Texas Water Development Board v. Ward Timber, Ltd. Ward Timber Holdings Shirley Shumake Gary Cheatwood Richard Letourneauand Pat Donelson

Opinion filed May 23, 2013
In The
Eleventh Court of Appeals
_________
No. 11-12-00030-CV
_________
TEXAS WATER DEVELOPMENT BOARD, Appellant
V.
WARD TIMBER, LTD.; WARD TIMBER HOLDINGS;
SHIRLEY SHUMAKE; GARY CHEATWOOD; RICHARD
LETOURNEAU; AND PAT DONELSON, Appellees
On Appeal from the 126th District Court
Travis County, Texas
Trial Court Cause No. D-GN-11-000121
OPINION
The issue, one of first impression, is whether there is an “interregional
conflict” between the 2011 water plans of two regions that are now part of the
Texas water plan. The Texas Water Development Board (the Board) is required by
State law to adopt a comprehensive state water plan every five years that
incorporates approved regional plans. TEX. WATER CODE ANN. § 16.051(a) (West
Supp. 2012). The Board has divided the State into sixteen planning regions.
Regional planning groups must submit their plans to the Board no less than once
every five years; the first plans were due on January 5, 2001. Id. § 16.053(i).
Section 16.053(h)(7)(A) of the Water Code provides that the Board may approve a
regional water plan only after it has determined that “all interregional conflicts
involving that regional water planning area have been resolved.”
The 2011 regional water plan for the North Central Texas Regional Planning
Area (Region C) included a proposed Marvin Nichols Reservoir in the Sulphur
River Basin of the North East Texas Regional Planning Area (Region D) as a
future source of water for Region C. Region C includes Fort Worth and Dallas.
Region D’s 2011 water plan provided detailed reasons why the impact of that
proposed reservoir on Region D’s timber, agricultural, environmental, and other
natural resources constituted an interregional conflict with Region C’s plan. The
Board approved the Region D plan on October 14, 2010, and the Region C plan on
December 16, 2010. When the Board approved each plan, it expressly found that
there was no interregional conflict.
Appellees, landowners and members of the Region D planning group, sued
under TEX. WATER CODE ANN. § 6.241 (West 2008) and, as a suit for declaratory
judgment, under TEX. GOV’T CODE ANN. § 2001.038 (West 2008), seeking judicial
review of the Board’s decision approving Region C’s water plan. They contended
that, because of the “interregional conflict” between the two plans, Section 16.053
of the Water Code prohibited the Board from approving the Region C plan until
the conflict was resolved. The Board filed a plea to the jurisdiction, arguing lack
of standing and sovereign immunity, and contended that there was not an
interregional conflict under the Board’s definition of an “interregional conflict.”
By definition, an interregional conflict exists only when more than one regional
water plan relies on the same water source and there is insufficient water to fully
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implement both plans. 31 TEX. ADMIN. CODE § 357.10(15) (2012) (Tex. Water
Dev. Bd., Regional Water Planning, Definitions).
The district court denied the Board’s plea to the jurisdiction, declared that an
interregional conflict existed between the two water plans, reversed the Board’s
decision approving the two plans, and remanded the case to the Board for it to
follow its rules and the statute to resolve the conflict. We affirm.
The Board’s Issues on Appeal
The Board presents three issues: (1) whether the district court erred in
denying the Board’s plea to the jurisdiction; (2) whether the district court erred in
declaring that an “interregional conflict” existed between Region C and Region D
and declaring that the Board’s interregional conflict rules applied to the conflict;
and (3) whether the district court erred in reversing the Board’s approval of the
2011 Regional Water Plan for Region C and remanding the case back to the
agency.
Background Facts
The Texas Water Development Board, created by the state constitution, is
the state agency primarily responsible for water planning and for administering
water financing for the state. TEX. CONST. art. III, § 49-c; WATER § 6.011 (West
2008). There is a constitutional duty to conserve water as a precious resource.
TEX. CONST. art. XVI, § 59(a). To regulate and control this precious resource, the
legislature created an administrative and regulatory agency known as the Texas
Commission on Environmental Quality (the Commission), previously known as
the Texas Natural Resource Conservation Commission. WATER § 5.001(2); Tex.
Water Rights Comm’n v. Wright, 464 S.W.2d 642 (Tex. 1971); 73 TEX. JUR. 3d
Water § 9 1990).
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In 1997, the legislature changed the way Texas plans for its water future.
Instead of the “top-down” approach previously used, the legislature passed Senate
Bill 1 to build the state water plan through a “bottom-up” process. This new
process relies, to a large degree, on regional planning. Act of June 1, 1997, 75th
Leg., R.S., ch. 1010, 1997 Tex. Gen. Laws 3610.
As the water planning agency for Texas, the Board must adopt a
comprehensive state water plan every five years that incorporates approved
regional water plans. WATER § 16.051(a). Regional planning groups develop the
regional plans and must submit their adopted plans to the Board not less than once
every five years. Id. § 16.053(i). The Board reviews and approves regional water
plans under Section 16.053. Once they are approved, the Board combines the
sixteen regional plans into a state water plan that is intended to assure that future
water needs will be met while protecting significant natural and agricultural
resources and economic interests of the regions.
Chapter 16 of the Texas Water Code and the Board’s rules provide guidance
to the sixteen regional planning groups. Some items that the Board’s rules
required planning groups to address in regional plans at the time of the trial court’s
decision are listed in the Board’s reply brief:
• A description of the regional planning area that takes into account
water providers, use, water quality problems, water sources, socio-
economic data, drought preparedness, and a host of other factors;
• Current and projected population and water demands;
• The adequacy of existing water supply for use in the drought of
record;
• A water supply analysis for the drought of record;
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• Identified water strategies to meet demands during the drought of
record;
• An evaluation of the water management strategies that the
planning group identifies;
• Specific detailed recommendations of water management
strategies;
• Regulatory, administrative or legislative recommendations that the
planning group believes are needed for drought response; and
• Descriptions of the major impacts of recommended strategies on
water quality, agricultural resources, natural resources in general,
as well as financial demands and other implications of the
strategies.
See former 31 TEX. ADMIN. CODE § 357.7(a)(1)–(14) (Tex. Water Dev. Bd.,
Regional Water Plan Development) repealed 37 Tex. Reg. 5797 (2012) (effective
Aug. 12, 2012).
After the district court’s decision, the Board repealed its water planning
rules that were in effect and adopted new rules. 37 Tex. Reg. 5797 (effective date
August 12, 2012). The Board’s current rules also require regional planning groups
to address the impacts of recommended strategies on agricultural and natural
resources. See 31 TEX. ADMIN. CODE §§ 357.30, 357.34(d)(3)–(7), 357.35(c),
357.40, 357.41 (2012) (Tex. Water Dev. Bd., Regional Water Planning).
Section 357.41 provides that the planning group must describe how its regional
plan is “consistent with the long-term protection of the state’s water resources,
agricultural resources, and natural resources as embodied in the guidance
principles in § 358.3(4) and (8) of this title (relating to Guidance Principles).”
Section 16.053(a) of the Water Code requires that a regional plan provide for
the development of water resources in preparation for and in response to drought
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conditions in order that sufficient water will be available at a reasonable cost to
ensure public health, safety, and welfare; to further economic development; and to
protect the agricultural and natural resources of that particular region. Likewise,
Title 31, Section 358.3 of the Administrative Code provides that development of
the regional water plans and the state water plan shall be guided by the principles
listed in that section, one of which is that “[c]onsideration of all water management
strategies [shall be] consistent with long-term protection of the state’s water
resources, agricultural resources, and natural resources.” 31 TEX. ADMIN. CODE
§ 358.3(9) (2012) (Tex. Water Dev. Bd., State Water Planning Guidelines)
(formerly 31 TEX. ADMIN. CODE § 358.3(b)(4)).
