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practicable, conforms to the order of preferences established by Section 11.024; and (6) does not

require the release of water that, at the time the order is issued, is lawfully stored in a reservoir

under water rights associated with that reservoir.”

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TCEQ Rules.

The statute required TCEQ to adopt rules implementing it, including rules defining a

drought or emergency shortage for purposes of statute and rules specifying the conditions under

which the Executive Director may issue a curtailment order, the terms of the order, including its

maximum term, and providing notice and an opportunity for hearing on the order.

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TCEQ proposed

these rules on November 4, 2011, and received more than thirty written comments on nearly every

section of the new rules. TCEQ adopted the new rules effective May 3, 2012.

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The new rules allow the Executive Director to issue a curtailment order if: (1) all or part of the river

basin is in a drought, or an emergency shortage of water exists; (2) senior water rights are unable to

divert the water they need or store inflows that are authorized under a water right; (3) one or more

senior water right holders who will benefit from the order can beneficially use the water they will

be able to divert or use under the order; and (4) suspending or adjusting junior water rights would

result in conditions under which the senior water right holder may divert water or impound inflows

under its water right for a beneficial use.

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The rules also give the Executive Director the power to not

suspend a junior water right based on health, safety, and welfare concerns.

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Farm Bureau lawsuit.

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On November 14, 2012, Dow Chemical Co., which owns the most senior

and downstream water rights in the Brazos River Basin, made a priority call on junior water rights

in the basin. Five days later, the TCEQ Executive Director issued a suspension order under the

new TCEQ rules. The order temporarily suspended diversions under 845 water rights issued after

February 15, 1942, below Possum Kingdom Lake, but exempted rights to use water for municipal or

power generation purposes from the call, as previous curtailment orders had done.

On December 14, 2012, the Texas Farm Bureau, along with two of its members, filed suit against

the TCEQ in state district court in Travis County. The Farm Bureau argued that the TCEQ curtailment

rules were invalid and exceeded TCEQ’s statutory authority because Section 11.053(a) provides

that all suspensions or adjustments shall be in accordance with Section 11.027, which provides

that as between appropriators, first in time is first in right, and the rules allow the Executive Director

to deviate from the priority system, as he did in the Brazos River Basin order.

On June 26, 2013, the district court entered a judgment in favor of the Farm Bureau, holding that the

TCEQ curtailment rules “are invalid and exceed TCEQ’s statutory authority because they allow deviation

from the priority system and the exemption of water rights for preferred uses from a curtailment or

suspension order.” TCEQ appealed the trial court judgment to the Austin court of appeals, but the

Supreme Court transferred the case to the Thirteenth Court of Appeals in Corpus Christi and Edinburg.

The Thirteenth Court heard oral argument in this case on April 24, 2014 in Austin.