TITLE 31.NATURAL RESOURCES AND CONSERVATION

Part 20. EDWARDS AQUIFER AUTHORITY

Chapter 711. GROUNDWATER WITHDRAWAL PERMITS

31 TAC §§711.18, 711.20, 711.22, 711.24, 711.26, 711.28, 711.30, 711.32, 711.34, 711.36, 711.38, 711.40, 711.42, 711.44, 711.46, 711.48

The Edwards Aquifer Authority (the "Authority") adopts new 31 TAC §§711.18, 711.20, 711.22, 711.24, 711.26, 711.28, 711.30, 711.32, 711.34, 711.36, 711.38, 711.40, 711.42, 711.44, 711.46, and 711.48 to be codified at Title 31, TEXAS ADMINISTRATIVE CODE Chapter 711, Subchapter C (the "Chapter 711 Subchapter C rules"), relating to the Authority's implementation of an exempt well program, which is a corollary to the Authority's groundwater withdrawal permitting program. Sections 711.18, 711.22, 711.32, 711.34, 711.46, and 711.48 are adopted with changes to the proposed text as published in the September 29, 2000 issue of the Texas Register (25 TexReg 9868) and are republished herein. Sections 711.20, 711.24, 711.26, 711.28, 711.30, 711.36, 711.38, 711.40, 711.42, and 711.44 are adopted without changes and will not be republished.

The Edwards Aquifer Authority Act, Act of May 30, 1993, 73rd Legislature Regular Session, Chapter 626, 1993 TEXAS GENERAL LAWS 2350, as amended by Act of May 28, 1995, 74th Legislature Regular Session, Chapter 3189, 1995 TEXAS GENERAL LAWS 2505, Act of May 16, 1995, 74th Legislature Regular Session, Chapter 361, 1995 TEXAS GENERAL LAWS 3280, and Act of May 6, 1999, 76th Legislature Regular Session, Chapter 163, 1999 TEXAS GENERAL LAWS 634 (the "Act"), requires the Authority to implement a permitting system whereby "existing users" of groundwater from the Edwards Aquifer and other potential users of aquifer water may apply for and receive initial regular permits or other types of permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. Such withdrawals must be metered. Certain withdrawals, on the other hand, are exempted by the Act from permitting and metering requirements. The Act specifies certain criteria in order to qualify for such "exempt well" status and imposes certain requirements upon exempt wells. The Act requires the Authority to manage and regulate all withdrawal points (i.e. wells) from the Edwards Aquifer, and therefore, the Authority is required to regulate exempt wells even though they are otherwise exempt from permitting and metering requirements. The Chapter 711 Subchapter C rules are intended to effectuate the components of the Act which exempt certain wells from the permitting and metering requirements and impose requirements on such wells.

The Chapter 711 Subchapter C rules are adopted pursuant to the following statutory provisions contained within the Act and other relevant statutory provisions.

Section 1.03(9) of the Act defines "domestic or livestock use." This is the only type of use, as mandated by §1.33 of the Act, for which withdrawals from exempt well may be used.

Section 1.03(11) of the Act defines "industrial use." Section 1.03(12) of the Act defines "irrigation use." These types of uses are not authorized from exempt wells.

Section 1.03(13) of the Act defines "livestock." The Chapter 711 Subchapter C rules incorporate this concept when determining whether a well qualifies as "exempt" from permitting requirements.

Section 1.03(14) of the Act defines "municipal use." The Chapter 711 Subchapter C rules incorporate this concept within the types of uses for which aquifer water may be withdrawn.

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." This section provides the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer. These powers are exercised in the adoption of the Subchapter C rules.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under (Article 1 of the Act), including rule governing procedures of the board and the authority." This section provides broad rulemaking authority to implement the various substantive and procedures programs set forth in the Act related to the Edwards Aquifer, including the exempt well program.

Section 1.11(b) of the Act requires the Authority to "ensure compliance with permitting, metering, and reporting requirements and . . . regulate permits." This section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, requires the Authority to adopt and enforce the Chapter 711 rules.

Section 1.11(h) of the Act provides, among other things, that the Authority is "subject to" the APA. This section essentially provides that the Authority is required to comply with the APA for its rulemaking, even though the Authority is a political subdivision and not a state agency that would generally be subject to APA requirements.

Section 1.14(b) of the Act imposes, subject to certain limitations, an initial aquifer withdrawal "cap" for permitted withdrawals of 450,000 acre-feet per year, until December 31, 2007. The Chapter 711 Subchapter C rules explain that this cap does not apply to exempt wells.

Section 1.14(c) of the Act imposes, subject to certain limitations, an aquifer withdrawal "cap" for permitted withdrawals of 400,000 acre-feet per year, beginning January 1, 2008. The Chapter 711 Subchapter C rules explain that this cap does not apply to exempt wells.

Section 1.15(a) of the Act directs the Authority to manage all withdrawals from the aquifer and manage all withdrawal points from the aquifer as provided by the Act. This section is implemented in part through the Chapter 711 Subchapter C rules.

Section 1.16(c) of the Act provides that an owner of a well from which the water will be used exclusively for domestic use or watering livestock and that is exempt under §1.33 of the Act is not required to file a declaration of historical use. This concept is incorporated into the Subchapter C rules from Chapter 711.

Section 1.17(b) of the Act specifies that use under "interim authorization" may not exceed on an annual basis the historical, maximum, beneficial use of water without waste during any one calendar year as evidenced by the person's declaration of historical use. This concept is incorporated into the Chapter 711 rules.

Section 1.17(c) of the Act specifies that use under "interim authorization" is subject to the Authority's comprehensive management plan and rules. This concept is incorporated into the Chapter 711 rules.

Section 1.17(d) of the Act specifies when use under "interim authorization" ends for a given well. This concept is incorporated into the Chapter 711 rules.

Section 1.29 of the Act outlines the Authority's ability to assess various types of fees to users of the aquifer and others. Certain provisions within this section are relevant to the determination of whether exempt well owners must pay such fees.

Section 1.33 of the Act provides the criteria for exempt wells -- i.e., wells that produce no more than 25,000 gallons of water per day for domestic and livestock use and that are not within or serving a subdivision requiring platting. The section explains that such wells are exempt from metering requirements. However, such wells must be registered with the Authority. These concepts are implemented in Chapter 711, primarily in Subchapter C.

Chapter 36 of the Texas Water Code generally applies to groundwater districts such as the Authority. Section 36.101(a) empowers the Authority to make and enforce rules to provide for conserving, preserving, protecting, and recharging of the groundwater in order to, among other things, prevent waste and carry out the duties provided elsewhere in Chapter 36. This requirement is implemented, in large part, through the Chapter 711 rules.

Chapter 36 of the Texas Water Code generally applies to groundwater districts such as the Authority. Section 36.117 allows districts such as the Authority to exempt certain wells from permitting requirements based on criteria similar to §1.33 of the Act.

Chapter 36 of the Texas Water Code generally applies to groundwater districts such as the Authority. Section 36.119(a) decrees that drilling a well without a required permit or operating a well at a higher rate of production than the rate approved for the well is declared to be illegal, wasteful per se, and a nuisance. This concept is incorporated into the Chapter 711 rules.

Chapter 49 of the Texas Water Code generally applies to groundwater districts such as the Authority. Section 49.211(a) endows districts such as the Authority with the "functions, powers, authority, rights, and duties that will permit accomplishment of the purposes for which it was created or the purposes authorized by the constitution, this code, or any other law." This broad delegation of powers is incorporated into the Chapter 711 rules.

The Act specifies that certain wells are exempt from metering and permitting requirements unless they are within or serving a subdivision required to be platted. Thus, it is necessary in Subchapter C of the Chapter 711 rules to apply platting and subdivision concepts found in Chapter 212 and 232 of the Texas Local Government Code. Section 212.004 defines when a municipality may require a subdivision of land to be platted. Section 212.0046 provides municipalities an exception from the platting requirements for certain land abutting an aircraft runway. Section 212.013 provides a mechanism for the vacating of a plat. Section 232.001 defines when a county may require a subdivision of land to be platted. Section 232.0015 provides counties numerous exceptions from the platting requirement. Section 232.008 provides a mechanism for the cancellation of a subdivision. The concepts in these sections are incorporated into the Subchapter C rules.

The Subchapter C Rules

Sections 711.18-711.48, the Chapter 711 Subchapter C rules, set forth the criteria under which a well qualifies as being exempt from the Authority's permitting requirements, the effect of qualifying as an exempt well, and the requirements applicable to exempt wells.

Section 711.18 sets forth the definitions that will apply to all rules within Subchapter C of Chapter 711. These rules have been written to provide uniform definitions for words and phrases that are expected to be used consistently in relation to exempt wells. They are intended to provide useful "short-hand" to reduce the amount of cumbersome regulatory language necessary in other Authority rules, thus allowing for a more efficient understanding and operation of other rules of the Authority.

Pursuant to §1.33 of the Act, the determination of whether or not a well qualifies as exempt turns in part upon whether or not the well is "within or serving a subdivision requiring platting." The Act provides no guidance in its text as to what "within or serving a subdivision requiring platting" means. A substantial body of law exists, however, in other contexts which relates to the requirement to plat certain subdivisions of land. Chapters 212 and 232 of the Texas Local Government Code contain extensive laws relating to when a municipality or county, respectively, may require a subdivision of land to be platted. The Authority is not charged, generally, with zoning, development and related land use planning responsibilities. Further, the Authority is not directed by the Act, nor does the Authority intend, to actually require the platting of subdivisions. Instead, these responsibilities lie with cities and counties. Thus, instead of attempting to create its own rules relating to platting, the Authority has determined that it is reasonable to simply incorporate and adopt, with some minor adjustments necessary and appropriate for the Authority's exempt well program, the platting requirements applicable to cities and counties.

The definitions in §711.18 have been designed to implement and clarify the legal concepts which are found in chapters 212 and 232 of the Texas Local Government Code regarding when a subdivision of land must be platted. The law governing the platting of subdivisions, as contained in Chapter 212 and 232, is at times confusing. Further, the power of municipalities to require platting differs from the power counties have to require platting. The Authority's rules are intended, for the most part, to track these differences.

In §711.18 as originally proposed, the Authority included definitions of "dedication," "public use," and "use of purchasers or owners." Each of those words or phrases is used in §§212.004 and 232.001 of the Texas Local Government Code. The Authority has determined, however, that it is not necessary to separately define each of these words or phrases. Instead, the Authority believes it would be more prudent to simply use those words and phrases in a manner consistent with their usage in §§212.004 and 232.001 of the Texas Local Government Code. Thus, the Authority has withdrawn each of these definitions from consideration for adoption at this time. This deletion has necessitated the renumbering of the remaining definitions found within §711.18.

Sections 212.004 and 232.001 of the Texas Local Government Code generally impose platting requirements when land is "divided" or a "division" of land occurs. These sections then go on to explain what constitutes a "division." Thus, §711.18 includes a definition of "divide or division" which tracks the statutory language found in the Texas Local Government Code. The wording of the definition, as adopted, has been slightly revised from the wording as proposed in order to more closely track §§212.004 and 232.001.

Sections 212.004 and 232.001 of the Texas Local Government Code describe the required contents of a "plat." The Authority believes it is beneficial to include within §711.18 a definition of "plat" which clarifies the term which is used throughout the Subchapter C rules. The source of this definition is Elgin Bank v. Travis County , 906 S.W.2d 120, 121 n. 1 (Tex. App. - Austin 1995, writ denied).

Section 711.18 includes a definition of the phrase "subdivision of land" which tracks the usage of that phrase in §§212.004(a) and 232.001(a) of the Texas Local Government Code

Section 711.18 includes a definition of the phrase "tract of land." It is the act of dividing a tract of land which triggers the possibility that a plat may be required. The Authority believes it is appropriate and helpful to include a definition which clarifies that the size of the land is immaterial to whether it will be considered a "tract of land."

Section 711.20 sets forth the criteria under which a well qualifies for exempt well status. Such a well must: (1) be incapable of producing more than 25,000 gallons per day; (2) be used solely for domestic or livestock use; and (3) not be within or serving a subdivision requiring platting. These requirements derive directly from §1.33 of the Act. The Authority believes that, in order to be eligible to be an exempt well, a well must, among other things, be "used solely for domestic or livestock use." Under §1.33 of the Act, a well that produces 25,000 gallons of water per day or less for domestic or livestock use is generally exempt from the permitting requirement. All other types of withdrawals must be permitted pursuant to §1.15(b) of the Act. Further, §1.16(c) provides that the owner of a well used "exclusively" for domestic and livestock use is not required to apply for a permit. Thus, the Authority believes it lacks the discretion to allow withdrawals for non-exempt uses from an exempt well.

Similarly, the Authority has determined that a well must be physically incapable of producing more than 25,000 gallons per day in order to be considered exempt. Section 1.33(a) of the Act states that, in order to be exempt, the well must produce "25,000 gallons of water a day or less." Section 1.33(a) then exempts such wells from the metering requirement. If exempt wells are exempt from having meters installed on them, then the Authority has no reliable method to accurately and independently determine the quantity of water pumped from the well (i.e. to confirm whether the well actually complies with the 25,000 gallon per day requirement). In the absence of such an ability, the Authority must simply require that the wells be incapable of producing more than that amount. Such a requirement ensures that the dictates of §1.33(a) of the Act are met. Further, the administrative convenience of the Authority is enhanced by requiring that exempt wells be physically incapable of producing more than 25,000 gallons. In the absence of such a rule, the Authority would apparently bear the Herculean task of constantly inspecting each exempt well to ensure that it is not used to pump more than 25,000 gallons on any given day.

Section 711.22 sets forth the effect of qualifying for exempt well status by explaining which portions of the Act and the Authority's rules apply and do not apply to owners of exempt wells. Subsection (a) provides that all provisions of the Act and the Authority's rules apply to owners of exempt wells, except for those exclusions provided for in subsection (b). Pursuant to subsection (b)(1), owners of exempt wells are exempted from the Authority's metering rules which will be found in subchapter M of Chapter 711. This is consistent with §1.33(a) of the Act which exempts exempt wells "from metering requirements."

Pursuant to subsection (b)(2), owners of exempt wells are exempted from the requirement found in the Authority's rule 711.12(a)(1) to obtain a permit before withdrawing Edwards Aquifer water. This is consistent with §1.15(b) of the Act, which provides that all a person may not withdraw water from the aquifer without obtaining a permit unless that person's well is exempt. As originally proposed, subsection (b)(2) also exempted exempt well owners from §711.12(a)(3), (5), (6) and (7). The Authority has deleted these exemptions from the rule as adopted because the exemptions were erroneous, nonsensical, and inadvertently included in the rule as proposed. Section 711.12(a)(3) requires a permit for the construction of a monitoring well. Section 711.12(5) requires a permit for wells withdrawing water from an aquifer other than the Edwards but which intersect the Edwards Aquifer. Section 711.12(6) requires a permit to recharge water into the aquifer. Section 711.12(7) requires a permit to store water in the aquifer. Each of these activities is unrelated to the operation of an exempt well.

Pursuant to §711.22(b)(3), owners of exempt wells are exempted from the requirement found in the Authority's rule 711.311 to file a declaration of historical use. This is consistent with §1.16(c) which excludes exempt well owners from having to file such a declaration.

Pursuant to §711.22(b)(4), owners of exempt wells are exempted from subchapters D and E of the Authority's Chapter 709 aquifer management fee rules. The Authority has determined that it is administratively unfeasible to assess aquifer management fees or permit retirement special fees against exempt wells. Sections 1.29(b) and (e) of the Act empower the Authority to assess aquifer management fees. Under §1.29(e), those fees must be based on either the "volume of water withdrawn" or the "amount of water a permit holder is authorized to withdraw under the permit." Owners of exempt wells hold no permit and, therefore, have no authorized withdrawal amount specified in a permit. Further, exempt wells are, pursuant to §1.33 of the Act, unmetered. Thus, it is impossible to accurately determine the volume of water actually withdrawn and assess fees on that amount. Similarly, pursuant to §1.29(c), permit retirement special fees must be "based on permitted aquifer water rights." Because exempt wells do not operate under a permit, they have no permitted rights upon which to base a fee.

Section 711.22(b)(4), as originally proposed, also exempted exempt well owners from the requirement to pay the $25 fee for an application to construct an exempt well found in Subchapter C of the Authority's Chapter 709 rules. The Authority has deleted this provision in the rule as adopted because it is inconsistent with the intent of the Authority and with other rules adopted by the Authority. It is the Authority's intent that any person wishing to construct a new exempt well must first obtain a well construction permit from the Authority. This is made clear in §711.22(b)(2) which does not excuse an exempt well owner from the construction permit requirement found in §711.12(a)(2). It is also the intent of the Authority that the permit fee be paid before any such construction permit may be issued. This intent is clear in Subchapter C of the Chapter 709 rules which were recently adopted by the Authority as final rules.

Finally, §711.22(c) generally prohibits an owner of an exempt well from obtaining a groundwater withdrawal permit for the well or obtaining interim authorization status for the well. This is consistent with §711.46, which prohibits "dual status wells." Section 711.22(c) has been slightly revised to add the word "will" in order to correct a typographical error in the rule as proposed. The rule as adopted, showing the inserted language in italics, now reads as follows:

(c) Unless the well status is converted pursuant to §711.48 of this chapter (relating to Conversion of Well Status), the owner of an exempt well may not obtain a groundwater withdrawal permit for the well, nor will the well qualify for interim authorization status.

Section 711.24 explains that exempt well withdrawals are not to be counted against the 450,000 and 400,000 acre-feet withdrawal "caps" set forth in §1.14(b) and (c) of the Act. This is because §1.14(b) and (c) of the Act specifically state that the caps apply to "permitted withdrawals." By definition, exempt wells are exempt from permitting requirements and are, therefore, not permitted withdrawals.

Section 711.26 dictates that owners of exempt wells must register those wells with the Authority. This is consistent with §1.33(b) of the Act which provides that exempt wells must be registered.

Section 711.28 requires that any person proposing to construct an exempt well after the effective date of the Chapter 711 Subchapter C rules must first obtain from the Authority a well construction permit (pursuant to Authority rule 707.305) and a determination that the well qualifies for exempt status (pursuant to Authority rule 707.308). Section 1.15(a) and (b) of the Act require the Authority to manage and regulate all withdrawal points from the aquifer, and to require permits for the construction of aquifer wells. The Authority cannot manage and regulate wells if it does not know of their existence. Further, it must have a mechanism in place to confirm whether any given new well meets the exempt well criteria. This rule furthers these objectives and requirements.

Section 711.30 provides that aquifer water withdrawn from an exempt well may be beneficially used only for domestic or livestock use. The Authority believes that, in order to be eligible to be an exempt well, a well must, among other things, be used solely for domestic or livestock use. Under §1.33 of the Act, a well that produces 25,000 gallons of water per day or less for domestic or livestock use is generally exempt from the permitting requirement. All other types of withdrawals must be permitted pursuant to §1.15(b) of the Act. Further, §1.16(c) provides than the owner of a well used "exclusively" for domestic and livestock use is not required to apply for a permit. Thus, the Authority believes it lacks the discretion to allow withdrawals for non-exempt uses from an exempt well.

Section 711.32 provides that exempt wells must be drilled, constructed or equipped so that they are incapable of producing more than 25,000 gallons per day. The Authority believes that a well must be physically incapable of producing more than 25,000 gallons per day in order to be considered exempt. Section 1.33(a) of the Act states that, in order to be exempt, the well must produce "25,000 gallons of water a day or less." Section 1.33(a) then exempts such wells from the metering requirement. If exempt wells are exempt from having meters installed on them, then the Authority has no reliable method to accurately and independently determine the quantity of water pumped from the well (i.e. to confirm whether the well actually complies with the 25,000 gallon per day requirement). In the absence of such an ability, the Authority must simply require that the wells be incapable of producing more than that amount. Such a requirement ensures that the dictates of §1.33(a) of the Act are met. Further, the administrative convenience of the Authority is enhanced by requiring that exempt wells be physically incapable of producing more than 25,000 gallons. In the absence of such a rule, the Authority would apparently bear the Herculean task of constantly inspecting each exempt well to ensure that it is not used to pump more than 25,000 gallons on any given day. As explained more fully in response to public comments, below, the text of §711.32 has been modified slightly.

Section 711.34 sets out the criteria for determining whether a subdivision of land is required to be platted. Under the terms of the Act, the determination of whether or not a well qualifies as exempt turns in part upon whether or not the well is "within or serving a subdivision requiring platting." The Authority must determine whether platting is required in order to determine whether a given well is eligible to be considered an exempt well. By adopting the rule, the Authority will not itself "require platting of subdivisions in the Edwards Aquifer region." Instead, the rule simply adopts, with certain qualifications discussed more fully above, the criteria set forth in Chapters 212 and 232 in order to determine whether a given well is within or serving a subdivision requiring platting. If it is not, then the well may be exempt if it meets the other criteria. If it is, then the well cannot be exempt.

The Authority believes that a standardized definition of when a subdivision is classified as requiring platting, which is based upon existing principles found in the Texas Local Government Code, should be applied throughout the Edwards Aquifer region. As stated above, the Authority's rules closely track Chapters 212 (relating to platting requirements by municipalities) and 232 (relating to platting requirements by counties) of the Texas Local Government Code. Those chapters set out the general standards and exemptions from the platting requirement which apply statewide. It is those general standards and exemptions which the Authority has incorporated into its exempt well rules.

The Authority acknowledges that Chapters 212 and 232 also include provisions which give municipalities and counties the discretion to deviate from those statewide platting requirements on a case-by-case basis. See TEXAS LOCAL GOVERNMENT CODE, §§212.0045(a) and 232.0015(a). The Authority's rules do not incorporate this concept. In practice, the discretion given to counties and cities in determining platting requirements can lead to wide deviations regarding whether a particular subdivision of land is considered to require platting. For example, a subdivision of land in San Antonio might be required by the City to be platted, while a subdivision of land under identical circumstances in Hondo might not be required by that City to be platted. Similarly, a subdivision of land in Hays County might be required to be platted while a subdivision of land under identical circumstances in Bexar County might not be required to be platted. Because the Local Government Code allows each city and county the discretion to deviate from the statewide standards, there is very little predictability as to whether any given subdivision is required to be platted.

The Authority believes it is preferable and necessary to adopt the statewide standards in order to have a cogent and consistent exempt well program. The Authority cannot fairly and consistently implement its exempt well program if the "subdivision requiring platting" requirement varies from city to city and county to county within its jurisdiction. It is unfair and unreasonable, for example, to grant a well owner in Comal County exempt well status simply because that well owner lives in a county which might decide to deviate from the statewide standards, while denying exempt well status to a well owner in Uvalde County whose land was subdivided under identical circumstances and whose county decided not to deviate from the statewide standards. Further, such a scheme would be administratively unworkable from the Authority's standpoint. Authority staff cannot and should not be expected to be intimately knowledgeable about the minutia of the platting rules of each city and county within its jurisdiction. For these reasons, the Authority believes it is prudent, reasonable, and consistent with the legislative intent behind §1.33 of the Act that the exempt well rules utilize the standard statewide criteria found in the Texas Local Government Code in determining whether a subdivision is classified as requiring platting.

Consistent with the definitions found in §711.18 and consistent with the approach taken in Chapters 212 and 232, §711.34 generally dictates that, unless a specific, listed exemption applies, a subdivision of land is classified as requiring platting. As explained in response to public comments, the wording of this section has been modified slightly to clarify that the Authority is merely determining whether a subdivision of land is classified as requiring platting; it is not actually requiring platting.

The section then goes on to list a number of exemptions to the platting requirement. The exemptions set forth in subsection (b)(1) through (b)(10) all derive directly from §232.0015(c), (e), (f), (g), (h), (i), (j), (k) and §§212.004, 212.0046 of the Texas Local Government Code and require no further elaboration.

The exemption in section 711.34(b)(11) is the only one which is not derived from the Texas Local Government Code. As originally proposed, it provided that a subdivision of land will be considered exempt from the platting requirement if: (A) the subdivision occurred prior to June 28, 1996; and (B) at the time when a decision is made on whether the well in question is eligible for exempt well status, the subdivision within which the well is located does not have retail service and is not scheduled to receive retail water service within one year from the date on which the application for exempt well status was filed.

Upon reconsideration, the Authority has decided to modify this rule so that it now provides that a subdivision of land will be considered exempt from the platting requirement if: (A) the subdivision occurred prior to the effective date of the Chapter 711 subchapter C rules ; and (B) at the time when a decision is made on whether the well in question is eligible for exempt well status, the subdivision within which the well is located does not have retail service and is not scheduled to receive retail water service within one year from the date on which the application for exempt well status was filed. The (b)(11) exemption, as originally proposed, applied only to subdivisions platted prior to the effective date of the Act. The Authority determined that, for the purposes of this exemption, there was no reason to treat subdivisions that were platted following the effective date of the Act but prior to the effective date of these rules different from subdivisions that were platted prior to the effective date of the Act.

In establishing this exemption, the Authority has looked to the purposes of section 1.33 of the Act, which states that "a well within or serving a subdivision requiring platting does not qualify for an exempt use." The Authority believes that the purpose of this condition is essentially three-fold. First, it is meant to encourage owners of lots in the Edwards Aquifer regions who are domestic water users to connect to regional water suppliers or to an organized purveyor of water service. Second, it is meant to discourage the creation and propagation of colonias , or subdivisions with substandard or non-existent water and other infrastructure and services. Third, it is meant to mitigate against the proliferation and drilling of a large number wells serving single residences into the Edwards Aquifer, possibly creating hundreds or thousands of additional wells that are not permitted and which would be managed under a much lower and more lenient set of regulations.

Under (b)(11)(A), the (b)(11) exemption applies only to wells in areas that were subdivided prior to the effective date of the this subchapter. The EAA has established this exemption because of the almost complete impracticability of requiring a well owner seeking exempt well status, or Authority staff in verifying and determining such a claim, to effectively research and determine the status of past platting requirements in specific locations. Also, the EAA declines to seek to apply the EAA platting criteria set forth in paragraphs (b)(1) through (10), to subdivisions that were platted prior to the effective date of these rules.

Moreover, the Authority believes that the additional condition for this exemption set forth in (b)(11)(B) serves the functional equivalent of actually determining whether the subdivision required platting under local law at the relevant time and, in doing so, serves the purposes of §1.33 of the Act noted above. That condition - that the subdivision in which the well is located does not have retail water service and is not scheduled to receive retail water service within one year - serves to advance the interests of §1.33 of the Act noted above, without imposing the impractical and untenable requirement that a well owner (and Authority staff) determine the exact nature of past platting requirements in the location that the well and the subdivision in question are located.

In addition, the wording of the (b)(11) exemption has been revised slightly in order to clarify it and make clear that the well must satisfy both conditions of (B) - (i) and (ii) - rather than meeting only one of the two conditions.

Section 711.36 explains that a well is within a subdivision requiring platting if it is located within a tract of land that is required to be platted pursuant to §711.34. This rule merely carries out the requirements of §1.33(c) of the Act.

Section 711.38 explains the criteria under which a well will be considered to serve a subdivision requiring platting. This rule merely carries out the requirements of §1.33(c) of the Act, which states that a well "within or serving a subdivision requiring platting does not qualify for an exempt use." The Act does not define the phrase "serving a subdivision requiring platting." Thus, this rule attempts to give meaning to this phrase. It loosely follows language found in §36.117 of the Texas Water Code, which also relates to the criteria for exempt wells under that chapter.

Section 711.40 explains the criteria under which an exempt well in existence on the effective date of these rules can retain its exempt status if it is subsequently encompassed within a subdivision requiring platting. Such a well must not serve the subdivision requiring platting and must otherwise continue to meet the exempt well criteria. However, such a well may not retain its exempt status if it was drilled within one year prior to the platting of the subdivision of land, or if it is a well from which no withdrawals have been made prior to the time the subdivision is platted. These provisions are intended to prevent wells owners from avoiding the Act's permitting requirements by drilling exempt wells in anticipation of a subsequent subdivision requiring platting, and to prevent the needless designation of an exempt well for a well which has never actually been used.

Section 711.42 provides that a well located within or serving a subdivision requiring platting (and is therefore non-exempt) may subsequently qualify as exempt if the subdivision requiring platting is lawfully vacated or canceled. Section 232.008 of the Texas Local Government Code allows for the cancellation of a subdivision. If a subdivision is cancelled, then it is possible that a well within the former subdivision would no longer be considered to be "within or serving a subdivision requiring platting." In such a case, it could then potentially qualify as an exempt well pursuant to the criteria set forth in §1.33 of the Act. This rule is intended to account for such a possibility.

Section 711.44 provides the criteria under which an exempt well may lose its exempt status and requires the owner of such a well to provide notice to the Authority within 30 days of any occurrence causing the well to lose its exempt status. Exempt well status will be lost if: (1) withdrawals from the well are used for non-exempt purposes; (2) the well is modified so that it is capable of producing more than 25,000 gallons of water per day; or (3) the well subsequently begins to serve a subdivision requiring platting. The bases for these criteria are explained above.

Section 711.46 provides that a well may be either an exempt well or a well for which a permit is required, but not both simultaneously. In other words, so-called "dual status wells" are prohibited. As explained above, the Authority has concluded that exempt wells must be used exclusively for withdrawals for exempt purposes. Therefore, exempt wells and permitted wells constitute two, mutually exclusive classes of wells. As originally proposed, the title of §711.46 was "Dual Status Wells." Given the substance of the rule, the Authority believes the title should be revised to clarify its intent. Accordingly, the title of the rule as adopted is "Dual Status Wells Prohibited." Further, as originally proposed, the section had an initial subsection and then subsections (a) and (b). The Authority believes it would be preferable to reorganize the section by designating the initial subsection as (a) and re-lettering the subsequent subsections as (b) and (c). The rule, as adopted, incorporates these changes. Subsection (b) of §711.46 provides that if the irrigation and exempt withdrawals are separately metered, then withdrawals for an exempt use may be made from a non-exempt (i.e. permitted) irrigation well. The text of this section has been slightly revised to reference the Authority's applicable metering rule which explains how the separate meters should be installed. The rationale for this subsection of the rule is that many irrigators use de minimis amounts of water from their permitted irrigation wells for exempt well uses, such as for the filling of livestock watering troughs. Finally, subsection (c) provides that withdrawals for uses requiring a permit may not be made from an exempt well. The rationale for this provision is that, as explained above, the Authority has concluded that exempt wells must be used exclusively for exempt purposes.

Section 711.48 provides that the owner of a well for which a permit is required may apply to the Authority to convert it to an exempt well if the well otherwise meets the exempt well criteria. Likewise, the owner of an exempt well may apply to the Authority to convert it to a non-exempt well if the owner obtains the transfer of interim authorization or permit rights which would justify operation of the well on a permitted basis. The wording of the rule has been modified slightly to clarify that if an exempt well is converted to a permitted well, all withdrawals for exempt purposes must cease from that well, except as otherwise provided by §711.46. The Authority believes there is no reason why the status of a well could not change so long as the criteria for either exempt or permitted status can be complied with.

Section 2001.0225 of the Texas Government Code requires an agency to perform, under certain circumstances, a regulatory analysis of major environmental rules ("RIAMER"). There are two primary components that must be met before a RIAMER is required. First, no RIAMER need be prepared if the rules in question are not "major environmental rules" or "MERs." Second, even if the rules are MERs, no RIAMER need be prepared if adoption of the MERs would not result in any one of the following criteria listed in §2001.0225(a)(1)-(4):

1. the MER would "exceed" a standard set by federal law, unless the MER is specifically required by state law;

2. the MER would "exceed" an express requirement of state law, unless the MER is specifically required by federal law;

3. the MER would "exceed" a requirement of a delegation agreement or contract between the state and an agency or representative of the federal governmental to implement a state and federal program; or

4. the MER is adopted solely under the "general powers" of the agency instead of under a specific state law.

The Chapter 711 Subchapter C rules essentially set forth: the criteria under which a well would qualify as being exempt from the Authority's permitting requirements, the effect of qualifying as an exempt well, and the requirements applicable to exempt wells. The Subchapter C rules limit the legal authority to withdraw groundwater from the aquifer based on quantity of withdrawals, well location, and purpose of use of the well. This limitation did not exist under the common law. These withdrawal limitations would tend to have an environmental protection aspect. Therefore, the Subchapter C rules probably have, among other things, the specific intent to "protect the environment" and might qualify as MERs.

However, without determining whether the Subchapter C rules are MERs, the Authority has concluded that no RIAMER need be prepared for any of the Subchapter C rules because none of the rules meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the rules do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA for portions of the Edwards Aquifer, which applies only to federally-funded projects conducted on the aquifer. There is no federal law that specifically requires permitting for withdrawals of Edwards Aquifer groundwater or exemptions from such permitting requirements. Therefore, the Subchapter C rules do not exceed a standard set by federal law. Moreover, even if the rules did exceed a standard set by federal law, the rules are specifically required by state law which requires the Authority to manage withdrawals from the aquifer, adopt rules to carry out its powers and duties under the Act, manage withdrawals and points of withdrawals from the aquifer and require permits for certain withdrawals while exempting other withdrawals from permitting requirements (pursuant to, inter alia , §§1.03(9), (11), (12), (13) and (14), 1.08(a), 1.11(a), (b) and (h), 1.14(b) and (c), 1.15(a) and (b), 1.16(c), 1.17, and 1.33(a) and (c) of the Act.