The Board may approve a regional water plan only after it has determined
that all interregional conflicts involving that regional water planning area have
been resolved. WATER § 16.053(h)(5). If there is an interregional conflict, the
Board must first attempt to resolve the conflict through a dispute resolution process
involving the regions. WATER § 16.053(h)(6). If the conflict cannot be resolved
by the regions, the Board is required to resolve the conflict. Id.
Section 16.053(h)(7) provides for Board approval:
(7) The board may approve a regional water plan only after it
has determined that:
(A) all interregional conflicts involving that
regional water planning area have been resolved;
(B) the plan includes water conservation practices
and drought management measures incorporating, at a
minimum, the provisions of Sections 11.1271 and
11.1272; and
(C) the plan is consistent with long-term protection
of the state’s water resources, agricultural resources, and
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natural resources as embodied in the guidance principles
adopted under Section 16.051(d).
In 2010, the Board approved the 2011 regional water plans for the North
Central Texas Regional Planning Area (Region C) and for the North East Texas
Regional Planning Area (Region D). The Region C water plan recommended
water management strategies, including water conservation and reuse, three new
major reservoirs (Marvin Nichols Reservoir was one), and utilization of other
surface water sources. If implemented, the recommended strategies would provide
approximately 2.3 million acre-feet per year of additional water supply by the year
2060: water for the projected population increase from 6,670,493 in 2010 to
13,045,592 by 2060. In recommending approval of the Region C water plan, the
Board’s staff stated that it had reviewed the Plan for interregional conflicts and
found none.
The regional water plan for Region D was prepared by the planning group
with Bucher, Willis, & Ratliff Corporation and various engineering firms.
Chapter 7.0 described how the Region D plan was consistent with the long-term
protection of the state’s water resources, agricultural resources, and natural
resources as required by the Administrative Code. Chapters 7.0 and 8.0 addressed
the impact of the Marvin Nichols Reservoir on the long-term protection of those
resources, concluding that it was “the position of the [North East Texas Regional
Water Planning Group] that inclusion of the Marvin Nichols I Reservoir [was] not
consistent with the long-term protection of the State’s water resources, agricultural
resources, and natural resources.”
Subchapter 8.13.1 of the Region D plan points out that the 2005 Region D
planning group had also concluded that the proposed Marvin Nichols Reservoir
was not consistent with protecting the timber, agricultural, environmental, and
other natural resources and third parties in the Region D area. According to
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Appellees, the Board ignored Region D’s concerns about the overall impact of the
proposed Marvin Nichols Reservoir during that earlier planning cycle.
Subchapters 7.6.1 and 7.6.2 of the 2011 Region D plan discussed the impact
on agricultural resources and the timber industry. It was estimated that the Marvin
Nichols Reservoir would flood 66,000 to 70,000 acres, mainly in Red River
County but also in portions of Bowie, Titus, and Morris Counties. Included in the
flooded acreage would be 33,000 to 53,000 acres of forest lands, including
Priority 1 bottomland hardwoods and wetlands. Besides the timber and
agricultural land that would be lost due to the reservoir, mitigation requirements
were anticipated to greatly impact agricultural resources. After a detailed study,
the Texas Parks and Wildlife Department and the United States Fish and Wildlife
Service Study concluded that a minimum of 163,620 acres would be required for
mitigation and that the number could be as high as 648,578 acres. In a March 2003
report prepared for the Sulphur River Basin Authority, Weinstein and Clower in
“The Economic, Fiscal and Developmental Impacts of the Proposed Marvin
Nichols Reservoir Project” estimated an agricultural land loss of 165,000 to
200,000 acres. The Region D water plan contains more discussion of the probable
impacts should the Marvin Nichols Reservoir be built. Even at the planning stage,
it is evident that the impacts would be substantial.
Despite the impact findings in Region D’s water plan and Region D’s
contention that there were interregional conflicts, the Board accepted and approved
Region C’s plan. The Board expressly found that there were no interregional
conflicts. Appellees seek only the opportunity for the Region D water planning
group to negotiate with the Region C water planning group, under the guidance of
the Board, to see if there is a more acceptable alternative to Region D than the
Marvin Nichols Reservoir. The district court found that Region C’s water strategy
8
of building the Marvin Nichols Reservoir was an interregional conflict with
Region D’s long-term protection of Region D’s water resources, agricultural
resources, and natural resources. Therefore, the district court reversed the Board’s
approval of the Region C water plan and remanded this case to the Board for it to
follow the procedures in Section 16.053(h)(6) of the Water Code:
If an interregional conflict exists, the board shall facilitate
coordination between the involved regions to resolve the conflict. If
conflict remains, the board shall resolve the conflict. On resolution of
the conflict, the involved regional water planning groups shall prepare
revisions to their respective plans and hold, after notice, at least one
public hearing at some central location within their respective regional
water planning areas. The regional water planning groups shall
consider all public and board comments; prepare, revise, and adopt
their respective plans; and submit their plans to the board for approval
and inclusion in the state water plan.
Appellees state that the purpose of their suit is only to require the Board to
follow the procedures in Section 16.053(h)(6). Their purpose is not to fix property
rights; it is to have the Board resolve conflicts with a goal of a more complete and
balanced water plan. Appellees point out that “Region D has identified other areas
in [Region D] where additional water and even reservoirs could be developed or
expanded to provide water for other regions without the economic and other losses
the [Region D planning] group projects for the Marvin Nichols site.”
Summary of the Two Views of Water Planning
The Board characterizes the planning process as identifying water supply
needs for the uses specified in its rules and identifying possible strategies to meet
those needs. The Board contends that the conflicts raised by Appellees may be
addressed when the Commission begins the permitting process for the actual
building of the Marvin Nichols Reservoir; that, therefore, Appellees have no
standing for judicial review of the Board’s approval of the two plans because the
9
reservoir may never be built; and that Appellees cannot show harm to their rights
at this point. The Board does not deny there is a conflict in the respective plans
concerning the Marvin Nichols Reservoir; it takes the position this is not a conflict
within the meaning of Section 16.053 of the Texas Water Code. The Board
defines an “interregional conflict” under Section 16.053 as arising when “more
than one regional water plan attempts to rely upon the same water source, so that
there is not sufficient water available to fully implement both plans and would
create an over-allocation of that source.” 31 ADMIN. § 357.10(15).
The Board further reasons that Appellees are concerned with the impact on
Region D’s resources if the Marvin Nichols Reservoir is built for Region C’s water
supply, a concern that does not involve a “use” of water from the proposed Marvin
Nichols Reservoir. See former 31 ADMIN. § 357.7. The Board points out that
Appellees are not arguing Region D wants water from the proposed Marvin
Nichols Reservoir for one of those uses.
Appellees contend that the Board’s position defeats the purpose of
Section 16.053 of the Texas Water Code, the regional water planning statute that
directs regional planning groups to identify and recommend strategies for water
use while protecting significant agricultural and natural resources. The text of
Chapter 16 reflects the intent of the legislature that conflicts between regions
involving a proposed water strategy and its effect on resources should be addressed
as early as possible. Appellees point out that the Board in the 2007 state water
plan requested the legislature to fund the purchase of the Marvin Nichols Reservoir
site. The legislature complied, designating Marvin Nichols as a unique reservoir
site. WATER § 16.051(g-1); Hearts Bluff Game Ranch, Inc. v. State, 381 S.W.3d
468, 475 (Tex. 2012). Under the Board’s view, the Commission would not address
the fundamental conflicts posed here until after the funding is provided and the
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permitting process is underway. Appellees assert that the Board’s position will
waste time, effort, and money as opposed to the simple statutory procedure the
legislature has provided for the Board to follow.
