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News Release from Comptroller Susan Combs

Contact: Allen Spelce
R.J. DeSilva
(512) 463-4070

For Immediate Release
February 11, 2008

Comptroller Combs to Discuss Mexican Water Case and
Other Key Texas Issues During Washington Visit


(AUSTIN) —Texas Comptroller Susan Combs will meet with the Texas congressional delegation and officials of the U.S. State Department this week to urge support for Texas farmers and water districts in litigation with Mexico over the allocation of water from the Rio Grande River.

From 1992 – 2002, Mexico violated a 1944 U.S.-Mexico water treaty by withholding water from the Rio Grande, creating water shortages downstream that cost Texas $1 billion in economic losses.  Mexico has repaid Texas 1.5 million acre-feet of water, but some Rio Grande Valley farmers and irrigation districts are pursuing damage claims against Mexico under the North American Free Trade Agreement (NAFTA) 
for financial losses they suffered.

The U.S. State Department intervened in the case, saying the Texas claimants were not entitled to seek compensation under NAFTA, unless they had investments in Mexico. In June 2007, a NAFTA arbitration panel found the Texas water interests were not an investment and ruled against the Texas claimants. The Texas group has challenged the ruling in a Toronto court, the site agreed to by the parties for the case.

Combs will brief officials in Washington on Texas’ plans to enter the case as a “friend of the court,” to explain Texas water law and the significance of Rio Grande Valley agriculture to the state’s economy.

“Texas is joining the fight because anything that hurts farmers hurts the Texas economy,” Combs said.

During a visit to the Valley last week, Combs met with farmers, ranchers and water district officials, urging them to contact the State Department and their representatives in Congress to try to persuade federal officials to side with Texas farmers.

“As the case concerning Mexico’s treaty violation moves forward, our congressional delegation and state officials support our farmers and stand behind Texas, and I hope the U.S. State Department will do the same,” Combs said.  “Water is not only a critical issue for our farmers, it is also crucial to serve our growing population and encourage economic development.”

Combs, who previously advocated for the water districts as Texas Agriculture Commissioner, has organized the state’s effort in the case. She is working with the Attorney General’s office and has hired the Canadian lawyer who will be required to represent the state there.

During her Washington visit, Combs will also discuss other important state issues with the Texas congressional delegation.

Comptroller Combs will urge the delegation to support efforts by Congressman Kevin Brady and others to preserve a law allowing Texans to deduct state and local sales taxes from their federal income tax.

“The sales tax deduction saves Texans more than $1 billion a year on their federal income tax, an average of $520 per filer claiming the deduction,” Combs said.  “We need to keep Texans’ money here in Texas and put it to work in the Texas economy.”

The sales tax deduction has expired for 2008 and beyond, unless Congress votes to bring it back.

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