Second, the Subchapter C rules do not exceed an express requirement of state law. Instead, the rules are designed to carry out the Authority's statutory responsibility to manage withdrawals from the aquifer, adopt rules to carry out its powers and duties under the Act, manage withdrawals and points of withdrawals from the aquifer and require permits for certain withdrawals while exempting other withdrawals from permitting requirements (pursuant to, inter alia , §§1.03(9), (11), (12), (13) and (14), 1.08(a), 1.11(a), (b) and (h), 1.14(b) and (c), 1.15(a) and (b), 1.16(c), 1.17, and 1.33(a) and (c) of the Act). The rules are designed to comply with these express requirements of state law and not exceed them.

Further, §1.33(c) of the Act provides that the determination of whether or not a well qualifies as exempt turns in part upon whether the well is "within or serving a subdivision requiring platting." The Authority has not attempted to "reinvent" the principles governing when a subdivision of land must be platted. Instead, the Subchapter C rules track the platting and subdivision rules applicable to municipalities and counties found within Chapters 212 and 232 of the Texas Local Government Code. There are no other applicable "express requirements of state law" which are applicable to these rules or which could be exceeded by these rules.

Third, the Subchapter C rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of the rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the Subchapter C rules would not be adopted solely under the general powers of the Authority instead of under a specific state law. While these rules are adopted in part under the Authority's general powers, they are also adopted under the Act, a specific state law regarding the Edwards Aquifer. In particular, the rules are adopted pursuant to, inter alia , §§1.03(9), (11), (12), (13) and (14), 1.08(a), 1.11(a), (b) and (h), 1.14(b) and (c), 1.15(a) and (b), 1.16(c), 1.17, and 1.33(a) and (c) of the Act which require the Authority to manage withdrawals from the aquifer, adopt rules to carry out its powers and duties under the Act, manage withdrawals and points of withdrawals from the aquifer and require permits for certain withdrawals while exempting other withdrawals from permitting requirements.

For these reasons, it is not necessary to perform a RIAMER on the Subchapter C rules.

The Authority has received public comments to the above-referenced proposed rules and has prepared responses thereto as set forth below:

Five public hearings were held on the Chapter 711 Subchapter C rules and other rules proposed by the Authority on: Monday, October 2, 2000 at 6:00 p.m. at the conference center of the Edwards Aquifer Authority, 1615 N. St. Mary's Street, San Antonio, Texas; Tuesday, October 3, 2000 at 6:00 p.m., at St. Paul's Lutheran Church, 1303 Avenue M, Hondo, Texas; Wednesday, October 4, 2000 at 6:00 p.m., at the San Marcos Activity Center, 501 E. Hopkins, San Marcos, Texas; Wednesday, October 11, 2000 at 6:00 p.m., at the Sgt. Willie DeLeon Civic Center, 300 E. Main Street, Uvalde, Texas; and Thursday, October 12, 2000, at 6:00 p.m., at the New Braunfels Civic Center, 380 S. Seguin Avenue, New Braunfels, Texas.

The public comment period closed on October 30, 2000. Oral and/or written comments were provided by Bickerstaff, Heath, Smiley, Pollan, Kever & McDaniel, L.L.P. on behalf of the Texas Farm Bureau ("TFB"), San Antonio Water System ("SAWS"), Andrew J. Aelvoet on behalf of Southwest Texas Federal Land Bank Association ("Federal Land Bank"), Robert Grossenbacher ("Grossenbacher"), Raymond Bartran ("Bartran"), and Liza Toombs ("Toombs").

While the commenters generally did not express support or opposition to adoption of the Subchapter C Rules as a whole, they did, as discussed more fully below, suggest changes to and/or opposition to certain portions of the rules. Section 711.20 Public Comment:

Federal Land Bank believes §711.20(2) is "impractical" and requests a revision that provides for incidental withdrawals of aquifer water related to domestic and livestock use. Federal Land Bank contends that domestic use of Edwards Aquifer water in rural areas would necessarily include uses incidental to home ownership such as watering of yards and providing water for swimming pools.

Authority Response:

The Authority disagrees with the comment and declines to revise §711.20(2). That section merely provides that, in order to be eligible to be an exempt well, a well must, among other things, be "used solely for domestic or livestock use." The text of the rule closely follows the sections of the Act related to exempt wells. Under §1.33 of the Act, a well that produces 25,000 gallons of water per day or less for domestic or livestock use is generally exempt from the permitting requirement. All other types of withdrawals must be permitted pursuant to §1.15(b). Further, §1.16(c) provides that the owner of a well used "exclusively" for domestic and livestock use is not required to apply for a permit. Thus, in these sections the Legislature has limited the withdrawals for non-exempt uses from an exempt well for these exempt purposes.

Public Comment:

Federal Land Bank asserts that proposed rule §711.20(3) does not conform to §1.33 (c) of the EAA Act. The Federal Land Bank asserts that the rule should be revised, as indicated in italics, in order to "conform with the intent of the Texas Legislature:"

(3) it is not within or serving a subdivision requiring platting by the county or municipality in which the subdivision is situated .

Authority Response:

The Authority disagrees with the comment and declines to revise the rule in response thereto. The language in §711.20(3) - "within or serving a subdivision requiring platting" -- derives word-for-word from §1.33(c) of the Act. The additional language sought by the Federal Land Bank is not found in the Act.

Section 1.33 of the Act clearly mandates that a well which is "within or serving a subdivision requiring platting" cannot qualify as exempt. It is therefore unavoidable that the Authority must devise a mechanism by which to determine whether a given well is within or serving a subdivision requiring platting. The Authority has chosen to do so not by creating its own, entirely new platting regimen, but by generally adopting the platting requirements set forth in Chapters 212 and 232 of the Texas Local Government Code. The Authority believes a standardized definition of when a subdivision is classified as requiring platting, which is based upon existing principles found in the Texas Local Government Code, should be applied throughout the Edwards Aquifer region. The Authority's rules closely track Chapters 212 (relating to platting requirements by municipalities) and 232 (relating to platting requirements by counties) of the Texas Local Government Code. Those chapters set out general standards and exemptions from the platting requirement which apply statewide. It is those general standards and exemptions which the Authority has incorporated into its exempt well rules.

The Authority acknowledges that Chapters 212 and 232 also include provisions which give municipalities and counties the discretion to deviate from those statewide platting requirements on a case-by-case basis. See TEXAS LOCAL GOVERNMENT CODE, §§212.0045(a) and 232.0015(a). The Authority's rules do not incorporate this concept. In practice, the discretion given to counties and cities in determining platting requirements can lead to wide deviations regarding whether a particular subdivision of land is considered to require platting by a given county or municipality. For example, a subdivision of land in San Antonio might be required by the City to be platted, while a subdivision of land under identical circumstances in Hondo might not be required by that City to be platted. Similarly, a subdivision of land in Hays County might be required to be platted while a subdivision of land under identical circumstances in Bexar County might not be required to be platted. Because the Local Government Code allows each city and county the discretion to deviate from the statewide standards, there is very little predictability, in the absence of the statewide standards, as to whether any given subdivision is required to be platted.

Past practice of the Authority shows that it is impracticable to rely on the local political subdivisions that have traditionally regulated the subdivision of land. In general, the Authority has received poor cooperation at the city and county levels. Many cities and counties have been hostile to or disagree with the Authority's groundwater resource management programs. As such, they would "push it back on" the Authority to make the decision. Other political subdivisions did not have the political will to taken on controversial matters. Other cities and counties did not have the necessary staffing to promptly or expertly assist the Authority in processing its exempt well status determinations. Finally, each political subdivision of appropriate jurisdiction would institute differing criteria for approval of subdivisions or would construe similar provisions differently. Thus, from the Authority's perspective, similarly situated developments would be treated differently, or dissimilar developments would be treated the same without any particular reasonable basis. Accordingly, the Authority proposes to eliminate these problems by administering its own subdivision approval program.

The Authority believes it is preferable and necessary to adopt the statewide standards in order to have a cogent and consistent exempt well program. The Authority cannot fairly and consistently implement its exempt well program if the "subdivision requiring platting" requirement varies from city to city and county to county within its jurisdiction. It is unfair and unreasonable, for example, to grant a well owner in Comal County exempt well status simply because that well owner is lucky enough to live in a county which might decide to deviate from the statewide standards, while denying exempt well status to a well owner in Uvalde County whose land was subdivided under identical circumstances but whose county decided not to deviate from the statewide standards. Further, such a scheme would be administratively unworkable from the Authority's standpoint. Authority staff cannot and should not be expected to be intimately knowledgeable about the minutia of the platting rules and case-by-case exceptions of each city and county within its jurisdiction. For these reasons, the Authority believes it is prudent, reasonable, and consistent with the legislative intent behind §1.33 of the Act that the exempt well rules utilize a standardized definition of when a subdivision is classified as requiring platting based upon existing principles found in the Texas Local Government Code, while not adopting those provisions which give municipalities and counties the discretion to deviate from those statewide platting requirements.

Section 711.22

Public Comment:

As proposed, §711.22(b) read, in pertinent part:

The owner of an exempt well is not required to comply with the requirements of:

. . . (4) subchapter C (relating to Permit Application Fees), D (relating to Aquifer Management Fees) of Chapter 709 (relating to Fees) or E (relating to Permit Retirement Special Fees of this title.

SAWS asserts that §711.22(b)(4) should be revised to clarify that new exempt wells are required to receive a well construction permit and pay the associated fee for the construction permit. SAWS also identifies a typographical error in the section. To correct these issues, SAWS suggests that §711.22(b)(4) be revised to read as follows:

The owner of an exempt well is not required to comply with the requirements of:

. . . (4) subchapters D (relating to Aquifer Management Fees) and E (relating to Permit Retirement Special Fees) of chapter 709 (relating to Fees).

Authority Response:

The Authority agrees with this comment and has revised §711.22(b)(4) accordingly. It is the Authority's intent that any person wishing to construct a new exempt well must first obtain a well construction permit from the Authority. This is made clear in §711.22(b)(2) which does not excuse an exempt well owner from the construction permit requirement found in §711.12(a)(2). It is also the intent of the Authority that the permit fee be paid before any such construction permit may be issued. This intent is clear in Subchapter C of Chapter 709, rules which were recently adopted by the Authority as final rules.

Public Comment:

SAWS points out a typographical error in §711.22(c) and requests the insertion of the word "will" as italicized below:

(c). . .nor will the well qualify for interim authorization status.

Authority Response:

The Authority agrees with this comment and has revised the rule accordingly to correct the typographical error.

Section 711.32

Public Comments:

Section 711.32 provides, in part, that exempt wells must be "constructed and equipped" in such a way as to be incapable of producing in excess of 25,000 gallons per day. Federal Land Bank objects to this language and proposes changing §711.32 so that an exempt well need only be "equipped," not "constructed and equipped," to be incapable of producing more than 25,000 gallons per day. The bank reasons that some exempt wells were originally constructed for irrigation and were capable of pumping more than 25,000 gallons per day, but have been re-equipped for providing only for domestic and livestock uses. Such wells may be simply equipped in ways capable of producing no more than 25,000 gallons per day. The bank reasons that the rule should be revised in order to prevent the owner of such a well from having to drill a new well to meet his or her exempt well water needs. According to Federal Land Bank, a rule requiring only that exempt wells be equipped in such a way that prevents pumpage in excess of 25,000 a day is sufficient enough to safeguard against the threat of excessive withdrawals from exempt wells.

Grossenbacher objects to the requirement in the rule that an exempt well be incapable of producing more than 25,000 gallons per day. Grossenbacher reasons that while many smaller wells may be capable of producing over 25,000 gallons a day, the costs and mechanical difficulties of actually doing so may be too high to make it worthwhile. Therefore, Grossenbacher contends that it is unreasonable to require an exempt well owner to retrofit such a well in order to render it incapable of pumping more than 25,000 gallons per day.

Authority Response:

The Authority disagrees with the Grossenbacher comment and generally agrees with the Federal Land Bank comment. First, the Authority believes it is necessary that, in order to be considered exempt, a well must be physically incapable of producing more than 25,000 gallons per day. Section 1.33(a) of the Act states that, in order to be exempt, the well must produce "25,000 gallons of water a day or less." Section 1.33(a) then exempts such wells from the metering requirement. If exempt wells are exempt from having meters installed on them, then the Authority has no reliable method to accurately and independently determine the quantity of water pumped from the well (i.e. to confirm whether the well actually complies with the 25,000 gallon per day requirement). In the absence of such an ability, the Authority must simply require that the wells be incapable of producing more than that amount. Such a requirement ensures that the dictates of §1.33(a) of the Act are met. Further, the administrative convenience of the Authority is enhanced by requiring that exempt wells be physically incapable of producing more than 25,000 gallons. In the absence of such a rule, the Authority would apparently bear the Herculean task of constantly inspecting each exempt well to ensure that it is not used to pump more than 25,000 gallons on any given day.

Having concluded that wells must be physically incapable of producing more than 25,000 gallons per day, the Authority agrees with the suggestion of the Federal Land Bank that it should not matter whether the incapability derives from the original construction of the well or subsequent equipping of the well. Therefore, the Authority has revised the language of the rule to read as follows:

The owner of an exempt well may not produce more than 25,000 gallons of water a day. Such a well must also be either drilled, completed or equipped so that it is incapable of producing more than 25,000 gallons of water per day.

This language clarifies that the well's incapability to produce more than 25,000 gallons of water a day may derive from its construction, the method by which it is completed, or by how it is equipped. The language in this rule as revised derives from §36.117(a)(1) of the Texas Water Code, which incorporates similar concepts of exempt wells.

Section 711.34

Public Comments:

Federal Land Bank and Toombs assert that rule §711.34 allows the Authority to exceed its scope of power, as provided by the Act, by requiring the platting of subdivisions in the Edwards Aquifer region. Furthermore, it is suggested that the rule is an attempt to usurp power given to local county and municipal governments under chapters 212 and 232 of the Texas Local Government Code. Therefore, the deletion of this rule is urged. Federal Land Bank also objects to the Authority's use of a standardized definition of when platting is required throughout the Authority's boundaries.

Furthermore, Federal Land Bank believes §711.34(b)(4) is discriminatory in that it gives the Veteran's Land Board preference in financing options made available those purchasing subdivision lots.

Federal Land Bank also calls §711.34(b)(5) "discriminatory" because it requires no minimum lot size for a sub-divided tract of land owned by the State or agency or commission thereof although §711.34(b)(3) requires that a privately owned tract must be sub-divided into parcels greater than 10 acres in area.

Authority Response:

The Authority disagrees with these comments and declines to revise the Subchapter C rules in response thereto. As explained more fully above, §1.33 of the Act clearly mandates that a well which is "within or serving a subdivision requiring platting" cannot qualify as exempt. It is therefore unavoidable that the Authority must devise a mechanism by which to determine whether a given well is within or serving a subdivision requiring platting. The Authority has chosen to do so not by creating its own, entirely new platting regimen, but by generally adopting the platting requirements set forth in Chapters 212 and 232 of the Texas Local Government Code.

The comments appear to misunderstand the effect of §711.134. By adopting the rule, the Authority will not itself "require platting of subdivisions in the Edwards Aquifer region." Instead, the rule simply adopts, with certain qualifications discussed more fully above, the principles set forth in Chapters 212 and 232 in order to determine whether a given well is within or serving a subdivision requiring platting. If it is not, then the well may be exempt if it meets the other criteria. If it is, then the well cannot be exempt.

Further, the Authority believes that a standardized definition of when a subdivision is classified as requiring platting, which is based upon existing principles found in the Texas Local Government Code, should be applied throughout the Edwards Aquifer region. As stated above, the Authority's rules closely track Chapters 212 (relating to platting requirements by municipalities) and 232 (relating to platting requirements by counties) of the Texas Local Government Code. Those chapters set out general standards and exemptions from the platting requirement which apply statewide. It is those general standards and exemptions which the Authority has incorporated into its exempt well rules.

The Authority acknowledges that Chapters 212 and 232 also include provisions which give municipalities and counties the discretion to deviate from those statewide platting requirements on a case-by-case basis. See TEXAS LOCAL GOVERNMENT CODE, §§212.0045(a) and 232.0015(a). The Authority's rules do not incorporate this concept. In practice, the discretion given to counties and cities in determining platting requirements can lead to wide deviations regarding whether a particular subdivision of land is considered to require platting. For example, a subdivision of land in San Antonio might be required by the City to be platted, while a subdivision of land under identical circumstances in Hondo might not be required by that City to be platted. Similarly, a subdivision of land in Hays County might be required to be platted while a subdivision of land under identical circumstances in Bexar County might not be required to be platted. Because the Local Government Code allows each city and county the discretion to deviate from the statewide standards, there is very little predictability, in the absence of the statewide standards, as to whether any given subdivision is required to be platted.

The Authority believes it is preferable and necessary to adopt the statewide standards in order to have a cogent and consistent exempt well program. The Authority cannot fairly and consistently implement its exempt well program if the "subdivision requiring platting" requirement varies from city to city and county to county within its jurisdiction. It is unfair and unreasonable, for example, to grant a well owner in Comal County exempt well status simply because that well owner is lucky enough to live in a county which might decide to deviate from the statewide standards, while denying exempt well status to a well owner in Uvalde County whose land was subdivided under identical circumstances but whose county decided not to deviate from the statewide standards. Further, such a scheme would be administratively unworkable from the Authority's standpoint. Authority staff cannot and should not be expected to be intimately knowledgeable about the minutia of the platting rules of each city and county within its jurisdiction. For these reasons, the Authority believes it is prudent, reasonable, and consistent with the legislative intent behind §1.33 of the Act that the exempt well rules utilize a standardized definition of when a subdivision is classified as requiring platting based upon existing principles found in the Texas Local Government Code, while not adopting those provisions which give municipalities and counties the discretion to deviate from those statewide platting requirements.

The Authority believes that the comments on §711.34(b)(4) and (5) are also misplaced. Section 711.34(b)(4) provides that in certain instances when land is subdivided outside the limits and extraterritorial jurisdiction of a municipality and those lots are sold to veterans through the Veterans Land Board such a subdivision should be considered exempt from the platting requirements. This provision was not created by the Authority but by the Texas Legislature. The rule simply adopts what is already the law as found in §232.0015(g) of the Texas Local Government Code.

Similarly, the Authority acknowledges that §711.34(b)(5) does not impose a minimum lot size requirement while §711.34(b)(3) does impose a minimum lot size requirement. Both provisions set forth exemptions from the platting requirement. Both provisions, however, were created not by the Authority, but by the Texas Legislature. Section 711.34(b)(5) derives from §232.0015(h) and §711.34(3) derives from §232.0015(f) of the Texas Local Government Code.

Public Comment:

SAWS seeks revisions to §711.34(a) and (b) in order to clarify that the Authority does not have the ability to require the platting of property, but may only determine whether a subdivision required platting before granting exempt well status. SAWS seeks the following italicized changes:

(a) Except as provided in subsection (b) of this section, subdivisions of land required to be platted per state law .

(b) The following subdivisions of land are not classified as requiring platting :

Authority Response:

The Authority does not disagree with these comments. It has never been the Authority's intent to actually be the entity requiring platting. Instead, the Authority is merely required, pursuant to §1.33 of the Act, to determine whether a given well is within or serving a subdivision requiring platting in order to qualify for exempt well status. While the Authority declines to incorporate all of the specific changes sought by SAWS, the Authority does not object to revising the wording of §711.34(a) and (b) to make its intent more clear. Accordingly, those sections are revised in the rule as adopted to read as follows:

(a) Except as provided in subsection (b) of this section, subdivisions of land are classified as requiring platting.

(b) The following subdivisions of land are not classified as requiring platting:

Public Comment:

SAWS also seeks various grammatical, non-substantive revisions throughout §711.34.

Authority Response:

The Authority does not believe that these revisions substantially improve the rule as written and the Authority declines to adopt the suggested changes.

Public Comment:

Section 711.34(b)(1) provides the following exemption from the platting requirement:

(1) The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality divides the tract into two or more parts, but:

. . . (B) the tract is to be used primarily for agricultural use, as defined in Section 1-d, Article VIII, Texas Constitution, . . . .

"Agricultural use" is defined in Section 1-d, Article VIII of the Texas Constitution as, "the raising of livestock or growing of crops, fruit, flowers, and other products of the soil under natural conditions as a business venture for profit, which business is the primary occupation and source of income of the owner."

In other rules adopted by the Authority, another definition of "agricultural use" is found. In §709.1(1), the Authority defines "agricultural use" as "the use of water for irrigation use."

TFB contends that the Authority should use the same definition of "agricultural use" throughout the rules and proposes using an alternate definition which is found in §2.001 of the Texas Agricultural Code. The TFB also contends that the definition in Article VIII, section 1-d of the Texas Constitution defines "agricultural use" for tax purposes only. Thus, the TFB contends that using this definition may place different subdivision requirements on land used for non-profit agricultural purposes.

Authority Response:

The Authority disagrees with this comment and declines to revise §711.34 in response thereto. The platting exemption found in §711.34(b)(1) is derived directly from §232.0015(c) of the Texas Local Government Code. As stated above, rather than "reinventing the wheel," the Authority has incorporated the standards set by state law regarding when a county may require platting of a subdivision. When it created that exemption, the Texas Legislature chose to utilize the definition of "agricultural use" found in Section 1-d, Article VIII of the Texas Constitution. The Authority declines to second-guess the Legislature by substituting an alternate definition. Any result which would place different subdivision requirements on land used for non-profit agricultural purposes as opposed to for-profit agricultural purposes must have been anticipated by the Texas Legislature when it adopted the exemption.

Further, the Authority does not believe that, as alleged by the TFB, the presence of a different definition of "agricultural use" found elsewhere in the Authority's rules will "cause confusion and . . . lead to inconsistent application of the rules." The two definitions serve entirely different and distinct purposes. The definition referred to in §711.34(b)(1) is clearly only relevant to the question of whether a given subdivision of land may be exempted from the platting requirement under that particular exemption. That definition is derived directly from state platting laws.

The definition of "agricultural use" found in the Authority's rule 709.1, on the other hand, is expressly made applicable only to the Authority's Chapter 709 rules. Rule 709.1 provides, in relevant part: "Definitions. The following words and terms, when used in this chapter , shall have the following meanings, unless the context clearly indicates otherwise:" (Emphasis added.) The Authority's Chapter 709 rules set forth the various types of fees imposed by the Authority and provide procedures for the adoption, assessment, billing and collection of fees from the regulated community. Section 1.29(e) of the Act provides that "the fee rate for agricultural use . . . may not be more than 20 percent of the fee rate for municipal use." Thus, the definition of "agricultural use" found within Chapter 709 is needed to identify who will be entitled to pay the lower fees.

The Authority declines to revise §711.34 in response to this comment.

Public Comment:

SAWS urges a revision to §711.34(b)(11) in order to create "consistency between EAA rules and state law concerning city services, such as water delivery." Specifically, SAWS points to §43.056 of the Local Government Code which provides deadlines and requirements that a municipality proposing annexation must meet. SAWS requests the following italicized change to §711.34(b)(11)(B)(ii):

Is not scheduled by a municipal distribution system to be provided retail water service either by an annexation service plan or within one year. . .

Authority Response:

The Authority disagrees with the comment and declines to revise §711.34 in response thereto. Section 711.34(b)(11) creates an exemption from the platting requirement for subdivisions of land which:

(A) occurred prior to June 28, 1996 (the effective date of the Act); and

(B) when final action is taken on an application for exempt well status:

(i) the subdivision does not have retail water service; and

(ii) the subdivision is not scheduled by a municipal distribution system to be provided retail water service within one year from the date the application for exempt well status was filed with the authority.

Pursuant to §43.056 of the Local Government Code, an annexation service plan must be prepared by a city proposing an annexation. The plan must set forth how the city will provide full services, including water service, to the annexed area within 2 1/2 years or, in some cases, 4 1/2 years after the effective date of the annexation. The Authority believes a 2 1/2 year or 4 1/2 year time frame is too remote for the purposes of the exemption found in §711.34(b)(11).

Section 711.44

Public Comment:

Federal Land Bank requests that proposed rule §711.44(a)(1) be revised so that the term "any withdrawal" is clarified. Furthermore, the commenter suggests "incidental and non-sustained withdrawals" from exempt wells, for purposes other than domestic and livestock use, should not justify a loss of exempt well status. Finally, Federal Land Bank requests a definition and quantification of amounts of withdrawals from the aquifer, for incidental and non-sustained use, that would not be prohibited from an exempt well.

Authority Response:

The Authority disagrees with the comment and declines to revise §711.44 in response thereto. Under §1.33 of the Act, a well that produces 25,000 gallons of water per day or less for domestic or livestock use is generally exempt from the permitting requirement. All other types of withdrawals must be permitted pursuant to §1.15(b). Further, §1.16(c) provides that the owner of a well used "exclusively" for domestic and livestock use is not required to apply for a permit. Thus, the Legislature has limited withdrawals for non-exempt uses from an exempt well for these exempt purposes.

Section 711.46

Public Comment:

Federal Land Bank believes this proposed rule (apparently subsection (b)) needs revisions and clarification due to its impracticability. The Bank argues that the rule should allow for incidental withdrawals of aquifer water for non-exempt uses from an exempt well.

Authority Response:

Public Comment:

Section 711.46 provides that a well may either be an exempt well or a well for which a permit is required, but not both simultaneously. The rule goes on to provide, however, that, if separately metered, withdrawals for exempt use may be made from a non-exempt (i.e., permitted) irrigation well. Bartran asserts that allowing withdrawals for exempt uses from permitted wells conflicts with §711.402(e), a rule currently proposed for adoption by the Authority.

Authority Response:

The Authority agrees that §§711.46 and 711.402(e), when read together, could potentially be confusing. The Authority will revise the text of §711.402(e) in order to clarify and be consistent with §711.46. In addition, as discussed above, other revisions have been made to §711.46 to make it more readable and clear.

Comments on the Rules Generally

Public Comment:

The Texas Farm Bureau ("TFB") maintains that a takings impact statement ("TIA") was required before the Authority provided public notice of the proposed rules. According to TFB, the Texas Private Real Property Rights Preservation Act ("Property Rights Act") does not excuse the Authority from the requirements of the Property Right Act because the rights are not "vested" or because the Legislature has chosen to regulate those property rights. Furthermore, the TFB contends that property does not have to be vested to come within the purview of the Property Rights Act and, nonetheless, groundwater rights are vested rights requiring no perfection because they accompany the surface estate.

Authority Response:

The Authority has received this comment and disagrees with it. Chapter 2007 of the Texas Government Code, the Property Rights Act referred to by the TFB, requires governmental entities, under certain circumstances, to prepare a TIA in connection with certain covered categories of proposed governmental actions. Based on the following reasons, the Authority has determined that it need not prepare a TIA in connection with the adoption of these rules.

First, the Authority has made a "categorical determination" that these Chapter 711 Subchapter C rules do not affect vested property rights and, as such, adoption of these rules is not an action that "may result in a taking." The Act requires the Authority to implement a permitting system whereby existing users and other potential users of aquifer water may apply for and receive permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. Certain withdrawals are exempted by the Act from these permitting requirements. These rules are intended to effectuate the components of the Act which exempt certain wells from the permitting and metering requirements of the Act.

The Property Rights Act makes it clear that a TIA need only be performed when the proposed governmental action is one that "may result in a taking." See id ., §§2007.043(a), 2007.041(a), 2007.042(a). If an action is one that has no potential to result in a taking, then no TIA need be performed. Adoption of the rules at issue here is not an action that "may result in a taking" for several reasons.

The rules cannot result in the taking of a vested private real property right. Traditional takings doctrine dictates that, in order to constitute a compensable taking, the property right alleged to have been "taken" must rise to the level of a vested right. Prior to the adoption of the Act, a landowner's right to pump groundwater underlying his or her property derived from the common law English Rule, also known as the "Rule of Capture." The permitting requirement is admittedly at odds with the Rule of Capture. However, a landowner's common law Rule of Capture right does not rise to the level of a vested property right. Under the common law, water underlying a landowner's property may be reduced to possession by the pumping of another. In other words, a landowner has no right to exclude others from the water underlying his land. As such, the landowner's expectancy of water does not rise to the level of a vested property right which could be "taken" by implementation of a permitting program and the passage of these rules, and passage of these rules is not an action that may result in a taking. Further, the Subchapter C rules actually exempt certain wells from the permitting requirement, thereby excluding those wells from the permitting requirement in the first place.

Additionally, with respect to Edwards Aquifer water, any common law rights a landowner may have had in the past have been effectively abolished by the Legislature within the boundaries of the EAA by the passage of the Act. Under the old common law, a landowner was essentially free to drill a well and pump as much water as he pleased for whatever use and location of use he pleased. Passage of the Act changed the rules within the boundaries of the EAA. The basis for the right to withdraw groundwater under the Act changed from being an incident of the ownership of land to one based on use during the statutorily-defined "historical period," or other criteria. For "exempt" wells, a landowner must now register his well and demonstrate that his well: (1) is incapable of pumping more than 25,000 gallons per day; (2) will be used solely for domestic and livestock use; and (3) is not within or serving a subdivision requiring platting. Regulation under the Act leaves no room for the common law to operate within the boundaries of the EAA with respect to Edwards Aquifer groundwater. As a result, there are no vested property rights which could be taken by the passage of these rules and no TIA need be prepared.

This conclusion is directly supported by the decision in Edwards Aquifer Authority v. Bragg , 21 S.W.3d 375 (Tex. App.-San Antonio 2000, pet. denied) (" EAA v. Bragg "). In that case, the Plaintiffs sued to invalidate a set of rules adopted by the Authority (the "prior rules") which were substantially similar, in part, to these rules and which were designed, like these rules, to implement, among other things, the Authority's exempt well program. The Fourth Court of Appeals held that the Authority's adoption of its prior rules was expressly mandated by the Act and was therefore excepted from the operation of the Property Rights Act. The holding in that case controls here.

Third, it is the position of the Authority that all valid actions of the Authority are excluded from the Property Rights Act under §2007.003(b)(11)(C) of the Texas Government Code as actions of a political subdivision taken under its statutory authority to prevent waste or protect the rights of owners of interest in groundwater. Accordingly, a TIA need not be prepared in connection with the proposal of these rules.

Accordingly, for the reasons stated above, a TIA need not be performed in connection with the proposal of these rules.

The new rules in Subchapter C are adopted pursuant to the following statutory provision contained within the Act and other relevant statutory authorities.

Section 1.03(9) of the Act defines "domestic or livestock use." This is the only type of use, as mandated by §1.33 of the Act, for which withdrawals from exempt well may be used.

Section 1.03(11) of the Act defines "industrial use." Section 1.03(12) of the Act defines "irrigation use." These types of uses are not authorized from exempt wells.

Section 1.03(13) of the Act defines "livestock." The Chapter 711 Subchapter C rules incorporate this concept when determining whether a well qualifies as "exempt" from permitting requirements.

Section 1.03(14) of the Act defines "municipal use." The Chapter 711 Subchapter C rules incorporate this concept within the types of uses for which aquifer water may be withdrawn.

Section 1.17(d) of the Act specifies when use under "interim authorization" ends for a given well. This concept is incorporated into the Chapter 711 rules.

§711.18.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise:

(1)

Divide or division--To cut into parts, disunite, or separate a tract of land regardless of whether it is made by using a:

(A)

metes and bounds description in a deed of conveyance;

(B)

metes and bounds description in a contract for a deed;

(C)

contract of sale to convey;

(D)

any other executory contract to convey; or

(E)

any other method.

(2)

Plat--A map of specific tracts of land showing the location and boundaries of individual tracts of lands subdivided into other smaller tracts with streets, alleys, squares, parks, or other parts of a tract of land, and easements drawn to scale.

(3)

Subdivision of land--When an owner of a tract of land within the boundaries of the Authority divides the tract into two or more parts to lay out:

(A)

a subdivision of the tract, including an addition;

(B)

lots; or

(C)

streets, alleys, squares, parks, or other parts of the tract intended to be dedicated:

(i)

to public use; or

(ii)

for the use of purchasers or owners of lots fronting on or adjacent to the streets, alleys, squares, parks or other parts.

(4)

Tract of land--A lot, piece, or parcel of land irrespective of size.

§711.22.Effect of Exempt Well Status.

(a)

Except as provided in subsection (b) of this section, all provisions of the Act and the authority's rules apply to owners of exempt wells.

(b)

The owner of an exempt well is not required to comply with the requirements of:

(1)

subchapter M of this chapter (relating to Meters; Alternative Measuring Methods; and Reporting);

(2)

section 711.12(a)(1) of this chapter (relating to Activities Requiring a Permit);

(3)

section 707.311 of this title (relating to Requirement to File Declaration of Historical Use); and

(4)

subchapters D (relating to Aquifer Management Fees) and E (relating to Permit Retirement Special Fees) of chapter 709 (relating to Fees).

