Brazos River Authority and the State of Texas v. City of Houston And Sylvester Turner, in His Official Capacity as Mayor of the City of Houston ( 2021 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-20-00076-CV
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
FROM THE 261ST DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-19-004189, THE HONORABLE KARIN CRUMP, JUDGE PRESIDING
DISSENTING OPINION
In 2019, the Legislature enacted H.B. 2846, directing the City of Houston to
contract with the Brazos River Authority (BRA) to transfer “all of the city’s ownership interests
in the Allens Creek Reservoir project, including all required water right permits, along with the
responsibility to construct the project,” in exchange for “an amount not to exceed $23 million.”
Act of May 16, 2019, 86th Leg., R.S., ch. 380, § 1, 2019 Tex. Gen. Laws 688, 688. The City
challenged H.B. 2846’s constitutionality as a retroactive law, see Tex. Const. art. I, § 16; a local
law, see id. art. III, § 56; and as a forced sale, see id. art. XI, § 9. The trial court granted
summary judgment in the City’s favor. Today, the Court affirms on the ground that H.B. 2846 is
an unconstitutional retroactive law without addressing the other constitutional grounds.
People may differ in their views on the wisdom of enacting H.B. 2846 and may
choose to hold their legislatures accountable by expressing their approval or disapproval at the
ballot box. But “[o]ur role is much more limited”: judicial review does not license “second-
guessing the political branches’ policy choices” or “substituting the wisdom of [] judges for that
of [] lawmakers.” Morath v. The Tex. Taxpayer & Student Fairness Coal., 490 S.W.3d 826, 833
(Tex. 2016). A judge’s conclusion that a law “passes the threshold of constitutionality” is “not
an endorsement” of that law because “[c]onstitutionality is a minimum standard—a guarantee.”
Id. at 887, 892 (Guzman, J., concurring). “The power of the courts is not unbounded,” and quite
simply, “we can only grade pass or fail, yes or no.” Id. at 887 (Guzman, J., concurring).
A statute is presumed constitutional, and the party challenging the statute
bears the burden to demonstrate its unconstitutionality. Union Carbide Corp. v. Synatzske,
438 S.W.3d 39, 55 (Tex. 2014). For the following reasons, I conclude that the City did not meet
its burden to overcome this presumption as to the retroactivity ground. In my opinion, the Court
should sustain the State’s and BRA’s appellate issue that H.B. 2846 is not unconstitutionally
retroactive and should then consider their other appellate issues and address the City’s “forced
sale” and “local law” constitutional challenges. Accordingly, I respectfully dissent.
RETROACTIVITY
The Texas Constitution prohibits retroactive laws. See Tex. Const. art. I, § 16.
But “[m]ere retroactivity is not sufficient to invalidate a statute”; “[m]ost statutes operate to
change existing conditions, and it is not every retroactive law that is unconstitutional.” Robinson
v. Crown Cork & Seal Co., 335 S.W.3d 126, 139 (Tex. 2010) (quoting Texas Water Rights
Comm’n v. Wright, 464 S.W.2d 642, 648 (Tex. 1971)). Although courts must “be careful to
enforce the constitutional prohibition to safeguard its objectives,” “courts must be mindful that
statutes are not to be set aside lightly,” id. at 146, and the Texas Supreme Court has noted that it
2
has “only upheld constitutional retroactivity challenges four times,” Tenet Hosps. Ltd. v. Rivera,
445 S.W.3d 698, 708 (Tex. 2014) (collecting cases). Nevertheless, a retroactivity analysis is
“‘not always a simple or mechanical test’”; one Justice has noted that “the question is a complex
one.” Synatzske, 438 S.W.3d at 61 (Lehrmann, J., dissenting) (quoting Landgraf v. USI Film
Prods., 511 U.S. 244, 268 (1994)). Here, not only is the question complex but also the facts
render it a particularly close call, as illustrated by this Court’s considered opinion. But given the
presumption of constitutionality and when confronted with these facts as interpreted in light of
case precedent, it is my opinion that H.B. 2846 passes the “minimum standard” of
constitutionality as to the retroactivity prohibition.
