Court Opinion

ID: 4040688
Source: CourtListenerOpinion
Date Created: 2016-09-28 22:36:25.478692+00
Date Added: 2024-06-11T14:28:36.819739
License: Public Domain

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
                             s.p.webb@webbwebblaw.com
                             Gwendolyn Hill Webb
                             Bar No. 21026300
                             g.hill.webb@webbwebblaw.com
                             Attorneys for Appellant
                             Webb & Webb, Attorneys at Law
                             211 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
s.p.webb@webbwebblaw.com             Office of the Attorney General
Gwendolyn Hill Webb                  P.O. Box 12548-MC066
State Bar No. 21026300               Austin, Texas 78711-2548
g. hill.webb@webbwebblaw.com         Phone: 512-475-4002
Webb & Webb, Attorneys at Law        Fax: 512-320-0911
211 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."
2 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

18 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)
12 (Attached as Exhibit D, Tr. Vol. 1, p. 125 line 1 -126 line 7; Clerk's Record p. 123-124)
13 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)
15 (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,

50 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,

50 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

51 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
                                        712 Southwest Towers
                                        211 East i h Street
                                        Austin, Texas 78701
                                        (512) 472-9990 Telephone
                                        (512) 472-3183 Facsimile

                                                     , bbwebblaw.com
                                                    0.21033800
                                        GWENDOLYN HILL WEBB
                                 g.hill.webb@webbwebblaw.com
                                 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

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                                  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§ AIDl.JJllJID(lftO'&''JI'll®m tOlHIllll,'Il'. N®.
             §'lrllKlf!lA:mI ~A\§A\@ l!!'.ILiYJ1lllllt
    'lHtmll!Jlffi\V®lIJllt (lP'lffilE§Jl!lMlr WDlI'Jl'l[®:ru~,JI]j'' ' ' ,'®mlI!llEl1.(]@'lr§):
                    ,1D®llJml'JY: -..-lJJ)lElljllJ              (fJ1l!fl~

    $.               ll"llll.®lP'®§ID]lJl 1lJ)[ll.&1ll6illl!J§ 'Il'® \W.&Jl.'lEllll, 'lHtlI!litlHl'll' .A\1lJ'Jl'lHl®lffimA\.'Jl.')[®m§:

                     Form TCEQ-10201(revis~d 8/02)
,.
I      ..
. .'

            If   lIJ'ffiID1IillI.It§'.l1.'A\lml 'll'~'ll' WIlDE .A\.G.lElNfIDW NlIA\.W JmIEl(U\IDmm .A\JIDlIlJ11'll'11fIDNI.&JL
                        lIJ'IDF®Jm.NIIA\.'H'JH!IlNi lINI JmIElGA\.1Il!,ID) 'll'® '1l.'IDlllll lmIEl@l ,'§'ll'IEllIlJ
                        ..8\.Nll.JlllN.IIJ)Jilll:IENI'll' lBlJlJlJF®JlJl,llJ] ID®M§11lIDRiIlmlINltG l'IlDr .A\JP'JP'lLlIcDA'lr11®M.
            !D.       11 llllA\WIDJ §1lJlHlNlIlI'll''ll.'llJ]JIJJ 'lrJBJJE) ffil,IElI!llllJIDlll,JEJIJJ lIJ'Jlilllll§ JflIIElJlR.iIlI'WlI'll'lBI.
                      (§:mJ'lrJI®NI§ ~®!D. Jl. 3l JHlllIDlD. Jl. 3l1ID)
            ~§§                          (Yl   y                                                                             JIIlA\.:&IDJ .A\.'ll'
                           • (JIDY I ®lUJffi)
            'll'EH§ _is_lIlJAW ®1F                              J(
                                    (.iIDUBII!'lLE, -=-J!--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\,\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.iClill3li5 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/;,) 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.'lilc>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

                                                                                                         72
t··   ,   '

                    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

                                                                                                             73
,   ,

        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

                                                                                                          74
.~.

