WATERMASTERS: A LEGAL HISTORY AND ANALYSIS OF SURFACE WATER RIGHTS ENFORCEMENT

1. INTRODUCTION ...... 144 II. THE ORIGIN OF THE TEXAS WATERMASTER ...... 145 A. Watermasters in Western America: The Vision of J. W. Pow ell ...... 145 B. Texas Droughts and Water Law Before 1952 ...... 146 C. Judicial Creation ...... 147 III. LEGISLATIVE HISTORY ...... 148 A. Codification of the Court-Appointed Watermaster ...... 149 B. The Water Rights Adjudication Act of 1967and the Commission-Appointed Watermaster ...... 150 C. The 1977 Department of Water Resources Act and the History of the "Commission" ...... 153 D. The 1987 Watermaster System Act and the Watermasterby Petition ...... 154 E. The 75th Legislature, Senate Bill 1, and Senate Bill 1406 .. 157 F. The 2003 Watermaster Legislation ...... 159 G. Watermaster Legislation in the 79th Legislature ...... 160 IV. CREATING A WATERMASTER PROGRAM ...... 161 A. The Petition ...... 161 B. Proceduresfor Determination ...... 163 1. Defining "Threat" to Senior Water Rights Holders ... 163 2. Showing the Need for a Watermaster Program ...... 164 V. THE FUNCTIONS OF WATERMASTERS ...... 164 A. Areas Without Watermasters ...... 165 B. General Powers ...... 166 1. Division of Water Rights ...... 166 2. Monitoring and Regulation ...... 166 3. Enforcement and Prevention of Waste ...... 167 C. Funding and Assessments ...... 168 D. The Rio Grande Water Master Program ...... 168 E. The South Texas WatermasterProgram ...... 170 F. The Concho River WatermasterProgram ...... 172 VI. CRISIS, CONTROVERSY, AND CONSERVATION ...... 172 A. Over-Drawn and Under-Enforced: The Texas Water Crisis ...... 172 B. The Controversy: Explaining Municipal Opposition ...... 174 C. The Promise of Watermasters: Markets and Conservation . 175 VII. CONCLUSION ...... 177 TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

I. INTRODUCTION

"The story of water law in Texas is also the story of its droughts."' Jack Pope, Texas Supreme Court Chief Justice

The Texas Water Code contains provisions for agency and court appointed watermasters, which are often revised, often controversial, and yet rarely utilized. Watermasters are the state's only dedicated enforcers of surface water rights.2 As of September 2005, three watermaster programs cover only nine of the twenty-three river basins in Texas.3 The current state of water needs, supplies, and rights might cause Texans to expand watermaster programs to enforce, market, and conserve water rights. This comment presents the tale of the Texas watermaster through a historical and legal analysis of surface water rights, and their current and future enforcement in Texas.

Figure 1' Watermaster Areas

Concho EConcho Watermaster N.Concho Not part of Rio Grande J Watermaster S.TX Watermaster 7 , Rio Grande Watermaster [ County Lines Streams Lakes N/Basin boundaries

San Antonio""aalp .V, -Guadalupe k Lavaca -Lavaca-Guadalupe Nuece 'San Antonio-Nueces

Rio Grande--_ Nueces-Rio Grande

200 0 200 400 Miles

1. In re the Adjudication of the Water Rights of the Upper Guadalupe Segment of the Basin, 642 S.W.2d 438, 441 (Tex. 1982). 2. Tex. Comm'n on Envtl. Quality, Petitionfor Watermasteron the Concho River, Docket No. 2000-0344-WR, at 31 (April 2, 2004) (quoting the testimony of Ricky Anderson, the Commission's Region 8 Director). Surface water represents sixty-six percent of the state's water available for consumption; TEXAS WATER DEVELOPMENT BOARD, WATER FOR TEXAs-2002 71 (2002). 3. See infra Figure 1. 4. Tex. Comm'n on Envtl. Quality, Map of WatermasterAreas,www.tceq.state.tx.us/compliance/ fieldops/wmaster/wmaster.html#mapl (last visited Jan. 24, 2006) (modified by author to reflect the new Concho Watermaster Program). 2006] TEXAS WATERMASTERS

II. THE ORIGIN OF THE TEXAS WATERMASTER

A. Watermasters in Western America: The Vision of J. W. Powell

The story of the watermaster in the United States predates the Texas tale by nearly a century and began with one of the West's most original thinkers: J.W. Powell.5 Major John Wesley Powell was a home-schooled, one-armed, Civil War veteran with no background in cartography, linguistics, or policymaking.6 In 1869 Powell set out to explore the Grand Canyon.7 He devoted the next fifty years of his life to understanding the arid West, mapping each region based upon drainage, and studying the languages of the indigenous tribes.8 Powell's careful observations led him to formulate revolutionary water policy, stressing regional oversight of resources.9 Addressing the Montana Constitutional Convention in 1889, Powell proposed self-governing water districts based within watershed areas with watermasters overseeing individual water rights.'° A number of states that Powell explored and mapped later came to adopt his water policy." Some of Powell's policies did not endure,' 2 but states readily adopted watermaster programs to oversee regional water rights. 3 States like Oregon appointed watermasters throughout the state to administer both surface and ground water rights in regions that covered natural watershed areas.' 4 Today California, 5 Colorado,' 6 Montana, 7 New ,' 8 and Oregon' 9 have watermaster programs based, in part, on Powell's philosophy.20

5. See WALLACE STEGNER, BEYOND THE HUNDREDTH MERIDIAN: JOHN WESLEY POWELL AND THE SECOND OPENING OF THE WEST, 314-15 University Press of Nebraska 1982) (1954). 6. WILLIAM DEBUYS ed., SEEING THINGS WHOLE: THE ESSENTIAL JOHN WESLEY POWELL, 6-7, 13 (Island Press 2001). 7. Id. at6-7, 13, 146. 8. Id. at 18. 9. Id. at 146-48, 248-49. 10. See STEGNER, supra note 5, at 314-15. 11. See Gregory J. Hobbs, Jr., Colorado's 1969 Adjudication and Administration Act: Settling In, 3 U. DENV. WATER L. REV. 1, 2-3 (1999). 12. DEBUYS, supra note 6. 13. See, e.g., N.M. STAT. ANN. §§ 72-3-1 to -5 (1978) (passed by the New Mexico State Legislature in 1907); Cal. Dep't of Water Servs., Watermaster Overview, Activities, and Responsibilities, available at http://wwwdpla.water.ca.gov/sdlwatermaster/watermaster-program.html (stating that the watermaster program in California began in 1924). 14. In re Willow Creek, 144 P. 505,510 (Or. 1914) (citing 1913 Or. Laws 273). "The act divides the state into two water divisions; provides for the election of a state engineer, and a superintendent for each division; authorizes the creation of the necessary number of water districts and the appointment of a water master for each district." Id. at 510. 15. CAL. WATER CODE §§ 4000-03 (Deering 2000). 16. COL. REV. STAT. ANN. §§ 37-40 to -98 (West 2005). 17. MONT. CODE ANN. §§ 3-7-301 to -311 (2004). 18. N.M. STAT. ANN. §§ 72-3-2 to -5 (Michie 2004). 19. OR. REV. STAT. ANN. §§ 540.010-150 (West 2003). 20. See STEGNER, supra note 5, at 314-15; see also 1972 Oki. Sess. Laws tit. 256, § 33 (repealing TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

The Texas watermaster, however, grew out of the law of equity and the Texas Rules of Civil Procedure, and not J.W. Powell's philosophy. 2'

B. Texas Droughts and Water Law Before 1952

Texas droughts in 1883 prompted the 21 st Legislature2 2 to develop a "dual system of surface water rights. 2 3 This dual system melded the sparsely regulated riparian approach 4 with the new and more regulated appropriative water rights system.25 Under the appropriation system, the legislature mandated that "first in time is the first in right. ' 26 This "first in time" rule gave individuals with "senior" water rights priority over individuals with more recent "junior" water rights. 7 After droughts in 1909 and 1910, the 33rd Legislature created the Board of Water Engineers in 1913 to oversee surface water rights in Texas.28 That legislature also limited riparian rights to water rights holders with grants between 1840 and 1895 and domestic and livestock water users.2 9 These changes did not affect groundwater, which the legislature and courts have addressed separately throughout Texas history.30 Four years later another drought struck Texas, and its citizens responded by adding "the 'Conservation Amendment' 3' to the Texas Constitution,

Oklahoma's watermaster program). 21. Hidalgo Co. Water Control & Improv. Dist. v. Cameron Co. Water Control & Improv. Dist., 253 S.W.2d 295, 300 (Tex. Civ. App.-San Antonio 1952, writ refd) (upholding the district court's appointment of a master in chancery under Section 171 of the Texas Rules of Civil Procedure, which allows special masters for "good cause"). 22. In re the Adjudication of the Water Rights of the Upper Guadalupe Segment of the Guadalupe River Basin, 642 S.W.2d 438, 441 (Tex. 1982). 23. Glenn Jarvis, The Current State of Surface Water, THE CHANGING FACE OF WATER RIGHTS IN TEXAS 2002 § 2, 1 State Bar of Texas Continuing Legal Education ed., 2002 (discussing in detail Texas's transition from a riparian rights system to a permit based appropriation system). 24. Id. at 3. At common law, an owner of land on a stream or river could claim riparian rights to make reasonable use of normal flows from a watercourse adjacent to the land. Id. at 3. But the same rights did not attach to storm or flood flows, and a riparian could not unreasonably interfere with other riparian usage. Id. at 3. See Mot v. Boyd, 116 Tex. 82, 286 S.W. 458, 459 (1926) (holding that appropriation of storm and flood waters was constitutional and did not violate riparian rights). 25. Jarvis, supra note 23, at 1-3. 26. See TEx. WATER CODE ANN. § 11.027 (Vernon 2000); Matagorda Canal Co. v. Markham IT. Co., 154 S.W. 1176, 1180 (Tex. Civ. App.-Galveston 1913, no writ). 27. Bartley v. Sone, 527 S.W.2d 754, 759 (Tex. App.-San Antonio 1975, writ ref d). 28. Irrigation Act of 1913, 33d Leg., R.S., ch. 171, §§ 1-102, 1913 Tex. Gen. Laws at 358-79. The TCEQ is a descendant of the Board of Water Engineers, which was the first agency in Texas of its kind. Tex. Comm'n on Envtl. Quality, History of the TCEQ, http://www.tceq.state.tx.us/about/tceqhistory.html. 29. Jarvis, supra note 23, at 1-3. 30. Id. This comment does not discuss groundwater or groundwater law. See generally Chris Lehman, Comment, Hung Out to Dry?: GroundwaterConservation Districtsand the Continuing Battle Save Texas's Most Precious Resource, 35 TEX. TECH L. REv. 101 (2004) (discussing the history of and current issues in Texas groundwater law). 31. TEx. CONST. art. XVI, § 59 (added Aug. 21, 1917; proclamation October 2, 1917); see Dallas Hunting & Fishing Club v. Dallas County Bois D'Arc Island Levee Dist., 235 S.W. 607, 609 (Tex. Civ. 2006] TEXAS WATERMASTERS

' 3 mandating conservation of public waters. ' That same year, the legislature enabled the Board of Water Engineers to adjudicate water rights.33 But this power of adjudication was short-lived because the Supreme Court of Texas, citing separation of powers, struck down the Board's adjudicatory function.34 Following the court's action, the Texas Legislature made no significant changes to water rights administration for forty years.35

C. Judicial Creation

Sixty-two years after J.W. Powell advocated watermasters in the West, the Texas Courts employed a "Master in Chancery" during the Rio Grande water rights disputes.36 In 1952, the effects of the worst drought in Texas history eventually found a way into the state's courts. 37 The 107th District Court in Cameron County fashioned the master in chancery to aid in the adjudication of Rio Grande water rights.38 The master in chancery oversaw initial water disputes and preliminary hearings, made reports and recommendations to the court, and enforced court rules and regulations.3 9 Local water rights holders, acting through water improvement districts, immediately challenged the validity of the master in chancery.' The Fourth Court of Appeals in San Antonio allowed the district courts to use the master, but stripped him of his enforcement power.4 A decade later, the courts still employed the master in

