ACCEPTED 03-14-00416-CV 3781001 THIRD COURT OF APPEALS AUSTIN, TEXAS 1/15/2015 12:12:27 PM JEFFREY D. KYLE CLERK Case No. 03-14-00416-CV IN THE FILED IN 3rd COURT OF APPEALS THIRD COURT OF APPEALS AUSTIN, TEXAS AT AUSTIN, TEXAS 1/15/2015 12:12:27 PM JEFFREY D. KYLE Clerk BRADLEY B. WARE, Appel/ant, v. TEXAS COMMISSION ON ENVIROMENTAL QUALITY, Appellee.

ON APPEAL FROM THE 53RD JUDICIAL DISTRICT COURT OF TRAVIS COUNTY, TEXAS

APPELLANT'S BRIEF

Stephen P. Webb BarNo. 21033800 [email protected] Gwendolyn Hill Webb Bar No. 21026300 [email protected] Attorneys for Appellant Webb & Webb, Attorneys at Law East Seventh Street Austin, Texas 78701 Phone: 512-472-9990 APPELLANT REQUESTS ORAL ARGUMENT Case No. 03-14-00416-CV

BRADLEY B. WARE, Appellant, v. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, Appellee.

IDENTITY OF PARTIES AND COUNSEL

Stephen P. Webb Linda Secord, Asst. Attorney General BarNo. 21033800 Bar No. 1797400 [email protected] Office of the Attorney General Gwendolyn Hill Webb P.O. Box 12548-MC066 State Bar No. 21026300 Austin, Texas 78711-2548 g. [email protected] Phone: 512-475-4002 Webb & Webb, Attorneys at Law Fax: 512-320-0911 East Seventh Street, Suite 712 Linda.secord@texasattorneygenel'al.gov Austin, Texas 78701 ATTORNEY FOR APPELLEE, Phone: 512-472-9990 TEXAS COMISSION ON Fax: 512-472-3183 ENVIROMENTAL QUALITY ATTORNEY FOR APPELLANT, BRADLEY B. WARE Case No. 03-14-00416-CV

BRADLEY B. WARE, Appellant, v. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, Appellee.

REQUEST FOR ORAL ARGUMENT

Appellant, Bradley B. Ware, requests an oral argument in this case.

ii TABLE OF CONTENTS Identify of Parties and Counsel .................................................................................. i Request for Oral Argument ....................................................................................... ii Index of Authorities ................................................................................................. vi Appellant's Brief ........................................................................................................ 1 Statement of the Case ................................................................................................. 2 Statement of Oral Argument ..................................................................................... .4 Points of Error Presented for Review ........................................................................ 4 Statelnent of the Facts ................................................................................................ 5 Background Legal and Factual Framework of Application No. 5594A .................... 7 Points of Error and Brief of Argument ................................................................... 13 Point of Error Number One: The District Court erred in failing to find that the Commission's April 20, 2010 Order unlawfully ignores the evidence of record regarding the water available for appropriation by Plaintiff; therefore, the Commission's action in adopting the April 20,2010 Order was arbitrary and capricious, and was characterized by an abuse of discretion ................................................................................................................ 13 Sumlnary of the ArgUlnent ............................................................................ 13 ArgUlnent.. ..................................................................................................... 13 Point of Error Number Two: The Commission's April 20, 2010 Order violates the directives and requirement of Texas Water Code, §11.134 (b), regarding Commission action on water rights applications .............................................................................................................. 18 Sumlnary of the Argument.. .......................................................................... 18 Argument. ...................................................................................................... 19

iii Point of Error Number Three: The District Court erred in failing to find that the Commission's April 20, 2010 Order is in violation of the requirements of Texas Water Code, §11.1381, regarding the consideration and granting of water rights permits for a term of years ........................................................................................................................ 21 Summary of the Argument ............................................................................ 21 Argument. ................................ :..................................................................... 21

Point of Error Number Four: The District Court in failing to find that the Commission's April 20, 2010 Order violates the fundamental doctrine of water rights law of "first in time, first in right," as set forth in the Texas Water Code, Section 11.027 ................................. 25 Sumtnary of the Argmnent ................................................................................... 26 Argument. ...................................................................................................... 26 Point of Error Number Five: The District Court erred in failing to find that the Commission acted arbitrarily and capriciously to deprive Plaintiff of any continued right to diveti and use any water at any time for Ware Farm under Permit No. 5594, an authorized appropriation, on the stated basis of no water available for appropriation, while at the same time granting water rights for new appropriations and issuing statements of water availability for other Plaintiffs, new permittees, and other water rights holders .... 32 Summary of the Argmnent ............................................................................ 32 Argmnent ....................................................................................................... 33 Point of Error Number Six: The District Comi erred in failing to find that the Commission's April 20, 2010 Order adopted Findings of Fact pertaining to a pending non-party applicant; moreover, the details of said Plaintiff's pending application and proposed iv appropriation were unlawfully used as a basis to deny Plaintiffs water right application ............................................................................................................... 38 SUmtllary of the Argument. ........................................................................... 38 Argument ....................................................................................................... 38 SUtlltllary ................................................................................................................. 42 Prayer for Relief...................................................................................................... 42 Cetiificate of Compliance ....................................................................................... 44 Certificate of Service ............................................................................................... 45 Glossary of Technical Terms .................................................................................. 45 Appendix ................................................................................................................. 46

v INDEX OF AUTHORITIES CASES Balla v. Texas State Board of Medical Examiners, 693 S.W.2d 715-717 (Tex. App. - Dallas 1985, ref.n.v.e) ...................................................................... 41 Berkley v. Railroad Commission of Texas, 282 S.W.3d 240, 242-244 (Tex. App- Amarillo 2009, no pet.h.) .............................................................................. 35 Chocolate Bayou Water Company and Sand Supply v. Texas Natural Resource Conservation Commission, et al., 124 S.W.3d 844, 853 (Tex. App-Austin 2003, pet. denied) .......................................................................................... 29 City of Waco v. Texas Comm'n on Envtl. Quality, 346 S.W.3d 781, 819 - 20 (Tex.App - Austin, pet. denied)] .................................................................. 31 City of El Paso v. Public Utility Com'n. of Texas, 883 S.W.2d 179, 184 (Tex. 1994) ........................................................................................................................ 35 Dodd v. Meno, 857 S.W.2d 575, 576 (Tex. App. - Austin 1993), aff'd on other grounds, 870 S.W.2d 4 (Tex. 1994) .................................................................. 34, 36 Entex v. Railroad Comm., Texas, 18 S.W.3d 858, 862 (Tex. App. - Austin 2000, pet. denied) ...................................................................................... 34, 36, 37 Heritage on San Gabriel Homeowners v. TCEQ, 393 S.W.3d 417, 423 (Tex.App.- Austin 20 12) ................................................................................................. 31 Hernandez v. Meno, 828 S.W.2d 491, 493-495 (Tex. App. - Austin 1992, den.). 40 House of Tobacco, Inc. v. Calvert, 394 S.W.2d 654, 656 - 657 (Tex. 1965) ........ 29 Langford v. Employees Retirement System of Texas, 73 S.W.3d 560, 564-565 (Tex. App. - Austin 2002, pet. denied) .................................................................. 35 Lower Colorado River Authority, et aI, v. Texas Department of Water Resources, 689 S.W. 2d 873 (Tex. 1984) ...................................................................... 24 Railroad Commission of Texas v. Home Transportation Company, 670 S.W.2d 319,325 (Tex. App-Austin 1984, no writ) ................................................... 29 vi Texas Citizens for a Safe Future and Clean Water v. Railroad Commission of Texas, 254 S.W.3d 492, 496-497 (Tex. App. - Austin 2007, pet. filed) ...... 40 Texas Department ofPublic Safety v. Chad Michael Henson (14-09-0001 O-CV) ... 2 Texas Department of Public Safety v. Guajardo, 970 S.W.2d 602 (Tex. App.- Hous. [14 th Dist.] 1998) ................................................................................... 2 Texas Farm Bureau, et al v. Texas Commission on Environmental Quality, Cause No. D-I-GN-12-003937 .......................................................................................... 31 Texas Water Com 'n v. Dellana, 849 S.W.2d 808, 810 (Tex. 1993) ....................... 29 TGS - NOPEC Geophysical Company v. Combs, 268 S.W.3d 637, 651-652 (Tex. App. - Austin 2008, pet. filed) ..................................................................... 35 TEXAS WATER CODE §11.021 .................................................................................................................... 11 §11.022 .................................................................................................................... 11 §11.025 ................................................................................................................... 11 § 11.026 .................................................................................................................... 11 §11.027 .................................................................................................... 4, 25, 26, 27 § 11.046 .................................................................................................................... 11 §11.046(c) ......................................................................................................... 18,33 §11.121 .................................................................................................................... 11 §11.134 ................................................................................................................. 8,11 §11.134(b) ..................................................................................................... 4,18,19 §11.1381 .................................................................................................. 4,11,21,23 §11.141 ............................................................................................ 11, 26, 27, 28, 41 § 11.172 .................................................................................................................... 23 TEXAS GOVERNMENT CODE §2001.005(a) ........................................................................................................... 39 §2001.081 ................................................................................................................ 39 §2001.087 ................................................................................................................ 40 §2001.174(2) ................................................................................................... 39,41 §2001.174(2)(a) ..................................................................................................... 28 §2001.174(2)(c) ..................................................................................................... 39 vii §2001.174(2)(e) ............................................................................................... 18,39 §2001.174(2)(f) ............................................................................................... 35,39 §2001.175 ............................................................................................................... 29 §2003.047(l)(ln) ...................................................................................................... 15

viii Case No. 03-14-00416-CV

BRADLEY B. WARE, Appellant, v. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, Appellee.

APPELLANT'S BRIEF

TO THE COURT OF APPEALS:

Appellant, Bradley B. Ware, submits this Brief in appeal of the Order on administrative appeal affirming the decision of the Texas Quality on Environmental Quality ("TCEQ", "Commission" or "Agency"). This Appeal is from the District Court of Travis County, Texas, 53 rd Judicial District, the Honorable John Dietz presiding in which Appellant was the Plaintiff and Appellee was the Defendant. For clarity, Bradley B. Ware will be referred to as "Plaintiff' and the Texas Quality on Environmental Quality will be referred to as "Defendant." I. STATEMENT OF THE CASE Plaintiff, Bradley B. Ware appeals from the 53 rd Judicial District Court of Travis County, Texas in its failure to overturn the final order of the TCEQ which denied Plaintiff the right to divert and use water under Permit to Appropriate State Water No. 5594 ("Permit No. 5594"). Plaintiff asselis that the Commission's April 20, 2010 Final Order of the TCEQ ("Order") violates extant provisions of the Texas Water Code ("TWC"), and contains obviously reversible legal error. A May 11,2010 decision ofthe Texas Court of Appeals, FOUlieenth District, Houston, in Texas Department of Public Safety v. Chad Michael Henson (14-09-00010-CV) sets forth the standards of judicial review of decisions by an administrative agency.

The text of the discussion is set forth in full below: When reviewing an administrative decision under the substantial evidence rule, the review court may affirm the decision in whole or in part. Tex. Gov't, Code Ann. §2001.174 (Vernon 2008). It [the reviewing cOUli] must reverse or remand the case if the Appellant's substantial rights have been prejudiced because the administrative findings, inferences, conclusions, or decision are: (1) in violation of a constitutional or statutory provision; (2) in excess of the agency's statutory authority; (3) made through an unlawful procedure; (4) affected by other error oflaw; (5) not reasonably suppOlied by substantial evidence when considering the record as a whole; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

APPELLANT'S BRIEF PAGE 2 [Citing and paraphrasing Tex. Gov't. Code §2001.l74 (Vernon 2008), and Texas Department ofPublic Safety v. Guajardo, 970 S.W.2d 602 (Tex.App-Hous. [14 th Dist.] 1998)] Generally, as shown below, the Commission's order is in violation of the fundamental precepts of the Constitution of the United States (5 th and 14th Amendments) and the Texas Constitution (Art. 1, Bill of Rights, Sections 3 and 19), the Texas Water Code and the Texas Government Code; is in excess of the Commission's statutory authority; is made through unlawful procedure; is affected by numerous other errors of law; is not reasonably supported by substantial evidence when considering the record as a whole; and is on its face arbitrary, capricious, and characterized by abuse of discretion, or clearly unwarranted exercise of discretion. The Commission's final order is not entitled to the deference that agency decisions are typically afforded in a simple substantial evidence revIew.

Put simply, the Commission's April 20, 2010 Order is subject to reversal because it finds and concludes that there is water available for appropriation in the Brazos River Basin in the form of return flows, but reserves the available water to a pending Applicant-- not an existing appropriator-- and denies water availability in the current proceeding, against the substantial evidence of record. Th~ trial court el'l'ed in failing to recognize these deficiencies in the Commission's April 20, 2010

APPELLANT'S BRIEF PAGE 3 Order and erred in rendering its June 11, 2014 order which denied Plaintiffs appeal.

II. STATEMENT OF ORAL ARGUEMENT Plaintiff requests oral argument due to the size and complexity of the record and the numerous factual and legal issues. Plaintiff requests oral arguments to property address the points of error.

III. POINTS OF ERROR PRESENTED FOR REVIEW Point of Error One: The District Court erred in failing to find that the Commission's April 20, 2010 Order unlawfully ignores the evidence of record regarding the water available for appropriation by Plaintiff; therefore, the Commission's action in adopting the April 20,2010 Order was arbitrary and capricious, and was characterized by an abuse of discretion.

Point of Error Two: The Commission's April 20, 2010 Order violates the directives and requirements of Texas Water Code, §11.l34(b), regarding Commission action on water rights applications.

Point of Error Three: The District COUlt erred in failing to find that the Commission's April 20, 2010 Order is in violation of the requirements of Texas Water Code, §11.l381, regarding the consideration and granting of water rights permits for a term of years.

Point of Error Four: The District COUlt in failing to find that the Commission's April 20, 2010 Order violates the fundamental doctrine of water rights law of "first in time, first in right," as set forth in the Texas Water Code, Section 11.027.

APPELLANT'S BRIEF PAGE 4 Point of Error Five: The District Court erred in failing to find that the Commission acted arbitrarily and capriciously to deprive Plaintiff of any continued right to divelt and use any water at any time for Ware Farm under Permit No. 5594, an authorized appropriation, on the stated basis of no water available for appropriation, while at the same time granting water rights for new appropriations and issuing statements of water availability for other Plaintiffs, new permittees, and other water rights holders.

Point of Error Six: The District Court erred in failing to find that the Commission's April 20, 2010 Order adopted Findings of Fact pertaining to a pending non-patty applicant; Moreover, the details of said Plaintiff's pending application and proposed appropriation were unlawfully used as a basis to deny Plaintiff's water right application.

IV. STATEMENT OF FACTS 1. On November 15, 2005, Plaintiff filed Application for Amendment to a Water Right No. 5594A ("Application No. 5594A") with the Agency for authority to delete or extend the term of his current water rights Permit No. 5594, which authorized the appropriation of 130 acre-feet of water for agricultural purposes from the Lampasas River, so that Plaintiff could continue to operate a family farm that has been owned and operated by the Ware family in excess of 100 years. Mr. Ware's timely applications was to: (1) either extend his Permit for another 10-year period or convelt his Permit to a perpetual right, (2) withdraw 20 more acre-feet of water annually and (3) irrigate 31 more acres of his farm. Therefore, Plaintiff applied for a perpetual water right, and if that was not possible, the renewal of his term permit. A true copy of the Plaintiff's application is attached as Exhibit A and is fully incorporated into this brief by reference; Clerk's Record p. 63- 75.

2. On October 28 and 29, 2009, an adjudicative hearing was held on the Agency's case number 2008-0181-WR (SOAR Docket No. XXX-XX-XXXX), before the State Office of Administrative Hearings ("SOAH") on the Plaintiff's application. The Executive Director ("ED") of the TCEQ appeared in Application No. 5594A as a patty to the hearing, opposing the relief sought by the Plaintiff. In connection with the adjudicative hearing, a record was made consisting of all pleadings and evidence introduced before

APPELLANT'S BRIEF PAGES SOAR. Thereafter, the TCEQ considered the Proposal for Decision of Administrative Law Judge ("ALJ") Paul Keeper on April 14, 2010.

Subsequently, the Agency prepared a final decision, represented by its Final Order including its Findings of Fact and Conclusions of Law.

3. On April 20, 2010, the Agency rendered its decision in the form of AN ORDER Concerning the Application of Bradley B. Ware to amend water use Permit No. 5594: TCEQ Docket No. 2008-0181-WR; SOAH Docket No. 582- 08-1698 and denied Plaintiffs Application No. 5594A to delete or extend the term of the current permit and also to authorize the appropriation of an additional 20 acre-feet of water per annum.

4. The Plaintiff timely filed a Motion for Rehearing ("Motion") to the Agency's April 20, 2010 Order, and the Motion was overruled by operation of law by the Agency when the TCEQ failed to act on Plaintiffs Motion (See Exhibit B, Applicant Bradley B Ware's Motion for Rehearing, exhibits not attached; Clerk's Record p. 76-98). Notice of the Agency's inaction was provided to the Plaintiff on June 17, 2010.

5. The Plaintifftimely filed his appeal to the Travis County District Court on July 8, 2010.

6. All conditions precedent having been performed 01' having occurred, the Plaintiff was entitled to judicial review of the Agency's decision in accordance with Texas Water Code §11.134 and the Texas Government Code, §§2001.175 and 2001.176.

7. On June 11,2014, the District Court issued its order which denied Plaintiffs appeal ofthe Commission Order.

8. On June 30, 2014, Plaintiff filed his Notice of Appeal.

APPELLANT'S BRIEF PAGE 6 V. BACKGROUND LEGAL AND FACTUAL FRAMEWORK OF APPLICATION NO. 5594A

1. Application No. 5594A This application, designated Application No. 5594A by the ED of the TCEQ and a party to the administrative hearing, is a water rights application by Plaintiff Bradley B. Ware on behalf of Ware Farms, seeking to renew 01' delete the 10 year term of his water rights Permit No. 5594. Plaintiff's existing water rights Permit No. 5594 was granted November 7, 1997 after no person protested the granting the of application (See, Exhibit A's attachment, Permit No. 5594; Clerk's Record p. 65-66), and authorizes the diversion and use of 130 acre-feet of water for agricultural purposes for the irrigation of 100 acres of farmland. Permit No. 5594 also contains the following SPECIAL CONDITIONS: b. The authorization to divert and use 130 acre-feet of water per year shall expire and become null and void on November 7, 2007 unless prior to such date permittee applies for an extension hereof and such application is subsequently granted for an additional term 01' in perpetuity. The priority date of this permit and all extensions hereof shall be July 1, 1997.

Plaintiff filed Application No. 5594A on November 17, 2005, and the application was declared administratively complete on March 20, 2006. In Application No. 5594A, Plaintiff sought to add an additional 20 acre-feet of water per annum, and

APPELLANT'S BRIEF PAGE 7 to extend the term of the permit. Notice of Application No. 5594A advised Brazos River Basin water rights holders: "Applicant seeks to amend Water Use Permit No. 5594', to extend or delete the expiration date of November 7, 2007; add an additional 31 acres for irrigation in Bell County, and to divert and use an additional 20 acre-feet of water."

In reviewing the application, the Agency Executive Director's Water Availability staff informed Plaintiff repeatedly that the results from the Brazos River Basin Water Availability Model ("Brazos WAM" or "WAM") showed that water was not available for the proposed application at Plaintiffs diversion point on the Lampasas River in the Brazos River Basin. Plaintiff elected to go forward with a contested case hearing.

2. Background ofthe Water Availability Question Plaintiffs water rights application began as a simple question of water availability and protection of senior and superior water rights in the Brazos River Basin under Texas Water Code, §11.1342 . Plaintiff was the owner of a term pennit and applied for a renewal. The Executive Director used the Brazos WAM and determined that water was not available in sufficient quantities and with sufficient

, Although the Notice prepared by the Executive Director and issued by the Chief Clerk refers to Plaintiffs water rights permit as a "Water Use Permit," Permit No. 5594, issued by the Commission is entitled, "PERMIT TO APPROPRIATE AND USE STATE WATER." All section references in this brief are to the Texas Water Code, unless otherwise noted.

APPELLANT'S BRIEF PAGES frequency to justify granting the application for an additional term. Brazos River Authority ("BRA"), holder of senior water rights in the Brazos River Basin protested the application at first, stating that it did not object to the issuance of the permit for an additional term and with an additional 20 acre-feet. BRA later withdrew its protest of the application, before the contested case hearing, See correspondence attached as Exhibit C; Clerk's Record p. 100.

3. The Doctrine of Prior Appropriation as the Cornerstone of Texas Water Code, Chapter 11 Texas water rights are issued pursuant to the principles of Western water law, including the doctrine of prior appropriation, which is codified in Texas Water Code, Chapter 11. The legal principles of Western water law, which grew out of the experience of the development of the American West, where water was a scarce and valuable resource. The doctrine of prior appropriation suppOlis the concepts of govermnent oversight of water resources, deemed essential to promoting the beneficial use of available water in accordance with the public welfare. Originally, water rights were given not only based on application to the State in the form of a certified filing, but also based on proximity of land to a watercourse. Unfortunately, this dual system was deemed to preclude efficient government regulation, and the existing riparian rights, certified filings and water rights permits were unified during the water rights adjudication. Claims under

APPELLANT'S BRIEF PAGE 9 riparian rights, certified filings, and permits were replaced by certificates of adjudication, and subsequent water rights issued under the permitting system set forth in Chapter 11. Plaintiff testified at his hearing that, although water was used on his farm by his great grandfather since 1874 (See Exhibit D, Tr. Vol. 13, p. 19, line 6 through p. 20, line 4; Clerk's Record p. 102-103 and Tr. Vol. 1, p. 22, line through p. 23, line 3; Clerk's Record p. 105-106.), his parents were involved in a bitter divorce which diverted their attention from paliicipation in water rights adjudication (See Exhibit D, Tl'. Vol. 14, p. 21, line 14 through p.22, line 17; Clerk's Record p. 104-105). After the completion of the Adjudication of Water Rights in all segments of the Brazos River Basin, Ware Farm was left without any adjudicated right to appropriate State water. Consequently, after Plaintiff became owner of Ware Farm, he sought the means to keep the farm operating as a going concern, including farming crops such as pumpkins and hay for grazing and raising cattle. In 1997, Plaintiff obtained a water right, Permit No. 5594, which authorized water use for a term often (10) years (See Exhibit D, Vol. 1, p. 45, line 3 through p. 47, line 8; Clerk's Record p. 107-109).

Although Texas water rights permitting has evolved from a regulatory standpoint in the time period following Water Rights Adjudication, the

3In this brief, references to the transcript are designated: Tr. Vol. _, p. _, line _; and followed by the Clerk's Record page reference.

APPELLANT'S BRIEF PAGE 10 fundamental doctrine of the prior appropriation system remains embedded in Texas water rights. Those principles are enunciated specifically in the following sections of Texas Water Code, Chapter 11: § 11.021, State Water - Asserts State sovereignty over the surface waters ofthe State in watercourses § 11.022, Acquisition of Right to Use State Water - Provides for the use of State water by authorized appropriators; § 11.025, Scope of Appropriative Right - Sets forth the limitations of the appropriative rights; § 11.026, Perfection of an Appropriation - Provides for perfection of an appropriation by beneficial use in accordance with the permit; § 11.027, Rights Between Appropriators - Provides for resolution of conflict between appropriators on the basis of "first in time is first in right;" § 11.046, Return Surplus Water - Provides that water authorized to be appropriated but not needed for the authorized use be returned to the watercourse for further appropriation and for other uses; § 11.121, Pennit Required - Requires the issuance of water rights permits to authorize appropriation § 11.134, Action on Application - Specifies the conditions under which the Commission may grant a water rights permit; § 11.1381, Term Permits - Establishes a means for issuance of term permits; and § 11.141, Date of Priority - Establishes the priority date for water rights permits as the date the application was filed.

APPELLANT'S BRIEF PAGE 11 Taken as whole, the provisions of the Texas Water Code establish the regulatory framework for the administration of Texas water rights.

4. Permit No. 5594 Implements Prior Appropriation Doctrine Plaintiff's Permit No. 5594 embodies the principles of prior appropriation set forth in the Texas Water Code. Permit No. 5594 specifies the purpose of use (irrigation); the location ofland to be irrigated [100 acres ofland out of261 acres in the W. Brown Survey, Abstract No. 67, the D.G. Vicheton (Vecheton) Survey Abstract No. 851, and the C. Edwards Survey, Abstract 291 in Bell County, Texas; the water course which is the source of water (Lampasas River, tributary of the Little River, tributary of the Brazos River); the amount of water authorized to be used (130 acre-feet); and the diversion point and diversion rate (2.67 cubic feet per second ("cfs") or 1200 gallons per minute ("gpm")) from any point on the left or east bank of the Lampasas River]. And, the permit was issued in accordance with the provisions of § 11.1381 to allow Ware Farm to make beneficial use of State water in the Brazos River Basin which was stated to be present in the stream but appropriated to others and which would otherwise go unused until senior water rights are perfected 5• The priority date is specified as the date the application was

5 The Executive Director's August 28, 1997 Water Availability Analysis (Exhibit F; Clerk's Record p. 164-178), stated that downstream water rights in the vicinity of Ware Farm on the Lampasas River, the Little River, and the Brazos River had not been perfected, or "fully developed," and that, "Therefore, the hydrological analysis only suPPOtt issuance of a ten year term permit for the Plaintiff." (Exhibit F, more specifically Clerk's Record p. 165)

APPELLANT'S BRIEF PAGE 12 accepted for filing. Finally, under the doctrine of "First in time is first in right," the Plaintiff's term permit states unequivocally that the priority date for the permit "and all extensions hereof shall be July 1,1997." VI. POINTS OF ERROR AND BRIEF OF ARGUMENT 1. POINT OF ERROR NUMBER ONE.

THE DISTRlCT COURT ERRED IN FAILING TO FIND THAT THE COMMISSION'S APRlL 20, 2010 ORDER UNLAWFULLY IGNORES THE EVIDENCE OF RECORD REGARDING THE WATER AVAILABLE FOR APPROPRlATION BY PLAINTIFF; THEREFORE, THE COMMISSION'S ACTION IN ADOPTING THE APRlL 20, 2010 ORDER WAS ARBITRARY AND CAPRlCIOUS, AND WAS CHARACTERlZED BY AN ABUSE OF DISCRETION.

Summmy ofArgument The Commission's Order of April 20, 2010 was based upon its staff's refusal to consider record evidence that completely contradicted the evidence upon which the staff and the agency relied to make its primary determination. The primary issue in Plaintiff's application for a perpetual right was whether there was state water available for appropriation in Plaintiff's section of the Brazos River Basin.

The agency's Executive Director performed a November 14, 2006 analysis that concluded there was no water available. The record shows that the same Executive Director performed a 2008 updated analysis on the entire Brazos River basin and found on an additional 74, 387 acre-feet per year available for appropriation. The Commission never resolved, on the record, the contradiction between these factual determinations.

APPELLANT'S BRIEF PAGE 13 Argument The adopted Findings of Fact regarding water availability and "The reliability of the Model" in the Commission's April 20, 2010 Order, attached as Exhibit E (Clerk's Record p. 146-463) are, on their face, inconsistent with each other, directly contrary to the evidence of record, and founded upon unlawful procedure. While the Commission is entitled to draw an appropriate inference from the substantial evidence of record regarding water availability in the Brazos River Basin, the Commission is not entitled to abuse its discretion by disregarding the existing evidence of record concerning water availability in favor of outdated evidence known to be inaccurate.

On November 14, 2006, the Executive Director performed a water availability review of Mr. Ware's amendment application using the Commission's Brazos WAM which was current and accurate at the time it was performed. See, Exhibit G (Clerk's Record p. 179-181), attached hereto. Two years later, however, the Executive Director preformed another water availability review of the Brazos River Basin using updated information which was not available at the time Mr. Ware's application was reviewed. The Executive Director updated the Brazos WAM's Current Conditions data set and found that there was an additional 74,387 acre-feet per year available for appropriation in the Brazos River Basin. See, Exhibit H (Clerk's Record p. 182-196), also attached hereto.

APPELLANT'S BRIEF PAGE 14 It is undisputed in the record that Mr. Ware's amendment application did not benefit from the Executive Director's 2008 update of the Brazos WAM, which occurred well before the contested case hearing on Plaintiff's Application No. 5594A. The Executive Director's staff hydrologist, Jeffrey Charles Thomas, testified at the hearing that neither he nor anyone else in the Executive Director's office performed a water availability review of Mr. Ware's application, other than the one completed on November 14, 2006 and included in Exhibit H (Clerk's Record p. 182-196). The same witness also testified that no portion of the 74,387 acre-feet found to be available in the Brazos River Basin in 2008 and set fOlih in Exhibit H (Clerk's Record p. 182-196) was ever applied to Mr. Ware's application or the Executive Director's analysis of water availability for the Ware application6 .

In considering the Plaintiff's argument regarding water availability based on return flows and updated information, the Commissioners appeared to believe that their questioning of Commission staff during the April 14, 2010 Commission Agenda meeting on the Proposal for Decision on Application No. 5594A regarding consideration of return flows and water availability was a lawful substitute for the evidence of record. This procedure is not lawful. The Commission's decision must be based on the evidence of record, not the earnest responses of Commission staff at Agenda, which responses are not contained in the administrative record 6(Attached as Exhibit D, Tr. Vol. 1 p. 109 line 6 - 110 line 8; Clerk's Record 112-113; and pp.

134 line 9 -154 line 24; Clerk's Record p. 125-145)

APPELLANT'S BRIEF PAGE 15 upon which the decision must be based? TCEQ staff hydrologist Kathy Alexander, (now Ph.D.) responded to Commission inquiries stating that the Executive Director had included the return flows shown on Exhibit H, attached hereto, in its consideration of water available for Plaintiff's proposed appropriation. .This statement is directly contr(lry to the testimony of TCEQ staff during the hearing, including Dr. Alexander, regarding the consideration of 74,384 acre-feet of water shown to be available in the updated Current Conditions data set of the Brazos WAM. The evidence of record, as shown in an excerpt of the official transcript, is set fOlih below.

CROSS EXAMINATION OF JEFFREY CHARLES THOMAS, TCEQ HYDROLOGIST ON THE BRADLEY B. WARE APPLICATION Transcript, Bradley B. Ware SOAH Contested Case Hearing October 28, 2009, Page 149, line 24 to Page 150, line 2: Q. Okay, the point is you didn't use any portion of that additional water in the basin in your model?

A. That's correct.

Transcript, Bradley B. Ware SOAH Contested Case Hearing October 28, 2009, Page 150, lines 10 through 19: Q. Additional unappropriated water would benefit the entire basin, wouldn't it?

A. Yes.

Q. And so it doesn't matter whether it's above Stillhouse Hollow Lake, below it? It would benefit everyone, wouldn't it?

7 Texas Gov. Code §2003.047(l)(m)

APPELLANT'S BRIEF PAGE 16 A. It would benefit everyone downstream of it and potentially that-yes, I can-say that it would benefit everyone in the basin, yes.

CROSS EXAMINATION OF KATHY ALEXANDER, TCEQ HYDROLOGIST EXECUTIVE DIRECTOR'S REBUTTAL WITNESS ON THE BRADLEY B.

WARE APPLICATION Transcript, Bradley B. Ware SOAH Contested Case Hearing October 29, 2009, Page 378, line 15 to Page 379, line 8: Q. Okay. And so there were return flows available and you gave them a priority date of October 15, 2004?

A. Yes.

Q. Okay. You mentioned that there were 74,387 acre-feet of return flows resulting from different discharges up and down the Brazos River Basin determined to be available by TCEQ hydrology?

A. Yes.

Q. And those are the return flows that were given the October 15, 2004, priority date?

A. Yes.

Q. Okay. And that-and none of those return flows, not any portion of them were allocated for use by Mr. Ware under either a 1997 priority date or any other priority date?

A. The return flows were considered and - Q. Yes or no, Ms. Alexander.

A. No. Therefore, to the extent that the Commission's April 20, 2010 Order contains Findings of Fact which state that water is not available for continued appropriation in the Brazos River Basin, under the Brazos WAM, such Findings of Fact are not reasonably supported by substantial evidence when considering the record as a whole. Exhibit H (Clerk's Record p. 182-196) shows that 74,387 acre-feet of water

APPELLANT'S BRIEF PAGE 17 per year are available in the Brazos River Basin in the latest version of the Brazos WAM. 8 Texas law does not confer upon the Commission discretion to disregard the evidence ofrecord. Tex. Gov't Code, §2001.174(2)(E) requires a reviewing court to reverse an order of the Commission that is not reasonably supported by substantial evidence considering the reliable probative evidence in the record as a whole. The only reliable evidence is that Mr. Ware's application never received a water availability review which referenced the amount of water now known to be available for appropriation in the Brazos River Basin. The Commission's reliance on the outdated water availability information included in Exhibit H (Clerk's Record p. 182-196), known to be superseded by more reliable and updated information in Exhibit H (Clerk's Record p. 182-196) deprives the Commission's April 20, 2010 Order of any legitimacy under the law and constitutes an obvious abuse of the Commission's discretion.

2. POINT OF ERROR NUMBER TWO.

THE COMMISSION'S APRIL 20, 2010 ORDER VIOLATES THE DIRECTIVES AND REQUIREMENTS OF TEXAS WATER CODE, § 11.134(B), REGARDING COMMISSION ACTION ON WATER RIGHTS APPLICATIONS.

8The Commission was only willing to use the evidence of water availability under the Brazos WAM in favor of an application filed by Brazos River Authority, as shown in its adoption of Findings of Fact Nos. 42-52.

APPELLANT'S BRIEF PAGE 18 Summmy ofArgument The Commission's April 20, 2012 Order fails to comply with Texas Water Code § 11.134(b). Under the agency's erroneous construction of Texas Water Code § 11.046(c), the Commission specifically and erroneously "reserves" state water that was available for appropriation for a subsequent pending applicant, rather than a senior water right holder.

Argument Pertinent requirements of Texas Water Code, § 11.134(b) is: (b) The Commission shall grant the application only if: (1) the application conforms to the requirements prescribed by this chapter and is accompanied by the prescribed fee; (2) unappropriated water is available in the source of supply; (3) the proposed appropriation: (A) is intended for a beneficial use; (B) does not impair existing water rights or vested riparian rights; (C) is not detrimental to the public welfare; (D) considers any applicable environmental flow standards established under Section 11.1471 and, if applicable, the assessments performed under Sections 11.147(d) and (e) and Sections 11.150, 11.151, and 11.152; and (E) addresses a water supply need in a manner that is consistent with the state water plan and the relevant approved regional water plan for any area in which the proposed appropriation is located, unless the commission determines that conditions warrant waiver of this requirement; and

APPELLANT'S BRIEF PAGE 19 (4) The Applicant has provided evidence that reasonable diligence will be used to avoid waste and achieve water conservation as defined by Section 11.002(8) (B).

The Findings of Fact and Conclusions of Law in the Commission's April 20, 2010 Order do not address the requirements of Texas Water Code, §11.134(b). To the extent that the Conclusions of Law ultimately denying Application No. 5594A flow from the Findings of Fact regarding water available for appropriation in the Brazos River Basin, they are not reasonably supported by substantial evidence when considering the record as a whole; are arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Moreover, the Commission's Apri120, 2010 Order also violates Texas Water Code, §11.134(b) as well. The Commission's Order states: 44. The addition of "new water," [return flows] if it were proved to exist, would be subject to all prior appropriation rights of senior water rights holder and could not be treated as available for new allocation.

Finding of Fact No. 44 clearly fails to incorporate the most recent amendments to §11.046(c) as discussed herein below. Finding of Fact No. 44 presents an unlawful interpretation of Commission requirements under Texas Water Code, §11.134(b), which is only highlighted by the subsequent contradictory finding that: .

45. The full amount [described in Finding of Fact No. 49 as 421,449 acre-feet of water pel' year] of the Brazos River Authority's requested return flows become available only at the furthest downstream point m the basin; diversions at other APPELLANT'S BRIEF PAGE 20 points are possible due to specific facts and circumstances of that application.

The Commission is charged with granting water rights applications when it finds that water is available for appropriation. Instead of discharging its statutory responsibilities in accordance with Texas Water Code, § 11. 134(b), and granting Plaintiff a continued right to appropriate 150 Acre-feet of water dating from his July 1, 1997 priority date, the Commission's April 20, 2010 Order "allocated" the water available for appropriation in the Brazos River Basin to a subsequent applicant, BRA, in an application yet to be completed at SOAR, even as of the date of this appeal to the Court of Appeals.

3. POINT OF ERROR NUMBER THREE.

THE DISTRlCT COURT ERRED IN FAILING TO FIND THAT THE COMMISSION'S APRIL 20, 2010 ORDER IS IN VIOLATION OF THE REQUIREMENTS OF TEXAS WATER CODE, §11.138l, REGARDING THE CONSIDERATION AND GRANTING OF WATER RIGHTS PERMITS FOR A TERM OF YEARS.

SUlnmmy ofArgument

The Commission's April 20, 2010 Order fails to comply with Texas Water Code § 11.1381, regarding an appropriation of state water for a term of years. The Commission inappropriately evaluated Plaintiff's application, that included a

APPELLANT'S BRIEF PAGE2! request to renew his term permit, in consideration of its impact on a pending applicant, rather than a senior water right holder.

Argument

Texas Water Code §11.1381 states: Sec. 11.1381. TERM PERMITS. (a) Until a water right is perfected to the full extent provided by Section 11.026 of this code, the commission may issue permits for a term of years for use of state water to which a senior water right has not been perfected.

(b) The commission shall refuse to grant an application for a permit under this section ifthe commission finds that there is a substantial likelihood that the issuance of the permit will jeopardize financial commitments made for water projects that have been built or that are being built to optimally develop the water resources of the area.

(c) The commission shall refuse to grant an application for a term permit if the holder of the senior appropriative water right can demonstrate that the issuance of the term permit would prohibit the senior appropriative water right holder from beneficially using the senior rights during the term of the term permit. Such demonstration will be made using reasonable projections based on accepted methods.

(d) A permit issued under this section is subordinate to any senior appropriative water rights.

Accordingly, even the Commission's unlawful recognition of the availability of return flows in the Brazos River Basin, albeit solely for use under BRA's pending water rights application, is unspoken Commission recognition that the

APPELLANT'S BRIEF PAGE 22 evidence of record shows there is water available for appropriation for Plaintiffs diversion and use, at least for a term of years. BRA still has only a pending application for a proposed appropriation. The water that the Commission's April 20, 2010 Order finds available for that proposed appropriation by BRA is, by definition, available to Plaintiff under his 1997 priority date before any new appropriation by BRA with a 2004 priority date is authorized by the Commission.

Additionally, the evidence of record is that BRA is using only 20% of its existing Stillhouse Hollow Lake water right, the closest and most pertinent water right to Plaintiff. Tex. Water Code §11.1381 requires the holder of a senior appropriative water right to "demonstrate that the issuance of a term permit would prohibit the senior appropriative water right holder from beneficially using the senior right during the term of the term permit." In this case, there was no senior apptopriator party-- BRA withdrew; And, there could have been no demonstration of harm to BRA because it only has a pending application, not any right to appropriate the 421,449 acre-feet per year of return flows found to be available for appropriation in the Brazos River Basin under the Commission's April 20, 2010 Order. There was no demonstration ofhann to any other existing water rights holder in the Brazos River Basin, on the facts of record in this contested case hearing.

APPELLANT'S BRIEF PAGE 23 In this case, the TCEQ is essentially implementing a cancellation program for term permits. The problem with the TCEQ's program is that through the Texas Water Code, the Texas Legislature has authorized the Commission to cancel permits for failure to put all or a part of the water to beneficial use for ten (10) years or more. (See, Texas Water Code, § 11. 1729) This is the same directive given by the Texas Supreme Court in reviewing actions of the predecessor agency to the TCEQ in the "Stacy Dam case," Lower Colorado River Authority, et aI, v. Texas Department of Water Resources, 689 S.W. 2d 873 (Tex. 1984), the most recent comprehensive review on water law in this State. In that case, just as in the case at bar, we are all called to consider the issue of how to make the best use of the state's resources during times of water shortage, when questions of water availability become most pronounced.

The problem with the Commission's actions in this case, is that TCEQ attempts to effect a cancellation of a water right by a party who the evidence of record shows has put the water to beneficial use in the last ten years. In the "Stacy Dam case," the Texas Supreme Court told the TCEQ that it had to honor appropriations in accordance with the prior appropriation system of the Texas Water Code. Specifically, the Texas Supreme Court stated:

9 Sec. 11.172.' GENERAL PRINCIPLE. A permit, certified filing, or certificate of adjudication is subject to cancellation in whole or part for 10 years nonuse as provided by this subchapter.

APPELLANT'S BRIEF PAGE 24 Section 11.146(e), by providing that water granted under any permit is not again subject to a new permit to appropriate until the permit has been cancelled in whole or in part, is consistent with the overall legislative purpose [of providing security for investors that water needed for a project will be there when the proj ect is built].

Id, at p. 877.

