Strategic Planning

Texas water law evolves to meet rapid growth in demand.

Written by Michael A. Gershon and Nathan E. Vassar

Texas enters 2023 as one of the world’s largest economies.¹ Committed to a business-friendly regulatory environment and blessed with its proximity to global markets, an educated and skilled workforce, and life in the Sun Belt, Texas continues to attract growth. Its population grew by an estimated 9.4 million people to 30.2 million since 2000 placing Texas as the second most populous state with among the highest growth rates in the nation.² This growth drives demand for more water, which requires responsible and proactive water supply planning and management.

Challenges
Because of the state’s diverse terrain, subsurface geology, and climate, not all of the available water supplies are located near the growth corridors or where the state’s industry, cities, or farmers need it. Consequently, those developing new supplies must factor in the economics and engineering logistics of moving water long distances. Although many of our state’s river basins are fully allocated, there are surplus supplies available in East Texas. Development of East Texas surface water has been hampered because of the Texas statute subjecting interbasin transfers to cut-off if in-basin users need the water.³ But groundwater policy on long-distance transfers contains no such limitation. Texas law protects groundwater exports by prohibiting discrimination: exporters’ permits cannot be restricted more than in-district permits with limited exception.⁴ This dichotomy has certainly motivated those in need of moving water long distances to look to groundwater.

Texas has a plan
Our state’s official 50-year plan, which was updated in mid-2021 by the Texas Water Development Board, or TWDB, estimates that demand will increase from 17.7 million to 19.2 million acre feet per year, yet existing supplies will decline from 16.8 million to 13.8 million acre feet per year primarily due to the depletion of aquifers. This plan outlines an approach to meet this deficit, including development of new fresh water, conservation efforts, water reuse, and treatment of brackish water. At present, only three surface reservoirs are forecast to come online during this planning period, so much of the new fresh water will require pumping groundwater.

The plan is updated every five years based on substantial stakeholder work among 16 regions that produce individual plans from each region.⁵ These regional planning groups rely heavily on models designed by the Texas Commission on Environmental Quality, or TCEQ, and TWDB to assess availability of surface water and groundwater, respectively. The model inputs include data and scientific attributes of our rivers, lakes, and aquifers collected over decades. These models are relied upon for planning on a regional scale and can be refined for use at a more local level. The planning process requires the coordinated efforts of water suppliers, regulators, stakeholder consultants, and other interested parties to develop the state water plan with the various data and planning components.

Texas Constitution’s Conservation Amendment the impetus for significant water legislation
Our state’s water laws were born out of the experience of our lawmakers with cycles of extreme flooding and drought in the late 1800s and early 1900s. The Texas Constitutional Amendment of 1917 was necessitated by these severe weather events and has had the most profound effect on our state’s water laws of any legal enactment.⁶ Passed overwhelmingly by Texas voters, Article 16, § 59 made clear that conservation, development, and preservation of the state’s water and other natural resources are public rights and duties and empowered the Legislature to address these priorities.⁷ Notably, the Legislature created hundreds of local conservation-and-reclamation districts⁸ to manage water rights, groundwater pumping, water quality, and the provision of drinking water and flood protection. Over the past 25 years, the Legislature has made water policy a top priority, symbolically earmarking Senate Bill 1 as priority No. 1 in 1997, with sequential, next steps and progress in evolving this policy by passage of omnibus legislation with SB 2 (2001), SB 3 (2007), and House Bill 4 (2013).⁹

During the 88th legislative session, which begins this month, the interim charges indicate the following water priorities, among others: flood protection, compensating permit holders when TCEQ makes emergency authorizations, protecting landowners from large-scale groundwater project impacts, examining how to achieve the desired future conditions of our aquifers, protecting groundwater quality from deteriorated orphan wells, promoting conservation, upgrades to aging water infrastructure, and next steps with desalination.

These priorities reflect a state that recognizes the need to harness natural resources in a manner that remains of great benefit to Texans and also in ways to minimize the negative externalities that come in other settings, such as with flood events. The coming months will reveal which of these will translate into law and policy outcomes, and those that do not. The reality of persistent and stubborn drought that has plagued much of the state in recent years may elevate water reuse, desalination, and groundwater strategies to places of prominence, including with potential funding for projects arising out of the state’s budgetary surplus. The state has historically set aside funds for major water projects, notably the State Water Implementation Fund for Texas, or SWIFT. It is too soon to know whether federal funds or state funding initiatives may emerge during this legislative session, but as water supply planners will testify, funding is a critical component to implementation of state water plan priorities. Private property rights are often the focus of legislators, and the priority listing of compensation for regulatory curtailment of water supplies could drive a pay-for-unavailable-supplies framework that has never been used in Texas water law. Similarly, mandating cost-based mitigation by large-scale groundwater pumpers would be unprecedented. Those of us on the front lines of water policy will be involved in the development and implementation of new and updated state water policies this spring and beyond.

Regulatory certainty is critical for water stakeholders
Whether regulation is popular or not, regulatory certainty is essential for stakeholders who must manage and rely upon water. The Texas Supreme Court pointed out the usefulness of regulatory certainty rather than allowing unrestricted groundwater pumping that caused wells to go dry in Sipriano v. Ozarka, remarking that “it is not regulation that threatens progress, but the lack of it.” Utilities, farmers, municipalities, and industrial users need to know their water supply is reliable. It is the authors’ observation that most stakeholders accept and prefer the certainty of permitting as long as they can count on the volume of surface water or groundwater authorized by permit. It is the authors’ opinion that there is appropriate due process, remedies, and substantive guidelines in the Texas Water Code for permitting surface water and groundwater. Whether permitting surface water under Chapter 11 at TCEQ or before a groundwater district under Chapter 36, the key issues require evidence of water availability and whether withdrawals will unreasonably affect other owners of water rights. What remains controversial is the tension between historic users and new users. Should new users pumping for the first time have to mitigate impacts of their pumping on the historic users? Should historic users have to cut back historic levels of pumping to accommodate new users?

Conclusion
There will continue to be competition for our state’s water resources and legal battles over prioritization of purposes of use and what is a landowner’s fair share. Recent court precedent and executive and legislative priorities point to the continued focus on water supply planning by all three branches of Texas government. Within our area of practice, it remains critical to remain engaged in these developments to ensure the continued reliability of water supplies for our growing state. Although droughts, floods, and geographic limitations are at play, resolve and thoughtful efforts can overcome such challenges to develop a landscape where needs are met by the implementation of proactive water management and strategic planning into the future. ^TBJ

MICHAEL A. GERSHON
is a principal and water, utility, and environmental lawyer at Austin-based Lloyd Gosselink Rochelle & Townsend, where he chairs its 20-lawyer Water Practice Group. He has served as chair of the State Bar of Texas Environmental and Natural Resources Law Section and chair of the San Antonio Bar Association Environmental Law Section, and is a fellow of the Texas and Austin Bar foundations.

NATHAN E. VASSAR
is a principal at Lloyd Gosselink Rochelle & Townsend in Austin. His practice focuses on assisting clients with water supply planning, enforcement defense matters, regulatory compliance, and water quality matters. Vassar also represents clients in enforcement and civil litigation matters before federal and state courts and administrative agencies.

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