  75
              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

                                                                                                       77
                       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

                                                                                                       78
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

                                                                                                  79
                        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

                                                                                                      80
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

                                                                                                      81
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

                                                                                                    82
       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

                                                                                                                                 83
                          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

                                                                                                                 84
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 requelNT'S MonON FoR REIlEAlUNG
  MA1(14,2010                                                                              PAGElS

                                                                                                     90
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, certifieINT'S MOTION 1'01< REHMruNG
 MAY 14, 2010                                                                               PAGE 17

                                                                                                       92
                              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'~UCAJUNG
  lVU.Y 14,2010                                                                            PAGE 19

                                                                                                      94
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

                                                                                                      95
                                       IX.   SUMMARY

       The Commission's April 20, 2010 Order denying Mr, Ware's application to appropriate
150 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

                                                                                                     96
       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
                                            712 Southwest Towers
                                            211 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

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

                                                                                                                      98
              Exhibit C

J nne 7, 2006 Letter from BRA regarding
   Conditions of Withdrawal of Protest
                   Bickerstaff, Heath, Pollan &Caroom, L.L.P.
  816 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
       3
       4 APPLICATION OF BRADLEY B.        )      BEFORE THE STATE OFFICE
         WARE TO AMEND                    )                OF
       5 WATER USE PERMIT NO. 5594        )      ADMINISTRATIVE HEARINGS
       6
       7
       8 ADMINISTRATIVE LAW JUDGE:            HON. PAUL D. KEEPER
       9
      10
      11

,/:
      12   ******************************************************
      13                 TRANSCRIPT OF PROCEEDINGS
      14                 TAKEN ON OCTOBER 28, 2009
      15                         AT AUSTIN, TEXAS
      16                  VOLUME 1        PAGES 1 - 249
      17   ******************************************************
      18
      19
      20
      21     TRANSCRIPT OF PROCEEDINGS, VOLUME I, taken in the
         above-styled and numbered cause on the 28th day of
      22 October, 2009, from 9:01 a.m. to 5:01 p.m., before
         C. Mack Lane, CSR, in and for the State of Texas,
      23 reported by machine shorthand, at State Office of
         Administrative Hearings, 300 West 15th Street, Austin,
      24 Travis County, Texas 78201, pursuant to the rules of
         the Texas Administrative Code, the Texas Water Code,
      25 and the Texas Rules of Civil Procedure.

                         ALArID CITY REPORTING   (210)
                                                                                                19

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,
            4
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
            7
09:24:20    8 the '30s and '40s.
09:24:20                Q.       Okay.     And what is Exhibit-2A -- or page 2A?
             9
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
            15
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
            18
 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
                                                                                                 102
                                                                                         20

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?
            3
09:25:34    4        A.      Yes.
09:25:34    5        Q.      Okay.    Very good.       What are we looking at
09:25:36
            6 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.

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                                                                                  21

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

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                                                                                        22

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
            5   burnt, and this was over a 10-year period, you know.
09:28:26
            6   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
            8 my dad!s    ~eal    was to save the farm because that's what
09:28,36
            9 he loved.
09:28:36
           10                     So water he had slowed down and might
09:28:38
           11   never quit at that time.          Water was the least of his
09:28:42
           12 worries and the sad part about that is that was during
09:28:44
           13   the '70s during the adjudication period whenever I was
09:28:48
           14   still young and didn't know any better and we did big
09:28:52
           15   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
           17   I've tried to straighten that up.
09:29:06
           18       Q.     Has water in fact been used on Ware Farm
09:29:10
           19   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

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                                                                                    23

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
            10   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.

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                                                                                             45

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
              5   and put it on the tires and Brazos River Authority
09:57:22
              6   phoned and says ·We have run into a snag or a problem
09:57:26
              7 with your permit," and I said, "Well, what do you
09:57:30
              8   mean?    I've got a contract.               You know, the pivot is in
09:57:34
              9   the field.     I hired -- I paid the electric company
09:57:38
             10   $15,000 to move electric poles out of my field where
09:57:40
             11   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
             13   of the full size I could go with."                    And they said __
09:57:52
             14 well, TNRCC at that time said that we can't sell water
09:57:56
             15   upriver.     It's kind of a layman's term that I got out
09:58:00
             16   of it.     I never understood the full story I guess I
09:58:04
             17   should say.
09:58:06
             18                       But, anyhow, it turned out there was
09:58:08
             19   about ten       eight or ten different people that had
09:58:12
             20   talked to Brazos River Authority, was lining up
09: 58: 14
             21   contracts, looking at the possibility.                         There was two
09:58:18     22   of us that had actually written contracts buying this
89:58:24
             23   water and I didn't know about the other fellow.                         He's
09:58:26
             24   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