In other words, under extant provisions of the Texas Water Code, the TCEQ has two avenues to provide for water for additional appropriation: (1) It can make use of surplus water returned to the stream in the form of return flows after use by authorized appropriators under Texas; or (2) It can undertake a cancellation program as specified in Texas Water Code, Chapter 11, Subchapter E. Cancellation of Permits, Certified Filings, and Certificates of Adjudication for Nonuse.

In order to grant new water rights and provide for a growing Texas economy, the TCEQ must cancel water rights-that is, de-appropriate the water-ii'om people who are not using the water. The problem, with the current TCEQ practice of changing priority dates and cancelling term permits is that the Agency seeks to cancel water rights of people who are using their water, in favor of those who have yet to be authorized to use the return flows made available under Texas Water Code, § 11.046. In other words, instead of following the Stacy Dam case directive to consider only water not subject to a duly issued Permit to Appropriate State Water, the TCEQ seeks to impose an unofficial "back door" cancellation program

APPELLANT'S BRIEF PAGE2S of water rights which were issued for a term of years, even where the permittees are seeking to continue to use the water as originally authorized, and even though additional water in the form of return flows has become available legally to satisfy that continued use.

4. POINT OF ERROR NUMBER FOUR.

THE DISTRICT COURT IN FAILING TO FIND THAT THE COMMISSION'S APRIL 20, 2010 ORDER VIOLATES THE FUNDAMENTAL DOCTRINE OF WATER RIGHTS LAW OF "FIRST IN TIME, FIRST IN RIGHT," AS SET FORTH IN THE TEXAS WATER CODE, SECTION 11.027.

Summmy ofArgument The Commission's April 20, 2012 Order violates the doctrine of prior appropriation and is based upon an unlawful procedure that was prejudicial to the Plaintiff. Under Texas Water Code § 11.141, the Commission is obligated to use the priority date of the applicant to determine the availability of state water for appropriation. Plaintiff filed an application that should have been given a July 1, 1997, based on a previous order of the Commission. The agency order which set Plaintiff's priority date was final order over which the Commission had lost jurisdiction. Without notice to the Plaintiff or opportunity for him to protest, the Commission's staff changed the priority date of Plaintiff's application to Janumy 5, 2006. Then, the agency compared this "new" priority date unfavorably to the

APPELLANT'S BRIEF PAGE 26 2004 priority rate of a pending applicant. The Commission's order is unlawful and is based on unlawful procedure.

Argument Texas water law established long ago the prior appropriation doctrine of "first in time, first in right" to resolve disputes between appropriators and potential appropriators of State water. The Texas Legislature codified the doctrine in the Texas Water Code, § 11.027 and fUliher defined the priority of an appropriation at Texas Water Code, §I1.I41. When the Commission issued Mr. Ware's original Permit No. 5594 to "Appropriate and Use State Water" in 1997, the Commission's inclusion of Special Condition 3(b) merely memorializes the "first in time first in right" doctrine in Texas Water Code, §I1.027 and § 11.141. Special Condition 3(b) states, unequivocally: "The priority date of this permit and all extensions hereof shall be July 1, 1997." Sections 11.027 and 11.141 protect the appropriation of State water, not an application for an appropriation, or for a proposed appropriation of State water.

The intent of the Texas Water Code is obvious, on this point. The priority date of July 1, 1997 included in Permit No. 5594 establishes the priority of Plaintiff's appropriation; Tex. Water Code, §I1.14I states: Sec. 11.141. DATE OF PRIORITY. When the commIssIon issues a permit, the priority of the appropriation of water and the claimant's right to use the water date from the date of filing of the application.

APPELLANT'S BRIEF PAGE 27 The priority date applies to the original appropriation, regardless of whether the appropriation is authorized for a term of years or in perpetuity.lO Where the appropriation is perpetual, the date of the original application, and the priority date would not change. When the appropriation is for a term of years, necessitating re- application if the appropriator wished to retain the water right, there could be confusion about which "application" date controlled. Logically, on a renewal of an existing appropriation it would remain the date of the original application.

However, the Commission in 1997 eliminated all confusion and ambiguity by expressly and correctly interpreting Texas Water Law and including Special Condition 3(b) ofpermit No. 5594.

When the Executive Director and, ultimately, the Commission, changed Mr. Ware's priority date to January 5, 2006 (Finding of Fact 48) the action violated §11.141 of the Water Code and §2001.174(2)(A) of the Government Code. The exact process of "changing" a final order of a state agency where the agency had lost jurisdiction over the contested case years before, was never explained during the hearing. The record shows that the Commission's Executive Director's Staff never notified Plaintiff that is had changed his 1997 priority date when it did so "administratively." When the Executive Director's representative was pressed

to In water rights, this is known as the "doctrine of relation back," meaning the right to appropriate relates to the first point in time (as ofthe date of the completed application) that the state could have authorized the appropriation.

APPELLANT'S BRIEF PAGE2S about the procedure, or the exact nature of the "policy" that was used to change Plaintiff s priority date, the witness could not answer the questioning". In fact, the presiding SOAH ALJ prevented fUliher questioning about this important factor in the Agency's pre-hearing consideration of Plaintiffs application l2 • Because the record could not be completed, whether it was because of the limitations of the Executive Director's representative, or the failure of the witness to know the policy used to change Mr. Ware's permit, the Court is allowed to examine the TCEQ procedural irregularities that occurred within the Executive Director's Office. [Tex. Gov't Code §2001.175; See Tex. Water Com 'n v. Del/ana, 849 S.W.2d 808,810 (Tex. 1993)] The record is clear that the Commission's Executive Director's staff did not model 13 or determine water availability to meet the requests in Mr. Ware's amendment application with a 1997 priority date. Therefore, the Commission's administrative record lacks competent evidentiary support for a determination of available water in the Brazos River Basin if the staff had modeled Plaintiffs application correctly.

11 (Attached as Exhibit D, Tr. Vol. 1, p. 116 line 8 - 124 line 25; Clerk's Record p. 114-122) (Attached as Exhibit D, Tr. Vol. 1, p. 125 line 1 -126 line 7; Clerk's Record p. 123-124) By "model" we mean use the agency's Brazos River Basin Water Availability Model computer based simulation of available water within the basin that takes into account inflows, evaporation and channel losses, and the rights granted to senior water rights holders within the basin.

APPELLANT'S BRIEF PAGE 29 Of course, Texas law prohibits the collateral attack of an order derived from a closed contested case. Chocolate Bayou Water Company and Sand Supply v. Texas Natural Resource Conservation Commission, et al., 124 S.W.3d 844, 853 (Tex. App - Austin 2003, pet. denied) This prohibition extends to the agency itself.

In Railroad Commission of Texas v. Home Transportation Company, 670 S.W.2d 319,325 (Tex. App - Austin 1984, no writ) the Court held; "Agencies are entitled to interpret their own orders, for administrative purposes, so long as the agency does not use the occasion to interpret as a means to amend the prior order." Even if the Executive Director sought to "change" or otherwise "interpret" the plain, unambiguous priority date listed in Plaintiffs permit during the hearing, the cited case law would prevent such a collateral attack of a determination and grant of a water right that has been made by a previous Agency decision. What is more egregious to Mr. Ware's due process rights is that Mr. Ware's permit was amended by a unilateral staff action, without notice and oppOliunity for Mr. Ware to adjudicate the change or even comment on the change.

The effect of the action was that Mr. Ware was deprived of a right (a water right with a 1997 priority date) conferred by the original Commission order issuing Permit No. 5594 without any notice and opportunity to respond to the removal of the right. A new, far less senior priority date was used, improperly, in the Executive Director's November 14, 2006 Water Availability Review of Mr.

APPELLANT'S BRIEF PAGE 30 Ware's application and formed the basis for the denial of Mr. Ware's application.

Therefore, the Commission's order denying Mr. Ware's application on the basis of the change in priority date, also violated Tex. Gov't. Code §2001.174(2)(C).

Moreover, in House of Tobacco, Inc. v. Calvert, 394 S.W.2d 654, 656 - 657 (Tex. 1965), the Texas Supreme Court held that even a person who is granted a privilege under the state's police power such as a licensee, is entitled to procedural due process when that license is taken away. Mr. Ware was granted an important and valuable priority date of July 1, 1997. He was entitled to procedural due process when it was taken away by the Executive Director's staff without notice and the opportunity for a hearing on the removal of the priority date. The agency compounded the error when it ratified the Executive Director staffs action by issuing a final order.

The TCEQ's Final Order itself indicates that the priority date ofMr. Ware's application is relevant. The Final Order includes findings 49, 50, and 51, peliaining to BRA's application for a system water right. Assuming that all findings of fact are necessary and relevant to the TCEQ's Conclusion of Law and ultimate decision [See Heritage on San Gabriel Homeowners v. TCEQ, 393 S.W.3d 417, 423 (Tex.App. - Austin 2012); citing City of Waco v. Texas C0111111 'n on Envtl. Quality, 346 S.W.3d 781, 819 - 20 (Tex.App - Austin, pet. denied)], we can only assume that BRA's October 15,2004 priority date (Finding 50) as a competing applicant is

APPELLANT'S BRIEF PAGE 31 part of the reason why Mr. Ware's application, using a January 5, 2006 priority date (Finding 48) was denied. (Finding 51).

The Texas State District Court in Travis County has already considered the importance of recognizing the priority of water rights for agricultural use in Texas Farm Bureau, et al v. Texas Commission on Environmental Quality, Cause No. D- I-GN-12-003937, and found the TCEQ Drought Curtailment Rules, 30 Texas Administrative Code §§ 36.1-36.8, are invalid because: 1. The rules exceed TCEQ's statutory authority because they allow exemption of preferred uses from a curtailment or suspension order, and such exemptions are not in accordance with the priority of water rights established by Texas Water Code § 11.027; and 2. Exemption of junior water rights from a priority call and curtailment or suspension order [meaning administering water rights during a time of shortage by putting later water users in front of earlier priority water users] is not authorized by TCEQ's police power or any general authority to protect the public health; safety, or welfare.

[Parenthetical explanatory comments supplied. June 6, 2013, Order on Cross Motions for Summary Judgment, the Honorable Scott H. Jenkins]

5. POINT OF ERROR NUMBER FIVE.

THE DISTRICT COURT ERRED IN FAILING TO FIND THAT THE COMMISSION ACTED ARBITRARILY AND CAPRICIOUSLY TO DEPRIVE PLAINTIFF OF ANY CONTINUED RIGHT TO DIVERT AND USE ANY

APPELLANT'S BRIEF PAGE 32 WATER AT ANY TIME FOR WARE FARM UNDER PERMIT NO. 5594, AN AUTHORIZED APPROPRIATION, ON THE STATED BASIS OF NO WATER AVAILABLE FOR APPROPRIATION, WHILE AT THE SAME TIME GRANTING WATER RIGHTS FOR NEW APPROPRIATIONS AND ISSUING STATEMENTS OF WATER AVAILABILITY FOR OTHER PLAINTIFFS, NEW PERMITTEES, AND OTHER WATER RIGHTS HOLDERS.

SUn1n1my ofArgument The Commission's April 20, 2010 Order IS based on an erroneous construction of Texas Water Code § 11.046(c) peliaining to the availability of return flows for re-appropriation; and is based on an unlawful procedure. The Commission's construction of Texas Water Code §11.046(c) is erroneously in that it included a limitation on the availability of return flows for reappropriation that was not imposed on return flows by the Texas Legislature. This erroneous agency construction ofthe applicable law is not entitled to deference by this court. Further, the Commission's Order then unlawfully reserves these return flows that should have been available to the Plaintiff, for the benefit of a subsequent, pending applicant.

Argument The Commission's April 20, 2010 Order denying Plaintiffs amendment application is made through the unfair and unlawful procedure of denying some Plaintiffs Brazos River Basin access to water available for appropriation in the

APPELLANT'S BRIEF PAGE 33 form of return flows or updated information on water availability. Texas Water Code § 11.046(c) states: § 11.046(c). Except as specifically provided otherwise in the water right, water appropriated under a permit, certified filing, or certificate of adjudication may, prior to its release into a watercourse or stream, be beneficially used and reused by the holder of a permit, certified filing, or certificate of adjudication for the purposes and locations of use provided in the permit, certified filing, or certificate of adjudication. Once water has been diverted under a permit, certified filing, or certificate of adjudication and then returned to a watercourse or stream, however, it is considered surplus water and therefore subject to reservation for instream uses or beneficial inflows or to appropriation by others unless expressly provided otherwise in the permit, certified filing, or certificate of adjudication. (Emphasis supplied)

The Commission's order, which recogmzes the presence of "the full amount [421,449 acre-feet of water per year] of BRA's requested return flows," but also denies that 150 acre-feet of water is available for Plaintiff's continued appropriation, is founded upon unlawful procedure. Plaintiff asserts that the Executive Director's and TCEQ's erroneous interpretation of §11.046(c) is not subject to the usual substantial evidence review by this court because it is clearly a question of law and the TCEQ's interpretation is not entitled to a presumption of validity [Entex v. Railroad COl11m., Texas, 18 S.W.3d 858, 862 (Tex. App. - Austin 2000, pet.denied); Dodd v. Meno, 857 S.W.2d 575, 576 (Tex.App. - Austin 1993),

APPELLANT'S BRIEF PAGE 34 affd on other grounds, 870 S.W.2d 4 (Tex. 1994)] The Texas Water Code and Commission rules do not provide for reservation of state water available for appropriation to ji/ture Plaintifft. There is no law or rule, and consequently no legal justification for the Commission's actions denying a requested appropriation for Ware Farm while granting or providing documentation to support granting, perpetual or long term permits for other later applicants and future appropriators.

Moreover, the arbitrary limitations that the Executive Director placed on the availability of retulU flows for re-appropriation is not supported by the law or even the potentially changing position of the TCEQ on the proper appropriation of retulU flows. The Executive Director's witnesses testified that Plaintiffs application was not reviewed assuming that retulU flows upstream of Mr. Ware's diversion point were available for re-appropriation 14 • Dr. Alexander testified that the Executive Director asselis that retulU flows are available for re-appropriation only to the entity that discharged such retulU flOWS 15 • Plainly, this qualification on the availability of retulU flow for re-appropriation is not contained in §11.046(c), cited herein. The consideration of a pending application of a non-patiy applicant and use of such legally irrelevant factors is evidence that the TCEQ's Denial of Plaintiffs application was arbitrary and capricious. [See City of El Paso v. Public

14 (See Exhibit D, Tr. Vol. 1 p. 109 line 6 - 110 line 8; Clerk's Record p. 112-133 and pp. 134 line 9 -154 line 24; Clerk's Record p. 125-145) (See Exhibit J, Tr. Vol. 2 p. 377 line 10 - 379 line 8; Clerk's Record p. 224-226)

APPELLANT'S BRIEF PAGE 35 Utility Com'n. of Texas, 883 S.W.2d 179, 184 (Tex. 1994)] Further, it is evidence that the agency's final order is characterized by an abuse of discretion or a clearly unwarranted exercise of discretion [Tex. Gov't Code §2001.174(2)(F); Berkley v. Railroad Commission of Texas, 282 S.W.3d 240, 242-244 (Tex.App - Amarillo 2009, no pet.h.); Langford v. Employees Retirement System of Texas, 73 S.W.3d 560, 564-565 (Tex. App. - Austin 2002, pet. denied); TGS - NOPEC Geophysical Company v. Combs, 268 S.W.3d 637, 651-652 (Tex. App. - Austin 2008, pet. filed)] In addition the Executive Director's erroneous interpretation of §11.046(c) is at odds with BRA's position in the pending application that the TCEQ references in its Final Order. BRA seeks all available return flows in its pending application.

Since the issuance of the TCEQ's Final Order in Mr. Ware's case, BRA's application has been heard, considered by the Commission, and remanded to the ALJ's for further hearing. The Administrative Law Judges who heard BRA's application in Brazos River Authority's System Operation Permit Application No. 5851 ("BRA Application No. 5851") issued a proposal for decision with a construction of §11.046(c) consistent with BRA's and Plaintiff's interpretation of § 11.046(c). The ALJs concluded that the Executive Director's interpretation was erroneous and in conflict with the plain language of the statute. See excerpts of the Proposal for Decision, BRA Application No. 5851, attached as Exhibit I; Clerk's Record p. 197-222.

APPELLANT'S BRIEF PAGE 36 The real reason the TCEQ determined that there is no water available for Mr. Ware is because the TCEQ Staff has construed the law to exclude return flows as a basis for a new appropriation under certain unspecified and uncodified conditions. The TCEQ may wish to invoke the protections of "substantial evidence review" and point to the "more than substantial evidence" to support its order; but the lynch-pin of the TCEQ's argument is its construction of the controlling statutOlY authority: § 11.134(b) and, consequently § 11.046 of the Texas Water Code. Therefore, the TCEQ's Final Order in Mr. Ware's application is not entitled to the deference ofthis Court. [Entex v. Railroad Comm., Texas, 183 S.W.3d 858, 862 (Tex. App. - Austin 2000, pet. denied); Dodd v. Meno,857 S.W.2d 575, 576 (Tex. App. - Austin 1993, affd on other grounds, 870 S.W.2d 4 (Tex. 1994)] The case-law is clear: a court reviewing a state agency's construction of controlling statutory authority is entitled to substitute its interpretation of the law for that used by the state agency. (Entex, supra) Moreover, it is important that this court provide its construction is a matter of first impression. As noted in the proposal for decision in BRA's actual pending application [SOAR Docket No. XXX-XX-XXXX; TCEQ Docket No. 2005-1490-WR; On Re: Concerning the Application by the Brazos River Authority for Water Use Permit No. 5851 and Related Filings] (A relevant excerpt was attached as Exhibit I to Plaintiffs Initial Brief), the issue of the appropriate use of return flows is a matter "in play" still under consideration and

APPELLANT'S BRIEF PAGE 37 subject to interpretation at the TCEQ. The legal construction of Texas Water Code, § 11.046(c) is crucial to Mr. Ware in his application and this appeal.

The importance of fair and accurate water availability analysis by the Commission, has its basis, not only in the Texas Water Code, but also in principles of fundamental fairness, and prohibition against property deprivation without compensation or due process, under the Constitution of the United States of America and the Texas Constitution. Water rights are propeliy rights, and the termination or denial of those rights without just cause or fair compensation amounts to an unauthorized use of the State's police powers. The Commission, in every water rights case, must act in a just and reasonable way. Reliance on erroneous or outdated data, refusal to apply facts as dictated by statute, operating in accordance with non-existent rules and procedures unlawfully compromise the Commission's water rights regulation. Above everything, Plaintiff should not be denied under Commission procedures which determine water availability based on unspecified procedures and non-public rules which favor some Plaintiffs over others without regard to the statutory mandate, "As between appropriators, the first in time in the first in right.

6. POINT OF ERROR NUMBER SIX.

THE DISTRICT COURT ERRED IN FAILING TO FIND THAT THE COMMISSION'S APRIL 20, 2010 ORDER ADOPTED FINDINGS OF FACT APPELLANT'S BRIEF PAGE 38 PERTAINING TO A PENDING NON-PARTY APPLICANT; MOREOVER, THE DETAILS OF SAID PLAINTIFF'S PENDING APPLICATION AND PROPOSED APPROPRIATION WERE UNLAWFULLY USED AS A BASIS TO DENY PLAINTIFF'S WATER RIGHT APPLICATION.

Summmy ofArgument The Commission's April 20, 2010 Order is unlawful and voidable on its face because is it based upon consideration given to a non-patty, pending applicant, to the detriment of the Plaintiff.

Argument The Commission's April 23, 2010 Order contains Findings of Fact 45, 49, and 51; which refer to the unidentified application of Brazos River Authority, a non-patty. These findings of fact regarding the ongoing contested application of a non-patty were used as a basis to deny Mr. Ware's application. Therefore, the Commission order violated Tex. Gov't. Code §2001.174(2) because the decision was made through unlawful procedure [§2001.174(2)(C)]; it was not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole [§2001.174(2)(E)]; and was arbitrary and capricious and was characterized by an abuse of discretion [§2001.174(2)(F)]. The referenced Findings of Fact Nos. 45, 49, 50 and 51 appear to refer to pending water rights BRA Application No. 585l. However, as of its April 14, 2010 consideration of the Proposal for Decision in Plaintiff's case, the Commission had yet to even consider that pending application in an open meeting lawfully convened pursuant to the

APPELLANT'S BRIEF PAGE 39 Texas Open Meeting Act, Tex. Gov't. Code Chapter 551 et. seq. and, of course, had not rendered any final order granting all or any portion of BRA's proposed appropriation. [See Tex. Gov't. Code §2001.005(a)] On April 28, 2010, the Commission referred BRA's Application No. 5851 to SOAR granting the requests for a contested case hearing of several protestants.

The hearing before SOAR is subject to the Texas Rules of Evidence in a non-jury civil trial. (See Tex. Gov't. Code §2001.081) BRA was not a party to Mr. Ware's application, and no witness on behalf of BRA was sponsored to verify any pOliion of Application 5851 or any other application filed by BRA. Even more impOliantly, Plaintiff was provided no oppOliunity to cross examine or otherwise determine the validity of any evidence associated with BRA's application or the supposed evidence which mayor may not support the Findings of Fact Nos. 45, 49, or 51 in the Commission's April 20, 2010 Order. (See Tex. Gov't. Code §2001.087) Therefore, in denying Mr. Ware's application based on unsupported evidence from a pending application of a non-party, the Commission's April 20, 2010 Order amounts to a taking of Mr. Ware's property without the benefit of any procedural due process, in direct contravention of the Article XIV of the U.S. Constitution. In that regard, the Commission's order also violated the Texas Constitution, Art. 1, Sections 3 and 19, and Tex. Gov't. Code §2001.174(A). [See also Texas Citizens for a Safe Future and Clean Water v. Railroad Commission of

APPELLANT'S BRIEF PAGE 40 Texas, 254 S.W.3d 492, 496-497 (Tex. App. - Austin 2007, pet. filed); Hernandez v. Meno, 828 S.W.2d 491,493-495 (Tex. App. - Austin 1992, writ den.)]

There is little doubt about the damaging impact of the referenced findings on Mr. Ware's application. The most significant Findings of Fact Nos. 49, 50 and 51 were included in a section of the Commission's order labeled "Priority dates." In Findings of Facts 40 and 41 (which directly contradict the Commission Finding of Fact 47) the Commission established the importance of an Plaintiffs priority date in the Commission's determination of water availability. Then, the Commission directly compares BRA's alleged priority date to a less senior priority assigned to Mr. Ware's application (Finding of Fact 48) rather than the date included in his permit (Finding of Fact 46). In so doing, the effect of the Commission's order was to deny Mr. Ware's application in favor of another pending and undecided application. Moreover, the Commission's Finding of Fact 51 violates Tex. Water Code § 11.141 by implying that the pending BRA application had already resulted in a valid appropriation of water. That section ofthe Water Code provides: "DATE OF PRIORITY. When the Commission issues a permit, the priority of the appropriation of water and the claimant's right to use the water date from the date of filing of the application." (Emphasis supplied) Texas Water Code, §11.141 The agency's actions in adopting Findings of Fact 40,41,45,47,49,50 and substantially prejudiced Plaintiff s substantial rights discussed herein, including APPELLANT'S BRIEF PAGE 41 his right to due process, and therefore Plaintiff is entitled to the reversal and remand of the TCEQ's decision [Tex. Gov't. Code §2001.174(2); Balla v. Texas State Board ofMedical Examiners, 693 S.W.2d 715-717 (Tex. App. - Dallas 1985, ref.n.v.e)] Plaintiff did not agree to use information about BRA's pending application or waive his objection to receipt of information about BRA's application into his hearing record. Plaintiff offered the Executive Director's 2008 Water Availability Review to the ALI for the limited purpose of establishing that it was the most current water available analysis performed by the Executive Director regarding the Brazos River Basin. In that review (Exhibit H; Clerk's Record p. 183-196) the Executive Director updated the Brazos WAM that had been used two years before in its review of Mr. Ware's application. The fact that the Executive Director found that 74,387 additional acre-feet of water per year was available in the Brazos River Basin using the same period of record as was used in Mr. Ware's Water Availability Review was relevant and probative information for the Commission's consideration of Mr. Ware's application. The fact that another applicant (or any other applicant) may have also applied for the water available for appropriation is irrelevant to any issue in this case. Plaintiff strenuously objected to the admission of any evidence about BRA's application during Mr. Ware's hearing for the reasons discussed herein. The Commission's inclusion of any information about

APPELLANT'S BRIEF PAGE 42 BRA or its pending application is objectionable and unlawful and has no bearing on the question of water availability for Mr. Ware.

VII. SUMMARY The Commission's April 20, 2010 Order denying Mr. Ware's application to appropriate 150 acre-feet of water per year from the Lampasas River, Brazos River Basin, violates the Texas Water Code, the Texas Constitution, and the Constitution of the United States and is voidable and reversible. Apart from being unlawful, the Commission's role in administering water rights is called into question when it denies a family farmer access to water available for appropriation in the Brazos River Basin for any term at all on the one hand, and supports contractual water rights, and issues perpetual permits for use of State water associated with return flows and updated streamflow conditions and data sets on the other hand.

VIII. PRAYER FOR RELIEF WHEREFORE, CONSIDERING THE FOREGOING, Plaintiff asks the court to vacate the Texas Commission on Environmental Quality's unlawful April 20,2010 Order denying the Application of Bradley B. Ware to Amend his Permit to Appropriate State Water No. 5594, and remand the case to the TCEQ for further consideration of Plaintiff's application based on the evidence of record and the Texas Water Code and all applicable law; and for such other and further relief that Plaintiff may show himself to be entitled.

APPELLANT'S BRIEF PAGE 43 Respectfully Submitted, WEBB & WEBB Attorneys at Law Southwest Towers East i h Street Austin, Texas 78701 (512) 472-9990 Telephone (512) 472-3183 Facsimile

, bbwebblaw.com 0.21033800 GWENDOLYN HILL WEBB [email protected] State Bar No. 21026300 ATTORNEY FOR APPELLANT, BRADLEY B. WARE CERTIFICATE OF COMPLIANCE Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that this brief contains 10,260 words (excluding the caption, table of contents, table of authorities, signature, proof of service, certification, and certificate of compliance).

This is a computer generated document created in Microsoft Word, using 14-point typeface for all text, except for footnotes which are 12-point typeface. In making this certificate of compliance, I am relying on the word count provided by the software used to prepare the document.

APPELLANT'S BRIEF PAGE 44 CERTIFICATE OF SERVICE I hereby celiify that I have this I--~ r? day of ( ~ , 2015, ","«I <op;" ofth, lorego;ng ;n~",m"'t UP"" the patiies to thlS PI' ceedmg, who's full and complete names and addresses appear below, by certified mail, facsimile, hand delivery, or regular U.S. mail.

Linda Secord, Asst. Attorney General Office of the Attorney General P.O. Box 12548-MC015 Austin, Texas 78711-2548 Phone: 512-475-4002 Fax: 512-320-0911 [email protected]

APPELLANT'S BRIEF PAGE 45 GLOSSARY OF TECHNICAL TERMS Brazos Water Availability Model - "Brazos W AM" The Brazos WAM is a computer simulation that is designed to simulate the water permits in the Brazos River Basin and the available water supply in the basin in priority order. It is designed for TCEQ to determine when all of the senior water rights have been satisfied, that there is additional water available. (See Exhibit D, Tr. Vol. 1 p.71 line 12 - p.72line 6; Clerk's Record p. 110-111) APPENDIX Exhibit A. July 21, 2009 Application for Amendment to Water Right 5594A Exhibit B. Applicant Bradley B. Ware's Motion for Rehearing Exhibit C. June 7,2006 Letter from BRA regarding Conditions of Withdrawal of Protest Exhibit D. Excerpts of Transcript Volume No.1 of Hearing conducted October 28,2009 Exhibit E. April 20, 2010 Final Order ofTCEQ Exhibit F. August 28, 1997 Interoffice Memorandum regarding Water Availability Analysis Exhibit G. November 14,2006 Interoffice Memorandum regarding Water Availability Review for Permit No. 5594 Exhibit H. November 25,2008 Interoffice Memorandum regarding Water Availability Analysis for BRA's Application No. 5851

APPELLANT'S BRIEF PAGE 46 Exhibit 1. Excerpts of the October 17, 2011 Proposal for Decision Exhibit J. Transcript Volume No.2 of Hearing conducted October 29,2009

APPELLANT'S BRIEF PAGE 47 Exhibit A July 21, 2009 Application for Amendment to Water Right 5594A " App. Exh. _--==--__ §t;~ "'~) fii~~ ~,>.~~I,j J'I~'<"';o~""\..~ ~ n':;:.,z ~, .~ -- t:~ ~.,!ifl _ L!....r'~~::;~ :~ r,)'u.. ~ ~.~ ~ III <.?.~ ~ ~ l->'F~~ ~ ~~6.~ '" ::>d~ WOtn~e ~O .... ~M TEXAS COMMISSION ON ENVIRONMENTAL'QUAiXllijl . P,O, BOX 13088, MC-160 .

Austin, Texas 78711-3088· '" Telephoue No, (512) 239-4691 FAX (512) 239:4770 APPLICATION FOR AMENDMENT TO AWATER RIGHT REQUIRING MAILED AND PUBLISHED NOTICE; or NOT REQUlRlNG MAILED lIND PUBLISHED NOTICE ReferenC<l Tens Administrative Code Section 295.158(b) Or ©

'stomer Reference Number (if issued): CN 5594 ., Ifyoa do not have a Customer Refurence Nmnber, oom"'pl':'iet~eS"'_='o=-'nnf.'Sof"'th"'."eor="'eD;<:ao-la"'Fo-onn~(TC"""E""Q-"l""04""OO"'):-IIll"'d'-::submit it with this applkatiQn.

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Form TCEQ-10201(revised 8/02) , .. '.

TEXAS NATURAL RESOURCE CONSERVATION COMMISSION

..' PERMIT:TOAPPROPRIATE .

AND USE STATE WATER APPLICATION NO, 5594 PERMIT NO. 5594 TYPE:. Section 11,121 Name: Bradley B, Ware Address: Rte: 3, Box 211 Killeen, TX 76542 , Filed: . July 1, 1997 Granted: NOV 0 7 1997· ,.

Purposes: IrrlgatiOll County: . Bell Watercourse: Lampasas River, tributary Watershed: Brazos River Basin of .the Little River, tributary .of the Brazos River .:" ..

·-witiiREAS·,··Briid1eY"irware 'has -ieqiiei:ted"a~thorizatioil to'dlveiiand-use' noT(o exceei:fi30' acre-feet of water per annum to irrigate' 100 acres ofland owned by the' applicant in Bell County approximately 15 miles southwest of Killeen, Texas; and .. : ,. .. .. . .' .

WBEREAS, the Texas'Natural Conservation Commission frods thaljurisdictlon over the , ';' application is establishe~; 'and . .. , ••. ,~ •• , . . . . "'! .,

WHEREAS, no perSOll protested the granting'ofthls application; and ',' ,. . . ., vVlIEREAS, the Commission has complied with the' requirements ofthe Texas Water Code and Rules . of., the Texas 0" ".. • Natural .' • Resource • " Conservation Comb:iission • • • • hi isslihi.g this' ~ • , pennit.· '

NOW,. THEREFORE, this permit to appropriate and use State Water' is issue'd to :B;~dl~;' B.

Ware, su~j~ct to, th~, fo~1~:vin~~~~8and _condi~~o.~s: . ...... ,',_ ..... .. '. .... ..... .. ' , . . ,.,... ,,, . . . . . . , ,o_. . r ~" .. . ~ .._ ••• .:- . . . . . . . . ' , . ~ .... " .. - ... 'c' , .. : ..

Pehnittee is authorized t.o divert and use not to exceed 130 ac;re-feet of water per . anllluri. from the Lampasas River to irrigate 100 acres of'land out of 26 l· acres in the Vi, Brown Survey, Abstract No, 67, the D.G, Van Vicheton (Vecheton)

. .

Survey, Abstract No. 851, and the C Edwards Survey, Abstract No. 291 in Bell , County, Texas approximately 15 miles southwest of Killeen,' Texas. This iand'is conveyed to permittee in a deed recqrded in Volume 1524, page 671 of the Bell.

County Deed Records ..

2. DIVERSION a. Diversion Area: Permitte is authorized to divert water from any point on the left or east· bank' of the Lampasas River, between a point N60.6"W 2,050 feet from the southeast corner of the aforesaid Van Vicheton Survey and a point· located S37'E 4,200 feet from the aforesaid sutvey· comer in Bell Courity. This downstream point is located at Latitude 31.032"N, Longitude 97.9,92'W. . . . b. Maximum Diversion Rate: 2.67 cfs (1200 gpm).

3, SPECIAL CONDITIONS a. In order to protect instream uses, biological habitats and water 'quality, perinittee is authorized to divert water herelmder ·during. the months of April through ·June only when the flow of the Lampasas River at U.S.G.S.·Gaging Station No. 08103800 near Kempner; Texas equals ., " .. '::--' ~.~ ..... _.. c' . ·.c-onxCMd~ '38 CfS·tlIi~ ·auri.fig~t1ie·Otliet' m:oj)ths' brily::Whenit"equalS' or- . 'exceeds 1f cfs: ...... c· ' ..... ".,. • . ~.

... " b. The authorization to divert and use 130 acre-feet of water per year shall expire and become null and void on .'November. ·7., 2007 unless' prior \0 such date permittee applies for an extension [lereof. and such .. application is suosequently granted for an additional term or' in . . perpetuity. The priority date of this permit alld ~ll ex~ension.s hereof shall be July 1, 1997. .. .. . . . ". .

4. WATERGONSE~.vATION .. ,. ~ ~ " : ~ :. r·:, ,. ,', .

Peqniter, shall: iIn,pJemcn\ a'~at~r ~c?~er,-:aiio!).·.pi!l~ 0-~t.Pt9Yifl~s .f~r. t~e· .. utilization of those practices,. techniques, and technologies that reduce the consumption ofwaier, preventor reduce the1G)ss.or waste of water, maintain or improve the efficiency .ill the use of water,· or increase the recyclb:\g and reuse of watcr so that a water supply is made available'for future or alternative uses: . .. .- "

. 'Tlrls pennit is iss~eds;;bject t~ aU superior ~d'sel)io~~~te~ rightsk.tl~e Brazos River Basin. "~ . .

"

Permittee agrees t; be bound by the terms, conditions and provisions contained hereih and such agreement is a condition precedent to the granting of this pennit. .

All other matters requested in the" application which are not specificaUy granted by thi~ permit are de;nied. .

This pepjJ.it is issued subject to the Rules of the rexas Natural Resource Conservation Commission and to the right of continuing supervision of Sta~ water resources exercised by the· Commissiop..

TEXAS NATURAL RESOURCE , CONSERVATION COMMISSION

Par u'<.~ DATE ISSUED: NOV 0 7 19S7 ATTEST:

Eugenia K. Brurinn, Ph.D .,Chief Clerk

., .

.,

REQUIREMENTS FOR WATER CONSERVATION PLANS FOR INDIVIDUAL IRRIGATION SYSTEMS These Requirements are a synopsis of the rules as approved by the Commissioners of the Texas Commission on Environmental Quality on April 7, 1993. The approved rules were published in the Texas Register on April 23, and are recorded in the Texas Administrative Code, Title 30. Chapter 288. Conservation plans reqUired to be submitted to the Texas Commission on Environmental Quality must follow these gUidelines. 4

A water conservation plan for an lndlv1dualirrigator shall provide information, where applicable, in response to each of the follOWing elements, including what the user intends to do, or not to do and why, wIth regard to that element: (1) A descrIption of the agricultural production process which shall include but is not limited to the type of crops and acreage of each crop to be Irrigated. monthly irrigation diversions and any seasonal or annual crop rotation and soil types of the land 10 be Irrigated; (2) A description of the Irrigation metllOd or system and equipment including pumps, flow rates, plans, aneVor sketches of the system layout; (3) A descrIption as to whlch practice aneVor device will be utilized to measure and account for the amount of water diverted from the source of supply; (4) Any previous assessments which may have been performed regarding the system efficiency of the irrigation system; (5) Specification of conservation goals including quantitative goals for irrigation water use efficiency; (6) Water conserving irrigation eqUipment and application system or method including but not limited to surge irrigation, low pressure sprinkler, drip irrlgation. pollUtion prevention, and non-leaking pipe; (7) Leak-detection. repair, and water-loss control; (8) Scheduling the timing and/or measuring the amount of water applied, such as, soil . moisture monitoring; (9) Land improvements for retaining or reducing runoff, and increasing the infiltration of rain and irrigation water including but not limited to land leveling, furrow diking. terraCing. and \~eed control;

(10) Tallwater recovery and reuse; (11) Any other water conservation practice, method. or technique which the Irrigator show to be appropriate for preventing waste and achieving conservation.

Texas Commission on Environmental Quality IRRIGATION WATER CONSERVATION DATA AND PLAN FOR INDMDUALLY OPERATED SYSTEMS Submit this form with an application for Permit to Appropriate State Water. You may want to contact the local County Agent, Natural Resources Conservation Service office, the Texas Water Development Board or a professional engineer in preparing this form. If you have any questions concerning the information requested, contact us at (51m39"4730. - Name of Applicant: BRADLEY B, vJARE DayUme Telephone No.: 254--10 3t+ - 10 '5 217 Requested Diversion Amount: -:--;-1---'50;..0"''--:-:-::-::-::---:::-:---::-:::--_ _ _ _ _ _ _ _ _ _ __ 5EG P>--lfAc..\-\GD pJ'.>.6,5 Foe TInS CMRT--=t' I. Type of crop: Growing season (months): Acres irrigated/year: 1.

2.

3.

4.

Total number of acres: \'52.

Include hybrid crop names: for example, which type of coastal Bermuda?

II On average, how much water in acre-feet will be diverted montllly for irrigation?

January G May '21 September 20 TOTAL February 4 June Irl October 'I for all _ months March "3 July 25 November 5 April F") August 30 December 5 MONTHL y TOTALS ~o q3 31 150 m. Do YOIl seasonally or annually rotale crops? NO (circle one) If yes, please describe: WI-IE/.\\i Fo\<J'l3E: I SDR6HUM-j bAlS w m--\ A LE6uME.

Su eM As "'-U$i RIAW W 110IER PEAs, C:\FORMS\IO~lG:.\\pj (rcv1scd:vm Page Z

Bradley Ware Part 1.

Some of my land I double crop.

Type 0/ crop: Growing season (months) Acres inilyear 1. Tifton 85 Bermuda I 8 months 36 Soft Wheat (Grazing) ---1 (donbJe crop) 6 months 36 2. Improved Native Grass 9 months 22 3. Brown midrib Sorghum] 7 months 54 Bob oats or soft wheat (double crop) 5 months 54 4. Costal Bennuda grass:::J (double crop) 8 months 20 Bob oats or soft wheat 5 months 20

I.

IV. Describe your soli type (include permeability characteristics. If available): 1305Ql.l.E CLA'Y LOAM \\lqH WATER ~\DLDIt06 CAP/\UTV. /:)8JTOJ0 SILTY ClAY-DEEP w(lL DRMj(D. SLDWL'/ PERMABl£ PRE.SE:JJ1\I)j 0.0WTDUR TE.RRI\CEPAfJD 5EEbEO TO tJAT\\lE E\RA'55 St:EC\ES .CJ</.>,\JJFDRD CI..A'/- wELl DRAll0eD PRESEJV' e.oIVTOUR ThRRACE.D .AlJ:',D REfER Ttl 'TG'#S eooPE:RAI1\JE EXTE.I0SIO/J PU,6uCATlO/J B- \0'70 p.B.

V. Describe the existing/proposed irrigation system including plans, designs and/or sketches of the system layout, pump location, slope of the land to be irrigated, and specifics about the delivery method. (For example: Single pivot with big gun sprinkler) SloPE; D tc:> 3 PERCE.Wr /OCUIJE1?Y UWDSR6RCU~D PVC PUMP c.APW1V 500 6.PM./pDJJ[.R UkllT 25 H. Po ELEcTRlC C6J'TER PI\JDr- L.ePA DSSISIJ (lOUJ El0E:.R6Y PREUSS ADPUCAllDIJ) w11!i A /xS161J E.FFE.C.IE.IS:.'f t>-'ilO\lE CJ5% DRA\\J/\J6 (;)(1-\1611-5 A)6,C,'l-D. TExf'S CODPERI\\l\lE EXTEI0S ID/V PuBUc'ATloJJ B -\loll / L-22 1,)7, l-5D~, B-loc;A"'1 tHo llo2.

VI. Describe the methods and/or device which wllI be used to measure and account for the amount of water diverted for irrigation.

CEhlTE.Q PIVDT J.JD2.ZlE C'.HART AfJD PLlMP ~ \C~~y CUR\Je G\IB rr B At-JI) Co 1 , Lo6 DF DPE.MlI0f.) HOu'Rs ~Hl3lT -1-1,

VIr. If there's is an existing irrigation systcm~ any system evaluations been performed regarding the efficiency of the system? ~ NO (circle one) If YES. please indicate: . \ When: sEE AlTN:I:1ED TEXAS .A·t-M PLt5UCAllD\.) B-lfolO "I B(;'OI'j

Who performed the evaluation: DR. !DIll LYLE -n;XM A'l- M E.i<TEDS IDI0 5E\<.1J 1(£ , LuBi'IOC-K --rx DR LEblJ NGW! TEXf'-S (loD~FATlUE: G><r8JSIOiJ Page 3 .ANl.A1< 1LLo I TX'

Reslllts of the evaluation: tePA DES1Gk) CE;lSlEi< Pl\JC5f SYsTE,us ARE:.

