The Texas Commission on Environmental Quality's (TCEQ's) proposed rules regarding the Executive Director's suspension or adjustment of water rights during drought or emergency water shortage were published in the Texas Register on November 4, 2011.1 This rulemaking implements House Bill 2694, Section 5.03, 82nd Legislature, 2011, Regular Session. Areas served by a watermaster are exempt from the rules.

These proposed rules define "drought" and "emergency shortage of water," as well as other terms; provide that the Executive Director may issue an order for the temporary suspension or adjustment of junior water rights during a drought or emergency shortage of water; and set out the conditions that must apply. Consistent with the statute, the rules expressly provide that the state's priority doctrine will still govern, but the other factors set out in the bill also may be considered in deciding which water rights should be suspended or adjusted. Notably, the adjustment or suspension must follow the preference of uses in Texas Water Code § 11.024 "to the greatest extent practicable." The proposed rules raise concerns regarding the protection of junior water rights for reasons other than traditional health and safety notions of public welfare. The comment period remains open until December 5, 2011. TCEQ will hold a formal public hearing on December 1, 2011. The anticipated adoption date for the final rule is April 2012.

The commission proposes that a "drought" occurs either when (1) conditions in a watershed or part of a watershed are classified as at least moderate by the National Drought Mitigation Center; (2) streamflows at United States Geological Survey gauging stations are below the 33rd percentile of the period of record; or (3) demand for surface water exceeds the available supply. Note that at present, over 90 percent of the State of Texas is classified as "extreme drought" or worse. TCEQ indicates that its intent is to have a "bright line" test that indicates when a shortage of precipitation has resulted in a shortage of water available for all existing water rights. This definition is based on scientific data, but also includes times of drought that are not as extreme, but are still causing shortages that could adversely impact senior water rights.

"Emergency shortage of water" is defined as the inability of a senior water right to take surface water under circumstances during emergency periods posing a hazard to public health, safety, the environment, or economic welfare. TCEQ intends that this definition include emergency conditions that are not necessarily the result of drought.

During a "drought" or other "emergency shortage of water," the Executive Director can suspend or adjust (e.g., partially curtail or time the diversions) water rights. Caveats in the proposed rule indicate that the Executive Director's action must be "in accordance with the priority doctrine in Texas Water Code § 11.027" and impose the temporary measure "on water rights in the smallest area practicable." But there are additional "conditions for issuance of a Suspension or Adjustment Order" that add ambiguity to what the Executive Director might actually do with respect to the priority doctrine. The Executive Director's order must (1) maximize the beneficial use of water; (2) minimize the impact on water rights holders; (3) prevent the waste of water; (4) consider the efforts of the affected water rights holders to develop and implement water conservation and drought contingency plans; (5) to the greatest extent practicable, conform to the order of preferences established by Texas Water Code § 11.024; and (6) not require the release of lawfully stored water in reservoirs. The highest preference of use established by § 11.024 is for domestic and municipal uses above industrial and agricultural uses.2 In its takings analysis, TCEQ notes that "this consideration of preferences would generally be to allow some water rights, such as municipalities, to continue to take water under their water rights as needed for human health and safety concerns such as drinking water, or similar actions," implying, but nowhere in the rule committing to, a health and safety threshold. Many municipal water systems rely heavily on their revenue streams from water sales and consumption and may attempt to make the most of this regulatory ambiguity. Numerous commenters at TCEQ's August public meeting requested clear implementation of prior appropriation or a system of compensation if senior rights are compromised based on preferred use, neither of which is reflected in the proposed rules.

As for the logistics, an order may be issued by the Executive Director without notice and hearing, but a hearing must be held as soon as practicable before the Commission to affirm, modify, or set aside, with notice to all water rights subject to the Executive Director order. An Executive Director order may not be effective for longer than 180 days "unless otherwise specified in a Suspension or Adjustment Order," meaning there is arguably no limit on the duration of the Executive Director's order under the proposed rules. An order can be extended for 90 days per extension, for any number of extensions, and may be modified to account for changed conditions. The rules do not provide for notice in the event that the Executive Director is asked to modify or extend an order.

According to meteorologists, the present drought is expected to persist for months and many areas of the state are already experiencing conditions worse than the peak years of the drought of record. As many water rights holders already have seen senior calls on various rivers, the final version of these rules is expected to see significant action immediately upon adoption starting in the spring of 2012. In the meantime, clarifications about the duration of conditions to meet the definition of drought, and parameters or specific conditions that might justify a departure from strict prior appropriation are just a sample of the avenues ripe for comment while the opportunity remains open.

Footnotes

1 36 Tex. Reg. 7417, 7463 (Nov. 4, 2011).

2 The order of preference is: (1) domestic and municipal uses; (2) agricultural uses and industrial uses; (3) mining and recovery of minerals; (4) hydroelectric power; (5) navigation; (6) recreation and pleasure; and (7) other beneficial uses. Texas Water Code § 11.024.

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