(c)

Unless the well status is converted pursuant to §711.48 of this chapter (relating to Conversion of Well Status), the owner of an exempt well may not obtain a groundwater withdrawal permit for the well, nor will the well qualify for interim authorization status.

§711.32.Production Limitation.

The owner of an exempt well may not produce more than 25,000 gallons of water a day. Such a well must also be either drilled, completed , or equipped so that it is incapable of producing more than 25,000 gallons per day.

§711.34.Platting of Subdivisions.

(a)

Except as provided in subsection (b) of this section, subdivisions of land are classified as requiring platting.

(b)

The following subdivisions of land are not classified as requiring platting:

(1)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality divides the tract into two or more parts, but:

(A)

does not lay out streets, alleys, squares, parks, or other parts of the tract intended to be dedicated to public use or for the use of purchasers or owners of lots fronting on or adjacent thereto; and

(B)

the tract is to be used primarily for agricultural use, as defined in Section 1-d, Article VIII, Texas Constitution, or for farm, ranch, wildlife management, or timber production use within the meaning of Section 1-d-1, Article VIII, Texas Constitution.

(2)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality:

(A)

divides the tract into four or fewer parts;

(B)

(C)

each lot is to be sold, given, or otherwise transferred to an individual who is related to the owner of the tract within the third degree by consanguinity or affinity, as determined under Chapter 573, Government Code;

(3)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality:

(A)

divides the tract into two or more lots and each lot of the subdivision is more than 10 acres in area; and

(B)

does not lay out streets, alleys, squares, parks, or other parts of the tract intended to be dedicated to public use or for the use of purchasers or owners of lots fronting on or adjacent to thereto;

(4)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality:

(A)

divides the tract into two or more lots;

(B)

sells all of the lots to veterans through the Veterans Land Board program; and

(C)

the owner does not lay out streets, alleys, squares, parks, or other parts of the tract intended to be dedicated to public use or for the use of purchasers or owners of lots fronting on or adjacent to thereto;

(5)

The subdivision is a tract of land owned by the state or any state agency, board, or commission, or owned by the permanent school fund or any other dedicated funds of the state, unless the subdivision lays out streets, alleys, squares, parks, or other parts of the tract intended to be dedicated to public use or for the use of purchasers or owners of lots fronting on or adjacent to thereto;

(6)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality divides the tract into two or more lots and:

(A)

the tract is owned by a political subdivision of the state;

(B)

the tract is situated in a flood plain; and

(C)

the lots are sold to adjoining landowners;

(7)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality divides the tract into two lots and:

(A)

does not lay out streets, alleys, squares, parks, or other parts of the tract intended to be dedicated to public use or for the use of purchasers or owners of lots fronting on or adjacent to thereto;

(B)

ownership of at least one new part is to be retained by the owner of the larger, subdivided tract; and

(C)

ownership of the other new part is to be transferred to another person who will further subdivide the tract subject to the plat filing requirements of chapter 232, Local Government Code;

(8)

The owner of a tract of land located outside the limits and the extraterritorial jurisdiction of a municipality:

(A)

divides the tract into two or more lots;

(B)

does not lay out streets, alleys, squares, parks, or other parts of the tract intended to be dedicated to public use or for the use of purchasers or owners of lots fronting on or adjacent to thereto;

(C)

transfers all lots to persons who owned an undivided interest in the original tract; and

(D)

a plat is filed before any further development of any part of the tract;

(9)

The owner of a tract of land located within the limits or the extraterritorial jurisdiction of a municipality divides the tract into parts greater than five acres, where each part has access and no public improvement is being dedicated;

(10)

The owner of a tract of land located wholly within the limits of a municipality with a population of 5,000 or less divides the tract into parts larger than 2 1/2 acres and the tract abuts any part of an aircraft runway; or

(11)

the subdivision of land:

(A)

the subdivision occurred prior to the effective date of the Chapter 711 subchapter C rules; and

(B)

when final action is taken on an application for exempt well status;

(i)

the subdivision does not have retail water service; and

(ii)

the subdivision is not scheduled by a municipal distribution system to be provided retail water service within one year from the date the application for exempt well status was filed with the Authority.

§711.46.Dual Status Wells Prohibited.

(a)

A well may either be an exempt well or a well for which a permit is required, but not both simultaneously.

(b)

If separately metered in accordance with the requirements of §711.402(e) of this title (relating to Duty to Install and Operate Meter; Meter Installation Deadlines) of this chapter, withdrawals for exempt use may be made from a permitted non-exempt irrigation well.

(c)

Withdrawals for uses requiring a groundwater withdrawal permit may not be made from an exempt well.

§711.48.Conversion of Well Status.

(a)

The owner of a well for which a permit is required may apply to convert the well to an exempt well if the well otherwise meets the requirements to qualify for an exempt well and the person files an application for exempt well status pursuant to §707.308 of this chapter (relating to Requirement to File Application for Exempt Well Status).

(b)

The owner of an exempt well may apply to convert the well to a non-exempt permitted well if the owner files an application to transfer and amend pursuant to §707.414 of this title (relating to Applications to Transfer Interim Authorization Status and Amend Application for Initial Regular Permit), or §707.415 of this title (relating to Applications to Transfer and Amend Permit). Except as provided in §711.146 of this chapter (relating to Dual Status Wells Prohibited), if such a well is converted to a non-exempt, permitted well, then all withdrawals from the well for exempt purposes must cease.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 28, 2000.

TRD-200009045

Gregory M. Ellis

General Manager

Edwards Aquifer Authority

Effective date: January 17, 2001

Proposal publication date: September 29, 2000

For further information, please call: (210) 222-2204

Subchapter D. INTERIM AUTHORIZATION

31 TAC §§711.60, 711.62, 711.64, 711.66, 711.68, 711.70, 711.72, 711.74

The Edwards Aquifer Authority (the "Authority") adopts new 31 TAC §§711.60, 711.62, 711.64, 711.66, 711.68, 711.70, 711.72, and 711.74 (the "Chapter 711 Subchapter D rules"), relating to the Authority's implementation of the interim authorization aspects of its Groundwater Withdrawal Permits Program during which certain withdrawals from the Edwards Aquifer ("Aquifer") may continue to be made pending issuance of groundwater withdrawal permits by the Authority. Section 711.70 is adopted with changes to the proposed text as published in the September 29, 2000 issue of the Texas Register (25 TexReg 9878) and is republished herein. Sections 711.60, 711.62, 711.64, 711.66, 711.68, 711.72, and 711.74 are adopted without changes to the proposed text and will not be republished.

The Edwards Aquifer Authority Act, Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 TEXAS GENERAL LAWS 2350, as amended by Act of May 28, 1995, 74th Legislature, Regular Session, Chapter 3189, 1995 TEXAS GENERAL LAWS 2505, Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 361, 1995 TEXAS GENERAL LAWS 3280, and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 TEXAS GENERAL LAWS 634 (the "Act"), requires the Authority to implement a permitting system whereby "existing users" of groundwater from the Aquifer may apply for and receive initial regular permits issued by the Authority allowing for the withdrawal of groundwater from the Aquifer. Other types of permits are also required by the Act for other types of withdrawals, as well as for well construction and related activities. Recognizing that the Authority could not instantaneously issue permits to existing users, the Legislature included §1.17 in the Act, which provides for an "interim authorization" period prior to the issuance by the Authority of final initial regular permits during which certain existing users of the Aquifer are generally allowed to continue to withdraw and use Aquifer water until final action on permit applications by the Authority. Thus, the interim authorization period provides a transition period during which existing users' rights to withdraw water from the aquifer transition from deriving from the common law to deriving from the new statutory-based permitting system embodied in the Act. The Act imposes a number of restrictions upon withdrawals from the Aquifer during the interim authorization period. The Chapter 711 subchapter D rules are intended to effectuate the various components of the Act related to the interim authorization period.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.03(11) of the Act defines "industrial use." Section 1.03(12) of the Act defines "irrigation use." Section 1.03(14) of the Act defines "municipal use." The Act interprets these sections as defining the beneficial uses to which groundwater withdrawn from the Aquifer may be placed during the interim authorization period.

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." The Authority interprets this section to provide the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer during the interim authorization period.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under (Article 1 of the Act), including rule governing procedures of the board and the authority." The Authority interprets this section to require the Authority to adopt rules to implement the various substantive and procedures programs set forth in the Act related to the Edwards Aquifer, including the interim authorization program.

Section 1.11(b) of the Act requires the Authority to "ensure compliance with permitting, metering, and reporting requirements and . . . regulate permits." The Authority interprets this section, in conjunction with §1.11(a) and (h) of the Act, and §2001.004(1) of the APA, to require the Authority to adopt and enforce rules related to the Authority's permit program, an aspect of which is the interim authorization rules.

Section 1.15(a) of the Act directs the Authority to manage withdrawals from the aquifer and manage all withdrawal points from the aquifer as provided by the Act. The Authority interprets this section to authorize the Authority to manage withdrawals and withdrawal points during the interim authorization period.

Section 1.15(b) of the Act states that "except as provided by §§1.17 and 1.33 of this article, a person may not withdraw water from the aquifer or begin construction of a well or other works designed for the withdrawal of water from the aquifer without obtaining a permit from the authority." The Authority interprets this section to authorize withdrawals of groundwater from the Aquifer during the interim authorization period without a groundwater withdrawal permit. In addition, this section authorizes the Authority to regulate well construction during the interim authorization period.

Section 1.17(a) of the Act provides that a person who, on the effective date of Article 1 of the Act (i.e. June 28, 1996), owns a producing well that withdraws water from the aquifer may continue to withdraw and beneficially use water without waste until final action on permits by the Authority, if: (1) the well is in compliance with all statutes and rules relating to well construction, approval, location, spacing, and operation; and (2) by March 1, 1994, ¹ the person files a declaration of historical use on a form as required by the Authority. The Authority interprets this section to provide the basic authority for an existing user to continue to make withdrawals from the Aquifer during the interim authorization period. This section also provides the start date for the interim authorization period.

¹ This March 1, 1994 date was changed by the Texas Supreme Court to December 28, 1996. See Barshop v. Medina Under. Wat. Cons. Dist., 925 S.W.2d 618 (Tex. 1996).

Section 1.17(b) of the Act specifies that use under interim authorization may not exceed on an annual basis the historical, maximum, beneficial use of water without waste during any one calendar year as evidenced by the person's declaration of historical use, unless otherwise provided by the Authority. The Authority interprets this section to place limits on the amount of groundwater that an existing user may annually withdraw from the Aquifer.

Section 1.17(c) of the Act specifies that use under interim authorization is subject to the Authority's comprehensive management plan and rules. The Authority interprets this section to authorize the Authority to issue rules to regulate withdrawals from the Aquifer during the interim authorization period. Additionally, this section authorizes the placing of conditions on the withdrawal of groundwater from the Aquifer during the interim authorization period.

Section 1.17(d) of the Act specifies when use under interim authorization ends for a given well. The Authority interprets this section as defining when the interim authorization period ends.

The Subchapter D Rules

Section 711.60 specifies the criteria under which a well qualifies for interim authorization status. A well qualifies if, on December 30, 1996, its was a producing, non-exempt well owned by a person who filed a timely permit application and is an "existing user." This rule establishes specific qualifying requirements for interim authorization status, thereby preventing persons or entities from continuing to make withdrawals from non-exempt wells if they do not meet the criteria in this section. By providing clear parameters for qualification, §711.60 ensures consistency and predictability in determining which wells qualify for interim authorization status. The factual basis for this rule is the existence of §1.17(a) of the Act on which this section is based and tracks and which expressly authorizes interim authorization withdrawals under the conditions contained in §711.60. Additionally, the requirement that the owner with interim authorization status be an "existing owner" is necessary to avoid potential conflicts between those who might claim interim authorization status for the same well, or persons that may claim interim authorization status even though they never had historical use during the historical period. The Authority has defined "existing owner" in §711.1(2) so the public can determine whether they are eligible for interim authorization status.

Section 711.62 explains that a person owning a well qualifying for interim authorization status may continue to use the well to withdraw and beneficially use aquifer water during the interim authorization period. The purpose of this section it to describe the effect of interim authorization status. It confirms that until the period ends, the owner of a qualifying well may continue to withdraw aquifer water. Section 711.62 also confirms that while the interim authorization period is transitional, well owners are still required to use aquifer water beneficially and not waste it. The factual basis for this rule is the existence of §1.17(a) of the Act on which §711.62 is based and explains the effect of interim authorization status.

Section 711.64 explains that interim authorization withdrawals are made pursuant to §1.17 of the Act. Section 1.17 of the Act provides for interim authorization and illustrates that the Legislature recognized the need to allow withdrawals pending final action on permit applications. Section 711.64 makes clear to the public that interim authorization withdrawals are based on the Act and not the common law or groundwater withdrawal permits. The factual basis for this rule is §1.17(a) of the Act upon which §711.64 is based and authorizes interim authorization withdrawals.

Section 711.66 specifies that the interim authorization period begins on December 30, 1996, and ends, for any particular well, on either December 30, 1996, if no timely permit application was submitted for the well, or on January 1st after the date that the board issues a final and appealable order acting on the application for that well. The factual basis for §711.66(1) is the existence of §1.17(a) and (d)(1) of the Act upon which this section is based and provides the beginning dates for the interim authorization period.

An additional factual basis is that the December 30, 1996 deadline to file a declaration follows the intent of the Act which is to allow six months after the effective date of the Act to file the declaration. This was established in Barshop v. Medina Under. Wat. Cons. Dist. , 925 S.W.2d 618 (Tex. 1996). After legal challenges to the Act, the Texas Supreme Court in Barshop validated the Act effective June 28, 1996, the date of the decision. Providing water users the six months intended by the Act resulted in the December 30, 1996 deadline used in §711.66. This factual basis also provides the basis for §711.66(2)(A).

For those users who met the December 30, 1996 deadline to file a declaration, §711.66 states that their period of interim authorization ends on January 1 after the date the board issues a final and appealable order acting on the declaration. The factual basis for §711.66(2)(B) is that the Authority determined it was necessary to use January 1 after the date of the order so the water user would maintain a single user status for the entire year, allowing for effective water management. Having a water user go from withdrawing under interim authorization status to withdrawing under an initial regular permit in a single year would create major difficulties in resource planning, reporting, administration and enforcement matters.

Section 711.68 specifies that the water withdrawn from a well qualifying for interim authorization status may be put to use only for the purposes of use designated in the application and falling within one of the following three categories: industrial, municipal and irrigation use. The authorized uses of industrial, municipal and irrigation are derived from the Act and are listed in this section to ensure land owners properly use the groundwater withdrawn from the aquifer under interim authorization status. The rule informs the user that water withdrawn during this period must be beneficially used and not wasted. The factual basis for this rule is the existence of the definitions in §§1.03(11), (12) and (14) of the Act upon which this rule is based and setting forth the beneficial uses recognized in the Act.

Section 711.70 specifies the amount of water which can be withdrawn from a well qualifying for interim authorization status and the factual basis for this rule is the existence of §1.17(b) of the Act upon which this rule is based. That amount may not exceed the lesser of the person's maximum beneficial use during any one year of the statutory historical period as claimed in the person's application, or, if the person is an applicant in a contested case hearing that has been pending before SOAH for a period of at least one year, an amount otherwise determined by the board. The purpose of this rule is to identify the permissible volume of groundwater that may be withdrawn under interim authorization. By providing notice to well owners of these parameters, they are better able to engage in appropriate technical and budgetary planning. Further, by authorizing the Authority to determine the amount in certain circumstances, §711.70 provides some flexibility that may be required given the particular facts of a case and allows an existing user to plan on the amount of water recognized in §711.70(1) for a reasonable period of time prior to the Authority exercising its authority under §711.70(2).

Section 711.72 states that withdrawals of aquifer water from a well qualifying for interim authorization status are subject to various "Standard Groundwater Withdrawal Conditions" specified in subchapter F of Chapter 711, 31 Texas Administrative Code, rules, as well as all applicable laws relating to well construction, well approval, well location, well spacing, and well operation. By applying conditions on the withdrawal of groundwater under interim authorization, the Authority ensures protection of water quality, maximization of beneficial use of aquifer water, and compliance with the Act and the Authority's rules. It is important to all users of the aquifer that the Authority maintain its standards for wells operating under interim authorization. The factual basis for this rule is the existence of §1.14(a) and §1.17(a)(1) of the Act and subchapter F of Chapter 711, upon which this rule is based.

Section 711.74 explains that no action taken by the Authority's board or general manager during the interim authorization period will be binding upon the Authority or the applicant with respect to any issues arising in a permit application. The factual basis for this rule is that the Authority has determined this rule is necessary to separate administrative decisions made during the interim authorization period and during the permit period. Section 711.74 provides assurance to both the applicant and the Authority that neither will be bound by actions taken during this period.

1. the MER would "exceed" a standard set by federal law, unless the MER is specifically required by state law;

2. the MER would "exceed" an express requirement of state law, unless the MER is specifically required by federal law;

4. the MER is adopted solely under the "general powers" of the agency instead of under a specific state law.

The Act requires the Authority to implement a permitting system. However, the Act provides for an "interim authorization" period during which existing users who filed timely permit applications are generally allowed to continue to withdraw and use aquifer water until final action on permits by the Authority. The Chapter 711 Subchapter D rules essentially set forth: the criteria under which a well qualifies for interim authorization status, the effect of qualifying for interim authorization status, the duration of the interim authorization period, the uses of aquifer water authorized during the interim authorization period, the withdrawal amounts authorized during the interim authorization period, and the conditions applicable during the interim authorization period.

Section 711.70 provides some limitations on the legal authority to withdraw groundwater from the aquifer which did not exist under the common law. These withdrawal limitations would tend to have an environmental protection aspect. Therefore, §711.70 of subchapter D has the specific intent to "protect the environment" and might constitute a MER. The other Subchapter D rules do not have the specific intent to protect the environment or reduce risks to human health from environmental exposure and are, therefore, not MERs.

However, without determining whether §711.70 constitutes a MER, the Authority has concluded that no RIAMER need be prepared for any of the Subchapter D rules because none of them meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the rules in Subchapter D do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA for portions of the Edwards Aquifer, which applies only to federally-funded projects conducted on the aquifer. There is no federal law that specifically requires permitting for withdrawals of Edwards Aquifer groundwater or an interim authorization period prior to implementation of such a permitting program. Therefore, the Subchapter D rules do not exceed a standard set by federal law. Moreover, even if the rules did exceed a standard set by federal law, the rules are specifically required by state law which requires the Authority to manage withdrawals from the aquifer, adopt rules to carry out its powers and duties under the Act, manage withdrawals and points of withdrawals from the aquifer and require permits for certain withdrawals, and implement an interim authorization period to be in effect prior to issuance of permits (pursuant to, inter alia , §§1.03(9), (11), (12), (13) and (14), 1.08(a), 1.11(a), (b), and (h), 1.15(a) and (b), 1.16(c), 1.17, and 1.33(a), (b) and (c) of the Act).

Second, the Subchapter D rules do not exceed an express requirement of state law. Instead, the rules are designed to carry out the Authority's statutory responsibility to manage withdrawals from the aquifer, adopt rules to carry out its powers and duties under the Act, manage withdrawals and points of withdrawals from the aquifer and require permits for certain withdrawals, and implement an interim authorization period to be in effect prior to issuance of permits (pursuant to, inter alia , §§1.03(9), (11), (12), (13) and (14), 1.08(a), 1.11(a), (b), and (h) 1.15(a) and (b), 1.16(c), 1.17, and 1.33(a), (b) and (c) of the Act). The rules are designed to comply with these express requirements of state law and not exceed them. Other than the Act, there are no other "express requirements of state law" which are applicable to these rules or which could be exceeded by these rules.

Third, the Subchapter D rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of the rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the Subchapter D rules would not be adopted solely under the general powers of the Authority instead of under a specific state law. While these rules are adopted in part under the Authority's general powers, they are also adopted under the Act, a specific state law regarding the Edwards Aquifer. In particular, the rules are adopted pursuant to, §§1.03(9), (11), (12), (13) and (14), 1.08(a), 1.11(a), (b), and (h), 1.15(a) and (b), 1.16(c), 1.17, and 1.33(a), (b) and (c) of the Act, which require the Authority to manage withdrawals from the aquifer, adopt rules to carry out its powers and duties under the Act, manage withdrawals and points of withdrawals from the aquifer and require permits for certain withdrawals, and implement an interim authorization period to be in effect prior to issuance of permits.

For these reasons, it is not necessary to perform a RIAMER on the Subchapter D rules.

Five public hearings were held on the Chapter 711 Subchapter D rules and other rules proposed by the Authority on: Monday, October 2, 2000 at 6:00 p.m. at the conference center of the Edwards Aquifer Authority, 1615 N. St. Mary's Street, San Antonio, Texas; Tuesday, October 3, 2000 at 6:00 p.m., at St. Paul's Lutheran Church, 1303 Avenue M, Hondo, Texas; Wednesday, October 4, 2000 at 6:00 p.m., at the San Marcos Activity Center, 501 E. Hopkins, San Marcos, Texas; Wednesday, October 11, 2000 at 6:00 p.m., at the Sgt. Willie DeLeon Civic Center, 300 E. Main Street, Uvalde, Texas; and Thursday, October 12, 2000, at 6:00 p.m., at the New Braunfels Civic Center, 380 S. Seguin Avenue, New Braunfels, Texas.

The public comment period closed on October 30, 2000. Oral and/or written comments were provided by San Antonio Water System ("SAWS"), Joe Ptak, and Texas Farm Bureau ("TFB").

Section 711.60

Public Comment No. 1:

SAWS asserts interim authorization is available to succeeding well owners if a declaration was timely filed and withdrawals were made from a well during the historical period. Therefore, SAWS suggests §711.60 which reads as proposed:

A well qualifies for interim authorization status if, on December 30, 1996, it was a producing, non-exempt well from which the person owning the well, who is an existing user and timely filed a declaration, made withdrawals of groundwater from the aquifer.

be modified to read:

A well qualifies for interim authorization status if, on December 30, 1996, it was a producing, non-exempt well if the person owning the well timely filed a declaration, and withdrawals of groundwater from the aquifer were made from the well during the historical period.

Authority Response:

The Authority staff received the above-referenced comment and disagrees with the proposed modification. SAWS' comment that interim authorization is available to succeeding well owners under certain circumstances is already recognized by the Authority with the use of the term "existing user" in §711.60. The definition of "existing user" adopted by the Authority in rule 711.1(2) expressly includes "a person or the successor in interest of such a person . . .." Therefore, §711.60, as proposed, properly includes the use of the term "existing user" which encompasses the point made by SAWS relating to the succeeding well owners. In light of this discussion, §711.60 has not been modified.

Section 711.68

Public Comment No. 2:

SAWS argues interim authorization may be transferred as to place and purpose of use. Purpose of use, according to SAWS, should not be restricted to the original purpose of use because it may preclude land use changes. SAWS requests §711.68 be modified from:

". . . may beneficially use groundwater withdrawn from the aquifer through the well only for the purpose(s) of use designated in the persons' declaration . . ..."

to the following version which deletes the word "only":

". . . may beneficially use groundwater withdrawn from the aquifer through the well for the purpose(s) of use designated in the persons' declaration . . .."

Authority Response:

The Authority staff received the above-referenced comment and disagrees with the proposed modification. Section 711.68 provides the permissible range of uses of groundwater withdrawn from the aquifer during the interim authorization period. The authorized uses of industrial, municipal and irrigation are derived from the Act and are listed in this rule to ensure land owners properly use groundwater withdrawn from the aquifer. Whether the place or purpose of use of a well's interim authorization status can be transferred is addressed in separate rules found in subchapter L (relating to transfers). That determination is not related to or limited by §711.68. In light of this discussion, §711.68 has not been modified.

Section 711.70

Public Comment No. 3:

SAWS points out that despite the fact that the Act provides for an interim authorization amount that is different than the declared maximum beneficial use under §1.17(b), it does not seem possible for such a change to occur without the prior issuance of a "final and appealable order" by the Authority's board. SAWS states that under the proposed rule, it will be bound by the board's decision with no mechanism to challenge the decision. SAWS proposes the elimination of paragraph (2) which reads "an amount otherwise determined by the Board for the person" so that §711.70 reads:

During a well's interim authorization period, a person owning a well qualifying for interim authorization status may withdraw on an annual basis an amount not to exceed the person's historical, maximum beneficial use claimed in §4B of a declaration.

Authority Response:

The Authority staff received the above-referenced comment and disagrees with the proposed modification. Section 1.17(b) of the Act specifically states that use under interim authorization may not exceed the historical, maximum beneficial use of water as evidenced by a declaration unless that amount is "otherwise determined by the Authority." Clearly, the Act authorizes the Authority to set a withdrawal amount. While the Authority is made "subject to" the Administrative Procedures Act ("APA") under the Act, this does not mean every decision of the Authority must be made following the opportunity for contested case procedures or be subject to judicial review or appeal. Due process is a flexible concept and calls for such procedural protections as a particular situation demands. The Authority believes the requirements of procedural due process are satisfied at a properly noticed open meeting where a holder of interim authorization status has the opportunity to voice its position on the withdrawal amount before such a decision is made by the board.

While the Authority does not agree with SAWS' proposal to eliminate paragraph (2) for the reasons stated above, it does believe the language requires modification to clarify the board's involvement in determining the withdrawal amount. Therefore, paragraph (2) has been modified to read:

(B) if the person is an applicant in a contested case hearing that has been pending before SOAH for a period of at least one year , an amount otherwise determined by the Board.

Public Comment No. 4:

Ptak commented that the phrase "otherwise determined by the Board" should be expanded or clarified. In addition, he proposes an addition to the rule of a performance audit for each permit issued by the Authority to ensure water is being used beneficially and is not being wasted.

Authority's Response:

The Authority staff received the above-referenced comment and agrees the rule should be modified to clarify the board's involvement in determining the withdrawal amount. Therefore, paragraph (2) has been modified to read:

(2) if the person is an applicant in a contested case hearing that has been pending before SOAH for a period of at least one year , an amount otherwise determined by the Board.

The Authority disagrees with Mr. Ptak's proposal to add provisions for a performance audit under interim authorization status because there is no need to duplicate procedures proposed in other rules. Section 711.414(b) in subchapter M (relating to Meters), requires persons with interim authorization status to file a written groundwater use report with the Authority. In addition, there are other sections authorizing the Authority to enter the land (§711.416) and to take enforcement action, if necessary, if withdrawals are not being metered properly (§711.420). These provisions will allow the Authority to monitor wells with interim authorization status to ensure that water withdrawn from the aquifer is beneficially used and not wasted. In light of this discussion, §711.70 has not been modified.

General

Public Comment No. 5:

TFB maintains that a takings impact statement ("TIA") was required before the Authority provided public notice of the proposed rules. According to TFB, the Texas Private Real Property Rights Preservation Act ("Property Rights Act") does not excuse the Authority from the requirements of the Property Right Act because the rights are not "vested" or because the Legislature has chosen to regulate those property rights. Furthermore, the TFB contends that property does not have to be vested to come within the purview of the Property Rights Act and, nonetheless, groundwater rights are vested rights requiring no perfection because they accompany the surface estate.

Authority's Response:

First, the Authority has made a "categorical determination" that these Chapter 711 rules do not affect vested property rights and, as such, adoption of these rules is not an action that "may result in a taking." The rules at issue here implement a program regulating aquifer withdrawals prior to the issuance of final permits by the Authority. The Act specifies an interim authorization period prior to the issuance by the Authority of final permits during which certain existing users of the aquifer may continue to make withdrawals. The Act imposes a number of restrictions upon the use of the aquifer during the interim authorization period. These rules are intended to effectuate these various components of the Act.

The Texas Private Real Property Rights Preservation Act makes it clear that a TIA need only be performed when the proposed governmental action is one that "may result in a taking." See id. , §§2007.043(a), 2007.041(a), 2007.042(a). If an action is one that has no potential to result in a taking, then no TIA need be performed. Adoption of the rules at issue here is not an action that "may result in a taking" for two reasons.

The rules cannot result in the taking of a vested private real property right. Traditional takings doctrine dictates that, in order to constitute a compensable taking, the property right alleged to have been "taken" must rise to the level of a vested right. Prior to the adoption of the Act, a landowner's right to pump groundwater underlying his or her property derived from the common law English Rule, also known as the "Rule of Capture." The proposed rules implement an interim authorization program during which groundwater withdrawals may be regulated and limited. This is arguably at odds with the Rule of Capture. However, a landowner's common law Rule of Capture right does not rise to the level of a vested property right. Under the common law, water underlying a landowner's property may be reduced to possession by the pumping of another. In other words, a landowner has no right to exclude others from the water underlying his land. As such, the landowner's expectancy of water does not rise to the level of a vested property right which could be "taken" by the passage of these rules and passage of these rules is not an action that may result in a taking.

Additionally, with respect to Edwards Aquifer water, any common law rights a landowner may have had in the past have been effectively abolished by the Legislature within the boundaries of the EAA by the passage of the Act. Under the old common law, a landowner was essentially free to drill a well and pump as much water as he pleased for whatever use and location of use he pleased. Passage of the Act changed the rules within the boundaries of the EAA. The basis for the right to withdraw groundwater under the Act changed from being an incident of the ownership of land to one generally based on use during the statutorily-defined "historical period." See Act §1.16. Excluding "exempt" wells, in order to operate an existing well during the interim authorization period, a landowner must have filed a timely permit application with the Authority and the well must be in compliance with all statutes and rules relating to well operation, construction, approval, location, and spacing. The quantity of withdrawals are limited and other restrictions apply. See Act §1.17. Regulation under the Act leaves no room for the common law to operate within the boundaries of the EAA with respect to Edwards Aquifer groundwater. As a result, there are no vested property rights which could be taken by the adoption of these rules and no TIA need be prepared.

Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(4) of the Texas Government Code. See §§1.03(9), (11), (12), (13), and (14), 1.08(a), 1.11(a), (b), and (h), 1.15(a) and (b), 1.16(c), 1.17, 133, of the Act,

This conclusion is supported by the decision in Edwards Aquifer Authority v. Bragg , 21 S.W.3d 375 (Tex. App.-San Antonio 2000, pet. filed) (" EAA v. Bragg "). In that case, the Plaintiffs sued to invalidate a set of rules adopted by the Authority (the "prior rules") which included rules substantially similar to these rules and which were designed, like these rules, to implement the Authority's interim authorization program. The Fourth Court of Appeals held that the Authority's adoption of its prior rules was expressly mandated by the Act and was therefore excepted from the operation of TPRPRPA. Id . at 379-80. The holding in that case controls here.

Third, it is the position of the Authority that all valid actions of the Authority are excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(11)(C) of the Texas Government Code as actions of a political subdivision taken under its statutory authority to prevent waste or protect the rights of owners of interest in groundwater.

Accordingly, for the reasons stated above, a TIA need not be performed in connection with the adoption of these rules.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." The Authority interprets this section to provide the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer during the interim authorization period.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under [article 1 of the Act], including rule governing procedures of the board and the authority." The Authority interprets this section to require the Authority to adopt rules to implement the various substantive and procedures programs set forth in the Act related to the Edwards Aquifer, including the interim authorization program.

¹ This March 1, 1994 date was changed by the Texas Supreme Court to December 28, 1996. See Barshop v. Medina Under. Wat. Cons. Dist., 925 S.W.2d 618 (Tex. 1996).

Section 1.17(d) of the Act specifies when use under interim authorization ends for a given well. The Authority interprets this section as defining when the interim authorization period ends.

§711.70.Interim Authorization Groundwater Withdrawal Amounts.

During a well's interim authorization period, a person owning a well qualifying for interim authorization status may withdraw on an annual basis an amount not to exceed the lesser of the following amounts:

(1)

the person's historical, maximum beneficial use claimed in §4B of a declaration; or

(2)

if the person is an applicant in a contested case hearing that has been pending before SOAH for a period of at least one year, an amount otherwise determined by the Board.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 28, 2000.

TRD-200009046

Gregory M. Ellis

General Manager

Edwards Aquifer Authority

Effective date: January 17, 2001

Proposal publication date: September 29, 2000

For further information, please call: (210) 222-2204

Subchapter H. ABANDONMENT AND CANCELLATION

31 TAC §§711.190, 711.192, 711.194, 711.198

The Edwards Aquifer Authority (the "Authority") adopts new 31 TAC §§711.190, 711.192, 711.194 and 711.198 (the "Chapter 711 Subchapter H rules") relating to the Authority's implementation of a Groundwater Withdrawal Permitting Program and the circumstances under which such permits may be abandoned. Sections 711.190, 711.192, 711.194 are adopted with changes to the proposed text as published in the September 29, 2000 issue of the Texas Register (25 Tex. Reg. 9886) and are republished herein. Section 711.198 is adopted without changes and will not be republished.

The Authority has elected not to adopt §§711.196, 711.200, 711.202 and 711.204 at this time and hereby withdraws these rules for permanent adoption.