Traditionally, courts concluded that a law is unconstitutionally retroactive when
its retroactive operation impairs vested rights. Robinson, 335 S.W.3d at 139. In 2010, the
Robinson Court abandoned this test, concluding that “[w]hat constitutes an impairment of vested
rights is too much in the eye of the beholder to serve as a test for unconstitutional retroactivity.”
Id. at 143. Instead, “courts must consider three factors in light of the prohibition’s dual
objectives” of “protect[ing] settled expectations that rules are to govern the play and not simply
the score, and prevent[ing] the abuses of legislative power that arise when individuals or groups
are singled out for special reward or punishment.” Id. at 145. These three factors are: (1) “the
nature and strength of the public interest served by the statute,” (2) “the nature of the prior right
impaired by the statute,” and (3) “the extent of the impairment.” Id.
Robinson, however, does not vitiate the need to evaluate whether the prior right is
vested. Indeed, this analysis may play an important role in evaluating the second factor: the
nature of the prior right. See id. at 148 (concluding under second factor that Robinsons’ right to
assert their tort claims “was real and important, and it was firmly vested in the Robinsons”
3
(emphasis added)); see also City of Austin v. Whittington, 384 S.W.3d 766, 790 (Tex. 2012)
(noting post-Robinson that “applying procedural, remedial, or jurisdictional statutes retroactively
does not violate the Constitution’s prohibition on retroactive laws” because “procedural and
remedial laws generally do not affect vested rights, which are property rights that the
Constitution protects like any other property”). Rather, Robinson stands for the proposition that
determining that the prior right is vested is generally not dispositive of the retroactivity issue.
See 335 S.W.3d at 145 (“We think our cases establish that the constitutional prohibition against
retroactive laws does not insulate every vested right from impairment[.]”).1
Nevertheless, the Texas Supreme Court has concluded that determining that a
right is not vested in some circumstances may be dispositive for overcoming a retroactivity
challenge. For example, in Honors Academy, Inc. v. Texas Education Agency, the Texas
1
In other constitutional contexts, Texas courts still determine whether rights are vested.
See, e.g., Klumb v. Houston Mun. Emps. Pension Sys., 458 S.W.3d 1, 15 (Tex. 2015)
(considering constitutional due process challenge and noting that “[a] constitutionally protected
right must be a vested right, which is ‘something more than a mere expectancy based
upon an anticipated continuance of an existing law’” (quoting City of Dallas v. Trammell,
101 S.W.2d 1009, 1014 (Tex. 1937))). Thus, Robinson v. Crown Cork & Seal Co. does not call
into question the entire framework of “vested rights.” See generally 335 S.W.3d 126, 136–47
(Tex. 2010). Rather, Robinson appears to question the “impairs vested rights” test in the
retroactivity context because the case law has inconsistently labeled rights as vested for
retroactivity when the real rationale driving the retroactivity holdings is something other than a
concern for protecting vested rights. Id. at 141–42 (noting that “[i]n each of these cases,
significant interests were adversely impacted by changes in the law, yet the Court held that
vested rights were not impaired”; that “while due process and antiretroactivity may protect
vested rights differently, Mellinger [v. City of Houston, 3 S.W. 249, 254–55 (Tex. 1887)] did not
explain why a limitations bar is a vested right in one context but not in the other,” and “a law that
is prohibitively retroactive might not also offend due process, but not because a vested right for
one is not a vested right for the other”; and that results of past “cases seem entirely reasonable in
a very general sense . . . but it is not clear how they were driven by a concern for protecting
vested rights”); see Union Carbide Corp. v. Synatzske, 438 S.W.3d 39, 56 (Tex. 2014) (“We
determined [in Robinson] that classifying a right or interest as ‘vested’ in order to determine
whether it has been retroactively diminished or impaired in violation of the constitution has not
yielded an efficient and predictable framework.” (emphasis added)).
4
Supreme Court considered whether the decision to revoke an open-enrollment charter school’s
charter based on the retroactive use of past financial ratings was unconstitutionally retroactive.