App.-Dallas 1921, no writ) (quoting art. XIV, § 59 in its original form). 32. In re the Adjudication of the Water Right of the Upper Guadalupe Segment of the Guadalupe River Basin, 642 S.W.2d 438, 440 (Tex. 1982). 33. Jarvis, supra note 23, at 1. 34. Bd. of Water Eng'rs v. McNight, Ill Tex. 81,97,229 S.W.301,307 (1921) (holding that the legislature's attempt to confer judicial power to an executive agency violated the state Constitution). 35. See History of the TCEQ, supra note 28; Jarvis, supra note 23, at 2. 36. Hidalgo Co. Water Control & Improv. Dist. v. Cameron Co. Water Control & lmprov. Dist., 250 S.W.2d 941, 943 (Tex. Civ. App.-San Antonio 1952, no writ). 37. In re Guadalupe, 642 S.W.2d at 441. 38. Hidalgo Co. Water Control & Improv. Dist., 250 S.W.2d at 943. 39. Id. [T]he Master by the trial court's order was empowered to hear controversies and report evidence for consideration and final determination by the court; authorized to hold hearings as to rules and regulations; prepare such rules as will accomplish the purpose of insuring reasonable use by all persons, and those regulations were to "be submitted to the Court for hearing and final determination." He was told to recommend amendments and additions from time to time and those recommendations were to have the "final action by the Court." He was empowered to advise the court of the names of other interested persons. The court appointed a Master, and that he may have been given excessive powers which are matters for correction on appeal, does not make him something else. The enforcing tool, and the only tool mentioned in the order, from beginning to end, is the judicial power of injunction permitting and restraining the use of water, the amount of which would be variable and would require the services of a Master. Id. at 944. 40. Id. at 943-44. 41. Id. at 944. Hidalgo Co. Water Control & Improv. Dist. v. Cameron Co. Water Control & Improv. Dist., 253 S.W.2d 294,300 (Tex. Civ. App.-San Antonio, 1952, writ ref d). The original master TEXAS TECH ADMINISTRATIVE LA W JOURNAL [Vol. 7:143 chancery, but began referring to the position as "water master" in reference to legislative action.42

III. LEGISLATIVE HISTORY

As the 1950s drought subsided, 3 the Texas Legislature codified the 4 judicially conceived watermaster." While the drought ended in 1956, ' the resulting litigation continued until 1970.' To hedge future water rights 47 disputes, the Texas Legislature passed the Water Rights Adjudication Act. This 1967 Act granted the Texas Water Commission (Commission) new power over surface water rights, including the power to implement watermaster programs.48 Coinciding with minor droughts in the 1970s,49 the Texas Legislature restructured its water regulatory agencies.50 After yet another drought, which lasted from 1980 to 1983," the 70th Legislature gave water rights holders the option to petition the Commission to create a watermaster program. 52 The legislature added Senate Bill 1 and Senate Bill 1406 after successive droughts in 1995 and 1996 to create new drought response tools and enlarge the powers of watermasters and their deputies.13 The 79th Legislature turned a petition for a watermaster program along the Concho River into a division of the South Texas Watermaster Program. 4

in chancery was O.E. Van Berg. Hidalgo Co. Water Control & Improv. Dist., 250 S.W.2d at 942. 42. Hidalgo Co. Water Control & Improv. Dist. v. Boysen, 354 S.W.2d 420,421 (Tex. Civ. App.- San Antonio 1962, writ ref d); see Water Master-Appointment in Suit Where State a Party-Division of Waters of Surface Streams, 55th Leg., R.S., ch. 458, § 1, 1957 Tex. Gen. Laws at 1347. 43. Handbook of Texas Online, Droughts, http://www.tsha.utexas.edu/handbook/online/articles/ view/DD/ybd I.html [hereinafter Handbook of Texas, Droughts]. 44. § 1, 1957 Tex. Gen. Laws at 1347. 45. Handbook of Texas, Droughts, supra note 43. 46. In re the Adjudication of the Water Rights of the Upper Guadalupe Segment of the Guadalupe River Basin of the Guadalupe River Basin, 642 S.W.2d 438, 442 (Tex. 1982). 47. Id. 48. Water Rights Adjudication Act, 60th Leg., R.S., ch. 45, §§ 8(b)-(e), 1967 Tex. Gen. Laws at 91. 49. Handbook of Texas, Droughts, supra note 43. 50. See History of the TCEQ, supra note 28. 51. Handbook of Texas, Droughts, supra note 43. 52. Watermaster System for the Texas Water Commission, 70th Leg., R.S., ch. 779, § 1, 1987 Tex. Gen. Laws at 2762. 53. Martin Hubert & Bob Bullock, Senate Bill 1, The First Big and Bold Step Toward Meeting Texas's Future Water Needs, 30 TEX. TECH L. REV. 53, 55 (2001). 54. House Bill 2815, 79th Leg., R.S., ch. 749, § 1, 2005 Tex. Gen. Laws at 2576, available at www.capitol.state.tx.us/tlo (select "bill text search," then 79th Leg. Regular Session (2005), and enter "Concho"). 20061 TEXAS WATERMASTERS

A. Codification of the Court-Appointed Watermaster

In 1957 the Texas Legislature brought the master in chancery under statutory control. 5 The 1957 Act clarified the role, limitations, and funding requirements for the court's master in chancery in the adjudication of water rights. 6 Under this statute, a "water master" was appropriate "in any suit where the [state] is a party and the purpose of the suit is to determine the rights of parties to divert or use [surface water]," with certain limitations. 7 The legislature mandated a method of financing court-appointed watermasters that required the water rights holders in the adjudication proceedings, and not the taxpayers at large, to bear the costs of such programs. 8 The legislature also limited the geographical power of the watermaster in two ways. The first limitation allowed a watermaster to cover no more than four counties.59 This limitation also served to expand a court's jurisdiction to implement a watermaster program into adjoining counties. 60 The second, clearer limitation prohibited watermasters from acting "both upstream and downstream from any reservoir constructed on any surface stream [in Texas].'61 In other respects, the legislature left the court alone to define the contours of the watermaster program, such as duties, salaries, deputies, and terms.62 The legislature also expanded, or at least preserved, the "power to police the stream ' 63 that the courts had previously limited.' Additionally, the Act legitimized a court's power to withhold water rights of parties who violated any court order.65 While challenges to court-appointed watermasters disappeared after the 1957 Act, apparently, so did the need for court-appointed watermasters.66 The courts continued to operate the Rio Grande Watermaster as litigation along the river continued, but appointed no new watermasters.67

55. Water Master-Appointment in Suit Where State a Party-Division of Waters of Surface Streams, 55th Leg., R.S., ch. 458, § 1, 1957 Tex. Gen. Laws at 1347. 56. Id.; cf. Hidalgo Co. Water Control & Improv. Dist. v. Cameron Co. Water Control & Improv. Dist., 250 S.W.2d 941, 942 (Tex. Civ. App-San Antonio 1952, writ ref'd). 57. § 1, 1957 Tex. Gen. Laws at 1347. 58. Id. 59. Id. 60. See In re the Adjudication of the Water Rights of the Upper Guadalupe Segment of the Guadalupe River Basin, 642 S.W.2d 438, 442 (Tex. 1982) (holding that "[o]rdinary trial rules were inadequate to regulate an entire waterway"). 61. § 1, 1957 Tex. Gen. Laws at 1347. 62. Id. at 1347-48. 63. Id. at 1347. 64. See Hidalgo Co. Water Control & Improv. Dist. v. Cameron Co. Water Control & Improv. Dist., 250 S.W.2d 941,942 (Tex. App-San Antonio 1952, writ ref'd) (limiting the watermaster's power relating to the enforcement of rules and regulations). 65. § 1, 1957 Tex. Gen. Laws at 1347, 1348. 66. No mention of court-appointed watermaster programs besides the Rio Grande Watermaster appeared in any search, interview, or other reference. 67. See Hidalgo County Water Control & Improvement Dist. No. 1 v. Boysen, 354 S.W.2d 420, 422 (Tex. Civ. App.-San Antonio 1962, writ ref'd) (involving "payment of attorney's fees to the attorney TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

B. The Water Rights Adjudication Act of 1967 and the Commission- Appointed Watermaster

In order to hedge future water rights suits, the Texas Legislature passed the Water Rights Adjudication Act (WRAA).6" The legislature patterned the WRAA after the Oregon Water Act of 1909 and its subsequent amendments.69 The 1967 Act significantly enlarged the Commission's role in overseeing surface water rights and eliminated riparian rights except for domestic and 7 livestock use. ' The WRAA also required water rights holders to file records of surface water use with the Commission, 7' giving Texas its first inventory of all surface water rights in the state.72 The legislation then allowed the Commission to make a preliminary determination on the adjudication of water rights.73 The adjudication process was critical to the Commission-appointed watermaster program for two reasons. First, under the WRAA, the watermaster could only administer adjudicated water rights. 74 The watermaster had little, if any, authority until adjudication of all water rights within the water district was complete.75 Second, the legislature expressly declared that if the courts found the adjudication process unconstitutional, then the entire act would be 76 "null, void and of no force and effect., The legislature structured the new statute to avoid the "separation of powers" violation that spelled the demise of the Board of Water Engineers' administrative adjudication powers.77 The WRAA faced and survived such a separation of powers attack in 1982.78 The Texas Supreme Court found that, unlike the 1917 Irrigation Act, the WRAA provided a constitutional adjudication process through a "two-step procedure.'79 The Commission first determined the legitimacy of the claims

for the water master in a pending suit"). 68. In re the Adjudication of the Water Rights of the Upper Guadalupe Segment of the Guadalupe River Basin, 642 S.W.2d 438, 442-43 (Tex. 1982). 69. Id. 70. Jarvis, supra note 23, at 3 (describing riparian rights and past limitations of riparian rights by the state legislature). 71. Water Rights Adjudication Act, 60th Leg., R.S., ch. 45, § 4(c), 1967 Tex. Gen. Laws at 87-88. 72. In re Guadalupe, 642 S.W.2d at 442. 73. § 4(c), 1967 Tex. Gen. Laws at 87-88. 74. Id. at91. 75. See id. 76. Id. at 90. 77. Bd.of Water Eng'rs v. McNight, 111 Tex. 81, 97, 229 S.W. 301, 307 (1921). 78. In re the Adjudication of the Water Rights of the Upper Guadalupe Segment of the Guadalupe River Basin, 642 S.W.2d 438, 442 (Tex. 1982) (citing McNight, 229 S.W. at 307). 79. Id. at 443. See Schero v. Tex. Dep't of Water Res., 630 S.W.2d 516, 518 (Tex. App., 1982), aff'd in part, rev'd in part by 642 S.W.2d 446 (Tex. 1982) (describing the adjudication process). The adjudication, authorized by the terms of the Water Rights Adjudication Act of 1967, was commenced in 1976 and included public hearings, receipt of evidence, examination of engineer's reports, filing of briefs, and finally a contest hearing in March of 1978. These proceedings culminated in the Final Determination, in which the Commission ruled upon all the 2006] TEXAS WATERMASTERS of water rights through a series of pubic hearings.80 After the administrative process, the Commission filed its final determination in a district court where the water rights were located.8 ' The district court then decided "all issues of law and fact independently of the Commission's determination. ' 2 The Oregon Supreme Court, upholding a similar statute passed in 1913,83 rationalized the adjudication process by finding that the legislature merely transferred "master in chancery" duties to a commission." Texas, unlike Oregon, did not mandate that each region appoint a 8 watermaster, but instead left the decision to the Commission. ' Texas's Commission-appointed watermaster also differed from the old master in chancery in a number of ways. Notably, the Commission-appointed watermaster fulfilled the role of enforcer8 6 because the Commission already filled other functions of the master in chancery. 87 In contrast to the court- appointed watermaster, the legislature explicitly defined the Commission- appointed watermaster's duties:

(1) dividing waters within the 'division in accordance with the adjudicated water rights;'

claims made to water rights in the Watershed. Thereafter, this Final Determination was filed in the District Court, where Appellant was the only one of 246 claimants to note his exception to the rulings. The court severed the Appellant's exceptions from the remainder of the action, and entered final judgment as to the satisfied parties. The court then considered Appellant's exceptions along with the record of the administrative proceeding; sitting without ajury, the court entered its order affirming the Final Determination as it related to Appellant's claims. Appellant then pursued his challenge by appealing the trial court's judgment. Schero, 630 S.W.2d at 518. 80. 1967 Tex. Gen. Laws at 87. 81. Id.at 89. 82. Id.at 90. 83. 1913 Or. Laws 273; see Inre Willow Creek, 144 P. 505, 510 (Or. 1914). 84. Willow Creek, 144 P. at 510 (Or. 1914) (describing the role of a court appointed referee); cf. Hidalgo Co. Water Control & Improv.Dist. v.Cameron Co.Water Control & Improv. Dist., 250 S.W.2d at 941, 943-44 (discussing the role of a master in chancery as a receiver in cases involving supersedeas bonds). At the time this case was decided, Oregon's Board of Control and State Engineer played an analogous role to Texas's Commission and executive director: The act .. . authorizes the creation of the necessary number of water districts and the appointment of a water-master for each district. It states that [a] superintendent shall have general control over the water-masters of the several districts within his division, execute laws relative to the distribution of water, perform such other functions as shall be assigned to him, and have authority to make such reasonable regulations to secure the equal and fair distribution of water in accordance with the determined rights as may be needed in his division, not inconsistent with the laws of the state. Willow Creek, 144 P. at 510; cfTEx. WATER CODE ANN.§§ 5.108, 11.325-26 (Vernon 2000) (describing the procedures for appointing an executive director and dividing the state into water divisions). 85. §§ 11.326, 11.402(a), 11.45. 86. § 4(c), 1967 Tex. Gen. Laws at 91-92. 87. Compare § 4(c), 1967 Tex. Gen. Laws at 87-89 (defining the role of the Commission in the adjudication process) with Hidalgo Co. Water Control & Improv. Dist., 250 S.W.2d at 944 (defining the role of the master in chancery). TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

(2) monitoring and regulating water control and diversion works on reservoirs and streams; (3) preventing waste of water; (4) giving parties notice of state water law and Commission regulations;8 and (5) enforcing Commission orders to adjust, limit, or withhold water diversion by violators of water laws or Commission orders.8 9

Conversely, the legislature exerted much less control than the courts over the Commission in defining the geographical limitations of a watermaster program. The WRAA allowed the Commission to divide the state into water divisions and to appoint one watermaster per water division. 90 Conceivably, the Commission could create a watermaster program which covered more than four counties, straddled both sides of a reservoir, and controlled many rivers.9 1 The WRAA also expressly authorized Commission-appointed watermasters to fit all pumping equipment and diversion works with water meters and locks.92 The legislature gave the public a limited right to challenge the actions of Commission-appointed watermasters through an application for relief but left ultimate control with the Commission. 93 In other respects, the two Texas watermaster programs were substantially alike-a result of legislative delegation as much as legislative design. 94 The Commission and the courts had discretion over creation, appointment, supervision, additional staff, and termination of watermasters. 95 Public input or control, however, did not figure significantly into the creation of either type of program: After their creation, watermasters under both programs served at the will of the Commission or court.96 Other aspects of the programs, such as financing and relationship after the adjudication process, were substantively similar but procedurally disparate. Both the Rio Grande and the South Texas programs used assessment and reimbursement schemes to finance the programs. 97 The courts and the

88. § 4(c), 1967 Tex. Gen. Laws at 91-92 (codified at § 11.327). 89. Id. at 92; cf.Master-Appointment in Suit Where State a Party-Division of Waters of Surface Streams, 55th Leg., R.S., ch. 458, § 1, 1957 Tex. Gen. Laws at 1347 (giving the courts the power to define the duties of court-appointed watermasters); OR. REV. STAT. § 540.045 (2003) (defining the duties of Oregon agency-appointed watermasters). 90. § 4(c), 1967 Tex. Gen. Laws at 91. 91. Id.; see § 1, 1957 Tex. Gen. Laws at 1347 (defining the geographical limits of the court- appointed watermaster). 92. § 4(c), 1967 Tex. Gen. Laws at 92. 93. Id. at 91. 94. Compareid. (outlining the Commission's authority to appoint and remove watermasters) with § 1, 1957 Tex. Gen. Laws at 1347 (establishing and limiting the courts' power to appoint watermasters). 95. Compare § 4(c), 1967 Tex. Gen. Laws at 91 with § 1, 1957 Tex. Gen. Laws at 1347. 96. § 4(c), 1967 Tex. Gen. Laws at 91; § 1, 1957 Tex. Gen. Laws at 1347. 97. § 4(c), 1967 Tex. Gen. Laws at 91 (describing the financing of Commission-appointed watermasters); § 1, 1957 Tex. Gen. Laws at 1348 (describing the financing of court-appointed 20061 TEXAS WATERMASTERS

Commission both put forth the initial compensation for the program, assessed the annual costs, and then billed the water right holders within the water division accordingly.9" Under both programs, any person or entity with a delinquent account would not receive water.99 The main procedural difference between the financing schemes was the requirement on the Commission to hold a public hearing on the assessment prior to billing.'0° Barring litigation, this assessment hearing also constituted the only forum for public involvement and scrutiny of either type of program.'°' The court and Commission programs became functionally indistinguish- able when the Commission took over the Rio Grande master in chancery program after the passage of the WRAA. 01 2 The Commission also created another watermaster program under the WRAA in South Texas in 1990.'03 Both programs still exist and are currently the only such programs in operation.3 4

C. The 1977 Department of Water Resources Act and the History of the "Commission"

The Department of Water Resources Act reorganized the administration of the water code, but did not substantively alter state water law.'0 5 The purpose of the Act was to consolidate the "duties, responsibilities, and functions of the Texas Water Quality Board and Texas Water Rights Commission" into a single agency: the Department of Water Resources.'°6 The Department held "primary responsibility for implementing the... laws of [Texas] relating to water," including the watermaster programs.' °7

watermasters). 98. § 4(c), 1967 Tex. Gen. Laws at 91 (describing billing procedures of Commission-appointed watermasters); § 1, 1957 Tex. Gen. Laws at 1348 (describing billing procedures of court-appointed watermasters). 99. § 4(c), 1967 Tex. Gen. Laws at 91, 93. 100. Id. 101. Id.; § 1, 1957 Tex. Gen. Laws at 1347; see Hidalgo County Water Control & Improvement Dist. No. 1 v. Boysen, 354 S.W.2d 420, 422, nl (Tex. Civ. App.-San Antonio 1962, writ ref'd) (involving litigation arising from a dispute between a court-appointed watermaster and the water district). 102. Guadalupe- Auth., TNRCC WatermasterOperations Summary, Presented at the Drought Management Forum, August 17, 2000, 1, availableat http://www.gbra.org/files/pdf/newsreleases /2001/WatermasterNotesFB.pdf (noting that both watermaster programs in existence in Texas are governed by section 11.326 of the Texas Water Code, the codification of WRAA, § 8(b)). 103. Id. 104. Id. 105. Department of Water Resources, 65th Leg., R.S., ch. 870, § 1, sec. 5.018, 1977 Tex. Gen. Laws at 2207, 2208 amended by Act of Aug. 12, 1991, 72d Leg., 1st C.S., ch. 3, § 1.003, 1991 Tex. Gen Laws at 4, 5. 106. TEx. WATER CODE ANN. § 5.018 (Vernon 2000). 107. §5.011. TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

A 1977 statute placed the Texas Water Quality Board under a more corporate structure." 8 The central management rested with an executive director, while a Board or Commission reviewed the executive director's actions and made policy suggestions."° The executive director, although subject to Commission review, gained broad discretion over the watermaster' s appointment, staff, facilities, direction, and removal."' In other words, the executive director chose who would be watermaster, how long the watermaster would serve, and what additional resources the watermaster would receive. Additionally, in any "segment or basin in which the office of watermaster [was] vacant, the executive director [had] the powers of a watermaster.""'' 1 This Act embodied the phenomenon of administrative reshuffling in administration of Texas environmental law."12 In 1985, the legislature split the Department of Water Resources into the Texas Water Commission and the Texas Water Development Board.1 3 The legislature, in 1991, consolidated several agencies, including the Texas Water Commission into the Texas Natural Resource and Conservation Commission (TNRCC). 114 The legislature later renamed the TNRCC the "Texas Commission on Environmental Quality" (TCEQ)."5 While the name of the agency and entity to which a watermaster reported changed, the functions of the watermaster remained essentially the same.

D. The 1987 Watermaster System Act and the Watermaster by Petition

The Watermaster System Act (WSA) appeared to add very little to watermaster law because of its similar language and structure 16 and lack of

108. See § 1, 1977 Tex. Gen. Laws at 2211 (amended 1991) (codified at § 5.171). 109. § 5.221; § 1, 1977 Tex. Gen. Laws at 2207, 2210 (amended 1991). 110. Watermaster System for the Texas Water Commission, 70th Leg., R.S., ch. 779, § 1, secs. § 11.453(f), 11.457, 1987 Tex. Gen. Laws at 2762. 111. Id. (codified at § 11.453(e)). 112. See History of the TCEQ, supra note 28. 113. Act of June 15, 1985,69th Leg., R.S., ch. 795, §§ 1-10, 1985 Tex. Gen. Laws at 2719, 2719- 2829. 114. Act of August 12, 1991, 72d Leg., R.S., ch. 3, §§ 1.001-.017, secs. 5.001-.222, Tex. Gen. Laws at 4, 5-7. 115. Act of April 20,2001, 77th Leg., R.S., ch. 965, § 18.01,2001 Tex. Gen. Laws at 1933, 1985; City of San Angelo v. Tex. Natural. Res. & Conservation Comm'n, 92 S.W.3d 624 (Tex. App.-Austin 2002, no pet.) By statute effective September 1, 2001, the legislature changed the name of the Texas Natural Resource Conservation Commission to the Texas Commission on Environmental Quality, to be effective January 1, 2004. The statute granted the TNRCC authority to adopt a timetable for phasing in the change of the agency's name, so that until January 1, 2004, the agency may perform any act authorized by law under either title. City of San Angelo, 92 S.W.3d at 626, n. 1;see also History of the TCEQ, supra note 28. 116. Watermaster System for the Texas Water Commission, 70th Leg., R.S., ch. 779, § 1,secs. § 11.451-.458, 1987 Tex. Gen. Laws at 2762. 2006] TEXAS WATERMASTERS effect on earlier programs.'17 Despite appearances, the WSA created new, substantively distinct, and potentially powerful watermaster law. The program has never realized its potential because neither the Commission nor petitioners have successfully implemented the legislation." 8 The watermaster programs under the WRAA and WSA would share many characteristics. The basic duties of watermasters listed in section eight of the WRAA remain largely the same in the WSA. 9 Additionally, the two statutes rely on the same section of the water code to finance programs and assess water rights holders. 2 ° The Commission could run both types of programs under a single account.12' Like the 1967 Act, "a person dissatisfied with any 22 action of a watermaster may apply" to the Commission for relief.' Unlike the statutes in 1957 and 1967, the WSA increases involvement and scrutiny during the creation of a watermaster program. 23 Members of the public who hold water rights may petition the Commission for a watermaster program. 124 The statute also requires that the Commission hold a public meeting where water rights holders may challenge the creation of a 25 watermaster program.1 While the 1987 Act gives some concessions to water-rights holders, the agency retains control over all decisions making authority for watermaster programs. 126 Most notably, the Commission may reject a petition from a water-rights holder 127 or start a new watermaster program on its own motion.'28 Either way, the creation of a new program under the WSA rests upon the Commission's determination of whether or not "a threat exists to the rights of senior water rights holders."' 129 The Commission may enforce orders to protect water-rights holders through injunctions obtained by the Texas Attorney