The Board focuses on regulatory policy and regulatory decisions, stating that
“[n]either the development nor the approval of a regional water plan is regulatory
in nature. Approval of a regional plan does not fix the legal rights of a person
seeking a permit for a project, nor those of an affected person seeking to support or
protest a project.” Appellees agree because they are not seeking to have any rights
fixed. Appellees point out that this is not a suit that would impose liability on the
Board. They seek only to have the Board follow the statutory guide that
encourages regional planning groups to resolve conflicts through negotiation.
Appellees are only challenging the Board’s approval of the two plans because the
Board omitted the requisite procedural steps to resolve an interregional conflict
before approving the plans.
The Board states that “Appellees approach in this case appears to be based
on the erroneous assumption that the planning process is the functional equivalent
of a permit hearing.” We do not understand that to be Appellees’ approach.
Appellees only want the Board to follow Section 16.053 of the Water Code and the
Board’s own rules as reflected in former 31 TEX. ADMIN. CODE § 357.14 and give
the two regions an opportunity to negotiate alternatives to the proposed Marvin
Nichols Reservoir. The Administrative Code provided in relevant part:
(8) In the event the board finds that an interregional conflict
exists between adopted regional water plans, the executive
administrator shall:
(A) notify the affected regional water planning
groups of the nature of the interregional conflict;
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(B) request affected regional water planning
groups assistance in resolving the conflict; and
(C) negotiate resolutions of conflicts with regional
water planning groups and other interested parties as
determined by the executive administrator.
(9) In the event negotiations conducted under paragraph (8) of
this subsection to resolve conflicts between adopted regional water
plans are unsuccessful, the executive administrator shall:
(A) determine a proposed recommendation for
resolution of the conflict;
(B) provide notice of its intent to hold a public
hearing on proposed recommendations for resolution of
the conflict by publishing notice of the proposed change
in the Texas Register.
Former 31 ADMIN. § 357.14 (emphasis added).
We note that, in the current 31 TEX. ADMIN. CODE § 357.62, the Board has
changed the wording to “the [executive administrator] may use” the negotiating
process (emphasis added). In the event that the Board has to resolve the
interregional conflict, the current Section 357.62 provides that “[t]he Board’s
decision is final and not appealable.”
Appellees acknowledge that Region D will need to provide more water to
Region C besides the substantial amounts of water it already provides. Their
desire is for the Region D planning group to have a mediated negotiation with
Region C because of the impact the Marvin Nichols Reservoir would have on
Region D.
In its reply brief, the Board states:
[I]f the case were remanded for TWDB to attempt to resolve the
alleged interregional conflict, the most the law affords them is another
opportunity to make public comments on the regional plan. . . . Since
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the Water Code does not provide Appellees with any additional input
into the process other than the ability to make additional comments,
there is no guarantee that a remand will remedy the harm they claim.
Section 16.053(h)(6) of the Water Code provides that “the board shall facilitate
coordination between the involved regions to resolve the conflict.” Resolving a
conflict does not mean that one side makes a few comments. Former 31 TEX.
ADMIN. CODE § 357.14 and current 31 TEX. ADMIN. Code § 357.62 appropriately
interpret the statute to mean that the Board will help the regions “negotiate” a
resolution. Negotiating involves the sharing of information between the two
regions. Appellees recognize that it will be the Region D water planning group
that will negotiate for Region D.
Jurisdictional Issues
In the first issue, the Board argues that the district court erred in denying its
plea to the jurisdiction. The Board argues that (1) there is no statute authorizing
judicial review of the Board’s decision in approving Region C’s water plan,
(2) there is no waiver of sovereign immunity, and (3) Appellees have no standing
to seek judicial review of the Board’s decision. It is important to keep in mind this
is not an appeal to review the merits of the Board’s decision in approving a
regional water plan, which would involve the substantial evidence rule. 1 The
appeal involves the issue of whether the Board reached its decision without
complying with one of the statutory requirements. The applicability of that
statutory requirement turns on whether there was an “interregional conflict”
between the two plans.
1
See Tex. Water Comm’n v. Dellana, 849 S.W.2d 808 (Tex. 1993), where the supreme court held
that Section 5.351 of the Texas Water Code authorizes judicial review of the Commission decisions, but
only after a party has exhausted all available administrative remedies.
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Standing
Sovereign immunity and standing are separate issues. In their petition,
Appellees provided a summary of their interests to demonstrate their standing to
sue for judicial review under Section 6.241 of the Texas Water Code and to seek a
declaratory judgment under Section 2001.038 of the Texas Government Code that
there was an interregional conflict between the two water plans that required
resolution before the Board approved the two plans. Ward Timber, Ltd. and Ward
Timber Holdings (Ward Timber) are companies involved in the development of
forest products in Region D. Ward Timber has over 100 employees and harvests
approximately 100,000 tons of timber each year on lands within the Sulphur River
Basin where the Marvin Nichols Reservoir site is located. Ward Timber claimed
that it would be adversely affected by the construction of the proposed Marvin
Nichols Reservoir because the reservoir would inundate a substantial amount of
that timberland.
Shirley Shumake owns land that would be flooded by one of the proposals
for the Marvin Nichols Reservoir; she is also a past and current member of the
Region D water planning group. She claimed that the Region C water plan
adversely affected her property values and her ability to plan for the productivity of
her ranch operations. Gary Cheatwood also owns land that would be flooded by
the Marvin Nichols Reservoir. He was a member of the Region D water planning
group. Richard LeTourneau also owns land that would be flooded; he was a
member of the Region D water planning group and served as chairman of the
group. Pat Donelson owns the Cross Arrow Ranch; a substantial part of the ranch
would be inundated by the Marvin Nichols Reservoir.
Appellees alleged that the Board’s approval of the Region C water plan
impairs Appellees’ ability to borrow money or make investments on their property
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within the proposed site of the Marvin Nichols Reservoir. Investment decisions for
planting trees, timber harvesting, and agricultural endeavors depend on whether the
Marvin Nichols Reservoir remains a unique reservoir site and a viable strategy.
All of the Appellees participated in the Region D planning process. Appellees
recognize that negotiations may fail and that the Board may resolve the conflict in
favor of Region C. However, Region D will have had an opportunity at the
planning stage to present alternative strategies to Region C that may have a lesser
impact on Region D.
Texas law traditionally required a claimant to possess a common-law or a
statutory right of action or, in public rights cases, to have a personal interest in the
enforcement of the public right because the claimant has suffered or is threatened
with some damage peculiar to himself. William V. Dorsaneo, III, The Enigma of
Standing Doctrine in Texas Courts, 28 REV. LITIG. 35 (2008). In 1993, Texas
replaced the traditional ideas with federal standing doctrine and elevated the law of
standing to jurisdictional status in Texas Association of Business v. Texas Air
Control Board, 852 S.W.2d 440, 445–46 (Tex. 1993). Article III of the United
States Constitution limits federal judicial power to resolving “Cases” and
“Controversies”; thus, a lack of standing deprives a federal court of subject-matter
jurisdiction. See Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). Professor
Dorsaneo points out that the adoption of the federal standing doctrine has
complicated Texas procedural law because it has embraced a complex body of
federal constitutional law without clearly explaining “whether a claimant must
possess a legal injury resulting from the breach of a legal duty, or whether some
other type of interest or injury is sufficient to satisfy Texas’s standing
requirements.” Dorsaneo, The Enigma of Standing Doctrine in Texas Courts, 28
REV. LITIG. at 36. He points out that the Texas Supreme Court recognized that the
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federal standing doctrine has both prudential and jurisdictional components and
stated that “[t]his Court has not indicated whether standing is always a matter of
subject-matter jurisdiction.” Coastal Oil & Gas Corp. v. Garza Energy Trust, 268
S.W.3d 1, 9 n.16 (Tex. 2008).