PRD\)W TO EXCEED '45% E-FFCJJCfEtj01 At-JD qb% WJIPoRMITY OF DI:5TRIBUTIOlJj E>Clill3li5 F'IG,/C.rtD05l~ AC81J1E:R PIVOT By GUY flPRS VIII. Describe any water conserving equipment used In the irrigation system. (I.e. closed pipes, leak detection, pressure loss cut-off valve, etc.) \11611-\ EF=FECIEf0CY, E.J£c:..-IRIC celJrRlFlcAl PU/JI.P,SEAlED AIJD - r (FRIC:nOJ-) ') PR-ESSuRE lEST€:D lOW ffiU<,(\,lloJJ, P\lc.. UND6RQi<OU.tJD _VIII, cant. DELlVE.R'1 PIFE. LOW E.NER6Y PRECISE APP~ CLEf">/;,) CE:I0TER PI\laf: USIIJ::3 LOID DRIFT NOZZLES AND DRA<:i I-\OS£S I WA1E..R P-El.EkSE: WILL BE. AT t\lD (\./.-oRE lltAk'l ! g 1/ AB0Jt: SDIL SURFA.CE: ,Tf.'l<AS cooPE';R,A.TIVE: E':,crWSlDhJ SE!<.\lICE: PUBLICAnDDS I 6-(00/1 f L-2.2,Q I BC,;>ilc>Z, B-bI50, B-focRb IX, Describe any methods which will be used for water loss control and leal, detection and repair.

REbULA'R PRfSSLtRE TE..ST,, 'R£'PAI f2S MAC£. (,\SI/J(,;, AWROOCD

X. Describe any water saving scheduling or measurement practices to be utilized in the application of water, for example: irrigation only early in the morning, late evening or night hours, when the wind is cairn and temperatures lower, and also the utilization of soil moisture monitoring·,

Page 4

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So N> MOIS1VR€ L8JELs ARE: MAI}JT.AII>'::£D FeR goP OCIJE.lCPM6'JI BUT NDT TD 111E PC>JlJf of Rv,wofFAUSt> , REFE.R 1P TEXAS CCOPEI<.A.TIUE. EX:TEhl510W P(1Bl1~llol0 L-5o(>'j,J B-lbIO. :;> e.-I 0701 B-0oIQ. 'TE.Y:As cooFERA'TI \.lEO E><-/EOf.-lSID/j .VJA'{C\< 'R ~"'bLI Kes LDe86 111:.: li'ifPi / W[.tllV:teyc\s e.-\ ,-tat)'\..l,eaCl .

XL Describe any water saving land improvements whlch the applicant plans to incorporate into the irrigation practices, such as conservation tillage ~nd other organic methods). knifing. furrow diking, weed control, etc. t:'18J)S ARE: CDI01DUl< IERRACE:D ,SOME: 6e.Er:ED 1b ~ll'JC GR.A.SS SFEOES. IllLA6f' vJILL BE: MAlJMf£> 10 MAI/..)TAIN f!...T LEAST '30% G,ROfllJD COIlE.R 00 SOIL SUR.FACE:.1

XII. Describe any recovery and reuse of taUwater runoff.

lRRI6ATlD0 vJlLl B( MDf\jffDREb 'SOTMf'\! SoiL WILL COfSlp..\10 SUFFtiTf::i..)T MDlS1DRE: FOR PRoPER CROP DE\lQoPMEi0f BUT 1'001 _IRRlt:iA.TC£) TO lliE. POIDT DF RU'i..iOFF, REFER -10 TEXI'S CroPE:RA1l1JE ~1D0 PLIBUcAl700 1.-:- 5D3Q.

XIII. Describe, where appiicable, any xeriscape practices utilized (usually associated with landscaping) .

Page 5

, ,

XIV. Indicate (in gallons-per-minute or cubic-feet-per-second) tl!e rate that water is diverted from the source: SOD G.'PM DR \.2. c.-Fs

C:\FORM.S\10211l\1jXf (rcvisffl W5) Page 6

.~.

Exhibit B Applicant Bradley B. Ware's Motion for Rehearing SOAlI DOCKET NO. 582·08·1698 TCEQ DOCKET NO. 2008·0181·WR \ n>j II' \ 6 . '''~\I'"\l i _ IJ \ 1< 1 n .

Al'PLICATION OF BRADLEY B. WARE § BEFORil!j'i!1iE~§6g[~SION § TO AMEND WATER USE § ON § PERMTI' NO. 5594 § ENVIRONMENTAL QUALITY

.APPLICANT BRADLEY n. WARE'S MOTION FOR REHEARING

TO 11m HONORABLE TEXAS COMt\1ISSION ON ENVlRONMENTAL QUALITY:

NOW COMES, Bradley 13. Ware ("Mr. Ware," or "Applicant"), Applicant in the above styled and docketed water rights permit amendment application, by and tlrrough his attorneys of record, Stephen P. Webb and Gwendolyn Hill Webb, of Webb & Webb, Altomeys at Law, 211 Seventh Street, Suite 712, Austin, Texas, 78701, and mes this, Applicant's Motion for Rehearing regarding the Aplil 20, 2010 Order of the Texas Commission on Environmental Quality ("TCEQ" or "Commission") "Concerning the Application of Bradley B. Ware to amend water use Permit No. 5594; TCEQ Docket No. 200S·0181-WR; SOAH Docket No. XXX-XX-XXXX," ("the Conunlssion's April 20, 2010 Order") and respectfully states as follows:

I. INTRODUCTION

Apart from the grievous it1justice perpetrated by the Commission Oll Applicant, Bradley B. Ware, in denying him allY continuing right to divert and use water under Water Use Permit No. 5594 for Ware Farm after over 100 years of waler use, Applicant asserts that the Commission's April 20, 2010 Order violates extant provisions of tbe Texas Water Code, and COlltains obviously reversible legal error. A May 11, 2010 decision of the Texas Court of Appeals, Fomteenth District, Houston, in Texas Department of Public Safety v. Chad Michael Henson (14-09-0010-CV) sets forth the standards of judicial review of decisions by an administrative agency. TIle text of tile discussion is set forth in full below: When reviewing ffil administTative decision under the substantial evidence rule, the review court may affIrm the decision in whole or in part. Tex. Gov'!. Code Ann. §2001.174 (Vernon 2008). It [the reviewing cawt] must reverse or remand the case if the Appellant's substantial rights have been prejudiced because the administrative findings, inferences, conclusions, or decision are: (1) in violation of a constitutional Or ,iatutory provisioll; (2) in excess of the agency's slatutory authority; (3) made through ffil unlawful procedure; (4) affected by other error of law; (5) not reasonably supported by subslffiltial evidence when considering the record as a whole; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly \lUwarrauted exercise of discretion.

[Citing ffild paraphrasing Tex. Gov't. Code §2001.174 (Vernon 2008), ffild Tex. Dept. o/Publlc Safoty v. Guajardo, 970 S.W.2d 602.J Generally, as shown below, the Commission's order is in violation of the fundamental precepts of the Constitution of the United States (5th and 14th Amendments) ffild the Texas Constitution (ArLl, Bill of Rights, Sections 3 and 19), Texas Water Code and the Texas Govermnent Code; is in excess of the Com.mission's statutory authority; is made through unlawful procedure; is affected by nllmerOllS other errors of law; is not reasonably supported by snbstantial evidence when considering the record as a whole; and is on its face arbitrary, capriciolls, and characterized by abuse of discretion, or clearly unwarranted exercise of discretion.

Put simply, the Commission's Apri120, 20 I0 Order is subject to reversal because it finds and concludes that there is water available for appropriation in the Brazos River Basin in the form of return flows, but reserves the available water to a pending applicant.- not appropriator-- and yet denies water availability .in the current proceeding, against the substantial evidence of record.

Al'PLICI>Nf'S MonON FOR REHEARING MAy 14, 20)0 PAGE 2

n. STATEl\fENT OF POINTS OF ERROR POINT OF ERROR NUMB:ER ONE

The Commission's April 20, 2010 Order unlawfully ignores the evidence of record regarding the water available fol' appropriation by Applicant; therefore, the Commission's action in adopting the April 20, 2010 Order was arbitrary and capricious, and was characterized by an abuse of discretion.

Po~rOFERRORNUMBERTWO

The Commission's April 20, 2010 Order violates the directives and requirements of Texas Water Code, §11.1 34 (b), regarding Commission action on water rights applications.

POINT OF ERROR NUMBER THREE

The Commission's April 20, 2010 Order is in violation of the requirements of Texas Water Code, §11.l381, regarding the consideration and granting of water rights permits for a tenn of years.

POINT OF ERROR NUMBER FOUR

The Commission's April 20, 2010 Order violates the fundamental doctrine of water right~ law of "first in time, first in right," as set forth in the Texas Water Code, Chapter 11.

POINT OF ERROR NUMBER FIVE

The Commission acted arbitrarily and capriciously to deprive Applicant of any continued right to divert and use any water at any time for Ware Farm under Pennit No. 5594, an authorized appropriator, on the stated basis of no water available for appropriation, while at the Al'PLlCAN1"S MOTION FORJ1EBl;ARlNG MAY 14,2010

same tUne granting water rights for new appri>Priations and issuing statements of water availability fur other applicants, new pennittees, and other water rights holders.

POINT OF ERROR NUMBER SIX

The Commission's April 20, 2010 Order adopted of Findings of Fact pertaining to a pending .non-party applicant; Moreover, the details of said applicant's pending application and proposed appropriation were unlawfully used as a basis to dellY Applicant's water right application.

APrLlCANr'S MOTION FOR REJlEARJNG MAv14,2010 PAG~4

m. POINT OF ERROR NUMBER ONE

The Commission's April 20, 2010 Order unlawfully ignores the evidence of record regarding the water available for appropriation by Applicant; therefore, the Conunission's action in adopting the April 20, 2010 Order was arbitrary and capricious, and was characteriwl by an abuse of discretion.

DISCUSSION

The adopted Findings of Fact regarding water availability and "The reliability of the Model" in the Corrunission's April 20, 2010 Order are, on their face, inconsistent with each other, directly contrary to the evidence of record, and founded upon unlawful procedure. While the Commission is entitled to dmw an appropriate inference from tlle substantial evidence of record regarding water availability in the Brazos River Basin, the Commission is not entitled to abuse its discretiou by disregarding the existing evidence of record concerning :water availability in favor of outdated ovidence known to be inaccurate. There was much hand wringing during the Commission's consideration of Applicant's amendment application on April 14, 2010, and the Administrative Law Judge and the Connnissioners all Opilled that it was a sad and difficult decision that bad to be made to protect the water resources of the state. In fact, the Connnission's decision to deny Mr. Ware's applicalion to amend. Pennit to Appropriate State Water No. 5594 and terminate all water use thereunder should not have been made at all.

On November 14, 2006, the Executive Director perfonned a water availability review of MI'. Ware's amendment application using the COllnllission's Brazos River Basin Water Avaiiability Model ("the· Brazos WAM') which was current and accurate at the tinle it was performed. See, Applicant's Exhibit No. 47, attached hereto. Two years later, however, the Executive Director preformw another water availability review of the Brazos River Basin using updated information which was not (Nailable at the time Mr. Ware's application was revieww.

TIle Executive Director updatM the Brazos WAM's Current Conditions data set and found tl,at

APPLICANT'S MonON FOR REHEARING MAy 14,:UllO PAGES

there was an additional 74,387 acre-feet per year available for appropriation in the BlazOS Rivet Basin. See, Applicant's Exhibit 50, also attached hereto.

It is lmdisputed in the record thai Mr. Ware's amendment application did not benefit from the Executive Director's 2008 update of the Brazos WAM. The Executive Director's staff hydrologist, Jeffrey Charles Thomas, testified at the hearing that neither he nor anyone else in the Executive Director's office perfonned a water availability review of Mr. Ware's application, other than the One completed on November 14, 2006 and included in Applicant's Exhibit No. 47.

TIle same witness also testified that no portion of the 74,387 acre-feet found to be available in the Brazos River Basin in 2008 and set forth in Applicant's Exhibit No. 50 was ever applied to Mr. Ware's application or the Executive Director's analysis of water availability for the Ware application.

In considering the Applicant's arglUllent regarding water availability based on rctnrn flows and \lpdated infonnaiion, the Commissioners appeared to believe that their questioning of ColUlllission staff during the April 14, 2010 Connnission Agenda meeting regarding consideration of retnrn flows and water availability was a lawful substitute for the evidence of record. TIlis procedure is not lawful. The Commission's decision must be based on the evidence of record, not the earnest responses of Couunission staff at Agenda, which responses are not contained in the udministmtive record upon which the decision must be based. TCEQ staff hydrologist Kathy Alexander responded to Commission inquiries stating that the Executive Director had included the retnrn flows ShOWll Oll Applicant's Exhibit 50, attached hereto, in its consideration of water available for Applicant's proposed appropriation. 1bis statement is directly contl'ary to the testimony of TCEQ staff during the hearing, including Ms. Alexander, regardu;g the consideration of 74,384 acre..feet of water shown to be available in the updated Current Conditions data set of the Brazos River Basin Water Availability Model. The evidenoe of record, as shoWn in an excerpt of the official transcript, is set forth below.

MrLlCANl"S MOTION FORRllHEAlUNG MAY 14,2010 'fAGE6

CROSS EXAMINATION OF JEFFREY CHARLES THOMAS, TCEQ HYDROLOGIST ON THEBRADLEYB. WAREAPPLlCATION Transcript, Bradley B. Ware SOAH Colllesied Case Hearing Ootober 28, 2009, Pages 149, 150: Q. Okay, the point is you didn't use \lllY portion ofthat additional water in the basin in your model?

A. That's correct.

Trans(:ript, Bradley B. Ware SOAH Contested Case Hearing October 28,2009, Page 149, 150: Q. Additional unappropriated water would benefit the entire basin, wouldn't it?

A. Yes.

Q. And so it doesn't matter whether it's above Stillhouse Hollow Lake, below it? It would benefit everyone, wouldn't it?

A. It would benefit everyone downstream ofit and potentially thiit--yes, I can-say that it would benefit everyone in the basin, yes.

CROSS EXAMINATION OF KATHY ALEXANDER, TCEQHYDROLOGIST EXECUm'E DIRECTOR'S REBUTTAL WITNESS ON THE BRADLEY B. WARE APPLICATION Transoript, Bradley B. Ware SOAH Contested Case Hearing October 29, 2009, Pages 378, 379: Q. . Okay. And so there were return flows available and you gave them a priority date of October 15,20047 A. Yes.

Q. Okay. You meniioned that there were 74,387 acre-feet ofreturn flows resulting from different discharges up and down the Brazos River Basin determined to be available by TCEQ hydrology?

A. Yes.

Q. And those are the return flows that were given the October 15, 2004, priority date?

A. Yes.

APPLICANT'S MOTION FOR REIDlAR1NG MAy14,:20W

Q. Okay. And that-and none of those retUln flows, not any portion of them were allocated for use by Mr. Ware under either a 1997 priority date or any other priority date?

A. The retum flows were considered and - Q. Yes or no, Ms. Alexander.

A. No. Therefore, to the extent that the Commission's April 20, 2010 Order contains Findings of Fact whlch state that water is not available for continued appropriation in the Brazos River Basin, under the Brazos WAM, they are not reasonably supPOlied by substantial evidence when considering the record as a whole. Applicant's Exhibit No. 50 shows that 74,387 acre-feet of water per year are available in the Brazos River Basin in the latest version of the Brazos River Basin Water Availability Mode!.'

Texas law does not confer upon the Commission discretion to disregard the evidence of record. Tex. Gov't Code, §2001.l74(Z)(E) requires a reviewing court to reverse an order of the .

Commission that is not reasonably supported by substantial evidence considering the reliable probative evidence in the record as a whole. The only reliable evidence is that Mr. WffrC'S application never received a water availability review which referenced the amount of water now known to be available for appwpriation in the Brazos River Basin. The Commission's reliance on the outdated water availability infonnation included in Applicant's Exhibit No. 47, lmown to be superseded by more reliable ruld updated information in Applicant's Exhibit No. SO deprives the Commission's April 20, 2010 Order of any legitimacy under the law and constitutes an obvious abuse of the Commission's discretion.

I The Commission was only willing to lIse the evidence of water availability tlllder the Brazos WAM In favor of an appHcation filed by Brazos River Au!horlty, as shown in its adoption ofFlndfngs of Fact No-s. 42-52, MrUCANT's MOnON FOR RElreARJNG MAY 14, 2010 PAGE 8

IV. POINT OF ERROR NUMBER TWO

The Commission's April 20, 2010 Order violates the directives and requirements of Texas Water Code, §11.134 (b), regarding Commission action on water rights applications.

DISCUSSION

Pertinent requirements of Texas Water Code, §11.134(b) are: (b) The Commission shall grant the application only if: (I) the application comonns to the requirements prescribed by this chapter and is accom!>anied by the prescribed fee; (2) unappropriated water is available in the source of supply; (3) O,e proposed appropriation: (A) is intended for a beneficial use; (B) does not impair existing water rights or vested riparian rights; (C) is not detrimental to the publio welfare; (0) considers any applicable environmental flow standards established under Sectio" ILl471 and, if applicabJe, the assessments perfonned uuder Sections 11.147(d) and (e) and Sections 11.150, 11.151, and 11.152; and (E) addresses a water supply need in a marmer Ihal is consislent wilh the state water plan and the relevanl approved regional water pJan for any area in which the proposed appropriation is located, unless the commission determines that conditions warrant waiver oftbis requirement; and (4) the applicant has provided evidence that reasouabie diligence will be used to avoid WOSle ""d achieve water conservation as defrned by Section 11.002(8)(B).

The Findings of Fact and Conclusions of Law in the Commission's April 20, 2010 Order do not address the requirements of Texas Water Code, §11.134(b). To the extent that the Conclusions of Law ultimately denying Application No. 5594A flow from the Findings of Fact regarding water available for appropriation in the Brazos River Basin are not reasonably supported by substantial evidence when considering the record as a whole; are arbitrary 01' capricious or APPLICANT'S MonON FOR Rtll£.\llJNG l\1AY14,2010 PAGEY

characterized by abuse of discretion or clearly unwarranted exercise of discretion, the Commission's April 20, 2010 Order also violates Texas Water Code, §11.134(l;» as well. The Commission's Order states:

44. The addition of "new water," [return flows] if it were proved to exist, would be subject to all prior appropriation rights of sealor water rights holder and could not be treated as available for neW allocation.

Finding of Fact No. 44 presents an unlawful inte.rpretation of Commission requirements under Texas Water Code, §11.l34(b), which is only highlighted by the subsequent contradictory finding that:

45. The full amount [described in Finding ofFact No. 49 as 421,449 acre-feet of water per year] of the Brazos River Authority's reque<rted rerum flows become available only at the furthest downstream point in the basin; diversions at other points are possible due to specific facts and circumstances ofiliat application.

The Commission is charged with granting water rights applications when it finds that water is available for appropriation. Instead of discharging its statutory responsibilities in accordance with Texas Water Code, § 11.l34(b), and granting Applicant a continued right to appropriate 1SO Acre-feet of water dating from his July 1, 1997 pIiority date, the Commission's April 20, 2010 Order "aliocated" the water available for appropriation in the Brazos River Basin to a subsequent applicant, BRA.

ArrLlcANr'SMonON FOR REHEARJNG MAY 14,2010 PAGE 10

V. POmT OF ERROR NUMBER THREE

The Commission's April 20, 2010 Order is in violation of the requllements of Texas Water Code, §11.l381, regarding the consideration and granting of water rights permits for a telm of years.

DISCUSSION

Texas Water Code §11.1381 states: Sec. 11.1381. TERM PERMITS. (a) Until a water rightis perfected to the full extent provided by Section 11.026 of this code, the commission may issue permits for a tenn of years for use of state water to which a senior water right has not been perfected. (b) The commission shall refuse to grant an application for a permit under this section if the commission finds that there is a substantial likelihood that the issuance of the permit will jeopardize financial commitments made for water projects that have been built or that are being built to optimally develop the water resources of the area, (0) The commission shall refuse to grant an application for a term permit if the holder of the senior appropriative water right call demonstrate that the issuance of the tel1ll pennit would prohibit the senior appropriative water right holder from beneficially using the senior rights during tl,. tenn of the term permit. Such demonstration will be made using reasonable projections based on accepted method,. (d) A permit issued under this section is subordinate to any senior appropriative water lights.

Accordingly, even the Commission's unlawful recognition of the avallabilit), of return flows in the Brazos River Basin, albeit solely for use under Brl1Zos River Authority's ("BRA") pending water rights application, is unspoken Commission recognition that the evidence of record shows there is water available for appropriation for Applicant's diversion and use, at least for a term ofyears. BRA has only a pending application for a proposed appropriation. The water \ Al'PLlCANt'sMOTION FORREllEARlNG MA.¥ 14, 2010 PAGE 11

that the ColIl1llission's April 20, 2010 Order finds available for that proposed appropriation by BRA is, by definition, available to Applicant before any new appropriation by BRA is authorized by the Commission. Additionally, the evidence of record is that BRA is using only 20% of its e:rlsting Stillhouse Hollow Lake water right, the closest and most pertinent water light to Applicant.. Tex. Water Code § 11.1381 requires the holder of a senior appropliative water right to "demonstrate that the issuance of a term permit would prohibit the senior appropriative water right holder from beneficially using the senior right during the tenn of the tenn permit." In this case, there was no senior appropriator party-- BRA withdrew; and there could bave been nO demonstration of hann to BRA because it only has a pending application, not any right to appropriate the 421,449 acre-feet per year ofreturn flows found to he available for appropriation in the Commission's April 20,. 2010 Order. There was no demonstration of harm to any other existing water rights holder in the Brazos River Basin, on the facts of record ill this contested case hearing.

MPLICANT'S MOTION FOR RF.llEARlNG MAV14,ZOlO PAGE 12

VI. POINT OF ERROR NUMBER FOUR

The Commission's April 20, 2010 Order violates the fundamental doctrine of water rights law of "fu:st in time, first in right," as sot forth in the Texas Water Code, Chapter 11.

DISCUSSION

Texas water law establishes. long ago the prior appropriation doctrine of "first in time, first in. right" to resolve disputes between appropriators and potential appropriators of State water. The Texas Legislature codified the doctrine in the Texas Water Code, § 11.027 and further defined the priority of an appropriation at Texas Water Code, §11.141. When the Conunisslon issued Mr. Ware's original Permit No. 5594 in "Appropriate and Use State Water" in 1997, the Commission's inclusion of Special Condition 3(b) merely memorializes the "fu:st ill time first ill right" doctrine in Texas Water Code, §11.027 and §11.141. Special Condition3.(b) states: "The priority date ofthls permit and all extensions hereof shall be Jnly 1, 1997." Sections 11.027 and 11.141 protect the appropriation of Slate water, not an application for the appropriation for a proposed appropriation of State water. The intent of the Texas Water Code is obvious, on this point. The priority date of July 1, 1997 establishes the priority of Applicant's appropriation; Tex. Water Code, §11.141 states: Sec. 11.141. DATE OF PRIORITY. When the commission issues a pennit, the priority of the appropriation of water and O,e claimanes right to use the water date from the date of filing of the applloation. n,e priority date applies to the original appropriation, regardless of whether the appropriation is authorized for a term of years or in perpetuity. Where the appropriation is perpetual, the date of the original application for same wOllld not change. When the appropriation is for a term of years, necessitating re-application if the appropriator wished to retain the water tight, there could be confusion about which "application" date controlled. Logically, on a renewal of au existing appropriation it would remain the date of the original application. However, the Commission ill ArPLICANr'S MOllON FORRElJI:.\WNG MAY 14,2010 PAG£13

1997 eliminated ali confusion and ambiguity by expressly interpreting Texas Water Law and including Special Condition 3(b) ofPer!llit No. 5594.

When the Executive Director and, ultimately, the Commission, changed Mr. Ware's priority date to January 5, 2006 [Finding ofFMt 48] the action violated §11.l41 of the Water Code and §2001.174(2)(A) of the Government Code. Mr. Ware was deprived of a property right conferred by the original Commission order issuing Permit No. 5594 without any notioe and opportunity to respond to the removal of the right. A new, far less senior priority date was used, improperly, in the Exe.cutive Director's November 14,2006 Water Availability Review of Mr. Ware's application and in the denial of Mr. Ware's application. Therefore, the Commission's order denying Mr. Ware's application on the basis of the change in priority date, also violated Tex. GO'll'!. Code §2001.174(2)(C).

APPLIChN'f'S MonON FOil REBEIJONG MhY14,2010 l'AGE14

vn. POINT OF EUROR NUMBER FIVE

The Commission acted arbitrarily and capriciously to deprive Applicant of any continued right to divert and use any water at any time for Ware Fann under Pennit No. 5594, an authorized appropriator, on the stated basis of no water available for appropriation, while at the same time granting water rights for new appropriations and issuing statements of water availability for other applicants, new permittees, and other water rights holders.

DISCUSSION

The Commission's unlawful insistence on the absence of water available for a requested acre-feet per year appropriation for Applicant's Ware Farm in this case stands in stark contrast to its detennination of water availability for other appropriations. Without contested case hearings, the Commission issued water lights fur perpetual permits to the City of Bryan and the City of College Station. During the pendency of this proceeding, the Commission granted Permit No. 5912 to the City of Bryan on February 5, 2010, authorizing the diversion and use of .

14,282 acre-feet (less losses) of tbose return flows [returned to a surface watercourse in the Brazos River Basin] per year with not priority date. Also during the pendency of this prooeeding, the Conunission granted Permit No. 5913 to the City of College Station, also on February 5, 2010 authorizing diversion and use of 12,88 J acre-feet (less losses) of those return flows [ret\ll1J.ed to a surface watercourse in the Brazos River Basin] per year with no priority date. And, of course, in this case, the ConnniRsion's April 20, 2010 Order found water available for a proposed appropriation by BRA, even though BRA is 1I0t a party to this case.

Effective March 10, 2005, ahuost eight years after Applicant's autholized appropriation, BRA, the City of Abilene, and West Central Texas Munioipal Water Dl8trict entered into an agreement on file with TCEQ regarding in part, the water proposed to be appropriated under BRA's pending water rights application (and, at the same time, the water requested for appropriation by Applicant), conferring upon each other water rights "for so long as any of the Parties' water rights referenced in this Agreement remain in effect." The Conunission's April Al'rLlC>lNT'S MonON FoR REIlEAlUNG MA1(14,2010 PAGElS

20, 2010 Order then, effectively supports the unlawful allocation of water to the parties to this agreement in violation of Texas Water Code §11.027. Other parties who "settled with BRA," include the City of College Station and the City ofBtyan. Consequently, the Commission's April 20, 2010 Order is founded upon the unquestionably unlawful procedme of allowing a water rights holder to determine the allocation of Slate water available for appropriation.

Consequently, the Commission's April 20, 2010 Order denying Applicant's amendment application is madc through the unfair and unlawful procedure of denying somo Applicant's access to water available for appropriation in the fonn of return flows or updated information on water availability. Texas Water Code §11.046(c) states:

§11.046(c). Except as specifically provided otherwise in the water right, water appropriated under a permit, certified filing, or certificate of adjudication may, prior to its release into a watercourse or stream, be beneficially used and reused by the holder of a permit, certifie<l filing, or certificate of adjudication for the purposes and locations of use provided in the permit, certified filing, or certificate of adjudication. Once water has been diverted under a permit, certified filing, or certificate of adjudication and then retumed to a watercourse or stream, however, it is considered surplus water and therefol'e subject to reservation for insll'ealn uses or beneficial inflows or to appropriation by others unless c:,:pl'essly provided otherwise in the perroit, certified filing, or certificate of adjudication. [Emphasis supplied.]

The Commission's order, which recognizes the presence of "the full amount [421,449 acre-feet of water per year] of BRA's requested return flows," but also denies that 150 acre-feet of water is available for Applicant's continned appropliation, is founded upon unlawful procedure. The Texas Water Code and COlmnission lUles do not provide for reservation of state water available for appropriation to future applicants. There is no law or lUle, and conse<juently no legal justification for the Commission's actions denying a re<juested appropriation for Ware Farm while granting perpetual or long (enn pewits for other later applicants and appropriators.

The importance of fair and accurate watex availability analysis by the Commission, has its basis, not oniy in the Texas Water Code, but also in ptinciples of fundamental fairness, and ArPLICANT'S MOTION FOR REITEAlUNG MAV14,2010 PAGE 16

prohibition against property deprivatioll witilout compensation Ot due process, under the Constitution of the United States of Amedca and the Texas Constitution. Water rights are property rights, and the termination or denial of those rights witilou! just cause or fair compensation amounts to an unauthorized use of the State's police powers. The Commission, in every water rights case, must act in a just and reasonable way. Secret deals with applicants, reliance on erroneous or outdated data, refusal to apply filets as dictated by statute, operating in accordance with non-existeut roles and procedures unlawfully compromise tile Connnission's water rights regulAtion. Above everything, Applicant should uot be denied under Commission procedures which determine water availability based on unspecified proceclures and non-public mles which favor some applicants over others \vitiloul regard to the statutory mandate, "As between appropriators, tile ftrst in time in the fast in right.

Apparently, tile Commission misled Applicant in 1997 when it issued a term pennit, but issued perpetual water rights to later Brazos River Basin applicants. Now, tile Commission's April 20, 2010 Order compounds its previous errors by continuing to deny Mr. Ware access to water available for appropriation in the Brazos River Basin.

M?!.JC>INT'S MOTION 1'01< REHMruNG MAY 14, 2010 PAGE 17

YIlL POJNTOFERRORNUMBERSIX

The Commission's April 20, 2010 Order adopted of Findings of Fact pertalning to a . pending non-party applicant; Moreover, the details of said applicant's pending application and proposed appropriation were unlawfully used as a basis to deny Applicant's water right application.

DISCUSSlON

The Commission's April 23, 2010 Order contains Findings of Fact 45,49, 50 and 51; which refer to the unidentified application of Brazos River Authority, a non-party. 'These findings of fact regarding the ongoing contested applicatiou of a non-party were used as a basis to deuy Mr. Ware's application. Therefore, the Commission order violated Tex. Gov'!. Code §200l.174(2) because the decision was made through \m1awful procedure [§2001.174(2)(C)]; it was not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole [§2001.174(E)]J; and was arbitrary and capricious and was characterized by an abuse of discretion [§2001.174(F)]. The referenced Findings of Fact Nos. 45,49,50 and 51 appeal'\o refer to BRA's pending water rights AppJlcationNo. 5851. However, as of its April 14, 2010 consideration of the Proposal for Decision in Applicant's case, the Commission had yet to even consider that pending application in an open meeting lawfully convened pursuant to the Texas Open Meeting Act, Tex. Gov't. Code Chapter 551 et. seq. and, of course, had not rendered any final order granting all or any portion of BRA's proposed appropliation. [See Tex. Gov'!. Code §2001.005(a)]

On April 28, 2010, the Commission referred BRA's Application No. 5851 to the State Office of Administtative Hearings ("SOAR"), granting the requests for a contested case hearing of several protestants. The hearing before SOAR is subject to the Texas Rules of Evidence in a non-jury civil trial. (See Tex. Gov'!. Code §2001.081) BRA was not a party to Mr. Ware's application, and no witness on behalf of BRA was sponsored to verify any portion of Application 5851 0)' any other application filed by BRA. Even more importantly, Applicant was provided no opportunity to cross exanline or otherwise detennine the validity of any evidence associated with Al'~UC<lN1"SMoTION FOR REl!EA.lUNG MAvl4,2010 PAGElS

BRA's application or the supposed evidence which mayor may not support the Findiugs of Fact Nos. 45, 49, 50 or 51 in the Commission's April 20, 2010 Order. (See Tex. Gov't. Code ~2001.087) Therefore, in den)1ng Mr. Waxe's application based on unsupported evidence from a pending application of a non-party the Commission's April 20, 2010 Order amounts to a taking of Mr. Ware's property without the benefit of any procedural due process, in direct contravention of the Article XlV of the U.S. Constitution. In that regard, the Commission's order also violated the TexasConstitution, Art. 1, Sections 3 and 19, and Tex. Gov't. Code §2001.174(A).

There is little doubt. about the damaging impact of the referenced findiugs on Mr. Ware's application. The most significant Findings of Fact Nos. 49, 50 and 51 were iuc1uded iu a section of the Commission's order labeled "PriOlity dates." In Findings of Facts 40 and 41 (which directly contradict the Commission Finding of Fact 47) the Commission established the inlportance of an applicant's priority date iu the Commission's detemllnation of water availability. Then, the Conmllssion directly compares BRA's alleged priority date to a less senior priority assigned to Mr. Waxe's application (Finding of Fact 48) rather tban the date included iu his pennit (Finding of Fact 46). In so doiug, the effect of the Commission's order was to deny Mr. Waxe's application in favor of another pending but undecided application. Morcover, the Commission's Fiuding of Fact 51 violates Tex. Water Code §11.141 by implying that the pending BRA application has already resulted in a valid appropriation of water. That section of the Water Code provides!

"DATE OF PRIORlTY. When the Commission issues a permit, the priorily of the appmprialion of water and the olaimant's tight to lISe the water date from the date offiliug orthe application." [Emphasis supplied.]

Texas Water Code, §11.141

Applicant did not agree to use information about BRA's pending application or waive his objection to receipt of infonnatioll about BRA's application into his heming record. Applicant offered the Executive Director's 2008 Water Avallability Review to the AU for the limited MPUCJ\NT'S MonON FOR RJ;IIl>AJUNG lVU.Y 14,2010 PAGE 19

purpose of establishing that it was the most current water available analysis performed by the Executive Director of !lie Brazos River Basin. )ll that review (App. Ex. 50) the Executive Director updated the Brazos WAM that had been used two years before in its review of Mr. Ware's application. The fact that the Executive Director found that 74,387 acre-feet afwater was available in the Brazos River Basin using the same reliod of record as was used in Mr. Ware's Water Availability Review was relevant and probative infonnation for the Commission's consideration of Mr. Ware's application. The fact that another applicant (or any other applicant) may have also applied for the water available for appropriation is il1'eievant to any issue in this case. Applicant strenuously objected to the admission of any evidence about BRA's application during Mr. Ware's healing for the reasons discussed herein. The Commission's inclusion of any information -about BRA or its pending application is objectionabJe and unlawful.

APrLIcANT's MonON Foll. RE[jE~RING lV/Ay14,2010 PAGE 20

IX. SUMMARY The Commission's April 20, 2010 Order denying Mr, Ware's application to appropriate acre·feet of water per year from ilie Lampasas River, Brazos River Basin. violates the Texas Water Code, ilie Texas Constitution, and ilie Constitution of ilie United States and is voidable and reversible. Apart from being unl"v,ful, ilie Commission's role in administering water rights is called into question when it denies a family fatmer access to water available for appropriation in ilie Brazos River Basin for any term at all on ilie one hand, and supports contractual water rights, and issues perpetual penni!s for use of State water associated wiili retum flows and updated streamflow conditions and data sets on ilie oilier hand. Applicant requests ilie Commission rehear this caSe and reverse its unfau' and unlawful decision.

Al'~LlCI>NT'S MOTION FOR REIJEAlUNG M'Av14.2010 PAGE 21

WHEREFORE, CONSIDERING TIlE FOREGOJNG, Applicant asks the Texas Commission on Environmental Quality to vacate its unlawful April 20, 2010 Order denying the Application of Bradley B. Ware to Amend his Permit to Appropriate State Water No. 5594, and issue lawful order based on the evidence of record and tile Texas Water Code and all applicable law which grants Applicant a right to divelt and use 150 acre-feet of water per year for agricultural purposes at Ware Farm, a Texas Century Farro, in accordance with the Commission's updated detenninations of water availability in the Brazos River Basin.

Respectfully Submitted,

WEBB & WEBB Attorneys at JAlW Southwest Towers Bast 7fi1 Street Austin, Texas 78701 (512) 472·9990 Telephone (512) 472-3183 Facsimile Stephen P. Webb State BarNo. 21033800

Gwendolyn I Webb State BarNo. 21026300

ATI'ORNEYS FOR APPLICANT, BRADLEY B. W ARB

<U'PLICANT'S MotiON FOR IlliR:EAl<lNG MAY14,~QlO PAGE 22

CERTIFICATE OF SERVICE I hereby certify that I have this 14th day of May, 20)0, served copies oftlle foregoing Applicant's Motion for Rehearing upon the parties to this proceeding, whose full and complete names and addresses appear below, by electronic mail, by certified mail, facshnile, hand delivery, andior regular U.S. mail.

Honorable Paul Keeper Administrative Law Judge State Office of Admi:olstrative Hearings P.O. Box 13025 Austin, Texas 78711-3025 Shana Horton, Staff Attorney James Aldredge, Staff Attorney 0 Texas Commission on Environmental Quality ::l: r::J iii 6 0 Z Environmental Law Division MC-173 .." ~ "'0 sO P.O. Box 13087 Austin, Texas 78711-3087 "r .." -< 8:.. ,~.., s~m* ~0 ;;..<;; ") "" Garrett Arthur, Attorney C) ~ "-<:7"0 Texas Commission on Environmental QUality -'J ." -f-? 22 jl Public Interest COUllSel MC- 103 P.O. Box 13087 '" 1'1 0.

Austin, Texas 78711-3087 Bradley B. Wru:e Gann Brach Road Killeen, Texas 76549

~o~~ Gwendolyn Hi] ebb .

AJ>~LICANr'S MonON Fon REltEhlUNG l\1hv14,2010 PAGE 23

Exhibit C J nne 7, 2006 Letter from BRA regarding Conditions of Withdrawal of Protest Bickerstaff, Heath, Pollan &Caroom, L.L.P. Oollgre" Avenu. Sull. 17\10 Austin, Texas 18101 (512) 412-8021 Pax (612) 3UJ.5638 www.blck....t.ff.c<>m

June 7, 2006 ~, -.,}

App. Exh. _ f..( , __ 2 Q;~ 0 2: Via Hand DelivelY q:j fo" n"-:; ~ ~~ Ms. LaDonns Castaiiuela Office of the Clerk, MCI05 OPA \\ <:/3 I "-J ~~f~~ • :f'(!J¥? .. '~8:;) Texas Commission on Environmental QUality JUN 0 7 20Jt, 0 "" "" .)

12100 Park 35 Circle, Building F, 1st Floor Austin, Texas 78753 Re: Application No. 5594A by Bradley B. Ware ay_~ .r,! ~~r?! :B IY; W vJ :.; de: ,-1 f':

Dear Ms. Castafiuela: On behalf of the Brazos Rivet Authority (BRA), I protest the above-referenced application and request that a contested case hearing be held on Application No. 5594A.

BRA holds the following water lights in the Brazos River Basin, both upstream and downstream of Water Use Permit No. 5594: Certificate No. 12-5155 (Possum Kingdom Lake); Certificate No. 12-5156 (Lake Granbury); Certificate No. 12-5157 (Lake Whitney); Certificate No. 12-5158 (Lake Aquilla); Certificate No. 12-5159 (Lake Proctor); Certificale No. 12-5160 (Lake Belton); Certificate No. 12-5161 (Lake Stillhouse Hollow); Certificate No. 12-5162 (Lake Georgetown); Certificate No. 12-5163 (Lake Granger); Certificate No. 12-5164 (Lake Somerville); Certificate No. 12- 5165 (Lake Limestone); alld, Pelroit No. 2925A (proposed AlIens Creek Reservoir). One or more of these rights may be impaired if Water Use Permit No. 5594 is changed from a tenn permitto a permanent water right.

BRA would withdraw its protest and request for a contested case hearing ifand only ifWater Use Penni! No. 5594, as amended, includes a special condition that it remain a term pennit with all expiration date no later than November 7, 2017, which would be a IO-year extension of its present term.

Additionally, BRA would not be opposed to the authorization to irrigate on additional 31 acres and to the use of an additional 20 acre-feet of water per annum, provided Water Use Permit No. 5594, as amended, remains a term permit with the special conditions as noted herein.

Thank you for you attention to this matter. I request that BRA and I be placed on all notice lists so that it may receive notice of all fhrther actions with regard to Application No. 5594A.

Sincerely, ~~~ Btuce Wasmger BWlbc cc; Lauralee VaUoll David Wheelock Brazos River Authority Exhibit D Excerpts of Transcript Volume No. 1 of Hearing conducted October 28, 2009 r;:::.\ \.::../ 1 1 SOAH DOCKET NO. XXX-XX-XXXX 2 TCEQ DOCKET NO. 2008-0181-WR APPLICATION OF BRADLEY B. ) BEFORE THE STATE OFFICE WARE TO AMEND ) OF WATER USE PERMIT NO. 5594 ) ADMINISTRATIVE HEARINGS ADMINISTRATIVE LAW JUDGE: HON. PAUL D. KEEPER ,/: ****************************************************** 13 TRANSCRIPT OF PROCEEDINGS 14 TAKEN ON OCTOBER 28, 2009 15 AT AUSTIN, TEXAS 16 VOLUME 1 PAGES 1 - 249 ****************************************************** 21 TRANSCRIPT OF PROCEEDINGS, VOLUME I, taken in the above-styled and numbered cause on the 28th day of October, 2009, from 9:01 a.m. to 5:01 p.m., before C. Mack Lane, CSR, in and for the State of Texas, reported by machine shorthand, at State Office of Administrative Hearings, 300 West 15th Street, Austin, Travis County, Texas 78201, pursuant to the rules of the Texas Administrative Code, the Texas Water Code, and the Texas Rules of Civil Procedure.