555 S.W.3d 54, 57, 60 (Tex. 2018). The Court noted that the issue was the charter school’s
“right to continue operating its open-enrollment charter school, an entity owing its powers and
existence to the Legislature.” Id. at 66. Citing long-standing law that “‘Municipal Corporations
do not acquire vested rights against the State,’” the Court held that “a charter school’s charter is
not a vested property right to which the due course of law or prohibition on retrospective laws
apply.” Id. at 67–68 (quoting Deacon v. City of Euless, 405 S.W.2d 59, 62 (Tex. 1966)). Thus,
whether a charter school’s charter was a vested property right to which the retroactivity
prohibition applied was dispositive of the issue without a Robinson analysis.
Accordingly, Honors Academy instructs that although Robinson may have
changed the general analytical framework for evaluating whether a retroactive law is
unconstitutional from an “impairs vested rights” test to a factor test, the nature of the prior right
may, in some circumstances, categorically prevent the application of the retroactivity
prohibition.2 This bar is especially pertinent when a governmental entity or political subdivision,
2
This categorical bar does not necessarily implicate standing, however. See Wilson
v. Andrews, 10 S.W.3d 663, 669 (Tex. 1999) (noting that “we overstated our position” in Proctor
v. Andrews, 972 S.W.2d 729, 734 (Tex. 1998), when Proctor Court in dicta agreed with court of
appeals that city lacked standing to raise due process and equal protection challenges because
municipalities do not enjoy due process rights); Stop the Ordinances Please v. City of New
Braunfels, 306 S.W.3d 919, 929 (Tex. App.—Austin 2010, no pet.) (noting that “plaintiff is not
required to allege the deprivation of a ‘vested right’ constituting a due-process violation to
demonstrate the requisite infringement of a ‘legally protected interest’”). But see El Paso
County v. El Paso Cnty. Emergency Servs. Dist. No. 1, 622 S.W.3d 25, 41 (Tex. App.—El Paso
2020, no pet.) (concluding El Paso County Emergency Services Districts do not have standing to
raise due process and equal protection challenges because “Texas law is well-settled that
municipal corporations and other units of government are not vested with constitutional rights
under the Texas or United States Constitutions”); City of Irving v. Dallas/Fort Worth Int’l
Airport Bd., 894 S.W.2d 456, 465 (Tex. App.—Fort Worth 1995, writ denied) (“[A] municipal
5
like a municipal corporation, asserts a retroactivity challenge, as evidenced by Honors
Academy’s reliance on Deacon. See id. at 67 (citing Deacon, 405 S.W.2d at 62). In Deacon,
landowners challenged a city’s annexation ordinances as void, relying on a statute made
applicable to annexation proceedings pending on March 15, 1963, notwithstanding the statute’s
effective date of August 23. 405 S.W.2d at 60–61. The city argued that to give retroactive effect
to the statute violated the constitutional prohibition against retroactive laws. Id. at 62. The
Deacon Court held:
Section 16, Art. 1, prohibits the making of retroactive laws in so far as they
destroy or impair vested rights. The Legislature cannot by retroactive legislation
applicable to municipal corporations destroy or impair vested rights which
persons have acquired in their relationships with the municipal corporations, but
Municipal Corporations do not acquire vested rights against the State.
...
We hold that Section 16, Art. 1 of the Constitution did not prohibit the Legislature
from making the relevant provisions of Art. 970a retroactive to annexation
proceedings pending on March 15, 1963. It is immaterial that the City may have
begun proceedings for annexation of the territory in controversy when there was
no general law limitation on the size of areas which could be annexed; it acquired
no vested right against the State to complete them.
Id. (internal citations omitted). And this Court has held that municipal corporations cannot rely
on Article I provisions to invalidate laws governing them, stating:
Municipal corporations and other government subdivisions derive their existence
and powers from legislative enactments and are subject to legislative control and
supremacy. Consequently, they cannot use the sword of the due-process-of-law
and other provisions of Article I to invalidate the laws that govern them. . . .
[But] the legislature’s supremacy and control over municipalities and other
agencies of the state do not extend so far as to permit the legislature to infringe
corporation which exists under the authority of a state has no standing to raise a challenge under
the Contract Clause of either the Federal or State Constitution,” and “a municipality’s
sovereignty is dependent upon that of the state.”).
6
upon rights given municipalities and other subdivisions or agencies of the State,
as such, in some express constitutional provision outside Article I.