117. Id. (codified at TEX. WATER CODE ANN. § 11.458). 118. Guadalupe-Blanco River Auth., supra note 102 (noting that both watermaster programs in existence in Texas were created by section 11.326 of the Texas Water Code.) 119. § 11.454. 120. § 11.455 (mandating that assessments and financing must be in accordance with section 11.329). 121. See id.; § 11.329 (allowing the executive director to deposit funds to a single water master fund). 122. § 11.453(g). 123. See City of San Angelo v. Tex. Natural. Res. & Conservation Comm'n, 92 S.W.3d 624, 630 (Tex. App.-Austin 2002, no pet.) (holding that the Open Meetings Act governed the watermaster hearing process and that the purpose of the hearing was to "safeguard the public's interest in knowing the workings of its governmental bodies."); see also TEX. GOV'T CODE ANN. § 551.041 (Vernon 2004) (codifying relevant portions of the Open Meetings Act). 124. § 11.452(c) (requiring a petition signed by at least twenty-five water ights holders). 125. Id. See generally, City of San Angelo, 92 S.W.3d at 624 (involving a disputed watermaster hearing process). 126. §§ 11.451-52, 11.453(c). 127. § 11.452(c). 128. §§ 11.453(c)-(d), 11.453(f), 11.457. 129. § 11.452(c). 156 TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

3 General.' ' The legislature exempts such orders from the normal procedural 1 requirements, and the orders are not subject to appeal. 31 The legislature also allows the Commission greater autonomy in setting the duties and authority of watermasters and their staff. 32 While watermasters under the WRAA may only regulate surface water flows, the Commission could conceivably charge a WSA watermaster with any power within the limits of the Commission's authority. 33 The WSA also reflects changes in agency structure: subject to Commission review, the executive director appoints and manages watermaster programs. 134 The WSA does restrict the executive director, however, from appointing as watermaster any individual owning water rights or land adjacent to a waterway in the river basin.'35 The statute also subtly yet significantly changes watermasters' scope and authority. Theoretically, the Commission may delegate any duties to WSA watermasters in addition to those duties listed in the WRAA. 36 But a WSA watermaster program may only operate along "a river basin or segment of [a] river basin" and not within a "[w]ater division."' 37 Therefore, the Commission could not establish a WSA program over an area defined solely by the Commission. 38 This limitation, however, is somewhat misleading: river basins in Texas cover thousands of square miles.'39 The 70th Legislature also substituted the word "authorized" for "adjudicated."'" This substitution may potentially expand the watermaster' s and Commission's authority by allowing the watermaster to enforce the Commission's determinations of water rights without an independent court determination.' 4' The use of "authorization"

130. § 11.456. 131. Id. 132. § 11.454(3) (allowing watermasters "to perform any other duties and exercise any authority directed by the commission"). 133. Compare § 11.454 (listing the duties of a WSA watermaster), with § 11.327 (listing the duties of a WRAA watermaster). 134. See §§ 11.453(c)-(d). 135. § 11.453. 136. § 11.454. 137. Compare§ 11.453(a) (defining the geographic scope of a WSA watermaster), with § 11.326(a) (defining the geographic scope of a WRAA watermaster). 138. See Watermaster Operations Summary, supra note 102 (describing the South Texas Watermaster program, a WRAA program, which covers multiple river basins). 139. See Bureau of Economic Ecology, The University of Texas at Austin, River Basin Map of Texas (1996) (on file with author) (relaying that the Brazos and Basins cover 42,800 square miles and 39,893 square miles, respectively). 140. See § 11.454(1) (establishing the terms of a division under the WSA along "authorized" water rights); § 11.327(a) (establishing the terms of a division under the WRAA along "adjudicated" water rights). 141. See In re the Adjudication of the Water Right of the Upper Guadalupe Segment of the Guadalupe River Basin, 642 S.W.2d 438, 441 ('rex. 1982) (holding that a two step procedure made the act constitutional, but not commenting on whether any other scheme of authorizing water rights would be constitutional). 2006] TEXAS WATERMASTERS might also reflect the legislature's acknowledgment that courts had adjudicated most water rights in Texas by the time the statute went into effect.'42 The legislature and Commission originally planned to install WSA watermaster programs over a majority of river basins from 1993 to 2008, but cancelled the plan before its initiation.'43 The WRAA, and not the WSA, governs the watermaster programs that exist in Texas. 1"

E. The 75th Legislature,Senate Bill 1, and Senate Bill 1406

Thirty years after the passage of the WRAA and ten years after the passage of the WSA, the 75th Legislature passed two statutes that significantly redefined not only water law concerning watermasters, but water law in general.'45 The authors of Senate Bill 1 called the bill "the most exhaustive rewrite of Texas water law in the last thirty years."' 46 The contribution of Senate Bill 1 to watermaster law, however, was small but meaningful. 47 Senate Bill 1406, on the other hand, was an exhaustive rewrite of section eight of the WRAA-the legislation that created the Commission-appointed 8 watermaster. 14 Senate Bill 1 was "a comprehensive water resource planning, management, and development bill:"

[The 75th Legislature designed Senate Bill I to] improve[] the state's ability to handle Texas's future droughts; . . . revise[] and update[] legislation concerning interbasin transfers, reuse of water, conservation, and environmental water needs.., allow Texas to absorb its explosive population

142. See City of Marshall v. City of Uncertain, 124 S.W.3d 690,692 (Tex. App.-Austin 2003, no pet.) (involving an adjudication of water rights completed in 1986); Schero v. Texas Dep't of Water Res., 630 S.W.2d 516, 518 (Tex. App.-Waco 1982) affid in part,rev'd in part,642 S.W.2d 516 (Tex. 1982) (involving an adjudication of water rights completed in 1976); Jarvis, supra note 23, at 2 (stating that all water rights in the state had been identified and quantified in every part of the state except El Paso); Telephone Interview with Ricky Anderson, TCEQ Regional Director, in San Angelo, Tex. (Jan. 7, 2005) (stating that most of the water rights in Texas were adjudicated by the early 1980s). 143. Kevin Smith, Texas Municipalities' Thirstfor Water, 45 BAYLOR L. REV. 685, 716 (1993) ("The short term plan, from 1993 to 2008, calls for the Texas Legislature to create a strong local management entity such as a Watermaster, reduce annual pumping to 450,000 acre-feet, and establish a water rights allocation system."); Telephone Interview with Ricky Anderson, TCEQ Regional Director, in San Angelo, Tex. (Jan. 7, 2005) (stating that his office received an order to expand the regional office for a watermaster program in 1992, but the Commission rescinded the order later that year). 144. Guadalupe-Blanco River Auth., supra note 102. 145. Hubert & Bullock, supra note 53, at 54. 146. Id; see Jarvis, supra note 23, at 5-6 (explaining the effect of Senate Bill I on current surface water rights). 147. Water-Development and Management, 75th Leg., R.S., ch. 1010, § 3.01, 1997 Tex. Gen. Laws at 3610, 3627 (codified at TEx. WATER CODE ANN. § 11.0843); Hubert & Bullock, supra note 53, at 59. 148. See Act of June 17, 1997, 75th Leg., R.S., ch. 696, §§ 1-5, 1997 Tex. Gen. Laws at 2333, 2333-35 (codified as an amendment to §§ 11.326-.329). TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

growth by enhancing water marketing, financing future water infrastructure needs, and beginning the debate on how the state will deal with the changing water demands.' 49

Senate Bill I proposed to enforce these programs through cancellation of water rights and increased the authority of watermaster to issue field citations. 5 ° Despite these sweeping changes to water law, only one section of Senate Bill 1 changed the watermaster program.' 5 ' This section allows watermasters or watermaster deputies to issue field citations after witnessing a violation of 152 water rights law or agency orders. Senate Bill 1406 changed fundamental aspects of WRAA watermasters in the same way that Senate Bill 1 changed fundamental aspects of the Texas Water Code as a whole. 1' Senate Bill 1406 subtly and substantively changed WRAA watermaster programs by strictly limiting the duties and authority of WRAA watermasters.'5 4 This change appears to have no effect on the WSA, which has no such limitations on duties or authority.'55 Senate Bill 1406 also incorporated watermaster advisory committees (WACs) into every water division with a watermaster program. 5 6 The executive director establishes each committee, appointing nine to fifteen members, and may assign additional committee duties as needed.'5 7 Senate Bill 1406 specifies that WAC members hold water rights in that particular water division and serve two-year terms without compensation.'58 WAC members review and comment on the watermaster's budget and recommend changes to the watermaster program to the Executive director.'59 The 70th Legislature placed the committees in WRAA water divisions with no mention of committees for WSA watermaster programs operating in river basins. 16°

149. Hubert & Bullock, supra note 53, at 59. 150. Id. at 58-59. 151. § 3.01, 1997 Tex. Gen Laws at 3627 (codified at § 11.0843). 152. Id. 153. §§ 3-5, 1997 Tex. Gen. Laws at 1233-35 (codified as an amendment to §§ 11.326-.329). 154. §§ 1.326(e), 11.327(d) (limiting the watermaster appointed under section 11.326 to only the duties described in section 11.327, except in times of "imminent threat to public health and safety or environment"). 155. Compare id. (limiting watermaster duties), with Watermaster System for the Texas Water Commission, 70th Leg., R.S., ch. 779, § 1, sec. 11.454, 1987 Tex. Gen. Laws at 2762, 2762-63 (allowing watermasters established under section 11.451 to "perform any other duties and exercise any authority directed by the commission"). 156. §§ 3-5, 1997 Tex. Gen. Laws at 1233-35. See Tex. Comm'n on Envtl. Quality, How the Advisory Committees Were Established,http://tceq.state.tx.us/compliance/field_ops/wmaster/waster. html ("In appointing the members, the executive director considers geographic representation, amount of water rights held, different types of holders of water rights and users such as water districts, municipal suppliers, irrigators, and industrial users, and experience and knowledge in water management practices."). 157. §§ 11.3261(a), .3261(e)(3). 158. §§ 11.3261(b)-(c). 159. §§ 11.3261(d), (e)(l)-(2). 160. See § 11.3261. 2006] TEXAS WATERMASTERS

This omission is rational because a WSA watermaster program allows for public input through petitions and open meetings during the creation 6 in a later section of Senate Bill 1406 suggests that process. ' But language 62 both programs may require WACs.1 The final substantive sections of Senate Bill 1406 cover financing and funding of watermaster programs and apply to both the WRAA and the WSA. 163 In section four, the 75th Legislature modified the financial procedures adopted under the WRAA to clarify some ambiguities in the original language, allow for input from the WACs, and direct assets to a special Watermaster Fund."6 The Watermaster Fund, discussed in section five of Senate Bill 1406, created a special account administered by the Commission and located at the state treasury. 65 Section five also required the Commission to place all watermaster funds collected from assessments or other means into the account. 166 The Commission pays for all watermaster expenses from the account and may withdraw up to ten percent of the watermaster budget for the 167 Commission's general funds.

F. The 2003 Rio Grande Watermaster Legislation

The 78th Legislature conferred unique powers and duties on the Rio Grande Watermaster (RGWM) in two bills: House Bill 2250168 and Senate Bill 1902.169 These powers and duties relate to responses to terrorism, use of the river to convey privately owned water, and recording transactions involving water rights. 170 The 2003 statute compelled the Commission to address possible threats to water safety and public health along the Rio Grande,' and

161. § 11.452. 162. See § 11.329 (governing the financial procedures for both programs and, as a result of Senate Bill 1406, allowing input from the watermaster advisory committee). 163. Id. Sections four and five of Senate Bill 1406 used the term "water division" with no mention of"river basin." §§ 11.329-.3291. Because the WSA required river basin watermasters to follow the same procedures that Senate Bill 1406 amended in section four, a sound argument exists not only to require river basin watermasters to participate in the Watermaster Fund created in section five, but to also require such programs to have WACs, created in section two. See § 11.455 (mandating that watermaster programs created under section 11.451 operate in accordance with section 11.329); §§ 11.3261, 11.329-.329 1. 164. § 11.329. 165. § 11.3291. 166. See § 11.3291(a). 167. Id. 168. Act of June 18, 2003, 78th Leg., R.S., ch. 281, § 1, sec. 11.3271, 2003 Tex. Gen. Laws at 1218, 1218-20. 169. Act of June 18, 2003 78th Leg., R.S., ch. 385, § 6.01, sec. 11.3271, 2003 Tex. Gen. Laws at 1615, 1620-21 (adding a version of section 11.3271, which, except for section 11.3271(j), differs semantically, but not materially). Neither House Bill 2250 not Senate Bill 1902 apply to the Rio Grande above Fort Quitman. See § 11.3271(k). 170. §§ l1.3271(e)--(j). 171. § 11.3271(e). TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143 transformed the RGWM program into a water bank. 72 The watermaster may store water for rights holders as long as adequate capacity existed in one reservoir along the Rio Grande. 173 Then, upon proper request of a water rights holder, the watermaster would release water to purchasers of "wet" water rights down stream. 174 The watermaster would also keep records available to the public of all water rights, transfers, and related documentation. '75