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                                                                                    46

09:58:36
            1 irrigation stuff in the field.              We have spent $75,000
09:58:3B
            2 already.     You know, there's fixing to be a lawsuit
09:58:40
            3 here because you're going to buy that irrigation
09:58:44
            4 equipment.     I can guarantee you that,"                 And they said
09:58:46
            5 "Well, let's see what we can do."
09:58:48
            6                  So they sent their lawyer out of Waco,
09:58:50
            7 which I was very impressed at that time, instead of
09:58:54
            8 just blowing us off.        They went to Austin -- and I
89:58:56
            9   remember this was in '96 when all permits was
09:58:58
           10   suspended at that time.        There was no way you could
09:59:02
           11   get water they said.      They went down there and
09:59:04   12   negotiated several trips.         They kept us informed, me
09:59:06
           13   and the other fellow.
09:59:10
           14                  The lawyer eventually got back with --
09:59:14
           15   the Brazos River Authority lawyer got back with us and
09:59:16
           16 said we've worked out a deal with the state to where
09:59:18
           17 we can get your water and so I got -- and of course
09:59:22
           18 when I applied back then, I applied for permanent
09:59:26
           19   water because I knew this was a 20-year deal.                  I knew
09:59:28
           20   that there's a possibility in the future that we would
09:59:32
           21   always need water and they said 10-year permit is all
09:59:34
           22 you could get.
09:59:36
           23                  So I got that because that's all I could
09:59:38
           24   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

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                                                                                  47

09:59:44
             1   something, you know, and so now we're to that 10-year
09 :59:46
             2   deal.    I know they stressed that you need to make sure
09:59:48
             3   your application gets in a couple of years in advance
09:59:52
             4   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
             6 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.

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                                                                               71

10:47:20
             1 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.
             4
10:47:36             Q.    Well, I don't either.            That's why I was
             5
10:47:38
             6 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.
             11
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
             14
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

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                                                                                    72

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
           5    actual software program, isn't it?
10:49:04
            6       A.   Yes.    There's a WRAP program, which is the
10:49:88
           7    word tran program that actually runs the data set.
10:49:12
            8   The data set is the input deck.             The WRAP program can
10:49:18
            9   be used for different data sets.              We use them as
10:49:22
           10   different basin models and then the specific data set
10:49:28
           11   that was used here is the Brazos data set which is the
10:49:32
           12   input deck.     The input deck or the data set has the
10:49:38
           13   specific water rights in the Brazos Basin, their
10:49:42   14   priority dates, their relation to each other, their
10:49:46
           15   drainage areas, naturalized flows.               The WRAP program
10:49:48
           16   basically orders and runs calculations on that data.
10:49:54
           17       Q.   Okay.     You've been in the Water Availability
10:49:58
           18   Department what?      11 years.         Has the Executive
10:50:04
           19   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
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                                                                                      109

11:50:04
             1 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
              7 been marked as Exhibit-47?
11:50:30      8       A.    This is a copy of my Water Availability
11 :50: 32
              9 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
             12   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
             18 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
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                                                                                110

11: 51: 22
              1 everything, yes, sir.
11:51:24      2       Q.    Right.    This is where the Executive Director
11:51:24
              3 determined through you that there was no water
11:51:30
              4 availab le --
11:51:36      5       A.    Yes.
11:51:36      6       Q.        for Mr. Ware or unappropriated water
11:51:34
              7 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.)
             18
             19
             20
             21
             22
             23
             24
             25

                                   ALAND CITY REPORTING   (210) 710·3890
                                                                                     113
                                                                                       116

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
              3 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
              9 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
             12   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
             15   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
             17   that determines -- that's one of the variables that
13:12:30
             18   determines whether or not the unappropriated water is
13:12:32
             19   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
             22   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
             25   right.       That' 5 the rule, right?

