Senate Bill 1698

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    Florida Senate - 2000                                  SB 1698

    By Senator Laurent





    17-1184A-00

  1                      A bill to be entitled

  2         An act relating to the consumptive use of

  3         water; creating s. 373.2705, F.S.; creating a

  4         pilot program in the Southern Water Use Caution

  5         Area for market-based approaches to water-use

  6         leases; expressing legislative findings and

  7         intent; including definitions; specifying

  8         framework and procedures for the pilot program

  9         in which consumptive use permittees may lease

10         the use of their allocated water; specifying

11         conditions of the contract between permittees

12         and those who lease the use of their water;

13         prescribing the authority of the Southwest

14         Florida Water Management District; amending s.

15         373.219, F.S.; providing an exemption from

16         permit requirements for lessees under the pilot

17         program; amending s. 373.236, F.S.; providing

18         for the duration of permits; directing the

19         water management district to submit a report of

20         the pilot program's status, beginning March 1,

21         2002; providing an effective date.

22

23  Be It Enacted by the Legislature of the State of Florida:

24

25         Section 1.  Section 373.2705, Florida Statutes, is

26  created to read:

27         373.2705  Southern Water Use Caution Area pilot

28  program.--

29         (1)(a)  The Legislature finds that the state's five

30  water management districts have identified through their

31  regional water supply planning efforts that in the next 20

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  1  years, Florida's water consumption will have increased by 1.8

  2  billion gallons a day, to a total of 9 billion gallons a day,

  3  and could cost an estimated $6 billion to implement.

  4         (b)  The Legislature finds that within the Southern

  5  Water Use Caution Area of the Southwest Florida Water

  6  Management District, the total permitted water allocations for

  7  all water-use permittees is at least double the region's

  8  sustainable yield of 550 million gallons to 650 million

  9  gallons of water a day. Estimated actual water usage in the

10  region also is about 650 million gallons a day.

11         (c)  The Legislature finds that the existing

12  bureaucratic structure for regulating consumptive uses of

13  water may be too slow and costly to meet these future water

14  needs and is too dependent on taxpayer-funded solutions.

15         (d)  The Legislature finds that despite this heavily

16  regulated structure natural systems are suffering, even as

17  long-term recovery strategies are being implemented, because

18  the water management districts continue to issue water-use

19  permits without the benefit of sufficient data and established

20  minimum flows and levels as required by s. 373.042.

21         (e)  The Legislature finds that private-sector market

22  approaches could provide the flexibility, innovation, and cost

23  efficiency lacking in the current regulatory structure for

24  consumption of water, as long as the water needs of natural

25  systems are protected.

26         (2)(a)  It is the intent of the Legislature that the

27  Southwest Florida Water Management District expeditiously

28  adopt minimum flows and levels for its designated significant

29  waterbodies in the Southern Water Use Caution Area in order to

30  prevent further environmental damage to the region's vital

31  natural systems.

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  1         (b)  Further, the Legislature intends for the district

  2  to make available opportunities for water-use leases in the

  3  Southern Water Use Caution Area which reduce the chance for

  4  significant environmental harm, protect domestic water users

  5  and existing users, promote conservation, and provide

  6  efficient and cost-effective transport and use of water

  7  without expanding regulatory controls.

  8         (c)  It is the Legislature's intent to create a

  9  voluntary program within the Southern Water Use Caution Area

10  whereby water-use permittees may lease the use of all or part

11  of their permitted allocations as adjusted under subsection

12  (6) to third parties, who would not be required to obtain

13  individual water use permits.

14         (3)  As used in this section, the term:

15         (a)  "Aquifer transfer" means those leases of water use

16  where the lessor's groundwater withdrawal point is in a

17  different location from the lessee's groundwater withdrawal

18  point.

19         (b)  "Domestic water use" means the use of water for

20  the individual personal household purposes of drinking,

21  bathing, cooking, or sanitation at a single-family dwelling or

22  duplex if the water is obtained from one well for each

23  single-family dwelling or duplex and no water-use permit is

24  required.