This case would appear to be one where standing arguably should not be a
matter of subject-matter jurisdiction. Our analysis, however, will follow Texas
jurisprudence regarding challenges to governmental action. Viewing standing as a
component of subject-matter jurisdiction, we consider it as we would a plea to the
jurisdiction, construing the pleadings in favor of the plaintiffs. Brown v. Todd, 53
S.W.3d 297, 305 n.3 (Tex. 2001).
The United States Supreme Court, applying standing principles that are
analogous to this situation, explained that the “irreducible constitutional minimum”
of standing consists of three elements:
• the plaintiff must have suffered an “injury in fact—an invasion of a
“legally protected” interest that is concrete and particularized and
that is actual or imminent, not conjectural or hypothetical;
• the injury must be fairly traceable to the challenged action of the
defendant and not the independent action of a third party not
before the court; and
• it must be likely, not merely speculative, that the injury will be
redressed by a favorable decision.
Lujan, 504 U.S. at 560–61; see Good Shepherd Med. Ctr., Inc. v. State, 306
S.W.3d 825, 833 (Tex. App.—Austin 2010, no pet.); Save Our Springs Alliance,
Inc. v. City of Dripping Springs, 304 S.W.3d 871, 878 (Tex. App.—Austin 2010,
pet. denied).
An “injury in fact” is conceptually distinct from whether the plaintiff has
incurred a “legal” injury (a viable cause of action on the merits). See Hunt v. Bass,
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664 S.W.2d 323, 324 (Tex. 1984); Good Shepherd Med. Ctr., 306 S.W.3d at 833.
And, the required infringement of a “legally protected” interest does not
necessarily have to rise to the level of depriving the plaintiff of a “vested right” to
violate due process. Good Shepherd Med. Ctr., 306 S.W.3d at 833. But a plaintiff
must show it has or imminently will suffer an invasion of some “legally protected”
interest sufficiently unique to the plaintiff, as distinguished from the general
public. Id.
The Board argues that (1) Appellees do not have an “injury in fact” because
the Marvin Nichols Reservoir may never be built; (2) Appellees cannot trace the
Board’s approval of the two regional plans to any actual, imminent, concrete or
particularized harm suffered by them; and (3) the Board’s approval decision did
not fix rights or obligations and, therefore, this case does not involve a justiciable
controversy and will result in an advisory opinion.
Appellees argue that they have standing because they are challenging the
Board’s approval of Region C’s plan only because of its inaction on the
interregional conflict, “not [the] future construction of the Marvin Nichols
[R]eservoir.” Appellees’ alleged harm results from the Board’s failure to
recognize and resolve the interregional conflict between Regions C and D.
Appellees assert that Texas case law includes several instances involving
challenges to governmental decisions analogous to the challenge involved here.
We agree their cited cases have merit.
Appellees cite Hays County v. Hays County Water Planning Partnership,
106 S.W.3d 349 (Tex. App.—Austin 2003, no pet.), where the court of appeals
considered the standing of an association (the Partnership) to challenge Hays
County’s approval of a transportation plan submitted to the Capital Area
Metropolitan Planning Organization (CAMPO) by Hays County. CAMPO
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coordinates transportation planning and approves use of federal transportation
funds for a large area that includes Hays County. 106 S.W.3d at 353. The
Partnership asserted that the submitted plan had been altered after the meeting
approving the plan, resulting in the county’s submission to CAMPO of a
substantially different plan from that adopted at the meeting. The court of appeals
held that the Partnership had standing because a “published intention for future
roadway development” in an area covered by a transportation plan was enough to
cause “potential and immediate economic loss” to association members. Id. at 357.
The harm in Hays is not dissimilar from the harm to Appellees here.
Region C’s water plan is incorporated in the state water plan. The Board’s approval
of the state water plan impairs Appellees’ ability to invest in property
improvements. By the Board’s action, the Marvin Nichols Reservoir site has been
designated by the legislature as a “unique reservoir site.” See WATER § 16.051(g-1).
Requesting millions from the legislature for purchasing the Marvin Nichols
Reservoir site expresses a “published intention” for that reservoir to be built in the
future. The Board first designated the Marvin Nichols Reservoir as a reservoir site
in the state water plan in 1968. Hearts Bluff Game Ranch, 381 S.W.3d at 474.
That was long before the comprehensive regional water planning required by
Chapter 16 that tasks each region to identify interregional conflicts or potential
conflicts. See WATER § 16.053(h)(5).
In Shackelford v. City of Abilene, 585 S.W.2d 665 (Tex. 1979), the supreme
court refused to construe the “particularized harm” requirement narrowly.
Shackelford, a reporter for a local television station, sought to enjoin the Abilene
Equal Employment Opportunity Board from holding closed meetings where the
board was considering allegations of discrimination against a city employee. 585
S.W.2d at 667. Shackelford alleged that the closed meetings violated the city
18
charter’s provision requiring open meetings. The court of appeals held that the
reporter did not have standing because he did not have a particular interest
different from the general public. Id. Reversing, the supreme court held that,
under the city charter, Shackelford had standing “as a citizen of Abilene.” Id. at
668. In this case, Appellees have interests separate from the general public in
seeing that the Board follows the procedures in Chapter 16 for eliminating
interregional conflicts.
The case of Dillard Texas Operating Limited Partnership, L.P. v. City of
Mesquite, 168 S.W.3d 211 (Tex. App.—Dallas 2005, pet. denied), is also
instructive on the issue of standing in the type of case now before us. Dillard
appealed the trial court’s grant of a plea to the jurisdiction in its case against the
City of Mesquite and a waste hauler. Dillard contended that the city had illegally
entered into an exclusive contract for waste management and that Dillard should
not be required to use that provider. 168 S.W.3d at 213. The appellate court held
that Dillard had standing to sue, seeking a declaratory judgment that Mesquite
violated its charter by granting the waste hauler exclusive rights to haul
commercial waste, and that the trial court had subject-matter jurisdiction and erred
in granting the plea. Id. at 215. Citing Shackelford, the court rejected the
argument of Mesquite and the waste hauler that Dillard did not have standing
because Dillard had not incurred a “particularized injury” or harm distinct from
any allegedly incurred by the general public. Id. at 214. The court also rejected
Mesquite’s argument that there was no justiciable controversy.
In Housing Authority of City of Harlingen v. State, 539 S.W.2d 911 (Tex.
Civ. App.—Corpus Christi 1976, writ ref’d n.r.e.), occupants of a low-income
housing project sought an injunction and other relief contending the city housing
authority did not have the right to make monthly $50 lump sum payments to each
19
commissioner of the authority for undocumented expenses. The court held that
the occupants had standing to challenge the authority’s right to make the payments
and that the payments were not authorized by the “Housing Authorities Law” (then
TEX. REV. CIV. STAT. art. 1269k (repealed 1987)). 539 S.W.2d at 917.