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                                                                                              117

13:12:44      1       A.    Yes.
13:12:44      2       Q.    And so the earlier priority date gives the
13:12:52
              3   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
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                                                                                       118

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
              7 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
             12   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
             15   there's very limited water available.                    We do this in
13:15:10
             16   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
             20   determine they don't want to proceed with the
13: 15: 24
             21   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
                                                                                           116
                                                                               119

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
             3    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.

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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?

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13: 18:24
              1       A.   Yes.
13: 18:24
              2       Q.   SO that meant he was entitled to a priority
13:18:28
              3   date on an extension of July 1st, 1997.                  Isn't that
13:18:32
              4 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
              7 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
             15

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

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13:19:40
             1    that?
13:19:40     2                     MS. HORTON:       I think it's been asked and
13:19:42
             3    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
             6 correct or incorrect.           That's what his job was.
13:19:56      7                    MR. WEBB:      Your Honor, he has certainly
13:19:58
              8 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
             11   definitely adversely affected Mr. Ware's rights.                 We
13:20: 14
             12   need an answer to that in this record.
13:20:16     13                    JUDGE KEEPER:          Okay.    Well, let me tell
13:20:18
             14   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

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13:21:04
              1 whether that comports with the law or otherwise, that
13:21:12
              2   determination will have to be made either through the
13: 21: 14
              3   testimony of another witness or through legal
13:21:18
              4   argument.
13:21:20
              5                   MR. WEBB:       All right.         Can we have this
13:21:22
              6   question, Your Honor?
13:21:24
              7        Q.     (BY MR. WEBB:)      So the truth is, Mr. Thomas,
13:21:28
              8   you don't know why the Executive Director didn't
13:21:30
              9   direct you to use the July 1st, 1997, priority date?
13:21:38
             10   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.

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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
            4   that is you don't know the reason why the director --
13:22:26
            5   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
           11   question -- answer, Your Honor.                 If he knows, fine; if
13:22:38        he doesn't know, fine.
           12
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.

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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
             3   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
             8   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,

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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.
             5
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.

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13:36:44
               1       Q.   Well, if he had made that determination,
13:36:46
               2   wouldn't that radically change his opinion in this
13:36:50
               3   case?
13:36:52
               4 A. I don't believe -- I don't know.                  I don't
13:36:54
               5   believe so.
13:36:56
               6       Q.   Okay.     Let me ask you -- let ask you to
13:37:00
               7   identify -- let me ask you what's been marked                    to
13:37:36
               8   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
              12 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:
         12
              19   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

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13:38:26
              1 this case.
13:38:28      2                   MR. WEBB:        Your Honor, we most certainly
13:38:28
              3 believe that this exhibit is not irrelevant
13:38:32
              4 whatsoever.      At this point we were just asking the
13:38:36
              5 witness to identify the exhibit.                  Our next step is to
13:38:40
              6 offer the exhibit -- or actually, Your Honor, pages 1
13:38:44
              7   through 7 of the exhibit.
13:38:44      8                   We only have supplied the party with a
13:38:48
              9 copy of the entire document because we wanted to
13:38:54
             10   maintain the integrity of it as a certified copy.                    We
13:38:58
             11   actually only one want to offer into the record
13:39:e4
             12   Exhibit-50 up to page 7 of 14 where the Executive
13:39:12
             13   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
             15   time the Brazos River Authority came in and in support
13:39:28
             16   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
             18   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.
             20
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

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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
            6 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
           10   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
           15   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
           18   opportunity to present a written response tomorrow
13:40:46
           19   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

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13:41:02
              1 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
              4 like to proceed, Mr. Webb.
13:41:06
              5                 MR. WEBB:       All right.          Incidentally, for
13:41:08
              6 all assembled, we have attached the copies of the
13:41:10
              7 cases to the brief.
13:41:18
              8                 JUDGE KEEPER:           Mr. Webb, before you go
13:41:20
              9 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
             12   in Exhibit-50 is an interoffice memorandum which
13:41:32
             13   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

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13:42:12     1   using the same Brazos WAM using the same period of
13,42:16
             2   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
             4   water --
13:42:28     5                    And that is what we're talking about,
13:42:30
             6   Your Honor.     We're not talking about appropriated
13:42:34
             7   unused water.     We're actually talking about
8:42:38     8    unappropriated water.         Once you read my brief, you'll
13:42:42
             9   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

