Brazos River Auth. v. City of Hous.
| Decision Date | 30 June 2021 |
| Docket Number | NO. 03-20-00076-CV,03-20-00076-CV |
| Citation | 628 S.W.3d 920 |
| Court | Texas Court of Appeals |
| Parties | BRAZOS RIVER AUTHORITY and The State of Texas, Appellants v. CITY OF HOUSTON; and Sylvester Turner, in his Official Capacity as Mayor of The City of Houston, Appellees |
Tiffany S. Bingham, Collyn A. Peddie, Charles H. Houston III, for Appellees City of Houston, Sylvester Turner, in his Official Capacity as Mayor of The City of Houston.
Jane M. N. Webre, Michael Merriman, Santosh Aravind, Casey L. Dobson, Austin, for Appellant Brazos River Authority.
Christopher Carter, Houston, Matthew Bohuslav, Austin, Natalie D. Thompson, for Appellant The State of Texas.
Before Justices Goodwin, Triana, and Smith
Edward Smith, Justice This is a dispute over the right to construct and operate a reservoir on Allens Creek. For over two decades, the City of Houston and the Brazos River Authority have jointly held a water-appropriation permit authorizing them to construct the reservoir and to use some of the water impounded there. In 2019, the Legislature instructed Houston to transfer its entire interest in the proposed reservoir, including its permit rights, to the Authority. See Act of May 16, 2019, 86th Leg., R.S., ch. 380, § 1, 2019 Tex. Gen. Laws 688, 688 (H.B. 2846). On cross-motions for summary judgment, the district court granted declaratory relief that H.B. 2846 is "unconstitutional, void, and unenforceable." We will affirm.
BACKGROUND
To provide context to the parties’ dispute, we begin with an overview of the relevant statutory framework, found in Chapter 11 of the Water Code. Under Chapter 11, the waters of Texas rivers, streams, and lakes are declared "the property of the state," see Tex. Water Code § 11.021(a), and "held in trust for the public," see id. § 11.0235(a). The right to use state water may be acquired by appropriation in the manner and for the purposes the chapter prescribes. See id. §§ 11.022, .023. No one may appropriate state water or "begin construction of any work designed for the storage, taking, or diversion of water" without a permit from the Texas Commission on Environmental Quality. See id. § 11.121. In processing a permit application, the Commission must comply with various procedural requirements, including providing notice to senior water rights holders and the opportunity for a hearing. See id. §§ 11.132, .133. The Commission may grant the application only after concluding, among other things, that the proposed appropriation "is intended for a beneficial use." See id. § 11.134(b)(3)(A). The permit may authorize an appropriation for a certain time or of permanent duration. See id. §§ 11.135–.138.
A permanent water right is conditioned on ongoing "beneficial use" of the appropriated water as set out in the permit. See id. § 11.135(a) (). The appropriative right is limited "not only to the amount specifically appropriated" in the permit, "but also to the amount which is being or can be beneficially used for the purposes specified in the appropriation, and all water not so used is considered not appropriated." See id. § 11.025. Similarly, no appropriative right is "perfected" until the water has been "beneficially used" for a purpose specified in the permit. See id. § 11.026. And because "[n]o person is granted the right to waste water by not using it," Lower Colo. River Auth. v. Texas Dep't of Water Res. , 689 S.W.2d 873, 882 (Tex. 1984), an appropriative right is subject to forfeiture or cancelation for nonuse, see Tex. Water Code §§ 11.030, .146, .171–.177, .183–.186. "But such rights continue to exist in perpetuity to the extent beneficial use does." Ware v. Texas Comm'n on Env't Quality , No. 03-14-00416-CV, 2017 WL 875307, at *1 (Tex. App.—Austin Mar. 3, 2017, no pet.) (mem. op.). With this statutory framework in mind, we turn to the history of the case.
The site of the proposed reservoir is an approximately 9,500-acre tract located in Austin County near the confluence of Allens Creek and the Brazos River. In 1974, the Texas Water Commission (a predecessor of the Commission) granted Houston Power and Lighting Company's application for a permit to build a reservoir on the site. Water Appropriation Permit 2925 authorized HP&L to construct the reservoir and to use a certain amount of the water impounded there. The reservoir was never built, and the Commission canceled the permit at HP&L's request. HP&L retained ownership of the site subject to an option to purchase held by the Authority.
Id. § 1.02(b). To confirm the Commission's authority, S.B. 1593 amended Chapter 11 to authorize the Commission to reissue certain permits without notice or hearing. Id. § 2.01 (codified at Tex. Water Code § 11.1311 ).2
The Commission reissued the permit—now called Permit 2925A—to the Board in February 2000. Meanwhile, the Authority exercised its option to purchase the reservoir site. The Authority paid $150,000 and received a deed to the site, subject to payment of the full purchase price. To secure financing for the site and the reservoir itself, the Authority turned to Houston. Houston and the Authority executed an interlocal agreement specifying their responsibilities. As an initial step, they agreed to jointly apply to the Water Board for a $20,000,000 loan to finance purchase of the site, with Houston committing to pay 70% and the Authority 30%. If the two were successful in obtaining the loan, the Authority agreed to convey to Houston a 70% interest in the site. Next, they would jointly apply to the Commission to reissue the permit jointly to them. Houston committed to pay 70% and the Authority 30% of the development and construction costs, with each party receiving a proportionate share of the water appropriated by the permit.
The Water Board granted the loan application the same year. The Authority recorded its deed to the site but did not convey any interest to Houston. The Commission subsequently issued an amended Permit 2925A jointly to Houston and the Authority.3 The permit required that construction begin no later than September 1, 2018, and finish within three years. Failure to meet either deadline would cause the permit "to expire and become null and void" unless the Commission granted an extension.
However, construction could not start immediately. The permit required the holders to design the reservoir, undertake a habitat mitigation study in cooperation with the Texas Parks and Wildlife Department, and develop a plan to mitigate the environmental effects of the reservoir. The design would have to comply with standards laid out in the Commission's rules, and the plans would have to be submitted to the Executive Director of the Commission for approval "prior to beginning construction." In addition to these state-law requirements, federal law required the parties to obtain a permit pursuant to Section 404 of the Clean Water Act from the Army Corps of Engineers. Houston and the Authority executed a memorandum of understanding with the Texas Parks and Wildlife Department as an initial step towards meeting these requirements. The studies had not been completed as of the date of trial, and the two have not begun the process for acquiring the Section 404 permit. As the September 2018 deadline approached, Houston and the Authority requested an extension from the Legislature. In 2011, the Legislature agreed and directed the Commission to reissue the permit with a September 1, 2025 deadline to begin construction. See Act of May 19, 2011, 82d Leg., R.S., ch. 434, § 2, sec. 1.06, 2011 Tex. Gen. Laws 1104, 1104 (S.B. 1132). The Commission issued an amended permit—now called Permit 2925B—reflecting the new deadline.
The permittees made no further progress developing the reservoir by the time the Legislature held hearings on H.B. 2846 in 2019. Representatives of the Authority, Houston, and other interested entities testified. David Collingsworth, the Authority's general manager, testified that Houston was uninterested in funding the project because it did not need additional water. Collingsworth testified that the Authority, in contrast, needs additional water to meet the needs of its customers in the region. Carol Haddock, Houston's Director of Public Works, testified that Houston "did not necessarily fully appreciate the urgency of our partners" but was committed to the project. She estimated that Houston had spent approximately twenty-three million dollars on it to date. Other stakeholders testified in support of the bill and regarding the need for a reservoir in the area.
H.B. 2846 passed the Legislature and was signed into law. It amends S.B. 1593 to provide:
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