In summary, first, Appellees own property interests affected by both water
plans; that sets them apart from the general public interest in the Board following
its procedures. Second, their alleged “injury in fact” results from the Board’s
failure to recognize and resolve the alleged interregional conflict; that failure
impacts their property because it denies Region D an opportunity to resolve the
conflict with Region C. Third, their injury probably will be redressed by a
favorable court decision to have the regions resolve the conflict or the Board
resolve the conflict. The trial court did not err in finding that Appellees had
standing to sue and that their suit involved a justiciable controversy. Like the
reporter in Shackelford seeking to compel the Abilene board to follow the Open
Meetings Act and the city charter, Dillard seeking to compel the City of Mesquite
to void a contract with a waste hauler in violation of the city charter, and the
occupants in City of Harlingen contending the local housing authority was making
unauthorized payments to the commissioners, Appellees seek to have the regions
or the Board resolve what Appellees argue is an interregional conflict under the
statute.
We turn next to the Board’s claim that Appellees’ suit is barred by sovereign
immunity.
Statutory Waiver of Sovereign Immunity
Appellees contend that Section 6.241 of the Water Code and
Section 2001.038(a) of the Government Code authorize judicial review of the
Board’s action in ignoring the statute on interregional conflicts and further support
20
their standing to challenge the Board’s action. Appellees argue that Section 6.241
and Section 2001.038(a) waive sovereign immunity for Board administrative
decisions where the suit is not for money damages from the State. We agree.
This is a case of first impression addressing Section 6.241 of the Water
Code; it has not been the subject of a Texas case. Section 6.241 provides that a
person may seek judicial review of a “ruling, order, decision, or other act” of the
Board. The Board claims that Section 6.241 does not waive sovereign immunity
and that, therefore, the case should be dismissed for lack of subject-matter
jurisdiction.
The Board argues that the statutory scheme negates the availability of
judicial review under Section 6.241 in this case. If a groundwater conservation
district disagrees with how the Board resolved a conflict between its approved
groundwater management plan and an approved state water plan,
Section 16.053(p) authorizes the district to seek judicial review of the Board’s
decision. By contrast, the Board points out, Chapter 16 does not provide for
judicial review of the Board’s decisions on interregional conflicts. Because the
legislature did not provide a judicial review provision in Chapter 16, the Board
contends that “[t]here simply is no clear and unambiguous waiver of immunity
under Texas Water Code § 6.241 for the type of lawsuit that the Appellees have
brought.”
We disagree with the Board’s position that judicial review of the Board’s
actions under Chapter 16 is limited to a conflict between a groundwater
management plan and the state’s water plan. Section 6.241, entitled “Judicial
Review of Acts,” contains the following provisions:
(a) A person affected by a ruling, order, decision, or other act of
the board may file a petition to review, set aside, modify, or suspend
the act of the board.
21
(b) A person affected by a ruling, order, or decision of the board
must file his petition within 30 days after the effective date of the
ruling, order, or decision. A person affected by an act other than a
ruling, order, or decision must file his petition within 30 days after the
date the board performed the act.
(c) Orders, decisions, or other actions of the board pursuant to
Subchapters E and F of Chapter 16 and to Chapter 17 of this code are
not subject to appeal (footnote omitted, emphasis added).
There would be no reason for the legislature to except subchapters E and F of
Chapter 16 unless the legislature meant for Section 6.241 to apply to orders,
decisions, or other actions of the Board under the remaining subchapters of
Chapter 16. We hold that Section 6.241 applies to rulings, orders, decisions, or
other acts of the Board under Section 16.053 (which are not in subchapter E or F),
including the Board’s final approval of a regional water plan. We see no reason to
ignore the plain text of Section 6.241.
Section 5.351 of the Texas Water Code provides for judicial review of
Commission acts and contains identical language to paragraphs (a) and (b) in
Section 6.241. However, Section 5.351 does not have a paragraph (c). The Board
points out that the Texas Supreme Court held in Texas Natural Resource
Conservation Commission v. IT-Davy, 74 S.W.3d 849 (Tex. 2002), that
Section 5.351 did not waive sovereign immunity. The Board argues, therefore, by
analogy, that Section 6.241 also does not. IT- Davy had sued the Commission for
additional payments under a contract with the Commission. The IT-Davy court
began its analysis with the reminder that sovereign immunity protects the state
from lawsuits for money damages, citing General Services Commission v. Little-
Tex Insulation Co., 39 S.W.3d 591, 594 (Tex. 2001). 74 S.W.3d at 853. IT-Davy
sought money from the state; therefore, sovereign immunity was applicable. The
22
Board’s attempt to analogize the IT-Davy court’s holding concerning Section 5.351
to the role of Section 6.241 in this case is not an appropriate analogy. The supreme
court explicitly held that Section 5.351 did not waive sovereign immunity “under
the facts” in IT-Davy. Id.
The more appropriate analogy is the role of Section 5.351 in providing for
judicial review in cases involving permits. Section 5.351 allows “[a] person
affected by a ruling, order, decision, or other act of the commission” to petition a
Travis County trial court “to review, set aside, modify, or suspend the act of the
commission.” In cases involving permits, courts have found that Section 5.351
allows parties to sue following a final decision by the Commission; the courts have
obviously recognized that Section 5.351 waives sovereign immunity in those cases
provided the plaintiff has exhausted its administrative remedies. See Tex. Water
Comm’n v. Dellana, 849 S.W.2d 808 (Tex. 1993) (Section 5.351 authorized
judicial review of the Commission’s decision to deny Hunter Industrial Facilities’
application for hazardous waste disposal permit, but Hunter had not exhausted its
administrative remedies); City of Waco v. Tex. Comm’n on Envtl. Quality, 346
S.W.3d 781 (Tex. App.—Austin 2011, pet. granted) (City is an affected person
under Section 5.115(a) and can sue under Section 5.351 concerning a dairy’s water
permit application that would affect Lake Waco water quality.); Tex. Comm’n on
Envtl. Quality v. Kelsoe, 286 S.W.3d 91 (Tex. App.—Austin 2009, pet. denied)
(party not allowed to sue because he filed his judicial review petition late); Heat
Energy Advanced Tech., Inc. v. W. Dallas Coalition for Envtl. Justice, 962 S.W.2d
288 (Tex. App.—Austin 1998, pet. denied) (Coalition of residents had standing to
challenge facility’s application for renewal permit.).
Here, the decision of the Board approving the water plans of Regions C and
D is analogous to the Commission’s decision involving a permit. The legislature
23
has not provided a separate administrative procedure for one region to challenge
another region’s plan. Region D’s planning group followed the only
administrative procedure available by pointing out the purported interregional
conflict with Region C’s plan and submitting its plan for approval. The Board
issued a final decision when it approved Region C’s water plan. Region D
exhausted the administrative procedure before Appellees filed suit. We further
note that Section 5.351 allows standing to sue following a final permit decision by
the Commission. It follows that, by analogy, Section 6.241 allows standing to sue
following a final decision by the Board in approving a water plan.
The Board’s argument is that cases such as these show that Appellees’
claims are not yet final—finality will occur in the permitting process under the
Commission—and that an appeal following a final permit decision by the
Commission is the appropriate forum for Appellees to seek redress for injury to
their property rights. Appellees are not seeking such redress, only the resolution of
the purported conflict. Appeal following a permit decision will be too late for a
negotiation between Region C and Region D to see if there is an alternative water
strategy that will not have the impact on Region D that the Marvin Nichols
Reservoir site does.
