Mark B. TaylorSan Marcos

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Legislative Outlook on Water IssuesOverviewBroader Legislative OutlookWhat issues are in the courts?TCEQ/TWDB Sunset ReviewLegislation

BackgroundGroundwaterSurface WaterFunding

Q & A

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Legislative Outlook on Water Issues

Broader Legislative OutlookTwo major issues will take precedence:

Budget Possible $20-25 billion shortfall Balanced budget required by constitution Will spending cuts or revenue increases impact

water-related agencies?Redistricting

Legislature did not complete this process after the last two censuses; will they succeed this time?

Water-related bills will compete for attention

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Legislative Outlook on Water IssuesWhat issues are in the Courts?Nature of ownership of groundwater – EAA and

State of Texas v. Day and McDaniel (Texas Supreme Court)Is groundwater owned in place, or only when

pumped to the surface? Landowners have argued the former, and

Edwards Aquifer Authority and Attorney General have argued the latter

Ownership in place would curtail ability of groundwater districts to manage production

Ownership at surface would curtail ability of landowners to challenge regulations

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Legislative Outlook on Water IssuesWhat issues are in the Courts?Groundwater management process – Mesa

Water, LP v. TWDB (Travis Co. District Court)Can DFCs be different for different areas of an

aquifer? DFCs based on historic use often mean some areas

get more production per acre than other areas Requiring uniform DFCs across an aquifer can result

in greater depletion, or curtailment of historic usesDoes the groundwater planning process afford

due process for landowners? Decisions are made by administrative bodies and

appealed to state agencies w/o formal hearings5

Legislative Outlook on Water Issues

What issues are in the Courts?Miscellaneous issues

Aransas Project case - Challenge to TCEQ administration of surface water permits as a violation of the Endangered Species Act

Challenges to groundwater district moratoriums on permit applications

Challenges to groundwater district granting or denial of permits on constitutional/other grounds

Challenge to an Oklahoma law prohibiting permits to export water to Texas

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Legislative Outlook on Water IssuesTCEQ/TWDB Sunset ReviewSunset Advisory Commission – 6 senators, 6

House membersSunset process

Agencies have submitted self-evaluationsSunset staff prepares reportsCommission to meet and take testimony

TWDB-Nov. 16; TCEQ: Dec.15 & 16Commission will submit recommendations to

legislature in January 2011Legislature debates and amends the billsBills must pass to continue agencies’ existence

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Legislative Outlook on Water Issues

TCEQ/TWDB Sunset ReviewSunset provides opportunities:

Reorganization of agencies Combining or separating of functions Changes to management structures

Repurposing of agencies Changes in authority Transfers of authority between agencies

Sunset bills are often “vehicles” for enacting unrelated legislation

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Legislative Outlook on Water Issues

TCEQ Sunset ReviewTCEQ self-evaluation – water policy issues: Need to define state’s role in fixing aging damsIncrease funding and authority to enforce

drought contingency plans?Establish statewide watermaster program? (15

major basins w/o watermaster)Require monthly reports of surface water use?Enhance state control over groundwater

districts?

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Legislative Outlook on Water Issues

TWDB Sunset ReviewTWDB self-evaluation – water policy issues:Authority to issue more water project bonds

(requires constitutional amendment)Provide funding for enhanced water

conservation activitiesRevise substance and process of DFC adoption

so a “fuller range” of DFCs is consideredProvide funding to continue environmental

flows process

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Legislative Outlook on Water Issues

TWDB Sunset ReviewSunset staff report - water policy issues:Allow TWDB to issue more water project bonds Increase coordination of GMAs with RPGs for

groundwater planning processStrengthen notice reqmts. for GMA meetingsTransfer appeals of DFCs to TCEQ and allow

contested case hearings on DFCsEnhance reporting standards and data

collection for water conservation activities

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Legislative Outlook on Water IssuesLegislation - Background Legislature has expressed a clear preference

for development of groundwaterSurface water markets suppressed by

interbasin transfer restrictionsGroundwater markets enhanced by rule

prohibiting discrimination against exports Has made rural landowners significant

stakeholders in water markets Has created conflicts among landowners as

available groundwater supplies are developedMay lead to decline in agricultural areas as

groundwater is exported to urban areas

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Legislative Outlook on Water IssuesLegislation - Groundwater Draft bill on groundwater ownership - Texas

Farm Bureau and other landowner groupsRecognition that groundwater is owned in placeMay recognize correlative rights

(apportionment of ownership over the surface area of aquifers)

Draft bills by Texas Water Conservation AssociationClarify definition of “management plans” for

groundwater districts Change MAG from “managed” to “modeled”

available groundwater

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Legislative Outlook on Water IssuesLegislation – Surface water Loosen restrictions on inter-basin transfers?

Level the playing field for transfers of groundwater and surface water

Promote capture/storage of stormwater flows Support for reservoir construction?

E.g., Region C (D/FW region) 2010 Water Plan includes 3 new major reservoirs

Bill designating reservoir sitesState funding support

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Legislative Outlook on Water IssuesLegislation-Funding for water projectsProjects in 2007 Water Plan: $30.7 billionPast funding: State bonds for loans/grantsProposals for State funding :

Apply sales tax to retail water sales13¢ State fee per 1,000 gallons of retail waterIncrease in TCEQ annual fee on surface water

Current fee (8 or 22¢/a-f) - $416,483 in 2006 $1.50/a-f would yield $49.3 million/year

$1 monthly fee on each retail water connectionApply sales tax to bottled water sales

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Legislative Outlook on Water Issues

Source: Texas Water Development Board. and Texas Comptroller of Public Accounts

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Proposed Revenue Sources

Fiscal 2008 Fiscal 2011

State Sales Tax $243,270,000 $266,579,375

State fee/1,000 gal $127,250,019 $130,001,766

Water Rights Fee $49,339,946 $49,339,946

Water Connection Fee

$94,573,104 $97,280,928

Sales Tax on Bottled Water

$78,000,000 $101,750,000

Legislation-Funding for water projects

Legislative Outlook on Water Issues

“All the water that will ever be is, right now.” National Geographic magazine, October 1993

Questions?

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Legislative Outlook on Water IssuesReferences TCEQ self-evaluation to Sunset Commission:

http://www.sunset.state.tx.us/82ndreports/tceq/ser.pdf TWDB self-evaluation to Sunset Commission:

http://www.twdb.state.tx.us/publications/reports/ser_documents/2009/ser.asp

TWDB evaluation by Sunset Commission staff: http://www.sunset.state.tx.us/82ndreports/wdb/wdb_sr.pdf

2009 Report by Comptroller Susan Combs, Liquid Assets: The State of Texas’ Water Resources: http://www.window.state.tx.us/specialrpt/water/stateplan.php

Position paper by Texas Farm Bureau and other associations on groundwater ownership: http://www.groundwaterownership.com/PDF/10-25-2010-Joint-GW-v-3.pdf

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