Texas Workers’ Comp. Comm’n v. City of Bridge City, 900 S.W.2d 411, 414 (Tex. App.—Austin
1995, writ denied); see Honors Acad., 555 S.W.3d at 68 (citing City of Bridge City, 900 S.W.2d
at 414, with approval and noting in citation parenthetical City of Bridge City’s conclusion “that
governmental entities cannot use Article I rights to invalidate the laws that govern them”);
Proctor v. Andrews, 972 S.W.2d 729, 734 (Tex. 1998) (“Courts have recognized that a municipal
corporation or other government subdivision can bring a constitutional challenge based on a
provision outside the bill of rights and its guarantees to ‘persons’ and ‘citizens.’” (citing City
of Bridge City, 900 S.W.2d at 414)); El Paso County v. El Paso Cnty. Emergency Servs. Dist.
No. 1, 622 S.W.3d 25, 41 (Tex. App.—El Paso 2020, no pet.) (“A unit of government may assert
constitutional violations outside of the bill of rights where it is ‘charged with implementing a
statute’ that it believes violates the Texas or United States Constitution.” (quoting Proctor,
972 S.W.2d at 734)).3
3
Other authorities have addressed related issues. See, e.g., Tooke v. City of Mexia,
197 S.W.3d 325, 345 (Tex. 2006) (“A governmental entity cannot complain of a retroactive
waiver of immunity, since all governmental immunity derives from the State, and a
governmental entity acquires no vested rights against the State.” (citing Deacon v. City of Euless,
405 S.W.2d 59, 62 (Tex. 1966))); City of Fort Worth v. Zimlich, 29 S.W.3d 62, 72 (Tex. 2000)
(“The City, however, derives its existence and powers from legislative enactments and is subject
to legislative control. Consequently, the Legislature has the power to require the City to submit
to inconvenient venue, and the City’s due process challenge of this application of the venue
statute fails.”); Proctor, 972 S.W.2d at 734 (agreeing with court of appeals that “municipalities
do not enjoy due process rights”); White Deer Indep. Sch. Dist. v. Martin, 596 S.W.3d 855, 864
(Tex. App.—Amarillo 2019, pet. denied) (“Because statutes are unconstitutional only when they
operate retroactively to ‘destroy or impair’ vested rights, and the District, as a governmental
entity, has no vested rights against the State, we conclude that the District’s interest in tax
revenues is not a vested right to which the prohibition on retroactive laws applies.” (citing
Deacon, 405 S.W.2d at 62)); see also Toledo City Sch. Dist. Bd. of Educ. v. State Bd. of Educ.,
56 N.E.3d 950, 960 (Oh. 2016) (collecting and comparing decisions by “our sister
7
These authorities, however, do not prevent municipal corporations from relying
on the retroactivity prohibition in all situations; it depends on the nature of the prior right
asserted by the municipal corporation. In Milam County v. Bateman—which addressed counties
as political subdivisions—the Texas Supreme Court held that although “the political rights and
privileges delegated to counties are not within the constitutional prohibitions against retroactive
laws and those which impair vested rights,” a “different principle, however, obtains as regards
the rights of counties to property which they may acquire” and “[s]uch rights, as a general rule,
are protected by the same constitutional guarantees which shield the property of individuals.”
54 Tex. 153, 165–66 (1880); see Texas Antiquities Comm. v. Dallas Cnty. Cmty. Coll. Dist.,
554 S.W.2d 924, 930 (Tex. 1977) (plurality op.) (noting that in Milam County “[t]he legislature’s
extensive control over its subdivisions’ political rights was recognized, but it was held that a
subdivision’s property rights, ‘are protected by the same constitutional guarantees which shield
the property of individuals’” (quoting Milam County, 54 Tex. at 166)). The rationale underlying
this distinction appears to rest on the fact that when a political subdivision of the State acquires
and holds property devoted to public use,4 it is generally acting as trustee for the local public:
The corporate entity is a legislative creation, and its powers may be restrained, its
functions changed, or its existence destroyed at the will of the legislature; but, in
supreme courts” “examin[ing] whether the prohibition on retroactive laws extends to
political subdivisions”).