The Edwards Aquifer Authority Act, Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 Texas General LAWS 2350, as amended by Act of May 28, 1995, 74th Legislature, Regular Session, Chapter 3189, 1995 Texas General LAWS 2505, Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 361, 1995 Texas General LAWS 3280, and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 Texas General LAWS 634 (the "Act"), requires the Authority to implement a permitting system whereby "existing users" of groundwater from the Edwards Aquifer (the "Aquifer") may apply for and receive initial regular permits issued by the Authority allowing for the withdrawal of groundwater from the Aquifer. The Act imposes a number of restrictions upon withdrawal from the Aquifer after permits are issued. The rules in Subchapter H of Chapter 711, 31 TEXAS ADMINISTRATIVE CODE, are intended to effectuate the components of the Act which deal with abandonment.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." The Authority interprets this section to provide the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the Aquifer, including the abandonment of groundwater withdrawal permits.

Section 1.11(a) of the Act provides that the Board of Directors of the Authority (the "Board") "shall adopt rules necessary to carry out the authority's powers and duties under this article (the Act), including rule governing procedures of the board and the authority." The Authority interprets this section to provide broad rulemaking authority to implement the various substantive and procedural programs set forth in the Act related to the Aquifer, including the abandonment of groundwater withdrawal permits.

Section 1.11(b) of the Act requires the Authority to "ensure compliance with permitting, metering, and reporting requirements and . . . regulate permits." The Authority interprets this section, in conjunction with §1.11(a) and (h) of the Act, and section 2001.004(1) of the APA, to require the Authority to adopt and enforce rules related to the abandonment of groundwater withdrawal permits.

Section 1.16(g) of the Act provides that initial regular permits do not have a term and remain in effect, among other things, until abandoned. The Authority interprets this section as authorizing the Authority to issue rules relative to the abandonment of groundwater withdrawal permits.

The Subchapter H Rules

Section 711.190 provides that the purposes of Subchapter H are to establish the criteria under which a groundwater withdrawal permit may be abandoned. The factual basis for this rule is the existence of §1.16(g) of the Act which provides for the abandonment of groundwater withdrawal permits.

Sections 711.192 and 711.194 provide that Subchapter H applies to the abandonment of any groundwater withdrawal permits. Section 711.192 simply clarifies that Subchapter H deals only with the abandonment of groundwater withdrawal permits. No other subject matter related to groundwater withdrawal permits is covered by this subchapter. The factual basis for this rule is the existence of section 1.16(g) of the Act which allows for the abandonment of initial regular permits. Section 711.194 states that all groundwater withdrawal permits issued are subject to abandonment. There are a variety of groundwater withdrawal permits which the Authority may issue: initial regular permits (see Act §1.16), additional regular permits (Act §1.18), term permits (Act §1.19), emergency permits (Act §1.20), recharge recovery permits (Act §§1.08(a) and 1.15(b), among other sections), and monitoring well permits (Act §1.15 (b)). The Authority has determined that there is no basis to distinguish between these types of groundwater withdrawal permits and their susceptibility to abandonment.

Section 711.198 provides that a permit holder may voluntarily enter into an order with the Authority declaring his or her abandonment of groundwater withdrawal permits. The factual basis for this rule is that it is necessary to establish a procedure by which to accomplish an abandonment. An agreed order provides an efficient and effective method to provide a legal basis to modify water accounting and permit records to reflect the abandonment.

1. the MER would "exceed" a standard set by federal law, unless the MER is specifically required by state law;

2. the MER would "exceed" an express requirement of state law, unless the MER is specifically required by federal law;

4. the MER is adopted solely under the "general powers" of the agency instead of under a specific state law.

The Act requires the Authority to implement a permitting system. At the same time, the Act requires the Authority to close abandoned wells, and to terminate permits which have been abandoned. The Subchapter H rules establish the criteria and procedures under which a declaration of abandonment may be entered by the Board evidencing the owners's present intent to discontinue permanently the withdrawal and beneficial use of all or part of the groundwater under his or her permit.

The Subchapter H rules are an integral part of a conventional water law-based regulatory program. The specific intent of Subchapter H is to encourage the beneficial use of groundwater, avoid speculation, and clear the water accounting records of the Authority to extinguish permits that are not being used. Therefore, the Subchapter H rules do not have the specific intent to "protect the environment" or "reduce risks to human health from environmental exposure" and they are not MERs.

Further, even if any of the Subchapter H rules were MERs, no RIAMER need be prepared because none of the rules meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the rules do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA for portions of the Edwards Aquifer. There is no federal law that specifically requires permitting for withdrawals of Edwards Aquifer groundwater or for abandonment of such permits. Therefore, the Subchapter H rules do not exceed a standard set by federal law. Moreover, even if the rules did exceed a standard set by federal law, the rules are specifically required by the Act, a state law which requires the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals, close abandoned wells, and cancel or retire abandoned or unused permits (pursuant to, inter alia , §§1.08(a), 1.11(a), (b), and 1.16(g) of the Act).

Second, the Subchapter H rules do not exceed an express requirement of state law. Instead, the rules are designed to carry out the Authority's statutory responsibility to: manage, conserve, preserve and protect the aquifer, adopt rules to carry out its powers and duties under the Act, to regulate permits, manage withdrawals, from the aquifer, require various types of permits for certain withdrawals, close abandoned wells, and cancel or retire abandoned or unused permits (pursuant to, inter alia , §§1.08(a), 1.11(a), (b), and 1.16(g) of the Act). The rules are designed to comply with these express requirements of state law and not exceed them. Other than the Act, there are no other "express requirements of state law" which could be exceeded by these rules.

Third, the Subchapter H rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of the rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the Subchapter H rules would not be adopted solely under the general powers of the Authority instead of under a specific state law. While these rules are adopted in part under the Authority's general powers, they are also adopted under the Act, a specific state law regarding the Edwards Aquifer. In particular, the rules are adopted pursuant to, inter alia , §§1.08(a), 1.11(a), (b), and 1.16(g) of the Act, which require the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals, close abandoned wells, and cancel or retire abandoned or unused permits.

For these reasons, it is not necessary to perform a RIAMER on the Subchapter H rules.

Five public hearings were held on the Chapter 711 Subchapter H rules and other rules proposed by the Authority on: Monday, October 2, 2000 at 6:00 p.m. at the conference center of the Edwards Aquifer Authority, 1615 N. St. Mary's Street, San Antonio, Texas; Tuesday, October 3, 2000 at 6:00 p.m., at St. Paul's Lutheran Church, 1303 Avenue M, Hondo, Texas; Wednesday, October 4, 2000 at 6:00 p.m., at the San Marcos Activity Center, 501 E. Hopkins, San Marcos, Texas; Wednesday, October 11, 2000 at 6:00 p.m., at the Sgt. Willie DeLeon Civic Center, 300 E. Main Street, Uvalde, Texas; and Thursday, October 12, 2000, at 6:00 p.m., at the New Braunfels Civic Center, 380 S. Seguin Avenue, New Braunfels, Texas.

The public comment period closed on October 30, 2000. Oral and/or written comments were provided by A. M. Rimkus ("Rimkus"), New Braunfels Utilities ("NBU"), Robert Grossenbacher ("Grossenbacher"), Liza Toombs ("Toombs"), Van Hardesty ("Hardesty"), Marvin Verstuyft of R& M Verstuyft Knippa Farms ("Verstuyft Farms"), Mary Troxclair ("M. Troxclair"), Noel Troxclair ("N. Troxclair"), Debbie Ward ("Ward"), Adah McGlothlin ("McGlothlin"), Mr. & Mrs. Eugene Verstuyft ("Verstuyfts"), Ray A. Dabney ("Dabney"), Frances B. "Ed" Stein ("Stein"), E. D. Kincaid, III ("Kincaid"), Bill Clayton ("Clayton"), Knoxie Johnson ("Johnson"), Tommy C. Walker ("Walker"), Judge Bill Mitchell ("Mitchell"), Robert L. and Mary Lou Gibson ("Gibsons"), Kenneth A. Haby ("Haby"), Linda Gilleland ("Gilleland"), Lawrence and Shirley Wilde of Wilde Farms ("Wilde Farms"), Marilyn Owens ("Owens"), John A. Cardwell of Cardwell & Hart ("Cardwell"), Joe R. Straus, Jr. of Straus Medina Ranch ("Straus"), Bickerstaff, Heath, Smiley, Pollan, Kever & McDaniel, L.L.P. on behalf of the Texas Farm Bureau ("TFB"), Janet Ruzza ("Ruzza"), San Antonio Water System ("SAWS"), City of Selma ("Selma"), L.C. Meyer on Behalf of A.M. Rimkus ("Meyer/Rimkus"), Andrew J. Aelvoet on behalf of Southwest Texas Federal Land Bank ("FLB"), Roy Luevano ("Luevano"), Bob Price ("Price"), Ronald J. Freeman on behalf of the Kleburg Family Trusts ("Kleburg Family"), Jimmy Carnes ("Carnes"), Rodney Reagan ("Reagan"), Vaughn Winn ("Winn"), Sammy Gugliotti ("Gugliotti"), Lawrence Friesenhahn ("Friesenhahn"), David Bishop ("Bishop"), Roberto Coleman ("Coleman"), Dietrich Gembler ("Gembler"), John Brigman ("Brigman"), Paul Edwards ("Edwards"), Jeanette Garcia ("Garcia"), Representative Tracy King ("Representative King"), Raphael Pineda ("Pineda"), Joe Ptak ("Ptak"), First State Bank of Uvalde (FSB), Dan Kowal ("Kowal"), Bo Farr ("Farr"), Collin Markt ("Markt"), David Archer for Del Monte Foods ("Del Monte"), and Jerry Bates ("Bates").

Section 711.190

Public Comment:

SAWS believes the proposed cancellation of permitted rights is anti-conservation and would not promote the maximum use of aquifer water, beneficial or otherwise. Therefore, SAWS recommends the rule relating to the purpose of subchapter H be modified to read:

The purpose of this subchapter is to promote the use of groundwater from the aquifer to its maximum benefit and establish the circumstances under which groundwater withdrawal permit may be abandoned.

Authority Response:

While the Authority does not agree with SAWS' comment, the comment is rendered moot in light of the fact that the Authority has decided to withdraw all rules relating to the cancellation of groundwater withdrawal permits at this time. In accordance with this withdrawal, the Authority has modified the rule to read:

The purpose of this subchapter is to establish the circumstances under which a groundwater withdrawal permit may be abandoned.

Section 711.194

Public Comment:

FLB believes the Legislature did not specifically empower the Authority to declare a permit abandoned without the permission of the permittee. Therefore, FLB requests that §711.194 which currently states:

All groundwater withdrawal permits issued shall be subject to cancellation or abandonment be modified to read:

All groundwater withdrawal permits may be cancelled with the consent of the permit holder and any lienholder of the property.

Authority Response:

The Authority does not agree with the comment made by FLB. However, the comment is rendered moot in light of the fact that the Authority has decided to withdraw the rules relating to the involuntary abandonment or cancellation of groundwater withdrawal permits at this time. In accordance with this withdrawal, the Authority has modified the rule to read:

All groundwater withdrawal permits issued shall be subject to abandonment.

Section 711.198

Public Comment:

FLB proposes that section 711.198 be revised to provide that before a declaration of abandonment of a groundwater withdrawal permit is considered by the board, there be prior notice given to any lienholders on that property. It further proposes that before any agreed order for declaration of abandonment of a groundwater withdrawal permit is entered, there be consent of the lienholder before it is accepted by the Authority and before the permit is actually abandoned.

Authority's Response:

The Authority received this comment and disagrees with it. The Authority is not obligated under statutory or common law to provide notice to lienholders of its intent to consider a declaration of abandonment or obtain the consent of lienholders before accepting a declaration of abandonment. It would be unduly burdensome to require the Authority to comply with such a rule. Because a voluntary abandonment requires board action, consideration of a declaration will be listed on the notices of meetings posted by the Authority. Any lienholder can review these notices on a regular basis to determine if a declaration is being considered. The lienholder may attend the meeting and present comments to the board before it makes a decision on the declaration. In light of this discussion, section 711.198 has not been modified.

Section 711.202

Public Comment:

FLB comments that the rule should be revised to provide that any unrestricted groundwater under an initial regular permit for irrigation purposes that is leased to a municipal or industrial user, is a beneficial use and, therefore, exempt from cancellation under subsection (a). FLB also proposes the addition of a new subsection to 711.202 that would read as follows:

(c) A groundwater withdrawal permit for irrigation use is exempt from cancellation under subsection (a) of this section if the water has not been withdrawn and put to beneficial use at any time during the ten year period immediately preceding the cancellation proceedings authorized by this subchapter if such nonuse is due to rainfall, other environmental conditions, or reasonable business or economic decisions made by the permit holder.

NBU also suggests that the Authority provide a waiver or exemption for municipalities with a dual water supply.

Authority's Response:

While the Authority does not agree with the comments, the comments are rendered moot in light of the fact that the Authority has decided to withdraw section 711.202 relating to cancellation of groundwater withdrawal permits at this time.

Sections 711.196, 711.200,711.202, 711.204

Subchapter H has been informally referred to as the "use it or lose it" rules. These rules include sections 711.196 and 711.202 which deal with the abandonment and cancellation of groundwater withdrawal permits based on nonuse, and sections 711.200 and 711.204 that relate to the initiation of proceedings by the general manger for abandonment and cancellation. The comments received by the Authority referred to this group of rules in several ways. Many commenters referred to them as the "use it or lose it" rules, while others referred to the "subchapter H" rules. Still others named the specific rule. For clarity, the Authority has organized these comments together and responds as follows.

Public Comments:

Representative King, Bates, Verstuyfts, Luevano, Coleman, Brigman, and Carnes generally oppose these rules.

Ptak comments that section 711.196 should place more emphasis on the abandonment of claims based on aquifer water not being used in the permitted manner but rather being squandered or hidden. Ptak proposes the rule be modified to include a provision that if water is not used for its stated use, then the right to the water is abandoned.

Hardesty, Kincaid, Clayton, Johnson, Grossenbacher, Rimkus, M. Troxclair, McGlothlin, Dabney, Wilde Farms, Cardwell, Pineda, Gugliotti, Toombs, Farr, Kleburg Family, N. Troxclair, and Meyer/Rimkus assert that subchapter H violates property rights or will negatively impact property values.

Verstuyft Farms, TFB, Gilleland, Gugliotti, Reagan, Kowal, Toombs, Farr, FLB, Markt, Kleburg Family, and Hardesty comment that the proposed rules exceed the power granted to the Authority and/or general manager by the Act.

SAWS, Wilde Farms, Straus, Toombs, Ward, Verstuyft Farms, Kincaid, Johnson, Walker, Hardesty, Price, Garcia, Friesenhahn, Winn, Bishop, Del Monte, Gembler, Owens, and FLB comment that the rules do not favor conservation but instead encourage waste.

N. Troxclair and Edwards comment on the Notice of Proposed Rule which studies the effects of the rules for the next five years. They believe it is not appropriate to examine only five years when the rules provide ten year time periods.

Mitchell comments that larger cities in the region are taking too much water from smaller cities. He states the rules are not the answer to water management matters.

Haby urges the Authority to consider factors such as health and weather conditions in regards to an irrigator's inability to use his permit limit.

Hardesty, Toombs and Verstuyft Farms argue that nonuse is not "waste."

FSB, Stein, Luevano, Ruzza, and the Gibsons comment that the rules do not show enough concern for the agricultural industry and will injure the ranching and farming industries.

Cardwell, Toombs, Selma, NBU, Markt, TFB, and Straus state the provisions are vague, require clarification, and/or may be arbitrarily enforced.

SAWS comments that it is inappropriate for the Authority to adopt rules that provide for involuntary abandonment or cancellation of rights. SAWS comments that abandonment of a right can only occur though a voluntary action by the owner of water rights and proposes the elimination of these rules. In addition, SAWS proposes the striking of all references to "cancellation" in subchapter H.

Authority's Response:

The Authority has received the above-referenced comments. While the Authority does not agree with the comments, the comments are rendered moot in light of the fact that the Authority has decided to withdraw all rules relating to the involuntary abandonment and cancellation of groundwater withdrawal permits (sections 711.196, 711.200, 711.202 and 711.204).

General

Public Comment:

Authority's Response:

First, the Authority has made a "categorical determination" that rules dealing with the abandonment of groundwater withdrawal permits issued by the Authority do not affect "private real property" as that term is defined in the Texas Private Real Property Rights Preservation Act. The Subchapter H rules delineate when groundwater withdrawal permits issued by the Authority may be abandoned. The withdrawal permits issued by the Authority derive not from the common law, but from a statute - the Act. Thus, they are not an "interest in real property recognized by common law," and the loss of such a permit does not affect private real property.

Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Texas Private Real Property Rights Preservation Act under Section 2007.003(b)(4) of the Texas Government Code. See §§1.08(a), 1.11(a), (b), and 1.16(g) of the Act.

This conclusion is supported by the decision in Edwards Aquifer Authority v. Bragg , 21 S.W.3d 375 (Tex. App.-San Antonio 2000, pet. filed)(" EAA v. Bragg "). In that case, the Plaintiffs sued to invalidate a set of rules adopted by the Authority (the "prior rules") which were designed to implement the Authority's permitting program. The Fourth Court of Appeals held that the Authority's adoption of its prior permitting rules was expressly mandated by the Act and was therefore excepted from the operation of the Texas Private Real Property Rights Preservation Act. Id . at 379-80. The holding in that case is relevant here.

Third, it is the position of the Authority that all valid actions of the Authority are excluded from the Texas Private Real Property Rights Preservation Act under Section 2007.003(b)(11)(C) of the Texas Government Code as actions of a political subdivision taken under its statutory authority to prevent waste or protect the rights of owners of interest in groundwater.

Accordingly, for the reasons stated above, a TIA need not be performed in connection with the adoption of these rules.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." The Authority interprets this section to provide the Authority with broad and general powers to take actions as necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the Aquifer, including the abandonment of groundwater withdrawal permits.

§711.190.Purpose.

The purpose of this subchapter is to establish the circumstances under which a groundwater withdrawal permit may be abandoned.

§711.192.Applicability.

This subchapter applies to the abandonment of any groundwater withdrawal permits.

§711.194.Permit Condition.

All groundwater withdrawal permits issued shall be subject to abandonment.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 28, 2000.

TRD-200009048

Gregory M. Ellis

General Manager

Edwards Aquifer Authority

Effective date: January 17, 2001

Proposal publication date: September 29, 2000

For further information, please call: (210) 222-2204

Subchapter K. ADDITIONAL GROUNDWATER SUPPLIES

31 TAC §§711.290, 711.292, 711.294, 711.296, 711.298, 711.300, 711.302, 711.304

The Edwards Aquifer Authority (the "Authority") adopts new 31 TAC §§ 711.290, 711.292, 711.294, 711.296, 711.298, 711.300, 711.302, and 711.304 (the "Chapter 711 Subchapter K rules") relating to the procedures for the Authority's governing board to utilize when determining whether to raise the "cap" governing how much water can be withdrawn from the Edwards Aquifer pursuant to certain permits issued by the Authority. Sections 711.292, 711.294, 711.302, 711.304 are adopted with changes to the proposed text as published in the September 29, 2000 issue of the Texas Register (25 TexReg 9892) and are republished herein. Sections 711.290, 711.296, 711.298, 711.300 are adopted without changes and will not be republished.

The Edwards Aquifer Authority Act, Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 TEXAS GENERAL LAWS 2350, as amended by Act of May 28, 1995, 74th Legislature, Regular Session, Chapter 3189, 1995 TEXAS GENERAL LAWS 2505, Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 361, 1995 TEXAS GENERAL LAWS 3280, and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 TEXAS GENERAL LAWS 634 (the "Act"), requires the Authority to implement a permitting system whereby "existing users" of groundwater from the Edwards Aquifer and other potential users of aquifer water may apply for and receive permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. The Act also mandates two withdrawal "caps." Initially, total permitted withdrawals for initial and additional regular permits may not exceed 450,000 acre-feet per year and, after January 1, 2008, total permitted withdrawals may not exceed 400,000 acre-feet per year. However, the Act also provides a mechanism whereby the Authority may, under appropriate circumstances, increase these 450,000 and 400,000 acre-feet withdrawal caps. The Act empowers the Authority to, at its discretion and under limited circumstances, increase these caps if, through studies, implementation of water management strategies, consultation with other federal and state agencies, and so on, the Authority determines that such an increase is warranted. Sections 711.290-711.304, the Chapter 711 Subchapter K rules, set out in more detail the criteria for and procedures by which the Authority may raise these withdrawal caps.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.11(a) of the Act provides that the Board of Directors of the Authority (the "Board") "shall adopt rules necessary to carry out the authority's powers and duties under this article (the Act), including rule governing procedures of the board and the authority." This section provides broad rulemaking authority to implement the various substantive and procedural programs set forth in the Act related to the Edwards Aquifer, including the permitting program.

Section 1.11(h) of the Act provides, among other things, that the Authority is "subject to" the Administrative Procedure Act (the "APA"). This section essentially provides that the Authority is required to comply with the APA for its rulemaking, even though the Authority is a political subdivision and not a state agency, and therefore, would typically not be subject to APA requirements. Section 2001.004(1) of the APA requires agencies subject to the APA to "adopt rules of practice stating the nature and requirements of all available formal and informal procedures."

Section 1.14(a) of the Act provides that authorizations to withdraw aquifer water shall be limited in order to: protect water quality of the aquifer and surface streams to which the aquifer contributes springflow; achieve water conservation; maximize beneficial use of water from the aquifer; protect aquatic and wildlife habitat as well as federally or state-designated threatened or endangered species; and provide for instream uses, bays and estuaries.

Section 1.14(b) of the Act imposes, subject to certain limitations, an initial aquifer withdrawal "cap" for permitted withdrawals of 450,000 acre-feet per year, until December 31, 2007. The Chapter 711 Subchapter K rules explain how this cap may, under appropriate circumstances, be raised by the Authority, and other procedural details.

Section 1.14(c) of the Act imposes, subject to certain limitations, an aquifer withdrawal "cap" for permitted withdrawals of 400,000 acre-feet per year, beginning January 1, 2008. The Chapter 711 Subchapter K rules explain how this cap may, under appropriate circumstances, be raised by the Authority, and other procedural details.

Section 1.14(d) of the Act provides that either of the caps listed above may be raised by the Authority if, through studies and implementation of certain strategies, the Authority, in consultation with state and federal agencies, determines the caps may be raised. Subchapter K sets out this process.

Section 1.15(a) of the Act directs the Authority to manage withdrawals from the aquifer and manage all withdrawal points from the aquifer as provided by the Act. This section is implemented, in part, through the Chapter 711 Subchapter K rules.

Section 1.44 of the Act allows the Authority to enter into cooperative contracts with other political subdivisions for artificial recharge projects and for possible additional withdrawals as a result of those projects. The section further provides, however, that such withdrawals are not subject to the withdrawal caps.

The Subchapter K Rules

Section 711.290 provides that the purpose of Subchapter K is to establish the procedures by which the board may determine whether there are additional groundwater supplies available to warrant raising the withdrawal caps. This purpose is derived from §1.14(d) of the Act and requires no further elaboration.

As originally proposed, §711.292 provided that the Subchapter K rules apply only to initial regular permits, additional regular permits, and recharge recovery permits. The Authority has revised this rule and now adopts it in modified form which states that the Subchapter K rules apply only to initial regular permits and additional regular permits. This change is needed to conform with the Authority's conclusion that only initial and additional regular permits are subject to the statutory withdrawal caps.

There are a variety of groundwater withdrawal permits which the Authority may issue: initial regular permits ( see Act §1.16), additional regular permits (Act §1.18), term permits (Act §1.19), emergency permits (Act §1.20), recharge recovery permits (Act §§1.08(a), 1.14(a), 1.15(a) and TEXAS WATER CODE, §36.113), and monitoring well permits (Act §§1.15(a) and (b)). The Authority, however, has determined that the "caps" in §1.14(b) and (c) are applicable only to initial and additional regular permits.

A review of §1.14(d) of the Act, which grants the Authority the discretion to raise the cap under appropriate circumstances, shows that the section may only apply to initial and additional regular permits. Section 1.14(b) and (c) of the Act, respectively, provide that the amounts of groundwater available for permitting are 450,000 acre-feet per year through December 31, 2007, and 400,000 acre-fee per year thereafter, unless either of the caps is increased by the Authority pursuant to §1.14(d). Section 1.14(b) and (c) do not specifically identify the groundwater withdrawal permits to which the "caps" apply. Those sections do not state that the caps apply to all permits. However, a review of the Act as a whole shows that the "caps" can logically only apply to initial and additional regular permits. In this analysis, it is important to consider the import of §§1.16(e), 1.18(a), 1.19, 1.20, 1.21(a) and 1.44(d) of the Act. The "cap" is made applicable to initial regular permits by §1.16(e) where it provide that, "to the extent water is available for permitting," certain permit amounts should be recognized and certain proportional adjustment procedures may need to be invoked. Section 1.16 addresses exclusively the issuance of initial regular permits. Section 1.18(a) provides that "to the extent water is available for permitting after the issuance of permits to existing users" (i.e. initial regular permits), then the Authority may issue additional regular permits.

On the other hand, neither §1.19 nor §1.20, relating to term and emergency permits, respectively, contain language such as "to the extent water is available for permitting" which would suggest an intent to subject those types of permits to the caps. Further, term and emergency permits are subjected to their own, independent limiting factors. Section 1.19 of the Act provides for interruption of withdrawals under term permits based on the triggering of certain index well water levels. Because of this interruptibility feature of term permits at higher aquifer levels (than initial and additional regular permits might otherwise be subject to) it is unnecessary to apply the caps in §1.14(b) and (c) to term permits. Section 1.20(d) specifically provides that withdrawals under emergency permits may be made "without regard to its effect on other permit holders." The Authority interprets this provision to mean that the issuance of emergency permits does not affect the permit allocation process under §1.14(b) and (c), the proportional adjustment process under §1.16(e), or the equal percentage reduction process under §1.21(c). Further, the strict criteria set forth in §1.20 for when emergency permits may be issued ("to prevent the loss of life or to prevent severe, imminent threats to the public health or safety") would be undermined if such permits were subject to the caps. If, for example, emergency permits were subject to the caps, then the Authority might be unable to issue such a permit to a given applicant (because the cap had already been achieved) even though the applicant needed the permit to prevent the loss of life. The Authority believes that such an outcome would be contrary to the legislative intent. Section 1.21(a) and (c) also reinforce the conclusion that the "caps" do not apply to term or emergency permits. Under subsection (a), the Authority is to prepare a plan to reduce withdrawal "under regular permits" to meet the cap. Similarly, subsection (c) establishes the process to reduce withdrawals "under regular permits" to reduce "each regular permit" to meet the cap.

The Authority has also concluded that the "caps" do not apply to monitoring well permits. Because of the nature and duration of withdrawals under monitoring well permits (i.e. generally low withdrawal amounts on an intermittent basis), there is little likelihood that these withdrawals will materially affect the water supply that will be available to the holders of regular permits. Moreover, monitoring well permit withdrawals are not likely to affect the performance of the Authority's other aquifer management programs. At the same time, it is critical that groundwater withdrawals necessary to perform monitoring well functions are available in sufficient quantities. Monitoring of the aquifer is critical to the long-term maintenance of the viability of the aquifer and the Authority's ability to manage the aquifer. Therefore, the Authority has determined that monitoring activities should not be constrained or made more difficult by the caps applied to other types of permits. Further, if monitoring wells were subject to the cap, then it could hinder the ability to monitor the ongoing well-being of the aquifer. If, for example, monitoring well permits were subject to the caps, then the Authority might be unable to issue such a permit to a given applicant (because the cap had already been achieved) even though the applicant (such as the TNRCC) needed the permit to investigate a potential case of contamination of the aquifer. The Authority believes that such an outcome would be contrary to the legislative intent.

Finally, the Authority does not generally believe that recharge recovery permits are subject to the caps. Section 1.44 of the Act empowers the Authority to authorize, under appropriate circumstances, political subdivisions to provide artificial recharge of the aquifer for the subsequent retrieval of the recharged water by the political subdivision. Such withdrawals, however, are expressly exempted from the withdrawal caps by §1.44(d). For these reasons, §711.292, as adopted, provides that the subchapter applies only to initial and additional regular permits.

Section 711.294 identifies water management strategies which, if implemented, may potentially provide a basis for increasing the withdrawal caps, including springflow augmentation, surface water diversions of the Guadalupe River downstream of Comal and San Marcos Springs, supplemental recharge of the aquifer, conjunctive management of surface and groundwater, and other water management strategies. These strategies are derived primarily directly from §§1.14(d) and 1.30 of the Act and require little elaboration. As originally proposed, there was a §711.294(b) which identified certain water management strategies that, if implemented, would arguably not provide a basis for increasing the caps -- conservation, reuse, and drought management plans. In response to public comments, and as discussed more below, the Authority has revised this rule and now adopts it in modified form which deletes subsection (b).

Section 711.296 requires the general manager to annually prepare and submit a report to the board identifying all ongoing or completed studies or implemented water management strategies related to the management and availability of water supplies from the aquifer. The section lists the items that must be included in the report, which includes a statement of the purpose of each study or strategy, a recommendation as to whether the study or strategy provides a technical basis to determine that additional supplies are available in the aquifer to warrant raising the cap, a recommendation as to the specific amount of additional groundwater, if any, available from the aquifer, and so on. The purpose of this requirement is to ensure that, when the board considers whether to raise the cap, it has before it the appropriate and relevant data. The rule is also intended to impart predictability and transparency to the decision-making process.

Section 711.298 identifies the procedures and criteria by which the board may issue an order determining that there is sufficient additional water to warrant raising the cap. Generally, the rule provides that the board may issue such an order if, after reviewing the general manager's report required by §711.196, it finds that sufficient studies and/or water management strategies have been completed or implemented, and the general manager's report demonstrates that additional supplies are present in the aquifer and may be withdrawn. These requirements are intended to ensure that the criteria set forth in §1.1.4(d) of the Act are met.

Section 711.300 mandates that, once a board order is issued pursuant to §711.298, the general manager must consult with appropriate state and federal agencies regarding the environmental impacts of increasing the cap, and prepare a report to the board summarizing the results of that consultation. This section is intended to formalize the consultation requirement found in §1.14(d) of the Act.

Section 711.302 identifies the criteria under which the board may issue an order increasing the cap. It may do so if: the board has issued an order determining that additional water supplies are available as required by §711.298; consultations have taken place with appropriate state and federal agencies; and the withdrawal of additional water from the aquifer will not adversely affect the aquifer's water quality, reduce key springflows to levels prohibited by applicable federal or state law, or interfere with the rights of initial regular permittees. The wording of §711.302(4) has been slightly revised to correct a typographical error by adding the word "Springs" after San Marcos. This rule is intended to ensure that the criteria set forth in §1.14(d) of the Act are met before the caps are raised.

Further, the Authority has obligations to limit withdrawals from the aquifer in order to: (1) protect the quality of water in the aquifer (Act §1.14(1)); (2) protect species that are designated as threatened or endangered under applicable federal or state law (Act §1.14(6)); and (3) protect the rights of holders of initial regular permits ( see Act §§1.14(e), 1.16; Barshop v. Medina County Underground Water Cons. Dist ., 925 S.W.2d 618, 624, 629, and 632 (Tex. 1996)). Section 711.302 is designed to ensure those duties will continue to be met if additional groundwater supplies are determined to be available.

In the event that the Board finds that there are additional groundwater supplies, and raises the caps accordingly, then §711.304 provides the methodology by which the additional groundwater may be allocated among aquifer users. This rule has been amended from the language as it was originally proposed in order to conform with the Authority's conclusion that only initial and additional regular permits are subject to the statutory withdrawal caps, and in order to ensure the consistent use of terminology throughout the Authority's rules.

As originally proposed, §711.304(1) provided that if the additional water is attributable to certain recharge and storage permits, then the additional groundwater will be allocated to the holder of the recharge recovery permit associated with the project. This provision has been deleted from the rule as adopted in order to conform with the Authority's conclusion, discussed more fully above, that only initial and additional regular permits are subject to the statutory withdrawal caps. The deletion of this subsection necessitated the renumbering of the remaining two paragraphs as (1) and (2).

As adopted, §711.304(1) provides that if the additional groundwater is attributable to water management strategies which are paid for by one or more entities other than the Authority, then the additional water will be allocated to the entity or entities paying for the strategy. Pursuant to §711.304(2), any additional water supplies which derive from projects paid for by the Authority will be allocated to restore, on a pro rata basis, any reductions from an applicant's maximum historical use, with first priority going to retirements of initial regular permits made pursuant to §1.21(c) of the Act and second priority going to any permit amounts proportionately adjusted pursuant to §711.172(g)(5) of the Authority's Chapter 711 rules. For example, if the Authority funds a project which results in additional water supplies becoming available and the cap being raised, then that additional water will be proportionally divided among initial regular permit holders to first restore, to the extent possible, permit retirements necessitated by §1.21(c) of the Act which mandates equal percentage reductions in order to achieve the reduction from the 450,000 acre-feet cap to the 400,000 acre-feet cap. Any remaining supplies will be used to restore the permit reductions mandated by §1.16(e) of the Act as implemented by §711.172 of the Authority's permitting rules.