25         (c)  "Most-impacted area," or "MIA" means that area

26  within the Southern Water Use Caution Area as set forth in

27  Section 7.2.8.A and Figure 7.2-2, of the Southwest Florida

28  Water Management District's Basis of Review.

29         (d)  "Southern Water Use Caution Area" means that

30  portion of the Southwest Florida Water Management District

31  which has been designated pursuant to chapter 40D-2.801,

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  1  Florida Administrative Code.  It encompasses all of Manatee,

  2  Sarasota, Hardee, and DeSoto counties and portions of

  3  Hillsborough, Charlotte, Polk, and Highlands County.

  4         (e)  "Three-year-average actual usage," in the context

  5  of the pilot program means the average of the three highest

  6  annual amounts of water used by a permittee during the period

  7  1989-1999. The district shall determine this average for each

  8  permittee participating in the pilot program, using metered

  9  data, if available; otherwise, the district shall determine a

10  participant's 3-year-average actual usage based on best

11  available estimates of average water use by similar users

12  within the Southern Water Use Caution Area.

13         (4)(a)  By December 31, 2000, the district shall

14  establish minimum flows or levels for the following

15  waterbodies in the Southern Water Use Caution Area:

16         1.  The Floridan Aquifer;

17         2.  The Upper Peace River;

18         3.  Lakes Eagle, McLeod, Wales, Clinch, and Crooked in

19  Polk County; and

20         4.  Lakes Lotela, Letta, Placid, and Jackson in

21  Highlands County.

22         (b)  In order to provide adequate due process while

23  ensuring timely development of minimum flows and levels under

24  this subsection, proposed rules authorized by s. 373.0421 will

25  be ineffective pending resolution of an administrative

26  proceeding under s. 120.54(3), s. 120.56, s. 120.569, or s.

27  120.57. However, pending resolution of the administrative

28  proceedings, the district may continue evaluating the permits

29  of participants in the pilot program as authorized by

30  subsections (6) and (7), if the district substantiates those

31  actions using the underlying bases for the minimum flows and

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  1  level rules without the benefit of any legal presumption

  2  favoring or in deference to the challenged rules or orders.

  3         (5)  From the water available in the region, the

  4  district shall account for the needs of the natural systems,

  5  as determined under subsection (4), and the estimated amount

  6  of water necessary to supply domestic users. The amount of

  7  water in excess of that amount is the baseline by which the

  8  district evaluates the water-use permits whose holders seek to

  9  participate in the pilot program.

10         (6)  Beginning January 3, 2001, most water-use

11  permittees within the Southern Water Use Caution Area shall

12  have the opportunity to participate in a voluntary program by

13  which the district evaluates their permitted quantities and

14  amount of actual water use. Prohibited from participation in

15  the pilot program are aquifer transfers of water where the

16  potential lessor's withdrawal point is outside the

17  most-impacted area and the potential lessee's withdrawal point

18  is within the most-impacted area, because this would create a

19  currently prohibited new groundwater withdrawal within the

20  most-impacted area and potentially increase the risk of

21  saltwater intrusion.

22         (a)  Agricultural water-use permittees who decide to

23  participate in the pilot program may lease to third parties

24  all or part of their 3-year-average actual usage, as

25  determined by the district, to be at or above the source

26  waterbody's minimum flow or level.

27         (b)  Public supply water-use permittees who decide to

28  participate in the pilot program may lease to third parties

29  all or part of their 3-year-average actual usage, as

30  determined by the district.

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  1         (c)  Industrial water-use permittees who decide to

  2  participate in the pilot program may lease to third parties

  3  all or part of their 3-year-average actual usage, as

  4  determined by the district.

  5         (d)  Existing permittees under paragraphs (a)-(c) whose

  6  3-year-average actual usage is determined by the district to

  7  exceed the source waterbody's minimum flow or level may not

  8  participate in the water-use lease program unless they

  9  implement measures within 1 year after joining the program to

10  reduce their actual use so that it complies with the minimum

11  flow or level of the appropriate source waterbody. Permittees

12  in these categories may not lease to a third party more water

13  than is sustainable under the source waterbody's minimum flow

14  or level.

15         (e)  1. Existing permittees who apply to participate in

16  this program shall notify the district within 90 days after

17  receiving its evaluation of their allocations and actual usage

18  as to whether they wish to pursue contractual leases for the

19  use of their allocated water.  The district shall adjust the

20  water-use permits of each participant to designate the

21  3-year-average use as the maximum permitted quantity.

22         2.  Those permittees who choose not to participate

23  shall continue to operate under the terms and conditions of

24  their existing water-use permits until time for renewal or

25  modification or unless the district exercises its authority

26  under ss. 373.243 and 373.246.

