The School Land Board (SLB) adopts amendments to 31 TAC, Chapter 151, 151.5, relating to the Exploration and Development of Groundwater Resources on State Lands. The amendments are adopted with changes to the proposed text as published in the January 27, 2006, issue of the Texas Register (31 TexReg 458).

The amendments provide guidance related to the criteria to be considered when reviewing proposed leases for the exploration and development of groundwater that are referred to the SLB by the Commissioner of the General Land Office.

Written comments on the proposal were received from the Brewster County Groundwater Conservation District, Bluebonnet Groundwater Conservation District, Jeff Davis and Presidio Counties UWCD, and a joint comment on behalf of Environmental Defense, National Wildlife Federation, and the Lone Star Chapter of the Sierra Club.

The comments generally addressed the following concerns: (1) modifying the phrase "rules of any groundwater conservation district" with the word "administrative" might serve as a limitation of the district's authority; (2) that the rule language did not expressly encompass both "exploration" and "development"; (3) that additional or alternate criteria should be considered by the board in its review of any proposed leases; and (4) that submission of proposed leases should be for the board's approval not for "review and comment."

In response to the first concern, the board changed the word "administrative" in the proposed amendment at 151.5(a)(2) to "applicable." This alteration in the text of the rule should make it more clear that any applicable rules of a groundwater conservation district with jurisdiction will be considered. Changes to 151.5(a) that add "exploration and/or" before the word "development" to the first sentence of the proposed text are intended to address the second concern.

Specific proposals submitted by commentors regarding the third and fourth concerns were considered. With regard to the third concern, the board notes that, as published, the proposed rule sets out broad categories of criterion that the board may use in its review of any proposed leases. Particularly, the board notes that the rule, as adopted, is consistent with existing policies of the board and does not limit the criteria by which the board may evaluate a proposed lease. With regard to the fourth concern, the board notes that Texas law vests the authority to lease Permanent School Fund lands with the commissioner of the General Land Office.

The justification for the adopted rulemaking is that the public will benefit from the amendments because the new section will assure a thorough review of proposed projects and an assessment of the benefits and impacts to result from them. There will be no effect on small businesses, and a local employment impact statement on these proposed regulations is not required, because the proposed rule will not have any identifiable material adverse affect on any local economy in the first five years it will be in effect.

Pursuant to Texas Government Code 2001.0225, a regulatory analysis is not required for the adopted rulemaking as a "major environmental rule." Under the Government Code, a "major environmental rule" is a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The adopted rulemaking does not exceed a standard set by federal law, does not exceed an express requirement of state law, does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state or federal program.

The SLB has evaluated the adopted amendment to determine whether Texas Government Code, Chapter 2007, is applicable, and whether a detailed takings impact assessment is required. The board has determined the adopted rule does not affect private real property in a manner that requires real property owners to be compensated as provided by the Fifth and Fourteenth Amendments to the United States Constitution or Article I, Sections 17 and 19, of the Texas Constitution. Furthermore, the board has determined that the adopted rule would not affect any private real property in a manner that restricts or limits the owner's right to the property that would otherwise exist in the absence of the new rule being proposed.

These amendments are adopted under Texas Natural Resources Code, Chapter 32, including 32.062, which authorizes the board to adopt rules related to procedure and to the sale, lease, and development of PSF lands.

Texas Natural Resources Code 51.121 and 32.061 are affected by this rulemaking.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

151.5. Exploration and Development of Groundwater Resources on State Lands.

Upon request by the commissioner of the General Land Office (GLO), the School Land Board (SLB) will review proposed leases of permanent school fund lands that include authorization for the exploration and/or commercial development of underground water resources. Such review shall consider issues related to the project's consistency with the goals and policies of the SLB, including but not limited to:

    (1) how the proposed project will take into account the public good, water conservation efforts, and economic growth;

   (2) whether the project will adhere to applicable local, state, and federal laws as well as any applicable rules of groundwater conservation district(s) in which the lands may be located;

   (3) whether the rate of return on the project to the permanent school fund is consistent with the goals and strategies of the SLB; and

   (4) whether any water produced from the lands can be treated and transported in an economical manner.