The wording in §711.304(2) originally stated that the additional water will be used to restore reductions from any "applicant's" maximum historical use. However, the wording in the rule as adopted has been changed from "applicant's" to "initial regular permittee's." This change is intended to correct a typographical error in the rule as proposed. The proportional adjustment and equal percentage reduction processes have no effect until permits are issued. Thus, in order to avoid confusion, the change has been made to clarify that one must be an actual permit holder, not merely an applicant, before one can share in any restoration of permit amounts.

Section 711.304(2)(B) originally referenced the restoration of proportionally adjusted amounts under "§711.172(g)(5)." The Authority recently adopted §711.172 as a final rule. In doing so, it revised the text of that rule. Thus, the reference in §711.304(2)(B) necessitated updating. The reference is now to "§711.172(h)."

1. the MER would "exceed" a standard set by federal law, unless the MER is specifically required by state law;

2. the MER would "exceed" an express requirement of state law, unless the MER is specifically required by federal law;

4. the MER is adopted solely under the "general powers" of the agency instead of under a specific state law.

The Act requires the Authority to implement a permitting system. The Act also mandates that, initially, total permitted withdrawals may not exceed 450,000 acre-feet per year and, after January 1, 2008, total permitted withdrawals may not exceed 400,000 acre-feet per year. However, the Act provides a mechanism whereby the Authority may, under appropriate circumstances, increase these 450,000 and 400,000 acre-feet withdrawal caps. The Chapter 711 Subchapter K rules set out in more detail the criteria for and procedures by which the Authority may raise these withdrawal caps. The Authority has determined that these rules have the specific intent to protect the environment and, therefore, might constitute MERs if the other criteria set out in the definition of a MER in §2001.0225(g)(3) are satisfied.

However, without determining whether the Chapter 711 Subchapter K rules constitute MERs, the Authority has concluded that no RIAMER need be prepared for any of the Subchapter K rules because none of them meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the rules in Subchapter K do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA for portions of the Edwards Aquifer. There is no federal law that specifically requires permitting for withdrawals of Edwards Aquifer groundwater, permitting withdrawals caps, or methods to raise such permitting withdrawal caps. Therefore, the Subchapter K rules do not exceed a standard set by federal law. Moreover, even if the rules did exceed a standard set by federal law, the rules are specifically required by the Act, a state law which requires the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals; limit permitted withdrawals in accordance with the 450,000 and 400,000 acre-feet caps, and raise the caps under certain circumstances (pursuant to, inter alia , §§1.08(a), 1.11(a), (b) and (h), 1.14(a), (b), (c) and (d), and 1.15(a) of the Act).

Second, the Subchapter K rules do not exceed an express requirement of state law. Instead, the rules are designed to carry out the Authority's statutory responsibility to: manage, conserve, preserve and protect the aquifer, adopt rules to carry out its powers and duties under the Act, to regulate permits, manage withdrawals and points of withdrawals from the aquifer, require various types of permits for certain withdrawals, limit permitted withdrawals in accordance with the 450,000 and 400,000 acre-feet caps, and raise the caps under certain circumstances (pursuant to, inter alia , §§1.08(a), 1.11(a), (b) and (h), 1.14(a), (b), (c) and (d), and 1.15(a) of the Act). The rules are designed to comply with these express requirements of state law and not exceed them. Other than the Act, there are no other "express requirements of state law" which are applicable to these rules or which could be exceeded by these rules.

Third, the Subchapter K rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of the rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the Subchapter K rules would not be adopted solely under the general powers of the Authority instead of under a specific state law. While these rules are adopted in part under the Authority's general powers, they are also adopted under the Act, a specific state law regarding the Edwards Aquifer. In particular, the rules are adopted pursuant to, inter alia , §§1.08(a), 1.11(a), (b) and (h), 1.14(a), (b), (c) and (d), and 1.15(a) of the Act, which require the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals; limit permitted withdrawals in accordance with the 450,000 and 400,000 acre-feet caps, and raise the caps under certain circumstances.

For these reasons, it is not necessary to perform a RIAMER on the Subchapter K rules.

Five public hearings were held on the Chapter 711 Subchapter K rules and other rules proposed by the Authority on: Monday, October 2, 2000 at 6:00 p.m. at the conference center of the Edwards Aquifer Authority, 1615 N. St. Mary's Street, San Antonio, Texas; Tuesday, October 3, 2000 at 6:00 p.m., at St. Paul's Lutheran Church, 1303 Avenue M, Hondo, Texas; Wednesday, October 4, 2000 at 6:00 p.m., at the San Marcos Activity Center, 501 E. Hopkins, San Marcos, Texas; Wednesday, October 11, 2000 at 6:00 p.m., at the Sgt. Willie DeLeon Civic Center, 300 E. Main Street, Uvalde, Texas; and Thursday, October 12, 2000, at 6:00 p.m., at the New Braunfels Civic Center, 380 S. Seguin Avenue, New Braunfels, Texas.

The public comment period closed on October 30, 2000. Oral and/or written comments specifically on the Chapter 711 Subchapter K rules were provided by only one entity, San Antonio Water System ("SAWS"). Additional comments, which were more general in nature, were also received from other parties.

While the commenters generally did not express support or opposition to adoption of the Subchapter K Rules as a whole, they did, as discussed more fully below, suggest changes to and/or opposition to certain portions of the rules.

Section 711. 294

Public Comment:

SAWS suggests the deletion of §711.294(b), which. in the rule as proposed, identified certain water management strategies that the Authority has determined could not provide a basis for increasing the caps. SAWS asserts that §711.294 should speak only to water strategies that might be expected to provide additional groundwater supplies. According to SAWS, if the rules do not explicitly identify management strategies not presently expected to supply additional water, greater flexibility will result and future revisions to the rules might be avoided.

Authority Response:

The Authority agrees with this comment and has deleted subsection (b) in the rule as adopted. The Authority agrees that it is not necessary, at this time, to rule out potential water management strategies, and that it is preferable to maintain flexibility in considering such strategies in the future. Toward that end, the Authority has expanded the list of potential strategies that might provide a basis for raising the cap.

Section 711.300 and §711.302

Public Comment:

SAWS commented on §§711.300 and 711.302 concurrently. SAWS asserts that the Authority need not consult with either state or federal authorities when examining whether to raise the withdrawal caps. Therefore, SAWS seeks the total elimination of §711.300 and seeks changes to §711.302 as shown below:

Based on the general manager's additional water supply the board...

Also, SAWS requests the deletion of §711.302(2).

Authority Response:

The Authority staff received this comment and disagree with it. Section 1.14(d) explicitly requires that, if the Authority determines to raise the caps, it may do so only "in consultation with appropriate state and federal agencies." Thus, the Authority believes it is requires to engage in such consultations prior to raising the caps, and the Authority declines to revise the rules in response to these comments.

Public Comment:

SAWS asserts that neither federal nor state law establishes springflow levels for either the Comal or San Marcos Springs. Instead of an existing statute on this subject, SAWS asserts that a court would establish any such springflow restrictions. As a result, SAWS suggests the following change to §711.302(4):

(4) withdrawal of the additional groundwater supplies will not reduce springflows at Comal or San Marcos Springs; and

Authority Response:

The Authority declines to revise the rule in response to this comment. Pursuant to §1.14(6) of the Act, the Authority has a duty to limit aquifer withdrawals in order to "protect species listed as threatened or endangered under applicable federal or state law." There is much debate over whether state or federal law currently establishes, or in the future might establish, a springflow requirement in order to protect threatened or endangered species. Rule 711.302(4) does not attempt to settle that debate. Instead, it merely clarifies that if such a springflow requirement is applicable, then the cap cannot be raised if in doing so, those springflow requirements will not be met. This rule is consistent with the Authority's duty to protect threatened and endangered species dependent upon the springflows, as well as other statutory mandates of the Authority.

Comments on the Rules Generally

Public Comment:

Authority Response:

First, the Authority has made a "categorical determination" that these rules do not affect private real property in a way that "may result in a taking." The Texas Private Real Property Rights Preservation Act makes it clear that a TIA need only be performed when the proposed governmental action is one that "may result in a taking." See id ., §§2007.043(a), 2007.041(a), 2007.042(a). If an action is one that has no potential to result in a taking, then no TIA need be performed.

Adoption of the rules at issue here is not an action that "may result in a taking." The Act requires the Authority to implement a permitting system whereby existing users and other potential users of aquifer water may apply for and receive permits issued by the Authority allowing for the withdrawal of groundwater from the aquifer. The Act also limits the total amount of water which can be withdrawn pursuant to these permits by imposing two "caps" which permitted withdrawals may not exceed in any one year. The rules at issue here implement a process by which the caps may be raised, thereby making more water accessible to permit holders. The Authority believes, therefore, that the passage of these rules will not result in a taking.

Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Property Rights Act under §2007.003(b)(4) of the Texas Government Code. See §§1.08(a), 1.11(a), (b), and (h), 1.14(a), (b), (c), and (d), and 1.15(a) of the Act. This conclusion is supported by the decision in Edwards Aquifer Authority v. Bragg , 21 S.W.3d 375 (Tex. App.-San Antonio 2000, pet. denied) (" EAA v. Bragg "). In that case, the Plaintiffs sued to invalidate a set of rules adopted by the Authority (the "prior rules") which were designed to implement the Authority's permitting program. The Fourth Court of Appeals held that the Authority's adoption of its prior rules was expressly mandated by the Act and was therefore excepted from the operation of Property Rights Act.

Accordingly, for the reasons stated above, a TIA need not be performed in connection with the adoption of these rules.

Public Comment:

Lightning Oil urges the Authority to engage in seismic exploration program, before making any decisions, in order to provide a more accurate picture of the aquifer. The commenter contends the following organizations/institutions could plan and manage the program: municipalities, county and state government, the Authority, San Antonio Water System ("SAWS"), SARA, major oil companies, and private foundations.

Authority Response:

The Authority has reviewed this comment and concluded that no revisions to the Subchapter K rules is warranted in response to the comment. The Authority agrees with the suggestion that it is important to have an accurate understanding of the aquifer. The Authority currently has a considerable knowledge of the aquifer and continues to carry out and fund additional modeling and study of the aquifer in order to enhance its knowledge. However, the Authority believes it is appropriate to adopt the Subchapter K rules at this time. The types of seismic exploration mentioned by the commenter may be appropriate if and when the Authority determines whether to raise the withdrawal caps. Nothing in the Subchapter K rules would preclude such efforts at that time.

Public Comment:

Sharman asserts springflows do not have to flow naturally and use of pumps are appropriate. Therefore, Sharman believes springflows should be augmented. Furthermore, he maintains the aquifer will replenish itself, as it always has which makes the need for an additional water supply non-existent. Therefore, the payment of "huge" amounts of money for a federally mandated need is unnecessary. Finally, Sharman believes the Environmental Protection Agency, Fish and Wildlife Service, the Sierra Club, and the federal judiciary should refrain from interfering with the state of Texas.

Authority Response:

The Authority has reviewed this comment and concluded that no revisions to the Subchapter K rules is warranted in response to the comment. The use of "springflow augmentation," as suggested by the commenter, is the very type of effort which the Authority may consider if and when it considers whether to raise the withdrawal caps. Nothing in the Subchapter K rules would preclude consideration of such efforts issue at that time. The Authority has no control over the actions of the Sierra Club, Environmental Protection Agency, or Fish and Wildlife Service.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.11(a) of the Act provides that the Board of Directors of the Authority (the "Board") "shall adopt rules necessary to carry out the authority's powers and duties under this article (the Act), including rule governing procedures of the board and the authority." This section provides broad rulemaking authority to implement the various substantive and procedural programs set forth in the Act related to the Edwards Aquifer, including the permitting program.

Section 1.14(b) of the Act imposes, subject to certain limitations, an initial aquifer withdrawal "cap" for permitted withdrawals of 450,000 acre-feet per year, until December 31, 2007. The Chapter 711 Subchapter K rules explain how this cap may, under appropriate circumstances, be raised by the Authority, and other procedural details.

Section 1.14(c) of the Act imposes, subject to certain limitations, an aquifer withdrawal "cap" for permitted withdrawals of 400,000 acre-feet per year, beginning January 1, 2008. The Chapter 711 Subchapter K rules explain how this cap may, under appropriate circumstances, be raised by the Authority, and other procedural details.

§711.292.Applicability.

This subchapter applies only to:

(1)

initial regular permits; and

(2)

additional regular permits.

§711.294.Water Management Strategies.

The following water management strategies, if implemented, may potentially provide a basis to determine if there are additional groundwater supplies available from the aquifer to increase the amount of permitted withdrawals:

(1)

conservation;

(2)

springflow augmentation;

(3)

diversions of surface water downstream of Comal and San Marcos Springs pursuant to §1.30 of the act;

(4)

reuse;

(5)

supplemental recharge;

(6)

conjunctive management of surface and subsurface water;

(7)

drought management plans; and

(8)

other water management strategies that may result in additional groundwater supplies available for withdrawal from the aquifer.

§711.302.Board Order Increasing the Permitted Withdrawal Cap.

Based on the general manager's additional water supply report and the consultation report, the board may issue an order increasing the permitted withdrawal cap established in §711.164(a) and (b) of this chapter (relating to Groundwater Available for Permitted Withdrawals for Initial and Additional Regular Permits) if it finds that:

(1)

the board issued an order determining that additional supplies are available for withdrawal from the aquifer pursuant to §711.298 of this subchapter (relating to Board Order Finding Additional Water Supplies);

(2)

the general manager consulted with appropriate state and federal agencies concerning the proposed increase in the permitted withdrawal cap;

(3)

the withdrawal of the additional groundwater supplies will not adversely affect the water quality of the aquifer;

(4)

withdrawal of the additional groundwater supplies will not reduce springflows at Comal Springs and San Marcos Springs to levels prohibited by applicable federal or state law; and

(5)

withdrawal of the additional groundwater supplies will not interfere with the rights of the owners of initial regular permits.

§711.304.Allocation of Additional Groundwater Supplies.

If the board issues an order under §711.302 of this chapter (relating to Board Order Increasing the Permitted Withdrawal Cap), the additional groundwater shall be allocated as follows:

(1)

if the additional groundwater supplies are attributable to a water management strategy identified in §711.294(1)-(8) of this chapter (relating to Water Management Strategies) and the water management strategy is paid for by an entity other than the authority then the additional groundwater is allocated to the entity paying for the strategy. If multiple entities pay for the water management strategy, then the additional groundwater shall be allocated to those entities paying for the strategy on a pro rata basis consistent with their percentage contributions; or

(2)

if the additional groundwater supplies are attributable to a water management strategy identified in §711.294 of this chapter (relating to Water Management Strategies) and the water management strategy is paid for by the authority, then the additional groundwater is allocated to restore on a pro rata basis any reductions from an initial regular permittee's maximum historical use in the following order of priority:

(A)

retirements of initial regular permits made pursuant to §1.21(c) of the act and subchapter H (relating to Withdrawal Reductions and Regular Permit Retirement Rules) of chapter 715 (relating to Comprehensive Water Management Plan Implementation); and

(B)

any proportionally adjusted amounts under §711.172(h) of this chapter (relating to Proportional Adjustment of Initial Regular Permits).

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 28, 2000.

TRD-200009049

Gregory M. Ellis

General Manager

Edwards Aquifer Authority

Effective date: January 17, 2001

Proposal publication date: September 29, 2000

For further information, please call: (210) 222-2204

Subchapter L. TRANSFERS

31 TAC §§711.320, 711.322, 711.324, 711.326, 711.328, 711.330, 711.332, 711.334, 711.336, 711.338, 711.340, 711.342, 711.348, 711.350, 711.352, 711.354, 711.356, 711.358, 711.360, 711.362, 711.364

The Edwards Aquifer Authority ("Authority") adopts new 31 TAC §§711.320, 711.322, 711.324, 711.326, 711.328, 711.330, 711.332, 711.334, 711.336, 711.338, 711.340, 711.342, 711.348, 711.350, 711.352, 711.354, 711.356, 711.358, 711.360, 711.362, 711.364, relating to the Authority's implementation of a program for regulating the transfer of groundwater withdrawal permits, permit applications and interim authorization status. These transfer rules are an integral part of the Authority's Groundwater Withdrawal Permit Program. Sections 711.320, 711.322, 711.324, 711.326, 711.328, 711.338, 711.342, 711.352, and 711.364 are adopted with changes to the proposed text as published in the September 29, 2000 issue of the Texas Register (25 TexReg 9900). 711.330, 711.332, 711.334, 711.336, 711.340, 711.348, 711.350, 711.354, 711.356, 711.358, 711.360, and 711.362 are adopted without changes to the proposed text and will not be republished. Sections 711.344 and 711.346 are being withdrawn due to comments received and are not being adopted at this time. The Authority adopts these rules for the purpose of satisfying its statutory obligation to adopt rules necessary to carry out the Authority's power and duties under the Edwards Aquifer Authority Act. See Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 Texas General Laws 2350, 2358-59, as amended by Act of May 29, 1995, 74th Legislature, Regular Session, Chapter 261, 1995 Texas General Laws 2505, Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 524, 1995 Texas General Laws 3280, and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 Texas General Laws 634 ("Act").

The Act requires the Authority to implement a permitting system whereby "existing users" of groundwater from the Edwards Aquifer ("the Aquifer") and other potential users of aquifer water may apply for and receive permits issued by the Authority allowing for the withdrawal of groundwater from the Aquifer. The Act also specifies an "interim authorization" period prior to the issuance by the Authority of final initial regular permits during which existing users of the Aquifer may continue to make withdrawals until final action on permit applications by the Authority. The Act envisions a procedure whereby all or parts of these groundwater withdrawal permits, or interim authorization status, may be sold, leased, or otherwise transferred. It also places limits upon the transferability of certain interests. Sections 711.320-711.364 set forth the criteria and procedures by which groundwater withdrawal permits or interim authorization status may be transferred.

The Authority is required by the Act to implement Edwards Aquifer management programs relating to, among other things, transfers of groundwater withdrawal permits. Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under (Article 1 of the Act), including rules governing procedures of the board and the authority." This section directs the Board to adopt rules as necessary to implement the various substantive programs set forth in the Act. This duty to adopt rules would includes rules related to the Authority's regulation of transfers. This duty under §1.11(a) to adopt procedural and substantive rules for its programs is incorporated into the discussion below of each definition.

A primary manner in which these various groundwater management programs will be implemented by the Authority is through the adoption of rules for each program. Rulemaking has become essential for the operation of agencies charged by the legislative branch with programmatic implementation responsibilities. Thus while the Authority's activities are derived from express and implied powers set forth in the Act, the implementation of these powers is accomplished largely through rulemaking.

In addition to the practicality of program implementation through rulemaking, there are legal requirements set forth in the Act that governs the program development of the Authority. These legal requirements are pre-existing legal "facts" adopted by the Legislature through the adoption of the Act that bind the Authority because it is a creature of the Act. In addition, there may be other facts that operate to provide contours as to the development of the transfer rules that the Authority may choose to adopt. Both types of facts, legal and otherwise, may exist to provide a factual basis for the rule as adopted. The factual basis for the transfer rules, contained in subchapter L of chapter 711, 31 Texas Administrative Code and the rational connection between the factual basis for the rule and the rule as adopted are discussed below.

The factual basis for the definition for "base irrigation groundwater" ("BIG") in §711.320(1) is the pre-existing legal based on 1.34(c) of the Act which provides that 50 percent of an initial regular permit permittee's "remaining irrigation water rights must be used in accordance with the original permit and must pass with transfer of the irrigated land." The Act does not give a name to this part of an initial regular permit that is issued for irrigation purposes. In the transfer rules of the Authority, and in other documents in which it is appropriate to cite to this category of an initial regular permit that has transfer limitations, it will be necessary to refer to this category of water. The Authority has chosen to refer to this water as BIG. In light of §1.34(c)'s creation of limitation on the transferability of initial regular permit issued for irrigation purposes it is useful to adopt a short-form definition for this category of water, namely BIG, to mean the water referred to in the second sentence of §1.34(c) of the Act. In so doing, the need to continually refer to the lengthy and cumbersome descriptive language in §1.34(c) of the Act will be eliminated. This definition provides a rational connection between the pre-existing legal facts embodied in the second sentence of §1.34(c) of the Act and the definition of BIG because the definition accurately captures the substance of §1.34(c) of the Act.

The factual basis for the definition of "transfer" in §711.320(3) are derived initially from the pre-existing legal facts derived from the Act, as well as other facts that further determine the nature of the meaning of the term "transfer." The title of §1.34 of the Act is "Transfer of Rights." Section 1.34(a) prohibits the place of use from being located outside of the boundaries of the Authority. Section 1.34(b) provides for the sale of conserved water. Section 1.34(c) authorizes leases of 50 percent of the groundwater withdrawal amount of an initial regular permit issued for irrigation purposes, and limits the transferability of the place and purpose of use of the remaining 50 percent of such permits. The term "transfer" appears in §1.34(c) the Act. The concept of "transfer" will often be considered as part of the terminology used by the Authority in its procedural rules related to the transfer of groundwater withdrawal permits. The Act does not provide a definition for the term "transfer." Because this term is likely to be regularly used by the Authority in referring to transfers in its rules, the general facilitation of its procedures, in relation to the transfer of permits, and by the regulated community interacting with the Authority as transferors and transferees, as well, the Authority has determined that the definition of this term will be useful. A review of §1.34 shows that it refers to transfers as incorporating at least transfers of ownership, rights to make withdrawals, rights to place to beneficial use, place of use, and purpose of use. Transfers of the place of use also almost invariably result in the a transfer of the location of the point of withdrawal. If the transfer of the point of withdrawal is to an existing point of withdrawal an increase in the maximum rate of withdrawal may also result for the existing well. The Authority has not yet chosen to regulate the period of withdrawal and, therefore, this aspect of a potential transfer has been deleted from the definition. There is a rational connection between this factual basis and the definition of "transfer" in §711.320(5) because all of these aspects of a transfer have been incorporated into the definition of transfer.

The factual basis for the definition for "unrestricted irrigation groundwater" ("UIG") in §711.320(4) is the pre-existing legal fact that the first sentence of 1.34(c) of the Act provides that 50 percent of the groundwater withdrawal amount of an initial regular permit issued for irrigation purposes may be leased by the owner of the permit The Act does not give a name to this part of an initial regular permit that is issued for irrigation purposes. In the transfer rules of the Authority, and in other documents in which it is appropriate to cite to this category of an initial regular permit that has no transfer limitations, it will be necessary to refer to this category of water. The Authority has chosen to refer to this water as UIG. In light of §1.34(c)'s creation of no limitation on the transferability of this part of an initial regular permit issued for irrigation purposes it is useful to adopt a short-form definition for this category of water, namely UIG, to mean the water referred to in the first sentence of §1.34(c) of the Act. In so doing, the need to continually refer to the lengthy and cumbersome descriptive language in §1.34(c) of the Act will be eliminated. This definition provides a rational connection between the pre-existing legal facts embodied in the first sentence of §1.34(c) of the Act and the definition of UIG because the definition accurately captures the substance of §1.34(c) of the Act.

The factual basis for the definition for "water conservation equipment" in §711.320(5) is the pre-existing legal fact of 1.34(b) of the Act that provides that conserved water may be sold by the owner of a groundwater withdrawal permit after the installation of "water conservation equipment." This term is not defined by the Act. Because this term is likely to be regularly used by the Authority in referring to transfers in its rules, the general facilitation of its procedures, in relation to the transfer of permits, and by the regulated community interacting with the Authority as transferors and transferees, as well, the Authority has determined that the definition of this term will be useful. A review of §1.34(b) shows first that the equipment must be susceptible to being "installed." Thus, the equipment must be a tangible physical device that is capable to being affixed to or made part of the infrastructure of an irrigation delivery system. The Act gives no guidance as to the nature of the equipment, other than that the equipment must result in conservation of water. There is a rational connection between this factual basis and the definition of "water conservation equipment" in §711.320(6) because these aspects derived from §1.34(b) of the Act have been incorporated into the definition of transfer.

The factual basis for §711.322(a) lies in the fact that transfers are within the province of groundwater withdrawal permits. The basics elements of transfers-ownership, rights to make withdrawals, rights to place to beneficial use, place of use, purpose of use, point of withdrawal, and rate of withdrawal-all related to groundwater withdrawal permits. Because the Act provides special provisions for "interim authorization" withdrawals, it could not reasonably be expected that between the period of time from June 1, 1993 forward to the time when final initial regular permits will have been issued (an accomplishment which will have taken the Authority several years) that the water market envisioned by the Act would have remained static and the ownership of applications for initial regular permits would not have changed hands and other aspects of transfers may not have changed as well. Subsection (a) of §711.322 so provides that subchapter L applies only to transfers of groundwater withdrawal permits and interim authorization status. For that reason the Authority has added in §711.322(a)(3) the reference to term and emergency permits to make §711.322 consistent with §711.324(a). Also, in §711.322(a)(3) the reference to "aquifer recharge and storage permits" has been deleted because this permit does not authorize the withdrawal of groundwater.

The factual basis for §711.322(b) is that water services contracts do not generally result in transfers of ownership, place or purpose of use, or points of withdrawal. The typical water service contact normally is an agreement to deliver water through a pipeline to a master meter for the use of the entity contracting for the supply. The most likely transfer in this context would be a change in the place of use. This rule provides that if, in fact, a transfer would occur, then a water service contract would have to be processed as a transfer, while recognizing that most water service contracts are for retail or wholesale service with no transfers resulting. Additionally, this subsection notes that retirements of groundwater withdrawal permits are not transfers. The factual basis for this result is that the Authority does not take title to the ownership of the permits. A retirement of a permit is merely the elimination of the permit from the water accounting and permit records of the Authority usually based on the payment of compensation. There can be no transfer of any attribute of the permit because the permit is removed as an extant legal instrument from the Authority's records. Finally, this subsection also provides that suspensions of groundwater withdrawal permits are not transfers. The factual basis for this result is that suspensions are the cessation, for a prescribed period of time, of the right to withdraw groundwater from the Aquifer usually based on the payment of compensation. Neither the Authority, nor a third-party, takes title to the ownership of the permit. No other attribute of a permit is changed because merely the right to withdraw is temporarily suspended. No other third-party accedes to the right to withdraw.

Section 711.324 identifies the types of transfers that are prohibited. Subsection (a) provides that term, emergency, and monitoring well permits are only transferrable as to ownership. The factual basis for this rule is that each of these groundwater withdrawal permits tend to be very site or project specific. Any deviation from the set of facts that provided the basis for the Authority's issuance of the permit would essentially render the permit of doubtful value. If a person needed one of these permits for his site or project, he would be better served by simply filing an application for a new permit as may be appropriate. As for the non-transferability of exempt well status, this result necessarily follows because exempt well status is conferred only to the ownership of wells drilled on certain lands (assuming all applicable eligibility criteria are satisfied in §1.33 of the Act). Because the status attaches only to wells drilled on certain lands, exempt well status cannot be transferred except as to ownership of the lands in question. Because a well construction permit does not authorize the withdrawal of groundwater, the reference to this permit has been dropped from §711.324(a). The factual basis for subsection (b) is found in the pre-existing legal facts contained in §1.34(a) of the Act which prohibits out-of-Authority places of use. The factual basis for subsection (c) is found in the pre-existing legal facts contained in the second sentence of §1.34(c) of the Act which creates the appurtenancy of the place and purpose of use for BIG. The factual basis for the proviso in this subsection will be discussed in account of §711.338.

Section 711.326 provides that, for recharge recovery permits, only ownership, purpose of use and place of use may be transferred. The factual basis for this rule is that this permit tends to be very site or project specific. Any deviation from the set of facts that provided the basis for the Authority's issuance of the permit would essentially render the permit of doubtful value. If a person needed to transfer the point of withdrawal of a recharge recovery permit, he would be better served by simply filing an application for a new or amended recharge recovery permit as may be appropriate. The reference to "aquifer recharge and storage permits" has been deleted because this permit does not authorize the withdrawal of groundwater.

Section 711.328(a) provides that ownership of a regular permit may generally be transferred separately from ownership of the place of use or point of withdrawal. The factual basis for this subsection is that the Act creates no general prohibition on the transfer of a groundwater withdrawal permit separate from the place of use or point of withdrawal. Absent such a prohibition, the general rule favoring alienability would prevail. Subsection (b) also provides that transfer of ownership of the place of use or point of withdrawal will generally be presumed to transfer ownership of the regular permit, unless an express reservation of rights is made by the transferor. The factual basis for this subsection is that the intent of the parties as stated in the transaction documents should control disputes related to the transaction. If the transferor is silent in the transfer documents, then general rules would normally ascribe an intent to convey. Subsections (c) and (e) provide that ownership of BIG will pass with the transfer of ownership of the irrigated land owned by the owner of the original initial regular permit and may not be reserved to the landowner. Subsection (c) has been modified to clarify that the appurtenancy of BIG is attached to the irrigated land owned by the owner of the original initial regular permit. Subsection (d), on the other hand, provides that ownership of UIG need not necessarily pass with the transfer of ownership of the place of use or point of withdrawal. The factual basis for these two subsections is found in the pre-existing legal facts found in section 1.34(c) of the Act. If a transferor can transfer the place or purpose of use for all of UIG, there is no compelling reason that in the transfer of the ownership of the irrigated lands that the UIG could not be reserved to the transferor. The opposite for BIG is not at all the case in light of §1.34(c).

Section 711.330 provides that permittees and those qualifying for interim authorization status are entitled to make transfers of permit applications and associated interim authorization status or permits. The factual basis for this rule is that only the owner of a groundwater withdrawal permit or an application for an initial regular permit has the legal authority and capacity to make a transfer of the legal rights associated therewith.

Section 711.332 defines when and for what term transfers may be made. The factual basis for subsection (a) is grounded in the pre-existing legal facts embodied in §1.17(a) and (d) of the Act. A transfer of interim authorization status may quite clearly only be effective during the term of the interim authorization period as set forth in the Act. As for subsection (b) related to groundwater withdrawal permits, the term may begin only after the permit issued and may continue in effect only as provided by the transferor and transferee in the transaction documents as applied for in the application to transfer and amend as recognized in the Authority's approval of the transfer.

Section 711.334 provides that regular permittees are generally free to transfer non-irrigation permits without restrictions as to the place or purpose of use. The factual basis for this section is that the Act creates no general prohibition on the transfer of a groundwater withdrawal permits issued for non-irrigation purposes. Absent such a prohibition, the general rule favoring alienability would prevail.

Section 711.336 provides that regular permittees are generally free to transfer UIG without restrictions as to the place or purpose of use. The factual basis for these is found in the pre-existing legal facts found in §1.34(c) of the Act. This subsection authorizes a transferor to transfer the place or purpose of use of all of UIG. The Act creates no general prohibition on the transfer of a groundwater withdrawal permits issued for UIG. Absent such a prohibition, the general rule favoring alienability would prevail.

Section 711.338(a) prohibits the transfer of the place or purpose of use of the portion of an initial regular permit issued for BIG. The factual basis for this rule is found in the pre-existing legal facts contained in the second sentence of §1.34(c) of the Act which creates the appurtenancy of the place and purpose of use for BIG. The Authority interprets the appurtenancy rule to apply to the irrigated lands owned by the owner of the original initial regular permit which are recognized as the place of use therein. Because BIG must transfer with the ownership of the irrigated lands to which BIG is appurtenant, and the irrigated lands are owned by the transferor no useful purpose can be served by preventing the owner of the initial regular permit from transferring the place of use to another place of use owned by the same person. Because §1.34(c) only operates upon the transfer of the irrigated lands to a third-party transferor, this provides the factual basis for subsection (b) of this rule.

