Garwood Irrigation Company - Page 7

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          of hydrology, environmental factors, and water conservation.  If            
          a change in use would cause harm to other in-basin users, the               
          requested amendment could be denied.  A request for a transfer of           
          water to another basin, or an “interbasin transfer”, required               
          additional consideration of the benefits and detriments to each             
          basin.  In addition, when an application was made, the TNRCC                
          would notify interested persons and give them an opportunity to             
          present evidence and be heard on the matter.  If an interested              
          party objected to the TNRCC’s determination, it had the option of           
          filing suit in a district court of Travis County, Texas, for                
          review of the TNRCC’s determination.  The district court’s                  
          decision was appealable to the Texas Courts of Appeal and the               
          Texas Supreme Court.  Around the valuation date, the TNRCC                  
          generally granted or denied uncontested applications within 12 to           
          18 months of their filing.  The amendment process for contested             
          applications generally took between 2 and 5 years at the TNRCC              
          level excluding any time spent in the Texas courts.                         
               B.   Corpus Christi Transaction                                        
               In 1992, petitioner granted the city of Corpus Christi an              
          option to purchase the right to a 35,000 acre-foot portion of               
          petitioner’s water right for $400 per acre foot.  The agreement             
          was for 2 years and required Corpus Christi to pay petitioner               
          $20,000 per month to keep the option open.  The monthly payments            
          would be credited to the purchase price if Corpus Christi                   

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Last modified: May 25, 2011