G. WatermasterLegislation in the 79th Legislature

Two statutes concerning water rights enforcement came before the legislature in the 2005 regular session: Senate Bill 3 and House Bill 2815. Senate Bill 3, a colossal proposal which, in the spirit of Senate Bill 71,6 attempted to overhaul both surface and groundwater rights administration. The Bill would have limited the theoretical powers of WSA watermasters177 to those listed in the WRAA ' and expanded the role of WACs. 179 For better or for worse, Senate Bill 3 failed. 80 The other bill, House Bill 2815, which was far less ambitious, created a WRAA watermaster program on the Concho River-a branch of the Upper 81 Colorado River-operating as a division of the South Texas Watermaster.1 The Bill came to the house in an attempt to preempt a WSA watermaster program, 8 2 and resulted in a compromise bill that modified the WRAA program to suit regional concerns. 8 3 The program officially began operating on September 1, 2005."s The statute provides that the state will discontinue the new program if the state creates a Colorado River Watermaster Program, 85 or by referendum to be held no earlier than September 1, 2009.86

172. §§ 11.3271(-(j). 173. §§ 11.3271(f)-(g). 174. §§ 11.3271(h)-(j). 175. § 11.32710)). 176. Tex. S.B. 3,79th Leg., R.S. (2005), available at http://www.capitol.state.tx.us/tlo/legislation/ bill-status.htm (select the 79th Legislature R.S. and submit SB3). 177. See discussion supra Part II.D. 178. See discussion supra Part I1I.B. 179. Tex. S.B. 3, 78th Leg., R.S. (2005). 180. See id. (providing only the engrossed version). 181. Act of June 17, 2005, 79th Leg., R.S., ch. 749, § 1, 2005 Tex. Sess. Law Serv. 2576 (to be codified at TEx. WATER CODE §§ 11.551-.560); available at http://www.capitol.state.tx.us/tlo/legislation /billstatus.htm (select the 79th Legislature R.S. and submit HB2815). 182. See id. (as originally submitted); discussion infra Part IV. 183. See § 11.557 (mandating the creation of an independent WAC with special representational requirements). 184. § 1, 2005 Tex. Sess. Law Serv. at 2578 ("The provisions added by this subchapter take effect September 1, 2005."). 185. § 11.560. 186. § 11.559. 20061 TEXAS WATERMASTERS

IV. CREATING A WATERMASTER PROGRAM

A Texas watermaster program may arise by statute,'87 agency order,"' court order, 189 or petition.' 90 But only one method is open to the public: petition.' 9' The WSA allows water-rights holders to petition for watermaster programs for river basins or segments of river basins.192 A satisfactory petition 93 does not guarantee that the Commission will start a watermaster program.1 In order to initiate a WSA program, the Commission must find that a threat exists to senior water-rights holders." 4 The Commission has granted only one petition for a WSA watermaster: the Petition for a Watermaster on the Concho River (Concho Petition). 95 This petition became moot after passage of House Bill 28 15,196 but provides an excellent case study of the petition process. The Concho River Basin is a segment of the Colorado River Basin, and runs through Irion, Tom Green, Concho, Runnels, Coke, Schleicher, and Sterling Counties. 97 In August 1999, forty-three domestic and livestock (D&L) water users and twelve "paper" water-rights holders on the Concho River signed a petition claiming that junior, upstream water rights holders, including the City of San Angelo, threatened their senior water rights and requested that the Commission begin a watermaster program.' 98

A. The Petition

In order for the Commission to recognize a petition, the petition must contain the names of twenty-five or more water fights holders in a particular

187. See § 11.3271. 188. § 11.326. 189. § 11.402(a). 190. § 11.451. 191. Id. 192. Id. 193. Id. 194. § 11.452(c)). 195. Eric Finley, The Trickle Down Effect: The Watermaster Battle to Cost Tax PayersNo Matter Who Wins, SAN ANGELO STANDARD TIMES, Oct. 31,2004, at A I (stating that the Commission granted the petition in August, 2004); Telephone Interview with Herman Settemeyer, TCEQ StaffEngineer, in Austin, Tex., Jan. 31,2005 (commenting that the Commission adopted the Administrative Law Judge's proposal for decision without any substantive changes). See Tex. Comm'n on Envtl. Quality, Petition for Watermasteron the Concho River, TNRCC Docket No. 2000-0344-WR, 31 (Apr. 2, 2004). 196. See discussion supra Part 111.G. 197. See Bureau of Economic Ecology, supra note 139; see also Handbook of Texas Online, Concho River, http:llwww.tsha.utexas.edulhandbooklonlinelarticleslview/CCIrnc 12.html (giving a detailed description and history of the Concho River). 198. City of San Angelo v. Tex. Natural. Res. & Conservation Comm'n, 92 S.W.3d 624, 626 ; Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 2; see supra notes 21, 24 (describing riparian rights and past limitations of riparian rights by the state legislature), 60 (commenting on the how the WRAA ended riparian rights except to domestic and livestock users). TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143 river basin or segment of a river basin.'99 The petitioners and the City of San Angelo did not agree on the definitions of "water right holders" or "segment of [river] basin."2°° The Commission sent the controversy to a hearing before an administrative law judge (ALJ) in the State Office of Administrative Hearings.2" 1 The City of San Angelo argued that D&L users were not true water rights holders. °2 Both the courts and Commission recognized that D&L water users have some rights as interested parties, but perhaps not the same rights as paper water rights holders.2"3 This issue became moot, however, when thirty-four paper water rights holders submitted an additional petition in January 2000.204 The posture of the Commission and courts suggests that D&L users are not true water rights holders, but may present evidence concerning the creation of watermaster program.0 5 The City also argued that a segment of a river basin should include only the parts of the river basin where the rights of senior water rights holders are threatened.20 6 The petitioners requested that the watermaster program control all of the Concho and its tributaries upstream from O.H. Ivey Reservoir, where the Concho River flows into Colorado River.20 7 The City of San Angelo

199. TEX. WATER CODE ANN. § 11.451 (Vernon 2000). 200. See City of San Angelo, 92 S.W.3d at 628. 201. Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 2. 202. See City of San Angelo, 92 S.W.3d at 628. 203. Id. at 627; Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 2. Because both water right holders and domestic and livestock users of water diverted from Texas streams signed these petitions, the petitions' validity depended on whether the water code recognizes the domestic and livestock water users as water right holders. The Commission can issue to persons written water rights (permits or certificates of adjudication). These persons are then classified as "paper water right holders." See § § 11.121-.186. By contrast, domestic and livestock water users claim rights to use state water for domestic and livestock purposes based on either a statutory exemption or common law right. City of San Angelo, 92 S.W.3d at 627 n.3; see § 11.142. Two petitions have been submitted: one for the Basin and one for the Concho River Basin. City of San Angelo, 92 S.W.3d at 627 n.2. By the time the SOAH hearing took place for the Concho River petition, the Commission had dismissed the San Saba petition. Telephone Interview with Fred Campbell, Upper Colorado River Authority Chairman, in Paint Rock, Tex. (Jan. 30, 2005). 204. Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 2. 205. City of San Angelo, 92 S.W.3d at 627 n.3 (quoting a letter containing questions from the Executive Director: "[are] D&Ls 'senior water right holders' under TEX. WATER CODE ANN. §§ 11.451 and 11.452(c)?" and response from the Commission: "Domestic and livestock users are affected persons who may participate in and present evidence at a hearing on the petitions"). 206. Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 5. 207. Id. at 1-2 (finding, in agreement with all but one party, that the Concho River Basin is a segment of the Colorado River Basin). The geographical and jurisdictional boundaries of the Watermaster shall be the Concho River segment which includes the Concho River, and all of its tributaries, downstream on the main stem of the Concho River to a point on the Concho River prior to reaching, and upstream of, O.H. Ivie Reservoir located at, and including the diversion point of Certificate of Adjudication No. 14-1393 (River Order No. 4954450000) in Concho County. 20061 TEXAS WATERMASTERS challenged the inclusion of the and water in O.C. Fisher Lake because the North Concho rarely contributed to the rest of the Concho River, and no water rights holders on the North Concho signed the petition. °8 Therefore, excluding the North Concho River from the watermaster program would not threaten senior water rights holders on the rest of the river.2" The City also argued that if it released water from O.C. Fisher Lake, it might break a federal contract. 2" Despite the City's arguments, the Commission included the North Concho River as part of the Concho River Segment. 1

B. Proceduresfor Determination

The Commission's ability to initiate a WSA watermaster depends on how the Commission and courts defines "threat" to senior water rights holders.1 2 Additionally, how the Commission applies this definition to the evidence submitted by "persons who hold water rights in the river basin" determines whether the Commission will begin the requested program.21 3

1. Defining "Threat" to Senior Water Rights Holders

Neither the Commission, nor the courts, nor the legislature have officially defined the meaning of threat under this section of the water code.21 4 But, in the hearing before the ALJ on the Concho Petition, the executive director of the Commission defined a threat as "some condition . .. that creates the possibility that senior water right holders may not obtain the water they are authorized to take and that they need[.] 2 5 The City of San Angelo characterized the executive director's definition as "'provid[ing] the lowest possible threshold for defining threat. '-216 The City argued that the statute

208. Id. at 5. 209. Id. 210. id. 211. Id. The Commission adopted the AL's proposal for decision in August, 2004. Finley, supra note 195, at Al. 212. See TEX. WATER CODE ANN. §§ 11.452(c) (Vernon 2000). 213. § 11.452(b). 214. See Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 7-8. The AU recommended the following definition of threat under section 11.452(c): a set of circumstances creating the possibility that senior water rights holders may be unable to fully exercise their rights-not confined to situations in which other people or groups convey an actual intent to harm such rights. Specifically, in time of water shortage, the rights of senior water rights holders in the basin are threatened by the situation of less available water than appropriated water rights; the disregard of prior appropriation by junior water rights holders; the storage of water; and the diversion, taking, or use of water in excess of the quantities to which the holders of water rights are lawfully entitled. Id. (emphasis in original). 215. Id. at 10. 216. Id. at 9. Another party to the case, the Colorado River Municipal Water District (CRMWD), TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143 required a showing of "intent" or "communication of threat" by a junior water rights holder.21 7 The Executive Director and the ALJ deciding the case agreed that a junior water rights holder's intent or communication was irrelevant.2"8

2. Showing the Need for a Watermaster Program

Both the Executive Director and the ALJ found that a threat to senior water rights holders alone was enough to show that a river basin needed a watermaster." 9 Applying this evidentiary threshold, petitioners need to show three elements: (1) during times of low flow, (2) the actions of individuals with junior water rights (3) impair the reliability of senior water rights.2 ° San Angelo argued that the Commission has adequate real-time information about flow data to recognize and remove any threat to senior water rights holders.221 Therefore, implementing a watermaster program would waste funds because the Commission can adequately protect senior water rights holders with existing programs."22 The Executive Director and ALJ rejected San Angelo's argument for two reasons. First, as the Executive Director noted, the relevant statutes do not consider the costs of a program until after the watermaster is appointed.223 Therefore, the cost does not bar the Commission from initiating a program. 221 Second, neither local water rights holders nor the Commission's regional offices have the authority or resources to enforce water rights. 25

V. THE FUNCTIONS OF WATERMASTERS

Watermasters and their staff have unique authority to monitor and regulate the diversion of adjudicated or authorized surface water rights in a

claimed that a definition that did not include intent presented too low of a threshold "because it applies if only one right is not [100%] reliable." Id.at 10. 217. Id. at 8. 218. Id. at 11, 14. 219. See id. at 28, 31. 220. See id. The Executive Director's characterization of the evidentiary burden "includes (1) testimony that junior water rights holders will impair the rights of senior water rights holders if they take water during low flows and (2) testimony that junior water rights holders have taken water that senior water rights holders need" is sufficient to show "that rights of senior water rights holders are threatened." Id.at 20-21 (emphasis in original). The AU characterized the evidentiary burden as follows: Are the rights of senior water rights holders in the Concho River Watershed threatened, in time of water shortage, by the circumstances of less available water than appropriated water rights; disregard of prior appropriation by junior water rights holders; storage of water; and diversion, taking, or use of water in excess of the quantities to which the holders of water rights are lawfully entitled. Id. at 24. 221. Id. at 27. 222. Id;see id. at 28 (summarizing a similar argument put forward by the CRMWD). 223. Id. at31. 224. Id. 225. Id. 2006] TEXAS WATERMASTERS particular area. 226 Currently, Texas has two Commission-appointed watermaster programs227 with a third program that exists as a division of the 22 South Texas Program. ' All three watermaster programs operate under different legislation, which gives rise to functional differences in the duties and abilities of each watermaster.229