Section 711.340 provides that an application may be submitted to the Authority to convert BIG to UIG. The factual basis for subsection (a)(4) is that the irrigated land to which BIG is appurtenant may not always remain in irrigation. With the passage of time it may be developed such that irrigation is no longer possible. Under such a circumstance, if BIG is not authorized to be converted to UIG, then the owner of the developed (formerly) irrigated lands will own an initial regular permit for a place at which it is no longer possible to beneficially use the groundwater withdrawn from the Aquifer for irrigation. This would create the absurd result that the initial regular permit could not be transferred to another place or use for the same or another purpose of use. Additionally, the landowner would have made the decision to take the land out of irrigation agriculture and thereby remove its place in the market for this purpose. The Authority has no regulatory authority over the land use decisions of the owner of the irrigated lands. If the market had dictated through the decisions of the owner of the irrigated lands that the water was no longer needed for irrigation purposes, the Authority has no particular regulatory interest in preventing the transfer of the water to another place or purpose of use. The factual basis for subsection (a)(5) is the pre-existing legal fact of 1.34(b) of the Act that provides that conserved water may be sold by the owner of a groundwater withdrawal permit after the installation of water conservation equipment. This operation of this section ensures that the owner of a groundwater withdrawal permit who conserved groundwater withdrawals may not be considered to have abandoned that part of the permit because he no longer can beneficially use the conserved water for the originally permitted purpose of use. Section 1.34(b) of the Act does not necessarily limit itself to an irrigation purpose of use. However, neither §1.34 nor other sections of the Act place any transfer limitations on the transfer of the place or purpose of use of groundwater withdrawal amounts issued for non-irrigation purposes. Thus, other than rejecting the common law of the retention of the beneficial use of conserved water, and because 50 percent of initial regular permits issued for irrigation purposes is freely transferable as to place and purpose of use due to the operation of the first sentence of §1.34(c), §1.34(b) can only have an import as to its relationship to BIG. If water conservation equipment is installed such that the total amount of BIG is no longer required to accomplish the same amount of irrigation, the objective of the Legislature in enacting the second sentence of §1.34(c) of the Act in order to protect economies associated with irrigated agriculture is still served even if that part of BIG that is conserved is authorized to be transferred to another place or purpose of use. No meaningful useful purpose is served by not allowing the transfer of that part of BIG that is conserved under §1.34(b). This resolution of the interaction between these two subsections fosters the intent of both subsections. Because 50 percent of initial regular permits issued for irrigation purposes is freely transferable as to place and purpose of use, it is unnecessary to determine whether this water may be transferred due to the installation of water conservation equipment. Thus, the provision of procedures to authorize the conversion of BIG to UIG is reasonable to make the water available in the market for other uses at other places of use.

Section 711.342 sets out the criteria and procedure by which the board shall consider and approve an application to convert BIG to UIG. For the conversion to UIG, the board must find, primarily, that the land use has changed such that the land no longer can qualify for an agricultural land ad valorem property tax reduction, or that groundwater from the Aquifer will be conserved by the applicant's installation of water-conserving equipment on the property. The factual basis for this rule is described above in the discussion of §711.340.

Section 711.348 requires that the Authority be given notice within 30 days of the transfer of ownership of a permit or permit application, and sets forth the procedures to be followed by the general manager upon receipt of the notice. The factual basis for this rule is that, in order to properly manage and enforce permitted and interim authorization withdrawals, the Authority must have accurate and complete water accounting and permitting records. The only way it can reasonably attain the information from private sector transfers in the water market is to require that the transferee file notices of change of ownership with the Authority reasonably proximate to the date of the transaction. The 30-day period gives the transferee adequate time to prepare the notice of change of ownership yet timely provides the information to the Authority such that it can modify its records accordingly.

Section 711.350 requires that, for transfers of interests other than ownership, an application to transfer and amend a regular permit or application for a regular permit must be submitted to and approved by the Authority. The rule further provides that no transfer is generally effective until the Authority has issued a final order granting the application to transfer. The factual basis for this rule is that, in order to properly manage and enforce permitted and interim authorization withdrawals, the Authority must have accurate and complete water accounting and permitting records. The only way it can reasonably attain the information from private sector transfers in the water market is to require that the transferee file applications to transfer and amend with the Authority, and receive approval from the Authority prior to the transferee being authorized to make withdrawals pursuant to the transaction.

Section 711.352 sets out the criteria by which the board or general manager shall determine whether an application to transfer and amend a regular permit or application shall be granted. Among other things, the Authority must find either: (1) that the point of withdrawal of the permit is not transferred from a point west of Cibolo Creek to east of Cibolo Creek; or (2) if the point of withdrawal of a permit is transferred from a point west to east of Cibolo Creek, then that aquatic and wildlife habitat, as well as threatened and endangered species and springflows at Comal and San Marcos, will be protected. Transferring the point of withdrawal of permit from west Cibolo Creek to east of Cibolo Creek has the potential to negatively impact springflows at Comal and San Marcos Springs and their aquatic and wildlife habitats. If the radius of influence of a well or a well field encompasses flowpaths to these springs, withdrawal from those wells could decrease water levels in the aquifer and thus, decrease springflows. Additionally, the artesian zone of the aquifer east of Cibolo Creek is narrower, relative to west of Cibolo Creek. If withdrawal rates are allowed to increase in the narrow artesian zone area, the potential of negative impacts on artesian pressure and springflow will also increase. Cibolo Creek was also chosen as a boundary for greater scrutiny of transferring withdrawal points because it is an easily identifiable surface feature.

Section 711.354 requires the Authority to create and maintain a database of all transfers. The factual basis for this rule is that, in order to properly manage and enforce permitted and interim authorization withdrawals, the Authority must have accurate and complete water accounting and permitting records. The only way it can reasonably maintain such records is to create them in the first place.

Section 711.356 requires the transferee, within 30 days, to file a record of the transfer in the deed records of: (a) the counties in which the point of withdrawal and place of use are identified in the regular permit or application, and (b) the counties to which the point of withdrawal and place of use are transferred. The factual basis for this rule is that title insurance companies, real estate appraisers, taxing entities, and potential transferees, need an organized system to track transfers for each of their respective purposes. While the Authority will also maintain an accurate data base of transfers that are filed with it, local recordation will provide a more convenient and customary records management system that each of these entities can access for their purposes.

Section 711.358 provides that no transfer is effective until a notice has been filed with the Authority or the board has issued an order granting the transfer application. The factual basis for this rule is that, in order to properly manage and enforce permitted and interim authorization withdrawals, the Authority must have accurate and complete water accounting and permitting records. The only way it can reasonably maintain such records is for transferees to file the transfer transactions with the Authority. The best incentive for transferees to file such documents with the Authority will be for the Authority not to recognize the transfer for enforcement purposes until the transfer has been approved by the Authority. In creating a bright line rule for when a transfer becomes effective the Authority give notice to transferors and transferees of how it will maintain its water accounting and permitting records for purposes of enforcement of groundwater withdrawals.

Section 711.360 provides that all transfers are subject to the Act, the Authority's rules, any regular permit conditions, and all other applicable laws. The factual basis for this rule is that, as for any program of the Authority, relevant legal parameters applicable to transfers will apply to regulate the transfer transaction.

Section 711.362 provides that if a federal agency transfers its permit or application but continues to make withdrawals as if the transfer had not been made, then the board or general manager shall deny the transfer application. The factual basis for this rule is that a single legal authority may provide the basis for only a single entity to make withdrawals from the Aquifer. The Authority is unable to allow multiple withdrawal by multiple parties based on the same legal authority.

Section 711.364 requires the general manager to monitor the impact of certain transfers and, within two years of the effective date of the transfer rules, prepare a report to the board making findings and recommendations concerning the impacts. The primary concern of transferring large amounts of water within the aquifer system is the risk of impacting springflows at Comal and San Marcos Springs and their aquatic ecosystems. As indicated in the factual basis for rule 711.352, maintaining the maximum distance between major points of withdrawal and the springs will serve to abate possible negative effects on springflow. Periodic reports to the board regarding an assessment of any impacts of transfers will ensure that the impacts, if any, do not accumulate without notice.

The Authority has received public comments to the proposed rules and has prepared responses thereto as set forth below:

Five public hearings were held on these Chapter 711, Subchapter L rules and other rules proposed by the Authority on: Monday, October 2, 2000 at 6:00 p.m. at the conference center of the Edwards Aquifer Authority, 1615 N. St. Mary's Street, San Antonio, Texas; Tuesday, October 3, 2000 at 6:00 p.m., at St. Paul's Lutheran Church, 1303 Avenue M, Hondo, Texas; Wednesday, October 4, 2000 at 6:00 p.m., at the San Marcos Activity Center, 501 E. Hopkins, San Marcos, Texas; Wednesday, October 11, 2000 at 6:00 p.m., at the Sgt. Willie DeLeon Civic Center, 300 E. Main Street, Uvalde, Texas; and Thursday, October 12, 2000, at 6:00 p.m., at the New Braunfels Civic Center, 380 S. Seguin Avenue, New Braunfels, Texas.

Oral and/or written comments were provided by San Antonio Water System ("SAWS"), New Braunfels Utilities ("NBU"), Andrew J. Aelvoet on behalf of Southwest Texas Federal Land Bank Association ("FLB"), The City of Shertz ("Shertz"), Steve Kosub ("Kosub"), Patricia Verstuyft ("Verstuyft"), David Archer on behalf of Del Monte Foods, Texas Food Processors, and Texas Vegetable Association ("Archer"), and Howard D. Bye on behalf of the City of Selma ("Selma") and Texas Farm Bureau ("TFB").

Section 711.320:

Public Comment No. 1:

SAWS commented on several subsections of proposed §711.320.

Section 711.320(1):

SAWS's comments relate to the definition of "base irrigation groundwater ("BIG") in relation to proposed §§711.324 and 711.338 limitations on the transfer of BIG. According to SAWS, the Authority is exceeding its statutory authority by arbitrarily restricting the "purpose and place of use" of 50% of the authorized groundwater withdrawal amounts in initial regular permits ("IRP") for irrigation use. Specifically, SAWS points to §1.34 of the Edwards Aquifer Authority Act ² which states, in pertinent part, as follows:

² Act of May 30, 1993, 73rd Legislature, Regular Session, Chapter 626, 1993 Texas General Laws 2350; as amended by, Act of May 28, 1995, 74th Legislature, Regular Session, Chapter 261, 1995 Tex. Gen. Laws 2505; Act of May 16, 1995, 74th Legislature, Regular Session, Chapter 524, 1995 Texas General Laws 3280; and Act of May 6, 1999, 76th Legislature, Regular Session, Chapter 163, 1999 Texas General Laws 634.

(b) The authority may establish a procedure by which a person who installs water conservation equipment may sell the water conserved.

(c) A permit holder may lease permitted water rights, but a holder of a permit for irrigation use may not lease more than 50 percent of the irrigation rights initially permitted. The user's remaining irrigation water rights must be used in accordance with the original permit and must pass with transfer of the irrigated land.

SAWS believes this section implies that all rights are transferrable. Also, they maintain that subsection (b) of §1.34 is a "statutory revision to the common-law rule that conserved water may be transferred" while subsection (c), which SAWS maintains the Authority is relying on, only addresses leases. Therefore, SAWS asserts that because the Legislature did not address permanent transfers of ownership, but only leases, the canons of statutory construction dictate that the failure to address an issue, although a related issue may be addressed, should be given a purposeful construction. Alternatively, SAWS argues that if statutory authority exists as a basis for such a limitation, the limitation on the alienation of a landowner's right to transfer property, is without reasonable justification, and would be found unconstitutional.

Finally, SAWS contends the conclusions reached by the Authority in its rules assessment process and those expressed in the Public Benefit and Cost Note ("Note") for these rules differ. The Note states that Subchapter L will protect Edward Aquifer groundwater in a way that supports the economic region dependent upon it. Whereas, other rules assessment argue that free transfer of BIG would have no more impact on the regional economy than restricting their transfer.

Section 711.320 (2):

In reference to section 711.320(2), SAWS requests more flexibility in the definition of "conserved irrigation groundwater" ("CIG"). SAWS asserts that the conservation of groundwater may not necessarily occur due to installation of conservation equipment and suggests the following changes:

(2) Conserved irrigation groundwater-The amount, in acre-feet per annum, of base irrigation groundwater conserved, for which a final order...

Section 711.320 (4):

Regarding §711.320(4), SAWS suggests the use of a less restrictive term than "physically impossible" in the definition of "restricted irrigation groundwater" ("RIG").

Section 711.320(7):

SAWS contends that because the installation of conservation equipment may not result in the conservation of irrigation groundwater, the effect of conservation practices should not be excluded from §711.320(7). Therefore, SAWS requests that the following language be substituted for §711.320(7):

(7) the implementation of irrigation best management practices, as outlined in the Authority's groundwater conservation plan, or the installation of conservation equipment, which results in a quantifiable lesser amount of groundwater from the aquifer being required for irrigation purposes at the place of use identified in a regular permit, or an application for a regular permit.

Authority Response:

The Authority received the above-referenced comments and disagrees with them, in part, and agrees with them in part, although for differing rationale.

Relative to §711.320(1), the basis for this determination is that the comment of SAWS goes more to the transfer limitation contained in §711.324(c) and 711.338 rather than the nature of the definition of BIG in §711.320(1). SAWS does not recommend any particular changes to §711.320(1), other than by inference to eliminate this definition. Based on the Authority's response below to the comments to §§711.324(c) and 711.338, a definition for BIG would be required. In light of the above, the Authority has not modified §711.320(1).

Relative to SAWS' comment to §711.320(2), the basis for the this determination is that §1.34(b) of the Act requires that water may not be considered to be "conserved" unless "a person . . . installs water conservation equipment . . . ." (emphasis added). SAWS seems to be suggesting that the Authority may consider groundwater to be "conserved" even if water conservation equipment is not installed. As used in §1.34(b) of the Act, the term "installs" is readily construed to require the actual fitting, equipping or application of water conservation equipment that results in the conservation of water. Thus, it is logical to infer that water may be considered to be conserved only after water conservation equipment of some kind has actually been installed. Therefore, by referring to "after the installation of water conservation equipment," §711.320(2) more closely follows the meaning of the term "installs" as it is used in §1.34(b) of the Act. However, after review of this section, the Authority has determined that it is unnecessary because it is subsumed by the definition of UIG and the substantive conversion concepts related to conservation in §711.342(a)(5) (formerly 711.342(b)(4)). In light of the above, the Authority has deleted §711.320(2). Moreover, all references to "conserved irrigation groundwater" have been deleted from the rules in §§711.320(1)(B), 711.340, and 711.342 (b) (formerly 711.342(c)). Additionally, the separate conversion rules for conserved irrigation groundwater in subsection (b)(1)-(3) is no longer required and these subsections have been deleted. Finally, a review of the authorized place and purpose of use for BIG, after conversion to conserved irrigation groundwater, shows that conserved irrigation groundwater becomes indistinguishable from UIG. Therefore, §711.346 is longer required and has been deleted. The modifications are set out below in the final rules.

Relative to SAWS' comment to §711.320(4), the basis for this determination is that §1.34(c) of the Act provides, in relevant part, that a permittee's "remaining (50% of the groundwater withdrawal amount of an IRP issued for irrigation purposes) must be used in accordance with the original (initial regular) permit and must pass with transfer of the irrigated land (emphasis added)." The "irrigated land" referred to in §1.34(c) is the place of use identified in the original IRP. The Authority interprets these mandatory use and transfer requirements as creating an appurtenance to the place of use identified in the original IRP for irrigation purposes of the 50 percent of the groundwater withdrawal amount recognized in the IRP. Other than the "must use" and "shall pass" language employed in §1.34(c), the Act does not provide other guidance as to the nature or force of this appurtenance. However, the Authority interprets this rather strong language as creating an appurtenance that carries considerable force and should not otherwise be transferred separately and distinctly from the place of use of the original IRP for other than a very strong and compelling reason. SAWS comments that the "physically impossible" standard is too restrictive and should be relaxed, although it does not offer alternative language. The creation by the Legislature of this appurtenancy only for irrigation IRPs through such dominant language suggests an intent by the Legislature to provide a base amount of groundwater supply that is not subject to transfer from irrigation to municipal or industrial uses, absent extraordinary circumstances. The Legislature made such a provision in order to protect the economies within the jurisdiction of the Authority that are dependent on irrigated agriculture. The Authority had proposed a "physically impossible" standard for at least two reasons. First, the "physical impossibility" standard bears a reasonably substantial correlation to weight and gravity of the statutory language selected by the Legislature in §1.34(c) of the Act. Second, it will be physically impossible to apply the groundwater withdrawn from a well to the place of use of an irrigation IRP generally if the land use at the place of use has been irretrievably changed from irrigation to some other economic activity resulting in a change in the purpose of use to municipal or industrial. In so doing, the owner of the place of use will have evidenced his intent to retire from irrigated agriculture in favor of some other economic use at the place of use. The Authority has no regulatory authority over the economic use that may occur on a place of use owned by one of its permittees. Although, the Legislature, through §1.34(c) of the Act, has given the Authority the role of managing adequate quantities of groundwater (as determined by the Legislature through the 50 percent appurtenancy rule) to support irrigated agriculture, at least as long as the regional economy through the private sector's land use decisions deems this economic activity to be an important part of the economic mix for the region. As the private sector over time retires land from irrigated agriculture in favor of other economic uses, it is reasonable that the groundwater dedicated to this use under the 50 percent appurtenancy rule, would be capable of being to be freed up for other economic uses as the regional market may dictate. Moreover, once one of its irrigation permittees has made the business judgment to irretrievably withdraw land from irrigated agriculture in favor of a municipal or industrial use, then the Authority will need probative evidence on which to rely for this determination and thereby free up the groundwater for other economic uses. The best evidence of this will be the land use decisions made by the Authority's irrigation permittees. This probative evidence would have come in the form of the physical impossibility standard in §711.320(4) (now the change in land use standard). However, based on comments to 711.342 and §711.344, the Authority has determined that this section is no longer necessary because it is subsumed by the definition of UIG and the substantive conversion concepts related to change in land use in §711.342(a)(4) with further basis for this determination found below in the discussion of §711.344. In light of the above, the Authority has deleted §711.320(4).

Relative to SAWS' comment to §711.320(7), the basis for this determination is same as that provided in the discussion of §711.320(2). In light of the above, the Authority has not modified §711.320(7).

Sections 711.324; 711.326; 711.338

Public Comment No. 2:

SAWS maintains, in reference to §711.324(a), that the rules should not preclude aquifer storage and recovery projects that operate via leased wells. SAWS made this same comment in reference to §711.326 concurrently.

SAWS proposes altering §711.324(b) in light of the argument that many water utilities already have certificated areas outside the boundaries of the Authority. Therefore, water withdrawn from the aquifer may have previously been used outside the Authority's boundaries when the Act was passed. Due to potential commingling, SAWS contends future system extensions will either make monitoring difficult or require the duplication of infrastructure. SAWS requests the following change:

(b) The place of withdrawal for any permit or interim authorization status may not be transferred to a location outside the boundaries of the Authority.

Authority Response:

The Authority received the above-referenced comments and disagrees with them in part and agrees with them in part. Relative to §711.324(a), the basis for this determination is that no part of §711.324(a) relates to aquifer storage and recovery projects and therefore could not operate to preclude the use of leased wells for these projects. While §711.326 does bear on aquifer recharge, storage and recovery projects, again nothing in this rule precludes the use of leased wells. Upon review of §711.326, because aquifer storage and recovery permits do not authorize the withdrawal of groundwater the Authority agrees that reference to these permits should be deleted.

The basis for disagreeing with the SAWS proposal to alter §711.324(b) to substitute place of use with place of withdrawal is that this proposal would be contrary to §1.34(a) of the Act in which the Legislature instructed the Authority that "water withdrawn from the aquifer must be used within the boundaries of the authority." In light of the above, the Authority has not modified §711.324, but had modified §711. 326 accordingly as set forth below in the final rules.

Public Comment No. 3:

FLB objects to proposed rule §711.324(c) because it purportedly exceeds the scope of the Authority's power. According to the commenter, the Legislature did not intend to place a limitation on the transfer of BIG from one location to another. FLB suggests to following revision:

(c) the purpose of use for all or part of the base irrigation ground water component of either an initial regular permit or interim authorization status is not transferrable.

Authority Response:

The Authority received the above-referenced comment and agrees with the recommended change in part, although it disagrees with the rationale of the commenter. The basis for this determination is that as noted above in the discussion of the comments related to §711.320, by creating the appurtenancy rule in §1.34(c) of the Act, the Legislature evidenced its intent to provide a base amount of groundwater supply that is not subject to transfer from irrigation to municipal or industrial uses in order to protect the economies in the Edwards Aquifer region that are dependent on irrigated agriculture. However, the Legislature did not distinguish between the various subregions within the jurisdiction of the Authority, but instead focused on irrigated agriculture, regardless of the location of this activity within the boundaries of the Authority. The basic point of §1.34(c) is that groundwater should be available for irrigation purposes at the place of use identified in the original IRPs issued by the Authority. However, if a single owner owns more than one place of use at which the groundwater could be beneficially used for irrigation purposes, the purpose of the appurtenancy rule would not be served by prohibiting a transfer of BIG to another place of use owned by the owner of the BIG if the groundwater will continue to be used for irrigation purposes. Irrigation groundwater would continue to be used for irrigation purposes. However, if the owner of the place of use identified in the IRP to which BIG is appurtenant sought to transfer the ownership of the place of use, then the appurtenancy rule would control over the transfer of BIG to another place of use owned by the transferor and the transferee would acquire BIG due to the operation of §1.34(c) of the Act. In light of the above, the Authority has modified §§711.324 and 711.338 accordingly, as set out below in the final rules.

Public Comment No. 4

SAWS's comments relate to the definition of "base irrigation groundwater" ("BIG") in relation to proposed §§711.324 and 711.338 limitations on the transfer of BIG. According to SAWS, the Authority is exceeding its statutory authority by arbitrarily restricting the "purpose and place of use" of 50% of the authorized groundwater withdrawal amounts in initial regular permits ("IRP") for irrigation use. Specifically, SAWS points to §1.34 of the Act which states, in pertinent part, as follows:

(b) The authority may establish a procedure by which a person who installs water conservation equipment may sell the water conserved.

SAWS comments on these rules as they relate to limitations on the transferability of BIG. It is SAWS' position that there is no statutory authority for such a limitation and that the Authority relies on 1.34 of the Act to support these rules. However, that section refers only to leases of irrigation IRPs and not to a conveyance of an irrigation IRP other than by a lease. It maintains that there is no clear statutory authorization for a 50 percent limitation. SAWS suggests the Authority seek guidance from the Attorney General with regard to interpretation of the provision. SAWS also points out that the rules assessment analyzed the economic impact of the alternative which is to have no restriction on BIG and that the rules assessment advised the Authority that limitations on transfers does not protect the economy to any greater extent than removal of that provision altogether.

Authority Response:

The Authority received the above-referenced comments and disagrees with them. The basis for this determination is, as discussed above in the Authority response to Public Comment No. 1, the second sentence of §1.34(c) of the Act contains the Legislature's expression that limitations be placed on the transferability of the place and purpose of use of IRPs issued for irrigation use. In implementing this section of the Act, the Authority finds express statutory authority to restrict the transfer of the place and purpose of use of 50% of the groundwater amount authorized in an IRP for irrigation use. SAWS refers to §1.34(b) of the Act for the proposition that IRPs are generally transferrable because §1.34(b) modifies the common-law rule that conserved water may be transferred rather than lost back to the water resource for future appropriation due to the operation of principles of beneficial use law. The Authority generally agrees with this reading of §1.34(b). The Authority has implemented this section in proposed §§711.320(2), 711.340, 711.342, and 711.346. SAWS further comments that subsection (c) of §1.34 applies only to leases. While the Legislature, in the first sentence of §1.34(c), specifically addressed leases, the second sentence of this subsection necessarily applies to leases and sales. Consider the context in which the owner of an IRP for irrigation purposes (transferor) transfers, by a lease, the place and purpose of use of the unrestricted irrigation groundwater ("UIG"), leaving only BIG appurtenant to the place of use identified in the original IRP. The transferor (as the lessor) would retain a reversionary interest in the UIG, and full fee simple ownership interest in the BIG. The second sentence of subsection (c), however, would dictate that if the transferor transferred the place of use to a third-party (transferee), then irrespective of the transferor's reversionary interest in the UIG, BIG would nonetheless transfer to the transferee by operation of law. Based on §1.34(c), the transferor is without authority to alienate BIG from the original place of use. This same result would necessarily follow a priori in a sales context in which the transferor retains no property interest in UIG after its sale to a third-party. The transferor is without authority to separate the BIG from the original place of use by transfer. The transferor's fee simple interest in BIG would remain the same as if UIG had been leased. The lease or sale of UIG has no bearing on the nature of the ownership interest of the transferor in BIG, and its transferability is based on the second sentence of §1.34(c).

Whether the Legislature's restrictions on the transfer of the place or purpose of use of an IRP for irrigation purposes is constitutional is beyond the authority of the Authority to determine. Until otherwise directed by the judiciary, the Authority is to presume that its organic act is constitutional, including §1.34(c). The mission of the Authority is to faithfully implement the Act and not second-guess the legality of the Legislature's actions. The Authority will reserve that function to the courts where it appropriately lies. Relative to the conclusions contained in the rules assessment documents of the Authority, these documents are designed to aid the Authority in its decision-making process related to its rules adoption. The comments or conclusions in these assessments cannot provide a basis for the Authority to fail to implement a legislative mandate in its organic act. These assessments simply provide to the Authority additional information as to what may be the impacts to be expected in the implementation of the Act. Finally, the Authority declines to seek Attorney General guidance on this issue because this will only delay the implementation of the transfer rules, and yet, provide no definite resolution of the matter which can only be given by the courts. The Authority's duty is to interpret the Act through its implementation rules, which will then provide the basis for any challenge to the Authority's interpretation of the Act then may ensue. In light of the above, the Authority has not modified §§711.324 and 711.338.

Section 711.328:

Public Comment No. 5:

SAWS asserts that §711.328(c) is confusing and contradictory to other provisions. According to SAWS, water rights are conveyed through the ownership of wells. The provisions as written would require an elaborate mechanism for tracking the future ownership of land irrigated during the historical period. Therefore, SAWS requests the deletion of §711.328(c).

Authority Response:

The Authority received the above-referenced comment and disagrees with it in part, and agrees with it in part. The basis for this determination is that §711.328(c) clearly provides that if the place of use of an IRP for irrigation purposes is conveyed to a third-party transferee, then the third-party transferee will also transferal of ownership of BIG associated with the irrigation IRP that is appurtenant to the original place of use. The lack of clarity surrounds the issue of whether irrigated lands that may be recognized as the place of use in an original IRP are owned by the owner of the IRP, or merely leased. The rule has been modified to clarify that the appurtenancy of BIG applies to irrigated land owned by the owner of the IRP. The Authority is not aware of any other provisions of its transfer rules that this rule contradicts, nor does SAWS identify any such rules in its comments. Additionally, under the Authority's system of transfer for groundwater withdrawal permits provided in subchapter L, and contrary to the assertion of SAWS, IRPs may now be conveyed irrespective of the ownership of the point of diversion or place of use. See proposed §711.328(a). The only exception to this rule is the non-transferability of BIG from the place of use in the original IRP for irrigation purposes that is owned by the owner of the IRP. As for the creation of an "elaborate mechanism for tracking the future ownership of land irrigated during the historical period" the Authority notes that before any transfer is effective it must have been filed with and approved by the Authority. See proposed §711.358. Moreover, all transfers are required to be recorded in the deed records of the appropriate county. See proposed §711.356. Accordingly, the Authority has made modifications to proposed §711.328(c) as set out in the final rules below.

Public Comment No. 6:

FLB argues that §711.328(c) and (e) exceed the scope of authority permitted to the Authority by the Legislature. According to FLB, the Legislature intended to provide for the transfer of BIG to different locations. FLB seeks the deletions of §711.328(c) and (e). FLB also submits that §711.328(d) should be revised as follows:

(d) in a transfer of the ownership of the place of use or point of withdrawal identified in an initial regular permit, the ownership of all or part of the initial regular permit issued for irrigation ground water may be reserved to the transferor.

Authority Response:

The Authority received the above-referenced comment and disagrees with it. The basis for this determination is that the Authority has the statutory authority and duty to restrict the transfer of the place and purpose of use of an IRP for irrigation purposes pursuant to §1.34(c) of the Act. In addition, amending §711.328(d) to allow the reservation of the ownership of BIG in the transferor would be inconsistent with §1.34(c) of the Act. Accordingly, the Authority has not made modifications to proposed §711.328.

Section 711.332: Public Comment No. 7:

Kosub questions why §711.332(b) places time limits on transfers of regular permits. Authority Response:

The Authority received the above-referenced comment and disagrees with the comment to the extent that the comments recommends that the proposed rules be amended (which it does not so request). The commenter seems to be seeking a clarification of the intent of the rule. The basis for this determination is that the a regular permit may be transferred for a defined period of time under a lease, or permanently under a sale. This proposed rule accounts for both situations. The term may in fact be perpetual. Accordingly, the Authority has not made modifications to proposed §711.332.

Section 711.336:

Public Comment No. 8:

FLB explains that it has no objection to §711.336 if their revisions, proposed under §§711.328 and 711.342, are adopted.

Authority Response:

The Authority received the above-referenced comment and disagrees with it. The basis for this determination is as set out in the Authority's response to Public Comment No. 6. Accordingly, the Authority has not made modifications to proposed §711.336.

Section 711.338:

Public Comment No. 9:

FLB asserts §711.338 exceeds the scope of authority, permitted to the Authority, by the Legislature. The commenter maintains that the Legislature intended that all irrigation groundwater be transferrable and suggests the following revisions:

Except as provided in §711.324(b) of this Chapter (relating to prohibited transfers), without restriction as to the place of use, a permittee may transfer all or part of a Regular Permit issued for base irrigation groundwater, provided that the purpose of use of the base water transferred is limited to irrigation use.

Authority Response:

The Authority received the above-referenced comment and agrees with the recommended change in part, although it disagrees with the rationale of the commenter. The basis for this determination is same as the Authority's response to Public Comment No. 3. In light of the above, the Authority has modified §711.338 accordingly, as set out below in the final rules.

Section 711.342(a)(4)

Public Comment No. 10:

NBU comments that this rule allows for the transfer of BIG only if BIG is converted to restricted irrigation groundwater which is physically impossible to use at both the place of use and the purpose of use for which it was permitted. NBU asks whether BIG is transferrable if the property is developed, serviced by a municipality, and no longer able to be farmed. On the other hand, if the owner of a piece of property sells it for development, can he also transfer BIG to a municipality, for municipal purposes, in exchange for municipal water service to the land to be developed? NBU generally asserts the phrase "physically impossible," is too restrictive and suggests replacing the term with "will not be" placed to a beneficial use at the place and purpose of use "due to a change in the intended use of the property."

SAWS suggests deleting the phrase "physically impossible" from §711.342(a)(4) and replacing it with a less restrictive term, although the commenter provides no guidance on their views of what the less restrictive language might be.

In reference to §711.342(b)(4), SAWS contends that because the installation of conservation equipment may not result in the conservation of groundwater, the effect of conservation practices should not be excluded from §711.342(b)(4). SAWS requests the following changes:

(b)(4) groundwater from the aquifer will be conserved with the implementation of irrigation best management practices, as outlined in the Authority's Groundwater Conservation Plan or the installation of water conservation equipment.

Selma remarks that the proposed rules does not provide a definition for the term "physical impossibility" and seeks clarification of the rule in relation to land irrigated during the historical period and presently being converted to industrial and municipal uses. Also, the commenter asks the Authority to clarify at what point in the development process will the Authority consider irrigation use "physically impossible." Selma suggests modifying the proposed rule so that irrigation is deemed "physically impossible" when: (1) the plat is approved by the City (Selma), (2) Selma receives applications for building permits of any type from the developer; or (3) building permits are issued by Selma for the land.

Authority Response:

The Authority received the above-referenced comments and disagrees with them to the extent they request that the physical impossibility standard be relaxed and the installation of conservation equipment be modified. However, to the extent these comments request that the physical impossibility be clarified to reflect the intent of the Authority in proposing a physically impossible standard, the Authority agrees with the comments. The basis for this determination is as partially set out in the Authority's response to Public Comment No. 1. Basically, the intent of the 'physically impossible' standard was to provide the basis for the Authority to determine that the owner of the irrigated land had made an irretrievable land use decision to develop the lands from irrigated agriculture to a municipal or industrial use. Thus, the market would have dictated that these lands are no longer required for irrigated agriculture. Then logically, if the lands are no longer required for irrigated agriculture, the water appurtenant thereto is no longer required to support irrigated agriculture at this site. Because the Authority intended that 'physically impossible' equate to irretrievable change in land use, the Authority has modified the rule to clearly provide for this concept. The modification provides that if the land use at the site of the irrigated lands has changed such that the site no longer can qualify for an agricultural land use exemption, then BIG may be converted to UIG under §711.340.

Additionally, by way of explanation, BIG may be transferred if it is converted to either UIG. UIG is freely transferrable as to another place and purpose of use. See proposed §711.336.

NBU also inquires whether BIG is transferrable if the place of use is developed, serviced by a municipality and no longer able to be farmed. As long as the place of use is developed in such a way to lose its agriculture use property tax reduction, for example, by the construction of a housing subdivision, shopping mall, apartment complex, etc., then the Authority will consider the conversion criteria to have been satisfied. However, the mere transfer of ownership to a developer without attendant land use changes such that the land no longer can qualify for the property tax reduction, would not provide the basis for a conversion of BIG to UIG. The possibility of the land being transferred from the developer to a third-party due to future market conditions or other contingencies would yet remain. However, once the developer had constructed the improvements on the place of use such that the tax reduction is lost, then BIG could be converted to UIG. Concerning Selma's suggestion to modify the proposed rule so that irrigation is deemed "physically impossible" when plat approval has occurred, applications for building permits are received, and building permits are issued, the Authority is of the view that all of these acts, if they occur, and are followed up by actual improvements on the land will, lead to the determination that the land can not qualify for the agricultural land tax reduction. However, the Authority does not find that the rule requires modification to account for these acts. The development of irrigation land is a long process that culminates in the construction of improvements on the land, and thereby at the end of the process eventually renders the property ineligible for the tax exemption. Accordingly, the Authority has made modifications to proposed §711.342 as set out in the final rules below.

