State Subsidies: The Agricultural Loan Guarantee Program
The Agricultural Loan Guarantee Program 26-27 by texaspolicy on Scribd
When it comes to legal battles, this week is proof of Mark Twain’s famous aphorism that “whiskey is for drinking; water is for fighting over.”
Yesterday, a Texas district court entered a final order in Texas Farm Bureau v. TCEQ, which involved the state’s authority to override the standard system of vested water rights in times of severe drought. Surface water rights are issued under the Prior Appropriation system, which follows a rule of “first in time, first in right” (i.e. older, or more “senior,” water rights are given priority over more recent water rights in case of conflict). Recent drought conditions led the legislature to pass legislation during the last legislative session extending TCEQ’s authority to curtail water rights in emergencies. In 2011, TCEQ invoked this authority to curtail senior water right holders prior to several municipalities, on the basis of their general authority to protect health and safety, rather than the water code. The district court, however, has concluded that TCEQ lacked the authority to curtail water rights based on the use of the water rather than the seniority of the right. The decision will likely be appealed.
This morning, the U.S. Supreme Court issued its opinion in Tarrant Regional Water District v. Herrmann, a water dispute pitting Texas against its northern neighbor Oklahoma. Along with several other states, Texas and Oklahoma are part of the Red River interstate compact that is supposed to help resolve water conflicts between the states. Oklahoma state law, however, effectively blocks water from Oklahoma from being sold out of state. After unsuccessfully attempting to get a permit for such a sale, Tarrant’s water district sued, claiming the Oklahoma law violated the terms of the compact. Unfortunately for Texas, a unanimous Supreme Court held that the Red River Compact did not preempt Oklahoma law, and that Oklahoma’s restrictions were perfectly constitutional.
While much of the focus of late has been on state funding for water, the Herrmann and Farm Bureau decisions highlight the growing importance of legal and regulatory issues. All the subsidized loans in the world won’t matter if regulations effectively prevent the sale of water or if a water right, once purchased, can be unilaterally overridden at the discretion of the state.