ALArID CITY REPORTING (210) G9:D:54 1 we'll get to the issues involving the Texas Water Code G9:24:00 2 briefly. Please proceed.

09:24:04 3 MR. WEBB: All right.

09:24:04 Q. (BY MR. WEBB:) What is -- what is this page, 09:24:08 5 r~r. Wa re?

09:24:08 6 A. This is my father, Elwood Ware, Sr., on his 09:24:14 Farmall tractor there and he used to row water back in 09:24:20 8 the '30s and '40s.

09:24:20 Q. Okay. And what is Exhibit-2A -- or page 2A?

09:24:28 10 A. This is the thrashing where they harvested 09:24:32 11 grain where all the neighbors would get together and 09:24:34 12 thrash the grain back in the 1800s.

09:24:40 13 Q. Okay. And we've got one more. By the way, 09:24:46 14 was 2A an actual picture of the Ware Farm?

09:24:50 A. Yes. All these are actual pictures of the 09:24:54 16 farm.

09:24:54 17 Q. Has Ware Farm been using water historically?

09:24:58 A. Yes. My grandfather used to pump water 09:25:00 19 minimally I would say, you know, during his time and 09:25:02 20 all to water the cows and to do some of the crops like 09:25:06 21 that and then my fathe r du ring the '30s, '40s, '50s, 09:25:08 22 he would what I would call heavily row water very 09:25:14 23 what we would consider wasteful watering nowadays in 09:25:18 24 today's technology, but that was the biggest heaviest 09:25:20 25 time during my dad's farming.

ALAMO CITY REPORTING (210) 710-3890 09:25:24 1 Q. And is it your understanding that" one of the 09:25:26 2 issues in this case is the historical use of water as 09:25:32 part of your application?

09:25:34 4 A. Yes.

09:25:34 5 Q. Okay. Very good. What are we looking at 09:25:36 now? What page is that?

09:25:36 7 A. This is the family cemetery.

09:25:40 8 Q. Could you provide the judge a little bit of 09:25:46 9 the actual location of the farm relative to the area 09:25:50 10 that you're applying for?

09:25:52 11 A. Well, it's in Bell County. As I said 09:25:54 12 earlier, it's 261 acres. It's landlocked. There's 09:25:58 13 four neighbors landlocked inside the Parrie Haynes 09:26:02 14 Ranch which is 4500 acres. It's run by Texas Parks & 09:26:04 15 Wildlife.

09:26:06 16 I would have to say the Ware Farm is the 09:26:08 17 best part of Parrie Haynes Ranch. They've only got 09:26:10 18 maybe a quarter mile of river above me and down below 09:26:14 19 us and I have two miles of the very best farmland.

09:26:18 20 The terrain is similar. Ours has been kept up over 09:26:24 21 the years of the cedar control, the fields being 09:26:28 22 cleaned, the grasses and stuff like that and Parrie 09:26:32 23 Haynes Ranch is heavily wooded and in dire need of 09:26:36 24 some improvement, you know, from the fencing to the 09:26:38 25 brush control and stuff.

ALAND CITY REPORTING (210) 710 - 3890 09:26:45 1 Q. Okay. Now, you mentioned earlier that your 09:26:48 2 family used to row irrigate. What is rolV irrigation?

09:26:52 3 A. Row crop irrigation is where you put beds or 09:26:56 4 burrows or list the field and you run the water down 09:27:00 5 every other row. You pump it -- this picture you see 09:27:02 6 up here is the .. was the pump station way back then 09:27:04 7 where they pump it to high ground and let it free flow 09:27:13 8 down the fields and crops to .. and, as I said 89:2"1:14 9 earlier, technology has increased so much that this 09:27:18 10 was terribly wasteful .back in the days and my dad n:27:M 11 realized it was wasteful and kind of give up hopes of 09:27:28 12 irrigation back in his days and it got shut down in n:v:§ 13 the '60s or '70s.

09:27:32 14 Q. Incidentally, the judge wanted to know a n:V:34 15 little bit about why Ware Farm doesn't have a ":V:36 16 permanent water right that you obtain through the 09:27:40 17 adj udication process. Could you enlighten the judge a n:v:. 18 little bit about why that is?

09:27:48 19 A. My daddy got up into his 60s or so and ":v:~ 20 physical stress kept him from work. It's a matter of 09:27:56 21 lots of work and rubber boots and stuff Uke that and 09:27:58 22 all. He knew how much .. he used to drive a pump off ":a:~ 23 the tractor a lot of times. He knew the amount of ":a:M 24 fuel that it took to pump that water and of course his ":a:0825 mind set was the way he watered it. He doesn't AlAI10 CITY REPORTING (210) 710-3890 09:28,10 1 understand about new technology that's come along.

09:28,14 2 So he had given up hope and during the 09:28:16 3 '70s, my dad and mother went to through a tremendously 09:28:20 4 bitter divorce from cattle being shot, the barns being 09:28:24 burnt, and this was over a 10-year period, you know.

09:28:26 I mean a violent situation. So my mother's deal was 09:28:30 7 to destroy the farm because that's what he loved and 09:28:32 my dad!s ~eal was to save the farm because that's what 09:28,36 he loved.

09:28:36 10 So water he had slowed down and might 09:28:38 never quit at that time. Water was the least of his 09:28:42 worries and the sad part about that is that was during 09:28:44 the '70s during the adjudication period whenever I was 09:28:48 still young and didn't know any better and we did big 09:28:52 lick. We dropped the ball there to be able to get 09:28:56 16 that water, but the water was used before that and 09:29:00 I've tried to straighten that up.

09:29:06 18 Q. Has water in fact been used on Ware Farm 09:29:10 continuously since 18747 09:29:12 20 A. Yes. We -- even when my dad was shut down in 09:29:16 21 the '70s, I still went and set the sma n _. Vie had a 09:~:W 22 little pump and heat motors and we set the pump and ":~:22 23 pumped water to the windmill tanks and filled them ",~:~ 24 because the wind didn't blow during the summertime so ":~:D 25 we had to depend off of the river water to water the ALAHO CITY REPORTING (210) 710-3890 09:29:32 1 cows not to mention the garden and little small 09:29:34 2 patches here and there of ribbon cane or something 09:29:36 3 like that that we might be growing at that time.

09:29:38 4 Q. Do you operate Ware Farm as a business today?

09:29:40 5 A. I try to. That's kind of a tricky thing now 09:29:44 6 days to say what is a farmer. My thought was back 09:29:48 7 whenever my grandfathe~'s farm and that's all he did.

09:29:52 8 Nowadays I pick up welding jobs and stuff like that in 09:29:58 9 town because I have the equipment, I have the ability, 09:30:00 and I can put it into my schedule and all, but to say 09:30:04 11 I'm a 100 percent farmer myself, I can't say that.

09:30:10 12 Probably y'all would. But I work 24 hours a day and I 09:30:14 13 work seven days a week. I don't take vacations. I 09:30:18 14 enjoy what I do. When I'm out there working whether 09:30:20 15 it's building a fence or setting irrigation pipe, I 09:30:~ 16 enjoy that.

09:30:26 17 Q. How many acres do you have cultivation 09:H:H 18 presently?

09:30:30 19 A. There's about 180 acres. You know, I'm H:H:TI 20 improving things. I'm turning some into native H:H:~ 21 pasture. It's rocky type soil or something like that H:H:H 22 so it bounces back and forth.

09:30:38 23 Q. What is page 6 of Exhibit-I?

09:30:40 24 A. That's my small valley irrigation system.

09:Y:" 25 I've got four different systems on the place.

ALANO CITY REPORTING (210) 710-3890 09:57:12 1 A. Yes, I'm still paying for it.

09:57:14 2 Q. Okay. Go on.

09:57:16 3 A. But we had the irrigation system laying in 09:57:18 4 the field bolted together and fixing to stand it up 09:57:20 and put it on the tires and Brazos River Authority 09:57:22 phoned and says ·We have run into a snag or a problem 09:57:26 with your permit," and I said, "Well, what do you 09:57:30 mean? I've got a contract. You know, the pivot is in 09:57:34 the field. I hired -- I paid the electric company 09:57:38 $15,000 to move electric poles out of my field where 09:57:40 this pivot could make a circle. I took out fences. I 09:57:44 12 removed trees to clear for this to get the advantage 09:57:48 of the full size I could go with." And they said __ 09:57:52 well, TNRCC at that time said that we can't sell water 09:57:56 upriver. It's kind of a layman's term that I got out 09:58:00 of it. I never understood the full story I guess I 09:58:04 should say.

09:58:06 18 But, anyhow, it turned out there was 09:58:08 about ten eight or ten different people that had 09:58:12 talked to Brazos River Authority, was lining up 09: 58: 14 contracts, looking at the possibility. There was two 09:58:18 22 of us that had actually written contracts buying this 89:58:24 water and I didn't know about the other fellow. He's 09:58:26 upriver from me about seven or eight miles. And so I 09:58:32 25 said, IIWell, what are we going to do? We've got ALAr40 CITY REPORTING (210) 710 - 3890 09:58:36 irrigation stuff in the field. We have spent $75,000 09:58:3B already. You know, there's fixing to be a lawsuit 09:58:40 here because you're going to buy that irrigation 09:58:44 equipment. I can guarantee you that," And they said 09:58:46 "Well, let's see what we can do." 09:58:48 6 So they sent their lawyer out of Waco, 09:58:50 which I was very impressed at that time, instead of 09:58:54 just blowing us off. They went to Austin -- and I 89:58:56 remember this was in '96 when all permits was 09:58:58 suspended at that time. There was no way you could 09:59:02 get water they said. They went down there and 09:59:04 12 negotiated several trips. They kept us informed, me 09:59:06 and the other fellow.

09:59:10 14 The lawyer eventually got back with -- 09:59:14 the Brazos River Authority lawyer got back with us and 09:59:16 said we've worked out a deal with the state to where 09:59:18 we can get your water and so I got -- and of course 09:59:22 when I applied back then, I applied for permanent 09:59:26 water because I knew this was a 20-year deal. I knew 09:59:28 that there's a possibility in the future that we would 09:59:32 always need water and they said 10-year permit is all 09:59:34 you could get.

09:59:36 23 So I got that because that's all I could 09:59:38 get and they said, well, it' 5 kind of like you r 09:59:40 25 problem. In 10 years we should be able to work out ALAI10 CITY REPORTING (210) 710-3890 09:59:44 something, you know, and so now we're to that 10-year :59:46 deal. I know they stressed that you need to make sure 09:59:48 your application gets in a couple of years in advance 09:59:52 for getting it through the system and so -- 09:59:54 5 Q. \lI}eH, that brings us to I"here we are now.

09:59:56 Would you identify what's been marked as Exhibit-2?

10:00:06 7 A. This is the 5594 water permit that -- my 10:00:10 8 short-term -- 10 year.

10:00:12 9 Q. Now, is Exhibit-2 your entire application?

10:00:~ 10 Take a look at it.

10:00:22 11 A. Yes, I believe so. I went through back there 10:00:26 12 and filled out the conservation plan and all the 10:00:28 13 deals.

10:00:30 14 Q. Incidentally, has the Commission told you lO:N:~ 15 that there's a problem with the conservation plan?

10:00:38 16 A. No. I've met all criteria except the water 10:00:40 17 availability is my understanding.

10:00:46 18 Q. All right. And is your signature on lO:H:~ 19 Exhibit-2?

10:00:50 20 A. Yes.

10:00:50 21 MR. WEBB: Your Honor, we offer 1O:N: 52 22 Exhibit-2.

10:00:54 23 JUDGE KEEPER: Any objection?

10:00:54 24 MS. HORTON: No objection. lG:OO:56 25 JUDGE KEEPER: Admitted.

ALAt-!O CITY REPORTING (210) 710-3890 10:47:20 of the water available for a particular permit?

10:47:26 2 A. As far as I know, yes.

10:47:26 3 Q. What do you mean as far as you know?

10:47:32 A. I don't know how it reads.

10:47:36 Q. Well, I don't either. That's why I was 10:47:38 asking. So it's a determination of the Executive 10:47:42 7 Director, isn't it?

10:47:42 8 A. Yes.

10:47:42 9 Q. Of the water available for a particular 19:47:46 10 application?

10:47:48 A. Yes.

10:47:50 12 Q. Okay. What is a Water Availability Model?

10:48:80 13 A. The Water Availability Model is -- I can 10:48:02 speak specific to our Water Availability Models that 10:48:04 15 we use as opposed to a generic Water Availability 10:48:08 16 Model.

10:48:08 17 Q. I'm sorry. Mr. Thomas, I should have been 10:48:10 18 more specific. I only want to hear about the Water lO:U:14 19 Availability Model that you use in the agency.

10:48: 16 20 A. Okay. A Water Availability Model -- Water 10:U:H 21 Availability Model -- our Water Availability Models 10:48:H 22 are designed to simulate the water permits in the 10:48:38 23 basin and the water supply in the basin in priority 10:48:G 24 order and to determine if when all of the senior water 10:.:9 25 rights have been satisfied that there's additional ALN10 CITY REPORTING (210) 710-3890 lO:g:~ 1 water available.

10:46:56 2 Q. But it's computer simulation, isn't it? , 10:48:58 3 A. Yes.

10:48:58 4 Q. And the compute r simulation is two pa rts, the 10:49:02 actual software program, isn't it?

10:49:04 6 A. Yes. There's a WRAP program, which is the 10:49:88 word tran program that actually runs the data set.

10:49:12 The data set is the input deck. The WRAP program can 10:49:18 be used for different data sets. We use them as 10:49:22 different basin models and then the specific data set 10:49:28 that was used here is the Brazos data set which is the 10:49:32 input deck. The input deck or the data set has the 10:49:38 specific water rights in the Brazos Basin, their 10:49:42 14 priority dates, their relation to each other, their 10:49:46 drainage areas, naturalized flows. The WRAP program 10:49:48 basically orders and runs calculations on that data.

10:49:54 17 Q. Okay. You've been in the Water Availability 10:49:58 Department what? 11 years. Has the Executive 10:50:04 Director always used the current Brazos Water 10:~:10 20 Availability Model?

10:50:10 21 A. No. 10:50:10 22 Q. What did he use before then?

10:50:14 23 A. To my knowledge it was before I was 10:50:16 24 wo rking at the TCEQ, but to my knowledge there vlere lO:~:H 25 previous models used, legacy models, and after a .----.~--.

ALAMO ClTY REPORTING (210) 710-3890 11:50:04 sorry. We offer Exhibit-54.

11: 50: 12 2 JUDGE KEEPER: Any objection to the map?

11:50:14 3 MS. HORTON: No objection. It's fine.

11 :50: 16 4 JUDGE KEEPER: Exhibit-54 is admitted.

11:50:16 5 (Applicant's Exhibit-54 admitted) 11:50:20 6 Q. (BY MR. WEBB:) Would you identify what's 11:50:20 been marked as Exhibit-47?

11:50:30 8 A. This is a copy of my Water Availability :50: 32 Review memo for Mr. Bradley Ware's application dated 11:50:36 Hl November 14, 2006.

11:50:36 Q.

11 And so this is your actual one - - the one 11:50:38 that's at bar in this case, correct?

11:50:40 13 A. Yes.

11: 50:42 14 Q. Now, you were here when Ms. Ho rton stated the 11:50:50 15 reason why the Executive Director is here?

11 :50 :52 16 A. Yes.

11:5G:52 17 Q. And it was a disagreement of whether there 11:50:56 was water available?

11: 50:58 19 A. Yes.

11:50:58 20 Q. And would it be fair to say that the reason 11:51:02 21 why everybody is in this room now is because of 11:51:% 22 Exhibit-47?

11:51:12 23 A. I suppose so, yes.

11:51:14 24 Q. Not to put any pressure on you.

11:51:18 25 A. Thank you for that .. It's at the heart of ALAI·IO CITY REPORTING (210) 710-3890 11: 51: 22 everything, yes, sir.

11:51:24 2 Q. Right. This is where the Executive Director 11:51:24 determined through you that there was no water 11:51:30 availab le -- 11:51:36 5 A. Yes.

11:51:36 6 Q. for Mr. Ware or unappropriated water 11:51:34 available?

11:51:34 8 A. Yes.

11:51:42 9 MR. WEBB: Your Honor, off the record, 11:51:46 10 please.

11:51:46 11 JUDGE KEEPER: Let's go off the record 11:51:46 12 for a moment.

11:51:46 13 (Recess from 11:51 a.m. to 11:53 a.m.)

11:53:34 14 JUDGE KEEPER: It's five minutes to 12.

11:53:36 15 Why don't we get back here at 1 and we'll start again.

16 (Noon recess was taken from 17 11:53 a.m. to 1:04 p.m.)

ALAND CITY REPORTING (210) 710·3890 13:11:20 1 Q. Based on an article of faith?

13:11:22 2 A. And based on working models that are still 13:11:28 working, yes.

13:11:28 4 Q. Based on an article of faith?

13: 11: 32 5 A. Okay. Sure.

13:11:32 6 Q. You agree with that?

13:11:34 7 A. Sure.

13:11:34 8 Q. All right. Referring to Exhibit-47 right 13:11:58 under Water Availability Review, would you please read 13:12:82 10 the last full sentence of that first paragraph?

13:12:06 11 A. "The applicant's request was modeled with a 13:12:88 priority date of the administrative complete date of 13:12:12 l3 the application, January 5th, 2006." 13:12:16 14 Q. An right. Let me stop you there for a 13:12:18 moment -- well, not stop you. That's all there is to 13:12:20 16 say. Priority date is important for a model because 13:12:26 that determines -- that's one of the variables that 13:12:30 determines whether or not the unappropriated water is 13:12:32 available, right?

13:12:34 20 A. Yes.

13: 12:34 21 Q. As a matter of fact, it's a pretty 13:12:36 substantial one, isn't it?

13:12:38 23 A. Yes.

13:12:38 24 Q. Because after all first in time is first in 13:12:42 right. That' 5 the rule, right?

AlAI~O CITY REPORTING (210) 710-3890 13:12:44 1 A. Yes.

13:12:44 2 Q. And so the earlier priority date gives the 13:12:52 subject of the model a greater advantage than a later 13:12:58 4 priority date. Do you understand what I mean by that?

13: 13:~2 5 A. I understand what you mean.

13:13:04 6 Q. I'm real bad about stating these things.

13:13:06 7 A. I would say greater potential, not greater 13:13:10 8 advantage, ~ut -- 13: 13: 10 9 Q. A greater potential of having his water 13:13:16 10 pe rmit granted, right?

13:13:16 11 A. Right.

13:13:18 12 Q. All right. So let's look at Exhibit-2. I 13:13:22 13 don't know whether you have it up there. It's the 13:13:~ 14 application. Okay. We're looking at sheet 4 of 13:13:44 15 Exhibit -2 which is the second page of Mr. Wa re' s 13:13:~ 16 permit. All right. And I think you know where I'm 13:13:58 17 going. I'm going to special conditions 3B. Would you 13:14:04 18 read the last sentence of that special condition?

13:14:08 19 A. "The priority date of this permit and all 13:14:U 20 extension hereof shall be July 1st, 1997." 13:14:14 21 Q. All right. And you use a priority date of 13:M:M 22 January 5th, 2006, correct? Am I correct?

13:14:26 23 A. Actually there's -- there's a little deeper 13:M:TI 24 story here.

13:14:32 25 Q. I would love to hear it.

ALAflO CITY REPORTING (210) 710-3890 llS 13:14:34 1 A. The administrative complete date of this 13: 14: 36 2 application was March 20. 2006.

13:14:38 3 Q. Okay. And that's not January 5th. 2006.

13:14:42 4 either. right?

13:14:42 5 A. That's correct.

13:14:44 6 Q. So when you said the administrative complete 13: 14: 46 date of the application was January 5th, 2006. that's 13:14:50 8 not right, is it?

13:14:50 9 A. That's an error.

13: 14:52 10 Q• All right. Go on.

13:14:52 11 A. When I received the application. I did a 13:14:56 preliminary analysis to see if there was water 13:15:00 13 available because we know that that particular water 13:15:02 14 right is in an area of the basin of the state where 13:15:94 there's very limited water available. We do this in 13:15:10 an effort to provide information to the applicant to 13:15:14 17 allow them to supplement their application with 13:15:16 18 alternative sources or to withdraw the application 13:15:18 19 without spending money on four days notice if they 13:15:24 determine they don't want to proceed with the 13: 15: 24 application because there's limited water.

13:15:26 22 I did a preliminary analysis from 13:15:30 23 Mr. Ware's application dated January 5th. 2006. When 13:15:32 24 I put this -- when I put this memo together. it was a 13: 15: 34 25 clerical error on my part to carry the wrong date for Al.A~IO CITY REPORTING (210) 716-3890 13: 15:38 1 what the actual the actual analysis that is 13:15:42 2 referenced in this memo used a priority date of 13:15:46 March 20th, 2006, which is the administrative complete 13:15:50 4 date.

13:15:50 5 Q. All right. Well, that indicates one aspect 13:15:54 6 of Exhibit·47 that isn't accurate, but what's the 13:15:58 7 story on not using July 1st, 1997?

13: 16: 02 8 A. It is our practice in the hydrology group to 13:16:08 9 analyze new permits with the new priority date of the 13:16:14 10 administrative complete date of the application.

13:16:16 11 Q. And did you think this was a new permit?

13:16:18 12 A. This was a new application to either renew or 13:16:24 13 extend the term of this permit, yes.

13:16:26 14 Q. Well, does the Executive Director take the 13:16:28 15 position that he can ignore orders of the TCEQ?

13: 16:38 16 A. I don't know that the Executive Director does 13:16:38 17 or doesn't take that position. I'm directed to 13:16:42 18 process applications with the administrative complete 13:16:46 19 date of the application.

13: 16:48 20 Q. But wait a minute. Were you directed to 13:16:50 21 ignore the fact that the TCEQ granted a permit where 13:16:58 22 any extensions of the permit was to have .. were to 13:17:02 23 have a July 1st, 1997, priority date?

13:17:04 24 A. I was directed to use the administrative 13:17:06 25 complete date of the application.

ALAMO CITY REPORTING (210) 710·3890 13:17:08 1 Q. Rather than the date that the agency told you 13:17:10 2 to lise?

13: 17: 10 3 A. The agency told me to use the administrative 13:17:14 4 complete date of the application.

13:17:16 5 Q. Let's be clear about this. The Executive 13:17:18 6 Director told you to do that, but the TCEQ -- the 13:17:22 7 actual commissioners directed anybody to use July 1st, 13:17:26 8 1997. That's correct, isn't it?

13:17:30 9 A.That's written in the -- that's written in 13:17:32 10 his prior permit, yes.

13:17:32 11 Q. Well, what does that mean when you say it's 13:17:34 12 written in the prior permit? What do you think that 13:17:38 13 means? I mean, read the entire paragraph and you tell 13:17:42 14 me whether o~ not Mr. Ware qualified.

13:17:48 15 A. This is special condition 3, special 13:17:52 16 condition 8, the authorization to divert and use 130 13,17:54 17 acre-feet of water per year shall expire and become 13:17:58 18 null and void on November 7th, 2007, unless prior to 13:18:02 19 such date permittee applies for an extension hereof 13:18:08 20 and such application .is subsequently granted for an 13:18: 10 21 additional te rm 0 r in pe rpetuity. The p rio rity date 13:18:16 22 of this permit and all extensions hereof shall be 13:U: 16 23 July 1st, 1997.

13:18:18 24 Q. And Mr. Ware filed for an extension of this 13:18:2225 permit long before November 7th, 2007, didn't he?

ALAMO CITY REPORTING (210) 710-3890 liS 13: 18:24 1 A. Yes.

13: 18:24 2 Q. SO that meant he was entitled to a priority 13:18:28 date on an extension of July 1st, 1997. Isn't that 13:18:32 what that means?

13:18:32 5 A. That's how it reads, yes.

13:18:34 6 Q. SO the priority date that the Executive 13:18:40 Director used to do a Water Availability Review is 13:18:46 8 erroneous, correct?

13: J.8:52 9 A. The priority date used to analyze Mr. Ware's 13:18:56 18 application is the administrative complete date of the 13:19:00 11 application which is the date that we use on every 13:19:02 12 application that comes in.

13:19:04 13 Q. Well, I'm not talking about every application 13:19:06 14 that comes in, Mr. Thomas. I'm talking about this 13:19:08

13:19:14 18 Yes.

13:19:26 22 A. I was directed to use the date and 13:19:30 23 MR. WEBB: Your Honor, move to strike.

13:19:H 24 Object to the witness as being nonresponsive.

13:19:36 25 JUDGE KEEPER: Do you have a response to ALAMO CITY REPORTING (210) 710-3890 13:19:40 that?

13:19:40 2 MS. HORTON: I think it's been asked and 13:19:42 answered. I think what he's saying is that his job -- 13:19:44 4 this is what he was told to do. So that's all he can 13:19:48 5 do. He can't make a legal determination whether it's 13:19:52 correct or incorrect. That's what his job was.

13:19:56 7 MR. WEBB: Your Honor, he has certainly 13:19:58 not answered my question of why the Executive Director 13: 20: 00 9 chose to disregard an express provision in a 13:20:06 10 certificate and to use an erroneous priority date that 13:20: 12 definitely adversely affected Mr. Ware's rights. We 13:20: 14 need an answer to that in this record.

13:20:16 13 JUDGE KEEPER: Okay. Well, let me tell 13:20:18 you what I'm going to give you my perspective on 13:20:22 15 where we are in all of this for better or worse and 13:20:24 16 that is that this gentleman is Mr. Thomas and he is 13:20:30 17 not the Executive Director. So for -- I think what 13:20:34 18 Mr. Thomas can testify to is what is within the scope 13:20:38 19 of his knowledge as a fact witness. I believe he can 13:W:~ 20 also testify what is within the scope of his opinion 13:20:Q 21 as an expert witness, but only to the extent of his 13:20:50 22 expertise. I don t believe he's an expert with I

13:W:~ 23 respect to what the Executive Director believes or 13:20:56 24 thinks, but I think he has given us what he knows with 13:21:m 25 regard to what he has been instructed to do. Now ALMIO CITY REPORTING (210) 718-3890 13:21:04 whether that comports with the law or otherwise, that 13:21:12 determination will have to be made either through the 13: 21: 14 testimony of another witness or through legal 13:21:18 argument.

13:21:20 5 MR. WEBB: All right. Can we have this 13:21:22 question, Your Honor?

13:21:24 7 Q. (BY MR. WEBB:) So the truth is, Mr. Thomas, 13:21:28 you don't know why the Executive Director didn't 13:21:30 direct you to use the July 1st, 1997, priority date?

13:21:38 You just don't know?

13:21:40 11 A. I'm told that our practice -- 13:21:44 12 MR. WEBB: Objection to "hearsay, Your 13:21:46 13 Hono r. 13:21:46 14 JUDGE KEEPER: Well-- 13:21:48 15 MR. WEBB: Your Honor, he's not entitled 13:21:~ 16 to answer my question with hearsay.

13:21:52 17 JUDGE KEEPER: One second. Response.

13:21:54 18 MS. HORTON: My response is that if he's 13:21:~ 19 asking what the Executive Director does or doesn't do, 13:n:~ 20 as you know, we're an organization with several levels 13:22:02 21 above Mr. Thomas. So he can't - - either he can answer 13:22:06 22 everything that - - the questions that are just within 13:22:10 23 his personal knowledge or he can answer questions that 13:22:12 24 are outside of that and say this is what I've been 13:22:" 25 told, this is what I know, but he can't do both.

ALAMO CITY REPORTING (210) 710-3890 13:22:16 1 MR. WEBB: Absolutely not, Your Honor.

13:22:18 2 I'm not asking this witness to tell me what somebody 13:22:2e 3 else told him. I asked a very precise question and 13;22:24 that is you don't know the reason why the director -- 13:22:26 the Executive Director told you to use one priority 13:22:30 6 date as opposed to another.

13:22:32 7 MS. HORTON: He has 13:22:32 8 MR. WEBB: Now 13:22:32 9 JUDGE KEEPER: Hold on.

13:22:34 18 MR. WEBB: Now that's a yes or no 13;22:34 question -- answer, Your Honor. If he knows, fine; if 13:22:38 he doesn't know, fine.

13:22:40 13 MS. HORTON: May I respond?

13:22:42 14 JUDGE KEEPER: Yes.

13:22:42 15 MS. HORTON: Obviously he can't know 13:22:42 16 what's in someone else's head, but he can know what 13:22:42 17 that person told him was in his head and that's what 13:22:50 18 he's doing.

13:22:50 19 MR. WEBB: That is absolutely worthless 13:22:52 20 information in an administrative record that relies on 13:22:56 21 the rules of evidence, Your Honor. We're not asking 13:23:00 22 him to say what's in his head and what's not in his 13:23:02 23 head. If he knows and he has to know using competent 13:23:06 24 probative evidence that satisfies one of the 13:23:10 25 exceptions to the hearsay rule.

ALAf10 CITY REPORTING (210) 710-3890 13:23:12 1 JUDGE KEEPER: Here's what my problem 13:23:14 2 is, Mr. Webb, and that is you began your testimony -- 13:23:16 not your testimony, your line of questions beginning 13:23:22 4 with some assertions about the fact that Mr. Thomas' 13:23:30 5 memo of November 14th, 2006, is the action of the 13:23:38 6 Executive Director, correct?

13:23:42 7 MR. WEBB: As far as we know. We 13:23:44 haven't heard it's not the actions of the Executive 13:23:48 9 Director.

13:23:48 10 JUDGE KEEPER: Right. So perhaps -- 13:23:50 11 perhaps the manner in which to resolve this sort of 13:23:54 12 legal almost existential question about who is 13:~:~ 13 speaking here, maybe the question that ought to be 13:~:" 14 asked of this witness is why he took particular action 13:~1" 15 that he took and if he was directed to take particular 13:24:12 16 action, who did it? I do not know, but my suspicion 13:24:16 17 is that there maybe be other layers of administration 13:~:H 18 between him the Executive Director.

13:24:22 19 MR. WEBB: Well, Your Honor, we're 13:24:24 20 satisfied that the record indicates that Mr. Thomas 13:7.4:26 21 has said he was directed -- 13:24:28 22 JUDGE KEEPER: Right, 13:24:28 23 MR, WEBB: to use the priority date 13:24:32 24 that he did - - well, the priority date that he did, 13:~:~ 25 not the one that he wrote down that he did, ALAMO CITY REPORTING (210) 710-3890 13:24:38 1 JUDGE KEEPER: I understand. Why don't 13:24:40 2 we do this: Let's begin again and let's see where we 13:24:44 3 can get and we will examine more carefully the steps 13:24:50 4 that are taken down the road that you're traveling.

13:24:52 So go ahead.

13:24:52 6 MR. WEBB: All right. We'll try to move 13:24:54 7 on, Your Honor.

13:25:00 8 JUDGE KEEPER: Mr. Webb, I get it.

13:25:02 9 MR. WEBB: All right. Thank you.

13:25:06 10 Q. (BY MR. WEBB:) Incidentally, you weren't 13:25:S8 11 told by the Executive Director to ignore all special 13:25: 12 12 conditions in the existing permits that are seeking to 13:25:16 13 be renewed, were you?

13:25:18 14 A. Not specifically, no. 13:25:22 15 Q. Sounds like a qualification to me. What do 13:25:24 16 you mean not specifically? You were told generally to 13:25:26 17 do that?

13:25:26 18 A. I was told to use a specific date. I was not 13:25:30 19 told to ignore special conditions.

13:25:36 20 Q. All right. And I started to ask you this, 13:25:42 21 but isn't July 1st, '97, the proper priority date to 13:25:46 22 use?

13:25:48 23 A. July 1st, 1997, was the priority date of his 13:25:~ 24 previous application. It is the date that is stated 13:25:56 25 in that permit.

ALAI~O CITY REPORTING (210) 710-3890 13:36:44 1 Q. Well, if he had made that determination, 13:36:46 wouldn't that radically change his opinion in this 13:36:50 case?

13:36:52 4 A. I don't believe -- I don't know. I don't 13:36:54 believe so. 13:36:56 6 Q. Okay. Let me ask you -- let ask you to 13:37:00 identify -- let me ask you what's been marked to 13:37:36 identify what's been marked as Exhibit-50.

13:37:40 9 A. This is a memorandum submitted by Kathy 13:37:% 10 Alexander, hydrologist, on November 25th, 2008. It's 13:TI:~ 11 a Water Availability Analysis of the Brazos River 13:37:56 Authority application 5851.

13:37:58 13 Q. Okay. And is this a Water Availability 13:~:H 14 Analysis like the one you did for Mr. Ware?

13:38:04 15 A. It's a Water Availability Analysis, yes. I 13:38:08 16 don't know -- 13:38:08 17 Q. What do you mean by the difference?

13:38: 10 18 A. I don't know that it's like the one that I 13:38: did for Mr. Ware because Mr. Ware's -- Mr. Ware's was 13:38:M 20 an application to renew a term permit.

13:38:16 21 Q. Do you think this is an application for new 13:~:W 22 authority?

13:38:22 23 A. I don't know.

13:38:22 24 MS. HORTON: Your Honor, I object to 13:~:~ 25 this exhibit entirely. It's completely irrelevant to ALAt10 CITY REPORTING (210) 710· 3890 13:38:26 this case.

13:38:28 2 MR. WEBB: Your Honor, we most certainly 13:38:28 believe that this exhibit is not irrelevant 13:38:32 whatsoever. At this point we were just asking the 13:38:36 witness to identify the exhibit. Our next step is to 13:38:40 offer the exhibit -- or actually, Your Honor, pages 1 13:38:44 through 7 of the exhibit.

13:38:44 8 We only have supplied the party with a 13:38:48 copy of the entire document because we wanted to 13:38:54 maintain the integrity of it as a certified copy. We 13:38:58 actually only one want to offer into the record 13:39:e4 Exhibit-50 up to page 7 of 14 where the Executive 13:39:12 Director makes a determination of the status of 13:39:18 14 existing return flows in the Brazos River Basin at the 13:39:24 time the Brazos River Authority came in and in support 13:39:28 of the -- in support of our offer, Your Honor, we also 13: 39: 34 17 submit our trial brief on the admissibility of 13:39:38 Exhibit-50. It is our contention, Your Honor, that 13:39:44 19 what we have here is a simple admission by a party 13:39:48 opponent.

13:39:50 21 MS. HORTON: Your Honor, we haven't had 13:39:~ 22 an opportunity to brief this issue. I don't think 13:§: 52 23 it's fair that the Applicant gets to do that.

13:39:56 24 JUDGE KEEPER: Well, now, hold on a 13:39:% 25 second. I mean, what happened here is where we are in ALAI'1O CITY REPORTING (210) 710-3890 13:40:00 1 the process is that Mr. Webb has - - is heading down 13:40:04 2 the road toward making an offer if he has not already 13:40:68 3 made an offer. You have objected and his response 13:40:12 4 is -- 13:40:14 5 MR. WEBB: In part that written 13:40:16 document, Your Honor.

13:40:16 7 JUDGE KEEPER: Well, I mean, his 13:40:18 8 response is in writing or at least a portion of it. I 13:40:22 9 mean, there's nothing improper about it, but I'll 13:40:26 certainly give you the opportunity to respond in a 13:46:28 11 reasonable fashion within a reasonable period of time.

13:40:32 12 MR. WEBB: And to give them an 13:40:32 13 opportunity to respond, we don't mind if we go off the 13:46:36 14 record so that everybody has a chance to read my 13:40:38 brief, Your Honor.

13:40:40 16 JUDGE KEEPER: What's your preference?

13:40:42 17 MS. HORTON: I would prefer to have the 13:40:44 opportunity to present a written response tomorrow 13:40:46 morning.

13:40:48 20 MR. WEBB: Well, Your Honor, we need to 13:~:~ 21 be able to go on with the presentation of our case.

13:40:52 22 If you wish to take the issue under advisement while 13:40:54 23 vie continue Ivith our case, we have no objection to 13:41:00 24 that.

13:41:00 25 JUDGE KEEPER: And that's acceptable to ALAI40 CITY REPORTING (210) 710-3890 13:41:02 you?

13: 41: 02 2 MS. HORTON: That's acceptable, yes.

13:41:04 3 JUDGE KEEPER: Okay. So if you would 13:41:04 like to proceed, Mr. Webb.

13:41:06 5 MR. WEBB: All right. Incidentally, for 13:41:08 all assembled, we have attached the copies of the 13:41:10 cases to the brief.

13:41:18 8 JUDGE KEEPER: Mr. Webb, before you go 13:41:20 any further, let me just make sure I'm with you. My 13:41:22 10 questions are to your advantage, not to your 13:41:24 11 disadvantage and that is: What you've presented here 13:41:28 in Exhibit-50 is an interoffice memorandum which 13:41:32 according to you provides some evidence of the 13:41:38 14 existence of some additional -- I want to make sure I 13:41:44 15 understand -- appropriated but unused water in the 13:41:48 16 Brazos River Basin?

13:41:48 17 MR. WEBB: Absolutely not, Your Honor.

13:41:50 18 That's why our brief lays it all out because it is 13:41:54 19 kind of complicated.

13:41:54 20 JUDGE KEEPER: Okay.

13:41:54 21 MR. WEBB: Or not complicated. What 13:41:58 22 Exhibit-50 is it's the same as Exhibit-47. It's the 13:42:00 23 same as Exhibit-49. It is a determination by the 13:~:14 24 Executive Director of the available water in the 13:42:08 25 Brazos River Basin the same Brazos River Basin ALAl10 CITY REPORTING (210) 710 - 3890 13:42:12 1 using the same Brazos WAM using the same period of 13,42:16 record and while it is true that the applicant in that 13:42:22 3 case wants to be able to use that unappropriated 8:42:28 water -- 13:42:28 5 And that is what we're talking about, 13:42:30 Your Honor. We're not talking about appropriated 13:42:34 unused water. We're actually talking about 8:42:38 8 unappropriated water. Once you read my brief, you'll 13:42:42 see the Executive Director actually makes a 8:42:44 10 determination that 74,387 8:42:48 11 MS. HORTON: Your Honor, I have to 13:42:48 12 object to this. This is testimony as to what the 8'42'~ 13 exhibit contains and this is in the nature of a 13:42:52 14 clos ing argument.

8:42:54 15 MR. WEBB: Well, Your Honor -- 13:42:56 16 JUDGE KEEPER: Hold on. I'm going to 13:42:56 17 ove r rule you r obj ection. Mr. Webb, you can continue.

8:43:00 18 MR. WEBB: Right. The Executive 13:43:" 19 Director makes that determination that 74,387 13:43:04 20 additional acre-feet is actually already in the Brazos 13:43:10 21 River Basin and is available - - unappropriated water 13:43:14 22 available for appropriation in this case by Brazos 13,43:M 23 River Authority.

13:43: 16 24 Now, we don't care what happens in the 13:~:20 25 BRA application. We really don't. We do care about ALAMO CITY REPORTING (210) 710-3890 13:43:22 that determination made by the same party, the same 13:43:26 2 party in '97 to use a basin, the same party in 2006 to 13:43:32 use a basin and after 2006 found out some additional 13:43:36 information. Well, maybe he found out from additional 13:43:40 5 expert witnesses elsewhere. It doesn't really matter 13:43:42 to us. What matters is that that's the fact that 13:43:46 7 we're talking about.

13:43:46 8 JUDGE KEEPER: Okay. Ms. Horton, let me 13:43:50 9 clarify my ruling and I apologize. I did not mean to 13:43:52 10 be stern with you or unreasonably stern. What I'm 13:43:58 11 doing is I'm allowing Mr. Webb to make legal argument 13:44:02 12 based upon evidence that has been offered but has not 13:44:86 13 yet been admitted. So I'm willing to listen to 13:44:10 14 whatever ii'is that he may have within the bounds of 13:44:12 15 reason in terms of legal argument about all of this, 13:44: 16 16 but you're certainly not forestalled from making your 13:44:18 17 own legal argument nor am I accepting what he has to 13:44:24 18 say as testimony.

13:44:24 19 Okay. So I think that the best way to 13:44:28 20 proceed just in terms of administrative/judicial 13:~:34 21 economy here is to allow Mr. Webb to ask ~uestions of 13:44:48 22 this VIi tness about this document and then I'll rule -- 13:44:46 23 and I'll rule on his objection and - - I mean I'll rule 13:44:50 24 on his offer- and your objection and if you wish to 13:44:54 25 submit something in writing in response to his trial ALA~IO CITY REPORTING (210) 710-3890 13:44:58 1 brief on admissibility of Exhibit-58, you're certainly 13:45:04 2 welcome to do that. And when do you propose to do 13:45:06 3 that by?

13:45:08 4 MS. HORTON: First thing tomorrow 13:45:08 5 morning.

13:45: 10 6 JUDGE KEEPER: That's certainly 13:45:12 7 acceptable. (Ll'.l 13:45:12 8 MS. HORTON: May I ask you a question?

13:45:12 9 JUDGE KEEPER: Certainly.

13:45:14 18 MS. HORTON: So you're going to go ahead 13:45:16 11 and actually admit it before getting our response 13:45:18 12 brief?