A. Areas Without Watermasters

The role of watermasters is clearer after examining regions without such programs. The Texas Commission on Environmental Quality (TCEQ) has sixteen regional offices throughout the state.230 In non-watermaster areas, the regional offices do not have the authority, staff, or funding to enforce water rights.2"3' Water rights holders in areas without a watermaster rarely gather enough information to report violations of water rights because investigating a violation would often involve trespass.232 If a water rights holder requests regional assistance, the regional director may temporarily reassign a staff member from other duties to investigate the violation.233 Upon finding a violation, TCEQ employees must then seek an order from the executive director to prevent the violation of water rights.234 The investigation process can take months and may not result in any remedy, depending upon the availability of staff and the nature of the violation.235

226. TEX. WATER CODE ANN. §§ 11.326-27, 11.339, 11.451 (Vernon 2000); see Tex. Comm'n on Envtl. Quality, Watermaster Programs, http://www.tceq.state.tx.us/nav.utilwater/watermaster.html. 227. Telephone Interview with Ricky Anderson, TCEQ Regional Director, in San Angelo, Tex. (Jan. 7, 2005). 228. Act of May 25, 2005, 79th Leg. R.S., ch. 749, § 1, 2005 Tex. Gen. Laws at 2576 (codified at TEx. WATER CODE ANN. § 11.551(3)). 229. City of San Angelo v. Tex. Nat. Res. & Conservation Comm'n, 92 S.W.3d 624, 628 (Tex. App. -Austin 2002, no pet.) (commenting that the proposed Concho River Watermaster Program would operate under section 11.452 of the Texas Water Code, the codification of the Watermaster System Act); Guadalupe-Blanco River Auth., supra note 102, online (noting that both the South Texas and Rio Grande Watermaster Programs were created by section 11.326 of the Texas Water Code). The courts have not operated a long-standing watermaster program since the original Rio Grande case. Accordingly, court- appointed watermasters will not be specifically discussed in this section. But the general powers of watermasters are generally applicable to court-appointed watermasters as well. 230. TCEQ Regional Offices, http://www.tceq.state.tx.us/comm-exec/formspubslpubslgilgi- 002_629076.pdf. The two watermaster programs currently in existence both work out of regional offices. Id. 231. Tex. Comm'n Envtl. Quality, Petitionfor Watermasteronthe Concho River, TNRCC Docket No. 2000-0344-WR, at 31 (April 2, 2004) (quoting the testimony of Ricky Anderson, the Commission's Region 8 Director). 232. Id. at 30 (citing the argument of the Executive Director and the testimony of A.J. Jones, who stated that a private individual investigating water rights violations risked bodily); id. at 16-19 (citing testimony of water rights holders who witnessed violations). 233. Id. at 29. 234. Telephone Interview with Ricky Anderson, TCEQ Regional Director, in San Angelo, Tex. (Jan 7, 2005). 235. Id. TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

B. GeneralPowers

All watermasters have the powers originally mandated by the legislature in the Water Rights Adjudication Act (WRAA).236 While the executive director may exercise the same authority as a watermaster,2 37 no other Commission 2 38 employee can regulate surface water in the same manner as a watermaster The watermaster's duties consist of dividing, monitoring, regulating, and enforcing water rights and preventing waste of water. z39

1. Division of Water Rights

One of the most challenging and necessary duties of watermasters is to divide and allocate water rights, especially during times of drought.24 Under the current programs, water rights holders must file a declaration of intent to divert water.241' The declaration includes "the amount of water that will be diverted, the diversion rate for each point of diversion, and the starting and ending times.2 42 The water rights holders must also state the intended purpose of the water they intend to divert. 43 The watermaster then verifies that enough water exists to allow the water right holder to divert the amount requested .24" The water right holder then diverts the allocated amount and reports the actual amount diverted.245

2. Monitoring and Regulation

To ensure compliance with division orders, water rights holders must fit pumps or other diversion works with meters and locks, which allow free passage of water.246 Watermaster deputies continually monitor these pumps and diversion works and record meter readings of actual the rates of diversion

236. Water Rights Adjudication Act, 60th Leg., R.S., ch. 45, § 8(c), 1967 Tex. Gen. Laws at9l-92, amended by Act of June 17, 1997, 75th Leg., R.S., ch. 696, § 1, 1997 Tex. Gen. Laws at 2333 (codified at TEX.WATER CODE ANN. § 11.327 (Vernon 2000)). 237. § 11.326(d). 238. Tex. Comm'n on EnvtI. Quality, Docket No. 2000-0344-WR at 31 (April 2, 2004) (quoting the testimony of Ricky Anderson, the Commission's Region 8 Director). 239. § 11.327. 240. Guadalupe-Blanco River Auth., supra note 102. 241. Id. 242. Id. 243. TEX.COMM'N ON ENVTL. QUALITY, EXECUTIVE SUMMARY OF Rio GRANDE WATERMASTER PROGRAM: MANAGING A LIMITED RESOURCE (2005) [hereinafter EXECUTIVE SUMMARY]; Telephone Interview with Al Segovia, South Texas Watermaster, in San Antonio, Tex. (Jan. 19, 2005). 244. EXECUTIVE SUMMARY, supra note 243. 245. Guadalupe-Blanco River Auth., supra note 102. 246. See TEX. WATER CODE ANN. § 11.330 (Vernon 2000). 2006] TEXAS WATERMASTERS and its use.247 All programs work to allow all water rights holders, especially municipalities, to divert as much water as the law allocates to them.248 During times of low water flow, deputies will ask water rights holders to decrease their rate of water consumption on a voluntary basis. 249 If flow continues to decrease, the watermaster and deputies will restrict water rights based upon the law applicable to that particular program.25° The watermaster may take any of the following actions if an inadequate supply of water exists to cover the demands of all water rights holders:

1. cancel or modify any existing declaration of intent; 2. order reservoir operators to allow inflows to pass to honor such downstream demands; 3. order that diverters limit or cease diversions to the extent necessary to honor these downstream demands; or 4. take any other actions necessary to ensure that these downstream demands are met in accordance with Texas laws.2"5'

3. Enforcement and Prevention of Waste

Watermasters and deputies have enforcement powers unavailable to other TCEQ staff.252 Only the TCEQ executive director, watermasters, and their deputies may lock pumps or diversion works or issue field citations to individuals that violate surface water rights. 3 Since watermaster programs keep detailed records of diversion and monitor flow regularly, deputies are likely to catch and prosecute water rights violators. 54 Penalties for violators may range from a warning to a fine of $500 per day per violation to a formal enforcement action.255 While the potential for large fines exists, such fines are uncommon because watermasters receive no direct funding from fines for violations of water rights.256

247. ExEcuTivE SUMMARY, supra note 243; Guadalupe-Blanco River Auth., supra note 102. 248. EXECUTIvE SUMMARY, supra note 243; Guadalupe-Blanco River Auth., supra note 102. 249. Guadalupe-Blanco River Auth., supra note 102. 250. Id. 251. Id. 252. See Tex. Comm'n on Envtl. Quality, Petitionfor Watermaster on the Concho River, TNRCC Docket No. 2000-0344-WR, at 31 (Apr. 2, 2004) (quoting the testimony of Ricky Anderson, the Commission's Region 8 Director). 253. Id. The legislature recently declined to provide other TCEQ employees with the power to issue field citations for violations of water rights. Tex. S.B. 3, 79th Leg., R.S. (2005). 254. Id.; Telephone Interview with Al Segovia, South Texas Watermaster, in San Antonio ( Jan. 19,2005); Telephone Interview with Ricky Anderson, TCEQ Regional Director, in San Angelo, Tex. (Jan. 7,2005. 255. 30 TEx. ADMIN. CODE § 304.34 (West 2004); see 30 TEX.ADMIN. CODE §§ 86.11-. 18 (West 2004) (concerning the procedures for a contested water rights case). 256. Telephone Interview, Al Segovia, South Texas Watermaster, in San Antonio, (Jan. 19,2005). TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143

C. Funding and Assessments

Watermasters receive the vast majority of their funding from assessments paid by water rights holders within the region or river basin. 57 The Texas Water Code commands the Commission to "pay the compensation and necessary expenses of a watermaster, assistant watermasters, and other necessary employees."2'58 But water rights holders in the water division or river basin must reimburse the Commission. 2 9 The Commission holds a public hearing at the end of the fiscal year where it assesses the cost of the program and apportions the cost to the water rights holders.26 Each water rights holder is assessed an annual base fee and then a consumption charge.26 l The charge for usage is the product of the amount of water consumed and a rate factor based on type of use.262 Certain types of consumption, such as municipal and industrial use, are assessed at a higher rate than other use types, 2 63 such as irrigation, storage, or secondary usage. Both the Rio Grande Watermaster Program (RGWM) and the South Texas Watermaster Program (STWM) determine assessments using identical 2 65 methodology.2" The base fee for both programs in 2005 was fifty dollars. RGWM costs for 2005 totaled $533,270, and STWM for the same year totaled $477,834.2' These figures have not increased significantly, if at all, from 2000.267

D. The Rio Grande Water Master Program

The Rio Grande' s unique geographical and political characteristics 268 led to an innovative and evolving watermaster program. First fabricated by the

257. §§ 303.71, 304.61; Guadalupe-Blanco River Auth., supra note 102. 258. TEx. WATER CODE ANN. § 11.329(a) (Vernon 2000). 259. Id. 260. § 11.329(b)-(c); see, e.g., Tex. Comm'n on Envtl. Quality, TCEQ Commissioners' Agenda Meeting - August 25, 2004, Docket Nos. 2004-0991-2-BGT, available at http://www.tceq.state.tx.us (search "Docket No. 2004-0991-BGT") (holding a public hearing for the 2005 watermaster assessments). 261. §§ 303.72, 304.62. 262. §§ 303.73, 304.63; see §§ 303.72, 304.62 (displaying the municipal assessment rate formula and rate factors based upon type of use). 263. §§ 303.72, 304.62. 264. Id. 265. Tex. Comm'n on Envtl. Quality, supra note 260, online. 266. Id. 267. See Guadalupe-Blanco River Auth., supra note 102, online ("The annual budget for the STWM is approximately $500,000"). 268. See J.G. Moore, W. Rast, & W.M. Pulich, ProposalforanIntegrated Water ManagementPlan on the Rio Grandef Rio Bravo, Presented at First International Symposium on Transboundary Waters Management, Monterrey, Nuevo Leon, Mexico, November 18-22, 2002, availableat http://rivers.txstate. edu/publications.htm (click on PDF link) (discussing the unique hydrological, geographical and political forces on the Rio Grande). 2006] TEXAS WATERMASTERS courts and later adopted by the Commission, the RGWM has consistently been the most progressive program in Texas. 269 The program operates under special legislation and rules to address special concerns regarding international water law, water prioritization, and marketing. 70 The RGWM interacts daily with the International Boundary & Water Commission (IBWC)271 and Comisi6n Internacional de Lfmites y Aguas (CILA). 27 2 This interaction ensures that the watermaster complies with international treaties and is aware of water demands on both sides of the U.S.- Mexico border.273 The RGWM enforces hydrologic and environmental policies and maintains reservoir levels. 274 Both countries closely monitor and regulate water use so that users downstream have adequate potable water supplies.275 The RGWM controls stream flow on the Rio Grande by releasing calculated amounts of water stored in Amistad and Falcon reservoirs.276 Rio Grande water rights priorities are different from any other surface rights in Texas.277 The courts have divided water rights holders into three groups: (1) domestic, municipal, and industrial users (DMI); (2) operational users; and (3) irrigators. 278 DMI users have the highest priority, while water irrigators have the lowest priority rights. 279 Additionally, the courts have separated irrigation water rights into Class A, B, and C rights.280 By law, DMI users take

