1. Administrative Appeals of Planning Decisions by Groundwater Conservation Districts TWCA 66 th Annual Convention Dallas, Texas March 3-5, 2010 Andrew S. “Drew” Miller Kemp Smith LLP dmiller@kempsmith.com www.kempsmith.com 816 Congress221 North Kansas Suite 1150Suite 1700 Austin, Texas 78701El Paso, Texas 79901 512.320.5466915.533.4424 512.320.5431 (fax)915.546.5360 (fax)

2. Inside Bilinski’s Sausage Factory – Albany, NY Inside Bilinski’s Sausage Factory – Albany, NY

3. Three Types of Petitions under Chapter 36 § 36.108(l) – petition to TWDB – appealing reasonableness of DFCs § 36.108(l) – petition to TWDB – appealing reasonableness of DFCs § 36.1072(g) – petition to TWDB – to resolve alleged conflict between a district’s MP and the state water plan § 36.1072(g) – petition to TWDB – to resolve alleged conflict between a district’s MP and the state water plan § 36.108(f) – petition to TCEQ – requesting an inquiry on whether district(s) refused to join in the planning process or if the process failed to result in adequate planning. § 36.108(f) – petition to TCEQ – requesting an inquiry on whether district(s) refused to join in the planning process or if the process failed to result in adequate planning.

4. The Administrative Petition-Initiated Proceedings of Chapter 36, Texas Water Code Chapter 36 Water Code § Receiving agencySubject of petitionImplementing rules 36.108(l)–(n)TWDBchallenging/appealing the reasonableness of a DFC 31 TAC §§ 356.41-.46 36.1072(g)TWDBasserting that a conflict requiring resolution may exist between a district’s approved groundwater management plan and the state water plan 31 TAC § 356.10; 31 TAC § 356.2(6) 36.108(f)–(k)TCEQrequesting an inquiry on whether a district or districts refused to join in the planning process or the process failed to result in adequate planning 30 TAC § 293.23

5. Desired Future Condition (DFC) “In essence, a [DFC] is a management goal that captures the philosophy and policies addressing how an aquifer will be managed. What do you want your aquifer to look like in the future.” “In essence, a [DFC] is a management goal that captures the philosophy and policies addressing how an aquifer will be managed. What do you want your aquifer to look like in the future.” Robert E. Mace, Rima Petrossian, Robert Bradley, William Mullican, III, Lance Christian, A Streetcar Named Desired Future Conditions: The New Groundwater Availability for Texas (Revised), State Bar of Texas, The Changing Face of Water Rights in Texas 2008 (May 8–9, 2008) Robert E. Mace, Rima Petrossian, Robert Bradley, William Mullican, III, Lance Christian, A Streetcar Named Desired Future Conditions: The New Groundwater Availability for Texas (Revised), State Bar of Texas, The Changing Face of Water Rights in Texas 2008 (May 8–9, 2008)

6. § 36.108(l) – appeal to TWDB of approval of DFCs “A person with a legally defined interest in the groundwater in the [GMA], a district in or adjacent to the [GMA], or a regional water planning group for a region in the [GMA] may file a petition with [TWDB] appealing the approval of the [DFCs]... established under this section.” “A person with a legally defined interest in the groundwater in the [GMA], a district in or adjacent to the [GMA], or a regional water planning group for a region in the [GMA] may file a petition with [TWDB] appealing the approval of the [DFCs]... established under this section.”

7. § 36.108(l) – appeal to TWDB of approval of DFCs “The petition must provide evidence that the districts did not establish a reasonable desired future condition of the groundwater resources in the groundwater management area.” “The petition must provide evidence that the districts did not establish a reasonable desired future condition of the groundwater resources in the groundwater management area.”

8. Contents of petition under § 36.108(l) 31 TAC § 356.43(b)- detailed requirements 31 TAC § 356.43(b)- detailed requirements

9. § 36.108(l) petitions – Procedure 30-day notice to districts required 30-day notice to districts required Hearing at a central location in the GMA Hearing at a central location in the GMA Procedures for hearing at 31 TAC 356.4 Procedures for hearing at 31 TAC 356.4 List of findings based on evidence at the hearing to be prepared by the Executive Administrator List of findings based on evidence at the hearing to be prepared by the Executive Administrator Executive Administrator may provide a summary, analysis and recommendations Executive Administrator may provide a summary, analysis and recommendations

10. Criteria that the board will consider when determining whether a DFC is reasonable whether the adopted DFCs are physically possible and the consideration given groundwater use; whether the adopted DFCs are physically possible and the consideration given groundwater use; the socio-economic impacts reasonably expected to occur; the socio-economic impacts reasonably expected to occur; the environmental impacts including, but not limited to, impacts to spring flow or other interaction between groundwater and surface water; the environmental impacts including, but not limited to, impacts to spring flow or other interaction between groundwater and surface water; the state's policy and legislative directives; the state's policy and legislative directives; the impact on private property rights; the impact on private property rights; the reasonable and prudent development of the state's groundwater resources; and the reasonable and prudent development of the state's groundwater resources; and any other information relevant to the specific DFC. 31 TAC § 356.45(c) any other information relevant to the specific DFC. 31 TAC § 356.45(c)

11. Possible outcomes of proceeding under § 36.108(l) 1. DFCs are reasonable – proceeding ends 1. DFCs are reasonable – proceeding ends 2. DFCs are unreasonable – board will submit a report to the districts in the GMA that includes a list of findings and recommended revisions to the DFCs. 2. DFCs are unreasonable – board will submit a report to the districts in the GMA that includes a list of findings and recommended revisions to the DFCs. The districts are to prepare a revised plan in accordance with the board’s recommendations and hold at least one public hearing, after which they shall revise the DFCs and submit them to TWDB for review. The districts are to prepare a revised plan in accordance with the board’s recommendations and hold at least one public hearing, after which they shall revise the DFCs and submit them to TWDB for review.