27         (f)  Only those permittees who apply to participate in

28  this program may enter into water-use lease contracts with

29  third parties under this section.

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  1         (g)  By April 3, 2001, the district shall begin issuing

  2  its determinations and notifying permittees who have applied

  3  to participate in the pilot program.

  4         (7)(a)  In addition, persons or entities who develop

  5  new water supplies through techniques including, but not

  6  limited to, aquifer recharge, aquifer storage and recovery,

  7  and surface water reservoirs, must be given the opportunity to

  8  participate in the pilot program under the same procedures and

  9  guidelines as those afforded by subsection (6), and may enter

10  into contractual arrangements to lease the use of all or part

11  of the new water quantities.

12         (b)  The persons or entities specified in paragraph (a)

13  may include existing water-use permittees who either obtain

14  separate water-use permits from the district to withdraw the

15  additional water or are allowed to modify their current

16  permits, or they may be first-time applicants for water-use

17  permits within the Southern Water Use Caution Area.

18         (8)(a)  Notwithstanding s. 373.236(1), the duration of

19  the water-use permits for those permittees who participate in

20  the pilot program shall be extended by an additional 20 years

21  from the date of the first notarized lease, subject to the

22  provisions of ss. 373.243 and 373.246.  For those

23  participating permittees under subsection (7), the minimum

24  duration of their new water-use permits is 20 years.

25         (b)  The district shall modify the extended permit of

26  any existing or new permittee choosing not to participate in

27  the pilot program through nonrenewal of an existing lease, or

28  failure to execute a lease agreement with a new lessee upon

29  expiration of the initial lease, by revoking the 20-year

30  permit extension.

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  1         (c)  Water-use permittees who participate in the pilot

  2  program are not subject to the competing-applications

  3  provisions of s. 373.233 or the local-sources-first

  4  considerations of s. 373.223(3) at the time of permit renewal,

  5  if they meet all other statutory requirements. However,

  6  participants' renewal applications that are filed after the

  7  pilot program has expired are subject to ss. 373.233 and

  8  373.223(3).

  9         (9)  Water-use permittees participating in the program

10  may enter into contracts with third parties to lease all or a

11  portion of their water usage, as determined under subsection

12  (6), or new water created under subsection (7), for

13  consumption within the Southern Water Use Caution Area.  Each

14  contract may be in force for a period not to exceed 5 years

15  and may be renewed. A contract may not be executed or renewed

16  for a term that exceeds the duration of the underlying permit.

17  Each contract must include the following information:

18         (a)  Name, mailing address, and business phone number

19  of the lessor and the lessee;

20         (b)  The location of the water whose use is to be

21  leased and the daily average amount;

22         (c)  The purposes for which the lessee intends to use

23  the water;

24         (d)  The financial consideration to be paid by the

25  lessee for the use of the water;

26         (e)  A statement that the lease amount contracted for

27  does not adversely affect domestic or existing water users;

28         (f)  A statement that the district has the authority to

29  fine permittees who violate the terms of their water-use

30  permits or to modify or revoke the underlying permit under ss.

31  373.243 and 373.246;

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  1         (g)  A requirement that the lessor and the lessee

  2  install meters to monitor the actual water usage and that

  3  quarterly metering reports be submitted to the district by

  4  both parties;

  5         (h)  A statement notifying the lessee that he or she

  6  may be required to obtain environmental resource permits, or

  7  other permits or licenses, depending on the method of

  8  withdrawing and transporting the water; and

  9         (i)  A statement that the holder of the underlying

10  permit is subject to legal action by the district if his or

11  her lessees withdraw more water than allowed under the

12  water-use permit.

13

14  The lessor shall forward a copy of each contract to the

15  Southwest Florida Water Management District before it is

16  executed.

17         (10)(a)  Before executing any lease involving aquifer

18  transfer, the district has 30 days with which to evaluate the

19  lessee's proposed use in the context of its impact on existing

20  users, its impact on local environmental conditions, and

21  whether it is a reasonable-beneficial use. If the district

22  determines the proposed aquifer transfer would create adverse

23  impacts on existing users or adverse localized environmental

24  impacts, or is not a reasonable-beneficial use, the district

25  shall notify the proposed lessor and the lessee by certified

26  mail by the 30th day. The lease may not be executed until the

27  district's concerns are addressed.

