Garwood Irrigation Company - Page 14

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          passage of SB1, there have been no major interbasin transfers               
          that were subject to the Junior Water Rights Provision.                     
               B.   The Corpus Christi Transaction                                    
               On January 30, 1997, petitioner filed an application with              
          the TNRCC for an amendment to its certificate approving an                  
          interbasin transfer of a 35,000 acre-foot portion of petitioner’s           
          water right to Corpus Christi.  In September 1997, the TNRCC gave           
          public notice of the filing of petitioner’s application.  Fifteen           
          parties, including the LCRA and Austin, filed protests to the               
          proposed transfer to Corpus Christi.  The LCRA did not hold a               
          public hearing regarding petitioner’s application.  As of the end           
          of 1997, petitioner’s application was still pending with the                
          TNRCC.                                                                      
               C.   LCRA’s Purchase of Petitioner’s Water Right                       
               At the valuation date, the LCRA showed no interest in                  
          acquiring petitioner’s water.  The LCRA’s interest was protected            
          if it could effectively block the approval of an interbasin                 
          transfer of the water by petitioner.  In late 1997, after the               
          enactment of SB1, the LCRA began to analyze a possible                      
          acquisition of the remaining 133,000 acre-foot portion of                   
          petitioner’s water right, as well as petitioner’s dam, pumps,               
          canals, and other irrigation assets.  On December 12, 1997, Mark            
          Rose, the general manager of the LCRA, met with Mr. Lehrer to               
          discuss a possible acquisition of petitioner’s assets.  On                  






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