4
The City specifically asserts that its alleged prior right impacted by H.B. 2846 will be
devoted to public use, stating that “H.B. 2846 requires an unconstitutional forced sale of specific
municipal assets Houston owns and will devote to exclusive public use” and that “[t]here is no
dispute that, as a regional WWP, Houston’s[] intended use of the Reservoir was as a municipal
and regional water supply” and citing Tex. Civ. Prac. & Rem. Code § 101.0215(11), (19), (32)
(identifying as governmental functions “waterworks,” “dams and reservoirs,” and “water and
sewer service”); Long Island Water-Supply Co. v. City of Brooklyn, 166 U.S. 685, 689 (1897)
(“[T]hat the supply of water to a city is a public purpose cannot be doubted[.]”).
8
so far as it has acquired and holds property, it is but a trustee for the local public;
and, although its powers be withdrawn or its existence ended, the property which
survives it belongs to the same public, and must be, in some way, applied to its
use. It has no contract right to exist as a corporation, but the public that it
represents has a vested right in the municipal property acquired for its benefit, and
is entitled to demand that such property be applied to its uses.
Love v. City of Dallas, 40 S.W.2d 20, 27 (Tex. 1931) (quoting Pearson v. State, 19 S.W. 499,
500 (Ark. 1892), and noting that Pearson “correctly stated the rule as to legislative power over
. . . other municipal properties” and “[n]ot only is this a correct statement of the rule, but it is the
one accepted by the best writers and courts of the country”);5 see Texas Antiquities Comm.,
554 S.W.2d at 930–31 (discussing Milam County and Love). Thus, consistent with the rationale
enunciated in Love, when a municipal corporation acquires and holds property for the benefit of
the local public, the local public has acquired a vested right in that property by virtue of its
relationship with the municipal corporation, and challenged legislation impairing that right
would be subject to the Robinson factor test to determine whether the law is unconstitutionally
retroactive. See Deacon, 405 S.W.2d at 62 (“The Legislature cannot by retroactive legislation
applicable to municipal corporations destroy or impair vested rights which persons have acquired
in their relationships with the municipal corporations[.]”); see also Robinson, 335 S.W.3d at
145–46 (replacing “impairs vested rights” test with factor test).
5
Love v. City of Dallas concerned school districts’ property rights. 40 S.W.2d 20, 26
(Tex. 1931). However, the Love Court noted, “School districts are local public corporations of
the same general character as municipal corporations” and “are defined as quasi-municipal
corporations”; “[c]ities and towns and municipal corporations are of the same general nature as
quasi-municipal corporations, in so far as here involved, and the right of the Legislature to
create, abolish, enlarge, or restrict them in their territory or powers is, unless restrained by
special constitutional provisions, similar to the authority of the Legislature over quasi-municipal
corporations”; and “[t]his opinion necessarily deals with both types of public corporations, and it
is not believed that the rules of law as to school property rights are different.” Id. at 26–27.
9
From this case law, I derive the following principles. For individuals and private
entities, the Texas Constitution’s prohibition against retroactive laws “broadly protects rights,
although they may not be rights in property.” Wright, 464 S.W.2d at 648. For political
subdivisions like municipal corporations, on the other hand, the constitutional prohibition against
retroactive laws protects a narrower class of rights against the State.6 Reading Honors Academy,
6
Although the cited cases concern different types of political subdivisions—e.g., cities
in Deacon or counties in Milam County—in my opinion the principles that I derive from the case
law generally cover these entities for the purpose of a retroactivity analysis, although the specific
application of the principles may have different nuances depending on what type of entity is
asserting the constitutional challenge. Here, it is undisputed that the City is a home-rule
municipality. “Municipalities are creatures of law that are ‘created as political subdivisions of
the state . . . for the exercise of such powers as are conferred upon them. . . . They represent no
sovereignty distinct from the state and possess only such powers and privileges as have
been expressly or impliedly conferred upon them.’” Town of Lakewood Village v. Bizios,