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13:43:22
             1 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
             3   use a basin and after 2006 found out some additional
13:43:36
             4 information.    Well, maybe he found out from additional
13:43:40     5 expert witnesses elsewhere.                It doesn't really matter
13:43:42
             6 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

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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

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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
              7 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
             10   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
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                                                                                   142

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
              3   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
              9 that return flows were used in the analysis in this
13:47:42
             10 Water Availability Analysis.
13:47:42     11       Q.   All right.             And that is what you said are
13:47:44
             12   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
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                                                                                      143

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
             11   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
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                                                                                144

13:49:56      1       A.      Yes.   One possible answer is the return flows
13:50:00
              2 from specific plans and the way that the Executive
13:50:02      3   Director has directed us as the hydrologists to
13:50:08
              4 consider that information and to write permits based
13:50:10          on retu rn flows.
             5
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
              8 Director and I'm directed by my supervisors that we
13:50:24
              9 only write permits to authorize return flow to either
13: 50: 28
             10 the original source diverter of that water or to the
13:50:34
             11   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
             17   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
             21   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.
             24
13:51:28     25       A.      "The request to reuse return flows was

                                     ALAMO CITY REPORTING   (210) 710-3890
                                                                                 135
                                                                                   145

13:51:30    1 modeled at the most downstream pOint in the basin to
13:51:32
            2   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
            6   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
            8   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
           11   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
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                                                                               146

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
13 :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
                                                                                   137
                                                                                       147

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
                                                                                        138
                                                                                             148

13:55:20
              1   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
              3   was.
13:55:24      4                         JUDGE KEEPER:             Okay.    Let's take a short
13:55:26
              5   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
              8   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
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                                                                                      149

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
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                                                                             150

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
            4 the Brazos WAM works, additional water anywhere in the
14:05:00
            5 basin is used to assess whether or not a particular
14:05:08
            6 water right would have a negative impact on all of the
14:05:12
            7 water rights, isn't it?
14:05:15
            8         A.   I.'m sorry.       I'm not sure exactly what yo8're
14:05:26
            9 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.
           12
14:05:32
           13         Q.   And so it doesn't matter whether it's above
14:05:34
           14 Mr. Ware, below Mr. Ware, above Stillhouse Hollow
14:05:38   15   Lake, below it?       It would benefit everyone, wouldn't
14:05:40
           16   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
           19   it would benefit everyone in the basin, yes.
14:05:54
           20         Q.   Because after all, even if you're upstream
14:05:58
           21 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
                                                                               141
                                                                                                        151

14:06:14    1          A.     There are situations where it would change
14:06:16
            2   priority calls and benefit everyone in the basin.
14:06:20
            3          Q.     Incidentally, what was the priority date that
14:06:26
            4   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
            7   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
           10   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
                                                                                                             142
                                                                                   152

14:07:46    1   done, Mr. Thomas.
14:08:12    2                              I don't know whether I've asked you this
14:08:14
            3   or not.   You can't think of any reason why Mr. Ware
14:08:18
            4   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
                                                                                    143
                                                                                        153

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
                                                                                         144
                                                                                          154

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
             5 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
                                                                                           145
            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

                                                                                                     147
                                 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
712 Southwest Tower
211 East 7ti) Street                        FOR OFFICE OF PUBLIC ASSISTANCE
Austin, Texa.~ 78701                        via electronic mail:

Bradley B. Ware                             Bridget Bohac, Director
911 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,
816 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
505 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

      ., ..
                                                                                           148
149
 TEXAS COMMISSION ON ENVIRON1Y1ENTAL QUALITY
                                                                 I'HIHlli\Tt;; OI'TEl(AS
                                                                 eOUNW 61"'flllAVI!l
                                                                 II\?IOO( tertijy inal this ~ .1"'6 .00 Mfll!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.

                                                                   .~.     .',:   ',   ..   ~"-
                                                                                                                                 150
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
        20 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.

                                                   2

                                                                                                      151
   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.

                                                                 3

,/.,'
          ..   ~',   ,"   . ..
                           ~     ~
                                                                                                                 152
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.

                                                 4

                                                                                                      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.

