Garwood Irrigation Company - Page 6

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          of the water allotted by its certificate.  In the several years             
          leading up to the valuation date, an average of 100,000 acre feet           
          per year were used for irrigation purposes.  In each year, the              
          difference between the amount of water petitioner was entitled to           
          withdraw (168,000 acre feet) and the amount of water needed to              
          serve its irrigation customers (100,000 acre feet) was                      
          approximately 68,000 acre feet.  The 68,000 acre feet of extra              
          water flowed unused past petitioner’s diversion point and into              
          the Matagorda Bay every year.                                               
          2.   Events Before the Valuation Date                                       
               A.   Regulatory Climate                                                
               The TNRCC regulated the use, transfer, and management of               
          Texas water, and no transfer of water rights in Texas could occur           
          without the TNRCC’s approval.  If a transfer would result in the            
          subject water being put to a different type of use than that                
          listed on its certificate, or the movement of the subject water             
          to a different area or basin, the seller was required to apply to           
          the TNRCC to amend its certificate to reflect the new use or                
          location.  As of the valuation date, the TNRCC had broad                    
          discretion to grant or deny amendments, and evaluated each                  
          application based on six criteria:  Availability of additional              
          requested water, environmental impacts, injury to existing                  
          rights, beneficial use (including need), public welfare, and                
          water conservation.  The TNRCC also conducted technical reviews             






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Last modified: May 25, 2011