493 S.W.3d 527, 530 (Tex. 2016) (quoting Payne v. Massey, 196 S.W.2d 493, 495 (Tex. 1946)).
“Home-rule municipalities ‘derive their powers from the Texas Constitution’ and ‘possess the
full power of self government and look to the Legislature not for grants of power, but only for
limitations on their power.’” Id. at 531 (quoting In re Sanchez, 81 S.W.3d 794, 796 (Tex. 2002)
(orig. proceeding)); see also Tex. Const. art. XI, § 5. Although some authorities I cite refer to
political subdivisions as legislative creations, see, e.g., Love, 40 S.W.2d at 27; Texas Workers’
Comp. Comm’n v. City of Bridge City, 900 S.W.2d 411, 414 (Tex. App.—Austin 1995, writ
denied), this does not accurately refer to “home-rule municipalities.” Nevertheless, I see no
reason that these general principles would not also apply to home-rule municipalities as political
subdivisions. See, e.g., City of Galveston v. State, 217 S.W.3d 466, 469 (Tex. 2007) (describing
home-rule cities as political subdivisions by noting that “[p]olitical subdivisions in Texas have
long enjoyed immunity from suit when performing governmental functions” and that “high
standard” for waiver of immunity “is especially true for home-rule cities” because “[s]uch cities
derive their power from the Texas Constitution, not the Legislature”); Guaranty Petrol. Corp.
v. Armstrong, 609 S.W.2d 529, 531 (Tex. 1980) (“A political subdivision has jurisdiction over a
portion of the State; a department, board or agency of the State exercises its jurisdiction
throughout the State. Members of the governing body of a political subdivision are elected in
local elections or are appointed by locally elected officials; those who govern departments,
boards or agencies of the State are elected in statewide elections or are appointed by State
officials. Political subdivisions have the power to assess and collect taxes; departments, boards
and agencies do not have that power.”); Willis v. Potts, 377 S.W.2d 622, 625 (Tex. 1964) (“The
Legislature from time to time has passed laws controlling such Home Rule Cities. Such Home
Rule Cities exist solely by virtue of the State Constitution and legislative enactments. These
cities are therefore political and governmental subdivisions under this state.”); City of Goose
Creek v. Hunnicutt, 39 S.W.2d 617, 618 (Tex. [Comm’n App.] 1931) (“It is true that legislative
10
Deacon, Milam County, Love, and the other related cases discussed above together, I conclude
that when a municipal corporation asserts a prior right against the State to challenge a retroactive
law as unconstitutional, the municipal corporation generally needs to demonstrate that the nature
of its prior right against the State is a vested property right as a threshold requirement to trigger
the Robinson factor test.
With this framework in mind, I turn to the nature of the prior right asserted by the
City.7 The City argues that “appropriated water rights are ordinarily considered to be vested
rights” and that “the ‘prior right’ impaired by [H.B. 2846] is Houston’s right to 70% of water
from the Reservoir.” The State, on the other hand, argues that “[t]he most Houston can claim is
an unperfected right to use water that it has never exercised,” see Tex. Water Code § 11.026
(“No right to appropriate water is perfected unless the water has been beneficially used . . . .”);
that “[t]he power that authorizes or proposes to give may always revoke before an interest is
perfected in the done” (quoting De Cordova v. City of Galveston, 4 Tex. 470, 479 (1849)
(Hemphill, C.J.)); and thus that “the State is free to take away Houston’s unperfected, or
unvested, water rights.”
power to incorporate a home rule city is, by constitutional provision, delegated to the inhabitants
of the territory affected; nevertheless a city so incorporated is a political subdivision of the state
for governmental purposes.”), overruled on other grounds by De Shazo v. Webb, 113 S.W.2d 519(Tex. 1938).
7
BRA and the State raise the appellate issue of whether the City had a vested right and
challenge the City’s assertions to possessing a vested property right against the State. Although
they do not expressly address what rights the City, as a municipal corporation, can acquire as
vested rights against the State for the purpose of a retroactivity analysis, a court performing a
Robinson analysis must consider “the nature of the prior right impaired,” including whether the
City met its burden to overcome the presumption of constitutionality by demonstrating that the
prior right it asserts is a vested property right against the State.