28         (b)  If the proposed lessor and lessee are not notified

29  by the district within the 30-day period, the lease is

30  presumed to meet the evaluation criteria and may be executed.

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  1         (11)  If a water-use permittee participating in the

  2  program or a lessee, individually or in combination, withdraws

  3  more water than allowed by the terms of the underlying

  4  water-use permit, the permittee is subject to the following

  5  penalties:

  6         (a)  Upon a first violation of the permitted water

  7  withdrawal amount, the underlying permittee shall be issued a

  8  warning by the district.

  9         (b)  Upon a second violation of the permitted water

10  withdrawal amount within a period of 36 months from the date

11  of the first violation, the underlying permittee is subject to

12  a fine of $1,000 or $1 for every 1,000 gallons of water

13  overpumped, whichever is greater.  These fines shall be

14  collected by the district and deposited into funds for permit

15  enforcement.

16         (c)  Upon a third violation of the permitted water

17  withdrawal amount within a period of 36 months from the date

18  of the first violation, the underlying permittee shall be

19  subject to a fine of $2,000 or $2 for every 1,000 gallons of

20  water overpumped, whichever is greater.  These fines shall be

21  collected by the district and deposited into funds for permit

22  enforcement.

23         (d)  Upon a fourth or subsequent violation of the

24  permitted water withdrawal amount within a period of 36 months

25  from the date of the first violation, the underlying permittee

26  shall be subject to modification or revocation of the existing

27  water-use permit by the district under ss. 373.243 and

28  373.246.

29         (12)  Legal action may not be brought against the

30  district or the state by a lessor or lessee because of breach

31  of contract in a water-transfer lease.

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  1         (13)(a)  A lessee may not transfer outside the Southern

  2  Water Use Caution Area the water obtained under a contract

  3  pursuant to this section.

  4         (b)  A lessee may not enter into an agreement to

  5  further sublease the use of water to another party.

  6         (14)  To reduce the possibility that under this program

  7  water will be stored in order to artificially create

  8  shortages, lessees must begin using the water within 12 months

  9  after the contract is executed.

10         (15)  This section expires March 3, 2015.

11         Section 2.  Subsection (1) of section 373.219, Florida

12  Statutes, is amended to read:

13         373.219  Permits required.--

14         (1)  The governing board or the department may require

15  such permits for consumptive use of water and may impose such

16  reasonable conditions as are necessary to assure that such use

17  is consistent with the overall objectives of the district or

18  department and is not harmful to the water resources of the

19  area. However, a no permit is not shall be required for

20  domestic consumption of water by individual users or for

21  lessees of water contracted from permittees under s. 373.2705.

22         Section 3.  Subsection (1) of section 373.236, Florida

23  Statutes, is amended to read:

24         373.236  Duration of permits; compliance reports.--

25         (1)(a)  With the exception of permits for participants

26  in the water-use leasing pilot program under s. 373.2705, all

27  permits shall be granted for a period of 20 years, if

28  requested for that period of time, if there is sufficient data

29  to provide reasonable assurance that the conditions for permit

30  issuance will be met for the duration of the permit;

31  otherwise, permits may be issued for shorter durations which

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  1  reflect the period for which such reasonable assurances can be

  2  provided. The governing board or the department may base the

  3  duration of permits on a reasonable system of classification

  4  according to source of supply or type of use, or both.

  5         (b)  Permits of participants in the water-use leasing

  6  pilot program shall initially be extended for an additional 20

  7  years. Subsequent renewals of permits of participants in the

  8  program shall be for a duration of 20 years.

  9         Section 4.  Every March 1, beginning in the year 2002,

10  the Southwest Florida Water Management District shall submit a

11  report to the Governor, the President of the Senate, and the

12  Speaker of the House of Representatives detailing the status

13  of the water-use transfer program. The report shall specify,

14  without limitation, the number of participants in the program,

15  the amount of water being transferred, and the environmental

16  effects of the program.

17         Section 5.  This act shall take effect upon becoming a

18  law.

19

20            *****************************************

21                          SENATE SUMMARY

22    Creates a pilot program in the Southern Water Use Caution
      Area of the Southwest Florida Water Management District
23    allowing water-use permittees to lease their allocations
      of water to third parties who would not be required to
24    obtain individual use permits. Provides criteria for
      participation in the pilot program. Provides penalties
25    for overpumping. Requires the water management district
      to annually report on the pilot program.
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