13:45:20 13 JUDGE KEEPER: No. 13:45:20 14 MS. HORTON: Okay. Thank you.

13:45:20 15 JUDGE KEEPER: What I'll do is I'll 13:45:22 16 allow him to ask questions about it, but my choices 13:e:~ 17 seem to be to admit it and change my mind; if I decide 13:e:~ 18 to change my mind, conditionally admit it; but it's 13:e:~ 19 all variations on the same thing. So let's just 13:45:36 28 proceed with the questions and i f what I conclude is 13:e:w 21 that it is inadmissible, then the line of questioning 13:e:n 22 and the responses about it will be stricken.

13:45:% 23 Mr. Webb, please continue.

13:45:48 24 MR. WEBB: Thank you, Your Honor.

13:45:50 25 Q. (BY MR. WEBB:) Mr. Thomas, turning to page 3 ALA~10 CITY REPORTING (210) 710-3890 13:45:50 1 of 14 -- first let me ask you this: Is there more 13:45:56 2 than one Brazos River Basin?

13:45:56 3 A. No. 13: 45: 58 4 Q. Is there more than one Brazos WAM?

13:46:00 5 A. No. 13:46:06 6 Q. Okay. But the Brazos WAM can be updated with 13:46:10 additional,current conditions information, correct?

13:46:14 8 A. Yes.

13:46:14 9 Q. And that's what you were talking about 13:46:14 earlier, correct?

13:46:16 11 A. Yes.

13:46:16 12 Q. And that's what the Executive Director 13:46:16 13 apparently ~id in Exhibit-50, correct?

13:46:22 14 A. Apparently, yes. I'm not familiar with this 13:46:24 15 document o~this analysis.

13:46:26 16 Q. All right. The last think I wanted -- well, 13:46:30 17 page 3 under Water Availability Analysis, what is the 13:46:36 18 apparent period of record used by the Executive 13:46:46 19 Director?

13:46:46 20 A. 1940 through 1997.

13:46:48 21 Q. Same one, right?

13:46:48 22 A. Yes, sir.

13:46:48 23 Q. As you used -- as he used in Mr. Ware's case, 13:46:52 24 correct?

13:46:52 25 A. Yes, sir.

ALAMO CITY REPORTING (210) 710-3890 13:47:04 1 Q. Next page 4 of 14, under return flows, the 13:47:08 2 application requests appropriate of current and future 13:47:14 return flow in the Brazos Basin discharged from 136 13:47:16 4 locations of various entities, right?

13:47:20 5 A. Yes.

13:47:20 6 Q. So return flows was used to update the 13:47:26 7 current conditions , . !:'x '1- by the Executive Director, correct?

13:47:32 8 A, My understanding of reading that sentence is '\ I I 13:47:34 that return flows were used in the analysis in this 13:47:42 Water Availability Analysis.

13:47:42 11 Q. All right. And that is what you said are 13:47:44 updates of the current conditions, correct?

13:47:46 13 A. Those are some of the updates, yes.

13:47:50 14 Q. Okay. So if the Executive Director got some 13:47:54 15 informatioh from whatever source to update the current 13:47:58 16 conditions, that's no more than what you've been 13: 48: 02 17 saying that the Executive Director does, correct?

13:48:06 18 A. That's correct.

13: 48: 06 19 Q. All right. Next page, the current conditions 13:48:10 20 data, read. that out loud into the record.

13:48:14 21 A. "The current conditions data set was updated 13:48:18 22 with the amount of current return flows as indicated 13: 48: 22 23 in the application (74,387 acre-feet which is the sum 13:48:26 24 of the maximum reported annual discharge amounts for 13:48:30 25 each plant)." ALAMO CITY REPORTING (218) 71G-3890 13:48:34 1 Q. So, in other words, the Executive Director 13:48:36 2 was given information that he deemed reliable, 13:48:40 3 correct?

13:48:42 4 A. Yes.

13:48:42 .5 Q. That updated the current conditions?

13:48:46 6 A. Yes.

13:4S:46 7 Q. So it's true, isn't it, then that since you I,' • 13:48:48 8 wrote your water availability -- I keep getting it 13:48:54 9 mixed up -- since the Executive Director wrote his 13:49:00 10 Water Availability Review in 2006 for Mr. Ware, he 13:49:02 learned new information?

13:49:04 12 A. Yes.

13:49:O4 13 Q. And that information is now being sought to 13:49:08 14 be used by somebody else?

13:49: 16 15 A. Yes.

13:49:16 16 Q. Any reason why it couldn't be used for 13: 49: 20 17 Mr. Ware since this hea ring is taking place after he 13:49:22 18 learned the new information?

13: 49: 26 19 A. I did not have this information.

13:49:28 20 Q. I~m not asking you that. I know you didn't, 13:49:32 21 but is there any reason you can think of that Mr. Ware 13: 49: 36 22 shouldn't be able to use this new information that the 13:49:4O 23 Executive Director has learned since he did the review 13:49:44 24 in Exhibit-47? Any reason you can think of as an 13:49:50 25 engineer?

ALANO CITY REPORTING (210) 710-3890 13:49:56 1 A. Yes. One possible answer is the return flows 13:50:00 from specific plans and the way that the Executive 13:50:02 3 Director has directed us as the hydrologists to 13:50:08 consider that information and to write permits based 13:50:10 on retu rn flows.

13:50:12 6 Q. Why would that make any difference?

13:50:18 7 A. Because we are directed by the Executive 13:50:20 Director and I'm directed by my supervisors that we 13:50:24 only write permits to authorize return flow to either 13: 50: 28 the original source diverter of that water or to the 13:50:34 discharger of that water 13:50:34 12 Q. Well, now -- 13:50:36 13 A. -- if either of those -- either of those 13:50:38 14 entities are the ones who should be applying for 13:50:42 15 retu rn flows.

13:50:44 16 Q. Well, did I read Exhibit-50 wrong or was the 13; 50; 52 Executive Director saying that other return flows 13:50:54 18 other than from BRA were subject to BRA's use as 13:51:02 19 potential sources of appropriated water?

13:51:06 20 A. I don't know. I'm not familiar with this 13:51:08 document. I didn't prepare this document.

13:51:16 22 Q. AII right. Next sentence, page 5 of 14, 13:51:18 23 after the one that we read, read that into the record, 13:51:24 the request to reuse.

13:51:28 25 A. "The request to reuse return flows was ALAMO CITY REPORTING (210) 710-3890 13:51:30 1 modeled at the most downstream pOint in the basin to 13:51:32 determine the volume of return flows available to BRA 13:51:36 3 on a basin-wide basis." 13:51:40 4 Q. So the question -- the issue in Exhibit-50 is 13:51:46 5 how can BRA use the additional return flows on a 13:51:52 basin-wide basis. Did I misstate that?

13:52:00 7 A. I'm not sure that I understand the question.

1 h: 13:52:02 I'm sorry. , .

13:52:02 9 Q. Well, have I misstated that the issue in 13:52:08 Ul as represented in that sentence that you just read is 13:52:12 the question of whether BRA should be able to use 13:52:16 12 those return flows on a basin-wide basis? That's the 13:52:22 13 issue, isn't it?

13:52:22 14 · MS. HORTON: Your Honor, I would like to 13:52:24 15 object. H~'~ already stated that he is not familiar 13:~:~ 16 with this document.

13:52:26 17 MR. WEBB: Well, then, Your Honor, we 13:52:28 18 should allow the p rofessiona l enginee r rep resentative 13:~:32 19 of the Executive Director to become at least familiar 13:~:36 20 enough to be able to understand what the sentence 13:52:38 21 says.

13:52:40 22 JUDGE KEEPER: So are you proposing that 13:~:42 23 we take a break to allow him to read the document?

13:52:44 24 MR. WEBB: Absolutely, Your Honor, at 13:52:46 25 least pages 1 through 7. ----------------------------------~ ALAMO CITY REPORTING (Z10) 710-3890 13:52:48 1 JUDGE KEEPER: Before we do that, 13:52:50 2 Mr. Thomas, let me ask you a quick question. If we 13:52:54 3 were to take a short break for you to be able to read 13:52:58 4 this information, do you anticipate that you would be 13:53:00 5 able to respond to Mr. Webb's question or shall we 13:53:04 6 just take a break and see what happens?

13:53:06 7 THE WITNESS: I'm still not sure that I 13:53:08S"undersi:and Mr. Webb's question, but I'm also not sure 13:53:12 9 that just reading this document gives me all the 13:~:14 10 background information that was used to prepare this 13:~:16 11 document to know how the decision was made and how to 13:53:22 12 answer his question.

13:53:24 13 MR. WEBB: Well, Your Honor, I'm 13:53:24 14 certainly not asking this witness to give us any 13:53:30 15 information of all the background information.

13:53:34 16 Honestly, Your Honor, we don't care where the 13:53:36 17 background information came from. All we know is that 13:53:38 IS this party in this case has, since he told our client 13:53:44 19 that there's no water available, made a determination 13:53:48 20 that there's another 74,000 acre-feet available. He :53: 52 21 made that determination. This is an official release 13:53:~ 22 determination.

13:53: 56 23 Mr. Thomas, discussed earlier in his 13:~:Y 24 testimony how the Executive Director works. He makes 13:54:60 25 determinations, et cetera, et cetera of the water ALAMO CITY REPORTING (210) 710-3890 13:54:04 1 availability. It's not -- we're not trying to retry 13:54:06 2 BRA's application. We're not trying to try it. I 13:54:12 3 understand it hasn't been tried. We don't want to.

13:54:14 4 We don't care what BRA wants to do. We don't care how 13:54:16 5 they want to use it. We don't care where they want to 13:54:20 6 use it. We don't care what they use to give the 13:54:24 7 information to the Executive Director if that's how it . j.'.! .

13:54:24 8 happened.

13:54:26 9 All we know is that the Executive 13:54:30 10 Director bought it; that they agreed; they said yes, 13:54:34 11 the water is there; the water is there for 13:54:36 12 reappropriation and let's see what we do with your l3:54:40 13 appl~cation. Well, the let's see what we do with 13:54:42 14 applicatio~ part is of no consequence to us. It's the 13:54:46 15 determination that the water is there in the basin.

13:54:48 16 That's the specific factual determination that is to 13:54:52 17 say the least a little relevant and material in this 13:54:56 18 case and that's all we care about.

13: 54: 58 19 So we don't need Mr. Thomas or want 13:55:02 20 Mr. Thomas to tell us how the Executive Director came 13:55:04 21 to make that determination, only to confirm that he 13:55:10 22 did.

13:55:10 23 JUDGE KEEPER: Okay. Ms. Horton, do you 13:55:14 24 wish to make a response?

13:55:18 25 MS. HORTON: No. That was the question ALAt40 CITY REPORTING (210) 7le-3890 13:55:20 he asked and I think Mr. Thomas can read the document 13: 55: 22 2 and answer that question of what his determination 13:55:24 was.

13:55:24 4 JUDGE KEEPER: Okay. Let's take a short 13:55:26 break. Mr. Thomas, if you'll read those seven pages 13:55:30 6 and when you're -- we'll go off the record while you 13: 55: 32 7 are. When you're ready, just signal and we'll come 13:55:34 back or. the record.

13:55:34 9 (Recess from 1:55 p.m. to 2:02 p.m.)

14:02:08 10 JUDGE KEEPER: So if we're ready, let's U:~:W 11 go back on the record. And, Mr. Thomas, have you had 14:02:12 12 an opportunity to complete reading the seven pages of U:02:16 13 Exhibit-50?

14:02: 18 14 THE WITNESS: Yes, I have.

14:02:18 15 JUDGE KEEPER: Thank you very much. And U:~:~ 16 so, Mr. Webb, have you a question?

14:02:22 17 Q. (BY MR. WEBB:) So the question is: Did the 14:92:24 18 Executive Di recto r make the dete rmination that anothe r U:B2:~ 19 74,387 acre-feet of additional water was available to 14:02:34 20 BRA for use in its application?

14:02:38 21 A. Yes.

14:02:46 22 Q. All right. Isn't there a law regarding the U:02:g 23 use of return flows?

14:02:52 24 A. I'm not sure that I understand that question.

14:02:56 25 Q. Well, I don't want to be cryptic. Doesn't ALA~IO CITY REPORTING (210) 710-3890 14:03:04 1 Section .046 of the Texas Water Code, doesn't it 14:03:12 2 capture return surplus water?

14:03:36 3 MR. WEBB: Your Honor, would you like to 14:03:36 4 read along with us? We have another 14:03:38 5 JUDGE KEEPER: What section are we 14:03:40 6 looking at?

14:03:40 7 MR. WEBB: 11.046. .-: : ' 14:03:46 8 JUDGE KEEPER: Thank you.

14:03:52 9 Q. (BY MR. WEBB:) Would you read the 14:03:52 10 highlighted section?

14:03:54 11 A. Yes. This is Section 11.046 (c) : "Once water 14:04:02 12 has been diverted under a permit, certified filing, or 14:04:06 13 certificate of adjudication and then returned to a 14:04:08 14 watercours~or stream, however, it is considered 14:04:12 15 surplus water and therefore subject to reservation for 14:04:14 16 instream uses or beneficial inflows or to M:M:M 17 appropriation by others unless expressly provided 14:04:20 18 otherwise in the permit, certified filing, or 14:04:22 19 certificate of adj udication." 14:04:24 20 Q. 50 that means that some of that 74,387 M:M:~ 21 acre-feet of water is available to Mr. Ware for M:B4: 38 22 reappropriation, correct?

14:04:40 23 A. I can't say that I know that.

14:04:42 24 Q. Okay. The point is you didn't use any M:M:44 25 portion of that additional water in the basin in your ALAI40 CITY REPORTING (210) 710- 3890 14:04:48 1 model?

14:64:50 2 A. That's correct.

14:04:50 3 Q. Okay. And because of how the model works, 14:04:56 the Brazos WAM works, additional water anywhere in the 14:05:00 basin is used to assess whether or not a particular 14:05:08 water right would have a negative impact on all of the 14:05:12 water rights, isn't it?

14:05:15 8 A. I.'m sorry. I'm not sure exactly what yo8're 14:05:26 asking.

14:05:26 10 Q. Additional unappropriated water would benefit 14:05:30 11 the entire basin, WOUldn't it7 14:05:30 A. Yes.

14:05:32 13 Q. And so it doesn't matter whether it's above 14:05:34 Mr. Ware, below Mr. Ware, above Stillhouse Hollow 14:05:38 15 Lake, below it? It would benefit everyone, wouldn't 14:05:40 it?

14:05:42 17 A. It would benefit everyone downstream of it 14:05:44 18 and potentially that -- yes, I can -- I can say that 14:05:50 it would benefit everyone in the basin, yes.

14:05:54 20 Q. Because after all, even if you're upstream 14:05:58 where all of that beneficial water -- additional ~:%:ao 22 beneficial water is coming in, you don't have to count ~:%:M 23 the -- the person upstream of where it's all coming in ~:%:a8 24 can use it all and the people downstream wouldn't have ~:%:10 25 to worry, correct? And I'm being simplistic.

ALAr10 CITY REPORTING (210) 710 -3890 14:06:14 1 A. There are situations where it would change 14:06:16 priority calls and benefit everyone in the basin.

14:06:20 3 Q. Incidentally, what was the priority date that 14:06:26 the Executive Director used - - and I know it's not 14:06:32 5 really relevant, but it's in the first seven pages.

14:06:34 6 At the top of page 5 through 14, what was the priority 14:06:38 date used? ~ 'i () !

14:06:42 8 A. Priority date of October 15th, 2005 -- 2004.

14:06:46 9 Q. So BRA even has a later priority date than 14:06:58 Mr. Ware's July 1st, 1997, priority date?

14:07:04 11 A. Octobe r 15th, '04, is late r than July of '97, 14:07:08 12 yes.

14:07:08 13 Q. Not later than January 5th, 2006, is it?

14:07:14 14 A. Nt;'.

14:07:14 15 Q. Or March something 2006 either?

14:07:18 16 A. That' 5 correct.

14:07:20 17 Q. All right. 50 that wrong priority date M:M:n 18 really does hurt Mr. Ware, doesn't it?

14:07:24 19 MS. HORTON: I'm sorry. I think that's M:07:m 20 another mischaracterization.

14:07:30 21 MR. WEBB: I'll withdraw that question, M:M:H 22 Your Honor.

14:07:36 23 Q. (BY MR. WEBB:) And just so the record is 14:07:38 24 clea r, YOLl ce rtainly didn't include - - you al ready 14:07:40 25 answered that. I don't have to ask that. I'm almost ALM10 CITY REPOI\TING (210) 710-3890 14:07:46 1 done, Mr. Thomas.

14:08:12 2 I don't know whether I've asked you this 14:08:14 or not. You can't think of any reason why Mr. Ware 14:08:18 wouldn't be entitled to any of this additional water 14:88:22 5 that the Executive Director has discovered, do you?

14:08:24 6 A. No. 14:88:30 7 Q. Now, in light of Exhibit-50, isn't it -- "! !-"H;:'- 14:08:38 8 wouldn't you agree with me, Mr. Thomas, that the 14:08:42 9 analysis done by the Executive Director before he had 14:08:H 10 this additional information really doesn't help the ~:U:52 11 administrative law judge very much in making a ~;08;~ 12 determination of water availability for Mr. Ware, does 14:08:56 13 it?

14:09:02 14 A. Are'you asking if my analysis is useful?

14:09;88 15 Q. Yes. In light of all this new water that's ~:B9:12 16 not put intd the model.

14:89:14 17 A. I believe my analysis is still useful and ~:";18 18 still correct.

14:09;20 19 Q. Correct from the terms of when it was done?

14:09;24 20 A. I believe it's still correct today.

14;09:26 21 Q. So are you stating that an additional 74,387 14:09:34 22 ac re -feet wouldn't make any di ffe renee to a fa rme r' s 14:09:38 23 application for 150 acre-feet on a term permit basis?

14:09:48 24 A. If that additional 74,000 acre-feet were ":":52 25 available to Mr. Ware and anyone else in the basin, it ALANO CITY REPORTING (2l0) 710-3890 14:09:56 1 would be. My understanding of this from reading this 14: 10:00 2 application is that that 74,000 acre-feet is from 14:10:88 3 water rights owned by or discharged in connection with 14: 10: 12 4 BRA and that it's not new water introduced to the 14:10:16 5 basin. It's BRA's water that they are using.

14:10:52 6 Q. If you look at the last paragraph of 14:10:58 7 Exhibit-50, page 4 of 14 going up to 5 of 14, doesn't :',\.- ' 14:11:06 8 that indicate that only certain portions of the 74,387 . \ -,., 14:11:\2 9 acre-feet were explicitly granted based on return 14:11:18 10 flows now being claimed as part of the application?

14:11:36 11 Withdraw that question. I have a better 14:l!:40 12 question.

14: 1l:40 13 Looking at Exhibit -50 page 5 of 14, the 14:11:52 14 sentence th~t begins because of this and part of the 14:11:58 15 sentence before that starts at the 4 of 14, doesn't U:12:~ 16 the Executive Director acknowledge that other parties u:u:~ 17 other than BRA are entitled to some of these return U:12:U 18 flows?

14:12:12 19 A. The Executive Director recognizes that other 14:12:14 20 pa rties have been granted wate r right s based in pa rt 14:12:1121 on the presence of those return flows.

14:12:28 22 MR. WEBB: No further questions. We U:U: 30 23 pass the witness.

14:12:42 24 MS. HORTON: I want to give the Public 14:12:44 25 Interest counsel an opportunity to ask his questions.

ALAMO CITY REPORTING (210) 710-3890 14,12,44 1 CROSS EXAMINATION 14,12:54 2 OUESTIONS BY MR. ARTHUR: 14:12:54 3 Q. Good afternoon, Mr. Thomas. So am I correct 14:12:58 4 that the Brazos River WAM is updated periodically or 14,13:04 the inputs or the data set?

14:13:06 6 A. The inputs and the data set are updated. As 14: 13: 10 7 we grant new water rights, those new water rights are 14:13,14 8 included in the data set. -:. [

14:13:18 9 Q. Okay. So at the timing of the updating, it 14,13:22 10 is based on a new water right?

14,13:24 11 A. Well, there's also -- there's also an effort 14,13:32 12 to make sure that the return flows are accounted for 14:13:36 13 appropriately. That's not done on a regular basis.

14:13:40 14 The water rights are added basically because 14:13:44 15 they're -- they're added to perform an analysis and if 14:13:50 16 that analy~is indicates that a water right should be 14:13:56·17 granted, then they're included in the latest version 14:13:58 18 as those water rights become granted. An effort to go M,14,16 19 through and check and update the naturalized flows or 14:14:11 20 to go throughout the whole basin and update all of the 14:14:14 21 return flows is not done on a specific regular basis.

14:14:14 22 Q. Okay.

14:14,21 23 A. It's done as resources are available within 14,M:~ 24 the water right scheme.

14: 14:28 25 Q. So recognizing that current conditions is AlAflO CITY REPORTING (210) 710·3890 Exhibit E April 20, 2010 Final Order of TCEQ Bryan W. Shaw, Ph,D., Chainnarz Buddy Garcia, Commissioner carlos Rubinstein, Conunissioner Mark R. Vickery, P.G.,. Executive Director

TEXAS COMMISSION ON ENVIRONI\1ENTAL QUALITY Protectil1g Texas by Reaucing and Preumtil1g Pallll/ion

April 23, 2010 TO: Persons on the attached mailing list.

RE: Bradley B. Ware TCBQ Docket No. 2008-0181-WR; SOAB Docket No. XXX-XX-XXXX Water Use PennitNo. 5594 Decision of tile Commission on Application.

The Texas Commission on Bnvironmental Quality ("TCEQ" Or "Commission") has made a decision to deny the above-referenced application. Enclosed with 'this letter is a copy of the Commission's order. Unless a Motion for Reheating ("MFR" Or "motion") is timely filed with the chief clerk, as described below, this action of the Coromission will become final. A MFR is a reqnest for the Commission to review its decision on the matter. Nay motion must explain why the Commission should review the decision.

Deadline for Filing Motion fOI'Rehearing_ A MFR TIms! be received by the chief clerk's office no later than 20 days after the date a person is notified of the Commission's order on this application. A person is preswned to have been notified on the third day aftor the date that this order is mailed. .

Motions may be filed with the chief clerk electronically at ht1p:llwwwJO.tc~.state.tx.us/~c/efili!lm or by filing an original and 7 copies with the Chief Clerk at the followhlg address: LaDonna Castanuela, Chief Clerk TCBQ,MC-105 P.O. Box 13087 AUStill, Texas 78711-3087 Fax: 512/239-3311 In aqdition, a copy of the, motion must be sent on the same day to each of the individuals on the attached mailing list as 'indicated by an asterisk (*). A certificate of service stating that copies of the rnotion were sent to those on' the mailing Jist must also be sent to the chief clerk. The procedures for filing and serving motions for rehearing and responses are located in 30 Texas Administrative Code (TAC) §80.272 and 30 TAC §1.10-1.l1. The hardcopy filing requirement is waived by the Gener;ll Counsel pursuant to 30 lAC §1.10(h).

P.O. So, 13087 AmUn, Texas 78711-3087 .",. '. - . .'.' The written motion must contain (1) the name and representative capacity of the person filing the motion; (2) the style and official docket lllUnbei' assigned by SOAli: or official docket number assigned by the Commission; (3) the date of the order; and (4) a concise statement of each allegation of error.

Unless the time for the Commission to act on the motion is extended, the MFR is overruled by operation oflaw 45 days after a person is notified of the Commission's order on this application.

If you have any questiollS or need additional jnfOimation about the procedures described in tlris letter, please call the Office of Public Assistance toll free at 1-800-687-4040,

Sin~~~ ~nnacas~~ I.../~Clerk LDC/ms

Enclosures

Bradley B. Wru:e TCEQ Docket No. 2008-0181-WR SOAR Docket No. XXX-XX-XXXX

FOR TIffi APPLICANT: Steve Ramos, Technical Staff Texas C01IUllission on Environmental Quality Stephen P. Webb ~ Water Supply Division MC·160 Gwendolyn Webb P.O. Box 13087 Webb & Webb Austin, Texas 78711-3087 Southwest Tower East 7ti) Street FOR OFFICE OF PUBLIC ASSISTANCE Austin, Texa.~ 78701 via electronic mail: Bradley B. Ware Bridget Bohac, Director Gann Branch Road Texas Commission on Environmental Quality Killeen, Texas 76549 .' Office of Public Assistance MC-I08 P.O. Box 13087 INTERESTED PERSONS: Austin, Texas 78711·3087 Andrew Miller FOR PUBLIC INTEREST COUNSEL Kemp Smith LLP via electrQllic mail, Congress Avenue, Suite 1150 Austin, Texas 78701 Garrett Arthur, Attorney* Texas Commission on Envirorunental Qualily Gene W. Ray, DVM Public Interest Coullsel MC-! 03 Town & Country Veterinary Medical Center P.O. Box 13087 Ba.~t Elms Road Austin, Texas 78711-3087 Killeen, Texas 76542 FOR THE CHIEF CL\'>RK Bruce Wasinger via electronic mail: Bickerstaff Heath Delgado Acosta LLP 3711 South MoPae Expressway LaDonna Castaiiuela Builcling 1, Suite 300 Texas COlIUllission on Environmental Quality Austin, Texas 78746 Office of Chief Clerk MC-l 05 P.O. Box 13087 FOR THE EXECUTIVE DIRECTOR Austin, Texas 78711-3087 via electronic mail: Shaua Horton, Staff Attorney * James Aldredge, Staff Attorney . * The Honorable Paul Keeper Administrative Law Judge Texas Commission on Em1romnental Quality State Office of Administrative Hearings EnviroIUnental Law Division MC-173 P. O. Box 13025 P.O. Box 13087 Austin, Texas 78711-3025 Austin, Texas 78711-3087 • Courtesy Copy via inter-agency mail

., ..

TEXAS COMMISSION ON ENVIRON1Y1ENTAL QUALITY I'HIHlli\Tt;; OI'TEl(AS eOUNW 61"'flllAVI!l II\?IOO( tertijy inal this ~ .1"'6 .00 Mfll!<l i»W Sf~ T«<as COl1urns...::lon on EfWlrOt~mGtilai Qu31iiy dooun\l,nuJ \lI1!ctJ Is Hied 10 tilt P""_~ record.olthe COIl1r<l$lon, Given)1etmy ~:,~/"<I th....si 01_ on (?~~d'#dAF..~.J:3 .~OlO 1.~~~!1fl~J!JilI~ Ql>i1\f&1?ll\ ''" '!>"""'J r~~.'l ('.ornrnl~l;i!Jn on (!_nvifooment~! QualitY AN ORDER Concerning the Application of nradlcy B. Ware to amend wlIter llse Permit No. 5594; TCEQ Docket No. 2008-0181- 'WR; SOAli Docket No. XXX-XX-XXXX

On April 14, 2010, the Texas Commission on Environmental Quality (TCEQ of Commission) considered the application (Application) of Bradley B. Wru'e to Amend Water Use Pennit No. 5594 (Pennit). A Proposal for Decision (PFD) was presented by Pan! D. Keeper, an Administrative Law Judge (ALJ) with the State Office of Administrative Hearings (SOAH), who condncted a hearing in this case from October 28 through October 29, 2009, in Austin, Texas.

After considering the AU's PFD, the Commission adopts the following Findings of Fact atld Conclusions of Law:

1. FINDINGS OF FACT General Findings· 1. The applicant is Bradley B. Wru·e. Mr. Ware owns a 261-acre farm ou the Lampasas River, about 15 miles southwest of Killeen, Texas.

2. Mr. Ware's street and mailing address is 911 Gann Branch, Killeen, Texas 76549.

3. Mr. Ware's farm is located in Bell County, Texas, fUld is within the Brazos River basin.

Iiistory o/tlte Perlltit 4. On November 7,1997, the Commission issued Mr. Wru'c the Penni! for a ten-year tenn.

.~. .',: ', .. ~"- 5. The Pertnit authorized Mr. Ware to diver! and use 130 acre-feet of water annually fi'om the Lampasas Ri verto irrigate 100 acres, 6. The Permit also established July 1, 1997 as "the priority date of this pennit and all extensions hereof ...." 7. The Pelmit was to expire on November 7, 2007, unless before that date, Mr. Ware received the Commission's approval to extend the term or to convert the Permit to a . perpetual right. .8. Mr. Ware's rights lIllder the Permit remained in effect pending a final administrative ruling on the Application.

9. During the 1;\'1elve years in which Mr. Ware has had irrigation rights, he has fmmed hay, plUUpkinS, wheat, sorghum, oats, and winter peas. to. Mr. Ware has tried to impound his water by installing six or seven eruthcn tanks, but the composition of the solllimits the runount of water that the tanks will retain.

11. Mr. Ware has purchased 100 acre-feet of water rights and installed 8,000 to 10,000 feet of two-inch pipes, pIns an eight-inch pipe to a central pivot system.

12. On November [5,2005, Mr. Ware timely filed his Application to: (1) either extend his Pennit for another ten-year period or convert his Permit to a perpetual right, (2) withdraw more acre-feet of water annually, and (3) lITigate 31 more acres of his fann.

13. On J31lUary 5, 2006, the ED determined that the Application was administratively complete.

14. On June 7, 2006, the Brazos River Authority contested the application.

15. On November 4, 2006, the ED's surface water availability and interstate compacts team completed a water availability review and detennined that there was not S\lfficient water available at the Applicant's location to support the requested demand.

J6. On November 6, 2006, the ED recommended denial of the Application.

17. On January 8, 2007, 11'11'. Ware requested a contested case hearing at SOAR.

18. On January 25, 2008, the Commission directly referred the case to SOAR for a hearing Oil the merits.

19. On April 3, 2008, the SOAR administrative law judge (AU) convened a preliminary hearing and took jurisdiction.

20. On January 12,2009, the Brazos River Authority was granted the right to withdraw as a protesting party.

2), On 0c;tober I, 2008, the AU issued an order folloVi1ng a telephonic preheating conference and notified the parties that the hearing on the merits would be held March 18 through 19, 2009.

22. At the request of Mr. Ware, the hearing on the merits was rescheduled to convene October 29 through 30, 2009. .........

23. The hearing convened on October 28, 2009, and adjoumed On October 29, 2009. The administrative record closed on December 21, 2009, after cloSing arguments and replies were Hled.

ED's recommendatioll to dellY the Application 24. After Mr. Ware filed bis Application in 2005, the ED's Surface Water aIld Interstate Compacts Team determined that "little to no water" was available at Mr. Ware's diversion point on the Lampasas River, without regard to whether the amended Penni! would have a petpetual 01' limited telm.

25. The ED's Surface Water Availability and Interstate Compacts Team confirmed the hydrologist's conclusion in a water availability review memo that calculated that insufficient water was availabJe at Mr. Ware's diversion point to support even the original 130.acre-feet of term-limited appropriation rights.

,/.,' .. ~', ," . .. ~ ~ 26. In recommending denial of the Application, the ED rI'lied Oll the Commission's Wate), Availability Model for the Bra7J)s River besin (Model). The calculation used a historical period of record of 1940 to 1997.

27. Although previous water availability models were developed and used by the Commission, the CUlTent Model has been in use since 2001. The Commission has relied on the Model in evaluating all applications fo), appropriative rights since then.

28. In evaluating the Applioation with the Model, the ED used a priority date of January 5, 2006, the date on which the Application was administratively complete.

29. The Model predicts that Mr. Ware's current request could be satisfied at a 100% level in none of the years and at least 75% in 5.2% of the years.

Stand/fig 30. The evidence presented by the ED at the hearing on the merits was generated by the Commission or was offered to support the integrity of the Commission's underlying infonnation.

The reliability of the Model 31. The Model is designed to be the most accurate method available to the ED without regard to the size of the request for water.

32. The design relies in part on the Model's use of a period of record.

33. The period of record gives the Commission a set ofhistoricnl boundaries ranging from the most severe basin-wide drought to the most severe flood periods ever recorded.

34. The historical period was developed by the Commission in conjunction with other state agencies and outside consultants.

35. The Model relies on afl applicant's particular location within a river basin to determine availability.

153 .

36. If an applicant's diversion point is located within a large drainage area, then the applicant would be able to rely on large stream flows and potentially greater water availability.

37. The Commission gathers information abott! streamflows by relying OJ) gauge information and data from otber sources.

38. v,'here gauge iuformatioll is unavailable, then the Commission may extrapolate information based on the readings a~ nearby gauging stations. This type of adjustment occurs during the creation of the naturalized flow data set.

39. Naturalized flow data has value to the Commission because it reflects the flows that would have occurred without the impacts created by hurnau diversions and storage of water.

40. The Model takes into account an application's priority date in evaluating a request.

41. The role of the priority date is to determine the seniority status of a particular appropriative right previously given by the Commission.

42. By examining an application in terms of period of record, location, and priority date, the ED is able to evaluate an application of any size in terms of tbe current conditions presented.

43. At this time, the inclusion of more recent gauge flow data would have no effect on the range of data reflected in the historical period of record used ill the Model.

44. The addition of "new water," if it were pi'oved to exist, would be" subject to all prior appropriation rights of senior water tights holder a~d could not be treated as available for new allocation.

45. The full amount ofthe Brazos River Authority's requested return flows become available only at the furthest downstream point in the basin; diversions at other points axe possible due to spedfic facts and circumstances of that application.

- ....

Priority dates 46, The priority date of Mr, Ware's CUITent Permit is July 1, 1997, and applies to "all extensions, , .. " 47, The priority date in the Pennit has no relation to applications for new permits or to any matter other than establishing when the permit holder began the approprIation of water or when the permit holder acquired the rIght to use the water, 48, The priority date of Mr. Ware's application was established on the date on which it became administratively complete, January 5, 2006, 49, The Brazos River Authority is seeking a permit from the Commission to appropriate an additional 421,449 acre-feet per year of unappropriated water, or several thousand times the amount that)\Jr, Ware is seeking authority to appropriate from the sanle river basin, 50, The priority date of the application of the Brazos River Authority is October 15, 2004, 51. . The priority date of the Brazos River Authority's application is earlier than that of Mr, Ware's application, 52, The ED engaged in no manipulation of the priority dates in recommending the denial of Mr, Ware's application,' II. CONCLUSIONS OF LAW 1, The Commission has jurisdiction oVer the determination of water rights in Texas rivers and streams, TEx, WATER CODE ANN, ch. 11.

2, Notice was provided in accordance with TEx, WATBR CODE ANN, § 11.132, 30 TEX, AOMIN. CODB (TAC) ch, 295, Bubch, C; and TEx, Gov, CODE ANN, §§ 2003,051 and 2003,052, 3, SOAH ha~ jurisdiction to conduct a hearing and to prepare a Proposal for Decision in contested cases referred by TCEQ, TEX, GOV, CODE ANN, § 2003.47,

4. The Application became administratively complete on January 5, 2006. TEx. WATER CODBANN. § 11.141 and 30 TAC § 297.44(c) 5.. The Application was processed and the proceedings described in this Order were conducted in accordance with applicable statutes and the rules of the Commission and SOAl!. TEX. WATERCODEANN,ch, 11; 30 TACeh. 80,1 TACeh. 155.

6. Mr. Ware held the burden of proof. 30 TAC § 80. 17(a). Mr. Ware did not meet his burden.

7. Any person may appear at a hearing at which the issuance of a permit is to be considered.

TEx. WATBRCODEANN. § 11.133.

8. The ED is required to participate as a party in contested hearings relating to applications about water rights, 30 TAC § 80.108(b)(l).

9. The ED is required to represent the Commission in hearings that raise matters that affect the public's interest in the state's environment and natural resources, including matters that have been determined to be Jlollcies of the slate. TEx. WATER CODE ANN. § S.228(a).

10. In contested case permit hearings, the ED's presentation is limited to "the sole purpose of providing information to complete the administrative record." TEx. WATER CODE ANN. § 5.228(c).

11. In a contested hearing, the ED's presentation is limited to "information developed by the Commission .... " TEx. WATBR CODE ANN. § 5.228(a).

J2. In a contested hearing, the ED may provide infonnatlon that opposes rul application, as long as the information is within the litnits of the law. TEX. WATER CODE ANN. § ILl33.

13. All parties to a contested case have the right to present a direct case and to cross-exrunine the opposing party's evidence. 30 TAe § 80.1 15(a).

'.. " ,~ ~.. 156 14. The ED has standing to appear as a party in this proceeding and was authorized to pmsen!

the Commission's evidence and arguments ill opposition to Mr. Ware's case.

15. An applicant may request that au application be remanded to the ED for action as an uncontested matter if: (l) all timely hea1'ing reqnests have been withdrawn or denied or (2) all parties to a contested case reach a settlement so that no facts or issnes remain cOlltrovelted. 30 TAC § 80.101.

16, A heming was required in this case because the ED remained a party to a contested case after the Brazos River Authority withdrew its opposition and because there was not a settlement between the remaining parties.

17. Scientific testimony presented by a party must be offered through the testimony of an expert, and that testimony must be based on a reliable foundation. TEx. R. EvrD. 702.

18. A finder of fact is to determine the reliability of the evidence, and "[u)nreJiable expert testimony is not evidence." Gross v. Burt, 149 S.W.3d 213, 237 (Tex. App.--Fort Worth 2004, pet. denied).

19. To establish the reliability of an expelt's testimony, an offering patty must first establish the reliability of the analysis that the expert used in reaching his conclusions. Six nonexclusive factors are used in determining whether scientific testimony is reliable: (1) the extent to which the theory has been Or can be tested; (2) the extent to which the technique relies upon the subjective interpretation of the expert; (3) whether the theory has been subjected to peel' review and publication; (4) the technique's potential tate of error; (5) whether the underlying theory or technique has been generally accepted as valid by the relevant scientific community; and (6) the non-judicial uses that have. been made orthe theory or technique.

Gross v. Burt, 149 S.W.3d at 237, citing Merrell Dow Phm'ms.. Inc. v. Havner, 953 S.W.2d 706, 714 (Tex. 1997), cel'l. denied, 523 U.S. 1119 (1998) and E.l. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549,557 (Tex. 1995).

20. Mr. Ware did not establish that the method used by Mr. Jones, Mr. Ware's expert witness, was reliable.

21. The water of every flowing river in the State of Texas is the property ofthe state, and the Commission is the state's agent for the regulation oHts water. TEx. WATBR CoPE ANN. § 11.021(a).

22. The COlmnission has the authority to allow persons to appropriate state water for specific uses. TEX. WATBR COPE ANN. § 11.022.

23. The Commission may grant permits to applicants who seek to appropriate unappropl'iated state water. TEX. WATBR CODE ANN. § 11.124.

24. The amount of water for which the Commission may grant permits may not be more than is available. TEX. WATER CODE ANN. § 1l.023(e).

25. In 1967, the Texas legislature abandoned the state's former system of recognizing both riparian and appropriative rights. In re Adjudication of Water Rights of Brazos III Segment ofBrazos River Basin, 746 S.W.2d 207, 209 (Tex. 1988).

16. .In place of the fanner system, the legislature adopted "an orderly forum and procedure for the [Commission's] adjudication and administration of water rights." Brazos Ill, 746 S.W.2d at 209.

27. The Commission is required to "provide certainty in water management" by evaluating the state's major river basins. TEx. WATER CODE ANN. § 11.0235(d-2).

28. For all permits, the holder has the right to appropriate water only to the extent and for the purposes stated in the permit and subject to the protection of the holders of senior water rights. TEx. WATER CODBANN. §§ 1l.135(a) and 1351.

~ '. :- " .' 29, An "appropriative dght" is the right to impound, divelt, store, take, or use a specific quantity of state water acquired by Jaw. 30 TAC § 297.1(4-), 30. The holder's rights to appropriate water may be affected by the amounts that the holder actually uses or can beneficially use, and "all water not so used is considered not appropriated," TEX. WATER CODE ANN. § 11.025, 31. If the holder of a permit does not beneficially use his water, then the right of approptiation is considered to be not perfected, TEX. WA1ER CODE ANN, § 11.026.

32, The Commission has discretionary authority to temporarily reallocate unperfected appropriative water rights to persons other than the regular permit holder. An applicant may seek a term permit, a permit that is issued for a term of years rather than in perpetuity, TEx. WATER CODE ANN. §§ 1l.1381(a) and 11.026.

33. A term pennit allows all applicant to use water rights that have not been perfected by the holders. A term permit creates derivative rights, not original rights, so that the maximum use of water maybe achieved. TEx, WATER CODE ANN. § 11.123.

34, The Commission may deny an application for a term pennit if the permit will jeopardize financial conunitments for water projects or if the pennit will prevent the holder of the senior appropriative right from beneficially using his rights during the period of the tcnn pennit, TEx. WATER CODE ANN. § 11.1381(b) and (c).

35. If the Commission approves a permit, then the rights that it confers are subordinate to any senior appropriative rights. TEX, WATER CODE ANN. § 11.l381(d).

36. The Commission may issue a term pennit "when there is insufficient unappropriated water in the source ofsnpply to satisfy the application." 30 TAe § 297.19(a).

37. A holder of a senior appropriative right may challenge an application for a term permit by showing that the Commission's issuance of a term permit wonld adversely affect the holder's benefioial use of its senior rights. In proving this adverse effect, the holder may use as its proof: water use projections in the state or regional water plans, economic

indicators, population growth projections, electrical generation needs, or "other reasonable projections based on accepted methods." 30 TAC § 297.19(b)(2).