The Board’s position effectively means its definition of interregional conflict
cannot be challenged. Yet, the Texas Supreme Court has stated that administrative
orders are final and appealable if they impose an obligation, deny a right, or fix
some legal relationship as consummating the administrative process. City of
Austin v. Tex. Comm’n on Envtl. Quality, 303 S.W.3d 379, 384 (Tex. App.—
Austin 2009, no pet.) (citing Tex.–N.M. Power Co. v. Tex. Indus. Energy
Consumers, 806 S.W.2d 230, 232 (Tex. 1991)). The Board argues that there are
only proposals for the Marvin Nichols Reservoir and that there are many
24
conditions that must be met before the reservoir becomes a reality. In Texas–New
Mexico Power Company, the supreme court considered whether an order of the
Public Utility Commission of Texas (PUC) conditionally approving a certificate of
convenience and necessity for construction of a power plant was final and
appealable. Because of the numerous conditions and restrictions imposed by the
PUC, the trial court dismissed the administrative appeal for want of jurisdiction.
The court of appeals affirmed, reasoning that the absence of “the necessary permits
from the other agencies” made it impossible to know if the power company would
obtain the approval of those agencies. 806 S.W.2d at 231. The supreme court
reversed, holding that the order was final and reasoning that regulated parties and
consumers must be afforded an opportunity for timely judicial review of actions
that affect them. In determining finality, courts should consider the statutory
context in which the agency operates. Id. at 232.
The Board’s decision approving Region C’s plan was a final decision for the
planning process. Region D followed the administrative process for water
planning in Chapter 16. The statutory context here, Section 16.053, requires
regional groups to address a number of factors in their plans with emphasis on
possible water strategies and the impact of the strategies on agricultural resources
and natural resources. The Board misconstrues the purpose of Appellees’ suit. It
repeatedly argues that approval of a regional plan does not fix the legal rights of a
person seeking a permit for a project or those of an affected person seeking to
support or protest a project. True. But the only right Appellees seek here is their
right, as Region D citizens directly affected, to have the Board follow the statute
and its own rule requiring it to assist regions in negotiating a resolution where
there is an interregional conflict.
25
Neither Sun Oil Company v. Railroad Commission of Texas, 311 S.W.2d 235
(Tex. 1958), nor Moody v. Texas Water Commission, 373 S.W.2d 793 (Tex. Civ.
App.—Austin 1963, writ ref’d n.r.e.), cited by the Board, is helpful. Prior to the
enactment of the statute applicable in Moody, there was no statutory procedure
whereby the views of the state could be given to Congress on a federal water
impoundment project. 373 S.W.2d at 796. The appellate court in Moody found
that the commission had complied with the requirements of the statute, that the
governor had notified the federal agency of the action of the commission
approving the feasibility of the project, and that the matter had become moot. Id.
at 796–98. The statute was a narrow one that the court found provided no appeal
for judicial review of the commission’s decision.
Sun Oil also lacks relevance to this case. The railroad commission’s order
was the result of an investigation and expressed its view that certain truck
movements into the state should be subject to higher intrastate rates if the shipper
first stored the goods after they entered Texas and then subsequently delivered the
goods to well sites; the intrastate rates should apply to the transportation after the
goods were removed from storage. 311 S.W.2d at 236 n.2. The Sun court held
that the order was not a final administrative order that was judicially reviewable
because the order did not prevent Sun from contending the traffic in question to be
interstate if the railroad commission ever proceeded against Sun. Id. at 297. The
supreme court admitted that it was difficult to distinguish the order before it from
that held reviewable in Frozen Food Express v. United States, 351 U.S. 40 (1956).
Id. In the case before us, the Board has taken a final action with respect to
approval of Region C’s water plan; no further action is needed.
26
Section 2001.038 also provides statutory authority for the district court’s
judicial review of the Board’s action. Section 2001.038(a) authorizes a declaratory
judgment action to determine the “applicability of a rule”:
(a) The validity or applicability of a rule . . . may be determined
in an action for declaratory judgment if it is alleged that the rule or its
threatened application interferes with or impairs, or threatens to
interfere with or impair, a legal right or privilege of the plaintiff.
Section 2001.038 is a grant of original jurisdiction and waives sovereign
immunity. Tex. Logos, L.P. v. Tex. Dep’t of Transp., 241 S.W.3d 105, 123 (Tex.
App.—Austin 2007, no pet.); Tex. Dep’t of Human Servs. v. ARA Living Ctrs. of
Tex., Inc., 833 S.W.2d 689, 693 (Tex. App.—Austin 1992, writ denied). The
section also provides that “[a] court may render a declaratory judgment without
regard to whether the plaintiff requested the state agency to rule on the validity or
applicability of the rule in question.” GOV’T § 2001.038(d).
Appellees sought a declaratory judgment regarding the applicability of the
Board’s former Rule 357.14 (currently Rule 357.50(j)(2)). Former Rule 357.14
required the Board to consider “information from regional water planning groups
of the existence of an interregional conflict” and to find “that no interregional
conflict exists” before approving a regional water management plan. Former 31
ADMIN. § 357.14(3). Current Rule 357.50 contains the same requirement. Where
there is an interregional conflict, the Board must take steps to resolve it. See
WATER § 16.053(h)(6).
The Board decided that the rules on resolving interregional conflicts did not
apply to the type of conflict identified by the Region D planning group. Appellees
contend that the rules do apply and that the unresolved interregional conflict
should have prevented the Board from approving Region C’s water plan until the
27
conflict between the two regional water plans was resolved. See WATER
§ 16.053(h)(7).
It is true that the state water plan recommends water strategies, some of
which will not be built. A fair reading of the text of Chapter 16, however,
indicates that the legislature meant for there to be a comprehensive planning
process, balancing strategies against their impacts on agricultural, economic, and
natural resources. Resolving interregional conflicts through negotiation is part of
that balancing. As provided in Section 16.053(h)(7), the Board may approve a
regional water plan only after it has determined that:
• all interregional conflicts involving that regional water planning
area have been resolved;
• the plan includes water conservation practices and drought
management measures incorporating, at a minimum, the provisions
of Sections 11.1271 and 11.1272; and
• the plan is consistent with long-term protection of the state’s
water resources, agricultural resources, and natural resources as
embodied in the guidance principles adopted under Section
16.051(d) (emphasis added).
Section 6.241 and Section 2001.038 provide for judicial review of the
Board’s order that approved Region C’s plan under Chapter 16. The trial court did
not err in denying the Board’s plea to the jurisdiction. The first issue of the Board
is overruled.
Does An Interregional Conflict Exist?
In its second issue, the Board contends that the district court erred in
declaring that an “interregional conflict” existed between Region C and Region D
and declaring that the Board’s interregional conflict rules applied to the conflict.
Because the legislature did not define “interregional conflict,” the issue is the
28
meaning of “interregional conflict” within the context of Chapter 16 of the Water
Code.
The construction of a statute is a question of law we review de novo. R.R.
Comm’n of Tex. v. Tex. Citizens for a Safe Future & Clean Water, 336 S.W.3d
619, 624 (Tex. 2011); First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631
(Tex. 2008); F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 683
(Tex. 2007). Our primary objective in statutory construction is to give effect to the
legislature’s intent. State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). We seek
the legislature’s intent first and foremost in the statutory text. Lexington Ins. Co. v.
Strayhorn, 209 S.W.3d 83, 85 (Tex. 2006). We rely on the plain meaning of the
text unless a different meaning is supplied by legislative definition or is apparent
from the context or unless such a construction leads to absurd results. City of
Rockwall v. Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008).