11
The water use permit at issue here, Permit 2925B, is a “grant[] to the permittees
of usufructuary rights to the State’s water upon the implied condition subsequent that the waters
would be beneficially used.” See Wright, 464 S.W.2d at 649; see also Tex. Water Code
§ 11.0235(a) (“The waters of the state are held in trust for the public, and the right to use state
water may be appropriated only as expressly authorized by law.”); In re Adjudication of the
Water Rights of Upper Guadalupe Segment of Guadalupe River Basin, 642 S.W.2d 438, 444
(Tex. 1982) (noting that “[a] usufruct has been defined as the right to use, enjoy and receive the
profits of property that belongs to another”); Ware v. Texas Comm’n on Envtl. Quality,
No. 03-14-00416-CV, 2017 WL 875307, at *1 (Tex. App.—Austin Mar. 3, 2017, no pet.) (mem.
op.) (“Under Chapter 11, the waters of Texas rivers, streams, and lakes (among other sources)
are declared to be the property of the State (i.e., ‘state water’) held in trust for the public, but the
right to use state water (as opposed to corporeal ownership) may be acquired by appropriation in
the manner and for the purposes the chapter prescribes.” (internal footnotes and citations
omitted)). No doubt, “a water right, when acquired and perfected, constituted a vested right to
the use of the water appropriated.” Wright, 464 S.W.2d at 647 (collecting cases); see In re
Adjudication, 642 S.W.2d at 445 (“Appropriated water rights, like riparian rights, are vested.”);
Clark v. Briscoe Irrigation Co., 200 S.W.2d 674, 679 (Tex. App.—Austin 1947, writ dism’d)
(“Nor is there any question but that a water right, when acquired and perfected either under the
posting or permit system, constitutes a vested interest in or title to the use of the water thereby
appropriated.”). But here, the water has not been beneficially used or appropriated, and the
City’s right to appropriate water has not been perfected in the almost 20 years since the permit
had been initially issued. See Tex. Water Code § 11.026.
12
In Motl v. Boyd, the Texas Supreme Court explained and described the nature of a
permit right prior to appropriation. 286 S.W. 458, 475 (Tex. 1926), disapproved of on other
grounds by Valmont Plantations v. State, 355 S.W.2d 502 (Tex. 1962). The Motl Court stated:
“The instrument issued by the board is called by the statute in various sections a permit; that is, a
permit to appropriate water. Permit is synonymous with leave or license, and means no more
than that the party has the license of the state to become an appropriator of water upon statutory
conditions.” Id. (emphasis added). Referencing a predecessor statute of Section 11.026 that
similarly required beneficial use before appropriation rights are considered perfected, the Motl
Court continued: “The right to appropriate does not mature until the permit holder actually
appropriates it in the manner and form prescribed by the statute. . . . On the whole, we think the
permit is just what the name signifies—merely a license to become an appropriator of public
water.” Id. This Court, following and expounding on Motl, explained: “Thus, a permit is no
more than evidence of a right to acquire another right, the right to use whatever quantity of water
the holder may require for a beneficial use.” Lower Colo. River Auth. v. Texas Dep’t of Water
Res., 638 S.W.2d 557, 563 (Tex. App.—Austin 1982) (citing Motl, 286 S.W. at 475), rev’d on
other grounds, 689 S.W.2d 873 (Tex. 1984); see 73 Tex. Jur. 3d Water § 113 (“A permit is,
however, merely a license to become an appropriator of public water on statutory conditions.
The right to appropriate does not mature until the permit holder actually appropriates water in the
manner and form prescribed by the statute.” (citing Motl, 286 S.W. at 475)). Accordingly, not
only has the City not perfected the usufructuary water right described in Permit 2925B, but also
it has not even acquired that right. See Tex. Water Code §§ 11.002(5) (defining “[w]ater right”
to mean “a right acquired under the laws of this state to impound, divert, or use state water”),
.022 (“The right to the use of state water may be acquired by appropriation in the manner and for
13
the purposes provided in this chapter.” (emphasis added)). By acquiring the permit to use the
water, the City has acquired only the “right to acquire [the usufructuary] right” in the future
through beneficial use. See Lower Colo. River Auth., 638 S.W.2d at 563.
Consistent with these authorities, I cannot conclude that the City’s right to acquire
in the future a water use right upon appropriation constitutes a vested property right that would
satisfy the threshold requirement to trigger a Robinson analysis for a municipal corporation. The
City does not cite any case authorities that would support its position that an unperfected water
right granted in a permit is a vested property right, and general principles of Texas law indicate
the contrary. See, e.g., De Cordova, 4 Tex. at 479 (Hemphill, C.J.) (“The power that authorizes
or proposes to give may always revoke before an interest is perfected in the done.”).