38. The Commission may deny an application if the proposed pennit would be detrimental to the public welfare. 30 TAC § 297.l9(b)(4).

39. In 1997, the Texas legislature mandated the Commission to adopt an updated water availability model (Model) for six river basins in Texas. TEx. WA'fER CODE ANN. § 16.012(g).

40. For direct diversions from a stream without suffwient water storage facilities, an applicant must prove that approximately 75% of the water requested is available approximately 75% of the time when distributed on a monthly basis and based on the available historic slream flow record. 30 TAC § 297.42.

41. Neither the ED nor an applicant is required to use the Model in determining wheth~r water is available in each river basin in Texas.

42. The COlmnissiOIl has the anthority to contract for "scientific and technical enviromnental services," illCludit)g scientific data analysis, to be used in the modeling to be conducted by the ED. TEX. WATER CODE ANN. § 5.2291 (a).

43. The ED has the authority to rely on scientific data analysis it) enforcing the terms of a permit and in presenting information abont an application for a pennit. TEx. WATER CODE ANN. § 5.230.

44. A contesting permit holder may rely Oil "reasonable projections based on accepted methods," and an applicant and the ED may do the same. 30 TAC § 297.19(b)(2).

45. The Commission may Use approximate numbers in estimating water availability in permit application proceedings. 30 TAe § 297A2(c).

46. For every permit, a priority date is established for the appropriation of water and for the claimant's right to use the water. TBX. WATER CODE ANN. § 11.141.

[[

47. The me8Bllring date fol' these priority dales is the date of filing of an administratively compiet~ application, 30 TAC § 297.44(c), 48. The date on which a priodty date comes into being is "[w]hen the Commission issues the permit .... " 30 TAC § 297.44(c).

49. An applicant's right to tak~ and use water is limited "to the extent and purposes stated in the permit." TEX. WATER CODE ANN. § 11. 135(a).

50. A permit may include special conditions that limit the total amount of water that may be divelted. TEx. WATER CODE ANN, § 11.l35(b)(5).

51. With respect to all types of permits, the Commission may include « ••• conditions and restrictions ... to protect the priority of senior water rights." TEx. WATER CODE ANN. § 11.1351 52. Each term pennit is subject to the unique statutory limitation makin~. term permits "subordinate to any senior appropriative rights," TEx. WATER CODE § 11.l381(d).

53. Courts generally interpret undefined temlS according to their ordinary meaning. TEX. Gov'T CODE ANN. § 311.011(a); Geters v. Eagle Ins. Co., 834 S.W.2d 49,50 (Tex. 1992).

54. In affirmative sentences, the ordinary melUling of "any" is "every" or "all." BRYAN A.

GARNER, GARNER'S MODERN AMERICAN USAGE 52 (3d ed. 2009).

55. Term permits are subordinate to all senior water rights, TEX. WATER CODE ANN. § 11.138J(d); 30 TAC § 297.19(a).

56. Ml'. Waxe failed to carry his burden of proving that sufficient water exists in the Brazos River basin or that all applicable statutory and regulatory requirements have been met to warrant issuing to him the proposed Water Use Permit No. 5594A.

57. Pursuant to tbe authority of, and in accordance with, applicable laws and regulations, the requested Permit should not be granted.

58. Pw'Suant to 30 TEX. ADMn~. CODE AJ<.1N. §§ 80.23 (d)(2), the Executive Director and Office of Public Interest Counsel may not be assessed allY portion of the transcript and reporting costs.

III. EXPLANATION OR CffANGES 1. The Commission sustained the ED's Exceptions regarding Findings of Fact Nos. 24, 25, 34,37,38,39,43,45 and Conclusion of Law No. 40, as recOlmnended by the ALJ in his March 17,2010 reply to the parties' post-PFD submissions.

2. The Commission modified Finding of Fact No. 29 to provide consistency with the TCEQ's water availability review, included in the record as Applicant's Exhibit No. 47.

The change was consistent with the ED's Exceptions.

NOW, THEREFORE, BE IT ORDERED BY THE TEXAS COMlVllSSION ON ENVIRONMENTAL QUALITY, IN ACCORDANCE 'WITH THESE FINDINGS OF FACT AND CONCLUSIONS OF LAW TffAT: 1. The application of Bradley B. Ware to amend Water Use Permit No. 5594 is denied.

2. The Applicant shall pay the COUlt reporting and transcript costs for this case.

3. The CWef Clerk of the Conunission shall forward a copy of this Order to all parties, and no amendment to Water Use Pelmit No. 5594 shall be issued.

4. All other motions, requests for specifio Findings of Fact or Conclusions of Law, and other requests for general and specific relief, if not expressly granted, are denied for want of merit.

.• ~. • ',.o .... ~•• 5. If any provision, sentence, clause, or phrase of this Order is foJ' any reason held to be invalid, the invalidity of any portion shall not affect the validity of the remaining POltiOllS of this Order.

6. The effective date of this Order is the date the Order is final, as provided by 30 TAe § 80.273 and TEX. Gov. COPE ANN. § 2001.144.

ISSUED: APR 2 0.2010 TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Exhibit F August 28, 1997 Interoffice Memorandum regarding Water Availability Analysis , TI

Texas Natural Resource Conservation Commission INTEROFFICE MEt40P..1'.NDU1~ To: Kariann 8okulsky, !~anager h.ugust :;!8. 1997 Wacer Righcs permltt~ng "nd Conserv'at lon SeCt-ir.n Water Quantity Di"/isicn ...

Throuah~:. .. Surface Harman Settemeyer, Leader Water Avai:abilitv '" InterState C"o:nract Team .Iatar Quantity Oivisi<m .

Fro:n: Shiyan Jiang Surface \'1ater J\vailabllitv &. rnte~st.ate Water Quantity Division ~ S;;bjec:: Bradley ll. Nara, Applicat:,oll Lampa>SaS River Bra~os River Basin aeli County 9lATER AVAILABILIT¥ ANALYSIS Application Summary The applicar.c is seeking authori:.atio!1 co di .tert 13(; acre-feet pel:

year ~or irrigation purposes from the Lampasas Rive". cributary of '":.he ~i':tle River, t.:t'ibutary of the 1317«::::05 River, tho B~azos River Basin. The maximum diversion rate is 1.U "f.s '5GO 9"x).

DO>lll.s.tream water Rights of Record There are 24 downstream wate);' rights of ,ecord Oil the La:~pasas River, a",l1;horizing 69,111 acre-feet per year for municipa'. industrl.al., irrigation and mining purposes.

Reported consumptive use for these Hater rights durin\' the period. of ),970 through 1989 averaged 10,532 acre-feet per year '15 percent of the authorized amount) with a maximum in 19~" oE r,,,, 01" ',C1:e- feet (93 percent of the authorized amount) . 'rhere are 61 further dO>lllstream ~1ater rights of recoro ;1 the Little River and the Brazos River, authorizing 817,744 acre :.ilet·per year for tm.lnicipal, industrial, irrigation. minir>9, recreation and other purposes.

Reported consumptive use for these water rights durin£1 the period of 1970 through 1989 averaged 364,394 acre-feet per year /45 percent of the authorized amount) with a maxinlum in 1970 of 424,600 acre-teet (52 percent of the authorized amount) . . Estimated Stl:Elamflow and Streamflow Simulation Staff used two USGS gages to estimate streamflow at the appl~ .. ,\Ut ~ s location: 1) USGS gage OS~04000 on the Lampasas River ae Youngaport, Texfts·, which is located about ~~ miles downstream of chs applicanj:' s location;. 2) USGS gage 08~03800 on the Lampasas River llear Kempner, Texas, which is located about 13 miles upstream of the applicant's location _ For the period of 1940 through 1993, the ~stimated streamflow at the applicant's location averaged 164,560 acre- teet per year with a maximum fiow of 661,245 acre-feet in 1992 a~d a minimum flow of 11,692 acre-feet in 1951.

The Environmental Analysis fo. this application has recommended an instream flow restriction of 16 CE8 at the applicant's location (or cts at: USGS Gage No. 08:1.03800) during the tr.ontf:t1 July t;hl:ough :-latch and 51 cfs at the applicant's locat.ion (or :;8 cfs at USGS Gage !·10. 08103BOO) during the other months.

US'ifl..g estimated str~a.mf 10V}, Gtat f YE.!." f oIT.ied di t ""ct di 'lersi on simulation for the delnand of 130 acre-feet per :;·:,ar loith ·the streaflow restriction. Simulation result.s indl.ca':..€: that, for the period of 1940 through 1.993, 100 percent and at least 75 percent of the demand of 130 acre-feet per year would be mel: ~n 44 and 78 pel:cent of years, respectively. Honthly demand I<ould be met in 84 percent of months.

Unappropriated Water The Commission's revised 'Ylater avail.ability computel. modelL (Run V) fer the Bl:azos River Basin indicates that there is inadequate unappropriated water available at the applicant' 6 1 oc,,: ion _ For the 96.ioo of 1940 through 1979, 100 percent. at. least 75 al:d 50 percent of the demand of 130 acre-feet per year \"ould be met ~n 0, 0 and 27 percent of years, respectively.

Based on this hydrological analysis, streamflo·.4 at ,.he applicant's location is adequate to meet the requested demand of 130 acre-feet: per year, but unappropriated water at the app~icant's location is not adequate. Hm<ever, the dOwl1st.eam water rights c,,'we not fully developed. Therefore, the h}'d.ological analysis only supports issuance of a ten year term permit for the applicant . .......... ./ ' . ,/'} r ., /" \ I . '-. ..•.i .<.' '-"tb- I' .,;< Shiyan .Jiang ,/llhct», Rhginebring Spec~~ist

'-. ,

., ... • ,.'" '

I , HYDROLOGY UNIT ANALYSIS FACT SHSET Applicant:~radley B.Ware Wat.er Right '-:::----:-::-:-::-:::::7:-::-00------------------------- River Order No'~1~6~4~1~6£8~O~0~0~0----------------_ . Stream: Lampasas River Basin: Brazos River Coun t y : --"B"'e"'l,."l~.______ Reauested Amount: 130 acre-feet fO k one veer Drainage Area, 1, 0 B 6 sa. mil es --_._--'-- gt reamf 1 O\-: 11:l,'&L ~~:arage Anriual Streamflow I f\cr~- f€et: 164 I 56C . . . _______ H:t,hlum, 11, 692 NaximlUll; __ ~~~.1.L-_.__ . _________ Sotl.rce: USGS gage 08104000 on Lampasas Ri·..er at Younusport USGS gage 08103800 on Lampasas River nearh...,,}:"'e~~l!l;;O~n~e~r:_;·:--;"::7:7:"="-- Period of Record,1940-1979 (Sl040Ql Adjustment Factor,D.B7S8(810400) "a:nod of Record:.1,963.1993 (810380) Adjustment FactOl",l..3276Ul103BO) \ - pO"lnstream Water Rights ConsidecratiQz:s Lamltasas River: 24 Water Rigllts 69,111 AF/Y ~~~-~.!~~~i~t~t~l~e~R~l~'v~e~r~a9lln~d~B~r~a~z~o~S~R~1~',~~'e~r~:__26~1~~W~a~ter Rigt.ts _~~1~7LL.7~4~4~A~R~/~YL--

availability of Appropriation It,onthly. Demand Distribution in Acre-Feet ~ __ _ _L F_.li....... ..lL- .li....... _J_ _J_ _A _0_ ..lL- ..1L.

8 8 10 10 1 19 19 18 9 1e 10 8

!nflow: Streamflow S~udy Period: __~1~9~4~O~-~1292923--------~---=-~--__ ---------------- Annual Demand: ~1~3~O~~~____~___ Acre-Feet Annual Demand Diverted in 44 Percent of YF;:t.rs At Least 75% Annual Demand Diverted in 78 Percent Of Years t·lontllly Demand Diverted in 84 Percent. of l,t~!~tlls Inflow: Unappropriated Nater Study Period: __~1~9~4~0~-~1~9~?~6~________~----. __--__-- Annual Demand'~~1~3~0_~~_________ Acre-Feet Ann\1al Demand Diverted in 0 Percent of y,. I~$ ',At Least 75% Annual Demand Diverted in 0 J?ercent of Years 'At Least 50% Annual Demand Diverted in --~2~,7~-- Percent of Years'

staff reco!W!lended inBtr~am fJ,ow r1lstdcdon Qf . ul M reh at U S ' e 081 3.JllUL.: .·111 . '\ . ~'. .'?/ /' . '. " Si~tmre, Date', ' / <! ". / 97 . '. -,' .. ,' " , .', " ,, • Texas Natural Res~)Urce Conse~ya!ion .!;.9mmi~ . • ion INTEROFFICE MEMORANDUM To: . Kariann Sokulsky. Manager Date: .lui) 28. 1997 ,. Water Uses and Availability Section Water Quantity Division

Thnl:~ard Kiesling strtom Uses T~um \ ,ter Qunnlit,' Dlvisit)n

from: John Dutros Instream Uscs Team Waler Quantity Division Subject: Ware. Bradley B.

L.ampasas Rivcr~ Brazos River Busin Bell County

Environmenlnt revicws ofwalCl' right npplicUl!Oll~ arc cnndllctcd in accordance \\Jlh §11.147. 11.150. * and *11.152 nfthe Texas Wmel' Code and \\!th T:-lRCC udminl'tr;tthe rules \\hkh include 30 TAe ~261.21 through *261.26. *21; 1.41. §261.42. *261.4:>. lind *297 AN th"'ll~h *~'1, .5~. These staltnes n..'"quirc loh!! TNRCC to c()n~id(!r th!,): p\)~:-;ihlu impac:ts urlhe granting 1.)1' tl \\ute,' right on \h¢ instrcam uses of the affected hody nf wflter. Inslrcmn us. .'$. \nc\u~t~. hut al' ...~ nHl Iim1t\.~d 11 \, water quality. fish and \\ i1dlife hnbitut. ,md rccrcoliim. In ndditinn.I'M,ihlc ill\Pllcl~ hi h:\y~ "nd "'PlOries nrc addressed.

Ex.anlplcs (If ~igniticai\t impacls mc those that nllcet nUluml rcsnurccs: r\!$.uH in dt!\~rillration of\\'a\~r qunlil) or tlood protection: result ill \UHllln\\ubll.l rt:duclinn nr itl . 'ntil1i1l1k . ins~rci.lm uses: cndung¢r species or plont nnd nnimnllir" ollllthcir hahitat: signiliclll\ll)' rcJuce pl'<\ductivil)' "I' lite hay and cstuar;. syslems: or contrihttlc 10 R sct'ies or rdated projects Ihat in~l\lve inJividually minor but collccth'cl)' signit1cnnt (ldvcrsc imracl~,

~:NVIRON~1f.NTAL ,\NAt.YSIS The applicant seeks nut!torl,ntinll 10 divert and usc not tn c~cccd 130 ncre·!'eet 'Vlller per annum rrom llie Lampasa, River ttl irrigate 100 acre,; ofland inl!dl County. 'fhe mnxin'. H diversion is 1.11 cr•.' tnQr4er to protecl instr,,",n tlSes. hinlogical habil<\\,. ,lnd walcrq\lulit;. t>ftht l.ampasas River. staffr¢Commcnd& dfycrsiol1 be limited to \imc~ \\'hel1 st~nmno\\' Itt th¢ USGS g3g~ ,,081 003800 n~ar KC1I1lX'r. Texas is 'equallo or exceeds 38 ciS during lite monlhs of Aprillhrou!lh June and 12 efs during . 'july through March. . '

. .,.;, .. : .: . ';',. ,;', ",: ,.' , .

... Memo to Kariann Sokulsky Page 2 Jul)' 28. 1997- • Recreational t)sos According to USGS top(lgrnphk map~. the Lampu;as River is a perennial slre:tm. The TOMS Parks and WlIdlife (TPWD) publicnlioll. "An .'\o"I;"is \lfTcxas \\'al~,,\nys." chamotorizes this section of the river_lh~ 42 miles nbovc Ihe Slillhou,,, II"Uo\\' Rescr"l.ir. u., 1111\ ill[\ 1.1\\ \"Iler k,vel, 1\\051 ~lfthe time. I Jowc\'cr. during rcrlod~ ofhci\\-y nlin)oi, tile rh er h~~tlmcs un exciting n:cn:ntiorml corridor to a scenic and imoresting area.

Aquatic and Riparian H~hitfllS

·\quatic and riparian habitnt~ of the La11lp""as Rlwr (Ire of high qlli\lh~. Based on photo!lraphs prn> idcd by Ihe applical1l. the banks appenr to be heavily, c!!ctalcd wilh nmive Irc«. hrush and grosses which provide for aqualic habitals along the l.amp"'"< Rh·cr. I'still1t1t~d from I'SGS gage data. monthly median flows for the Lampasas Ri\'C'r prnratcd lfllhC' "ppljCrtnl'~ Itlcnli,'n range from;). high "r 12:1 cfs in :-'131' to a 10\\ 20 cfs in August tTahle II.

Jan ~Iar Apr $.' 6:! ..

I" ' 'I

TNRCC uscs a default mcthotlnh\g)' I'llI' delNlllining n,1\\ Nstriclioll" dcvck'pcd liy Lyons (1979). l.yon" recommcnds minimum !lows uf 411"1, "I' the munthly m"diun Il,\\\'> I;" October thr(lugh February and 60% or the monthly mcdinn 110l\'s Ill(- March Ihrough Scptcmhcr 1<' Pi'lltcct fisheries habitat. Applying 1..)'tll1<' rccommcndnli(llls to thc opplicmlt's 10coII"". nnd avcroging the r"commendations ror inonths Octobcr-Fc:hruary ~1I1d :\<h\rdl.Seph.~lllhcr. minimllm now:; needed for habilal mainlenance allhe applicant', diversion point ;Ire 16 ell; dl'ring Octol,cr-Fl'oruary and 32 cis during March-Scrt~mber. " more upprnpriutc grouping nf thl.! months. hm:cd ~In similar monthly medians, would he April-June and July-March. Based nn the<e ~rollpings Ihe recommended minimum 110\\'s lor huhiHll maintcnance nrc 51 cr.,; d\lring t\rri1~,llInt! and I(l ci, during .Iuly~M8rch at the applicant's location, In order to simp1it~' applicant's compliance {<llhe "I"~~,slcd Nstriclions, tht.'SC flows \\eft! prorntcd hack to the t}SGS gag.e nClll' Kcmp~r.. 'l'cxus to yidd (11 \\ "l!$lrktious (,If 38 cfsduring the months of Aprillhrough June and 12 cr., during .lui> through Ma-

The applicant's proposed diversion point is located ab(\\"c Stiliholise 110110\\ Keservoir On the l.a.mpasns River ·desigl1nleu as Stream Scgmelll No. 1217 of the Slate of Texas Watci' Quality Irrventory,f19?6); a'cffiucnl limited segmenl, lJesign~tcd water lISCS of the s~gmcnt incllidc c',>ntri~t . ·rcCJell.lion and.high aquatic·life \lSC. There nrc II tOlnl of seven pcmlitted outfall, n" n c~mhincd lOla.! :,d[~"aigc ·~f 4'.00 MOD.· There. lire Il\l knO\\1\,\Val~r «"ulil)' problems in Ihe segment. . . . . .... '. , .' " ,; ',:Foide~eimi~i~g \l~illijlitil;)·li()\V~· ;,hid; w~illd ~ustnit; ,;vat~; qu~lity, the seveh ~l\Y.I\\,q'~.c;tdowno\v' " ._' ..,,", (7Q~Hs.used, '.,The .7Q2 is dcn~ed.d,~ the \(lWCSI .average now for s¢vcn.collsC<utivc days Ihai is, , ..,:, '.; , ',' , ~" :.: ,," , " , , ' , ' , ", . . ,..',.. :.: " : ...: . ',' ",'" . , " •.> ", ",." ':. ',' ': ";' , ." . "': , .:. ,

'. Memo 10 Kilrinnn Sokulsky Page 3 July. 28. 1997 • • expecled 10 rccur ever), 1\\'0 years. The 7Q2 is 'lali$tically.rleril"ed from hi,torical d~il~ now data. The .7Q2 from the Texas Surlacc Waler Quality Standards 'Hthe 1'SGS gage ~nSl 0)800 for the period or record. 1964-1994, is 11..13 cfs. Since the Illwer 11,)\\' restriction "I' 12 til; is higher tlmn the 7Q2. Ihe recommended n"w restrictions should pW\'lde ~d\."\lUt\l~ pr\\h!Clim~ tbr {1\1..' \\lUer quality o.f the Lamp"-~s River.

llA YS AND ESn' ARIES The prnpo,~u diversion site i~ more than :W(} rh ~r mi1c~ l~lfIn lht! Gutf of ~kxicl,). The pwposeu diversion of I,ll "ere·fect ofwaler rtnm Ihe I .aml""'" Rhor should nOI Mfcct the oa~s and estuaries oflhe Bouzas Rher Basin. The elll11l1ll1ti\'c effect ,,1"011 waler rights inlhe Bmll)' Rivcr Basin upon the (cct;lving bars and csluaril!s is Ill)! known.

SnnlARY The applicant seeks uuthl,)rir.;:llinJl 10 di\'ert und usc nOI h) t!xct\!d 1;\0 ac~wf\!c:l 1\1' \\oter per annllm from tile l.ampnsus River tor irrigution purrN;C5, The nKlximunl dhcr~i(ln i.. 1.11 cf:-:. In order to protect inslrcmn uses. biologica! habilllls. and W"I~r qu,,1it~ ofl!>c I.amp~,~s Ri\cr. slafr recommends diwr>ion be limited to times \\'hen streamflolV allh~ I.:SUS·gagc "OSJ()(j~Stli' lIcaT Kemper. Tcxn., i. equal 10 or exceeds 38 cis during the monlhs of April through .I line und 12 cf, during July through ~1afch. Thi,> illslrcam ao;s¢~!'mcnl \\'H~ t,'ondw.'ted w:ing ~Hrr'l!nl T~R("(, l1pt..'r'l1ing proct::uurcs and policies am! a\'nit:lh'~ l'xi.::ting. data.

L1TEHA1TRE CITE!)

Bounds. R. L. and ll. W. Lyons. :979. Existing resen'oir ami "'eam management recommendations statewide minimum Streamflow rCCIIlllmcuunliolls. Fcde'ral .\i<l Project P·30·){4.

Texas Parks aud Wildlife Department. ,\u.ltin. Texas .

., . :: .ce:· -.... Lann Sopkout, Water Quantity. Division Mfchclle To\~n; Woter Quantitv Division . ,.: S~i~a'h Jiang,,\vdterQuantiiy Divisio~ .. '.' " , .,' .' .. '" .: : " ... ::. ' .. '. : .,: • TEXAS NATURAL RESOURCE • CONSERVATION COMMISSION INTEROFFICE MEMORANDUM

TO: Texas NalUral Resource Conservation DATE: Jul)' L 1997 Commission

THRU: Chief Clerk. Texas Natural Resource Conservation Commission

FROM: Water Rights Permits Team. Surface Water !.Ises Section

SUBJECT: Bradley B. Ware Section 11.121 Water Use Permit Applicmion Lampasas River. Brazos River Basin BeU Counties

1lle application was received ,\pril 25. 1997. ,\ddililllmi information needed tn process the appliclllion wus received June 12, 1997. and the applicalion was declared administratively complele on June 23. 1997. Public Notice for the application should be sent to the applicant for 11<\\'spaper pUbltcntion and tt) nil water right holders in the Brazos River Basin. The Mlice ~h(\uld indicale Iha! Ihe application will he considered by the Executive Director no sooncr Ihan October J4. 1997.

The applIcant secks mHhIWi7Hlillllll) divert and lise 11"( to csccctl 130 acrl··fcc. of WOller per year from the Lampas.'\., Rh·cr. tribuL1ry of Ihe Lillie R;",,!'. IrihlllUry of Ihe Bfl\W~ River. IImzl" Riwt Basin lit a maximum ralc of 1200 gallons per minUic to irrigme 100 acres of land in Bell CoulUy IIpprll".lHlmely IS miles southwesl of Killeen. Texas, within thrce lracts or land compriSing 161 acres in Ihe W. B"· n Survey, Abst. No.67, the D.O. Van Vicheloll (Vcchcton) Survey. AIm. No. 85 t. alld Ihe C. E,l\laTlis S·,. ~y. Absl. No.29! in Rell County. Texas. Ownership or lhillund by the applicant II C\'klence{l by a Warram.,· Iked willi Vend(>r's Licn rt:Corded in Volume 1524, pnge 1i71 of the Bell County Ikcd Rcc<lrd~ . .. lhe appliGanl is requesJing aUthllri«~lion to divert water from <lilY poim ,>I' llw len. or. casl. bank or the \cach ot: the rJveradjacell~ io his property. The upstream point of lhe river at his pT~lpcny line is N 6O.6"W; 2,050 , feet from the soulheast corner ,of the aforesaid Van Vichetoll Survey. The downstream. pomt of-the Hvcr at at .... his·property lin<is, Latitude 31.032 N, Longitude 9'l.992·W,. and is, also S37"E; 41(JQ, tect !~qm the' Q

:'. afotesald.S~rvey . ,. . corner:.,,' :. .: ,

'. :..... ·F:e~:·h~~e!)~enJiai<! aild;'aw~;cr coj)~erv~ti~n plali h~s beet~ submit)ed \~ilh tile appflc;ltion. )'.1 ",- ":: ' . '". ',',,-" . ' " , '" . .' ....:.

' .... " '.' . ' .. , '. '.

Bradley B. Ware Page 2 • • July l. 1997

The application is sufficicllI for filing.

Mic~elle Town Waler RighlS Permitting Team Wan Quantity Division -1.. . Allachmems oc: Hydrology. EnvirOlll11elllal. and Data Entry. TNRCT

.,' , '., . .,' " ,', " , :" . " .. '

• • ,. J 1997

Michelle Town TNRCC MC-160 Auslln, Texas

Dear Michelle, Please find enclosed: 1. Boundry map of my property.

2. Six (6) photos of the diversion point.

3. Check for $1,610.28.

4. LeHer concerning flow restriclion on Lampasas River.

Sincerely, fJ, \-.I wv-- Bradley Ware

'. ."'''': ' , .' .... . :,' .' . . '.' , .... .,-" '., ... .' .. .' . , .. '. .'. ~ .'." :. .

Texa$ Nalural Resource Conservation Commission MC-160 Austin, Texas

Re: Flaw Restriction on Lampasas R;ver

DearTNRCC: I have lived on Ihis ranch for the past 38 years - all my hfe. and the place has been In my lamil~ for years. During ali 01 that time we have paid taxes on Ihls land 10 the cenler of tha nver. It has come to Ihe point Ihat we need water lrom the Lampasas River to be able to make the ranch proouce a constant crop and to 00 so efficlenlly enough to pay the taxes and expenses 01 farming.

The Brazos River Authority led me to believe Ihall could bUy Shllho"se Hollow "lake water" and not have to obtain any permits or have any restrictions from the state t SIgned a contract to this effect Because. of that agreement I have spent nearly one hundred thousand <iollars IS100.000.00). Since then I have learned that a state permit IS reqUIred to use water from the lampasas River.

In our meeting On Apfl125. 1997. It was dIscussed lhalthe lowest flow that I eculd pump from would be 13 CFS and that last year in July. I would not have been able to PUfT'O.

The Ware Ranch has over two miles of flVer frontage Everyday t See the fiver and nsh from II often, The river was low last year, bot not as low as it has been U) the past, ncr as low as It probably will be in the future. The river has always sustained the low limes and has cOme back to be as nice as ever without doing any great danger to the envlronmen.t last sommer Ihe river was . nal nearly as low as it was In the 70's when you could walk acroos the river without ge«ln9 your shoes weI. The Lampasas is a low flowing river and flucluates often. Hlstonca';j. we have seen It range from being just holes of water to having over a hundred acres of my lant' covered. We have Irved Ihrough the goad limes and the bad w;th the river Throughout the years we have slways used what we thought was goad stew8"'s"'P so that the next generation would have somelhing of which to be proud. Our goal has alw.. ,. been to improve this ranch and beIng able to use the rIver waler for irrigalron.

In the 60's it was necessary to sign up for rights to Ihe water. My dad wanted Wilal the ranch deserved, but knew that he was not financiallv able to afford the equipment nec""ssary to pump the· water. sohedid not sign up. He wasn't the type to Iry to hoard up something he couldn't use.

Nowwe tiave found a way to put in an high effiCiently system. We would ask thaI TNRCC . conslderthe hlslP'Y. and herit~ge of this ranch and Ihe need of future generalions We ask that )'Qu not:dfscrimlnate.agalnst us because we have. not been able to financially provide the Improvements .' .'that thls.ranch, has ' always . needed. . ' '. ,. . '. .. ' - .. .,-,-.~ .. -.-.-~ .......... ~ ... --------' .... -.-

• ...,.- -'-'~'-'~ .-----.~--.-­

• I feel that the reslliction of 13 cfs Is too e~treme. especially with the discharge of waster water from the city of lampasas. As you koow. the summer mont~s is when agriculture needs the most water.

Thls is also the reasoo why the loVi Energy. Precise Application (lEPA) center PIVO!. uSing tow drift nowes and drag' hoses was chosen over less expensive systems being used In this area The LEPA has a 95% efficiency rating and is the most efficient system being built today Please keep this In mind when setting the lOW flow restricllons It 15 possible that these more efflcier.! systems should have a different rating that some of the older systems My pumping location Is on a natural gravel bed and when the lIVer is low. Nature \'1111 restricl tM amount of water that I cen consume It IS my leehng that in the past Nature has always had a way of restraining my use 01 the natural resources and Ihus protecting the environment.

Please consider my view as you make your decision. If you have any quest.ons. please dO nOI hesnale 10 conlact 1M .

Sincerely.

Bradley Ware Ware Ranch Rt 3.80.211 Killeen, rexas 76542 !

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BRADLEY B. WARE 141'5 DL (.~2~'t·M AT Jam: 211 }<U,.LEE.'( TX E:i:~·6~~~ nss", c, - s ::;n: ..

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Exhibit G November 14., 2006 Interoffice Memorandum regarding Water Availability Review for Permit No. 5594 ..

AI>P'EXh'~ " ~ '" """-""'>;<.--...

. - Texas Commission on Environmental QuaUty INTEROFFICE MEMORANDUM To: Kathy Hopkins, Application Manager Date: November 14, 2006 Water-Rights Team Water Rights Permitting & Availability Section Through: ~ Bookout, Team Leader .

Surface Water Availability and Interstate Compacts Team From: Jeff Thomas, Engineer Surface Water Availability and Interstate Compacts Team Subject: Bradley B. Ware WR5594 CN 5594 Lampasas River, Tributary ofthe Little River, Tributary of the Brazos River, Brazos River Basin Bell County WATltR AVAILABILITY REVIEW Application Summary - Water Use Penni! No. 5594 Authorizes the permittee (Bradley B. Ware) to divert and use not to exceed 130 acre-feet otwater per year from the Lampasas River, Brazos River Basin. The pennit will expire on November 7,2007. The pennitlee has applied to extend the term an additional 10 years.

Water Availability Review The Commission's water availability model (WAM) for the Brazos River Basin protects existing water rights based on the prior appropriation doctrine. The period of record for the Brazos WAJ\11s 1940 to 1997. The applicant's request was modeled with a priority date of the administrative complete date ofthe application, January 5, 2006.

The existing tenn pennit contains an in stream flow restriction of38 cfs for the months April through June, and a flow restriction of 12 cfs for all other months. This flow restriction is appJied at U.8'.G.S. gaging station 08103800 lleaT Kempner, TX TCEQ Resource Protection Staff did not recommend any changes to the existing instream flow restriction.

Using the W AM Cuuent Conditions simulation of the model, simulation results indicate that 100% and 75% ofthe allilual demand of 130 acre-feet would be met in none of the years, and 5.2% ofthe years, respectively.

Bradlqv B. Ware Term Renewal Applicalioll. Permit No. 5594 Page 2 0/3 Noyember J4, 2006 Conclusioll The water avaiJability analysis indicates there is not sufficient water available at the applicant's location 10 support the requf,sted demand of 130 acre-feet per year. Therefore, hydrological analysis cannot support the granting of this application to renew the existing term permit.

,,' Bradley B, Ware Terlll RenewClT Application. Permit No, 5594 Page 3 0/3 November 14. 2006

ID:'DROLOGY UNIT ANALYSIS FACT SHEET Applicant: Bradley B. Ware Water Right: 5594 Stream: Lampasas River . Basin: Brazos County: Bell Requested Amount: 130 af/yr

Remarks: Resource Protection staff did not recommend any changes or additions to the, existing sh'eamftow restrictions.

WAMcode: WR559411 130. JRR3J9970701 1 2 0.0000 P559U 1'559415594101 BRADLEY B WARE

Exhibit H November 25, 2008 Interoffice Memorandum regarding Water Availability Analysis for BRA's Application No. 5851 ,

App. Exh. "_--,,S~C?e:._ Texas Commission on Environmental Quality INTEROFFICE MEMORANDUM To: Ron Ellis, Application Manager November 25, 2008 Water Rights Permitting Team Through: . ..R~ Lann Bookout, Team Leader 6--: Surface Water Availability & Interstate Compacts Team From: Kathy Alexander, Hydrolohr1S1 Surface Water Availability '& Interstate Compacts Team Subject: Brazos River Authority Application 585 I CN600506794 Brazos Rivet·, Brazos River Basin WATER AVAILABILITY ANALYSIS Application Summary The Brazos River Authority (BRA Or the Authority) has applied fol' a pelmit, designated its "System Operation Pe!ffiit". The BRA owns the following water rights, which comprise BRA's system of reservoirs: Certificate No. 12-5155 (Possum Kingdom Lake), Certificate No. 12-5156 (Lake GranbUly), Certificate No. 12-5165 (Lake Limestone), Cettificate No. 12-5157 (Lake Whitney), Certificate No. 12- 5160 (Lake Belton), CeJ1ificat~ No. 12-5 I 59 (Lake Proctor), Certificate No. 12-5164 (Lake Somerville), Celtificate No. 12-5161 (Lake Still house Hollow), Celtificate No. 12·5163 (Lake Granger), Certificate No. 12-5162 (Lake Georgetown) and Cettificate No. 12-5158 (Lake Aquilla). The BRA, along with the Texas Water Development Board and the City of HOllston, owns Water Use Permit 2925A (Aliens Creek Reservoir). The BRA also owns Certificate Nos. 12·5166 and 12-5167, which authorize various uses of water within the applicant's other certificates and penn its. The applicant is cun'entl), authorized, pursuant to a TCEQ order, to manage and operate its tributalY reservoirs as elements of a system, coordinating releases and diversions frolU the tributary reselvoirs with releases and diversions from the applicant's main~stelll reservoirs to CO\lselve water.

BRA seeks a Water Use Permit to authorize: • A new appropriation of state water ill the amount of 421,449 acre·feet per year for mulliple use purposes on a finn basis ill the Brazos River Basin. Out of the 421,449 acre-feet pel' year of unappropriated water being requested, the maximum amount of unappropriated water that will be available if such water is divelted upstream at USGS gage No. 08091000 Ileal' Glen Rose. Texas is 150,538 acre-feet per year of firm water, and if such unappropriated water is divetted upstream at USGS gage No. 08098290 near Highbank, Texas, the maximum amount of unappropriated water that will be available 'at that location is 144.306 acre·feel per year of firm water.

• Diversion of the water from: (i) the existing diversion points authorized b) BRA's existing water rights; (ii) the Brazos River or the USGS gage No. 08091000 neal' Glen Rose, Texas; (iii) the Brazos Rivel ar USGS gage No. 08098290 neal' Highbank. Texas: (il') the Brazos River al Ihe 8ra;o,~ River Author/I)' Pel'lu/1 S851 ' Page 2 of 14 Gulf of Mexico; and (v) at such other diversion points that may be identified and included in BRA's proposed Water Management Plan (WMP), which is subject to TCEQ's approval.

• Use of tip to 90,000 acre-feet of water pel' year of the firm supply to produce, along with other unappropriated flows, an interruptible water supply of 670,000 acre.feet per yeai' and the appropriation of that inten-uptible water supply. Out of the 1,001,449 acre-feet of finn lind interruptible water being requested, the maximum amount of finn and interruptible water that will be available if such water is diverted upstream at USGS Gage No. 08091000 near Glen Rose, Texas is 60,538 acre-feet of firm water pel' year and 157,000 acre-feet of intelTuptible water per year and if such water is diverted upstream at USGS Gage No. 08098290 near Highbank, Texas, the maximum amount of film water is 54,306 acre-feet of water per year and 303,000 acre-feet of interl'llptible watel' per year.

• An exempt interbasin transfer authorization to use, on a finn and interruptible baBis, the appropriated water in the adjoining San Jacinto-Brazos Coastal Basin and the Brazos-Colorado Coastal Basin.

• An appropriation of eun'ent and future retUl11 flows (treated sewage emuent and brine bypasslretum) to the extent that such return flows continue to be discharged or returned illta the bed and banks of the Brazos River, its tributaries, and BRA's reservoirs. BRA indicates that such appropriation of return flows would be subject to intelTuption by direct use or indirect use within the discharging entity's city limits, extraterritorial jurisdiction, or contiguous water certificate of convenience and necessity boundary. Specified discharge points and amounts of water will be accounted for on a monthly basis as part of BRA's WMP, which is subject to TCEQ's approval. .

• Operational flexibility to (i) use any source of water available to BRA to satisfy the diversion requirements of senior water rights to the same extent that those water l"ight.s would have been satisfied by passing il1flows through the BRA's reservoirs on a priority basis; and (ii) release, pump and transport water from any ofthe BRA's reservoirs for subsequent storage, diversion and use throughout the BRA's service area.

• Recognition tilat the System Operation Permit will prevail over inco\\sistent provisions in the BRA's existi11g water rights l'egarding system operation.

• Use of the- bed and banks of the Brazos River, its tributaries and BRA's reservoirs for the conveyance. storage, and subsequent diversion of (i) water appropriated under this application; (ii) waters lhat are being conveyed via pipelines and subsequently discharged into the Brazos River, its tributaries or stored in the BRA's reservoirs; (iii) surface water imported from areaS located outside the Brazos River Basin for subsequent use; (tv) in-basin surface water and groundwater subject to BRA " control;(I') waters developed from future prC(iects; and (vi) current and future reuse of surface and groundwater based emuent requested by this application. This bed and banks authorization is subject (0 BRA, after identifying specific points of discharge and diversion and conveyance and other losses, obtaining future authorizations to satisfy the requirements ofTWC § 11.04:'. Such points of discharge and diversion and conveyance and other losses may also be identified and included in BRA's proposed WMP, which is subject to TCEQ's approval.

[jra;Ol R/\1t!/' AlilhoJ'l1y f'cwmit 58JJ Page 3 of 14 Until the construction of Aliens Creek Reservoir is completed, the BRA requests that the System Operation Pe,mit include special conditions which authorize: • Appropriation of state water in the amount of 425,099 acre-feet per year for multiple use purposes on a firm basis in the Brazos River Basin. Out oflhe 425,099 acre-feet pel' year of unappropriated water being requested, the maximum amount of unappropriated water that will be available if such waler is div.,ted upstream at USGS Gage 08091 000 11eal' Olen Rose, Texas is 150,538 acre- reet per year of fil111 water and if such unappropriated water is diverted upstream at USGS Gage 08098290 near Highbank, Texas the maximum amount of unappropriated water that will be available is, at that location, 175,306 acre-feet per year finn water.

• Use of up to 90,000 acre-feel of water per year of BRA's finn supply to produce, along with othe,' unappropriated flows, an interruptible water supply of 869,000 acre-feet per year. Out of the J ,204,099 aore-feet of firm and interruptible water being requested, the maximum amount of finn and interruptible water that will be available if suoh water is diverled upstream at USGS Gage No. 08091000 near Glen Rose, Texas, will be 60,538 acre-feet of firm water per year and 190,000 acre-feet of interruptible water per year and if such water is diverted· upstream at USGS Gage No. 08098290 near Highbank, Texas the maximum amount of finn water will be 85,306 acre-feet of water per ye." and 284,000 acre-feet of interruptible water per year.

• Exempt interbasin transfer authorization to use, on a firm and intem'ptible basis, the appropriated water in the adjoining San Jacinto-Brazos Coastal Basin and the Brazos-Colorado Coastal Basin and to transfer such wate,' to any county, munioipality or the municipality's retail service area that is partially I'll the Brazos River Basin for use in that part of the county or municipality's retail service area not within the Brazos River Basin.

Water AvaUability Analysis The Commission's Water Availability Model (WAM) for the Brazos River Basin protects existing water rights based on the prior appropriation doctrine. The period of record for the Brazos WAM is \940 through \997. The appllcation was declared administratively complete on October 15, 2004. TCEQ Resource Protection Staff recommends that the applioation be subject to special conditions to protect aquatic habitat and the envil'Onment, inclUding the following (For specific numeric values for the flow requirements below, refer to the Resource Protection Staff menlO dated November 25, 2008): I. Total storage in Permittee's system reservoirs is the trigger for determining hydrologic condition, which, in turn, determines instream flow requirements.

2. Interim instream flow requirements apply at six USGS gaging stations, The instream flow requirements are applicable at all times.

