reductions if necessary in order to reach the 400,000 acre-feet withdrawal cap or other applicable cap in accordance with Subchapter H of Chapter 715, rules yet to be adopted by the Authority.

Section 711.176 explains the method by which initial regular permit amounts will be determined. If the aggregate amount of MHUs does not exceed the 450,000 acre-feet cap or other applicable cap, then initial regular permits shall be issued for the amount of the applicant's MHU. Alternatively, if the aggregate of MHUs does exceed the cap, then each applicant shall receive an initial regular permit in the following applicable amount: 1) for irrigation use, in an amount not less than the irrigator minimum, or may be adjusted by the Phase-1 and Phase-2 proportional adjustment processes; and 2) for users with at least three years' use during the historical period, in an amount not less than the user's historical average minimum, as may be adjusted by the Phase-1 and Phase-2 proportional adjustment processes. In the event that an existing user is issued a permit for a PA-1 Amount which is less than his or her minimum, then the section provides that the step-up amount may be withdrawn, and that, in the event of a Phase-2 proportional adjustment, the PA-2 amount may not be withdrawn, but instead, compensation will be provided at the fair market value as defined in §11.0275 of the Texas Water Code.

Section 711.178 applies to initial regular permits, additional regular permits, and term permits. Under this section, each permittee must, by November 1 of the year after the permit is issued, file with the Authority a water withdrawal schedule containing specified information. The general manager is then to review and approve or return the schedule for correction. Permittees are not allowed to withdraw more the 110 percent of the scheduled monthly amount during any one month.

Section 711.180 provides that the Board may enter into voluntary agreed orders with applicants declaring the waiver of all or part of an applicant's MHU, PA Amount, step-up amount, base irrigation groundwater or unrestricted irrigation groundwater claimed in an application.

The Act requires the Authority to impose and enforce a number of restrictions, limitations and other requirements upon the use of water from the aquifer. Sections 711.220-711.234, Subchapter I of the proposed Chapter 711 rules, impose a number of prohibitions on aquifer use, including: requiring water withdrawn from the aquifer to be used within the Authority's boundaries; limiting withdrawals from new wells; requiring permits for most withdrawals and well construction; requiring registration of exempt wells; requiring compliance with the Act, the Authority's rules and the terms of Authority permits; and prohibiting waste or pollution of the aquifer.

Section 711.220 generally requires that groundwater withdrawn from the aquifer must be used within the Authority's boundaries, and that, for water processed into or used to produce a commodity, the place of use is the plant site where the commodity is produced.

Section 711.222 prohibits aquifer withdrawals from new wells unless the withdrawals are from an exempt well, a permitted well, or a well identified as a point of withdrawal in a transfer approved by the Authority.

Section 711.224 generally prohibits groundwater withdrawals or new well construction without a permit. It also prohibits operation of a well at a higher rate of production than authorized in a withdrawal permit.

Section 711.226 prohibits operation of an exempt well unless the well has been registered with the Authority.

Section 711.228 prohibits violations of the Act, the Authority's rules, or the terms or conditions of a permit.

Section 711.230 prohibits the waste of aquifer water.

Section 711.232 prohibits the pollution of the aquifer.

Section 711.234 identifies various practices which are declared to be nuisances.

Section 2001.0225 of the Texas Government Code requires an agency to perform, under certain circumstances, a regulatory analysis of major environmental rules ("RIAMER"). There are two primary components that must be met before a RIAMER is required. First, no RIAMER need be prepared if the rules in question are not "major environmental rules" or "MERs." Second, even if the rules are MERs, no RIAMER need be prepared if adoption of the MERs would not result in any one of the following criteria listed in §2001.0225(a)(1)-(4): 1. the MER would "exceed" a standard set by federal law, unless the MER is specifically required by state law; 2. the MER would "exceed" an express requirement of state law, unless the MER is specifically required by federal law; 3. the MER would "exceed" a requirement of a delegation agreement or contract between the state and an agency or representative of the federal governmental to implement a state and federal program; or 4. the MER is adopted solely under the "general powers" of the agency instead of under a specific state law.

The following analysis examines whether a RIAMER is required for any of the proposed rules on a subchapter by subchapter basis.

The Authority has determined that none of the rules proposed as Subchapter A of 31 Texas Administrative Code - §711.1 (the "Subchapter A Rules") are "major environmental rules" as that term is defined by 2001.0225(g)(3) of the Texas Government Code. The Subchapter A rules set forth the definitions that will apply to all rules issued by the Authority in Chapter 711. These rules have been written to provide uniform definitions for words and phrases that are expected to be used consistently throughout Chapter 711. They are intended to provide useful "short-hand" to reduce the amount of cumbersome regulatory language necessary in other Authority rules, thus allowing for a more efficient understanding and operation of other rules of the Authority. The definitions have no regulatory import outside of their incorporation in substantive rules that may be found elsewhere in Chapter 711. Because they do not have the specific intent to protect the environment or reduce risks to human health from environmental exposure, they are not MERs.

Further, even if any of the Subchapter A rules were MERs, no RIAMER need be prepared for those proposed rules because none of the rules in Subchapter A meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the rules do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA for portions of the Edwards Aquifer, which applies only to federally-funded projects conducted on the aquifer. Under that program, no federal financial assistance may be made to projects that the EPA determines may contaminate the Edwards Aquifer so as to create a significant hazard to public health. There is no federal law that specifically requires definitions such as those contained in the Subchapter A rules. Therefore, the Subchapter A rules do not exceed a standard set by federal law.

Second, the proposed Subchapter A rules do not exceed an express requirement of state law. Instead, the proposed rules are designed to carry out the Authority's statutory responsibility to: manage, conserve, preserve and protect the aquifer, adopt rules to carry out its powers and duties under the Act, to regulate permits, manage withdrawals and points of withdrawals from the aquifer, require various types of permits for certain withdrawals, allow for interim authorization withdrawals prior to permit issuance, impose various conditions and restrictions on aquifer use, require that aquifer use be limited to beneficial uses, prohibit waste of aquifer water, and regulate transfers of aquifer rights (pursuant to, inter alia , §§1.03(4), (10) and (21), 1.08(a), 1.11(a) and (b), 1.14, 1.15, 1.16, 1.17 and 1.34 of the Act). The proposed rules are designed to comply with these express requirements of state law and not exceed them. There are no other applicable "express requirements of state law" which are exceeded by these proposed rules.

Third, the proposed Subchapter A rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of the proposed rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the proposed Subchapter A rules would not be adopted solely under the general powers of the Authority instead of under a specific state law. While these proposed rules are adopted in part under the Authority's general powers, they are also adopted under the Act. In particular, the rules are adopted pursuant to, inter alia , §§ 1.03(4), (10) and (21), 1.08(a), 1.11(a) and (b), 1.14, 1.15, 1.16, 1.17 and 1.34 of the Act, which require the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals; allow for interim authorization withdrawals prior to permit issuance; impose various conditions and restrictions on aquifer use; require that aquifer use be limited to beneficial uses; prohibit waste of aquifer water; and regulate transfers of aquifer rights.

For these reasons, it is not necessary to perform a RIAMER on the proposed Subchapter A rules.