Tex. Water Code § 51.765

(a) After the district adopts an order excluding nonirrigated property, a municipality or water supply corporation that serves the excluded land with a potable water supply may petition the district to apply to the commission to convert the proportionate irrigation water allocation of the excluded land from irrigation use to municipal use allocation.

(b) The district shall make the application to the commission not later than the 30th day after the date a municipality or water supply corporation that serves the land with a potable water supply petitions the district to make the application if the municipality or water supply corporation:

(1) pays the district the amount the district estimates will be its reasonable expenses and attorney's fees incurred in the commission conversion proceedings; and

(2) enters into an agreement with the district establishing the terms on which the water allocation shall be delivered or made available to the municipality or water supply corporation.

(c) If the parties cannot agree to water allocation terms, the parties shall attempt resolution of their differences through mediation, arbitration, or another alternative dispute resolution process. The commission does not have jurisdiction to resolve the parties' differences.

(d) Together with the district's application, the municipality or water supply corporation must provide the commission with evidence to support the projected need for water for the five years after the conversion to a municipal-use water allocation.