269. See supra notes 37, 98, and 160. 270. See 30 TEx. ADMIN. CODE ch. 303 (West 2004). 271. ExECUTIVE SUMMARY, supra note 243. Established in 1889, the International Boundary and Water Commission (IBWC) has responsibility for applying the boundary and water treaties between the United States and Mexico and settling differences that may arise out of these treaties. The IBWC is an international body composed of the United States Section and the Mexican Section, each headed by an Engineer-Commissioner appointed by his/her respective president. The United States Section of the International Boundary and Water Commission (USIBWC) is headquartered in El Paso, Texas. IBCW Home page, About Us, http://www.ibwc.state.gov/. 272. EXECUTIVE SUMMARY, supra note 243. The CILA is the Mexican counterpart to the IBWC. Cal. State Water Res. Control Bd., Border Partners, availableat http://www.swrcb.ca.gov/border/partners _mex.html. See §§ 303.12-.13 (mandating interaction with the IBWC). 273. ExECUTIVE SUMMARY, supra note 243. 274. § 303.22(a). 275. EXECUTIVE SUMMARY, supra note 243. 276. Id. 277. Telephone Interview with Matt Nelson, Texas Water Bank Director, in Austin, Tex. (Jan. 21, 2005). 278. State v. Hidalgo Co. Water Con. & Irr. Dist. No. Eighteen, 443 S.W.2d 728 (Tex. Civ. App.- Corpus Christi 1969, writ ref'd n.r.e) (creating the groups still used today). TCEQ Executive Summary, supra note 230, online. 279. § 303.22(a). 280. § 303.2(22); Hidalgo Co. Water Con. & Irr. Dist. No. Eighteen, 443 S.W.2d at 748-49. The court defined the classification scheme: "[Class A] embraces those who have acquired a right to use waters of the Rio Grande by virtue of having complied with the appropriation statutes of the State or those whose rights have been recognized by the State.... [Class B] embraces those who have been making a good faith use of the waters of the Rio Grande for irrigation purposes prior to the institution of this suit but TEXAS TECH ADMINISTRATIVE LA W JOURNAL [Vol. 7:143 their full allotment first, then operational users take their full allotment, and irrigators take any remaining water based on priority date."8' If an inadequate supply of water exists to cover the maximum allotments of both DMI and operational rights holders, both groups will receive a fraction of their allotment, and irrigators receive nothing.282 Water rights holders along the Rio Grande can buy and sell "wet" water rights with certain restrictions, limitations, and conditions.283 The Commission must approve and record all sales, and marketable water rights must be free of any administrative debts.284 The RGWM may authorize sales of water rights only within priority classes that have a term of no more than one year.285 For example, if a business purchased industrial water rights on May 1, it may only use the water for industrial purposes, and the rights would expire on the last Saturday of the year.286 The business could convert the industrial water rights to operational rights on a one-to-one ratio use by submitting a petition to amend the water right.287 The outcome would be different if the business successfully converted DMI or operational water rights for irrigation use. In that case, the business would only receive half the rights, or two-fifths of the DMI or operational rights purchased.288 These purchased irrigation rights, however, would last from May 1 until May 1 of the next year.289

E. The South Texas Watermaster Program

The South Texas Watermaster (STWM) is very similar to the original 29 conception of the watermaster created by the Water Rights Adjudication Act. The Commission started the STWM program on its own motion in 1990.21

do not qualify as Class A users." Id. 281. § 303.22; ExECUTIVE SUMMARY, supra note 243. The watermaster reestablishes the allotment of each class monthly. Annually, Class A users may use 225,000 acre-feet (af), Class B users may use 75,000, and Class C users are entitled to the remainder. Id. If 30,000 af of water were available in May, each class would receive the following allotment: Class A, 18,750 af; Class B, 6,250 af, Class C, 5,000 af. See id. If 25,000 af of water were available in May, each class would receive the following allotment: Class A, 18,750 af; Class B, 6,250 af; Class C, no water. See id. 282. § 303.22 (if the amount is inadequate to meet these allotments, then DMI holders receive 1.7 acre-feet of water for every one acre-foot operational owners receive and irrigators holders receive nothing). 283. § 303.41; see § 297.82 (relating to the water rights holder's duty to inform the executive director); §§ 303.71-73 (relating to administrative debt). 284. § 303.41; see § 297.82 (relating to the water rights holder's duty to inform the executive director); §§ 303.71-73 (relating to administrative debt). 285. §§303.11,311.41. 286. § 303.22. 287. § 303.42. 288. § 303.43(1) (distinguishing between Class A (one-half) and Class B (two-fifths) water rights in water rights transfers). 289. EXECUTIVE SUMMARY, supra note 243. 290. See Water Rights Adjudication Act, 60th Leg., R.S., ch. 45, §§ 8(a)-(c)), 1967 Tex. Gen. Laws at 91; supra notes 71, 72. 291. Telephone Interview with Herman Settemeyer, TCEQ Staff Engineer, Austin, Tex. (Jan. 31, 2006] TEXAS WATERMASTERS

The STWM controls a water division that includes the Guadalupe, Lavaca, Nueces, and Basins.292 The Texas Water Code restricts the duties of the STWM to include only the general powers in section 11.327 of the Texas Water Code.293 While the STWM lacks many of the regulatory tools available to the RGWM, both programs achieve similar results. The STWM does not have the marketing resources of the RGWM, but a thriving water market is developing in the South Texas River Basin.294 Unlike the Rio Grande, South Texas cannot control the flow of rivers with its reservoirs, and water rights "run with the river. '295 In South Texas, water rights holders who fail to divert water as it 296 flows by may not be able to divert water later if water flow is inadequate. The STWM must enforce water rights strictly according to priority date and water availability. 297 During times of water shortages, South Texas D&L users and senior water rights holders have priority overjunior water rights holders.298 For example, an irrigator with a water permit originally issued in 1911 would technically have priority over a municipality with a permit from 19 12.299 But the STWM and deputies work with "downstream diverters to try to maximize the amount of time that municipalities can divert. ' ° STWM deputies spend a majority of their time responding to inquiries and complaints of water violations and investigate an average of 150

2005). Mr. Settemeyer has been a staff engineer for the Commission for over 28 years and has expertise in water availability modeling. Tex. Comm'n Envtl. Quality, Petitionfor Watermaster on the Concho River, Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 20 (Apr. 2, 2004) (listing Mr. Settemeyer's qualifications). 292. Guadalupe-Blanco River Auth., supra note 103; see infra Figure 1 p.2 . 293. See TEX. WATER CODE ANN. § 11.326 (Vernon 2000); Guadalupe-Blanco River Auth., supra note 102 (stating that Commission created the STWM under section 11.326 of the Texas Water Code). 294. See Guadalupe-Blanco River Auth., supra note 102 ("Until recently, many senior irrigation rights were not being utilized. In the past few years, many of those senior rights have been purchased, leased or transferred to people or entities that are actually using the water."); Greg Bowen, Water Rights to the Guadalupe Prioritized,THE VICTORIA ADVOCATE, July 9, 2002 http://www.thevictoriaadvocate. com/lifestyle/special-sections/lifeonbanks/story/443314p-557538c.html ("Because the city's water rights are newer than so many other water rights along the Guadalupe, city officials are considering purchasing some older water rights to help ensure Victoria has enough drinking water during times of drought."). 295. Telephone Interview with Al Segovia, South Texas Watermaster, in San Antonio, Tex. (Jan. 19, 2005). 296. Id. 297. 30 TEx. ADMIN. CODE § 304.21 (West 2005); TNRCC regulations in section 304.21 state that allocation of water between water rights holders shall be on the basis of seniority, in such a way as to maximize the beneficial use of state water, minimize the potential impairment of senior rights by the diversion by junior rights holders, and prevent waste or use in excess of the quantities to which holders are legally entitled. Guadalupe-Blanco River Auth., supra note 102. 298. Guadalupe-Blanco River Auth., supra note 102. See TEx. WATER CODE ANN. § 11.327 (Vernon 2000) (requiring watermaster to allocate waters "in accordance with the adjudicated water rights"); § 11.451 (requiring watermaster to allocate waters "in accordance with the authorized water rights"). 299. See Guadalupe-Blanco River Auth., supra note 102. 300. Id. TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143 complaints per year. 30 ' The Water Code limits surface water rights to D&L users and permit holders who put the water to a beneficial use.30 2 Deputies compel water users to comply with the Code and respect water rights through warnings, pump lockdowns, and, very occasionally, with fines.30 3

F. The Concho River WatermasterProgram

The STWM began operations on the Concho River in September of 2005 .34 Before the passage of House Bill 2815, the City of San Angelo spent four years and nearly $400,000 fighting the program. 305 Had the petition succeeded, the CRWM might have resembled the STWM, but may have employed some of the regulatory tools of the RGWM. As discussed above, the Commission could exercise much broader discretion in making rules for the CRWM, a WSA program, than the other two watermaster programs.30 6 A WSA CRWM could have taken on responsibilities that the STWM cannot, including water marketing functions.30 7 Unlike the STWM, the CRWM would have regulated water rights "in accordance with authorization" and not necessarily 30 8 "adjudication. Under such a scenario, the Commission must authorize water rights to avoid encroaching upon the powers of the judicial branch.3°9

VI. CRISIS, CONTROVERSY, AND CONSERVATION

A. Over-Drawn and Under-Enforced: The Texas Water Crisis

Texas faces a water crisis: Most rivers and streams in Texas are over- appropriated, 310 water demand will soon outstrip supply, 311 and cities will not be able to meet the needs of their citizens.312 All major Texas rivers, except the Red and Sabine Rivers, contain "less water. . . than users are permitted to

301. Telephone Interview with Al Segovia, South Texas Watermaster, in San Antonio, Tex. (Jan. 19, 2005). 302. See§§ 11.081-.121. 303. Guadalupe-Blanco River Auth., supra note 102. 304. Finley, supra note 195, at Al (quoting Ricky Anderson). 305. Tex. Comm'n Envtl. Quality, Petitionfor Watermaster on the Concho River, Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 31 (Apr. 2, 2004); see Finley, supra note 195, at Al. 306. See discussion supra notes 118-33 and accompanying text. 307. See discussion supra note 124 and accompanying text. 308. See discussion supra note 132 and accompanying text. 309. See In re the Adjudication of the Water Right of the Upper Guadalupe Segment of the Guadalupe RiverBasin, 642 S.W.2d438, 441 (Tex. 1982); Bd. ofWaterEng'rs v. McNight, 111 Tex. 81, 97, 229 S.W. 301, 307 (1921) (holding that the legislature's attempt to confer judicial power to an executive agency violated the state constitution). 310. Hubert & Bullock, supra note 53, at 55-56. 311. WATER FOR TExAs-2002, supra note 2, at 29, 59. 312. Hubert & Bullock, supra note 53, at 53, 55-56. 2006] TEXAS WATERMASTERS withdraw."3"3 The Texas Water Development Board (TWDB) projects that demand for water will exceed all available water supplies by 2010.114 Cities such as Austin, San Antonio, Dallas, and Amarillo are actively procuring water rights to meet the increasing needs of their consumers."' Fortunately, Texas is much better prepared to plan for water shortages and water rights enforcement than it was in the 1950s.3 16 Senate Bill 1 set forth policy for water planning, reuse, transfers, conservation, and marketing. 3 7 To enforce these policies, the 75th Legislature relied on two mechanisms: watermaster programs and the cancellation of water rights.318 The Commission, however, infrequently implements either of these mechanisms.319 The Commission's authority to cancel water rights comes into force only after water goes unused for beneficial purposes for a consecutive ten-year period.32° Cancellation is an unpopular policy because it discourages conservation,3 2' and the TCEQ has the burden of proof in showing the elements of cancellation.322 Meeting this burden is difficult without watermasters documenting water use. 323 Water rights in watermaster areas seldom face cancellation due to the increased market for water rights; water rights holders sell rights rather than let them go unused. Watermaster programs are the only effective mechanisms currently available to enforce surface water rights administration and conservation policies. 324 The limited use of watermasters reflects the opposition municipalities and other junior water rights holders have towards strict enforcement of current water rights.325 While unpopular,326 enforcement of