Section 711.344

Public Comment No. 11:

Verstuyft commented on the transfer rules. As proposed, the rules provide for the conversion of BIG to RIG. After such a conversion, the place of use can be changed to any other place in the county and the purpose of use may also be changed. The commenter proposes the rules be modified to allow water to be transferred out of the county. She further states that the rules should provide for the transfer of BIG.

Selma suggests replacing the language "within the same county as the place of use identified in the IRP" with "within the Authority's area." According to Selma, the restriction limiting transfers to uses within the same county is groundless. Selma suggests adopting either of the following revisions:

1) Add a sentence at the end of §711.344 to read as follows:

Notwithstanding the above, if a permittee transfers use of all or part of an initial regular permit for irrigation purposes converted to restricted irrigation groundwater to a municipally-owned utility with a certificate of convenience and necessity, the municipally-owned utility may use the water at any place within it certificated area.

2) Rewrite §711.344 to read as follows:

A permittee may transfer the place or purpose of use of all or part of an initial regular permit for irrigation purposes converted to restricted irrigation groundwater to another place or purpose of use, so long as the transferee uses all or part of the water within the same county as the place of use identified in the initial regular permit.

Authority's Response:

The Authority received the above-referenced comments and agrees with them in part, while disagreeing with the rationale. The basis for this determination is that §1.34(c) evidences the intent of the Legislature to reserve a base amount of groundwater for irrigated agricultural. However, this section does not otherwise indicate a geographic preference within the jurisdiction of the Authority for irrigation purposes. Moreover, the Legislature's intent to reserve an amount of groundwater for irrigation, due to the reference to "original" IRP in §1.34(c), seems to be limited to irrigation that existed during the historical period upon which the original IRPs where based. The Legislature did not seem to contemplate or provide for the circumstance when the original irrigated lands would be subsequently developed such that the appurtenancy of irrigation use provided for in the second sentence of §1.34(c) would be rendered without meaning because the land use at the site of the original irrigated lands was no longer susceptible to irrigation. In light of the above, the Authority has made modifications to proposed §711.344 to delete the county-of-origin and purpose of use limitations. With the elimination of these limitations on place and purpose of use, after conversion, restricted irrigation groundwater becomes indistinguishable from UIG. Therefore, §711.344 is longer required and has been withdrawn and will not be adopted. Moreover, all references to "restricted irrigation groundwater" have been deleted from the rules and replaced with UIG, as appropriate, in §§711.320(1)(B), 711.340, and 711.342(a) and (b) (formerly 711.342(c)). The modifications are set out below in the final rules.

Section 711.352:

Public Comment No. 12:

Schertz opposes adopting §711.352 because: (1) it purportedly arbitrarily restricts the normal and anticipated growth of the city of Schertz, and (2) the modifiers in §77.352(5)(B) are meaningless. Schertz asserts it must be able to use water east, which is drawn from wells west of Cibolo Creek, if it wants to maintain orderly growth. However, to obtain a permit for the transfer of water from west to east, the city would have to establish that aquatic life, wildlife, and endangered species will be protected. The springflows of the Comal and San Marcos Springs must also be maintained. Schertz contends that it knows of no recognized scientific method that would correlate this kind of water transfer to the protection of the interests described above. Therefore, the city argues that application for such a transfer is impossible. Selma maintains that additional rules for transferring water across Cibolo Creek causes increased difficulty in procuring Edwards water to serve customers economically. Selma requests amending §711.352(5)(B) so that the rule does not apply to municipalities providing municipal water service to certificated areas located on both sides of Cibolo Creek.

Authority Response:

The Authority received the above-referenced comments and disagrees with them. The basis for this determination is that the potential concentration of points of withdrawal closer to the orifices of Comal and San Marcos Springs may jeopardize the springflow protection programs of the Authority. Therefore, it is reasonable for the Authority to require additional evidentiary proof on issues that bear on the potential effect of transfers of points of withdrawal on springflows that the Authority has a statutory duty to maintain as may be required by federal or state law. This is the primary regulatory objective of the transfer regulation set forth in §711.352(5)(B). To create exceptions for certain water users with certain places of use, as suggested by the commenters, may potentially diminish the Authority's springflow protection program effectiveness if the points of withdrawal supplying the places of use are nonetheless concentrated to negatively affect springflow.

Relative to the argument that there is no recognized scientific method that would correlate transfers to the protection of the springflows, the commenter is under the misinterpretation that §711.352(5)(B) applies to the transfer of places of use, which it does not. This section only applies to transfers of points of withdrawal.

Section 711.356:

Public Comment No. 13:

SAWS maintains that recordation of IRPs may also include intermediate counties if a previous transfer in other than the county of origin has occurred. As a result, SAWS asserts that the Authority should require recording of all transfers so that a chain of title can be readily established and the title insurance issued.

Authority Response:

The Authority received the above-referenced comment and agrees with it although no change is required to be made to the rule. The basis for this determination is that §711.356 as written already requires all transfers to be recorded in the counties where the place of use or point of withdrawal is located. These places of recordation, in addition to the central transfer records of the Authority, will provide an adequate procedure to produce a complete chain of title for all transfers of IRPs. In light of the above, the Authority has not made modifications to proposed §711.356.

Section 711.364:

Public Comment No. 14:

SAWS contends the Authority's general manager should be required to report the effect of all transfers and requests the following changes to §711.364:

The general manager shall monitor the impact resulting from transfers issued pursuant to §711.352 of this title (relating to... .

Authority Response:

The Authority received the above-referenced comment and agrees with it. The basis for this determination is that the purpose of the transfer monitoring report in §711.364 is to provide information for the Authority to determine if there is a need to modify its transfer application processing procedures in order to better to support its springflow protection programs as may be required by federal or state law. This information acquisition objective generally applies irrespective of the nature of the transfer. In light of the above, the Authority has made modifications to proposed §711.364 accordingly, as set out below in the final rules.

General Comments:

Public Comment No. 15:

Archer commented on the right to transfer the purpose of use from irrigation to municipal uses. He suggests the rules be more strict and have some controls in place as to the amount of water being transferred out of irrigation.

Authority Response:

The Authority received the above-referenced comment and disagrees with it. The basis for this determination is that §1.34 of the Act basically governs the transfer restrictions that apply to IRPs for irrigation purposes. The objective of the Authority is to implement §1.34 through its rules in a way that effectuates the intent of the Legislature. The primary irrigation transfer restriction established by the Legislature is contained in §1.34(c) of the Act which limits the transferability of the BIG in certain circumstances. The Authority has drafted its transfer rules to implement this restriction. The Authority defers to the Legislature in its determination that the irrigation transfer restrictions in §1.34(c) are sufficient to accomplish the objectives of the Legislature in passing the Act. In light of the above, the Authority has not made other modifications to the proposed rules in subchapter L of chapter 711, relating to transfers.

Public Comment No. 16:

Verstuyft comments on the Local Employment Impact Statement ("LEIS") as it relates to rural counties. She believes land that is not irrigated will be less valuable than if it was irrigated, which in turn will reduce the tax base, especially in small rural counties. Ms. Verstuyft comments that the statement should show a greater impact on the small school districts and small tax base counties who will be hurt by the removal of agriculture from the tax base.

Authority's Response:

The Authority received the above-referenced comment and disagrees with it. The basis for this determination is that under §2001.022, TEXAS GOVERNMENT CODE, at the request of agencies engaging in proposed rulemaking, a LEIS may be prepared by the Texas Workforce Commission ("TWC") in connection with certain proposed rules. If the TWC does not prepare an LEIS (as was the case for these rules), §2001.022(e) creates a presumption that the proposed rules do not affect local employment. The requesting agency does not determine if the TWC will prepare an LEIS, or the contents thereof. Thus, the Authority has no control over the content of an LEIS prepared by the TWC. The Authority is, however, required to report in its notices of proposed rules the LEIS, if any, prepared by the TWC, which the Authority did in this case. In light of the above, the Authority has not made modifications to the LEIS.

Public Comment No. 17:

Authority's Response:

The Authority has received this comment and disagrees with it. Chapter 2007 of the Texas Government Code, the Property Rights Act (Texas Private Real Property Rights Preservation Act) referred to by the TFB, requires governmental entities, under certain circumstances, to prepare a takings impact assessment ("TIA") in connection with certain covered categories of proposed governmental actions. Based on the following reasons, the Authority has determined that it need not prepare a TIA in connection with the adoption of these rules.

First, the Authority has made a "categorical determination" that these proposed Chapter 711 Subchapter L rules do not affect "private real property" as that term is defined in the Texas Private Real Property Rights Preservation Act. The rules implement portions of the Act intended to place limits on the ability to transfer permits or interim authorization status. These permit and interim authorization interests are issued by the Authority and derive not from the common law, but from a statute -- the Act. Thus, they are not an "interest in real property recognized by the common law," and the regulating of transfers of permits or interim authorization status does not affect private real property.

Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Texas Private Real Property Rights Preservation Act under §2007.003(b)(4) of the Texas Government Code. See §§1.08(a), 1.11(a), (b) and (h), 1.15(a), 1.17(a), 1.22(a)(1), 1.24(c), 1.28(b), and 1.34 of the Act.

This conclusion is supported by the decision in Edwards Aquifer Authority v. Bragg , 21 S.W.3d 375 (Tex. App.-San Antonio 2000, pet. denied) (" EAA v. Bragg "). In that case, the Plaintiffs sued to invalidate a set of rules adopted by the Authority which were designed to implement the Authority's permitting program. The Fourth Court of Appeals held that the Authority's adoption of its permit rules was expressly mandated by the Act and was therefore excepted from the operation of TPRPRPA. Id. at 379-80. The reasoning in that case applies here.

Accordingly, for the reasons stated above, a TIA need not be performed in connection with the adoption of these rules.

Section 2001.0225 of the Texas Government Code requires an agency to perform, under certain circumstances, a regulatory analysis of "major environmental rules." The Authority has determined that these final rules are not "major environmental rules" as that term defined by §2001.0225(g)(3) of the Texas Government Code. The basis for this determination is that the final rules do not have the specific intent to "protect the environment" or "reduce risks to human health from environmental exposure." The Act requires the Authority to implement a permitting system. Prior to the issuance of these permits, the Act calls for an "interim authorization" period during which certain existing users may continue to withdraw and use aquifer water. The Act calls for a system whereby all or parts of these withdrawal permits and interim authorization status may be sold, leased, or otherwise transferred. The final Chapter 711 Subchapter L rules set forth the criteria and procedures by which permits or interim authorization status could be transferred. The Subchapter L rules are integral parts of a conventional water law-based regulatory program. The specific intent of Subchapter L is to encourage the marketing of permits and interim authorization status as commodities to transfer groundwater to the highest and best use within the jurisdiction of the Authority. The Authority has determined that only §711.352 has a specific intent to protect the environment and, therefore, might qualify as a MER if the other criteria for a MER which are set out in §2001.0225(g)(3) are satisfied. None of the other sections within Subchapter L have the specific intent to protect the environment or reduce risks to human health from environmental exposure and, therefore, they are not MERs.

However, without determining whether §711.352 constitutes a MER, the Authority has concluded that no RIAMER need be prepared for any of the Subchapter L rules because none of them meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the Subchapter L rules do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA. There is no federal law that specifically requires permitting or interim authorization status for withdrawals of Edwards Aquifer groundwater, or rules and procedures for the transfer of such interests. Therefore, the Subchapter L rules do not exceed a standard set by federal law. Moreover, even if the rules did exceed a standard set by federal law, the rules are specifically required by the Act, a state law which requires the Authority to, among other things: manage, conserve, preserve, and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals; allow for interim authorization withdrawals prior to permit issuance; require transfer to the Authority of a portion of permits for water conserved through conservation projects; limit transport of water out of Medina and Uvalde Counties; and regulate transfers of permits and interim authorization status (pursuant to, inter alia , §§1.08(a), 1.11(a), (b) and (h), 1.15(a), 1.17(a), 1.22(a)(1), 1.24(c), 1.28(b) and 1.34 of the Act).

Second, the final Subchapter L rules do not exceed an express requirement of state law. Instead, the final rules are designed to carry out the Authority's statutory responsibility to: manage, conserve, preserve and protect the aquifer, adopt rules to carry out its powers and duties under the Act, to regulate permits, manage withdrawal, and points of withdrawals from the aquifer, require various types of permits for certain withdrawals, allow for interim authorization withdrawals prior to permit issuance, require transfer to the Authority of a portion of permits and interim authorization status for water conserved through conservation projects, limit transport of water out of Medina and Uvalde Counties, and regulate transfers of permits (pursuant to, inter alia , §§1.08(a), 1.11(a), (b) and (h), 1.15(a), 1.17(a), 1.22(a)(1), 1.24(c), 1.28(b), 1.34 of the Act). The final rules are designed to comply with these express requirements of state law and not exceed them. Other than the Act, there are no other "express requirements of state law" which are applicable to these final rules or which could be exceeded by these final rules.

Third, the final Subchapter L rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of the final rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the final Subchapter L rules will not be adopted solely under the general powers of the Authority instead of under a specific state law. While these final rules are adopted in part under the Authority's general powers, they are also adopted under the Act, a specific state law regarding the Edwards Aquifer. In particular, the rules are adopted pursuant to, inter alia , §§1.08(a), 1.11(a), (b), (c), and (h), 1.15(a), 1.17(a), 1.22(a)(1), 1.24(c), 1.28(b), and 1.34 of the Act, which require the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; to regulate permits, manage withdrawals and points of withdrawals from the aquifer; require various types of permits for certain withdrawals; allow for interim authorization withdrawals prior to permit issuance; require transfer to the Authority of a portion of permits or interim authorization status for water conserved through conservation projects; limit transport of water out of Medina and Uvalde Counties; and regulate transfers of aquifer rights.

For these reasons, it is not necessary to perform a RIAMER on the final Subchapter L rules.

These final Chapter 711 Subchapter L rules are adopted pursuant to §§1.08(a), 1.11(a), (b) and (h), 1.15(a), 1.17(a), 1.22(a)(1), 1.24(c), 1.28(b), and 1.34 of the Act.

Section 1.08(a) of the Act provides that the Authority "has all of the powers, rights, and privileges necessary to manage, conserve, preserve, and protect the aquifer and to increase the recharge of, and prevent the waste or pollution of water in, the aquifer." The Authority interprets this section to provide the Authority with broad and general powers to take actions as necessary to manage the aquifer, among other things, including the implementation of a permit and interim authorization transfer program.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under (Article 1 of the Act), including rule governing procedures of the board and the authority." The Authority interprets this section to provide broad rulemaking authority to implement the various substantive and procedural groundwater resource management programs set forth in the Act, related to, among other things, including the transfer program.

Section 1.11(b) of the Act requires the Authority to "ensure compliance with permitting, metering, and reporting requirements and . . . regulate permits." The Authority interprets this section, in conjunction with §1.11(a) and (h) and §1.34 of the Act, and §2001.004(1) of the APA, to require that the Authority adopt and enforce transfer rules.

Section 1.11(h) of the Act provides, among other things, that the Authority is "subject to" the APA. The Authority interprets this section to provide that the Authority is required to comply with the APA for its rulemaking related to transfers, even though the Authority is a political subdivision and not a state agency that would generally be subject to APA requirements.

Section 1.15(a) of the Act directs the Authority to manage withdrawals from the Aquifer and manage all withdrawal points from the Aquifer as provided by the Act. The Authority interprets this section to authorize the management of withdrawals pursuant to transfers and the transfer of points of withdrawal.

Section 1.17(a) of the Act provides that a person who, on the effective date of this article, owns a producing well that withdraws water from the aquifer may continue to withdraw and beneficially use water without waste until final action on permits by the Authority, if: (1) the well is in compliance with all statutes and rules relating to well construction, approval, location, spacing, and operation; and (2) by March 1, 1994, (changed to December 28, 1996 by the Texas Supreme Court in Barshop v. Medina Under. Water Cons. Dist ., 925 S.W.618 (Tex. 1996)) the person files a declaration of historical use on a form as required by the Authority. Section 1.17(d) provides for the termination of interim authorization status. The Authority interprets these subsection as setting the start and end points for the terms of transfers of interim authorization status that may occur.

Section 1.22(a)(1) of the Act provides that the Authority may acquire groundwater withdrawal permit to be used for: holding in trust for sale or transfer to other users; holding in trust as a means of managing aquifer demand; holding for resale or retirement as a means of achieving pumping reductions required by the Act; or retiring the rights. The Authority interprets this section as authorizing the Authority to be a transferee of groundwater withdrawal permits or interim authorization status.

Section 1.24(c) allows the Authority to, among other things, issue a grant for a water conservation, reuse or management project and, in exchange, require the grant beneficiary to transfer to the Authority groundwater withdrawal permit Aquifer water equal to a portion of the water conserved or made available by the project. The Authority interprets this section as authorizing the Authority to be a transferee of groundwater withdrawal permits or interim authorization status.

Section 1.28(b) of the Act, in part, generally prohibits the transport of groundwater out of Uvalde County or Medina County. The Authority has not yet implemented this section of the Act through rulemaking.

Section 1.34 of the Act authorizes transfers and imposes certain limitations. The Authority interprets subsection (a) as authorizing the Authority to prohibit the place of use for Aquifer water to be outside the Authority's boundaries. Second, the Authority interprets subsection (b) to repudiate the common law rule against the beneficial use of conserved water and allow the Authority to establish rules by which a person may install water conservation equipment and sell the water conserved. Third, the Authority interprets the first sentence of subsection (c) to provide that the owner of an initial regular permit for irrigation use may transfer the place or purpose of not to exceed 50 percent of the groundwater withdrawal amount recognized in the original initial regular permit to any other place of use. The Authority also interprets the second sentence of subsection (c) to provide that the owner of an initial regular permit for irrigation use may not, absent extraordinary circumstances, transfer the place or purpose of use for the remaining 50 percent of the groundwater withdrawal amount to any other place of use, and that this amount becomes appurtenant to the irrigated lands (place of use) owned by the owner of the original initial regular permit and identified as such place of use in the permit.

§711.320.Definitions.

The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

(1)

base irrigation groundwater--The 50 percent portion, in acre-feet per annum, of the:

(A)

groundwater withdrawal amounts identified in §711.176 of this chapter (relating to Groundwater Withdrawal Amount of Initial Regular Permits: Compensation for Step-Up Amounts) for an initial regular permit; or

(B)

section 4B amount in a declaration, for interim authorization status, for irrigation purposes; which, unless converted to unrestricted groundwater pursuant to §711.340 of this Chapter (relating to Conversion of Base Irrigation Groundwater), must be used in accordance with the original initial regular permit and must pass with transfer of the ownership of the irrigated lands owned by the holder of the initial regular permit and identified as the place of use in such permit.

(2)

groundwater withdrawal amount--The amount of groundwater from the aquifer, in acre-feet per annum, which is authorized to be withdrawn under a regular permit issued by the board, or pursuant to interim authorization status, under §711.70 of this title (relating to Interim Authorization Groundwater Withdrawal Amounts).

(3)

transfer--A change in a regular permit, or application for regular permit, as follows:

(A)

ownership;

(B)

the person authorized to exercise the right to make withdrawals and place to beneficial use;

(C)

point(s) of withdrawal;

maximum rate of withdrawal.

(4)

unrestricted irrigation groundwater--The groundwater withdrawal amount for an initial regular permit, or interim authorization status, for irrigation purposes which is not base irrigation groundwater.

(5)

water conservation equipment--Any physical device the installation and operation of which results in less groundwater from the aquifer being required for irrigation purposes at the place of use identified in a regular permit, or an application for regular permit.

§711.322.Applicability.

(a)

This subchapter applies to transfers of the following:

(1)

applications for initial regular permits;

(2)

interim authorization status associated with applications for initial regular permits; and

(3)

initial regular, additional regular, term, emergency, monitoring well, and recharge recovery permits.

(b)

This subchapter does not apply to the:

(1)

wholesale or retail sale of groundwater on a commodity basis to a person under a utility service contract, water supply contract, or similar document, unless the implementation of the contract results in a transfer;

(2)

retirements of regular permits by the Authority; or

(3)

suspension of withdrawals under Subchapter D (relating to Demand Management) of chapter 715 (related to Comprehensive Water Management Plan Implementation).

§711.324.Prohibited Transfers.

(a)

Term, emergency, and monitoring well permits, and exempt well status are not transferable except for ownership,

(b)

The place of use for any permit or interim authorization status may not be transferred to a place of use located outside of the boundaries of the Authority.

(c)

Except as provided in §711.338 of this chapter (relating to Transfer of Base Irrigation Groundwater), the place or purpose of use for all or part of the base irrigation groundwater component of either an initial regular permit or interim authorization status is not transferrable.

§711.326.Recharge Recovery Permits.

Recharge recovery permits are transferrable only as to ownership, purpose of use, and place of use. Transfers of the point of withdrawal of a recharge recovery permit may be made by filing an application to amend a recharge recovery permit.

§711.328.Transfer of Ownership.

(a)

Except as provided in subsections (c) and (e), the ownership of a regular permit may be transferred separately from the ownership of a place of use or point of withdrawal.

(b)

Absent an express reservation of rights in the transferor, the transfer of ownership of the place of use or point of withdrawal for a regular permit is presumed to transfer ownership of the regular permit.

(c)

The ownership of all or part of an initial regular permit issued for base irrigation groundwater shall pass with the transfer of ownership of the irrigated lands owned by the holder of the initial regular permit and identified as the place of use in such permit.

(d)

In a transfer of the ownership of the place of use or point of withdrawal identified in an initial regular permit, the ownership of all or part of the initial regular permit issued for unrestricted irrigation groundwater may be reserved to the transferor.

(e)

In a transfer of the ownership of the place of use or point of withdrawal identified in an initial regular permit, the ownership of all or part of the initial regular permit issued for base irrigation groundwater may not be reserved to the transferor.

§711.338.Transfer of Base Irrigation Groundwater.

(a)

Except as provided in subsection (b), a permittee may not transfer the place or purpose of use for all or part of an initial regular permit issued for base irrigation groundwater.

(b)

A permittee may temporarily transfer the place of use for all or part of an initial regular permit issued for base irrigation groundwater to another place of use owned by the permittee. Such a temporary transfer becomes void if the permittee subsequently transfers the ownership of the place of use of the initial regular permit. Section 711.328 (c) of this chapter (relating to Transfer of Ownership) would then controls, and the base irrigation groundwater shall pass with the transfer of ownership of the irrigated lands identified as the place of use in the initial regular permit.

§711.342.Basis for Granting Applications to Convert Base Irrigation Groundwater.

(a)

The board shall grant an application to convert base irrigation groundwater to unrestricted irrigation groundwater if it finds that:

(1)

the application complies with the Act and the Authority rules;

(2)

all applicable fees have been paid; and

(3)

all applicable reports have been filed; and either

(4)

the land use for the irrigated lands identified as the place of use in an original initial regular permit is changed such that the irrigated lands can no longer qualify for an agricultural land ad valorem property tax reduction established by §23.55, TEXAS TAX CODE; or

(5)

groundwater from the aquifer will be conserved after the installation of water conservation equipment.

(b)

No transfer of base irrigation groundwater applied to be converted to unrestricted irrigation groundwater is effective until the board issues a final order granting an application to convert base irrigation groundwater.

§711.352.Basis for Granting Applications to Transfer and Amend.

The board, or, if delegated, the general manager, shall grant an application to transfer and amend a regular permit, or an application for a regular permit, if it finds that:

(1)

the application complies with the Act and the Authority's rules;

(2)

the application complies with the Authority's comprehensive management plan;

(3)

all applicable fees have been paid;

(4)

all applicable reports have been filed; and

(5)

the point of withdrawal of a regular permit is either:

(A)

not transferred from a point located west of Cibolo Creek to east of Cibolo Creek; or

(B)

transferred from a point located west of Cibolo Creek to east of Cibolo Creek, and

(i)

aquatic and wildlife habitat will be protected;

(ii)

species that are designated as threatened or endangered under applicable federal and state law will be protected;

(iii)

springflows of Comal Springs and San Marcos springs will not be affected during critical drought conditions; and

(iv)

continuous minimum springflows of the Comal Springs and San Marcos Springs will be maintained to protect endangered and threatened species to the extent required by federal law.

§711.364.Transfer Impact Monitoring Report.

The general manager shall monitor the impact resulting from transfers issued pursuant to §711.352 of this title (relating to Basis for Granting Application to Transfer and Amend). Not later than two years from the effective date of these rules, the general manager shall prepare a report to the board making findings and recommendations concerning such impacts.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 28, 2000.

TRD-200009050

Gregory M. Ellis

General Manager

Edwards Aquifer Authority

Effective date: January 17, 2001

Proposal publication date: September 29, 2000

For further information, please call: (210) 222-2204

Subchapter M. METERS; ALTERNATE MEASURING METHODS; AND REPORTING

31 TAC §§711.400, 711.402, 711.404, 711.406, 711.408, 711.410, 711.412, 711.414, 711.416, 711.418, 711.420

The Edwards Aquifer Authority (the "Authority") adopts new 31 TAC §§711.400, 711.402, 711.404, 711.406, 711.408, 711.410, 711.412, 711.414, 711.416, 711.418, and 711.420 (the "Chapter 711 Subchapter M" or "Subchapter M" rules) relating to meters, alternative measuring methods and reporting. Sections 711.402, 711.404, 711.406, 711.410, 711.412, 711.414, and 711.416 are adopted with changes to the proposed text as published in the September 29, 2000 issue of the Texas Register (25 TexReg 9910) and are republished herein. Sections 711.400, 711.408, 711.418, and 711.420 are adopted without changes and will not be republished.

The Subchapter M rules are adopted pursuant to §§1.08(a), 1.11(a), (b), (d)(2) and (h), 1.15(a), 1.31, 1.32, 1.33 and 1.36 of the Act and §§36.111, 36.123 and 49.221 of the Texas Water Code.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under (Article 1 of the Act), including rules governing procedures of the board and the authority." This section provides broad rulemaking authority to implement the various substantive and procedural programs set forth in the Act related to the Edwards Aquifer, including the permitting program.

Section 1.11(d)(2) of the Act empowers the Authority to enter into contracts. Pursuant to this section, the Authority may enter into contracts with well owners concerning meters and reimbursement for same under the Subchapter M rules.

Section 1.31 of the Act provides that nonexempt well owners must install and maintain meters or alternative measuring devices to measure the flow rate and cumulative amount of water withdrawn from each well. The section further provides that the Authority must pay for such meters on irrigation wells in existence on the effective date of the Act. These concepts are implemented in the Chapter 711 rules, primarily in Subchapter M.

Section 1.32 of the Act requires permittees to submit annual water use reports to the Authority. This section is implemented in Subchapter M.

Section 1.36 of the Act empowers the Authority to enter orders enforcing the terms and conditions of permits, orders, or rules, and to draft rules suspending permits for failure to pay required fees or violations of permits, orders or rules. These concepts are implemented, in part, by the Chapter 711 Subchapter M rules.

Chapter 36 of the Texas Water Code generally applies to groundwater districts such as the Authority. Section 36.111 requires the Authority to require aquifer users to keep and maintain reports of drilling, equipping, and completing water wells and the production and uses of groundwater. The Chapter 711 Subchapter M rules help implement these requirements.

Section 36.123 of the Texas Water Code empowers representatives of the Authority to enter land and perform tests and other inspections. The Chapter 711 Subchapter M rules help implement this authority.

Chapter 49 of the Texas Water Code generally applies to groundwater districts such as the Authority. Section 49.221 empowers representatives of the Authority to enter land and perform tests and other inspections. The Chapter 711 Subchapter M rules help implement this authority.

The Subchapter M Rules

Section 711.400 states the general applicability of Subchapter M, which provides and establishes requirements related to the metering or measuring of the amount of groundwater withdrawn from the Edwards Aquifer and the reporting of information which results from that metering to the Authority. Section 711.400 essentially reflects and reiterates the requirement stated in §1.31 of the Act, that the owner of a nonexempt well that withdraws water from the aquifer install and maintain a measuring device approved by the authority, and §1.33 of the Act which exempts certain wells from such metering requirements. These statutory requirements constitute the basis for §711.400.

Section 711.402 states the basic duty that well owners must install and operate a meter or approved alternative measuring device (AMD) to measure the flow rate and cumulative amount water withdrawn from the well. These requirements are derived directly from 1.31 of the Act. Section 711.402 also requires that a meter be installed within six months of the effective date of the rules but exempts the Authority's meters from this deadline. The Authority believes that six months provides a sufficient time for a meter to be installed. The exemption for meters that the Authority is required to install, is based on the fact that the Authority may be required to install over 600 meters on wells owned by others. Section 711.402 further specifies that the meters must be installed, operated, maintained, and repaired in accordance with the manufacturer's standards and shall ensure an error of not greater than plus or minus five percent. The Authority believes that requiring users to meet manufacturer's standards is the best way to insure that a meter will work property. Also, a five percent error is generally accepted in the context of flow measurement. Although new meters can normally achieve an accuracy rate of plus or minus two percent, maintaining such a level of accuracy is impracticable. Finally, this section, as modified, provides that permitted non-irrigation wells from which exempt withdrawals are allowed under §711.46(b) of the Authority's rules must be constructed so that permitted and exempt withdrawals are metered separately and not commingled. The basis for rule is to allow the Authority to assure compliance with the 25,000 gallons per day limitation for exempt withdrawals. For exempt wells, compliance with this limitation is assured by requiring that such wells be incapable of exceeding the 25,000 gallon per day limitation. The Authority cannot assure compliance with the 25,000 gallon per day limitation in the same manner with respect to exempt withdrawals allowed from permitted irrigation wells pursuant to §711.46(b). Therefore, in order to allow such withdrawals pursuant to §711.46(b), assure compliance with the 25,000 gallon per day limitation on exempt withdrawals, and to be able to accurately determine the amount of permitted withdrawals from such irrigation wells, the Authority requires that exempt withdrawals under such circumstances be metered separately and to prohibit commingling of the permitted and exempt withdrawals.

Section 711.404 states the general rule that the owner of the well shall be the person who is responsible for the installation, maintenance, operation and repair of the meter. The exception to this rule is for irrigation wells in existence on September 1, 1993. For such wells, the meter shall be installed and maintained by the Authority. In any event, the operation of a meter shall be the responsibility of the well owner. These provisions reflect and are mandated by §1.31 of the Act. §711.404 also provides that, for meters installed by the Authority on irrigation wells, if the well owner transfers any part of the purpose of use of the water from the well to a purpose other than irrigation, then the own must reimburse the Authority for all or a portion of the cost of the meter or install a replacement meter. The Authority believes that if a well formerly used for irrigation becomes, in whole or in part, a well used for a purpose other than irrigation, the protection offered by 1.31(b) of the Act should no longer apply to the extent that the well is used for the other purpose.

Section 711.406 provides that no meter may be installed or modified without first filing an application with the Authority and receiving written approval. The section also states the criteria by which the general manager shall judge the application. Among the criteria is the requirement that the meter have a certified error of not greater than plus or minus five percent. A five percent error is an accepted industry standard for municipal and industrial wells. According to the AWWA (American Water Works Association) Manual of Water Supply Practices, manufacturers of propeller type meters indicate that, with wear, a properly installed, properly functioning meter can be expected to have accuracy at this level. Another criteria is that the meter must meet AWWA standards for design, materials, and accuracy. AWWA standards are consistent with American National Standards Institute/National Sanitation Foundation (ANSI/NSF) Standard 61 and have been adopted by the Authority because AWWA and its members have extensively studied questions related to meter installation, maintenance and accuracy. Another criteria is that the meter must have a non-resettable totalizer. An non-resettable totalizer is necessary to keep the meter from being reset to zero. This is necessary to allow users to report and the Authority to monitor continuous total withdrawals. Another criteria is that the totalizing register of the meter must have the capacity to record the amount of groundwater withdrawn in a year. Groundwater must be reported on an annual basis. Meter "roll-over" can cause reporting errors on annual reporting. The section also requires that notice be given to the Authority within five days after the installation or modification of a meter so that the Authority can perform an inspection. The Authority must be able to determine, as soon as possible, whether installation is proper in order to insure that the meter is properly measuring flow.

Section 711.408 requires users with existing meters to register their meters with the Authority within six months of the effective date of these rules. The section also provides that meters will be approved if they meet the criteria in §711.406(b), which are also the criteria that apply to new meters. The Authority believes that all meters, new and existing, should be required to meet the same criteria. Section 711.408 also allows owners of certain irrigation wells who have paid for the installation of a meter to request reimbursement from the Authority. The Authority believes that this provision implements the intent behind §1.31(b) of the Act and provides the Authority with a more economical option than purchasing and installing all new meters.

Section 711.410 requires the owner of a well who believes that his or her meter may be inaccurate to notify the Authority of this fact within seven days. The Authority may then inspect and require testing of the meter and take corrective action. The Authority believes that this requirement is necessary in order to insure that meters maintain their accuracy.