The City argues that Permit 2925B is exempt from permit cancellation under
Section 11.173(b), presumably implying that this statutory protection from cancellation changes
the nature of the right granted in the permit to a vested right. See Tex. Water Code § 11.173(b).
But Section 11.173(b) exempts a permit “from cancellation under Subsection (a).” Id. And
Section 11.173(a) merely authorizes the cancellation of a permit based on 10 years of nonuse
“during the 10-year period immediately preceding the cancellation proceedings authorized by
this subchapter.” Id. § 11.173(a). If the condition is satisfied, the permit “is subject to
cancellation in whole or in part, as provided by this subchapter, to the extent of the 10 years
nonuse.” Id.; see id. § 11.172 (“A permit . . . is subject to cancellation in whole or part for
10 years nonuse as provided by this subchapter.”). But Subchapter E provides the procedural
mechanism for cancelling a permit for nonuse and is limited to authorizing the cancellation for
nonuse; it does not generally protect an unperfected water right from cancellation. See generally
id. §§ 11.171–.186 (“Subchapter E. Cancellation of Permits, Certified Filings, and Certificates of
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Adjudication for Nonuse”). In other words, Section 11.173(b) does not create a settled
expectation that a specified type of permit will not be cancelled at all such that the right granted
in the permit is vested; rather, to the extent Section 11.173(b) creates settled expectations, the
expectation is that the permit will not be cancelled for nonuse under Subchapter E.
The City may be correct that Chapter 11 does not authorize the Commission to
cancel its permit on the ground that the right has not been perfected. See id. § 11.177(a)
(authorizing commission to cancel permit after hearing and nonuse finding). But the
Legislature’s power to enact, amend, or repeal state laws is “generally limited only by federal or
state constitutional provisions or federal law”—not other legislative acts—and “as a general rule,
one ‘legislature cannot prevent future legislatures from amending or repealing a statute.’”8
Graphic Packaging Corp. v. Hegar, 538 S.W.3d 89, 104 (Tex. 2017) (quoting Central Power
& Light Co. v. Public Util. Comm’n, 649 S.W.2d 287, 289 (Tex. 1983)). Thus, the lack of an
express statutory provision authorizing the Commission to cancel a permit granting unperfected
water rights does not prevent the Legislature from enacting a law that effectively cancels the
City’s rights under the permit by requiring them to be contractually transferred to BRA, so long
as the law satisfies constitutional and federal law. And the City is presumed to know this law.
Philadelphia Indem. Ins. v. White, 490 S.W.3d 468, 483 (Tex. 2016) (“[P]arties are presumed to
know the law[.]” (quoting Texas Emp’rs Ins. Ass’n v. Tabor, 283 S.W. 779, 780 (Tex. Comm’n
App. 1926))). Especially given the unique circumstances of the Legislature’s involvement with
the Allens Creek Reservoir project for over 20 years, I cannot conclude that the City had a
8
H.B. 2846 amended S.B. 1593 by adding an additional section directing the
City to contract with BRA. See Act of May 22, 1999, 76th Leg., R.S., ch. 1291, § 1.01,
1999 Tex. Gen. Laws 4426, amended by Act of May 16, 2019, 86th Leg., R.S., ch. 380, § 1,
2019 Tex. Gen. Laws 688, 688.
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legitimate claim of entitlement that rose to the level of a vested property right against the State.
Accordingly, I would hold that the City’s asserted prior right is “not a vested property right to
which the . . . prohibition on retrospective laws appl[ies].” Cf. Honors Academy, 555 S.W.3d
at 68.
CONCLUSION
H.B. 2846 and the circumstances leading up to it are, no doubt, novel exercises of
legislative authority, and the Legislature’s policy of enacting H.B. 2846 may be reasonably
questioned. But our role as judges is to evaluate the constitutionality of a law, not its policy. It
is my opinion that, as written and interpreted by precedential authorities, the retroactivity
prohibition relied on by the City does not prohibit H.B. 2846. I therefore respectfully dissent.
__________________________________________
Melissa Goodwin, Justice
Before Justices Goodwin, Triana, and Smith
Filed: June 30, 2021
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