3. The level of flow (i,e., Subsistence, Dry, Average, or Wet) is determined seasonally based on hydrologic condition.

4, Permittee sllall meet a seasonal schedule of individual high flow pulses. The magnitude, duration. timing and frequency and measurement location for the pulses are included as special conditions in Resource Protection Staffs 111emO (Additional discussion of how these high flow pulses were included in the availability anall's;, i, included in Section C.2 (UI1(Ij'propl'ialed Waler) orthis memo).

5. 1n addition to the above requirements. Permittee is prohibited from divelting and

Bra:os River /lulhoJ'it}, Pel'lII/f 56'S; Pag.e 4 of J4 storing water authorized by this ·permit unless streamflow meets or exceeds the 7Q2 value at additional gages located below Pennittee's reservoirs as specified in Resource Protection Staff's memo.

A. Inlerbasin Tran~rel' and Bed and Ballks Pursuant to TWC §11.085(v)(3) and (v)(4), the requesl for an exempt interbasin transfer does not require a waler availability analysis. For the request to use the bed and banks of the Brazos River and its tributaries, the application indicates that although specific locations, quanlities and diversion rates for the bed and banks request are unknown at this time, potential diversion locations include the perimeter of all existing and proposed BRA reservoirs. The application also indicates that potential diversion locations include the fo\1owing stream reaches: • Brazos River from the confluence of the Salt and Double Mountain Forks to the Gulf of Mexico, • Double Mountain Fork of the Brazos River below Lake Alan Henry to its confluence with the Brazos River, o Leon River from Lake Proctor to the confluence with the Little River, o Lampasas River from Lake StiHhouse Holtow to the confluence with the Little River, o Little River from the junction of Leon and Lampasas Rivers to the confluence with the Brazos River, • Yegl1a Creek from Lake Somerville to the confluence with the Brazos River, o Navasota River from Lake Limestone to the confluence with the Brazos River, o Allens Creek from below Aliens Creek Reservoir to confluence with the Bra7..Ds River. o Any oth~r tributary of the Brazos River into which water appl"Opriated under ·this application (groundwater or surface water under the control of BRA) is discharged.

With the exception of Permit 2925 (Aliens Creek Reservoir), BRA's cunent rights authorize use of the bed and banks of the Brazos River atld its tributal"ies below the Authority's reservoirs to deliver water to downstream customers. The application indicates that the location of specific amounts, rates, releases and loss information will be detailed in BRA's Management Plan once the specific amount of unappropriated water and return flows available 10 BRA is determined. Staff is of the opinion that accounting for the bed and banks transfer of water through a delivery plan will mitigate any effects on basin water rights. The accounting/delivery plan should be included in BRA's Water Management Plan (WMP).

B. Re/UI'17 Flows The application requests appropriation of current and future return flows in the Brazos Basin discharged from 136 locations by various entities. These discharges includ.e surface and groundwater based retut1l flows. The surface water based return flow includes discharges from BRA facilities, discharges of water originating from BRNs water rights, as well as discharges from facilities owned by othel· entities and originating from non-BRA sources of supply.

A review of water rights in the Brazos River Basin indicates that Permit 4218 (diversion of In acre-feet of water from South Nolan Creek): Permit 5088 (diversion of 37 acre-feet of water from South Nolan Creek): and Penhit 5089 (diversion of 60 acre-feet of water from South Nolan Creek) we,·e explicitly granted based on the presence of retum flows now being ch;imed as patl of this application. Staff

!Jra=()). Rh'er Ihf/horl~' fermif 50'51 Pa!:!.e 5 of14 re;ognizes the possibility that other basin rights wel'e granted based 011 the presence of the requested return flows. Because of this, a priority date of October 15, 2004 is assigned to the applicant's diversions of historically dischal'ged return flows. To evaluate the request for reuse of return flows, staff identified those return flows discharged from BRA facilities, or originating from diversions authorized by BRA's existing water rights, that have not been previously appropriated by other water rights as indicated in Table 1. below. BRA also requested reuse of retull1 flows generated by four power plants that receive contract water from BRA's water rigMs. These return flows result from once through cooling water, 01' other power plant operations, and are thus highly variable. The application did not provide sufficient itlfonnation to evaluate this request and these return flows were not included in the analysis.

The Current Conditions data set was updated with the amount of cmrent return flows as indicated in the application (74,387 acre-feet which is the sum of the maximum reported annual discharge amounts for each plant). The request to reUse return flows was modeled at the most downstream point in the basin to determine the volume of retum flows available to BRA on a basin-wide basis. Results indicate that 100% and 75% of the retulll flows were available in 45% and 81 % of the years in the period of record, respectively and the monthly amount of discharged return flows was available in 87% oflhe months.

Table 1. Return Flows Available to BRA Current Current Percent Surface Ground- TPUES Permitted Name Permit Discharge Current BRA orsw Water water Source from Returns Returns Number (mgd) BRA (ae- (ac- ftlyr) ft!yr) Sportsmans World MUDWTP 02461000 0.01 Possum Kingdom 100% 11.2 0 Double Diamond 02789000 0.06 Possum KinQdom 100% 67 0 Authority SWATS 02889000 2.5 Granbul"\' System 100% 730 a City of Copperas Cove 10045003 ~.5 .Lake Belton 100% 923 0 City of Copperas Cove 10045004 2.5 Lake Beltol1 100% 1.375 0 City of Copperas Cove 10045005 4.0 Lake Bellon 100% 1.600 0 - City of DeLeon 10078001 0.3 Lake Pl"Oc\or 100% 192 0 City of Marlin 10110002 ~.O Whitnev SV5tem 16% 159.4 0 City of Harker Heivhts 10155001 3.0 Lake Bellon 100% 2.780 '0 City of Gatesville 10176002 '1.2 Lake Belton 100% 1.731 0 City of Gatesville 10176004 1.0 Lake Bellon 100% 703 0 Cit\' of Granbury 10178002 2.0 Granbury System 100% 1313 0

IJra::m liNer Author/I)' Parmi/tio'51 r ~ge 6 of 14 Current CUrrent Percent Surface Ground- TPDES Permitted CUrrent BRA ofSW Water water Name Permit Discbarge Number Source from Returns Returns (mgd) BRA (nc- (ac- ft!yr) ftlvr) Lake Still house City of Lampasas J0205002 1.5 Hollow JOO% 580 0 City of McGregor (South WWTP) J0219002 ·0.99 Lake Bel(on 95% 651.7 0 City of Moody J022500J 0.2· Lake Belton JOO% 157 0 Authority/LCRA Georgetown/Still BCRWSS West 10264001 3.0 -house System 100% ZA02 1,657 Authority/LCRA Georgetown/Still BCRWSS East 10264002 21.5 -house System 100% J6.767 0 City of Taylor 10299001 4.0 Grangel' System 100% 2.220 0 Bell County WClD#J 1035100J 0.9 Lake Belton 100% 983 0 Bell County WCID#J 10351002 J 8.0 Lake Belton 100% J4.123 0 Bell County WCID#J J0351003 6.0 Lake Bel(on JOO% 5,389 0 City of Brenham 10388001 3.55 Lake Somerville 100% 2,485 0 City of Dublin 10405001 0.45 Lake Proctor 100% 325 0 Georgetown/StH!

City of Georgetown 10489002 Z.5 -house System 100% J,815 0 Georgetown/Still City of Georgetown 10489003 2.5 -house System 100% 1,423 0 Georgetown/Still Gity of Georl!etown 10489005 1.5 -house System 100% 1.389 0 City of Hamilton 10492002 0.44 Lake Proctor JOO% 392 0 City of Hillsboro 10630001 1.81 Lake Aquilla 100% 1,440 0 Lake Stillhouse Citv of Rosebud 10731001 0.25 Hollow 100% 194 0 Bell County WCID#3 J0797001 0.675 Lake Belton 100% 360 0 Lake Stillhouse Cit" of Holland 10897001 0.2 Hollow JOO% 93 0 Bell County WCID#2 11090001 0.094 Lake Belton 100% 63 0 Bell CoUllt)' WCID#2 I J09100J 0.08 Lake Belton 100% 70 0 Authol'ity TBRSS 11318001 10.0 Lake Belton 100% 8.5J3 0

flra~o,," Rh'cl' A~,'hD/'II:.l' /lcrmiJ 56'51 PR!!e 7 0 r 14 Current Cunent Percent Surface Gl'ound- TPPES PermItted Current BRA ofSW Wate), water Name Permit DIscharge Source from RetuJ'Ils Returns Number' (mgd) BRA (ae- (ae- W\'r) rtfy!,) Acton MUD 14211001 0.6 Granbury System 100% 366 0 Acton MUD 1421200J 0.49 Granbury SYstem \00% 268 0 City of Comanche 14445001 0.6 Lake hoctor 100% 324 0 C. Unappropriated WaleI' The request for unappropriated water was incorporated into the TCEQ WAM as follows: 1) The Dual Simulation1 approach was used. For each existil1gBRA authol'ization: a) Wale" rights activated only in the initial simulation represent e)listing diversions and storage authorized by the BRA's senior rights. These water rights calculate the total depletions and storage. . b) Water rights activated duting the second simulation calculate the depletion for the senior rights limited by the streamflow depletion in the preceding step. c) The final depletions al'e stored at a virtual control point until the priority date of the System Operation Pennit application (October 15, 2004), and d) BRA's reservoirs are refilled using a priority date of October 15, 2004, with the stored final depletions. Any remaining water is returned to the stream at the control points of the BRA's existing water rights.

2) TCEQ Resource Protection Staff recommendations for instream flow protection were incorporated into the Brazos WAM at the priority date of the application as follows: a) Seasonal flow requirements were converted to monthly values in acre-feet. b) The instream flow requirements were subtracted from the seasonal pulse values to determine the incremental HFP (high flow pulse).

0) The incremental HFP was multiplied by the seasonal pulse frequency to detennine the-total pulse volume for each season. d) The total pulse volume for each season was distributed by l1l0l1th e) The monthly pulse volume was added to the monthly in stream flow volume for each flow regime to determine tile WAM instream flow constraint for each month for each flow regime. and f) 702 flows for the additional control points were converted to an annual value in acre-feet and added to the model. g) Based on a distribution of the annual diversion amollnt to a monthly value in WAM and conversion of that valtte to a daily diversion in cfs, staff determined that the diversion rate for BRA's diversions would be- below 7,535 cfs at USGS Gage 081]4000, Bl-azos River near Richmond.

3) Afler applying the instream flow constraints. the new appropriation of water was then included in lhe I ror acldhinnfll explanation of Dual SimU\Dllon. Sf\: \\\llb~. R~lph A. 2(J(li WaleI' It,ghl., AIl(J~\·.H., I'ackagl' (lI'U..J/'J A/(JddlJJf ~\I'.sr"m {,.1m !./wllfal TH-:!S&. Te»fl~ Watcr RC~(I\1(ce$ Ins\llIlle. CtlHcg.e Stalion. re:-;as. Pp. Q4-%

Bra~()$ Riwl' Alllhol'iI), Pal'll/II )85/ Page 8 of 14 second simulation (which generated the final results) as follows: a) All BRA reservoirs are refilled with any unappropriated water at the priority date of this application. b) Diversions are made, backed up by system storage in all BRA reselYoirs, and c) All BRA reservoirs al'e then refilled again to ensure that all water potentially available under the permit application is impounded.

To determine the amount of water available for appropriation, Staff first evaluated the applicant's request for firm water, i.e., that amount of water that would be available 100% of the time during the period of record. The request for finn water was modeled using the rCEQ Full Authorization simulation, which does not include retulll flows. Staff evaluated the requests for finn yield water at the three points requested in the application; from upstream to downstream being Glen Rose, Highbank and the Gulf of Mexico. The most downstream point fol' measurement of in stream flow requirements is the Richmond gage. Staff calculated the amount of flow available to BRA at the Gulf of Mexico by detennining the amount of flow available at the Richmond gage and applying a drainage area ratio Idationship between the Richmond gage and the WAM control point representing the basin outlet at the Gulf of Mexico.

The analysis was conducted for two scenarios. The first simulation included Aliens Creek Resel'voit· at its fully authorized amounts fo\' storage and diversion, and was used to detelmine the amount of water available for appropriation after consideritlg all water rights at their fully authorized amounts. The second simulation was conducted to detemline if the watel' appropriated for Aliens Creek Reservoir could be used more efficiently by the BRA, in conjunction with other water rights requested by this application, until sucll time as Allens Creek ReselYoir is constructed. The amount of firm water available to BRA is indicated in Table 2. below. To the extent that removal of the requirement for wet season pulses at Richmond resulted in additional unappropriated water, staffrecomme)lded the additional amount.

The application requested an amount of additional water that would be available on a reasonably dependable basis. The application stales that this water would be available if 90,000 acre· feet of film water was used, along with other sources available to the applicant, to produce Ihe additional supply, Pursuant to 30TAC §297.42(d), Staff may recommend granting applications that are nol based upon the continuous availability qf historic, nOlmal stream flow on a case.by-case basis. A system operation in conjunction with other water rights is an application that may not be required to be based on the continuous availability of historic, normal slreamflow. The applicant has requested that the additional amount of water be evaluated using the criteria in 30TAC §297.42(c), thaI is, 75% of the water is available 75% oflbe time whe!1 distributed on a mOllthly basis (75175 criteria). Staff modeled this request using the Full Authorization simulation aud included the applicant's estimated CllITen1 return flows.

Model results (Table 3.) indicate that additional amounL, of water are available to the applicant using the -15175 criteria.

Table 2. New Annl'o{!riation of Water (includes Aliens Creek) Volume in acro·feet Location Firm Non·Flrm Glen ROse 13L363 157.000 Hh!hbank 144,306 303.000 -- .

Richmond )88.470 670.00(1 Gulf of Mexico 191.516. 670.000

Bl"a=o~. RiveI' /lllillor/t;'>' Parm1l585} Page 9 of 14 Table 3. New AI'PIoJ>riation of Water (does not Include Aliens Creek) Volume in acre-feet - Non-Firm Location .yirm .

Glen Rose 131,363 190,000 Highbank J 75,306 284,000 Richmond 237,920 869,000 Gulf of Mex.ico 241765 869.000 No Inju!')' Review The application requests authorization for operational flex.ibility to use any source of water available to BRA to satisf), the diversion requirements of senior water rights to the same extent that those water rights would have been satisfied by passing inflows through the BRA's reservoirs on a priority basis. The new authorization requested in this pemlit has a priority date junior to most basin water rights. Although changes in operations for BRA's existing water rights resulting from additional operational flexibility have the potential to affect river flows in the Brazos River and its tributaries, Staff is of the opinion that implementation of accounting measures should mitigate any impacts to senior and superior wator rights.

These accounting measures should be pat1 of the accounting/delivery plan, which should be included in the WMP.

The application requests authorization to release, pump and transport water from any of the BRA's reservoirs for subsequent storage, diversion and use throughout the BRA's service area. The request to release, pump atld transport stored water should have no effect ,m othel' basin rights so long as BRA obtains the appropriate bed and banks authorizations as needed. In addition, speelal conditions requiring BRA to maintain an accounting of water in storage by priority date should mitigate any impacts to downstream sellior and superior water rights.

The application requests that the Commission recognize that the System Operation Pennit will prevail over inconsistent provisions in the BRA's existing water rights regarding system operation. This would include existing limitations on the percentage of reservoir storage allowed to be used in system operations and identification of sources of supply. Specifically, the existing system operation order requires the BRA to exclude tributal), reservoirs from operation of the system during any period of time in which BRA's permitted storage space is less than 30% full. The application states that the Commission's teview and approval of the BRA's Management Plan will provide equivalent safeguards and, at the same time, allow the BRA greater operational flexibility. Staff agrees that there may be inconsistent provisions and recommends special conditions to clarify inconsistencies while protecting other basin waleI' rights.

Conclusion Based on the revie\,>, and analysis of this application. staff can supp011 granting the application provided the permit contains the special conditions proposed by Resource Protection staff and additional special conditions as indicated below.

A. Jnlel'basin Tran.!(er and Bed and Banks The water requested for exempt interbasin transfer will be authorized with a prioril) date of October \5. :;004 and as such will be alllong the most junior rights in the Brazos River Basin. Therefore. there can be

B/'(J=OJ; IlIwr AlllhOl'ilJ' Bra=o~' Rh\11' /Jas/J) Page lOofl$ 110 effects on eKisting water rights and staff can recommend granting this request.

Staff can recommend authorization for the use of the hed and banks of streams alreadv authorized in BRA's current permits, certificates and amendments, subject to identification of specific losses. Staff recommends that the permit contain the following special conditions: 1. The use of the bed and banks of Aliens Creek from below Aliens Creek Reservoir to the Brazos River is not authorized until Pennittee applies for and is granted an amendment to Permit 2925A.

2. Permittee is authorized to use the following reaches, authorized in Permittee's eeltificates and amendments, for conveyance of water, pre\'iously appropriated to the Permittee and water authorized hy this penn it, downstream for diversion at Glen Rose, Highbank and the Gulf of Mexico and any of the Pennittee's currently authorized diversion points within these reaches: A. Brazos River from below Possum Kingdom Reservoir to the Gulf of Mexico B. Leon River from Lake Proctor to the confluence with the Little River C. Lampasas River from Lake Stillhouse Hollow to the confluence with the Little River D. Little RiVer from the junction of Leon and Lampasas Rivers to the confluence with the Brazos River E. Yegua Creek from Lake SomCl'VilJe to the confluence with the Brazos River F. Navasota River from Lake Limestone to the confluence with the Brazos River 3. Prior to use of tIle bed and banks identified in Special 'Condition A.2. above, Permittee must submit to and have approved by the Executive Director, as part of its accounting/delivery plan, a procedure to estimate daily deliveries of water. This procedure should be in electronic format and detail by source, type and priority date, the amounts to be conveyed and delivered, losses associated with the conveyance, specific points of diversion, associated travel times, and times of commencement and tennination of transit for conveyed walers. Documentation of actual deliveries as wel! as the accoullthlg/delivety plan shall be maintained by the Pennittee in electronic fonnat and made available to the general public dlll'ing normal business hours and to the Executive Director upon request. Modifications or changes to the accOImtingidelivelY plan must be approved by the Executive Director.

4. The use of the bed and banks of additional streams and tributaries in the Brazos River Basin for conveyance of water appropriated under this permit, or other sources available to the Permittee, is subject to Permittee, after identifying specific sources and types of water, specific points of discharge and diversion, and conveyance and other losses, obtaining future autllOrizations to satisfy the t"'luirements ofTWC ~ 11.042.

5. The use of additional points of diversion within the reaches specified in Special Condition A.2. above is subject to Permittee, obtaining authorization to use those diversion points. The points of diversion may also be identified and included in Permittee's proposed \!{MP which is suqiect to Commission approval.

B. Reuse of Relul'Il Flows Staff can recommend grantillg BRA authorization to reuse return flows discharged from BRA facilities or originating from diversions under BRA's water rights, as indicated in Table I. above. subject to the following speqial conditions to protect water rights granted based on the presence of those return flows as

8ra:o~ mwl' AWnoriry BI'(1;()s TU),{!r Basin Page II ort~ well as other senior water rights: 1. Prior to the diversion of retum flows authorized by this penn it, Permittee must submit to and have approved by the Executive Director, a reuse accounting plan. Tbe reuse accounting plan must be in electronic fonnat and accollnt, by source, for all retunl flows discharged and subsequently diverted. The reuse accounting plan should include amOtmts discharged by outfall, am aunts of return flows used by permits granted based on the presence of these retUl" flows, and estimated travel times and conveyance losses from discbarge point to diversion point(s). If the return flows will be stored in Permittee's reservoirs, the reuse accounting plan should include any evaporative losses associated with the storage. Pennittee shall maintain the approved reuse accounting plan in electronic fOOlla! and make it available to the general public during nonnal business hours and to the Executive Director upon request. Modifications or changes to the reuse acconnting plan must be approved by the Executive Directol'. The reuse accounting plan shall be included as pmt OfPellllittee's accounting/delivery plan, 2. The right to divelt discharged return flows from plants owned by lbe City of Granbury (TPDES Pennit No. 10178002), Acton MUD (TPDES Permit Nos. 14211001 and 14212001), Bell County WClD #2 (Tr,DES Permit No. 11090001), City of Georgetown (TPDES Permit Nos. 10489002 and 10489003) and the Cit)' of Holland (TPDES Pennlt No, 10897001) is limited to the amount of surface water based retum flows discharged from those plants that originates from water rights owned by the Petmittee. Pennittee is not authorized to divelt groundwater based retuOl flows discharged from tbese plants, except as may be auihorized by Special Condition BA .. Pennittee must include in the reuse accounting plan the total amount discharged from the plants and the percentage of that water that is divertable under this permit.

3. Permittee is authorized to divert historically discharged groundwater based retum flows from the Brazos River Authority/LCRA BCRWSS West (TPDES Pefmit No.1 026400 1).

4. Future discharges of groundwater based return flows may be diverted if those retUI1l flows originate from groundwater owned by Permittee 01' are discharged from treatment plants owned by the Permittee. Prior to diversion, Permittee must apply for and be granted an amendment to this permit authorizing these diversions and shall submit for approval by the Executive Director, a revised accounting/del ivery plan addl'essing such new groundwater based discharges ...

5, Pennittee is authorized to diveli only that water discharged by the City of Madin (TPDES Permit No. 10110002) originating from water rights owned by the Permittee. Permittee shall calculate the diveliable amount oHile City'S discharge and include this information in the reuse accounting plan.

6, Permittee shall only divert the actual annual amollnt of return flows discharged from the Bell County WCID #1 (TPDES Permit Nos. 10351001 and 10351002) and the City of Harker Heights (TPDES Permit No. 10155001) less up to 172 acre-feet as authorized by Permit 4218.37 acre· feet as authorized by Pemli! 5088 and 60 acre-feet as authorized by Permit 5089 when the aforementioned permits are being used.

7, Diversions and storaue of retul1l flows shall not occur at rates or in amounts higher than the actual daily amount of return nows discharged into watercourses in the Brazos River Basin. after accounting for the calculated losses and traveltime from the discharge point(s) to the diversion poin\(si in accordance with the accounting/delivery plan.

8ra::os· Rn'el' Allfhcwlty Bra:oJ,' Rnl$1' Ballin Pagt 12 or 15 8. Prior to diversion of the water authorized herein, if sufficiently accurate measuring devices are not available, Permittee shall install and maintain measuring, deyice(s) capable of measudng within plus or minus 5% accuracy, at the discharge point of each wastewater treatment plant (WWTP) to record the amount of return flows discharged into the Brazos River or its tributaries on a daily basis.

9. The priority dale for diversion of up \0 116,434 acre-feel (l 03 .899 mgd) of return flows is October 15,2004.

10. The priority date for diversion of future return flows ill excess of I J 6,434 acre-feet (103.899 mgd) of diSCharged return flows is October 15, 2004 but is not subject to call by senior and superior pelmit holders in the basin and is not subject to insU'eam flow limitations.

J I. Prior to diversion of any return flows in excess of the individual TPDES Permit limits indicated in the Yable l. Return Flows Available to BRA, Pelmittee must appJy fOI' and be gl'anted the right to reuse those return flows. Permittee must amend the reuse accounting plan to include future return flows prior to divelting said retul'n flows.

12. The diversion of up to 116,434 acre-feet (103.899 mgd) of water is dependant upon potentially intet11lptible return flows or discharges and is conditioned on the availability of those discharges.

The right to divert the discharged return flows is subject to revocation if discharges become permanently unavailable for diversion and may be subject to reduction if the return flows are not available in quantities and qualities sufficient to satisfY the permit. Should any of the discharges become permanently unavailable for diversion, Permittec shall immediately cease diversion of those return' flows and reflect such reductions in the reuse accounting plan.

13. Pel1nittee's diversion and use of return flows is subject to interruption by direct use or indirect use within the discharging entity's corporate limits, extraterritorial jurisdiction, or contiguous water ce.iilieate of colwenience and necessity boundal)', provided the discharging entity has applied for and been granted authorization to reuse the retum flows.

C. UnappropriaFed Water Staff can recommend granting reduced amounts ofunapprop1'iated water as follows: !.able 4. New Annro dation of Water Volume ill acre-feet r14catioll, ]:il'm Water Non-Firm 'Vater Glen Rose 131363 157,000 .Highbank 144.306. ____ -303.000 Richmond J 88.470 670.000 -.- Gulf of Mexico 191.516 670.000

lJt(J:(),~ RI\'C~r tluthorJly Bra:Q,' Ril'eJ' BtLsin p(J~ lS of}$ Table 5. New Appro riation of Water (does not include Aliens Creek) Volume in acre-feet Location Fkm Non-Firm Glen Rose , 131.363 190,000 Highbank 175,306 284,000 Richmond 237,920 869.000 Gulf of Mexico 241,765 869.000 In order to ensure that existing basin rights are protected, the following special conditions should be included in the pelmit: 1. Prior to diversion or storage of the additional water authorized by this pennit, Pennittee shall provide to and have approved by the El<ecutive Director, a daily accounting/delivery plan that includes, at minimum, the following: a. The accounting/delivery plan shall address reservoir storage and withdrawal plans for each system reservoir and account by priority date and amounts for any inflows, evaporation, water in storage and diversions from the reservoirs under all or Permittee's priority dates and authorizations including reuse, b, A metllod to. account for inflows to system reservoirs for .purposes of compliance with special conditions requiring passage of pulse flows and estimation of those inflows. c. An accounting of instrearn flow and pulse requirements to include total system storage, gage flows at the measurement points, high flow pulse volume impounded and the release schedule for the impounded high flow pulse, and timing, magnitude and duration of pulse flows, d. The accounting/delivery plan must detail how measurements will be taken to detelmine if impoundment or diversions under either Permittee's senior orjunior rights can be made. e. The accounting/delivery plan mllst identify, account for, and distinguish between finn' and non-firm water supplied or delivered from Pennittee's system of reservoirs. In addition, the accounting/delivery plan must specify diversion points for this water if those diversion points are not specifically identified in this permit. Any additional diversion points must be within the reaches where \lse of the bed and banks is authorized. Any diversion points outside those reaches will require an amendment to this penni!. f, Permittee shallmailltain the approved daily accOlmtingidelivery plan in electronic format and make it available to the general public during normal business hours and to the Executive Director upon request. Modifications or changes to the plan must be approved by the Executive Director.

2. If the total amounts of firm water indicated above are divelted at Glen Rose or Highball\<, the additional amollnt of firm water available below those [loints is reduced accordingly. Permittee shall include the amount of that reduction in the accounting/deliver)' plan.

3. The full additional amount of nOll-firm water is only available when the amount of firm water is reduced by 90.000 acre-feet at Gle\1 Rose, Highbank and the Gulf of Mexico. If less than the full 11Il1Ollllt of non-finn water is used, the amount of'lhe firm water reduction shall be ad.iusted propoltionately, 4. The non·fil·1n water authorized above includes 74.387 acre·feet of historically discharged return flows. A reduction in firlll yield water is not required in order to divert these retUlll flows

8ra::o~ Rlw;r AUfhor/I)' Bro;!QS IMer BaMn Pagv 14 of l5 S. The remaining 42,047 acre-feet of retUln flows out of the total amount of 116,434 acre-feet of return flows (Table 1.) may be diYelted by the Permittee so long as the total diversions under this permit for all of the authorizations do not exceed the amounts of firm water and non-finn .water indicated in Tables 4. and S., above unless Permittee applies for and is granted the authorization to divert additional amounts of water.

6. Permittee may not exercise a priority call on water rights in the Brazos River Basin with priority dates senior to October IS, 2004 for pUll'oses of increasing storage in and/or diversion from Permittee's system reservoirs where drawdown of Permittee's system reservoirs is caused by compliance with the terms and conditions of this permit.

7. The request for operational flexibility to use any source of water available to Pennittee to satisfy the diversion requirements of senior water rights to the same extent that those water rights would have been satisfied by passing inflows through the Permittee's system reservoirs on a priority basis is limited as follows: a. To water previously stored in Permittee's reservoil's as documented in the accounting/delivery plan required in Special Condition C.l. above. b. Use of this option shall not cause Pennittee to be out of compliance with Special Condition C.l. and Special Condition C.6.

8. Pelmittee may divert water from storage in its permitted reservoirs and store that water in Permittee's other reservoirs for use within the Pel1nittee's service al"a so 10llg as all diversions and storage are included ill and comply with the prOVisions of the accounting/delivery plan and Special Condition C.I. above.

9. The total amount of water divelted and released from Permittee's system reservoirs in any year for each authorized purpose of use may not exceed the cumulative authorized total for eauh purpose until Pennittee applies for and is granted amendments to the underlying authorizations.

10. Pennittee is required to comply with the existing System Operation Order and certificates of adjudication reqUiring Permittee to exclude tributary reservoirs from operation of the system during any period of time in which Permittee's pelmitted storage space in that regervoir is less than 30% full (until all system reservoirs are below 30% capacity, at which time the reservoir can resume system operation), until such time as Permittee submits, and the Commission approves. a WMP for the Brazos River Basin which details how such limitations will be altered. Any altel'alion$ to the limitations must be in compliance with the accollnting pl'ovisions reqllired in Special Condition C.l above.

11. Until slIclr time as the POlts are closed on the dam impounding Aliens Creek Reservoir. authorized by Pennit 2925, Permittee may impound and diveIi additional unappropriated water as specified in Table 5. su\{jec\ to Special Conditions C.I. through C.IO. aboye.

11. Permittee shall pl"pare and submit to the Commission. a Water Management Plan (WMP) which shall include such studies and other information as may be required by the Commission to demonst ...te Permittee's compliance with and its ability to comply with all of the Special Conditions included in this permit.

·,

8ra:o$ River Amhorlry [lI'a;os Rival Basin Pagel50fJ;=i .

13. The initial p"oceedings to consider the adoption of the WMP, and any major amendment thereof, shall be pursuant to contested case procedures. Any proceeding to consider the adoption or major amendment of the WMP shall be preceded by notice and opP01tunity to request a hearing, in accordance with the Commission's re~ulations applicable to water rights permitting proceedings.

The WMP shall provide an adaptive management strategy for water supply and thus may be amended from time to time upon the request of Permittee 01' on the Commission's own motion.

The initial accollnting/delivery plan shall be submitted as part of the WMP.

Exhibit I Excerpts of the October 17,) 2011 Proposal for Decision ··~~~~~xt~IW;~dti~ October 17, 2011 Les Trobman, General Counsel Texas Commission on Environmental Quality P.O. Box 13087 Austin Texas 7871 1~3087 Re: SOAH Docket No. XXX-XX-XXXX; TCEQ Docket No.; 2005-1490~ WR; In Re: 'Concerning the Application by the Brazos River Authority fol' Water Use Permit No. 5851 and Related Filings near Mr. Trobman: The ahove-referenced matter will be considered by the Texas Connnission on Envirornnental Quality on a date and time to be detennined by the Chief Clerk's Omce in Room 201S of Building E, 12118 N. Interstate 35, Austin, Texas.

Enclosed are copies of the Proposal for Decision that has been recommended to the Connllission for approval. Any party may file exceptions Or briefs by filing the documents with the Chier Clerk of the Texas Commission on Enviromllental Quality no later than November 7, 2011.

Any replies to exceptions or briefs must be filed in the same manner no later than November 17, 2011.

This matter has been designated TCEQ Docket No. 2005-1490-WR; SOAH Docket No. 582- 10·4184. All documents to be filed must clearly reference these assigned docket numbers. All exceptions, briefs and replies along with celtification of service to the above parties shall be filed with the Chief Clerk ofthe TCEQ electronically at llttp:llwwwlO.tce{J.state.tx.us/epic/efilingsl or by filing an odginal and seVen copies with the Chief Clerk of the TCEQ. Failure to provide copies may be grounds for withholding consideration of the pleadings.

Sincerely, Sincerely,

1)~~ 6) 1?tW'.ktL.

William G. Newchurch AdriJinistrative Law Judge WGN;HB/nl Enclosures cc; Mailing List

300 W. 15'" Street, Suile 502, Austin, Texas 78701/ P.O. Box 13025, Austin, Texas 78711-3025 512.475.4993 (Main) 512.475.3445 (Docketing) 512.322.2061 (Fax) www.soah,state,tx.tis SOAR DOCKET NO. XXX-XX-XXXX TCEQ DOCKET NO. 200S-1490.WR CONCERNING THE APPLICATioN .§ BEFORE THE STATE OFFICE BY THE BRAZOS RIVER § AUTHORITY FOR WATER USE § OF PERMIT NO, 5851 AND RELATED § FILINGS § ADMINISTRATIVE HEARINGS

TABLE OF CONTENTS I. lNl'RODUc;;TION., ...! ............. u ................. n .................... ..•~ .............. , ........................ , ... 1 II. BRA'S CURRENT WATER RIGHTS ................ "............................................ 01 . . . . . . . . . 5 III. APPLICATION DETAILS ...... i ............................., ....................................................... 6 IV. PARTIES ................................................................................................................ n ••••••• 7 V. PROCEDURAL HISTORY ................................ u ...............................: ......................... 8 VI. JURISDICTION ................................................. n.' •••. , ........................ , .......................... 9 A. The Required Notice Was Provided ........................................................................ 9 n. Settlements Do Not Require Amendments or Aliditional Notice ....................... 11 C. BRA May Seek a New Permit Instead Of Permit Amendments ........... ..:.......... 13 VII. OVERVIEW OF WATER-RIGHT PERl\flTTING LAW ....................................... 16 VIII. GENERAL REQUIREMENTS OF WATER CODE CHAPTER 11 AND RULES .................... ,...... ,......... ,...............................................................,...... ".......... ,... 17 A. Completeness of Applicatiou ................................................................................... 17 n. The ApplIcatioll does not adequately identify n ma:dmum !'ate of diversioll as required by 30 TAC § 295.6 .......................................................... ,........................ 19 C. Because BRA opted to pU1'sue a two-step process, the Application dOes not adequately identify points of diversion as required by 30 TAC·§ 295.7............. 20 D. New W~-tCl' Facilities and Maps ............................................................................. 30 E. Other Compliance Issnes ........................................................................ ,................31 SOAR DOCKET NO. 582-10·4184 TABLE 01' CONTENTS PAGE 2 TCEQ DOCKET NO. 2005-149()'WR

IX. CCG'S AND MR. WARE'S IMPAIRMENT CLAIMS ............................................ 31 X. WATER AVAILABILITY Al\'D IMPAIRMENT OF EXISTING RIGHTS ......... 41 A. Ovc.rview ................................... U . . . . . . . . . . . . . . . . . . . . . . . . . . . " . . . . . . H •• ; •••••• H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 B. The two-step process makes It impossible to fully aualyze water availability at tllis time........ 44 n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . , ••

C. In three specific respects, the Section 11.134 analysis of the SysOp Permit shows that it "Ul negati'~ely impact senior water rigbts ........ u ... u.~ ..................... 49 1. As a result of the two-step process, the SysOp Permit overstates the amount of water available coming from the Possum Kingdom Reservoir and the other reservoirs ................................................................................. 49 2. Prior 10 construction of the AlIcns Creek Rescrvoir, the SysOp Permit overstiltes the amonnt of walel' available..................................................... 53 3. As a result of the two-step process, the SysOp Permit overstates the amount ofwnter available in the "Glen Rose Scenario. t ) ........................... 60 XI. BENEFICIAL USE .... u ......................................................... ............. .......................... ~ 63 XII. ENVIRONMENTAL FLOWS ....................................................................., ...... :........ 69 A. Overview of Environmental Flow Law ................................................................. 70 B. Environmental-Flow and Instream-Use Requirements Are Not Onerous ........ 74 C. Environmental Flow Standards Have Not Been Adopted .................................. 75 D. Expert Wituesses on Environmental Issue8 .......................................................... 75 E. Interim Envh·onmental Flows Proposed For This Permit .............................:.... 78 F. Fish and Wildlife Habitats and Water Qnality .................................................... .80 G. Salinity .............................. u ...................................................................................... 87 1-1. Golden Algae ......................:........ 1......................................................................... 102 I. No dispute COllcel'ulng Bays and ~stua.l'ies ....................................................... 103 J. No Dispute Concerning Groundwater ... u ............. ~ iH . . . . . . . . H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 SOAHDOCKET NO. 582·10-4184 TABLE OF CONTENTS PAGE 3 TCEQ DOCKET NO. 200S·1490-WR

XlII. PUBLIC WELFARE, PUBLIC INTEREST, AND INSTREAM USES ................ 105 A. Public Interest and Welfare O:mccrns Already Addressed .............................. 105 B. Overview of Parties' Concerns ............................................................................. 106 C. Scope of the Public Interest and Welfare Inquiry ............................................. 107 D. Adequate and Lower Cost 'Vater Supplies ................................. n ..................... l10 E. Avoidance of Envirotnnental Iulpacfs .................................... ! ............................. 113 F. Bnrden of Proof Concerning Public Welfare, Public Interest, and lustream lJses ............................. ,.................................................................................. ;........ 114 G. Instl'cam Recreational Use ofWafer .......................................................... 116 H ........

H. Agricultural Use of\Vater .......................................... ;......................................... 1J9 I. BRA's Application Is Not Detrimental to the Public Welfare .......................... 119

XIV. CONSISTENCY WITH WATER PLANS ............................................................... 120 A. Water Code § 11.134(c) is not nn impediment to permit issuance in this casco ............................................... ,......................................................................... 120 B. As required by Water Code Section 1l.134(b)(3)(E), the BRA Application and the proposed SysOp Permit are consistent with the adopted State aud Regional Water Plans ........................................................................................................... 121 XV. CONSERVATION AND DROUGHT PLANNING ...........................................;.... 124 A. Applicable Law ...... ,., ........................ ,............. "..................................................... 124 13. BRA Evidence and Argmnents ................................,........................................... 126 . C. TIle ED's Revie,,, ..................................... ".............................................. "............ 128 D. FBR's Objections .................................................................................................. 129 E. NWF Objections .................................. ,................................................................. 131 F. Al. Jst Conclusion ................................................................................................... 137 XVI. RE~rURN FLOWS ............................................................................................ ,......... 137 A. Applicable Law ........................................... u ................................................................. 139 SOAl! DOCKET NO. 58z..10·4184 TABLE OF CONTENTS PAGE 4 TCEQ DOCKET NO. 200S·1490·WR

B. Once discharged, return flows arc "state water" and, thel'cfore, available for appropriation by others ....................................................... "..................................... 140

1. BRA's Argtlments ......................................................................................... 10 •••• 141 2. The ED'"s Argllments ........... ,........................ ".............. 10 .................................... 144 3. ~rhe ALJs' Analysis ............................. 147 H ..............................................................

a. BRA mi&construes Sedion 11.042(c): The bed and banks authorization contemplated in Sectioll 1i.042(c) applies to a wide array of types of water, inc~uding return flows .• ,........................................ ;.~, ............... ~ ...... 148 b. The ED misconstrucs Section 11.046(c): The right to appropl'iate return flows provided by Section 11.046(c) does not extend only to the discharger of those rehu'n flows, the owner of the base water right from which the' return flows originated, or someone having coiltractual rights with either of them ............................................................................... ~ .................... u .... 148 c. Sections 11.042(1') and 11.04.6(c) are reconcilable because they address ' mutually exclusive scenarios ................................................................... 149 HI

d. BRA's )'equest to divert I'fllture" retllm flows (i.e., retnrn flows that are not alre"dybcing discharged into the Brazos River Basin) ,is J'easonable and preferable to theapproach advocated by the ED .............................. 151 e. BRA's diversions of return flo\vs, both current and future, should be treated as new appropriations snbject to satisfying illslream flow requirenlellts ............................................................................. ,................... 154 f. Both BRA's and the ED's versions of the SysOp Permit comply with 30 TEX. ADMIN.CODE § 297.42(g) .................................................................... 156 XVII. BED AND BANKS· AUTHORIZATION .................................................................. 156 XVIII. INTERBASIN TRANSFERS ........ ,..... '... h ...... ' .......................................................... 159 XIX. OTHER. CONCEHNS REGAlUHNG THE TWO·STEP PR.OCESS .................... 160 A. The Two.Step Process Is Unprecedented ........................................................... 160 B. The First of the Two Steps May Result In AU Order That Is Not Fiual .......... 165

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XX. FOLLOWING CONSTRUCTION OF THE ALLENS CREEK RESERVOIR, THE ED'S LIMITATiONS ON THE OPERATION OF THE RESERVOIR ARE UNNECESSA~YI'"''"''"''.''''.''H''''''''''''''''''''''''''''''''''', ............................................... 173 XXI,. .COASTAL MANAGEMENT PLAN ............ 'n ................. u .......... , .............. u ........... 175 XXII. WETLANDS ........................... ,................. :................................. ;................................ 177 XXIII. NEED FOR A WATERMASTER ........................ n .................................................. ; 178 XXIV. POSSIBLE FUTURE LOSS OF USGS GAUGES .. ~ H .................................... ......... 183 XXV. PERMIT CONDITIONS PROPOSED BY OTHER PARTIES ............................. 184 XXVI. TRANSCRIPTION COSTS ...................................................:................................... 189 XXVII RECOMMENDATION ............................................................................................... 193

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F. ALJs' Conclusion

Based on the above, the AUs conclude that BRA's application complies with all applicable drought and water conservation planning legal requirements.

XVI. RETURN FLOWS

The BRA Application raises a number of complex issues related to return flows. , It treats return flows491 from any source as' "state water" available for appropriation to the extent that such return flows continue to be discharged or returned to the Brazos 'River or its tributaries.