The Board points out that the legislature has defined the purpose of state
water planning:
[To] provide for the orderly development, management, and
conservation of water resources and preparation for and response to
drought conditions, in order that sufficient water will be available at a
reasonable cost to ensure public health, safety, and welfare; further
economic development; and protect the agricultural and natural
resources of the entire state.
WATER § 16.051(a).
Section 16.053(a) contains similar language that directs the regional
planning group to develop a plan for sufficient water to be available at a reasonable
cost to ensure public health, safety, and welfare; further economic development;
and protect the agricultural and natural resources of “that particular region.” The
premise of Appellees’ argument is that the Marvin Nichols Reservoir will not
supply water at a reasonable cost when one considers the cost of its probable
29
adverse impact on Region D’s economic development and on Region D’s
agricultural and natural resources.
The intent of the legislature concerning water planning is broader than the
statements in Sections 16.051(a) and 16.053(a). From reading the entire
Chapter 16, it is evident that the legislature wants the state water plan to be
comprehensive: (1) to assure that future water needs will be met while protecting
regional interests and significant natural and agricultural resources in the state and
(2) to not have conflicts or internal inconsistencies. The legislature created an
interregional dispute resolution process to resolve conflicts that may arise between
two or more regional plans. Each region is tasked to identify interregional
conflicts or potential conflicts. See WATER § 16.053(h)(5); 31 ADMIN. § 357.50(f),
(j).
As stated at the outset, the legislature changed water planning into a more
democratic “bottom-up” process that involves groundwater districts and regional
planning groups. Section 16.053(d) requires the Board to provide guidelines for
regional water planning groups. Section 16.051(d) provides that the Board, in
adopting guidance principles, should give due consideration “to the construction
and improvement of surface water resources and the application of principles that
result in voluntary redistribution of water resources” (emphasis added). See 31
ADMIN. § 358.3(10). One of the principles in former Section 358.3(b) and in
current Section 358.3(9) of the Administrative Code is that consideration of all
water management strategies shall be “consistent with long-term protection of the
state’s water resources, agricultural resources, and natural resources.”
Section 16.053(h)(7) provides that the Board may approve a regional water
plan only if (1) all interregional conflicts have been resolved, (2) the plan includes
water conservation practices and drought measures, and (3) “the plan is consistent
30
with long-term protection of the state’s water resources, agricultural resources,
and natural resources as embodied in the guidance principles adopted under
Section 16.051(d)” (emphasis added). The Board’s former Section 357.14 (now
Section 357.62), providing for its assistance in negotiations, is an application of the
principles in Sections 16.053(h)(7) and 16.051(d) that will assist “in voluntary
redistribution of water resources” of areas such as Region D.
No business would plan for a project without considering the costs of that
project and its impact on the business’s resources. From the plain text of
Section 16.051, the legislature expressed its intent that the water planning process
should encompass an assessment of a proposed water strategy and its impact. To
defer assessment of a water strategy’s impact until the Commission’s permitting
process would encourage bureaucratic inertia and discourage a fair evaluation of
the impacts of a water strategy that has been part of a water plan for a period of
time and may have been partially funded.
Both Region C and Region D recognize that their plans should involve
evaluating the impacts of a water strategy, not simply identifying that strategy.
Chapter 7.0 of the Region D water plan described how the Region D water plan “is
consistent with” the long-term protection of the State’s water resources,
agricultural resources, and natural resources and explained the inconsistency of any
Marvin Nichols Reservoir (proposed by Region C) in protecting these resources.
Region D stated several times in its plan that the Marvin Nichols Reservoir site
was not consistent with the long-term protection of the state’s water resources,
agricultural resources, and natural resources.
In the 2011 Region C water plan at page 4C.14, the Region C water planning
group summarized its decision for the next steps: “Evaluate Marvin Nichols
Reservoir, Lower Bois d’Arc Creek Reservoir, Lake Ralph Hall, George Parkhouse
31
Lake (North and South), Lake Columbia, and Lake Tehuacana as potentially
feasible strategies.”
Region C recognized that, although new reservoirs represent a large source
of potential supply for Region C, environmental and economic impacts of reservoir
development are concerns that need to be evaluated. The 2011 Region C water
plan at page 4C.13 briefly listed those impacts to include inundation of wetlands
and other wildlife habitat, including bottomland hardwoods; changes to
streamflows and streamflow patterns downstream; impacts on inflows to bays and
estuaries; and impacts on threatened and endangered species. Region D identified
several impacts and concluded that the impacts of the Marvin Nichols Reservoir
outweighed a selection of the strategy. Both regions appear to understand the
legislature’s intent for the planning process, as expressed in Sections 16.051 and
16.053, to include evaluating the impact of a proposed water strategy.
The Board’s regulations outlining guiding principles for regional water plans
require that the impacts of water strategies be analyzed. Regional water planning
groups must give consideration to threats to agricultural and natural resources and
how those threats will be addressed or affected by the water management strategies
evaluated in the plan. 31 ADMIN. § 357.30(12). 2 In evaluating potentially feasible
water strategies, regional water planning groups are to analyze the
“[e]nvironmental factors including effects on environmental water needs, wildlife
habitat, cultural resources, and effect of upstream development on bays, estuaries”
and “[i]mpacts to agricultural resources.” 31 ADMIN. § 357.34(d)(3)(B), (C).
Planning groups are to select “cost effective water management strategies, which
are consistent with long-term protection of the state’s water resources, agricultural
2
At the time of the trial court’s decision, former Section 358.3(b)(3) was in effect; it provided that
the planning group must give consideration to “the effect of policies or water management strategies on
the public interest of the state, water supply, and those entities involved in providing this supply
throughout the entire state.”
32
resources, and natural resources.” 31 ADMIN. § 357.35(c). The social and
economic impacts of moving water from rural and agricultural areas are to be
analyzed. 31 ADMIN. § 357.34(d)(7).
The regional water plan shall include a description of the impacts of the
water plan regarding agricultural resources, other water resources of the state,
threats to agricultural and natural resources identified pursuant to
Section 357.34(d)(5), third-party social and economic impacts resulting from
voluntary redistribution of water, major impacts of strategies on water quality, and
effects on navigation. 31 ADMIN. § 357.40 (Impacts of Regional Water Plan).
Former Section 357.7(a)(13) provided that the regional plan should contain
“a chapter describing how the regional water plan is consistent with long-term
protection of the state’s water resources, agricultural resources, and natural
resources as required in [former] § 357.14(2)(C).” The current Section 357.41
provides that the planning groups shall describe how their regional water plan is
“consistent with the long-term protection of the state’s water resources, agricultural
resources, and natural resources as embodied in the guidance principles in
§ 358.3(4) and (8) of this title (relating to Guidance Principles).” 31 ADMIN.
§ 357.41. The guidance principles in Section 358.3 also require that regional
planning groups consider the effects of water management strategies.
It is surprising the Board does not consider that the impact of a major water
strategy can constitute an interregional conflict, especially here where Region D’s
plan stated repeatedly that the impact of the proposed Marvin Nichols Reservoir
posed a clear interregional conflict and backed the claim with engineering studies.
The Board expresses a concern that, if its definition of “interregional
conflict” is rejected, the Board will be mired down in many small conflicts:
A variety of things could be classified under the heading of
“interregional conflict,” including differences of opinions on the
33
regulatory recommendations that planning groups are required to
submit to TWDB; or estimates of future needs in small, discrete
portions of a planning region; or any number of other facets of the
planning process.