12. § 36.1072(g) – conflict between management plan and state water plan A person with a legally defined interest in groundwater in a district or the regional water planning group may file a petition with the development board stating that a conflict requiring resolution may exist between a district’s approved management plan... and the state water plan.” A person with a legally defined interest in groundwater in a district or the regional water planning group may file a petition with the development board stating that a conflict requiring resolution may exist between a district’s approved management plan... and the state water plan.”

13. § 36.1072(g) – conflict between management plan and state water plan Required contents of petition Required contents of petition 31 TAC § 356.10(a) 31 TAC § 356.10(a) Procedure Procedure Responsive briefing? Responsive briefing? Determination by Executive Administrator as to whether conflict requiring resolution exists Determination by Executive Administrator as to whether conflict requiring resolution exists

14. § 36.1072(g) – Possible Outcomes If Executive Administrator determines that no conflict exists - proceeding ends If Executive Administrator determines that no conflict exists - proceeding ends If EA determines that a conflict exists – next steps If EA determines that a conflict exists – next steps Assistance and coordination by EA to resolve the conflict Assistance and coordination by EA to resolve the conflict Mediation Mediation TWDB may resolve the conflict – may require revision to district’s management plan TWDB may resolve the conflict – may require revision to district’s management plan Appeal Appeal

15. Petition to TCEQ under § 36.108(f) “A district or person with a legally defined interest in the groundwater within the management area may file a petition with [TCEQ] requesting an inquiry if a district or districts refused to join in the planning process or the process failed to result in adequate planning, including the establishment of reasonable [DFCs]... “ “A district or person with a legally defined interest in the groundwater within the management area may file a petition with [TCEQ] requesting an inquiry if a district or districts refused to join in the planning process or the process failed to result in adequate planning, including the establishment of reasonable [DFCs]... “

16. Evidence to be provided/grounds for inquiry under § 36.108(f) (1) a district in the [GMA] has failed to adopt rules; (1) a district in the [GMA] has failed to adopt rules; (2) the rules adopted by a district are not designed to achieve the [DFCs]]established during the joint planning process; (2) the rules adopted by a district are not designed to achieve the [DFCs]]established during the joint planning process; (3) the groundwater in the [GMA] is not adequately protected by the rules adopted by a district; or (3) the groundwater in the [GMA] is not adequately protected by the rules adopted by a district; or (4) the groundwater in the [GMA] is not adequately protected due to the failure of a district to enforce substantial compliance with its rules. (4) the groundwater in the [GMA] is not adequately protected due to the failure of a district to enforce substantial compliance with its rules.

17. District response in proceeding under § 36.108(f) Any GCD within the GMA that is the subject of the petition may file a response within 35 days. Any GCD within the GMA that is the subject of the petition may file a response within 35 days. 30 TAC § 293.23(b)(5).

18. TCEQ determination under § 36.108(f) Within 90 days, TCEQ shall review the petition and either: Within 90 days, TCEQ shall review the petition and either: (1) dismiss the petition if it finds that the evidence is not adequate to show that any of the conditions alleged in the petition exist; or (1) dismiss the petition if it finds that the evidence is not adequate to show that any of the conditions alleged in the petition exist; or (2) select a review panel. (2) select a review panel.

19. Appointment of Review Panel under § 36.108(h) Consists of a chairman and 4 other members. Consists of a chairman and 4 other members. A director GM of a district outside the GMA may be appointed to the review panel. A director GM of a district outside the GMA may be appointed to the review panel. TCEQ may not appoint more than 2 members of the panel from any one district. TCEQ may not appoint more than 2 members of the panel from any one district.

20. Activities and Report of the Review Panel under § 36.108(i) TCEQ may direct the panel to conduct public hearings in the GMA to take evidence. TCEQ may direct the panel to conduct public hearings in the GMA to take evidence. Review panel may attempt to negotiate a settlement. Review panel may attempt to negotiate a settlement. Within 120 days of appointment, the review panel shall adopt a report. Within 120 days of appointment, the review panel shall adopt a report. Report must include findings and recommended actions for TCEQ. Report must include findings and recommended actions for TCEQ.

21. Action by TCEQ following report of review panel under § 36.108(k) TCEQ or its ED is to act within 45 days of receiving report TCEQ or its ED is to act within 45 days of receiving report If TCEQ finds that any of the alternative grounds exist, it may: If TCEQ finds that any of the alternative grounds exist, it may: (1) issue an order requiring the district to take certain actions or to refrain from taking certain actions; (1) issue an order requiring the district to take certain actions or to refrain from taking certain actions; (2) dissolve the board in accordance with Sections 36.305 and 36.307 and calling an election for the purpose of electing a new board; (2) dissolve the board in accordance with Sections 36.305 and 36.307 and calling an election for the purpose of electing a new board; (3) request the attorney general to bring suit for the appointment of a receiver to collect the assets and carry on the business of the groundwater conservation district; or (3) request the attorney general to bring suit for the appointment of a receiver to collect the assets and carry on the business of the groundwater conservation district; or (4) dissolve the district in accordance with Sections 36.304, 36.305, and 36.308. (4) dissolve the district in accordance with Sections 36.304, 36.305, and 36.308.

22. Outcomes of Petitions appealing DFCs GMA 9 GMA 9 GMA 1 GMA 1

23. General Observations? Drew Miller dmiller@kempsmith.com Kemp Smith, LLP www.kempsmith.com 816 Congress 221 North Kansas Suite 1150 Suite 1700 Austin, Texas 78701 El Paso, Texas 79901 512.320.5466 915.533.4424 512.320.5431 (fax) 915.546.5360 (fax)