Section 711.412 prohibits well owners from removing or disabling a meter without first providing notice to the Authority. The section also requires approval of the Authority prior to such activities, except for routine maintenance. The Authority believes that it must be kept apprized, for accounting purposes, of the instances that meters are removed or disabled. The section also generally prohibits groundwater withdrawals during the time that a meter is removed or disabled, unless an AMD has been approved for that well. If not for these requirements, the Authority could not accurately monitor the amount of water withdrawn from the aquifer.

Section 711.414 requires non-exempt well owners to read their meters and file annual water use reports reflecting withdrawals during the previous year. The Authority relies on this reporting requirement to gather vital information about withdrawals made from a well on an annual and monthly basis. Such information is necessary to support the Authority's regulatory programs and to allow the Authority to monitor compliance with permit withdrawal amounts.

Section 711.416 provides that the Authority may enter land where a well is situated in order to inspect the meter, conduct maintenance or repairs, or perform tests. This authority is based on §36.123 of the Texas Water Code and provides a necessary tool to allow the Authority to implement its regulatory program and monitor and enforce compliance with the Act.

Section 711.418 prohibits a person from taking any action to disable or impair the accuracy of a meter. This section is meant to help preserve the integrity of meters on Edwards Aquifer wells and to prohibit persons from taking actions that would undermine the Authority's regulatory duties.

Section 711.420 specifies a variety of enforcement options that the Authority may pursue if withdrawals are not metered in accordance with Subchapter M. This list is not intended to be exhaustive or to preclude other means not specifically mentioned. It is meant to put users on notice of some of the enforcement options available to the Authority.

1. the MER would "exceed" a standard set by federal law, unless the MER is specifically required by state law;

2. the MER would "exceed" an express requirement of state law, unless the MER is specifically required by federal law;

4. the MER is adopted solely under the "general powers" of the agency instead of under a specific state law.

The Act requires the Authority to regulate the withdrawal of groundwater from the aquifer, including the rate and quantity of such withdrawals. The Act acknowledges that this cannot be effectively accomplished unless aquifer wells are metered or alternative methods are in place on each non-exempt well for measuring the rate and quantity of withdrawals, and the results are reported to the Authority. The Chapter 711 Subchapter M rules clarify the details of when and how meters or alternative measuring methods are to be installed on aquifer wells, who must pay for and maintain such devices, the design criteria for such devices, how such devices must be maintained, how groundwater use must be reported to the Authority, and so on. Such rules are normally integral parts of a water law-based regulatory program. The specific intent of Subchapter M is to support the Authority's aquifer management fee, enforcement and data collection program. Therefore, the Subchapter M rules are not MERs based on this rationale because they do not have the specific intent to "protect the environment" or "reduce risks to human health from environmental exposure."

Further, even if any of the Subchapter M rules were MERs, no RIAMER need be prepared for those rules because none meet any of the criteria listed in APA §2001.0225(a)(1)-(4). First, the Subchapter M rules do not exceed a standard set by federal law. The only reasonably related federal law establishes the Sole Source Aquifer Program implemented by the EPA for portions of the Edwards Aquifer. There is no federal law that specifically requires the rate and quantity of withdrawals of Edwards Aquifer groundwater to be metered. Therefore, the Subchapter M rules do not exceed a standard set by federal law. Moreover, even if the rules did exceed a standard set by federal law, the rules are specifically required by the Act, a state law which requires the Authority to, among other things: manage, conserve, preserve and protect the aquifer; adopt rules to carry out its powers and duties under the Act; regulate permits, manage withdrawals and points of withdrawals from the aquifer; require meters or alternative measuring methods on all non-exempt wells; and require the submission of water use reports. See Act §§1.08(a), 1.11(a), (b), (d)(2) and (h), 1.15(a), 1.31, 1.32, 1.33 and 1.36 of the Act). In addition, §36.111 of the Texas Water Code requires that records on the production of groundwater be kept and reported. Sections 36.123 and 49.221 of the Texas Water Code empower the Authority to, among other things, enter the land of a well owner to inspect, test, maintain or repair wells or meters located on the land.

Second, the Subchapter M rules do not exceed an express requirement of state law. Instead, the rules are designed to carry out the Authority's statutory responsibility to: manage, conserve, preserve and protect the aquifer, adopt rules to carry out its powers and duties under the Act, to regulate permits, manage withdrawals and points of withdrawals from the aquifer, to require meters or alternative measuring methods on all non-exempt wells, and to require the submission of water use reports. See Act §§1.08(a), 1.11(a), (b), (d)(2) and (h), 1.15(a), 1.31, 1.32, 1.33 and 1.36. In addition, §36.111 of the Texas Water Code requires that records on the production of groundwater be kept and reported. Sections 36.123 and 49.221 of the Texas Water Code empower the Authority to, among other things, enter the land of a well owner to inspect, test, maintain or repair wells or meters located on the land. The rules are designed to implement these express requirements of state law. Other than these provisions, there are no other "express requirements of state law" which could be exceeded by these rules.

Third, the Subchapter M rules do not exceed a requirement of a delegation agreement or contract between the State of Texas and an agency or representative of the federal government to implement a state and federal program. The subject matter of these rules is not covered by any delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program.

Fourth, the Subchapter M rules are not being adopted solely under the general powers of the Authority instead of under a specific state law. While these rules are adopted in part under the Authority's general powers, they are also adopted under the Act, a specific state law regarding the Edwards Aquifer. In particular, the rules are adopted pursuant to §§1.08(a), 1.11(a), (b), (d)(2) and (h), 1.15(a), 1.31, 1.32, 1.33 and 1.36 of the Act, §36.111 of the Texas Water Code and §§36.123 and 49.221 of the Texas Water Code.

For these reasons, it is not necessary to perform a RIAMER on the Chapter 711 Subchapter M rules.

Five public hearings were held on the Chapter 711 Subchapter M rules and other rules proposed by the Authority on: Monday, October 2, 2000 at 6:00 p.m. at the conference center of the Edwards Aquifer Authority, 1615 N. St. Mary's Street, San Antonio, Texas; Tuesday, October 3, 2000 at 6:00 p.m., at St. Paul's Lutheran Church, 1303 Avenue M, Hondo, Texas; Wednesday, October 4, 2000 at 6:00 p.m., at the San Marcos Activity Center, 501 E. Hopkins, San Marcos, Texas; Wednesday, October 11, 2000 at 6:00 p.m., at the Sgt. Willie DeLeon Civic Center, 300 E. Main Street, Uvalde, Texas; and Thursday, October 12, 2000, at 6:00 p.m., at the New Braunfels Civic Center, 380 S. Seguin Avenue, New Braunfels, Texas.

The public comment period closed on October 30, 2000. Oral and/or written comments were provided by San Antonio Water System ("SAWS"), James C. Harden, Jr. of Mortellaro's Nursery, Inc. ("Harden"), Andrew C.A. Donnelly on behalf of LBG-Guyton Associates ("LBG-Guyton"), Andrew J. Aelvoet on behalf of Southwest Texas Federal Land Bank ("Federal Land Bank"), Raymond Bartran ("Bartran"), Texas Farm Bureau ("TFB"), and Robert Grossenbacher ("Grossenbacher")

Chapter 711, Subchapter M, rules generally

Public Comment No. 1:

TFB maintains that a takings impact statement ("TIA") was required before the Authority provided public notice of the proposed rules.

Authority Response:

The Authority disagrees with the commenter. As explained in its notice of proposed rule in connection with this subchapter, the Authority has determined that it need not prepare a TIA in connection with the proposal of these rules. First, the Authority has made a "categorical determination" that rules establishing procedures and criteria for the installation of meters and the record-keeping and reporting requirements related thereto do not affect private real property. The proposed rules clarify the details of when and how meters or alternative measuring methods are to be installed on aquifer wells, who must pay for and maintain such devices, the design criteria for such devices, how such devices must be maintained, how groundwater use must be reported to the Authority, and so on. They have no direct affect on private real property and may not result in a taking. Second, the Authority's action in adopting these rules is an action that is reasonably taken to fulfill an obligation mandated by state law and is thus excluded from the Property Rights Act under §2007.003(b)(4) of the Texas Government Code. See §§1.08(a), 1.11(a), (b), (d)(2), and (h), 1.15(a) 1.31, 1.32, 1.33, and 1.36 of the Act, and §§36.111, 36.123, and 49.221 of the Texas Water Code. This conclusion is supported by the decision in Edwards Aquifer Authority v. Bragg , 21 S.W.3d 375 (Tex. App.-San Antonio, pet. denied) ("EAA v. Bragg "). Third, it is the position of the Authority that all valid actions of the Authority are excluded from the Property Rights Act under §2007.003(b)(11)(C) of the Texas Government Code as actions of a political subdivision taken under its statutory authority to prevent waste or protect the rights of owners of interest in groundwater. Accordingly, a TIA need not be performed in connection with the proposal of these rules.

Public Comment No. 2:

Grossenbacher believes it would be burdensome to require water reports, record keeping, and meter installation for small wells (those using less than 25,000 gallons of water per day) because the amount of the paperwork involved takes attention away from and has a detrimental effect on day-to-day business.

Authority Response:

The Authority agrees, in part, and disagrees, in part, with the commenter. Under the Authority rules, small wells which meet the criteria for exempt wells are not subject to the metering and reporting requirements set forth in subchapter M. Wells that do not meet such criteria ( e.g. , wells used for irrigation, municipal or industrial purposes) are not exempt and must comply with the metering and reporting requirements stated in subchapter M even if the well produces less than 25,000 gallons of water per day. The Authority lacks the statutory authority to exempt all small wells from metering and reporting requirements.

Section 711.402(d)

Section 711.402 states the basic duty to install and operate a meter. Subsection (d) of that section, as proposed, states that "all meters shall be installed, operated, maintained, and repaired in accordance with the manufacturer's standards, instructions, or recommendations, and shall ensure an error of not greater than five percent."

Public Comment No. 3:

SAWS suggests that §711.402(d) be modified to clarify that each meter is required to maintain an accuracy of five percent. To that end, SAWS suggests that §711.402(d) read as follows: " Each meter shall . . . and the owner shall ensure an error of not greater than . . . ."

Authority Response:

The Authority agrees in part, and disagrees, in part, with the commenter. The Authority agrees that each meter is required to maintain the five percent accuracy and has modified the rule accordingly. However, the Authority declines to add the words, "the owner," to subsection (d). Subsections (a) and (c) of §711.402, and §711.404, already make it clear that it is the responsibility of the owner to install and operate a meter that meets all standards and requirements stated in these rules, including the five percent accuracy requirement.

Section 711.402(e)

Subsection (e) of §711.402, as proposed, provides that "all dual status wells shall be installed and constructed to locate the meter such that all withdrawals made under a permit are metered separately and not commingled with any exempt withdrawals."

Public Comment No. 4:

SAWS asserts that it should be optional whether to separately meter dual status wells and requests that subsection (e) of §711.402 be modified so that it reads as follows: "Dual status wells must be constructed to locate meters such that exempt and nonexempt withdrawals made under the permit are metered separately if the owner does not want to pay Aquifer Management Fees on exempt withdrawals."

Authority Response:

The Authority disagrees with the commenter. The Authority allows exempt withdrawals to be made from permitted wells in limited circumstances. In such instances, the Authority believes that it should have the means to confirm the amount of water withdrawn for permitted use and the amount withdrawn for exempt use.

Public Comment No. 5:

Bartran comments that subsection (e) of §711.402 recognizes dual status wells, and is thus not in conformity with §711.46 of the Authority's rules.

Authority Response:

The Authority agrees with the commenter. The Authority has determined that §711.402(e), as proposed, requires clarification and modification in light of §711.46 of the Authority's rules. Subsection (e) of §711.402 has been modified to achieve consistency with §711.46 as well as greater clarity.

Section 711.404(a)

Section 707.404(a), as proposed, states that "except as provided in subsection (b), all meters shall be designed, owned, installed, operated, maintained and repaired by the owner of the well, at the cost of the well owner."

Public Comment No. 6:

SAWS asserts that §711.404(a)'s provision requiring a well owner to design a meter may be onerous and accordingly suggests deleting the word "designed" from that subsection.

Authority Response:

The Authority agrees with the commenter and has therefore deleted the word "designed" from §707.404(a). The Authority has also decided to clarify §707.404(a) so that it will now read as follows: "Except as provided in subsection (b), the owner of a well shall be responsible for the installation, operation, maintenance, and repair of the meter associated with that well."

Section 711.404(c)

Subsection (c) of §711.404 covers the situation where the owner of a irrigation well (on which there is an Authority owned meter) "transfers all or part of the purpose of use of water to a use other than irrigation" In such an instance, this subsection requires the well owner to reimburse the Authority for a portion of the Authority's costs related to that meter.

Public Comment No. 7:

SAWS notes that under the Authority's rules, the owner of an irrigation well may not transfer all of its groundwater right, asserts the Authority must have a way to verify that the remainder of the right is not exceeded through pumping, and seeks the deletion of §711.404(c).

Authority Response:

The Authority disagrees with the commenter. First, the Authority notes that the owner of an irrigation well may not transfer all of the place or purpose of use of its groundwater withdrawal right. Under subsection (c) of §711.324 (relating to Prohibited Transfers), the place or purpose of use of all or part of the base irrigation groundwater component of an initial regular permit or interim authorization status is not transferable. However, the ownership of all of the groundwater withdrawal right is fully transferable. Second, §§711.340 and 711.342 of the Authority's rules allow for the conversion of base irrigation groundwater. Once converted, §§711.344 and 711.346 of the Authority's rules allow for the transfer of the purpose of use of such a groundwater withdrawal right. When §711.404(c) refers to the transfer of " all . . . of the purpose of use of water from the well to a use other than irrigation," it contemplates the transfer of the unrestricted portion of the groundwater withdrawal right and the transfer of that portion which was converted from base irrigation groundwater. With regard to the commenter's concern that the Authority must be able to verify that the remainder of the right not transferred is not exceeded through overpumping, the Authority will be able to monitor such matters through metering and the required filing of groundwater use reports.

Public Comment No. 8:

Federal Land Bank objects to §711.404(c) on the grounds that it exceeds the scope of the Authority's power under §1.31(b) of the Act which states that "the Authority is responsible for costs of purchasing, installing, and maintaining, measuring devices, if required, for an irrigation well in existence before September 1, 1993."

Authority Response:

The Authority disagrees with the commenter. The commenter appears to suggest that §1.31(b) of the Act requires the EAA to indefinitely assume all costs of a meter associated with a well, which, as of September 1, 1993, was a irrigation well, regardless of whether the purpose of use of the water from that well is ever changed. The Authority disagrees with such an interpretation of §1.31(b). The intent of §1.31(b) is to relieve an existing irrigation user from the cost of installing, operating, and maintaining a meter. If a well formerly used for irrigation becomes, in whole or in part, a well used for another purpose, this protection should no longer apply to the extent that the well is used for the other purpose.

Section 711.406

Section 711.406 states the requirement that no meter may be installed or modified without the approval of the general manager. Subsection (b) of that section sets forth the criteria to be used by the general manager in reviewing and approving an application to install or modify a meter.

Public Comment No. 9:

SAWS suggests that the general manager should be required to approve an application to modify a meter within thirty days and that §711.406(b) should be modified to indicate such a requirement.

Authority Response:

The Authority disagrees with the commenter. Although the Authority believes that such applications should and will be handled expeditiously (often within 30 days), the Authority declines to impose a thirty day deadline on the general manager in this situation.

However, upon examining the text of §711.406, as proposed, the Authority has concluded that the text of the Authority should be revised to improve clarity and consistency with §707.413 of the Authority's rules and to correct typographical errors.

Section 711.406(b)(4)

Subsection (b)(4) of §711.406, as proposed, states that the general manager shall approve an application to install or modify a meter if such an application shows, among other things, that the totalizing register of the meter "has the capacity to record the total quantity of groundwater withdrawn from the aquifer for not less than one full year . . . .."

Public Comment No. 10:

SAWS seeks clarification that the totalizing register will not turnover within a year of operation and suggests modified language for subsection (b)(4).

Authority Response:

The Authority agrees in part, and disagrees, in part, with the commenter. The Authority agrees that the intent of §707.406(b)(4) is to assure that the totalizing register of the meter will not turnover within a year of operation. The Authority has modified §707.406(b)(4) to clarify that intent, but in different manner than that suggested by SAWS.

Section 711.406(b)(7)

Subsection (b)(7) of §711.406 states the general manager shall approve an application for an alternative measuring method if the application shows, among other things, that "the interest of the Authority in ensuring accurate and uniform groundwater withdrawal data for compliance and aquifer management purposed is outweighed by the burden on the application to install and operate a meter."

Public Comment No. 11:

SAWS argues the text of §711.406(b)(7) should be rearranged to provide greater clarity. SAWS urges that this provision should read as follows: "for an alternative measuring method, if the burden on the applicant to install and operate a meter outweighs the interest of the Authority in ensuring accurate and uniform groundwater withdrawal data for compliance and aquifer management purposes."

Authority Response:

The Authority disagrees with the commenter. The Authority believes that SAWS suggested revisions to §711.406(b)(7) provide no greater clarity as compared with the text of that provision as proposed.

Section 711.406(c)

Subsection (c) of §711.406 provides that "within 5 days after installation or modification and prior to the commencement of operation of the meter, the owner of the meter shall give written notice to the Authority of the installation and the intended start date so the Authority may inspect and approve the meter installation or modification."

Public Comment No. 12:

SAWS believes that meter inspections should be at the option of the Authority and that wells should not be precluded from being operated while waiting for the Authority's inspection. Accordingly, SAWS urges that subsection (c) of §711.406 be modified to read as follows: "Within 5 days after installation or modification, the owner of the meter shall give written notice to the Authority of the installation and the intended start date so the Authority may inspect and approve the meter installation or modification."

Authority Response:

The Authority agrees with the commenter. The Authority believes that it is sufficient for the Authority to be given notice of a meter installation or modification and intended start date and so that the Authority may inspect and approve the installation or modification. While the Authority intends to inspect the meter installation or modification soon after receiving such notice, the Authority agrees that a well owner should not be prevented from using that meter until after such an inspection and approval. The Authority has therefore modified subsection (c) of §711.406 to clarify this intent.

Section 711.410

Section 711.410 governs the situation where an owner of a well has reason to believe that a condition exists that may affect the accuracy of a meter. It specifies that in such instances, a well owner has a duty to notify the general manager that the accuracy of the meter may be in question.

Public Comment No. 13:

Harden notes that when a meter is removed for repair, there is no procedure regarding who to notify, how to notify, or how to get approval of alternative methods to measure withdrawals. Harden suggests that the EAA establish a form and procedure in this area as opposed to just verbal notification.

Authority Response:

The Authority agrees, in part, and disagrees, in part, with the commenter. Section 711.410 provides a procedure by which a well owner shall provide notice to the Authority of any condition that may affect the accuracy of the meter. While it may be advisable for such notice to be submitted in writing, the Authority does not want to create additional burdens that may discourage persons from notifying the Authority of conditions that may affect the accuracy of the meter as expeditiously as possible. The Authority has modified subsection (a) of §711.410 to provide for, but not require, written notification.

Section 711.412

Section 711.412, as proposed, establishes requirements and sets forth procedures relating to the removal and disabling of meters.

Public Comment No. 14:

With respect to this section, Harden asserts that formal and consistent guidelines are needed to provide stability and insulation against shifts in policy and interpretation that accompany changes in Authority staff. As a result, Harden requests the deletion of §411.412, calling it discriminatory.

Authority Response:

The Authority agrees, in part, and disagrees, in part, with the commenter. The Authority agrees that formal guidelines are often appropriate to provide stability and certainty to those who are regulated by the Authority. However, the Authority believes that this interest is served by the inclusion rather than the deletion of §711.412. Moreover, the Authority does not understand how §711.412 is discriminatory. The Authority declines to delete §711.412. However, in conducting its review of §711.412, the Authority has determined that it overlaps somewhat with §711.406. Accordingly, the Authority has modified §711.412 to reduce or eliminate such overlap.

Section 711.412(a)

Subsection (a) of §711.412 states that a meter may not be removed or otherwise disabled unless the owner provides notice of intent remove or disable the meter and the notice has been approved in writing by the general manager.

Public Comment No. 15:

Although SAWS believes that owners should be required to notify the Authority of routine maintenance of meters, SAWS asserts that there should be no requirement that the general manager approve, in writing, such routine maintenance. SAWS suggests that §711.412(a) be modified accordingly.

Authority Response:

The Authority agrees with the commenter. The Authority has modified subsection (a) of §711.412 to indicate that although a well owner must notify the Authority whenever he or she intends to remove or disable a meter, including for routine maintenance, the prior approval of the general manager is not required in order for routine maintenance to be performed. In addition, the Authority has also modified subsection (a) of §711.412 to require that notice to the Authority of the removal or disabling of a meter be in writing on a form provided by the general manager. Other clarifying changes to subsection (a) of §711.412 have also been made.

Section 711.412(b)

Subsection (b) of §711.412 provides that a meter may be removed or disabled only by the owner of the meter, the Authority or their authorized representatives.

Public Comment No. 16:

SAWS asserts that the Authority should not be permitted to remove or disable a meter that it does not own and requests a change to §711.412(b) to reflect that position.

Authority Response:

The Authority agrees with the commenter. It was never the Authority's intent that subsection (b) of §711.412 provide it with the authority to remove and disable a meter not owned by the Authority. The Authority has accordingly modified subsection (b) to clarify this intent.

Section 711.414

Section 711.414 provides that a well owner shall read the meter by March 1st of each year and file the results in an annual water use report on a form prescribed by the Authority.

Public Comment No. 17:

LBG-Guyton expresses concern about a lack of accurate data relating to pumpage of Edwards groundwater and asserts that collecting data on an annual basis, as required by §711.414, is insufficient. LBG-Guyton suggests meter readings on a monthly or weekly basis and groundwater use reports on a monthly basis. Similarly, SAWS asserts that the Authority cannot effectively manage the aquifer using only annual usage reports and suggests that the Authority require monthly reports.

Authority Response:

The Authority agrees, in part, and disagrees, in part, with the commenters. The Authority agrees that information on monthly usage of the aquifer is necessary in order for the Authority to effectively plan and implement groundwater management strategies. Certain months of the year are more prone to both drought and to increased groundwater usage and withdrawals. Information on each users' withdrawals on a monthly basis would prove to be invaluable in the context of drought management. The Authority has therefore decided to require permittees and persons with interim authorization status to read their meter or meters on a monthly basis. However, the Authority sees no need, at this time, to require that users actually file groundwater use reports on a monthly basis. The Authority will therefore continue to require permittees and persons with interim authorization to file a annual groundwater use reports but to require in that information on that report be stated on both an annual and a month-by-month basis. The Authority has revised §707 .414, in part, to reflect the changes discussed above. The Authority has also modified the title of §707.414.

Public Comment No. 18:

SAWS urges the elimination of subsection (a) of §711.414, as proposed, on the grounds that: (1) it is redundant with subsection (b) of §711.414, as proposed; and (2) no meter exists where there is an approved alternative measuring method. SAWS further urges that subsection (b) of §707.414, as proposed, be converted to subsection (a) and that reporting dates are changed so they consistent with Chapter 709 of the Authority's rules.

Authority Response:

The Authority agrees, in part, and disagrees, in part, with the commenter. The Authority agrees that there is redundancy between subsections (a) and (b) of §711.414, as proposed, and has therefore eliminated any such redundancy by rewriting §717.414. Furthermore, the Authority agrees that as proposed, §711.414 contained some inconsistencies with §709.21(c) and (e) of the Authority's rules with respect to due dates for the mailing and submittal of annual groundwater use reports for irrigation wells. Accordingly, in rewriting §707.414, the Authority has provided separate due dates for the mailing and submittal of annual groundwater use reports for irrigation an non-irrigation wells in order to achieve consistency with §709.21 of the Authority's rules.

Section 711.416

Section 711.416 provides that the Authority may enter the land of the well owner for the purpose of inspecting the condition of the meter, conducting maintenance and repair activities, or performing tests.

Public Comment No. 19:

SAWS contends the Authority should not maintain or repair meters that the Authority does not actually own. Additionally, SAWS urges that all meter testing should not harm the meters. SAWS recommends that the first sentence of §711.416 be revised as follows, adding the italicized language:

"At any reasonable time, the Authority may enter the land of the owner on which a well is situated for the purpose of inspecting the condition of the meter, conducting maintenance and repair activities if authorized , or performing nondestrutive tests."

Authority Response:

The Authority agrees, in part, and disagrees, in part, with the commenter. The Authority has no intent on conducting maintenance or repairs on meters it does not own. The Authority has modified §711.416 to add the words "if authorized" in order to reflect and clarify this intent. Moreover, the Authority agrees that the testing of meters should not harm the meters but disagrees that a rule is needed to specify that only nondestructive tests are to be performed.

The new sections are adopted pursuant to the following statutory provisions contained within the Act.

Section 1.11(a) of the Act provides that the Board of Directors ("Board") of the Authority "shall adopt rules necessary to carry out the authority's powers and duties under (Article 1 of the Act), including rules governing procedures of the board and the authority." This section provides broad rulemaking authority to implement the various substantive and procedural programs set forth in the Act related to the Edwards Aquifer, including the permitting program.

Section 1.11(h) of the Act provides, among other things, that the Authority is "subject to" the APA. This section essentially provides that the Authority is required to comply with the APA in connection with its rulemaking, even though the Authority is a political subdivision and not a state agency that would generally be subject to APA requirements.

Section 1.32 of the Act requires permittees to submit annual water use reports to the Authority. This section is implemented in Subchapter M.

§711.402.Duty to Install and Operate Meter; Meter Installation Deadlines.

(a)

Except as provided in subsection (b) of this section, the owner of a well shall install and operate a meter to measure the flow rate and cumulative amount of groundwater withdrawn from the well.

(b)

Pursuant to §711.406 of this title (relating to Meter Installation Approval; Waiver of Duty to Install and Operate a Meter; Approval of Alternative Measuring Method), the owner of a well may apply to the Authority to waive the duty to install a meter in favor of an alternative measuring method of determining the amount of groundwater withdrawn from the aquifer. If the Authority approves a waiver for the owner of a well with an approved alternative measuring method, then the term "meter" as used in this subchapter shall mean "alternative measuring method."

(c)

A meter shall be installed by the owner of a well no later than six months after the effective date of these rules. This deadline does not apply to meters installed by the Authority pursuant to §711.404(b) of this title (relating to Ownership, Maintenance, and Cost of Meters).

(d)

Each meter shall be installed, operated, maintained, and repaired in accordance with the manufacturer's standards, instructions, or recommendations, and shall ensure an error of not greater than + five percent.

(e)

Permitted non-exempt irrigation wells from which exempt withdrawals are allowed under subsection (b) of §711.46 of this title (relating to Dual Status Wells Prohibited) shall be constructed so that both permitted and exempt withdrawals are metered separately and not commingled. In such instances, the well owner is responsible for installing, operating, and maintaining two meters that comply with the requirements of this subchapter: one to measure permitted withdrawals and the other to measure exempt withdrawals.

§711.404.Ownership; Maintenance; and Costs of Meters.

(a)

Except as provided in subsection (b), the owner of a well shall be responsible for the installation, operation, maintenance, and repair of the meter associated with that well.

(b)

For any irrigation well in existence on September 1, 1993 that is not capped and from which withdrawals were made during the historical period, or any replacement to such well, meters shall be designed, owned, installed, and maintained by the Authority at the cost of the Authority. Meters for such irrigation wells shall be operated by the well owner at the cost of the well owner.

(c)

If an owner of a well on which a meter owned by the Authority is installed transfers all or part of the purpose of use of water from the well to a use other than irrigation, then the owner of the well shall:

(1)

reimburse the Authority on a pro rata basis for all of its meter installation and purchase costs, and, if appropriate, the Authority may convey ownership of the meter to the well owner; or

(2)

notify the Authority in writing to remove the meter pursuant to §711.412 of this title (relating to Removal, Modification, or Disabling of Meters), and install a replacement meter in accordance with this subchapter.

§711.406.Meter Installation Approval; Waiver of Duty to Install and Operate Meter; Approval of Alternative Measuring Method.

(a)

Except as provided in subsection (d), no meter or alternative measuring method, may be installed or modified prior to written approval given by the general manager of an application filed on a form prescribed by the Authority pursuant to §707.413 of this title (relating to Applications for Permits to Install or Modify Meter).

(b)

The general manager shall approve an application to install or modify meter or alternative measuring method, if the general manager finds the application shows the following:

(1)

the meter or alternative measuring method, has a certified error of not greater than + five percent;

(2)

for a meter it meets the American Water Works Association design and operation standards for design, materials, and accuracy;

(3)

the meter or alternative measuring method has a non-resettable totalizer, or lock box with resettable digital readout;

(4)

the totalizing register of the meter or alternative measuring method has the capacity to record the total quantity of groundwater withdrawn from the aquifer for at least one full year; and

(5)

the meter or alternative measuring method if equal to or greater than a discharge diameter of 4.0 inches, has an instantaneous readout for both flow rate and total quantity measured;

(6)

the meter, or alternative measuring method, if used for the distribution of potable water, shall be American National Standards Institute/National Sanitation Foundation (ANSI/NSF) Standard 61 certified; and

(7)

for an alternative measuring method, if the interest of the Authority in ensuring accurate and uniform groundwater withdrawal data for compliance and aquifer management purposes is outweighed by the burden on the applicant to install and operate a meter.

(c)

Within 5 days after installation or modification the owner of the meter shall give written notice to the Authority of the installation or modification and the intended start date so the Authority may inspect and approve the meter installation or modification.

(d)

Subsection (a) does not apply to meters installed by the Authority under §711.404(b) of this title (relating to Ownership, Maintenance and Costs).

§711.410.Notice of Condition Affecting Accuracy of Meter; Corrective Action.

(a)

If at any time the owner of a well has reason to believe that a condition, of any kind whatsoever, may exist that affects the accuracy of a meter, then the owner of the well shall, within seven days of learning of the fact(s), notify the general manager that the accuracy of the meter may be in question. Such notification may be in writing, on a form provided by the general manager.

(b)

The general manager may conduct an investigation and, if facts warrant, direct the owner of the meter, at the owner's cost, to evaluate and test the accuracy of the meter and take appropriate corrective action, including replacement, to restore the accuracy and proper working condition of the meter in conformance with the requirements of this subchapter.

§711.412.Removal and Disabling of Meters.

(a)

A meter may not be removed or otherwise disabled including for routine maintenance, unless the owner gives the Authority notice, in writing, on a form provided by the general manager, of the intent to remove or disable the meter. Except in cases of routine maintenance, such notice must be approved in writing by the general manager before the meter is removed or disabled.

(b)

A meter may be removed or otherwise disabled, only by the owner of the meter or its authorized representative.

(c)

During a period that a meter is removed or otherwise disabled, groundwater may not be withdrawn from the well, unless the general manager has approved an alternative measuring method pursuant to §711.406 of this title (relating to Meter Installation Approval; Waiver of Duty to Install and Operate Meter; Approval of Alternative Measuring Method) and §707.515 of this title (relating to Actions on Application by the General Manager).

§711.414.Meter Reading; Groundwater Use Reporting.

(a)

Every permittee, or person with interim authorization status, shall accurately read the meter on a monthly and on an annual basis and shall file the results with the Authority by way of a written Annual Groundwater Use Report on a form prescribed by the Authority. The annual groundwater use report form prescribed by the Authority shall provide spaces to report withdrawals for both the entire year and on a month-by-month basis. Every permittee, or person with interim authorization status, shall assure that the Annual Groundwater Use Report reflects the withdrawals made during the preceding calendar year and shall include information on the amount of withdrawals made on both an annual and on a month-by-month basis.

(b)

For all wells other than irrigation wells, a completed Annual Groundwater Use Report must be returned to the general manager by no later than March 1st of each year. The Authority shall mail annual groundwater use report forms to the users of such wells during January of each year.

(c)

For irrigation wells, a completed Annual Groundwater Use Report must be returned to the general manager by no later than January 31st of each year. The Authority shall mail annual groundwater use report forms to the users of such wells during December of each year.

(d)

Annual groundwater use report forms shall be furnished to anyone on request. In completing the report, a permittee, or person with interim authorization status, shall fill in the blanks to the best of his knowledge and ability in accordance with the instructions that accompany each form.

(e)

No groundwater use report is required to be filed by persons owning an exempt well, although the Authority encourages persons owning exempt wells to file such a report.

§711.416.Entry on Land.

At any reasonable time, the Authority may enter the land of the owner on which a well is situated for the purpose of inspecting the condition of the meter, conducting maintenance and repair activities if authorized, or performing tests. The Authority will make all reasonable efforts to coordinate the entry with the owner of the land on which the well is situated.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on December 28, 2000.

TRD-200009051

Gregory M. Ellis

General Manager

Edwards Aquifer Authority

Effective date: January 17, 2001

Proposal publication date: September 29, 2000

For further information, please call: (210) 222-2204