BRA based its requested appropdation, at least" in part, on the availability of return flows. current and future, from all sources once they are discharged into a watercourse. Under the approach advocated by BRA, the original sources of the return flows would include grOlmdwater, surface water from the Brazos River Basin. and surface water imported from other basins.49l Under BRA's approach. if discharged return flows were treated as state water available for appropriation, the results would be as follows:

• Once discharged, all return flows would be available for appropriation pursuant to Water Code § 11.046(0) for beneficial use by any existing water right holder or future appropriator.

• Once discharged, all return flows would be subject to established rules regardlng'the use and appropriation of state water.

• To the extent retul'll flows make up part of a new appropriation, bO~l ClUTent and future return flows would be subject to environmental flow requirements.

491 . Retmn flows are treated wastewater or unused portions of diversions th~t are discharged into wateroours., ill the state. BRA Bx. 15 at 46. '" BRA Ex. SB at 9; BRA Ex, 15 'at 46,

....... ----~~-~--

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• 111e appropriation of current and future return flows would be pennitted only to tlie . extent they are available as unappropriated water after meeting the needs of all . existing senior water rights.49l . .

111e ED disagrees with the BRA approach and, instead, proposes a different treatment for the appropriation of return flows. Rather than proposing a new appropriation, the ED proposes to give BRA a "bed and banks" permit to transpOlt only those return flows originating from BRA's water rights OJ' from wastewater treatment facilities owned or operated by BRA. Under the ED's approach, BRA would not be entitled to appropriate return flows originating f;om SOllrees other than BRA's water rights or from wastewater treatment facilities owned or operated by BRA:94 Under the ED's approach, use of return flows would be implemented as follows!

.. A Water Code § 11.042(0) bed and banks authorization for indirect reuse could be obtained by the holder of the base water right, the owner or operator of the wastewater treatment facility, 01' a third party with contractual rights from either of them. . • The authorization, while not cOllsidered an appropriation, would be given the priority date of the application insofar as it applies to historically discharged return flows in order to protect existing rights.

• Historically discharged return flows would be subject to environmental flow and beneficial inflow requirements. \ • Discharges in excess of historically discbal'gedamounts would not be subject to call by senior water rights 'and would have no environmental flow requirements. .

o The maximum anthori7.ation would be limited to tbe current TPDES permitted discharge amount. AllY increase in the TPDES pennitted discharge would necessitate an amendment of the' bed and banks pernlit to authorize USe of the increased volume. 495

'" BRA Initial Brlefat 56-57. '" BRA Ex. 15 at 48; ED Ex. K2 at 6-14.

49j BRA points out that nOlle ofthese provisions have been explh::itly adopted by Commission by rule or order. Thus, BRA worries there would he little assurance that Section 1J,042 will necessarily be. implemented in same fashion in the future.

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TIlese competing approaches raise a number of issues, each of which is addressed below.

A. Applicable Law

The disputes regarding the treatment of return flows for the SysOp Permit largely turn on the constmction of Water Code §§ 11.042 and 11.046. Those statutory provisions provide, in relevant part; as follows:

Sec. 11.042. DELIVERING WATER DOWN BANKS AND BEDS. (a) Under rules prescribed by the conuuission, a person ..• may use the bank and bed of any flowing natural stream in the state to' convey the water from the place of storage to the place of use or to the diversion point oflhe appropriator.

(b) A person who wishes to discharge and then subsequently divert and reuse the person's existing return flows derived from privately owned 'grotUldwater must obtain prior authorization from the commission for the diversion and the reuse of these retUrn flows. The authorization may allow for the diversion and reuse by the discharger of existing return flows, less carriage losses, and shall be subject to special conditions if necessary to protect an existing water right that was granted based on the use or availability of these return flows. Special conditions may also be provided to help maintain instream uses and freshwater inflows to bays and estuaries. A person wishing to' divert and reuse future Increases of return flows derived from privately owned groundwater must obtain authorization to reuse increases in retOOl flows before the increase.

(c) Except as otherwise proVided in Subsection (a) of tlus section, a person who wishes to cOllvey and subsequently divert water in a 'watercourse or stream must obtain the prior approval of the cOlmnission through a bed and banks autllOrization. The authorization shall allow to be diverted only the amount of water put into a watercourse or stream, less carriage losses and subject to any special conditions that may address the impact of the discharge, conveyance, and diversion on existing pennitS, ... instream uses, and freshwater inflows to bays and estuaries. Water discharged into a watercourse or stream under this chapter shall not cause a degradation of water quality to the extent that the stream segment's classification would be lowered.

Sec. 11.046. RETURN SURPLUS WATER. (a) A person who takes or divOlis water from a watercourse or stream for the purposes authorized by this code shall conduct surplus water back to the watercourse or stream from which it was takcn SOAH DOCKET NO. 582·10·4184 PROl'OSAL FOR DECISION PAGE 140 TCEQ DOCKET NO. 2005·J490-WR

if the water can be returned by gravity flow and it is reasonably practicable to do so. (b) In granting an application for a water right, the commission may include conditions in the water right providing for the return of surplus water, in a specific amount or percentllge of water diverted, and the return point on a watercourse or stream as necessary to protect senior downstream pennits ... or to provide flows for instream uses or bays and estuaries.

(c) Except as specifically provided otherwise in the water right, water appropriated under a pennit ... may, prior to its release into a watercourse or stream, be beneficially used and reused by the holder of a permit . . . for the purposes and locations of use provided in the permit. . .. Once water has' been diverted truder a pernlit . . . and then returned to a watercourse Or stream, however, it is considered surplus water and therefore subject to reservation for instrerun uses or beneficial inflows or to appropriation by others unless ,expressly provided otherwise in the pennit ....

B. Once discharged, return flows are "state water" and, therefore, available for appropriation by others.

At the hearing, the primary question regarding return flows was: Once return flows are discharged into a watercourse, should they be considered "state water" and, therefore, available for appropriation by anyone, or do they remain the property of (or at least reserved for) the original waler·light holder or disc~arger? BRA describes this issue as possibly "the most significant legal issue presented by this proceeding" with "far.reaching impacts" in the state.4% 'The dispute cenlers on the construction oftwo provision's, Water Code §§ 11.042 and 11.046(0), both amended as part of Senate Bill I in 1997 (SB 1).491 BRA relies primarily upon Section 11.046(c), which states that once water has been diverted and is returned to a watercourse "it is considered surplus and therefore subject (0 ••• appropriation by others." The ED relies primarily upon SeCtion 11.042(0), which states that a person who wishes to "convey and subsequently divert water in a watercourse" must obtain approval of the Commission through a bed and banks permit.

'" BRA Initial Brlefat 51. '97 Act of1997, 75"'R.S., ch. 1010, General and Special Laws of Texas.

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1. BRA's ArguD!ents

In support <If its approach, BRA starts by examining the state of the law regarding retum flows in place. at the time the· legislature passed SB I. BRA argues that TCEQ policy regarding retum flows and reuse prior to passage of SB 1 was clear, and was consistent with the approach now being advocated by BRA. 498 The ED disputes the claim that TCEQ policy prior· to SB 1 was clem' or consistent.499 On this pOint, the evidence in the record appears to support BRA.

That evIdence indicates that, prior to SB I; • return flows discharged into a state watercourse were considered "state water;" • direct reuse (i.e .• reuse of the water prior to discharge) was authorized unless the water right provided otherwise; • indirect reuse (i.e., reuse of the water [ol/olVlng discharge Into a watercourse) requi~ed a new water right; and • bed and banks pemlits were available for developed .water (gro.undwater-based discharges and imported water) that had not been historically discharged. soo

Historically, rehlffi flows served as the basis for water rights recognized in the water rights adjudication process; they were included in the water availability analysis for permitting on a case-by-case basis (e.g., Lake Livingston); they were included in early "legacy" WAMs; and they were specifically recognized in theCOlmnission's RegUlatory Guidance Document as being available for appropriation· and included in thell-current WAMs. sOt

<9' BRA Initial Briefat 52-53. '" ED Reply Brief at 3-4. The ED's oi,Im on this point is undercut by his admission that Ihe tre{lhnent of return flows in water rights appropriation 'lchanged when the TCEQ created its new models as required by Senate Bill l.n . . '" BRA Ex. 58 (lnleroffi~ memo documenting COllunission's De~mber 13, 1996 work session); see also Dome! v. City o/Georgetown,.6 S.W.3d 349, 353-54, 360 (Tcx. App. - Austin 1999. pot. dcnlcd); see also SOllth Texas Wqter Co. v. Bieri, 247 S.W'.2d 268. 272-73 (Tex. Clv. App - Galveston 1952. writ rerd n.r.e.); HUTCIUNS•.

THBTBXAS LAWOP WATER RlGHTS 155 (1961); BRA Ex. 72.

so, BRA Ex. 71 (Sullullary of Hi,torical Treatment ofRetmn Flows); BRA Ex. 56 (Excerpts from TNRCC Regulatory Guidance Document). .

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Against this backdrop, SB I amended Texas Water Code §§ (1.042 and 11.046(c) in .

1997. BRA contends that the SB 1 amendments, with the exception of grolllldwater-based return flows, confirmed rather than revised the then-existing law with respect to the treatment of return flows. so2 B·RA argues that the legislature did not intend to radically change the existing law regarding return flows when, in SB I, it adopted Section 11.042(c), particularly because SB 1 also enacted Section 1 L046(c), which appears to restate existing law regru'ding return flows.

PlioI' to SB I, Section 11.042 simply authorized delivery of stored or conserved water via a bed and banks permit, essentially as reflected by the current· subsection (a). sa J added Subsections (b) and (c). Subsection (b) allows the Commission to authorize bed and banks .pennits for defivery and reUse of groundwater-based return flows, subject to conditions described therein. Subsection (c) allows the Commission to authorize bed and banks permits "for a pcrson who wishes to ·convey and subsequently divert water," also subject to conditions.

BRA points out that Subsection 1I.042(b) specifically addresses "reuso" of "return flows," while Subsection 11.042(c) generically refers to "water" and does not explicitly mention "retw.n flows" or "reuse."S03 As COIISt1'lled by BRA, the reference in Subsection (c) to "water" necessarily implies some ownership interest in the water sought to be transported; such as would be present for "developed water" (imported surface water or raw grolllldwaier not naturally part of the water in the basin) but would not be present in return flows once discharged into a watercourse.'04 TPWD agrees with this interpretation.'o,

,01 BRA I"iti.1 Brief aI53-55. s<>' The ED "lCOrrectly asserts that· Section 11:042(c) "specifically discuss[esl retlse of retum flows." ED Initial Brief at 16 (en'phasis in original). . ~.. BRA Il;itial Brief at 7. 'os. TPWD Initial Briefs! 2. . SOAIl DOCKET NO. 582-10.4184 PROPOSAL FOR DECISION PAGE 143 TCEQ DOCKET NO. 200S·1490-WR

BRA contends that if, as the ED suggests, Subsection 11.042(c) deals with return flows, then Subsection 11.042(b) would be entirely unnecessary because return· flows, whether based on groundwater or surface water, would already be covered by Subsection (c). BRA argues that, becau~e it specifically addresses return flows (and limits its authorization to groundwater-based return flows), the existence of Subsection (b) suggests that Subsection (c) must be addressing a category of water other than return Hows. SV6

As to Section 11.046, SB 1 added Subsections (b), (c), and (d). In BRA's view, the . amendments simply codified existing law regarding return flows. Sigruficantly, Subsection (c) authorizes direct reuse, but then explicitly states that, once the water is returned to the watercourse, "it is considered surplus water and therefore subject to reservation for instrcruri uses or beneficial inflows or to appropriation by olhers. ...,,507 In BRA's vl~w, this means that retum flows are state water, available for appropriation "by others," S9 long as those flows are not otherwise required for senior rights or environmental needs. S03 TPWP and OPIC agree. SfJ9

In BRA's view, the two statutes can only be construed so that no conflict exists between them by defining the word "water" in Section 11.042(c) t.o mean "developed water" (i.e., imported surface water or raw groundwater not naturally part of the water in the basin):SIO BRA· contends that the benefits of its approach include:

• All return flows would be available for appropriation and beneficial use.

,os BRA Initial Briefat 54. '" (Emphasis added.) BRA contends that the final phrase cifthe subsectlon-"mtless expressly provided otherwise in the permit, certified filhig, or cmiilicat. of adjudication"- provides a vehicle for the water right holder to seek reuse !!uthOl:ization by amendment of ~he underlying water dght. 'OB BRA Initial Brlefat 40. so, TPWo Initial Brier at 3; OPIC Initial Brief at 5·6.

SlO TPWD makes the same argument. TPWD Initial Brief at 2.

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• All retlnn flows would be available for satisfaction of environmental flow needs, and the needs of senior water rights, often enhancing the reliability of senior water rights.

By contrast, the ED's approach would generally subject only historically dischargeo return flows to such requirements, while future discharges wonld not be subject to the priority system or environmenW flow requirements.

• The BRA approach is consistent with historical permitting decisions.

• The BRA approach does not result in multiple categories of water with independent accounting requirements, facilitating enforcement under the prior appropriation system.

• Under the BRA approach, all return flows would be subject to well-established requirements applicable to all state water. By contrast, because it is not mandated by statute or deflned by mles, much of the ED's approach Could be modified in the' future if the Executive Director 01' Commission chose to do 80.511

BRA submits that these public policy considerations clearly support treating return flows as state water available for appropriation following their discharge into a watercourse.

2, The ED's Arguments

Under the ED's approach, specific accOlmting provisions would be imposed to require tbat the discharge and diversion ofreturn flows be accounted for separately from other water in the rivei,Sl2 The ED believes that its approach does a better job of describing how return flows will be accounted for In order to prolect water rights. Sl3 In the ED's view, there is a conflict between Sections 11.042 and 11.046,514 that can only be resolved by defining "others" in Sectiqn I 1.046(c) to mean that only the discharger ofretum flows, the owner of the base water right, or someone having contractual rights with either of them can be the ones to apply to reuse the

>II BRA Exs. 77 and 78. m Tr.1975-81.

51l ED Initial Brief at 13. ,,, See, e.g., BRA Ex. 59 (Chenoweth Febmary 25,2005 memo).

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return flows. SlS Dow agrees with this interpretation, because, it considers it to be "more conservative and likely to be mOre protective of existing water rights."SI6

The ED constl11es Subsection 11.042(c) to apply to, among other things, all return flows ~ther than groundwater-based return flows (which are addressed by Subsection 11.042(b».$l7 The ED disagrees with BRA's contention that the word "water" in Subsection 11.042(c) should be construed to mean "developed water." The ED argues that Subsection 11.042(c) is addressing a wider category than Subsection (b) which only addresses "return flows." ThllS, the ED contends that Subsection (c) deals with a broad array of different kinds of water, including return flows. sl8 BRA counters that when Section 11.042(c) is construed as broadly as the ED proposes, it not only creates a significant break from pre.existing law, but it also creates the "conflict" with Section 11.046(c) that results in the ED's strained and otherwise \U\supported limitation of "appropriation by others" to three specific categories of persons not identified in the statute,S19

The ED bases his approach, at least in part, on Conunissioner statements. made at the Commission's August 12, 2005 work session. s2o BRA counters that this Commission work session is a "slender and ambiguous reed" upon which the ED relies. For example, at the conclusion of the work session; the Conlmission directed 'the staff to prepare a memo memorializing its decisions. However, the staff was never able to do so because it could not 'reach COnsensus on what had been decided as to how to implement Sections 11.042 and , 11.046.521

'" BRA Ex. S9 (Chenoweth February 25, 2005 Memo); TPWD Ex. 1 at 35·36 (Chenoweth Deposition); Tr.

2060,2079·80. '" Dow Initial Brief at 47. '" ED Reply Brief at 4. '" ED Reply Bri.fa14·5. '" BRA Initial Brief at 55.

S20 BRA Ex. 66 (Inte.rrogatoiy Nos. 2 & 3). None ofthe current Commissioners was serving at that time. ,,, TPWD Ex. I at 47-48.

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Further, the ED's current position on Section J 1.046 appears to be inconsistent with the Commission's decision regarding con;-tmction of that statute in a prior contested hearing, ironically a position that was adopted ·by the Commission at the urging of the ED. That case involved accounting for inflows and storage in Lake Grapevine among three holders of water rights of different priorities. S22 In response to exceptions filed by the ED and by Dallas County Park Cities Municipal Utility District (DCPCMUD), the Commission ruled that return flows discharged by the City of Grapevine (the most junior water Fight holder) and subject to Grapevine's pending indirect reuse application were properly allocated to the senior water rights first. TIle senior water right holder, DCPCMUD,asserted a prior right to Grapevine's return flows, uns\lpported by any contract or other agreement with Grapevine. In making its decision, the Commission relied upon Section 11.046, holding that upon discharge Grapevine's return flows became state water subject to the prior appropriatiou system.523 Among other things, the ED told the Commission that "lIlf a water right holder uses water, then returns it to the watercourse or stream it is considered unappropriated state water and may be used by others."S24

It is undisputed ·that the COllUnission has never adopted t1l1es or a formal policy authorizing the approach that is now being advocated by the ED.S2l BRA submits that the ED's position, reserving return flows solely for the discharger or water right holder, cannot be justified and shonld not be followed .

.$n An Order granting the Executive Director's Petition to Amend Certificate of Adjudication No. 08 2363 w

of Dallas County Park Cities Municipal Utility District, Certificate of Adjudication No. 08-2458 of City of Dallas, and·Certificate of Adj(,dicatioll No. 08-2362 of City of Grapovine; TNRCC Docket Nos. 95·l626-WRand 96-1017- WR; SOAH Docket Nos. XXX-XX-XXXX and XXX-XX-XXXX (Apr. 4, 2000) . .m Exs. BRA 74, 75, and 76. m BRA Ex. 75 at 5, 515 Tr. 2002,2061-64.

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3. The ALJs' Analysis

The ALJs disagree with both parties' competing lIIlalyses of Sections 11.042(c) and '11.046(c). As noted by TPWD,- the return flows issues raised by the BRA Application are "extremely complex," and involve II great deal of ambiguity about confusing legal and regulatory issues.s26 In its initial brief, TPWD states:

There is no adopted TCEQ'policy that controls the outcome of the application [regarding return flows]. The ED staff is using its own interpretation of existing law to review the application, and it simply has a different approach than TPWD IIIld BRA. Jt is up to the Administrative Law Judges to examine the different approaches and determine how to apply the iaw. There is no commission policy that guides the resolution of these contested issues.

The ALJs agree. A considerable amount of evidence was introduced by the parties attempting to prove that the TCEQ currently has, or has had in the past, an established approach to reuse issues.S27 On balance, however, this evidence demonstrates that no consistent agency policy exists with respect to these reuse issues. As such, there is no official TCEQ interpretation to which the ALJs might def~r. Accordingly, the ALJs make the following conclusions regard how the bed and banks and return flow provisions of the Water Code should properly be applied to the SysOp Permit.

50' TPWD Initial Brief at 9. m See. e,g" Exs. TPWD 1, BRA Exs, 56-58, 61, 67, 70, 72-73,75; ED Exs. AI, CI, DI, EI, FI, and 01; see also Tr. 2005 (Alexander acknowledging, that return flow issues historically handled on ut:ase-by-casc" basis, without a fixed policy), SOAR DOCKET NO. 581-10.4184 PROl'OSAL FOR DECISION PAGE 148 TCEQ DOCKET NO. Z005·1490-WR

a. BRA misconsmles Sl\Ction 11.042(c): The bed and banks authorization contemplated in Section 11.042(0) applics to a wide array of types of water, including return flows.

Section 11.042(c) authorizes a person to obtain a bed and banks authorization to "convey and subsequently divert water in a watercourse."S28 BRA argues that the only way tlus section can be read so as to avoid a conflict with Section 11.046(c) is to interpret the word "water" in Section 11.042(c) to mean developed water, but not return flows. TIlis interpretation is not reasonable and is contrary to the plain wording of the statute. If the Legislature 'had intended for Scction 11.042(c) beq. and banks authorizations to only be available for raw surface water imported from another basin or raw groundwater, then it could easily have so stated in the statute. Ther~ is ample evidence that the Legislature knows how to be specific when it wishes to.

For'example, in Subsection (a-I) the legislature authorized bed and banks permits for a different type of imported water"':"water imported from another state. Similarly, in Subsection (b), the Legislature chose allow beds and banks authorizations for abighly specific category of water - '~el(isting retum flows derived from privately' owned grolllidwater." The use of the broad and generic word "water" in Subsection (c), indicates a legislative intent that the bed and banks authorization contemplated in that subsection should apply to a wide array of various types of water, inc\\I(ling return flows.

b. The ED misconstrucs Section 11.046(c): The right to appropriate retUrn flows pl'ovided by Sedion 11.046(c) does not extend only to the' discharger of·those return flows, the owner of the base water right from which the return flows originated,' 01· someone having contractual rights with either of them.

Section 11.046(c) provides that once water has becn diverted and' is returned to a watercourse "it is considered slUplus and thetefore subject to ... appropriation by others.,,529 The ED argues that the only way Sections 11.042(c) and 11.046(c) can be read so as to avoid a

'" pmphasis addC<!. '" Emphasis added.

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conflict is to interpret the phrase "by others" in Section 11.046(c) to mean that only the discharger of return flows, the owner of the base .water light from which the return flows originated, or someone having contractual rights with either of thein can be the ones to apply to reuse the return flows. Again, this interpretation is not reasonable and is contrary to the plain wording of the statute. Clearly; the legislative intent behind this language was that once a holder . of a water right discharges his return flows back into a watercourse, then third parties (i.e., . "others") could seek to appropriate that returned water. The ED would define the universe of" "others" to inclUde only the discharger, and those related to the original water right. For example, assume City X holds a permit to divert and use Brazos River water. Under the ED's approach, if City X discharges its return flows into the BrQ.Zos River, then the only "other" that would be entitled to seek to appropriate those return flows would be City X. TIllS result is directly contrary to the clear statutory language. Moreover, the ALJs find tllat the ED's interpretation is exactly the opposite of what the statute allows. As discussed further below, because Section 11.046(c) states that discharged retum flows are available for appropriation "by others," the discharger of the retum flows is /lot among those who can seek to appropriate the flows pursuant to Section 11.046(c).

c. Sections 11.042(c) and 11.046(c) are l'econcilable because they address mutually exdusive scenarios.

The ALJs believe that no conflict exists between Sections 11.042(0) and 11.046(0) because the two seotions deal with different subject matters. As noted by TPWD 530 and OPIC,531 Section 11.042(c) does not create an independent right to appropriate water. It merely entitles a perSall to "collvey and subsequently divert" water for which he already 'holds an appropriative right. Slated'diflerently, a bed and banks authorization call only be issued to a person who already has the i'ight to use the water he seeks to convey. On the other hand, and again as noted

'" TPWD Initial Briefat I.

53l OPIC Initial Brief at 7.

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by TPWD 532 and OPIC,S33 Section 11.046(c) deals with an appropriative right. It is well-settled in Texas that water becomes state water once it enters a watercourse. S34 Section 11.046(c) . simply codifies this rule by making it clear that ollce the water has been returned to a watercourse, it call be appropriated.

This means that the determination of which section is applicable to a request to divert return flows depends upon the relationship of the requestor to the return flows being sought.

Based upon the wording of the two statutes, the ALJs conclude.that when BRA seeks to reuse its own surface watei'-based return flows,m it need· olily obtain a bed and banks authOlization pursuant to' Section 11.042(0), and need not obtain an appropriative right pursuant to Section 11.046(c), Notably, Section 11.046(c) expressly states that return flows, once. discharged into a watercourse, become available for appropriation "by others" (i.e., persons other than the discharger). In other words, Section 11.046(c) does not enable a discharger of return flows to obtain a new appropriative right for those discharges. Instead, if a discharger wishes to retain the right to divert its return flows after they have been discharged back into a watercourse, the only mechanism available to the discharger is through Section 11.042(c),536 In such cases, when BRA seeks to reuse its own return flows, it is seeking to "convey and subsequently divert" water for which it already has a diversion right. The parties agree that BRA could, if it so desired, fully utilize its appropriative right through direct reuse. Thus, by seeking to indirectly reuse its water via a bed and banks permit, it is simply seeking to do :vhat it is otherwise entitled to do via direct reUSe.

'" TPWD Initial Brief at 34 .. '" OPIC InitialBriofat 6. ", Wat~r Code § 11.021(0); Edwards Aqu({er Authority v. Day, 274 S. W.3d 742 (Tox. App. - San Antonio 2009, pet. granted). . '" For Ole sake of convenience, throughout thts discussion, the ALIs refer to the "discharger" of the retum flows. However. the AU's broadly define "discharger" as '.'the discharger ()f return flows, the owner of the base water right from which the retnrn flows originated. or someone having contractu~l rights with either of them." '" In effect, the bed and banks authorization grante.t in Section 11.042(c) works as an exception to the general rule in Section 11.0if6(c) tlmt once return flows are discharged into a watercours~ the discharger loses claim to those waters.

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Conversel)', the ALJs conclude that when BRA seeks to divert someone else.'s surface water-based return flows it need only obtain an approp~iative right pursuant to Section 11.046(c), and need not obtain a bea and banks authorization pursuant to Section 11.042(c). In such a case, and consistent with the wording of Section 11.046(c), BRA would clearly be an "other" person seeking to appropriate someone else's relnm flows. Likewise, BRA would not be seeking to "convey," as required by Section 11.042(c), someone else's relnm flows, but only to divert those flows.

The ALJs note a caveat to this general rule. In order to address the needs of in-basin dischargers and many of its own customers, BRA's version of the proposed SysOp Perniit adopts .a relnrn flow policy that encourages direct reuse and indirect reuse of retnrn f1o~vs by dischargers, within their boundaries 01' service areas, by allowing BRA's appropriation of.others' return flows to be interrupted for tliese plUposes. Additionally, as a result of an agreement with the Cities of Bryan and College Station, a provision addressing groundwater-based return flows, without any service area limitation, has also been requested and is included in the BRA preferred draft of the penult. In this respect, BRA's position differs from a pure "state water" approach to return flows that might prevent futnre indirect reuse by dischargers. S37 Because this deviation from the general nll~-that retnrn flows become state viatcr upon discharge into a watercourse- is agreed to by BRA and serves as a limitation upon BRA's permit, the AUs find no reason to reject it.

d. BRA's .. equest to divert "future" j'eturn flows (i.e., return flows that arc not nIt-cady being discharged into the Brazos River Basin) is reasonable and preferable to the approach advocated by the ED. In the Application, BRA seeks to appropriate both ClU'rent and future retum flows, "to'the extent that such retnrn flows continue to be discharged or returned to the bed and banks of the Brazos River, its tribuiarles, and BRA reservoirs."S38 In BRA's ~odeling, futlU'e retnrn flows for

'" BRAEx. I at 30.32; BRA Initial Briefa! 61-62. '" BRAEx.ISatI6.

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the year 2060 were estimated based on projected population multiplied by current per capita retum flows based' 011 historical data'. In certain cases, future tctum flows were reduced to account for existing or proposed reuse projects. S39 BRA then included those estimated future tetum flows in the WAM and assumed they would be available to all water rights in order of seniority. Any amounts left over were assUlIled to be available to the SysOp Pennit, subject to envhonmental flow requirements. 54o

The ED argues that granting BRA an approptiation based upon future retum flows poses a risk of hann to semor water rights holders because the water availability analysis will likely find mOore water available than actually exists in the stream.541 Dow agrees: "If the water availability is inflated because the amount of return flows assunwd to be discharged into the river exceeds the amount that is actually discharged into the river, the water availability analysis will overestimate the unappropriated water.,,5~2

BRA responds that over-appropriation is not a risk because the objective of the draft SysOp Pennit was to ensure that, in actual practice, BRA is able to divert retum flows amy to the extelit that they are actually being discharged into the basin, and to not interfere with the ability of return flow dischargers from reusing their own retum flows if they wish to do so.543 A , munbcr of special pennit conditions are included in the draft permit to achieve those goals, Special condition S.A.1. in the SysOp Pernlit requires development of a return f1owacc01mting plan prior to use of the retum flows, in order to assure that the amount of supply actually available for use based on return flows is accurately detennined. 544 Special condition 5.A.2 provides that BRA's ability to divert surface water-based return flows is subject to intenuptioll

'" BRA Ex. 15 at 46. '" BRA Ex. 15 at 46. $41 ED Ex. KA-l at 18,33-34; ED Initial Briefnt 18, s.u Dow Reply Briefat 39. $I' 'fl'. 423. ".. BRA Ex. 8B at 8; BRA Ex. 15 at 47.

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by direct use or indirect use by the discharger of those return flows, provided that the discharger is using those retum flows within its corporate limits, extraterritorial jurisdiction, or contiguous water cCltificate of convenience and necessity (CCN) boundaries and the discharger has applied , for and been granted authorization to reuse the return flows. This provision is meant to ensure that dischargers will be able to develop their own reuse programs. S4S Similarly, Special Condition S.A.3 provides that BRA's ability to divert groundwater-based return flows is subject to interruption by direct or indirect reuse by the discharger of those reutrn flows, provided that , , the discharger obtains a bed and banks authorization to reuse the return flows. This provision is also meant to ensure that dischargers will be able to develop their OWn reuse programs. 546 Special condition 5.A.4 requires the installation of meters at the discharge points for each wastewater treatment plant (WWTP) from which retunl flows will be used, and the recording of , discharge anlOunts on a daily basis. Discharges from a WWTP generally cannot be used until such meters are installed.547

OPIC has no objection to BRA's approach regarding appropriation of future "retum flows, contending that all diversions of return flows by BRA under the SysOp Permit, regardle~s of whether those diversions are of existing or future return flows, should be treated as new appropriations and, therefore, subject to all legal requirements for new appropriations including Instream flow requirements.548 That Issue will be discussed more in the next section.

As stated above, the ED argnes that granting BRA an appropriation based upon future reUlm flows poses a risk of harm to senior water rights holders because the water availability analysis will likCly find more water available thatl actually exists ill the' stream. gowevcr, the ED's treatment of return flows in the ED's modeling effolis and draft SysOp PerI)1it is not consistent with that approach. Under the ED's approach, BRA would obtain authorization t6 54' BRA Ex. 8B at 8-9;' BRA Ex. 15 at 47. ,,' BRA Ex. liB at 9; BRA Ex. 15 at 41.

147 BRA Ex; SB at 9; BRA Ex. 15 at 41. m OPIC Initial Briefat 5,

2lP SOAHDOCKET NO. 582·10·4184 PROPOSAL FOR DECISION PAGE 154 TCEQ DOCKET NO. 2005·1490·WR

divert return flows up to the amount of return flows that each discharger c,an make pursuant to its Texas Pollution Discharge Elimination System (TPDES) permit. s49 The ED calculated that thc total discharge amount for all applicable TPDES permits was 120,625 acre·feet. sso The ED conceded, however, that actual current discharge totals might be much less than 120,625 acre- feet. SSI In other words, the ED's Proposed Pennit would also autholize BRA to divert future retum flows that do ilOt currently exist in the stream, albeit for a smaller quantity of such return . flows. Moreover, the ED's draft SysOp Permit then e~plicitly allows BRA to appropriate future retum flows (I.e" retum flows over and above the TrDES total of 120,625 acre-feet).552

The AUs conclude that, asslUning the Commissioners agree with the overall two-step approach contemplated in this application, BRA's approach as to future retum flows is sufficiently tailored so as to avoid authorizing diversions of retum flows that are not act\mlly in the river at the time. The special conditions in BRA's draft SysOp Permit are sufficient to ensure that, in actual practic\" BRA will. be authorized to divert only return flows that are actually being discharged, and without interfering with the ability of return flow dischargers to reuse their own retum flows if they wish to do so.

e. BRA's diversions of return flows, both current and future, should be treatcd as new appropriations subject to ~atisfying instream flow ,·equircments.

NWF and bPIC contend ihat all diversions of return flows by BRA under the SysOp Permit, regardless of whether those diversions are of existing or future retum flows, should be

",. IlD Ilx.l<A-J at 30; ED lnitlal13riefat 18, '''' IlD Ilx. K2 at 13; Tr. 2107. ,,, Tr. 2007·08,2107·08. '" ED Ex. K2 at 13-14. Admittedly, the right to use future return flow. is limited by an additional clause mandating that prior to use of such fhture return flows, BRA 'lmust apply for and be granted, the right to reuse those j return flows,l! ED Ex. K2 at 14. In this regard, the ED's draft pern}it is confusing. On the one hand, it grants BRA the right to use future return flows with a 2004 priority date. On the other hand, it states that, before BRA inay use such retum flows/ it must obtain the right to use such retum flows.

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treated as new appropriations and, therefore, subject to all legal requirements for new appropriations, including instream flow reqllirements. SS3 BRA agrees with them.

The ED takes a different approach, As noted above, as to what he considers "current" return flow discharges (i,e., the TPDES total of 120,625 acre-feet), the ED would give BRA the . right to divert those return flows at a 2004 priority date and would make those diversions subject to ulstream flow requirements.>S4 As to what he considerS,"future" return flow'discharges (i.e., those over and above 120,625 acre-feet), the ED would give BRA the right to divelt those return flows at a 2004 priority date, but the diversions would not be subject to instream flow requirements. S55 The rationale behind this different treatment is that fill\lre return flows "have not been present in the river" and, thus, have not been relied upon in the past to satisfy instream needs.5S6

The Conunission need not decide if the ED's position is legally correct. BRA is willing to make all of its diversions of return flows (both cirrrent and future) subject to instrerun flow requirements. 557 BRA asserts, convincingly, that its approach is more protective of the environment because it makes more water subject to instream flov,;s protections.ss8 In light of BRA's consent to such treatment of filture return flows, the ALJs conclude that all BRA diversions of return flows under the SysOp Pennit, both current and future, should pe treated as subject to satisfying instream flow requirements.

'" NWF Reply Briefat 7; opic Initial Briefat 5. '54 ED Ex. K2 at 13; ED Ex. KA-I at 26, 31; Tr. 2108-09. '" ED Ex. K2 at 13-14; ED Ex. KA-I at 26,31; 'fr. 437, 2107. '" ED Ex. KA-I at 31. '" BRA Ex. SB at 8; '" Tr. 2722-23.

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f. Both BRA's and the ED's versions of the SysOp Permit comply with 30 TEx. ADMIN. CODE § 297.42(g) •.

, Pursuant to 30 TEx. ADMIN. CODE § 297.42(g). a water right may be granted based upon the avaibibility ofretwn flows. However, a water right granted upon return flows might cease ill the future because of new or increased direct or indirect reuse by the discharger. Thus, Section 297.42(g) states that a w'ater right granted based 'upon the availability of return flows must "be granted with the express provision that the water available for the water right is dependent upon potentially interruptible return flows'or discharges."

In reliance upon this rule, the ED crafted the draft SysOp Pennit to make a distinction betWeen the quantities of water available under the pennit as "finn" water and as "non-firm" water (with "non-firm" being the water based upon the availability of return flows).559 The ED contends that this is the required approach in ordeno comply with Section 297.42(g).560 BRA's version of the SysOp Permit makes no distinction between "l1ml" and "non-firm". watcr. It does, however, expressly note that diversions of return flows are based upon potentially interruptible return flows. 56 I Thus, both approaches ,comply with therequil'ements Of 30 TAC § 297.42(g).

Accordingly, having proven that its version is compliant, the ALJs conclude that BRA is entitled to its choice of approach over the ED's.

XVII. BED AND BANKS AUTHORIZATION

BRA's application for a bed and banks authorization complies with Water Code § 11.042, which provides, in relevant pal1:

'" ED Ex. KA-l 0123-24.30: ED Ex. K2 at 5·6: Tr. 2009·10. '60 ED Ex. KA-l aI23-24. , SOl BRA Ex. 8B at 8-9.

Exhibit J Transcript Volume No.2 of Hearing conducted October 29, 2009 1 SOAH DOCKET NO. XXX-XX-XXXX 2 TCEQ DOCKET NO. 2008-0181-WR APPLICATION OF BRADLEY B. ) BEFORE THE STATE OFFICE WARE TO AMEND ) OF WATER USE PERMIT NO. 5594 ) ADMINISTRATIVE HEARINGS ADMINISTRATIVE LAW JUDGE: HON. PAUL D. KEEPER ****************************************************** 13 TRANSCRIPT OF PROCEEDINGS 14 TAKEN ON OCTOBER 29, 2009 15 AT AUSTIN, TEXAS 16 VOLUME 2 PAGES 250 - 400 ****************************************************** 21 TRANSCRIPT OF PROCEEDINGS, VOLUME 2, taken in the above-styled and numbered cause on the 29th day of October 2009, from 9:03 a.m. to 3:39 p.m., before C. Mack Lane, CSR, in and for the State of Texas, reported by machine shorthand, at the State Office of Administrative Hearings, 300 West 15th Street, Austin, Travis County, Texas 78201, pursuant to the rules of the Texas Administrative Code, the Texas Water Code, and the Texas Rules of Civil Procedure.

ALAMO CITY REPORTING (210) 719.'189.

M:~:48 1 Lake, that Mr. Ware's 150 acre-feet still must go to 14:47:52 2 satisfy water rights downstream to the Gulf of Mexico 14:47:56 3 and upstream to Lubbock at the playa lakes?

14:47:56 4 A. Yes.

14:48:00 5 Q. Okay. I ask you to look at page 4 of 14 on 14:48:52 6 water availability.

14:48:52 7 JUDGE KEEPER: Which exhibit?

14:48:58 8 MRS. WEBB: 50, Applicant's 50.

14:49:00 9 THE WITNESS: Okay.

14:49:08 10 Q. (BY MRS. WEBB:) And can you read that 14:49:W 11 paragraph that begins a review of water rights in the M:O:U 12 Brazos River Basin?

14:49:16 13 A. "A review of water rights in the Brazos River M:O:W 14 Basin indicates that Permit 4218 (diversion of 172 M:49:M 15 acre-feet of water from South Nolan Creek" M:49:~ 16 Permit 5088 (diversion of 37 acre-feet of water from M:0: 32 17 South Nolan Creek), and Permit 5089 (divetsion of 60 M:0:36 18 acre-feet from South Nolan Creek) were explicitly M:0:38 19 granted based on the presence of return flows now 14:0: 42 20 being claimed as part of this application." 14:49:44 21 Q. Okay. Continue.

14:49:44 22 A. "Staff recognizes the possibility that other M:0:46 23 basin rights were granted based on the presence of the M:O:~ 24 requested return flows. Because of this, a priority M:O:~ 25 date of October 15th, 2004, is assigned to the ALAt10 CITY REPORTING (210) 710-3890 14:49:56 1 applicant's diversions of historically discharged 14:50:00 2 retu rn flows." 14:50:00 3 Q. Okay. Now, that October 15th date, that is 14:50:04 4 the that is the date of administrative completeness 14:50:10 5 of this systems operation permit -- 14:50:16 6 A. Yes.

14:50:16 7 Q. -- by Brazos River Authority?

14:50:16 8 A. Yes.

14:50:20 9 Q. And that sentence regarding the priority date 14:50:22 10 of October 15th, 2004, describes the Executive 14:50:28 11 Director's position at the time this memo was written 14:50:32 regarding the allocation of return flows available for 14:50:36 13 appropriation in the Brazos River Basin?

14:50:40 14 A. Yes.

14:50,49 15 Q. Okay. And so there were return flows 14:50:42 16 available and you gave them a priority date of ~:~:Q 17 October 15th, 2004?

14:50:48 18 A. Yes.

14:51: 10 19 Q. Okay. You mentioned that there were 74,387 M:51:M 20 acre-feet of return flows resulting from different M:51:n 21 discharges up and down the Brazos River Basin M:51:28 22 determined to be available by TCEQ hydrology?

14:51:32 23 A. Yes.

14:51:32 24 Q. And those are the return flows that were 14:51: 34 25 given the October 15th, 2004, priority date?

ALAMO CITY REPORTING (210) 710-3890 14:51:38 1 A. Yes.

14:51:40 2 Q. Okay. And that -- and none of those return 14:51:48 flows, not any portion of them were allocated for use 14:51:52 by Mr. Ware under either a 1997 priority date or any 14:51:56 other priority date?

14:51:58 6 A. The return flows were considered and __ 14:52:02 7 Q. Yes or no, Ms. Alexander.

14:52:82 8 A. No. 14:52:04 9 Q. Okay. Thank you. Okay, When you say that 14:52:38 the Executive Director has at present determined that 14:52:44 water available for diversion by Brazos River M:~:48 12 Authority under this systems operation permit is M:52:~ 13 available at a diversion point on the Gulf, you did M:~:g 14 determine that, didn't you?

14:53:00 15 A. Yes, 14:53:02 16 Q. Under certain circumstances, and under M:~:M 17 certain terms and conditions, and we don't know how 'M:~:06 18 any of that is going to play out; but if that water 14:53:08 19 is - - if that water - - and let me ask you: That water M:~:12 20 that's available, it's not 74,387 acre-feet, is it, 14:53:U 21 that you determined .to be available for diversion by 14:~:~ 22 BRA down at the Gulf?

14:53:30 23 A, Are we talking just about return flows7 I'm M:~:32 24 not sure I understand.

14:53:32 25 Q. I'm talking about the draft permit, ALAND CITY REPORTING (210) 710.3890