313. Telephone Interview with Herman Settemeyer, TCEQ Staff Engineer, in San Antonio, Tex. (Jan. 31, 2005); see Hubert & Bullock, supra note 53, at 55-56. 314. WATER FOR TEXAs-2002, supra note 2, at 29,59. "According to Texas Water Development Board (TWDB), major urban centers statewide are projected to experience a moderate drought by the year 2010, and every county in the state faces the possibility of insufficient water supplies in the next fifty years." Hubert & Bullock, supra note 53, at 55-56. 315. Cynthia DeLaughter, Comment, Priming the Water Industry Pump, 37 HOUs. L. REV. 1465, 1475 (2000). 316. Hubert & Bullock, supra note 53, at 53, 55. 317. Id. 318. Id. 319. See infra notes 320-22. 320. Smith, supra note 143, at 686-87; see TEX. WATER CODE ANN. §§ 11.174, 11.176 (Vernon 2000); Tex. Comm'n Envtl. Quality, Petitionfor Watermaster on the Concho River, Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR, 16-19 (Dec. 2002) (recording the last contested case of water rights conducted through the State Office of Administrative Hearings). 321. DeLaughter, supra note 315, at 1485. 322. Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 16-19. 323. See id. (canceling water rights based upon the testimony of Carlos Rubenstein, Rio Grande Watermaster, and the records of the RGWM). 324. See Tex. Comm'n on Envtl. Quality, TNRCC Docket No. 2000-0344-WR at 20 (April 2, 2004). 325. See infra Part IV.A. 326. Greg Bowen, WatermasterNot a PopularPosition, THE VICTORIA ADVOCATE, July 9, 2002, availableat http://www.thevictoriaadvocate.comilifestyle/special-sections/lifeonbanks/story/443318p- 557545c.html. TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143 water rights represents the most plausible solution to water problems in Texas.327

B. The Controversy: Explaining Municipal Opposition

Fears stemming from priority enforcement, rates, and discontinuance of local control create strong opposition to watermaster programs.328 Cities in particular oppose these programs because they have relatively junior water rights in comparison to ranchers and farmers.329 Consequently, current law requires watermasters to restrict cities' consumption of water before most agricultural users. 330 D&L users are entitled to 200 acre-feet of water without a permit or charge, and have senior rights to all other users.3 3' Many irrigators obtained their rights before or shortly after the Irrigation Act of 1913, which required individual, but not municipal, water users to acquire permits for water rights.332 The junior status of municipal water rights means they are less certain and more likely to be restricted during times of water shortage.333 Municipalities fear that strict enforcement of water rights during a severe drought will harm their customers, specifically citizens and industry.334 Those opposed to watermasters also disagree with the fee structures and exemptions involved with the program.335 Municipal and industrial users often receive less protection than rights holders who pay less or nothing at all for the watermaster's services. Municipal and industrial users are charged more per acre-foot than irrigators, while D&L users are not charged at all.336 While irrigation constitutes a majority of water use, municipal and industrial water users are the largest single consumers and pay the largest individual bills for watermaster services.337

327. See TEX. SENATE SELECT COMM. ON WATER POLICY, Interim Report to the 79th Legislature, at 11 (December 2004) available at www.senate.state.tx.us/75r/senate/commit/c750/downloads/WP- Final.pdf. 328. See id. 329. Telephone Interview with Al Segovia, South Texas Watermaster, in San Antonio, Tex. (Jan. 19, 2005). See Bowen, supra note 294, online; Finley, supra note 195, at Al. 330. Bowen, supra note 326, online; Telephone Interview with Al Segovia, supra note 329. 331. TEX WATER CODE ANN. § 11.142 (Vernon 2000); see Finley, supra note 195, at Al (discussing the cities opposition to the watermaster program due to, in part, this provision). 332. Jarvis, supra note 23, at 1. 333. Finley, supra note 195, at AI; Bowen, supra note 326. 334. Bowen, supra note 326 (stating that both the cities of New Braunfels and Kerrville threatened to sue South Texas Watermaster Al Segovia when he enforced water rights in compliance with the "first in time, first in right" rule.). 335. Finley, supra note 195, at Al. 336. 30 TEX. ADMIN. CODE § 304.62 (West 2005); Telephone Interview with Al Segovia, supra note 329. 337. WATER FOR TEXAS-2002, supra note 2, at 30. Telephone Interview with Al Segovia, supra note 329; see Guadalupe-Blanco River Auth., supra note 102 (stating that the GBRA pays twenty-one percent of the STWM total assessment for water used for industrial purposes). 2006] TEXAS WATERMASTERS

Municipalities also resent the assumption of state control that a watermaster represents.338 Watermasters are generally not popular figures, especially during times of water shortage.339 Even water rights holders who respect the water rights of others have grown accustomed to the manner in which they use water and dislike the idea of state control.34° The Commission allows local input on the watermaster program through the Watermaster Advisory Committees, and at public hearings on assessments.34' In reality, however, local water rights holders have no political or legal control over the watermaster, who is solely accountable to the executive director.342 This lack of political control runs counter to the Powell philosophy. State water programs that follow the Powell philosophy of local control, such as groundwater conservation districts, are much less controversial and more readily adopted.343

C. The Promise of Watermasters: Markets and Conservation

Enforcement of water rights increases their certainty, which is essential for water planning and marketing. 344 For years, the state and commentators have anticipated the explosion of water markets in Texas.345 Yet sustainable markets have not developed because, as the Senate Select Committee on Water Policy noted, "[eiffective water marketing will require the development of options to ensure compliance with surface water rights statutory and regulatory 346 requirements, such as instituting [w]atermaster programs where needed. Not surprisingly, both the Rio Grande and South Texas River Basins developed strong water markets since enforcement of water rights became routine.347 Water marketing provides multiple benefits to water users and the environment. Markets could serve as a drought management tool 348 and solve many of the inequities of the first in time rule. 349 Research suggests that urban

338. See Smith, supra note 143, at 686-87; see also TEXAS WATER CODE ANN. § 11.035 (Vernon 2000) (allowing municipalities to condemn surface water rights). 339. Bowen, supra note 326, online. 340. See Melissa Williams, Meeting Outlines WatermasterDuties, SAN ANGELO STANDARDTIMES, A2 (Oct. 19, 2003). 341. §§ 11.3261, 11.329. See discussion supra notes 151-54 and accompanying text. 342. §§ 11.326, 11.453. 343. Lehman, supra note 30, at 104-05. 344. TEX. SENATE SELECT COMM. ON WATER POLICY, supra note 327, at 11. 345. DeLaughter, supra note 315, at 1485. 346. TEX. SENATE SELECT COMM. ON WATER POLICY, supra note 327, at 11. 347. Guadalupe-Blanco River Auth., supra note 102, online; EXECUTIVE SUMMARY, supra note 243; Kathy Viatella, Water Markets, The Texas Living Waters Project, at 1, availableat http://www.texas watermatters.org/pdfs/water-planning-committee3.pdf. 348. Ronald Kaiser, Water Marketing in the Next Millennium: A Conceptual and Legal Framework, 27 TEX. TECH LAW REV. 181, 187-88 (1996). 349. DeLaughter, supra note 315, at 1475 (noting the conflict between senior and junior water rights, and the need for legislative intervention). 176 TEXAS TECH ADMINISTRATIVE LAW JOURNAL [Vol. 7:143 areas in the Western United States could meet their water needs for the next twenty-five years by acquiring five percent of the region's irrigation water.350 Water marketing allows water to flow towards municipal use from less profitable uses such as irrigation.351 Farmers in Texas are apprehensive about selling their water rights to municipalities.352 In California, however, where watermaster programs are state-wide,35 farmers are exchanging irrigation water rights for enormous short-term profits.354 Texas could preserve its farms and ease the burden on municipalities by adopting the wet-water marketing system used along the Rio Grande state-wide.355 Marketing can also aid the conservation of water by reducing the need for new reservoirs and creating a financial incentive to reduce use.356 While a watermaster might not improve water marketing on all rivers, markets in basins that are over-appropriated will likely benefit from intrabasin transfers and enforcement of water rights. 7 Watermasters also aid in conservation of surface water by ensuring that water rights holders put water to only beneficial uses.358 Enforcing water rights prevents misuse, pollution, waste, and over-consumption of water.359 Texas expects to gain over thirteen percent of its water through conservation. 360 The watermaster's assessments on water-use creates a small, but effective, incentive to conserve.36' Watermasters record data on water consumption, use, and demand that would increase the reliability and accuracy of water availability models.3 62 The

350. A. DAN TARLOCK ET. AL, WATER RESOURCE MANAGEMENT: A CASEBOOK IN LAW AND PUBLIC POLICY 33, (5th ed. 2002). 351. DeLaughter, supra note 315, at 1474. 352. Id. 353. See CAL. WATER CODE §§ 4000-4025 (Deering 2000). 354. See Associated Press, Water for Sale: Farmers Going Dry in Liquidation, LUBBOCK AVALANCHE JOURNAL (Dec. 8, 2003). 355. See 30 TEX. ADMIN. CODE §§ 303.72,304.62 (West 2005); email from Carlos Rubenstein, Rio Grande Watermaster, (Feb. 4, 2005, 09:08 CST) (on file with author). 356. Viatella, supra note 347, online; Smith, supra note 143, at 686-87. A reservoir disrupts the environment because construction and filling of an on-channel reservoir impacts wildlife within the reservoir area as well as further downstream. An off- channel reservoir similarly affects the environment within the reservoir's immediate area. Unless there is a showing of strict necessity, the Commission is reluctant to grant new reservoir project permits. Id. 357. See Kaiser, supranote 348, at 188; DeLaughter, supranote 315, at 1475 (noting that intrabasin transfers of water rights are desirable because interbasin transfers transform the transferred water rights as the most junior in the area); Viatella, supra note 347, online. 358. TEX. WATER CODE ANN. §§ 11.081-.121 (Vernon 2000). 359. Viatella, supra note 347, online. 360. WATER FOR TEXAS, supra note 2, at 71. 361. See Kaiser, supranote 348, at 215 (illustrating that taxes on resources such as copper and coal have effectively served to protect the resource). 362. Telephone Interview with Herman Settemeyer, TCEQ Staff Engineer, in Austin, Tex., (Jan. 31, 2004); Telephone Interview with Matt Nelson, Texas Water Bank Director, in Austin, Tex. (Jan. 31, 2006] TEXAS WATERMASTERS

Texas Water Development Board asserts that it requires precise data on water consumption and demand for state water plans.3 63 Watermasters and their deputies record the needs and behaviors of water rights holders as an integral part of their daily operations. 36 Expanding watermaster programs beyond the eight river basins in which they currently operate will provide state water planners with better resources for water modeling.365

VII. CONCLUSION

Texans must make tough choices before the opportunity to service the state's water needs dries up. Expanding watermaster programs throughout the state would increase the availability of water through marketing and conservation as Texas moves towards the looming water crisis. Texas watermasters are creations of water crises, emergency tools that state planners have applied to areas with the most severe water problems. After each drought in the last fifty years, the legislature has adjusted these tools to manage the demands of water rights holders better. Senior water rights holders have a strong incentive to seek water enforcement as well as the ability to apply for and review watermaster master programs. The opposition to watermasters is largely the product of a mismatch in legal and political priorities. Historical precedents in water law have departed from current water demands. Ranchers and irrigators gained superior title to water when the needs and populations of municipalities were not so great. As the needs and populations of municipalities grow, Texas must balance legal, political, economic, and environmental water concerns. Fortunately, the vision to address these concerns already exists in the Water Code; only the implantation remains. Texans can petition to improve water rights enforcement and consumption data by expanding watermaster programs. Such action could change the coming water crisis from another chapter of Texas droughts into a lasting story of drought prevention.

by Augustus L. Campbell

2004). 363. WATER FOR TEXAS, supra note 2, at 93 (recommending that the state increase data on water consumption and demand). 364. EXECUTIVE SUMMARY, supra note 243; Guadalupe-Blanco River Auth., supra note 102, online. 365. See Kaiser, supra note 348, at 256 (1996) (suggesting that the legislature implement watermasters to collect water use data).