                                                   5

                                                        -   ....
                                                                                                       154
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,

                                                  6

                                                                                                     155
       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).

                                                                7

'..
      "
      ,~ ~..                                                                                                          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.

                                                8

                                                                                                      157
       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.

                                                9

                                                    ~ '.   :-   "   .'
                                                                                                       158
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

                                               10

                                                                                                     159
       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.

                                                 [[

                                                                                                      160
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.

                                                12

                                                                                                    161
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.

                                                        13

                                    .• ~.   • ',.o .... ~••
                                                                                                      162
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

                                               14

                                                                                                       163
              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 OivisiSaS 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:
                                                             4

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
 12 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. 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 :\ 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                  ",                      ",."       ':.   ','
                                        ':                                              ";' ,
                                                                                ." .
                                                     "': ,
          .:.     ,

          '. 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 .\ir's Licn
         rt:Corded in Volume 1524, pnge 1i71 of the Bell County Ikcd RccI' 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 linP'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.

                                                                                                        180
,,'
       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

                                                                                                        181
          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.

                                                                                                                             183
[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

                                                                                                                         184
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

                                                                                                                    185
!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

                                                                                                                186
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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

                                                                                                           187
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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-%

                                                                                                                                                                      188
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

                                                                                                                 189
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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

                                                                                                                    190
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

                                                                                                                      191
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.

                                                                                                                      192
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

                                                                                                                    193
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' 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.
                                                                                                                          208
. 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.
      SOAH DOCKET NO. 582·10·4184                  PROPOSAL FOR DECISION                              PAGE 144
      TCEQ DOCKET NO. 200s..149()"WR

             •         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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TCEQ DOCKET NO. 2005·1490·WR

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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TCEQ DOCKET NO. 200S-1490-WR

        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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TCEQ D'OCKET NO. 2005·1490-WR

        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),
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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 addC274 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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TCEQ DOCKET NO. 2005-1490·WR

         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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TCEQ DOCKET NO. 2005-1490-WR

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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TCEQ DOCKET NO. 2005-1490-WR

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
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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.lS4 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.

                                                                                                      2.21
SOAH DOCKET NO. XXX-XX-XXXX                PROPOSAL FOR DECISION                        PAGEJ56
TCEQ DOCKET NO. 2005-149().WR

                           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.
                                                                                                     222
            Exhibit J

Transcript Volume No.2 of Hearing
   conducted October 29, 2009
                                                                250

1                SOAH DOCKET NO. XXX-XX-XXXX
2                TCEQ DOCKET NO. 2008-0181-WR
3
4 APPLICATION OF BRADLEY B. )             BEFORE THE STATE OFFICE
  WARE TO AMEND             )                       OF
5 WATER USE PERMIT NO. 5594 )             ADMINISTRATIVE HEARINGS
6
7
8 ADMINISTRATIVE LAW JUDGE:         HON. PAUL D. KEEPER
 9
10
11
12 ******************************************************
13                TRANSCRIPT OF PROCEEDINGS
14                TAKEN ON OCTOBER 29, 2009
15                      AT AUSTIN, TEXAS
16                VOLUME 2        PAGES 250 - 400
17 ******************************************************
18
19
20
21       TRANSCRIPT OF PROCEEDINGS, VOLUME 2, taken in the
     above-styled and numbered cause on the 29th day of
22   October 2009, from 9:03 a.m. to 3:39 p.m., before
     C. Mack Lane, CSR, in and for the State of Texas,
23   reported by machine shorthand, at the State Office of
     Administrative Hearings, 300 West 15th Street, Austin,
24   Travis County, Texas 78201, pursuant to the rules of
     the Texas Administrative Code, the Texas Water Code,
25   and the Texas Rules of Civil Procedure.

                   ALAMO CITY REPORTING    (210) 719.'189.
                                                                             377

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
                                                                                 224
                                                                              378

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
             12
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
                                                                                225
                                                                                379

14:51:38
            1       A.   Yes.
14:51:40
            2       Q.   Okay.     And that -- and none of those return
14:51:48
            3   flows, not any portion of them were allocated for use
14:51:52
            4   by Mr. Ware under either a 1997 priority date or any
14:51:56
            5   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
           10   the Executive Director has at present determined that
14:52:44
           11   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,

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