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use, it is not perfected. But once you do, it is perfected, and it becomes a property right, just like any other property right, and if it's taken from you, you have to be compensated for it. I would submit to you that the exception, as recognized by the Texas Supreme Court, is this cancellation for non -use, because again what you have is a right of use, not the ownership of the corpus of the water. And so the state could come back in and could cancel that, but as opposed to any other party who wants to tread on your property rights, once you've put it to use, it is perfected and the court would recognize it as it would your ownership of a fee simple title. There was also a question here... Reeves Hayter: Before you get away from that, Jim, what effect does that have here. We haven't used all our water, so some of our water rights are not perfected. Jim: I don't see anybody else being able to do that. You have begun the beneficial use of your water right, paid for through the construction of this reservoir and this project. And before the state adopted this exception that basically protected a permitee that had paid for the construction of the Corps project, arguably they could have come in and canceled. They never attempted to do that, and Dallas was sitting out there for decades with these major reservoirs that were planned for decades in the future. And so the state never saw fit to do that, but the Legislature finally stepped up and said, "OK, we understand you've made major capital investments and you'd like to have some protection. We're going to give you that protection." And so I don't see under current law they could cancel any unused portion of your project at this point in time. Sharron Nabors: Tyler lost its water. Surface water. JM: It's my understanding that Tyler still owns its water rights to Lake Palestine, but I don't know for sure. Darrell Cline: I'm their rate consultant, and to my knowledge they haven't lost them. My understanding is that Dallas participated in the construction, so they have a portion of the water rights, and Tyler also participated in the construction, so they have a portion of the water rights. Tyler still has the same amount they've always had. JM: I'll be glad to look into that. JM: I'll move on now to this next question, which is somewhat different, what factors can cause an impoundment to fall under congressional control. Let me give you the legal answer. The United States government exercises control over things in this state that relate to interstate commerce, and lots of water relates to interstate commerce, because it flows between states, or it's the habitat for migratory birds that fly between states. So there are a few case laws that keep evolving at the Supreme Court level about the extent of the reach of the interstate commerce laws. Secondly, Congress exercises control over things that are related to the federal perks, when they spend money. They clearly spent money to construct Lake Pat Mayse, and so they have the onwership interests of Lake Pat Mayse. They own the reservoir. They have contracted with the City of Paris to give you the right to store water in that reservoir, and the right to use the storage space between 415 msl and 451 msl, and it's a quantified amount of space in there, so clearly Congress has some control over Lake Pat Mayse. Let me give you an example that's not only a cost of the water rights subject but a water quality subject. The federal government operates a permitting program for the discharge of pollutants, and in Texas that program is run by the TCEQ, but for the city's wastewater treatment plant and for industrial wastewater discharges, you have to go get a permit. You get it from the state, but really it's a federal permit, and they do that because they have the right to protect water, because it's useful in interstate commerce. With regard to the water right, the state is the party that owns the water right except where there may be some need for federal oversight, such as