We disagree. Region D interprets “interregional conflict” to encompass the type of
major conflict here between Region C’s proposed major reservoir in Region D and
its impact on the resources in Region D. Region D has examined the impacts;
Region C has decided to evaluate the impacts of the Marvin Nichols Reservoir in
the future as part of its planning process. Region C will recognize there is an
interregional conflict when it evaluates the impact of the Marvin Nichols Reservoir
strategy. Although we are of the opinion that the term is unambiguous, the Board
can solve its dilemma by amending the rule defining an interregional conflict to
include its present definition and the present situation where a region has studied
the impacts and finds there is a substantial conflict. As earlier stated, each region
is tasked by statute to identify interregional conflicts or potential conflicts. See
WATER § 16.053(h)(5).
Region D’s plan had an entire section on the conflict between the Marvin
Nichols Reservoir and its negative impacts on the timber industry, other
agricultural resources, and economic resources of Region D. Region C’s plan
contains little comment on the strategy’s impact on Region D. A review of the
Board’s file reflects that, from the time that Region D submitted its plan and had it
approved and from the time that Region C submitted its plan and had it approved,
less than ninety days elapsed. The short period occurred even though the plans are
several hundred pages long with large amounts of data to process and evaluate. A
thorough review process will take time. The plain language of the statutes and
accompanying regulations indicates that an emphasis should be placed on
34
balancing water uses and supply and their effect on agricultural and natural
resources and other economic resources.
By complying with Section 16.053(h)(6) and facilitating coordination
between the two regions to resolve the major conflict in the two plans, the Board
will be carrying out the purpose of the state water plan. Region C had the
assistance of Freese and Nichols, Inc. in preparing its regional water plan.
Region D had the assistance of Bucher, Willis & Ratliff Corporation. To assist the
respective regions, these firms addressed or planned to address the items the Board
rules required the planning groups to address, including those listed above. The
ninth item listed by the Board as one required to be addressed in regional plans is
“descriptions of the major impacts of recommended strategies on water quality,
agricultural resources, natural resources in general, as well as financial demands
and other implications of the strategies.” Simply having members of these two
engineering firms, along with a few representatives from the two regions, for
negotiating sessions may lead to a solution that both regions find acceptable and
that facilitates a “voluntary redistribution of water resources.”
The Board interprets the term “interregional conflict” in Chapter 16 to exist
only “when more than one regional water plan relies upon the same water source,
so that there is not sufficient water available to fully implement both plans and
would create an over-allocation of that source.” 31 ADMIN. § 357.10(15). An
agency’s interpretation of a statute that it is charged with administering is entitled
to serious consideration unless the agency’s construction is clearly inconsistent
with legislative intent. Tex. Water Comm’n v. Brushy Creek Mun. Util. Dist., 917
S.W.2d 19, 21 (Tex. 1996) (citing Tarrant Appraisal Dist. v. Moore, 845 S.W.2d
820, 823 (Tex. 1993)). We find that the Board’s interpretation is clearly
inconsistent with legislative intent.
35
The legislature made clear its intent for regional planning groups to consider
important resources early in the planning process. For example,
Section 16.053(e)(6) requires that a planning group identify “river and stream
segments of unique ecological value” that the regional planning group
recommends for protection under Section 16.051.
The legislature intended for the state water plan to play an important role in
the Commission’s permitting process. In City of Marshall v. City of Uncertain,
206 S.W.3d 97 (Tex. 2006), the City of Marshall sought a water-rights amendment
to its 1986 certificate of adjudication that recognized a right to divert and use up to
16,000 acre-feet of water from Cypress Creek. The City of Uncertain and others
opposed the amendment application and sought a contested-case hearing, which
the Commission had held was not required. The Texas Supreme Court concluded
that, while TEX. WATER CODE ANN. § 11.122(b) (West 2008) significantly
restricted the issues that may be reviewed in a contested-case proceeding, it did not
preclude a contested-case hearing:
Depending upon the particular amendment application, a hearing may
be necessary to allow the Commission to assess certain limited criteria
other than the application’s effect on other water-rights holders and
the on-stream environment that the Legislature considered necessary
to protect the public interest, including assessment of water
conservation plans, consistency with the state and any approved
regional water plans, and groundwater effects.
206 S.W.3d at 99 (emphasis added). Section 11.134(b)(3)(E) of the Water Code
provides that the Commission generally cannot issue new water rights for any use
that is inconsistent with the regional plan. TEX. WATER CODE ANN.
§ 11.134(b)(3)(E) (West 2008).
The Board uses the state water plan for its recommendations to the
legislature for the appropriation of state funds. The Board recommended public
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funding to purchase land for reservoir sites in the 2007 state water plan; the Marvin
Nichols Reservoir was one of the sites. Section 16.051(g-1) provides that “a site is
considered to be a designated site of unique value for the construction of a
reservoir if the site is recommended for designation in the 2007 state water plan
adopted by the board.” WATER § 16.051(g-1). The Marvin Nichols Reservoir is
now a designated site of unique value for constructing a reservoir. But it does not
make sense for the legislature to provide funding for the Marvin Nichols Reservoir
site until the interregional conflict raised by Appellees is resolved.
Section 16.053 applies to the regional water planning groups and the Board.
The regional planning groups are directly impacted by the statutory language, and
they are well-suited to identify interregional conflicts based on the common
meaning of that term. The district court owed no deference to the Board’s
interpretation of an unambiguous term. The district court correctly determined that
the two plans contain an interregional conflict that the Board should help the two
regions resolve. The Board’s second issue is overruled.
The District Court’s Judgment
From the briefs, it appears that the Board has confused the planning process
and the permitting process under the current approach to water planning. The
planning process should encompass possible water strategies and the impact those
water strategies will have on the agricultural and natural resources of the region
involved, especially when an interregional transfer of water is involved. The
Region D planning group in its Region D plan made a preliminary case that there is
a substantial interregional conflict with Region C’s plan, and that should be
sufficient for the Board to require the two regional planning groups to attempt to
resolve that conflict.
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The Board admits that regional water planning groups must consider many
of the same issues considered in the permitting process. We agree. This is one.
However, even though the information concerning the probable impact of a water
strategy will be less detailed in the planning stage than during the permitting stage,
the Board and affected regions must resolve interregional conflicts in the planning
process.
The Board has been focused on viewing Appellees’ suit as one seeking a
determination of their individual rights in a permitting process. Perhaps the Board
is concerned that the two regions will not resolve the conflict as the Board would,
but that becomes a possibility when planning is placed with regional planning
groups instead of being a “top-down” plan by the Board. By now, the two regions
might have selected alternative strategies for Region C that will not impact
Region D to the extent that the Marvin Nichols Reservoir will. But, even if the
two regions cannot agree on alternative water strategies for Region C, the Board is
in a position to resolve the conflict in the manner that is most consistent with
protecting the state’s agricultural and natural resources. In view of the statutorily
required five-year period for developing a plan, the negotiation period between the
two regional planning groups will be limited. At the end of the time period, the
Board must resolve the conflict for planning purposes if the two regions cannot
reach agreement. Understandably, all parties, including the Board, are in a
learning phase in an attempt to meet the legislature’s intent and goals for a
comprehensive state water plan. That is demonstrated by the Board’s rewriting its
rules after the decision of the trial court.
Appellees are seeking to have the Board follow the procedure outlined in the
statute and in the Board’s rules. Assessing a water strategy’s impact on
agricultural and natural resources and on other economic resources of the state and
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then resolving major interregional conflicts during the planning phase will result in
a more considered plan. The Board’s third issue is overruled.
This Court’s Ruling
We affirm the judgment of the district court.
TERRY McCALL
JUSTICE
May 23, 2013
Panel consists of: Wright, C.J.,
McCall, J., and Willson, J.
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